LENDLEASE GROUP - Annual Report 2009

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Stock Exchange Announcement 2009 Annual Report to Shareholders

12 October 2009

Attached are copies of the 2009 Shareholder Review and 2009 Annual Report to Shareholders for Lend Lease Corporation to be sent to shareholders who have elected to receive a copy.

These documents are also available online at www.lendlease.com.

ENDS

Lend Lease Corporation Limited ABN 32 000 226 228 Level 4, 30 The Bond 30 Hickson Road Millers Point NSW 2000 Australia

Telephone +612 9236 6111 Facsimile +612 9252 21921 www.lendlease.com

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Lend Lease Creating sustainable landscapes 2009 Annual Shareholder Review

ImPortant DateS In 2010

February*	Announcement of Half Year Results
March March	Sharepricequoted ex dividend Interim dividend record date
March*	Interim dividendpayable
August*	Announcement of Full Year Results
August August September*	Sharepricequoted ex dividend Final dividend record date Final dividendpayable
November*	Annual General Meeting

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

Performance at a glance for 2009

Operating profit after tax[1] Full year dividend[3] $307.5M 41¢ Statutory loss after tax Gearing[4] ($653.6M) 2.9% Earnings per share[2] Credit rating 72.5¢ BBB-/Baa3

Standard & Poor’s/Moody’s

Operating profit after tax excludes non operating adjustments.
Dividends include interim dividend of 25 cents franked to 60% and final dividend of 16 cents franked to 100%.
Calculated based on operating profit after tax and total weighted average number of shares on issue including treasury shares.
Calculated as net debt including other non current financial liabilities, divided by total tangible assets, less cash.

Lend Lease Corporation Limited ABN 32 000 226 228

Lend Lease

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

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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 close to US$8 billion each year.

About Lend Lease Lend Lease is one of the world’s leading fully integrated property solutions providers,

meet sOme Of Our peOpLe On pAges 16–25.

with strong development management, investment management, project and construction management and asset and property management capabilities.

We primarily operate in Australia, Asia, the UK, Europe, the Middle East and the US, and have built up a long and successful track record in these countries, creating many iconic and admired precincts, spaces and buildings.

Our philosophy Founded in Sydney in 1958 by Dutch immigrant and innovator Dick Dusseldorp, the group was born out of a vision to create a company that could successfully combine four disciplines; property, financing, development and investment. Lend Lease’s vision is to be the leading international property company.

Sustainability has been an integral part of our culture, as we believe every action adds up. Through design and investment in new technologies, we are committed to delivering the next generation of sustainable property solutions. We are committed to being Incident & Injury Free wherever we have a presence. This philosophy reaches every part of our operations and extends to employees, partners, clients, suppliers and subcontractors.

We are committed to creating and building innovative and sustainable solutions, forging partnerships and delivering strong investment returns.

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IntrOducIng Our peOpLe

thrOugh the effOrts Of Our OutstAndIng peOpLe, Lend LeAse tAkes A LeAdershIp rOLe In suppOrtIng InnOvAtIOn And InspIrIng chAnge sO Our Industry cAn cOntrIbute tO ecOnOmIc grOwth, ecOLOgIcAL bALAnce And sOcIAL prOgress.

www.lendlease.com/sustainability/pdf/ From_Aspirations_to_Actions.pdf

highlights five-year performance

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Dividends per share [1]
41¢
05 06 07 08 09
¢ 34¢
¢ ¢ 42
29 31 ¢
16
¢ ¢ ¢ ¢ ¢
28 30 35 4335 25
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Operational

primarily due to the acquisition of the Lend Lease Primelife management rights.

construction backlog gross profit margin

Global construction
backlog gross profit margin as at 30 June 2009 was $690.1 million, which provides a solid earnings base for FY2010.

development pipeline

Lend Lease continues to have a strong development pipeline, securing preferred bidder status on the $2.5 billion RNA Showgrounds project in Brisbane during the year.

funds under management

Funds under management increased to $9.9 billion,

Contribution to operating profit after tax from business units[*]

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7% Investment Management
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14% Retail
21% Communities
18% Public Private Partnerships
40% Project Management and Construction
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Interim

Final

Before corporate and non operating adjustments.

financial

continued strong performance
Earnings per share of 72.5 cents, down 33% in line with lower Net Operating Profit after Tax.
Dividend per share of 41 cents, representing a payout ratio of 61% of operating profit after tax.

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Operating profit after tax [2]
$307.5m
M M M M M
$285.7 $354.2 $445.9 $435.9 $307.5
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05 06 07 08 09
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2009 dividends include interim dividend of 25 cents franked to 60% and final dividend of 16 cents franked to 100%.

balance sheet strength

As at 30 June 2009, our net debt to total tangible assets, less cash was 2.9% and our weighted average debt maturity on drawn debt was eight years, with the earliest maturity date being November 2010.
Interest cover was 5.2 times, in line with management target of 5 times.

Dividend payout ratio[2] 61%

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% % % % %
80 69 69 71 61
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05 06 07 08 09

Operating profit after tax excludes unrealised property investment revaluations, inventory carrying value adjustments, goodwill impairments, other carrying value adjustments, savings implementation costs and a net gain on closure of the Bovis UK pension scheme

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Earnings per share [3]
72.5¢
¢ ¢
¢ ¢ ¢
71.6 88.7 111.4 108.7 72.5
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05 06 07 08 09

to future accrual. These are referred to as ‘non operating adjustments’.
Calculated based on operating profit after tax and total weighted average number of shares on issue including treasury shares.

Our value proposition

Mission Health System – Dogwood Surgical and ICU Tower, Asheville, North Carolina, USA 2. Signature Place, Tampa, Florida, USA 3. New York-Presbyterian Hospital – Vivian and Seymour Milstein Family Heart Center, New York, USA 4. One Rincon, San Francisco, California, USA 5. Dock 5, Victoria Harbour, Melbourne, Australia 6. The Gauge, Victoria Harbour, Melbourne, Australia 7. Lonza Plant 1, Singapore 8. 201 Bishopsgate and Broadgate Tower, London, UK 9. 200 Aldersgate, London, UK 10. The Curve, Leicester, UK

the Lend Lease value proposition is very simple – we see more value in property. Our integrated property model and strategy allow us to see more value opportunities in each property project, which means we should be able to achieve higher returns on capital for our shareholders, our partners and our clients.

core competency unique asset creation capabilities: Lend Lease’s fully integrated capabilities span the property value chain, creating sustainable property solutions.

knowledge and experience global and local property expertise: Lend Lease’s ability to attract the best people, combined with its deep market knowledge, underpins long-term earnings potential.

Our approach

generating multiple earnings opportunities: Lend Lease’s integrated end-to-end property solutions, combined with its approach to partnering and diverse project pipeline, maximise returns on capital for shareholders and partners.

Agility and flexibility

Innovation

Optimising value over the long term: Lend Lease is committed to providing leadership in innovation and sustainable property solutions.

maximising opportunities through market cycles: Lend Lease’s model is flexible and agile, allowing the group to respond quickly and strategically at each stage of the property cycle.

4/5

Americas Asia Pacific Europe 30% 55% 15%

Contribution to operating profit after tax bY geograpHY from business units

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chairman’s report

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the year ended June 2009

Against the unprecedented market conditions, the Group delivered operating profit after tax of $307.5 million, slightly above guidance given on 11 May 2009 of operating profit after tax of circa $300 million for the year. The earnings decline compared to the prior year was primarily due to a lower contribution from capital recycling and subdued conditions in the Australian and UK residential markets.

Lend Lease reported a statutory loss after tax for the year of $653.6 million, reflecting net write-downs and charges.

Directors declared a final dividend of 16 cents, franked to 100%, representing a payout ratio of 61% of operating profit after tax for the full year ended 30 June 2009.

Looking ahead

Following a smooth transition, from former Managing Director and CEO, Greg Clarke, to Steve McCann, we have made some important refinements to our fully integrated property group strategy and business model.

Steve ran the Group’s global Investment Management business from September 2005 and was appointed Finance Director from March 2007 before being appointed CEO in December 2008. Prior to joining Lend Lease he had been a long-term financial adviser to Lend Lease. He has a deep understanding of our business.

Lend Lease is well placed to deliver improving value for shareholders as we work towards that objective and conditions improve. The Company has significant headroom under its banking covenants and its capital position was enhanced by the $302.5 million of equity issued earlier in the year. As a result, Lend Lease has the capacity today to fund all of its committed development pipeline over the next three years, with cash and cash equivalents of over $1 billion and strong underlying cash flows.

That capacity is enhanced by the Group’s partnership model and reputation as a leading property investment manager, providing access to third party capital. This enables Lend Lease to pursue the best opportunities available at each stage of the property cycle and deliver a higher return on Lend Lease’s capital. Underpinning this development earnings potential is a solid base of recurring earnings from investment management income from fees and co-investments.

Disciplined capital management and conservative borrowing during the good times meant that Lend Lease was able to navigate the global financial crisis to perform well, on a relative basis, over the year to June 2009 and remain in a strong financial condition. Conditions remain uncertain but the efforts of governments around the world appear to be helping to stabilise the situation. We remain cautious but also confident that Lend Lease is well placed to take advantage of opportunities ahead of many competitors.

The construction and PPP businesses have performed well this year and, while we expect it to remain difficult to source new construction projects from the private sector for at least the next year, both these businesses are now accessing significant opportunities from government stimulus packages.

Sustainability has been an integral part of the Group’s culture for 50 years. We not only believe the principle, we also know it is the smart thing to do. Lend Lease is proudly recognised as a leader in sustainability in the property industry.

Lend Lease continues to intensify its commitment to operating Incident & Injury Free. The scale of that vision is brought into focus with eight sub-contractor employee fatalities globally this year, despite good reductions in the overall rate of incidents and injuries. Our aim continues to be to operate Incident & Injury Free.

outlook and dividend policy

Given the ongoing uncertain conditions, Lend Lease is not providing specific short-term earnings guidance. Directors and management continue to be positive about the Group’s operating outlook and remain focused on optimising total shareholder returns from all the Group’s activities.

Long-term shareholder returns will not be sacrificed to meet short-term earnings targets through sub-optimal asset sales or other capital measures. At this point in the cycle, you should expect to see Lend Lease taking advantage of its very low leverage and investing capital to secure the best positions and develop the most appropriate projects in the pipeline as conditions improve.

With effect from the interim dividend 2010, Lend Lease is changing its dividend policy. Lend Lease will change its dividend payout ratio from the range 60% to 80% of operating profit after tax to 40% to 60% of operating profit after tax. Lend Lease will frank the dividend to the maximum extent possible on a sustainable basis.

David Crawford AO Chairman

chief executive Officer’s report

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8/9
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The 2009 financial year was impacted by one of the toughest and broadest downturns the property markets have yet seen. Fortunately, we entered the downturn in excellent financial shape. While we have been primarily focused on protecting that position through prudent capital management and cost reductions, we have also been positioning the business to capture the best opportunities likely to arise from the next market growth cycle.

We are strategically positioned to leverage off a number of major trends in the property market globally, particularly urbanisation, ageing of populations, government stimulus spending and commercialisation of sustainability.

• In 40 years time, 27% of the world’s population is expected to be over the age of 65 compared to approximately 15% today. Lend Lease’s position as a premier manager of retirement properties in Australia means we are well placed to capitalise on this trend.

• Many governments have ambitions to reduce carbon emissions and to deliver sustainable communities. This also plays well to our strengths.

Our superior delivery capability and strong reputation for collaboration make us an ideal partnership candidate for government projects being rolled out under stimulus packages in various countries.

realising shareholder value from our advantages

While having a strong balance sheet and multiple growth options are big advantages at this stage of the cycle, they will not automatically translate into improving shareholder value.

The tactical actions to secure that value in the short term are largely complete. The cost base has been right-sized to adjust for the downturn in volumes across most of our businesses. Capital is being preserved by reprioritising developments in line with market conditions and targeting key, strategic projects that build backlog for all Group businesses. We are maintaining active management of capital already invested in the business and all businesses are focused on optimising cash flows.

To maximise longer-term potential shareholder value from the Group’s strong position, I have worked with the senior executive team and Board of Directors to develop a clear set of objectives and operating principles for the Group.

It is a great privilege to be chosen to lead the Lend Lease team in the year that the Company celebrated 50 years of property industry leadership. Lend Lease has a proud history and I will work hard with my senior management team to drive shareholder value and contribute positively to the Group’s culture and legacy.

We have not fundamentally changed our strategy or business model but have made important refinements to performance management, portfolio management, capital recycling and collaboration across our businesses.

Steve McCann Chief Executive Officer and Managing Director

performance targets

We are focused primarily on shareholder return as measured by Return on Equity and Return on Capital. Earnings per share growth remains an important measure but is not the key driver of decisions. Key Performance Indicators for employees, even in the short term, have regard to progress towards delivering the appropriate longer-term return on capital and other key metrics for the relevant business. Other performance measurements include strategic initiatives, people management and operational excellence targets. Embedded in all of our businesses is our culture of safety first and we will continue to work tirelessly to achieve an Incident & Injury Free workplace.

portfolio management

We measure and monitor our capital allocation rigorously. In the short term we plan to rebalance our portfolio toward Australia to reinforce our leadership position in our home market. Diversifying the Group’s earnings will remain an important goal – but only where we can achieve scale operating platforms in our chosen sectors and geographies over a realistic time frame and where we can work safely.

capital recycling

Lend Lease is not a distressed seller of assets and we will not sell assets to hit short-term profit targets. Instead, we will recycle capital only when it delivers acceptable shareholder returns and to fund future growth opportunities.

collaboration to maximise earnings

All Lend Lease companies will increase their focus on the benefits of our fully integrated business model. We have taken significant steps in this regard, including the merger of our development and investment management teams in all regions.

Lend Lease is well placed to deliver attractive growth in shareholder value over the long term. We will measure our progress against how well we perform against the initiatives and priorities I have set out in this report. I am confident that we will deliver against those measures. As we do so, shareholders should see Lend Lease re-positioned as a recognised leader internationally in the provision of world-class property solutions, with all of the attendant growth opportunities that such recognition will bring.

Our capabilities

with capabilities that span the entire property value chain, from the origination of opportunities through to the delivery of great property outcomes, we can offer investors and clients one element or an end-to-end solution.

development management

Lend Lease has a proven track record in creating and managing complex mixed-use property developments incorporating large scale commercial, residential, retail, master planned communities and senior living.

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2009 Annual Shareholder Review Lend Lease Corporation

Investment

management

Lend Lease has 50 years experience in property investment management. Today, our global investment management platform spans Asia, Australia, the UK and the US.

Our investment management team is committed to delivering global real estate products and investment solutions tailored to the needs of institutional investors.

project management & construction

Lend Lease’s global project management and construction business, Bovis Lend Lease, is one of the world’s leading construction companies. Bovis Lend Lease offers a range of services spanning the design and construction delivery process across a range of sectors including commercial, retail, residential, industrial, pharmaceutical, mixed-use, health, education, transport and defence.

Asset & property management

Our asset and property management capabilities cover leasing, marketing, centre management and facilities management, enhancing the value of property and optimising income and total returns for the asset’s investors.

development management

Investment management

Our capabilities

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retaiL
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residentiaL
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project management & construction

Asset & property management

CommerCiaL infrastruCture

retirement

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Our strategy

Our strategic path forward

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Lead
build • World
class
property
• Reshape
Restore solutions
portfolio
company
• Operational
• Right structure • Strong
excellence
integrated
• Cost out
• Grow offering
• Drive efficiency platforms
• Trusted
• Capital • Invest investment
management in people manager
phase 1 phase 2 phase 3
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14/15

Our segment summary retail	communities	public private partnerships	project management and construction	Investment management
Core Activities Asset ownership, development, property and asset management	Masterplanned urban communities, inner city apartments and senior living	Military housing, healthcare, education and waste	Project management and construction	Asset ownership, real estate investment management services
Operating Revenue $125.8m	$586.4m	$1,507.0m	$12,422.0m	$69.1m
Proportion of Proft After Tax from Operating Businesses1 1. Before corporate and non operating adjustments. 14%	21%	18%	40%	7%
Regional Business Operations Australia, Singapore, UK, US	UK, Australia, US	UK, US	UK, Europe, Middle East, Americas, Asia Pacifc	Australia, Singapore, UK, US

Lend Lease

we see more value in property

retail report

for the year ended 30 June 2009

	~~Operating result $m~~ ~~09~~ ~~08~~ Operating proft after tax 60.3 66.1 Propertymanagement (8.4) (14.2) Investment income 68.7 80.3 Operating proft after tax by geography Asia Pacifc 8.9 1.7 Europe 24.0 42.3 Americas 27.4 22.1

Lend Lease holds an ownership interest in 10 centres.
The market value of Lend Lease’s interests in these centres declined to $1.5 billion, down from $2.0 billion in 2008. This was primarily due to weakening of capitalisation rates, principally in the UK.
Operating profit after tax has remained robust, primarily due to comparatively stable income from the Bluewater and King of Prussia shopping centres.

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Construction of 313@somerset, Singapore

Joseph Goh prOject mAnAger bOvIs Lend LeAse

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2009 Annual Shareholder Review Lend Lease Corporation

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cAse study:

313@somerset, singapore exciting singapore retail opening

In August 2006, Lend Lease secured the highly coveted Somerset site from the Urban Redevelopment Authority of Singapore for S$617.2 million to build a new regional shopping mall – 313@somerset.

Lend Lease is working on all phases of the project, from development, leasing, project management and construction to asset and property management services on completion. Lend Lease and the Lend Lease Asian Retail Investment Fund are the owners of 313@somerset.

313@somerset is scheduled for opening in December 2009 and will showcase eight levels of retail, targeting mid level food and fashion in an exciting dynamic environment. The centre’s vision is to be one of the leading retail destinations in mid to upper-mid fashion, food and lifestyle and will open 100% leased.

The leasing team at 313@somerset has secured international fashion retailer Zara, which is launching a three-level flagship store in the new mall. Brand names also supporting the fashion mix include a four level Forever 21 and well known UK brand New Look. These retailers will be joined by market brands Esprit, Mango, Lacoste and Levi. 313@somerset was awarded the highest sustainability recognition in Singapore from the Building & Construction Authority – Green Mark Platinum award in 2008.

313@somerset has the first Registered Training Organisation for its retailers, offering free accredited training courses. This is a first for Lend Lease globally and a first for a retail mall in Singapore. It is expected that over 1,000 retailer employees will be trained in this facility in the next 12 months.

the centre’s vision is to be one of the leading retail destinations in mid to upper-mid fashion, food and lifestyle.

Some key highlights of 313@somerset’s sustainability journey to date include:
greater than 30% reduction in energy consumption compared to code compliant building through design and equipment selection;
generation of renewable energy via photovoltaic arrays;
detailed carbon footprint analysis and reduction strategy;
retailer sustainability initiatives and commitments;
thermal energy storage to increase energy conservation;
co-generation of heat and electricity via bio-fuel for use within the centre;
sustainability education strategies for our community, retailers and customers; and
the centre is the first retail development in Singapore to introduce Green Lease Agreement.

wIth suppOrt Of the retAIL teAm, jOseph hAs cArrIed Out An AmbItIOus prOject tO buILd A green retAIL centre In sIngApOre, eArnIng 313@sOmerset A green mArk pLAtInum AwArd In 2008.

Our people

communities report

for the year ended 30 June 2009

	~~Operating result $m~~ ~~09~~ ~~08~~ Operating proft after tax 88.3 100.3 Asia Pacifc 99.9 82.7 Europe (10.4) 21.1 Americas (1.2) (3.5) gross value ofpre-sales Asia Pacifc 339.3 589.4 Europe 28.5 41.6

Global Communities

operating profit after tax declined 12% to $88.3 million, from $100.3 million in 2008. This was due to a significant decline in residential sales and settlements as a result of weak trading conditions in both the UK and Australia.

In light of the difficult market conditions in the UK and Australian residential markets, the Communities business has reduced the carrying value of its inventory and other assets and has written off the goodwill in relation to the Crosby Lend Lease business in the UK and the Australian Communities businesses.
The Communities business has a residential backlog of 102,040 units and a total commercial backlog of 4.7 million square metres.

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During the year, Lend Lease completed the acquisition of a 43.2% interest in Lend Lease Primelife (previously Babcock & Brown Communities) and the associated management rights.
In Asia Pacific Communities, profit after tax included the profit from the sale of its interest in seven retirement villages and an aged care facility to Lend Lease Primelife.
In the UK, conditions for the Communities business remain very challenging. Despite this, we remain well placed with three of the major urban regeneration projects in London: Greenwich, Elephant & Castle and the Athletes Village.
The Communities business in the US involves one project, Horizon Uptown, which is in the planning/approval stages and which Lend Lease will only commence when market conditions recover.

Val lowman mAnAgIng dIrectOr beOnsIte

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2009 Annual Shareholder Review Lend Lease Corporation

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Aerial view of construction at Stratford, United Kingdom

cAse study: stratford, united kingdom the Athletes village

The Athletes Village is one of the most significant urban developments in the United Kingdom and is part of the broader masterplan for a new piece of city in east London.

In the short term, the Athletes Village will provide thousands of beds for athletes and officials during the London 2012 Olympic and Paralympic Games. After 2012, it will transform into a lively residential community featuring an Education Academy, community and healthcare facilities, and numerous parks and open spaces, all located within a short train journey to central London.

The Athletes Village development is publicly owned with investment from the Olympic Delivery Authority’s (ODA’s) budget. The ODA is overseeing the delivery of the Athletes Village, with Lend Lease appointed as development manager and Bovis Lend Lease as the construction manager.

phase One will deliver:

• 2,819 homes (with 1,004 of these affordable) targeting Level 4 of the code for sustainable homes (uk green building certification).

Over 10 hectares of open space.

• An Academy education campus catering for 1,800 students.

Transport facilities and global connections to international stations.

The Village will be designed and built in a way that requires lower energy demand, using materials and construction processes that have low embodied energy. The Village will also seek to minimise waste and increase recycled content in design and construction. Water savings are a key focus, with water efficient measures being applied during construction of the Village and water efficient fixtures and fittings to be used throughout to reduce overall water demand. Site wide water use will be complementary to the ecology and design of the landscape.

Design, planning and construction have made significant progress since work began on the permanent foundations of the Village in June 2008. Construction of all 11 residential plots is now underway.

vAL hAs been cOmmItted tO deLIverIng LOcAL empLOyment And skILLs sInce 1995 wIthIn bOvIs Lend LeAse uk. vAL wAs AwArded An Obe fOr her wOrk In cOnstructIOn skILLs trAInIng And beOnsIte thIs yeAr.

Our people

public private partnerships report

for the year ended 30 June 2009

	~~Operating result $m~~ ~~09~~ ~~08~~ Operating proft after tax 74.4 59.0 Europe 6.2 (13.2) Americas 68.2 72.2 projects secured/closed during period europe Preferred bidder – secured 1 – Financial close 1 1 Americas Preferred bidder – secured – 1 Financial close – 6

QuIck fActs:

In the US, Lend Lease’s Public Private Partnerships (PPP) business, Actus Lend Lease, delivered a profit after tax of $68.2 million, down from $72.2 million in 2008, as no projects reached financial close during the year.

client: Lancashire county council (Lcc)

project company: catalyst education Lancashire Ltd construction value: €310 million/£220 million

Actus Lend Lease currently has 19 projects.

total project funding: €352 million/£250 million construction: Aug 2006 – sept 2010 concession period: 25 years

In the UK, Lend Lease’s PPP business delivered a profit after tax of $6.2 million, after a loss of $13.2 million in 2008. June 2008 operating loss after tax of $13.2 million has been adjusted from an operating profit after tax of $0.8 million to reflect the impact of adopting accounting standard AASB Interpretation 12 Service Concession Arrangements .

building contractor: bovis Lend Lease

facilities management: vita Lend Lease

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Cate Collins heAd Of sustAInAbILIty – AsIA pAcIfIc Lend LeAse

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20/21

2009 Annual Shareholder Review Lend Lease Corporation

cAse study: Lancashire, united kingdom building schools for the future program

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Pendle Vale College and Community High School entrance, part of the first phase of the BSF program in East Lancashire

Building Schools for the Future (BSF) is the largest single schools capital investment program in the UK for over 50 years. Catalyst Lend Lease has formed a Local Education Partnership (LEP) with Lancashire County Council to deliver the BSF program in East Lancashire.

The first ‘wave’ of this program involves the provision of 14 schools and two academies, spread over three phases. It represents the largest single investment ever made in secondary education in this area of the county.

The first phase, seven schools on three sites – Shuttleworth College, Burnley Campus and Pendle Vale – opened in September 2008.

Two schools from the second phase, Sir John Thursby Community College and Ridgewood Community High School, have opened successfully. The remaining five phase one schools will all open in 2010, together with Accrington Academy. In June 2009 Catalyst Lend Lease reached financial close with the County Council for the third phase of the program, involving

All the schools will be equipped with carbon neutral biomass boilers and energy saving measures.

a further three schools. In addition, the LEP will upgrade Accrington Academy and the Academy for North Preston.

Sustainability is a key factor in the new schools, both in regards to environmental credentials and through the creation of a local skills legacy, led by Catalyst Lend Lease and the BSF supply chain.

All the schools will be equipped with carbon neutral biomass boilers and energy saving measures such as wind turbines, solar collectors and photovoltaic cells, together with rainwater harvesting to reduce water consumption.

The skills legacy plan has been extremely successful, with over £40 million of contracts being awarded to Lancashire businesses and over 40 new jobs created for local school leavers with companies working in the supply chain.

cAte wAs AwArded the AustrALIAn fInAncIAL revIew bOss mAgAzIne’s yOung executIve Of the yeAr. cAte hAs been InstrumentAL In the desIgn, pLAnnIng And mAnAgement Of sustAInAbILIty strAtegIes fOr the Investment mAnAgement busIness gLObALLy And Is nOw respOnsIbLe fOr mAnAgIng the cOmmercIALIsAtIOn Of sustAInAbILIty AcrOss the AsIA pAcIfIc busInesses.

Our people

project management and construction report

for the year ended 30 June 2009

	~~Operating result $m~~ ~~09~~ ~~08~~ Operating proft after tax 168.9 150.0 Asia Pacifc 94.7 69.0 Europe 39.0 21.3 Americas 35.2 59.7 proftabilityratio(ebItdA/realised gpm) 39% 34% Asia Pacifc 61% 50% Europe 30% 19% Americas 25% 34% gross margin(realised gpm/revenue) 5.2% 4.7%

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 UK projects where loss provisions were taken in prior years.
Bovis Lend Lease delivered a strong result due to a standout performance in Australia.
Global profit after tax was $168.9 million, up 13% on the June 2008 result of $150.0 million. The profitability ratio increased from 34% to 39%, principally due to the higher profit contribution in Europe and Asia Pacific.
In the Americas, profit after tax was impacted by costs relating to a fire at the former Deutsche Bank building in New York.
In Asia Pacific, profit after tax was up 37% to $94.7 million from $69.0 million in 2008, on the back of continued strong market conditions, particularly for social infrastructure. Since April 2009, Bovis Lend Lease has secured circa $1 billion of education work under government stimulus packages.
Backlog gross profit margin decreased by 12% from $788.3 million to $690.1 million, with 58% expected to be realised in the 2010 financial year.

==> picture [90 x 121] intentionally omitted <==

Kirstin riCh

AssIstAnt dIrectOr Of prOperty mAnAgement, fOrt drum mOuntAIn cOmmunIty hOmes Actus Lend LeAse

==> picture [50 x 181] intentionally omitted <==

22/23

2009 Annual Shareholder Review Lend Lease Corporation

==> picture [192 x 181] intentionally omitted <==

Construction of ANZ Centre, Melbourne, Australia

cAse study: Anz centre, Australia Office accommodation

In 2006, Lend Lease agreed commercial terms with ANZ to develop circa 83,500 square metres of office accommodation at its landmark Victoria Harbour development in Melbourne. Lend Lease was engaged to provide development management services, with project management, design and construction services provided by Bovis Lend Lease.

Site work commenced in late 2006 and is due for completion in late 2009. ANZ Centre, when completed, will be the largest single tenanted commercial building in Australia, accommodating up to 6,500 employees. The building is located on the new extension of Collins Street and is bounded by the Yarra River and Docklands Park. The proximity of the project to the Yarra River required 1,500 piles, driven to a depth of 35 metres – the equivalent of a 10-storey building underground. In addition, 97 specially imported steel tube piles were driven

Anz centre, when completed, will be the largest single tenanted commercial building in Australia.

up to 40 metres into the riverbed to form the support on which the Yarra River Boardwalk will sit.

All areas within the building are a maximum of 12 metres from a natural light source, improving the workplace environment and reducing energy consumption.

Sustainability features in the building include energy generation via an on-site gas-fired tri-generation unit, 1,000 square metres of solar cells, and roof-mounted wind turbines. A blackwater treatment plant will recycle all waste water for reuses such as toilet flushing and cooling towers.

The project is registered for three Green Star ratings from the Green Building Council of Australia.

The project was awarded the Excellence in Health & Safety award at the Master Builders Association of Victoria’s 2009 Excellence in Construction Awards.

kIrstIn, wOrkIng In pArtnershIp wIth the us mILItAry And AffILIAted OrgAnIsAtIOns, hAs deveLOped A number Of sOcIALLy sustAInAbLe prOgrAms thAt unIfy the dIspArAte And dIverse set Of peOpLe whO LIve At fOrt drum, creAtIng A new mILItAry LIfestyLe.

Our people

Investment management report

for the year ended 30 June 2009

	~~Operating result $m~~ ~~09~~ ~~08~~ Operating proft after tax 28.9 137.3 Funds management 8.4 54.1 Investment income 20.5 83.2 Operating proft after tax by geography Asia Pacifc 27.1 71.8 Europe 3.1 61.9 Americas (1.3) 3.6

Total operating profit after tax for Investment Management declined to $28.9 million from $137.3 million. This was principally due to the prior year including a profit after tax of $40.1 million from the sale of a proportion of the Group’s interest in Australian Prime Property Funds (APPF) and in Europe, a tax exempt dividend of $47.9 million from the Group’s interest in the advisor company Lend Lease Global Properties, SICAF in relation to incentive fees.
Funds under management increased by $0.6 billion to $9.9 billion, principally due to the acquisition of the Lend Lease Primelife management rights.

==> picture [102 x 133] intentionally omitted <==

Lend Lease Investment Management won the third annual Melbourne Financial Services Symposium Investment Stewardship Award for Funds Management, recognising long-term achievement. The award was presented in Melbourne on 2 March 2009.
Lend Lease Investment Management signed a memorandum of understanding during the year with the Clinton Climate Initiative to work together on opportunities to significantly reduce the environmental impact of buildings by accelerating retrofits to maximise energy efficiency and reduce greenhouse gas emissions.

riChard miChaels vIce presIdent, senIOr superIntendent, bOstOn, mAssAchusetts bOvIs Lend LeAse

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24/25

2009 Annual Shareholder Review Lend Lease Corporation

cAse study:

Appf commercial commercial assets in excess of $1 billion

==> picture [192 x 181] intentionally omitted <==

APPF Commercial was established in 1994 and has gross assets of over $1 billion across a portfolio of prime commercial properties in Australia. The Fund’s portfolio comprises interests in 11 properties, with a strategic weighting to eastern seaboard central business district office markets.

APPF Commercial has a sustainability strategy which was endorsed in 2007 to be recognised as a leading environmentally sustainable property fund within the Australian marketplace.

APPF Commercial views sustainability as not only an opportunity to reduce operating costs, enhance tenant relations and improve the competitiveness and performance of its investments, but also as a social responsibility.

the fund’s portfolio comprises interests in 11 properties, with a strategic weighting to eastern seaboard central business district office markets.

The strategy established operational targets for energy, waste and water. APPF Commercial has also committed to achieving a minimum 5 Star Green Star certification for all new buildings entering the portfolio.

The Fund continues to work towards improving environmental performance and achieving consumption intensity targets through the implementation of a range of programs and projects.

The Gauge, Victoria Harbour, Melbourne, Australia – owned by APPF Commercial

rIchArd deveLOped A perImeter prOtectIOn rAIL cLImbIng system whIch prOvIded fuLL encLOsure tO seven wOrkIng LeveLs On A hIgh-rIse cOncrete buILdIng In bOstOn. thIs system mInImIses the rIsk Of fALLs Of peOpLe And mAterIALs. rIchArd wAs AwArded Lend LeAse’s IncIdent & Injury free cOnstructIOn LeAder Of the yeAr usA AwArd In 2009.

Our people

sustainability report

sustainability has been an integral part of our culture for more than 50 years. today, our employees insist that making a difference in our communities, improving health and safety standards, and reducing our environmental impacts are central to our business strategy. thanks to the innovative thinking and professional excellence that define our people, we’ve taken huge strides forward in our aspiration to be a global leader. Our sustainability performance is now regularly updated on a dedicated website, every Action Adds up, to ensure we meet our reporting obligations to all our stakeholders.

lendlease.com/sustainability

26/27

how do we measure leadership?

Lend Lease is the only Australian company to be included in all three globally recognised sustainability reputation indices.

the dow jones

sustainability Index is the first of the global indices to track the financial performance of leading sustainability-driven companies worldwide and is used by asset managers of sustainability portfolios worth close to US$8 billion.

the goldman sachs jbwere climate Leadership Index lists the ‘best in class’ Australian and New Zealand respondents to the Carbon Disclosure Project (CDP). CDP represents 385 global institutional investors with more than US$57 trillion in assets under management and collects climate change data from 1,550 corporations worldwide.

the global 100 most

sustainable corporations in the world is unveiled each year at the World Economic Forum in Davos and ranks performance on social, environmental and strategic governance issues through the lens of risk and shareholder value.

Our safety

for more information on our health and safety performance, visit

lendlease.com

Lend Lease has implemented global minimum requirements for safety to address key risks right across our business from construction sites to the assets we design and manage.

incident & injury free

Lend Lease has a deep and widespread commitment to operating Incident & Injury Free wherever we have a presence – this is an enormous challenge but one we are determined to progress.

Safety touches every aspect of the Lend Lease business, from the buildings we design and construct to the way our assets are managed.

Providing our people with the right systems and tools to deliver safe outcomes is crucial to achieving our Incident & Injury Free vision. A lot of hard work has been done over the past year to build on our accomplishments to date and set in place a robust and vigorous global governance system for safety.

We have implemented Global Minimum Requirements for safety to address key risks right across the business from our construction sites to the assets we design and manage.

This has been supported by extensive education, training and worker engagement programs. We still have a lot to do to realise our Incident & Injury Free vision – but we are confident that we are on the right track.

the safety dashboard includes compliance, incident reporting and key safety risk information for all Lend Lease construction projects throughout the world.

safety dashboard

The Safety Dashboard is a web-based safety reporting system that provides a central reference point for all key construction safety data from across the company.

Developed by the Lend Lease IT team over the past 12 months, the Safety Dashboard includes compliance, incident reporting and key safety risk information for all Lend Lease construction projects throughout the world. Using a combination of lead and lag indicators, the Safety Dashboard provides a holistic picture of safety performance.

r: The Safety Dashboard is a powerful management tool utilised to improve safety performance

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28/29

The Athletes Village, Stratford work site

2009 Annual Shareholder Review Lend Lease Corporation

==> picture [211 x 205] intentionally omitted <==

site logistics planning

The constant movement of people and materials present significant safety challenges to construction sites globally. Our work on the Athletes Village in the UK is elevating safety standards through detailed logistics planning. With 1,200 workers and 800 vehicles currently travelling through the 49 hectare site on a daily basis, leading edge safety logistics planning is critical.

Site initiatives include:

a dedicated delivery holding centre;
planning deliveries with the use of dedicated logistics software;
controlled site access delivery procedures;

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fully enclosed pedestrian walkways;
clearly demarcated crossing points;
delivery routes; and
segregated unloading zones,

all contributing to an industry leading approach to the delivery of materials and the movement of people across this extremely busy site.

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

Lend
Lease Lost
time injury
frequency
rate ratio
by region
and global FY07
(per 200,000
man-hours)
It has been
encouraging
to see
a downward
trend in Lost
Time Incident
Frequency
Rates across FY08
the Group over
the past three
years.
fy09
1.85 1.92
1.46 1.42
1.05
0.32
0.12
1.63
1.43
1.25 1.15
0.20 0.91
0.08
1.39
1.23
1.00 0.99
0.58
0.13 0.19
BLL Australia BLL Asia BLL Americas BLL UK BLL CEMEA BLL Global US Actus
----- End of picture text -----

Our environment

developing leadership by working with leaders

Over the past year, Lend Lease has committed itself to work in partnership with the Clinton Climate Initiative on opportunities to significantly reduce the environmental impact of buildings through maximising energy efficiency and reducing greenhouse gas emissions.

In November 2008, Lend Lease Investment Management and the Clinton Climate Initiative signed a Memorandum of Understanding to create a collaborative relationship focusing on existing building refurbishment opportunities.

In May this year at the C40 Summit in Korea, the Clinton Climate Initiative launched a global program, developed in collaboration with the U.S. Green Building Council (USGBC). Called the Climate Positive Development Program, it will support

the development of large scale urban projects to demonstrate that cities can grow in ways that are ‘climate positive’. Two Lend Lease projects, Victoria Harbour in Melbourne and Elephant & Castle in London, are amongst the first of 16 projects in 10 countries across six continents.

To reduce the net greenhouse gas emissions of the projects participating in the Climate Positive program to below zero, property developers and local governments will agree to work in partnership on specific areas of activity. This includes implementing economically viable innovations in the buildings, the generation of clean energy, waste management, water management, transportation, and outdoor lighting systems.

When the initial 16 projects are completed, nearly one million people will live and work in Climate Positive communities.

two Lend Lease projects are among the first of 16 climate positive development projects in 10 countries across six continents.

clintonfoundation.org/cci

internationaL reporting standards

Cutting emissions faster

CLimate positive Carbon CaLCuLator

tHinking Like a Leader

Working in partnership We are committed to proactively for a better built implementing strategies that address our impacts and reduce our environment greenhouse gas emissions globally. We do this through partnering with some of the world’s leading thinkers on the built environment, climate change and sustainability.

183 Lend Lease projects have registered or have achieved green building certification.

5 855 383 1054 675 the number of green skilling green building accredited our people professionals has risen from five to 675 in four years, to deliver green rated offices and assets. 05 06 07 08 09

Legend

Green building trained

Green building accredited professional

lendlease.com/sustainability

Our people

foundation – looking after employee wellbeing

The belief that it is a company’s duty to positively contribute to communities where Lend Lease employees live and work remains core to Lend Lease’s culture and underpins the essence of ‘Foundation’.

‘Foundation’ is an independent business unit within Lend Lease, exclusively focused on employees, their families and community wellbeing. Foundation programs operate year-round, and are accessible to all employees.

Foundation is a constant through all climates. Employees are supported and developed when the business is growing, during times of change, and amidst challenging times.

In today’s climate, Foundation’s role in nurturing and developing employees is more important than ever. Foundation programs inspire and engage employees, and in doing so, help to keep our teams motivated and positive.

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Employees taking part in one of Foundation’s Health and Wellbeing programs

In today’s climate, foundation’s role in nurturing and developing employees is more important than ever.

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more than 425, 000 hours

Lend LeAse’s AnnuAL cOmmunIty dAy

32/33

Cranes for children

A visit to the Royal Children’s Hospital in Melbourne has been made extra special for one group of children thanks to a Bovis Lend Lease initiative. As part of the Children’s Health Partnership consortium, Bovis Lend Lease is responsible for the construction of Victoria’s largest hospital redevelopment.

The project has required nine cranes onsite and Bovis Lend Lease crane drivers decided each needed a name – honouring one of the hospital’s courageous young patients. Each of the children recognised in this way were invited to an official crane naming ceremony and presented with a personalised Bovis Lend Lease hard hat and safety jacket.

==> picture [287 x 226] intentionally omitted <==

Rosie Morgan and her crane crew: Manuel Goncalves, Joe Sedlak, Stewart Kelly and Jose Gasper

enCourages aLL empLoYees around tHe WorLd to give sometHing baCk to tHe Communities in WHiCH tHeY Live and Work.

sInce Its InceptIOn In 1996, Lend LeAse empLOyees hAve prOvIded mOre thAn 425,000 vOLunteer hOurs gLObALLy.

directors’ profiles

Other directorships and positions

Prior to joining Lend Lease, Mr McCann was at ABN AMRO, where his roles included Head of Property, Head of Industrial Mergers & Acquisitions and Head of Equity Capital Markets for Australia and New Zealand.

d A crawford AO

s b mccann Managing Director (Executive)

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).

Chairman (Non Executive) Age 65

Age 44

Mr McCann was appointed Chief Executive Officer in December 2008 and became Managing Director in March 2009.

Mr Crawford joined the Board in July 2001 and was appointed Chairman in May 2003.

Mr McCann also practised as a mergers and acquisitions lawyer at Freehills, Melbourne for four years and worked in a Chartered Accounting firm in taxation for four years.

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

experience and Qualifications

Prior to this role, Mr McCann was Group Finance Director (appointed in March 2007) and Chief Executive Officer for Lend Lease’s Investment Management business (September 2005 to December 2007).

Mr McCann holds a Bachelor of Economics (Finance major) and a Bachelor of Laws from Monash University in Melbourne, Australia.

Mr McCann has more than 15 years experience in investment banking, property funds management and capital markets transactions.

Other directorships and positions Nil

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34/35

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 was subsequently Chief Executive Officer of Credit Suisse Asset Management.

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, Action for Children, and was awarded a CBE for ‘services to children’.

g g edington

p m colebatch

(Non Executive) Age 64

cbe

(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.

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

Other directorships and positions

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.

experience and Qualifications Mr Colebatch has a Bachelor of Science and Bachelor of Engineering from the University of Adelaide, a Master of Science from Massachusetts Institute of Technology and a Doctorate in Business Administration from Harvard University. He has held senior management positions in insurance and investment banking, and was formerly on the

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

Other directorships and positions

Nil.

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directors’ profiles

in New York for 10 years. Mr Goldmark 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.

p c goldmark (Non Executive) Age 68

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 US-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 the President and Chief Executive Officer of the Rockefeller Foundation

Other directorships and positions

Nil.

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She has a Bachelor of Arts from the University of California at Los Angeles and a Master of Arts in marketing and management from the University of Georgia. Other directorships and positions

j A hill

(Non Executive) Age 63

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

Ms Hill is a Non Executive Organisation Committee. Director of Wellpoint, Inc. experience and (appointed March 1994). Qualifications She was formerly a Non Ms Hill has held a Executive Director of number of senior Resources Connection, executive positions in Inc. (appointed the land development January 2003, resigned and housing construction December 2006). industry in North Ms Hill also sits on the America. She was Board of Directors of formerly the Chairperson, the Lord Abbett family President and Chief of mutual funds, which Executive Officer of is the trustee of 31 Costain Homes, Inc. mutual funds of publicly (US) and Vice President held companies. and General Manager, Mobil Land (Georgia) Corporation.

==> picture [166 x 145] intentionally omitted <==

36/37

Prior to joining the Other directorships Weir Group in 2001, and positions he was a member of Mr Selway is an the Supervisory Board Executive Director of of Schefenacker AG, The Weir Group PLC and Executive Director (appointed June 2001). of Britax International plc. Having spent much of his career managing engineering businesses in the United States, the United Kingdom and Australia, Mr Selway is regarded as a specialist in operational management and efficiency. He holds a Diploma in Industrial Engineering and was awarded an honorary degree of a Doctor of the University of the West of Scotland in July 2009. Mr Selway was given this award in recognition of his outstanding contribution to industry in Scotland and to honour his distinguished career.

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.

m w selway

d j ryan AO (Non Executive) Age 57

duniv (Non Executive) Age 50

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

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

Mr Selway joined the Board in June 2008. In July 2009, he became a member of the Sustainability Committee and the Personnel and Organisation Committee.

Other directorships and positions

Mr Ryan is Non Executive Chairman of Transurban Holdings Limited (appointed Director April 2003 and Chairman February 2007) and ABC Learning Centres Limited (administrators appointed, receivers and managers appointed) (appointed Director June 2003 and Chairman 30 May 2008). He is also the Non Executive Chairman of Tooth & Co Limited (appointed Director September 1999 and Chairman January 2003).

experience and Qualifications

Mr Ryan has previously held Managing Director positions in investment banking and industry, as well as being the Chairman or a Non Executive Director of a number of listed public companies.

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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 550 40 14 110 714 P Colebatch 150 109 14 41 314 G Edington 150 103 14 39 306 P Goldmark 150 112 14 40 316 J Hill 150 118 14 40 322 D Ryan 150 97 14 41 302 M Selway 150 50 14 31 245

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~~ Other share short post based Other term employ- pay- Long salary fees ment ments term total ~~$000~~ ~~$000~~ ~~$000~~ ~~$000~~ ~~$000~~ ~~$000~~ executive directors S McCann 1,329 986 43 1,754 16 4,128 executives B Soller 536 326 49 147 9 1,067

Other executives in the category of the five highest paid

M Bellaman	685	399	9	387	–	1,480
M Coleman	586	644	189	542	8	1,969
W Hara	323	308	14	431	8	1,084
R Leaver	778	356	18	481	12	1,645
T Lombardo	527	357	15	179	7	1,085
N Martin	400	387	147	86	6	1,026
M Menhinnitt	655	360	362	256	10	1,643
E Ooi	571	321	141	640	7	1,680

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

CORPORATE DIRECTORY

Secretary

Directors

D A Crawford, W Hara Chairman, Stock S B McCann, Exchange Managing Director and listings Chief Executive Australia Officer New Zealand P M Colebatch Auditors G G Edington KPMG P C Goldmark 10 Shelley Street J A Hill Sydney D J Ryan NSW 2000 M W Selway

Share Registry

and Shareholder Queries

Principal Register Computershare Investor Services Pty Limited GPO Box 2975 Melbourne VIC 3001

T: 61 (3) 9946 4460 (within Australia) or 61 (3) 9473 2500 (outside Australia) E: [email protected] W: www.computershare.com.au

UK Register

B Davis & Co

Park House, 158–160 Arthur Road Wimbledon Park, London SW19 8AQ T: 44 (20) 8947 3361 F: 44 (20) 8944 1039 W: www.bdavis.co.uk

USA Agent

The Bank of New York Investor Services PO Box 11258 Church Street Station New York NY 10286-1258 T: 1 (212) 815 3700 US Toll Free: 1 888 269 2377

EnvIROnmEnTAllY fRIEnDlY In EvERY wAY

Printing specifications

Paper specifications

The cover and editorial of this Report are printed using vegetable based inks and varnish. These inks are biodegradable. They do not harm the environment.

The Forest Stewardship Council (FSC) is an international not-for-profit, non-government organisation Cert no. SGS-COC-003898 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.

E: [email protected] W: www.adrbny.com

Commitment to tHe future

next generation

victoria harbour in melbourne boasts the highest concentration of green commercial buildings in Australia. the precinct is working towards climate positive* certification which aims to set a new global benchmark for leadership in large scale urban development that will minimise environmental impacts.

sustainability in action at victoria harbour

† details at lendlease.com/sustainability

Climate Positive is a joint initiative between the Clinton Climate Initiative and the U.S. Green Building Council

Lend Lease is actively developing and investing in sustainable strategies through:

green refurbishment and green buildings – creating greener buildings

green utilities – energy, water and waste solutions

urban regeneration – holistic development solutions

tHe merCHant

KEy WORKER RESIDENTIAL UNITS DELIvERED ThROuGh A PUBLIC PRIVATE PARTNERSHIP MODEL

CHiLdren’s Hub

An InTERnATIOnAL BEST PRACTICE CHILDCARE CENTRE OPERATED BY GOWRIE vICTORIA

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

transport
Links
• TRAMS, FLExI
CARS AnD GREEn
TRAVEL PLANS
anZ Centre
• AuSTRALIA’S LARGEST
SUSTAINABLE OFFICE
DEVELOPMENT
----- End of picture text -----

grouP wIDe enVIronment Performance[ †]

conVeSSo

• victoriA’s first green stAr rAted residentiAl Total water use¹ building under the green building council of AustrAliA’s multi–unit <8,000,000L residentiAl pilot progrAm

Municipal waste¹

the gauge

<500,000t

first 6 stAr green stAr – office As built commerciAl building to be owned by A property fund

Municipal waste recycled¹

38%

Total project waste

<2,335,000t

nab@ DocklanDS

AustrAliA’s first green cAmpus style commerciAl building

Project waste recycled

72%

water SenSItIVe urban DeSIgn

Greenhouse gas emissions¹

A vAriety of wAter sAving strAtegies implemented Across the project

<285,000t

annual contact general meetIng DetaIlS 2009

The 2009 Annual General Meeting of Lend Lease Corporation Limited will be held at 10.00am on Thursday, 12 November 2009 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.

Lend Lease

Corporation Limited ABN 32 000 226 228 Incorporated in NSW Australia

Registered Office Level 4, 30 The Bond 30 Hickson Road Millers Point NSW 2000 Australia

Contact

T: 61 (2) 9236 6111 F: 61 (2) 9252 2192 W: www.lendlease.com

In offices and assets under management. NB: Environment performance figures have been rounded off.

precinct.com.au

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lendlease.com

Lend Lease

Creating sustainable landscapes 2009 Annual Report to Shareholders

Our value proposition

The Lend Lease value proposition is very simple – we see more value in property. Our integrated property model and strategy allow us to see more value opportunities in each property project, which means we should be able to achieve higher returns on capital for our shareholders, our partners and our clients.

Our approach Generating multiple earnings opportunities: Lend Lease’s integrated end-to-end property solutions, combined with its approach to partnering and diverse project pipeline, maximise returns on capital for shareholders and partners.

Core competency

Unique asset creation capabilities: Lend Lease’s fully integrated capabilities span the property value chain, creating sustainable property solutions.

Agility and flexibility Maximising opportunities through market cycles: Lend Lease’s model is flexible and agile, allowing the Group to respond quickly and strategically at each stage of the property cycle.

Knowledge and experience Global and local property expertise: Lend Lease’s ability to attract the best people, combined with its deep market knowledge, underpins long-term earnings potential.

Innovation Optimising value over the long term: Lend Lease is committed to providing leadership in innovation and sustainable property solutions.

Americas Asia Pacific Europe 30% 55% 15%

Contribution to operating profit after tax bY geograpHY from business units

==> picture [473 x 378] intentionally omitted <==

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

business units
1. Mission Health System – Dogwood
Surgical and ICU Tower, Asheville, North
Carolina, USA 2. Signature Place, Tampa,
Florida, USA 3. New York-Presbyterian
Hospital – Vivian and Seymour Milstein
Family Heart Center, New York, USA
4. One Rincon, San Francisco, California,
USA 5. Dock 5, Victoria Harbour,
Melbourne, Australia 6. The Gauge, Victoria
Harbour, Melbourne, Australia 7. Lonza
Plant 1, Singapore 8. 201 Bishopsgate
and Broadgate Tower, London, UK 9. 200 4
Aldersgate, London, UK 10. The Curve,
Leicester, UK
8
5
9
2
3
6
1
10
7
----- End of picture text -----

Performance at a glance for 2009

==> picture [256 x 747] intentionally omitted <==

Operating profit after tax[1] $307.5M

Full year dividend[3] 41¢

Gearing[4] 2.9%

Statutory loss after tax ($653.6M)

Earnings per share[2]

Credit rating

BBB-/Baa3 Standard & Poor’s/Moody’s

72.5¢

Introducing Steve McCann

ouR new CHIeF exeCutIve oFFICeR And MAnAGInG dIReCtoR

ImPortant dates In 2010

February*	Announcement of Half Year Results
March*	Sharepricequoted ex dividend
March*	Interim dividend record date
March*	Interim dividendpayable
August*	Announcement of Full Year Results
August*	Sharepricequoted ex dividend
August*	Final dividend record date
September*	Final dividendpayable
November*	Annual General Meeting

Exact dates will be confirmed on the Lend Lease website Investor Relations section at www.lendlease.com in due course.
Operating profit after tax excludes non operating adjustments.
Calculated based on operating profit after tax and total weighted average number of shares on issue including treasury shares.
Dividends include interim dividend of 25 cents franked to 60% and final dividend of 16 cents franked to 100%.
Calculated as net debt including other non current financial liabilities, divided by total tangible assets, less cash.

performanCe at a glanCe for 2009

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Dividends per share [1] Dividend payout ratio [2]
41¢ 61%
05 06 07 08 09 05 06 07 08 09
Interim Final
Operating profit after tax [2] Earnings per share [3]
$307.5M 72.5¢
05 06 07 08 09 05 06 07 08 09
¢ 34¢
¢ ¢ 42
29 31 ¢
16
¢ ¢ ¢ ¢ ¢ % % % % %
28 30 35 4335 25 80 69 69 71 61
M M M M M
¢ ¢
¢ ¢ ¢
$285.7 $354.2 $445.9 $435.9 $307.5 71.6 88.7 111.4 108.7 72.5
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	Chairman’s report	2
	Chief Executive Offcer’s report	3
	Our capabilities	4
	Our strategy	6
	Retail report	8
	Communities report Public Private Partnerships report Project Management and Construction report	10 12 14
	Investment Management report Sustainabilityreport Corporate Governance Management Discussion and Analysis	16 18 24
	of fnancial condition and results of
	operations(MD&A)	40
	Portfolio report Directors’ report Five Yearprofle	57 74 105
	Consolidated Financial Statements	106
	Shareholder information	178
	Corporate directory	IBC

2009 dividends include interim dividend of 25 cents franked to 60% and final dividend of 16 cents franked to 100%.
Operating profit after tax excludes unrealised property investment revaluations, inventory carrying value adjustments, goodwill impairments, other carrying value adjustments, savings implementation costs and a net gain on closure of the Bovis UK pension scheme to future accrual. These are referred to as ‘non operating adjustments’.
Calculated based on operating profit after tax and total weighted average number of shares on issue including treasury shares.

Contribution to operating profit after tax from business units*

7% Investment Management

14% Retail

21% Communities

18% Public Private Partnerships

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40% Project Management and Construction

Before corporate and non operating adjustments.
Lend Lease Corporation Limited ABN 32 000 226 228

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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 close to US$8 billion each year.

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

About Lend Lease

Introducing our people

Lend Lease is one of the world’s leading fully integrated property solutions providers, with strong development management, investment management, project and construction management and asset and property management capabilities.

Our philosophy

Our philosophy We are committed to creating Founded in Sydney in 1958 and building innovative by Dutch immigrant and and sustainable solutions, innovator Dick Dusseldorp, forging partnerships and the group was born out of delivering strong investment a vision to create a company returns. We primarily operate that could successfully in Australia, Asia, the UK, combine four disciplines; Europe, the Middle East property, financing, and the US, and have built up development and investment. a long and successful track Lend Lease’s vision is to record in these countries, be the leading international creating many iconic and property company. admired precincts, spaces and buildings.

MEET SOME OF OUR PEOPLE ON PAGES 8–17

Through the efforts of For more information go to our outstanding people, www.lendlease.com/ Lend Lease takes a leadership sustainability/pdf/From_ role in supporting innovation Aspirations_to_Actions.pdf and inspiring change so our industry can contribute to economic growth, ecological balance and social progress.

operational HigHligHts

finanCial HigHligHts

Construction backlog gross profit margin

Continued strong performance

global construction backlog gross profit margin as at 30 June 2009 was $690.1 million, which provides a solid earnings base for FY2010.
earnings per share of 72.5 cents, down 33% in line with lower operating profit after tax.
Dividend per share of 41 cents, representing a payout ratio of 61% of operating profit after tax.

Funds under management

Funds under management increased to $9.9 billion, primarily due to the acquisition of the Lend Lease Primelife management rights.

Balance sheet strength

As at 30 June 2009, our net debt to total tangible assets, less cash was 2.9% and our weighted average debt maturity on drawn debt was eight years, with the earliest maturity date being November 2010.

Development pipeline

lend lease continues to have a strong development pipeline, securing preferred bidder status on the $2.5 billion RNA Showgrounds project in Brisbane during the year.
interest cover was 5.2 times, in line with management target of 5 times.

Chairman’s report

David Crawford AO Chairman

the year ended June 2009

Lend Lease reported a statutory loss after tax for the year of $653.6 million, reflecting net write‑downs and charges.

Directors declared a final dividend of 16 cents, franked to 100%, representing a payout ratio of 61% of operating profit after tax for the full year ended 30 June 2009.

looking ahead

Steve ran the Group’s global Investment Management business from September 2005 and was appointed Finance Director from March 2007 before being appointed CEO in December 2008. Prior to joining Lend Lease he had been a long‑term financial adviser to Lend Lease. He has a deep understanding of our business.

Lend Lease continues to intensify its commitment to operating Incident & Injury Free. The scale of that vision is brought into focus with eight sub‑contractor employee fatalities globally this year, despite good reductions in the overall rate of incidents and injuries. Our aim continues to be to operate Incident & Injury Free.

outlook and dividend policy

Given the ongoing uncertain conditions, Lend Lease is not providing specific short‑term earnings guidance. Directors and management continue to be positive about the Group’s operating outlook and remain focused on optimising total shareholder returns from all the Group’s activities.

Long‑term shareholder returns will not be sacrificed to meet short‑term earnings targets through sub‑optimal asset sales or other capital measures. At this point in the cycle, you should expect to see Lend Lease taking advantage of its very low leverage and investing capital to secure the best positions and develop the most appropriate projects in the pipeline as conditions improve.

Lend Lease has a number of growth options and we are well positioned to take advantage of these.

We are strategically positioned to leverage off a number of major trends in the property market globally, particularly urbanisation, ageing of populations, government stimulus spending and commercialisation of sustainability.
In 40 years time, 27% of the world’s population is expected to be over the age of 65 compared to approximately 15% today. Lend Lease’s position as a premier manager of retirement properties in Australia means we are well placed to capitalise on this trend.
Many governments have ambitions to reduce carbon emissions and to deliver sustainable communities. This also plays well to our strengths.
Our superior delivery capability and strong reputation for collaboration make us an ideal partnership candidate for government projects being rolled out under stimulus packages in various countries.

realising shareholder value from our advantages

While having a strong balance sheet and multiple growth options are big advantages at this stage of the cycle, they will not automatically translate into improving shareholder value.

The tactical actions to secure that value in the short term are largely complete. The cost base has been right‑sized to adjust for the downturn in volumes across most of our businesses. Capital is being preserved by reprioritising developments in line with market conditions and targeting key, strategic projects that build backlog for all Group businesses. We are maintaining active management of capital already invested in the business and all businesses are focused on optimising cash flows.

To maximise longer‑term potential shareholder value from the Group’s strong position, I have worked with the senior executive team and Board of Directors to develop a clear set of objectives and operating principles for the Group.

Performance targets

We are focused primarily on shareholder return as measured by Return on Equity and Return on Capital. Earnings per share growth remains an important measure but is not the key driver of decisions. Key Performance Indicators for employees, even in the short term, have regard to progress towards delivering the appropriate longer‑term return on capital and other key metrics for the relevant business. Other performance measurements include strategic initiatives, people management and operational excellence targets. Embedded in all of our businesses is our culture of safety first and we will continue to work tirelessly to achieve an Incident & Injury Free workplace.

Portfolio management

Capital recycling

Lend Lease is not a distressed seller of assets and we will not sell assets to hit short‑term profit targets. Instead, we will recycle capital only when it delivers acceptable shareholder returns and to fund future growth opportunities.

Collaboration to maximise earnings

Lend Lease is well placed to deliver attractive growth in shareholder value over the long term. We will measure our progress against how well we perform against the initiatives and priorities I have set out in this report. I am confident that we will deliver against those measures. As we do so, shareholders should see Lend Lease re‑positioned as a recognised leader internationally in the provision of world‑class property solutions, with all of the attendant growth opportunities that such recognition will bring.

Chief executive officer’s report

Steve McCann Chief Executive Officer and Managing Director

our capabilities

development management Lend Lease has a proven track record in creating and managing complex mixed-use property developments incorporating large scale commercial, residential, retail, master planned communities and senior living.

our capabilities

development Management Investment Management retaIl resIdentIal

Investment management

Lend Lease has 50 years experience in property investment management. Today, our global investment management platform spans Asia, Australia, the UK and the US.

Our investment management team is committed to delivering global real estate products and investment solutions tailored to the needs of institutional investors.

Project management & construction

Asset & property management

Project Management & Construction Asset & Property Management

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commercIal Infrastructure retIrement
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our strategy

lead

our strategic path forward

Year in review

Build • World class property
• Reshape
Restore solutions portfolio company
• Operational
• Right structure • Strong excellence integrated
• Cost out • Grow offering
• Drive efficiency platforms • Trusted
• Capital • Invest investment management in people manager
Phase 1 Phase 2 Phase 3
Delfin Lend Lease in partnership with Macquarie Real Estate Equity Fund No.6 Pty Ltd won the major community development in Canberra for the development of the Casey 2 (renamed Springbank Rise) site.

July 2008

Actus Lend Lease and the US Army agreed to move forward with the first phase of the Privatization of Army Lodging program.
Catalyst Lend Lease consortium including Bovis Lend Lease achieved financial close on the approximately $130 million Phase 2A Lancashire Building Schools for the Future program in England.

october 2008

Lend Lease invested in Babcock & Brown Communities Group and became manager of Australia’s largest ‘pure play’ owner, operator and developer of senior living communities listed on the Australian Securities Exchange.
Bovis Lend Lease was awarded the contract for the redevelopment and expansion of The GPT Group’s major regional shopping centre, Charlestown Square, valued at $344 million.

november 2008

Lend Lease partnered with the Clinton Climate Initiative to work on opportunities to significantly reduce the environmental impact of buildings by accelerating retrofits to maximise energy efficiency and reduce greenhouse gas emissions.

August 2008

Lend Lease officially opened The Gauge, Melbourne, the evolutionary workplace, which is Australia’s first 6 Star Green Star – Office As Built v2 building.
Bovis Lend Lease was appointed Managing Contractor for the design and construction of a $527 million new central office building for the Australian Security Intelligence Organisation in Parkes, ACT.

September 2008

Lend Lease Development was awarded the $560 million Darling Walk regeneration project by the Sydney Harbour Foreshore Authority to redevelop the 1.5 hectare site in Sydney’s Central Business District Darling Harbour precinct.
Lend Lease completed the acquisition and novation of management rights for Babcock & Brown Communities Group and announced the appointment of the new CEO, Rod Fehring and CFO, Paul Walsh.

2009 Annual Report to Shareholders Lend Lease Corporation

Retail our segment summary	Communities	Public Private Partnerships	Project Management and Construction	Investment Management
Core Activities Asset ownership, development, property and asset management	Masterplanned urban communities, inner city apartments and senior living	Military housing, healthcare, education and waste	Project management and construction	Asset ownership, real estate investment management services
Operating Revenue $125.8m	$586.4m	$1,507.0m	$12,422.0m	$69.1m
Proportion of Proft After Tax from Operating Businesses1 1. Before corporate and non operating adjustments. 14%	21%	18%	40%	7%
Regional Business Operations Australia, Singapore, UK, US	UK, Australia, US	UK, US	UK, Europe, Middle East, Americas, Asia Pacifc	Australia, Singapore, UK, US

Lend Lease

we see more value in property

december 2008

Bovis Lend Lease engaged by Queensland Health to manage the design and construction of the new Gold Coast University Hospital valued at approximately $1.4 billion.
Lend Lease appointed Steve McCann as new CEO.
Lend Lease finalised Babcock & Brown Communities Group transaction and the business is renamed Lend Lease Primelife.

February 2009

Catalyst Lend Lease selected as Preferred Partner for the $2.7 billion Birmingham, Building Schools for the Future project.
Lend Lease successfully completed an institutional placement to raise $302.5 million in equity.

April 2009

Bovis Lend Lease signed a new agreement with BP International Ltd (BP) to provide project management services for the construction and maintenance of BP’s retail network across 10 European countries.
Bovis Lend Lease awarded two of the New South Wales Building Education Revolution contracts for the upgrade of 380 government schools valued at $675 million.

May 2009

Lend Lease Development selected to develop the EkkA Showgrounds with the Royal National Agricultural and Industrial Association of Queensland, which has a projected value of approximately $2.5 billion.
Lend Lease continued as development manager of the Athletes Village, Stratford City, London.
Bovis Lend Lease as part of a consortium won the Alliance Contract to deliver the $900 million Sydney Water Capital Works program.

June 2009

Catalyst Lend Lease achieved financial close with Lancashire County Council as part of the East Lancashire Building Schools for the Future program in England.

ttoB: The Gauge, Victoria Harbour, Melbourne, Australia Artist’s impression, Stratford, United Kingdom Knoxfield – Waterford Park, Melbourne, Australia, a retirement village owned and managed by Lend Lease Primelife

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Retail report

for the year ended 30 June 2009

	~~operating Result $m~~ ~~09~~ ~~08~~ operating proft after tax 60.3 66.1 Propertymanagement (8.4) (14.2) Investment income 68.7 80.3 operating proft after tax by geography Asia Pacifc 8.9 1.7 Europe 24.0 42.3 Americas 27.4 22.1

outlook

In Asia Pacific, the portfolio delivered net operating income (NOI) growth of 4.4%. However, it is clear that retail sales are slowing. Importantly for Lend Lease, the economic downturn has had limited impact on the asset management business as we are not a significant owner of retail assets in Australia.
In Singapore, 313@somerset remains on time and budget and will open fully leased in December 2009.
In the UK, difficult trading conditions have impacted NOI and expansion in capitalisation rates over the year has impacted values, requiring asset write-downs. However, our development opportunities require limited capital expenditure in the short to medium term.
In the US, the value of Lend Lease’s 50% interest in King of Prussia was impacted by expansion in capitalisation rates, with the valuation in US dollar terms down 14%.

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Lend Lease holds an ownership interest in 10 centres.
The market value of Lend Lease’s interests in these centres declined to $1.5 billion, down from $2.0 billion in 2008. This was primarily due to weakening of capitalisation rates, principally in the UK.
Operating profit after tax has remained robust, primarily due to comparatively stable income from the Bluewater and King of Prussia shopping centres.

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Construction of 313@somerset, Singapore

Joseph Goh PRoJeCt MAnAGeR BovIS Lend LeASe

Completion of the redevelopment of PoMo (formerly Paradiz Centre), a retail and commercial building in Singapore. Lend Lease has a 25% direct ownership interest in the asset.

Year in review

Key events Asia Pacific

Construction and pre-leasing progressing on schedule at the 313@somerset retail development on Orchard Road, Singapore. The development remains on budget and schedule and will open fully leased in December 2009.
Construction and pre-leasing commencing on the Caroline Springs retail development in western Melbourne. The Lend Lease Core Plus Fund and the Australian Prime Property Retail Fund each hold 50% of this asset.
Construction on the mixed‑use 420 George Street/MidCity commercial and retail development in the Sydney central business district progressing on schedule. Completion of this development is expected in 2011.

	~~Portfolio Summary~~ ~~09~~ ~~08~~ No. of centres managed 16 16 Assets under management($b) 8.7 10.8 Retail developmentpipeline($b) 4.7 4.8

2009 Annual Report to Shareholders Lend Lease Corporation

CASe StudY:

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313@somerset, Singapore exciting Singapore retail opening

In August 2006, Lend Lease secured the highly coveted Somerset site from the Urban Redevelopment Authority of Singapore for S$617.2 million to build a new regional shopping mall – 313@somerset.

313@somerset is scheduled for opening in December 2009 and will showcase eight levels of retail, targeting mid level food and fashion in an exciting dynamic environment. The centre’s vision is to be one of the leading retail destinations in mid to upper‑mid fashion, food and lifestyle and will open 100% leased.

our people

europe

There are currently three centres with development potential in the UK. However, given current economic conditions, a review of the development pipeline has been conducted and, where appropriate, capital expenditure is being curtailed or deferred.

Americas

In the Americas, Lend Lease’s retail business comprises a 50% ownership in the partnership that owns the King of Prussia Mall in Pennsylvania. Lend Lease’s share of partnership income was in line with the prior year in US dollar terms.
Some key highlights of 313@somerset’s sustainability journey to date include:

the centre’s vision is to be one of the leading retail destinations in mid to upper-mid fashion, food and lifestyle.

The leasing team at 313@somerset has secured international fashion retailer Zara, which is launching a three‑level flagship store in the new mall. Brand names also supporting the fashion mix include a four level Forever 21 and well known UK brand New Look. These retailers will be joined by market brands Esprit, Mango, Lacoste and Levi. 313@somerset was awarded the highest sustainability recognition in Singapore from the Building & Construction Authority – Green Mark Platinum award in 2008.

greater than 30% reduction in energy consumption compared to code compliant building through design and equipment selection;
generation of renewable energy via photovoltaic arrays;
detailed carbon footprint analysis and reduction strategy;
retailer sustainability initiatives and commitments;

thermal energy storage to increase energy conservation;
co-generation of heat and electricity via bio‑fuel for use within the centre;
sustainability education strategies for our community, retailers and customers; and
the centre is the first retail development in Singapore to introduce Green Lease Agreement.

wItH SuPPoRt oF tHe RetAIL teAM, JoSePH HAS CARRIed out An AMBItIouS PRoJeCt to BuILd A GReen RetAIL CentRe In SInGAPoRe, eARnInG 313@SoMeRSet A GReen MARk PLAtInuM AwARd In 2008.

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CASe StudY:

Australian Prime Property Fund (APPF) Retail no. 1 performing wholesale fund for its index

APPF Retail was established in 1989 as a core unlisted wholesale property fund. The Fund has 12 primarily regional core properties across Australia with a gross asset value of $3.1 billion as at 30 June 2009. Retail sales across the portfolio have continued to remain solid, and portfolio occupancy has remained in excess of 99%. A number of assets in the portfolio are undergoing development, including MidCity in Sydney CBD, Erina Fair on the NSW Central Coast, and Caroline Springs Square in Victoria.

Sunshine Plaza, Maroochydore, Australia – owned by APPF Retail (50%) and asset managed by Lend Lease Retail

the Fund Lend Lease Investment Management, has a gross the manager of APPF Retail, has been asset value voted by industry participants in a of $3.1 billion JP Morgan survey as the best unlisted as at 30 June fund manager in Australia, having 2009 one of the highest quality retail real estate portfolios.

APPF Retail was the best performing wholesale fund in its index (Mercer Unlisted Property Funds Index) for the one year period to 30 June 2009.

The Fund continues to have low gearing (total debt to total assets of circa 8.0%) as at 30 June 2009 and in July 2009 successfully completed a $250 million three year Medium Term Note issue.

Communities report

for the year ended 30 June 2009

	~~operating Result $m~~ ~~09~~ ~~08~~ operating proft after tax 88.3 100.3 Asia Pacifc 99.9 82.7 Europe (10.4) 21.1 Americas (1.2) (3.5) Gross value ofpre-sales Asia Pacifc 339.3 589.4 Europe 28.5 41.6

Global Communities • During the year, Lend Lease operating profit after tax completed the acquisition of a declined 12% to $88.3 million, 43.2% interest in Lend Lease from $100.3 million in 2008. Primelife (previously Babcock This was due to a significant & Brown Communities) and the decline in residential sales associated management rights. and settlements as a result • In Asia Pacific Communities,
of weak trading conditions profit after tax included the
in both the UK and Australia. profit from the sale of its
• In light of the difficult market interest in seven retirement conditions in the UK and villages and an aged care Australian residential markets, facility to Lend Lease Primelife.
In light of the difficult market interest in seven retirement conditions in the UK and villages and an aged care Australian residential markets, facility to Lend Lease Primelife. the Communities business • In the UK, conditions for the
has reduced the carrying Communities business remain
value of its inventory and very challenging. Despite
other assets and has written this, we remain well placed
off the goodwill in relation with three of the major urban
to the Crosby Lend Lease regeneration projects in
business in the UK and the London: Greenwich, Elephant &
Australian Communities Castle and the Athletes Village.
businesses.
The Communities business
• The Communities business in the US involves one project,
has a residential backlog Horizon Uptown, which is in
of 102,040 units and a total the planning/approval stages
commercial backlog of and which Lend Lease will
4.7 million square metres. only commence when market conditions recover.

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Val lowman MAnAGInG dIReCtoR BeonSIte

outlook

In Australia, the residential market was weak throughout 2009, with expectations that these market conditions would continue into 2010. There have been some improvements post year end. In addition, we continue to add trading projects, progress rezonings and work with builders and financiers. The businesses have been re-sized to reflect the softer market conditions and where appropriate we are limiting capital investment to key projects.
In the UK, our focus is to streamline the business and minimise cash and capital requirements during difficult market circumstances while protecting established positions that provide future value creation potential. We will seek to clear the Crosby Lend Lease stock over the next 12 months and concentrate on priority development projects such as the Athletes Village.
In the US, the Horizon project is on hold until market conditions recover.
We are well positioned for a recovery in all markets.
Selected as preferred partner for the regeneration of the RNA Showgrounds precinct in Brisbane, which has a projected value of $2.5 billion.

Year in review

Key events Asia Pacific

Residential land lots settled declined by 22% as weaker trading conditions continued, particularly in New South Wales.
Commencing development at the Darling Walk site, a 64,000 square metre commercial project at Darling Harbour, Sydney.
Acquired the Springbank Harbour, Sydney.
Rise project in Canberra in partnership with Macquarie • Completion of the acquisition Real Estate Equity Fund No.6 of a 43.2% stake and Pty Ltd and secured Blakes associated management Crossing in South Australia, rights in Lend Lease which together added Primelife, the largest circa 2,500 residential lots ‘pure play’ owner, operator to zoned backlog. and developer of senior living communities listed on the Australian Securities Exchange.
~~Portfolio Summary 09 08~~ Backlog (residential lots and apartments) 102,040 116,925 Asia Pacific 84,795 85,330 Europe 13,390 14,470 Americas 3,855 17,125

2009 Annual Report to Shareholders Lend Lease Corporation

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Aerial view of construction at Stratford, United Kingdom

our people

europe

Operating profit after tax decreased by $31.5 million to a loss of $10.4 million, due to the significant slowdown in the UK residential market.
In August 2008, Lend Lease was appointed Development and Construction Manager for the first stage of Stratford City, which involves building the Athletes Village for the London 2012 Olympics and Paralympic Games. Lend Lease had been in negotiations with the ODA for the last two years in relation to the development and financing of the whole of Stratford City. However, these negotiations ended in May 2009, when the ODA decided to fund the project itself. Lend Lease continues to act as Development and Construction Manager.
On 21 July 2009, Southwark Council agreed to extend its exclusive deal with Lend Lease as preferred developer of land at Elephant & Castle, a large mixed‑use regeneration project in London.

Phase one will deliver:

CASe StudY: Stratford, united kingdom the Athletes village

Phase one The Village will be designed and will deliver: built in a way that requires lower energy demand, using materials and • 2,819 homes construction processes that have (with 1,004 low embodied energy. The Village of these will also seek to minimise waste and affordable) increase recycled content in design targeting and construction. Water savings Level 4 of are a key focus, with water efficient the Code for measures being applied during Sustainable construction of the Village and water Homes (uk efficient fixtures and fittings to be green building used throughout to reduce overall certification). water demand. Site wide water • Over 10 use will be complementary to the hectares of ecology and design of the landscape.

The Athletes Village is one of the most significant urban developments in the United Kingdom and is part of the broader masterplan for a new piece of city in east London.

• Over 10 hectares of open space.

Design, planning and construction have made significant progress since work began on the permanent foundations of the Village in June 2008. Construction of all 11 residential plots is now underway.

• An Academy education campus catering for 1,800 students.

• Transport facilities and global connections to international stations.

vAL HAS Been CoMMItted to deLIveRInG LoCAL eMPLoYMent And SkILLS SInCe 1995 wItHIn BovIS Lend LeASe uk. vAL wAS AwARded An oBe FoR HeR woRk In ConStRuCtIon SkILLS tRAInInG And BeonSIte tHIS YeAR.

The Merchant is the first project in the Docklands to incorporate an affordable rental housing initiative. Fifty‑seven of the 133 apartments were pre‑sold to Melbourne Affordable Housing and will be rented to low to medium income service workers, including police, firemen and childcare workers.

CASe StudY:

CASe StudY: the Merchant the Merchant, Australia is the result of a successful Lend Lease’s victoria partnership Harbour precinct between Lend Lease, The Merchant, in Lend Lease’s Melbourne Victoria Harbour precinct in the Affordable Docklands, is an innovative residential Housing and development offering 133 one and vicurban. two bedroom apartments over seven levels with 600 square metres of ground floor retail.

the Merchant, Australia Lend Lease’s victoria Harbour precinct

The remaining 76 apartments, available for general sale, sold within four months of being offered for sale. Construction of The Merchant is expected to be completed in late 2009.

The Merchant is the result of a successful partnership between Lend Lease, Melbourne Affordable Housing, now part of the Housing Choices Australia Group, and VicUrban. Lend Lease is proud to be part of this innovative residential development and believes this model, which blends public and private housing, contributes positively to delivering a diverse community and can be successfully replicated in other areas and cities.

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Celebrating the completion of the

building structure of The Merchant, with David Hutton, COO – Asia Pacific, Lend Lease; the Hon. Richard Wynne, Victorian Minister for Housing; the Hon. Bronwyn Pike, Minister for Education and Member for Melbourne; and Pru Sanderson, CEO of VicUrban (April 2009)

Public Private Partnerships report

for the year ended 30 June 2009

	~~operating Result $m~~ ~~09~~ ~~08~~ operating proft after tax 74.4 59.0 Europe 6.2 (13.2) Americas 68.2 72.2 Projects secured/closed during period europe Preferred bidder – secured 1 – Financial close 1 1 Americas Preferred bidder – secured – 1 Financial close – 6

outlook

In the UK, the PPP market is underpinned by a steady pipeline across the schools, health and waste sectors.
In terms of outlook for Actus Lend Lease, there are still a number of projects under the Military Housing Privatization Initiative remaining to be awarded.
We will focus on closing projects at preferred bidder stage and we are still seeing significant government support for stimulus packages for the PPP model and there is a good pipeline of opportunities that play to Lend Lease’s skill set.
We have established a PPP origination and advisory platform in Australia and are currently bidding on a number of projects.
In Canada, we are looking at establishing a platform and are bidding on our first project.

QuICk FACtS: Client: Lancashire County Council (LCC) Project company: Catalyst education Lancashire Ltd Construction value: €310 million/£220 million total project funding: €352 million/£250 million Construction: Aug 2006 – Sept 2010 Concession period: 25 years Building contractor: Bovis Lend Lease Facilities management: vita Lend Lease

In the US, Lend Lease’s Public Private Partnerships (PPP) business, Actus Lend Lease, delivered a profit after tax of $68.2 million, down from $72.2 million in 2008, as no projects reached financial close during the year.
Actus Lend Lease currently has 19 projects.
In the UK, Lend Lease’s PPP business delivered a profit after tax of $6.2 million, after a loss of $13.2 million in 2008. June 2008 operating loss after tax of $13.2 million has been adjusted from an operating profit after tax of $0.8 million to reflect the impact of adopting accounting standard AASB Interpretation 12 Service Concession Arrangements .

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Cate Collins HeAd oF SuStAInABILItY – ASIA PACIFIC Lend LeASe

Current market conditions have resulted in a reduction in the proposed scope of the Fort Wainwright and Fort Greely project and the Privatised Army Lodging project for which Actus Lend Lease is preferred bidder.

Year in review

Key events Americas

Decreased development fee income as no projects reached financial close in the year. However, construction gross profit margin and asset management gross profit margin remain in line with program delivery.
Units under management remained in line with the previous year at circa 44,000.

	~~Portfolio Summary~~ ~~09~~ ~~08~~ Americas Units under management 44,050 44,750 Estimated capital spend(US$b) 5.5 5.9 europe No. ofprojects 19 19 Facilities management revenue backlog (£m) 410 366 Invested equity (£m) 80 71

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2009 Annual Report to Shareholders Lend Lease Corporation

CASe StudY: Lancashire, united kingdom Building Schools for the Future program

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Pendle Vale College and Community High
School entrance, part of the first phase
of the BSF program in East Lancashire
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our people

europe

Achieving financial close on Phases 2A and 3 of the £1.0 billion Lancashire BSF project.
An increase in the number of operational assets, with the practical completion and operational handover of the three schools in Phase 1 of the Lancashire BSF project.
Selection as preferred bidder on the £1.2 billion Birmingham BSF project.

All the a further three schools. In addition, schools will be the LEP will upgrade Accrington equipped with Academy and the Academy for carbon neutral North Preston. biomass Sustainability is a key factor in boilers and the new schools, both in regards energy saving to environmental credentials and measures. through the creation of a local skills legacy, led by Catalyst Lend Lease and the BSF supply chain.

The first phase, seven schools on three sites – Shuttleworth College, Burnley Campus and Pendle Vale – opened in September 2008.

CAte wAS AwARded tHe AuStRALIAn FInAnCIAL RevIew BoSS MAGAzIne’S YounG exeCutIve oF tHe YeAR. CAte HAS Been InStRuMentAL In tHe deSIGn, PLAnnInG And MAnAGeMent oF SuStAInABILItY StRAteGIeS FoR tHe InveStMent MAnAGeMent BuSIneSS GLoBALLY And IS now ReSPonSIBLe FoR MAnAGInG tHe CoMMeRCIALISAtIon oF SuStAInABILItY ACRoSS tHe ASIA PACIFIC BuSIneSSeS.

CASe StudY:

Army Hawaii is one of the largest solar-powered communities in the world.

nearly 7,900 homes at seven different installations on the island of Oahu. The construction and renovation of these homes will be completed by 2015. Actus Lend Lease will continue to own, operate and manage the project through to at least 2055.

Army Hawaii, united States Privatised military family homes

Actus Lend Lease has been providing and managing privatised military family homes for the US Army on the island of Oahu in Hawaii since 2005.

Army Hawaii is one of the largest solar‑powered communities in the world. At completion, approximately 2,400 units will be installed with cost‑ competitive photovoltaic systems which are anticipated to provide up to 30% of the community’s energy needs. Actus Lend Lease is also recycling circa 90% of the materials from demolished homes, reusing the materials in asphalt and other building supplies.

Army Hawaii, with a project value of US$2.3 billion, is the largest Residential Communities Initiative project awarded by the Army, serving more than 20,000 residents. At completion, the project will include

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The development is also leading the way in sustainability through participating in the following ‘firsts’:

Participation in the US Green Building Council’s Leadership in Energy and Environmental Design (LEED[®] ) for Neighbourhood Development pilot program.
Actus Lend Lease has partnered with the Department of Defense to design, construct and monitor the first Zero Energy Homes on any Department of Defense Military Installation.

Army Hawaii Family Housing, Hawaii, United States

Project Management and Construction report

for the year ended 30 June 2009

	~~operating Result $m~~ ~~09~~ ~~08~~ operating proft after tax 168.9 150.0 Asia Pacifc 94.7 69.0 Europe 39.0 21.3 Americas 35.2 59.7 Proftabilityratio(eBItdA/realised GPM) 39% 34% Asia Pacifc 61% 50% Europe 30% 19% Americas 25% 34% Gross margin(realised GPM/revenue) 5.2% 4.7%

outlook

In Asia Pacific, we continue to see strong market conditions for social infrastructure, particularly in the health and education sectors.
In the UK, despite some slowdown in commercial, we are still seeing opportunities in government.
In the Americas, we continue to focus across the business on safety, people and performance and on making sure that our level of overhead is proportional to market conditions.
Despite the downturn in market conditions, we are well placed given our significant geographic and sector diversity. While top-line growth will be impacted, our business is resilient and we remain focused on ensuring we have the right cost base and maintaining strong margins.
With backlog GPM of $690.1 million, this underpins Bovis Lend Lease’s earnings for the 2010 financial year.
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 UK projects where loss provisions were taken in prior years.
Bovis Lend Lease delivered a strong result due to a standout performance in Australia.
Global profit after tax was $168.9 million, up 13% on the June 2008 result of $150.0 million. The profitability ratio increased from 34% to 39%, principally due to the higher profit contribution in Europe and Asia Pacific.
In the Americas, profit after tax was impacted by costs relating to a fire at the former Deutsche Bank building in New York.
In Asia Pacific, profit after tax was up 37% to $94.7 million from $69.0 million in 2008, on the back of continued strong market conditions, particularly for social infrastructure. Since April 2009, Bovis Lend Lease has secured circa $1 billion of education work under government stimulus packages.
Backlog gross profit margin decreased by 12% from $788.3 million to $690.1 million, with 58% expected to be realised in the 2010 financial year.

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Kirstin riCh ASSIStAnt dIReCtoR oF PRoPeRtY MAnAGeMent, FoRt dRuM MountAIn CoMMunItY HoMeS ACtuS Lend LeASe

Americas

Year in review

Key contributions to gross profit margin included the 155 North Wacker Drive office development in Chicago, the 353 N. Clark office building project in Chicago and the Lenbrook high rise senior living project in Atlanta.

Key events Asia Pacific

Key contributions to gross profit margin in Australia included the ANZ Centre in Melbourne and Top Ryde shopping centre in Sydney.
In Asia, the telecommunications rollout in Japan and the 313@somerset retail development in Singapore were key contributors during the year.

	~~Backlog~~ ~~09~~ ~~08~~ Backlog grossproft margin($m) 690.1 788.3 New work secured($m) 491.9 715.5 Backlogrealisation Year 1 58% 57% Year 2 27% 29% 2years + 15% 14%

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2009 Annual Report to Shareholders Lend Lease Corporation

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

Construction of ANZ Centre,
Melbourne, Australia
----- End of picture text -----

our people

europe

The European business contributed $39.0 million of profit after tax for the year.
Key contributions to gross profit margin included the Athletes Village project for the 2012 Olympic Games in London, MediaCityUK mixed‑use project in Gloucester and the BP Alliance project across Europe.

Anz Centre, when completed, will be the largest single tenanted commercial building in Australia.

CASe StudY: Anz Centre, Australia office accommodation

up to 40 metres into the riverbed to form the support on which the Yarra River Boardwalk will sit.

All areas within the building are a maximum of 12 metres from a natural light source, improving the workplace environment and reducing energy consumption.

Sustainability features in the building include energy generation via an on‑site gas‑fired tri‑generation unit, 1,000 square metres of solar cells, and roof‑mounted wind turbines. A blackwater treatment plant will recycle all waste water for reuses such as toilet flushing and cooling towers.

Site work commenced in late 2006 and is due for completion in late 2009. ANZ Centre, when completed, will be the largest single tenanted commercial building in Australia, accommodating up to 6,500 employees. The building is located on the new extension of Collins Street and is bounded by the Yarra River and Docklands Park. The proximity of the project to the Yarra River required 1,500 piles, driven to a depth of 35 metres – the equivalent of a 10‑storey building underground. In addition, 97 specially imported steel tube piles were driven

The project is registered for three Green Star ratings from the Green Building Council of Australia.

The project was awarded the Excellence in Health & Safety award at the Master Builders Association of Victoria’s 2009 Excellence in Construction Awards.

kIRStIn, woRkInG In PARtneRSHIP wItH tHe uS MILItARY And AFFILIAted oRGAnISAtIonS, HAS deveLoPed A nuMBeR oF SoCIALLY SuStAInABLe PRoGRAMS tHAt unIFY tHe dISPARAte And dIveRSe Set oF PeoPLe wHo LIve At FoRt dRuM, CReAtInG A new MILItARY LIFeStYLe.

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in Singapore. The facility, comprising manufacturing area, laboratories, warehousing, offices, central utilities and supporting site infrastructure, is a replica of Lonza’s existing plant in Portsmouth, New Hampshire in the United States.

The project clocked over four million safe work hours and secured the Singapore Workplace Health and Safety Council’s SHARP (Safety and Health Award Recognition for Projects) Award for excellent Workplace Safety.

On the back of the successful delivery of the Plant 1 project and reinforcing our expertise and track record in the pharmaceutical market in Singapore, Bovis Lend Lease was appointed to design, procure and construct Lonza’s second plant in Singapore.

Lonza Plant 1, Singapore

CASe StudY:

Plant 2 recently secured the Green Mark Gold certification from the Singapore Building and Construction Authority.

Lonza Plant 1 & 2, Singapore Leader in Pharmaceutical Sector in Singapore

Plant 2 recently secured the Green Mark Gold certification from the Singapore Building and Construction Authority for environmental sustainability and will have 2,780 square metres of solar panels generating 181 kilowatt peak – the largest array on any industrial building in Singapore. Scheduled completion for Plant 2 is mid 2010.

Bovis Lend Lease as a leader in the pharmaceutical Engineering, Procurement and Construction Management sector in Singapore, was engaged by Lonza Biologics Singapore in February 2007 to design, procure, construct and commission Lonza’s first bio‑pharmaceutical investment

Investment Management report

for the year ended 30 June 2009

	~~operating Result $m~~ ~~09~~ ~~08~~ operating proft after tax 28.9 137.3 Funds management 8.4 54.1 Investment income 20.5 83.2 operating proft after tax by geography Asia Pacifc 27.1 71.8 Europe 3.1 61.9 Americas (1.3) 3.6

outlook

In terms of the outlook and management actions, our focus is to continue to deliver strong relative performance for our existing investor base. In addition, our strategy is to position the Investment Management business as the provider of capital solutions to the wider group to enable us to optimise our investment life cycle strategy.
Our funds platform is well placed to take advantage of opportunities to acquire assets, particularly the APPF Retail Fund.
Specifically in Australia, we will look to partner with funds and institutions on new opportunities.
In Asia, our priority is to deliver 313@somerset on time and on budget, and to continue to explore other opportunities in Asia.
Total operating profit after tax • Lend Lease Investment for Investment Management Management won the declined to $28.9 million third annual Melbourne from $137.3 million. This was Financial Services principally due to the prior Symposium Investment year including a profit after Stewardship Award for Funds tax of $40.1 million from the Management, recognising sale of a proportion of the long‑term achievement. Group’s interest in Australian The award was presented in Prime Property Funds (APPF) Melbourne on 2 March 2009. and in Europe, a tax exempt • Lend Lease Investment
dividend of $47.9 million from Management signed
the Group’s interest in the a memorandum of
advisor company Lend Lease understanding during
Global Properties, SICAF in the year with the Clinton
relation to incentive fees.
Lend Lease Investment
dividend of $47.9 million from Management signed
the Group’s interest in the a memorandum of
advisor company Lend Lease understanding during
Global Properties, SICAF in the year with the Clinton
relation to incentive fees. Climate Initiative to work
• Funds under management together on opportunities increased by $0.6 billion to significantly reduce the to $9.9 billion, principally environmental impact of due to the acquisition of buildings by accelerating the Lend Lease Primelife retrofits to maximise energy management rights. efficiency and reduce greenhouse gas emissions.

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riChard miChaels vICe PReSIdent, SenIoR SuPeRIntendent, BoSton, MASSACHuSettS BovIS Lend LeASe

In Asia Pacific, funds under management grew by $1.4 billion, principally due to the acquisition of the Lend Lease Primelife management rights.

Year in review

Key events Asia Pacific

In Australia, APPF Retail the Lend Lease Primelife
and APPF Industrial were management rights.
the top two performing funds in the Mercers Unlisted • On 21 July 2009, APPF Retail Property Funds Index based completed a $250 million, on the gross one year returns three‑year Medium Term in the 12 month period ended Note issue due 30 July 2012. 30 June 2009.

	~~Portfolio Summary~~ ~~09~~ ~~08~~ Funds under management($b) 9.9 9.3 Market value of investments($b) 0.5 0.6 Asia Pacifc 0.4 0.4 Europe 0.1 0.2

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2009 Annual Report to Shareholders Lend Lease Corporation

CASe StudY:

APPF Commercial Commercial assets in excess of $1 billion

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APPF Commercial has a sustainability strategy which was endorsed in 2007 to be recognised as a leading environmentally sustainable property fund within the Australian marketplace.

the Fund’s The strategy established operational portfolio targets for energy, waste and water. comprises APPF Commercial has also committed interests in to achieving a minimum 5 Star Green 11 properties, Star certification for all new buildings with a entering the portfolio. strategic The Fund continues to work towards weighting improving environmental performance to eastern and achieving consumption intensity seaboard targets through the implementation central of a range of programs and projects. business district office markets.

The Gauge, Victoria Harbour, Melbourne, Australia – owned by APPF Commercial

our people

europe

In Europe, funds under management declined by $0.8 billion as a result of net revaluation decreases on underlying assets due to real estate conditions in the UK.

Americas

The loss after tax relates to the continued windup of the residual US Real Estate Investment business.

Image over page: Greenwich Peninsula, the £5b landmark London regeneration project covering 80 hectares – one of the largest ever mixed‑use community developments in the UK – is being led by Lend Lease and Quintain Estates

RICHARd deveLoPed A PeRIMeteR PRoteCtIon RAIL CLIMBInG SYSteM wHICH PRovIded FuLL enCLoSuRe to Seven woRkInG LeveLS on A HIGH-RISe ConCRete BuILdInG In BoSton. tHIS SYSteM MInIMISeS tHe RISk oF FALLS oF PeoPLe And MAteRIALS. RICHARd wAS AwARded Lend LeASe’S InCIdent & InJuRY FRee ConStRuCtIon LeAdeR oF tHe YeAR uSA AwARd In 2009.

CASe StudY: darling walk darling walk, Australia will not only showcase Regeneration project best-practice In September 2008, Lend Lease was for sustainability awarded the $560 million Darling Walk in buildings, regeneration project by the Sydney it will contribute Harbour Foreshore Authority. positively to the surrounding The 1.5 hectare site in Sydney’s public realm.

The project will include a low rise campus‑style commercial development totalling 58,000 square metres of commercial space across two nine‑ storey buildings, plus a Youth Theatre, a new retail precinct, a new park and children’s playground incorporating water play and associated car parking.

Lend Lease is committed to achieving the highest rating for environmentally sustainable design and construction for the project. The development will deliver potable water reduction of 90% through rainwater harvesting and on‑site waste water recycling initiatives; lower carbon emissions through design and use of chilled beams and fresh air systems; and a minimum 80% on‑site waste diverted from landfill through recycling.

The 1.5 hectare site in Sydney’s Darling Harbour precinct continues Lend Lease’s 20‑year association with the area and the Authority. During this time, Lend Lease has delivered six major stages of the precinct including the Four Points by Sheraton, three stages of Darling Park, Jacksons Landing and Cockle Bay Wharf.

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Lend Lease is the development manager for the project, with the Lend Lease managed APPF Commercial financing and acquiring the project in joint venture with one of Lend Lease’s offshore institutional investment clients. Bovis Lend Lease is responsible for project management, design management and construction. The office component of the building has been fully pre‑leased to the Commonwealth Bank of Australia for an average term of 13 years to accommodate over 5,000 employees.

Construction of Darling Walk, Sydney, Australia

Sustainability report

Sustainability has been an integral part of our culture for more than 50 years. today, our employees insist that making a difference in our communities, improving health and safety standards, and reducing our environmental impacts are central to our business strategy.

thanks to the innovative thinking and professional excellence that define our people, we’ve taken huge strides forward in our aspiration to be a global leader. our sustainability performance is now regularly updated on a dedicated website, every Action Adds up, to ensure we meet our reporting obligations to all our stakeholders.

lendlease.com/sustainability

How do we measure leadership?

Lend Lease is the only Australian company to be included in all three globally recognised sustainability reputation indices.

the dow Jones Sustainability Index is the first of the global indices to track the financial performance of leading sustainability-driven companies worldwide and is used by asset managers of sustainability portfolios worth close to US$8 billion.

the Goldman Sachs JBwere Climate Leadership Index lists the ‘best in class’ Australian and New Zealand respondents to the Carbon Disclosure Project (CDP). CDP represents 385 global institutional investors with more than US$57 trillion in assets under management and collects climate change data from 1,550 corporations worldwide.

the Global 100 Most Sustainable Corporations in the world is unveiled each year at the World Economic Forum in Davos and ranks performance on social, environmental and strategic governance issues through the lens of risk and shareholder value.

our safety

Incident & Injury free

Lend Lease has a deep and widespread commitment to operating Incident & Injury Free wherever we have a presence – this is an enormous challenge but one we are determined to progress.

Safety touches every aspect of the Lend Lease business, from the buildings we design and construct to the way our assets are managed.

We have implemented Global Minimum Requirements for safety to address key risks right across the business from our construction sites to the assets we design and manage.

the Safety dashboard includes compliance, incident reporting and key safety risk information for all Lend Lease construction projects throughout the world.

safety dashboard

The Safety Dashboard is a web‑based safety reporting system that provides a central reference point for all key construction safety data from across the company.

R: The Safety Dashboard is a powerful management tool utilised to improve safety performance

For more information on our health and safety performance, visit lendlease.com

Lend Lease has implemented global minimum requirements for safety to address key risks right across our business from construction sites to the assets we design and manage.

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

LtoR: Lend Lease
has a deep and
widespread
commitment to
operating Incident &
Injury Free wherever
we have a presence
Incident & Injury Free
Global Awards evening
The Athletes Village,
Stratford work site
----- End of picture text -----

									Sub-	Sub-
Project lend lease reported	date Circumstance fatalities fY09				Lend Lease employee		Sub-con. employee		con. of sub-con. employee
Central Park Plaza, Prague Astra Zeneca, Boston, USA		Sep 08 Oct 08	Fall >2 metres Aerial boom lift toppled			– –				X X
Astra Zeneca, Boston, USA		Oct 08	Aerial boom lift toppled			–				X
Durrat Al Bahrain, UAE Cascade Park Plaza, Bucharest, Romania		Nov 08 Feb 09	Scaffolding collapse Struck by moving vehicle			– –		X		X
Renaissance at Shorelands, Trinidad		Mar 08	Fall >2 metres			–		X
Cascade Park Plaza, Bucharest, Romania		May 09	Fall <2 metres			–		X
CRH New Kiln 7, Kamyanets Podilsky,	Ukraine	June 09	Fall >2 metres			–		X

3 Year fatality rates	07		08			09
Fatalities	9		6			8
Hours worked	154.6m		215.3m	228.3m
Fatality rate*	0.058		0.028	0.035

Health & safety Performance

Under our Incident & Injury Free vision we are striving to achieve zero incidents and injuries in our business. As we believe it is important to promote transparency, Lend Lease takes a comprehensive approach to incident reporting across our sites and assets by including incidents involving indirect contractors.

Sadly, eight people died on Lend Lease projects this financial year on our global construction sites. This is unacceptable.

Based on per million man hours worked

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

lend
lease lost
time Injury
frequency
rate ratio
By Region
and Global FY07
(per 200,000
man-hours)
It has been
encouraging
to see
a downward
trend in Lost
Time Incident
Frequency
Rates across FY08
the Group over
the past three
years.
FY09
1.85 1.92
1.46 1.42
1.05
0.32
0.12
1.63
1.43
1.25 1.15
0.20 0.91
0.08
1.39
1.23
1.00 0.99
0.58
0.13 0.19
BLL Australia BLL Asia BLL Americas BLL UK BLL CEMEA BLL Global US Actus
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the nominees and winners are an inspiration to us all. they clearly share a passion for delivering best practice in safety and are driving our vision of operating Incident & Injury Free.

Incident & Injury free global awards

Each year, Lend Lease hosts the Incident & Injury Free Global Awards, recognising and rewarding exceptional employees across our businesses who are leading Lend Lease’s journey to be Incident & Injury Free.

major incidents by circumstance fY09

36% Fall of materials

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15% Fall of person

15% Property damage

11% Electrical shock

5% Collapse of structure
5% Failure of work equipment
3% Struck by vehicle

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Site initiatives include:

site logistics planning

a dedicated delivery holding centre;

planning deliveries with the use of dedicated logistics software;
controlled site access delivery procedures;
fully enclosed pedestrian walkways;
clearly demarcated crossing points;
delivery routes; and
segregated unloading zones,

all contributing to an industry leading approach to the delivery of materials and the movement of people across this extremely busy site.

3% Slip, trip, step on, strike against
7% Other

2009 Annual Report to Shareholders Lend Lease Corporation

our environment

the development of large scale urban two Lend projects to demonstrate that cities Lease projects can grow in ways that are ‘climate are among positive’. Two Lend Lease projects, the first of Victoria Harbour in Melbourne and 16 Climate Elephant & Castle in London, are Positive amongst the first of 16 projects in development 10 countries across six continents. projects in 10 countries To reduce the net greenhouse gas across six emissions of the projects participating continents. in the Climate Positive program to below zero, property developers and local governments will agree to work in partnership on specific areas of activity. This includes implementing economically viable innovations in the buildings, the generation of clean energy, waste management, water management, transportation, and outdoor lighting systems.

developing leadership by working with leaders

In May this year at the C40 Summit in Korea, the Clinton Climate and outdoor lighting systems. Initiative launched a global program, When the initial 16 projects are developed in collaboration with completed, nearly one million people the U.S. Green Building Council will live and work in Climate Positive (USGBC). Called the Climate Positive communities. Development Program, it will support

clintonfoundation.org/cci

thinking like a leader

our people

clImate InternatIonal cuttIng PosItIve carbon rePortIng emIssIons calculator standards faster We have developed We have led work We have worked with increasing asset value, a carbon calculator on the development Lincolne Scott on a yield and return. It has that will be used by of international cap and trade solution piqued the interest of the Climate Positive greenhouse gas to drive deep, fast, over 50 government Development emissions reporting low‑cost emissions and business leaders program – 16 projects standards to be cuts in non‑residential in the UK, US, Asia around the world in adopted by global buildings: the Efficient and Australia. different climates and reporting frameworks Building Scheme could environments. and governments deliver jobs, innovation, around the world. and productivity while

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foundation – looking after employee wellbeing

‘Foundation’ is an independent business unit within Lend Lease, exclusively focused on employees, their families and community wellbeing. Foundation programs operate year‑round, and are accessible to all employees.

In today’s climate, Foundation’s role in Employees taking nurturing and developing employees is part in one of Foundation’s Health more important than ever. Foundation and Wellbeing programs inspire and engage programs employees, and in doing so, help to keep our teams motivated and positive.

Foundation is a constant through all climates. Employees are supported and developed when the business is growing, during times of change, and amidst challenging times.

183 Lend Lease projects have registered or have achieved green building certification.

Working in partnership for a better built environment

We are committed to proactively implementing strategies that address our impacts and reduce our greenhouse gas emissions globally. We do this through partnering with some of the world’s leading thinkers on the built environment, climate change and sustainability. In the past year Lend Lease, through its Global Head of Sustainability and other executives, has participated in and contributed to the work of the following organisations.

World Green Building Council and • United Nations Principles green building councils in the USA, for Responsible Investment UK, UAE, Argentina and Australia; • Prince of Wales Business
we have assisted with establishment and Environment Programme
of green building councils in Spain, Romania, Netherlands, Poland, Italy, • Global Reporting Initiative China and Malaysia, New Zealand Construction and Real Estate and South Africa Sector Supplement
Prince of Wales Business and Environment Programme
United Nations Environment Programme (UNEP) Sustainable Building & Climate Initiative (SBCI) and the SBCI Climate Change Think Tank
Singapore Building & Construction Authority’s International Panel of Experts (IPE) on Sustainability of the Built Environment
Australian Government’s Department of Climate Change & CSIRO Climate Adaptation National Research Flagship Stakeholder Group
World Economic Forum Global Agenda Council on the Future of Sustainable Construction
World Business Council for Sustainable Development
Australian Building Codes Board
United Nations Environment • NSW State Government Programme Finance Initiative Climate Change Council. Property Working Group

lendlease.com/sustainability

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

5 855 383 1054 675
Green skilling the number of
green building
our people accredited
professionals
has risen
from five to
675 in four
years, to
deliver green
rated offices
and assets.
legend
Green building trained
Green building accredited
professional
05 06 07 08 09
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cranes for children

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Rosie Morgan and her crane crew: Manuel Goncalves, Joe Sedlak, Stewart Kelly and Jose Gasper

2009 Annual Report to Shareholders Lend Lease Corporation

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 24
2	1.1 Role and Responsibilities 24
	1.2 Composition of the Board 25
	1.3 Independent directors 25
	1.4 Selection and Appointment of new directors 27
	1.5 Retirement and Re-election of directors 27
	1.6 Chairman of the Board 27
	1.7 Meetings 27
	1.8 Board Performance 27
	1.9 Shareholdings 28
	1.10 Induction and Briefng Programs 28
	1.11 Independent decision Making 28
	1.12 Company Secretary 28
	Senior Management 28
3	2.1 Structure 28
	2.2 Performance Review 28
	2.3 Remuneration 28
	directors’Remuneration 29
4	Board Committees 29
	4.1 Membership 29
	4.2 nomination Committee 30
	4.3 Personnel and organisation Committee 30
	4.4 Risk Management and Audit Committee 31
	4.5 Sustainability Committee 32
5	Governance Structure 33
6	Shareholder Communications and Continuous disclosure 33
7	6.1 external Communications and Continuous disclosure Policy 33
	6.2 Communications with Shareholders 33
	6.3 Annual General Meeting 34
	Risk Management 34
8	7.1 enterprise Risk Management 34
	7.2 Integrity in Financial Reporting, Risk Management and Internal Control 35
	external Auditor 35
9	8.1 Performance Management 35
	8.2 Selection, Appointment and Rotation 35
	8.3 Provision of non Audit and other Services 35
	8.4 Attendance at Annual General Meeting 35
	8.5 Auditor’s Independence 36
	8.6 Fees 36
	trading in Lend Lease Shares 36
10	the Lend Lease Core values 36
11	10.1 Core values 36
	10.2 Code of Conduct 37
	10.3 Code of Conduct Breach Reporting Policy 37
	10.4 Conficts of Interest 37
	10.5 Political donations 37
	Corporate Governance–Further Information 37
12	Compliance with ASx Recommendations 38

Lend Lease Commitment to Governance

The Directors believe that exceptional 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 complied with the ASX Corporate Governance Council’s Principles and Recommendations (ASX Recommendations). A table summarising the Group’s compliance is provided at the end of this Corporate Governance Statement.

In addition to the information set out in this section, the corporate governance area 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 3 September 2009.

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 Charter sets out the role, structure, responsibilities and operation of the Board as well as the function of, and division of responsibilities between, the Board and senior management. The Board has identified certain functions and responsibilities which are reserved to the Board pursuant to the Charter and these are set out in the table on the opposite page. The Board delegates authority for all other functions and matters necessary for the day‑to‑day management of the Group to the Chief Executive Officer (CEO). The CEO then delegates to senior management as required. 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 Board Charter, which includes the matters reserved to the Board and those delegated to the CEO, is available at the corporate governance section of the Lend Lease website at www.lendlease.com.

2009 Annual Consolidated Financial Report Lend Lease Corporation

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Stakeholders Responsibilities Reserved to the Board
Shareholders – Approval of business strategy and vision in line with efforts to drive shareholder
value creation
– Approval of business plans, assuring 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 currently fixed the maximum number of Directors at eight.

There are currently eight Directors on the Board, one Executive Director and seven Non Executive Directors. Membership of the Board as at 3 September 2009 is set out in the table on the following 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 parts 1.4 and 4.2 of this Corporate Governance Statement. Biographical details for the Directors are provided in the Directors’ Report on page 75.

1.3 Independent Directors

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 judgement. 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.

Corporate Governance continued

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.

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.

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, David Ryan and Mark Selway, are independent because each 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 judgement.

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 advisery 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 advisery services to Lend Lease in respect of the then proposed merger with General Property Trust. The Board does not consider Mr Ryan’s advisery 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.

Executive Director, Stephen McCann (Managing Director and CEO) is not considered to be an independent Director due to his integral involvement in the day-to-day management of the Group’s businesses.

				Retiring and
				seeking
			Last	re‑election
Director	Independent	Appointed	elected	in 2009
Executive Directors Stephen McCann Managing Director and CEO No Non Executive Directors David Crawford Chairman Yes		2009 2001	n/a1 2007	n/a1 No
PhillipColebatch	Yes	2005	2006	Yes
Gordon Edington	Yes	1999	2007	No
Peter Goldmark	Yes	1999	2008	No
Julie Hill	Yes	2006	2006	Yes
David Ryan	Yes	2004	2008	No
Mark Selway	Yes	2008	2008	No

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

2009 Annual Consolidated Financial Report Lend Lease Corporation

1.4 Selection and Appointment of New Directors

In relation to the selection and appointment of new Directors, the Nomination Committee has the following duties and responsibilities:

Regularly review the size and composition of the Board and the mix of expertise, skills, experience and perspectives that may be 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; and
Identify and evaluate Board candidates with the assistance of recruitment consultants if required, and recommend individuals for appointment to the Board.

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 undergo a thorough recruitment process which involves background checks and formal interviews with each of the Directors of 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.

1.5 Retirement and Re-election of Directors

Pursuant to the Constitution of Lend Lease Corporation Limited, 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 (excluding the Managing Director) must seek election at the first meeting of shareholders following their appointment.

A copy of the Constitution of Lend Lease Corporation Limited is available from the corporate governance section of the Lend Lease website at www.lendlease.com. Clause 6 of the Constitution details the procedures to be followed in relation to the appointment, retirement and re-election of Directors.

The Board unanimously endorses the re-election of Directors Phillip Colebatch and Julie Hill standing for re-election at the 2009 Annual General Meeting.

1.6 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.

1.7 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 on page 77. 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.

1.8 Board Performance

The Board and the Nomination Committee review Board and Board Committee performance and the performance of each of the Directors each year. In accordance with the Nomination Committee Charter, the Nomination Committee undertakes an external performance review at a minimum on a biennial basis, and the Board undertakes a self-assessment of their performance each alternate year.

External Review

Since 2004, the external performance review has been conducted by Colin Carter & Associates Board Advisers. Each year that a review is conducted, the performance of the Board and Board Committees is compared to prior year reviews as well as to the results of other Australian companies who have undertaken the same review process.

The main areas reviewed include:

Role of the Board;
Size and composition of the Board;
Procedures and practices of the Board;
Meeting arrangements and meeting discipline;
Relationship with Management; and
New challenges.

The findings of the external review are considered by the Board and remedial action taken where required.

Internal Review

In addition to those matters considered during an external review, the Nomination Committee Charter requires that an internal review also includes 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 internal review process includes interviews with the Directors and senior management, and may involve interviews with key stakeholders, 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.

Directors also undertake a self-assessment of their performance as part of this internal review for review by the Chairman. Non Executive Directors are also required pursuant to the Board Charter to consult with the Chairman before accepting new commitments which could impact on their available time.

Following analysis of all internal review processes, an action plan is formulated and remedial action taken where required.

Conduct of Reviews

The last external review was conducted prior to the start of the financial year in March 2008. An internal review was not conducted during the financial year. The next review is an external one and was commenced in September 2009.

Corporate Governance continued

1.9 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 Director’s 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.

1.10 Induction and Briefing Programs

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.

1.11 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.

1.12 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.

2. Senior Management

2.1 Structure

The Company’s management structure comprises the Managing Director and CEO, Stephen McCann, the Chief Financial Officer, Brad Soller, and the Executive Management Team (EMT).

The EMT is responsible for developing organisational and business strategy and sponsoring innovation and development of best practices across the Group. The EMT is also responsible for organisational effectiveness and the development of the Group’s values and culture.

The EMT comprises the functional heads, the regional CEOs and the Global CEO of Bovis Lend Lease and the Global Head of PPP. The EMT is responsible for managing the Group’s performance and key business issues in line with the Group’s long term strategy and for talent and performance management.

The EMT is chaired by the Managing Director and CEO, Stephen McCann, and the team meets face to face on a regular basis.

2.2 Performance Review

The CEO is responsible for setting financial targets as well as operational and management goals for the members of the EMT in consultation with the Personnel and Organisation Committee. Both short term and long term goals form part of the performance management of all senior executives. Long term goals are directly linked to remuneration benefits, which include retention and performance shares as set out in the Group’s Long Term Incentive Plan. Short term goals are generally directly linked to an annual bonus award. Further details of the Incentive Plans are contained in the Directors’ Report.

The CEO and Personnel and Organisation Committee conduct a detailed review of the performance of senior executives against these goals on an annual basis at the end of each financial year.

In accordance with this Policy, a review of the performance of all senior executives was conducted in the financial year and was in accordance with the procedure described above.

2.3 Remuneration

Details of the Group’s Remuneration Policy, including the remuneration of all senior executives, are based on performance measured against financial and individual targets as set out above in 2.2. Further information on executive incentive programs is set out in the Directors’ Report.

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.

2009 Annual Consolidated Financial Report Lend Lease Corporation

3 Directors’ Remuneration

Details of the Group’s Remuneration Policy and the remuneration of Directors is contained in the Directors’ Report.

Pre Vesting Hedging Arrangements

The Company policy in relation to Long Term Investment Plans prohibits executives from entering into pre vesting hedging arrangements in relation to LTI awards.

Directors, designated executives and employees must notify the General Counsel or Company Secretary prior to entering into transactions or arrangements that operate to limit the economic risk of vested entitlements to Lend Lease securities. Transactions or arrangements must only be entered into during the prescribed trading periods set out in the Securities Trading Policy. The Policy states that Directors, designated executives and employees must also not enter into transactions or arrangements that operate to limit the economic risk of unvested entitlements to Lend Lease securities. Key Management Personnel are required to complete an annual declaration that they have complied with the terms of the Securities Trading Policy.

Retirement Benefits Plan

Non Executive Directors accrue benefits in Lend Lease Corporation Limited shares which will fluctuate in line with the value of these 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 Corporation shares traded on the ASX during the five business days prior to 1 January each year.

The shares are 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. Further details of the Retirement Plan for Non Executive Directors are also provided 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.

==> picture [408 x 223] intentionally omitted <==

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

Risk
Personnel and Management
Nomination Organisation and Audit Sustainability
Director Independent Committee Committee Committee Committee
Executive Directors
Stephen McCann
Managing Director
and CEO No
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 Member Member
----- End of picture text -----

Corporate Governance continued

4.2 Nomination Committee

The Nomination Committee is governed by the Nomination Committee Charter which states that the principal purpose of the 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.

All Non Executive Directors are members of the Nomination Committee, with Peter Goldmark being the Chairman.

During the period 1 July 2008 to 30 June 2009, meetings of the Nomination Committee were held concurrently with scheduled 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 cooperation 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 renomination 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;

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.

A copy of the Nomination Committee Charter is available from the corporate governance section of the Lend Lease website at www.lendlease.com.

4.3 Personnel and Organisation Committee

The principal purpose of the Personnel and Organisation Committee (commonly referred to as a Remuneration Committee) is to assist the Board in fulfilling its corporate governance and oversight responsibilities in relation to establishing people management and remuneration 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;
Assure 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 four Non Executive Directors, Phillip Colebatch (Chairman), Julie Hill, David Ryan and Mark Selway (appointed 1 July 2009).

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 2008 to 30 June 2009, six meetings of the Committee were held, which were attended by all Committee members.

The Personnel and Organisation Committee Charter states that 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;
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;
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;

2009 Annual Consolidated Financial Report Lend Lease Corporation

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;
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; – 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.

A copy of the Charter of the Personnel and Organisation Committee is available from the corporate governance section of the Lend Lease website at www.lendlease.com.

4.4 Risk Management and Audit Committee

The Company has a Risk Management and Audit Committee which is governed by the Risk Management and Audit Committee Charter. The 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 Health, Safety and Risk 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 2008 to 30 June 2009, five meetings of the Committee were held, all of which were attended by all members of the Committee.

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;
– 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;
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;
Review the performance of the Group Head of Health, Safety and Risk and the risk management system and recommend to the Board, if necessary, the replacement of the Group Head of Health, Safety and Risk.

Corporate Governance continued

Financial Reporting

Evaluate the adequacy and effectiveness of administrative, operating and accounting controls used by the Group;
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 judgements;
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 judgements;
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;
Consider the impact of changes in accounting standards, listing rules and the Corporations Act.

Related Party Transactions

Review and monitor related party transactions.

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.

As a requirement of the Committee, senior management has designed and implemented a risk management and internal control system to manage the Group’s material business risks, and reports to the Committee on whether those risks are being managed effectively.

The Board’s Risk Management and Audit Committee is responsible for being kept informed on a regular basis of material business risks. In the reporting period, the Committee has received regular reports on material risks facing the Lend Lease businesses worldwide, and management has reported to the Board as to the effectiveness of the Company’s management of its known material business risks.

A copy of the Charter of the Risk Management and Audit Committee is available from the corporate governance section of the Lend Lease website at www.lendlease.com.

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 people, communities and the natural environment.

The Sustainability Committee comprises four Non Executive Directors, Julie Hill (Chairman), Gordon Edington, Peter Goldmark and Mark Selway (appointed 1 July 2009).

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

Health & Safety

Oversee the Global Health and Safety function of the Group;
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;
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;
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.

2009 Annual Consolidated Financial Report Lend Lease Corporation

5 Governance Structure

==> picture [407 x 174] intentionally omitted <==

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

Lend Lease
Board of Directors
Stephen McCann
CEO
Nomination Personnel and Risk Sustainability Executive
Committee Organisation Management Committee Management
Committee and Audit Team
Committee
----- End of picture text -----

6 Shareholder Communications and Continuous Disclosure

6.1 External Communications and Continuous Disclosure Policy

Lend Lease recognises the importance of complying with the Company’s continuous disclosure obligations as set out in the ASX Listing Rules. 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 these continuous disclosure obligations.

Pursuant to the terms of the Policy, the CEO has primary responsibility and accountability for ensuring that Lend Lease complies with its continuous disclosure responsibilities. The Company Secretary, the Group General Counsel and the Corporate Disclosure Manager are responsible for:

Supporting the CEO to ensure compliance; and
– All communications with the Australian and New Zealand stock exchanges.

Directors and senior management are required to:

Have in place reporting systems which are adequate to bring to their immediate attention, information which may be required to be disclosed; and
Ensure that all employees are aware of these continuous disclosure protocols.

Directors are required to state in writing to Lend Lease on an annual basis that they are familiar with the contents of this Policy.

The Policy explains the continuous disclosure obligations of Lend Lease, the procedure to be followed when information needs to be disclosed to the market, contains guidance on how to identify information which may fall within the disclosure requirements and the consequences of breaching the Policy.

The Policy states that Lend Lease must disclose information to the ASX and NZX immediately if:

A director or officer of Lend Lease becomes aware of information; and

The Policy also 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 Corporate Disclosure Manager is responsible for employee education on continuous disclosure obligations, external communications, monitoring of market information in relation to Lend Lease, maintaining records of information released to the market and ensuring that information on the Group’s website is up to date.

A copy of the External Communications and Continuous Disclosure Policy is available from the corporate governance section of the Lend Lease website at www.lendlease.com.

6.2 Communications with Shareholders

Lend Lease also recognises that while there is a legal obligation of disclosure, there is also an important ethical obligation to shareholders to ensure that investor confidence is maintained through effective, full and timely communication and disclosure to shareholders and the market.

The Group’s External Communications and Continuous Disclosure Policy is designed to facilitate this important objective, and promotes effective communication with shareholders by ensuring that information (in addition to information that may be required to be disclosed pursuant to the Company’s legal continuous disclosure obligations) that may otherwise be important to a shareholder, such as information about the Group’s activities, is available to the investor in a timely and readily accessible manner. The Policy ensures that 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 and investor organisations.
A reasonable person would expect that information to have a material effect on the Lend Lease share price or value.

Corporate Governance continued

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:

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.

6.3 Annual General Meeting

The Annual General Meeting is the primary opportunity for shareholders to meet face-toface 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, return addressed envelope to encourage maximum shareholder participation. The Notice also invites shareholders to submit questions ahead of the Meeting by using an online facility available through the Company’s share registry. During the Meeting, the Chairman will seek to address as many of the more frequently raised topics as possible within the time available. 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 business 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 Health, Safety and Risk. 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.

Risk Management Reporting

Lend Lease uses an online risk matrix to report and monitor risks in the following categories:

Financial;
Legal/Regulatory;
Health and Safety;
Performance;
Environment & Community;
People;
Property/Business Continuity; and
Information Technology.

The categorisation drives functional accountability for managing the primary cause or consequence of the risk, noting that all risks may impact our reputation.

The risk matrix defines risk tolerance of Lend Lease by setting thresholds for impact and likelihood and defining the material business risks required to be reported to the Board.

Key Risk Management Practices

Operational businesses are responsible for risk management outcomes and 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. Project control groups (PCGs) are set up as required to focus attention on particular risks, some of the risk PCGs focused attention on:

Residential sales performance;
Construction project pipeline and delivery;
Global minimum safety requirements;
Counterparty credit exposures; and
Overhead cost structure.

2009 Annual Consolidated Financial Report Lend Lease Corporation

The Group’s approach to risk management is guided by the Australian/New Zealand Standard on Risk Management. The relevant standard is AS/NZ4360 on Risk Management and the Committee of Sponsoring Organisations of the Treadway Committee (COSO) Enterprise Risk Management Framework.

Key Policies

A number of key global policies in addition to Board delegated Limits of Authority and business unit specific policies govern the way Lend Lease conducts its business globally and manages material business risks and includes:

Core Values;

Code of Conduct;
External Communications and Continuous Disclosure;
Securities Trading;
Risk Management;
Health and Safety;
Environment; and
Political Donations.

These can be found on our website www.lendlease.com.

A copy of the Group’s Risk Management Policy Statement and the above list of related Risk Management Policies are 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 2009:

With regard to the financial reports of the consolidated entity comprising Lend Lease Corporation Limited and its consolidated entities (‘the Consolidated Entity’):

– The Consolidated Entity’s financial records have been properly maintained in accordance with section 286 of the Corporations Act 2001 ; and

– The Consolidated Entity’s Financial Report presents a true and fair view, in all material respects, of the Consolidated Entity’s financial condition and operational results and complies with relevant accounting standards.

With regard to risk management and internal compliance and control systems of the Consolidated Entity, the statements made with respect to the integrity of the Consolidated Entity’s Financial Report are founded on a sound system of risk management and internal control and the system is operating effectively in all material respects.

Since 30 June 2009, 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.

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 Selection, Appointment and Rotation

The Risk Management and Audit Committee is responsible for making recommendations to the Board as to the selection, 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

The Board has implemented a 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 adviser or investment banking services;
Work that is remunerated through a ‘success fee’ structure;
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 services 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.

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.

Corporate Governance continued

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 a Securities Trading Policy to assist Directors, senior executives 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.

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
----- End of picture text -----

2009 Annual Consolidated Financial Report Lend Lease Corporation

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 also sets the practices required to maintain confidence in the Company’s integrity, and to take into account the expectations of all stakeholders and the Group’s legal obligations. The Code of Conduct has been endorsed by the Board and applies to the Directors and every employee across the Group.

The issues covered by the Code of Conduct set specific standards of behaviour which require that employees must:

Be aware of conflicts, actual or perceived;
Not participate in insider trading;
Not make unauthorised gains or payments;
Only use company assets as authorised;
Not disclose confidential information;
Ensure everyone has an equal opportunity;
Compete fairly;
Ensure sustainable outcomes for our stakeholders before making any business decisions;
Not make unauthorised public statements;
Not make political donations on behalf of Lend Lease;
Be familiar with the business unit policies and procedures that relate to our work; and
Help each other and work collaboratively.

Employees are encouraged to take action when faced with behaviour which seems to depart from the Code. The Code of Conduct Breach Reporting Policy (described below at 10.3) details the confidentiality, anonymity and other protections available to the person reporting subject behaviour.

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 or risk 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 Code of Conduct Breach Reporting Policy

The Code of Conduct is supported by a Code of Conduct Breach Reporting Policy. This Policy provides a mechanism for raising concerns about unethical or illegal business conduct, including behaviour which may not accord with our Core Values or Code of Conduct, and offers certain protections to anyone who reports concerns in good faith.

This Policy applies to all officers, employees and contractors of the Lend Lease Group in all jurisdictions where the Group operates. In some instances, Group companies in each jurisdiction also have their own more detailed reporting procedures which supplement this Policy and take into account local protected disclosure and other laws.

Concerns are reported either to management, human resources, legal or the compliance department, or via an email hotline. A thorough investigation and remedial action is taken where required.

The action taken to investigate disclosures under this Policy depends on the particular circumstances. Generally, disclosures made under this Policy are treated confidentially.

If an individual’s identity is disclosed during the investigation process, the individual will not be disadvantaged in their employment by any Group company. Lend Lease does not tolerate the taking of detrimental action against individuals who make a disclosure under this Policy in reprisal for making the disclosure.

10.4 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 with the Company Secretary any matters that may give rise to a conflict of interest.

10.5 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 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;
Code of Conduct Breach Reporting Policy;
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.

12 Compliance with ASX Recommendations

Corporate Governance continued

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ASX Recommendations Reference [1] Comply
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 2.2 and Yes
performance of senior executives Directors’ Report
1.3 Companies should provide the information indicated in the 1.1, 2.2 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, 1.6 Yes
2.3 The roles of chairman and chief executive officer should not 1.3 Yes
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 1.8 Yes
the performance of the board, its committees and
individual directors
2.6 Companies should provide the information indicated in the 1.2, 1.3, 1.8, Yes
Guide to reporting on Principle 2 1.11, 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 the 10.1, 10.2, 10.3 Yes
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, 10.3 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 in the 4.1, 4.4, 8.2 Yes
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 74.

2009 Annual Consolidated Financial Report Lend Lease Corporation

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

ASX Recommendations Reference [1] Comply
Principle 5: Make timely and balanced disclosure
5.1 Companies should establish written policies designed 6.1 Yes
to ensure 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 6.1 Yes
Guide to reporting on Principle 5
Principle 6: Respect the rights of shareholders
6.1 Companies should design a communications policy for 6.2, 6.3 Yes
promoting 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 6.2, 6.3 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 4.4, 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 the 4.4, 7.1, 7.2 Yes
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 of 2.3, 3 and Yes
non-executive directors’ remuneration from that of executive Directors’ Report
directors and senior executives
8.3 Companies should provide the information indicated in the 2.3, 3, 4.1, 4.3 and Yes
Guide to reporting on Principle 8 Directors’ Report
----- End of picture text -----

1 This is a reference to the relevant sections of this Corporate Governance Statement or to the Directors’ Report commencing on page 74.

Management Discussion and Analysis of Financial Condition and Results of Operations (MD&A)

Overview	40
Introduction Results Summary Statutory Proft/(Loss) After Tax Operating Proft After Tax Shareholder Returns Dividends Group Debt Cash Flow Investments Property Investment Revaluations Retail Overview of Business Key Financial Results	40 41 41 42 42 42 42 43 43 44 44 44 44
Retail–Asia Pacifc	45
Retail–Europe	45
Retail–Americas	45
Communities	46
Overview of Business	46
Key Financial Results	46
Communities–Asia Pacifc	46
Communities–Europe	48
Communities–Americas	49
Public Private Partnerships	49
Overview of Business	49
Key Financial Results	49
Public Private Partnerships–Americas	49
Public Private Partnerships–Europe	50
Investment Management	51
Overview of Business	51
Key Financial Results	51
Funds Under Management	52
Project Management and Construction	52
Key Financial Results	52
New Work Secured and Backlog GPM	53
Corporate	54
Group Services	54
Group Treasury	54
Appendix 1–Results Detail	55
Appendix 2 – Operating Results Detail
in Local Currency	56

All currency amounts in the MD&A are expressed in Australian dollars unless otherwise specified. The following discussion and analysis is based on the Lend Lease Corporation (the Group) Consolidated Financial Statements for the year ended 30 June 2009 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. This business also includes the Group’s ownership interests in direct property investments, including those held via limited partnerships;
The Communities business is involved in the development of large scale master-planned urban communities, inner city apartments and senior living;
The Public Private Partnerships (PPP) business manages and invests equity in large PPP projects;
Investment Management provides real estate investment management services. Investment Management includes the Group’s ownership interests in property investments held indirectly through investments in Lend Lease managed funds;
Project Management and Construction provides construction, project management and design services through Bovis Lend Lease (Bovis).

2009 Annual Consolidated Financial Report Lend Lease Corporation

Results Summary

Results Summary	Results Summary
Revenue		EBITDA		Proft/(Loss) After Tax1,2
June 2009	June 2008	June 2009	June 2008	June 2009	June 2008
A$m	A$m	A$m	A$m	A$m	A$m
Retail 125.8	130.7	86.0	79.4	60.3	66.1
Communities 586.4	969.5	70.0	124.0	88.3	100.3
Public Private Partnerships 1,507.0	962.7	66.7	46.0	74.4	59.0
Investment Management 69.1	127.3	35.3	151.2	28.9	137.3
Project Management and Construction 12,422.0	12,426.8	251.6	201.7	168.9	150.0
Total operatingbusinesses 14,710.3	14,617.0	509.6	602.3	420.8	512.7
Group Services 23.4	7.6	(80.6)	(86.2)	(67.8)	(59.0)
Group Treasury 51.3	53.3	(17.2)	1.0	(41.4)	(14.8)
GroupAmortisation				(4.1)	(3.0)
Total corporate 74.7	60.9	(97.8)	(85.2)	(113.3)	(76.8)
Total operating 14,785.0	14,677.9	411.8	517.1	307.5	435.9
Inventory carrying value adjustments		(226.1)	(121.5)	(188.3)	(121.5)
Goodwill impairments Other carrying value adjustments Property investment revaluations3 Savings implementation costs Net gain on Bovis UK pension scheme curtailment		(252.9) (233.0) (325.7) (120.8) 44.3	(69.2)	(252.9) (204.7) (263.0) (83.9) 31.7	(60.2)
Total statutory 14,785.0	14,677.9	(702.4)	326.4	(653.6)	254.2

1 Profit/(loss) after tax is after adjusting for the loss attributable to minority interests of A$12.3 million (June 2008: A$6.4 million loss after tax). 2 June 2008 operating profit after tax has been adjusted to A$435.9 million (statutory profit has been adjusted to A$254.2 million) to reflect the impact of adopting AASB Interpretation 12 Service Concession Arrangements for the first time this year. The before and after tax effect of the adjustment for the year ended June 2008 is an A$11.2 million loss. All ratios have been restated based on the revised results.

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

The difficult economic environment experienced in the first half of the financial year continued to impact the Group in the six months ended 30 June 2009. As a result, the Group has seen a significant slowdown in all of its key markets and geographies. The market turbulence has also led to a large decline in property asset values. This resulted in a write-down in the carrying value of the Group’s tangible and intangible assets of A$656.0 million after tax and A$252.9 million after tax respectively. In response to slowing momentum, the Group has implemented a number of cost reduction initiatives which have resulted in one-off implementation costs of A$83.9 million after tax. The Group recognised a net gain from the curtailment of the Bovis UK pension scheme of A$31.7 million after tax.

As a result of the above non operating adjustments, the Group reports a statutory loss after tax of A$653.6 million for the year ended 30 June 2009. The Group continues to remain focused on key financial fundamentals such as strong cash management and maintaining liquidity as well as significant cost reductions to ensure its cost base aligns with market conditions.

The Group remains in a strong financial position with cash and cash equivalents at 30 June 2009 of A$1,120.8 million (June 2008: A$842.8 million), net debt (including other non current financial liabilities) of A$195.8 million (June 2008: A$287.3 million) and low gearing (net debt to total tangible assets, less cash) of 2.9% (June 2008: 4.1%).

During the year, the Group completed the acquisition of a 43.2% stake in Lend Lease Primelife Limited (LLP) (previously known as Babcock & Brown Communities Group) and the associated management rights, expanding the Group’s interest in the fast growing retirement sector.

Statutory Profit/(Loss) After Tax

The Group has reported a statutory loss after tax for the year ended 30 June 2009 of A$653.6 million after recognising the following non operating adjustments:

A reduction in the carrying value of inventory of A$188.3 million after tax principally relating to the Communities businesses in Australia, the United Kingdom (UK) and the United States (US) due to adverse trading conditions;
The impairment of the carrying value of the goodwill in Crosby Lend Lease (Crosby) of A$172.4 million after tax and the Australian Communities business of A$80.5 million after tax due to a deterioration in residential markets;
– Other carrying value adjustments of A$204.7 million after tax which includes a reduction in the carrying value of the Group’s interests in both UK and Australian retail and communities projects, investment management funds in Australia and a loss of A$33.9 million after tax on the Group’s exposure to the FKP Property Group;
Unrealised property investment revaluation losses on retail investments of A$263.0 million after tax due to the expansion of capitalisation rates in all property markets, most significantly in the UK and US;
In response to slowing market conditions, cost savings initiatives have been implemented which resulted in one-off implementation costs of A$83.9 million after tax;
The curtailment of the Bovis UK pension scheme has resulted in a net gain of A$31.7 million after tax.

MD&A continued

Overview continued

Operating Profit After Tax

Operating profit after tax for the year ended 30 June 2009 decreased by 29% to A$307.5 million. Operating profit after tax was positively impacted by foreign exchange movements of A$17.1 million. The Retail business operating profit after tax, although lower than the prior year, has remained relatively robust primarily due to a comparably stable income flow from the Bluewater and King of Prussia Shopping Centres.

The Communities business operating profit after tax decreased due to a decline in residential sales and settlement volumes in both the UK and Australia due to weak trading conditions. The result for Asia Pacific Communities includes the sale of the Group’s interest in seven retirement villages and an aged care facility to LLP.

The increase in operating profit after tax for the PPP business is mainly attributable to the UK PPP business, where operating profit after tax increased due to a negative prior year adjustment as a result of adopting AASB Interpretation 12 Service Concession Arrangements for the first time this year. No Actus Lend Lease (Actus) projects reached financial close during the year.

The contribution from Investment Management was lower as the prior year included a profit after tax of A$40.1 million from the sale of a proportion of the Group’s interest in Australian Prime Property Funds (APPF) and a tax exempt dividend of A$47.9 million from the Group’s interest in the adviser company to Lend Lease Global Properties, SICAF (Global Fund) in relation to incentive fees.

Project Management and Construction operating profit after tax increased, reflecting the strong performance of the Australian business and improved performance in the UK.

Group Services includes costs related to Lend Lease Ventures, which is focused on the commercialisation of green energy opportunities and associated property related activities, and increased costs related to the Group’s captive insurance vehicle.

Group Treasury profit after tax decreased due to higher interest costs driven by the £350.0 million UK syndicated bank facility being fully drawn down for part of the year, lower interest rates on cash deposits and the hedge cost on current year profits.

Shareholder Returns

Shareholder Returns due to a negative prior year adjustment as a result of adopting AASB Interpretation 12_Service_ _Concession Arrangements_for the frst time this year. No Actus Lend Lease (Actus) projects reached fnancial close during the year. deposits	and the hedge	cost on curren	t year profts.
		June 2009	June 20081
Earnings per share (EPS) on operating proft after tax2	cents	72.5	108.7
EPS on statutory proft/(loss) after tax2	cents	(154.1)	63.4
Return on equity (ROE)on statutory proft/(loss)after tax3	%	(24.4)	8.2

1 The ratios for the year ended June 2008 have been adjusted for the impact of adopting AASB Interpretation 12 Service Concession Arrangements for the first time.

2 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. 3 ROE is calculated based on statutory profit/(loss) after tax and average equity.

Dividends

A final 100% franked dividend of 16 cents per share will be paid on 25 September 2009 (June 2008: 34 cents per share 45% franked). This represents a payout ratio of 61% of operating profit after tax for the full year ended 30 June 2009.

Group Debt

Group Debt
		June 2009	June 2008
Net debt1	A$m	195.8	287.3
Gross borrowings to total tangible assets2	%	16.9	14.5
Net debt to total tangible assets, less cash3	%	2.9	4.1
Interest coverage4	times	5.2	7.7
Credit rating (Standard & Poor’s/Moody’s)	rating	BBB–/Baa3	BBB–/Baa3

1 Net debt is borrowings, including other non current financial liabilities, less cash.

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

3 Calculated as net debt divided by total tangible assets, less cash.

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

The Group’s net debt at 30 June 2009 was A$195.8 million, including other non current financial liabilities of A$191.6 million. The Group’s gearing remains low and interest coverage at 5.2 times is in line with the Group’s internal target.

The Group is in a strong liquidity position with cash and cash equivalents of A$1,120.8 million at 30 June 2009. In addition, the Group had undrawn committed bank facilities of A$612.0 million.

The average maturity of Lend Lease’s drawn debt at 30 June 2009 was eight years, with the earliest maturity date being November 2010.

At 30 June 2009, the mix of borrowings, including other non current financial liabilities, was 76% at fixed rates and 24% at floating rates.

On 11 February 2009, Lend Lease issued 50 million new shares via an institutional placement which raised A$302.5 million before costs associated with the placement.

The Group continues to maintain an investment-grade credit rating.

2009 Annual Consolidated Financial Report Lend Lease Corporation

Cash Flow

Cash Flow
	June 2009	June 2008
	A$m	A$m
Net cash provided by operating activities	382.2	268.7
Net cash (used in)/provided by investing activities	(473.9)	364.5
Net cash provided by/(used in) fnancing activities	356.0	(312.4)
Effect of foreign exchange rate movements on cash and cash equivalents	13.7	(28.1)
Net increase in cash and cash equivalents	278.0	292.7

Operating cash inflows of A$382.2 million represent the underlying cash flows from the Group’s operating businesses net of continued investment in property developments. This is a significant increase in the current year as the prior year also included the receipt of the tax refund and associated interest from the resolution of the tax dispute with the Australian Taxation Office.

Investing cash outflows of A$473.9 million includes the acquisition of the Group’s further stake in LLP, the associated management rights and the related convertible notes.

Financing cash inflows of A$356.0 million principally relates to the proceeds from the share issue of A$302.5 million and the partial drawdown of the £350 million syndicated bank facility offset against dividend payments of A$188.3 million.

Investments

		Lend Lease	Lend Lease
		Share of	Share of	Market	Market
		Income1,2	Income1,2	Value3	Value3
		June 2009	June 2008	June 2009	June 2008
	Region	A$m	A$m	A$m	A$m
Retail
Bluewater	UK	53.7	58.5	814.3	1,188.8
King of Prussia	US	33.9	25.7	427.0	421.7
Other retail investments	Various	5.9	11.5	222.8	406.0
Total		93.5	95.7	1,464.1	2,016.5
Investment Management
Other retail investments	Various	24.3	70.0	432.7	505.5
Other investments	Various	2.0	22.7	72.9	98.3
Total		26.3	92.7	505.6	603.8
Total investments		119.8	188.4	1,969.7	2,620.3

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

2 There are no gains or losses on the disposal or redemption of available for sale financial assets included in Lend Lease’s share of income for the year ended 30 June 2009 (June 2008: A$67.0 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$2.0 billion at 30 June 2009. The market value of investments declined by A$650.6 million due to a weakening of capitalisation rates in all regions. This decline is net of positive foreign exchange movements of A$90.8 million.

During the year, the Group’s interest in property investments generated investment income EBITDA of A$119.8 million (June 2008: A$121.4 million), excluding gains on the disposal or redemption of available for sale financial assets.

Retail

The independent market value of 100% of Bluewater at 30 June 2009 decreased by 30% to £1,330.0 million (A$2,714.3 million). The value of Lend Lease’s 30% direct interest decreased by A$374.5 million to A$814.3 million, net of foreign exchange movements. As Bluewater is held as inventory, the asset is recorded at cost in the financial statements, which at 30 June 2009 was A$506.2 million (June 2008: A$520.7 million).

The value of Lend Lease’s 50% interest in King of Prussia decreased by 14% to US$345.9 million (June 2008: US$400.6 million), although the Australian dollar equivalent value increased due to a positive foreign exchange movement. Other retail investments have decreased by A$183.2 million principally due to a decline in the market value of investments as a result of an expansion in capitalisation rates.

Investment Management

Other retail investments decreased by A$72.8 million to A$432.7 million principally due to a decrease in the market value of the Group’s UK investment in Lend Lease Overgate Partnership and Lend Lease Retail Partnership.

Other investments decreased by A$25.4 million principally due to a decrease in the market value of the Group’s UK investments.

MD&A continued

Overview continued

Property Investment Revaluations

Overview continued Property Investment Revaluations
		Unrealised	Unrealised	Unrealised	Unrealised
		Revaluation	Revaluation	Revaluation	Revaluation
		Gain/(Loss)	Gain/(Loss)	Gain/(Loss)	Gain/(Loss)
		Before Tax	Before Tax	After Tax	After Tax
		June 2009	June 2008	June 2009	June 2008
	Region	A$m	A$m	A$m	A$m
Retail
Pakenham Place	Australia	(3.6)	(2.9)	(3.6)	(2.8)
Chelmsford Meadows Shopping Centre	UK	(58.6)	(34.7)	(43.9)	(25.8)
Performance Retail Limited Partnership	UK	(28.2)	(9.5)	(26.4)	(7.8)
Warrington Retail Limited Partnership	UK	(88.5)	(31.1)	(88.5)	(31.1)
Kingof Prussia	US	(84.5)	(6.9)	(49.4)	(4.0)
Total		(263.4)	(85.1)	(211.8)	(71.5)
Investment Management
Asia Pacifc Investment Company No. 2
Limited	Asia	(11.6)	22.7	(8.1)	15.9
Lend Lease Overgate Partnership	UK	(50.7)	(6.8)	(43.1)	(4.6)
Total		(62.3)	15.9	(51.2)	11.3
Totalpropertyinvestment revaluations1		(325.7)	(69.2)	(263.0)	(60.2)

1 Represents unrealised revaluations 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/(loss).

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
	June 2009	June 2008	June 2009	June 2008	June 2009	June 2008
	A$m	A$m	A$m	A$m	A$m	A$m
Property Management
Asia Pacifc	39.9	34.2	11.6	2.0	8.2	1.3
Europe	17.2	22.2	(19.1)	(18.3)	(16.6)	(15.5)
Total	57.1	56.4	(7.5)	(16.3)	(8.4)	(14.2)
Investment Income
Asia Pacifc	1.3	1.1	0.9	0.6	0.7	0.4
Europe	67.4	73.2	58.7	69.4	40.6	57.8
Americas			33.9	25.7	27.4	22.1
Total	68.7	74.3	93.5	95.7	68.7	80.3
Total Operating
Asia Pacifc	41.2	35.3	12.5	2.6	8.9	1.7
Europe	84.6	95.4	39.6	51.1	24.0	42.3
Americas			33.9	25.7	27.4	22.1
Total operating	125.8	130.7	86.0	79.4	60.3	66.1

Total operating profit after tax decreased by A$5.8 million from the prior year, principally due to difficult trading conditions in the UK. The adjustments made to the carrying value of assets are excluded from operating profit but are included in the Group’s statutory loss after tax.

2009 Annual Consolidated Financial Report Lend Lease Corporation

Retail – Asia Pacific

Operating profit after tax increased by A$7.2 million to A$8.9 million due to increased fees from assets under management and reduced overheads. In Asia Pacific, Lend Lease holds a direct ownership interest in two development opportunities and two operating retail centres. The business is currently undertaking master-planning and development management of six centres in Australia and one in Singapore with an estimated gross development cost of A$2.8 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 602,700 square metres (sqm).

Key trading events in the year include:

Construction and pre-leasing progressing at the 313@somerset retail development. The development is expected to commence trading in late 2009. Lend Lease has a 25% direct ownership interest in the development, with the remaining 75% held by Lend Lease Asian Retail Investment Fund (ARIF), in which Lend Lease holds a 10.1% interest;
Construction and pre-leasing progressing at the 420 George Street retail and commercial development in the Sydney central business district. APPF Retail holds a 25% interest in the retail development and APPF Commercial 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;
Completion of the redevelopment of PoMo (formerly Paradiz Centre), a retail and commercial building in Singapore. Lend Lease has a 25% direct ownership interest in the asset;
Construction and pre-leasing commencing on the Caroline Springs retail development in western Melbourne. The Lend Lease Core Plus Fund (LLCPF) holds a 50% interest in the retail development and APPF Retail holds the remaining 50% interest. Completion of this development is expected in late 2009;
Lend Lease manages all phases of these development projects including development, leasing, project management, design and construction and, on completion, asset and property management.

Retail – Europe

Operating profit after tax of A$24.0 million declined by A$18.3 million compared with the prior year, as a result of difficult trading conditions in the UK that resulted in a decrease in retail income and increased maintenance costs.

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 of these centres with an estimated gross development cost of A$1.9 billion. Given current economic conditions, a review of the development pipeline had been conducted and, where appropriate, capital expenditure has been curtailed or deferred. The business also carries out the asset management of five centres with a total gross lettable area of 336,700 sqm.

Key trading events in the year include:

The Preston Tithebarn Development, a 50% joint venture with Grosvenor Estates, secured a resolution to grant planning permission on 14 July 2009. The decision will be referred to Central Government to consider whether to call-in the application for public inquiry. A decision on a call-in is expected in 2009. In addition to securing John Lewis as a key scheme anchor, agreements to lease were signed with Marks & Spencer and cinema operator, Cineworld. Given current market conditions, expenditure has been significantly curtailed;
As already noted, there was a significant decline in the carrying value of the Group’s investments in retail assets due to higher capitalisation rates across the portfolio.

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 operating income in US dollar terms is in line with the prior year.

The value of Lend Lease’s 50% interest in King of Prussia decreased by 14% to US$345.9 million (June 2008: US$400.6 million), principally due to an increase in capitalisation rates, although the Australian dollar equivalent value increased due to a positive foreign exchange movement.

MD&A continued

Communities

Overview of Business

The Communities business is involved in the development of large scale master-planned urban communities, inner city apartments and senior living. 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 2009	June 2008	June 2009	June 2008	June 2009	June 2008
	A$m	A$m	A$m	A$m	A$m	A$m
Asia Pacifc	463.0	579.0	90.4	104.2	99.9	82.7
Europe	123.4	390.1	(18.8)	25.5	(10.4)	21.1
Americas		0.4	(1.6)	(5.7)	(1.2)	(3.5)
Total operating	586.4	969.5	70.0	124.0	88.3	100.3

Total operating profit after tax decreased by A$12.0 million due to a significant decline in residential sales and settlement volumes as a result of weak trading conditions in both the UK and Australia compared to the prior year. The Asia Pacific Communities business includes the profit from the sale of its interest in seven retirement villages and an aged care facility to LLP for a consideration of A$133.4 million.

As a result of the adverse trading conditions across the Australian and UK markets, the Communities business has reduced the carrying value of its inventory and other assets and has written off the goodwill in relation to the Crosby and Australian Communities businesses. These adjustments are excluded from operating profit after tax but are included in the Group’s statutory loss after tax.

The Communities business has a residential backlog of 102,040 units and a total commercial backlog of 4.7 million sqm.

Communities – Asia Pacific

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

4.7 million sqm. Communities – Asia Pacifc The key fnancial results for Communities – Asia Pacifc are detailed below.
	June 2009	June 2008
Operating proft after tax (A$m)	99.9	82.7
Number of units settled1	2,815	3,439
Gross sales value of units settled (A$m)1,2	999.6	949.7
Gross sales value of pre-sales (A$m)1,3	339.3	589.4
Number of projects4	39	47
Backlog (number of units)5,6
– Zoned (with planning approval)	26,790	27,090
– Unzoned(awaiting planningapprovals)	58,005	58,240
Backlog– Residential(units)	84,795	85,330
Backlog– Commercial(sqm/000s)	3,478.7	3,228.8

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 2009 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 years.
4 The number of projects excludes 61 retirement villages and 33 aged care facilities held by LLP.

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 This excludes the backlog for LLP retirement villages and aged care facilities.

The Communities business in Asia Pacific is focused on building a portfolio of market leading projects and assets in key sectors, including master-planned urban communities through Delfin Lend Lease; apartments through Vivas Lend Lease; integrated mixed-use property developments through Lend Lease Development; and senior living through co-investment and management of LLP and direct ownership through Retirement by Design. 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, aged care and village operations).

2009 Annual Consolidated Financial Report Lend Lease Corporation

The key financial results of the business by product line are detailed below.

	Residential	Residential	Residential	Residential
	Land Lots		Built‑Form		Commercial1		Senior	Living	Total
	June	June	June	June	June	June	June	June	June	June
	2009	2008	2009	2008	2009	2008	2009	2008	2009	2008
Settlements2
Number of units3	2,419	3,104	352	283			44	52	2,815	3,439
Gross sales
value(A$m)4	415.4	505.0	338.0	207.0	233.1	220.3	13.1	17.4	999.6	949.7
Pre-sales2,5
Number of units	860	1,217	212	362				6	1,072	1,585
Gross sales
value(A$m)	163.4	220.8	164.7	348.9	11.2	17.7		2.0	339.3	589.4

1 The number of units settled and pre-sales number of units are not relevant measures for commercial.
2 Includes 100% of joint venture projects and therefore will not necessarily correlate with Lend Lease’s profit after tax.
3 The number of units settled during the year for Senior Living refers to primary sales (new development sites) and excludes any resales.
4 Gross sales value of units settled reflects revenue from projects and the sale of deferred management fees.

5 Pre-sales number of units represents contracts entered into prior to 30 June 2009 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 years. The table excludes pre-sales relating to LLP.

Key trading events in the year include:

Completing the acquisition of a 43.2% stake in LLP, the associated management rights and related convertible notes. As part of the transaction, the Group sold its interest in seven mature retirement villages and an aged care facility for a consideration of A$133.4 million;
The total number of residential land lots settled decreased by 22% to 2,419 units as weaker trading conditions have been experienced, particularly in New South Wales, resulting in reduced revenues;
The average sales price per residential land lot increased by 6% from A$162,700 to A$171,700, which reflects strong price growth in Victoria and the Forde project in the ACT;
Residential built-form units settled increased by 69 units to 352 units. The current year includes built-form settlements on the Mosaic building at Victoria Harbour, Melbourne; Varsity Lakes, Queensland; Rouse Hill, Sydney; the evolve and Stonecutters buildings at Jacksons Landing, Sydney and the final settlements at Newington in Sydney;
The average sales price per residential built-form unit increased by 31% from A$731,000 to A$960,000, which reflects the significant proportion of high value evolve and Stonecutters apartments at Jacksons Landing being sold in the year;
The gross sales value of commercial projects of A$233.1 million was marginally above prior year and included the sale by the Group of seven retirement villages and an aged care facility to LLP for A$133.4 million;
The number of units pre-sold at 30 June 2009 of 1,072 decreased by 32% on the prior year due to weaker trading conditions;
The acquisition of the Springbank Rise (formerly Casey 2) project in Canberra in partnership with Macquarie Real Estate Equity Fund No. 6, which added 1,100 zoned lots to backlog and will commence trading in 2010;
Securing Blake’s Crossing, an 88-hectare site in South Australia, which added 1,390 residential lots to zoned backlog and achieved its first settlements in June 2009;
Commencing development of the Darling Walk site, a 64,000 sqm commercial project at Darling Harbour, Sydney, under leasehold from the Sydney Harbour Foreshore Authority, with APPF Commercial and an institutional investor as the 50/50 joint owners of the 99-year lease. Lend Lease provides development, design and construction services;
Selected as preferred partner for the major regeneration of the RNA Showgrounds precinct in Brisbane. The project will be staged over 15 years with a projected value of A$2.5 billion.

MD&A continued

Communities 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.

The key fnancial results for Communities – Europe are detailed below.
	June 2009	June 2008
Operating (loss)/proft after tax (A$m)	(10.4)	21.1
Number of units settled1	451	976
Gross sales value of units settled (A$m)1,2	111.9	380.2
Number of units pre-sold1	286	285
Gross sales value of pre-sales (A$m)1,3	28.5	41.6
Number of projects	27	27
Backlog (number of units)4
– Zoned (with planning approval)	13,115	13,520
– Unzoned(awaiting planningapprovals)	275	950
Backlog– Residential(units)	13,390	14,470
Backlog– Commercial(sqm/000s)	410.1	422.6

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.
3 Pre-sales represent contracts entered into prior to 30 June 2009 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 years.

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.

Communities – Europe has 27 projects: 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 UK business are: residential land lots; residential built-form (including houses, terraces and apartments); and commercial (including retail, office, light industrial and social infrastructure). Key trading events in the year include:

Operating profit after tax has decreased by A$31.5 million to a loss after tax of A$10.4 million;
– The gross sales value of units settled decreased by A$268.3 million and the number of units settled decreased by 525 over the year. Gross sales value of pre-sales declined to A$28.5 million reflecting the slowdown in the UK market. There were no sales of commercial units 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. An office development with a substantial pre-let to Transport for London for 19,400 sqm was completed in July 2009. The Ravensbourne College of Design & Communications is also now under construction;
In August 2008, Lend Lease was appointed as Development and Construction Manager for the first phase of Stratford City, a mixed-use development on 54 hectares of land with an existing planning consent of 9.4 million square feet. This first phase involves building the Athletes’ Village for the London 2012 Olympic

and Paralympic Games for the Olympic Delivery Authority (ODA). Over the past two years, Lend Lease has been in negotiations with the ODA and London and Continental Railways on the terms of the development and financing of the whole of Stratford City. These negotiations ended in May 2009 when the ODA decided to fund the project itself, having assessed Lend Lease’s financial offer. Lend Lease continues to act as Development and Construction Manager; – In July 2007, Lend Lease was appointed as preferred bidder for the development of land at Elephant and Castle. Lend Lease is in negotiations with the London Borough of Southwark to agree a Regeneration Agreement for the building of a mixed-use development of 2,700 homes and retail and office space. In May 2008, Lend Lease entered into an exclusivity agreement with Southwark Council, the purpose of which was to provide Lend Lease with exclusive partner status while the extent of the decline in the UK market was evaluated. The agreement meant that the Council would not engage with alternative developers on this regeneration project. Continued market uncertainty resulted in the agreement being further extended and the Council’s Executive agreed on 21 July 2009 to continue with the exclusivity deal. To date, there has been no significant expenditure on this development;

As announced at the half year the carrying value of inventory and goodwill relating to Crosby was written down by A$100.4 million and A$172.4 million respectively. The write-downs are excluded from operating profit but are included in the Group’s statutory loss for the year.

2009 Annual Consolidated Financial Report Lend Lease Corporation

Communities – Americas

In the US, the Communities business focuses on large scale urban greenfield development and regeneration opportunities. The business has one project, Horizon Uptown in Denver, Colorado. The key financial results for Communities – Americas are detailed below.

opportunities. The business has one project, Horizon Uptown in Denver, Colorado. The key fnancial results for Communities – Americas are detailed below.
June 2009	June 2008
Operating loss after tax (A$m) (1.2)	(3.5)
Number of units settled	1
Gross sales value of units settled (A$m)	0.3
Number of projects 1	2
Backlog (number of units)1 – Zoned (with planning approval) 3,855	3,760
– Unzoned(awaiting planningapprovals)	13,365
Backlog– Residential(units) 3,855	17,125
Backlog– Commercial(sqm/000s) 841.3	1,382.7

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

Key trading events in the year include:

Local municipality approvals have been received on the Horizon Uptown project. The project is expected to be launched in 2012, subject to favourable market conditions;
A final termination notice under the Development Management Services Agreement with the Colorado State Board of Land Commissioners (CSB) for the Lowry Range project was issued on 9 January 2009, as conditions precedent under the Agreement had not been achieved. Lend Lease retains a first right of refusal to participate in the project if certain conditions are met by CSB.

Public Private Partnerships

Overview of Business

The PPP business consists of Actus in the US and the PPP projects in Europe.

Key Financial Results

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

	Revenue	Revenue	EBITDA	EBITDA	Proft/(Loss) After Tax1	Proft/(Loss) After Tax1
	June 2009	June 2008	June 2009	June 2008	June 2009	June 2008
	A$m	A$m	A$m	A$m	A$m	A$m
Americas	1,378.1	856.2	79.5	79.4	68.2	72.2
Europe	128.9	106.5	(12.8)	(33.4)	6.2	(13.2)
Total operating	1,507.0	962.7	66.7	46.0	74.4	59.0

1 June 2008 operating loss after tax of A$13.2 million has been adjusted from an operating profit after tax of A$0.8 million to reflect the impact of adopting AASB Interpretation 12 Service Concession Arrangements for the first time this year.

Public Private Partnerships – Americas

The primary focus of Actus is the Military Housing Privatization Initiative (MHPI) for all branches of the USA Military. 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.

50 years. The key fnancial results for PPP – Americas are detailed below.
	June 2009 June 2008
Proft after tax (A$m)	68.2 72.2
Development gross proft margin (GPM) (A$m)	24.5 46.7
Construction GPM (A$m)	62.7 47.1
Asset management GPM (A$m)	17.2 11.3
Equity returns (A$m)	3.7 2.4
Number of projects1	19 19
Backlog (number of units under management)
– Operational (secured)	38,500 38,450
– Preferred bidder(awarded)	5,550 6,300
Total backlog	44,050 44,750

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

Key trading events in the year include:

Decreased development fee income as no projects reached financial close in the year ended 30 June 2009. Development fees represent a fee for service and are not at risk from project performance;
Construction GPM and asset management GPM remain in line with the delivery program;
Current market conditions have resulted in a reduction in the proposed scope of the Fort Wainwright and Fort Greely project and the Privatised Army Lodging project for which Actus is preferred bidder.

MD&A continued

Public Private Partnerships continued

Public Private Partnerships – Americas continued 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 20091	June 20081	June 20092,3	June 20082,3
	A$m	A$m	A$m	A$m
Projects in operational status (secured)	64.0	165.2	431.0	382.3
Projects inpreferred bidder status(awarded)4	(28.5)	(83.4)	52.1	65.2
Total	35.5	81.8	483.1	447.5

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

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

3 Although Backlog GPM is realised 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 Backlog GPM is US$352.7 million (June 2008: US$402.8 million).

4 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.

Backlog GPM at 30 June 2009 was impacted by a positive movement in foreign exchange of A$104.2 million. Backlog GPM Realisation

Backlog GPM Realisation
	Year Ending	Year Ending	Post
	June 2010	June 2011	June 2011	Total
	%	%	%	%
Projects in operational status (secured)	24	15	61	100
Projects inpreferred bidder status(awarded)	22	19	59	100
Total	24	15	61	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.

included in Project Management and Construction. The key fnancial results for PPP – Europe are detailed below.
	June 2009 June 20081
Proft/(loss) after tax (A$m)	6.2 (13.2)
Operating GPM (A$m)	14.7 16.4
Equity returns (A$m)2	33.8 20.3
New Work Secured3	2.6 2.4
Number of projects4	19 19
Backlog GPM3,5	75.5 73.8
Equity
– Invested ($Am)	163.3 147.9
– Committed($Am)	62.9 59.8

2 Including loan stock interest.
3 Relates to secured projects.
4 Number of projects includes projects where Lend Lease is preferred bidder and combines extensions of existing projects.

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

Key trading events in the year include:

Achieving financial close of Lancashire Schools Phases 2A and 3, which related to the remaining schools of the £1.0 billion Lancashire Building Schools for the Future (BSF) project;
An increase in the number of operational assets, with the practical completion and operational handover of the three schools (£81.0 million) in Phase 1 of the Lancashire BSF project;
During the year UK PPP was selected as preferred bidder to deliver the £1.2 billion BSF project for the City of Birmingham, Europe’s largest metropolitan council.

2009 Annual Consolidated Financial Report Lend Lease Corporation

Investment Management Overview of Business

The Investment Management business has A$9.9 billion (June 2008: A$9.3 billion) of funds under management (FUM).

This business also includes investments held indirectly in property assets with a market value of A$505.6 million (June 2008: A$603.8 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	Proft/(Loss) After Tax
June 2009	June 2008	June 2009	June 2008	June 2009	June	2008
A$m	A$m	A$m	A$m	A$m		A$m
Funds Management Asia Pacifc 48.9	55.4	18.1	15.7	13.3		11.2
Europe 4.6	52.4	(6.2)	41.7	(2.8)		41.9
Americas		(2.9)	1.1	(2.1)		1.0
Total 53.5	107.8	9.0	58.5	8.4		54.1
Investment Income2 Asia Pacifc 11.6	12.1	17.4	66.7	13.8		60.6
Europe 3.2	3.8	8.1	22.5	5.9		20.0
Americas 0.8	3.6	0.8	3.5	0.8		2.6
Total 15.6	19.5	26.3	92.7	20.5	83.2
Total Operating Asia Pacifc 60.5	67.5	35.5	82.4	27.1		71.8
Europe 7.8	56.2	1.9	64.2	3.1		61.9
Americas 0.8	3.6	(2.1)	4.6	(1.3)		3.6
Total operating 69.1	127.3	35.3	151.2	28.9	137.3

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. There are no gains or losses on the disposal or redemption of available for sale financial assets in the year ended 30 June 2009 (June 2008: EBITDA and profit after tax included a gain of A$67.0 million and A$59.4 million respectively).

Unrealised property investment losses in relation to the Group’s ownership interests in property investments held indirectly through investments in Lend Lease managed funds are excluded from operating profit but are included in the Group’s statutory loss after tax.

Key trading events in the year include:

Asia Pacific

Profit after tax from Funds Management increased by A$2.1 million to A$13.3 million due to strong performance from both the Australian and Singapore platforms in a challenging market environment and reduced overheads;
– Profit after tax from Investment Income decreased by A$46.8 million to A$13.8 million as the prior year included the sale of a proportion of the Group’s investment in APPF for a profit after tax of A$40.1 million and a profit contribution from Asia Pacific Investment Company Limited of A$6.1 million, on the sale of the fund’s last remaining asset;

Europe

Profit after tax from Funds Management decreased by A$44.7 million to a loss of A$2.8 million this year as the prior year included the receipt of a tax exempt dividend of A$47.9 million from the Group’s interest in the adviser company to the Global Fund in relation to incentive fees;
Profit after tax from Investment Income decreased by A$14.1 million to A$5.9 million due to the prior year including profit distributions on the Group’s investment in the Global Fund of A$9.2 million after tax and profit on the sale of a proportion of the Group’s investment in Cohen & Steers, SICAV of A$3.6 million after tax.

Americas

The loss after tax relates to the continued wind-up of the residual US Real Estate Investment business.

In Australia, APPF Retail and APPF Industrial were the top two performing funds in the Mercer Unlisted Property Funds Index based on the gross one year return in the 12-month period ended 30 June 2009.

MD&A continued

Investment Management continued Funds Under Management

Investment Management continued Funds Under Management
			Total	Total
	Asia Pacifc	Europe	June 2009	June 2008
	A$b	A$b	A$b	A$b
FUM at the beginning of the fnancial year	7.1	2.2	9.3	8.9
Foreign exchange movement1	0.2		0.2	(0.3)
Additions	2.1		2.1	0.7
Reductions	(0.2)		(0.2)	(0.1)
Net revaluations	(0.7)	(0.8)	(1.5)	0.1
FUM at the end of the fnancialyear2	8.5	1.4	9.9	9.3

1 Foreign exchange movement arising from translating opening FUM in local currency between June 2009 and June 2008.

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

FUM increased by A$0.6 billion to A$9.9 billion during the year. Asia Pacific FUM increased by A$1.4 billion primarily due to the acquisition of the LLP management rights, while Europe FUM decreased by A$0.8 billion due to net revaluation decreases in underlying asset values.

The movements in FUM in the year were:

Asia Pacific

Foreign exchange movements added A$0.2 billion due to the restatement of opening FUM relating to Singapore at June 2009 exchange rates;
The acquisition of the LLP management rights added A$1.5 billion in Australian and New Zealand based assets to FUM;
The LLCPF secured acquisition and capital expenditure growth of A$0.2 billion;
The APPF series of funds and ARIF completed capital expenditure of A$0.3 billion and A$0.1 billion respectively;
The APPF series of funds disposed of A$0.2 billion of property assets;
FUM declined by A$0.7 billion as a result of net revaluation decreases on underlying asset values due to underlying real estate conditions.

Europe

FUM declined by A$0.8 billion as a result of net revaluation decreases on underlying asset values due to economic conditions in the UK.

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)	Proft/(Loss)
	Revenue		Realised GPM		EBITDA		After Tax1
	June 2009	June 2008	June 2009	June 2008	June 2009	June 2008	June 2009	June	2008
	A$m	A$m	A$m	A$m	A$m	A$m	A$m		A$m
Asia Pacifc	3,012.2	2,752.5	222.6	193.9	136.5	97.2	94.7		69.0
Americas	6,027.2	6,011.5	213.4	206.1	52.6	70.0	35.2		59.7
Europe	3,382.6	3,662.8	208.9	184.9	62.5	34.5	39.0		21.3
Total operating	12,422.0	12,426.8	644.9	584.9	251.6	201.7	168.9	150.0

1 June 2008 operating profit after tax of A$150.0 million has been adjusted from an operating profit after tax of A$147.2 million to reflect the impact of adopting AASB Interpretation 12 Service Concession Arrangements for the first time this year.

Project Management and Construction profit after tax was A$168.9 million, an increase of A$18.9 million over the prior year. Profit after tax for the year was positively impacted by foreign exchange movements of A$8.7 million.

Total revenue remained broadly in line with the prior year, including positive foreign exchange movements of A$1.1 billion.

2009 Annual Consolidated Financial Report Lend Lease Corporation

Key trading events in the year include:

Asia Pacific

The Asia Pacific profit after tax of A$94.7 million increased by A$25.7 million compared with the prior year. Key contributions to GPM in Australia included the ANZ Head Office building in Melbourne, Sydney Water Desalination Pipeline, and Top Ryde shopping centre development in Sydney. In Asia, the telecommunications rollout in Japan, 313@somerset retail development and REC solar panel plant in Singapore were key contributors during the year.

Americas

Profit after tax for the Americas business of A$35.2 million is an A$24.5 million decrease on the prior year, including a positive foreign exchange movement of A$6.6 million. Profit after tax was negatively impacted by costs relating to the fire at the former Deutsche Bank project in New York. Key contributions to GPM included the 155 N. Wacker Drive office development in Chicago, the 353 N. Clark office building project in Chicago and the Lenbrook high rise senior living project in Atlanta.

Europe

The European profit after tax of A$39.0 million increased by A$17.7 million compared to the prior year. Performance improved although the business continues to be impacted by the workout of UK projects where loss provisions were taken in prior years. Key contributions to GPM included the Athletes’ Village project for the 2012 Olympic Games in London, Peel Media City mixed-use project in Gloucester, Central Saint Giles new office development in London and the BP Global Alliance project across Europe.

Profitability Ratio

The profitability ratio (defined as EBITDA divided by realised GPM) increased from 34% to 39%, principally due to the higher profit contribution in Europe where the ratio increased from 19% to 30% this year and in Asia Pacific where the ratio increased by 11% to 61% (June 2008: 50%). In the Americas the profitability ratio decreased by 9% to 25% (June 2008: 34%) primarily due to costs relating to the fire at the former Deutsche Bank project in New York.

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 2009	June 2008	June 20091	June 20081
	A$m	A$m	A$m	A$m
Asia Pacifc	264.1	350.5	323.5	282.0
Americas	60.0	182.8	138.5	236.7
Europe	167.8	182.2	228.1	269.6
Total	491.9	715.5	690.1	788.3

1 Although Backlog GPM is realised 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$101.1 million (June 2008: US$213.0 million) and the European Backlog GPM was £107.2 million (June 2008: £121.3 million).

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

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 2009 was impacted by a positive foreign exchange movement of A$54.8 million. The decrease in Backlog GPM and New Work Secured GPM in 2009 is primarily due to the downturn in economic conditions, particularly in the Americas and Europe. The increase in Asia Pacific includes significant government projects secured in Australia, namely, Gold Coast University Hospital, two NSW Schools Building Education Revolution projects, Brisbane Supreme Court, Sydney Water Capital Works program, and a new office build project for the Federal Government.

Backlog GPM Realisation

Backlog GPM Realisation
	Year Ending	Year Ending	Post
	June 2010	June 2011	June 2011	Total
	%	%	%	%
Asia Pacifc	49	30	21	100
Americas	74	19	7	100
Europe	61	26	13	100
Total	58	27	15	100

As at 30 June 2009, 58% of Bovis Lend Lease Backlog GPM is projected to be realised in the year to June 2010. The proportion of Bovis Lend Lease secured Backlog GPM to be realised beyond 12 months of 42% is consistent with the prior year (June 2008: 43%).

MD&A continued

Corporate

The key financial results for Corporate are summarised below.

	Revenue	Revenue		EBITDA	EBITDA	Proft/(Loss) After Tax	Proft/(Loss) After Tax
	June 2009	June	2008	June 2009	June 2008	June 2009	June 2008
	A$m		A$m	A$m	A$m	A$m	A$m
Group Services	23.4		7.6	(80.6)	(86.2)	(67.8)	(59.0)
Group Treasury	51.3		53.3	(17.2)	1.0	(41.4)	(14.8)
GroupAmortisation						(4.1)	(3.0)
Total operating	74.7		60.9	(97.8)	(85.2)	(113.3)	(76.8)

Group Services

Group Services costs after tax increased by A$8.8 million primarily due to costs in relation to Lend Lease Ventures, which is focused on the commercialisation of green energy opportunities and associated property related activities, and additional costs in the Group’s captive insurance vehicle.

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.

result for the year is detailed in the table below.
	Proft/(Loss) Before Tax		Proft/(Loss) After Tax
	June 2009	June 2008	June 2009	June 2008
	A$m	A$m	A$m	A$m
Interest revenue	51.3	53.3	38.5	37.9
Interest expense and borrowing costs	(96.6)	(78.2)	(67.1)	(53.4)
Net hedge(cost)/beneft	(17.2)	1.0	(12.8)	0.7
Total GroupTreasury	(62.5)	(23.9)	(41.4)	(14.8)

Interest Revenue and Expenses

Interest revenue remained relatively flat compared with the previous year. The interest rate on invested cash averaged 3.4% per annum for the year (June 2008: 6.1%);
Interest expense and borrowing costs before tax increased by A$18.4 million compared with the previous year. This is mainly due to the Group’s £350.0 million syndicated bank facility being fully drawn for part of the year.

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 2009, the Group was in a strong liquidity position with cash and cash equivalents of A$1,120.8 million and undrawn committed bank facilities of A$612.0 million. The Group’s net debt position as at 30 June 2009 was A$195.8 million, this includes other non current financial liabilities of A$191.6 million;
The average maturity of Lend Lease’s drawn debt at 30 June 2009 was eight years, with the earliest maturity date being November 2010;
- At 30 June 2009, the mix of borrowings, including other non current financial liabilities, was 76% at fixed rates and 24% 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 increased by A$126.3 million, primarily due to movements in UK, US and Singapore exchange rates;
The A$12.8 million after tax net hedge cost primarily relates to the hedging of a proportion of current year US dollar profits.

2009 Annual Consolidated Financial Report Lend Lease Corporation

Appendix 1 Results Detail

Appendix 1 Results Detail
	Revenue		EBITDA		Proft/(Loss) Before Tax1		Proft/(Loss)	After Tax2,3
	June 2009	June 2008	June 2009	June 2008	June 2009	June 2008	June 2009	June 2008
	A$m	A$m	A$m	A$m	A$m	A$m	A$m	A$m
Retail
Asia Pacifc	41.2	35.3	12.5	2.6	12.1	2.5	8.9	1.7
Europe	84.6	95.4	39.6	51.1	38.2	49.7	24.0	42.3
Americas			33.9	25.7	33.9	25.7	27.4	22.1
Total Retail	125.8	130.7	86.0	79.4	84.2	77.9	60.3	66.1
Communities
Asia Pacifc	463.0	579.0	90.4	104.2	100.8	110.5	99.9	82.7
Europe	123.4	390.1	(18.8)	25.5	(13.6)	31.8	(10.4)	21.1
Americas		0.4	(1.6)	(5.7)	(2.0)	(5.9)	(1.2)	(3.5)
Total Communities	586.4	969.5	70.0	124.0	85.2	136.4	88.3	100.3
Public Private Partnerships
Europe	128.9	106.5	(12.8)	(33.4)	4.7	(21.8)	6.2	(13.2)
Americas	1,378.1	856.2	79.5	79.4	83.0	81.8	68.2	72.2
Total Public Private Partnerships	1,507.0	962.7	66.7	46.0	87.7	60.0	74.4	59.0
Investment Management
Asia Pacifc	60.5	67.5	35.5	82.4	35.2	82.3	27.1	71.8
Europe	7.8	56.2	1.9	64.2	1.9	64.2	3.1	61.9
Americas	0.8	3.6	(2.1)	4.6	(2.1)	4.6	(1.3)	3.6
Total Investment Management	69.1	127.3	35.3	151.2	35.0	151.1	28.9	137.3
Project Management
and Construction
Asia Pacifc	3,012.2	2,752.5	136.5	97.2	133.9	95.0	94.7	69.0
Europe	3,382.6	3,662.8	62.5	34.5	57.0	30.5	39.0	21.3
Americas	6,027.2	6,011.5	52.6	70.0	47.2	65.9	35.2	59.7
Total Project Management
and Construction	12,422.0	12,426.8	251.6	201.7	238.1	191.4	168.9	150.0
Total operatingbusinesses	14,710.3	14,617.0	509.6	602.3	530.2	616.8	420.8	512.7
Corporate
Group Services	23.4	7.6	(80.6)	(86.2)	(82.5)	(88.9)	(67.8)	(59.0)
Group Treasury	51.3	53.3	(17.2)	1.0	(62.5)	(23.9)	(41.4)	(14.8)
GroupAmortisation					(4.1)	(3.0)	(4.1)	(3.0)
Total corporate	74.7	60.9	(97.8)	(85.2)	(149.1)	(115.8)	(113.3)	(76.8)
Total operating	14,785.0	14,677.9	411.8	517.1	381.1	501.0	307.5	435.9
Inventory carrying value
adjustments			(226.1)	(121.5)	(226.1)	(121.5)	(188.3)	(121.5)
Goodwill impairments			(252.9)		(252.9)		(252.9)
Other carrying value adjustments			(233.0)		(233.0)		(204.7)
Property investment revaluations4			(325.7)	(69.2)	(325.7)	(69.2)	(263.0)	(60.2)
Savings implementation costs			(120.8)		(120.8)		(83.9)
Net gain on Bovis UK pension
scheme curtailment			44.3		44.3		31.7
Total statutory	14,785.0	14,677.9	(702.4)	326.4	(733.1)	310.3	(653.6)	254.2

1 Profit/(loss) before tax is before adjusting for the amount attributable to minority interests.

2 June 2008 operating profit after tax has been adjusted to A$435.9 million (statutory profit has been adjusted to A$254.2 million) to reflect the impact of adopting AASB Interpretation 12 Service Concession Arrangements for the first time this year. The before and after tax effect of the adjustment for the year ended June 2008 is an A$11.2 million loss.

3 Profit/(loss) after tax is after adjusting for the loss attributable to minority interests of A$12.3 million (June 2008: A$6.4 million loss after tax).

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

MD&A Appendix 2 continued Operating Results Detail in Local Currency[1]

	Revenue	Revenue	EBITDA	EBITDA	Proft/(Loss) Before Tax2	Proft/(Loss) Before Tax2	Proft/(Loss) After Tax3	Proft/(Loss) After Tax3
	June 2009	June 2008	June 2009	June 2008	June 2009	June 2008	June 2009	June 2008
	A$m	A$m	A$m	A$m	A$m	A$m	A$m	A$m
Asia Pacifc
Retail	41.2	35.3	12.5	2.6	12.1	2.5	8.9	1.7
Communities	463.0	579.0	90.4	104.2	100.8	110.5	99.9	82.7
Investment Management	60.5	67.5	35.5	82.4	35.2	82.3	27.1	71.8
Project Management and
Construction	3,012.2	2,752.5	136.5	97.2	133.9	95.0	94.7	69.0
Group Services and Amortisation	23.4	7.6	(80.6)	(86.2)	(86.6)	(91.9)	(71.9)	(62.0)
GroupTreasury	45.7	38.5	(12.3)	5.0	32.9	43.1	24.8	31.0
Total Asia Pacifc	3,646.0	3,480.4	182.0	205.2	228.3	241.5	183.5	194.2

	Revenue	Revenue	EBITDA	EBITDA	Proft/(Loss) Before Tax2	Proft/(Loss) Before Tax2	Proft/(Loss) After Tax3	Proft/(Loss) After Tax3
	June 2009	June 2008	June 2009	June 2008	June 2009	June 2008	June 2009	June 2008
	£m	£m	£m	£m	£m	£m	£m	£m
Europe
Retail	39.8	42.9	18.6	23.0	18.0	22.4	11.3	19.0
Communities	58.0	175.5	(8.8)	11.5	(6.4)	14.3	(4.9)	9.5
Public Private Partnerships	60.6	47.9	(6.0)	(15.0)	2.2	(9.8)	2.9	(6.0)
Investment Management	3.7	25.3	0.9	28.9	0.9	28.9	1.5	27.9
Project Management and
Construction	1,589.8	1,648.3	29.4	15.5	26.8	13.7	18.3	9.6
GroupTreasury	2.0	4.8	(2.3)	(1.9)	(34.3)	(23.4)	(24.7)	(16.4)
Total Great British Pounds	1,753.9	1,944.7	31.8	62.0	7.2	46.1	4.4	43.6
Total Australian Dollars4	3,731.7	4,321.6	67.6	137.9	15.3	102.6	9.3	97.0

	Revenue	Revenue	EBITDA	EBITDA	Proft/(Loss) Before Tax2	Proft/(Loss) Before Tax2	Proft/(Loss) After Tax3	Proft/(Loss) After Tax3
	June 2009	June 2008	June 2009	June 2008	June 2009	June 2008	June 2009	June 2008
	US$m	US$m	US$m	US$m	US$m	US$m	US$m	US$m
Americas
Retail			24.7	23.1	24.7	23.1	20.0	19.9
Communities		0.4	(1.2)	(5.1)	(1.5)	(5.3)	(0.9)	(3.2)
Public Private Partnerships	1,006.0	770.6	58.0	71.5	60.6	73.6	49.8	65.0
Investment Management	0.6	3.2	(1.5)	4.1	(1.5)	4.1	(0.9)	3.2
Project Management and
Construction	4,399.9	5,410.4	38.4	63.0	34.5	59.3	25.7	53.7
GroupTreasury	0.8	3.7			(16.4)	(13.6)	(10.0)	(8.4)
Total US Dollars	5,407.3	6,188.3	118.4	156.6	100.4	141.2	83.7	130.2
Total Australian Dollars4	7,407.3	6,875.9	162.2	174.0	137.5	156.9	114.7	144.7

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

2 Profit/(loss) before tax is before adjusting for the amount attributable to minority interests.

3 Profit/(loss) after tax is after adjusting for the loss attributable to minority interests of A$12.3 million (June 2008: A$6.4 million loss after tax).

4 The foreign exchange rates applied are A$1 = £0.47 (June 2008: A$1 = £0.45) and A$1 = US$0.73 (June 2008: A$1 = US$0.90).

2009 Annual Consolidated Financial Report Lend Lease Corporation

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 2009 and should be read in conjunction with those financial statements.

Investments 58	Investments 58
Investments Reported in Retail 58 Investments Reported in Investment Management 59 Retail 59	Investments Reported in Retail 58
	Investments Reported in Investment Management 59
Overview 59 Assets Under Management 60 Development Pipeline 61 Communities 61	Overview 59
	Assets Under Management 60
	Development Pipeline 61
Overview 61 Communities–Asia Pacifc 62 Senior Living 63 Communities–Europe 64 Communities–Americas 65 Public Private Partnerships 65	Overview 61
	Communities–Asia Pacifc 62
	Senior Living 63
	Communities–Europe 64
	Communities–Americas 65
Overview 65 Public Private Partnerships–Americas 66 Public Private Partnerships–Europe 68 Investment Management 68	Overview 65
	Public Private Partnerships–Americas 66
	Public Private Partnerships–Europe 68
Funds Under Management 68 Project Management and Construction 70	Funds Under Management 68
	Major Projects 70
	Realised Gross Proft Margin Analysis by Sector 72

Portfolio Investments Report Investments Reported in Retail continued


	continued			Lend Lease	Lend Lease
				Share of	Share of	Market	Market
			Lend Lease	Income1	Income1	Value2	Value2	Indicative
			Interest	June 2009	June 2008	June 2009	June 2008	Fund
		Region	%	A$m	A$m	A$m	A$m	Liquidation
	Asia Pacifc
	Pakenham Place	Australia	25.0	0.8	0.8	10.8	14.4	n/a
Craigieburn PoMo (formerly Paradiz Centre) 313@somerset Other/allocated overhead		Australia Asia Asia	25.0 25.0 25.03	0.1	0.1 (0.3)	11.3 7.2 56.8	18.2 6.6 43.6	n/a n/a n/a
Total Asia Pacifc				0.9	0.6	86.1	82.8
Europe4 Bluewater5 Performance Retail Limited Partnership Warrington Retail Limited Partnership6 Chelmsford Meadows Unit Trust7 Preston Tithebarn Unit Trust Other/allocated overhead		UK UK UK UK UK	30.0 33.3 50.0 75.0 50.0	53.7 3.8 (1.4) 8.1 (5.5)	58.5 3.1 0.3 9.9 1.3 (3.7)	814.3 48.2 82.2 6.3	1,188.8 80.1 83.1 126.9 33.1	n/a 2017 2017 n/a 2019
	Total Europe			58.7	69.4	951.0	1,512.0
	Americas8
	Kingof Prussia	USA	50.0	33.9	25.7	427.0	421.7	n/a
	Total Americas			33.9	25.7	427.0	421.7
	Total Retail			93.5	95.7	1,464.1	2,016.5

1 Represents Lend Lease’s share of income 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 = £0.49 (June 2008: A$1 = £0.48) and the Lend Lease share of income at A$1 = £0.47 (June 2008: A$1 = £0.45).

5 The independent market value at 30 June 2009 of 100% of Bluewater was £1,330.0 million (A$2,714.3 million). Bluewater is treated as inventory in the financial statements and is therefore reflected at cost, which at 30 June 2009 was A$506.2 million.

6 The market value of the Warrington Retail Limited Partnership net assets were below zero at 30 June 2009 and as a result the Lend Lease’s investment has been written down to nil.

7 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$109.6 million.

8 The market value of USA assets has been translated at A$1 = US$0.81 (June 2008: A$1 = US$0.95) and the Lend Lease share of income at A$1 = US$0.73 (June 2008: A$1 = US$0.90).

2009 Annual Consolidated Financial Report Lend Lease Corporation

Investments Reported in Investment Management

				Lend Lease	Lend Lease
				Share of	Share of	Market	Market
			Lend Lease	Income1	Income1	Value2	Value2	Indicative
			Interest	June 2009	June 2008	June 2009	June 2008	Fund
		Region	%	A$m	A$m	A$m	A$m	Liquidation
	Asia Pacifc
	Australian Prime Property Funds	Australia	Various3	10.0	57.4	199.0	207.5	Open ended
Real Estate Partnership Funds Australia Lend Lease Core Plus Fund Australia Lend Lease Communities Fund 1 Australia Asia Pacifc Investment Company Limited Asia Asia Pacifc Investment Company No. 2 Limited Asia Lend Lease Asian Retail Investment Fund Asia Lend Lease International Distressed Debt Fund Asia			10.0 10.5 20.8 21.1 10.14 28.0	1.6 (0.5) 6.7 (0.4)	(0.4) 0.9 0.3 5.2 4.4 (1.1)	5.6 45.2 9.8 108.8 18.7	5.6 38.2 23.8 107.1 14.2 0.8	2011 Open ended 2012 2009 2012 Open ended 2010
	Total Asia Pacifc			17.4	66.7	387.1	397.2
	Europe5 Lend Lease Retail Partnership6 Lend Lease Overgate Partnership7 Lend Lease Global Properties, SICAF Cohen & Steers,SICAV	UK UK Europe Europe	3.95 30.7 24.8	2.7 4.9 0.5	3.0 5.6 9.5 4.4	43.5 62.7 2.8 9.2	62.7 114.0 15.5 13.5	2011 2011 2010 Open ended
	Total Europe			8.1	22.5	118.2	205.7
Americas8
	Other/allocated overhead	USA		0.8	3.5	0.3	0.9
Total Americas				0.8	3.5	0.3	0.9
	Total Investment Management			26.3	92.7	505.6	603.8
	Total investments			119.8	188.4	1,969.7	2,620.3

1 Represents Lend Lease’s share of income before tax from investments net of direct expenses and allocated overhead, excluding property investment revaluations. There are no gains or losses on the disposal or redemption of available for sale financial assets in the year ended 30 June 2009 (June 2008: A$53.9 million gain in Asia Pacific and A$13.1 million gain 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 proportion 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 = £0.49 (June 2008: A$1 = £0.48) and the Lend Lease share of income at A$1 = £0.47 (June 2008: A$1 = £0.45). 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 In January 2009, investors elected to wind down the Fund over a two year period.
8 The market value of USA assets has been translated at A$1 = US$0.81 (June 2008: A$1 = US$0.95) and the Lend Lease share of income at A$1 = US$0.73 (June 2008: A$1 = US$0.90).

Retail

Overview

	Retail Overview
		Australia		Singapore			UK	Total
		June 2009	June 2008	June 2009	June 2008	June 2009	June 2008	June 2009	June 2008
	Asset Management
	Number of centres	9	9	2	2	5	5	16	16
Assets under management (A$m) GLA1under management (square metres(sqm)/000s)		4,145.3 533.3	4,390.3 533.3	877.7 69.4	836.6 66.4	3,693.7 336.7	5,566.0 331.4	8,716.7 939.4	10,792.9 931.1
Development Pipeline
Number of centres		6	7	1	2	3	3	10	12
Current total GLA (sqm/000s) Gross estimated development		179.3 1,920	195.1 1,925	830	16.7 775	18.7 1,905	14.5 2,060	198.0 4,655	226.3 4,760
cost (A$m)
Estimated additional GLA		198.0	201.0	28.1	28.5	232.7	236.9	458.8	466.4
(sqm/000s)

1 GLA represents the gross lettable area of the centres.

Portfolio Retail continued Report Assets Under Management continued

Retail continued Assets Under Management Portfolio Report	Retail continued Assets Under Management Portfolio Report
ShoppingCentres Managed on Behalf of GLA1 sqm/000s Market Value2 June 2009 A$m Market Value2 June 2008 A$m continued
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 4,145.3 4,390.3
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 52.5 742.7 717.1
PoMo (formerly Paradiz Centre), Singapore3 Lend Lease Corporation/Other Joint Owners 16.9 135.0 119.5
Total Asia Pacifc 602.7 5,023.0 5,226.9

				Market	Market	Market	Market
				Value2	Value2	Value2	Value2
			GLA1	June 2009	June 2008	June 2009	June 2008
	ShoppingCentres	Managed on Behalf of	sqm/000s	£m	£m	A$m	A$m
	United Kingdom
	Bluewater, Kent	Lend Lease Retail Partnership/	153.9	1,330.0	1,902.0	2,714.3	3,962.5
		Lend Lease Corporation
Overgate, Dundee Touchwood, Solihull		Lend Lease Overgate Partnership Lend Lease Retail Partnership	39.0 60.4	101.5 200.0	178.0 280.0	207.1 408.2	370.8 583.3
Golden Square, Warrington		Warrington Retail Unit Trust	68.9	124.7	230.5	254.5	480.2
The Meadows,Chelmsford		Chelmsford Meadows Unit Trust	14.5	53.7	81.2	109.6	169.2
Total United Kingdom			336.7	1,809.9	2,671.7	3,693.7	5,566.0
Total assets under management			939.4	–	–	8,716.7	10,792.9

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$1,026.9 million (June 2008: S$1,079.2 million).

2009 Annual Consolidated Financial Report Lend Lease Corporation

Development Pipeline

									Estimated
							Estimated		Gross
			Ownership		Estimated	Current	Additional		Develop‑
			Interest	Project	Completion	GLA2	GLA2,3		ment Cost3
	ShoppingCentres	Managed on Behalf of	%	Status Date1		sqm/000s	sqm/000s		A$m
	Asia Pacifc
	Australia	Lend Lease Corporation/	Various4	Various	2010–2014	179.3	198.0		1,920
		Lend Lease Managed
		Funds/Other Joint Owners
	313@somerset	Lend Lease Asian Retail Investment Fund/ Lend Lease Corporation	Various5	Under construction	2010		28.1		830
Total Asia Pacifc						179.3	226.1		2,750
								Estimated	Estimated
							Estimated	Gross	Gross
			Ownership		Estimated	Current	Additional	Develop‑	Develop‑
			Interest	Project	Completion	GLA2	GLA2,3	ment Cost3	ment Cost3
	ShoppingCentres	Managed on Behalf of	%	Status Date1		sqm/000s	sqm/000s	£m	A$m
	United Kingdom
	Bluewater Events	Lend Lease Retail	31.0	Approved	2010	4.2	6.1	60	125
	Venue, Kent The Meadows, Chelmsford Tithebarn, Preston	Partnership Chelmsford Meadows Unit Trust Preston Tithebarn	75.0 50.0	Planning Planning	2015 2015	14.5	87.3 139.3	430 440	880 900
		Unit Trust
	Total United Kingdom					18.7	232.7	930	1,905
	Total development	pipeline				198.0	458.8	–	4,655

1 Estimated completion date represents the financial year in which the development is expected to be completed.

2 GLA represents the gross lettable area of the centres.

3 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.

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

5 Lend Lease owns 25% of the 313@somerset retail development directly, with the remaining 75% held by ARIF in which Lend Lease holds a 10.1% interest.

Communities

Overview

		Asia	Pacifc		UK	USA	USA	Total	Total
		June 2009	June 2008	June 2009	June 2008	June 2009	June 2008	June 2009	June 2008
	Number of projects1,2	39	47	27	27	1	2	67	76
Backlog3
	– Zoned (with planning approvals)4	26,790	27,090	13,115	13,520	3,855	3,760	43,760	44,370
	– Unzoned (awaiting planningapprovals)	58,005	58,240	275	950		13,365	58,280	72,555
Residential(units)		84,795	85,330	13,390	14,470	3,855	17,125	102,040	116,925
Commercial(sqm/000s)5		3,478.7	3,228.8	410.1	422.6	841.3	1,382.7	4,730.1	5,034.1

1 The number of projects in Asia Pacific excludes 61 retirement villages and 33 aged care facilities held by Lend Lease Primelife Limited (LLP).

2 The number of projects in the UK includes Stratford and Elephant and Castle. Elephant and Castle is still under negotiation so is not included in the backlog metrics above. Stratford is progressing on a fee based arrangement and therefore is excluded from the backlog metrics.

3 Backlog includes both Company-owned, joint venture and managed projects.

4 This excludes the backlog for LLP retirement villages and aged care facilities.

5 Represents net developable area of the project site.

Communities continued

Portfolio Report continued

Communities – Asia Pacific – Project Listing

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Estimated
Estimated Backlog Backlog Commercial
Completion Total Land Built‑Form Backlog
Project Location Ownership Interest Date [1] Units [2] Units [3] Units [3] sqm/000s
Zoned Projects
Woodlands [4] Qld Land management 2012 1,400 755 80
Forest Gardens Qld 50% JV/ 2011 1,570 160
Land management
Varsity Lakes Qld Land management 2011 1,825 95 90 26.4
Springfield Lakes Qld Land management 2020 10,000 6,970 715 122.1
Hyatt Coolum Qld 100% 2014 500 195 220
Twin Waters Residential Qld 100% 2010 1,765 5
Bingara Gorge NSW Land management 2022 1,165 1,125 97.9
St Marys – Other Precincts NSW 100% 2018 3,645 3,645 574.9
St Marys – Ropes Crossing [4] NSW Land management 2015 1,590 1,320 170
Nelsons Ridge NSW Land management 2015 920 275 350 2.6
Jacksons Landing NSW 50% JV 2011 1,370 300 15.7
Rouse Hill NSW 50% JV/ 2018 1,930 420 1,090 98.8
Land management
St Patricks NSW 50% JV/ 2010 140 65
Land management
Darling Walk NSW Development 2011 64.0
management
Forde ACT 25% JV/ 2010 1,030 435 160 2.3
Land management
Springbank Rise (formerly Casey 2) ACT 50% JV/ 2015 1,100 1,100
Land management
Edgewater Vic 100% 2012 1,145 5 90
Craigieburn Town Centre Vic 100% 2011 295 235
Lakeside at Pakenham [4] Vic Land management 2010 2,350 60
Pakenham Valley Vic Land management 2012 575 540 15 34.7
Caroline Springs Vic 50% JV/ 2012 7,480 755 170 12.7
Land management
Laurimar Vic 100% 2014 1,870 1,305 8.0
Victoria Harbour
– Dock 5 Vic 100% 2009 140 2.0
– The Merchant Vic 100% 2010 75 75 0.6
– Montage Vic 100% 2009 85 10
– ANZ Vic Development 2010 84.7
management
– Merchant Street Retail Vic 100% 2011 4.0
– Myer Vic Development 2010 29.1
management
– Uncommitted Other Vic Other Various 1,740 1,740 85.8
Blakes Crossing SA Staged acquisition 2015 1,390 1,215 100 55.7
Mawson Lakes SA 50% JV/ 2011 4,890 220 100 43.7
Land management
Total zoned 51,985 20,830 5,545 1,365.7
----- End of picture text -----

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, joint venture and managed 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.

2009 Annual Consolidated Financial Report Lend Lease Corporation

						Estimated
				Backlog	Backlog	Commercial
			Total	Land	Built‑Form	Backlog
Project	Location	OwnershipInterest	Units1	Units2	Units2	sqm/000s
Unzoned Projects
Yarrabilba	Qld	Staged acquisition	23,400	20,330	3,070	877.0
Rocky Springs RNA Showgrounds Calderwood Lockerbie Gawler	Qld Qld NSW Vic SA	Land management Land management Land management Staged acquisition 100%	13,000 1,855 4,000 13,000 2,750	12,450 4,000 7,860 2,750	550 1,855 5,140	548.0 140.0 5.0 490.0 53.0
Total unzoned			58,005	47,390	10,615	2,113.0
Total			109,990	68,220	16,160	3,478.7

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

2 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 – Project Listing

Senior Living – Project Listing
				Average Tenure of
		Dwellings Under	Dwellings to be	Current Deferred
		Management	Developed Backlog	Management Fees
Project	Location	Units/Beds	Units1	Years
Retirement by Design
Keperra Sanctuary2	Qld	319		6.4
The Terraces Nelson’s Grove Rochford Place Abervale2 Fiddlers Green2 Caesia Gardens TrinityGreen	Qld NSW NSW Vic Vic Vic SA	86 25 25 237 229 26 41	145 100 10 110 50	3.1 1.3 8.3 7.1 0.5 1.8
Total Retirement byDesign		988	415	–
Lend Lease Primelife3 Retirement Villages Aged Care	Various Various	11,212 2,313		Various Various
Total Senior Living		14,513	415	–

1 Backlog includes the total number of units in both Company-owned and managed 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.

3 During the year Lend Lease completed the acquisition of a 43.2% stake in LLP which owns a portfolio of senior living communities across Australia and New Zealand. As part of this transaction, Lend Lease sold seven retirement villages to LLP (Glenaeon, Lutanda Manor, Pittwater, Peppertree Hill, Burwood Terrace, Forest Hills and Highvale) and the Keperra Sanctuary hostel. Total backlog excludes the backlog for LLP retirement villages of 729 units and aged care facilities of 217 beds.

Communities continued

Portfolio Report continued

Communities – Europe – Project Listing

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Estimated
Estimated Backlog Backlog Commercial
Ownership Completion Total Land Built‑Form Backlog
Project Location Interest Date [1] Units [2] Units [3] Units [3] sqm/000s
Zoned Projects
B5 Southside Birmingham 100% Completed 470 5
Navigation Street Birmingham 100% Completed 350 5
Essex Street Birmingham 100% Completed 275 160 0.6
John Bright Street Birmingham 100% Completed 190 30 0.8
Honduras Wharf Birmingham 100% Completed 125 35
Honduras Wharf Phase II Birmingham 100% 2013 100 100
Alcester Road Birmingham 100% 2012 50 50 0.2
Bromsgrove Street Birmingham 100% 2013 45 45 0.2
Unities and Armouries Birmingham 100% 2014 160 160 0.3
St. James Cheltenham 100% Completed 140 10
Monkbridge Leeds 100% 2017 725 725
Clarence Dock Leeds 100% Completed 1,150 9.5
Green Quarter Manchester 100% 2014 1,380 545 0.9
Potato Wharf Phase I Manchester 100% 2013 215 215
Regiment Manchester 100% 2014 45 45 0.7
Woodfield Road Altrincham 100% 2012 40 40
Hungate York 33% 2017 730 670 8.0
Sheraton Park Durham 100% 2012 115 115
Appleton Village Cheshire 100% 2012 40 40
Sandy Lane Cheshire 100% 2012 35 35
Alexandra Road South Manchester 100% 2010 25 25
Goose Hill Morpeth 100% 2012 60 60 0.6
Greenwich Peninsula London 51% 2025 10,000 6,000 4,000 387.8
Other Crosby projects Various 50–100% Completed 135 0.5
Total zoned 16,600 6,000 7,115 410.1
Unzoned Projects
Gloucester Road Bath 100% 2012 70 70
Potato Wharf Phase II Manchester 100% 2014 205 205
Total unzoned 275 – 275 –
Total Communities – Europe [4] 16,875 6,000 7,390 410.1
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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. Elephant and Castle is still under negotiation so is not included in the backlog metrics above. Stratford is progressing on a fee based arrangement and therefore is excluded from the backlog metrics.

2009 Annual Consolidated Financial Report Lend Lease Corporation

Communities – Americas – Project Listing

							Estimated
			Estimated		Backlog	Backlog	Commercial
		Ownership	Completion	Total	Land	Built‑Form	Backlog
Project	Location	Interest	Date1	Units2	Units3	Units3	sqm/000s
Horizon Uptown	Denver	100%	2023	3,855	3,855		841.3
Total Communities – Americas				3,855	3,855	–	841.3

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

Public Private Partnerships

Overview

Public Private Partnerships – Americas

Public Private Partnerships – Americas
Number of		Estimated Capital Spend2	Committed Equity3		Units	Under
Projects1		US$b	US$m		Management
June 2009 June	2008	June 2009 June 2008	June 2009	June 2008	June 2009	June 2008
Operational (secured) 17 Preferred bidder(awarded) 2	17 2	5.0 5.1 0.5 0.8	109.8	109.8	38,500 5,550	38,450 6,300
Total 19	19	5.5 5.9	109.8	109.8	44,050	44,750

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	Facilities Management
	Number of			Invested Equity			Committed Equity2		Revenue Backlog3
	Projects1				£m			£m		£m
	June 2009	June	2008	June 2009	June	2008	June 2009	June 2008	June 2009	June 2008
Operational (secured)	18		18	80.0		71.0	30.8	28.7	410	366
Preferred bidder(awarded)	1		1
Total	19		19	80.0	71.0		30.8	28.7	410	366

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 for 10 years only, although Public Private Partnership (PPP) contracts typically operate for a period of up to 40 years.

Portfolio Report continued

Public Private Partnerships continued

Public Private Partnerships – Americas – Military Housing – Project Listing

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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 Phase 1 [3] Various Army Preferred bidder
PAL Group A Phase 2 [4] Various Army Preferred bidder
Wainwright/Greely [5] Alaska Army Preferred bidder
Total PPP – Americas
----- End of picture text -----

1 Over the initial development period of the project.

2 Committed equity represents future equity investments in the projects.

3 PAL Group A Phase 1 involves the renovation of existing hotels and is anticipated to take two years.

4 PAL Group A Phase 2 involves the construction of four new hotels and further renovations on existing hotels.

5 A small design/build scope of work was executed in May 2009, however financial close with the execution of the full design/build agreement is expected in September 2009.

2009 Annual Consolidated Financial Report Lend Lease Corporation

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Initial Actual/ Estimated Percentage of
Development Expected Project Capital Construction Invested Committed
Period Financial Term Spend [1] Completed Equity Equity [2] Units Under
Years Close Date Years US$m % US$m US$m Management
6 Oct–01 50 225 100 6.0 5,700
5 Feb–03 50 140 100 3.3 1,700
6 Dec–03 50 160 90 6.0 4,250
6 Feb–05 50 240 82 16.5 1,400
10 Apr–05 50 1,990 46 8.0 7,900
5 May–05 50 25 100 5.0 3,100
5 Oct–05 50 355 81 7.5 3,300
5 Nov–06 50 125 25 2.5 1,050
8 Feb–07 50 215 32 3.0 2,550
4 May–07 50 140 8 200
5 May–07 50 85 63 200
7 Jul–07 50 230 56 11.0 1,850
2 Jul–07 50 20 94 200
6 Aug–07 50 415 18 25.5 1,100
6 Sep–07 50 250 30 11.0 1,450
6 Nov–07 50 240 8 4.5 2,000
3 Jun–08 50 155 6 550
2 Aug–09 50 50 3,200
3 Aug–11 50 150 550
2 Sep–09 50 290 1 1,800
5,500 48.3 61.5 44,050
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Portfolio Public Private Partnerships continued Report Public Private Partnerships – Europe – Project Listing continued

		Actual/Expected	Actual/Expected
	Location	Status Financial Close Date
Healthcare
Calderdale Hospital	UK	Operational	Jul–98
Worcester Hospital Hexham Hospital – Phases 1 and 2 Burnley Hospital Roehampton Hospital Romford Hospital Leeds Hospital Hexham Hospital – Phase 3 Manchester Hospital Majadahonda Hospital Education Newcastle Schools Lincoln Schools Lilian Baylis School Lancashire Schools Phase 1 Lancashire Schools Phase 2 Lancashire Schools Phase 2A Lancashire Schools Phase 3 Cork Maritime College Birmingham BSF Accommodation Treasury 1 Treasury 2	UK UK UK UK UK UK UK UK Spain UK UK UK UK UK UK UK Ireland UK UK UK	Operational Operational Operational Operational Operational Operational Operational Under construction Operational Operational Operational Operational Operational Under construction Under construction Under construction Operational Preferred bidder Operational Operational	Mar–99 Apr–01 Oct–03 May–04 Jan–04 Oct–04 Jul–06 Dec–04 Apr–05 Mar–02 Sep–01 Feb–03 Dec–06 Dec–07 Jul–08 Jun–09 Feb–03 Aug–09 May–00 Jan–03
Sheffeld University	UK	Under construction	May–06
Waste
Lancashire Waste	UK	Under construction	Mar–07
Total PPP – Europe

1 Represent total construction value over the contract duration.
2 Facilities management revenue backlog disclosed is for 10 years only, although PPP 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)[1]

	Investment Management Funds Under Management (FUM)1
			FUM	FUM	FUM	FUM
			June 2009	June 2008	June 2009	June 2008
	Fund	Fund Type	£b	£b	A$b	A$b
	Asia Pacifc
Australian Prime Property Funds Lend Lease Core Plus Fund Lend Lease Communities Fund 1		Core Core Plus Value Add			4.6 0.5 0.2	5.0 0.4 0.2
Real Estate Partnership Funds		Enhanced			0.1	0.1
Asia Pacifc Investment Company No. 2 Limited		Core Plus			0.8	0.8
Lend Lease Asian Retail Investment Fund		Value Add			0.6	0.4
Managed Investment Mandates		Core/Value Add			0.2	0.2
Lend Lease Primelife		Core Plus			1.5
Total Asia Pacifc FUM					8.5	7.1
Europe
Lend Lease Retail Partnership		Core	0.5	0.8	1.1	1.6
Lend Lease Overgate Partnership		Core	0.1	0.2	0.2	0.4
Chelmsford Meadows Limited Partnership		Value Add	0.1	0.1	0.1	0.2
Total Europe FUM			0.7	1.1	1.4	2.2
Total FUM			–	–	9.9	9.3

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

2009 Annual Consolidated Financial Report Lend Lease Corporation

				Facilities
		Estimated	Percentage of	Management
Construction	Operational	Construction	Construction	Revenue	Invested	Committed
Period	Term	Value1	Complete	Backlog2	Equity	Equity3
Years	Years	£m	%	£m	£m	£m
3 3 2 3 2 3 3 2 5 3 2 2 2 2 2 2 2 2 3 2 2 4	33 33 32 30 30 36 33 27 38 30 27 31 27 25 25 25 25 27 25 37 35 40	87 82 29 27 57 213 175 24 393 184 50 20 13 81 34 59 69 30 68 114 148 169	100 100 100 100 100 100 100 100 93 100 100 100 100 100 88 52 16 100 100 100 94	41 54 13 13 14 7 36 3 31 2 17 10 7 23 8 10 11 10 37 37 26	6.7 1.1 0.6 1.0 1.7 7.0 9.9 1.3 11.3 3.0 1.8 1.2 0.8 3.1 1.8 2.2 1.6 1.9 5.0	1.6 2.6
4	25	252	57		17.0	26.6
		2,378		410	80.0	30.8

Portfolio Project Management and Construction Report Major Projects[1] continued

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Project Name Location Client Contract Type [2]
Asia Pacific
Gold Coast University Hospital Qld Queensland Health GMP
Royal Children’s Hospital Vic Children’s Hospital Partnership GMP
Building Education Revolution Hunter/ NSW NSW Department of Commerce MC
Central Coast and Northern Sydney Region
Renewable Energy Corporation Plant Singapore Fluor Daniel Engineers & Constructors Ltd CM
ANZ Melbourne Vic Lend Lease Corporation/ANZ GMP
Commonwealth New Build ACT Federal Government MC
Brisbane Supreme Court Qld Queensland Government GMP
Lonza Biologics Expansion Singapore Lonza Biologics Singapore – Plant 2 EPCM
Top Ryde NSW Beville Group GMP
Charlestown Square Redevelopment NSW The GPT Group GMP
Liverpool Hospital NSW NSW Government MC
Sydney Water Desalination Pipeline NSW Sydney Water ALI
Darling Walk NSW Lend Lease Development/ GMP
Sydney Harbour Foreshore Authority
Mulwala Ammunition Factory NSW Australian Department of Defence GMP
420 George Street NSW Fortius Funds Management Pty Limited GMP
313@somerset Singapore ARIF/Lend Lease Corporation GMP
Alcon Singapore Manufacturing Singapore Alcon Singapore Manufacturing Pte Ltd EPCM
Genentech E. Coli Plant Singapore Genentech, Inc. EPCM
Sydney International Airport NSW Sydney Airport Corporation Ltd MC
Myer Victoria Harbour Vic Lend Lease Corporation/Myer GMP
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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); managing contractor (MC); construction management (CM); engineering, procurement and construction management (EPCM); and Alliance (ALI).

Project Name	Location	Client	Contract Type2
Americas
National Sept. 11 Memorial/	New York	National Sept. 11 Memorial and Museum	CM
Foundation/Port Authority		at the World Trade Centre
McDonald’s (McCafe) Program Rockingham Memorial Hospital 353 N. Clark 150 Amsterdam Avenue North Shore – Long Island Jewish Women’s Bedtower 111 Lawrence Street One Museum Park West Shire HGT Project Atlas Franklin Square 360 Residences Solair Wilshire Aqualea Resort and Residences St. Joseph’s Hospital	Various Virginia Chicago New York New York New York Chicago Massachusetts Baltimore San Jose Los Angeles Florida Florida	McDonald’s Rockingham Memorial Hospital South Parcel Dev. LLC 150 Amsterdam Avenue Holdings LLC North Shore – Long Island Jewish Health System Clarett Group Enterprise Companies Shire Human Genetic Therapies MedStar MESA Development KOAR Wilshire Western LLC Crystal Beach Capital, LLC St. Joseph’s – Baptist Healthcare	CM GMP GMP GMP GMP GMP GMP GMP GMP GMP GMP GMP GMP
NJ Health Environmental Agricultural Lab Facility	New Jersey	NY Department of Environment	GMP

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 construction management (CM); and guaranteed maximum price (GMP).

2009 Annual Consolidated Financial Report Lend Lease Corporation

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

Construction
Value Completion
A$m Date Sector Description
1,400 2012 Healthcare Manage the design and construction of the new
Gold Coast Hospital
1,070 2014 Healthcare Redevelopment of hospital
675 2010 Education Design and construction of new facilities and refurbishments
across 380 schools
649 2010 Industrial Solar panel plant
600 2010 Commercial Head office, Victoria Harbour, Melbourne
527 2012 Government 50,000 sqm commercial office space
520 2011 Government Development of a new Supreme Court and District Court building
509 2010 Pharmaceutical Biologics facility
478 2010 Retail Redevelopment of shopping centre
349 2011 Retail Redevelopment of shopping centre
299 2011 Healthcare Phase 1 of hospital redevelopment
289 2010 Water Pipeline installation
286 2011 Commercial 1.5-hectare commercial office space development
276 2012 Government Redevelopment of propellant manufacturing facility
270 2010 Commercial/ Retail Redevelopment of retail space and new high rise office in Sydney
197 2010 Retail Retail development on Orchard Road
190 2011 Pharmaceutical Ophthalmic Pharmaceutical Plant
176 2010 Pharmaceutical Biologics facility
172 2010 Transportation Expansion and refurbishment of terminal
143 2010 Commercial Head office, Victoria Harbour, Melbourne
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Construction
Value	Completion
US$m	Date	Sector	Description
683 308 217 214 207 195 179 165 143 135 124 117 110 109	2011 2010 2010 2010 2010 2011 2010 2010 2010 2011 2010 2010 2010 2010	Other Other Healthcare Commercial Residential Healthcare Residential Residential Other Healthcare Residential Residential Mixed-use Healthcare	Memorial and museum at the WTC site Installation of approx. 4,000 McCafes across the US 238 bed hospital development 45-storey offce building 42-storey residential building with a three-storey community facility New 290,000 sq/ft women’s hospital 51-storey high rise residential building 53-storey luxury high rise residential building New disposable biologics manufacturing facility Redevelopment of existing hospital 24-storey residential building 16-storey residential building with two levels of retail and parking 250-hotel room/18-luxury condominium facility New full-service hospital with 108 beds
106	2010	Pharmaceutical	Agricultural lab facility

Portfolio Project Management and Construction continued Report Major Projects[1] continued continued

Project Name	Location	Client	Contract Type2,3
Europe
BP Retail	Pan-Europe	BP	PM
Peel Media City MOD SLAM – Phase 2 Manchester Joint Hospital South West Prime Contract One New Change BBC Broadcasting House Phase 2 Cadbury Chocolate Factory Regents Place Main Building Central Saint Giles University of Sheffeld PFI Student Accommodation Greenwich N0204	Manchester UK Manchester South West England London London Poland London London Sheffeld London	Peel Defence Estates Catalyst Healthcare Defence Estates Land Securities Land Securities Cadbury Polska British Land Stanhope Catalyst Higher Education GPRL/Lend Lease JV	MC GMP LS/FP GMP CM LS/FP MC CM CM LS/FP LS/FP

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 project management (PM); managing contractor (MC); guaranteed maximum price (GMP); lump sum/fixed price (LS/FP); and construction management (CM).

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

Realised Gross Profit Margin Analysis by Sector[1]

	Realised Gross Proft Margin Analysis by Sector	1
		June 2009	June 2009	June 2009	June 2009	June 2008
		Asia Pacifc	Americas	Europe	Total	Total
		GPM	GPM	GPM	GPM	GPM
		%	%	%	%	%
	Commercial/Offce	36	14	28	28	24
Communications Education		5 2	11	5 5	4 6	3 8
Government/Civic		4	3	9	6	8
Healthcare		6	14	4	7	5
Industrial/Technology		17	1	9	10	8
Mixed-use			9	8	4	2
Pharmaceutical/R&D		5	5	3	4	4
Residential/Senior Living		6	28	6	12	16
Retail		12	8	15	12	13
Transportation		7	4	4	5	4
Other			3	4	2	5
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 2009.

2009 Annual Consolidated Financial Report Lend Lease Corporation

Construction
Value	Completion
£m	Date	Sector	Description
800	2014	Retail	Renewal of the framework agreement to maintain BP service
			stations across Europe
450 428 399 294 261 258 216 190 172 169 112	2011 2013 2011 2011 2011 2011 2010 2010 2010 2010 2010	Commercial Government Healthcare Government Commercial Communications Industrial Commercial Commercial Education Commercial	Mixed-use development consisting of commercial offces, studios, residential and retail buildings New and upgraded single living accommodation for the military New hospital and refurbishment of existing hospital site Provision of estate management services and project management of capital construction program New retail and commercial construction Demolition and reconstruction of BBC headquarters New chocolate production plant New offce and residential development Demolition of existing building and new offce construction Refurbishment and new student accommodation Construction of two commercial offce buildings with retail facilities

Directors’ Report 30 June 2009

1.	Governance 75
2.	a. Board/Directors 75
	b. Company Secretary’s Qualifcations and Experience 77
	c. Offcers Who Were Previously Partners of the Audit Firm 77
	d. Directors’Meetings 77
	e. Interest in Capital 78
	Operations 78
3.	a. Principal Activities 78
	b. Review and Results of Operations 78
	c. Dividends 78
	d. Signifcant Changes in State of Affairs 78
	e. Events Subsequent to Balance Date 78
	f. Likely Developments 78
	g. Environmental Regulation 78
	Remuneration Report 79
4.	a. Remuneration Governance 80
	b. Remuneration Policy–Audited 82
	c. Remuneration Details–Audited 88
	d. Long Term Incentives and Retentions–Audited 91
	e. Service Agreements–Audited 96
	f. Additional Information–Audited 102
	Other 102
a. Share Options 102 b. Indemnifcation and Insurance of Directors and Offcers 102 c. Non Audit Services 102 d. Rounding Off 103 Lead Auditor’s Independence Declaration under Section 307C of the_Corporations Act 2001_ 104	a. Share Options 102
	b. Indemnifcation and Insurance of Directors and Offcers 102
	c. Non Audit Services 102
	d. Rounding Off 103

2009 Annual Consolidated Financial Report Lend Lease Corporation

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David Crawford AO, Chairman

Stephen McCann, CEO

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 2009 and the Auditor’s Report thereon.

1. Governance

a. Board/Directors

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

D A Crawford AO, Chairman (Non Executive)

Age 65

Mr Crawford joined the Board in July 2001 and was appointed Chairman in May 2003. Mr Crawford was appointed an Officer of the Order of Australia (AO) in June 2009 in recognition for service to business as a Director of public companies, to sport, particularly through the review and restructure of national sporting bodies, and to the community through contributions to arts and educational organisations.

Experience and Qualifications

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

Other Directorships and Positions

Mr Crawford is Non Executive Chairman of Foster’s Group Limited (appointed Director August 2001 and Chairman 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 December 2007) and National Foods Limited (appointed November 2001, resigned June 2005).

S B McCann, Managing Director

(Executive)

Age 44

Mr McCann was appointed Chief Executive Officer in December 2008 and became Managing Director in March 2009.

Experience and Qualifications

Prior to this role, Mr McCann was Group Finance Director (appointed in March 2007) and Chief Executive Officer for Lend Lease’s Investment Management business (September 2005 to December 2007).

Mr McCann has more than 15 years experience in investment banking, property funds management and capital markets transactions. Prior to joining Lend Lease, Mr McCann was at ABN AMRO, where his roles included Head of Property, Head of Industrial Mergers & Acquisitions and Head of Equity Capital Markets for Australia and New Zealand.

==> picture [195 x 96] intentionally omitted <==

Phillip Colebatch

Gordon Edington CBE

Mr McCann also practised as a mergers and acquisitions lawyer at Freehills, Melbourne for four years and worked in a Chartered Accounting firm in taxation for four years.

Mr McCann holds a Bachelor of Economics (Finance major) and a Bachelor of Laws from Monash University in Melbourne, Australia.

Other Directorships and Positions

Nil.

P M Colebatch

(Non Executive)

Age 64

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

Experience and Qualifications

Mr Colebatch has a Bachelor of Science and Bachelor of Engineering from the University of Adelaide, a Master of Science from Massachusetts Institute of Technology and a Doctorate in Business Administration from Harvard University. He has held senior management positions in insurance and investment banking, and was formerly on the Executive Board of Swiss Reinsurance Company, Zurich. He was previously on the Executive Board of Credit Suisse Group, Zurich, where he was Chief Financial Officer, and was 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 Mann Group plc (appointed September 2007).

G G Edington CBE (Non Executive)

Age 63

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, Action for Children, and was awarded a CBE for ‘services to children’.

Other Directorships and Positions

Nil.

Directors’ Report continued

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Peter Goldmark

Julie Hill

1. Governance continued

a. Board/Directors continued

P C Goldmark

(Non Executive)

Age 68

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 US-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 the President and Chief Executive Officer of the Rockefeller Foundation in New York for 10 years. Mr Goldmark 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.

Other Directorships and Positions

Nil.

J A Hill

(Non Executive)

Age 63

Ms Hill joined the Board in May 2006. She is Chairperson 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 Chairperson, President and Chief Executive Officer of Costain Homes, Inc. (US) and Vice President and General Manager, Mobil Land (Georgia) Corporation. She has a Bachelor of Arts from the University of California at Los Angeles and a Master of Arts 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). Ms Hill also sits on the Board of Directors of the Lord Abbett family of mutual funds, which is the trustee of 31 mutual funds of publicly held companies.

David Ryan AO Mark Selway

D J Ryan AO

(Non Executive)

Age 57

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

Experience and Qualifications

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

Other Directorships and Positions

M W Selway DUniv

(Non Executive)

Age 50

Mr Selway joined the Board in June 2008. In July 2009, he became a member of the Sustainability Committee and the Personnel and Organisation Committee.

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. Having spent much of his career managing engineering businesses in the United States, the United Kingdom and Australia, Mr Selway is regarded as a specialist in operational management and efficiency. He holds a Diploma in Industrial Engineering and was awarded an honorary degree of a Doctor of the University of the West of Scotland in July 2009. Mr Selway was given this award in recognition of his outstanding contribution to industry in Scotland and to honour his distinguished career.

Other Directorships and Positions

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

2009 Annual Consolidated Financial Report Lend Lease Corporation

b. Company Secretary’s Qualifications and Experience

W Hara

Mr Hara was appointed Company Secretary in July 2007. Prior to his appointment as Group General Counsel and Company Secretary of Lend Lease in January 2007, Mr Hara was Company Secretary for another company listed on the ASX.

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.

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 to assure that there is an appropriate mix of expertise, skills and experience on the Board.

During the financial year 1 July 2008 to 30 June 2009, 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 establishing appropriate policies for people management and remuneration across the Group. During the financial year 1 July 2008 to 30 June 2009, six 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. The principal purpose of the Committee is to assist the Board in fulfilling its corporate governance and oversight responsibilities in relation to the risk management and internal control systems, accounting policies and practices, internal and external audit functions and financial reporting of the Group. During the financial year 1 July 2008 to 30 June 2009, five meetings of the Risk Management and Audit Committee were held.

Sustainability Committee

The Sustainability Committee consists entirely 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 2008 to 30 June 2009, three meetings of the Sustainability Committee were held.

Attendance at Meetings of Directors 1 July 2008 to 30 June 2009

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
G Clarke P Colebatch D Crawford G Edington P Goldmark J Hill S McCann D Ryan M Selway R Taylor	8 8 4 4 12 11 5 5 6 6 4 4 12 12 4 4 12 12 5 5 3 3 12 12 3 3 12 12 6 6 3 3 4 4 12 12 5 5 6 6 4 4 12 11 3 2 1 1

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

Directors’ Report continued

1. Governance continued

e. Interest in Capital

The interest of each of the Directors (in office at the date of this report) in the issued shares of the Company at 20 August 2009 and 21 August 2008, is set out below.

		Shares Held			Shares Held
	Shares Held	Benefcially/		Shares Held	Benefcially/
	Directly	Indirectly	Total	Directly	Indirectly	Total
Director	2009	20091	2009	2008	20081	2008
D Crawford		48,128	48,128		33,895	33,895
P Colebatch	2,000	8,891	10,891	2,000	3,767	5,767
G Edington	15,000	16,323	31,323	15,000	11,484	26,484
P Goldmark	3,000	17,703	20,703	3,000	12,579	15,579
J Hill	2,000	8,233	10,233	2,000	3,109	5,109
D Ryan		21,242	21,242		15,834	15,834
M Selway	4,343	2,145	6,488	4,000		4,000
S McCann	73,301		73,301	n/a	n/a	n/a

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. This business also includes the Group’s ownership in direct property investments, including those held via limited partnerships;
The Communities business is involved in the development of large scale master-planned urban communities, inner city apartments and senior living;
The Public Private Partnerships (PPP) business manages and invests equity in large PPP projects;
Investment Management provides real estate investment management services. Investment Management includes the Group’s ownership interests in property investments held indirectly through investments in Lend Lease managed funds; and
Project Management and Construction provides construction, project management and design services through Bovis Lend Lease (Bovis).

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 2008 final dividend of A$136.4 million (34 cents per share, 45% franked) referred to in the Directors’ Report dated 21 August 2008 was paid on 26 September 2008.

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

are as follows:
Interim dividend of 25 cents per share (60% franked) paid on 1 April 2009 Final dividend of 16 cents per share	A$m 113.5
(100% franked) declared by Directors
to bepaid on 25 September 2009	73.2
	186.7

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

e. Events Subsequent to Balance Date

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

Acquisition of Properties from Prime Retirement and Aged Care Property Trust (Prime Trust)

On 13 August 2009, Lend Lease entered into agreements to purchase nine Aged Care facilities and four Retirement Villages from Prime Trust for a total consideration of A$76.7 million (excluding transaction costs). Settlement of four of the properties is subject to satisfaction of a number of conditions.

The Aged Care facilities and Retirement Villages will continue to be leased and managed by Lend Lease Primelife Limited following the change in ownership.

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, in particular relating to real estate development, project and construction management and asset management. Traditionally these regulations have related to environmental compliance aspects including noise and dust control, solid waste management and discharge into waterways. More recently, however, the Group is impacted by energy efficiency and greenhouse gas emissions legislation which require disclosure and performance reporting of activities under its operational and/or financial control.

2009 Annual Consolidated Financial Report Lend Lease Corporation

To respond to environmental regulatory risks, the Group requires each of its businesses to operate an integrated Environment, Health and Safety Management System. This framework ensures environmental risks associated with the Group’s operations or activities are managed via legal registers, risk assessment protocols, environmental management plans, trained environmental managers, routine inspections and audits. The Sustainability Committee receives environmental compliance reports on a quarterly basis regarding any significant environmental incidents 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 2009 Sustainability Report.

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 2009. 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:

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 2009. 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:	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 2009. 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:	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 2009. 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 Page Reference
a. Remuneration Governance	Remuneration governance is designed to ensure shareholders receive value for remuneration expenditure and assure remuneration is reasonable and acceptable.	80–82
1. Role of the Board and Personnel and Organisation Committee	The Board is responsible for remuneration decisions at Lend Lease. The Personnel and Organisation Committee assists the Board in fulflling its corporate governance and oversight responsibilities in relation to people management and compensationpolicies for the Group.	80
2. Key Management Personnel and Other Executives	Key Management Personnel, which includes the Directors of the Company and the Executive Offce, have authority and responsibility for planning, directing and controlling the activities of the Company and the consolidated entity. Other Executives represent employees in the category of the fve highest paid Group or Company Executives that are not KeyManagement Personnel.	80–81
3. Key remuneration changes for 2009	Policy changes in respect of Director and Executive remuneration in the current period to ensure continued alignment between the Company’s long term strategic objectives and remuneration for Key Management Personnel and other executives.	81–82
b. Remuneration Policy – Audited	The Remuneration Policy of the Group is determined by the Board on the recommendation of the Personnel and Organisation Committee, which is solely comprised of Non Executive Directors.	82–87
1. Remuneration Philosophy – Non Executive Directors	The Committee regularly reviews and sets remuneration levels of Non Executive Directors in order to ensure the Group has access to appropriately qualifed and skilled independent directors.	82–83
2. Remuneration Philosophy – Executives	The purpose of Executive remuneration at Lend Lease is to retain, align and motivate key Executives who have a direct impact on Company performance.	83
3. Remuneration Structure	The Board is focused on ensuring the Executive remuneration structure is commensurate with the needs of the organisation and its strategy, as well as appropriate when assessed against external comparator companies and the interests of shareholders.	83–87
i Fixed Remuneration	Fixed remuneration is benchmarked by the Personnel and Organisation Committee based on remuneration information sourced from independent external remuneration advisers.	83
ii Short Term Incentives (STI)	The STI plan is an annual bonus plan which complements the overall Remuneration Policy of the Group by rewarding individual Executives on meeting or exceeding pre-set key fnancial and non-fnancial performance criteria which contribute to overall shareholder value.	83–84
iii Long Term Incentives (LTI)	The objectives of the LTI are to 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 shareprice.	84–86

Directors’ Report continued

3. Remuneration Report continued

3. Remuneration Report continued	3. Remuneration Report continued	3. Remuneration Report continued
Topic Executive Summary Page Reference
b. Remuneration Policy – Audited continued 3. Remuneration Structure continued iv 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.	87
v Retirement Plans	Superannuation, pension and retirement arrangements for Executives.	87
vi Relationship of Remuneration to Company Performance	In considering the Group’s performance and benefts for shareholder wealth, the Personnel and Organisation Committee, when setting the criteria for STI and LTI awards, has regard to the fnancialperformance of the Group.	87
c. Remuneration Details – Audited	Provides details of the total remuneration for Directors and specifc Executives.	88–91
d. Long Term Incentives and Retentions – Audited	Provides details of the LTI and retention awards granted to each executive.	91–95
e. Service Agreements	Provides details of new, modifed and existing Executive service agreements, including key terms and termination provisions.	96–101

a. Remuneration Governance

Lend Lease’s governance of remuneration is designed to ensure shareholders receive value for remuneration expenditure and assure remuneration is reasonable and acceptable.

Role of the Board and Personnel and Organisation Committee

The Board is responsible for remuneration decisions at Lend Lease. The Personnel and Organisation Committee (‘Committee’) assists the Board in fulfilling its corporate governance and oversight responsibilities in relation to people management and compensation policies for the Group.

The principal purpose of the Committee is to assist the Board in:

Fostering exceptional human talent and motivating and supporting employees to pursue the growth and success of the Group in alignment with the Company’s values;
Assuring human capital considerations are central to and integrated into the Company’s strategy and business plans;

The Committee consists exclusively of Non Executive Directors. The Committee has unrestricted access to senior management of the Group and company records as required. The Committee is authorised to obtain independent legal or other professional advice it considers necessary to execute its functions.

The Committee Charter is available on the Lend ease website at: http://www.lendlease.com/llweb/llc/main.nsf/all/ all_corpgov

Key Management Personnel and Other Executives

The primary focus of this report is the remuneration arrangements for Key Management Personnel and Other Executives of the Group.

In this Report, the term ‘Executive’ is used to refer collectively to the Executive Directors, Executives and Other Executives as noted on page 81. The term ‘Executive Management Team’ (EMT) refers to the Managing Director/Chief Executive Officer and direct reports to the Managing Director/ Chief Executive Officer.

Enabling 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.

2009 Annual Consolidated Financial Report Lend Lease Corporation

Key Management Personnel

The Key Management Personnel of Lend Lease include the Directors of the Company and the ‘Executive Office’, consisting of the Executive Director and the Acting Chief Financial Officer.

KeyManagement Personnel and	Other Executives
Non Executive Directors
D Crawford	Chairman, appointed 19 July 2001
P Colebatch	Appointed 1 December 2005
G Edington	Appointed 1 December 1999
P Goldmark	Appointed 1 December 1999
J Hill	Appointed 8 May 2006
D Ryan	Appointed 10 December 2004
M Selway	Appointed 17 June 2008
Executive Directors
S McCann	Appointed Managing Director 4 March 2009
	Appointed Chief Executive Offcer 16 December 2008
	Group Finance Director until 15 December 2008
Former
G Clarke	Appointed 9 December 2002, resigned 27 February 2009
R Taylor	Appointed 10 December 2004, resigned as a Director 9 October 2008
	and employment ceased 10 April 2009
Company Secretaries
W Hara	Appointed 3 July 2007
Former
S Sharpe	Appointed 12 February1997,resigned 31 August 2008
Executives
B Soller	Appointed ActingChief Financial Offcer 16 December 2008
Other Executives
‘Other Executives’ represents employees in the category of fve highest paid Group or Company executives
that are not Key Management Personnel.
M Bellaman	Chief Executive Offcer Bovis Lend Lease Americas
M Coleman	Global Chief Executive Offcer Bovis Lend Lease
W Hara	Group General Counsel and Company Secretary
R Leaver	Chief Executive Offcer Asia Pacifc and Global Head of Investment Management
T Lombardo	Global Head of Strategy and Mergers and Acquisitions
N Martin	Group Head of Health and Safety, Risk and Insurance
M Menhinnitt	Global Head of Public Private Partnerships and Project Management
	and Construction
E Ooi	Chief Executive Offcer Investment Management Asia
D Spencer	GroupHead of Human Resources,employment ceased January2009

Key Remuneration Changes for 2009

Policy decisions and key changes with respect to Non Executive Director and Executive remuneration have been made in the current period.

In addition to the changes discussed in this section, the Committee recognises changes to Non Executive Director and Executive remuneration arrangements may be necessary in the coming year and beyond. In particular, the announcements of the Australian Government on 1 July 2009 relating to the taxation of equity remuneration and the Productivity Commission inquiry into the regulatory framework around Executive remuneration will most likely lead to remuneration arrangement refinements for Directors, Executives and employees at Lend Lease.

Key Changes in Respect to Non Executive Directors’ Remuneration

The maximum aggregate fees which may be paid to Directors in any year pursuant to Rule 6.3(a) of the Constitution was increased from A$1,700,000 (resolved at 2005 Annual General Meeting) to

A$2,500,000 by resolution at the 2008 Annual General Meeting. The actual fees paid to Directors (as distinct from the aggregate limit for all fees approved by shareholders) were increased effective 1 January 2009, the first change to actual fees paid to directors since 1 July 2006. Further detail on actual fees paid to Directors is contained on page 82 of this Report.

Key Changes in Respect of Executive and Employee Remuneration Fixed remuneration

In light of economic conditions and Company performance, the Group has implemented a Group-wide freeze on fixed remuneration increases for incumbents in the same role.

Incentive remuneration

Changes have been made to the Group’s remuneration structure in the current period to ensure continuing alignment between the Group’s long term strategic objectives and the remuneration of Executives. The details of incentive remuneration changes are discussed in the relevant sections.

Directors’ Report continued

3. Remuneration Report continued

a. Remuneration Governance continued

Key Changes in Respect of Executive and Employee Remuneration continued Significant changes include:

– STI arrangements have been changed as indicated to shareholders in the 2008 Remuneration Report. The key change is the reweighting of the financial and non-financial elements for STI. For Executive Office and functional head Executives, financial and non-financial components will account for 40% and 60% respectively of STI outcomes. For business unit Chief Executive Officers, financial and non-financial components will account for 60% and 40% respectively of STI outcomes. In order to participate in the STI program, Executives must be assessed as having satisfactory overall performance with respect to Safety, Sustainability, Values, Control and Diversity performance gates.

Reflecting Group performance, the available pool of STI funds has been reduced for performance during the current financial year. As a consequence of the deterioration in market conditions, additional metrics relating to overhead efficiency, capital management and counterparty risk management were introduced for all EMT members and selected executives for the second half of the current financial year to continue to motivate and incentivise Executives.

The 2008 LTI award differs from previous LTI awards. The 2008 award changed the vesting

conditions by introducing a retention component (one third of award value) and amending the existing earnings per share component (now one third of award value). The existing Total Shareholder Return component and vesting schedule (now one third of award value) has been retained.

b. Remuneration Policy – Audited

This section of the Report sets out the approach to remuneration for both Non Executive Directors and Executives of the Group.

Remuneration Philosophy — Non Executive Directors

Non Executive Director remuneration arrangements are separate and distinct from Executive structures. This reflects Lend Lease’s commitment to corporate governance best practice.

The Committee reviews and sets remuneration levels of Non Executive Directors in order to be assured that the Group has access to appropriately qualified and skilled directors. The Committee has reviewed the shareholder-approved aggregate fee limit and the level of Board and committee fees. No change to the aggregate fee limit is proposed for the upcoming financial year.

In order to maintain Non Executive Directors’ independence and impartiality, the remuneration of Non Executive Directors does not contain any component related to short term Company performance nor a variable quantum. Directors are impacted by Company performance with respect to personal shareholdings and reward elements (such as retirement benefits) delivered as Lend Lease Corporation shares.

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$160,000 for Board members (30 June 2008: A$140,000).
A$600,000 for the Chair of the Board (30 June 2008: A$500,000). This increases to A$640,000 per annum from 1 July 2009.

Current Committee fees per annum effective from

1 January 2009, are:
A$36,000 for members of the Risk Management and Audit Committee.
A$20,000 for members of the Personnel and Organisation, and Sustainability Committees (30 June 2008: A$15,000).
A$44,000 for Chairman of the Risk Management and Audit Committee (30 June 2008: A$35,000).
A$36,000 for Chairman of each of the Nomination, Personnel and Organisation and Sustainability Committees (30 June 2008: A$25,000).

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$2,800 each way for travel between four and 10 hours; and
A$6,000 each way for travel over 10 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 these 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.

In 2001, the Australian Securities Exchange (ASX) granted a waiver allowing issues of shares under the plan conditional on no amendment of the plan without shareholder approval, an undertaking for disclosure in the Annual Report of the names of Directors and their ability to participate, together with an explanation of the dilutory effects of any share issues, and disclosure in the Annual Report of the waiver terms.

Allocations are made on 1 January each year based on the weighted average price of Lend Lease Corporation shares traded on the ASX during the five business days prior to 1 January each year. Annual issues of shares under the plan are capped at 0.01% of the Company’s issued capital under the terms of the approving shareholder resolution. Earlier this year, shares totalling an additional 0.0004% of the then issued capital were inadvertently issued under the plan but this has been rectified. From inception in 2001, shares issued under the plan have totalled only 0.04% of current issued share capital, and the dilutory effect of the plan for shareholders has not been significant.

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$138,520 (30 June 2008: A$120,250).
P Goldmark A$144,722 (30 June 2008: A$128,032).

2009 Annual Consolidated Financial Report Lend Lease Corporation

The Australian Government announced proposed changes to the taxation of equity plans in the May 2009 Commonwealth Budget and made subsequent amendments on 1 July 2009. As a result, the Company is currently reviewing the structure of its equity plans to ensure these arrangements:

Meet the commercial objectives of the Company;
Do not have adverse tax implications; and
Are aligned with the interests of Lend Lease shareholders.

The Government’s proposed changes may impact the Directors’ Retirement Benefit Plan as well as equity plans for Executives and employees.

Remuneration Philosophy — Executives

The purpose of Executive remuneration at Lend Lease is to retain, align and motivate key Executives who have direct impact on Company performance. The philosophy of the Group’s remuneration policy is to reward 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 relevant external comparators in the real estate and related sectors and of companies of similar size, complexity and international scope.

The approach of the Group is to provide a balance of fixed and performance based remuneration. 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, retirement contributions 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.

Each year the Personnel and Organisation Committee sets the key performance indicators (KPI) for Executives. The KPI generally include measures relating to the Group, the business unit, geography or function, and the individual. These 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.

Remuneration Structure

The Group’s Executive remuneration framework consists of three principal elements:

Component	Comprises	‘At risk’?
Fixed Remuneration	Base salary, retirement and other benefts	No
Short Term Incentive	Annual cash with equity related deferral	Yes
LongTerm Incentive	Cash or share based multiyear reward	Yes

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

Fixed Remuneration

The salaries of the Executive Office and members of the EMT 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 direct reports to the Chief Executive Officer, the Committee is assisted in this review by the Chief Executive Officer. For the forthcoming year no salary increases have been proposed for the Executive Office or EMT members in the same roles as previously. This is the second consecutive year in which salary has remained unchanged for individuals in the same roles.

The other elements of fixed remuneration include those typically or legally required to be provided in the geography where the executive is employed. These may include car, medical cover, employee share plan subscriptions, retirement 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 may 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 2009 Financial Year

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

Financial Element	Strategic,Business Unit,Functional and Cultural Element
– 40% of target opportunity for Executive Offce, Chief Executive Offcer of Lend Lease Ventures	– 60% of target opportunity for Executive Offce, Chief Executive Offcer of Lend Lease Ventures
and functional heads.	and functional heads.
– 60% of target opportunity for business unit Chief Executive Offcers.	– 40% of target opportunity for business unit Chief Executive Offcers.

Measured against financial value drivers under the – Measured against strategic, business unit, themes of profitability, growth and capital efficiency functional and cultural goals in a mix relevant to at Group or business unit level, or a combination the individual. depending on role.
Upside opportunity for out performance on financial measures.

Directors’ Report continued

3. Remuneration Report continued

b. Remuneration Policy — Audited continued

Remuneration Structure continued

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

as follows:
	June 2009 STI Cash Element	June 2009 STI Deferred Element1 Maximum Opportunity % Calculated Based On
	Maximum Opportunity % Percentage Paid %
S McCann Other EMT	97 69	53 Total package value 53 Australia: Total package value UK and USA: Base salary
	36–84 21–50

1 The STI deferred element is due to vest in August 2010.

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.

Future Arrangements

A portion of STI awards is delivered as deferred equity to Executives. Due to the Australian Government announcements regarding the taxation of equity remuneration, the Board may amend the operation of the deferral in the coming period.

The Board has also agreed it intends to limit the aggregate pool of funds available for on target Group performance to 50% of the equivalent pool available in the previous year.

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. In the 2008 Remuneration Report, the Board committed to reviewing the structure of the LTI awards to be granted in the June 2009 financial year. This has been done.

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.

Performance Shares will vest, subject to performance hurdles being met, after four years. If the performance hurdles are met early, there is an opportunity for vesting to occur at three years (for TSR and EPS) and 3 ½ years (for TSR).

For Retention Shares, vesting occurs at the end of three years so long as the service conditions are fulfilled. No pro rata vesting will be provided upon early departure.

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 currency for overseas participants), which is invested in performance and retention shares over time to deliver value depending on:

Whether the Executive remains with the Group – if the executive resigns before vesting, the grant will lapse;
The financial performance of the Group; and
– The share price performance of Lend Lease Corporation.

2009 Annual Consolidated Financial Report Lend Lease Corporation

Details of the terms of the awards on issue during the June 2009 financial year are summarised below. Plan LTI – June 2006 LTI – June 2007 LTI – June 2008 Grant date 16 August 2006 15 August 2007 1 September 2008 Service period[1] 1 July 2006– 1 July 2007– 1 July 2008–30 June 2011/30 June 2012 30 June 2009 30 June 2010 (three to four years) (three years) (three years) Performance 1. TSR of Lend Lease Corporation against 1. TSR of Lend Lease Corporation against condition(s): the TSR of the individual ASX100 the TSR of the individual ASX100 listed Each of the listed companies (comprised as at the companies (comprised as at the beginning performance beginning of the performance period) of the performance period) (1/3 award). conditions (50% award). Performance assessed over the may vest Performance assessed over the three year performance period. independently. three year performance period.

TSR of Lend Lease Corporation against the TSR of the individual ASX100 listed companies (comprised as at the beginning of the performance period) (1/3 award).
Vesting Schedule

Vesting Schedule

Upper quartile or better – 100% vesting
Upper quartile or better – 100% vesting
Median to upper quartile – straight line increase from 50% to 100% vesting
Median to upper quartile – straight line increase from 50% to 100% vesting
- Median – 50% vesting
- Below median – 0% vesting
Median – 50% vesting
Below median – 0% vesting
Earnings per share (EPS) growth of Lend Lease Corporation over performance period (50% award).
Vesting Schedule
At least 10% compounded EPS growth[2] over three years – 100% vesting
Less than 10% EPS growth – 0% vesting
EPS growth[3] of Lend Lease Corporation over performance period (1/3 award). The target rates will be set annually by the Board.
- Vesting Schedule
- Below Target Rate – 0% vesting
- Between Target Rate and Target Rate plus 20% – straight-line increase from 50% to 100% vesting
- Above Target Rate plus 20% – 100% vesting
- TSR and EPS hurdles will be tested at year four. In addition, there is the opportunity if the hurdle is met earlier at year three (TSR and EPS) and year 3 ½ (TSR) for all or part of the award to vest.
Retention Shares against the tenure of the Executive (1/3 award). Should the Executive be employed three years after grant date, the award will vest. Early departure, except in limited circumstances approved by the Board, will lead to immediate forfeiture.
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 for these grants is based on statutory profit after tax attributable to members of Lend Lease Corporation adjusted for unrealised property investment revaluations (unless assets have been sold) and weighted average number of ordinary shares (excluding treasury shares).

3 EPS for this grant is based on operating profit as defined in the 2009 financial year and weighted average number of ordinary shares (excluding treasury shares).

Directors’ Report continued

3. Remuneration Report continued

b. Remuneration Policy — Audited continued Remuneration Structure continued

Plan	LTI – June 2006	LTI – June 2007	LTI – June 2008
Method of award	Shares, except for pre specifed	Shares, except for pre specifed	Shares.
settlement	executives which are	executives which are
	settled in cash.	settled in cash.
Award status	Did not vest.	Not yet vested.	Not yet vested.
	TSR ranking –
	56th of 87.
	EPS growth –
	negative.
Accounting	Recognised as an	Recognised as an	Recognised as an equity settled share based
treatment	equity settled share	equity settled share	payment. The income statement expense
	based payment.	based payment.	and corresponding increase in equity is
	The income	The income	measured at the fair value at grant date using
	statement expense	statement expense	a Monte-Carlo simulation methodology,
	and corresponding	and corresponding	where the share price is projected based
	increase in equity is	increase in equity is	on the assumptions underlying the Black-
	measured at the fair	measured at the fair	Scholes formula.
	value at grant date	value at grant date
	using a Monte-	using a Monte-
	Carlo simulation	Carlo simulation
	methodology, where	methodology, where
	the share price is	the share price is
	projected based on	projected based on
	the assumptions	the assumptions
	underlying the Black-	underlying the Black-
	Scholes formula.	Scholes formula.
	The method of	Certain pre specifed
	award settlement	executive awards are
	of the 2006 LTI was	accounted for as a
	changed from cash	cash settled share
	to shares on 15	based payment.
	August 2007.
	Certain pre specifed
	executive awards are
	accounted for as a
	cash settled share
	basedpayment.

Refer to Section 3d. of this Report for quantitative analysis of LTI awards on issue during the 2009 financial year.

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

In addition to the changes discussed in this section, the Committee recognises changes to Executive remuneration arrangements may be necessary in the coming year and beyond. In particular, the announcements of the Australian Government on 1 July 2009 relating to the taxation of equity remuneration and the Productivity Commission inquiry into the regulatory framework around Executive remuneration may lead to refinements to remuneration LTI awards arrangements.

2009 Annual Consolidated Financial Report Lend Lease Corporation

Retention Awards

When the Board believes an Executive or 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 Key Terms and Benefits

S McCann An equity settled award of 141,367 shares valued at A$2.5 million at award date was granted on 22 August 2007 and vests on 30 June 2012. Another equity settled award of 153,126 shares valued at A$1.5 million on award date was granted on 30 September 2008 and vests in three equal tranches on 31 March 2009, 30 September 2009 and 31 March 2010.

The awards will vest if Mr McCann remains in employment with the Group. If Mr McCann’s employment is terminated without cause by the Group prior to the vesting date, the awards will vest on a pro 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.

Retirement Plans

Retirement and 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 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 used to assess whether the financial component of LTI vests and is summarised in the following table.

		2009	2008	2007	2006	2005
Statutory proft after tax1	A$m	(653.6)	265.4	497.5	415.2	210.7
Operating proft after tax1	A$m	307.5	447.1	413.7	354.2	310.42
Earnings per share on operating proft after tax	cents	77.5	120.9	120.5	96.1	n/a
Dividends paid and declared	A$m	186.7	308.9	308.5	243.7	227.2
(Decrease)/increase in closing
shareprice3	A$	(2.54)	(8.99)	4.55	1.03	2.68

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$263.0 million after tax (A$60.2 million revaluation losses after tax for the June 2008 financial year), reduction in carrying value of inventory of A$188.3 million (A$121.5 million after tax for the June 2008 financial year), goodwill impairment of A$252.9 million after tax, savings implementation costs of A$83.9 million after tax, other carrying value adjustments of A$204.7 million after tax and gain on Bovis UK pension scheme curtailment of A$31.7 million.

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 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 and 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 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.

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.

periods that each individual was a Director.
Short Term	Post Employment	Share Based Payment
Base Fees A$000s Committee Chairman Fees A$000s Committee Fees A$000s Travel Fees A$000s	Super‑ annuation A$000s	Other Equity1 A$000s	Total A$000s
Non Executive Directors D Crawford 2009 550 40 2008 500 38
	14	110	714
	13	100	651
P Colebatch 2009 150 30 25 54 2008 140 25 15 52	14	41	314
	13	36	281
G Edington 2009 150 43 60 2008 140 30 52	14	39	306
	13	34	269
P Goldmark 2009 150 30 17 65 2008 140 25 15 48	14	40	316
	13	36	277
J Hill 2009 150 30 17 71 2008 140 25 15 58	14	40	322
	13	36	287
D Ryan 2009 150 40 17 40 2008 140 35 15 34	14	41	302
	13	38	275
M Selway2 2009 150 50 2008 5	14	31	245
		1	6

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.

1 Comprises entitlements under the Non Executive Directors’ Retirement Beneft Plan. 2 Mr Selway was appointed as a Non Executive Director on 17 June 2008.
Short Term	Post Employment
A 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 End of Service A$000s
Executive Directors S McCann 2009 1,329 968 18 2008 1,005 182 65
	41 2
	95 1
Former G Clarke 2009 1,603 370 2008 1,929 350 421
	158 82 3,124
	608 60
R Taylor 2009 826 4 2008 1,046 182 7	176 4 2,130
	249 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 ‘Non Monetary’ includes relocation benefits (such as housing, home leave travel, cost of living and tax return advice) and motor vehicle costs. 3 Fair value of LTI awards that are equity settled. Negative amounts generally represent a part accrual reversal for the 2006 LTI which did not vest and the 2007 LTI which is not expected to vest.
4 Represents fair value of deferred element of STI that is equity settled at a grant date value of A$9.30. Based on the 30 June 2009 Lend Lease Corporation share price, the value of the awards is: Mr McCann A$97,888; Mr Soller A$58,449; Mr Bellaman A$108,739; Mr Coleman A$108,220; Mr Hara A$87,029; Mr Leaver A$119,822; Mr Lombardo A$47,135; Mr Martin A$39,522; Mr Menhinnitt A$201,502; Mr Ooi A$118,637.
5 Represents executive participation in the Employee Share Acquisition Plan (ESAP).
6 ‘Other Long Term’ represents accrual of statutory employee entitlements.

2009 Annual Consolidated Financial Report Lend Lease Corporation

Share Based Payment	Other LongTerm6
B C D LTI Cash Settled A$000s LTI Equity Settled3 A$000s STI Equity Settled4 A$000s Retention A$000s Other Equity5 A$000s	A$000s	E Total A$000s	(A+B+C+D)/E Proportion of Remuneration Performance Related %
(146) 130 1,755 15 (606) 440 342 441 15
	16	4,128	23.1
	15	1,995	17.9
(994) (1,144) 904 (1,637)
		4,343	(22.9)
	28	1,519	7.2
(568) 340 26 (361) 487 627 1,803 34		2,938	(19.3)
	15	4,094	22.8

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 Monetary2 A$000s	Super‑ annuation A$000s Life Insurance A$000s End of Service A$000s
Executives B Soller 2009 536 281 45 2008 511 155 475 73
	45 4
	42 3
Other Executives in the Category of Five Highest Paid M Bellaman 2009 685 334 65	9
M Coleman 2009 586 288 356 2008 487 373 530	186 3 261 2
W Hara 2009 323 263 45 2008 318 173 42	14
	12
R Leaver 2009 778 348 8	14 4
T Lombardo 2009 527 275 82	14 1
N Martin 2009 400 109 278	147
M Menhinnitt 2009 655 315 45 2008 658 623 40	360 2 359 1
E Ooi 2009 571 196 125	136 5
Former D Spencer7 2009 323 340
	49 320
2008 330 97 406	50

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, cost of living and tax return advice) and motor vehicle costs.

3 Fair value of LTI awards that are equity settled. Negative amounts generally represent a part accrual reversal for the 2006 LTI which did not vest and the 2007 LTI which is not expected to vest.

4 Represents fair value of deferred element of STI that is equity settled at a grant date value of A$9.30. Based on the 30 June 2009 Lend Lease Corporation share price, the value of the awards is: Mr McCann A$97,888; Mr Soller A$58,449; Mr Bellaman A$108,739; Mr Coleman A$108,220; Mr Hara A$87,029; Mr Leaver A$119,822; Mr Lombardo A$47,135; Mr Martin A$39,522; Mr Menhinnitt A$201,502; Mr Ooi A$118,637.

5 Represents executive participation in the Employee Share Acquisition Plan (ESAP).

6 ‘Other Long Term’ represents accrual of statutory employee entitlements.

7 Mr Spencer unfortunately passed away in January 2009. The remuneration does not include the life insurance payment of A$2.0 million.

2009 Annual Consolidated Financial Report Lend Lease Corporation

Share Based Payment	Other LongTerm6
B C D LTI Cash Settled A$000s LTI Equity Settled3 A$000s STI Equity Settled4 A$000s Retention/ Hybrid A$000s Other Equity5 A$000s	A$000s	E Total A$000s	(A+B+C+D)/E Proportion of Remuneration Performance Related %
(69) 78 138 (134) 129 168
	9	1,067	27.2
	8	1,430	22.2
(93) 144 336		1,480	26.0
(126) 143 525 (130) 149 169 501	8 8	1,969 2,350	15.5 23.9
(101) 115 177 240 191 123 240	8	1,084	25.6
	8	1,107	44.0
272 159 50	12	1,645	47.4
5 63 111	7	1,085	31.6
(49) 52 83	6	1,026	10.9
(53) 267 42 136 95 (96)	10 9	1,643 1,825	32.2 46.8
240 157 243	7	1,680	35.3
(79)
		953	(8.3)
79	6	968	18.2

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

Criteria 4: Forfeiture and resignation. Awarded on other service cessation.

Criteria 5: 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 6: 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).

Criteria 7: EPS for this grant is based on operating profit as defined in the current financial year and weighted average number of ordinary shares (excluding treasury shares).

Criteria 8: Internal performance metrics on achieving specified targets for specific business units.

Directors’ Report continued

3. Remuneration Report continued

d. Long Term Incentives and Retentions – Audited continued

				Award Value at	Award Value
	Grant	Vesting	Granted	Grant Date1	at June 2009
	Date	Date	Number	A$	A$
Executive Directors
S McCann	Jul 2006	Jun 2009	65,621	632,915
	Jul 2007	Jun 2010	59,717	687,641	418,616
	Aug 2007	Jun 2012	141,367	2,500,000	990,983
	Sep 2008	Aug 2011	60,135	421,464	421,546
	Sep 2008	Aug 2012	120,235	763,566	842,847
	Nov 2008	Mar 2010	153,126	1,500,000	1,073,413
					3,747,405
Former
G Clarke	Jul 2006	Jun 2009	198,620	1,915,690
	Jul 2007	Jun 2010	141,257	2,791,238

R Taylor	Jul 2006	Jun 2009	80,243	773,944
	Oct 2006	Sep 2008	84,407	1,374,992
	Oct 2006	Sep 2009	84,408	1,375,008
	Oct 2006	Sep 2010	84,408	1,375,008
	Jul 2007	Jun 2010	59,717	687,641
	Sep2008	Aug2012	14,4584	77,104

Executives
B Soller	Jul 2006	Jun 2009	21,398	206,384
	Jul 2007	Jun 2010	15,688	180,647	109,973
	Sep 2008	Sep 2009	12,506	116,250	87,667
	Sep 2008	Aug 2011	11,191	78,435	78,449
	Sep2008	Aug2012	22,376	142,101	156,856
					432,945
Others in the Category
of Five Highest Paid
M Coleman	Jul 2006	Jun 2009	24,394	235,280
	Jul 2007	Jun 2010	18,346	211,254	128,605
	Jul 2007	Jun 2010	80,214	1,500,000	562,300
	Sep 2008	Aug 2011	13,087	91,724	91,740
	Sep2008	Aug2012	26,167	166,176	183,431
					966,076
W Hara	Jul 2006	Jun 2009	31,384	302,699
	Jul 2007	Jun 2010	23,360	268,990	163,754
	Sep 2008	Sep 2009	15,519	144,250	108,788
	Sep 2008	Aug 2011	16,664	116,793	116,815
	Sep2008	Aug2012	33,319	211,593	233,566
					622,923
M Menhinnitt	Jul 2006	Jun 2009	5,929	57,185
	Jul 2007	Jun 2010	30,364	349,641	212,852
	Sep 2008	Aug 2011	21,661	151,810	151,844
	Sep2008	Aug2012	43,308	275,034	303,589
					668,285
N Martin	Jul 2006	Jun 2009	15,157	146,189	106,251
	Jul 2007	Jun 2010	11,285	129,947	79,108
	Sep 2008	Sep 2009	7,197	66,898	50,451
	Sep 2008	Aug 2011	8,051	56,423	56,438
	Sep2008	Aug2012	16,096	102,221	112,833
					405,081

1 Award value represents the number of shares granted at the share price on the grant date. 2 Current award expensed represents the 2009 financial year accrual value of the LTI or retentions determined by actuarial analysis. Negative amounts represent a part accrual reversal for the 2006 LTI which did not vest and the 2007 LTI that is not expected to vest.

2009 Annual Consolidated Financial Report Lend Lease Corporation

Current Award Expensed 2009[2]

LTI	LTI
Cash	Equity	Retention/					Performance
Settled	Settled	Hybrids	% Vested	% Forfeited	Service	Performance	Share (PS)/
A$	A$	A$	in the Year	in the Year3	Criteria	Criteria	Retention
	(230,439)			100	Criteria 3	Criteria 5,6	PS
	(74,547)				Criteria 3	Criteria 5,6	PS
		514,374			Criteria 2	none	Retention
		117,073			Criteria 2	none	Retention
	159,076				Criteria 3	Criteria 5,7	PS
		1,123,418	33		Criteria 2	none	Retention
	(145,910)	1,754,865
(753,432)				100	Criteria 3	Criteria 5,6	PS
(240,843)				100	Criteria 3	Criteria 5,6	PS
(994,275)
	(416,145)		32	68	Criteria 3	Criteria 5,6	PS
		123,749	100		Criteria 1	none	Retention
		447,362	100		Criteria 1	none	Retention
		(231,071)		100	Criteria 1	none	Retention
	(229,214)			100	Criteria 3	Criteria 5,6	PS
	77,104		100		Criteria 3	Criteria 5,7	PS
	(568,255)	340,040
	(75,143)			100	Criteria 3	Criteria 5,6	PS
	(19,584)				Criteria 3	Criteria 5,6	PS
		116,250			Criteria 2	none	Retention
		21,787			Criteria 2	none	Retention
	26,006				Criteria 3	Criteria 5,7	PS
	(68,721)	138,037
	(110,505)			100	Criteria 3	Criteria 5,6	PS
	(46,232)				Criteria 3	Criteria 5,6	PS
		499,544			Criteria 2	none	Retention
		25,479			Criteria 2	none	Retention
	30,412				Criteria 3	Criteria 5,7	PS
	(126,325)	525,023
	(110,210)			100	Criteria 3	Criteria 5,6	PS
	(29,161)				Criteria 3	Criteria 5,6	PS
		144,250			Criteria 2	none	Retention
		32,442			Criteria 2	none	Retention
	38,724				Criteria 3	Criteria 5,7	PS
	(100,647)	176,692
	(26,858)			100	Criteria 3	Criteria 5,6	PS
	(76,517)				Criteria 3	Criteria 5,6	PS
		42,169			Criteria 2	none	Retention
	50,335				Criteria 3	Criteria 5,7	PS
	(53,040)	42,169
	(53,226)			100	Criteria 3	Criteria 5,6	PS
	(14,087)				Criteria 3	Criteria 5,6	PS
		66,898			Criteria 2	none	Retention
		15,673			Criteria 2	none	Retention
	18,708				Criteria 3	Criteria 5,6	PS
	(48,605)	82,571

3 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.
4 Mr Taylor received this award as part of his cessation of employment.

Directors’ Report continued

3. Remuneration Report continued

d. Long Term Incentives and Retentions – Audited continued

				Award Value at	Award Value
	Grant	Vesting	Granted	Grant Date1	at June 2009
	Date	Date	Number	A$	A$
Others in the Category	of
Five Highest Paid
continued
T Lombardo	Jul 2007	Jun 2010	12,652	145,687	88,691
	Sep 2008	Sep 2009	10,086	93,751	70,703
	Sep 2008	Aug 2011	9,025	63,254	63,265
	Sep2008	Aug2012	18,045	114,598	126,495
					349,154
E Ooi	Jul 2006	Jun 2009	7,602	73,321	53,290
	Jul 2007	Jul 2009	25,340	469,804	177,633
	Jul 2007	Jun 2010	50,680	824,057	355,267
	Jul 2007	Jun 2010	6,326	72,844	44,345
	Sep 2008	Aug 2011	4,730	33,147	33,157
	Sep2008	Aug2012	9,456	60,052	66,287
					729,979
R Leaver4	Jan/Jul 2008	Jun 2012	74,895	692,416	525,014
	Jan/Jul 2008	Jun 2013	61,308	542,129	429,769
					954,783
M Bellaman	Jul 2006	Jun 2009	20,915	201,725
	Jul 2007	Jun 2010	13,860	159,598	97,159
	Sep 2008	Aug 2011	10,204	71,529	71,530
	Sep 2008	Aug 2012	20,408	129,589	143,060
	Apr 2008	Apr 2011	61,885	800,303	433,814
					745,563
Former
D Spencer	July2007	Jun 2010	20,595	237,151

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

2 Current award expensed represents the 2009 financial year accrual value of the LTI or retentions determined by actuarial analysis. Negative amounts represent a part accrual reversal for the 2006 LTI which did not vest and the 2007 LTI that is not expected to vest.

2009 Annual Consolidated Financial Report Lend Lease Corporation

Current Award Expensed 2009[2]

LTI	LTI
Cash	Equity	Retention/					Performance
Settled	Settled	Hybrids	% Vested	% Forfeited	Service	Performance	Share (PS)/
A$	A$	A$	in the Year	in the Year3	Criteria	Criteria	Retention
	(15,794)				Criteria 3	Criteria 5,6	PS
		93,751			Criteria 2	none	Retention
		17,571			Criteria 2	none	Retention
	20,972				Criteria 3	Criteria 5,7	PS
	5,178	111,322
	(34,437)			100	Criteria 3	Criteria 5,6	PS
		234,260			Criteria 4	none	Retention
	274,434				Criteria 3	Criteria 8	PS
	(15,942)				Criteria 3	Criteria 5,6	PS
		9,207			Criteria 2	none	Retention
	15,467				Criteria 3	Criteria 5,7	PS
	239,522	243,467
	166,557				Criteria 3	Criteria 8	PS
	105,065				Criteria 3	Criteria 8	PS
	271,622
	(94,745)				Criteria 3	Criteria 5,6	PS
	(34,927)				Criteria 3	Criteria 5,6	PS
		19,869			Criteria 2	none	Retention
	36,189				Criteria 3	Criteria 5,7	PS
		316,025			Criteria 2	none	Retention
	(93,483)	335,894
	(78,570)			100	Criteria 3	Criteria 5,6	PS

3 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.

4 Refer to page 100 for further detail on Mr Leaver’s awards.

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, leave entitlements, salary continuance 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
	adviseryservices.
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 employment
solicitation clauses	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 97 to 101.

2009 Annual Consolidated Financial Report Lend Lease Corporation

Executive Director	KeyEmployment Terms and Benefts
S McCann	No fxed term, however under the Lend Lease
	Corporation Constitution Mr McCann was
	appointed as Managing Director for a term not exceeding fve years effective 4 March 2009.
	Mr McCann’s prior service to the Company is recognised.
	Retention awards (Refer to Section 3b. for further details):

Termination Obligations Notice period: Six months (if instigated by the employee) or 12 months (if instigated by the Group). Termination payments provided for under the contract:

Base pay for the remainder of any notice period not served;
Cash value of statutory entitlements and pro rata benefits;
Award date: 22 August 2007.
Pro rata target STI unless Board determines a different achievement level;
Vest date: 30 June 2012.

– Grant number and value: 141,367 Lend Lease Corporation shares valued at A$2,500,000 at award date.

Pro rata payment under LTIP awards and, in respect of most recent LTIP award prior to termination, the pro rata period is extended by 12 months.
Non compete period post termination: 12 months. Non solicitation period post termination: 12 months.
Award date: 30 September 2008.

	– Grant number and value: 141,367 Lend Lease Corporation shares valued at A$2,500,000 at award date. – Award date: 30 September 2008.	– Pro rata payment under LTIP awards and, in respect of most recent LTIP award prior to termination, the pro rata period is extended by 12 months.
	– Vest date: three equal tranches on 31 March	Non compete period post termination: 12 months.
	2009, 30 September 2009 and 31 March 2010.	Non solicitation period post termination: 12 months.
	– Grant number and value: 153,126 Lend Lease
	Corporation shares valued at A$1,500,000 at
	award date.
	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.
	Mr McCann will undertake a medical assessment
	annually.
G Clarke	No fxed term however under the Lend Lease	Notice period: 12 months.
	Corporation Constitution Mr Clarke was appointed as Managing Director for a term of fve 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.	Termination payments provided for under the contract: Base salary for the remainder of any notice period not served, cash value of pro rata benefts, 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.
		On resignation of Mr Clarke on 27 February 2009,
		termination payments made were in accordance with
		this agreement. Refer to Section 3d. for details.

Directors’ Report continued

e. Service Agreements – Audited continued

3. Remuneration Report continued

Executive Directors and Executives continued

Executive	KeyEmployment Terms and Benefts	Termination Obligations
R Taylor	Retention award:	Notice period: Six months (if instigated by the
	Award date: 3 October 2006.	employee) or 18 months (if instigated by the Group).
	Vest date: Three remaining equal tranches on each of:	Mr Taylor resigned as a Director on 9 October 2008 and ceased employment with the Group
	– 1 September 2008: 84,407 Lend Lease Corporation shares;	on 10 April 2009. Termination payments made were in accordance with this agreement. Refer to Section 3d. for details.
	– 1 September 2009: 84,408 Lend Lease
	Corporation shares; and
	– 1 September 2010: 84,408 Lend Lease
	Corporation shares.
	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.
E Ooi	No fxed term.	Notice period: 6 months.
	Mr Ooi is on international assignment to Singapore	Termination payments:
	until August 2010.	– Payment in lieu of notice
	Retention award:	– Up to six months STI at 60% of target value.
	Award date: 1 June 2007
	Vest date: 1 July 2009
	Grant number and value: 25,340 Lend Lease
	Corporation shares valued at A$500,000 at
	award date.
	Vesting conditions: Mr Ooi must remain in
	employment with the Group to the vesting date. If
	Mr Ooi’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 Ooi
	resigns or is terminated for cause, and the vesting
	conditions set out above are not met.
	Performance award:
	Award date: 1 June 2007
	Vest date: August 2010
	Grant number and value: 50,680 Lend Lease
	Corporation shares valued at A$1,000,000 at
	award date.
	Vesting conditions: Performance against four commercial in confdence fnancial and strategic
	metrics assessed by an Assessment Committee
	of four members with vesting at the committee’s
	discretion up to full vesting. Remain employed
	with the Group to and not have given notice of
	resignation as at the date of sign-off of the FY10 Lend Lease Corporation Group fnancial statements
	by the Board. If terminated without cause by the
	Group prior to the vesting date, performance will
	be assessed and a pro rata element based on
	time served and performance may vest as soon
	aspracticable after termination.

2009 Annual Consolidated Financial Report Lend Lease Corporation

Executive	KeyEmployment Terms and Benefts	Termination Obligations
M Coleman	Retention award:	Notice period: Six months.
	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 vestingdate.
W Hara	Retention award:	Notice period: Six months (if instigated by the
	Award date: 15 September 2008.	employee) or 12 months (if instigated by the Group).
	Vest date: The frst anniversary of the award date.	Non compete period post termination: Six months.
	Grant number and value: 15,519 Lend Lease	Non solicitation period post termination: Six months.
	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
	causeprior to the vestingdate.
M Bellaman	Retention award:	Notice period: 30 days to six months (if instigated by
	Award date: 1 April 2008.	the employee) or 30 days (if instigated by the Group).
	Vest date: 1 April 2011.	Non compete period post termination: 12 months.
	Grant number and value: 61,885 Lend Lease	Non solicitation period post termination: 12 months.
	Corporation shares to the value of US$750,000 at	Termination without cause:
	the award date.	– One year base salary;
	Vesting conditions: Mr Bellaman must remain in employment with the Group and not under notice given by him at the vesting date. If Mr Bellaman’s	– 60% of target STI; – Pro rata cash bonus in current year;
	employment is terminated without cause by the	– Pro rata retention;
	Group prior to the vesting date, the award will vest on a pro rata basis.	– ESTI and LTI vest in accordance with plan rules.
	Forfeiture: The retention award is forfeited if
	Mr Bellaman resigns or is terminated for cause
	prior to the vestingdate.
M Menhinnitt	No changes to employment conditions as specifed	Notice period: Six months (if instigated by the
	on page 96.	employee) or 12 months (if instigated by the Group).
		Non compete period post termination:
		12 months.
		Non solicitation period post termination:
		12 months.

Directors’ Report continued

e. Service Agreements – Audited continued

3. Remuneration Report continued

Executive Directors and Executives continued

Executive	KeyEmployment Terms and Benefts	Termination Obligations
N Martin	No fxed term.	Notice period: Six months or by mutual agreement.
	Mr Martin is on international assignment to Australia	Non compete period post termination:
	until April 2009 which has been extended to March	24 months.
	2010 during the year.	Non solicitation period post termination:
	Retention award:	24 months.
	Award date: 15 September 2008.
	Vest date: The frst anniversary of the award date.
	Grant number and value: 7,197 Lend Lease
	Corporation shares to the value of A$66,898
	at the award date.
	Vesting conditions: Mr Martin must remain in
	employment with the Group and not under notice
	given by him at the vesting date. If Mr Martin’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 Martin resigns, gives notice to resign or is
	terminated for causeprior to the vestingdate.
R Leaver	Long Term Incentive Plan.	Notice period: Six months (if instigated by the
	Award dates: On joining and annually on 1 July up to and including 1 July 2011.	employee) or 12 months (if instigated by the Company).
	Vest date: 30 June 2012.	Non compete period post termination:
	Grant value and number: A$333,333 initially and then A$666,667 annually thereafter. The number of shares awarded during each period will be	12 months. Non solicitation period post termination: 12 months.
	the award value divided by the volume weighted
	average price of Lend Lease Corporation shares
	over the three months up to each grant date.
	Number of shares on joining – 17,628.
	Awarded 1 July 2008 – 57,267.
	Award dates: On joining and annually on 1 July
	up to and including 1 July 2012.
	Vest date: 30 June 2013.
	Grant value and number: A$272,727 initially and
	then A$545,455 annually thereafter. The number
	of shares awarded during each period will be
	the award value divided by the volume weighted
	average price of Lend Lease Corporation shares
	over the three months up to each grant date.
	Number of shares on joining – 14,423.
	Awarded 1 July 2008 – 46,885.
	Vesting conditions: The Personnel and Organisation
	Committee will assess three key performance
	metrics of the Investment Management business against pre-determined commercial in confdence
	targets as soon as practicable after the sign off of the Group fnancial statements after the vesting date.
	For each metric one-third of the awards will vest if
	performance meets or exceeds the target at any
	time during the performance period.
	Forfeiture: All awards will lapse if the executive
	resigns or is terminated for cause. If the executive is
	terminated by the Group without cause during the
	performance period:
	– Ungranted awards will not be granted;
	– Granted awards will vest subject to pro rata for
	the period served from the relevant grant date
	and the Committee’s assessment of performance
	upto termination.

100

2009 Annual Consolidated Financial Report Lend Lease Corporation

Executive	KeyEmployment Terms and Benefts	Termination Obligations
T Lombardo	Retention award:	Notice period: Six months (if instigated by the
	Award date: 15 September 2008. Vest date: The frst anniversary of the award date. Grant number and value: 10,086 Lend Lease Corporation shares to the value of A$93,751 at the award date.	employee) or 12 months (if instigated by the Company). Non compete period post termination: Six months. Non solicitation period post termination: 12 months.
	Vesting conditions: Mr Lombardo must remain in
	employment with the Group and not under notice
	given by him at the vesting date. If Mr Lombardo’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 Lombardo resigns, gives notice to resign or
	is terminated for causeprior to the vestingdate.
B Soller	Retention award:	Notice period: Six months (if instigated by the
	Award date: On or before 15 September 2008. Vest date: The frst anniversary of the award date. Grant number and value: 12,506 Lend Lease Corporation shares to the value of A$116,250	employee) or 12 months (if instigated by the Company). Non compete period post termination: Six months. Non solicitation period post termination: Six months.
	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
	causeprior to the vestingdate.
D Spencer	Retention award:	Notice period: Six months (if instigated by the
	Award date: On or before 15 September 2008. Vest date: The frst anniversary of the award date. Grant number and value: 8,716 Lend Lease Corporation shares to the value of A$81,018 at the award date.	employee) or 12 months (if instigated by the Company). Non compete period post termination: 12 months. Non solicitation period post termination:
	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	12 months. On cessation of employment payments were made in accordance with this agreement.
	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 causeprior to the vestingdate.

101

Directors’ Report continued

3. Remuneration Report continued

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 75 to 76 of this Report; the Company Secretary, Mr W Hara; 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$574,315 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.

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.

audit services provided during the year are set out below.	audit services provided during the year are set out below.
Consolidated
June 2009	June	2008
A$000s	A$000s
Audit and Review of Financial Reports 7,398	6,816
Other Services KPMG International assignees tax services 119		26
Tax services 4		58
Other audit services 259		137
Other services 11		15
Total other services 393		236
Total audit and other services 7,791	7,052

102

2009 Annual Consolidated Financial Report Lend Lease Corporation

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 [198 x 47] intentionally omitted <==

D A Crawford Chairman Sydney, 20 August 2009

==> picture [87 x 52] intentionally omitted <==

S B McCann Managing Director

103

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 2009 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.

==> picture [99 x 55] intentionally omitted <==

KPMG

==> picture [132 x 57] intentionally omitted <==

C Hall Partner Sydney, 20 August 2009

104

2009 Annual Consolidated Financial Report Lend Lease Corporation

Five Year Profile

Five Year Profle
	June	June	June	June	June
	2009	20081	2007	2006	2005
Proftability
Revenue	A$m 14,785	14,678	14,282	12,127	9,435
Statutory (loss)/proft before tax	A$m (733)	310	628	573	350
Statutory (loss)/proft after tax attributable to members	A$m (654)	254	498	415	226
Operating proft after tax2	A$m 308	436	446	354	286
Operating EBITDA2	A$m 412	517	551	527	411
Earnings per share on statutory (loss)/proft3	cents (154.1)	63.4	124.3	104.0	56.5
Earnings per share on operating proft2,3	cents 72.5	108.7	111.4	88.7	71.6
Statutory (loss)/proft after tax to shareholders’ equity (ROE)
for the period	% (24.4)	8.2	15.7	14.7	11.9
Dividend per share4	cents 41	77	77	61	57
Dividend payout ratio on operating proft
after tax2,4	% 60.7	70.9	69.2	68.8	79.5
Corporate Strength
Total assets	A$m 8,319	8,550	9,336	8,166	6,925
Cash	A$m 1,121	843	550	560	570
Borrowings	A$m 1,125	929	1,076	846	500
Current assets	A$m 4,106	4,085	4,514	3,379	2,612
Current liabilities	A$m 4,082	3,915	3,869	3,179	3,384
Shareholders’ equity	A$m 2,447	2,981	3,243	3,011	2,710
Cash fows provided by/(used in) operations	A$m 382	269	357	660	(55)
Net asset backing per share	A$ 5.35	7.43	8.09	7.53	6.80
Ratio of current assets to current liabilities	times 1.01	1.04	1.17	1.06	0.77
Borrowings to shareholders’ equity	% 46.0	31.2	33.2	28.1	18.4
Borrowings to shareholders’ equity plus borrowings	% 31.5	23.8	24.9	21.9	15.6
Gross borrowings to total tangible assets5	% 16.9	14.5	15.7	15.6	12.9
Borrowings to total market capitalisation	% 35.1	24.3	14.5	15.1	9.7
Shares on issue	m 458	401	401	400	399
Number of shareholders	no. 52,684	51,632	49,051	50,179	52,878
Number of equivalent full-time employees	no. 10,656	12,039	10,817	9,652	8,791
Shareholders’ Returns and Statistics
Proportion of shares on issue to top 20 shareholders	% 74.3	75.4	76.9	76.4	75.6
Shareholdings relating to employees6	% 7.9	9.3	9.5	9.6	10.8
Total dividends declared	A$m 187	309	309	244	227
Share price as at 30 June as quoted on
the Australian Securities Exchange	A$ 7.01	9.55	18.54	13.99	12.96

1 June 2008 has been adjusted to reflect the impact of adopting for the first time AASB Interpretation 12 ‘Service Concession Arrangements’ . 2 Operating profit excludes unrealised property investment revaluations (June 2009: A$325.7 million before tax, A$263.0 million loss after tax; June 2008: A$69.2 million before tax, A$60.2 million after tax). June 2009 also excludes inventory carrying value adjustments A$226.1 million loss before tax, A$188.3 million loss after tax (June 2008: A$121.5 million before/after tax), goodwill impairments A$252.9 million before/after tax, other carrying value adjustments A$233.0 million before tax, A$204.7 million loss after tax, savings implementation costs A$120.8 million (A$83.9 million after tax) and a net gain on closure of the Bovis UK pension scheme to future accrual A$44.3 million before tax (A$31.7 million after tax).

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

4 Dividends include interim and final dividends.

5 Gross borrowings includes other non current financial liabilities.

6 Shares held through employee benefit vehicles.

105

Consolidated Financial Statements

Income Statements	Income Statements	107
Balance Sheets		108
Statements of Changes in Equity		109
Statements of Cash Flows		111
Notes to the Consolidated Financial Statements		112
1.	Signifcant Accounting Policies	112
2.	Revenue	123
3.	Other Income	124
4.	Finance Costs	124
5.	Other Operating (Income) and Expenses	124
6.	Taxation	126
7.	Dividends and Earnings Per Share	129
8.	Cash and Cash Equivalents	129
9.	Loans and Receivables	130
10.	Inventories	131
11.	Investments Accounted for Using
	the Equity Method	132
12.	Investment Properties	135
13.	Other Financial Assets	136
14.	Property, Plant and Equipment	137
15.	Intangible Assets	138
16.	Defned Beneft Plan Asset	140
17.	Other Assets	141
18.	Trade and Other Payables	142
19.	Borrowings and Financing Arrangements	143
20.	Provisions	144
21.	Other Financial Liabilities	145
22.	Other Non Financial Liabilities	145
23.	Defned Beneft Plan Liability	146
24.	Issued Capital and Treasury Shares	148
25.	Reserves	149
26.	Retained Earnings	149
27.	Contingent Liabilities	150
28.	Consolidated Entities	151
29.	Segment Reporting	154
30.	Capital Risk Management	156
31.	International Currency Management
	and Financial Instruments	156
32.	Commitments	162
33.	Notes to the Statements of Cash Flows	164
34.	Employee Benefts	165
35.	Key Management Personnel Disclosures	172
36.	Non Key Management Personnel
	Related Party Information	173
37.	Event Subsequent to Balance Date	174
Directors’Declaration		175
Independent Auditor’s Report		176

106

2009 Annual Consolidated Financial Report Lend Lease Corporation

Income Statements

Year ended 30 June 2009

Income Statements Year ended 30 June 2009
			Consolidated		Company
			June 2009	June 20081	June 2009	June 2008
		Note	A$m	A$m	A$m		A$m
Revenue
Revenue from the sale of development properties		2a	366.8	805.3
Revenue from the provision of services		2b	14,159.0	13,569.5
Finance revenue		2c	102.1	96.9	2.4		4.3
Other revenue		2d	157.1	206.2	134.8		729.8
Total revenue			14,785.0	14,677.9	137.2		734.1
Other Income		3	57.6	70.9	4.7		6.0
Expenses
Retail activities			(221.3)	(130.9)
Communities activities
Cost of properties sold			(581.4)	(747.3)
Other expenses			(552.3)	(235.7)
Public Private Partnerships (PPP) activities
Cost of inventories sold			(1,357.3)	(813.1)
Other expenses			(80.2)	(95.3)
Investment Management activities			(69.4)	(53.3)
Project Management and Construction activities
Cost of inventories sold			(11,805.2)	(11,883.9)
Other expenses			(462.9)	(369.3)
Corporate and administrative activities			(185.0)	(101.3)	(170.4)		(86.2)
Finance costs		4	(100.2)	(86.0)
Total expenses			(15,415.2)	(14,516.1)	(170.4)		(86.2)
Share of (loss)/proft of associates
accounted for using the equity method		11	(64.3)	23.6
Share of (loss)/proft of joint venture entities
accounted for usingthe equitymethod		11	(96.2)	54.0
(Loss)/proft before tax			(733.1)	310.3	(28.5)		653.9
Income tax beneft/(expense)		6a	67.2	(62.5)	(7.5)		15.5
(Loss)/proft after tax			(665.9)	247.8	(36.0)		669.4
(Loss)/proft after tax attributable to:
Members of Lend Lease Corporation Limited		26	(653.6)	254.2	(36.0)		669.4
Minorityinterests			(12.3)	(6.4)
(Loss)/proft after tax			(665.9)	247.8	(36.0)		669.4
Basic/Diluted Earnings Per Share
Shares excluding treasury shares	(cents)	7b	(164.7)	68.6
Shares on issue	(cents)	7b	(154.1)	63.4

1 June 2008 profit after tax has been adjusted to reflect the impact of adopting for the first time AASB Interpretation 12 ‘Service Concession Arrangements’ (refer to Note 1.29. ‘Service Concession Arrangements’).

The accompanying notes form part of these consolidated financial statements.

107

Consolidated Financial Statements continued

Balance Sheets

As at 30 June 2009

Balance Sheets As at 30 June 2009
		Consolidated		Company
	Note	June 2009 A$m	June 20081 A$m	June 2009 A$m	June 2008 A$m
Current Assets
Cash and cash equivalents	8	1,120.8	842.8			18.5
Loans and receivables	9	2,265.0	2,340.9	3,560.8	3,154.6
Inventories	10	564.9	773.1
Other fnancial assets	13	87.2	84.7	1.4		18.5
Other assets	17	67.8	43.2	1.0
Total current assets		4,105.7	4,084.7	3,563.2	3,191.6
Non Current Assets
Loans and receivables	9	495.1	454.8	66.4		63.6
Inventories	10	1,201.2	1,332.3
Investments accounted for using
the equity method	11	1,059.4	1,058.6
Investment properties	12	147.7	190.4
Other fnancial assets	13	384.4	391.4	1,365.0	1,384.7
Deferred tax assets	6c	209.2	121.5	15.6		21.5
Property, plant and equipment	14	130.1	145.2	0.2		0.2
Intangible assets	15	526.0	730.1
Defned beneft plan asset	16	30.0	28.7	30.0		28.7
Other assets	17	30.6	11.8
Total non current assets		4,213.7	4,464.8	1,477.2	1,498.7
Total assets		8,319.4	8,549.5	5,040.4	4,690.3
Current Liabilities
Trade and other payables	18	3,797.2	3,677.4	1,883.0	1,537.2
Provisions	20	227.2	183.8	39.1		43.3
Current tax liabilities	6b	27.7	53.7	34.2		74.6
Other fnancial liabilities	21	29.8	0.1	9.2		9.3
Other non fnancial liabilities	22	0.2	0.3
Total current liabilities		4,082.1	3,915.3	1,965.5	1,664.4
Non Current Liabilities
Trade and other payables	18	220.8	170.1
Borrowings and fnancing arrangements	19	1,125.0	929.3
Provisions	20	50.0	45.3	0.6		0.7
Deferred tax liabilities	6c	156.3	188.4
Other fnancial liabilities	21	191.6	200.8	42.5		51.1
Other non fnancial liabilities	22	0.6	0.8
Defned beneftplan liability	23	45.7	118.1
Total non current liabilities		1,790.0	1,652.8	43.1		51.8
Total liabilities		5,872.1	5,568.1	2,008.6	1,716.2
Net assets		2,447.3	2,981.4	3,031.8	2,974.1
Equity
Issued capital	24	1,195.9	854.7	1,195.9		854.7
Treasury shares	24	(63.2)	(62.6)	(88.2)		(87.6)
Reserves	25	34.3	7.2	195.5		192.5
Retained earnings	26	1,238.5	2,126.1	1,728.6	2,014.5
Total equity attributable to equity holders
of the parent		2,405.5	2,925.4	3,031.8	2,974.1
Minorityinterests		41.8	56.0
Total equity		2,447.3	2,981.4	3,031.8	2,974.1

1 June 2008 balance sheet has been adjusted to reflect the impact of adopting for the first time AASB Interpretation 12 ‘Service Concession Arrangements’ (refer to Note 1.29. ‘Service Concession Arrangements’).

The accompanying notes form part of these consolidated financial statements.

108

2009 Annual Consolidated Financial Report Lend Lease Corporation

Statements of Changes in Equity

Year ended 30 June 2009

Statements of Changes in Equity Year ended 30 June 2009
		Consolidated		Company
		June 2009	June 2008	June 2009	June 2008
	Note	A$m	A$m	A$m	A$m
Issued Capital and Treasury Shares
Issued Capital
Opening balance at beginning of fnancial year		854.7	854.4	854.7	854.4
Share issue via institutional placement
(net of transaction costs)		296.2		296.2
Share issue – other		0.2	0.3	0.2	0.3
Dividend Reinvestment Plan(DRP)		44.8		44.8
Closingbalance at end of fnancialyear	24	1,195.9	854.7	1,195.9	854.7
Treasury Shares
Opening balance at beginning of fnancial year		(62.6)	(67.4)	(87.6)	(92.5)
Treasury shares acquired		(14.8)	(1.6)	(14.8)	(1.5)
Treasuryshares vested		14.2	6.4	14.2	6.4
Closingbalance at end of fnancialyear	24	(63.2)	(62.6)	(88.2)	(87.6)
Total issued capital and treasuryshares		1,132.7	792.1	1,107.7	767.1
Reserves
Fair Value Revaluation Reserve
Opening balance at beginning of fnancial year		81.1	130.2	(0.1)	1.3
Revaluation (loss)/gain taken to equity (net of tax)		(36.7)	3.2	1.0	(1.4)
Transfer of fair value revaluation reserve to income
statement on asset disposal (net of tax)			(58.5)
Effect of foreign exchange rate/other movements		0.1	6.2
Closingbalance at end of fnancialyear		44.5	81.1	0.9	(0.1)
Hedging Reserve
Opening balance at beginning of fnancial year		(6.8)	(9.9)
Adjustment on adoption of AASB Interpretation 12
(net of tax)			15.3
Movements attributable to effective cash fow
hedges taken to equity on investments accounted
for using the equity method (net of tax)1		(54.9)	(13.8)
Movements attributable to effective cash fow
hedges taken to equity other (net of tax)		0.7	1.2
Effect of foreign exchange rate/other movements1		2.9	0.4
Closingbalance at end of fnancialyear		(58.1)	(6.8)	–	–
Foreign Currency Translation Reserve
Opening balance at beginning of fnancial year		(152.0)	(50.7)
Adjustment on adoption of AASB Interpretation 12
(net of tax)			(0.1)
Movements attributable to translation of foreign operations1		126.1	(102.0)
Transfer of foreign currency translation reserve to
income statement on return of capital		0.2	0.8
Closingbalance at end of fnancialyear		(25.7)	(152.0)	–	–
Equity Compensation Reserve
Opening balance at beginning of fnancial year		33.6	12.3	33.6	12.3
Movements attributable to unallocated treasuryshares		2.0	21.3	2.0	21.3
Closingbalance at end of fnancialyear		35.6	33.6	35.6	33.6
Other Compensation Reserve
Opening balance at beginning of fnancial year		54.4	55.3	54.4	55.3
Movements attributable to sale of unallocated
treasuryshares			(0.9)		(0.9)
Closingbalance at end of fnancialyear		54.4	54.4	54.4	54.4

1 June 2008 financial year movements have been adjusted to reflect the impact of adopting for the first time AASB Interpretation 12 ‘Service Concession Arrangements’ (refer to Note 1.29. ‘Service Concession Arrangements’).

The accompanying notes form part of these consolidated financial statements.

109

Consolidated Financial Statements continued

Statements of Changes in Equity continued

Year ended 30 June 2009

Year ended 30 June 2009
		Consolidated		Company
	Note	June 2009 A$m	June 20081 A$m	June 2009 A$m	June 2008 A$m
Capital Reserve
Closing balance at beginning and end of fnancialyear		104.6	104.6	104.6	104.6
Minority Interest Acquisition Reserve
Opening balance at beginning of fnancial year		(107.7)	(124.7)
Effect of foreign exchange rate movements/
other movements		(13.3)	17.0
Closingbalance at end of fnancialyear		(121.0)	(107.7)	–	–
Total reserves		34.3	7.2	195.5	192.5
Retained Earnings
Opening balance at beginning of fnancial year		2,126.1	2,257.4	2,014.5	1,684.8
Adjustment on adoption of AASB Interpretation 12
(net of tax)			(68.2)
(Loss)/proft attributable to members of
Lend Lease Corporation Limited		(653.6)	254.2	(36.0)	669.4
Dividends paid		(205.1)	(341.0)	(205.1)	(341.0)
Dividends on treasury shares		16.8	25.5
Dividends forgone pursuant to DRP		(44.8)		(44.8)
(Loss)/gain on utilisation of treasury shares
recognised directly in retained earnings		(0.9)	1.8		1.3
Other			(3.6)
Closingbalance at end of fnancialyear	26	1,238.5	2,126.1	1,728.6	2,014.5
Minority Interests
Opening balance at beginning of fnancial year		56.0	81.5
Share of movement in loss for fnancial year		(12.3)	(6.4)
Movements attributable to capital contributions/
acquisitions			3.1
Movements attributable to disposal			(12.4)
Effect of foreign exchange rate/other movements		(1.9)	(9.8)
Closingbalance at end of fnancialyear2		41.8	56.0	–	–
Total equity		2,447.3	2,981.4	3,031.8	2,974.1
Total Recognised Income and
Expense for Financial Year
Non proft/(loss) items recognised directly in equity		35.2	(111.4)	1.0	(1.4)
(Loss)/proft after tax for fnancialyear		(665.9)	247.8	(36.0)	669.4
		(630.7)	136.4	(35.0)	668.0
Total income and expense for fnancial year
attributable to:
Members of Lend Lease Corporation Limited		(618.3)	150.3	(35.0)	668.0
Minorityinterests		(12.4)	(13.9)
		(630.7)	136.4	(35.0)	668.0

2 Mainly relates to Chelmsford Meadows 25% (June 2008: 25%) and Lend Lease Twin Waters 49% (June 2008: 49%).

The accompanying notes form part of these consolidated financial statements.

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2009 Annual Consolidated Financial Report Lend Lease Corporation

Statements of Cash Flows

Year ended 30 June 2009

Statements of Cash Flows Year ended 30 June 2009
		Consolidated		Company
		June 2009	June 2008	June 2009	June 2008
	Note	A$m	A$m	A$m	A$m
Cash Flows from Operating Activities
Cash receipts in the course of operations		14,457.1	13,590.1	66.2	54.6
Cash payments in the course of operations		(14,077.0)	(13,455.8)	(75.2)	(55.5)
Property development receipts		505.8	804.7
Property development expenditure		(494.1)	(891.4)
Interest received		66.8	150.9	5.5	4.4
Interest paid		(96.4)	(78.2)
Dividends/distributions received		107.4	118.0	73.5	674.7
Income tax(paid)/received in respect of operations		(87.4)	30.4	(10.5)	27.2
Net cashprovided byoperatingactivities	33a	382.2	268.7	59.5	705.4
Cash Flows from Investing Activities
Sale/redemption of investments		112.9	1,075.5	19.0
Acquisition of investments		(381.1)	(509.7)	(0.9)	(18.2)
Acquisition of investment properties		(0.7)	(1.2)
Acquisition of business	33b		(17.0)
Disposal of other assets		1.6
Loans to related parties		(110.7)	(88.2)
Acquisition of minority interest		(1.0)	(17.7)
Acquisition of consolidated entity
(net of cash acquired)	28b	(0.2)		(0.2)
Payment from settlement of derivatives		(44.8)
Disposal of consolidated entities
(net of cash disposed)	28c	10.1	(6.6)		173.9
Disposal of property, plant and equipment		2.0	0.1
Acquisition of property, plant and equipment		(35.3)	(58.0)		(0.1)
Acquisition of intangible assets		(26.7)	(12.7)
Net cash(used in)/provided byinvestingactivities		(473.9)	364.5	17.9	155.6
Cash Flows from Financing Activities
Proceeds from share issue		302.5		302.5
Payment of share issue transaction costs		(6.3)		(6.3)
Net proceeds from borrowings		248.1
Dividends paid		(188.3)	(315.5)	(205.1)	(341.0)
Increase in fnancing of consolidated entities				(187.0)	(503.5)
Increase in capital of minorityinterest			3.1
Net cashprovided by/(used in)fnancingactivities		356.0	(312.4)	(95.9)	(844.5)
Other Cash Flow Items
Effect of foreign exchange rate movements
on cash and cash equivalents		13.7	(28.1)
Net increase/(decrease) in cash
and cash equivalents		278.0	292.7	(18.5)	16.5
Cash and cash equivalents at beginning of fnancialyear		842.8	550.1	18.5	2.0
Cash and cash equivalents at end of fnancialyear	8	1,120.8	842.8	–	18.5

The accompanying notes form part of these consolidated financial statements.

111

1. Significant Accounting Policies

Notes to the Consolidated Financial Statements

Lend Lease Corporation Limited (‘the Company’) is domiciled in Australia. The consolidated financial report of the Company for the financial year ended 30 June 2009 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 20 August 2009.

1.1 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.

1.2 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 Note 1.30.

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.

1.3 New Accounting Standards

Certain new accounting standards and interpretations have been published that are not mandatory for the financial year ended 30 June 2009 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 non-controlling (minority) interests. The standard will be applied prospectively from 1 July 2009 and therefore there will be no impact on prior periods.

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. Any changes to disclosure are not expected to affect the financial results of the Group.

Revised AASB 101 ‘Presentation of Financial Statements’ (September 2007), AASB 2007-8 ‘Amendments to Australian Accounting Standards arising from AASB 101’ and AASB 2007-10 ‘Further Amendments to Australian Accounting Standards arising from AASB 101’ .

AASB 101, AASB 2007-8 and AASB 2007-10 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.

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2009 Annual Consolidated Financial Report Lend Lease Corporation

– AASB 2008-8 ‘Amendments to Australian

– 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 require borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset to be capitalised. The standards will be applied prospectively and therefore there will be no impact on prior periods. – Amended 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. The standards will be applied prospectively and therefore there will be no impact on prior periods. – 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.

Accounting Standard – Eligible Hedged Items’ . AASB 2008-8 is applicable to annual reporting periods beginning on or after 1 July 2009. The standard clarifies the effect of using options as hedging instruments and the circumstances in which inflation risk can be hedged. The potential effect of AASB 2008-8 on the Group’s financial results is yet to be determined.

– AASB 2009-2 ‘Amendments to Australian Accounting Standards – Improving Disclosures about Financial Instruments’ . AASB 2009-2 is applicable to annual reporting periods beginning on or after 1 January 2009. The standard may result in additional disclosures about financial instruments. The possible changes to disclosure are not expected to affect the financial results of the Group. – AASB 2009-4 ‘Amendments to Australian Accounting Standards arising from the Annual Improvements Process’ and AASB 2009-5 ‘Further Amendments to Australian Accounting Standards arising from the Annual Improvements Process’ . AASB 2009-4 is applicable to annual reporting periods beginning on or after 1 July 2009 and AASB 2009-5 is applicable to annual reporting periods beginning on or after 1 January 2010. The standards amend several AASBs terms of accounting recognition, measurement and disclosure. The potential effect of AASB 2009-4 and AASB 2009-5 on the Group’s financial statements is yet to be determined. –

AASB Interpretation 15 ‘Agreements for the Construction of Real Estate’ .

– AASB 2008-2 ‘ Amendments to Australian Accounting Standards – Puttable Financial Instruments and Obligations arising on Liquidation’ . AASB 2008-2 is applicable to annual reporting periods beginning on or after 1 January 2009. The standard impacts entities with limited lives and entities that have units where the unit holder can put their units back to the entity for cash. Financial instruments may be classified as equity rather than financial liabilities where they are puttable by the holder back to the entity as equity. The potential effect of AASB 2008-2 on the Group’s financial – statements is yet to be determined.

AASB Interpretation 15 is applicable to annual reporting periods beginning on or after 1 January 2009. The standard provides guidance on accounting for agreements for the construction of real estate by the seller under AASB 111 ‘ Construction Contracts’ or AASB 118 ‘ Revenue’ and on the timing of revenue recognition. The Group does not expect the standard to have any material effect on the financial results.

AASB Interpretation 16 ‘Hedges of a Net Investment in a Foreign Operation’ .

AASB Interpretation 16 is applicable to annual reporting periods beginning on or after 1 October 2008. The standard clarifies that net investment hedging can only be applied when the net assets of the foreign operation are recognised in the entity’s consolidated financial statements. The Group does not expect the standard to have any material effect on the financial results of the Group.

AASB 2008-5 ‘Amendments to Australian Accounting Standards arising from the Annual Improvements Project’ and AASB 2008-6 ‘Further Amendments to Australian Accounting Standards arising from the Annual Improvements Process’ . AASB 2008-5 and AASB 2008-6 are applicable to annual reporting periods beginning on or after 1 January 2009 and 1 July 2009 respectively. The standards amend several AASBs terms of accounting recognition, measurement and presentation. The potential effect of AASB 2008-5 and AASB 2008-6 on the Group’s financial statements is yet to be determined.
– AASB 2008-7 ‘Amendments to Australian Accounting Standard – Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate’ . AASB 2008-7 is applicable to annual reporting periods beginning on or after 1 January 2009. The standard changes the recognition and measurement of dividend receipts as revenue, even if paid out of pre-acquisition, profits and addresses the accounting for a newly formed parent entity in the separate financial statements. The potential effect of AASB 2008-7 on the Group’s financial results is yet to be determined.

AASB Interpretation 17 ‘Distributions of Non Cash Assets to Owners’ and AASB 2008-13 ‘Amendments to Australian Accounting Standards arising from AASB Interpretation 17 Distributions of Non Cash Assets to Owners’ . AASB Interpretation 17 and AASB 2008-13 are applicable to annual reporting periods beginning on or after 1 July 2009. The standards provide guidance in respect of measuring dividends paid by distributing non cash assets to the entity’s shareholders. The potential effect of AASB Interpretation 17 and 2008-13 on the financial statements is yet to be determined.

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Notes to the Consolidated Financial Statements continued

1. Significant Accounting Policies continued

1.3 New Accounting Standards continued

AASB Interpretation 18 ‘Transfers of Assets from Customers’ .

AASB Interpretation 18 is applicable to annual reporting periods beginning on or after 1 July 2009. The standard provides guidance on the accounting for contributions from customers in the form of transfers of property, plant and equipment. The Group does not expect the standard to have any material effect on the financial results.

– ‘Amendments to IFRS 2 Share Based Payments – Vesting Conditions and Cancellations’ . Amendments to IFRS 2 is applicable to annual reporting periods beginning on or after 1 January 2009. The amendments clarify that vesting conditions are service conditions and performance conditions only and specifies that all cancellations, whether by the entity or by other parties, should receive the same accounting treatment. The Group does not expect the amendments to have any material effect on the financial results.

1.4 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

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.

1.5 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. 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.

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

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2009 Annual Consolidated Financial Report Lend Lease Corporation

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.

1.6 Impairment

The carrying amounts of the Group’s assets, investment properties (see Note 1.8.), inventories (see Note 1.14.) and deferred tax assets (see Note 1.5.) 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 Note 1.12.). 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.

1.7 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 financial assets 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.

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Notes to the Consolidated Financial Statements continued

1. Significant Accounting Policies continued

1.7 Investments continued

Recognition and Measurement Criteria

Purchases and sales of investments are recognised on trade date – the date on which the Group commits to purchase or sell the asset. Investments are initially recognised at fair value plus transaction costs for all financial assets not carried at fair value through profit or loss. Investments are 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.

1.8 Investment Properties

Investment properties are stated at fair value based on periodic, but at least triennial, valuations by qualified 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 Note 1.4. When an item of owner occupied property, plant and equipment (see Note 1.15.) 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 immediately in the income statement.

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.

1.9 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 (including assets that form part of the net investment in 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 are 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.

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2009 Annual Consolidated Financial Report Lend Lease Corporation

Refer to Note 1.7. for analysis of recognition and measurement criteria of investments classified and measured at ‘fair value through profit or loss’.

1.10 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.

When the Group’s share of losses exceeds the carrying amount of the joint venture (including assets that form part of the net investment in the joint venture), 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 joint venture.

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.

Investments held by Lend Lease Ventures’ investment portfolio are carried at fair value even though the Group may have joint control over those entities. This accounting is permitted by AASB 131 ‘Interests in Joint Ventures’ 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.

1.11 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.

1.12 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.

1.13 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.

1.14 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 balance date 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 Note 1.8., 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.

1.15 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 Note 1.6.). 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.

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Notes to the Consolidated Financial Statements continued

1. Significant Accounting Policies continued

1.15 Property, Plant and Equipment continued

Leased Assets

Leases in which the Group assumes substantially all the risks and rewards of ownership are classified as finance leases. Plant and equipment acquired by way of finance lease is stated at an amount equal to the lower of its fair value and the present value of the minimum lease payments at inception of the lease, less accumulated depreciation and impairment losses (see Note 1.6.).

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

Subsequent Expenditure

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

Depreciation

Depreciation is charged to the income statement on a 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 10 years, furniture and fittings over 15 years, motor vehicles over eight years and computer equipment over three years. Land is not depreciated.

1.16 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 programs 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).

1.17 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 Note 1.6.). 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 10 years. The recoverable amount of other 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.

1.18 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, were recognised. In respect of actuarial gains and losses that have arisen 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.

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2009 Annual Consolidated Financial Report Lend Lease Corporation

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.

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

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

1.19 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 Note 1.23.) and the initial fair value less accumulated amortisation. Fair value is determined using a probability weighted discounted cash flow approach.

1.20 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.

119

Notes to the Consolidated Financial Statements continued

1. Significant Accounting Policies continued

1.21 Foreign Currency Translation

Functional and Presentation Currency

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

Transactions and Balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains or losses resulting from the settlement of such transactions and from the translation at year end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement, except when deferred in equity as qualifying cash flow hedges and qualifying net investment hedges in foreign operations.

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); and
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. 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.

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.

1.22 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.

1.23 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.

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2009 Annual Consolidated Financial Report Lend Lease Corporation

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.

1.24 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. 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.

1.25 Earnings Per Share

Basic earnings per share (EPS) is determined by dividing profit/(loss) 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 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/ (loss) 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.

1.26 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.

1.27 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.

1.28 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.

1.29 Service Concession Arrangements (SCA) (Private Financing Initiatives and Public Private Partnerships)

The Group equity accounts its investment in project companies with SCAs. In the project company holding the SCA AASB Interpretation 12 ‘Service Concession Arrangements’ has been adopted retrospectively for the first time this year. The consideration receivable in respect of construction and services in the operational phase of the SCA is accounted for as a ‘loan or receivable’ and measured at amortised cost. Revenue arising from services provided will be recognised based on the fair value of each service provided. Borrowing costs are now required to be expensed rather than capitalised. Lifecycle costs will now be expensed as incurred rather than provided for as underlying services are provided.

The method by which the Group equity accounts its investment in each project company holding the SCA has not changed.

The retrospective adoption of AASB Interpretation 12 impacted the following:

Retained earnings: As at 1 July 2007 A$68.2 million decrease; 12 months ended 30 June 2008 A$11.2 million decrease;
Hedging reserve: As at 1 July 2007 A$15.3 million increase; 30 June 2008 A$8.7 million decrease; Movements attributable to effective cash flow hedges taken to equity (net of tax) and the effect of foreign exchange rates for 12 months ended 30 June 2008 have been adjusted to A$(12.6) million and A$0.4 million respectively;
Foreign currency translation reserve: As at 1 July 2007 A$0.1 million decrease; 30 June 2008 A$10.3 million increase;
Movements attributable to the translation and hedging of foreign operations for 12 months ended 30 June 2008 have been adjusted to A$(102.0) million;
Investments accounted for using the equity method: As at 1 July 2007 A$6.7 million decrease; 30 June 2008 A$18.1 million increase;
Non current loans and receivables: As at 1 July 2007 A$26.4 million decrease; 30 June 2008 A$30.4 million decrease;
Current trade and other payables: As at 1 July 2007 A$nil impact; 30 June 2008 A$10.3 million increase;

121

Notes to the Consolidated Financial Statements continued

1. Significant Accounting Policies continued

1.29 Service Concession Arrangements (SCA) (Private Financing Initiatives and Public Private Partnerships) continued

Non current trade and other payables: As at 1 July 2007 A$19.9 million increase; 30 June 2008 A$13.0 million decrease; and
Investment commitments: As at 1 July 2007 A$19.9 million decrease; 30 June 2008 A$nil impact.

Recent industry interpretations relating to initial recognition of deferred tax liabilities on SCAs has resulted in the restatement of the impacts of AASB Interpretation 12 disclosed in the 31 December 2008 Half Year Consolidated Financial Report.

The impact on the Group’s basic and diluted earnings per share for shares on issue was an increase 0.9 cents for the year ended 30 June 2009 (June 2008: decrease 2.8 cents) and earnings per share for shares excluding treasury shares was an increase 0.9 cents for the year ended 30 June 2009 (30 June 2008: decrease 3.0 cents).

1.30 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 15a. ‘Goodwill’ contains information about the assumptions and their risk factors relating to goodwill impairment.

Impairment of Goodwill and Management Agreements

The Group assesses whether goodwill is impaired at least annually in accordance with Note 1.6. 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 is assessed annually in accordance with Note 1.17.

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 Notes 1.8. and 1.14. 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 16g. and 23g. ‘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 1.18. 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 should be consolidated by the Group.

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2009 Annual Consolidated Financial Report Lend Lease Corporation

	Consolidated	Consolidated		Company	Company
	June 2009	June	2008	June 2009	June 2008
	A$m		A$m	A$m	A$m
2. Revenue
a. Revenue from the Sale of
Development Properties	366.8	805.3		–	–
b. Revenue from the Provision of Services
Retail	56.8		55.5
Communities	147.7		86.4
Public Private Partnerships	1,481.6	943.0
Investment Management	53.4		58.8
Project Management and Construction	12,419.5	12,425.8
Total revenue from theprovision of services	14,159.0	13,569.5		–	–
c. Finance Revenue
Interest Income
Related party
Consolidated entities					0.8
Associates and joint venture entities	34.8		21.4
Other corporations	55.0		65.7	2.4	3.5
Interest discounting	89.8 12.3		87.1 9.8	2.4	4.3
Total fnance revenue1	102.1		96.9	2.4	4.3
d. Other Revenue
Dividend Income
Related party
Consolidated entities				71.8	674.6
Associates and joint venture entities			1.1
Other corporations	1.4		48.8	1.0	0.1
	1.4		49.9	72.8	674.7
Other
Rental income	71.3		76.0
Hotel revenue	43.8		52.0
Distributions received	14.3		15.1
Related party
Consolidated entities – corporate management fees				47.6	41.6
Consolidated entities – guarantee fees				14.4	13.4
Other	26.3		13.2		0.1
	155.7	156.3		62.0	55.1
Total other revenue	157.1	206.2		134.8	729.8
Total revenue	14,785.0	14,677.9		137.2	734.1

1 A$3.3 million relates to financial assets classified as fair value through profit or loss (June 2008: A$0.9 million).

123

Notes to the Consolidated Financial Statements continued

Consolidated	Consolidated		Company	Company
June 2009 A$m	June	2008 A$m	June 2009 A$m	June	2008 A$m
3. Other Income
Net gain on disposal/redemption of available for sale fnancial assets		67.0
Net gain on disposal of other assets and liabilities 57.2		0.2
Fair value gain on held to maturity negotiable instruments 0.4
Fair value gain on derivative contracts held for trading
(excluding foreign exchange derivatives)		3.7
Related party
Consolidated entities – amortisation of fnancial
guarantee contract liabilities			3.6		6.0
Other			1.1
Total other income 57.6		70.9	4.7		6.0
4. Finance Costs
Finance costs
Non interest fnance costs 4.2		3.6	–		–
Interest fnance costs
Related party
Associates and joint venture entities 0.7 Other corporations 94.9		1.4 76.7
_Less:_Capitalised interest fnance costs		(1.3)
95.6		76.8	–		–
Interest discounting 0.4		5.6	–		–
Total fnance costs1 100.2		86.0	–		–
5. Other Operating (Income)
and Expenses
Loss/(proft) before income tax has been determined after:
Depreciation and amortisation
Depreciation of property, plant and equipment 25.0		24.0	0.1		0.1
_Less:_Capitalised depreciation (1.4)		(2.1)
Amortisation of management agreements 4.0		2.9
Amortisation of other intangibles 5.0		2.2
Total depreciation and amortisation 32.6		27.0	0.1		0.1
Net loss on sale ofproperty, plant and equipment –		0.3	–		–
Operating lease expense
Operating lease rental expense 66.9		52.6
Operatinglease equipment expense 4.9		5.9
Total operatinglease expense 71.8		58.5	–		–
Employee beneft expenses 1,617.1	1,432.7		36.9		24.5
Superannuation accumulationplan expense 20.6		19.3	1.2		1.2

1 No interest costs were incurred on financial assets or liabilities classified as fair value through profit or loss.

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2009 Annual Consolidated Financial Report Lend Lease Corporation

			Consolidated	Consolidated	Company	Company
			June 2009	June 2008	June 2009	June	2008
		Note	A$m	A$m	A$m		A$m
Net defned beneft plan (income)/expense
impacting all business segments is as follows:
Current service cost			28.0	38.9	6.3		5.8
Interest on obligation			49.9	45.8	6.7		6.0
Expected return on plan assets			(48.2)	(53.4)	(8.2)		(9.0)
Past service cost			0.2	0.4	0.2		0.4
Curtailment gain			(55.3)
Actuarialgain recognised				(2.4)			(2.4)
Total net defned beneft plan
(income)/expense	16d,	23d	(25.4)	29.3	5.0		0.8
Net foreign exchange loss/(gain)			16.9	(3.0)	0.3		1.8
Fair value loss on remeasurement of
investmentproperties		12	62.2	38.2	–		–
Net fair value loss on equityderivative swaps			48.4	–	–		–
Bad debt expense			1.8	0.4	–		–
Expenses include impairments/provisions
raised/(written back) relating to:
Loans and receivables
Related party – consolidated entities					70.0
Related party – associates and joint venture	entities1		42.8
Other			27.6	11.4
Property inventories			230.9	126.7
Investments accounted for using the equity method2			67.2	3.0
Impairment of investment in Group entities at cost					25.8
Property, plant and equipment			20.3	0.4
Other fnancial assets			16.5	2.8
Other intangibles			0.6
Investment properties			0.3
Goodwill			252.9
Employee benefts			42.8	35.1	1.2		2.0
Maintenance and warranty			(6.3)	(19.0)
Restructure (including employee terminations)			91.0	(3.3)
Otherprovisions			21.2	14.6	2.7		13.2

1 June 2009 relates to the Communities segment.

2 Impairment of A$67.2 million includes A$(1.2) million impairment reversal.

	Consolidated	Consolidated		Company	Company
	June 2009	June	2008	June 2009	June 2008
	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	7,398	6,816		1,188		1,573
Other Services
International assignees tax services	119		26
Tax services	4		58
Other audit services	259		137
Other services	11		15
	393		236	–		–

125

Notes to the Consolidated Financial Statements continued

Consolidated	Consolidated	Company	Company
June 2009 A$m	June 2008 A$m	June 2009 A$m	June 2008 A$m
6. Taxation a. Income Tax (Beneft)/Expense Recognised in the Income Statement Current Tax (Beneft)/Expense Current year 81.7	91.9	(0.3)		(9.7)
Adjustments for prior years 0.2	(18.5)	2.1		(1.2)
Benefts of tax losses recognised (21.3)	(7.8)			(6.6)
60.6	65.6	1.8		(17.5)
Deferred Tax (Beneft)/Expense Origination and reversal of temporary differences (127.8) Reduction in tax rate	(4.5) 1.4	5.7		2.0
Total income tax(beneft)/expense (67.2)	62.5	7.5		(15.5)
Reconciliation of Income Tax (Beneft)/Expense (Loss)/proft before tax (733.1)	310.3	(28.5)		653.9
Income tax using the domestic corporation tax rate (30.0%) (219.9)	93.1	(8.6)		196.2
Non assessable dividends (0.5)	(14.9)	(21.8)		(202.4)
Non assessable income (3.6) (Loss)/proft accounted for using the equity method (7.3) Non allowable expenses 98.8	(8.4) 4.4 12.2	4.0		2.0
Net recovery of tax losses (18.2)	(17.5)	4.1		(6.5)
Write off/(recovery) of tax temporary differences 103.4	12.1	27.0		(7.1)
Temporary differences recognised/recovered (19.0) Variation in tax rates (2.9) Income tax expense relating to wholly owned Australian subsidiaries	(8.9) 8.7	79.4		111.2
Recovery of income tax expense from wholly owned Australian subsidiaries		(79.4)		(111.2)
Other 1.8	0.2	0.7		3.5
Under/(over) provided inprioryears 0.2	(18.5)	2.1		(1.2)
(67.2)	62.5	7.5		(15.5)
Deferred Tax Recognised Directly in Equity Relating to: Fair value revaluation reserve (7.9) Hedging reserve (3.2) Foreign currency translation reserve on equityaccounted investment 3.4	(15.4) 1.7	0.1		(0.2)
(7.7)	(13.7)	0.1		(0.2)
b.Current Tax Liabilities 27.7	53.7	34.2		74.6

Current tax liabilities represent the amount of income taxes payable in respect of current and prior financial years where the amount of income taxes payable exceeds payments to date.

126

2009 Annual Consolidated Financial Report Lend Lease Corporation

c. Deferred Tax Assets and Liabilities

	Consolidated	Consolidated			Company	Company
June	2009	June	2008	June	2009	June	2008
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 21.4 Inventories 45.9 Other fnancial assets 12.1	(11.4) (199.5) (38.1)	11.4 25.3 0.6	(30.4) (176.0) (38.0)		(0.4)		(0.3)
Other assets Investments accounted for using the equity method 19.7 Investment properties Property, plant and equipment 22.8 Intangible assets 0.1 Defned beneft plan asset	(0.7) (165.5) (0.4) (9.0)	4.4 12.8	(171.1) (2.0) (0.3) (8.6)		(9.0)		(8.6)
Trade and other payables 96.9 Provisions 69.1 Other fnancial and non fnancial liabilities 11.7 Defned beneft plan liability 12.8 Unused revenue tax losses recognised 169.8 Items with a tax base but no carryingvalue 38.0	(0.1) (42.7)	72.4 66.2 4.1 33.1 112.0 35.4	(0.6) (0.1) (17.5)	12.4 13.1 1.2	(1.7)	14.2 13.1 4.5	(1.4)
Total deferred tax assets/(liabilities) 520.3	(467.4)	377.7	(444.6)	26.7	(11.1)	31.8	(10.3)
Deferred tax set off (311.1)	311.1	(256.2)	256.2	(11.1)	11.1	(10.3)	10.3
Net deferred tax assets/(liabilities) 209.2	(156.3)	121.5	(188.4)	15.6	–	21.5	–

127

Notes to the Consolidated Financial Statements continued

6. 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	2008 A$m	in Income A$m	in Equity A$m	FX/Other A$m	2009 A$m	2007 A$m	in Income A$m	in Equity A$m	FX/Other A$m	2008 A$m
Recognised Deferred
Tax Assets and Liabilities
continued
Movement in temporary differences during the fnancial year:
Loans and receivables	(19.0)	27.9	0.3	0.8	10.0	(10.8)	(7.3)	(0.4)	(0.5)	(19.0)
Inventories	(150.7)	15.2		(18.1)	(153.6)	(122.5)	(42.1)		13.9	(150.7)
Other fnancial assets	(37.4)	4.7	7.9	(1.2)	(26.0)	(47.5)	(6.2)	15.4	0.9	(37.4)
Other assets		(0.7)			(0.7)	(20.6)	20.6
Investments accounted for using
the equity method	(166.7)	48.4	(0.5)	(27.0)	(145.8)	(185.0)	(4.9)	(1.3)	24.5	(166.7)
Investment properties	(2.0)	2.0				(2.9)	0.8		0.1	(2.0)
Property, plant and equipment	12.5	9.4		0.5	22.4	16.8	(2.2)		(2.1)	12.5
Intangible assets		0.1			0.1
Defned beneft plan asset	(8.6)	(0.4)			(9.0)	(6.9)	(1.7)			(8.6)
Trade and other payables	71.8	12.9		12.1	96.8	74.8	1.7		(4.7)	71.8
Provisions	66.2	6.2		(3.3)	69.1	63.1	7.3		(4.2)	66.2
Other fnancial and non fnancial
liabilities	4.0	7.1		0.6	11.7	4.8	(0.5)		(0.3)	4.0
Defned beneft plan liability	33.1	(21.2)		0.9	12.8	43.9	(5.3)		(5.5)	33.1
Unused revenue tax losses
recognised1	112.0	44.1		13.7	169.8	72.1	51.9		(12.0)	112.0
Items with a tax base but
no carryingvalue	17.9	(27.9)		5.3	(4.7)	32.1	(9.0)		(5.2)	17.9
Total deferred tax assets/(liabilities)	(66.9)	127.8	7.7	(15.7)	52.9	(88.6)	3.1	13.7	4.9	(66.9)
Company
Movement in temporary differences during the fnancial year:
Loans and receivables						(0.2)	0.2
Other fnancial assets	(0.3)		(0.1)		(0.4)	(0.5)		0.2		(0.3)
Defned beneft plan asset	(8.6)	(0.4)			(9.0)	(6.9)	(1.7)			(8.6)
Trade and other payables	14.2	(1.8)			12.4	18.2	(4.0)			14.2
Provisions	13.1				13.1	13.8	(0.7)			13.1
Items with a tax base but
no carryingvalue	3.1	(3.5)		(0.1)	(0.5)	(1.1)	4.2			3.1
Total deferred tax assets/(liabilities)	21.5	(5.7)	(0.1)	(0.1)	15.6	23.3	(2.0)	0.2	–	21.5

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

	Consolidated	Consolidated		Company	Company
	June 2009	June	2008	June 2009	June	2008
	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	70.4		92.1	6.0		9.1
Revenue losses	108.0		97.6
Deductible temporarydifferences	165.3		57.6
Total unrecognised deferred tax assets	343.7	247.3		6.0		9.1

Temporary differences associated with investments in subsidiaries within the Company have not been recognised. The unrecognised deferred tax asset of A$343.7 million includes A$42.0 million that will expire by 2027.

128

2009 Annual Consolidated Financial Report Lend Lease Corporation

		Franked
		Amount	Company
	Cents	Per Share	June 2009	June 2008
	Per Share	%	A$m	A$m
7. Dividends and Earnings Per Share
a. Dividends1
Interim Dividend
December 2008 – paid 1 April 2009	25	60	113.5
December 2007 – paid 26 March 2008	43	40		172.5
Final Dividend
June 2009 – declared subsequent to reporting date
(payable 25 September 2009)2	16	100	73.2
June 2008 –paid 26 September 2008	34	45		136.4
			186.7	308.9

1 Includes dividends paid on treasury shares. Refer to Note 26. ‘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 2009 as it was declared after the end of the financial period.

Dividend Franking

The final dividend of 16 cents per share declared since 30 June 2009 will be 100% franked. The interim dividend paid on 1 April 2009 (25 cents per share) was 60% franked.

The dividend franking account balance at 30 June 2009 is A$98.7 million based on a 30% tax rate (30 June 2008: A$86.4 million). This is calculated after adjusting for franking credits which will arise from the payment of income tax provided in the financial statements and tax losses utilised in the current financial year. It excludes the A$31.4 million (June 2008: A$26.3 million) franking debit impact of the proposed dividend of A$73.2 million (June 2008: A$136.4 million).

A$73.2 million (June 2008: A$136.4 million).
			Consolidated
		June	2009	June	2008
		Shares		Shares
		Excluding		Excluding
		Treasury	Shares	Treasury	Shares
		Shares	on Issue	Shares	on Issue
b. Basic/Diluted Earnings
Per Share (EPS)
(Loss)/proft attributable to members of
Lend Lease Corporation Limited used in
calculatingbasic/diluted EPS	A$m	(653.6)	(653.6)	254.2	254.2
Weighted average number of
ordinaryshares	m	396.9	424.1	370.8	401.1
Basic/diluted EPS	cents	(164.7)	(154.1)	68.6	63.4

	Consolidated	Consolidated	Company	Company
	June 2009	June 2008	June 2009	June	2008
	A$m	A$m	A$m		A$m
8. Cash and Cash Equivalents
Cash	289.3	281.9			18.5
Short term investments	831.5	560.9
Total cash and cash equivalents	1,120.8	842.8	–		18.5

Short term investments earn variable rates of interest which averaged 3.4% per annum during the year ended 30 June 2009 (30 June 2008: 6.1%).

Negotiable instruments with a maturity greater than three months but less than 12 months (June 2009: A$70.8 million; June 2008: A$28.5 million) are classified as ‘Fair Value Through Profit or Loss’ and ‘Held to Maturity’ (refer to Note 13. ‘Other Financial Assets’). These negotiable instruments have an average maturity of seven months.

129

Notes to the Consolidated Financial Statements continued

Consolidated	Consolidated	Company	Company
June 2009 A$m	June 2008 A$m	June 2009 A$m	June	2008 A$m
9. Loans and Receivables Current – Measured at Amortised Cost Trade debtors 1,464.9 _Less:_Impairment (39.2)	1,555.8 (19.3)
1,425.7	1,536.5	–		–
Related party Consolidated entities1		3,630.0	3,152.3
Associates and joint venture entities 106.8 _Less:_Impairment (15.5) Managed property funds 22.3 Retentions 410.5 Other receivables 317.8 _Less:_Impairment (2.6)	77.8 29.4 442.3 257.2 (2.3)	(70.0)1 0.8		2.3
2,265.0	2,340.9	3,560.8	3,154.6
Non Current – Measured at Amortised Cost Loans to employees 0.8 Related party Consolidated entities	0.7	66.4		63.5
Associates and joint venture entities2 526.0 _Less:_Impairment (165.5) Retentions 68.1 Other receivables 66.2 _Less:_Impairment (0.5)	326.9 (72.8) 96.5 103.7 (0.2)			0.1
495.1	454.8	66.4		63.6
Total loans and receivables 2,760.1	2,795.7	3,627.2	3,218.2

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. The carrying values of the Company’s investments in consolidated entities and intercompany receivables have been reviewed for indicators of impairment and impairment recognised where appropriate.

2 Includes redeemable convertible notes issued by Lend Lease Primelife Limited, including embedded derivatives measured at fair value. Refer to Note 36. ‘Non Key Management Personnel Related Party Information’ for further details.

During the financial year ended 30 June 2009, the Group earned fee income of A$0.6 million (30 June 2008: A$3.0 million) relating to loans and receivables.

The ageing of trade debtors as at the reporting date is: current A$1,170.6 million (30 June 2008: A$1,251.6 million); past due A$294.3 million (30 June 2008: A$304.2 million) of which A$255.1 million has not been impaired (June 2008: A$284.9 million). ‘Past due’ is defined under accounting standards to mean any amount outstanding for one or more days after the contractual due date. Of the total trade debtors, 9.5% (30 June 2008: 6.2%) are aged greater than 90 days. Other than trade debtors, no other loans and receivables are considered past due at 30 June 2009 (30 June 2008: A$nil).

At 30 June 2009 current other receivables includes A$57.5 million of cash that was pledged as collateral against bank letter of credit facilities for equity commitments (June 2008: A$nil).

	Consolidated	Consolidated		Company	Company
	June 2009	June	20081	June 2009	June	2008
	A$m		A$m	A$m		A$m
Impairment
Carrying amount at beginning of fnancial year	94.6		56.8
Bad and doubtful debts impairment loss net
of provisions raised	70.4		11.4	70.0
Other movements (including foreign
exchange movements)2	58.3		26.4
Carryingamount at end of fnancialyear	223.3		94.6	70.0		–
Total impairment as a percentage of total loans
and receivables	7.5%	3.3%		1.9%		–

1 June 2008 has been adjusted to reflect the impact of adopting for the first time AASB Interpretation 12 ‘Service Concession Arrangements’ (refer to Note 1.29. ‘Service Concession Arrangements’).

2 Other movements primarily relates to the application of joint venture losses against loan stock interests held by Lend Lease in relation to these joint ventures.

130

2009 Annual Consolidated Financial Report Lend Lease Corporation

The credit quality of all loans and receivables, including those neither past due nor impaired, is assessed and monitored on an ongoing basis.

The increase in the impairment provision during the financial year is a result of deteriorating economic and market conditions which the Group considers will affect the credit worthiness of certain entities. The impairment provision relates to specific loans and receivables that have been identified as being impaired, including related party loans where the Group’s interest in a development was via an investment accounted for using the equity method.

During the financial year ended 30 June 2009, there were no financial assets renegotiated (30 June 2008: A$76.5 million).

(30 June 2008: A$76.5 million).
		Consolidated		Company
		June 2009	June 2008	June 2009	June	2008
	Note	A$m	A$m	A$m		A$m
10. Inventories
Current
Development properties at the lower
of cost and net realisable value	10a	327.4	437.2
Construction work inprogress	10b	237.5	335.9
Total current		564.9	773.1	–		–
Non Current
Development properties at the lower
of cost and net realisable value	10a	1,201.2	1,332.3
Total inventories		1,766.1	2,105.4	–		–
a. Development Properties
(Completed and Work in
Progress)
Total development properties held for
sale comprises:
Bluewater, Kent		506.2	520.7
Urban Communities, Australia		491.4	448.8
Urban Communities (Crosby), UK		244.9	386.7
Victoria Harbour, Melbourne		107.4	96.2
Hyatt Coolum, Sunshine Coast		74.0	57.3
Senior Living Projects, Australia		50.6	51.1
Stratford, UK			95.8
Other		54.1	112.9
Total developmentproperties		1,528.6	1,769.5	–		–
b. Construction Work
in Progress
Construction work in progress comprises:
Contract costs incurred to date		60,859.7	49,311.9
Proft recognised to date		2,543.5	1,977.1
_Less:_Progress billings received and		63,403.2	51,289.0	–		–
receivable on completed contracts		(64,522.6)	(52,110.4)
Net construction work inprogress		(1,119.4)	(821.4)	–		–
Amounts due from customers –
inventories1		237.5	335.9
Amounts due to customers –
tradepayables2	18	(1,356.9)	(1,157.3)
		(1,119.4)	(821.4)	–		–
Advances on construction projects
in progress included in trade and
other payables		810.6	920.2	–		–
Retentions on construction projects
included inprogress billings		633.9	627.7	–		–

1 Costs in Excess (CIE): Represents construction contracts where costs incurred to date on a project (together with foreseeable losses if applicable) exceed total progress billings issued to clients.
2 Billings in Excess (BIE): Represents construction contracts where the total progress billings issued to clients (together with foreseeable losses if applicable) on a project exceed the costs incurred to date plus recognised profit on the contract.

131

Notes to the	11. Investments Accounted for Using the Equity Method1	11. Investments Accounted for Using the Equity Method1	11. Investments Accounted for Using the Equity Method1	11. Investments Accounted for Using the Equity Method1	11. Investments Accounted for Using the Equity Method1	11. Investments Accounted for Using the Equity Method1	11. Investments Accounted for Using the Equity Method1
Consolidated
Financial
Statements	Interest		Consolidated Share of (Loss)/Proft After			Tax		Consolidated Net Book Value
continued			June	2009	June	20082	June	2009	June	20082
	June	June	Asso‑	Joint	Asso‑	Joint	Asso‑	Joint	Asso‑	Joint
	2009	2008	ciates	Ventures	ciates	Ventures	ciates	Ventures	ciates	Ventures
	%	%	A$m	A$m	A$m	A$m	A$m	A$m	A$m	A$m
Retail
King of Prussia	50.0	50.0		(49.2)		20.5		427.0		421.7
Performance Retail Limited
Partnership	33.3	33.3	(24.5)		(6.3)		48.2		80.1
CDR JV Ltd
(313@somerset, Singapore)	25.0	25.0					56.2		43.6
Preston Tithebarn Unit Trust 50.0		50.0				1.3		38.9		33.1
Warrington Retail Limited Partnership 50.0		50.0		(70.1)		(22.6)		26.5		90.8
Other			0.1		0.1		7.2		6.6
			(24.4)	(119.3)	(6.2)	(0.8)	111.6	492.4	130.3	545.6
Communities
Lend Lease Primelife Limited (LLP)3 43.2			4.3				196.8
Caroline Springs Joint Venture 50.0		50.0		12.5		15.1		23.7		23.9
Mawson Lakes Economic
Development Project	50.0	50.0		6.0		10.7		7.5		14.0
Pyrmont Trust (Jacksons Landing) 50.0		50.0		3.4		(0.4)		14.5		18.9
Casey 2 Joint Venture
(Springbank Rise)	50.0							15.2
Greenwich Peninsula
N0204 BKA Unit Trust	50.0	50.0		(27.6)4
Greenwich Peninsula
N0204 BKB Unit Trust	50.0	50.0		(31.5)4
Other			(1.4)	6.4	(2.7)	9.9		24.2	1.4	35.5
			2.9	(30.8)	(2.7)	35.3	196.8	85.1	1.4	92.3
Public Private Partnerships5
Catalyst Healthcare (Romford)
Holdings Ltd	50.0	50.0		2.1		2.3		7.8		5.9
Catalyst Healthcare (Manchester)
Holdings Ltd	50.0	50.0		4.1		3.5		12.6		8.4
Other			1.5	8.7	1.2	1.2	0.6		0.7	14.3
			1.5	14.9	1.2	7.0	0.6	20.4	0.7	28.6
Investment Management
Lend Lease Overgate Partnership 30.7		30.7	(45.8)		(1.2)		62.7		114.0
Asia Pacifc Investment
Company No. 2 Limited	21.1	21.1	(4.9)		27.0		108.8		107.1
Lend Lease Communities Fund 1 20.8		20.8	(0.5)		0.3		17.9		18.0
Other			(0.4)		(0.1)		4.7		6.1
			(51.6)	–	26.0	–	194.1	–	245.2	–
Project Management
and Construction
Majadahonda Hospital	25.0	25.0		3.2		4.2		17.5		14.8
Phoenix Constructors	15.0	15.0		6.0		1.7		10.9		4.2
Other			7.3	29.8	5.3	6.6	0.5	13.1	2.9	14.8
			7.3	39.0	5.3	12.5	0.5	41.5	2.9	33.8
Total			(64.3)	(96.2)	23.6	54.0	503.6	639.4	380.5	700.3
_Less:_Impairment							(18.1)	(65.5)	(5.4)	(16.8)
			(64.3)	(96.2)	23.6	54.0	485.5	573.9	375.1	683.5

1 There have been reclassifications between associates and joint ventures in the period. Comparative information has also been reclassified.
2 June 2008 has been adjusted to reflect the impact of adopting for the first time AASB Interpretation 12 ‘Service Concession Arrangements’ (refer Note 1.29. ‘Service Concession Arrangements’).

3 The security price of LLP as at 30 June 2009, as quoted on the Australian Securities Exchange, was 9.2 cents. This equates to a market value of A$38.4 million for Lend Lease’s 43.2% interest in LLP. The carrying value of Lend Lease’s interest of A$196.8 million is considered recoverable on a value in use basis after considering the following: i The valuation of LLP’s net assets (as reflected in their financial report as at 30 June 2009) of 54.7 cents per security. ii Reviewing the appropriateness of the methodology to determine the valuations adopted by LLP and the level of support through independent valuations. iii In addition, Lend Lease carried out a seperate valuation of LLP using the following principles:

– Retirement villages: pre tax discount rate of 13.0% to 13.25%, growth rate of 3.75% to 4.0% per annum, average length of stay of six to 10 years.

– Aged care: the valuation of aged care was supported by recent transactions of the average price per bed licence.

4 Joint venture losses recognised during the year have been primarily applied as an impairment against loan stock interests held in these joint ventures. Refer Note 9. ‘Loans and Receivables’.

5 Lend Lease provides service concession arrangements, originating through PPPs in the areas of healthcare, education, waste 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, when necessary, overhaul or replace major items of plant and equipment related to the assets, with payment obtained through periodic drawdowns from the relevant government authorities.

132 2009 Annual Consolidated Financial Report Lend Lease Corporation

		Consolidated	Consolidated
	June 2009			June 20081
Asso‑	Joint		Asso‑	Joint
ciates	Ventures	Total	ciates	Ventures	Total
A$m	A$m	A$m	A$m	A$m	A$m
Lend Lease’s Share of Results Revenue 162.9	1,328.9	1,491.8	96.9	1,131.1	1,228.0
Fair value revaluations2 (90.5)	(68.8)	(159.3)	6.4	(31.1)	(24.7)
Expenses (172.3)	(1,284.8)	(1,457.1)	(79.8)	(1,019.4)	(1,099.2)
(Loss)/proft before tax (99.9)	(24.7)	(124.6)	23.5	80.6	104.1
Income tax(expense)/beneft3 0.5	(7.3)	(6.8)	0.1	(28.8)	(28.7)
(Loss)/proft after tax (99.4)	(32.0)	(131.4)	23.6	51.8	75.4
Adjustment due to differences in accounting policies4	(83.7)	(83.7)		(6.9)	(6.9)
Unrecognised share of losses	14.4	14.4		8.9	8.9
Fair value adjustments 35.6	(0.9)	34.7		(0.9)	(0.9)
Other (0.5)	6.0	5.5		1.1	1.1
Share of(loss)/proft (64.3)	(96.2)	(160.5)	23.6	54.0	77.6
Movements in Carrying Amounts Carrying amount at beginning of fnancial year 375.1	683.5	1,058.6	427.5	699.0	1,126.5
Adjustment on adoption of AASB Interpretation 12				(6.7)	(6.7)
Investment acquired during fnancial year 202.8		202.8		34.0	34.0
Investment disposed of during fnancial year (2.2)		(2.2)		(3.5)	(3.5)
Contributions 9.2	26.4	35.6	5.0	14.6	19.6
Capital redemptions (2.0)	(31.7)	(33.7)	(1.6)	(26.4)	(28.0)
Share of (loss)/proft (64.3)	(96.2)	(160.5)	23.6	54.0	77.6
Distributions received (23.2)	(68.5)	(91.7)	(26.2)	(40.7)	(66.9)
Net impairment provision raised (12.2)	(55.0)	(67.2)		(3.0)	(3.0)
Other adjustments (including effect of foreign exchange rate movements)5 2.3	115.4	117.7	(53.2)	(37.8)	(91.0)
Carryingamount at end of fnancialyear 485.5	573.9	1,059.4	375.1	683.5	1,058.6

1 June 2008 has been adjusted to reflect the impact of adopting for the first time AASB Interpretation 12 ‘Service Concession Arrangements’ (refer Note 1.29. ‘Service Concession Arrangements’).

2 Reflects investment property fair value revaluations. Associates: Lend Lease Overgate Partnership of A$50.7 million loss (June 2008: A$6.8 million loss); Performance Retail Limited Partnership of A$28.2 million loss (June 2008: A$9.5 million loss); Asia Pacific Investment Company No. 2 Limited of A$11.6 million loss (June 2008: A$22.7 million gain). Joint Ventures: Warrington Retail Limited Partnership A$68.8 million loss (June 2008: A$31.1 million loss).

3 Lend Lease’s share of tax relating to the majority of investments accounted for using the equity method is reflected in the Lend Lease Group’s current tax expense (refer to Note 6a. ‘Income Tax Expense’).

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

5 Primarily relates to foreign exchange movements of A$98.0 million (June 2008: A$105.5 million).

133

Notes to the Consolidated Financial Statements continued

11. Investments Accounted for Using the Equity Method continued

			Consolidated	Consolidated
		June 2009			June 20081
	Asso‑ ciates	Joint Ventures	Total	Asso‑ ciates	Joint Ventures	Total
	A$m	A$m	A$m	A$m	A$m	A$m
Lend Lease’s Share of Balance Sheet
Current assets	292.9	820.2	1,113.1	109.1	895.0	1,004.1
Non current assets	1,650.6	2,431.5	4,082.1	588.6	2,897.1	3,485.7
Total assets	1,943.5	3,251.7	5,195.2	697.7	3,792.1	4,489.8
Current borrowings	320.4	207.7	528.1	8.6	22.6	31.2
Current other liabilities	814.62	420.4	1,235.0	25.8	434.0	459.8
Non current borrowings	214.6	2,273.6	2,488.2	280.6	2,253.0	2,533.6
Non current other liabilities	56.4	365.0	421.4	3.6	891.5	895.1
Total liabilities	1,406.0	3,266.7	4,672.7	318.6	3,601.1	3,919.7
Net assets3	537.5	(15.0)	522.5	379.1	191.0	570.1
Other adjustments
Adjustment due to differences
in accounting policies4		416.4	416.4		414.6	414.6
Fair value adjustments on acquisition		1.6	1.6		2.5	2.5
Goodwill	4.4		4.4	4.5		4.5
Impairment	(18.1)	(65.5)	(83.6)	(5.4)	(16.8)	(22.2)
Unrecognised share of losses	1.2	105.0	106.2		28.6	28.6
Other	(39.5)	131.4	91.9	(3.1)	63.6	60.5
Net assets – adjusted usingthe equitymethod	485.5	573.9	1,059.4	375.1	683.5	1,058.6
Commitments
Share of capital expenditure and lease
commitments contracted but not provided for
and payable as follows:
Due within one year	6.3	1.4	7.7	6.7	0.6	7.3
Due between one and fve years	26.1	6.7	32.8	8.3	4.2	12.5
Due later than fveyears	65.1		65.1

1 June 2008 has been adjusted to reflect the impact of adopting for the first time AASB Interpretation 12 ‘Service Concession Arrangements’ (refer Note 1.29. ‘Service Concession Arrangements’).

2 Primarily relates to LLP liabilities due to retirement village residents which are classified as current under LLP’s contractual arrangements. History shows that they are not expected to be paid within one year.

3 The carrying values of the Group’s investments accounted for using the equity method have been assessed and where appropriate impairment taken against the respective carrying values, including assets that form part of the net investment, such as loan stock.

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

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2009 Annual Consolidated Financial Report Lend Lease Corporation

	Consolidated	Consolidated	Company	Company
	June 2009	June 2008	June 2009	June	2008
	A$m	A$m	A$m		A$m
12. Investment Properties
Senior LivingProperties	–	6.8	–		–
Retail Properties
Chelmsford Meadows Shopping Centre	109.6	169.2
Clarence Dock, Leeds	27.3
Pakenham Place ShoppingCentre	10.8	14.4
	147.7	183.6	–		–
Total investmentproperties	147.7	190.4	–		–
Reconciliations
Reconciliations of the carrying amount for investment
properties are set out below:
Carrying amount at beginning of fnancial year	190.4	256.6
Additions	0.7	1.5
Disposals	(6.8)
Transfer from inventories	28.1
Fair value adjustments	(62.2)	(38.2)
Impairment	(0.3)
Effect of foreign exchange rate movement	(2.2)	(29.5)
Carryingamount at end of fnancialyear	147.7	190.4	–		–

The June 2009 retail property valuations are based on independent assessments. Refer to Note 1.8. ‘Investment Properties’ for the basis of valuation of investment properties.

When determining fair value, capitalisation rates used across the various retail and office assets were between 7.3% and 9.3% for UK properties (June 2008: 5.5% and 7.7%) and 8.0% on the Australian property (June 2008: 6.8%). These rates have been derived from market evidence.

	Consolidated	Consolidated		Company	Company
	June 2009	June	2008	June 2009	June	2008
	A$m		A$m	A$m		A$m
Amounts Recognised in Income Statement
for Investment Properties
Rental income	12.8		13.5
Direct operatingexpenses fromproperties	(4.8)		(2.8)
	8.0		10.7	–		–
Leases as Lessor
The future minimum lease payments receivable from
investment property tenants under non cancellable
operating leases are as follows:
Less than one year	10.6		10.1
Between one and fve years	39.3		33.8
Later than fveyears	39.1		39.8
	89.0		83.7	–		–

135

Notes to the Consolidated Financial Statements continued

Consolidated	Consolidated		Company	Company
June 2009 A$m	June	2008 A$m	June 2009 A$m	June 2008 A$m
13. Other Financial Assets Current a. Measured at Fair Value Available for Sale Lend Lease Global Properties, SICAF 2.8 Lend Lease Primelife Limited (formerly Babcock & Brown Communities Group)		15.5 17.3			17.3
Other 12.3		14.7	1.4		1.2
15.1		47.5	1.4		18.5
Fair Value Through Proft or Loss – Designated at Initial Recognition Negotiable instruments 70.8		23.1	–		–
Derivatives Derivative contracts held for trading 1.3		8.7	–		–
b. Measured at Amortised Cost Held to Maturity Negotiable instruments –		5.4	–		–
Total current 87.2		84.7	1.4		18.5
Non Current a. Measured at Fair Value Available for Sale Australian Prime Property Fund 199.0 Lend Lease Core Plus Fund 45.2 Lend Lease Retail Partnership 43.5 Other 84.3	207.5 38.2 62.7 71.6
372.0	380.0		–		–
Fair Value Through Proft or Loss – Designated at Initial Recognition Unlisted equity investments 12.4 Negotiable instruments		7.0 4.4
12.4		11.4	–		–
b. Investments Held at Cost Shares in consolidated entities			2,047.5	2,041.4
_Less:_Impairment1			(682.5)		(656.7)
–		–	1,365.0	1,384.7
Total non current 384.4	391.4		1,365.0	1,384.7
Total other fnancial assets 471.6	476.1		1,366.4	1,403.2

1 The carrying values of the Company’s investments in consolidated entities and intercompany receivables have been reviewed for indicators of impairment and impairment recognised where appropriate.

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2009 Annual Consolidated Financial Report Lend Lease Corporation

Consolidated	Consolidated	Company	Company
June 2009	June 2008	June 2009	June	2008
A$m	A$m	A$m		A$m
14. Property, Plant and Equipment Land 27.4 Accumulated impairment (7.2)	27.2
20.2	27.2	–		–
Buildings and leasehold improvements at cost 100.4 Accumulated depreciation (34.3)	83.9 (25.6)
66.1	58.3	–		–
Plant and equipment at cost 149.0	137.1	0.4		0.4
Accumulated depreciation and impairment (105.2)	(79.3)	(0.2)		(0.2)
43.8	57.8	0.2		0.2
Assets under construction 3.5 Accumulated impairment (3.5)	1.9
–	1.9	–		–
Totalproperty, plant and equipment 130.1	145.2	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 27.2 Additions 0.3 Impairment (7.2) Effect of foreign exchange rate movements/other (0.1)	9.8 18.2 (0.8)
Carryingamount at end of fnancialyear 20.2	27.2	–		–
Buildings and Leasehold Improvements Carrying amount at beginning of fnancial year2 58.3 Additions 11.1 Disposals (0.4) Disposals of consolidated entities (1.6) Depreciation (6.3) Effect of foreign exchange rate movements/other 5.0	55.5 10.2 (0.1) (5.6) (1.7)
Carryingamount at end of fnancialyear 66.1	58.3	–		–
Plant and Equipment Carrying amount at beginning of fnancial year3 57.8	51.5	0.2		0.2
Additions 22.9	28.6	0.1		0.1
Disposals (1.0) Disposals of consolidated entities (2.2) Depreciation (18.7) Impairment (9.6) Effect of foreign exchange rate movements/other (5.4)	(1.2) (18.4) (0.4) (2.3)	(0.1)		(0.1)
Carryingamount at end of fnancialyear 43.8	57.8	0.2		0.2
Assets in the Course of Construction Carrying amount at beginning of fnancial year 1.9 Additions 1.7 Impairment (3.5) Effect of foreign exchange rate movements/other (0.1)	1.2 0.7
Carryingamount at end of fnancialyear –	1.9	–		–
Total carryingamount 130.1	145.2	0.2		0.2

1 The carrying amount at 1 July 2007 of A$9.8 million represents costs only.

2 The carrying amount at 1 July 2007 of A$55.5 million represents A$81.5 million of costs and A$26.0 million of accumulated depreciation.

3 The carrying amount at 1 July 2007 of A$51.5 million represents A$135.2 million of costs and A$83.7 million of accumulated depreciation.

137

Notes to the Consolidated Financial Statements continued

	Consolidated	Consolidated	Company	Company
	Note June 2009 A$m	June 2008 A$m	June 2009 A$m	June	2008 A$m
15. Intangible Assets
Goodwill	15a 477.1	683.4
Management agreements	15b 28.9	31.4
Other intangibles	15c 20.0	15.3
Total intangible assets	526.0	730.1	–		–
a. Goodwill
Bovis Lend Lease Group	477.1	449.4
Crosby Lend Lease Group	172.4	153.5
Delfn Lend Lease Group	64.7	64.7
Lend Lease Development Group	15.8	15.8
	730.0	683.4	–		–
Accumulated impairment	5 (252.9)	–	–		–
Totalgoodwill	477.1	683.4	–		–
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	449.4	506.7
Effect of foreign exchange rate movements	27.7	(57.3)
Carryingamount at end of fnancialyear	477.1	449.4	–		–
Crosby Lend Lease Group
Carrying amount at beginning of fnancial year	153.5	177.5
Impairment	(172.4)
Effect of foreign exchange rate movements	18.9	(24.0)
Carryingamount at end of fnancialyear	–	153.5	–		–
Delfn Lend Lease Group
Carrying amount at beginning of fnancial year	64.7	64.7
Impairment	(64.7)
Carryingamount at end of fnancialyear	–	64.7	–		–
Lend Lease Development Group
Carrying amount at beginning of fnancial year	15.8	15.8
Impairment	(15.8)
Carryingamount at end of fnancialyear	–	15.8	–		–
Totalgoodwill	477.1	683.4	–		–

Impairment

During the period, the Group assessed the recoverable amount of goodwill and determined that the carrying amount of goodwill allocated to the Group’s Europe and Asia Pacific Communities Cash Generating Units (CGUs), which comprise operations of the Communities segment (refer to Note 29. ‘Segment Reporting’), were fully impaired (A$252.9 million). The impairment loss is included in ‘other expenses’ in Communities activities in the income statement.

The main contributing factor to the impairment of the CGUs was the significant deterioration of the residential property market in the UK and Australia which has impacted projects in the Lend Lease Development and Delfin Lend Lease businesses and caused further deterioration within the Crosby Lend Lease business. No impairment arose as a result of the review of goodwill for the Project Management and Construction CGUs which relate to the Bovis Lend Lease Group for the year ended 30 June 2009. Based on information available and market conditions at 30 June 2009, a reasonably foreseeable change in the assumptions made in this assessment would not result in impairment of Bovis Lend Lease Group’s goodwill.

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2009 Annual Consolidated Financial Report Lend Lease Corporation

Goodwill Allocation

Goodwill is allocated to the Group’s CGUs identified according to region and business segment. A summary of the goodwill allocation to CGUs is set out below.

of the goodwill allocation to CGUs is set out below.
	Asia Pacifc	Americas	Europe	Total
	A$m	A$m	A$m	A$m
June 2009
Project Management and Construction	27.4	173.7	276.0	477.1
June 2008
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

Impairment Tests and Key Assumptions Used

The recoverable amount of a CGU is determined based on Value In Use (VIU) calculations. For the Project Management and Construction CGUs, the assumptions used for determining the recoverable amount of each CGU are based on past experience and expectations for the future, utilising both internal and external sources of data and relevant industry trends. The following describes the key assumptions on which management has based its cash flow projections when determining VIU relating to the Project Management and Construction CGUs:

Cash Flows

The VIU calculations use post tax cash flow projections based on actual operating results and financial budgets and forecasts covering a five year period. The financial budgets and forecasts are approved by management. These budgets and forecasts are based on management estimates to determine income, expenses, capital expenditure and cash flows for each CGU.

Growth Rate

The terminal value growth rate used to extrapolate the cash flows beyond the five year period is 3.0% (2008: 3.0%). The growth rate reflects the forecast long term average growth rate for each CGU and the countries in which they operate.

Discount Rate

The discount rate applied to the cash flow projections is between 11.0% and 13.0% (2008: between 10.0% and 12.0%). 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 CGUs and the countries in which they operate. The discount rates used are post tax.

	Consolidated	Consolidated	Company	Company
	June 2009	June 2008	June 2009	June	2008
	A$m	A$m	A$m		A$m
b. Management Agreements
Management agreements	46.9	45.4
Accumulated amortisation	(18.0)	(14.0)
Total management agreements	28.9	31.4	–		–
Reconciliation
Reconciliation of the carrying amounts of management
agreements are set out below:
Carrying amount at beginning of fnancial year1	31.4	18.3
Additions	17.5	12.7
Disposals	(16.0)
Amortisation	(4.0)	(2.9)
Other		3.3
Carryingamount at end of fnancialyear	28.9	31.4	–		–
c. Other Intangibles
Other intangibles	30.4	19.8
Accumulated amortisation and impairment	(10.4)	(4.5)
Total other intangibles	20.0	15.3	–		–
Reconciliation
Reconciliation of the carrying amounts of other intangibles
are set out below:
Carrying amount at beginning of fnancial year2	15.3	5.1
Additions	9.8	12.7
Amortisation	(5.0)	(2.2)
Impairment	(0.6)
Effect of foreign exchange rate movements	0.5	(0.3)
Carryingamount at end of fnancialyear	20.0	15.3	–		–

1 The carrying amount at 1 July 2007 of A$18.3 million represents A$29.4 million of costs and A$11.1 million of accumulated amortisation.

2 The carrying amount at 1 July 2007 of A$5.1 million represents A$8.0 million of costs and A$2.9 million of accumulated amortisation.

139

Notes to the Consolidated Financial Statements continued

Consolidated	Consolidated	Company	Company
June 2009 A$m	June 2008 A$m	June 2009 A$m	June 2008 A$m
16. Defned Beneft Plan Asset1 a. Balance Sheet Amounts The amounts recognised in the balance sheet are determined as follows: Fair value of plan assets 128.5	156.3	128.5		156.3
Present value of defned beneft obligations (133.4)	(126.4)	(133.4)		(126.4)
Unrecognised actuarial loss/(gain) 34.9	(1.4)	34.9		(1.4)
Unrecognisedpast service cost	0.2			0.2
Recognised asset for defned beneft obligations 30.0	28.7	30.0		28.7
b. Reconciliation of the Fair Value of Plan Assets Fair value of plan assets at beginning of fnancial year 156.3	167.3	156.3		167.3
Expected return on plan assets 8.2	9.0	8.2		9.0
Actuarial (losses)/gains (32.9)	(19.2)	(32.9)		(19.2)
Contributions by Group companies 6.2	6.4	6.2		6.4
Contributions by plan participants 3.2	3.4	3.2		3.4
Taxes and premiums paid (1.5)	(1.5)	(1.5)		(1.5)
Transfers in 0.1	0.9	0.1		0.9
Contributions to accumulation fund (1.0)	(0.9)	(1.0)		(0.9)
Beneftspaid (10.1)	(9.1)	(10.1)		(9.1)
Fair value ofplan assets at end of fnancialyear 128.5	156.3	128.5		156.3
c. Reconciliation of the Present Value of Funded Obligations Present value of funded obligations at beginning of fnancial year 126.4	116.1	126.4		116.1
Current service cost 6.3	5.8	6.3		5.8
Interest cost on beneft obligation 6.7	6.0	6.7		6.0
Contributions by plan participants 3.2	3.4	3.2		3.4
Actuarial losses 3.3	5.7	3.3		5.7
Taxes and premiums paid (1.5)	(1.5)	(1.5)		(1.5)
Transfers in 0.1	0.9	0.1		0.9
Contributions to accumulation fund (1.0)	(0.9)	(1.0)		(0.9)
Beneftspaid (10.1)	(9.1)	(10.1)		(9.1)
Present value of funded obligations at end of fnancialyear 133.4	126.4	133.4		126.4
d. Expense Recognised in the Income Statement Current service cost 6.3	5.8	6.3		5.8
Interest on obligation 6.7	6.0	6.7		6.0
Expected return on plan assets (8.2)	(9.0)	(8.2)		(9.0)
Actuarial gain recognised	(2.4)			(2.4)
Past service cost 0.2	0.4	0.2		0.4
Net defned beneftplan expense 5.0	0.8	5.0		0.8
e. Actual Returnon Plan Assets (24.7)	(10.2)	(24.7)		(10.2)

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

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2009 Annual Consolidated Financial Report Lend Lease Corporation

	Consolidated	Consolidated		Company	Company
	June 2009	June	2008	June 2009	June 2008
	%		%	%	%
f. Categories of Plan Assets
Cash	8.0		5.0	8.0	5.0
Equity instruments1	48.0		51.0	48.0	51.0
Fixed interest securities	40.0		40.0	40.0	40.0
Property	4.0		4.0	4.0	4.0
	100.0	100.0		100.0	100.0
g. Principal Actuarial Assumptions
Discount rate (net)	4.7		5.9	4.7	5.9
Expected rate of return on assets2	5.9		5.8	5.9	5.8
Expected salaryincrease rate	4.0		4.0	4.0	4.0

1 The fair value of plan assets includes Lend Lease shares to the value of A$0.1 million (June 2008: A$0.2 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.

h. Employer Contributions

For the year ending 30 June 2010, total employer contributions to the plan are expected to be A$6.8 million. Lend Lease Corporation paid A$1.0 million in insurance premiums on behalf of the Lend Lease Superannuation Fund (Australia) for the year ending 30 June 2010.

				Consolidated	Consolidated
	June 2009	June 2008		June	2007	June 2006	June 2005
	A$m		A$m		A$m	A$m	A$m
i. Historical Summary
Plan assets	128.5		156.3	167.3		147.4	139.8
Defned beneftplan obligation	(133.4)		(126.4)	(116.1)		(110.8)	(111.3)
(Defcit)/Surplus	(4.9)		29.9		51.2	36.6	28.5
Experience (losses)/gains arising on
plan assets	(32.9)		(19.2)		17.2	9.4	11.3
Experience gains/(losses) arising on
plan liabilities	3.0		(8.3)		(6.8)	(4.4)	0.1
			Consolidated			Company
		June 2009		June	2008	June 2009	June 2008
			A$m		A$m	A$m	A$m
17. Other Assets
Current
Prepayments			35.1		27.3	1.0
Deferred bid costs on projects at preferred
bidder status			30.0		13.1
Other			2.7		2.8
			67.8	43.2		1.0	–
Non Current
Prepayments			30.5		11.0
Other			0.1		0.8
			30.6		11.8	–	–
Total other assets			98.4	55.0		1.0	–

141

Notes to the Consolidated Financial Statements continued

	Consolidated	Consolidated		Company	Company
	Note June 2009 A$m	June	2008 A$m	June 2009 A$m	June	2008 A$m
18. Trade and Other Payables
Current – Measured at Cost
or Amortised Cost
Trade creditors	2,270.2	2,266.5		41.3		43.5
Construction revenue – amounts due to
customers1	10b 1,356.9	1,157.3
Deposits received in advance	9.0		7.2
Unearned income	49.0		38.0
Unearned premium reserve2	17.4
Insurance claim reserve2	5.3		8.4
Related party
Consolidated entities3				1,830.7	1,485.6
Associates and joint venture entities	26.7		29.2
Deferred land payments	24.8		93.2
Other	37.9		77.6	11.0		8.1
	3,797.2	3,677.4		1,883.0	1,537.2
Non Current – Measured
at Amortised Cost
Insurance claim reserve2	37.0		13.4
Unearned income	0.6		1.0
Related party
Associates and joint venture entities	19.6		26.1
Deferred land payments	35.1		11.2
Other	128.5	118.4
	220.8	170.1		–		–
Total trade and otherpayables	4,018.0	3,847.5		1,883.0	1,537.2

1 Represents construction contracts where the total progress billings issued to clients (together with foreseeable losses if applicable) on a project exceed the costs incurred to date plus recognised profit on the contract.

2 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 current 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.

3 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.

142

2009 Annual Consolidated Financial Report Lend Lease Corporation

	Consolidated	Consolidated		Company	Company
	June 2009	June	2008	June 2009	June	2008
	A$m		A$m	A$m		A$m
19. Borrowings and Financing Arrangements
a. Borrowings – Measured at Amortised Cost
Non Current
Commercial notes	971.9	929.3
Bank credit facilities	153.1
Total borrowings	1,125.0	929.3		–		–
b. Finance Facilities
Lend Lease operating businesses have access
to the following lines of credit:
Commercial Notes
Facility available	971.9	929.3
Amount of facilityused	(971.9)	(929.3)
Amount of facilityunused	–		–	–		–
Bank Credit Facilities
Facility available	755.1	788.6
Amount of facilityused	(153.1)
Amount of facilityunused	602.0	788.6		–		–
Bank Overdrafts
Facility available	10.0		20.0	10.0		20.0
Amount of facilityused
Amount of facilityunused	10.0		20.0	10.0		20.0

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 at 5.75% (all in rate) issued in the US Private Placement debt market maturing in October of 2012, 2015 and 2017.

Bank credit facilities include a committed syndicated bank facility maturing in November 2010 of £350.0 million (A$714.3 million) in the UK, of which £75.0 million (A$153.1 million) was drawn at 30 June 2009 (June 2008: £nil). The bank overdraft facilities may be drawn at any time and are repayable on demand.

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

Consistent with prior years, the Group has not defaulted on any obligations of principal or interest in relation to its borrowing and financing arrangements.

Refer to Note 31d. for analysis of the management of the Group’s liquidity risk. The following schedule profiles the 30 June 2009 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
June 2009 Less than one year Between one and fve years More than fveyears

	123.1 153.1 276.2	123.1 153.1 276.2
	848.8 848.8	246.1 602.7 848.8
Total	971.9 153.1 1,125.0	369.2 755.8 1,125.0
June 2008 Less than one year Between one and fve years More than fveyears	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

143

Notes to the Consolidated Financial Statements continued

Consolidated	Consolidated	Company	Company
June 2009 A$m	June 2008 A$m	June 2009 A$m	June 2008 A$m
20. Provisions Current Employee benefts 97.3	100.4	2.5	3.8
Maintenance and warranty1 28.7 Restructure (including employee terminations) 55.2 Other2 46.0	41.6 3.2 38.6	36.6	39.5
227.2	183.8	39.1	43.3
Non Current Employee benefts 11.0 Other2 39.0	9.9 35.4	0.6	0.7
50.0	45.3	0.6	0.7
Totalprovisions 277.2	229.1	39.7	44.0
Reconciliations Reconciliations of the carrying amounts of each class of provision, except for employee benefts, are set out below: Current Maintenance and Warranty Carrying amounts at beginning of fnancial year 41.6 Provisions written back during fnancial year (6.3) Payments made during fnancial year (8.6) Other (1.9) Effect of foreign exchange rate movements 3.9	63.3 (19.0) (3.8) 7.8 (6.7)
Carryingamount at end of fnancialyear 28.7	41.6	–	–
Restructure (Including Employee Terminations) Carrying amounts at beginning of fnancial year 3.2 Provisions raised/(written back) 91.0 Payments made during fnancial year (36.1) Other Effect of foreign exchange rate movements (2.9)	9.1 (3.3) (2.2) 0.2 (0.6)
Carryingamount at end of fnancialyear 55.2	3.2	–	–
Other Carrying amounts at beginning of fnancial year 38.6	69.9	39.5	41.9
Provisions raised/(written back) during fnancial year 15.8	(9.3)	2.7	13.2
Payments made during fnancial year (11.1)	(15.7)	(5.6)	(13.3)
Other 2.0 Effect of foreign exchange rate movements 0.7	(3.3) (3.0)		(2.3)
Carryingamount at end of fnancialyear 46.0	38.6	36.6	39.5
Non Current Other Carrying amounts at beginning of fnancial year 35.4 Provisions raised during fnancial year 5.4 Payments made during fnancial year (11.6) Other 10.0 Effect of foreign exchange rate movements (0.2)	4.3 30.9 (1.9) 4.9 (2.8)
Carryingamount at end of fnancialyear 39.0	35.4	–	–

1 Represents maintenance and warranty 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 various legal provisions and funding received for PPP service concession arrangements. The timing of the utilisation of these provisions is dependent on litigation outcomes and service requests received by Lend Lease.

144

2009 Annual Consolidated Financial Report Lend Lease Corporation

	Consolidated	Consolidated	Company	Company
	June 2009	June 2008	June 2009	June	2008
	A$m	A$m	A$m		A$m
21. Other Financial Liabilities
Current
a. Measured at Fair Value
Derivatives
Forward foreign exchange contracts – held for trading	29.8	0.1
Related party
Consolidated entities – fnancialguarantees			9.2		9.3
Total current	29.8	0.1	9.2		9.3
Non Current
a. Measured at Fair Value
Related party
Consolidated entities – fnancialguarantees	–	–	42.5		51.1
b. Measured at Amortised Cost
Bluewater lease liability	167.6	171.1
Other	24.0	29.7
Total non current	191.6	200.8	42.5		51.1
Total other fnancial liabilities	221.4	200.9	51.7		60.4

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 2009	June	2008	June 2009	June	2008
	A$m		A$m	A$m		A$m
22. Other Non Financial Liabilities
Current
Other	0.2		0.3
	0.2		0.3	–		–
Non Current
Other	0.6		0.8
	0.6		0.8	–		–
Total other non fnancial liabilities	0.8		1.1	–		–

145

Notes to the Consolidated Financial Statements continued

Consolidated	Consolidated	Company	Company
June 2009 A$m	June 2008 A$m	June 2009 A$m	June	2008 A$m
23. 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 691.2 Fair value of plan assets (559.2) Unrecognised actuarial(losses)/gains (86.3)	686.2 (627.7) 59.6
Recognised liabilityfor defned beneft obligations 45.7	118.1	–		–
b. Reconciliation of the Present Value of Defned Beneft Obligations Present value of defned beneft obligations at beginning of fnancial year 686.2 Current service cost 21.7 Interest cost on beneft obligation 43.2 Contributions by plan participants 0.4 Actuarial losses/(gains) 34.4 Benefts paid (27.4) Curtailments (54.4) Effect of foreign exchange rate movements (12.9)	778.3 33.1 39.8 0.4 (40.2) (18.9) (106.3)
Present value of defned beneft obligations at end of fnancialyear 691.2	686.2	–		–
c. Reconciliation of the Fair Value of Plan Assets Fair value of plan assets at beginning of fnancial year 627.7 Expected return on plan assets 40.0 Actuarial losses (115.5) Contributions by Group companies 44.9 Contributions by plan participants 0.4 Benefts paid (27.4) Effect of foreign exchange rate movements (10.9)	661.0 44.4 (12.7) 46.7 0.4 (18.9) (93.2)
Fair value ofplan assets at end of fnancialyear 559.2	627.7	–		–
d. Expense Recognised in the Income Statement Current service cost 21.7 Interest on obligation 43.2 Expected return on plan assets (40.0) Curtailmentgain2 (55.3)	33.1 39.8 (44.4)
Net defned beneftplan(income)/expense (30.4)	28.5	–		–
e. Actual Returnon Plan Assets (69.1)	31.8	–		–

1 Relates to the Bovis UK Pension Scheme.

2 The closure of the Bovis UK Pension Scheme to future accrual, effective 31 August 2008, has contributed to a decrease in the plan’s defined benefit obligation as the plan is no longer exposed to future service salary increases. The curtailment of the plan has resulted in a curtailment gain to the income statement of A$55.3 million before tax.

146

2009 Annual Consolidated Financial Report Lend Lease Corporation

	Consolidated	Consolidated		Company	Company
	June 2009	June	2008	June 2009	June	2008
	%		%	%		%
f. Categories of Plan Assets
Equity instruments	32.4		56.0
Debt instruments	54.9		42.0
Other assets	12.7		2.0
	100.0	100.0		–		–
g. Principal Actuarial Assumptions
Discount rate (net)	6.1		6.3
Expected rate of return on assets1	6.1		7.0
Expected salary increase rate2			5.3
Pension increases (3.0% cap)	2.6		2.9
Pension increases (5.0% cap)	3.5		3.8
Pension increases(2.5% cap)	2.3		2.9

1 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 2009 financial year. An allowance for administration expenses has been deducted from the expected return.

2 The plan is no longer exposed to future service salary increases as it is closed to future accrual effective 31 August 2008.

h. Employer Contributions

Additional deficit contributions are expected to be paid, however, this has not yet been agreed with the plan’s trustee. Further employer contributions may be paid if there are any redundancies or augmentations during the year.

during the year.
			Consolidated
	June 2009	June 2008	June 2007	June 2006	June 2005
	A$m	A$m	A$m	A$m	A$m
i. Historical Summary
Plan assets	559.2	627.7	661.0	572.2	454.2
Defned beneftplan obligation	(691.2)	(686.2)	(778.3)	(722.4)	(640.2)
(Defcit)	(132.0)	(58.5)	(117.3)	(150.2)	(186.0)
Experience (losses)/gains arising on
plan assets	(115.5)	(12.7)	18.5	36.8	32.3
Experience losses arisingonplan liabilities	(27.4)	(0.9)	(7.1)	(21.1)	(23.9)

147

Notes to the Consolidated Financial Statements continued

		Consolidated	Consolidated			Company	Company
	June No. of	2009	June No. of	2008	June No. of	2009	June No. of	2008
	Shares m	A$m	Shares m	A$m	Shares m	A$m	Shares m	A$m
24. Issued Capital and
Treasury Shares
Issued Capital – Ordinary
Shares Fully Paid
Ordinary shares issued at beginning of fnancial year	401.1	854.7	401.1	854.4	401.1	854.7	401.1	854.4
Movements during fnancial year
Share issue via institutional
placement, net of
transaction costs	50.0	296.2			50.0	296.2
Share issue – other	0.1	0.2		0.3	0.1	0.2		0.3
Dividend Reinvestment
Plan(DRP)	6.4	44.8			6.4	44.8
Ordinary shares issued at end of fnancialyear	457.6	1,195.9	401.1	854.7	457.6	1,195.9	401.1	854.7

On 11 February 2009 Lend Lease issued 50 million new shares via an institutional placement at an issue price of A$6.05 per share.

The Company’s DRP was reactivated in August 2008. The Company’s Share Election Plan and Share Purchase Plan remain suspended.

Holders of ordinary shares are entitled to receive dividends as declared and are entitled to one vote per share at shareholders’ meetings. Ordinary shareholders rank after all creditors in repayment of capital. Lend Lease does not have authorised capital or par value in respect of its issued shares.

		Consolidated	Consolidated			Company	Company
	June	2009	June	2008	June	2009	June	2008
	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	30.1	62.6	30.5	67.4	30.1	87.6	30.5	92.5
Movements during fnancial year
Treasury shares acquired	2.1	14.8	0.1	1.6	2.1	14.8	0.1	1.5
Treasuryshares vested	(1.4)	(14.2)	(0.5)	(6.4)	(1.4)	(14.2)	(0.5)	(6.4)
Treasury shares at end of fnancialyear	30.8	63.2	30.1	62.6	30.8	88.2	30.1	87.6

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.

148

2009 Annual Consolidated Financial Report Lend Lease Corporation

Nature and Purpose of Reserves

25. 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 the equity compensation reserve over the vesting period of the underlying grant. Additionally, unallocated Lend Lease shares held by consolidated employee benefit vehicles which are used to meet equity related employee arrangements are recognised in the equity compensation reserve at their original historic cost to the Group.

e. Other Compensation Reserve

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

f. Capital Reserve

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

g. Minority Interest Acquisition Reserve

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

	Consolidated	Consolidated	Company	Company
	June 2009	June 20081	June 2009	June 2008
	A$m	A$m	A$m	A$m
26. Retained Earnings
Retained earnings at beginning of fnancial year	2,126.1	2,257.4	2,014.5	1,684.8
Adjustment on adoption of AASB Interpretation 12
‘Service Concession Arrangements’		(68.2)
Adjusted retained earnings at beginning of fnancial year	2,126.1	2,189.2	2,014.5	1,684.8
(Loss)/proft attributable to members of Lend Lease
Corporation Limited	(653.6)	254.2	(36.0)	669.4
(Loss)/gain on utilisation of treasury shares recognised
directly in retained earnings2	(0.9)	1.8		1.3
Other		(3.6)
	1,471.6	2,441.6	1,978.5	2,355.5
Dividends paid	(205.1)	(341.0)	(205.1)	(341.0)
Dividends on treasury shares	16.8	25.5
Dividends forgonepursuant to DRP	(44.8)		(44.8)
Total retained earnings at end of fnancialyear	1,238.5	2,126.1	1,728.6	2,014.5

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

149

Notes to the Consolidated Financial Statements continued

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 developments. 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 34b. ‘Lend Lease Employee Benefit Vehicles’.

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. The number of claimants who have brought proceedings against Bovis Lend Lease is currently approximately 15,699 (comprising 9,595 first named claimants and 6,104 derivative claimants – for example, spouses).

On 12 December 2008 Judge Hellerstein made orders that will bring 30 expedited cases to trial with an anticipated hearing date of May 2010. These cases will include cases selected by the parties, as well as by the Court. Preparation for these trials through discovery is progressing. 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 therefore still needs 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.

In June 2009, Bovis Lend Lease LMB, Inc. in New York, received notice of investigations being conducted by the US Attorney and New York District Attorney. The investigation relates to allegations regarding, among other things, billing practices for union foremen on construction projects in New York. Bovis Lend Lease is co-operating with the authorities in their investigation.

Bovis Lend Lease has engaged independent advisers to conduct a review of Bovis Lend Lease LMB, Inc.’s practices. Until the investigation is complete, it is not possible to quantify what the financial consequences associated with this matter will be, however, Lend Lease has recognised a provision to cover legal costs and make-good payments.

150

2009 Annual Consolidated Financial Report Lend Lease Corporation

			Year End	Year End
		Foreign	30 June 2009	30 June 2008
		Country of	Ownership	Ownership
	Country of	Business	Interest	Interest
	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, 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 Americas, Inc. (formerly 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	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 Limited	Australia		100	100
Lend Lease Ventures Pty Ltd	Australia		100	100
International
Lend Lease (US) Capital, Inc.	USA	USA	100	100
Lend Lease Europe Financeplc	UK	UK	100	100

151

Notes to the Consolidated Financial Statements continued

Ownership Interest Acquired Date % Acquired

			Ownership Interest Acquired %	Date Acquired
28. Consolidated Entities continued
b. Acquisitions
During the year, the consolidated entity acquired an interest
in the following entity:
June 2009
Communities
Lend Lease Villages Responsible EntityLimited			100	22 Oct 08
	June	2009	June	2008
	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 Consolidated Entities
Acquisition Cost
Cashpaid for acquisition	–	0.2	–	–
Net Assets of Entities Acquired
Intangible asset
(Australian Financial Services Licence)		0.2
Net assets acquired	–	0.2	–	–

On 22 October 2008 the Group acquired all of the shares in Lend Lease Villages Responsible Entity Limited (formerly Barrakee Holdings Pty Ltd) for A$0.2 million in cash. The entity’s principal activity is to be the responsible entity of the Trust of Lend Lease Primelife Limited. From acquisition date to 30 June 2009, the revenue and profit contributed to the Group is immaterial.

the revenue and proft contributed to the Group is immaterial.
	Ownership
	Interest		Consideration
	Disposed	Date	Received
	%	Disposed	A$m
c. Disposals June 2009 During the year, the consolidated entity disposed of its interests in the following entities. The operating results to date of disposal have been included in consolidated proft. Communities RBD Property Management Pty Ltd Glenaeon Retirement Village Pty Ltd Lutanda Manor Retirement Village Pty Ltd Forest Hills Village Pty Ltd Peppertree Hill Management Pty Ltd P.V. Management Pty Limited Retirement Village Properties PtyLtd	100 100 100 100 100 100 100	30 Dec 08 30 Dec 08 30 Dec 08 30 Dec 08 30 Dec 08 30 Dec 08 30 Dec 08	14.4 41.9 18.5 11.7 24.0 6.8 3.3
June 2008
During the year, the consolidated entity disposed of its interest
in the following entity. The operating results to that date were included in consolidated proft.
Communities
Lend Lease GPT(Rouse Hill)PtyLtd	1	1 Jan 08	0.3

152

2009 Annual Consolidated Financial Report Lend Lease Corporation

	Consolidated	Consolidated		Company	Company
	June 2009	June	2008	June 2009	June 2008
	A$m		A$m	A$m	A$m
Details of the disposals of consolidated
entities are as follows:
Sale Proceeds
Cash received	11.8		0.3		173.9
Convertible notes issued to Lend Lease	108.8
Total saleproceeds	120.6		0.3	–	173.9
Net Assets of Entities Disposed
Cash and cash equivalents	0.2		0.1
Trade and other receivables	1.9		0.1
Inventories	0.7		1.2
Investment properties	6.8
Other investments					173.9
Property, plant and equipment	3.8
Intangible assets	12.7
Deferred tax assets			0.3
Other assets	28.3
Trade and other payables	(0.3)		(0.1)
Deferred tax liability			(0.3)
Provisions	(0.9)
Other fnancial liabilities	(7.0)		(0.8)
Other non fnancial liabilities			(0.3)
Net assets disposed	46.2		0.2	–	173.9
Cash Flows Resulting from Sale
Cash consideration	11.8		0.3		173.9
Cash disposed	(0.2)		(0.1)
Cash deconsolidated			(6.8)
Disposal costs	(1.5)
Net infows/(outfows)of cash	10.1		(6.6)	–	173.9

153

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

Business Segment Summary
Segment Revenue1, 2 June 2009 A$m June 2008 A$m	Other Unallocated Revenue1 Group Revenue June 2009 A$m June 2008 A$m June 2009 A$m June 2008 A$m
Segment Retail 125.8 130.7 Communities 562.8 946.2 Public Private Partnerships 1,482.2 944.6 Investment Management 68.6 77.5 Project Management and Construction 12,421.4 12,426.8	125.8 130.7 23.6 23.3 586.4 969.5 24.8 18.1 1,507.0 962.7 0.5 49.8 69.1 127.3 0.6 12,422.0 12,426.8
Total segment 14,660.8 14,525.8	49.5 91.2 14,710.3 14,617.0
Unallocated Total Group

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.

proceeds on the sale of investments (unless the segment’s operations	are primarily of a fnancial nature); and inco
Depreciation and Amortisation1 Non Cash Expenses Other than Depreciation and Amortisation2 June 2009 A$m June 2008 A$m June 2009 A$m June 2008 A$m	Segment Assets3 Investments Accounted for Using the Equity Method June 2009 A$m June 2008 A$m June 2009 A$m June 2008 A$m
Segment Retail 1.8 1.6 144.8 52.1 Communities 7.4 6.7 555.1 124.6 Public Private Partnerships 1.3 1.7 4.2 (2.4) Investment Management 0.2 3.1 21.4 5.8 Project Management and Construction 14.1 10.3 132.7 28.5	694.1 787.1 544.9 668.2 1,637.6 2,190.1 275.5 84.6 482.4 450.5 21.0 29.3 385.7 481.3 176.0 239.8 2,805.5 2,947.7 42.0 36.7
Total segment 24.8 23.4 858.2 208.6	6,005.3 6,856.7 1,059.4 1,058.6
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, impairments 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 and interest bearing assets and liabilities.

Geographical Segment Summary

					Group
					(Loss)/Proft
	Segment	Revenue	Group	Revenue	Before Tax
	June 2009	June 2008	June 2009	June 2008	June 2009 June	2008
	A$m	A$m	A$m	A$m	A$m	A$m
Asia Pacifc	3,561.3	3,418.0	3,576.9	3,434.3	2.3	310.1
Americas	7,400.6	6,866.9	7,406.1	6,871.7	5.4	165.2
Europe	3,698.9	4,240.9	3,727.3	4,311.0	(534.3)	(49.2)
Total segment	14,660.8	14,525.8	14,710.3	14,617.0	(526.6)	426.1
Unallocated corporate			74.7	60.9	(206.5)	(115.8)
Total Group			14,785.0	14,677.9	(733.1)	310.3

154

2009 Annual Consolidated Financial Report Lend Lease Corporation

Share of (Loss)/Proft of Investments Accounted for Using the Equity Method June 2009 A$m June 2008 A$m	Other Unallocated Revenues, Other Income and Expenses1 Group (Loss)/Proft Before Tax June 2009 A$m June 2008 A$m June 2009 A$m June 2008 A$m	Group (Loss)/Proft After Tax Including Minority Interest June 2009 A$m June 2008 A$m	Group (Loss)/Proft After Tax Attributable to Members of Lend Lease Corporation Limited June 2009 A$m June 2008 A$m
(143.7) (7.0) (27.9) 32.6 16.4 8.2 (51.6) 26.0 46.3 17.8	(239.2) (7.2) 22.6 18.2 (523.1) 14.9 22.3 15.6 83.4 60.0 0.4 116.8 (52.0) 167.0 3.6 204.3 191.4	(222.0) (12.5) (463.5) (21.5) 71.7 59.0 (46.3) 148.6 147.7 151.0	(207.9) (5.4) (464.0) (21.2) 71.7 59.0 (46.3) 148.6 146.4 150.0
(160.5) 77.6	48.9 150.6 (526.6) 426.1	(512.4) 324.6	(500.1) 331.0
	(206.5) (115.8) (206.5) (115.8)	(153.5) (76.8)	(153.5) (76.8)
	(157.6) 34.8 (733.1) 310.3	(665.9) 247.8	(653.6) 254.2

2 Segment revenues, expenses and results do not include intersegment transfers between business segments. Intersegment transfers are priced on an arm’s length basis.

Total Group Assets June 2009 A$m June 2008 A$m	Acquisition of Non Current Assets4 June 2009 A$m June 2008 A$m	Segment Liabilities3 June 2009 A$m June 2008 A$m	Unallocated Corporate Liabilities3 Total Group Liabilities June 2009 A$m June 2008 A$m June 2009 A$m June 2008 A$m
1,251.5 1,460.8 1,993.2 2,287.4 504.0 480.1 573.1 728.8 2,971.3 3,087.1	1.4 27.1 35.7 19.8 0.4 1.0 0.1 19.2 20.7	228.0 321.6 293.9 326.1 584.1 377.9 36.1 45.1 3,151.1 3,041.9	127.4 119.4 355.4 441.0 83.5 74.7 377.4 400.8 107.7 70.4 691.8 448.3 22.9 32.4 59.0 77.5 61.3 105.0 3,212.4 3,146.9
7,293.1 8,044.2	57.7 67.7	4,293.2 4,112.6	402.8 401.9 4,696.0 4,514.5
1,026.3 505.3 8,319.4 8,549.5			1,176.1 1,053.6 1,176.1 1,053.6
			1,578.9 1,455.5 5,872.1 5,568.1

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.

	Group (Loss)/Proft After Tax Attributable to Members of Lend Lease Corporation Limited Segment Assets Acquisition of Non Current Assets June 2009 A$m June 2008 A$m June 2009 A$m June 2008 A$m June 2009 A$m June 2008 A$m
	(1.7) 238.3 1,879.1 2,031.8 38.5 41.1 37.3 150.1 1,811.6 2,000.1 11.0 7.9 (535.7) (57.4) 2,314.6 2,824.8 8.2 18.7
	(500.1) 331.0 6,005.3 6,856.7 57.7 67.7
	(153.5) (76.8) (653.6) 254.2

155

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 S&P/Moody’s long term credit rating at 30 June 2009 is BBB–/Baa3 (June 2008: BBB–/Baa3). There has been no significant change to the objectives, policies and processes for managing capital from the previous period.

The capital structure of the Group can be changed by equity issuance such as the A$302.5 million raised in February 2009, 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).

156

2009 Annual Consolidated Financial Report Lend Lease Corporation

2009 Consolidated	AUD	USD	GBP	SGD	EUR	Other
Net asset exposure(local currency)	1,483.0	24.8	227.0	209.2	84.7	137.7
2008 Consolidated
Net asset exposure(local currency)	1,433.7	109.8	528.0	202.6	88.9	90.8

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.

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 Note 1.21.).

Certain derivative transactions are treated as cash flow or fair value hedges when they meet the appropriate strict hedge accounting criteria outlined in Note 1.22.

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 as shown below:

value of the hedged item as shown below:
	Consolidated
	June 2009	June	2008
	A$m		A$m
(Loss)/gain on hedging instrument	(6.0)		1.2
Gain/(loss)on hedged item	3.9		(1.2)

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 2009 the fair value of these outstanding designated derivatives recognised in equity is A$nil (30 June 2008: A$1.2 million). All of the forecast hedged transactions occurred during the year ended 30 June 2009 and affected 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.

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 until realised. The Group does not currently use derivatives to hedge net investment in foreign operations.

157

Notes to the Consolidated Financial Statements continued

31. International Currency Management and Financial Instruments continued a. Foreign Currency continued

Foreign Currency Hedges (Not Hedge Accounted)

The Group’s foreign exchange cash flow and fair value hedges by currency and maturity date are detailed below:

detailed below:	detailed below:	detailed below:
Weighted Average			Gross Receivable/(Payable)
Exchange Rate			Under Contracts
June 2009	June	2008	June 2009	June 2008
(A$1=)	(A$1=)		A$m	A$m
Contracts to buy pounds sterling at an agreed exchange rate Not later than one year 0.48		0.49	(99.3)	(25.9)
Contracts to sell pounds sterling at an agreed exchange rate Not later than one year 0.49		0.47	608.0	735.6
Later than one year but not later than two years 0.49		0.49	0.3	12.4
Later than two years but not later than three years		0.49		0.3
Contracts to buy US dollars at an agreed exchange rate Not later than one year 0.76	0.93		(406.6)	(270.6)
Contracts to sell US dollars at an agreed exchange rate Not later than one year 0.78	0.92		85.2	35.1
Contracts to buy euros at an agreed exchange rate Not later than one year		0.61		(10.8)
Later than one year but not later than two years 0.56		0.61	(63.8)	(12.4)
Later than two years but not later than three years 0.61		0.61	(0.3)	(0.3)
Contracts to sell euros at an agreed exchange rate Not later than one year 0.57		0.61	80.7	24.4
Contracts to buy Singapore dollars at an agreed exchange rate Not later than one year 1.13		1.25	(27.3)	(20.8)
Contracts to sell Singapore dollars at an agreed exchange rate Not later than one year		1.30		2.2
Contracts to buy Japanese yen at an agreed exchange rate Not later than oneyear 68.89	97.94		(9.4)	(3.0)
Total A$			167.5	466.2

Sensitivity Analysis

The sensitivity of the AUD to movement in foreign currencies is based on a 10% fluctuation (June 2008: 5% fluctuation) in the blended 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 10% decrease (June 2008: 5% decrease) in the blended foreign exchange rates would have impacted the Group’s (loss)/profit after tax as follows:

The sensitivity of the AUD to movement in foreign currencies is based on a 10% fuctuation (June 2008: 5% fuctuation) in the blended rates during the fnancial 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 10% decrease (June 2008: 5% decrease) in the blended foreign exchange rates would have impacted the Group’s (loss)/proft after tax as follows:	The sensitivity of the AUD to movement in foreign currencies is based on a 10% fuctuation (June 2008: 5% fuctuation) in the blended rates during the fnancial 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 10% decrease (June 2008: 5% decrease) in the blended foreign exchange rates would have impacted the Group’s (loss)/proft after tax as follows:
Consolidated
Increase	Increase
in Loss	in Proft
After Tax	After Tax
June 2009	June 2008
A$m	A$m
USD 2.4	7.0
GBP (58.3)	(4.9)
SGD 1.7	0.9
EUR (0.6)	0.8
(54.8)	3.8

An increase of 10% (June 2008: increase of 5%) in blended foreign exchange rates has the equal and opposite effect.

158

2009 Annual Consolidated Financial Report Lend Lease Corporation

A 10% decrease (June 2008: 5% decrease) in the foreign exchange spot rates would have increased the Group’s net assets as follows:

Group’s net assets as follows:
	Consolidated
	Increase in	Net Assets
	June 2009	June	2008
	A$m		A$m
USD	3.1		5.8
GBP	46.4		55.0
SGD	17.9		7.8
EUR	15.4		7.2
	82.8		75.8

An increase of 10% (June 2008: increase of 5%) in the foreign exchange spot 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.

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. There was impairment of A$16.5 million recorded against other financial assets (June 2008: A$2.8 million). Refer to Note 9. ‘Loans and Receivables’ for information relating to impairment on loans and receivables.

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$24.3 million is secured by a first registered mortgage over land parcels (30 June 2008: A$76.5 million); and
Other receivables are not secured by a first registered mortgage over land parcels (30 June 2008: A$4.9 million).

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 2008: A$nil). Consequently, any collateral held as security is not recognised in the financial statements.

c. Interest Rate Risk

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.

The Group’s exposure to interest rate risk on financial instruments is set out below.

	Consolidated	Consolidated	Company	Company
	Carrying Amount		Carrying Amount
	June 2009	June 2008	June 2009	June	2008
	A$m	A$m	A$m		A$m
Fixed Rate Instruments
Financial assets	394.3	580.8
Financial liabilities	(995.9)	(952.2)
	(601.6)	(371.4)	–		–
Variable Rate Instruments
Financial assets	1,102.2	713.7			18.5
Financial liabilities	(339.4)	(171.1)
	762.8	542.6	–		18.5

159

Notes to the Consolidated Financial Statements continued

31. International Currency Management and Financial Instruments continued c. Interest Rate Risk continued

Sensitivity Analysis – Consolidated

At 30 June 2009 it is estimated that an increase of one percentage point in interest rates would have decreased the Group’s loss after tax and retained earnings by A$7.1 million (2008: A$3.6 million increase in the Group’s profit after tax and retained earnings). The net decrease in loss 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 loss 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.

Sensitivity Analysis – Company

The Company does not have material exposures to interest bearing financial assets or liabilities, evidenced by the table above, and on this basis, no sensitivity analysis has been provided.

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. Lend Lease’s main liquidity risk is the ability to refinance its current borrowings. At 30 June 2009 all borrowings are non current. Management is working on strategies to secure committed refinancing of the £350.0 million syndicated facility in the UK maturing in November 2010, A$153.1 million of which was drawn down at 30 June 2009.

The following are the contractual cash flow maturities of financial liabilities (excluding financial guarantees) as at 30 June 2009, including estimated interest payments and excluding the impact of netting agreements.

			Carrying	Contractual	Six Months	Six to 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 2009
Non Derivative Financial Liabilities
Trade and other payables – current		181,2	2,364.9	2,364.9	2,204.3	160.6
Trade and other payables –
non current		181,2	220.2	220.2			139.8	63.5	16.9
Borrowings & fnancing arrangements
– non current		19	1,125.0	1,742.6	48.6	10.4	211.5	288.4	1,183.7
Other fnancial liabilities – non current		21	191.6	210.2	1.8	1.8	30.8	175.8
Total			3,901.7	4,537.9	2,254.7	172.8	382.1	527.7	1,200.6
Derivative Financial Liabilities
Foreign exchange contracts:
Outfow			(34.2)	(842.4)	(836.1)	(6.0)	(0.3)
Infow			7.8	817.0	810.3	6.3	0.4
Total			(26.4)	(25.4)	(25.8)	0.3	0.1	–	–
June 2008
Non Derivative Financial Liabilities
Trade and other payables – current		181	2,474.9	2,474.9	2,331.8	143.1
Trade and other payables –
non current		181	169.1	206.6			69.4	131.6	5.6
Borrowings & fnancing arrangements
– non current		19	929.3	1,594.6	47.2	8.9	56.1	270.1	1,212.3
Other fnancial liabilities – non current		21	200.8	267.9	12.8	5.9	11.9	63.5	173.8
Total			3,774.1	4,544.0	2,391.8	157.9	137.4	465.2	1,391.7
Derivative Financial Liabilities
Foreign exchange contracts:
Outfow			(9.4)	(823.4)	(789.1)	(21.3)	(12.6)	(0.4)
Infow			14.1	829.1	794.4	21.9	12.5	0.3
Total			4.7	5.7	5.3	0.6	(0.1)	(0.1)	–

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 2009: A$2,760.1 million.

160

2009 Annual Consolidated Financial Report Lend Lease Corporation

		Carrying	Contractual	Six Months	Six to Twelve	One to Two	Two to Five	More Than
		Amount	Cash Flows	or Less	Months	Years	Years	Five Years
Company	Note	A$m	A$m	A$m	A$m	A$m	A$m	A$m
June 2009
Non Derivative Financial Liabilities
Trade and otherpayables – current	181	1,883.0	1,883.0	1,883.0	–	–	–	–
June 2008
Non Derivative Financial Liabilities
Trade and otherpayables – current	18	1,537.2	1,537.2	1,537.2	–	–	–	–
1 The repayment of these amounts will be funded	through collection of outstanding loans			and receivables: June 2009: A$3,627.2 million.

Details of other contractually committed cash flows the Group and the Company are exposed to are in Note 32. ‘Commitments’.

e. Fair Values of Financial 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 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 13. ‘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
			June	2009	June 2008 June	2009		June	2008
			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	19		971.9	772.9	929.3 898.0 –	–		–	–
The fair value of commercial notes has been calculated by discounting the expected future cash fows by the appropriate								government
bond rates and credit margin applicable to the		relevant term of the commercial note.
Basis of Determining Fair Value
The following table summarises the basis of valuation of fnancial instruments that are not measured at cost or amortised cost in the fnancial report:
			Active Market		or				Source of
	Note		Valuation Technique Basis of Valuation						Information
Financial Instrument
Other Financial Assets
Available for sale
Negotiable instruments		13	Active market Market value (current bid price)						External
Australian Prime Property Fund		13	Valuation technique Unit price						External
Lend Lease Global Properties, SICAF		13	Valuation technique Net asset value (audited fnancial statements)						External
Lend Lease Retail Partnership		13	Valuation technique International Valuation Standards Committee						External
					International Valuation Application 1
Cohen & Steers, SICAV		13	Valuation technique Unit price						External
Lend Lease Core Plus Fund		13	Valuation technique Unit price						External
Asia Pacifc Investment Company		13	Valuation technique Net asset value external using audited fnancial statements						External
Other		13	Active market Market value (current bid price)						External
Fair value through proft or loss
Negotiable instruments		13	Valuation technique Investor reports						External
Unlisted equity investments		13	Valuation technique Internal valuation						Internal
Derivatives		13	Active market Market value (current bid price)						External
Other Financial Liabilities
Derivatives		21	Active market Market value (current bid price)						External
Financialguarantees		21	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 is included in ‘Other Financial Assets’ and ‘Other Financial Liabilities’ (refer to Note 13. ‘Other Financial Assets’ and Note 21. ‘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.

161

Notes to the Consolidated Financial Statements continued

31. International Currency Management and Financial Instruments continued 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 to the table in Note 31e.).

During the year, the Group entered into a series of net cash settled equity derivative swap contracts, the value of which is directly correlated to the FKP Property Group share price.

Sensitivity Analysis – Consolidated

A 10.0% increase (June 2008: 5.0%) in the fair value of ‘Other Financial Assets’ (refer to Note 13. ‘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$27.0 million after tax (30 June 2008: A$15.0 million increase), and increased the value of ‘fair value through profit or loss’ assets and decreased the Group’s loss after tax and equity by A$5.0 million (30 June 2008: A$1.3 million). A 10.0% decrease (June 2008: 5.0%) 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.

to equity price risk.
	Consolidated		Company
	June 2009	June 2008	June 2009	June	2008
	A$m	A$m	A$m		A$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	184.2	186.5
Plant and equipment	14.4	20.2
	198.6	206.7	–		–
At balance date commitments in relation to non
cancellable operating leases are payable as follows:
Due within one year	53.4	51.4
Due between one and fve years	112.9	131.1
Due later than fveyears	32.3	24.2
	198.6	206.7	–		–

1 The commitments outlined in this note do not include the commitments of the entities accounted for using the equity method (refer to Note 11. ‘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.

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2009 Annual Consolidated Financial Report Lend Lease Corporation

	Consolidated	Consolidated	Company	Company
	June 2009	June 2008	June 2009	June	2008
	A$m	A$m	A$m		A$m
b. Finance Lease Commitments
At balance date commitments in relation to the fnance
leases are payable as follows:
Due within one year	0.1	0.1
Due between one and fve years	167.7	0.2
Due later than fveyears		171.1
Recognised as a liability	167.8	171.4	–		–
Lease liabilities provided for in the fnancial statements:
Current	0.1	0.1
Non current	167.7	171.3
	167.8	171.4	–		–
c. Capital Expenditure
At balance date the aggregate amount of capital
expenditure contracted but not provided for in the fnancial statements is as follows:
Property, Plant and Equipment
Due within one year		9.1
Due between one and fveyears		8.0
	–	17.1	–		–
d. Investments
At balance date capital commitments existing in respect
of interests in investments accounted for using the
equity method and other investments contracted but not provided for in the fnancial statements are as follows:
Due within one year	21.2	33.9
Due between one and fve years	173.9	174.7
Due later than fveyears	4.7	2.2
	199.8	210.8	–		–

Lend Lease has provided a commitment for A$61.2 million in relation to its investment in a joint venture entity. In the event that certain loan targets of the joint venture entity have not been achieved by November 2010, Lend Lease may be required to contribute equity up to A$61.2 million. This is in addition to the commitments above.

163

Notes to the Consolidated Financial Statements continued

Consolidated	Consolidated		Company	Company
June 2009 A$m	June 2008 A$m	June 2009 A$m		June 2008 A$m
33. Notes to the Statements of Cash Flows a. Reconciliation of (Loss)/Proft After Tax to Net Cash Provided by Operating Activities (Loss)/Proft After Tax (Including Minority Interest) (665.9)	247.8		(36.0)		669.4
Amortisation and depreciation 32.6	27.0		0.1		0.1
Net gain on sale of other assets (46.6) Net impairment on investments accounted for using the equity method 67.2 Impairment of property, plant and equipment 20.3 Impairment of other fnancial assets 16.5 Impairment of investment in Group entities Net unrealised foreign exchange loss/(gain) and currency hedging costs 71.6	(70.5) 3.0 0.4 2.8 (1.9)		25.8 (0.3)		1.8
Net fair value loss on equity derivative swaps 48.4 Loss/(proft) accounted for using the equity method 160.5 Dividends/distributions from investments accounted for using the equity method 91.7 Impairment of goodwill and intangibles 253.5 Fair value loss on investment properties 62.2 Other (0.5)	(77.6) 66.9 38.2 (4.2)		1.1		25.6
Net cash provided by/(used in) operating activities before changes in assets and liabilities 111.5	231.9		(9.3)		696.9
Changes in Assets and Liabilities Adjusted for Effects of Purchase and Disposal of Subsidiaries and Operations During the Financial Year Decrease/(increase) in receivables 144.4	(119.8)		76.7		(6.2)
Decrease in inventories 338.6 (Increase)/decrease in other assets (71.7) (Decrease)/increase in defned beneft plan assets/ liabilities (73.7)	130.7 151.3 (43.9)		1.3		(5.6)
Increase/(decrease) in payables 2.7	(88.2)		(2.9)		(8.1)
Increase/(decrease) in other liabilities 27.2	(29.0)		(4.9)		(20.5)
(Decrease)/increase in deferred tax items (119.8)	(21.7)		(5.8)		1.8
(Decrease)/increase in current tax liability/asset (26.0)	60.8		8.6		47.0
Increase/(decrease)in otherprovisions 49.0	(3.4)		(4.2)		0.1
Net cashprovided byoperatingactivities 382.2	268.7		59.5		705.4
	Consolidated
June	2009		June	2008
Acquiree’s	Total	Acquiree’s			Total
Carrying	Fair Value on	Carrying		Fair Value on
Value	Acquisition		Value	Acquisition
A$m	A$m		A$m		A$m
b. Acquisition of Business Acquisition Cost Cash paid for acquisition					16.0
Cashpaid 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

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2009 Annual Consolidated Financial Report Lend Lease Corporation

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 7.85% of the issued capital of Lend Lease Corporation. 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 program 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.
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 2,410 employees (June 2008: 2,728) 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 2,386 employees (June 2008: 3,169) 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 2,386 UK, European and Singapore employees (June 2008: 4,646) were eligible to participate in the plan.

Eligibility

The rules for eligibility for particular plans are determined by reference to the regulatory, legal and tax rules of each country in which the Group operates.

Dividends and/or Voting Rights

Generally, employees in the various operating share plans are entitled to dividends and voting rights for allocated shares. The plans reflect this intention subject to regulatory, legal and tax constraints. Voting and dividend rights on any unallocated shares reside with the trustees of the relevant share plan trusts. The trustee may exercise these rights in accordance with any fiduciary or governance rules pertaining to the deed or trust laws in the legal/tax jurisdiction the trust operates within.

b. Lend Lease Employee Benefit Vehicles

In addition to the plans discussed in Note 34a., Lend Lease has over the years established a range of employee share ownership vehicles. The Lend Lease Retirement Benefit Fund (RBF) was established in 1984 with shareholder approval for the benefit of employees through the allotment at par value of 5.0 million Lend Lease Corporation shares. The balance of the assets of RBF at 30 June 2009 was 14.1 million Lend Lease Corporation shares (June 2008: 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 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$112.3 million at 30 June 2009 (June 2008: A$150.8 million). 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.

165

Notes to the Consolidated Financial Statements continued

34. Employee Benefits continued b. Lend Lease Employee Benefit Vehicles continued

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 10 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 2009, there were 11.6 million (June 2008: 11.6 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 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 of A$88.1 million as at 30 June 2009 (June 2008: A$118.3 million). 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 2009, the net impact was an after tax expense of A$4.3 million (June 2008: 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.

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 the 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; and
Attract and retain high calibre executives by providing competitive rewards that relate to the performance of the Group, the individual executive and the Lend Lease Corporation share price.

LTI grants are normally made in August each year. The Personnel and Organisation Committee intends that these awards will vest in Lend Lease Corporation shares rather than cash, 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.

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2009 Annual Consolidated Financial Report Lend Lease Corporation

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 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 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 Total Shareholder Return (TSR) compared with 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.

Arrangements for LTI Awards Granted in the June 2009 Financial Year

For the June 2009 financial year award, 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 September 2008 the performance hurdle is based on three equal measures: long term profitability as measured by earnings per share (EPS), external TSR compared to the TSR of the individual ASX100 listed companies as at the commencement of the performance period and a retention component. The performance measures are:

TSR measured against the ASX100 companies (with 50% vesting at median performance, rising proportionately to 100% on reaching top quartile performance);
EPS on operating profit as defined in the current financial year for treasury shares; and
Retention component will vest if the executive remains in employment with Lend Lease for three years.

Each of the three 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’.

Other LTI Awards

During the June 2009 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.

167

Notes to the 34. Employee Benefits continued Consolidated c. Share Based Payments continued Financial Summary of LTI and Retention Awards Statements continued


Grant Date VestingDate	2009 Number of Lend Lease Corporation Share Equivalents
	Opening Balance Granted Lapsed Exercised Closing Balance
STI Awards Aug 2007 Aug 2008 Aug 2007 Aug 2009 Aug2008 Aug2009
	463,535 (58,443) (405,092)
	6,318 (6,318)
	988,858 (83,904) (42,286) 862,668
Total STI awards	469,853 988,858 (148,665) (447,378) 862,668
LTI Awards 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 Sep 2008 Aug 2012 Apr 2009 Apr 2012
	914,623 (877,470) (37,153)
	212,874 (212,874)
	898,737 3,806 (241,560) 660,983
	151,733 (151,733)
	59,667 59,667
	17,628 57,267 74,895
	14,423 46,885 61,308
	1,578,699 (14,548) 1,564,151
	1,796,371 1,796,371
Total LTI awards	2,269,685 3,483,028 (1,483,637) (51,701) 4,217,375
Retention Awards Sep 2005 Jul 2008 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 Sep 2008 Mar 2010 Jul 2008 Jun 2009 Nov 2008 Jun 2012
	197,218 (197,218)
	84,407 (84,407)
	84,408 (84,408)
	84,408 (84,408)
	25,340 25,3401
	50,680 50,6801
	80,214 80,2141
	141,367 141,3671
	16,279 16,2791
	37,132 37,1321
	33,440 33,4401
	5,130 (5,130)
	11,152 11,1521
	61,885 61,8851
	153,126 (51,042) 102,0841
	111,199 (1,758) (109,441)
	94,201 94,2011
Total retention awards	913,060 358,526 (86,166) (531,646) 653,774
Total	3,652,598 4,830,412 (1,718,468) (1,030,725) 5,733,817

1 Award settled in shares and is dependent upon service to vesting date. A good leaver will be entitled to pro rata vesting. 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.

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2009 Annual Consolidated Financial Report Lend Lease Corporation

Grant Date VestingDate	2008 Number of Lend Lease Corporation Share Equivalents
	Opening Balance Granted Lapsed Exercised Closing Balance
STI Awards Aug 2007 Aug 2008 Aug2007 Aug2009	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 20081 Jul 2005 Apr 20082 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) 110,664 (110,664) 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.

3 Award settled in shares and is dependent upon service to vesting date. A good leaver will be entitled to pro rata vesting.

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.

169

34. Employee Benefits continued

Notes to the Consolidated c. Share Based Payments continued Financial Statements continued

Amounts Recognised in the Financial Statements continued

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 2009 and 2008 are set out below.

Grant Date VestingDate Fair Value at Grant Date A$	2009
	Fair Value June 20091 A$ Award Fair Value at June 20092 A$ Expense 2009 A$ Equity Settled Award in ECR at June 2009 A$
STI Awards Aug2008 Aug2009 9,191,633
	7.01 6,047,303 8,018,672 8,018,672
Total STI awards 9,191,633	6,047,303 8,018,672 8,018,672
LTI Awards 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 692,416 Jan 2008 Jun 2013 542,129 Sep 2008 Aug 2012 10,372,052 Apr 2009 Apr 2012 10,555,476
	(4,119,479)
	(807,502)
	7.01 4,633,491 (1,762,706) 1,686,947
	(258,705)
	7.01 418,266 318,282 450,826
	7.01 525,014 166,556 192,597
	7.01 429,769 105,066 121,767
	7.01 10,964,699 2,366,583 2,366,583
	7.01 12,592,561 944,614 944,614
Total LTI awards 47,602,950	29,563,800 (3,047,291) 5,763,334
Retention Awards 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 2011 108,844 Apr 2008 Apr 2011 800,173 Sep 2008 Mar 2010 1,500,000 Jul 2008 Jun 2009 1,033,617 Nov 2008 Jun 2012 747,014
	123,749
	447,362
	(231,071)
	7.01 177,633 234,260 469,162
	7.01 355,267 274,435 549,622
	7.01 562,300 499,544 1,000,456
	7.01 990,983 514,374 955,468
	7.01 114,116 99,662 174,477
	7.01 260,295 220,106 392,572
	7.01 234,414 143,989 252,079
	29,151
	7.01 78,176 26,783 54,322
	7.01 433,814 266,968 315,973
	7.01 715,609 748,655 222,412
	1,017,276 1,017,276
	7.01 660,349 124,533 124,533
Total retention awards 15,135,373	4,582,956 4,539,776 5,528,352
Total 71,929,956	40,194,059 9,511,157 19,310,358

1 Represents the Lend Lease Corporation share price at 30 June 2009 for equity settled awards.
2 Represents the number of Lend Lease Corporation share equivalents granted at their fair value at 30 June 2009.

During the financial year ended 30 June 2009, a A$19.2 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$9.7 million relating to internal performance measurements of the 2006 LTI equity settled plan which did not vest, the internal performance measurement of the 2007 equity settled plan which is not expected to vest and previously accrued expenses for employees that left the Company during the year.

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2009 Annual Consolidated Financial Report Lend Lease Corporation

Grant Date VestingDate Fair Value at Grant Date A$	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 Aug2007 Aug2009 118,336	9.55 4,426,759 8,682,011 8,682,011 9.55 60,337 118,336 118,336
Total STI awards 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 2011 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.

171

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 2009

		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	2009	33,895	14,233		48,128
P Colebatch	2008 2009	28,122 5,767	5,773 5,124		33,895 10,891
G Edington	2008 2009	3,689 26,484	2,078 4,839		5,767 31,323
P Goldmark	2008 2009	24,521 15,579	1,963 5,124		26,484 20,703
J Hill	2008 2009	13,501 5,109	2,078 5,124		15,579 10,233
D Ryan	2008 2009	3,031 15,834	2,078 5,408		5,109 21,242
M Selway	2008 2009	13,640 4,000	2,194 2,488		15,834 6,488
Executive Director	2008			4,000	4,000
S McCann	2009	2,367	70,934		73,301
Executive	2008	1,333	1,034		2,367
B Soller3	2009	3,445	8,962		12,407
Former
G Clarke	2009	1,000	48,287	(49,287)
R Taylor	2008 2009	1,000 191,023	30,511	(221,534)	1,000
R Burrows4	2008 2008	104,345 38,927	86,678	(38,927)	191,023
R Johnston4	2008	58,933		(58,933)
Total	2009	304,503	201,034	(270,821)	234,716
Total	2008	291,042	103,876	(93,860)	301,058

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 Mr Soller became a Key Management Personnel during the year.

4 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 5. ‘Other Operating (Income) and Expenses’) is as follows:

(refer to Note 5. ‘Other Operating (Income) and Expenses’)	is as follows:	is as follows:
	Consolidated		Company
	June 2009	June 2008	June 2009	June 2008
	A$000s	A$000s	A$000s	A$000s
Short term employee benefts	8,059	6,874	8,059	6,874
Post employment benefts	5,864	1,096	5,864	1,096
Share based payments	1,047	1,626	1,047	1,626
Other longterm benefts	25	58	25	58
	14,995	9,654	14,995	9,654

Loans to Key Management Personnel

No loans were made to Key Management Personnel or their 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.

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2009 Annual Consolidated Financial Report Lend Lease Corporation

36. Non Key Management Personnel Related Party Information Consolidated Entities

Interests held in consolidated entities and by Lend Lease Corporation Limited are set out in Note 13. ‘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 on an arm’s length basis, are charged to these entities for these services (refer to 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 to Note 16. ‘Defined Benefit Plan Asset’) and share based payment plans (refer to Note 25. ‘Reserves’ and Note 34. ‘Employee Benefits’); and
Finance and treasury services, which includes working capital facilities and long term financing. Interest is earned or incurred only 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. ‘Finance Costs’). 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 21. ‘Other Financial Liabilities’) for which guarantee fees are charged under normal terms and conditions (refer to Note 2. ‘Revenue’).

During the financial year Lend Lease Corporation Limited transferred its interest in Lend Lease Primelife Limited (LLP) to a consolidated entity at original cost.

Other transactions and outstanding balances with consolidated entities are disclosed in Note 2. ‘Revenue’, Note 3. ‘Other Income’, Note 5. ‘Other Operating (Income) and Expenses’, Note 9. ‘Loans and Receivables’, Note 16. ‘Defined Benefit Plan Asset’ and Note 18. ‘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 11. ‘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; and
Communities business: Development management services and the sale and purchase of development properties with Lend Lease managed funds. Also Lend Lease provides management services in relation to LLP and is the responsible entity to the trust of LLP.
In addition Lend Lease acquired the following redeemable convertible notes in December 2008 issued by LLP:
First Notes A$13.4 million (22,333,333 notes convertible at $0.60 per security);
Second Notes A$25.0 million (100,000,000 notes convertible at $0.25 per security); and
RBD Convertible Notes A$120.0 million (200,000,000 notes convertible at $0.60 per security).

These notes have five year terms and are interest bearing at a coupon rate of 9.5% per annum. The notes are able to be converted to LLP stapled securities during certain periods within the five year term of the notes.

At 30 June 2009 these redeemable convertible notes are held at amortised cost and are reflected in Note 9. ‘Loans and Receivables’ together with embedded derivatives on these notes which are held at fair value. At 30 June 2009 the fair value of these options was A$3.0 million.

During the year Lend Lease sold Retirement by Design villages and an aged care facility to LLP for consideration of A$133.4 million of which A$120.0 million was settled via issue of redeemable convertible notes.

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 2009 the loan balance was A$30.3 million (June 2008: A$25.5 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; and
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.

173

Notes to the Consolidated Financial Statements continued

36. Non Key Management Personnel Related Party Information continued Associates and Joint Venture Entities 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 2009	June 2008
	A$m	A$m
Revenue
Provision of services1
Associates	307.0	98.7
Joint venture entities	778.8	680.2

1 Includes A$5.9 million of Investment Management services (June 2008: A$5.1 million).

During the year Lend Lease purchased development properties from an associate for A$3.0 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. ‘Finance Costs’, Note 5. ‘Other Operating (Income) and Expenses’, Note 9. ‘Loans and Receivables’, Note 18. ‘Trade and Other Payables’ and Note 32d. ‘Commitments – Investments’.

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 to above and Note 11. ‘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 13. ‘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 advisery services, maintenance and insurances, strategic advice and management supervision services, administration, marketing and risk management services; and
Communities business: 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 2009	June 2008
	A$m	A$m
Revenue
Provision of services	60.3	64.5

37. Event Subsequent to Balance Date

Acquisition of Properties from Prime Retirement and Aged Care Property Trust (Prime Trust)

The Aged Care facilities and Retirement Villages will continue to be leased and managed by Lend Lease Primelife Limited following the change in ownership.

174

2009 Annual Consolidated Financial Report Lend Lease Corporation

Directors’ Declaration

In the opinion of the Directors of Lend Lease Corporation Limited (‘the Company’):
The financial statements and notes 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 2009 and of their performance 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 1.1.
There are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.
The Directors have been given the declarations required by Section 295A of the Corporations Act 2001 from the Chief Executive Officer and Acting Chief Financial Officer for the financial year ended 30 June 2009.

Signed in accordance with a resolution of the Directors:

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D A Crawford Chairman Sydney, 20 August 2009

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S B McCann Managing Director

175

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 2009, and the income statements, statements of changes in equity and cash flow statements for the year ended on that date, a summary of significant accounting policies and other explanatory notes 1 to 37 and the Directors’ Declaration 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 of the Group, 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.

Independence

In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001 .

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 2009 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 of the Group also complies with International Financial Reporting Standards as disclosed in Note 1.

176

2009 Annual Consolidated Financial Report Lend Lease Corporation

Report on the remuneration report

We have audited the Remuneration Report included in pages 79 to 102 of the Directors’ report for the year ended 30 June 2009. 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 2009, complies with Section 300A of the Corporations Act 2001 .

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KPMG

==> picture [131 x 57] intentionally omitted <==

C Hall Partner Sydney, 20 August 2009

177

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.

Annual Report

Shareholders have the option of receiving either: – a full statutory annual report; or – a shareholder review.

Lend Lease makes both the annual report and the shareholder review available online. 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 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.

178

2009 Annual Consolidated Financial Report Lend Lease Corporation

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$
7 September 2009	Final	16 cents	100%	9.4997	suspended	suspended
5 March 2009	Interim	25 cents	60%	5.292	suspended	suspended
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.

179

Shareholder Information continued

Share Information at a Glance at 31 August 2009 (31 August 2008)

	2009	2008
Number of shareholders	53,180	52,378
Shares issued	458 million	401 million
Percentage owned by 20 largest shareholders	73.93%	75.44%
Interim dividend	25 cents per share	43 cents per share
	(60% franked)	(40% franked)
Final dividend	16 cents per share	34 cents per share
	(100% franked)	(45% franked)
Total dividend	41 cents per share	77 cents per share
Dividendpayout ratio	61%	69.1%

Spread of Shareholdings

Details of the spread of shareholdings at 31 August 2009 (31 August 2008) are as follows:

	2009	2008
1 to 1,000 shares	30,783	30,862
1,001 to 5,000	18,985	18,315
5,001 to 10,000	2,230	2,074
10,001 to 100,000	1,089	1,043
100,001 shares and over	93	84
Total number of shareholders	53,180	52,378
Shareholders with less than a marketable parcel	2,742	2,204
	(representing	(representing
	59,884 shares)	50,897 shares)

Twenty Largest Shareholders at 31 August 2009

	No. of	% of Issued
Name	Shares	Capital
HSBC Custody Nominees (Australia) Limited	73,539,544	16.07
National Nominees Limited	72,834,174	15.92
J P Morgan Nominees Australia Limited	67,632,792	14.78
Citicorp Nominees Pty Limited	22,373,407	4.89
LL Employee Holdings Custodian Pty Limited	14,914,384	3.26
Cogent Nominees Pty Limited	13,712,129	3.00
LL Employee Holdings Custodian Pty Ltd	11,615,445	2.54
ANZ Nominees Limited	10,855,555	2.37
Australian Reward Investment Alliance	9,743,133	2.13
LL Employee Holdings Custodian Pty Limited	7,781,898	1.70
ANZ Nominees Limited	6,381,323	1.39
AMP Life Limited	5,745,932	1.26
Tasman Asset Management Ltd	4,620,055	1.01
Queensland Investment Corporation	4,141,423	0.91
RBC Dexia Investor Services Australia Nominees Pty Limited	2,797,985	0.61
Citicorp Nominees Pty Limited	2,560,428	0.56
Argo Investments Limited	2,547,814	0.56
Cogent Nominees Pty Limited	1,674,576	0.37
UBS Wealth Management Australia Nominees Pty Ltd	1,492,865	0.33
Brispot Nominees PtyLtd	1,295,780	0.28
		73.93

Substantial Shareholders as Shown in the Company’s Register at 31 August 2009

	Date of Last		% of Issued
Name	Notice Received	No. of Shares	Capital
Balanced Equity Management Pty Ltd	25 August 2009	38,239,408	8.36
LL Employee Holdings Custodian Pty Limited1	11 February 2009	36,469,535	8.04
AXA Asia Pacifc Holdings Limited	10 November 2008	30,147,921	7.47
Barclays Global Investors Australia Limited	31 August 2009	28,445,702	6.22
The Bank of New York Mellon Corporation	21 December 2007	20,527,138	5.12

1 This is a Lend Lease employee benefit vehicle.

180

2009 Annual Consolidated Financial Report Lend Lease Corporation

annual general meeting 2009

environmentallY frienDlY in everY waY

paper specifications

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 financials of this Report are printed on Sumo Offset Laser, an environmentally responsible paper manufactured under the environmental management system ISO 14001 using Elemental Chlorine Free (ECF) pulp sourced from certified, well managed forests. Sumo Offset Laser is FSC Chain of Custody (CoC) certified (mixed sources). 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.

printing specifications

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ContaCt Details

Lend Lease Corporation Limited ABN 32 000 226 228 Incorporated in NSW Australia

Registered Office Level 4, 30 The Bond 30 Hickson Road Millers Point NSW 2000 Australia

Contact

T: 61 (2) 9236 6111 F: 61 (2) 9252 2192 W: www.lendlease.com

2010 finanCial CalenDar

February Announcement of Half Year Results March Interim dividend payable August Announcement of Full Year Results September Final dividend payable November Annual General Meeting

Corporate DireCtorY

Directors D A Crawford, Chairman, S B McCann, Managing Director and Chief Executive Offcer P M Colebatch G G Edington P C Goldmark J A Hill D J Ryan M W Selway secretary W Hara stock exchange listings Australia New Zealand auditors KPMG	share registry and shareholder Queries Principal Register Computershare Investor Services Pty Limited GPO Box 2975 Melbourne VIC 3001 T: 61 (3) 9946 4460 (within Australia) or 61 (3) 9473 2500 (outside Australia) E: [email protected] W: www.computershare.com.au uK register B Davis & Co Park House, 158–160 Arthur Road Wimbledon Park, London SW19 8AQ T: 44 (20) 8947 3361 F: 44 (20) 8944 1039 W: www.bdavis.co.uk
10 Shelley Street Sydney NSW 2000	usa agent The Bank of New York
	Investor Services
	PO Box 11258
	Church Street Station
	New York NY 10286-1258
	T: 1 (212) 815 3700
	US Toll Free: 1 888 269 2377
precinct.com.au	E: [email protected] W: www.adrbny.com

precinct.com.au

Cert no. SGS-COC-003898

group wiDe environment performanCe*

Total water use¹

<8,000,000L

Municipal waste¹

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anZ Centre
• AustrAliA’s lArgest
SUSTAINABLE OFFICE
DEVELOPMENT
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• AustrAliA’s lArgest
SUSTAINABLE OFFICE
<500,000t
DEVELOPMENT
Municipal waste recycled¹
38%
Total project waste
<2,335,000t
Project waste recycled
72%
Greenhouse gas emissions¹
<285,000t
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* Details at

lendlease.com/sustainability

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transport
linKs
• trAms, Flexi
CARS AND GREEN
TRAVEL PLANS
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In offices and assets under management. NB: Environment performance figures have been rounded off.

Commitment to tHe future

CHilDren’s Hub

An internAtionAl BEST PRACTICE CHILDCARE CENTRE OPERATED BY GOWRIE VICTORIA

tHe gauge

First 6 stAr green STAR – OFFICE AS BUILT COMMERCIAL BUILDING TO BE OWNED BY A PROPERTY FUND

tHe merCHant

Key worKer RESIDENTIAL UNITS DELIVERED THROUGH A PUBLIC PRIVATE PARTNERSHIP MODEL

Victoria Harbour in Melbourne boasts the highest concentration of green commercial buildings nab@ in Australia. The precinct is DoCKlanDs • AustrAliA’s First working towards Climate GREEN CAMPUS STYLE COMMERCIAL BUILDING Positive* certification which aims to set a new global benchmark for leadership in large scale urban development that will minimise environmental impacts.

Sustainability in action at Victoria Harbour

next generation

Convesso

victoriA’s First GREEN STAR RATED RESIDENTIAL BUILDING UNDER THE GREEN BUILDING COUNCIL oF AustrAliA’s MULTI–UNIT RESIDENTIAL PILOT PROGRAM

Lend Lease is actively developing and investing in sustainable strategies through:

Green refurbishment and green buildings – creating greener buildings

Green utilities –

energy, water and waste solutions

water sensitive urban Design

A vAriety oF wAter SAVING STRATEGIES IMPLEMENTED ACROSS THE PROJECT

Urban regeneration – holistic development solutions

Climate Positive is a joint initiative between the Clinton Climate Initiative and the U.S. Green Building Council

lendlease.com

AI assistant

LENDLEASE GROUP — Annual Report 2009

65243_rns_2009-10-11_7e26fd7f-bb78-4f6f-b776-c39982fa23b4.pdf

Stock Exchange Announcement 2009 Annual Report to Shareholders

12 October 2009

ImPortant DateS In 2010

Performance at a glance for 2009

Lend Lease

IntrOducIng Our peOpLe

Operational

development pipeline

05 06 07 08 09

05 06 07 08 09

Our value proposition

Our approach

Agility and flexibility

Innovation

chairman’s report

the year ended June 2009

Looking ahead

outlook and dividend policy

chief executive Officer’s report

realising shareholder value from our advantages

performance targets

portfolio management

capital recycling

collaboration to maximise earnings

development management

Investment

management

project management & construction

Asset & property management

development management

Investment management

project management & construction

Asset & property management

Our strategy

Our strategic path forward

retail report

cAse study:

313@somerset, singapore exciting singapore retail opening

communities report

public private partnerships report

QuIck fActs:

project management and construction report

Kirstin riCh

cAse study: Anz centre, Australia Office accommodation

Investment management report

cAse study:

the dow jones

Our safety

lendlease.com

incident & injury free

safety dashboard

site logistics planning

Site initiatives include:

Our environment

developing leadership by working with leaders

clintonfoundation.org/cci

Legend

Our people

foundation – looking after employee wellbeing

Cranes for children

directors’ profiles

Other directorships and positions

p m colebatch

(Non Executive) Age 64

cbe

(Non Executive)

Age 63

directors’ profiles

p c goldmark (Non Executive) Age 68

j A hill

m w selway

d j ryan AO (Non Executive) Age 57

Other directorships and positions

experience and Qualifications

director and executive remuneration

Other executives in the category of the five highest paid

online

LENDLEASE GROUP Annual Report 2009