LENDLEASE GROUP — Annual Report 2007

Aug 14, 2007

15 August 2007

The Manager The Manager Companies Section Companies Section

Australian Stock Exchange Limited New Zealand Stock Exchange Limited

Pages: Two Hundred and Thirty Seven Pages (237) pages

Dear Sir

Stock Exchange Announcement

Full Year Results – June 2007

Lend Lease Corporation Limited ("Lend Lease") today announces its full year results for the year ended 30 June 2007. Attached are the following documents:

• Stock Exchange and Media Announcement
• Preliminary Final Report (Appendix 4E)
• Full Year Consolidated Financial Report
• − Management Discussion & Analysis of Financial Condition and Results of Operations
• − Portfolio Report
• − Five Year Profile
• − Directors' Report
• − Consolidated Financial Statements
• − Independent Auditor's Report
• Full Year Concise Financial Report
• − Directors' Report
• − Five Year Profile
• − Concise Management Discussion & Analysis of Financial Condition and Results of Operations
• − Concise Consolidated Financial Statements
• − Independent Auditor's Report
• Presentation to be made to media and analysts.

Yours faithfully LEND LEASE CORPORATION LIMITED

S J SHARPE Company Secretary

Lend Lease Corporation Limited Telephone +612 9236 6111 ABN 32 000 226 228 Facsimile +612 9252 2192 Level 4, 30 The Bond www.lendlease.com 30 Hickson Road Millers Point NSW 2000 Australia

Stock Exchange & Media Statement

Lend Lease exceeds profit expectations and extends development pipeline for long term earnings growth

• FY2007 Statutory Profit of A\$497.5 million after tax up 20%
• Net Operating Profit after tax up 26% to A\$445.9 million
• Final dividend up 35% to 42 cents per share
• Full year dividend up 26% to 77 cents per share
• Retail & Residential Development pipeline A\$45 billion
• Construction Backlog Gross Profit Margin increased to a record A\$792.9 million

15 August 2007

Lend Lease Corporation Limited ("Lend Lease") delivered a strong Statutory Profit of A\$497.5 million after tax for the year ended June 2007. This includes A\$32.2 million after tax in interest from the Australian Taxation Office ("ATO") as a result of the long running dispute which has now been resolved. Statutory Profit also includes net gains from property investment revaluations of A\$51.6 million after tax.

Excluding the ATO interest noted above, Net Operating Profit was A\$413.7 million after tax, up 17% on the result for the prior year. This exceeds market consensus and is well ahead of management's objective of achieving an average growth in earnings per share ("EPS") of 10% p.a. over a five-year period.

Reflecting its strong performance, Lend Lease declared a final dividend of 42 cents per share franked to 50%, bringing total dividends for the year ended June 2007 to 77 cents per share, 26% higher than the previous full year dividend. The full year dividend represents a payout ratio of 69% of after tax operating earnings, within the Board's current target payout range of 60-80%.

	June 2007 A\$m (after tax)	June 2006 A\$m (after tax)	% change
NET OPERATING PROFIT	445.9 (1)	354.2	26
Property Investment Revaluations	51.6	61.0	(15)
STATUTORY PROFIT	497.5	415.2	20
Full Year Dividend (2)	77¢	61¢	26

(1) Excluding ATO interest of A\$32.2 million, Net Operating Profit to June 2007 was A\$413.7 million after tax

(2) The final dividend is 50% franked; the interim dividend for the period ended December 2006 was 50% franked

Lend Lease Managing Director and CEO, Greg Clarke, said the Company maintained strong momentum in earnings growth, while significantly expanding its pipeline of projects which will deliver long term earnings streams from its Development, Construction and Investment Management businesses.

"Net operating earnings exceeded market expectations despite the provision made in the UK construction operations during the first half and the tough residential market in Australia. This demonstrates the resilience of the Group's diversified operations. Actus Lend Lease in the US, the Investment Management business and Bovis Lend Lease in Asia Pacific all made stand-out contributions and our Retail & Communities business secured a number of major new projects," Mr Clarke said.

"The Company continued to recycle its capital, realising approximately A\$1.1 billion in proceeds while reinvesting around A\$1.3 billion in its pipeline to secure future earnings growth opportunities. Importantly, at June 2007 Lend Lease had increased its invested capital base to A\$4.4 billion from A\$4.1 billion at June 2006.

"Lend Lease enjoys very strong operating cash flows and is well placed to deliver continued earnings and dividend growth to drive shareholder value over the medium to long term," Mr Clarke said.

Group Chief Operating Officer, Ross Taylor, said Lend Lease maintained strong momentum in building its pipeline of development, construction and investment management opportunities.

"We had a successful year in terms of securing a number of high quality projects such as Stratford City Athletes Village, which will generate long term, integrated earnings from our development, construction, asset and investment management operations," Mr Taylor said.

"The Group also made good progress in extending its integrated operating strategy into the UK, US and Singapore.

"Lend Lease finished the year with a Retail & Communities development pipeline of approximately A\$45 billion, and a Construction Backlog Gross Profit Margin of A\$792.9 million, a record level.

"Bovis Lend Lease performed strongly in Asia Pacific, the Americas and Continental Europe, and we have stabilised the UK operation following the first half provision.

"We continue to identify and deliver investment opportunities for our clients in the Investment Management business in Asia Pacific such as Somerset Central in Singapore and 420 George Street in Sydney, and we are well placed to create new opportunities for investors around development assets in the UK over the next two to three years," Mr Taylor said.

Major development pipeline additions during the year ended June 2007 included:

• Rocky Springs a new community project with a potential 13,000 lots in Australia;
• The A\$730 million Somerset Central retail development in Singapore;
• Two new US military base privatised housing projects with an initial construction value of approximately US\$450 million; the first stage of a base hotel lodging redevelopment program valued at US\$400 million; and the Group's first two private sector residential community project sites in the US; and
• The £5.5 billion Stratford City redevelopment project.

Post the year end, Lend Lease continued to add to its pipeline in the UK with the recently announced £\$1.5 billion mixed-use, inner urban regeneration project at Elephant & Castle in London and a 50% interest in the £600 million retail and residential urban regeneration project at Preston.

The Investment Management business continued to contribute to the Group's integrated business model. Major initiatives included creation of the Lend Lease Asian Retail Investment Fund with its seed asset being 75% of the Somerset Central development and the launch of the Lend Lease Communities Fund 1, which acquired interests in several Delfin Lend Lease land development projects. Funds Under Management, excluding joint venture interests, increased by 27%.

Group Financials

Lend Lease performed well against its key financial performance indicators.

Earnings per share continued to grow in line with operating earnings and return on equity exceeded management's targeted 15% p.a. for the first time since the Group was restructured in 2003. Interest coverage was 7.9 times, comfortably in excess of the targeted minimum 6 times, and 84% of the Group's debt is at fixed rates with long term maturity. Annuity style earnings from property assets and Funds Under Management represented 23% of total earnings, well above the target of 15-20%, which supports the Group's investment grade credit rating.

Group Finance Director, Steve McCann, said: "Lend Lease maintains a very robust financial position, with significant capacity to fund growth opportunities. Gross Debt to Total Tangible Assets stood at 15.6% at 30 June 2007.

"Our target gearing range is 30-40%, but the strong cash flows from recycling capital have meant we were able to expand the development pipeline and increase the Group's invested capital base during the year, without significantly increasing debt.

"However, the Group's current three year business plan envisages an increase in debt. We expect to reach the lower end of our target gearing range by the end of the plan period. This takes into account investment in our current development pipeline and continued capital recycling," Mr McCann said.

Outlook

Mr Clarke said while the Australian residential market remained patchy, the Group's US and UK Retail & Communities businesses maintained a good outlook and global construction markets were buoyant.

"We have an excellent platform in each of the businesses in each of our regional markets, and increasingly the three businesses are working together to secure longer term projects that will deliver multiple earnings streams for Lend Lease.

"Lend Lease is well placed to deliver ongoing growth in shareholder value," Mr Clarke said.

ENDS

Results Summary Year ended June 2007

Profit After Tax	June 2007	June 2006	%
	A\$m	A\$m	change
Operating Businesses
ƒ Retail & Communities	183.4	167.5	9
ƒ Project Management, Construction & PFI	57.6	134.6	(57)
ƒ Investment Management	262.8	129.5	103
Total	503.8	431.6	17
Corporate
ƒ Group Services	(60.0)	(52.0)	15
Group Treasury ƒ	5.1	(22.4)	N/A
ƒ Amortisation	(3.0)	(3.0)	-
NET OPERATING PROFIT	445.9	354.2	26
Property Investment Revaluations	51.6	61.0	(15)
STATUTORY PROFIT	497.5	415.2	20

Earnings Per Share (EPS) (1)	June 2007 ¢ per share	June 2006 ¢ per share	% change
Operating Profit	111.4	88.7	26
Statutory Profit	124.3	104.0	19

⁽¹⁾ EPS is calculated using the weighted average shares on issue including treasury shares. Under the Australian equivalents to International Financial Reporting Standards (AIFRS), shares held in employee benefit vehicles including employee share plans, which Lend Lease sponsors, are treated as treasury stock and are excluded from the calculation. This would have the effect of increasing the EPS calculations above if applied.

Business Review

Retail & Communities

The 9% growth in after tax profit for the Retail & Communities business was a pleasing result given the tough market conditions experienced by the Australian Communities business and the absence of a major retail asset sale this year.

The global Communities operation was up 36% compared to the prior year. Actus Lend Lease was a stand-out performer and the Group expects it to continue to deliver a strong result again this year. The Australian and UK Communities businesses benefited from higher commercial sales. Although residential units settled were down on FY2006, sales momentum going into FY2008 is stronger, setting the business up well for the year ahead. However, the Group is not expecting to achieve the same level of commercial sales this year.

The Communities pipeline in the UK significantly increased beyond the Crosby backlog with the announcement of Lend Lease as the preferred partner at the Stratford City project and the Elephant & Castle project.

Overall, the business achieved significant momentum in building its future earnings base, adding new retail, mixeduse community and US military housing opportunities to its development pipeline in Asia Pacific, the UK and the US.

Group COO, Ross Taylor, said: "Taking into account the A\$45 billion pipeline at June 2007 and recent project wins, Lend Lease now has a potential pipeline of opportunities totalling just over A\$60 billion in development value, spanning the retail, communities and privatisation sectors across the three regions in which we operate."

The Retail pipeline was A\$5.3 billion at June 2007 including the acquisition of the Somerset Central retail development site in Singapore. In addition, post balance date Lend Lease confirmed that it was in exclusive negotiations on the £600 million Preston retail opportunity and the £1.5 billion Elephant & Castle mixed-use regeneration project.

The Communities pipeline grew with the selection of Actus Lend Lease as preferred bidder for the US\$400 million PAL military lodgings program. This is the first project to be awarded under the US Army lodgings program. Actus reached preferred bidder status on an additional two projects and reached financial close on four projects which significantly increased Backlog GPM.

Lend Lease expanded its Communities platform in the US beyond the Actus operations with two projects in the Denver area – Horizon City and Lowry Range. Together, these mixed-use community projects offer a potential 15,900 residential dwellings and 1.3 million square metres non-residential development potential, with an estimated end sales value of A\$2.3 billion.

Project Management, Construction & PFI

Despite the provision announced earlier this year, the Project Management, Construction & PFI business completed the year ended June 2007 with an increased Backlog GPM of A\$792.9 million, up 16% on the closing Backlog GPM at June 2006. This excludes projects in preferred bidder status.

The Asia Pacific and Americas operations performed well in terms of New Work Secured, which was A\$505.8 million for the year globally (A\$511.6 million – June 2006).

Mark Menhinnitt, Global CEO for Bovis Lend Lease, said: "Continental Europe, Asia Pacific and the US operations all performed very well and have maintained a strong operating outlook.

"Bovis completed the year with a record Backlog Gross Profit Margin, despite taking the provision in the UK in the first half, which demonstrates the underlying strength of the business.

"Our focus is now on getting the right risk return profile for the business in each of the regions.

"We are now significantly advanced on de-risking the UK operation and most of the underperforming projects in that region will be complete by this December," Mr Menhinnitt said.

Investment Management

The Investment Management business performed strongly, with the launch of two new funds, and a significant increase in Funds Under Management.

Two new wholesale funds were launched during the year, with committed equity of over A\$650 million. These were the Lend Lease Communities Fund 1 and the Lend Lease Asian Retail Investment Fund, which bought a 75% stake in the Somerset Central asset on Orchard Road, Singapore. The Group's co-investment in these funds is approximately A\$80 million.

Lend Lease continued to deliver strong performance for managed funds such as APPF (20%+ p.a. total return for the retail and commercial funds) and the new Core Plus Fund, which delivered a total return of 12% in its first year compared to the target return of 10% p.a.

Group Finance Director and Global CEO Investment Management, Steve McCann, said: "The business grew core Funds Under Management by around 27%, excluding joint venture interests which we have now exited.

"Lend Lease attracted significant new equity to APPF and launched the new Lend Lease Asian Retail Investment Fund during the year. This reflects our continuing strong fund performance and the support we enjoy from our growing wholesale investor base.

"During the year, we expanded our Investment Management resources to ensure we can both fully leverage and support the Group's significant pipeline.

"We now have a very strong platform to grow Funds Under Management in Asia Pacific and the UK over the short to medium term. We will continue to be responsive to investor needs in identifying investment opportunities and leveraging our integrated business model for the benefit of both our clients and Lend Lease," Mr McCann said.

ENDS

Further information:

Sally Cameron John Frey Lend Lease Corporation Cosway Australia Tel: 02 9236 6464 Tel: 0411 361 361

Lend Lease Corporation Limited

ABN 32 000 226 228

Appendix 4E

Preliminary Final Report for the financial year ended 30 June 2007 (previous corresponding period being the financial year ended 30 June 2006)

Results for Announcement to the Market

Key Information

	June 2007 A\$m	June 2006 A\$m	% Change
Revenue	14,281.9	12,126.8	17.8
Profit after tax attributable to members	497.5	415.2	19.8
Profit for the period attributable to members	497.5	415.2	19.8

Dividends

	Amount per security	Franked amount per security
Interim Dividend – Paid 27 March 2007	35.0 cents	17.5 cents
Final Dividend – Payable 12 September 2007	42.0 cents	21.0 cents
Total amount per security	77.0 cents	38.5 cents

The record date for determining entitlement to the final dividend is 29 August 2007.

On 12 February 2007, the Company announced the suspension of the Share Election Plan with effect from 1 March 2007. In addition, the Dividend Reinvestment Plan and Share Purchase Plan remain suspended.

The Company advises that the whole of the unfranked amount of the final dividend has been declared to be conduit foreign income.

The remainder of the information requiring disclosure to comply with listing rule 4.3A is contained in the attached audited June 2007 Annual Consolidated Financial Report and the additional information section below.

Additional Information

Net Tangible Assets

	June 2007	June 2006
Net Tangible Assets per security	\$6.12	\$5.51

The June 2007, June 2006 and June 2005 results have been prepared under Australian equivalents to International Financial Reporting Standards.

The Annual General Meeting

The Annual General Meeting will be held at Dockside, The Balcony Level, Cockle Bay Wharf at Darling Park, Sydney, NSW, 2000 at 10:00 am on Thursday, 15 November 2007. The Annual Report will be available in October 2007.

Introduction1
Results Summary1
Profit After Tax 1
Shareholder Returns 2
Dividends2
Credit Strength 2
Cash Flow3
Retail and Communities4 Key Financial Results 4
Retail4
Overview of Business4
Retail – Asia Pacific5
Retail – Europe5
Communities6
Overview of Business6
Communities – Asia Pacific 6
Communities – Europe8
Crosby Lend Lease8
Other Communities – United Kingdom9
Communities – Americas 9
Actus Lend Lease 9
Other Communities – Americas10
Investment Management 11
Overview of Business11
Key Financial Results 11
Funds Under Management 12
Investments 12
Property Investment Revaluations13
Project Management, Construction and Private Finance Initiatives14
Key Financial Results 14
Bovis Lend Lease 14
Private Finance Initiatives 15
Corporate16
Group Services 16
Group Treasury16

All currency amounts in the MD&A are expressed in Australian dollars unless otherwise specified.

The following discussion and analysis is based on the Group's consolidated financial statements for the year ended 30 June 2007 and should be read in conjunction with those financial statements.

Overview

Introduction

The Group's lines of business are focused on three geographic regions: Asia Pacific, Americas and Europe.

• − The Retail business comprises retail property management, asset management and development in Australia, Singapore and the United Kingdom (UK);
• − The Communities business is involved in the development of large scale urban regeneration and greenfield development projects in Australia, the United States of America (USA) and the UK. This business line includes privatisation services in the USA;
• − Investment Management provides real estate investment management services in Asia Pacific and the UK. Investment Management includes the Group's ownership interests in property investments in Asia Pacific, the UK and the USA. Ownership interests are held directly or indirectly through investments in Lend Lease managed funds;
• − Project Management, Construction and Private Finance Initiatives (PFIs) provides construction, project management and design services across all regions through Bovis Lend Lease and includes the PFI business in Europe.

Results Summary

	Revenue		EBITDA		Profit/(Loss) After Tax1
	June 2007 A\$m	June 2006 A\$m	June 2007 A\$m	June 2006 A\$m	June 2007 A\$m	June 2006 A\$m
Retail and Communities	1,857.0	2,384.9	258.1	245.3	183.4	167.5
Investment Management	171.0	134.8	310.6	174.8	262.8	129.5
Project Management, Construction and PFIs	12,167.9	9,576.6	57.1	187.0	57.6	134.6
Total operating businesses	14,195.9	12,096.3	625.8	607.1	503.8	431.6
Group Services	8.3	8.1	(80.6)	(85.3)	(60.0)	(52.0)
Group Treasury	77.7	22.4	5.9	4.7	5.1	(22.4)
Group Amortisation					(3.0)	(3.0)
Total corporate	86.0	30.5	(74.7)	(80.6)	(57.9)	(77.4)
Total operating	14,281.9	12,126.8	551.1	526.5	445.9	354.2
Property investments revaluations2			82.7	99.4	51.6	61.0
Total statutory	14,281.9	12,126.8	633.8	625.9	497.5	415.2

1 Profit after tax is after deducting the amount attributable to minority interests of A\$2.7 million (June 2006: A\$7.4 million).

2 Represents the unrealised valuation increases on property investments that are consolidated or accounted for using the equity method in the financial statements.

Profit After Tax

The Group's statutory profit after tax increased by 20% to A\$497.5 million. The Group recognised revaluation uplifts on its retail investments through the income statement of A\$51.6 million after tax (June 2006: A\$61.0 million).

The Retail business continued to consolidate its position with the successful opening of the Golden Square Shopping Centre in Warrington, UK and the commencement of construction of the Somerset Central development in Singapore. The Retail business profit after tax declined as no retail developments were sold in the current year whereas the prior year included a profit from the sale of the Chapelfield retail centre.

The Communities business profit after tax increased with the higher contributions from Crosby Lend Lease (Crosby) and Actus Lend Lease (Actus). Actus reached financial close on four projects and was named preferred bidder on another three projects in the year. In addition, the US Communities business signed a binding development agreement on the Lowry Range project in Denver, Colorado.

Investment Management launched two new funds in the year. In Australia, the Lend Lease Communities Fund 1 (LLCF1) was launched in July 2006 and the Lend Lease Asian Retail Investment Fund (ARIF) was launched in Singapore in December 2006, with final close for this fund completed in May 2007. In Europe, profit after tax increased due to the significant profit distributions received from the Group's investment in Lend Lease Global Properties, SICAF (Global Fund) and the sale of the Group's interest in Generali Lend Lease (GLL).

Project Management, Construction and PFIs' profit after tax decreased in the year as a result of the A\$118.8 million after tax provision reported at December 2006, which was taken against certain UK projects including the Manchester Joint Hospitals project. Bovis Lend Lease increased profit after tax in both Asia Pacific and the Americas.

Overview continued

Profit After Tax continued

PFIs' profit after tax reflects increased equity returns from investments and the recovery of bid costs. However, profit after tax decreased as the prior year included profit arising from the Lend Lease and Bank of Scotland PFI joint venture where the parties equalised their investment in 11 PFI projects.

Corporate costs before tax decreased, however corporate costs after tax increased due to the prior year including the reversal of a tax provision.

Group Treasury profit after tax increased due to the recognition of interest income following a favourable judgement in the Federal Court on a tax dispute with the Australian Taxation Office (ATO).

Property investment revaluation gains of A\$51.6 million after tax were recognised through the income statement. In addition, revaluation gains of A\$44.9 million after tax are not included in statutory profit but are recognised in the Fair Value Revaluation Reserve in the financial statements. The value of Lend Lease's interest in Bluewater also increased, however as Bluewater is held as inventory, the asset is recorded at historical cost in the financial statements.

Shareholder Returns

		June 2007	June 2006
Earnings per share (EPS) on operating profit1 EPS on statutory profit1 Return on equity (ROE) on statutory profit2	cents cents %	111.4 124.3 15.7	88.7 104.0 14.7

1 EPS is calculated using the weighted average shares on issue including treasury shares. Under the Australian Equivalents to International Financial Reporting Standards (AIFRS), shares held in employee benefit vehicles including employee share plans, which Lend Lease sponsors, are treated as treasury stock and are excluded from the calculation. This would have the effect of increasing the EPS calculations above if applied.

2 ROE is calculated based on statutory profit after tax and average equity.

Dividends

A final 50% franked dividend of 42 cents per share will be paid on 12 September 2007 (June 2006: 31 cents per share fully franked). On a full year basis, this equates to a total dividend of 77 cents which is a payout ratio of 69.2% of operating profit after tax.

Credit Strength

		June 2007	June 2006
Net debt1	A\$m	526.1	286.5
Net debt to total tangible assets	%	6.2	3.9
Net debt to shareholders' equity plus net debt	%	14.0	8.7
Interest coverage2	times	7.9	7.8
Credit rating (Standard & Poor's/Moody's)	rating	BBB-/Baa3	BBB-/Baa3

1 Net debt is borrowings less cash.

2 Calculated as operating EBITDA plus interest revenue divided by gross borrowing costs, including capitalised borrowing costs.

The Group's gearing remained low throughout the year and interest coverage at 7.9 times is above the Group's internal targets. The Group continues to maintain an investment-grade credit rating.

Overview continued

Cash Flow

	June 2007 A\$m	June 2006 A\$m
Net cash provided by operating activities	357.2	660.3
Net cash used in investing activities	(382.7)	(910.1)
Net cash provided by financing activities	57.1	233.8
Effect of exchange rate changes on cash and cash equivalents	(41.0)	5.9
Net decrease in cash and cash equivalents	(9.4)	(10.1)

Operating cash flows of A\$357.2 million reflect the strong underlying cash flows from the Group's operating businesses net of continued investment in property developments. The decrease from the prior year is primarily attributable to June 2006 including the proceeds on the sale of the Chapelfield retail centre of A\$532.0 million.

Investing cash outflows of A\$382.7 million reflects the Group's recycling of capital including co-investments in new investment management funds launched in the year (LLCF1 and ARIF) offset by capital redemptions from the Global Fund. The prior year included the acquisition of Crosby of A\$619.3 million.

Net cash provided by financing activities of A\$57.1 million includes £300.0 million borrowings raised from the issue of the 6.125% annual coupon guaranteed notes in the UK public bond market in October 2006, offset by the net repayment of £185.0 million in respect of the £350.0 million syndicated bank facility in the UK and dividend payments of A\$237.2 million.

Retail and Communities

Key Financial Results

The key financial results for the Retail and Communities business are summarised below.

	Revenue			EBITDA		Profit/(Loss) After Tax
	June 2007 A\$m	June 2006 A\$m	June 2007 A\$m	June 2006 A\$m	June 2007 A\$m	June 2006 A\$m
Retail	48.6	724.1	(2.3)	44.6	(3.0)	30.9
Communities	1,808.4	1,660.8	260.4	200.7	186.4	136.6
Total Retail and Communities	1,857.0	2,384.9	258.1	245.3	183.4	167.5

Retail

Overview of Business

Lend Lease focuses on shopping centres with expansion potential in growing catchment areas. This business strategy is to secure integrated positions, which play to the Group's core skills and involve all components of the property value chain (ownership, development, construction and management). The Retail business is focused on three markets: Australia, Singapore and the UK.

During the year the business continued to grow its operations through:

• − Acquiring an ownership interest in a further five retail centres together with their related development and property management rights. A direct ownership interest was acquired in Somerset Central, Singapore; Paradiz Centre, Singapore and Pakenham Place, Melbourne while an indirect ownership interest was obtained in Pakenham Place, Melbourne; Caroline Springs Square, Melbourne and 420 George Street, Sydney via the Group's investment in APPF Retail;
• − Securing the right to acquire a 50% interest in the Park Place retail development in Croydon, UK, subject to certain commercial conditions;
• − Increasing Gross Lettable Area (GLA) under management to 926,100 square metres (sqm) (June 2006: 763,100 sqm);
• − Increasing the development pipeline to A\$5.3 billion (June 2006: A\$4.2 billion).

The Group's retail interests are summarised below.

	June 2007	June 2006
Ownership1
Number of centres	23	18
Market value of Lend Lease Interest2 (\$b)	3.3	3.0
Total GLA (sqm – thousands)	1,407.7	1,330.9
Asset Management
Number of centres	16	12
Assets under management (\$b)	12.0	9.8
GLA under management (sqm – thousands)	926.1	763.1
Development Pipeline
Number of centres	11	12
Gross estimated development cost (\$b)	5.3	4.2
Estimated additional GLA (sqm – thousands)	344.2	321.7

1 Lend Lease's ownership interests are held directly or indirectly via managed funds.

2 Market value is based on independent valuations and is net of project-specific debt.

Retail and Communities continued

Retail continued

The key financial results for the Retail business are summarised below.

	Revenue			EBITDA		Profit/(Loss) After Tax
	June 2007 A\$m	June 2006 A\$m	June 2007 A\$m	June 2006 A\$m	June 2007 A\$m	June 2006 A\$m
Asia Pacific	23.0	25.3	(1.3)	1.7	(1.0)	1.0
Europe	25.6	698.8	(1.0)	42.9	(2.0)	29.9
Total Retail	48.6	724.1	(2.3)	44.6	(3.0)	30.9

The Retail business comprises Lend Lease's retail development and asset management activities. Income and property revaluations from ownership of retail investments are reported as part of Investment Management and income from the construction of retail centres is reported as part of Project Management, Construction and PFIs.

Profit after tax in Asia Pacific declined by A\$2.0 million from the prior year as the business continued to invest for growth.

Profit after tax in Europe declined by A\$31.9 million as the prior year included a profit after tax of A\$33.3 million relating to the sale of the Chapelfield retail centre.

Retail – Asia Pacific

In Asia Pacific, Lend Lease's retail interests include an ownership interest in 15 retail centres in operation or under development (June 2006: 10 retail centres). The business is currently undertaking master planning of development opportunities for six centres in Australia and one in Asia with an estimated development cost of A\$2.1 billion. In addition, the business carries out the asset management of nine centres in Australia and two in Asia with a total gross lettable area of 599,700 sqm.

Performance highlights for the year included:

• − Securing the Somerset Central retail development, one of the last remaining major retail development opportunities along Orchard Road in Singapore. Work on the site has commenced, with completion expected by 2010. Lend Lease will manage all phases of the project including development, leasing, project management and construction and, on completion, asset and property management;
• − Acquiring Pakenham Place shopping centre, a sub-regional centre located in a high growth corridor in South East Melbourne. Lend Lease has a 25% direct interest in the centre with the remaining 75% owned by APPF Retail, a Lend Lease managed fund;
• − Acquiring a 25% interest in the Paradiz Centre, a retail and office building in Singapore, together with the asset and development management rights for this centre;
• − Securing the asset management and development rights for Caroline Springs Square in Melbourne and 420 George Street in the Sydney central business district (CBD). Lend Lease has an indirect interest in these centres via its investment in APPF Retail;
• − Securing the asset and development management rights for Indooroopilly in Queensland.

Retail – Europe

In Europe, Lend Lease's retail business includes an ownership interest in seven retail centres in the UK (June 2006: seven retail centres). The business has development opportunities at four centres (June 2006: seven centres) which are expected to deliver an additional 201,800 sqm of retail space at an estimated cost of A\$3.2 billion. The business carries out the asset management of five centres (June 2006: five centres) which have a total retail space of 326,400 sqm.

Performance highlights for the year included:

• − Securing the right to acquire a 50% interest in Park Place, an 82,700 sqm retail development in Croydon, South London, subject to certain commercial conditions. Dependent on meeting these conditions, Lend Lease will invest £92.5 million to acquire a 50% interest in the project;
• − Completing the development of the Golden Square Shopping Centre, Warrington, which opened in May 2007.

Retail and Communities continued

Communities

Overview of Business

The Communities business targets large scale urban regeneration and greenfield development projects in locations with projected population growth. The Lend Lease business model includes land sourcing, master planning and design, product development, marketing and financing.

The scale and scope of the Communities development positions ensures earnings are derived from a diverse range of products. This diversity enhances the yield on projects and generates product for both the Investment Management and Construction businesses.

The key financial results of the Communities business are summarised below.

	Revenue			EBITDA		Profit/(Loss) After Tax
	June 2007 A\$m	June 2006 A\$m	June 2007 A\$m	June 2006 A\$m	June 2007 A\$m	June 2006 A\$m
Asia Pacific	733.5	724.2	135.6	144.3	90.9	92.6
Europe	430.9	508.4	73.0	19.1	51.8	12.9
Americas	644.0	428.2	51.8	37.3	43.7	31.1
Total Communities	1,808.4	1,660.8	260.4	200.7	186.4	136.6

Profit after tax for the year increased by A\$49.8 million to A\$186.4 million. The estimated sales value of the Communities backlog is more than A\$30 billion while the Actus backlog GPM exceeds A\$0.5 billion.

Communities – Asia Pacific

The key financial results for Communities – Asia Pacific are detailed below.

	June 2007	June 2006
Profit after tax (A\$m)	90.9	92.6
Number of units settled	2,795	2,892
Gross sales value of units settled (A\$m)1	940.5	892.9
Gross sales value of pre-sales (A\$m)2	366.8	394.3
Number of projects Backlog3 (number of lots and apartments)	46	44
− Zoned (with planning approval)	31,055	36,000
− Unzoned (awaiting planning approvals)	53,890	40,400
Backlog – Residential (lots and apartments)	84,945	76,400
Backlog – Commercial (sqm – thousands)4	2,751.1	2,223.1
Estimated sales value of total backlog (A\$b)5	17.7	17.5

1 Gross sales value of units settled reflects residential and non-residential revenue from projects, including revenue earned from joint venture projects and the sale of deferred management fees.

2 Pre-sales represent contracts entered into prior to 30 June 2007, including contracts from joint venture projects which have not settled and therefore do not form part of profit after tax in the current year. These sales are expected to settle in future years. The gross sales value of presales refers to the gross revenue from these pre-sales, including revenue earned from joint venture projects.

3 Backlog includes the total number of units in both company-owned and joint venture projects. The actual number of units for any particular project can vary as planning applications are obtained.

4 Includes approximately 85,000 sqm of retail backlog.

5 The estimated sales value of total backlog includes both company-owned and joint venture projects.

Retail and Communities continued

Communities continued

Communities – Asia Pacific continued

Communities – Asia Pacific has 46 active projects predominately on Australia's eastern seaboard. The key product lines of the Communities business are: residential land lots; residential built-form (including houses, terraces and apartments); commercial (including retail, office, light industrial and social infrastructure) and senior living (including retirement villages and village operations).

The key financial results of the Communities – Asia Pacific business by product line for the year are detailed below.

	Residential Land Lots		Residential Built-Form		Commercial4		Senior Living		Total
	June 2007	June 2006	June 2007	June 2006	June 2007	June 2006	June 2007	June 2006	June 2007	June 2006
Settlements1,2
Number of units	2,435	2,699	330	165			30	28	2,795	2,892
Gross sales
value (A\$m)	364.6	401.8	340.2	128.7	191.2	330.0	44.5	32.4	940.5	892.9
Pre-sales3
Number of units Gross sales	1,220	605	144	246			3	6	1,367	857
value (A\$m)	200.6	72.1	128.9	250.7	35.9	69.4	1.4	2.1	366.8	394.3

1 The number of units settled during the year for Senior Living refers to primary sales (new development sites) and excludes any resales. 2 Gross sales value of units settled reflects revenue from projects, including revenue earned from joint venture projects and the sale of deferred

management fees. 3 Pre-sales number of units represents contracts entered into prior to 30 June 2007 including contracts from joint venture projects, which have not settled and therefore do not form part of profit after tax in the current year. These sales are expected to settle in future years. The gross sales value of pre-sales refers to the gross revenue from pre-sales, including revenue earned from joint venture projects.

4 The number of units settled and pre-sales number of units are not relevant measures for commercial.

Performance highlights for the year included:

• − Despite difficult trading conditions, profit after tax of A\$90.9 million is broadly in line with the prior year;
• − The total gross sales value of units settled increased by A\$47.6 million to A\$940.5 million primarily due to an increase in residential built-form revenue due to settlement of 133 units at Dock 5, the first residential apartment tower at Victoria Harbour and settlement of 40 residential built-form units at St Patricks, Sydney. Commercial revenue reduced by A\$138.8 million due to the prior year including revenue of A\$220.0 million from the sale of the Darling Park Stage III commercial development;
• − The total number of lots settled declined by 3% to 2,795 units. The decrease was driven by a decline in the number of residential land lots settled, partially offset by an increase in settlements from residential built-form, primarily Dock 5 at Victoria Harbour and St Patricks, Sydney;
• − The average sale price per residential land lot increased marginally from A\$148,900 to A\$149,700;
• − The number of residential land lots pre-sold at 30 June 2007 was 1,220 units, a 100% increase on June 2006;
• − The sale of three Communities projects (Woodlands, Ropes Crossing and Lakeside) to LLCF1. Lend Lease has a 20.8% coinvestment in the fund and will earn ongoing management fees from these projects;
• − The sale of the Group's interest in a development site in Surfers Paradise to a third party. Concurrent with this transaction, a joint venture agreement between Lend Lease and ORIX Australia Corporation Limited to develop the site and adjacent properties was concluded;
• − The sale of Caroline Springs Square in Melbourne to LLCPF and APPF Retail;
• − The sale of the deferred management fees on a retirement village to LLCPF. The Senior Living business will continue to operate the village and receive management fees from LLCPF;
• − The Yarrabilba project was included in the Urban Footprint in the Queensland Government's amended Regional Plan. This is a significant milestone towards rezoning;
• − A binding Heads of Agreement has been signed to create a new 1,594 hectare master planned community at Rocky Springs, a major growth corridor in Townsville, adding 13,000 units to unzoned backlog;
• − Executing a development agreement with Australia and New Zealand Banking Group Limited (ANZ) to develop, on behalf of ANZ, an 84,650 sqm commercial development at Victoria Harbour. Once completed the building will be the largest single tenancy commercial office development ever undertaken in a CBD area in Australia.

Retail and Communities continued

Communities continued

Communities – Europe

In Europe, the Communities business comprises Crosby, the Greenwich Peninsula project and First Base.

The key financial results of the Communities – Europe business are detailed below.

	Crosby			Other Communities		Total
	June	June	June	June	June	June
	2007	2006	2007	2006	2007	2006
Profit/(Loss) after tax (A\$m)	55.3	27.8	(3.5)	(14.9)	51.8	12.9
Number of units settled	708	1,193			708	1,193
Gross sales value of units settled (A\$m)1	523.2	550.0			523.2	550.0
Gross sales value of pre-sales (A\$m)2	301.6	452.9	69.7		371.3	452.9
Number of projects	19	20	2	2	21	22
Backlog3 (number of lots and apartments)
− Zoned (with planning approval)	3,745	3,550	9,860	10,150	13,605	13,700
− Unzoned (awaiting planning approvals)	1,115	280			1,115	280
Backlog – Residential (lots and apartments)	4,860	3,830	9,860	10,150	14,720	13,980
Backlog – Commercial (sqm – thousands)4	47.2	50.4	387.8	377.4	435.0	427.8
Estimated sales value of total backlog (A\$b)5	2.1	1.6	10.9	8.4	13.0	10.0

1 Gross sales value of units settled reflects revenue from projects, including revenue earned from joint venture projects.

2 Pre-sales represent contracts entered into prior to 30 June 2007, including contracts from joint venture projects which have not settled and therefore do not form part of profit after tax in the current year. These sales are expected to settle in future years. The gross sales value of presales refers to the gross revenue from pre-sales, including revenue earned from joint venture projects.

3 Backlog includes the total number of units in both company-owned and joint venture projects. The actual number of units for any particular project can vary as planning applications are obtained.

4 Includes approximately 68,100 sqm of retail backlog.

5 The estimated sales value of total backlog includes both company-owned and joint venture projects.

Crosby Lend Lease

Lend Lease acquired a 97% interest in The Crosby Group in July 2005. During the year, Lend Lease acquired the remaining 3% minority interest. Crosby is an urban regeneration specialist operating in major northern UK cities such as Manchester, Leeds and Birmingham. The majority of Crosby's earnings are derived from mid to high rise apartment developments on brownfield urban regeneration sites.

Crosby performance highlights for the year included:

• − A contribution to profit after tax of A\$55.3 million. The reported profit after tax has been reduced by A\$8.1 million after tax due to a fair value adjustment recognised on acquisition (June 2006: \$46.3 million after tax);
• − The gross sales value of units settled decreased by 5% primarily due to the timing of projects coming to market. The average sales price per residential unit also decreased from £178,500 to £175,100, driven mainly by changes in product mix across existing projects;
• − An increase in the contribution from commercial revenue following the sale of the casino, multi-storey car park and office space at Clarence Dock, Leeds, the sale of retail space at Navigation Street, Birmingham and the sale of office and commercial space in Manchester;
• − Increasing backlog by 1,030 units through the acquisition of Monkbridge, Leeds and additional phases on the Honduras Wharf and Potato Wharf developments. The closing backlog of 4,860 represents more than three years sales. Crosby is expected to replenish and build its backlog through a combination of site acquisitions and leveraging mixed-use development opportunities from within Lend Lease.

Retail and Communities continued

Communities continued

Other Communities – United Kingdom (UK)

Other Communities – UK operating loss after tax of A\$3.5 million primarily relates to costs incurred in bidding for new projects. This business's major project is Greenwich Peninsula. In addition, it has a 45% investment in First Base, a company specialising in affordable housing and community projects in London.

The Greenwich Peninsula project is a mixed-use development on 59 hectares of land on the Greenwich Peninsula in London. The project will be developed through a combination of land sales to third party developers and direct development with joint venture partners. The first sale of residential lots was completed in September 2006 with settlement expected in 2008.

As a preferred partner of English Partnerships' London-Wide Initiative, First Base has secured a backlog of 1,600 units. In addition to its equity stake in First Base, Lend Lease has directly invested in the company's first project, Adelaide Wharf, which comprises 150 apartments, 60 of which have been sold at 30 June 2007.

During the year, Lend Lease and its partners, First Base and East Thames, were selected by the Olympic Delivery Authority and London & Continental Railways Ltd as preferred Development Partner for Stratford City, site of the London 2012 Olympic Village. Lend Lease has commenced exclusive negotiations with the intention of entering into a Regeneration Agreement to develop the site.

Communities – Americas

In the USA, the Communities business consists of the Actus privatisation business and Lend Lease Communities, a newly formed business unit focusing on large scale urban greenfield and regeneration projects.

Actus Lend Lease

The primary focus of Actus is the Military Housing Privatization Initiative (MHPI) for all branches of the USA Military. The programme includes family housing, lodging and barracks and has a value of over US\$40 billion, of which to date approximately US\$17.0 billion of housing projects and the initial US\$0.4 billion lodging project have been released. Under the MHPI, Actus Lend Lease is selected to own, finance, construct and operate projects for a period of 50 years. Actus has been awarded over 25% of the housing projects released and is preferred bidder on the initial lodging project.

The key financial results for Actus are detailed below.

	June 2007	June 2006
Profit after tax (A\$m)	43.0	18.1
Construction gross profit margin (GPM) (A\$m)	47.3	25.8
Development GPM (A\$m)	27.2	20.8
Asset management GPM (A\$m)	8.0	5.3
Equity returns (A\$m)	2.4	1.6
Number of projects1	16	11
Backlog (number of units under management)
Projects in operational status (secured)	31,500	27,700
Projects in preferred bidder status (awarded)	10,900	6,500
Total backlog	42,400	34,200

1 Number of projects includes extensions of existing projects and projects where Lend Lease is preferred bidder.

Performance highlights for the year included:

• − Construction on secured projects progressing in accordance with contract obligations. Construction GPM increased from the previous year in line with the volume of construction work being undertaken;
• − Development fee income increased as four projects reached financial close in the year namely Camp Lejeune Phase 2, Fort Knox, Fort Campbell Additional Scoring and Fort Hood Stage 2. Development fees represent a fee for service and are not at risk for project performance;
• − Selection as preferred bidder on the privatisation contracts for Tri Group in Colorado and California and Camp Lejeune Phase 3 in North Carolina and New York. The combined estimated construction value of these two projects is US\$450 million;
• − Selection as preferred bidder of the Privatised Army Lodging (PAL) project, which has an estimated construction value of US\$400 million;
• − Units under management increased by 8,200 to 42,400 units. Occupancy levels across the portfolio continued to meet project expectations, despite ongoing deployment of military personnel, ensuring that asset management fees were earned as planned.

Lend Lease Corporation Annual Consolidated Financial Report 2007 9

Retail and Communities continued

Communities continued

Actus Lend Lease continued

New Work Secured and Backlog GPM

	New Work	New Work	Closing	Closing
	Secured	Secured	Backlog	Backlog
	GPM	GPM	GPM at	GPM at
	June 2007	June 2006	June 20071	June 20061
	A\$m	A\$m	A\$m	A\$m
Projects in operational status (secured)	63.6	75.2	351.4	337.0
Projects in preferred bidder status (awarded)	115.5	100.8	185.6	139.3
Total backlog GPM	179.1	176.0	537.0	476.3

1 Backlog GPM disclosed includes 10 years backlog from facilities management even though the contracts run for up to 50 years.

Backlog GPM Run Off

	Year Ending June 2008 %	Year Ending June 2009 %	Post June 2009 %	Total %
Projects in operational status (secured) Projects in preferred bidder status (awarded)	17 22	16 20	67 58	100 100
Total backlog GPM run off	19	17	64	100

Other Communities – Americas

This newly formed business focuses on large scale urban greenfield development and regeneration in the USA. The business has three projects: the San Francisco Piers development project, Horizon City Center, Denver and Lowry Range, Denver.

The key financial results for the business are detailed below.

	June 2007	June 2006
Profit after tax (A\$m)	0.7	13.0
Number of units settled	74	61
Gross sales value of units settled (A\$m)1	96.4	88.1
Gross sales value of pre-sales (A\$m)2		36.5
Number of projects Backlog3 (number of lots and apartments)	3	2
− Zoned (with planning approval)	2,951	3,025
− Unzoned (awaiting planning approvals)	12,930
Backlog – Residential (lots and apartments)	15,881	3,025
Commercial (sqm – thousands)4 Estimated sales value of total backlog (A\$b)5	1,317.1 2.3	418.9 0.4

1 Gross sales value of units settled reflects revenue from projects, including revenue earned from joint venture projects.

2 Pre-sales represent contracts entered into prior to 30 June 2007, including contracts from joint venture projects which have not settled and therefore do not form part of profit after tax in the current year. These sales are expected to settle in future years. The gross sales value of presales refers to the gross revenue from pre-sales, including revenue earned from joint venture projects.

3 The actual number of backlog units for any particular project can vary as planning applications are obtained.

4 Includes approximately 546,400 sqm of retail backlog.

5 The estimated sales value of total backlog includes both company-owned and joint venture projects.

Performance highlights for the year included:

• − The business signed a binding development agreement with the Colorado State Land Board on a 1,600 hectare development parcel known as Lowry Range in Denver, Colorado. A mixed-use housing, retail and commercial community proposed for the site is expected to commence construction next financial year, with the first settlements expected in 2010;
• − Settlement of 74 condominiums at San Francisco Pier developed in joint venture with the San Francisco Cruise Terminal.

Lend Lease Corporation Annual Consolidated Financial Report 2007 10

Investment Management

Overview of Business

The Investment Management business has A\$10.5 billion of funds under management (FUM) (June 2006: A\$9.7 billion). Lend Lease also holds investments directly and indirectly in property assets with a market value of A\$3.4 billion (June 2006: A\$3.2 billion). The Group's interest in these property investments generated investment income EBITDA (excluding profit distributions from Global Fund) of A\$140.6 million during the year.

Key Financial Results

The key financial results of the Investment Management business are summarised below.

	Revenue1 EBITDA			Profit/(Loss) After Tax
	June 2007	June 2006	June 2007	June 2006	June 2007	June 2006
	A\$m	A\$m	A\$m	A\$m	A\$m	A\$m
Funds Management
Asia Pacific	52.7	34.6	15.6	8.7	14.4	6.5
Europe	5.1	3.8	7.9	0.8	9.3	0.5
Americas		0.4	8.6	4.9	5.0	3.1
Total	57.8	38.8	32.1	14.4	28.7	10.1
Investment Income2
Asia Pacific	25.7	29.2	23.2	24.3	15.4	16.1
Europe	86.0	66.4	226.4	94.9	197.8	70.4
Americas	1.5	0.4	28.9	41.2	20.9	32.9
Total	113.2	96.0	278.5	160.4	234.1	119.4
Total Operating
Asia Pacific	78.4	63.8	38.8	33.0	29.8	22.6
Europe	91.1	70.2	234.3	95.7	207.1	70.9
Americas	1.5	0.8	37.5	46.1	25.9	36.0
Total	171.0	134.8	310.6	174.8	262.8	129.5
Property Investment Revaluations3
Asia Pacific			13.6		10.8
Europe			6.8	25.3	4.4	17.7
Americas			62.3	74.1	36.4	43.3
Total			82.7	99.4	51.6	61.0

1 Revenue excludes proceeds received from the sale of investments and joint venture interests, redemptions of available for sale financial assets and Lend Lease's share of profits from associates and joint ventures accounted for using the equity method.

2 Represents Lend Lease's share of income from investments net of direct expenses and allocated overhead, excluding property investment revaluations. June 2006 EBITDA and profit after tax includes gains from the sale of investments of A\$27.0 million and A\$24.6 million respectively. There are no gains on the sale of investments included in investment income in the current financial year.

3 Represents the unrealised valuation increases on property investments that are consolidated or accounted for using the equity method in the financial statements.

Performance highlights for the year included:

Asia Pacific

• − The Funds Management business has performed strongly with continued support from its wholesale investor base. Two new funds were launched in the year, LLCF1 in Australia in July 2006 and ARIF in Singapore in December 2006, with the final close for this fund completed in May 2007. Funds Management profit after tax increased to A\$14.4 million due to the strong underlying performance from the Australian business combined with transaction fees associated with the launch of ARIF in Singapore;
• − Profit after tax from investment income decreased by A\$0.7 million to A\$15.4 million primarily due to a decline in the carrying value of the Group's investment in the International Distressed Debt Fund (IDDF). The Group's investment in IDDF is a legacy position related to the former REI business which is currently being wound up.

Europe

• − The Group sold its interest in GLL to its joint venture partner following a strategic review of its position. This contributed profit after tax of A\$12.6 million;
• − Profit after tax from investment income increased to A\$197.8 million principally due to profit distributions, including foreign exchange gains, from the Group's investment in the Global Fund of A\$136.6 million after tax (June 2006: A\$11.8 million).

Investment Management continued

Key Financial Results (continued)

Americas

− Total operating profit after tax decreased to A\$25.9 million due to the prior year including the sale of Value Enhancement Fund III, IV and V for a profit after tax of A\$7.5 million. The investment income of A\$20.9 million after tax primarily relates to the Group's investment in King of Prussia.

Funds Under Management (FUM)

	Asia Pacific A\$b	Europe A\$b	Total June 2007 A\$b	Total June 2006 A\$b
FUM at the beginning of the financial year	4.5	2.5	7.0	6.0
Additions	1.3		1.3	0.6
Reductions	(0.1)		(0.1)	(0.1)
Net revaluations	0.4	0.3	0.7	0.5
FUM at the end of the financial year (excluding joint ventures)1	6.1	2.8	8.9	7.0
FUM from joint venture interests2	1.6		1.6	2.7
FUM at the end of the financial year (including joint ventures)1	7.7	2.8	10.5	9.7

1 FUM represents the gross market value of real estate and other related assets managed on behalf of investors.

2 Joint venture FUM includes Lend Lease's proportional share of the FUM.

FUM (excluding joint ventures) increased by A\$1.9 billion during the year. Key reasons for the increase are property acquisitions by APPF and LLCPF in Australia of A\$0.7 billion and revaluation gains in existing managed assets of A\$0.7 billion. In addition, the Group launched LLCF1 in July 2006, adding A\$0.2 billion of FUM and ARIF in December 2006, adding A\$0.4 billion of FUM.

FUM from joint venture interests declined by A\$1.1 billion due to the sale of the Group's interest in GLL. In July 2007, the Group also sold its interest in the Resolution Capital joint venture.

Investments

	Region	Lend Lease Share of Income 1,2 June 2007 A\$m	Lend Lease Share of Income 1,2 June 2006 A\$m	Market Value 3 June 2007 A\$m	Market Value 3 June 2006 A\$m
Bluewater	UK	67.1	64.5	1,560.0	1,482.8
King of Prussia	USA	28.2	25.1	483.8	445.3
Other retail investments	Various	55.1	42.8	1,226.3	1,029.6
Other investments	Various	128.1	28.0	150.9	210.9
Total direct and indirect investments		278.5	160.4	3,421.0	3,168.6

1 Represents Lend Lease's share of income before tax from investments net of direct expenses and allocated overhead, excluding property investment revaluations.

2 Lend Lease's share of income for June 2007 includes profit distributions of A\$137.9 million in relation to the Group's investment in the Global Fund. June 2006 includes gains on the sale of investments of A\$27.0 million. There are no gains on the sale of investments included in investment income in the current financial year.

3 Market value is based on independent valuations and is net of project-specific debt.

Lend Lease held property investments, directly or indirectly, with a market value of A\$3.4 billion at 30 June 2007.

• − Lend Lease maintains a 30% direct interest in Bluewater. The independent market value at 30 June 2007 of 100% of Bluewater increased 6% to £2,158.0 million (A\$5,200.0 million). The value of the Group's 30% direct interest in Bluewater increased by A\$77.2 million to A\$1,560.0 million. However, the revaluation gains on Bluewater are not recognised in the financial statements as the asset is treated as inventory and therefore is reflected at cost, which at 30 June 2007 was A\$596.1 million;
• − During the year Lend Lease reached agreement with Lafarge (formerly Blue Circle Industries) to provide certainty on the profit sharing arrangement on Bluewater. Lafarge will receive £25.0 million when Lend Lease sells its 30% interest in Bluewater. The amount will be discounted if a sale occurs prior to 31 December 2011 and indexed if a sale occurs post 31 December 2011. Lafarge are able to conclude the agreement at any time by calling for a £15.0 million payment indexed from 1 January 2007. The cost base of Lend Lease's interest in Bluewater includes £15.3 million at 30 June 2007 to reflect this agreement;
• − The value of Lend Lease's 50% investment in King of Prussia increased by 9% to A\$483.8 million;

Lend Lease Corporation Annual Consolidated Financial Report 2007 12

Investment Management continued

Investments (continued)

• − Other retail investments increased by A\$196.7 million primarily due to the acquisition of the Somerset Central retail development in Singapore (June 2007 market value: A\$53.4 million) and revaluation increases across the portfolio;
• − As at 30 June 2007, Lend Lease owned 25% of the Somerset Central retail development directly with the remaining 75% held by ARIF. The Group completed the second and final equity close for ARIF in May 2007 and following this, Lend Lease's interest in ARIF was reduced to 10.1%;
• − Other investments decreased by A\$60.0 million due to capital returns from the Global Fund which were partially offset by the investment in LLCF1 in the year (June 2007 market value: A\$23.5 million) and revaluation increases across the portfolio.

Property Investment Revaluations1

	Region	Unrealised Revaluations Before Tax June 2007 A\$m	Unrealised Revaluations Before Tax June 2006 A\$m
APIC II 2	Asia	13.6
Lend Lease Overgate Partnership	UK	3.8	16.1
Performance Retail Limited Partnership (acquired August 2005)	UK	0.7	9.2
Chelmsford Meadows Shopping Centre (acquired March 2006)	UK	2.3
King of Prussia	USA	62.3	74.1
Total property investment revaluations		82.7	99.4

1 Represents the unrealised valuation increases on property investments that are consolidated or accounted for using the equity method in the financial statements.

2 Lend Lease increased its interest in APIC II to 21.1% in April 2006. Prior to this date the investment was classified as Other Financial Assets – Available for Sale and any revaluation movements were recognised in the Fair Value Revaluation Reserve.

The statutory profit includes unrealised property investment revaluations of A\$82.7 million before tax (A\$51.6 million after tax) in the year. Further revaluation gains of A\$44.9 million after tax are not included in statutory profit but are recognised in the Fair Value Revaluation Reserve in the financial statements.

Project Management, Construction and Private Finance Initiatives

Key Financial Results

				Realised Gross Profit
		Revenue		Margin		EBITDA	Profit/(Loss) After Tax
	June 2007	June 2006		June 2006	June 2007	June 2006	June 2007	June 2006
	A\$m	A\$m	A\$m	A\$m	A\$m	A\$m	A\$m	A\$m
Bovis Lend Lease
Asia Pacific	2,374.9	1,718.6	142.8	123.5	63.5	43.1	54.6	23.8
Americas	6,063.8	4,587.6	189.1	190.3	89.7	87.3	65.9	59.3
Europe	3,618.0	3,193.5	33.2	154.8	(103.0)	48.0	(77.2)	33.3
Total Bovis Lend Lease	12,056.7	9,499.7	365.1	468.6	50.2	178.4	43.3	116.4
Private Finance Initiatives (PFIs)	111.2	76.9	13.0	9.1	6.9	8.6	14.3	18.2
Total Project Management,
Construction and PFIs	12,167.9	9,576.6	378.1	477.7	57.1	187.0	57.6	134.6

Project Management, Construction and PFIs profit after tax was A\$57.6 million. As reported at December 2006, the decrease from the prior year is primarily a result of the recognition of an A\$118.8 million after tax provision taken against certain UK projects including the Manchester Joint Hospitals project.

Profit after tax for the year was negatively impacted by foreign exchange movements of A\$4.2 million.

Total revenue increased by A\$2.6 billion due to higher volumes in Asia Pacific, Europe and the Americas along with an increase in the weighting of construction services relative to fee service contracts in the Americas and the UK.

Bovis Lend Lease

Asia Pacific

Profit after tax for the Asia Pacific business increased by A\$30.8 million. Key contributions to gross profit in Australia were multi-site projects for the Commonwealth, ANZ and National Australia banks, the Rouse Hill Town Centre retail project in Sydney, the Australian Taxation Office building in Canberra, the Queensland Government Preparatory Schools Rollout and the Correctional Facilities projects in Queensland. In Asia, Japan and Taiwan continued to perform strongly off the back of telecommunication and technology projects. The effective tax rate was positively impacted by an A\$12.1 million R&D tax credit received.

Americas

Profit after tax for the Americas business of A\$65.9 million is a A\$6.6 million increase over the prior year. Profit after tax was negatively impacted by foreign exchange movements of A\$5.3 million. Excluding currency movements, profit after tax increased by 20%. GPM was negatively impacted by foreign exchange movements of A\$15.3 million, resulting in a decrease of A\$1.2 million. Excluding the impact of foreign exchange movements, GPM increased by 7.4% due to higher volumes of work primarily in New York, Chicago and Washington. Contributions to GPM included the BP Retail Alliance, 340 E. Randolph in Chicago and One Rincon Hill in San Francisco.

Europe

Operating profit after tax for the European business decreased by A\$110.5 million due to the provision taken against certain UK projects including the Manchester Joint Hospitals project. The Manchester Joint Hospitals project is a highly complex project involving 13 new buildings, a number of building refurbishments and a complex demolition and decanting sequence. The provision of A\$118.8 million after tax takes into account both cost overruns and delays in the expected completion date.

Outside of the UK, the European business had a solid performance with continued growth in the Gulf States, Continental and Eastern Europe, generating increases in fee service GPM.

Profitability Ratio

The strong performances in the Asia Pacific and Americas regions resulted in improved profitability ratios (defined as EBITDA divided by realised GPM) of 44% and 47% respectively (June 2006: 35% and 46% respectively).

Project Management, Construction and Private Finance Initiatives continued

New Work Secured and Backlog GPM

	New Work Secured GPM June 2007 A\$m	New Work Secured GPM June 2006 A\$m	Backlog GPM at June 20071 A\$m	Backlog GPM at June 20061 A\$m
Asia Pacific	163.2	144.2	125.4	105.2
Americas	285.5	213.4	296.6	219.7
Europe	32.0	139.0	295.2	300.1
Total Bovis Lend Lease	480.7	496.6	717.2	625.0
Facilities Management2	25.1	10.8	75.7	60.5
Total operational projects	505.8	507.4	792.9	685.5
Projects in preferred bidder status (awarded) 3		4.2		24.8
Total including projects in preferred bidder status	505.8	511.6	792.9	710.3

1 Although backlog GPM is run off over several years, the average rate for the current year has been applied to the closing backlog GPM balance in its entirety as the exchange rates for later years cannot be predicted accurately. In local currency, the Americas backlog GPM was US\$234.0 million (June 2006: US\$160.4 million) and the European backlog GPM was £119.8 million (June 2006: £120.0 million).

2 Backlog GPM disclosed includes only 10 years backlog from facilities management even though PFIs contracts run for longer periods of up to 35 years. Facilities management GPM is reported in PFIs.

3 Backlog GPM for projects in preferred bidder status in 2006 related to the Lancashire Schools and Lancashire Waste projects, which reached financial close in December 2006 and March 2007 respectively.

New work secured is the total project GPM to be earned from projects secured during the year, net of margin movements. Total new work secured was impacted by a negative movement in foreign exchange of A\$23.6 million. In Europe, new work secured was impacted by the provision on UK projects taken in the first half of the financial year.

Backlog GPM is the expected GPM to be realised in future financial years from contracts committed at the end of the year. Backlog GPM was negatively impacted by foreign exchange movements of A\$28.4 million. However, even after adjusting for the impact of foreign exchange movements and the margin deterioration on UK projects Backlog GPM has increased to A\$792.9 million.

Backlog GPM Realisation as at June 2007

	Year Ending June 2008 %	Year Ending June 2009 %	Post June 2009 %	Total %
Asia Pacific	68	22	10	100
Americas	60	30	10	100
Europe	55	27	18	100
Total Bovis Lend Lease	59	27	14	100

As at 30 June 2007, 59% of Bovis Lend Lease backlog GPM is projected to be realised as profit in the year to June 2008. The proportion of Bovis Lend Lease secured backlog GPM to be realised beyond 12 months marginally decreased to 41% (June 2006: 44%).

Private Finance Initiatives (PFIs)

The PFIs result includes net bid costs, facilities management GPM and returns on equity and loan stock. The PFIs result does not include construction GPM, which is included in Bovis Lend Lease. The profit after tax from PFIs was A\$14.3 million as a result of increased equity returns across the portfolio and the recovery of bid costs principally on achieving financial close of the Lancashire Schools project. The June 2006 result included a A\$19.6 million after tax profit arising from the Lend Lease and Bank of Scotland PFI joint venture where the parties equalised their investment in 11 PFI projects.

Corporate

		Revenue		EBITDA	Profit/(Loss) After Tax
	June 2007 A\$m	June 2006 A\$m	June 2007 A\$m	June 2006 A\$m	June 2007 A\$m	June 2006 A\$m
Group Services Group Treasury	8.3 77.7	8.1 22.4	(80.6) 5.9	(85.3) 4.7	(60.0) 5.1	(52.0) (22.4)
Group Amortisation					(3.0)	(3.0)
Total corporate	86.0	30.5	(74.7)	(80.6)	(57.9)	(77.4)

Group Services

Corporate costs before tax have decreased however corporate costs after tax have increased due to the prior year including the reversal of a tax provision.

Group Treasury

Group Treasury manages the Group's liquidity, foreign exchange, interest rate risk and debt. The result for the year is detailed in the table below.

	Profit/(Loss) Before Tax			Profit/(Loss) After Tax
	June 2007 June 2006 A\$m A\$m		June 2007 A\$m	June 2006 A\$m
Interest revenue	77.6	22.8	54.6	15.3
Interest expense and borrowing costs	(78.1)	(63.6)	(52.9)	(42.5)
Net hedge benefit	4.9	6.8	3.4	4.8
Total Group Treasury	4.4 (34.0)		5.1	(22.4)

Interest Revenue and Expenses

• − Interest revenue increased by A\$54.8 million before tax due to the recognition of interest from the ATO of A\$46.0 million. This interest has been recognised following a Federal Court judgement in favour of Lend Lease on an outstanding tax dispute;
• − The interest rate on invested cash averaged 5.3% per annum for the year (June 2006: 4.2% per annum);
• − Interest expense and borrowing costs increased by A\$14.5 million before tax largely due to an increase in Group borrowings in the UK following the issue of the £300.0 million 6.125% annual coupon guaranteed notes due 12 October 2021 in the UK public bond market in October 2006;
• − At 30 June 2007 the mix of borrowings, including the Bluewater lease, was 84% at fixed rates and 16% at floating rates.

Hedging and Foreign Exchange Exposure

• − Lend Lease hedges material foreign currency cash flows. Any foreign exchange gains or losses arising on the underlying cash flow or the hedging of business unit cash flows are allocated to the business unit's operating profit;
• − Lend Lease uses natural hedging, where possible, to minimise its exposure to foreign denominated net assets. The remaining net assets are hedged at the discretion of management. The impact of foreign exchange movements on the Group's net assets is accounted for in the Foreign Currency Translation Reserve (FCTR). In the year, the FCTR decreased by A\$55.3 million, primarily due to changes in UK and USA exchange rates.

Appendix 1

Results Detail

		Revenue	EBITDA		Profit/(Loss) Before Tax1		Profit/(Loss) After Tax2
	June 2007		June 2006 June 2007 June 2006			June 2007 June 2006 June 2007		June 2006
	A\$m	A\$m	A\$m	A\$m	A\$m	A\$m	A\$m	A\$m
Retail and Communities
Retail – Asia Pacific	23.0	25.3	(1.3)	1.7	(1.5)	1.5	(1.0)	1.0
Retail – Europe	25.6	698.8	(1.0)	42.9	(2.7)	42.8	(2.0)	29.9
Total Retail	48.6	724.1	(2.3)	44.6	(4.2)	44.3	(3.0)	30.9
Communities – Asia Pacific	733.5	724.2	135.6	144.3	133.7	140.9	90.9	92.6
Asia Pacific	733.5	724.2	135.6	144.3	133.7	140.9	90.9	92.6
Crosby	426.0	502.6	82.0	42.5	80.7	41.6	55.3	27.8
Other Communities – UK	4.9	5.8	(9.0)	(23.4)	(4.1)	(20.6)	(3.5)	(14.9)
Europe	430.9	508.4	73.0	19.1	76.6	21.0	51.8	12.9
Actus Lend Lease	643.9	426.6	51.7	20.9	51.5	21.2	43.0	18.1
Other Communities – Americas	0.1	1.6	0.1	16.4	0.2	16.4	0.7	13.0
Americas Total Communities	644.0 1,808.4	428.2 1,660.8	51.8 260.4	37.3 200.7	51.7 262.0	37.6 199.5	43.7 186.4	31.1 136.6
Total Retail and Communities	1,857.0	2,384.9	258.1	245.3	257.8	243.8	183.4	167.5
Investment Management
Asia Pacific	78.4	63.8	38.8	33.0	43.9	33.0	29.8	22.6
Europe	91.1	70.2	234.3	95.7	234.3	95.7	207.1	70.9
Americas	1.5	0.8	37.5	46.1	37.5	46.1	25.9	36.0
Total Investment Management	171.0	134.8	310.6	174.8	315.7	174.8	262.8	129.5
Project Management, Construction and PFIs
Asia Pacific	2,374.9	1,718.6	63.5	43.1	61.5	41.0	54.6	23.8
Americas	6,063.8	4,587.6	89.7	87.3	85.7	81.9	65.9	59.3
Europe	3,618.0	3,193.5	(103.0)	48.0	(106.9)	45.0	(77.2)	33.3
PFIs	111.2	76.9	6.9	8.6	14.0	12.9	14.3	18.2
Total Project Management, Construction and PFIs	12,167.9	9,576.6	57.1	187.0	54.3	180.8	57.6	134.6
Total operating businesses		14,195.9 12,096.3	625.8	607.1	627.8	599.4	503.8	431.6
Group Services	8.3	8.1	(80.6)	(85.3)	(83.8)	(89.1)	(60.0)	(52.0)
Group Treasury	77.7	22.4	5.9	4.7	4.4	(34.0)	5.1	(22.4)
Group Amortisation					(3.1)	(3.0)	(3.0)	(3.0)
Total corporate	86.0	30.5	(74.7)	(80.6)	(82.5)	(126.1)	(57.9)	(77.4)
Total operating		14,281.9 12,126.8	551.1	526.5	545.3	473.3	445.9	354.2
Property investment revaluations3			82.7	99.4	82.7	99.4	51.6	61.0
Total statutory		14,281.9 12,126.8	633.8	625.9	628.0	572.7	497.5	415.2

1 Profit before tax is before deducting the amount attributable to minority interest.

2 Profit after tax is after deducting the amount attributable to minority interests of A\$2.7 million (June 2006: A\$7.4 million).

3 Represents the unrealised valuation increases on property investments that are consolidated or accounted for using the equity method in the financial statements.

Re i l ta	1
Ov iew erv	1
As Un de Ma set t s na g em en r	2
De lop nt P ip l ine ve me e	3
Co it ies mm un	4
Ov iew erv	4
Co it ies As ia Pa i f ic. mm un c –	5
Se ior L iv ing n	.7
Cr by Le d Le os n as e	8
Ot he Co it ies Un ite d K ing do r mm un m. –	9
Ot he Co it ies Am ica r mm un er s –	9
Ac Le d Le tus n as e .	1 0
Inv Ma tm t t es en na em en	1 1
g Fu ds Un de Ma t n r na g em en	1 1
Inv est nts me	1 2
Pr j Ma Co ion d P F Is t t, tru ct o ec na g em en ns an	1 4
Bo is Le d Le Ma j Pro j ( by Co ion Va lue ) ts nst t v n as e or ec ruc	1 4
Bo is Le d Le Re l ise d Gr Pro f it Ma in An ly is by Se cto n as e a os s rg a s v r	1 6
P F Is .	17

Retail

Overview

	Au	stra lia	Sin gap ore			UK	US	A	Tot	al
	Jun e 20 07	Jun e 20 06	Jun e 20 07	Jun e 20 06	Jun e 20 07	Jun e 20 06	Jun e 200 7	Jun e 20 06	Jun e 20 07	Jun e 20 06
1 Ow h ip ne rs
Nu be f c tre m r o en s	1 1	8	4	2	7	7	1	1	2 3	1 8
2 \$m ( ) Ma ket lue f Le d Le int st A r va o n as e ere	45 6. 9	3 9 2. 9	1 4 6. 7	77 9	2, 1 8 2.7	2, 0 4 1. 6	4 8 3. 8	4 45 3	3, 27 0. 1	2, 9 5 7.7
3 To l G L A ( ) ta sq m	6 9 0, 3 0 0	6 6 5, 8 0 0	8 8, 0 0 0	7 1, 3 0 0	3 8 6, 3 0 0	3 5 0, 7 0 0	2 4 3, 1 0 0	2 4 3, 1 0 0	1, 4 0 7, 7 0 0	1, 3 3 0, 9 0 0
As Ma t t se na g em en
Nu be f c tre m r o en s	9	6	2	1	5	5			1 6	1 2
\$m As de ( A ) set t s u n r m an ag em en	4, 0 5 7.5	2, 7 2 1. 0	7 3 8. 7	5 9 9. 2	7, 2 47 8	6, 4 9 1. 9			1 2, 0 4 4. 0	9, 8 1 2. 1
G ( ) L A u de t n r m an ag em en sq m	5 3 3, 3 0 0	4 2 2, 6 0 0	6 6, 4 0 0	4 9, 7 0 0	3 2 6, 4 0 0	2 9 0, 8 0 0			9 2 6, 1 0 0	7 6 3, 1 0 0
De lop nt P ip l ine ve me e
Nu be f c tre m r o en s	6	5	1		4	7			1 1	1 2
Cu l G L A ( ) nt tot rre a sq m	1 9 1 0 0 5,	4 2 2, 6 0 0			1, 0 0 0 5	1 4 1, 0 0 7			2 4 6, 1 0 0	6 4, 3 0 0 5
\$m Gr im d de lop ( A ) st ate nt st os s e ve me co	1, 3 6 0	6 45	7 3 0		3, 2 25	3, 5 3 7			5, 3 15	4, 1 8 2
G ( ) Es t ima te d a d d it ion l L A a sq m	1 1 4, 3 0 0	7 8, 1 0 0	2 8, 1 0 0		2 0 1, 8 0 0	2 4 3, 6 0 0			3 4 4, 2 0 0	3 2 1, 7 0 0

1Lend Lease's ownership interest is held directly or indirectly via managed funds. Where the investment is held via a managed fund the market value represents the Lend Lease share of the value of the fund.

2Market value is based on independent valuations and is net of project-specific debt.

3GLA represents the gross lettable area of the centres.

Retail continued

Assets Under Management

		1 GL A			2 Ma rke t Va lue Jun e 2 007	2 Ma rke t Va lue Jun e 2 006
Sho Ce ing ntre pp s	Ma ed Beh alf of nag on	sqm			A\$ m	A\$ m
As ia Pa i f ic c
Ca irn Ce l, Q l d ntr s a	A P P F Re i l / Ot he Jo int Ow ta r ne rs	5 2, 8 0 0
Ca lan d Ce l, Q l d ntr ne a	A P P F Re i l ta	3 9, 3 0 0
Su h ine P laz Q l d ns a,	A P P F Re i l / Ot he Jo int Ow ta r ne rs	3, 3 0 0 7
Er ina Fa ir, N S W	A P P F Re i l / Ot he Jo int Ow ta r ne rs	1 0 6, 8 0 0			4, 0 5 7.5	2, 7 2 1. 0
Sq S Ma rt hu N W ca r ua re,	/ Ot Ow A P P F Re ta i l he Jo int r ne rs	9 3, 5 0 0
Gr bo h P laz N S W ee ns rou g a,	A P P F Re i l ta	5 8, 2 0 0
Ca l ine Sp ing Sq V ic ro r s ua re,	A P P F Re i l / Le d Le Co P lus Fu d ( L L C P F ) ta n as e re n	8, 5 0 0
Pa ke ha P lac V ic n m e,	A P P F Re i l / Le d Le Co ion ta t n as e rp ora	15 8 0 0 ,
In do i l ly, Q l d oro op	Ot he Ow r ne rs	8 0 0 5, 1
3 Pa kw Pa de S ing r ay ra ap ore ,	As ia Pa i f ic Inv Co No ( A P I C I I ) est nt 2 c me mp an y	4 9, 7 0 0			6 2 9. 2	5 9 9. 2
3 Ce S Pa d iz ntr ing ra e, ap ore	Co / Ot Ow Le d Le t ion he Jo int n as e rp ora r ne rs	1 6, 7 0 0			1 0 9. 5
f To ta l As ia Pa i ic c		9 9, 0 0 5 7			9 6. 2 4, 7	3, 3 2 0. 2
		1 GL A	2 Ma rke t Va lue Jun e 2 007	2 Ma rke t Va lue Jun e 2 006	2 Ma rke t Va lue Jun e 2 007	2 Ma rke t Va lue Jun e 2 006
Sho ing Ce ntre pp s	Ma ed Beh alf of nag on	sqm	£m	£m	A\$ m	A\$ m
Un ite d K ing do m
B lue Ke ter nt wa ,	Le d Le Re i l Pa h ip / Le d Le Co ion ta rtn t n as e ers n as e rp ora	1 4 8, 6 0 0	2, 15 8. 0	2, 0 2 6. 5	2 0 0. 0 5,	4, 9 4 2.7
Ov Du de ate erg n e ,	Le d Le Ov Pa h ip ate rtn n as e erg ers	3 9, 0 0 0	8 1 7.5	8 8 1 1.	8 45 1.	3. 4 4 4
So To hw d, l i hu l l uc oo	Le d Le Re ta i l Pa rtn h ip n as e ers	6 0, 4 0 0	3 15 .5	2 8 0. 8	7 6 0. 2	6 8 4. 9
4 Go Sq l de Wa ing ton n ua re, rr	Wa ing ton Re ta i l Un it Tru st rr	6 3, 6 0 0	2 6 5. 2	9 2. 4	6 3 9. 0	2 25 4
T he Me do C he lms for d a ws ,	C he lms for d Me do Un it Tru st a ws	1 4, 8 0 0	8 1.7	8 0. 1	1 9 6. 8	1 9 5. 5
To ta l Un ite d K ing do m		3 2 6, 4 0 0	3, 0 0 7. 9	2, 6 6 1. 6	7, 2 4 7. 8	6, 4 9 1. 9
To l a de ta ets t ss un r m an ag em en		9 2 6, 1 0 0	–	–	1 2, 0 4 4. 0	9, 8 1 2. 1

1GLA represents the gross lettable area of the centres.

2The market value represents Lend Lease's assessment of the value of the underlying assets.

3The market value for Singapore assets in local currency is S\$930.8 million (June 2006: S\$719.0 million).

4June 2007 market value reflects the value of the existing centre and the extension. The June 2006 market value included the existing centre only as the extension was under development at that time.

Retail continued

Development Pipeline

								Est ima ted
		Ow shi ner p		Est ima ted	Cu t rren	Est ima ted Ad diti l ona		Gro ss Dev elo ent
		3 Inte t res	Pro jec t	Co letio mp n	1 GL A	1,2 GL A		pm 2 Co st
Sho ing Ce ntre pp s	Ma ed Beh alf of nag on	%	Sta tus	Dat e	sqm	sqm		A\$ m
As ia Pa i f ic c
l	Co / Le d Le t ion Le d Le Ma d n as e rp ora n as e na g e	4
Au ia str a	Fu ds / Ot he Jo int Ow n r ne rs	Va iou r s	Va iou r s Un de r	2 0 0 9– 2 0 1 1	1 9 5, 1 0 0	1 1 4, 3 0 0		1, 3 6 0
So Ce l t ntr me rse a	/ Co Le d Le Ma d Fu ds Le d Le ion t n as e na g e n n as e rp ora	5 Va iou r s	ion nst t co ruc	2 0 1 0		2 8, 1 0 0		7 3 0
To ta l As ia Pa i f ic c					1 9 5, 1 0 0	1 4 2, 4 0 0		2, 0 9 0
				Est ima ted Co letio mp n	Cu t rren 1 GL A	Est ima ted Ad diti l ona 1,2 GL A	Est ima ted Gro ss Dev elo ent pm 2 Co st	Est ima ted Gro ss Dev elo ent pm 2 Co st
Sho ing Ce ntre pp s	Ma ed Beh alf of nag on			Dat e	sqm	sqm	£m	A\$ m
Un ite d K ing do m
B lue ter Ev ts Ve Ke nt wa en nu e,	Le d Le Re ta i l Pa rtn h ip n as e ers	3 1. 0	Ap d p rov e	2 0 1 0		9, 6 0 0	5 0	1 2 0
Pa k P lac Cr do r e, oy n	Pa k P lac Un it Tru st r e	6 No te	P lan ing n	2 0 1 3		8 2, 7 0 0	6 0 0	1, 4 45
Ar da le, Ea bo st n urn e	Pe for Re i l Un it Tru ta st ma nc e r	3 3. 3	P lan ing n	2 0 1 2	3 6, 2 0 0	3 9, 0 0 5	2 2 0	3 0 5
T he Me do C he lms for d a ws ,	C he lms for d Me do Un it Tru st a ws	0 75	P lan ing n	2 0 3 1	8 0 0 1 4,	0, 0 0 0 7	0 47	3 0 1, 1
To l Un ite d K ing do ta m					0 0 0 5 1,	2 0 8 0 0 1,	3 0 1, 4	3, 2 2 5
To ta l de lop nt ip l ine ve me p e					2 4 6, 1 0 0	3 4 4, 2 0 0	–	5, 3 1 5

1GLA represents the gross lettable area of the centres.

2The estimated additional GLA and gross development cost is dependent on future planning approvals and is subject to commercial feasibility and approvals from joint venture partners.

3The Lend Lease ownership interest shown may change prior to or during the development.

4Lend Lease holds an indirect interest through its investment in APPF.

5 As at 30 June 2007, Lend Lease owned 25% of the Somerset Central retail development directly with the remaining 75% held by the Lend Lease Asian Retail Investment Fund (ARIF). The Group completed the second and final equity close for ARIF in May 2007 and following this, Lend Lease's interest in ARIF was reduced to 10.1%.

6During the year, Lend Lease secured the right to acquire a 50% interest in the Park Place retail development subject to certain commercial conditions.

7 The expansion of Overgate, Dundee, has been omitted from the development pipeline at June 2007 as the anchor tenant has not yet been secured. The extension will be added to the development pipeline once the tenant is secured and the resultant scheme viability is complete.

Communities and Actus Lend Lease

Overview

	Au	lia stra	UK		US	A	Tot	al
Co it ies mm un	Jun e 20 07	Jun e 20 06	Jun e 20 07	Jun e 200 6	Jun e 200 7	Jun e 20 06	Jun e 20 07	Jun e 20 06
Nu be f p j ts m r o ro ec	4 6	4 4	2 1	2 2	3	2	7 0	6 8
1 Ba k log c
Zo d ( it h p lan ing ls ) ne n ap p rov a w −	3 1, 0 5 5	3 6, 0 0 0	1 3, 6 0 5	1 3, 0 0 7	2, 9 1 5	3, 0 25	47 6 1 1 ,	2, 25 5 7
Un d ( it ing lan ing ls ) zo ne aw a p n ap p rov a −	3, 8 9 0 5	0, 0 0 4 4	1, 1 15	2 8 0	2, 9 3 0 1		6 9 3 7, 5	0, 6 8 0 4
Re i de ia l ( lot d a ) nt art nts s s a n p me	8 4, 9 4 5	7 6, 4 0 0	1 4, 7 2 0	1 3, 9 8 0	1 5, 8 8 1	3, 0 2 5	1 1 5, 5 4 6	9 3, 4 0 5
2 Co ( ) ia l mm erc sq m	2, 75 1, 0 8 0	2, 2 2 3, 1 0 0	4 3 4, 9 9 0	4 27 7 6 0 ,	1, 3 17 1 0 0 ,	4 1 8, 8 6 0	4, 5 0 3, 17 0	3, 0 6 9, 7 2 0
\$ ( ) Es im d s les lue f to l ba k log A b t ate ta a va o c	17 .7	17 .5	1 3. 0	1 0. 0	2. 3	0. 4	3 3. 0	27 9
	Nu mb er o	3 f P roje cts	Ca Est ima ted	4 Spe ital nd	Co Equ ity	5 itm ent mm	Un its Und er M	ent ana gem
Ac tus Le d Le n as e			US	p \$b	US	\$m
	Jun e 20 07	Jun e 20 06	Jun e 20 07	Jun e 20 06	Jun e 200 7	Jun e 20 06	Jun e 20 07	Jun e 20 06
Op ion l ( d ) t era a se cu re	1 1	7	3. 8	3. 4	8 5 7.	2. 3 5	3 1, 0 0 5	27 0 0 7 ,

Preferred bidder (awarded) 5 4 1.5 1.0 10,900 6,500 Total 16 11 5.3 4.4 57.8 52.3 42,400 34,200

1Backlog includes both company-owned and joint venture projects.

2Represents net developable area of the project site. Commercial backlog includes approximately 699,500 sqm of retail backlog (85,000 sqm in Asia Pacific, 68,100 sqm in the UK and 546,400 sqm in the USA).

3Number of projects includes extensions of existing projects and projects where Lend Lease is preferred bidder.

4Over the initial development period of the project.

5Includes both invested and committed equity.

Communities continued

Communities – Asia Pacific – Project Listing

			Est ima ted Co letio mp n	1	2 Bac klo g	2 Bac klo g	Res ide ntia l Cu t P rice rren 3 Ran ge	Est ima ted Co ial mm erc
Pro jec t	Loc atio n	Ow shi Inte t ner p res	Da te	Tot al U nits	Lan d U nits	Bui lt-F Un its orm	A\$ 000 s	Bac klo g s qm
Zo d Pr j ts ne o ec
4 Wo d lan ds o	Q l d	La d m t n an ag em en	2 0 1 1	1, 4 0 0	1, 0 0 5	9 5	9 5 – 25 5
Fo Ga de t res r ns	Q l d	% J V / La d m 5 0 t n an ag em en	2 0 0 9	1, 5 7 0	2 1 0	3 0	1 4 0 – 2 6 0
Va ity La kes rs	Q l d	La d m t n an ag em en	2 0 1 0	1, 8 0 0		4 3 0	2 25 3, 0 0 0 –	8, 9 8 0
Sp ing f ie l d La kes r	Q l d	La d m t n an ag em en	2 0 15	1 0, 0 0 0	8, 1 6 5	4 2 0	75 3 5 0 –	9, 0 9 0
Hy Co lum att o	Q l d	1 0 0 %	2 0 1 2	0 0 5	2 8 5	2 0 5	6 0 – 1, 8 0 0 5
Tw in Wa Re i de ia l ter nt s s	Q l d	% 1 0 0	2 0 1 3	1, 7 6 5	6 6 0	2 0	3 1 0 – 9 5 0
Tw in Wa ter Re rt s so	Q l d	% 5 1 J V	2 0 0 9	6 5		6 0	6 4 0 – 2, 6 0 0
Fa irw Wa ter ay s	N T	La d m t n an ag em en	2 0 0 8	1, 0 4 0	5		9 0 – 3 0 0
T he C ha se	N T	La d m t n an ag em en	2 0 0 8	9 0 7	2 0		1 3 0 – 2 4 0
B ing Go ( W i lto ) ara rg e n	N S W	La d m t n an ag em en	2 0 15	1, 1 6 5	1, 1 6 5		2 0 0 – 6 5 0	25 0 0 0 ,
Ho lro d y	N S W	La d m t n an ag em en	2 0 0 8	7 0	15		1 6 0 – 3 0 0
St Ma Ot he Pre inc ts ry s – r c	N S W	1 0 0 %	2 0 17	4, 0 8 0	3, 9 8 0		1 4 0 – 3 1 0	3 0 5, 8 0 0
4 St Ma Ro Cr ing ry s – p es os s	N S W	La d m t n an ag em en	2 0 1 1	3 2 0 1,	25 1, 1	3 1 5	2 0 3 3 0 5 –	2, 0 0 7 5
Ne lso R i dg ns e	S N W	La d m t n an ag em en	2 0 1 0	9 2 0	3 7 0	3 8 0	2 0 0 – 6 75	2, 5 5 0
Ja kso La d ing c ns n	N S W	5 0 % J V	2 0 1 2	1, 3 7 0		4 25	6 0 0 – 3, 0 0 0	15 5 0 0 ,
Ro H i l l us e	N S W	1 % J V / La d m 5 t n an ag em en	2 0 1 8	1, 2 0 7	0 0 5	9 0 5	25 0 – 6 0 0	1 15 0 0 0 ,
Ne ing ton w	N S W	% J V / La d m 5 0 t n an ag em en	2 0 0 9	2, 0 0 0		1 3 0	45 0 – 8 0 0
St Pa tr ic ks	S N W	% / 5 0 J V La d m t n an ag em en	2 0 1 0	1 4 0		9 0	1, 5 0 0 – 5, 0 0 0
Fo de r	A C T	25 % J V / La d m t n an ag em en	2 0 1 2	1, 0 3 0	9 0 0	1 3 0	1 25 3 0 5 –	2, 2 6 0
E dg ate ew r	V ic	1 0 0 %	2 0 1 2	1, 1 2 0	25	2 0 5	3 8 1, 0 0 0 5 –
Cr ig ie bu a rn	V ic	La d m t n an ag em en	2 0 0 8	3, 1 0 0	5 0 0	2 0	75 17 0 –
Su bto l zo d ta ne				3 7, 1 4 5	1 8, 9 3 0	4, 0 4 0		5 5 6, 6 8 0

Note: Footnote references included on the following page.

Communities continued

Communities – Asia Pacific – Project Listing continued

Pro jec t	Loc atio n	Ow shi Inte t ner p res	Est ima ted Co letio mp n Dat e	1 Tot al U nits	2 Bac klo g Lan d U nits	2 Bac klo g Bui lt-F Un its orm	Res ide ntia l Cu t P rice rren 3 Ran ge A\$ 000 s	Est ima ted Co ial mm erc Bac klo g s qm
La ke i de Pa ke ha 4 at s n m	V ic	La d m t n an ag em en	2 0 1 0	2, 3 5 0	6 0 0	4 0	6 5 – 1 6 5	8, 0 0 0
Ca Sp l ine ing ro r s	V ic	% / 5 0 J V La d m t n an ag em en	2 0 1 2	7, 4 8 0	1, 8 6 0	3 25	75 3 25 –	3 4, 6 0 0
La im ur ar	V ic	1 0 0 %	2 0 1 4	1, 8 7 0	1, 7 8 0		1 25 3 9 5 –	1 2, 1 0 0
V icto ia Ha bo r r ur
Do k 5 c −	V ic	% 1 0 0	2 0 0 8	1 4 0		15	6 3 0 – 3, 6 0 0
Sta Mo ic 1 sa g e −	V ic	% 1 0 0	2 0 0 8	7 0		7 0	4 0 0 – 1, 5 0 0	3 0 0
A N Z −	V ic	De lop nt t ve me ma na g em en	2 0 1 0					8 4, 6 5 0
8 25 Bo ke St ur −	V ic	De lop nt t ve me ma na g em en	2 0 0 8					0, 3 0 0 1
Er ics so n −	V ic	De lop nt t ve me ma na g em en	2 0 0 8					2 4, 15 0
Str Me ha Re i l nt t ta rc ee −	V ic	1 0 0 %	2 0 0 8					4, 0 2 0
8 3 3 Bo ke Str t ur ee −	V ic	De lop nt t ve me ma na g em en	2 0 0 8					3, 0 7 0
Un itte d Ot he co mm r −	V ic	Ot he r	Va iou r s	2, 0 0 5		2, 0 0 5		2 2 0 1, 1
Ma La ke ws on s	S A	% / 5 0 J V La d m t n an ag em en	2 0 1 1	4, 8 9 0	6 4 0	17 0	7 0 – 3 8 0	5 2, 1 0 0
To ta l zo d ne 5				9 9 5 5, 5	2 3, 8 0 1	6, 0 7 1		8 8 0 1 1, 1
Un d Pr j ts zo ne o ec
Ya b i l ba rra	Q l d	Sta d a is it ion g e cq u		2 3, 4 0 0	2 0, 3 3 0	3, 0 7 0		8 77 0 0 0 ,
Sp Ro ky ing c r s	Q l d	La d m t n an ag em en		1 3, 0 0 0	1 2, 45 0	5 5 0		5 4 8, 0 0 0
Ca l de d rw oo	N S W	La d m t n an ag em en		4, 0 0 0	4, 0 0 0			5, 0 0 0
Pa ke ha Va l ley n m	V ic	La d m t n an ag em en		9 0 4	6 0 4	3 0		9, 9 0 0 1
Lo ke b ie c r	V ic	Sta d a is it ion g e cq u		1 3, 0 0 0	7, 8 6 0	5, 1 4 0		4 9 0, 0 0 0
To l u d ta nz on e				3, 8 9 0 5	0 0 4 5, 1	8, 9 0 7		9 3 9, 9 0 0 1,
O T T A L				1 0 9, 8 8 5	6 8, 9 1 0	1 5, 5 0 0		2, 7 5 1, 0 8 0

1Represents residential and non-residential units and built-form dwellings forecast to be completed by the end of the project.

2Backlog includes the total number of units in both company-owned and joint venture projects. The actual number of units for any particular project can vary as planning applications are obtained.

3Residential price range refers to the price range for both land units and/or built-form dwellings.

4Projects sold into the Lend Lease Communities Fund 1 during the financial year. These projects are managed on behalf of the Lend Lease Communities Fund 1.

5Estimated completion date and residential price range is not applicable for unzoned projects.

Communities continued

Senior Living – Project Listing

		Dw ellin Und er M ent gs ana gem	Dw ellin to b e D lop ed gs eve Bac klo g	Ave e T f C nt D efe rred rag enu re o urre Ma Fe ent nag em es
Pro jec t	Loc atio n	Un its	1 Un its	Yea rs
Se ior L iv ing n
2 Ke Sa tua p err a nc ry	Q l d	25 4	15	6. 0
T he Te rra ce s	Q l d	5 7	3 0	2. 6
G len ae on	S N W	27 1		6. 5
Lu da Ma tan no r	N S W	1 3 3		7. 3
P ittw ate r	N S W	8 5		6. 6
Ne lso 's Gr n ov e	N S W	25	1 45
2 A be le rva	V ic	2 3 7		8. 3
Bu d Te rw oo rra ce	V ic	1 0 6		5. 1
2 F i d d lers Gr ee n	V ic	2 2 9		6 7.
Fo t H i l ls res	V ic	15 9		5. 4
H ig hva le	V ic	1 9 0		7. 6
Pe H i l l ert p p ree	V ic	2 1 0		9. 9
Tr in ity Gr ee n	S A	3 0	6 5	3. 0
Cr Ro ing p es os s	S N W		1 45
3 Ot he ites r s	Va iou r s		1 3 5
Se To l ior L iv ing ta n		1, 9 8 6	5 3 5	7. 1

1 Backlog includes the total number of units in both company-owned and joint venture projects. The actual number of units for any particular project can vary as planning applications are obtained. Senior Living units relate to potential units on existing sites.

2Managed on behalf of the Lend Lease Core Plus Fund.

3Predominately Delfin Lend Lease sites.

Communities continued

Crosby Lend Lease – Project Listing

Pro jec t	Loc atio n	Ow shi Inte t ner p res	Est ima ted Co letio n D ate mp	1 Tot al U nits	2 Bac klo g Lan d U nits	2 Bac klo g Bui lt-F Un its orm	Res ide ntia l Cu t P rice rren Ran ge £00 0s	Est ima ted Co ial mm erc Bac klo g s qm
B5 So hs i de ut	B irm ing ha m	0 0 % 1	2 0 0 8	0 47		5	0 – 2 3 0 1 4
Na ig ion Str at t v ee	B irm ing ha m	% 1 0 0	2 0 0 8	3 5 0		3 0	17 0 – 1, 6 5 0
Str Es t sex ee	B irm ing ha m	1 0 0 %	2 0 0 9	2 8 0		27 0	9 0 – 2 8 5	5 9 0
Jo hn Br ig ht St	B irm ing ha m	1 0 0 %	2 0 0 9	1 9 0		1 8 0	6 0 – 2 8 0	77 0
Ho du W ha f n ras r	B irm ing ha m	1 0 0 %	2 0 0 9	1 25		1 25	9 1 6 5 – 5
St Ja me s	C he lte ha n m	% 1 0 0	2 0 0 8	1 4 0		25	1 3 5 – 2 0 0
C lar Do k en ce c	Le ds e	1 0 0 %	2 0 0 8	1, 15 0		4 3 0	5 5 – 2 6 0	1 1, 8 8 0
Gr Qu art ee n er	Ma he ste nc r	1 0 0 %	2 0 1 0	1, 3 8 0		9 1 0	9 0 – 3 2 0	47 0
Po W ha f P ha I tat o r se	Ma he ste nc r	% 1 0 0	2 0 0 9	2 15		2 15	9 0 – 25 0
Sm it h f ie l d Ho te l	Ma he ste nc r	% 5 0	2 0 0 8					1 1, 4 0 0
3 Re ime nt g	Ma he ste nc r	1 0 0 %	2 0 0 9	45		45		6 7 0
3 Wo d f ie l d Ro d o a	A ltr inc ha m	1 0 0 %	2 0 0 9	45		45
3 Hu ate ng	Yo k r	3 3 %	2 0 3 1	2 0 7		2 0 7		8, 0 0 4
3 Mo k br i dg n e	Le ds e	% 1 0 0	2 0 1 2	7 25		7 25
Ot he r	Va iou r s	5 0 – 1 0 0 %	Va iou r s	3 75		2 0	1 6 0 – 3 5 0	45 0
To l zo d ta ne				6, 2 1 0	–	3, 7 4 5		3 4, 2 7 0
4 Un it ies d Ar ies an mo ur	B irm ing ha m	1 0 0 %	2 0 0 9	1 4 0		1 4 0		2 9 0
4 Ho du W ha f P ha I I n ras r se	B irm ing ha m	0 0 % 1	2 0 0 9	0 0 1		0 0 1
4 Po tat W ha f P ha I I & I I I o r se	Ma he ste nc r	% 1 0 0	2 0 1 2	8 75		8 75		1 2, 5 9 0
To ta l u d nz on e				1, 1 1 5	–	1, 1 1 5		2, 8 8 0 1
Cr To l by Le d Le ta os n as e				7, 3 2 5	–	4, 8 6 0		4 7, 1 5 0

1Represents residential and non-residential units and built-form dwellings forecast to be completed by the end of the project.

2Backlog includes the total number of units in both company-owned and joint venture projects. The actual number of units for any particular project can vary as planning applications are obtained.

3Residential price ranges have yet to be determined as these projects are yet to be released to the market.

4The expected residential price range has yet to be determined due to the current stage of planning on these projects.

Communities continued

Other Communities – United Kingdom – Project Listing

Pro jec t	Loc atio n	Ow shi Inte t ner p res	Est ima ted Co letio n D ate mp	1 Tot al U nits	2 Bac klo g Lan d U nits	2 Bac klo g Bui lt F Un its orm	Res ide ntia l Cu t P rice rren Ran ge £00 0s	Est ima ted Co ial mm erc Bac klo g s qm
Gr ic h Pe ins la ee nw n u	Lo do n n	1 % 5	2 0 25	1 0, 0 0 0	0 5, 77	4, 0 0 0	1 9 1, 0 0 5 – 5	3 8 8 4 0 7,
A de la i de W ha f ( F irst Ba ) r se	Lo do n n	% 45	2 0 0 7	15 0		9 0	1 15 4 4 0 –
To l Ot he Co it ies Un ite d K ing do ta r mm un m –				1 0, 1 5 0	5, 7 7 0	4, 0 9 0		3 8 7, 8 4 0

1Represents residential and non-residential units and built-form dwellings forecast to be completed by the end of the project.

2Backlog includes the total number of units in both company-owned and joint venture projects. The actual number of units for any particular project can vary as planning applications are obtained.

Other Communities – Americas – Project Listing

Pro jec t	Loc atio n	Ow shi Inte t ner p res	Est ima ted Co letio n D ate mp	1 Tot al U nits	2 Bac klo g Lan d U nits	2 Bac klo g Bui lt F Un its orm	Res ide ntia l Cu t P rice rren Ran ge \$00 US 0s	Est ima ted Co ial mm erc Bac klo g s qm
Sa Fra isc P iers Te ina l n nc o rm	Sa Fra isc n nc o	5 4. 9 5 %	2 0 0 8	1 4 0		1	2 0 0 – 2, 5 0 0
Ho izo C ity Ce nte r n r	De nve r	1 0 0 %	2 0 1 9	2, 9 5 0	2, 9 5 0		1 4 0 – 45 0	4 2 6, 7 8 0
3 Lo Ra wr y ng e	De nve r	La d m t n an ag em en	2 0 2 8	2, 9 3 0 1	2, 9 3 0 1		6 0 17 5 – 5	8 9 0, 3 2 0
To l Ot he Co it ies Am ica ta r mm un er s –				1 6, 0 2 0	1 5, 8 8 0	1		1, 3 1 7, 1 0 0

1Represents residential and non-residential units and built-form dwellings forecast to be completed by the end of the project.

2Backlog includes the total number of units in both company-owned and joint venture projects. The actual number of units for any particular project can vary as planning applications are obtained.

3Backlog land units are unzoned.

Communities continued

Actus Lend Lease – Military Housing – Project Listing

Pro jec t	Loc atio n	Ser vice	Sta tus	Init ial Dev elo ent pm Per iod Yea rs	Act ual/ Exp ed ect Fin ial anc Clo se Dat e	Pro jec t Ter m Yea rs	Est ima ted Ca ital p 1 Sp end \$m US	Per tag cen e Co lete d mp %	Inve d ste Equ ity \$m US	Co itte d mm 2 Equ ity \$m US	Un its Und er Ma ent nag em
Fo Ho d rt o	Te xa s	Ar my	Op ion l t era a	6	Oc 0 t– 1	0 5	2 25	0 0 1	6. 0		9 0 0 5,
Tr i- Co d ( Be for ) t mm an au	So h Ca l ina ut ro	Ma ine Co r rp s	Op ion l t era a	5	Fe b– 0 3	5 0	1 4 0	9 0	3. 3		1, 7 0 0
Fo Ca be l l rt mp	Ke ky ntu c	Ar my	Op ion l t era a	6	De 0 3 c–	0 5	2 0 0	6 5		6. 0	3 0 0 4,
H ic ka m	Ha i i wa	A ir Fo rce	Op ion l t era a	6	Fe b– 0 5	5 0	2 4 0	3 4	1 6. 5		1, 4 0 0
C Ar R I my	Ha i i wa	Ar my	Op ion l t era a	1 0	Ap 0 5 r–	5 0	1, 9 3 0	1 4	8. 0		7, 9 0 0
Fo Dru rt m	Ne Yo k r w	Ar my	Op ion l t era a	5	Ma 0 5 y–	5 0	2 2 0	6 4		5. 0	3, 1 0 0
Ca Le j ( Ma ine Co mp eu ne r rp s ) Ins l lat ion ta s	No h Ca l ina / rt ro Ne Yo k w r	Ma ine Co r rp s	Op ion l t era a	5	Oc 0 t– 5	0 5	3 5 5	2 1	7.5		3, 3 0 0
Ca Le j P ha 2 mp eu ne se	No h Ca l ina / rt ro Ne Yo k w r	Ma ine Co rp s r	Op ion l t era a	5	No 0 6 v–	0 5	1 25	4	2.5		1, 0 0 0
Fo Kn rt ox	Ke ky ntu c	Ar my	Op ion l t era a	8	Fe b– 0 7	5 0	2 15	2		3. 0	2, 5 0 0
Fo Ca be l l A d d it ion l rt mp a Sc ing or	Ke ky ntu c	Ar my	Op ion l t era a	4	Ma 0 7 y–	0 5	9 5				2 0 0
Fo Ho d Sta 2 rt o g e	Te xa s	Ar my	Op ion l t era a	5	Ma 0 7 y–	5 0	8 5				2 0 0
A ir Co ba Co d t m mm an Gr I I ou p	Ar izo / Ne na w Me ico x	A ir Fo rce	Pre fer d b i d de re r	6	Ju l– 0 7	0 5	2 25				2, 1 0 0
H ic k ha P ha 2 m se	Ha i i wa	A ir Fo rce	Pre fer d b i d de re r	6	Au 0 7 g–	5 0	4 15				1, 1 0 0
Tr i- Gr ou p	Co lor do / a Ca l i for ia n	A ir Fo rce	Pre fer d b i d de re r	4	Se 0 7 p–	0 5	25 0				6 0 0 1,
Ca Le j P ha 3 mp eu ne se	No h Ca l ina / rt ro Ne Yo k w r	Ma ine Co r rp s	Pre fer d b i d de re r	4	Oc 0 7 t–	5 0	2 0 0				2, 0 0 0
P A L Gr A ou p	Va iou r s	Ar my	Pre fer d b i d de re r	4	Se 0 8 p–	5 0	4 0 0				4, 1 0 0
To ta l Ac tus Le d Le n as e							5, 3 2 0		4 3. 8	1 4. 0	4 2, 4 0 0

1Over the initial development period of the project.

2Committed equity represents future equity investments in the projects.

Investment Management

Funds Under management (FUM)

		1 FU M	1 FU M	1 FU M	1 FU M
		Jun e 200 7	Jun e 200 6	Jun e 200 7	Jun e 200 6
Fun d	Fun d T ype	£b	£b	A\$ b	A\$ b
As ia Pa i f ic c
A P P F	Co re			4. 3	3. 5
Le d Le Co P lus Fu d n as e re n	Co P lus re			0. 3	0. 1
Co Le d Le it ies Fu d 1 n as e mm un n	Va lue A d d			0. 2
Re l Es Pa h ip Fu ds ( R E P ) tat rtn a e ers n	En ha d nc e			0. 1	0. 1
A P I C	Co P lus re			0. 1	0. 1
C A P I I I	Co P lus re			0. 7	0. 7
A R I F	Va lue A d d			0. 4
To ta l As ia Pa i f ic F U M c				6. 1	4. 5
Eu ro p e
Le d Le Re i l Pa h ip ta rtn n as e ers	Co re	0. 9	0. 8	2. 1	9 1.
Ov Le d Le ate Pa rtn h ip n as e erg ers	Co re	0. 2	0. 2	0. 5	0. 4
C he lms for d Me do Pa h ip rtn a ws ers	Va lue A d d	0. 1	0. 1	0. 2	0. 2
To ta l Eu F U M rop e		1. 2	1. 1	2. 8	2. 5
To l F U M ( lu d ing j int ) ta ntu ex c o ve res		–	–	8. 9	7. 0
2 Jo int Ve ntu res
Ca ( ) Re lut ion ita l As ia Pa i f ic so p c				1. 6	1.5
Ge l i Le d Le ( Eu ) ne ra n as e rop e			0. 5		1. 2
To l F U M j int ta ntu o ve res –		–	0. 5	1. 6	2. 7
To l F U M ( inc lu d ing j int ) ta ntu o ve res		–	–	1 0. 5	9. 7

1FUM represents the gross market value of real estate and other related assets managed on behalf of investors.

2Joint venture FUM includes Lend Lease's proportional share of the FUM.

Investment Management continued

Investments

			Len d L e S har eas e	Len d L e S har eas e
		Len d L eas e	1 of I nco me	1 of I nco me	2 Ma rke t Va lue	2 Ma rke t Va lue
		Inte t res	Jun e 2 007	Jun e 2 006	Jun e 2 007	Jun e 2 006	Ind icat ive Fun d
	Reg ion	%	A\$ m	A\$ m	A\$ m	A\$ m	Liq uid atio n
As ia Pa i f ic c
A P P F	Au l ia str a	3 Va iou s r	2 3. 4	2 2. 2	4 4 0. 7	3 9 2. 9	Op de d en en
R E P	Au str l ia a	1 0. 0	1. 2		6. 2	2. 9	2 0 1 0
Le d Le Co P lus Fu d n as e re n	Au l ia str a	1 0. 1	0. 7		2 4. 3	1 1. 3	Op de d en en
Le d Le Co it ies Fu d 1 n as e mm un n	Au l ia str a	2 0. 8	( ) 0. 5		2 3. 5		2 0 1 2
Pa ke ha P lac n m e	Au l ia str a	25 0	0. 3		1 6. 2		/a n
A P I C I I	As ia	2 1. 1	4. 6	2.7	8 3 7.	9 77	2 0 1 0
C A P I	As ia	17 9		0. 2	17 .7	15 6	2 0 0 8
Pa d iz ra	As ia	25 0	( 0. 1 )		6. 0		/a n
So / A R I F 4 t me rse	As ia	4 Va iou r s			5 3. 4		Op de d en en
Le d Le Int ion l D istr d De bt Fu d at n as e ern a es se n	As ia	2 8. 0	( 5. 0 )	( 0. 8 )	2. 4	8. 3	2 0 0 8
Ot he /a l loc d o he d ate ve a r r			( 1. 4 )
To l As ia Pa i f ic ta c			2 3. 2	2 4. 3	6 7 7. 7	5 0 8. 9
10 Eu ro p e
B lue 5 ter wa	U K	3 0. 0	6 7. 1	6 4.5	1, 5 6 0. 0	1, 4 8 2. 8	/a n
6 Le d Le Re i l Pa h ip ta rtn n as e ers	U K	3. 9 5	3. 1	3. 3	8 2. 1	7 6. 4	2 0 1 1
Le d Le Ov Pa h ip 7 ate rtn n as e erg ers	U K	3 0. 7	6. 2	6. 6	3. 0 1 4	3 6. 1 7	2 0 0 8
Pe for Re ta i l L im ite d Pa rtn h ip r ma nc e ers	U K	3 3. 3	5. 3	4. 6	1 0 4. 8	1 0 3. 3	2 0 17
8 Wa ing Re i l L im ite d Pa h ip ton ta rtn rr ers	U K	0. 0 5	2. 1	1. 9	1 1 8. 1	9 8 5.	2 0 17
C 9 he lms for d Me do Un it Tru st a ws	U K	75 0	1 0. 2	1.5	17 4.7	1 4 6. 6	/a n
Le d Le G lo ba l Pro ies S I C A F ert n as e p ,	Eu rop e	2 4. 8	1 3 7. 9	1 1. 8	2 6. 5	1 3 0. 4	2 0 0 9
Co he & Ste S I C A V n ers ,	Eu rop e		0. 5	0. 7	47 6	3 5. 8	Op de d en en
Ot /a he l loc d o he d ate r ve r a			( ) 6. 0
To ta l Eu rop e			2 2 6. 4	9 9 4.	2, 2 6. 8 5	2, 2 0 8 7.
11 Am ica er s
K ing f Pru ia o ss	U S A	0. 0 5	2 8. 2	25 1	4 8 3. 8	4 45 3	/a n
Va lue En ha d Fu d Se ies nc e n r	U S A			1 2. 3			/a n
Ot he /a l loc d o he d ate r ve r a	U S A		0. 7	3. 8	2.7	6. 6
To l Am ica ta er s			2 8. 9	4 1. 2	4 8 6. 5	4 5 1. 9
To l ta			2 7 8. 5	1 6 0. 4	3, 4 2 1. 0	3, 1 6 8. 6
Se cto r
Re ta i l inv est nts me			15 0. 4	1 3 2. 4	3, 27 0. 1	2, 9 5 7.7
Ot he inv est nts r me			1 2 8. 1	2 8. 0	15 0. 9	2 1 0. 9
To l ta			2 7 8. 5	1 6 0. 4	3, 4 2 1. 0	3, 1 6 8. 6

Footnotes are included on the following page.

Lend Lease Corporation Portfolio Report 2007 12

Investment Management continued

Investments continued

Footnotes

• 1 Represents Lend Lease's share of income earned before tax from investments net of direct expenses and allocated overhead, excluding property investment revaluations. There are no gains on sale included in investment income in the current financial year. The June 2006 comparative includes gains from the sale of investments of A\$0.2 million in Asia Pacific, A\$13.2 million in Europe and A\$13.6 million in the Americas.
• 2Market value is based on independent valuations and is net of project-specific debt.
• 3 Lend Lease holds varying proportional interests in the APPF funds. On 11 July 2007, Lend Lease sold a proportion of its interest in APPF Retail for A\$263.8 million. As at 30 June 2007, a cumulative gain of A\$32.6 million before tax was recognised in the fair value revaluation reserve relating to this interest.
• 4 As at 30 June 2007, Lend Lease owned 25% of the Somerset Central retail development directly, with the remaining 75% held by ARIF. The Group completed the second and final equity close for ARIF in May 2007 and following this, Lend Lease's interest in ARIF was reduced to 10.1%.
• 5 The independent market value at June 2007 of 100% of Bluewater was £2,158.0 million (A\$5,200.0 million). Bluewater is treated as inventory in the financial statements and is therefore reflected at cost, which at June 2007 was A\$596.1 million.
• 6Fund life is periodically extended for four years, unless investors elect otherwise. If fully extended, the Lend Lease Retail Partnership has a 40-year life ending in 2039.
• 7 Fund life is periodically extended for four years, unless investors elect otherwise. If fully extended, the Lend Lease Overgate Partnership has a 40-year life ending in 2040. Lend Lease's co-investment is required to be at least a minimum of 10% of subscribed capital to the end of the fund's life.
• 8Lend Lease's 50% interest in Warrington Retail Limited Partnership is included in the financial statements at a book value of A\$112.4 million.
• 9 Lend Lease acquired a 75% interest in the Chelmsford Meadows Unit Trust in March 2006. The Trust is consolidated in the financial statements, with 100% of the underlying property asset being recognised as an investment property at a book value of A\$233.0 million.
• 10The market value of UK assets has been translated at A\$1 = £0.415 (June 2006: A\$1 = £0.41) and the Lend Lease share of income at A\$1 = £0.406 (June 2006: A\$1 = £0.400).
• 11The market value of USA assets has been translated at A\$1 = US\$0.82 (June 2006: A\$1 = US\$0.76) and the Lend Lease share of income at A\$1 = US\$0.789 (June 2006: A\$1 = US\$0.73).

Project Management, Construction and PFIs

Bovis Lend Lease Major Projects (by Construction Value)¹

Pro t N	Loc atio	Clie nt	Co ntra ct 2, 3	Co nst tion ruc Val	Co letio mp n Dat	Sec tor	Des tion
jec am e	n		Typ e	ue A	e		crip
As ia Pa i f ic c Ro H i l l To Ce ntr us e wn e	N S W	T he G P T Gr ou p	G M P	\$m 3 0 7	2 0 0 8	M ixe d-u se	To i l an d c ia l ntr eta wn ce e r om me rc de lop nt ve me
T he Ne Ro H i l l use w	N S W	T he G P T Gr ( for L L G P T Ro H i l l ) ou p us e	G M P	45	2 0 0 8	Re i de ia l nt s	To i de ia l de lop ntr nt nt wn ce e r es ve me
A N Z Me l bo urn e	V ic	Le d Le De lop / A N Z nt n as e ve me	G M P	3 77	2 0 1 0	Co ia l mm erc	He d o f f ice V icto ia Ha bo a r r ur ,
A b bo P ha ica l tt t rm ac eu	S ing ap ore	A b bo La bo ies tt rat or	G M P	3 0 5	2 0 0 9	P ha ica l t rm ac eu	Gr f ie l d bu i l d ing for dry de ee n p ow r fac ing lan tur t ma nu p
Lo nza	S ing ap ore	Lo nza	E P C M	3 0 5	2 0 0 9	P ha ica l t rm ac eu	L i fe ien fac ing lan tur t sc ce m an u p
Br is ba A irp ort ne	Q l d	Br is ba A irp Co ion Lt d ort t ne s rp ora	G M P	2 8 7	2 0 0 9	Tra ion ort at ns p	Int ion l te ina l an d p at ern a rm as se ng er ion ten co nc ou rse ex s
Au l ian Ta ion O f f ice Bu i l d ing str t a xa	A C T	Qu lan d Inv Co ion est nt t ee ns me rp ora	G M P	2 45	2 0 0 8	Co ia l mm erc	He d o f f ice inc lu d ing f it o ut a
Un ive ity f Ne So h Wa les ut rs o w	N S W	Un ive ity f Ne So h Wa les ut rs o w	G M P	9 1 4	2 0 0 8	E du ion t ca	No he l l de lop rt nt rn ma ve me zo ne de up g ra
Co ion l Fa i l it ies ( Qu lan d ) ct rre a c ee ns	Q l d	Qu lan d Go t ee ns ve rnm en	G M P	1 3 3	2 0 0 8	Go t ve rnm en	Re fur b is hm d e ion f tw t a xte en n ns o o ion l fac i l it ies ct co rre a
C B A Ho bu h me s	N S W	Co lt h Ba k mm on we a n	G M P	1 25	2 0 0 9	Co ia l mm erc	O f f ice bu i l d ing Ho bu h, N S W me s ,
Am ica er s B P G lo ba l A l l ian ce	Am ica er s	B P p lc	P M	\$m U S 6 0 5	2 0 0 1	Re i l ta	Mu lt i-s ite ion d fac i l it ies nst t co ruc an t ma na g em en
R ive i de So h – T he Ru hm ut rs s ore	Ne Yo k w r	Ex l l De lop Co te nt ve me mp an y	G M P	2 6 8	2 0 1 0	Re i de ia l nt s	H ig h r ise i de ia l nt re s
3 3 N. C lar k 5	C h ica g o	So h Pa l De L L C ut rce v.	G M P	9 1 1	2 0 0 1	Co ia l mm erc	L E E D c i f ie d o f f ice 45 -st ert ore y bu i l d ing
On R inc H i l l e on	Sa Fra isc n nc o	On R inc De lop L L C nt e on ve me	G M P	17 9	2 0 0 8	Re i de ia l nt s	H ig h r ise i de ia l nt re s
3 0 E. Ra do lp h 4 n	C h ica g o	Re late d M i dw est	G M P	6 2 1	2 0 0 8	Re i de ia l nt s	H ig h r ise i de ia l nt re s
On Mu Pa k We st e se um r	C h ica g o	Co En ter ise ies p r mp an	G M P	1 6 1	2 0 1 0	Re i de nt ia l s	5 3-s tor lux h ig h r ise i de nt ia l ey ury re s
Gr Ce We i l l be nte ee n rg r	Ne Yo k w r	Co Co l l Un ive ity Me d ica l l leg rne rs e	G M P	15 6	2 0 0 7	He lt hc a are	Am bu lato bu i l d ing ry ca re
R itz Ca lto Re i de r n s nc e	Wa h ing ton s	M i dto Ba lt imo wn re	G M P	1 47	2 0 0 8	M ixe d-u se	H ig h r ise i de ia l an d ho l nt te re s
St Re is Ho l & Co do te g n s	At lan ta	S R Ho l De lop te nt ve me	G M P	1 4 6	2 0 0 9	M ixe d-u se	Lu h ig h r ise i de ia l an d ho l nt te ry re s xu
A l lur Co do in ium e n m s	La Ve s g as	F i f ie l d Co ies mp an	G M P	1 3 6	2 0 0 8	Re i de ia l nt s	H ig h r ise i de ia l nt re s
St Jo h 's Ho ita l se p sp	F lor i da	St Jo h 's – Ba t ist He lt hc se p p a are	G M P	1 3 5	2 0 1 0	He lt hc a are	Ne fu l l-s ice ho ita l w erv sp
Ca Ce N Y P H d io He art nte r r	Ne Yo k w r	Ne Yo k Pre by ter ian Ho ita l w r s sp	G M P	1 2 3	2 0 1 0	He lt hc a are	He lt hc fac i l ity a are
T he Ca i l lon r Me	M iam i M iam i	Ca i l lon So h L L C ut r M D M Re i de L L C	G M P G M P	1 2 2	2 0 0 8	Re i de ia l nt s Re i de ia l	H ig h r ise i de ia l nt re s H ig h r ise i de ia l

1Disclosure of major projects is subject to client approval. This impacts the number of projects available for disclosure in each region.

2Contract types are guaranteed maximum price (GMP); engineering, procurement and construction management (EPCM); project management (PM).

3Construction value in PM assignments is the gross construction value and may not correlate to revenue recorded by BLL on the project.

Lend Lease Corporation Portfolio Report 2007 14

Project Management, Construction and PFIs continued

Bovis Lend Lease Major Projects (by Construction Value) 1 continued

			Co ntra ct	Co tion nst ruc Val ue	Co letio mp n
Pro jec t N am e	Loc atio n	Clie nt	2, 3 Typ e	£m	Dat e	Sec tor	Des crip tion
Eu ro p e
P lan Ba lon A irp ort rce a	Sp ain	AE NA	P M	2, 0 4 1	2 0 0 8	Tra ort ns p	Ne ina l ter m w
B P G lo ba l A l l ian ce	Eu rop e	BP lc p	P M	4 0 7	2 0 1 0	Re i l ta	Mu lt i-s ite ion d fac i l it ies nst t co ruc an t ma na g em en
B B C Bro dc ing Ho ast a us e	Lo nd on	Lan d S urit ies ec	L S / F P	45 1	2 0 1 1	Co ia l mm erc	De l it ion d r ion f str t mo an ec on uc o B B C he dq rte a ua rs
Te le fon ica	Sp ain	a S Te lefo nic .A.	P M	3 4 0	2 0 0 8	Co ia l mm erc	Ne ia l o f f ice w co mm erc
Hy da i un	Cz h ec Re blic pu	Hy und ai	P M	2 0 4	2 0 0 9	In du ia l str	Ne lan t ca r p w
B is ho ate 2 0 1 p sg	Lo nd on	Bri tish La nd	C M	2 0 2	2 0 0 8	Co ia l mm erc	Ne bu i l d o f f ice de lop nt w ve me
Ca Se i l la sa v	Sp ain	C.A .S. A	C M	1 3 6	2 0 0 8	Tra ort ns p	M i l ita tra ort fac tor ry ns p y, fac ing for he A 4 0 0 M tur art t ma nu p s
K ing Wa fro C iv ic Fa i l it ies ter nt s c	Liv l erp oo	Bri tish La nd/ Liv l C ity Co il erp oo unc	L S / F P	8 1 1	2 0 0 8	Le isu re	Ne iv ic a d ito ium d w c ren a, au r an h i b it ion ha l l ex
Ma he Ar da le No he Ex ion ste rt ten nc n rn s r	Ma hes ter nc	Pru de ntia l A Co Lt d ssu ran ce mp any	L S / F P	1 1 6	2 0 0 7	Re i l ta	Re i l ce ion ta ntr xte e e ns
S i lve bu ( Po l lo k ) S ho ing Ce ntr r rn p p e	Gla sgo w	Re tail Pr Ho ldin Ltd ert op y gs	L S / F P	1 1 4	2 0 0 8	Re i l ta	Ne i l ce ret ntr w a e
Ma he C iv i l Ju ice Ce ste st ntr nc r e	Ma hes ter nc	All ied Lo nd on	L S / F P	1 1 3	2 0 0 8	Go t ve rnm en	Co ion f C iv i l Ju ice Ce nst t st ntr ruc o e
C Mo ity Tra ort Te ina l sc ow ns p rm	Ru ssi a	Cit erin t ves	P M	1 0 5	2 0 0 9	Co ia l mm erc	Tra ort te ina l ns p rm
Ba ks i de Bu i l d ing 2 & 3 n s	So uth rk wa	d S Lan urit ies ec	L S / F P	1 0 4	2 0 0 8	Co ia l mm erc	Ne ia l o f f ice bu i l d ing co mm erc w
Gr d Arc de Ca br i dg an a m e	Ca mb ridg e	Gro r E sta tes sve no	L S / F P	9 4	2 0 0 8	Re i l ta	Ne i l ce ret ntr a e w
N ien Po ve r zn an	Po lan d	Nie nve r	C M	8 6	2 0 0 9	Re i l ta	Ne ho ing in Po ntr w s p p ce e zn an
C. C. Ca ba ra	Sp ain	Gr o L Gr up ar osv en or	C M	8 6	2 0 0 9	Le isu re	S ho ing d le isu in ntr p p an re ce e Ma dr i d
25 O l d Bro d Str 1 t a ee	Lo nd on	Ha mm ers on	L S / F P	8 1	2 0 0 8	Co ia l mm erc	Ne bu i l d o f f ice de lop nt w ve me
Pro j Ho izo t ec r n	No ich rw	Lan d S urit ies ec	L S / D C	7 3	2 0 0 8	Co ia l mm erc	Re fur b is hm d n t a en n ew ion nst t co ruc
6 0 T hre dn d le Str ( Sto k Ex ha ) t a ee ee c c ng e	Lo nd on	Ha mm ers on	L S / D C	6 0	2 0 0 9	Co ia l mm erc	Ne bu i l d o f f ice de lop nt w ve me
Ca d bu ry	Po lan d	Ca db ury	C M	3 1	2 0 0 8	In du ia l str	Fo d m fac ing fac i l ity tur o an u

1Disclosure of major projects is subject to client approval. This impacts the number of projects available for disclosure in each region.

2Contract types are project management (PM); construction management (CM); lump sum/fixed price (LS/FP); lump sum/design and construction (LS/DC).

3Construction value in PM assignments is the gross construction value and may not correlate to revenue recorded by BLL on the project.

Project Management, Construction and PFIs continued

Bovis Lend Lease Realised Gross Profit Margin Analysis by Sector

Bovis Lend Lease's strategy is to reduce the volatility of its earnings by operating in a diverse range of industries and geographies. The following table details the GPM earned by sector for the year ended 30 June 2007.

	Jun e 2 007 Asi a P acif ic GP M	Jun e 2 007 Am eric as GP M	Jun e 2 007 Eur ope GP M	Jun e 2 007 Tot al GP M	Jun e 2 006 Tot al GP M
	%	%	%	%	%
Co / O ia l f f ice mm erc	3 0	6	2 8	2 1	2 1
Co ica ion t mm un s	15		2	5	6
E du ion t ca	9	1 1	7	9	6
Go / C iv ic t ve rnm en	1	3	2 1	6	6
He lt hc a are		1 3	7	6	1 2
In du ia l / Te hn log str c o y	15	3	1 2	1 0	3
M ixe d-u se		5	3	3	2
P ha ica l / R & D t rm ac eu	5	4	2	3	4
/ Se Re i de nt ia l ior L iv ing s n	2	3 6	3	1 4	1 2
Re i l ta	1 6	1 1	2 0	1 6	17
Tra ion ort at ns p	7	1	2	3	3
Ot he r		7	2	4	8
To l ta	1 0 0	1 0 0	1 0 0	1 0 0	1 0 0

Project Management, Construction and PFIs continued

PFIs – Project Listing

	Loc atio n	Cu t St atu rren s	1 Co tion Va lue nst ruc £m	Per f tag cen e o Co tion nst ruc Co lete mp %	Fac ilitie s Ma ent nag em Rev enu e 2 Bac klo g £m	Inve d ste Equ ity £m	Co itte d mm 3 Equ ity £m	End Da te
He lt hc a are
Ca l de da le Ho ita l r sp	U K	Op t ion l era a	8 7	1 0 0	3 7	5. 5		2 0 3 1
Wo Ho ita l ste rce r sp	U K	Op ion l t era a	8 2	1 0 0	5 0	1. 1		2 0 3 2
He ha Ho ita l – P ha 1 a d 2 m sp se s n x	U K	Op ion l t era a	2 9	1 0 0	1 1	0. 6		2 0 3 3
He ha Ho ita l – P ha 3 x m sp se	U K	Un de ion str t r c on uc	2 4	6 7	3		1. 3	2 0 3 3
Bu ley Ho ita l rn sp	U K	Op t ion l era a	27	1 0 0	1 2	1. 0		2 0 3 3
Ro ha Ho ita l ton e mp sp	U K	Op ion l t era a	5 7	1 0 0	1 4	1.7		2 0 3 5
Ro for d Ho ita l m sp	U K	Op ion l t era a	2 1 3	1 0 0	4	0 7.		2 0 4 0
Ma he ste Ho ita l nc r sp	U K	Un de str t ion r c on uc	3 8 3	5 0	2 8	5. 3	5. 2	2 0 4 3
Le ds Ho ita l e sp	U K	Un de str t ion r c on uc	17 4	9 0	2 9		9. 8	2 0 3 8
Ma j da ho da Ho ita l a n sp	Sp in a	Un de ion str t r c on uc	1 2 9	6 7	2	1. 0	1. 9	2 0 3 5
Bre ia Ho ita l sc sp	Ita ly	Op ion l t era a	15	0 0 1		1.5		2 0 2 0

1The figures represent total construction value over the contract duration.

2Facilities management revenue backlog disclosed is only for 10 years, although PFI contracts typically run for 25 to 35 years in total.

3Committed equity refers to equity and loan stock contributions that Lend Lease has a future commitment to invest.

Project Management, Construction and PFIs continued

PFIs – Project Listing continued

			1 Co tion Va lue nst ruc	Per f tag cen e o Co tion nst ruc Co lete mp	Fac ilitie s Ma ent nag em Rev enu e 2 Bac klo g	Inve d ste Equ ity	Co itte d mm 3 Equ ity
	Loc atio n	Cu t St atu rren s	£m	%	£m	£m	£m	End Da te
E du ion t ca
S he f f ie l d Un ive ity rs	U K	Un de str t ion r c on uc	1 6 3	3 6	2 1		8. 3	2 0 47
Ne le Sc ho ls ast wc o	U K	Op ion l t era a	5 0	1 0 0	2 4	1. 9		2 0 2 9
L inc ln Sc ho ls o o	U K	Op ion l t era a	2 0	1 0 0	1 0	1. 1		2 0 3 3
L i l ian Ba l is Sc ho l y o	U K	Op ion l t era a	1 3	1 0 0	6	0. 8		2 0 3 0
Sc La h ire ho ls P ha 1 nc as o se	U K	Un de str t ion r c on uc	8 1	2 4	1 9		3. 1	2 0 3 4
La h ire Sc ho ls P ha 2 nc as o se	U K	Pre fer d b i d de re r	3 4					6 2 0 3 1
La h ire Sc ho ls P ha 3 nc as o se	U K	Pre fer d b i d de re r	1 2 0					6 2 0 3 1
Co Co k Ma it im l leg r r e e	Ire lan d	Op t ion l era a	3 0	1 0 0	1 0	2. 2		2 0 3 0
Ac da ion t co mm o
Tre 1 as ury	U K	Op ion l t era a	1 1 4	1 0 0	3 7	1.7		2 0 3 8
Tre 2 as ury	U K	Op ion l t era a	1 4 8	1 0 0	3 3	1. 9		2 0 3 8
Wa ste
4 La h ire Wa ste nc as	U K	Un de ion str t r c on uc	2 3 6	2 1		17 0	1 3. 3	2 0 3 5
De fen ce
S 5 L A M P ha 1 se –	U K	Un de str t ion r c on uc	6 6 5	7 0				2 0 0 8
5 S L A M P ha 2 se –	U K	Aw de d ar	3 3 5					2 0 1 3
So h We Re ion l P R I M E 5 ut st g a	U K	Un de ion str t r c on uc	2 0 4	3 3				2 0 1 1
			3, 4 6 9		3 5 0	5 1. 3	4 2. 9

1The figures represent total construction value over the contract duration.

2Facilities management revenue backlog disclosed is only for 10 years, although PFI contracts typically run for 25 to 35 years in total.

3Committed equity refers to equity and loan stock contributions that Lend Lease has a future commitment to invest.

4Construction value represents 100% of the project; Bovis Lend Lease is a 50% joint venture partner in the PFI.

5These are Public Private Partnership projects, which do not require Lend Lease to contribute equity.

6The end date is an estimate as these projects are at preferred bidder status.

Five Year Profile

		June 2007	AIFRS1 June 2006	June 2005	Previous GAAP1 June 2004 June 2003
Profitability Revenue Statutory profit/(loss) before tax Operating profit before tax2 Statutory profit/(loss) after tax Operating profit after tax2	A\$m A\$m A\$m A\$m A\$m	14,282 628 545 498 446	12,127 573 473 415 354	9,435 350 393 226 286	9,726 466 385 334 256	10,114 (567) 315 (715) 230
Operating EBITDA2 Earnings per share on statutory profit Earnings per share on operating profit2,3 Statutory profit after tax to shareholders' equity (ROE) for the period Dividend per share4 Dividend payout ratio on operating profit2,4	A\$m cents cents % cents %	551 124.3 111.4 15.7 77 69.2	527 104.0 88.7 14.7 61 68.8	411 56.5 71.6 11.9 57 79.5	430 80.6 61.8 9.0 44 69.2	474 (163.1) 52.5 6.5 30 56.0
Corporate Strength Total assets Cash Borrowings Current assets Current liabilities Shareholders' equity Cash flows from operations Net asset backing per share Ratio of current assets to current liabilities Borrowings to shareholders' equity Borrowings to shareholders' equity plus borrowings Net debt to shareholders' equity Borrowings to total market capitalisation Shares on issue Number of shareholders Number of equivalent fulltime employees	A\$m A\$m A\$m A\$m A\$m A\$m A\$m A\$ times % % % % m no. no.	9,336 550 1,076 4,514 3,869 3,243 357 8.09 1.17 33.2 24.9 16.2 14.5 401 49,051 10,817	8,166 560 846 3,379 3,179 3,011 660 7.53 1.06 28.1 21.9 9.5 15.1 400 50,179 9,652	6,925 570 500 2,612 3,384 2,710 (55) 6.80 0.77 18.4 15.6 (2.6) 9.7 399 52,878 8,791	7,131 1,380 862 3,455 3,328 2,836 443 7.08 1.04 30.4 23.3 (18.3) 20.9 400 63,143 9,060	7,409 867 885 3,703 2,993 3,008 191 6.86 1.24 29.4 22.7 0.6 24.2 439 74,878 9,992
Shareholders' Returns and Statistics Proportion of shares on issue to top 20 shareholders Shareholdings relating to employees5 Total dividends paid or declared Share price as at 30 June as quoted on the Australian Securities Exchange	% % A\$m A\$	76.9 9.5 309 18.54	76.4 9.6 244 13.99	75.6 10.8 227 12.96	69.8 11.9 177 10.28	61.5 13.5 129 8.35

1 June 2007, 2006 and 2005 reflect results prepared under Australian Equivalents to International Financial Reporting Standards (AIFRS). The years prior to June 2005 represent Lend Lease's results under previous Generally Accepted Accounting Principles (GAAP).

2 Operating profit excludes unrealised property investment revaluations (June 2007: A\$82.7 million before tax, A\$51.6 million after tax; June 2006: A\$99.4 million before tax, A\$61.0 million after tax).

3 Calculated using the weighted average number of shares on issue including treasury shares.

4 Dividends include interim and final dividends.

5 Shares held through employee benefit vehicles.

a. b.	Board/Directors 1 Company Secretaries' Qualifications and Experience 3
c.	Officers Who Were Previously Partners of the Audit Firm3
d.	Directors' Meetings3
e.	Interest in Capital4
	2. Operations 4
a.	Principal Activities 4
b.	Review and Results of Operations5
c.	Dividends 5
d.	Significant Changes in State of Affairs5
e.	Events Subsequent to Balance Date5
f.	Likely Developments 5
g.	Environmental Regulation 5
	3. Remuneration Report 6
a.	Details of Key Management Personnel and Other Executives – Audited 6
b.	Remuneration Policy – Audited 6
c.	Remuneration Details – Audited 13
d.	Long Term Incentives and Retentions – Audited 17
e. f.	Service Agreements – Audited 20 Additional Information – Audited24
	4. Other24
a.	Share Options 24
b.	Indemnification and Insurance of Directors and Officers 24
c.	Non Audit Services 25
d.	Rounding Off 25

Directors' Report

The Directors present their Report together with the Annual Consolidated Financial Report of the consolidated entity, being the Company and its subsidiaries ('Lend Lease') for the financial year ended 30 June 2007 and the Auditors' Report thereon.

1. Governance

a. Board/Directors

The names, qualifications, experience and special responsibilities of each person holding the position of Director of the Company at the date of this Report are:

D A Crawford, Chairman (Non Executive)

Age 63

Mr Crawford joined the Board in July 2001 and was appointed Chairman in May 2003. He is a member of the Nomination Committee.

Experience and Qualifications

Previously Mr Crawford was National Chairman of the Australian firm of KPMG. He has extensive accounting and business experience having worked with many large corporations and governments. He holds a Bachelor of Commerce and Bachelor of Laws from the University of Melbourne. He is a Fellow of the Institute of Chartered Accountants.

Other Directorships and Positions

Mr Crawford is a Non Executive Director of BHP Billiton Limited (appointed May 1994), Foster's Group Limited (appointed August 2001) and Westpac Banking Corporation (appointed May 2002). He was formerly a Non Executive Director of National Foods Limited (appointed November 2001, resigned June 2005).

G A Clarke, Managing Director (Executive)

Age 49

Mr Clarke was appointed Managing Director and Chief Executive Officer in December 2002.

Experience and Qualifications

Mr Clarke brings more than 25 years experience in international business development and operations through career roles including Vice President, Cellular (Paris) for Nortel Communications; Chief Executive Mobile, C&W Mobile plc; and Chief Operating Officer and Chief Executive Officer, Cable & Wireless Communications plc. He holds a BA (Hons) Business Studies and an MBA.

Other Directorships and Positions

Mr Clarke was formerly a Non Executive Director of The British United Provident Association Limited (BUPA), the largest private health provider in the UK (appointed April 2001, resigned March 2007).

P M Colebatch (Non Executive)

Age 62

Mr Colebatch joined the Board in December 2005 and is Chairman of the Personnel and Organisation Committee and a member of the Risk Management and Audit Committee.

Experience and Qualifications

Mr Colebatch has a Bachelor of Science and Bachelor of Engineering from the University of Adelaide, a Master of Science from Massachusetts Institute of Technology and a Doctorate in Business Administration from Harvard University. He has held senior management positions in insurance and investment banking, and was formerly on the Executive Board of Swiss Reinsurance Company, Zurich. He was previously on the Executive Board of Credit Suisse Group, Zurich, where he was Chief Financial Officer and subsequently Chief Executive Officer of Credit Suisse Asset Management.

Other Directorships and Positions

Mr Colebatch is a Non Executive Director of Insurance Australia Group Limited (appointed January 2007).

1. Governance continued

a. Board/Directors continued

G G Edington CBE (Non Executive)

Age 61

Mr Edington joined the Board in 1999 and is a member of the Risk Management and Audit Committee and the Sustainability Committee.

Experience and Qualifications

Qualified as a Chartered Surveyor, Mr Edington brings to the Board extensive UK and international experience in the property sector. Mr Edington was a Director of BAA plc and Chairman of BAA International. He joined BAA plc in 1988, became a member of the Board in 1991 and has been the Chairman of six BAA companies. He is a past President of the British Property Federation, was the Chairman of UK property company Greycoat Estates Limited and was a member of the Bank of England Property Forum. Mr Edington is Chairman of the Council of Trustees of the UK children's charity, NCH, and was awarded a CBE in the New Year's Honours List for 'services to children'.

Other Directorships and Positions

Nil.

P C Goldmark (Non Executive)

Age 66

Mr Goldmark joined the Board in 1999 and is Chairman of the Nomination Committee and a member of the Sustainability Committee.

Experience and Qualifications

Mr Goldmark is Director, Climate and Air Program at Environmental Defense, a USbased nonprofit environmental advocacy organisation. He was the Chairman and Chief Executive Officer of The International Herald Tribune in Paris between 1998 and 2003. Prior to this, he was for ten years the President and Chief Executive Officer of the Rockefeller Foundation in New York. He has held positions including Senior Vice President of the TimesMirror Corporation, Executive Director of the Port Authority of New York and New Jersey, and Director of the Budget for the State of New York. A writer and speaker on world affairs, Mr Goldmark graduated with a BA from Harvard College, Government Department, magna cum laude. He brings to Lend Lease his wide experience as a Chief Executive Officer and senior executive in the private and public sectors, both in the USA and internationally.

Other Directorships and Positions

Nil.

J A Hill (Non Executive)

Age 61

Ms Hill joined the Board in May 2006. She is Chairman of the Sustainability Committee and a member of the Personnel and Organisation Committee.

Experience and Qualifications

Ms Hill has held a number of senior executive positions in the land development and housing construction industry in North America. She was formerly the Chairman, President and Chief Executive Officer of Costain Homes, Inc. (US) and Vice President and General Manager, Mobil Land (Georgia) Corporation. She has a Bachelor of Arts from the University of California at Los Angeles and a Master of Arts marketing and management from the University of Georgia.

Other Directorships and Positions

Ms Hill is a Non Executive Director of Wellpoint, Inc. (appointed March 1994). She was formerly a Non Executive Director of Resources Connection, Inc. (appointed January 2003, resigned December 2006).

D J Ryan AO (Non Executive)

Age 55

Mr Ryan was appointed a Director in December 2004. He is Chairman of the Risk Management and Audit Committee and a member of the Personnel and Organisation Committee.

Experience and Qualifications

Mr Ryan has previously held Managing Director positions in investment banking and industry, as well as being the Chairman or a Non Executive Director of a number of listed public companies. He has a Bachelor of Business from the University of Technology, Sydney and is a Fellow of CPA Australia and the Australian Institute of Company Directors.

Other Directorships and Positions

Mr Ryan is the Non Executive Chairman of Transurban Holdings Limited (appointed Director April 2003 and Chairman February 2007) and is a Non Executive Director of ABC Learning Centres Limited (appointed June 2003). He is also the Non Executive Chairman of Tooth & Co Limited (appointed Director September 1999 and Chairman January 2003) and was formerly a Non Executive Director of Virgin Blue Holdings Limited (appointed November 2003, resigned April 2005).

Lend Lease Corporation Annual Consolidated Financial Report 2007 2

1. Governance continued

a. Board/Directors continued

R H Taylor (Executive)

Age 45

Mr Taylor joined the Board as an Executive Director in December 2004 and is a member of the Sustainability Committee.

Experience and Qualifications

Mr Taylor joined Lend Lease in 1985 as an engineer and held several positions in Australia and Asia before being appointed Managing Director of the Project Management and Construction business of Lend Lease in 1995. Following the acquisition of the Bovis Group in 1999 he was appointed Global Chief Executive Officer of the combined Bovis Lend Lease businesses based in London and in 2001 his responsibilities were expanded to include the development activities of Lend Lease. In 2003 he returned to Australia to take up the role of Chief Executive Officer Asia Pacific and in July 2005 was appointed Chief Executive Officer Retail and Communities. On 21 May 2007 he was appointed to the newly created role of Global Chief Operating Officer. Mr Taylor holds a Bachelor of Civil Engineering (Honours) from the University of Queensland.

Other Directorships and Positions

Nil.

b. Company Secretaries' Qualifications and Experience

W Hara

Mr Hara was appointed Company Secretary on 3 July 2007. He was General Counsel and Group Company Secretary of Patrick Corporation Limited prior to his appointment as Group General Counsel of Lend Lease in January 2007. Mr Hara has a Bachelor of Commerce and a Bachelor of Laws from the University of New South Wales and is a member of the Law Society of NSW.

S J Sharpe

Ms Sharpe was appointed Deputy Company Secretary in 1995 and Company Secretary in 1997. She has held a number of senior executive positions and subsidiary board directorships in the Lend Lease Group. She has a Bachelor of Business from the University of Technology, Sydney and is an Associate of the Institute of Chartered Accountants and a member of the Australian Institute of Company Directors.

c. Officers Who Were Previously Partners of the Audit Firm

Mr Crawford was a Partner and Australian National Chair of KPMG. He resigned from this position on 28 June 2001 prior to his appointment as a Director of the Company on 19 July 2001. KPMG or its predecessors was appointed as the Company's auditor at its first Annual General Meeting in 1958.

d. Directors' Meetings

During the financial year, 12 Board meetings were held. The Board recognises the essential role of committees in guiding the Company on specific issues. Committees address important corporate issues, calling on senior management and external advisers prior to making a final decision or making a recommendation to the full Board.

There are four permanent committees of the Board:

Nomination Committee

The Nomination Committee consists entirely of Non Executive Directors. This Committee assists the Board by considering nominations to the Board by ensuring that there is an appropriate mix of expertise, skills and experience on the Board. During the financial year 1 July 2006 to 30 June 2007, all meetings of the Nomination Committee were held in conjunction with Board meetings.

Personnel and Organisation Committee

The Personnel and Organisation Committee consists entirely of Non Executive Directors. The Committee's agenda reflects the importance of human capital to the Group's strategic and business planning and it assists the Board in ensuring that appropriate policies are in place for people management and remuneration across Lend Lease businesses worldwide. During the financial year 1 July 2006 to 30 June 2007, four meetings of the Personnel and Organisation Committee were held.

Risk Management and Audit Committee

The Risk Management and Audit Committee consists entirely of Non Executive Directors. This Committee assists the Board by reviewing the risk management and compliance systems in Lend Lease businesses worldwide and by ensuring that assets are protected against financial loss, legal and regulatory obligations are met and proper accounting and auditing practices are maintained. During the financial year 1 July 2006 to 30 June 2007, four meetings of the Risk Management and Audit Committee were held.

Sustainability Committee

The Board established a Sustainability Committee during the year consisting of a majority of Non Executive Directors. The Committee assists the Board in monitoring the decisions and actions of management in achieving the aspiration of Lend Lease to be a sustainable organisation. During the financial year 1 July 2006 to 30 June 2007, two meetings of the Sustainability Committee were held.

1. Governance continued

d. Directors' Meetings continued

Attendance at Meetings of Directors 1 July 2006 to 30 June 2007

		Board Meetings	Risk Management and Audit Committee Meetings		Personnel and Organisation Committee Meetings		Sustainability		Other2
Director	Held1	Attended	Held1	Attended	Held1	Attended	Held1	Attended	Held1	Attended
D Crawford G Clarke P Colebatch G Edington P Goldmark J Hill	12 12 12 12 12 12	12 12 12 12 12 11	4 4	4 4	3 2 2 2	3 2 2 2	2 2 2	2 2 2	3 3 2	3 3 2
D Ryan	12	12	4	4	2	2			1	1
R Taylor	12	12					2	2	2	2

1 Reflects the number of meetings held during the time the Director held office on the Committee during the year.

2 Committees constituted to address specific issues.

In addition, as required, matters were dealt with by circular resolution and ratified at the next meeting of the Board or appropriate committee.

e. Interest in Capital

The interest of each of the Directors in the issued shares of the Company at 15 August 2007 (16 August 2006) is set out below.

		Shares			Shares
	Shares	Held		Shares	Held
	Held Directly	Beneficially/ Indirectly	Total	Held Directly	Beneficially/ Indirectly	Total
Director	2007	20071	2007	2006	20061	2006
D Crawford	4,395	23,727	28,122	4,395	18,613	23,008
G Clarke	1,000		1,000	1,000		1,000
P Colebatch	2,000	1,689	3,689	2,000	121	2,121
G Edington	15,000	9,521	24,521	15,000	7,866	22,866
P Goldmark	3,000	10,501	13,501	3,000	8,798	11,798
J Hill	2,000	1,031	3,031	2,000		2,000
D Ryan	10,000	3,640	13,640	10,000	1,857	11,857
R Taylor	9,760	94,737	104,497	7,899	94,526	102,425

1 Includes shares beneficially held by Non Executive Directors in the Retirement Plan.

2. Operations

a. Principal Activities

The Group's lines of business are focused on three geographic regions: Asia Pacific, Americas and Europe.

• − The Retail business comprises retail property management, asset management and development in Australia, Singapore and the United Kingdom (UK);
• − The Communities business is involved in the development of large scale urban regeneration and greenfield development projects in Australia, the United States of America (USA) and the UK. This business line includes privatisation services in the USA;
• − Investment Management provides real estate investment management services in Asia Pacific and the UK. Investment Management includes the Group's ownership interests in property investments in Asia Pacific, the UK and the USA. Ownership interests are held directly or indirectly through investments in Lend Lease managed funds;
• − Project Management, Construction and Private Finance Initiatives (PFIs) provides construction, project management and design services across all regions through Bovis Lend Lease and includes the PFI business in Europe.

2. Operations continued

b. Review and Results of Operations

A full review of operations is included in the Management Discussion and Analysis of Financial Condition and Results of Operations (MD&A) section of the Annual Consolidated Financial Report.

c. Dividends

The 2006 final dividend of A\$123.9 million (31 cents per share, fully franked) referred to in the Directors' Report dated 16 August 2006 was paid on 13 September 2006.

Details of dividends in respect of the current year are as follows:

	A\$m
Interim dividend of 35 cents per share (50% franked) paid on 27 March 2007	140.0
Final dividend of 42 cents per share (50% franked) declared by Directors to be paid on 12 September 2007	168.5
	308.5

d. Significant Changes in State of Affairs

Lend Lease acquired the remaining 3% of voting shares in The Crosby Group plc (a UKbased urban regeneration specialist) during the year, following its acquisition of 97% of The Crosby Group plc during the previous year.

During the prior year, Lend Lease acquired the final 12.5% minority stake in Actus Lend Lease and sold businesses in the real estate investment market in the USA.

e. Events Subsequent to Balance Date

No matters or circumstances have arisen since the end of the financial year that have significantly affected or may significantly affect the operations of Lend Lease, the results of those operations or state of affairs of Lend Lease in subsequent financial years other than the following:

Sale of Units in Australian Prime Property Fund (APPF)

On 11 July 2007, Lend Lease sold a proportion of its interest in APPF Retail for A\$263.8 million. As at 30 June 2007, a cumulative gain of A\$32.6 million before tax was recognised in the fair value revaluation reserve relating to this interest.

Withdrawal of Australian Tax Office (ATO) appeal to Federal Court on Westpac Warrants Issue

On 10 August 2007 the ATO withdrew its appeal relating to the Federal Court's decision in December 2006 regarding Lend Lease's sale of Westpac shares.

Following the withdrawal of its appeal, the ATO will be required to repay to Lend Lease the balance of the payment Lend Lease made under the amended assessment issued in 2002, plus interest. The repayment of the monies by the ATO has no impact on earnings.

f. Likely Developments

Details of likely developments in the operations of Lend Lease in subsequent financial years are contained in the reports from the Chairman and Managing Director in the Annual Report. In the opinion of the Directors, disclosure of any further information would be likely to result in unreasonable prejudice to the Group.

g. Environmental Regulation

Lend Lease is subject to many environmental regulations associated with real estate development, project and construction management and asset management. These regulations typically relate to emissions to air and water, waste management and protection of biodiversity.

Lend Lease businesses report quarterly on environmental regulation compliance matters, including breaches and legal or potential legal action.

The Sustainability Committee receives reports on a quarterly basis regarding any significant environmental risks and non conformance with the Environment Policy of Lend Lease. The Directors are not aware of any material non compliance issues during the period covered by this Report.

Further details are contained in the Sustainability section of the Annual Report.

3. Remuneration Report

The information provided under headings 3a. to 3f. includes remuneration disclosures that are required under Accounting Standard AASB 124 'Related Party Disclosures'. These disclosures have been transferred from the Consolidated Financial Statements and have been audited. The term 'remuneration' has been used in the Remuneration Report. This term has the same meaning as the alternative term 'compensation', as defined in AASB 124.

a. Details of Key Management Personnel and Other Executives – Audited

Key Management Personnel

Key management personnel have authority and responsibility for planning, directing and controlling the activities of the Company and the consolidated entity, including Directors of the Company and executives.

The key management personnel of Lend Lease are the 'Executive Office', consisting of the Executive Directors, together with the Group Finance Director and Chief Executive Officer Investment Management. The former Chief Executive Officer Project Management, Construction and PFI and former Chief Financial Officer are also regarded as key management personnel.

Directors

Non Executive Directors

D Crawford P Colebatch G Edington P Goldmark J Hill D Ryan	Chairman
Executive Directors
G Clarke R Taylor	Managing Director and Chief Executive Officer Global Chief Operating Officer – Appointed 21 May 2007 and Chief Executive Officer Retail and Communities
Executives
S McCann	Group Finance Director – Appointed 21 March 2007 and Chief Executive Officer Investment Management
R Burrows	Chief Financial Officer – Relinquished position 21 March 2007
R Johnston	Chief Executive Officer Project Management, Construction and PFI – Resigned 31 July 2007
Other Executives1
R Butler	Chief Executive Officer Lend Lease Retail and Communities UK
N Hugill	Chairman Lend Lease Europe
R Lourey	Group Head of Human Resources – Resigned 31 July 2007
P Marchetto	Chief Executive Officer Bovis Lend Lease Americas
N Martin	Group Head of Risk
B Soller	Deputy Chief Financial Officer

1 'Other Executives' represents employees in the category of five highest paid Group or Company executives that are not key management personnel.

b. Remuneration Policy – Audited

Directors and Executives

Remuneration Philosophy

The Remuneration Policy of Lend Lease is determined by the Board on the recommendation of the Personnel and Organisation Committee. The Board recognises that Lend Lease operates in an international marketplace and as such aims to recruit, motivate and retain highly skilled employees who can operate in this environment. The policy of Lend Lease is to reward senior executives with market competitive remuneration and benefits, taking account of both Company and individual performance. In assessing these benchmarks, Lend Lease takes account of expert advice and the relevant external comparators in the real estate and related sectors and of companies of similar size, complexity and international scope. The remuneration of the Non Executive Directors is not linked to the performance of the Group in order to maintain their independence and impartiality.

3. Remuneration Report continued

b. Remuneration Policy – Audited continued

Directors and Executives continued

Remuneration Philosophy continued

Remuneration paid by Lend Lease is designed to be appropriate and competitive in each of its business locations, having regard to local practice on issues such as incentives, pensions, superannuation and other benefits. Lend Lease also recognises the need to take account of differing costs of living, especially in relation to expatriates and this is reflected in remuneration for expatriate executives.

In determining the remuneration structure outlined in this report, the remuneration philosophy of the Board is focused on ensuring:

• − The structure is the best fit with the needs of the organisation and its strategy;
• − Remuneration levels are commensurate with appropriate external comparators;
• − Alignment of remuneration incentives with the interests of shareholders, demonstrating a clear link between reward and performance;
• − Alignment of short and long term performance targets to ensure consistent behaviour;
• − A mix of cash and share based remuneration to align the interests of executives with those of shareholders.

The approach of Lend Lease is to provide a balance of fixed and performance based remuneration with an emphasis on increasing 'at risk' remuneration. This approach is reflected in the structure of the Short Term Incentive Plan in particular for the June 2007 financial year.

The Board sets salaries at competitive levels for the relevant role, targeted around the median against comparator companies in Australia and overseas, and takes into account market conditions and personal performance over the year under review.

Market data is used to benchmark salary levels on a global scale, adjusted for local conditions. The Personnel and Organisation Committee benchmarks information available in published job matched surveys of similar companies and, if appropriate, also commissions surveys to supplement the published information. To ensure proper process is followed for all senior executives, all proposed packages for direct reports of Executive Office members and other key managers require prior approval from the Chief Executive Officer. In addition, all internal appointments with a base salary in excess of A\$300,000 in Australia, US\$220,000 in the US and £120,000 in the UK, or for whom a base salary increase of 10% or above is proposed, require prior approval from the Chief Executive Officer.

Elements of Remuneration

The remuneration framework consists of three principal elements:

• − Fixed remuneration (base salary, superannuation and other benefits);
• − Short Term Incentive (annual cash and an equity related deferral) 'at risk';
• − Long Term Incentive (cash or share based performance rights) 'at risk'.

Fixed Remuneration

The salaries of the Chief Executive Officer, the Global Chief Operating Officer and the Chief Executive Officers of the core businesses and corporate functional heads are set by the Personnel and Organisation Committee subject to approval by the Board. Salary changes usually take effect from September of each year except in the case of a new appointment. In the case of the Executive Office members and their direct reports, the Committee is assisted in this review by the Chief Executive Officer.

The other elements of fixed remuneration include those typically enjoyed in the geography where the key person or executive is employed. These may include car, medical cover, employee share plan subscriptions, superannuation and pension contributions, life and/or disability cover and in the case of international assignees, housing, schooling and tax return preparation. The value of these other benefits provided to key personnel are set out in Section 3c. of this Report. Executives are not automatically entitled to all of these benefits.

3. Remuneration Report continued

b. Remuneration Policy – Audited continued

Directors and Executives continued

Elements of Remuneration continued

Short Term Incentives (STIs)

The STI plan is an annual bonus plan which complements the overall Remuneration Policy of Lend Lease by:

• − Rewarding individuals on meeting or exceeding preset key performance criteria;
• − Establishing key performance criteria to contribute to overall shareholder value.

Under the STI arrangement, executives receive benefits dependent on the achievement of both Lend Lease financial targets and individual personal targets. The total value of the potential benefit (target opportunity) varies by executive, but is generally linked to salary and/or related benefits.

Arrangements for the June 2007 Financial Year

The following table sets out the criteria required to be achieved for the current year STI.

	Financial Element (75%)		Personal Performance Element (25%)
−	Represents 75% of target opportunity.	−	Represents 25% of target opportunity.
−	Measured against the current financial year operating profit after tax, excluding certain non recurring items (A\$413.7 million). This is measured either entirely at corporation level or a mix of corporation (40%) and business unit (60%) level depending on the role.	−	Measured against targets specific to each executive's business unit and function.
−	Upside opportunity can be increased to +25% of target opportunity for +10% of target performance achievement.

Depending on the level of performance achieved, the benefit is delivered to executives as follows:

STI Cash Element

• − Proportion of STI received as cash is determined specifically for each executive (see table below);
• − Cash payment in September following year end.

STI Deferred Element

• − Lend Lease shares or equivalent share value in cash based on share price at the date of determination of the bonuses;
• − The shares (or share value if shares are not practicable) are then held in trust on behalf of the executive for the deferral period;
• − For executives to receive the full deferral they must be employed by the Group at the date of vesting of the deferral element. The usual deferral period will be one year from the date of the grant.1

1 This period may be shortened if an executive is a 'good leaver', that is, an executive who leaves employment by reason of death, total and permanent disability, redundancy or other reason as outlined by the Personnel and Organisation Committee.

The split of the cash and the deferred elements for Executive Directors and executives for the June 2007 financial year is as follows:

	June 2007 STI Cash Element – Maximum Opportunity	June 2007 STI Deferred Element – Maximum Opportunity
	%	%	Calculated Based On
G Clarke	119	59	Base salary
R Taylor	83	59	Total package value
Other key personnel and executives	30 – 107	18 – 36	Australia: Total package value
			UK and USA: Base salary

Total package value equates to base salary and other benefits plus superannuation.

3. Remuneration Report continued

b. Remuneration Policy – Audited continued

Directors and Executives continued

Elements of Remuneration continued

Short Term Incentives (STIs) continued

Future Arrangements

For the forthcoming year, the Personnel and Organisation Committee has further aligned the criteria for the STI to the performance of the executive. The changes to the 2007 STI arrangements are:

• − Financial element for business unit heads, the financial element is split between the operating profit after tax (adjusted for significant one off, non recurring items) of the executive's business unit (twothirds of financial element) and other value drivers for each executive's business unit (onethird of financial element);
• − Qualitative bonus qualifiers for any part of the bonus to be paid, each executive must demonstrate achievement of either the corporate or business unit specific annual plan relating to both Incident and Injury Free and Sustainability.

Long Term Incentives (LTIs)

The current LTIs of Lend Lease were introduced and approved by the Board in 1999 and updated and extended for awards from 2001 onwards. The objectives of the LTIs are essentially twofold:

• − Aligning executives with the long term interests of Lend Lease and its shareholders;
• − Attracting and retaining executives of high calibre by providing competitive rewards that relate to the performance of both the individual executive and the Lend Lease share price.

LTI grants are normally made in July each year and are based on competitive remuneration practice. LTIs are settled in cash or Lend Lease shares, with settlement occurring upon vesting if performance hurdles are met. Grants depend on personal contribution and potential and are designed to retain and motivate high performing key executives. The LTIs are in the form of an Australian dollar figure 'grant', which is notionally 'invested' in performance shares (PS) over time to deliver value depending on:

• − Whether the executive remains with the Group if the executive resigns before vesting, the grant will lapse;
• − The performance of the Group.

The Personnel and Organisation Committee approved one change to the rules of the LTIs for the 2005 awards onwards. The rules now allow that, in the event of a change in control of Lend Lease, all awards will vest upon change in control, to the extent that performance conditions have been met. Senior executives would then be entitled to a pro rata settlement, with the Board having discretion to allow the entitlement to exceed this pro rata amount.

Arrangements for LTIs granted in the Financial Years 2005 and 2006

For awards granted on 1 July 2004 and 1 July 2005, the performance hurdles are based on the Total Shareholder Return (TSR) against a basket of international comparator companies. Under these awards, the performance hurdle required TSR to achieve at least median against several comparator companies of Lend Lease. The comparator companies for these awards were: Amec, Atkins WS, Balfour Beatty, British Land, Centex, Hochtief, Jacobs Engineering, Jarvis, Jones Lang LaSalle, Land Securities, Lennar, Leighton Holdings, Liberty International, Mowlem, Skanska, Taylor Woodrow, United Group and Westfield Group.

A full list of the specific criteria that apply to LTIs granted is detailed in Section 3d. of this Report.

There is no retesting permitted under the LTI.

Arrangements for the June 2007 Financial Year – Additional Performance Hurdle

For the June 2007 financial year awards, the Personnel and Organisation Committee set new performance hurdles to align interests between the participant and shareholders and for consistency with the new STI structure.

For awards granted in 2006 onwards, the performance hurdle is based on two equal measures: long term profitability as measured by Earnings Per Share (EPS) and external TSR compared to the TSR of the individual ASX100 listed companies as at the commencement of the performance period. The change in the TSR comparator group better reflects those companies against which Lend Lease competes for capital.

3. Remuneration Report continued

b. Remuneration Policy – Audited continued

Directors and Executives continued

Elements of Remuneration continued

Long Term Incentives (LTIs) continued

The performance measures are:

• − TSR measured against the ASX100 companies (with 50% vesting at median performance, rising proportionately to 100% on reaching top quartile performance);
• − EPS on operating profit after tax reported in the financial statements adjusted for treasury shares (with 100% vesting if a minimum compound annual growth rate of 10% is achieved over the three year performance period).

Each of the two performance hurdles is measured and can vest independently. The executive must ordinarily remain with the Company until the vesting date for the award to vest.

For the 2006 award, it is intended that these awards will vest in Company shares rather than cash, other than for executives specifically identified or in circumstances where share settlement is not practicable.

There continues to be no retesting under the LTI.

Details of the terms of the awards on issue during the 2007 financial year are summarised below.

Plan	LTI – June 2004	LTI – June 2005	LTI – June 2006
Grant date	18 August 2004	17 August 2005	16 August 2006
Service period1	1 July 2004 – 30 June 2007 (3 years)	1 July 2005 – 30 June 2008 (3 years)	1 July 2006 – 30 June 2009 (3 years)
Performance condition(s):	1. TSR of Lend Lease against the TSR of several comparator companies of Lend Lease. Performance measured over the three year performance period.		1. TSR of Lend Lease against the TSR of the individual ASX100 listed companies (comprised as at the beginning of the performance period) (50% award). Performance assessed over the three year performance period.
	Vesting Schedule		Vesting Schedule
	− Rank 1 to 5 inclusive – 100% vesting		− Upper quartile or better – 100% vesting
	− in vesting from 85 – 25%	Rank 6 to 10 inclusive – progressive decrease	− Median upper quartile – straight line increase from 50% to 100% vesting
	− Rank 11 to 19 inclusive – 0% vesting		− Median – 50% vesting
			− Below median – 0% vesting
			2. EPS growth of Lend Lease over performance period (50% award).
			Vesting Schedule
			− At least 10% compounded EPS growth (based on operating profit after tax) over three years – 100% vesting
			− Less than 10% EPS growth – 0% vesting
			Each of the two performance conditions may vest independently.
Method of award settlement	Cash	Cash or shares	Shares, except for pre specified executives
Award status	Vested – 55%	Not yet vested	Not yet vested

1 This period may be shortened if an executive is a 'good leaver', that is, an executive who leaves employment by reason of death, total and permanent disability, redundancy or other reason as determined by the Personnel and Organisation Committee.

Lend Lease Corporation Annual Consolidated Financial Report 2007 10

3. Remuneration Report continued

b. Remuneration Policy – Audited continued

Directors and Executives continued

Elements of Remuneration continued

Long Term Incentives (LTIs) continued

Hedging in Relation to LTI Awards

The Company prohibits executives from entering into pre vesting hedging arrangements in relation to LTI awards. For awards made in the June 2007 financial year onwards, it is an explicit condition for awards to vest that executives declare that they have not entered into any such arrangement.

Retention Awards

When the Board believes an employee is an outstanding performer and the Company and its shareholders will gain from further incentivising him or her to remain with Lend Lease, a retention award may be made. As an incentive to remain with the Company requires a degree of certainty of value delivered to the individual at the end of the retention period, performance conditions are not generally applied to the ultimate payment of such an award. Details of the current awards for each specified executive are included in LTIs as part of the remuneration details disclosed in this Report.

Superannuation/Pension Plans

Pension plan arrangements are in place in most international locations. In the past, executives (and other employees) joined either a defined benefit or a defined contribution plan. Entry into all defined benefit plans has now ceased across the Group. All new Executive Directors and executives have the opportunity to join defined contribution plans.

Relationship of Remuneration to Company Performance

In considering the Group's performance and benefits for shareholder wealth, the Personnel and Organisation Committee, when setting the criteria for STI and LTI awards, has regard to the financial performance of the Group. The performance in respect of these measures for the current financial year and previous four financial years is summarised in the following table:

			AIFRS	Previous GAAP
		2007	2006	2005	2004	2003
Statutory profit/(loss) after tax1	A\$m	497.5	415.2	210.7	333.5	(714.8)
Operating profit after tax1	A\$m	413.7	354.2	310.42	255.93	230.24
Earnings per share5	cents	120.5	96.1	n/a	n/a	n/a
Dividends paid and declared	A\$m	308.5	243.7	227.2	177.4	129.4
Increase/(decrease) in closing share price6	A\$	4.55	1.03	2.68	1.93	(2.19)

1 Statutory profit/(loss) after tax represents profit attributable to the equity holders of the parent. Operating profit after tax excludes unrealised property investment revaluations of A\$51.6 million after tax for the June 2007 financial year (A\$61.0 million after tax for the June 2006 financial year) and excludes certain non recurring items (June 2007: ATO interest of A\$32.2 million after tax).

2 June 2005 is based on operating results excluding gains on exiting the REI businesses (A\$11.6 million after tax), cost savings implementation expenses (A\$47.7 million after tax), Lend Lease/GPT merger and net separation costs (A\$19.4 million after tax) and write off of GPT and Homemaker management agreements (A\$44.2 million after tax).

• 3 Consistent with June 2005, June 2004 operating results have been restated to also exclude the impact of Group restructuring and merger costs (A\$18.5 million after tax). June 2004 was based on operating results excluding the profit from the sale of IBMGSA (A\$79.7 million after tax), impact of exiting the REI businesses (A\$2.3 million loss after tax) and capital loss tax benefits arising from Australian tax consolidations (A\$18.7 million after tax) and including capital loss tax benefits (A\$13.0 million recouped against the capital gain on sale of IBMGSA).
• 4 June 2003 excludes the write down of REI businesses of A\$945.0 million after tax.
• 5 For 2006 LTI awards, one vesting condition is EPS, as defined in this financial report (excluding treasury shares) adjusted for unrealised property investment revaluations (unless assets have been sold).
• 6 For LTI awards, the starting and ending share prices are based on the average daily closing price over the award period (five consecutive trading days for the 2004 LTI and three months for the 2005 and 2006 LTIs). The table above represents the movement in the closing share price on 30 June of each financial year.

Operating profit after tax is considered in setting the STI targets while dividends, changes in share price and return of capital are included in the TSR calculation, which is one of the performance hurdles assessed for the LTI.

The Personnel and Organisation Committee considers that the aforementioned external performancelinked remuneration structure is appropriate because it:

• − Represents shareholders' 'bottom line' and provides an objective measure of value created for shareholders;
• − Is independent of accounting policies and accepted by institutional investors;
• − Is simple to benchmark externally.

3. Remuneration Report continued

b. Remuneration Policy – Audited continued

Non Executive Directors

Directors' fees have been set at A\$140,000 per annum with a fee of A\$15,000 for service on each Board Committee other than the Nomination Committee. Fee levels are in line with international benchmarks for a company the size of Lend Lease. Current Chairman's fees are A\$500,000, the Chairman of the Risk Management and Audit Committee receives an additional A\$35,000 per annum and the Chairmen of each the Nomination, Personnel and Organisation and Sustainability Committees receive an additional A\$25,000.

In addition, Non Executive Directors are compensated for time spent travelling to overseas Board and Board Committee meetings. This additional time is compensated as follows:

• − Travel less than four hours Nil;
• − Travel between four and 12 hours A\$2,000 each way;
• − Travel over 12 hours A\$5,000 each way.

To allow Directors to receive some of their annual remuneration in shares rather than cash, and thus align their interests with those of shareholders, a Non Executive Directors' Share Ownership Plan was approved at the 2000 Annual General Meeting and subsequently renewed at the 2003 Annual General Meeting. This plan allows Directors to acquire Lend Lease shares by forgoing an amount of Directors' fees equivalent to the value of the shares acquired. Subscriptions are made at the same price, at the same time and otherwise on the same terms as the Share Purchase Plan available to Australian and New Zealand registered shareholders and only while the Share Purchase Plan is operative. A Director is restricted from dealing with these shares until retirement. However, a Director may deal with shares at an earlier time to the extent necessary to meet an earlier tax liability in respect of the shares. This Plan has not been operative during the suspension of the Share Purchase Plan (since September 2003).

Retirement Plan

The Retirement Plan is designed to provide retirement benefits for Directors based on fees for Board service. Benefits are accrued in Lend Lease shares and will fluctuate in line with the value of Lend Lease shares. Under the plan, the Company will issue to, or acquire for, or for the benefit of, each Non Executive Director a number of Lend Lease shares equal in value to 0.2 times the Director's fees (being fees for attending and chairing Board and Board Committee meetings), but not additional fees.

Allocations are made in arrears on 1 January each year. For this purpose, the value of the shares on acquisition will be the weighted average price of Lend Lease shares traded on the Australian Securities Exchange during the five business days prior to 1 January each year. The shares will be accessible only on retirement. Directors will be exposed to share price risk until this time. However, shares may be sold at an earlier time to the extent necessary to meet an earlier tax liability in respect of the shares.

Retirement Plan Changeover Arrangements

A defined benefit Retirement Benefit Plan ('previous plan') was approved by shareholders at the 1990 Annual General Meeting. Changeover arrangements which were approved by shareholders at the 2000 Annual General Meeting have been effected to transition from the previous plan to the current plan for Directors who were on the Board on 31 December 2000. Under these arrangements, retiring Non Executive Directors will receive a multiple applied to the average of their annual emoluments (i.e. Directors' fees and amounts for additional services) over the previous three years. The multiple is 0.6 for each of the first five years of service as a Non Executive Director and 0.2 for each year over five years to 15 years. This multiple for each Director was frozen at the multiple that would have applied if the Director had retired on 31 December 2000.

The following table sets out the accrued retirement benefits under the previous plan as at 30 June 2007 (based on the multiple being frozen on 31 December 2000). The Board has resolved to cap the entitlements under the previous plan at the lower of the accrued retirement benefit as at 30 June 2003 (with interest payable at the 60day bank bill rate) and the retirement benefit calculated at the actual date of retirement.

Non Executive Directors	Years of Service at 31 December 2000	Accrued Retirement Benefit at 30 June 2007 A\$	Accrued Retirement Benefit at 30 June 2006 A\$
G Edington	1	111,249	92,467
P Goldmark	1	123,452	104,832

Non Executive Directors appointed since 1 January 2001 are not eligible to participate in the previous plan.

3. Remuneration Report continued

c. Remuneration Details – Audited

Details of the total remuneration of the Directors of Lend Lease Corporation Limited are set out on the following tables. In accordance with the requirements of AASB 124, the remuneration disclosures in the remuneration tables are calculated on an accruals basis and only include remuneration relating to the portion of the relevant periods that each individual was a Director.

2 0 0 Cu Ye 7 – t rre n ar	Sho rt T erm				Pos	t E loy mp me	nt	Sha re B ase	d P ent aym	Oth er Lon Ter g m
D ire to	Sal ary and Fe es Bas e	Inc ent ive 1 Bo nus	ST I Oth er Bo nus es	No n 2 Mo net ary	Su per ion uat ann	Life Ins ura nce	End of Ser vice	3 LTI s Ca sh Equ ity Set tled Set tled			Tot al	Pro tion of por Rem rati une on Per form anc e
c rs	A\$ 000 s	A\$ 000 s	A\$ 000 s	A\$ 000 s	A\$ 000 s	A\$ 000 s	A\$ 000 s	A\$ 000 s	A\$ 000 s	A\$ 000 s	A\$ 000 s	Rel d % ate
Ex ive D ire t to ec u c rs
G C lark e	1, 79 8	1, 88 2		51 4	63 1	92		36 3 7,			12 28 0 ,	58 .7
R T lor ay	97 6	87 9		57	20 2	4		1, 08 2	4 2, 29 2		5, 49 2	35 .7
To tal Ex utiv e D ire cto ec rs	2, 77 4	2, 76 1	–	57 1	83 3	96	–	8, 44 5	2, 29 2	–	17 77 2 ,
No Ex ive D ire t to n ec u c rs
D C for d raw	54 7				13				100		66 0
P C ole bat ch	21 9				13				34		26 6
G E din ton g	21 8				13				34		26 5
P G old rk ma	23 2				13				35		28 0
J H ill	21 7				13				33		26 3
D R yan	22 8				13				36		27 7
To tal No n E tiv e D ire cto xe cu rs	1, 66 1	–	–	–	78	–	–	–	5 27 2	–	2, 01 1
To tal Di tor rec s	43 4, 5	2, 76 1	–	57 1	91 1	96	–	8, 44 5	2, 56 4	–	19 78 3 ,

1The cash element of all STI bonuses has been accrued and paid and is based on the performance criteria as outlined in Section 3b. of this Report.

2'Non Monetary' includes relocation benefits (such as housing, home leave travel and tax return advice) and motor vehicle costs.

3Accrued value of LTI benefit for the year as determined by actuarial analysis. The 2004 and 2005 LTIs are expected to be settled in cash and the 2006 LTIs in shares, except for pre specified executives.

4Equity remuneration is in respect of Mr Taylor's retention incentive and participation in the Employee Share Acquisition Plan (ESAP).

5Comprises entitlements under the Non Executive Directors Retirement Benefit Plan.

3. Remuneration Report continued

c. Remuneration Details – Audited continued

Co 2 0 0 6 – ive Ye t m p ar a ar		Sho rt T erm				Pos t E loy nt mp me			d P ent ase aym	Oth er m7 Lon Ter g
	Sal ary		ST I					4 LTI s				Pro tion of por
	and Fe es Bas	Inc ive ent 1 Bo	Oth er 2 Bo	No n 3 Mo net	Su per ion uat	Life Ins	End of Ser vice	Ca sh Set tled	Equ ity Set tled		Tot al	Rem rati une on Per form
D ire to c rs	e A\$ 000 s	nus A\$ 000 s	nus es A\$ 000 s	ary A\$ 000 s	ann A\$ 000 s	ura nce A\$ 000 s	A\$ 000 s	A\$ 000 s	A\$ 000 s	A\$ 000 s	A\$ 000 s	anc e Rel d % ate
Ex ive D ire t to ec u c rs
G C lark e	1, 78 3	1, 96 7	2, 21 1	45 0	49 1	41		1, 28 0			8, 22 3	54 .8
R T lor ay	84 1	71 3	79 3	30	134	3		( 15 7)	5 34	37 8	2, 76 9	48 .7
8 A C ha mb erla in	25 2				36 5	11	1, 35 3	54 0		39 7	2, 91 8	18 .5
To tal Ex utiv e D ire cto ec rs	2, 87 6	2, 68 0	3, 00 4	48 0	99 0	55	1, 35 3	1, 66 3	34	77 5	13 91 0 ,
No Ex ive D ire t to n ec u c rs
D C for d raw	46 9				12				85		56 6
9 P C ole bat ch	98				9				14		12 1
G E din ton g	16 1				12				24		19 7
P G old rk ma	180				12				28		22 0
10 J H ill	35				3				4		42
11 R L on ge s	48				4				8		60
D R yan	169				12				28		20 9
To tal No n E tiv e D ire cto xe cu rs	1, 16 0	–	–	–	64	–	–	–	6 19 1	–	1, 41 5
To tal Di tor rec s	4, 03 6	2, 68 0	3, 00 4	48 0	1, 05 4	55	1, 35 3	1, 66 3	22 5	77 5	15 32 5 ,

1The cash element of all STI bonuses has been accrued and paid and is based on the performance criteria as outlined in Section 3b. of this Report.

2 'Other Bonuses' represent additional payments payable to employees who participated in the 2003 LTI grant and were employed on 30 June 2006 (the original vesting date of the grant). The 2003 LTI award did not vest and lapsed in accordance with the rules of the LTI program. The Lend Lease Corporation Board has awarded the additional payment in recognition of the performance achieved. Refer to Section 3b. of this Report.

3'Non Monetary' includes relocation benefits (such as housing, home leave travel and tax return advice) and motor vehicle costs.

4 Accrued value of LTI benefit for the year as determined by actuarial analysis. The 2004 and 2005 LTIs are expected to be settled in cash. Negative amounts represent an accrual reversal for the 2003 LTI which did not vest. Refer to Section 3d. of this Report.

5Equity remuneration is in respect of Mr Taylor's participation in the ESAP.

6Comprises entitlements under the Non Executive Directors Retirement Benefit Plan.

7'Other Long Term' represents cash retentions. Amounts due are expensed over the period of the retention.

8Mr Chamberlain resigned as an Executive Director on 30 September 2005.

9Mr Colebatch was appointed as a Non Executive Director on 1 December 2005.

10Ms Hill was appointed a Non Executive Director on 8 May 2006.

11Mr Longes resigned as Deputy Chairman and a Non Executive Director on 17 November 2005.

3. Remuneration Report continued

c. Remuneration Details – Audited continued

Details of the total remuneration of the executives of the Lend Lease Group are set out below and on the following page. In accordance with the requirements of AASB 124, the remuneration disclosures in the remuneration tables are calculated on an accruals basis and only include remuneration relating to the portion of the relevant periods that each individual was a key management person. As set out in Section 3a. of this Report, there has been a change in the assessment of key management personnel in the current year.

	Five Mo	hly Rem st H ig											Oth er Lon g
2 0 0 7 – Cu Ye t rre n ar		d rate une		Sho	rt T erm		Pos	t E loy mp me	nt	Sha	re B d P ase aym	ent	m5 Ter
			Sal ary	ST	I					3 LTI s					Pro tion of por
			and	Inc ent ive 1	Oth er	No n 2	Su per	Life	End of	Ca sh	Equ ity	4			Rem rati une on
Ex ive t ec u s	Gro up	Co mp any	Fee s A\$ 000 s	Bo nus A\$ 000 s	Bo nus es A\$ 000 s	Mo net ary A\$ 000 s	ion uat ann A\$ 000 s	Ins ura nce A\$ 000 s	Ser vice A\$ 000 s	Set tled A\$ 000 s	Set tled A\$ 000 s	Hy brid s A\$ 000 s	A\$ 000 s	Tot al A\$ 000 s	Per form anc e Rel d % ate
6 S M cC ann	3	3	85 5	1, 02 6		1	79	2		8 75	15			2, 73 6	65 .2
Fo rm er
7 R J ohn sto n			57 5	42 4		77 3	28 6	3		32				2, 09 3	21 .8
8 R B urr ow s	3	3	65 3	73 0		20 6	32 8	2	2, 23 1	47 5	16		60 8	5, 24 9	23 .0
To ta l e t ive xe cu s			2, 08 3	2, 18 0	–	98 0	69 3	7	2, 23 1	1, 26 5	31	–	60 8	10 07 8 ,
O he Ex ive in t t r ec u s Ca t he te f F ive g or o y H ig he Pa i d t s
9 R B utle r	3		1, 74 2	36 2		8	154	11		28 5	29 4			2, 85 6	22 .6
N H ill ug	3		1, 72 5	48 4		23 3	180	11		38 8	29 4			3, 31 5	26 .3
10 R L our ey		3	53 9	51 9		29	13			55 8	10			1, 66 8	64 .6
P M het to arc	3		69 7	49 8		35	9	5		30 8		86 0		2, 41 2	33 .4
N M art in		3	34 9	16 7		20 2	71			22 9				1, 01 8	38 .9
B S olle r		3	52 6	33 6		33 3	13	3		34 5			129	1, 68 5	40 .4
To l o he ive ta t t r e xe cu s			8 5, 57	2, 36 6	–	84 0	0 44	30	–	2, 113	59 8	86 0	12 9	12 95 4 ,

1The cash element of all STI bonuses has been accrued and paid in cash and is based on the performance criteria as outlined in Section 3b. of this Report.

2'Non Monetary' includes relocation benefits (such as housing, home leave travel, tax equalisation and tax return advice) and motor vehicle costs.

3Accrued value of LTI benefit for the year as determined by actuarial analysis. The 2004 and 2005 LTIs are expected to be settled in cash and the 2006 LTIs in shares, except for pre specified executives.

4'Hybrids' represents retention incentives that can be settled in cash or shares at the option of the executive.

5'Other Long Term' primarily represents cash retentions and accrual of statutory employee entitlements. Amounts due are expensed over the period of the retention.

6Mr McCann commenced as Chief Executive Officer Investment Management on 5 September 2005 and was appointed Group Finance Director on 21 March 2007.

7Mr Johnston resigned on 31 July 2007.

8 Mr Burrows relinquished his position of Chief Financial Officer on 21 March 2007. His post employment benefit reflects payments related to the notice period and discretionary payments to ensure transitional arrangements suitable to Lend Lease.

9Mr Butler commenced as Chief Executive Officer Lend Lease Retail and Communities UK in March 2007.

10Mr Lourey resigned as Group Head of Human Resources on 31 July 2007.

3. Remuneration Report continued

c. Remuneration Details – Audited continued

Co 2 0 0 6 – ive Ye t m p ar a ar	Five Mo	hly Rem st H ig rate d une		Sho	rt T erm		Pos	t E loy mp me	nt	Sha	re B d P ase aym	ent	Oth er Lon g m6 Ter
Ex ive t ec s u	Gro up	Co mp any	Sal ary and Fee s A\$ 000 s	ST Inc ent ive 1 Bo nus A\$ 000 s	I Oth er 2 Bo nus es A\$ 000 s	No n 3 Mo net ary A\$ 000 s	Su per uat ion ann A\$ 000 s	Life Ins ura nce A\$ 000 s	End of Ser vice A\$ 000 s	4 LTI s Ca sh Set tled A\$ 000 s	Equ ity Set tled A\$ 000 s	5 Hy brid s A\$ 000 s	A\$ 000 s	Tot al A\$ 000 s	Pro tion of por Rem rati une on Per form anc e Rel ate d %
7 S M cC ann		3	63 8	85 0		3	57	1		172	6			1, 72 7	59 .2
R J ohn sto n	3		45 6	59 5	38 0	66 8	21 4	2		( ) 64				2, 25 1	40 .5
R B urr ow s		3	59 6	48 2	155	8	28 6	1		22	24			1, 57 4	41 .9
8 M B ella ma n			34 2	173	134	44 5	6	2		( ) 58			10	1, 05 4	23 .6
P C rew es	3	3	38 7	33 9		49 6	66	5	1, 65 8	( 8) 25	16			2, 70 9	3.0
J D ani el			25 2	76		56	46			30				46 0	23 .0
R F ehr ing			39 0	22 2	193	4	35	2		( 18)	17			84 5	.0 47
9 N H ill ug	3		64 5	36 8	00 6 1,	17	12 6	5		77				2, 24 4	19 .8
10 P K ozi ol			11 7			3				( 38 )				82	( 46 .3)
R L our ey			47 5	25 0		15	12			95	6			85 3	40 .4
P M het to arc	3		69 2	52 3	52 2	44 5	9	5		( 16 7)		48 6		2, 51 5	34 .9
J S ick pan sw			51 9	140	35 7	42				( 20 3)				85 5	34 .4
To l e ive ta t xe cu s			5, 50 9	4, 01 8	2, 74 7	2, 20 2	85 7	23	1, 65 8	( 41 0)	69	48 6	10	17 16 9 ,
O t he Ex t ive in t he r ec s u Ca f F ive H ig he te t g or o s y Pa i d
11 R B utle r	3		65 3	36 3	00 6 1,	1	125	4		48				2, 20 0	18 .7
12 C C ree		3	33 9	114		43	144	3	31 8	( ) 51				91 0	6.9
B S olle r		3	50 3	28 3	35 1	25 8	12	4		( 150 )			12 6	38 1, 7	34 .9
To l o he ive ta t t r e xe cu s			1, 49 5	76 0	1, 35 7	30 2	28 1	11	31 8	( ) 153	–	–	12 6	4, 49 7

The cash element of all STI bonuses has been accrued and paid in cash and is based on the performance criteria as outlined in Section 3b. of this Report.

12 'Other Bonuses' represents additional payments payable to employees who participated in the 2003 LTI grant and were employed on 30 June 2006 (the original vesting date of the grant). The 2003 LTI award did not vest and lapsed in accordance with the rules of the LTI program. The Lend Lease Corporation Board has awarded the additional payment in recognition of the performance achieved. Refer to Section 3b. of this Report.

3'Non Monetary' includes relocation benefits (such as housing, home leave travel, tax equalisation and tax return advice) and motor vehicle costs.

4Accrued value of LTI benefit for the year as determined by actuarial analysis. The 2004 and 2005 LTIs are expected to be settled in cash.

5'Hybrids' represents retention incentives that can be settled in cash or shares at the option of the executive.

6'Other Long Term' primarily represents cash retentions. Amounts due are expensed over the period of the retention.

7Mr McCann commenced as Chief Executive Officer Investment Management on 5 September 2005.

8Mr Bellaman commenced as Chief Executive Officer Lend Lease Communities and Retail Americas on 1 October 2005.

9Mr Hugill commenced as Chief Executive Officer Lend Lease Communities Europe, Middle East and Africa on 15 August 2005.

10Mr Koziol transferred from the role of Chief Executive Officer Lend Lease Communities on 1 October 2005.

11Mr Butler commenced as Development Director Lend Lease Crosby Group on 15 August 2005.

12Ms Cree resigned as Group Head of Risk on 15 April 2006.

3. Remuneration Report continued

d. Long Term Incentives and Retentions – Audited

The following criteria apply to all parts of Section 3d. of this Report.

Criteria 1: The ability to achieve the LTI is dependent upon the executive remaining with Lend Lease. If the executive resigns before vesting, the grant will lapse.

Criteria 2: The award is dependent upon service to vesting date, however, an early redemption date due to cessation of service may result in a pro rata payout.

Criteria 3: Progressive percentage monthly vesting of award over the respective award service life. (Refer to Section 3e. of this Report for details of Mr Clarke's retention).

Criteria 4: Forfeiture on resignation. Pro rata on other service cessation.

Criteria 5: The TSR of Lend Lease is greater than the median TSR of 18 comparator companies (with 25% vesting at median performance rising to 100% on reaching top quartile performance).

Criteria 6: The TSR of Lend Lease measured against the ASX100 companies (with 50% vesting at median performance, rising to 100% on reaching top quartile performance).

Criteria 7: The EPS of Lend Lease as reported in the financial statements adjusted for treasury shares and unrealised gains or loses (with 100% vesting if a minimum compound annual growth rate of 10% over the three year performance period).

D ire to c rs	Gra nt Dat e	Ves ting 1 Dat e	Gra d nte Nu mb er	Aw ard Va lue 2 at G t D ate ran A\$	Aw ard Va lue at J 20 07 une A\$	Cu t Aw ard rren Exp ed ens 73 200 A\$	% V ed in est the Ye ar	% F orfe ited in 4 the Ye ar	Val Yet to ue Ves t m5 Min imu	Val Yet to ue Ves t 6 Ma xim um	Ser vice Crit eria	Per form anc e Crit eria	PS/ Ret ent ion
G C lark e	De c 2 002	De c 2 00 7	279 728 ,	2, 797 28 1 ,	5, 09 1, 050	2, 038 61 1 ,	20 .0	0.0	nil	n/a	Cri ter ia 3	non e	Ret ent ion
	De c 2 002	Jun 20 07	210 604 ,	2, 112 676 ,	2, 167 115 ,	2, 093 32 6 ,	55 .0	45 .0	nil	n/a	Cri ia 2 ter	Cri ia 5 ter	PS
	Jul 20 04	Jun 20 07	212 939 ,	2, 199 340 ,	2, 191 142 ,	1, 42 1, 722	55 .0	45 .0	nil	n/a	Cri ia 4 ter	Cri ia 5 ter	PS
	Jul 20 05	Jun 20 08	194 845 ,	2, 434 783 ,	1, 736 069 ,	828 739 ,	0.0	0.0	nil	n/a	Cri ia 4 ter	Cri ia 5 ter	PS
	Jul 20 06	Jun 20 09	198 620 ,	2, 784 652 ,	2, 94 562 1,	980 52 1 ,	0.0	0.0	nil	n/a	Cri ia 4 ter	Cri ia 6 ter 7 ,	PS
R T lor ay	Jul 20 04	Jun 20 07	63 959 ,	660 60 1 ,	658 138 ,	42 033 7,	.0 55	45 .0	nil	n/a	Cri ia 4 ter	Cri ia 5 ter	PS
	Jul 20 05	Jun 20 08	60 819 ,	759 994 ,	54 1, 89 7	258 685 ,	0.0	0.0	nil	n/a	Cri ter ia 4	Cri ter ia 5	PS
	Jul 20 06	Jun 20 09	80 243 ,	1, 125 00 7 ,	1, 188 399 ,	39 6, 133	0.0	0.0	nil	n/a	Cri ia 4 ter	Cri ia 6 7 ter ,	PS
	Oc t 2 006	Se t 2 00 7 p	84 40 7 ,	1, 374 992 ,	1, 564 906 ,	1, 115 636 ,	0.0	0.0	nil	n/a	Cri ia 2 ter	non e	Ret ion ent
	Oc t 2 006	Se t 2 008 p	84 40 7 ,	1, 374 992 ,	1, 564 906 ,	532 31 8 ,	0.0	0.0	nil	n/a	Cri ter ia 2	non e	Ret ent ion
	Oc t 2 006	Se t 2 009 p	84 408 ,	1, 37 008 5,	1, 564 924 ,	349 884 ,	0.0	0.0	nil	n/a	Cri ia 2 ter	non e	Ret ion ent
	Oc t 2 006	Se t 2 010 p	84 408 ,	1, 37 5, 008	1, 564 924 ,	260 578 ,	0.0	0.0	nil	n/a	Cri ter ia 2	non e	Ret ent ion
To tal Dir ect ors					22 032 775 , ,	10, 703 186 ,

1Performance shares are paid out at the share price at vesting date if cash settled.

2Award value represents the number of shares granted at the share price on grant date.

3 Current award expensed represents the 2007 year accrued value of the LTI or retentions determined by actuarial analysis. The aggregate for each key person's grant is shown in Section 3c. of this Report under 'LTIs Cash Settled' or 'Equity Settled'.

4The % forfeited during the year represents a reduction in the number of performance shares available to vest due to the highest level performance criteria not being achieved.

5The minimum value of grants yet to vest is A\$nil as the performance and service criteria may not be met and consequently the grant may not vest.

6The maximum value of grants yet to vest is not determinable as it is dependent on the market price of shares of the Company on the Australian Securities Exchange at the date the grant vests.

3. Remuneration Report continued

d. Long Term Incentives and Retentions – Audited continued

Ex ive t ec s u	Gra nt Dat e	Ves ting 1 Dat e	Gra d nte Nu mb er	Aw ard Va lue 2 at G t D ate ran A\$	Aw ard Va lue at J 20 07 une A\$	Exp ed ens 73 200 A\$	% V ed in est the Ye ar	% F orfe ited in 4 the Ye ar	Val Yet to ue Ves t m5 Min imu	Val Yet to ue Ves t 6 Ma xim um	Ser vice Crit eria	Per form anc e Crit eria	PS/ Ret ion ent
S M cC ann	Jul 20 05	Jun 20 08	102 033 ,	1, 275 004 ,	909 114 ,	433 979 ,	0.0	0.0	nil	n/a	Cri ter ia 4	Cri ter ia 5	PS
	Jul 20 06	Jun 20 09	65 62 1 ,	920 006 ,	97 1, 84 7	323 949 ,	0.0	0.0	nil	n/a	Cri ia 4 ter	Cri ia 6 7 ter ,	PS
Fo rm er
R J ohn sto n	Jul 20 04	Jun 20 07	16, 266	168 003 ,	167 37 7 ,	108 603 ,	.0 55	.0 45	nil	n/a	Cri ia 4 ter	Cri ia 5 ter	PS
	Jul 20 05	Jun 20 08	45 134 ,	563 994 ,	402 144 ,	( ) 76 127 ,	0.0	100 .0	nil	n/a	Cri ter ia 4	Cri ter ia 5	PS
	Jul 20 06	Jun 20 09	54 208 ,	759 996 ,	802 820 ,		0.0	100 .0	nil	n/a	Cri ia 4 ter	Cri ia 6 ter 7 ,	PS
R B urr ow s	Jul 20 04	Jun 20 07	12, 766	131 854 ,	131 36 2 ,	85 234 ,	55 .0	45 .0	nil	n/a	Cri ia 4 ter	Cri ia 5 ter	PS
	Jul 20 05	Jun 20 08	43 278 ,	540 802 ,	38 5, 607	184 075 ,	0.0	0.0	nil	n/a	Cri ia 4 ter	Cri ia 5 ter	PS
	Jul 20 06	Jun 20 09	41 655 ,	584 003 ,	616 91 1 ,	205 637 ,	0.0	0.0	nil	n/a	Cri ia 4 ter	Cri ia 6 7 ter ,	PS
To tal ive cut exe s					4, 38 7, 182	1, 265 350 ,

1Performance shares are paid out at the share price at vesting date if cash settled.

2Award value represents the number of shares granted at the share price on grant date.

3 Current award expensed represents the 2007 year accrued value of the LTI or retention, determined by actuarial analysis. The aggregate for each key person or other executive is shown in Section 3c. of this Report under 'LTIs Cash Settled'.

4The % forfeited during the year represents a reduction in the number of performance shares available to vest due to the highest level performance criteria not being achieved or service conditions not being met.

5The minimum value of grants yet to vest is A\$nil as the performance and service criteria may not be met and consequently the grant may not vest.

6The maximum value of grants yet to vest is not determinable as it is dependent on the market price of shares of the Company on the Australian Securities Exchange at the date the grant vests.

3. Remuneration Report continued

d. Long Term Incentives and Retentions – Audited continued

O he in he t t rs				Aw ard Va lue	Aw ard Va lue	Cu t Aw ard rren 3 Exp ed ens	% V ed est	% F orfe ited	Val Yet ue	Val Yet ue
Ca f F ive te g or o y	Gra nt	Ves ting 1	Gra d nte	2 at G t D ate ran	at J 20 07 une	200 7	in t he	in the	to V est	to V est 6	Ser vice	Per form anc e	PS/
H ig he Pa i d t s	Dat e	Dat e	Nu mb er	A\$	A\$	A\$	Yea r	r4 Yea	m5 Min imu	Ma xim um	Crit eria	Crit eria	Ret ent ion
R B utle r	Jul 20 05	Jun 20 08	28 238 ,	35 2, 862	25 1, 60 1	120 107 ,	0.0	0.0	nil	n/a	Cri ter ia 4	Cri ter ia 5	PS
	Jul 20 06	Jun 20 09	33 36 8 ,	46 7, 819	494 180 ,	164 727 ,	0.0	0.0	nil	n/a	Cri ia 4 ter	Cri ia 6 7 ter ,	PS
N H ill ug	Jul 20 05	Jun 20 08	45 810 ,	572 442 ,	408 167 ,	194 845 ,	0.0	0.0	nil	n/a	Cri ia 4 ter	Cri ia 5 ter	PS
	Jul 20 06	Jun 20 09	39 062 ,	649 54 7,	578 508 ,	192 836 ,	0.0	0.0	nil	n/a	Cri ia 4 ter	Cri ia 6 ter 7 ,	PS
R L ou rey	Jul 20 04	Jun 20 07	38 728 ,	400 002 ,	39 8, 51 1	258 584 ,	.0 55	45 .0	nil	n/a	Cri ia 4 ter	Cri ia 5 ter	PS
	Jul 20 05	Jun 20 08	32 010 ,	399 99 7 ,	285 209 ,	136 150 ,	0.0	0.0	nil	n/a	Cri ter ia 4	Cri ter ia 5	PS
	Jul 20 06	Jun 20 09	33 096 ,	464 006 ,	490 152 ,	163 384 ,	0.0	0.0	nil	n/a	Cri ia 4 ter	Cri ia 6 7 ter ,	PS
P M het to arc	Jul 20 04	Jun 20 07	46 200 ,	47 7, 177	475 39 8 ,	30 8, 462	55 .0	45 .0	nil	n/a	Cri ia 4 ter	Cri ia 5 ter	PS
	Jul 20 05	Jul 20 08	110 664 ,	1, 453 834 ,	2, 05 1, 71 1	859 938 ,	0.0	0.0	nil	n/a	Cri ia 2 ter	non e	7 Ret ion ent
N M in art	Jul 20 04	Jun 20 07	15, 40 1	159 069 ,	158 476 ,	102 82 7 ,	55 .0	45 .0	nil	n/a	Cri ia 4 ter	Cri ia 5 ter	PS
	Jul 20 05	Jun 20 08	12, 205	152 514 ,	108 747 ,	51 910 ,	0.0	0.0	nil	n/a	Cri ia 4 ter	Cri ia 5 ter	PS
	Jul 20 06	Jun 20 09	15, 157	212 50 1 ,	224 475 ,	74 825 ,	0.0	0.0	nil	n/a	Cri ia 4 ter	Cri ia 6 ter 7 ,	PS
B S olle r	Jul 20 04	Jun 20 07	21 499 ,	222 052 ,	22 1, 225	143 542 ,	55 .0	45 .0	nil	n/a	Cri ia 4 ter	Cri ia 5 ter	PS
	Jul 20 05	Jun 20 08	22 608 ,	282 510 ,	20 1, 43 7	96 160 ,	0.0	0.0	nil	n/a	Cri ia 4 ter	Cri ia 5 ter	PS
	Jul 20 06	Jun 20 09	21 39 8 ,	300 000 ,	31 6, 904	105 635 ,	0.0	0.0	nil	n/a	Cri ia 4 ter	Cri ia 6 7 ter ,	PS
To tal oth ive cut er exe s					6, 664 70 1 ,	2, 973 932 ,

1Performance shares are paid out at the share price at vesting date if cash settled.

2Award value represents the number of shares granted at the share price on grant date.

3 Current award expensed represents the 2007 year accrued value of the LTI or retention, determined by actuarial analysis. The aggregate for each key person or other executive is shown in Section 3c. of this Report under 'LTIs Cash Settled', 'Equity Settled' and 'Hybrids'.

4The % forfeited during the year represents a reduction in the number of performance shares available to vest due to the highest level performance criteria not being achieved.

5The minimum value of grants yet to vest is A\$nil as the performance and service criteria may not be met and consequently the grant may not vest.

6The maximum value of grants yet to vest is not determinable as it is dependent on the market price of shares of the Company on the Australian Securities Exchange at the date the grant vests.

7Retention incentives that can be settled in cash or shares at the option of the executive.

3. Remuneration Report continued

e. Service Agreements – Audited

Executive Directors and Executives

Remuneration and other terms of employment for the key management personnel and other executives in the category of five highest paid are formalised in service agreements. All of the employment contracts contain the conditions below:

Length of contract	−	No fixed term.
Remuneration review period	−	Annually by the Personnel and Organisation Committee.
Benefits	−	Australian resident executives are entitled to participate in the Lend Lease Employee Share Acquisition Plan;
	−	Other benefits vary, however typically include health insurance, life insurance, car allowances or motor vehicles leases and benefits provided by the Lend Lease Foundation;
	−	Executives that are relocated receive relocation packages. Benefits provided vary but typically include accommodation, transfer allowances, visas, shipping costs, school fees, home leave travel and tax advisory services.
STI participation	−	Executives are eligible for an award of STI remuneration. Refer to Section 3b. of this Report for further details and conditions.
LTI participation	−	Executives are eligible for an award of LTI remuneration. Refer to Section 3b. of this Report for further details and conditions.
Non compete and non solicitation clauses	−	Non compete or non solicitation terms vary in each individual's employment contract.
Termination of employment	−	Unless otherwise stated below, termination payments include base salary for the remainder of the notice period not served (up to 12 months), pro rata STI entitlements and LTI entitlements in accordance with the LTI program rules;
	−	All contracts with executives may be terminated early by either party;
	−	Immediate termination for misconduct or a serious breach of any of the terms of employment.

Other major provisions of the agreements relating to remuneration are set out below.

G Clarke

− Term of agreement: No fixed term however under the Lend Lease Corporation Constitution Mr Clarke was appointed as Managing Director for a term of five years effective 16 November 2006. Furthermore, his international assignment was extended to 30 September 2009 on the existing terms with the exception of the extension of home leave trips each term for children attending UK universities.

If still employed by the Company as at 1 July 2009, Mr Clarke's expatriate arrangements will cease and he will be subject to local terms and conditions, including the following:

• − Tax return preparation;
• − Home leave trips under existing terms;
• − Storage and insurance of items in the UK;
• − Existing pension and life cover provisions.
• − Notice period: 12 months.
• − Termination payments provided for under the contract: Base salary for the remainder of any notice period not served, cash value of pro rata benefits, pro rata STI entitlements (based on 60% achievement of objectives), LTI entitlements in accordance with the LTI program rules and the value of the retention award.

3. Remuneration Report continued

e. Service Agreements – Audited continued

Executive Directors and Executives continued

G Clarke continued

• − Retention award:
• − Award date: 9 December 2002.
• − Vest date: 9 December 2007.
• − Grant number and value: 279,728 Lend Lease shares, valued at A\$2,797,281 at grant date. The end payment is referable to the market value of 279,728 shares at vest date. Refer to Section 3d. of this Report for further details.
• − Vesting conditions: Mr Clarke must remain in employment with Lend Lease until 9 December 2007. Payment is due if the Company terminates his employment without cause prior to that date.
• − Forfeiture: The retention award is forfeited if Mr Clarke resigns prior to 9 December 2007, or if Lend Lease terminates Mr Clarke's employment for cause.
• − Early vesting conditions: A pro rata amount will be payable if the Company determines that Mr Clarke's employment should be terminated for poor performance.
• − Long term incentive:
• − Award date: 9 December 2002.
• − Vest date: 30 June 2007.
• − Grant number and value: 210,604 Lend Lease shares, valued at A\$2,112,676 at award date. The end payment is referable to the value of the award at vest date, A\$10.29, which takes into account that 55% of the award vested.
• − Vesting conditions: The TSR of Lend Lease must be greater than the median TSR of 18 comparator companies (with 25% vesting at median performance, rising to 100% on reaching top quartile performance). Mr Clarke was also required to remain in employment until the vest date.
• − Forfeiture: 45% of the award was forfeited as Lend Lease did not achieve top quartile TSR.
• − Non compete period post termination: Six months.
• − Non solicitation period post termination: 12 months.
• − Additional benefits: Golf club membership (which is transferable within the Group if Mr Clarke resigns).

R Taylor

• − Retention award:
• − Award date: 3 October 2006.
• − Vest date: Four equal tranches on each of:
  • − 1 September 2007;
  • − 1 September 2008;
  • − 1 September 2009;
  • − 1 September 2010.
• − Grant number and value: 337,630 Lend Lease shares, valued at A\$5,500,000 at award date. Refer to Section 3d. of this Report for further details.
• − Vesting conditions: Mr Taylor must remain in employment with Lend Lease or the vesting date must fall within a period of notice of termination in order for each tranche to vest.
• − Forfeiture: The retention award is forfeited if Mr Taylor resigns and the vesting conditions set out above are not met.
• − Non compete period post termination: Six months.
• − Non solicitation period post termination: Two years.

3. Remuneration Report continued

e. Service Agreements – Audited continued

Executive Directors and Executives continued

R Taylor continued

• − Notice period: Six months (if instigated by the employee) or 18 months (if instigated by the Company).
• − Termination on or after 1 September 2010: If Mr Taylor resigns or is terminated by the Company other than for cause on or after 1 September 2010:
• − LTI awards will vest as if employment had not been terminated; and
• − Any deferred component of an STI award not yet vested will vest in accordance with the rules as if employment had not been terminated.

S McCann

• − Retention Award:
• − Award date: 22 August 2007.
• − Vest date: 30 June 2012.
• − Grant number and value: Lend Lease shares to the value of A\$2,500,000 at award date, based on the five day weighted average share price up to and including the award date.
• − Vesting conditions: Mr McCann must remain in employment with Lend Lease to the vesting date. If Mr McCann's employment is terminated without cause by the Company prior to the vesting date, the award will vest on a pro rata basis.
• − Forfeiture: The retention award is forfeited if Mr McCann resigns or is terminated for cause, and the vesting conditions set out above are not met.
• − Notice period: Three months (if instigated by the employee) or 12 months (if instigated by the Company).
• − Termination payments provided for under the contract: If Lend Lease terminates Mr McCann's employment, Mr McCann's most recent LTI award will be extended by 12 months from the date on which the Company provided him with notice of termination.

R Johnston

• − Notice period: Six months.
• − Termination payments provided for under the contract: The Company will relocate Mr Johnston back to Australia consistent with the Group's policy for international assignments.

N Hugill

• − Notice period: 12 months.
• − Additional benefits:
• − The cost of annual subscriptions in respect of Mr Hugill's membership of two relevant professional institutions.
• − Non compete period post termination: 12 months.
• − Non solicitation period post termination: 12 months.

3. Remuneration Report continued

e. Service Agreements – Audited continued

Executive Directors and Executives continued

P Marchetto

• − Notice period: Six months.
• − Termination payments provided for under the contract: If the Company terminates Mr Marchetto's service agreement without cause, or Mr Marchetto terminates the service agreement for 'good reason' (as defined by Mr Marchetto's service agreement), Mr Marchetto is entitled to all accrued obligations as well as a severance payment that is:
• − 1.5 times Mr Marchetto's annual base salary as of the termination date;
• − 1.5 times the greater of: (a) the STI paid to Mr Marchetto during his last full year of employment by the Company; or (b) the average of the STI paid to Mr Marchetto during each of the last three full years Mr Marchetto has been paid an STI by the Company;
• − A pro rata share of Mr Marchetto's STI and LTI as calculated on the termination date at the sole discretion of the Company;
• − All other benefits that have accrued as of the termination date;
• − Payments are made less applicable taxes, withholdings and deductions;
• − In addition to the severance payment, Mr Marchetto is entitled to a release benefit equal to six months of base salary as of the termination date if the Company terminates Mr Marchetto's service agreement without cause. The release benefit will be reduced by any applicable taxes, withholdings and deductions.
• − Loans payable: Mr Marchetto had a loan payable of US\$300,000, payable at call. The loan was forgiven on 1 November 2005. In the event that prior to 31 July 2009 Mr Marchetto resigns from employment for other than 'good reason' (as defined in Mr Marchetto's employment contract) or the Company terminates Mr Marchetto's employment for cause, Mr Marchetto must pay to the Company as liquidated damages an amount equal to the forgiven principal plus interest accruing from 1 November 2005. The principal amount required to be repaid is reduced by US\$6,250 each month from August 2005 to July 2009 while Mr Marchetto is employed by the Company.
• − Additional benefits: Mr Marchetto will be reimbursed up to US\$8,500 per annum for membership dues at a club of Mr Marchetto's choosing that is suitable for business entertaining.
• − Non compete period post termination: 12 months.
• − Non solicitation period post termination: 12 months.

R Butler

• − Notice period: 12 months.
• − Additional benefits:
• − The cost of annual subscriptions in respect of Mr Butler's membership of two relevant professional institutions.
• − Non compete period post termination: 12 months.
• − Non solicitation period post termination: 12 months.

B Soller

• − Notice period: Six months (if instigated by the employee) or 12 months (if instigated by the Company).
• − Non compete period post termination: Six months.
• − Non solicitation period post termination: Six months.
• − Other benefits:
• − Relocation benefits as part of permanent relocation to Australia.
• − Assignment bonus of A\$188,225, payable on a pro rata basis to Mr Soller up to 12 October 2007.

3. Remuneration Report continued

e. Service Agreements – Audited continued

R Burrows

• − Notice period: Not specified in employment contract. It is expected that the required notice would be in the range of that given to other executives having regard to seniority and length of service.
• − Mr Burrows and the Company entered into a Deed of Release following Mr Burrows' relinquishment of his position on 21 March 2007. His cessation of employment will be no later than 1 November 2007. The terms of this Deed of Release have been reflected in the remuneration table in Section 3c. of this Report.

N Martin

• − Notice period: Six months.
• − Termination payments provided for under the contract: The Company will relocate Mr Martin back to the UK consistent with the Group's policy for international assignments.

R Lourey

− Notice period: Six months (if instigated by the employee) or 12 months (if instigated by the Company).

Non Executive Directors

Under the Company's constitution, at each Annual General Meeting, onethird of the Directors and any other Director who will have been in office for three or more Annual General Meetings since he or she was elected (excluding the Managing Director) must retire from office and may submit themselves for reelection. Newly appointed Directors must seek election at the first meeting of shareholders following their appointment.

It is the Board's current policy that Non Executive Directors appointed from February 2002 will be limited to a maximum of three terms of three years. This policy may only be varied by the Board in exceptional circumstances.

f. Additional Information – Audited

Additional information in relation to key management personnel's equity holdings and transactions, loans and other transactions is contained in Note 35 of the Consolidated Financial Statements.

4. Other

a. Share Options

No share options were issued during the year by the Company or any of its controlled entities, and there are no such options on issue.

b. Indemnification and Insurance of Directors and Officers

The Company's Constitution provides for indemnification in favour of each of the Directors named on pages 1 to 3 of this Report, the Company Secretaries, Mr W Hara and Ms S J Sharpe, and officers of the Company or of wholly owned subsidiaries or related entities of the Company ('Officers') to the extent permitted by the Corporations Act 2001.

For related entities, the indemnification is provided unless the Directors determine otherwise. For unrelated entities in which Lend Lease has an interest, deeds of indemnity may be entered into between Lend Lease Corporation Limited and the Director or Officer. Since the date of the last report, the Company has not entered into any separate deeds of indemnity.

In accordance with the Corporations Act 2001, the Constitution also permits the Company to purchase and maintain insurance or pay or agree to pay a premium for insurance for Officers against any liability incurred as an officer of the Company or of a related body corporate. This may include a liability for reasonable costs and expenses incurred in defending proceedings, whether civil or criminal, and whatever their outcome. During the year, Lend Lease paid insurance premiums of A\$564,323 in respect of its Directors' and Officers' liability policies. Due to confidentiality obligations and undertakings of the policy, no further details in respect of the premium or policy can be disclosed.

4. Other continued

c. Non Audit Services

During the year KPMG, the Company's auditor, performed certain other services in addition to its statutory duties.

The Board has considered the non audit services provided during the year by the auditor and, in accordance with written advice provided by resolution of the Risk Management and Audit Committee, is satisfied that the provision of those non audit services during the year by the auditor is compatible with, and did not compromise, the auditor independence requirements of the Corporations Act 2001 for the following reasons:

• − All non audit services were subject to the corporate governance procedures adopted by the Company and have been reviewed by the Risk Management and Audit Committee to ensure they do not impact the integrity and objectivity of the auditor;
• − The non audit services provided do not undermine the general principles relating to auditor independence as set out in APES 110 'Code of Ethics for Professional Accountants', as they did not involve reviewing or auditing the auditor's own work, acting in a management or decision making capacity for the Company, acting as an advocate for the Company or jointly sharing risks and rewards.

A copy of the Lead Auditor's Independence Declaration as required under Section 307C of the Corporations Act 2001 is included at the end of this Report.

Details of the amounts paid to the auditor of the Company, KPMG, and its related practices for audit and non audit services provided during the year are set out below.

		Consolidated
	June 2007	June 2006
	A\$000s	A\$000s
Audit and Review of Financial Reports	6,798	5,872
Other Services
KPMG
International assignees tax services	202	1,508
Tax services	456	1,052
Accounting advice	82	417
Other services	260	272
Total other services	1,000	3,249
Total audit and other services	7,798	9,121

d. Rounding Off

Lend Lease Corporation Limited is a company of the kind referred to in the Australian Securities and Investments Commission Class Order 98/100 dated 10 July 1998 and, in accordance with that Class Order, amounts in the financial statements and this Report have been rounded off to the nearest tenth of a million dollars or, where the amount is A\$50,000 or less, zero, unless specifically stated to be otherwise.

This Report is made in accordance with a resolution of the Board of Directors and is signed for and on behalf of the Directors.

Sydney, 15 August 2007

_____________________________ _____________________________

D A Crawford G A Clarke

Chairman Managing Director

	Consolidated Financial Statements 1
	Income Statements1
	Balance Sheets2
	Statements of Changes in Equity 3
	Statements of Cash Flows 5
	Notes to the Consolidated Financial Statements6
1.	Significant Accounting Policies6
2.	Revenue18
3.	Other Income 19
4.	Other Operating (Income) and Expenses19
5.	Taxation 21
6.	Dividends and Earnings Per Share 25
7.	Cash and Cash Equivalents 26
8.	Loans and Receivables 26
9.	Inventories 27
	10. Investments Accounted for Using the Equity Method 28
	11. Investment Properties32
	12. Other Financial Assets 33 13. Property, Plant and Equipment 34
	14. Intangible Assets 35
	15. Defined Benefit Plan Asset37
	16. Other Assets39
	17. Trade and Other Payables 39
	18. Borrowings and Financing Arrangements40
	19. Provisions41
	20. Other Financial Liabilities42
	21. Other Non Financial Liabilities 42
	22. Defined Benefit Plan Liability 43
	23. Issued Capital and Treasury Shares45
	24. Reserves 45
	25. Retained Earnings46
	26. Minority Interests 46 27. Contingent Liabilities47
	28. International Currency Management and Financial Instruments 47
	29. Interest in Joint Venture Operations 52
	30. Consolidated Entities 53
	31. Segment Reporting56
	32. Commitments59
	33. Notes to the Statements of Cash Flows 60
	34. Employee Benefits61
	35. Key Management Personnel Disclosures 66
	36. Non Director Related Party Information 67
	37. Events Subsequent to Balance Date68
	Directors' Declaration 69

Consolidated Financial Statements

Income Statements

Year ended 30 June 2007

			Consolidated	Company
	Note	June 2007 A\$m	June 2006 A\$m	June 2007 A\$m	June 2006 A\$m
Revenue
Revenue from the sale of development properties	2a	1,036.3	1,773.4
Revenue from the provision of services	2b	12,948.2	10,129.9
Finance revenue	2c	101.8	33.5	14.7	19.8
Other revenue	2d	195.6	190.0	319.1	237.9
Total revenue		14,281.9	12,126.8	333.8	257.7
Other Income	3	173.3	92.7	3.2	0.6
Expenses
Project Management, Construction and Private Finance Initiatives
(PFIs) activities
Cost of inventories sold		(11,767.8)	(9,103.7)
Other expenses		(369.8)	(323.2)
Retail and Communities activities
Cost of properties sold		(1,350.1)	(1,831.4)
Other expenses		(310.1)	(387.7)
Investment Management activities		(48.5)	(31.1)
Corporate and administrative activities expenses		(88.8)	(94.9)	61.8	(58.7)
Finance costs	4	(81.7)	(61.8)	(10.5)	(16.2)
Total expenses		(14,016.8)	(11,833.8)	51.3	(74.9)
Share of profit of associates accounted for using the equity method	10a	141.1	150.5
Share of profit of joint venture entities accounted for using the equity method	10b	48.5	36.5
Profit before tax		628.0	572.7	388.3	183.4
Income tax (expense)/revenue	5a	(127.8)	(150.1)	2.7	18.4
Profit after tax		500.2	422.6	391.0	201.8
Profit after tax attributable to: Members of Lend Lease Corporation Limited	25	497.5	415.2	391.0	201.8
Minority interests		2.7	7.4
Profit after tax		500.2	422.6	391.0	201.8
Basic Earnings Per Share
Shares excluding treasury shares (cents)	6b	134.5	112.7
Shares on issue (cents)	6b	124.3	104.0
Diluted Earnings Per Share
Shares excluding treasury shares (cents)	6c	134.4	112.7
Shares on issue (cents)	6c	124.2	104.0

Balance Sheets

As at 30 June 2007

			Consolidated		Company
	Note	June 2007 A\$m	June 2006 A\$m	June 2007 A\$m	June 2006 A\$m
Current Assets
Cash and cash equivalents	7	550.1	559.5	2.0	1.5
Loans and receivables	8	2,209.7	1,662.6	2,484.5	2,288.1
Inventories	9	911.2	940.8
Current tax assets	5b	7.1	3.1		3.5
Other financial assets	12	646.5	24.2	1.8	1.2
Other assets	16	189.6	188.3
Total current assets		4,514.2	3,378.5	2,488.3	2,294.3
Non Current Assets
Loans and receivables	8	293.6	193.4	112.5	52.0
Inventories	9	1,326.1	1,213.1
Investments accounted for using the equity method	10	1,139.6	999.8
Investment properties	11	256.6	287.0
Other financial assets	12	424.7	723.8	1,558.6	1,502.0
Deferred tax assets	5c	415.9	389.3	32.0	36.8
Property, plant and equipment	13	116.9	110.1	0.2	0.4
Intangible assets	14	788.1	809.7
Defined benefit plan asset	15	23.1	21.7	23.1	21.7
Other assets	16	37.4	39.9
Total non current assets		4,822.0	4,787.8	1,726.4	1,612.9
Total assets		9,336.2	8,166.3	4,214.7	3,907.2
Current Liabilities
Trade and other payables	17	3,612.0	2,898.6	1,431.2	1,344.7
Provisions	19	250.7	277.5	45.7	54.8
Current tax liabilities	5b			27.6
Other financial liabilities	20	5.6		11.1	4.6
Other non financial liabilities	21	0.5	3.0
Total current liabilities		3,868.8	3,179.1	1,515.6	1,404.1
Non Current Liabilities
Trade and other payables	17	217.0	209.9		1.1
Borrowings and financing arrangements	18	1,076.2	846.0
Provisions	19	13.4	26.1	0.4	0.3
Deferred tax liabilities	5c	504.5	415.9	8.7	7.0
Other financial liabilities	20	249.3	211.2	69.8	31.3
Other non financial liabilities	21	7.6	92.2
Defined benefit plan liability	22	156.4	174.6
Total non current liabilities		2,224.4	1,975.9	78.9	39.7
Total liabilities		6,093.2	5,155.0	1,594.5	1,443.8
Net assets		3,243.0	3,011.3	2,620.2	2,463.4
Equity
Issued capital	23	854.4	834.7	854.4	834.7
Treasury shares	23	(67.4)	(64.5)	(92.5)	(89.6)
Reserves	24	97.7	149.7	173.5	168.3
Retained earnings	25	2,276.8	2,018.2	1,684.8	1,550.0
Total equity attributable to equity holders of the parent		3,161.5	2,938.1	2,620.2	2,463.4
Minority interests	26	81.5	73.2
Total equity		3,243.0	3,011.3	2,620.2	2,463.4

Statements of Changes in Equity

Year ended 30 June 2007

			Consolidated		Company
	Note	June 2007 A\$m	June 2006 A\$m	June 2007 A\$m	June 2006 A\$m
Issued Capital and Treasury Shares
Issued Capital
Opening balance at beginning of financial year		834.7	834.6	834.7	834.6
Ordinary share issues		19.7	0.1	19.7	0.1
Closing balance at end of financial year	23	854.4	834.7	854.4	834.7
Treasury Shares
Opening balance at beginning of financial year Treasury shares acquired		(64.5) (6.7)	(68.1)	(89.6) (6.7)	(94.2) (0.1)
Treasury shares vested		3.8	3.6	3.8	4.7
Closing balance at end of financial year	23	(67.4)	(64.5)	(92.5)	(89.6)
Total issued capital and treasury shares		787.0	770.2	761.9	745.1
Reserves
Fair Value Revaluation Reserve
Opening balance at beginning of financial year		101.7		0.8
Adjustment on adoption of Financial Instruments Standards AASB 132 and AASB 139 (net of tax)			113.9		0.8
Revaluation gain taken to equity (net of tax)		162.1	30.7	0.5
Transfer of fair value revaluation reserve to income statement on asset
disposal (net of tax) Effect of foreign exchange rate movements		(133.4) (0.2)	(43.1) 0.2
Closing balance at end of financial year	24a	130.2	101.7	1.3	0.8
Hedging Reserve Opening balance at beginning of financial year		(14.4)
Adjustment on adoption of Financial Instruments Standards AASB 132
and AASB 139 (net of tax)			(3.4)
Movements attributable to effective cash flow hedges taken to equity (net of tax)		(20.8)	(10.6)
Transfer of hedge reserve to income statement		(1.1)
Effect of foreign exchange rate movements		7.2	(0.4)
Closing balance at end of financial year	24b	(29.1)	(14.4)	–	–
Foreign Currency Translation Reserve
Opening balance at beginning of financial year		4.4	(13.5)
Movements attributable to translation and hedging of foreign operations		(55.3)	17.9
Closing balance at end of financial year	24c	(50.9)	4.4	–	–
Equity Compensation Reserve
Opening balance at beginning of financial year		7.6	6.0	7.6	6.0
Movements attributable to unallocated treasury shares Closing balance at end of financial year	24d	4.7 12.3	1.6 7.6	4.7 12.3	1.6 7.6
Other Compensation Reserve
Opening balance at beginning of financial year Movements attributable to allocated treasury shares		55.3	67.9 (12.6)	55.3	67.9 (12.6)
Closing balance at end of financial year	24e	55.3	55.3	55.3	55.3

Statements of Changes in Equity continued

Year ended 30 June 2007

			Consolidated		Company
		June 2007	June 2006	June 2007	June 2006
	Note	A\$m	A\$m	A\$m	A\$m
Reserves continued
Capital Reserve
Opening balance at beginning of financial year		104.6	104.6	104.6	104.6
Closing balance at end of financial year	24f	104.6	104.6	104.6	104.6
Minority Interest Acquisition Reserve
Opening balance at beginning of financial year		(109.5)	(22.4)
Movements attributable to acquisition1		(20.0)	(92.7)
Effect of foreign exchange rate movements		4.8	5.6
Closing balance at end of financial year	24g	(124.7)	(109.5)	–	–
Total reserves		97.7	149.7	173.5	168.3
Retained Earnings Opening balance at beginning of financial year		2,018.2	1,782.5	1,550.0	1,556.4
Profit attributable to members of Lend Lease Corporation Limited		497.5	415.2	391.0	201.8
Dividends forgone pursuant to Share Election Plan		6.5	13.6	6.5	13.6
Dividends paid		(263.9)	(235.4)	(263.9)	(235.4)
Less: Dividends on treasury shares		20.2	18.6
Gain on utilisation of treasury shares recognised directly in retained earnings		0.8	23.9	1.2	13.6
Other		(2.5)	(0.2)
Closing balance at end of financial year	25	2,276.8	2,018.2	1,684.8	1,550.0
Minority Interests
Opening balance at beginning of financial year		73.2	18.8
Share of movement in profit for financial year		2.7	7.4
Movements attributable to acquisition		14.9	52.4
Movements attributable to disposal		(5.1)	(0.5)
Effect of foreign exchange rate/other movements		(4.2)	(4.9)
Closing balance at end of financial year	26	81.5	73.2	–	–
Total equity		3,243.0	3,011.3	2,620.2	2,463.4
Total Recognised Income and Expense for Financial Year
Non profit items recognised directly in equity		88.5	45.4	0.5
Profit after tax for financial year		497.5	415.2	391.0	201.8
		586.0	460.6	391.5	201.8
Total income and expense for financial year attributable to:
Members of Lend Lease Corporation Limited		583.3	453.2	391.5	201.8
Minority interests		2.7	7.4
		586.0	460.6	391.5	201.8

1 The June 2007 movement represents the acquisition of an additional 3% interest in Crosby Lend Lease (June 2006: 12.5% Actus Lend Lease).

Statements of Cash Flows

Year ended 30 June 2007
		Consolidated			Company
	Note	June 2007 A\$m	June 2006 A\$m	June 2007 A\$m	June 2006 A\$m
Cash Flows from Operating Activities
Cash receipts in the course of operations		12,526.2	9,853.0	60.9	53.5
Cash payments in the course of operations		(12,388.5)	(9,623.6)	(85.4)	(80.4)
Property development receipts	33b	1,169.5	1,704.7
Property development expenditure	33b	(1,007.7)	(1,169.5)
Interest received		52.1	30.3	14.9	24.0
Interest paid		(48.3)	(60.8)	(10.6)	(16.3)
Dividends/distributions received		134.7	64.6	255.9	168.7
Income tax (paid)/received in respect of operations		(80.8)	(138.4)	7.8	(27.4)
Net cash provided by operating activities	33a	357.2	660.3	243.5	122.1
Cash Flows from Investing Activities
Sale/redemption of investments		567.6	260.3
Acquisition of investments		(843.4)	(274.9)
Acquisition of investment properties		(55.0)
Acquisition of other assets		(0.5)
Loans to associates/related parties		(15.8)	(26.7)
Acquisition of consolidated entities			(762.1)
Acquisition of minority interest		(1.4)	(92.5)
Disposal of consolidated entities (net of cash disposed)	30c	26.4	1.9
Sale of property, plant and equipment		509.0	10.4
Acquisition of property, plant and equipment		(567.4)	(26.5)	(0.1)
Acquisition of intangible assets		(2.2)
Net cash used in investing activities		(382.7)	(910.1)	(0.1)	–
Cash Flows from Financing Activities
Proceeds from borrowings		1,567.2	2,549.2
Repayment of borrowings		(1,287.8)	(2,111.9)
Dividends paid		(237.2)	(203.2)	(257.4)	(221.8)
Decrease in financing of consolidated entities Increase/(decrease) in capital of minority interest		14.9	(0.3)	14.5	99.3
Net cash provided by/(used in) financing activities		57.1	233.8	(242.9)	(122.5)
Other Cash Flow Items
Effect of foreign exchange rate movements on cash and
cash equivalents		(41.0)	5.9
Net (decrease)/increase in cash and cash equivalents		(9.4)	(10.1)	0.5	(0.4)
Cash and cash equivalents at beginning of financial year		559.5	569.6	1.5	1.9
Cash and cash equivalents at end of financial year	7	550.1	559.5	2.0	1.5

1. Significant Accounting Policies

Lend Lease Corporation Limited (the 'Company') is domiciled in Australia. The consolidated financial report of the Company for the financial year ended 30 June 2007 comprises the Company and its subsidiaries (together referred to as the 'consolidated entity' or the 'Group') and the consolidated entity's interest in associates and jointly controlled entities.

The financial report was authorised for issue by the Directors on 15 August 2007.

a. Statement of Compliance

The consolidated financial report is a general purpose financial report which has been prepared in accordance with Australian Accounting Standards (AASBs) (including Australian Interpretations) adopted by the Australian Accounting Standards Board and the Corporations Act 2001. The consolidated financial report of the Group also complies with International Financial Reporting Standards (IFRS) and Interpretations adopted by the International Accounting Standards Board.

b. Basis of Preparation

The financial report is presented in Australian dollars and is prepared under the historical cost basis except for the following assets and liabilities which are stated at their fair value: derivative financial instruments, investments held for trading, investments available for sale, investment property and liabilities for cash settled share based compensation plans. Recognised assets and liabilities that are hedged are stated at fair value in respect of the risk that is hedged.

The preparation of a financial report that complies with Australian Accounting Standards requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses.

These estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. Information about critical accounting judgements in applying the Group's accounting policies is set out in Accounting Policy Note 1ad.

The accounting policies set out below have been applied consistently to all financial years presented in the consolidated financial statements and by all entities in the consolidated entity. The Group has elected to early adopt revised AASB 101 'Presentation of Financial Statements' (October 2006).

Certain comparative amounts have been reclassified to conform with the current year's presentation.

Basis of Consolidation

The Group consolidation comprises all entities controlled by the Company. Control exists when the Company has the power, directly or indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that are presently exercisable or convertible are taken into account. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases.

Intragroup balances and transactions, and any unrealised gains or losses arising from intragroup transactions, are eliminated in preparing the consolidated financial statements. Investments in subsidiaries are carried at their cost of acquisition in the Company's financial statements. The Company sponsors a number of employee benefit vehicles, including employee share plans. Under AASBs, these vehicles, while not legally controlled, are required to be consolidated for accounting purposes.

c. New Accounting Standards

Certain new accounting standards and interpretations have been published that are not mandatory for the financial year ended 30 June 2007 but are available for early adoption. The Group has not applied the following standards in preparing this financial report. The Group's assessment of these new standards and interpretations is set out below:

• − AASB 7 'Financial Instruments: Disclosures' and AASB 200510 'Amendments to Australian Accounting Standards'. AASB7 and AASB 200510 are applicable to annual reporting periods beginning on or after 1 January 2007. Application of these standards will not affect any of the amounts recognised in the financial statements, but will impact the type of information disclosed particularly in relation to the Group's financial instruments.
• − AASB 8 'Operating Segments' and AASB 20073 'Amendments to Australian Accounting Standards arising from AASB 8'. AASB 8 and AASB 20073 are applicable to annual reporting periods on or after 1 January 2009. These standards replace the presentation requirements of segment reporting in AASB 114 'Segment Reporting'. The standards are only concerned with disclosure information and application will not affect the financial results of the Group.

1. Significant Accounting Policies continued

c. New Accounting Standards continued

− AASB 20074 'Amendments to Australian Accounting Standards Arising From ED151 and Other Amendments'. AASB 20074 is applicable to annual reporting periods on or after 1 July 2007 and must therefore be applied to the Group's June 2008 financial report. This standard allows all options available under IFRS to be available under Australian Accounting Standards. This standard makes amendments to a number of Australian Accounting Standards to introduce various accounting policy options, delete various disclosures presently required and to make a number of editorial amendments.

While a large number of Australian Accounting Standards are amended by AASB 20074, the key accounting policy options it introduces relate to the accounting for jointly controlled entities using the proportionate consolidation method and the presentation of the cash flow statement.

At the date of preparation of this financial report, the Directors of the Company have not decided on which optional accounting treatments will be adopted on the initial application of AASB 20074. Accordingly, the potential financial impact of AASB 20074 on the financial statements is yet to be evaluated. It is expected that in the Group's June 2008 financial report, certain information may no longer be disclosed, or may be disclosed in an alternative manner.

• − AASB Interpretation 10 'Interim Financial Reporting and Impairment'. Interpretation 10 will be mandatory for the Group's June 2008 financial report. The interpretation prohibits the reversal of an impairment loss recognised in a previous interim period in respect of goodwill, an investment in an equity instrument or a financial asset carried at cost. The interpretation is not expected to impact the Group or Company's financial statements.
• − AASB Interpretation 11 'AASB 2 Share based Payment Group and Treasury Share Transactions' and AASB 20071 'Amendments to Australian Standards arising from AASB Interpretation 11' (AASB 2). AASB Interpretation 11 and AASB 20071 are mandatory for the Group's June 2008 financial report. They address the classification of a share based payment transaction (as equity or cash settled), in the financial statements of the entity receiving the services. The interpretation is not expected to impact the Group or Company's financial statements.
• − AASB Interpretation 12 'Service Concession Arrangements' and AASB 20072 'Amendments to Australian Accounting Standards arising from AASB Interpretation 12'. AASB Interpretation 12 and AASB 20072 are applicable to annual reporting periods beginning on or after 1 January 2008. They address the accounting for service concession operators, but not grantors, for public to private service concession arrangements. The potential effect of Interpretation 12 and AASB 20072 on the Group's financial statements is yet to be determined.

d. Revenue, Other Income and Profits

Revenue and Profits from the Sale of Development Properties

Revenue and profits from the sale of development properties is recognised in the income statement when:

• − The significant risks and rewards have been transferred to the buyer;
• − The Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the development properties sold;
• − The revenue can be measured reliably and it is probable that the Group will receive the consideration due; and
• − The Group can measure reliably the costs incurred or to be incurred.

Revenue from the Provision of Services

Revenue for the provision of services is recognised in the income statement in proportion to the stage of completion of the transactions at the balance sheet date:

• − For property construction: the value of work performed using the percentage complete method, which is measured by reference to actual costs to date as a percentage of total forecast costs for each contract;
• − For property and funds management: property development and management fee entitlements for services rendered; and
• − For management of retirement villages: deferred management fees are recognised on an accruals basis based on a present value (or discounted) assessment of revenue earned from the management agreements on retirement villages at current sales values.

Dividends

Dividend income is recognised when the right to receive payment is established, usually on declaration of the dividend.

1. Significant Accounting Policies continued

d. Revenue, Other Income and Profits continued

Rental Income

Rental income is recognised in the income statement on a straightline basis over the term of the lease unless another systematic basis is more appropriate. Lease incentives granted are recognised as an integral part of the total rental income.

Net Gains or Losses on Sale of Investments

Net gains or losses on sale of investments are recognised when an unconditional contract is in place.

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 original effective interest rate of the instrument, and continues unwinding the discount as interest income. Interest income on impaired loans is recognised either as cash is collected or on a cost recovery basis as conditions warrant.

e. Income Taxes

Income tax on the profit or loss for the financial year comprises current and deferred tax. Income tax is recognised in the income statement except to the extent that it relates to items recognised directly to equity, in which case it is recognised in equity.

Current tax is the expected tax payable on the taxable income for the financial year, using tax rates enacted or substantively enacted at the balance sheet date, and any adjustment to tax payable in respect of previous financial years.

Deferred tax is measured using the balance sheet liability method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The following temporary differences are not provided for: the initial recognition of goodwill, the initial recognition of assets or liabilities that affect neither accounting nor taxable profit, and differences relating to investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future. Measurement of deferred tax is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the balance sheet date.

A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

The Company is the head entity in the Australian Tax Consolidated Group comprising all the Australian wholly owned subsidiaries. The Company entered the Australian Tax Consolidation Regime effective 1 July 2002.

In addition to its own current and deferred tax amounts, the Company 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 Australian wholly owned subsidiaries of the Australian Tax Consolidated Group (after elimination of intragroup transactions).

The Australian Tax Consolidated Group has entered into a tax funding arrangement that requires wholly owned Australian subsidiaries to make contributions to the Company for tax liabilities and deferred tax balances arising from external transactions occurring after the implementation of tax consolidation. The contributions are broadly calculated as if each entity paid tax on a stand alone basis.

The assets and liabilities arising under the Australian tax funding arrangement are recognised as intercompany assets and liabilities (at call) with a consequential adjustment to income tax expense/revenue.

f. Impairment

The carrying amounts of the Group's assets, investment properties (see Accounting Policy Note 1h.), inventories (see Accounting Policy Note 1n.) and deferred tax assets (see Accounting Policy Note 1e.) are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the asset's recoverable amount is estimated. For goodwill and intangible assets with an indefinite useful life, the recoverable amount is estimated annually. An impairment loss is recognised whenever the carrying amount of an asset or its cash generating unit exceeds its recoverable amount. Impairment losses are recognised in the income statement unless an asset has been previously revalued through reserves.

Impairment losses recognised in respect of cash generating units are allocated first to reduce the carrying amount of any goodwill allocated to the cash generating unit (or group of units) and then to reduce the carrying amount of other assets in the unit (or group of units) on a pro rata basis.

1. Significant Accounting Policies continued

f. Impairment continued

Calculation of Recoverable Amount

The recoverable amount of the Group's investments in held to maturity securities and receivables is calculated as the present value of expected future cash flows, discounted at the original effective interest rate inherent in the asset. Cashflows relating to short term receivables are not discounted if the effect of discounting is immaterial (see Accounting Policy Note 1l.).

The recoverable amount of other assets is the greater of their fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre tax discount rate that reflects current market assessments of the time value of money and the risks specific to the assets. For assets that do not generate largely independent cash inflows, the recoverable amount is determined for the cash generating unit to which each asset belongs.

Reversals of Impairment

An impairment loss in respect of a held to maturity security or receivable is reversed if a subsequent increase in the recoverable amount can be related objectively to an event occurring after the impairment loss was recognised.

An impairment loss in respect of goodwill is not reversed. In respect of other assets, an impairment loss is reversed when there is an indication that the impairment loss may no longer exist and there has been a change in estimates used to determine the recoverable amount.

An impairment loss is reversed (other than goodwill) only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

g. Investments

The Group classifies its investments in debt and equity securities in the following categories: financial assets at fair value through profit or loss, loans and receivables, held to maturity investments, and available for sale financial assets. The classification depends on the purpose for which the investments were acquired.

Financial Assets at Fair Value through Profit or Loss

This category has two subcategories: financial assets held for trading, and those designated at fair value through profit or loss at inception. A financial asset is classified in this category if acquired principally for the purpose of selling in the short term or if so designated by management. Derivatives are also categorised as held for trading unless they are designated as hedges. Assets in this category are classified as current assets if they are either held for trading or are expected to be realised within 12 months of the balance sheet date.

Loans and Receivables

Loans and receivables are non derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise when the Group provides money, goods or services directly to a debtor with no intention of trading the receivable. They are included in current assets, except for maturities greater than 12 months after the balance sheet date.

Held to Maturity Investments

Held to maturity investments are non derivative financial assets with fixed or determinable payments and fixed maturities that the Group's management has the positive intent and ability to hold to maturity.

Available for Sale Financial Assets

Available for sale financial assets are non derivatives that are either designated in this category or not classified in any other category. They are included in non current assets unless management intends to dispose of the investment within 12 months of the balance sheet date.

Recognition and Measurement Criteria

Purchases and sales of investments 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 fair value through profit or loss. Investments are derecognised when the rights to receive cash flows from the investments have expired or been transferred and the Group has transferred substantially all the risks and rewards of ownership. Available for sale financial assets and financial assets at fair value through profit or loss are subsequently carried at fair value. Loans and receivables and held to maturity investments are carried at amortised cost using the effective interest method. Realised and unrealised gains and losses arising from changes in the fair value of the 'financial assets at fair value through profit or loss' category are included in the income statement in the financial year in which they arise. Unrealised gains and losses arising from changes in the fair value of non monetary securities classified as available for sale are recognised in equity. When securities classified as available for sale are sold or impaired, the accumulated fair value adjustments are included in the income statement as gains or losses from investment securities.

1. Significant Accounting Policies continued

g. Investments continued

Recognition and Measurement Criteria continued

The fair values of quoted investments are based on current bid prices. If the market for a financial asset is not active (and for unlisted securities), the Group establishes fair value by using valuation techniques. These include the use of recent arm's length transactions, reference to other instruments that are substantially the same, and discounted cash flow analysis.

At each balance sheet date the Group assesses whether there is objective evidence that a financial asset or a group of financial assets is impaired. In the case of equity securities classified as available for sale, a significant or prolonged decline in the fair value of the security below its cost is considered in determining whether the securities are impaired. If any such evidence exists for available for sale financial assets, the cumulative loss – measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in profit or loss – is removed from equity and recognised in the income statement. Impairment losses recognised in the income statement on equity instruments are not reversed through the income statement.

h. Investment Properties

Investment properties are stated at fair value based on periodic, but at least triennial valuations by external independent valuers. It is the policy of the Group to review the carrying value of each property every six months. Fair value is based on current prices in an active market for similar properties in the same location and condition. If this information is not available, the Group uses alternative calculation methods such as discounted cash flow projections or recent prices on less active markets. Any gain or loss arising from a change in fair value is recognised in the income statement. Rental income from investment properties is accounted for as described in Accounting Policy Note 1d.

When an item of owner occupied property, plant and equipment (see Accounting Policy Note 1o.) becomes an investment property following a change in its use, any difference arising at the date of transfer between the carrying amount of the item and its fair value is recognised directly in equity if it is a gain. Upon disposal of the item, the gain is transferred to retained earnings. Any loss is recognised in the income statement immediately.

When an item of self constructed property, plant and equipment becomes an investment property following a change in its use, any difference between the fair value of the property at that date and its previous carrying amount is recognised in the income statement.

Expenses capitalised to properties may include the cost of acquisition, additions, refurbishments, redevelopments, borrowing costs and fees incurred.

i. Associates

Associates (including partnerships) are entities in which the Group has significant influence, but not control, over financial and operating policies. The consolidated financial statements include the Group's share of the total recognised gains and losses of associates on an equity accounted basis, from the date that significant influence commences until the date that significant influence ceases. Investments in associates are carried at the lower of the equity accounted carrying amount and the recoverable amount. When the Group's share of losses exceeds the carrying amount of the associate, the carrying amount is reduced to nil and recognition of further losses is discontinued except to the extent that the Group has incurred obligations in respect of the associate.

Dividends from associates represent a return on the Group's investment and as such are applied as a reduction to the carrying value of the investment.

Unrealised gains arising from transactions with associates are eliminated against the investment in the associate to the extent of the Group's interest in the entity. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.

j. Joint Venture Entities

A joint venture entity is an entity which has a contractual arrangement whereby two or more parties undertake an economic activity which is subject to joint control.

Investments in joint venture entities are accounted for using the equity method. Investments in joint venture entities are carried at the lower of the equity accounted carrying amount and recoverable amount.

Lend Lease's share of joint venture entities' profit or loss after tax is recognised in the income statement from the date joint control commences until the date joint control ceases. Other movements in joint venture entities' reserves are recognised directly in consolidated reserves.

1. Significant Accounting Policies continued

j. Joint Venture Entities continued

Unrealised gains arising from transactions with joint venture entities are eliminated against the investment in the joint venture to the extent of the Group's interest in the entity. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.

k. Joint Venture Operations

A joint venture operation is a joint venture that is not in the form of an entity. The Group's interest in an unincorporated joint venture is brought to account by including its interest in the following amounts in the appropriate categories in the balance sheet and income statement:

• − Each of the individual assets employed in the joint venture;
• − Liabilities incurred by the consolidated entity in relation to the joint venture and the liabilities for which it is jointly and/or severally liable;
• − Expenses incurred in relation to the joint venture;
• − Revenue earned in relation to the joint venture.

l. Trade and Other Receivables

Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment. Cash flows relating to short term receivables are not discounted if the effect of discounting is immaterial.

A provision for impairment of trade receivables is established when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of receivables. The amount of the provision is the difference between the asset's carrying amount and fair value, which is estimated as the present value of estimated future cash flows, discounted at the effective interest rate. The amount of the provision is recognised in the income statement.

m. Pre Contract and Project Bidding Costs

The Group expenses all pre contract and project bidding costs, unless there is a high degree of certainty that a contract will be entered into (at least preferred bidder status) and that the costs will be fully recoverable from contract revenues. Costs previously expensed are not subsequently reinstated when a contract award is achieved.

n. Inventories

Property Held for Sale

Property acquired for development and sale in the ordinary course of business is carried at the lower of cost and net realisable value. The net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses. The cost of property held for sale is based on the weighted average principle and includes expenditure incurred in acquiring the inventories and bringing them to their existing location and condition, including borrowing costs incurred. Property expected to be sold within 12 months of the end of the financial year is classified as current inventory.

The net realisable value of each holding is assessed at each financial year and a provision for diminution in value is raised by the Directors where cost (including costs to complete) exceeds net realisable value. In determining net realisable value, the Directors have regard to independent valuations obtained in accordance with Accounting Policy Note 1h.

Construction and Development Work in Progress

The gross amount of construction and development work in progress consists of costs attributable to work performed together with emerging profit and after providing for any foreseeable losses.

o. Property, Plant and Equipment

Owned Assets

Items of property, plant and equipment are stated at cost or deemed cost less accumulated depreciation and impairment losses (see Accounting Policy Note 1f.). The cost of selfconstructed assets includes the cost of materials, direct labour and an appropriate proportion of production overheads.

Property that is being constructed or developed for future use as investment property is classified as property, plant and equipment and stated at cost until construction or development is complete, at which time it is reclassified as investment property.

Where an item of property, plant and equipment comprises components having different useful lives, they are accounted for as separate items of property, plant and equipment.

The residual value, useful life and depreciation method applied to an asset are reassessed at least annually.

Lend Lease Corporation Annual Consolidated Financial Report 2007 11

1. Significant Accounting Policies continued

o. Property, Plant and Equipment continued

Leased Assets

Leases in which the Group assumes substantially all the risks and rewards of ownership are classified as finance leases. Plant and equipment acquired by way of finance lease is stated at an amount equal to the lower of its fair value and the present value of the minimum lease payments at inception of the lease, less accumulated depreciation and impairment losses (see Accounting Policy Note 1f.).

Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases.

Subsequent Expenditure

Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the income statement during the financial year in which they are incurred.

Depreciation

Depreciation is charged to the income statement on a straightline basis over the estimated useful lives of items of property, plant and equipment, and major components that are accounted for separately. Amortisation is provided on leasehold improvements over the remaining term of the lease. Most plant is depreciated over a period not exceeding 10 years, furniture and fittings over 15 years, motor vehicles over eight years and computer equipment over three years. Land is not depreciated.

p. IT Software Systems

Acquired computer software licences are capitalised on the basis of the costs incurred to acquire and bring to use the specific software. These costs are amortised over their estimated useful lives (three to five years).

Costs associated with developing or maintaining computer software programmes are recognised as an expense as incurred. Costs directly associated with producing of identifiable and unique software products consolidated by the Group, and that will probably generate economic benefits exceeding costs beyond one year, are recognised as intangible assets. Direct costs include software development, employee costs and an appropriate portion of relevant overheads.

Computer software development costs recognised as assets are amortised over their estimated useful lives (not exceeding three years).

q. Intangible Assets

Goodwill

Goodwill represents the excess of the cost of an acquisition over the fair value of the Group's share of the net identifiable assets and contingent liabilities of the acquired subsidiary/associate at the date of acquisition. Goodwill on acquisition of subsidiaries is included in intangible assets as goodwill. Goodwill on acquisitions of associates is included in the carrying value of investments in associates. Goodwill is tested annually for impairment and carried at cost less accumulated impairment losses. Goodwill is not amortised. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.

For the purposes of impairment testing, goodwill is allocated to cash generating units (or groups of cash generating units) that are expected to benefit from the synergies of the combinations, irrespective of whether other assets or liabilities of the acquiree are assigned to those units or groups of units.

Management Agreements and Other Intangible Assets

Management agreements and other intangible assets acquired by the Group are stated at cost less accumulated amortisation and impairment losses (see Accounting Policy Note 1f.). Amortisation is charged to the income statement on a straightline basis over the estimated useful lives of the intangible assets, which is ten years for management rights.

r. Employee Benefits

Superannuation/Pension Obligations

Group companies operate various superannuation and pension schemes. The schemes are generally funded through payments to insurance companies or trusteeadministered funds, determined by periodic actuarial calculations. The Group has both defined benefit and defined contribution plans. A defined benefit plan is a pension plan that defines the amount of pension benefit an employee will receive on retirement, usually dependent on one or more factors such as age, years of service and compensation. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity.

1. Significant Accounting Policies continued

r. Employee Benefits continued

Superannuation/Pension Obligations continued

The asset and liability recognised in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets, together with adjustments for unrecognised actuarial gains or losses and past service costs. The defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of high quality corporate or government bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating to the terms of the related pension liability.

All actuarial gains and losses as at 1 July 2004, the date of transition to Australian International Financial Reporting Standards (AIFRS), were recognised. In respect of actuarial gains and losses that arise subsequent to 1 July 2004 in calculating the consolidated entity's obligation in respect of a plan, to the extent that any cumulative unrecognised actuarial gain or loss exceeds 10% of the greater of the present value of the defined benefit obligation and the fair value of plan assets, that portion is recognised in the income statement over the expected average remaining working lives of the employees participating in the plan. Otherwise, the actuarial gain or loss is not recognised in the income statement, it is recognised in the balance sheet against the defined benefit plan asset or liability.

Past service costs are recognised immediately in the income statement, unless the changes to the pension plan are conditional on the employees remaining in service for a specified period of time (the vesting period). In this case, past service costs are amortised on a straightline basis over the vesting period.

For defined contribution plans, the Group pays contributions to publicly or privately administered superannuation/pension insurance plans on a mandatory, contractual or voluntary basis. The Group has no further payment obligations once the contributions have been paid. The contributions are recognised as an employee benefit expense when they are due. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in the future payments is available.

Current Employee Entitlements

The provisions for employee entitlements to wages, salaries, annual leave and sick leave represent present obligations resulting from employees' services provided up to the balance date, calculated at undiscounted amounts based on remuneration wage and salary rates that the Group expects to pay at each balance date, including related oncosts. Non accumulating non monetary benefits, such as medical care, housing, cars and free or subsidised goods and services, are expensed based on the net marginal cost to the consolidated entity as the benefits are taken by the employees.

Non Current Employee Entitlements

The provision for employee entitlements to long service leave represents the present value of the estimated future cash outflows to be made resulting from employees' services provided up to balance date. Consideration is given to expected future increases in wage and salary rates including related oncosts and expected settlement dates based on turnover history.

Share Based Compensation

The Group operates cash settled and equity settled share based compensation plans that are referable to Lend Lease's share price. The fair value of the employee services received in exchange for the grant is recognised as an expense and a corresponding liability (if cash settled) or a corresponding increase in equity (if equity settled). The total amount to be expensed over the vesting period is determined by reference to the fair value of the services granted. At each balance sheet date, the entity revises its estimates of the entitlement due. It recognises the impact of revision of original estimates, if any, in the income statement, and a corresponding adjustment to a liability (in the case of cash settled) or equity (in the case of equity settled) over the remaining vesting period. Changes in entitlement for equity settled plans are not recognised if they fail to vest due to market conditions not being met.

Termination Benefits

Termination benefits are payable when employment is terminated before the normal retirement date, or whenever an employee accepts voluntary redundancy in exchange for these benefits. The Group recognises termination benefits when it is demonstrably committed to either terminating the employment of current employees according to a detailed formal plan without possibility of withdrawal or providing termination benefits as a result of an offer made to encourage voluntary redundancy. Benefits falling due more than 12 months after balance date are discounted to present value.

Profit Sharing and Bonus Plans

The Group recognises a liability and an expense for bonuses and profit sharing, based on a formula that takes into consideration the profit attributable to the Company's shareholders after certain adjustments. The Group recognises a provision when contractually obliged or when there is a past practice that has created a constructive obligation.

1. Significant Accounting Policies continued

s. Trade and Other Payables

Trade Creditors

Liabilities are recognised for amounts to be paid in the future for goods or services received, whether or not billed to the Group. Trade accounts payable are normally settled within 60 days. Trade and other payables are stated at amortised cost or cost when the impact of discounting would be immaterial.

Insurance Claims

A liability for outstanding claims is recognised in respect of Lend Lease's wholly owned special purpose captive insurance subsidiary. The liability covers claims incurred but not yet paid, claims incurred but not reported and the anticipated direct and indirect costs of settling those claims. The liability for outstanding claims is measured at the present value of the expected future payments, reflecting the fact that all the claims do not have to be paid out in the immediate future. The discount rates used are risk free rates.

Financial Guarantee Contracts

Financial guarantee contracts, including the Company guarantees of Group entities' borrowings, are recognised when issued as a financial liability. The liability is measured initially at fair value and subsequently at the higher of the best estimate to settle the obligation (see Accounting Policy Note 1w.) and the initial fair value less accumulated amortisation. Fair value is determined using a probability weighted discounted cash flow approach.

Change in Accounting Policy

The policy of recognising financial guarantee contracts as financial liabilities was adopted in the current financial year. Previously, such contracts were only recognised as a liability if settlement was considered probable.

The change in accounting policy was necessary following the change to AASB 139 'Financial Instruments: Recognition and Measurement' made by AASB 20059 'Amendments to Australian Accounting Standards'. The new policy has been applied retrospectively and comparative information has been restated.

The change in accounting policy increased the Company's related party receivables by A\$80.9 million (2006: A\$37.9 million), other financial liabilities by A\$80.9 million (2006: A\$35.9 million) and retained earnings by A\$2.0 million.

The Company's current year profit decreased by A\$2.0 million (2006: A\$2.0 million income), reflecting the amortisation of the financial guarantees and changes in the value of the receivable.

The change has no impact on the Group's net profit or earnings per share.

t. Borrowings

Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost and any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the income statement over the period of the borrowings using the effective interest method.

Preference shares, which are mandatorily redeemable on a specific date, are classified as liabilities. The dividends on preference shares are recognised in the income statement as interest expense.

The fair value of the liability portion of a convertible bond is determined using a market interest rate for an equivalent non convertible bond. The amount is recognised as a liability on an amortised cost basis until extinguished on conversion or maturity of the bond. The remainder of the proceeds is allocated to the conversion option. This is recognised in equity, net of income tax.

Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the balance date.

u. Foreign Currency Translation

Functional and Presentation Currency

Items included in the financial statements of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates ('the functional currency'). The consolidated financial report is presented in Australian dollars, which is the Company's functional and presentation currency.

Transactions and Balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains or 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 the income statement, except when deferred in equity as qualifying cash flow hedges and qualifying net investment hedges in foreign operations.

1. Significant Accounting Policies continued

u. Foreign Currency Translation continued

Transactions and Balances continued

Translation differences on non monetary items, such as equities held at fair value through profit or loss, are reported as part of the fair value gain or loss. Translation differences on non monetary items, such as equities classified as available for sale financial assets, are included in the fair value reserve in equity.

Group Companies

The results and balance sheet of all Group entities (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency (A\$) are translated into the presentation currency as follows:

• − Assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet;
• − Income and expenses for each income statement are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions);
• − All resulting exchange differences are recognised as a separate component of equity.

On consolidation, exchange differences arising from the translation of the net investment in foreign entities, and of borrowings and other currency instruments designated as hedges of such investments, are taken to the Foreign Currency Translation Reserve. When a foreign operation is sold, such exchange differences are recognised in the income statement as part of the gain or loss on sale.

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate.

The Group uses derivative financial instruments to hedge its exposure to foreign exchange and interest rate risks arising from operating, financing and investing activities. In accordance with its Treasury policy, the Group does not hold or issue derivative financial instruments for trading purposes.

Derivative financial instruments are recognised initially at fair value on the date a derivative contract is entered into and subsequently remeasured at their fair value. Recognition of any resultant gain or loss depends on the nature of the item being hedged.

The fair value of interest rate swaps is the estimated amount the Group would receive or pay to terminate the swap at the balance sheet date, taking into account current interest rates and the current creditworthiness of the swap counterparties. The fair value of forward exchange contracts is their value at the current quoted forward price at the balance sheet date.

v. Derivative Financial Instruments and Hedging Activities

Hedging Derivatives

Fair Value Hedge

Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised in the income statement, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.

Cash Flow Hedge

The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges are recognised in equity. The gain or loss relating to the ineffective portion is recognised immediately in the income statement.

Amounts accumulated in equity are recycled to the income statement in the years when the hedged item will affect profit or loss (for instance, when the forecast sale that is hedged takes place). However, when the forecast transaction that is hedged results in the recognition of a non financial asset (for example, inventory) or a liability, the gains or losses previously deferred in equity are transferred from equity and included in the initial measurement of the cost of the asset or liability.

When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in equity at that time remains in equity and is recognised when the forecast transaction is ultimately recognised in the income statement. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in equity is immediately transferred to the income statement.

Net Investment Hedge

Hedges of net investments in foreign operations are accounted for similarly to cash flow hedges. Any gain or loss on the hedging instrument relating to the effective portion of the hedge is recognised in equity; the gain or loss relating to the ineffective portion is recognised immediately in the income statement.

Gains or losses accumulated in equity are included in the income statement on disposal of the foreign operation.

1. Significant Accounting Policies continued

v. Derivative Financial Instruments and Hedging Activities continued

Hedging Derivatives continued

Held for Trading Derivatives

Certain derivative instruments do not qualify for hedge accounting or hedge accounting treatment is not sought. These instruments are classed as held for trading and changes in their fair value are recognised immediately in the income statement.

w. Provisions

A provision is recognised on the balance sheet when the Group has a legal or constructive obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation. If the effect is material, provisions are determined by discounting the expected future cash flows at a pre tax rate that reflects current market assessments of the time value of money and, when appropriate, the risks specific to the liability.

A provision for restructuring is recognised when the Group has approved a detailed and formal restructuring plan, and the restructuring has either commenced or has been announced publicly. Future operating costs are not provided for.

A provision for onerous contracts is recognised when the expected benefits to be derived by the Group from a contract are lower than the unavoidable cost of meeting its obligations under the contract.

x. Borrowing Costs

Borrowing costs include interest, amortisation of discounts or premiums relating to borrowings, amortisation of ancillary costs incurred in connection with arrangement of borrowings and foreign exchange differences net of hedged amounts on borrowings.

Ancillary costs incurred in connection with the arrangement of borrowings are capitalised and amortised over the life of the borrowings.

Borrowing costs are expensed as incurred unless they relate to qualifying assets. Qualifying assets are assets that take more than six months to prepare for their intended use or sale. In these circumstances, borrowing costs are capitalised to the costs of the assets. When funds are borrowed specifically for the acquisition or construction of a qualifying asset, the amount of borrowing costs capitalised are those incurred in relation to that borrowing. To the extent that funds are borrowed generally, the amount of borrowing costs capitalised is calculated by applying a capitalisation rate to the expenditures on that asset.

y. Earnings Per Share

Basic earnings per share (EPS) is determined by dividing profit after income tax attributable to members of the Company, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares (adjusted for treasury shares) outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the financial year.

Diluted EPS is determined by adjusting the profit after tax attributable to members of the Company and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares.

z. Cash and Cash Equivalents

Cash and cash equivalents includes cash on hand, deposits held at call with banks, bank overdrafts and other short term highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

Bank overdrafts (if applicable) are shown as a current liability on the balance sheet and are shown as a reduction to the cash balance in the statement of cash flows.

aa. Share Capital

Ordinary shares are classified as equity. Preference share capital is classified as equity if it is non redeemable and any dividends are discretionary, or is redeemable but only at the Company's option. Dividends on preference share capital classified as equity are recognised as distributions within equity.

Preference share capital is classified as a liability if it is redeemable on a specific date or at the option of the shareholders or if dividend payments are not discretionary. Dividends thereon are recognised in the income statement as interest expense.

When share capital recognised as equity is repurchased, the amount of the consideration paid, including directly attributable costs, is recognised as a change in equity.

1. Significant Accounting Policies continued

aa. Share Capital continued

Dividends on redeemable preference shares are recognised as a liability on an accrual basis. Other dividends are recognised as a liability in the financial year in which they are declared.

ab.Goods and Services Tax

Revenue, expenses and assets are recognised net of the amount of goods and services tax (GST), except where the amount of GST incurred is not recoverable from the taxation authority. In these circumstances, the GST is recognised as part of the cost of acquisition of the asset or as part of the expense.

Receivables and payables are stated with the amount of GST included. The net amount of GST recoverable from, or payable to, the Australian Taxation Office (ATO) is included as a current asset or liability in the balance sheet. Cash flows are included in the statement of cash flows on a gross basis. The GST components of cash flows arising from investing and financing activities which are recoverable from, or payable to, the ATO are classified as operating cash flows.

ac. Service Concession Arrangements (Private Financing Initiatives and Public Private Partnerships)

Contract obligations and related rights are recognised and measured in accordance with AASB 111 'Construction Contracts' and AASB 118 'Revenue'. Obligations are recognised when consideration is received in advance of performance. Consideration receivable in respect of construction or other services is accounted for in accordance with AASB 139 'Financial Instruments: Recognition and Measurement' as a 'loan or receivable' and is measured at amortised cost. Borrowing costs are capitalised in accordance with Accounting Policy Note 1x. Pre contract and project bidding costs are capitalised in accordance with Accounting Policy Note 1m.

ad.Accounting Estimates and Judgements

The estimates and judgements that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

Key Sources of Estimation Uncertainty

Note 14a. 'Goodwill' contains information about the assumptions and their risk factors relating to goodwill impairment. Note 28a. 'Foreign Currency' provides detailed analysis of the foreign exchange exposure of the consolidated entity and risks in relation to foreign exchange movements.

Impairment of Goodwill

The Group assesses whether goodwill is impaired at least annually in accordance with Accounting Policy Note 1f. These calculations involve an estimation of the recoverable amount of the cash generating units to which the goodwill is allocated.

Valuation of Assets and Recoverable Amounts

The Group assesses the fair value of certain assets by use of estimation techniques where there is no available market price. The Group assesses the recoverability of the carrying value of certain assets using estimations of their recoverable amount.

Defined Benefit Superannuation Fund Obligations

Various actuarial assumptions are utilised in determining the Group's defined benefit superannuation/pension fund obligations. These assumptions are discussed in Notes 15g. and 22g. 'Principal Actuarial Assumptions'.

Critical Accounting Judgements in Applying the Group's Accounting Policies

In the process of applying the Group's accounting policies, the Group makes various judgements, apart from those involving estimations, that can significantly affect the amounts recognised in the consolidated financial statements. These include:

• − When substantially all the significant risks and rewards of ownership of development properties are transferred to the purchaser;
• − The percentage completion on construction work performed;
• − Whether the substance of the relationship between the Group and a special purpose entity indicates that the special purpose entity is consolidated by the Group.

		Consolidated	Company
	June 2007	June 2006	June 2007	June 2006
	A\$m	A\$m	A\$m	A\$m
2. Revenue
Total comprising:
a. Revenue from the Sale of Development Properties	1,036.3	1,773.4	–	–
b. Revenue from the Provision of Services
Project Management, Construction and PFIs	12,159.2	9,571.3
Retail and Communities	736.8	519.8
Investment Management	52.2	38.8
Total revenue from the provision of services	12,948.2	10,129.9	–	–
c. Finance Revenue
Interest Income
Consolidated entities			12.9	18.7
Related parties	14.5	8.7
Other corporations1	83.8	21.6	1.8	1.1
	98.3	30.3	14.7	19.8
Financial Asset Discounting Non current receivable	3.5	3.2
Total finance revenue	101.8	33.5	14.7	19.8
d. Other Revenue
Dividend Income
Consolidated entities			240.2	168.2
Related parties		2.7
Other corporations	0.6	0.8
	0.6	3.5	240.2	168.2
Other
Rental income and sublease rents	85.5	69.5
Hotel revenue	49.1	72.1
Distributions received	28.4	22.2	18.6	15.7
Corporate management fee			47.7	41.9
Guarantee fees			12.6	12.0
Other	32.0	22.7		0.1
	195.0	186.5	78.9	69.7
Total other revenue	195.6	190.0	319.1	237.9
Total revenue	14,281.9	12,126.8	333.8	257.7

1 Includes interest from the Australian Taxation Office (ATO) following a favourable judgement in the Federal Court on a tax dispute with the ATO (refer to Note 16. 'Other Assets').

		Consolidated		Company
	June 2007 A\$m	June 2006 A\$m	June 2007 A\$m	June 2006 A\$m
3. Other Income
Net Gain on Disposal/Redemption of Available for Sale Financial Assets
Lend Lease Global Properties, SICAF Other	133.4 1.7	12.6 28.1
	135.1	40.7	–	–
Net Gain on Disposal of Consolidated Entities	22.6
Net Gain on Disposal of Investments Using the Equity Method	12.6	16.3
Net Gain on Disposal of Investment Properties		14.5
Fair Value Gain on Remeasurement of Investment Properties	2.8	14.8
Amortisation of Financial Guarantee Contract Liabilities			3.2	0.6
Other	0.2	6.4
Total other income	173.3	92.7	3.2	0.6
4. Other Operating (Income) and Expenses (Profit) before income tax has been determined after:
Depreciation and amortisation Depreciation of property, plant and equipment Less: Capitalised depreciation Amortisation of management agreements Amortisation of other intangibles	24.1 (2.1) 2.9 1.0	23.1 (1.9) 2.9 0.8	0.3	0.3
Total depreciation and amortisation	25.9	24.9	0.3	0.3
Finance costs Non interest finance costs Less: Capitalised non interest finance costs1	4.1	10.2 (1.3)
	4.1	8.9	–	–
Interest finance costs Consolidated entities Related parties Other corporations Less: Capitalised interest finance costs1	1.5 77.1 (1.1)	1.7 59.5 (8.3)	10.5	16.2
	77.5	52.9	10.5	16.2
Interest discounting Other financial liabilities	0.1
Total finance costs	81.7	61.8	10.5	16.2
Net loss on sale of property, plant and equipment	1.2	0.5	–	–

1 The capitalisation rate used to determine the amount of borrowing costs capitalised is 8.0% (June 2006: 6.4%).

4. Other Operating (Income) and Expenses continued

			Consolidated		Company
	Note	June 2007 A\$m	June 2006 A\$m	June 2007 A\$m	June 2006 A\$m
Operating lease expense
Operating lease rental expense		55.0	53.9
Operating lease equipment expense		5.8	6.2
Total operating lease expense		60.8	60.1	–	–
Employee benefit expenses1		804.6	775.5	38.1	26.2
Superannuation accumulation plan expense		17.0	12.7	0.6	0.2
Net defined benefit plan expense impacting all business segments is as follows:
Current service cost		45.9	42.0	6.5	7.3
Interest on obligation		44.5	36.8	5.3	4.5
Expected return on plan assets		(49.3)	(40.6)	(7.9)	(7.3)
Past service cost		0.4	0.2	0.4	0.2
Loss on curtailments		0.5	0.7
Actuarial gain recognised		(0.2)		(0.2)
Total net defined benefit plan expense	15d, 22d	41.8	39.1	4.1	4.7
Net foreign exchange gain		(12.0)	(12.8)	(0.1)	(0.2)
Bad and doubtful debts impairment loss net of
provisions (written back)/raised		(5.2)	2.1	(80.0)	–
Net impairment/provisions raised/(written back) relating to:
Property inventories		1.1	18.3
Investments accounted for using the equity method2		(5.8)	6.6
Impairment of investments held at cost				(56.6)	(16.0)
Employee benefits		31.2	35.7	1.9	1.8
Construction risks		10.0	7.6
Restructuring		(3.6)	(4.8)
Other provisions		15.5	45.4	10.3	23.5

1 Excludes provisions for employee benefits, superannuation accumulation and defined benefit plan expenses, which are disclosed as separate items.

2 The impairment reversal of A\$5.8 million includes A\$5.7 million relating to the Jacksons Landing project in Pyrmont, Australia.

	Consolidated		Company
	June 2007 June 2006 A\$000s A\$000s		June 2007 A\$000s	June 2006 A\$000s
Auditors' Remuneration
Amounts received or due and receivable by the auditors of Lend Lease Corporation for:
Audit and Review of Financial Reports	6,798	5,872	1,390	936
Other Services
KPMG
International assignees tax services	202	1,508		100
Tax services	456	1,052	69	163
Accounting advice	82	417	80	316
Other services	260	272
	1,000	3,249	149	579

	Consolidated	Company
	June 2007	June 2006	June 2007	June 2006
	A\$m	A\$m	A\$m	A\$m
5. Taxation
a. Income Tax Expense
Recognised in the Income Statement
Current Tax Expense
Current year	100.8	91.2	(3.8)	(3.3)
Adjustments for prior years	(15.6)	(17.9)	(4.1)	(15.3)
Benefits of tax losses recognised	(3.2)	(1.2)
	82.0	72.1	(7.9)	(18.6)
Deferred Tax Expense
Origination and reversal of temporary differences	43.8	78.0	5.2	0.2
Reduction in tax rate	2.0
Total income tax expense/(revenue)	127.8	150.1	(2.7)	(18.4)
Reconciliation of Tax Expense/(Revenue)
Profit before tax	628.0	572.7	388.3	183.4
Income tax using the domestic corporation tax rate (30.0%)	188.4	171.8	116.5	55.0
Non assessable dividends	(0.7)	(0.9)	(77.6)	(55.1)
Non assessable income	(44.6)	(7.2)
Profits accounted for using the equity method	(6.4)	(3.2)
Amortisation expense	0.9	0.8
Non allowable expenses	14.0	7.9	1.2	0.8
Expenses allowable for tax but not for accounting	(2.3)	(4.1)
Non deductible provisions	0.2	1.4	(41.0)	(4.8)
Recovery of tax losses	(31.3)	(20.8)
(Recovery)/write off of tax temporary differences	(0.1)	3.2
Variation in tax rates	20.3	20.9
Income tax expense relating to wholly owned Australian subsidiaries			73.7	53.0
Recovery of income tax expense from wholly owned Australian subsidiaries			(73.7)	(53.0)
Other	5.0	(1.8)	2.3	1.0
Over provided in prior years	(15.6) 127.8	(17.9) 150.1	(4.1) (2.7)	(15.3) (18.4)
Deferred Tax Recognised Directly in Equity
Relating to:
Unrealised gain on available for sale financial assets	18.3	21.0	0.1	0.4
Net gain on hedge of investments accounted for using the equity method	2.4
	20.7	21.0	0.1	0.4
b. Current Tax Assets/(Liabilities)	7.1	3.1	(27.6)	3.5

Current tax assets/(liabilities) represent the amount of income taxes refundable/(payable) in respect of current and prior financial years where payments exceed income taxes payable/(income taxes payable exceeds payments). At 30 June 2007, payments exceeded income taxes payable for the Group.

5. Taxation continued

c. Deferred Tax Assets and Liabilities

	Co nso	ted			Co	any
Jun	007	Jun	006	Jun	007	Jun	e 2 006
Ass ets	Lia bilit ies	Ass ets	Lia bilit ies	Ass ets	Lia bilit ies	Ass ets	Lia bilit ies
m	m	m	m	m	m	m	A\$ m
8. 9	( 1 3. 2 )	1 1. 0	( 1 0. 8 )		( 0. 2 )		( 0. 1 )
6 2. 5	( 1 8 5. 0 )	1 6. 5	( 1 2 7. 2 )
2. 3	( 4 9. 8 )	0. 9	( 4 5. 9 )		( 0. 5 )		( 0. 4 )
0. 1	( ) 2 7. 2	0. 1	( ) 1 9. 8
6. 4	( 1 9 1. 4 )	7. 5	( 1 7 7. 9 )
	( ) 2. 9		( ) 2 7. 4
1 7. 4	( ) 0. 6	1 3. 7	( ) 0. 3
	( ) 6. 9		( ) 6. 5		( ) 6. 9		( ) 6. 5
7 4. 9	( ) 0. 1	6 9. 7		1 8. 2		1 9. 2
6 3. 1		7 0. 4		1 3. 8		1 6. 5
1 7. 2	( ) 1 2. 4	2 8. 9
4 3. 9		5 2. 4
7 2. 1		5 2. 6
4 7. 1	( ) 1 5. 0	6 5. 6	( ) 0. 1		( ) 1. 1
						1. 1
4 1 5. 9	( ) 5 0 4. 5	3 8 9. 3	( ) 4 1 5. 9	3 2. 0	( ) 8. 7	3 6. 8	( ) 7. 0
	A\$	e 2 A\$	lida A\$	e 2 A\$	A\$	e 2 A\$	mp A\$

5. Taxation continued

c. Deferred Tax Assets and Liabilities continued

		Rec ised ogn	Rec ised ogn				Rec ised ogn	Rec ised ogn
Co l i da d te ns o	1 J uly 200 6 A\$ m	in I nco me A\$ m	in E ity qu A\$ m	FX/ Oth er A\$ m	30 Jun e 2 007 A\$ m	1 J uly 200 5 A\$ m	in I nco me A\$ m	in E ity qu A\$ m	1 FX/ Oth er A\$ m	30 Jun e 2 006 A\$ m
Re ise d De fe d Ta As d L ia b i l i ies ts t co g n rre se an x inu d t co n e Mo in d i f fer du ing he f ina ia l y t tem t ve me n p ora ry en ce s r nc ea r:
Lo d r iva b les an s a n ec e	0. 2	( ) 4. 5			( ) 4. 3	2 0. 0	( ) 1 9. 9		0. 1	0. 2
Inv ies tor en	( ) 1 1 0. 7	( ) 1 6. 9		5. 1	( ) 1 2 2. 5	( ) 4 8. 5	( ) 3 8. 3		( ) 2 3. 9	( ) 1 1 0. 7
O he f ina ia l a t ts r nc ss e	( ) 4 5. 0	1 5. 2	( ) 1 8. 3	0. 6	( ) 4 7. 5	( ) 1 0. 0	( ) 1 3. 8	( ) 2 1. 0	( ) 0. 2	( ) 4 5. 0
O he t ts r a ss e	( 9. ) 1 7	( 8. 2 )		0. 8	( 2 ) 7. 1	( 2 8. ) 7	8. 7		0. 3	( 9. ) 1 7
Inv d for ing he i ho d tm ts te t ty t es en ac co un us eq u me	( 0. ) 1 7 4	( 2 ) 4. 5	( 2. ) 4	2. 3 1	( 8 0 ) 1 5.	( 2 9. 3 ) 1	( 3 9. 6 )		( ) 1. 5	( 0. ) 1 7 4
Inv ies tm t p t es en rop er	( 2 ) 7. 4	2 4. 5			( 2. 9 )	( 2 9 ) 4.	( 2. ) 5			( 2 ) 7. 4
Pro lan d e ip ty, t a t p er p n q u me n	1 3. 4	4. 0		( 0. 6 )	1 6. 8	1 1. 3	1. 8		0. 3	1 3. 4
De f ine d be f i lan t p t ne as se	( 6. ) 5	( 0. ) 4			( 6. 9 )	( 6. 0 )	( 0. ) 5			( 6. ) 5
Tra de d o he b les t an r p ay a	6 9. 7	( 0. 1 )		2 5.	4. 8 7	4 3 5.	2 4. 4			6 9. 7
Pro is ion v s	0. 4 7	2. 2		( 9. ) 5	6 3. 1	6 2. 7	8 7.		( 0. 1 )	0. 4 7
O he f ina ia l a d n f ina ia l l ia b i l i ies t t r nc n on nc	2 8. 9	( 2 3. 8 )		( 0. 3 )	4. 8	3 0. 7	( 1. 8 )			2 8. 9
De f ine d be f i lan l ia b i l i t p ty ne	5 2. 4	( 8. 0 )		( 0. 5 )	4 3. 9	5 8. 3	( 6. 6 )		0. 7	5 2. 4
2 Un d r los ise d tax us e ev en ue se s r ec og n	2. 6 5	2 4. 2		( 4. ) 7	2. 1 7	3 4. 9	1 0 7.		0. 7	2. 6 5
I i h a ba bu ing lue tem t tax t n s w se o c arr y va	6 5. 5	( 2 9. 5 )		( 3. 9 )	3 2. 1	7 9. 2	( 1 4. 7 )		1. 0	6 5. 5
To l de fer d / ( l ia b i l i ies ) ta tax ts t re as se	( 2 6. 6 )	( 4 5. 8 )	( 2 0. 7 )	4. 5	( 8 8. 6 )	9 5. 0	( 7 8. 0 )	( 2 1. 0 )	( 2 2. 6 )	( 2 6. 6 )

1 Includes the deferred tax balances on acquisition of The Crosby Group, inclusive of the tax effect on fair value adjustments.

2 Primarily relates to the recognition of unused revenue tax losses in the USA.

5. Taxation continued

c. Deferred Tax Assets and Liabilities continued

		Rec ised ogn	Rec ised ogn				Rec ised ogn	Rec ised ogn
Co m an	1 J uly 200 6 A\$	in I nco me A\$	in E ity qu A\$	FX/ Oth er A\$	Jun 30 e 2 007 A\$	1 J uly 200 5 A\$	in I nco me A\$	in E ity qu A\$	FX/ Oth er A\$	Jun 30 e 2 006 A\$
p y	m	m	m	m	m	m	m	m	m	m
Re ise d De fe d Ta As d L ia b i l i ies ts t co g n rre x se an
inu d t co n e
Mo t in tem d i f fer du ing t he f ina ia l y ve me n p ora ry en ce s r nc ea r:
Lo d r iva b les an s a n ec e	( 0. 1 )			( 0. 1 )	( 0. 2 )	( 0. 8 )	0. 7			( 0. 1 )
O he f ina ia l a t ts r nc ss e	( 0. 4 )		( 0. 1 )		( 0. 5 )	0. 3	( 0. 3 )	( 0. 4 )		( 0. 4 )
De f ine d be f i lan t p t ne as se	( 6. 5 )	( 0. 4 )			( 6. 9 )	( 6. 0 )	( 0. 5 )			( 6. 5 )
Tra de d o he b les t an r p ay a	1 9. 2	( 1. 0 )			1 8. 2	2 4. 5	( 5. 4 )		0. 1	1 9. 2
Pro is ion s v	1 6. 5	( ) 2. 7			1 3. 8	1 1. 0	5. 3		0. 2	1 6. 5
I i h a ba bu ing lue tem t tax t n s w se o c arr va y		( 1. 1 )			( 1. 1 )
Co De fer d d l ia b i l i ies fer d he tax ts t tra to t re as se an ns re mp an y
fro ho l ly d Au l ian bs i d iar ies in he Au l ian Ta tra t tra m ow ne s su s w x
Co Gr l i da te d du to tax l i da t ion ns o ou p e co ns o	1. 1			( ) 1. 1		( ) 2 4. 9			2 6. 0	1. 1
fer / ( ) To ta l de d tax ts l ia b i l i t ies re as se	2 9. 8	( ) 5. 2	( ) 0. 1	( ) 1. 2	2 3. 3	4. 1	( ) 0. 2	( ) 0. 4	2 6. 3	2 9. 8

		Consolidated	Company
	June 2007 A\$m	June 2006 A\$m	June 2007 A\$m	June 2006 A\$m
5. Taxation continued
c. Deferred Tax Assets and Liabilities continued
Unrecognised Deferred Tax Assets Deferred tax assets have not been recognised in respect of the following items:
Capital losses	99.2	83.9	15.4	15.4
Revenue losses	122.3	187.2
Deductible temporary differences	35.8	16.6
Total unrecognised deferred tax assets	257.3	287.7	15.4	15.4

Temporary differences associated with investments in subsidiaries have not been recognised. The unrecognised deferred tax asset of A\$257.3 million includes A\$118.6 million that will expire in 2024.

		Franked
		Amount Per		Company
	Cents Per	Share	June 2007	June 2006
	Share	%	A\$m	A\$m
6. Dividends and Earnings Per Share
a. Dividends1
Interim Dividend
December 2006 – paid 27 March 2007	35	50	140.0
December 2005 – paid 14 March 2006	30	100		119.8
Final Dividend
June 2007 – declared subsequent to reporting date
(payable 12 September 2007)	42	50	168.5
June 2006 – paid 13 September 2006	31	100		123.9
			308.5	243.7

1 Dividends includes dividends paid on treasury shares. Refer to Note 25. 'Retained Earnings' for further details regarding the impact of treasury shares on dividend payments and retained earnings.

Dividend Franking

The final dividend of 42 cents per share declared since 30 June 2007 will be 50% franked. The interim dividend paid on 27 March 2007 (35 cents per share) was 50% franked.

The dividend franking account balance at 30 June 2007 is A\$56.2 million based on a 30% tax rate (30 June 2006: A\$94.6 million). This is calculated after adjusting for franking credits which will arise from the payment of income tax provided in the accounts, tax losses utilised in the current financial year and expected franking debits arising from refunds of tax in dispute. It excludes the A\$36.1 million (June 2006: A\$53.1 million) franking debit impact of the proposed dividend of A\$168.5 million (June 2006: A\$123.9 million) and the franking credits which arose from the payment of tax in dispute in relation to the sale of Westpac shares in 1996 (refer to Note 16. 'Other Assets').

6. Dividends and Earnings Per Share continued

	Consolidated
			June 2007	June 2006
		Shares		Shares
		Excluding		Excluding
		Treasury	Shares on	Treasury	Shares on
		Shares	Issue	Shares	Issue
b. Earnings Per Share (EPS)
Weighted average number of ordinary shares	m	369.9	400.4	368.5	399.1
Earnings per share	cents	134.5	124.3	112.7	104.0
c. Diluted Earnings Per Share (DEPS)
Weighted average number of ordinary shares	m	369.9	400.4	368.5	399.1
Adjustment for dilutive effect of potential share issue1	m	0.2	0.2
Weighted average number of ordinary shares for DEPS	m	370.1	400.6	368.5	399.1
Diluted earnings per share	cents	134.4	124.2	112.7	104.0

1 Relates to the Lend Lease Corporation shares issued during the period as part consideration for the minority interest shareholdings in Crosby Lend Lease Group Limited.

		Consolidated	Company
	June 2007 A\$m	June 2006 A\$m	June 2007 A\$m	June 2006 A\$m
7. Cash and Cash Equivalents
Cash	271.8	278.5	2.0	1.5
Short term investments	278.3	281.0
Total cash and cash equivalents	550.1	559.5	2.0	1.5

Short term investments earn variable rates of interest which averaged 5.3% per annum during the financial year ended 30 June 2007 (30 June 2006: 4.2%).

Short term investments with a maturity greater than three months (A\$361.5 million) (June 2006: A\$11.4 million) are classified as 'Available for Sale Financial Assets' and 'Held to Maturity Financial Assets' (refer to Note 12. 'Other Financial Assets'). These short term investments have an average maturity of four months.

		Consolidated		Company
	June 2007	June 2006	June 2007	June 2006
	A\$m	A\$m	A\$m	A\$m
8. Loans and Receivables
Current
Trade debtors	1,900.9	1,428.2
Less: Impairment	(8.5)	(16.8)
	1,892.4	1,411.4	–	–
Related party loans and receivables
Consolidated entities			2,481.7	2,367.8
Less: Impairment				(80.0)
Managed property funds	20.0	14.5
Associate entities	71.9	72.5
Other receivables	229.7	169.1	2.8	0.3
Less: Impairment	(4.3)	(4.9)
	2,209.7	1,662.6	2,484.5	2,288.1
Non Current
Loans to employees	0.8	0.8
Related party loans and receivables
Consolidated entities			108.2	47.9
Associate entities	236.9	149.8
Less: Impairment	(17.6)	(17.5)
Other receivables	73.5	60.3	4.3	4.1
	293.6	193.4	112.5	52.0
Total loans and receivables	2,503.3	1,856.0	2,597.0	2,340.1

Lend Lease Corporation Annual Consolidated Financial Report 2007 26

		Consolidated		Company
Note	June 2007 A\$m	June 2006 A\$m	June 2007 A\$m	June 2006 A\$m
9. Inventories
Current
Construction work in progress	242.4	212.9	–	–
Property held for sale at cost	669.9	729.5
Less: Provision for diminution in value	(1.1)	(1.6)
	668.8	727.9	–	–
Total current	911.2	940.8	–	–
Non Current
Property held for sale at cost	1,346.7	1,232.2
Less: Provision for diminution in value	(20.6)	(19.1)
Total non current	1,326.1	1,213.1	–	–
Total inventories	2,237.3	2,153.9	–	–
Property Held for Sale
Total property held for sale is comprised of:
Bluewater, Kent	596.1	559.2
Urban Communities, Australia	553.3	573.9
Urban Communities (Crosby), UK	481.2	437.3
Victoria Harbour, Melbourne Hyatt Coolum Resort, Sunshine Coast	80.2 56.2	133.2 47.9
First Base Adelaide Wharf, UK	53.2	14.4
St Patricks, Sydney	50.6	46.3
Other	145.8	149.5
	2,016.6	1,961.7	–	–
Less: Provision for diminution in value	(21.7)	(20.7)
Total property held for sale	1,994.9	1,941.0	–	–
Current
Construction work in progress is comprised of:
Contract costs incurred to date	46,074.8	41,200.3
Profit recognised to date	1,949.7	2,093.9
Less: Progress billings received and receivable on completed contracts	48,024.5 (48,959.5)	43,294.2 (43,979.4)	–	–
Net construction work in progress	(935.0)	(685.2)	–	–
Amounts due from customers – inventories1
Amounts due to customers – trade and other payables2 17	242.4 (1,177.4)	212.9 (898.1)
	(935.0)	(685.2)	–	–
Advances on construction projects in progress included in trade
and other payables	1,035.4	759.9	–	–
Retentions on construction projects included in progress billings	531.2	374.7	–	–

1 Represents the net of construction costs incurred less recognised losses and progress billings on projects which exceeds progress billings to clients (CIE).

2 Represents the net of progress billings to clients and recognised losses less construction costs incurred on projects which exceeds project costs incurred (BIE).

		Consolidated			Company
	Note	June 2007 A\$m	June 2006 A\$m	June 2007 A\$m	June 2006 A\$m
10. Investments Accounted for Using the Equity Method
Non Current
Associates
Investment in associates		930.0	792.8
Less: Impairment		(5.6)	(5.8)
	10a	924.4	787.0	–	–
Joint Venture Entities
Investment in joint venture entities		229.3	233.4
Less: Impairment		(14.1)	(20.6)
	10b	215.2	212.8	–	–
Total investments accounted for using the equity method		1,139.6	999.8	–	–

	Country of Incorporation	Balance Date	June 2007 %	Interest June 2006 %	June 2007 A\$m	Consolidated Share of Profit/(Loss) After Tax June 2006 A\$m	June 2007 A\$m	Consolidated Net Book Value June 2006 A\$m
a. Associates
Project Management, Construction and PFIs1
Lancashire Waste Share Capital Catalyst Investment Holdings	UK	31 Mar	50.0				9.0
Limited	UK	31 Dec	50.0	50.0	11.2	1.2	6.7	6.8
Catalyst Healthcare (Manchester)	UK	30 Sep	50.0	50.0	2.5		1.5
Networks Alliance Partnership	Australia	30 Jun	42.0	42.0	2.8	0.7	0.3	0.1
Other					1.2	8.3	4.1	0.5
					17.7	10.2	21.6	7.4
Retail and Communities
Other					0.1	1.7	4.8	5.8
Investment Management King of Prussia	USA	31 Dec	50.0	50.0	92.4	100.0	483.8	445.3
Lend Lease Overgate Partnership	UK	31 Dec	30.7	30.7	10.0	22.4	143.0	136.7
Performance Retail Limited
Partnership	UK	31 Dec	33.3	33.3	6.0	13.6	104.8	103.3
Asia Pacific Investment Company 2	Singapore	30 Apr	21.1	21.1	18.2		87.3	77.9
Lend Lease Asian Retail
Investment Fund	Mauritius	30 Jun	32.5				53.4
Lend Lease Communities Fund 1	Australia	30 Jun	20.8		(0.5)		17.3
Lend Lease International Distressed
Debt Fund	Bermuda	31 Dec	28.0	28.0	(2.8)	1.4	7.5	13.6
Other					123.3	1.2 138.6	6.5 903.6	2.8 779.6
Less: Impairment							(5.6)	(5.8)
					141.1	150.5	924.4	787.0

1 Lend Lease provides service concession arrangements, originating through PFIs, in the areas of healthcare, education and government facilities. These arrangements provide facilities management and maintenance services for a fixed payment per annum (subject to inflationary increases per year) with terms generally 25 to 30 years. They also incorporate contractual obligations to make available the individual assets for their prescribed use and, where necessary, overhaul or replace major items of plant and equipment related to the assets with payment obtained through periodic drawdowns from the relevant government authorities.

		Consolidated
	June 2007 A\$m	June 2006 A\$m
10. Investments Accounted for Using the Equity Method continued
a. Associates continued
Lend Lease's Share of the Results of Associates
Revenue Fair value revaluations1	167.1	176.5
Expenses	80.4 (99.5)	99.4 (131.9)
Profit before tax	148.0	144.0
Income tax expense2	(6.5)	(0.6)
Profit after tax	141.5	143.4
Adjustment arising from accounting using the equity method	(0.4)	7.1
Share of associates' profit – accounted for using the equity method	141.1	150.5
Movements in Carrying Amounts of Associates
Carrying amount at beginning of financial year	787.0	517.4
Investment in associates acquired during financial year	96.6	118.9
Share of associates' profit Contributions to associates	141.1 3.9	150.5
Capital redemptions by associates	(4.2)	(16.1)
Distributions received from associates	(37.3)	(29.6)
Disposal of associates	(0.7)	(30.4)
Other adjustments (including effect of foreign exchange rate movements)3	(62.0)	76.3
Carrying amount at end of financial year	924.4	787.0
Lend Lease's Share of Balance Sheet of Associates
Current assets	212.2	339.7
Non current assets	1,986.7	1,179.9
Total assets	2,198.9	1,519.6
Current liabilities	72.3	64.4
Non current liabilities	1,650.5	1,175.8
Total liabilities	1,722.8	1,240.2
Net assets	476.1	279.4
Other adjustments Goodwill	6.0	7.9
Impairment	(5.6)	(5.8)
Adjustment due to differences in accounting policies4	453.4	452.3
Other	(5.5)	53.2
Net assets – adjusted using the equity method	924.4	787.0
Commitments
Share of associates' capital expenditure and lease commitments contracted but not
provided for and payable
Due within one year	39.6	300.8
Due between one and five years	106.3	422.1
	145.9	722.9

1 Reflects fair value revaluations for King of Prussia of A\$62.3 million (June 2006: A\$74.1 million), Lend Lease Overgate Partnership of A\$3.8 million (June 2006: A\$16.1 million), Performance Retail Limited Partnership of A\$0.7 million (June 2006: A\$9.2 million) and Asia Pacific Investment Company 2 A\$13.6 million (June 2006: A\$nil).

2 Lend Lease's share of tax relating to the majority of associates is reflected in the Lend Lease Group's current tax expense (refer to Note 5a. 'Income Tax Expense').

3 Primarily relates to foreign exchange movements (A\$46.6 million). June 2006 primarily related to the reclassification of Asia Pacific Investment Company 2 to Other Financial Assets.

4 Primarily includes adjustments to King of Prussia to align the investment accounting policies with Australian Accounting Standards.

	Country of Incorporation	Balance Date	Interest June 2007 %	June 2006 %	June 2007 A\$m	Consolidated Share of Profit/(Loss) After Tax June 2006 A\$m	June 2007 A\$m	Consolidated Net Book Value June 2006 A\$m
10. Investments Accounted for Using the Equity Method continued
b. Joint Venture Entities
Project Management, Construction and PFIs1 Majadahonda Hospital Other	Spain	31 Dec	25.0	25.0	2.3 4.5	0.7	9.5 9.3	9.0 2.9
					6.8	0.7	18.8	11.9
Retail and Communities Pyrmont Trust (Jacksons Landing)2 Mawson Lakes Economic Development Project Forde Development (ACT) Caroline Springs Joint Venture Mirvac Lend Lease Village	Australia Australia Australia Australia	30 Jun 30 Jun 30 Jun 30 Jun	50.0 50.0 50.0 50.0	50.0 50.0 50.0 50.0	(2.2) 10.2 0.7 13.0	4.3 7.7 0.3 2.5	21.8 18.7 0.7 23.6	22.9 21.8 15.1 23.9
Consortium (Newington Precincts 1 and 3) Crosby Ask Limited Ician Developments Limited Piers Project, San Francisco3 Other	Australia UK UK USA	30 Jun 30 Jun 30 Jun 30 Jun	50.0 50.0 50.0 55.0	50.0 50.0 50.0 55.0	3.3 4.7 3.2 5.5	3.5 2.3 7.2 5.2	7.8 4.6 2.8 0.9 14.2	14.5 9.1 28.0 16.8
					38.4	33.0	95.1	152.1
Investment Management Warrington Retail Limited Partnership Other	UK	31 Dec	50.0	50.0	2.1 1.2 3.3	1.8 1.0 2.8	112.4 3.0 115.4	67.5 1.9 69.4
Less: Impairment2							(14.1)	(20.6)
Total					48.5	36.5	215.2	212.8

1 Lend Lease provides service concession arrangements, originating through PFIs, in the areas of healthcare, education and government facilities. These arrangements provide facilities management and maintenance services for a fixed payment per annum (subject to inflationary increases per year) with terms generally 25 to 30 years. They also incorporate contractual obligations to make available the individual assets for their prescribed use and, where necessary, overhaul or replace major items of plant and equipment related to the assets, with payment obtained through periodic drawdowns from the relevant government authorities.

2 An impairment reversal of A\$5.7 million relating to Pyrmont Trust (Jacksons Landing) has been recognised during the period (June 2006: impairment loss A\$6.0 million). This reflects the achievement of several milestones for the project during the period, which contributed to the derisking of the project and resulting in a lower discount rate applied in an external valuation.

3 Under the Joint Venture Agreement all operating decisions are made jointly. Lend Lease therefore does not have control.

		Consolidated
	June 2007	June 2006
	A\$m	A\$m
10. Investments Accounted for Using the Equity Method continued
b. Joint Venture Entities continued
Lend Lease's Share of the Results of Joint Venture Entities
Revenue	293.0	214.9
Expenses	(241.8)	(175.8)
Profit before tax	51.2	39.1
Income tax expense1	(1.1)	(0.3)
Profit after tax	50.1	38.8
Other adjustments
Amortisation of fair value adjustments	(1.1)	(2.3)
Other	(0.5)
Share of joint ventures' profit – accounted for using the equity method	48.5	36.5
Movements in Carrying Amount of Joint Venture Entities
Carrying amount at beginning of financial year	212.8	155.9
Investment in joint ventures acquired during financial year		13.4
Share of joint venture entities' profit	48.5	36.5
Contributions to the joint venture entities	47.2	37.5
Capital redemptions by joint venture entities	(20.4)	(1.5)
Distributions received from the joint venture entities Other adjustments (including effect of foreign exchange rate movement)	(66.9) (6.0)	(26.9) (2.1)
Carrying amount at end of financial year	215.2	212.8
Lend Lease's Share of Balance Sheet of Joint Venture Entities
Current assets	327.4	255.9
Non current assets Total assets	349.9 677.3	296.6 552.5
Current liabilities	177.9	70.8
Non current liabilities	281.5	256.3
Total liabilities	459.4	327.1
Net assets	217.9	225.4
Other adjustments
Fair value adjustments on acquisition	3.5	4.6
Impairment	(14.1)	(20.6)
Adjustments due to differences in accounting policies Other	4.3 3.6	3.4
Net assets – adjusted using the equity method	215.2	212.8
Commitments
Share of joint ventures' capital expenditure and lease commitments contracted but not
provided for and payable Due within one year	2.4	14.8
Due between one and five years	1.5	0.5
Due later than five years		0.2
	3.9	15.5

1 Lend Lease's share of tax relating to the majority of the joint ventures is reflected in the Lend Lease Group's current tax expense (refer to Note 5a. Income Tax Expense).

		Consolidated		Company
	June 2007 A\$m	June 2006 A\$m	June 2007 A\$m	June 2006 A\$m
11. Investment Properties
Senior Living Properties1
Forest Hills Serviced Apartments	7.1	6.9
Trinity Green	0.3
Keperra Retirement Village		84.6
	7.4	91.5	–	–
Retail Properties
Chelmsford Meadow Shopping Centre	233.0	195.5
Pakenham Place Shopping Centre	16.2
Total investment properties	256.6	287.0	–	–
Reconciliations
Reconciliations of the carrying amount for investment properties are
set out below:
Carrying amount at beginning of financial year	287.0	83.1
Acquisitions	54.7	190.3
Additions	0.3
Disposals	(84.6)	(6.4)
Fair value adjustments	2.8	14.8
Effect of foreign exchange rate movement	(3.6)	5.2
Carrying amount at end of financial year	256.6	287.0	–	–

1 Relates to retirement villages held under leasehold arrangements that do not satisfy the revenue recognition criteria under AASB 118. There is an offsetting non financial liability in Note 21. 'Other Non Financial Liabilities' and therefore no profit and loss impact.

Valuation Basis

The basis of the valuation of investment properties is the amounts for which the properties could be exchanged between willing parties in an arm's length transaction, based on current prices in an active market for similar properties in the same location and condition. If this information is not available, Lend Lease uses alternative calculation methods such as discounted cash flow projections or recent prices on less active markets.

The 2007 valuations for the Senior Living properties are supported by actuarial assessments performed by Lend Lease based on its detailed knowledge and recent experience in the location and category of the property being valued. The Chelmsford Meadows Shopping Centre's valuation is based on an independent valuation performed by an industry specialist in valuing these types of investment properties. Pakenham Place Shopping Centre's carrying value reflects market value based on Lend Lease's recent acquisition of the centre.

	Consolidated		Company
	June 2007 A\$m	June 2006 A\$m	June 2007 A\$m	June 2006 A\$m
Amounts Recognised in Income Statement for Investment Properties1
Rental income	16.5	5.1
Direct operating expenses from properties that generated
rental income	(4.8)	(3.4)
	11.7	1.7	–	–
Leases as Lessor The future minimum lease payments receivable under non cancellable leases are as follows:
Less than one year	10.7	8.8
Between one and five years	35.1	26.8
Later than five years	42.8	32.0
	88.6	67.6	–	–

1 Excludes profit and loss impact of fair value adjustments and the offsetting non financial liability recognition.

		Consolidated		Company
	June 2007	June 2006	June 2007	June 2006
	A\$m	A\$m	A\$m	A\$m
12. Other Financial Assets
Current
Available for Sale
Negotiable instruments	335.7
Australian Prime Property Fund	256.6
Lend Lease Global Properties, SICAF	26.5
Other	1.8	1.2	1.8	1.2
	620.6	1.2	1.8	1.2
Held to Maturity
Negotiable instruments	25.8	11.4	–	–
Derivatives
Forward foreign exchange contracts – held for trading	0.1	8.8
Forward foreign exchange contracts – fair value hedges		1.6
Interest rate swaps	0.1	1.2 11.6	–	–
Total current	646.5	24.2	1.8	1.2
Non Current
Available for Sale
Australian Prime Property Fund	184.1	392.9
Lend Lease Global Properties, SICAF		130.4
Lend Lease Retail Partnership	82.1	76.4
Cohen & Steers, SICAV	47.6	35.8
Lend Lease Core Plus Fund	24.3	11.3
Asia Pacific Investment Company	17.7	15.6
Other	62.3	55.4
	418.1	717.8	–	–
Held to Maturity
Negotiable instruments	6.6	5.6	–	–
Derivatives
Forward foreign exchange contracts – held for trading	–	0.4	–	–
Investments Held at Cost
Shares in consolidated entities			2,215.3	2,215.3
Less: Impairment			(656.7)	(713.3)
	–	–	1,558.6	1,502.0
Total non current	424.7	723.8	1,558.6	1,502.0
Total other financial assets	1,071.2	748.0	1,560.4	1,503.2

	Consolidated			Company
	June 2007	June 2006	June 2007	June 2006
	A\$m	A\$m	A\$m	A\$m
13. Property, Plant and Equipment
Land	9.8	8.5	–	–
Buildings and leasehold improvements at cost	81.5	76.4
Accumulated depreciation	(26.0)	(23.8)
	55.5	52.6	–	–
Plant and equipment at cost	135.2	146.2	0.7	0.9
Accumulated depreciation	(83.7)	(97.3)	(0.5)	(0.5)
	51.5	48.9	0.2	0.4
Leased plant and equipment at cost	0.3	0.3
Accumulated amortisation	(0.2)	(0.2)
	0.1	0.1	–	–
Total property, plant and equipment	116.9	110.1	0.2	0.4
Reconciliations
Reconciliations of the carrying amounts for each class of property,
plant and equipment are set out below:
Land
Carrying amount at beginning of financial year1	8.5	8.4
Additions (Somerset Central, Singapore)	533.4
Disposals (Somerset Central, Singapore)	(508.6)
Effect of foreign exchange rate movements/other	(23.5)	0.1
Carrying amount at end of financial year	9.8	8.5	–	–
Buildings and Leasehold Improvements
Carrying amount at beginning of financial year2 Additions	52.6 15.2	44.8 5.6
Additions from acquisition of consolidated entities		13.0
Disposals	(0.5)	(7.9)
Disposals of consolidated entities	(3.7)
Depreciation Effect of foreign exchange rate movements/other	(6.1) (2.0)	(4.6) 1.7
Carrying amount at end of financial year	55.5	52.6	–	–
Plant and Equipment Carrying amount at beginning of financial year3	48.9	49.0	0.4	0.7
Additions	22.7	20.9	0.1
Additions from acquisition of consolidated entities		1.2
Disposals	(1.4)	(3.0)
Disposals of consolidated entities	(0.8) (18.0)	(18.4)		(0.3)
Depreciation Effect of foreign exchange rate movements/other	0.1	(0.8)	(0.3)
Carrying amount at end of financial year	51.5	48.9	0.2	0.4
Leased Plant and Equipment
Carrying amount at beginning of financial year4	0.1	0.2
Amortisation		(0.1)
Carrying amount at end of financial year	0.1	0.1	–	–
Total carrying amount	116.9	110.1	0.2	0.4

1 The carrying amount at 1 July 2005 of A\$8.4 million represents costs only.

2 The carrying amount at 1 July 2005 of A\$44.8 million represents A\$63.8 million of costs and A\$19.0 million of accumulated depreciation.

3 The carrying amount at 1 July 2005 of A\$49.0 million represents A\$139.1 million of costs and A\$90.1 million of accumulated depreciation.

4 The carrying amount at 1 July 2005 of A\$0.2 million represents A\$0.5 million of costs and A\$0.3 million of accumulated depreciation.

		Consolidated	Company
	June 2007	June 2006	June 2007	June 2006
Note	A\$m	A\$m	A\$m	A\$m
14. Intangible Assets
Goodwill 14a	764.7	784.5
Management agreements 14b	18.3	21.2
Other intangibles 14c	5.1	4.0
Total intangible assets	788.1	809.7	–	–
a. Goodwill
Bovis Lend Lease Group	506.7	524.3
Crosby Lend Lease Group	177.5	179.7
Delfin Lend Lease Group	64.7	64.7
Lend Lease Development Group	15.8	15.8
	764.7	784.5	–	–
Accumulated impairment	–	–	–	–
Total goodwill	764.7	784.5	–	–
Reconciliations
Reconciliations of the carrying amounts for each category of goodwill
are set out below.
Bovis Lend Lease Group
Carrying amount at beginning of financial year	524.3	518.0
Effect of foreign exchange rate movements	(17.6)	6.3
Carrying amount at end of financial year	506.7	524.3	–	–
Crosby Lend Lease Group
Carrying amount at beginning of financial year	179.7
Goodwill recognised on acquisition 30b		173.0
Effect of foreign exchange rate movements	(2.2)	6.7
Carrying amount at end of financial year	177.5	179.7	–	–
Delfin Lend Lease Group
Carrying amount at beginning of financial year	64.7	64.7
Carrying amount at end of financial year	64.7	64.7	–	–
Lend Lease Development Group
Carrying amount at beginning of financial year	15.8	15.8
Carrying amount at end of financial year	15.8	15.8	–	–
Total goodwill	764.7	784.5	–	–

Impairment Tests for Goodwill

Goodwill is allocated to the Group's Cash Generating Units (CGUs) identified according to region and business segment.

A summary of the goodwill allocation to CGUs is set out below:

June 2007	Asia Pacific A\$m	Americas A\$m	Europe A\$m	Total A\$m
Project Management, Construction and PFIs	27.4	171.6	307.7	506.7
Retail and Communities	80.5		177.5	258.0
	107.9	171.6	485.2	764.7
June 2006
Project Management, Construction and PFIs	27.4	185.1	311.8	524.3
Retail and Communities	80.5		179.7	260.2
	107.9	185.1	491.5	784.5

14. Intangible Assets continued

a. Goodwill continued

Key Assumptions Used for Value in Use Calculations

The recoverable amount of a CGU is determined based on value in use calculations. These calculations use post tax cash flow projections based on financial budgets approved by management covering a five year period. Cash flows beyond the five year period are extrapolated using conservative growth rates. The growth rate does not exceed the long term average growth rate for the business in which the CGU operates.

The Group's weighted average cost of capital is used as a start point for determining the discount rate with appropriate adjustments for the risk profile relating to the relevant segments and the countries in which they operate. The discount rates used are post tax.

The recoverable amount of CGUs exceeds their carrying value as at June 2007. Management believes that any reasonable possible change in the key assumptions on which the estimates are based would not cause the aggregate carrying amount to exceed the recoverable amount of these CGUs.

	Consolidated		Company
	June 2007	June 2006	June 2007	June 2006
	A\$m	A\$m	A\$m	A\$m
b. Management Agreements
Management agreements	29.4	29.4
Accumulated amortisation and impairment	(11.1)	(8.2)
Total management agreements	18.3	21.2	–	–
Reconciliation
Reconciliation of the carrying amounts of management agreements
are set out below:
Carrying amount at beginning of financial year1	21.2	24.1
Amortisation	(2.9)	(2.9)
Carrying amount at end of financial year	18.3	21.2	–	–
c. Other Intangibles
Other intangibles	8.0	5.9
Accumulated amortisation	(2.9)	(1.9)
Total other intangibles	5.1	4.0	–	–
Reconciliation
Reconciliation of the carrying amounts of other intangibles are set
out below:
Carrying amount at beginning of financial year2	4.0	2.1
Additions	2.2	2.7
Amortisation	(1.0)	(0.8)
Effect of foreign exchange rate movements	(0.1)
Carrying amount at end of financial year	5.1	4.0	–	–

1 The carrying amount at 1 July 2005 of A\$24.1 million represents A\$29.4 million of costs and A\$5.3 million of accumulated amortisation. 2 The carrying amount at 1 July 2005 of A\$2.1 million represents A\$3.2 million of costs and A\$1.1 million of accumulated amortisation.

		Consolidated		Company
	June 2007	June 2006	June 2007	June 2006
	A\$m	A\$m	A\$m	A\$m
15. Defined Benefit Plan Asset1
a. Balance Sheet Amounts
The amounts recognised in the balance sheet are determined
as follows:
Fair value of plan assets	167.3	147.4	167.3	147.4
Present value of funded obligations	(116.1)	(110.8)	(116.1)	(110.8)
Unrecognised actuarial gains	(28.7)	(15.9)	(28.7)	(15.9)
Unrecognised past service cost	0.6	1.0	0.6	1.0
Recognised asset for defined benefit obligations2	23.1	21.7	23.1	21.7
b. Reconciliation of the Fair Value of Plan Assets
Fair value of plan assets at beginning of financial year	147.4	139.8	147.4	139.8
Expected return on plan assets	7.9	7.3	7.9	7.3
Actuarial gains	17.2	9.4	17.2	9.4
Contributions by Group companies	5.5	6.5	5.5	6.5
Contributions by plan participants	2.8	1.7	2.8	1.7
Taxes and premiums paid Transfers in	(1.4) 0.5	(1.5) 0.5	(1.4) 0.5	(1.5) 0.5
Contributions to accumulation fund	(1.3)	(0.9)	(1.3)	(0.9)
Benefits paid	(11.3)	(15.4)	(11.3)	(15.4)
Fair value of plan assets at end of financial year	167.3	147.4	167.3	147.4
c. Reconciliation of the Present Value of Funded Obligations
Present value of funded obligations at beginning of financial year	110.8	111.3	110.8	111.3
Current service cost	6.5	7.3	6.5	7.3
Interest cost on benefit obligation	5.3	4.5	5.3	4.5
Contributions by plan participants	2.8	1.7	2.8	1.7
Actuarial losses	4.2	2.1	4.2	2.1
Benefits paid	(12.6)	(16.3)	(12.6)	(16.3)
Taxes and premiums paid	(1.4)	(1.5)	(1.4)	(1.5)
Transfers in	0.5	0.5	0.5	0.5
Past service cost Present value of funded obligations at end of financial year	116.1	1.2 110.8	116.1	1.2 110.8
d. Expense Recognised in the Income Statement
Current service cost	6.5	7.3	6.5	7.3
Interest cost on benefit obligation	5.3	4.5	5.3	4.5
Expected return on plan assets Actuarial gain recognised in financial year	(7.9) (0.2)	(7.3)	(7.9) (0.2)	(7.3)
Past service cost	0.4	0.2	0.4	0.2
Net defined benefit plan expense	4.1	4.7	4.1	4.7
e. Actual Return on Plan Assets	25.1	16.7	25.1	16.7

1 Relates to the Lend Lease Superannuation Fund (Australia) (the 'Fund').

2 If a surplus exists in the Fund at any particular point in time, Lend Lease may be able to take advantage of it in the form of a reduction in the required contribution rate, depending on the advice of the Fund's actuary. Lend Lease may at any time by notice to the Trustee terminate its contributions. Lend Lease has a liability to pay the contributions due prior to the effective date of the notice, but there is no requirement for Lend Lease to pay any further contributions, irrespective of the financial condition of the Fund.

	Consolidated		Company
	June 2007 %	June 2006 %	June 2007 %	June 2006 %
15. Defined Benefit Plan Asset continued
f. Categories of Plan Assets
Cash	4.0	4.0	4.0	4.0
Equity instruments1	53.0	61.0	53.0	61.0
Fixed interest securities	39.0	31.0	39.0	31.0
Property	4.0	4.0	4.0	4.0
	100.0	100.0	100.0	100.0
g. Principal Actuarial Assumptions
Discount rate (net)	5.4	4.9	5.4	4.9
Expected rate of return on assets2	5.8	5.8	5.8	5.8
Expected salary increase rate	4.0	4.0	4.0	4.0

h. Employer Contributions

The current contribution recommendations, as set out in the report of the most recent actuarial valuation of the Lend Lease Superannuation Fund as at 1 January 2006, are 14.4% of base pay (or ordinary time earnings if applicable) for Defined Benefit Plan members. Lend Lease is currently contributing at these rates.

The method used to determine the employer contribution recommendations at the last actuarial review was the Attained Age Normal method. The method adopted affects the timing of the cost to Lend Lease. Under the Attained Age Normal method, a 'normal' cost is calculated which is the estimated employer contribution rate required to provide benefits in respect of future service after the review date. The 'normal' cost is then adjusted to take into account any surplus (or deficiency) of assets over the value of liabilities in respect of service prior to the review date. Any surplus or deficiency can be used to reduce or increase the 'normal' employer contribution rate over a suitable period of time.

For the financial year ending 30 June 2008, total employer contributions to the plan are expected to be A\$6.0 million.

The long term economic assumptions adopted for the last actuarial review of the Fund were:

	As at 1 January 2006 %
Expected rate of return on assets (discount rate) after investment expense and tax	7.0
Expected salary increase rate	5.0

i. Net Financial Position of Plan

The following is a summary of the most recent financial position of the Lend Lease Superannuation Fund calculated in accordance with AAS 25 'Financial Reporting by Superannuation Plans'. Note that the figures below relate to the Fund as a whole, including the accumulation section.

			As at 1 January 2006 A\$m
Net market value of fund assets			227.9
Accrued benefits			(194.9)
Net surplus			33.0
		Consolidated
	June 2007 A\$m	June 2006 A\$m	June 2005 A\$m
Historic Summary3 j.
Plan assets	167.3	147.4	139.8
Defined benefit plan obligation	(116.1)	(110.8)	(111.3)
Surplus	51.2	36.6	28.5
Experience adjustments arising on plan assets	17.2	9.4	11.3
Experience adjustments arising on plan liabilities	(6.8)	(4.4)	0.1

1 The fair value of plan assets includes Lend Lease shares to the value of A\$0.4 million (June 2006: A\$0.3 million).

2 The expected return on assets assumption is determined by weighting the expected long term return for each asset class by the target allocation of assets to each asset class. In addition, correlations of the investment returns between asset classes are allowed. The returns used for each asset class are net of investment tax and investment fees. An allowance for administration expenses has been deducted from the expected return.

3 Lend Lease has taken the exemption provided under AASB 1 'Firsttime Adoption of Australian Equivalents to International Reporting Standards' paragraph 20A. and only disclosed June 2005 and June 2006 comparative information, rather than the previous four annual reporting periods as required under AASB 119 'Employee Benefits' paragraph 120A.(p).

		Consolidated	Company
	June 2007	June 2006	June 2007	June 2006
	A\$m	A\$m	A\$m	A\$m
16. Other Assets
Current
Prepayments	47.6	64.0
Deferred bid costs on projects at preferred bidder status	28.2	20.2
Deferred management fee receivable – Retirement by Design	1.8	4.9
Other1	112.0	99.2
	189.6	188.3	–	–
Non Current
Prepayments Deferred management fee receivable – Retirement by Design	17.5 18.9	17.4 20.1
Other	1.0	2.4
	37.4	39.9	–	–
Total other assets	227.0	228.2	–	–
17. Trade and Other Payables
Current
Trade creditors	2,300.1	1,874.6	56.3	62.3
Construction revenue and recognised project losses in excess
of costs (BIE)	1,177.4	898.1
Deposits received in advance	22.6	37.5
Unearned income	5.0	14.7
Unearned premium reserve2	3.6	4.7
Insurance claim reserve2	6.3	5.9
Related party payables
Consolidated entities			1,371.4	1,279.0
Other Deferred land payments	8.8 53.6	9.1 14.5
Other	34.6	39.5	3.5	3.4
	3,612.0	2,898.6	1,431.2	1,344.7
Non Current
Insurance claim reserve2	21.4	22.0
Deposits received in advance		0.5
Unearned income Related party payables	1.3	0.4
Consolidated entities				1.1
Other	35.1	29.5
Deferred land payments	110.0	144.1
Other	49.2	13.4
	217.0	209.9	–	1.1
Total trade and other payables	3,829.0	3,108.5	1,431.2	1,345.8

1 'Other' totalling A\$112.0 million includes A\$109.5 million in relation to an amended assessment issued by the ATO in November 2002. The amended assessment related to the forward sale of 100 million Westpac shares with County NatWest Securities Australia Limited. Lend Lease disputed the assessment and had an appeal before the Federal Court. During September 2006, the ATO refunded A\$25.5 million along with interest. In December 2006 the Federal Court found in favour of Lend Lease, with the ATO being required to repay the balance in dispute plus interest. The ATO appealed the ruling, however on 10 August 2007 the appeal was withdrawn.

2 Unearned premium and insurance claim reserves relate to Lend Lease's wholly owned special purpose captive insurance subsidiary.

		Consolidated	Company
	June 2007 A\$m	June 2006 A\$m	June 2007 A\$m	June 2006 A\$m
18. Borrowings and Financing Arrangements
a. Borrowings
Non Current
Bank credit facilities		451.2
Commercial notes	1,076.2	394.8
Total borrowings	1,076.2	846.0	–	–
b. Finance Facilities
Lend Lease operating businesses have access to the following lines of
credit:
Bank Overdrafts
Facility available	20.0	32.2	20.0	20.0
Amount of facility used
Amount of facility unused	20.0	32.2	20.0	20.0
Bank Credit Facilities
Facility available	968.6	993.4
Amount of facility used		(451.2)
Amount of facility unused	968.6	542.2	–	–
Commercial Notes
Facility available	1,076.2	394.8
Amount of facility used	(1,076.2)	(394.8)
Amount of facility unused	–	–	–	–

The bank overdraft facilities may be drawn at any time and may be terminated by the bank without notice.

Bank credit facilities include a committed syndicated bank facility maturing November 2010 of £350.0 million (A\$843.4 million) in the UK, of which £nil was drawn at 30 June 2007 (June 2006: £185.0 million).

Commercial Notes include £300.0 million 6.125% annual coupon guaranteed notes due 12 October 2021 that were issued in October 2006 in the UK public bond market and US\$300.0 million of guaranteed senior notes issued into the US Private Placement debt market maturing in October of 2012, 2015 and 2017.

Lend Lease has a A\$500.0 million Australian Commercial Paper programme and a A\$1,500.0 million Multi Issuer Debt programme. The amount drawn under these facilities was A\$nil and the availability of these facilities is subject to market conditions.

The following schedule profiles the 30 June 2007 borrowings by currency and interest exposure.

		Interest Exposure			Currency
	Fixed A\$m	Floating A\$m	Total A\$m	US\$ A\$m	£ A\$m	Total A\$m
Not greater than one year Between one and five years
Greater than five years	1,076.2		1,076.2	365.8	710.4	1,076.2
Total	1,076.2	–	1,076.2	365.8	710.4	1,076.2

		Consolidated	Company
	June 2007	June 2006	June 2007	June 2006
	A\$m	A\$m	A\$m	A\$m
19. Provisions
Current
Employee benefits	91.9	82.1	3.8	3.0
Construction risks1	79.8	101.8
Restructure provisions2	5.2	15.4
Employee terminations3	3.9	3.4
Other4	69.9	74.8	41.9	51.8
	250.7	277.5	45.7	54.8
Non Current
Employee benefits	9.1	20.5	0.4	0.3
Other4	4.3	5.6
	13.4	26.1	0.4	0.3
Total provisions	264.1	303.6	46.1	55.1
Reconciliations
Reconciliations of the carrying amounts of each class of provision,
except for employee benefits, are set out below:
Current
Construction Risks
Carrying amounts at beginning of financial year	101.8	92.6
Provisions raised during financial year	10.0	7.6
Payments made during financial year	(16.6)	(9.5)
Other	(13.4)	9.9
Effect of foreign exchange rate movements Carrying amount at end of financial year	(2.0) 79.8	1.2 101.8	–	–
Restructuring Carrying amount at beginning of financial year	15.4	26.1
Provisions written back during financial year	(3.6)	(4.8)
Payments made during financial year	(6.1)	(6.4)
Effect of foreign exchange rate movements	(0.5)	0.5
Carrying amount at end of financial year	5.2	15.4	–	–
Employee Terminations
Carrying amounts at beginning of financial year	3.4	9.1
Provisions raised/(written back) during the year	0.9	(2.9)
Payments made during financial year	(0.4)	(2.8)
Carrying amount at end of financial year	3.9	3.4	–	–

1 Represents maintenance, warranty and construction risk provisions to cover specific or estimated claims that arise due to defects or legal disputes in relation to completed projects. The timing of the utilisation of these provisions varies across each completed project.

2 Primarily relates to Investment Management restructuring provision established to cover expenses relating to the restructuring and rationalisation of the Investment Management business. The majority of costs are expected to be incurred in the next financial year.

3 Relates to provisions established to cover terminations arising from the Group's restructuring and cost saving initiatives. The majority of costs are expected to be incurred in the next financial year.

4 Primarily represents future obligations on funding received for Lend Lease Foundation programs, PFI Service Concession arrangements and various legal provisions. The timing of the utilisation of these provisions is dependent on litigation outcomes and service requests received by Lend Lease.

		Consolidated	Company
	June 2007	June 2006	June 2007	June 2006
	A\$m	A\$m	A\$m	A\$m
19. Provisions continued
Reconciliations continued
Current continued
Other
Carrying amounts at beginning of financial year	74.8	49.6	51.8	36.7
Provisions raised during financial year	14.5	44.1	10.3	23.5
Payments made during financial year	(22.4)	(19.2)	(20.0)	(8.6)
Other	3.4	(0.5)
Effect of foreign exchange rate movements	(0.4)	0.8	(0.2)	0.2
Carrying amount at end of financial year	69.9	74.8	41.9	51.8
Non Current
Other
Carrying amounts at beginning of financial year	5.6	2.8
Provisions raised during financial year	0.1	4.2
Payments made during financial year	(1.1)	(0.6)
Other Effect of foreign exchange rate movements	(0.3)	(0.7) (0.1)
Carrying amount at end of financial year	4.3	5.6	–	–
20. Other Financial Liabilities
Current
Derivatives
Forward foreign exchange contracts – held for trading	2.2
Forward foreign exchange contracts – cash flow hedges	0.4
Forward foreign exchange contracts – fair value hedges	0.1
	2.7	–	–	–
	2.9	–
Other	5.6	–	11.1 11.1	4.6 4.6
Non Current
Bluewater lease liability	197.9	200.4
Other	51.4	10.8	69.8	31.3
	249.3	211.2	69.8	31.3
Total other financial liabilities	254.9	211.2	80.9	35.9
21. Other Non Financial Liabilities
Current
Deferred gain on foreign currency hedges	0.4	2.9
Other	0.1	0.1
	0.5	3.0	–	–
Non Current
Deferred payments – senior living properties	7.4	91.5
Deferred gain on foreign currency hedges		0.4
Other	0.2	0.3
	7.6	92.2	–	–
Total other non financial liabilities	8.1	95.2	–	–

	June 2007 A\$m	Consolidated June 2006 A\$m	June 2007 A\$m	Company June 2006 A\$m
22. Defined Benefit Plan Liability1
a. Balance Sheet Amounts The amounts recognised in the balance sheet are determined as follows:
Present value of defined benefit obligations Fair value of plan assets Unrecognised actuarial gains	778.3 (661.0) 39.1	722.4 (572.2) 24.4
Recognised liability for defined benefit obligations2	156.4	174.6	–	–
b. Reconciliation of the Present Value of Defined Benefit Obligations Present value of defined benefit obligations at beginning of financial year Current service cost	722.4 39.4	640.2 34.7
Interest cost on benefit obligation Contributions by plan participants	39.2 0.5	32.3 0.2
Actuarial losses Benefits paid Curtailments	3.2 (16.7) 0.5	21.1 (16.6) 0.7
Effect of foreign exchange rate movements	(10.2)	9.8
Present value of defined benefit obligations at end of financial year	778.3	722.4	–	–
c. Reconciliation of the Fair Value of Plan Assets Fair value of plan assets at beginning of financial year Expected return on plan assets Actuarial gains Contributions by Group companies Contributions by plan participants Benefits paid Effect of foreign exchange rate movements	572.2 41.4 18.5 54.2 0.5 (16.7) (9.1)	454.2 33.3 36.8 55.8 0.2 (16.6) 8.5
Fair value of plan assets at end of financial year	661.0	572.2	–	–
d. Expense Recognised in the Income Statement Current service cost Interest cost on benefit obligation Expected return on plan assets Curtailment cost Net defined benefit plan expense	39.4 39.2 (41.4) 0.5 37.7	34.7 32.3 (33.3) 0.7 34.4	–	–
e. Actual Return on Plan Assets	59.9	70.1	–	–
		Consolidated		Company

	Consolidated		Company
	June 2007 June 2006 % %		June 2007 %	June 2006 %
f. Categories of Plan Assets
Equity instruments	66.0	79.0
Debt instruments	28.0	15.0
Fixed interest securities		5.0
Other assets	6.0	1.0
	100.0	100.0	–	–

1 Relates to the Bovis UK Pension Scheme (the 'Fund').

² If a surplus exists in the Fund at any particular point in time, Lend Lease may be able to take advantage of it in the form of a reduction in the required contribution rate, depending on the advice of the Fund's actuary and agreement from the Trustee. Regulations in place in the UK effective 23 September 2005 have increased the regulator's powers over the sponsoring company in relation to the financing of any deficit. The sponsor company (Bovis Lend Lease Holdings Limited) is obliged to finance the deficit, the funding of which is through a commitment to a rolling deficit reduction plan. During the year the Company made additional contributions of A\$14.8 million (£6.0 million) to the Fund. The review date for the current deficit recovery plan is March 2008.

	Consolidated		Company
	June 2007 %	June 2006 %	June 2007 %	June 2006 %
22. Defined Benefit Plan Liability continued
g. Principal Actuarial Assumptions
Discount rate (net)	5.5	5.3
Expected rate of return on assets1	7.5	7.4
Expected salary increase rate	4.7	4.5
Expected inflation rate	3.2	3.0
Expected rate of pension increases:
Post April 2005	2.7	2.6
April 1997 to April 2005	3.2	3.0
Pre April 1997	2.7	2.6

h. Employer Contributions

The current contribution recommendations, as set out in the report of the most recent actuarial valuation of the Bovis UK Pension Scheme as at 31 March 2005, are 20% of pensionable salary for the final salary section and 16% of pensionable salary for the indexlinked section. Lend Lease is currently contributing at these rates. In addition, Lend Lease contributes top up contributions from time to time of which A\$14.8 million (£6.0 million) was contributed during the year (June 2006: A\$21.4 million (£9.0 million)).

The method used to determine the employer contribution recommendations at the last actuarial review was the Projected Unit Credit method. This method sees each period of service as giving rise to an additional unit of benefit entitlement and measures each unit separately to build up the final obligation.

For the financial year ending 30 June 2008, total employer contributions to the plan are expected to be A\$53.0 million (£22.0 million). Further employer contributions may be paid if there are any redundancies or augmentations during the year.

The long term economic assumptions adopted for the last actuarial review of the Fund were:

	As at 31 March 2005
	%
Expected rate of return on assets (discount rate) after investment expense and tax	7.4
Expected salary increase rate	4.5

i. Net Financial Position of Plan

The following is a summary of the most recent financial position of the Bovis UK Pension Scheme calculated in accordance with AAS 25 'Financial Reporting by Superannuation Plans'.

	As at 31 March 2005 A\$m
Net market value of fund assets	443.4
Accrued benefits	(618.3)
Net (deficit)	(174.9)

	Consolidated
	June 2007	June 2006	June 2005
	A\$m	A\$m	A\$m
Historic Summary2 j.
Plan assets	661.0	572.2	454.2
Defined benefit plan obligation	(778.3)	(722.4)	(640.2)
(Deficit)	(117.3)	(150.2)	(186.0)
Experience adjustments arising on plan assets	18.5	36.8	32.3
Experience adjustments arising on plan liabilities	(7.1)	(21.1)	(23.9)

1 The expected return on assets assumption is determined by weighting the expected longterm return for each asset class by the target allocation of assets to each asset class and allowing for the correlations of the investment returns between asset classes. The returns used for each asset class are net of the Pension Protection Fund levy payable for the 2008 financial year. An allowance for administration expenses has been deducted from the expected return.

2 Lend Lease has taken the exemption provided under AASB 1 paragraph 20A. and only disclosed June 2005 and June 2006 comparative information, rather than the previous four annual reporting years as required under AASB 119 paragraph 120A.(p).

	Consolidated June 2007 June 2006 No. of No. of Shares Shares				No. of Shares	June 2007	Company No. of Shares	June 2006
	m	A\$m	m	A\$m	m	A\$m	m	A\$m
23. Issued Capital and Treasury Shares
Issued Capital – Ordinary Shares Fully Paid Ordinary shares issued at beginning of financial year Movements during financial year Issues for:	399.7	834.7	398.6	834.6	399.7	834.7	398.6	834.6
Share Election Plan (SEP)1 Other2	0.4 1.0	19.7	1.1	0.1	0.4 1.0	19.7	1.1	0.1
Ordinary shares issued at end of financial year	401.1	854.4	399.7	834.7	401.1	854.4	399.7	834.7

On 12 February 2007, the Company announced the suspension of the SEP with effect from 1 March 2007. In addition, the Dividend Reinvestment Plan and Share Purchase Plan remain suspended.

Holders of ordinary shares are entitled to receive dividends as declared and are entitled to one vote per share at shareholders' meetings. Ordinary shareholders rank after all creditors in repayment of capital.

Effective 1 July 1998, the Corporations legislation in place abolished the concepts of authorised capital and par value shares. Accordingly, Lend Lease does not have authorised capital nor par value in respect of its issued shares.

	Consolidated				Company
	June 2007			June 2006	June 2007		June 2006
	No. of Shares		No. of Shares		No. of Shares		No. of Shares
	m	A\$m	m	A\$m	m	A\$m	m	A\$m
Treasury Shares3
Treasury shares at beginning of financial year	30.4	64.5	30.8	68.1	30.4	89.6	30.8	94.2
Movements during financial year
Treasury shares acquired	0.4	6.7	0.1		0.4	6.7	0.1	0.1
Treasury shares vested	(0.3)	(3.8)	(0.5)	(3.6)	(0.3)	(3.8)	(0.5)	(4.7)
Treasury shares at end of financial year	30.5	67.4	30.4	64.5	30.5	92.5	30.4	89.6

			Consolidated	Company
	Note	June 2007 A\$m	June 2006 A\$m	June 2007 A\$m	June 2006 A\$m
24. Reserves
Fair value revaluation reserve	24a	130.2	101.7	1.3	0.8
Hedging reserve	24b	(29.1)	(14.4)
Foreign currency translation reserve	24c	(50.9)	4.4
Equity compensation reserve	24d	12.3	7.6	12.3	7.6
Other compensation reserve	24e	55.3	55.3	55.3	55.3
Capital reserve	24f	104.6	104.6	104.6	104.6
Minority interest acquisition reserve	24g	(124.7)	(109.5)
Total reserves		97.7	149.7	173.5	168.3

Nature and Purpose of Reserves

a. Fair Value Revaluation Reserve

Unrealised gains or losses arising from changes in the fair value and foreign exchange rate differences on translation of non monetary securities classified as available for sale are recognised in the fair value revaluation reserve. Amounts are recognised in the income statement when the associated securities are sold or impaired.

¹ The shares issued under the SEP represent dividends forgone by SEP participants and reinvested in shares. These shares are issued directly from share capital with the number of shares issued based on the share price at the date the dividend payments are forgone.

² Primarily relates to shares issued as part of the consideration for the purchase of the minority interest shareholdings in Crosby Lend Lease Group Limited.

³ Represents unallocated Lend Lease shares which are held by employee benefit vehicles, including employee share plans, which Lend Lease sponsors. The value reflects the original historical cost to the Lend Lease Group. The value of the treasury shares for the Company is different to the Lend Lease Group due to the elimination of the profit impact of transactions between consolidated employee benefit vehicles.

24. Reserves continued

Nature and Purpose of Reserves continued

b. Hedging Reserve

The hedging reserve comprises the effective portion of the cumulative net change in the fair value of cash flow hedging instruments relating to hedged transactions that have not occurred.

c. Foreign Currency Translation Reserve

The foreign currency translation reserve records the foreign currency differences net of income tax arising from the translation of foreign operations, the translation of transactions that hedge the Company's net investment in a foreign operation or the translation of foreign currency monetary items forming part of the net investment in a foreign operation.

d. Equity Compensation Reserve

The fair value of equity settled share based compensation is recognised in the income statement and equity compensation reserve over the vesting period of the underlying grant. Additionally, unallocated Lend Lease shares held by consolidated employee benefit vehicles which are used to meet equity related employee arrangements are recognised in the equity compensation reserve at their original historic cost to the Group.

e. Other Compensation Reserve

Unallocated Lend Lease shares held by consolidated employee benefit vehicles that are used to cash settle certain share based payment arrangements are recognised in the other compensation reserve at their original historic cost to the Group. On allocation, the shares are revalued to their current market value against the income statement. Following the distribution of the proceeds to the beneficiary, the difference between the original cost of the shares and the market value is recognised in retained earnings as a 'gain/(loss) on utilisation of treasury shares'.

f. Capital Reserve

The capital reserve comprises realised capital profits on the disposal of assets which did not attract capital gains tax.

g. Minority Interest Acquisition Reserve

The minority interest acquisition reserve arises from additional acquisition of minority interests, subsequent to obtaining control of the entity. The reserve represents the premium on the cost of acquisition over the fair value of the Group's share of the net identifiable assets of the acquired entity.

	Consolidated			Company
	June 2007	June 2006	June 2007	June 2006
	A\$m	A\$m	A\$m	A\$m
25. Retained Earnings
Retained earnings at beginning of financial year	2,018.2	1,782.5	1,550.0	1,556.4
Profit attributable to members of Lend Lease Corporation Limited	497.5	415.2	391.0	201.8
Dividends forgone pursuant to SEP	6.5	13.6	6.5	13.6
Gain on utilisation of treasury shares recognised directly in retained earnings1	0.8	23.9	1.2	13.6
Other	(2.5)	(0.2)
	2,520.5	2,235.0	1,948.7	1,785.4
Dividends paid	(263.9)	(235.4)	(263.9)	(235.4)
Less: Dividends on treasury shares	20.2	18.6
Total retained earnings at end of financial year	2,276.8	2,018.2	1,684.8	1,550.0
26. Minority Interests
Minority interests comprise:
Chelmsford Meadows (25%)	58.3	49.0
Lend Lease Twin Waters (49%)	12.9	13.5
Lend Lease Rouse Hill (49%)	9.4	4.2
Crosby Lend Lease Group (June 2006: 3%)		6.0
Other	0.9	0.5
	81.5	73.2	–	–
Represented by:
Interest in retained profit at end of financial year	9.4	10.3
Interest in share capital	72.1	62.9
Total minority interests	81.5	73.2	–	–

1 Difference between the cost of the treasury shares to the Group and the fair value expensed to the income statement on settlement.

27. Contingent Liabilities

Lend Lease has the following contingent liabilities:

There are a number of legal claims and exposures which arise from the normal course of business. There is significant uncertainty as to whether a future liability will arise in respect of these items. The amount of liability, if any, which may arise cannot be measured reliably at this time. The Directors are of the opinion that all known liabilities have been brought to account and that adequate provision has been made for any anticipated losses.

In certain circumstances, Lend Lease guarantees the performance of particular Group entities in respect of their obligations. This includes bonding and bank guarantee facilities used primarily by the Project Construction Management businesses. These guarantees are provided in respect of activities that occur in the ordinary course of business and any known losses in respect of the relevant contracts have been brought to account.

Certain contingent liabilities exist in relation to the Lend Lease Retirement Benefit Fund. This is disclosed in detail in Note 34a. Lend Lease Employee Share Plans.

In September 2004, a class action was filed against a number of parties who responded to the World Trade Center emergency and debris removal following the events of 9/11. The action was brought against more than 50 defendants including the City of New York and Bovis Lend Lease LMB Inc ('Bovis Lend Lease') (a subsidiary of Lend Lease). Judge Alvin K Hellerstein of the United States Federal Court for the Southern District of New York refused to certify the class action and as such the litigation proceeds as a consolidated action by individual claimants.

In June 2006, Bovis Lend Lease and the other defendants brought an immunity motion in relation to the claims. The motion was brought on the basis that the defendants responded to a civic emergency and in that context should be immune from liability under applicable US laws. Judge Hellerstein handed down his judgment on 17 October 2006 and held that the "Defendants are benefited by limited immunity, limited according to time and activity". However, the Court denied the defendants' motion, concluding that such issues are "factintensive" questions which are "unsuitable for resolution by motion". Judge Hellerstein stated that the Court would need to assess further evidence before it could determine the extent to which the immunity laws are applicable to the claims.

Although the defendants were pleased that the 17 October 2006 decision recognised that the state and federal laws that provide immunity do protect the defendants against suit (to a presently undetermined extent) and while Judge Hellerstein's decision made no finding of liability in relation to Bovis Lend Lease or any of the defendants, the defendants have appealed against the motion on the basis that the Court should have granted the motion as presented. The appeal is scheduled to be heard by the United States Court of Appeals for the Second Circuit the week of 1 October 2007, but this date could change. The litigation is still in the preliminary stages. Should the litigation proceed beyond this stage, Bovis Lend Lease is one of the beneficiaries of the approximately US\$1.0 billion captive insurance policy established by the US Congress to protect the City of New York and its contractors against liabilities that may arise from the clean up. Bovis Lend Lease also has other project specific insurance.

In addition, to establish any liability on the part of Bovis Lend Lease, the claimants must prove that Bovis Lend Lease owed them a duty of care, breached that duty and that their injuries were caused by the conduct of Bovis Lend Lease. The litigation will therefore need to proceed through a number of stages before any liability can attach to Bovis Lend Lease. As with all litigation, to the extent that the claimants are able to establish liability against Bovis Lend Lease, it is not possible at this stage to quantify what that liability may or may not be or whether or not that liability will be entirely covered by insurance.

28. International Currency Management and Financial Instruments

a. Foreign Currency

Foreign Currency Risk

Lend Lease policy is to manage currency risk so as to minimise any adverse impact of this risk and associated costs on the Lend Lease Group's consolidated result. A Financial Markets Risk Committee oversees the management of the Group's foreign currency exposures within the parameters of the Board approved currency risk management policy. Speculative trading is not undertaken.

Lend Lease uses both physical and derivative (mainly forward foreign exchange contracts) financial instruments to hedge its foreign currency exposures.

The majority of forward exchange contracts hedge specific foreign currency exposures including receivables, payables, revenues, expenses and intercompany transactions and loans. The contracts are converted using forward rates at balance date with unrealised gains and losses recorded in the income statement or the hedge reserve when the derivative is used in a hedging relationship that satisfies AASB 139 'Financial Instruments: Recognition and Measurement' criteria. Exchange gains and losses on these contracts are accounted for in accordance with Lend Lease's accounting policy for foreign currency (refer to Accounting Policy Note 1v.).

28. International Currency Management and Financial Instruments continued

a. Foreign Currency continued

Foreign Currency Risk continued

Certain derivative transactions qualified as cash flow or fair value hedges, in meeting the appropriate strict hedge accounting criteria outlined in Accounting Policy Note 1v.

It is estimated that an increase of one cent/pence in the average rate in the value of AUD against foreign currencies in which Lend Lease derives its foreign income would have decreased the consolidated entity's profit before tax at 30 June 2007 by approximately A\$4.4 million (2006: A\$6.0 million). No forward exchange contracts have been included in this calculation.

Fair Value Hedges

Lend Lease's fair value hedges consist of foreign exchange forward contracts used to protect against changes in the fair value of particular foreign denominated available for sale financial assets due to movements in market foreign exchange rates. As at 30 June 2007 the fair value of the outstanding derivatives held by Lend Lease and designated as fair value hedges are recognised as Other Financial Liabilities of A\$0.1 million.

Cash Flow Hedges

Lend Lease's cash flow hedges protect against foreign exchange rate fluctuations on highly probable forecast transactions using foreign exchange forward contracts. As at June 2007 the fair value of these outstanding designated derivatives is recognised in equity as an out of the money position of A\$0.4 million. It is expected that the current hedged forecast transactions will occur during the financial year ending June 2008.

		Weighted Average		Receivable/(Payable)
		Exchange Rate		Under Contracts
	June 2007 (A\$1=)	June 2006 (A\$1=)	June 2007 A\$m	June 2006 A\$m
Contracts to buy pounds sterling at an agreed exchange rate
Not later than one year	0.42	0.42	(51.8)	(52.4)
Later than one year but not later than two years		0.41		(19.1)
Contracts to sell pounds sterling at an agreed exchange rate
Not later than one year	0.42	0.40	574.9	451.1
Later than one year but not later than two years		0.41		19.2
Contracts to buy US dollars at an agreed exchange rate
Not later than one year	0.82	0.76	(237.5)	(119.8)
Later than one year but not later than two years		0.75		(15.8)
Contracts to sell US dollars at an agreed exchange rate
Not later than one year	0.79	0.75	45.8	157.2
Later than one year but not later than two years		0.74		16.0
Contracts to buy euros at an agreed exchange rate
Not later than one year	0.62	0.59	(10.9)	(7.3)
Contracts to sell euros at an agreed exchange rate
Not later than one year	0.61	0.60	8.5	7.5
Contracts to buy Singapore dollars at an agreed exchange rate
Not later than one year	1.22	1.20	(25.0)	(4.2)
Contracts to sell Singapore dollars at an agreed exchange rate
Not later than one year	1.25	1.17	27.6	27.5
Total A\$			331.6	459.9

b. Credit Risk Exposures

Credit risk represents the loss that would be recognised if counterparties failed to perform as contracted. The Lend Lease Risk Management and Audit Committee maintains a Groupwide framework for risk management and reviews issues of material risk exposure, including credit risk.

On Balance Sheet Financial Instruments

The credit risk on financial assets recognised in the balance sheet (excluding investments of Lend Lease) equals the carrying amount, net of any impairment.

Lend Lease has no significant concentrations of credit risk and has policies in place to ensure that sales of products and services are made to customers with an appropriate credit history.

28. International Currency Management and Financial Instruments continued

b. Credit Risk Exposures continued

On Balance Sheet Financial Instruments continued

Credit risk on financial instruments is managed through a Board approved credit policy for determining acceptable counterparties. The counterparties are recognised financial intermediaries with acceptable credit ratings determined by a recognised rating agency. The policy sets out credit limits for each counterparty. The use of any counterparty outside the policy specifications requires Board approval.

Off Balance Sheet Financial Instruments

Credit risk for off balance sheet derivative contracts such as interest rate swaps and forward exchange contracts is minimised as dealing is principally undertaken with counterparties that are recognised financial intermediaries with acceptable credit ratings determined by a recognised rating agency.

Foreign exchange contracts are subject to credit risk in relation to the counterparty failing to deliver the contracted amount of currency at settlement date. The full amount of the exposure is disclosed in Note 28a. 'Foreign Currency'.

c. Interest Rate Risk

Lend Lease's policy is to manage interest rate risk that impacts directly on the Group's assets and liabilities. A Financial Markets Risk Committee oversees the management of the Group's interest rate exposures within the parameters of the Board approved policy.

Lend Lease uses physical and derivative (mainly interest rate swaps) financial instruments to assist in managing its interest rate exposure. Speculative trading is not undertaken.

At 30 June 2007 it is estimated that an increase of one percentage point in interest rates would have increased the consolidated entity's profit before tax by approximately A\$3.5 million (2006: A\$5.0 million decrease). Interest rate swaps have been included in this calculation.

28. International Currency Management and Financial Instruments continued

c. Interest Rate Risk continued

Lend Lease's exposure to interest rate risk and the effective weighted average interest rate for classes of financial assets and financial liabilities are set out below.

				Fixe	d In st M ring tere atu	In
		We ig hte d A ver age 1	Flo atin Inte t g res			Lat han er t	No n In tere st
Co l i da d te		Inte t R ate res	Rat e	On e Y Les ear or s	On Fiv e Y e to ear s	Five Ye ars	Bea ring	Tot al
ns o	Not e	%	A\$ m	A\$ m	A\$ m	A\$ m	A\$ m	A\$ m
Ju 2 0 0 7 ne
F ina ia l As ts nc se
Ca h a d c h e iva len ts s n as q u	7	4. 8	4 2 2. 7	1 2 7. 4				5 5 0. 1
Lo d r iva b les an s a n ec e	8	7. 1	9 0. 9	5 0. 5	2 5. 3	3 8. 6	2, 2 9 8. 0	2, 5 0 3. 3
O he f ina ia l a ( inv ) t ts tm ts r nc ss e es en	1 2	6. 3		3 6 1. 5	6. 6		7 0 3. 0	1, 0 7 1. 1
O ( ) he f ina ia l a de iva ive t ts t r nc ss e r s	1 2						0. 1	0. 1
			5 1 3. 6	5 3 9. 4	3 1. 9	3 8. 6	3, 0 0 1. 1	2 6 4, 1 4.
F ina ia l L ia b i l i ies t nc
Tra de d o he b les t an r p ay a	1 7	3 5.			0 1 7.		2, 6 3 6 4.	2, 6 6 5 1.
Bo ing rro w s	1 8	6. 0				1, 0 6. 2 7		1, 0 6. 2 7
2 O he f ina ia l l ia b i l i ies t t r nc	2 0	0 7.	2 2 4. 6		2 4. 7		2. 9	2 2. 2 5
O he f ina ia l l ia b i l i ies ( de iva ive ) t t t r nc r s	2 0						2. 7	2. 7
			2 2 6 4.	–	4 1. 7	0 6. 2 1, 7	2, 6 0. 2 4	3, 9 8 2. 7
Ne f ina ia l a d l ia b i l i ies t ts t nc ss e an			2 8 9. 0	5 3 9. 4	( 9. 8 )	( 1, 0 3 7. 6 )	3 6 0. 9	1 4 1. 9
Ju 2 0 0 6 ne
F ina ia l As ts nc se
Ca h a d c h e iva len ts s n as q u	7	4. 8	5 0 9. 7	4 9. 8				5 5 9. 5
Lo d r iva b les an s a n ec e	8	3. 5	4. 0	0. 8	0. 1	5 7. 3	1, 7 9 3. 8	1, 8 5 6. 0
O he f ina ia l a ( inv ) t ts tm ts r nc ss e es en	1 2	5. 4		1 1. 4	5. 6		7 1 9. 0	7 3 6. 0
O he f ina ia l a ( de iva ive ) t ts t r nc ss e r s	1 2						1 2. 0	1 2. 0
			5 1 3. 7	6 2. 0	5. 7	5 7. 3	2, 5 2 4. 8	3, 1 6 3. 5
F ina ia l L ia b i l i t ies nc
Tra de d o he b les t an r p ay a	1 7						2, 2 1 0. 4	2, 2 1 0. 4
Bo ing rro s w	1 8	5. 4	3 9 0. 2			3 9 4. 8		7 8 5. 0
3 In ter t ra te es sw ap s	1 8	4. 6			6 1. 0			6 1. 0
O he f ina ia l l ia b i l i ies t t r nc	2 0	5. 6	2 0 0. 4		8. 0	2. 8		2 1 1. 2
			5 9 0. 6	–	6 9. 0	3 9 7. 6	2, 2 1 0. 4	3, 2 6 7. 6
Ne f ina ia l a d l ia b i l i ies t ts t nc ss e an			( ) 7 6. 9	6 2. 0	( ) 6 3. 3	( ) 3 4 0. 3	3 1 4. 4	( ) 1 0 4. 1

1 Does not include non interest bearing financial instruments.

2 Other financial liabilities includes Bluewater lease of A\$197.9 million which matures in 2013.

3 Notional principal amount.

Lend Lease Corporation Annual Consolidated Financial Report 2007 50

28. International Currency Management and Financial Instruments continued

c. Interest Rate Risk continued

					Fixe d In st M ring In tere atu
		We ig hte d A ver age 1	Flo atin Inte t g res			Lat han er t	No n In tere st
Co		Inte t R ate res	Rat e	On e Y Les ear or s	On Fiv e Y e to ear s	Five Ye ars	Bea ring	Tot al
m p an y	Not e	%	A\$ m	A\$ m	A\$ m	A\$ m	A\$ m	A\$ m
Ju 2 0 0 7 ne
F ina ia l As ts nc se
Ca h a d c h e iva len ts s n as q u	7	5. 9	2. 0					2. 0
Lo d r iva b les an s a n ec e	8	5. 0			1 6. 8		2, 5 8 0. 2	2, 5 9 7. 0
O ( ) t he f ina ia l a ts inv tm ts r nc ss e es en	1 2						1, 5 6 0. 4	1, 5 6 0. 4
			2. 0	–	1 6. 8	–	4, 1 4 0. 6	4, 1 5 9. 4
F ina ia l L ia b i l i ies t nc
Tra de d o he b les t an r p ay a	1 7						1, 4 3 1. 2	1, 4 3 1. 2
O he f ina ia l l ia b i l i ies t t r nc	2 0						8 0. 9	8 0. 9
			–	–	–	–	1, 5 1 2. 1	1, 5 1 2. 1
Ne f ina ia l a d l ia b i l i ies t ts t nc ss e an			2. 0	–	1 6. 8	–	2, 6 2 8. 5	2, 6 4 7. 3
Ju 2 0 0 6 ne
F ina ia l As ts nc se
Ca h a d c h e iva len ts s n as q u	7	5. 5	1. 5					1. 5
Lo d r iva b les an s a n ec e	8						2, 3 4 0. 1	2, 3 4 0. 1
O he f ina ia l a ( inv ) t ts tm ts r nc ss e es en	1 2						1, 5 0 3. 2	1, 5 0 3. 2
			1. 5	–	–	–	3, 8 4 3. 3	3, 8 4 4. 8
F ina ia l L ia b i l i t ies nc
Tra de d o he b les t an r p ay a	1 7						1, 3 4 5. 8	1, 3 4 5. 8
O he f ina ia l l ia b i l i ies t t r nc	2 0						3 5. 9	3 5. 9
			–	–	–	–	1, 3 8 1. 7	1, 3 8 1. 7
Ne f ina ia l a d l ia b i l i ies t ts t nc ss e an			1. 5	–	–	–	2, 4 6 1. 6	2, 4 6 3. 1

1 Does not include non interest bearing financial instruments.

28. International Currency Management and Financial Instruments continued

d. Liquidity Risk

The Group's objective is to maintain efficient use of cash and debt facilities in order to minimise the cost of borrowing to the Group. A Financial Markets Risk Committee oversees the management of the Group's liquidity risk within the parameters of the Board approved policy.

e. Net Fair Values of Financial Assets and Liabilities

On Balance Sheet Financial Instruments

Equity investments traded on organised markets have been valued by reference to market prices prevailing at balance date. For nontraded equity investments, the net fair value is an assessment by the Directors based on the underlying net assets, future maintainable earnings and any special circumstances pertaining to a particular investment (refer to Note 10. 'Investments Accounted for Using the Equity Method' and Note 12. 'Other Financial Assets').

All assets and liabilities recognised in the balance sheet, whether they are carried at cost or at fair value, are recognised at amounts that represent a reasonable approximation of fair value.

Off Balance Sheet Financial Instruments

The gross liabilities relating to forward foreign exchange contracts are not recognised on the balance sheets at 30 June 2007. The balances relating to these contracts are included in Other Financial Assets and Other Financial Liabilities (refer to Note 12. 'Other Financial Assets' and Note 20. 'Other Financial Liabilities') and are held at fair value. They represent the net unrealised gain or loss resulting from converting the forward foreign exchange contracts to forward rates at balance date.

The net fair value of financial assets or financial liabilities arising from interest rate swap agreements has been determined as the marked to market value.

Lend Lease Corporation and some of its consolidated entities have potential financial liabilities, which may arise from certain contingencies disclosed in Note 27. 'Contingent Liabilities'.

	Consolidated				Consolidated
	Interest			Share of Profit After Tax	Book Value
	June 2007	June 2006	June 2007	June 2006	June 2007	June 2006
	%	%	A\$m	A\$m	A\$m	A\$m
29. Interest in Joint Venture Operations
Project Management, Construction and PFIs
Manukau Wastewater Services (NZ)	20.0	20.0		0.9	12.8	12.8
Seaview Project Limited	50.0	50.0			2.2	4.0
			–	0.9	15.0	16.8

	June 2007 A\$m	Consolidated June 2006 A\$m
Included in the assets and liabilities within these consolidated financial statements are the following items which represent Lend Lease's interest in the assets and liabilities employed in joint venture operations:
Cash	0.3	0.9
Receivables	9.6	16.2
Inventories – properties held for sale	5.1
Total assets	15.0	17.1
Payable and borrowings		0.3
Total liabilities	–	0.3
Net assets	15.0	16.8

	Country of Incorporation	Foreign Country of Business Operation	Year End 30 June 2007 Ownership Interest %	Year End 30 June 2006 Ownership Interest %
30. Consolidated Entities
a. Investments in Consolidated Entities The material consolidated entities of the Group are:
Parent Entity Lend Lease Corporation Limited	Australia
Project Management, Construction and PFIs
Australia
Bovis Lend Lease Pty Limited	Australia		100	100
International Bovis Lend Lease Holdings Limited Bovis Lend Lease Limited Bovis Lend Lease Overseas Holdings Limited Bovis Lend Lease Group Limited Bovis Lend Lease Investments Limited (Jersey) Bovis Lend Lease Holdings, Inc. Bovis Lend Lease, Inc. Bovis Lend Lease LMB, Inc.	UK UK UK UK UK USA USA USA	UK UK UK UK UK USA USA USA	100 100 100 100 100 100 100 100	100 100 100 100 100 100 100 100
Retail and Communities
Australia ComLand Limited Delfin GC Pty Limited Delfin Lend Lease Limited Lend Lease Development Pty Limited	Australia Australia Australia Australia		100 100 100 100	100 100 100 100
International Blueco Limited Lend Lease Europe Finance plc Lend Lease Europe Holdings Limited Lend Lease Europe Limited Lend Lease Global Investments plc The Beaufort Homes Development Group Limited Crosby Lend Lease Group Limited The Crosby Group plc Actus Lend Lease, LLC LL Capital and Real Estate Services, Inc	UK UK UK UK UK UK UK UK USA USA	UK UK UK UK UK UK UK UK USA USA	100 100 100 100 100 100 100 100 100 100	100 100 100 100 100 100 100 97 100 100
Investment Management
Australia Lend Lease Funds Management Limited (formerly GPT Management Limited) Lend Lease Real Estate Investments Limited	Australia Australia		100 100	100 100
International Lend Lease Real Estate Investments Pte Limited Lend Lease (US) Holdings, Inc. Lend Lease (US), Inc. Lend Lease (US) Services, Inc.	Singapore USA USA USA	Singapore USA USA USA	100 100 100 100	100 100 100 100

	Ownership Interest Acquired %	Date Acquired	Consideration Paid A\$m	Contribution to Consolidated Revenue A\$m	Contribution to Consolidated Profit After Tax A\$m
30. Consolidated Entities continued
b. Acquisitions During the June 2006 financial year the consolidated entity purchased the following entities and has included the operating results of these entities in consolidated operating profit from the date of acquisition.
June 2006
Retail and Communities
International The Crosby Group plc1 First Base Adelaide Wharf Limited2	97 45	8 Jul 05 6 Dec 05	618.9	503.4	30.6
Investment Management
International Chelmsford Meadows Limited Partnership3 Chelmsford Meadows GP Limited	75 75	20 Mar 06 20 Mar 06	142.8	2.0	1.4

The identifiable assets and liabilities of the acquisition are as follows:

			Consolidated
	June 2007 June 2006
	Acquiree's
	Carrying	Total Fair Value	Acquiree's	Total Fair Value
	Value A\$m	on Acquisition A\$m	Carrying Value A\$m	on Acquisition A\$m
Acquisition of Consolidated Entities
Acquisition Cost
Cash paid for acquisition				754.9
Cash paid for acquisition costs				6.8
Total acquisition cost		–		761.7
Cash consideration				761.7
Overdraft				0.4
Net outflow of cash		–		762.1
Net Assets of Entities Acquired
Cash and cash equivalents			(0.4)	(0.4)
Inventories			504.5	579.5
Receivables			12.4	12.4
Other investments			5.6	5.6
Investment properties			190.3	190.3
Property, plant and equipment			14.1	14.1
Deferred tax assets			0.3	0.3
Deferred tax liabilities				(22.5)
Payables and borrowings			(97.0)	(97.0)
Provisions			(16.0)	(16.0)
Other non interest bearing liabilities			(30.1)	(30.1)
Minority interest			(47.5)	(47.5)
Net assets acquired	–	–	536.2	588.7
Goodwill on acquisition				173.0
Total acquisition cost		–		761.7

Footnotes on following page.

30. Consolidated Entities continued

b. Acquisitions continued

Goodwill on acquisition at 30 June 2006 represents the final goodwill recognised from the acquisition of the Crosby Group following the finalisation of the Crosby Group completion accounts as at the date of acquisition. The goodwill recognised on the acquisition was attributable to the skills and experience of the management team and the track record of the business. No other intangibles that had a value were identified on acquisition.

1 The Crosby Group plc is a UKbased urban regeneration specialist. The acquisition was 100% debt funded and represented 97% of the voting shares, with management coinvesting so as to own the remaining 3%. The revenue and profit of the Crosby Group since the beginning of the June 2006 financial year is not materially different to that since 8 July 2005, the date of acquisition. Subsequently, Lend Lease has acquired the remaining 3% interest in the Crosby Group plc.

2 First Base Adelaide Wharf Limited is involved in the development of Adelaide Wharf in Hackney, East London. Lend Lease is deemed to have control based on its share of the risk and rewards of the project.

3 Chelmsford Meadows Limited Partnership owns the Meadows Centre in Chelmsford, Essex.

	Ownership Interest Disposed %	Date Disposed		Consideration Received A\$m
c. Disposals
June 2007 During the year, the consolidated entity disposed of its interest in the following entities. The operating results to that date have been included in consolidated operating profit.
Retail and Communities Playbill Venue Management Pty Limited RBD QLD Pty Ltd1	50 100	9 Oct 06 21 Dec 06		0.9 32.0
Investment Management Lend Lease Asian Retail Investment Fund	100	8 Jun 07
June 2006
Retail and Communities NS Management Services Pty Ltd The Chapelfield Partnership The Chapelfield GP Limited	100 100 100	28 Jun 06 5 Oct 05 5 Oct 05		2.0
	Consolidated June 2007 A\$m	June 2006 A\$m	June 2007 A\$m	Company June 2006 A\$m
Details of the disposals of consolidated entities are as follows:
Sale Proceeds Cash received Deferred proceeds Carrying amount on disposal Disposal costs	31.2 1.7 (10.3)	2.0 (0.1)
Profit on disposal	22.6	1.9	–	–
Carrying Value of Net Assets of Entities Disposed Cash and cash equivalents Receivables Other investments Other assets Payables and provisions Net assets disposed	4.5 1.2 84.6 11.2 (91.2)	25.8 (25.8)	–	–
Cash Flows Resulting from Sale	10.3	–
Cash consideration Disposal costs Cash disposed Net inflows of cash	31.2 (4.8)	2.0 (0.1) 1.9	–	–
	26.4

1 RBD QLD Pty Ltd held the Keperra Retirement Village and Hostel.

31. Segment Reporting

The segment results are discussed and analysed in the Management Discussion and Analysis of Financial Condition and Results of Operations (MD&A) included with this report.

Business Segment Summary

									Sha re o	f P rofi t of	Oth er U	nal loc d ate
							Seg	nt me	Inve stm ent	s A ed unt cco	Rev enu	Ot her es,	Gro up	Op ting era	Gro Op up	ting era	Gro Op up	ting era
	Seg	nt me	Oth er U	nal loc d ate	Gro up	Op ting era	Res ult	Bef ore	for Usi ng	the Eq uity	Inc om	nd e a	Pro fit/(	Los s)	Pro fit/(	Los s)	Pro fit/(	Los s)
	Rev enu	1, 2 e	Rev	1 enu e	Rev	enu e	Tax	1, 2, 3	Me	tho d	Exp	1 ens es	Bef ore	Ta x	Aft er T	4 ax	Aft er T	5 ax
	Jun e	Jun e	Jun e	Jun e	Jun e	Jun e	Jun e	Jun e	Jun e	Jun e	Jun e	Jun e	Jun e	Jun e	Jun e	Jun e	Jun e	Jun e
	200 7	200 6	200 7	200 6	200 7	200 6	200 7	200 6	200 7	200 6	200 7	200 6	200 7	200 6	200 7	200 6	200 7	200 6
	A\$ m	A\$ m	A\$ m	A\$ m	A\$ m	A\$ m	A\$ m	A\$ m	A\$ m	A\$ m	A\$ m	A\$ m	A\$ m	A\$ m	A\$ m	A\$ m	A\$ m	A\$ m
Se t g me n
Re ta i l a d n
Co i t ies mm un	1, 85 0.8	2, 38 2.1	6.2	2.8	1, 85 7.0	2, 38 4.9	19 1.1	20 7.0	38 .5	34 .7	28 .2	2.1	25 7.8	24 3.8	183 .4	174 .5	183 .4	16 7.5
Inv tm t es en
Ma t na g em en	165 .3	128 .6	5.7	6.2	17 1.0	134 .8	119 .2	129 .7	12 6.6	14 1.4	152 .6	3.2	39 8.4	27 4.3	31 6.6	190 .7	31 4.4	190 .5
Pro j t Ma t, ec na g em en
Co ion d P F Is tru t ns c an	12 160 .2 ,	9, 57 2.2	7.7	4.4	12 16 7.9 ,	9, 57 6.6	22 .8	165 .2	24 .5	10 .9	7.0	4.7	54 .3	180 .8	58 .1	134 .8	57 .6	134 .6
To ta l s t eg me n	14 17 6.3 ,	12 08 2.9 ,	19 .6	13 .4	14 19 5.9 ,	12 09 6.3 ,	33 3.1	50 1.9	18 9.6	18 7.0	18 7.8	10 .0	71 0.5	69 8.9	55 8.1	50 0.0	55 5.4	49 2.6
Un l loc d te a a			86 .0	30 .5	86 .0	30 .5					( 82 .5 )	( 12 6.2 )	( 82 .5 )	( 12 6.2 )	( 57 .9)	( 77 .4)	( 57 .9)	( 77 .4)
Gr To l ta ou p			10 5.6	43 .9	14 28 1.9 ,	12 12 6.8 ,					10 5.3	( ) 11 6.2	62 8.0	57 2.7	50 0.2	42 2.6	49 7.5	41 5.2

1 AASB 114 'Segment Reporting' does not permit certain items of revenue and expenses to be attributed to particular segments for the purposes of determining segment revenues and segment results. These include corporate expenses, interest and dividend revenue, proceeds on the sale of investments (unless the segment's operations are primarily of a financial nature) and income tax expenses. June 2007 includes A\$133.4 million unallocated income relating to the Group's investment in Lend Lease Global Properties, SICAF.

2 Segment revenues, expenses and results do not include intersegment transfers between business segments. Intersegment transfers are priced on an arm's length basis.

3 Includes A\$5.7 million reversal of impairment for Retail and Communities (June 2006 impairment losses: A\$6.0 million) in relation to Jacksons Landing. Refer to Note 4. 'Other Operating (Income) and Expenses'.

4 Represents Group profit/(loss) after tax including minority interests.

5 Represents profit/(loss) after tax attributable to members of Lend Lease Corporation Limited.

31. Segment Reporting continued

Business Segment Summary continued

			No n C ash	Ex pen ses
			Oth er t	han			Inve stm	ent s									Una	lloc d ate
	Dep rec	iatio nd n a	Dep rec	iatio nd n a	Seg	nt me	Acc ted oun	for Us ing	Una lloc	d ate	Tot	al	Acq uisi tion	of No n	Seg	nt me	Co	rate rpo	Tot	al
	Am orti	1 sat ion	Am orti	2 sat ion	Ass	3 ets	the Eq uity	Me tho d	Co rate rpo	3 As set s	Gro up	Ass ets	Cu t A rren	4 ts sse	Lia	3 bilit ies	Lia	3 bilit ies	Gro up	Lia bilit ies
	Jun e	Jun e	Jun e	Jun e	Jun e	Jun e	Jun e	Jun e	Jun e	Jun e	Jun e	Jun e	Jun e	Jun e	Jun e	Jun e	Jun e	Jun e	Jun e	Jun e
	200 7	200 6	200 7	200 6	200 7	200 6	200 7	200 6	200 7	200 6	200 7	200 6	200 7	200 6	200 7	200 6	200 7	200 6	200 7	200 6
	A\$ m	A\$ m	A\$ m	A\$ m	A\$ m	A\$ m	A\$ m	A\$ m	A\$ m	A\$ m	A\$ m	A\$ m	A\$ m	A\$ m	A\$ m	A\$ m	A\$ m	A\$ m	A\$ m	A\$ m
Se t gm en
Co Re ta i l a d i t ies n mm un	9.3	7.0	10 .0	76 .3	2, 39 6.7	2 32 2.0 ,	85 .8	13 7.3	114 .7	87 .9	2, 59 7.2	2, 54 7.2	26 .7	11 .2	58 2.2	74 3.6	26 4.3	21 6.0	84 6.5	95 9.6
Inv Ma tm t t es en na g em en	3.0	3.0	( 2.7 )	( 5.9 )	1, 65 5.3	1 56 9.9 ,	1 01 3.4 ,	84 3.2	11 .3	16 .1	2, 68 0.0	2, 42 9.2	0.1	0.2	42 6.0	28 8.5	23 5.4	178 .8	66 1.4	46 7.3
Pro j t Ma t, ec na g em en
Co ion d P F Is tru t ns c an	10 .0	11 .3	21 7.7	57 .3	3, 13 7.8	2 77 0.4 ,	40 .4	19 .3	14 1.4	144 .5	3, 31 9.6	2, 93 4.2	12 .3	13 .9	3, 14 6.7	2 50 7.9 ,	114 .3	22 1.9	3 26 1.0 2 ,	72 9.8 ,
To l s ta t eg me n	22 .3	21 .3	22 5.0	12 7.7	7 18 9.8 ,	6 66 2.3 ,	1 13 9.6 ,	99 9.8	26 7.4	24 8.5	8 59 6.8 ,	7, 91 0.6	39 .1	25 .3	4, 154 .9	3, 54 0.0	61 4.0	61 6.7	4 76 8.9 4 ,	15 6.7 ,
Un l loc d te a a									73 9.4	25 5.7	73 9.4	25 5.7					1, 32 4.3	99 8.3	1 32 4.3 ,	99 8.3
To l Gr ta ou p									1, 00 6.8	50 4.2	9 33 6.2 ,	8, 16 6.3					1, 93 8.3	1 61 5.0 ,	6 09 3.2 5 ,	15 5.0 ,

1 Represents segment amortisation and depreciation.

2 Non cash expense represents those non cash items included in the reconciliation of profit from ordinary activities after income tax to net cash provided by operating activities.

3 AASB 114 does not permit certain assets and liabilities to be attributed to particular segments for the purposes of determining segment assets and segment liabilities. These include income tax assets and liabilities, borrowings and liabilities related to assets that are the subject of finance lease liabilities.

4 The acquisition of segment assets that are expected to be used during later than one year. These assets represent capital expenditure and include assets acquired under finance leases but exclude investments accounted for using the equity method, investment properties and other financial assets.

31. Segment Reporting continued

Geographical Segment Summary

		Gro Op ting up era Seg Gro Op ting Gro Pro fit/( Los s) Pro fit/( Los s) Seg nt me up era up Rev Rev Bef Ta Aft er T Ass enu e enu e ore x ax				Acq uisi tion of nt me No n C nt A ets ts urre sse
	Jun e 2 007 A\$ m	Jun e 2 006 A\$ m	Jun e 2 007 A\$ m	Jun e 2 006 A\$ m	Jun e 2 007 A\$ m	Jun e 2 006 A\$ m	Jun e 2 007 A\$ m	Jun e 2 006 A\$ m	Jun e 2 007 A\$ m	Jun e 2 006 A\$ m	Jun e 2 007 A\$ m	Jun e 2 006 A\$ m
As ia Pa i f ic c	3, 20 3.4	2, 52 6.4	3, 20 9.8	2, 53 1.9	25 1.2	21 6.5	185 .1	140 .0	2, 19 7.6	2, 08 7.8	10 .3	9.6
Am ica er s	6, 70 9.2	01 6.6 5,	6, 70 9.3	01 6.6 5,	23 7.2	23 9.4	17 1.9	169 .7	1, 92 7.1	1, 65 4.1	8.0	6.5
Eu rop e	4, 26 3.7	4, 53 9.9	4, 27 6.8	4, 54 7.8	22 2.1	24 3.0	198 .4	182 .9	3, 06 5.1	2, 92 0.4	20 .8	9.2
To l s ta t eg me n	14 17 6.3 ,	12 08 2.9 ,	14 19 5.9 ,	12 09 6.3 ,	71 0.5	69 8.9	55 5.4	49 2.6	7, 18 9.8	6, 66 2.3	39 .1	25 .3
Un l loc te d c te a a orp ora			86 .0	30 .5	( ) 82 .5	( ) 12 6.2	( .9) 57	( .4) 77
To l Gr ta ou p			14 28 1.9 ,	12 12 6.8 ,	62 8.0	57 2.7	49 7.5	41 5.2

Business Segments

The consolidated entity comprises the following main business segments, based on the consolidated entity's management reporting system:

Retail and Communities

Retail relates to property development from concept through to design, planning, construction, financing, leasing, property management and the eventual sale. Communities relates to urban community development including military housing. This includes all aspects from acquisition, design, development and management to eventual sale.

Investment Management

Investment Management relates to the management of real estate investment funds and real estate associated debt on behalf of clients. This also includes all investments in real estate and other investments.

Project Management, Construction and PFIs

This business segment relates to project management, design services, construction management and engineering. In addition, this business segment is responsible for PFIs.

Unallocated Business Segments

Corporate

Corporate includes Group Treasury, amortisation and corporate administration services. All financing costs that are not directly related to real estate development projects or investments are reported in unallocated corporate.

Geographic Segments

The Group's businesses operate on a global basis. Segment revenue is based on the geographic location of customers and segment assets are based on the geographic location of the assets. The Group's business segments operate across the following regions: Asia Pacific, Americas and Europe.

32. Commitments1

	Consolidated			Company
	June 2007 June 2006		June 2007	June 2006
	A\$m	A\$m	A\$m	A\$m
a. Operating Lease Commitments Estimated aggregate amount of non cancellable operating lease expenditure agreed or contracted but not provided for in the financial statements:
Land and buildings – self occupied Plant and equipment	197.5 17.5	228.0 14.7		0.1
	215.0	242.7	–	0.1
At balance date commitments in relation to non cancellable operating leases are payable as follows:
Due within one year Due between one and five years Due later than five years	49.1 125.0 40.9	58.5 128.5 55.7		0.1
	215.0	242.7	–	0.1

The Group leases various land and buildings and plant and equipment under non cancellable operating leases. The leases have varying terms, escalation clauses and renewal rights. On renewal, the terms of the leases are renegotiated.

		Consolidated		Company
	June 2007	June 2006	June 2007	June 2006
	A\$m	A\$m	A\$m	A\$m
Finance Lease Commitments2 b.
At balance date commitments in relation to the finance leases are
payable as follows:
Due within one year	0.2	0.1
Due between one and five years	0.4	0.3
Due later than five years	197.9	200.4
Recognised as a liability	198.5	200.8	–	–
Lease liabilities provided for in the financial statements:
Current	0.2	0.1
Non Current	198.3	200.7
	198.5	200.8	–	–
c. Capital Expenditure
At balance date the aggregate amount of capital expenditure contracted
but not provided for in the financial statements:
Property, Plant and Equipment
Due within one year		1.0
		1.0
	–		–	–

1 The commitments outlined in this note do not include commitments relating to investments accounted for using the equity method (refer Note 10. 'Investments Accounted for Using the Equity Method').

2 Primarily relates to Bluewater lease liability. Finance charges, to be based on future variable interest rates, are excluded.

		Consolidated		Company
	June 2007 A\$m	June 2006 A\$m	June 2007 A\$m	June 2006 A\$m
32. Commitments continued
d. Investments
At balance date capital commitments existed in respect of interests in
partnerships, investments or joint ventures contracted but not provided for in
the financial statements:
Due within one year
PFIs	35.8	29.8
Actus Lend Lease – Military housing		7.9
Other	7.1	4.8
Due between one and five years
Warrington Limited Retail Partnership		27.4
PFIs		36.2
Actus Lend Lease – Military housing Lend Lease Real Estate Partners II	13.3	17.7 4.8
Other		10.4
Due later than five years
Lend Lease Overgate Partnership	1.1	4.3
Actus Lend Lease – Military housing	3.7	4.0
Other	1.5
	62.5	147.3	–	–
33. Notes to the Statements of Cash Flows
a. Reconciliation of Profit After Tax to Net Cash Provided by
Operating Activities
Profit After Tax (Including Minority Interest)	500.2	422.6	391.0	201.8
Amortisation and depreciation	25.9	24.9	0.3	0.3
Net gain on sale of investments and property, plant and equipment	(169.3)	(71.0)
Net unrealised foreign exchange (gain)/loss and currency hedging costs	(0.7)	(12.8)	(0.1)	0.2
Profit accounted for using the equity method Dividends/distributions from investments accounted for using the	(189.6)	(187.0)
equity method	104.2	56.5
Net bad and doubtful debts impairment loss net of provisions
(written back)/raised	(5.2)	2.1	(80.0)
Other	(2.4)	(8.2)	2.8	(5.6)
Net cash provided by operating activities before changes in assets
and liabilities	263.1	227.1	314.0	196.7
Changes in Assets and Liabilities Adjusted for Effects of
Purchase and Disposal of Subsidiaries and Operations During
the Financial Year
Increase in receivables	(579.7)	(469.9)	(35.0)	(36.0)
(Increase)/decrease in inventories Increase in other assets	(83.4) (11.6)	563.3 (59.0)
(Decrease)/increase in defined benefit plan assets/liabilities	(19.6)	(21.3)	(1.4)	1.7
Increase/(decrease) in payables	689.2	342.0	(8.3)	(34.0)
Increase/(decrease) in other liabilities	77.4	(36.5)	2.1	(2.0)
Increase in deferred tax items	61.4	144.0	6.5	0.6
(Increase)/decrease in current tax asset	(3.9)	(72.5)	31.1	(7.0)
(Decrease)/increase in other provisions	(39.4)	44.0	(65.5)	2.1
Decrease/(increase) in other intangibles	3.7	(0.9)
Net cash provided by operating activities	357.2	660.3	243.5	122.1

	Consolidated
		June 2007		June 2006
	Receipt	Expenditure	Receipt	Expenditure
	A\$m	A\$m	A\$m	A\$m
33. Notes to the Statements of Cash Flows continued
b. Supplementary Information
Property Development Receipts and Expenditure
Retail
Chapelfield, Norwich		(12.4)	532.0	(108.0)
Property Development
Darling Park, Sydney	4.3	(0.5)	116.1	(97.6)
Urban Communities, Australia	737.6	(578.4)	575.4	(667.2)
Urban Communities, UK	402.1	(344.8)	451.8	(254.7)
Other	25.5	(71.6)	29.4	(42.0)
	1,169.5	(1,007.7)	1,704.7	(1,169.5)

34. Employee Benefits

a. Lend Lease Employee Share Plans

Lend Lease has as a core value the concept of the 'partnering' of capital and labour. This concept has, over decades, been advanced in many practical ways at Lend Lease through philosophies such as employee ownership and profit sharing.

Currently employees own approximately 9.5% of the issued capital of Lend Lease.

In October 1988, shareholders approved an annual allotment of 0.5% of the issued capital of Lend Lease Corporation at 50 cents per share to be used for the benefit of Lend Lease Group employees. This programme was suspended by the Board in May 2003.

Australia: Employee Share Acquisition Plan (ESAP)

• − In accordance with the 1988 shareholder approval, ESAP was established in December 1988 for the purpose of employees acquiring shares in Lend Lease Corporation. This plan replaced previous employee ownership facilities in place over the previous decades.
• − ESAP is funded by Lend Lease subscriptions. Those subscriptions have been used to acquire shares in Lend Lease Corporation at market value on behalf of employees, who may be nominated as members of ESAP.
• − Employees may also be allocated shares by way of bonus arrangements on the basis of individual and departmental performance.
• − At balance date, approximately 1,934 employees (June 2006: 2,072) were eligible to participate in the plan.

US: Employee Share Plan

− The US Internal Revenue Service approved share plan arrangements previously in place were closed during the June 2005 financial year due to the change to Lend Lease making all profit share payments in cash.

UK/Europe/Asia: Employee Share Plan

• − Two employee share plans (the 'Plans') were established in 1998, being the UKbased Inland Revenue Approved Plan (the 'Approved Plan') and the European (Guernseybased) Restricted Share Plan (the 'Restricted Share Plan'). The Plans jointly are similar in operation to the Australiabased ESAP; however, the 1998 Approved Plan (closed in March 2002) was only available to UK employees.
• − In 2002 two new UKbased Inland Revenue approved Share Incentive Plans (SIP) were established for the acceptance of employee profit share contributions used to acquire Lend Lease Corporation shares for UKbased Lend Lease Group employees. These plans are currently not accepting new contributions due to the change to Lend Lease making all profit share payments in cash.
• − At balance date approximately 2,261 employees (June 2006: 2,220) were eligible to participate in the SIP, should it recommence accepting contributions.

34. Employee Benefits continued

a. Lend Lease Employee Share Plans continued

UK/Europe/Asia: Employee Share Plan continued

• − Shares in the Restricted Share Plan may be allocated to employees in the UK, Europe and Singapore based on individual and departmental performance. The Restricted Share Plan can acquire Lend Lease Corporation shares at market value on behalf of employees. The value of allocations to employees is ultimately based on a combination of the Lend Lease Corporation share price and the respective currencies and Australian dollar exchange rates.
• − At balance date, approximately 3,995 UK and European employees (June 2006: 3,664) were eligible to participate in the plan.

Eligibility

The rules for eligibility for particular plans are determined by reference to the regulatory, legal and tax rules of each country in which the Group operates.

Dividends and/or Voting Rights

Generally, employees in the various operating share plans are entitled to dividends and voting rights for allocated shares. The plans reflect this intention subject to regulatory, legal and tax constraints. Voting and dividend rights on any unallocated shares reside with the trustees of the relevant share plan trusts. The trustee may exercise these rights in accordance with any fiduciary or governance rules pertaining to the deed or trust laws in the legal/tax jurisdiction the trust operates within.

b. Lend Lease Employee Benefit Vehicles

In addition to the plans discussed in Note 34a., Lend Lease has over the years established a range of employee share ownership vehicles. The Lend Lease Retirement Benefit Fund (RBF) was established in 1984 with shareholder approval for the benefit of employees through the allotment at par value of 5.0 million Lend Lease Corporation shares. The balance of the assets of RBF at 30 June 2007 was 14.1 million Lend Lease shares (June 2006: 14.1 million Lend Lease shares). The fund was originally intended to provide excess superannuation benefits but this purpose has now become defunct due to changes in the law. For some years, earnings have been used to fund the programs of the Lend Lease Foundation. The Lend Lease shares in RBF are not available for allocation to employees other than in the event of a change of control of Lend Lease Corporation and, in accordance with the Trust Deed, the capital of the Trust is not available to Lend Lease Corporation. The RBF Trustees are independent of Lend Lease Corporation. In the event of a change of control, the RBF Trustees may distribute RBF funds to employees who cease to be employees during the 12 months after a change of control. The RBF Trustees have discretion as to how RBF funds are distributed following a change of control. Under AIFRS, RBF, while not legally controlled, is now required to be consolidated for accounting purposes and payments from it on a change of control are therefore now relevant to the Company's financial statements. Any payments that the RBF Trustees may make as a result of a change of control of Lend Lease Corporation are an obligation of RBF and not the Company. Any payments made will need to be funded by the Trust and therefore cannot exceed the value of the assets of RBF which was A\$284.6 million at 30 June 2007. However, as RBF is consolidated by the Company, this potential obligation is disclosed as a contingent liability. Further, given the timing and basis on which the Trust purchased its Lend Lease shares, it should be noted that any capital gains tax payable on the Lend Lease shares sold by the Trust as a result of a change of control (or otherwise) may be recorded from an accounting viewpoint as a tax expense of the consolidated entity.

In October 1985, the Lend Lease Employee Investment Trust (EIT) was established to enable employees to invest in the company. At that time, shareholders approved a one for ten renounceable rights issue and the allotment at the same price of an equivalent number of shares to EIT. EIT acquired these shares with debt funds raised through an external financier. Over the years, strong growth in Lend Lease dividend flows enabled EIT to pay down its external debt. In the following years, EIT acquired shares through onmarket purchases, participation in bonus issues and dividend reinvestment. Between 1984 and 1988 it also accumulated shares through the prior shareholders' resolution to allot 0.5% of issued capital to employee benefit vehicles. At 30 June 2007, there were 11.7 million (June 2006: 11.7 million) Lend Lease Corporation shares held by EIT of which 11.3 million shares were available for allocation to employees. For some time the Trustee of EIT has directed surplus dividends to help fund the Lend Lease Foundation's programs. In accordance with the Trust Deed, the capital of the Trust is not available to Lend Lease Corporation. As with RBF, AIFRS now requires consolidation of EIT for accounting purposes, regardless of the control of EIT by independent trustees. Payments from EIT have therefore become relevant to the Company's financial statements. On a change of control, the EIT Trustees may (but are not required to) terminate the trust and distribute allocated proceeds to employees and unallocated proceeds to the Lend Lease Superannuation Fund or to RBF. Any payments are an obligation of EIT and not the Company, and cannot exceed the assets of the trust (A\$225.3 million as at 30 June 2007). No contingency is recorded in these financial statements as the potential for such payments is remote, with any termination of EIT in such circumstances, and any subsequent distribution to other funds, entirely at the discretion of the EIT Trustees. Given the timing and basis on which the Trust purchased its Lend Lease shares, it should be noted that any capital gains tax payable on the Lend Lease shares sold by EIT as a result of a change of control (or otherwise) may be recognised from an accounting viewpoint as a tax expense of the consolidated entity.

34. Employee Benefits continued

b. Lend Lease Employee Benefit Vehicles continued

The consolidation of EIT and RBF under AIFRS creates certain anomalies for the Group's reported profit or loss where distributions from those trusts are used to fund employee programs under the Lend Lease Foundation (as they have been doing for some time). In particular, the consolidation requires dividends on Lend Lease shares which are distributed by the trusts to the Foundation be eliminated from the income of the Group. On 30 June 1992, Lend Lease agreed that if it were to receive distributions from EIT or RBF, it would apply an equal amount for Foundation programs (see below). The effect is that the Group immediately accrues for this obligation, but is now no longer entitled to recognise the matching income that creates the obligation. This results in a net expense to the income statement, which does not reflect the cash position. In the year to 30 June 2007, the net impact was an after tax expense of A\$10.1 million. In future years, it would be anticipated that there would be similar impacts on reported profits.

In 1988, Lend Lease established ESAP as an employee reward scheme. ESAP was established to prospectively replace EIT as the principal employee share plan of the Group in Australia. Other similar plans have subsequently been established (refer to earlier share plan comments). The details of the employee share plans, including ESAP, are set out in Note 34a.

Access to the Lend Lease Foundation is another important employee benefit, providing learning, personal development, community and other activities. Established in 1983, the Foundation's programs are administered by employee representatives.

c. Share Based Payments

Long Term Incentives (LTIs)

The current LTIs of Lend Lease were introduced and approved by the Board in 1999 and updated and extended for awards from 2001 onwards. The objectives of the LTIs are essentially twofold:

• − Align executives with the long term interests of Lend Lease and its shareholders;
• − Attract and retain high calibre executives by providing competitive rewards that relate to the performance of both the individual executive and the Lend Lease share price.

LTI grants are normally made in July each year and are based on competitive remuneration practice. LTIs are settled in cash or Lend Lease shares, with settlement occurring upon vesting if performance hurdles are met. Grants depend on personal contribution and potential, and are designed to retain and motivate high performing and key executives. The LTIs are in the form of an Australian dollar figure 'grant', which is notionally 'invested' in performance shares (PS) over time to deliver value depending on:

• − Whether the executive remains with the Group if the executive resigns before vesting, the grant will lapse;
• − The performance of the Group.

The Personnel and Organisation Committee approved one change to the rules of the LTI for the 2005 awards onwards. The rules now allow that in the event of a change in control of Lend Lease, all awards will vest upon change in control, to the extent that performance conditions have been met. Senior executives would then be entitled to a pro rata settlement, with the Board having discretion to allow the entitlement to exceed this pro rata amount.

Arrangements for LTIs granted in the Financial Years 2005 and 2006

For awards granted on 1 July 2004 and 1 July 2005, the performance hurdles are based on the Total Shareholder Return (TSR) of Lend Lease against a basket of international comparator companies. Under these awards, the performance hurdle required TSR to achieve at least median against several comparator companies of Lend Lease.

Arrangements for the June 2007 Financial Year – Additional Performance Hurdles

For the June 2007 financial year awards, the Personnel and Organisation Committee set new performance hurdles to align interests between the participant and shareholders and for consistency with a new Short Term Incentive structure.

For awards granted in 2006 onwards the performance hurdle is based on two equal measures: long term profitability as measured by Earnings Per Share (EPS) and external TSR compared to the TSR of the individual ASX100 listed companies as at the commencement of the performance period. The change in the TSR comparator group better reflects those companies against which Lend Lease competes for capital. The performance measures are:

• − TSR measured against the ASX100 companies (with 50% vesting at median performance, rising proportionately to 100% on reaching top quartile performance);
• − EPS on operating profit after tax reported in the financial statements adjusted for treasury shares (with 100% vesting if a minimum compound annual growth rate of 10% is achieved over the three year performance period).

Each of the two performance hurdles is measured and can vest independently. The executive must remain with the Company until vesting date for the award to vest.

For the 2006 award, the Personnel and Organisation Committee intends that these awards will vest in Company shares rather than cash, other than for executives specifically identified by the Personnel and Organisation Committee or in circumstances where share settlement is not practicable.

34. Employee Benefits continued

c. Share Based Payments continued

Retention Awards

When the Board believes an employee is an outstanding performer and Lend Lease and its shareholders will gain from incentivising him or her to remain with Lend Lease, a retention award may be made. As an incentive to remain with the Company requires a degree of certainty of value delivered to the individual at the end of the retention period, performance conditions are not generally applied to the ultimate payment of such an award. Refer to the table below for details of the vesting conditions of retention awards.

Summary of LTIs and Retention Awards

		2007
				Number of Lend Lease Corporation Share Equivalents
Grant Date	Vesting Date	Opening Balance	Granted	Lapsed	Exercised	Closing Balance
LTIs
Dec 2002	Jun 2007	210,604		(94,772)	(115,832)
Jul 2004	Jun 2007	891,028		(439,121)	(451,907)
Jul 2005	Jun 2008	1,202,250		(153,467)	(9,015)	1,039,768
Jul 2006	Jun 2009		1,277,059	(57,763)	(1,775)	1,217,521
Total LTIs		2,303,882	1,277,059	(745,123)	(578,529)	2,257,289
Retention Awards
Dec 2002	Dec 2007	87,357			(56,038)	31,3191
Jul 2005	Jul 2008	110,664				110,6642
Sep 2005	Jun 2007	197,218			(197,218)	2
Sep 2005	Jul 2008	197,218				197,2182
Oct 2006	Sep 2007		84,407			84,4073
Oct 2006	Sep 2008		84,407			84,4073
Oct 2006	Sep 2009		84,408			84,4083
Oct 2006	Sep 2010		84,408			84,4083
Total retention awards		592,457	337,630	–	(253,256)	676,831
Total		2,896,339	1,614,689	(745,123)	(831,785)	2,934,120

		2006
				Number of Lend Lease Corporation Share Equivalents
		Opening
Grant Date	Vesting Date	Balance	Granted	Lapsed	Exercised	Closing Balance
LTIs
Dec 2002	Jun 2006	210,604		(210,604)
Dec 2002	Jun 2007	210,604				210,604
Jul 2003	Jun 2006	2,611,153		(2,380,700)	(230,453)
Jul 2004	Jun 2007	1,266,376		(123,270)	(252,078)	891,028
Jul 2005	Jun 2008		1,225,946	(20,532)	(3,164)	1,202,250
Total LTIs		4,298,737	1,225,946	(2,735,106)	(485,695)	2,303,882
Retention Awards
Dec 2002	Dec 2007	143,395			(56,038)	87,357
Jul 2005	Jul 2008	110,664				110,664
Sep 2005	Jun 2007	197,218				197,218
Sep 2005	Jul 2008	197,218				197,218
Total retention awards		648,495	–	–	(56,038)	592,457
Total		4,947,232	1,225,946	(2,735,106)	(541,733)	2,896,339

1 Award settled in cash and vests on a progressive monthly basis over the award service life.

2 Award settled in cash or shares at the option of the executive and is dependent upon service to vesting date. A 'good leaver', that is, an executive who leaves employment by reason of death, total and permanent disability, redundancy or other reason as determined by the Personnel and Organisation Committee, will be entitled to pro rata vesting.

3 Award settled in shares and is dependent upon service to vesting date. A good leaver will be entitled to pro rata vesting.

34. Employee Benefits continued

c. Share Based Payments continued

Summary of the LTIs and Retention Awards continued

Amounts Recognised in the Financial Statements

LTIs are valued using a MonteCarlo simulation methodology where the share price can be projected based on the assumptions underlying the BlackScholes formula. Retention awards are valued by discounting the share price by the expected dividends assumed to be paid from the valuation date until the vesting date (if applicable). The model inputs include the Lend Lease share price, a risk free interest rate, expected volatility and dividend yield.

Details of the amounts recognised in the financial statements and the fair values relating to LTIs and retention awards for the years ended 30 June 2007 and 2006 are set out below.

					2007
		Fair Value at Grant	Fair Value	Award Value	Expense	Liability at
		Date	June 2007	at June 2007	2007	June 2007
Grant Date	Vesting Date	A\$	A\$	A\$	A\$	A\$
LTIs
Dec 2002	Jun 2007	838,204	10.29	2,167,115	2,093,326	2,167,115
Jul 2004	Jun 2007	6,990,396	10.29	8,341,589	5,122,007	8,341,589
Jul 2005	Jun 2008	8,066,725	8.91	9,264,333	4,148,427	6,176,222
Jul 2006	Jun 2009	13,153,708	14.81	18,031,486	6,010,495	6,010,495
Total LTIs		29,049,033		37,804,523	17,374,255	22,695,421
Retention Awards
Dec 2002	Dec 2007	2,486,782	18.20	5,091,050	2,038,611	4,666,795
Jul 2005	Jul 2008	1,453,834	18.54	2,051,711	859,938	1,346,014
Sep 2005	Jun 2007	2,630,888	18.54	3,656,422	2,404,923	3,656,422
Sep 2005	Jul 2008	2,630,888	18.54	3,656,422	1,553,664	2,362,176
Oct 2006	Sep 2007	1,374,992	18.54	1,564,906	1,115,636	1
Oct 2006	Sep 2008	1,374,992	18.54	1,564,906	532,318	1
Oct 2006	Sep 2009	1,375,008	18.54	1,564,924	349,884	1
Oct 2006	Sep 2010	1,375,008	18.54	1,564,924	260,578	1
Total retention awards		14,702,392		20,715,265	9,115,552	12,031,407
Total		43,751,425		58,519,788	26,489,807	34,726,828

1 Awards to be settled in shares and accordingly the obligation recognised in equity compensation reserve.

During the financial year ended 30 June 2007, the total expense recognised in the income statement in relation to LTIs and retention awards is A\$26.5million. A\$2.3 million of this total expense arises from equity settled share based payment awards.

					2006
		Fair Value at Grant	Fair Value	Award Value	Expense	Liability at
		Date	June 2006	at June 2006	2006	June 2006
Grant Date	Vesting Date	A\$	A\$	A\$	A\$	A\$
LTIs
Dec 2002	Jun 2006	833,992			(93,267)
Dec 2002	Jun 2007	838,204	0.44	92,666	(131,745)	73,789
Jul 2003	Jun 2006	9,165,147			(11,332,404)
Jul 2004	Jun 2007	6,990,396	5.42	4,829,372	944,490	3,219,581
Jul 2005	Jun 2008	8,066,725	5.06	6,203,287	2,027,795	2,027,795
Total LTIs		25,894,464		11,125,325	(8,585,131)	5,321,165
Retention Awards
Dec 2002	Dec 2007	2,486,782	13.11	3,667,234	950,236	2,628,184
Jul 2005	Jul 2008	1,453,834	13.99	1,434,205	486,076	486,076
Sep 2005	Jun 2007	2,630,888	13.99	2,759,080	1,251,499	1,251,499
Sep 2005	Jul 2008	2,630,888	13.99	2,759,080	808,512	808,512
Total retention awards		9,202,392		10,619,599	3,496,323	5,174,271
Total		35,096,856		21,744,924	(5,088,808)	10,495,436

During the financial year ended 30 June 2006, a net A\$5.1 million credit was recognised in the income statement in relation to LTIs and retention awards. The credit to the income statement was due to an accrual release as the LTI granted in July 2004 did not vest. There were no equity settled share based payment awards.

35. Key Management Personnel Disclosures

Key Management Personnel compensation details are set out in Section 3 of the Directors' Report.

Equity Holdings and Transactions

Shareholdings Financial Year Ended 30 June 2007

		Shares Held at	Shares	Other Net	Shares Held at
	Year	Beginning of Financial Year	Received During the Year1,2	Change to Shares	End of Financial Year
Non Executive Directors
D. Crawford	2007	23,008	5,114		28,122
	2006	17,468	5,540		23,008
P. Colebatch – Appointed 1 December 2005	2007	2,121	1,568		3,689
	2006		121	2,000	2,121
G. Edington	2007	22,866	1,655		24,521
P. Goldmark	2006 2007	21,373 11,798	1,493 1,703		22,866 13,501
	2006	9,998	1,800		11,798
J. Hill – Appointed 8 May 2006	2007		1,031	2,000	3,031
	2006
R. Longes – Resigned 17 November 2005	2007
	2006	57,304	1,280	(58,584)3
D. Ryan	2007	11,857	1,783		13,640
	2006	10,096	1,761		11,857
Executive Directors
G. Clarke	2007	1,000			1,000
	2006	1,000			1,000
R. Taylor	2007	102,425	1,920		104,345
	2006	91,845	10,580		102,425
A. Chamberlain – Resigned 30 September 2005	2007
	2006	1,000		(1,000)3
Executives
S. McCann	2007	458	875		1,333
	2006		458		458
Former
R. Johnston	2007	58,933			58,933
	2006	58,933			58,933
R. Burrows	2007	37,972	955		38,927
	2006	36,231	1,741		37,972
R. Lourey4	2007
	2006	64	409		473
J. Daniel4	2007
	2006	230			230
P. Crewes – Resigned 30 June 20064	2007
	2006	41,020	1,242	(42,262)3
R. Fehring4	2007
	2006	20,149	1,164	(12,500)	8,813
M. Bellaman4	2007
P Koziol4	2006
	2007 2006
N. Hugill4	2007
	2006
J. Spanswick4	2007
	2006	1,130			1,130
P. Marchetto4	2007
	2006	5,555			5,555
Total	2007	272,438	16,604	2,000	291,042
Total	2006	373,396	27,589	(112,346)	288,639

Footnotes on following page.

Lend Lease Corporation Annual Consolidated Financial Report 2007 66

35. Key Management Personnel Disclosures continued

Equity Holdings and Transactions continued

Shareholdings Financial Year Ended 30 June 2007 continued

Footnotes from previous page.

• 1 Non Executive Directors' share allocations relating to retirement benefits are made in arrears on 1 January each year. Refer to Section 3b. of the Directors' Report for further details.
• 2 For Executive Directors and executives, relates to share entitlements under employee benefit vehicles.
• 3 Balance at retirement/resignation.
• 4 From 1 July 2006 the executive ceased to be key management personnel.

Key Management Personnel Compensation

The key management personnel compensation included in 'Employee Benefit Expenses' (refer to Note 4. 'Other Operating (Income) and Expenses') are as follows:

	Consolidated			Company
	June 2007 A\$000s	June 2006 A\$000s	June 2007 A\$000s	June 2006 A\$000s
Short term employee benefits	13,010	24,676	9,512	12,649
Post employment benefits	3,937	5,000	3,442	2,728
Share based payments	12,306	2,033	8,899	1,568
Other long term benefits	608	785	608
	29,861	32,494	22,461	16,945

Loans to Key Management Personnel

No loans were made to key management personnel or other related parties during the current year or prior year.

Other Transactions with Key Management Personnel

From time to time Directors and executives of the Company or its consolidated entities, or parties related to them, may purchase goods from the consolidated entity. These purchases are on terms and conditions no more favourable than those entered into by unrelated customers and are trivial or domestic in nature.

36. Non Director Related Party Information

Ownership Interests in Related Parties and Transactions with Consolidated Entities

Interests held in consolidated entities and associated companies, joint ventures, partnerships and trusts by Lend Lease Corporation Limited, are set out in Notes 30, 10a, 10b, and 12 to the financial statements.

Lend Lease Corporation provides a wide range of corporate services to its consolidated entities, including administrative, advertising, accounting, employee services such as the administration of salaries and superannuation, finance, insurance, legal, public relations, company secretarial and treasury. Costs incurred in providing such services are recovered accordingly from the entities concerned.

Transactions that occurred during the financial year between entities in the Lend Lease consolidated Group were:

• − Provision of project management, design services, construction management and engineering services to development projects;
• − Provision of payroll, transaction and management services;
• − Receipt and payment of superannuation contributions;
• − Reimbursements of expenses made on behalf of subsidiaries;
• − Loan advances and repayments between subsidiaries;
• − Premium payments and receipts for the Group's insurance policies.

36. Non Director Related Party Information continued

Managed Funds

All transactions between managed property trusts and Lend Lease are determined at an arm's length commercial basis and are subject to independent assessment where appropriate and approval by an independent trustee or board.

Property Trusts and Funds

Lend Lease is the fund manager for several property trusts and funds. As fund manager, Lend Lease is responsible for all management activities arising from the trust and fund's ownership of properties. The manager is also responsible for implementing policies, monitoring the performance of each property, maximising returns for the trusts and funds and managing the liquid funds of the trusts and funds. For these services, Lend Lease is paid a fee in accordance with the respective deeds of the trusts and funds.

	Managed Funds
	June 2007	June 2006
	A\$m	A\$m
Services provided by Lend Lease Management of trusts Construction and development	94.1 2.2	79.9 48.0
Expense reimbursements to Lend Lease Administrative and property rental expenses	10.2	14.2

Services provided by Lend Lease are:

• − Investment management: strategic investment advice, total asset management and investment portfolio management;
• − Asset management: property management services, property portfolio advisory services, maintenance and insurances, strategic advice and management supervision services, administration, marketing and risk management services; and
• − Communities businesses: property capital works, design and construction services, development and refurbishment.

37. Events Subsequent to Balance Date

Sale of Units in Australian Prime Property Fund (APPF)

On 11 July 2007, Lend Lease sold a proportion of its interest in APPF Retail for A\$263.8 million. As at 30 June 2007, a cumulative gain of A\$32.6 million before tax was recognised in the fair value revaluation reserve relating to this interest.

Withdrawal of Australian Tax Office (ATO) appeal to Federal Court on Westpac Warrants Issue

On 10 August 2007 the ATO withdrew its appeal relating to the Federal Court's decision in December 2006 regarding Lend Lease's sale of Westpac shares.

Following the withdrawal of its appeal, the ATO will be required to repay to Lend Lease the balance of the payment Lend Lease made under the amended assessment issued in 2002, plus interest (refer to Note 16. 'Other Assets'). The repayment of the monies by the ATO has no impact on earnings.

Directors' Declaration

In the opinion of the Directors of Lend Lease Corporation Limited (the 'Company'):

• 1. The financial statements and notes set out on pages 1 to 68 and the remuneration disclosures contained in the Remuneration Report in the Directors' Report are in accordance with the Corporations Act 2001, including:
• a. Giving a true and fair view of the financial position of the Company and consolidated entity as at 30 June 2007 and of their performance, as represented by the results of their operations and cash flows for the financial year ended on that date; and
• b. Complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001.
• 1. The financial statements and notes also comply with International Financial Reporting Standards as disclosed in Note 1(a).
• 1. The remuneration disclosures contained in the Remuneration Report in Section 3 of the Directors' Report comply with Australian Accounting Standard AASB 124 'Related Party Disclosures'.
• 1. There are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.
• 1. The Directors have been given the declarations required by Section 295A of the Corporations Act 2001 from the Chief Executive Officer and Group Finance Director for the financial year ended 30 June 2007.

Sydney, 15 August 2007

Signed in accordance with a resolution of the Directors:

_____________________________ _____________________________

D A Crawford G A Clarke Chairman Managing Director

Lend Lease Corporation Limited

Concise Financial Report

30 June 2007

Table of Contents

Directors' Report 1
1. Governance 1 2. Operations 4 3. Remuneration Report 6 4. Other 24
Five Year Profile27
Concise Management's Discussion and Analysis of Financial Condition and Results of Operations (Concise MD&A) 28
Concise Financial Statements30
Income Statement 30 Balance Sheet 31 Statement of Changes in Equity 32 Statement of Cash Flows 34
Notes to the Concise Financial Statements35
1. Basis of Preparation of Concise Financial Report 35 2. Revenue 36 3. Other Income 36 4. Taxation 36 5. Dividends and Earnings Per Share 37 6. Segment Reporting 38 7. Key Management Personnel Disclosures 39 8. Events Subsequent to Balance Date 40
Directors' Declaration41

The Concise Financial Statements and specific disclosures and Concise Management's Discussion and Analysis of Financial Condition and Results of Operations (Concise MD&A) have been derived from the consolidated entity's full financial report for the financial year. Other information included in the concise financial report is consistent with the consolidated entity's full financial report. The concise financial report does not, and cannot be expected to provide as full an understanding of the financial performance, financial position and financing and investing activities of the consolidated entity as the full financial report.

A copy of Lend Lease Corporation Limited Annual Consolidated Financial Report 30 June 2007, including the Independent Auditors' Report, is available to all shareholders, and will be sent to shareholders without charge upon request.

The Annual Consolidated Financial Report 30 June 2007 can be requested by telephone (612) 9236 6065 and by Internet at http://www.lendlease.com.au

Directors' Report

The Directors present their Report together with the Annual Consolidated Financial Report of the consolidated entity, being the Company and its subsidiaries ('Lend Lease') for the financial year ended 30 June 2007 and the Auditors' Report thereon.

1. Governance

a. Board/Directors

The names, qualifications, experience and special responsibilities of each person holding the position of Director of the Company at the date of this Report are:

D A Crawford, Chairman (Non Executive)

Age 63

Mr Crawford joined the Board in July 2001 and was appointed Chairman in May 2003. He is a member of the Nomination Committee.

Experience and Qualifications

Previously Mr Crawford was National Chairman of the Australian firm of KPMG. He has extensive accounting and business experience having worked with many large corporations and governments. He holds a Bachelor of Commerce and Bachelor of Laws from the University of Melbourne. He is a Fellow of the Institute of Chartered Accountants.

Other Directorships and Positions

Mr Crawford is a Non Executive Director of BHP Billiton Limited (appointed May 1994), Foster's Group Limited (appointed August 2001) and Westpac Banking Corporation (appointed May 2002). He was formerly a Non Executive Director of National Foods Limited (appointed November 2001, resigned June 2005).

G A Clarke, Managing Director (Executive)

Age 49

Mr Clarke was appointed Managing Director and Chief Executive Officer in December 2002.

Experience and Qualifications

Mr Clarke brings more than 25 years experience in international business development and operations through career roles including Vice President, Cellular (Paris) for Nortel Communications; Chief Executive Mobile, C&W Mobile plc; and Chief Operating Officer and Chief Executive Officer, Cable & Wireless Communications plc. He holds a BA (Hons) Business Studies and an MBA.

Other Directorships and Positions

Mr Clarke was formerly a Non Executive Director of The British United Provident Association Limited (BUPA), the largest private health provider in the UK (appointed April 2001, resigned March 2007).

P M Colebatch (Non Executive)

Age 62

Mr Colebatch joined the Board in December 2005 and is Chairman of the Personnel and Organisation Committee and a member of the Risk Management and Audit Committee.

Experience and Qualifications

Mr Colebatch has a Bachelor of Science and Bachelor of Engineering from the University of Adelaide, a Master of Science from Massachusetts Institute of Technology and a Doctorate in Business Administration from Harvard University. He has held senior management positions in insurance and investment banking, and was formerly on the Executive Board of Swiss Reinsurance Company, Zurich. He was previously on the Executive Board of Credit Suisse Group, Zurich where he was Chief Financial Officer and subsequently Chief Executive Officer of Credit Suisse Asset Management.

Other Directorships and Positions

Mr Colebatch is a Non Executive Director of Insurance Australia Group Limited (appointed January 2007).

1. Governance continued

a. Board/Directors continued

G G Edington CBE (Non Executive)

Age 61

Mr Edington joined the Board in 1999 and is a member of the Risk Management and Audit Committee and the Sustainability Committee.

Experience and Qualifications

Qualified as a Chartered Surveyor, Mr Edington brings to the Board extensive UK and international experience in the property sector. Mr Edington was a Director of BAA plc and Chairman of BAA International. He joined BAA plc in 1988, became a member of the Board in 1991 and has been the Chairman of six BAA companies. He is a past President of the British Property Federation, was the Chairman of UK property company Greycoat Estates Limited and was a member of the Bank of England Property Forum. Mr Edington is Chairman of the Council of Trustees of the UK children's charity, NCH, and was awarded a CBE in the New Year's Honours List for 'services to children'.

Other Directorships and Positions

Nil.

P C Goldmark (Non Executive)

Age 66

Mr Goldmark joined the Board in 1999 and is Chairman of the Nomination Committee and a member of the Sustainability Committee.

Experience and Qualifications

Mr Goldmark is Director, Climate and Air Program at Environmental Defense, a USbased nonprofit environmental advocacy organisation. He was the Chairman and Chief Executive Officer of The International Herald Tribune in Paris between 1998 and 2003. Prior to this, he was for ten years the President and Chief Executive Officer of the Rockefeller Foundation in New York. He has held positions including Senior Vice President of the TimesMirror Corporation, Executive Director of the Port Authority of New York and New Jersey, and Director of the Budget for the State of New York. A writer and speaker on world affairs, Mr Goldmark graduated with a BA from Harvard College, Government Department, magna cum laude. He brings to Lend Lease his wide experience as a Chief Executive Officer and senior executive in the private and public sectors, both in the US and internationally.

Other Directorships and Positions

Nil.

J A Hill (Non Executive)

Age 61

Ms Hill joined the Board in May 2006. She is Chairman of the Sustainability Committee and a member of the Personnel and Organisation Committee.

Experience and Qualifications

Ms Hill has held a number of senior executive positions in the land development and housing construction industry in North America. She was formerly the Chairman, President and Chief Executive Officer of Costain Homes, Inc. (US) and Vice President and General Manager, Mobil Land (Georgia) Corporation. She has a Bachelor of Arts from the University of California at Los Angeles and a Master of Arts marketing and management from the University of Georgia.

Other Directorships and Positions

Ms Hill is a Non Executive Director of Wellpoint, Inc. (appointed March 1994). She was formerly a Non Executive Director of Resources Connection, Inc. (appointed January 2003, resigned December 2006).

D J Ryan AO (Non Executive)

Age 55

Mr Ryan was appointed a Director in December 2004. He is Chairman of the Risk Management and Audit Committee and a member of the Personnel and Organisation Committee.

Experience and Qualifications

Mr Ryan has previously held Managing Director positions in investment banking and industry, as well as being the Chairman or a Non Executive Director of a number of listed public companies. He has a Bachelor of Business from the University of Technology, Sydney and is a Fellow of CPA Australia and the Australian Institute of Company Directors.

Other Directorships and Positions

Mr Ryan is the Non Executive Chairman of Transurban Holdings Limited (appointed Director April 2003 and Chairman February 2007) and is a Non Executive Director of ABC Learning Centres Limited (appointed June 2003). He is also the Non Executive Chairman of Tooth & Co Limited (appointed Director September 1999 and Chairman January 2003) and was formerly a Non Executive Director of Virgin Blue Holdings Limited (appointed November 2003, resigned April 2005).

1. Governance continued

a. Board/Directors continued

R H Taylor (Executive)

Age 45

Mr Taylor joined the Board as an Executive Director in December 2004 and is a member of the Sustainability Committee.

Experience and Qualifications

Mr Taylor joined Lend Lease in 1985 as an engineer and held several positions in Australia and Asia before being appointed Managing Director of the Project Management and Construction business of Lend Lease in 1995. Following the acquisition of the Bovis Group in 1999 he was appointed Global Chief Executive Officer of the combined Bovis Lend Lease businesses based in London and in 2001 his responsibilities were expanded to include the development activities of Lend Lease. In 2003 he returned to Australia to take up the role of Chief Executive Officer Asia Pacific and in July 2005 was appointed Chief Executive Officer Retail and Communities. On 21 May 2007 he was appointed to the newly created role of Global Chief Operating Officer. Mr Taylor holds a Bachelor of Civil Engineering (Honours) from the University of Queensland.

Other Directorships and Positions

Nil.

b. Company Secretaries' Qualifications and Experience

W Hara

Mr Hara was appointed Company Secretary on 3 July 2007. He was General Counsel and Group Company Secretary of Patrick Corporation Limited prior to his appointment as Group General Counsel of Lend Lease in January 2007. Mr Hara has a Bachelor of Commerce and a Bachelor of Laws from the University of New South Wales and is a member of the Law Society of NSW.

S J Sharpe

Ms Sharpe was appointed Deputy Company Secretary in 1995 and Company Secretary in 1997. She has held a number of senior executive positions and subsidiary board directorships in the Lend Lease Group. She has a Bachelor of Business from the University of Technology, Sydney and is an Associate of the Institute of Chartered Accountants and a member of the Australian Institute of Company Directors.

c. Officers Who Were Previously Partners of the Audit Firm

Mr Crawford was a Partner and Australian National Chair of KPMG. He resigned from this position on 28 June 2001 prior to his appointment as a Director of the Company on 19 July 2001. KPMG or its predecessors was appointed as the Company's auditor at its first Annual General Meeting in 1958.

d. Directors' Meetings

During the financial year, 12 Board meetings were held. The Board recognises the essential role of committees in guiding the Company on specific issues. Committees address important corporate issues, calling on senior management and external advisers prior to making a final decision or making a recommendation to the full Board.

There are four permanent committees of the Board:

Nomination Committee

The Nomination Committee consists entirely of Non Executive Directors. This Committee assists the Board by considering nominations to the Board by ensuring that there is an appropriate mix of expertise, skills and experience on the Board. During the financial year 1 July 2006 to 30 June 2007, all meetings of the Nomination Committee were held in conjunction with Board meetings.

Personnel and Organisation Committee

The Personnel and Organisation Committee consists entirely of Non Executive Directors. The Committee's agenda reflects the importance of human capital to the Group's strategic and business planning and it assists the Board in ensuring that appropriate policies are in place for people management and remuneration across Lend Lease businesses worldwide. During the financial year 1 July 2006 to 30 June 2007, four meetings of the Personnel and Organisation Committee were held.

Risk Management and Audit Committee

The Risk Management and Audit Committee consists entirely of Non Executive Directors. This Committee assists the Board by reviewing the risk management and compliance systems in Lend Lease businesses worldwide and by ensuring that assets are protected against financial loss, legal and regulatory obligations are met and proper accounting and auditing practices are maintained. During the financial year 1 July 2006 to 30 June 2007, four meetings of the Risk Management and Audit Committee were held.

Sustainability Committee

The Board established a Sustainability Committee during the year consisting of a majority of Non Executive Directors. The Committee assists the Board in monitoring the decisions and actions of management in achieving the aspiration of Lend Lease to be a sustainable organisation. During the financial year 1 July 2006 to 30 June 2007, two meetings of the Sustainability Committee were held.

1. Governance continued

d. Directors' Meetings continued

Attendance at Meetings of Directors 1 July 2006 to 30 June 2007

		Board Meetings		Risk Management and Audit Committee Meetings		Personnel and Organisation Committee Meetings		Sustainability		Other2
Director	Held1	Attended	Held1	Attended	Held1	Attended	Held1	Attended	Held1	Attended
D Crawford G Clarke P Colebatch G Edington P Goldmark J Hill D Ryan	12 12 12 12 12 12 12	12 12 12 12 12 11 12	4 4 4	4 4 4	3 2 2 2 2	3 2 2 2 2	2 2 2	2 2 2	3 3 2 1	3 3 2 1
R Taylor	12	12					2	2	2	2

1 Reflects the number of meetings held during the time the Director held office on the Committee during the year.

2 Committees constituted to address specific issues.

In addition, as required, matters were dealt with by circular resolution and ratified at the next meeting of the Board or appropriate committee.

e. Interest in Capital

The interest of each of the Directors in the issued shares of the Company at 15 August 2007 (16 August 2006) is set out below.

		Shares			Shares
	Shares	Held		Shares	Held
	Held	Beneficially/		Held	Beneficially/
	Directly	Indirectly	Total	Directly	Indirectly	Total
Director	2007	20071	2007	2006	20061	2006
D Crawford	4,395	23,727	28,122	4,395	18,613	23,008
G Clarke	1,000		1,000	1,000		1,000
P Colebatch	2,000	1,689	3,689	2,000	121	2,121
G Edington	15,000	9,521	24,521	15,000	7,866	22,866
P Goldmark	3,000	10,501	13,501	3,000	8,798	11,798
J Hill	2,000	1,031	3,031	2,000		2,000
D Ryan	10,000	3,640	13,640	10,000	1,857	11,857
R Taylor	9,760	94,737	104,497	7,899	94,526	102,425

1 Includes shares beneficially held by Non Executive Directors in the Retirement Plan.

2. Operations

a. Principal Activities

The Group's lines of business are focused on three geographic regions: Asia Pacific, Americas and Europe.

• − The Retail business comprises retail property management, asset management and development in Australia, Singapore and the United Kingdom (UK);
• − The Communities business is involved in the development of large scale urban regeneration and greenfield development projects in Australia, the United States of America (USA) and the UK. This business line includes privatisation services in the USA;
• − Investment Management provides real estate investment management services in Asia Pacific and the UK. Investment Management includes the Group's ownership interests in property investments in Asia Pacific, the UK and the USA. Ownership interests are held directly or indirectly through investments in Lend Lease managed funds;
• − Project Management, Construction and Private Finance Initiatives (PFIs) provides construction, project management and design services across all regions through Bovis Lend Lease and includes the PFI business in Europe.

2. Operations continued

b. Review and Results of Operations

A full review of operations is included in the Management Discussion and Analysis of Financial Condition and Results of Operations (MD&A) section of the Annual Consolidated Financial Report.

c. Dividends

The 2006 final dividend of A\$123.9 million (31 cents per share, fully franked) referred to in the Directors' Report dated 16 August 2006 was paid on 13 September 2006.

Details of dividends in respect of the current year are as follows:

	A\$m
Interim dividend of 35 cents per share (50% franked) paid on 27 March 2007	140.0
Final dividend of 42 cents per share (50% franked) declared by Directors to be paid on 12 September 2007	168.5
	308.5

d. Significant Changes in State of Affairs

Lend Lease acquired the remaining 3% of voting shares in The Crosby Group plc (a UKbased urban regeneration specialist) during the year, following its acquisition of 97% of The Crosby Group plc during the previous year.

During the prior year, Lend Lease acquired the final 12.5% minority stake in Actus Lend Lease and sold businesses in the real estate investment market in the USA.

e. Events Subsequent to Balance Date

No matters or circumstances have arisen since the end of the financial year that have significantly affected or may significantly affect the operations of Lend Lease, the results of those operations or state of affairs of Lend Lease in subsequent financial years other than the following:

Sale of Units in Australian Prime Property Fund (APPF)

On 11 July 2007, Lend Lease sold a proportion of its interest in APPF Retail for A\$263.8 million. As at 30 June 2007, a cumulative gain of A\$32.6 million before tax was recognised in the fair value revaluation reserve relating to this interest.

Withdrawal of Australian Tax Office (ATO) appeal to Federal Court on Westpac Warrants Issue

On 10 August 2007 the ATO withdrew its appeal relating to the Federal Court's decision in December 2006 regarding Lend Lease's sale of Westpac shares.

Following the withdrawal of its appeal, the ATO will be required to repay to Lend Lease the balance of the payment Lend Lease made under the amended assessment issued in 2002, plus interest. The repayment of the monies by the ATO has no impact on earnings.

f. Likely Developments

Details of likely developments in the operations of Lend Lease in subsequent financial years are contained in the reports from the Chairman and Managing Director in the Annual Report. In the opinion of the Directors, disclosure of any further information would be likely to result in unreasonable prejudice to the Group.

g. Environmental Regulation

Lend Lease is subject to many environmental regulations associated with real estate development, project and construction management and asset management. These regulations typically relate to emissions to air and water, waste management and protection of biodiversity.

Lend Lease businesses report quarterly on environmental regulation compliance matters, including breaches and legal or potential legal action.

The Sustainability Committee receives reports on a quarterly basis regarding any significant environmental risks and non conformance with the Environment Policy of Lend Lease. The Directors are not aware of any material non compliance issues during the period covered by this Report.

Further details are contained in the Sustainability section of the Annual Report.

3. Remuneration Report

The information provided under headings 3a. to 3f. includes remuneration disclosures that are required under Accounting Standard AASB 124 'Related Party Disclosures'. These disclosures have been transferred from the Consolidated Financial Statements and have been audited. The term 'remuneration' has been used in the Remuneration Report. This term has the same meaning as the alternative term 'compensation', as defined in AASB 124.

a. Details of Key Management Personnel and Other Executives – Audited

Key Management Personnel

Key management personnel have authority and responsibility for planning, directing and controlling the activities of the Company and the consolidated entity, including Directors of the Company and executives.

The key management personnel of Lend Lease are the 'Executive Office', consisting of the Executive Directors, together with the Group Finance Director and Chief Executive Officer Investment Management. The former Chief Executive Officer Project Management, Construction and PFI and former Chief Financial Officer are also regarded as key management personnel.

Directors

Non Executive Directors

D Crawford P Colebatch G Edington P Goldmark J Hill D Ryan	Chairman
Executive Directors	Managing Director and Chief Executive Officer
G Clarke	Global Chief Operating Officer – Appointed 21 May 2007 and Chief Executive Officer Retail
R Taylor	and Communities
Executives	Group Finance Director – Appointed 21 March 2007 and Chief Executive Officer
S McCann	Investment Management
R Burrows	Chief Financial Officer – Relinquished position 21 March 2007
R Johnston	Chief Executive Officer Project Management, Construction and PFI – Resigned 31 July 2007
Other Executives1 R Butler N Hugill R Lourey P Marchetto N Martin B Soller	Chief Executive Officer Lend Lease Retail and Communities UK Chairman Lend Lease Europe Group Head of Human Resources – Resigned 31 July 2007 Chief Executive Officer Bovis Lend Lease Americas Group Head of Risk Deputy Chief Financial Officer

1 'Other Executives' represents employees in the category of five highest paid Group or Company executives that are not key management personnel.

b. Remuneration Policy – Audited

Directors and Executives

Remuneration Philosophy

The Remuneration Policy of Lend Lease is determined by the Board on the recommendation of the Personnel and Organisation Committee. The Board recognises that Lend Lease operates in an international marketplace and as such aims to recruit, motivate and retain highly skilled employees who can operate in this environment. The policy of Lend Lease is to reward senior executives with market competitive remuneration and benefits, taking account of both Company and individual performance. In assessing these benchmarks, Lend Lease takes account of expert advice and the relevant external comparators in the real estate and related sectors and of companies of similar size, complexity and international scope. The remuneration of the Non Executive Directors is not linked to the performance of the Group in order to maintain their independence and impartiality.

3. Remuneration Report continued

b. Remuneration Policy – Audited continued

Directors and Executives continued

Remuneration Philosophy continued

Remuneration paid by Lend Lease is designed to be appropriate and competitive in each of its business locations, having regard to local practice on issues such as incentives, pensions, superannuation and other benefits. Lend Lease also recognises the need to take account of differing costs of living, especially in relation to expatriates and this is reflected in remuneration for expatriate executives.

In determining the remuneration structure outlined in this report, the remuneration philosophy of the Board is focused on ensuring:

• − The structure is the best fit with the needs of the organisation and its strategy;
• − Remuneration levels are commensurate with appropriate external comparators;
• − Alignment of remuneration incentives with the interests of shareholders, demonstrating a clear link between reward and performance;
• − Alignment of short and long term performance targets to ensure consistent behaviour;
• − A mix of cash and share based remuneration to align the interests of executives with those of shareholders.

The approach of Lend Lease is to provide a balance of fixed and performance based remuneration with an emphasis on increasing 'at risk' remuneration. This approach is reflected in the structure of the Short Term Incentive Plan in particular for the June 2007 financial year.

The Board sets salaries at competitive levels for the relevant role, targeted around the median against comparator companies in Australia and overseas, and takes into account market conditions and personal performance over the year under review.

Market data is used to benchmark salary levels on a global scale, adjusted for local conditions. The Personnel and Organisation Committee benchmarks information available in published job matched surveys of similar companies and, if appropriate, also commissions surveys to supplement the published information. To ensure proper process is followed for all senior executives, all proposed packages for direct reports of Executive Office members and other key managers require prior approval from the Chief Executive Officer. In addition, all internal appointments with a base salary in excess of A\$300,000 in Australia, US\$220,000 in the US and £120,000 in the UK, or for whom a base salary increase of 10% or above is proposed, require prior approval from the Chief Executive Officer.

Elements of Remuneration

The remuneration framework consists of three principal elements:

• − Fixed remuneration (base salary, superannuation and other benefits);
• − Short Term Incentive (annual cash and an equity related deferral) 'at risk';
• − Long Term Incentive (cash or share based performance rights) 'at risk'.

Fixed Remuneration

The salaries of the Chief Executive Officer, the Global Chief Operating Officer and the Chief Executive Officers of the core businesses and corporate functional heads are set by the Personnel and Organisation Committee subject to approval by the Board. Salary changes usually take effect from September of each year except in the case of a new appointment. In the case of the Executive Office members and their direct reports, the Committee is assisted in this review by the Chief Executive Officer.

The other elements of fixed remuneration include those typically enjoyed in the geography where the key person or executive is employed. These may include car, medical cover, employee share plan subscriptions, superannuation and pension contributions, life and/or disability cover and in the case of international assignees, housing, schooling and tax return preparation. The value of these other benefits provided to key personnel are set out in Section 3c. of this Report. Executives are not automatically entitled to all of these benefits.

3. Remuneration Report continued

b. Remuneration Policy – Audited continued

Directors and Executives continued

Elements of Remuneration continued

Short Term Incentives (STIs)

• The STI plan is an annual bonus plan which complements the overall Remuneration Policy of Lend Lease by:
• − Rewarding individuals on meeting or exceeding preset key performance criteria;
• − Establishing key performance criteria to contribute to overall shareholder value.

Under the STI arrangement, executives receive benefits dependent on the achievement of both Lend Lease financial targets and individual personal targets. The total value of the potential benefit (target opportunity) varies by executive, but is generally linked to salary and/or related benefits.

Arrangements for the June 2007 Financial Year

The following table sets out the criteria required to be achieved for the current year STI.

	Financial Element (75%)	Personal Performance Element (25%)
−	Represents 75% of target opportunity.	−	Represents 25% of target opportunity.
−	Measured against the current financial year operating profit after tax, excluding certain non recurring items (A\$413.7 million). This is measured either entirely at corporation level or a mix of corporation (40%) and business unit (60%) level depending on the role.	−	Measured against targets specific to each executive's business unit and function.
−	Upside opportunity can be increased to +25% of target opportunity for +10% of target performance achievement.
Depending on the level of performance achieved, the benefit is delivered to executives as follows:

STI Cash Element

• − Proportion of STI received as cash is determined specifically for each executive (see table below);
• − Cash payment in September following year end.

STI Deferred Element

• − Lend Lease shares or equivalent share value in cash based on share price at the date of determination of the bonuses;
• − The shares (or share value if shares are not practicable) are then held in trust on behalf of the executive for the deferral period;
• − For executives to receive the full deferral they must be employed by the Group at the date of vesting of the deferral element. The usual deferral period will be one year from the date of the grant.1

1 This period may be shortened if an executive is a 'good leaver', that is, an executive who leaves employment by reason of death, total and permanent disability, redundancy or other reason as outlined by the Personnel and Organisation Committee.

The split of the cash and the deferred elements for Executive Directors and executives for the June 2007 financial year is as follows:

	June 2007 STI Cash Element – Maximum Opportunity	June 2007 STI Deferred Element – Maximum Opportunity
	%	%	Calculated Based On
G Clarke	119	59	Base salary
R Taylor	83	59	Total package value
Other key personnel and executives	30 – 107	18 – 36	Australia: Total package value
			UK and USA: Base salary

Total package value equates to base salary and other benefits plus superannuation.

3. Remuneration Report continued

b. Remuneration Policy – Audited continued

Directors and Executives continued

Elements of Remuneration continued

Short Term Incentives (STIs) continued

Future Arrangements

For the forthcoming year, the Personnel and Organisation Committee has further aligned the criteria for the STI to the performance of the executive. The changes to the 2007 STI arrangements are:

• − Financial element for business unit heads, the financial element is split between the operating profit after tax (adjusted for significant one off, non recurring items) of the executive's business unit (twothirds of financial element) and other value drivers for each executive's business unit (onethird of financial element);
• − Qualitative bonus qualifiers for any part of the bonus to be paid, each executive must demonstrate achievement of either the corporate or business unit specific annual plan relating to both Incident and Injury Free and Sustainability.

Long Term Incentives (LTIs)

The current LTIs of Lend Lease were introduced and approved by the Board in 1999 and updated and extended for awards from 2001 onwards. The objectives of the LTIs are essentially twofold:

• − Aligning executives with the long term interests of Lend Lease and its shareholders;
• − Attracting and retaining executives of high calibre by providing competitive rewards that relate to the performance of both the individual executive and the Lend Lease share price.

LTI grants are normally made in July each year and are based on competitive remuneration practice. LTIs are settled in cash or Lend Lease shares, with settlement occurring upon vesting if performance hurdles are met. Grants depend on personal contribution and potential and are designed to retain and motivate high performing key executives. The LTIs are in the form of an Australian dollar figure 'grant', which is notionally 'invested' in performance shares (PS) over time to deliver value depending on:

• − Whether the executive remains with the Group if the executive resigns before vesting, the grant will lapse;
• − The performance of the Group.

The Personnel and Organisation Committee approved one change to the rules of the LTIs for the 2005 awards onwards. The rules now allow that, in the event of a change in control of Lend Lease, all awards will vest upon change in control, to the extent that performance conditions have been met. Senior executives would then be entitled to a pro rata settlement, with the Board having discretion to allow the entitlement to exceed this pro rata amount.

Arrangements for LTIs granted in the Financial Years 2005 and 2006

For awards granted on 1 July 2004 and 1 July 2005, the performance hurdles are based on the Total Shareholder Return (TSR) against a basket of international comparator companies. Under these awards, the performance hurdle required TSR to achieve at least median against several comparator companies of Lend Lease. The comparator companies for these awards were: Amec, Atkins WS, Balfour Beatty, British Land, Centex, Hochtief, Jacobs Engineering, Jarvis, Jones Lang LaSalle, Land Securities, Lennar, Leighton Holdings, Liberty International, Mowlem, Skanska, Taylor Woodrow, United Group and Westfield Group.

A full list of the specific criteria that apply to LTIs granted is detailed in Section 3d. of this Report.

There is no retesting permitted under the LTI.

Arrangements for the June 2007 Financial Year – Additional Performance Hurdle

For the June 2007 financial year awards, the Personnel and Organisation Committee set new performance hurdles to align interests between the participant and shareholders and for consistency with the new STI structure.

For awards granted in 2006 onwards, the performance hurdle is based on two equal measures: long term profitability as measured by Earnings Per Share (EPS) and external TSR compared to the TSR of the individual ASX100 listed companies as at the commencement of the performance period. The change in the TSR comparator group better reflects those companies against which Lend Lease competes for capital.

3. Remuneration Report continued

b. Remuneration Policy – Audited continued

Directors and Executives continued

Elements of Remuneration continued

Long Term Incentives (LTIs) continued

The performance measures are:

• − TSR measured against the ASX100 companies (with 50% vesting at median performance, rising proportionately to 100% on reaching top quartile performance);
• − EPS on operating profit after tax reported in the financial statements adjusted for treasury shares (with 100% vesting if a minimum compound annual growth rate of 10% is achieved over the three year performance period).

Each of the two performance hurdles is measured and can vest independently. The executive must ordinarily remain with the Company until the vesting date for the award to vest.

For the 2006 award, it is intended that these awards will vest in Company shares rather than cash, other than for executives specifically identified or in circumstances where share settlement is not practicable.

There continues to be no retesting under the LTI.

Details of the terms of the awards on issue during the 2007 financial year are summarised below.

Plan	LTI – June 2004	LTI – June 2005	LTI – June 2006
Grant date	18 August 2004	17 August 2005	16 August 2006
Service period1	1 July 2004 – 30 June 2007 (3 years)	1 July 2005 – 30 June 2008 (3 years)	1 July 2006 – 30 June 2009 (3 years)
Performance condition(s):	1. TSR of Lend Lease against the TSR of several comparator companies of Lend Lease. Performance measured over the three year performance period. Vesting Schedule − Rank 1 to 5 inclusive – 100% vesting − in vesting from 85 – 25% − Rank 11 to 19 inclusive – 0% vesting	Rank 6 to 10 inclusive – progressive decrease	1. TSR of Lend Lease against the TSR of the individual ASX100 listed companies (comprised as at the beginning of the performance period) (50% award). Performance assessed over the three year performance period. Vesting Schedule − Upper quartile or better – 100% vesting − Median upper quartile – straight line increase from 50% to 100% vesting − Median – 50% vesting − Below median – 0% vesting 2. EPS growth of Lend Lease over performance period (50% award). Vesting Schedule − At least 10% compounded EPS growth (based on operating profit after tax) over three years – 100% vesting − Less than 10% EPS growth – 0% vesting Each of the two performance conditions may vest
Method of award settlement	Cash	Cash or shares	independently. Shares, except for pre specified executives.
Award status	Vested – 55%	Not yet vested	Not yet vested

1 This period may be shortened if an executive is a 'good leaver', that is, an executive who leaves employment by reason of death, total and permanent disability, redundancy or other reason as determined by the Personnel and Organisation Committee.

3. Remuneration Report continued

b. Remuneration Policy – Audited continued

Directors and Executives continued

Elements of Remuneration continued

Long Term Incentives (LTIs) continued

Hedging in Relation to LTI Awards

The Company prohibits executives from entering into pre vesting hedging arrangements in relation to LTI awards. For awards made in the June 2007 financial year onwards, it is an explicit condition for awards to vest that executives declare that they have not entered into any such arrangement.

Retention Awards

When the Board believes an employee is an outstanding performer and the Company and its shareholders will gain from further incentivising him or her to remain with Lend Lease, a retention award may be made. As an incentive to remain with the Company requires a degree of certainty of value delivered to the individual at the end of the retention period, performance conditions are not generally applied to the ultimate payment of such an award. Details of the current awards for each specified executive are included in LTIs as part of the remuneration details disclosed in this Report.

Superannuation/Pension Plans

Pension plan arrangements are in place in most international locations. In the past, executives (and other employees) joined either a defined benefit or a defined contribution plan. Entry into all defined benefit plans has now ceased across the Group. All new Executive Directors and executives have the opportunity to join defined contribution plans.

Relationship of Remuneration to Company Performance

In considering the Group's performance and benefits for shareholder wealth, the Personnel and Organisation Committee, when setting the criteria for STI and LTI awards, has regard to the financial performance of the Group. The performance in respect of these measures for the current financial year and previous four financial years is summarised in the following table:

			AIFRS	Previous GAAP
		2007	2006	2005	2004	2003
Statutory profit/(loss) after tax1	A\$m	497.5	415.2	210.7	333.5	(714.8)
Operating profit after tax1	A\$m	413.7	354.2	310.42	255.93	230.24
Earnings per share5	cents	120.5	96.1	n/a	n/a	n/a
Dividends paid and declared	A\$m	308.5	243.7	227.2	177.4	129.4
Increase/(decrease) in closing share price6	A\$	4.55	1.03	2.68	1.93	(2.19)

1 Statutory profit/(loss) after tax represents profit attributable to the equity holders of the parent. Operating profit after tax excludes unrealised property investment revaluations of A\$51.6 million after tax for the June 2007 financial year (A\$61.0 million after tax for the June 2006 financial year) and excludes certain non recurring items (June 2007: ATO interest of A\$32.2 million after tax).

2 June 2005 is based on operating results excluding gains on exiting the REI businesses (A\$11.6 million after tax), cost savings implementation expenses (A\$47.7 million after tax), Lend Lease/GPT merger and net separation costs (A\$19.4 million after tax) and write off of GPT and Homemaker management agreements (A\$44.2 million after tax).

3 Consistent with June 2005, June 2004 operating results have been restated to also exclude the impact of Group restructuring and merger costs (A\$18.5 million after tax). June 2004 was based on operating results excluding the profit from the sale of IBMGSA (A\$79.7 million after tax), impact of exiting the REI businesses (A\$2.3 million loss after tax) and capital loss tax benefits arising from Australian tax consolidations (A\$18.7 million after tax) and including capital loss tax benefits (A\$13.0 million recouped against the capital gain on sale of IBMGSA).

4 June 2003 excludes the write down of REI businesses of A\$945.0 million after tax.

5 For 2006 LTI awards, one vesting condition is EPS, as defined in this financial report (excluding treasury shares) adjusted for unrealised property investment revaluations (unless assets have been sold).

6 For LTI awards, the starting and ending share prices are based on the average daily closing price over the award period (five consecutive trading days for the 2004 LTI and three months for the 2005 and 2006 LTIs). The table above represents the movement in the closing share price on 30 June of each financial year.

Operating profit after tax is considered in setting the STI targets while dividends, changes in share price and return of capital are included in the TSR calculation, which is one of the performance hurdles assessed for the LTI.

The Personnel and Organisation Committee considers that the aforementioned external performancelinked remuneration structure is appropriate because it:

• − Represents shareholders' 'bottom line' and provides an objective measure of value created for shareholders;
• − Is independent of accounting policies and accepted by institutional investors;
• − Is simple to benchmark externally.

3. Remuneration Report continued

b. Remuneration Policy – Audited continued

Non Executive Directors

Directors' fees have been set at A\$140,000 per annum with a fee of A\$15,000 for service on each Board Committee other than the Nomination Committee. Fee levels are in line with international benchmarks for a company the size of Lend Lease. Current Chairman's fees are A\$500,000, the Chairman of the Risk Management and Audit Committee receives an additional A\$35,000 per annum and the Chairmen of each the Nomination, Personnel and Organisation and Sustainability Committees receive an additional A\$25,000.

In addition, Non Executive Directors are compensated for time spent travelling to overseas Board and Board Committee meetings. This additional time is compensated as follows:

• − Travel less than four hours Nil;
• − Travel between four and 12 hours A\$2,000 each way;
• − Travel over 12 hours A\$5,000 each way.

To allow Directors to receive some of their annual remuneration in shares rather than cash, and thus align their interests with those of shareholders, a Non Executive Directors' Share Ownership Plan was approved at the 2000 Annual General Meeting and subsequently renewed at the 2003 Annual General Meeting. This plan allows Directors to acquire Lend Lease shares by forgoing an amount of Directors' fees equivalent to the value of the shares acquired. Subscriptions are made at the same price, at the same time and otherwise on the same terms as the Share Purchase Plan available to Australian and New Zealand registered shareholders and only while the Share Purchase Plan is operative. A Director is restricted from dealing with these shares until retirement. However, a Director may deal with shares at an earlier time to the extent necessary to meet an earlier tax liability in respect of the shares. This Plan has not been operative during the suspension of the Share Purchase Plan (since September 2003).

Retirement Plan

The Retirement Plan is designed to provide retirement benefits for Directors based on fees for Board service. Benefits are accrued in Lend Lease shares and will fluctuate in line with the value of Lend Lease shares. Under the plan, the Company will issue to, or acquire for, or for the benefit of, each Non Executive Director a number of Lend Lease shares equal in value to 0.2 times the Director's fees (being fees for attending and chairing Board and Board Committee meetings), but not additional fees.

Allocations are made in arrears on 1 January each year. For this purpose, the value of the shares on acquisition will be the weighted average price of Lend Lease shares traded on the Australian Securities Exchange during the five business days prior to 1 January each year. The shares will be accessible only on retirement. Directors will be exposed to share price risk until this time. However, shares may be sold at an earlier time to the extent necessary to meet an earlier tax liability in respect of the shares.

Retirement Plan Changeover Arrangements

A defined benefit Retirement Benefit Plan ('previous plan') was approved by shareholders at the 1990 Annual General Meeting. Changeover arrangements which were approved by shareholders at the 2000 Annual General Meeting have been effected to transition from the previous plan to the current plan for Directors who were on the Board on 31 December 2000. Under these arrangements, retiring Non Executive Directors will receive a multiple applied to the average of their annual emoluments (i.e. Directors' fees and amounts for additional services) over the previous three years. The multiple is 0.6 for each of the first five years of service as a Non Executive Director and 0.2 for each year over five years to 15 years. This multiple for each Director was frozen at the multiple that would have applied if the Director had retired on 31 December 2000.

The following table sets out the accrued retirement benefits under the previous plan as at 30 June 2007 (based on the multiple being frozen on 31 December 2000). The Board has resolved to cap the entitlements under the previous plan at the lower of the accrued retirement benefit as at 30 June 2003 (with interest payable at the 60day bank bill rate) and the retirement benefit calculated at the actual date of retirement.

Non Executive Directors	Years of Service at 31 December 2000	Accrued Retirement Benefit at 30 June 2007 A\$	Accrued Retirement Benefit at 30 June 2006 A\$
G Edington	1	111,249	92,467
P Goldmark	1	123,452	104,832

Non Executive Directors appointed since 1 January 2001 are not eligible to participate in the previous plan.

3. Remuneration Report continued

c. Remuneration Details – Audited

Details of the total remuneration of the Directors of Lend Lease Corporation Limited are set out on the following tables. In accordance with the requirements of AASB 124, the remuneration disclosures in the remuneration tables are calculated on an accruals basis and only include remuneration relating to the portion of the relevant periods that each individual was a Director.

										Oth er
2 0 0 7 – Cu Ye t rre n ar		Sho	rt T erm		Pos	t E loy mp me	nt	Sha re B ase	d P ent aym	Lon Ter g m
	Sal ary		ST I					3 LTI s				Pro tion of por
	and Fe es	Inc ive ent	Oth er	No n	Su per	Life	End of	Ca sh	Equ ity			Rem rati une on
	Bas e	1 Bo nus	Bo nus es	2 Mo net ary	ion uat ann	Ins ura nce	Ser vic e	Set tled	Set tled		Tot al	Per form anc e
D ire to c rs	A\$ 000 s	A\$ 000 s	A\$ 000 s	A\$ 000 s	A\$ 000 s	A\$ 000 s	A\$ 000 s	A\$ 000 s	A\$ 000 s	A\$ 000 s	A\$ 000 s	Rel d % ate
Ex ive D ire
t to ec u c rs
G C lark e	1, 79 8	1, 88 2		51 4	63 1	92		36 3 7,			12 28 0 ,	58 .7
R T lor ay	97 6	87 9		57	20 2	4		1, 08 2	4 2, 29 2		5, 49 2	35 .7
To tal Ex utiv e D ire cto ec rs	2, 77 4	2, 76 1	–	57 1	83 3	96	–	8, 44 5	2, 29 2	–	17 77 2 ,
No Ex ive D ire t to n ec c rs u
D C for d raw	54 7				13				100		66 0
P C ole bat ch	21 9				13				34		26 6
G E din ton g	21 8				13				34		26 5
P G old rk ma	23 2				13				35		28 0
J H ill	21 7				13				33		26 3
D R yan	22 8				13				36		27 7
To tal No n E tiv e D ire cto xe cu rs	1, 66 1	–	–	–	78	–	–	–	5 27 2	–	2, 01 1
To tal Di tor rec s	4, 43 5	2, 76 1	–	57 1	91 1	96	–	8, 44 5	2, 56 4	–	19 78 3 ,

1The cash element of all STI bonuses has been accrued and paid and is based on the performance criteria as outlined in Section 3b. of this Report.

2'Non Monetary' includes relocation benefits (such as housing, home leave travel and tax return advice) and motor vehicle costs.

3Accrued value of LTI benefit for the year as determined by actuarial analysis. The 2004 and 2005 LTIs are expected to be settled in cash and the 2006 LTIs in shares, except for pre specified executives.

4Equity remuneration is in respect of Mr Taylor's retention incentive and participation in the Employee Share Acquisition Plan (ESAP).

5Comprises entitlements under the Non Executive Directors Retirement Benefit Plan.

3. Remuneration Report continued

c. Remuneration Details – Audited continued

										Oth er
2 0 0 6 – Co ive Ye t m p ar a ar		Sho	rt T erm			Pos t E loy mp me	nt	Sha re B ase	d P ent aym	m7 Lon Ter g
	Sal ary		ST I					4 LTI s				Pro tion of por
	and Fe es	Inc ive ent	Oth er	No n	Su per	Life	End of	Ca sh	Equ ity			Rem rati une on
	Bas e	1 Bo nus	2 Bo nus es	3 Mo net ary	ion uat ann	Ins ura nce	Ser vic e	Set tled	Set tled		Tot al	Per form anc e
D ire to c rs	A\$ 000 s	A\$ 000 s	A\$ 000 s	A\$ 000 s	A\$ 000 s	A\$ 000 s	A\$ 000 s	A\$ 000 s	A\$ 000 s	A\$ 000 s	A\$ 000 s	Rel d % ate
Ex ive D ire t to ec u c rs
G C lark e	1, 78 3	1, 96 7	2, 21 1	45 0	49 1	41		1, 28 0			8, 22 3	54 .8
R T lor ay	84 1	71 3	79 3	30	134	3		( 7) 15	5 34	37 8	2, 76 9	48 .7
8 A C ha mb erla in	25 2				36 5	11	1, 35 3	54 0		39 7	2, 91 8	18 .5
To tal Ex utiv e D ire cto rs ec	2, 87 6	2, 68 0	3, 00 4	48 0	99 0	55	1, 35 3	1, 66 3	34	77 5	13 91 0 ,
No Ex ive D ire t to n ec u c rs
D C for d raw	46 9				12				85		56 6
9 P C ole bat ch	98				9				14		12 1
G E din ton g	16 1				12				24		19 7
P G old rk ma	180				12				28		22 0
10 J H ill	35				3				4		42
11 R L on ge s	48				4				8		60
D R yan	169				12				28		20 9
To tal No n E tiv e D ire cto xe cu rs	16 0 1,	–	–	–	64	–	–	–	6 19 1	–	1, 41 5
To tal Di tor rec s	4, 03 6	2, 68 0	3, 00 4	48 0	1, 05 4	55	1, 35 3	1, 66 3	22 5	77 5	15 32 5 ,

1The cash element of all STI bonuses has been accrued and paid and is based on the performance criteria as outlined in Section 3b. of this Report.

2 'Other Bonuses' represent additional payments payable to employees who participated in the 2003 LTI grant and were employed on 30 June 2006 (the original vesting date of the grant). The 2003 LTI award did not vest and lapsed in accordance with the rules of the LTI program. The Lend Lease Corporation Board has awarded the additional payment in recognition of the performance achieved. Refer to Section 3b. of this Report.

3'Non Monetary' includes relocation benefits (such as housing, home leave travel and tax return advice) and motor vehicle costs.

4 Accrued value of LTI benefit for the year as determined by actuarial analysis. The 2004 and 2005 LTIs are expected to be settled in cash. Negative amounts represent an accrual reversal for the 2003 LTI which did not vest. Refer to Section 3d. of this Report.

5Equity remuneration is in respect of Mr Taylor's participation in the ESAP.

6Comprises entitlements under the Non Executive Directors Retirement Benefit Plan.

7'Other Long Term' represents cash retentions. Amounts due are expensed over the period of the retention.

8Mr Chamberlain resigned as an Executive Director on 30 September 2005.

9Mr Colebatch was appointed as a Non Executive Director on 1 December 2005.

10Ms Hill was appointed a Non Executive Director on 8 May 2006.

11Mr Longes resigned as Deputy Chairman and a Non Executive Director on 17 November 2005.

3. Remuneration Report continued

c. Remuneration Details – Audited continued

Details of the total remuneration of the executives of the Lend Lease Group are set out below and on the following page. In accordance with the requirements of AASB 124, the remuneration disclosures in the remuneration tables are calculated on an accruals basis and only include remuneration relating to the portion of the relevant periods that each individual was a key management person. As set out in Section 3a. of this Report, there has been a change in the assessment of key management personnel in the current year.

													Oth er
2 0 0 Cu Ye 7 – t rre n ar	Five Mo	hly Rem st H ig d rate une		Sho	rt T erm		Pos	t E loy mp me	nt	Sha	re B d P ase aym	ent	Lon g m5 Ter
			Sal ary	ST	I					3 LTI s					Pro tion of por
			and	Inc ent ive	Oth er	No n	Su per	Life	End of	Ca sh	Equ ity				Rem rati une on
Ex t ive ec s u	Gro up	Co mp any	Fee s A\$ 000 s	1 Bo nus A\$ 000 s	Bo nus es A\$ 000 s	2 Mo net ary A\$ 000 s	ion uat ann A\$ 000 s	Ins ura nce A\$ 000 s	Ser vic e A\$ 000 s	Set tled A\$ 000 s	Set tled A\$ 000 s	4 Hy brid s A\$ 000 s	A\$ 000 s	Tot al A\$ 000 s	Per form anc e Rel d % ate
6 S M cC ann	3	3	85 5	02 6 1,		1	79	2		8 75	15			2, 73 6	65 .2
Fo rm er
7 R J ohn sto n			57 5	42 4		3 77	28 6	3		32				2, 09 3	21 .8
8 R B urr ow s	3	3	65 3	73 0		20 6	32 8	2	2, 23 1	47 5	16		60 8	5, 24 9	23 .0
To l e ive ta t xe cu s			2, 08 3	2, 18 0	–	98 0	69 3	7	2, 23 1	1, 26 5	31	–	60 8	10 07 8 ,
O he Ex ive in t t r ec u s
Ca he f F ive t te g or o y
H ig he Pa i d t s
9 R B utle r	3		1, 74 2	36 2		8	154	11		28 5	29 4			2, 85 6	22 .6
N H ill ug	3		1, 72 5	48 4		23 3	180	11		38 8	29 4			3, 31 5	26 .3
10 R L our ey		3	53 9	51 9		29	13			8 55	10			1, 66 8	64 .6
P M het to arc	3		69 7	49 8		35	9	5		30 8		86 0		2, 41 2	33 .4
N M art in		3	34 9	16 7		20 2	71			22 9				1, 01 8	38 .9
B S olle r		3	52 6	33 6		33 3	13	3		34 5			129	1, 68 5	40 .4
To l o he ive ta t t r e xe cu s			5, 57 8	2, 36 6	–	84 0	44 0	30	–	2, 113	59 8	86 0	12 9	12 95 4 ,

1The cash element of all STI bonuses has been accrued and paid in cash and is based on the performance criteria as outlined in Section 3b. of this Report.

2'Non Monetary' includes relocation benefits (such as housing, home leave travel, tax equalisation and tax return advice) and motor vehicle costs.

3Accrued value of LTI benefit for the year as determined by actuarial analysis. The 2004 and 2005 LTIs are expected to be settled in cash and the 2006 LTIs in shares, except for pre specified executives.

4'Hybrids' represents retention incentives that can be settled in cash or shares at the option of the executive.

5'Other Long Term' primarily represents cash retentions and accrual of statutory employee entitlements. Amounts due are expensed over the period of the retention.

6Mr McCann commenced as Chief Executive Officer Investment Management on 5 September 2005 and was appointed Group Finance Director on 21 March 2007.

7Mr Johnston resigned on 31 July 2007.

8 Mr Burrows relinquished his position of Chief Financial Officer on 21 March 2007. His post employment benefit reflects payments related to the notice period and discretionary payments to ensure transitional arrangements suitable to Lend Lease.

9Mr Butler commenced as Chief Executive Officer Lend Lease Retail and Communities UK in March 2007.

10Mr Lourey resigned as Group Head of Human Resources on 31 July 2007.

3. Remuneration Report continued

c. Remuneration Details – Audited continued

	Five Mo	st H											Oth er Lon
2 0 0 6 – Co ive Ye t m p ar a ar		hly Rem ig d rate une		Sho	rt T erm		Pos	t E loy mp me	nt	Sha	re B d P ase aym	ent	g m6 Ter
			Sal ary	ST	I					4 LTI s					Pro tion of por
			and	Inc ent ive 1	Oth er 2	No n 3	Su per	Life	End of	Ca sh	Equ ity	5			Rem rati une on
Ex ive t ec u s	Gro up	Co mp any	Fee s A\$ 000 s	Bo nus A\$ 000 s	Bo nus es A\$ 000 s	Mo net ary A\$ 000 s	ion uat ann A\$ 000 s	Ins ura nce A\$ 000 s	Ser vic e A\$ 000 s	Set tled A\$ 000 s	Set tled A\$ 000 s	Hy brid s A\$ 000 s	A\$ 000 s	Tot al A\$ 000 s	Per form anc e Rel d % ate
7 S M cC ann		3	63 8	85 0		3	57	1		172	6			72 1, 7	59 .2
R J ohn sto n	3		45 6	59 5	38 0	66 8	21 4	2		( 64 )				2, 25 1	40 .5
R B urr ow s		3	59 6	48 2	155	8	28 6	1		22	24			1, 57 4	41 .9
8 M B ella ma n			34 2	173	134	44 5	6	2		( 58 )			10	1, 05 4	23 .6
P C rew es	3	3	38 7	33 9		49 6	66	5	1, 65 8	( 25 8)	16			2, 70 9	3.0
J D ani el			25 2	76		56	46			30				46 0	23 .0
R F ehr ing			39 0	22 2	193	4	35	2		( 18)	17			84 5	47 .0
9 N H ill ug	3		64 5	36 8	1, 00 6	17	12 6	5		77				2, 24 4	19 .8
10 P K ozi ol			11 7			3				( 38 )				82	( 46 .3)
R L our ey			47 5	25 0		15	12			95	6			85 3	40 .4
P M het to arc	3		69 2	52 3	52 2	44 5	9	5		( 16 7)		48 6		2, 51 5	34 .9
J S ick pan sw			51 9	140	35 7	42				( 20 3)				85 5	34 .4
To l e ive ta t xe cu s			5, 50 9	4, 01 8	2, 74 7	2, 20 2	85 7	23	1, 65 8	( 0) 41	69	48 6	10	17 16 9 ,
O t he Ex t ive in t he r ec s u Ca f F ive H ig he te t g or y o s
Pa i d
11 R B utle r	3		65 3	36 3	1, 00 6	1	125	4		48				2, 20 0	18 .7
12 C C ree		3	33 9	114		43	144	3	31 8	( ) 51				91 0	6.9
B S olle r		3	50 3	28 3	35 1	25 8	12	4		( ) 150			12 6	1, 38 7	34 .9
To l o he ive ta t t r e xe cu s			1, 49 5	76 0	1, 35 7	30 2	28 1	11	31 8	( 153 )	–	–	12 6	4, 49 7

1The cash element of all STI bonuses has been accrued and paid in cash and is based on the performance criteria as outlined in Section 3b. of this Report.

2 'Other Bonuses' represents additional payments payable to employees who participated in the 2003 LTI grant and were employed on 30 June 2006 (the original vesting date of the grant). The 2003 LTI award did not vest and lapsed in accordance with the rules of the LTI program. The Lend Lease Corporation Board has awarded the additional payment in recognition of the performance achieved. Refer to Section 3b. of this Report.

3'Non Monetary' includes relocation benefits (such as housing, home leave travel, tax equalisation and tax return advice) and motor vehicle costs.

4Accrued value of LTI benefit for the year as determined by actuarial analysis. The 2004 and 2005 LTIs are expected to be settled in cash.

5'Hybrids' represents retention incentives that can be settled in cash or shares at the option of the executive.

6'Other Long Term' primarily represents cash retentions. Amounts due are expensed over the period of the retention.

7Mr McCann commenced as Chief Executive Officer Investment Management on 5 September 2005.

8Mr Bellaman commenced as Chief Executive Officer Lend Lease Communities and Retail Americas on 1 October 2005.

9Mr Hugill commenced as Chief Executive Officer Lend Lease Communities Europe, Middle East and Africa on 15 August 2005.

10Mr Koziol transferred from the role of Chief Executive Officer Lend Lease Communities on 1 October 2005.

11Mr Butler commenced as Development Director Lend Lease Crosby Group on 15 August 2005.

12Ms Cree resigned as Group Head of Risk on 15 April 2006.

3. Remuneration Report continued

d. Long Term Incentives and Retentions – Audited

The following criteria apply to all parts of Section 3d. of this Report.

• Criteria 1: The ability to achieve the LTI is dependent upon the executive remaining with Lend Lease. If the executive resigns before vesting, the grant will lapse.
• Criteria 2: The award is dependent upon service to vesting date, however, an early redemption date due to cessation of service may result in a pro rata payout.
• Criteria 3: Progressive percentage monthly vesting of award over the respective award service life. (Refer to Section 3e. of this Report for details of Mr Clarke's retention).
• Criteria 4: Forfeiture on resignation. Pro rata on other service cessation.
• Criteria 5: The TSR of Lend Lease is greater than the median TSR of 18 comparator companies (with 25% vesting at median performance rising to 100% on reaching top quartile performance).
• Criteria 6: The TSR of Lend Lease measured against the ASX100 companies (with 50% vesting at median performance, rising to 100% on reaching top quartile performance).
• Criteria 7: The EPS of Lend Lease as reported in the financial statements adjusted for treasury shares and unrealised gains or loses (with 100% vesting if a minimum compound annual growth rate of 10% over the three year performance period).

						Cu t A rd rren wa
D ire to c rs	Gra nt Dat e	Ves ting 1 Dat e	Gra d nte Nu mb er	Aw ard Va lue 2 at G t D ate ran A\$	Aw ard Va lue at J 20 07 une A\$	Exp ed ens 73 200 A\$	% V ed in est the Ye ar	% F orfe ited in 4 the Ye ar	Val Yet to ue Ves t m5 Min imu	Val Yet to ue Ves t 6 Ma xim um	Ser vic e Crit eria	Per form anc e C rite ria	PS/ Ret ion ent
G C lark e	De c 2 002	De c 2 00 7	279 728 ,	2, 797 28 1 ,	09 1, 050 5,	2, 038 61 1 ,	20 .0	0.0	nil	n/a	Cri ia 3 ter	non e	Ret ion ent
	De c 2 002	Jun 20 07	210 604 ,	2, 112 676 ,	2, 167 115 ,	2, 093 32 6 ,	55 .0	45 .0	nil	n/a	Cri ter ia 2	Cri ter ia 5	PS
	Jul 20 04	Jun 20 07	212 939 ,	2, 199 34 0 ,	2, 191 142 ,	1, 42 1, 722	.0 55	45 .0	nil	n/a	Cri ia 4 ter	Cri ia 5 ter	PS
	Jul 20 05	Jun 20 08	194 845 ,	2, 434 783 ,	1, 736 069 ,	828 739 ,	0.0	0.0	nil	n/a	Cri ia 4 ter	Cri ia 5 ter	PS
	Jul 20 06	Jun 20 09	198 620 ,	2, 784 652 ,	2, 94 1, 562	980 52 1 ,	0.0	0.0	nil	n/a	Cri ia 4 ter	Cri ia 6 ter 7 ,	PS
R T lor ay	Jul 20 04	Jun 20 07	63 959 ,	660 60 1 ,	658 138 ,	42 7, 033	55 .0	45 .0	nil	n/a	Cri ia 4 ter	Cri ia 5 ter	PS
	Jul 20 05	Jun 20 08	60 819 ,	759 994 ,	54 1, 89 7	258 685 ,	0.0	0.0	nil	n/a	Cri ia 4 ter	Cri ia 5 ter	PS
	Jul 20 06	Jun 20 09	80 243 ,	1, 125 00 7 ,	1, 188 39 9 ,	39 6, 133	0.0	0.0	nil	n/a	Cri ter ia 4	Cri ter ia 6 7 ,	PS
	Oc t 2 00 6	Se t 2 00 7 p	84 40 7 ,	1, 37 4, 992	1, 564 90 6 ,	1, 115 636 ,	0.0	0.0	nil	n/a	Cri ia 2 ter	non e	Ret ion ent
	Oc t 2 00 6	Se t 2 008 p	84 40 7 ,	1, 37 4, 992	1, 564 90 6 ,	532 31 8 ,	0.0	0.0	nil	n/a	Cri ter ia 2	non e	Ret ent ion
	Oc t 2 00 6	Se t 2 009 p	84 40 8 ,	1, 37 008 5,	1, 564 924 ,	34 9, 884	0.0	0.0	nil	n/a	Cri ia 2 ter	non e	Ret ion ent
	Oc t 2 00 6	Se t 2 010 p	84 40 8 ,	1, 37 5, 008	1, 564 924 ,	260 578 ,	0.0	0.0	nil	n/a	Cri ter ia 2	non e	Ret ent ion
To tal Dir ect ors					22 775 032 , ,	10, 703 186 ,

1Performance shares are paid out at the share price at vesting date if cash settled.

2Award value represents the number of shares granted at the share price on grant date.

4The % forfeited during the year represents a reduction in the number of performance shares available to vest due to the highest level performance criteria not being achieved.

5The minimum value of grants yet to vest is A\$nil as the performance and service criteria may not be met and consequently the grant may not vest.

6The maximum value of grants yet to vest is not determinable as it is dependent on the market price of shares of the Company on the Australian Securities Exchange at the date the grant vests.

³ Current award expensed represents the 2007 year accrued value of the LTI or retentions determined by actuarial analysis. The aggregate for each key person's grant is shown in Section 3c. of this Report under 'LTIs Cash Settled' or 'Equity Settled'.

3. Remuneration Report continued

d. Long Term Incentives and Retentions – Audited continued

Ex ive t ec u s	Gra nt Dat e	Ves ting 1 Dat e	Gra d nte Nu mb er	Aw ard Va lue 2 at G t D ate ran A\$	Aw ard Va lue at J 20 07 une A\$	Cu t A rd rren wa Exp ed ens 73 200 A\$	% V ed in est the Ye ar	% F orfe ited in 4 the Ye ar	Val Yet to ue Ves t m5 Min imu	Val Yet ue to V est 6 Ma xim um	Ser vic e Crit eria	Per form anc e C rite ria	PS/ Ret ion ent
S M cC ann	Jul 20 05	Jun 20 08	102 033 ,	275 004 1, ,	909 114 ,	433 979 ,	0.0	0.0	nil	n/a	Cri ia 4 ter	Cri ia 5 ter	PS
	Jul 20 06	Jun 20 09	65 62 1 ,	920 00 6 ,	97 1, 84 7	323 949 ,	0.0	0.0	nil	n/a	Cri ia 4 ter	Cri ia 6 7 ter ,	PS
Fo rm er
R J oh nst on	Jul 20 04	Jun 20 07	16, 266	168 003 ,	167 37 7 ,	108 603 ,	55 .0	45 .0	nil	n/a	Cri ter ia 4	Cri ter ia 5	PS
	Jul 20 05	Jun 20 08	45 134 ,	563 994 ,	40 2, 144	( 76 127 ) ,	0.0	100 .0	nil	n/a	Cri ia 4 ter	Cri ia 5 ter	PS
	Jul 20 06	Jun 20 09	54 208 ,	759 996 ,	802 820 ,		0.0	100 .0	nil	n/a	Cri ia 4 ter	Cri ia 6 7 ter ,	PS
R B urr ow s	Jul 20 04	Jun 20 07	12, 766	131 854 ,	131 36 2 ,	85 234 ,	55 .0	45 .0	nil	n/a	Cri ia 4 ter	Cri ia 5 ter	PS
	Jul 20 05	Jun 20 08	43 278 ,	540 802 ,	38 5, 60 7	184 075 ,	0.0	0.0	nil	n/a	Cri ia 4 ter	Cri ia 5 ter	PS
	Jul 20 06	Jun 20 09	41 655 ,	584 003 ,	616 91 1 ,	205 63 7 ,	0.0	0.0	nil	n/a	Cri ia 4 ter	Cri ia 6 7 ter ,	PS
To tal ive cut exe s					4, 38 7, 182	1, 265 35 0 ,

1Performance shares are paid out at the share price at vesting date if cash settled.

2Award value represents the number of shares granted at the share price on grant date.

3 Current award expensed represents the 2007 year accrued value of the LTI or retention, determined by actuarial analysis. The aggregate for each key person or other executive is shown in Section 3c. of this Report under 'LTIs Cash Settled'.

4The % forfeited during the year represents a reduction in the number of performance shares available to vest due to the highest level performance criteria not being achieved or service conditions not being met.

5The minimum value of grants yet to vest is A\$nil as the performance and service criteria may not be met and consequently the grant may not vest.

6The maximum value of grants yet to vest is not determinable as it is dependent on the market price of shares of the Company on the Australian Securities Exchange at the date the grant vests.

3. Remuneration Report continued

d. Long Term Incentives and Retentions – Audited continued

O he in he t t rs				Aw ard Va lue	Aw ard Va lue	Cu t A rd rren wa 3 Exp ed ens	% V est ed	% F orfe ited	Val Yet ue	Val Yet ue
Ca f F ive te g or y o	Gra nt	Ves ting	Gra nte d	2 at G t D ate ran	at J 20 07 une	200 7	in t he	in the	to V est	to V est	Ser vic e	Per form anc e	PS/
H ig he t Pa i d s	Dat e	1 Dat e	Nu mb er	A\$	A\$	A\$	Yea r	r4 Yea	m5 Min imu	6 Ma xim um	Crit eria	Crit eria	Ret ent ion
R B utle r	Jul 20 05	Jun 20 08	28 238 ,	35 2, 862	25 1, 60 1	120 107 ,	0.0	0.0	nil	n/a	Cri ter ia 4	Cri ter ia 5	PS
	Jul 20 06	Jun 20 09	33 36 8 ,	46 819 7,	494 180 ,	164 727 ,	0.0	0.0	nil	n/a	Cri ia 4 ter	Cri ia 6 ter 7 ,	PS
N H ill ug	Jul 20 05	Jun 20 08	45 810 ,	572 44 2 ,	40 8, 167	194 845 ,	0.0	0.0	nil	n/a	Cri ia 4 ter	Cri ia 5 ter	PS
	Jul 20 06	Jun 20 09	39 062 ,	54 7, 649	578 508 ,	192 836 ,	0.0	0.0	nil	n/a	Cri ter ia 4	Cri ter ia 6 7 ,	PS
R L ou rey	Jul 20 04	Jun 20 07	38 728 ,	400 002 ,	39 8, 51 1	258 584 ,	55 .0	45 .0	nil	n/a	Cri ia 4 ter	Cri ia 5 ter	PS
	Jul 20 05	Jun 20 08	32 010 ,	39 9, 99 7	285 209 ,	136 150 ,	0.0	0.0	nil	n/a	Cri ia 4 ter	Cri ia 5 ter	PS
	Jul 20 06	Jun 20 09	33 09 6 ,	464 00 6 ,	490 152 ,	163 38 4 ,	0.0	0.0	nil	n/a	Cri ia 4 ter	Cri ia 6 7 ter ,	PS
P M het to arc	Jul 20 04	Jun 20 07	46 200 ,	47 7, 177	475 39 8 ,	30 8, 462	55 .0	45 .0	nil	n/a	Cri ia 4 ter	Cri ia 5 ter	PS
	Jul 20 05	Jul 20 08	110 664 ,	1, 453 834 ,	2, 05 1, 71 1	859 938 ,	0.0	0.0	nil	n/a	Cri ter ia 2	non e	7 Ret ent ion
N M art in	Jul 20 04	Jun 20 07	15, 40 1	159 069 ,	158 47 6 ,	102 82 7 ,	55 .0	45 .0	nil	n/a	Cri ter ia 4	Cri ter ia 5	PS
	Jul 20 05	Jun 20 08	12, 205	152 514 ,	108 747 ,	51 910 ,	0.0	0.0	nil	n/a	Cri ia 4 ter	Cri ia 5 ter	PS
	Jul 20 06	Jun 20 09	15, 157	212 50 1 ,	224 47 5 ,	74 825 ,	0.0	0.0	nil	n/a	Cri ter ia 4	Cri ter ia 6 7 ,	PS
B S olle r	Jul 20 04	Jun 20 07	21 499 ,	222 052 ,	22 1, 225	143 542 ,	55 .0	45 .0	nil	n/a	Cri ia 4 ter	Cri ia 5 ter	PS
	Jul 20 05	Jun 20 08	22 608 ,	282 510 ,	20 1, 43 7	96 160 ,	0.0	0.0	nil	n/a	Cri ia 4 ter	Cri ia 5 ter	PS
	Jul 20 06	Jun 20 09	21 39 8 ,	30 0, 000	31 6, 904	105 635 ,	0.0	0.0	nil	n/a	Cri ia 4 ter	Cri ia 6 7 ter ,	PS
To tal oth ive cut er exe s					6, 664 70 1 ,	2, 973 932 ,

1Performance shares are paid out at the share price at vesting date if cash settled.

2Award value represents the number of shares granted at the share price on grant date.

3 Current award expensed represents the 2007 year accrued value of the LTI or retention, determined by actuarial analysis. The aggregate for each key person or other executive is shown in Section 3c. of this Report under 'LTIs Cash Settled', 'Equity Settled' and 'Hybrids'.

4The % forfeited during the year represents a reduction in the number of performance shares available to vest due to the highest level performance criteria not being achieved.

5The minimum value of grants yet to vest is A\$nil as the performance and service criteria may not be met and consequently the grant may not vest.

6The maximum value of grants yet to vest is not determinable as it is dependent on the market price of shares of the Company on the Australian Securities Exchange at the date the grant vests.

7Retention incentives that can be settled in cash or shares at the option of the executive.

3. Remuneration Report continued

e. Service Agreements – Audited

Executive Directors and Executives

Remuneration and other terms of employment for the key management personnel and other executives in the category of five highest paid are formalised in service agreements. All of the employment contracts contain the conditions below:

Length of contract	−	No fixed term.
Remuneration review period	−	Annually by the Personnel and Organisation Committee.
Benefits	−	Australian resident executives are entitled to participate in the Lend Lease Employee Share Acquisition Plan;
	−	Other benefits vary, however typically include health insurance, life insurance, car allowances or motor vehicles leases and benefits provided by the Lend Lease Foundation;
	−	Executives that are relocated receive relocation packages. Benefits provided vary but typically include accommodation, transfer allowances, visas, shipping costs, school fees, home leave travel and tax advisory services.
STI participation	−	Executives are eligible for an award of STI remuneration. Refer to Section 3b. of this Report for further details and conditions.
LTI participation	−	Executives are eligible for an award of LTI remuneration. Refer to Section 3b. of this Report for further details and conditions.
Non compete and non solicitation clauses	−	Non compete or non solicitation terms vary in each individual's employment contract.
Termination of employment	−	Unless otherwise stated below, termination payments include base salary for the remainder of the notice period not served (up to 12 months), pro rata STI entitlements and LTI entitlements in accordance with the LTI program rules;
	−	All contracts with executives may be terminated early by either party;
	−	Immediate termination for misconduct or a serious breach of any of the terms of employment.

Other major provisions of the agreements relating to remuneration are set out below.

G Clarke

• − Term of agreement: No fixed term however under the Lend Lease Corporation Constitution Mr Clarke was appointed as Managing Director for a term of five years effective 16 November 2006. Furthermore, his international assignment was extended to 30 September 2009 on the existing terms with the exception of the extension of home leave trips each term for children attending UK universities. If still employed by the Company as at 1 July 2009, Mr Clarke's expatriate arrangements will cease and he will be subject to local terms and conditions, including the following:
• − Tax return preparation;
• − Home leave trips under existing terms;
• − Storage and insurance of items in the UK;
• − Existing pension and life cover provisions.
• − Notice period: 12 months.
• − Termination payments provided for under the contract: Base salary for the remainder of any notice period not served, cash value of pro rata benefits, pro rata STI entitlements (based on 60% achievement of objectives), LTI entitlements in accordance with the LTI program rules and the value of the retention award.

3. Remuneration Report continued

e. Service Agreements – Audited continued

Executive Directors and Executives continued

G Clarke continued

• − Retention award:
• − Award date: 9 December 2002.
• − Vest date: 9 December 2007.
• − Grant number and value: 279,728 Lend Lease shares, valued at A\$2,797,281 at grant date. The end payment is referable to the market value of 279,728 shares at vest date. Refer to Section 3d. of this Report for further details.
• − Vesting conditions: Mr Clarke must remain in employment with Lend Lease until 9 December 2007. Payment is due if the Company terminates his employment without cause prior to that date.
• − Forfeiture: The retention award is forfeited if Mr Clarke resigns prior to 9 December 2007, or if Lend Lease terminates Mr Clarke's employment for cause.
• − Early vesting conditions: A pro rata amount will be payable if the Company determines that Mr Clarke's employment should be terminated for poor performance.
• − Long term incentive:
• − Award date: 9 December 2002.
• − Vest date: 30 June 2007.
• − Grant number and value: 210,604 Lend Lease shares, valued at A\$2,112,676 at award date. The end payment is referable to the value of the award at vest date, A\$10.29, which takes into account that 55% of the award vested.
• − Vesting conditions: The TSR of Lend Lease must be greater than the median TSR of 18 comparator companies (with 25% vesting at median performance, rising to 100% on reaching top quartile performance). Mr Clarke was also required to remain in employment until the vest date.
• − Forfeiture: 45% of the award was forfeited as Lend Lease did not achieve top quartile TSR.
• − Non compete period post termination: Six months.
• − Non solicitation period post termination: 12 months.
• − Additional benefits: Golf club membership (which is transferable within the Group if Mr Clarke resigns).

R Taylor

• − Retention award:
• − Award date: 3 October 2006.
• − Vest date: Four equal tranches on each of:
  • − 1 September 2007;
  • − 1 September 2008;
  • − 1 September 2009;
  • − 1 September 2010.
• − Grant number and value: 337,630 Lend Lease shares, valued at A\$5,500,000 at award date. Refer to Section 3d. of this Report for further details.
• − Vesting conditions: Mr Taylor must remain in employment with Lend Lease or the vesting date must fall within a period of notice of termination in order for each tranche to vest.
• − Forfeiture: The retention award is forfeited if Mr Taylor resigns and the vesting conditions set out above are not met.
• − Non compete period post termination: Six months.
• − Non solicitation period post termination: Two years.

3. Remuneration Report continued

e. Service Agreements – Audited continued

Executive Directors and Executives continued

R Taylor continued

• − Notice period: Six months (if instigated by the employee) or 18 months (if instigated by the Company).
• − Termination on or after 1 September 2010: If Mr Taylor resigns or is terminated by the Company other than for cause on or after 1 September 2010:
• − LTI awards will vest as if employment had not been terminated; and
• − Any deferred component of an STI award not yet vested will vest in accordance with the rules as if employment had not been terminated.

S McCann

• − Retention Award:
• − Award date: 22 August 2007.
• − Vest date: 30 June 2012.
• − Grant number and value: Lend Lease shares to the value of A\$2,500,000 at award date, based on the five day weighted average share price up to and including the award date.
• − Vesting conditions: Mr McCann must remain in employment with Lend Lease to the vesting date. If Mr McCann's employment is terminated without cause by the Company prior to the vesting date, the award will vest on a pro rata basis.
• − Forfeiture: The retention award is forfeited if Mr McCann resigns or is terminated for cause, and the vesting conditions set out above are not met.
• − Notice period: Three months (if instigated by the employee) or 12 months (if instigated by the Company).
• − Termination payments provided for under the contract: If Lend Lease terminates Mr McCann's employment, Mr McCann's most recent LTI award will be extended by 12 months from the date on which the Company provided him with notice of termination.

R Johnston

• − Notice period: Six months.
• − Termination payments provided for under the contract: The Company will relocate Mr Johnston back to Australia consistent with the Group's policy for international assignments.

N Hugill

• − Notice period: 12 months.
• − Additional benefits:
• − The cost of annual subscriptions in respect of Mr Hugill's membership of two relevant professional institutions.
• − Non compete period post termination: 12 months.
• − Non solicitation period post termination: 12 months.

3. Remuneration Report continued

e. Service Agreements – Audited continued

Executive Directors and Executives continued

P Marchetto

• − Notice period: Six months.
• − Termination payments provided for under the contract: If the Company terminates Mr Marchetto's service agreement without cause, or Mr Marchetto terminates the service agreement for 'good reason' (as defined by Mr Marchetto's service agreement), Mr Marchetto is entitled to all accrued obligations as well as a severance payment that is:
• − 1.5 times Mr Marchetto's annual base salary as of the termination date;
• − 1.5 times the greater of: (a) the STI paid to Mr Marchetto during his last full year of employment by the Company; or (b) the average of the STI paid to Mr Marchetto during each of the last three full years Mr Marchetto has been paid an STI by the Company;
• − A pro rata share of Mr Marchetto's STI and LTI as calculated on the termination date at the sole discretion of the Company;
• − All other benefits that have accrued as of the termination date;
• − Payments are made less applicable taxes, withholdings and deductions;
• − In addition to the severance payment, Mr Marchetto is entitled to a release benefit equal to six months of base salary as of the termination date if the Company terminates Mr Marchetto's service agreement without cause. The release benefit will be reduced by any applicable taxes, withholdings and deductions.
• − Loans payable: Mr Marchetto had a loan payable of US\$300,000, payable at call. The loan was forgiven on 1 November 2005. In the event that prior to 31 July 2009 Mr Marchetto resigns from employment for other than 'good reason' (as defined in Mr Marchetto's employment contract) or the Company terminates Mr Marchetto's employment for cause, Mr Marchetto must pay to the Company as liquidated damages an amount equal to the forgiven principal plus interest accruing from 1 November 2005. The principal amount required to be repaid is reduced by US\$6,250 each month from August 2005 to July 2009 while Mr Marchetto is employed by the Company.
• − Additional benefits: Mr Marchetto will be reimbursed up to US\$8,500 per annum for membership dues at a club of Mr Marchetto's choosing that is suitable for business entertaining.
• − Non compete period post termination: 12 months.
• − Non solicitation period post termination: 12 months.

R Butler

• − Notice period: 12 months.
• − Additional benefits:
• − The cost of annual subscriptions in respect of Mr Butler's membership of two relevant professional institutions.
• − Non compete period post termination: 12 months.
• − Non solicitation period post termination: 12 months.

B Soller

• − Notice period: Six months (if instigated by the employee) or 12 months (if instigated by the Company).
• − Non compete period post termination: Six months.
• − Non solicitation period post termination: Six months.
• − Other benefits:
• − Relocation benefits as part of permanent relocation to Australia.
• − Assignment bonus of A\$188,225, payable on a pro rata basis to Mr Soller up to 12 October 2007.

3. Remuneration Report continued

e. Service Agreements – Audited continued

Executive Directors and Executives continued

R Burrows

• − Notice period: Not specified in employment contract. It is expected that the required notice would be in the range of that given to other executives having regard to seniority and length of service.
• − Mr Burrows and the Company entered into a Deed of Release following Mr Burrows' relinquishment of his position on 21 March 2007. His cessation of employment will be no later than 1 November 2007. The terms of this Deed of Release have been reflected in the remuneration table in Section 3c. of this Report.

N Martin

• − Notice period: Six months.
• − Termination payments provided for under the contract: The Company will relocate Mr Martin back to the UK consistent with the Group's policy for international assignments.

R Lourey

− Notice period: Six months (if instigated by the employee) or 12 months (if instigated by the Company).

Non Executive Directors

Under the Company's constitution, at each Annual General Meeting, onethird of the Directors and any other Director who will have been in office for three or more Annual General Meetings since he or she was elected (excluding the Managing Director) must retire from office and may submit themselves for reelection. Newly appointed Directors must seek election at the first meeting of shareholders following their appointment.

It is the Board's current policy that Non Executive Directors appointed from February 2002 will be limited to a maximum of three terms of three years. This policy may only be varied by the Board in exceptional circumstances.

f. Additional Information – Audited

Additional information in relation to key management personnel's equity holdings and transactions, loans and other transactions is contained in Note 7 of the Concise Financial Statements.

4. Other

a. Share Options

No share options were issued during the year by the Company or any of its controlled entities, and there are no such options on issue.

b. Indemnification and Insurance of Directors and Officers

The Company's Constitution provides for indemnification in favour of each of the Directors named on pages 1 to 3 of this Report, the Company Secretaries, Mr W Hara and Ms S J Sharpe, and officers of the Company or of wholly owned subsidiaries or related entities of the Company ('Officers') to the extent permitted by the Corporations Act 2001.

For related entities, the indemnification is provided unless the Directors determine otherwise. For unrelated entities in which Lend Lease has an interest, deeds of indemnity may be entered into between Lend Lease Corporation Limited and the Director or Officer. Since the date of the last report, the Company has not entered into any separate deeds of indemnity.

In accordance with the Corporations Act 2001, the Constitution also permits the Company to purchase and maintain insurance or pay or agree to pay a premium for insurance for Officers against any liability incurred as an officer of the Company or of a related body corporate. This may include a liability for reasonable costs and expenses incurred in defending proceedings, whether civil or criminal, and whatever their outcome. During the year, Lend Lease paid insurance premiums of A\$564,323 in respect of its Directors' and Officers' liability policies. Due to confidentiality obligations and undertakings of the policy, no further details in respect of the premium or policy can be disclosed.

4. Other continued

c. Non Audit Services

During the year KPMG, the Company's auditor, performed certain other services in addition to its statutory duties.

The Board has considered the non audit services provided during the year by the auditor and, in accordance with written advice provided by resolution of the Risk Management and Audit Committee, is satisfied that the provision of those non audit services during the year by the auditor is compatible with, and did not compromise, the auditor independence requirements of the Corporations Act 2001 for the following reasons:

• − All non audit services were subject to the corporate governance procedures adopted by the Company and have been reviewed by the Risk Management and Audit Committee to ensure they do not impact the integrity and objectivity of the auditor;
• − The non audit services provided do not undermine the general principles relating to auditor independence as set out in APES 110 'Code of Ethics for Professional Accountants', as they did not involve reviewing or auditing the auditor's own work, acting in a management or decision making capacity for the Company, acting as an advocate for the Company or jointly sharing risks and rewards.

A copy of the Lead Auditor's Independence Declaration as required under Section 307C of the Corporations Act 2001 is included at the end of this Report.

Details of the amounts paid to the auditor of the Company, KPMG, and its related practices for audit and non audit services provided during the year are set out below.

	Consolidated
	June 2007	June 2006
	A\$000s	A\$000s
Audit and Review of Financial Reports	6,798	5,872
Other Services
KPMG
International assignees tax services	202	1,508
Tax services	456	1,052
Accounting advice	82	417
Other services	260	272
Total other services	1,000	3,249
Total audit and other services	7,798	9,121

d. Rounding Off

Lend Lease Corporation Limited is a company of the kind referred to in the Australian Securities and Investments Commission Class Order 98/100 dated 10 July 1998 and, in accordance with that Class Order, amounts in the financial statements and this Report have been rounded off to the nearest tenth of a million dollars or, where the amount is A\$50,000 or less, zero, unless specifically stated to be otherwise.

This Report is made in accordance with a resolution of the Board of Directors and is signed for and on behalf of the Directors.

Sydney, 15 August 2007

_____________________________ _____________________________

D A Crawford G A Clarke Chairman Managing Director

Five Year Profile

		June 2007	AIFRS1 June 2006	June 2005	Previous GAAP1 June 2004	June 2003
Profitability Revenue Statutory profit/(loss) before tax Operating profit before tax2 Statutory profit/(loss) after tax Operating profit after tax2	A\$m A\$m A\$m A\$m A\$m	14,282 628 545 498 446	12,127 573 473 415 354	9,435 350 393 226 286	9,726 466 385 334 256	10,114 (567) 315 (715) 230
Operating EBITDA2 Earnings per share on statutory profit Earnings per share on operating profit2,3 Statutory profit after tax to shareholders' equity (ROE) for the period Dividend per share4 Dividend payout ratio on operating profit2,4	A\$m cents cents % cents %	551 124.3 111.4 15.7 77 69.2	527 104.0 88.7 14.7 61 68.8	411 56.5 71.6 11.9 57 79.5	430 80.6 61.8 9.0 44 69.2	474 (163.1) 52.5 6.5 30 56.0
Corporate Strength Total assets Cash Borrowings Current assets Current liabilities Shareholders' equity Cash flows from operations Net asset backing per share Ratio of current assets to current liabilities Borrowings to shareholders' equity Borrowings to shareholders' equity plus borrowings Net debt to shareholders' equity Borrowings to total market capitalisation Shares on issue Number of shareholders Number of equivalent fulltime employees	A\$m A\$m A\$m A\$m A\$m A\$m A\$m A\$ times % % % % m no. no.	9,336 550 1,076 4,514 3,869 3,243 357 8.09 1.17 33.2 24.9 16.2 14.5 401 49,051 10,817	8,166 560 846 3,379 3,179 3,011 660 7.53 1.06 28.1 21.9 9.5 15.1 400 50,179 9,652	6,925 570 500 2,612 3,384 2,710 (55) 6.80 0.77 18.4 15.6 (2.6) 9.7 399 52,878 8,791	7,131 1,380 862 3,455 3,328 2,836 443 7.08 1.04 30.4 23.3 (18.3) 20.9 400 63,143 9,060	7,409 867 885 3,703 2,993 3,008 191 6.86 1.24 29.4 22.7 0.6 24.2 439 74,878 9,992
Shareholders' Returns and Statistics Proportion of shares on issue to top 20 shareholders Shareholdings relating to employees5 Total dividends paid or declared Share price as at 30 June as quoted on the Australian Securities Exchange	% % A\$m A\$	76.9 9.5 309 18.54	76.4 9.6 244 13.99	75.6 10.8 227 12.96	69.8 11.9 177 10.28	61.5 13.5 129 8.35

1 June 2007, 2006 and 2005 reflect results prepared under Australian equivalents to International Financial Reporting Standards (AIFRS). The years prior to June

2005 represent Lend Lease's results under previous Generally Accepted Accounting Principles (GAAP). 2 Operating profit excludes unrealised property investment revaluations (June 2007: A\$82.7 million before tax, A\$51.6 million after tax; June 2006: A\$99.4 million before tax, A\$61.0 million after tax).

3 Calculated using the weighted average number of shares on issue including treasury shares.

4 Dividends include interim and final dividends.

5 Shares held through employee benefit vehicles.

Concise Management Discussion and Analysis of Financial Condition and Results of Operations (Concise MD&A)

All currency amounts in the MD&A are expressed in Australian dollars unless otherwise specified.

The following discussion and analysis is based on the Group's consolidated financial statements for the year ended 30 June 2007 and should be read in conjunction with those financial statements.

Overview

Introduction

The Group's lines of business are focused on three geographic regions: Asia Pacific, Americas and Europe.

• − The Retail business comprises retail property management, asset management and development in Australia, Singapore and the United Kingdom (UK);
• − The Communities business is involved in the development of large scale urban regeneration and greenfield development projects in Australia, the United States of America (USA) and the UK. This business line includes privatisation services in the USA;
• − Investment Management provides real estate investment management services in Asia Pacific and the UK. Investment Management includes the Group's ownership interests in property investments in Asia Pacific, the UK and the USA. Ownership interests are held directly or indirectly through investments in Lend Lease managed funds;
• − Project Management, Construction and Private Finance Initiatives (PFIs) provides construction, project management and design services across all regions through Bovis Lend Lease and includes the PFI business in Europe.

Results Summary

		Revenue	EBITDA		Profit/(Loss) After Tax1
	June 2007 A\$m	June 2006 A\$m	June 2007 A\$m	June 2006 A\$m	June 2007 A\$m	June 2006 A\$m
Retail and Communities	1,857.0	2,384.9	258.1	245.3	183.4	167.5
Investment Management	171.0	134.8	310.6	174.8	262.8	129.5
Project Management, Construction and PFIs	12,167.9	9,576.6	57.1	187.0	57.6	134.6
Total operating businesses	14,195.9	12,096.3	625.8	607.1	503.8	431.6
Group Services Group Treasury	8.3 77.7	8.1 22.4	(80.6) 5.9	(85.3) 4.7	(60.0) 5.1	(52.0) (22.4)
Group Amortisation					(3.0)	(3.0)
Total corporate	86.0	30.5	(74.7)	(80.6)	(57.9)	(77.4)
Total operating	14,281.9	12,126.8	551.1	526.5	445.9	354.2
Property investments revaluations2			82.7	99.4	51.6	61.0
Total	14,281.9	12,126.8	633.8	625.9	497.5	415.2

1 Profit after tax is after deducting the amount attributable to minority interests of A\$2.7 million (June 2006: A\$7.4 million).

2 Represents the unrealised valuation increases on property investments that are consolidated or accounted for using the equity method in the financial statements.

Profit After Tax

The Group's total profit after tax increased by 20% to A\$497.5 million. The Group recognised revaluation uplifts on its retail investments through the income statement of A\$51.6 million after tax (June 2006: A\$61.0 million).

The Retail business continued to consolidate its position with the successful opening of the Golden Square Shopping Centre in Warrington, UK and the commencement of construction of the Somerset Central development in Singapore. The Retail business profit after tax declined as no retail developments were sold in the current year whereas the prior year included a profit from the sale of the Chapelfield retail centre.

The Communities business profit after tax increased with the higher contributions from Crosby Lend Lease (Crosby) and Actus Lend Lease (Actus). Actus reached financial close on four projects and was named preferred bidder on another three projects in the year. In addition, the US Communities business signed a binding development agreement on the Lowry Range project in Denver, Colorado.

Investment Management launched two new funds in the year. In Australia, the Lend Lease Communities Fund 1 (LLCF1) was launched in July 2006 and the Lend Lease Asian Retail Investment Fund (ARIF) was launched in Singapore in December 2006, with final close for this fund completed in May 2007. In Europe, profit after tax increased due to the significant profit distributions received from the Group's investment in Lend Lease Global Properties, SICAF (Global Fund) and the sale of the Group's interest in Generali Lend Lease (GLL).

Project Management, Construction and PFIs' profit after tax decreased in the year as a result of the A\$118.8 million after tax provision reported at December 2006, which was taken against certain UK projects including the Manchester Joint Hospitals project. Bovis Lend Lease increased profit after tax in both Asia Pacific and the Americas.

PFIs' profit after tax reflects increased equity returns from investments and the recovery of bid costs. However, profit after tax decreased as the prior year included profit arising from the Lend Lease and Bank of Scotland PFI joint venture where the parties equalised their investment in 11 PFI projects.

Overview continued

Profit After Tax continued

Corporate costs before tax decreased, however corporate costs after tax increased due to the prior year including the reversal of a tax provision.

Group Treasury profit after tax increased due to the recognition of interest income following a favourable judgement in the Federal Court on a tax dispute with the Australian Taxation Office (ATO).

Property investment revaluation gains of A\$51.6 million after tax were recognised through the income statement. In addition, revaluation gains of A\$44.9 million after tax are not included in statutory profit but are recognised in the Fair Value Revaluation Reserve in the financial statements. The value of Lend Lease's interest in Bluewater also increased, however as Bluewater is held as inventory, the asset is recorded at historical cost in the financial statements.

Shareholder Returns

		June 2007	June 2006
Earnings per share (EPS) on operating profit1	cents	111.4	88.7
EPS on total profit1	cents	124.3	104.0
Return on equity (ROE) on total profit2	%	15.7	14.7

1 EPS is calculated using the weighted average shares on issue including treasury shares. Under the Australian Equivalents to International Financial Reporting Standards (AIFRS), shares held in employee benefit vehicles including employee share plans, which Lend Lease sponsors, are treated as treasury stock and are excluded from the calculation. This would have the effect of increasing the EPS calculations above if applied.

2 ROE is calculated based on total profit after tax (excluding minority interests) and average equity.

Dividends

A final 50% franked dividend of 42 cents per share will be paid on 12 September 2007 (June 2006: 31 cents per share fully franked). On a full year basis, this equates to a total dividend of 77 cents which is a payout ratio of 69.2% of operating profit after tax.

Credit Strength

		June 2007	June 2006
Net debt1	A\$m	526.1	286.5
Net debt to total tangible assets	%	6.2	3.9
Net debt to shareholders' equity plus net debt	%	14.0	8.7
Interest coverage2	times	7.9	7.8
Credit rating (Standard & Poor's/Moody's)	rating	BBB/Baa3	BBB/Baa3

1 Net debt is borrowings less cash.

2 Calculated as operating EBITDA plus interest revenue divided by gross borrowing costs, including capitalised borrowing costs.

The Group's gearing remained low throughout the year and interest coverage at 7.9 times is above the Group's internal targets. The Group continues to maintain an investmentgrade credit rating.

Cash Flow

	June 2007 A\$m	June 2006 A\$m
Net cash provided by operating activities	357.2	660.3
Net cash used in investing activities	(382.7)	(910.1)
Net cash provided by financing activities	57.1	233.8
Effect of exchange rate changes on cash and cash equivalents	(41.0)	5.9
Net decrease in cash and cash equivalents	(9.4)	(10.1)

Operating cash flows of A\$357.2 million reflect the strong underlying cash flows from the Group's operating businesses net of continued investment in property developments. The decrease from the prior year is primarily attributable to June 2006 including the proceeds on the sale of the Chapelfield retail centre of A\$532.0 million.

Investing cash outflows of A\$382.7 million reflects the Group's recycling of capital including coinvestments in new investment management funds launched in the year (LLCF1 and ARIF) offset by capital redemptions from the Global Fund. The prior year included the acquisition of Crosby of A\$619.3 million.

Net cash provided by financing activities of A\$57.1 million includes £300.0 million borrowings raised from the issue of the 6.125% annual coupon guaranteed notes in the UK public bond market in October 2006, offset by the net repayment of £185.0 million in respect of the £350.0 million syndicated bank facility in the UK and dividend payments of A\$237.2 million.

Concise Financial Statements

Income Statement

Year ended 30 June 2007

				Consolidated
		Note	June 2007 A\$m	June 2006 A\$m
Revenue
Revenue from the sale of development properties			1,036.3	1,773.4
Revenue from the provision of services			12,948.2	10,129.9
Finance revenue			101.8	33.5
Other revenue			195.6	190.0
Total revenue		2	14,281.9	12,126.8
Other Income		3	173.3	92.7
Expenses
	Project Management, Construction and Private Finance Initiatives (PFIs) activities
Cost of inventories sold			(11,767.8)	(9,103.7)
Other expenses			(369.8)	(323.2)
Retail and Communities activities
Cost of properties sold			(1,350.1)	(1,831.4)
Other expenses			(310.1)	(387.7)
Investment Management activities			(48.5)	(31.1)
Corporate and administrative activities expenses			(88.8)	(94.9)
Finance costs			(81.7)	(61.8)
Total expenses			(14,016.8)	(11,833.8)
Share of profit of associates accounted for using the equity method			141.1	150.5
Share of profit of joint venture entities accounted for using the equity method			48.5	36.5
Profit before tax			628.0	572.7
Income tax expense		4	(127.8)	(150.1)
Profit after tax			500.2	422.6
Profit after tax attributable to:
Members of Lend Lease Corporation Limited			497.5	415.2
Minority interests			2.7	7.4
Profit after tax			500.2	422.6
Basic Earnings Per Share
Shares excluding treasury shares	(cents)	5b	134.5	112.7
Shares on issue	(cents)	5b	124.3	104.0
Diluted Earnings Per Share
Shares excluding treasury shares	(cents)	5c	134.4	112.7
Shares on issue	(cents)	5c	124.2	104.0

The income statement is to be read in conjunction with the concise MD&A on pages 28 to 29 and the notes to the concise financial statements set out on pages 35 to 40.

Balance Sheet

As at 30 June 2007

		Consolidated
	June 2007	June 2006
	A\$m	A\$m
Current Assets
Cash and cash equivalents	550.1	559.5
Loans and receivables	2,209.7	1,662.6
Inventories	911.2	940.8
Current tax assets	7.1	3.1
Other financial assets	646.5	24.2
Other assets	189.6	188.3
Total current assets	4,514.2	3,378.5
Non Current Assets
Loans and receivables	293.6	193.4
Inventories	1,326.1	1,213.1
Investments accounted for using the equity method	1,139.6	999.8
Investment properties	256.6	287.0
Other financial assets	424.7	723.8
Deferred tax assets	415.9	389.3
Property, plant and equipment	116.9	110.1
Intangible assets	788.1	809.7
Defined benefit plan asset	23.1	21.7
Other assets	37.4	39.9
Total non current assets	4,822.0	4,787.8
Total assets	9,336.2	8,166.3
Current Liabilities
Trade and other payables	3,612.0	2,898.6
Provisions	250.7	277.5
Other financial liabilities	5.6
Other non financial liabilities	0.5	3.0
Total current liabilities	3,868.8	3,179.1
Non Current Liabilities
Trade and other payables	217.0	209.9
Borrowings and financing arrangements	1,076.2	846.0
Provisions	13.4	26.1
Deferred tax liabilities	504.5	415.9
Other financial liabilities	249.3	211.2
Other non financial liabilities	7.6	92.2
Defined benefit plan liability	156.4	174.6
Total non current liabilities	2,224.4	1,975.9
Total liabilities	6,093.2	5,155.0
Net assets	3,243.0	3,011.3
Equity
Issued capital	854.4	834.7
Treasury shares	(67.4)	(64.5)
Reserves	97.7	149.7
Retained earnings	2,276.8	2,018.2
Total equity attributable to equity holders of the parent	3,161.5	2,938.1
Minority interests	81.5	73.2
Total equity	3,243.0	3,011.3

The balance sheet is to be read in conjunction with the concise MD&A on pages 28 to 29 and the notes to the concise financial statements set out on pages 35 to 40.

Statement of Changes in Equity

Year ended 30 June 2007

		Consolidated
	June 2007 A\$m	June 2006 A\$m
Issued Capital and Treasury Shares
Issued Capital
Opening balance at beginning of financial year	834.7	834.6
Ordinary share issues Closing balance at end of financial year	19.7 854.4	0.1 834.7
Treasury Shares
Opening balance at beginning of financial year Treasury shares acquired	(64.5) (6.7)	(68.1)
Treasury shares vested	3.8	3.6
Closing balance at end of financial year	(67.4)	(64.5)
Total issued capital and treasury shares	787.0	770.2
Reserves
Fair Value Revaluation Reserve
Opening balance at beginning of financial year	101.7
Adjustment on adoption of Financial Instruments Standards AASB 132
and AASB 139 (net of tax)		113.9
Revaluation gain taken to equity (net of tax) Transfer of fair value revaluation reserve to income statement on asset	162.1	30.7
disposal (net of tax)	(133.4)	(43.1)
Effect of foreign exchange rate movements	(0.2)	0.2
Closing balance at end of financial year	130.2	101.7
Hedging Reserve
Opening balance at beginning of financial year	(14.4)
Adjustment on adoption of Financial Instruments Standards AASB 132
and AASB 139 (net of tax)		(3.4)
Movements attributable to effective cash flow hedges taken to
equity (net of tax) Transfer of hedge reserve to income statement	(20.8) (1.1)	(10.6)
Effect of foreign exchange rate movements	7.2	(0.4)
Closing balance at end of financial year	(29.1)	(14.4)
Foreign Currency Translation Reserve
Opening balance at beginning of financial year	4.4	(13.5)
Movements attributable to translation and hedging of foreign operations	(55.3)	17.9
Closing balance at end of financial year	(50.9)	4.4
Equity Compensation Reserve
Opening balance at beginning of financial year	7.6	6.0
Movements attributable to unallocated treasury shares	4.7	1.6
Closing balance at end of financial year	12.3	7.6
Other Compensation Reserve
Opening balance at beginning of financial year	55.3	67.9
Movements attributable to allocated treasury shares		(12.6)
Closing balance at end of financial year	55.3	55.3

The statement of changes in equity is to be read in conjunction with the concise MD&A on pages 28 to 29 and the notes to the concise financial statements set out on pages 35 to 40.

Statement of Changes in Equity continued

Year ended 30 June 2007

		Consolidated
	June 2007	June 2006
	A\$m	A\$m
Reserves continued
Capital Reserve
Opening balance at beginning of financial year	104.6	104.6
Closing balance at end of financial year	104.6	104.6
Minority Interest Acquisition Reserve
Opening balance at beginning of financial year	(109.5)	(22.4)
Movements attributable to acquisition1	(20.0)	(92.7)
Effect of foreign exchange rate movements	4.8	5.6
Closing balance at end of financial year	(124.7)	(109.5)
Total reserves	97.7	149.7
Retained Earnings
Opening balance at beginning of financial year	2,018.2	1,782.5
Profit attributable to members of Lend Lease Corporation Limited	497.5	415.2
Dividends forgone pursuant to Share Election Plan	6.5	13.6
Dividends paid	(263.9)	(235.4)
Less: Dividends on treasury shares	20.2	18.6
Gain on utilisation of treasury shares recognised directly in retained earnings	0.8	23.9
Other	(2.5)	(0.2)
Closing balance at end of financial year	2,276.8	2,018.2
Minority Interests
Opening balance at beginning of financial year	73.2	18.8
Share of movement in profit for financial year	2.7	7.4
Movements attributable to acquisition	14.9	52.4
Movements attributable to disposal	(5.1)	(0.5)
Effect of foreign exchange rate/other movements	(4.2)	(4.9)
Closing balance at end of financial year	81.5	73.2
Total equity	3,243.0	3,011.3
Total Recognised Income and Expense for Financial Year
Non profit items recognised directly in equity	88.5	45.4
Profit after tax for financial year	497.5	415.2
	586.0	460.6
Total income and expense for financial year attributable to:
Members of Lend Lease Corporation Limited	583.3	453.2
Minority interests	2.7	7.4
	586.0	460.6

1 The June 2007 movement represents the acquisition of an additional 3% interest in Crosby Lend Lease (June 2006: 12.5% Actus Lend Lease).

The statement of changes in equity is to be read in conjunction with the concise MD&A on pages 28 to 29 and the notes to the concise financial statements set out on pages 35 to 40.

Statement of Cash Flows

Year ended 30 June 2007

		Consolidated
	June 2007	June 2006
	A\$m	A\$m
Cash Flows from Operating Activities
Cash receipts in the course of operations	12,526.2	9,853.0
Cash payments in the course of operations	(12,388.5)	(9,623.6)
Property development receipts	1,169.5	1,704.7
Property development expenditure	(1,007.7)	(1,169.5)
Interest received	52.1	30.3
Interest paid	(48.3)	(60.8)
Dividends/distributions received	134.7	64.6
Income tax paid in respect of operations	(80.8)	(138.4)
Net cash provided by operating activities	357.2	660.3
Cash Flows from Investing Activities
Sale/redemption of investments	567.6	260.3
Acquisition of investments	(843.4)	(274.9)
Acquisition of investment properties	(55.0)
Acquisition of other assets	(0.5)
Loans to associates/related parties	(15.8)	(26.7)
Acquisition of consolidated entities		(762.1)
Acquisition of minority interest	(1.4)	(92.5)
Disposal of consolidated entities (net of cash disposed)	26.4	1.9
Sale of property, plant and equipment	509.0	10.4
Acquisition of property, plant and equipment	(567.4)	(26.5)
Acquisition of intangible assets	(2.2)
Net cash used in investing activities	(382.7)	(910.1)
Cash Flows from Financing Activities
Proceeds from borrowings	1,567.2	2,549.2
Repayment of borrowings	(1,287.8)	(2,111.9)
Dividends paid	(237.2)	(203.2)
Increase/(decrease) in capital of minority interest	14.9	(0.3)
Net cash provided by financing activities	57.1	233.8
Other Cash Flow Items
Effect of foreign exchange rate movements on cash and cash equivalents	(41.0)	5.9
Net decrease in cash and cash equivalents	(9.4)	(10.1)
Cash and cash equivalents at beginning of financial year	559.5	569.6
Cash and cash equivalents at end of financial year	550.1	559.5

The statement of cash flows is to be read in conjunction with the concise MD&A on pages 28 to 29 and the notes to the concise financial statements set out on pages 35 to 40.

Notes to the Concise Financial Statements

1. Basis of Preparation of Concise Financial Report

The concise financial report has been prepared in accordance with the Corporations Act 2001 and Accounting Standard AASB 1039 'Concise Financial Reports'. The financial statements and specific disclosures have been derived from the consolidated entity's (the 'Group') full financial report for the financial year. Other information included in the concise financial report is consistent with the consolidated entity's full financial report. The concise financial report does not, and cannot be expected to, provide as full an understanding of the financial performance, financial position and financing and investing activities of the consolidated entity as the full financial report. It has been prepared under the historical cost convention except for the following assets and liabilities which are stated at their fair value: derivative financial instruments, investments held for trading, investments available for sale and investment property. Recognised assets and liabilities that are hedged are stated at fair value in respect of the risk that is hedged.

A full description of the accounting policies adopted by the consolidated entity may be found in the consolidated entity's full financial report.

These accounting policies have been consistently applied by all entities in the consolidated entity.

The presentation currency is Australian dollars.

Accounting Estimates and Judgements

The estimates and judgements that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

Key Sources of Estimation Uncertainty

The consolidated entity's full financial report contains information about the assumptions and their risk factors relating to goodwill impairment, as well as detailed analysis of the foreign exchange exposure of the consolidated entity and risks in relation to foreign exchange movements.

Impairment of Goodwill

The Group assesses whether goodwill is impaired at least annually. These calculations involve an estimation of the recoverable amount of the cash generating units to which the goodwill is allocated.

Valuation of Assets and Recoverable Amounts

The Group assesses the fair value of certain assets by use of estimation techniques where there is no available market price. The Group assesses the recoverability of the carrying value of certain assets using estimations of their recoverable amount.

Defined Benefit Superannuation Fund Obligations

Various actuarial assumptions are utilised in determining the Group's defined benefit superannuation/pension fund obligations.

Critical Accounting Judgements in Applying the Group's Accounting Policies

In the process of applying the Group's accounting policies, the Group makes various judgements, apart from those involving estimations, that can significantly affect the amounts recognised in the consolidated financial statements. These include:

• − When substantially all the significant risks and rewards of ownership of development properties are transferred to the purchaser;
• − The percentage completion on construction work performed;
• − Whether the substance of the relationship between the Group and a special purpose entity indicates that the special purpose entity is consolidated by the Group.

		Consolidated
	June 2007	June 2006
	A\$m	A\$m
2. Revenue
Revenue from the Sale of Development Properties	1,036.3	1,773.4
Revenue from the Provision of Services	12,948.2	10,129.9
Finance Revenue	101.8	33.5
Other Revenue
Dividend income	0.6	3.5
Other	195.0	186.5
Total other revenue	195.6	190.0
Total revenue	14,281.9	12,126.8
3. Other Income
Net gain on disposal/redemption of available for sale financial assets	135.1	40.7
Net gain on disposal of consolidated entities	22.6
Net gain on disposal of investments using the equity method	12.6	16.3
Net gain on disposal of investment properties		14.5
Fair value gain on remeasurement of investment properties	2.8	14.8
Other Total other income	0.2 173.3	6.4 92.7
4. Taxation
Income Tax Expense
Recognised in the Income Statement
Current Tax Expense
Current year	100.8	91.2
Adjustments for prior years	(15.6)	(17.9)
Benefits of tax losses recognised	(3.2)	(1.2)
	82.0	72.1
Deferred Tax Expense
Origination and reversal of temporary differences	43.8	78.0
Reduction in tax rate	2.0
Total income tax expense	127.8	150.1
Reconciliation of Tax Expense
Profit before tax Income tax using the domestic corporation tax rate (30.0%)	628.0 188.4	572.7 171.8
Tax effect of amounts which are not taxable	(45.0)	(3.8)
Over provided in prior years	(15.6)	(17.9)
	127.8	150.1

A more detailed analysis of revenue is included within the Concise MD&A.

		Franked
	Amount Per Company
	Cents Per	Share	June 2007	June 2006
	Share	%	A\$m	A\$m
5. Dividends and Earnings Per Share
a. Dividends1
Interim Dividend
December 2006 – paid 27 March 2007	35	50	140.0
December 2005 – paid 14 March 2006	30	100		119.8
Final Dividend
June 2007 – declared subsequent to reporting date
(payable 12 September 2007)	42	50	168.5
June 2006 – paid 13 September 2006	31	100		123.9
			308.5	243.7

1 Dividends includes dividends paid on treasury shares.

Dividend Franking

The final dividend of 42 cents per share declared since 30 June 2007 will be 50% franked. The interim dividend paid on 27 March 2007 (35 cents per share) was 50% franked.

The dividend franking account balance at 30 June 2007 is A\$56.2 million based on a 30% tax rate (30 June 2006: A\$94.6 million). This is calculated after adjusting for franking credits which will arise from the payment of income tax provided in the accounts, tax losses utilised in the current financial year and expected franking debits arising from refunds of tax in dispute. It excludes the A\$36.1 million (June 2006: A\$53.1 million) franking debit impact of the proposed dividend of A\$168.5 million (June 2006: A\$123.9 million) and the franking credits which arose from the payment of tax in dispute in relation to the sale of Westpac shares in 1996.

			Consolidated
		June 2007 June 2006
		Shares Excluding		Shares Excluding
		Treasury Shares	Shares on Issue	Treasury Shares	Shares on Issue
b. Earnings Per Share (EPS)
Weighted average number of ordinary shares	m	369.9	400.4	368.5	399.1
Earnings per share	cents	134.5	124.3	112.7	104.0
c. Diluted Earnings Per Share (DEPS)
Weighted average number of ordinary shares	m	369.9	400.4	368.5	399.1
Adjustment for dilutive effect of potential share issue1	m	0.2	0.2
Weighted average number of ordinary shares for DEPS	m	370.1	400.6	368.5	399.1
Diluted earnings per share	cents	134.4	124.2	112.7	104.0

1 Relates to the Lend Lease Corporation shares issued during the period as part consideration for the minority interest shareholdings in Crosby Lend Lease Group Limited.

6. Segment Reporting

The segment results are discussed and analysed in the concise MD&A included with this report.

Business Segment Summary

		Segment Revenue1, 2		Group Operating Revenue	Tax1, 2, 3	Segment Result Before		Group Operating Profit/(Loss) Before Tax	Group Operating Profit/(Loss) After Tax4		After Tax5	Group Operating Profit/(Loss)
	June 2007 A\$m	June 2006 A\$m	June 2007 A\$m	June 2006 A\$m	June 2007 A\$m	June 2006 A\$m	June 2007 A\$m	June 2006 A\$m	June 2007 A\$m	June 2006 A\$m	June 2007 A\$m	June 2006 A\$m
Segment
Retail and Communities	1,850.8	2,382.1	1,857.0	2,384.9	191.1	207.0	257.8	243.8	183.4	174.5	183.4	167.5
Investment Management	165.3	128.6	171.0	134.8	119.2	129.7	398.4	274.3	316.6	190.7	314.4	190.5
Project Management,
Construction and PFIs	12,160.2	9,572.2	12,167.9	9,576.6	22.8	165.2	54.3	180.8	58.1	134.8	57.6	134.6
Total Segment		14,176.3 12,082.9	14,195.9	12,096.3	333.1	501.9	710.5	698.9	558.1	500.0	555.4	492.6
Unallocated			86.0	30.5			(82.5)	(126.2)	(57.9)	(77.4)	(57.9)	(77.4)
Total Group			14,281.9	12,126.8			628.0	572.7	500.2	422.6	497.5	415.2

	Segment Assets6		Group Assets7	Total		Segment Liabilities6		Total Group Liabilities7
	June	June	June	June	June	June	June	June
	2007 A\$m	2006 A\$m	2007 A\$m	2006 A\$m	2007 A\$m	2006 A\$m	2007 A\$m	2006 A\$m
Segment
Retail and Communities	2,396.7	2,322.0	2,597.2	2,547.2	582.2	743.6	846.5	959.6
Investment Management	1,655.3	1,569.9	2,680.0	2,429.2	426.0	288.5	661.4	467.3
Project Management,
Construction and PFIs	3,137.8	2,770.4	3,319.6	2,934.2	3,146.7	2,507.9	3,261.0	2,729.8
Total Segment	7,189.8	6,662.3	8,596.8	7,910.6	4,154.9	3,540.0	4,768.9	4,156.7
Unallocated			739.4	255.7			1,324.3	998.3
Total Group			9,336.2	8,166.3			6,093.2	5,155.0

1 AASB 114 'Segment Reporting' does not permit certain items of revenue and expenses to be attributed to particular segments for the purposes of determining segment revenues and segment results. These include corporate expenses, interest and dividend revenue, proceeds on the sale of investments (unless the segment's operations are primarily of a financial nature) and income tax expenses. June 2007 includes A\$133.4 million unallocated income relating to the Group's investment in Lend Lease Global Properties, SICAF.

2 Segment revenues, expenses and results do not include intersegment transfers between business segments. Intersegment transfers are priced on an arm's length basis.

3 Includes A\$5.7 million reversal of impairment for Retail and Communities (June 2006: impairment losses: A\$6.0 million) in relation to Jacksons Landing.

4 Represents Group profit/(loss) after tax including minority interests.

5 Represents profit/(loss) after tax attributable to members of Lend Lease Corporation Limited.

6 AASB 114 does not permit certain assets and liabilities to be attributed to particular segments for the purposes of determining segment assets and segment liabilities. These include income tax assets and liabilities, borrowings and liabilities related to assets that are the subject of finance lease liabilities.

7 Presentation and classification is consistent with Concise MD&A.

7. Key Management Personnel Disclosures

Key management personnel compensation details are set out in Section 3 of the Directors' Report.

Equity Holdings and Transactions

Shareholdings Financial Year Ended 30 June 2007

		Shares Held at Beginning of	Shares Received During	Other Net Change to	Shares Held at End of
	Year	Financial Year	the Year1,2	Shares	Financial Year
Non Executive Directors D. Crawford	2007	23,008	5,114		28,122
	2006	17,468	5,540		23,008
P. Colebatch – Appointed 1 December 2005	2007	2,121	1,568		3,689
	2006		121	2,000	2,121
G. Edington	2007	22,866	1,655		24,521
	2006	21,373	1,493		22,866
P. Goldmark	2007	11,798	1,703		13,501
	2006	9,998	1,800		11,798
J. Hill – Appointed 8 May 2006	2007		1,031	2,000	3,031
	2006
R. Longes – Resigned 17 November 2005	2007
	2006	57,304	1,280	(58,584)3
D. Ryan	2007	11,857	1,783		13,640
	2006	10,096	1,761		11,857
Executive Directors
G. Clarke	2007	1,000			1,000
	2006	1,000			1,000
R. Taylor	2007	102,425	1,920		104,345
A. Chamberlain – Resigned 30 September 2005	2006 2007	91,845	10,580		102,425
	2006	1,000		(1,000)3
Executives
S. McCann	2007	458	875		1,333
	2006		458		458
Former
R. Johnston	2007	58,933			58,933
	2006	58,933			58,933
R. Burrows	2007 2006	37,972 36,231	955 1,741		38,927 37,972
R. Lourey4	2007
	2006	64	409		473
J. Daniel4	2007
	2006	230			230
P. Crewes – Resigned 30 June 20064	2007
	2006	41,020	1,242	(42,262)3
R. Fehring4	2007
	2006	20,149	1,164	(12,500)	8,813
M. Bellaman4	2007
	2006
P Koziol4	2007
	2006
N. Hugill4	2007
	2006
J. Spanswick4	2007
P. Marchetto4	2006 2007	1,130			1,130
	2006	5,555			5,555
Total	2007	272,438	16,604	2,000	291,042
Total	2006	373,396	27,589	(112,346)	288,639

Footnotes on following page.

Lend Lease Corporation Concise Annual Report 2007 39

7. Key Management Personnel Disclosures continued

Equity Holdings and Transactions continued

Shareholdings Financial Year Ended 30 June 2007 continued

Footnotes from previous page.

1 Non Executive Directors' share allocations relating to retirement benefits are made in arrears on 1 January each year. Refer to Section 3b. of the Directors' Report for further details.

2 For Executive Directors and executives, relates to share entitlements under employee benefit vehicles.

• 3 Balance at retirement/resignation.
• 4 From 1 July 2006 the executive ceased to be key management personnel.

Key Management Personnel Compensation

The key management personnel compensation included in 'Employee Benefit Expenses' are as follows:

	Consolidated			Company
	June 2007 A\$000s	June 2006 A\$000s	June 2007 A\$000s	June 2006 A\$000s
Short term employee benefits	13,010	24,676	9,512	12,649
Post employment benefits	3,937	5,000	3,442	2,728
Share based payments	12,306	2,033	8,899	1,568
Other long term benefits	608	785	608
	29,861	32,494	22,461	16,945

Loans to Key Management Personnel

No loans were made to key management personnel or other related parties during the current year or prior year.

Other Transactions with Key Management Personnel

From time to time Directors and executives of the Company or its consolidated entities, or parties related to them, may purchase goods from the consolidated entity. These purchases are on terms and conditions no more favourable than those entered into by unrelated customers and are trivial or domestic in nature.

8. Events Subsequent to Balance Date

Sale of Units in Australian Prime Property Fund (APPF)

On 11 July 2007, Lend Lease sold a proportion of its interest in APPF Retail for A\$263.8 million. As at 30 June 2007, a cumulative gain of A\$32.6 million before tax was recognised in the fair value revaluation reserve relating to this interest.

Withdrawal of Australian Tax Office (ATO) appeal to Federal Court on Westpac Warrants Issue

On 10 August 2007 the ATO withdrew its appeal relating to the Federal Court's decision in December 2006 regarding Lend Lease's sale of Westpac shares.

Following the withdrawal of its appeal, the ATO will be required to repay to Lend Lease the balance of the payment Lend Lease made under the amended assessment issued in 2002, plus interest. The repayment of the monies by the ATO has no impact on earnings.

Directors' Declaration

In the opinion of the Directors of Lend Lease Corporation Limited (the 'Company'), the accompanying concise financial report of the Group, comprising Lend Lease Corporation Limited and its consolidated entities, for the financial year ended 30 June 2007, set out on pages 28 to 40:

• a. Has been derived from or is consistent with the full financial report for the financial year; and
• b. Complies with Australian Accounting Standard AASB 1039 'Concise Financial Reports'.

Sydney, 15 August 2007

Signed in accordance with a resolution of the Directors:

_____________________________ _____________________________

D A Crawford G A Clarke

Chairman Managing Director

Full Year ResultsJune 2007

• Group Highlights Greg Clarke
• Group Financial Results Steve McCann
• Operating Businesses
• Retail & Communities Ross Taylor
• Project Management, Construction & PFI Ross Taylor
• Investment Management Steve McCann
• Strategy & Outlook Greg Clarke
• Questions

Summary – Year to June 2007

S f t t t P i t a o r r o u y	\$ 9 A 4 7 5 m	2 0 %
( 1 ) N O i P f i t t t e p e r a n g r o	\$ A 4 4 9 5 m	2 6 %
( 2 ) S E i P h a r n n g s e r a r e	1 1 1 4 ¢	% 2 6
( ) 3 F l l Y D i i d d e a r e n u v	7 7 ¢	% 2 6

Notes:

• (1) Net Operating Profit after tax excluding property revaluations, including interest from the ATO of A\$32.2m
• (2) Calculated based on operating profit and total weighted average shares on issue
• (3) Franked to 50%

Solid EPS & Dividend Growth

Dividend

Group Profit After Tax – Year to June 2007

Integrated Property Model

Development Pipeline

	\$ A b
( 1 ) D l t i l i e v e o p m e n p p e n e
E i d R i l d l i l i t t t t s m a e e a e v e o p m e n p p e n e	5 3
E i d l l f C i i b k l t t t s m a e s a e s a e o o m m n e s a c o g v u u	3 3 0
\$ ( S 3 ) A t t i t d i t l d U 5 b c u s e s m a e c a p a s p e n –	6 5
	4 4 8
R j i t t e c e n p r o e c n s w
E l h & C l ( £ 1 b ) t t 5 e p a n a s e	3 6
( % f £ ) P t 5 0 6 0 0 r e s o n o m	0 7
S f C ( £ ) d i 5 5 b t t t r a o r y	1 3 2
	1 7 5
	6 2 3

(1) Includes Joint Venture interests

Group Financial Results

Steve McCannFinance Director

Group Performance Summary After Tax

	J 2 0 0 7 n e u \$ A m	J 2 0 0 6 n e u \$ A m	% h c a n g e
& C R t i l i t i e a o m m u n e s	1 8 3 4	1 6 7 5	% 9
C & P j M i P F I t t, t t r o e c a n a g e m e n o n s r u c o n	5 7 6	1 3 4 6	( 5 7 % )
I M t t t n e s m e n a n a g e m e n v	2 6 2 8	1 2 9 5	1 0 3 %
O i B i t p e r a n g s n e s s e s u	0 3 8 5	4 3 1 6	1 % 7
G S & i A t i t i r o u p e r v c e s m o r s a o n	( 6 3 0 )	( 0 ) 5 5	1 % 4
G T r o u p r e a s u r y	5 1	( ) 2 2 4	/ n m
O f N t t i P i t e p e r a n g r o	4 4 5 9	3 5 4 2	% 2 6
P I R l i t t t t r o p e r n e s m e n e a a o n s y v v u	1 6 5	6 1 0	( 1 % ) 5
S P f i t t t t a o r r o u y	4 9 7 5	4 1 2 5	2 0 %
N O i P f i l d i A T O i t t t t t e p e r a n g r o e c n g n e r e s x u	4 1 3 7	3 4 2 5	1 % 7

Property Revaluations – Year to June 2007

	P f i & t L r o o s s	F i V l a r a e u R	N t o R d d	J 2 0 0 7 n e u
	\$ A m	e s e r v e \$ A m	e c o r e \$ A m	\$ A m
R t i l e a
L d L O P h i t t e n e a s e e r g a e a r n e r s p ƒ v	3 8			3 8
P f R i l L i i d P h i t t t e r o r m a n c e e a m e a r n e r s p ƒ	0 7			0 7
K i f P i n g o r s s a ƒ u	6 2 3			6 2 3
A P I C I I ƒ	1 3 6			1 3 6
T h M d C h l f d e e a o s, e m s o r ƒ w	2 3			2 3
A P P F ƒ		4 2 6		4 2 6
L d L R t i l P t h i ƒ e n e a s e e a a r n e r s p		6 9		6 9
/ B l t W i t ƒ u e w a e r a r r n g o n			5 7 2	5 7 2
T t l R t i l o a e a	8 2 7	4 9 5	5 7 2	1 8 9 4
O h N R i l t t e r o n- e a		1 3 9		1 3 9
T O T A L	8 2 7	6 3 4	2 5 7	2 0 3 3
P l i f t t t t r o p e r y r e v a u a o n s a e r a x	1. 6 5	4 4 9

Strong Balance Sheet

S & P / M d 's d i i t t o o c r e r a n g y	B B B / B 3 ( h d ) a a n c a n g e u -
W i h t d d b t t i t e g e a v e r a g e e m a u r y	1 2 0 y e a r s
F i d / f l i d b t t e o a n g e x	8 4 % / 1 6 %
I t t n e r e s c o e r v	9 7 x
G D b T l T i b l A t t t t r o s s e o o a a n g e s s e s	% 1 5 6

Gearing expected to reach 30% over a 3-year period as we invest in our development pipeline

Active Capital Management

Velocity of Capital – 12 months to June 2007

Strong Operating Cashflow

	J 2 0 0 7 n e u \$ A m	J 2 0 0 6 n e u \$ A m
C h b i i f t a s a e g n n n g o e a r y	9 5 5 5	6 9 6 5
N h i d d b i i i i t t t t e c a s p r o e o p e r a n g a c e s v y v	3 2 5 7	6 6 0 3
N h d i i i i i i t t t t e c a s u s e n n v e s n g a c v e s	( 3 8 2 7 )	( 9 1 0 1 )
f N h i d d b i i i i i t t t e c a s p r o v e y n a n c n g a c v e s	5 7 1	2 3 3 8
f f f E t h t h e c o e x c a n g e r a e c a n g e s	( ) 4 1 0	5 9
C f h t d a s a e n o y e a r	5 5 0 1	5 5 9 5

Effective Tax Rate

	J 2 0 0 7 u n e \$ A m	J 2 0 0 6 u n e \$ A m
O f f & i P i b i i i t t t t p e r a n g r o e o r e a x m n o r e s	5 4 5 3	4 7 3 3
T a x	( ) 9 6 7	( ) 1 1 1 7
M i i i t n o r e s	( 2 ) 7	( 4 ) 7
N O i P f i f t t t t t e p e r a n g r o a e r a x	4 4 9 5	3 4 2 5
E f f i T R t t e c v e a x a e	1 8 %	2 4 %

Note: Excludes property investment revaluations

Disciplined Capital Management Model

FY07 Performance(1) Gross Debt (including other financial liabilities / total tangible assets) 23%15.7%7.9x15.6%69%26%3Annuity earnings as a % of EBITDAROE3Interest cover3Gearing (1) Dividend payout ratio 3EPS growth 3EPS growth Targeting 10% p.a. average growth over 5-year period Dividend policy 60-80% payout ratio Capital returns ROE > 15% p.a. average over 5-year period Debt ratios Gearing (Debt to TTA) Target 30-40% Interest cover EBITDA > 6x Recurring / annuity style earnings Minimum 15-20% of EBITDAMANAGEMENT OBJECTIVESStrong TSR Investment grade credit rating

Retail & Communities

Ross Taylor Group COO

Retail & Communities – Summary

Note: LLc refers to Lend Lease Communities

Our Business Model

Retail

• Scale project
• Synergies possible
• Ability to assemble / control site
• Confidence in planning consents
• Strong catchment
• Demographics
• Retail spend leakage

Communities

• Scale project
• Synergies possible
• Ability to assemble / control site
• Confidence in planning consents
• Growth cities / growth corridors

Privatisation

• Deep market
• Synergies possible
• Early mover advantage
• Can achieve #1 or 2 market position
• Lend Lease skills / capability provide an advantage

Global Scale

R i e g o n		R t i l e a	C o m	i t i m u n e s	P i t i r v a	t i s a o n
	N f o o C t e n r e s	V l U d a e n e r u D l t e v e o p m e n	B k l a c o g N o	B k l a c o g S l V l a e s a u e	T l A t t o a s s e s	V l U d a e n e r u D l t e v e o p m e n
U K
	7	\$ A 3 2 b	1 4 7 2 0 ,	\$ A 1 3 0 b	2 2	\$ A 0 9 b
A i m e r c a
	1	-	1 8 8 1 5 ,	\$ 2 3 A b	1 6 ( 4 2, 4 0 0 h ) o m e s	\$ ( 1 ) 6 A 5 b
A t l i u s r a a
	1 1	\$ A 1. 4 b	8 4 9 4 5 ,	\$ A 1 b 7 7	-	-
S i n g a p o r e
	4	\$ A 0 b 7	-	-	-	-
T t l o a	2 3	\$ A 5 3 b	1 1 5 5 4 6 ,	\$ A 3 3 0 b	3 8	\$ A 7 4 b

(1) Projects awarded and projects that have not achieved financial close

Existing Platform – Group Synergies

R i e g o n	B i d / B k l L L o s e n e a s e a c o g v G P M ( ) t 5 n e e a r s x y	I M t t t n e s m e n a n a g e m e n v P i l F U M ( ) t t t 5 o e n a n e e a r s x y
U K	\$ A 1 0 0 2 0 0 m −	\$ C i A 1 2 b r c a −
		R i l F d / R i d i l & O h F d t t t e a n s e s e n a e r n s u u
A i m e r c a	\$ 1 0 A m	\$ 0 0 A 7 m
A t l i u s r a a	\$ 1 0 0 A m	\$ 2 0 0 A m
S i n g a p o r e	\$ A 4 0 m	\$ A 9 0 0 m
T t l o a	\$ 2 0 3 0 G A 5 5 B k l P M m a c o g −	\$ C 2 8 3 8 i A b P t t i l F U M r c a o e n a −

Retail & Communities – Asia Pacific

Communities

• Flat result in difficult market
• Settlement of lots flat
• Strong non-residential contribution (25% of gross sales value)
• Backlog up by 11%
• Looking forward to FY08
  • Strong sales and momentum
  • Offset by smaller contribution from non-residential sales

Retail

• Added 5 new centres, Somerset Central / 420 George Street
• Development pipeline of A\$2b +
• Strong NOI growth across the portfolio
• Strong valuation growth

Rouse Hill Regional Centre, Sydney

Retail & Communities – Asia Pacific Integrated Project Wins

420 George Street

• Off-market acquisition
• APPF 25% / JV Partner 75% (Fortius)
• LLC providing property management, development management and construction management services

Somerset Central

• Efficient capital model, maximising LLC ROCE
• 25% LLC / 75% ARIF plus debt
• Using full LLC integrated model
• Development
• Retail
• Funds Management
• Construction

Mid City Centre, Sydney

Retail & Communities – UK

• Crosby trading
• Units settled – down on FY06 due to project timing
• Offset by increased Commercial revenue
• Backlog – 4,860 lots, circa 3+ years' supply – up from 3,830 lots
• Mixed-use urban renewal / Retail project wins
• Stratford City – preferred developer / 4,200 units
• Elephant & Castle – appointed Master Development Partner for £1.5b project
• Preston / Stockport – Retail-led opportunities
• LLC gaining market share via new project wins

Hungate, York

UK Retail & Communities Integrated Model

Elephant & Castle

• Land management model
• £1.5b urban regeneration scheme
• 3,500 units – Commercial / Retail / Affordable housing
• Opportunity to bring Crosby into London market
• Integrated opportunity – Construction / Retail / Residential

Preston

• £600m of gross development value
• 50 / 50 JV with Grosvenor subject to Council approval
• 1.1 million square feet Retail
• 500,000 square feet Residential
• Integrated opportunity – Construction / Retail / Residential
• UK Retail Fund potential Elephant & Castle, London

Retail & Communities – US

Communities

• Backlog established – Horizon / Lowry Range
• Combined backlog
• 15,880 units / 1.3 million m2 Commercial
• Estimated sales value A\$2.3b
• Looking to acquire scale business
• Land management model preferred
• Concentrate on growth states – Arizona, Colorado, Texas & Florida
• Timeframe circa 12 months
• Right time in the cycle

Retail

• King of Prussia
• NOI – up 10% in US\$
• Valuation – up 12% in US\$

Horizon City, Denver

Privatisation – USActus Lend Lease – Ample Opportunity Remains

Privatisation – UKPFI

• NPAT A\$14.3m
• Recovery of bid costs on Lancashire Schools
• Higher equity returns across portfolio
• Strong market position & deal flow
• Waste – JV with GRD
  • Alliance agreement for 4 projects
• Healthcare
  • LLC has strong market share, but market remains slow
• Education – bidding on Birmingham Schools
• Growing invested & committed equity – £94.2m

Growth Opportunities and Step Out Opportunities

R i e g o n	O i / F t t p p o r n o c s u y u
U K	S / t R t i l R i d t i l i l i i ƒ r o n g e a e s e n a p p e n e c o n v e r s o n S l b i i L d i t t c a e a p a r m e n u s n e s s n o n o n e m e r g n g ƒ N P F I d l t e e a s ƒ x
A i m e r c a	A i l d i d b k t t c s n o o g n g a n a r r a c s ƒ u A i l d i d l t t c q r e a m a s e r p a n n e c o m m n e e o p e r ƒ u u y v
A l i t s r a a u	R i l / R i d i l i l i i l l t t t t e a e s e n a p p e n e s s r o n g ƒ R B D l l i t i d ƒ w e p o s o n e M l b i t t t ƒ o v e o s c a e a p a r m e n u s n e s s
S i n g a p o r e	R i l i i l i i t t t t e a o p p o r u n y p p e n e r e m a n s s r o n g ƒ L k R i d i l k i i t t t t t o o a e s e n a m a r e o p p o r n e s ƒ u

Bovis Lend Lease

Ross Taylor Group COO

Project Management, Construction & PFI – Summary

Backlog GPM

Bovis Lend Lease – Asia PacificOperating Highlights

• Strong profit performance – up A\$30.8m
• Retail – Rouse Hill Town Centre
• Commercial & Government – Australian Taxation Office, Queensland Schools
• Multi-site – Commonwealth Bank, ANZ, NAB
• Telco, Retail, Industrial & Pharmaceutical – Asia
• Profitability ratio – 44%
• Closing backlog GPM A\$125.4m – up 19%
• Construction value
  • ANZ@Docklands – A\$377m
  • Brisbane Airport – A\$287m
• Good visibility of opportunities
• Construction value
  • Mulwala Factory, NSW – A\$240m
  • Lonza Factory, Singapore – A\$305m
  • Commonwealth Bank, NSW – A\$125m
  • ACT Correctional Facility, Canberra – A\$100m

Brisbane Airport International Terminal

32Somerset Central, Singapore

Bovis Lend Lease – UK / CEMEAOperating Highlights

UK

• Full review of business undertaken
• Expect return to growth over medium term
• 2-3 year lag period – Manchester Hospitals completion in 2010
• Market fundamentals still strong
• Closing backlog A\$295.2m – flat despite provisions
• Construction values
  • Lancashire Schools – £235m
  • Lancashire Waste – £236m
  • SLAM 2 – £335m

CEMEA

Good performer, strong opportunities

201 Bishopsgate, London

Bovis Lend Lease – Americas Operating Highlights

• Profit increase of 20% in local currency terms
• Profitability ratio – 47%
• Closing backlog A\$296.6m – up 35%
• Construction values
  • Columbia University US\$1b
  • Rego Park, Vornado Realty US\$390m
  • Multi-family – circa US\$1.2b since June
  • Healthcare – US\$465m since June
• Significant pipeline
• Multi-family – New York, Chicago, Boston, Washington
• Opportunities in Healthcare & Education
• Pharmaceutical
• Multi-site wins – Starwood, McDonald's, Citigroup

Duke University School of Nursing, North Carolina

Bovis Lend LeaseOutlook

• Focus across business
• Conclude underperforming UK projects
• Lock down operational disciplines across the business
• Asia Pacific
• Increasing focus on Government, including Healthcare
• Industrial, Pharma & Telco in Asia
• UK
• Stabilise business
• Growing internal pipeline
• CEMEA
• Strong growth in Central / Eastern Europe & Middle East
• Americas
• Healthcare & Pharma sectors seeing strongest growth in 50 years

Karmelitska Mandarin Hotel, Prague

Incident & Injury Free

Safety

How are we tracking?

• Key injury statistics better than average
• However 9 fatalities against a backdrop of 170 million man hours worked still unacceptable 6
• Driving to the next level to achieve Incident & Injury Free
• Key executives responsible for Safety – Ross Taylor / Rich Driggs
• All bonuses subject to safety gate
• Gate measured against 5-pronged business unit and project specific safety plans
• What's making a difference?
• Falls mandate
• Site access controls
• Distributing lessons learned

Investment Management

Steve McCannCEO

Investment Management – Summary

Growth in Funds Under Management

A\$b

Core business FUM increased by 27% during the year

Investment Management – Operating Highlights

• Launched two new products
• Raised circa A\$1b of new equity (includes APPF)
• ARIF final equity close completed in May
• Wholesale platform performed strongly
• APPF Retail & Commercial – total returns of 20%+
• Core Plus 12%+ total return in year 1
• REP 2 completed takeover of listed hotel group
• APPF FUM now A\$4.3b – up 23%
• Core Plus close to fully invested – A\$280m of FUM
• Continued to drive asset values in local currency
• Bluewater – up 6%

King of Prussia – up 12% Mid City Centre, George Street, Sydney

Investment Management – Market Outlook

Australia

• Strong flow of capital expected to continue
• New players in wholesale market – more competitive

Asia

• Singapore REIT market continues to grow
• Increasing global investor demand for exposure to the region

UK

• Investment activity in retail sector expected to reduce in favour of UK commercial, European core product and Asian development
• Within retail sector, prime assets expected to outperform

Somerset Central, Orchard Road Singapore

Investment Management – Our Products

R i e g o n	T f F d p e o n s y u	( 1 ) F U M	P i l i / I C i t t t p e n e n e s m e n a p a c v y
A l i t u s r a a	C C P l E h d o r e o r e u s n a n c e , , , V l A d d a e u	\$ A 4 9 b	\$ A 1 3 b d l i l i i t e v e o p m e n p p e n e n A P P F l a o n e
A i s a	C P l V l A d d o r e u s a u e ,	\$ A 1 2 b	\$ f A 2 4 b i t t i t i o n v e s m e n c a p a c y n A R I F
U K	C V l A d d o r e a u e ,	\$ A 2 8 b	\$ A A 3 2 b L d L t c c e s s o e n e a s e \$ R i l & A 1 3 b C i i t t e a o m m u n e s i l i p p e n e

Investment Management – Key Priorities

• Continue strong focus on superior investor outcomes
• Australia
• Targeting launch of REP 3 in next financial year
• Core Plus capital raising – capacity to double FUM
• Asia
• Execute ARIF mandate – via delivery of Somerset Central and committing remaining equity
• Explore new fund opportunities
• UK
• Expand platform through access to UK asset base and development pipeline 825 Bourke Street, Melbourne

(new Lend Lease Melbourne HQ)

Strategy & Outlook

Greg Clarke Group CEO

Longer Term Earnings Visibility

Retail Development Privatisation – ActusAustralian CommunitiesUS CommunitiesUK CommunitiesInvestment Management − Investment Bovis

Next Strategic Steps

• Business Unit strategy
• Reposition Bovis Lend Lease UK
  • Consistent application of risk management processes
  • Focus on appropriate reward for risk
• Progress Retail & Communities
  • Move pipeline opportunities into delivery
  • Continue to grow pipeline
  • Grow US Communities platform
• Develop UK wholesale investment management platform
• Established business unit to focus on 5 years + opportunities
• New business opportunities – Rod Fehring
• New geographies – David Hutton

Stratford City, London

Outlook

• Earnings outlook unchanged ⁻ underpinned by existing portfolio and pipeline over 5 years +
• Economic and market conditions remaining generally favourable
• Strong development pipeline with opportunities out 10 years ⁻ good earnings visibility
• Capital recycling will continue to be a feature of earnings growth
• Not dependent on any major acquisition

Full Year ResultsJune 2007