Stock Exchange Announcement

2008 Annual Report to Shareholders

14 October 2008

Enclosed are the 2008 Shareholder Review and the 2008 Annual Report to Shareholders for Lend Lease Corporation Limited to be sent to shareholders who have elected to receive a copy.

Copies of the documents referred to above are available online at www.lendlease.com

ENDS

For more information contact:

Mark Gell Lend Lease Corporation Tel: 02 9237 5447 / 0419 440 533

Lend Lease Corporation Limited Telephone +612 9236 6111 ABN 32 000 226 228 Facsimile +612 9252 21921 Level 4, 30 The Bond www.lendlease.com 30 Hickson Road Millers Point NSW 2000 Australia

Lend Lease 2008 Annual Shareholder Review

About Lend Lease

Lend Lease is a leading property group with broad skills across the property value chain.

Headquartered in Australia, we operate three core businesses: project management and construction, property investment management and property development. Our development business focuses on three key competencies – retail, communities and public private partnerships.

Important dates in 2009 Our key markets are Asia Pacific, the Americas, to add to your calendar the United Kingdom, Europe and the Middle East.

We operate an integrated business model and our earnings are well diversified by both market sector and geography.

	February*	Announcement of Half Year Results
	March*	Share price quoted ex dividend
	March March August August August September November*	Interim dividend record date Interim dividend payable Announcement of Full Year Results Share price quoted ex dividend Final dividend record date Final dividend payable Annual General Meeting

Lend Lease is committed to delivering the best possible outcomes for all our stakeholders that are consistent with our behaviours of respect, integrity, innovation, collaboration and excellence. We are passionate about the relationship between people and places and our role in building a legacy for future generations. We aim to do this safely, ethically and sustainably.

Exact dates will be confirmed on the Lend Lease website Investor Relations section at www.lendlease.com in due course.

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Lend Lease Corporation Limited ABN 32 000 226 228

Lend Lease is a member of the Dow Jones Sustainability World Index which is used by DJSI licensed asset managers to manage investments worth over US$5 billion each year.

2008 performance at a glance

Statutory profit[1]

$265.4M

Net operating profit

$447.1M

Net operating profit after tax including property revaluations and adjustment to carrying value of inventory.
Calculated based on operating profit and total weighted average number of shares on issue including treasury shares.

Earnings per share[2]

111.5¢

Full year dividend[3]

77¢

All financial amounts in this report are in Australian Dollars unless otherwise stated.

Front cover image: The Lend Lease Gauge building in Victoria Harbour, Melbourne. Back cover image: The Bond building in Millers Point, Sydney.

Dividend includes interim dividend of 43 cents franked to 40% and final dividend of 34 cents franked to 45%.

50 yeArs of

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“ The TIMe Is noT fAr off when CoMpAnIes wILL hAve To jusTIfy TheIr worTh To soCIeTy, wITh greATer eMphAsIs beIng pLACed on envIronMenTAL And soCIeTAL IMpACT ThAn sTrAIghT eConoMICs.”

Dick DusselDorp 1973

founder Lend LeAse CorporATIon

Lend Lease

highlights

operational

development pipeline

• Lend Lease continues to have a significant retail development pipeline with an estimated gross development cost of $4.8 billion and a Communities backlog with an estimated sales value of $33.9 billion.

Construction backlog gross profit Margin

Global construction backlog gross profit margin at 30 June was $788.3 million, up 10% on 2007 and represents two years of forward workload.
funds under Management
Funds under Management grew by 4%.

five-year performance

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Operating profit after tax [1,2] Earnings per share on
operating profits [1,3]
$447.1M
111.5¢
AGAAP AIFRS Interim Final
Lend Lease Corporation 04 05 06 07 08 04 05 06 07 08
M M M M M
¢ ¢
¢ ¢ ¢
$255.9 $285.7 $354.2 $445.9 $447.1 61.8 71.6 88.7 111.4 111.5
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2008 Annual Shareholder Review Lend Lease Corporation

June 2005 to 2008 results prepared under Australian Equivalents to International Financial Reporting Standards (AIFRS). June 2004 represents Lend Lease’s results under previous Generally Accepted Accounting Principles (AGAAP).
Operating profit excludes unrealised property investment revaluations and the inventory carrying value adjustment in 2008 (June 2008: $181.7 million).

2/3

financial

Continued strong performance

Earnings per share rose 8% over the year, excluding the impact of the ATO interest received of $32.2 million after tax in 2007.
Dividend per share of 77 cents, in line with 2007. This was a solid performance in difficult market conditions.
balance sheet strength • As at 30 June, our gross debt to total tangible assets (including other financial liabilities) was 14.4% and our weighted average
debt maturity was 11 years with 84% at fixed rates.
• Interest cover was 7.2 times, above management target of six times.
Lend Lease retained its investment grade credit rating.

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Return on equity [1,5] Dividends per share [1,4] Dividend payout ratio
on operating profit [1,2,4]
8.2% 77¢
69.1%
04 05 06 07 08 04 05 06 07 08 04 05 06 07 08
¢ 34¢
¢ ¢ 42
31
¢ 29
26
% % % % % % % %
9.0% 11.9 14.7 15.7 8.2% 18¢ 28¢ 30¢ 35¢ 4335 ¢ 69.2 79.5 68.8 69.2 69.1
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Calculated using the weighted average number of shares on issue including treasury shares.
Dividends include interim dividend of 43 cents franked to 40% and final dividend of 34 cents franked to 45%.
Return on equity calculated based on statutory profit after tax.

geographic diversification

we have operations in Asia pacific, the Americas, the united Kingdom, europe and the Middle east.

~~Contribution to operating proft from all fve business units~~

26.2% Investment Management 12.6% Retail

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19.2% Communities

13.9% Public Private Partnerships

28.1% Project Management and Construction

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Communities

retail

The Communities business is involved in the development of large scale urban regeneration and greenfield development projects in Australia, the us and the uK. The Lend Lease business model includes land sourcing, master planning and design, product development and marketing.

retail comprises retail property management, property ownership, asset management and development in Australia, singapore, the us and the uK. The strategy is to secure integrated positions which play to the group’s core skills and involves all components of the property value chain.

presence in singapore, Australia, Americas and the uK.

presence in Australia, the uK and the Americas.

4/5

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public private partnerships (ppp)

~~project Management and Construction~~

~~Investment Management~~

The ppp business manages and invests equity in large ppp projects in the us and the uK. In the us the focus is on the Military housing privatization Initiative for all branches of the us military. In the uK the focus is on four sectors: health, education, waste and accommodation.

project Management and Construction provides construction, project management and design services across all regions through bovis Lend Lease. Key sectors include commercial, retail, residential, communications, industrial and pharmaceutical.

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, held indirectly through investments in Lend Lease managed funds in Asia pacific and the uK.

presence in Asia, singapore, Australia, Americas, uK and europe/Middle east.

presence in singapore, Australia, Americas and the uK.

presence in Americas and the uK.

Quick facts

Total shareholders

51,623

Total number of employees

12,039 worldwide

Americas Net Profit After Tax (NPAT)

29.4%

UK/Europe/Middle East NPAT

27.6%

Asia Pacific NPAT

43.0%

Chairman’s report

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Since our last annual report, the global economy has encountered unprecedented headwinds. Volatile equity and constrained debt markets have impacted the carrying value of many companies’ assets and their earnings performance.

Share prices have been adversely impacted by the global turmoil, reflecting investor uncertainty and often a disregard for the underlying strengths of the businesses involved.

In the face of these volatile conditions, the diversified business model of the Group and its balance sheet have underwritten a creditable financial result for 2008. The Company achieved an 8.1% increase in underlying net operating profit after tax of $447.1 million.

The full year dividend, which is paid from after tax operating earnings, was 77 cents per share, in line with last year’s payment. The full year dividend represents a payout ratio of 69% of net operating profit after tax, at the midpoint of the Board’s policy range of 60% to 80%.

While achieving a very good result on many key measures, statutory profit after tax of $265.4 million reflected a non-cash decrease in the carrying value of inventory in our UK Communities business, Crosby Lend Lease.

The difficult market conditions of recent months are set to continue for some time yet. The Board and management’s priority is to manage the business efficiently, while continuing to build a portfolio of superior long term property projects to ensure we will be in a leading position when the market recovers.

In the meantime, while the Group expects financial year 2009 operating earnings to be 10–15% lower, they will be delivered through continuing strong operating cash flows, low interest costs and intensive risk management.

The Company’s conservative asset leverage and measured use of capital recycling ensures there is no pressure to realise assets to meet stated financial objectives.

2008 Annual Shareholder Review Lend Lease Corporation

50 yeArs of

6/7

Lend Lease

1997 bp gLobAL ALLIAnCe

2008 marks the

50th anniversary since Lend Lease Corporation was founded by Dick Dusseldorp in Sydney with a vision to create a company that successfully combined the disciplines of property, financing, development and investment. Lend Lease is now a leading global property Company, bound together the core values: people, safety and the environment. These values have underpinned Lend Lease’s success over the last 50 years and will steer the Company over the next 50 years.

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From a small office block and a residential subdivision on Sydney’s North Shore, Lend Lease has grown to be an international company creating landmarks, defining communities, changing the shape of retailing, inspiring the modern approach to urban renewal, and creating benchmarks for green building.

Instead, the Board and management continue to look through the cycle and maintain a clear focus on business fundamentals.

I want to take this opportunity to extend thanks to my fellow Board members, outgoing CEO Greg Clarke and his senior management team, and all our people. They have worked hard to ensure Lend Lease remains well positioned for growth despite the very difficult market conditions we are facing and are likely to face for some time yet. I also welcome Mark Selway to the Board.

Outlook

Today Lend Lease remains well placed to continue for another 50 years. The Company has a clear, long term strategy; strong positions across all its key markets; a strong and secure pipeline of work with high quality partners, and the capital flexibility to take advantage of opportunities that come our way.

In conclusion, this year marks the 50th anniversary of Lend Lease – our history is built on the key values that underpin our endeavours today and which were established by the Company’s founder, Dick Dusseldorp: care for our people, safety and and respect for the environment.

David Crawford Chairman

Photo courtesy of BP Photographic Services

wITh The fIrsT ConTrACT AwArded In 1997, bovIs Lend LeAse And bp hAve worKed TogeTher In pArTnershIp To MAnAge bp’s reTAIL ouTLeT buILdIng progrAM ACross Three ConTInenTs over The yeArs.

Chief executive officer’s report

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I am pleased to report that Lend Lease has again performed reasonably well in an extremely difficult property market. Even more pleasing is the strong financial position the Company enjoys as we deal with tough market and economic conditions around the globe.

That financial strength – substantial cash on hand coupled with good operating cash flows and low debt – means that despite our setback in writing down Crosby Lend Lease inventory in the UK, we can stay our strategic course rather than selling assets at less than optimum value and exiting businesses to reduce excessive debt or prop up earnings.

Like most companies, we have lowered short term earnings expectations, but the financial and strategic underpinnings for long term shareholder value remain intact.

For financial year 2008, the key standouts were strong contributions from Bovis Lend Lease, especially in Australia and the Asia Pacific region, and from Actus Lend Lease in the United States with a backlog gross profit margin of $447.5 million.

We finalised an interim development management agreement with the United Kingdom’s Olympic Delivery Authority for the 2012 Athletes Village. Elsewhere in the UK, construction started at Greenwich Peninsula and Lend Lease was selected as preferred development partner for the massive Elephant & Castle residential redevelopment in south-east London.

2008 Annual Shareholder Review Lend Lease Corporation

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50 yeArs of
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Lend Lease
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sprIngboArd
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8/9

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Beyond financial prudence and strategic discipline, equally fundamental to the way we do business is our aim for sustainability in all we do. The global measurement program continues and we can report good progress this year. At the same time, we continue our focus on our vision to be Incident & Injury free. There were six fatalities across Lend Lease projects this year, down from nine in 2007. No fatality is ever acceptable.

It has been an honour to serve Lend Lease. I wish to record my sincere appreciation for the support and wise counsel Directors have afforded me as we have repositioned Lend Lease and strengthened its foundations for a long and successful future. I am also very grateful for the untiring support and valuable insights that I have been given by my senior executive colleagues and so many Lend Lease team members around the world.

The Investment Management business saw continued strong performance of funds, including capital recycling of co-investments. New equity of $700 million was raised and there is significant committed funds under management growth over the next three years from the development pipeline within the funds.

During the year, we reduced the carrying value of the UK Communities operations, principally Crosby Lend Lease, reflecting the currently weak UK residential market.

Finally, this is likely to be my last report to shareholders. Now in my sixth year of a seven year commitment that I gave the Board when I was appointed CEO, it is time to select the CEO to lead Lend Lease through its next phase of development. The search process is well under way and the Board will announce the appointment of my successor in due course. I will continue with my duties until then to ensure a smooth transition.

I believe that my successor will take charge of one of the best property businesses to be found in the world today and that Lend Lease is extremely well positioned for the property market recovery when it eventuates.

International accounting rules also required a reduction in the value of certain retail property investments. Importantly, these writedowns are non-cash and do not affect underlying cash flow or net operating profit. We continue to invest in the UK retail development pipeline based on long term fundamentals of that market. Our overall retail development pipeline stands at $4.8 billion. The Australian Communities operations continued to generate increased sales despite weaker market conditions.

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Greg Clarke Chief Executive Officer and Managing Director

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sprIngboArd Is Lend LeAse foundATIon’s gLobAL eMpLoyee deveLopMenT progrAM, TAKIng pLACe In ChIAng MAI, norThern ThAILAnd. pArTnerIng wITh An exIsTIng CoMMunITy orgAnIsATIon, The progrAM Is CenTred Around A susTAInAbILITy TheMe And eMpLoyees worK ALongsIde LoCAL sTudenTs.

strategic framework

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Lend Lease

our vision is to be the leading global property company.

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One Group Maximise A creator our enablers:
strategy returns out of great
delivered of property property
though a outcomes • A leader in safety
portfolio and sustainability
of leading
• A clever company
property
creating strong
businesses
intellectual capital
• Attracting and
retaining the best
people
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2008 Annual Shareholder Review Lend Lease Corporation
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50 yeArs of
Lend Lease
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10/11

1962 AusTrALIA sQuAre

retail segment summary	Communities	public private partnerships	project Management and Construction	Investment Management
Core Activities Asset ownership, development, property and asset management	Master planned greenfeld communities and urban regeneration	Military housing, healthcare, education and waste	Project management and construction	Asset ownership, real estate investment management services
Operating Revenue $130.7m	$969.5m	$962.7m	$12,426.8m	$127.3m
Proportion of Proft After Tax from Operating Businesses1 1 Before Group Services, Treasury, Property Investment Revaluations and Adjustment to Carrying Value of Inventory. 12.6%	19.2%	13.9%	28.1%	26.2%
Regional Business Operations Australia, Singapore, UK US	UK, Australia, US	UK, US	UK, Europe, Middle East, Americas, Asia Pacifc	Australia, Singapore, UK
,

retail report

	~~operating result $m~~ ~~08~~ ~~07~~ operating proft after tax Propertymanagement (14.2) (3.0) Investment income 80.3 73.7 operating proft after tax by geography Asia Pacifc 1.7 (0.9) Europe 42.3 51.7 Americas 22.1 19.9

Lend Lease holds an ownership interest in 16 centres, both directly and indirectly via managed funds.
The market value of Lend Lease’s interests in these centres declined to $2.0 billion, down from $2.5 billion in 2007. This was principally due to negative foreign exchange movements and weakening of capitalisation rates, principally in the UK.
Across the retail portfolio, trading performance has remained solid and the forward development pipeline sits at a strong $4.8 billion.
Profit after tax was down slightly to $66.1 million. This was due to higher overheads in the UK as the business continued to invest in its
development pipeline and the prior year included a residual development profit relating to the sale of Chapelfield, Norwich in the UK.

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Mixed-use development at 420 George Street, Sydney

2008 Annual Shareholder Review Lend Lease Corporation

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50 yeArs of
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12/13

Lend Lease

1994 bLuewATer

planning continues on the $250 million revitalisation of the Greensborough Town Centre in Melbourne which includes a regional aquatic and leisure centre, revitalised main street and improved public works;

CAse sTudy: Australian retail

The retail development pipeline: staying ahead of the game

• mixed-use development of Craigieburn Town Centre, a rare greenfield opportunity of 65 hectares designated as a regional town centre, located 25 kilometres north of Melbourne and adjacent to the Delfin Lend Lease master planned community at Craigieburn. The town centre will include a mix of retail, commercial and civic uses. On completion, the retail component is estimated to be valued in excess of $300 million;

With an enviable track record in retail development, Lend Lease Retail focuses on more than building, leasing and managing shopping centres.

Harnessing its development skills, Lend Lease Retail is constantly assessing ways to create exciting and sustainable destinations that both enhance existing communities and generate solid returns for investors.

In Australia, Lend Lease Retail has a $1.9 billion retail pipeline with the entire portfolio currently undergoing redevelopment, or in planning stages including:

imminent commencement of construction on a $52 million expansion to Caroline Springs Square, Melbourne with approximately 40 new stores and internal food court; and
420 George Street in Sydney, a $800 million mixed-use development combining 30 levels of commercial space above 40 speciality stores spanning four levels;

In 1994 Lend LeAse wAs InvITed To TrAnsforM A dIsused ChALK QuArry InTo europe’s LArgesT And MosT presTIgIous reTAIL And LeIsure desTInATIon. ThIs LAndMArK projeCT opened In 1999 And LAunChed Lend LeAse In europe.

Lend Lease retail is constantly assessing ways to create exciting and sustainable destinations that both enhance existing communities and generate solid returns for investors.

• partnering with Mackay Regional Council in Queensland to integrate enhanced community facilities with a $220 million retail and lifestyle expansion to Caneland Central. The proposed development will incorporate Mackay’s first department store, an expanded supermarket and 100 speciality stores – increasing the centre to 60,000 square metres of retail space.

Partnering with local councils on developments, Lend Lease Retail actively engages stakeholders with the aim of integrating the redevelopment within the local community in a financially viable and environmentally sustainable way, boosting employment opportunities for the local economy.

These developments draw on the value chain provided by Lend Lease’s integrated business model – leveraging from the Group’s expertise in development, retail management, construction and investment management.

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Communities report

	~~operating result $m~~ ~~08~~ ~~07~~ operating proft after tax Asia Pacifc 82.7 90.9 Europe 21.1 51.8 Americas (3.5) 0.7 gross sales value ofpre-sales Asia Pacifc 589.4 366.8 Europe 41.6 371.3

2008 Annual Shareholder Review Lend Lease Corporation

Global Communities’ operating profit after tax declined 30% to $100.3 million, from $143.4 million in 2007. This was primarily due to a reduced contribution from Crosby Lend Lease as a result of the significant slowdown in the UK residential market.
In light of the difficult market conditions in the UK residential market, Crosby Lend Lease has reduced the carrying value of its inventory by $121.5 million after tax.
Estimated sales value of Communities backlog reached $33.9 billion, including residential and commercial opportunities, with total residential backlog of 116,925 units and a total commercial backlog of 5.0 million square metres.
In Asia Pacific Communities, profit after tax was down slightly due to a lower level of commercial sales. There was also a change in product mix, with stronger residential land settlements being offset by a decrease in residential built-form.
In the UK, conditions for the Communities business remain very challenging. Despite this, we remain well placed with land management deals at Greenwich, Elephant & Castle and Stratford.
Our Communities business in the US involves two projects in the planning/ approval stages which we will only commence when market conditions recover.

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50 yeArs of

14/15

Lend Lease

1998 sydney oLyMpIC vILLAge

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CAse sTudy: Mawson Lakes breaks down barriers

This year the Mawson Lakes development project in South Australia marked its 10th birthday by winning one of the industry’s most coveted awards – ‘Best Masterplanned Development’ for its Mawson Central precinct from the Urban Development Institute of Australia. This is the second occasion Mawson Lakes has won this award, with the project in its entirety winning the award in 2004.

Developed by Delfin Lend Lease and the South Australian Land Management Corporation, the 620 hectare site has brought a fresh perspective to urban development characterised by a number of social, economic and environmental sustainability innovations since its inception.

Entrance to “The Peninsula”, Mawson Lakes South Australia

Located 12 kilometres north of Adelaide, more than 30% of the Mawson Lakes site is allocated to public recreational spaces including lakes and waterways and over 26 kilometres of walking and bike trails.

launcheD in 1998 in joint venture with Mirvac, newington was useD by athletes anD officials for the syDney 2000 olyMpics. post gaMes, the teMporary builDings were reMoveD anD the houses retrofitteD for the new owners.

environmentally sustainable development is one of the key drivers behind the Mawson Lakes project.

Environmentally sustainable development is one of the key drivers behind the Mawson Lakes project. The community’s recycled water system has established a benchmark in future sustainable urban development and is an Australian first in term of its size and scope.

All homes, businesses and organisations are connected to a recycled water system, in addition to normal drinking water supply. Treated stormwater as treated grey water is recycled for watering gardens, washing cars and toilet flushing. The system aims to reduce the usage of potable water in Mawson Lakes by 50%, compared to the Adelaide average.

Mawson Lakes also features trailblazing affordable housing products, such as the Delfin Studio 51. This product similarly won the Affordable Housing award from the Urban Development Institute of Australia this year.

On completion, Mawson Lakes will house approximately 10,000 people in 4,000 homes.

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public private partnerships report

	~~operating result $m~~ ~~08~~ ~~07~~ operating proft after tax Europe 0.8 14.3 Americas 72.2 43.0 project wins during period europe Financial close 1 1 Americas Preferred 1 3 Financial close 6 4

In the US, Lend Lease’s PPP business, Actus Lend Lease, delivered a profit after tax of $72.2 million, up 68% on 2007 profit after tax of $43.0 million. This was achieved primarily due to Actus Lend Lease achieving financial close on six projects during the year.
Backlog Gross Profit Margin for Actus Lend Lease is $447.5 million, which locks in Actus’s development and delivery workloads and margins for the next five years.
Actus Lend Lease currently has 19 projects, up from 16 in 2007.
In the UK, Lend Lease’s PPP business delivered a profit after tax of $0.8 million, down from $14.3 million in 2007. This was due to increased bid costs as new PPP projects came to market. Also, the prior year included the recovery of bid costs, principally on achieving financial close of the Lancashire Schools Phase 1 project.

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2008 Annual Shareholder Review Lend Lease Corporation

50 yeArs of

16/17

Lend Lease

2003 ArMy hAwAII fAMILy housIng

CAse sTudy:

ppp Camp Lejeune providing military families with a better quality of life

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The Camp Lejeune project is a leading example of Actus Lend Lease’s strong track record in creating quality master planned mixed-use communities for all branches of the US military.

Actus Lend Lease and the Department of the Navy joined forces to create Atlantic Marine Corps Communities (AMCC), a public private partnership created to provide military families with a better quality of life. Camp Lejeune is the largest Marine Corps installation in the world.

Actus Lend Lease, through AMCC, is managing housing on seven bases in four states. The broader Camp Lejeune project includes the design, development, construction, renovation and management of more than 8,000 homes across the seven installations over the next 50 years.

Serving more than 28,000 residents, the construction and renovation of homes will be complete by 2013. Actus Lend Lease will continue to own, operate and manage these new communities through at least 2055.

This year Actus Phase 3 is now under way and Lend Lease involves 15 construction components donated three and 11 land development homes to components in progress. The the hope for planning framework for the design the warrior made best use of the existing organisation, environment preserving natural allowing amenities such as water features, families a forest, parks and walking trails. place to stay while wounded Energy efficiency has also been a key feature in the development. marines In fact Camp Lejeune was also rehabilitate chosen as the kick-off project for the on base. Department of Energy/Department of Defense ‘Operation Change-Out’.

This year Actus Lend Lease donated three homes to the Hope for the Warrior organisation, allowing families a place to stay while wounded marines rehabilitate on base. The project also includes a Boundless Playground[®] which provides a family focus that allows both wounded and/or handicapped family members to play together, a warrior fitness trail and dog park amenities – which are the first of their kind in any Actus community.

Tarawa Terrace homes at Camp Lejeune

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AwArded To ACTus Lend LeAse In 2003 , ThIs Is The LArgesT MILITAry housIng prIvATIsATIon projeCT AwArded by The us ArMy.

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Bovis Lend Lease delivered a strong result with improved performance across all markets. Global profit after tax was $147.2 million, up significantly on the June 2007 result of $43.3 million, which included an $118.8 million after tax provision taken against certain UK projects, including the Manchester Joint Hospitals project.

project Management and Construction report

• In Asia Pacifc, proft after tax
was up 26% to $69.0 million
from $54.6 million in 2007,
refecting strong market
conditions and successful
completion of a number
of projects in Australia.
~~operating result $m~~
~~08~~
~~07~~
operating proft after tax
Asia Pacifc
69.0
54.6
Europe
18.5
(77.2)
Americas
59.7
65.9
proftabilityratio(ebITdA/realised gpM)
Asia Pacifc
50%
44%
Europe
17%
n/a
Americas
34%
47%
gross margin(realised gpM/revenue)
5%
3%

In Europe, the UK business continues to return to normal levels of profit, although the business continues to be impacted by the work-out of the loss-making UK projects reported in 2007. The remainder of the European business continued to generate a strong performance.
In the Americas, profit after tax was impacted by costs relating to a fire at the former Deutsche Bank building in New York and the negative impact of currency movements.
Backlog Gross Profit Margin increased by 10% to $788.3 million, with 57% expected to be realised as profit in the 2009 financial year.

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2008 Annual Shareholder Review Lend Lease Corporation

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50 yeArs of
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18/19

Lend Lease

2004 TIMe wArner CenTer

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CAse sTudy: durrat Al bahrain Islands in the sun

Durrat Al Bahrain, a luxury residential, commercial and tourist resort project, is designed to eventually accommodate around 60,000 people and is the first major tourism development to be project managed by Bovis Lend Lease in the Kingdom of Bahrain.

Located at the southern end of Bahrain in the Persian Gulf, Bovis Lend Lease has been appointed in joint venture with Kuwaiti Manager Company to provide development and project management services for the first phases of the coastal resort city, a US$6 billion joint development between the Government of Bahrain and Kuwait Finance House.

Aerial view of Durrat Al Bahrain, in the southern end of the Persian Gulf

Durrat Al Bahrain is a challenging design, consisting of reclaimed land and extensive coastal sculpturing. The 21 square kilometre site has 12 islands made up of six residential atolls, five residential petals and a central island hotel linked by a series of bridges. Each atoll supports approximately 160 villas offering either direct beach

LoCATed AT CoLuMbus CIrCLe In MIdTown MAnhATTAn, ThIs LAndMArK buILdIng wAs one of The LArgesT sIngLe buILdIng projeCTs In new yorK hIsTory. bovIs Lend LeAse underTooK The projeCT MAnAgeMenT And ConsTruCTIon.

The 21 square kilometre site has 12 islands made up of six residential atolls, five residential petals and a central island hotel linked by a series of bridges.

access or water aspects providing mooring facilities, together with exclusive community facilities, with 125–145 villas on each petal and a common beach area and similar facilities to the atolls. The project includes a further three islands that make up a 400 berth marina.

Bovis Lend Lease has structured the project into a large number of work packages, varying from design and consultancy assignments, to construction and concession contracts. First phases of the project cover dredging and reclamation, shore protection, bridges, roads, services and utilities, landscaping, villas, golf course, clubhouse and community facilities. Future works will include high rise buildings, retail malls, hotels, schools, hospitals and other amenities necessary to build a city in the desert.

The project commenced in 2004 and is on track, with all the islands and mainland reclamation completed. Infrastructure work is well underway for Phases 1 & 2 and the first villas are scheduled for occupation in 2008.

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Investment Management report

	~~operating result $m~~ ~~08~~ ~~07~~ operating proft after tax Funds management 54.1 28.7 Investment income 83.2 160.4 operating proft after tax by geography Asia Pacifc 71.8 29.7 Europe 61.9 153.4 Americas 3.6 6.0 fuMgrowth fy08 on fy07 4%

Total operating profit after tax for Investment Management declined to $137.3 million, down from $189.1 million in 2007. This was primarily due to the prior year containing a $136.6 million after tax distribution from the Global Fund, whereas the distribution for 2008 was $9.2 million after tax.
Funds under management rose 4% to $9.3 billion, up from $8.9 billion in 2007.
Investment Management continued its policy of capital recycling with the sale of a proportion of Lend Lease’s interest in the Australian Prime Property Fund for a profit after tax of $40.1 million.
Investment Management continued to see strong performance from its managed funds during 2008 which flowed directly to performance fee earnings.
New equity of $700 million+ was raised and there is significant committed funds under management growth over the next three years from the development pipeline within the various funds.

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2008 Annual Shareholder Review Lend Lease Corporation

50 yeArs of

20/21

Lend Lease

1989 AusTrALIAn prIMe properTy fund

CAse sTudy:

Investment Management what large and sophisticated institutional real estate investors increasingly want

Capital flows around the world are changing. Liquidity challenges across investment markets have had a transformational impact on how wholesale real estate investment products are packaged and delivered.

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Institutional equity demand is increasingly segmented by factors such as an investor’s scale, type and geography.

Drawing on Lend Lease’s asset creation capabilities, Lend Lease Investment Management is well positioned to meet this trend and has attracted more than $700 million in new equity for development projects over the past year.

The credit crunch has impacted liquidity and funding for new projects. Over the past few years, international and institutional investors have been actively looking to diversify their property exposure to the Australian and Asian markets.

According to Rod Leaver, Global CEO of Lend Lease Investment Management, “this investment trend is being driven by the very large minimum investment requirements and a desire for greater influence in investment decisions.”

over the past few years, international and

institutional investors have been actively looking to diversify their property exposure to the Australian and Asian markets.

“ We are seeing increased global demand for new product in Asia Pacific.

“ The size and scope of the Lend Lease development pipeline positions us as an attractive manager and partner. Institutional investors are becoming more aware of our competitive advantage in product creation and this underpins our ability to raise capital successfully.

“ We are looking to follow the flow of capital and will consider more flexibility in fund structuring, including joint ventures and partnerships, in addition to our existing funds which enhances the range of capital solutions we can provide.

“ We continue to draw on our extensive network to identify and deliver investment opportunities that are attractive for our investors. Mixed-use development projects, the apartments business and the Australian commercial sector all present competitive propositions to our investors.”

Macarthur Square, Campbelltown, New South Wales

MAnAged by Lend LeAse, Appf Is An open-ended whoLesALe fund whICh InvesTs In QuALITy porTfoLIos of predoMInAnTLy Core AusTrALIAn properTy. The fund wAs LAunChed In 1989 And hAs gross AsseTs of CIrCA $5 bILLIon.

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sustainability report environment, safety, people

Bovis Lend Lease Lost Time Injury Frequency Rate by Region and Global (per 200,000 man-hours)

Sustainability has been an integral part of our culture for 50 years and our employees insist that people, safety and environmental impact must be central to our business strategy.

Our sustainability performance is rated by independent agencies including the Carbon Disclosure Project report, undertaken on behalf of institutional investors representing over

US$57 trillion of assets under management; and Dow Jones Sustainability World Index (DJSI World), which is used to manage funds and other financial products worth almost US$6 billion.

Lend Lease was the first Australian property company to be included on DJSI World in 2001. Since then we have been included on the index each year from 2002–2004 and 2006–2008.

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FY06 FY07 FY08
3.43
1.95
1.85
1.63
1.46 1.42
1.29 1.3 1.05 1.25 1.15
0.91
0.33 0.32
0.11 0.12 0.08 0.20
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Australia
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----- Start of picture text -----

Asia
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Americas
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UK CEMEA Global
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22/23

environment

Every action we take and every measure we collect moves us closer to achieving our environmental aspirations. We realise being green is broader than energy and water efficiency. It is also about indoor environment quality, waste management and reduction, the materials we use, our management of an asset, land use and ecological impacts, access to alternative transport, and impacts on human health. In order to monitor, measure and report the ecological footprint of our activities, we have collected data on energy consumption, material consumption, waste generation, environmental condition (ecological significance) of land prior to our activity, land space occupied by asset and use, transportation impacts and water consumption.

safety

Lend Lease is committed to operating Incident & Injury Free wherever the Group has a presence. We work closely with partners, clients and contractors to create the safest possible places to work, live, or visit.

Over the past year the Lend Lease Group has undertaken a major transformation plan to implement the right guidelines, training tools, accountabilities and governance framework to embed safety across all our business practices.

Incident & Injury Free commitment criteria will also be a determining factor that applies to how all employees are measured and rewarded.

Lend Lease is striving to achieve a leadership position in safety operational performance, not only because it is the right thing – but because well run businesses operate safely.

people

For over 50 years, our commitment to our people has extended way beyond our day-to-day business operations. While we have a history of nurturing talent, in all its diversity, and urge professional excellence through training, mentoring and skills improvement, we are proud of the many employees who regularly volunteer their time and expertise to help individuals, organisations and communities. Go to www.lendlease.com/sustainability to read more about our employees who are making a difference.

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www.lendlease.com/sustainability

for lend lease’s full sustainability performance report, go to:

directors’ profiles

D A Crawford

G A Clarke Managing Director (Executive) Age 50

Chairman (Non Executive) Age 64

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

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

experience and Qualifications

Mr Clarke brings more than 25 years of 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 (Honours) Business Studies and a Master of Business Administration.

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 a 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 Non Executive Chairman of Foster’s Group Limited (appointed Director August 2001 and Chairman 31 October 2007) and a Non Executive Director of BHP Billiton Limited (appointed May 1994). He was formerly a Non Executive Director of Westpac Banking Corporation (appointed May 2002, resigned 14 December 2007) and National Foods Limited (appointed November 2001, resigned June 2005).

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

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24/25

P M Colebatch (Non Executive) Age 63

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 a 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) and a Non Executive Director of Man Group plc (appointed 1 September 2007).

G G Edington CBE (Non Executive) Age 62

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 was formerly Chairman of the Council of Trustees of the UK children’s charity, NCH.

other directorships and positions Nil.

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directors’ profiles

P C Goldmark (Non Executive) Age 67

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 United States of America (USA) based non-profit 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 10 years the President and Chief Executive Officer of the Rockefeller Foundation in New York. He has held positions including Senior Vice President of the Times-Mirror 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.

J A Hill (Non Executive) Age 62

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 and a Master of Arts in 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).

other directorships and positions

Nil.

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26/27

D J Ryan AO (Non Executive) Age 56

M Selway

R H Taylor (Executive) Age 46

(Non Executive) Age 49

Mr Selway joined the Board on 17 June 2008. experience and Qualifications

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.

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

Mr Selway is currently Chief Executive of The Weir Group PLC, a FTSE 250 engineering sector listed company headquartered in Scotland. He brings more than 30 years of experience in global business development, integration and management through various roles. Prior to joining the Weir Group in 2001, he was a member of the Supervisory Board of Schefenacker AG, and Executive Director of Britax International plc with line responsibility for the Automotive Components Division. Having spent much of his career managing engineering businesses in the USA, the UK and Australia, Mr Selway is regarded as a specialist in operational management and efficiency. He holds a Diploma in Industrial Engineering.

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. In May 2007 he was appointed Global Chief Operating Officer. Mr Taylor holds a Bachelor of Civil Engineering (Honours) from the University of Queensland.

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 Non Executive Chairman of Transurban Holdings Limited (appointed Director April 2003 and Chairman February 2007), ABC Learning Centres Limited (appointed Director June 2003 and Chairman 30 May 2008) and Tooth & Co Limited (appointed Director September 1999 and Chairman January 2003).

other directorships and positions Mr Selway is an Executive Director of The Weir Group PLC (appointed June 2001).

other directorships and positions Nil.

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director and executive remuneration

	other share short post based base Term employ- pay- fees fees ment ments1 Total ~~$000~~ ~~$000~~ ~~$000~~ ~~$000~~ ~~$000~~ non executive directors D Crawford 500 38 13 100 651 P Colebatch 140 92 13 36 281 G Edington 140 82 13 34 269 P Goldmark 140 88 13 36 277 J Hill 140 98 13 36 287 D Ryan 140 84 13 38 275 M Selway(appointed 17 June 2008) 5 1 6

1 Comprises entitlements under the Non Executive Directors’ Retirement Benefit Plan.

	other share short post based other Term employ- pay- Long salary fees ment ments Term Total ~~$000~~ ~~$000~~ ~~$000~~ ~~$000~~ ~~$000~~ ~~$000~~ executive directors G Clarke 1,929 771 668 (1,877) 28 1,519 R Taylor 1,046 189 254 2,590 15 4,094 executives S McCann 1,005 247 96 632 15 1,995

	other		share
	short Term	post employ-	based pay-	other Long
salary	fees	ment	ments	Term	Total
~~$000~~	~~$000~~	~~$000~~	~~$000~~	~~$000~~	~~$000~~

other executives in the category of the	other executives in the category of the	other executives in the category of the	other executives in the category of the	fve highest	paid	paid
M Coleman	487	903	263	689	8	2,350
W Hara	318	215	12	554	8	1,107
M Menhinnitt	658	663	360	135	9	1,825
B Soller	511	703	45	163	8	1,430
D Spencer	330	503	50	79	6	968

online

The Lend Lease website keeps Shareholders informed about the Company’s activities and performance. The Annual Report to Shareholders, results announcements, webcasts, presentations and news releases are all readily available on the Investor Information section of our website.

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www.lendlease.com

paper specifications

Stock Exchange uk register paper specifications Listings B Davis & Co Corporate Australia Park House New Zealand 158-160 Arthur Road directory Wimbledon Park Auditors London SW19 8AQ Lend Lease KPMG Corporation Limited 10 Shelley Street T: 44 (20) 8947 3361 ABN 32 000 226 228 Sydney NSW 2000 F: 44 (20) 8944 1039 W: www.bdavis.co.uk Incorporated in Share Registry and usa agent New South Wales, Shareholder Queries Australia principal register The Bank of New York Investor Services Registered Office Link Market PO Box 11258 Level 4, Services Limited Church Street Station back to a certified source. 30 The Bond Level 12, New York NY 10286-1258 30 Hickson Road 680 George Street T: 1 (212) 815 3700 Millers Point NSW 2000 Sydney NSW 2000 US Toll Free: T: 61 (2) 9236 6111 Locked Bag A14 1 888 269 2377 F: 61 (2) 9252 2192 Sydney South NSW 1235 E: shareowners Directors T: 1800 230 300 @bankofny.com D A Crawford, Chairman (within Australia) or W: www.adrbny.com G A Clarke, Managing 61 (2) 8280 7123 investor information Director (outside Australia) and Chief Executive Officer F: 61 (2) 9287 0303 Lend Lease’s Annual P M Colebatch E: registrars@link Report, financial G G Edington P C Goldmark W: www.linkmarket marketservices.com.au statements and other information on J A Hill services.com the Lend Lease Group can be obtained from D J Ryan Investor Relations. M W Selway R H Taylor T: 61 (2) 9236 6065 F: 61 (2) 9252 2192 Secretary E: lend.lease.investor. W Hara relations@lendlease. com.au W: www.lendlease.com precinct.com.au

The cover and editorial of this Report are printed on 9Lives 80, an environmentally responsible paper, containing 80 per cent post consumer fibre and 20 per cent totally chlorine-free pulp. It is an FSC certified mixed source paper, ensuring all virgin pulp is derived from well-managed forests. It is also manufactured by an ISO 14001 certified mill. The Forest Stewardship Council (FSC) is an international not-for-profit, non-government organisation promoting responsible forest management. FSC certification is recognised as a global standard in forest management practices and the Chain of Custody component ensures that the final product can be traced back to a certified source.

annual general Meeting

The 2008 Annual General Meeting of Lend Lease Corporation Limited will be held at 10.00am on Thursday, 13 November 2008 at City Recital Hall, Angel Place, Sydney NSW 2000. Full details of the Meeting are contained in the Notice of Annual General Meeting sent with this Report.

Celebrating 50 years of Lend Lease

lendlease.com

Lend Lease 2008 Annual Report to Shareholders

About Lend Lease

Americas Net Profit After Tax (NPAT)

29.4%

UK/Europe/Middle East NPAT 27.6%

Asia Pacific NPAT

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43.0%

Lend Lease is a leading property group with broad skills across the property value chain.

Our key markets are Asia Pacific, the Americas, the United Kingdom, Europe and the Middle East.

We operate an integrated business model and our earnings are well diversified by both market sector and geography.

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Retail

Retail comprises retail property management, property ownership, asset management and development in Australia, Singapore, the US and the UK. The strategy is to secure integrated positions which play to the Group’s core skills and involves all components of the property value chain.

Communities

The Communities business is involved in the development of large scale urban regeneration and greenfield development projects in Australia, the US and the UK. The Lend Lease business model includes land sourcing, master planning and design, product development and marketing.

Public Private

Partnerships (PPP)

The PPP business manages and invests equity in large PPP projects in the US and the UK. In the US the focus is on the Military Housing Privatization Initiative for all branches of the US military. In the UK the focus is on four sectors: health, education, waste and accommodation

Project Management and Construction

Project Management and Construction provides construction, project management and design services across all regions through Bovis Lend Lease. Key sectors include commercial, retail, residential, communications, industrial and pharmaceutical.

Investment

Management

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, held indirectly through investments in Lend Lease managed funds in Asia Pacific and the UK.

Five-year performance

Highlights

Operational

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----- Start of picture text -----

Dividends per share [1,4] Dividend payout ratio
on operating profit [1,2,4]
77¢
69.1%
04 05 06 07 08 04 05 06 07 08
Operating profit after tax [[1,2]] Earnings per share on
operating profits [1,3]
$447.1MM
111.5¢
04 05 06 07 08 04 05 06 07 08
¢ 34¢
¢ ¢ 42
31
¢ 29
26
% % % % %
18¢ 28¢ 30¢ 35¢ 4335 ¢ 69.2 79.5 68.8 69.2 69.1
M M M M M
¢ ¢
¢ ¢ ¢
$255.9 $285.7 $354.2 $445.9 $447.1 61.8 71.6 88.7 111.4 111.5
----- End of picture text -----

Construction Backlog Gross Profit Margin

Global construction backlog gross profit margin at 30 June was $788.3 million, up 10% on 2007 and represents two years of forward workload.
Funds under Management
Funds under Management grew by 4%, including a new managed investment mandate on behalf of a major institutional investor.

Development Pipeline

Lend Lease continues to have a significant development pipeline with an estimated gross development cost of $4.8 billion and a Communities backlog with an estimated sales value of $33.9 billion.

Financial

Continued Strong Performance

Earnings per share rose 8% over the year, excluding the impact of the ATO interest received of $32.2 million after tax in 2007.

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Operating profit after tax [[1,2]]
$447.1MM
04 05 06 07 08
Return on equity [1,5]
8.2%
04 05 06 07 08
M M M M M
$255.9 $285.7 $354.2 $445.9 $447.1
% % %
% %
9.0 11.9 14.7 15.7 8.2
----- End of picture text -----

Dividend per share of 77 cents, in line with 2007. This was a solid performance in difficult market conditions.

Balance Sheet Strength

As at 30 June, our gross debt to total tangible assets (including other financial liabilities) was 14.4% and our weighted average debt maturity was 11 years with 84% at fixed rates.
Interest cover was 7.2 times, above management target of six times.
Lend Lease retained its investment grade credit rating.

June 2005 to 2008 results prepared under Australian Equivalents to International Financial Reporting Standards (AIFRS). June 2004 represents Lend Lease’s results under previous Generally Accepted Accounting Principles (AGAAP).

1. June 2005 to 2008 results prepared under Australian Equivalents to International Financial Reporting Standards (AIFRS). June 2004	Contents
represents Lend Lease’s results under previous Generally Accepted Accounting Principles (AGAAP). 2. Operating proft excludes unrealised property investment revaluations and the inventory carrying value adjustment in 2008 (June 2008: $181.7 million). 3. Calculated using the weighted average number of shares on issue including treasury shares. 4. Dividends include interim dividend of 43 cents franked to 40% and fnal dividend of 34 cents franked to 45%. 5. Return on equity calculated based on statutory proft after tax.	Chairman’s letter 2
	Chief Executive Offcer’s report 3
	Strategic framework 4
	Segment summary 5
	Retail report 6
	Communities report 8
	Public Private Partnerships report 10
	Project Management and Construction report 12
	Investment Management report 14
	Sustainability report 16
	Corporate Governance 18
	Concise Financial Report 32
	Directors’report 69
	Board of Directors 70
	Remuneration report 74
	Shareholder information 162
	Corporate directory IBC

Operating profit excludes unrealised property investment revaluations and the inventory carrying value adjustment in 2008 (June 2008: $181.7 million).
Calculated using the weighted average number of shares on issue including treasury shares.

AGAAP AIFRS Interim Final

Lend Lease All financial amounts in this report Corporation Limited are in Australian Dollars unless ABN 32 000 226 228 otherwise stated.

Front cover image: The Lend Lease Gauge building in Victoria Harbour, Melbourne. Back cover image: The Bond building in Millers Point, Sydney.

Geographic diversification

We have operations in Asia Pacific, the Americas, the United Kingdom, Europe and the Middle East.

Americas Revenue

47.0%

Retail

Singapore, Australia, Americas, UK

~~Communities~~

UK/Europe/Middle East Revenue

29.5%

Asia Pacific Revenue

23.5%

Australia, UK, Americas

~~Public Private Partnerships (PPP)~~

Americas, UK

~~Project Management and Construction~~

Asia, Singapore, Australia, Americas, UK, Europe/Middle East

~~Investment Management~~

Singapore, Australia, Americas, UK

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Pipeline

Retail

Estimated size of Development Pipeline $4.8 billion

Number of Centres Managed 16 Assets under Management $10.8 billion Gross Lettable Area Under Management 931,100 square metres

Communities

Number of Residential Lots Globally 116,925

Size of Commercial Backlog Globally 5.0 million square metres Estimated Sales Value of Communities Backlog $33.9 billion Number of Communities Projects Globally 76

Public Private

~~Partnerships~~

Number of Projects UK – 19 US – 19

Units Under Management – Actus Lend Lease 44,750

Project Management and Construction

Investment

Management

Backlog Gross Profit Margin[1] $788.3 million New Work Secured[2] $715.5 million

Market Value of Lend Lease’s Co-investment in Lend Lease Managed Funds $603.8 million

Backlog Realisation Funds Under in 2009 Management 57% $9.3 billion Number of Funds Globally 10 Funds Under Management Growth 1. Backlog Gross Profit Margin on FY07 (GPM) is the expected GPM to be realised in future financial years 4% from contracts committed at the end of the year.

Backlog Realisation in 2009 57%

New work secured is the total project GPM to be earned from projects secured during the year, net of margin movements.

Quick facts

2008 performance at a glance

Total shareholders

Statutory profit[1]

51,623

Total number of employees

$265.4M

12,039 worldwide

Net operating profit

$447.1M

Earnings per share[2]

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111.5¢

Full year dividend[3]

77¢

Net operating profit after tax including property revaluations and adjustment to carrying value of inventory.
Calculated based on operating profit and total weighted average number of shares on issue including treasury shares.
Dividend includes interim dividend of 43 cents franked to 40% and final dividend of 34 cents franked to 45%.

Important dates in 2009 to add to your calendar

~~Contribution to operating proft from all fve business units~~

26.2% Investment Management 12.6% Retail

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19.2% Communities

13.9% Public Private Partnerships

28.1% Project Management and Construction

February Announcement of Half Year Results March Share price quoted ex dividend March Interim dividend record date March Interim dividend payable August Announcement of Full Year Results August Share price quoted ex dividend August Final dividend record date September Final dividend payable November* Annual General Meeting

Exact dates will be confirmed on the Lend Lease website Investor Relations section at www.lendlease.com in due course.

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Lend Lease is a member of the Dow Jones Sustainability World Index which is used by DJSI licensed asset managers to manage investments worth over US$5 billion each year.

2008 Annual Report to Shareholders Lend Lease Corporation 1

Chairman’s report

2008 marks the 50th

anniversary since Lend Lease Corporation was founded by Dick Dusseldorp in Sydney with a vision to create a company that successfully combined the disciplines of property, financing, development and investment. Lend Lease is now a leading global property company, bound together by the core values: people, safety and the environment. These values have underpinned Lend Lease’s success over the last 50 years and will steer the company over the next 50 years.

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50 Years of

Lend Lease

“ The time is not far off when companies will have to justify their worth to society, with greater emphasis being placed on environmental and societal impact than straight economics.”

Dick Dusseldorp 1973

Founder Lend Lease Corporation

The Lend Lease Gauge building (featured on the front cover) in Victoria Harbour, Melbourne is another step forward in the Company’s evolution to be the leader in developing sustainable solutions in the built environment. Completed this year, it has been awarded a 6-Star Green Star – Office Design Certified Rating from the Green Building Council of Australia, currently the highest award available. It is also a manifestation of the the Lend Lease integrated business model, with the design, development, project and construction management, funding and management all undertaken by Lend Lease.

Share prices have been adversely impacted by the global turmoil, reflecting investor uncertainty and often a disregard for the underlying strengths of the businesses involved.

The Company’s conservative asset leverage and measured use of capital recycling ensures there is no pressure to realise assets to meet stated financial objectives. Instead, the Board and management continue to look through the cycle and maintain a clear focus on business fundamentals.

Outlook

David Crawford Chairman

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The Bond building in Millers Point, Sydney, head office to Lend Lease’s international operations [featured on the back cover], was one of Australia’s first 5-Star Green Star commercial office buildings. Completed in 2004, it is yet another example of Lend Lease’s capability of delivering great property outcomes.

During the year, we reduced the carrying value of the UK Communities operations, principally Crosby Lend Lease, reflecting the currently weak UK residential market.

Chief executive officer’s report

“ For financial year 2008, the key standouts were strong contributions from Bovis Lend Lease, especially in Australia and the Asia Pacific region, and from Actus Lend Lease in the United States with a backlog gross profit margin of $447.5 million.

Lend Lease continues to focus on areas where we have strong market positions and competitive advantage. Our diverse development pipeline and $9.3 billion in assets under management give the Company flexibility in its business planning. Like most companies, we have lowered short term earnings expectations, but the financial and strategic underpinnings for long term shareholder value remain intact.

“ Lend Lease continues to focus on areas where we have strong market positions and competitive advantage.”

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Greg Clarke Chief Executive Officer and Managing Director

2008 Annual Report to Shareholders Lend Lease Corporation 3

strategic framework

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Lend Lease

our vision is to be the leading global property	One Group strategy delivered though a portfolio	our enablers: • A leader in safety and sustainability
company.	of leading property businesses	• A clever company creating strong intellectual capital
		• Attracting and
		retaining the best
		people

50 Years of

Lend Lease

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1962 australIa sQuare
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1
2
3
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July 2007

Lend Lease selected for £1.5 billion regeneration of 23 hectares of previously developed land at Elephant & Castle in central London

september 2007

Bovis Lend Lease part of consortium selected for
$850 million Royal Children’s Hospital redevelopment in Melbourne – the largest hospital development in Australia
Bovis Lend Lease awarded $470 million contract for the redevelopment of The Beville Group’s Top Ryde shopping centre in north-west Sydney
Bovis Lend Lease appointed by QIC as managing contractor for the $180 million expansion of Robina Town Centre on Queensland’s Gold Coast
1 Media City, Manchester, UK
Lutanda Manor Retirement Village, Sydney
Royal Children’s Hospital, Melbourne, Victoria
Lend Lease Group reaffirmed as a global sustainability leader by Dow Jones Sustainability World Index, achieving the best score in its industry group (Real Estate Holding & Development, Financial Services)
Lend Lease enters joint venture agreement with Grosvenor Group to acquire a 50% interest in the £700 million Tithebarn development opportunity in Preston, UK

october 2007

Lend Lease selected as partner by the University of Western Sydney for the redevelopment of its four hectare Westmead site to incorporate a new town centre for the area with an end value of approximately $250 million
Bovis Lend Lease appointed by Sydney Airport Corporation Limited as managing contractor for the expansion of Sydney International Terminal
Lend Lease Investment Management appoints Tony Brown as the CEO of its UK business

retail segment summary	Communities	Public Private Partnerships	Project Management and Construction	Investment Management
Core Activities Asset ownership, development, property and asset management	Master planned greenfeld communities and urban regeneration	Military housing, healthcare, education and waste	Project management and construction	Asset ownership, real estate investment management services
Operating Revenue $130.7m	$969.5m	$962.7m	$12,426.8m	$127.3m
Proportion of Proft After Tax from Operating Businesses1 1 Before Group Services, Treasury, Property Investment Revaluations and Adjustment to Carrying Value of Inventory. 12.6%	19.2%	13.9%	28.1%	26.2%
Regional Business Operations Australia, Singapore, UK US	UK, Australia, US	UK, US	UK, Europe, Middle East, Americas, Asia Pacifc	Australia, Singapore, UK
,

CoNstruCtIoN CoMMeNCeD IN1962, aND rePreseNteD a serIes of fIrsts IN DesIgN MethoD aND MaterIals. CoNstruCteD bY CIvIl & CIvIC, It was offICIallY oPeNeD IN1968aND for MaNY Years houseD the CoMPaNY’s heaDQuarters.

November 2007

Bovis Lend Lease signs a £351 million management contract for development of the Media City scheme for Peel Property Group in Manchester, UK
Appointment of Rod Leaver as Global CEO of Lend Lease Investment Management
Lend Lease and Quintain Estates and Development launch a major new business district at London’s Greenwich Peninsula with the announcement of a new deal with Transport for London, with Bovis Lend Lease undertaking the construction at Peninsula Central
Lend Lease Investment Management becomes first global property investment manager to become a signatory to UN Principles of Responsible Investment Proposal

December 2007

Lend Lease managed Australian Prime Property Fund Commercial acquires landmark Brisbane commercial properties together with an overseas institutional investor for $454 million
Lend Lease Development secures development contract for new Myer headquarters at Victoria Harbour, Melbourne with Bovis Lend Lease undertaking the design and construction and Australian Prime Property Fund Commercial as owner upon completion

January 2008

Actus Lend Lease selected for US$420 million US Army family housing project at Fort Wainwright and Fort Greely in Alaska

March 2008

Lend Lease acquires Craigieburn Town Centre, a 65 hectare greenfield development site north of Melbourne, adjacent to the Delfin Lend Lease Craigieburn master planned community

May 2008

Delfin Lend Lease selected by Land Management Corporation of South Australia as preferred tenderer for the development of an 88 hectare site at Blakeview on the northern outskirts of Adelaide
Retirement by Design extends its retirement village portfolio with the acquisition of Lutanda Manor retirement village at Pennant Hills in Sydney for $16 million

June 2008

Lend Lease acquires an initial substantial shareholding in Babcock & Brown Communities Group
Bovis Lend Lease appointed by the Queensland Government to deliver new Brisbane Supreme Court and District Court precinct with a contract value of approximately $475 million

2008 Annual Report to Shareholders Lend Lease Corporation 5

retail report

	~~operating result $m~~ ~~08~~ ~~07~~ operating proft after tax Propertymanagement (14.2) (3.0) Investment income 80.3 73.7 operating proft after tax by geography Asia Pacifc 1.7 (0.9) Europe 42.3 51.7 Americas 22.1 19.9

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Lend Lease holds an ownership interest in 16 centres, both directly and indirectly via managed funds.
The market value of Lend Lease’s interests in these centres declined to $2.0 billion, down from $2.5 billion in 2007. This was principally due to negative foreign exchange movements and weakening of capitalisation rates, principally in the UK.
Across the retail portfolio, trading performance has remained solid and the forward development pipeline sits at a strong $4.8 billion.
Profit after tax was down slightly to $66.1 million. This was due to higher overheads Mixed-use development at 420 George Street, Sydney in the UK as the business continued to invest in its development pipeline and the prior year included a residual development profit relating to the sale of Chapelfield, Norwich in the UK.

50 Years of Lend Lease

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1994 bluewater
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outlook

• In Australia, retail sales are beginning to slow. Our retail business in Australia provides a platform of work for Investment Management and Bovis Lend Lease. With ownership of most of the centres through our funds, we have limited downside from a move in valuations.

• In Singapore, retail sales are also slowing, but from a higher base, with the underlying economy still relatively strong. We continue to look for further acquisitions in conjunction with the Lend Lease Asian Retail Investment Fund.

• Valuations across the UK portfolio were negatively impacted due to continuing weakness in capitalisation rates. However the viability of our development pipeline in the UK remains sound, with retail positions in strong catchment areas with good demographics and low holding costs.

the Sydney central business district. Completion of this development is expected in 2011.

Year in Review

Key events asia Pacific

Construction and pre-leasing progressing on schedule • Commencing the at the 313@Somerset retail redevelopment of the Paradiz development, one of the Centre, a retail and office last remaining major retail building in Singapore. development opportunities Completion of the on Orchard Road, Singapore. redevelopment is expected The development is expected in 2009. to be completed in 2010.
Acquisition of Craigieburn
• Construction commencing on Town Centre, a greenfield the 420 George Street retail mixed-use development and office development in opportunity in northern Melbourne, Victoria.

	~~Portfolio summary~~ ~~08~~ ~~07~~ No. of centres managed 16 16 Assets under management $b 10.8 12.0 Propertyinvestment revaluations $m (71.5)38.1 Retail developmentpipeline $b 4.8 5.3

Case stuDY:

australian retail

the retail development pipeline: staying ahead of the game

With an enviable track record in retail development, Lend Lease Retail focuses on more than building, leasing and managing shopping centres.

In Australia, Lend Lease Retail has a $1.9 billion retail pipeline with the entire portfolio currently undergoing redevelopment, or in planning stages including:

420 George Street in Sydney, a $800 million mixed-use development combining 30 levels of commercial space above 40 speciality stores spanning four levels;
planning continues on the $250 million revitalisation of the Greensborough Town Centre in Melbourne which includes a regional aquatic and leisure centre, revitalised main street and improved public works;

planning continues on the $250 million lend lease revitalisation of the Greensborough retail is Town Centre in Melbourne which constantly includes a regional aquatic and leisure assessing centre, revitalised main street and ways to create improved public works; exciting and sustainable • mixed-use development of Craigieburn destinations Town Centre, a rare greenfield that both opportunity of 65 hectares designated enhance as a regional town centre, located existing 25 kilometres north of Melbourne communities and adjacent to the Delfin Lend and generate Lease master planned community solid returns at Craigieburn. The town centre will for investors. include a mix of retail, commercial and civic uses. On completion, the retail component is estimated to be valued in excess of $300 million;

imminent commencement of construction on a $52 million expansion to Caroline Springs Square, Melbourne with approximately 40 new stores and internal food court; and
partnering with Mackay Regional Council in Queensland to integrate enhanced community facilities with a $220 million retail and lifestyle expansion to Caneland Central. The proposed development will incorporate Mackay’s first department store, an expanded supermarket and 100 speciality stores – increasing the centre to 60,000 square metres of retail space.

IN 1994 leND lease was INvIteD to traNsforM a DIsuseD Chalk QuarrY INto euroPe’s largest aND Most PrestIgIous retaIl aND leIsure DestINatIoN. thIs laNDMark ProJeCt oPeNeD IN 1999 aND lauNCheD leND lease IN euroPe.

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europe

Acquiring a 50% interest in the Tithebarn, Preston scheme from Grosvenor Estates.
During the year the Development Management Service Agreement with Minerva Plc was terminated on Park Place, Croydon. In addition, the Cooperation Agreement with Stockport Metropolitan Borough Council for the development of Bridgefield, Stockport expired.

americas

In the Americas, Lend Lease’s Retail business comprises a 50% ownership interest in the partnership that owns the King of Prussia Mall in Pennsylvania. Lend Lease’s share of partnership income for the year was up 4% in US dollar terms compared to the prior year.

Case stuDY:

retail sustainability Initiative saving lives

Cardiovascular disease remains the leading cause of death in Australia, claiming a life every ten minutes.

Trials previously conducted have shown that if an individual is electrically defibrillated within five minutes of commencing sudden cardiac arrest, their chance of survival increases to 50%, and continues to improve for every minute this time is reduced. In recognition of the need to reach a person within a five minute period, all seven major shopping centres managed by Lend Lease Retail in Australia are now equipped with a total of 25 defibrillators positioned at strategic locations within the centres.

Working closely with St John Ambulance in each State, each of our centre management and customer care teams has been trained in the use of this life saving equipment to ensure that we are able to provide a medical emergency first response capability.

… all seven This training has already been put major shopping to good use at Cairns Central, where centres recently a patron was successfully managed by resuscitated by operational staff at the lend lease centre prior to transfer to hospital. retail in australia are now equipped with a total of 25 defibrillators positioned at strategic locations within the centres.

Serge Carlesso (Operations Manager) (L) and Warren Gardiner (Assistant Operations Manager) (R) Cairns Central

2008 Annual Report to Shareholders Lend Lease Corporation 7

Communities • Global Communities’ • In Asia Pacific Communities, operating profit after profit after tax was down tax declined 30% to slightly due to a lower
report $100.3 million, from level of commercial sales. $143.4 million in 2007. There was also a change in This was primarily due to product mix, with stronger a reduced contribution residential land settlements from Crosby Lend Lease being offset by a decrease as a result of the significant in residential built-form. slowdown in the UK • In the UK, conditions for
residential market. the Communities business
• In light of the difficult remain very challenging. market conditions in the UK Despite this, we remain
~~operating result $m 08 07~~ residential market, Crosby well placed with land Lend Lease has reduced the management deals at
operating profit after tax carrying value of its inventory Greenwich, Elephant & Castle by $121.5 million after tax. and Stratford.
Asia Pacific 82.7 90.9 • Estimated sales value of • Our Communities business
Europe 21.1 51.8 Communities backlog in the US involves two Americas (3.5) 0.7 reached $33.9 billion, projects in the planning/ including residential and approval stages which we
gross sales value of pre-sales commercial opportunities, will only commence when Asia Pacific 589.4 366.8 with total residential backlog market conditions recover. of 116,925 units and a total
Europe 41.6 371.3 commercial backlog of 5.0 million square metres.

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50 Years of Lend Lease

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1998 sYDNeY olYMPIC vIllage
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outlook

In terms of outlook in Asia Pacific:
inner city apartments remain strong but are not immune to market conditions;
in our residential land business, the outer Sydney market remains flat. We have seen strong growth in Melbourne, Queensland and South Australia, however these markets are now slowing; and
we will continue to look for opportunities in the retirement sector and expect there to be further consolidation.
In the UK market, conditions remain very challenging. Our UK residential pipeline is sound with key projects such as Elephant & Castle, Greenwich and Stratford each progressing through various stages of the development process.
Year in Review • Selection as the preferred proponent to develop the
Key events asia Pacific Darling Walk site, a 64,000 square metre commercial
• Residential land settlements increased significantly due to project at Darling Harbour, Sydney.
improved trading conditions in Queensland, Victoria and • Entering into a contract with South Australia. Australian Prime Property Fund Commercial for the
• Securing the rights to acquire development of the new
219 hectares of land at 29,130 square metre office for Gawler, South Australia, Myer in the Victoria Harbour
which adds 2,750 lots to precinct, Melbourne.
unzoned backlog. • Acquisition of Lutanda Manor
• Selection as preferred retirement village at Pennant
tenderer to develop 88 Hills, Sydney, managed by
hectares of land at Blakeview, Retirement by Design.
South Australia, adding 1,600 lots to unzoned backlog. ~~Portfolio summary 08 07~~ backlog (residential lots and apartments) Asia Pacific 85,330 84,945 Europe 14,470 14,720 Americas 17,125 15,881
In the US, we have a small exposure to the residential market through two projects in Denver.

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environmentally sustainable development is one of the key drivers behind the Mawson lakes project.

Case stuDY: Mawson lakes breaks down barriers

Entrance to “The Peninsula”, Mawson Lakes South Australia

Launched in 1998 in joint ventuRe with MiRvac, newington was used bY athLetes and officiaLs foR the sYdneY 2000 oLYMpics. post gaMes, the teMpoRaRY buiLdings weRe ReMoved and the houses RetRofitted foR the new owneRs.

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europe

The gross sales value of units settled decreased by $143.0 million, primarily due to the slowdown in the UK housing market.
In March 2007, Lend Lease was appointed as preferred bidder for the development of Stratford City by the Olympic Delivery Authority (ODA) and London and Continental Railways (LCR). Lend Lease is in negotiations with the ODA and LCR to agree a Regeneration Agreement governing the development arrangements.

Greenwich Peninsula

Case stuDY:

… 150 shops and restaurants, 48 acres of parks and green spaces, healthcare facilities, schools and a world-class entertainment complex – the o2 …

greenwich Peninsula Massive uk urban regeneration project

During the year Lend Lease and its partners were selected as preferred development partner for the Elephant & Castle project, a large mixed-use regeneration scheme in London.

In December 2001 Lend Lease and Quintain Estates and Development PLC, in joint venture as Meridian Delta Limited, were selected by English Partnerships as preferred bidder for the urban regeneration of Greenwich Peninsula in London.

On completion, Mawson Lakes will house approximately 10,000 people in 4,000 homes.

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With 1.6 miles of river frontage, this £5 billion landmark development of 80 hectares is one of the largest ever in the United Kingdom and will include homes for 25,000 people, jobs for 24,000, 3.5 million square feet of office space, 150 shops and restaurants, 48 acres of parks and green spaces, healthcare facilities, schools and a world-class entertainment complex – The O2, which has won a number of awards since opening in June 2007.

Construction is already under way by a number of leading house builders on a range of residential accommodation in four distinctive new neighbourhoods, including affordable housing being developed by housing associations for key workers and those on low incomes.

The first commercial building, which has been partially pre-let to Transport for London, is being constructed by Bovis Lend Lease at Peninsula Central, a new business district for London.

2008 Annual Report to Shareholders Lend Lease Corporation 9

Public Private Partnerships report

	~~operating result $m~~ ~~08~~ ~~07~~ operating proft after tax Europe 0.8 14.3 Americas 72.2 43.0 Project wins during period europe Financial close 1 1 americas Preferred 1 3 Financial close 6 4

50 Years of Lend Lease

outlook

• In the UK, the Private Finance Initiative (PFI) market is underpinned by a steady pipeline over the next 10 years across the schools, health and waste sectors.

As we have said previously … we will look at selling down our equity positions in PFI projects either into a fund or individually.
In the Americas, with the initial family housing sector nearly complete in terms of new project awards, our PPP business, Actus Lend Lease, will grow from mining out opportunities in the lodgings and barracks sectors as well as applying its proven skill-set to other services for the military.

• These include affordable housing, energy, overseas bases and investigating other privatisation opportunities on Navy bases to replicate the success of the family housing privatisation scheme.

In the US, Lend Lease’s PPP business, Actus Lend Lease, delivered a profit after tax of $72.2 million, up 68% on 2007 profit after tax of $43.0 million. This was achieved primarily due to Actus Lend Lease achieving financial close on six projects during the year.

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Backlog Gross Profit Margin for Actus Lend Lease is $447.5 million which locks in Actus’s development and delivery workloads and margins for the next five years.
Actus Lend Lease currently has 19 projects, up from 16 in 2007.
In the UK, Lend Lease’s PPP business delivered a profit after tax of $0.8 million, down from $14.3 million in 2007. This was due to increased bid costs as new PPP projects came to market. Also, the prior year included the recovery of bid costs, principally on achieving financial close of the Lancashire Schools Phase 1 project.

2003 arMY hawaII faMIlY housINg

Selection as preferred bidder on the privatisation contract for Fort Wainwright and Fort Greely in Fairbanks, Alaska. The estimated construction value of this project is US$370.0 million.

Year in Review

Key events americas

Increased development fee income as six projects reached financial close in the year, namely Air Combat Command Group II, Fort Drum Unaccompanied Officer Quarters, Hickam Phase 2, Tri-Group, Camp Lejeune Phase 3 and Fort Drum Additional Scoring (an extension to the Fort Drum privatisation contract).
Increasing units under management by 2,350 to 44,750 units, with occupancy levels across the portfolio continuing to meet project expectations.

	~~Portfolio summary~~ ~~08~~ ~~07~~ americas Units under management 44,750 42,400 Estimated capital spend US$b 5.9 5.3 europe No. ofprojects 19 19 Facilities management revenue backlog£m 366 350 Invested equity£m 71 51

Case stuDY:

PPP Camp lejeune Providing military families with a better quality of life

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Tarawa Terrace homes at Camp Lejeune

The Camp Lejeune project is a leading example of Actus Lend Lease’s strong track record in creating quality master planned mixed-use communities for all branches of the US military.

Actus Lend Lease and the Department of the Navy joined forces to create Atlantic Marine Corps Communities (AMCC) a public private partnership created to provide military families with a better quality of life. Camp Lejeune is the largest Marine Corps installation in the world.

this year actus Phase 3 is now under way and lend lease involves 15 construction components donated three and 11 land development homes to components in progress. The the hope for planning framework for the design the warrior made best use of the existing organisation, environment preserving natural allowing amenities such as water features, families a forest, parks and walking trails. place to stay while wounded Energy efficiency has also been a key feature in the development. marines In fact Camp Lejeune was also rehabilitate chosen as the kick-off project for the on base. Department of Energy/Department of Defense ‘Operation Change-Out’.

This year Actus Lend Lease donated three homes to the Hope for the Warrior organisation, allowing families a place to stay while wounded marines rehabilitate on base. The project also includes a Boundless Playground[®] which provides a family focus that allows both wounded and/ or handicapped family members to play together, a warrior fitness trail and dog park amenities – which are the first of their kind in any Actus community.

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awarDeD to aCtus leND lease IN 2003 , thIs Is the largest MIlItarY housINg PrIvatIsatIoN ProJeCt awarDeD bY the us arMY.

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europe

Achieving financial close on Phase 2 of the £1.0 billion Lancashire Building Schools for the Future (BSF) project.
An increase in the number of operational assets, with the operational handover of the £175.0 million Leeds Hospital, additional phases of the £169.0 million Sheffield University Student Accommodation and the £24.0 million Phase 3 of Hexham Hospital.
Selection as one of two remaining bidders on the £1.0 billion Birmingham BSF project and the £0.4 billion Salford BSF project.

Case stuDY:

lancashire County Council plans to divert 80% of the county’s household waste away from local landfill sites.

lancashire waste recycling waste for 1.4 million people

In 2007 the Lend Lease UK PFI business established a promising foothold in the UK waste management sector with a joint venture agreement for the design, construction and operation of two central waste treatment facilities for Lancashire County Council, under a 25 year contract.

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Lend Lease has a 50% stake in the special purpose vehicle with Global Renewables, a wholly owned subsidiary of GRD Ltd.

The £240 million project provides facilities and services to manage contract waste in an environmentally and economically sustainable manner and will meet the European Landfill Directive.

Lancashire County Council plans to divert 80% of the county’s household waste away from local landfill sites by having the waste sorted and recycled in two high tech plants now being built by Bovis Lend Lease and operated by its joint venture partner, Global Renewables.

Bovis Lend Lease and Global Renewables are designing, constructing and operating the plants, which will be capable of handling up to 750,000 tonnes a year of domestic refuse generated by Lancashire’s 1.4 million population. The two plants are due to go into service in 2010.

Plant under construction at Thornton

2008 Annual Report to Shareholders Lend Lease Corporation 11

Bovis Lend Lease delivered • In Europe, the UK business a strong result with improved continues to return to performance across all normal levels of profit, markets. Global profit after although the business tax was $147.2 million, continues to be impacted up significantly on the by the work-out of the June 2007 result of loss-making UK projects $43.3 million, which included reported in 2007. The an $118.8 million after tax remainder of the European provision taken against business continued to certain UK projects, including generate a strong the Manchester Joint performance. Hospitals project.

Project Management and Construction report

Hospitals project.
• In Asia Pacifc, proft after tax
was up 26% to $69.0 million
from $54.6 million in 2007,
refecting strong market
conditions and successful
completion of a number
of projects in Australia.
• In the Americas, proft
after tax was impacted by
costs relating to a fre at
the former Deutsche Bank
building in New York and the
negative impact of currency
movements.
• Backlog Gross Proft
Margin increased by 10%
to $788.3 million, with 57%
expected to be realised
as proft in the 2009
fnancial year.
~~operating result $m~~
~~08~~
~~07~~
operating proft after tax
Asia Pacifc
69.0
54.6
Europe
18.5
(77.2)
Americas
59.7
65.9
Proftabilityratio(ebItDa/realised gPM)
Asia Pacifc
50%
44%
Europe
17%
n/a
Americas
34%
47%
gross margin(realised gPM/revenue)
5%
3%

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50 Years of

Lend Lease

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2004 tIMe warNer CeNter

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outlook

In Asia Pacific, we continue to see strong market conditions for social infrastructure, particularly hospitals.
In the UK, despite some slowdown in commercial, we are still seeing opportunities in government. In addition, there are big opportunities for low risk growth in Eastern Europe and the Middle East which we will look to pursue over the next three years.
In the Americas in terms of outlook, top line growth in the business is expected to soften.

Priorities

Safety
Driving consistent and sound operating disciplines across all the operating regions.
Continued focus on margin improvement – ensuring we get the risk/ reward balance right.
We will continue to expand into new markets with an increasing focus on growth economies such as India, Eastern Europe and the Middle East.

	Year in Review	• In Asia, the
•	Key events asia Pacifc Key contributions to gross proft margin in Australia included the Rouse Hill Town Centre retail project	telecommunications rollout in Japan and the Singapore Capacity Expansion project were key contributors to gross proft margin during the year.
	in Sydney, the Queensland	americas
	Government Preparatory	• Proft after tax was negatively
	Schools rollout and the	impacted by foreign
	Correctional Facilities projects	exchange movements of
	in Queensland, and the Australian Taxation Offce	$8.4 million and costs relating to the fre at the former
	building and Australian	Deutsche Bank building
	Capital Territory Correctional	in New York.
	Facility in Canberra.

	~~backlog~~ ~~08~~ ~~07~~ BacklogGross Proft Margin $m 788.3 717.2 New work secured GPM $m 715.5 480.7 backlogrealisation Year 1 57% 59% Year 2 29% 27% 3years + 14% 14%

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Aerial view of Durrat Al Bahrain, in the southern end of the Persian Gulf

Case stuDY: Durrat al bahrain Islands in the sun

the 21 square access or water aspects providing kilometre site mooring facilities, together with has 12 islands exclusive community facilities, with made up of 125–145 villas on each petal and six residential a common beach area and similar atolls, five facilities to the atolls. The project residential includes a further three islands that petals and a make up a 400 berth marina. central island Bovis Lend Lease has structured hotel linked the project into a large number of by a series work packages, varying from design of bridges. and consultancy assignments, to construction and concession contracts. First phases of the project cover dredging and reclamation, shore protection, bridges, roads, services and utilities, landscaping, villas, golf course, clubhouse and community facilities. Future works will include high rise buildings, retail malls, hotels, schools, hospitals and other amenities necessary to build a city in the desert.

loCateD at ColuMbus CIrCle IN MIDtowN MaNhattaN, thIs laNDMark buIlDINg was oNe of the largest sINgle buIlDINg ProJeCts IN New York hIstorY. bovIs leND lease uNDertook the ProJeCt MaNageMeNt aND CoNstruCtIoN.

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Key contributions to gross profit margin included the Mets Stadium, the residential projects at 15 William Street in New York and Paramount Bay in Miami, and the Trump Taj Mahal hotel project in Atlantic City.

europe

The European business contributed $18.5 million of profit after tax for the year. Performance improved, although this business continues to be impacted by the work-out of the UK projects where a provision was taken in the prior year and margin reductions on a number of projects.
Key contributions to gross profit margin included the UK Ministry of Defence SLAM project, the commercial projects at 200 Aldersgate Street and Morgan Stanley Phases 2–7 in London, and the BP Global Alliance.

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ATO headquarters, Canberra, Australian Capital Territory

Case stuDY:

bovis lend lease successfully delivered a modern, attractive and energy efficient workplace.

ato headquarters largest government tenancy in australia

The new commercial office development for the Australian Taxation Office (ATO), located in the heart of Canberra, represents the largest single project undertaken by Bovis Lend Lease in our 50 year history in the Australian Capital Territory (ACT).

The landmark $240 million development covers a huge 63,000 square metres of net lettable area and is the largest government tenancy construction project in Australia to date. Bovis Lend Lease provided full project management, design and construction services over a two year period for client and owner, QIC.

Accommodating more than 4,000 employees, the ATO building occupies two separate office towers known as Precinct B and Precinct C within QIC’s Section 84 precinct.

Both QIC and ATO encouraged the achievement of a superior quality product with a focus on environmentally sustainable design and Bovis Lend Lease successfully delivered a modern, attractive and energy efficient workplace that has transformed and revitalised the eastern end of Canberra’s city centre.

2008 Annual Report to Shareholders Lend Lease Corporation 13

Total operating profit after tax • Investment Management for Investment Management continued to see strong declined to $137.3 million, performance from its down from $189.1 million managed funds during 2008 in 2007. This was primarily which flowed directly to due to the prior year performance fee earnings. containing a $136.6 million • New equity of $700 million+
after tax distribution from was raised and there is
the Global Fund, whereas significant committed funds
the distribution for 2008 under management growth
was $9.2 million after tax. over the next three years from
• Funds under management the development pipeline rose 4% to $9.3 billion, up within the various funds. from $8.9 billion in 2007.

Investment Management report

from $8.9 billion in 2007.
• Investment Management
continued its policy of capital
recycling with the sale of a
proportion of Lend Lease’s
interest in the Australian
Prime Property Fund for a
proft after tax of $40.1 million.
~~operating result $m~~
~~08~~
~~07~~
operating proft after tax
Funds management
54.1
28.7
Investment income
83.2 160.4
operating proft after tax by geography
Asia Pacifc
71.8
29.7
Europe
61.9 153.4
Americas
3.6
6.0
fuMgrowth fY08 on fY07
4%

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50 Years of

Lend Lease

1989 australIaN PrIMe ProPertY fuND

The mandate relates to an investment in two landmark Australian commercial properties acquired in joint venture with Australian Prime Property Fund.

Year in Review

outlook

Key events asia Pacific

• In Australia, conditions remain challenging to raise money for core product; however we have a significant internal pipeline to leverage off and we continue to look at opportunities to partner/joint venture with institutions.

The funds management business continued to enjoy strong support from its wholesale investor base. A new managed investment mandate was secured in December 2007 on behalf of a major institutional investor.
Profit after tax from funds management decreased, primarily due to investment in the Singapore platform to support future growth.
In Asia, we will continue to look for further assets to invest the remaining equity in the Lend Lease Asian Retail Investment Fund.
It is currently very difficult to raise new money in the UK environment and our plans to launch a wholesale retail fund are currently on hold.

	~~Portfolio summary~~ ~~08~~ ~~07~~ Funds under management $b 9.3 8.9 Property investment revaluations after tax 11.3 13.5 Market value of investments to llC Asia Pacifc 397.2 615.1 Europe 205.7 299.2 Americas 0.9 2.7 Total $m 603.8 917.0

In the US … we are in the process of establishing our Investment Management platform.

Priorities

• Continued strong focus on superior investor outcomes.

• Growth strategy focused on leveraging internal product pipeline and Lend Lease’s asset creation capabilities.

Continue to broaden global investor base.

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Case stuDY:

Investment Management what large and sophisticated institutional real estate investors increasingly want

==> picture [192 x 143] intentionally omitted <==

Institutional equity demand is increasingly segmented by factors such as an investor’s scale, type and geography.

over the past “ We are seeing increased global few years, demand for new product in international Asia Pacific. and “ The size and scope of the Lend institutional Lease development pipeline investors have positions us as an attractive manager been actively and partner. Institutional investors looking are becoming more aware of our to diversify competitive advantage in product their property creation and this underpins our exposure ability to raise capital successfully. to the australian “ We are looking to follow the flow and asian of capital and will consider more markets. flexibility in fund structuring, including joint ventures and partnerships, in addition to our existing funds which enhances the range of capital solutions we can provide.

Macarthur Square, Campbelltown, New South Wales

MaNageD bY leND lease, aPPf Is aN oPeN-eNDeD wholesale fuND whICh INvests IN QualItY PortfolIos of PreDoMINaNtlY Core australIaN ProPertY. the fuND was lauNCheD IN 1989 aND has gross assets of CIrCa $5 bIllIoN.

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The Asia Pacific Investment Company Limited vehicle in Singapore successfully sold its last remaining asset during the year, resulting in profit after tax of $6.1 million on the Group’s investment.

europe

Profit after tax from funds management increased due to the receipt of a tax exempt dividend of $47.9 million from the Group’s interest in the advisor company to the Global Fund in relation to incentive fees received.

americas

Profit after tax relates to the continued windup of the residual US REI business.

Case stuDY: Principles for responsible investment first global property company to become a signatory to united Nations Principles for responsible Investment

There is a growing view among investment professionals that environmental, social and corporate governance issues can affect the performance of investment

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portfolios. Investors fulfilling their fiduciary duty therefore need to give appropriate consideration to these issues, but until recently have lacked a framework to achieve this aim. The United Nations Principles for Responsible Investment provide this framework.

According to the United Nations Environment program property typically comprises less than 10% of a diversified investment portfolio. However, its environmental footprint is much larger than its 10% allocation. Clearly, therefore, property must also be a focus of investors seeking to align their investments with broader environmental objectives.

In November 2007 Lend Lease Investment Management became the first global property investment manager to become a signatory to the United Nations Principles for Responsible Investment. Lend Lease Investment Management has incorporated the United Nations Principles into a number of areas including investment analysis and decision making processes, ownership policies and practices.

The Gauge building, Melbourne, Victoria

2008 Annual Report to Shareholders Lend Lease Corporation 15

sustainability report environment, safety, People

Sustainability has been an integral part of our culture for 50 years and our employees insist that people, safety and environmental impact must be central to our business strategy. Our sustainability performance is rated by independent agencies including the Carbon Disclosure Project report, undertaken on behalf of institutional investors representing over

US$57 trillion of assets under management; and Dow Jones Sustainability World Index (DJSI World), which is used to manage funds and other financial products worth almost US$6 billion.

Lend Lease was the first Australian property company to be included on DJSI World in 2001. Since then we have been included on the index each year from 2002–2004 and 2006–2008.

Lend Lease’s full Sustainability Performance Report:

www.lendlease.com/sustainability

50 Years of

Lend Lease

2004 sustaINabIlItY – the boND

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environment

Buildings contribute 40% of global greenhouse gas emissions and as one of the first property companies to acknowledge the threat of climate change, Lend Lease advocates new legislation, policies, products, technologies and partnerships in our sector’s response to it. We recognise significant opportunities to initiate and implement solutions to reduce greenhouse gas emissions through efficient building design, operation and clean energy generation.

environmental condition (ecological significance) of land prior to our activity, land space occupied by asset and use, transportation impacts and water consumption.

Lend Lease has 855 employees trained in the application of green building rating tools, 383 of whom are green building accredited. We are a founding member of the USA, UK, UAE and Australian Green Building Councils and actively involved in the establishment of Green Building Councils in other regions, such as Spain, China and Malaysia.

In addition to opening the doors on The Gauge, our first 6 Star Green Star (Office Design Certified Rating) building, we have made significant progress this year, achieving a green building rating for 10 Lend Lease office tenancies globally.

safety

the introduction of safety criteria into subcontractor tenders and asset acquisition assessments;
the development of minimum safety requirements that prescribe physical and operational safety standards for virtually all business activities, supported by localised guidelines and solutions to comply with those requirements;
the Company-wide adoption of an online safety reporting system that will help identify major safety risk areas across our entire business activities;
a formal safety training curriculum with a schedule of training modules for employees, business partners and contractors to ensure each employee and third party receives appropriate technical training to work safely; and
safety specific roles and responsibilities will become a part of all job descriptions clarifying accountabilities for safe outcomes.

www.lendlease.com/sustainability

for Lend Lease’s full sustainability performance Report, go to:

Metrics update 2008

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fatalities

Bovis Lend Lease Lost Time Injury Frequency Rate by Region and Global (per 200,000 man-hours)

Over FY08 there were six fatalities across Lend Lease projects, down from nine fatalities in FY07. No fatality is ever acceptable.

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----- Start of picture text -----

FY06 FY07 FY08
Australia Asia Americas UK CEMEA Global
3.43
1.95
1.85
1.63
1.46 1.42
1.29 1.3 1.05 1.25 1.15
0.91
0.33 0.32
0.11 0.12 0.08 0.20
----- End of picture text -----

Lost time injury frequency Rate

There has been an overall downward trend in Lost Time Injury Frequency Rates (LTIFR) for Bovis Lend Lease businesses from 2003 levels – indicating fewer man-hours lost to injury across each region over the past five years.

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30 the boND IN sYDNeY was the fIrst CbD offICe buIlDINg IN australIa to CoMMIt to a 5 star eNergY ratINg. DeveloPeD aND CoNstruCteD bY leND lease, It has beeN the heaDQuarters of the grouP sINCe 2004 .

Incident & Injury Free commitment criteria will also be a determining factor that applies to how all employees are measured and rewarded. Key performance indicators have been added to senior staff performance objectives with the introduction of an Incident & Injury Free gateway on STI bonus entitlement criteria right across the business.

Lend Lease Foundation

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Foundation was established in 1983 in support of Lend Lease’s commitment to developing its employees. Its purpose is to attract and retain talented employees and differentiate Lend Lease from its peers. Foundation programs focus on enhancing employees’ health and wellbeing and personal development.

Lend Lease is striving to achieve a leadership position in safety operational performance, not only because it is the right thing – but because well run businesses operate safely.

springboard is Foundation’s global employee development program, providing a highly interactive and challenging personal development experience, taking place in Chiang Mai, northern Thailand.

Employees in Singapore working with contractors to develop an educational garden for the School for the Deaf

people

It centres around a Sustainability theme, partnering with an existing community organisation, ‘School For Life’, which provides a home and education for displaced young people from around Thailand, and employment opportunities for local adults.

where they can personally make a difference. Since 1996, employees have contributed over 400,000 volunteer hours across thousands of projects.

For over 50 years, our commitment to our people has extended way beyond our day-to-day business operations. While we have a history of nurturing talent, in all its diversity, and urge professional excellence through training, mentoring and skills improvement, we are proud of the many employees who regularly volunteer their time and expertise to help individuals, organisations and communities. Go to www. lendlease.com/sustainability to read more about our employees who are making a difference.

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Community Day was established in 1996 to provide Lend Lease employees with the opportunity to give back to communities in which we live and work. Now an annual program, employees contribute their time and skills to community projects

2008 Annual Report to Shareholders Lend Lease Corporation 17

Corporate governance

lend lease is committed to continually reviewing all group corporate governance policies and practices to ensure the ongoing transparency of the group’s practices, and the delivery of high standards and quality information to stakeholders.

1	the lend lease board 18
2	1.1 role and responsibilities 18
	1.2 Composition of the board 19
	1.3 Independent Directors 19
	1.4 retirement and re-election of Directors 21
	1.5 Chairman of the board 21
	1.6 Meetings 21
	1.7 board Performance 21
	1.8 shareholdings 21
	1.9 Induction and briefng Programmes 21
	1.10 Independent Decision-Making 21
	1.11 Company secretary 21
	senior Management 22
3	Directors’and executives’remuneration 22
4	board Committees 22
5	4.1 Membership 22
	4.2 Nomination Committee 23
	4.3 Personnel and organisation Committee 23
	4.4 risk Management and audit Committee 24
	4.5 sustainability Committee 25
	governance structure 26
6	Communicating with shareholders 26
7	risk Management 27
8	7.1 enterprise risk Management 27
	7.2 Integrity in financial reporting, risk Management and Internal Control 27
	external auditor 28
9	8.1 Performance Management 28
	8.2 appointment and rotation 28
	8.3 Provision of Non audit and other services 28
	8.4 attendance at annual general Meeting 28
	8.5 auditor’s Independence 28
	8.6 fees 28
	trading in lend lease shares 28
10	the lend lease Core values 29
11	10.1 Core values 29
	10.2 Code of Conduct 29
	10.3 Conficts of Interest 29
	10.4 Political Donations 29
	Corporate governance–further Information 29
12	Compliance with asX recommendations 30

Lend Lease commitment to governance

The Directors believe that good corporate governance is fundamental to the long term prosperity of the Lend Lease Group. The Board continually reviews the Group’s governance practices to ensure that they promote sustainable value for shareholders and address the Group’s responsibilities to all of its stakeholders.

As a listed Company, Lend Lease must comply with the ASX Listing Rules, which require the Company to provide a statement in the Annual Report disclosing the extent to which the Company has followed the ASX Corporate Governance Council’s Principles and Recommendations (asX recommendations). During the year the ASX Corporate Governance Council revised its principles and recommendations and encouraged their early adoption by companies for the current reporting year. As detailed in this Corporate Governance Statement, Lend Lease considers that the Group’s governance policies and practices comply with the revised ASX Recommendations. A table summarising the Group’s compliance is provided at the end of this Statement.

In addition to the information set out in this Statement, the Corporate Governance section of the Lend Lease website at www.lendlease.com contains further information on the Group’s governance practices, including copies of key policies and charters. A reference in this Corporate Governance Statement to the Board is a reference to the Board of Directors of Lend Lease Corporation Limited unless indicated otherwise.

date of this corporate governance statement

This Corporate Governance Statement reflects the corporate governance and other related policies and practices in place for the Lend Lease Group as at 31 August 2008.

1 the Lend Lease board

1.1 Role and Responsibilities

The main focus of the Lend Lease Board is the long term success and prosperity of the Group for the benefit of shareholders. The Board is responsible for leading Lend Lease in the achievement of its objective to continually deliver strong shareholder value.

The Board has adopted a formal Board Charter, which sets out the division of responsibilities between the Board and management. The responsibilities of the Board pursuant to the Charter are set out in the table below. The Board delegates authority for all other matters necessary for the day-to-day management of the Group to the Chief Executive Officer (Ceo). The Board may alter this division of responsibilities at any time in accordance with the Board Charter, the Constitution and the requirements of any applicable laws.

Limits of authority have been put in place by the Board for the CEO and senior management, and the CEO is accountable to the Board for the authority delegated to other levels of management.

The Board has established various Committees to assist it in discharging specific responsibilities. Details of the Board Committees and their respective Charters are provided in Section 4 of this Corporate Governance Statement.

As part of the Board’s regular review of corporate governance practices, the Board Charter was revised in September 2008. A copy of the Charter is available at the Corporate Governance section of the Lend Lease website at www.lendlease.com.

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----- Start of picture text -----

stakeholders board responsibilities
Shareholders – Approval of business strategy and vision in line with efforts to drive
shareholder value creation
– Approval of business plans, ensuring that sufficient resources are available
to implement strategy and monitoring of the implementation of strategy
– Approval and monitoring of major investments or divestitures and strategic
commitments
– Determination of capital structure and dividend policy
– Approval and monitoring of financial reporting
– Oversight of risk management, internal control and compliance systems
– Appointment or removal of external auditors, and determination of the
remuneration and terms of appointment of the auditors
– Oversight of shareholder reporting and communications
Customers – Benchmarking the delivery of value to customers, clients and partners
Employees – Reinforcement of culture, core values and employer of choice
– Approval of employee share ownership, superannuation and pension plans
– Review of CEO and Executive Management Team performance and results
– Review and approval of CEO and Executive Management Team contractual
arrangements, remuneration and benefits
– Oversight of succession planning for the CEO, Executive Management Team
and such other executives as the Board may determine
Community – Oversight of the management of social, economic and environmental
concerns consistent with the delivery of sustainable outcomes for
stakeholders and achievement of the Group’s Incident & Injury Free vision
– Reinforcement of reputation, brand and community relations
Directors – Review of the size and composition of the Board
– CEO and Executive Director selection or removal and oversight of
succession planning
– Non Executive Director nomination, selection, removal, succession planning
and remuneration
– Review of Board performance
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1.2 Composition of the Board

The Constitution of Lend Lease sets the minimum number of Directors at three. The Board, which is permitted to do so in accordance with the Constitution, has fixed the maximum number of Directors at nine.

There are currently nine Directors on the Board, two Executive Directors and seven Non Executive Directors. Membership of the Board as at the date of this Annual Report is set out in the table on the facing page.

The composition of the Board embraces diversity. The Directors have a range of local and international experience and expertise, and specialised skills to assist with decision making and leading the Group for the benefit of shareholders.

Assisted by the Nomination Committee, the Board selects Directors having regard to, among other things, an individual’s skills, experience and expertise. For further information on the selection of new Directors, refer to part 4.2 of this Corporate Governance Statement. Biographical details for the Directors are provided in the Directors’ Report on page 70.

1.3 Independent Directors

current board composition

The Board has a majority of independent Directors. This is in accordance with the Board Charter, which requires the Board to have a majority of Non Executive Directors who are considered by the Board to be independent.

The Board considers that all seven Non Executive Directors, David Crawford (Chairman), Phillip Colebatch, Gordon Edington, Peter Goldmark, Julie Hill, Mark Selway and David Ryan, are independent.

Executive Directors, Greg Clarke (Managing Director and CEO) and Ross Taylor (Global Chief Operating Officer), are not considered to be Independent Directors due to their integral involvement in the day-to-day management of the Group’s business.

2008 Annual Consolidated Financial Report Lend Lease Corporation 19

Corporate governance continued

policy on independence

The Board’s Policy on the independence of Directors, which sets out the criteria and guidelines for assessing the independence of Directors, assists the Board in determining whether a Director is to be regarded as independent.

The predominant test used by the Board is whether the Director is independent of management and free of any business or other relationship that could materially interfere with – or could reasonably be perceived to materially interfere with – the exercise of their unfettered and independent judgment. This general test of independence is supplemented by specific criteria and thresholds, which encompass the definition of independence set out in the ASX Recommendations. A copy of the Policy is available at the Corporate Governance section of the Lend Lease website at www.lendlease.com.

The Board evaluates the materiality of any interests or relationships that could be perceived to compromise independence on a case-by-case basis, having regard to the circumstances of each Director. Where the Board is satisfied in the circumstances that the Director meets the general test of independence, the Board may, in its absolute discretion, determine that a Director is independent even though not all of the criteria under the Policy are satisfied. Where the Board makes such a determination, it will make an appropriate disclosure to the market and in the Annual Report at the time of the Director’s appointment.

circumstances which May be perceived to affect a director’s independence

Having regard to the current composition of the Board, the Board has determined two Directors to be independent notwithstanding the existence of factors which could be perceived to impact on their independence.

The Board does not consider David Crawford’s independence to be compromised by his previous association with KPMG, on the basis that he resigned as a Partner and Australian National Chairman of KPMG in June 2001, prior to his appointment to the Lend Lease Board, and has no financial arrangements with KPMG, including pension arrangements, retainers or advisory fees. Mr Crawford has never been part of KPMG’s audit practice, nor in any way involved in, or able to influence, the audit activity associated with the Group.

The Board considers David Ryan independent notwithstanding that, before his appointment to the Board, Mr Ryan (as a principal of Ryvan Pty Limited) provided professional advisory services to Lend Lease in respect of the then proposed merger with General Property Trust. The Board does not consider Mr Ryan’s advisory role to have compromised his independence given that his role related to a specific transaction and was for a limited period in the year leading up to his appointment.

The Board assesses the independence of each Director annually and on disclosure by a Director of any new interests or relationships. Where the Board considers that an independent Director has ceased to be independent, appropriate disclosures will be made to the market.

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----- Start of picture text -----

retiring and
seeking
last re-election
Director Independent appointed elected in 2008
Executive Directors
greg Clarke
Managing Director and CEO No 2002 n/a [1] n/a [1]
ross taylor No 2004 2005 Yes
Non Executive Directors
David Crawford
Chairman Yes 2001 2007 No
Phillip Colebatch Yes 2005 2006 No
Gordon Edington Yes 1999 2007 No
Peter Goldmark Yes 1999 2006 Yes
Julie Hill Yes 2006 2006 No
David Ryan Yes 2004 2005 Yes
Mark Selway Yes 2008 n/a [²] Yes
----- End of picture text -----

1 The Directors have appointed Greg Clarke as Managing Director for a term not exceeding five years in accordance with the Lend Lease Constitution.

2 Mark Selway was appointed to the Board on 17 June 2008, and will retire and seek election at the 2008 Annual General Meeting.

1.4 Retirement and Re-election of Directors

Pursuant to the Constitution of Lend Lease, at each Annual General Meeting one-third 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 last elected (excluding the Managing Director) must retire from office and may offer themselves for re-election by the shareholders. Newly appointed Directors must seek election at the first meeting of shareholders following their appointment. The Board has reviewed the performance of those Directors standing for election or re-election at the 2008 Annual General Meeting, Peter Goldmark, David Ryan, Ross Taylor and Mark Selway and unanimously endorses their re-election.

1.5 Chairman of the Board

The Chairman of the Board is elected to the office of Chairman by the Directors. The Directors may, in accordance with the Constitution of the Company, determine the period of office the Chairman will hold. David Crawford has been Chairman of the Board since May 2003. As noted above, the Board considers that the Chairman is independent. The Chairman serves as the primary link between the Board and management, and works with the CEO and Company Secretary to set the agenda for Board meetings. It is the Chairman’s responsibility to provide leadership to the Board and ensure that the Board works effectively and discharges its responsibilities as Directors of the Company.

1.6 Meetings

The number of meetings of the Board and the Committees of the Board held during the financial year, and the attendance of Directors at those meetings, is disclosed in the Directors’ Report. There are nine scheduled meetings each year, and additional meetings are held in between scheduled meetings as required. Members of senior management may be invited to attend and present at Board meetings.

The number of Directors required to constitute a quorum is three.

1.7 Board Performance

The Board reviews its performance and the performance of each of the Directors each year. In accordance with the Board Charter, the Board undertakes an external performance review on a biennial basis, and a self-assessment of its performance each alternate year. Matters addressed in performance reviews include an evaluation of the performance of the Board and its Committees against the requirements of their respective Charters, and a review of the performance, contribution and time commitment of the Chairman, Committee Chairmen and individual Directors. The review process includes interviews with the Directors and senior management, and generates recommendations to ensure the Board continues to operate effectively and efficiently with the requisite mix of skills and experience. The Chairman of the Nomination Committee, acting in close consultation with other Board members, is responsible for conducting the annual evaluation of the CEO and the Chairman.

Further, Non Executive Directors are required pursuant to the Board Charter to consult with the Chairman before accepting new commitments which could impact on their available time.

1.8 Shareholdings

Pursuant to the Constitution of the Company, Directors are required to hold a minimum of 1,000 Lend Lease shares. In order to more closely align the interests of shareholders and Directors, it is the Board’s current policy that Non Executive Directors move, over a reasonable period, to hold the equivalent of one year’s Directors’ fees in shares. Details of Directors’ shareholdings in Lend Lease are disclosed in the Directors’ Report.

The Directors are prohibited from trading Lend Lease securities at certain times and under certain circumstances as set out in the Group’s Securities Trading Policy. More information on the Policy is provided in Section 9 of this Statement.

1.9 Induction and Briefing Programmes

New Directors are provided with a letter of appointment which sets out their rights, duties and responsibilities as a Director of Lend Lease. New Directors participate in an induction program involving comprehensive briefings from management and site visits.

All Directors have access to Group information, senior management and employees as required to enable them to fulfil their responsibilities. In addition to management briefings at every Board meeting, Directors are regularly briefed on key business and industry developments and matters material to their role as Directors. Directors also have access as required to externally administered training seminars and programs to assist the Directors in discharging their obligations as Directors of Lend Lease.

1.10 Independent Decision-Making

Pursuant to the Board Charter, any Director may seek external, independent, professional advice at the Company’s expense. The policy of the Board is that external advice will be made available to all Directors, unless the Chairman of the Board determines otherwise. It is expected that a Director will consult the Chairman of the Board, Managing Director or Company Secretary before obtaining external advice.

To further facilitate independent decision-making by the Board, a separate session for Non Executive Directors to meet without management present is scheduled as a permanent agenda item at Board meetings.

1.11 Company Secretary

Appointed by the Board, the Company Secretary works with the Chairman of the Board to monitor and enhance corporate governance processes and to ensure that Board policies and procedures are followed.

During the financial year William Hara and Sue Sharpe undertook the role of Company Secretary. Sue Sharpe retired as Company Secretary on 31 August 2008.

During the financial year, a consultant was engaged to conduct an external performance review. The review examined the performance of the Board and Board Committees, including an evaluation of the Chairman, Committee Chairmen and individual Directors.

2008 Annual Consolidated Financial Report Lend Lease Corporation 21

Corporate governance continued

2 senior Management

The Company’s management structure consists of the Executive Office, Corporate Office and Executive Management Team.

The Executive Office comprises Managing Director and CEO Greg Clarke, Global Chief Operating Officer Ross Taylor and Group Finance Director Steve McCann. The Executive Office is responsible for developing organisational and business strategy and sponsoring innovation and development of best practices across the Group.

The Corporate Office comprises the Executive Office and Group functional heads and is responsible for organisational effectiveness, corporate governance activities, talent and performance management and the development of the Group’s values and culture.

The Executive Management Team comprises the Executive Office, the Corporate Office and business stream CEOs. The Executive Management Team is responsible for managing the Group’s performance and key business issues in line with the Group’s long term strategy.

Both the Corporate Office and the Executive Management Team are chaired by the Managing Director and CEO Greg Clarke. Members meet faceto-face on a regular basis.

3 directors’ and executives’ Remuneration

Details of the Group’s Remuneration Policy and the remuneration of Directors and senior executives are contained in the Directors’ Report.

Details of the retirement plan for Non Executive Directors are also provided in the Directors’ Report. Bonus payments to all senior executives are based on performance measured against financial and individual targets. The Personnel and Organisation Committee conducts a detailed review of the performance of senior executives against these targets on an annual basis. Information on executive incentive programs is set out in the Directors’ Report.

4 board committees

4.1 Membership

The Board has established four permanent Board Committees to assist, advise and make recommendations to the Board on matters falling within their respective responsibilities:

Nomination Committee;
Personnel and Organisation Committee;
Risk Management and Audit Committee; and
Sustainability Committee.

Each Committee is governed by a formal Charter approved by the Board setting out its objectives, responsibilities, structure and operation. Copies of the Committee Charters are available from the Corporate Governance section of the Lend Lease website at www.lendlease.com.

The membership of the Board Committees as at the date of this Annual Report is set out in the table below.

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----- Start of picture text -----

Personnel risk
and Management
Nomination organisation and audit sustainability
Director Independent Committee Committee Committee Committee
Executive Directors
greg Clarke
Managing Director and CEO No
Ross Taylor No Member
Non Executive Directors
David Crawford
Chairman Yes Member
Phillip Colebatch Yes Member Chairman Member
Gordon Edington Yes Member Member Member
Peter Goldmark Yes Chairman Member
Julie Hill Yes Member Member Chairman
David Ryan Yes Member Member Chairman
Mark Selway Yes Member
----- End of picture text -----

4.2 Nomination Committee

The principal purpose of the Nomination Committee is to provide advice and support to the Board in fulfilling its responsibilities to shareholders to be assured that the Board is comprised of individuals who in combination bring a mix of expertise, skills, experience and perspectives and contribute to the discharge of diligent oversight and effective corporate governance.

Membership of the Nomination Committee comprises all Non Executive Directors, chaired by Peter Goldmark.

During the period 1 July 2007 to 30 June 2008, meetings of the Nomination Committee were held concurrently with full Board meetings, and were generally attended by all Non Executive Directors. Pursuant to the Nomination Committee Charter, the Committee has the following responsibilities:

regularly review the size and composition of the Board and the mix of expertise, skills, experience and perspectives desirable to permit the Board to execute its functions;
identify any competencies not adequately represented and agree the process necessary to be assured that a candidate with those competencies is selected;
identify and evaluate Board candidates with the assistance of recruitment consultants if required, and recommend individuals for appointment to the Board;
be assured that individuals recommended for appointment as Non Executive Directors expressly acknowledge, prior to their appointment, their ability to devote the time necessary to carry out their responsibilities as a Director. In satisfying this requirement, the Committee should review on a regular basis the time commitments of Non Executive Directors to provide a basis for assessing whether candidates for appointment as Non Executive Directors can (having regard to other commitments) meet these commitments;
review and recommend, in co-operation with management, a process for the induction and education of new Directors and a continuing education and development plan for all Non Executive Directors;
evaluate the performance of the Board. The Committee will undertake an external review of the Board’s performance at a minimum on a biennial basis, and an internal assessment during those years when there is no external assessment. Matters addressed in performance reviews will include but not be limited to an evaluation of the performance of the Board and its Committees against the requirements of their respective Charters, and a review of the performance, contribution and time commitment of the Chairman, Committee Chairmen and individual Directors;
review the re-election by shareholders of any Director under the retirement by rotation provisions in the Company’s Constitution and make a recommendation to the Board as to whether the Board should support the re-nomination of the retiring Director. In making the recommendation, the Committee should have regard, among other factors, to an assessment of the retiring Director’s performance by both peers and self; and
establish processes for the review of succession plans for the Board, taking into account both the Company’s current business operations and its future strategy and what skills and expertise may be needed on the Board in the future.

The process of selecting a new Director usually involves commissioning an international recruitment firm to identify and present appropriate candidates following a briefing as to the Board’s requirements. Candidates are interviewed by the Board. In making its selection, the Board considers the ability of candidates to devote the time necessary to fulfil their duties as a Director.

4.3 Personnel and Organisation Committee

The principal purpose of the Committee is to assist the Board in fulfilling its corporate governance and oversight responsibilities in relation to establishing people management and compensation policies that:

foster exceptional human talent and motivate and support employees to pursue the growth and success of the Group in alignment with the Company’s values;
ensure that human capital considerations are central to and integrated into the Company’s strategy and business plans;
enable the Group to attract and retain employees who can create sustainable value for stakeholders; and
equitably and responsibly reward employees, having regard to the performance of the Group, individual performance and statutory and regulatory requirements.

Membership of the Personnel and Organisation Committee comprises three Non Executive Directors, Phillip Colebatch (Chairman), Julie Hill and David Ryan.

The Chairman of the Committee liaises with the Group Head of Human Resources to ensure that the Committee is appropriately briefed on matters relating to employees.

During the period 1 July 2007 to 30 June 2008, three meetings of the Committee were held, which were attended by all Committee members.

2008 Annual Consolidated Financial Report Lend Lease Corporation 23

Corporate governance continued

Pursuant to the Personnel and Organisation Committee Charter, the Committee has the following responsibilities:

review and make recommendations to the Board on:
the specific contractual arrangements for the CEO and Executive Directors;
remuneration programs and performance targets for the CEO and Executive Directors, and assessing individual performance against those targets; and
termination payments for the CEO and Executive Directors for consistency with contractual entitlements and the rules of any incentive scheme or policy;
review and approve:
the specific contractual arrangements for members of the Executive Management Team;
remuneration programs and performance targets for members of the Executive Management Team, and assessing individual performance against those targets; and
termination payments for members of the Executive Management Team for consistency with contractual entitlements and the rules of any incentive scheme or policy;
monitor and advise the Board on succession planning for the CEO and Executive Directors;
monitor succession planning for members of the Executive Management Team;
review and approve strategy and principles for people management, including:
career, skills and leadership development and continuing education programs;
employee remuneration and benefit programs to be adopted across the Group;
employee share ownership, superannuation and pension plans; and
international assignee policies;
review and approve any individual employee remuneration arrangement materially diverging from Group policy or practice;
review and make recommendations to the Board on the remuneration framework for Non Executive Directors including:

– the level of fees payable to each Non Executive Director including the fee payable as Chairman or Committee Chairman (within the maximum aggregate level of remuneration approved by shareholders);

any changes to the maximum level of remuneration approved by shareholders;
superannuation, retirement or other benefits;
the manner in which fees may be taken; and
any other applicable arrangements;
review and make recommendations to the Board on remuneration and related disclosures required under statutory and regulatory requirements, including the remuneration report in the Company’s Annual Report and disclosure of the Committee’s membership, functions and responsibilities; and
perform other functions referred to the Committee by the Board.

4.4 Risk Management and Audit Committee

The Risk Management and Audit Committee assists the Board in fulfilling its corporate governance responsibilities and is responsible for overseeing the Group’s risk management and internal control systems, accounting policies and practices, internal and external audit functions and financial reporting. The Risk Management and Audit Committee comprises three Non Executive Directors, David Ryan (Chairman), Gordon Edington and Phillip Colebatch. All members of the Committee are independent Directors. The Committee Chairman regularly meets with the Chief Financial Officer, the Group Head of Internal Audit and the Group Head of Risk and Insurance to ensure that Committee members are kept regularly informed of key issues. The Committee also meets with the external auditor, without members of management present, as it deems appropriate.

It is a requirement of the Risk Management and Audit Committee’s Charter that all Committee members are financially literate and that at least one member has accounting or relevant financial expertise. Information about the qualifications and experience of Committee members can be found in the Directors’ Report.

During the period 1 July 2007 to 30 June 2008, four meetings of the Committee were held, all of which were attended by all members of the Committee at the relevant time.

Pursuant to the Risk Management and Audit Committee Charter, the Committee has the following responsibilities:

audit

make recommendations to the Board as to the selection, appointment, re-appointment or replacement of the external auditor and rotation of the engagement partner;
review with the external auditor the scope and terms of the audit and audit fee in accordance with the Board’s Policy on the provision of audit and other services by the external auditor, and make recommendations to the Board in respect of the audit fee;
review and approve the scope and terms of the internal audit and, where appropriate, the audit fee;
monitor the coordination between the external audit and internal audit programs;
oversee and appraise the quality and effectiveness of the audits conducted by the auditors;
discuss and resolve any issues arising from audit reports, including any matters the auditors may wish to discuss in the absence of management;
discuss with the external auditor any relationship that may impact on the auditor’s objectivity or independence, and recommend to the Board any appropriate action to satisfy itself of the auditor’s independence;
require the external auditor to provide a formal written statement on an annual basis confirming the auditor’s independence;
obtain confirmation that the external auditor is aware that the auditor is responsible to the Board as the representative of shareholders;
approve non audit assignments that will be

undertaken by the external auditor in accordance with the Board’s Policy on the provision of audit and other services by the external auditor, and monitor compliance with the Policy; and

review the performance of the Group Head of Internal Audit and the internal audit function and recommend to the Board, if necessary, the replacement of the Group Head of Internal Audit;

Risk Management

review the parameters of the Group’s risk/reward strategy;
monitor changes anticipated for the economic and business environment, including consideration of emerging trends and other factors relevant to the Group’s risk profile;
review the Group’s Risk Management Policy Statement and the effectiveness of the Enterprise Risk Management system within the Group and be assured that material risks are identified and appropriate risk management processes are in place, including the formulation and subsequent updating of appropriate Group policies;
evaluate the adequacy and effectiveness of administrative, operating and accounting controls used by the Group;
review actual and potential material risk exposures;
monitor the implementation of business unit and corporate risk management plans;
review insurance and other risk transfer arrangements, and consider whether appropriate coverage is in place;
review the business contingency planning process within the Group and be assured that material risks are identified and appropriate contingency plans are in place; and

– review the performance of the Group Head of Risk and Insurance and the risk management system and recommend to the Board, if necessary, the replacement of the Group Head of Risk and Insurance;

financial Reporting

review the half year and annual financial statements presented by management, together with reports and opinions from external auditors;
review significant financial reporting issues and assess the appropriateness of accounting policies and methods chosen by management, particularly those relating to significant estimates and judgments;
consider and make appropriate recommendations to the Board regarding major changes to Group accounting policies and procedures;
review the reliability and appropriateness of disclosure in the financial statements and financial reporting to stakeholders, particularly with regard to estimates and judgments; and
make appropriate recommendations to the Board as to whether financial statements should be approved;

compliance

monitor the effectiveness of Group policies and practices that relate to compliance with laws, regulations and accounting standards; and
consider the impact of changes in accounting standards, Listing Rules and the Corporations Act;

Related party transactions

review and monitor related party transactions; and

other Matters

conduct or authorise investigations into any matters within the Committee’s charter;
review disclosure in the Annual Report of information regarding the membership, functions and responsibilities of the Committee, including its views on the independence of the external auditor; and
perform other functions referred to the Committee by the Board.

4.5 Sustainability Committee

The role of the Committee is to assist the Board in monitoring the decisions and actions of management in achieving the Lend Lease aspiration to be a sustainable organisation. Sustainability encompasses how Lend Lease conducts business, now and in the future, through the pursuit of workplace safety, a commitment to corporate social responsibility, environmentally sustainable solutions and employee diversity, development and opportunity. Lend Lease is strategically and culturally committed to achieving commercial success in ways that honour ethical values and respect for people, communities and the natural environment.

The Sustainability Committee comprises three Non Executive Directors, Julie Hill (Chairman), Gordon Edington and Peter Goldmark, and one Executive Director, Ross Taylor.

Pursuant to the Sustainability Committee Charter, the Committee has the following responsibilities:

health and safety

oversee the Global Health and Safety function of the Group; and
review the effectiveness of Group policies and initiatives designed to be assured of the wellbeing of employees and the workforce;

corporate social Responsibility

review the effectiveness of Group policies on corporate social responsibility, workplace diversity and equal opportunity;

environment

oversee the Global Environment function of the Group; and
review the effectiveness of Group policies and initiatives designed to deliver best practice environmentally sustainable solutions;

foundation

monitor the activities and programs of the Lend Lease Foundation to be assured that its activities are directed towards opportunities for the development and wellbeing of Lend Lease employees, their families, and the communities in which they work and live; and
review the performance of the Lend Lease Foundation for consistency with sustainability objectives;

compliance

assist the Board in its oversight of the Group’s compliance with applicable legal and regulatory requirements in relation to environmental matters, socially responsible initiatives, and health and safety issues.

Information on the Group’s sustainability initiatives during the financial year can be found in the Sustainability section of this Annual Report.

2008 Annual Consolidated Financial Report Lend Lease Corporation 25

5 governance structure

Corporate governance continued

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----- Start of picture text -----

lend lease
board of Directors
Greg Clarke
CEO
Nomination Personnel and Risk Sustainability Executive Office
Committee Organisation Management Committee Corporate Office
Committee and Audit Executive
Committee Management
Team
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6 communicating with shareholders

The Lend Lease website is the key information dissemination point to the broader market. In addition to including on the website all announcements to the market,

Lend Lease recognises the importance of maintaining investor confidence through full and timely disclosure to shareholders and the market. The Group has an External Communications and Continuous Disclosure Policy in place, setting out protocols applicable to Directors, executive officers and employees designed to ensure that Lend Lease complies with its continuous disclosure obligations. Pursuant to the terms of the Policy, the Company Secretary and the Corporate Disclosure Manager are responsible for all communications with the Australian and New Zealand Stock Exchanges. The Policy explains the continuous disclosure obligations of Lend Lease, the procedure to be followed when information needs to be disclosed to the market, and the consequences of breaching the Policy. It sets out management accountabilities for ensuring that the market is fully informed, as well as procedures governing analyst briefings and public comment by Group spokespersons. The Policy is included on the Group’s intranet for reference by all employees. A copy of the Policy is also available from the corporate governance section of the Lend Lease website at www.lendlease.com.

copies of current and past annual and half-year reports can be downloaded from the website;
presentations made to analysts or institutional investors are included on the website; and
market briefings to analysts and institutional investors are webcast live and archived on the website for three months. Presentation material used during a webcast can be viewed simultaneously or accessed from the archive subsequently.

Group executives and the Chairman also meet with investors and their representatives on a regular basis to discuss the Group and its performance.

The Annual General Meeting is the primary opportunity for shareholders to meet face-to-face with the Board and senior executives. All shareholders receive the Notice of Meeting detailing time and venue, and outlining the resolutions to be put to the Meeting. Accompanying the Notice is a proxy form, instructions on completion and lodgement, and a postage paid, addressed return envelope to encourage maximum shareholder participation. The Notice also invites shareholders to submit questions ahead of the Meeting through an online facility. During the Meeting the Chairman will seek to address as many of the more frequently raised topics as possible within the time available.

In addition to complying with the continuous disclosure obligations imposed by law, Lend Lease is committed to ensuring that information about the Group’s activities reaches the investor community in a timely and readily accessible manner. All Stock Exchange announcements are:

included on the News Room section of the Lend Lease website at www.lendlease.com as soon as practicable following confirmation of receipt by the Australian and New Zealand Stock Exchanges. Additionally, interested parties can register for an email alert service which notifies them of new announcements;
distributed to major wire services; and
emailed to major media organisations and investor groups.

Shareholders attending the venue are given the opportunity to ask questions during the course of the Meeting. Directors also make themselves available after the formal part of the Meeting to meet with shareholders. Question cards are available for those shareholders who do not wish to raise matters in a public forum. The external auditor attends the Annual General Meeting and is available to answer any questions on the conduct of any audits and the preparation and content of the auditor’s report. For shareholders who are unable to attend in person, the proceedings of the Annual General Meeting are webcast live on the Lend Lease website and later archived for three months. Access to the archive is via a link from the home page. Presentations made at the Meeting are also included on the website for access by interested stakeholders. In addition, representatives of the media are invited to attend the Meeting to enable a report of the proceedings to reach as wide an audience as possible. As soon as practicable following the Meeting, a summary of the questions and answers taken from the transcript of the meeting is included on the Lend Lease website.

7 Risk Management

7.1 Enterprise Risk Management

The Group uses an Enterprise Risk Management approach to identify, evaluate, address, monitor, quantify and report material risks to the Risk Management and Audit Committee. The objective of this approach is to enhance stakeholder value through continuous improvement in the Group’s management of risk.

The Group’s Corporate Risk Management is led by the Group Head of Risk and Insurance. Corporate Risk Management liaises with business unit CEOs and risk specialists on both business specific and enterprise-wide risks.

Corporate Risk Management’s objective is to assist the Group’s businesses to further develop their risk management processes. Its role includes:

advising on and implementing risk treatment strategies at Group level;
assisting management to embed Enterprise Risk Management;
assisting Group businesses to implement and maintain effective risk management practices;
maintaining effective early warning reporting systems; and
consolidating information for presentation to the Risk Management and Audit Committee.

Operational businesses are responsible for implementing self-assurance programs to assess the effectiveness of risk management procedures. Formal internal and external audit procedures are utilised to provide supplementary assurance. The Group uses sensitivity analysis and value at risk modelling to identify the most important assumptions affecting the delivery of the Group’s business plans.

The Group’s approach to risk management is guided by the Australian/New Zealand Standard on Risk Management, AS/NZ4360 and the Committee of Sponsoring Organisations of the Treadway Committee (COSO) Enterprise Risk Management framework. A copy of the Group’s Risk Management Policy Statement is available on the Corporate Governance section of the Lend Lease website at www.lendlease.com.

7.2 Integrity in Financial Reporting, Risk Management and Internal Control

In accordance with the Company’s legal obligations, the Chief Executive Officer and the Chief Financial Officer have declared in writing to the Board that, for the year ended 30 June 2008:

With regard to the Company’s financial reports:

the Company’s financial records have been properly maintained in accordance with section 286 of the Corporations Act; and
the Company’s financial statements present a true and fair view, in all material respects, of the Company’s financial condition and operational results and are in accordance with relevant accounting standards.

With regard to risk management and internal compliance and control systems of the Company:

the statements made with respect to the integrity of the Company’s financial reports are founded on a sound system of risk management and internal compliance and control systems which, in all material respects, implement the policies adopted by the Board of Directors; and
the risk management and internal compliance and control systems, to the extent they relate to financial reporting, are operating effectively and efficiently in all material respects.
Since 30 June 2008, nothing has come to the attention of the Chief Executive Officer and the Chief Financial Officer that would indicate any material change to any of the statements made above.

2008 Annual Consolidated Financial Report Lend Lease Corporation 27

Corporate governance continued

8 external auditor

KPMG is the external auditor of Lend Lease and its controlled entities. KPMG, or its predecessors, was appointed at the first Annual General Meeting of the Company in 1958.

8.1 Performance Management

It is the responsibility of the Risk Management and Audit Committee to oversee and appraise the quality and effectiveness of the audits conducted by the external auditor.

8.2 Appointment and Rotation

The Risk Management and Audit Committee is responsible for making recommendations to the Board as to re-appointment or replacement of the auditor and the rotation of the lead audit engagement partner. The audit engagement partner is rotated every five years. The current audit engagement partner is Chris Hall who was appointed with effect from 1 July 2006.

8.3 Provision of Non Audit and Other Services

In September 2006 the Board renewed its Policy on the provision of audit and other services by the external auditor. Pursuant to the Committee Charter, the Risk Management and Audit Committee must approve the appointment of the external auditor for other service engagements in compliance with this Policy.

Pursuant to the terms of the Policy, the auditor should be appointed for other service engagements only where it is best suited to undertake the work. The Policy further provides that the auditor should not provide services having the potential to impair the independence of its role. Generally these include the following services:

bookkeeping, preparation of, and other services in relation to, accounting records and financial statements;
design and implementation of financial information systems or financial controls;
valuation services, appraisals or fairness opinions, where the results are material to the financial statements or where the external auditor would be required to audit those statements or opinions;
outsourced internal audit services;
secondments;
recruitment and other human resources services, including international assignee services;
actuarial services;
management functions;
legal services;
taxation advice of a strategic or tax planning nature;
broker-dealer, investment advisor or investment banking services;
work that is remunerated through a ‘success fee’ structure;

8.4 Attendance at Annual General Meeting

The external auditor is required to attend the Annual General Meeting, and is available to answer any questions on the conduct of any audits and the preparation and content of the auditor’s report.

8.5 Auditor’s Independence

In accordance with section 307C of the Corporations Act and in relation to the audit conducted by the external auditor, the external auditor is required to provide to the Company a written declaration that, to the best of the auditor’s knowledge and belief, there have been no contraventions of the auditor independence requirements set out in the Corporations Act or any applicable code of professional conduct.

A copy of the Lead Auditor’s Independence Declaration as required under section 307C of the Corporations Act has been included in the Directors’ Report.

8.6 Fees

Fees paid to the auditor during the financial year are detailed in the Directors’ Report.

9 trading in Lend Lease shares

Lend Lease has developed a Securities Trading Policy to assist Directors and employees to comply with their legal obligations while they are in possession of price-sensitive information. This policy reinforces the insider trading provisions of the Corporations Act. A copy of the Policy is available at the corporate governance section of the Lend Lease website at www.lendlease.com.

The Policy contains an explanation and prohibition of insider trading, and sets out restrictions on dealing in Lend Lease securities. Directors and designated executives may only deal in Lend Lease securities during the six-week period commencing on the third business day after:

the announcement of the annual results;
the announcement of the half-year results; and – the Annual General Meeting.

The Policy restricts all other employees from dealing in Lend Lease securities between the close of the financial year, or half year, and a day which is at least the next business day after the announcement of the Company’s results.

Notwithstanding any period where trading is permitted in accordance with the Securities Trading Policy, each person covered by the Policy is prohibited from dealing in Lend Lease securities if they are in possession of price-sensitive information that is not generally available to the public.

The Company also prohibits Directors, designated executives and employees from entering into transactions or arrangements that operate to limit the economic risk of unvested entitlements to Lend Lease securities.

expert services unrelated to the audit; and
work that involves the auditor acting in an advocacy role for the Group.

The Chief Financial Officer and the auditor are each required to provide a statement that the non audit assignment will not impair the auditor’s independence. As detailed in the Directors’ Report, the Board considers that the provision of non audit services by the auditor during the financial year is consistent with auditor independence requirements.

10 the Lend Lease core values

10.1 Core Values

Lend Lease actively subscribes to a set of Core Values. These Core Values underpin how the Group does business, how it interacts with stakeholders, and how its people operate in the workplace. The Core Values are promoted across all of the Group’s businesses and are as follows:

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respect Respect for all people – their ideas, their culture, their views, their health and
safety, and their knowledge
Integrity Integrity is non-negotiable. We don’t do it if it compromises the individual or
the Company’s integrity. In particular, we will not compromise on safety, either
within our organisation or in doing business with any of our clients or suppliers
Innovation Challenge and seek to find a better solution, think outside the box and dare to
do things differently. Be innovative and creative – don’t just do it because we
did it yesterday
Collaboration Redefine the way our business works by truly sharing knowledge, building on
this and drawing insights. Through teamwork we value the insights of others
and build on them – we must truly take the time to help
excellence We strive for excellence in all we do. It is evident not only in the products and
services we deliver, but in how we deliver them. Our employees embody
excellence – whether it be in the decisions they make, the products they build,
or the service they deliver. On construction sites in particular, but everywhere,
excellence equals zero incidents
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10.2 Code of Conduct

The Lend Lease Code of Conduct supports the Core Values and provides guidance for employees on the standards that the Company expects in the conduct of its operations. The Code of Conduct has been endorsed by the Board and applies to the Directors and every employee across the Group. Issues covered by the Code include conflicts of interest, insider trading, bribes and unauthorised payments, proper use of Company assets, equal opportunity for employees, confidentiality, fair dealing, and seeking or providing assistance when faced with behaviour which seems to depart from the Code. The Code is supported by various global, regional and local business unit policies and procedures. Employees are encouraged to report all instances of actual or potential breaches of the Code of Conduct to their manager or a representative from the human resources, legal or compliance teams.

Copies of the Lend Lease Core Values and Code of Conduct are available from the Corporate Governance section of the Lend Lease website at www.lendlease.com.

10.3 Conflicts of Interest

Directors are required, upon their appointment, to disclose to the Company any interests or directorships which they have with other organisations. Directors are required to update this information with the Company if it changes during the course of the Directorship. Further, Directors and senior executives are required to identify any conflicts of interest they may have in dealing with the Group’s affairs and refrain, as appropriate, from participating in any discussion or voting on these matters. In addition to general guidelines in the Code of Conduct, a range of procedures designed to ensure compliance with the Corporations Act, the ASX Listing Rules and the highest standards in relation to managing conflicts of interest have been implemented at a Group and business level. Directors are required to raise any matters that may give rise to a conflict of interest with the Company Secretary.

10.4 Political Donations

As a matter of policy, Lend Lease does not use Company funds to make donations to political parties or individuals holding or standing for public office. Lend Lease does, however, participate in public policy debate on issues that may impact the Group’s businesses and the interests of stakeholders. At times, fees are paid for Group employees to attend political functions (such as conferences and lunches) which involve discussion of issues relevant to the Group.

11 corporate governance – further information

The Corporate Governance section of the Lend Lease website at www.lendlease.com contains further comprehensive information on the Company’s corporate governance practices. The following material is available for viewing:

Company Constitution;
Board Charter;
Nomination Committee Charter;
Personnel and Organisation Committee Charter;
Risk Management and Audit Committee Charter;
Sustainability Committee Charter;
Statement of Core Values;
Code of Conduct;
Policy on Independence of Directors;
External Communications and Continuous Disclosure Policy;
Securities Trading Policy;
Risk Management Policy;
Health and Safety Policy;
Environment Policy; and
Political Donations Policy.

2008 Annual Consolidated Financial Report Lend Lease Corporation 29

Corporate governance continued

12 compliance with asX Recommendations

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Comply
asX recommendations reference [1] [Yes/No]
Principle 1: lay solid foundations for management and oversight
1.1 Companies should establish the functions reserved to the 1.1 Yes
board and those delegated to senior executives and disclose
those functions
1.2 Companies should disclose the process for evaluating the 3 and Directors’ Yes
performance of senior executives Report
1.3 Companies should provide the information indicated in the 1.1, 3 and Yes
Guide to reporting on Principle 1 Directors’ Report
Principle 2: structure the board to add value
2.1 A majority of the board should be independent directors 1.2, 1.3 Yes
2.2 The chairman should be an independent director 1.3, 1.5 Yes
2.3 The roles of chairman and chief executive officer should 1.3 Yes
not be exercised by the same individual
2.4 The board should establish a nomination committee 4.1, 4.2 Yes
2.5 Companies should disclose the process for evaluating the 1.7 Yes
performance of the board, its committees and individual directors
2.6 Companies should provide the information indicated in the 1.2, 1.3, 1.7, Yes
Guide to reporting on Principle 2 1.10, 4.1, 4.2 and
Directors’ Report
Principle 3: Promote ethical and responsible decision-making
3.1 Companies should establish a code of conduct and disclose 10.1, 10.2 Yes
the code or a summary of the code as to:
– the practices necessary to maintain confidence in the
company’s integrity
– the practices necessary to take into account their legal
obligations and the reasonable expectations of their stakeholders
– the responsibility and accountability of individuals for reporting
and investigating reports of unethical practices
3.2 Companies should establish a policy concerning trading 9 Yes
in company securities by directors, senior executives and
employees, and disclose the policy or a summary of that policy
3.3 Companies should provide the information indicated in the 9, 10.1, 10.2 Yes
Guide to reporting on Principle 3
Principle 4: safeguard integrity in financial reporting
4.1 The board should establish an audit committee 4.1, 4.4 Yes
4.2 The audit committee should be structured so that it: 4.1, 4.4 Yes
– consists only of non executive directors
– consists of a majority of independent directors
– is chaired by an independent chairman, who is
not chairman of the board
– has at least three members
4.3 The audit committee should have a formal charter 4.1, 4.4 Yes
4.4 Companies should provide the information indicated 4.1, 4.4, 8.2 Yes
in the Guide to reporting on Principle 4
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1 This is a reference to the relevant sections of this Corporate Governance Statement or to the Directors’ Report commencing on page 69.

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----- Start of picture text -----

Comply
asX recommendations reference [1] [Yes/No]
Principle 5: Make timely and balanced disclosure
5.1 Companies should establish written policies designed to ensure 6 Yes
compliance with ASX Listing Rule disclosure requirements and to
ensure accountability at a senior executive level for that compliance
and disclose those policies or a summary of those policies
5.2 Companies should provide the information indicated in the 6 Yes
Guide to reporting on Principle 5
Principle 6: respect the rights of shareholders
6.1 Companies should design a communications policy for promoting 6 Yes
effective communication with shareholders and encouraging their
participation at general meetings and disclose their policy or a
summary of that policy
6.2 Companies should provide the information indicated in the 6 Yes
Guide to reporting on Principle 6
Principle 7: recognise and manage risk
7.1 Companies should establish policies for the oversight and 4.4, 7.1 Yes
management of material business risks and disclose a summary
of those policies
7.2 The board should require management to design and implement 7.1 Yes
the risk management and internal control system to manage the
Company’s material business risks and report to it on whether
those risks are being managed effectively. The board should
disclose that management has reported to it as to the effectiveness
of the company’s management of its material business risks
7.3 The board should disclose whether it has received assurance 7.2 Yes
from the CEO (or equivalent) and the CFO (or equivalent) that
the declaration provided in accordance with section 295A
of the Corporations Act is founded on a sound system of
risk management and internal control and that the system
is operating effectively in all material respects in relation to
financial reporting risks
7.4 Companies should provide the information indicated in 4.4, 7.1, 7.2 Yes
the Guide to reporting on Principle 7
Principle 8: remunerate fairly and responsibly
8.1 The board should establish a remuneration committee 4.1, 4.3 Yes
8.2 Companies should clearly distinguish the structure 1.8, 3 and Yes
of non executive director’s remuneration from that of Directors’ Report
executive directors and senior executives
8.3 Companies should provide the information indicated in 4.1, 4.3, 9 and Yes
the Guide to reporting on Principle 8 Directors’ Report
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1 This is a reference to the relevant sections of this Corporate Governance Statement or to the Directors’ Report commencing on page 69.

2008 Annual Consolidated Financial Report Lend Lease Corporation 31

Management Discussion and analysis of financial Condition and results of operations (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 2008 and should be read in conjunction with those financial statements.

overview

Introduction

The Group has five lines of business that operate in three geographic regions: Asia Pacific, Europe and the Americas.

The Retail business comprises retail property management, asset management and development in Australia, Singapore and the United Kingdom (UK). This business includes the Group’s ownership interests in direct property investments, including those held via limited partnerships, in Asia Pacific, the UK and the United States of America (USA);
The Communities business is involved in the development of large scale urban regeneration and greenfield development projects in Australia, the USA and the UK;
The Public Private Partnerships (PPP) business manages and invests equity in large PPP projects in the USA and the UK;

overview Introduction results summary Proft after tax shareholder returns Dividends	32 32 33 33 34 34
group Debt	34
Cash flow	34
Investments	35
Property Investment revaluations	36
retail	36
overview of business	36
key financial results	36
retail–asia Pacifc	37
retail–europe	37
retail–americas	37
Communities	38
overview of business	38
key financial results	38
Communities–asia Pacifc	38
Communities–europe	40
Communities–americas	41
Public Private Partnerships	42
overview of business	42
key financial results	42
Public Private Partnerships–americas	42
Public Private Partnerships–europe	43
Investment Management	44
overview of business	44
key financial results	44
funds under Management	45
Project Management and Construction	45
key financial results	45
New work secured and backlog gPM	46
Corporate	47
group services	47
group treasury	47
appendix 1–results Detail	48
appendix 2–results Detail in local Currency	49

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 held indirectly through investments in Lend Lease managed funds in Asia Pacific and the UK;
Project Management and Construction provides construction, project management and design services across all regions through Bovis Lend Lease.

Results Summary

Results Summary	Results Summary
Revenue		EBITDA		Proft/(Loss) After Tax1
June 2008	June 2007	June 2008	June 2007	June 2008	June 2007
a$m	a$m	a$m	a$m	a$m	a$m
Retail 130.7	131.6	79.4	104.7	66.1	70.7
Communities 969.5	1,164.5	124.0	208.7	100.3	143.4
Public Private Partnerships 962.7	755.1	60.0	58.6	73.0	57.3
Investment Management 127.3	88.0	151.2	203.6	137.3	189.1
Project Management and Construction 12,426.8	12,056.7	198.9	50.2	147.2	43.3
Total operatingbusinesses 14,617.0	14,195.9	613.5	625.8	523.9	503.8
Group Services 7.6	8.3	(86.2)	(80.6)	(59.0)	(60.0)
Group Treasury 53.3	77.7	1.0	5.9	(14.8)	5.1
GroupAmortisation				(3.0)	(3.0)
Total corporate 60.9	86.0	(85.2)	(74.7)	(76.8)	(57.9)
Total operating 14,677.9	14,281.9	528.3	551.1	447.1	445.9
Inventory carrying value adjustment Propertyinvestment revaluations2		(121.5) (69.2)	82.7	(121.5) (60.2)	51.6
Total statutory 14,677.9	14,281.9	337.6	633.8	265.4	497.5

1 Profit after tax is after adjusting for the loss attributable to minority interests of A$6.4 million (June 2007: A$2.7 million profit after tax).

2 Represents the unrealised valuation movement on property investments that are consolidated or accounted for using the equity method in the Consolidated Financial Statements.

Profit After Tax

The Group’s statutory profit after tax decreased by 47% to A$265.4 million. The decrease in profit after tax is after recognising an adjustment to reduce the carrying value of inventory in Crosby Lend Lease (Crosby) by A$121.5 million after tax and net unrealised property investment revaluation losses on retail investments of A$60.2 million after tax. Operating profit after tax remained broadly flat at A$447.1 million. Excluding the interest received from the Australian Taxation Office (ATO) of A$32.2 million after tax in the prior year, operating profit increased by 8%. Additionally, operating profit after tax was negatively impacted by foreign exchange movements of A$30.7 million.

The Retail business includes net operating income from the Group’s direct investment in retail properties and property management and development fees. There was no profit realised from sales of retail property investments in the financial year.

There was a 27% increase in residential land settlements in the Communities business in Australia due to improved trading conditions in Queensland, Victoria and South Australia. This was offset by a decrease in residential built-form settlements and commercial sales in the year. Pre-sold units that had not settled at 30 June 2008 increased as a result of strong residential built-form sales in Sydney and Melbourne.

The UK residential market has experienced a significant slowdown, which has resulted in an A$30.7 million decline in operating profit after tax from the UK Communities business.

Investment Management continued its policy of recycling capital with the sale of a proportion of its interest in Australian Prime Property Funds (APPF) for a profit after tax of A$40.1 million. In Europe, profit after tax includes a tax exempt dividend of A$47.9 million from the Group’s interest in the advisor company to Lend Lease Global Properties, SICAF (Global Fund) in relation to incentive fees received, and profit distributions from the Group’s investment in the Global Fund of A$9.2 million after tax.

Project Management and Construction profit after tax increased in Asia Pacific, reflecting strong market conditions and the successful completion of a number of projects in Australia. Performance improved in Europe, although this business continues to be impacted by the work out of the loss making UK projects reported in the prior year and margin reductions on a number of projects. In the Americas, profit after tax was impacted by costs relating to a fire at the former Deutsche Bank project in New York.

Corporate costs after tax remained broadly flat. Group Treasury profit after tax decreased as the prior year included the recognition of interest income following a favourable judgement in the Federal Court in a tax dispute with the ATO.

In light of the difficult trading conditions in the UK residential market, Crosby has reduced the carrying value of its inventory by A$121.5 million after tax. In addition, statutory profit includes unrealised property investment revaluation losses of A$60.2 million after tax principally due to the expansion in capitalisation rates in the UK.

Profit after tax from the PPP business increased in the year due to a higher contribution from Actus Lend Lease (Actus). During the year Actus reached financial close on six projects and was named preferred bidder on one further project. In the UK, profit after tax decreased due to higher bid costs as new PPP projects came to market. The prior year also included the recovery of bid costs, principally on achieving financial close on the Lancashire Schools Phase 1 project.

2008 Annual Consolidated Financial Report Lend Lease Corporation 33

MD&a overview continued continued Shareholder Returns

overview continued Shareholder Returns
		June 2008	June 2007
Earnings per share (EPS) on operating proft1,2	cents	111.5	111.4
EPS on statutory proft1	cents	66.2	124.3
Return on equity (ROE) on statutory proft3	%	8.2	15.7
ROE on statutory proft(excludinginventorycarryingvalue adjustment)4	%	11.9	15.7

1 EPS is calculated using the weighted average number of shares on issue including treasury shares. Under the Australian Accounting Standards, shares held in employee benefit vehicles including employee share plans, which Lend Lease sponsors, are treated as Treasury shares and are excluded from the calculation. This would have the effect of increasing the EPS calculations above if applied.
2 The EPS calculation in the prior year includes the interest received from the ATO of A$32.2 million after tax. Excluding the interest from the ATO, the earnings per share on operating profit is 103.3 cents per share.
3 ROE is calculated based on statutory profit after tax and average equity.
4 ROE (excluding inventory carrying value adjustment) is calculated excluding the inventory carrying value adjustment in Crosby of A$121.5 million after tax from both profit and average equity.

Dividends

A final 45% franked dividend of 34 cents per share will be paid on 26 September 2008 (June 2007: 42 cents per share 50% franked). On a full year basis, this represents a payout ratio of 69.1% of operating profit after tax. The full year dividend of 77 cents per share is in line with last year.

Group Debt

Group Debt
		June 2008	June 2007
Net debt1	A$m	86.5	526.1
Gross borrowings to total tangible assets2	%	14.4	15.7
Interest coverage3	times	7.2	7.9
Credit rating (Standard & Poor’s/Moody’s)	rating	BBB–/Baa3	BBB–/Baa3

1 Net debt is borrowings excluding other financial liabilities, less cash.

2 Calculated as borrowings including other financial liabilities divided by total tangible assets.

3 Calculated as operating EBITDA plus interest revenue divided by gross finance costs, including capitalised finance costs.

The Group’s net debt as at 30 June 2008 was A$86.5 million, excluding other financial liabilities of A$200.9 million. The Group’s gearing remains low and interest coverage at 7.2 times is above the Group’s internal target.

The Group is in a strong liquidity position with un-drawn committed bank facilities of A$808.6 million as at 30 June 2008. In addition, the Group had cash and cash equivalents of A$842.8 million.

The average maturity of Lend Lease’s drawn debt at 30 June 2008 was 11 years, with the earliest maturity date being October 2012. The principal un-drawn committed facility is the £350.0 million syndicated bank facility, which matures in November 2010.

At 30 June 2008, the mix of borrowings, including the Bluewater lease, was 84% at fixed rates and 16% at floating rates. The Group continues to maintain an investment-grade credit rating.

Cash Flow

foating rates. The Group continues to maintain an investment-grade credit rating. Cash Flow
June 2008	June 2007
a$m	a$m
Net cash provided by operating activities 268.7	357.2
Net cash provided by/(used in) investing activities 364.5	(382.7)
Net cash (used in)/provided by fnancing activities (312.4)	57.1
Effect of foreign exchange rate movements on cash and cash equivalents (28.1)	(41.0)
Net increase/(decrease)in cash and cash equivalents 292.7	(9.4)

Operating cash inflows of A$268.7 million represent the underlying cash flows from the Group’s operating businesses net of continued investment in property developments. Operating cash inflows include the receipt of the tax refund and associated interest from the resolution of the tax dispute with the ATO.

Investing cash inflows of A$364.5 million reflect the Group’s recycling of capital including the sale of a proportion of its interest in APPF for a consideration of A$263.8 million and the net redemption of negotiable instruments of A$331.0 million. These cash inflows have been partially offset by the acquisition of investments such as Preston Tithebarn Unit Trust, Craigieburn and PPP loan stock.

Financing cash outflows of A$312.4 million principally relate to dividend payments of A$315.5 million (June 2007: A$237.2 million). The prior year included borrowings of £300.0 million raised from the issue of notes in the UK public bond market, offset by the net repayment of £185.0 million of the £350.0 million syndicated bank facility.

Investments

Investments
		lend lease	lend lease
		share of	share of	Market	Market
		Income1,2	Income1,2	value3	value3
		June 2008	June 2007	June 2008	June 2007
	region	a$m	a$m	a$m	a$m
Retail
Bluewater	UK	58.5	67.1	1,188.8	1,560.0
King of Prussia	USA	25.7	28.2	421.7	483.8
Other retail investments	Various	11.5	11.7	406.0	460.2
Total Retail		95.7	107.0	2,016.5	2,504.0
Investment Management
Other retail investments	Various	70.0	37.3	505.5	766.1
Other investments	Various	22.7	134.2	98.3	150.9
Total Investment Management		92.7	171.5	603.8	917.0
Total investments		188.4	278.5	2,620.3	3,421.0

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 30 June 2008 includes gains on the disposal or redemption of available for sale financial assets of A$67.0 million (June 2007: A$133.4 million).

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$2.6 billion at 30 June 2008. The decrease in market value is attributable to the sale of a proportion of the Group’s interest in APPF, foreign exchange movements and valuation adjustments across the portfolio. There has been a weakening of capitalisation rates in the UK, which has negatively impacted on market values in the year.

The independent market value of 100% of Bluewater at 30 June 2008 decreased by 12% to £1,902.0 million (A$3,962.5 million). Lend Lease’s 30% direct interest decreased in value by A$371.2 million, including negative foreign exchange movements, to A$1,188.8 million. As Bluewater is held as inventory, the asset is recorded at historical cost in the financial statements, which at 30 June 2008 was A$520.7 million (June 2007: A$596.1 million).

The value of Lend Lease’s 50% interest in King of Prussia increased by 1% to US$400.6 million, although the Australian dollar equivalent value decreased.

Other retail investments held by Retail have decreased by A$54.2 million due to a decline in the market value, including foreign exchange movements, across the UK portfolio. The Group acquired an interest in the Preston Tithebarn Unit Trust for A$36.3 million in the year.

Other retail investments held by Investment Management reduced by A$260.6 million primarily due to the sale of a proportion of the Group’s interest in APPF. The market value of the Group’s remaining interest in APPF increased by 9% and the market value of Asia Pacific Investment Company No. 2 Limited (APIC II) increased by 23%. These revaluation increases were offset by a decrease, including foreign exchange movements, in the value of the Group’s UK investments.

Other investments in Investment Management decreased by A$52.6 million primarily due to capital returns from the Asia Pacific Investment Company Limited (APIC) and the sale of a proportion of the Group’s interest in Cohen & Steers, SICAV. Cohen & Steers, SICAV is a legacy position related to the former Real Estate Investment (REI) business. During the year, the Group’s interest in property investments generated investment income EBITDA of A$121.4 million, excluding gains on the disposal or redemption of available for sale financial assets.

2008 Annual Consolidated Financial Report Lend Lease Corporation 35

overview continued Property Investment Revaluations

MD&a continued

overview continued Property Investment Revaluations
		unrealised	unrealised
		revaluation	revaluation
		gain/(loss)	gain/(loss)
		before tax	before tax
		June 2008	June 2007
	region	a$m	a$m
Retail
Pakenham Place	Australia	(2.9)
Chelmsford Meadows Shopping Centre	UK	(34.7)	2.3
Performance Retail Limited Partnership	UK	(9.5)	0.7
Warrington Retail Limited Partnership	UK	(31.1)
Kingof Prussia	USA	(6.9)	62.3
Propertyinvestment revaluations on Retail investments		(85.1)	65.3
Investment Management
APIC II	Asia	22.7	13.6
Lend Lease Overgate Partnership	UK	(6.8)	3.8
Property investment revaluations on Investment Management
investments		15.9	17.4
Totalpropertyinvestment revaluations1		(69.2)	82.7

1 Represents the unrealised valuation movement on property investments that are consolidated or accounted for using the equity method in the Consolidated Financial Statements and are therefore included in statutory profit.

Retail

Overview of Business

Lend Lease focuses on shopping centres with expansion potential in growing catchment areas. This business strategy is designed 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 property management).

Key Financial Results

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

	Revenue	Revenue	EBITDA	EBITDA	Proft/(Loss) After Tax	Proft/(Loss) After Tax
	June 2008	June 2007	June 2008	June 2007	June 2008	June 2007
	a$m	a$m	a$m	a$m	a$m	a$m
Property Management
Asia Pacifc	34.2	23.0	2.0	(1.3)	1.3	(1.0)
Europe	22.2	25.6	(18.3)	(1.0)	(15.5)	(2.0)
Total	56.4	48.6	(16.3)	(2.3)	(14.2)	(3.0)
Investment Income
Asia Pacifc	1.1	0.5	0.6	0.2	0.4	0.1
Europe	73.2	82.5	69.4	79.7	57.8	53.7
Americas			25.7	27.1	22.1	19.9
Total	74.3	83.0	95.7	107.0	80.3	73.7
Total Operating
Asia Pacifc	35.3	23.5	2.6	(1.1)	1.7	(0.9)
Europe	95.4	108.1	51.1	78.7	42.3	51.7
Americas			25.7	27.1	22.1	19.9
Total operating	130.7	131.6	79.4	104.7	66.1	70.7
Property Investment
Revaluations
Asia Pacifc			(2.9)		(2.8)
Europe			(75.3)	3.0	(64.7)	1.7
Americas			(6.9)	62.3	(4.0)	36.4
Total	–	–	(85.1)	65.3	(71.5)	38.1

Total operating profit after tax in Asia Pacific increased by A$2.6 million from the prior year as property management fees increased from new properties under management and developments in Australia and Asia. In Europe, total operating profit after tax declined by A$9.4 million due to higher overheads as the business continued to invest in its development pipeline. In addition, the prior year included a residual profit relating to Chapelfield, Norwich. Profit after tax in the Americas relates to the Group’s interest in King of Prussia.

Net property investment revaluation losses of A$71.5 million after tax were recognised in the year due to the value of retail investments being negatively impacted by current market conditions, principally in the UK.

Retail – Asia Pacific

In Asia Pacific, Lend Lease holds a direct ownership interest in four development opportunities. The business is currently undertaking master planning and development management of seven centres in Australia and two in Asia with an estimated gross development cost of A$2.7 billion (June 2007: A$2.1 billion). In addition, the business carries out the property management of nine centres in Australia and two in Asia with a total gross lettable area of 599,700 square metres (sqm).

Key trading events in the year include:

Construction and pre-leasing progressing on schedule at the 313@Somerset retail development, one of the last remaining major retail development opportunities on Orchard Road, Singapore. The development is expected to be completed in 2010. Lend Lease has a 25% direct ownership interest in the development with the remaining 75% held by Lend Lease Asian Retail Investment Fund, in which Lend Lease holds a 10.1% interest. Lend Lease is managing all phases of the project including development, leasing, project management and design and construction and, on completion, asset and property management;
Construction commencing on the 420 George Street retail and office development in the Sydney central business district. APPF Retail (APPFR) holds a 25% interest in the retail development and APPF Commercial (APPFC) holds a 25% interest in the office development, alongside an external owner who holds the remaining 75%. Completion of this development is expected in 2011. Lend Lease is undertaking development management, retail leasing, design and construction and, on completion, retail property management;
Commencing the redevelopment of the Paradiz Centre, a retail and office building in Singapore. Completion of the redevelopment is expected in 2009. Lend Lease has a 25% direct ownership interest in the asset and is managing all phases of the project including development, leasing, project management, design and construction and, on completion, asset and property management;
Acquisition of Craigieburn, a greenfield mixed use development opportunity in Northern Melbourne, Victoria. Lend Lease holds a 25% direct ownership interest in the retail development with the remaining 75% held by APPFR. Construction is expected to commence in 2009 and to be completed in 2011. Lend Lease is managing all phases of the project including development, leasing, project management, design and construction and, on completion, asset and property management.

Retail – Europe

In Europe, Lend Lease’s Retail business includes an ownership interest in five retail centres in the UK. The business has development opportunities at three centres, which are expected to deliver an additional 236,900 sqm of retail space at an estimated gross development cost of A$2.1 billion (June 2007: A$3.2 billion). The business carries out the asset management of five centres with a total gross lettable area of 331,400 sqm.

Key trading events in the year include:

Acquiring a 50% interest in the Tithebarn, Preston scheme from Grosvenor Estates. The roles and responsibilities for the delivery of the project are shared equally with Grosvenor Estates;
In January 2008, the Performance Retail Limited Partnership sold its interest in the Cameron Toll shopping centre in Edinburgh at book value;
During the year the Development Management Service Agreement with Minerva Plc was terminated on Park Place, Croydon. In addition, the Cooperation Agreement with Stockport Metropolitan Borough Council for the development of Bridgefield, Stockport expired. As preferred developer status is no longer held on these projects, they have been removed from the development pipeline;
Statutory profit includes unrealised investment revaluation losses of A$64.7 million after tax. Market conditions in the UK have deteriorated, which has resulted in an expansion of retail capitalisation rates.

Retail – Americas

In the Americas, Lend Lease’s Retail business comprises a 50% ownership interest in the partnership that owns the King of Prussia Mall in Pennsylvania. Lend Lease’s share of partnership income for the year was up 4% in US dollar terms compared to the prior year.

2008 Annual Consolidated Financial Report Lend Lease Corporation 37

MD&a continued

communities

Overview of Business

The Communities business is involved in the development of large scale urban regeneration and greenfield development projects. The Lend Lease business model includes land sourcing, master planning and design, product development and marketing. The scale and scope of the Communities development positions ensure earnings are derived from a diverse range of projects. This diversity reduces the portfolio risk and also generates product for both the Investment Management and Project Management and Construction businesses.

Key Financial Results

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

	Revenue	Revenue	EBITDA	EBITDA	Proft/(Loss) After Tax	Proft/(Loss) After Tax
	June 2008	June 2007	June 2008	June 2007	June 2008	June 2007
	a$m	a$m	a$m	a$m	a$m	a$m
Asia Pacifc	579.0	733.5	104.2	135.6	82.7	90.9
Europe	390.1	430.9	25.5	73.0	21.1	51.8
Americas	0.4	0.1	(5.7)	0.1	(3.5)	0.7
Total operating	969.5	1,164.5	124.0	208.7	100.3	143.4
Inventory carrying value
adjustment			(121.5)		(121.5)
Total	969.5	1,164.5	2.5	208.7	(21.2)	143.4

Operating profit after tax for the year decreased by A$43.1 million to A$100.3 million. This primarily relates to a reduction in the contribution from Crosby due to the significant slowdown in the UK residential market. In Asia Pacific, there was a change in product mix in the year with a significant increase in residential land settlements being offset by a decrease in residential built-form settlements and commercial sales. Residential built-form sales are recognised on completion of the relevant building and therefore can vary significantly from year to year. The estimated sales value of the Communities backlog is more than A$30.0 billion with a total residential backlog of 116,925 units and a total commercial backlog at 5.0 million sqm.

In light of the difficult trading conditions in the UK residential market, Crosby has reduced the carrying value of its inventory by A$121.5 million after tax.

Communities – Asia Pacific

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

of its inventory by A$121.5 million after tax. Communities – Asia Pacifc The key fnancial results for Communities – Asia Pacifc are detailed below.
June 2008	June 2007
Operating proft after tax (A$m) 82.7	90.9
Number of units settled1 3,439	2,795
Gross sales value of units settled (A$m)1,2 949.7	940.5
Gross sales value of pre-sales (A$m)1,3 589.4	366.8
Number of projects 47	46
Backlog (number of units)4 − Zoned (with planning approval) 27,090	31,055
− Unzoned(awaiting planningapprovals) 58,240	53,890
Backlog– Residential(units) 85,330	84,945
Backlog – Commercial (sqm/000s)5 3,228.8	2,751.1
Estimated sales value of total backlog (A$b)6 18.7	17.7

1 Includes 100% of joint venture projects and therefore will not necessarily correlate with Lend Lease’s profit after tax.

2 Gross sales value of units settled reflects residential and non-residential revenue from projects and the sale of deferred management fees.

3 Pre-sales represent contracts entered into prior to 30 June 2008 that 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 periods. The gross sales value of pre-sales refers to the gross revenue from these pre-sales.

4 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.

5 Includes approximately 430,500 sqm of Retail backlog.

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

Communities – Asia Pacific is focused on building a portfolio of market leading projects and assets in key sectors including master planned communities through Delfin Lend Lease; senior living through Retirement by Design; apartments through Vivas Lend Lease; and integrated mixed-use property developments through Lend Lease Development. This business has 47 projects, located predominantly on Australia’s eastern seaboard. The 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 are detailed below.

	Residential	Residential
	Land Lots		Residential Built‑Form		Commercial5		Senior	Living	Total
	June	June	June	June	June	June	June	June	June	June
	2008	2007	2008	2007	2008	2007	2008	2007	2008	2007
Settlements1
Number of units2	3,104	2,435	283	330			52	30	3,439	2,795
Gross sales
value(A$m)3	505.0	364.6	207.0	340.2	220.3	191.2	17.4	44.5	949.7	940.5
Pre-sales1,4
Number of units	1,217	1,220	362	144			6	3	1,585	1,367
Gross sales
value(A$m)	220.8	200.6	348.9	114.4	17.7	50.4	2.0	1.4	589.4	366.8

1 Includes 100% of joint venture projects and therefore will not necessarily correlate with Lend Lease’s profit after tax.

2 The number of units settled during the year for Senior Living refers to primary sales (new development sites) and excludes any resales.

3 Gross sales value of units settled reflects revenue from projects and the sale of deferred management fees.

4 Pre-sales number of units represents contracts entered into prior to 30 June 2008 that 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 periods. The gross sales value of pre-sales refers to the gross revenue from pre-sales, including revenue earned from joint venture projects.

5 The number of units settled and pre-sales number of units are not relevant measures for Commercial.

Key trading events in the year include:

A change in product mix in the year, with a significant increase in residential land settlements being offset by a decrease in residential built-form settlements. The prior year also included the profit after tax from the sale of three Communities projects to the Lend Lease Communities Fund 1 and the sale of the Keperra retirement village to the Lend Lease Core Plus Fund. There were no similar sales of residential projects or retirement villages in the current year;
The total number of residential land units settled increased by 27% to 3,104 units. Residential land settlements increased significantly due to improved trading conditions in Queensland, Victoria and South Australia;
The average sales price per residential land lot increased 9% from A$149,700 to A$162,700, which reflects the commencement of trading on exclusive beachfront land at the Hyatt Coolum project;
Residential built-form units settled declined by 47 units to 283 units as the prior year included the settlement of 133 units at Dock 5, Victoria Harbour. The current year included the first built-form settlements at Nelsons Ridge and Rouse Hill in Sydney as well as continued built-form settlements at Edgewater in Melbourne and St. Patrick’s Estate in Sydney;
The average sales price per residential built-form unit decreased 29% from A$1.0 million to A$731,000, which reflects the significant proportion of high value Dock 5 apartments at Victoria Harbour that settled in the prior year;
Total gross sales value settled of A$949.7 million was broadly in line with the prior year due to increased residential land settlements offsetting lower residential built-form settlements;
The carry-over position for residential land lots pre-sold as at 30 June 2008 is 1,217 units, which is in line with the prior year. Residential built-form pre-sales increased to 362 units at 30 June 2008, with strong sales at Victoria Harbour, Melbourne, and Jacksons Landing, Sydney;
Securing the rights to acquire 219 hectares of land at Gawler, South Australia, which adds 2,750 lots to unzoned backlog. The South Australian Government has announced that the site is to be included in the Urban Growth Boundary for Adelaide and has initiated the rezoning process;
Lend Lease has been selected as preferred proponent to develop 88 hectares of land at Blakeview, South Australia. This has added 1,600 lots to unzoned backlog. This site is included in the Urban Growth Boundary for Adelaide and is undergoing rezoning;
Lend Lease has been selected as the preferred proponent to develop the Darling Walk site, a 64,000 sqm commercial project at Darling Harbour, Sydney, under leasehold from the Sydney Harbour Foreshore Authority, with APPFC and an institutional investor as the 50/50 joint owners of the 99-year lease. Lend Lease will provide development, design and construction services;
Lend Lease entered into a contract with APPFC for the development of the new 29,130 sqm office for Myer in the Victoria Harbour precinct, Melbourne. Lend Lease will provide development, design and construction services;
Lend Lease acquired Lutanda Manor retirement village at Pennant Hills, Sydney, managed by Retirement by Design.
Commercial gross sales value of A$220.3 million includes the sale of commercial land at Victoria Harbour to Australia and New Zealand Banking Group Limited and commercial land sales in NSW including Rouse Hill and St Marys, and Twin Waters and Varsity Lakes in Queensland;

2008 Annual Consolidated Financial Report Lend Lease Corporation 39

MD&a communities continued continued Communities – Europe

In Europe, the Communities business comprises Crosby, an urban regeneration specialist operating in major northern England cities such as Manchester, Leeds and Birmingham, and large scale redevelopment projects at Greenwich, Stratford and Elephant and Castle. This business also holds a 45% interest in First Base, a company specialising in affordable housing and community projects in London. The key financial results for Communities – Europe are detailed below.

Base, a company specialising in affordable housing and community projects in London. The key fnancial results for Communities – Europe are detailed below.
June 2008	June 2007
Operating proft after tax (A$m)1 21.1	51.8
Inventory carrying value adjustment (121.5) Number of units settled2 976	708
Gross sales value of units settled (A$m)2,3 380.2	523.2
Gross sales value of pre-sales (A$m)2,4 41.6	371.3
Number of projects 27	21
Backlog (number of units)5 − Zoned (with planning approval) 13,520	13,605
− Unzoned(awaiting planningapprovals) 950	1,115
Backlog– Residential(units) 14,470	14,720
Backlog – Commercial (sqm/000s)6 422.6	435.0
Estimated sales value of total backlog (A$b)7 13.0	13.0

1 Excludes the inventory carrying value adjustment in Crosby.

2 Includes 100% of joint venture projects and therefore will not necessarily correlate with Lend Lease’s profit after tax.

3 Gross sales value of units settled reflects residential and non-residential revenue from projects.

4 Pre-sales represent contracts entered into prior to 30 June 2008 that 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 periods. The gross sales value of pre-sales refers to the gross revenue from these pre-sales.

5 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.

6 Includes approximately 59,800 sqm of Retail backlog.

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

Communities – Europe has 27 projects, namely the three London-based redevelopment projects at Greenwich, Stratford and Elephant and Castle and 24 Crosby projects. The Crosby projects are predominantly mid to high rise apartment developments on brownfield urban regeneration sites. The product lines of the Communities business are: residential land lots; residential built-form (including houses, terraces and apartments); and commercial (including retail, office, light industrial and social infrastructure). The key financial results of the Communities – Europe business by product line are detailed below.

	Residential
	Land Lots	Residential Built‑Form	Commercial4		Total
	June 2008 June 2007	June 2008 June 2007	June 2008	June 2007	June 2008 June 2007
Settlements1,2
Number of units		976 708			976	708
Gross sales value(A$m)		351.8 295.7	28.4	227.5	380.2	523.2
Pre-sales1,3
Number of units	228 228	57 844			285	1,072
Gross sales value(A$m)	15.6 27.0	26.0 338.4		5.9	41.6	371.3

1 Includes 100% of joint venture projects and therefore will not necessarily correlate with Lend Lease’s profit after tax.

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

3 Pre-sales number of units represents contracts entered into prior to 30 June 2008 including contracts from joint venture projects that 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 periods. 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.

Key trading events in the year include:

Operating profit after tax has decreased by A$30.7 million principally due to a decrease in the profit contribution from Crosby as a result of the significant slowdown of the UK residential market. This was partially offset by the profit from the settlement of units at Adelaide Wharf;
In light of the difficult trading conditions in the UK residential market, Crosby has reduced the carrying value of its inventory by A$121.5 million after tax;
The gross sales value of units settled decreased by A$143.0 million primarily due to the slowdown in the UK housing market;
The average sales price per residential unit decreased due to reductions in sales prices in line with current market conditions and changes in product mix across existing projects. The major projects contributing to sales revenue in the year were Clarence Dock, Leeds, and Green Quarter, Manchester, where in the prior year sales revenue included settlements from higher priced product at Navigation Street, Birmingham and Quay Street, Manchester;
Commercial revenue of A$28.4 million primarily relates to the sale of office and commercial space at Clarence Dock in Leeds;
The gross sales value of pre-sales declined to A$41.6 million, reflecting the slowdown in the UK residential market;
Backlog residential units were 14,470 at 30 June 2008, which is in line with last year;
Communities – Europe has a 45% investment in First Base. In addition to its equity stake in First Base, Lend Lease directly invested in the Company’s first project, Adelaide Wharf, which comprised 147 apartments, all of which settled in the year;
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. Construction has commenced on the first commercial development and two residential sites are expected to commence in 2009;
In March 2007, Lend Lease was appointed as preferred bidder for the development of Stratford City zones two to seven by the Olympic Delivery Authority (ODA) and London and Continental Railways (LCR). The project involves a mixed-use development on 54 hectares of land with an existing planning consent on 9.4 million square feet. The first stage of development involves building the Athletes’ Village for the London 2012 Olympic and Paralympic Games. Lend Lease is in negotiations with the ODA and LCR to agree a Regeneration Agreement governing the development arrangements. Lend Lease and its partners First Base and East Thames are currently working under interim arrangements to progress the development in advance of signing the Regeneration Agreement. In the interim, the Group’s costs associated with this work (excluding negotiation costs) are being funded or underwritten by the ODA;
During the year Lend Lease and its partners First Base and Oakmayne were selected by the London Borough of Southwark as preferred development partner for the Elephant and Castle project, a large mixed-use regeneration scheme in London. Lend Lease has entered into negotiations with the intention of entering into a Regeneration Agreement to develop the site.

Communities – Americas

In the USA, the Communities business focuses on large scale urban greenfield development and regeneration opportunities. The business has two projects in Denver, Colorado: Horizon Uptown (formerly known as Horizon City Center) and Lowry Range.

The key financial results for Communities – Americas are detailed below.

known as Horizon City Center) and Lowry Range. The key fnancial results for Communities – Americas are detailed below.
	June 2008	June 2007
Operating proft/(loss) after tax (A$m)	(3.5)	0.7
Number of units settled1	1	74
Gross sales value of units settled (A$m)1,2	0.3	96.4
Number of projects	2	3
Backlog (number of units)3
− Zoned (with planning approval)	3,760	2,951
− Unzoned(awaiting planningapprovals)	13,365	12,930
Backlog– Residential(units)	17,125	15,881
Backlog – Commercial (sqm/000s)4	1,382.7	1,317.1
Estimated sales value of total backlog (A$b)5	2.2	2.3

1 Includes 100% of joint venture projects and therefore will not necessarily correlate with Lend Lease’s profit after tax.
2 Gross sales value of units settled reflects revenue from projects.

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

4 Includes approximately 575,500 sqm of Retail backlog.
5 The estimated sales value of total backlog includes both Company-owned and joint venture projects.

Key trading events in the year include:

Progressing the Lowry Range project with the Colorado State Land Board. The Lowry Range project is a 1,600 hectare mixed-use housing, retail and commercial community. It is expected that construction will commence on the site in 2011;
A revised master plan was approved by the City of Aurora on the Horizon Uptown project. The project is expected to be launched in 2011, subject to favourable market conditions;
Settlement of the final condominium at the San Francisco Piers Terminal development project.

2008 Annual Consolidated Financial Report Lend Lease Corporation 41

MD&a public private partnerships continued Overview of Business

The PPP business consists of Actus in the USA and the Private Finance Initiatives (PFI) in Europe.

Key Financial Results

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

	Revenue	Revenue	EBITDA	EBITDA	Proft	After Tax
	June 2008	June 2007	June 2008	June 2007	June 2008	June	2007
	a$m	a$m	a$m	a$m	a$m		a$m
Americas	856.2	643.9	79.4	51.7	72.2		43.0
Europe	106.5	111.2	(19.4)	6.9	0.8		14.3
Total Public Private
Partnerships	962.7	755.1	60.0	58.6	73.0		57.3

Public Private Partnerships – Americas

The primary focus of Actus is the Military Housing Privatization Initiative (MHPI) for all branches of the USA Military. The MHPI program includes family housing, lodging and barracks and has a total value of approximately US$30 billion, of which to date approximately US$19.5 billion of housing projects and the initial US$0.4 billion lodging project have been released. Under the MHPI, Actus is selected to own, finance, construct and operate projects for a period of 50 years.

The key financial results for PPP – Americas are detailed below.

construct and operate projects for a period of 50 years. The key fnancial results for PPP – Americas are detailed below.
June 2008	June 2007
Proft after tax (A$m) 72.2	43.0
Development gross proft margin (GPM) (A$m) 46.7	27.2
Construction GPM (A$m) 47.1	47.3
Asset management GPM (A$m) 11.3	8.0
Equity returns (A$m) 2.4	2.4
Number of projects1 19	16
Backlog (number of units under management) − Operational (secured) 38,450	31,500
− Preferred bidder(awarded) 6,300	10,900
Total backlog 44,750	42,400

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

Key trading events in the year include:

Increased development fee income as six projects reached financial close in the year, namely Air Combat Command Group II, Fort Drum Unaccompanied Officer Quarters, Hickam Phase 2, Tri-Group, Camp Lejeune Phase 3 and Fort Drum Additional Scoring (an extension to the Fort Drum privatisation contract). Development fees represent a fee for service and are not at risk for project performance;
Selection as preferred bidder on the privatisation contract for Fort Wainwright and Fort Greely in Fairbanks, Alaska. The estimated construction value of this project is US$370.0 million;
Increasing units under management by 2,350 to 44,750 units, with occupancy levels across the portfolio continuing to meet project expectations.

new work secured and backlog gpM

new work secured and backlog gpM
	New work	New work
	secured	secured	backlog	backlog
	gPM	gPM	gPM	gPM
	June 2008	June 2007	June 20081	June 20071
	a$m	a$m	a$m	a$m
Projects in operational status (secured)	165.2	122.4	382.3	351.4
Projects inpreferred bidder status(awarded)2	(83.4)	56.7	65.2	185.6
Total	81.8	179.1	447.5	537.0

1 Backlog GPM disclosed includes 10 years backlog from facilities management even though the contracts run for up to 50 years. 2 Projects in preferred bidder status include the GPM on projects that were awarded preferred bidder status in the year, offset by the GPM transferred from preferred bidder status to operational status following financial close of projects in the year.

Total Backlog GPM at 30 June 2008 was impacted by a negative movement in foreign exchange of $66.3 million.

backlog gpM Realisation

backlog gpM Realisation
	Year	Year
	ending	ending	Post
	June 2009	June 2010	June 2010	total
	%	%	%	%
Projects in operational status (secured)	21	19	60	100
Projects inpreferred bidder status(awarded)	24	18	58	100
Total	21	19	60	100

Public Private Partnerships – Europe

The PPP business in the UK is focused on four sectors: health, education, waste and accommodation. Under PPP schemes, Lend Lease is selected to own, finance, construct and operate projects for a period of up to 40 years. The PPP result includes asset management GPM, facilities management GPM, returns on equity, loan stock interest and net bid costs. The PPP result does not include construction GPM, which is included in Project Management and Construction.

The key financial results for PPP – Europe are detailed below.

is included in Project Management and Construction. The key fnancial results for PPP – Europe are detailed below.
	June 2008	June 2007
Proft after tax (A$m)	0.8	14.3
Operating GPM (A$m)	16.4	15.6
Equity returns (A$m)1	34.3	23.0
Number of projects2	19	19
New work secured3	2.4	25.1
Backlog GPM3,4	73.8	75.7
Equity
− Invested ($Am)	147.9	123.6
− Committed($Am)	59.8	103.4

1 Including loan stock interest.

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

3 Relates to secured projects.

4 Backlog GPM disclosed includes only 10 years backlog from facilities management even though PFI contracts run for longer periods of up to 40 years.

Key trading events in the year include:

Profit after tax decreased to A$0.8 million due to higher bid costs as new PPP projects came to market. Also, the prior year included the recovery of bid costs, principally on achieving financial close of the Lancashire Schools Phase 1 project;
Achieving financial close on Phase 2 of the £1.0 billion Lancashire Building Schools for the Future (BSF) project; − An increase in the number of operational assets, with the operational handover of the £175.0 million Leeds Hospital, additional phases of the £169.0 million Sheffield University Student Accommodation and the £24.0 million Phase 3 of Hexham Hospital;
Selection as one of two remaining bidders on the £1.0 billion Birmingham BSF project and the £0.4 billion Salford BSF project.

2008 Annual Consolidated Financial Report Lend Lease Corporation 43

MD&a continued

investment Management

Overview of Business

The Investment Management business has A$9.3 billion (June 2007: A$8.9 billion) of funds under management (FUM) (excluding joint ventures). This business also includes investments held indirectly in property assets with a market value of A$603.8 million (June 2007: A$917.0 million).

Key Financial Results

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

	Revenue1	Revenue1		EBITDA	EBITDA	Proft/(Loss) After Tax	Proft/(Loss) After Tax
	June 2008	June	2007	June 2008	June 2007	June 2008	June 2007
	a$m		a$m	a$m	a$m	a$m	a$m
Funds Management
Asia Pacifc	55.4		52.7	15.7	15.6	11.2	14.4
Europe	52.4		5.1	41.7	7.9	41.9	9.3
Americas				1.1	8.6	1.0	5.0
Total	107.8		57.8	58.5	32.1	54.1	28.7
Investment Income2
Asia Pacifc	12.1		25.2	66.7	23.0	60.6	15.3
Europe	3.8		3.5	22.5	146.7	20.0	144.1
Americas	3.6		1.5	3.5	1.8	2.6	1.0
Total	19.5	30.2		92.7	171.5	83.2	160.4
Total Operating
Asia Pacifc	67.5		77.9	82.4	38.6	71.8	29.7
Europe	56.2		8.6	64.2	154.6	61.9	153.4
Americas	3.6		1.5	4.6	10.4	3.6	6.0
Total operating	127.3	88.0		151.2	203.6	137.3	189.1
Property Investment
Revaluations3
Asia Pacifc				22.7	13.6	15.9	10.8
Europe				(6.8)	3.8	(4.6)	2.7
Total	–		–	15.9	17.4	11.3	13.5

1 Revenue excludes proceeds received from the sale of investments, redemption 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. EBITDA and profit after tax includes gains on the disposal or redemption of available for sale financial assets of A$67.0 million (June 2007: A$133.4 million) and A$59.4 million (June 2007: A$133.4 million) respectively.

3 Represents the unrealised valuation movement on property investments that are consolidated or accounted for using the equity method in the Consolidated Financial Statements.

Key trading events in the year include:

asia pacific

The Funds Management business continued to enjoy strong support from its wholesale investor base. A new managed investment mandate was secured in December 2007 on behalf of a major institutional investor. The mandate relates to an investment in two landmark Australian commercial properties acquired in joint venture with APPF;
Profit after tax from Funds Management decreased by A$3.2 million to A$11.2 million primarily due to investment in the Singapore platform to support future growth;
Profit after tax from Investment Income increased by A$45.3 million to A$60.6 million primarily due to the sale of a proportion of the Group’s investment in APPF, which realised a profit after tax of A$40.1 million. The APIC vehicle in Singapore successfully sold its last remaining asset during the year, resulting in profit after tax of A$6.1 million on the Group’s investment.

europe

Profit after tax from Funds Management increased by A$32.6 million to A$41.9 million this year primarily due to the receipt of a tax exempt dividend of A$47.9 million from the Group’s interest in the advisor company to the Global Fund in relation to incentive fees received. The prior year included a profit after tax from the sale of the Group’s interest in Generali Lend Lease of A$12.6 million;
Profit after tax from Investment Income decreased by A$124.1 million to A$20.0 million as the current year includes profit distributions, including foreign exchange movements, from the Group’s investment in the Global Fund of A$9.2 million after tax, while in the prior year these distributions were A$136.6 million after tax. The Group also sold a proportion of its investment in Cohen & Steers, SICAV in the current year for a profit after tax of A$3.6 million.

americas

Profit after tax relates to the continued wind up of the residual US REI business.

Funds Under Management

Funds Under Management
			total	total
	asia Pacifc	europe	June 2008	June 2007
	a$b	a$b	a$b	a$b
FUM at the beginning of the fnancial year	6.1	2.8	8.9	7.0
Foreign exchange movement1		(0.3)	(0.3)
Additions	0.7		0.7	1.3
Reductions	(0.1)		(0.1)	(0.1)
Net revaluations	0.4	(0.3)	0.1	0.7
FUM at the end of the fnancial year
(excluding joint ventures)2	7.1	2.2	9.3	8.9
FUM fromjoint venture interests3			–	1.6
FUM at the end of the fnancial year
(including joint ventures)2	7.1	2.2	9.3	10.5

1 Foreign exchange movement arising from translating opening FUM in local currency between June 2007 and June 2008.

2 FUM represents the gross market value of real estate and other related assets managed on behalf of investors. 3 Joint venture FUM includes Lend Lease’s proportional share of the FUM.

FUM (excluding joint ventures) increased by A$0.4 billion to A$9.3 billion in the year. In Asia Pacific, FUM increased to A$7.1 billion, with additions of A$0.7 billion largely related to property acquisitions in APPF of A$0.4 billion and the Group securing a new managed investment mandate on behalf of a major institutional investor of A$0.2 billion. Revaluation gains in Asia Pacific, across existing managed assets, added A$0.4 billion. In Europe, the value of FUM declined by A$0.6 billion as a result of negative foreign exchange movements and a net revaluation decrease.

The Australian business secured a pipeline of acquisitions and new development opportunities during the year. On completion, this pipeline will add A$0.9 billion to FUM over the following four years. These amounts include A$0.4 billion of future FUM that relate to the new managed investment mandate. This new pipeline excludes development opportunities on existing managed assets across the platform.

The Group sold its interest in the Resolution Capital joint venture in July 2007.

project Management and construction

Key Financial Results

The key financial results for the Project Management and Construction business are summarised below.

							Proft/(Loss)	Proft/(Loss)
	Revenue		Realised GPM		EBITDA		After Tax
	June 2008	June 2007	June 2008	June 2007	June 2008	June 2007	June 2008	June 2007
	a$m	a$m	a$m	a$m	a$m	a$m	a$m	a$m
Asia Pacifc	2,752.5	2,374.9	193.9	142.8	97.2	63.5	69.0	54.6
Americas	6,011.5	6,063.8	206.1	189.1	70.0	89.7	59.7	65.9
Europe	3,662.8	3,618.0	184.9	33.2	31.7	(103.0)	18.5	(77.2)
Total Project Management
and Construction	12,426.8	12,056.7	584.9	365.1	198.9	50.2	147.2	43.3

Project Management and Construction profit after tax was A$147.2 million, an increase of A$103.9 million over the prior year. The June 2007 result included 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$9.8 million.

Total revenue increased by A$0.4 billion. Revenue was negatively impacted by foreign exchange movements of A$1.3 billion. The increase in revenue, excluding foreign exchange movements, reflects higher volumes in Asia Pacific and the Americas.

Key trading events in the year include:

asia pacific

− Profit after tax increased by A$14.4 million, reflecting the strong market conditions and successful completion of a number of projects in Australia. Key contributions to GPM in Australia included the Rouse Hill Town Centre retail project in Sydney, the Queensland Government Preparatory Schools Rollout and the Correctional Facilities projects in Queensland, and the ATO building and Australian Capital Territory Correctional Facility in Canberra. In Asia, the telecommunications rollout in Japan and the Singapore Capacity Expansion Project were key contributors during the year.

americas

− Profit after tax for the Americas business of A$59.7 million is an A$6.2 million decrease on the prior year. Profit after tax was negatively impacted by foreign exchange movements of A$8.4 million and costs relating to the fire at the former Deutsche Bank project in New York. Key contributions to GPM included the Mets Stadium, the residential projects at 15 William Street in New York and Paramount Bay in Miami, and the Trump Taj Mahal hotel project in Atlantic City.

2008 Annual Consolidated Financial Report Lend Lease Corporation 45

MD&a continued

project Management and construction continued

europe

The European business contributed A$18.5 million in profit after tax for the year. Performance improved although this business continues to be impacted by the work out of the UK projects where a provision was taken in the prior year and margin reductions on a number of projects. Key contributions to GPM included the Ministry of Defence SLAM project, the commercial projects at 200 Aldersgate Street and Morgan Stanley Phases 2–7, and the BP Global Alliance.

profitability Ratio

The strong performance in Asia Pacific resulted in the profitability ratio for the region (defined as EBITDA divided by realised GPM) increasing to 50% (June 2007: 44%). The profitability ratio in the Americas declined to 34% (June 2007: 47%). The return to profitability in Europe has resulted in a profitability ratio of 17% this year.

New Work Secured and Backlog GPM

of 17% this year. New Work Secured and Backlog GPM
	New work	New work
	secured	secured	backlog	backlog
	gPM	gPM	gPM	gPM
	June 2008	June 2007	June 20081	June 20071
	a$m	a$m	a$m	a$m
Asia Pacifc	350.5	163.2	282.0	125.4
Americas	182.8	285.5	236.7	296.6
Europe	182.2	32.0	269.6	295.2
Total	715.5	480.7	788.3	717.2

1 Although backlog GPM is run off over several years, the average foreign exchange rate for the current year has been applied to the closing backlog GPM balance in its entirety, as the average rates for later years cannot be predicted. In local currency, the Americas backlog GPM was US$213.0 million (June 2007: US$234.0 million) and the European backlog GPM was £121.3 million (June 2007: £119.8 million).

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$40.4 million.

Backlog GPM is the expected GPM to be realised in future financial years from contracts committed at the end of the year. Backlog GPM at 30 June 2008 was negatively impacted by foreign exchange movements of A$59.5 million. Notwithstanding the impact of foreign exchange movements, Backlog GPM has increased to A$788.3 million.

backlog gpM Realisation

backlog gpM Realisation
	Year	Year
	ending	ending	Post
	June 2009	June 2010	June 2010	total
	%	%	%	%
Asia Pacifc	51	30	19	100
Americas	63	28	9	100
Europe	59	30	11	100
Total	57	29	14	100

As at 30 June 2008, 57% of Bovis Lend Lease Backlog GPM is projected to be realised in the year to June 2009. The proportion of Bovis Lend Lease secured Backlog GPM to be realised beyond 12 months increased to 43% (June 2007: 41%).

corporate

The key financial results for Corporate are summarised below.

	Revenue	Revenue		EBITDA	EBITDA	Proft/(Loss) After Tax	Proft/(Loss) After Tax
	June 2008	June	2007	June 2008	June 2007	June 2008	June 2007
	a$m		a$m	a$m	a$m	a$m	a$m
Group Services	7.6		8.3	(86.2)	(80.6)	(59.0)	(60.0)
Group Treasury	53.3		77.7	1.0	5.9	(14.8)	5.1
GroupAmortisation						(3.0)	(3.0)
Total corporate	60.9	86.0		(85.2)	(74.7)	(76.8)	(57.9)

Group Services

Corporate costs after tax remain broadly flat. Corporate costs include costs relating to the newly established business unit Lend Lease Ventures, which is focused on investing in emerging technologies, and the Group’s investment in sustainability initiatives.

Group Treasury

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

The result for the year is detailed in the table below.
	Proft/(Loss) Before Tax		Proft/(Loss) After Tax
	June 2008	June 2007	June 2008	June 2007
	a$m	a$m	a$m	a$m
Interest revenue	53.3	77.6	37.9	54.6
Interest expense and borrowing costs	(78.2)	(78.1)	(53.4)	(52.9)
Net hedge beneft	1.0	4.9	0.7	3.4
Total GroupTreasury	(23.9)	4.4	(14.8)	5.1

interest Revenue and expenses

Interest revenue decreased by A$24.3 million before tax largely due to the recognition in the prior year of interest from the ATO of A$46.0 million. This interest was recognised following the Federal Court judgement in favour of Lend Lease in an outstanding tax dispute. Excluding this amount, interest revenue increased by A$21.7 million, reflecting both higher average cash balances and interest rates;
The interest rate on invested cash averaged 6.1% per annum for the year (June 2007: 5.3% per annum);
Interest expense and borrowing costs remained relatively flat compared to the previous year. There has been no significant movement in the Group’s borrowing position.

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;

group Liquidity

At 30 June 2008, the Group was in a strong liquidity position with un-drawn committed bank facilities of A$808.6 million. In addition, the Group had cash and cash equivalents of A$842.8 million;
The Group’s net debt as at 30 June 2008 was A$86.5 million, excluding other financial liabilities (principally the Bluewater lease) of A$200.9 million;
The average maturity of Lend Lease’s drawn debt at 30 June 2008 was 11 years, with the earliest maturity date being October 2012. The principal un-drawn committed facility is the £350.0 million syndicated bank facility, which matures in November 2010;
At 30 June 2008, the mix of borrowings, including the Bluewater lease, was 84% at fixed rates and 16% at floating rates.
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$111.5 million, primarily due to changes in UK and USA exchange rates.

2008 Annual Consolidated Financial Report Lend Lease Corporation 47

MD&a appendix 1 continued Results Detail

				Proft/(Loss)	Proft/(Loss)	Proft/(Loss)	Proft/(Loss)
Revenue		EBITDA		Before Tax1		After	Tax2
June 2008	June 2007	June 2008	June 2007	June 2008	June 2007	June 2008	June 2007
a$m	a$m	a$m	a$m	a$m	a$m	a$m	a$m
Retail Asia Pacifc 35.3	23.5	2.6	(1.1)	2.5	(1.3)	1.7	(0.9)
Europe 95.4	108.1	51.1	78.7	49.7	77.0	42.3	51.7
Americas		25.7	27.1	25.7	27.1	22.1	19.9
Total Retail 130.7	131.6	79.4	104.7	77.9	102.8	66.1	70.7
Communities Asia Pacifc 579.0	733.5	104.2	135.6	110.5	133.7	82.7	90.9
Europe 390.1	430.9	25.5	73.0	31.8	76.6	21.1	51.8
Americas 0.4	0.1	(5.7)	0.1	(5.9)	0.2	(3.5)	0.7
Total Communities 969.5	1,164.5	124.0	208.7	136.4	210.5	100.3	143.4
Public Private Partnerships Europe 106.5	111.2	(19.4)	6.9	(7.8)	14.0	0.8	14.3
Americas 856.2	643.9	79.4	51.7	81.8	51.5	72.2	43.0
Total Public Private Partnerships 962.7	755.1	60.0	58.6	74.0	65.5	73.0	57.3
Investment Management Asia Pacifc 67.5	77.9	82.4	38.6	82.3	43.7	71.8	29.7
Europe 56.2	8.6	64.2	154.6	64.2	154.6	61.9	153.4
Americas 3.6	1.5	4.6	10.4	4.6	10.4	3.6	6.0
Total Investment Management 127.3	88.0	151.2	203.6	151.1	208.7	137.3	189.1
Project Management and Construction Asia Pacifc 2,752.5	2,374.9	97.2	63.5	95.0	61.5	69.0	54.6
Europe 3,662.8	3,618.0	31.7	(103.0)	27.7	(106.9)	18.5	(77.2)
Americas 6,011.5	6,063.8	70.0	89.7	65.9	85.7	59.7	65.9
Total Project Management and Construction 12,426.8	12,056.7	198.9	50.2	188.6	40.3	147.2	43.3
Total operatingbusinesses 14,617.0	14,195.9	613.5	625.8	628.0	627.8	523.9	503.8
Corporate Group Services 7.6	8.3	(86.2)	(80.6)	(88.9)	(83.8)	(59.0)	(60.0)
Group Treasury 53.3	77.7	1.0	5.9	(23.9)	4.4	(14.8)	5.1
GroupAmortisation				(3.0)	(3.1)	(3.0)	(3.0)
Total corporate 60.9	86.0	(85.2)	(74.7)	(115.8)	(82.5)	(76.8)	(57.9)
Total operating 14,677.9	14,281.9	528.3	551.1	512.2	545.3	447.1	445.9
Inventory carrying value adjustment Propertyinvestment revaluations3		(121.5) (69.2)	82.7	(121.5) (69.2)	82.7	(121.5) (60.2)	51.6
Total statutory 14,677.9	14,281.9	337.6	633.8	321.5	628.0	265.4	497.5

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

2 Profit after tax is after adjusting for the loss attributable to minority interests of A$6.4 million (June 2007: A$2.7 million profit after tax).

3 Represents the unrealised valuation movement on property investments that are consolidated or accounted for using the equity method in the Consolidated Financial Statements.

appendix 2 Results Detail in Local Currency[1]

					Proft/(Loss)	Proft/(Loss)	Proft/(Loss)	Proft/(Loss)
	Revenue		EBITDA		Before Tax2		After Tax3
	June 2008	June 2007	June 2008	June 2007	June 2008	June 2007	June 2008	June 2007
	a$m	a$m	a$m	a$m	a$m	a$m	a$m	a$m
Asia Pacifc
Retail	35.3	23.5	2.6	(1.1)	2.5	(1.3)	1.7	(0.9)
Communities	579.0	733.5	104.2	135.6	110.5	133.7	82.7	90.9
Investment Management	67.5	77.9	82.4	38.6	82.3	43.7	71.8	29.7
Project Management
and Construction	2,752.5	2,374.9	97.2	63.5	95.0	61.5	69.0	54.6
Group Services and Amortisation	7.6	8.3	(86.2)	(80.6)	(91.9)	(86.9)	(62.0)	(63.0)
Group Treasury	38.5	65.4	5.0	5.9	43.1	70.2	31.0	49.9
Propertyinvestment revaluations			19.8	13.6	19.8	13.6	13.1	10.8
Total Asia Pacifc	3,480.4	3,283.5	225.0	175.5	261.3	234.5	207.3	172.0
					Proft/(Loss)		Proft/(Loss)
	Revenue		EBITDA		Before Tax2		After Tax3
	June 2008	June 2007	June 2008	June 2007	June 2008	June 2007	June 2008	June 2007
	£m	£m	£m	£m	£m	£m	£m	£m
Europe
Retail	42.9	43.9	23.0	31.9	22.4	31.2	19.0	21.0
Communities	175.5	174.9	11.5	29.6	14.3	31.1	9.5	21.0
Public Private Partnerships	47.9	45.2	(8.7)	2.8	(3.5)	5.7	0.4	5.8
Investment Management	25.3	3.5	28.9	62.8	28.9	62.8	27.9	62.3
Project Management
and Construction	1,648.3	1,468.9	14.3	(41.8)	12.5	(43.4)	8.3	(31.3)
Group Treasury	4.8	2.1	(1.9)		(23.4)	(20.6)	(16.4)	(14.4)
Inventory carrying value adjustment			(58.3)		(58.3)		(58.3)
Propertyinvestment revaluations			(36.9)	2.8	(36.9)	2.8	(31.2)	1.8
Total Great British Pounds	1,944.7	1,738.5	(28.1)	88.1	(44.0)	69.6	(40.8)	66.2
Total Australian Dollars4	4,321.6	4,282.0	(54.5)	217.0	(89.8)	171.3	(82.6)	162.9
					Proft/(Loss)		Proft/(Loss)
	Revenue		EBITDA		Before Tax2		After Tax3
	June 2008	June 2007	June 2008	June 2007	June 2008	June 2007	June 2008	June 2007
	us$m	us$m	us$m	us$m	us$m	us$m	us$m	us$m
Americas
Retail			23.1	21.4	23.1	21.4	19.9	15.7
Communities	0.4	0.1	(5.1)	0.1	(5.3)	0.2	(3.2)	0.6
Public Private Partnerships	770.6	508.0	71.5	40.8	73.6	40.6	65.0	33.9
Investment Management	3.2	1.2	4.1	8.2	4.1	8.2	3.2	4.7
Project Management
and Construction	5,410.4	4,784.3	63.0	70.8	59.3	67.6	53.7	52.0
Group Treasury	3.7	5.6			(13.6)	(11.8)	(8.4)	(7.3)
Propertyinvestment revaluations			(6.2)	49.2	(6.2)	49.2	(3.6)	28.7
Total US Dollars	6,188.3	5,299.2	150.4	190.5	135.0	175.4	126.6	128.3
Total Australian Dollars4	6,875.9	6,716.4	167.1	241.3	150.0	222.2	140.7	162.6

1 Local currency results exclude foreign exchange movements other than Great British Pounds and US Dollars.

2 Profit before tax is before adjusting for the amount attributable to minority interest.

3 Profit after tax is after adjusting for the loss attributable to minority interests of A$6.4 million (June 2007: A$2.7 million profit after tax).

4 The foreign exchange rates applied are A$1 = £0.450 (June 2007: A$1 = £0.406) and A$1 = US$0.900 (June 2007: A$1 = US$0.789).

2008 Annual Consolidated Financial Report Lend Lease Corporation 49

Portfolio report

All currency amounts in the Portfolio Report are expressed in Australian dollars unless otherwise specified.

The Portfolio Report is based on the Group’s Consolidated Financial Statements for the year ended 30 June 2008 and should be read in conjunction with those financial statements.

Investments 51	Investments 51
Investments reported in retail 51 Investments reported in Investment Management 52 retail 53	Investments reported in retail 51
	Investments reported in Investment Management 52
overview 53 assets under Management 53 Development Pipeline 54 Communities 55	overview 53
	assets under Management 53
	Development Pipeline 54
overview 55 Communities–asia Pacifc 55 senior living 57 Communities–europe 57 Communities–americas 58 Public Private Partnerships 59	overview 55
	Communities–asia Pacifc 55
	senior living 57
	Communities–europe 57
	Communities–americas 58
overview 59 Public Private Partnerships–americas 59 Public Private Partnerships–europe 59 Investment Management 62	overview 59
	Public Private Partnerships–americas 59
	Public Private Partnerships–europe 59
funds under Management 62 Project Management and Construction 64	funds under Management 62
	Major Projects 64
	realised gross Proft Margin analysis by sector 68

investments

Investments Reported in Retail

				lend lease	lend lease
				share of	share of	Market	Market
			lend lease	Income1	Income1	value2	value2	Indicative
			Interest	June 2008	June 2007	June 2008	June 2007	fund
		region	%	a$m	a$m	a$m	a$m	liquidation
	Asia Pacifc
	Pakenham Place	Australia	25.0	0.8	0.3	14.4	16.2	n/a
Craigieburn		Australia	25.0			18.2		n/a
Paradiz Centre		Asia	25.0	0.1	(0.1)	6.6	6.0	n/a
313@Somerset		Asia	25.03			43.6	40.4	n/a
Other/allocated overhead				(0.3)
Total Asia Pacifc				0.6	0.2	82.8	62.6
Europe4
Bluewater5 Performance Retail Limited Partnership		UK UK	30.0 33.3	58.5 3.1	67.1 5.3	1,188.8 80.1	1,560.0 104.8	n/a 2017
Warrington Retail Limited Partnership		UK	50.0	0.3	2.1	83.1	118.1	2017
Chelmsford Meadows Unit Trust6		UK	75.0	9.9	10.2	126.9	174.7	n/a
Preston Tithebarn Unit Trust		UK	50.0	1.3		33.1		2019
Other/allocated overhead				(3.7)	(5.0)
Total Europe				69.4	79.7	1,512.0	1,957.6
Americas7
King of Prussia Other/allocated overhead		USA	50.0	25.7	28.2 (1.1)	421.7	483.8	n/a
Total Americas				25.7	27.1	421.7	483.8
Total Retail				95.7	107.0	2,016.5	2,504.0

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

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

3 Lend Lease owns 25% of the 313@Somerset Retail development directly, with the remaining 75% held by Lend Lease Asian Retail Investment Fund (ARIF) in which Lend Lease holds a 10.1% interest (reported in Investment Management).

4 The market value of UK assets has been translated at A$1 = £0.480 (June 2007: A$1 = £0.415) and the Lend Lease share of income at A$1 = £0.450 (June 2007: A$1 = £0.406).

5 The independent market value at 30 June 2008 of 100% of Bluewater was £1,902.0 million (A$3,962.5 million). Bluewater is treated as inventory in the financial statements and is therefore reflected at cost, which at June 2008 was A$520.7 million.

6 The Chelmsford Meadows Unit 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$169.2 million.

7 The market value of USA assets has been translated at A$1 = US$0.950 (June 2007: A$1 = US$0.820) and the Lend Lease share of income at A$1 = US$0.900 (June 2007: A$1 = US$0.789).

2008 Annual Consolidated Financial Report Lend Lease Corporation 51

investments continued

Portfolio investments continued report Investments Reported in Investment Management continued

	continued
				lend lease	lend lease
				share of	share of	Market	Market
			lend lease	Income1	Income1	value2	value2	Indicative
			Interest	June 2008	June 2007	June 2008	June 2007	fund
		region	%	a$m	a$m	a$m	a$m	liquidation
	Asia Pacifc
	Australian Prime Property Funds	Australia	Various3	57.4	23.4	207.5	440.7	Open ended
Real Estate Partnership Funds Lend Lease Core Plus Fund Lend Lease Communities Fund 1 Asia Pacifc Investment Company Limited Asia Pacifc Investment Company No. 2 Limited Lend Lease Asian Retail Investment Fund Lend Lease International Distressed Debt Fund Other/allocated overhead		Australia Australia Australia Asia Asia Asia Asia	10.0 12.8 20.8 17.9 21.1 10.14 28.0	(0.4) 0.9 0.3 5.2 4.4 (1.1)	1.2 0.7 (0.5) 4.6 (5.0) (1.4)	5.6 38.2 23.8 107.1 14.2 0.8	6.2 24.3 23.5 17.7 87.3 13.0 2.4	2011 Open ended 2012 2009 2010 Open ended 2009
Total Asia Pacifc				66.7	23.0	397.2	615.1
Europe5
Lend Lease Retail Partnership6 Lend Lease Overgate Partnership7		UK UK	3.95 30.7	3.0 5.6	3.1 6.2	62.7 114.0	82.1 143.0	2011 2009
Lend Lease Global Properties, SICAF Cohen & Steers, SICAV		Europe Europe	24.8	9.5 4.4	137.9 0.5	15.5 13.5	26.5 47.6	2009 Open ended
	Other/allocated overhead				(1.0)
	Total Europe			22.5	146.7	205.7	299.2
	Americas8
	Other/allocated overhead	USA		3.5	1.8	0.9	2.7
	Total Americas			3.5	1.8	0.9	2.7
	Total Investment Management			92.7	171.5	603.8	917.0
	Total Investments			188.4	278.5	2,620.3	3,421.0

1 Represents Lend Lease’s share of income earned before tax from investments net of direct expenses and allocated overhead, excluding property investment revaluations. The June 2008 year includes gains on the disposal or redemption of available for sale financial assets of A$53.9 million (June 2007: nil) in Asia Pacific and A$13.1 million (June 2007: A$133.4 million) in Europe.

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

3 Lend Lease holds varying proportional interests in the Australian Prime Property Funds (APPF). On 11 July 2007, Lend Lease sold a part of its interest in APPF for a profit after tax of A$40.1 million.

4 Lend Lease owns 25% of the 313@Somerset retail development directly (reported in Retail), with the remaining 75% held by ARIF in which Lend Lease holds a 10.1% interest.

5 The market value of UK assets has been translated at A$1 = £0.480 (June 2007: A$1 = £0.415) and the Lend Lease share of income at A$1 = £0.450 (June 2007: A$1 = £0.406).

6 Fund 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.

8 The market value of USA assets has been translated at A$1 = US$0.950 (June 2007: A$1 = US$0.820) and the Lend Lease share of income at A$1 = US$0.900 (June 2007: A$1 = US$0.789).

Retail Overview

Australia	Australia	Singapore	Singapore		UK		Total
June	June	June	June	June	June	June	June
2008	2007	2008	2007	2008	2007	2008	2007
Asset Management
Number of centres 9 9 Assets under management (A$m) 4,390.3 4,057.5 GLA1under management(sqm/000s) 533.3 533.3		2 836.6 66.4	2 738.7 66.4	5 5,540.2 331.4	5 7,247.8 326.4	16 10,767.1 931.1	16 12,044.0 926.1
Development Pipeline Number of centres 7 6 Current total GLA (sqm/000s) 179.3 195.1 Gross estimated development cost (A$m) 1,925 1,360 Estimated additional GLA(sqm/000s) 201.0 114.3		2 16.7 775 28.5	1 730 28.1	3 14.5 2,060 236.9	4 51.0 3,225 201.8	12 210.5 4,760 466.4	11 246.1 5,315 344.2

1 GLA represents the gross lettable area of the centres.

Assets Under Management

Assets Under Management	Assets Under Management	Assets Under Management	Assets Under Management
shoppingCentres Managed on behalf of gla1 sqm/000s Market value2 June 2008 a$m Market value2 June 2007 a$m
Asia Pacifc Cairns Central, Qld APPF Retail/Other Joint Owners 52.8

Caneland Central, Qld APPF Retail 39.3
Sunshine Plaza, Qld APPF Retail/Other Joint Owners 73.3
Erina Fair, NSW APPF Retail/Other Joint Owners 106.8
Macarthur Square, NSW APPF Retail/Other Joint Owners 93.5
Greensborough Plaza, Vic APPF Retail 58.2			4,390.3 4,057.5
Caroline Springs Square, Vic APPF Retail/Lend Lease Core Plus Fund 8.5
Pakenham Place, Vic APPF Retail/Lend Lease Corporation 15.8
Indooroopilly, Qld Other Owners 85.1
Parkway Parade, Singapore3 Asia Pacifc Investment Company No. 2 Limited 49.7 717.1 629.2
Paradiz Centre, Singapore3 Lend Lease Corporation/ Other Joint Owners 16.7 119.5 109.5
Total Asia Pacifc 599.7 5,226.9 4,796.2

				Market	Market	Market	Market
				value2	value2	value2	value2
				June	June	June	June
			gla1	2008	2007	2008	2007
	shoppingCentres	Managed on behalf of	sqm/000s	£m	£m	a$m	a$m
	United Kingdom
	Bluewater, Kent	Lend Lease Retail Partnership/	148.6	1,902.0	2,158.0	3,962.5	5,200.0
		Lend Lease Corporation
Overgate, Dundee Touchwood, Solihull		Lend Lease Overgate Partnership Lend Lease Retail Partnership	39.0 60.4	178.0 280.0	187.5 315.5	370.8 583.3	451.8 760.2
Golden Square, Warrington		Warrington Retail Unit Trust	68.9	230.5	265.2	480.2	639.0
The Meadows,Chelmsford		Chelmsford Meadows Unit Trust	14.5	68.8	81.7	143.4	196.8
Total United Kingdom			331.4	2,659.3	3,007.9	5,540.2	7,247.8
Total assets under management			931.1	–	–	10,767.1	12,044.0

1 GLA represents the gross lettable area of the centres.

2 Market value represents Lend Lease’s assessment of the value of the underlying assets.

3 Market value for Singapore assets in local currency is S$1,079.2 million (June 2007: S$930.8 million).

2008 Annual Consolidated Financial Report Lend Lease Corporation 53

Portfolio Retail continued report Development Pipeline continued

	continued
									estimated
							estimated		gross
			ownership		estimated	Current	additional		Develop-
			Interest	Project	Completion	gla1	gla1,2		ment Cost2
	shoppingCentres	Managed on behalf of	%	status	Date	sqm/000s	sqm/000s		a$m
	Asia Pacifc
	Australia	Lend Lease Corporation/	Various3	Various	2010–2013	179.3	201.0		1,925
		Lend Lease Managed
		Funds/Other Joint Owners
313@Somerset		Lend Lease Managed Funds/Lend Lease Corporation	Various4 Under construction		2010		28.1		760
Paradiz Centre		Lend Lease Corporation/	25.0	Under	2009	16.7	0.4		15
		Other Joint Owners	construction
Total Asia Pacifc						196.0	229.5		2,700
								estimated	estimated
							estimated	gross	gross
			ownership		estimated	Current	additional	Develop-	Develop-
			Interest	Project	Completion	gla1	gla1,2	ment Cost2	ment Cost2
	shoppingCentres	Managed on behalf of	%	status	Date	sqm/000s	sqm/000s	£m	a$m
	United Kingdom
	Bluewater Events	Lend Lease	31.0	Approved	2010		10.3	60	125
	Venue, Kent	Retail Partnership
	The Meadows, Chelmsford	Chelmsford Meadows Unit Trust	75.0	Planning	2015	14.5	87.3	440	915
	Tithebarn, Preston5	Preston Tithebarn	50.0	Planning	2014		139.3	490	1,020
		Unit Trust
Total United Kingdom6,7,8						14.5	236.9	990	2,060
Total development		pipeline				210.5	466.4	–	4,760

1 GLA represents the gross lettable area of the centres.

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

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

4 Lend Lease owns 25% of the 313@Somerset retail development directly, with the remaining 75% held by ARIF in which the Lend Lease Group has a 10.1% interest.

5 During the year Lend Lease acquired a 50% interest in the Tithebarn, Preston scheme from Grosvenor Estates. The roles and responsibilities for the delivery of the project are being shared equally with Grosvenor Estates.

6 During the year the Development Management Service Agreement with Minerva Plc was terminated on Park Place, Croydon. As preferred developer status is no longer held, Park Place has been removed from the development pipeline.

7 At June 2007, the development pipeline included the development of Arndale, Eastbourne. This project has been removed from the development pipeline following a decision by Eastbourne City Council to re-tender the Development Agreement in order to comply with EU procurement processes. Whilst the re-tendering process is carried out Lend Lease no longer holds preferred developer status.

8 At 31 December 2007, the development pipeline included the development of Bridgefield, Stockport. On 30 April 2008, the Cooperation Agreement with Stockport Metropolitan Borough Council expired. As preferred developer status is no longer held, this project has been removed from the development pipeline.

communities

Overview

		Australia		UK		USA		Total
	June	June	June	June	June	June	June	June
	2008	2007	2008	2007	2008	2007	2008	2007
Number of projects1	47	46	27	21	2	3	76	70
backlog2
− Zoned (with planning approvals)	27,090	31,055	13,520	13,605	3,760	2,951	44,370	47,611
− Unzoned (awaiting planning approvals)	58,240	53,890	950	1,115	13,365	12,930	72,555	67,935
Residential(units)	85,330	84,945	14,470	14,720	17,125	15,881	116,925	115,546
Commercial (sqm/000s)3 Estimated sales value of total backlog (A$b)	3,228.8 18.7	2,751.1 17.7	422.6 13.0	435.0 13.0	1,382.7 2.2	1,317.1 2.3	5,034.1 33.9	4,503.2 33.0

1 The number of projects in the UK includes Stratford and Elephant and Castle. As these projects are under negotiation they are not included in the backlog metrics above.

2 Backlog includes both Company-owned and joint venture projects.

3 Represents net developable area of the project site. Commercial backlog includes approximately 1,065,800 sqm of retail backlog (430,500 sqm in Asia Pacific, 59,800 sqm in the UK and 575,500 sqm in the USA).

Communities – Asia Pacific – Project Listing

								estimated
				estimated		backlog	backlog	Commercial
				Completion	total	land	built-form	backlog
	Project	location	ownershipInterest	Date1	units2	units3	units3	sqm/000s
	Zoned Projects
Woodlands4 Forest Gardens Varsity Lakes		Qld Land management 2011 Qld 50% JV/ Land management 2009 Qld Land management 2010			1,400 1,570 1,800	860 170 15	80 15 215	24.1
Springfeld Lakes		Qld	Land management	2020	10,000	7,665	420	8.1
Hyatt Coolum		Qld	100%	2013	500	205	260
Twin Waters Residential		Qld	100%	2009	1,765		10
Twin Waters Resort		Qld	51% JV	2009	65		60
Bingara Gorge St Marys – Other Precincts		NSW NSW	Land management 100%	2019 2018	1,165 3,645	1,140 3,645		102.9 574.9
St Marys – Ropes Crossing4		NSW	Land management	2013	1,590	1,365	170	1.4
Nelsons Ridge		NSW	Land management	2011	920	335	360	2.6
Jacksons Landing		NSW	50% JV	2011	1,370		420	15.7
Rouse Hill		NSW	50% JV/	2018	1,930	455	1,120	100.5
Newington		NSW	Land management 50% JV/	2009	2,000		20
St Patricks		NSW	Land management 50% JV/	2010	140		75
Darling Walk		NSW	Land management Development	2011				64.0
Forde		ACT	management 25% JV/	2010	1,030	650	160	2.3
Edgewater		Vic	Land management 100%	2011	1,145	25	300
Craigieburn		Vic	Land management	2009	3,100	140
Sub-total zoned					35,135	16,670	3,685	896.5

1 Estimated completion date represents the estimated financial year of the last unit settled for master planned communities and the construction completion date for apartments.

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

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 Projects managed on behalf of the Lend Lease Communities Fund 1.

2008 Annual Consolidated Financial Report Lend Lease Corporation 55

communities continued

Portfolio communities continued report Communities – Asia Pacific – Project Listing continued continued

	continued
								estimated
				estimated		backlog	backlog	Commercial
				Completion	total	land	built-form	backlog
	Project	location	ownershipInterest	Date1	units2	units3	units3	sqm/000s
	Zoned Projects continued
	Craigieburn Town Centre	Vic	100%	2011	380	380
Lakeside at Pakenham4 Caroline Springs		Vic Vic	Land management 50% JV/	2010 2012	2,350 7,480	300 1,345	10 190	8.0 21.8
Laurimar		Vic	Land management 100%	2014	1,870	1,520		2.6
Victoria Harbour
− Dock 5		Vic	100%	2009	140			2.0
− Mosaic		Vic	100%	2009	70		5	0.3
− The Merchant		Vic	100%	2010	75		75	0.6
− Montage		Vic	100%	2009	85		85
− ANZ − Merchant Street Retail − 833 Bourke Street − Myer − Uncommitted Other Mawson Lakes		Vic Development management Vic 100% Vic Development management Vic Development management Vic Other SA 50% JV/Land management		2010 2009 2009 2010 Various 2011	1,890 4,890	360	1,890 105	84.7 4.0 3.1 29.1 131.2
	Total zoned				54,365	20,575	6,045	1,183.9
unzoned Projects5 Yarrabilba Rocky Springs Calderwood Pakenham Valley		Qld Staged acquisition Qld Land management NSW Land management Vic Land management			23,400 13,000 4,000 490	20,330 12,450 4,000 460	3,070 550 30	877.0 548.0 5.0 19.9
Lockerbie		Vic	Staged acquisition		13,000	7,860	5,140	490.0
Blakeview		SA	Staged acquisition		1,600	1,500	100	52.0
Gawler		SA	100%		2,750	2,750		53.0
Total unzoned					58,240	49,350	8,890	2,044.9
	Total				112,605	69,925	14,935	3,228.8

1 Estimated completion date represents the estimated financial year of the last unit settled for master planned communities and the construction completion date for apartments.

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

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 Projects managed on behalf of the Lend Lease Communities Fund 1.

5 Estimated completion date is not applicable for unzoned projects.

Senior Living – Project Listing

					average tenure of
			Dwellings under	Dwellings to be	Current Deferred
			Management	Developed backlog	Management fees
	Project	location	units	units1	Years
	senior living
	Keperra Sanctuary2	Qld	319		6.4
The Terraces		Qld	63	20	2.7
Glenaeon		NSW	271		7.1
Lutanda Manor		NSW	133		7.3
Pittwater		NSW	85		6.4
Nelsons Grove		NSW	25	145	0.6
Rochford Place (Ropes Crossing)		NSW		140
Peppertree Hill		Vic	210		10.1
Abervale2		Vic	237		8.3
Burwood Terrace		Vic	106		5.3
Fiddlers Green2		Vic	229		7.1
Forest Hills		Vic	159		5.7
Highvale		Vic	190		7.3
Caesia Gardens (Caroline Springs)		Vic	26	110
TrinityGreen		SA	39	55	1.2
Total Senior Living			2,092	470	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.

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

Communities – Europe – Project Listing

								estimated
						backlog	backlog	Commercial
			ownership	estimated	total	land	built-form	backlog
	Project	location	Interest	Completion Date1	units2	units3	units3	sqm/000s
	Zoned Projects
B5 Southside Navigation Street Essex Street John Bright St		Birmingham Birmingham Birmingham Birmingham	100% 100% 100% 100%	Completed Completed 2009 2009	470 350 275 190		5 15 225 175	0.6 0.8
Honduras Wharf		Birmingham	100%	Completed	125		105
Honduras Wharf Phase II		Birmingham	100%	2011	100		100
Alcester Road		Birmingham	100%	2011	50		50	0.2
Bromsgrove Street		Birmingham	100%	2013	45		45	0.2
Unities and Armouries		Birmingham	100%	2013	145		140	0.3
St. James		Cheltenham	100%	Completed	140		10
Monkbridge		Leeds	100%	2016	725		725
Clarence Dock		Leeds	100%	Completed	1,150		15	9.5
Green Quarter		Manchester	100%	2014	1,380		605	0.8
Potato Wharf Phase I		Manchester	100%	2011	215		215
Regiment		Manchester	100%	2013	45		45	0.7
Woodfeld Road		Altrincham	100%	2010	45		45
Hungate		York	33%	2014	730		720	8.0
Sheraton Park		Durham	100%	2011	115		115
Appleton Village		Cheshire	100%	2010	40		40
Sub-total zoned					6,335	–	3,395	21.1

1 Estimated completion date for apartments represents the financial year in which the project construction is completed.

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

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.

2008 Annual Consolidated Financial Report Lend Lease Corporation 57

communities continued

Portfolio communities continued report Communities – Europe – Project Listing continued continued

continued
							estimated
			estimated		backlog	backlog	Commercial
			Completion	total	land	built-form	backlog
Project	location	ownershipInterest	Date1	units2	units3	units3	sqm/000s
Zoned Projects continued
Sandy Lane	Cheshire	100%	2010	35		35
Alexandra Road South Goose Hill Greenwich Peninsula Other Crosby projects	Manchester Morpeth London Various	100% 100% 51% 50 –100%	2010 25 2011 60 2025 10,000 Completed 135		6,000	25 60 4,000 5	0.6 387.8 0.5
Total zoned				16,590	6,000	7,520	410.0
unzoned Projects Gloucester Road Potato Wharf Phases II and III	Bath Manchester	100% 100%	2011 75 2014 875			75 875	12.6
Total unzoned				950	–	950	12.6
Total Communities – Europe4				17,540	6,000	8,470	422.6

1 Estimated completion date for apartments represents the financial year in which the project construction is completed.

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

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 The number of projects in the UK includes Stratford and Elephant and Castle. As these projects are under negotiation they are not included in the backlog metrics above.

Communities – Americas – Project Listing

								estimated
				estimated		backlog	backlog	Commercial
				Completion	total	land	built-form	backlog
	Project	location	ownershipInterest	Date1	units2	units3	units3	sqm/000s
	Horizon Uptown	Denver	100%	2019	3,760	3,760		778.8
	(formerly Horizon City Center)
	Lowry Range4	Denver	Land management	2028	13,365	13,365		603.9
Total Communities – Americas					17,125	17,125	–	1,382.7

1 Estimated completion date for master planned communities represents the estimated financial year of the last unit settled.

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

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 Backlog land units are unzoned.

public private partnerships

Overview

public private partnerships – americas

	Number of	Number of		Estimated Capital Spend2	Estimated Capital Spend2	Committed Equity3	Committed Equity3	Committed Equity3	Units	Under
	Projects1			US$b		US$m			Management
	June 2008	June	2007	June 2008	June 2007	June 2008	June	2007	June 2008	June 2007
Operational (secured)	17		11	5.1	3.8	109.8		57.8	38,450	31,500
Preferred bidder(awarded)	2		5	0.8	1.5				6,300	10,900
Total	19		16	5.9	5.3	109.8		57.8	44,750	42,400

1 Number of projects includes extensions of existing projects and projects where Lend Lease is preferred bidder. 2 Over the initial development period of the project.

3 Includes both invested and committed equity.

public private partnerships – europe
									Facilities Management
	Number of			Invested Equity			Committed Equity2		Revenue	Backlog3
	Projects1				£m			£m	£m
June	2008	June	2007	June 2008	June	2007	June 2008	June 2007	June 2008	June 2007
Operational (secured)	18		18	71.0		51.3	21.6	42.9	337	350
Preferred bidder(awarded)4	1		1				7.1		29
Total	19		19	71.0		51.3	28.7	42.9	366	350

1 Number of projects combines extensions of existing projects.

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

3 Facilities management revenue backlog disclosed is only for 10 years, although Public Finance Initiatives (PFI) contracts typically operate for a period of up to 40 years.

4 The Lancashire schools project includes a number of phases. At 30 June 2008, Phase 1 and 2 were secured, however Phase 2A and 3 were at preferred bidder status.

2008 Annual Consolidated Financial Report Lend Lease Corporation 59

public private partnerships continued

Portfolio public private partnerships continued report Public Private Partnerships – Americas – Military Housing – Project Listing continued

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Project location service status
Fort Hood Texas Army Operational
Tri-Command South Carolina Marine Corps Operational
Fort Campbell Kentucky Army Operational
Hickam Hawaii Air Force Operational
Army RCI Hawaii Army Operational
Fort Drum New York Army Operational
Camp Lejeune North Carolina/New York Marine Corps Operational
Camp Lejeune Phase 2 North Carolina/New York Marine Corps Operational
Fort Knox Kentucky Army Operational
Fort Campbell Additional Scoring Kentucky Army Operational
Fort Hood Stage 2 Texas Army Operational
Air Combat Command Group II Arizona/New Mexico Air Force Operational
Fort Drum Unaccompanied Officer Quarters New York Army Operational
Hickam Phase 2 Hawaii Air Force Operational
Tri-Group Colorado/California Air Force Operational
Camp Lejeune Phase 3 North Carolina/New York Marine Corps Operational
Fort Drum Additional Scoring New York Army Operational
PAL Group A Various Army Preferred bidder
Wainwright/Greely Alaska Army Preferred bidder
Total PPP – Americas
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1 Over the initial development period of the project.

2 Committed equity represents future equity investments in the projects.

Public Private Partnerships – Europe – Project Listing

			actual/expected
	location	status	financial Close Date
healthcare
Calderdale Hospital Worcester Hospital Hexham Hospital – Phases 1 and 2 Burnley Hospital Roehampton Hospital Romford Hospital Leeds Hospital Hexham Hospital – Phase 3 Manchester Hospital Majadahonda Hospital	UK UK UK UK UK UK UK UK UK Spain	Operational Operational Operational Operational Operational Operational Operational Operational Under construction Operational	Jul-98 Mar-99 Apr-01 Oct-03 May-04 Jan-04 Oct-04 Jul-06 Dec-04 Apr-05
Brescia Hospital	Italy	Operational	Mar-02
Sub-total

1 The figures represent total construction value over the contract duration.
2 Facilities management revenue backlog disclosed is only for 10 years, although PFI contracts typically operate for a period of up to 40 years.
3 Committed equity refers to equity and loan stock contributions that Lend Lease has a future commitment to invest.

Initial			estimated	Percentage of
Development	actual/expected	Project	Capital	Construction	Invested	Committed	units
Period	financial	term	spend1	Completed	equity	equity2	under
Years	Close Date	Years	us$m	%	us$m	us$m	Management
6	Oct-01	50	225	100	6.0		5,700
5 6 6 10 5 5 5 8 4 5 6 2 6 4 4 4 4 6	Feb-03 Dec-03 Feb-05 Apr-05 May-05 Oct-05 Nov-06 Feb-07 May-07 May-07 Jul-07 Jul-07 Aug-07 Sep-07 Nov-07 Apr-08 Dec-08 Mar-09	50 50 50 50 50 50 50 50 50 50 50 50 50 50 50 50 50 50	140 200 240 1,955 220 355 125 215 100 85 230 20 415 250 240 155 400 370	100 90 63 45 84 49 8 13 8 11 13 27 3 4 3 1	3.3 16.5 8.0 7.5 2.5 4.5	6.0 5.0 3.0 11.0 25.5 11.0	1,700 4,300 1,400 7,900 3,100 3,300 1,000 2,500 200 200 1,800 200 1,100 1,500 2,000 550 4,500 1,800
			5,940		48.3	61.5	44,750

				facilities
		estimated	Percentage of	Management
Construction	operational	Construction	Construction	revenue	Invested	Committed
Period	term	value1	Completed	backlog2	equity	equity3
Years	Years	£m	%	£m	£m	£m
3 3 2 3 2 3 3 2 5 3	33 33 32 30 30 36 33 27 38 30	87 82 29 27 57 213 175 24 390 137	100 100 100 100 100 100 100 100 70 100	39 53 12 12 14 5 30 3 29 2	6.7 1.1 0.6 1.0 1.7 7.0 9.8 1.3 10.6 3.0
2	19	15	100		1.5
		1,236		199	44.3	–

2008 Annual Consolidated Financial Report Lend Lease Corporation 61

Portfolio report continued

Public Private Partnerships – Europe – Project Listing continued

public private partnerships continued

			actual/expected
	location	status	financial Close Date
education
Newcastle Schools	UK	Operational	Mar-02
Lincoln Schools Lilian Baylis School Lancashire Schools Phase 1 Lancashire Schools Phase 2 Lancashire Schools Phase 2A Lancashire Schools Phase 3 Cork Maritime College accommodation Treasury 1 Treasury 2	UK UK UK UK UK UK Ireland UK UK	Operational Operational Under construction Under construction Preferred bidder Preferred bidder Operational Operational Operational	Sep-01 Feb-03 Dec-06 Dec-07 Jun-08 Jul-08 Feb-03 May-00 Jan-03
Sheffeld University	UK	Under construction	May-06
waste
Lancashire Waste	UK	Under construction	Mar-07

Total PPP – Europe

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

2 Facilities management revenue backlog disclosed is only for 10 years, although PFI contracts typically operate for a period of up to 40 years.

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

investment Management

Funds Under Management (FUM)

investment Management Funds Under Management (FUM)
		fuM1	fuM1	fuM1	fuM1
		June 2008	June 2007	June 2008	June 2007
fund	fund type	£b	£b	a$b	a$b
asia Pacifc
Australian Prime Property Funds	Core			5.0	4.3
Lend Lease Core Plus Fund Lend Lease Communities Fund 1 Real Estate Partnership Funds Asia Pacifc Investment Company Limited Asia Pacifc Investment Company No. 2 Limited Lend Lease Asian Retail Investment Fund Managed Investment Mandate	Core Plus Value Add Enhanced Core Plus Core Plus Value Add Core			0.4 0.2 0.1 0.8 0.4 0.2	0.3 0.2 0.1 0.1 0.7 0.4
Total Asia Pacifc FUM				7.1	6.1
europe Lend Lease Retail Partnership Lend Lease Overgate Partnership	Core Core	0.8 0.2	0.9 0.2	1.6 0.4	2.1 0.5
Chelmsford Meadows Limited Partnership	Value Add	0.1	0.1	0.2	0.2
Total Europe FUM		1.1	1.2	2.2	2.8
Total FUM(excluding joint ventures)		–	–	9.3	8.9
Joint ventures2
Resolution Capital(Asia Pacifc)					1.6
Total FUM(including joint ventures)		–	–	9.3	10.5

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.

				facilities
		estimated	Percentage of	Management
Construction	operational	Construction	Construction	revenue	Invested	Committed
Period	term	value1	Completed	backlog2	equity	equity3
Years	Years	£m	%	£m	£m	£m
2	27	50	100	16	1.9
2 2 2 2 2 2 2 2 2 4	31 27 25 25 25 25 27 37 35 40	20 13 81 34 57 55 30 114 148 169	100 100 85 30 100 100 100 74	10 6 22 7 10 38 34 24	1.2 0.8 2.2 1.7 1.9	3.1 1.6 2.4 8.3
4	25	250	34		17.0	13.3
		2,257		366	71.0	28.7

2008 Annual Consolidated Financial Report Lend Lease Corporation 63

Portfolio project Management and construction report Major Projects[1] continued

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Project Name location Client Contract type [2]
asia Pacific
Royal Children’s Hospital Vic Children’s Hospital Partnership GMP
ANZ Melbourne Vic Lend Lease Corporation/ANZ GMP
Top Ryde NSW Beville Group GMP
Charlestown Square Redevelopment NSW The GPT Group GMP
Lonza Biologics Expansion Singapore Lonza Biologics Singapore EPCM
Singapore Capacity Expansion Project Singapore Abbott Nutrition International GMP
Liverpool Hospital NSW NSW Government MC
Brisbane Airport Qld Brisbane Airports Corporation Ltd GMP
Sydney Water Desalination Pipeline NSW Sydney Water GMP
Mulwala Ammunition Factory NSW Australian Department of Defence GMP
420 George Street NSW Fortius Funds Management Pty Limited GMP
Australian Taxation Office Building ACT Queensland Investment Corporation GMP
Robina Retail Town Centre Qld QIC GMP
Sydney International Airport NSW Sydney Airport Corporation Ltd MC
313@Somerset Singapore ARIF/Lend Lease Corporation GMP
ECP-1 Project Singapore Genentech, Inc. EPCM
CBA Homebush NSW Commonwealth Bank GMP
Myer Victoria Harbour Vic Lend Lease Corporation/Myer GMP
----- End of picture text -----

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

2 Contract types are guaranteed maximum price (GMP); engineering, procurement and construction management (EPCM); and managing contractor (MC).

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Project Name location Client Contract type [2]
americas
Mets Stadium New York Sterling Equities GMP
Riverside South – The Rushmore New York Extell Development Company GMP
150 Amsterdam Avenue New York 150 Amsterdam Avenue Holdings LLC GMP
353 N. Clark Chicago South Parcel Dev. LLC GMP
Trump Taj Mahal Princeton Trump/New World PM, LLC GMP
Rockingham Memorial Hospital Virginia Rockingham Memorial Hospital GMP
One Museum Park West Chicago Enterprise Companies GMP
Ritz Carlton Residence Washington Midtown Baltimore GMP
St. Regis Hotel & Condos Atlanta SR Hotel Development GMP
New York Presbyterian Heart Centre New York New York Presbyterian Hospital GMP
St. Joseph’s Hospital Florida St. Joseph’s – Baptist Healthcare GMP
Signature Place Florida Gulf Atlantic Real Estate Co CM
Solaire Wilshire Los Angeles KOAR Wilshire Western LLC GMP
Gateway Grand Condos Washington, D.C. Trammel Crow Company GMP
Lenbrook at Buckhead Atlanta Spectrum Properties GMP
Southside Regional Hospital Virginia Community Health Systems GMP
Viera Health Park Florida HealthFirst Inc. GMP
Catalyst Charlotte Novare Group GMP
North Bethesda Centre Washington, D.C. LCOR, Inc. GMP
Monroe Annex High School New York New York City School Construction Authority GMP
Greenberg 14 New York New York Presbyterian Hospital GMP
545 Madison Avenue New York LCOR, Inc. GMP
440 South Church Street Office Building Charlotte Novare Group GMP
Market Common South Carolina McCaffery Interests, Inc. CM
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1 Disclosure of major projects is subject to client approval. This impacts the number of projects available for disclosure in each region.

2 Contract types are guaranteed maximum price (GMP); and construction management (CM).

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Construction
value Completion
a$m Date sector Description
1,064 2014 Health Redevelopment of hospital
546 2010 Commercial Head office, Victoria Harbour
474 2010 Retail Redevelopment of shopping centre
344 2011 Retail Redevelopment of shopping centre
334 2008 Pharmaceutical Biologics facility
297 2008 Pharmaceutical Nutrition facility
296 2011 Health Phase 1 of hospital redevelopment
295 2009 Transportation International terminal and passenger concourse extension
289 2009 Water Pipeline installation
274 2012 Defence Redevelopment of propellant manufacturing facility
262 2010 Commercial/ Retail Redevelopment of retail space and new high rise office in Sydney
247 2008 Commercial Head office including fit-out
187 2009 Retail Northern malls redevelopment
172 2010 Transportation Airport expansion
158 2009 Retail Retail development on Orchard Road
151 2008 Pharmaceutical Biologics facility
133 2009 Commercial Office building development
118 2010 Commercial Head office, Victoria Harbour
----- End of picture text -----

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----- Start of picture text -----

Construction
value Completion
us$m Date sector Description
299 2010 Other New baseball arena for the New York Mets
273 2011 Residential 41 storey high rise residential
211 2010 Residential 42 storey building with a community facility
206 2010 Commercial 45 storey LEED certified office building
205 2009 Hotel New 800 room hotel
190 2010 Healthcare Replacement hospital with 238 beds; LEED certified
165 2010 Residential 53 storey LEED certified luxury high rise residential
157 2008 Mixed-use High rise residential and hotel
157 2009 Mixed-use Luxury high rise residential and hotel
147 2010 Healthcare LEED certified hospital with teaching conference centre
117 2010 Healthcare New full-service LEED certified hospital with 108 beds
112 2009 Mixed-use Mixed-use property with residential, retail and office space
112 2009 Residential 16 storey condominiums with two levels of retail and parking
109 2009 Residential 17 storey condominiums with five levels of parking
104 2009 Residential High rise senior living facility
99 2008 Healthcare New hospital
98 2012 Healthcare New upscale healthcare facility
80 2009 Residential 27 storey residential tower with eight levels of parking
72 2008 Residential High rise residential
62 2009 Education New four storey school
58 2010 Healthcare Additional storey to existing building
51 2008 Commercial Restoration and remodelling of 17 storey building
40 2010 Commercial 15 storey LEED certified office building
29 2008 Mixed-use Mixed-use property with residential and retail space
----- End of picture text -----

2008 Annual Consolidated Financial Report Lend Lease Corporation 65

Portfolio project Management and construction continued report Major Projects[1] continued continued

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----- Start of picture text -----

Project Name location Client Contract type [2,3]
europe
Al-Durrat – KFH Bahrain Kuwait Finance House CM
Plan Barcelona Airport Spain AENA PM
Dubai Metro Dubai The Roads and Transport Authority PM
BP Global Alliance Europe BP plc PM
MOD SLAM – Phase 1 UK Defence Estates GMP
Los Berrocales Construcción Spain Los Berrocales Junta de Compensación PM
Nevskaya Ratusha Russia JSC ‘M’ PM
Trump Tower Dubai Nakheel PM
Manchester Hospital Manchester Catalyst Healthcare LS/FP
MOD SLAM – Phase 2 UK Defence Estates GMP
122 Leadenhall St London British Land CM
Moscow City Transportation Terminal Russia Citer Invest BV PM
Telefonica Business Park Spain Telefonica S.A. PM
Regional Prime Contract South West England Defence Estates GMP
One New Change London Land Securities CM
BBC Broadcasting House Phase 2 London Land Securities LS/FP
Bishopsgate 201 London British Land CM
Regents Place Main Building London British Land CM
Leeds Oncology Hospital Leeds Catalyst Healthcare LS/FP
University of Sheffield PFI Sheffield Catalyst Higher Education LS/FP
Student Accommodation
Central Saint Giles London Stanhope CM
Kings Waterfront Civic Facilities Liverpool British Land/Liverpool City Council LS/FP
Silverburn (Pollok) Shopping Centre Glasgow Retail Property Holdings Limited LS/FP
Peel Gloucester Quays Gloucester Peel MC
Manchester Civil Justice Centre Manchester Allied London LS/FP
Bankside Buildings 2 & 3 Southwark Land Securities LS/FP
Greenwich N0204 London GPRL/Lend Lease JV LS/FP
Grand Arcade Cambridge Cambridge Grosvenor Estates LS/FP
Spinningfields – 3 Hardman Street Manchester 3 Hardman Street Developments Ltd LS/FP
Malta Retail and Leisure Centre Poland Neinver Polska Sp. z o.o. PM
125 Old Broad Street London Hammerson LS/FP
Project Horizon Norwich Land Securities LS/DC
60 Threadneedle Street (Stock Exchange) London Hammerson LS/DC
----- End of picture text -----

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

2 Contract types are: lump sum/fixed price (LS/FP); construction management (CM); managing contractor (MC); project management (PM); guaranteed maximum price (GMP); and lump sum/design and construct (LS/DC).

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

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Construction
value Completion
£m Date sector Description
2,080 2009 Mixed-use New mixed-use residential, commercial and resort development
2,041 2009 Transport Enlargement of Barcelona International Airport
1,000 2010 Transport New metro system for Dubai
740 2010 Retail Multi-site construction and facilities management
776 2008 Defence New and upgraded single living accommodation
447 2013 Residential/ Industrial Urbanisation project in Madrid
416 2012 Commercial Office development in St. Petersburg
400 2011 Mixed-use Residential and leisure facilities
397 2010 Healthcare New hospital and refurbishment of existing hospital site
383 2013 Defence New and upgraded single living accommodation
305 2011 Commercial Demolition of existing building and new office building
283 2010 Transport Transportation terminal complex including offices and a hotel
266 2009 Commercial New business park
266 2011 Defence Estate management services and project management of
capital construction programme
261 2010 Commercial New retail and commercial construction
257 2011 Communications Demolition and reconstruction of BBC headquarters
226 2009 Commercial New office development
184 2010 Commercial New office and residential
184 2008 Healthcare New build hospital
169 2010 Education Refurbishment and new student accommodation
163 2010 Commercial Demolition of existing building and new office construction
146 2008 Leisure New civic arena, auditorium and exhibition hall
120 2008 Retail New retail centre
117 2009 Retail New construction of retail, hotel, residential and leisure facilities
113 2008 Government Construction of Civil Justice Centre
104 2008 Commercial New office building
100 2010 Commercial Construction of two commercial office buildings with retail facilities
99 2008 Retail New retail centre
94 2009 Commercial New office building with retail facilities
85 2010 Retail New retail and leisure building
82 2009 Commercial Redevelopment of new office building
74 2008 Commercial Refurbishment and new construction
62 2009 Commercial New office development
----- End of picture text -----

2008 Annual Consolidated Financial Report Lend Lease Corporation 67

Portfolio project Management and construction continued report Realised Gross Profit Margin Analysis by Sector[1] continued

	continued
		June 2008	June 2008	June 2008	June 2008	June 2007
		asia Pacifc	americas	europe	total	total
		gPM	gPM	gPM	gPM	gPM
		%	%	%	%	%
	Commercial/Offce	33	9	28	24	21
Communications Education		7 9	10	2 5	3 8	5 9
Government/Civic		4	4	15	8	6
Healthcare		1	11	3	5	6
Industrial/Technology		12	3	9	8	10
Mixed-use			5	3	2	3
Pharmaceutical/R&D		7	3	3	4	3
Residential/Senior Living		4	39	6	16	14
Retail		17	5	17	13	16
Transportation		6	3	3	4	3
Other			8	6	5	4
Total		100	100	100	100	100

1 Bovis Lend Lease’s strategy is to reduce the volatility of its earnings by operating in a diverse range of industries and geographies. The table details the GPM earned by sector for the year ended 30 June 2008.

Directors’ Report 30 June 2008

1	Governance 70
2	a. Board/Directors 70
	b. Company Secretaries’ Qualifcations and Experience 72
	c. Offcers Who Were Previously Partners of the Audit Firm 72
	d. Directors’Meetings 72
	e. Interest in Capital 73
	Operations 73
3	a. Principal Activities 73
	b. Review and Results of Operations 73
	c. Dividends 73
	d. Signifcant Changes in State of Affairs 73
	e. Event Subsequent to Balance Date 73
	f. Likely Developments 73
	g. Environmental Regulation 73
	Remuneration Report 74
4	a. Details of Key Management Personnel and Other Executives – Audited 75
	b. Remuneration Policy–Audited 75
	c. Remuneration Details–Audited 80
	d. Long Term Incentives and Retentions–Audited 83
	e. Service Agreements–Audited 86
	f. Additional Information–Audited 89
	Other 89
a. Share Options 89 b. Indemnifcation and Insurance of Directors and Offcers 89 c. Non Audit Services 89 d. Rounding Off 90 Lead Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001 91	a. Share Options 89
	b. Indemnifcation and Insurance of Directors and Offcers 89
	c. Non Audit Services 89
	d. Rounding Off 90

2008 Annual Consolidated Financial Report Lend Lease Corporation 69

Directors’ Report

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David Crawford, Chairman

Greg Clarke, Managing Director

The Directors present their Report together with the Annual Consolidated Financial Report of the consolidated entity, being the Company and its subsidiaries (‘Lend Lease’ or ‘the Group’) for the financial year ended 30 June 2008 and the Auditor’s 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 64

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

Other Directorships and Positions

G A Clarke, Managing Director

(Executive)

Age 50

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 (Honours) Business Studies and a Master of Business Administration.

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Phillip Colebatch

Gordon Edington CBE

P M Colebatch (Non Executive)

Age 63

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

Other Directorships and Positions

Mr Colebatch is a Non Executive Director of Insurance Australia Group Limited (appointed January 2007) and a Non Executive Director of Man Group plc (appointed 1 September 2007).

G G Edington CBE

(Non Executive)

Age 62

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

Other Directorships and Positions Nil.

Other Directorships and Positions

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Peter Goldmark

David Ryan AO

M Selway

Julie Hill

R Taylor

P C Goldmark (Non Executive)

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.

Age 67

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

Other Directorships and Positions

Experience and Qualifications

Mr Goldmark is Director, Climate and Air Program at Environmental Defense, a United States of America (USA) based non-profit 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 Times-Mirror 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.

M Selway

(Non Executive)

Age 49

Mr Selway joined the Board on 17 June 2008.

Experience and Qualifications

Mr Selway is currently Chief Executive of The Weir Group PLC, a FTSE 250 engineering sector listed company headquartered in Scotland. He brings more than 30 years experience in global business development, integration and management through various roles. Prior to joining the Weir Group in 2001, he was a member of the Supervisory Board of Schefenacker AG, and Executive Director of Britax International plc with line responsibility for the Automotive Components Division. Having spent much of his career managing engineering businesses in the USA, the UK and Australia, Mr Selway is regarded as a specialist in operational management and efficiency. He holds a Diploma in Industrial Engineering.

Other Directorships and Positions

Nil.

J A Hill

(Non Executive)

Age 62

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

Other Directorships and Positions

Mr Selway is an Executive Director of The Weir Group PLC (appointed June 2001).

Experience and Qualifications

R H Taylor

(Executive)

Age 46

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

Experience and Qualifications

Other Directorships and Positions

D J Ryan AO

(Non Executive)

Age 56

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

Other Directorships and Positions

Mr Ryan has previously held Managing Director positions in investment banking and industry,

Nil.

2008 Annual Consolidated Financial Report Lend Lease Corporation 71

Directors’ Report continued

1. Governance continued

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 New South Wales.

S J Sharpe

Ms Sharpe was appointed Deputy Company Secretary in 1995 and Company Secretary in 1997. 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. Ms Sharpe resigned on 31 August 2008.

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 and ensuring there is an appropriate mix of expertise, skills and experience on the Board. During the financial year 1 July 2007 to 30 June 2008, all meetings of the Nomination Committee were held in conjunction with Board meetings, and all Non Executive Directors routinely attended.

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 2007 to 30 June 2008, three 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 2007 to 30 June 2008, four meetings of the Risk Management and Audit Committee were held.

Sustainability Committee

The Sustainability Committee consists 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 2007 to 30 June 2008, three meetings of the Sustainability Committee were held.

Attendance at Meetings of Directors 1 July 2007 to 30 June 2008

Director	Board Meetings Risk Management and Audit Committee Meetings Personnel and Organisation Committee Meetings Sustainability Committee Meetings Other2 Committee Meetings
	Held1 Attended Held1 Attended Held1 Attended Held1 Attended Held1 Attended
D Crawford G Clarke P Colebatch G Edington P Goldmark J Hill D Ryan M Selway R Taylor	12 12 6 6 12 12 12 12 4 4 3 3 6 6 12 12 4 4 3 3 12 12 3 3 12 10 3 3 3 3 12 12 4 4 3 3 6 6 1 1 12 12 3 3

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 21 August 2008 (15 August 2007) is set out below.

		Shares			Shares
	Shares	Held		Shares	Held
	Held	Benefcially/		Held	Benefcially/
	Directly	Indirectly	Total	Directly	Indirectly	Total
Director	2008	20081	2008	2007	20071	2007
D Crawford		33,895	33,895		28,122	28,122
G Clarke	1,000		1,000	1,000		1,000
P Colebatch	2,000	3,767	5,767	2,000	1,689	3,689
G Edington	15,000	11,484	26,484	15,000	9,521	24,521
P Goldmark	3,000	12,579	15,579	3,000	10,501	13,501
J Hill	2,000	3,109	5,109	2,000	1,031	3,031
D Ryan		15,834	15,834	10,000	3,640	13,640
M Selway	4,000		4,000
R Taylor	94,167	97,137	191,304	9,760	94,737	104,497

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

2. Operations

a. Principal Activities

The Group has five lines of business that operate in three geographic regions: Asia Pacific, Europe and the Americas.

The Retail business comprises retail property management, asset management and development in Australia, Singapore and the UK. This business also includes the Group’s ownership in direct property investments, including those held via limited partnerships in Asia Pacific, the UK and the USA;
The Communities business is involved in the development of large scale urban regeneration and greenfield development projects in Australia, the USA and the UK;
The Public Private Partnerships (PPP) business manages and invests equity in large PPP projects in the USA and the UK;
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 held indirectly through investments in Lend Lease managed funds in Asia Pacific and the UK; and
Project Management and Construction provides construction, project management and design services across all regions through Bovis Lend Lease.

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 2007 final dividend of A$168.5 million (42 cents per share, 50% franked) referred to in the Directors’ Report dated 15 August 2007 was paid on 12 September 2007.

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

as follows:
	A$m
Interim dividend of 43 cents per share (40% franked) paid on 26 March 2008	172.5
Final dividend of 34 cents per share (45%
franked) declared by Directors to bepaid on 26 September 2008	136.4
	308.9

d. Significant Changes in State of Affairs There have been no significant changes in the state of affairs of Lend Lease.

e. Event 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 the Group, the results of those operations or state of affairs of the Group in subsequent financial years other than the following:

Bovis UK Pension Scheme

Subsequent to 30 June 2008 the terms of the Bovis UK Pension Scheme were amended to close the Scheme to the accrual of future benefits with the effect from 31 August 2008. As at 30 June 2008, a liability for the defined benefit obligation of A$118.1 million was recognised (refer to Note 22. ‘Defined Benefit Plan Liability’). A benefit to the income statement is expected to arise from the amended terms in the forthcoming financial year. An actuarial assessment post 31 August 2008 will be performed to determine the amount of the benefit arising from the curtailment.

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

The Group 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.

The Group 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 2008 Sustainability Report.

2008 Annual Consolidated Financial Report Lend Lease Corporation 73

Directors’ Report continued

3. Remuneration Report

The Directors present the Remuneration Report prepared in accordance with section 300A of the Corporations Act 2001 for the Company and the consolidated entity for the year ended 30 June 2008. This Remuneration Report contains disclosures required by Australian Accounting Standard AASB 124 ‘Related Party Disclosures’.

The content of this Report, which has been audited as required by the Corporations Act 2001 , is as follows:

Topic	Executive Summary	Discussion	Quantitative
Key Management Personnel	Key management personnel, which includes Directors of the Company and the Executive Offce, have authority and	Pages	Pages
	responsibility for planning, directing and controlling the
	activities of the Companyand the consolidated entity.	75	80 – 83
Key changes for 2008	Changes were made to the Group’s remuneration structure in the current fnancial year to reinforce the alignment between
	key management personnel remuneration and the Group’s
	short and longtermperformance targets.	75
Remuneration	The Remuneration Policy of the Group is determined by
philosophy	the Board on the recommendation of the Personnel and
	Organisation Committee, which is solely comprised of Non
	Executive Directors.	75
Remuneration	The Board is focused on ensuring the remuneration structure
structure	is commensurate with the needs of the organisation and
	its strategy, as well as appropriate external comparator
	companies and the interests of shareholders.	76	80 – 83
Fixed remuneration	Fixed remuneration is benchmarked by the Personnel and
	Organisation Committee based on remuneration information
	sourced from independent external remuneration advisors.	76	80 – 83
Short Term	The STI plan is an annual bonus plan which complements
Incentives (STI)	the overall Remuneration Policy of the Group by rewarding individuals on meeting or exceeding pre-set key fnancial and non-fnancial performance criteria which contribute to overall
	shareholder value.	76 – 77	80 – 83
Long Term	The current LTI awards of the Group were introduced and
Incentives (LTI)	approved by the Board in 1999 and updated and extended
	for awards from 2001 onwards. The objectives of the LTI are
	essentially twofold: align executives with the long term interests
	of the Group and its shareholders, and attract and retain
	executives of the highest calibre by providing competitive
	rewards that relate to the performance of the individual
	executive, the Group and the Lend Lease Corporation share
	price.	77 – 78	80 – 85
Retention awards	When the Board believes an employee is an outstanding
	performer and the Group and its shareholders will gain from
	further incentivising him or her to remain with the Group, a
	retention award maybe made.	78	80 – 85
Relationship of	In considering the Group’s performance and benefts
remuneration to	for shareholder wealth, the Personnel and Organisation
Group performance and vesting of	Committee, when setting the criteria for STI and LTI awards, has regard to the fnancial performance of the Group.
awards		79	79
Remuneration	Non Executive Directors are considered key management
philosophy – Non	personnel of Lend Lease, however their remuneration is not
Executive Directors	linked to the performance of the Group in order to maintain
	their independence and impartiality.	79	80 – 81

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

The key management personnel of Lend Lease include the Directors of the Company and the ‘Executive Office’, consisting of the Executive Directors and the Group Finance Director.

Directors

Directors
Non Executive Directors
D Crawford	Chairman
P Colebatch
G Edington
P Goldmark
J Hill
D Ryan
M Selway	Appointed 17 June 2008
Executive Directors
G Clarke	Managing Director and Chief Executive Offcer
R Taylor	Global Chief Operating Offcer
Executives
S McCann	Group Finance Director Chief Executive Offcer Investment Management – resigned from role
	on 7 January2008
Other Executives1
M Coleman	Chief Executive Offcer Bovis Lend Lease UK
W Hara	Group General Counsel
D Kirkby	Chief Executive Offcer Investment Management UK – terminated
	employment on 31 January 2008
R Lourey	Group Head of Human Resources – resigned on 31 July 2007
P Marchetto	Chief Executive Offcer Bovis Lend Lease Americas – terminated
	employment on 22 April 2008
M Menhinnitt	Global Chief Executive Offcer Bovis Lend Lease
B Soller	Global Deputy Chief Financial Offcer
D Spencer	Group Head of Human Resources–appointed 30 November 2007

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

Directors and Executives

Key changes for 2008

Changes were made to the Group’s remuneration structure in the current reporting period to reinforce the alignment between key management personnel remuneration and the Group’s long term performance targets. The key changes include:

STI arrangements
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 (two-thirds of financial element) and other financial value drivers relevant to each executive’s business unit (one-third 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.
LTI arrangements
The 2006 LTI award was modified on 15 August 2007 such that it will now settle in shares rather than cash, other than for executives specifically identified or in circumstances where share settlement is not practicable.

b. Remuneration Policy – Audited

Remuneration Philosophy

The philosophy of the Group’s remuneration policy is to reward senior executives with market competitive remuneration and benefits, taking account of Group, business unit or function and individual performance. In assessing these market benchmarks, the Group 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.

Remuneration paid by the Group is designed to be appropriate and competitive in each of its business locations, having regard to local practice on base pay, incentives, pensions, superannuation and other benefits. The Group also recognises the need to take account of differing costs of living in relation to expatriates and this is reflected in remuneration for expatriate executives. The approach of the Group is to provide a balance of fixed and performance based remuneration.

Each year the Personnel and Organisation Committee sets the key performance indicators (KPI) for the key management personnel and other senior executives. The KPI generally include measures relating to the Group, the business unit geography or function, and the individual, and include financial, non financial, incident and injury free and sustainability measures. The measures are chosen as they directly align the individual’s reward to the KPI of the Group and to its strategy and performance.

2008 Annual Consolidated Financial Report Lend Lease Corporation 75

Directors’ Report continued

3. Remuneration Report continued

b. Remuneration Policy – Audited continued

Directors and Executives continued

Remuneration Structure

The remuneration framework consists of three principal elements:

Component	Comprises	‘At risk’?
Fixed Remuneration	Base salary,superannuation and other benefts	No
Short Term Incentive	Annual cash and an equityrelated deferral	Yes
LongTerm Incentive	Cash or share based benefts	Yes

‘At risk’ implies an absence of certainty of collection of a particular component of remuneration in the event agreed-upon performance hurdles or employment conditions are not met during the reporting period. Fixed Remuneration

The salaries of the Executive Office and members of the Executive Management Team 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. For the forthcoming year no pay increases have been proposed for Executive Office and Executive Management Team members.

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 executives is set out in Section 3c. of this Report. Executives are not automatically entitled to all of these benefits.

Short Term Incentives (STI)

Under the STI arrangement, executives receive benefits dependent on the achievement of Group or business unit financial targets, incident and injury free, sustainability and individual targets. The total value of the potential benefit (target opportunity) varies by executive, but is linked to salary. Arrangements for the June 2008 Financial Year

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

Financial Element	Personal Performance Element
– Represents 75% of target opportunity.	– Represents 25% of target opportunity.
– Measured against the current fnancial year operating proft after tax. This is measured	– Measured against targets specifc to each executive’s business unit and individual
either entirely at Group level or business unit	objectives.
level depending on the role. At the Group level,
the Personnel and Organisation Committee
determined that this target was not met.
– Upside opportunity can be increased to
+25% of target opportunity for +10% of target
performance achievement.

The benefit delivered to Executive Directors and Executives under the STI arrangement is summarised as follows:

follows:
	June 2008 STI Cash Element	June 2008 STI Deferred Element1 Maximum Opportunity % Calculated Based On
	Maximum Opportunity % Percentage Paid %
G Clarke R Taylor Other key personnel and executives	118 20 83 15 59–83 15–83	59 Base salary 59 Total package value 29–59 Australia: Total package value UK and USA: Base salary

1 The STI deferred element is due to vest in August 2009.

Total package value equates to base salary plus superannuation. Cash benefits are paid in September of each year. Deferred benefits are delivered in Lend Lease Corporation shares or equivalent share value in cash based on the Lend Lease Corporation share price at the date of release 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. Further detail is in Section 3c. of this Report.

Future Arrangements

The Board has agreed it intends to change the performance criteria under the STI for the June 2009 financial year.

Financial Element Strategic, Business Unit, Functional and Cultural Element – 40% of target opportunity for Executive Office and – 60% of target opportunity for Executive Office functional heads. and functional heads.
– 60% of target opportunity for business unit CEOs. – 40% of target opportunity for business unit CEOs.
– Measured against financial value drivers under – Measured against strategic, business unit, the themes of profitability, growth and capital functional and cultural goals in a mix relevant to efficiency at Group, business unit level, or a the individual. combination depending on role.
– Upside opportunity for out performance on fnancial measures.

Long Term Incentives (LTI)

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

Aligning executives with the long term interests of the Group and its shareholders; and
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 Corporation share price.

LTI grants are normally made each year and are based on competitive remuneration practice. LTI grants are settled in cash or Lend Lease Corporation shares, with settlement occurring upon vesting, three years after the grant date, if performance hurdles are met. Grants depend on personal contribution and potential and are designed to retain and motivate high performing key executives. The LTI are in the form of an Australian dollar figure grant (converted from local salary for overseas participants), which is 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; and
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 provide that, in the event of a change in control of Lend Lease Corporation, all awards will vest upon change in control, to the extent that performance conditions have been met. Participants would then be entitled to a pro rata settlement, with the Board having discretion to allow the entitlement to exceed this pro rata amount, if circumstances so provide.

Details of the terms of the awards on issue during the June 2008 financial year are summarised below.

Plan	LTI – June 2005	LTI – June 2006 LTI – June 2007	LTI – June 2006 LTI – June 2007
Grant date	17 August 2005	16 August 2006 15 August 2007
Service period1	1 July 2005 – 30 June 2008	1	July 2006 – 1 July 2007 –
	(3 years)	30 June 2009 (3 years) 30 June 2010 (3 years)
Performance	Total shareholder return (TSR) of	1. TSR of Lend Lease Coporation against the
condition(s):	Lend Lease against the TSR of		TSR of the individual ASX100 listed companies
	several comparator companies		(comprised as at the beginning of the
	of Lend Lease.		performance period) (50% award).
	Performance measured over the		Performance assessed over the three year
	three year performance period.		performance period.
	Vesting Schedule		Vesting Schedule
	– Rank 1 to 5 inclusive –		– Upper quartile or better – 100% vesting
	100% vesting		– Median upper quartile – straight line
	– Rank 6 to 10 inclusive –		increase from 50% to 100% vesting
	progressive decrease in		– Median – 50% vesting
	vesting from 85% to 25%		– Below median – 0% vesting
	– Rank 11 to 19 inclusive –
	0% vesting
		2. Earnings per share (EPS) growth of Lend Lease
			Corporation over performance period (50%
			award).
			Vesting Schedule
			– At least 10% compounded EPS growth2
			over three years – 100% vesting
			– Less than 10% EPS growth – 0% vesting
			Each of the two performance conditions may
			vest independently.

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. Performance conditions continue to apply.
2 EPS as defined in this financial report (excluding treasury shares) adjusted for unrealised property investment revaluations (unless assets have been sold).

2008 Annual Consolidated Financial Report Lend Lease Corporation 77

Directors’ Report continued

3. Remuneration Report continued

b. Remuneration Policy – Audited continued Directors and Executives continued

Long Term Incentives (LTI) continued

Plan	LTI – June 2005	LTI – June 2006 LTI – June 2007
Method of award	Cash or shares	Shares, except for pre specifed executives
settlement		which are settled in cash.
Award status	Did not vest.	Not yet vested.
	TSR ranking– 12th.
Accounting	Recognised as a cash settled	Recognised as an equity settled share based
treatment	share base payment. The	payment. The income statement expense and
	expense and the liability	corresponding increase in equity is measured at
	incurred is measured at fair	the fair value at grant date using a Monte-Carlo
	value at each reporting date	simulation methodology, where the share price is
	using a Monte-Carlo simulation	projected based on the assumptions underlying
	methodology, where the share	the Black-Scholes formula.
	price is projected based on the	The method of award settlement of the 2006 LTI
	assumptions underlying the Black-Scholes formula.	was changed from cash to shares on 15 August 2007.
	As the award did not vest, the liability as at 30 June 2007	Certain pre specifed executive awards are accounted for as a cash settled share based
	was reversed to the income statement in the June 2008	payment.
	fnancialyear.

Refer to Section 3d. of this Report for quantitative analysis of LTI awards on issue during the 2008 financial year and their vesting conditions.

Hedging in Relation to LTI Awards

The Group 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.

Future Arrangements

The Board is currently reviewing the structure of the LTI for awards to be granted in the June 2009 financial year.

Retention Awards

When the Board believes an employee is an outstanding performer and the Group and its shareholders will gain from further incentivising him or her to remain with the Group, a retention award may be made. As an incentive to remain with the Group 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 retention awards granted to the key management personnel are summarised below.

Key Management Personnel	Keyterms and benefts
G Clarke	The original award of 279,728 shares was granted in December 2002 and was due
	to vest on 9 December 2007. However the award was extended with the number of
	shares increased by 27,973 and the vesting date changed to 20 June 2008. The award
	vested on 20 June 2008 at a value of A$3,012,393 based on the closing share price on
	that date,A$9.79.
R Taylor	The equity settled award of 337,630 shares valued at A$5.5 million was granted on
	3 October 2006 and vests in four equal tranches on 1 September 2007, 2008, 2009 and 2010. The frst tranche of 84,407 shares vested on 1 September 2007 at a value of
	A$1,607,953. The remaining tranches will vest if Mr Taylor remains in employment with
	the Group.
S McCann	The equity settled award of 141,367 shares valued at A$2.5 million was granted on
	22 August 2007 and vests on 30 June 2012. The award will vest if Mr McCann remains
	in employment with the Group. If Mr McCann’s employment is terminated without
	cause bythe Group prior to the vestingdate,the award will vest on apro rata basis.

Refer to Sections 3d. and 3e. for further details of retention awards granted to key management personnel and other executives in the category of five highest paid.

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.

is summarised in the following table.
						Previous
						GAAP
		2008	2007	2006	2005	2004
Statutory proft after tax1 Operating proft after tax1	A$m A$m	265.4 447.1	497.5 413.7	415.2 354.2	210.7 310.42,3	333.5 255.93
Earnings per share4	cents	120.9	120.5	96.1	n/a	n/a
Dividends paid and declared	A$m	308.9	308.5	243.7	227.2	177.4
(Decrease)/increase in closingshareprice5	A$	(8.99)	4.55	1.03	2.68	1.93

1 Statutory profit after tax represents profit attributable to the equity holders of the parent. Operating profit after tax excludes unrealised property investment revaluation losses of A$60.2 million after tax for the June 2008 financial year (A$51.6 million revaluation gains after tax for the June 2007 financial year), reduction in carrying value of inventory in Crosby Lend Lease of A$121.5 million after tax for the June 2008 financial year (A$nil after tax for the June 2007 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 June 2005 and 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 the sale of IBMGSA). 4 For the 2006 and 2007 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).

5 For cash settled LTI awards, the starting and ending share prices are based on the weighted average daily closing price over the award period (three months for the 2005, 2006 and 2007 LTI). For share settled LTI arrangements the value is based on share prices at the date the award is granted. The table above represents the movement in the closing share price on 30 June of each financial year.

Operating profit after tax and return on capital are considered in setting the STI targets while dividends, changes in Lend Lease Corporation share price 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 performance linked 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; and

– Is simple to benchmark externally.

Non Executive Directors

Board fees/ Committee fees

Board and Committee fees are set by reference to factors such as responsibilities and risks attached to the role, time commitment expected, independent advice and fees paid by peer companies. Current Board fees per annum are:

A$140,000 for Board members (30 June 2007: A$140,000).

Current Committee fees per annum are:

A$15,000 for members of the Risk Management and Audit, Personnel and Organisation, and Sustainability Committees (30 June 2007: A$15,000).
A$35,000 for Chairman of the Risk Management and Audit Committee (30 June 2007: A$35,000).
A$25,000 for Chairman of each of the Nomination, Personnel and Organisation and Sustainability Committees (30 June 2007: A$25,000).
The Chair of the Board receives A$500,000 per annum (30 June 2007: A$500,000).

Other fees/ benefits

Non Executive Directors are compensated for time spent travelling to overseas Board and Board Committee meetings as follows:

$Nil for travel less than four hours;
A$2,000 each way for travel between four and 12 hours; and
A$5,000 each way for travel over 12 hours.

Non Executive Directors are also entitled to be reimbursed for all business related expenses, including travel, as may be incurred in the discharge of their duties.

Post-employment benefits

Benefits are accrued in Lend Lease Corporation 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 Corporation 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 on 1 January each year based on the weighted average price of Lend Lease shares traded on the ASX during the five business days prior to 1 January each year.

The shares will be accessible only on retirement, except if the shares need to be sold at an earlier time to meet a tax liability in respect of the shares.

Two Non Executive Directors appointed prior to 1 January 2001 have also accrued benefits under the previous Retirement Benefit Plan, as follows:

G Edington A$120,250 (30 June 2007: A$111,249)
P Goldmark A$128,032 (30 June 2007: A$123,452)

Refer Section 3c. for details of fees and benefits earned by Non Executive Directors.

2008 Annual Consolidated Financial Report Lend Lease Corporation 79

Directors’ Report continued

3. Remuneration Report continued

c. Remuneration Details – Audited

Details of the total remuneration of the Directors of the Company 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.

		Short	Term
		Committee
		Chairman	Committee
	Base Fees	Fees	Fees	Travel Fees
Non Executive Directors	A$000s	A$000s	A$000s	A$000s
D Crawford	2008 500 2007 500			38 47
P Colebatch	2008 140 2007 140	25 16	15 15	52 48
G Edington	2008 140 2007 140		30 30	52 48
P Goldmark	2008 140 2007 140	25 25	15 9	48 58
J Hill	2008 140 2007 140	25 16	15 9	58 52
D Ryan	2008 140 2007 140	35 35	15 9	34 44
M Selway2	2008 5

1 Comprises entitlements under the Non Executive Directors’ Retirement Benefit Plan.

2 Mr Selway was appointed as a Non Executive Director on 17 June 2008.

Short Term	Post Employment
A Executive Directors Salary and Fees A$000s Cash Incentive Bonus1 A$000s Other Bonuses A$000s Non Monetary2 A$000s	Super- annuation A$000s Life Insurance A$000s
G Clarke 2008 1,929 350 421 2007 1,798 1,882 514	608 60
	631 92
R Taylor 2008 1,046 182 7 2007 976 879 57	249 5
	202 4

1 The cash element of all STI bonuses has been accrued 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. 3 Accrued value of cash settled LTI benefits for the year as determined by actuarial analysis. Negative amounts generally represent an accrual reversal for the 2005 LTI, which did not vest.
4 Represents fair value of 2006 and 2007 LTI that are equity settled.
5 Represents fair value of deferred element of STI that is equity settled at a grant date value of A$18.73. Based on the 30 June 2008 Lend Lease Corporation share price the value of the awards is: Mr Clarke A$461,141 and Mr Taylor A$319,696.

Post Employment	Share Based Payment
Super- annuation A$000s	Other Equity1 A$000s	Total A$000s
13 13	100	651
	100	660
13 13	36	281
	34	266
13 13	34	269
	34	265
13 13	36	277
	35	280
13 13	36	287
	33	263
13 13	38	275
	36	277
	1	6

Share Based Payment	Other LongTerm9
B C D LTI Cash Settled3 A$000s LTI Equity Settled4 A$000s STI Equity Settled5 A$000s Retention A$000s Other Equity8 A$000s	A$000s	E Total A$000s	(A+B+C+D)/E Proportion of Remuneration Performance Related %
(1,144) 904 (1,637)6 5,324 2,039	28	1,519	7.2
	30	12,310	58.5
(361) 487 627 1,8037 34 1,082 2,258 34	15	4,094	22.8
	15	5,507	35.6

6 Negative amount in relation to Mr Clarke’s retention incentive recognised as the award value at the vesting date of 20 June 2008 was below the accrued value in the prior year. This excess accrual has been reversed in the June 2008 financial year. Refer to Section 3d. for further information.
7 Relates to Mr Taylor’s equity settled retention incentive.
8 Comprises Mr Taylor’s participation in the Employee Share Acquisition Plan (ESAP).
9 ‘Other Long Term’ represents accrual of statutory employee entitlements.

2008 Annual Consolidated Financial Report Lend Lease Corporation 81

Directors’ Report continued

3. Remuneration Report continued

c. Remuneration Details – Audited continued

Details of the total remuneration of the executives of the 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.

periods that each individual was a key management person.
Short Term	Post Employment
A Salary and Fees A$000s Cash Incentive Bonus1 A$000s Other Bonuses A$000s Non Monetary3 A$000s	Super- annuation A$000s Life Insurance A$000s End of Service A$000
Executives S McCann 2008 1,005 182 65 2007 855 1,026 1
	95 1
	79 2
Other Executives in the Category of Five Highest Paid M Coleman 2008 487 373 530	261 2
W Hara 2008 318 173 42	12
M Menhinnitt 2008 658 623 40	359 1
B Soller 2008 511 155 4752 73 2007 526 336 118 333	42 3 24 3
D Spencer 2008 330 97 406	50
Former D Kirkby11 2008 204 266	39 1 1,305
R Lourey12 2008 46 1 2007 539 519 29	1 955 13
P Marchetto13 2008 525 44	7 2 2,299
2007 697 498 35	9 5

1 The cash element of all STI bonuses has been accrued and is based on the performance criteria as outlined in Section 3b. of this Report.
2 Represents bonus received by Mr Soller as part of his permanent relocation to Australia.

3 ‘Non Monetary’ includes relocation benefits (such as housing, home leave travel, cost of living and tax return advice) and motor vehicle costs.

4 Accrued value of LTI benefit for the year as determined by actuarial analysis. Negative amounts generally represent an accrual reversal for the 2005 LTI which did not vest.

5 Represents fair value of 2006 and 2007 LTI that are equity settled.
6 Represents fair value of deferred element of STI that is equity settled at a grant date value of A$18.73. Based on the 30 June 2008 Lend Lease Corporation share price the value of the awards is: Mr McCann A$174,373; Mr Coleman A$86,284; Mr Hara A$62,715; Mr Menhinnit A$48,438; Mr Soller A$85,587; Mr Kirkby A$62,323.
7 Relates to equity settled retention incentive.
8 ‘Hybrids’ represent retention incentives that can be settled in cash or shares at the option of the executive.
9 Represents executive participation in the Employee Share Acquisition Plan (ESAP).

10 ‘Other Long Term’ represents accrual of statutory employee entitlements.

11 Mr Kirkby terminated employment as Chief Executive Officer, Investment Management UK on 31 January 2008.

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

13 Mr Marchetto terminated employment as Chief Executive Officer Bovis Lend Lease Americas on 22 April 2008.

Share Based Payment	Other LongTerm10
B C D LTI Cash Settled4 A$000s LTI Equity Settled5 A$000s STI Equity Settled6 A$000s Retention/ Hybrid A$000s Other Equity9 A$000s	A$000s	E Total A$000s	(A+B+C+D)/E Proportion of Remuneration Performance Related %
(606) 440 342 441 15 758 15
	15	1,995	17.9
	13	2,749	64.9
(130) 149 169 5017	8	2,350	23.9
191 123 240	8	1,107	44.0
136 95 (96)8	9	1,825	46.8
(134) 129 168 345	8 8	1,430 1,693	22.2 40.2
79	6	968	18.2
122		1,937	6.3
1 558 10	8	1,004 1,676	64.3
377		2,914
308 8607		2,412	33.4

d. Long Term Incentives and Retentions – Audited

Criteria 1: The award is dependent upon the executive remaining with the Group. If the executive resigns before vesting, the grant will lapse.
Criteria 2: The award is dependent upon service to the 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. The award was originally granted on 9 December 2002 and was due to vest on 9 December 2007. On 7 December 2007 however, the award was extended with the number of awards granted increased by 27,973 and the vesting date changed to 20 June 2008. The award subsequently vested on 20 June 2008 at a value of A$3,012,393, based on the closing Lend Lease Corporation Limited share price on that date, A$9.79.
Criteria 4: Forfeiture on resignation. Pro rata on other service cessation. Criteria 5: The TSR of Lend Lease is at or greater than the median TSR of 18 comparator companies (with 25% vesting at median performance rising to 100% on reaching top quartile performance). The award did not vest at 30 June 2008 as the TSR performance hurdle was not achieved.
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 property investment revaluations (with 100% vesting if a minimum compound annual growth rate of 10% over the three year performance period).

2008 Annual Consolidated Financial Report Lend Lease Corporation 83

Directors’ Report continued

3. Remuneration Report continued

d. Long Term Incentives and Retentions – Audited continued

				Award Value	Award Value
	Grant	Vesting	Granted	at Grant Date2	at June 2008
Executive Directors	Date	Date1	Number	A$	A$
G Clarke	Dec 2002	Jun 2008	279,728	2,797,280	Vested
	Dec 2007	Jun 2008	27,973	279,730	Vested
	Jul 2005	Jun 2008	194,845	2,434,783	0
	Jul 2006	Jun 2009	198,620	1,915,690	1,130,148
	Jul 2007	Jun 2010	141,257	2,791,238	722,530
					1,852,678
R Taylor	Jul 2005	Jun 2008	60,819	759,994	0
	Jul 2006	Jun 2009	80,243	773,944	766,321
	Jul 2007	Jun 2010	59,717	687,641	570,297
	Oct 2006	Sep 2007	84,407	1,374,992	Vested
	Oct 2006	Sep 2008	84,407	1,374,992	806,087
	Oct 2006	Sep 2009	84,408	1,375,008	806,096
	Oct 2006	Sep2010	84,408	1,375,008	806,096
					3,754,897
Total Directors					5,607,575

1 Performance shares are paid out at the share price at the vesting date if cash settled.
2 Award value represents the number of shares granted at the share price on the grant date. The 2006 LTI terms and conditions were modified in August 2007 so that the award will vest in shares rather than cash for most specified executives. Mr Clarke’s 2006 LTI continues to be cash settled.
3 Current award expensed represents the 2008 financial 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 ‘LTI Cash Settled’, ‘LTI Equity Settled’ or ‘Retention/Hybrids’. Negative amounts generally represent an accrual reversal for the 2005 LTI which did not vest.

				Award Value	Award Value
	Grant	Vesting	Granted	at Grant Date2	at June 2008
	Date	Date1	Number	A$	A$
Executives
S McCann	Jul 2005	Jun 2008	102,033	1,275,004	0
	Jul 2006	Jun 2009	65,621	632,915	626,681
	Jul 2007	Jun 2010	59,717	687,641	570,297
	Aug2007	Jun 2012	141,367	2,500,000	1,350,052
					2,547,030
Others in the Category of Five
Highest Paid
M Coleman	Jul 2005	Jun 2008	21,847	273,000	0
	Jul 2006	Jun 2009	24,394	235,280	232,963
	Jul 2007	Jun 2010	18,346	211,254	175,204
	Jul 2007	Jun 2010	80,214	1,500,000	766,044
					1,174,211
W Hara	Jul 2006	Jun 2009	31,384	302,699	299,717
	Jul 2007	Jun 2010	23,360	268,990	223,088
					522,805
M Menhinnitt	Jul 2006	Jun 2009	5,929	57,185	56,622
	Jul 2007	Jun 2010	30,364	349,641	289,976
	Sep2005	Jul 2008	39,463	526,436	376,872
					723,470
B Soller	Jul 2005	Jun 2008	22,608	282,510	0
	Jul 2006	Jun 2009	21,398	206,384	204,351
	Jul 2007	Jun 2010	15,688	180,647	149,820
					354,171
D Spencer	Jul 2007	Jun 2010	20,595	237,151	196,682
Former
P Marchetto	Jul 2005	Jun 2008	110,664	1,453,834	Vested

1 Performance shares are paid out at the share price at the vesting date if cash settled. 2 Award value represents the number of shares granted at the share price on the grant date. The 2006 LTI terms and conditions were modified in August 2007 so that the award will vest in shares rather than cash.

3 Current award expensed represents the 2008 financial year accrual 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 ‘LTI Cash Settled’ or ‘LTI Equity Settled’. Negative amounts generally represent an accrual reversal for the 2005 LTI which did not vest.

	Current Award Expensed 20083 LTI Cash Settled A$ LTI Equity Settled4 A$ Retention A$ % Vested in the Year % Forfeited in the Year6 Service Criteria Performance Criteria Performance Share (PS)/ Retention
	(1,911,027)5 20 Criteria 3 none Retention 273,856 100 Criteria 3 none Retention (1,157,379) 100 Criteria 4 Criteria 5 PS (227,089) Criteria 4 Criteria 6,7 PS 240,843 Criteria 4 Criteria 6,7 PS
	(1,143,625) – (1,637,171)
	(361,265) 100 Criteria 4 Criteria 5 PS 257,981 Criteria 4 Criteria 6,7 PS 229,214 Criteria 4 Criteria 6,7 PS 259,354 100 Criteria 1 none Retention 718,923 Criteria 1 none Retention 472,537 Criteria 1 none Retention 351,925 Criteria 1 none Retention
	(361,265) 487,195 1,802,739
	(1,504,890) 487,195 165,568

4 Represents fair value of 2006 and 2007 LTI that are equity settled. 5 A negative amount was recognised in relation to Mr Clarke’s retention incentive as the vesting value at 20 June 2008 was below the value accrued in the prior year. This excess accrual has been reversed in the June 2008 financial year.
6 The percentage 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.

	Current Award Expensed 20083 LTI Cash Settled3 A$ LTI Equity Settled4 A$ Retention/ Hybrids A$ % Vested in the Year % Forfeited in the Year5 Service Criteria Performance Criteria Performance Share (PS)/ Retention
	(606,076) 100 Criteria 4 Criteria 5 PS 210,972 Criteria 4 Criteria 6,7 PS 229,214 Criteria 4 Criteria 6,7 PS 441,093 Criteria 2 none Retention
	(606,076) 440,186 441,093
	(129,771) 100 Criteria 4 Criteria 5 PS Criteria 4 Criteria 6,7 PS 78,427 Criteria 4 Criteria 6,7 PS 70,418 500,912 Criteria 2 none Retention
	(129,771) 148,845 500,912
	100,900 Criteria 4 Criteria 6,7 PS 89,663 Criteria 4 Criteria 6,7 PS
	190,563
	19,062 Criteria 4 Criteria 6,7 PS 116,547 Criteria 4 Criteria 6,7 PS (95,796) Criteria 2 none Retention
	135,609 (95,796)
	(134,292) 100 Criteria 4 Criteria 5 PS 68,795 Criteria 4 Criteria 6,7 PS 60,216 Criteria 4 Criteria 6,7 PS
	(134,292) 129,011
	79,050 Criteria 4 Criteria 6,7 PS
	37,286 100 Criteria 2 none Retention6

4 Represents fair value of 2006 and 2007 LTI that are equity settled.
5 The percentage 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.
6 Retention that settled in cash at the option of the executive. Refer to Section 3e. for further information.

2008 Annual Consolidated Financial Report Lend Lease Corporation 85

Directors’ Report continued

e. Service Agreements – Audited

3. Remuneration Report continued

Non Executive Directors

Under the Company’s constitution, at each Annual General Meeting one-third 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 re-election. Newly appointed Directors must seek election at the first meeting of shareholders following their appointment.

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 (other than where specified):

Length of contract	– No fxed term.
Benefts	– Australian resident executives are entitled to participate in the Lend Lease
	Employee Share Acquisition Plan;
	– Other benefts vary; however typically they may include health insurance, life insurance, car allowances or motor vehicle leases and benefts provided by
	the Lend Lease Foundation;
	– Executives who are relocated receive relocation packages. Benefts
	provided vary but typically include accommodation, health insurance,
	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	– Non compete and non solicitation terms vary in each individual’s
solicitation clauses	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 on pages 87 to 89.

Executive Director G Clarke

Key Employment Terms and Benefits

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 home leave trips each term for children attending UK universities.

If still employed by the Group 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.

Termination Obligations

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) and LTI entitlements in accordance with the LTI program rules.

Non compete period post termination: Six months. Non solicitation period post termination: 12 months.

Executive Director

R Taylor

Key Employment Terms and Benefits

Retention award:

Award date: 3 October 2006.
Vest date: Three remaining equal tranches on each of:
1 September 2008: 84,407 Lend Lease Corporation shares;
1 September 2009: 84,408 Lend Lease Corporation shares; and
1 September 2010: 84,408 Lend Lease Corporation shares.

Termination Obligations

Notice period: Six months (if instigated by the employee) or 18 months (if instigated by the Group). Termination on or after 1 September 2010: If Mr Taylor resigns or is terminated by the Group 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.
Non compete period post termination: Six months.
Non solicitation period post termination: Two years.

Executive

S McCann

Key Employment Terms and Benefits

Retention award:

Award date: 22 August 2007.
Vest date: 30 June 2012.
Grant number and value: 141,367 Lend Lease Corporation shares, valued at A$2,500,000 at award date. Refer to Section 3d. of this Report for further details.
Vesting conditions: Mr McCann must remain in employment with the Group to the vesting date. If Mr McCann’s employment is terminated without cause by the Group 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.

Termination Obligations

Notice period: Three months (if instigated by the employee) or 12 months (if instigated by the Group). Termination payments provided for under the contract: If the Group terminates Mr McCann’s employment, Mr McCann’s most recent LTI award will be extended by 12 months from the date on which the Group provided him with notice of termination.

Grant number and value: 337,630 Lend Lease Corporation 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 the Group 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.

2008 Annual Consolidated Financial Report Lend Lease Corporation 87

Directors’ Report continued

3. Remuneration Report continued

e. Service Agreements – Audited continued

Executive Directors and Executives continued

Executive

P Marchetto

Key Employment Terms and Benefits

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 Group terminates Mr Marchetto’s employment for cause, Mr Marchetto must pay to the Group 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 Group.

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.

Mr Marchetto terminated employment on 22 April 2008.

Termination Obligations

Termination payments provided for under the contract: If the Group 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 Group; 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 Group;
A pro rata share of Mr Marchetto’s STI and LTI as calculated on the termination date at the sole discretion of the Group;
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 Group terminates Mr Marchetto’s service agreement without cause. The release benefit will be reduced by any applicable taxes, withholdings and deductions.
Non compete period post termination: 12 months.
Non solicitation period post termination: 12 months.

Executive

M Coleman

Key Employment Terms and Benefits Retention award:

Award date: 1 July 2007.
Vest date: 30 June 2010.
Grant number and value: 80,214 Lend Lease Corporation shares to the value of A$1,500,000 at the award date.
Vesting conditions: Mr Coleman must remain in employment with the Group and not under notice given by him at the vesting date. If Mr Coleman’s employment is terminated without cause by the Group prior to the vesting date, the award will vest on a pro rata basis.
Forfeiture: The retention award is forfeited if Mr Coleman resigns or is terminated for cause prior to the vesting date.

Termination Obligations

Notice period: Six months.

Assignment arrangements as set out above.

Executive

W Hara

Key Employment Terms and Benefits Retention award:

Award date: On or before 15 September 2008.
Vest date: The anniversary of the award date.
Grant number and value: Lend Lease Corporation shares to the value of A$144,250 at the award date.
Vesting conditions: Mr Hara must remain in employment with the Group and not under notice given by him at the vesting date. If Mr Hara’s employment is terminated without cause by the Group prior to the vesting date, the award will vest on a pro rata basis.
Forfeiture: The retention award is forfeited if Mr Hara resigns, gives notice to resign or is terminated for cause prior to the vesting date.

Termination Obligations

Notice period: Six months (if instigated by the employee) or 12 months (if instigated by the Group). Non compete period post termination: Six months. Non solicitation period post termination: Six months. Executive

D Kirkby

Termination Obligations

Notice period: Six months. Assignment arrangements as set out above. Executive

R Lourey

Termination Obligations

Notice period: Six months (if instigated by the employee) or 12 months (if instigated by the Group). Executive

M Menhinnitt

Termination Obligations

Notice period: Six months (if instigated by the employee) or 12 months (if instigated by the Group). Non compete period post termination: 12 months. Non solicitation period post termination: 12 months.

Executive

B Soller

Key Employment Terms and Benefits Relocation benefits as part of permanent relocation to Australia.

Assignment bonus of A$188,625 that was paid during August 2007 and was only to be reimbursed if Mr Soller resigned or was terminated by the Company prior to 12 October 2007.

Retention award:

Award date: On or before 15 September 2008.
Vest date: The anniversary of the award date.
Grant number and value: Lend Lease Corporation shares to the value of A$116,250 at the award date.
Vesting conditions: Mr Soller must remain in employment with the Group and not under notice given by him at the vesting date. If Mr Soller’s employment is terminated without cause by the Group prior to the vesting date, the award will vest on a pro rata basis.
Forfeiture: The retention award is forfeited if Mr Soller resigns, gives notice to resign or is terminated for cause prior to the vesting date.

Termination Obligations

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. Executive

D Spencer

Key Employment Terms and Benefits Retention award:

Award date: On or before 15 September 2008.
Vest date: The anniversary of the award date.
Grant number and value: Lend Lease Corporation shares to the value of A$81,018 at the award date.
Vesting conditions: Mr Spencer must remain in employment with the Group and not under notice given by him at the vesting date. If Mr Spencer’s employment is terminated without cause by the Group prior to the vesting date, the award will vest on a pro rata basis.
Forfeiture: The retention award is forfeited if Mr Spencer resigns, gives notice to resign or is terminated for cause prior to the vesting date.

Termination Obligations

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

Non compete period post termination: 12 months. Non solicitation period post termination: 12 months. Assignment arrangements as set out above.

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 70 to 71 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 the Group 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, the Company paid insurance premiums of A$502,640 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.

c. Non Audit Services

During the year KPMG, the Group’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 Group and have been reviewed by the Risk Management and Audit Committee to ensure they do not impact the integrity and objectivity of the auditor; and
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 Group, acting as an advocate for the Group 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.

2008 Annual Consolidated Financial Report Lend Lease Corporation 89

Directors’ Report continued

4. Other continued

c. Non Audit Services continued

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

4. Other continued c. Non Audit Services continued Details of the amounts paid to the auditor of the Group, KPMG, and its related practices for audit and non audit services provided during the year are set out below.	4. Other continued c. Non Audit Services continued Details of the amounts paid to the auditor of the Group, KPMG, and its related practices for audit and non audit services provided during the year are set out below.
Consolidated
June 2008	June 2007
A$000s	A$000s
Audit and Review of Financial Reports 6,816	6,798
Other Services KPMG International assignees tax services 26	202
Tax services 58	456
Accounting advice	82
Other services 152	260
Total other services 236	1,000
Total audit and other services 7,052	7,798

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 Consolidated 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.

==> picture [105 x 51] intentionally omitted <==

D A Crawford Chairman Sydney, 21 August 2008

G A Clarke Managing Director

Lead Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001

To: The Directors of Lend Lease Corporation Limited

I declare that, to the best of my knowledge and belief, in relation to the audit for the financial year ended 30 June 2008 there have been:

No contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit; and
No contraventions of any applicable code of professional conduct in relation to the audit.

KPMG

==> picture [132 x 58] intentionally omitted <==

C Hall Partner Sydney, 21 August 2008

2008 Annual Consolidated Financial Report Lend Lease Corporation 91

Five Year Profile

	June 2008 June 2007 June 2006 June 2005	Previous GAAP1 June 2004
Proftability Revenue A$m Statutory proft before tax A$m Operating proft before tax2 A$m Statutory proft after tax A$m Operating proft after tax2 A$m	14,678 14,282 12,127 9,435 322 628 573 350 512 545 473 393 265 498 415 226 447 446 354 286	9,726 466 385 334 256
Operating EBITDA2 A$m Earnings per share on statutory proft3 cents Earnings per share on operating proft2,3 cents Statutory proft after tax to shareholders’ equity (ROE) for the period % Dividend per share4 cents Dividend payout ratio on operating proft4 % Corporate Strength Total assets A$m Cash A$m Borrowings A$m Current assets A$m Current liabilities A$m Shareholders’ equity A$m Cash fows provided by/(used in) operations A$m Net asset backing per share A$ Ratio of current assets to current liabilities times Borrowings to shareholders’ equity % Borrowings to shareholders’ equity plus borrowings % Gross borrowings to total tangible assets5 % Borrowings to total market capitalisation % Shares on issue m Number of shareholders no. Number of equivalent full-time employees no. Shareholders’ Returns and Statistics Proportion of shares on issue to top 20 shareholders % Shareholdings relating to employees6 % Total dividends declared A$m Share price as at 30 June as quoted on the Australian Securities Exchange A$	528 551 527 411 66.2 124.3 104.0 56.5 111.5 111.4 88.7 71.6 8.2 15.7 14.7 11.9 77 77 61 57 69.1 69.2 68.8 79.5 8,595 9,336 8,166 6,925 843 550 560 570 929 1,076 846 500 4,181 4,514 3,379 2,612 3,987 3,869 3,179 3,384 3,044 3,243 3,011 2,710 269 357 660 (55) 7.59 8.09 7.53 6.80 1.05 1.17 1.06 0.77 30.5 33.2 28.1 18.4 23.4 24.9 21.9 15.6 14.4 15.7 15.6 12.9 24.3 14.5 15.1 9.7 401 401 400 399 51,632 49,051 50,179 52,878 12,039 10,817 9,652 8,791 75.4 76.9 76.4 75.6 9.8 9.5 9.6 10.8 309 309 244 227 9.55 18.54 13.99 12.96	430 80.6 61.8 9.0 44 69.2 7,131 1,380 862 3,455 3,328 2,836 443 7.08 1.04 30.4 23.3 17.2 20.9 400 63,143 9,060 69.8 11.9 177 10.28

1 June 2004 represents Lend Lease’s results under previous Generally Accepted Accounting Principles (GAAP).

2 Operating profit excludes an adjustment in June 2008 to reduce the carrying value of inventory in Crosby Lend Lease by A$121.5 million before/after tax and unrealised property investment revaluations (June 2008: A$69.2 million loss before tax, A$60.2 million loss after tax; June 2007: A$82.7 million gain before tax, A$51.6 million gain after tax).

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

4 Dividends include interim and final dividends.

5 Gross borrowings includes other financial liabilities.

6 Shares held through employee benefit vehicles.

Consolidated Financial Statements

Consolidated Financial Statements	Consolidated Financial Statements	94
Income Statements		94
Balance Sheets		95
Statements of Changes in Equity		96
Statements of Cash Flows		98
Notes to the Consolidated Financial
Statements		99
1	Signifcant Accounting Policies	99
2	Revenue	109
3	Other Income	110
4	Other Operating (Income) and Expenses	110
5	Taxation	112
6	Dividends and Earnings Per Share	115
7	Cash and Cash Equivalents	115
8	Loans and Receivables	116
9	Inventories	117
10	Investments Accounted for
	Using the Equity Method	118
11	Investment Properties	122
12	Other Financial Assets	123
13	Property, Plant and Equipment	124
14	Intangible Assets	125
15	Defned Beneft Plan Asset	126
16	Other Assets	128
17	Trade and Other Payables	128
18	Borrowings and Financing Arrangements	129
19	Provisions	130
20	Other Financial Liabilities	131
21	Other Non Financial Liabilities	131
22	Defned Beneft Plan Liability	132
23	Issued Capital and Treasury Shares	133
24	Reserves	134
25	Retained Earnings	134
26	Minority Interests	135
27	Contingent Liabilities	135
28	Consolidated Entities	136
29	Segment Reporting	138
30	Capital Risk Management	140
31	International Currency Management
	and Financial Instruments	140
32	Commitments	148
33	Notes to the Statements of Cash Flows	149
34	Employee Benefts	150
35	Key Management Personnel Disclosures	156
36	Non Director Related Party Information	157
37	Event Subsequent to Balance Date	158
Directors’Declaration		159
Independent Auditor’s Report		160

2008 Annual Consolidated Financial Report Lend Lease Corporation 93

Consolidated Financial Statements

Income Statements

Year ended 30 June 2008

Income Statements Year ended 30 June 2008
			Consolidated		Company
			June 2008	June 2007	June 2008	June 2007
		Note	A$m	A$m	A$m	A$m
Revenue
Revenue from the sale of development properties		2a	805.3	1,036.3
Revenue from the provision of services		2b	13,569.5	12,948.2
Finance revenue		2c	96.9	101.8	4.3	14.7
Other revenue		2d	206.2	195.6	729.8	319.1
Total revenue			14,677.9	14,281.9	734.1	333.8
Other Income		3	70.9	173.3	6.0	3.2
Expenses
Retail activities			(130.9)	(66.2)
Communities activities
Cost of properties sold			(747.3)	(788.8)
Other expenses			(235.7)	(224.9)
Public Private Partnerships (PPP) activities
Cost of inventories sold			(813.1)	(634.5)
Other expenses			(95.3)	(71.8)
Investment Management activities			(53.3)	(35.1)
Project Management and Construction activities
Cost of inventories sold			(11,883.9)	(11,694.6)
Other expenses			(369.3)	(330.4)
Corporate and administrative activities expenses			(101.3)	(88.8)	(86.2)	61.8
Finance costs		4	(86.0)	(81.7)		(10.5)
Total expenses Share of proft of associates accounted for using			(14,516.1)	(14,016.8)	(86.2)	51.3
the equity method Share of proft of joint venture entities accounted		10a	65.1	141.1
for usingthe equitymethod		10b	23.7	48.5
Proft before tax			321.5	628.0	653.9	388.3
Income tax(expense)/revenue		5a	(62.5)	(127.8)	15.5	2.7
Proft after tax			259.0	500.2	669.4	391.0
Proft/(loss) after tax attributable to:
Members of Lend Lease Corporation Limited		25	265.4	497.5	669.4	391.0
Minorityinterests			(6.4)	2.7
Proft after tax			259.0	500.2	669.4	391.0
Basic Earnings Per Share
Shares excluding treasury shares	(cents)	6b	71.6	134.5
Shares on issue	(cents)	6b	66.2	124.3
Diluted Earnings Per Share
Shares excluding treasury shares	(cents)	6c	71.6	134.4
Shares on issue	(cents)	6c	66.2	124.2

The accompanying notes form part of these consolidated financial statements.

Balance Sheets

As at 30 June 2008

		Consolidated	Consolidated	Company	Company
		June 2008	June 2007	June 2008	June 2007
	Note	A$m	A$m	A$m	A$m
Current Assets
Cash and cash equivalents	7	842.8	550.1	18.5	2.0
Loans and receivables	8	2,437.4	2,211.5	3,154.6	2,484.5
Inventories	9	773.1	911.2
Current tax assets	5b		7.1
Other fnancial assets	12	84.7	646.5	18.5	1.8
Other assets	16	43.2	187.8
Total current assets		4,181.2	4,514.2	3,191.6	2,488.3
Non Current Assets
Loans and receivables	8	415.1	312.5	63.6	112.5
Inventories	9	1,332.3	1,326.1
Investments accounted for using
the equity method	10	1,047.2	1,126.5
Investment properties Other fnancial assets	11 12	190.4 391.4	256.6 437.8	1,384.7	1,558.6
Deferred tax assets	5c	121.5	415.9	21.5	32.0
Property, plant and equipment	13	145.2	116.9	0.2	0.2
Intangible assets Defned beneft plan asset	14 15	730.1 28.7	788.1 23.1	28.7	23.1
Other assets	16	11.8	18.5
Total non current assets		4,413.7	4,822.0	1,498.7	1,726.4
Total assets		8,594.9	9,336.2	4,690.3	4,214.7
Current Liabilities
Trade and other payables	17	3,717.9	3,612.0	1,537.2	1,431.2
Provisions	19	215.4	250.7	43.3	45.7
Current tax liabilities	5b	53.7		74.6	27.6
Other fnancial liabilities Other non fnancial liabilities	20 21	0.1 0.3	5.6 0.5	9.3	11.1
Total current liabilities		3,987.4	3,868.8	1,664.4	1,515.6
Non Current Liabilities
Trade and other payables Borrowings and fnancing arrangements	17 18	80.8 929.3	217.0 1,076.2
Provisions	19	45.3	13.4	0.7	0.4
Deferred tax liabilities	5c	188.4	504.5		8.7
Other fnancial liabilities Other non fnancial liabilities Defned beneftplan liability	20 21 22	200.8 0.8 118.1	256.7 0.2 156.4	51.1	69.8
Total non current liabilities		1,563.5	2,224.4	51.8	78.9
Total liabilities		5,550.9	6,093.2	1,716.2	1,594.5
Net assets		3,044.0	3,243.0	2,974.1	2,620.2
Equity
Issued capital	23	854.7	854.4	854.7	854.4
Treasury shares	23	(62.6)	(67.4)	(87.6)	(92.5)
Reserves	24	(9.6)	117.1	192.5	173.5
Retained earnings	25	2,205.5	2,257.4	2,014.5	1,684.8
Total equity attributable to equity holders
of the parent		2,988.0	3,161.5	2,974.1	2,620.2
Minorityinterests	26	56.0	81.5
Total equity		3,044.0	3,243.0	2,974.1	2,620.2

The accompanying notes form part of these consolidated financial statements.

2008 Annual Consolidated Financial Report Lend Lease Corporation 95

Consolidated Financial Statements continued

Statements of Changes in Equity

Year ended 30 June 2008

		Consolidated	Consolidated		Company	Company
		June 2008	June	2007	June 2008	June 2007
	Note	A$m		A$m	A$m	A$m
Issued Capital and Treasury Shares
Issued Capital
Opening balance at beginning of fnancial year		854.4	834.7		854.4	834.7
Ordinaryshare issues		0.3		19.7	0.3	19.7
Closingbalance at end of fnancialyear	23	854.7	854.4		854.7	854.4
Treasury Shares
Opening balance at beginning of fnancial year		(67.4)	(64.5)		(92.5)	(89.6)
Treasury shares acquired		(1.6)		(6.7)	(1.5)	(6.7)
Treasuryshares vested		6.4		3.8	6.4	3.8
Closingbalance at end of fnancialyear	23	(62.6)	(67.4)		(87.6)	(92.5)
Total issued capital and treasuryshares		792.1	787.0		767.1	761.9
Reserves
Fair Value Revaluation Reserve
Opening balance at beginning of fnancial year		130.2	101.7		1.3	0.8
Revaluation gain taken to equity (net of tax)		3.2	162.1		(1.4)	0.5
Transfer of fair value revaluation reserve to income
statement on asset disposal (net of tax)		(58.5)	(133.4)
Effect of foreign exchange rate/other movements		6.2		(0.2)
Closingbalance at end of fnancialyear	24a	81.1	130.2		(0.1)	1.3
Hedging Reserve
Opening balance at beginning of fnancial year1 Movements attributable to effective cash fow		(9.9)		5.0
hedges taken to equity (net of tax)		(5.4)	(20.8)
Transfer of hedging reserve to income statement				(1.1)
Effect of foreign exchange rate/other movements		1.9		7.0
Closingbalance at end of fnancialyear	24b	(13.4)		(9.9)	–	–
Foreign Currency Translation Reserve
Opening balance at beginning of fnancial year		(50.7)		4.4
Movements attributable to translation and hedging
of foreign operations		(112.3)	(55.1)
Transfer of foreign currency translation reserve to
income statement on return of capital		0.8
Closingbalance at end of fnancialyear	24c	(162.2)	(50.7)		–	–
Equity Compensation Reserve
Opening balance at beginning of fnancial year		12.3		7.6	12.3	7.6
Movements attributable to unallocated
treasuryshares		21.3		4.7	21.3	4.7
Closingbalance at end of fnancialyear	24d	33.6		12.3	33.6	12.3
Other Compensation Reserve
Opening balance at beginning of fnancial year		55.3		55.3	55.3	55.3
Movements attributable to sale of unallocated
treasuryshares		(0.9)			(0.9)
Closingbalance at end of fnancialyear	24e	54.4		55.3	54.4	55.3

1 The June 2007 opening hedging reserve of A$(14.4) million has been adjusted to A$5.0 million to align inconsistent accounting policies between associates (held by UK PPP) and Lend Lease. The adjustment also impacts retained earnings.

The accompanying notes form part of these consolidated financial statements.

		Consolidated	Consolidated	Company	Company
		June 2008	June 2007	June 2008	June 2007
	Note	A$m	A$m	A$m	A$m
Capital Reserve
Openingbalance at beginningof fnancialyear		104.6	104.6	104.6	104.6
Closingbalance at end of fnancialyear	24f	104.6	104.6	104.6	104.6
Minority Interest Acquisition Reserve
Opening balance at beginning of fnancial year		(124.7)	(109.5)
Movements attributable to acquisition			(20.0)
Effect of foreign exchange rate movements		17.0	4.8
Closingbalance at end of fnancialyear	24g	(107.7)	(124.7)	–	–
Total reserves	24	(9.6)	117.1	192.5	173.5
Retained Earnings
Opening balance at beginning of fnancial year1 Proft attributable to members of Lend Lease		2,257.4	1,998.8	1,684.8	1,550.0
Corporation Limited		265.4	497.5	669.4	391.0
Dividends forgone pursuant to Share Election Plan			6.5		6.5
Dividends paid		(341.0)	(263.9)	(341.0)	(263.9)
Dividends on treasury shares		25.5	20.2
Gain on utilisation of treasury shares recognised
directly in retained earnings		1.8	0.8	1.3	1.2
Other		(3.6)	(2.5)
Closingbalance at end of fnancialyear	25	2,205.5	2,257.4	2,014.5	1,684.8
Minority Interests
Opening balance at beginning of fnancial year Share of movement in proft for fnancial year		81.5 (6.4)	73.2 2.7
Movements attributable to capital contributions/
acquisitions		3.1	14.9
Movements attributable to disposal		(12.4)	(5.1)
Effect of foreign exchange rate/other movements		(9.8)	(4.2)
Closingbalance at end of fnancialyear	26	56.0	81.5	–	–
Total equity		3,044.0	3,243.0	2,974.1	2,620.2
Total Recognised Income and Expense
for Financial Year
Non proft items recognised directly in equity Proft after tax for fnancialyear		(114.5) 259.0	86.2 500.2	(1.4) 669.4	0.5 391.0
		144.5	586.4	668.0	391.5
Total income and expense for fnancial year
attributable to:
Members of Lend Lease Corporation Limited		158.4	583.8	668.0	391.5
Minorityinterests		(13.9)	2.6
		144.5	586.4	668.0	391.5

1 The June 2007 opening retained earnings of A$2,018.2 million has been adjusted to A$1,998.8 million to align inconsistent accounting policies between associates (held by UK PPP) and Lend Lease. The adjustment also impacts the hedging reserve.

The accompanying notes form part of these consolidated financial statements.

2008 Annual Consolidated Financial Report Lend Lease Corporation 97

Consolidated Financial Statements continued

Statements of Cash Flows

Year ended 30 June 2008

Statements of Cash Flows Year ended 30 June 2008
		Consolidated		Company
		June 2008	June 2007	June 2008	June 2007
	Note	A$m	A$m	A$m	A$m
Cash Flows from Operating Activities
Cash receipts in the course of operations		13,590.1	12,526.2	54.6	60.9
Cash payments in the course of operations		(13,370.4)	(12,388.5)	(55.5)	(85.4)
Property development receipts	33b	804.7	1,169.5
Property development expenditure	33b	(976.8)	(1,007.7)
Interest received1		150.9	52.1	4.4	14.9
Interest paid		(78.2)	(48.3)		(10.6)
Dividends/distributions received		118.0	134.7	674.7	255.9
Income tax received/(paid) in respect
of operations		30.4	(80.8)	27.2	7.8
Net cashprovided byoperatingactivities	33a	268.7	357.2	705.4	243.5
Cash Flows from Investing Activities
Sale/redemption of investments		1,075.5	567.6
Acquisition of investments		(509.7)	(843.9)	(18.2)
Acquisition of investment properties		(1.2)	(55.0)
Acquisition of business	33c	(17.0)
Loans to associates/related parties		(88.2)	(15.8)
Acquisition of minority interest		(17.7)	(1.4)
Disposal of consolidated entities
(net of cash disposed)	28b	(6.6)	26.4	173.9
Sale of property, plant and equipment		0.1	509.0
Acquisition of property, plant and equipment		(58.0)	(567.4)	(0.1)	(0.1)
Acquisition of intangible assets		(12.7)	(2.2)
Net cash provided by/(used in) investing
activities		364.5	(382.7)	155.6	(0.1)
Cash Flows from Financing Activities
Proceeds from borrowings			1,567.2
Repayment of borrowings			(1,287.8)
Dividends paid (Increase)/decrease in fnancing of consolidated		(315.5)	(237.2)	(341.0)	(257.4)
entities				(503.5)	14.5
Increase in capital of minorityinterest		3.1	14.9
Net cash (used in)/provided by fnancingactivities		(312.4)	57.1	(844.5)	(242.9)
Other Cash Flow Items
Effect of foreign exchange rate movements
on cash and cash equivalents		(28.1)	(41.0)
Net increase/(decrease) in cash
and cash equivalents		292.7	(9.4)	16.5	0.5
Cash and cash equivalents at beginning of fnancialyear		550.1	559.5	2.0	1.5
Cash and cash equivalents at end of fnancialyear	7	842.8	550.1	18.5	2.0

1 June 2008 includes interest from the Australian Taxation Office (ATO) following a favourable judgement in the Federal Court on a tax dispute with the ATO.

The accompanying notes form part of these consolidated financial statements.

Notes to the Consolidated Financial Statements

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 2008 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 21 August 2008.

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, fair value through profit or loss investments, 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. Refer to the specific accounting policies in Notes 1. and 31e. for a summary of the basis of valuation of assets and liabilities measured at fair value.

The preparation of a financial report that complies with AASBs 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.

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.

The Group invests in special purpose entities (SPE) for trading and investment purposes. The SPE are consolidated if the substance of the relationship with the Group is such that the Group controls the SPE. The Group will also consolidate the SPE if the Group is expected to obtain the majority of the benefits and/or is exposed to the majority of the residual risks of the SPE or its net assets.

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 2008 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:

Revised AASB 3 ‘Business Combinations’ and AASB 2008-3 ‘Amendments to Australian Accounting Standards arising from AASB 3 and AASB 127’ .

AASB 3 and AASB 2008-3 are applicable to annual reporting periods beginning on or after 1 July 2009. These standards change the application of acquisition accounting for business combinations and the accounting for noncontrolling (minority) interests.

AASB 8 ‘Operating Segments’ and AASB 2007-3 ‘Amendments to Australian Accounting Standards arising from AASB 8 ’.

AASB 8 and AASB 2007-3 are applicable to annual reporting periods beginning on or after 1 January 2009. These standards replace the presentation requirements of segment reporting in AASB 114 ‘Segment Reporting’. The standards may result in different segments, segment results and different types of information being reported in the segment note of the financial report. The possible changes to disclosure are not expected to affect the financial results of the Group.

Revised AASB 101 ‘Presentation of Financial Statements’ (September 2007) and AASB 2007-8 ‘Amendments to Australian Accounting Standards arising from AASB 101’ .

AASB 101 and AASB 2007-8 are applicable to annual reporting periods beginning on or after 1 January 2009. These standards introduce the statement of comprehensive income and make changes to the statement of changes in equity. These standards are only concerned with disclosure in the financial report and application will not affect the financial results of the Group.

– Revised AASB 123 ‘Borrowing Costs’ and AASB 2007-6 ‘Amendments to the Australian Accounting Standards arising from AASB 123 ’. AASB 123 and AASB 2007-6 are applicable to annual reporting periods beginning on or after 1 January 2009. These standards remove the option to expense borrowing costs and requires borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset to be capitalised. The potential effect of AASB 123 and AASB 2007-6 on the Group’s future earnings is yet to be determined.

2008 Annual Consolidated Financial Report Lend Lease Corporation 99

Notes to the Consolidated Financial Statements continued

1. Significant Accounting Policies continued

c. New Accounting Standards continued

Revised AASB 127 ‘ Consolidated and Separate Financial Statements’ and AASB 2008-3 ‘Amendments to Australian Accounting Standards arising from AASB 3 and AASB 127 ’.

AASB 127 and AASB 2008-3 are applicable to annual reporting periods beginning on or after 1 July 2009. These standards change the accounting for investments in subsidiaries, in particular the impact of changing ownership interests in subsidiaries.

– Revised AASB 2008-1 ‘ Amendments to Australian Accounting Standard - Share-based Payments: Vesting Conditions and Cancellations’. AASB 2008-1 is applicable to annual reporting periods beginning on or after 1 January 2009. The standard changes the measurement of share-based payments that contain non-vesting conditions. The potential effect of AASB 2008-1 on the Group’s financial statements is yet to be determined.

AASB 2008-5 ‘Amendments to Australian Accounting Standards arising from the Annual Improvements Project’.

AASB 2008-5 is applicable to annual reporting periods beginning on or after 1 January 2009. The standard amends several AASBs terms of accounting recognition, measurement and presentation. The potential effect of AASB 2008-5 on the Group’s financial statements is yet to be determined.

AASB Interpretation 12 ‘Service Concession Arrangements’.

AASB Interpretation 12 is applicable to annual reporting periods beginning on or after 1 January 2008. The Interpretation addresses the accounting for service concession operators, but not grantors, for public to private service concession arrangements. The Group has a project team that is assessing the implications of these changes on the Private Finance Initiatives (PFIs) in Europe. The Group has not yet quantified the expected effect of the adoption of the Interpretation.

d. Revenue, Other Income and Profits

Revenue and Profits from the Sale of Development Properties

Revenue and profits from the sale of development properties are 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 from 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 expected sales values of properties when the fees will be received.

Dividends

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

Rental Income

Rental income is recognised in the income statement on a straight line 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.

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.

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Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but are intended to be settled on a net basis or be realised simultaneously.

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.

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. Cash flows 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 (held for trading) or if so designated by management either to eliminate a measurement or recognition inconsistency, or where a group of financial assets is managed, and its performance is evaluated, on a fair value basis (at inception). 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.

2008 Annual Consolidated Financial Report Lend Lease Corporation101

Notes to the 1. Significant Accounting Policies Consolidated continued Financial g. Investments continued Statements Recognition and Measurement Criteria continued Purchases and sales of investments are

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 de-recognised 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.

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. Refer to Note 31e. for a summary of the basis of valuation of investments measured at fair value.

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, recent prices on less active markets or capitalised income projections. Capitalised income projections are based on a perpetuity of net operating income using a capitalisation rate derived from market evidence.

The 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. 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, as a result of its voting rights, has significant influence, but not control, over financial and operating policies. Investments in associates are accounted for using the equity method. 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.

Venture Capital Exemption

Investments held by Lend Lease Ventures’

investment portfolio are carried at fair value even though the Group may have significant influence over those entities. This accounting is permitted by AASB 128 ‘Investments in Associates’ which requires investments held by venture capital organisations to be excluded from its scope when those investments are designated as at ‘fair value through profit or loss’ from inception. The investments made by Lend Lease Ventures may be considered to be venture capital in nature due to management of the investments on a portfolio basis, and is unrelated to the Group’s key business activities. The application of this exemption is assessed on each investment made by Lend Lease Ventures.

102

Refer Note 1g. for analysis of recognition and measurement criteria of investments classified and measured at ‘fair value through profit or loss’.

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.

The Group’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.

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; and
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 recoverable amount 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 the recoverable amount, the Directors have regard to independent valuations obtained in accordance with Accounting Policy Note 1h., the market conditions affecting each property and the underlying strategy for selling the property.

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 self constructed 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.

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.

2008 Annual Consolidated Financial Report Lend Lease Corporation103

Notes to the Consolidated Financial Statements continued

1. Significant Accounting Policies continued

o. Property, Plant and Equipment continued

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 straight-line 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 ten 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 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 (three to five 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 straight line basis over the estimated useful lives of the intangible assets. Management rights of an unlisted property fund are amortised over the useful life of ten years. The retirement rights to manage the Lutanda village acquired have an indefinite useful life and are not amortised but are tested annually for impairment. The recoverable amount of management agreements and other intangible assets is assessed using independent valuations or alternative calculation methods such as discounted cash flow projections. The rights are for an unlimited period and there is no foreseeable limit to the period over which the asset is expected to generate net cash inflows.

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 trustee-administered 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.

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 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 straight line basis over the vesting period.

104

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 on-costs. 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 on-costs 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

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.

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.

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.

2008 Annual Consolidated Financial Report Lend Lease Corporation105

Notes to the Consolidated Financial Statements continued

1. Significant Accounting Policies continued

u. Foreign Currency Translation continued

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.

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 revaluation 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.

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.

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 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.

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.

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 forward exchange contracts is their value at the current quoted forward price at the balance sheet date.

106

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.

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.

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.

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.

2008 Annual Consolidated Financial Report Lend Lease Corporation107

Notes to the Consolidated Financial Statements continued

1. Significant Accounting Policies continued

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 31a. ‘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 and Management Agreements

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. The recoverable amount of management agreements are assessed annually in accordance with Accounting Policy Note 1q.

Valuation of Assets and Recoverable Amounts

The Group assesses the fair value of certain assets by using 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, including the deferred management rights receivable. For investment properties and inventories refer to Accounting Policy Notes 1h. and 1n. Refer to Note 31e. for a summary of the basis of valuation of financial assets measured at fair value.

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’.

Share Based Compensation

The Group assesses the fair value of its cash settled and equity settled share based compensation plans. The fair value assigned represents an estimate of the value of the award to employees, which requires judgements on Lend Lease’s share price and whether vesting conditions will be satisfied. Refer to Note 1r. for the accounting policy for share based compensation.

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; and
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.

108

Consolidated	Consolidated	Company	Company
June 2008	June 2007	June 2008	June 2007
A$m	A$m	A$m		A$m
2. Revenue Total comprising: a. Revenue from the Sale of Development Properties 805.3 b. Revenue from the Provision of Services Retail 55.5 Communities 86.4 Public Private Partnerships 943.0 Investment Management 58.8 Project Management and Construction 12,425.8	1,036.3 42.3 52.5 745.6 52.2 12,055.6	–		–
Total revenue from theprovision of services 13,569.5	12,948.2	–		–
c. Finance Revenue Interest Income Related party Consolidated entities		0.8		12.9
Associates and joint venture entities 21.4 Other corporations1 65.7	14.5 83.8	3.5		1.8
87.1	98.3	4.3		14.7
Interest discounting 9.8	3.5	–		–
Total fnance revenue2 96.9	101.8	4.3		14.7
d. Other Revenue Dividend Income Related party Consolidated entities Associates and joint venture entities 1.1 Other corporations 48.8	0.6	648.0 0.1		240.2
49.9	0.6	648.1		240.2
Other Rental income and sub–lease rents 76.0 Hotel revenue 52.0 Distributions received 15.1	85.5 49.1 28.4	26.6		18.6
Related party Consolidated entities – corporate management fees		41.6		47.7
Consolidated entities – guarantee fees Other 13.2	32.0	13.4 0.1		12.6
156.3	195.0	81.7		78.9
Total other revenue 206.2	195.6	729.8		319.1
Total revenue 14,677.9	14,281.9	734.1		333.8

1 June 2007 includes interest from the ATO following a favourable judgement in the Federal Court on a tax dispute with the ATO (refer to Note 16. ‘Other Assets’).

2 A$0.9 million relates to financial assets classified as fair value through profit or loss.

2008 Annual Consolidated Financial Report Lend Lease Corporation109

Notes to the Consolidated Financial Statements continued

Consolidated	Consolidated		Company	Company
June 2008	June	2007	June 2008	June	2007
A$m		A$m	A$m		A$m
3. Other Income
Net gain on disposal/redemption of available for sale fnancial assets
Australian Prime Property Fund 45.5
Lend Lease Global Properties Fund, SICAF 9.5 Asia Pacifc Investment Company 8.1	133.4
Cohen & Steers, SICAV 3.6
Other 0.3		1.7
67.0	135.1		–		–
Net gain on disposal of investments using the equity
method		12.6
Fair value gain on remeasurement of
investment properties		2.8
Fair value gain on derivative contracts held for trading
(excluding foreign exchange derivatives) 3.7
Net gain on disposal of consolidated entities 0.1		22.6
Related party Consolidated entities – amortisation of fnancial
guarantee contract liabilities			6.0		3.2
Other 0.1		0.2
Total other income 70.9	173.3		6.0		3.2
4. Other Operating (Income)
and Expenses
(Proft) before income tax has been determined after:
Depreciation and amortisation
Depreciation of property, plant and equipment 24.0		24.1	0.1		0.3
_Less:_Capitalised depreciation (2.1)		(2.1)
Amortisation of management agreements 2.9		2.9
Amortisation of other intangibles 2.2		1.0
Total depreciation and amortisation 27.0		25.9	0.1		0.3
Finance costs
Non interest fnance costs 3.6		4.1	–		–
Interest fnance costs
Related party
Consolidated entities Associates and joint venture entities 1.4 Other corporations 76.7		1.5 77.1			10.5
_Less:_Capitalised interest fnance costs1 (1.3)		(1.1)
76.8		77.5	–		10.5
Interest discounting 5.6		0.1
Total fnance costs2 86.0		81.7	–		10.5
Net loss on sale ofproperty, plant and equipment 0.3		1.2	–		–

1 The capitalisation rate used to determine the amount of borrowing costs capitalised is 8.1% (June 2007: 8.0%).

2 A$86.0 million relates to financial assets and liabilities not classified as fair value through profit or loss.

110

			Consolidated	Consolidated		Company	Company
			June 2008	June	2007	June 2008	June 2007
		Note	A$m		A$m	A$m	A$m
Operating lease expense
Operating lease rental expense			52.6		55.0
Operatinglease equipment expense			5.9		5.8
Total operatinglease expense			58.5		60.8	–	–
Employee beneft expenses1			865.8	804.6		24.5	38.1
Superannuation accumulationplan expense			19.3		17.0	0.6	0.6
Net defned beneft plan expense impacting all
business segments is as follows:
Current service cost			38.9		45.9	5.8	6.5
Interest on obligation			45.8		44.5	6.0	5.3
Expected return on plan assets			(53.4)	(49.3)		(9.0)	(7.9)
Actuarial gain recognised			(2.4)		(0.2)	(2.4)	(0.2)
Past service cost			0.4		0.4	0.4	0.4
Loss on curtailments					0.5
Total net defned beneftplan expense	15d,22d		29.3		41.8	0.8	4.1
Net foreign exchange(gain)/loss			(3.0)	(12.0)		1.8	(0.1)
Bad and doubtful debts impairment loss net of
provisions raised/(written back)
Related party
Consolidated entities							(80.0)
Associates and joint venture entities			0.3		0.1
Other			11.5		(5.3)
			11.8		(5.2)	–	(80.0)
Fair value loss on remeasurement of
investmentproperties			38.2		–	–	–
Net impairment/provisions raised/
(written back) relating to:
Property inventories2			126.7		1.1
Investments accounted for using the
equity method3			3.0		(5.8)
Property, plant and equipment			0.4
Available for sale investments			2.8
Investments held at cost Employee benefts			35.1		31.2	2.0	(56.6) 1.9
Construction risks			(2.2)		10.0
Otherprovisions			11.3		11.9	13.2	10.3

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

2 Includes A$121.5 million provision for diminution on UK Urban Communities.

3 Impairment of A$3.0 million includes A$(6.9) million reversal relating to the Jacksons Landing project in Pyrmont, Australia (June 2007: A$(5.7) million reversal).

	Consolidated	Consolidated		Company	Company
	June 2008	June	2007	June 2008	June 2007
	A$000s	A$000s		A$000s	A$000s
Auditors’ Remuneration
Amounts received or due and receivable by the auditors
of Lend Lease Corporation for:
Audit and Review of Financial Reports	6,816	6,798		1,573		1,390
Other Services
International assignees tax services	26		202
Tax services	58		456			69
Accounting advice			82			80
Other services	152		260
	236	1,000		–		149

2008 Annual Consolidated Financial Report Lend Lease Corporation111

Notes to the Consolidated Financial Statements continued

Consolidated	Consolidated	Company	Company
June 2008	June 2007	June 2008	June 2007
A$m	A$m	A$m		A$m
5. Taxation a. Income Tax Expense Recognised in the Income Statement Current Tax Expense Current year 91.9	100.8	(9.7)		(3.8)
Adjustments for prior years (18.5) Benefts of tax losses recognised (7.8)	(15.6) (3.2)	(1.2) (6.6)		(4.1)
65.6	82.0	(17.5)		(7.9)
Deferred Tax Expense Origination and reversal of temporary differences (4.5) Reduction in tax rate 1.4	43.8 2.0	2.0		5.2
Total income tax expense/(revenue) 62.5	127.8	(15.5)		(2.7)
Reconciliation of Income Tax Expense/(Revenue) Proft before tax 321.5	628.0	653.9		388.3
Income tax using the domestic corporation tax rate (30.0%) 96.5	188.4	196.2		116.5
Non assessable dividends (14.9)	(0.7)	(202.4)		(77.6)
Non assessable income (8.4) Profts accounted for using the equity method 1.0 Amortisation expense 0.9 Non allowable expenses 11.3	(44.6) (6.4) 0.9 14.2	2.0		(39.8)
Expenses allowable for tax but not for accounting (2.3) Recovery of tax losses (53.9) Write off/(recovery) of tax temporary differences 39.7 Variation in tax rates 8.7 Income tax expense relating to wholly owned Australian subsidiaries	(2.3) (31.3) (0.1) 20.3	(6.5) (7.1) 111.2		73.7
Recovery of income tax expense from wholly owned Australian subsidiaries		(111.2)		(73.7)
Other 2.4	5.0	3.5		2.3
Overprovided inprioryears (18.5)	(15.6)	(1.2)		(4.1)
62.5	127.8	(15.5)		(2.7)
Deferred Tax Recognised Directly in Equity Relating to: Fair value movement on available for sale fnancial assets (15.4) Net gain on hedge of investments accounted for using the equitymethod 1.7	18.3 2.4	(0.2)		0.1
(13.7)	20.7	(0.2)		0.1
b. Current Tax (Liabilities)/Assets (53.7)	7.1	(74.6)		(27.6)

Current tax liabilities represent the amount of income taxes payable in respect of current and prior financial years where income taxes payable exceeds payments. At 30 June 2008, income taxes payable exceeded payments for the Group.

112

c. Deferred Tax Assets and Liabilities

	Consolidated	Consolidated			Company	Company
June	2008	June	2007	June	2008	June	2007
Assets	Liabilities	Assets	Liabilities	Assets	Liabilities	Assets	Liabilities
A$m	A$m	A$m	A$m	A$m	A$m	A$m	A$m
Recognised Deferred Tax Assets and Liabilities Deferred tax assets and liabilities are attributable to the following: Loans and receivables 11.4	(30.4)	8.9	(19.7)				(0.2)
Inventories 25.3 Other fnancial assets 0.6	(176.0) (38.0)	62.5 2.3	(185.0) (49.8)		(0.3)		(0.5)
Other assets Investments accounted for using the equity method 4.4 Investment properties Property, plant and equipment 12.8 Defned beneft plan asset Trade and other payables 72.4	(171.1) (2.0) (0.3) (8.6) (0.6)	0.1 6.4 17.4 74.9	(20.7) (191.4) (2.9) (0.6) (6.9) (0.1)	14.2	(8.6)	18.2	(6.9)
Provisions 66.2 Other fnancial and non fnancial liabilities 4.1 Defned beneft plan liability 33.1 Unused revenue tax losses recognised 112.0 Items with a tax base but no carryingvalue 35.4	(0.1) (17.5)	63.1 17.2 43.9 72.1 47.1	(12.4) (15.0)	13.1 4.5	(1.4)	13.8	(1.1)
Total deferred tax assets/ (liabilities) 377.7	(444.6)	415.9	(504.5)	31.8	(10.3)	32.0	(8.7)
Deferred tax assets/(liabilities) set off (256.2)	256.2			(10.3)	10.3
Net deferred tax assets/ (liabilities) 121.5	(188.4)	415.9	(504.5)	21.5	–	32.0	(8.7)

2008 Annual Consolidated Financial Report Lend Lease Corporation113

Notes to the Consolidated Financial Statements continued

5. Taxation continued

c. Deferred Tax Assets and Liabilities continued

Financial Statements continued
1 July	Recognised	Recognised		30 June	1 July	Recognised	Recognised		30 June
Consolidated 2007 A$m	in Income A$m	in Equity A$m	FX/Other A$m	2008 A$m	2006 A$m	in Income A$m	in Equity A$m	FX/Other A$m	2007 A$m
Recognised Deferred Tax Assets and Liabilities continued Movement in temporary differences during the fnancial year: Loans and receivables (10.8)	(7.3)	(0.4)	(0.5)	(19.0)	0.2	(11.0)			(10.8)
Inventories (122.5) Other fnancial assets (47.5)	(42.1) (6.2)	15.4	13.9 0.9	(150.7) (37.4)	(110.7) (45.0)	(16.9) 15.2	(18.3)	5.1 0.6	(122.5) (47.5)
Other assets (20.6)	20.6				(19.7)	(1.7)		0.8	(20.6)
Investments accounted for using the equity method (185.0)	(4.9)	(1.3)	24.5	(166.7)	(170.4)	(24.5)	(2.4)	12.3	(185.0)
Investment properties (2.9)	0.8		0.1	(2.0)	(27.4)	24.5			(2.9)
Property, plant and equipment 16.8 Defned beneft plan asset (6.9)	(2.2) (1.7)		(2.1)	12.5 (8.6)	13.4 (6.5)	4.0 (0.4)		(0.6)	16.8 (6.9)
Trade and other payables 74.8	1.7		(4.7)	71.8	69.7	(0.1)		5.2	74.8
Provisions 63.1 Other fnancial and non fnancial liabilities 4.8 Defned beneft plan liability 43.9	7.3 (0.5) (5.3)		(4.2) (0.3) (5.5)	66.2 4.0 33.1	70.4 28.9 52.4	2.2 (23.8) (8.0)		(9.5) (0.3) (0.5)	63.1 4.8 43.9
Unused revenue tax losses recognised1 72.1	51.9		(12.0)	112.0	52.6	24.2		(4.7)	72.1
Items with a tax base but no carryingvalue 32.1	(9.0)		(5.2)	17.9	65.5	(29.5)		(3.9)	32.1
Total deferred tax assets/(liabilities) (88.6)	3.1	13.7	4.9	(66.9)	(26.6)	(45.8)	(20.7)	4.5	(88.6)
Company Movement in temporary differences during the fnancial year: Loans and receivables (0.2) Other fnancial assets (0.5) Defned beneft plan asset (6.9)	0.2 (1.7)	0.2		(0.3) (8.6)	(0.1) (0.4) (6.5)	(0.4)	(0.1)	(0.1)	(0.2) (0.5) (6.9)
Trade and other payables 18.2	(4.0)			14.2	19.2	(1.0)			18.2
Provisions 13.8	(0.7)			13.1	16.5	(2.7)			13.8
Items with a tax base but no carrying value (1.1) Deferred tax assets and liabilities transferred to the Company from wholly owned Australian subsidiaries in the Australian Tax Consolidated Group due to tax consolidation	4.2			3.1	1.1	(1.1)		(1.1)	(1.1)
Total deferred tax assets/(liabilities) 23.3	(2.0)	0.2	–	21.5	29.8	(5.2)	(0.1)	(1.2)	23.3

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

	Consolidated	Consolidated		Company	Company
	June 2008	June	2007	June 2008	June	2007
	A$m		A$m	A$m		A$m
Unrecognised Deferred Tax Assets
Deferred tax assets have not been recognised in respect of the following items:
Capital losses	92.1		99.2	9.1		15.4
Revenue losses	63.6	122.3
Deductible temporarydifferences	91.6		35.8
Total unrecognised deferred tax assets	247.3	257.3		9.1		15.4

114

Temporary differences associated with investments in subsidiaries within the Company have not been recognised. The unrecognised deferred tax asset of A$247.3 million includes A$60.4 million that will expire by 2026.

by 2026.
		Franked
		Amount	Company
	Cents	Per Share	June 2008	June 2007
	Per Share	%	A$m		A$m
6. Dividends and Earnings Per Share
a. Dividends1
Interim Dividend
December 2007 – paid 26 March 2008	43	40	172.5
December 2006 – paid 27 March 2007	35	50			140.0
Final Dividend
June 2008 – declared subsequent to reporting date
(payable 26 September 2008)2	34	45	136.4
June 2007 –paid 12 September 2007	42	50			168.5
			308.9		308.5

1 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.

2 No provision for this dividend has been recognised in the balance sheet at 30 June 2008 as it was declared after the end of the financial period.

Dividend Franking

The final dividend of 34 cents per share declared since 30 June 2008 will be 45% franked. The interim dividend paid on 26 March 2008 (43 cents per share) was 40% franked.

The dividend franking account balance at 30 June 2008 is A$86.4 million based on a 30% tax rate (30 June 2007: A$56.2 million). This is calculated after adjusting for franking credits which will arise from the payment of income tax provided in the financial statements, tax losses utilised in the current financial year and expected franking debits arising from refunds of tax in dispute. It excludes the A$26.3 million (June 2007: A$36.1 million) franking debit impact of the proposed dividend of A$136.4 million (June 2007: A$168.5 million) and includes the franking debits which arose from the refund of tax which was in dispute after the court ruled in favour of Lend Lease during the year in relation to the sale of Westpac shares in 1996 (refer to Note 16. ‘Other Assets’).

‘Other Assets’).
			Consolidated
		June	2008	June	2007
		Shares		Shares
		Excluding		Excluding
		Treasury	Shares	Treasury	Shares
		Shares	on Issue	Shares	on Issue
b. Basic Earnings Per Share (EPS)
Weighted average number of ordinaryshares	m	370.8	401.1	369.9	400.4
Earningsper share	cents	71.6	66.2	134.5	124.3
c. Diluted Earnings Per Share (DEPS)
Weighted average number of ordinary shares	m	370.8	401.1	369.9	400.4
Adjustment for dilutive effect of potential
share issue	m			0.21	0.21
Weighted average number of ordinary shares
for diluted earningsper share	m	370.8	401.1	370.1	400.6
Diluted earningsper share	cents	71.6	66.2	134.4	124.2

1 Relates to the Lend Lease Corporation shares issued during the June 2007 financial year as part consideration for the minority interest shareholdings in Crosby Lend Lease Group Limited.

	Consolidated	Consolidated	Company	Company
	June 2008	June 2007	June 2008	June	2007
	A$m	A$m	A$m		A$m
7. Cash and Cash Equivalents
Cash	281.9	271.8	18.5		2.0
Short term investments	560.9	278.3
Total cash and cash equivalents	842.8	550.1	18.5		2.0

Short term investments earn variable rates of interest which averaged 6.1% per annum during the year ended 30 June 2008 (30 June 2007: 5.3%).

Negotiable instruments with a maturity greater than three months but less than 12 months (June 2008: A$28.5 million; June 2007: A$361.5 million) are classified as ‘Available for Sale’, ‘Held to Maturity’ and ‘Fair Value Through Profit or Loss’ (refer to Note 12. ‘Other Financial Assets’). These negotiable instruments have an average maturity of seven months.

2008 Annual Consolidated Financial Report Lend Lease Corporation115

Notes to the Consolidated Financial Statements continued

	Consolidated	Consolidated		Company	Company
	June 2008	June	2007	June 2008	June 2007
	A$m		A$m	A$m	A$m
8. Loans and Receivables
Current–Measured at Amortised Cost
Trade debtors	2,000.2	1,900.9
_Less:_Impairment	(19.3)		(8.5)
Related party	1,980.9	1,892.4		–	–
Consolidated entities1				3,152.3	2,481.7
Associates and joint venture entities	77.8		57.8
Managed property funds	29.4		23.1
Deferred management fee receivable – Retirement by
Design	3.3		1.8
Other receivables	348.3	240.7		2.3	2.8
_Less:_Impairment	(2.3)		(4.3)
	2,437.4	2,211.5		3,154.6	2,484.5
Non Current–Measured at Amortised Cost
Loans to employees	0.7		0.8
Related party
Consolidated entities				63.5	108.2
Associates and joint venture entities	326.9	236.9
_Less:_Impairment	(16.0)	(17.6)
Deferred management fee receivable–Retirement by
Design	25.4		18.9
Other receivables	78.3		73.5	0.1	4.3
_Less:_Impairment	(0.2)
	415.1	312.5		63.6	112.5
Total loans and receivables – measured at amortised
cost	2,852.5	2,524.0		3,218.2	2,597.0

1 Includes working capital balances with controlled entities and reflects the funding of general working capital items. All working capital balances are non interest bearing and repayable on demand.

During the financial year ended 30 June 2008, the Group earned fee income of A$3.0 million (30 June 2007: A$15.0 million) relating to loans and receivables.

The ageing of trade debtors as at the reporting date is, current: A$1,696.0 million (30 June 2007: A$1,664.9 million); past due: A$304.2 million (30 June 2007: A$236.0 million). ‘Past due’ is defined under accounting standards to mean any amount outstanding for one or more days after the contractual due date. Of the total trade debtors 4.8% (30 June 2007: 4.2%) are aged greater than 90 days. Other than trade debtors, no other loans and receivables are considered past due at 30 June 2008 (30 June 2007: A$nil).

	Consolidated	Consolidated		Company	Company
	June 2008	June	2007	June 2008	June	2007
	A$m		A$m	A$m		A$m
Impairment Carrying amount at beginning of fnancial year	30.4	39.2
Bad and doubtful debts impairment loss net of provisions
raised/(written back)	11.4		(6.5)
Effect of foreign exchange rate movements/other
movements	(4.0)		(2.3)
Carrying amount at end of fnancial year	37.8	30.4		–		–
Total impairment as a percentage of total loans and
receivables	1.3%	1.2%

The impairment provision relates to specific loans and receivables that have been identified as being impaired. The credit quality of assets is monitored on an ongoing basis.

During the financial year ended 30 June 2008, the Group renegotiated the terms of an other receivable with a carrying value of A$76.5 million (30 June 2007: A$nil). If it had not been for this renegotiation, A$49.5 million of this amount would be aged greater than 90 days. No impairment loss has been recognised in relation to this renegotiated receivable (30 June 2007: A$nil).

116

		Consolidated	Consolidated	Company	Company
		June 2008	June 2007	June 2008	June	2007
	Note	A$m	A$m	A$m		A$m
9. Inventories
Current
Construction work in progress		335.9	242.4
Property held for sale at the lower of cost and net
realisable value		437.2	668.8
Total current		773.1	911.2	–		–
Non Current
Property held for sale at the lower of cost and net
realisable value		1,332.3	1,326.1
Total inventories		2,105.4	2,237.3	–		–
Property Held for Sale
Total property held for sale comprises:
Bluewater, Kent		520.7	596.1
Urban Communities, Australia		448.8	552.2
Urban Communities (Crosby), UK		386.7	481.2
Victoria Harbour, Melbourne		96.2	80.2
Stratford, UK		95.8	6.2
Hyatt Coolum Resort, Sunshine Coast		57.3	56.2
First Base Adelaide Wharf, UK			53.2
Senior Living Projects, Australia		51.1	48.1
Other		112.9	121.5
Totalpropertyheld for sale		1,769.5	1,994.9	–		–
Construction Work in Progress
Construction work in progress comprises:
Contract costs incurred to date		49,311.9	46,074.8
Proft recognised to date		1,977.1	1,949.7
_Less:_Progress billings received and receivable		51,289.0	48,024.5	–		–
on completed contracts		(52,110.4)	(48,959.5)
Net construction work inprogress		(821.4)	(935.0)	–		–
Amounts due from customers – inventories1		335.9	242.4
Amounts due to customers – tradepayables2	17	(1,157.3)	(1,177.4)
		(821.4)	(935.0)	–		–
Advances on construction projects in progress
included in trade and other payables		920.2	1,035.4	–		–
Retentions on construction projects included in
progress billings		627.7	531.2	–		–

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

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

117

2008 Annual Consolidated Financial Report Lend Lease Corporation

Notes to the Consolidated Financial Statements continued

			Consolidated	Consolidated		Company	Company
			June 2008	June	2007	June 2008	June		2007
		Note	A$m		A$m	A$m			A$m
10. Investments Accounted for Using
the Equity Method
Non Current
Associates
Investment in associates			822.2	916.9
_Less:_Impairment			(5.4)		(5.6)
		10a	816.8	911.3		–			–
Joint Venture Entities
Investment in joint venture entities			247.2	229.3
_Less:_Impairment			(16.8)	(14.1)
		10b	230.4	215.2		–			–
Total investments accounted for using the equity
method			1,047.2	1,126.5		–			–
			Consolidated			Consolidated
			Share of Proft/(Loss)			Net
Interest			After Tax			Book	Value
June 2008	June	2007	June 2008	June	2007	June 2008	June		2007
%		%	A$m		A$m	A$m			A$m
a. Associates Retail King of Prussia 50.0		50.0	20.5		92.4	421.7		483.8
Performance Retail Limited Partnership 33.3		33.3	(6.3)		6.0	80.1		104.8
CDR JV Ltd (313@Somerset, Singapore) 25.0		25.0				43.6			40.3
Other			0.1		(0.1)	6.6			6.0
			14.3		98.3	552.0		634.9
Communities Other			(2.7)		(1.3)	1.4			4.3
Public Private Partnerships1 Lancashire Waste Share Capital 50.0		50.0				15.2			9.0
Catalyst Healthcare (Manchester) 50.0		50.0	2.4		2.5	4.8			1.5
Catalyst Investment Holdings Limited 50.0		50.0	17.1		11.2				6.7
Catalyst Healthcare (Roehampton) 50.0 Other		50.0	2.0 0.7		1.0 2.0	0.7			1.2
			22.2		16.7	20.7			18.4
Investment Management Lend Lease Overgate Partnership 30.7 Asia Pacifc Investment Company No. 2 Limited 21.1		30.7 21.1	(1.2) 27.0		10.0 18.2	114.0 107.1		143.0 87.3
Lend Lease Communities Fund 1 20.8		20.8	0.3		(0.5)	18.0			17.3
Other			(0.1)		(2.7)	6.1			8.0
			26.0		25.0	245.2		255.6
Project Management and Construction Networks Alliance Partnership 42.0		42.0	5.3		2.8	0.5			0.3
Other					(0.4)	2.4			3.4
			5.3		2.4	2.9			3.7
Total			65.1	141.1		822.2		916.9
_Less:_Impairment						(5.4)			(5.6)
Total associates			65.1	141.1		816.8		911.3

1 Lend Lease provides service concession arrangements, originating through PPPs, 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 draw-downs from the relevant government authorities.

118

	Consolidated	Consolidated
	June 2008	June 2007
	A$m	A$m
Lend Lease’s Share of the Results of Associates
Revenue	293.1	167.1
Fair value revaluations1	6.4	18.1
Expenses	(221.2)	(99.5)
Proft before tax	78.3	85.7
Income tax expense2	(6.3)	(6.5)
Proft after tax	72.0	79.2
Adjustment due to a difference in accounting policies3	(6.9)	61.9
Share of associates’proft – accounted for usingthe equitymethod	65.1	141.1
Movements in Carrying Amounts of Associates
Carrying amount at beginning of fnancial year Investment in associates acquired during fnancial year Share of associates’ proft	911.3 65.1	787.0 83.5 141.1
Contributions to associates	9.8	3.9
Capital redemptions by associates	(1.6)	(4.2)
Distributions received from associates	(47.2)	(37.3)
Disposal of associates		(0.7)
Other adjustments(includingeffect of foreign exchange rate movements)4	(120.6)	(62.0)
Carryingamount at end of fnancialyear	816.8	911.3
Lend Lease’s Share of Balance Sheet of Associates
Current assets	485.2	212.0
Non current assets	2,419.3	1,947.0
Total assets	2,904.5	2,159.0
Current borrowings	15.7	29.4
Current other liabilities	160.2	42.7
Non current borrowings	2,166.9	1,382.1
Non current other liabilities	134.6	241.0
Total liabilities	2,477.4	1,695.2
Net assets5	427.1	463.8
Other adjustments
Goodwill	4.5	5.2
Impairment	(5.4)	(5.6)
Adjustment due to differences in accounting policies6	414.6	453.4
Other	(24.0)	(5.5)
Net assets – adjusted usingthe equitymethod5	816.8	911.3
Commitments7
Share of associates’ capital expenditure and lease commitments contracted but not
provided for and payable
Due within one year	6.7	3.5
Due between one and fveyears	8.3	7.8
	15.0	11.3

1 Reflects fair value revaluations for Lend Lease Overgate Partnership of A$6.8 million loss (June 2007: A$3.8 million gain), Performance Retail Limited Partnership of A$9.5 million loss (June 2007: A$0.7 million gain) and Asia Pacific Investment Company 2 of A$22.7 million gain (June 2007: A$13.6 million gain).

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 Includes fair value revaluation for King of Prussia of A$6.9 million loss (June 2007: A$62.3 million gain).

4 Primarily relates to foreign exchange movements of A$105.5 million (June 2007: A$46.6 million).

5 In the June 2007 breakdown certain related assets and liabilities have been offset. If the gross position were to be reflected this would increase both the total assets and the total liabilities by A$807.1 million, with no change to net assets. The borrowings reclassified relate to long term PFI debt with a maturity in excess of 20 years.

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

7 The capital commitments of Lend Lease in relation to investments in associates are now disclosed in Note 32d. ‘Commitments – Investments’.

2008 Annual Consolidated Financial Report Lend Lease Corporation119

Notes to the Consolidated Financial Statements continued

10. Investments Accounted for Using the Equity Method continued

				Consolidated	Consolidated		Consolidated	Consolidated
	Interest			Share of Proft/(Loss) After Tax			Net Book Value
	June 2008	June	2007	June 2008	June	2007	June 2008	June	2007
	%		%	A$m		A$m	A$m		A$m
b. Joint Venture Entities
Retail
Preston Tithebarn Unit Trust	50.0			1.3			33.1
Warrington Retail Limited
Partnership	50.0		50.0	(22.6)		2.1	90.8	112.4
				(21.3)		2.1	123.9	112.4
Communities
Caroline Springs Joint Venture	50.0		50.0	15.1		13.0	23.9		23.6
Mawson Lakes Economic
Development Project	50.0		50.0	10.7		10.2	14.0		18.7
Pyrmont Trust (Jacksons Landing)1	50.0		50.0	(0.4)		(2.2)	18.9		21.8
Mirvac Lend Lease Village	50.0		50.0	6.0		3.3	7.8		7.8
Lend Lease GPT (Rouse Hill)	50.0			(0.3)			6.7
Forest Gardens Residential Land
Development	50.0		50.0	0.9			6.3		6.8
Hungate (York) Regeneration Ltd	33.3		33.3				5.4		6.2
Other				3.3		14.1	9.3		10.2
				35.3		38.4	92.3		95.1
Investment Management						1.2			3.0
Project Management and
Construction
Majadahonda Hospital	25.0		25.0	1.4		2.3	12.0		9.5
Hunt–Mets Stadium	45.0		45.0	3.1		1.7	5.8		1.8
Waste 2 Resources Project
Lancashire Ltd Liability Partnership	50.0		50.0	2.6			6.6
Other				2.6		2.8	6.6		7.5
				9.7		6.8	31.0		18.8
Total				23.7		48.5	247.2	229.3
_Less:_Impairment1							(16.8)	(14.1)
Totaljoint venture entities				23.7		48.5	230.4	215.2

1 An impairment reversal of A$6.9 million relating to Pyrmont Trust (Jacksons Landing) has been recognised during the period (June 2007: impairment reversal A$5.7 million). This reflects the achievement of several milestones for the project during the period, which has provided further evidence that the commercial assessment of this project is achievable.

120

	Consolidated	Consolidated
	June 2008	June 2007
	A$m	A$m
Lend Lease’s Share of the Results of Joint Venture Entities
Revenue	425.6	293.0
Fair value revaluations1	(31.1)
Expenses	(369.8)	(241.8)
Proft before tax	24.7	51.2
Income tax expense2	(1.2)	(1.1)
Proft after tax	23.5	50.1
Other adjustments
Amortisation of fair value adjustments	(0.9)	(1.1)
Other	1.1	(0.5)
Share ofjoint ventures’proft – accounted for usingthe equitymethod	23.7	48.5
Movements in Carrying Amount of Joint Venture Entities
Carrying amount at beginning of fnancial year Investment in joint ventures disposed during fnancial year Share of joint venture entities’ proft	215.2 (3.5) 23.7	212.8 48.5
Capital redemptions by joint venture entities	(26.4)	(20.4)
Distributions received from joint venture entities Investment in joint venture entities acquired during fnancial year	(19.7) 34.0	(66.9) 47.2
Contributions to joint venture entities	9.8
Net impairment provision (raised)/written back	(3.0)	5.8
Other adjustments(includingeffect of foreign exchange rate movement)	0.3	(11.8)
Carryingamount at end of fnancialyear	230.4	215.2
Lend Lease’s Share of Balance Sheet of Joint Venture Entities
Current assets	469.7	327.4
Non current assets	465.2	349.9
Total assets	934.9	677.3
Current borrowings	15.5	33.1
Current other liabilities	185.6	144.8
Non current borrowings	366.7	107.2
Non current other liabilities	145.6	174.3
Total liabilities	713.4	459.4
Net assets	221.5	217.9
Other adjustments
Fair value adjustments on acquisition	2.5	3.5
Impairment	(16.8)	(14.1)
Other	23.2	7.9
Net assets – adjusted usingthe equitymethod	230.4	215.2
Commitments
Share of joint ventures’ capital expenditure and lease commitments contracted but
not provided for and payable
Due within one year Due between one and fve years Due later than fveyears	0.6 4.2	2.4 1.5
	4.8	3.9

1 Reflects fair value revaluation loss for Warrington Retail Limited Partnership.

2 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’).

2008 Annual Consolidated Financial Report Lend Lease Corporation121

Notes to the Consolidated Financial Statements continued

Consolidated	Consolidated	Company	Company
June 2008	June 2007	June 2008	June	2007
A$m	A$m	A$m		A$m
11. Investment Properties Senior Living Properties1 Forest Hills Serviced Apartments 6.8 TrinityGreen	7.1 0.3
6.8	7.4	–		–
Retail Properties Chelmsford Meadows Shopping Centre 169.2 Pakenham Place ShoppingCentre 14.4	233.0 16.2
183.6	249.2	–		–
Total investmentproperties 190.4	256.6	–		–
Reconciliations Reconciliations of the carrying amount for investment properties are set out below: Carrying amount at beginning of fnancial year 256.6 Acquisitions Additions 1.5 Disposals Fair value adjustments (38.2) Effect of foreign exchange rate movement (29.5)	287.0 54.7 0.3 (84.6) 2.8 (3.6)
Carryingamount at end of fnancialyear 190.4	256.6	–		–

1 Relates to retirement villages held under leasehold arrangements that do not satisfy the revenue recognition criteria under AASB 118 ‘Revenue’. There is an offsetting financial liability in Note 20. ‘Other Financial Liabilities’ and therefore no profit or loss impact.

Refer to Accounting Policy Note 1h. for the basis of valuation of investment properties.

	Consolidated	Consolidated		Company	Company
	June 2008	June	2007	June 2008	June	2007
	A$m		A$m	A$m		A$m
Amounts Recognised in Income Statement
for Investment Properties1
Rental income	13.5		16.5
Direct operating expenses from properties that
generated rental income	(2.8)		(4.8)
	10.7		11.7	–		–
Leases as Lessor
The future minimum lease payments receivable under non
cancellable leases are as follows:
Less than one year Between one and fve years Later than fveyears	10.1 33.8 39.8		10.7 35.1 42.8
	83.7		88.6	–		–

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

122

	Consolidated	Consolidated		Company	Company
	June 2008	June	2007	June 2008	June 2007
	A$m		A$m	A$m		A$m
12. Other Financial Assets
Current
a. Measured at Fair Value
Available for Sale
Babcock & Brown Communities Group	17.3			17.3
Lend Lease Global Properties, SICAF	15.5		26.5
Negotiable instruments		335.7
Australian Prime Property Fund		256.6
Other	14.7		1.8	1.2		1.8
	47.5	620.6		18.5		1.8
Fair Value Through Proft or Loss –
Designated at Initial Recognition
Negotiable instruments	23.1		–	–		–
Derivatives
Derivative contracts held for trading	8.7		0.1	–		–
b. Measured at Amortised Cost
Held to Maturity
Negotiable instruments	5.4		25.8	–		–
Total current	84.7	646.5		18.5		1.8
Non Current
a. Measured at Fair Value
Available for Sale
Australian Prime Property Fund	207.5	184.1
Lend Lease Retail Partnership	62.7		82.1
Lend Lease Core Plus Fund	38.2		24.3
Cohen & Steers, SICAV			47.6
Asia Pacifc Investment Company			17.7
Other	71.6		75.4
	380.0	431.2		–		–
Fair Value Through Proft or Loss –
Designated at Initial Recognition
Unlisted equity investments	7.0
Negotiable instruments	4.4
	11.4		–	–		–
b. Measured at Amortised Cost
Held to Maturity
Negotiable instruments	–		6.6	–		–
c. Investments Held at Cost
Shares in consolidated entities				2,041.4	2,215.3
_Less:_Impairment				(656.7)		(656.7)
	–		–	1,384.7	1,558.6
Total non current	391.4	437.8		1,384.7	1,558.6
Total other fnancial assets	476.1	1,084.3		1,403.2	1,560.4

123

2008 Annual Consolidated Financial Report Lend Lease Corporation

Notes to the Consolidated Financial Statements continued

Consolidated	Consolidated		Company	Company
June 2008	June	2007	June 2008	June	2007
A$m		A$m	A$m		A$m
13. Property, Plant and Equipment Land 27.2		9.8	–		–
Buildings and leasehold improvements at cost 83.9 Accumulated depreciation (25.6)	81.5 (26.0)
58.3		55.5	–		–
Plant and equipment at cost 137.1	135.2		0.4		0.7
Accumulated depreciation (79.3)	(83.7)		(0.2)		(0.5)
57.8		51.5	0.2		0.2
Leased plant and equipment at cost Accumulated amortisation		0.3 (0.2)
–		0.1	–		–
Assets under construction 1.9 Accumulated depreciation
1.9		–	–		–
Totalproperty, plant and equipment 145.2	116.9		0.2		0.2
Reconciliations Reconciliations of the carrying amounts for each class of property, plant and equipment are set out below: Land Carrying amount at beginning of fnancial year1 9.8 Additions2 18.2 Disposals2 Effect of foreign exchange rate movements/other (0.8)	8.5 533.4 (508.6) (23.5)
Carryingamount at end of fnancialyear 27.2		9.8	–		–
Buildings and Leasehold Improvements Carrying amount at beginning of fnancial year3 55.5 Additions 10.2 Disposals (0.1) Disposals of consolidated entities Depreciation (5.6) Effect of foreign exchange rate movements/other (1.7)		52.6 15.2 (0.5) (3.7) (6.1) (2.0)
Carryingamount at end of fnancialyear 58.3		55.5	–		–
Plant and Equipment Carrying amount at beginning of fnancial year4 51.5		48.9	0.2		0.4
Additions 28.6		22.7	0.1		0.1
Disposals (1.2) Disposals of consolidated entities Depreciation (18.4) Impairment (0.4) Effect of foreign exchange rate movements/other (2.3)	(1.4) (0.8) (18.0) 0.1		(0.1)		(0.3)
Carryingamount at end of fnancialyear 57.8		51.5	0.2		0.2
Leased Plant and Equipment Carrying amount at beginning of fnancial year5 0.1 Effect of foreign exchange rate movements/other (0.1)		0.1
Carryingamount at end of fnancialyear –		0.1	–		–
Assets in the Course of Construction Carrying amount at beginning of fnancial year Additions6 1.2 Effect of foreign exchange rate movements/other 0.7
Carryingamount at end of fnancialyear 1.9		–	–		–
Total carryingamount 145.2	116.9		0.2		0.2

1 The carrying amount at 1 July 2006 of A$8.5 million represents costs only.

2 June 2007 addition and disposal represents 313@Somerset, Singapore.

3 The carrying amount at 1 July 2006 of A$52.6 million represents A$76.4 million of costs and A$23.8 million of accumulated depreciation.

4 The carrying amount at 1 July 2006 of A$48.9 million represents A$146.2 million of costs and A$97.3 million of accumulated depreciation.

5 The carrying amount at 1 July 2006 of A$0.1 million represents A$0.3 million of costs and A$0.2 million of accumulated depreciation. 6 Represents costs in relation to the proposed extension of the Chelmsford Meadows Shopping Centre. These costs are classified as Property, Plant and Equipment under AASB 116 ‘Property, Plant and Equipment’ until construction/development is complete, when it is then classified as Investment Property.

124

		Consolidated	Consolidated	Company	Company
		June 2008	June 2007	June 2008	June	2007
	Note	A$m	A$m	A$m		A$m
14. Intangible Assets
Goodwill	14a	683.4	764.7
Management agreements	14b	31.4	18.3
Other intangibles	14c	15.3	5.1
Total intangible assets		730.1	788.1	–		–
a. Goodwill
Bovis Lend Lease Group		449.4	506.7
Crosby Lend Lease Group Delfn Lend Lease Group		153.5 64.7	177.5 64.7
Lend Lease Development Group		15.8	15.8
		683.4	764.7	–		–
Accumulated impairment		–	–	–		–
Totalgoodwill		683.4	764.7	–		–
Reconciliations
Reconciliations of the carrying amounts for each
category of goodwill are set out below:
Bovis Lend Lease Group
Carrying amount at beginning of fnancial year		506.7	524.3
Effect of foreign exchange rate movements		(57.3)	(17.6)
Carryingamount at end of fnancialyear		449.4	506.7	–		–
Crosby Lend Lease Group
Carrying amount at beginning of fnancial year		177.5	179.7
Effect of foreign exchange rate movements		(24.0)	(2.2)
Carryingamount at end of fnancialyear		153.5	177.5	–		–
Delfn Lend Lease Group
Carryingamount at beginningof fnancialyear		64.7	64.7
Carryingamount at end of fnancialyear		64.7	64.7	–		–
Lend Lease Development Group
Carryingamount at beginningof fnancialyear		15.8	15.8
Carryingamount at end of fnancialyear		15.8	15.8	–		–
Totalgoodwill		683.4	764.7	–		–

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 2008	Asia Pacifc A$m	Americas A$m	Europe A$m	Total A$m
Project Management and Construction	27.4	148.1	273.9	449.4
Communities	80.5		153.5	234.0
	107.9	148.1	427.4	683.4
June 2007
Project Management and Construction	27.4	171.6	307.7	506.7
Communities	80.5		177.5	258.0
	107.9	171.6	485.2	764.7

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 projected growth rates. The growth rate reflects the forecast 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 30 June 2008.

125

2008 Annual Consolidated Financial Report Lend Lease Corporation

Notes to the Consolidated Financial Statements continued

14. Intangible Assets continued

14. Intangible Assets continued	14. Intangible Assets continued
Consolidated June 2008 June		2007	Company June 2008 June	2007
A$m		A$m	A$m	A$m
b. Management Agreements Management agreements 45.4 Accumulated amortisation (14.0)	29.4 (11.1)
Total management agreements 31.4		18.3	–	–
Reconciliation Reconciliation of the carrying amounts of management agreements are set out below: Carrying amount at beginning of fnancial year1 18.3 Additions 12.7 Amortisation (2.9) Other 3.3		21.2 (2.9)
Carryingamount at end of fnancialyear 31.4		18.3	–	–
c. Other Intangibles Other intangibles 19.8 Accumulated amortisation (4.5)		8.0 (2.9)
Total other intangibles 15.3		5.1	–	–
Reconciliation Reconciliation of the carrying amounts of other intangibles are set out below: Carrying amount at beginning of fnancial year2 5.1 Additions 12.7 Amortisation (2.2) Effect of foreign exchange rate movements (0.3)		4.0 2.2 (1.0) (0.1)
Carryingamount at end of fnancialyear 15.3		5.1	–	–

1 The carrying amount at 1 July 2006 of A$21.2 million represents A$29.4 million of costs and A$8.2 million of accumulated amortisation. 2 The carrying amount at 1 July 2006 of A$4.0 million represents A$5.9 million of costs and A$1.9 million of accumulated amortisation.

Consolidated	Consolidated	Company	Company
June 2008	June 2007	June 2008	June 2007
A$m	A$m	A$m	A$m
15. Defned Beneft Plan Asset1 a. Balance Sheet Amounts The amounts recognised in the balance sheet are determined as follows: Fair value of plan assets 156.3 Present value of defned beneft obligations (126.4)	167.3 (116.1)	156.3 (126.4)	167.3 (116.1)
Unrecognised actuarial gains (1.4)	(28.7)	(1.4)	(28.7)
Unrecognised past service cost 0.2	0.6	0.2	0.6
Recognised asset for defned beneft obligations 28.7	23.1	28.7	23.1
b. Reconciliation of the Fair Value of Plan Assets Fair value of plan assets at beginning of fnancial year 167.3	147.4	167.3	147.4
Expected return on plan assets 9.0	7.9	9.0	7.9
Actuarial (losses)/gains (19.2)	17.2	(19.2)	17.2
Contributions by Group companies 6.4	5.5	6.4	5.5
Contributions by plan participants 3.4	2.8	3.4	2.8
Taxes and premiums paid (1.5)	(1.4)	(1.5)	(1.4)
Transfers in 0.9	0.5	0.9	0.5
Contributions to accumulation fund (0.9) Benefts paid (9.1)	(1.3) (11.3)	(0.9) (9.1)	(1.3) (11.3)
Fair value ofplan assets at end of fnancialyear 156.3	167.3	156.3	167.3

126

	Consolidated	Consolidated		Company	Company
	June 2008	June	2007	June 2008	June 2007
	A$m		A$m	A$m		A$m
c. Reconciliation of the Present Value
of Funded Obligations
Present value of funded obligations at beginning of fnancial year	116.1	110.8		116.1		110.8
Current service cost	5.8		6.5	5.8		6.5
Interest cost on beneft obligation	6.0		5.3	6.0		5.3
Contributions by plan participants	3.4		2.8	3.4		2.8
Actuarial losses	5.7		4.2	5.7		4.2
Taxes and premiums paid	(1.5)		(1.4)	(1.5)		(1.4)
Transfers in	0.9		0.5	0.9		0.5
Contributions to accumulation fund Benefts paid	(0.9) (9.1)	(1.3) (11.3)		(0.9) (9.1)		(1.3) (11.3)
Present value of funded obligations at end of fnancialyear	126.4	116.1		126.4		116.1
d. Expense Recognised in the
Income Statement
Current service cost	5.8		6.5	5.8		6.5
Interest on obligation	6.0		5.3	6.0		5.3
Expected return on plan assets	(9.0)		(7.9)	(9.0)		(7.9)
Actuarial gain recognised	(2.4)		(0.2)	(2.4)		(0.2)
Past service cost	0.4		0.4	0.4		0.4
Net defned beneftplan expense	0.8		4.1	0.8		4.1
e. Actual Return on Plan Assets	(10.2)		25.1	(10.2)		25.1
1 Relates to the Lend Lease Superannuation Fund (Australia).

Consolidated	Consolidated		Company	Company
June 2008	June	2007	June 2008	June 2007
%		%	%	%
f. Categories of Plan Assets Cash 5.0		4.0	5.0	4.0
Equity instruments1 51.0		53.0	51.0	53.0
Fixed interest securities 40.0		39.0	40.0	39.0
Property 4.0		4.0	4.0	4.0
100.0	100.0		100.0	100.0
g. Principal Actuarial Assumptions Discount rate (net) 5.9		5.4	5.9	5.4
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

For the financial year ending 30 June 2009, total employer contributions to the plan are expected to be A$6.3 million.

A$6.3 million.
		Consolidated
	June 2008	June 2007	June	2006	June 2005
	A$m	A$m		A$m	A$m
i. Historical Summary3
Plan assets	156.3	167.3	147.4		139.8
Defned beneft plan obligation	(126.4)	(116.1)	(110.8)		(111.3)
Surplus	29.9	51.2		36.6	28.5
Experience(losses)/gains arisingonplan assets	(19.2)	17.2		9.4	11.3
Experience (losses)/gains arising on plan liabilities	(8.3)	(6.8)		(4.4)	0.1

1 The fair value of plan assets includes Lend Lease shares to the value of A$0.2 million (June 2007: A$0.4 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 ‘First-time Adoption of Australian Equivalents to International Reporting Standards’ paragraph 20A. and only disclosed June 2005, June 2006 and June 2007 comparative information, rather than the previous four annual reporting periods as required under AASB 119 ‘Employee Benefits’ paragraph 120A.(p).

2008 Annual Consolidated Financial Report Lend Lease Corporation127

Notes to the Consolidated Financial Statements continued

	Consolidated June 2008 June	Consolidated June 2008 June	2007	Company June 2008 June	2007
	A$m		A$m	A$m	A$m
16. Other Assets
Current
Prepayments	27.3		47.6
Deferred bid costs on projects at preferred bidder status	13.1		28.2
Other1	2.8	112.0
	43.2	187.8		–	–
Non Current
Prepayments	11.0		17.5
Other	0.8		1.0
	11.8		18.5	–	–
Total other assets	55.0	206.3		–	–

1 Included in June 2007 was A$109.5 million in respect of an amended assessment issued by the ATO relating to a Westpac warrants issue. The balance was paid by the ATO following the withdrawal of its appeal in August 2007 relating to the Federal Court’s decision on Lend Lease’s sale of Westpac shares.

on Lend Lease’s sale of Westpac shares.	on Lend Lease’s sale of Westpac shares.
Consolidated		Company
June 2008	June 2007	June 2008	June	2007
A$m	A$m	A$m		A$m
17. Trade and Other Payables Current–Measured at Cost or Amortised Cost Trade creditors 2,348.9	2,300.1	43.5		56.3
Construction revenue – amounts due to customers 1,157.3 Deposits received in advance 7.2 Unearned income 6.4 Unearned premium reserve1 Insurance claim reserve1 8.4 Related party Consolidated entities2	1,177.4 22.6 5.0 3.6 6.3	1,485.6	1,371.4
Associates and joint venture entities 18.9 Deferred land payments 93.2 Other 77.6	8.8 53.6 34.6	8.1		3.5
3,717.9	3,612.0	1,537.2	1,431.2
Non Current–Measured at Amortised Cost Insurance claim reserve1 13.4 Unearned income 1.0 Related party Associates and joint venture entities 19.2 Deferred land payments 11.2 Other 36.0	21.4 1.3 35.1 110.0 49.2
80.8	217.0	–		–
Total trade and other payables – measured at cost or amortised cost 3,798.7	3,829.0	1,537.2	1,431.2

1 Unearned premium and insurance claim reserves relate to Lend Lease’s wholly owned special purpose captive insurance subsidiary. The ‘cost’ of the liability for outstanding claims (insurance claim reserves) is measured as the central estimate of the present value of expected future payments against claims incurred at the reporting date under insurance contracts issued by the special purpose captive insurance subsidiary. These expected future payments are discounted using a risk free rate. In the current period, the policy year was extended to run to 30 June 2008 and therefore there is no current unearned premium reserve at reporting date.

2 Related party payables include working capital balances with controlled entities and reflect the funding of general working capital items. All working capital balances are non interest bearing and repayable on demand.

128

Consolidated Company June 2008 June 2007 June 2008 June 2007 A$m A$m A$m A$m

	June 2008 A$m June 2007 A$m June 2008 A$m	June 2007 A$m
18. Borrowings and Financing
Arrangements
a. Borrowings–Measured at Amortised Cost
Non Current
Commercial notes	929.3 1,076.2
Total borrowings – measured at amortised cost	929.3 1,076.2 –	–
b. Finance Facilities
Lend Lease operating businesses have access
to the following lines of credit:
Bank Overdrafts
Facility available	20.0 20.0 20.0	20.0
Amount of facility used
Amount of facilityunused	20.0 20.0 20.0	20.0
Bank Credit Facilities
Facility available	788.6 968.6
Amount of facility used
Amount of facilityunused	788.6 968.6 –	–
Commercial Notes
Facility available	929.3 1,076.2
Amount of facility used	(929.3) (1,076.2)
Amount of facilityunused	– – –	–

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 in November 2010 of £350.0 million (A$729.2 million) in the UK, of which £nil million was drawn at 30 June 2008 (June 2007: £nil). 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 intends to hold these Commercial Notes to maturity.

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.

Consistent with prior year, the Group did not default on any obligations of principal or interest in relation to its borrowing and financing arrangements during the year.

Refer to Note 31d. for analysis of the management of the Group’s liquidity risk. The following schedule profiles the 30 June 2008 borrowings by currency and interest exposure.

	Interest Exposure Fixed A$m Floating A$m Total A$m	Currency US$ A$m £ A$m Total A$m
Less than one year Between one and fve years More than fve years	104.9 104.9 824.4 824.4	104.9 104.9 209.7 614.7 824.4
Total	929.3 – 929.3	314.6 614.7 929.3

2008 Annual Consolidated Financial Report Lend Lease Corporation129

Notes to the Consolidated Financial Statements continued

	Consolidated	Consolidated		Company	Company
	June 2008	June	2007	June 2008	June 2007
	A$m		A$m	A$m	A$m
19. Provisions
Current
Employee benefts	100.4		91.9	3.8	3.8
Construction risks1	73.2		79.8
Other2	41.8		79.0	39.5	41.9
	215.4	250.7		43.3	45.7
Non Current
Employee benefts	9.9		9.1	0.7	0.4
Other2	35.4		4.3
	45.3		13.4	0.7	0.4
Totalprovisions	260.7	264.1		44.0	46.1
Reconciliations
Reconciliations of the carrying amounts of each class of provision, except for employee benefts,
are set out below:
Current
Construction Risks
Carrying amounts at beginning of fnancial year Provisions (written back)/raised during fnancial year Payments made during fnancial year	79.8 (2.2) (3.8)	101.8 10.0 (16.6)
Other	7.8	(13.4)
Effect of foreign exchange rate movements	(8.4)		(2.0)
Carryingamount at end of fnancialyear	73.2		79.8	–	–
Other
Carrying amounts at beginning of fnancial year Provisions (written back)/raised during fnancial year Payments made during fnancial year	79.0 (12.6) (17.9)	93.6 11.8 (28.9)		41.9 13.2 (13.3)	51.8 10.3 (20.0)
Other	(3.1)		3.4
Effect of foreign exchange rate movements	(3.6)		(0.9)	(2.3)	(0.2)
Carryingamount at end of fnancialyear	41.8		79.0	39.5	41.9
Non Current
Other
Carrying amounts at beginning of fnancial year Provisions raised during fnancial year Payments made during fnancial year	4.3 30.9 (1.9)		5.6 0.1 (1.1)
Other	4.9
Effect of foreign exchange rate movements	(2.8)		(0.3)
Carryingamount at end of fnancialyear	35.4		4.3	–	–

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 represents future obligations on funding received for PPP 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.

130

Consolidated	Consolidated		Company	Company
June 2008	June	2007	June 2008	June	2007
A$m		A$m	A$m		A$m
20. Other Financial Liabilities Current a. Measured at Fair Value Derivatives Forward foreign exchange contracts – cash fow hedges 0.1 Forward foreign exchange contracts – held for trading Forward foreign exchange contracts – fair value hedges Related party Consolidated entities–fnancial guarantees		0.4 2.2 0.1	9.3		11.1
0.1		2.7	9.3		11.1
b. Measured at Amortised Cost Other		2.9
Total current 0.1		5.6	9.3		11.1
Non Current a. Measured at Fair Value Related party Consolidated entities – fnancialguarantees –		–	51.1		69.8
b. Measured at Amortised Cost Bluewater lease liability 171.1 Other 29.7	197.9 58.8
Total non current 200.8	256.7		51.1		69.8
Total other fnancial liabilities 200.9	262.3		60.4		80.9

Consistent with the prior year, the Group did not default on any obligations of principal or interest in relation to its other financial liabilities during the period. Refer to Note 31d. for analysis of the management of the Group’s liquidity risk.

	Consolidated	Consolidated		Company	Company
	June 2008	June	2007	June 2008	June	2007
	A$m		A$m	A$m		A$m
21. Other Non Financial Liabilities
Current
Deferred gain on foreign currency hedges			0.4
Other	0.3		0.1
	0.3		0.5	–		–
Non Current
Other	0.8		0.2
	0.8		0.2	–		–
Total other non fnancial liabilities	1.1		0.7	–		–

131

2008 Annual Consolidated Financial Report Lend Lease Corporation

Notes to the Consolidated Financial Statements continued

	Consolidated	Consolidated		Company	Company
	June 2008	June	2007	June 2008	June	2007
	A$m		A$m	A$m		A$m
22. Defned Beneft Plan Liability1
a. Balance Sheet Amounts
The amounts recognised in the balance sheet are
determined as follows:
Present value of defned beneft obligations	686.2	778.3
Fair value of plan assets	(627.7)	(661.0)
Unrecognised actuarial gains	59.6		39.1
Recognised liabilityfor defned beneft obligations	118.1	156.4		–		–
b. Reconciliation of the Present Value
of Defned Beneft Obligations
Present value of defned beneft obligations at beginning of fnancial year	778.3	722.4
Current service cost	33.1		39.4
Interest cost on beneft obligation	39.8		39.2
Contributions by plan participants	0.4		0.5
Actuarial (gains)/losses Benefts paid	(40.2) (18.9)	3.2 (16.7)
Curtailments			0.5
Effect of foreign exchange rate movements	(106.3)	(10.2)
Present value of defned beneft obligations at end of fnancialyear	686.2	778.3		–		–
c. Reconciliation of the Fair Value
of Plan Assets
Fair value of plan assets at beginning of fnancial year	661.0	572.2
Expected return on plan assets	44.4		41.4
Actuarial (losses)/gains	(12.7)		18.5
Contributions by Group companies	46.7		54.2
Contributions by plan participants Benefts paid	0.4 (18.9)	0.5 (16.7)
Effect of foreign exchange rate movements	(93.2)		(9.1)
Fair value ofplan assets at end of fnancialyear	627.7	661.0		–		–
d. Expense Recognised in the
Income Statement
Current service cost	33.1		39.4
Interest on obligation	39.8		39.2
Expected return on plan assets	(44.4)	(41.4)
Curtailment cost			0.5
Net defned beneftplan expense	28.5		37.7	–		–
e. Actual Return on Plan Assets	31.8		59.9	–		–
	Consolidated			Company
	June 2008	June	2007	June 2008	June	2007
	%		%	%		%
f. Categories of Plan Assets Equity instruments Debt instruments Other assets	56.0 42.0 2.0		66.0 28.0 6.0
	100.0	100.0		–		–
g. Principal Actuarial Assumptions
Discount rate (net)	6.3		5.5
Expected rate of return on assets2	7.0		7.5
Expected salary increase rate	5.3		4.7
Expected rate of pension increases:
Post April 2005	2.9		2.7
April 1997 to April 2005	3.8		3.2
Pre April 1997	2.9		2.7

1 Relates to the Bovis UK Pension Scheme.

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 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.

132

h. Employer Contributions

For the financial year ending 30 June 2009, total employer contributions to the plan are expected to be A$32.7 million (£15.7 million). Further employer contributions may be paid if there are any redundancies or augmentations during the year.

or augmentations during the year.
		Consolidated
	June 2008	June 2007	June 2006	June 2005
	A$m	A$m	A$m	A$m
i. Historical Summary1
Plan assets	627.7	661.0	572.2	454.2
Defned beneft plan obligation	(686.2)	(778.3)	(722.4)	(640.2)
(Defcit)	(58.5)	(117.3)	(150.2)	(186.0)
Experience(losses)/gains arisingonplan assets	(12.7)	18.5	36.8	32.3
Experience(losses)/gains arisingonplan liabilities	(0.9)	(7.1)	(21.1)	(23.9)

1 Lend Lease has taken the exemption provided under AASB 1 paragraph 20A. and only disclosed June 2005, June 2006 and June 2007 comparative information rather than the previous four annual reporting years as required under AASB 119 paragraph 120A.(p).

	Consolidated	Consolidated			Company	Company
June	2008	June	2007	June	2008	June	2007
No. of		No. of		No. of		No. of
Shares		Shares		Shares		Shares
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 fnancial year 401.1	854.4	399.7	834.7	401.1	854.4	399.7	834.7
Movements during fnancial year Issues for: Share Election Plan (SEP)1		0.4				0.4
Other2	0.3	1.0	19.7		0.3	1.0	19.7
Ordinary shares issued at end of fnancialyear 401.1	854.7	401.1	854.4	401.1	854.7	401.1	854.4

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 The June 2007 figure primarily relates to Lend Lease Corporation Limited shares issued as part of the consideration for the purchase of the minority interest shareholdings in Crosby Lend Lease Group Limited.

The Company’s SEP, Dividend Reinvestment Plan (DRP) and Share Purchase Plan remained suspended during the June 2008 financial year. The DRP will be reactivated in August 2008.

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 or par value in respect of its issued shares.

issued shares.
		Consolidated				Company
	June	2008	June	2007	June	2008	June	2007
	No. of		No. of		No. of		No. of
	Shares		Shares		Shares		Shares
	m	A$m	m	A$m	m	A$m	m	A$m
Treasury Shares1
Treasury shares at beginning of fnancial year Movements during fnancial year	30.5	67.4	30.4	64.5	30.5	92.5	30.4	89.6
Treasury shares acquired	0.1	1.6	0.4	6.7	0.1	1.5	0.4	6.7
Treasury shares vested	(0.5)	(6.4)	(0.3)	(3.8)	(0.5)	(6.4)	(0.3)	(3.8)
Treasury shares at end of fnancialyear	30.1	62.6	30.5	67.4	30.1	87.6	30.5	92.5

1 Represents unallocated Lend Lease shares 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 value of the treasury shares for the Lend Lease Group due to the elimination of the profit impact of transactions between consolidated employee benefit vehicles.

2008 Annual Consolidated Financial Report Lend Lease Corporation133

Notes to the Consolidated Financial Statements continued

		Consolidated	Consolidated	Company	Company
		June 2008	June 2007	June 2008	June 2007
	Note	A$m	A$m	A$m	A$m
24. Reserves
Fair value revaluation reserve	24a	81.1	130.2	(0.1)	1.3
Hedging reserve	24b	(13.4)	(9.9)
Foreign currency translation reserve	24c	(162.2)	(50.7)
Equity compensation reserve	24d	33.6	12.3	33.6	12.3
Other compensation reserve	24e	54.4	55.3	54.4	55.3
Capital reserve	24f	104.6	104.6	104.6	104.6
Minorityinterest acquisition reserve	24g	(107.7)	(124.7)
Total reserves		(9.6)	117.1	192.5	173.5

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, redeemed or impaired.

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.

value of the Group’s share of the net identifable assets of the acquired entity.	value of the Group’s share of the net identifable assets of the acquired entity.
Consolidated		Company
June 2008	June 2007	June 2008	June 2007
A$m	A$m	A$m	A$m
25. Retained Earnings Retained earnings at beginning of fnancial year1 2,257.4 Proft attributable to members of Lend Lease Corporation Limited 265.4	1,998.8 497.5	1,684.8 669.4	1,550.0 391.0
Dividends forgone pursuant to SEP	6.5		6.5
Gain on utilisation of treasury shares recognised directly in retained earnings2 1.8 Other (3.6)	0.8 (2.5)	1.3	1.2
2,521.0	2,501.1	2,355.5	1,948.7
Dividends paid (341.0) Dividends on treasury shares 25.5	(263.9) 20.2	(341.0)	(263.9)
Total retained earnings at end of fnancialyear 2,205.5	2,257.4	2,014.5	1,684.8

134

	Consolidated	Consolidated		Company	Company
	June 2008	June	2007	June 2008	June	2007
	A$m		A$m	A$m		A$m
26. Minority Interests
Minority interests comprise:
Chelmsford Meadows (25%)	41.5		58.3
Lend Lease Twin Waters (49%)	12.6		12.9
Lend Lease Rouse Hill (49%)3			9.4
Other	1.9		0.9
	56.0		81.5	–		–
Represented by:
Interest in retained proft at end of fnancial year	0.5		9.4
Interest in share capital	55.5		72.1
Total minorityinterests	56.0		81.5	–		–

2 Difference between the cost of the treasury shares to the Group and the fair value expensed to the income statement on settlement. 3 Lend Lease Rouse Hill was deconsolidated on 1 January 2008.

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 Management and Construction business as well as performance guarantees for certain Communities business commercial built - form development. 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 and the Lend Lease Employee Investment Trust (EIT). 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 “fact-intensive” 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 United States Court of Appeal for the Second Circuit declined to overturn the lower court’s ruling. The defendants have requested a re-hearing by the full Appellate Court of the immunity motion and are awaiting a response. Absent a re-hearing, the extent of Bovis Lend Lease’s entitlement to immunity will remain open, to be finally determined at a later date. 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.

2008 Annual Consolidated Financial Report Lend Lease Corporation135

Notes to the Consolidated Financial Statements continued

Year End Year End Foreign 30 June 2008 30 June 2007 Country of Ownership Ownership Country of Business Interest Interest Incorporation Operation % %

	Incorporation	Operation %	%
28. Consolidated Entities
a. Investments in Consolidated Entities
The material consolidated entities of the Group are:
Parent Entity
Lend Lease Corporation Limited	Australia
Project Management and Construction
Australia
Bovis Lend Lease Pty Limited	Australia	100	100
International
Bovis Lend Lease Holdings Limited	UK	UK 100	100
Bovis Lend Lease International Limited	UK	Malta 100	100
Bovis Lend Lease Limited	UK	UK 100	100
Bovis Lend Lease Overseas Holdings Limited	UK	UK 100	100
Bovis Lend Lease Holdings, Inc.	USA	USA 100	100
Bovis Lend Lease, Inc.	USA	USA 100	100
Bovis Lend Lease LMB, Inc.	USA	USA 100	100
ML Bovis Holdings Limited	USA	USA 100	100
Public Private Partnerships
International
Actus Lend Lease, LLC	USA	USA 100	100
Catalyst Lend Lease Ltd	UK	UK 100	100
Retail
International
Blueco Limited	UK	UK 100	100
Lend Lease Europe Holdings Limited	UK	UK 100	100
Lend Lease Europe Limited	UK	UK 100	100
Yarmouth Lend Lease King of Prussia, Inc.	USA	USA 100	100
Communities
Australia
Delfn Lend Lease Limited	Australia	100	100
Lend Lease Development Pty Limited	Australia	100	100
International
Crosby Lend Lease Group Limited	UK	UK 100	100
The Beaufort Homes Development Group Limited	UK	UK 100	100
The Crosby Group plc	UK	UK 100	100
Lend Lease Retail and Communities Inc.	USA	USA 100	100
Investment Management
Australia
Lend Lease Real Estate Investments Limited	Australia	100	100
Lend Lease Securities and Investment Pty Limited	Australia	100	100
International
Lend Lease Investment Management (formerly
LL Real Estate Investments Pte Limited)	Singapore	Singapore 100	100
Lend Lease (US) Holdings, Inc.	USA	USA 100	100
Lend Lease (US), Inc.	USA	USA 100	100
Lend Lease (US) Services, Inc.	USA	USA 100	100
Group Services
Australia
Lend Lease Finance Limited	Australia	100	100
Lend Lease International Pty Limited	Australia	100	100
Lend Lease Singapore Investments Pty Ltd	Australia	100	100
Lend Lease Ventures Pty Ltd	Australia	100
International
Lend Lease (US) Capital, Inc.	USA	USA 100	100
Lend Lease Europe Finance plc	UK	UK 100	100

136

Ownership Interest Consideration Disposed Date Received % Disposed A$m

		%	Disposed		A$m
b. Disposals June 2008
During the year, the consolidated entity disposed of its interest in
the following entity. The operating results to that date have been included in consolidated proft.
Communities
Lend Lease GPT (Rouse Hill) Pty Ltd		1	1 Jan 08		0.3
June 2007
Communities
Playbill Venue Management Pty Limited		50	9 Oct 06		0.9
RBD QLD Pty Ltd		100	21 Dec 06		32.0
Investment Management
Lend Lease Asian Retail Investment Fund		100	8 Jun 07
	Consolidated		Company
	June 2008	June 2007	June 2008	June	2007
	A$m	A$m	A$m		A$m
Details of the disposals of consolidated entities
are as follows:
Sale Proceeds
Cash received	0.3	31.2	173.9
Deferred proceeds		1.7
Carrying amount on disposal	(0.2)	(10.3)	(173.9)
Proft on disposal	0.1	22.6	–		–
Carrying Value of Net Assets of
Entities Disposed
Cash and cash equivalents	0.1	4.5
Receivables	0.1	1.2
Inventories	1.2
Other investments		84.6	173.9
Deferred tax assets	0.3
Other assets		11.2
Payables and provisions	(0.1)	(91.2)
Financial liabilities	(0.8)
Deferred tax liability	(0.3)
Other non fnancial liabilities	(0.3)
Net assets disposed	0.2	10.3	173.9		–
Cash Flows Resulting from Sale
Cash consideration	0.3	31.2	173.9
Cash disposed	(0.1)	(4.8)
Cash deconsolidated	(6.8)
Net(outfows)/infows of cash	(6.6)	26.4	173.9		–

2008 Annual Consolidated Financial Report Lend Lease Corporation137

Notes to the Consolidated Financial Statements continued

29. 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

Segment Revenue1, 2 June 2008 A$m June 2007 A$m	Other Unallocated Revenue1 Group Revenue June 2008 A$m June 2007 A$m June 2008 A$m June 2007 A$m	Segment Result Before Tax1, 2, 3 June 2008 A$m June 2007 A$m
Segment Retail 130.7 131.6 Communities 946.2 1,158.3 Public Private Partnerships 944.6 747.4 Investment Management 77.5 82.3 Project Management and Construction 12,426.8 12,056.7	130.7 131.6 23.3 6.2 969.5 1,164.5 18.1 7.7 962.7 755.1 49.8 5.7 127.3 88.0 12,426.8 12,056.7	(0.2) 67.7 (35.9) 145.1 36.2 41.8 24.2 47.3 173.6 31.2
Total segment 14,525.8 14,176.3	91.2 19.6 14,617.0 14,195.9	197.9 333.1
Unallocated Total Group	60.9 86.0 60.9 86.0 152.1 105.6 14,677.9 14,281.9

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 2008 includes A$9.5 million (June 2007: 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.

			Non Cash	Non Cash
			Expenses
			Other than				Investments
	Depreciation		Depreciation				Accounted for
	and		and		Segment		Using the
	Amortisation1		Amortisation2		Assets3		Equity Method
	June	June	June	June	June	June	June	June
	2008	2007	2008	2007	2008	2007	2008	2007
	A$m	A$m	A$m	A$m	A$m	A$m	A$m	A$m
Segment
Retail	1.6	1.9	52.1	(1.8)	787.1	913.2	668.2 747.3
Communities	6.7	5.4	124.6	1.0	2,190.1	2,109.6	84.6	85.3
Public Private
Partnerships	1.7	2.1	(2.4)	(0.1)	507.3	515.8	20.7	18.4
Investment
Management	3.1	3.0	5.8	(2.7)	481.3	801.7	239.8 253.0
Project Management
and Construction	10.3	9.9	28.5	216.1	2,947.7	2,862.6	33.9	22.5
Total segment	23.4	22.3	208.6	212.5	6,913.5	7,202.9	1,047.2 1,126.5
Unallocated
Total Group

1 Represents segment amortisation and depreciation.
2 Non cash expenses represent those non cash items included in segment expense, such as fair value losses and provisions.
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.

Geographical Segment Summary

	Segment	Segment	Group	Group	Group Proft/(Loss)	Group Proft/(Loss)	Group Proft/(Loss)	Group Proft/(Loss)
	Revenue		Revenue		Before Tax		After Tax
	June	June	June	June	June	June	June	June
	2008	2007	2008	2007	2008	2007	2008	2007
	A$m	A$m	A$m	A$m	A$m	A$m	A$m	A$m
Asia Pacifc	3,418.0	3,203.4	3,434.3	3,209.8	310.1	251.2	238.3	185.1
Americas	6,866.9	6,709.2	6,871.7	6,709.3	165.2	237.2	150.1	171.9
Europe	4,240.9	4,263.7	4,311.0	4,276.8	(38.0)	222.1	(46.2)	198.4
Total segment	14,525.8	14,176.3	14,617.0	14,195.9	437.3	710.5	342.2	555.4
Unallocated
corporate			60.9	86.0	(115.8)	(82.5)	(76.8)	(57.9)
Total Group			14,677.9	14,281.9	321.5	628.0	265.4	497.5

138

Share of Proft of Investments Accounted for Using the Equity Method June 2008 A$m June 2007 A$m	Other Unallocated Revenues, Other Income and Expenses1 Group Proft/(Loss) Before Tax June 2008 A$m June 2007 A$m June 2008 A$m June 2007 A$m	Group Proft/(Loss) After Tax4 June 2008 A$m June 2007 A$m	Group Proft/(Loss) After Tax5 June 2008 A$m June 2007 A$m
(7.0) 100.4 32.6 37.1 22.2 16.7 26.0 26.2 15.0 9.2	(7.2) 168.1 18.2 28.3 14.9 210.5 15.6 7.0 74.0 65.5 116.8 152.6 167.0 226.1 (0.1) 188.6 40.3	(12.5) 111.0 (21.5) 143.4 73.0 57.3 148.6 202.6 148.2 43.8	(5.4) 108.8 (21.2) 143.4 73.0 57.3 148.6 202.6 147.2 43.3
88.8 189.6	150.6 187.8 437.3 710.5	335.8 558.1	342.2 555.4
	(115.8) (82.5) (115.8) (82.5)	(76.8) (57.9)	(76.8) (57.9)
	34.8 105.3 321.5 628.0	259.0 500.2	265.4 497.5

3 Includes A$6.9 million reversal of impairment for Communities (June 2007: A$5.7 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.

Unallocated Corporate Assets3 Total Group Assets June 2008 A$m June 2007 A$m June 2008 A$m June 2007 A$m	Acquisition of Non Current Assets4 June 2008 A$m June 2007 A$m	Segment Liabilities3 June 2008 A$m June 2007 A$m	Unallocated Corporate Liabilities3 Total Group Liabilities June 2008 A$m June 2007 A$m June 2008 A$m June 2007 A$m
5.5 3.8 1,460.8 1,664.3 12.7 95.0 2,287.4 2,289.9 0.3 63.0 528.3 597.2 7.7 11.3 728.8 1,066.0 102.7 94.3 3,084.3 2,979.4		321.6 433.6 326.1 433.2 360.7 148.1 45.1 55.1 3,041.9 3,084.9	119.4 194.5 441.0 628.1 74.7 162.4 400.8 595.6 70.4 173.9 431.1 322.0 32.4 72.2 77.5 127.3 105.0 11.0 3,146.9 3,095.9
	27.1 11.5 19.8 13.4 1.8 0.1 0.1 20.7 12.3
128.9 267.4 8,089.6 8,596.8	67.7 39.1	4,095.4 4,154.9	401.9 614.0 4,497.3 4,768.9
505.3 739.4 505.3 739.4 634.2 1,006.8 8,594.9 9,336.2			1,053.6 1,324.3 1,053.6 1,324.3
			1,455.5 1,938.3 5,550.9 6,093.2

4 Represents the acquisition of segment assets that are expected to be used for greater 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.

		Acquisition	Acquisition
Segment		of Non Current
Assets		Assets
June	June	June	June
2008	2007	2008	2007
A$m	A$m	A$m	A$m
2,031.8	2,210.7	41.1	10.3
2,000.1	1,927.1	7.9	8.0
2,881.6	3,065.1	18.7	20.8
6,913.5	7,202.9	67.7	39.1

2008 Annual Consolidated Financial Report Lend Lease Corporation139

Notes to the Consolidated Financial Statements continued

29. Segment Reporting continued

Business Segments

The consolidated entity comprises the following main business segments, based on the consolidated entity’s management reporting system.

Retail

Retail relates to property development from concept through to design, planning, construction, financing, leasing, property management and the eventual sale. This segment also includes direct investments in retail assets.

Communities

Communities relates to urban community development. This includes all aspects from acquisition, design, development and management to eventual sale.

Public Private Partnerships

Public Private Partnerships relates to privatisation services, including the health sector, education sector, waste sector, defence estates and accommodation.

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 indirect investments in real estate and other investments.

Project Management and Construction

This business segment relates to project management, design services, construction management and engineering.

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.

30. Capital Risk Management

The Group assesses its Capital Management model as part of its broader strategic plan. The Group focuses on interrelated financial parameters including return on equity, earnings growth and borrowing capacity. These are taken into account when the Group makes decisions on how to invest its capital and evaluate its existing investments.

The Group’s capital includes total equity, borrowings, and other interest bearing liabilities. When investing capital, the Group’s objective is to deliver strong total shareholder returns and to maintain an investment grade credit rating through adoption of a conservative financial profile.

The capital structure of the Group can be changed by equity issuance, paying dividends, dividend reinvestment plan and changing the level of debt. The co-dependence of the financial parameters focuses the Group on managing these to a balanced outcome.

31. International Currency Management and Financial Instruments

The Group operates across numerous jurisdictions and markets. In order to maintain control and discipline with the Group’s financial integrity, a Financial Markets Risk Committee oversees the management of the Group’s foreign currency, credit, interest rate and liquidity risk exposures, within the parameters of Board approved policy.

The Lend Lease Risk Management and Audit Committee maintains a Group–wide framework for risk management and reviews issues of material risk exposure, including credit risk.

a. Foreign Currency

Foreign Currency Risk

Foreign currency risk is the risk that the value of a financial commitment, a recognised asset or liability will fluctuate due to changes in foreign currency rates.

Foreign currency risk arises primarily from net investments in foreign operations, and firm commitments or highly probable forecast transactions settled in foreign currency.

The Group’s 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. The Group’s exposure is primarily to the United States Dollar (USD), Great British Pound (GBP), Singapore Dollar (SGD) and Euro (EUR).

The Group uses both physical and derivative financial instruments (mainly forward foreign exchange contracts) to hedge its foreign currency exposures, including borrowings in the relevant foreign currencies to hedge the net investments in foreign operations.

140

						Total
2008 Consolidated	AUD	USD	GBP	SGD	EUR	A$m
Net asset exposure(local currency)	1,525.5	109.8	528.0	202.6	88.9
Net asset exposure(AUD)	1,525.5	115.6	1,100.0	157.1	145.8	3,044.0
2007 Consolidated
Net asset exposure(local currency)	1,626.9	122.4	496.3	231.5	53.1
Net asset exposure(AUD)	1,626.9	149.3	1,196.0	183.7	87.1	3,243.0

Net Investments in Foreign Operations

Net investments in foreign operations are exposed to foreign currency translation risk. Foreign currency gains and losses arising from translation of net investments in foreign operations are recognised in the Foreign Currency Translation Reserve (refer Note 1u.) until realised.

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 the Group’s accounting policy for foreign currency (refer to Accounting Policy Note 1u.).

Certain derivative transactions are treated as cash flow or fair value hedges when they meet the appropriate strict hedge accounting criteria outlined in Accounting Policy Note 1v.

Fair Value Hedges

The Group’s fair value hedges consist of foreign exchange forward contracts used as hedging instruments to protect against changes in the fair value of particular foreign denominated available for sale financial assets, or hedged items, due to movements in foreign exchange rates.

Changes in the fair value of the hedging instrument are recognised in the income statement in the period in which it occurs. Changes in the fair value of the hedging instrument are offset against the change in the fair value of the hedged item and are eliminated on consolidation, as shown below:

value of the hedged item and are eliminated on consolidation, as shown below:
	Consolidated
	June 2008	June	2007
	A$m		A$m
Gain/(loss) on hedging instrument
Asia Pacifc Investment Company (APIC II)			0.9
Lend Lease Global Properties, SICAF	1.2		0.1
Gain/(loss) on hedged item
Asia Pacifc Investment Company (APIC II)			(0.9)
Lend Lease Global Properties,SICAF	(1.2)		(0.1)

Cash Flow Hedges

The Group’s cash flow hedges protect against foreign exchange rate fluctuations on highly probable forecast transactions using foreign exchange forward contracts. As at 30 June 2008 the fair value of these outstanding designated derivatives recognised in equity is A$1.2 million. It is expected that the current hedged forecast transactions will occur during the financial year ending 30 June 2009 and will affect the income statement in the same period. Refer to Statements of Changes in Equity – Hedging Reserve.

There are no gains or losses recognised in the income statement during the period due to hedge ineffectiveness (30 June 2007: A$nil).

2008 Annual Consolidated Financial Report Lend Lease Corporation141

Notes to the Consolidated Financial Statements continued

31. International Currency Management and Financial Instruments continued a. Foreign Currency continued

Foreign Currency Hedges

The Group’s foreign exchange cash flow and fair value hedges by currency and maturity date are detailed below:

below:	below:
Weighted Average		Gross Receivable/(Payable)
Exchange Rate		Under	Contracts
June 2008	June 2007	June 2008	June 2007
(A$1=)	(A$1=)	A$m	A$m
Contracts to buy pounds sterling at an agreed exchange rate Not later than one year 0.49 Contracts to sell pounds sterling at an agreed exchange rate Not later than one year 0.47 Later than one year but not later than two years 0.49 Later than two years but not later than three years 0.49 Contracts to buy US dollars at an agreed exchange rate Not later than one year 0.93 Contracts to sell US dollars at an agreed exchange rate Not later than one year 0.92 Contracts to buy euros at an agreed exchange rate Not later than one year 0.61 Later than one year but not later than two years 0.61 Later than two years but not later than three years 0.61 Contracts to sell euros at an agreed exchange rate Not later than one year 0.61 Contracts to buy Singapore dollars at an agreed exchange rate Not later than one year 1.25 Contracts to sell Singapore dollars at an agreed exchange rate Not later than one year 1.30 Contracts to buy Japanese yen at an agreed exchange rate Not later than one year 97.94	0.42 0.42 0.82 0.79 0.62 0.61 1.22 1.25	(25.9) 735.6 12.4 0.3 (270.6) 35.1 (10.8) (12.4) (0.3) 24.4 (20.8) 2.2 (3.0)	(51.8) 574.9 (237.5) 45.8 (10.9) 8.5 (25.0) 27.6
Total A$		466.2	331.6

142

Sensitivity Analysis

The sensitivity of the AUD to movement in foreign currencies is based on a 5.0% fluctuation in the average rates during the financial year and the spot rate at balance date. This analysis assumes that all other variables in particular interest rates remain constant. No sensitivity analysis is performed for the Company, on the basis it does not have material exposures to foreign currency balances.

A 5.0% decrease in the average foreign exchange rates would have impacted the Group’s profit after tax as follows:

as follows:
	Consolidated
	Increase/(decrease) in proft/(loss) after tax
	June 2008	June	2007
	A$m		A$m
USD	7.0		8.1
GBP	(4.9)		7.4
SGD	0.9		0.7
EUR	0.8		0.8
	3.8		17.0

An increase of 5.0% in average foreign exchange rates has the equal and opposite effect. A 5.0% decrease in the foreign exchange spot rates would have increased the Group’s net assets as follows:

follows:
		Consolidated
		Increase in
		net	assets
	June	2008	June	2007
		A$m		A$m
USD		5.8		7.4
GBP		55.0		59.8
SGD		7.8		9.2
EUR		7.2		4.4
		75.8		80.8

An increase of 5.0% in the spot foreign exchange rates has the equal and opposite effect.

b. Credit Risk

Credit risk represents the risk that a counterparty will not complete its obligations under a financial instrument resulting in a financial loss to the Group. The Group has exposure to credit risk from all recognised financial assets.

On Balance Sheet Financial Instruments

The maximum exposure to credit risk at balance date on financial assets recognised in the balance sheet (excluding investments of the Group) equals the carrying amount, net of any impairment.

The Group has no significant concentrations of credit risk on either a geographic or industry specific basis, and has policies in place to ensure that sales of products and services are made to customers with an appropriate credit history.

Credit risk on derivative 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.

Credit risk for derivative contracts such as swaps and forward exchange contracts is minimised as dealings are principally undertaken with counterparties that are recognised financial intermediaries with acceptable credit ratings determined by a recognised rating agency, in accordance with Board approved policy.

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 31a. ‘Foreign Currency’.

Collateral

In certain circumstances, the Group will hold either financial or non financial assets as collateral to further mitigate the credit risk arising on selected transactions. The Group currently holds the following collateral as security for certain credit risk exposures:

A trade debtor (A$76.5 million) is secured by a first registered mortgage over land parcels (30 June 2007: A$74.5 million).
An other receivable (A$4.9 million) is secured by a first registered mortgage over land parcels (30 June 2007: A$nil).

The Group did not obtain financial or non financial assets as collateral during the period as a result of default by a counterparty (30 June 2007: A$nil). Consequently, any collateral held as security is not recognised in the financial statements.

2008 Annual Consolidated Financial Report Lend Lease Corporation143

31. International Currency Management and Financial Instruments continued

Notes to the Consolidated c. Interest Rate Risk Financial Statements continued

Interest rate risk is the risk that the value of a financial instrument or cash flow associated with the instrument will fluctuate due to changes in the market interest rates.

The Group’s policy is to manage interest rate risk that impacts directly on the Group’s assets and liabilities. The Group uses physical and derivative financial instruments to assist in managing its interest rate exposure. Speculative trading is not undertaken.

Sensitivity Analysis – Consolidated

At 30 June 2008 it is estimated that an increase of one percentage point in interest rates would have increased the Group’s profit after tax and retained earnings by A$3.6 million (2007: A$3.5 million increase). The net increase in profit after tax is due to the high proportion of fixed interest rate debt and high proportion of floating rate assets. A one percentage point decrease in interest rates would have an equal and opposite effect on retained earnings and profit after tax. The increase or decrease in interest income/expense is proportional to the increase or decrease in interest rates. Interest rate swaps have been included in this calculation.

The Group’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.

Consolidated Note Weighted Average Interest Rate1 % Floating Interest Rate A$m	Fixed Interest MaturingIn Non Interest Bearing A$m Total A$m One Year or Less A$m One to Five Years A$m More than Five Years A$m
June 2008 Financial Assets Cash and cash equivalents 7 5.2 573.9 Loans and receivables 8 9.5 139.8 Other fnancial assets (investments) 12 5.4 Other fnancial assets(derivatives) 12

	268.9 842.8
	77.6 44.0 156.5 2,434.6 2,852.5
	28.5 5.3 433.6 467.4
	8.7 8.7
713.7	375.0 49.3 156.5 2,876.9 4,171.4
Financial Liabilities Trade and other payables2 17 Borrowings 18 6.0 Other fnancial liabilities3 20 7.0 171.1 Other fnancial liabilities(derivatives) 20
	2,641.4 2,641.4
	104.9 824.4 929.3
	22.9 6.8 200.8
	0.1 0.1
171.1	– 127.8 824.4 2,648.3 3,771.6
Net fnancial assets and liabilities 542.6	375.0 (78.5) (667.9) 228.6 399.8
June 2007 Financial Assets Cash and cash equivalents 7 4.8 422.7 Loans and receivables 8 7.1 90.9 Other fnancial assets (investments) 12 6.3 Other fnancial assets(derivatives) 12	127.4 550.1 50.5 25.3 38.6 2,318.7 2,524.0 361.5 6.6 716.1 1,084.2 0.1 0.1
513.6	539.4 31.9 38.6 3,034.9 4,158.4
Financial Liabilities Trade and other payables2 17 5.3 Borrowings 18 6.0 Other fnancial liabilities3 20 7.0 224.6 Other fnancial liabilities(derivatives) 20	17.0 2,634.6 2,651.6 1,076.2 1,076.2 32.1 2.9 259.6 2.7 2.7
224.6	– 49.1 1,076.2 2,640.2 3,990.1
Net fnancial assets and liabilities 289.0	539.4 (17.2) (1,037.6) 394.7 168.3

1 Does not include non interest bearing financial instruments.

2 Does not include the net of progress billings to clients and recognised losses less construction costs incurred on projects which exceed project costs incurred (BIE).

3 Other financial liabilities includes Bluewater lease of A$171.1 million (June 2007: A$197.9 million) which matures in 2013.

144

– Sensitivity Analysis Company

The Company does not have material exposures to interest bearing financial assets or liabilities, evidenced by the table below and on this basis, no sensitivity analysis has been provided.

and on this basis, no sensitivity analysis has been provided.
Company Note Weighted Average Interest Rate1 % Floating Interest Rate A$m	Fixed Interest MaturingIn Non Interest Bearing A$m Total A$m One Year or Less A$m One to Five Years A$m More than Five Years A$m
June 2008 Financial Assets Cash and cash equivalents 7 6.6 18.5 Loans and receivables 8 Other fnancial assets (investments) 12

	18.5
	3,218.2 3,218.2
	1,403.2 1,403.2
18.5	– – – 4,621.4 4,639.9
Financial Liabilities Trade and other payables 17 Other fnancial liabilities 20
	1,537.2 1,537.2
	60.4 60.4
–	– – – 1,597.6 1,597.6
Net fnancial assets and liabilities 18.5	– – – 3,023.8 3,042.3
June 2007 Financial Assets Cash and cash equivalents 7 5.9 2.0 Loans and receivables 8 5.0 Other fnancial assets (investments) 12	2.0 16.8 2,580.2 2,597.0 1,560.4 1,560.4
2.0	– 16.8 – 4,140.6 4,159.4
Financial Liabilities Trade and other payables 17 Other fnancial liabilities 20	1,431.2 1,431.2 80.9 80.9
–	– – – 1,512.1 1,512.1
Net fnancial assets and liabilities 2.0	– 16.8 – 2,628.5 2,647.3

1 Does not include non interest bearing financial instruments.

d. Liquidity Risk

Liquidity risk is the risk of having insufficient funds to settle financial liabilities as and when they fall due. This includes having insufficient levels of committed credit facilities.

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 and ensure sufficient availability of credit facilities.

Liquidity risk is reduced through prudent cash management which ensures sufficient levels of cash are maintained to meet working capital requirements. It also allows flexibility of liquidity by matching maturity profiles of short term investments with cash flow requirements, and timely review and renewal of credit facilities.

The following are the contractual cash flow maturities of financial liabilities (excluding financial guarantees) as at 30 June 2008, including estimated interest payments and excluding the impact of netting agreements.

					Six to
		Carrying	Contractual	Six Months	Twelve	One to Two	Two to Five	More than
		Amount	Cash Flows	or Less	Months	Years	Years	Five Years
Consolidated	Note	A$m	A$m	A$m	A$m	A$m	A$m	A$m
June 2008
Non Derivative Financial Liabilities
Trade and other payables – current	171, 2	2,547.0	2,547.0	2,324.9	222.1
Trade and other payables – non current	171, 2	79.8	117.3			62.5	49.2	5.6
Borrowings & fnancing arrangements –
non current	18	929.3	1,594.6	47.2	8.9	56.1	270.1	1,212.3
Other fnancial liabilities–non current	20	200.8	267.9	12.8	5.9	11.9	63.5	173.8
Total		3,756.9	4,526.8	2,384.9	236.9	130.5	382.8	1,391.7
Derivative Financial Liabilities
Foreign exchange contracts used for
hedging:
Outfow		0.7	(21.4)	(3.2)	(5.4)	(12.5)	(0.3)
Infow		(0.8)	55.4	20.7	21.9	12.5	0.3
Other foreign exchange contracts
Outfow		3.0	(316.6)	(316.6)
Infow		1.8	748.8	748.8
Total		4.7	466.23	449.7	16.5	–	–	–

1 The carrying amount of financial liabilities excludes ‘construction revenue – amounts due to customers’, ‘deposits received in advance’, ‘unearned income’ and ‘unearned premium reserve’, as they do not meet the definition of a financial liability under AASBs.

2 The repayment of these amounts will be funded through collection of outstanding loans and receivables: June 2008: A$2,852.5 million. 3 Refer Note 31a. for further detail.

2008 Annual Consolidated Financial Report Lend Lease Corporation145

Notes to the Consolidated Financial Statements continued

31. International Currency Management and Financial Instruments continued d. Liquidity Risk continued

				Six	Six to		Two
		Carrying Amount	Contractual Cash Flows	Months or Less	Twelve Months	One to Two Years	to Five Years	More than Five Years
Consolidated	Note	A$m	A$m	A$m	A$m	A$m	A$m	A$m
June 2007
Non Derivative Financial
Liabilities
Trade and other payables –
current	171	2,403.4	2,403.4	2,269.6	133.8
Trade and other payables –
non current	171	215.7	246.9			115.5	78.1	53.3
Borrowings & fnancing
arrangements – non current	18	1,076.2	1,906.7	50.0	10.3	64.9	194.6	1,586.9
Other fnancial liabilities –
non current	20	256.7	375.6	14.2	8.9	25.0	82.6	244.9
Total		3,952.0	4,932.6	2,333.8	153.0	205.4	355.3	1,885.1
Derivative Financial Liabilities
Foreign exchange contracts used
for hedging:
Outfow		(0.4)	(9.1)	(8.0)	(1.1)
Infow		(0.1)	16.3	16.3
Other foreign exchange contracts
Outfow		0.9	(288.2)	(264.0)	(24.2)
Infow		(3.1)	610.8	586.3	24.5
Total		(2.7)	329.8	330.6	(0.8)	–	–	–
1 The carrying amount of fnancial liabilities excludes ‘construction revenue – amounts due to customers’, ‘deposits received in advance’, ‘unearned income’ and ‘unearned premium reserve’, as they do not meet the defnition of a fnancial liability under AASBs.
				Six	Six to		Two
		Carrying	Contractual	Months	Twelve	One to	to Five	More than
		Amount	Cash Flows	or Less	Months	Two Years	Years	Five Years
Company	Note	A$m	A$m	A$m	A$m	A$m	A$m	A$m
June 2008
Non Derivative Financial
Liabilities
Trade and other payables –
current	171	1,537.2	1,537.2	1,537.2
June 2007
Non Derivative Financial
Liabilities
Trade and other payables –
current	17	1,431.2	1,431.2	1,431.2

1 The repayment of these amounts were funded through collection of outstanding loans and receivables: June 2008: A$3,218.2 million. Details of other contractually committed cash flows the Group and the Company are exposed to are in Note 32. ‘Commitments’.

e. Net Fair Values of Assets and Liabilities

Equity investments traded on organised markets have been valued by reference to market prices prevailing at balance date. For non traded equity investments, the net fair value is determined by 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’).

On Balance Sheet Financial Instruments

All financial instruments recognised on the balance sheet, including those instruments carried at amortised cost, are recognised at amounts that represent a reasonable approximation of fair value, with the exception of non current borrowings as follows:

		Consolidated	Consolidated			Company	Company
	2008		2007		2008		2007
	Carrying		Carrying		Carrying		Carrying
	Amount	Fair Value	Amount	Fair Value	Amount	Fair Value	Amount	Fair Value
	Note A$m	A$m	A$m	A$m	A$m	A$m	A$m	A$m
Liabilities
Non Current
Commercial notes	18 929.3	898.0	1,076.2	998.0

The fair value of commercial notes has been calculated by discounting the expected future cash flows by the appropriate government bond rates applicable to the relevant term of the commercial note plus the original margin.

146

Basis of Determining Fair Value

The following table summarises the basis of valuation of financial instruments that are not measured at cost or amortised cost in the financial report:

		Active Market or		Source of
	Note	Valuation Technique	Basis of Valuation	Information
Financial Instrument
Other Financial Assets
			Internal valuation (with
			reference to external Australian
Deferred management fee			Bureau of Statistics tables for	External/
receivable	8	Valuation technique	life expectancy of resident)	Internal
Available for sale
Babcock & Brown Communities
Group	12	Active market	Market value (current bid price)	External
Negotiable instruments	12	Active market	Market value (current bid price)	External
Australian Prime Property Fund	12	Valuation technique	Unit price	External
Lend Lease Global Properties, SICAF	12	Valuation technique	Net asset value (audited fnancial statements)	External
			International Valuation
			Standards Committee
			International Valuation
Lend Lease Retail Partnership	12	Valuation technique	Application 1	External
Cohen & Steers, SICAV	12	Valuation technique	Net asset value (audited fnancial statements)	External
Lend Lease Core Plus Fund Asia Pacifc Investment Company	12 12	Valuation technique Valuation technique	Unit price Net asset value external using audited fnancial statements	External External
Other	12	Active market	Market value (current bid price)	External
Fair value through proft or loss
Negotiable instruments	12	Valuation technique	Investor reports	External
Unlisted equity investments	12	Valuation technique	Internal valuation	Internal
Derivatives	12	Active market	Market value (current bid price)	External
Financial guarantees	20	Valuation technique	Fair value approximates cost	External

Refer to Note 1. ‘Significant Accounting Policies’ for the basis of determining fair values by type of financial instrument.

The net fair value of forward foreign exchange contracts are included in ‘Other Financial Assets’ and ‘Other Financial Liabilities’ (refer to Note 12. ‘Other Financial Assets’ and Note 20. ‘Other Financial Liabilities’). 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 swap agreements has been determined as the marked to market value.

f. Equity Price Risk

Equity price risk is the risk that the fair value of either a traded or non-traded equity investment, derivative equity instrument, or a portfolio of such financial instruments decreases in the future. The Group is exposed to equity price risk on all traded or non-traded financial instruments measured at fair value (refer table Note 31e.). The Group’s objective in managing its exposure to equity price risk is to maintain a diversified portfolio of traded and non-traded equity investments.

All new investment submissions require sign-off from members of the ‘Executive Office’, as defined in Section 3 of the Directors’ Report.

Sensitivity Analysis – Consolidated

A 5.0% increase in the fair value of ‘Other Financial Assets’ (refer Note 12. ‘Other Financial Assets’), with reference to the ‘Basis of Determining Fair Value’ table in Note 31e., would have increased the value of available for sale financial assets and equity by A$15.0 million after tax (30 June 2007: A$36.7 million increase), and increased the value of ‘fair value through profit or loss’ assets and profit after tax and equity by A$1.3 million (30 June 2007: A$nil). A 5.0% decrease would achieve an equal and opposite result on equity and profit after tax.

– Sensitivity Analysis Company

No sensitivity analysis is performed for the Company, on the basis it does not have a material exposure to equity price risk.

2008 Annual Consolidated Financial Report Lend Lease Corporation147

Notes to the Consolidated Financial Statements continued

Consolidated Company June 2008 June 2007 June 2008 June 2007 A$m A$m A$m A$m

	June 2008 A$m June 2007 A$m June 2008 A$m	June 2007 A$m
32. Commitments1
a. Operating Lease Commitments
Estimated aggregate amount of non cancellable operating
lease expenditure agreed or contracted but not provided for in the fnancial statements:
Land and buildings – self occupied	186.5 197.5
Plant and equipment	20.2 17.5
	206.7 215.0 –	–
At balance date commitments in relation to non
cancellable operating leases are payable as follows:
Due within one year Due between one and fve years Due later than fve years	51.4 49.1 131.1 125.0 24.2 40.9
	206.7 215.0 –	–

1 The commitments outlined in this note do not include commitments relating to investments accounted for using the equity method (refer to Note 10. ‘Investments Accounted for Using the Equity Method’).

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.

leases are renegotiated.
	Consolidated			Company
	June 2008	June	2007	June 2008	June	2007
	A$m		A$m	A$m		A$m
b. Finance Lease Commitments1
At balance date commitments in relation to the fnance
leases are payable as follows:
Due within one year Due between one and fve years Due later than fve years	0.1 0.2 171.1	0.2 0.4 197.9
Recognised as a liability	171.4	198.5		–		–
Lease liabilities provided for in the fnancial statements:
Current	0.1		0.2
Non Current	171.3	198.3
	171.4	198.5		–		–
c. Capital Expenditure
At balance date the aggregate amount of capital expenditure contracted but not provided for in the fnancial
statements:
Property, Plant and Equipment
Due within one year	9.1
Due between one and fve years	8.0
	17.1		–	–		–
d. Investments2
At balance date capital commitments existing in respect of
interests in partnerships, investments or joint ventures contracted but not provided for in the fnancial statements:
Due within one year
PPP	22.1		39.4
Other	11.3		7.1
Due between one and fve years
PPP	102.5		72.8
Other	3.0
Due later than fve years
PPP			3.7
Lend Lease Overgate Partnership	0.9		1.1
Other	1.3		1.5
	141.1	125.6		–		–

1 Primarily relates to Bluewater lease liability, excluding finance charges which are based on future variable interest rates.

2 The capital commitments of Lend Lease in relation to investment in associates was previously disclosed in Note 10a. ‘Investments Accounted for Using the Equity Method – Associates’.

148

	Consolidated	Consolidated		Company	Company
	June 2008	June	2007	June 2008	June 2007
	A$m		A$m	A$m		A$m
33. Notes to the Statements of Cash Flows
a. Reconciliation of Proft After Tax to Net
Cash Provided by Operating Activities
Proft After Tax (Including Minority Interest)	259.0	500.2		669.4		391.0
Amortisation and depreciation	27.0		25.9	0.1		0.3
Net gain on sale of investments and property,
plant and equipment	(70.5)	(169.3)
Net unrealised foreign exchange (gain)/loss and currency
hedging costs Proft accounted for using the equity method	(1.9) (88.8)	(0.7) (189.6)		1.8		(0.1)
Dividends/distributions from investments accounted for
using the equity method	66.9	104.2
Net bad and doubtful debts impairment loss net of
provisions raised/(written back)	11.8		(5.2)			(80.0)
Fair value loss/(gain) on investment properties	38.2		(2.8)
Other	2.0		0.4	25.6		2.8
Net cash provided by operating activities
before changes in assets and liabilities	243.7	263.1		696.9		314.0
Changes in Assets and Liabilities Adjusted for
Effects of Purchase and Disposal of Subsidiaries
and Operations During the Financial Year
(Increase)/decrease in receivables	(131.6)	(596.7)		(6.2)		(35.0)
Decrease/(increase) in inventories	130.7	(83.4)
Decrease in other assets	151.3		9.1
(Decrease) in defned beneft plan assets/liabilities	(43.9)	(19.6)		(5.6)		(1.4)
(Decrease)/increase in payables	(88.2)	689.2		(8.1)		(8.3)
(Decrease)/increase in other liabilities	(29.0)		77.4	(20.5)		2.1
(Decrease)/increase in deferred tax items	(21.7)		61.4	1.8		6.5
Increase/(decrease) in current tax liability/asset	60.8		(3.9)	47.0		31.1
(Decrease)/increase in other provisions	(3.4)	(39.4)		0.1		(65.5)
Net cashprovided byoperatingactivities	268.7	357.2		705.4		243.5

Net cashprovided byoperatingactivi	ties		268.7 357.2 705.4 243.5	268.7 357.2 705.4 243.5	268.7 357.2 705.4 243.5	268.7 357.2 705.4 243.5	268.7 357.2 705.4 243.5
			Consolidated June 2008 June 2007 Receipt Expenditure Receipt Expenditure
				A$m	A$m A$m		A$m
b. Supplementary Information
Property Development Receipts and Expenditure
Retail
First Base Adelaide Wharf, London Chapelfeld, Norwich				77.8 (25.0) (7.2)			(40.3) (12.4)
Property Development
Urban Communities, Australia				449.8 (471.7) 737.6 (578.4)
Urban Communities, UK				261.8 (313.3) 402.1 (344.8)
Other				15.3 (159.6) 29.8			(31.8)
				804.7 (976.8) 1,169.5 (1,007.7)
	Ownership				Contribution to	Contribution to
	Interest			Consideration	Consolidated	Consolidated
	Acquired		Date	Paid	Revenue	Proft After Tax
	%	Acquired		A$m	A$m		A$m
c. Acquisition of Business
June 2008
During the June 2008 fnancial year
the consolidated entity acquired the
following business and has included
the operating results of this business in consolidated operating proft from
the date of acquisition.
Communities
Lutanda Manor retirement village,
Pennant Hills	100	12 May 08		17.0	0.6		0.4

2008 Annual Consolidated Financial Report Lend Lease Corporation149

Notes to the Consolidated Financial Statements continued

33. Notes to the Statements of Cash Flows continued

c. Acquisition of Business continued

Lutanda Manor retirement village operates in the senior living sector. The business was acquired by Lutanda Manor Retirement Village Pty Ltd, a consolidated entity of Lend Lease. The identifiable assets and liabilities acquired are as follows:

		Consolidated	Consolidated
	June	2008		June	2007
	Acquiree’s	Total Fair	Acquiree’s		Total Fair
	Carrying	Value on	Carrying		Value on
	Value	Acquisition	Value		Acquisition
	A$m	A$m		A$m	A$m
Acquisition of Business
Acquisition Cost
Cash paid for acquisition		16.0
Cash paid for acquisition costs		1.0
Total acquisition cost/net outfow of cash		17.0			–
Net Assets of Entities Acquired
Receivables	3.6	3.6
Property, plant and equipment	0.7	0.7
Intangible assets (management agreements)	12.7	12.7
Total acquisition cost	17.0	17.0		–	–

34. Employee Benefits

a. Lend Lease Employee Share Plans

Lend Lease has as a core value the concept of ‘partnering’ 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 9.75% 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, corporate and business unit performance.
At balance date, approximately 2,728 employees (June 2007: 1,934) were eligible to participate in ESAP.

UK/Europe/Asia: Employee Share Plan

The European (Guernsey–based) Restricted Share Plan (‘the Restricted Share Plan’) was established in 1998. The Plan is similar in operation to the Australia-based ESAP.
In 2002, two new UK–based 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 UK–based Lend Lease Group employees. These plans are currently not accepting new contributions whilst Lend Lease makes all profit share payments to employees in cash. At balance date approximately 3,169 employees (June 2007: 2,261) were eligible to participate in the SIP, should it recommence accepting contributions.
Shares in the Restricted Share Plan may be allocated to employees in the UK, Europe and Singapore based on individual and business unit 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 4,646 UK, European and Singapore employees (June 2007: 3,995) 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.

150

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 2008 was 14.1 million Lend Lease Corporation shares (June 2007: 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 AASBs, 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$150.8 million at 30 June 2008. 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 Corporation shares, it should be noted that any capital gains tax payable on the Lend Lease Corporation 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 on-market 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 2008, there were 11.6 million (June 2007: 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, AASBs now require 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$118.3 million as at 30 June 2008). 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 Corporation 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.

The consolidation of EIT and RBF under AASBs 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. 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 2008, the net impact was an after tax expense of A$3.1 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.

2008 Annual Consolidated Financial Report Lend Lease Corporation151

Notes to the Consolidated Financial Statements continued

34. Employee Benefits continued

c. Share Based Payments

Short Term Incentives (STI)

The STI plan is an annual bonus plan where 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.

The STI comprises a cash element paid in September following year end and a deferred element. The deferred element represents Lend Lease Corporation shares based on share price at the date of determination of the bonuses. The shares are then held in trust on behalf of the executive for the deferred period. For executives to receive the full deferral they must be employed by the Group at the date of vesting, which will usually be one year from the date of grant.

Long Term Incentives (LTI)

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 the Company, the individual executive and the Lend Lease Corporation share price.

LTI grants are normally made in August each year. LTIs are settled in cash or Lend Lease Corporation 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’ (converted from local salary for overseas participants), which is ‘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; and
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 provide that in the event of a change in control of Lend Lease Corporation, all awards will vest upon change in control, to the extent that performance conditions have been met. Participants would then be entitled to a pro rata settlement, with the Board having discretion to allow the entitlement to exceed this pro rata amount, if circumstances so provide.

Arrangements for LTI Awards Granted in the June 2006 Financial Year

For awards granted on 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. The award did not vest at 30 June 2008 as the performance hurdle was not achieved.

Arrangements for LTI Awards Granted in the June 2007 and June 2008 Financial Years

For the June 2007 and June 2008 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 STI structure.

For awards granted 1 July 2006 and 1 July 2007 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); and
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 vesting 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. The 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. Performance conditions continue to apply.

For the 2006 award, the Personnel and Organisation Committee intends that these awards will vest in Lend Lease Corporation 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. As a result of this modification the 1 July 2006 LTI is now accounted for as an equity settled share based payment. Refer to the table below for details on the financial impact of this modification.

Other LTI Awards

During the June 2008 financial year bespoke LTI plans have been granted to certain executives by the Personnel and Organisation Committee. These awards tend to have performance hurdles based on internal business unit performance targets, such as net profit after tax, global operating margin and global funds under management. The relevant performance hurdles must be satisfied in order for awards to vest, but the hurdles can vest independently. The executive must remain with the Group until vesting date for the award to vest. The Personnel and Organisation Committee intends that these awards will vest in Lend Lease Corporation shares.

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 Group 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.

152

Summary of LTI and Retention Awards

Grant Date VestingDate	2008 Number of Lend Lease Corporation Share Equivalents
	Opening Balance Granted Lapsed Exercised Closing Balance
STI Awards Aug 2007 Aug 2008 Aug 2007 Aug 2009
	489,542 (26,007) 463,535
	6,318 6,318
Total STI Awards	– 495,860 (26,007) – 469,853
LTI Awards Jul 2005 Jun 2008 Jul 2006 Jun 2009 Jul 2006 Jun 2009 Jul 2007 Jun 2010 Jul 2007 Jun 2010 Jan 2008 Jun 2010 Jan 2008 Jun 2012 Jan 2008 Jun 2013
	1,039,768 (1,006,869) (32,899)
	1,004,647 34,878 (82,818) (42,084) 914,623
	212,874 212,874
	921,175 (22,438) 898,737
	151,733 151,733
	59,667 59,667
	17,628 17,628
	14,423 14,423
Total LTI Awards	2,257,289 1,199,504 (1,112,125) (74,983) 2,269,685
Retention Awards Dec 2002 Jun 2008 Jul 2005 Apr 2008 Sep 2005 Jul 2008 Oct 2006 Sep 2007 Oct 2006 Sep 2008 Oct 2006 Sep 2009 Oct 2006 Sep 2010 Jul 2007 Jul 2009 Jul 2007 Jun 2010 Jul 2007 Jun 2010 Aug 2007 Jun 2012 Sep 2007 Jun 2010 Sep 2007 Jun 2010 Sep 2007 Jun 2011 Oct 2007 Oct 2008 Jan 2008 Jan 2011 Apr 2008 Apr 2011
	31,319 27,973 (59,292) 1
	110,664 (110,664) 2
	197,218 197,2182
	84,407 (84,407)
	84,407 84,4073
	84,408 84,4083
	84,408 84,4083
	25,340 25,3403
	50,680 50,6803
	80,214 80,2143
	141,367 141,3673
	16,279 16,2793
	37,132 37,1323
	33,440 33,4403
	5,130 5,1303
	11,152 11,1523
	61,885 61,8853
Total Retention Awards	676,831 490,592 – (254,363) 913,060
Total	2,934,120 2,185,956 (1,138,132) (329,346) 3,652,598

1 Award settled in cash and vested 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.

Grant Date VestingDate	2007 Number of Lend Lease Corporation Share Equivalents
	Opening Balance Granted Lapsed Exercised Closing Balance
LTI Awards Dec 2002 Jun 2007 Jul 2004 Jun 2007 Jul 2005 Jun 2008 Jul 2006 Jun 2009	210,604 (94,772) (115,832) 891,028 (439,121) (451,907) 1,202,250 (153,467) (9,015) 1,039,768 1,277,059 (57,763) (1,775) 1,217,521
Total LTI	2,303,882 1,277,059 (745,123) (578,529) 2,257,289
Retention Awards Dec 2002 Dec 2007 Jul 2005 Jul 2008 Sep 2005 Jun 2007 Sep 2005 Jul 2008 Oct 2006 Sep 2007 Oct 2006 Sep 2008 Oct 2006 Sep 2009 Oct 2006 Sep 2010	87,357 (56,038) 31,319 110,664 110,664 197,218 (197,218) 197,218 197,218 84,407 84,407 84,407 84,407 84,408 84,408 84,408 84,408
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

153

2008 Annual Consolidated Financial Report Lend Lease Corporation

Notes to the Consolidated Financial Statements continued

c. Share Based Payments continued

34. Employee Benefits continued

Amounts Recognised in the Financial Statements

LTI awards are valued using a Monte-Carlo simulation methodology where the share price can be projected based on the assumptions underlying the Black-Scholes 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 Corporation share price, a risk free interest rate, expected volatility and dividend yield.

In August 2007 the Personnel and Organisation Committee modified the rules of the 1 July 2006 LTI such that it now vests in shares rather than cash, other than for certain specified executives or where share settlement is not practical. The modified LTI was valued using a Monte-Carlo simulation methodology where the share price can be projected based on the assumptions underlying the Black-Scholes formula. Details of the amounts recognised in the financial statements and the fair values relating to STI, LTI and retention awards for the years ended 30 June 2008 and 2007 are set out below.

Grant Date Vesting Date Fair Value at Grant Date A$	2008	2008	2008	2008	2008
	Fair Value June 20081 A$	Award Fair Value at June 20082 A$	Expense 2008 A$	Cash Settled Award Liability at June 20083 A$	Equity settled Award in ECR at June 20084 A$
STI Awards Aug 2007 Aug 2008 9,169,122 Aug 2007 Aug 2009 118,336
	9.55	4,426,759	8,682,011		8,682,011
	9.55	60,337	118,336		118,336
9,287,458		4,487,096	8,800,347	–	8,800,347
LTI Awards Jul 2005 Jun 2008 8,066,725 Jul 2006 Jun 2009 10,264,064 Jul 2006 Jun 2009 2,053,170 Jul 2007 Jun 2010 10,607,330 Jul 2007 Jun 2010 1,747,205 Jan 2008 Jun 2010 769,108 Jan 2008 Jun 2012 243,443 Jan 2008 Jun 2013 190,961
			(5,559,204)
	9.55	8,734,650	2,940,513		6,987,720
	5.69	1,211,253	(243,386)	807,502
	9.55	8,582,938	3,449,652		3,449,652
	5.12	776,114	258,705	258,705
	9.55	569,820	132,545		132,545
	9.55	168,347	26,041		26,041
	9.55	137,740	16,701		16,701
Total LTI Awards 33,942,006		20,180,862	1,021,567	1,066,207	10,612,659
Retention Awards Dec 2002 Jun 2008 2,486,782 Jul 2005 Apr 2008 1,453,834 Sep 2005 Jul 2008 2,630,888 Oct 2006 Sep 2007 1,374,992 Oct 2006 Sep 2008 1,374,992 Oct 2006 Sep 2009 1,375,008 Oct 2006 Sep 2010 1,375,008 Jul 2007 Jul 2009 469,804 Jul 2007 Jun 2010 824,057 Jul 2007 Jun 2010 1,500,000 Aug 2007 Jun 2012 2,500,000 Sep 2007 Jun 2010 274,138 Sep 2007 Jun 2010 612,678 Sep 2007 Jun 2011 540,056 Oct 2007 Oct 2008 99,984 Jan 2008 Jan 2008 165,841 Apr 2008 Apr 2011 800,173
			(1,637,172)
			37,286
	9.55	1,883,432	(478,744)	1,883,432
			259,354
	9.55	806,087	718,923		1,251,241
	9.55	806,096	472,537		822,421
	9.55	806,096	351,925		612,503
	9.55	241,997	234,902		234,902
	9.55	483,994	275,187		275,187
	9.55	766,044	500,912		500,912
	9.55	1,350,055	441,094		441,094
	9.55	155,464	74,815		74,815
	9.55	354,611	172,466		172,466
	9.55	319,352	108,090		108,090
	9.55	48,992	70,833		70,833
	9.55	106,502	27,539		27,539
	9.55	591,002	49,005		49,005
Total Retention Awards 19,858,235		8,719,724	1,678,952	1,883,432	4,641,008
Total 63,087,699		33,387,682	11,500,866	2,949,639	24,054,014

1 Represents the Lend Lease Corporation share price at 30 June 2008 for equity settled awards and the actuarial valuation at 30 June 2008 for cash settled awards.

2 Represents the number of Lend Lease Corporation share equivalents granted at their fair value at 30 June 2008.

3 Awards to be settled in cash and accordingly the obligation recognised as a liability.

4 Awards to be settled in shares and accordingly the obligation recognised in equity compensation reserve (ECR).

During the financial year ended 30 June 2008, a A$19.1 million expense was recognised in the income

statement in relation to equity settled share based payment awards. This was partially offset by a net accrual reversal of A$7.6 million relating to the 2005 LTI cash settled plan that did not vest and certain cash settled retentions that vested during the financial year at a value below that accrued in the prior year.

154

Grant Date Vesting Date Fair Value at Grant Date A$	2007	2007	2007	2007	2007
	Fair Value June 20071 A$	Award Fair Value at June 20072 A$	Expense 2007 A$	Cash Settled Award Liability at June 20073 A$	Equity Settled Award in ECR at June 20074 A$
LTI Awards Dec 2002 Jun 2007 838,204 Jul 2004 Jun 2007 6,990,396 Jul 2005 Jun 2008 8,066,725 Jul 2006 Jun 2009 10,264,064 Jul 2006 Jun 2007 2,053,170	10.29 10.29 8.91 14.81 14.81	2,167,115 8,341,589 9,264,333 14,878,822 3,152,664	2,093,326 5,122,007 4,148,427 4,959,607 1,050,888	2,167,115 8,341,589 6,176,222 4,959,607 1,050,888
Total LTI Awards 28,212,559		37,804,523	17,374,255	22,695,421	–
Retention Awards Dec 2002 Dec 2007 2,486,782 Jul 2005 Jul 2008 1,453,834 Sep 2005 Jun 2007 2,630,888 Sep 2005 Jul 2008 2,630,888 Oct 2006 Sep 2007 1,374,992 Oct 2006 Sep 2008 1,374,992 Oct 2006 Sep 2009 1,375,008 Oct 2006 Sep 2010 1,375,008	18.20 18.54 18.54 18.54 18.54 18.54 18.54 18.54	5,091,050 2,051,711 3,656,422 3,656,422 1,564,906 1,564,906 1,564,924 1,564,924	2,038,611 859,938 2,404,923 1,553,664 1,115,636 532,318 349,884 260,578	4,666,795 1,346,014 3,656,422 2,362,176	1,115,636 532,318 349,884 260,578
Total Retention Awards 14,702,392		20,715,265	9,115,552	12,031,407	2,258,416
Total 42,914,951		58,519,788	26,489,807	34,726,828	2,258,416

1 Represents the Lend Lease Corporation share price at 30 June 2007 for equity settled awards and the actuarial valuation at 30 June 2007 for cash settled awards.

2 Represents the value of Lend Lease Corporation share equivalents granted at their fair value at 30 June 2007.

3 Awards to be settled in cash and accordingly the obligation recognised as a liability.

4 Awards to be settled in shares and accordingly the obligation recognised in equity compensation reserve (ECR).

During the financial year ended 30 June 2007, the total expense recognised in the income statement in relation to LTI and retention awards was A$26.5 million. Of this total expense A$2.3million arose from equity settled share based payment awards.

2008 Annual Consolidated Financial Report Lend Lease Corporation155

Notes to the Consolidated Financial Statements continued

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 2008

	Shares Held	Shares		Shares Held
	at Beginning	Received	Other	at End of
	of Financial	During	Net Change	Financial
Year	Year	the Year1,2	to Shares	Year
Non Executive Directors
D Crawford 2008 2007 P Colebatch 2008 2007 G Edington 2008 2007 P Goldmark 2008 2007 J Hill 2008 2007 D Ryan 2008 2007 M Selway - Appointed 17 June 2008 2008 Executive Directors G Clarke 2008 2007 R Taylor 2008 2007 Executives S McCann 2008 2007 Former R Johnston3 2008 2007 R Burrows3 2008 2007	28,122 23,008 3,689 2,121 24,521 22,866 13,501 11,798 3,031 13,640 11,857 1,000 1,000 104,345 102,425 1,333 458 58,933 58,933 38,927 37,972	5,773 5,114 2,078 1,568 1,963 1,655 2,078 1,703 2,078 1,031 2,194 1,783 86,678 1,920 1,034 875 955	2,000 4,000 (58,933) (38,927)	33,895 28,122 5,767 3,689 26,484 24,521 15,579 13,501 5,109 3,031 15,834 13,640 4,000 1,000 1,000 191,023 104,345 2,367 1,333 58,933 38,927
Total 2008	291,042	103,876	(93,860)	301,058
Total 2007	272,438	16,604	2,000	291,042

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 From 1 July 2007 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’) is as follows:

	Consolidated	Consolidated	Company	Company
	June 2008	June 2007	June 2008	June 2007
	A$000s	A$000s	A$000s	A$000s
Short term employee benefts Post employment benefts	6,874 1,096	13,010 3,937	6,874 1,096	9,512 3,442
Share based payments Other long term benefts	1,626 58	12,306 608	1,626 58	8,899 608
	9,654	29,861	9,654	22,461

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.

156

36. Non Director Related Party Information

Consolidated Entities

Interests held in consolidated entities and by Lend Lease Corporation Limited are set out in Note 12. ‘Other Financial Assets’ and Note 28. ‘Consolidated Entities’ to the financial statements.

Lend Lease Corporation Limited

Lend Lease Corporation Limited provides a wide range of corporate services to its consolidated entities. Corporate management fees, which are priced at an arm’s length basis, are charged to these entities for these services (refer Note 2. ‘Revenue’). These services principally relate to:

Administration, company secretarial, accounting, legal, tax, insurance, information technology and public relations;
Human resources and employee services including the administration of salaries and superannuation, the provision of a defined benefit plan for a number of Australian employees (refer Note 15. ‘Defined benefit Plan Asset’) and share based payment plans (refer to Note 24. ‘Reserves’ and Note 34. ‘Employee Benefits’); and
Finance and treasury services, which includes working capital facilities and long term financing. Interest is only earned or incurred on long term loans provided to or drawn with subsidiaries based on project specific risks and returns (refer to Note 2. ‘Revenue’ and Note 4. ‘Other Operating Income and Expenses’). Outstanding balances arising from working capital facilities and long term financing are typically repayable on demand. In addition, financial guarantees are provided on the borrowings of subsidiaries (refer to Note 20. ‘Other Financial Liabilities’) for which guarantee fees are charged under normal terms and conditions (refer to Note 2. ‘Revenue’).

Other transactions and outstanding balances with consolidated entities are disclosed in Note 2. ‘Revenue’, Note 3. ‘Other Income’, Note 4. ‘Other Operating Income and Expenses’, Note 8. ‘Loans and Receivables’ and Note 17. ‘Trade and Other Payables’.

Consolidated Entities

Transactions that occurred during the financial year between entities in the Lend Lease Group include:

Provision of project management, design services, construction management and engineering services to development projects;
Provision of payroll, transaction and management services;
Provision of investment 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; and
Dividends received or due and receivable from subsidiaries.

Transactions between consolidated entities are priced on an arm’s length basis.

Associates and Joint Venture Entities

Interests held in associates and joint venture entities by Lend Lease are set out in Note 10. ‘Investments Accounted for Using the Equity Method’ to the financial statements.

Transactions provided by the Lend Lease Group to its associates and joint venture entities principally relate to:

Retail business: Provision of retail property management, asset management and development services;
Communities business: Development management services and the sale of development properties into Lend Lease managed funds. In addition Lend Lease provides long term loans on which interest is earned based upon project specific risks and returns. A subordinated non interest bearing loan has been provided to an associate and at 30 June 2008 the loan balance was A$25.5 million (June 2007: A$23.2 million);
Investment management: Provision of strategic investment advice, asset management and investment portfolio management services;
Project management and construction: Provision of construction, project management and design services;
Public Private Partnerships business: Provision of construction, project management and design services, asset and facilities management services. Loan stock is also provided to projects on which interest is earned based upon project specific risks and returns.

Except as noted above, transactions and outstanding balances are typically on normal terms and conditions.

2008 Annual Consolidated Financial Report Lend Lease Corporation157

Notes to the Consolidated Financial Statements continued

36. Non Director Related Party Information continued

Revenue earned by Lend Lease during the year as a result of transactions with its associates and joint venture entities is as follows:

venture entities is as follows:
	June 2008	June 2007
Revenue	A$m	A$m
Sale of development properties
Associates		167.5
Provision of services1
Associates	655.3	587.8
Joint venture entities	123.6	157.7

1 Includes A$5.1 million of Investment Management services (June 2007: A$6.0 million).

Other transactions and outstanding balances with associates and joint venture entities have been disclosed in Note 2. ‘Revenue’, Note 3. ‘Other Income’, Note 4. ‘Other Operating Income and Expenses’, Note 8. ‘Loans and Receivables’ and Note 17. ‘Trade and Other Payables’.

Managed Funds

Lend Lease holds investments in a number of property funds for which it is also the fund manager. In addition to those property funds classified as associates and joint venture entities (refer above and Note 10. ‘Investments Accounted for Using the Equity Method’), Lend Lease holds interests in property funds which are classified as available for sale financial assets (refer to Note 12. ‘Other Financial Assets’).

Transactions between the Lend Lease Group and such property funds classified as available for sale are priced on an arm’s length commercial basis. These transactions relate principally to:

Investment management: Provision of strategic investment advice, asset management and investment portfolio management;
Asset management: Provision of 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: Provision of property capital works, design and construction services, development and refurbishment and the sale of development properties.

During the year the following transactions occurred:

	June 2008	June 2007
	A$m	A$m
Revenue
Provision of services	64.5	53.1
Expense reimbursements to Lend Lease
Administrative and property rental expenses	27.2	21.4

37. Event Subsequent to Balance Date

Bovis UK Pension Scheme

158

Directors’ Declaration

In the opinion of the Directors of Lend Lease Corporation Limited (‘the Company’):
The financial statements and notes set out on pages 94 to 158 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 2008 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 .
The financial statements and notes also comply with International Financial Reporting Standards as disclosed in Note 1(a).
There are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.
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 2008.

Signed in accordance with a resolution of the Directors:

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D A Crawford Chairman Sydney, 21 August 2008

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G A Clarke
Managing Director
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2008 Annual Consolidated Financial Report Lend Lease Corporation159

Independent Auditor’s Report

Report on the Financial Report

to the Members of Lend Lease Corporation Limited

We have audited the accompanying financial report of Lend Lease Corporation Limited (‘the Company’), which comprises the balance sheets as at 30 June 2008, and the income statements, statements of changes in equity and cash flow statements for the year ended on that date, a description of significant accounting policies and other explanatory notes 1 to 37 and the Directors’ Declaration set out on page 159 of the Group comprising the Company and the entities it controlled at the year’s end or from time to time during the financial year.

Directors’ Responsibility for the Financial Report

The Directors of the Company are responsible for the preparation and fair presentation of the financial report in accordance with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act 2001 . This responsibility includes establishing and maintaining internal control relevant to the preparation and fair presentation of the financial report that is free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. In Note 1, the Directors also state, in accordance with Australian Accounting Standard AASB 101 Presentation of Financial Statements, that the financial report, comprising the financial statements and notes, complies with International Financial Reporting Standards.

Auditor’s Responsibility

Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. These Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report. We performed the procedures to assess whether in all material respects the financial report presents fairly, in accordance with the Corporations Act 2001 and Australian Accounting Standards (including the Australian Accounting Interpretations), a view which is consistent with our understanding of the Company’s and the Group’s financial position and of their performance. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

160

Auditor’s Opinion

In our opinion:

(a) The financial report of Lend Lease Corporation Limited is in accordance with the Corporations Act 2001 , including:
(i) Giving a true and fair view of the Company’s and the Group’s financial position as at 30 June 2008 and of their performance for the year ended on that date; and
(ii) Complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001 .
(b) The financial report also complies with International Financial Reporting Standards as disclosed in Note 1.

Report on the Remuneration Report

We have audited the Remuneration Report included in pages 74 to 89 of the Directors’ Report for the year ended 30 June 2008. The directors of the company are responsible for the preparation and presentation of the remuneration report in accordance with Section 300A of the Corporations Act 2001 . Our responsibility is to express an opinion on the remuneration report, based on our audit conducted in accordance with auditing standards.

Auditor’s Opinion

In our opinion, the Remuneration Report of Lend Lease Corporation Limited for the year ended 30 June 2008, complies with Section 300A of the Corporations Act 2001 .

KPMG

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C Hall Partner Sydney, 21 August 2008

2008 Annual Consolidated Financial Report Lend Lease Corporation161

shareholder stock exchange Listings and code Lend Lease Corporation Limited is listed on the information Australian and the New Zealand Stock Exchanges

Lend Lease Corporation Limited is listed on the Australian and the New Zealand Stock Exchanges and trades under the code LLC.

american depositary Receipts

In the US, Lend Lease shares are traded on the over-the-counter market in the form of sponsored American Depositary Receipts (ADRs) under the symbol LLESY. Each ADR represents one ordinary share. Information about ADRs is available from the depositary, The Bank of New York Mellon (www.adrbny.com).

share accumulation plan

The Share Accumulation Plan is designed to be a convenient way for shareholders with a registered address in Australia or New Zealand to build their shareholdings without incurring transaction costs. The laws of other countries make it difficult for us to offer shares in this way.

Lend Lease shareholders are able to reinvest their dividends to acquire more Lend Lease shares through the Dividend Reinvestment Plan (DRP) or the Share Election Plan (SEP). Shareholders may also make contributions of between A$500 and A$2,500 to acquire new Lend Lease shares under the Share Purchase Plan (SPP). Together the DRP, SEP and SPP constitute the Share Accumulation Plan.

The rules of each of these plans are set out in the Share Accumulation Plan Information Sheet. Copies are available on the Lend Lease website. Please note that the Share Election Plan and the Share Purchase Plan are currently suspended.

annual Report

Recent amendments to the Corporations Act allow companies to provide their annual reports to shareholders via a website rather than by hard copy and to provide hard copy annual reports only to those shareholders who elect to receive them in that form.

In the past Lend Lease shareholders have had the choice of receiving either a concise annual report or a full financial report or both. For the 2008 financial year and going forward, Lend Lease is simplifying the choices available and shareholders will now have the option of receiving either :

a full statutory annual report; or
a shareholder review.

Consistent with current practice, Lend Lease will make both the annual report and the shareholder review available online but for the 2008 financial year and going forward, a hard copy of one of either the annual report or the shareholder review will only be sent to those shareholders who elect to receive them in that form. In addition, you may elect to receive notification that the annual report and the shareholder review are available online.

privacy Legislation

Under Chapter 2C of the Corporations Act 2001 , a shareholder’s information (including the name, address and details of shares held) is required to be included in Lend Lease’s public register. This information must continue to be included in Lend Lease’s public register for seven years after a person ceases to be a shareholder. These statutory obligations are not altered by the Privacy Amendment (Private Sector) Act 2000 . Information is collected to administer the shareholder’s holding and if some or all of the information is not collected, then it might not be possible to administer the holding. Lend Lease’s privacy policy is available on our website. The Share Registry’s privacy policy is available on its website (www.linkmarketservices.com.au).

162

dividend and share accumulation plan issue price history

		Dividend		DrP	seP	sPP
		per	franking	Price	Price	Price
Payment Date	Dividend	share	rate	a$	a$	a$
26 September 2008	Final	34 cents	45%	9.357	suspended	suspended
26 March 2008	Interim	43 cents	40%	suspended	suspended	suspended
12 September 2007	Final*	42 cents	50%	suspended	suspended	suspended
27 March 2007	Interim*	35 cents	50%	suspended	suspended	suspended
13 September 2006	Final*	31 cents	100%	suspended	15.50	suspended
14 March 2006	Interim*	30 cents	100%	suspended	13.32	suspended
14 September 2005	Final*	29 cents	100%	suspended	13.14	suspended
8 March 2005	Interim*	28 cents	Nil	suspended	suspended	suspended
15 September 2004	Final*	26 cents	Nil	suspended	suspended	suspended
17 March 2004	Interim*	18 cents	Nil	suspended	suspended	suspended
18 September 2003	Final*	20 cents	Nil	10.64	suspended	suspended
19 March 2003	Interim*	10 cents	100%	8.71	8.71	8.71
19 September 2002	Final*	9 cents	100%	11.02	11.02	11.02
20 March 2002	Interim*	9 cents	100%	11.79	11.79	11.79
13 September 2001	Final*	8 cents	100%	10.97	suspended	10.97
14 March 2001	Interim*	13 cents	Nil	14.85	suspended	14.85
14 September 2000	Final*	32 cents	100%	19.82	19.82	suspended
15 March 2000	Interim*	32 cents	100%	20.34	20.34	20.34
16 September 1999	Final*	31 cents	100%	19.66	19.66	19.66
17 March 1999	Interim*	29 cents	100%	21.46	21.46	21.46
17 September 1998	Final	54 cents	100%	34.12	34.12	34.12
18 March 1998	Interim	53 cents	100%	35.06	35.06	35.06
18 September 1997	Final	50 cents	100%	30.48	30.48	30.48
19 March 1997	Interim	48 cents	100%	23.41	23.41	23.41
1 November 1996	Final	47 cents	100%	20.71	20.71	20.71
29 March 1996	Interim	43 cents	100%	17.47	17.47	n/a
3 November 1995	Final	38 cents	100%	16.89	16.89	n/a
28 June 1995	2nd Interim	11 cents	100%	16.84	16.84	n/a
31 March 1995	Interim	36 cents	100%	15.08	15.08	n/a
28 October 1994	Final	36 cents	100%	15.18	15.18	n/a
27 June 1994	2nd Interim	10 cents	100%	15.10	15.10	n/a
13 April 1994	Interim	34 cents	100%	16.10	16.10	n/a
22 October 1993	Final	33 cents	100%	suspended	suspended	n/a
15 July 1993	Special	10 cents	Nil	12.79	12.79	n/a
29 March 1993	Interim	33 cents	100%	suspended	suspended	n/a

1:1 bonus share issue was implemented in December 1998.

2008 Annual Consolidated Financial Report Lend Lease Corporation163

shareholder information continued

share information at a glance at 31 august 2008 (31 august 2007)

	2008	2007
Number of shareholders	52,378	49,879
Shares issued	401 million	401 million
Percentage owned by 20 largest shareholders	75.44%	76.28%
	43 cents per share	35 cents per share
Interim dividend	(40% franked)	(50% franked)
	34 cents per share	42 cents per share
Final dividend	(45% franked)	(50% franked)
Total dividend	77 cents per share	77 cents per share
Dividendpayout ratio	69.1%	69.2%

spread of shareholdings

Details of the spread of shareholdings at 31 August 2008 (31 August 2007) are as follows:

	2008	2007
1 to 1,000 shares	30,862	29,744
1,001 to 5,000 shares	18,315	17,191
5,001 to 10,000 shares	2,074	1,864
10,001 to 100,000 shares	1,043	978
100,001 shares and over	84	102
Total number of shareholders	52,378	49,879
Shareholders with less than a marketable parcel	2,204	1,241
	(representing	(representing
	50,897 shares)	12,680 shares)

twenty Largest shareholders at 31 august 2008

	No. of	% of Issued
Name	shares	Capital
HSBC Custody Nominees (Australia) Limited	76,530,735	19.08
National Nominees Limited	55,615,312	13.86
J P Morgan Nominees Australia Ltd	50,747,475	12.65
LL Employee Holdings Custodian Pty Limited	36,860,540	9.19
Citicorp Nominees Pty Limited	19,623,811	4.89
RBC Dexia Investor Services Australia Nominees Pty Limited	14,699,130	3.66
Cogent Nominees Pty Limited	12,255,428	3.06
ANZ Nominees Limited	8,906,002	2.22
Tasman Asset Management Ltd	6,634,473	1.65
Australian Reward Investment	5,943,277	1.48
AMP Life Limited	2,882,091	0.72
Queensland Investment Corporation	2,457,332	0.61
Argo Investments Limited	2,267,814	0.57
Bond Street Custodians Limited	1,572,297	0.39
Promina Equities Limited	1,451,838	0.36
Merrill Lynch (Australia) Nominees Pty Ltd	976,231	0.24
BT Portfolio Services Limited (WA)	874,485	0.22
UBS Wealth Management Australia Nominees Pty Ltd	823,606	0.21
UBS Nominees Pty Ltd	765,291	0.19
Fortis ClearingNominees P/L	703,177	0.18
		75.44

substantial shareholders as shown in the company’s Register at 31 august 2008

	Date of last		% of Issued
Name	Notice received	No. of shares	Capital
AXA Asia Pacifc Holdings Limited	22 August 2008	25,921,117	6.46
Balanced Equity Management Pty Ltd	15 July 2008	34,010,891	8.48
LL Employee Holdings Custodian Pty Limited1	21 November 2005	38,903,525	9.75
The Bank of New York Mellon Corporation	21 December 2007	20,527,138	5.12

1 This is a Lend Lease employee benefit vehicle.

164

Corporate Directory

Lend Lease Corporation Limited

ABN 32 000 226 228 Incorporated in New South Wales, Australia Registered Office Level 4, 30 The Bond 30 Hickson Road Millers Point NSW 2000

Telephone: 61 (2) 9236 6111 Facsimile: 61 (2) 9252 2192 Directors

D A Crawford, Chairman

G A Clarke, Managing Director and Chief Executive Officer

P M Colebatch G G Edington P C Goldmark J A Hill D J Ryan M W Selway R H Taylor

Secretary W Hara Stock Exchange Listings Australia New Zealand Auditors KPMG 10 Shelley Street Sydney NSW 2000

Share Registry and Shareholder Queries Principal Register

Link Market Services Limited Level 12, 680 George Street Sydney NSW 2000 Locked Bag A14 Sydney South NSW 1235 Telephone: 1800 230 300 (within Australia) or 61 (2) 8280 7123 (outside Australia) Facsimile: 61 (2) 9287 0303 Email: [email protected] Website: www.linkmarketservices.com

UK Register

B Davis & Co Park House 158–160 Arthur Road Wimbledon Park London SW19 8AQ

Telephone: 44 (20) 8947 3361 Facsimile: 44 (20) 8944 1039 Website: www.bdavis.co.uk

USA Agent

The Bank of New York Investor Services PO Box 11258 Church Street Station New York NY 10286-1258

Telephone: 1 (212) 815 3700 US Toll Free: 1 888 269 2377 Email: [email protected] Website: www.adrbny.com

Investor Information

Lend Lease’s Annual Report, financial statements and other information on the Lend Lease Group can be obtained from Investor Relations. Telephone: 61 (2) 9236 6065 Facsimile: 61 (2) 9252 2192 Email: lend.lease.investor.relations @lendlease.com.au Website: www.lendlease.com

Paper specifications

The cover and editorial section of this Report are printed on 9Lives 80, an environmentally responsible paper, containing 80 per cent post consumer fibre and 20 per cent totally chlorine-free pulp. It is an FSC certified mixed source paper, ensuring all virgin pulp is derived from well-managed forests. It is also manufactured by an ISO 14001 certified mill. The financials of this Report are printed on Sumo Offset which is manufactured under the environmental management system ISO 14001 using Elemental Chlorine Free (ECF) pulp sourced from sustainable, well managed forests. Its manufacturer UPM-Kymmene is recognised as the leading forestry and paper producer by the Dow Jones Sustainability Index.

The Forest Stewardship Council (FSC) is an international not-for-profit, non-government organisation promoting responsible forest management. FSC certification is recognised as a global standard in forest management practices and the Chain of Custody component ensures that the final product can be traced back to a certified source.

2009 Financial Calendar

Announcement of Half Year Results February Interim Dividend Payable March Announcement of Full Year Results August Final Dividend Payable September Annual General Meeting November

Annual General Meeting

precinct.com.au

Celebrating 50 years of Lend Lease

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lendlease.com
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AI assistant

LENDLEASE GROUP — Annual Report 2008

65243_rns_2008-10-13_8a81d042-85cb-44de-bc0c-eb184dfc28a8.pdf

Stock Exchange Announcement

2008 Annual Report to Shareholders

14 October 2008

Lend Lease 2008 Annual Shareholder Review

About Lend Lease

2008 performance at a glance

111.5¢

77¢

highlights

operational

Construction backlog gross profit Margin

financial

Continued strong performance

geographic diversification

~~Communities~~

~~retail~~

~~public private partnerships (ppp)~~

Quick facts

Chairman’s report

2008 marks the

Outlook

Chief executive officer’s report

strategic framework

Lend Lease

retail report

CAse sTudy: Australian retail

Communities report

CAse sTudy: Mawson Lakes breaks down barriers

public private partnerships report

CAse sTudy:

CAse sTudy: durrat Al bahrain Islands in the sun

CAse sTudy:

environment

safety

people

directors’ profiles

D A Crawford

G A Clarke Managing Director (Executive) Age 50

Chairman (Non Executive) Age 64

experience and Qualifications

experience and Qualifications

other directorships and positions

other directorships and positions

P M Colebatch (Non Executive) Age 63

experience and Qualifications

other directorships and positions

G G Edington CBE (Non Executive) Age 62

experience and Qualifications

directors’ profiles

P C Goldmark (Non Executive) Age 67

experience and Qualifications

J A Hill (Non Executive) Age 62

experience and Qualifications

other directorships and positions

other directorships and positions

D J Ryan AO (Non Executive) Age 56

M Selway

R H Taylor (Executive) Age 46

(Non Executive) Age 49

experience and Qualifications

experience and Qualifications

other directorships and positions

director and executive remuneration

online

paper specifications

annual general Meeting

Celebrating 50 years of Lend Lease

About Lend Lease

29.4%

43.0%

~~Retail~~

~~Communities~~

~~Public Private~~

~~Partnerships (PPP)~~

~~Project Management and Construction~~

~~Investment~~

~~Management~~

LENDLEASE GROUP Annual Report 2008

Communities

retail

public private partnerships (ppp)

Retail

Communities

Public Private

Partnerships (PPP)

Project Management and Construction

Investment

Management

Retail

Retail

Communities

Public Private

Project Management and Construction

Investment

Management