LENDLEASE GROUP — Interim / Quarterly Report 2011

Feb 16, 2011

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17 February 2011

The Manager Companies Section ASX Limited

The Manager Companies Section New Zealand Stock Exchange Limited

Pages: Thirty One (31) Pages

Half Year Results – December 2010

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

• ASX and Media Announcement

• Results Presentation

ENDS

For further information please contact:

Sally Cameron Lend Lease Group Tel: 02 9236 6464

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

1

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

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

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ASX Announcement

Lend Lease delivers strong profit growth of 17.2%

17 February 2011

• Operating profit after tax of A$220.2 million for the half year, 17.2% above prior period

• Statutory profit after tax of A$226.5 million for the half year, 10.5% above prior period

• Interim distribution of 20 cents per security, franked to 50%

• Continued pipeline momentum across the Group

• Strong balance sheet with capacity to fund pipeline of opportunities

• Signed agreement to acquire Valemus businesses

Profit after Tax

Lend Lease delivered an operating profit after tax for the half year ended 31 December 2010 of A$220.2 million. This represents a 17.2% increase on the prior period despite a negative currency impact of A$10.9 million. The Group’s statutory profit after tax for the half year of A$226.5 million includes net property investment revaluation gains of A$6.3 million after tax.

	Dec 2010	Dec 2009
	A$m	A$m
Operating profit after tax	220.2	187.9
Property investment revaluations	6.3	17.0
Statutory profit after tax	226.5	204.9
Interim distribution1	20 cps	20 cps
Earnings per security (EPS) on operating profit after tax2	38.9 cps	40.1 cps

1 The interim distribution for the current period will be 50% franked, December 2009 was 100% franked. 2 Based on operating profit after tax and weighted average number of securities on issue including treasury securities. December 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 book build accelerated renounceable offer at A$7.70 per new security.

Lend Lease declared an interim distribution of 20 cents per security, franked to 50%. This represents a payout ratio of 51% of operating profit after tax for the half year.

Lend Lease has reactivated its Distribution Reinvestment Plan (DRP) to allow securityholders the opportunity to reinvest their distributions in the Group. The securities will be offered at a 2.5% discount to the market value of Lend Lease stapled securities.[3] The DRP will be available for the interim distribution payable on 30 March 2011.

3Market value of Lend Lease’s stapled securities based on the arithmetic average of the daily value weighted average price for 10 consecutive business days after the record date.

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

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

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Project Update

During the period Lend Lease continued to add to its pipeline of opportunities and achieved a number of milestones on major projects.

Australia

• The New South Wales (NSW) government approved the Barangaroo South Concept Plan amendment and a Planning Application was lodged for the first commercial building on the site;

• All conditions precedent were met for the project agreement on the Royal National Agricultural and Industrial Association of Queensland project in Brisbane;

• Secured the 4,500 lot Toolern master-planned urban community project in Victoria as preferred developer;

• Obtained approval to progress the 4,800 lot Calderwood development in NSW; and

• • An agreement was reached with Japanese house builder, Sekisui House Australia, involving a number of master-planned urban community projects and apartment developments.

Asia

• In Singapore, the purchase of the Jurong Gateway mixed-use site in conjunction with the Lend Lease managed Asian Retail Investment Fund was finalised.

Europe

• The Lend Lease managed UK Infrastructure Fund was launched raising £220m of capital. The fund purchased established healthcare, education and accommodation assets from Lend Lease which contributed significantly to the Group’s capital recycling in the period; and

• Lend Lease continued to progress its major projects signing a conditional agreement with the London Borough of Southwark for the regeneration of Elephant & Castle and meeting all conditions on the Framework Agreement for the second stage of the Stratford City development.

Americas

• The Infrastructure Development business reached financial close on the North Haven Communities project in Alaska and was appointed to implement the second phase of the Privatised Army Lodgings program;

• A settlement was reached with the New York City Department of Investigation in relation to its investigation into billing practices in New York which restores the Group’s standing to win New York City agency work; and

• The business substantially reduced its exposure in relation to the World Trade Center litigation with liabilities, if any, arising out of the debris removal effort now limited to available insurance.

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

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

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

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Acquisition of Valemus

In December 2010, Lend Lease announced that it had entered into an agreement with Bilfinger Berger SE to acquire 100% of Valemus Australia (Valemus), the parent company of Abigroup, Baulderstone and Conneq. The acquisition will add capability in the engineering and infrastructure market and diversify Lend Lease’s position in the construction sector. From a geographic point of view, this acquisition will increase the Group’s weighting to Australia.

Lend Lease will fund the acquisition from existing cash reserves and a new five year A$225 million debt facility. The transaction remains subject to regulatory approval and other conditions precedent and is expected to complete in the first quarter of the 2011 calendar year.

Group Debt

The Group is in a strong liquidity position with cash reserves of A$1.4 billion and undrawn committed bank facilities of A$0.6 billion. The average maturity of the Group’s drawn debt facilities is 4.8 years and the Group’s interest coverage of 6.5 times significantly exceeds the Group’s banking covenant.

Group Chief Financial Officer, Brad Soller stated that the Group’s gearing post the Valemus acquisition is expected to be approximately 7% after taking account of the significant Valemus cash balance on acquisition.

“Lend Lease maintains its investment grade credit rating with both Standard & Poors (BBB-) and Moody’s (Baa3) with a stable outlook from both agencies. The Group’s financial strength, focus on capital recycling and access to third party capital gives us financial flexibility to fund our development pipeline and other opportunities.”

Outlook

Commenting on the outlook for Lend Lease, Group CEO and Managing Director, Steve McCann said Lend Lease delivered a strong first half result that positions the Group well for the full year.

“The Australian economy continues to perform well and underpins the strength of the construction and infrastructure sectors. The acquisition of Valemus and the progress we have made on our key projects ensures we are well placed to capitalise on this strength.

“We are seeing some encouraging signs offshore and are well positioned to leverage a recovery in the US and UK markets and continue to benefit from the growth in Asia through our retail and mixed-use development platform.

“We are positive about the Group’s operating outlook. We will continue to drive operational excellence and cost efficiencies and have significant opportunities and clear plans as to where we will allocate our capital.

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

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

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

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“The Group’s balance sheet, diversified portfolio and project pipeline provide a strong platform for future earnings growth,” said Mr McCann.

ENDS

For further information, please contact:

Investor Relations: Sally Cameron Group Executive - Investor Relations Tel: 02 9236 6464

Corporate Affairs: Iwona Polski Media & External Communications Manager Tel: 02 9237 5034

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

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

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

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Half Year Results February 2011

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Presentation Outline

1. Results Highlights 2. Operational Update 3. Financials 4. Outlook

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Strong result sets up full year

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	Dec 2010	Dec 2009	%
	A$m	A$m	change
Revenue	4,366.7	5,593.3	(22)
EBITDA from operating businesses	350.3	313.7	12
EBITDA margin (%)	8.0	5.6	43
Operating profit after tax	220.2	187.9	17
Statutory profit after tax	226.5	204.9	11
Earnings per security1(cents)	38.9	40.1	(3)
Distribution per security2 (cents)	20.0	20.0	-
Return on equity3 (%)	13.4	16.4	(18)

1. Based on operating profit after tax and weighted average number of securities on issue including treasury securities. December 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 book build accelerated renounceable offer at A$7.70 per new security.

2. The interim distribution is franked to 50% and represents a payout ratio of 51% of operating profit after tax. The prior period interim distribution was 100% franked and represented a payout ratio of 49% of operating profit after tax.

3. Return on equity is calculated as the half year statutory profit after tax divided by the weighted average equity for period multiplied by two. This was done to approximate an annual return on equity.

3

Good performance and progress

• 1[st] half operating profit after tax of A$220.2m, up 17.2%

• Continued to progress pipeline of projects and secure market leading positions

• Australia – Barangaroo South, RNA, Sekisui House Australia, Toolern

• Asia – Jurong Road

• Europe – launched Infrastructure Fund

• Americas – secured Phase B of Privatised Army Lodgings

• Directionally positive offshore

• Agreement to acquire 100% of Valemus

• Retained financial flexibility to fund development pipeline

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Barangaroo South, Sydney

4

Positive performance across portfolio

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	Dec 2010	June 2010
	A$m	A$m
Funds under management (A$b)	10.7	10.1
Investments (A$b)	1.8	2.0
Residential units - zoned	63,068	54,615
Residential units - unzoned	26,148	33,295
Construction backlog revenue (A$m) 1	6,556.1	7,152.7
Number of PPP projects	41	40

1 . This does not include backlog from the acquisition of Valemus.

5

Operational Update

Continued focus on key property growth trends

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Urban Regeneration

 Leading urban renewal projects in Australia, UK and Singapore

• Focus on delivery and execution

Ageing Population

 No. 1 senior living platform in Australia

 70 retirement villages and 32 aged care facilities

Infrastructure

• Number of new PPP projects impacted by slowdown in government programs

• Valemus acquisition gives the Group significant capability in the Australian engineering and infrastructure market

Sustainability

• Continued focus on commercialising sustainability

Fund Growth Platform

• Continue to service our wholesale investor base

• Targeted opportunities which meet investor appetite

7

Acquisition of Valemus in line with strategy

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Strategic rationale

• In line with Group strategy to capitalise on key growth trend of Infrastructure

• Ability to self perform internal Lend Lease infrastructure work

• Order book in excess of A$5.3b as at December 2010

Performance

• No material change to acquisition assumptions

• Significant visibility on future pipeline (in excess A$1.85b of work pending)

Strong earnings accretion

• The transaction is expected to provide ~15% EPS accretion on a full year basis in the financial year ending 30 June 2012

• Minimal contribution to FY2011 earnings

Balance sheet

• Lend Lease retains significant financial flexibility to fund its development pipeline

• Rating agencies have confirmed Lend Lease’s investment grade credit rating with a stable outlook

Timing

• Expected to complete in 1[st] quarter 2011

• Completion subject to certain regulatory and other conditions

8

Geographical earnings split

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December 2010 [1]
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December 2009[1]

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Americas Americas
10% 9%
Australia
50%
Europe
29%
Australia
Europe
52%
34%
Asia Asia
6% 10%
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1 . Based on Operating Profit after Tax from operating businesses.

9

Sector earnings split

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December 2010[1]

December 2009[1]

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Infrastructure
Investment
Investment Development Infrastructure
Management 27% Management Development
23% 21%
23%
Project Project
Management & Management
Construction &
20% Development Construction Development
30% 25% 31%
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1. Based on Operating Profit after Tax from operating businesses.

10

Australia business update

• Residential settlement volumes steady

• Pre-sales up 35%

• Average residential land sales price increased by 18%

Development

• Senior living – reflects 100% ownership

• Focus on rezoning and replenishing backlog

• Continued ca ital rec clin p y g

• Lower profit compared to prior period

• A number of major projects were < 50% complete

Project Management & Construction

• Backlog revenue of A$3.2b

• Profit increased due to income from ING retail assets

Investment Management

• FUM increased by 7% to A$7.6b

• Small loss due to costs of bidding on projects, including New Royal Adelaide Hospital

Infrastructure Development

• 1 of 3 shortlisted on Victoria Comprehensive Cancer Centre in Melbourne

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Operating Profit	Dec 2010	Dec 2009
after Tax	A$m	A$m
Development	79.8	44.0
PM & C	43.5	61.2
Investment Management	17.2	11.9
Infrastructure Development	(3.8)	(0.9)
Total	136.7	116.2

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Gold Coast University Hospital, Queensland

11

Australia – major projects progressed

• Concept Plan amendment approved

• Approval received to commence basement works

Barangaroo South

• Planning application lodged for first commercial building

• Development Agreement now unconditional

RNA

• Progressing approvals for first residential development

• Sale of 50% interest in Serrata development in Melbourne

Sekisui House

• Sale of land at Hyatt Coolum and a 50% interest in the Hyatt Coolum Resort

• Pursuing development opportunities

• Focus on rezoning and replenishing backlog

Residential land projects

• New projects secured -Toolern, Alkimos

• Zoning progressed – Calderwood,Yarrabilba

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Barangaroo South, Sydney

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RNA Showgrounds, Brisbane

12

Asia business update

• Finalised purchase of Jurong Gateway mixeduse site with Asian Retail Investment Fund

Development

• New work secured up 163% - including major project in Taiwan

Project Management & Construction

• Profitability ratio maintained at 56%

• FUM increased to A$2b due to Asian Retail Fund being fully invested

Investment Management

• Lower profit as previous period included final distribution from APIC I

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Operating Profit	Dec 2010	Dec 2009
after Tax	A$m	A$m
Development	(0.2)	0.5
PM & C	10.7	12.5
Investment Management	5.3	8.5
Total	15.8	21.5

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Nokia Beijing Campus, China

13

Europe business update

 Approvals for major projects on track Development  Pier Walk building sold  New work secured up 42% - includes Regents Project Place and Scottish National Arena projects Management &  Market conditions remain tough but activity Construction levels showing signs of improvement  Launch of £220 million Infrastructure Fund  Investment Extension of Retail Partnership for 7 years Management  Sale of Group’s interest in Overgate shopping centre Infrastructure  Sale of PPP assets to Infrastructure Fund Development

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Operating Profit	Dec 2010	Dec 2009
after Tax	A$m	A$m
Development	4.8	24.5
PM & C	4.4	2.1
Investment Management	27.1	14.2
Infrastructure Development	58.3	23.2
Total	94.6	64.0

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Greenwich Peninsula, UK

14

Americas business update

Development Project Management & Construction Investment Management Infrastructure Development

• Expected to complete acquisition of US healthcare developer for US$10 million

• Settlement reached with NY City DOI – restores standing to win NYC agency work

• WTC – liabilities, if any, are now limited to available insurance

• Business made small loss after tax

• Increase in activity levels – healthcare opportunities

• Backlog Revenue up 24%

• Valuation of King of Prussia stable

• Secured US$350m second phase (Group B) of Privatization of Army Lodgings program

• Reached financial close on US$377m Wainwright Greely project in Alaska

• Includes costs incurred in bidding for opportunities in Canada

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Operating Profit	Dec 2010	Dec 2009
after Tax	A$m	A$m
Development	(0.5)	0.1
PM & C	(3.2)	(19.9)
Investment Management	12.4	11.6
Infrastructure Development	20.2	27.2
Total	28.9	19.0

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Privatization of Army Lodgings program
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15

Financials

Profit after tax up 17%

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	Dec 2010	Dec 2009
	A$m	A$m
Total Operating Businesses	276.0	220.7
Group Services	(36.0)	(24.6)
Group Treasury	(18.3)	(5.9)
Group Amortisation	(1.5)	(2.3)
Operating Profit after Tax	220.2	187.9
Property Investment Revaluations	6.3	17.0
Statutory Profit after Tax	226.5	204.9
Effective Tax Rate on Operating Profit	18%	29%
Impact of Currency on Operating Profit after Tax	(10.9)

17

Ample capacity to fund pipeline

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	Dec 2010	June 2010	Dec 2009
Credit Rating - S&P/Moody’s	BBB- / Baa3	BBB- / Baa3	BBB- / Baa3
	(Stable)	(Stable)	(Stable)
Net (cash) / debt1(A$m)	29.5	(19.7)	749.9
Gearing2	0.4%	Net cash position	9.2%
Cash (A$m)	1,439.4	1,635.9	967.5
Undrawn facilities (A$m)	571.5	688.6	536.8
Weighted average debt maturity3	4.8 years	5.5 years	6 years
Weighted average cost of debt	6.4%	6.3%	5.2%
Fixed / floating debt	63% / 37%	65% / 35%	60% / 40%
Interest coverage4	6.5x	6.7x	10.2x

1. Net (cash) / debt is borrowings including certain other financial liabilities, less cash

2 .Gearing is calculated as net debt, divided by total tangible assets, less cash

3 .Weighted average maturity relates to drawn debt

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

18

On track against financial targets

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
Credit Rating Committed to investment grade credit rating

Gearing [1 ] <20%

Interest Coverage Ratio >5x

Annuity Income 20% of EBITDA

Dividend Payout Ratio 40% to 60% of Operating Profit after Tax
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1. Gearing is calculated as net debt, divided by total tangible assets, less cash

19

Strong cash position

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A$m

0 200 400 600 800 1,000 1,200 1,400 1,600 1,800
	1,635.9 1,439.4 (137.5) 69.0 (70.8) (57.2)
	Opening cash June 2010 Operating cash flow Investing cash flow Financing cash flow FX impact Closing cash December 2010

20

Forecast impact of Valemus acquisition on Group’s cash reserves – less than A$300m

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A$m

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2,000
1,800
1,600
225
1,400
(960)
1,200
1,000
539
800
1,439
600 (80) 1,163
400
200
0 81
Cash as at New funding facility Payment for Valemus Purchase price 1 Valemus cash 2 Closing cash post
December 2010 adjustments Valemus
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• 1.The purchase price adjustment represents a further payment of A$80m plus A$5m per month from 1 October 2010 to completion. This payment will be made in lieu of 2010 profits not distributed. The final quantum of this payment is dependant on the completion date.

• 2.Actual cash balance as at 30 September 2010. Actual cash balance acquired will be different and is dependant on trading up until date of completion

21

Limited impact of Valemus acquisition on Group balance sheet

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	Lend Lease	Valemus	Transaction	Pro Forma
	Dec 2010	September	Adjustments	Dec 20101
A$m		20101
Cash	1,439	539	(815)	1,163
Tangible assets	8,421	954		9,375
Intangible assets	639	289	382	1,310
Total assets	10,499	1,782	(433)	11,848
Borrowings & finance leases	(1,469)	(101)	(225)	(1,795)
Other liabilities	(5,547)	(1,023)		(6,570)
Total liabilities	(7,016)	(1,124)	(225)	(8,365)
Equity	3,483	658	(658)	3,483
Gearing (%)2	0.4%	Net cash position		6.7%

1. The final acquisition balance sheet will not be equal to the balance sheet presented here. Movements are expected in working capital, cash and the fair value of other balance sheet items that change in the ordinary course of operation of the Valemus business

2. Gearing is calculated as net debt, divided by total tangible assets, less cash

22

Outlook

Improving economic outlook

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 Australian economy remains steady

• Residential market stable but increasingly uncertain

• Strength of underlying economy to support construction and infrastructure sectors

• Retail and commercial markets regaining strength

 Asia remains strong

• Strong economic fundamentals driving investor demand

• UK market likely to see a progressive recovery  Market more stable but still some time before full recovery

 US market showing signs of recovery

• Construction sector showing early signs of recovery

• Residential market supply still to work through system

24

Positive outlook

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• Strong backlog, development pipeline and access to capital

• Significant deal flow

• Capital raised will be invested over the medium term, supported by third party equity

• Emphasis on quality and consistency of execution

• Flexible balance sheet to fund growth

• Gearing of 0.4%

• Undrawn facilities of A$571.5m

• Capital recycling of circa A$300m

• Strong long term outlook with positive EPS trend

• Expected accretion from completed Valemus deal

• Strong 1[st] half result positions the Group well for the full year

• Remain on target for key projects to begin to deliver returns from 2[nd] half of financial year 2012

25

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Half Year Results February 2011

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