LENDLEASE GROUP — Annual Report 2013

Sep 29, 2013

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ASX Announcement

2013 Annual Report to Securityholders

30 September 2013

Copy of the 2013 Annual Report to securityholders of Lend Lease is attached. It is also available online at www.lendlease.com. The 2013 Annual Report will be sent to securityholders who have elected to receive a copy.

The 2013 Lend Lease Annual General Meeting will be held in the Ballroom, Four Seasons Hotel, 199 George Street, Sydney NSW on Friday 15 November 2013 at 10:00am. Please note that the Notice of Meetings and Securityholder Review will be dispatched in the coming weeks, either electronically or via email depending on the elected method of delivery.

ENDS

For further information, please contact:

Investor Relations: Suzanne Evans Head of Investor Relations Tel: 02 9236 6464

Media: Vivienne Bower Group Head of Corporate Affairs Tel: 0431 487 025

Lend Lease Corporation Limited ABN 32 000 226 228 and Lend Lease Responsible Entity Limited ABN 72 122 883 185 AFS Licence 308983 as responsible entity for Lend Lease Trust ABN 39 944 184 773 ARSN 128 052 595

Telephone +61 2 9236 6111 Facsimile +61 2 9252 2192 www.lendlease.com

1

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

Lend Lease

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Hunter Expressway, New South Wales, Australia.

Contents

Contents
Chairman’s Report	2
Chief Executive Offcer’s Report	3
Corporate Governance	4
Management Discussion and Analysis
of Financial Condition and Results of
Operations (MD&A)	18
Portfolio Report	38
Directors’ Report	66
Lead Auditor's Independence Declaration	114
Five Year Profle	115
Consolidated Financial Statements	116
Securityholder Information	176
Corporate Directory	180

Cover Image: One57, New York, USA

Lend Lease Corporation Limited ABN 32 000 226 228 Lend Lease Responsible Entity Limited ABN 72 122 883 185 AFS Licence 308983 as responsible entity for Lend Lease Trust ABN 39 944 184 773 ARSN 128 052 595

2 annual report 2013 Lend Lease

ChaIrMan’s report

Lend Lease has continued its strong performance in a challenging market. our enviable development and construction pipeline and funds management platform underpin our position as a leading international property and infrastructure Group

solid Financial performance

Lend Lease has delivered continuing profit growth for the financial year ended 30 June 2013, with Statutory Profit after Tax for the year of $551.6 million, up 10 per cent on the prior year. Operating Profit after Tax of $553.0 million was up nine per cent on the prior year (excluding net property revaluation losses of $1.4 million after tax). This result reflects the successful execution of our strategy and the benefits of our integrated property model. Our development business was a key driver of earnings growth this year, with contributions from the Barangaroo South urban regeneration project in Sydney; the sale of our stakes in the Greenwich Peninsula regeneration project in London and the Jem[®] development in Singapore; and a strong performance from our infrastructure development business.

Securityholders will receive a final distribution of 20.0 cents per security, unfranked. This brings the full year distribution to 42.0 cents per security, an increase of 11 per cent on financial year 2012.

Financial strength

The Group retained a strong financial position through the year, with cash of $1,538.4 million as at 30 June 2013, gearing of 6.1 per cent and undrawn capacity of $1,099.4 million. The strength of our balance sheet and access to third party capital means we have the financial flexibility to fund our pipeline and invest in other opportunities, in line with our strategy.

Integrated property Model

Our integrated model is a strong competitive advantage for Lend Lease. We have the capacity to source, plan, design, finance, structure and deliver large scale mixed use projects and to manage the complexities of multiple stakeholders. The ability to combine these skills and apply them within a strong social responsibility framework have been instrumental in securing major projects such as Barangaroo South and Darling Harbour Live (Australia) and Elephant & Castle (London).

Creating safe and sustainable places

Safety is our number one priority. We continue to make significant progress, reporting no fatalities on a Lend Lease controlled operation in the last financial year. This outcome demonstrates our uncompromising commitment and resolve to operate Incident & Injury Free.

We strive to create innovative and sustainable property and infrastructure solutions for our clients, investors and communities. Internationally, we are already benefiting from our commitment to creating sustainable solutions. More than 90 per cent of the major projects in our development pipeline achieving or targeting green certification. This year our key city regeneration projects Barangaroo South (Sydney), Victoria Harbour (Melbourne) and Elephant & Castle (London) were recognised by the C40 Cities Climate Positive Development Program for their strategies and approach to achieving climate positive outcomes. We are very proud of this result, and will continue our leadership position in green development globally.

our people

During the year a number of senior appointments were made, strengthening the operational capabilities of the Group and supporting our growth strategy. We have continued our focus on developing our leaders through our Leadership Development Programs, with a greater number of leaders attending in 2013.

New career and development tools were introduced for all employees to assist in supporting their development for future roles. We will continue to support the development of our people and will implement further programs in early 2014.

Our commitment to diversity is equally important. Lend Lease is committed to growing and sustaining a diverse and inclusive workplace and in the past year we have maintained our diversity target, with 19 per cent of senior executive positions held by women. Now in the second year of our Reconciliation Action Plan (RAP) we are working towards our goal to increase the representation of Aboriginal and Torres Strait Islander People in professional roles in Lend Lease. In 2013 we had ten Indigenous university interns working across the business as well as 40 year 10 and 11 students who participated in our Careers for the Future program which aims to support teenagers in completing high school.

Board Composition

During the year there were changes to the composition of the Board. After more than six years as an Independent Director, Julie Hill retired in November 2012. Ms Hill brought great energy and insight to the Board, in particular with her efforts to promote the Group’s diversity agenda.

The Board Nomination Committee met numerous times this year to review Board composition and ensure it is comprised of individuals who, in combination, bring a mix of expertise, skills, experience and diversity to contribute to the oversight and effective corporate governance at Lend Lease. To that end, I was pleased to announce the appointment of Nicola Wakefield Evans to the Lend Lease Board, effective 1 September 2013. Ms Wakefield Evans is well known as one of the Asian regions leading Mergers & Acquisitions, corporate governance and resources and energy lawyers and brings significant experience to the Board.

outlook

In the last few years we have embarked on a clear strategy, building an enviable pipeline of integrated project opportunities and creating a point of difference for Lend Lease. We have good visibility of a strong earnings growth trajectory over the next three years and are targeting a return on equity over the medium term of 15 per cent. Despite challenging macro-economic conditions, we believe Lend Lease is well placed for 2014 and beyond.

My thanks to fellow Board members, as well as the Lend Lease leadership team and all employees, whose dedicated efforts throughout the year have seen us grow our returns for securityholders and put us clearly on a path to achieving our goals.

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david Crawford ao Chairman

annual report 2013 Lend Lease 3

Ceo’s report

We have established a global pipeline of projects and built a substantial backlog as part of our strategy to establish a balanced and diversified portfolio. our focus is now on the successful delivery of these projects, which will deliver earnings and drive growth over the next three years

2013 has been another strong year for Lend Lease. During the year we repositioned our business, delivered strong financial results from our diversified businesses and increased our earnings visibility.

repositioning of the Business

Earlier in the year we restructured our Australia operations by separating into two businesses, Construction and Infrastructure and Property. Australia now accounts for more than two thirds of our earnings and the more focused structure delivers the support required given the significant scale of the operations.

In some sectors in the second half of the year, we took the opportunity to further reposition our businesses in the United Kingdom, the Americas and Australia. This included the transition of our four separate construction operations of Abigroup, Baulderstone, Project Management & Construction and Infrastructure Services into three sector based businesses focused on building, engineering and construction services, which completed on 1 August 2013.

diversified earnings

Our diversified platform continues to support the Group achieving our financial targets. The Group delivered an Operating Profit after Tax of $553 million, an earnings increase of nine per cent on the prior year. Our Development business was a key driver of the Group’s earnings, through the successful sale of our interests in the Greenwich Project in London and Jem[®] in Singapore, as well as the first profits to emerge from Barangaroo South in Sydney. Other drivers included our Infrastructure Development business, which closed three large Public Private Partnership deals in Australia and one in America during the year, increasing their contribution to Group profit, and increased earnings from our Americas business.

earnings Visibility over the next three Years

We have a significant pipeline across our business, with an estimated end value development pipeline of $37.4 billion, construction backlog revenue of $17.2 billion and funds under management of $15 billion. In 2014, we will commence the production of 11 apartment towers on sites in Australia and the United Kingdom already achieving pre-sales targets and expecting to deliver profits in fiscal years 2015 and 2016.

safety

As the Chairman noted, safety is our number one priority. We take an uncompromising approach to achieving our goal of operating Incident & Injury Free. It is crucial all of our people have the right systems, support and information to deliver safe outcomes and positively influence our safety culture across the entire supply chain. This includes complying with our Global Minimum Requirements which prescribe physical and operational safety standards for all business activities.

our people

To create the best places we need the best people. We have made significant investment in focusing on the development and training of both our leaders and front line workforce. We want to ensure our people have the right skills to be able to deliver for today and the future. This year we continued to build upon the strength of our leadership team across our development, construction and investment management businesses with several senior appointments.

outlook

Lend Lease is well positioned with a significant development and construction backlog, a strong balance sheet and access to third party capital to assist funding the delivery of the pipeline. Our focus now needs to be high quality execution of that pipeline. Our employees are committed to driving securityholders value by delivering the best places for our clients, investors, partners and communities.

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steve McCann Group Chief Executive Officer and Managing Director

our Integrated Model – a Competitive advantage

We have made considerable progress in delivering on our strategy in 2013. We have created a differentiated business through our integrated property model and have established our position as a leading international property and infrastructure Group. Our $6 billion Barangaroo South project in Sydney is a great example of our integrated model at work and is already delivering profits to the Group.

4 annual report 2013 Lend Lease

Corporate GoVernanCe

Commitment to Governance

This statement sets out the principle features of Lend Lease’s corporate governance framework and main governance practices.

Lend Lease is committed to exceptional corporate governance policies and practices which are fundamental to the long term success and prosperity of Lend Lease and its subsidiaries ( the Group ). Lend Lease continually reviews its governance practices to address its obligations as a responsible corporate entity.

Unless otherwise indicated, a reference in this Corporate Governance Statement to the Board is a reference to the Boards of Directors of Lend Lease Corporation Limited ( LLC ) and Lend Lease Responsible Entity Limited ( LLreL ) which is the responsible entity of the Lend Lease Trust.

ASX Listed Entities are required to report on the extent to which the company followed the governance recommendations set by the ASX Corporate Governance Council during the reporting period. The Group considers that throughout this period, the corporate governance framework complied fully with the ASX Corporate Governance Council’s Principles and Recommendations. A table setting out each Principle and the location of the associated disclosure in this Corporate Governance statement is located on the pages 16 to 17.

Date of this Corporate Governance Statement

This Corporate Governance Statement reflects the corporate governance and other related policies and practices in place for the Group as at 1 September 2013. Copies of all the governance documents can be found in the corporate governance area of the Lend Lease website at www.lendlease.com.

Governance Structure

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Lend Lease Board
Group Ceo
and Managing
director
personnel and risk Management
nomination sustainability Global
organisation and audit
Committee Committee Leadership team
Committee Committee
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annual report 2013 Lend Lease 5

1. Composition of the Board

relevant governance documents (see www.lendlease.com)

• n Lend Lease Corporation Limited Constitution

• n Board Charter n Policy on Independence of Directors

1.1 Composition and Membership

The Board consists of 10 directors of which 9 are independent. The Group’s Managing Director and Chief Executive Officer, Stephen McCann, is the only executive on the Board. Membership of the Board as at 1 September 2013 comprises:

• n David Crawford, AO – Chairman and Independent Non-Executive Director

• n Stephen McCann – Group Chief Executive Officer (CEO) and Managing Director

• n Colin Carter, AM – Independent Non-Executive Director

• n Phillip Colebatch – Independent Non-Executive Director

• n Gordon Edington, CBE – Independent Non-Executive Director

• n Peter Goldmark – Independent Non-Executive Director

• n Jane Hemstritch – Independent Non-Executive Director

• n David Ryan, AO – Independent Non-Executive Director

• n Michael Ullmer – Independent Non-Executive Director

• n Nicola Wakefield Evans – Independent Non-Executive Director (appointed with effect from 1 September 2013)

Profiles of the Directors including their skills, experience and expertise relevant to their position as well as the period they have held office as a director can be found in the Directors’ Report on page 67 of this Annual Report. As Nicola Wakefield Evans was appointed following the release of the Directors’ Report, her profile will be included in the 2013 Notice of Meeting and the Securityholder Review.

The Directors have a range of local and international experience and expertise, as well as specialised skills to assist with decision making and leading the Group for the benefit of securityholders.

1.2 Independent Directors

The Board’s Policy on the Independence of Directors sets out the criteria and guidelines for assessing the independence of Directors and 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.

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. Appropriate disclosures will be made to the market where the Board considers that an independent Director has ceased to be independent.

The Board assesses the independence of each Director each year and at any time on disclosure by a Director of any new interests or relationships.

The Board considers that all the Non-Executive Directors are independent and have remained so throughout the year. Executive Director, Stephen McCann Group CEO and Managing Director is not considered to be an independent Director due to his integral involvement in the day-to-day management of the Group’s businesses.

1.3 Chairman of the Board

The Chairman of the Board is elected by the Directors and serves as the primary link between the Board and management. The Board Charter prohibits the current or any former CEO of the Group from becoming Chairman and the roles of Chairman and Managing Director are separate.

It is the Chairman’s responsibility to provide leadership to the Board and ensure that the Board works effectively and discharges its responsibilities. The Chairman is responsible for ensuring that each Director participates fully in Board activities. He works with the Company Secretary to set and guide the Board agenda and ensure that Board meetings are held regularly throughout the year.

David Crawford has been Chairman of the Board since May 2003.

1.4 Retirement and Re-election of Directors

Under the Constitution of LLC, 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 submit themselves for re-election. Prior to standing, each director undergoes a performance evaluation which is considered by the Board in making a recommendation in respect to re-election.

1.5 Selection and Appointment of New Directors

The Nomination Committee is responsible for the recommendation to the Board in respect to the appointment of new Directors. The aim is to have a Board comprised of Directors with an appropriate mix and balance of skills, expertise, experience, diversity and independence. Board succession is constantly under review.

The process of selecting a new Director involves reviewing the experience of current Directors, identifying any gaps in the board skill-sets and commissioning an international recruitment firm to identify and present appropriate candidates following a comprehensive briefing as to the Board’s requirements. The Board has regard to a number of factors when reviewing candidates including technical skills and expertise, experience across relevant industries and geographic locations and diversity of background. The candidates undergo a thorough process which involves formal interviews with each of the Directors of the Board as well as comprehensive background checks.

New Directors must stand for election at the AGM immediately following their appointment.

During the year there were changes in the composition of the Board. Julie Hill retired in November 2012 and Nicola Wakefield Evans was appointed to the Board. Nicola is standing for election at the 2013 AGM and the Board unanimously endorses her election.

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Corporate GoVernanCe CONTINUED

1.6 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. They also receive a comprehensive information pack and attend briefings with management to enable them to gain an understanding of the Group’s businesses, strategy, key issues and operations. Visits to Lend Lease sites are part of the induction program.

All Directors have access to Group information, senior management and employees as required to enable them to fulfil their responsibilities. Management briefings are given at Board meetings and Directors are regularly briefed on key business and industry developments and matters material to their role. Presentations by external speakers are organised as part of the Board program to give Directors an overview and understanding of macro-issues affecting the Group. Directors are also encouraged to attend externally administered training seminars and programs.

1.7 Directors’ Remuneration

Details of the Group’s Remuneration Policy and the remuneration of Directors is contained in the Remuneration Report at page 102. The structure of Non-Executive Director remuneration is clearly distinguished from that of other senior executives. The principle distinction is that performance-based components do not form part of Non-Executive Directors’ remuneration in order to ensure their independence.

retirement Benefits plan

In recognition of feedback from securityholders the Directors resolved in 2010 to discontinue further awards of retirement securities. Any accrued securities have been preserved and will be paid to the Director on retirement. Non-Executive Directors appointed since January 2010 are not entitled to receive any retirement benefits, other than superannuation.

Further details of the retirement plan for Non-Executive Directors are provided in the Directors’ Report at page 103.

2. role and responsibilities

relevant policies and charters (see www.lendlease.com)

n Board Charter

n Performance evaluation process

2.1 Board Responsibilities

The Board Charter sets out the role, structure, responsibilities and operation of the Board as well as the function and division of responsibilities between the Board and senior management.

The main responsibilities reserved to the Board include the following:

• n approval of business strategy

• n approval of business plans which includes operating budgets

• n overseeing risk management, internal control and compliance systems

• n overseeing the integrity of the Group’s financial accounts and reporting

• receiving, considering and approving financial reports

• n

• n approval and monitoring of major investments, transactions, acquisitions or divestitures

• n determining capital structure and distribution policy

• n reviewing performance of the Group CEO and Executive Management Team

• n succession planning for the Group CEO

• n Non-Executive Director selection

• n reviewing Board performance

• n promoting diversity at all levels within the Group including setting measurable objectives and assessing progress towards achievement

• n reviewing certain governance policies

The Board Charter sets out these responsibilities in further detail and is reviewed on a regular basis to ensure the balance of responsibilities remains appropriate.

The Board delegates authority for all other functions and matters necessary for the day-to-day management of the Group to the Group CEO who delegates to senior management as required.

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

2.2 Meetings

The Board meets as often as necessary to fulfil its role and Directors are required to allocate sufficient time to the Group to perform their responsibilities effectively, including adequate time to prepare for Board meetings. There are eight scheduled Board meetings each year and additional meetings are held as required. During the year, 15 meetings of the Board were held. Further detail on the number of Board and Committee meetings held during the financial year and the attendance of Directors at those meetings is set out in the accompanying table.

The Board program is formulated to reflect the geographic spread of the Lend Lease businesses. Five scheduled Board meetings are held in Australia each year and one each in the UK, Americas and Asia. These meetings run over two or three days. The Group’s senior management is invited to attend and present at Board meetings where appropriate. In addition to the formal meeting, Non-Executive Directors attend business briefings and project site visits in each of the regions where they meet so that a deeper understanding can be gained of the activities and operations within each region.

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

annual report 2013 Lend Lease 7

			Number of
		Number of	Meetings
	Membership	Meetings Held1	Attended
Board	D A Crawford (Chairman)	15	15
	S B McCann (CEO)	15	15
	C B Carter2	15	13
	P M Colebatch	15	15
	G G Edington	15	14
	P C Goldmark	15	15
	J S Hemstritch	15	15
	J A Hill3	3	1
	D J Ryan4	15	14
	M J Ullmer	15	15
Board sub Committee meetings	G G Edington	1	1
	D J Ryan	2	2
	M J Ullmer	1	1
	standing Invitees:
	D A Crawford	1	1
risk Management & audit	D J Ryan (Chairman)	5	4
Committee Meetings	P M Colebatch	5	5
	G G Edington	5	5
	M J Ullmer	5	5
	standing Invitees:
	D A Crawford	5	5
risk Management and audit	D J Ryan (Chairman)	5	5
sub Committee no 1	M J Ullmer	5	5
	standing Invitees:
	D A Crawford	5	5
risk Management and audit	D J Ryan (Chairman)	6	6
sub Committee no 2	J S Hemstritch	6	6
	M J Ullmer	6	6
	standing Invitees: D A Crawford	6	6
personnel and organisation	P M Colebatch (Chairman)	16	16
Committee	J S Hemstritch	16	16
	D J Ryan	16	15
	J A Hill	3	1
	standing Invitees:
	D A Crawford	11	11
	C B Carter	2	2
	M J Ullmer	2	2
sustainability Committee	M J Ullmer (Chairman)	4	4
	G G Edington	4	4
	P C Goldmark	4	4
	C B Carter	2	2
	J A Hill	2	0
	standing Invitees:
	D A Crawford	4	4
nomination Committee	C B Carter (Chairman)	8	7
	D A Crawford	8	8
	P M Colebatch	8	8
	G G Edington	8	8
	P C Goldmark	8	8
	J S Hemstritch	8	8
	D J Ryan	8	7
	M J Ullmer	8	8
	J A Hill	3	1

• 1 Reflects the number of meetings held during the time the Director held office during the year. Seven of the 15 meetings were out of schedule board teleconferences constituted to address specific issues. G G Edington and C B Carter were unable to attend one each of these teleconferences, both of which were called at short notice.

• 2 C B Carter was unable to attend the November 2012 meeting as he had a timetable conflict.

• 3 J A Hill retired from the Board on 15 November 2012.

• 4 D J Ryan was unable to attend the April 2013 meeting due to ill health. Leave of absence was granted. D J Ryan received full briefings of the matters discussed.

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Corporate GoVernanCe CONTINUED

2.3 Board Performance

The Board conducts an annual review of its performance and that of the Chairman and individual Directors retiring and seeking re-election at the AGM. An external review is conducted biennially and an internal review is conducted each alternate year.

external review

The Miles Group has been engaged to undertake the next external review of the Board in 2014. The review will commence in January 2014 with the main areas of focus being:

• n Role of the Board;

• n Size, composition and experience of the Board;

• n Procedures and practices of the Board;

• n Meeting arrangements and meeting discipline;

• n Relationship with Management;

• n Individual Director effectiveness;

• n Onboarding education for new Directors; and,

• n New challenges.

The findings of the external review will be considered by the Board and appropriate action taken where required.

2.4 Independent Decision Making

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

To facilitate independent decision making by the Board, the Non-Executive Directors meet without management present at each Board meeting.

2.5 Company Secretary

Appointed by the Board the Group 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. Details of the experience and qualifications of the Company Secretary are set out in the Directors’ Report on page 70.

2.6 Senior Management

structure

The management structure of Lend Lease consists of the Group CEO and the Global Leadership Team.

Internal review and assessment

The Chairman of the Nominations Committee conducts and oversees this review and assessment.

An internal review was conducted in 2013. A key activity during the year was Board and committee succession planning and renewal. Following a review of the committees, Michael Ullmer was appointed to the position of Sustainability Committee Chairman, and Colin Carter was appointed to the role of Nomination Committee Chairman.

The review process includes interviews with Directors and senior management, may involve interviews with key stakeholders, and generates recommendations to ensure the Board continues to operate effectively with the requisite mix of skills and experience, and appropriate procedures.

The Chair of the Nomination Committee, acting in consultation with other Board members, is responsible for conducting an annual evaluation of the Group CEO and the Chairman of the Board.

The Global Leadership Team comprises the Group Chief Operating Officer, the Group Chief Financial Officer, the Group General Counsel, the Group Head of Corporate Affairs and the CEOs of the five regions – Property Australia, Construction & Infrastructure Australia, Americas, EMEA and Asia. The Global Leadership Team is responsible for managing the Group’s performance and key business issues in line with the Group’s long term strategy.

The Global Leadership Team meet on a regular basis and each meeting is chaired by the Group CEO.

performance review

The Board sets goals for the Group CEO who is responsible for setting goals for the Global Leadership Team in consultation with the Personnel and Organisation Committee. STI outcomes are based on performance during the year, and are primarily measured through the use of scorecards. Scorecards for the Group CEO and Global Leadership Team reflect short, medium and long term goals related to delivering financial returns, reshaping of the Group’s portfolio, setting up the business for future growth, embedding operational excellence and investing in people.

The Group CEO and the Personnel and Organisation Committee conduct a detailed review of the performance of the Global Leadership Team against these goals on an annual basis at the end of each financial year. In addition each member of the Global Leadership Team also conducts a performance evaluation of their own performance.

annual report 2013 Lend Lease 9

A review of the performance of all members of the Global Leadership Team was conducted in the financial year and was in accordance with the procedure described above.

The reviews by management are reported to and considered by the Personnel and Organisation Committee for the purposes of its consideration and ultimate recommendation to the Board on performance against scorecards.

remuneration

The Board continually considers the Group’s Executive Reward Strategy and during the past year a comprehensive assessment considered how the Group sets goals, how performance is measured, how performance should be translated into a remuneration package, and the factors that should determine the vesting of deferred awards. The Group’s Executive Reward Strategy, which consists of a framework and policy for governing how key senior employees are remunerated, supports the achievement of Lend Lease’s strategy of ‘Restore, Build, Lead’ to achieve long term sustainable growth for the Group.

The Board has comprehensively outlined the Executive Reward Strategy and framework in the Remuneration Report. The Remuneration Report explains how performance has been linked to reward outcomes at Lend Lease this year, and changes being made to remuneration policy going forward. Further information is set out in the Remuneration Report on page 92.

3. Board Committees

relevant policies and charters (see www.lendlease.com)

n	Audit and Risk Committee Charter
n	Personnel and Organisation Committee Charter
n	Sustainability Committee Charter
n	Nomination Committee Charter

The four permanent Committees of the Board are:

risk Management and audit Committee

The principal purpose of the committee is to assist the Board in fulfilling its corporate governance and oversight responsibilities in relation to the Group’s risk management and internal control systems, accounting policies and practices, internal and external audit functions and financial reporting.

personnel and organisation Committee

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. Full details of the committee’s work on behalf of the Board are set out in the Remuneration Report. This year there was a review of the Group’s Executive Reward Strategy in response to the concerns raised by securityholders in their comments on the 2012 Remuneration Report at the 2012 AGM and as expressed in separate discussions with stakeholders.

sustainability Committee

The committee assists the Board in monitoring the decisions and actions of management in achieving Lend Lease’s aspiration to be a sustainable organisation.

nomination Committee

The Committee assists the Board by considering nominations to the Board to ensure that there is an appropriate mix of expertise, skills, experience and diversity on the Board.

Membership, composition and key responsibilities of these Committees is set out in the accompanying table.

3.1 Overview of Board Committees

The Board recognises the essential role of committees in guiding the Company on specific issues. Four permanent Board Committees have been established to assist, advise and make recommendations to the Board on matters falling within their areas of responsibility. Each of the committees consist entirely of independent, Non-Executive Directors. The Chair of each Committee is not a Chair of other committees, or Chair of the Board. The performance of the Committees, its membership and the Charters are periodically reviewed.

Each committee is governed by a formal Charter setting out its objectives, roles and responsibilities, composition, structure, membership requirements and operation. The committees are required to meet quarterly or more often as considered necessary. Directors who are not a member of a committee have a standing invitation to attend meetings of committees. From time to time special subcommittees are formed to give the Board better guidance and provide oversight concerning specific matters.

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Corporate GoVernanCe CONTINUED

	Nomination Personnel and Organisation Risk Management & Audit Sustainability
MeMBers	Colin Carter (Chair) Phillip Colebatch David Crawford Gordon Edington Peter Goldmark Jane Hemstritch David Ryan Michael Ullmer Phillip Colebatch (Chair) Jane Hemstritch David Ryan David Ryan (Chair) Phillip Colebatch Gordon Edington Michael Ullmer Michael Ullmer (Chair) Colin Carter Gordon Edington Peter Goldmark
ChanGes sInCe Last report	Colin Carter succeeded Peter Goldmark as Chair of the Committee. Julie Hill ceased to be a member of the Committee on her retirement in November 2012. Julie Hill ceased to be a member of the Committee on her retirement in November 2012. No changes Julie Hill ceased to be a member of the Committee on her retirement in November 2012. Michael Ullmer succeeded Julie Hill as Chair of the Committee.
CoMposItIon	Minimum of three, non executive Directors Chair must be an independent director and not the Chair of the Board All requirements were met in the reporting period Minimum of three Directors Majority of the Committee to be independent Chair must be an independent director All requirements were met in the reporting period Minimum of three, non executive Directors All members must be independent Chair must not be Chair of the Board All members must be fnancially literate and at least one member has accounting or relevant fnancial expertise All requirements were met in the reporting period Minimum of three Directors Majority of the Committee to be independent Chair must be an independent director All requirements were met in the reporting period
MaIn areas oF responsIBILItY	Reviews size and composition of the Board Identifes and evaluates Board candidates Evaluates the performance of the Board and the performance of any directors standing for re-election at an AGM Establishes processes for the review of Board succession planning Reviews continuing education and development plan for Non Executive Directors Reviews and makes recommendations to the Board on contractual arrangements for the Group CEO and Global Leadership Team (GLT) Reviews and makes recommendations to the Board on remuneration programs and performance targets for the Group CEO and GLT and assessment of performance against these targets Monitors and advises the Board on succession planning for the Group CEO and members of the GLT Reviews and approves the strategies and practices for people management Reviews and makes recommendations to the Board on the remuneration framework for Non Executive Directors Reviews and makes recommendations to the Board on remuneration and required disclosures Reviews the effectiveness of Group polices on workplace diversity and equal opportunity Makes recommendations to the Board on external auditor appointment and rotation of audit partner Oversees quality and effectiveness of audits Reviews performance of the Internal Audit function Reviews the parameters of the Group’s risk/reward strategy. Reviews the effectiveness of the Group’s Enterprise Risk Management system and be assured that material risks are identifed and appropriate risk management processes are in place. Reviews signifcant fnancial reporting issues and assess the appropriateness of accounting policies and methods chosen by management Make recommendations to the Board as to whether fnancial statements should be approved Monitors the effectiveness of Group policies and practices that relate to compliance with laws, regulations and accounting standards Oversees the Group’s Environment, Health & Safety function Reviews the effectiveness of Group polices on corporate social responsibility Monitors the activities and programs of the Lend Lease Foundation Assists the Board in its oversight of the Group’s compliance with applicable regulatory requirements in relation to environmental matters, socially responsibility initiatives and health and safety issues

Lend Lease annual report 2013

11

The Committee has unrestricted access to senior management of the Group. The Committee reviews and recommends, 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

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

The CFO, the Group Head of The Chair liaises with the Risk and Insurance and the Group Chief Operating Head of Internal Audit have Officer on at least a quarterly a separate direct reporting basis or as required. The relationship to the Chairman. Group Chief Operating Officer One-on-one meetings are held supplies the Committee with on at least a quarterly basis or the information relevant to the as required Committee’s function The Committee meets with the external auditor without management present as appropriate

The number of meetings held by each Committee during the reporting period is set out on page 7 of the Corporate Governance Statement

4. risk Management

relevant governance documents (see www.lendlease.com) n Risk and Audit Committee Charter n Risk Management Policy

4.1 Enterprise Risk Management

Risk Management is a critical oversight responsibility of the Board. 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 Risk and Insurance. Corporate Risk Management liaises with regional 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:

• n advising on and implementing risk treatment strategies at Group level;

• n assisting management to embed Enterprise Risk Management;

• n assisting Group businesses to implement and maintain effective risk management practices;

• n maintaining effective early warning reporting systems; and,

• n consolidating information for presentation to the Risk Management and Audit Committee.

4.2 Risk Management Reporting

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

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

• n Financial

• n Legal/Regulatory

• n Health & Safety

• n Performance

• n Environment & Community

• n People

• n Property/Business Continuity

• n 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 or have a secondary effect.

The risk matrix defines the 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.

Lend Lease also has an Internal Audit function to provide Financial, Operational and Environment, Health & Safety assurance. The Group Head of Internal Audit reports to the Risk Management and Audit Committee as well as to the Group Chief Financial Officer and is independent from the external auditor.

4.3 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 risk modelling to identify the most important assumptions affecting the delivery of the Group’s business plans. Project Control Groups are set up as required to focus attention on particular risks.

The Group’s approach to risk management is guided by the International Standard on Risk Management, ISO 31000 on Risk Management.

4.4 Key Policies

In addition to Board delegated Limits of Authority a number of key specific policies govern the way Lend Lease conducts its business and manages material business risks. These policies (including the Risk Management Policy) are available at the corporate governance area of the Lend Lease website at www.lendlease.com.

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Corporate GoVernanCe CONTINUED

4.5 Integrity in Financial Reporting, Risk Management and Internal Control

The Group CEO and the Chief Financial Officer have declared in writing to the Board that, for the year ended 30 June 2013:

With regard to the Financial Reports of the consolidated entity comprising Lend Lease Corporation Limited and its controlled entities including Lend Lease Trust (together referred to as the ‘Consolidated Entity’) for the year ending 30 June 2013:

1. The Consolidated Entity’s financial records have been properly maintained in accordance with Section 286 of the Corporations Act; and

2. The Consolidated Entity’s financial statements and notes required by the Accounting Standards give a true and fair view of the Consolidated Entity’s financial position and performance and comply with Australian Accounting Standards.

With regard to the risk management and internal compliance and control systems of the Consolidated Entity for the year ended 30 June 2013, the declarations made in 1 and 2 above with respect to the integrity of the Consolidated Entity’s Financial Reports for the year ended 30 June 2013 are founded on a sound system of risk management and internal control and the system is operating effectively in all material respects in relation to financial reporting risks.

Since 30 June 2013, nothing has come to the attention of the Group CEO or the Chief Financial Officer that would indicate any material change to any of the statements made above.

The Group’s senior management has also reported to the Board of Lend Lease on the effectiveness of the management of material business risks for the year ended 30 June 2013.

4.6 External Auditor

KPMG is the external auditor of Lend Lease and its controlled entities. In April 2013, the Board commenced a tender process for the role of external auditor for the Group. A thorough process was undertaken, including the appointment of former ASIC Chairman Alan Cameron, AO as Probity Officer to oversee its robustness and independence. At the conclusion of the audit tender process in July 2013, it was announced that KPMG would continue as the Group’s external auditor.

In considering retaining KPMG as the existing auditor, an appropriate balance was required between ensuring audit independence and maximising audit quality. The Group is a large listed company, operating in a complex environment with complex business structures and operating models. KPMG has invested significant time and effort to understand the Group’s operations and the cumulative knowledge of Lend Lease obtained by KPMG over many years cannot be underestimated.

performance Management

The Risk Management and Audit Committee has the responsibility to oversee and appraise the quality and effectiveness of the audits conducted by the external auditor. The external auditor attends each meeting of the Committee and at every meeting, time is set aside so that the committee can meet with the external auditor without management present. The Committee Chairman meets with the external auditor at least quarterly, also in the absence of management.

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 partner. The lead partner is rotated every five years. The current audit engagement partner is Stuart Marshall who was appointed with effect from 1 July 2011.

provision of non audit and other services

Lend Lease has a comprehensive policy to ensure that services provided by the external auditor do not impact or have the potential to impact upon their independence. All non audit services need to be approved by both the Chairman of the Risk Management and Audit Committee and the KPMG lead partner to ensure that the proposed arrangement does not, or will not be viewed as compromising KPMG’s independence.

Under 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:

• n Bookkeeping, preparation of, and other services in relation to, accounting records and financial statements;

• n Design and implementation of financial information systems or financial controls;

• n 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;

• n Outsourced internal audit services;

• n Secondments;

• n Recruitment and other human resources services, including international assignee services;

• n Actuarial services;

• n Management functions;

• n Legal services;

• n Taxation advice of a strategic or tax planning nature;

• n Broker-dealer, investment advisor or investment banking services;

• n Work that is remunerated through a “success fee” structure;

• n Expert services unrelated to the audit; and,

• n Work that involves the auditor acting in an advocacy role for the Group.

The Chief Financial Officer and the auditor are each required to provide a statement that the non audit assignment will not impair the auditor’s independence. During the year KPMG, the Company’s auditor, performed certain other assurance services in addition to its statutory duties. The Board has considered the other assurance 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 assurance 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:

• n All other assurance 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

• n The other assurance 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.

• n Apart from conducting the external audit of the Group and undertaking other assurance services, KMPG were not retained to undertake any other assignments of any kind for the Group.

annual report 2013 Lend Lease 13

auditor’s Independence

The external auditor is required to provide to Lend Lease 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 in relation to the conduct of the audit.

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.

Fees

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

attendance at annual General Meeting

The external auditor is required to attend the AGM and be available to answer any questions on the conduct of any audits and the preparation and content of the auditor’s report.

5. Governance policies

relevant governance documents (see www.lendlease.com)

• n External Communications and Continuous Disclosure Policy

• n Securities Trading Policy

• n Code of Conduct

• n Political Donations Policy

5.1 Securityholder Communications and Continuous Disclosure

The Group has an External Communications and Continuous Disclosure Policy designed to ensure that Lend Lease complies with the continuous disclosure obligations set out in the ASX Listing Rules.

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 sets out the protocols applicable to Directors, executive officers and employees designed to ensure that Lend Lease complies with these continuous disclosure obligations.

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.

Communications with securityholders

Lend Lease also recognises that whilst there is a legal obligation of disclosure there is also an ethical obligation to securityholders to ensure that investor confidence is maintained through full and timely communication and disclosure to securityholders and the market.

The External Communications and Continuous Disclosure Policy is designed to facilitate this objective, and promotes effective communication with securityholders.

The Policy ensures that any announcements made on the ASX are posted on the Lend Lease website as soon as practicable following confirmation of receipt by the ASX.

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:

• n copies of current and past annual and half-year reports are available on the website;

• n results presentations made to analysts or institutional investors are available on the website; and,

• n 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.

In addition, securityholders can contact us at any time through the Investor Relations team, with contact details available on our website.

annual General Meeting

The Annual General Meeting (AGM) is the primary opportunity for securityholders to meet face-to-face with the Board and senior executives. The meeting provides an update to securityholders on the Group’s performance and offers an opportunity for securityholders to ask questions and vote on important matters affecting the business. Lend Lease encourages participation at the AGM and securityholders are invited to submit questions ahead of the AGM by completing the relevant form accompanying the Notice of Meeting. Directors also make themselves available after the formal part of the AGM to meet with securityholders. Key members of the Global Leadership Team are present at the meeting and available to answer questions.

For securityholders who are unable to attend in person the proceedings of the AGM are webcast live on the Lend Lease website and later archived for three months. Presentations made at the AGM are also available on the website for access by interested stakeholders. Copies of the speeches delivered by the Chairman and the Group CEO and the outcome of voting on the items of business are released on the ASX.

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 Lend Lease website is up to date.

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Corporate GoVernanCe CONTINUED

5.2 Lend Lease Core Values and Code of Conduct

Core Values

The Core Values of Lend Lease 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:

==> picture [506 x 187] intentionally omitted <==

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

|||
|---|---|
|Respect|Be dedicated to relationships.|
|We respect all people, their ideas and cultures.|
|Collaboration|Be one team.|
|We work together to achieve more through our unified culture and shared knowledge.|
|Integrity|Be true to our word.|
|Integrity is non-negotiable. We leave a positive impact through our actions and behaviours.|
|Excellence|Be exceptional in everything we do.|
|We seek, and are committed, to operating safely, achieving outstanding performance and the best outcomes.|
|Innovation|Be challenging in our approach.|
|We strive to find the best solution. We think outside the box and dare to do things differently.|
|Trust|Be open and transparent.|
|We earn and instil trust by being accountable at every level and in all of our interactions.|

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

Code of Conduct

The Lend Lease Code of Conduct which is endorsed by the Board, sets out the standards of conduct expected of our businesses and people, regardless of location. It applies to all Directors and employees of Lend Lease and operates in conjunction with our Core Values and the Employee Conduct Guide. A copy of the Code of Conduct can be found on the Lend Lease website.

Employees are encouraged to apply the following “Lend Lease Test” when in doubt as to whether any action might breach the Code of Conduct:

“Would I be willing to see what I’m doing or about to do described in detail on the front page of a national newspaper to be read by family and friends?”

Employees must not undertake any action that fails the "Lend Lease Test" even if it is not expressly prohibited by the Code of Conduct.

The Code is supported by various global, regional and local business unit policies and procedures. The Employee Conduct Guide summarises what is expected of employees in relation to the Core Values and Code of Conduct, as well as our Group policies and procedures. Completion of the Employee Conduct Guide e-learning training program is mandatory for all employees.

All employees of the Group are required to recertify their Employee Conduct Guide training on an annual basis.

Code of Conduct Breach reporting

The Code of Conduct Breach Reporting Policy supports the Code of Conduct and provides a mechanism for employees to raise concerns about unethical or illegal business conduct, including behaviour which seems to depart from the Core Values or Code of Conduct. This policy applies to all officers, employees and contractors of the Lend Lease Group in all jurisdictions where the Group operates.

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

The Policy also offers protection to anyone who reports concerns in good faith. If an individual’s identity is disclosed during the investigation process, the individual will not be disadvantaged in their employment by any Group company.

5.3 Conflicts of Interest

Lend Lease has systems and protocols in place to identify a conflict of interest and a framework for managing conflicts. A variety of measures have been adopted to manage conflicts of interest including Group policies, systems, lists and appropriate disclosures. Directors are required upon their appointment to disclose to Lend Lease any interests or directorships which they have with other organisations and update this information if it changes during the course of the directorship. Directors and senior executives are also 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. Directors are required to raise with the Group Company Secretary any matters that may give rise to a conflict of interest. Directors who have a conflict will not receive the relevant Board paper and are not present for the part of the Board meeting where the matter is considered.

General guidelines in relation to managing conflicts of interest can be found in the Code of Conduct, and a range of procedures designed to ensure compliance have been implemented at a Group and business level.

5.4 Trading in Lend Lease Securities

The Lend Lease Securities Trading Policy was updated in July 2013 and sets out the circumstances in which Directors and employees may deal in Lend Lease securities. The policy complies with the requirements of the ASX Listing Rules in relation to Securities Trading Policies.

Under the policy, Directors and Designated Executives must not deal in Lend Lease securities in any period other than:

• n the 6 week period commencing on the business day following the announcement of the annual results;

• n the 6 week period commencing on the business day following the announcement of the half year results;

• n the 6 week period commencing on the business day following the Annual General Meeting;

• n a period during which Lend Lease has a current prospectus or other form of disclosure document on issue under which persons may subscribe for Lend Lease securities; or

• n any other period determined by the Board, in advance, to be an open window period.

annual report 2013 Lend Lease 15

The policy requires Directors and Designated Executives to notify the Group General Counsel or Group Company Secretary prior to any dealings and Directors must also promptly provide details of any trade to the Company Secretary for disclosure to the ASX.

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 Lend Lease’s results.

The Policy reinforces the insider trading provisions of the Corporations Act. Trading in securities when in the possession of inside information that is not generally available to the public is prohibited at all times. The policy explicitly states that dealing in securities or procuring or communicating with others in relation to securities at any time is prohibited if it would be in breach of the insider trading rules.

Directors and Designated Executives must obtain the consent of the Chairman (or in his or her absence the Chair of the Risk Management and Audit Committee) and the Group General Counsel prior to entering into transactions or arrangements that operate to limit the economic risk of vested entitlements to Lend Lease securities, including margin loan arrangements. Transactions or arrangements must not be entered into other than during the prescribed trading periods.

5.5 Political Donations

The Lend Lease Group Political Donations Policy sets a firm and consistent standard across the Group that aims to ensure that public confidence is maintained in the Group and its relationships with governments and community leaders.

Lend Lease will not make any donations whether in cash or in kind to political parties or individuals holding or standing for public office. Lend Lease does however participate in public policy debate and policy development on issues that may impact the Group’s businesses and the interests of securityholders, employees and other stakeholders. At times, we do pay fees for Group employees to attend functions which involve discussion of issues relevant to the Group. Employees are required to obtain the prior approval of their Regional CEO before attending any function on behalf of Lend Lease which has political objectives. Where the function is primarily a political fund-raiser or where the amount paid for attending the event is in excess of a reasonable value, these are considered to be donations and are not permitted under the Policy.

6. diversity and Inclusion Governance

relevant governance documents (see www.lendlease.com)

• n Diversity and Inclusion Policy

• n Sustainability Committee Charter

• n Personnel and Organisation Charter

• n Nomination Committee Charter

6.1 Diversity at Lend Lease

At Lend Lease, diversity and inclusion is defined as ‘All the ways in which we differ’. Diversity of experience, diversity of thought and a collaborative environment leads to innovation. To be the leading international property and infrastructure group and achieve our vision to create the best places, we need a culture and an environment that embraces and respects difference, and where we attract, retain and enable the most talented people to perform.

The Lend Lease Board of Directors report on Lend Lease’s gender diversity performance in accordance with the Australian Securities Exchange Corporate Governance Principles and Recommendations. Lend Lease has measurable objectives for gender diversity, shown below.

• n Two out of ten Board Directors are women

• n Two out of ten members of the Global Leadership Team are women

• n At 30 June 2012, 32 per cent of our employees were women

• n In July 2012, after re-baselining our data to include the acquired Australian Infrastructure businesses, 15 per cent of senior executive positions were held by women. At that time we set a target that by 30 June 2014, 17 per cent of senior executive positions will be held by women

• n At the half way point in this period we have already achieved our target.

The Board assesses on at least an annual basis, the measurable objectives and the progress in achieving them. To encourage greater representation of women at senior levels, Lend Lease continues to develop initiatives targeting an improvement in gender diversity including refinement in recruitment processes, expansion in career and leadership development and mentoring.

6.2 Diversity and Inclusion Policy

The Lend Lease Diversity and Inclusion Policy was approved by the Board in April 2011. A copy of this Policy is available on the website. The Board fully supports Diversity and Inclusion and has a key role driving Lend Lease’s Diversity and Inclusion agenda. The Personnel & Organisation Committee is responsible for overseeing the Group’s diversity strategy and its progress towards achieving the Group’s measurable objectives.

The Board plays an active role in Lend Lease’s Diversity & Talent agenda and since 2011 has hosted regular networking forums with groups of high potential and diverse employees. These are regularly conducted in each region and are a key part of the strategy in developing and retaining our pool of diverse talent. The forums involve presentations and Q&A sessions from high potential and diverse employees, roundtable sessions and formal networking dinners.

6.3 Diversity Governance

Each region has a diversity council chaired by the regional Chief Executive Officer, a senior business leader or a diversity manager. Diversity councils are steering committees that facilitate a diverse, collaborative and inclusive culture. They provide the opportunity for discussion on ways to increase diversity and achieve best practice in terms of diversity policies. The diversity councils also oversee the activities of regionally based employee resource groups that represent and engage with employees directly on diversity related matters. Representatives from our employee resource groups sit on our diversity councils, together with a small number of human resource and senior management representatives. Employee Resource Groups have been set up to represent a wide range of diversity types such as age, all abilities, cultural, workplace flexibility, lesbian, gay, bisexual, transgender and intersex (LGBTI), and gender.

6.4 Employee Engagement

A priority at Lend Lease is to make the employee experience positive and productive, for individuals and the company. Lend Lease conducts a full employee survey biennially and a survey was completed in September 2013. During the past year, Lend Lease has continued to act on the results of our 2011 employee survey. Earlier this year a series of focus groups were conducted around the world to gather more detailed feedback on specific areas of employee engagement and leadership performance. The outputs from these sessions provided direct input to our global conference in March 2013 – the focus of which was Leadership.

16 annuaL report 2013 Lend Lease

Corporate GoVernanCe CONTINUED

Checklist of the Company’s compliance with the asX Corporate Governance principles and recommendations

			Relevant
	Principle/Recommendation		Section	Comply?
	principle 1 – Lay solid foundations for management and oversight
	1.1	Establish and disclose the functions reserved to the board and those delegated to senior executives.	2.1	Yes
	1.2	Disclose theprocess for evaluatingtheperformance of senior executives.	2.6	Yes
1.3		Provide the information indicated in theguide to reportingon Principle 1.	2.1, 2.6	Yes
principle 2 – structure the board to add value
2.1		A majorityof the board should be independent directors	1.1, 1.2	Yes
2.2		The chair should be an independent director.	1.3	Yes
2.3		The roles of chair and chief executive offcer should not be exercised bythe same individual.	1.3	Yes
2.4		The board should establish a nomination committee.	3.1	Yes
2.5		Companies should disclose the process for evaluating the performance of the board, its committees and	2.3, 3.1	Yes
		individual directors.
2.6		Provide the information indicated in the Guide to reportingon Principle 2.	1.1–1.3, 2.3, 3.1	Yes
principle 3 – promote ethical and responsible decision making
3.1		Companies should establish a code of conduct and disclose the code or a summaryof the code as to:	5.2	Yes
		− thepractices necessaryto maintain confdence 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
		unethicalpractices.
3.2		Companies should establish a policy concerning diversity and disclose the policy or a summary of	6.2	Yes
		that policy. The policy should include requirements for the board to establish measurable objectives
		for achieving gender diversity and for the board to assess annually both the objectives and progress in
		achievingthem.
3.3		Companies should disclose in each annual report the measurable objectives for achieving gender	6.1	Yes
		diversityset bythe board in accordance with the diversity policyandprogress towards achievingthem.
3.4		Companies should disclose in each annual report the proportion of women employees in the whole	6.1	Yes
		organisation, women in senior executivepositions and women on the board.
3.5		Provide the information indicated in the Guide to reportingon Principle 3.	5.2, 6.1, 6.2	Yes
principle 4 – safeguard integrity in fnancial reporting
4.1		The board should establish an audit committee	3.1	Yes
4.2		The audit committee should be structured so that it:	3.1	Yes
		− consists onlyof non-executive directors
		− consists of a majorityof independent directors
		− is chaired byan independent chair, who is not chair of the board
		− has at least three members
4.3		The audit committee should have a formal charter	3.1	Yes
4.4		Provide the information indicated in the Guide to reportingon Principle 4.	3.1	Yes
principle 5 – Make timely and balanced disclosure
5.1		Companies should establish written policies designed to ensure compliance with ASX Listing Rule	5.1	Yes
		disclosure requirements and to ensure accountability at a senior executive level for that compliance and
		disclose thosepolicies or a summaryof thosepolicies.
5.2		Provide the information indicated in the Guide to reportingon Principle 5.	5.1	Yes
principle 6 – respect the rights of shareholders
6.1		Companies should design a communications policy for promoting effective communications with	5.1	Yes
		shareholders and encouraging their participation at general meetings and disclose their policy or a
		summary of that policy.
6.2		Provide the information indicated in the Guide to reportingon Principle 6.	5.1	Yes

annuaL report 2013 Lend Lease 17

principle 7 – recognise and manage risk	principle 7 – recognise and manage risk
7.1	Companies should establish policies for the oversight and management of material business risks and	4.1, 4.3, 4.4	Yes
	disclose a summaryof thosepolicies.
7.2	The board should require management to design and implement a risk management and internal control	4.2	Yes
	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 from the chief executive offcer and the	4.5	Yes
	chief fnancial offcer that the declaration provided in accordance with section 259A of the Corporations
	Act is founded on a sound system of risk management and internal control and the system is operating
	effectivelyin all material respects in relation to fnancial reportingrisks.
7.4	Provide the information indicated in the Guide to reportingon Principle 7.	4.1–4.7	Yes
principle 8 – remunerate fairly and responsibly
8.1	The board should establish a remuneration committee	3.1	Yes
8.2	The remuneration committee should be structured so that it:
	− consists of a majorityof independent directors
	− is chaired byan independent chair
	− has at least three members	3.1	Yes
8.3	Companies should clearly distinguish the structure of non-executive directors’ remuneration from that of	1.7, 2.6	Yes
	executive directors and senior executives
8.4	Provide the information indicated in the Guide to reportingon Principle 8.	1.7, 2.6, 3.1	Yes

18 annual report 2013 Lend Lease

ManaGeMent dIsCussIon and anaLYsIs oF FInanCIaL CondItIon and resuLts oF operatIons (Md&a)

ta B L e o F C o n t e n t s

ta B L e o F C o n t e n t s
overview	19
Introduction	19
Financial Performance	20
Financial Position	21
Cash Flow	22
GroupFunding	22
On-Balance Sheet Debt	22
australia	23
KeyFinancial Results	23
Development	24
Construction	26
Investment Management	27
Infrastructure Development	27
asia	28
KeyFinancial Results	28
Development	28
Construction	29
Investment Management	29
europe	30
KeyFinancial Results	30
Development	30
Construction	31
Investment Management	31
Infrastructure Development	31
americas	32
KeyFinancial Results	32
Development	32
Construction	33
Infrastructure Development	33
Corporate	34
GroupServices	34
GroupTreasury	34
Appendix 1 – OperatingResults byRegion Detail	35
Appendix 2 – OperatingResults byLine of Business Detail	36
Appendix 3 – OperatingResults byRegion Detail in Local Currency	37

The following management discussion and analysis (MD&A) is based on the Lend Lease Group (the Group) Consolidated Financial Statements for the year ended 30 June 2013 and should be read in conjunction with those financial statements. All currency amounts in the MD&A are expressed in Australian dollars unless otherwise specified.

The Group’s Statutory results are prepared in accordance with International Financial Reporting Standards (IFRS) and are presented in the audited and reviewed consolidated financial statements. The Operating results are non-IFRS measures which are used by the Group to measure and assess performance, and to make decisions on the allocation of resources. The operating results exclude certain unrealised property investment revaluation gains and losses, which are identified in the audited consolidated financial statements.

annual report 2013 Lend Lease 19

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Introduction

Lend Lease’s vision is to create the best places, which supports its strategic direction ‘to be the leading international property and infrastructure group’. Our core lines of business are development, construction, investment management, services and ownership of property and infrastructure assets. The Group has clear priorities and is currently focused on the delivery and execution of its major projects, disciplined portfolio management, driving operational efficiencies and allocating capital to key growth platforms.

The Group operates a regional management structure focused on four major geographic regions: Australia, Asia, Europe and the Americas. The regional business units generate earnings from four lines of business, as follows:

• n development: involves the development of urban communities, inner-city mixed-use developments, apartments, retirement, retail, commercial and healthcare assets;

• n Construction: involves project management, building, engineering and construction services;

• n Investment Management: involves property and infrastructure investment management, property management and asset management and includes the Group’s ownership interests in property and infrastructure investments; and,

• n Infrastructure development: arranges, manages and invests in Public Private Partnership (PPP) projects.

2013 Key highlights

2013 Key highlights
	Operating	Underlying
	Proft after	Operating	Operating			Operating	Dividends/
	Tax	Cash fow	ROE	Net Debt	Gearing	EPS	Distributions
	A$m	A$m	%	A$m	%	cents	cents
2013	553.0	472.7	13.5	691.9	6.1	96.3	42
2012	507.2	(11.2)	13.6	655.2	6.3	88.7	38
percentage movement	+9%	Large	-0.1%	+6%	-0.2%	+9%	+11%

The Group made further progress implementing its strategy during the year with the following key achievements:

development:

• n estimated pipeline end value of A$37.4 billion (June 2012: A$37.2 billion);

• n Progress on Barangaroo south in Australia:

• Tenant pre-commitments of 71% for the commercial floor space in the first two towers (77% including current Memorandums of Understanding);

• Working with Crown Limited to reach an agreement to develop an international hotel;

• Planning approval for the first two residential towers;

• n Sale of the Group’s 25% interest in the Jem[®] retail asset in Singapore, which opened in June 2013;

• n Commencement of activity at elephant & Castle in the UK:

• Planning approval for the £1.5 billion regeneration masterplan achieved;

• Launch of the first two residential buildings, One The Elephant and Trafalgar Place, with 61% pre-sales achieved;

• n Divestment of the Group’s interest in Greenwich Peninsula Regeneration Limited in the UK.

Construction:

• n securing new work of A$12.7 billion including Sunshine Coast University Hospital; New Bendigo Hospital; and the Pacific Highway Nambucca Heads to Urunga upgrade in Australia; Kingsgate House in the UK; and 432 Park Avenue and Privatized Army Lodging (PAL) Group C in the US;

• n Successful completion of the construction of Jem[®] , a retail and office asset in Singapore;

• n Closing backlog revenue of A$16.2 billion (June 2012: A$15.1 billion). Backlog revenue increases to circa A$17.2 billion including Sydney International Convention, Exhibition and Entertainment Precinct which is at the preferred bidder stage.

Investment Management:

• n Funds under management of A$15.0 billion (June 2012: A$12.3 billion);

• n Launch of Lend Lease International Towers Sydney Trust with funding for the first two commercial towers at Barangaroo South;

• n Launch of the Lend Lease Jem Partners Fund and subsequent purchase of the Group’s 25% interest in Jem[®] .

Infrastructure development:

• n Financial close on three infrastructure development projects in Australia – Sunshine Coast University Hospital, Eastern Goldfields Regional Prison and New Bendigo Hospital;

• n Sale of a further two UK PPP assets to the UK Infrastructure Fund;

• n Financial close of the Privatized Army Lodging (PAL) Group C in the US.

Corporate:

• n A$0.6 billion of new debt issued (A$375.0 million Australian medium term notes and S$275.0 million Singapore bond).

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Financial performance

Income Statement

Financial performance Income Statement
	June 2013	June 2012	Percentage
	A$m	A$m	Movement
Revenue	12,208.9	11,547.5	6%
Other Income	222.2	154.9	43%
Expenses	(11,839.6)	(11,217.4)	(6%)
Share ofproft of equityaccounted investments	152.7	179.3	(15%)
eBItda	744.2	664.3	12%
Depreciation and amortisation	(86.9)	(77.4)	(12%)
eBIt	657.3	586.9	12%
Finance Revenue	44.0	62.2	(29%)
Finance Cost	(124.8)	(121.8)	(2%)
proft before tax	576.5	527.3	9%
Income tax expense	(22.6)	(18.4)	(23%)
External non controllinginterest	(0.9)	(1.7)	47%
operating proft after tax	553.0	507.2	9%
Propertyinvestment revaluations1	(1.4)	(5.8)	76%
statutory proft after tax	551.6	501.4	10%
securityholder returns
EPS on operating proft after tax	cents 96.3	88.7	9%
Return on equity (ROE)on operating proft after tax	% 13.5	13.6	0%
Weighted average stapled securities	no. 574.3	571.8	0%
Dividends/distributionsper stapled security	cents 42	38	11%
Franking	% 0	0	0%
Payout ratio on operating proft after tax	% 44	43	2%

1 Property investment revaluations include amounts reclassified from expenses and tax.

The key components of this result are as follows:

• n operating eBItda increased by 12% driven by a strong performance from the Development and Infrastructure Development businesses;

n The effective tax rate is 4% (June 2012: 3%) mainly due to benefits from asset sales, research and development, and the recognition of tax deductions associated with the retirement living and aged care business.

Income Statement by Line of Business

	reVenue1	eBItda	proFIt/(Loss) aFter taX
	June 2013 A$m June 2012 A$m June 2013 A$m June 2012 A$m June 2013 A$m June 2012 A$m
Development	1,163.9 563.0 354.3 74.9 403.2 166.1
Construction	10,548.8 10,475.8 316.9 475.7 192.8 284.7
Investment Management	185.7 336.6 101.1 191.2 71.9 158.2
Infrastructure Development	325.2 190.4 141.9 67.7 104.5 65.0
total operating businesses	12,223.6 11,565.8 914.2 809.5 772.4 674.0
Total Corporate	29.3 43.9 (170.0) (145.2) (219.4) (166.8)
total operating	12,252.9 11,609.7 744.2 664.3 553.0 507.2

1 Includes revenue and finance revenue from the Income Statement above.

Key line of business highlights include:

n development profit after tax increased by A$237.1 million to A$403.2 million, primarily due to earnings relating to the first two commercial towers at Barangaroo South, the sale of the Group’s interest in Jem[®] , and divestment of Greenwich Peninsula Regeneration Limited;

• n Construction profit after tax decreased by A$91.9 million to A$192.8 million, primarily due to the tightening of the Australian, Asian and UK construction markets and impacts of project underperformance in Australia and the UK;

• n Investment Management profit after tax decreased by A$86.3 million to A$71.9 million, due to the prior year including profit from the sale of Asia Pacific Investment Company No. 2 Limited and the New Zealand Retail Portfolio;

• n Infrastructure development profit after tax increased by A$39.5 million to A$104.5 million, primarily due to fees earned from the financial close of four infrastructure development projects – Sunshine Coast University Hospital, Eastern Goldfields Regional Prison, New Bendigo Hospital in Australia and the Privatized Army Lodging (PAL) Group C project in the US;

• n Corporate costs after tax increased by A$52.6 million to A$219.4 million due to the impact of one-off costs relating to the restructure of the Australia business, the transformation program and the Abigroup investigation.

annual report 2013 Lend Lease 21

Financial position

Statement of Financial Position[1]

Financial position Statement of Financial Position1
	June 2013	June 2012	Percentage
	A$m	A$m	Movement
Cash and cash equivalents	1,538.4	957.9	61%
Inventories	2,891.0	2,818.5	3%
Equityaccounted investments	585.5	470.2	25%
Investmentproperties	4,023.8	3,415.0	18%
Other fnancial assets	550.9	410.9	34%
Other assets	4,620.8	4,631.0	0%
total assets	14,210.4	12,703.5	12%
Current borrowings and fnancingarrangements		100.0	(100%)
Non current borrowings and fnancingarrangements	1,976.2	1,257.1	57%
Other fnancial liabilities	270.0	279.0	(3%)
Other liabilities	7,634.9	7,156.2	7%
total liabilities	9,881.1	8,792.3	12%
net assets	4,329.3	3,911.2	11%

• 1 The foreign exchange rates applied to the Statement of Financial Position as at 30 June 2013 are A$1 = £0.61 (June 2012: A$1 = £0.62), A$1 = US$0.93 (June 2012: A$1 = US$1.00) and A$1 = S$1.23 (June 2012: A$1 = S$1.26).

The key components of the financial position are as follows:

• n A strong liquidity position, with cash and cash equivalents of A$1,538.4 million (June 2012: A$957.9 million) and undrawn committed bank facilities of A$1,099.4 million (June 2012: A$1,242.5 million);

• n Inventories have increased by A$72.5 million to A$2,891.0 million, largely due to an increase in work in progress in Development Australia and UK;

• n Bluewater is held as inventory, and therefore measured in the financial statements at cost, which at 30 June 2013 was A$444.2 million (June 2012: A$433.6 million). The market value of 100% of Bluewater at 30 June 2013 increased by 8% to £1,830.0 million (A$3,000.0 million). The market value of the Group’s 30% direct interest in Australian dollars increased by 16% to A$900.0 million;

• n equity accounted investments increased by A$115.3 million to A$585.5 million, largely attributable to an increase in joint venture investments, with the award and financial close of Sunshine Coast University Hospital, Eastern Goldfields Regional Prison and New Bendigo Hospital during the year. In addition, during the year the Lend Lease International Towers Sydney Trust was launched with funding for the first two commercial towers at Barangaroo South. These increases have been partially offset by the sale of the Group’s 25% interest in Jem[®] ;

• n Investment properties have increased by A$608.8 million to A$4,023.8 million, primarily due to the acquisition of four retirement villages and capital expenditure and revaluations on senior living and other development properties. These increases were offset by the sale of the Aged Care business and one retirement village;

• n other financial assets have increased by A$140.0 million to A$550.9 million, primarily due to the A$71.7 million promissory note received on the sale of the Aged Care business and a fair value gain on the Group’s 10.1% investment in ARIF 3, which owns 75% of Jem[®] which is recognised in the fair value revaluation reserve and reflected in the Statement of Comprehensive Income rather than the Income Statement;

• n Current borrowings reduced as the Group repaid US$100.0 million of the US Private Placement during October 2012;

• n non current borrowings increased by A$719.1 million, mainly due to the Group’s issuance of S$275.0 million Singapore dollar-denominated senior unsecured notes, maturing in July 2017 and A$375.0 million Australian medium term notes maturing in November 2018 and May 2020;

• n other financial liabilities remain materially unchanged. They include lease liabilities in relation to Construction Australia’s infrastructure business and the Bluewater finance leases; and,

• n other liabilities have increased by A$478.7 million to A$7,634.9 million, primarily due to an increase in senior living resident liabilities arising from the acquisition of four retirement villages, partially offset by the reduction in resident liabilities following the sale of the Aged Care business.

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Cash Flow

The Group had a net cash inflow in the year of A$580.5 million. The Group considers cash flows from operations to include the cash flow from business operations and any activity associated with these operations; this is aligned to the Group’s definition of operating profit. As such, the underlying cash flows from the Group’s operating businesses were A$472.7 million during the year. This includes a reclassification of cash flows from investing to operating of A$377.8 million which include the divestment of the Group’s interest in Greenwich Peninsula Regeneration Limited (A$156.5 million) and Jem[®] (A$188.7 million), net cash inflow from Australia Development projects (A$96.3 million) and net cash outflow of A$3.6 million from Construction joint ventures.

Outlined in the table below are cash flows in accordance with accounting standards and as reported in the Group’s financial statements for the year.

	June 2013	June 2012
	A$m	A$m
Cash fows from operatingactivities	94.9	(46.1)
Cash fows from investingactivities	151.6	505.4
Cash fows from fnancingactivities	302.8	(566.0)
Effect of foreign exchange rate movements on cash and cash equivalents	31.2	18.4
total cash fows	580.5	(88.3)

The key components of the net cash inflow include:

• n operating cash inflows of A$94.9 million are largely due to net Construction inflows, offset by net development expenditure in Australia and UK;

• n Investing cash inflows of A$151.6 million include the proceeds from the sale of the Group’s interest in Greenwich Peninsula Regeneration Limited and Jem[®] offset by the launch of Lend Lease International Towers Sydney Trust;

• n Financing cash inflows of A$302.8 million primarily relate to new debt facilities – A$375.0 million Australian medium term notes and S$275.0 million Singapore bond, partially offset by the US$100.0 million partial repayment of the Group’s US Private Placement and dividends/distributions payments in the year.

Group Funding

Group Funding
		June 2013	June 2012
Net debt1	A$m	691.9	655.2
Gross borrowings to total tangible assets2	%	17.2	14.3
Net debt to total tangible assets, less cash3	%	6.1	6.3
Interest coverage4	times	6.4	6.0
Average cost of debt includingmargins	%	5.7	6.2
Average debt duration	years	4.3	4.7
Debt mix fxed:foating	ratio	77:23	77:23
Undrawn facilities	A$m	1,099.4	1,242.5

1 Borrowings, including certain other financial liabilities, less cash.

2 Borrowings, including certain other financial liabilities, divided by total tangible assets.

3 Net debt divided by total tangible assets, less cash.

4 Operating EBITDA plus interest income, divided by interest finance costs, including capitalised finance costs.

on-Balance sheet debt

on-Balance sheet debt
	Gross	Amortised
	Facility	Cost1	Drawn	Expiry
Bilateral credit facility	A$225m	A$223.8m	A$223.8m	Dec-15
Syndicated credit facility	A$975m	A$973.6m	A$348.6m	Various2
UK bond issue	£300m	A$486.0m	A$486.0m	Oct-21
Club revolvingcredit facility	£330m	A$541.0m	A$100.0m	Various3
US Private Placement	US$200m	A$214.8m	A$214.8m	Various4
Singapore bond	S$275m	A$222.1m	A$222.1m	Jul-17
Australian medium term notes	A$375m	A$372.1m	A$372.1m	Various5

1 Gross facility less unamortised transaction costs as recorded in the financial statements.

2 A$595 million expires in July 2014 and A$380 million expires in July 2016.

3 £165 million expires in December 2016 and £165 million expires in December 2017.

4 US$175 million expires in October 2015 and US$25 million expires in October 2017.

5 A$250 million expires in November 2018 and A$125 million expires in May 2020.

annual report 2013 Lend Lease 23

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Key Financial results

The key financial results for the Australia region are summarised below.

	reVenue	eBItda	proFIt/(Loss) aFter taX
	June 2013 A$m June 2012 A$m June 2013 A$m June 2012 A$m June 2013 A$m June 2012 A$m
Development	1,107.0 528.1 276.4 72.5 274.4 158.4
Construction	6,441.7 6,616.8 225.6 358.3 152.7 223.5
Investment Management	98.6 253.0 53.4 62.8 38.4 43.3
Infrastructure Development	87.4 13.4 58.9 7.6 41.1 4.7
total australia	7,734.7 7,411.3 614.3 501.2 506.6 429.9

In australia , profit after tax increased by A$76.7 million to A$506.6 million.

• n The development business was the main contributor to the increase in profit, primarily due to earnings relating to the first two commercial towers at Barangaroo South, partially offset by reduced residential activity in the year;

• n The Construction business results for the year have been impacted by the tightening of market conditions and the underperformance of some projects in the second half of the financial year;

• n The Investment Management business prior year results included the sale of the New Zealand Retail Portfolio to Lend Lease Real Estate Partnership New Zealand;

• n The Infrastructure development results include fees received following the financial close of Sunshine Coast University Hospital, Eastern Goldfields Regional Prison and New Bendigo Hospital.

The Australia business secured a number of significant projects during the year:

• n In July 2012, the Group, as part of the Exemplar Health consortium, was selected by Queensland Health to deliver the A$2.0 billion sunshine Coast university hospital . The consortium has entered into a PPP arrangement to design, construct, maintain and finance the hospital. The Construction business is performing the design and construction, and the Infrastructure Development business acted as financial adviser to the consortium. The Group will invest 50% equity in the project vehicle;

• n In March 2013, the Group achieved contractual close with the NSW Government to deliver the A$1.0 billion PPP component of the sydney International Convention, exhibition and entertainment precinct project, as part of the Darling Harbour Live consortium. The Construction business will perform the design and construction and the Infrastructure Development business is acting as PPP development manager and financial adviser to the consortium. The Group will invest 50% equity in the project vehicle. Financial close is expected in FY14;

• n In addition, the Group has executed Project Development Agreements with Infrastructure NSW and Sydney Harbour Foreshore Authority to develop a mixed-use site adjacent to the Sydney International Convention, Exhibition and Entertainment Precinct site, with an anticipated end development value in excess of A$1.5 billion;

• n In November 2012, the Group was awarded the contract for the redevelopment of the Lakeside Joondalup shopping Centre in Perth, WA with an end value of A$291.0 million. Construction commenced on the redevelopment during the year. The asset is owned 50% by Australian Prime Property Fund Retail and 50% by a Lend Lease investment mandate client;

• n In June 2013, the Construction business was awarded the A$500.0 million pacific highway nambucca heads to urunga upgrade .

In addition, the Group achieved a number of key milestones on the Barangaroo south development during the year:

• n The launch of Lend Lease International Towers Sydney Trust, with funding for the first two commercial towers;

• n Working with Crown Limited to reach an agreement to develop an international hotel;

• n Negotiations with tenants continued, with pre-commitments for 71% of the commercial floor space (77% including current Memorandums of Understanding);

• n In July 2013, planning approval was received for the first two residential buildings, Anadara and Alexander, totalling 159 apartments. Early enquiry for the apartments from potential customers is strong, with more than 5,000 enquiries and over 150 $10,000 registration fees paid to date.

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development

Residential and Commercial

Residential and Commercial includes the development of residential land lots, residential built-form (including houses, terraces and apartments) and commercial projects (including mixed-use, retail, office, hotels, light industrial and social infrastructure).

	resIdentIaL Land Lots	resIdentIaL BuILt-ForM	CoMMerCIaL3	totaL
	June 2013 June 2012 June 2013 June 2012 June 2013 June 2012 June 2013 June 2012
Number ofprojects	38 39
settlements1 Number of units	2,295 2,059 173 523 2,468 2,582
Gross sales value(A$m)	457.5 460.5 124.8 549.9 627.9 90.2 1,210.2 1,100.6
pre sales1,2 Number of units	1,312 1,369 505 390 1,817 1,759
Gross sales value(A$m)	251.3 277.9 364.4 288.7 60.1 87.0 675.8 653.6
Backlog4 Zoned residential units5	55,545 57,910 13,620 11,935 69,165 69,845
Unzoned residential units	466 466 466 466
Commercial(sqm/000s)	5,552 5,814 5,552 5,814

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

2 Pre sales do not form part of profit after tax in the current year and are expected to be recognised in future years. Pre sales land lots represent contracts entered into prior to 30 June 2013 that have not met the revenue recognition criteria. Pre sales built-form represents contracts entered into prior to 30 June 2013 for buildings that have not achieved completion. Joint venture sales are shown at 100% of sales value.

• 3 The number of units settled and pre sales number of units are not relevant measures for the commercial segment above.

• 4 Backlog – residential includes the total number of units in both Group-owned and joint venture projects. The actual number of units for any particular project can vary as planning applications are approved.

• 5 The June 2012 zoned backlog residential units have been restated from 70,120 to 69,845, to reflect a revised position on the Ropes Crossing project.

Key trading events in the residential and Commercial sector during the year include:

n residential land lots:

• Settlements increased by 11%, reflecting improved trading in NSW from Jordan Springs; in Qld from new communities projects, Yarrabilba and Stoneleigh Reserve; and in WA from Alkimos and Coolbellup;

• Pre sales decreased by 4% from the prior year to 1,312 units;

• Average price per lot settled decreased by 11%, and pre sold average price decreased by 6% reflecting a change in product mix.

n residential built-form units:

• Settlements reduced by 67%, due to project completions at Victoria Harbour and Jacksons Landing;

• Average price per unit settled of A$721,200 reflects the Group’s planned response to change in market demand for smaller, more affordable apartments rather than larger, premium apartments. The prior year average price of A$1,051,000 primarily comprised premium apartments at Jacksons Landing in Sydney and Convesso at Victoria Harbour;

• Pre sales increased by 30% to 505, due to pre-sales at Richmond, The Green at RNA Showgrounds and Concavo at Victoria Harbour;

• Average price of pre sales decreased by 3% in response to a change in market demand for smaller, more affordable apartments rather than larger, premium apartments.

n Commercial:

• Sales of A$627.9 million primarily relate to the funding of the first two commercial towers at Barangaroo South, however, there have also been settlements at Victoria Harbour, Jacksons Landing and Varsity Lakes during the year.

n Backlog:

• Remains largely unchanged as the business focuses on execution and delivery of the existing portfolio;

• The execution of the project Development Agreement on Waterbank, Perth has added 800 residential built-form units and 20,000 commercial square metres to backlog;

• The Group executed project Development Agreements in relation to the A$1.5 billion mixed-use site adjacent to the Sydney International Convention, Exhibition and Entertainment Precinct project, which is reflected in backlog;

• Subsequent to 30 June 2013, the Group executed a Development Agreement for Batman’s Hill, Vic redevelopment with an end development value of approximately A$1.5 billion. This project will add to backlog in future years.

annual report 2013 Lend Lease 25

Retirement Living and Aged Care

Retirement Living and Aged Care includes the development, management and ownership of retirement villages and aged care facilities.

retirement Living[1]

retirement Living1
	June 2013	June 2012
Number of retirement villages	71	71
Number of retirement units	12,417	12,606
Number ofprimaryretirement units settled	206	195
Gross sales value ofprimaryretirement units settled(A$m)	82.8	74.3
Number of resale retirement units settled	794	812
Gross sales value of resale retirement units settled(A$m)	263.4	266.0
Development backlog– Retirement village units(withplanningapproval)1	1,247	1,270
aged Care1,2
	June 2013	June 2012
Number of aged care facilities		30
Number of aged care beds		2,318
Aged care occupancy (%)		96.0
Development backlog– Aged care beds(with licences)1		583

1 Includes 100% of Group-owned, joint venture and managed properties.

• 2 The Group sold the Aged Care business during the year.

Key trading events in the retirement Living and aged Care sector during the year include:

• n The sale of the aged Care business for A$271.7 million to Australian Aged Care Partners, which is controlled by funds managed or advised by Archer Capital. The Group received cash proceeds of A$200.0 million in addition to a promissory note of A$71.7 million;

• n settlements of 1,000 retirement living units comprising:

• 206 units on villages under development (with an additional 85 reserved);

• 794 units across owned and managed villages (with an additional 221 reserved);

• n The business acquired three villages, Little Bay , ngunnawal and Waterford Links , and also sold three villages, Glen Woodley , riverwood and Claremont terrace , in the year, which has had a net reduction in the number of units in the portfolio;

• n The Group also completed the acquisition of several villages that were being managed and were previously included in the portfolio numbers at 30 June 2012. These include Martha’s point , Brentwood and three villages acquired from a Lend Lease managed fund – Keperra sanctuary , Fiddler’s Green and abervale .

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Construction

Construction
	June 2013 June 2012
Revenue(A$m)1	6,441.7 6,616.8
Grossproft margin(A$m)1	339.1 563.5
Revenue(A$m)2	7,351.8 7,503.3
Grossproft margin(A$m)2	454.6 693.4
Proft after tax(A$m)2	152.7 223.5
New work secured revenue(A$m)2,3	7,654.6 8,152.9
Backlogrevenue(A$m)2,3	9,560.9 9,264.5

• 1 Excludes revenue and gross profit margin from joint venture and associate projects, which are accounted for using the equity method.

• 2 Includes revenue and gross profit margin from joint venture and associate projects, which are accounted for using the equity method.

• 3 Excludes Sydney International Convention, Exhibition and Entertainment Precinct.

Key trading events in the Construction business during the year include:

• n profit after tax decreased by A$70.8 million to A$152.7 million, due to a tightening of market conditions and the impact of the underperformance of some projects in the second half of the financial year, the majority of which are substantially complete at year end;

• n Key projects contributing to earnings in the year included the Gold Coast University Hospital, Sunshine Coast University Hospital, Ipswich Motorway upgrade and Queensland Children’s Hospital in Qld; the new Royal Children’s Hospital and Craigieburn Town Centre in Vic; the Hume Highway upgrade, Hunter Expressway and Macleay River Bridge in NSW; City Central Tower 8 and Adelaide Oval in SA; and Northern Territory Secure Facilities in the Northern Territory;

• n new work secured during the year was A$7.7 billion. Key projects include Sunshine Coast University Hospital in Qld; the redevelopment of the Lakeside Joondalup shopping centre in WA; the design and construction of the New Bendigo Hospital and the City West Police Complex in Vic; Epping to Thornleigh Third Track Project Alliance, Pacific Highway Nambucca Heads to Urunga upgrade, early works package for the North West Rail Link, the Dr Chau Chak Wing Building at the University of Technology Sydney and the second commercial tower at Barangaroo South in NSW;

• n In March 2013 the Group achieved contractual close with the NSW Government to deliver the A$1.0 billion PPP component of the sydney International Convention, exhibition and entertainment precinct project, as part of the Darling Harbour Live consortium. The Construction business will perform the design and construction component. The project is not currently included in backlog but will significantly add to backlog in future years;

• n Backlog revenue at 30 June 2013 is A$9.6 billion and includes a mix of building and engineering projects. Key projects include basement works and the first two commercial towers at Barangaroo South, the University of Technology Sydney Faculty of Engineering and Information Technology and Dr Chau Chak Wing buildings, Hunter Expressway, Pacific Highway upgrade from Tintenbar to Ewingsdale and the M5 West Widening in NSW; Sunshine Coast University Hospital, Queensland Children’s Hospital and Cairns Base Hospital in Qld; the Lakeside Joondalup Shopping Centre in WA; the Melbourne Park and Box Hill redevelopments and the Regional Rail Link project in Vic; Adelaide Convention Centre Redevelopment and Adelaide Oval Redevelopment in SA; and a new correctional and mental health facility in the Northern Territory;

• n In June 2013, the Group announced its restructure of the Australia Construction business, through the consolidation of its Project Management and Construction, Abigroup, Baulderstone, and Infrastructure Services businesses. The strengths of these four businesses will be transitioned into sector-based businesses with one business in each of the building, engineering and construction services sectors. The new structure took effect on 1 August 2013 and will create more effective and competitive operating businesses and will enable greater leverage of skills and expertise, improved operational systems and efficiencies.

annual report 2013 Lend Lease 27

Investment Management

Investment Management
	June 2013	June 2012
Proft after tax(A$m)	38.4	43.3
Funds under management(FUM)1 (A$b)	10.3	8.8
Assets under management(AUM)2 (A$b)	5.3	5.2

1 FUM represents the gross market value of real estate and other related assets in managed funds and investment mandates of the Group.

• 2 AUM is based on the Group’s assessment of the market value of assets for which the Group provides property and asset management services to third-party owners.

Key trading events in the Investment Management business during the year include:

• n profit after tax decreased by A$4.9 million to A$38.4 million due to a reduction in investment income following the sale of the Group’s interest in the New Zealand Retail Portfolio in the prior year. This reduction has been partially offset by an increase in retail centre management income due to a full 12 months of management fees from Cairns Central and Centro Northgate;

• n The A$1.5 billion increase in FuM mainly relates to the launch of Lend Lease International towers sydney trust . In July 2012, the Group launched a wholesale investment vehicle, Lend Lease International Towers Sydney Trust, with A$2.0 billion of equity commitments for the funding and development of the first two commercial towers at Barangaroo South. The Group will provide fund management services to Lend Lease International Towers Sydney Trust and invest up to 25% of the total commitment. In addition, the cornerstone investors will have the opportunity to invest further equity in the funding of the third commercial tower.

Infrastructure development

Infrastructure development
	June 2013	June 2012
Proft after tax(A$m)	41.1	4.7
Grossproft margin(A$m)	87.4	24.7
Equityreturns(A$m)	1.1	(0.1)
Number ofprojects1	5	1
Invested equity (A$m)	44.1
Committed equity (A$m)2	106.7	15.0

1 Number of projects includes projects where the Group is preferred bidder and combines extensions of existing projects.

2 Committed equity at 30 June 2013 excludes Sydney International Convention, Exhibition and Entertainment Precinct.

Key trading events in the Infrastructure development business during the year include:

• n profit after tax increased by A$36.4 million to A$41.1 million, principally due to fees received by the business in relation to Sunshine Coast University Hospital, Eastern Goldfields Regional Prison and New Bendigo Hospital;

• n In July 2012, the Group, as part of a consortium, was selected by Queensland Health to deliver the A$2.0 billion sunshine Coast university hospital . The Infrastructure Development business acted as financial adviser and development manager to the consortium. The Group will invest 50% of the equity in the Exemplar Health project vehicle;

• n In December 2012, the Group, as part of a consortium, reached financial close on the A$250.0 million eastern Goldfields regional prison redevelopment project. The Infrastructure Development business acted as financial adviser and development manager for the consortium and the Group has committed to invest 50% of the equity in the Assure Partners Consortium project vehicle;

• n In April 2013, the State of Victoria awarded the contract for the A$630.0 million new Bendigo hospital project to the Exemplar Health consortium. In May 2013 financial close took place. The Infrastructure Development business acted as financial adviser and development manager for the Exemplar Health consortium, and the Group invested 50% of the equity in the project vehicle;

• n In March 2013, the Group achieved contractual close on the sydney International Convention, exhibition and entertainment precinct . Financial close is expected in FY14.

28 annual report 2013 Lend Lease

Md&a

asIa

Key Financial results

The key financial results for the Asia region are summarised below.

	reVenue	eBItda	proFIt/(Loss) aFter taX
	June 2013 A$m June 2012 A$m June 2013 A$m June 2012 A$m June 2013 A$m June 2012 A$m
Development	7.3 13.9 59.3 14.9 74.2 11.1
Construction	611.0 708.3 56.3 40.4 28.6 25.8
Investment Management	22.2 18.7 12.4 60.8 9.8 69.3
total asia	640.5 740.9 128.0 116.1 112.6 106.2

In asia , profit after tax increased by A$6.4 million to A$112.6 million.

• n The development business includes the profit on the sale of the Group’s interest in the Jem[®] retail asset in Singapore;

• n The Construction business profit after tax has increased by A$2.8 million to A$28.6 million, with the key contributors being finalisation of the Jem[®] project and continued delivery of the telecommunications rollouts across Japan;

• n The Investment Management prior year result included the partial sell down of the Group’s interest in Asia Pacific Investment Company No. 2 Limited and the investment income prior to its sale, plus the recognition of a deferred profit from the sale of the Group’s 25% direct ownership in PoMo.

development

development
	June 2013	June 2012
Proft after tax(A$m)	74.2	11.1
Number of developmentprojects	1	1
Backlog– commercial and retail(sqm/000s)	32	109

Key trading events in the development business during the year include:

• n profit after tax increased by A$63.1 million to A$74.2 million and primarily includes the profit on sale of the Group’s 25% interest in the Jem[®] project and associated utilisation of accumulated tax losses;

• n During the year, the Group completed the retail component of the Jem[®] mixed-use development project which was fully leased at year end;

• n The office component is due for completion in October 2013 and has been fully leased to the Singapore Ministry of National Development;

• n In June 2013, Jem[®] was sold to Lend Lease Jem Partners Fund Limited;

• n The current year backlog relates to the office component of Jem[®] .

annual report 2013 Lend Lease 29

Construction

Construction
	June 2013	June 2012
Revenue(A$m)1	611.0	708.3
Grossproft margin(A$m)1	102.1	71.2
Proft after tax(A$m)	28.6	25.8
New work secured revenue(A$m)1	414.2	665.7
Backlogrevenue(A$m)1	475.7	692.7

• 1 Nil revenue and gross profit margin from joint venture and associate projects.

Key trading events in the Construction business during the year include:

• n profit after tax increased by A$2.8 million to A$28.6 million. Key projects in Asia continue to include the Jem[®] mixed-use development project in Singapore and the telecommunications rollout across Japan;

• n revenue has decreased by A$97.3 million due to the finalisation of projects in Taiwan, which contributed significant revenues in the prior year. The decrease in Taiwan operations is partially offset by increased revenues in the Japan and Singapore operations;

• n The gross profit margin percentage has increased due to increased contributions from Japan and China, which have relatively higher margins compared to the prior year;

• n The new work secured revenue in the year principally comprises further telecommunications rollout work in Japan, the GEMS World Academy, Amgen and INSEAD Phase 3 in Singapore. These projects are all key components of backlog revenue as at 30 June 2013.

Investment Management

Investment Management
	June 2013	June 2012
Proft after tax(A$m)	9.8	69.3
Funds under management(FUM)1 (A$b)	3.3	2.2
Assets under management(AUM)2 (A$b)	3.5	1.9

• 1 FUM represents the gross market value of real estate and other related assets in the Group’s managed funds and investment mandates.

• 2 AUM is based on the Group’s assessment of the market value of assets for which the Group provides property and asset management services to third-party owners.

Key trading events in the Investment Management business during the year include:

• n profit after tax decreased by A$59.5 million to A$9.8 million. The prior year result included the profit from the partial sell down of the Group’s interest in Asia Pacific Investment Company No. 2 Limited and recognition of deferred profit from the sale of the Group’s 25% direct ownership interest in PoMo;

• n The increase in FuM is attributable to the launch of Lend Lease Jem Partners Fund Limited and the increased value of Lend Lease Asian Retail Investment Fund 3, which has a 75% interest in the Jem[®] development. During the year, Lend Lease Jem Partners Fund Limited was created to acquire the Group’s 25% direct interest in the Jem[®] development;

• n The increase in auM is mainly due to the retail component of the Jem[®] development commencing operations in June 2013 and the increased market value on Setia City Mall, which opened in Malaysia in May 2012.

30 annual report 2013 Lend Lease

europe Md&a

Key Financial results

The key financial results for the Europe region are summarised below.

	reVenue	eBItda	proFIt/(Loss) aFter taX
	June 2013 A$m June 2012 A$m June 2013 A$m June 2012 A$m June 2013 A$m June 2012 A$m
Development	16.2 18.0 24.5 (3.8) 56.4 0.2
Construction	881.9 1,105.0 (14.6) 32.3 (15.0) 21.2
Investment Management	64.9 64.8 35.3 45.1 23.7 32.6
Infrastructure Development	180.4 137.7 34.1 40.9 34.4 47.9
total europe	1,143.4 1,325.5 79.3 114.5 99.5 101.9

In europe , profit after tax decreased by A$2.4 million to A$99.5 million.

• n The development business is the main contributor to the Europe current year profit, predominantly due to the profit on the sale of the Group’s interest in Greenwich Peninsula Regeneration Limited, which completed in July 2012;

• n Construction profit after tax decreased by A$36.2 million in the year, primarily due to a reduction in volume across the UK, Spain, Italy and Russia; the underperformance of some projects in the second half of the year; and the cost of restructuring the UK business;

• n Investment Management profit after tax decreased by A$8.9 million due to reduced net investment income following the sale of the Group’s ownership interest in Chelmsford Meadows shopping centre in the prior year, which also included profit on the sale;

• n The Infrastructure development business current year result includes profit on the sale of two education PPP assets to the UK Infrastructure Fund, as compared to the prior year, which included the sale of five UK PPP assets to the UK Infrastructure Fund.

development

development
	June 2013	June 2012
Proft after tax(A$m)	56.4	0.2
Number ofprojects	27	23
settlements
Number of units settled1	9,206	245
Gross sales value of units settled(A$m)1,2	124.0	22.4
pre sales
Number ofpre sales1,3	326	6
Gross sales value ofpre sales(A$m)1,3	196.0	2.6
Backlog4
Residential zoned units	5,394	11,858
Residential unzoned units	533	3,294
Commercial(sqm/000s)	389	747

• 1 Includes 100% of joint venture projects and therefore will not necessarily correlate with the Group’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 2013 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. Joint venture sales are shown at 100% of sales value.

• 4 Backlog includes the total number of units in both Group-owned and joint venture projects.

Key trading events in the development business during the year include:

• n The movement in settlements and backlog is largely due to the sale of Greenwich Peninsula Regeneration Limited;

• n pre sales for the current year predominantly include Elephant & Castle sales for One The Elephant and Trafalgar Place. Sales launches for these sites occurred in January 2013 and April 2013, respectively;

• n During the year, the Group continued to progress its key urban regeneration project, elephant & Castle in Central London, with the following achievements:

• In November 2012, planning was achieved on the first residential phase, One The Elephant;

• In January 2013, the Group was granted planning permission by Southwark Council for the £1.5 billion masterplan;

• In February 2013, the Group was granted planning permission for Trafalgar Place;

• Pre sales commenced at One The Elephant and Trafalgar Place with 61% pre sold; and,

• Construction commenced in July 2013 on both One The Elephant and Trafalgar Place.

annual report 2013 Lend Lease 31

Construction

Construction
	June 2013 June 2012
Revenue(A$m)1	881.9 1,105.0
Grossproft margin(A$m)1	69.2 108.0
Revenue(A$m)2	885.3 1,108.5
Grossproft margin(A$m)2	72.6 111.7
(Loss)/proft after tax(A$m)2	(15.0) 21.2
New work secured revenue(A$m)2,3	1,132.2 813.1
Backlogrevenue(A$m)2,3	1,260.3 1,104.8

1 Excludes revenue and gross profit margin from joint venture and associate projects, which are accounted for using the equity method.

• 2 Includes revenue and gross profit margin from joint venture and associate projects, which are accounted for using the equity method.

• 3 June 2012 new work secured and backlog revenue has been restated for revised positions on certain projects.

Key trading events in the Construction business during the year include:

• n Gross profit margin has decreased due to the reduction in revenue in the UK, Spain and Italy; the underperformance of some projects in the second half of the year; and the cost of restructuring the UK business. Key gross profit margin contributors in the current year include the Birmingham Building Schools for the Future programme and UK Ministry of Defence projects; and,

• n new work secured revenue for the year includes Kingsgate House, UK Ministry of Defence projects, Cramlington Hospital and the Elephant & Castle projects – One The Elephant and Trafalgar Place.

Investment Management

	June 2013	June 2012
Proft after tax(A$m)	23.7	32.6
Funds under management(FUM)1 (A$b)	1.4	1.3
Assets under management(AUM)2 (A$b)	3.6	3.2

1 FUM represents the gross market value of real estate and other related assets in the Group’s managed funds and investment mandates.

• 2 AUM is based on the Group’s assessment of the market value of assets for which the Group provides property and asset management services to third-party owners.

Key trading events in the Investment Management business during the year include:

• n Bluewater contributed gross operating income of A$43.3 million before tax in the year (June 2012: A$40.9 million). The year on year increase is driven by a reduction in vacancy rates; and,

• n Bluewater is held as inventory, and therefore in the financial statements measured at cost, which at 30 June 2013 was A$444.2 million (June 2012: A$433.6 million). The market value of 100% of Bluewater at 30 June 2013 increased by 8% to £1,830.0 million (A$3,000.0 million). The market value of the Group’s 30% direct interest in Australian dollars increased by 16% to A$900.0 million.

Infrastructure development

Infrastructure development
	June 2013 June 2012
Proft after tax(A$m)	34.4 47.9
Grossproft margin(A$m)1	40.2 11.8
Equityreturns(A$m)2	15.5 52.4
Number ofprojects	25 24
Invested equity (A$m)	105.1 98.4
Committed equity (A$m)	17.7 9.7
Backlogrevenue(A$m)	1,518.5 910.7

1 Gross profit margin relates to asset and facilities management services provided and does not include equity returns or asset sales.

• 2 Equity returns include loan stock interest and the profit before tax from the sale of the Group’s equity interest in PPP assets.

Key trading events in the Infrastructure development business during the year include:

• n The Group was awarded preferred bidder to lead a consortium to design and build a €200.0 million hospital in treviso , Italy and provide facility management services over the 21 year concession period. The award and 10 years of associated future facilities management revenue has resulted in an increase in backlog revenue in the current year.

32 annual report 2013 Lend Lease

aMerICas Md&a

Key Financial results

The key financial results for the Americas region are summarised below.

	reVenue	eBItda	proFIt/(Loss) aFter taX
	June 2013 A$m June 2012 A$m June 2013 A$m June 2012 A$m June 2013 A$m June 2012 A$m
Development	33.4 3.0 (5.9) (8.7) (1.8) (3.6)
Construction	2,614.2 2,045.7 49.6 44.7 26.5 14.2
Investment Management	0.1 22.5 13.0
Infrastructure Development	57.4 39.3 48.9 19.2 29.0 12.4
total americas	2,705.0 2,088.1 92.6 77.7 53.7 36.0

In the americas , profit after tax increased by A$17.7 million to A$53.7 million.

• n During the current year, the development business completed and sold its ownership in the Bon Secours St. Francis Watkins Centre in Virginia and commenced construction on three new projects;

• n Construction profit increased by A$12.3 million due to the continued improvement in the core commercial markets of New York and Chicago and improved profit from the Military Housing Privatization Initiative projects due to realisation of earnings as more projects in the portfolio achieve substantial completion. The prior year was impacted by the New York investigation;

• n The Investment Management prior year result included profit relating to completion of the sale of the Group’s 50% ownership interest in the King of Prussia shopping mall; and,

• n Infrastructure development profit increased by A$16.6 million mainly due to reaching financial close of the US Department of the Army’s Privatized Army Lodging (PAL) Group C project.

development

Healthcare

development Healthcare
	June 2013	June 2012
Revenue(A$m)	33.4	3.0
(Loss)after tax(A$m)	(1.8)	(3.6)
Number ofprojects	8	6

The development business focuses on developing, financing, leasing and managing property in the healthcare sector.

Key trading events in the Development business during the year include:

• n Sale of the Group’s ownership in the Bon secours st. Francis Watkins Centre in Virginia. This was the first asset developed under the acquired Healthcare business (formerly named DASCO);

• n During the year, construction commenced on three new healthcare development assets and the business was also awarded preferred bidder on a further four projects; and,

• n The Healthcare business has expanded its operations from private providers to public provision with the selection as preferred bidder during the year on the Winston-Salem Veterans Affairs Healthcare Centre (A$100.0 million). The Group was awarded the contract in July 2013.

annual report 2013 Lend Lease 33

Construction

Construction
	June 2013	June 2012
Revenue(A$m)1	2,614.2	2,045.7
Grossproft margin(A$m)1	139.3	152.2
Revenue(A$m)2	2,618.9	2,063.1
Grossproft margin(A$m)2	140.9	152.7
Proft after tax(A$m)2	26.5	14.2
New work secured revenue(A$m)2	3,514.1	1,738.8
Backlogrevenue(A$m)2	4,937.1	4,003.5

1 Excludes revenue and gross profit margin from joint venture and associate projects, which are accounted for using the equity method.

2 Includes revenue and gross profit margin from joint venture and associate projects, which are accounted for using the equity method.

Key trading events in the Construction business during the year include:

• n During the year there was continued recovery in the Construction core markets, including New York and Chicago. There have also been signs of improvement in other areas, with preferred positions on new projects in San Francisco, Boston and Washington, D.C.;

• n new work secured of a$3.5 billion includes the following key projects: a 60 storey, 146 unit residential building at 56 Leonard Avenue in New York; the 455 North Park hotel and apartment building, and the 500 Lake Shore residential tower, both in Chicago; the LUMINA 655 unit residential building and two nine storey buildings in San Francisco; and the construction work on the recently closed final phase of the Privatization of Army Lodging (PAL), the Group C project;

• n Backlog revenue increased 23% to A$4.9 billion in the year to 30 June 2013 and includes key projects such as the residential project at 56 Leonard Avenue in New York, One57 a high-rise residential building at Carnegie and 57th Street in New York, a residential building at 400 Park Avenue South in New York, and LUMINA in San Francisco, as well as A$1.4 billion of construction from the Infrastructure Development pipeline.

Infrastructure development

Infrastructure development
	June 2013 June 2012
Proft after tax(A$m)	29.0 12.4
Grossproft margin(A$m)1	50.9 28.9
Equityreturns(A$m)	5.9 2.4
New work secured revenue(A$m)	73.8 56.4
Number ofprojects2	22 22
Invested equity (A$m)	69.7 64.8
Committed equity (A$m)	30.9 30.5
Backlogrevenue3	367.7 344.5
Backlog (number of units under management)
Operational(secured)	52,900 49,340
Preferred bidder(awarded)	6,800
total backlog	52,900 56,140

• 1 Gross profit margin relates to development and asset management services provided.

• 2 Number of projects includes extensions of existing projects and projects where the Group is the preferred bidder. Where a project has multiple phases, these have been combined on completion for the purposes of presentation. The 30 June 2012 MD&A disclosed 27 projects, this has now been revised to 22 projects.

• 3 Backlog revenue disclosed includes 10 years of backlog from facilities management, even though the contracts run for up to 50 years. Although backlog is realised over several years, the average foreign exchange rate for the current year has been applied to the closing backlog balance in its entirety as the average rates for later years cannot be predicted. In local currency, the backlog revenue is US$378.7 million (June 2012: US$358.3 million). Prior year backlog revenue has been restated to include equity returns.

Key trading events in the Infrastructure development business during the year include:

• n Financial close of the final stage of the Privatization of Army Lodging (PAL) Group C project drove an increase in new work secured and backlog revenue ;

• n Backlog unit reduction is due to the revision of development plans of the Privatization of Army Lodging (PAL) program prior to financial close; and,

• n The majority of Military Housing projects are approaching stabilisation of operations as the initial development periods come to completion. However, opportunities remain for further development over the remaining term of the ground lease. Performance in each project was in line with expectations for the year.

34 annual report 2013 Lend Lease

Corporate Md&a

Group services

Group services loss after tax increased by A$62.0 million to A$152.0 million due to the Group’s restructuring of the Australia business, the transformation program and the Abigroup investigation.

Group treasury

Group treasury manages the Group’s liquidity, foreign exchange exposures, interest rate risk and debt.

Group treasurymanages the Group’s liquidity, foreign exchange exposures, int	erest rate risk and debt.
	proFIt/(Loss) BeFore taX	proFIt/(Loss) aFter taX
	June 2013 A$m June 2012 A$m June 2013 A$m June 2012 A$m
Interest revenue	28.3 38.6 22.3 27.7
Interest expense and other costs	(117.7) (131.9) (84.0) (94.8)
Net hedge(cost)/beneft	(8.2) (13.6) (5.7) (9.7)
total Group treasury	(97.6) (106.9) (67.4) (76.8)

Key trading elements of the Group Treasury contribution during the year include:

• n Reduced interest revenue of A$10.3 million is due to lower average cash balances and interest rates compared to the prior year. The interest rate on invested cash averaged 3.5% per annum for the year (June 2012: 3.9%);

• n Reduced interest expense of A$14.2 million is primarily due to reduced facility costs and gains on mark to market derivatives. The Group’s weighted average cost of debt at 30 June 2013 is 5.7% (June 2012: 6.2%);

• n The Group hedges material foreign currency cash flows with any foreign exchange gains or losses allocated to the relevant business unit’s operating profit. The cost of these hedges is allocated to Group Treasury. The reduction in hedging costs reflects the decrease in the volume of hedges undertaken during the year together with the impact of changes in interest rates; and,

• n The Group uses natural hedging, where possible, to minimise its exposure to movement in foreign currency-denominated net assets. The impact of foreign exchange movements on the Group’s net assets is accounted for in the foreign currency translation reserve. In the year, the foreign currency translation reserve decreased by A$34.9 million.

annual report 2013 Lend Lease 35

Md&a

appendIX 1

operating results by region detail[3,4]

	reVenue	eBItda	proFIt/(Loss) BeFore taX1	proFIt/(Loss) aFter taX2
	June 2013 A$m June 2012 A$m June 2013 A$m June 2012 A$m June 2013 A$m June 2012 A$m June 2013 A$m June 2012 A$m
Australia Development	1,107.0 528.1 276.4 72.5 266.8 59.1 274.4 158.4
Construction	6,441.7 6,616.8 225.6 358.3 173.3 306.9 152.7 223.5
Investment Management	98.6 253.0 53.4 62.8 53.3 62.1 38.4 43.3
Infrastructure Development	87.4 13.4 58.9 7.6 58.9 7.5 41.1 4.7
total australia	7,734.7 7,411.3 614.3 501.2 552.3 435.6 506.6 429.9
Asia Development	7.3 13.9 59.3 14.9 59.3 14.9 74.2 11.1
Construction	611.0 708.3 56.3 40.4 54.1 39.7 28.6 25.8
Investment Management	22.2 18.7 12.4 60.8 12.4 60.7 9.8 69.3
total asia	640.5 740.9 128.0 116.1 125.8 115.3 112.6 106.2
Europe Development	16.2 18.0 24.5 (3.8) 24.8 0.3 56.4 0.2
Construction	881.9 1,105.0 (14.6) 32.3 (18.1) 27.9 (15.0) 21.2
Investment Management	64.9 64.8 35.3 45.1 34.6 44.7 23.7 32.6
Infrastructure Development	180.4 137.7 34.1 40.9 43.1 52.6 34.4 47.9
total europe	1,143.4 1,325.5 79.3 114.5 84.4 125.5 99.5 101.9
Americas Development	33.4 3.0 (5.9) (8.7) (6.0) (8.7) (1.8) (3.6)
Construction	2,614.2 2,045.7 49.6 44.7 47.4 42.1 26.5 14.2
Investment Management	0.1 22.5 22.5 13.0
Infrastructure Development	57.4 39.3 48.9 19.2 51.1 23.8 29.0 12.4
total americas	2,705.0 2,088.1 92.6 77.7 92.5 79.7 53.7 36.0
total operating businesses	12,223.6 11,565.8 914.2 809.5 855.0 756.1 772.4 674.0
Corporate GroupServices	1.0 5.3 (168.4) (119.6) (180.9) (121.9) (152.0) (90.0)
GroupTreasury	28.3 38.6 (1.6) (25.6) (97.6) (106.9) (67.4) (76.8)
total corporate	29.3 43.9 (170.0) (145.2) (278.5) (228.8) (219.4) (166.8)
total operating	12,252.9 11,609.7 744.2 664.3 576.5 527.3 553.0 507.2
Propertyinvestment revaluations	(2.0) (4.8) (2.0) (4.8) (1.4) (5.8)
total statutory	12,252.9 11,609.7 742.2 659.5 574.5 522.5 551.6 501.4

• 1 Profit/(loss) before tax is before adjusting for the amount attributable to external non controlling interests.

2 Profit/(loss) after tax is after adjusting for the profit after tax attributable to external non controlling interests of A$0.9 million (June 2012: A$1.7 million).

3 The foreign exchange rates applied to the Income Statement for the year to 30 June 2013 are A$1 = £0.66 (June 2012: A$1 = £0.65), A$1 = US$1.03 (June 2012: A$1 = US$1.04) and A$1 = S$1.27 (June 2012: A$1 = S$1.30).

4 The Group’s statutory results are prepared in accordance with International Financial Reporting Standards (IFRS) and are presented in the audited and reviewed consolidated financial statements. The operating results are non IFRS measures which are used by the Group to measure and assess performance, and to make decisions on the allocation of resources. The operating results exclude certain unrealised property investment revaluation gains and losses, which are identified in the audited consolidated financial statements.

36 annual report 2013 Lend Lease

appendIX 2 Md&a

operating results by Line of Business detail

	reVenue	eBItda	proFIt/(Loss) BeFore taX1	proFIt/(Loss) aFter taX2
	June 2013 A$m June 2012 A$m June 2013 A$m June 2012 A$m June 2013 A$m June 2012 A$m June 2013 A$m June 2012 A$m
Development Australia	1,107.0 528.1 276.4 72.5 266.8 59.1 274.4 158.4
Asia	7.3 13.9 59.3 14.9 59.3 14.9 74.2 11.1
Europe	16.2 18.0 24.5 (3.8) 24.8 0.3 56.4 0.2
Americas	33.4 3.0 (5.9) (8.7) (6.0) (8.7) (1.8) (3.6)
total development	1,163.9 563.0 354.3 74.9 344.9 65.6 403.2 166.1
Construction Australia	6,441.7 6,616.8 225.6 358.3 173.3 306.9 152.7 223.5
Asia	611.0 708.3 56.3 40.4 54.1 39.7 28.6 25.8
Europe	881.9 1,105.0 (14.6) 32.3 (18.1) 27.9 (15.0) 21.2
Americas	2,614.2 2,045.7 49.6 44.7 47.4 42.1 26.5 14.2
total Construction	10,548.8 10,475.8 316.9 475.7 256.7 416.6 192.8 284.7
Investment Management Australia	98.6 253.0 53.4 62.8 53.3 62.1 38.4 43.3
Asia	22.2 18.7 12.4 60.8 12.4 60.7 9.8 69.3
Europe	64.9 64.8 35.3 45.1 34.6 44.7 23.7 32.6
Americas	0.1 22.5 22.5 13.0
total Investment Management	185.7 336.6 101.1 191.2 100.3 190.0 71.9 158.2
Infrastructure Development Australia	87.4 13.4 58.9 7.6 58.9 7.5 41.1 4.7
Europe	180.4 137.7 34.1 40.9 43.1 52.6 34.4 47.9
Americas	57.4 39.3 48.9 19.2 51.1 23.8 29.0 12.4
total Infrastructure development	325.2 190.4 141.9 67.7 153.1 83.9 104.5 65.0
total operating Businesses	12,223.6 11,565.8 914.2 809.5 855.0 756.1 772.4 674.0
Corporate GroupServices	1.0 5.3 (168.4) (119.6) (180.9) (121.9) (152.0) (90.0)
GroupTreasury	28.3 38.6 (1.6) (25.6) (97.6) (106.9) (67.4) (76.8)
total corporate	29.3 43.9 (170.0) (145.2) (278.5) (228.8) (219.4) (166.8)
total operating	12,252.9 11,609.7 744.2 664.3 576.5 527.3 553.0 507.2
Propertyinvestment revaluations	(2.0) (4.8) (2.0) (4.8) (1.4) (5.8)
total statutory	12,252.9 11,609.7 742.2 659.5 574.5 522.5 551.6 501.4

• 1 Profit/(loss) before tax is before adjusting for the amount attributable to external non controlling interests.

• 2 Profit/(loss) after tax is after adjusting for the profit after tax attributable to external non controlling interests of A$0.9 million (June 2012: A$1.7 million).

annual report 2013 Lend Lease 37

Md&a

appendIX 3

operating results by region detail in Local Currency[1]

	reVenue	eBItda	proFIt/(Loss) BeFore taX2	proFIt/(Loss) aFter taX3
	June 2013 A$m June 2012 A$m June 2013 A$m June 2012 A$m June 2013 A$m June 2012 A$m June 2013 A$m June 2012 A$m
Australia Development	1,107.0 528.1 276.4 72.5 266.8 59.1 274.4 158.4
Construction	6,441.7 6,616.8 225.6 358.3 173.3 306.9 152.7 223.5
Investment Management	98.6 253.0 53.4 62.8 53.3 62.1 38.4 43.3
Infrastructure Development	87.4 13.4 58.9 7.6 58.9 7.5 41.1 4.7
GroupServices	1.0 5.3 (168.4) (119.6) (180.9) (121.9) (152.0) (90.0)
GroupTreasury	25.0 30.5 (2.2) (25.2) (46.8) (55.8) (30.4) (39.9)
total australia	7,760.7 7,447.1 443.7 356.4 324.6 257.9 324.2 300.0

	reVenue	eBItda	proFIt/(Loss) BeFore taX2	proFIt/(Loss) aFter taX3
	June 2013 A$m June 2012 A$m June 2013 A$m June 2012 A$m June 2013 A$m June 2012 A$m June 2013 A$m June 2012 A$m
Asia Development	7.3 13.9 59.3 14.9 59.3 14.9 74.2 11.1
Construction	611.0 708.3 56.3 40.4 54.1 39.7 28.6 25.8
Investment Management	22.2 18.7 12.4 60.8 12.4 60.7 9.8 69.3
GroupTreasury	0.3 0.3 0.3 0.3 0.3 0.3
total asia	640.8 741.2 128.0 116.1 126.1 115.6 112.9 106.5

	reVenue	eBItda	proFIt/(Loss) BeFore taX2	proFIt/(Loss) aFter taX3
	June 2013 £m June 2012 £m June 2013 £m June 2012 £m June 2013 £m June 2012 £m June 2013 £m June 2012 £m
Europe Development	10.7 11.7 16.2 (2.5) 16.4 0.2 37.2 0.1
Construction	582.1 718.3 (9.6) 21.0 (11.9) 18.1 (9.9) 13.8
Investment Management	42.8 42.1 23.3 29.3 22.8 29.1 15.6 21.2
Infrastructure Development	119.1 89.5 22.5 26.6 28.4 34.2 22.7 31.1
GroupTreasury	0.7 0.4 (0.1) (0.2) (26.5) (26.7) (20.3) (19.9)
total Great Britishpounds	755.4 862.0 52.3 74.2 29.2 54.9 45.3 46.3
total australian dollars4	1,144.5 1,326.2 79.3 114.1 44.3 84.4 68.7 71.2

	reVenue	eBItda	proFIt/(Loss) BeFore taX2	proFIt/(Loss) aFter taX3
	June 2013 US$m June 2012 US$m June 2013 US$m June 2012 US$m June 2013 US$m June 2012 US$m June 2013 US$m June 2012 US$m
Americas Development	34.4 3.1 (6.1) (9.0) (6.2) (9.0) (1.9) (3.7)
Construction	2,692.6 2,127.5 51.1 46.5 48.8 43.8 27.3 14.8
Investment Management	0.1 23.4 23.4 13.5
Infrastructure Development	59.1 40.9 50.4 20.0 52.6 24.8 29.9 12.9
GroupTreasury	2.0 7.4 0.6 (0.1) (11.3) (10.8) (6.7) (6.8)
total us dollars	2,788.1 2,179.0 96.0 80.8 83.9 72.2 48.6 30.7
total australian dollars4	2,706.9 2,095.2 93.2 77.7 81.5 69.4 47.2 29.5

• 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 external non controlling interests.

3 Profit/(loss) after tax is after adjusting for the profit after tax attributable to external non controlling interests of A$0.9 million (June 2012: A$1.7 million).

4 The foreign exchange rates applied to the Income Statement for the year to 30 June 2013 are A$1 = £0.66 (June 2012: A$1 = £0.65), A$1 = US$1.03 (June 2012: A$1 = US$1.04) and A$1 = S$1.27 (June 2012: A$1 = S$1.30).

38 annual report 2013 Lend Lease

portFoLIo report

ta B L e o F C o n t e n t s

ta B L e o F C o n t e n t s
australia	39
Development	39
Construction	42
Investment Management	47
Infrastructure Development	48
asia	49
Development	49
Construction	49
Investment Management	50
europe	52
Development	52
Construction	52
Investment Management	54
Infrastructure Development	55
americas	57
Development	57
Construction	58
Infrastructure Development	60
Key portfolio Metrics by Line of Business	62
Development	62
Construction	63
Investment Management	64
Infrastructure Development	65
GroupAssets	65

The Portfolio Report is based on the Lend Lease Group Consolidated Financial Statements for the year ended 30 June 2013 and should be read in conjunction with those financial statements.

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

annual report 2013 Lend Lease 39

australia

Development – Overview

australia Development – Overview
	June 2013	June 2012
Development Profle
Number of developmentprojects1	38	39
Number of retirement villages2	71	71
Number of aged care facilities3		30
Backlog Units and SQM4
Residential – Land units
Zoned	55,545	57,910
Unzoned
Subtotal Residential – Land units	55,545	57,910
Residential – Built-form units
Zoned	13,620	11,935
Unzoned	466	466
Subtotal Residential – Built-form units	14,086	12,401
total residential units	69,631	70,311
Commercial (sqm/000s)5
Zoned	5,552	5,814
Unzoned
total Commercial	5,552	5,814
retirement Village units	1,247	1,270
aged Care Beds(with licences)3		583

• 1 The number of development projects has been reduced as the remaining units at Jackson’s Landing, Forde and Caroline Springs were sold during the year and removed from the portfolio listing. Coolbellup, Western Australia and Haymarket (Sydney International Convention, Exhibition and Entertainment Precinct), NSW have been added to the portfolio listing.

• 2 The number of retirement villages includes owned and managed properties.

• 3 The Aged Care business was sold during the year.

• 4 Backlog includes Group-owned, joint venture and managed projects. The June 2012 backlog residential land units have been restated from 58,185 to 57,910 to reflect a revised position on the Ropes Crossing project.

• 5 Represents net developable land in relation to master-planned urban communities and net developable floor space for other developments.

40 annual report 2013 Lend Lease

portFoLIo report CONTINUED

australia

Development – Residential and Commercial Project Listing

						Estimated
			Estimated	Backlog	Backlog	Commercial
			Completion	Land	Built-Form	Backlog
Project	Location1	Ownership Interest	Date2	Units3	Units3	sqm/000s4
Zoned Projects
Woodlands5	Qld	Service agreement	2017	295	25
Forest Gardens	Qld	Owned(50% interest)	2014	5	85
VarsityLakes	Qld	Land management	2014			22
Springfeld Lakes	Qld	Land management	2021	3,110	620	58
RNA Showgrounds	Qld	Land management	2026		2,595	101
RockySprings	Qld	Land management	2060	11,735	420	1,115
		Staged acquisition
Yarrabilba	Qld	(100% interest)	2043	14,410	2,470	1,927
Fernbrooke Ridge	Qld	Land management	2019	670	165	1
Stoneleigh Reserve	Qld	Owned(100% interest)	2018	460	20	3
Lennox Head	NSW	Service agreement	2024	480		60
Bingara Gorge	NSW	Land management	2027	870		55
St Marys – Ropes Crossing5	NSW	Service agreement	2015	610
St Marys – Jordan Springs	NSW	Owned(100% interest)	2021	1,775	300	38
St Marys – Otherprecincts	NSW	Owned(100% interest)	2021	1,240		571
Nelsons Ridge	NSW	Land management	2017	150
Rouse Hill	NSW	Land management	2016	40	835	116
St Patricks	NSW	Land management	2014		5
Barangaroo South	NSW	Stagedpayments	2023		775	390
River Oaks	NSW	Land management	2042	4,995		137
Sydney International Convention,
Exhibition and Entertainment Project	NSW	Stagedpayments	2022		1,360	69
Springbank Rise	ACT	Owned(50% interest)	2016	250	85	3
subtotal zoned(carried forward)				41,095	9,760	4,666

1 Locations are Queensland (Qld), New South Wales (NSW) and Australian Capital Territory (ACT).

2 Estimated completion date represents the expected financial year in which the last unit will be settled for master-planned communities, and the construction completion date for apartments and non-residential projects.

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

4 Represents net developable land in relation to master-planned urban communities and net developable floor space for other developments.

5 Projects managed on behalf of the Lend Lease Communities Fund 1. The Group holds a 20.8% co-investment position in the fund.

annual report 2013 Lend Lease 41

australia

Development – Residential and Commercial Project Listing continued

						Estimated
			Estimated	Backlog	Backlog	Commercial
			Completion	Land	Built-Form	Backlog
Project	Location1	Ownership Interest	Date2	Units3	Units3	sqm/000s4
subtotal zoned projects
(brought forward)				41,095	9,760	4,666
Edgewater	Vic	Owned(100% interest)	2014		40
Craigieburn Town Centre	Vic	Owned(100% interest)	2014	55	30
Pakenham Valley	Vic	Land management	2014	55		13
Laurimar	Vic	Owned(100% interest)	2016	360	5
Atherstone	Vic	Land management	2035	3,945		99
Victoria Harbour	Vic	Land management	2021		2,205	126
Melton East	Vic	Staged acquisition	2019	795		12
Harpley	Vic	Land management	2027	3,875		334
Mayfeld
(formerlyknown as Cranbourne)	Vic	Owned(100% interest)	2018	510
Richmond	Vic	Owned(100% interest)	2016		520
		Staged acquisition
Blakes Crossing	SA	(100% interest)	2019	875	50	34
Mawson Lakes	SA	Land management	2014			11
Springwood	SA	Staged acquisition	2025	1,900	40	51
Alkimos	WA	Land management	2023	2,075	170	186
Coolbellup	WA	Land management	2014	5
Waterbank	WA	Land management	2022		800	20
total zoned				55,545	13,620	5,552
Unzoned Projects
Armadale	Vic	Land management			466
total unzoned				–	466	–
total				55,545	14,086	5,552

1 Locations are Victoria (Vic), South Australia (SA), and Western Australia (WA).

2 Estimated completion date represents the expected financial year in which the last unit will be settled for master-planned communities, and the construction completion date for apartments and non-residential projects.

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

4 Represents net developable land in relation to master-planned urban communities and net developable floor space for other developments.

42 annual report 2013 Lend Lease

portFoLIo report CONTINUED

australia

Development – Retirement Living and Aged Care Portfolio Summary Retirement Villages

Retirement Villages
Location1	oWned	ManaGed/Leased/other	totaL
	Number of Sites Units Number of Sites Units Number of Sites Units2 Backlog Units3
Qld	5 986 10 3,067 15 4,053 27
NSW	12 2,231 1 61 13 2,292 552
Vic	23 3,179 1 74 24 3,253 285
SA	3 382 3 382 23
WA	9 1,441 9 1,441 77
ACT	2 2 283
NZ	5 996 5 996
total retirement villages	59 9,215 12 3,202 71 12,417 1,247

• 1 Locations are Queensland (Qld), New South Wales (NSW), Victoria (Vic), South Australia (SA), Western Australia (WA), Australian Capital Territory (ACT), and New Zealand (NZ).

• 2 Total units include only completed retirement village units at Group-owned and managed sites.

• 3 Backlog units include Group-owned and managed sites. The actual number of units for any particular village can vary as planning approvals are obtained.

Construction

New Work Secured and Backlog Revenue

Construction New Work Secured and Backlog Revenue
	New Work	New Work
	Secured	Secured	Backlog	Backlog
	Revenue1	Revenue1	Revenue2	Revenue2
	June 2013	June 2012	June 2013	June 2012
	A$m	A$m	A$m	A$m
Building	4,826.2	4,475.2	6,301.8	5,254.1
Engineering	2,056.8	3,009.3	2,631.4	3,459.7
Services	771.6	668.4	627.7	550.7
total australia	7,654.6	8,152.9	9,560.9	9,264.5

• 1 New work secured revenue is the total revenue to be earned from projects secured during the year.

• 2 Backlog revenue is the total revenue to be earned from projects in future financial years, based on projects secured as at 30 June 2013.

Backlog Realisation

Backlog Realisation
	Year Ending	Year Ending	Post
	June 2014	June 2015	June 2016	Total
	%	%	%	%
Building	53	26	21	100
Engineering	71	19	10	100
Services	50	27	23	100
total australia	58	24	18	100

annual report 2013 Lend Lease 43

australia

Construction – Major Projects – Building[1,7]

				Construction
			Contract	Value	Secured	Completion
Project	Location2	Client	Type3	A$m	Date4	Date5	Sector	Description
Sunshine Coast	Qld	Queensland	LS	1,570	2013	2022	Healthcare	Design and construction
UniversityHospital6		Health						of a new 738 bed hospital
Barangaroo South	NSW	Lend Lease/	LS	1,511	2012	2016	Commercial	Design and construction of
		Barangaroo Development Authority						the basement, infrastructure works and the frst two commercial offce buildings
Gold Coast	Qld	Queensland	MC	1,298	2010	2014	Healthcare	Design and construction of
UniversityHospital		Health						a new 750 bed hospital
The New Royal	Vic	Children’s	LS	1,083	2008	2014	Healthcare	Design and construction
Children’s Hospital		Hospital						of a new 334 bed hospital
		Partnership
Queensland	Qld	Queensland	MC	879	2009	2014	Healthcare	Design and construction
Children’s Hospital		Health						of a new 359 bed hospital
New Bendigo Hospital	Vic	Victorian	LS	630	2013	2018	Healthcare	Design and construction
		Government/						of a new 372 bed hospital
		Bendigo Health
Commonwealth	ACT	Federal	MC	593	2008	2014	Government	Design and construction
New Build		Government						of a 40,000 square metres commercial offce building
Adelaide Oval	SA	Department	D&C	365	2012	2014	Entertainment/	Design and construction for
Redevelopment		of Planning,					Recreation	the redevelopment of existing
		Transport and						oval into a 50,000 seat
		Infrastructure						multipurpose stadium
Northern Territory	NT	Sentinel	D&C	347	2012	2014	Correctional	Design and construction of
Secure Facilities8		Unincorporated						a new 800 bed correctional
		Joint Venture						mental health facility
Mackay Base Hospital	Qld	Queensland	MC	331	2010	2015	Healthcare	Extension to and
		Health						redevelopment of
								existinghospital
Melbourne	Vic	Victorian	GMP	326	2010	2014	Government	Design and construction
Markets		Government						of a 120,000 square
								metres wholesale market
								and distribution facility
Cairns Base	Qld	Queensland	MC	318	2011	2015	Healthcare	Design and construction of
Hospital		Health						new buildings, alterations
								and refurbishment of
								existinghospital

1 Disclosure of major projects is subject to client approval. This could impact the projects available for disclosure.

2 Locations are Queensland (Qld), Victoria (Vic), New South Wales (NSW), Australian Capital Territory (ACT), South Australia (SA), Western Australia (WA), and Northern Territory (NT).

3 Contract types are Guaranteed Maximum Price (GMP), Lump Sum (LS), Design and Construct (D&C) and Managing Contractor (MC).

4 Secured date represents the financial year in which the project was secured.

5 Completion date represents the financial year in which the project is expected to be completed.

6 Includes client provisional funding.

7 Backlog revenue as at 30 June 2013 for the projects listed on pages 43 to 44 totals $5,224 million, representing 83% of the total backlog revenue for the region in relation to Building projects.

8 Represents the Group’s interest in the project joint venture.

44 annual report 2013 Lend Lease

portFoLIo report CONTINUED

australia

Construction – Major Projects – Building[1,6] continued

				Construction
			Contract	Value	Secured	Completion
Project	Location2	Client	Type3	A$m	Date4	Date5	Sector Description
Mulwala	NSW	Commonwealth	LS	316	2007	2014	Government Design and construction
Redevelopment		Department of					for the redevelopment
Project		Defence					of a propellant
							manufacturingfacility
Box Hill	Vic	Department of	MC	310	2012	2016	Healthcare Design and construction
Redevelopment		Health					for the extension to and
							redevelopment of the
							existinghospital
Adelaide Convention	SA	Department	MC	304	2011	2017	Commercial Design and construction
Centre Redevelopment		of Planning,					for the redevelopment and
		Transport and					extension of the existing
		Infrastructure					convention centre
Craigieburn	Vic	Australian Prime	GMP	242	2012	2014	Retail Design and construction
Town Centre		Property Fund/					of a new town centre
		Lend Lease					in Craigieburn, north of
							Melbourne
Lakeside Joondalup	WA	Australian Prime	GMP	211	2013	2015	Retail Design and construction
		Property Fund/					for the redevelopment of
		Lend Lease					Lakeside Joondalup Shopping
							Centre
City West	Vic	CBUS Property	D&C	193	2013	2015	Commercial Design and construction
Police Complex							of a purpose-built 28,000
							square metres facility comprising offces, parking
							and apolice station
University of	NSW	University of	GMP	193	2012	2014	Education Design and construction
Technology Sydney –		Technology,					of a new building for the
Faculty of Engineering		Sydney					Faculty of Engineering and
and Information							Information Technology
Technology
Melbourne Park	Vic	Major Projects	MC	169	2013	2015	Recreation Managing contractor of a new
Redevelopment –		Victoria					retractable roof structure for
Western Project							Margaret Court Arena and
							upgrade for the Rod Laver
							Arena concourse
Tonsley TAFE	SA	Department	MC	149	2012	2014	Education Refurbishment of existing
		of Planning,					facility to provide a new TAFE
		Transport and					interactive educational facility
		Infrastructure					plus infrastructure works
University of NSW –	NSW	University of	GMP	121	2012	2014	Education Refurbishment and expansion
Wallace Wurth		NSW					of existingbuilding
University of	NSW	University of	LS	115	2013	2015	Education Construction of a new
Technology Sydney –		Technology,					12 storey Faculty of Business
Dr Chau Chak Wing		Sydney					building for UTS, designed
Building							byFrank Gehry

1 Disclosure of major projects is subject to client approval. This could impact the projects available for disclosure.

2 Locations are Queensland (Qld), Victoria (Vic), New South Wales (NSW), Australian Capital Territory (ACT), South Australia (SA), Western Australia (WA), and Northern Territory (NT).

3 Contract types are Guaranteed Maximum Price (GMP), Lump Sum (LS), Design and Construct (D&C), Managing Contractor (MC) and Schedule of Rates (SOR). 4 Secured date represents the financial year in which the project was secured.

5 Completion date represents the financial year in which the project is expected to be completed.

6 Backlog revenue as at 30 June 2013 for the projects listed on pages 43 to 44 totals $5,224 million, representing 83% of the total backlog revenue for the region in relation to Building projects.

annual report 2013 Lend Lease 45

australia

Construction – Major Projects – Engineering[1,7]

				Construction
			Contract	Value	Secured	Completion
Project	Location2	Client	Type3	A$m	Date4	Date5	Sector	Description
Hunter Expressway	NSW	NSW Roads and	D&C	550	2011	2014	Roads and	Construction of a section of
		Maritime Services					Highways	new freeway in the Hunter
								region of NSW
Tintenbar to	NSW	NSW Roads and	D&C	549	2012	2015	Roads and	Construction of a new
Ewingsdale, Pacifc Highway,		Maritime Services					Highways	16.3 kilometres section of the highway, several bridges
Northern NSW								and a 400 metre tunnel
Nambucca to Urunga, Pacifc Highway,	NSW	NSW Roads and Maritime Services	D&C	500	2013	2016	Roads and Highway	Design and construction of 20 kilometres of dual
Mid-North Coast								carriagewayand bridges
M5 West Widening	NSW	Interlink Roads	SOR	315	2012	2015	Roads and	Widening of the M5 West
							Highways	motorway from two lanes to
								three lanes in both directions
Southern Expressway	SA	Department	MC	279	2012	2014	Roads and	Duplication of the
Duplication		of Planning,					Highways	18.5 kilometres multilane
		Transport and						two-way Southern
		Infrastructure						Expresswayin Adelaide
Bulk Water Alliance6	ACT	ACTEW	ALL	265	2008	2014	Water and	Enlargement of the existing
		Corporation					Infrastructure	dam, pipelines and
								pumpingstation
Regional Rail Link	Vic	Department	D&C	260	2012	2015	Rail	Design and construction
Package E6		of Transport,						of 25 kilometres of civil,
		Planning						track, structural and station
		and Local						works, from Deer Park to
		Infrastructure						West Werribee
		(Vic) – Regional
		Rail Link
Caval Ridge	Qld	BHP Billiton	SOR	258	2011	2014	Contract	Construction of a haul road
		Mitsubishi					Mining	and mine infrastructure
		Alliance
Water Resources	Vic	Melbourne Water	ALL	224	2009	2014	Water and	Management of the
Alliance6							Infrastructure	Melbourne Water
								capital works program over fveyears
Bulahdelah Bypass	NSW	NSW Roads and Maritime Services	LS/SOR	218	2010	2014	Roads and Highways	Construction of a new section of the Pacifc
								Highway on the mid-north
								coast of NSW

• 1 Disclosure of major projects is subject to client approval. This could impact the projects available for disclosure.

2 Locations are Queensland (Qld), Victoria (Vic), New South Wales (NSW), South Australia (SA), and Australian Capital Territory (ACT).

3 Contract types are Alliance (ALL), Design and Construct (D&C), Managing Contractor (MC), Schedule of Rates (SOR) and LS (Lump Sum).

4 Secured date represents the financial year in which the project was secured.

5 Completion date represents the financial year in which the project is expected to be completed.

6 Represents the Group’s interest in the project joint venture.

7 Backlog revenue as at 30 June 2013 for the projects listed on pages 45 to 46 totals $2,187 million, representing 84% of the total backlog revenue for the region in relation to Engineering projects.

46 annual report 2013 Lend Lease

portFoLIo report CONTINUED

australia

Construction – Major Projects – Engineering[1,7] continued

				Construction
			Contract	Value	Secured	Completion
Project	Location2	Client	Type3	A$m	Date4	Date5	Sector	Description
Wiggins Island6	QLD	Wiggins Island	SOR	211	2011	2014	Marine and	Bulk earthworks, tunnelling
		Coal Export					Ports	and site preparation
		Terminal PtyLtd
Barangaroo Headland	NSW	Barangaroo	D&C	163	2012	2015	Marine and	The creation of the headland
Park		Delivery Authority					Ports	park, including a new
								harbour cove
Eastern Treatment	Vic	Melbourne Water	ALL	163	2010	2014	Water and	Tertiary upgrade of the Eastern
Plant6							Infrastructure	Treatment Plant
Cardwell Range	Qld	Queensland	ALL	165	2010	2014	Roads and	Realignment of Bruce Highway
Alliance6		Department of					Highways	in the Cardwell Range
		Transport and
		Main Roads
RCE – Rail Capacity	WA	Rio Tinto	SOR	185	2012	2014	Rail	A range of services associated
Enhancement								with the asset expansion
								programme in the Pilbara
Regional Rail Link	Vic	Department of	ALL	131	2012	2014	Rail	Design and construction of
Package B6		Transport, Victoria						new rail infrastructure for
								country passenger services
								between Footscray and
								Southern Cross station
Epping to Thornleigh	NSW	Transport for	ALL	120	2013	2017	Rail	Construction of third rail
Third Track		NSW						track between Epping
								and Thornleigh
Mains Road and	Qld	Queensland	D&C	112	2012	2014	Roads and	Construction of an underpass
Kessel Road		Department of					Highways	at the existing intersection
Intersection Upgrade		Transport and
		Main Roads
Hunter Water	NSW	Hunter Water	ALL	104	2009	2014	Water and	Installation of water treatment
Alliance6							Infrastructure	plants in the Hunter region
Natural Disaster	Qld	Townsville City	MC	107	2011	2014	Roads and	Repairs to 80 roads within
Relief and Recovery		Council					Highway	the Townsville area of
Arrangements								north Queensland

1 Disclosure of major projects is subject to client approval. This could impact the projects available for disclosure.

2 Locations are Queensland (Qld), Victoria (Vic), New South Wales (NSW), South Australia (SA), and Australian Capital Territory (ACT).

3 Contract types are Guaranteed Maximum Price (GMP), Alliance (ALL), Design and Construct (D&C), Managing Contractor (MC) and Schedule of Rates (SOR). 4 Secured date represents the financial year in which the project was secured.

5 Completion date represents the financial year in which the project is expected to be completed.

6 Represents the Group’s interest in the project joint venture.

7 Backlog revenue as at 30 June 2013 for the projects listed on pages 45 to 46 totals $2,187 million, representing 84% of the total backlog revenue for the region in relation to Engineering projects.

annual report 2013 Lend Lease 47

australia

Investment Management – Funds Under Management (FUM)[1]

			June 2013	June 2012
Fund	Fund Type	Asset Class	A$b	A$b
Australian Prime PropertyFund – Retail	Core	Retail	4.7	4.4
Australian Prime PropertyFund – Commercial	Core	Commercial	1.6	1.4
Australian Prime PropertyFund – Industrial	Core	Industrial	0.6	0.6
Lend Lease Core Plus Fund	Core Plus	Various	0.4	0.5
Lend Lease Communities Fund 1	Value Add	Residential	0.1	0.1
Lend Lease Real Estate Partners Funds	Enhanced	Retail	0.7	0.6
Lend Lease Retail Partners – Australia Fund	Core Plus	Retail	0.1	0.1
Lend Lease International Towers SydneyTrust2	Core	Commercial	0.9
Managed Investment Mandates	Core	Various	1.2	1.1
total FuM			10.3	8.8

• 1 FUM represents the gross market value of real estate and other related assets in the Group’s managed funds and investment mandates.

• 2 The Group launched the Lend Lease International Towers Sydney Trust in July 2012.

	June 2013	June 2012
	A$b	A$b
FUM at the beginningof theyear	8.8	7.7
Additions	2.0	1.0
Reductions	(0.6)	(0.1)
Net revaluations	0.1	0.2
FuM at the end of theyear	10.3	8.8

Investment Management – Investments

		Lend Lease	Market Value1	Market Value1
		Interest	June 2013	June 2012
	Region	%	A$m	A$m
Pakenham Place	Australia	25.0	10.0	10.0
Craigieburn Central	Australia	25.0	60.0	20.0
Australian Prime PropertyFund – Retail	Australia	1.1	41.1	40.6
Australian Prime PropertyFund – Commercial	Australia	0.4	5.1	5.1
Australian Prime PropertyFund – Industrial	Australia	0.9	4.4	4.4
Lend Lease Real Estate Partners Funds	Australia	Various 2	68.3	62.6
Lend Lease Core Plus Fund	Australia	13.3	41.3	43.5
Lend Lease International Towers SydneyTrust3	Australia	25.0	89.3
Lend Lease Communities Fund 1	Australia	20.8	8.7	8.9
Lend Lease Retail Partners – Australia Fund	Australia	2.6	2.0	2.0
Lend Lease Real Estate Partners New Zealand Fund	New Zealand	5.3	5.6	5.1
total Investments			335.8	202.2

• 1 Market value represents the Group’s assessment of the value of the underlying assets.

• 2 The Group holds varying proportional interests in the Real Estate Partners Funds (REP).

• 3 In July 2012, Lend Lease International Towers Sydney Trust was launched, with A$2.0 billion of secured commitments for the funding and development of the first two commercial towers at Barangaroo South.

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australia

Investment Management – Assets Under Management

australia Investment Management – Assets Under Management	australia Investment Management – Assets Under Management	australia Investment Management – Assets Under Management	australia Investment Management – Assets Under Management
Shopping Centres Managed on Behalf of GLA sqm/000s1 Market Value2 June 2013 A$m Market Value2 June 2012 A$m
Cairns Central, Qld APPF Retail 52.8
Caneland Central, Qld APPF Retail 65.6
Sunshine Plaza, Qld APPF Retail/Other Joint Owners 73.3
Erina Fair, NSW APPF Retail/Other Joint Owners 114.2
Macarthur Square, NSW APPF Retail/Other Joint Owners 94.6
Mid City (retail), NSW APPF Retail/Other Joint Owners 9.1
Greensborough Plaza, Vic APPF Retail 58.5
Caroline Springs Square, Vic APPF Retail/Lend Lease Core Plus Fund 21.0			5,283.2 5,171.4
Pakenham Place, Vic APPF Retail/Lend Lease 16.1
Lakeside Joondalup, WA APPF Retail/Other Joint Owners 71.1
Menai Marketplace, NSW REP3 16.5
Settlement City, NSW REP3 19.4
Southlands Boulevarde, WA REP3 21.2
Armadale ShoppingCity, WA REP3 31.0
Northgate, WA REP3 15.9
Stud Park, Vic LLRPA 26.9
total 707.2 5,283.2 5,171.4

1 GLA represents the gross lettable area of the centres.

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

Infrastructure Development – Project Listing

			Actual		Estimated	Invested	Committed
			Financial	Operational	Capital Spend1	Equity	Equity2
Project3	Location	Status	Close Date	Term Years	A$m	A$m	A$m
Healthcare
Queen Elizabeth II		Under
Medical Centre Car Park	Perth, WA	Construction4	Jul-11	26	140	15.0
Sunshine Coast		Under
UniversityHospital3	Kawana, Qld	Construction	Jul-12	25	1,480	29.1	54.7
New Bendigo Hospital	Bendigo, Vic	Design	May-13	25	630		31.6
Justice
Eastern Goldfelds
Regional Prison	Kalgoorlie, WA	Design	Dec-12	25	250		20.4
total operational					2,500	44.1	106.7
Mixed-Use
Sydney International
Convention, Exhibition and
Entertainment Precinct	Sydney, NSW	Preferred bidder			1,600
total preferred Bidder					1,600
total					4,100	44.1	106.7

1 Represents total estimated capital spend over the contract duration.

2 Committed equity represents future contributions the Group has a commitment to invest.

3 Excludes client provisional funding.

4 Stages 1A and 1B are operational, with Stages 2A and 2B under construction.

annual report 2013 Lend Lease 49

asia

Development – Overview

asia Development – Overview
	June 2013	June 2012
Development Profle
Number of developmentprojects	1	1

Development – Project Listing

Development – Project Listing
				Estimated
			Estimated	Commercial/
		Ownership	Completion	Retail Backlog
Project	Location	Interest	Date	sqm/000s1
Jem®2	Singapore	7.6% Indirect	2013	32
total				32

1 Represents gross floor area of the office component.

2 Indirect interest is 10.1% of the investment in ARIF 3, which has a 75% ownership interest in Jem[®] . In June 2013, the Group’s 25% direct interest in Jem[®] was sold to Lend Lease Jem Partners Fund Limited.

Construction

New Work Secured and Backlog Revenue

Construction New Work Secured and Backlog Revenue
	New Work	New Work
	Secured	Secured	Backlog	Backlog
	Revenue1	Revenue1	Revenue2	Revenue2
	June 2013	June 2012	June 2013	June 2012
	A$m	A$m	A$m	A$m
Building	296.2	369.8	393.8	502.5
Engineering	118.0	295.9	81.9	190.2
total asia	414.2	665.7	475.7	692.7

• 1 New work secured revenue is the total revenue to be earned from projects secured during the year.

2 Backlog revenue is the total revenue to be earned from projects in future financial years based on projects secured as at 30 June 2013.

Backlog Realisation

Backlog Realisation
	Year Ending	Year Ending	Post
	June 2014	June 2015	June 2016	Total
	%	%	%	%
Building	82	17	1	100
Engineering	100			100
total asia	85	14	1	100

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Construction – Major Projects[1,5]

				Construction
			Contract	Value	Secured	Completion
Project	Location	Client	Type2	A$m	Date3	Date4	Sector	Description
Jem®	Singapore	Lend Lease	GMP	369	2011	2014	Mixed-use	Mixed-use retail and
								commercial development in
								Jurong, Singapore
Softbank Fast Pole	Japan	Softbank Mobile	MC	150	2011	2014	Telecom-	Design and supply of concrete
							munications	telecommunicationspoles
Stamford American	Singapore	Stamford	GMP	77	2012	2014	Education	Design, supervision and
International School		American						construction of an extension
Phase 2		International						to the new international school
		School						and certain works at the
								existingschool
Merck Tablet	Singapore	MSD	CM	65	2012	2014	Pharma-	Construction of new
Janumet		International					ceutical	manufacturing facility within the
		GmbH						Merck/MSD campus at Tuas
Insead Phase 3	Singapore	Insead	GMP	32	2013	2015	Education	The six storey, 10,000
Expansion Project		Singapore						square metres Leadership
								Development Centre located
								in the Buona Vista district,
								Singapore’s ‘Knowledge Hub’.
								The centre will be constructed
								to the north of the existing
								campus and connected by
								the Central Avenue, the main
								spine connecting all parts
								of the school
Novartis MECCaNo	Singapore	Novartis	CM	15	2013	2015	Pharma-	Construction management
		Singapore					ceutical	for the new biologics
		Pharmaceutical						manufacturing facility
		Manufacturing
		Pte Ltd

1 Disclosure of major projects is subject to client approval. This could impact the projects available for disclosure.

2 Contract types are Guaranteed Maximum Price (GMP), Managing Contractor (MC) and Construction Management (CM).

3 Secured date represents the financial year in which the project was secured.

4 Completion date represents the financial year in which the project is expected to be completed.

5 Backlog revenue as at 30 June 2013 for the listed projects totals $232.5 million, representing 49% of the total Construction backlog revenue for the region.

Investment Management – Funds Under Management (FUM)[1]

			June 2013	June 2012	June 2013	June 2012
Fund	Fund Type	Asset Class	S$b	S$b	A$b	A$b
Parkway Parade
PartnershipLimited	Core Plus	Retail and Commercial	1.2	1.1	1.0	0.8
Lend Lease Asian Retail
Investment Fund(ARIF)	Core/Value Add	Retail and Commercial	2.5	1.8	2.0	1.4
Lend Lease Jem Partners
Fund Limited2	Core	Retail and Commercial	0.4		0.3
total FuM			4.1	2.9	3.3	2.2

1 FUM represents the gross market value of real estate and other related assets in the Group’s managed funds and investment mandates.

2 Lend Lease Jem Partners Fund Limited was created to acquire the Group’s 25% direct interest in the Jem[®] development.

	June 2013	June 2012	June 2013	June 2012
	S$b	S$b	A$b	A$b
FUM at the beginningof theyear	2.9	2.6	2.2	2.0
Foreign exchange movement1			0.1	0.1
Additions	0.8	0.2	0.7	0.1
Reductions		(0.1)		(0.1)
Net revaluations	0.4	0.2	0.3	0.1
FuM at the end of theyear	4.1	2.9	3.3	2.2

1 Foreign exchange movement arising from translating opening FUM in local currency between June 2012 and June 2013.

annual report 2013 Lend Lease 51

asia

Investment Management – Investments

asia Investment Management – Investments
	Lend Lease	Market Value1	Market Value1	Market Value1	Market Value1
	Interest	June 2013	June 2012	June 2013	June 2012
	%	S$m	S$m	A$m		A$m
ParkwayParade PartnershipLimited	4.9	33.9	30.0	27.6		23.8
313@somerset2	25.0	132.1	127.8	107.4		101.6
Jem®3			99.2			78.8
Lend Lease Asian Retail Investment Fund
ARIF 1(313@somerset)2	10.1	40.0	38.9	32.5		30.6
ARIF 2(Setia CityMall)4	10.1	6.0	2.6	4.9		2.5
ARIF 3(Jem®)3	10.1	68.5	30.4	55.7		24.1
total Investments		280.5	328.9	228.1		261.4

• 1 Market value represents the Group’s assessment of the value of the underlying assets.

• 2 The Group directly owns 25% of the 313@somerset retail centre, with the remaining 75% held by ARIF 1, in which the Group holds a 10.1% interest.

• 3 During the year, the Group sold its 25% direct interest in Jem[®] to the Lend Lease Jem Partners Fund Limited. The Group directly owns 10.1% of ARIF 3, which has a 75% ownership interest in Jem[®] .

4 The Group directly owns 10.1% of ARIF 2, which has a 50% ownership interest in the Setia City Mall development.

Investment Management – Assets Under Management

			Market Value2	Market Value2	Market Value2	Market Value2
		GLA1	June 2013	June 2012	June 2013	June 2012
Shopping Centres	Managed on Behalf of	sqm/000s	S$m	S$m	A$m	A$m
	Parkway Parade
ParkwayParade, Singapore	PartnershipLimited	52.5	1,143.0	1,062.0	929.3	842.9
313@somerset, Singapore	ARIF/Lend Lease	27.1	1,150.0	1,150.0	935.0	912.7
Setia CityMall, Malaysia3	ARIF/Lend Lease	107.0	264.2	156.0	214.8	123.8
	ARIF/Lend Lease Jem
Jem®, Singapore4	Partners Fund Limited	53.4	1,785.0		1,451.2
total		240.0	4,342.2	2,368.0	3,530.3	1,879.4

• 1 GLA represents the gross lettable area of the centres.

• 2 Market value represents the Group’s assessment of the value of the underlying assets.

• 3 Setia City Mall opened in May 2012. The increased market value can primarily be attributed to an upward revaluation and capital expenditure.

• 4 The Jem[®] retail component was completed in June 2013. The office component is due to be completed in October 2013.

52 annual report 2013 Lend Lease

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europe

Development – Overview

europe Development – Overview
					June 2013	June 2012
Development Profle
Number of developmentprojects					27	23
Development – Project Listing
						Estimated
			Estimated	Backlog	Backlog	Commercial
		Ownership	Completion	Land	Built-Form	Backlog
Project	Location	Interest	Date1	Units2	Units2	sqm/000s
Zoned Projects
UK Residential Projects	UK	Various	Various		2,084
Greenwich Peninsula – 6 Mitre Passage	UK	50%	2010			10
The International Quarter	UK	50%	Various		322	354
Elephant & Castle	UK	100%	Various		2,988	25
total zoned					5,394	389
Unzoned Projects
UK Residential Projects	UK	100%	Various		315
Wandsworth	UK	100%	Various		218
total unzoned					533
total development3					5,927	389

• 1 Estimated completion date for built-form units represents the financial year in which the project construction is expected to be completed.

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

3 Projects in the UK include residential developments, and the retail portfolio including East Village (formerly known as the Athletes’ Village), The International Quarter, Greenwich Peninsula (now only 6 Mitre Passage following the sale of Greenwich Peninsula Regeneration Limited), Wandsworth and Elephant & Castle. The East Village is progressing on a fee-based arrangement and therefore is excluded from the backlog metrics. The Group sold its stake in Greenwich Peninsula Regeneration Limited to Quintain Estates and Developments PLC in July 2012.

Construction

New Work Secured and Backlog Revenue

	New Work	New Work
	Secured	Secured	Backlog	Backlog
	Revenue1	Revenue1 ,3	Revenue2	Revenue2 ,3
	June 2013	June 2012	June 2013	June 2012
	£m	£m	£m	£m
Building	737.9	517.9	827.7	707.3
Engineering	9.4	10.6	3.3	14.6
total europe	747.3	528.5	831.0	721.9

• 1 New work secured revenue is the total revenue to be earned from projects secured during the year.

• 2 Backlog revenue is the total revenue to be earned from projects in future financial years, based on projects secured as at 30 June 2013.

• 3 June 2012 new work secured and backlog revenue has been restated for revised positions on certain projects.

Backlog Realisation

Backlog Realisation
	Year Ending	Year Ending	Post
	June 2014	June 2015	June 2016	Total
	%	%	%	%
Building	60	34	6	100
Engineering	59	25	16	100
total europe	60	34	6	100

annual report 2013 Lend Lease 53

europe

Construction – Major Projects[1,8]

				Construction
			Contract	Value	Secured	Completion
Project	Location	Client	Type2	£m3	Date4	Date5	Sector Description
East Village6	London	Lend Lease/	CM	988	2008	2014	Residential Construction of the Athletes’
		Olympic					Village for the London 2012
		Development					Olympic and Paralympic
		Authority					Games, then conversion
							post-Olympics to East Village
Ministry of Defence	UK	Defence Estates	GMP	638	2003	2014	Government Construction and upgrade of
Single Living							single living accommodation
Accommodation							for the military
Modernisation
(MoD SLAM)Phase 2
Regional Prime	South	Defence Estates	GMP	438	2004	2014	Government Provision of estate
Contract South West	West						management and project
	England						management services
Kingsgate House	London	Land Securities	LS	168	2013	2015	Mixed-use Demolition of existing offce
							block and new build of a
							12 storey commercial and
							retail block and a 14 storey
							residential building
The Hydro7	Glasgow	Scottish Exhibition and	LS	86	2011	2014	Commercial A new arena designed specifcally for large-scale
		Conference					performance events
		Centre Limited
Cramlington Hospital	North East	Northumbria	LS	71	2013	2015	Healthcare New build of a 282 bed
	England	Trust					specialist emergency
							care hospital
Strathclyde	Glasgow	Strathclyde	LS	57	2012	2014	Education New build of a 9 storey
Technology and		University					Technology and Innovation
Innovation Centre							Centre research facility
							to accommodate
							1,200 researchers

• 1 Disclosure of major projects is subject to client approval. This could impact the projects available for disclosure.

2 Contract types are Construction Management (CM), Guaranteed Maximum Price (GMP) and Lump Sum (LS).

3 Construction value in Project Management assignments is the gross construction value and may not correlate to revenue recognised on the project.

4 Secured date represents the financial year in which the project was secured.

5 Completion date represents the financial year in which the project is expected to be completed.

6 East Village was formerly known as the Athletes’ Village.

7 The Hydro was formerly known as the Scottish National Arena.

• 8 Backlog revenue as at 30 June 2013 for the listed projects totals £486.8 million, representing 59% of the total Construction backlog revenue for the region.

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Investment Management – Funds Under Management (FUM)[1]

			June 2013	June 2012	June 2013	June 2012
Fund	Fund Type	Asset Class	£b	£b	A$b	A$b
Lend Lease Retail Partnership	Core	Retail	0.7	0.7	1.1	1.1
Lend Lease PFI/PPP Infrastructure
Fund LP(UKIF)	Core	Infrastructure	0.2	0.1	0.3	0.2
total FuM			0.9	0.8	1.4	1.3

1 FUM represents the gross market value of real estate and other related assets in the Group’s managed funds and investment mandates.

	June 2013	June 2012	June 2013	June 2012
	£b	£b	A$b	A$b
FUM at the beginningof theyear	0.8	0.8	1.3	1.2
Foreign exchange movement1				0.1
Additions		0.1		0.1
Reductions		(0.1)		(0.1)
Net revaluations	0.1		0.1
FuM at the end of theyear	0.9	0.8	1.4	1.3

1 Foreign exchange movement arising from translating opening FUM in local currency between June 2011 and June 2012.

Investment Management – Investments

Investment Management – Investments
	Lend Lease	Market Value1	Market Value1	Market Value1	Market Value1
	Interest	June 2013	June 2012	June 2013	June 2012
	%	£m	£m	A$m	A$m
Bluewater2	30.0	549.0	481.7	900.0	776.9
Warrington Retail Limited Partnership3	50.0
Lend Lease Retail Partnership	4.1	29.8	27.0	48.8	43.5
Lend Lease PFI/PPP Infrastructure Fund LP(UKIF)	10.0	9.4	8.5	15.5	13.7
Lend Lease Global Properties, SICAF and
LL Global Real Estate Advisers	24.8	0.8	0.3	1.2	0.5
Cohen & Steers, SICAV4			5.3		8.6
total		589.0	522.8	965.5	843.2

1 Market value represents the Group’s assessment of the value of the Group’s interest in the underlying assets.

2 The market value at 30 June 2013 of 100% of Bluewater was £1,830.0 million (A$3,000.0 million). Bluewater is treated as inventory in the financial statements and is

therefore reflected at cost, which at 30 June 2013 was A$444.2 million.

3 The market value of the Warrington Retail Limited Partnership net assets was below zero at 30 June 2013 and, as a result, the Group’s investment has been written down to nil.

4 The Group sold its interest in this asset during the current financial year.

annual report 2013 Lend Lease 55

europe

Investment Management – Assets Under Management

			Market Value2	Market Value2	Market Value2	Market Value2
		GLA1	June 2013	June 2012	June 2013	June 2012
Shopping Centres	Managed on Behalf of	sqm/000s	£m	£m	A$m	A$m
Bluewater, Kent	Lend Lease Retail Partnership/
	Lend Lease	165.2	1,830.0	1,605.5	3,000.0	2,589.5
Touchwood, Solihull	Lend Lease Retail Partnership	60.4	265.2	251.3	434.8	405.3
Golden Square, Warrington	Warrington Retail Unit Trust	68.9	123.6	133.2	202.6	214.8
total		294.5	2,218.8	1,990.0	3,637.4	3,209.6

1 GLA represents the gross lettable area of the centres.

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

Infrastructure Development – Project Listing

						Percentage	Facilities
					Estimated	of	Management
			Actual	Operational	Construction	Construction	Revenue	Invested	Committed
			Financial	Term	Value1	Complete	Backlog2	Equity	Equity3
Project	Location	Status	Close Date	Years	£m	%	£m	£m	£m
Healthcare
Calderdale Royal
Hospital4	UK	Operational	Jul-98	33	87	100	44
Worcester Royal
Hospital4	UK	Operational	Mar-99	33	82	100	59
Hexham General
Hospital – Phases
1 and 24	UK	Operational	Apr-01	32	29	100	13
Burnley General
Hospital4	UK	Operational	Oct-03	30	27	100	16
St James’ University
Hospital, Leeds4	UK	Operational	Oct-04	33	175	100	53
Hexham General
Hospital – Phase 34	UK	Operational	Jul-06	27	24	100	8
Central Manchester
UniversityHospital4,5	UK	Operational	Dec-04	38	393	100	41
Majadahonda Hospital	Spain	Operational	Apr-05	30	187	100	17	4.0
		Under
Brescia 2	Italy	Construction	Mar-11	33	92	60	68	1.7	3.1
		Preferred
Treviso Hospital6	Italy	Bidder	Dec-13	21	142		387		7.7
subtotal
(carried forward)					1,238		706	5.7	10.8

1 Represents total estimated construction value over the contract duration.

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

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

4 Equity interest in these projects is held by the Lend Lease managed UK Infrastructure Fund. The Group has a 10% interest in the UK Infrastructure Fund.

5 The Group sold its equity interest in this asset to the UK Infrastructure Fund during the prior year.

6 In October 2012, the Group was selected as preferred bidder to lead a consortium to design and build a €200 million hospital in Treviso, Italy and provide facility management services over the 21 year concession period.

56 annual report 2013 Lend Lease

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europe

Infrastructure Development – Project Listing continued

						Percentage	Facilities
					Estimated	of	Management
			Actual	Operational	Construction	Construction	Revenue	Invested	Committed
			Financial	Term	Value1	Complete	Backlog2	Equity	Equity3
Project	Location	Status	Close Date	Years	£m	%	£m	£m	£m
subtotal healthcare
projects (brought
forward)					1,238		706	5.7	10.8
Education
Newcastle Schools4	UK	Operational	Mar-02	27	50	100	21
Lincoln Schools4	UK	Operational	Sep-01	31	20	100	8
Lilian Baylis
TechnologySchool4	UK	Operational	Feb-03	27	13	100	8
Lancashire Schools
Phase 14	UK	Operational	Dec-06	25	81	100	30
Lancashire Schools
Phase 24	UK	Operational	Dec-07	25	34	100	8
Lancashire Schools
Phase 2A4,5	UK	Operational	Jul-08	25	59	100	14
Lancashire Schools
Phase 34,5	UK	Operational	Jun-09	25	69	100	14
National Maritime
College, Cork4	Ireland	Operational	Feb-03	27	30	100	11
Birmingham BSF
Phase 1A4,6	UK	Operational	Aug-09	25	69	100	31
Birmingham BSF		Under
Phase 1B4,6	UK	construction	Jul-11	27	27	68	14
Accommodation
Treasury14	UK	Operational	May-00	37	114	100	53
Treasury24	UK	Operational	Jan-03	35	148	100	47
University of Sheffeld4,5	UK	Operational	May-06	40	169	100	37
Waste
Global Renewables		Under
Lancashire	UK	construction	Mar-07	25	252	99		58.4
South Tyne and		Under
Wear Waste4,5	UK	construction	Apr-11	25	175	62
total					2,548		1,002	64.1	10.8

1 Represents total construction value over the contract duration.

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

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

4 Equity interest in these projects is held by the Lend Lease managed UKIF. The Group has a 10% interest in the UKIF.

5 The Group sold its equity interest in these assets to the UKIF during the prior year.

6 The Group sold its equity interest in these assets to the UKIF during the current year.

annual report 2013 Lend Lease 57

americas

Development – Overview

americas Development – Overview
	June 2013	June 2012
Development Profle
Number of developmentprojects1	8	6

1 Includes operational (secured) projects and projects where the Group has been appointed as the preferred bidder.

Development – Project Listing

							Estimated
				Estimated		Backlog	Commercial
		Ownership	Secured	Completion	Backlog	Built-Form	Backlog
Project	Location	Interest	Date1	Date2	Land Units3	Units3	sqm/000s
Horizon Uptown	Colorado	100%	2006	2030	3,860		371
total Communities					3,860		371

1 Secured date represents the financial year in which the Group was announced as the preferred bidder for the project.

2 Estimated completion date for master-planned communities represents the estimated financial year in which the last unit will be settled.

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

						Estimated
					Estimated	Commercial
		Ownership		Secured	Completion	Backlog
Project	Location	Interest	Status	Date1	Date2	sqm/000s
			Under
Bon Secours St. Francis Medical Pavilion	Virginia	100%	Construction	2013	2014	6
			Under
Covington Medical Arts Pavilion	Louisiana	100%	Construction	2012	2014	5
			Under
Bon Secours DePaul Medical Centre	Virginia	100%	Construction	2012	2014	10
Providence Little Company of			Preferred
MaryMedical Centre, Torrance	California	100%	Bidder	2011	2015	10
Winston-Salem Veterans Affairs			Preferred
Healthcare Center	North Carolina	100%	Bidder	2013	2016	33
Mercy Regional Health Center Medical Offce Building3	Kansas	100%	Preferred Bidder	2013	2016	6
Medical Offce Building II, USMD Hospital,			Preferred
Arlington, Texas	Texas	100%	Bidder	2013	2015	8
total healthcare						78

1 Secured date represents the financial year in which the Group was announced as the preferred bidder for the project.

2 Estimated completion date for healthcare projects represents the estimated financial year in which construction will be completed.

3 The Group has been selected as a preferred bidder, with the development agreement expected to be executed in 2014.

58 annual report 2013 Lend Lease

portFoLIo report CONTINUED

americas

Construction

New Work Secured and Backlog Revenue

americas Construction New Work Secured and Backlog Revenue
	New Work	New Work
	Secured	Secured	Backlog	Backlog
	Revenue1	Revenue1	Revenue2	Revenue2
	June 2013	June 2012	June 2013	June 2012
	US$m	US$m	US$m	US$m
Building	3,578.1	1,785.3	5,073.7	4,082.8
Engineering	41.4	23.0	11.5	81.0
total americas	3,619.5	1,808.3	5,085.2	4,163.8

1 New work secured revenue is the total revenue to be earned from projects secured during the year.

2 Backlog revenue is the total revenue to be earned from projects in future financial years based on projects secured as at 30 June 2013.

Backlog Realisation

Backlog Realisation
	Year Ending	Year Ending	Post
	June 2014	June 2015	June 2016	Total
	%	%	%	%
Building	49	25	26	100
Engineering	95	5		100
total americas	50	24	26	100

annual report 2013 Lend Lease 59

americas

Construction – Major Projects[1,5]

				Construction
			Contract	Value	Secured	Completion
Project	Location	Client	Type2	US$m	Date3	Date4	Sector Description
National	New York	National September	CM	778	2006	2014	Other Memorial and museum at the
September 11		11 Memorial and					World Trade Center site in
Memorial/Foundation/		Museum at the					New York
Port Authority		World Trade Center
One576	New York	Extell Development	GMP	400	2012	2015	Mixed-use 74 storey high-rise hotel and
		Company					residential tower with retail
							in Manhattan, with 210 hotel
							rooms and 135 apartments
LUMINA	San	Tishman Speyer	GMP	346	2013	2016	Residential 655 condominium units in two
	Francisco						towers (37 and 42 storeys,
							respectively) and two nine
							storeyresidential buildings
56 Leonard Avenue	New York	56 Leonard LLC	GMP	349	2012	2016	Residential 42,000 square metres,
							60 storey residential
							buildingwith 146 units
400 Park Avenue	New York	ET 500 PAS LLC	GMP	206	2012	2015	Residential 43 storey residential project,
South		(JV)					split between condominiums
							and apartments
50 UN Plaza	New York	Zeckendorf	GMP	201	2012	2015	Residential 44 storey condominium tower
		Development LLC					with 88 units
455 North Park/	Chicago	New Water Park	GMP	188	2012	2015	Mixed-use 51 storey mixed-use building,
DRW Hotel		LLC					including 400 hotel rooms,
							398 apartments and 230
							parkingspaces
680 Madison Avenue/	New York	Extell Development	CMA	150	2013	2014	Residential Interior demolition of 23,000
The Carlton House		Company					square metres hotel for
							new high-end apartment
							cooperative, including retail
							space, townhouse and
							penthouse
45th Street	New York	Extell Development	GMP	148	2011	2014	Hotel 28,800 square metres hotel
		Company
500 Lake Shore Drive	Chicago	Related BIT	GMP	114	2011	2014	Residential 43 storey residential tower with two foors of
							undergroundparking
111 W. Wacker Drive	Chicago	Related BIT	GMP	113	2012	2014	Residential 59 storey residential tower with
							506 apartments
The Langham Chicago	Chicago	Pacifc Eagle	GMP	111	2012	2014	Hotel Conversion of foors 2 through
		Holding Co.					12 from IBM building into a
							350 room hotel

• 1 Disclosure of major projects is subject to client approval. This could impact the projects available for disclosure.

2 Contract types are Construction Management (CM), Guaranteed Maximum Price (GMP) and Construction Management Agency (CMA).

3 Secured date represents the financial year in which the project was secured.

4 Completion date represents the financial year in which the project is expected to be completed.

5 Backlog revenue as at 30 June 2013 for the listed projects totals US$1,471 million, representing 29% of the total Construction backlog revenue for the region.

6 The One57 project was previously called Carnegie 57th Street.

60 annual report 2013 Lend Lease

portFoLIo report CONTINUED

americas

Infrastructure Development – Military Housing – Project Listing

				Actual		Estimated	Percentage of
				Financial	Operational	Capital	Construction	Invested	Committed
				Close	Term	Spend1	Completed	Equity	Equity2	Units Under
Project	Location	Service	Status	Date	Years	US$m	%	US$m	US$m	Management3
Fort Hood	Texas	Army	Operational	Oct-01	50	296	100	6.0		6,400
	South	Marine
Tri-Command	Carolina	Corps	Operational	Feb-03	50	140	100	3.3		1,700
Fort Campbell	Kentucky	Army	Operational	Dec-03	50	301	100	6.0		4,450
		Air
Hickam	Hawaii	Force	Operational	Feb-05	50	250	100			1,400
		Air
Hickam Phase 2	Hawaii	Force	Operational	Aug-07	50	450	88		23.74	1,100
Island Palm
Communities3	Hawaii	Army	Operational	Apr-05	50	2,172	72	8.0		7,750
Fort Drum	New York	Army	Operational	May-05	50	415	100	5.0		3,850
Fort Drum Project
Sustainment Plan	New York	Army	Operational	Sep-11	50	76	65			175
Camp Lejeune	North
	Carolina/	Marine
	New York	Corps	Operational	Oct-05	50	358	100	7.5		3,300
Camp Lejeune	North
Phase 2	Carolina/	Marine
	New York	Corps	Operational	Nov-06	50	114	100	2.5		1,050
Camp Lejeune	North
Phase 3	Carolina/	Marine
	New York	Corps	Operational	Nov-07	50	287	54	4.5		2,000
Camp Lejeune	North
Phase 45	Carolina/	Marine
	New York	Corps	Operational	Mar-13	50
subtotal
(carried forward)						4,859		42.8	23.7	33,175

1 Changes in estimated capital spend are due to adjustments made to contract values during the development year.

2 Committed equity represents future contributions the Group has a commitment to invest.

3 Units under management have been revised from prior year reports to reflect the expected number of units at the end of the initial project development period.

4 On 26 July 2013, a modified project scope plan was executed for the project requiring an investment by the Group.

5 Camp Lejeune Phase 4, formerly known as Camp Lejeune Phase 6, represents additional development managed work and does not include any additional construction value or expected units.

annual report 2013 Lend Lease 61

americas

Infrastructure Development – Military Housing – Project Listing continued

				Actual/
				Expected		Estimated	Percentage of
				Financial	Operational	Capital	Construction	Invested	Committed
				Close	Term	Spend1	Completed	Equity	Equity2	Units Under
Project	Location	Service	Status	Date	Years	US$m	%	US$m	US$m	Management3
subtotal(brought forward)						4,859		42.8	23.7	33,175
	Colorado/	Air
Tri-Group3	California	Force	Operational	Sep-07	50	235	100	11.0		1,525
Fort Knox
Phase 13	Kentucky	Army	Operational	Feb-07	50	220	79		3.0	2,530
Fort Knox
Phase 2
(Additional
Scoring)	Kentucky	Army	Operational	Oct-10	50	22	22			35
Air Combat
Command	Arizona/	Air
GroupII	New Mexico	Force	Operational	Jul-07	50	224	98	11.0		2,200
Wainwright/
GreelyPhase 14	Alaska	Army	Operational	Apr-09	50	53	100			1,800
Wainwright/
GreelyPhase 24	Alaska	Army	Operational	Sep-10	50	257	41		2.0
PAL Group A
Phase 15	Various	Army	Operational	Aug-09	50	57	100			3,400
PAL Group A
Phase 2
and GroupB	Various	Army	Operational	Apr-12	50	148	40			4,415
PAL GroupC6	Various	Army	Operational	May-13		367				3,820
total operational						6,442		64.8	28.7	52,900
Fort Hood Stage 3			Preferred
(Chaffee Village 1)	Texas	Army	bidder	Sep-13		63
total preferred
Bidder						63
total						6,505		64.8	28.7	52,900

• 1 Changes in estimated capital spend are due to adjustments made to contract values during the life of the development period.

2 Committed equity represents future contributions the Group has a commitment to invest.

3 Units under management have been revised to reflect the expected number of units at the end of the initial project development period.

4 The committed equity of US$2.0 million for Wainwright/Greely Phase 1 was reclassified to Wainwright/Greely Phase 2 to reflect that the commitment is part of the Phase 2 Operating Agreement. Total expected units under management are included in Wainwright/Greely Phase 1.

5 The prior report included US$2.0 million in equity associated with the PAL Group A initial closing. On achieving the final close of the project (completed in April 2012), this amount was reclassified to long-term deposits.

• 6 The PAL Group C financial close includes the number of units based on the current development plan for the project site.

62 annual report 2013 Lend Lease

portFoLIo report CONTINUED

Key portfolio Metrics by Line of Business

Development

Development
	austraLIa	asIa	europe	aMerICas	totaL
	June 2013 June 2012 June 2013 June 2012 June 2013 June 2012 June 2013 June 2012 June 2013 June 2012
Development Profle Number of development projects	38 39 1 1 27 23 8 6 74 69
Number of retirement villages1	71 71 71 71
Backlog Units and SQM2 Residential – Land units
Zoned3	55,545 57,910 5,961 3,860 3,860 59,405 67,731
Unzoned
Subtotal Residential – Land units	55,545 57,910 5,961 3,860 3,860 59,405 67,731
Residential – Built-form units
Zoned	13,620 11,935 5,394 5,897 19,014 17,832
Unzoned	466 466 533 3,294 999 3,760
Subtotal Residential – Built-form units	14,086 12,401 5,927 9,191 20,013 21,592
total residential units	69,631 70,311 – – 5,927 15,152 3,860 3,860 79,418 89,323
Commercial(sqm/000s)4
Zoned	5,552 5,814 32 109 389 727 449 410 6,422 7,060
Unzoned	20 20
Commercial(sqm/000s)	5,552 5,814 32 109 389 747 449 410 6,422 7,080
retirement Village units	1,247 1,270 1,247 1,270

1 The number of retirement villages and aged care facilities includes owned and managed properties.

2 Backlog includes Group-owned, joint venture and managed projects.

3 The Australian June 2012 backlog residential units have been restated from 58,185 to 57,910 to reflect a revised position on the Ropes Crossing project.

4 Represents net developable land in relation to master-planned urban communities, and net developable floor space for other developments.

annual report 2013 Lend Lease 63

Key portfolio Metrics by Line of Business

Construction – New Work Secured and Backlog Revenue

Key portfolio Metrics by Line of Business Construction – New Work Secured and Backlog Revenue
	New Work	New Work
	Secured	Secured	Backlog	Backlog
	Revenue1	Revenue1	Revenue2	Revenue2
	June 2013	June 2012	June 2013	June 2012
	A$m	A$m	A$m	A$m
By Region
Australia	7,654.6	8,152.9	9,560.9	9,264.5
Asia	414.2	665.7	475.7	692.7
Europe	1,132.2	813.1	1,260.3	1,104.8
Americas	3,514.1	1,738.8	4,937.1	4,003.5
total Group	12,715.1	11,370.5	16,234.0	15,065.5
By Sector
Building	9,714.3	7,358.5	12,876.8	10,744.5
Engineering	2,229.2	3,343.6	2,729.5	3,750.3
Services	771.6	668.4	627.7	570.7
total Group	12,715.1	11,370.5	16,234.0	15,065.5

• 1 New work secured revenue is the total revenue to be earned from projects secured during the year.

• 2 Backlog revenue is the total revenue to be earned from projects in future financial years, based on projects secured as at 30 June 2013. Although backlog revenue is realised over several years, the average foreign exchange rate for the current year has been applied to the closing backlog revenue balance in its entirety, as the average rates for later years cannot be predicted. In local currency, the Americas backlog revenue was US$5,085.2 million (June 2012: US$4,163.8 million) and the European backlog revenue was £831.0 million (June 2012: £721.9 million).

Construction – Backlog Realisation

Construction – Backlog Realisation
	Year Ending	Year Ending	Post
	June 2014	June 2015	June 2016	Total
	%	%	%	%
By Region
Australia	58	24	18	100
Asia	85	14	1	100
Europe	60	34	6	100
Americas	50	24	26	100
total Group	56	25	19	100
By Sector
Building	53	26	21	100
Engineering	71	18	11	100
Services	50	27	23	100
total Group	56	25	19	100

64 annual report 2013 Lend Lease

portFoLIo report CONTINUED

Key portfolio Metrics by Line of Business continued

Investment Management – Investments

Key portfolio Metrics by Line of Businesscontinued Investment Management – Investments
	Lend Lease	Lend Lease
	Share	Share
	of Income	of Income	Market Value1	Market Value1
	June 2013	June 2012	June 2013	June 2012
	A$m	A$m	A$m	A$m
By Region
Australia	10.8	14.2	335.8	202.2
Asia	4.8	11.3	228.1	261.4
Europe	38.3	42.5	965.5	843.2
Americas		6.9
total Group	53.9	74.9	1,529.4	1,306.8

1 Market value represents the Group’s assessment of the value of the underlying assets.

Funds Under Management (FUM)[1]

Funds Under Management (FUM)1
	June 2013	June 2012
	A$b	A$b
By Region
Australia	10.3	8.8
Asia	3.3	2.2
Europe	1.4	1.3
total Group	15.0	12.3

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

Assets Under Management

Assets Under Management
	nuMBer oF Centres	assets under ManaGeMent (MarKet VaLue a$M)1	GLa under ManaGeMent (sqM/000s)2
	June 2013 June 2012 June 2013 June 2012 June 2013 June 2012
By Region Australia	16 16 5,283.2 5,171.4 707.2 701.3
Asia	4 3 3,530.3 1,879.4 240.0 186.6
Europe	3 3 3,637.4 3,209.6 294.5 293.0
total Group	23 22 12,450.9 10,260.4 1,241.7 1,180.9

1 Market value represents the Group’s assessment of the value of the underlying assets.

2 GLA represents the gross lettable area of the centres.

annual report 2013 Lend Lease 65

Key portfolio Metrics by Line of Business

Infrastructure Development

Infrastructure Development
	nuMBer oF proJeCts	InVested equItY a$M	CoMMItted equItY1 a$M
	June 2013 June 2012 June 2013 June 2012 June 2013 June 2012
Australia Operational(secured)	4 1 44.1 106.7 15.0
Preferred bidder	1
total	5 1 44.1 106.7 15.0

1 Committed equity refers to equity the Group has a future commitment to invest.

	nuMBer oF proJeCts1	InVested equItY £M	CoMMItted equItY2 £M	FaCILItIes ManaGeMent reVenue BaCKLoG3 £M
	June 2013 June 2012 June 2013 June 2012 June 2013 June 2012 June 2013 June 2012
Europe Operational/under construction (secured)	24 24 64.1 61.0 3.1 6.0 615.6 591.8
Preferred bidder(awarded)	1 7.7 386.6
total	25 24 64.1 61.0 10.8 6.0 1,002.2 591.8

• 1 Number of projects includes extensions of existing projects and projects where the Group is the preferred bidder.

• 2 Committed equity refers to equity and loan stock contributions the Group has a future commitment to invest.

• 3 Facilities management revenue backlog disclosed is for a maximum of 10 years, although PPP contracts typically operate for a period of up to 40 years.

	nuMBer oF proJeCts1	estIMated CapItaL spend2 us$B	InVested and CoMMItted equItY3 us$M	unIts under ManaGeMent
	June 2013 June 2012 June 2013 June 2012 June 2013 June 2012 June 2013 June 2012
Americas Operational(secured)	21 19 6.4 6.0 93.5 95.3 52,900 49,340
Preferred bidder(awarded)	1 3 0.1 0.5 6,800
total	22 22 6.5 6.5 93.5 95.3 52,900 56,140

• 1 Number of projects includes extensions of existing projects and projects where the Group is the preferred bidder. Where a project has multiple phases, these have been combined on completion for the purposes of presentation. The 30 June 2012 Portfolio Report disclosed 27 projects; this has now been revised to 22.

• 2 Over the initial development period of the project.

• 3 Includes both invested and committed equity the Group has a future commitment to invest.

Group Assets

Group Assets
	austraLIa	asIa	europe	aMerICas	totaL
	June 2013 June 2012 June 2013 June 2012 June 2013 June 2012 June 2013 June 2012 June 2013 June 2012
Development	6,784.4 6,114.9 2.5 92.2 364.6 237.9 63.6 64.3 7,215.1 6,509.3
Construction	2,333.1 2,517.5 286.1 312.4 630.4 741.1 1,066.1 881.8 4,315.7 4,452.8
Investment Management	383.4 236.6 243.7 194.5 541.3 537.2 (157.0)1 1,168.4 811.3
Infrastructure Development	196.4 13.2 149.3 111.6 136.1 116.1 481.8 240.9
total segment	9,697.3 8,882.2 532.3 599.1 1,685.6 1,627.8 1,265.8 905.2 13,181.0 12,014.3
Corporate activities	1,029.4 689.2
total assets	9,697.3 8,882.2 532.3 599.1 1,685.6 1,627.8 1,265.8 905.2 14,210.4 12,703.5

1 The Group had a net tax receivable position at 30 June 2012 and therefore the Investment Management assets in the Americas at 30 June 2012 includes an income tax payable balance of A$157.8 million, which has been reclassified to assets in the Statement of Financial Position in the Consolidated Financial Statements of the Group.

66 annual report 2013 Lend Lease

dIreCtors’ report

ta B L e o F C o n t e n t s

**1. **	Governance	67
a.	Board/Directors	67
b.	General Counsel and Company Secretary Qualifcations and Experience	70
c.	Offcers Who Were PreviouslyPartners of the Audit Firm	70
d.	Directors’ Meetings	70
e.	Interest in Capital	72
**2. **	operations	73
a.	Principal Activities	73
b.	Review and Results of Operations	73
c.	Distributions	75
d.	Signifcant Changes in State of Affairs	76
e.	Events Subsequent to Balance Date	76
f.	LikelyDevelopments	76
g.	Environmental Regulation	76
**3. **	remuneration report	77
a.	Remuneration Overview	79
b.	Remuneration Disclosures	88
c.	Our Reward Strategyand Framework	92
d.	How Rewards are Linked to Performance	96
e.	Senior Executives’ Contracts	100
f.	Remuneration Governance	101
g.	Non Executive Directors’ Fees	102
h.	Executive Remuneration in Detail	104
i.	Appendix	111
**4. **	other	113
a.	SecurityOptions	113
b.	Indemnifcation and Insurance of Directors and Offcers	113
c.	Non Audit Services	113
d.	RoundingOff	113
Lead auditor’s Independence declaration under section
307C of the Corporations act 2001		114

The Directors present their Report together with the Annual Consolidated Financial Report of the consolidated entity, being Lend Lease Corporation Limited (‘the Company’) and its controlled entities including Lend Lease Trust (‘LLT’) (together referred to as the ‘Consolidated Entity’ or the ‘Group’), for the financial year ended 30 June 2013 and the Auditor’s Report thereon.

annual report 2013 Lend Lease 67

1. GoVernanCe

dIreCtors’ report

==> picture [162 x 106] intentionally omitted <==

==> picture [162 x 106] intentionally omitted <==

==> picture [162 x 106] intentionally omitted <==

From top to bottom: D A Crawford AO S B McCann C B Carter AM

a. Board/directors

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

D A Crawford AO, Chairman (Independent Non Executive Director)

age 69 term of office

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

skills, experience and qualifications

Mr Crawford has extensive experience in risk management and business reorganisation. He has acted as a consultant, scheme manager, receiver and manager and liquidator to many large and complex corporations. Previously, Mr Crawford was National Chairman of the Australian firm of KPMG. He was appointed an Officer of the Order of Australia (AO) in June 2009 in recognition for service in various fields including 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.

Mr Crawford holds a Bachelor of Commerce and Bachelor of Laws from the University of Melbourne and is a Fellow of the Institute of Chartered Accountants.

other directorships and positions (current and recent)

• n Chairman of Australia Pacific Airports Corporation Limited (appointed May 2012)

• n Non Executive Director of BHP Billiton Limited (appointed May 1994)

• n Former Chairman of Foster’s Group Limited (appointed Director August 2001 and Chairman November 2007, resigned December 2011)

• n Former Director of Westpac Banking Corporation (appointed May 2002, resigned December 2007)

• n Former Chairman of National Foods Limited (appointed November 2001, resigned June 2005)

Board Committee Memberships

Finance Director, appointed in March 2007 and Chief Executive Officer for Lend Lease’s Investment Management business from September 2005 to December 2007.

Mr McCann has more than 15 years’ experience in funds management and capital markets transactions. Prior to joining Lend Lease, Mr McCann spent six years 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. Previous roles also include Head of Property at Bankers’ Trust, four years as a mergers and acquisitions lawyer at Freehills and four years in taxation accounting.

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

other directorships and positions

n Nil

C B Carter AM

(Independent Non Executive Director)

age 70

term of office

Mr Carter joined the Board in April 2012.

skills, experience and qualifications

Mr Carter is one of the founding partners of The Boston Consulting Group in Australia, retiring as a Senior Partner in 2001, and continues as an Adviser with that company. He has over 30 years of experience in management consulting advising on organisational, strategy and governance issues. His career has included major projects in Australia and overseas. Mr Carter has wide industry knowledge on corporate governance issues and has carried out board performance reviews for a number of companies. He has co-authored a book on boards, ‘Back to the Drawing Board’.

Mr Carter holds a Bachelor of Commerce degree from Melbourne University and a Master of Business Administration from Harvard Business School, where he graduated with Distinction and as a Baker Scholar. He is a Fellow of the Australian Institute of Company Directors.

• n Member of the Nomination Committee

S B McCann, Group Chief Executive Officer and Managing Director (Executive Director)

age 48

term of office

Mr McCann was appointed Group Chief Executive Officer in December 2008 and joined the Board as Managing Director in March 2009.

skills, experience and qualifications

Mr McCann joined Lend Lease in 2005. Prior to his current role, Mr McCann was Group

other directorships and positions (current and recent)

• n Non Executive Director of Wesfarmers Limited (appointed October 2002)

• n Non Executive Director of SEEK Limited (appointed March 2005)

• n President of Geelong Football Club

• n Director of World Vision Australia

• n Director of The Ladder Project

Board Committee Memberships

• n Chairman of the Nomination Committee

• n Member of the Sustainability Committee

68 annual report 2013 Lend Lease

1. GoVernanCe CONTINUED

dIreCtors’ report

==> picture [161 x 106] intentionally omitted <==

==> picture [161 x 107] intentionally omitted <==

==> picture [161 x 106] intentionally omitted <==

From top to bottom: P M Colebatch G G Edington P C Goldmark

P M Colebatch

(Independent Non Executive Director)

age 68

term of office

Mr Colebatch joined the Board in December 2005.

skills, experience and qualifications

Mr Colebatch 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.

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.

other directorships and positions (current and recent)

• n Non Executive Director of Man Group plc (appointed September 2007)

• n Board of Trustees for the Prince of Liechtenstein Foundation and the LGT Group Foundation (appointed September 2009)

• n Former Director of Insurance Australia Group Limited (appointed January 2007, resigned August 2012)

Board Committee Memberships

• n Chairman of the Personnel and Organisation Committee

• n Member of the Risk Management and Audit Committee

• n Member of the Nomination Committee

G G Edington CBE

(Independent Non Executive Director)

age 67

term of office

Mr Edington joined the Board in December 1999.

skills, experience and qualifications

Mr Edington brings to the Board extensive UK and international experience in the property sector and is qualified as a Chartered Surveyor. 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 awarded a CBE for services to children and was formerly Chairman of the Council of Trustees of the UK children’s charity, Action for Children.

other directorships and positions (current and recent)

• n Deputy Chairman of the Fulham Palace Trust (appointed to the Board in May 2011 and as Deputy Chairman in April 2012)

• n Director on Chobham School Academy Trust (appointed March 2013)

Board Committee Memberships

• n Member of the Risk Management and Audit Committee

• n Member of the Sustainability Committee

• n Member of the Nomination Committee

P C Goldmark

(Independent Non Executive Director)

age 72 term of office

Mr Goldmark joined the Board in December 1999.

skills, experience and qualifications

Mr Goldmark 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. Until his retirement in December 2010, he was Director, Climate and Air Program at Environmental Defense, a US based nonprofit environmental advocacy organisation. He was the Chairman and Chief Executive Officer of The International Herald Tribune in Paris between 1998 and 2003. Prior to this, he was 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. He now works as an independent consultant and columnist and is a writer and speaker on world affairs.

Mr Goldmark graduated with a BA from Harvard College, Government Department, magna cum laude.

other directorships and positions (current and recent)

• n Chairman of the Mekong Renewable Resources Fund, an advisory board operating in the IndoChina peninsula (appointed March 2012)

Board Committee Memberships

• n Member of the Sustainability Committee

• n Member of the Nomination Committee

annual report 2013 Lend Lease 69

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From top to bottom: J S Hemstritch D J Ryan AO M J Ullmer

J S Hemstritch (Independent Non Executive Director)

age 60 term of office Ms Hemstritch joined the Board in September 2011.

skills, experience and qualifications

Ms Hemstritch has extensive senior executive experience in information technology, communications, change management and accounting. She also has broad experience across the financial services, telecommunications, government, energy and manufacturing sectors and in business expansion in Asia. During a 25 year career with Accenture and Andersen Consulting, Ms Hemstritch worked with clients across Australia, Asia and the US. She held a number of leadership positions within the company and was Managing Director Asia Pacific for Accenture from 2004 until her retirement in 2007. Ms Hemstritch was a member of Accenture’s global Executive Leadership Team and oversaw the management of Accenture’s business in the Asia Pacific region which spanned 12 countries and included 30,000 personnel.

Ms Hemstritch has a Bachelor of Science degree in Biochemistry and Physiology from the University of London and is a Fellow of the Institutes of Chartered Accountants in Australia and in England and Wales. She is a Member of the Council of the National Library of Australia and Chief Executive Women Inc.

other directorships and positions (current and recent)

• n Non Executive Director of the Commonwealth Bank of Australia (appointed October 2006)

• n Non Executive Director of Tabcorp Holdings Ltd (appointed November 2008)

• n Non Executive Director of Santos Limited (appointed February 2010)

• n Chairman of Victoria Opera Company Ltd (appointed Director October 2010 and Chairman February 2013)

• n Former Director and Deputy Chairman of The Global Foundation (appointed November 2009, resigned November 2012)

Board Committee Memberships

• n Member Personnel and Organisation Committee

• n Member of the Nomination Committee

D J Ryan AO

(Independent Non Executive Director)

age 61

term of office

Mr Ryan joined the Board in December 2004.

skills, experience and qualifications

Mr Ryan has a background in commercial banking, investment banking and operational business management. He has previously held senior executive management positions in investment banking and industry, as well as being the Chairman or a Non Executive Director of a number of listed public companies.

Mr Ryan has a Bachelor of Business from the University of Technology in Sydney, Australia, and is a Fellow of the Australian Institute of Company Directors and CPA Australia.

other directorships and positions (current and recent)

• n Chairman of Tooth & Co (appointed Director September 1999 and Chairman January 2003)

• n Chairman of ABC Learning Centres Limited (administrators appointed, receivers and managers appointed) (appointed Director June 2003 and Chairman 30 May 2008)

• n Advisory Board of Virgin Group Worldwide (appointed August 2012)

• n Former Non Executive Director of Aston Resources Limited until the merger with Whitehaven Coal (appointed November 2011 and resigned May 2012)

• n Former Chairman of Transurban Holdings Limited (appointed Director April 2003, Chairman February 2007 and retired August 2010)

Board Committee Memberships

• n Chairman Risk Management and Audit Committee

• n Member Personnel and Organisation Committee

• n Member of the Nomination Committee

M J Ullmer

(Independent Non Executive Director)

age 62

term of office

Mr Ullmer joined the Board in December 2011.

skills, experience and qualifications

Mr Ullmer brings to the Board extensive strategic, financial and management experience accumulated over his career in international banking and finance. He was the Deputy Group Chief Executive Officer of the National Australia Bank (NAB) from 2007 until he stepped down from the Bank in August 2011. He joined NAB in 2004 as Finance Director and held a number of key positions including Chairman of the subsidiaries Great Western Bank (US) and JB Were. Prior to NAB, Mr Ullmer was at Commonwealth Bank of Australia, initially as Group Chief Financial Officer and then Group Executive with responsibility for Institutional and Business Banking. Before that he was a Partner at accounting firms KPMG (1982 to 1992) and Coopers & Lybrand (1992 to 1997).

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dIreCtors’ report

Mr Ullmer has a degree in mathematics from the University of Sussex. He is a Fellow of the Institute of Chartered Accountants and a Senior Fellow of the Financial Services Institute of Australia.

other directorships and positions (current and recent)

• n Non Executive Director of Woolworths Limited (appointed January 2012)

• n Advisory Board of Nomura Australia (appointed September 2012)

• n Board of Melbourne Symphony Orchestra (appointed February 2007)

• n National Gallery of Victoria (appointed December 2011)

• n Chairman Schools Connect Australia (appointed November 2011)

• n Former Executive Director of National Australia Bank (appointed October 2004, retired August 2011)

• n Former Director of Bank of New Zealand (appointed September 2007, retired August 2011)

• n Former Non Executive Director of Fosters Group Limited (appointed June 2008, resigned December 2011)

Board Committee Memberships

• n Chairman Sustainability Committee

• n Member Risk Management and Audit Committee

• n Member of the Nomination Committee

Former Directors

Ms J A Hill retired from the Board on 15 November 2012, having joined the Board in May 2006.

b. General Counsel and Company secretary qualifications and experience

K Pedersen

Ms Pedersen was appointed as Group General Counsel in January 2013. Before that she was Deputy General Counsel and Company Secretary for several large property and construction companies. Ms Pedersen has a Masters of Law from the University of Technology, Sydney and a Bachelor of Commerce/Bachelor of Laws from the University of New South Wales.

W Lee

Ms Lee joined Lend Lease in September 2009 and was appointed as a Company Secretary of Lend Lease in January 2010. Prior to her appointment, Ms Lee was a company secretary for several subsidiaries of a large financial institution listed on the ASX. She has over

10 years of company secretarial experience. Ms Lee has a Bachelor of Arts and a Bachelor of Laws from the University of Sydney, a Graduate Diploma in Applied Corporate Governance and is an Associate of Chartered Secretaries Australia.

W Hara

Mr Hara resigned as Group General Counsel and Company Secretary of Lend Lease on 28 September 2012. Mr Hara was with Lend Lease for six years.

c. officers Who Were previously partners of the audit Firm

KPMG or its predecessors was appointed as the Company’s auditor at its first Annual General Meeting in 1958. 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. Mr Ullmer was also a Partner at KPMG from 1982 until October 1992.

d. directors’ Meetings

Board Meetings

The Board meets as often as necessary to fulfil its role. Directors are required to allocate sufficient time to the Group to perform their responsibilities effectively, including adequate time to prepare for Board meetings. During the financial year ended 30 June 2013, 15 Board meetings were held. Five of these meetings were held in Australia and one each in the UK, Americas and Asia reflecting the geographic spread of the Lend Lease business. These meetings run over two or three days. Seven meetings were held via teleconference to discuss specific matters. In addition, matters were dealt with as required by circular resolution.

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.

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 Group’s risk management and internal control systems, accounting policies and practices, internal and external audit functions and financial reporting. During the financial year ended 30 June 2013, five meetings of the Risk Management and Audit Committee were held. In addition, two special Risk Management and Audit Sub Committees were established to deal with specific matters.

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 ended 30 June 2013, sixteen meetings of the Personnel and Organisation Committee were held. Full details of the Committee’s work on behalf of the Board are set out in the Remuneration Report. This includes the review of the Group’s Executive Reward Strategy conducted by the Committee during the reporting period in response to the concerns raised by securityholders in their comments on the 2012 Remuneration Report at the 2012 AGM and expressed in separate discussions with stakeholders.

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 Lend Lease’s aspiration to be a sustainable organisation. During the financial year ended 30 June 2013, four meetings of the Sustainability Committee were held.

Nomination Committee

The Nomination Committee consists entirely of Non Executive Directors. The Committee assists the Board by considering nominations to the Board to ensure that there is an appropriate mix of expertise, skills and experience on the Board. During the financial year ended 30 June 2013, all eight meetings of the Nomination Committee were held in conjunction with scheduled Board meetings and all Non Executive Directors routinely attend.

annual report 2013 Lend Lease 71

Attendance at Meetings of Directors 1 July 2012 to 30 June 2013

The number of Board and Board Committee meetings held, and the number of meetings attended by each Director during the 2013 Financial Year are set out in the tables below.

			Number of
		Number of	Meetings
	Membership	Meetings Held1	Attended
Board	D A Crawford (Chairman)	15	15
	S B McCann (CEO)	15	15
	C B Carter2	15	13
	P M Colebatch	15	15
	G G Edington	15	14
	P C Goldmark	15	15
	J S Hemstritch	15	15
	J A Hill3	3	1
	D J Ryan4	15	14
	M J Ullmer	15	15
Board sub Committee meetings	G G Edington	1	1
	D J Ryan	2	2
	M J Ullmer	1	1
	standing Invitees:
	D A Crawford	1	1
risk Management & audit	D J Ryan (Chairman)	5	4
Committee Meetings	P M Colebatch	5	5
	G G Edington	5	5
	M J Ullmer	5	5
	standing Invitees:
	D A Crawford	5	5
risk Management and audit	D J Ryan (Chairman)	5	5
sub Committee no 1	M J Ullmer	5	5
	standing Invitees:
	D A Crawford	5	5
risk Management and audit	D J Ryan (Chairman)	6	6
sub Committee no 2	J S Hemstritch	6	6
	M J Ullmer	6	6
	standing Invitees:
	D A Crawford	6	6
personnel and organisation	P M Colebatch (Chairman)	16	16
Committee	J S Hemstritch	16	16
	D J Ryan	16	15
	J A Hill	3	1
	standing Invitees:
	D A Crawford	11	11
	C B Carter	2	2
	M J Ullmer	2	2
sustainability Committee	M J Ullmer (Chairman)	4	4
	G G Edington	4	4
	P C Goldmark	4	4
	C B Carter	2	2
	J A Hill	2	0
	standing Invitees:
	D A Crawford	4	4
nomination Committee	C B Carter (Chairman)	8	7
	D A Crawford	8	8
	P M Colebatch	8	8
	G G Edington	8	8
	P C Goldmark	8	8
	J S Hemstritch	8	8
	D J Ryan	8	7
	M J Ullmer	8	8
	J A Hill	3	1

• 1 Reflects the number of meetings held during the time the Director held office during the year. Seven of the 15 meetings were out of schedule board teleconferences constituted to address specific issues. G G Edington and C B Carter were unable to attend one each of these teleconferences, both of which were called at short notice.

• 2 C B Carter was unable to attend the November 2012 meeting as he had a timetable conflict.

• 3 J A Hill retired from the Board on 15 November 2012.

• 4 D J Ryan was unable to attend the April 2013 meeting due to ill health. Leave of absence was granted. D J Ryan received full briefings of the matters discussed at the meeting by the Chairman and the Secretary.

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dIreCtors’ report

e. Interest in Capital

The interest of each of the Directors (in office at the date of this report) in the stapled securities of the Group at 30 June 2013 and 30 June 2012 is set out below.

	Securities			Securities
Securities	held		Securities	held
held	benefcially/		held	benefcially/
directly	indirectly	Total	directly	indirectly	Total
2013	20131	2013	2012	20121	2012
Director D A Crawford 778	74,773	75,551	741	73,769	74,510
S B McCann 292,961	154,443	447,404	224,153	154,443	378,596
C B Carter	15,000	15,000		15,000	15,000
P M Colebatch 5,023	13,300	18,323	5,023	13,300	18,323
G G Edington 22,998	17,070	40,068	21,165	18,903	40,068
P C Goldmark 6,892	17,902	24,794	4,765	20,029	24,794
J S Hemstritch	20,000	20,000		20,000	20,000
J A Hill2			2,000	12,324	14,324
D J Ryan 15,792	15,481	31,273		31,273	31,273
M J Ullmer	25,000	25,000		25,000	25,000

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

2 J A Hill retired from the Board on 15 November 2012.

annual report 2013 Lend Lease 73

dIreCtors’ report

2. operatIons

a. principal activities

Overview

Lend Lease’s vision is to create the best places, which supports its strategic direction ‘to be the leading international property and infrastructure group’. Our core lines of business are development, construction, investment management, services and ownership of property and infrastructure assets. The Group has clear priorities and is currently focused on the delivery and execution of its major projects, disciplined portfolio management, driving operational efficiencies and allocating capital to key growth platforms.

The Group operates a regional management structure focused on four major geographic regions: Australia, Asia, Europe and the Americas. The regional business units generate earnings from four lines of business, as follows:

• n development: involves the development of urban communities, inner-city mixed-use developments, apartments, retirement, retail, commercial and healthcare assets;

• n Construction: involves project management, building, engineering and construction services;

• n Investment Management: involves property and infrastructure investment management, property management and asset management and includes the Group’s ownership interests in property and infrastructure investments; and,

• n Infrastructure development: arranges, manages and invests in Public Private Partnership (PPP) projects.

b. review and results of operations

	Statutory proft	Statutory	Statutory			Statutory	Dividends/
	after tax1	cash fow	ROE	Net debt	Gearing	EPSS1	Distributions
	A$m	A$m	%	A$m	%	cents	cents
2013	551.6	580.5	13.4	691.9	6.1	96.0	42
2012	501.4	(88.3)	13.4	655.2	6.3	87.7	38
% Movement	+10%	Large	–	+6%	-0.2%	+9%	+11%

1 Attributable to stapled securityholders.

The Group made further progress implementing its strategy during the year with the following key achievements:

development:

• n Estimated pipeline end value of A$37.4 billion (June 2012: A$37.2 billion);

• n Progress on Barangaroo South in Australia:

• Tenant pre-commitments of 71% for the commercial floor space in the first two towers (77% including current Memorandums of Understanding);

• Working with Crown Limited to reach an agreement to develop an international hotel; and,

• Planning approval for the first two residential towers.

• n Sale of the Group’s 25% interest in the Jem[®] retail asset in Singapore, which opened in June 2013;

• n Commencement of activity at Elephant & Castle in the UK:

• Planning approval for the £1.5 billion regeneration masterplan achieved; and,

• Launch of the first two residential buildings, One The Elephant and Trafalgar Place, with 61% pre-sales achieved;

• n Divestment of the Group’s interest in Greenwich Peninsula Regeneration Limited in the UK.

Construction:

• n Securing new work of A$12.7 billion including Sunshine Coast University Hospital, New Bendigo Hospital and the Pacific Highway Nambucca Heads to Urunga upgrade in Australia; Kingsgate House in the UK; and 432 Park Avenue and Privatized Army Lodging (PAL) Group C in the US;

• n Successful completion of the construction of Jem[®] , a retail and office asset in Singapore; and,

• n Closing backlog revenue of A$16.2 billion (June 2012: A$15.1 billion). Backlog revenue increases to circa A$17.2 billion including Sydney International Convention, Exhibition and Entertainment Precinct which is at the preferred bidder stage.

Investment Management:

• n Funds under management of A$15.0 billion (June 2012: A$12.3 billion);

• n Launch of Lend Lease International Towers Sydney Trust with funding for the first two commercial towers at Barangaroo South; and,

• n Launch of the Lend Lease Jem Partners Fund and subsequent purchase of the Group’s 25% interest in Jem[®] .

Infrastructure development:

• n Financial close on three infrastructure development projects in Australia – Sunshine Coast University Hospital, Eastern Goldfields Regional Prison and New Bendigo Hospital;

• n Sale of a further two UK PPP assets to the UK Infrastructure Fund; and,

• n Financial close of the Privatized Army Lodging (PAL) Group C in the US.

Corporate:

• n A$0.6 billion of new debt issued (A$375.0 million Australian medium term notes and S$275.0 million Singapore bond).

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dIreCtors’ report

Review of Financial Performance

The Group delivered a statutory profit after tax of A$551.6 million, an increase of 10%, with the key components as follows.

In australia , statutory profit after tax increased to A$505.2 million (Operating profit after tax: A$506.6 million[1] ).

• n The Development business was the main contributor to the increase in profit, primarily due to earnings relating to the first two commercial towers at Barangaroo South, partially offset by reduced residential activity in the year.

• n The Construction business results for the year have been impacted by the tightening of market conditions and the underperformance of some projects in the second half of the financial year.

• n The Investment Management business prior year results included the sale of the New Zealand Retail Portfolio to Lend Lease Real Estate Partnership New Zealand.

• n The Infrastructure Development results include fees received following the financial close of Sunshine Coast University Hospital, Eastern Goldfields Regional Prison and New Bendigo Hospital.

In asia , statutory profit after tax increased to A$112.6 million.

• n The Development business includes the profit on the sale of the Group’s interest in the Jem[®] retail asset in Singapore.

• n The Construction business profit after tax has increased by A$2.8 million to A$28.6 million, with the key contributors being finalisation of the Jem[®] project and continued delivery of the telecommunications rollouts across Japan.

• n The Investment Management prior year result included the partial sell down of the Group’s interest in Asia Pacific Investment Company No. 2 Limited and the investment income prior to its sale, plus the recognition of a deferred profit from the sale of the Group’s 25% direct ownership in PoMo.

In europe , statutory profit after tax increased to A$99.5 million.

• n The Development business is the main contributor to the Europe current year profit, predominantly due to the profit on the sale of the Group’s interest in Greenwich Peninsula Regeneration Limited, which completed in July 2012.

• n Construction profit after tax decreased by A$36.2 million in the year, primarily due to a reduction in volume across the UK, Spain, Italy and Russia, the underperformance of some projects in the second half of the year and the cost of restructuring the UK business.

• n Investment Management profit after tax decreased by A$8.9 million due to reduced net investment income following the sale of the Group’s ownership interest in Chelmsford Meadows shopping centre in the prior year, which also included profit on the sale.

• n The Infrastructure Development business current year result includes profit on the sale of two education PPP assets to the UK Infrastructure Fund, as compared to the prior year, which included the sale of five UK PPP assets to the UK Infrastructure Fund.

In the americas , statutory profit after tax increased to A$53.7 million.

• n During the current year, the Development business completed and sold its ownership in the Bon Secours St. Francis Watkins Centre in Virginia and commenced construction on three new projects.

• n Construction profit increased by A$12.3 million due to the continued improvement in the core commercial markets of New York and Chicago and improved profit from the Military Housing Privatization Initiative projects due to realisation of earnings as more projects in the portfolio achieve substantial completion. The prior year was impacted by the New York investigation.

• n The Investment Management prior year result included profit relating to completion of the sale of the Group’s 50% ownership interest in the King of Prussia shopping mall.

• n Infrastructure Development profit increased by A$16.6 million mainly due to reaching financial close of the US Department of the Army’s Privatized Army Lodging (PAL) Group C project.

Corporate statutory loss after tax increased to A$219.4 million.

• n Group Services loss after tax increased to A$152.0 million due to the Group’s restructuring of the Australia business, the transformation program and the Abigroup investigation.

• n Key trading elements of the Group Treasury contribution during the year include:

• Reduced interest revenue of A$10.3 million is due to lower average cash balances and interest rates compared to the prior year. The interest rate on invested cash averaged 3.5% per annum for the year (June 2012: 3.9%); and,

• Reduced interest expense of A$14.2 million is primarily due to reduced facility costs and gains on mark to market derivatives. The Group’s weighted average cost of debt at 30 June 2013 is 5.7% (June 2012: 6.2%).

1 Operating profit excludes net property revaluation losses of A$1.4 million after tax.

annual report 2013 Lend Lease 75

Review of Financial Position

The Group remains in a strong position with the key components as follows:

• n A strong liquidity position, with cash and cash equivalents of A$1,538.4 million (June 2012: A$957.9 million) and undrawn committed bank facilities of A$1,099.4 million (June 2012: A$1,242.5 million);

• n Inventories have increased by A$72.5 million to A$2,891.0 million, largely due to an increase in work in progress in Development Australia and UK;

• n Bluewater is held as inventory, and therefore measured in the financial statements at cost, which at 30 June 2013 was A$444.2 million (June 2012: A$433.6 million). The market value of 100% of Bluewater at 30 June 2013 increased by 8% to £1,830.0 million (A$3,000.0 million). The market value of the Group’s 30% direct interest in Australian dollars increased by 16% to A$900.0 million;

• n equity accounted investments increased by A$115.3 million to A$585.5 million, largely attributable to an increase in joint venture investments, with the award and financial close of Sunshine Coast University Hospital, Eastern Goldfields Regional Prison and New Bendigo Hospital during the year. In addition, during the year the Lend Lease International Towers Sydney Trust was launched with funding for the first two commercial towers at Barangaroo South. These increases have been partially offset by the sale of the Group’s 25% interest in Jem[®] ;

• n Investment properties have increased by A$608.8 million to A$4,023.8 million, primarily due to the acquisition of four retirement villages and capital expenditure and revaluations on senior living and other development properties. These increases were offset by the sale of the Aged Care business and one retirement village;

• n other financial assets have increased by A$140.0 million to A$550.9 million, primarily due to the A$71.7 million promissory note received on the sale of the Aged Care business and a fair value gain on the Group’s 10.1% investment in ARIF 3, which owns 75% of Jem[®] which is recognised in the fair value revaluation reserve and reflected in the Statement of Comprehensive Income rather than the Income Statement;

• n Current borrowings reduced as the Group repaid US$100.0 million of the US Private Placement during October 2012;

• n non current borrowings increased by A$719.1 million, mainly due to the Group’s issuance of S$275.0 million Singapore dollar-denominated senior unsecured notes, maturing in July 2017 and A$375.0 million Australian medium term notes maturing in November 2018 and May 2020;

• n other financial liabilities remain materially unchanged. They include lease liabilities in relation to Construction Australia’s infrastructure business and the Bluewater finance leases; and,

• n other liabilities have increased by A$478.7 million to A$7,634.9 million, primarily due to an increase in senior living resident liabilities arising from the acquisition of four retirement villages, partially offset by the reduction in resident liabilities following the sale of the Aged Care business.

Review of Cash Flows

Net cash inflows have increased to A$580.5 million with the key movements as follows:

• n operating cash inflows of A$94.9 million are largely due to net Construction inflows, offset by net development expenditure in Australia and UK;

• n Investing cash inflows of A$151.6 million include the proceeds from the sale of the Group’s interest in Greenwich Peninsula Regeneration Limited and Jem[®] offset by the launch of Lend Lease International Towers Sydney Trust; and,

• n Financing cash inflows of A$302.8 million primarily relate to new debt facilities – A$375.0 million Australian medium term notes and S$275.0 million Singapore bond, partially offset by the US$100.0 million partial repayment of the Group’s US Private Placement and dividends/distributions payments in the year.

c. distributions

The 2012 final distribution of A$126.0 million (22.0 cents per security, nil% franked) referred to in the Directors’ Report dated 30 August 2012 was paid on 28 September 2012.

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

Details of distributions in respect of the current year are as follows:
	A$m
Interim distribution of 22.0 centsper security (unfranked) paid on 27 March 20131	126.4
Final distribution of 20.0 centsper security (unfranked)declared byDirectors to bepaid on 27 September 20132	115.1
total distributions declared	241.5

1 Comprised of an unfranked dividend of 21.845565 cents per share paid by the Company, and a trust distribution of 0.154435 cents per unit paid by LLT.

2 Comprised of an unfranked dividend of 19.009245 cents per share payable by the Company, and a trust distribution of 0.990755 cents per unit payable by LLT.

76 annual report 2013 Lend Lease

dIreCtors’ report

2. operatIons CONTINUED

d. significant Changes in state of affairs

Following stapled securityholders’ approval on 15 November 2012, the Company has reallocated capital to LLT by reducing the Company’s share capital by A$500.3 million and applying that amount as additional capital to LLT. This capital reallocation did not affect the number of shares on issue nor the number of units held by securityholders and did not result in any cash distribution to members.

There have been no other significant changes in the Group’s state of affairs.

e. events subsequent to Balance date

Since 30 June 2013, the Group subscribed for units in Australian Prime Property Fund Commercial (‘APPFC’) for a total investment of A$225.0 million.

There were no other material events subsequent to the end of the financial year.

f. Likely developments

Outlook and Prospects

Lend Lease has delivered continued profit growth in a challenging market. Our pipeline of opportunities provides earnings visibility and a platform for a strong growth trajectory over the next three years.

Our global development pipeline with an estimated end value of A$37.4 million underpins our strategic direction of becoming the leading international property and infrastructure group. Within this, projects such as Barangaroo South and the Sydney International Convention, Exhibition and Entertainment Precinct in Sydney, Victoria Harbour in Melbourne, Waterbank in Perth and Elephant & Castle in London position the Group well with good visibility of earnings in the near to medium term.

Despite a weakening construction market our backlog revenue of A$17.2 billion[1] remains robust. To further strengthen and grow our construction and infrastructure capabilities, we announced in June the transition of our four separate construction operations of Abigroup, Baulderstone, Project Management & Construction and Infrastructure Services into three sector based businesses focused on building, engineering and services – creating a unified team, working to a common vision and set of core values. This structure was implemented on 1 August 2013, and delivers a more competitive and effective operating business. It strengthens our integrated model, leverages our core capabilities, skills and experience, and differentiates our position in the global property and infrastructure market.

The strength of our balance sheet and access to third party capital means we have the financial capacity to fund our pipeline and invest in other opportunities, in line with our strategy. Balancing a target return on equity over the medium term of 15 per cent, alongside earnings growth, is a core discipline in our allocation of capital.

Despite challenging macro-economic conditions, we believe Lend Lease is well placed for 2014 and beyond. The Group’s result for future financial years remains subject to a number of risk factors including: a weakening construction market, property market risks and property market values, exchange rate fluctuations, development activity risk and investment and asset management activity risk. However, the Group has robust risk management practices in place to be able to deliver sustained long term growth in line with our strategy and manage and mitigate risks that may have an impact on future financial years.

g. environmental regulation

The Group is subject to various state and federal environmental regulations in Australia.

The Directors are not aware of any material non compliance with environmental regulations pertaining to the operations or activities during the period covered by this Report. In addition, the Lend Lease Group is registered and publicly reports the annual performance of its Australian operations under the requirements of the National Greenhouse and Energy Reporting (NGER) Act 2007 and Energy Efficiency Opportunities (EEO) Act 2006.

All Lend Lease businesses continue to operate an integrated Environment, Health and Safety Management System ensuring that non compliance risks and opportunities for environmental improvement are identified, managed and reported accordingly.

1 Including Sydney International Convention, Exhibition and Entertainment Precinct which is at preferred bidder stage.

annual report 2013 Lend Lease 77

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3. reMuneratIon report

Message from the Board

Welcome to the 2013 Remuneration Report where we explain how performance has been linked to reward outcomes at Lend Lease this year, and outline changes being made to remuneration policy going forward.

2013 was another strong performance year as Lend Lease continued to deliver on its ‘Restore, Build, Lead’ strategy to achieve long term sustainable growth for the Group. Revenue was A$12.2 billion up 6% from 2012, Statutory Profit After Tax increased to A$551.6 million up 10% from 2012 and Return on Equity was 13.4%. Funds under management increased by 22% to A$15.0 billion, construction backlog revenue increased 14% to A$17.2 billion and the estimated end value of the development pipeline is worth A$37.4 billion. Lend Lease continued to win major urban regeneration projects with a preferred position on the Sydney International Convention, Exhibition and Entertainment Precinct as well as success on major Public Private Partnership projects including Sunshine Coast University Hospital and the New Bendigo Hospital.

We value highly our continued focus on safety and sustainability. There were no fatalities in our operations, and over 80% of our operations around the world did not experience a critical incident this year. More than 90% of the major projects in our development pipeline have achieved or are targeting green certification.

Central to Lend Lease’s strategy is having the right people to lead the Group over the long term, and a competitive Executive Reward Strategy is a key to outperformance.

Despite strong growth and a solid track record, at the 2012 Annual General Meeting (AGM) we received 25.8% of votes cast against our Remuneration Report. In contrast, in 2011, approximately 90% of securityholders voted in favour of our Remuneration Report. This change in sentiment concerned the Board.

The Executive Reward Strategy was designed in 2010 to support the Group while in the ‘Restore’ phase of the Group’s strategy. There was a necessary focus on short term incentives during that strategic phase. The Board continually considers the Group’s Executive Reward Strategy and during the past year we reviewed the Reward Strategy to determine whether it continued to provide the appropriate motivation now that we are moving towards the ‘Lead’ phase of our strategy, bearing in mind market practice and stakeholder feedback. This comprehensive assessment considered how we set goals, how we measure performance, how performance should be translated into a remuneration package, and what factors should determine the vesting of deferred awards.

As part of this review, we met with more than 30 stakeholders to discuss Lend Lease’s remuneration arrangements. We appreciate the engagement with all stakeholders who have taken the time to share their views.

While there is no ‘one size fits all’ approach for an international property and infrastructure group with diverse business units, there was broad convergence on several issues and changes made to address them have been incorporated into our revised Executive Reward Strategy.

Given that 2013 remuneration packages had already been agreed at the time of the 2012 AGM, it was not possible to make significant changes for 2013. The changes that were made for the 2013 financial year included:

• n Extending the vesting period for the CEO’s Short Term Incentive (STI) to three years and capping the cash proportion of the CEO’s STI at A$800,000 as an interim measure for 2013, pending the more comprehensive review being undertaken;

• n Implementing mandatory securityholding levels for the CEO and Senior executives; and,

• n Introducing malus provisions for the CEO and Senior executives in relation to both deferred STI and Long Term Incentive (LTI) awards.

Following the more comprehensive review, enhancements to be implemented for the 2014 financial year include:

• n Agreeing a new contract with the CEO which includes a reduction to the CEO’s total target remuneration package with effect from 1 September 2013;

• n Changing the remuneration mix to place greater emphasis on LTIs;

• n Deferring a greater proportion of ‘above target’ STI awards for the CEO and Senior executives;

• n Introducing a second hurdle, Return on Equity (ROE), for LTIs; and,

• n Strengthening malus provisions for the CEO and Senior executives that may be applied to both deferred STI and LTI awards.

Our formal response to the key issues raised by securityholders and proxy advisers in relation to the 2012 Remuneration Report is set out on page 86 of this report.

After the release of the 2012 Remuneration Report we dealt with certain accounting discrepancies in relation to the recognition of profits and losses on two projects within the Abigroup operations. The Board agreed with the CEO that it was appropriate that there be a 10% reduction in the quantum of the 2012 STI award for the CEO and some Senior executives. These adjustments are reflected in the Statutory Remuneration Disclosure table.

We look forward to your comments on both our remuneration arrangements and the Remuneration Report.

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david Crawford, ao Chairman

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phillip Colebatch Chairman, Personnel and Organisation Committee

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executive reward at Lend Lease

Our Executive Reward Strategy, which consists of a framework and policy for governing how key senior employees in the organisation are remunerated, supports the achievement of Lend Lease’s strategy. This report explains our reward strategy and reports on the remuneration for Lend Lease’s Key Management Personnel (KMP).

C o n t e n t s

The report contains the following sections:

**a. **	remuneration overview	79
	Executives and Non Executive Directors Covered in this Report	79
	Remuneration Snapshot	80
	GroupPerformance	82
	2013 Highlights	82
	Performance and STI Pool	83
	CEO Scorecard and Board Assessment	84
	The CEO’s Contract	85
	Response to Concerns Raised in Relation to 2012 Remuneration Arrangements	86
**b. **	remuneration disclosures	88
	Remuneration of the CEO and Senior Executives for the Years Ended 2013 and 2012(StatutoryDisclosures)	89
	Remuneration Awarded bythe Board for the Year Ended 30 June 2013	90
	Actual Remuneration Received in 2013	91
	Reconciliation of 2013 Actual Remuneration Received with StatutoryRemuneration for the CEO	91
**c. **	our reward strategy and Framework	92
	SettingRemuneration Levels	93
	Remuneration Mix	93
	MandatorySecurityholding	94
	How Risk Management is Incorporated	95
**d. **	how rewards are Linked to performance	96
	Short Term Incentives(STI)	96
	LongTerm Incentives(LTI)	98
**e. **	executive Contracts	100
	Senior Executives’ Contracts	100
	Termination	100
f.	remuneration Governance	101
	Role of PwC	102
	Securities TradingPolicy	102
**g. **	non executive directors’ Fees	102
	Board and Committee Fees	102
	Remuneration of Non Executive Directors for the Years Ended 2013 and 2012	103
**h. **	executive remuneration in detail	104
	Deferred Securities Awards	104
	Prior Year LTI Awards	106
	OutstandingLTI Awards(EquityBased Payments)	108
i.	appendix	111
	Terms Used in this Report	111
	Remuneration Presentations Comparison	112

This report forms part of the Directors’ Report and has been audited in accordance with the Corporations Act 2001 .

annual report 2013 Lend Lease 79

a. remuneration overview

Executives and Non Executive Directors Covered by this Report

Ceo and senior executives

Ceo and senior executives
Current Executives
Stephen McCann	GroupChief Executive Offcer and ManagingDirector(CEO)
Tarun Gupta	Chief Executive Offcer, Property, Australia_(appointed to this role 24 October 2012)_
Simon Hipperson	Chief Executive Offcer, Europe, Middle East and Africa
	(commenced with Lend Lease and appointed to this role 1 October 2012)
Daniel Labbad	Group Chief Operating Offcer_(appointed to this role 2 July 2012)_
	Chief Executive Offcer, Europe, Middle East and Africa_(ceased this role 30 September 2012)_
Rod Leaver	Chief Executive Offcer, Asia
AnthonyLombardo	GroupChief Financial Offcer
Robert McNamara	Chief Executive Offcer, Americas
David Saxelby	Chief Executive Offcer, Construction and Infrastructure, Australia
	(appointed to this role 18 February 2013, commenced with Lend Lease 2 April 2012)
Former Executives
Mark Menhinnitt	Chief Executive Offcer Construction & Infrastructure, Australia
	(appointed to this role 24 October 2012 and ceased this role 17 February 2013)
	Chief Executive Offcer, Australia_(ceased this role 23 October 2012)_
Craigvan der Laan de Vries	Chief StrategyOffcer (ceased this role and employment on 31 December 2012)
non executive directors
Current Non Executive Directors
David Crawford	Independent Chairman
Colin Carter	Independent Non Executive Director
PhillipColebatch	Independent Non Executive Director
Gordon Edington	Independent Non Executive Director
Peter Goldmark	Independent Non Executive Director
Jane Hemstritch	Independent Non Executive Director
David Ryan	Independent Non Executive Director
Michael Ullmer	Independent Non Executive Director
Former Non Executive Directors
Julie Hill	Independent Non Executive Director_(ceased this role 15 November 2012)_

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Remuneration Snapshot

The following table sets out a summary of each component of the remuneration package for all Senior executives, including its purpose, how it operates in practice and key changes from last year.

Component of remuneration	Purpose and link to Lend Lease strategy	How this operates in practice	Target and maximum opportunity	Description of performance metrics	Changes since 2012
Fixed Remuneration – Total Package Value (TPV) or Base Salary (for Senior executives outside Australia)	To provide base salary and benefts which are competitive with those provided by companies of a similar size and level of complexity. To reward performance relative to expectations based on Senior executives’ job descriptions and scope of responsibility.	Fixed pay is comprised of base salary and the value of retirement provisions and other fxed benefts and allowances. Fixed remuneration is set with reference to the market median and, in some cases, such as the case of complex global roles, the 75th percentile. The positioning depends upon the specifc nature of the role, the individual’s performance and the overall remuneration mix. Fixed remuneration is reviewed annually with changes effective 1 September.	Fixed remuneration is approximately 33% of the target remuneration mix for the CEO and approximately 40% – 45% of the target remuneration for Senior executives.	When setting fxed remuneration and considering external benchmarks the Personnel and Organisation (P&O) Committee takes into account: n Group and individual performance; n job size and complexity; n individual tenure; n risk profle of the role; and, n internal relativities.	No fxed remuneration increase was awarded to the CEO. Senior executives who were appointed to new roles or who were paid substantially less than the market benchmark received fxed remuneration increases to refect market levels. In other cases, modest fxed remuneration increases were awarded.
Short Term Incentive (STI)	STI awards are only provided where executives perform well against Key Performance Indicators (KPIs) in scorecards. KPIs are structured as ‘building blocks’ to achieve Lend Lease’s short, medium and long term strategic and business goals. Senior executives are also assessed against Lend Lease’s defned leadership capabilities (including safety, sustainability and diversity), values and behaviours.	Actual STI awards will depend upon Group performance (and regional performance for regional executives) as well as individual performance measured against the scorecards. The CEO scorecard for 2013 is set out on page 84.	STI is based on ‘target opportunities’ which are set using the remuneration mix outlined on page 93 and are tested against the relevant market peers for each executive role.	Group (and regional) fnancial performance determine the pool to fund STI awards. Individual awards are based on individual performance against a scorecard of fnancial and non fnancial KPIs.	The proportion of the CEO’s 2013 STI delivered as cash was reduced, with an increase to the deferred securities portion. As an interim measure, the deferral period was extended to three years (deferred securities vesting in equal portions over years one, two and three from the year of grant).

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Component of remuneration	Purpose and link to Lend Lease strategy	How this operates in practice	Target and maximum opportunity	Description of performance metrics	Changes since 2012
Short Term Incentive (STI) continued	In this way, the STI rewards ‘what’ is achieved as well as ‘how’ it is achieved. The signifcant portion delivered as deferred securities encourages executives to deliver sustainable performance and aligns the interests of executives and securityholders.	At least 50% of the actual STI award is retained and deferred into securities which vest over a one and two year period (or one, two and three year period for the CEO in 2013).	The minimum possible STI outcome is zero and the maximum possible STI outcome for outstanding Group and individual performance is 150% of the CEO and Senior executive’s target STI opportunity.		The CEO’s target and maximum STI opportunity will be reduced in 2014, leading to a reduction in total target remuneration. From 2014 for the CEO and Senior executives, any ‘above target’ STI awards will have increased deferral.
Long Term Incentive (LTI)	LTI awards are designed to motivate Senior executives to achieve Lend Lease’s long term strategic goals and only provide reward where Lend Lease delivers better securityholder value than its peers. LTI awards also align the interests of executives and securityholders given that the value received is linked to the Lend Lease security price.	An annual LTI grant is made to Senior executives. The award is determined with reference to the target remuneration mix for the role and the Lend Lease security price.	For the CEO in 2013, under the current Executive Reward Strategy, the target LTI was 20-30% of the overall target remuneration package. For the Senior executives in 2013, target LTI was about 15-20% of the overall target remuneration mix. LTI will comprise a greater proportion of total remuneration in 2014 and beyond.	2013 LTI performance securities (granted 1 September 2012) are subject to relative Total Shareholder Return (TSR) performance against the S&P/ASX 100 companies. 50% can vest after three years and 50% can vest after four years.	From 2014, a second performance hurdle is being introduced – Return on Equity (ROE). The CEO’s 2014 LTI grant will be A$1,750,000 (or 31% of the total target remuneration package) and allocated on a fair value basis. The increase in the CEO’s LTI grant, combined with the larger reduction in the STI opportunity, will lead to an overall decrease in the CEO’s total target remuneration package. From 2014, LTI will form a greater proportion of the overall remuneration mix for Senior executives.
Mandatory Securityholding	Encourages the CEO and Senior executives to take a long term perspective when making decisions and strengthens alignment with securityholders.	Executives are required to accumulate and maintain a holding of Lend Lease securities. 50% of vested deferred STI and LTI awards granted from 1 July 2012 will be retained until the requirement is achieved.	The CEO and Senior executives respectively are required to hold 150% and 100% of fxed remuneration in securities. This holding is required to be achieved within six years.	–	New for 2013.

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Group Performance

Lend Lease’s vision is to create the best places which supports its strategic direction ‘to be the leading international property and infrastructure group’. The Group is currently working towards the ‘Lead’ phase of its ‘Restore, Build, Lead’ strategy. There are clear Group priorities including delivery and execution of major projects, disciplined portfolio management, driving operational efficiencies and allocating capital to key growth platforms.

The Group generates earnings from four lines of business:

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Development of urban communities,
inner-city mixed-use developments, Project management, building,
apartments, retirement, retail, engineering and construction services
commercial and healthcare assets development Construction
Infrastructure Investment Property and infrastructure investment
Arranges, manages and invests in development Management and investment management, property
Public Private Partnerships (PPP) projects
management and asset management
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2013 Highlights

The Group has delivered against its key safety and sustainability objectives and has made progress on implementing its strategy during the year with the benefit of earnings from key achievements, which include:

• n Zero fatalities – our first fatality free year on record.

• n 80% of our operations around the world did not experience a Critical Incident this year (Critical Incidents are those where an actual severe injury, property or environment damage outcome has occurred or, an incident with the potential to have resulted in severe injury, property or environment damage outcomes due to EH&S control failures).

• n 90% of the major projects in our development pipeline have achieved or are targeting green certification.

• n Revenue of A$12.2 billion – 6% growth from 2012.

• n Statutory PAT of $551.6 million – growth of 10% from 2012.

• n Return on Equity of 13.4%.

Key highlights by business line include:

development

• n Estimated pipeline end value of A$37.4 billion (June 2012: A$37.2 billion).

• n Progress on Barangaroo South in Australia:

• Tenant pre-commitments of 71% for the commercial floor space in the first two towers (77% including current Memorandums of Understanding);

• Working with Crown Limited to reach an agreement to develop an international hotel; and,

• Planning approval for the first two residential towers.

• n Sale of the Group’s 25% interest in the Jem[®] retail asset in Singapore, which opened in June 2013.

• n Commencement of activity at Elephant & Castle in the UK:

• Planning approval for the £1.5 billion regeneration masterplan achieved; and,

• Launch of the first two residential buildings, One The Elephant and Trafalgar Place, with 61% pre-sales achieved.

• n Divestment of the Group’s interest in Greenwich Peninsula Regeneration Limited in the UK.

annual report 2013 Lend Lease 83

Construction

• n Securing new work of A$12.7 billion including Sunshine Coast University Hospital, New Bendigo Hospital and the Pacific Highway Nambucca Heads to Urunga upgrade in Australia; Kingsgate House in the UK; and 432 Park Avenue and Privatized Army Lodging (PAL) Group C in the US.

• n Successful completion of the construction of Jem[®] , a retail and office asset in Singapore.

• n Closing backlog revenue of A$16.2 billion (June 2012: A$15.1 billion). Backlog revenue increases to circa A$17.2 billion including Sydney International Convention, Exhibition and Entertainment Precinct which is at the preferred bidder stage.

Investment Management

• n Funds under management of A$15.0 billion (June 2012: A$12.3 billion).

• n Launch of Lend Lease International Towers Sydney Trust with funding for the first two commercial towers at Barangaroo South.

• n Launch of the Lend Lease Jem Partners Fund and subsequent purchase of the Group’s 25% interest in Jem[®] .

Infrastructure development

• n Financial close on three infrastructure development projects in Australia – Sunshine Coast University Hospital, Eastern Goldfields Regional Prison and New Bendigo Hospital.

• n Sale of a further two UK PPP assets to the UK Infrastructure Fund.

• n Financial close of the Privatized Army Lodging (PAL) Group C in the US.

Business performance has consistently improved

The table below outlines some key indicators of Group performance over the past five years for the year ended 30 June.

		2013	2012	2011	2010	2009
Statutory proft/(loss)after tax	A$m	552	501	493	346	(654)
Operating proft after tax	A$m	553	507	485	324	292
EPSS on statutory proft after tax1	Cents	101.7	92.7	91.7	72.9	(161.4)
Total dividends/distributions2	A$m	241.5	217.5	198.7	160.6	186.7
Increase/(decrease)in closing price³	A$	1.15	(1.77)	1.64	0.32	(2.54)
Annual Total Securityholder Return4	%	22	(16)	27	13	(20)
Return on Equity5	%	13.4	13.4	14.3	12.7	(26.1)

• 1 EPSS (Earnings per Stapled Security) is calculated using the weighted average number of securities on issue excluding treasury securities.

• 2 The June 2013 dividends/distributions of A$109.4 million were declared subsequent to the reporting date.

3 Represents the movement in the security price over the year calculated using the closing security price at 30 June.

• 4 Represents the movements in the Group’s security price, distribution yield and any return on capital over the financial year.

5 ROE is calculated as the annual statutory profit after tax divided by the arithmetic average of beginning, half year and year end securityholders’ equity.

Performance and STI Pool

Group PAT is one input into the overall determination of the STI pool. An assessment of overall profit, sustainability of earnings and other financial and non financial factors are also considered. Group PAT was at target during 2013. Following an overall assessment of performance, the Board approved an STI pool slightly below target for 2013.

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Ceo scorecard and Board assessment

STI outcomes are based on performance during the year, primarily measured through the use of scorecards. Scorecards for the CEO and Senior executives reflect short, medium and long term goals related to delivering financial returns, the reshaping of the portfolio, setting up the business for future growth, embedding operational excellence and investing in people. The 2013 scorecard is reflective of the Group’s move towards the ‘Lead’ phase of the Lend Lease’s ‘Restore, Build, Lead’ strategy.

The Board has assessed the CEO’s 2013 scorecard and made an overall judgement as to whether the scorecard results fully reflect performance and the management of risk. The result for each category set out below is a holistic assessment of the measures established at the start of the year and the effectiveness of the CEO in addressing unanticipated events.

Following the Board’s assessment, the CEO was allocated an STI award of A$2,850,000 for 2013 which was 88% of the CEO’s target STI award. Refer to the table Remuneration Awarded by the Board on page 90 to see the total remuneration awarded to the CEO for 2013.

	perForManCe Measures ‘What’ reason Chosen ‘WhY’	perForManCe Measures ‘What’ reason Chosen ‘WhY’	perForManCe assessMent ‘hoW’ resuLt	perForManCe assessMent ‘hoW’ resuLt
	Financialperformance – 50% weighting
pat (25%)	PAT.	Key fnancial metric for Lend Lease.	Financial target for PAT was achieved with PAT of A$551.6 million, in line with budget. PAT is 10% higher than 2012.	At target.
other Financial (25%)	Revenue Growth.	Multiple dimensions of fnancial performance recognise the importance of delivering returns to securityholders and securing future revenue. Encompasses overall fnancial performance for the year.	Revenue growth below target due to stretching targets combined with challengingexternal market conditions.	Stretch revenue below target. Other targets broadly achieved.
	Gross Proft Margin Percentage(GPM).		Gross Proft Margin Percentage 0.5% above target.
	Return On Equity (ROE).		ROE 13.4% – 2013 target achieved.
	Productivity (Overheads/GPM %).		Productivity marginally below target. Material improvement compared to 2012.
	Cash Flow.		Cash Flow greater than 150% of target for 2013 with operating cash fow increase greater than 300% from 2012 to 2013.
	Holistic assessment of overall fnancialperformance.		Has enabled continuous sustainable future earnings.
	non fnancialperformance – 50% weighting
strategic (15%)	Deliver strategic reinvestment of capital in growth platforms. Reshape portfolios.	The CEO is focused on strategic initiatives that deliver future growth, improved business performance and securityholder value.	On track to meet capital recycling targets. Key divestments including sales of the Jem®retail asset in Singapore, Greenwich Peninsula Regeneration Limited in the UK and the Aged Care business in Australia. Plans are in place to recycle this capital into growth platforms in 2014 including: new urban regeneration development projects, investment management opportunities and infrastructure development and construction opportunities. There are a number of major urban redevelopment projects underway including Barangaroo (with tenant pre-commitments of 71% to date on the frst two towers at Barangaroo South) and Elephant and Castle (61% pre-sales achieved on the frst two residential towers). New urban redevelopment opportunities have been secured including: Sydney International Convention, Exhibition and Entertainment Precinct, Waterbank and Batman’s Hill.	Targets achieved.

annual report 2013 Lend Lease 85

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||||||
|---|---|---|---|---|
|perForManCe Measures|reason Chosen|perForManCe assessMent|resuLt|
|‘What’|‘WhY’|‘hoW’|
|Financial performance – 50% weighting|
|Manage top talent identified|The CEO is required|Voluntary attrition of top talent well under 5% target|Above target.|
|in succession plans for key|to demonstrate and|at 2%.|
|leadership roles within the|role model effective|Development and succession plans in place for all|
|Group and achieve less than|leadership, and|leadership roles.|
|5% voluntary attrition.|actively manage|
|talent to underpin|
|Assess leadership standards|Increase in gender diversity (51% improvement in Senior|
|sustainable|
|and framework with particular|executive positions) and a continued focus on safety|
|performance.|
|focus on safety, diversity and|and sustainability.|
|sustainability behaviours for all|Lend Lease placed 6th best employer for Lesbian, Gay,|
|managers.|Bisexual and Transgender (LGBT) employees in Australia|
|in 2012.|
|Female representation among CEO direct reports|
|increased from 0% to 18%, one year ahead of target.|
|Drive a safety culture and|Zero fatalities and a significant reduction in critical|
|achieve key safety metrics.|incidents. Over 80% of our operations around the world|
|did not experience a critical incident this year. The critical|
|incident frequency rate target (a key lead indicator of|
|safety|performance) was achieved.|
|Drive 5% increase in employee|Increased employee engagement by at least 5% in 75%|
|engagement scores across|of engagement focus areas.|
|the areas of: Engagement,|
|Operating Internally, External|
|Focus and Employee|
|Development.|
|Directionally align the business|Portfolio management|Contribution from segments to PAT aligned to five year|Very aggressive|
|to the agreed portfolio|is a critical aspect|strategy approach across most major categories.|targets were|
|management targets.|of the CEO’s role,|The current end value of the development pipeline was|established with actual|
|as is overseeing key|A$37.4 billion and construction backlog revenue was|results being just|
|business initiatives.|A$17.2 billion|[1]|.|below these goals.|
|Continue to re-weight the portfolio to achieve portfolio|
|targets including Investment Management platform|
|growth – Funds under management now A$15.0 billion,|
|an increase of 22%.|
|Deliver predefined business|Majority of predefined business initiatives were|
|initiatives, including cost|completed or critical milestones were achieved during|
|reduction and efficiency,|the year, including the launch of the HR Services Centre.|
|and capital approvals and|Initiatives across the Group aim to reduce the number|
|accountability.|of support staff by automating processes, consolidating|
|support functions, standardising reporting and|
|rationalising our workforce are on track and will deliver|
|payback over three to four years.|

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1 Including Sydney International Convention, Exhibition and Entertainment Precinct which is at preferred bidder stage.

The CEO’s Contract

the Ceo’s Contract for 2013

The CEO’s contract applicable for 2013 does not have a fixed term, but his appointment as Managing Director is not to exceed five years from 4 March 2009 (unless there is a mutually agreed extension).

The contract provides for benefits including fixed remuneration, superannuation, vehicle lease, parking space and life insurance. STI and LTI plan participation is at the Board’s discretion.

The following terms apply:

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|||
|---|---|
|Notice by CEO|6 months|
|Notice by Lend Lease|12 months|
|Payment in lieu of notice|Where the CEO is not employed for the full period of notice, a payment in lieu of notice may be made. The|
|payment in lieu of notice includes pro rata fixed remuneration and the cash value of statutory entitlements and|
|benefits, and pro rata STI based on the level of performance achievement in the previous year.|
|Non-compete period|12 months|
|Non-solicitation period|12 months|
|Treatment of incentives|The CEO may receive a pro rata STI award for the latest financial year based on assessment of his|
|performance by the Board. LTIs will be treated according to ordinary award terms except that for the most|
|recent LTI award before termination, the pro rata period is increased by 12 months.|

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the Ceo’s Contract for 2014

The Board and the CEO have agreed to enter into a new employment contract with effect from 1 September 2013 with no fixed term.

The contract provides for fixed remuneration of A$2,034,000 which includes superannuation and the value of other benefits previously provided such as vehicle lease, parking space and life insurance. Taking into account the stated fringe benefits, this amount is unchanged from the fixed remuneration applicable in 2013. STI and LTI plan participation is at the Board’s discretion. The CEO’s target STI for 2014 has been reduced to A$1,750,000 and target LTI for 2014 increased to A$1,750,000 (with the number of awards determined on a ‘fair value’ basis). This results in a target 2014 remuneration package of A$5,534,000, a reduction of 11% from the current target package (with LTI awards valued in ‘fair value’ terms), with materially less weight on the STI component of the remuneration package.

The following terms have been changed under the new contract:

Payment in lieu of notice	From 2014, where the CEO is not employed for the full period of notice, a payment in lieu of notice may be made. The payment in lieu of notice includes pro rata fxed remuneration and the cash value of statutory entitlements and benefts. The previous contract included pro rata STI in the payment in lieu of notice, which would have resulted in a payment in lieu of notice signifcantly in excess of the amount required under the
	new contract.
Treatment of incentives on	From 2014, the CEO may continue to receive an STI award for the latest fnancial year based on assessment
cessation of employment	of his performance by the Board. LTI awards will be treated in accordance with the plan rules at that time.
	Deferred STI awards will remain on foot in certain mutuallyagreed termination circumstances.

Response to Concerns Raised in Relation to 2012 Remuneration Arrangements

The following table summarises the concerns raised by securityholders in their comments on the 2012 Remuneration Report at the 2012 AGM, as well as the Board’s response. The table also addresses the major concerns expressed in discussions with stakeholders.

Concern	2012 arrangement	Board response
Quantum of Total	The CEO’s TPV during 2012 was A$1,900,000. In addition, benefts such as a	The CEO’s actual 2013 remuneration was A$6,279,000 (with LTI allocated on a face value basis).
Remuneration for the CEO	vehicle lease, parking space and life insurance were provided.	The Board reviewed the CEO remuneration with input from PricewaterhouseCoopers (PwC) as the remuneration adviser to the Board.
	The CEO’s target STI award was A$3,237,000.	In determining the remuneration for the CEO, the Board considers the scope, scale and complexity of the role.
	The CEO’s target remuneration for 2012 was A$6,569,000 and the actual total remuneration awarded by the Board including LTI was A$7,702,000. LTI was allocated based on the 20 day volume weighted security price before grant.	The Board also considers peer relativities. However, fnding appropriate peers for comparison in the Australian market remains challenging. Lend Lease is one of the only Australian companies that operates in the property and infrastructure sectors on such a signifcant global scale. There is no single entity in the Australian market that has a comparable business model that could be considered a true peer. This makes it diffcult to draw strict peer comparisons on
		remuneration among Australian companies.
		As part of the Board’s planned review of the CEO’s contract, and in response to
		stakeholder feedback, the Board has decided that from 2014, the CEO’s total
		target remuneration will be reduced.
		For 2014 fxed remuneration will remain unchanged at A$2,034,000. The CEO’s
		target STI opportunity will be A$1,750,000 and target LTI opportunity will also be
		A$1,750,000 (with the number of LTI awards calculated with reference to the ‘fair
		value’ of an award). This represents an 11% decrease on the target remuneration
		package from 2012.
Quantum of	As noted above, the CEO's target STI	Lend Lease rewards above market median for high performance in accordance
STI Award	award was A$3,237,000. However, because	with the Group’s Executive Reward Strategy guidelines.
for the CEO	of ‘above target’ Group and individual performance, the CEO was awarded a 2012 STI allocation of A$4,370,000.	Despite strong Group performance this year and higher profts, the CEO’s 2013 STI award of A$2,850,000 is lower than in 2012. See CEO scorecard on page 84.
		The Board has also changed the way in which the STI is delivered to the CEO in
		2013, with higher amounts of deferral over a longer time frame. Only A$800,000
		of the 2013 STI award is delivered in cash, less than half of the cash portion of
		the 2012 STI award.
		For 2014, the CEO’s target STI opportunity will be reduced both in terms
		of quantum and also as a proportion of the overall remuneration mix.
		2014 target STI will reduce to A$1,750,000, a decrease of almost 46% from
		2013. As a consequence, the potential cash portion of the STI award is signifcantlyreduced.
Group CEO & Senior	The CEO’s target remuneration package included 31% as fxed remuneration, 49%	The CEO’s 2013 target STI and LTI awards were agreed in August 2012. Therefore, as a temporary measure for 2013 until the CEO’s package could be
Executive	as STI and 20% as LTI (or 16% as LTI	amended, the Board made an interim adjustment to the pay mix for the CEO by
Pay Mix	on a fair value basis).	increasing STI deferrals as described above. For 2013, 72% of the CEO’s STI
		award is deferred.

annual report 2013 Lend Lease 87

Concern 2012 arrangement	Board response
Group CEO Target LTI for Senior executives was 15-20%	Beginning in 2014, pay mix has been reviewed and a greater proportion of the
& Senior of their target pay mix, although in some	remuneration package for the CEO and Senior executives will be delivered as
Executive Pay cases, LTI was actually between 10-15% of	LTI. LTI will be 31% of the CEO’s 2014 target remuneration package. For Senior
Mix continued their remuneration awarded.	executives we are progressively moving towards a minimum of 20% LTI, with
Changes were made in 2012 to increase the focus on long term performance with the introduction of mandatory securityholdings and malusprovisions for deferred STI.	around 13-15% LTI as part of the target remuneration mix for 2014.
Group CEO & Senior The STI award was delivered as a mix of cash and deferred securities. A signifcant portion	As an interim measure for 2013, the STI deferral for the CEO has increased to three years with the frst A$800,000 of the CEO’s STI award delivered in cash
Executive STI (50%) was delivered as deferred securities.	and the balance in deferred securities vesting in equal proportions in years one,
Deferral 50% of the deferred securities (i.e. 25% of the	two and three from the year of grant.
total award) vested one year after grant and	Beginning in 2014, there will be additional deferrals for any ‘above target’ STI
the remaining 50% vested after two years.	awards for all Senior executives. Any ‘above target’ awards will be delivered 33%
	in cash and the balance of 67% will be delivered in deferred securities vesting in
	equal proportions in years one and two from the year of grant. At target in 2014,
	75% of any performance based awards for the CEO would be deferred (STI and
	LTI). In contrast, at target in 2012, 61% would have been deferred.
Use of a LTI awards were subject to a single	A second hurdle will be added to LTI awards issued from September 2013.
Single LTI Performance Measure performance hurdle – relative TSR. Relative TSR was selected as the performance measure to link LTI awards to	Return on Equity (ROE) was selected as the second performance measure given that many Lend Lease activities are capital intensive, for example, major urban redevelopment projects. The Board wants to incentivise Senior executives
the delivery of superior (i.e. above median) securityholder returns relative to the S&P/ASX	to manage an appropriate portfolio of projects for the long term, with timely execution of capital recycling. This should balance proft contribution with
100 companies over the performance period.	appropriate returns on securityholders’ equity, within the parameters of the
This method was chosen after consultation	Board risk management framework. The introduction of this hurdle now provides
with securityholders.	dual performance measures with one hurdle being a market based hurdle and
	the other being an internal measure.
	The ROE target will sit alongside the existing relative TSR target (see page98for
	further details).
	Vesting will commence once ROE reaches 11% with 25% of the awards vesting,
	with full vesting once ROE reaches 15%.
	The lower threshold for vesting of 11% was set after considering the Group’s
	cost of equity and the ROE of ASX 100 companies in recent years. The Board
	considers that if the 11% threshold is exceeded on average over a three or four
	year period, then it is appropriate that some proportion of the LTI awards should
	vest. The upper threshold for vesting of 15% was set after considering the
	Group’s stated ROE target and 10 year historic ROE. The Board considers that if
	the ROE target is reached on average over the three or four year period, then all
	of the LTI awards should vest.
	By having the measure as the average over three and four years, the impact on
	vesting of exceptional events affecting one year’s ROE is reduced.
	The 15% target would not have been met if tested during the previous 10 years
	on either a three year or four year average basis. If achieved, it would mean that the Group would signifcantly outperform the median of ASX 100 companies in
	recent years.
	The dual hurdles are intended to motivate our Senior executives to achieve
	Lend Lease’s long term strategic goals as we move towards the ‘Lead’ phase
	of our strategy.
Ability to Stop In the 2012 Remuneration Report, details	There are strengthened malus provisions for both deferred STI awards and
Vesting of were included of new malus provisions to	LTI awards made from 1 July 2013.
Awards apply to future awards of deferred STI and LTI.	For deferred STI awards malus may be applied where there is a material misstatement in the Group’s or any Group subsidiary’s fnancial statements,
For deferred STI and LTI awards allocated	or where there is a misstatement which is required to be disclosed to ASX or
after 1 July 2012, the Board may adjust	a regulator. Malus may also be applied where there is misconduct which has
the number of awards downwards prior	a serious impact on the Group.
to the date of vesting in the case of a material misstatement of the Group’s fnancial accounts.	See section 3d on page 97 for details of the malus provisions which will apply to deferred STI awards. Broader malus provisions will apply to the LTI awards than the deferred STI
	awards. This is because the Board views LTI awards as a reward for future
	performance while deferred STI awards relate to the executive’s performance in
	a prior period. Malus may be applied on LTI awards where vesting would result in the Senior executive receiving an inappropriate or unwarranted beneft. See
	section 3d onpage 99 for further details.

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Concern	2012 arrangement	Board response
Termination	The termination arrangements for the CEO	The Board and the CEO have agreed to enter into a new employment contract
Arrangements	formed part of his contract when he was	with effect from 1 September 2013.
for the CEO	employed in the role of CEO Investment Management in 2005. Under the CEO’s contract, where the	From 1 September 2013, where the CEO is not employed for the full period of notice, a payment in lieu of notice may be made which includes pro rata fxed remuneration and the cash value of statutory entitlements and benefts. STI will
	CEO is not employed for the full period	not form part of any payment in lieu of notice.
	of notice, a payment in lieu of notice may be made. The payment in lieu of notice includes pro rata fxed remuneration and the cash value of statutory entitlements and benefts, and pro rata STI based on	From 1 September 2013, the CEO may receive a pro rata STI award for the latest fnancial year based on assessment of his performance by the Board. LTI awards will be treated in accordance with the plan rules at that time. Deferred STI awards will remain on foot in certain mutually agreed termination circumstances.
	the level of performance achievement in the
	previous year.
	The CEO may receive a pro rata STI award for the latest fnancial year based on assessment
	of his performance by the Board. LTIs will be
	treated according to ordinary award terms
	except that for the most recent LTI award
	before termination, the pro rata period is
	increased by12 months.

b. remuneration disclosures

This year, we have shown three presentations of remuneration for our Senior executives to separate remuneration decisions made by the Board in relation to current year performance and remuneration outcomes for prior year performance. The presentations include statutory requirements and are also reflective of the guidelines from the Corporations and Markets Advisory Committee (CAMAC).

1. Statutory – Remuneration of the CEO and Senior Executives for the Years Ended 30 June 2013 and 2012

2. The table outlines remuneration prepared in accordance with Australian Accounting Standards. It includes fixed remuneration and the cash portion of 2013 STI awarded, as well as the current year amortisation of both current and historic STI and LTI grants.

3. Awarded – Remuneration Awarded by the Board for the year ended 30 June 2013

4. The table is presented as it illustrates the amounts the Board awarded in relation to performance in this financial year. Some of these entitlements are ‘at risk’ and deferred until future financial years and subject to future performance.

Five of the current seven Senior executives have been appointed to their roles in the last two years and their remuneration packages reflect their increasing experience and contribution to Group performance. This reflects the Board’s policy to consider each executive’s experience and time in role in positioning their remuneration package.

1. Actual Received – Actual Remuneration Received in 2013

The table outlines the actual remuneration received by the CEO and by Senior executives during the performance year. This includes both current year remuneration paid and amounts awarded in prior years (2009, 2010 and 2011) which vested in this financial year. There is also a reconciliation between the CEO’s actual remuneration received in 2013 and the statutory remuneration disclosure.

Included in the Appendix is a table which provides a comparison of the information included in each of the three remuneration presentations.

annual report 2013 Lend Lease 89

Remuneration of the CEO and Senior Executives for the Years Ended 2013 and 2012 (Statutory Disclosures)

A$000s Year	short terM BeneFIts	post- eMpLoYMent BeneFIts
Executive Director Stephen McCann7 2013
	1,877 581 186 34 984 1,957 29 5,648
2012	1,869 2,185 249 35 703 1,961 27 7,029
Senior Executives Tarun Gupta8 2013
	565 298 1 67 131 317 9 1,388
Simon Hipperson9 2013	543 211 126 40 920
Daniel Labbad10 2013	984 527 106 87 224 508 14 2,450
2012	855 534 300 83 138 358 2,268
Rod Leaver 2013	1,102 469 403 201 538 2,713
2012	1,142 560 396 4 132 365 2,599
AnthonyLombardo11 2013	898 491 67 19 205 483 14 2,177
2012	844 527 58 18 151 383 13 1,994
Robert McNamara 2013	915 483 50 332 734 2,514
2012	826 293 20 7 344 546 2,036
David Saxelby12 2013	386 308 27 19 28 6 774
Former Executives Mark Menhinnitt13 2013
	649 110 10 75 161 283 10 1,298
2012	906 495 102 159 342 13 2,017
Craigvan der Laan de Vries14 2013	496 18 8 (15) 507
2012	101 6 9 15 1 132

• 1 Cash salary includes the payment of cash allowances such as motor vehicle and housing allowance and holiday pay on termination from an employing entity.

• 2 This includes the reduction in 2012 cash STI as a result of the Abigroup investigation that was announced at the 2012 AGM.

• 3 Non monetary benefits include car parking, relocation and expatriate benefits (such as house rental, health insurance, shipping of goods and tax return preparation), motor vehicle costs and annual leave.

• 4 Superannuation for defined benefit members in Australia (Tarun Gupta, Mark Menhinnitt) reflects the cost of contributions based on the actuarial long term contribution rate applied to the notional salary in respect of the executive. Superannuation includes the value of life insurance premiums.

• 5 Fair value expense of LTI awards that are equity settled.

• 6 Other long term benefits represent the accrual of statutory employee entitlements i.e. long service leave.

• 7 2012 STI equity settled includes the amortisation amount of A$515,783 of the retention award made in August 2007 to Stephen McCann.

• 8 Tarun Gupta commenced with Lend Lease in 1994 and became KMP from 24 October 2012 when he assumed the role of CEO Property, Australia. The information in the above table reflects remuneration for the period from 24 October 2012 to 30 June 2013.

• 9 Simon Hipperson commenced employment as KMP from 1 October 2012. The information in the above table reflects remuneration for the period from 1 October 2012 to 30 June 2013.

• 10 Daniel Labbad cash salary for 2013 includes A$68,286 of accrued annual leave paid on termination from the UK employing entity.

• 11 Anthony Lombardo cash salary for 2013 includes a full year of remuneration since being promoted to the role of Group Chief Financial Officer in December 2011 which results in an additional $40,000 cash salary compared to 2012. The remaining increase in cash salary from 2012 relates to the 3.3% increase in TPV from 1 September 2012.

• 12 David Saxelby commenced with Lend Lease in 2012 and assumed the role CEO Construction & Infrastructure, Australia on 18 February 2013. David is therefore KMP from 18 February 2013. The information in the above table reflects remuneration for the period from 18 February 2013 to 30 June 2013. Included within STI cash is an expense in relation to an award made upon joining Lend Lease which is subject to future service and performance. The 2013 expense has been prorated from the date of becoming KMP.

• 13 Mark Menhinnitt ceased his role as Australian Regional CEO on 17 February 2013 and is therefore no longer KMP effective 18 February 2013. Disclosures represent part year remuneration from 1 July 2012 to 17 February 2013 while he was KMP.

• 14 Craig van der Laan de Vries ceased employment with Lend Lease on 31 December 2012 and ceased to be KMP effective 31 December 2012. Disclosures represent part year remuneration from 1 July 2012 to 31 December 2012 while he was KMP. In addition to the remuneration in the above table he was paid a termination payment of A$402,083 in relation to contractual entitlements. No termination benefits were paid to any other KMP.

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Remuneration Awarded by the Board for the Year Ended 30 June 2013

The remuneration awarded by the Board to the CEO and Senior executives in relation to performance in this financial year ended 30 June 2013 is set out in the table below.

The total STI awarded (cash and deferred securities) reflects the result of the assessment of Group and individual performance from 1 July 2012 to 30 June 2013. The table also shows the STI outcome for each Senior executive as a percentage of both target and maximum STI opportunity.

Deferred securities issued as part of the overall STI award may crystallise after a further one and two years, or in the case of the CEO, one, two and three years. The value of deferred securities will depend on the price of Lend Lease securities at the date of vesting.

The amount actually received as a result of these awards will not be known until September 2016 when the testing of the LTI performance hurdle is completed, the vesting of STI deferred awards is completed and the value of Lend Lease securities is known.

$a000s	shor	t terM	‘at rIsK’ – deFerred to Futu	re perIods	totaL potentIaL reMuneratIon stI opportunItY
Name	Fixed remuner -ation4	STI cash5	STI deferred securities to vest in	2013 LTI awards (conditional on future performance)6	(Actual value is dependent upon future service and future performance) % of target STI paid % of maximum STI paid
			Sept 2014 Sept 2015 Sept 2016
Stephen McCann	2,034	800	683 683 684	1,395	6,279 88 59
Tarun Gupta1	930	435	217 218	302	2,102 104 69
Simon Hipperson2	705	211	106 106	245	1,373 80 53
Daniel Labbad	975	527	263 263	327	2,355 120 80
Rod Leaver	1,420	469	234 234	349	2,706 100 67
AnthonyLombardo	930	544	272 272	312	2,330 130 87
Robert McNamara	859	483	242 242	283	2,109 125 83
David Saxelby3	1,100	445	223 223		1,991 90 60

1 Tarun Gupta was KMP with effect from 24 October 2012. The amounts in the table above reflect his total remuneration and have not been prorated for his time as KMP.

2 Simon Hipperson commenced employment and was KMP with effect from 1 October 2012. The amounts in the table above reflect his total remuneration from 1 October 2012 to 30 June 2013 with the exception of fixed remuneration which is a full year amount.

3 David Saxelby was KMP with effect from 18 February 2013. The amounts in the table above reflect his total remuneration and have not been prorated for his time as KMP. 4 Fixed remuneration includes the contractually awarded amount of Total Package Value (including the value of car and car parking benefits provided in addition to TPV)/Base Salary (including any expatriate benefits) from 1 September 2012 (or later if there was any increase during the year).

5 STI cash award to be paid in September 2013.

6 LTI awards were granted on 1 September 2012 and the face value of the awards at grant is shown.

annual report 2013 Lend Lease 91

Actual Remuneration Received in 2013

The table below outlines the actual remuneration received by the CEO and by Senior executives during the performance year. It is divided into two parts – 2013 Current Year Remuneration and Prior Year Remuneration. 2013 Current Year Remuneration represents fixed remuneration as well as the cash portion of the 2013 STI due to be paid in September 2013. Prior Year Remuneration represents deferred remuneration that was awarded in prior years that was paid or vested this year.

Actual remuneration received is different from:

• n The remuneration awarded by the Board in relation to 2013 performance. This is set out on page 90 in the table Remuneration Awarded by the Board for the Year Ended 30 June 2013; and,

n The statutory remuneration disclosures presented on page 89 which are prepared in accordance with the relevant accounting standards.

n The statutory remuneration disclosures prese	nted on page 89 which are prep	ared in accordance with the relevant accounting s	tandards.
a$000s	2013 Current Year reMuneratIon	prIor Year reMuneratIon
Name1	Fixed remuneration5 2013 STI cash6	STI Deferred securities7 2010 LTI8 2009 LTI9	Total
Stephen McCann	2,054 800	1,001 903 0	4,758
Tarun Gupta2	934 435	240 106 0	1,715
Simon Hipperson3	618 211	– – –	829
Daniel Labbad	1,108 527	248 198 0	2,081
Rod Leaver	1,420 469	253 – –	2,142
AnthonyLombardo	928 544	265 169 0	1,906
Robert McNamara	935 483	217 314 –	1,949
David Saxelby4	1,100 445	– – –	1,545

• 1 Mark Menhinnitt and Craig van der Laan de Vries who ceased as KMP during the year are excluded.

2 Tarun Gupta commenced as KMP from 24 October 2012. The information in the above table reflects remuneration for the period from 1 July 2012 to 30 June 2013.

3 Simon Hipperson commenced employment and as KMP from 1 October 2012. The information in the above table reflects remuneration for the period from 1 October 2012 to 30 June 2013.

4 David Saxelby commenced as KMP from 18 February 2013. The information in the above table reflects remuneration for the period from 1 July 2012 to 30 June 2013.

5 Fixed remuneration includes salary, non monetary benefits (excluding accrued annual leave expense) and superannuation as disclosed in the statutory remuneration table. 6 2013 STI cash refers to 50% of the STI award for 2013 that will be paid to the executive in cash in September 2013 (or A$800,000 in the case of the CEO). The remaining STI award is deferred into securities.

7 STI deferred securities refers to amounts deferred in September 2011 that vested in September 2012. This is calculated as the value of the award at the date of vesting.

• 8 2010 LTI is the value of LTI which vested during the year, based on the security price at the vesting date.

9 No proportion of the 2009 LTI vested during the year, as the TSR hurdle was not met.

Reconciliation of 2013 Actual Remuneration Received with Statutory Remuneration for the CEO

The following table shows the difference between the CEO’s actual remuneration received as above and the statutory remuneration disclosure on page 89.

Description	A$000s	Vesting year1
2013 Total Actual Remuneration Received	4,758
Less 2010 LTI vesting	(903)	2013
Less 2011 deferred securities vesting	(1,001)	2013
Less 2012 STI reduction	(219)	2013
Accrued annual leave and longservice leave expense	72
2011 & 2012 STI Award – deferred securities component	1,957	2014 and 2015
LTI awards – Accountingexpense:
n 2008/2009 LTI – TSR and EPS components	14	2013
n 2009/2010 LTI – TSR and EPS components	221	2013 and 2014
n 2010/2011 LTI – TSR	258	2014 and 2015
n 2011/2012 LTI – TSR	263	2015 and 2016
n 2012/2013 LTI – TSR	228	2016 and 2017
total remuneration(statutory disclosures)	5,648

1 Based on the financial year ending 30 June of the relevant year.

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c. our reward strategy and Framework

our executive reward strategy, which consists of a framework and policy that governs how the key senior employees in the organisation are remunerated, supports the achievement of Lend Lease’s strategy

Our Executive Reward Strategy considers the interests of both internal and external stakeholders and aims to drive strong individual and team performance. The reward strategy is implemented through four guiding principles: Simplicity, Responsiveness, Balance, and Governance and Risk Management. There is a focus on aligning rewards and sustainable performance. Accordingly, the strategy requires that a significant portion of an individual’s remuneration be ‘at risk’, and be tied to clear metrics.

The following diagram provides an overview and linkages between Lend Lease’s strategy, the Executive Reward Strategy, Reward Guiding Principles and Remuneration Components.

==> picture [506 x 217] intentionally omitted <==

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

Lead
n World Class Property
Solutions Company
BuILd n Strong Integrated
n Reshape Portfolio Offering
n Grow Platforms n Trusted Investment
restore n Operational Excellence Manager
n Right Structure n Invest in People
n Cost Out
n
Drive Efficiency
n Capital Management
our eXeCutIVe reWard strateGY
----- End of picture text -----

Underpinning a remuneration framework which attracts and retains the calibre of executives needed to deliver on the strategy, and aligning rewards with a focus on sustainable performance

our reWards GuIdInG prInCIpLes

==> picture [506 x 223] intentionally omitted <==

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

|||||||||
|---|---|---|---|---|---|---|---|
|Simplicity|Responsiveness|Balance|Governance and risk management|
|n|Simple, transparent and|n|Consider and, as|n|A significant portion of|n|Clear governance and risk|
|easy to communicate|appropriate, respond to|remuneration is at risk, but can|management practices minimise|
|the interests of internal|be earned through achieving|potential conflicts of interest and|
|and external stakeholders|outstanding short and long|enable effective decision making|
|term performance|by the Board and management|
|+|
|our reMuneratIon CoMponents|
|Fixed remuneration|Short term incentive|Long term incentive|
|n|Set with reference to the|n|Focused on both financial and non financial measures linked to|n|Delivered as equity to align with|
|median and the 75th|measures at Group and business unit level, and reflect short,|securityholder interests|
|percentile of the market (based|medium and long term goals|n|50% tested at three years,|
|on role and geography)|n|Assessment of individual’s alignment to Lend Lease’s leadership|50% tested at four years, with|
|n|Reflects internal relativities,|capabilities (including safety, sustainability and diversity) and|no retesting to reflect longer|
|individual’s experience|desired behaviours has a significant impact on reward|term performance|
|and performance|n|Significant deferral into equity to provide longer term alignment|n|No value delivered unless|
|to securityholders and exposure to long term risk|returns exceed market median|

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

annual report 2013 Lend Lease 93

Setting Remuneration Levels

We benchmark our remuneration mix and levels to ensure we provide market-competitive total rewards for on-target performance, and total rewards above the market median if outstanding performance is achieved

Remuneration is reviewed annually by the P&O Committee with reference to Group and regional performance, an individual’s role, responsibilities, experience and performance as well as comparative market data. Remuneration is also reviewed for new appointments to the Leadership team and if there is a change in role.

In gathering information on market remuneration levels we use a number of sources which include:

• n data provided by our remuneration adviser, PwC, about remuneration delivered to similar type roles in companies of a similar size. — for Australian-based executives, we refer to companies listed on ASX that are ranked between 26 and 75 by market capitalisation (excluding companies domiciled overseas and property trusts where management is not typically employed by the trust). Consideration is also given to factors such as revenue.

• for executives in roles with global responsibilities, we have also referred to a peer group of 17 companies listed on ASX that are ranked in the first 75 by market capitalisation and have significant global operations (to reflect the complexity involved in running a group of companies such as Lend Lease with a global footprint).

  • The companies that make up this peer group are BHP Billiton, Rio Tinto, Woodside Petroleum, Westfield Group, CSL, QBE Insurance Group, AMP, Brambles, Leighton, Orica, Coca Cola Amatil, Amcor, WorleyParsons, Qantas Airways, Sonic Healthcare, Toll Holdings and Boral. This peer group itself is few in number and Lend Lease is one of the smallest in terms of relative size. As a result, the Board has decided to discontinue the use of this peer group from 1 July 2013. The P&O Committee will reflect the global complexity of some of the senior roles by the way in which these roles are positioned relative to the market.

• n relevant local comparator groups for executives based in other countries;

• n publicly available data for comparable roles at other peer organisations (including Leighton, Mirvac and Stockland); and,

• n published remuneration surveys from Mercer, Aon Hewitt, Avdiev, FIRG and others.

There is an emphasis on where we source talent from and where we lose talent to.

The P&O Committee has also identified a number of principles in relation to interpreting peer remuneration for considering individual roles relative to market benchmarks. These principles include:

• n Understanding individual roles based on organisation size and complexity;

• n Understanding job size and complexity;

• n Recognising an individual’s tenure, position and performance;

• n Differentiating risk profiles between roles when reviewing pay mix; and,

• n Considering internal relativities.

All of these items are considerations in positioning Senior executive remuneration packages relative to the market.

Fixed remuneration is set with reference to the market median and 75th percentile. The positioning will depend upon the specific nature of the role, the individual’s performance and the overall remuneration mix. The remuneration outcomes for each Senior executive will also take into consideration the target remuneration mix under the Executive Reward Strategy.

Remuneration Mix

the remuneration mix has been specifically designed to align to the execution of Lend Lease’s business strategy

The remuneration framework consists of three different components – fixed remuneration, short term incentives and long term incentives. The relative weighting of each component is referred to as the ‘remuneration mix’.

The Executive Reward Strategy provides for a target remuneration mix which links remuneration outcomes to the execution of business strategy over the short (one year), medium (two to three years) and long (three to four years) term. The target remuneration mix provided in the Executive Reward Strategy for 2013 is shown below.

over the short (one year), medium (two to three Reward Strategy for 2013 is shown below.	years) and long (three to four years) term. The target remuneration mix provided in the Executive
	perCentaGe oF totaL tarGet reMuneratIon
	Fixed remuneration (annual) STI cash STI deferred securities (vesting one and two years from grant)1 LTI2 (vesting three and four years from grant)
GroupCEO	30% – 35% 20% – 25% 20% – 25% 20% – 30%
Senior executives	40% – 45% 20% – 25% 20% – 25% 15% – 20%

1 Or one, two and three years in the case of the CEO for 2013.

2 LTI is granted on the basis of the 20 day volume weighted security price prior to grant date.

In the future, LTI will form approximately 33% of the target remuneration mix for the CEO and a minimum of 20% for Senior executives. Changes will commence in 2014 and will be phased in for some Senior executives.

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Motivating performance

The actual remuneration mix varies primarily as a function of how much STI is actually awarded to an executive based on performance.

The increased weighting on STI when performance and outcomes are above target reflects the Board’s objective of motivating executives to execute the business strategy.

The remuneration mix is structured so that a substantial portion of remuneration is delivered as Lend Lease securities. This ensures that the interests of executives are aligned with securityholders. In the case of the CEO in 2013, more than half of his remuneration is delivered as Lend Lease securities over a period of up to four years post grant.

Ceo remuneration Mix

The charts below illustrate the percentage of total remuneration that is made up of fixed remuneration, STI (both cash and deferred) and LTI for actual 2012 and actual 2013 outcomes and at target for the CEO in 2014.

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CEO Actual 2012 CEO Actual 2013 CEO Target 2014
Fixed Remuneration
12% STI Cash
16%
28% STI Deferred
35% 31%
37% LTI (in fair value terms)
30%
35%
16%
30% 14% 16%
$7.3 million $5.8 million $5.5 million
----- End of picture text -----

encouraging a longer term focus

The mix of executive reward is designed to be aligned with the Group’s medium and long term financial performance as shown below.

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Year 1 Year 2 Year 3 Year 4 Year 5 & onWards
Fixed remuneration The CEO and Senior executives must maintain
a holding of Lend Lease securities until the
Cash STI mandatory holding requirement is achieved
Deferred STI for 1 year
Deferred STI for 2 years
Deferred STI for 3 years (CEO Only for 2013)
LTI 3 year performance period
LTI 4 year performance period
----- End of picture text -----

50% of vested securities will be subject to a disposal restriction unless the executive has already met their mandatory holding requirements – as outlined below.

Mandatory Securityholding

The mandatory holding requirement encourages the CEO and Senior executives to take a long term perspective when making decisions and further enhances alignment with securityholders.

From the 2013 financial year, the CEO and other Senior executives must maintain a mandatory holding of Lend Lease securities. Under this guideline, executives are required to accumulate and maintain a holding of Lend Lease securities that is calculated with reference to fixed remuneration. In the case of:

• n The CEO – the requirement is 150% of TPV.

• n Senior executives – the requirement is 100% of TPV or 100% of base salary for Senior executives outside of Australia.

These calculated amounts are then converted into a target number of securities.

annual report 2013 Lend Lease 95

The mandatory holdings will be accumulated as grants of deferred securities and LTI made from September 2012 begin to vest. To meet this requirement 50% of these vested securities will be subject to a disposal restriction unless the executive has met the mandatory holding requirement. Personally held securities may be counted towards the requirement. It is expected that all executives should achieve the mandatory holding requirement within six years.

Unvested deferred securities and unvested LTI awards do not count toward this mandatory holding.

The mandatory holding for each Senior executive is outlined below.

	Total number of	Number of securities
	securities held by the	required under
	Senior executive as at	the mandatory
Executive	30 June 2013	securityholding
Stephen McCann	447,404	390,000
Tarun Gupta	18,878	115,000
Simon Hipperson	–	80,000
Daniel Labbad	55,565	110,000
Rod Leaver	87,743	125,000
AnthonyLombardo	106,560	105,000
Robert McNamara	46,564	95,000
David Saxelby	–	125,000

How Risk Management is Incorporated

The Board has placed a significant focus on incorporating risk management into the reward framework.

Remuneration component	How risk management is incorporated into the remuneration component	How risk management is incorporated into the remuneration component
STI	n	The total value of STI awards is directly linked to Proft After Tax (‘PAT’) and there are limits on the total incentive pool and
		individual STI payments.
	n	In determining the total incentive pool amount, the Board also considers the overall fnancial health of Lend Lease and the
		sustainability of earnings.
	n	STI outcomes are based on performance and are determined based on a scorecard of fnancial and non fnancial KPIs.
		These KPIs are structured as ‘building blocks’ to achieve Lend Lease’s short, medium and long term strategic and
		business goals.
	n	STI outcomes are modifed based upon an assessment of the executive against Lend Lease’s defned leadership
		capabilities (including safety, sustainability and diversity), values and behaviours. In this way, the STI rewards ‘what’ is
		achieved as well as ‘how’ it is achieved.
	n	A signifcant portion (at least 50%) of the actual STI award is retained and deferred into securities. In this way, executives
		continue to be incentivised to drive performance and are exposed to movements in the Lend Lease security price.
	n	In 2012, the Board introduced a malus provision. This has been enhanced for 2013 and enables the Board to adjust
		downwards the number of deferred securities that vest to an individual in certain circumstances. This provision operates
		alongside existing provisions in the deferred securities terms that allow the Board to adjust unvested awards on termination of
		employment. In particular:
		— if an employee is terminated for fraud or other serious misconduct, unvested deferred securities will lapse; and,
		— where an employee is terminated for poor performance, the Board can adjust the number of unvested deferred
		securities at the time of termination.
LTI	n	50% of the LTI is assessed over a three year period and 50% is assessed over a four year period without retesting.
	n	As performance for 2013 awards is assessed based on relative TSR (and for 2014 on a combination of relative TSR and
		ROE), any adverse fnancial, reputational or other events that could occur over the vesting period should be refected in the
		number and value of LTI performance securities that ultimately vest.
	n	Malus provisions apply to unvested LTI awards from 1 July 2012, with broader discretions applying for awards issued
		from July2013.
Mandatory	n	From 2013, the Board has implemented a mandatory holding of Lend Lease securities that requires the CEO and Senior
securityholding		executives to accumulate and maintain a holding of Lend Lease securities. This will encourage the CEO and Senior
		executives to take a longtermperspective when makingdecisions and strengthens alignment with securityholders.

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d. how rewards are Linked to performance

Short Term Incentives (STI)

stI KpIs are structured as ‘building blocks’ to achieve Lend Lease’s short, medium and long term strategic and business goals

STI design characteristic How the STI works	STI design characteristic How the STI works
stI funding
STI pool n	The pool of funds available to reward executives under the STI plan is determined by direct reference to
	Group fnancial performance and, where relevant, regional fnancial performance.
n	Pool funding levels are set by the Board and correspond to threshold, target and stretch levels of PAT
	achievement. In determining the pool of funds available, the Board also considers the overall fnancial health
	of Lend Lease and the sustainability of earnings.
n	Typically, if proft performance is above target, suffcient funds will be available to pay average awards above
	target. Payments to individual executives are capped at 150% of their target STI.
n	Conversely, if PAT performance is below target, average STI awards will be below target. The CEO and
	Senior executives’ awards will be determined based on their overall performance rating and contribution,
	relative to other executives.
stI allocations
Target STI opportunity n	STI is based on ‘target opportunities’ which are set using the remuneration mix outlined on page 93 and are
	tested against the relevant market levels for each executive role.
n	The minimum possible STI outcome is zero and the maximum possible STI outcome is 150% of the CEO
	and Senior executive’s target STI opportunity. For a Senior executive to earn their maximum STI, outstanding
	individual performance must be coupled with above target fnancial performance by the Group and/or
	relevant region.
n	The CEO and Senior executives receive notifcation of a target STI opportunityannually.
STI key performance n	STI outcomes are based on performance during the fnancial year, primarily measured through the use of the
indicators	CEO and Senior executive scorecards.
n	The CEO and Senior executive scorecards consist of measures relating to fnancial performance, people,
	strategy formulation and execution, and management and operational excellence. These KPIs are structured
	as ‘building blocks’ to achieve Lend Lease’s short, medium and long term strategic and business goals.
	The 2013 and 2014 KPIs have been aligned to the move towards the ‘Lead’ phase of the Group’s strategy.
	The CEO 2013 scorecard (as approved by the Board) and performance against the scorecard is set out in
	summary on page 84. Senior executives are subject to a similar scorecard refecting Group or regional goals
	as appropriate.
n	Financial measures focus on PAT, fnancial performance, cash fow and capital management. Non fnancial
	measures include achievement of strategic and operational excellence objectives as well as the successful
	implementation of safety and people leadership goals.
n	In order to enhance the performance evaluation process, for 2014 and beyond, there will be explicit
	goals established to achieve an outperformance reward on the non fnancial metrics where possible.
	Outperformance goals are already established for the fnancial metrics.
n	The P&O Committee also assesses each Senior executive against Lend Lease’s defned leadership
	capabilities (including safety, sustainability and diversity), values and behaviours. In this way, the STI rewards
	‘what’ is achieved as well as ‘how’ it is achieved.
Delivery n	The actual STI award is delivered as a mix of cash and deferred securities. The signifcant portion (at least
	50%) delivered as deferred securities encourages executives to deliver sustainable performance.
n	As an interim measure in response to the ‘against’ vote for the 2012 Remuneration Report at the 2012 AGM,
	for 2013 for the CEO:
	— The frst A$800,000 of the actual STI is paid in cash in September following the performance year.
	— The balance of the actual STI is deferred into Lend Lease securities. The deferred securities vest in three
	equal instalments one, two and three years after grant.
n	For 2013 for Senior executives:
	— 50% of the actual STI is paid as cash in September following the performance year.
	— 50% of the actual STI is deferred into Lend Lease securities. 50% of the deferred portion (i.e. 25% of the
	total award)vests oneyear aftergrant and the remaining50% vests after twoyears.

annual report 2013 Lend Lease 97

STI design characteristic How the STI works	STI design characteristic How the STI works
stI delivery and conditions
Distributions on deferred n	Distributions on deferred securities are received by executives during the vesting period, subject to the
securities	executive continuingin employment.
Malus n	For deferred securities allocated after 1 July 2012, the Board may reduce the number of deferred securities
	that may vest in the case of a material misstatement of the Group’s fnancial accounts.
n	For securities allocated after 1 July 2013, enhanced malus provisions apply.
	The Board has the discretion to forfeit part or all of any unvested deferred STI awards prior to their vesting
	where it transpires that the award(s) would provide a participant with a beneft that was unwarranted,
	or inappropriate.
	It is anticipated that this will only be exercised in exceptional circumstances, including where the Board,
	acting reasonably, determines that:
	— There has been a material misstatement in the Group’s consolidated fnancial statements or those of any
	company in the Group including any misstatement which may be required to be disclosed to ASX or any
	relevant regulator or other authority; or
	— The participant has engaged in misconduct, or other dereliction of duty (whether or not that misconduct
	or dereliction of duty would warrant summary dismissal) which the Board reasonably considers either
	has had, or may have, a serious impact for the Group or the relevant Group entity, whether fnancial,
	reputational, operational or otherwise.
	The Board will be entitled to consider whether it is appropriate to exercise this discretion in respect of awards
	for all participants in a particular plan, in a region, in a business, in a team or for specifed participants only.
	In considering the best interests of the Group, the Board would be required to take into account relevant
	information including:
	— the individual’s level of responsibility, accountability and infuence for the incident or event;
	— the quantum of any actual loss or damage;
	— whether the Group’s directions, policies or practices have been breached;
	— whether any known information at the time of the action or inaction was deliberately withheld; and,
	— any other circumstances the Board considers relevant to an assessment of the participant’s conduct and
	the seriousness of its impact for the Group.
	The Board may also consider retaining the discretion to delay vesting of any unvested deferred STI in the
	event it is reviewing whether to exercise such a discretion to reduce or forfeit unvested awards.
	The CEO may exercise discretion under this policy in lieu of the Board for participants who are not part of the
	GroupLeadershipTeam(GLT). Where such discretion is exercised bythe CEO, the CEO will notifythe Board.
Termination n	Malus provisions work alongside the existing provisions in the deferred securities terms that allow the Board
	to adjust unvested awards on termination of employment. In particular:
	— if an employee is terminated for fraud or other serious misconduct, unvested deferred securities
	will lapse; and,
	— where an employee is terminated for poor performance, the Board can adjust the number of unvested
	deferred securities at the time of termination.
n	Deferred securities are forfeited by the individual if they resign or are terminated for cause during the
	vesting period.
Mandatory securityholding n	From the 2013, mandatory securityholdings for the CEO and other Senior executives will be accumulated as
	grants of deferred securities awarded from September 2012 begin to vest.
Hedging n	Deferred securities are subject to the securities trading policy which prohibits executives from entering into
	anytype of ‘protection arrangements’(includinghedging, derivatives and warrants).

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Long Term Incentives (LTI)

LtI is designed to motivate our senior executives to achieve Lend Lease’s long term strategic goals that will enhance value for securityholders

The key features of the 2011 plan (granted 1 September 2010), the 2012 plan (granted 1 September 2011) and the 2013 plan (granted 1 September 2012) are the same. Changes are being made to the 2014 plan (granted 1 September 2013) with the introduction of a second performance hurdle.

The key features of the 2011 plan (granted 1 September 2010), the 2012 plan (granted 1 September 2011) and the 2013 plan (granted 1 September 2012) are the same. Changes are being made to the 2014 plan (granted 1 September 2013) with the introduction of a second performance hurdle.	The key features of the 2011 plan (granted 1 September 2010), the 2012 plan (granted 1 September 2011) and the 2013 plan (granted 1 September 2012) are the same. Changes are being made to the 2014 plan (granted 1 September 2013) with the introduction of a second performance hurdle.
LTI design characteristic How the LTI works
Performance securities n n n	An annual grant of ‘performance securities’ is made to a limited number of executives. The Board intends that the awards be settled in Lend Lease securities; although the award may be settled in cash or other means at the Board’s discretion. On vesting, each performance security entitles executives to one Lend Lease security, or at the Board’s discretion, cash or other instruments of equivalent value.
Performance hurdle n n n n n	For performance securities granted 1 September 2012 (the 2013 plan), the performance hurdle is Lend Lease’s total securityholder return (TSR) compared to the companies in the S&P/ASX 100 Index. The S&P/ASX 100 companies are determined at the start of the performance period. The vesting schedule is: Relative TSR percentile ranking Percentage of performance securities that vest if the relative TSR hurdle is met
	Below the 50thpercentile No vesting
	At the 50thpercentile 50% vesting
	Above the 50th percentile but below the 75thpercentile Pro rata vesting on a straight line basis between 50% and 100%
	At the 75thpercentile orgreater 100% vesting
	Relative TSR was selected as the performance measure to link LTI awards to the delivery of superior (i.e. above median) securityholder returns relative to the S&P/ASX 100 companies over the performance period. This method was chosen after consultation with securityholders. For grants made from 1 September 2013, a second performance hurdle is being introduced – Return on Equity (ROE). 50% of the awards will be tested under the TSR hurdle and 50% under the ROE hurdle.
Performance period n n n	50% of the performance securities are assessed over a three year period. If the hurdle is not fully achieved at this time, those performance securities that have not vested will lapse. The remaining 50% of the performance securities are assessed after four years. There is no opportunity to retest any portion of the LTI grant. If the performance hurdle is not met, the awards are forfeited.
Distributions n n	Distributions are not paid on unvested performance securities. In calculating the value of the awards which vest, the value of any distributions made during the vesting period is taken into consideration.

annual report 2013 Lend Lease 99

LTI design characteristic How the LTI works	LTI design characteristic How the LTI works
Malus n	For performance securities allocated after 1 July 2012, the Board may adjust the number of performance
	securities downwards prior to the date of vesting in the case of a material misstatement of the Group’s
	fnancial accounts.
n	For performance securities allocated after 1 July 2013. The Board may adjust the number of LTI awards
	downwards where the Board reasonably determines that delivery of part or all of any LTI award would result
	in the Senior executive receiving an inappropriate or unwarranted beneft (having regard to their personal
	performance, theperformance of the Groupand all other benefts theyhave received).
Termination of employment n	For ‘good leavers’, the LTI grant may be prorated upon termination of employment and remain ‘on-foot’
	subject to the original performance hurdle.
n	In exceptional circumstances (such as death or total and permanent disability), the Board may exercise its
	discretion and pay the award at the time of termination of employment.
n	If the executive resigns or is terminated for cause, the unvested LTI is forfeited.
n	If the executive is terminated for poor performance, the Board can adjust unvested LTI prior to
	the vestingdate.
Mandatory n	Mandatory securityholdings for the CEO and Senior executives will be accumulated when LTI awards granted
securityholding	from September 2012 begin to vest.
Hedging n	Unvested LTI grants will also be forfeited if an executive enters into a prohibited pre vesting hedging
	arrangement in relation to their LTI awards.

Details of LTI plans used in prior years are set out in section 3h on page 104.

LtI performance

The final tranche of the 2009 LTI award (granted 1 September 2008) was tested during the year. No further portion of the 2009 LTI allocation vested during the 2013 year.

The first tranche of the 2010 LTI award (granted 1 September 2009) was also tested during the year (being 50% of the total 2010 LTI award). The first tranche of the 2010 LTI allocation (due to vest in September 2012) vested as follows:

• n 100% of securities relating to the Earnings per Security (EPS) hurdle vested (resulting in 25% of the total 2010 LTI award vesting); and,

• n 50% of the securities relating to the relative TSR hurdle vested (resulting in 12.5% of the total 2010 LTI award vesting and 12.5% being forfeited).

The remaining 50% of the 2010 LTI award will be tested in September 2013.

The charts below outline the total hurdle achievement for the 2009 and 2010 LTI awards as at 30 June 2013.

Retention hurdle – vested TSR hurdle – vested EPS hurdle – vested EPS hurdle – forfeited TSR hurdle – forfeited EPS hurdle – untested TSR hurdle – untested

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2009 LTI Award 2010 LTI Award
Retention EPS Hurdle
Hurdle 33.3%
33.3%
25% 25%
33.3% 33.3% Untested Untested
Vested Forfeited
Relative
EPS Hurdle
TSR Hurdle
50%
12.5% 50%
25% Vested
Vested
33.4%
Forfeited Vested 12.5%
1.3% Forfeited
Relative TSR Hurdle 1.3%
----- End of picture text -----

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e. executive Contracts

executive contracts specify remuneration components, benefits and notice provisions

Senior Executives’ Contracts

Senior executives are typically employed on contracts that have no fixed term. Benefits may include health/life insurance, car allowances, motor vehicle leases and salary.

Termination

Senior executives who commenced employment during 2013 have termination benefits that comply with the limits set by the Corporations Act that do not require securityholder approval. One existing employment contract for a former executive provides for a payment in lieu of notice that is greater than 12 months of fixed pay. This contract was put in place before the changes to the Corporations Act limits for termination benefits without securityholder approval. The contract complied with the relevant limits at the time it was entered into.

Termination clauses are specified in each contract describing treatment on termination based on the reason for termination (e.g. resignation, with notice, due to illness, or immediate termination for cause).

The Group may make payment in lieu of notice.

	Notice by	Notice by
Senior executives	Lend Lease	Senior executive	Treatment on termination with notice by Lend Lease
Current executives
Tarun Gupta	6 months	6 months	Notice payment is based on Total Package Value.
			Payment for accrued leave is based on Total Package
			Value less superannuation.
Simon Hipperson	6 months	6 months	Notice payment and accrued leave is based on
			base salary.
Daniel Labbad	9 months	6 months	Notice payment is based on Total Package Value.
			Payment for accrued leave is based on Total Package
			Value less superannuation.
Rod Leaver	6 months	6 months	Notice payment and accrued leave is based on
			base salary.
Anthony Lombardo	12 months	6 months	Notice payment is based on Total Package Value.
			Payment for accrued leave is based on Total Package
			Value less superannuation.
Robert McNamara	3 months	3 months	Notice payment is based on base salary and other minimum benefts as required by applicable
			US legislation.
David Saxelby	6 months	6 months	Notice payment is based on Total Package Value.
			Payment for accrued leave is based on Total Package
			Value less superannuation.
Former executives
Mark Menhinnitt	12 months	6 months	Notice payment is based on Total Package Value plus
(ceased as KMP 17 February 2013)			projected STI (if eligible in that year) of 60% of the target
			cash opportunity.
Craig van der Laan de Vries	6 months	6 months	Notice payment is based on Total Package Value.
(ceased as an employee and as			Payment for accrued leave is based on Total Package
KMP 31 December 2012)			Value less superannuation.

annual report 2013 Lend Lease 101

f. remuneration Governance

at Lend Lease, we believe that robust governance is a critical part of a rigorous approach to executive remuneration

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Board
The Board has overall responsibility for executive remuneration at Lend Lease. ConsuLtatIon WIth
seCurItYhoLders and
The Board assesses the performance of, and determines the STI outcome for, the CEO. other staKehoLders
personneL and orGanIsatIon (p&o) CoMMIttee
The P&O Committee assists the Board in determining executive remuneration at
Lend Lease. In making recommendations to the Board, the P&O Committee has
unrestricted access to senior management and company records and obtains Independent
independent advice from outside experts. reMuneratIon
adVIser (pwC)
The P&O Committee approves the assessment of performance against
KPIs and the final STI outcomes for Senior executives (after considering the
recommendations of the CEO).
The P&O Committee consists only of independent Non Executive directors: n The Board has appointed
n P M Colebatch – Chairman PwC as its independent
n J S Hemstritch – Member remuneration adviser.
n J A Hill – Member (until 15 November 2012) n Further information on PwC’s
role and the processes that
n D J Ryan – Member were followed to ensure PwC’s
The P&O Committee met 16 times in 2013. advice to the P&O Committee
was made free from undue
In addition the Risk Management and Audit Committee provides expertise in ensuring that influence by the KMP is
Lend Lease’s remuneration arrangements appropriately incorporate risk within the context of
provided on page 102.
Lend Lease’s broader risk management framework.
ManaGeMent
Management makes recommendations to the P&O Committee in relation to developing
and implementing the executive remuneration strategy and structure. The CEO
also provides his recommendations on pay and STI performance outcomes for his
direct reports.
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Role of PwC

Role of PwC
The role of PwC during 2013	PwC’s advice was made free from undue infuence by any of the KMP
During the year, PwC did not provide a remuneration recommendation	Although a remuneration recommendation was not provided, consistent
as defned in section 9B of the Corporations Act 2001 on the	with good governance, the following arrangements were made to ensure
executive remuneration strategy and remuneration policies for key	that PwC’s advice was free of undue infuence:
management personnel.	n	PwC was engaged by, and reported directly to, the Chair of
PwC did provide advice on aspects of the remuneration of		the P&O Committee
the KMP including:	n	the agreement for the provision of remuneration consulting
n market practice on executive remuneration structure		services was executed by the Chair of the P&O Committee on
n commentary on positioning of the CEO and Senior executives’		behalf of the Board
remuneration against the market	n	the reports containing remuneration advice or market data were
n market data on Non Executive director fees		provided by PwC directly to the Chair of the P&O Committee
n commentary on Senior executive remuneration structure proposals	n	PwC was permitted, where approved by the P&O Committee Chair, to
n assisting Lend Lease consider queries from external stakeholders		speak to management to understand company processes, practices and other business issues and obtain management’s perspectives
	n	PwC have declared that they have not been unduly infuenced by the
		KMP in carrying out their duties for the P&O Committee
	As	a consequence, the Board is satisfed that advice and market
	data provided by PwC was made free from undue infuence from
	anyof the KMP.

Securities Trading Policy

The Lend Lease securities trading policy applies to all employees of the Lend Lease Group. In accordance with the policy, directors and executives may only deal in Lend Lease securities during designated periods. Directors and executives must not enter into transactions or arrangements that operate to limit the economic risk of unvested entitlements to Lend Lease securities. No director or executive may enter into a margin loan arrangement in respect of Lend Lease securities.

g. non executive directors’ Fees

Non Executive directors receive a Board fee and fees for chairing or participating on Board committees. The chairman does not receive extra fees for participating in or chairing committees.

The maximum aggregate remuneration payable to Non Executive directors is A$3.0 million per year, as approved at the 2011 annual general meeting.

Board and Committee Fees

Board and Committee Fees
				Risk
			Personnel &	Management
		Nomination	Organisation	& Audit	Sustainability
	Board	Committee	Committee	Committee	Committee
Chair fee A$	640,000	36,000	36,000	44,000	36,000
Member fee A$	160,000	Nil	20,000	36,000	20,000

The Board and committee fees are set taking into consideration market data provided from the Board’s independent remuneration adviser. The Board has determined that the complexity of Lend Lease’s global business and the breadth of skills required to enable the directors to adequately represent securityholder interests, means that the market comparators may include ASX 75 companies.

As a global company, all directors are required to travel to Board meetings at Lend Lease locations around the world and it is important that the Board is not limited to only Australian-based directors. Due to the significant additional time commitment fees are paid to compensate directors for the time spent travelling to overseas meetings.

annual report 2013 Lend Lease 103

	Fee (each way)
	A$
Travel less than 4 hours	Nil
Travel between 4 and 10 hours	2,800
Travel over 10 hours	6,000

Board and committee fees are paid as cash. Non Executive directors are no longer entitled to retirement benefits. However, some directors have retirement benefits or securities accrued previously.

Two Non Executive directors appointed before 1 January 2001 have also accrued benefits under the previous Retirement Benefit Plan:

• n Gordon Edington: A$174,240 (30 June 2012: A$168,960); and,

• n Peter Goldmark: A$166,560 (30 June 2012: A$167,840).

Remuneration of Non Executive Directors for the Years Ended 2013 and 2012

A$000s	Year	short terM	post eMpLoYMent BeneFIts	Total
		Base fees Committee chairman fees Committee membership fees Travel fees Other benefts1	Super- annuation2
D A Crawford	2013	640 30 21	16	707
	2012	640 24 1	16	681
C B Carter	2013	160 18 10 30 25	16	259
	2012	40 12	4	56
P M Colebatch	2013	160 36 36 72 14	16	334
	2012	160 36 36 24	16	272
G G Edington	2013	160 18 46 96 30	16	366
	2012	160 56 59 13	16	304
P C Goldmark	2013	160 24 20 83	16	303
	2012	160 36 20 48 30	16	310
J S Hemstritch	2013	160 20 24	16	220
	2012	133 17 24	14	188
J A Hill3	2013	67 15 8 12 12	10	124
	2012	160 36 20 35	16	267
D J Ryan	2013	160 44 20 35	16	275
	2012	160 44 20 24 2	16	266
M J Ullmer	2013	160 18 46 29 21	16	290
	2012	93 33 12	10	148

• 1 Other benefits include professional fees and reimbursements of the cost of travel, accommodation and subsistence.

2 Directors have superannuation contributions paid on their behalf in accordance with superannuation legislation.

• 3 J A Hill retired 15 November 2012.

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h. executive remuneration in detail

Deferred Securities Awards

In 2013 deferred securities were granted to the CEO and Senior executives based on the value of the 2012 STI award that was deferred (being 50% of the 2012 STI award). Half of the deferred securities awarded will vest after one year and half after two years subject to the CEO and Senior executives continuing in employment to the date of vesting. Deferred securities are held in a trust during the vesting period.

Details of deferred securities awards are set out in the following table:

Name1	Plan STI award perfor- mance year Grant date Vesting date Number granted Fair value per deferred security2 A$ Total fair value at grant date3 ,4 A$ Expense for the year ended 30 June 2013 A$ % Vested % Forfeited
Stephen McCann	Deferred STI 2011 1/09/2011 1/09/2012 118,275 8.15 963,500 0 100 –
	Deferred STI 2011 1/09/2011 1/09/2013 118,275 8.15 963,500 481,750 – –
	Deferred STI 2012 1/09/2012 1/09/2013 120,382 8.17 983,250 983,250 – –
	Deferred STI 2012 1/09/2012 1/09/2014 120,382 8.17 983,250 491,625 – –
	477,314 3,893,500 1,956,625
Tarun Gupta	Deferred STI 2011 1/09/2011 1/09/2012 28,387 8.15 231,250 0 100 –
	Deferred STI 2011 1/09/2011 1/09/2013 28,387 8.15 231,250 115,625 – –
	Deferred STI 2012 1/09/2012 1/09/2013 28,328 8.11 229,840 229,840 – –
	Deferred STI 2012 1/09/2012 1/09/2014 28,328 8.11 229,840 114,920 – –
	113,430 922,180 460,385
Daniel Labbad	Deferred STI 2011 1/09/2011 1/09/2012 29,262 8.15 238,377 0 100 –
	Deferred STI 2011 1/09/2011 1/09/2013 29,262 8.15 238,377 119,189 – –
	Deferred STI 2012 1/09/2012 1/09/2013 31,933 8.11 259,100 259,100 – –
	Deferred STI 2012 1/09/2012 1/09/2014 31,933 8.11 259,100 129,550 – –
	122,390 994,954 507,839
Rod Leaver	Deferred STI 2011 1/09/2011 1/09/2012 29,865 8.15 243,289 0 100 –
	Deferred STI 2011 1/09/2011 1/09/2013 29,865 8.15 243,289 121,645 – –
	Deferred STI 2012 1/09/2012 1/09/2013 34,248 8.11 277,884 277,884 – –
	Deferred STI 2012 1/09/2012 1/09/2014 34,248 8.11 277,884 138,942 – –
	128,226 1,042,346 538,471

Footnotes follow on page 105.

annual report 2013 Lend Lease 105

Name1	Plan STI award perfor- mance year Grant date Vesting date Number granted Fair value per deferred security2 A$ Total fair value at grant date3 ,4 A$ Expense for the year ended 30 June 2013 A$ % Vested % Forfeited
Anthony Lombardo	Deferred STI 2011 1/09/2011 1/09/2012 31,303 8.15 255,000 0 100 –
	Deferred STI 2011 1/09/2011 1/09/2013 31,303 8.15 255,000 127,500 – –
	Deferred STI 2012 1/09/2012 1/09/2013 29,201 8.11 236,925 236,925 – –
	Deferred STI 2012 1/09/2012 1/09/2014 29,201 8.11 236,925 118,463 – –
	121,008 983,850 482,888
Robert McNamara	Deferred STI 2011 1/09/2011 1/09/2012 25,679 8.15 209,189 0 100 –
	Deferred STI 2011 1/09/2011 1/09/2013 25,679 8.15 209,189 104,594 – –
	Other Incentive5 2011 1/09/2011 1/09/2013 34,219 8.15 278,758 139,379 – –
	Other Incentive5 2011 1/09/2011 1/09/2014 34,219 8.15 278,758 92,919 – –
	Deferred STI 2012 1/09/2012 1/09/2013 17,850 8.11 144,830 144,830 – –
	Deferred STI 2012 1/09/2012 1/09/2014 17,850 8.11 144,830 72,415 – –
	Other Incentive5 2012 1/09/2012 1/09/2014 31,784 8.11 258,922 107,884 – –
	Other Incentive5 2012 1/09/2012 1/09/2015 31,784 8.11 258,922 71,923 – –
	219,064 1,783,398 733,944
David Saxelby	Deferred STI 2012 1/09/2012 1/09/2013 6,355 8.11 51,563 51,563 – –
	Deferred STI 2012 1/09/2012 1/09/2014 6,355 8.11 51,563 25,782 – –
	12,710 103,126 77,345
Former Senior Executive Mark Menhinnitt	Deferred STI 2011 1/09/2011 1/09/2012 27,988 8.15 228,000 0 100 –
	Deferred STI 2011 1/09/2011 1/09/2013 27,988 8.15 228,000 114,000 – –
	Deferred STI 2012 1/09/2012 1/09/2013 27,454 8.11 222,750 222,750 – –
	Deferred STI 2012 1/09/2012 1/09/2014 27,454 8.11 222,750 111,375 – –
	110,884 901,500 448,125

• 1 Craig van der Laan de Vries ceased as KMP on 31 December 2012 and has not received an award of deferred securities.

2 The fair value for deferred securities issued on 1 September 2011 is the volume weighted average price of Lend Lease securities traded on ASX over the 10 trading days prior to the grant date. All grant prices have been rounded to two decimal places.

• 3 The fair value at grant date is the value of the deferred STI award as advised to the executive.

4 At vesting, the minimum value is nil and the estimate of the maximum value is the fair value multiplied by the number of securities granted.

5 Robert McNamara, CEO Americas, participated in an additional incentive plan that operated for 2011 and 2012 only, related to the performance of the Americas. The plan was created in order to support the significant turnaround required in the Americas business.

106 annual report 2013 Lend Lease

3. reMuneratIon report CONTINUED

dIreCtors’ report

Prior Year LTI Awards

how LtI was allocated in previous Years

In previous years, the CEO and some Senior executives participated in earlier LTI plans, some of which are still in place.

	2009 LTI Plan	2010 LTI Plan	2010 LTI Plan	2010 LTI Plan
Award type	1/3 retention, 1/3 relative TSR and 1/3 EPS	1/2 EPS and 1/2 relative TSR
Grant date	1 September 2008	1 September 2009
First vesting date	1 September 2011. If the grant does not fully vest at 1 September 2011, the unvested relative TSR portion of performance securities may be tested at 1 March 2012 and 3 September 2012. Any unvested EPS portion of performance securities maybe tested at September 2012.	1 September 2012 (50%) 1 September 2013 (50%) No further testing.
Relative TSR targets	The relative TSR peer group consists of S&P/ASX 100 Index companies. The vesting schedule for relative TSR is the same as for the 2013 LTI Plan,(seepage 98).	The relative TSR peer group consists of S&P/ASX 100 Index companies. The vesting schedule for relative TSR is the same as for the 2013 LTI Plan,(seepage 98).
Relative TSR performance period	Performance is tested three years from the date of grant and subsequently a further six months and then four years from the date of grant if required. If any part of the performance hurdle is achieved at the relevant testing dates, the corresponding payout will be delivered following the vesting date if employment conditions are satisfed.	Half the grant is tested at three years and the remaining half at four years. Any part of the grant that is tested and does not meet the performance hurdle will lapse. There is no opportunity to retest.
EPS Targets	EPS is calculated as follows: statutory proft/(loss) after tax adjusted for unrealised carrying value adjustments (but not excluding unrealised adjustments on the value of inventory held for sale); write-off of goodwill; movements in the value of investment properties; and savings implementation costs and one-off benefts from the UK pension plan; divided by the weighted average number of ordinary securities (excluding treasury securities). EPS-tested performance securities will vest subject to performance against compound annual growth rate targets set by the Board. The EPS annual growth target set by the Board for 2012 was 5%. eps (as deFIned For LtI purposes) Target Actual EPS for 30 June 08 base N/A 87.8c EPS for 30 June 09 – %growth fromprioryear 80.9c (7.9%) 30.0c (65.8%) EPS for 30 June 10 – % growth from prior year – twoyear compound annualgrowth rate 90.7c 12.1% 2.0% 68.3c 127.7% (12.0%) EPS for 30 June 11 –% growth from prior year – threeyear compound annualgrowth rate 101.7c 12.1% 5.0% 90.3c 32.2% 0.9% EPS for 30 June 12 – % growth from prior year – fouryear compound annualgrowth rate 106.7c 5.0% 5.0% 93.8c 3.9% 1.7%	EPS is based on Statutory EPS, defned as the statutory proft/(loss) after tax, attributable to members of Lend Lease Corporation Limited, divided by the weighted average number of ordinary securities (excluding treasury securities). EPS-tested performance securities will vest subject to performance against targets set by the Board. The Board set both a minimum and a stretch aggregate EPS target, and a fnal year EPS target for the three year and four year performance periods.
		Aggregate EPS target The aggregate target was set at the start of the performance period, and actual performance is measured by the sum of three year and four year EPS performance compared to the aggregate EPS target.
		Final year EPS target This is calculated by dividing the aggregate EPS target over the relevant performance period by the number of years in the performance period (i.e. three or four years) (known as the ‘qualifyingcondition’).
	EPS for 30 June 08 base
	EPS for 30 June 09 – %growth fromprioryear
	EPS for 30 June 10 – % growth from prior year – twoyear compound annualgrowth rate
		Outcome for 1 July 2009 to 30 June 2012
			tarGet	aCtuaL
	EPS for 30 June 11 –% growth from prior year – threeyear compound annualgrowth rate		Minimum Stretch Final Year	Total Final Year
		Aggregate EPS(cents)	199.0 218.9 66.3	257.3 92.7
	EPS for 30 June 12 – % growth from prior year – fouryear compound annualgrowth rate

annual report 2013 Lend Lease 107

	2009 LTI Plan	2010 LTI Plan
EPS performance period and vesting	For vesting to occur, Lend Lease’s compound EPS growth rate over the test period must be equal to the compounded annual target rate over that period. The vesting schedule for EPS is as follows: Compound EPS growth Payout (% of award to vest) Less than the compound of target rates 0% Equal to the compound of target rates 50% Greater than the compound of target rates but less than 20% more than the compound of target rates Proportion of EPS grant vesting increases in a straight line between 50% and 100% At least 20% more than the compound of target rates 100%	For vesting to occur, Lend Lease’s actual aggregate EPS must be equal to or greater than the aggregate EPS target. Vesting is, however, subject to a qualifying condition. Vesting will only occur where Lend Lease’s actual EPS in year three (or four) of the performance period is equal to or greater than the respective fnal year EPS target. Subject to meeting the fnal year EPS target at year three or year four, the table below shows how vesting will occur based on Lend Lease’s actual EPS performance at the vesting dates. EPS performance levels Percentage of EPS-tested performance securities that will vest
		Less than minimum aggregate EPS target 0%
		Equal to minimum aggregate EPS target 50%
		Greater than minimum aggregate EPS target, less than stretch target Prorated vesting (on a straight line basis) between 50% and 100%
		At or above stretch aggregate EPS target 100%
		Participants were advised of the EPS targets at the time the LTI grant was made in September 2009. The Board has committed to disclosing the EPS target retrospectively following the end of the relevant performance period (30 June 2013). In setting the minimum and stretch aggregate EPS targets, the Board has taken into account the forecast business plan performance as well as market expectations to determine robust but achievable performance targets for the 50% and 100% vestingthresholds of the EPS component of the LTI.
Termination and forfeiture	The retention component is forfeited if the individual is not in employment at the frst vesting date (including ‘good leaver’ reasons). For ‘good leavers’, the individual may, subject to Board discretion and in specifed circumstances, receive a pro rata award for performance securities tested against relative TSR and EPS performance at the time of termination. Where an executive is terminated for cause or resigns, unvested LTI is forfeited. Unvested LTI grants will be forfeited if an executive enters into a prohibited pre vesting hedging arrangement in relation to their LTI awards.	For ‘good leavers’, a pro rata award may be paid after termination and be subject to the original performance conditions, unless there are exceptional circumstances (e.g. death or total and permanent disability) where the Board may determine and pay the award at the time of termination. If an executive is terminated for cause or resigns, unvested LTI is forfeited. Unvested LTI grants will be forfeited if an executive enters into a prohibited pre vesting hedging arrangement in relation to their LTI awards.

108 annual report 2013 Lend Lease

3. reMuneratIon report CONTINUED

dIreCtors’ report

Outstanding LTI Awards (Equity Based Payments)

Name	Plan (for the year ended) Grant date Vesting date1 Number granted Fair value per equity instrument2 A$ Total fair value at grant date3 ,4 A$ Expense for the year ended 30 June 2013 A$ % Vested % Forfeited
CEO Stephen McCann	June 2009 LTI – A3 Sept 2008 Aug2012 120,235 6.35 763,566 14,254 – 2
	June 2010 LTI(50%) 5 Sept 2009 Aug2012 124,535 6.08 757,173 38,813 75 25
	June 2010 LTI(50%) 5 Sept 2009 Aug2013 124,535 6.31 785,816 182,444 – –
	June 2011 LTI(50%) 6 Sept 2010 Sept 2013 87,680 4.92 431,386 143,796 – –
	June 2011 LTI(50%) 6 Sept 2010 Sept 2014 87,680 5.20 455,936 113,985 – –
	June 2012 LTI(50%) 6 Sept 2011 Sept 2014 78,515 5.62 441,254 147,084 – –
	June 2012 LTI(50%) 6 Sept 2011 Sept 2015 78,515 5.90 463,238 115,809 – –
	June 2013 LTI(50%) 6 Sept 2012 Sept 2015 85,964 5.38 462,489 128,469 – –
	June 2013 LTI(50%) 6 Sept 2012 Sept 2016 85,965 5.53 475,384 99,038 – –
total	983,692
Current Senior Executives Tarun Gupta	June 2009 LTI – A3 Sept 2008 Aug2012 18,949 6.35 120,328 2,246 – 2
	June 2010 LTI(50%)6 Sept 2009 Aug2012 14,594 6.08 88,732 4,548 75 25
	June 2010 LTI(50%)5 Sept 2009 Aug2013 14,594 6.31 92,088 21,380 – –
	June 2011 LTI(50%)6 Sept 2010 Sept 2013 18,489 4.92 90,966 30,322 – –
	June 2011 LTI(50%)6 Sept 2010 Sept 2014 18,489 5.20 96,143 24,036 – –
	June 2012 LTI(50%)6 Sept 2011 Sept 2014 16,468 5.62 92,550 30,850 – –
	June 2012 LTI(50%)6 Sept 2011 Sept 2015 16,468 5.90 97,161 24,290 – –
	June 2013 LTI(50%)6 Sept 2012 Sept 2015 18,596 5.38 100,046 27,791 – –
	June 2013 LTI(50%)6 Sept 2012 Sept 2016 18,596 5.53 102,836 21,424 – –
total	186,887
Simon Hipperson	June 2013 LTI(50%)6 Sept 2012 Sept 2015 15,092 5.38 81,198 22,555 – –
	June 2013 LTI(50%)6 Sept 2012 Sept 2016 15,093 5.53 83,462 17,388 – –
total	39,943

Footnotes follow on page 110.

annual report 2013 Lend Lease 109

outstanding LtI awards (equity Based payments) continued

Name	Plan (for the year ended) Grant date Vesting date1 Number granted Fair value per equity instrument2 A$ Total fair value at grant date3 ,4 A$ Expense for the year ended 30 June 2013 A$ % Vested % Forfeited
Daniel Labbad	June 2009 LTI – A3 Sept 2008 Aug2012 38,324 6.35 243,357 4,543 – 2
	June 2010 LTI(50%)5 Sept 2009 Aug2012 27,339 6.08 166,221 8,521 75 25
	June 2010 LTI(50%)5 Sept 2009 Aug2013 27,339 6.31 172,509 40,052 – –
	June 2011 LTI(50%)5 Sept 2010 Sept 2013 19,200 4.92 94,464 31,488 – –
	June 2011 LTI(50%)6 Sept 2010 Sept 2014 19,200 5.20 99,840 24,960 – –
	June 2012 LTI(50%)6 Sept 2011 Sept 2014 18,119 5.62 101,829 33,943 – –
	June 2012 LTI(50%)6 Sept 2011 Sept 2015 18,119 5.90 106,902 26,726 – –
	June 2013 LTI(50%)6 Sept 2012 Sept 2015 20,146 5.38 108,383 30,106 – –
	June 2013 LTI(50%)6 Sept 2012 Sept 2016 20,146 5.53 111,405 23,209 – –
total	223,548
Rod Leaver7	June 2011 LTI(50%)6 Sept 2010 Sept 2013 24,889 4.92 122,454 40,818 – –
	June 2011 LTI(50%)6 Sept 2010 Sept 2014 24,889 5.20 129,423 32,356 – –
	June 2012 LTI(50%)6 Sept 2011 Sept 2014 21,245 5.62 119,397 39,799 – –
	June 2012 LTI(50%)6 Sept 2011 Sept 2015 21,245 5.90 125,346 31,336 – –
	June 2013 LTI(50%)6 Sept 2012 Sept 2015 21,502 5.38 115,681 32,134 – –
	June 2013 LTI(50%)6 Sept 2012 Sept 2016 21,502 5.53 118,906 24,772 – –
total	201,215
Anthony Lombardo	June 2009 LTI – A3 Sept 2008 Aug2012 18,045 6.35 114,598 2,139 – 2
	June 2010 LTI(50%)5 Sept 2009 Aug2012 23,351 6.08 141,974 7,278 75 25
	June 2010 LTI(50%)5 Sept 2009 Aug2013 23,351 6.31 147,345 34,209 – –
	June 2011 LTI(50%)6 Sept 2010 Sept 2013 18,489 4.92 90,966 30,322 – –
	June 2011 LTI(50%)6 Sept 2010 Sept 2014 18,489 5.20 96,143 24,036 – –
	June 2012 LTI(50%)6 Sept 2011 Sept 2014 16,808 5.62 94,458 31,486 – –
	June 2012 LTI(50%)6 Sept 2011 Sept 2015 16,807 5.90 99,164 24,791 – –
	June 2013 LTI(50%)6 Sept 2012 Sept 2015 19,216 5.38 103,379 28,716 – –
	June 2013 LTI(50%)6 Sept 2012 Sept 2016 19,216 5.53 106,262 22,138 – –
total	205,115

Footnotes follow on page 110.

110 annual report 2013 Lend Lease

3. reMuneratIon report CONTINUED

dIreCtors’ report

Name	Plan (for the year ended) Grant date Vesting date1 Number granted Fair value per equity instrument2 A$ Total fair value at grant date3 ,4 A$ Expense for the year ended 30 June 2013 A$ % Vested % Forfeited
Robert McNamara	June 2010 LTI(50%)5 Sept 2009 Aug2012 43,285 6.08 263,173 13,490 75 25
	June 2010 LTI(50%)5 Sept 2009 Aug2013 43,285 6.31 273,128 63,413 – –
	June 2011 LTI(50%)6 Sept 2010 Sept 2013 52,533 4.92 258,462 86,153 – –
	June 2011 LTI(50%)6 Sept 2010 Sept 2014 52,533 5.20 273,171 68,292 – –
	June 2012 LTI(50%)6 Sept 2011 Sept 2014 16,370 5.62 91,999 30,666 – –
	June 2012 LTI(50%)6 Sept 2011 Sept 2015 16,370 5.90 96,583 24,146 – –
	June 2013 LTI(50%)6 Sept 2012 Sept 2015 17,412 5.38 93,674 26,021 – –
	June 2013 LTI(50%)6 Sept 2012 Sept 2016 17,412 5.53 96,286 20,059 – –
total	332,240
Former Senior Executives Mark Menhinnitt	June 2009 LTI – A3 Sept 2008 Aug2012 43,308 6.35 275,034 5,134 – 2
	June 2010 LTI(50%)5 Sept 2009 Aug2012 33,358 6.08 202,817 10,397 75 25
	June 2010 LTI(50%)5 Sept 2009 Aug2013 33,358 6.31 210,489 48,869 – –
	June 2011 LTI(50%)6 Sept 2010 Sept 2013 20,267 4.92 99,714 33,237 – –
	June 2011 LTI(50%)6 Sept 2010 Sept 2014 20,267 5.20 105,388 26,346 – –
	June 2012 LTI(50%)6 Sept 2011 Sept 2014 20,329 5.62 114,246 38,082 – –
	June 2012 LTI(50%)6 Sept 2011 Sept 2015 20,328 5.90 119,938 29,985 – –
	June 2013 LTI(50%)6 Sept 2012 Sept 2015 23,142 5.38 124,501 34,584 – –
	June 2013 LTI(50%)6 Sept 2012 Sept 2016 23,142 5.53 127,972 26,661 – –
total	253,295
Craig van der Laan de Vries8	June 2012 LTI(50%)6 Sept 2011 Sept 2014 5,435 5.62 30,545 (8,485) – 100
	June 2012 LTI(50%)6 Sept 2011 Sept 2015 5,435 5.90 32,067 (6,681) – 100
total	(15,166)

1 Early vesting of the award may be available in certain circumstances. The award is forfeited on resignation, but in other cases of termination may be awarded on a pro rata basis.

• 2 The fair value at grant date represents an actuarial valuation of the award using assumptions underlying the Black-Scholes methodology to produce a Monte-Carlo simulation model in accordance with Australian Accounting Standards rounded to two decimal places.

3 The September 2008 grant had three components, with one-third of the grant being tested against EPS and one-third against TSR (Plan for the year ended June 2009 LTI – A), and the remainder vesting based on achievement of service conditions (Plan for the year ended June 2009 LTI – B). For components tested equally against TSR and EPS (Plan for the year ended June 2009 LTI – A) the weighted average fair value is disclosed. For the June 2009 LTI – A, 2% remained unvested at 1 July 2012 and was tested on 1 September 2012 but did not vest.

4 At vesting, the minimum value is nil and the estimate of the maximum value is the fair value multiplied by the number of securities granted.

5 The September 2009 grant is split into two equal tranches that vest independently after three and four years subject to meeting the performance hurdles.

• 6 The September 2010, September 2011 and September 2012 grants are split into two equal tranches that vest independently after three and four years subject to meeting the performance hurdles described in section 3d on page 96.

7 As a consequence of Rod Leaver’s appointment to the role of Regional CEO, Asia, grants made under previous business unit specific LTI plans have been replaced by participation in the Group LTI plan and will be subject to the same terms and performance hurdles.

• 8 Craig van der Laan de Vries ceased as KMP on 31 December 2012.

annual report 2013 Lend Lease 111

i. appendix

Terms Used in This Report

Term	What it means
Earnings Per Security (EPS)	Proft/(loss) after tax divided by the weighted average number of ordinary securities (excluding treasury securities). For some earlier LTI allocations, the defnition of proft/(loss) after tax may have specifc inclusions
	or exclusions.
Face Value of a Security	The value of a Lend Lease securityat the applicable time.
Fair Value of a Security	The value of a Lend Lease security, derived by applying a discount rate determined by the Board, designed to refect the likelihood of vesting (in cases where there are performance hurdles to be met before vesting
	can occur).
Good Leaver	An employee who is leaving Lend Lease for a reason such as retirement or redundancy, and who may remain
	eligible forpart of an incentive opportunity.
Key Management Personnel	Those executives who have the authority and responsibility for planning, directing and controlling the activities
(KMP)	of the Groupdirectlyor indirectly (asper AccountingStandard AASB 124_Related Party Disclosures_).
KPIs	Key performance indicators.
Long Term Incentive (LTI)	An incentive scheme which provides Lend Lease equity (or cash, in some circumstances) to participating executives that may vest, in whole or part, if specifed performance measures are met over a three or
	fouryearperiod.
LTI (face value)	Refers to the number of LTI performance securities granted multiplied by the Lend Lease security price at the
	applicable time.
PAT	StatutoryProft After Tax.
Personnel and Organisation	The Board sub committee that helps the Board fulfl its responsibilities in people management and reward
(P&O)Committee	policies. It is made upentirelyof independent Non Executive directors.
Return on Equity (ROE)	ROE is calculated as the annual statutory proft after tax divided by the arithmetic average of beginning,
	halfyear andyear end securityholders’ equity.
Senior executives	Executives who are KMP, excludingthe CEO.
Short Term Incentive (STI)	Incentives awarded with direct reference to the achievement of Group, regional and individual performance.
	The measures are selected annuallyand align to our longterm strategicpriorities.
Total Package Value (TPV)	Salary plus the value of salary package items such as motor vehicles and parking and compulsory
	superannuation contributionspaid on behalf of an employee.
Total Shareholder Return/	The movement in a company’s share/security price, dividend yield and any return of capital over a specifc
Total Securityholder Return(TSR)	period. It is often expressed as a percentage.

112 annual report 2013 Lend Lease

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dIreCtors’ report

Remuneration Presentations Comparison

The table below provides a comparison of the information included in each of the three remuneration presentations.

Disclosure	Individuals included	Fixed remuneration	STI	STI deferral	LTI
Statutory	Current and Former	The Statutory table	The cash portion of	The accounting share	The accounting share
	Disclosed Senior executives.	includes cash salary, non monetary benefts,	the STI award made in September 2013 for	based payments expense for the STI	based payments expense for LTI awards
	Prorated for time as KMP.	superannuation and other long term benefts in line with statutory	2013 performance. Includes the reduction	deferred from 2011 and 2012.	made in the 2010, 2011, 2012 and 2013 fnancial years.
		remuneration disclosure	in the cash portion of
		requirements.	the 2012 STI award
			which was paid in
			December 2012.
Awarded	Current Disclosed	Fixed remuneration	The cash portion of	The deferred securities	The face value of 2013
	Senior executives.	includes the	the STI award made	portion of the 2013	LTI grants made in
		contractually	in September 2013 for	STI award (due to vest	September 2012.
	Not prorated for time	awarded amount	2013 performance.	in September 2014 to
	as Key Management	of Total Package		September 2016).
	Personnel (KMP). This	Value (including car
	means remuneration disclosed will relate to	and car parking benefts provided in
	both the time in their	addition to TPV)/Base
	current role (as KMP) and any other role they	Salary (including any expatriate benefts) from
	have held at Lend Lease during the fnancial year.	1 September 2012 or later if there was an
		increase duringtheyear.
Actual	Current Disclosed	Fixed remuneration	The cash portion of	2011 STI deferred	The value of 2009 and
Received	Senior executives.	includes salary, non monetary benefts and	the STI award made in September 2013 for	securities which vested in September 2012.	2010 LTI grants which vested in September
	Not prorated for time	superannuation or	2013 performance.		2012 (value at the date
	as KMP.	pension in line with the			of vesting).
		statutory remuneration
		disclosure requirements.
		It excludes annual
		leave and long service
		leave accruals.

annual report 2013 Lend Lease 113

dIreCtors’ report

4. other

a. security options

No security 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

Rule 12 of the Company’s Constitution provides for indemnification in favour of each of the Directors named on pages 67 to 70 of this Report; the 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 . Rule 12 does not indemnify a Director, Company Secretary or Officer for any liability involving a lack of good faith.

In conformity with Rule 12 of the Company’s Constitution, the Company has entered into Deeds of Indemnity, Insurance and Access with each of the Directors named on pages 67 to 70 of this Report. The indemnities operate to the full extent permitted by law and are not subject to a monetary limit. The Company is not aware of any liability having arisen, and no claims have been made, during or since the financial year under the Deeds of Indemnity, Insurance and Access.

For related entities, the indemnification is provided under Rule 12 of the Company’s Constitution 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 with a Director or officer of an unrelated entity.

No indemnity has been granted to an auditor of the Company in their capacity as auditor of the Company.

In accordance with the Corporations Act 2001 , Rule 12 of 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. 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 Company’s auditor, performed certain other services in addition to its statutory duties.

The Board has considered the other 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 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:

• n All other 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,

• n The other 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 Auditors’ Independence Declaration, as required under Section 307C of the Corporations Act 2001 , is included at the end of this Report.

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

are set out below.
	ConsoLIdated
	June 2013 A$000s June 2012 A$000s
Audit and Other Assurance Services
Audit services	7,783 7,770
Other assurance services	568 686
total audit and other assurance services	8,351 8,456

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.

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d a Crawford, ao Chairman

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s B McCann Group Chief Executive Officer & Managing Director

Sydney, 23 August 2013

114 annual report 2013 Lend Lease

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annual report 2013 Lend Lease 115

FIVe Year proFILe

	June 2013	June 2012	June 2011	June 2010	June 20091
Proftability
Revenue	A$m 12,209	11,548	8,927	10,502	14,683
Statutory proft/(loss)before tax	A$m 575	523	632	451	(749)
Operating proft before tax2	A$m 577	527	621	417	365
Statutory proft/(loss)after tax	A$m 552	501	493	346	(669)
Operating proft after tax2	A$m 553	507	485	324	292
OperatingEBITDA2	A$m 744	664	711	483	396
Earningsper stapled securityon statutory proft/(loss)3	cents 96.0	87.7	86.9	69.5	(154.7)
Earningsper stapled securityon operating proft2,3	cents 96.3	88.7	85.6	65.1	67.4
Statutory proft/(loss) after tax to securityholders’ equity
for theperiod(ROE)4	% 13.4	13.4	14.3	12.7	(26.1)
Dividend/Distributionper security5	cents 42.0	38.0	35.0	32.1	41.0
Dividend/Distributionpayout ratio on operating proft after tax2,5	% 44	43	41	50	64
Corporate Strength
Total assets	A$m 14,210	12,704	12,149	11,366	8,291
Cash	A$m 1,538	958	1,046	1,636	1,121
Borrowings	A$m 1,976	1,357	1,694	1,447	1,125
Current assets	A$m 4,638	4,108	4,097	4,171	4,106
Non current assets	A$m 9,572	8,596	8,052	7,196	4,186
Current liabilities	A$m 6,819	6,582	5,794	5,541	4,087
Non current liabilities	A$m 3,062	2,211	2,722	2,465	1,790
Total equity	A$m 4,329	3,911	3,633	3,361	2,414
Cash fowprovided by/(used in)operations	A$m 95	(46)	(42)	168	382
Net asset backing per security	A$ 7.52	6.83	6.36	5.94	5.27
Net asset backing (includingBluewater) per security6	A$ 8.31	7.43	6.94	6.51	5.95
Ratio of current assets to current liabilities7	times 0.7	0.6	0.7	0.8	1.0
Ratio of current assets to current liabilities (excluding resident and
accommodation bond liabilities)7	times 1.1	1.0	1.2	1.2	1.0
Net debt to total tangible assets,less cash8,9	% 6.1	6.3	8.9	n/a	2.9
Borrowings to total equity	% 45.6	34.7	46.6	43.0	46.6
Borrowings to total equity plus borrowings	% 31.3	25.8	31.8	30.1	31.8
Gross borrowings to total tangible assets9	% 17.2	14.3	17.7	15.1	16.9
Borrowings to total market capitalisation	% 41.1	32.9	33.1	34.9	35.1
Securities on issue	m 576	573	571	566	458
Number of securityholders	no. 53,591	52,739	54,370	55,492	52,684
Number of equivalent full-time employees	no. 16,536	18,439	18,374	11,094	10,656
Securityholders’ Returns and Statistics
Proportion of securities on issue to top20 securityholders	% 76.1	76.6	76.3	75.3	74.3
Securityholdings relatingto employees10	% 6.9	6.9	6.4	6.1	7.9
Total dividends/distributions11	A$m 242	218	199	161	187
Security price as at 30 June as quoted on the Australian
Securities Exchange	A$ 8.35	7.20	8.97	7.33	7.01

1 Comparative information for June 2009 reflects the results in Lend Lease Corporation Limited and its controlled entities prior to stapling of the Lend Lease Trust (LLT) in November 2009. Refer to Note 1 ‘Significant Accounting Policies’ of the Consolidated Financial Statements. June 2010 and June 2009 have been adjusted to reflect the impact of aligning the accounting policies of an associate to those of the Group with respect to prior period adoption of AASB Interpretation 12

• ‘Service Concession Arrangements’ .

• 2 Operating profit excludes unrealised property investment revaluations of A$2.0 million loss before tax, A$1.4 million loss after tax (June 2012: A$4.8 million loss before tax, A$5.8 million loss after tax).

• 3 Calculated using the weighted average number of securities on issue including treasury securities. June 2009 has been adjusted by a factor of 1.02 in respect of new securities issued during March and April 2010 via a 5 for 22 single bookbuild accelerated renounceable entitlement offer at A$7.70 per new security.

• 4 Return on equity is calculated as the annual statutory profit after tax divided by the arithmetic average of beginning, half year and year end securityholders’ equity.

• 5 Distributions include interim and final distributions. June 2010 also includes the ‘in specie’ dividend of 0.1 cent following the stapling of LLT units to shares in the company in November 2009.

• 6 Net assets includes Bluewater inventory at market value of A$900.0 million (June 2012: A$776.9 million).

• 7 Since June 2010 ratio includes resident and accommodation bond liabilities recognised following the Primelife acquisition. These are required to be classified as current liabilities as any resident may depart within 12 months. The investment properties, property, plant and equipment, and intangible assets to which they relate, however, are required to be classified as non current.

• 8 The June 2010 ratio is not relevant as the Group was in a net cash position.

• 9 Net debt and gross borrowings include certain other financial liabilities of A$254.1 million (June 2012: A$256.0 million).

10 Securities held through employee benefit vehicles.

• 11 The June 2013 dividend of A$109.4 million was declared subsequent to the reporting date.

116 annual report 2013 Lend Lease

ConsoLIdated FInanCIaL stateMents

ta B L e o F C o n t e n t s

ta B L e o F C o n t e n t s	ta B L e o F C o n t e n t s
Consolidated Financial statements
Income Statement		117
Statement of Comprehensive Income		118
Statement of Financial Position		119
Statement of Changes in Equity		120
Statement of Cash Flows		122
notes to the Consolidated Financial statements		123
1.	Signifcant AccountingPolicies	123
2.	Revenue	133
3.	Other Income	133
4.	OperatingExpenses	133
5.	Finance Revenue and Finance Costs	134
6.	Taxation	134
7.	Dividends/Distributions	137
8.	Earnings Per Share/Stapled Security	137
9.	Cash and Cash Equivalents	138
10.	Loans and Receivables	138
11.	Inventories	139
12.	EquityAccounted Investments	139
13.	Investment Properties	142
14.	Other Financial Assets	143
15.	Property, Plant and Equipment	143
16.	Intangible Assets	144
17.	Defned Beneft Plan Asset	147
18.	Trade and Other Payables	149
19.	Resident and Accommodation Bond Liabilities	150
20.	Borrowings and FinancingArrangements	150
21.	Provisions	151
22.	Other Financial Liabilities	152
23.	Issued Capital and TreasurySecurities	153
24.	Reserves	154
25.	Contingent Liabilities	155
26.	Consolidated Entities	157
27.	Segment Reporting	158
28.	Capital Risk Management	159
29.	International CurrencyManagement and Financial Instruments	160
30.	Commitments	165
31.	Notes to the Statement of Cash Flows	166
32.	Employee Benefts	167
33.	KeyManagement Personnel Disclosures	169
34.	Non KeyManagement Personnel Related PartyInformation	170
35.	Parent EntityDisclosures	172
36.	Events Subsequent to Balance Date	172
directors’ declaration		173

annual report 2013 Lend Lease 117

InCoMe stateMent

Year ended 30 June 2013

		June 2013	June 2012
	Note	A$m	A$m
Revenue	2	12,208.9	11,547.5
Cost of sales		(10,916.1)	(10,226.0)
Grossproft		1,292.8	1,321.5
Other income	3	222.2	151.2
Other expenses		(1,012.4)	(1,073.4)
results from operating activities		502.6	399.3
Finance revenue	5	44.0	62.2
Finance costs	5	(124.8)	(121.8)
net fnance costs		(80.8)	(59.6)
Share ofproft of equityaccounted investments	12	152.7	182.8
proft before tax		574.5	522.5
Income tax expense	6	(22.0)	(19.4)
proft after tax		552.5	503.1
Proft after tax attributable to:
Members of Lend Lease Corporation Limited		541.0	501.4
Unitholders of Lend Lease Trust		10.6
proft after tax attributable to securityholders		551.6	501.4
External non controllinginterests		0.9	1.7
proft after tax		552.5	503.1
Basic/Diluted Earnings Per Lend Lease Corporation Limited Share
Shares excludingtreasuryshares(cents)	8	99.7	92.7
Shares on issue(cents)	8	94.2	87.7
Basic/Diluted Earnings Per Lend Lease Group Stapled Security
Securities excludingtreasurysecurities(cents)	8	101.7	92.7
Securities on issue(cents)	8	96.0	87.7

The accompanying notes form part of these consolidated financial statements.

118 annual report 2013 Lend Lease

stateMent oF CoMprehensIVe InCoMe

Year ended 30 June 2013

		June 2013	June 2012
	Note	A$m	A$m
Proft After Tax		552.5	503.1
Other Comprehensive Income/(Expense) After Tax
Items that may be reclassifed subsequently to proft or loss:
Movements in Fair Value Revaluation Reserve	6b, 24	23.1	(18.3)
Movements in HedgingReserve	6b, 24	10.4	(43.5)
Movements in Foreign CurrencyTranslation Reserve	6b, 24	34.9	52.2
Items that will not be reclassifed to proft or loss:
Movements in Non ControllingInterest Acquisition Reserve	6b, 24	16.1	(3.2)
total items that may be or will not be reclassifed subsequently toproft or loss		84.5	(12.8)
total comprehensive income after tax		637.0	490.3
Total comprehensive income after tax attributable to:
Members of Lend Lease Corporation Limited		625.2	488.4
Unitholders of Lend Lease Trust		10.6
total comprehensive income after tax attributable to securityholders		635.8	488.4
External non controllinginterests		1.2	1.9
total comprehensive income after tax		637.0	490.3

The accompanying notes form part of these consolidated financial statements.

annual report 2013 Lend Lease 119

stateMent oF FInanCIaL posItIon

as at 30 June 2013

		June 2013	June 2012
	Note	A$m	A$m
Current Assets
Cash and cash equivalents	9	1,538.4	957.9
Loans and receivables	10	1,896.8	1,874.5
Inventories	11	1,050.1	1,122.2
Other fnancial assets	14	97.8	77.6
Current tax assets		6.8	39.6
Other assets		48.5	35.7
total current assets		4,638.4	4,107.5
Non Current Assets
Loans and receivables	10	662.8	330.2
Inventories	11	1,840.9	1,696.3
Equityaccounted investments	12	585.5	470.2
Investmentproperties	13	4,023.8	3,415.0
Other fnancial assets	14	453.1	333.3
Deferred tax assets	6c	199.9	148.2
Property,plant and equipment	15	400.3	669.4
Intangible assets	16	1,262.5	1,405.1
Defned beneftplan asset	17	70.4	55.2
Other assets		72.8	73.1
total non current assets		9,572.0	8,596.0
total assets		14,210.4	12,703.5
Current Liabilities
Trade and otherpayables	18	3,697.1	3,725.2
Resident and accommodation bond liabilities	19	2,656.8	2,422.9
Provisions	21	283.2	276.6
Borrowings and fnancingarrangements	20		100.0
Other fnancial liabilities	22	181.7	56.8
total current liabilities		6,818.8	6,581.5
Non Current Liabilities
Trade and otherpayables	18	874.3	592.2
Provisions	21	70.7	74.8
Borrowings and fnancingarrangements	20	1,976.2	1,257.1
Other fnancial liabilities	22	88.3	222.2
Deferred tax liabilities	6c	52.8	64.5
total non current liabilities		3,062.3	2,210.8
total liabilities		9,881.1	8,792.3
net assets		4,329.3	3,911.2
Equity
Issued capital	23	1,599.9	2,077.6
Treasurysecurities	23	(118.0)	(111.0)
Reserves	24	(23.7)	(119.3)
Retained earnings		2,359.5	2,058.0
total equity attributable to members of Lend Lease Corporation Limited		3,817.7	3,905.3
Total equityattributable to unitholders of Lend Lease Trust		506.1	0.6
total equity attributable to securityholders		4,323.8	3,905.9
External non controllinginterests		5.5	5.3
total equity		4,329.3	3,911.2

The accompanying notes form part of these consolidated financial statements.

120 annual report 2013 Lend Lease

stateMent oF ChanGes In equItY

Year ended 30 June 2013

		June 2013	June 2012
	Note	A$m	A$m
Issued Capital and treasury securities
Issued Capital
Openingbalance at beginningof fnancialyear		2,077.6	2,063.7
Transactions with owners for the year:
Recapitalisation of Lend Lease Trust		(500.3)
Distribution Reinvestment Plan(DRP)		22.6	13.9
Closing balance at end of fnancialyear	23	1,599.9	2,077.6
Treasury Securities
Openingbalance at beginningof fnancialyear		(111.0)	(83.3)
Transactions with owners for the year:
Treasurysecurities acquired		(26.4)	(50.0)
Treasurysecurities vested		19.4	22.3
Closing balance at end of fnancialyear	23	(118.0)	(111.0)
total issued capital and treasury securities		1,481.9	1,966.6
reserves
Fair Value Revaluation Reserve
Openingbalance at beginningof fnancialyear		21.6	39.9
Movements duringtheyear		23.1	(18.3)
Closing balance at end of fnancialyear	24	44.7	21.6
Hedging Reserve
Openingbalance at beginningof fnancialyear		(88.9)	(45.4)
Movements duringtheyear		10.4	(43.5)
Closing balance at end of fnancialyear	24	(78.5)	(88.9)
Foreign Currency Translation Reserve
Openingbalance at beginningof fnancialyear		(190.6)	(242.8)
Movements duringtheyear		34.9	52.2
Closing balance at end of fnancialyear	24	(155.7)	(190.6)
Non Controlling Interest Acquisition Reserve
Openingbalance at beginningof fnancialyear		(89.5)	(86.3)
Movements duringtheyear		16.1	(3.2)
Closing balance at end of fnancialyear	24	(73.4)	(89.5)
Other Reserve
Balance at beginning and end of fnancialyear	24	111.7	111.7
Equity Compensation Reserve
Openingbalance at beginningof fnancialyear		62.0	60.1
Transactions with owners for the year:
Movements attributable to allocation and vestingof securities		11.1	1.9
Closing balance at end of fnancialyear	24	73.1	62.0
Other Compensation Reserve
Balance at beginning and end of fnancialyear		54.4	54.4
total reserves	24	(23.7)	(119.3)

The accompanying notes form part of these consolidated financial statements.

annual report 2013 Lend Lease 121

	June 2013	June 2012
	A$m	A$m
Retained Earnings
Openingbalance at beginningof fnancialyear	2,058.0	1,725.6
Proft attributable to members of Lend Lease Corporation Limited	541.0	501.4
Transactions with owners for the year:
Dividendspaid	(227.5)	(163.3)
Dividends on treasurysecurities	11.7	8.2
Dividends under DRP	(24.0)	(13.9)
Other movements	0.3
Closing balance at end of fnancialyear	2,359.5	2,058.0
Unitholders of Lend Lease Trust
Openingbalance at beginningof fnancialyear	0.6	0.6
Proft attributable to unitholders of Lend Lease Trust	10.6
Transactions with owners for the year:
Movement attributable to recapitalisation	500.3
Distributionspaid	(0.9)
Distributionsprovided for	(5.7)
Units issued under DRP	1.4
Other movements	(0.2)
Closing balance at end of fnancialyear	506.1	0.6
External Non Controlling Interests
Openingbalance at beginningof fnancialyear	5.3	34.4
Proft attributable to non controllinginterests	0.9	1.7
Transactions with owners for the year:
Movements attributable to dividends/distributions received	(0.2)	(7.5)
Movements attributable to acquisition	0.6	1.4
Movements attributable to disposal	(1.3)	(19.4)
Effect of foreign exchange rate/other movements	0.2	(5.3)
Closing balance at end of fnancialyear	5.5	5.3
total equity	4,329.3	3,911.2
Total Comprehensive Income After Tax for the Financial Year
Attributable to:
Members of Lend Lease Corporation Limited	625.2	488.4
Unitholders of Lend Lease Trust	10.6
total comprehensive income after tax attributable to securityholders	635.8	488.4
External non controllinginterests	1.2	1.9
total comprehensive income after tax	637.0	490.3

The accompanying notes form part of these consolidated financial statements.

122 annual report 2013 Lend Lease

stateMent oF Cash FLoWs

Year ended 30 June 2013

		June 2013	June 2012
	Note	A$m	A$m
Cash Flows from Operating Activities
Cash receipts in the course of operations		11,734.9	11,382.1
Cashpayments in the course of operations		(11,743.4)	(11,363.2)
Interest received		32.1	51.4
Interestpaid		(116.3)	(124.7)
Dividends/distributions received		152.9	146.4
Income tax refunded/(paid)in respect of operations		34.7	(138.1)
net cashprovided by/(used in) operating activities	31	94.9	(46.1)
Cash Flows from Investing Activities
Sale of asset held for sale			527.1
Sale/redemption of investments		400.2	328.6
Acquisition of investments		(276.2)	(211.5)
Sale of investmentproperties		9.8	66.1
Acquisition of/capital expenditure on investmentproperties		(252.8)	(128.0)
Net loans from associates andjoint ventures		141.9	0.8
Disposal of consolidated entities(net of cash disposed and transaction costs)		213.7
Disposal ofproperty,plant and equipment		6.1	3.9
Acquisition ofproperty,plant and equipment		(54.0)	(63.3)
Acquisition of intangible assets		(37.1)	(18.0)
Other investingactivities			(0.3)
net cashprovided by investing activities		151.6	505.4
Cash Flows from Financing Activities
Proceeds from borrowings		778.2	100.0
Repayment of borrowings		(219.9)	(477.6)
Dividends/distributionspaid		(216.7)	(155.1)
Other fnancingactivities		(38.8)	(33.3)
net cashprovided by/(used in) fnancing activities		302.8	(566.0)
Other Cash Flow Items
Effect of foreign exchange rate movements on cash and cash equivalents		31.2	18.4
net increase/(decrease) in cash and cash equivalents		580.5	(88.3)
Cash and cash equivalents at beginning of fnancialyear		957.9	1,046.2
Cash and cash equivalents at end of fnancialyear	9	1,538.4	957.9

The accompanying notes form part of these consolidated financial statements.

annual report 2013 Lend Lease 123

notes to the ConsoLIdated FInanCIaL stateMents

1. significant accounting policies

Lend Lease Corporation Limited (‘the Company’) is incorporated and domiciled in Australia. The consolidated financial report of the Company for the financial year ended 30 June 2013 comprises the Company and its controlled entities including Lend Lease Trust (‘LLT’) (together referred to as the ‘consolidated entity’ or the ‘Group’). The Group is a for-profit entity and is an international property and infrastructure group. Further information about the Group’s primary activities is included in Note 27 ‘Segment Reporting’.

Shares in the Company and units in LLT are traded as one security under the name of Lend Lease Group on the Australian Securities Exchange (‘ASX’). The Company is deemed to control LLT for accounting purposes and therefore LLT is consolidated into the Group’s financial report. The issued units of LLT, however, are not owned by the Company and are therefore presented separately in the consolidated entity Statement of Financial Position within equity, notwithstanding that the unitholders of LLT are also the shareholders of the Company.

Following stapled securityholders’ approval on 15 November 2012, the Company has reallocated capital to LLT by reducing the Company’s share capital by A$500.3 million and applying that amount as additional capital to LLT. This capital reallocation did not affect the number of shares on issue nor the number of units held by securityholders and did not result in any cash distribution to members.

The consolidated financial report was authorised for issue by the Directors on 23 August 2013.

1.1 Statement of Compliance

The consolidated financial report is a general purpose financial report that has been prepared in accordance with Australian Accounting Standards (‘AASBs’) 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 (‘IFRSs’) 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, available for sale investments, investment properties, resident liabilities 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 Note 1 for 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, 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 for making 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 1.31.

In accordance with Class Order 98/100, amounts in the financial report are rounded off to the nearest thousand dollars unless otherwise indicated.

The accounting policies set out below have been consistently applied to all financial years presented in the consolidated financial statements and by all entities in the consolidated entity, except as explained in Note 1.3 which addresses the impact of new/revised Accounting Standards.

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 (‘SPEs’) for trading and investment purposes. The SPEs 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 an 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 less impairments in the Company’s financial statements. The Company sponsors a number of employee benefit vehicles, including employee security plans. Under AASBs, these vehicles, while not legally controlled, are required to be consolidated for accounting purposes.

External non controlling interests are allocated their share of total comprehensive income and are presented within equity in the consolidated Statement of Financial Position, separately from the equity of securityholders.

1.3 Impact of New/Revised Accounting Standards

new and revised accounting standards

From 1 July 2012 the Group has adopted AASB 2011-9 Amendments to Australian Accounting Standards – Presentation of Items of Other Comprehensive Income . The change relates only to disclosures and had no impact on consolidated earnings per share or net profit. The changes have been applied retrospectively and require the Group to separately present those items of other comprehensive income that may be reclassified to profit or loss in the future from those that will never be reclassified to profit or loss.

From 1 July 2012 the Group has also adopted AASB 2010-8 Amendments to Australian Accounting Standards – Deferred Tax: Recovery of Underlying Assets . The changes had no significant impact on the Group’s assessment of deferred taxes.

124 annual report 2013 Lend Lease

notes to the ConsoLIdated FInanCIaL stateMents CONTINUED

1. significant accounting policies continued

1.3 Impact of New/Revised Accounting Standards continued

new accounting standards and Interpretations not Yet adopted

Certain new accounting standards and interpretations have been published that are not mandatory for the financial year ended 30 June 2013 but are available for early adoption and have not been applied in preparing this report.

The potential effect of these is outlined below:

• n AASB 9 Financial Instruments , AASB 2009-11 Amendments to Australian Accounting Standards arising from AASB 9, AASB 2010-7 Amendments to Australian Accounting Standards arising from AASB 9 (December 2010) and AASB 2012-6 Amendments to Australian Accounting Standards – Mandatory Effective Date of AASB 9 and Transition Disclosures (September 2012).

• These standards address the classification, measurement and derecognition of financial assets and financial liabilities. The potential effect of this standard is yet to be determined.

• n AASB 10 Consolidated Financial Statements introduces a new definition of control and addresses whether an entity should be included within the consolidated financial statements of the parent company.

• n AASB 11 Joint Arrangements establishes principles for financial reporting by parties to a joint arrangement.

• The Group’s assessment of the impact of AASB 10 and AASB 11 indicates that the application of these standards is unlikely to have a significant impact on the Group’s financial position and performance.

• n AASB 12 Disclosure of Interests in Other Entities relates to disclosure requirements for all forms of interests in other entities, including subsidiaries, joint arrangements, associates and unconsolidated structured entities. Application of this standard will not affect amounts recognised in the financial statements, however it will impact the type of information disclosed in relation to the Group’s investments.

• n AASB 13 Fair Value Measurements and AASB 2011-8 Amendments to Australian Accounting Standards arising from AASB 13 introduce new guidance on fair value measurement and disclosure requirements when fair value is permitted by accounting standards. Application of this standard will not affect amounts recognised in the financial statements, however it will impact the type of information disclosed in relation to the fair value hierarchy.

• n The revised AASB 119 Employee Benefits (June 2011) and AASB 2011-10 Amendments to Australian Accounting Standards arising from AASB 119 (September 2011) introduce changes to the accounting for and presentation of pensions and other post-employment benefits. The revised standard eliminates the corridor approach which defers the recognition of actuarial gains and losses attributable to the Group’s defined benefit plans in the Statement of Comprehensive Income. The revised standard also requires the net interest expense on fund obligations and interest income on assets to be determined by applying the discount rate used to measure the fund obligations. Previously, the Group determined interest income on fund assets based on the expected long term return for each asset class.

• Had the revised standard been applied at 30 June 2013, and previously unrecognised cumulative gains and losses had been recognised, total equity would have decreased by A$63.8 million, after tax. The amount recognised in the Statement of Comprehensive Income for current year actuarial gains to 30 June 2013 would have been A$23.2 million, after tax. In addition, the impact to the defined benefit expense on adopting the amendments would decrease profit after tax by A$2.8 million, for the year ended 30 June 2013.

The standards above become mandatory for the June 2014 financial year, with the exception of AASB 9 which will apply to the June 2016 financial year. With the exception of AASB 13, which applies prospectively, the standards are to be applied retrospectively.

1.4 Revenue, Other Income and Profits

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 costs incurred 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.

For aged care and retirement living:

• n Deferred Management Fees (‘DMF’):

• A typical DMF contract provides for an annual retainer for a fixed period (e.g. 3% per annum of purchase or resale price for a period up to 12 years, or 36% in total) plus a share of the capital gain realised on turnover.

• For both owned retirement villages (investment property) and managed retirement villages, DMF income is recognised on an annual accrual basis based upon the expected term of the resident’s licence and estimates of capital growth since the resident first occupied the unit.

• n Aged Care Revenue:

• Aged Care revenue comprises daily resident living contributions, retention fees and government funding, which are all determined in accordance with Federal Government authorised rates.

• This revenue is recognised as the services are provided. The Group is entitled to charge an annual retention fee to hostel residents. These annual fees are regulated by the Federal Government and are paid by a resident on departure. These fees are accrued during the resident’s period of occupancy.

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:

• n The significant risks and rewards have been transferred to the buyer;

• n The Group retains neither continuing managerial involvement to the degree usually associated with ownership, nor effective control over the development properties sold;

• n The revenue can be measured reliably and it is highly probable that the Group will receive the consideration due; and,

• n The Group can reliably measure the costs incurred or to be incurred in respect of the transaction.

rental revenue

Rental revenue 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.

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dividends/distributions

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

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.

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.

Finance revenue

Finance revenue is recognised on a time proportion basis using the effective interest method. When a financial asset 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 in 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 (and tax laws) enacted or substantively enacted at the balance sheet date in each jurisdiction, and any adjustment to tax payable in respect of previous financial years.

Deferred tax is calculated 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 are not likely to 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 (and tax laws) enacted or substantively enacted at the balance sheet date.

Deferred tax assets are recognised for deductible temporary differences, unused tax losses and unused tax credits only to the extent that it is probable that future taxable amounts 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.

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 to be realised simultaneously.

tax Consolidation

The Company is the head entity of the Australian Tax Consolidated Group comprising all the Australian wholly owned subsidiaries. The Company entered into the Australian Tax Consolidation Regime effective 1 July 2002. As a consequence, all members of the Australian Tax Consolidation Group are taxed as a single entity.

The Company and its Australian wholly owned subsidiaries account for their own current and deferred tax amounts. These amounts are measured using a modified standalone taxpayer approach.

Members of the Australian Tax Consolidated Group have entered into a tax sharing/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 modified standalone basis.

The contributions are payable as set out in the agreement and reflect the timing of the head entity’s obligations to make payments for tax liabilities to the relevant tax authority. The assets and liabilities arising under the Australian tax sharing/funding arrangement are recognised as intercompany assets and liabilities (on demand) with a consequential adjustment to income tax expense/revenue.

1.6 Impairment

The carrying amounts of the Group’s assets, subject to impairment tests 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 1.11 ‘Trade and Other Receivables’).

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 (other than goodwill) is reversed 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.

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notes to the ConsoLIdated FInanCIaL stateMents CONTINUED

1. significant accounting policies continued

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 it is acquired principally for the purpose of selling in the short term (held for trading) or if so designated by the Group 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 in line with the Group’s documented risk management or investment strategy (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 which are included in non current assets.

held to Maturity Investments

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

available for sale Financial assets

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

recognition and Measurement Criteria

Purchases and sales of investments are recognised on trade date – the date on which the Group commits to purchase or sell the asset. Investments are initially recognised at fair value plus transaction costs for all financial assets not carried at fair value through profit or loss. Investments are derecognised when the rights to receive cash flows from the investments have expired or been transferred and the Group has transferred substantially all the risks and rewards of ownership. Available for sale financial assets and financial assets at fair value through profit or loss are subsequently carried at fair value. Loans and receivables and held to maturity investments are carried at amortised cost using the effective interest method. Realised and unrealised gains and losses arising from changes in the fair value of the ‘financial assets at fair value through profit or loss’ category are included in the Income Statement in the financial year in which they arise.

Unrealised gains or 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 29e ‘Fair Values of Financial Assets and Liabilities’ 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 but are recognised through other comprehensive income.

1.8 Investment Properties

Investment properties are measured at cost, including transaction costs, on initial recognition and then stated at fair value. The fair value for all properties, except those under development and valued at less than A$10.0 million, is based on periodic, but at least triennial, valuations by qualified external independent valuers. It is the policy of the Group to review the fair 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 perpetuity of net operating income and deferred management fees using a capitalisation rate derived from market evidence. Any gain or loss arising from a change in fair value is recognised in the Income Statement. Rental revenue and deferred management fees from investment properties are accounted for as described in Note 1.4 ‘Revenue, Other Income and Profits’.

Retirement living investment properties, principally comprising retirement villages (both operating villages and villages under development) are held for long term income yields and are not occupied by the Group. The Group makes a determination, on a property by property basis, as to whether a property should be considered an investment property. Factors taken into account include whether the property generates property related cash flows largely independent of other services provided to residents of the properties; whether the property is held for long term capital appreciation rather than for short term sale in the ordinary course of business; and the probable future use of land that is not currently generating cash flows.

When an item of owner occupied property, plant and equipment (see Note 1.14 ‘Property, Plant and Equipment’) 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.

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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 certain fees incurred.

1.9 Equity Accounted Investments (Associates and Joint Venture Entities)

Investments in associates and joint venture entities are accounted for using the equity method. Associates (including partnerships) are entities in which the Group, as a result of its voting rights, has significant influence, but not control or joint control, over financial and operating policies.

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.

The consolidated financial statements include the Group’s share of the total recognised gains or losses of associates and joint venture entities on an equity accounted basis.

For associates, this is from the date that significant influence commences until the date that significant influence ceases, and for joint venture entities, this is from the date joint control commences until the date joint control ceases. Other movements in associates’ and joint venture entities’ reserves are recognised directly in the Group’s consolidated reserves. Investments in associates and joint venture entities 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 equity accounted investment (including assets that form part of the net investment in the associate or joint venture entity), the carrying amount is reduced to nil and recognition of further losses is discontinued except to the extent that the Group has recourse to obligations in respect of the associate or joint venture entity. Dividends from associates and joint venture entities 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 equity accounted investments are eliminated against the investment in the associate or joint venture entity 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 a subsidiary of the Group that is deemed to be a Venture Capital organisation are carried at fair value even though the Group may have significant influence or joint control over those entities.

1.10 Non Current Assets Held For Sale

Non current assets that are expected to be recovered primarily through sale rather than through continuing use, are classified as held for sale. Immediately before classification as held for sale, the assets are remeasured in accordance with the Group’s accounting policies. Thereafter the assets are measured at the lower of their carrying amount and fair value less cost to sell.

1.11 Trade and Other Receivables

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 the receivables. The amount of the provision is the difference between the asset’s carrying amount and its fair value, which is estimated as the present value of estimated future cashflows, discounted at the effective interest rate where relevant. The amount of the provision is recognised in the Income Statement.

deferred Management Fees receivable

Deferred management fees (‘DMF’) receivable represent amounts owed to the Group in connection with resident occupancy at retirement villages subject to long-term management agreements. DMF receivable is calculated in accordance with resident contracts, refer to Note 1.4 ‘Revenue, Other Income and Profits’.

DMF receivable is classified differently on the Statement of Financial Position, between owned and managed retirement villages.

For owned retirement villages, the DMF receivable is offset against the resident liabilities balance in current liabilities as they are net settled in the same future transaction.

In relation to leased and managed retirement villages, the DMF receivable is recognised as a receivable split between current and non current assets based on the expected rate of resident turnover.

1.12 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.

1.13 Inventories

property held for sale

This accounting is permitted by AASB 128 Investments in Associates and AASB 131 Interests in Joint Ventures which require investments held by venture capital organisations to be excluded from their scope when those investments are designated as at ‘fair value through profit or loss’ from inception.

The investments made by the Venture Capital organisation are considered to be venture capital in nature due to management of the investments on a portfolio basis and are unrelated to the Group’s key business activities. The application of this exemption is assessed on each investment made by the Venture Capital organisation. Refer to Note 1.7 ‘Investments’ for an analysis of recognition and measurement criteria of investments classified and measured at ‘fair value through profit or loss’.

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 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 from 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 where cost (including costs to complete) exceeds net realisable value. In determining the recoverable amount, regard is given to the market conditions affecting each property and the underlying strategy for selling the property.

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notes to the ConsoLIdated FInanCIaL stateMents CONTINUED

1. significant accounting policies continued

1.13 Inventories continued

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.

Work in progress is presented as part of inventories for all contracts in which costs incurred plus recognised profits exceed progress billings. If progress billings and recognised losses exceed costs incurred plus recognised profits, then the difference is presented in trade and other payables.

1.14 Property, Plant and Equipment

owned assets

Items of property, plant and equipment are measured at cost or deemed cost less accumulated depreciation and impairment losses (see Note 1.6 ‘Impairment’). The cost of self constructed assets includes the cost of materials, direct labour and an appropriate proportion of production overheads.

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 values, useful lives and depreciation methods applied to assets are reassessed at least annually.

Leased assets

Leases in which the Group assumes substantially all the risks and rewards of ownership are classified as finance leases. Plant and equipment acquired by way of finance lease is stated at an amount equal to the lower of the 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 ‘Impairment’). Subsequent to initial recognition, the asset is accounted for in accordance with the accounting policy applicable to that asset.

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 20 years, furniture and fittings over three – 15 years, motor vehicles over four – eight years and computer equipment over three years. Land is not depreciated.

1.15 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 – five years).

Costs associated with developing or maintaining computer software programmes are recognised as an expense as incurred. Costs directly associated with producing identifiable and unique software products that will 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 – five years).

1.16 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 acquisition 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.

approved provider aged Care places (Bed Licences)

Bed licences held by the Group include owned and managed bed licences. Both owned and managed bed licences were disposed of during the year.

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 ‘Impairment’). Amortisation is charged to the Income Statement on a straight line basis over the estimated useful lives of the intangible assets, ranging from three to 20 years.

The recoverable amount of management agreements and other intangible assets is assessed at least annually using independent valuations or alternative calculation methods, such as discounted cash flow projections.

1.17 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.

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The asset recognised in the Statement of Financial Position 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 at least 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.

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 Statement of Financial Position against the defined benefit plan asset or liability.

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

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 sheet 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 sheet 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 security 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 sheet date are discounted to present value.

profit sharing and Bonus plans

The Group recognises a liability and an expense for bonuses and profit sharing. These amounts are calculated using undiscounted values and are based on a formula that takes into consideration the profit attributable to the Group’s securityholders after certain adjustments. The Group recognises a provision when contractually obliged or when there is a past practice that has created a constructive obligation.

1.18 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.

Trade and other payables are presented as current liabilities unless there is an unconditional contractual right for the Group to defer payment for at least 12 months from the reporting date.

Insurance Claims

A liability for outstanding claims is recognised in respect of Lend Lease’s wholly owned special purpose captive insurance subsidiaries. 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 ‘Provisions’) and the initial fair value less accumulated amortisation. Fair value is determined using a probability weighted discounted cash flow approach.

130 annual report 2013 Lend Lease

notes to the ConsoLIdated FInanCIaL stateMents CONTINUED

1. significant accounting policies continued

1.19 Resident and Accommodation Bond Liabilities

resident Liabilities

This represents an amount paid by residents to occupy apartments and units classified as investment property. Resident liabilities are measured at face value, representing the principal amount plus the resident’s share of capital gains based on market values of the underlying property at balance date, less deferred management fees earned to date.

Resident liabilities are non interest bearing and are classified as current liabilities because any resident may depart within 12 months, and there is no unconditional contractual right to defer settlement, notwithstanding that history has shown that residents stay for an average period of 11 years in independent living units (‘ILUs’) and six years in serviced apartments (‘SAs’).

accommodation Bonds

Accommodation bonds are paid typically by residents of low care aged care beds. Accommodation bonds were disposed of during the year.

1.20 Borrowings

Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently measured 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.

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.

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 for qualifying cash flow hedges and qualifying net investment hedges in foreign operations that are recognised in other comprehensive income.

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 investments classified as available for sale financial assets, are included in the fair value revaluation reserve in equity.

Group entities

The results and Statement of Financial Position 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:

• n Assets and liabilities for each Statement of Financial Position presented are translated at the closing rate at the date of that Statement of Financial Position;

• n 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,

• n All resulting exchange differences are recognised in other comprehensive income.

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 fair value. Recognition of any resultant gain or loss depends on the nature of the item being hedged (refer to Note 1.22’ Derivative Financial Instruments and Hedging Activities’).

The fair value of forward exchange contracts is their value at the current quoted forward price at the balance sheet date.

1.22 Derivative Financial Instruments and Hedging Activities

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 other comprehensive income. 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.

annual report 2013 Lend Lease 131

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.

The fair value of interest rate derivatives 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.

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

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

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

1.24 Finance Costs

Finance costs include interest, amortisation of discounts or premiums relating to borrowings, amortisation of ancillary costs incurred in connection with arrangement of new borrowings facilities 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.

Finance costs are expensed immediately as incurred unless they relate to acquisition and development of qualifying assets. Qualifying assets are assets that take more than six months to prepare for their intended use or sale. Finance costs related to qualifying assets are capitalised.

1.25 Earnings Per Share/Stapled Security (EPS/EPSS)

The Group presents basic and diluted EPS/EPSS in the Income Statement.

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

Diluted EPS/EPSS is determined by adjusting the profit/(loss) after tax attributable to members of the Company and Group, and the weighted average number of ordinary shares/securities outstanding for the effects of all dilutive potential ordinary shares/securities.

The issued units of LLT are presented separately within equity, and therefore the profit attributable to LLT is excluded from the calculation of basic and diluted earnings per Company share presented in the Income Statement.

1.26 Cash and Cash Equivalents

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

Bank overdrafts (if applicable) are shown as a current liability on the Statement of Financial Position and are shown as a reduction to the cash balance in the Statement of Cash Flows.

1.27 Issued Capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares are recognised as a deduction from equity.

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.

Repurchased shares are classified as treasury shares and are recognised as a deduction from equity.

Dividends/distributions 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 statement of financial position. 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.

132 annual report 2013 Lend Lease

notes to the ConsoLIdated FInanCIaL stateMents CONTINUED

1. significant accounting policies continued

1.29 Service Concession Arrangements (SCAs)

The Group has investments providing SCAs, originating through public private partnerships (PPP), in the areas of healthcare, education and government facilities. These arrangements provide facilities management and maintenance services for a fixed payment per annum (subject to inflationary increases per year) with terms generally of 25 to 30 years. They also incorporate contractual obligations to make available the individual assets for their prescribed use and, where necessary, overhaul or replace major items of plant and equipment related to the assets with payment obtained through periodic draw-downs from the relevant government authorities.

The Group equity accounts its investment in project companies with SCAs. In the project company holding the SCA, 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 and lifecycle costs are expensed as incurred.

1.30 Accounting Estimates and Judgements

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that may have a financial impact on the Group and are believed to be reasonable under the circumstances. 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.

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 Note 17a vii and b vii ‘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 security price and whether vesting conditions will be satisfied. Refer to Note 1.17 ‘Employee Benefits’ 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:

• n When all the significant risks and rewards of ownership of development properties are substantially transferred to the purchaser;

• n The percentage of completion on construction work performed; and,

• n 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.

1.31 Key Sources of Estimation Uncertainty

Impairment of Goodwill and other Intangible assets

Note 16a ‘Goodwill’ contains information about the assumptions and their risk factors relating to goodwill impairment testing.

The Group assesses whether goodwill is impaired at least annually in accordance with Note 1.6 ‘Impairment’. These calculations involve an estimation of the recoverable amount of the cash generating units to which the goodwill is allocated.

The recoverable amount of other intangible assets (including management agreements) are assessed annually in accordance with Note 1.16 ‘Intangible Assets’.

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 assets held at cost or amortised cost using estimations of their recoverable amount. For current and deferred tax assets refer to Note 1.5 ‘Income Taxes’. For investment properties, loans and receivables and inventories refer to Note 1.8 ‘Investment Properties’, 1.11 ‘Trade and Other Receivables’ and 1.13 ‘Inventories’. Refer to Note 29e ‘Fair Values of Financial Assets and Liabilities’ for a summary of the basis of valuation of financial assets measured at fair value.

annual report 2013 Lend Lease 133

	June 2013	June 2012
	A$m	A$m
2. revenue
revenue from the provision of services
Construction	10,548.3	10,475.9
Development	273.2	342.3
Infrastructure Development	313.0	172.7
Investment Management	130.4	118.0
total revenue from theprovision of services	11,264.9	11,108.9
Revenue from the sale of developmentproperties	862.6	362.8
Rental revenue	48.9	60.6
Other revenue	32.5	15.2
total revenue	12,208.9	11,547.5
3. other Income
Netgain on disposal of equityaccounted investments	100.2	78.5
Fair value netgain on remeasurement of investmentproperties	25.6	38.1
Netgain on disposal of other assets and liabilities	15.7	17.6
Net fair valuegain on derivative contracts held for trading	1.6	1.5
Netgain on disposal of controlled entities	6.0
Netgain on disposal of available for sale fnancial assets	2.4
Other	70.7	15.5
total other income	222.2	151.2
4. operating expenses
proft before income tax includes the following operating expense items:
Employee beneft expenses	2,355.5	2,250.3
Superannuation accumulationplan expense	28.6	25.4
Net defned beneftplan expense	8.9	6.9
Expenses include impairments/(reversals) and provisions raised/(written back) relating to:
Loans and receivables	2.1	1.8
Propertyinventories	6.7	25.2
Property,plant and equipment	0.6
Equityaccounted investments	3.1
Other fnancial assets	2.0
Operatinglease expense	83.1	84.2
Depreciation and amortisation	86.9	77.4
Net fair value loss on fair value throughproft or loss assets	3.2
Net foreign exchange loss	7.9	13.9
	June 2013	June 2012
	A$000s	A$000s
Auditors’ Remuneration
amounts received or due and receivable by the auditors of Lend Lease Group for:
audit and other assurance services
Audit services	7,783	7,770
Other assurance services	568	686
total audit and other assurance services	8,351	8,456

134 annual report 2013 Lend Lease

notes to the ConsoLIdated FInanCIaL stateMents CONTINUED

June 2013	June 2012
A$m	A$m
5. Finance revenue and Finance Costs Finance Revenue Relatedparties 12.3	23.0
Other corporations 28.2	34.2
total interest fnance revenue 40.5	57.2
Interest discounting 3.5	5.0
total fnance revenue 44.0	62.2
Finance Costs Other corporations 122.9	120.9
_Less:_Capitalised interest fnance costs1 (10.0)	(7.7)
total interest fnance costs 112.9	113.2
Non interest fnance costs 11.9	8.1
Interest discounting	0.5
total fnance costs 124.8	121.8
net fnance costs (80.8)	(59.6)
1 The weighted average interest rate used to determine the amount of interest fnance costs eligible for capitalisation was 5.56% (30 June 2012: 6.35%), which is the
effective interest rate.
June 2013	June 2012
A$m	A$m
6. taxation a. Income Tax Expense Recognised in the Income Statement Current tax (Beneft)/expense Currentyear 2.4	151.0
Adjustments forprioryears (31.4)	(3.9)
Benefts of tax losses recognised (46.8)	(14.2)
(75.8)	132.9
deferred tax expense/(Beneft) Origination and reversal of temporarydifferences 112.0	(98.1)
Temporarydifferences recognised/recovered (46.7)	(117.9)
Net tax losses(recognised)/utilised (1.4)	102.3
Change in tax rate 0.1	3.4
Other 33.8	(3.2)
97.8	(113.5)
total income tax expense 22.0	19.4
reconciliation of effective tax rate Proft before tax 574.5	522.5
Income tax using the domestic corporation tax rate 30% 172.4 Resolution ofprioryear tax claim (21.6)	156.8
Non assessable and exempt income (38.8)	(19.8)
Net recognition of tax losses through income tax expense (17.0)	(4.8)
Temporarydifferences recognised through income tax expense (46.7)	(117.9)
Utilisation of capitalgains on disposal of investments (31.9)	(12.4)
Effect of tax rates in foreignjurisdictions 11.4	3.8
Other (5.8)	13.7
Income tax expense 22.0	19.4

annual report 2013 Lend Lease 135

June 2013 A$m June 2012 A$m	June 2013 A$m June 2012 A$m	June 2013 A$m June 2012 A$m
Deferred Tax Recognised Directly in Equity Relating to: Equityissue costs 1.7 1.7
Fair value revaluation reserve 10.0 (4.1)
Hedgingreserve 0.2
Foreign currencytranslation reserve on equityaccounted investments 0.6
Non controllinginterest acquisition reserve	(19.3)
total deferred tax beneft recognised directly in equity	(7.6) (1.6)
	June 2013	June 2012
	Before Tax A$m Tax (Expense)/ Beneft A$m Net of Tax A$m Before Tax A$m Tax (Expense)/ Beneft A$m Net of Tax A$m
b. Tax Effect Relating to Other Comprehensive Income Movements in fair value revaluation reserve	33.1 (10.0) 23.1 (22.4) 4.1 (18.3)
Movements in hedgingreserve	10.4 10.4 (43.3) (0.2) (43.5)
Movements in foreign currencytranslation reserve	34.9 34.9 52.8 (0.6) 52.2
Movements in non controllinginterest acquisition reserve	(3.2) 19.3 16.1 (5.6) 2.4 (3.2)
total other comprehensive income net of tax	75.2 9.3 84.5 (18.5) 5.7 (12.8)

	June 2013	June 2012
	Assets A$m Liabilities A$m Assets A$m Liabilities A$m
c. Deferred Tax Assets and Liabilities recognised deferred tax assets and Liabilities Deferred tax assets and liabilities are attributable to the following: Loans and receivables	9.3 (155.5) 12.6 (16.1)
Inventories	51.1 (155.3) 37.9 (326.4)
Other fnancial assets	3.7 (57.2) 3.9 (21.5)
Other assets	(0.3) 1.0 (2.0)
Equityaccounted investments	1.4 (26.0) 4.2 (24.6)
Investmentproperties	(66.2) (41.8)
Property,plant and equipment	19.2 (12.2) 17.8 (8.3)
Intangible assets	(0.6) (7.9)
Defned beneftplan assets	(18.2) (15.2)
Trade and otherpayables	135.6 (7.0) 231.7 (0.2)
Resident and accommodation bond liabilities	152.7 84.9
Provisions	97.1 98.1
Borrowings and fnancingarrangements	0.6
Other fnancial liabilities	6.3 3.7
Unused revenue tax losses recognised	133.4 37.6
Unused capital tax losses recognised	10.4
Items with a tax base but no carryingvalue	30.7 (5.9) 21.1 (6.8)
total deferred tax assets/(liabilities)	651.5 (504.4) 554.5 (470.8)
deferred tax set off	(451.6) 451.6 (406.3) 406.3
net deferred tax assets/(liabilities)	199.9 (52.8) 148.2 (64.5)

136 annual report 2013 Lend Lease

notes to the ConsoLIdated FInanCIaL stateMents CONTINUED

				Other/
	1 July	Recognised	Recognised	Foreign	30 June
	2012	in Income	in Equity	Exchange	2013
	A$m	A$m	A$m	A$m	A$m
6. taxationcontinued c. Deferred Tax Assets and Liabilities continued recognised deferred tax assets and Liabilities continued Movement in temporary differences during the fnancial year: June 2013 Loans and receivables	(3.5)	(145.3)		2.6	(146.2)
Inventories	(288.5)	199.2		(14.9)	(104.2)
Other fnancial assets	(17.6)	(23.5)	(10.0)	(2.4)	(53.5)
Other assets	(1.0)	0.7			(0.3)
Equityaccounted investments	(20.4)	(5.5)		1.3	(24.6)
Investmentproperties	(41.8)	(24.4)			(66.2)
Property,plant and equipment	9.5	(2.9)		0.4	7.0
Intangible assets	(7.9)	7.3			(0.6)
Defned beneftplan assets	(15.2)	(2.6)		(0.4)	(18.2)
Trade and otherpayables	231.5	(101.1)		(1.8)	128.6
Resident and accommodation bond liabilities	84.9	(6.7)		74.5	152.7
Provisions	98.1	0.5		(1.5)	97.1
Borrowings and fnancingarrangements		0.6			0.6
Other fnancial liabilities	3.7	(0.7)		3.3	6.3
Unused revenue tax losses recognised	37.6	3.2		92.6	133.4
Unused capital tax losses recognised		10.4			10.4
Items with a tax base but no carryingvalue	14.3	(7.0)	17.6	(0.1)	24.8
total deferred tax assets/(liabilities)	83.7	(97.8)	7.6	153.6	147.1
				Other/
	1 July	Recognised	Recognised	Foreign	30 June
	2011	in Income	in Equity	Exchange	2012
	A$m	A$m	A$m	A$m	A$m
June 2012
Loans and receivables	10.8	(14.1)	(0.4)	0.2	(3.5)
Inventories	(249.9)	(30.7)		(7.9)	(288.5)
Other fnancial assets	(22.0)	1.1	4.1	(0.8)	(17.6)
Other assets	1.5	(2.4)		(0.1)	(1.0)
Equityaccounted investments	(65.9)	46.7	(0.4)	(0.8)	(20.4)
Non current asset held for sale	(140.2)	144.2		(4.0)
Investmentproperties	(36.4)	(5.4)			(41.8)
Property,plant and equipment	9.2	(0.8)		1.1	9.5
Intangible assets	(1.1)	(6.8)			(7.9)
Defned beneftplan asset	(9.7)	(5.2)		(0.3)	(15.2)
Trade and otherpayables	229.3	(0.2)		2.4	231.5
Resident and accommodation bond liabilities	16.3	68.6			84.9
Provisions	87.6	18.6		(8.1)	98.1
Other fnancial liabilities	2.0	1.7			3.7
Unused revenue tax losses recognised	138.2	(105.1)		4.5	37.6
Items with a tax base but no carryingvalue	19.3	3.3	(1.7)	(6.6)	14.3
total deferred tax assets/(liabilities)	(11.0)	113.5	1.6	(20.4)	83.7

annual report 2013 Lend Lease 137

	June 2013	June 2012
	A$m	A$m
unrecognised deferred tax assets
Deferred tax assets have not been recognised in respect of the following items:
Capital losses	46.7	71.2
Revenue losses	57.5	89.0
Deductible temporarydifferences	94.3	157.6
total unrecognised deferred tax assets	198.5	317.8

Of the unrecognised deferred tax asset of A$198.5 million, only A$10.5 million expires by 2033. The remainder of the unrecognised deferred tax asset has no expiry date.

asset has no expiry date.
	CoMpanY/trust
	Cents Per Share/Unit June 2013 A$m June 2012 A$m
7. dividends/distributions1 parent Company Interim dividend December 2012 –paid 27 March 2013	21.8 125.5
December 2011 –paid 30 March 2012	16.0 91.5
Lend Lease trust Interim distribution3 December 2012 –paid 27 March 2013	0.2 0.9
parent Company Final dividend June 2013 – declared subsequent to reportingdate2	19.0 109.4
June 2012 –paid 28 September 2012	22.0 126.0
Lend Lease trust Final distribution3 June 2013 –provided for(payable 27 September 2013)	1.0 5.7
	241.5 217.5

1 Dividends/distributions were not franked in the current and prior year.

2 No provision for this dividend has been recognised in the statement of financial position at 30 June 2013, as it was declared after the end of the financial year. 3 No Lend Lease Trust distribution was declared for the periods ended 31 December 2011 and 30 June 2012.

Dividend Franking

The amount of franking credits available for use in subsequent reporting periods as at 30 June 2013 is A$13.4 million, based on a 30% tax rate (30 June 2012: A$25.4 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. The Group has estimated future claims with the Australian Taxation Office in relation to the year ended 30 June 2013, and prior years, which are not reflected in the above franking account balance. Should these claims be successful, this will result in the franking account balance being reduced as a consequence.

	June 2013	June 2012
	Shares/ Securities Excluding Treasury Securities Shares/ Securities on Issue Shares/ Securities Excluding Treasury Securities Shares/ Securities on Issue
8. earnings per share/stapled security Basic/Diluted Earnings Per Share (EPS) Proft attributable to members of Lend Lease Corporation Limited used in calculatingbasic/diluted EPS A$m	541.0 541.0 501.4 501.4
Weighted average number of ordinaryshares m	542.5 574.3 540.6 571.8
Basic/diluted EPS cents	99.7 94.2 92.7 87.7
Basic/Diluted Earnings Per Stapled Security (EPSS) Proft attributable to securityholders of Lend Lease Group used in calculatingbasic/diluted EPSS A$m	551.6 551.6 501.4 501.4
Weighted average number of stapled securities m	542.5 574.3 540.6 571.8
Basic/diluted EPSS cents	101.7 96.0 92.7 87.7

138 annual report 2013 Lend Lease

notes to the ConsoLIdated FInanCIaL stateMents CONTINUED

	June 2013	June 2012
	A$m	A$m
9. Cash and Cash equivalents
Cash	523.0	560.8
Short term investments	1,015.4	397.1
total cash and cash equivalents	1,538.4	957.9

Short term investments earned variable rates of interest which averaged 3.5% per annum during the year ended 30 June 2013 (30 June 2012: 3.9%).

	June 2013	June 2012
	A$m	A$m
10. Loans and receivables
Current
Trade debtors	1,545.0	1,459.1
_Less:_Impairment	(20.7)	(21.7)
	1,524.3	1,437.4
Relatedparties	52.5	85.3
Retentions	191.2	172.8
Other receivables	138.6	182.5
_Less:_Impairment	(9.8)	(3.5)
total current	1,896.8	1,874.5
Non Current
Relatedparties	173.0	272.4
_Less:_Impairment	(87.6)	(95.6)
Retentions	66.3	48.2
Other receivables	511.1	106.5
_Less:_Impairment		(1.3)
total non current	662.8	330.2
total loans and receivables	2,559.6	2,204.7

As at the reporting date, A$1,331.6 million of the trade debtors were current (30 June 2012: A$1,188.0 million) and A$213.4 million were past due (30 June 2012: A$271.1 million). Of the past due amount, A$192.7 million was not impaired (30 June 2012: A$249.4 million). ‘Past due’ is defined under accounting standards to mean any amount outstanding for one or more days after the contractual due date. Of the total trade debtors, 7.0% (30 June 2012: 7.8%) are aged greater than 90 days. Other than trade debtors, no other loans and receivables are considered past due at 30 June 2013 (30 June 2012: A$nil).

	June 2013	June 2012
	A$m	A$m
Impairment
Carryingamount at beginningof fnancialyear	122.1	150.4
Bad and doubtful debts impairment loss net ofprovisions(written back)/raised	(0.3)	0.9
Other movements(includingforeign exchange rate movements)	(3.7)	(29.2)
Carrying amount at end of fnancialyear	118.1	122.1
total impairment as apercentage of total loans and receivables	4.6%	5.5%

The credit quality of all loans and receivables, including those neither past due nor impaired, is assessed and monitored on an ongoing basis.

To determine the impairment provision for the financial year, the Group considers how economic and market conditions will affect the creditworthiness 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 equity accounted investment.

annual report 2013 Lend Lease 139

		June 2013	June 2012
	Note	A$m	A$m
11. Inventories
Current
Developmentproperties	11a	411.4	597.2
Construction work inprogress	11b	612.0	505.8
Other		26.7	19.2
total current		1,050.1	1,122.2
Non Current
Developmentproperties	11a	1,840.9	1,696.3
total inventories		2,891.0	2,818.5
a. Development Properties
Australia		1,595.1	1,669.1
Europe		628.7	590.0
Americas		28.5	34.4
total developmentproperties		2,252.3	2,293.5
b. Construction Work in Progress
Construction work in progress comprises:
Contract costs incurred to date		66,411.3	64,388.9
Proft recognised to date		3,143.2	3,095.6
		69,554.5	67,484.5
_Less:_Progress billings received and receivable on contracts		(69,726.3)	(67,780.4)
net construction work inprogress		(171.8)	(295.9)
Costs in excess of billings – inventories		612.0	505.8
Billings in excess of costs – tradepayables	18	(783.8)	(801.7)
		(171.8)	(295.9)
12. equity accounted Investments1
Associates
Investment in associates		94.9	88.0
_Less:_Impairment		(10.5)	(14.2)
total associates		84.4	73.8
Joint Ventures
Investment injoint ventures		522.3	413.4
_Less:_Impairment		(21.2)	(17.0)
totaljoint ventures		501.1	396.4
total equity accounted investments		585.5	470.2

1 There have been reclassifications between associates and joint ventures in the period. Comparative information has also been reclassified.

140 annual report 2013 Lend Lease

notes to the ConsoLIdated FInanCIaL stateMents CONTINUED

	Interest	share oF proFIt/(Loss)1	net BooK VaLue
	June 2013 % June 2012 % June 2013 A$m June 2012 A$m June 2013 A$m June 2012 A$m
12. equity accounted Investmentscontinued a. Associates australia Lend Lease Real Estate Partners 3	25.0 25.0 10.2 6.7 68.3 62.6
Lend Lease Communities Fund 1	20.8 20.8 (0.2) (1.3) 17.0 16.3
Network Alliance 2	42.0 42.0 11.0 4.6 4.0
Other	0.5 4.2
total australia	21.0 10.0 89.8 83.1
asia Asia Pacifc Investment CompanyNo. 2 Limited3	19.9
total asia	– 19.9 – –
europe Other	4.0 3.9
total europe	– – 4.0 3.9
americas Other	1.4 1.7 1.1 1.0
total americas	1.4 1.7 1.1 1.0
total	22.4 31.6 94.9 88.0
_Less:_Impairment	(10.5) (14.2)
total associates	22.4 31.6 84.4 73.8
b. Joint Ventures2 australia Lend Lease International Towers SydneyTrust	25.0 4.0 89.3
Sunshine Coast UniversityHospital	50.0 1.3 76.9
New Bendigo Hospital	50.0 (0.1) 31.5
Casey2 Joint Venture(Springbank)	50.0 50.0 3.7 5.8 18.3 19.6
Eastern Goldfelds Regional Prison	50.0 (0.3) 16.6
V5 Trust(Convesso)	50.0 50.0 (0.9) 10.6 15.7 54.5
D2G Joint Venture	64.0 64.0 54.2 63.3 11.4 24.8
Baulderstone Leighton Contractors JV	50.0 50.0 11.2 0.1 11.3 0.1
Sitzler Baulderstone Joint Venture	70.0 70.0 14.9 5.5 7.7 0.6
AbigroupGHL Joint Venture	75.0 75.0 7.9 9.3 6.1 1.0
Pyrmont Trust(Jacksons Landing)	50.0 50.0 2.0 4.7 0.3 13.3
Syntheo JV	50.0 50.0 (17.8) 0.4 0.4
Other	28.9 31.3 54.9 73.8
total australia	109.0 131.0 340.0 188.1
asia CDR JV Limited(313@somerset)	25.0 25.0 3.9 3.8 103.6 98.2
LLJV Limited and Triple Eight JV Limited(Jem®)3	25.0 13.7 9.2 77.3
Other	0.1 0.1
total asia	17.7 13.0 103.7 175.5
europe Global Renewables Lancashire Holdings Limited	50.0 50.0 (1.7) 2.7 21.2 3.4
Stratford CityBusiness District Limited	50.0 50.0 0.1 0.4 16.0 5.2
Majadahonda Hospital	25.0 25.0 1.7 2.3 11.2 11.8
Other	2.2 0.8 29.1 28.5
total europe	2.3 6.2 77.5 48.9

annual report 2013 Lend Lease 141

	Interest	share oF proFIt/(Loss)1	net BooK VaLue
	June 2013 % June 2012 % June 2013 A$m June 2012 A$m June 2013 A$m June 2012 A$m
americas Other	1.3 1.0 1.1 0.9
total americas	1.3 1.0 1.1 0.9
total	130.3 151.2 522.3 413.4
Less: Impairment	(21.2) (17.0)
totaljoint ventures	130.3 151.2 501.1 396.4
total equity accounted investments	152.7 182.8 585.5 470.2

• 1 Reflects the contribution to the Group’s profit, and is after tax paid by the equity accounted investment vehicles themselves, where relevant. However, for various equity accounted investments, the share of tax is paid by the Group and is included in the Group’s current tax expense (refer Note 6 ‘Taxation’).

• 2 Where the Group has an ownership interest in a joint venture greater than 50% but does not have the capacity to control financial and operating decisions, the joint venture is not consolidated.

3 Asia Pacific Investment Company No. 2 Limited interest was sold down during the prior year and Jem[®] was sold in the current year.

	June 2013	June 2012
	Associates A$m Joint Ventures A$m Associates A$m Joint Ventures A$m
c. Associates and Joint Ventures Additional Disclosures Lend Lease’s share of proft or Loss Revenue	72.5 1,213.1 93.9 1,570.4
Fair value revaluations	5.7 10.0 15.6 5.0
Expenses	(55.9) (1,104.0) (76.6) (1,420.6)
share ofproft before tax	22.3 119.1 32.9 154.8
Income tax beneft/(expense)	0.1 (1.3) (1.3) (4.8)
share ofproft after tax	22.4 117.8 31.6 150.0
other adjustments Adjustments due to differences in accounting policies	(1.5) 0.9
Movement in share of unrecognised losses	11.6 (7.0)
Fair value adjustments/other	2.4 7.3
proft of equity accounted investments	22.4 130.3 31.6 151.2
Lend Lease’s share of statement of Financial position Current assets	34.8 592.9 26.5 770.3
Non current assets	117.8 1,386.5 118.2 1,293.5
total assets	152.6 1,979.4 144.7 2,063.8
Current borrowings	98.5
Current other liabilities	12.0 403.3 12.0 390.2
Non current borrowings	43.9 819.6 45.3 896.9
Non current other liabilities	375.9 394.9
total liabilities	55.9 1,598.8 57.3 1,780.5
share of net assets	96.7 380.6 87.4 283.3
other adjustments Impairment	(10.5) (21.2) (14.2) (17.0)
Unrecognised share of losses	49.9 38.3
Other	(1.8) 91.8 0.6 91.8
net assets attributable to equity accounted investments	84.4 501.1 73.8 396.4
Commitments Share of capital expenditure and lease commitments contracted but not provided for and payable are as follows: Due within oneyear	0.4 5.1
Due between one and fveyears	0.2 0.7
Due later than fveyears

142 annual report 2013 Lend Lease

notes to the ConsoLIdated FInanCIaL stateMents CONTINUED

	June 2013	June 2012
	A$m	A$m
13. Investment properties
Retirement living properties	3,791.1	3,211.4
Retailproperties	10.0	10.0
Assets under construction	222.7	193.6
total investmentproperties	4,023.8	3,415.0
Reconciliations
Reconciliations of the carrying amount for investment properties are as follows:
Carryingamount at beginningof fnancialyear	3,415.0	3,216.0
Acquisition/(disposal)of investmentproperties	373.8	(63.5)
Capital expenditure	146.2	123.1
Fair valuegain recognised through the Income Statement	25.6	38.1
Increase attributable to residents’ capital	21.2	68.9
Foreign exchange rate/other movements	42.0	32.4
Carrying amount at end of fnancialyear	4,023.8	3,415.0
Leases as Lessor
The future minimum lease payments receivable from retail property tenants under non cancellable operating
leases are as follows:
Less than oneyear	0.2	1.1
Between one and fveyears		3.2
Later than fveyears		1.2
total future minimum leasepayments receivable	0.2	5.5

Valuations

Refer to Note 1.8 ‘Investment Properties’ for the basis of valuation of investment properties. The key assumptions used in the fair value assessments, including those classified as assets under construction, have been derived from market evidence and are summarised as follows.

retirement Living properties

For retirement living properties, the key long term assumptions adopted in the basis of valuation at the reporting date included:

• n Weighted average discount rate of 13.2% (June 2012: 13.2%);

• n Weighted average future growth rate of 3.9% (June 2012: 3.9%); and,

• n Average length of stay: 11 years for independent living units (June 2012: 11 years) and six years for serviced apartments (June 2012: six years).

For retirement living properties included in assets under construction, the assumptions adopted in determining the fair values at 30 June 2013 included discount rates between 14% and 17% (June 2012: 14% and 17%) based on the stage of development and the assessed project risk, and a weighted average growth rate of 3.6% (June 2012: 3.6%).

annual report 2013 Lend Lease 143

	June 2013	June 2012
	A$m	A$m
14. other Financial assets
Current Measured at Fair Value
available for sale	1.2	10.2
Fair Value through proft or Loss – designated at Initial recognition
Negotiable instruments	72.3	60.9
Derivatives	24.3	6.5
total current	97.8	77.6
Non Current Measured at Fair Value
available for sale
Australian Prime PropertyFund	50.6	50.1
Lend Lease Core Plus Fund	41.3	43.5
Lend Lease Retail Partnership	48.8	43.5
Lend Lease Asia Retail Investment Fund	32.5	30.6
Lend Lease Asia Retail Investment Fund 3	55.7	24.1
ParkwayParade PartnershipLimited	27.6	23.8
Other	82.6	74.6
	339.1	290.2
Fair Value through proft or Loss – designated at Initial recognition
Unlisted equityinvestments	105.5	36.9
held to Maturity	8.5	6.2
total non current	453.1	333.3
total other fnancial assets	550.9	410.9
15. property, plant and equipment
Land, buildings and leasehold improvements	141.1	407.2
_Less:_Accumulated depreciation and impairment	(50.7)	(63.4)
	90.4	343.8
Plant and equipment	625.1	620.5
_Less:_Accumulated depreciation and impairment	(315.2)	(294.9)
	309.9	325.6
totalproperty, plant and equipment	400.3	669.4
Reconciliations
Reconciliations of the carrying amounts for each class of property, plant and equipment are as follows:
Land, Buildings and Leasehold Improvements
Carryingamount at beginningof fnancialyear1	343.8	307.1
Additions	17.3	48.8
Disposals	(256.3)	(0.2)
Depreciation	(15.5)	(13.1)
Effect of foreign exchange rate/other movements	1.1	1.2
Carrying amount at end of fnancialyear	90.4	343.8

1 The carrying amount at 1 July 2011 (opening June 2012 balance) of A$307.1 million represents A$360.9 million of costs and A$53.8 million of accumulated depreciation and impairment.

144 annual report 2013 Lend Lease

notes to the ConsoLIdated FInanCIaL stateMents CONTINUED

		June 2013	June 2012
	Note	A$m	A$m
15. property, plant and equipmentcontinued
Reconciliations continued
plant and equipment
Carryingamount at beginningof fnancialyear1		325.6	288.1
Additions		75.5	97.3
Disposals		(30.0)	(3.1)
Depreciation		(65.4)	(57.8)
Effect of foreign exchange rate/other movements		4.2	1.1
Carrying amount at end of fnancialyear		309.9	325.6

1 The carrying amount at 1 July 2011 (opening June 2012 balance) of A$288.1 million represents A$548.8 million of costs and A$260.7 million of accumulated depreciation and impairment.

		June 2013	June 2012
	Note	A$m	A$m
16. Intangible assets
Goodwill	16a	1,148.5	1,134.8
Aged care bed licences	16b		181.3
Management agreements	16c	55.2	70.7
Other intangibles	16d	58.8	18.3
total intangible assets		1,262.5	1,405.1
a. Goodwill
Construction		1,124.3	1,112.3
Development		24.2	22.5
totalgoodwill		1,148.5	1,134.8
Reconciliations
Reconciliations of the carrying amounts for each category of goodwill are as follows:
Construction
Carryingamount at beginningof fnancialyear		1,112.3	1,056.3
Disposal of consolidated entities		(6.1)
Fair value adjustment on fnalisation ofgoodwill on acquisition			42.0
Effect of foreign exchange rate/other movements		18.1	14.0
Carrying amount at end of fnancialyear		1,124.3	1,112.3
development
Carryingamount at beginningof fnancialyear		22.5	21.0
Effect of foreign exchange rate		1.7	1.5
Carrying amount at end of fnancialyear		24.2	22.5

annual report 2013 Lend Lease 145

Goodwill Allocation

Goodwill relating to the Construction business is allocated to cash generating units (‘CGUs’) identified according to regions as set out below.

	June 2013	June 2012
	A$m	A$m
Construction
Australia	743.5	743.8
Europe	222.1	220.4
Americas	151.3	140.7
Asia	7.4	7.4
totalgoodwill	1,124.3	1,112.3

Impairment tests and Key assumptions used – Construction

The recoverable amount of the Construction CGUs is determined based on value in use (‘VIU’) calculations. For the 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.

No impairment arose as a result of the review of goodwill for the Construction CGUs for the year ended 30 June 2013. Based on information available and market conditions at 30 June 2013, a reasonably foreseeable change in the assumptions made in this assessment would not result in impairment of Construction goodwill.

The following describes the key assumptions on which management has based its cash flow projections when determining VIU relating to the Construction CGUs.

Cash Flows

The VIU calculations use pre tax cash flow projections based on actual operating results, and financial forecasts covering a five year period which have been approved by management. These 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% (June 2012: 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 rates applied to the cash flow projections vary between 14.0% and 20.0% (June 2012: between 14.5% and 19.5%). The Group’s weighted average cost of capital is used as a starting 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 pre tax.

	June 2013	June 2012
	A$m	A$m
b. Aged Care Bed Licences
Reconciliation
Reconciliation of the carrying amounts of aged care bed licences is as follows:
Carryingamount at beginningof fnancialyear	181.3	168.6
Additions		12.7
Disposals	(181.3)
Carrying amount at end of fnancialyear	–	181.3

The Aged Care Bed Licences were sold during the year ended 30 June 2013. Refer to Note 26c ‘Consolidated Entities – Disposals’.

146 annual report 2013 Lend Lease

notes to the ConsoLIdated FInanCIaL stateMents CONTINUED

	June 2013	June 2012
	A$m	A$m
16. Intangible assetscontinued
c. Management Agreements
Management agreements	74.8	86.6
_Less:_Accumulated amortisation and impairment	(19.6)	(15.9)
total management agreements	55.2	70.7
Reconciliation
Reconciliation of the carrying amounts of management agreements is as follows:
Carryingamount at beginningof fnancialyear1	70.7	60.1
Additions		13.7
Disposals	(9.1)
Amortisation	(2.4)	(3.1)
Other movements	(4.0)
Carrying amount at end of fnancialyear	55.2	70.7
d. Other Intangibles
Other intangibles	93.8	46.9
Less: Accumulated amortisation and impairment	(35.0)	(28.6)
total other intangibles	58.8	18.3
Reconciliation
Reconciliation of the carrying amounts of other intangibles is as follows:
Carryingamount at beginningof fnancialyear2	18.3	13.1
Additions	46.0	9.2
Amortisation	(5.4)	(4.4)
Effect of foreign exchange rate/other movements	(0.1)	0.4
Carrying amount at end of fnancialyear	58.8	18.3

1 The carrying amount at 1 July 2011 (opening June 2012 balance) of A$60.1 million represents A$72.9 million of costs and A$12.8 million of accumulated amortisation.

2 The carrying amount at 1 July 2011 (opening June 2012 balance) of A$13.1 million represents A$37.9 million of costs and A$24.8 million of accumulated amortisation and impairment.

annual report 2013 Lend Lease 147

		June 2013	June 2012
	Note	A$m	A$m
17. defned Beneft plan asset
recognised asset for defned beneft obligations
Lend Lease Superannuation Plan(Australia)	17a	28.9	32.0
Lend Lease Construction UK Pension Scheme	17b	41.5	23.2
total recognised asset		70.4	55.2
a. Lend Lease Superannuation Plan (Australia)
i. statement of Financial position amounts
The amounts recognised in the Statement of Financial Position are determined as follows:
Fair value ofplan assets		123.7	114.8
Present value of defned beneft obligations		(124.2)	(130.4)
Unrecognised actuarial losses		29.4	47.6
recognised asset for defned beneft obligations		28.9	32.0
ii. reconciliation of the Fair Value of plan assets
Fair value ofplan assets at beginningof fnancialyear		114.8	124.3
Expected return onplan assets		7.1	9.6
Actuarialgains/(losses)		5.9	(13.5)
Contributions byGroupcompanies		5.8	6.0
Taxes andpremiumspaid		(0.9)	(0.9)
Accumulation insurancepremium met from surplus		(1.1)	(1.2)
Beneftspaid		(7.9)	(9.5)
Fair value ofplan assets at end of fnancialyear		123.7	114.8
iii. reconciliation of the present Value of Funded obligations
Present value of funded obligations at beginningof fnancialyear		130.4	115.3
Current service cost		6.0	6.2
Interest cost on beneft obligation		2.5	6.4
Actuarial(gains)/losses		(4.8)	14.1
Taxes andpremiumspaid		(0.9)	(0.9)
Accumulation insurancepremium met from surplus		(1.1)	(1.2)
Beneftspaid		(7.9)	(9.5)
present value of funded obligations at end of fnancial year		124.2	130.4
iv. expense recognised in the Income statement
Current service cost		6.0	6.2
Interest cost on beneft obligation		2.5	6.4
Expected return onplan assets		(7.1)	(9.6)
Actuarial loss recognised		7.5	1.3
net defned beneft plan expense		8.9	4.3
v. actual return on plan assets		13.0	(4.0)
		June 2013	June 2012
		%	%
vi. Categories of plan assets
Cash		3.0
Equityinstruments1		57.0	57.0
Fixed interest securities		36.0	39.0
Property		4.0	4.0
		100.0	100.0

1 The fair value of plan assets includes Lend Lease securities to the value of A$0.1 million (June 2012: A$0.1 million).

148 annual report 2013 Lend Lease

notes to the ConsoLIdated FInanCIaL stateMents CONTINUED

	June 2013	June 2012
	%	%
17. defned Beneft plan assetcontinued
a. Lend Lease Superannuation Plan (Australia) continued
vii. principal actuarial assumptions
Discount rate(net of tax)	2.9	2.2
Expected rate of return on assets1	7.0	7.0

viii. employer Contributions

For the year ending 30 June 2014, total employer contributions to the plan are expected to be A$5.4 million.

	ConsoLIdated
	June 2013 A$m June 2012 A$m June 2011 A$m June 2010 A$m June 2009 A$m
ix. historical summary Plan assets	123.7 114.8 124.3 119.6 99.9
Defned beneftplan obligation	(124.2) (130.4) (115.3) (108.4) (104.8)
(defcit)/surplus	(0.5) (15.6) 9.0 11.2 (4.9)
Experiencegains/(losses)arisingonplan assets	5.9 (13.5) (0.3) 14.6 (32.9)
Experiencegains/(losses)arisingonplan liabilities	0.2 (4.0) (5.8) 1.4 3.0

1 The expected rate of 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. The returns used for each asset class are net of tax, investment fees and administration expenses.

	June 2013	June 2012
	A$m	A$m
b. Lend Lease Construction UK Pension Scheme
i. statement of Financial position amounts
The amounts recognised in the Statement of Financial Position are determined as follows:
Fair value ofplan assets	738.2	641.6
Present value of defned beneft obligations	(752.8)	(682.8)
Unrecognised actuarial losses	56.1	64.4
recognised asset for defned beneft obligations	41.5	23.2
ii. reconciliation of the Fair Value of plan assets
Fair value ofplan assets at beginningof fnancialyear	641.6	586.7
Expected return onplan assets	29.9	34.2
Actuarialgains/(losses)	58.2	(5.2)
Contributions byGroupcompanies	16.5	22.5
Beneftspaid	(25.0)	(26.0)
Effect of foreign exchange rate movements	17.0	29.4
Fair value ofplan assets at end of fnancialyear	738.2	641.6
iii. reconciliation of the present Value of Funded obligations
Present value of defned beneft obligations at beginningof fnancialyear	682.8	593.1
Current service cost		5.4
Interest cost on beneft obligation	29.9	31.4
Actuarial losses	49.6	47.4
Beneftspaid	(25.0)	(26.0)
Effect to foreign exchange rate movements	15.5	31.5
present value of funded obligations at end of fnancial year	752.8	682.8
iv. expense recognised in the Income statement
Current service cost		5.4
Interest cost on beneft obligation	29.9	31.4
Expected return onplan assets	(29.9)	(34.2)
net defned beneft plan expense	–	2.6
v. actual return on plan assets	95.2	30.3

annual report 2013 Lend Lease 149

	June 2013	June 2012
	%	%
vi. Categories of plan assets
Equityinstruments	39.0	37.0
Debt instruments	42.0	46.0
Other assets	19.0	17.0
	100.0	100.0
vii. principal actuarial assumptions
Discount rate(net of tax)	4.5	4.8
Expected rate of return on assets1	5.7	5.7

viii. employer Contributions

For the year ending 30 June 2014, total employer contributions to the plan are expected to be A$17.9 million. In addition, a deficit contribution of A$12.6 million is expected to be paid.

	ConsoLIdated
	June 2013 A$m June 2012 A$m June 2011 A$m June 2010 A$m June 2009 A$m
ix. historical summary Plan assets	738.2 641.6 586.7 592.5 559.2
Defned beneftplan obligation	(752.8) (682.8) (593.1) (671.2) (691.2)
(defcit)	(14.6) (41.2) (6.4) (78.7) (132.0)
Experiencegains/(losses)arisingonplan assets	58.2 (5.2) 41.4 62.8 (115.5)
Experiencegains/(losses)arisingonplan liabilities	1.7 (2.8) (4.3) 17.2 (27.4)

• 1 The long term rate of return on the pension plan assets is determined by looking at the expected long term return on each asset class based on analysis of historical markets. Assets with higher volatility are assumed to generate higher returns consistent with widely accepted capital market principles. The expected returns are net of investment manager expenses. The overall expected rate of return on assets is derived by weighting the expected rate of return for each asset over the asset allocation for the scheme.

		June 2013	June 2012
	Note	A$m	A$m
18. trade and other payables
Current
Trade creditors		2,308.3	2,388.6
Construction revenue – amounts due to customers1	11b	783.8	801.7
Unearnedpremium reserve2			2.7
Insurance claim reserve2		16.4	12.2
Relatedparties		94.0	78.4
Retentions and deferredpayments		373.6	364.9
Other		121.0	76.7
total current		3,697.1	3,725.2
Non Current
Insurance claim reserve2		18.9	23.9
Relatedparties		86.6
Retentions and deferredpayments		386.8	419.0
Other		382.0	149.3
total non current		874.3	592.2
total trade and otherpayables		4,571.4	4,317.4

• 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.

150 annual report 2013 Lend Lease

notes to the ConsoLIdated FInanCIaL stateMents CONTINUED

	June 2013	June 2012
	A$m	A$m
19. resident and accommodation Bond Liabilities
Current
Gross resident liabilities	3,032.3	2,575.5
Deferred management fees receivable on owned sites	(375.5)	(325.2)
total resident liabilities1	2,656.8	2,250.3
Accommodation bond liabilities2		172.6
total resident and accommodation bond liabilities3	2,656.8	2,422.9

• 1 For retirement village properties, deferred management fees receivable on owned sites are offset against the gross resident liabilities, as these amounts are settled net in the same transaction.

• 2 Accommodation bond liabilities are A$nil as at 30 June 2013 due to the sale of the Aged Care business in March 2013.

• 3 Resident and accommodation bond liabilities are required to be classified as current liabilities under the AASBs, as residents may depart the accommodation at any time, notwithstanding that history has shown that residents stay for an average period of 11 years (30 June 2012: 11 years) in independent living units (ILU) and six years (30 June 2012: six years) in serviced apartments (SA). Retirement village total resident liabilities of A$2,656.8 million (30 June 2012: A$2,250.3 million), which is net of deferred management fees receivable, are repayable out of the amounts paid to the Group by incoming retirement village residents for the right to occupy retirement living and aged care properties (comprising both ILU and SA). The gross value of these retirement living properties, which are classified as non current assets, was A$3,791.1 million at 30 June 2013 (30 June 2012: A$3,211.4 million) (refer Note 13 ‘Investment Properties’). The fair value of retirement living properties was A$1,055.9 million (30 June 2012: A$912.5 million), representing the gross investment property value, less resident liabilities and related deferred revenue.

	June 2013	June 2012
	A$m	A$m
20. Borrowings and Financing arrangements
a. Borrowings – Measured at Amortised Cost
Current
Commercial notes		100.0
non Current
Commercial notes	1,295.0	677.2
Bank credit facilities	681.2	579.9
total non current	1,976.2	1,257.1
total borrowings	1,976.2	1,357.1
b. Finance Facilities
The Group has access to the following lines of credit:
Commercial notes
Facilityavailable	1,295.0	777.2
Amount of facilityused	(1,295.0)	(777.2)
amount of facility unused	–	–
Bank Credit Facilities
Facilityavailable	1,747.2	1,786.8
Amount of facilityused	(681.2)	(579.9)
amount of facility unused	1,066.0	1,206.9
Bank overdrafts
Facilityavailable	33.4	35.6
Amount of facilityused
amount of facility unused	33.4	35.6

annual report 2013 Lend Lease 151

Commercial notes include £300.0 million of 6.125% annual coupon guaranteed notes due in October 2021 that were issued in October 2006 in the UK public bond market; US$200.0 million of guaranteed senior notes at a weighted average coupon rate of 5.69% p.a. issued in the US Private Placement debt market maturing in October of 2015 and 2017; S$275.0 million of Singapore dollar denominated senior unsecured notes at a coupon rate of 4.625% p.a. issued in the Singapore public bond market in July 2012 maturing in July 2017; and Australian dollar denominated senior unsecured medium term notes issued in May 2013 for A$250.0 million at a coupon rate of 5.5% p.a. maturing in November 2018 and A$125.0 million at a coupon rate of 6.0% p.a. maturing in May 2020.

Bank credit facilities include a £330.0 million committed club bank facility in the UK maturing in December 2016 (£165.0 million) and December 2017 (£165.0 million) which was drawn to A$100.0 million at 30 June 2013; a A$975.0 million committed bank facility maturing in July 2014 (A$595.0 million) and July 2016 (A$380.0 million) which was drawn to A$350.0 million at 30 June 2013; and a fully drawn A$225.0 million term facility maturing in December 2015.

The bank overdraft facilities may be drawn at any time and are repayable on demand.

Consistent with prior years, the Group has not defaulted on any obligations of principal or interest in relation to its borrowing and financing arrangements and other financial liabilities (refer Note 22 ‘Other Financial Liabilities’).

Refer to Note 29c ‘Interest Rate Risk’ and Note 29d ‘Liquidity Risk’ for analysis of the management of the Group’s interest rate risk and liquidity risk respectively.

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

		Interest eXposure	Interest eXposure	Interest eXposure				CurrenCY
		Fixed	Floating	Total		A$	US$	£	S$	Total
		A$m	A$m	A$m		A$m	A$m	A$m	A$m	A$m
	June 2013
	Between one and fveyears	436.9	672.4	1,109.3		572.4	214.8	100.0	222.1	1,109.3
More than fveyears		858.1	8.8	866.9		372.1		494.8		866.9
total		1,295.0	681.2	1,976.2		944.5	214.8	594.8	222.1	1,976.2
	June 2012
	Less than oneyear	100.0		100.0			100.0			100.0
	Between one and fveyears	174.6	571.0	745.6		571.0	174.6			745.6
	More than fveyears	502.6	8.9	511.5			25.0	486.5		511.5
	total	777.2	579.9	1,357.1		571.0	299.6	486.5	–	1,357.1

	June 2013	June 2012
	A$m	A$m
21. provisions
Current
Employee benefts	186.0	185.1
Maintenance and warranty1	30.7	17.5
Restructure(includingemployee terminations)	14.3	17.6
Other	52.2	56.4
total current	283.2	276.6
Non Current
Employee benefts	24.5	27.3
Other	46.2	47.5
total non current	70.7	74.8
totalprovisions	353.9	351.4

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.

152 annual report 2013 Lend Lease

notes to the ConsoLIdated FInanCIaL stateMents CONTINUED

21. provisions continued

Reconciliations

Reconciliations of the carrying amounts of each class of provision, except for employee benefits, are as follows:

June 2013	June 2012
A$m	A$m
Current Maintenance and Warranty Carryingamounts at beginningof fnancialyear 17.5	16.0
Provisions raised duringfnancialyear 12.6	6.4
Payments made/utilisation duringfnancialyear (2.5)	(7.4)
Effect of foreign exchange rate/other movements 3.1	2.5
Carrying amount at end of fnancialyear 30.7	17.5
restructure (Including employee terminations) Carryingamounts at beginningof fnancialyear 17.6	31.3
Provisions raised duringfnancialyear 9.4	10.6
Payments made/utilisation duringfnancialyear (11.8)	(26.2)
Effect of foreign exchange rate/other movements (0.9)	1.9
Carrying amount at end of fnancialyear 14.3	17.6
other Carryingamounts at beginningof fnancialyear 56.4	37.1
Provisions raised duringfnancialyear 2.8	18.3
Payments made/utilisation duringfnancialyear (27.4)	(8.7)
Effect of foreign exchange rate/other movements 20.4	9.7
Carrying amount at end of fnancialyear 52.2	56.4
Non Current other Carryingamounts at beginningof fnancialyear 47.5	50.1
Provisions raised duringfnancialyear 8.0	0.4
Payments made/utilisation duringfnancialyear (12.6)	(1.9)
Effect of foreign exchange rate/other movements 3.3	(1.1)
Carrying amount at end of fnancialyear 46.2	47.5
June 2013	June 2012
A$m	A$m
22. other Financial Liabilities Current Derivatives (measured at fair value) Forward foreign exchange contracts	4.1
Interest rate swapcontracts 15.9	18.9
Bluewater lease liability (measured at amortised cost) 134.7
Finance leases 31.1	33.8
total current 181.7	56.8
Non Current Bluewater lease liability (measured at amortised cost)	132.5
Finance leases 88.3	89.7
total non current 88.3	222.2
total other fnancial liabilities 270.0	279.0

annual report 2013 Lend Lease 153

	Lend Lease CorporatIon LIMIted	Lend Lease trust
	June 2013 June 2012 June 2013 June 2012
	No. of Shares m A$m No. of Shares m A$m No. of Units m A$m No. of Units m A$m
23. Issued Capital and treasury securities Issued Capital Issued capital at beginningof fnancialyear	572.8 2,077.6 570.9 2,063.7 572.8 0.6 570.9 0.6
Transactions with owners for the year: Distribution Reinvestment Plan	2.7 22.6 1.9 13.9 2.7 1.4 1.9
Recapitalisation of Lend Lease Trust	(500.3) 500.3
Issued capital at end of fnancialyear	575.5 1,599.9 572.8 2,077.6 575.5 502.3 572.8 0.6

Issuance of Securities

Following stapled securityholders’ approval on 15 November 2012, the Company has reallocated capital to LLT by reducing the Company’s share capital by A$500.3 million and applying that amount as additional capital to LLT. This capital reallocation did not affect the number of shares on issue nor the number of units held by each securityholder and did not result in any cash distribution to members.

As at 30 June 2013, the Group had 575.5 million stapled securities on issue equivalent to the number of Lend Lease Corporation shares and Lend Lease Trust units on issue as at that date. The issued units of LLT are not owned by the Company and are therefore presented separately in the consolidated Statement of Financial Position within equity.

Security Accumulation Plans

The Group’s Distribution Reinvestment Plan (‘DRP’) was reactivated in February 2011. The last date for receipt of an election notice for participation in the DRP is 11 September 2013. The issue price is the arithmetic average of the daily volume weighted average price of Lend Lease stapled securities traded (on the Australian Securities Exchange) for the period of seven consecutive business days immediately following the record date for determining entitlements to distribution. If that price is less than 50 cents, the issue price will be 50 cents. Stapled securities issued under the DRP rank equally with all other stapled securities on issue.

Terms and Conditions

Issued capital for Lend Lease Corporation Limited comprises ordinary shares fully paid.

A stapled security represents one share in the Company stapled to one unit in LLT.

Stapled securityholders have the right to receive declared dividends from the Company and distributions from LLT and are entitled to one vote per stapled security at securityholders’ meetings. Ordinary stapled securityholders rank after all creditors in repayment of capital.

The Group does not have authorised capital or par value in respect of its issued stapled securities.

	Lend Lease CorporatIon LIMIted	Lend Lease CorporatIon LIMIted
	June 2013 June 2012
	No. of Shares m A$m	No. of Shares m A$m
Treasury Securities1 Balance at beginningof fnancialyear	33.9 111.0 30.9 83.3
Transactions with owners for the year: Treasurysecurities acquired	3.1 26.4 6.3 50.0
Treasurysecurities vested	(2.9) (19.4) (3.3) (22.3)
Balance at end of fnancialyear	34.1 118.0 33.9 111.0

1 Represents unallocated Lend Lease stapled securities held by employee benefit vehicles, including employee security plans, that Lend Lease sponsors. The value reflects the original historical cost to the Group. The consolidated balance represents the stapled securities that are disclosed in the Statement of Financial Position as treasury securities as a reduction of equity.

154 annual report 2013 Lend Lease

notes to the ConsoLIdated FInanCIaL stateMents CONTINUED

		June 2013	June 2012
	Note	A$m	A$m
24. reserves
Fair Value revaluation reserve
Openingbalance at beginningof fnancialyear		21.6	39.9
Comprehensive income for the year
Revaluationgain recognised in equity		26.8	4.6
Revaluationgain transferred to the Income Statement on asset disposal		(0.7)	(23.2)
Fair value hedging		(3.6)
Effect of foreign exchange rate/other movements		0.6	0.3
Closing balance at end of fnancialyear	24a	44.7	21.6
hedging reserve
Openingbalance at beginningof fnancialyear		(88.9)	(45.4)
Comprehensive income for the year
Movements attributable to effective cash fow hedges		14.5	(45.0)
Hedgingloss transferred to the Income Statement on asset disposal		0.1	10.8
Effect of foreign exchange rate/other movements		(4.2)	(9.3)
Closing balance at end of fnancialyear	24b	(78.5)	(88.9)
Foreign Currency translation reserve
Openingbalance at beginningof fnancialyear		(190.6)	(242.8)
Comprehensive income for the year
Foreign currencytranslation(gain)/loss transferred to the Income Statement on asset disposal		(4.6)	7.4
Movements attributable to translation of foreign operations		46.2	44.8
Net investment hedging		(6.7)
Closing balance at end of fnancial year	24c	(155.7)	(190.6)
non Controlling Interest acquisition reserve
Openingbalance at beginningof fnancialyear		(89.5)	(86.3)
Comprehensive income for the year
Movements attributable to recognition of tax asset ongoodwill		19.8
Effect of foreign exchange rate/other movements		(3.7)	(3.2)
Closing balance at end of fnancial year	24d	(73.4)	(89.5)
other reserve
Balance at beginning and end of fnancial year	24e	111.7	111.7
equity Compensation reserve
Openingbalance at beginningof fnancialyear		62.0	60.1
Transactions with owners for the year
Movements attributable to allocation and vestingof securities		11.1	1.9
Closing balance at end of fnancial year	24f	73.1	62.0
other Compensation reserve
Balance at beginning and end of fnancial year	24g	54.4	54.4
total reserves		(23.7)	(119.3)

annual report 2013 Lend Lease 155

Nature and Purpose of Reserves

a. Fair Value revaluation reserve

Unrealised gains or losses arising from changes in the fair value (and foreign exchange rate movements) of non monetary securities classified as available for sale financial assets 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 recognises the foreign currency differences, net of income tax, arising from the translation of foreign operations, the translation of transactions that hedge the Group’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. non Controlling Interest acquisition reserve

The non controlling interest acquisition reserve arises from the additional acquisition of non controlling interests, subsequent to obtaining control of the acquired 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.

e. other reserve

Other reserve includes realised capital profits on the disposal of assets which did not attract capital gains tax. In addition, gains realised by Lend Lease sponsored employee security plans upon renouncing their rights to participate in the Group’s single bookbuild accelerated renounceable entitlement offer in March 2010 have been recognised in other reserve.

f. 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 securities held by consolidated employee benefit vehicles that are used to meet equity related employee arrangements are recognised in the equity compensation reserve at their original historic cost to the Group.

g. other Compensation reserve

Unallocated Lend Lease securities 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 securities 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 securities and the market value is recognised in retained earnings as a ‘gain/(loss) on utilisation of treasury securities’.

156 annual report 2013 Lend Lease

notes to the ConsoLIdated FInanCIaL stateMents CONTINUED

25. Contingent Liabilities

The Group has the following contingent liabilities:

There are a number of legal claims and exposures that 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, that 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, the Company guarantees the performance of particular Group entities in respect of their obligations. This includes bonding and bank guarantee facilities used primarily by the Construction business as well as performance guarantees for certain Development 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.

A contingent liability exists in relation to the Lend Lease Retirement Benefit Fund. This is disclosed in detail in Note 32b ‘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 (‘WTC’) 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 Lend Lease (US) Construction LMB Inc. formerly known as Bovis Lend Lease LMB, Inc. (‘LL LMB’) (a subsidiary of Lend Lease). Under a previous legal ruling, the litigation proceeded as a consolidated action by individual claimants rather than a class action. The number of claimants who have brought proceedings against LL LMB is approximately 16,337 (comprising 9,845 first named claimants and 6,492 derivative claimants – for example, spouses).

LL LMB is one of the beneficiaries of the approximately US$1.0 billion captive insurance policy (administered by the WTC Captive) established by the US Congress to protect the City of New York and its contractors against liabilities that may arise from the clean-up. LL LMB and other defendants have also benefited from certain project specific insurance.

Additional legal rulings in June 2010 established a settlement agreement which required the WTC Captive to contribute up to a total of US$712.5 million, subject to certain conditions. The agreement did not impose any financial obligations on LL LMB and became fully effective on 5 January 2011.

More than 95% of the plaintiffs who had brought claims against the defendants insured by the WTC Captive have accepted the settlement terms and have ‘opted in’ to the settlement, and all other necessary conditions have been satisfied.

Following the 23 June 2010 settlement and the implementation of the Zadroga Act, many cases have been resolved. As of 30 June 2013, there were only two cases remaining against a WTC Captive insured beneficiary and none against LL LMB. LL LMB may still need to defend claims made by plaintiffs who did not opt into the settlement, who were ineligible, who otherwise declined to participate in the re-opened Victim Compensation Fund, or have or still may appeal the dismissal of their action. LL LMB will also need to defend any new claims that may be filed by plaintiffs who bring claims against LL LMB. Any future litigation would need to proceed through a number of stages before any liability could attach to LL LMB. While any liability of LL LMB for present claims will be covered by insurance, it is not possible to quantify the potential for any future claims or any potential liability thereof at this stage. It is also not possible at this time to ascertain how the limitation of liability in the Zadroga Act will apply to any particular claim against LL LMB going forward; but, as to contractors such as LL LMB, the Act limits liability to those amounts remaining in the WTC Captive Insurance Company plus any insurance coverage that was available and applicable on 11 September 2001 for the particular contractor.

In 2009, LL LMB received subpoenas from both the New York County District Attorney’s Office (‘DA’s Office’) and the US Attorney’s Office for the Eastern District of New York (‘EDNY’). The subpoenas related primarily to investigations being conducted by the EDNY and the DA’s Office around allegations of past payroll and billing practices on construction projects. In early 2011, LL LMB was advised the investigation by the EDNY was expanded to include LL LMB’s use of minority-owned business enterprises. On 23 April 2012, LL LMB agreed to a resolution with the EDNY and the DA’s Office to conclude the criminal investigations and enter into a Deferred Prosecution Agreement (‘Agreement’), for a two year term. Payments to be made in connection with the agreement were fully provided for as at 30 June 2013.

In July 2011, LL LMB received a Civil Investigative Demand (‘CID’) from the US Attorney’s Office for the Southern District of New York (‘SDNY’). The CID related to the same investigation into past payroll and billing practices as the EDNY criminal investigation but was limited to federally funded projects and was civil in nature. A Settlement Agreement was executed with the SDNY on 7 February 2012. All payments required of the settlement were previously fully provided for and have now been made.

On 17 July 2012, the Company’s attorneys were contacted by the New York State Attorney General’s (‘NYSAG’) Office, seeking further information concerning the same investigations by the EDNY and SDNY referred to above with respect to New York State projects. The Company has been cooperating with the inquiry by the NYSAG’s Office, but at this stage the discussions remain preliminary, and it is not possible to quantify what the financial consequences associated with this matter will be.

Additionally, on 2 January 2011, the US President signed the James Zadroga 9/11 Health and Compensation Act of 2010 (‘Zadroga Act’) into law. Among other things, this legislation re-opened the September 11th Victim Compensation Fund, such that current claimants were also potentially eligible to seek compensation from the United States government. The Act also limits the liability of the City of New York and various contractors, including LL LMB, for claims related to the clean-up operations. On September 10, 2012 the US Federal Government added 58 varieties of cancer to the list of 9/11-linked ailments covered by the Zadroga Act.

annual report 2013 Lend Lease 157

26. Consolidated entities

a. Investments in Consolidated Entities

The material consolidated entities of the Group listed below were wholly owned during the current and prior year.

parent entity

Lend Lease Corporation Limited

australia

Abigroup Limited Baulderstone Holdings Pty Limited Capella Capital Lend Lease Pty Limited Lend Lease Communities (Australia) Limited Lend Lease Construction Australia Holdings Pty Limited Lend Lease Construction Australia Pty Limited Lend Lease Development Pty Limited Lend Lease Finance Limited Lend Lease Infrastructure Investments Pty Limited Lend Lease Infrastructure Services (Holdings) Pty Limited Lend Lease International Pty Limited Lend Lease Millers Point Trust Lend Lease Primelife Limited Lend Lease Building Pty Limited (formerly Lend Lease Project Management and Construction (Australia) Pty Limited) Lend Lease Real Estate Investments Limited Lend Lease Responsible Entity Limited Lend Lease Securities and Investments Pty Limited Lend Lease Trust

asia

Lend Lease Singapore Pte Limited

americas

Lend Lease (US) Construction Holdings, Inc. Lend Lease (US) Construction, Inc. Lend Lease (US) Construction LMB, Inc Lend Lease (US) Public Partnerships, LLC Lend Lease Americas, Inc. Lend Lease Americas Holdings, Inc. Lend Lease (US) Capital, Inc.

europe

Lend Lease Construction Holdings (EMEA) Limited Bovis Lend Lease International Limited Lend Lease Construction (EMEA) Limited Bovis Lend Lease Overseas Holdings Limited Blueco Limited Lend Lease Europe Holdings Limited Lend Lease Europe Limited Lend Lease Infrastructure (EMEA) Limited Lend Lease Residential Group (EMEA) Limited Lend Lease Residential (CG) plc Lend Lease Europe Finance plc

b. Acquisitions

During the current and prior year, there were no acquisitions of material consolidated entities.

		Gross
Ownership		Consideration
Interest		Received/
Disposed	Date	Receivable
%	Disposed	A$m
c. Disposals
Year ended June 2013
australia
Aged Care business sale1 100	28 Mar 13	271.7
Lend Lease ConsultingPtyLimited 100	28 Aug12	15.0
europe Bovis Lend Lease Bau GmbH 100	30 Nov 12	1.7
Bovis Lend Lease AG 100	30 Nov 12	0.8
Bovis Lend Lease BV 100	30 Nov 12	2.2
Bovis Lend Lease Portugal 100	30 Nov 12	1.3
Bovis Lend Lease Insaat veproje Yonetimi Limited 100	30 Nov 12	3.6
Bovis Lend Lease Russia 100	1 Mar 13	2.6
Lend Lease GP Retail Ltd 100	27 Jul 12	–
Birmingham Schools PSP Phase 1A Limited 90	25 Jun 13	4.8
Birmingham Schools PSP Phase 1B Limited 90	25 Jun 13	2.9
americas Richmond MOB Owners LLC 100	13 Dec 12	–
Richmond II MOB Owners LLC 100	13 Dec 12	–
Year ended June 2012
Duringtheyear there were no disposals of material consolidated entities

1 The Group sold the Aged Care business on 28 March 2013 to Australian Aged Care Partners which comprised of the sale of assets and disposal of 50 consolidated entities. These entities were not individually material to the Group. Cash proceeds of A$200.0 million and a Promissory Note of A$71.7 million were received for the sale.

158 annual report 2013 Lend Lease

notes to the ConsoLIdated FInanCIaL stateMents CONTINUED

27. 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.

The Group operates a regional management structure focused on four major geographic regions: Australia, Asia, Europe and the Americas, to better support the Group’s integrated model and provide a platform to develop regional investment opportunities. The Group has identified these operating segments based on the internal reports that are reviewed and used by the Group Chief Executive Officer and Managing Director (the chief operating decision maker) in assessing performance and in determining the allocation of resources.

The regional business units operate across four lines of business, as follows.

Development

The Development business involves the development of urban communities, inner-city mixed-use developments, apartments, retirement, retail, commercial and healthcare assets.

Construction

The Construction business involves project management, building, engineering and construction services.

Investment Management

The Investment Management business involves property and infrastructure investment management, property management and asset management and includes the Group’s ownership interests in property and infrastructure investments.

Infrastructure Development

The Infrastructure Development business arranges, manages and invests in Public Private Partnership (PPP) projects.

Segment performance is based on operating profit after tax. Operating profit after tax is used to measure performance as management believes that such information is the most relevant in evaluating the results of certain reportable segments relative to other entities that operate within these industries. The Group does not consider corporate activities to be an operating segment. Financial information regarding the performance of each reportable segment and a reconciliation of these reportable segments to the financial statements is included below.

	operatInG resuLt BeFore taX	InCoMe taX BeneFIt/(eXpense)	operatInG resuLt aFter taX
	June 2013 A$m June 2012 A$m June 2013 A$m June 2012 A$m June 2013 A$m June 2012 A$m
Australia	552.3 435.6 (45.7) (5.7) 506.6 429.9
Asia	126.0 115.2 (13.4) (9.0) 112.6 106.2
Europe	84.1 124.0 15.4 (22.1) 99.5 101.9
Americas	91.7 79.4 (38.0) (43.4) 53.7 36.0
total segment	854.1 754.2 (81.7) (80.2) 772.4 674.0
Reconciling items Corporate activities	(278.5) (228.8) 59.1 62.0 (219.4) (166.8)
Propertyinvestment revaluations	(2.0) (4.8) 0.6 (1.0) (1.4) (5.8)
statutory result attributable to securityholders	573.6 520.6 (22.0) (19.2) 551.6 501.4
External non controllinginterests	0.9 1.9 (0.2) 0.9 1.7
statutory result	574.5 522.5 (22.0) (19.4) 552.5 503.1

The following tables set out other financial information by reportable segment.

annual report 2013 Lend Lease 159

				Share of	Depreciation	Material	Non Current	Group
	Segment	Interest	Interest	Results	and	Non Cash	Segment	Total
	Revenue	Revenue	Expense	EAI1	Amortisation	Items2	Assets3	Assets
	A$m	A$m	A$m	A$m	A$m	A$m	A$m	A$m
Year ended June 2013 Australia	7,734.7	0.9		130.0	(64.0)	126.2	7,251.9	9,697.3
Asia4	640.5			17.7	(2.2)	8.9	136.4	532.3
Europe5	1,143.4	11.3	(0.6)	2.3	(5.4)	(0.1)	988.8	1,685.6
Americas	2,705.0			2.7	(2.5)	11.6	363.5	1,265.8
total segment	12,223.6	12.2	(0.6)	152.7	(74.1)	146.6	8,740.6	13,181.0
Corporate activities	29.3	28.3	(112.3)		(12.8)	22.8	108.0	1,029.4
statutory result	12,252.9	40.5	(112.9)	152.7	(86.9)	169.4	8,848.6	14,210.4
Year ended June 2012
Australia	7,411.3	1.8	(0.3)	141.0	(66.7)	(131.2)	6,470.6	8,882.2
Asia4	740.9			32.9	(0.7)	(3.6)	193.5	599.1
Europe5	1,325.5	16.8	(1.0)	6.2	(4.7)	(9.1)	1,000.7	1,627.8
Americas	2,088.1			2.7	(2.9)	(19.2)	313.5	905.2
total segment	11,565.8	18.6	(1.3)	182.8	(75.0)	(163.1)	7,978.3	12,014.3
Corporate activities	43.9	38.6	(111.9)		(2.4)	(32.1)	81.0	689.2
statutory result	11,609.7	57.2	(113.2)	182.8	(77.4)	(195.2)	8,059.3	12,703.5

• 1 Equity accounted investments.

2 The material non cash items relate to impairments and provisions raised or written back, unrealised foreign exchange movements and investment property fair value gains or losses.

3 Excludes deferred tax assets, financial instruments and pension assets and are based on the geographical location of assets.

4 The majority of revenue and non current assets from Asia are attributable to Singapore.

5 The majority of revenue and non current assets from Europe are attributable to the UK.

Line of Business

The analysis of revenue by line of business is as follows.

Line of Business The analysis of revenue by line of business is as follows.
	reVenue
	June 2013 A$m June 2012 A$m
Development	1,163.9 563.0
Construction	10,548.8 10,475.8
Investment Management	185.7 336.6
Infrastructure Development	325.2 190.4
total segment	12,223.6 11,565.8
Corporate Activities	29.3 43.9
total revenue	12,252.9 11,609.7

No revenue from transactions with a single external customer amounts to 10% or more of the Group’s revenue.

28. Capital risk Management

The Group assesses capital management as part of its broader strategic plan. The Group focuses on interrelated financial parameters, including return on equity, earnings growth and borrowing capacity. The Group also monitors its gearing ratio, interest coverage ratio and weighted average cost of debt. These are all 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 securityholder returns and to maintain an investment-grade credit rating by maintaining an appropriate financial profile. The S&P/Moody’s long term credit rating at 30 June 2013 is BBB-/Baa3 (June 2012: BBB-/Baa3). The Group was also in compliance with its financial covenants in respect of its borrowing facilities.

The capital structure of the Group can be changed by equity issuance, paying distributions to securityholders, the distribution reinvestment plan and changing the level of debt.

160 annual report 2013 Lend Lease

notes to the ConsoLIdated FInanCIaL stateMents CONTINUED

29. International Currency Management and Financial Instruments

The Group operates across numerous jurisdictions and markets. The Lend Lease Financial Markets Risk Committee oversees the management of the Group’s foreign currency, credit, interest rate and liquidity risk exposures, within the parameters of a 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.

a. Foreign Currency

Foreign Currency risk

Foreign currency risk is the risk in local currency terms that the value of a financial commitment or a recognised asset or liability, will fluctuate due to changes in foreign currency exchange rates.

The Group is exposed to foreign currency risk primarily from foreign currency earnings, net investments in foreign operations, and transactions settled in foreign currency. The Group manages these exposures using both physical (this includes borrowings in the relevant foreign currency which act as a natural hedge for the net investments held in these foreign currencies) and derivative financial instruments (mainly forward foreign exchange contracts) to hedge foreign currency exposures. Speculative trading is not permitted.

The Group currently applies hedge accounting under AASB 139 Financial Instruments: Recognition and Measurement on a very limited basis as the majority of forward foreign exchange contracts relate to cross border intercompany loans and transactions which mainly net off in the Income Statement. The Group has minimal hedges designated as fair value and cash flow hedges (refer to Note 1.22 ‘Derivative Financial Instruments and Hedging Activities’ for the accounting treatment of such hedges).

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 generally use derivatives to hedge net investments in foreign operations.

The net asset exposure by currency is detailed below.

							Other
	A$m	US$m	£m	S$m	€m	NZ$m	m
June 2013
Net asset exposure(local currency)	3,818.9	(189.7)	174.7	(19.1)	103.7	254.5	87.2
June 2012
Net asset exposure(local currency)	3,218.0	(304.6)	203.7	329.7	101.5	251.8	80.8

Foreign Currency derivatives (not hedge accounted)

The Group’s foreign exchange derivative contracts held at reporting date to hedge specific foreign currency exposures are as follows.

	WeIGhted aVeraGe eXChanGe rate	Gross reCeIVaBLe/(paYaBLe) under ContraCts
	June 2013 (A$1=) June 2012 (A$1=) June 2013 A$m June 2012 A$m
Contracts to(buy)/sell the followingcurrencies at an agreed exchange rate:
buyGBP	0.64 0.64 (91.8) (77.1)
sell GBP	0.63 0.63 237.2 298.3
buyUSD	1.00 1.00 (380.0) (468.6)
sell USD	0.97 1.01 23.5 83.6
buyEUR	0.74 0.80 (33.2) (18.0)
sell EUR	0.74 0.79 65.5 61.4
buySGD	1.27 1.27 (48.9) (37.2)
sell SGD	1.23 4.0
buyNZD	1.19 1.28 (14.4) (13.7)
sell NZD	1.19 11.1
sell Canadian dollars	1.01 6.9
total	(227.0) (164.4)

One sell GBP buy EUR contract will mature in one to two years. All other foreign currency contracts will mature within one year.

annual report 2013 Lend Lease 161

sensitivity analysis

The sensitivity analysis of the Group’s Australian dollar denominated Income Statement and Statement of Financial Position to foreign currency movements is based on a 10% fluctuation (June 2012: 10% fluctuation) on the average rates during the financial year and the spot rate at balance date respectively. This analysis assumes that all other variables, in particular interest rates, remain constant, and excludes the effects of the foreign exchange contracts above.

A 10% movement in the average foreign exchange rates would have impacted the Group’s profit after tax as follows.

	10% WeaKenInG InCrease/(deCrease) In proFIt aFter taX	10% strenGthenInG InCrease/(deCrease) In proFIt aFter taX
	June 2013 A$m June 2012 A$m June 2013 A$m June 2012 A$m
USD	4.5 2.8 (4.2) (2.6)
GBP	6.9 6.2 (6.6) (6.0)
SGD	11.7 10.8 (10.5) (9.7)
EUR	0.2 (0.3)
	23.1 20.0 (21.3) (18.6)

A 10% movement in the foreign exchange spot rates at balance date would have impacted the Group’s net assets as follows.

	10% WeaKenInG InCrease/(deCrease) In net assets	10% strenGthenInG InCrease/(deCrease) In net assets
	June 2013 A$m June 2012 A$m June 2013 A$m June 2012 A$m
USD	(19.2) (30.1) 18.0 27.7
GBP	31.2 35.3 (25.7) (28.9)
SGD	(1.6) 25.0 1.4 (24.5)
EUR	13.5 12.9 (13.1) (12.1)
NZD	21.1 20.4 (18.9) (18.1)
	45.0 63.5 (38.3) (55.9)

b. Credit Risk

Credit risk represents the risk that a counterparty will not be able to complete its obligations in respect of a financial instrument, resulting in a financial loss to the Group. The Group has exposure to credit risk from recognised financial assets.

The maximum exposure to credit risk at balance date on financial instruments recognised in the Statement of Financial Position (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 so that sales of products and services are made to customers with an appropriate credit history.

Credit risk on financial instruments is managed under a Board approved credit policy that determines acceptable counterparties. Derivative counterparties and cash deposits are limited to recognised financial intermediaries with a minimum investment-grade credit rating as determined by a recognised rating agency. The policy sets out credit limits for each counterparty based on these ratings.

There was A$2.0 million impairment recorded during the year against other financial assets (June 2012: A$nil).

Refer to Note 10 ‘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 potential credit risk on selected transactions. During the current and prior year, the Group did not hold financial or non financial assets as collateral. At any point in time, the Group will hold other collateral such as bank guarantees and performance bonds to mitigate potential credit risk as a result of default by a counterparty or otherwise.

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 market interest rates. The Group uses physical and derivative financial instruments to assist in managing its interest rate risk. Speculative trading is not permitted.

162 annual report 2013 Lend Lease

notes to the ConsoLIdated FInanCIaL stateMents CONTINUED

29. International Currency Management and Financial Instruments continued

c. Interest Rate Risk continued

The Group’s exposure to interest rate risk on its financial assets and liabilities is set out as follows.

29. International Currency Management and Financial Instrumentscontinued c. Interest Rate Risk continued The Group’s exposure to interest rate risk on its fnancial assets and liabilities is set out as follows.
	CarrYInG aMount
	June 2013 A$m June 2012 A$m
Fixed rate Financial assets	1,023.3 149.4
Financial liabilities	(1,857.3) (1,253.8)
	(834.0) (1,104.4)
Variable rate Financial assets	836.0 869.8
Financial liabilities	(831.8) (731.3)
	4.2 138.5

sensitivity analysis

At 30 June 2013 it is estimated that an increase of one percentage point in interest rates would have increased the Group’s profit after tax and retained earnings by A$3.8 million (June 2012: A$3.9 million increase in the Group’s profit after tax and retained earnings). A one percentage point decrease in interest rates would have decreased the Group’s profit after tax and retained earnings by A$3.8 million (June 2012: A$3.8 million decrease in the Group’s profit after tax and retained earnings). The increase or decrease in interest income/expense is proportional to the increase or decrease in interest rates. Interest rate derivatives have been included in this calculation.

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 aims to manage its liquidity risk exposure by maintaining sufficient levels of cash and committed credit facilities to meet financial commitments as and when they fall due.

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 the maturity profiles of short term investments with cash flow requirements, and timely review and renewal of credit facilities.

The Group’s main liquidity risk is the ability to refinance its borrowings maturing during July 2014. A strategy employed to manage this risk is funding through commercial notes. On 13 May 2013, the Group issued A$375.0 million of Australian dollar denominated senior unsecured medium term notes, reaching maturity between 2018 and 2020. On 24 July 2012, the Group issued S$275.0 million (A$211.6 million) of Singapore dollar denominated senior unsecured notes, maturing in July 2017.

As disclosed in Note 25 ‘Contingent Liabilities’, in certain circumstances the Company guarantees the performance of particular Group entities in respect of their obligations including bonding and bank guarantees. Issued bank guarantees have cash collateralisation requirements if the bank guarantee facility is not renewed by the provider. At 30 June 2013, the Group does not anticipate a significant liquidity risk in relation to these facilities in the next 12 months.

The Group has provided collateral of A$4.2 million (June 2012: A$4.6 million) against letter of credit facilities.

The following are the contractual cash flow maturities of financial liabilities including estimated interest payments.

		Carrying	Contractual	Less than	One to	Two to	More than
		Amount	Cash Flows	One Year	Two Years	Five Years	Five Years
	Note	A$m	A$m	A$m	A$m	A$m	A$m
June 2013
non derivative Financial Liabilities
Trade and otherpayables1,2	18	3,612.6	3,756.3	2,940.6	289.0	403.8	122.9
Resident and accommodation bond liabilities3	19	2,656.8	2,656.8	2,656.8
Borrowings and fnancingarrangements	20	1,976.2	2,574.5	116.5	319.3	1,117.6	1,021.1
Other fnancial liabilities	22	254.1	274.8	176.3	36.6	61.9
total		8,499.7	9,262.4	5,890.2	644.9	1,583.3	1,144.0
derivative Financial Liabilities
Interest rate derivatives:	22
Outfow		(15.9)	(16.2)	(9.2)	(4.5)		(2.5)
total		(15.9)	(16.2)	(9.2)	(4.5)	–	(2.5)

annual report 2013 Lend Lease 163

		Carrying	Contractual	Less than	One to	Two to	More than
		Amount	Cash Flows	One Year	Two Years	Five Years	Five Years
	Note	A$m	A$m	A$m	A$m	A$m	A$m
June 2012
non derivative Financial Liabilities
Trade and otherpayables1,2	18	3,417.6	3,508.3	2,915.1	161.8	293.6	137.8
Resident and accommodation bond liabilities3	19	2,422.9	2,422.9	2,422.9
Borrowings and fnancingarrangements	20	1,357.1	1,843.7	185.3	82.1	907.8	668.5
Other fnancial liabilities	22	256.0	280.6	45.2	165.6	69.8
total		7,453.6	8,055.5	5,568.5	409.5	1,271.2	806.3
derivative Financial Liabilities
Foreign exchange contracts:	22
Outfow		(13.9)	(884.9)	(884.9)
Infow		9.8	885.6	885.6
Interest rate derivatives:	22
Outfow		(18.9)	(19.7)	(4.1)	(4.2)	(7.7)	(3.7)
total		(23.0)	(19.0)	(3.4)	(4.2)	(7.7)	(3.7)

• 1 The carrying amount of trade and other payables excludes A$814.0 million of current and A$144.8 million of non current amounts (June 2012: A$816.9 million of current and A$82.9 million of non current amounts) as they do not meet the definition of a financial liability under Australian Accounting Standards.

• 2 The repayment of these amounts will be funded through collection of outstanding loans and receivables: June 2013: A$2,559.6 million (June 2012: A$2,204.7 million).

• 3 Resident and accommodation bond liabilities are required to be classified as less than one year as any resident may depart at any time. The balance includes retirement village total resident liabilities of A$2,656.8 million (June 2012: A$2,250.3 million), which is net of deferred management fees receivable, and is repayable out of the amounts paid to the Group by incoming retirement village residents for the right to occupy retirement living and aged care properties (refer Note 13 ‘Investment Properties’ and Note 19 ‘Resident and Accommodation Bond Liabilities’).

Other contractually committed cash flows the Group is exposed to are detailed in Note 30 ‘Commitments’.

e. Fair Values of Financial Assets and Liabilities

Financial Instruments

All financial instruments recognised in the Statement of Financial Position, including those instruments carried at amortised cost, are recognised at amounts that represent a reasonable approximation of fair value, with the exception of the following borrowings.

Note	June 2013	June 2012
	Carrying Amount A$m Fair Value A$m Carrying Amount A$m Fair Value A$m
Liabilities Current Commercial notes 20	100.0 100.9
non Current Commercial notes 20	1,295.0 1,354.8 677.2 695.9

The fair value of commercial notes has been calculated by discounting the expected future cash flows by the appropriate government bond rates and credit margin applicable to the relevant term of the commercial note.

Basis of determining Fair Value

The determination of fair values of financial instruments that are not measured at cost or amortised cost in the financial report are summarised as follows:

• n The fair value of unlisted equity investments is determined based on an assessment of the underlying net assets, future maintainable earnings and any special circumstances pertaining to the particular investment;

• n The fair value of unlisted investments in property funds has been determined by reference to the fair value of the underlying properties which are valued by independent appraisers;

• n The fair values of other financial assets and financial liabilities (excluding derivative instruments) are determined in accordance with generally accepted valuation techniques; these include the use of recent arm’s length transactions, reference to other assets that are substantially the same, and discounted cash flow analysis; and,

• n The fair value of derivative instruments comprises forward foreign exchange contracts, which are valued using forward rates at balance date, and interest rate swap contracts, which are measured at the present value of future cash flows estimated and discounted based on applicable yield curves derived from quoted interest rates.

164 annual report 2013 Lend Lease

notes to the ConsoLIdated FInanCIaL stateMents CONTINUED

29. International Currency Management and Financial Instruments continued

e. Fair Values of Financial Assets and Liabilities continued

Fair Value Measurements

The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined as follows:

• n Level 1: The fair value is determined using the unadjusted quoted price for an identical instrument in an active market for identical assets or liabilities;

• n Level 2: The fair value is calculated using predominantly observable market data other than unadjusted quoted prices for an identical instrument; and,

• n Level 3: The fair value is calculated using inputs that are not based on observable market data.

n Level 3: The fair value is calculated using inputs that are not based on observ	able market data.
Note	ConsoLIdated CarrYInG aMount
	Level 1 A$m Level 2 A$m Level 3 A$m Total A$m
June 2013 Financial assets Available for sale
	340.3 340.3
Fair value throughproft and loss – negotiable instruments	72.3 72.3
Fair value throughproft and loss – unlisted equityinvestments	105.5 105.5
Held to maturityinvestments	8.5 8.5
Derivatives	24.3 24.3
14	72.3 24.3 454.3 550.9
Financial Liabilities Derivatives 22
	– 15.9 – 15.9

During the year there were no transfers between Level 1, Level 2 and Level 3 fair value hierarchies.

Note	ConsoLIdated CarrYInG aMount
	Level 1 A$m Level 2 A$m Level 3 A$m Total A$m
June 2012 Financial assets Available for sale	9.7 290.7 300.4
Fair value throughproft and loss – negotiable instruments	60.9 60.9
Fair value throughproft and loss – unlisted equityinvestments	36.9 36.9
Held to maturityinvestments	6.2 6.2
Derivatives	6.5 6.5
14	70.6 6.5 333.8 410.9
Financial Liabilities Derivatives 22	– 23.0 – 23.0

annual report 2013 Lend Lease 165

reconciliation

Reconciliation of the carrying amount for Level 3 financial instruments is set out as follows.

		Unlisted			Unlisted
	Available	Equity	Held to	Available	Equity	Held to
	for Sale	Investments	Maturity	for Sale	Investments	Maturity
	June 2013	June 2013	June 2013	June 2012	June 2012	June 2012
	A$m	A$m	A$m	A$m	A$m	A$m
Carryingamount at beginningof fnancialyear	290.7	36.9	6.2	228.8	36.9	6.7
Additions	8.4	72.9		26.0
Disposals		(1.0)
Revaluation gains and losses recognised in:
Income statement	(2.0)	(3.3)
Other comprehensive income	36.2			7.9
Effect of foreign exchange rate/other movements	7.0		2.3	28.0		(0.5)
Carrying amount at end of fnancial year	340.3	105.5	8.5	290.7	36.9	6.2

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, increases or decreases in the future. The Group is exposed to equity price risk on all traded and/or non traded financial instruments measured at fair value.

30. Commitments[1]

The Group leases various land and buildings, and plant and equipment under non cancellable operating leases. The leases have varying terms, escalation clauses and renewal rights. On renewal, the terms of the leases are renegotiated.

escalation clauses and renewal rights. On renewal, the terms of the leases are renegotiated.
	June 2013	June 2012
	A$m	A$m
a. Operating Lease Commitments
The estimated aggregate amount of non cancellable operating lease expenditure agreed or contracted but not provided for in the fnancial statements is as follows:
Land and buildings – self occupied	223.2	249.1
Plant and equipment	9.3	10.3
	232.5	259.4
At balance date, commitments in relation to non cancellable operating leases are payable as follows:
Due within oneyear	69.7	68.7
Due between one and fveyears	132.8	146.0
Due later than fveyears	30.0	44.7
	232.5	259.4
b. Finance Lease Commitments
At balance date, commitments in relation to the fnance leases are payable as follows:
Due within oneyear	165.8	33.8
Due between one and fveyears	88.3	222.2
recognised as a liability	254.1	256.0
Lease liabilities provided for in the fnancial statements are as follows:
Current	165.8	33.8
Non current	88.3	222.2
	254.1	256.0
c. Investments
At balance date, capital commitments existing in respect of interests in equity accounted investments and other investments contracted but not provided for in the fnancial statements are as follows:
Due within oneyear	111.9	79.9
Due between one and fveyears	351.8	18.6
Due later than fveyears		2.0
	463.7	100.5

1 The commitments outlined in this note do not include the commitments of the entities accounted for using the equity method (refer to Note 12 ‘Equity Accounted Investments’).

166 annual report 2013 Lend Lease

notes to the ConsoLIdated FInanCIaL stateMents CONTINUED

	June 2013	June 2012
	A$m	A$m
31. notes to the statement of Cash Flows
Reconciliation of Proft After Tax to Net Cash Provided by Operating Activities
proft after tax(Including non Controlling Interest)	552.5	503.1
Amortisation and depreciation	86.9	77.4
Netgain on sale of investments,plant and equipment	(116.7)	(97.8)
Impairment of equityaccounted investments	3.1
Impairment of other fnancial assets	2.0
Impairment ofproperty,plant and equipment	0.6
Net unrealised foreign exchange loss/(gain)and currencyhedgingcosts	5.8	24.2
Net fair value loss on investments	1.6	1.5
Proft of equityaccounted investments	(152.7)	(182.8)
Dividends/distributions from equityaccounted investments	144.1	148.1
Fair valuegain on investmentproperties	(25.6)	(38.1)
Other	(13.7)	0.2
net cashprovided by operating activities before changes in assets and liabilities	487.9	435.8
Changes in Assets and Liabilities Adjusted for Effects of Purchase and Disposal of
Consolidated Entities and Operations During the Financial Year
Increase in receivables	(428.0)	(78.1)
Increase in inventories	(42.8)	(249.1)
Decrease/(increase)in other assets	27.6	(55.4)
Increase in net defned beneftplan assets	(14.8)	(21.5)
(Decrease)/increase inpayables	(6.4)	35.9
(Decrease)/increase in other liabilities	(3.6)	12.4
Decrease/(increase)in deferred tax items	97.8	(91.5)
Increase in current tax asset	(41.1)	(37.0)
Increase in otherprovisions	11.8	8.2
Decrease/(increase)in other intangibles	6.5	(5.8)
net cashprovided by/(used in) operating activities	94.9	(46.1)

annual report 2013 Lend Lease 167

32. employee Benefits

a. Lend Lease Employee Security Plans

Currently employees own approximately 6.86% (June 2012: 6.91%) of the issued capital of the Group through various Lend Lease employee security plans, details of which are outlined below.

• n Australia: Employee Share Acquisition Plan (‘ESAP’): ESAP was established in December 1988 for the purpose of employees acquiring securities in the Group and is funded by Lend Lease subscriptions. Those subscriptions have been used to acquire securities in the Group at market value on behalf of employees, who may be nominated as members of ESAP. Employees may also be allocated securities by way of bonus arrangements on the basis of individual, corporate and business unit performance.

• n 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. Securities 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 the Group securities at market value on behalf of employees. The value of allocations to employees is ultimately based on a combination of the Group security price and the respective currencies and Australian dollar exchange rates.

• n In 2002, two UK-based Inland Revenue approved Share Incentive Plans (‘SIP’) were established for the acceptance of employee profit share contributions used to acquire Group securities for UK-based Group employees. These plans are currently not accepting new contributions whilst Lend Lease makes all profit share payments to employees in cash.

• n Americas: US Rabbi Trust (‘Rabbi Trust’) was established in 2004 and updated in 2005 for the acceptance of employee profit share contributions used to acquire Group securities for US-based employees. This part of the plan is not currently accepting new contributions and only holds cash or short term investments. Since 2009 the Rabbi Trust has acquired Group securities at market value in respect of bonus arrangements for employees. Group securities may be released to employees following a deferral period. The value of releases is based on individual, business unit and Group performance.

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.

distributions and/or Voting rights

Generally, employees in the various operating security plans are entitled to distributions and voting rights for allocated securities. The plans reflect this intention subject to regulatory, legal and tax constraints. Voting and distribution rights on any unallocated securities reside with the trustees of the relevant security 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 and tax jurisdiction within which the trust operates.

b. Lend Lease Employee Benefit Vehicles

In addition to the plans discussed above, Lend Lease has established a range of employee security ownership vehicles, including Lend Lease Retirement Benefit Fund (‘RBF’) and Lend Lease Employee Investment Trust (‘EIT’).

RBF was established in 1984 with shareholder approval for the benefit of employees. The balance of the assets of RBF at 30 June 2013 was 14.9 million (June 2012: 14.9 million) Group stapled securities.

The Lend Lease securities in RBF are not available for allocation to employees other than in the event of a change of control of the Group and, in accordance with RBF’s trust deed, the capital of the trust is not available to the Group.

The RBF trustee is independent of the Group. In the event of a change of control, the RBF trustee may distribute RBF funds to employees who cease to be employees during the 12 months after a change of control. The RBF trustee has discretion as to how RBF funds are distributed following a change of control. Under Australian Accounting Standards, RBF, while not legally controlled, is required to be consolidated for accounting purposes and payments from it on a change of control will impact the Group’s financial statements. Any payments that the RBF trustee may make as a result of a change of control of the Group are an obligation of RBF and not the Group. Any payments made will need to be funded by RBF and therefore cannot exceed the value of the assets of RBF, which was A$133.0 million at 30 June 2013 (June 2012: A$115.9 million). However, as RBF is consolidated by the Group, this potential obligation is disclosed as a contingent liability.

EIT was established in 1985 to enable employees to invest in the Group. At 30 June 2013, 10.9 million (June 2012: 10.9 million) Group securities were held by EIT, of which 10.6 million securities were available for allocation to employees. In accordance with EIT’s trust deed, the capital of the EIT is not available to the Group. As with RBF, Australian Accounting Standards require consolidation of EIT for accounting purposes, regardless of the control of EIT by an independent trustee. Therefore payments from EIT impact the Group’s financial statements. On a change of control, the EIT trustee may (but is 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 Group, and cannot exceed the assets of the EIT of A$95.2 million as at 30 June 2013 (June 2012: A$82.7 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 trustee.

It should be noted that given the timing and basis on which these vehicles purchased their Group securities, any capital gains tax payable on the Lend Lease securities sold by these vehicles 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.

168 annual report 2013 Lend Lease

notes to the ConsoLIdated FInanCIaL stateMents CONTINUED

32. employee Benefits continued

b. Lend Lease Employee Benefit Vehicles continued

short term Incentives (‘stI’)

The STI plan is an annual incentive plan whereby a number of employees receive benefits which are dependent upon the achievement of both Lend Lease financial targets and individual goals. The total value of the potential benefit varies by executive and is tested against relevant market levels for each role.

The STI plan comprises a cash element which is paid in September following year end. For more senior employees, where potential benefit is typically higher, the plan also includes a deferred element.

Deferral periods are generally for one or two years (up to three years in the case of the CEO as an interim measure for 2013). The deferred element is normally awarded as Lend Lease securities and in some instances as cash. Securities are held in Lend Lease Employee Security Plans on behalf of the employee for the deferral period. For employees to receive the full deferral, they must generally be employed by the Group at the date of vesting.

Long term Incentives (‘LtI’)

The LTI plan is designed to:

• n Motivate Senior executives to achieve the Group’s long term strategic goals and only provide reward where the Group delivers better securityholder value than its peers; and,

• n Align the interests of executives and securityholders given that the value received is linked to the Group’s security price.

An annual grant of ‘performance securities’ is made to a limited number of executives in September each year. The Board, based on the recommendation of the Personnel and Organisation Committee, intends that performance securities can be converted to Lend Lease securities or paid as a cash equivalent if the performance hurdle is achieved over a three year and four year period.

In the event of a change in control of the Group, 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.

b. Lend Lease Employee Benefit Vehicles continued

arrangements for LtI awards Granted in the June 2010 Financial Year

arrangements for LtI awards in the June 2011 and June 2012 Financial Years

For awards granted 1 September 2010 and 1 September 2011 the performance hurdle is based on TSR compared with the TSR of the individual ASX 100 listed companies at the commencement of the performance period. TSR is measured against ASX 100 companies (with 50% vesting at median performance, rising proportionately to 100% on reaching 75th percentile performance).

50% of the award is measured after three years, the remaining 50% of the award is measured after four years. The executive must remain with the Group until vesting date for the award to vest. The period may be shortened if an executive leaves employment by reason of death or total and permanent disability. Where employment ceases for redundancy or other circumstances as determined by the Board, based on the recommendation of the Personnel & Organisation Committee, a pro rata award may be retained subject to the original vesting date and performance conditions.

other LtI awards

A limited number of other LTI awards have been granted to executives by the Board, based on the recommendation of the Personnel and Organisation Committee. These awards tend to have performance hurdles based on internal business unit performance targets, such as earnings before tax, operating margins and 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.

amounts recognised in the Financial statements

LTI awards are valued using a Monte-Carlo simulation methodology where the security price can be projected based on the assumptions underlying the Black-Scholes formula. Retention awards are valued by discounting the security 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 Group security price, a risk free interest rate, expected volatility and dividend yield.

During the financial year ended 30 June 2013, a A$30.1 million expense was recognised in the Income Statement in relation to equity settled security based payment awards (June 2012: A$25.1 million). This was partially offset by a net accrual reversal of A$0.2 million relating to previously accrued expenses.

For awards granted 1 September 2009, the performance hurdle is based on two equal measures: long term profitability as measured by Earnings per Security (‘EPS’) and Total Securityholder Return (‘TSR’) compared with the TSR of the individual ASX 100 listed companies as at the commencement of the performance period. The performance measures are:

• n TSR measured against the ASX 100 companies (with 50% vesting at median performance, rising proportionately to 100% on reaching 75th percentile performance); and,

• n EPS on the basis of EPS reported in the Group’s financial statements adjusted for exclusion of treasury securities.

Each of the two performance hurdles is measured and can vest independently. 50% of the award is measured after three years, the remaining 50% of the award is measured after four years. The executive must remain with the Group until vesting date for the award to vest. The period may be shortened if an executive leaves employment by reason of death or total and permanent disability. Where employment ceases for redundancy or other circumstances as determined by the Board, based on the recommendation of the Personnel and Organisation Committee, a pro rata award may be retained subject to the original vesting date and performance conditions.

annual report 2013 Lend Lease 169

33. Key Management personnel disclosures

Key management personnel compensation details are set out in Section 3 of the Directors’ Report.

Equity Holdings and Transactions

security holdings Financial Year ended 30 June 2013

security holdings Financial Year ended 30 June 2013
		Securities	Securities
		Held at	Received	Other	Securities
		Beginning of	During	Net Change	Held at End of
	Year	Financial Year	the Year1	to Securities	Financial Year
Non Executive Directors
D Crawford	2013	74,510		1,041	75,551
	2012	73,723		787	74,510
C Carter	2013	15,000			15,000
	2012			15,000	15,000
P Colebatch	2013	18,323			18,323
	2012	18,323			18,323
G Edington	2013	40,068			40,068
	2012	40,068			40,068
P Goldmark	2013	24,794			24,794
	2012	24,794			24,794
J Hemstritch	2013	20,000			20,000
	2012			20,000	20,000
J Hill2	2012	14,324			14,324
D Ryan	2013	31,273			31,273
	2012	31,273			31,273
M Ullmer	2013	25,000			25,000
	2012			25,000	25,000
Executive Director
S McCann3	2013	378,596	366,356	(297,548)	447,404
	2012	144,636	230,430	3,530	378,596
Executives
T Gupta4	2013	58,340	40,893	(80,355)	18,878
S Hipperson5	2013
D Labbad	2013	30,276	25,289		55,565
	2012	431	29,845		30,276
R Leaver	2013	57,878	29,865		87,743
	2012	20,701	37,177		57,878
A Lombardo	2013	82,247	51,313	(27,000)	106,560
	2012	38,621	43,626		82,247
R McNamara	2013	3,247	43,317		46,564
	2012		3,247		3,247
D Saxelby6	2013
S Charlton7	2012	5,000	11,740		16,740
M Menhinnitt8	2012	122,245	71,291		193,536
C Van der Laan de Vries9	2012
total	2013	859,552	557,033	(403,862)	1,012,723
total	2012	534,139	427,356	64,317	1,025,812

• 1 For the Executive Director and executives, securities received relates to security entitlements under employee benefit vehicles.

• 2 J Hill retired 15 November 2012.

3 Includes 141,367 securities from a retention award which vested 30 June 2012 and transferred to S McCann in the current period.

• 4 T Gupta commenced as Key Management Personnel on 24 October 2012.

• 5 S Hipperson commenced as Key Management Personnel on 1 October 2012.

• 6 D Saxelby commenced as Key Management Personnel on 18 February 2013.

• 7 S Charlton ceased as Key Management Personnel on 30 June 2012.

• 8 M Menhinnitt ceased as Key Management Personnel on 17 February 2013.

• 9 C Van der Laan de Vries ceased as Key Management Personnel on 31 December 2012.

170 annual report 2013 Lend Lease

notes to the ConsoLIdated FInanCIaL stateMents CONTINUED

33. Key Management personnel disclosures continued

Key Management Personnel Compensation

The key management personnel compensation included in ‘Employee Benefit Expenses’ (refer to Note 4 ‘Operating Expenses’) is as follows.

	June 2013	June 2012
	A$000s	A$000s
Short term employee benefts	15,627	17,169
Post employment benefts	447	416
Securitybasedpayments	7,111	5,807
Other longterm benefts	82	78
	23,267	23,470

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.

34. non Key Management personnel related party Information

Consolidated Entities

Lend Lease Corporation Limited

Lend Lease Corporation Limited provides a wide range of corporate services to its consolidated entities. Corporate management fees and/or guarantee fees are charged to these entities for these services. These services principally relate to:

• n Administration, company secretarial, accounting, legal, tax, insurance, information technology and public relations;

• n 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 17 ‘Defined Benefit Plan Asset’) and employee security based payment plans (refer to Note 24 ‘Reserves’ and Note 32 ‘Employee Benefits’); and,

• n 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. Outstanding balances arising from working capital facilities and long term financing are typically unsecured and repayable on demand. In addition, guarantees are provided to particular Group entities in respect of their obligations. These include bonding and bank guarantee facilities used primarily by the Construction business as well as performance guarantees for certain Development business commercial built-form developments. Guarantee fees are charged under normal terms and conditions.

The following represents the transactions that occurred during the financial year and the balances outstanding at year end between Lend Lease Corporation Limited and its consolidated entities.

Corporation Limited and its consolidated entities.
	CoMpanY
	June 2013 A$000s June 2012 A$000s
transactions Corporate management fees	44,381 44,410
Guarantee fees	10,172 13,734
Dividend income	221,634 230,126
Interest income	14,187 8,591
Interest expense	73,611 19,160
outstanding Balances (net of provisions raised) Receivables	3,985,088 3,926,944
Payables	2,958,186 2,201,105

annual report 2013 Lend Lease 171

Consolidated Entities

Transactions that occurred during the financial year between entities in the Lend Lease Group included:

• n Provision of project management, design services, construction management and engineering services to development projects;

• n Provision of payroll, transaction and management services;

• n Provision of investment management services;

• n Receipt and payment of superannuation contributions;

• n Reimbursement of expenses made on behalf of subsidiaries;

• n Loan advances and repayments between subsidiaries;

• n Premium payments and receipts for the Group’s insurance policies; and,

• n Dividends received or due and receivable from subsidiaries.

Associates and Joint Venture Entities

Interests held in associates and joint venture entities by Lend Lease are set out in Note 12 ‘Equity Accounted Investments’.

Transactions between the Lend Lease Group and its associates and joint venture entities principally relate to:

• n Development: development management services and the sale and purchase of development properties with Lend Lease managed funds;

• n Construction: provision of project management, building, engineering and construction services;

• n Investment Management: provision of property and infrastructure investment management, property management and asset management services; and,

• n Infrastructure Development: provision of project management, engineering and construction services and asset management services. Loan stock is also provided to projects on which interest is earned based upon project specific risks and returns.

A subordinated non interest bearing loan previously provided to a joint venture was repaid in full during the year (June 2012 balance: A$30.1 million). A non interest bearing loan has also been provided to a joint venture and at 30 June 2013 the loan balance was A$30.6 million (June 2012: A$31.5 million).

Except as noted above, transactions and outstanding balances are typically on normal terms and conditions.

Revenue earned by Lend Lease during the year as a result of transactions with its associates and joint venture entities is as follows.

	June 2013	June 2012
	A$m	A$m
revenue
Provision of services
Associates	19.0	33.2
Joint venture entities	453.7	388.3

Other transactions and outstanding balances with associates and joint venture entities have been disclosed in Note 2 ‘Revenue’, Note 3 ‘Other Income’, Note 4 ‘Operating Expenses’, Note 5 ‘Finance Revenue and Finance Costs’, Note 10 ‘Loans and Receivables’ and Note 18 ‘Trade and Other Payables’.

172 annual report 2013 Lend Lease

notes to the ConsoLIdated FInanCIaL stateMents CONTINUED

35. parent entity disclosures

The following summarises the financial information of the Group’s parent entity, Lend Lease Corporation Limited (‘the Company’), as at and for the year ended 30 June 2013.

year ended 30 June 2013.
	CoMpanY
	June 2013 A$m June 2012 A$m
Results Proft after tax	60.1 189.5
Other comprehensive income after tax
total comprehensive income after tax	60.1 189.5
Financial Position Current assets	3,915.6 3,899.5
Non current assets	1,946.0 1,840.9
total assets	5,861.6 5,740.4
Current liabilities	3,013.7 2,226.5
Non current liabilities	33.7 33.8
total liabilities	3,047.4 2,260.3
net assets	2,814.2 3,480.1
Issued capital	1,599.9 2,077.6
Treasurysecurities	(119.0) (114.1)
Reserves	221.9 213.8
Retained earnings	1,111.4 1,302.8
total equity	2,814.2 3,480.1

Parent Entity Contingencies

In respect of the contingent liabilities of the Group disclosed in Note 25 ‘Contingent Liabilities’, the Company participates in the provision of guarantees of Group entities and manages the legal action in relation to the World Trade Center.

36. events subsequent to Balance date

Since 30 June 2013, the Group subscribed for units in Australian Prime Property Fund Commercial (‘APPFC’) for a total investment of A$225.0 million.

There were no other material events subsequent to the end of the financial year.

annual report 2013 Lend Lease 173

dIreCtors[,] deCLaratIon

In the opinion of the Directors of Lend Lease Corporation Limited (‘the Company’):

1. 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:

2. a. Giving a true and fair view of the financial position of the Company and consolidated entity as at 30 June 2013 and of their performance for the financial year ended on that date; and

3. b. Complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001 .

4. The financial statements and notes also comply with International Financial Reporting Standards as disclosed in Note 1.1.

5. There are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

6. The Directors have been given the declarations required by Section 295A of the Corporations Act 2001 from the Group Chief Executive Officer and Group Chief Financial Officer for the financial year ended 30 June 2013.

Signed in accordance with a resolution of the Directors:

==> picture [159 x 35] intentionally omitted <==

d a Crawford, ao Chairman

==> picture [91 x 54] intentionally omitted <==

s B McCann Group Chief Executive Officer & Managing Director

Sydney, 23 August 2013

174 annual report 2013 Lend Lease

==> picture [505 x 661] intentionally omitted <==

==> picture [505 x 49] intentionally omitted <==

annual report 2013 Lend Lease 175

==> picture [506 x 661] intentionally omitted <==

176 annual report 2013 Lend Lease

seCurItYhoLder InForMatIon

securities exchange Listings and Code

Lend Lease Group is listed on the Australian Securities Exchange and trades under the code LLC.

In the US, Lend Lease securities 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 security. 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 securityholders with a registered address in Australia or New Zealand to build their securityholdings without incurring transaction costs. The laws of other countries make it difficult for us to offer securities in this way. Lend Lease securityholders are able to reinvest their distributions to acquire more Lend Lease securities through the Distribution Reinvestment Plan (DRP) or the Share Election Plan (SEP). Securityholders may also make contributions of between A$500 and A$2,500 to acquire new Lend Lease securities under the Share Purchase Plan (SPP). Together the DRP, SEP and SPP constitute the Share Accumulation Plan.

The rules of each of these plans are set out in the Share Accumulation Plan Information Sheet. Copies are available on the Lend Lease website. Please note that the Share Election Plan and the Share Purchase Plan are currently suspended.

Key sources of Information for securityholders

We report the following to securityholders each year:

• n Securityholder Review

• n Annual Report

We report each March and September to securityholders with distribution statements.

electronic Communications

Securityholders have the option of receiving the following communications and all other company-related information electronically:

• n Securityholder Review;

• n Annual Report and Securityholder Review;

• n Distribution statements; and,

• n Notice of Annual General Meeting.

Lend Lease makes both the Annual Report and the Securityholder Review available in an interactive version online. A hard copy of the Annual Report and/or the Securityholder Review will only be sent to those securityholders who elect to receive them in that form. In addition, you may elect to receive notification that the Annual Report and the Securityholder Review are available online.

Securityholders who wish to register their email address should go to the website of the Lend Lease share registry www.investorcentre.com/ecomms.

For registry contact details see page 180.

privacy Legislation

Under Chapter 2C of the Corporations Act 2001 , a securityholder’s information (including the name, address and details of securities 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 securityholder. These statutory obligations are not altered by the Privacy Amendment (Private Sector) Act 2000. Information is collected to administer the securityholder’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 its website.

annual report 2013 Lend Lease 177

distribution and share accumulation plan Issue price history

LEND LEASE GROUP

				a	B		C
				Lend Lease	Lend Lease		Total
			Payment	Corporation	Trust		Distribution		DRP	SEP	SPP
	Distribution	Period Ending	Date	Dividend	Distribution		Per Security1		Price	Price	Price
Final		30-Jun-13	27-Sep-13	$0.19	$0.01		$0.20		TBA*	suspended	suspended
Interim		31-Dec-12	27-Mar-13	$0.22	$0.00		$0.22		$10.20	suspended	suspended
Final		30-Jun-12	30-Sep-12	$0.22	N/A		$0.22		$7.79	suspended	suspended
Interim		31-Dec-11	30-Mar-12	$0.16	N/A		$0.16		$7.49	suspended	suspended
Final		30-Jun-11	30-Sep-11	$0.15	N/A		$0.15		$7.28	suspended	suspended
Interim		31-Dec-10	30-Mar-11	$0.20	N/A		$0.20		$8.43	suspended	suspended
Final		30-Jun-10	24-Sep-10	$0.12	N/A		$0.12		suspended	suspended	suspended
Interim		31-Dec-09	31-Mar-10	$0.20	N/A		$0.20		suspended	suspended	suspended
In specie		N/A	20-Nov-09	$0.00	N/A		$0.00		N/A	suspended	suspended
	1 The shares of Lend Lease Corporation and		the units in Lend Lease Trust were combined as stapled securities on					12 November 2009
	Final	N/A	25-Sep-09	$0.16	N/A		$0.16		$9.50	suspended	suspended
Interim		N/A	1-Apr-09	$0.25	N/A		$0.25		$5.29	suspended	suspended
Final		N/A	26-Sep-08	$0.34	N/A		$0.34		$9.26	suspended	suspended
Interim		N/A	26-Mar-08	$0.43	N/A		$0.43		suspended	suspended	suspended
Final		N/A	12-Sep-07	$0.42	N/A		$0.42		suspended	suspended	suspended
Interim		N/A	27-Mar-07	$0.35	N/A		$0.35		suspended	suspended	suspended
Final		N/A	13-Sep-06	$0.31	N/A		$0.31		suspended	$15.50	suspended
Interim		N/A	14-Mar-06	$0.30	N/A		$0.30		suspended	$13.32	suspended
Final		N/A	14-Sep-05	$0.29	N/A		$0.29		suspended	$13.14	suspended
Interim		N/A	8-Mar-05	$0.28	N/A		$0.28		suspended	suspended	suspended
Final		N/A	15-Sep-04	$0.26	N/A		$0.26		suspended	suspended	suspended
Interim		N/A	17-Mar-04	$0.18	N/A		$0.18		suspended	suspended	suspended
Final		N/A	18-Sep-03	$0.20	N/A		$0.20		$10.64	suspended	suspended
Interim		N/A	19-Mar-03	$0.10	N/A		$0.10		$8.71	$8.71	$8.71
Final		N/A	19-Sep-02	$0.09	N/A		$0.09		$11.02	$11.02	$11.02
Interim		N/A	20-Mar-02	$0.09	N/A		$0.09		$11.79	$11.79	$11.79
Final		N/A	13-Sep-01	$0.08	N/A		$0.08		$10.97	suspended	$10.97
Interim		N/A	14-Mar-01	$0.13	N/A		$0.13		$14.85	suspended	$14.85
Final		N/A	14-Sep-00	$0.32	N/A		$0.32		$19.82	$19.82	suspended
Interim		N/A	15-Mar-00	$0.32	N/A		$0.32		$20.34	$20.34	$20.34
Final		N/A	16-Sep-99	$0.31	N/A		$0.31		$19.66	$19.66	$19.66
Interim		N/A	17-Mar-99	$0.29	N/A		$0.29		$21.46	$21.46	$21.46
Final		N/A	17-Sep-98	$0.54	N/A		$0.54		$34.12	$34.12	$34.12
Interim		N/A	18-Mar-98	$0.53	N/A		$0.53		$35.06	$35.06	$35.06
Final		N/A	18-Sep-97	$0.50	N/A		$0.50		$30.48	$30.48	$30.48
Interim		N/A	19-Mar-97	$0.48	N/A		$0.48		$23.41	$23.41	$23.41
Final		N/A	1-Nov-96	$0.47	N/A		$0.47		$20.71	$20.71	$20.71
Interim		N/A	29-Mar-96	$0.43	N/A		$0.43		$17.47	$17.47	N/A
Final		N/A	3-Nov-95	$0.38	N/A		$0.38		$16.89	$16.89	N/A
2nd Interim		N/A	28-Jun-95	$0.11	N/A		$0.11		$16.84	$16.84	N/A
Interim		N/A	31-Mar-95	$0.36	N/A		$0.36		$15.08	$15.08	N/A

• Not available at time of printing but can be found on Lend Lease's website www.lendlease.com from October 2013

178 annual report 2013 Lend Lease

seCurItYhoLder InForMatIon CONTINUED

LEND LEASE GROUP

	LEND LEASE	GROUP
				a	B	C
				Lend Lease	Lend Lease	Total
			Payment	Corporation	Trust	Distribution	DRP	SEP	SPP
	Distribution	Period Ending	Date	Dividend	Distribution	Per Security1	Price	Price	Price
2nd Interim		N/A	27-Jun-94	$0.10	N/A	$0.10	$15.10	$15.10	N/A
Interim		N/A	13-Apr-94	$0.34	N/A	$0.34	$16.10	$16.10	N/A
Final		N/A	22-Oct-93	$0.33	N/A	$0.33	suspended	suspended	N/A
Special		N/A	15-Jul-93	$0.10	N/A	$0.10	$12.79	$12.79	N/A
Interim		N/A	29-Mar-93	$0.33	N/A	$0.33	suspended	suspended	N/A
Final		N/A	23-Oct-92	$0.33	N/A	$0.33	suspended	suspended	N/A
Special		N/A	16-Jul-92	$0.08	N/A	$0.08	$14.16	$14.16	N/A
Interim		N/A	30-Mar-92	$0.32	N/A	$0.32	suspended	suspended	N/A
Final		N/A	23-Oct-91	$0.32	N/A	$0.32	$14.24	$14.24	N/A
Special		N/A	26-Jun-91	$0.08	N/A	$0.08	$14.42	$14.42	N/A
Interim		N/A	3-Apr-91	$0.31	N/A	$0.31	$12.72	$12.72	N/A
Final		N/A	19-Oct-90	$0.31	N/A	$0.31	$11.04	$11.04	N/A
Special		N/A	27-Jun-90	$0.10	N/A	$0.10	$11.90	$11.57	N/A
Interim		N/A	30-Mar-90	$0.29	N/A	$0.29	$11.47	$11.15	N/A
Final		N/A	27-Oct-89	$0.27	N/A	$0.27	$10.92	$10.62	N/A
Special		N/A	26-Jun-89	$0.15	N/A	$0.15	$7.50	$7.50	N/A
Interim		N/A	31-Mar-89	$0.27	N/A	$0.27	$8.45	$8.21	N/A
Bonus		N/A	28-Oct-88	$0.50	N/A	$0.50	$10.10	$9.82	N/A
Final		N/A	28-Oct-88	$0.27	N/A	$0.27	$10.10	$9.82	N/A
Interim		N/A	25-Mar-88	$0.23	N/A	$0.23	$10.79	$10.49	N/A
Final		N/A	14-Oct-87	$0.23	N/A	$0.23	$16.33	N/A	N/A
Interim		N/A	27-Mar-87	$0.22	N/A	$0.22	$11.65	N/A	N/A
Final		N/A	31-Oct-86	$0.20	N/A	$0.20	$7.59	N/A	N/A
Interim		N/A	27-Mar-86	$0.16	N/A	$0.16	$7.49	N/A	N/A
Final		N/A	21-Oct-85	$0.16	N/A	$0.16	$5.62	N/A	N/A

1 The shares of Lend Lease Corporation and the units in Lend Lease Trust were combined as stapled securities on 12 November 2009

security Information at a Glance at 30 august 2013 (31 august 2012)

	2013	2012
Number of securityholders	54,183	52,613
Units issued	576 million	573 million
Percentage owned by20 largest securityholders	75.86%	76.67%
Interim dividend/distribution	22 centsper security	16 centsper security
Total dividend/distribution	42 centsper security	38 centsper security
Dividendpayout ratio	44%	43%

annual report 2013 Lend Lease 179

spread of securityholdings at 30 august 2013 (31 august 2012)

	2013	2012
1 to 1,000 securities	27,127	26,475
1,001 to 5,000	22,652	21,467
5,001 to 10,000	3,186	3,030
10,001 to 100,000	1,596	1,549
100,001 securities and over	89	92
total number of securityholders	54,650	52,613
securityholders with less than a marketableparcel	2,949(representing 56,479 securities)	3,041(representing 62,338 securities)

twenty Largest securityholders at 30 august 2013

twenty Largest securityholders at 30 august 2013
Name	No. of Units	% of Issued Capital
HSBC CustodyNominees(Australia)Limited	127,814,900	22.21
National Nominees Limited	94,073,863	16.35
J P Morgan Nominees Australia Limited	75,660,633	13.15
CiticorpNominees PtyLimited	30,244,797	5.26
BNP Paribas Noms PtyLtd	19,723,255	3.43
LL Employee Holdings Custodian PtyLimited	14,914,384	2.59
JP Morgan Nominees Australia Limited	13,217,145	2.30
CiticorpNominees PtyLimited	12,258,640	2.13
LL Employee Holdings Custodian PtyLtd	11,229,985	1.95
LL Employee Holdings Custodian PtyLimited	10,933,413	1.90
HSBC CustodyNominees(Australia)Limited	4,068,733	0.71
Argo Investments Limited	3,893,609	0.68
AMP Life Limited	3,664,575	0.64
UBS Wealth Management Australia Nominees PtyLtd	3,005,022	0.52
QIC Limited	2,528,082	0.44
BNP Paribas Nominees PtyLtd	2,261,415	0.39
CS Third Nominees PtyLtd	1,725,113	0.30
Questor Financial Services Limited	1,514,706	0.26
Share Direct Nominees PtyLtd	1,326,919	0.23
Avanteos Investments Limited	1,269,925	0.22
		75.64

substantial securityholders as shown in the Company[,] s register at 30 august 2013

	Date of Last
Name	Notice Received	No. of Units	% of Issued Capital
Franklin Resources, Inc. and its affliates	21/06/2013	29,329,451	5.10%
LL Employee Holdings Custodian PtyLimited*	15/03/2010	34,626,669	6.63%

• This is a Lend Lease employee benefit vehicle.

180 annuaL report 2013 Lend Lease

Corporate dIreCtorY

Annual General Meeting 2013

The Annual General meeting of shareholders of Lend Lease Corporation Limited and the general meeting of unit holders of Lend Lease Trust (together, Lend Lease Group) will be held at 10am on Friday 15 November 2013 in the Grand Ballroom, Four Seasons Hotel, 199 George Street, Sydney, NSW. Full details will be contained in the Notice of Meetings.

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 21992 W: www.lendlease.com

2014 Financial Calendar

February Announcement of Half Year Results March Security price quoted ex distribution Interim distribution record date Interim distribution payable august Announcement of Full Year Results september Security price quoted ex distribution Final distribution record date Final distribution payable november Annual General Meeting

Share Registry Information

Computershare Investor Services Pty Limited ABN 48 078 279 277 GPO Box 242, Melbourne Victoria 3000 Australia T: 1300 850 505 (within Australia) T: +61 3 9415 4000 (outside Australia)

Please note that the timing of events can be subject to dates. A current financial calendar is available online (see: www.lendlease. com/en/worldwide/investor-centre/corporate-calendar).

Entity Details

Lend Lease Corporation Limited ABN 32 000 226 228 Incorporated in NSW Australia

Lend Lease Responsible Entity Limited ABN 72 122 883 185 AFS Licence 308983 as responsible entity for Lend Lease Trust ABN 39 944 184 773 ARSN 128 052 595

Darling Quarter, Sydney, Australia

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Lend Lease

Level 4 30 The Bond 30 Hickson Road Millers Point NSW 2000

T +61 2 9236 6111 F +61 2 9252 2192 www.lendlease.com