LENDLEASE GROUP — Annual Report 2014

Aug 26, 2014

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ASX Announcement

Full Year Results – August 2014

27 August 2014

Further to Lend Lease Group’s earlier announcement today, attached are the following documents:

• Securities Exchange and Media Announcement

• Results presentation

ENDS

Investors: Suzanne Evans Head of Investor Relations Tel: 02 9236 6464 / 0407 165 254

Media: Natalie Causley Media Relations Tel: 02 9236 6865 / 0410 838 914

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

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

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ASX Announcement

Strong FY14 financial performance driven by development pipeline and Bluewater sale

27 August 2014

For the year ended 30 June 2014:

• Profit after tax of $822.9 million

• Earnings per stapled security of 142.7 cents

• Final distribution of 49.0 cents per security, unfranked; payout ratio of 50%

• Strong balance sheet with ~$3.0 billion of cash and undrawn facilities

• ~$2.5 billion of pre sold revenue across residential apartments and communities

• Operating cashflow of $822.4 million including proceeds from Bluewater sale partially offset by increased investment in development projects

• Return on equity of 18.2%[1]

• Estimated development pipeline end value of $37.7 billion up $300 million

• Construction backlog revenue of $16.2 billion maintained

• Funds Under Management (FUM) of $16.3 billion up 9.0%

Profit after Tax

Lend Lease delivered a strong profit after tax for the year ended 30 June 2014 of $822.9 million, including the profit on sale of its interest in the Bluewater Shopping Centre in Kent, UK.

The Group declared a final distribution of 49 cents per security, unfranked. Combined with the interim distribution of 22 cents per security, the full year distribution totals 71 cents per security and represents a payout ratio of 50% of profit after tax for the year. The Group’s Distribution Reinvestment Plan will apply to the final distribution payable on 22 September 2014.

	30 June 2014	30 June 2013
	$m	$m
Profit after tax	$822.9m	$549.0m2
Full year distribution	71 cps	42 cps
Earnings per Stapled Security on profit after tax	142.7 cps	95.6 cps2

Lend Lease Group Chief Executive Officer and Managing Director, Steve McCann said Lend Lease had delivered a strong financial performance for the year underpinned by its development pipeline and the sale of its interest in the Bluewater Shopping Centre.

“In the last five years we have reshaped and refocused our business to deliver on our strategic objectives, including a significant pipeline of urban regeneration projects. We made further progress during the year on the Barangaroo South project in Sydney, with 100% pre sales of the first phase of residential apartments and the launch of the third and largest

1 Return on equity (ROE) is calculated as the annual profit after tax divided by the arithmetic average of beginning, half year and year end securityholders’ equity

2 30 June 2013 figures have been adjusted to reflect the impact of the revised AASB 119 Employee Benefits standard

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commercial tower with recent leasing commitments from PricewaterhouseCoopers and HSBC. We are continuing discussions with other potential tenants for International Towers Sydney,” said Mr McCann.

Other highlights included the financial close of the Public Private Partnership (PPP) component of the Darling Harbour Live project in Sydney. The Group also had a record year of residential activity with 3,425 settlements and total pre sold revenue of circa $2.5 billion.

The Group made strong progress across its London sites. At Elephant & Castle three apartment buildings are under construction and at The International Quarter (TIQ) heads of terms are being negotiated with a major tenant, the Financial Conduct Authority, for the first commercial building and negotiations have commenced with a second major commercial occupier. The TIQ project has also secured 79% pre sales for the first residential release of 333 units.

In Asia, performance fees were earned following the completion of the Jem development. Lend Lease was announced as preferred to work with 1Malaysia Development Berhad on a joint venture agreement to develop the Lifestyle Quarter at Tun Razak Exchange in Kuala Lumpur. In the Americas construction profits continued to improve, driven by Military housing building work and several high rise apartment buildings that reached practical completion during the year.

The Group finished the year with robust global construction backlog revenue of $16.2 billion, with a further $1.8 billion of building and engineering work at preferred status, and a global development pipeline with an estimated end value of $37.7 billion.

“Safety is our number one priority and we strive to maintain the highest levels of safety across all our sites. We are proud of our continued progress in safety, particularly given the significant volumes of delivery currently being undertaken around the world. In the last year we have seen a reduction of 17.4% in our Lost Time Injury Frequency Rate,” said Mr McCann.

Trading Update

	30 June 2014 $m	30 June 20133 $m	% change
Total Profit before Tax	998.6	571.3	74.8%
Profit after tax
Australia	446.0	506.6	(12.0)%
Asia	73.7	112.6	(34.5)%
Europe	446.9	95.4	Large increase
Americas	78.9	53.7	46.9%
Total Operating Businesses	1,045.5	768.3	36.1%
Group Services	(126.1)	(150.5)	16.2%
Group Treasury	(96.5)	(67.4)	(43.2)%
Total Corporate	(222.6)	(217.9)	(2.2)%
Property investment revaluations	-	(1.4)	(100.0)%
Total Profit after Tax	822.9	549.0	49.9%

3 30 June 2013 figures have been adjusted to reflect the impact of the revised AASB 119 Employee Benefits standard

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Australia

• Profit after tax decreased to $446.0 million, down 12.0% on the prior year which included initial earnings relating to the first two commercial towers at Barangaroo South;

• The Development business saw improved residential activity with residential land lot and built-form settlements up 32% and a stable contribution from the retirement business;

• The Construction business results for the year of $104.3 million were lower than the prior year. The result was impacted by lower revenue, restructure charges of $27.0 million (post-tax), higher bid costs expensed in pursuing major engineering projects still in the pipeline of $18.3 million (post-tax) and an impact from the fire at Barangaroo South in March 2014 of $6.2 million (post-tax);

• Investment Management profit increased to $110.0 million following the Group’s increased investment, via the Lend Lease Trust, in APPF Commercial and APPF Industrial. The Lend Lease Trust is now fully invested and delivering higher passive income streams for the Group. FUM increased by 6% to $10.9 billion; and

• Key achievements during the year included securing a development agreement for Batman’s Hill in Melbourne (end development value approximately $1.5 billion). Barangaroo South achieved 100% pre sales for the first phase of residential apartments , increased pre commitments of 77% of commercial floor space in the first two towers and launch of the third and largest commercial tower with pre commitments of 34%. This brings total pre commitments to 61% across all three commercial towers.

Asia

• Profit after tax decreased to $73.7 million, down 34.5% on the prior year;

• The Development business benefited from performance fees associated with the delivery of Jem partially offset by origination costs incurred in relation to projects still in the pipeline;

• Construction profit decreased on the prior year due to a lower contribution from the telecommunications business in Japan. The prior year also included construction profits from the Jem development (now completed); and

• Investment Management profit of $65.8 million was up materially, reflecting performance fees earned from Lend Lease managed funds for the Jem and Setia City Mall developments.

Europe

• Profit after tax increased to $446.9 million, up significantly on the prior year reflecting the sale of Lend Lease’s interest in the Bluewater Shopping Centre in June 2014, generating a profit after tax of $485.0 million;

• Construction recorded a loss of $24.0 million for the year, impacted by difficult market conditions in the region in recent years and the sale of the Spanish construction business; and

• Key milestones included the acquisition of two new residential projects at Chiswick and Deptford, strong residential pre sales at Elephant & Castle and TIQ in London and launch of the first commercial phase at TIQ.

Americas

• Profit after tax increased to $78.9 million up 46.9% on the prior year;

• The Development business recorded a profit on the sale of the Winston-Salem Veterans Affairs Healthcare Center in North Carolina (currently in delivery);

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• Infrastructure Development profit remained stable, supported by the Group’s Military Housing Privatization Initiative with the US Department of Defense; and

• Construction profit increased to $50.9 million due to improved contribution from our Military Housing building work and performance in core markets of New York and Chicago.

Group Financials

At 30 June 2014, Lend Lease held a cash balance of $1,715.8 million and undrawn committed bank facilities of $1,309.6 million, providing substantial financial flexibility.

The average maturity of debt facilities extended to 4.7 years following early refinancing of corporate facilities in December 2013 and interest coverage of 8.1 times (EBITDA plus interest income, divided by interest costs, including capitalised finance costs) is above Group benchmarks.

Commenting on the Group’s financial strength, Group Chief Financial Officer, Tony Lombardo said, “In the last year we have invested significant capital into our development pipeline, with circa 3,000 apartments now under construction across Australia and the UK. The apartments will progressively complete in fiscal years 2015, 2016 and 2017, and are a material contributor to our circa $2.5 billion of pre sold revenue.

“Despite increased investment in the development pipeline operating cash flow was up significantly following the divestment of Lend Lease’s interest in the Bluewater Shopping Centre.

“We also took the opportunity to refinance our corporate cash and bonding facilities in December 2013 and increase the size of our Australian Medium Term Notes in June 2014, providing us with greater tenor, increased liquidity and reduced interest costs,” said Mr Lombardo.

Senior Management Changes

Lend Lease is also pleased to announce some important changes to its senior management team, effective immediately.

• Dan Labbad, Group Chief Operating Officer and CEO Europe, will become CEO, International Operations and will oversee Europe, Americas and Asia regions. Dan will be based in London following a transition of his responsibilities in Australia;

• Bob McNamara, CEO Americas, will become the Group Chief Risk Officer, based in Sydney, overseeing Group risk and operational excellence; and

• Denis Hickey, Chief Operating Officer Americas, will become CEO Americas, based in New York.

“These changes will maximise the opportunity to develop Lend Lease’s key leaders through broadening their exposure across the business as well as strengthening operational excellence and Lend Lease’s ability to grow its offshore earnings base,” said Mr McCann.

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Outlook

Mr McCann commented, “The outlook for Lend Lease remains positive. Our strategy is on track and is delivering significant growth for securityholders.

“Forward pre sales in our residential development business and embedded returns in our existing pipeline clearly underpin our earnings visibility over the next three years.

“We remain comfortable with consensus[4] net profit after tax expectation of $604 million to $622 million for FY15,” said Mr McCann.

Further information regarding Lend Lease’s results is set out in the Group’s financial results announcement for the year ended 30 June 2014 and is available on www.lendlease.com

ENDS

For further information, please contact:

Investors: Media: Suzanne Evans Natalie Causley Investor Relations Media Relations

Tel: 02 9236 6464 Tel: 02 9236 6865 Mobile: 0407 165 254 Mobile: 0410 838 914

4 FY15 NPAT consensus expectations based on a population of 10 sell-side analysts as at 26 August 2014

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Key Dates for Investors

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FY14 Results released to market / final distribution declared	27 August 2014
Securities quoted ex-distribution on the Australian Securities Exchange	1 September 2014
Final distribution record date	3 September 2014
Final distribution payment date	22 September 2014
Distribution statements and breakdown of tax components dispatched1	22 September 2014
Investor Day – Sydney	9 October 2014
Annual General Meetings – Four Seasons Hotel, Sydney	14 November 2014

1Individual statements, with a breakdown of tax components, will be dispatched with distribution statements on 22 September 2014. In addition, a Tax Estimator is now available within the Investor Centre on Lend Lease’s website (www.lendlease.com).

This Estimator has been provided to assist investors in calculating the taxable components of their Lend Lease Group distributions for the preparation of your Australian Individual Income Tax Return. The Estimator should be read together with the Lend Lease Group Tax Return Guide. A copy of the Lend Lease Group Tax Return Guide 2014 is available online on the Taxation section of the Lend Lease Group Investor Centre web page.

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LEND LEASE Full Year Results 2014 27 August 2014

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Important Notice

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This presentation has been prepared in good faith, but no representation or warranty, express or implied, is made as to the accuracy, adequacy or reliability of any statements, estimates, opinions or other information contained in the presentation (any of which may change without notice). To the maximum extent permitted by law, Lend Lease Corporation Limited, its controlled entities including Lend Lease Trust (together referred to as the ‘Group’) and their respective directors, officers, employees and agents disclaim all liability and responsibility (including without limitation any liability arising from fault or negligence) for any direct or indirect loss or damage which may be suffered through use or reliance on anything contained in or omitted from this presentation.

Each recipient should consult with, and rely solely upon, their own legal, tax, business and/or financial advisors in connection with any decision made in relation to the information contained in this presentation.

Prospective financial information has been based on current expectations about future events and is, however, subject to risks, uncertainties and assumptions that could cause actual results to differ materially from the expectations described in such prospective financial information.

The Group’s statutory results are prepared in accordance with International Financial Reporting Standards (IFRS). This presentation also includes certain non-IFRS measures in presenting the Group’s results. Certain non-IFRS financial measures have not been subject to audit or review. The Group’s auditors, KPMG, performed agreed upon procedures to ensure consistency of the presentation with the Group’s financial statements

A reference to 2014 refers to the 2014 financial year unless otherwise stated. All figures are in AUD unless otherwise stated.

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1[Performance and results ] highlights

2 Financial overview

3 Operational update

• 4 Outlook

• 5 Q&A

• 6 Appendices

PRESENTA

Image: Headland Park – Barangaroo

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Image: Construction on Adelaide Oval
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SAFETY

Zero fatalities Second consecutive year

17.4% reduction in Lost Time Injury Frequency Rate in the last 12 months

77%

of operations have not had a critical incident this year

PERFORMANCE & RESULTS HIGHLIGHTS 1 Steve McCann Group Chief Executive Officer and Managing Director

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Strong FY14 financial performance

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Development pipeline and Bluewater sale delivering a strong FY14 performance

Earnings

• EBITDA of $1,192.8 million for the year ended 30 June 2014

• Net profit after tax of $822.9 million for the year ended 30 June 2014 – up 50% following sale of Bluewater Shopping Centre interest

• Earnings per stapled security of 142.7 cents for the year ended 30 June 2014

Returns

• Final distribution declared of 49 cps; total distribution for FY14 of 71 cps

• ROE for the year ended 30 June 2014 of 18.2%[1]

Presales and Pipeline

• Estimated development pipeline end value of $37.7 billion, up $300m on prior year

• Circa $2.5 billion of pre sold revenue across residential apartments and communities, up 166% on prior year. Pre sold revenue to be recognised from pipeline over coming years

• Construction closing backlog revenue of $16.2 billion (secured), flat on prior year with a further $1.8 billion of building and engineering revenue at preferred status

• Funds under management of $16.3 billion, up 9% on prior year

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1. Return on equity (ROE) is calculated as the annual profit after tax divided by the arithmetic average of beginning, half year and year end securityholders’ equity

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Strong FY14 financial performance

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Regional performance

Australia

• Strong performance from Development, including higher contribution from Communities and Investment Management

• Improving construction margin in 2H14, despite restructure and bid costs expensed during the year

Asia

• Lower profit reflecting reduced revenue (Jem profit in comparative year FY13) and higher costs associated with pursuit of major projects in Malaysia

• Increased opportunities in mixed-use urban regeneration development including selection as the preferred developer by 1MDB for a Joint Venture at Tun Razak Exchange in Kuala Lumpur

Europe

• Substantial profit increase from sale of interest in Bluewater Shopping Centre

• London residential outlook positive with a strong development pipeline secured – including new sites at Chiswick and Deptford

• Early signs of improvement in some segments of the construction market

Americas

• Strong momentum in Construction

• Ongoing focus on expanding healthcare and residential development in select locations

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Long-term earnings visibility from major projects

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Project	**End value1 **	FY14	FY15	FY16	FY17+
Integrated development projects (mixed use sites)
Barangaroo South, Sydney	$6.0 billion				
Darling Harbour Live , Sydney - Haymarket and Hotel development	$1.5 billion	-			
Victoria Harbour, Melbourne	$4.5 billion				
Richmond, Melbourne	$0.4 billion				
Batman’s Hill, Melbourne	$1.5 billion	-	-	-	-
RNA Showgrounds, Brisbane	$2.5 billion	-			
Waterbank, Perth	$1.0 billion	-	-	-	-
Jem, Singapore	S$1.8 billion	
Elephant & Castle, London	₤1.5 billion	-			
The Wharves, Deptford, London	₤0.4 billion	-	-	-	-
The International Quarter, London	₤1.3 billion				
Integrated Public Private Partnership projects
Sunshine Coast University Hospital	$1.8 billion				
Darling Harbour Live – Convention Centre	$1.1 billion				
Eastern Goldfields Regional Prison	$0.25 billion	-	-	-	
New Bendigo Hospital	$0.63 billion				

1 Reflects 100% of the original project end development value – all AUD unless otherwise stated

Currently in planning Active project Expected financial close [Expected earnings contribution ]

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Growing returns for Securityholders

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Net Profit After Tax ($ million)

Distributions (cents per share)

Return on Equity (%)

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1000 100 25.0%
4 year CAGR 4 year CAGR Over 4 years up
24% 22% 390 bps
800 80 20.0%
600 60 15.0%
400 40 10.0%
200 20 5.0%
0 0 0.0%
NPAT Distributions ROE
$m
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Distributions
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FY11 FY12 FY13 FY14 FY11 FY12 FY13 FY14

FY11 FY12 FY13 FY14

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Strategy continuing to deliver growth

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2009 – 2013 targets 2014 current status

Safety

Returns

Profitability Pipeline

Focus

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
Introduced Global Minimum Requirements

Only operate in regions / areas where we
can ensure safety
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
Enhance returns for securityholders
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
Increase profitability – sustainability and
diversification of income
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Extend development pipeline across
integrated mixed use projects
Broaden construction capabilities
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
Refocus geographic footprint

Operational Excellence and delivery
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
Zero fatalities

LTIFR rate down 17.4% in the last year
and down 39% in the last five years
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
Four year TSR of 99% to 30 June 2014

Distribution – four year CAGR of 22%
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
ROE – up 390 bps over four years

NPAT – four year CAGR of 24% and an
increase in passive income streams via LLT
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
Urban regeneration – 65% of pipeline

Positioned to leverage $50+ billion pipeline
of Australian infrastructure spend
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Focus on core growth initiatives including
Urban Regeneration, Healthcare and
Infrastructure
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FINANCIAL OVERVIEW 2 Tony Lombardo Group Chief Financial Officer

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Earnings diversification by segment

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FY14 Performance Metrics

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$681.9 $37.7
36.2% 3,425
Development million billion
Residential
NPAT NPAT Mvmt FY13 EBITDA margin Pipeline
Settlements
$16.2
Infrastructure 8.7% 5 $402m
million
Development
NPAT NPAT Mvmt FY13 EBITDA margin PPP Projects in Committed &
Australia Invested Equity
$144.4 $16.2 $10.2
2.5%
Construction million billion billion
NPAT NPAT Mvmt FY13 EBITDA margin Backlog New Work Secured
$203.0 $16.3 $10.7
Investment 84.1%
million billion billion
Management
NPAT NPAT Mvmt FY13 EBITDA margin FUM AUM
Corporate/ $(222.6) 5.4% $0.7 5.7%
million billion
Treasury
NPAT NPAT Mvmt FY13 Weighted Net Debt Gearing
Average Cost
of Debt
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Construction investment and restructuring charges

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• In the last 12 months Construction operations in Australia have been restructured and repositioned to leverage future pipeline of engineering and building work

• FY14 profit contribution impacted by restructure charges and substantial bid costs expensed during the year

• 1 2 3 Non-Recurrent

• Restructure costs Bid Costs •

• • • Impact of fire at Barangaroo During FY14 Australia Substantial bid costs Construction restructure associated with large (primarily timing) of $6.2 million ($8.9 million pre-tax)

• charges of $27.0 million engineering pipeline ($38.5 million pre-tax) as including Northconnex, East business re-focused to West Link and Westconnex Building, Engineering and stages 1a & 1b of $18.3 Services million ($26.2 million pre-tax)

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Apartment production and settlement

	Apartments – pre sold and in delivery	Pre-sold % / pre-sold $m revenue	FY14	FY15	FY16	FY17+
Barangaroo South	2 apartment buildings: Anadara and Alexander  159 units	100% ~$300 million
Darling Square	3 apartment buildings: Darling One, St Leon &Wirth House  538 units	100% ~$580 million1
Victoria Harbour	2 apartment buildings  251 units (Concavo)  578 units (888 Collins)	91% 59% ~$460 million
RNA Showgrounds	5 apartment buildings: The Green  356 units	92% ~$160 million
Richmond	1 apartment building: Studio 9  203 units (completed)	88%
Wandsworth	1 apartment building: Cobalt Place  104 units	78% ~$75 million
Elephant & Castle	3 apartment buildings:  284 units (One The Elephant)  235 units (Trafalgar Place)  360 units (South Gardens)	89% 93% 60% ~$570 million
The International Quarter	2 apartment buildings: Glasshouse Gardens  333 units	79% ~$200 million

14

Indicates profit earned in financial year

1 Darling Square – 227 units pre-sold at 30 June 2014. 311 units pre-sold in 1H15.

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Cash investments during the year

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Net cash movements 30 June 2013 to 30 June 2014

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1H14:
 Investment in APPF
3000 1H14 : Funds: $(464)m
 Includes ~$(430)m of  Retirement village
production capital invested acquisitions:$(64)m
into development projects  Other: $(76)m
2500 1H14:
 Draw down of corporate
facilities, offset by
(614.5) repayment of Bluewater
2000 822.4 lease liability
8.8
(110.4)
1500 2H14 :
 Sale of 10% 2H14 :
2H14 : of LLITST to  Medium Term
Includes proceeds of APG Notes issued
1000  $1,263m from sale of $100m
Bluewater
 1,715.8
1,609.5 ~$(551)m of
production capital
invested in
500
development projects
 ~$540m of other
operating cashflow
0
30 Jun 13 Opening FY14 Cashflow - FY14 Cashflow - FY14 Cashflow - FY14 FX effects 30 Jun 14 Closing
Cash Balance operating activites investing activities financing activities Cash Balance
$ million
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Indicative net cash flow from major projects in-delivery

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	Overview	FY14	FY15	FY16	FY17
Communities	Net cash proceeds Assuming 2,500 annual lot settlements	Cash Positive	Cash Positive	Cash Positive	Cash Positive
Apartments	Net cash proceeds 19 apartment buildings currently in delivery	Investing	Investing	Cash Positive	Cash Positive
Commercial	Net cash proceeds Barangaroo office towers – development and investment; commercial tower at RNA; commercial tower at TIQ	Investing	Investing	Cash Positive	Cash Positive
Infrastructure Development	Net cash invested Secured Australian PPP projects	Investing	Investing	Investing	Cash Positive
Other	Net cash proceeds Sale of Bluewater Shopping Centre	Cash Positive
Total		Cash Positive	Investing	Cash Positive	Cash Positive

All cash flow based on current portfolio/investments

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Financial strength supporting future growth

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INVESTMENT ACCESS TO LIQUIDITY & GRADE RATINGS CAPITAL FUNDING 1  Company 2  Disciplined capital 3  ~$3.0 billion of cash and commitment to management program undrawn facilities as maintenance of  at 30 June 2014 Demonstrated access investment grade to 3[rd] party capital  ~$1.3 billion net increase ratings for both  in cash from sale of Established wholesale financial and Bluewater investment operational reasons  management platform Gearing of 5.7%  as at 30 June 2014 Expanded relationships  with global pension Prudent maturity profile, and sovereign wealth no material funds concentrations

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Capacity to fund pipeline in a manner consistent with investment grade ratings Ability to withstand difficult market conditions and accommodate unanticipated events

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OPERATIONAL UPDATE 3 Dan Labbad CEO International Operations

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Major projects progress during 2014

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Project	**End Value1 **	Progress during 2014
Barangaroo South, Sydney	$6.0 billion	100% pre sales for first residential apartments (Anadara and Alexander) Launch of the third commercial tower – PwC and HSBC as anchor tenants
Darling Harbour Live, Sydney	$2.6 billion	Financial close reached for $1.1 billion PPP component in December 2013 First residential apartments at Darling Square – sold out on launch
Victoria Harbour, Melbourne	$4.5 billion	Concavo under construction; launch and pre sales at 888 Collins Street Dock Library delivered – cross laminated timber construction
Batman’s Hill, Melbourne	$1.5 billion	Development Agreement secured for redevelopment of site in July 2013
Richmond, Melbourne	$0.4 billion	Stage 1 now complete Planning approvals for stage 2 submitted
RNA Showgrounds, Brisbane	$2.5 billion	Construction underway on five apartment buildings (The Green) and one commercial tower Planning approvals for next residential building (Sol Luna) submitted
Waterbank, Perth	$1.0 billion	Continuing to work with the local authority to satisfy conditions precedent, with financial close expected end of calendar year 2014
Elephant & Castle, London	₤1.5 billion	Construction underway on One the Elephant and Trafalgar Place (519 apartments) Next phase of residential South Gardens (360 units) is moving into delivery
The Wharves, Deptford	₤0.4 billion	New site acquired in 2H14 – over 900 apartments. Pre sales to commence shortly
		333 residential units (Glasshouse Gardens) – 79% pre sold and now under construction
The International Quarter, Stratford	₤1.3 billion	Negotiating a heads of terms to work together with a major tenant, the Financial Conduct Authority, for the first commercial building at The International Quarter and in negotiation
		with a second major commercial occupier

1 Reflects 100% of the original project end development value – all AUD unless otherwise stated

19

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Australia business update

Overview

• Positive momentum maintained in residential

• Development  Record year for residential settlements 3,248  1,283 built form / apartments pre sold

• Financial close reached for Darling Harbour Live in

• Infrastructure 1H14 Development  Preferred status for Ravenhall Prison (advisory role)

• Improving EBITDA margins – up 50bps in 2H14

• Construction  Strong future pipeline of economic infrastructure with $1.8 billion of building and engineering work currently at preferred status

Construction	Strong future pipeline of economic infrastructure with $1.8 billion of building and engineering work currently at preferred status
	Increased investment income from investments made
	in APPF Commercial and APPF Industrial
Investment Management	Sale of 10% stake in LLITST to APG
	Higher FUM due to Barangaroo and growth across the
	APPFplatform
	Improved residential market in both apartments and
	communities; supportive macro environment
Trends	Strong internal building pipeline despite weaker market
	conditions in commercial
	Positive outlook for roads/civil works in construction

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EBITDA
300
FY13 FY14
250
200
150
100
50
0
Development Infrastructure Construction Investment
Development Management
$m
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Image: Artist Impression – view of Darling Square, Sydney

20

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Asia business update

Overview
	Development performance fees from delivery of
Development	Jem; partially offset by bid costs incurred during the period (relating to development projects in
	Malaysia)
	Jem office construction completed in 1H14
Construction	Lower contribution from telecommunications
	business in Japan
	Fund performance fees arising from both Jem and
Investment	Setia City Mall
Management	Higher FUM primarily due to increase in the fair market value of assets and positive foreign
	exchange movements
	Strong macro back-drop
	Disciplined expansion approach to Asian growth
	markets – focus on Singapore, Malaysia and China
Trends	New pipeline of opportunities including signing a
	binding agreement to work exclusively with 1MDB
	to finalise a joint venture for the development of
	the Lifestyle Quarter at Tun Razak Exchange
	(TRX) in Kuala Lumpur

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EBITDA
100
FY13 FY14
80
60
40
20
0
-20
Development Construction Investment
Management
$m
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Image: Setia City Mall, Kuala Lumpur

21

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Europe business update

Overview
	Material increase in profit due to the sale of Bluewater
	to Land Securities in June 2014 delivering profit of
	$485.0 million
Development	Strong pre sales of $871.3 million including Elephant
	& Castle, TIQ and Wandsworth. 1,095 apartments
	nowpre-sold
	Profit down on FY13 primarily due to $16.0 million
	provision associated with the Global Renewables
Infrastructure	project in Lancashire
Development	Post balance date, Global Renewables project was
	exited and the UK Facilities Management business
	was sold to GDF Suez
	Loss for the year driven by difficult market conditions
Construction	in recent years, disposal of our Spanish construction
	business and restructuring charges
	Profit attributable to net operating income from
Investment	Bluewater1and an increase in contribution from the
Management	UK Infrastructure Fund and Lend Lease Retail
	Partnership
	Positioned to leverage buoyant inner London market –
	particularly residential: new projects acquired at
Trends	Deptford and Chiswick adding in excess of 1,000 units to the closing backlog
	Discipline maintained in competitive construction
	markets

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EBITDA
2007
FY13 FY14
150
100
50
0
-50
Development Infrastructure Construction Investment
Development Management
$m
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Image: Bluewater Shopping Centre, UK

1 FY14 included net operating income from a 30% interest in Bluewater Shopping Centre which was sold in June 2014

22

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Americas business update

Overview

	Two health care development projects reached
	operational status; two are under construction; two
Development	are at preferred status
	Sale of Winston-Salem Veteran Affairs Healthcare
	Centre in North Carolina. Project is now in delivery
Infrastructure	Financial close reached for the Fort Hood Stage 3
Development	project
	Improved EBITDA margins in building and from the
Construction	Military Housing construction work
	$2.7 billion of new work secured – record backlog
	revenue of $5.4 billion
	Continued improvement in broader construction
	market
	Broader economic conditions improving in core
Trends	urban markets particularly high-rise residential
	developments
	Ongoing focus on expanding healthcare and
	residential development in select locations

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EBITDA
100
FY13 FY14
80
60
40
20
0
-20
Development Infrastructure Construction
Development
$m
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Image: Artist Impression 432 Park Avenue, New York

23

4 OUTLOOK Steve McCann Group Chief Executive Officer and Managing Director

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Outlook

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• Macro conditions remain positive for residential markets – supporting the outlook for Australia and UK development

• Circa $2.5 billion of pre sold revenue across communities and apartments, up 166%

• Record year for residential settlements, 3,425 up 36%

• Australian construction environment buoyed by future pipeline of domestic economic infrastructure, including preferred status for NorthConnex

• International markets delivering geographic diversity

• Progress on disciplined approach to opportunities in Asian growth markets including Tun Razak Exchange in Kuala Lumpur

• Expanded London residential pipeline leveraging strong residential trends

• Leading urban construction company in the Americas with opportunities to expand into development projects

• Strong growth trajectory and earnings visibility with embedded earnings in our existing pipeline

• Remain comfortable with consensus[1] expectations for FY15 NPAT of $604 million to $622 million

1FY15 NPAT consensus expectations based on a population of 10 sell-side analysts as at 26 August 2014

25

5 Q&A

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Steve McCann Group Chief Executive Officer and Managing Director Tony Lombardo Group Chief Financial Officer Dan Labbad CEO International Operations

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Development

Division overview

• Operates in all four major geographic regions. Involved in the development of urban communities, inner-city mixed-use developments, apartments, retirement, retail, commercial assets and healthcare assets

Market Position

• Leading portfolio of urban regeneration projects in Australia and UK

• Largest senior living and retirement platform in Australia

• Major participant in communities/builtform, retail and commercial development in Australia

Key Facts

• Major development urban regeneration projects represent 65% of pipeline

• Residential land – 57,610 units

• Residential built-form – 19,109 units

• Retirement villages – 12,824 units

Earnings contribution

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61 [% ]
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$37.7[billion ]

Estimated global development pipeline end value

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Revenue[$ million ]

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3000
2500
2000
1500
1000
500
0
FY12 FY13 FY14
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EBITDA[$ million ]

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1000
800
600
400
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0
FY12 FY13 FY14
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27

Unless stated, all figures as at 30 June 2014 – earnings contribution are EBITDA percentages before Corporate costs

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Infrastructure Development

Earnings contribution

Division overview

• Operating across Australia, Europe and the Americas. Partnership via PPPs with government and the private sector to fund, develop and manage essential community and economic infrastructure

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2 [% ]
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Market Position

• Delivery of over $12 billion of projects over the last 15 years

• Leading provider of privatised military housing in the US (for Department of Defense)

Key Facts

• 5 Australian PPP projects

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[million ]
$402
Invested and Committed Equity
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• One major PPP project reaching financial close in FY14, versus three PPP projects in FY13

• US privatised military housing: units under management – 54,655 (secured and preferred)

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Revenue[$ million ]

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300
250
200
150
100
50
0
FY12 FY13 FY14
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EBITDA[$ million ]

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150
125
100
75
50
25
0
FY12 FY13 FY14
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28

Unless stated, all figures as at 30 June 2014 – earnings contribution are EBITDA percentages before Corporate costs

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Construction

Division overview

• Construction capabilities spanning building, engineering and services

• Well positioned to leverage significant pipeline of economic infrastructure in Australia

• Largest builder of urban apartment buildings in the US and established position in UK

Market Position

• A leading participant in Australia in core markets of commercial, healthcare, social and economic infrastructure construction

• Circa 300 projects in delivery globally

Key Facts

• Backlog revenue by capability

• Building 80.9%

• Engineering 12.8%

Earnings contribution

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19 [% ]
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[billion ] $16.2

Backlog revenue

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Revenue[$ million ]

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12500
10000
7500
5000
2500
0
FY12 FY13 FY14
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EBITDA[$ million ]

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500
400
300
200
100
0
FY12 FY13 FY14
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• Services 6.3%

29

Unless stated, all figures as at 30 June 2014 – earnings contribution are EBITDA percentages before Corporate costs

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Investment Management

Earnings contribution

Division overview

• A leading wholesale investment management platform in Australia

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18 [% ]
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• Includes the Group’s ownership interests in property and infrastructure investments

Market Position

• Platform comprises 16 funds

• 22 retail centres under management

• Circa 170 institutional investors invested across platform of funds

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Revenue[$ million ]

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400
300
200
100
0
FY12 FY13 FY14
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EBITDA[$ million ]

Key Facts

• FUM of $16.3 billion

• Retail AUM of $10.7 billion

• Investments managed at (market value) ~$1.2 billion

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$16.3 [billion ]
Funds under management
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300
250
200
150
100
50
0
FY12 FY13 FY14
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30

Unless stated, all figures as at 30 June 2014 – earnings contribution are EBITDA percentages before Corporate costs

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Financial Performance

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	30 June 2014 $m
Revenue
Revenue and other income	14,125.8
Cost of sales and other expenses	(12,992.3)
Share of profit of equity accounted investments	59.3
EBITDA	1,192.8
Depreciation and amortisation	(87.7)
EBIT	1,105.1
Net finance costs	(106.5)
Operating profit before tax	998.6
Income tax expense	(175.3)
External non-controlling interests	(0.4)
Profit after tax attributable to Securityholders	822.9

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Statement of financial position

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	30 June 2014 **$m **
Assets
Cash and cash equivalents	1,715.8
Inventories	3,131.5
Equityaccounted investments	578.0
Investmentproperties	4,832.0
Other financial assets	1,022.5
Other assets	4,472.0
Total assets	15,751.8
Liabilities
Non current borrowings and financingarrangements	2,347.0
Other financial liabilities	99.6
Other liabilities	8,436.4
Total liabilities	10,883.0
Net assets	4,868.8

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Debt maturity and on balance sheet debt

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Source	Face value	Available **Facility1 **	Drawn at 30 June **20141 **	Expiry
Syndicated multi-option facility2	$1,500 million	$1,498.5 million	$873.5 million	Various3
UK bond issue	£300 million	$539.6 million	$539.6 million	Oct-21
Club revolving credit facility	£330 million	$600.0 million	$0.0 million	Various4
US Private Placement	US$200 million	$214.9 million	$214.9 million	Various5
Singapore bond	S$275 million	$234.0 million	$234.0 million	Jul-17
Australian Medium Term Notes	$475 million	$475.5 million	$475.5 million	Various6

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

2. The syndicated multi-option facility refinanced the $975 million syndicated credit facility and $225 million bilateral credit facility in December 2013

3. $600 million expires in December 2017 and $900 million expires in December 2018

4. £165 million expires in December 2016 and £165 million expires in December 2017

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

6. $250 million expires in November 2018 and $225 million expires in May 2020

All values in AUD unless otherwise stated

33

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Key debt metrics

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	30 June 2014	30 June 2013
Credit Rating - S&P/Moody’s	BBB- / Baa3 (Stable)	BBB- / Baa3 (Stable)
Gross borrowings to total tangible assets1	16.9%	17.1%
Net debt to total tangible assets, less cash2	5.7%	5.4%
Interest coverage3	8.1x	6.4x
Undrawn facilities ($ million)	1,309.6	1,099.4
Average debt duration	4.7 years	4.3 years
Weighted average cost of debt including margins (daily average for the year)	5.4%	5.9%
Fixed / floating debt	76% / 24%	77% / 23%

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

2 Net debt divided by total tangible assets, less cash

3 EBITDA plus interest income, divided by interest finance costs, including capitalised finance costs

All values in AUD unless otherwise stated

34

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Key dates for investors

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	Date
FY14 Results released to market / final distribution declared	27 August 2014
Securities quoted ex-distribution on the Australian Securities Exchange	1 September 2014
Final distribution record date	3 September 2014
Final distribution payment date	22 September 2014
Distribution statements and breakdown of tax components dispatched1	22 September 2014
Investor Day – Sydney	9 October 2014
Annual General Meetings – Four Seasons Hotel, Sydney	14 November 2014

1 Individual statements with a breakdown of tax components will be dispatched with distribution statements on 22 September 2014. In addition a Tax Estimator is now available within the Investor Centre on Lend Lease’s website (www.lendlease.com).

This Estimator has been provided to assist investors in calculating the taxable components of their Lend Lease Group distributions for the preparation of your Australian Individual Income Tax Return. The Estimator should be read together with the Lend Lease Group Tax Return Guide. A copy of the Lend Lease Group Tax Return Guide 2014 is available online on the Taxation section of the Lend Lease Group Investor Centre web page.

LEND LEASE Full Year Results 2014 27 August 2014

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