LENDLEASE GROUP

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27 February 2017
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Appendix 4D, Half Year Consolidated Financial Report and Portfolio Report

Lendlease Group today announced its results for the half year ended 31 December 2016. Attached is the Appendix 4D, Half Year Consolidated Financial Report and Portfolio Report.

ENDS

FOR FURTHER INFORMATION, PLEASE CONTACT:

Investors: Media: Justin McCarthy Natalie Campbell Tel: 02 9236 6464 Tel: 02 9236 6865 Mob: 0422 800 321 Mob: 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 lendlease.com

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Level 14, Tower Three, International Towers Sydney Exchange Place, 300 Barangaroo Avenue Barangaroo NSW 2000 Australia

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Appendix 4D

Lendlease Group (the Group) comprises Lendlease Corporation Limited (the Company) ABN 32 000 226 228 and Lendlease Trust (LLT) ARSN 128 052 595 the responsible entity of which is Lendlease Responsible Entity Limited ABN 72 122 883 185

Preliminary Half Year Report for the period ended 31 December 2016 (previous corresponding period being the period ended 31 December 2015)

Results for Announcement to the Market

Profit After Tax

Profit After Tax
	6 months	6 months
	December	December
	2016	2015	%
	A$m	A$m	Change
Revenue	7,945.3	7,340.0	8.2%
Profit after tax attributable to securityholders	394.8	353.8	11.6%

Stapling of the Company Shares and LLT Units

Shares in the Company and units in LLT are traded as one security under the name of Lendlease 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 as non controlling interests in the consolidated entity statement of financial position within equity, notwithstanding that the unitholders of LLT are also the shareholders of the Company.

Dividends/Distributions

Dividends/Distributions
				Amount	Franked amount
				per security	per security
Interim dividend/distribution – payable	24	March	2017	33.0 cents	0.0 cents

The interim dividend/distribution is comprised of an unfranked dividend of 29.762322 cents per share payable by the Company, sourced from the Conduit Foreign Income (CFI) account, and a trust distribution of 3.237678 cents per unit payable by LLT.

The record date for determining entitlement to the interim distribution is 3 March 2017 (Record Date) and the distribution is payable on 24 March 2017.

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 6 March 2017. Subject to the rules of the DRP, the issue price is the arithmetic average of the daily volume weighted average price of Lendlease stapled securities traded on the Australian Securities Exchange for the period of five consecutive business days immediately following the Record Date. Stapled securities issued under the DRP rank equally with all other stapled securities on issue.

Additional Information

Additional Information
	December	June
	2016	2016
Net tangible assets per security	A$7.74	A$7.16

The remainder of the information requiring disclosure to comply with listing rule 4.2A.3 is contained in the Performance & Outlook section of the December 2016 Directors’ Report and the December 2016 Half Year Consolidated Financial Report.

Lendlease Group

Appendix 4D 31 December 2016

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Half Year Consolidated Financial Report December 2016

HALF YEAR CONSOLIDATED FINANCIAL REPORT DECEMBER 2016 | LENDLEASE

Five Year Prof le
	Half Year	Half Year	Half Year	Half Year	Half Year
	31 December	31 December	31 December	31 December	31 December
Proftability	2016	2015	2014	2013	20121
Revenue	A$m 7,945	7,340	5,898	6,507	6,754
Proft before Tax	A$m 542	426	368	296	347
Proft after Tax	A$m 395	354	316	252	301
EBITDA	A$m 640	512	467	398	426
Earnings per stapled security on Proft after Tax2	cents 67.8	60.9	54.5	43.7	52.5
Proft after Tax to securityholders’ equity for the period (ROE)3	% 13.7	13.4	12.9	11.6	15.4
Dividend/Distribution payout ratio on Proft after Tax	% 49	49	50	50	42
Dividend/Distribution per stapled security	cents 33.0	30.0	27.0	22.0	22.0
Corporate Strength
Total assets	A$m 18,907	19,084	16,816	15,409	13,169
Cash	A$m 1,021	570	777	1,067	1,082
Borrowings	A$m 1,845	2,593	2,524	2,591	1,447
Current assets	A$m 5,725	5,833	4,929	4,360	4,017
Non current assets	A$m 13,181	13,251	11,887	11,048	9,152
Current liabilities4	A$m 9,479	9,505	8,010	7,168	6,611
Non current liabilities	A$m 3,480	4,205	3,852	3,772	2,536
Total equity	A$m 5,947	5,374	4,954	4,469	4,022
Operating cash fow	A$m (70)	201	(497)	(211)	(48)
Net asset backing per security	A$ 10.20	9.25	8.55	7.75	7.00
Ratio of current assets to current liabilities4	times 0.6	0.6	0.6	0.6	0.6
Ratio of current assets to current liabilities
(excluding resident and accommodation bond liabilities)4	times 1.1	1.1	1.1	1.1	1.0
Net debt to total tangible assets, less cash (gearing)5	% 5.1	12.1	12.4	12.5	5.8
Borrowings to total equity plus borrowings	% 23.7	32.5	33.7	36.7	26.5
Securities on issue	m 583	581	580	577	574
Number of securityholders	no. 60,530	60,678	55,737	55,136	52,939
Number of equivalent full time employees6	no. 12,033	11,875	12,665	13,729	17,442
Securityholders’ Returns and Statistics
Proportion of securities on issue to top 20 securityholders	% 72.8	73.5	76.3	75.3	76.5
Security holdings relating to employees7	% 3.7	5.6	5.7	6.0	6.3
Weighted average number of securities	m 582.7	580.9	578.6	576.1	573.6
Total dividends/distributions8	A$m 192	174	157	127	126
Security price as at 31 December as quoted on the
Australian Securities Exchange	A$ 14.62	14.26	16.40	11.14	9.28

December 2012 has been adjusted to reflect the impact of the first time adoption of the revised AASB 119 Employee Benefits standard and the new AASB 11 Joint Arrangements standard.
Calculated using the weighted average number of securities on issue including treasury securities.
Return on equity (ROE) is calculated on an annualised basis, using the half year profit/(loss) after tax divided by the arithmetic average of beginning and half year securityholders’ equity.
Ratio includes resident and accommodation bond liabilities related to the Retirement Living business. Under the current interpretation of accounting standards, these are required to be classified as current liabilities as any resident may choose to 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. Although a resident may choose to depart within 12 months, the Group’s commercial history has shown that the majority of resident contracts are not due for a period greater than 12 months, which means these liabilities are effectively non current.
Net debt and gross borrowings include certain other financial liabilities of A$19.6 million (December 2015: A$40.6 million).
Casual and third party workers are excluded from full time equivalent employees at December 2016 and 2015; comparative periods 2014, 2013 and 2012 have been restated to conform with current period disclosure. The reduction from December 2014 mainly relates to restructure of the Australian Construction business. The reduction from December 2013 mainly relates to the restructure of the Australian Construction business and the sale of the European Facilities Management business. The reduction from December 2012 mainly relates to the sale of the Aged Care business.
Securities held through employee benefit vehicles. The reduction from December 2015 relates to the disposal of Lendlease securities held by consolidated employee benefit vehicles.
A$173.5 million Company dividend was declared subsequent to the reporting date for December 2016.

HALF YEAR CONSOLIDATED FINANCIAL REPORT DECEMBER 2016 | LENDLEASE

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1.	Board/Directors	3
2.	Dividends/Distributions	3
3.	Events Subsequent to Balance Date	3
4.	Lead Auditor’s Independence Declaration	3
5.	Rounding Of	3
6.	Performance & Outlook	4
Lead	Auditor’s Independence Declaration
*under Section 307C of theCorporations Act 2001***		17

HALF YEAR CONSOLIDATED FINANCIAL REPORT DECEMBER 2016 | LENDLEASE

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HALF YEAR CONSOLIDATED FINANCIAL REPORT DECEMBER 2016 | LENDLEASE

Directors’ Report

The Directors present their Report together with the Half Year Consolidated Financial Report of the consolidated entity, being Lendlease Corporation Limited (the Company) and its controlled entities including Lendlease Trust (together referred to as the consolidated entity or the Group), for the six months ended 31 December 2016 and the Auditor’s Report therein.

1. Board/Directors

The name of each person who has been a Director of the Company at any time between 1 July 2016 and the date of this Report are:

D A Crawford, AO	Director since 2001, Chairman since 2003
S B McCann	Group Chief Executive Ofcer since 2008 & Managing Director since 2009
C B Carter, AM	Director since 2012
P M Cofey	Appointed January 2017
P M Colebatch	Director since 2005
D P Craig	Director since 2016
S B Dobbs	Director since 2015
J S Hemstritch	Director since 2011
D J Ryan, AO	Director since 2004
M J Ullmer	Director since 2011
N M Wakefeld Evans	Director since 2013

2. Dividends/Distributions

An unfranked interim distribution of $192.4 million (December 2015: $174.4 million unfranked) has been approved by the Directors. The interim distribution comprising of an unfranked dividend of 29.8 cents per share from the Company and a trust distribution of 3.2 cents per unit from Lendlease Trust will be paid on 24 March 2017 (December 2015: 21.4 cents per share from the Company and 8.6 cents per unit from Lendlease Trust paid on 15 March 2016).

3. Events Subsequent to Balance Date

There were no material events subsequent to the end of the financial period.

4. Lead Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001

The Lead Auditor’s Independence Declaration is set out at the end of this report and forms part of the Directors’ Report for the six months ended 31 December 2016.

5. Rounding Off

Lendlease Corporation Limited is a company of the kind referred to in the ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191 dated 24 March 2016 and, in accordance with that Instrument, amounts in the Half Year Consolidated Financial Statements and this report have been rounded off to the nearest tenth of a million dollars or, where the amount is $50,000 or less, zero, unless specifically stated to be otherwise.

6. Performance & Outlook

The Performance & Outlook on pages 4 to 15 is based on the Group Consolidated Financial Statements for the six months ended 31 December 2016 and should be read in conjunction with those financial statements. All currency amounts are expressed in Australian dollars unless otherwise specified.

HALF YEAR CONSOLIDATED FINANCIAL REPORT DECEMBER 2016 | LENDLEASE

Group Highlights

Performance Update

Lendlease delivered a strong result for the period ended 31 December 2016, with Profit after Tax of $394.8 million, up 12 per cent on the prior corresponding period and EBITDA of $639.6 million, up 25 per cent.

Earnings growth was driven by a higher EBITDA contribution from all segments. The result in the Development segment was driven by the Australian operations, while the Construction segment was supported by an improved performance in the Americas. The Investments segment remains a strong contributor to the Group result, with the recurring earnings streams from this segment representing 40 per cent of operating business EBITDA for the period. Group Services costs were 4 per cent lower than the prior corresponding period on an EBITDA basis, as the Group continued to drive productivity across the global platform. A key highlight in the period included the significant progress made in securing new tenants across the Group’s commercial development pipeline. New leasing agreements were secured across approximately 85,000 sqm of commercial space in the period, predominantly in Australia. The significant progress made on leasing underpinned the forward sale of three office towers in the period, at Brisbane Showgrounds in Brisbane, and Melbourne Quarter and Victoria Harbour in Melbourne. The Group also sold down a majority interest in the Circular Quay Tower development in Sydney. These projects now move into the delivery phase, representing approximately $2.5 billion of development end value in delivery, which will support future earnings across the Development, Construction and Investments segments.

The Group generated positive cash with total Operating and Investing cash flow up significantly on the prior corresponding period. Key items supporting the positive cash flow result included proceeds received following the practical completion of Tower One at Barangaroo South in Sydney, the sell down of a majority interest in the Circular Quay Tower development and proceeds from the Group’s divestment of the New Zealand Retirement Living business which completed in the prior financial year. The Group also completed its first PLLACes transaction within its European Apartment business which contributed to cash flow.

The positive cash outcome resulted in the Group maintaining a strong Balance Sheet, with gearing of 5.1 per cent, cash and cash equivalents of $1.0 billion and total liquidity of $3.3 billion, representing cash and cash equivalents and undrawn debt facilities, all improvements on the position at 30 June 2016.

The Group’s Return on Equity was 13.7 per cent for the period, at the upper end of the 10 to 14 per cent target range. Earnings per Security was 67.8 cents per security, up 11 per cent on the prior corresponding period, and the Group’s distribution is 33 cents per security, a payout ratio of 49 per cent, consistent with its target 40 to 60 per cent payout ratio.

Key Financials

Key Financials
FINANCIAL	HY16	HY17	Percentage Movement
Key Metrics Revenue1 $m 7,354.8 7,950.8 8%
EBITDA $m 512.0 639.6 25%
Proft after Tax(PAT) $m 353.8 394.8 12%
Operating and Investing cash fow $m (168.8) 243.0 244%
Net assets2 $m 5,614.7 5,947.2 6%
Net debt2 $m 1,052.4 843.7 (20%)
Efective tax rate3 % 16.9 27.2 61%
Key Returns Earningsper Security cents 60.9 67.8 11%
Distributionper Security cents 30.0 33.0 10%
Weighted avgSecurities no. 580.9 582.7 0%

EBITDA Mix

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EBITDA Mix
HY17 36%
40%
$718.8 m
Operating
EBITDA
Development
Construction 24%
Investments
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Profit after Tax
354 [395]
$
394.8
HY16 HY17
MILLION
Return on Equity
13.4% 13.7%
13.7 [%]
HY16 HY17
Earnings per Security
60.9 [67.8]
67.8
CENTS HY16 HY17
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Includes finance revenue.
Comparative values represent June 2016 balances.
Lendlease’s approach to tax and its policies are contained on the website (http://www.lendlease.com/investor-centre/taxation/tax-disclosure). Details on tax balances are included within the Consolidated Financial Statements.

HALF YEAR CONSOLIDATED FINANCIAL REPORT DECEMBER 2016 | LENDLEASE

Group Outlook

Portfolio Management Framework

During the period the Group introduced a new Portfolio Management Framework, which is designed to:

Maximise long term securityholder value through a well diversified, risk adjusted portfolio
Leverage the competitive advantage of our integrated model
Optimise our business relative to the outlook for our markets on a long term basis; and
Ensure financial strength to execute our strategy and maintain a strong financial profile with flexibility to withstand market volatility.

As a part of this framework the Group has set target ranges on a number of key metrics which are set out below. Metrics for the period were broadly in line with the target guidelines. The regional capital mix in Australia was above the target guideline mix reflecting the significant production investment made in the development pipeline in recent years. This is expected to re-weight over the medium term with an increasing focus on the international markets.

Outlook

The Group remains well positioned with strong growth achieved across all segments of the operating platform compared to the prior corresponding period.

The remaining end development pipeline grew to $49.0 billion, up 5 per cent on the prior corresponding period. This included $35.0 billion of Urbanisation projects. The Development segment also continues to maintain a strong residential presales position, closing the period at $5.7 billion. In the commercial space, the Group now has 13 major buildings in delivery with a total development end value of $7.0 billion[1] . A further $9.2 billion of commercial end value remains in the development pipeline.

The Group’s construction backlog revenue closed at $20.5 billion, up 10 per cent on the prior corresponding period. This included $6.3 billion of new work secured during the current period. The pipeline outlook remains strong, particularly in the transport sector in Australia for the Engineering business, while the internal Development pipeline is expected to support the outlook for the international businesses. Lendlease was also preferred bidder on approximately $7 billion of work globally at period end.

Funds Under Management (FUM) grew to $24.7 billion, up 12 per cent on the prior corresponding period. Together with approximately $3 billion of additional secured FUM through the urbanisation pipeline in delivery and existing investment positions of $3.3 billion, the Investments segment is well placed to continue to deliver a solid base of recurring earnings for the Group going forward.

The established operating platform provides the Group with strong earnings visibility. The strength of its balance sheet and access to third party capital provides the Group with flexibility to continue to explore new pipeline opportunities in line with strategy.

Portfolio Management Framework

Development Pipeline

CAPITAL FRAMEWORK Group Metrics Return on Equity Dividendpayout ratio Gearing2	Target 10-14% 40-60% 10-15%	HY16 13.4% 49% 6.5%	HY17 13.7% 49% 5.1%	$49.0	BILLION
EBITDA Mix				Construction Backlog
Development Construction Investments Segment Returns Development	35-45% 20-30% 30-40% 9-12% ROIC3,4	39% 20% 41% 11.3%	36% 24% 40% 12.7%	$20.5	BILLION

Construction Investments	3-4% EBITDA 8-11% ROIC3,4	2.0% 12.2%	2.7% 13.4%	Funds Under Management
Regional Invested Capital Mix Australia Asia Europe Americas	50-70% 5-20% 5-20% 5-20%	77% 7% 13% 3%	77% 8% 9% 6%	$24.7	BILLION

Total end value of ~$7.0 billion, with ~$1.3 billion delivered to date.
Comparative value represents June 2016 balance.
Target segment returns are through-cycle returns based on a rolling 3 to 5 year timeline.
ROIC: Annualised Return on Invested Capital. ROIC definition: Operating Profit after Tax / Average Invested Capital.

HALF YEAR CONSOLIDATED FINANCIAL REPORT DECEMBER 2016 | LENDLEASE

Development Performance

Performance

The Development segment delivered Profit after Tax of $181.5 million, down 1 per cent on the prior corresponding period. EBITDA for the period was $260.2 million, up 10 per cent on the prior corresponding period. Development ROIC was 12.7 per cent annualised for the period, above the target range.

This result was driven by a strong performance in the Australian operations which was supported by significant progress made in securing new tenants for the commercial development pipeline. The Group forward sold three commercial office buildings in the period, at Brisbane Showgrounds in Brisbane, and Melbourne Quarter and Victoria Harbour in Melbourne. The Group also sold down a majority interest in the Circular Quay Tower development in Sydney. Significant leasing progress was made at Tower One at Barangaroo South in Sydney and with new tenant commitments secured in the period (including Heads of Terms), commercial leasing in the tower is now above 70 per cent. In addition, Tower One reached practical completion during the period, with all three office towers now operational. This shift to operational status facilitated a release of previously eliminated development profit. The result for Australia also included apartment settlements at Victoria Harbour in Melbourne. Communities settlements were down compared to the prior corresponding period due to project

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36%
1
of EBITDA
45% TAR
G
E
T
35
%
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Segment Snapshot

Invested Capital[2] ($b)

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3.2
2.9 2.8
HY16 FY16 HY17
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Invested Capital[2] by Product ($b)

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17% 20%
HY16 HY17
$3.2 b $2.8 b
Invested Invested
Capital Capital
83% 80%
Communities Urbanisation
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timing. Communities presold revenue closed at $0.8 billion, up 29 per cent on the prior corresponding period, on the back of strong underlying sales performance.

The Group continued to invest in its offshore pipeline during the period, with solid progress made across its Urbanisation projects in Asia, Europe and the Americas.

In Singapore, construction at the Paya Lebar Quarter is progressing well and during the period management secured two anchor tenants for the retail component of the development. The project remains on track for completion in FY19.

In Europe, apartment settlements were achieved at the Glasshouse Gardens at International Quarter London and South Gardens at Elephant and Castle in London. The result was down on the prior corresponding period in which the Group forward sold two commercial office buildings at the International Quarter London. In the Americas, work has commenced at Riverline in Chicago, Clippership Wharf in Boston and 281 Fifth Avenue in New York. These projects are all in the residential sector, representing a mix of multi-family and condominium product.

The Group continues to explore new pipeline opportunities across the key target gateway cities across its four key regions.

EBITDA by Region ($m)

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290
260
236
192
65
(13) (7) 6 (8) (29)
Australia Asia Europe Americas Total
HY16 HY17
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Return on Invested Capital[3]

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12.7%
12% 11.3% 11.7%
TARGET
9%
HY16 FY16 HY17
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Settlement Profile (Units)

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2,228
100 2,037 71
662
628
1,466 1,338
HY16 HY17
Communities Apartments Retirement4
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Represents the proportion of EBITDA from Operating businesses.
Represents security holder equity plus net debt.
Half year returns have been annualised.
Retirement settlements exclude resales, Development activity only.

HALF YEAR CONSOLIDATED FINANCIAL REPORT DECEMBER 2016 | LENDLEASE

Development Outlook

Outlook

The growth outlook for Development remains positive. The remaining end development pipeline grew to $49.0 billion, up 5 per cent on the prior corresponding period. This included $35.0 billion of Urbanisation projects, including over 50 per cent in international markets.

The Development segment has maintained a strong residential presales position, closing the period at $5.7 billion. The majority of the presold residential revenue will be recognised during the remainder of FY17 through to FY19 as underlying projects in delivery are completed.

Across the urbanisation pipeline the Group now has 13 major commercial buildings in delivery and 20 major apartment buildings presold and in delivery. In addition, the Group has a further $25.0 billion of secured urbanisation pipeline, representing over 19,000 apartment units and approximately 762,000 sqm of commercial space, which will support the Group’s medium to longer term outlook. These projects are typically held in capital efficient structures, providing the Group with flexibility around delivery timing in line with market cycles. The Group remains well placed to deliver on its development pipeline despite some market challenges across the portfolio. The strong presales position provides solid earnings visibility

Segment Overview

The Development segment operates in all four geographic regions. It is split across two major products; Urbanisation and Communities.

Urbanisation projects include large scale projects in gateway cities which deliver the infrastructure, high density residential and commercial built-form.

The Communities product includes outer urban residential masterplanned communities with integrated town centres. Financial returns for the segment are generated via Development margins, Development management fees received from external co-investors and origination fees for the facilitation of infrastructure PPP transactions.

over the medium term. The Group’s record remaining development pipeline offers strong diversification across both geography and sectors, and will support the management of market risk across the portfolio over the longer term.

Pipeline by Product ($b)

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46.6 48.8 49.0
75% 76% 71%
25% 24% 29%
HY16 FY16 HY17
Communities Urbanisation
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Residential Presales[1 ] by Region ($b)

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5.4 5.9 5.7
1.4 1.1
1.7
3.7 4.5 4.6
HY16 FY16 HY17
Australia Europe
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Pipeline by Region ($b)

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46.6 48.8 49.0
7% 25% 7% 21% 8% 18%
12% 12%
12%
56% 60% 62%
HY16 FY16 HY17
Australia Asia Europe Americas
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Movement in Residential Presales ($b)

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5.9 (0.7) 0.5 5.7
5.2 4.9
0.7 0.8
FY16 Settlements Sales2 HY17
presales1 presales1
Communities Apartments
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Commercial Building Completion Profile

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Project Capital Model sqm ('000) Building HY17 FY17 FY18 FY19
International Quarter London Fund through3 73 Stage 1 Commercial (2 buildings)
Paya Lebar Quarter Joint venture 93 Commercial (3 buildings)
44 Retail
Darling Square Fund through3 26 Commercial
37 Hotel
Barangaroo South Fund through3 102 Tower One Completed
7 International House Sydney
Melbourne Quarter Fund through3 26 One Melbourne Quarter
Victoria Harbour Fund through3 38 Commercial Y3
Circular Quay Tower4 Joint venture 55 Commercial FY21
Brisbane Showgrounds Fund through3 15 Commercial K5
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Includes 100 per cent of joint venture projects and therefore will not necessarily correlate with the Group’s Profit after Tax.
Includes the impact of movement in foreign exchange rates.
A funding model structured through a forward sale to a capital partner resulting in staged payments prior to building completion.
Circular Quay Tower construction start remains subject to certain preconditions.

HALF YEAR CONSOLIDATED FINANCIAL REPORT DECEMBER 2016 | LENDLEASE

Development Pipeline

Urbanisation Pipeline Profile

Apartments

20 major apartment buildings presold and in delivery, estimated completion FY17 (H2) - FY19

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Units Units
4,570 presold [1] 19,405 remaining 23,975 Units
$4.3 b presold [1] $15.8 b remaining $ 20.1 b
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Commercial

13 major buildings in delivery, estimated completion FY17 (H2) - FY21

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sqm in sqm
414,000 delivery 762,000 remaining 1,176,000 sqm
$5.7 b in delivery [2] $9.2 b remaining $ 14.9 b
Communities Pipeline Profile
57,862 Lots
3,351 Lots presold 54,511 Lots remaining [3]
$ 14.0 b
$0.8 b presold $13.2 b remaining
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Urbanisation Pipeline by Region ($b)

Urbanisation Pipeline by Product ($b)

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35.0 37.3 35.0 35.0 37.3 35.0
9%
10% 11%
33% 28% 25% 44% 44% 43%
16% 16%
16%
41% 47% 48% 56% 56% 57%
HY16 FY16 HY17 HY16 FY16 HY17
Australia Asia Europe Americas Apartments Commercial
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Represents presales balance on buildings in delivery only.
Total end value of ~$7.0 billion, with ~$1.3 billion delivered to date.
Includes built-form units to be sold with land lots.

HALF YEAR CONSOLIDATED FINANCIAL REPORT DECEMBER 2016 | LENDLEASE

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HALF YEAR CONSOLIDATED FINANCIAL REPORT DECEMBER 2016 | LENDLEASE

Construction Performance

Performance

The Construction segment delivered Profit after Tax of $107.2 million, up 39 per cent on the prior corresponding period. EBITDA for the period was $170.2 million, up 45 per cent on the prior corresponding period. The global EBITDA margin was up 70 basis points to 2.7 per cent compared to the prior corresponding period, continuing an upward trend towards the Group’s target range of 3 to 4 per cent for the global business. The increase in earnings was underpinned by a higher contribution from the Americas operations. The strong result in the region was supported by performance upside on a number of projects that were closed out during the period.

The earnings contribution from the Australian business remained strong with a shift in the earnings mix between Building and Engineering adjusting in line with revenue. The Engineering pipeline secured in recent years in Australia remains in the early stages of delivery, the full benefit of which is expected to be realised over future periods.

Segment Snapshot

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24%
of EBITDA [1]
30
%
T
A
R
G
E
T
%02
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Revenue by Product ($b)

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5% 4%
9% 13%
HY16 HY17
$6.0 b $6.3 b
Revenue Revenue
86% 83%
Building Engineering Services
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New Work Secured by Product ($b)

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2%
8% 6%
20% HY16 HY17
$6.1 b $6.3 b
New Work Secured New Work Secured
Revenue 72% Revenue
92%
Building Engineering Services
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The performance of the Asia and Europe Construction businesses continues to be impacted by challenging market conditions experienced in those regions in recent years. In each region the internal development pipeline is expected to support the business outlook.

New work secured of $6.3 billion was up 3 per cent on the prior corresponding period, with an increased contribution in both Asia and the Americas. This Asia result was supported by the Paya Lebar Quarter development project in Singapore converting to construction backlog. In Australia, new work secured was down due to a strong contribution from Engineering in the prior corresponding period. The Engineering pipeline remains strong with the business active on a number of large projects currently being tendered.

EBITDA by Region ($m)

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170
117
105 97
70
0 (1) (3) 4 15
Australia Asia Europe Americas Total
HY16 HY17
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EBITDA Margin

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4%
3% [TARGET] 2.7%
2.0%
HY16 HY17
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New Work Secured by Region ($b)

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27%
HY16 HY17
40%
44%
$6.1 b $6.3 b
New Work Secured New Work Secured
10% Revenue Revenue
62%
6%
1% 10%
Australia Asia Europe Americas
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Represents the proportion of EBITDA from Operating businesses.

HALF YEAR CONSOLIDATED FINANCIAL REPORT DECEMBER 2016 | LENDLEASE

Construction Outlook

Outlook

Construction backlog revenue closed at $20.5 billion, up 10 per cent on the prior corresponding period. The backlog position is well diversified across multiple sectors and clients. In addition, the Group is in a preferred position on approximately $7 billion of work globally which it expects to convert over the next 12 months. The pipeline outlook remains strong for the Construction business, particularly in the transport sector in Australia for the Engineering business. The Lendlease development pipeline is expected to support the outlook for the international businesses. In addition, a number of attractive external opportunities are emerging in the UK and Americas markets which the business is pursuing. The Asia business will continue to focus predominantly on the internal pipeline.

The Group is well positioned to deliver on its strong position in the Construction segment. While market conditions across parts of the Group’s traditional Building business remain mixed, the strong internal pipeline and the attractive infrastructure pipeline

Segment Overview

The Construction segment operates across all four geographic regions to provide project management, design, and construction services, predominantly in the infrastructure, defence, mixed use, commercial and residential sectors.

The financial returns for the segment are generated via project management and construction management fees, in addition to construction margin.

in Australia provide a solid backdrop for the segment. The existing backlog position underpins earnings visibility over the medium term for the segment.

Backlog by Product ($b)

Backlog by Region ($b)

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20.7 20.5
18.6
8% 7%
8%
19% 16%
16%
76% 73% 77%
HY16 FY16 HY17
Building Engineering Services
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Backlog[1] by Sector

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9%
19%
14%
Major Project
Backlog Revenue
Transport 16%
Residential 32%
Hotel/Entertainment 10%
Defence
Commercial
Other
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Backlog Revenue Movement by Product ($b)

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20.7 20.5
18.6
32% 34%
31% 7% 5%
9%
3% 4%
2%
58% 58% 57%
HY16 FY16 HY17
Australia Asia Europe Americas
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Backlog[1] by Client

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18%
38%
Major Project
Backlog Revenue
44%
Lendlease Corporate Government
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HY17 Backlog Realisation

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0.6 (0.6)
20.7 (0.2)
20.5
FY16 Building2 Engineering2 Services2 HY17
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26%
31%
$20.5 b
Backlog
Revenue
43%
FY173 FY18 Post FY18
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Includes all Construction projects greater than $100 million, which represents 78% ($16.0 billion) of secured backlog.
Includes the impact of movement in foreign exchange rates, where applicable.
FY17 reflects backlog realisation from 31 December 2016.

HALF YEAR CONSOLIDATED FINANCIAL REPORT DECEMBER 2016 | LENDLEASE

Investments Performance

Performance

The Investments segment delivered Profit after Tax of $215.4 million, up 6 per cent on the prior corresponding period. EBITDA for the period was $288.4 million, up 19 per cent on the prior corresponding period. The EBITDA from operating activities was up $20 million on the prior corresponding period, driven by higher base fees from the Funds Management business and higher asset management fees from the Americas’ military housing operations and the Australian Investment Management business. This result delivered a solid source of recurring income to the Group, with the segment representing 40 per cent of Group operating EBITDA, at the top end of the target range. Investments ROIC was 13.4 per cent annualised for the period, above the target range, driven by improved performance in Australia and Asia.

In Australia, the result was supported by the return on key investments in Lendlease International Towers Sydney Trust and Lendlease One International Towers Sydney Trust, with the underlying commercial assets now all having moved into the operational phase. The result was also supported by a strong contribution from the Retirement operations which recorded an 8.6 per cent uplift in unit pricing on resales during the period.

Late in FY16, the Group divested the New Zealand Retirement Living business, with over $200 million in proceeds subsequently received in the current period.

The Asia result in the prior corresponding period was impacted by a reduction in the value of the Group’s 25 per cent direct investment in 313@somerset in Singapore. In Europe, the Group divested its interest in the Lendlease PFI/PPP Infrastructure Fund LP in the prior corresponding period. These items impact the period on period movement in these regions.

New equity of $0.8 billion was raised during the period. This was mainly attributable to equity commitments relating to the sell down of the Group’s majority interest in the Circular Quay Tower development in Sydney. Lendlease’s strong network of capital partners provides additional capacity for the Group to develop its pipeline of opportunities, as well as providing a solid base of recurring income.

Segment Snapshot

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40%
of EBITDA [1]
40%
TA
R
G
E
T
30
%
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EBITDA by Region ($m)

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288
244 243
221
(19) 17 19 1 22 26
Australia Asia Europe Americas Total
HY16 HY17
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Invested Capital[2] ($b)

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3.5
3.2 3.2
HY16 FY16 HY17
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Return on Invested Capital

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

13.4%
12.2% 11.6%
11%
TARGET
8%
HY16 FY16 HY17
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Investments EBITDA by Activity ($m)

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226
201
62
42
Ownership Operating
interests3 earnings4
HY16 HY17
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Growth in Funds Under Management ($b)

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23.6 24.7
21.3
16.3
15.0
12.3
FY12 FY13 FY14 FY15 FY16 HY17
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Represents the proportion of EBITDA from Operating Businesses.
Security holder equity plus net debt.
Returns derived from Co-Investments, the Retirement Living business and equity returns from US military housing.
Earnings derived from the investment management platform and the management of US military housing operations.

HALF YEAR CONSOLIDATED FINANCIAL REPORT DECEMBER 2016 | LENDLEASE

Investments Outlook

Outlook

Funds Under Management grew to $24.7 billion, up 12 per cent on the prior corresponding period. The result was driven by solid growth across the Australian fund platform, including Lendlease One International Towers Sydney Trust and the Australian Prime Property Fund series. The funds under management portfolio is well diversified across sectors and geographies. As the Group delivers on its urbanisation pipeline there is approximately $3 billion of additional secured FUM relating to projects in delivery. Investments managed on behalf of the Group closed the period at $3.3 billion. The Group had $1.5 billion co-invested across its fund platform, providing strong alignment with investors and a high quality income stream. The Group also had invested $1.7 billion of capital across 71 retirement villages in Australia, and in the Americas continued to manage over 50,000 units across its military housing operations.

The outlook for the Investments’ segment remains solid, with an established relationship with approximately 150 institutional investors and a strong track record of performance. The further conversion of the urbanisation pipeline together with the Group’s strong network of third party capital will provide

Funds Under Management by Asset Class ($b)

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24.7
23.6
22.0 3% 2%
1%
4% 4%
4%
36% 38% 42%
59% 55% 52%
HY16 FY16 HY17
Retail Commercial Industrial Other
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Investments[1] by Product ($b)

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3.2 3.0 3.3
1% 4%
4%
53% 50% 51%
46% 46% 45%
HY16 FY16 HY17
Co-Investments Retirement ownership Infrastructure
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Funds Under Management by Region ($b)

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1.4 (0.2)
(0.1) 24.7
23.6
FY16 Australia Asia Europe HY17
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Segment Overview

Lendlease owns and/or manages investments across all four geographic regions. The Investments segment includes a leading wholesale investment management platform and also includes the Group’s ownership interests in property and infrastructure Co-Investments, Retirement Living, and US military housing.

Financial returns for the segment include fund and property management fees, yield and capital growth on investment positions, and returns from the Group’s retirement portfolio and US military housing operations.

future opportunities to continue to grow FUM. Combined with the Group’s existing investments platform, the segment is well positioned to continue to deliver a solid base of recurring income streams to underpin the Group’s future earnings.

Funds Under Management by Region ($b)

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23.6 24.7
22.0
6%
6%
8% 24% 22%
24%
68% 70% 72%
HY16 FY16 HY17
Australia Asia Europe
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Investments[1] by Region ($b)

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3.2 3.3
4% 4% 3.0 3%
3% 2% 2%
16% 11% 10%
77% 83% 85%
HY16 FY16 HY17
Australia Asia Europe Americas
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Funds Under Management roll-forward ($b)

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1.0 (0.1) 0.5 (0.3) 24.7
23.6
FY16 New FUM FUM Revaluations Other2 HY17
acquired divested
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Represents the Group’s assessment of market value.
Includes the impact of movement in foreign exchange rates.

HALF YEAR CONSOLIDATED FINANCIAL REPORT DECEMBER 2016 | LENDLEASE

Financial Position and Cash Flow Movements

Financial Position Cash and cash equivalents	FY16 $m	HY17 $m	Percentage movement
	1,008.4 1,020.8 1%
Inventories	4,602.9 4,963.6 8%
Equity accounted investments	1,152.6 744.0 (35%)
Investment properties	5,940.7 6,439.5 8%
Other assets (including fnancial)	5,888.3 5,738.6 (3%)
Total assets	18,592.9 18,906.5 2%
Borrowings and fnancing arrangements	2,031.3 1,844.9 (9%)
Other liabilities (including fnancial)	10,946.9 11,114.4 2%
Total liabilities	12,978.2 12,959.3 0%
Net assets	5,614.7 5,947.2 6%

Inventories

Inventories increased by 8 per cent on 30 June 2016 due to an increase in work in progress in relation to key Development projects including Darling Square in Sydney, Toorak Park in Melbourne and Elephant and Castle in London.

Investment properties

Investment properties increased primarily due to capital expenditure, acquisitions and valuation growth on the Retirement Living properties on a gross basis. This increase was offset by an increase in Resident Liabilities reported through Other Liabilities.

Equity Accounted Investments

Equity accounted investments decreased by 35 per cent on 30 June 2016 following a change in the accounting classification of the Group’s investments in the Lendlease International Towers Sydney Trust and Lendlease One International Towers Sydney Trust. This was due to all underlying assets now having moved to the operational phase post completion. These investments are now reported within Other Financial Assets in the Statement of Financial Position.

Cash Flow Movements ($m)

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313 (240)
10
1,008 (70) 1,021
FY16 Operating Investing Financing Foreign HY17
exchange
impact
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Investing

Net cash inflow from investing activities during the period was primarily due to proceeds received from the sell down of a majority interest in the Circular Quay Tower development and proceeds from the divestment of the New Zealand Retirement Living business which completed in the prior financial year.

Financing

The net cash outflow from financing activities during the period was driven by repayments on the Club Revolving Credit Facility.

Operating

Positive operating cash flows were generated in the period from proceeds received following the practical completion of Tower One at Barangaroo South in Sydney, apartment settlements in Australia and Europe, and the completion of a PLLACes transaction within the European Apartment business. These items were offset by increased contributions towards the development projects in production.

HALF YEAR CONSOLIDATED FINANCIAL REPORT DECEMBER 2016 | LENDLEASE

Group Funding and Debt Facilities

		FY16	HY17	Percentage Movement
Net debt $m 1,052.4 843.7 (20%)
Borrowings to total equity plus borrowings % 26.6 23.7 (11%)
Net debt to total tangible assets, less cash % 6.5 5.1 (22%)
Interest coverage times 8.0 10.8 35%
Average cost of debt including margins % 4.6 4.8 4%
Average debt duration years 5.3 4.9 (8%)
Debt mix fxed: foating ratio 91:9 100:0
Undrawn facilities $m 2,172.6 2,313.3 6%

The Group’s net debt and gearing position has continued to reduce this period, driven by the positive net operating and investing cash flow position, which has been used for the repayment of the Club Revolving Credit Facility. As a result, both gearing and interest cover improved as at 31 December 2016. The increase in the Group’s average cost of debt reflects lower drawings under floating rate bank facilities during the period. The increase in the Group’s fixed / floating debt mix similarly reflects the repayment of borrowings under floating rate bank facilities as at 31 December 2016.

Debt Facilities[1] ($m)

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1,500
690
513 513 550 550 476 476
263 263
35 35
0 0
Syndicated UK Club US$ US Singapore Australian
Multi-Option Bond Revolving Reg. S Private Bond medium term
Facility Issue Credit Facility notes Placement notes
Drawn Facility
Debt Maturity Profile [2] ($m)
225
250
900
600 690
517 556
264
35
FY18 FY19 FY20 FY21 FY22 FY26
Syndicated Multi-Option Facility UK Bond Issue Club Revolving Credit Facility US$ Reg. S notes
US Private Placement Singapore Bond Australian medium term notes Undrawn
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Values are shown at amortised cost.
Values are shown at gross facility value.

HALF YEAR CONSOLIDATED FINANCIAL REPORT DECEMBER 2016 | LENDLEASE

Directors’ Report

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 and Managing Director

Sydney, 27 February 2017

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Lead Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001

To: the directors of Lendlease Corporation Limited

I declare that, to the best of my knowledge and belief, in relation to the review for the half year ended 31 December 2016 there have been:

(i) no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the review; and
(ii) no contraventions of any applicable code of professional conduct in relation to the review.

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KPMG

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Duncan McLennan

Partner

Sydney 27 February 2017

KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.

Liability limited by a scheme approved under Professional Standards Legislation.

Consolidated Financial Statements

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Report
December 2016
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Consolidated Financial Statements
Income Statement	1
Statement of Comprehensive Income	2
Statement of Financial Position	3
Statement of Changes in Equity	4
Statement of Cash Flows	5
Notes to the Consolidated Financial Statements	6

Notes Index

Section A: Performance

1.	Segment Reporting	7
2.	Dividends/Distributions	8
3.	Earningsper Share/Stapled Security	8
4.	Revenue	9
5.	Other Income	9
6.	Other Expenses	9
7.	Finance Revenue and Finance Costs	10
8.	Share of Proft of EquityAccounted Investments	10
9.	Taxation	12
10.	Events Subsequent to Balance Date	12
Section B: Investment
11.	Inventories	13
12.	EquityAccounted Investments	13
13.	Investment Properties	16
14.	Other Financial Assets	17
Section C: Liquidity and Working Capital
15.	Borrowings and FinancingArrangements	18
16.	Issued Capital	19
Section D: Other Notes
17.	Fair Value Measurement	20
18.	Contingent Liabilities	21
Section E: Basis of Consolidation
19.	Consolidated Entities	22
Directors’ Declaration		23

Lendlease Corporation Limited (the Company) is incorporated and domiciled in Australia. The consolidated financial report of the Company for the half year ended 31 December 2016 comprises the Company and its controlled entities including Lendlease 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 1 ‘Segment Reporting’.

Shares in the Company and units in LLT are traded as one security under the name of Lendlease 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.

The consolidated financial report was authorised for issue by the Directors on 27 February 2017.

HALF YEAR CONSOLIDATED FINANCIAL REPORT DECEMBER 2016 | LENDLEASE

Consolidated Financial Statements

Income Statement

Half Year Ended 31 December 2016

Half Year Ended 31 December 2016
			6 months	6 months
			December 2016	December 2015
		Note	A$m	A$m
Revenue		4	7,945.3	7,340.0
Cost of sales			(7,077.3)	(6,522.7)
Gross proft			868.0	817.3
Other income		5	139.0	85.1
Other expenses			(458.9)	(552.6)
Results from operating activities			548.1	349.8
Finance revenue		7	5.5	14.8
Finance costs		7	(55.1)	(60.5)
Net fnance costs			(49.6)	(45.7)
Share of proft of equity accounted investments		8	43.7	121.4
Proft before Tax			542.2	425.5
Income tax expense		9	(147.7)	(71.9)
Proft after Tax			394.5	353.6
Proft after Tax attributable to:
Members of Lendlease Corporation Limited			338.6	257.7
Unitholders of Lendlease Trust			56.2	96.1
Proft after Tax attributable to securityholders			394.8	353.8
External non controlling interests			(0.3)	(0.2)
Proft after Tax			394.5	353.6
Basic/Diluted Earnings per Lendlease Corporation Limited Share (EPS)
Shares excluding treasury shares	(cents)	3	60.9	46.7
Shares on issue	(cents)	3	58.1	44.4
Basic/Diluted Earnings per Lendlease Group Stapled Security (EPSS)
Securities excluding treasury securities	(cents)	3	71.0	64.1
Securities on issue	(cents)	3	67.8	60.9

The accompanying notes form part of these consolidated financial statements.

HALF YEAR CONSOLIDATED FINANCIAL REPORT DECEMBER 2016 | LENDLEASE

Consolidated Financial Statements continued

Statement of Comprehensive Income

Half Year Ended 31 December 2016

Half Year Ended 31 December 2016
6 months	6 months
December 2016	December 2015
A$m	A$m
Proft after Tax 394.5	353.6
Other Comprehensive Income/(Expense) After Tax Items that may be reclassifed subsequently to proft or loss: Movements in fair value revaluation reserve 1.8	1.9
Movements in hedging reserve 20.6	0.9
Movements in foreign currency translation reserve1 6.1	41.8
Total items that may be reclassifed subsequently to proft or loss2 28.5	44.6
Items that will not be reclassifed to proft or loss: Movements in non controlling interest acquisition reserve (2.4)	(3.7)
Defned beneft plans remeasurements (5.5)	3.3
Total items that will not be reclassifed to proft or loss (7.9)	(0.4)
Total comprehensive income after tax 415.1	397.8
Total comprehensive income after tax attributable to: Members of Lendlease Corporation Limited 359.2	301.4
Unitholders of Lendlease Trust 56.2	96.1
Total comprehensive income after tax attributable to securityholders 415.4	397.5
External non controlling interests (0.3)	0.3
Total comprehensive income after tax 415.1	397.8

Includes A$nil relating to external non controlling interests (December 2015: A$0.5 million).
Includes A$9.0 million (December 2015: A$4.3 million) relating to share of other comprehensive income on equity accounted investments.

The accompanying notes form part of these consolidated financial statements.

HALF YEAR CONSOLIDATED FINANCIAL REPORT DECEMBER 2016 | LENDLEASE

Statement of Financial Position

As at 31 December 2016

As at 31 December 2016
		December 2016	June 2016
	Note	A$m	A$m
Current Assets
Cash and cash equivalents		1,020.8	1,008.4
Loans and receivables		2,057.4	2,785.0
Inventories	11	2,488.2	1,923.0
Other fnancial assets	14	65.0	50.7
Current tax assets			21.6
Other assets		94.0	69.2
Total current assets		5,725.4	5,857.9
Non Current Assets
Loans and receivables		259.4	285.4
Inventories	11	2,475.4	2,679.9
Equity accounted investments	12	744.0	1,152.6
Investment properties	13a	6,439.5	5,940.7
Other fnancial assets	14	1,230.4	628.8
Deferred tax assets		116.2	109.5
Property, plant and equipment		413.1	432.3
Intangible assets		1,433.7	1,446.8
Defned beneft plan asset		6.5	7.5
Other assets		62.9	51.5
Total non current assets		13,181.1	12,735.0
Total assets		18,906.5	18,592.9
Current Liabilities
Trade and other payables		4,353.5	4,328.8
Resident liabilities	13b	4,444.1	4,119.5
Provisions		321.8	292.4
Borrowings and fnancing arrangements	15a	297.8
Current tax liabilities		38.5
Other fnancial liabilities		23.5	83.6
Total current liabilities		9,479.2	8,824.3
Non Current Liabilities
Trade and other payables		1,702.9	1,909.4
Provisions		49.2	70.6
Borrowings and fnancing arrangements	15a	1,547.1	2,031.3
Defned beneft plan liability		9.7	3.4
Other fnancial liabilities		1.7	9.7
Deferred tax liabilities		169.5	129.5
Total non current liabilities		3,480.1	4,153.9
Total liabilities		12,959.3	12,978.2
Net assets		5,947.2	5,614.7
Equity
Issued capital	16	1,283.9	1,276.3
Treasury securities		(43.7)	(99.5)
Reserves		65.9	98.0
Retained earnings		3,552.3	3,289.6
Total equity attributable to members of Lendlease Corporation Limited		4,858.4	4,564.4
Total equity attributable to unitholders of Lendlease Trust		1,087.4	1,048.6
Total equity attributable to securityholders		5,945.8	5,613.0
External non controlling interests		1.4	1.7
Total equity		5,947.2	5,614.7

The accompanying notes form part of these consolidated financial statements.

HALF YEAR CONSOLIDATED FINANCIAL REPORT DECEMBER 2016 | LENDLEASE

Consolidated Financial Statements continued

Statement of Changes in Equity

Half Year Ended 31 December 2016

Half Year Ended 31 December 2016
Issued Capital A$m Treasury Securities1 A$m Reserves2 A$m	Retained Earnings A$m Members of Lendlease Corporation Limited A$m Unitholders of Lendlease Trust A$m External Non Controlling Interests A$m Total Equity A$m
Balance as at 1 July 2015 1,256.3 (89.9) 91.7	2,936.0 4,194.1 968.0 6.1 5,168.2
Total Comprehensive Income Proft for the period	257.7 257.7 96.1 (0.2) 353.6
Other Comprehensive Income (Net of tax) 40.4	3.3 43.7 0.5 44.2
Total Comprehensive Income – – 40.4	261.0 301.4 96.1 0.3 397.8
Transactions with owners of the Company Distribution reinvestment plan (DRP) 8.1	8.1 1.9 10.0
Dividends and distributions	(125.9) (125.9) (47.2) (173.1)
Treasury securities acquired (45.4)	(45.4) (45.4)
Treasury securities vested 39.9	39.9 39.9
Fair value movement on allocation and vesting of securities (18.2)	(18.2) (18.2)
Other movements	(5.0) (5.0)
Total other movements through reserves 8.1 (5.5) (18.2)	(125.9) (141.5) (45.3) (5.0) (191.8)
Balance as at 31 December 2015 1,264.4 (95.4) 113.9	3,071.1 4,354.0 1,018.8 1.4 5,374.2
Balance as at 1 July2016 1,276.3 (99.5) 98.0	3,289.6 4,564.4 1,048.6 1.7 5,614.7
Total Comprehensive Income Proft for the period	338.6 338.6 56.2 (0.3) 394.5
Other Comprehensive Income (Net of tax) 26.1	(5.5) 20.6 20.6
Total Comprehensive Income – – 26.1	333.1 359.2 56.2 (0.3) 415.1
Transactions with owners of the Company
Distribution reinvestment plan (DRP) 7.6	7.6 1.7 9.3
Dividends and distributions	(152.3) (152.3) (19.1) (171.4)
Treasury securities acquired (4.6)	(4.6) (4.6)
Treasury securities vested 46.2	46.2 46.2
Fair value movement on allocation and vesting of securities (43.7)	(43.7) (43.7)
Asset disposals and transfers3 0.1	0.1 0.1
Other movements4 14.2 (14.6)	81.9 81.5 81.5
Total other movements through reserves 7.6 55.8 (58.2)	(70.4) (65.2) (17.4) – (82.6)
Balance as at 31 December 2016 1,283.9 (43.7) 65.9	3,552.3 4,858.4 1,087.4 1.4 5,947.2

Opening balance for number of treasury securities at 1 July 2016 was 29.2 million (1 July 2015: 28.8 million) and closing balance at 31 December 2016 was 18.4 million (31 December 2015: 28.9 million).
Balance and movement in reserves are presented on a combined basis for the half year ended 31 December 2016. Half year ended 31 December 2015 has been restated to reflect current period presentation.
These movements in reserves were transferred to profit and loss in the period.
Other movements in Treasury Securities, Reserves and Retained Earnings relate to disposal of Lendlease securities held by consolidated employee benefit vehicles.

The accompanying notes form part of these consolidated financial statements.

HALF YEAR CONSOLIDATED FINANCIAL REPORT DECEMBER 2016 | LENDLEASE

Statement of Cash Flows

Half Year Ended 31 December 2016

Half Year Ended 31 December 2016
	6 months	6 months
	December 2016	December 2015
	A$m	A$m
Cash Flows from Operating Activities
Cash receipts in the course of operations	8,561.0	8,079.0
Cash payments in the course of operations	(8,515.1)	(7,826.5)
Interest received	4.8	5.9
Interest paid	(77.2)	(87.5)
Dividends/distributions received	33.5	28.0
Income tax (paid)/received in respect of operations	(77.4)	1.8
Net cash (used in)/provided by operating activities	(70.4)	200.7
Cash Flows from Investing Activities
Sale/redemption of investments	67.4	75.4
Acquisition of investments	(155.7)	(323.9)
Acquisition of/capital expenditure on investment properties	(58.9)	(7.1)
Net loans from/(to) to associates and joint ventures	6.0	(51.5)
Disposal of consolidated entities (net of cash disposed and transaction costs)	521.0
Disposal of property, plant and equipment	3.6	10.3
Acquisition of property, plant and equipment	(66.4)	(47.2)
Acquisition of intangible assets	(3.6)	(25.5)
Net cash provided by/(used in) investing activities	313.4	(369.5)
Cash Flows from Financing Activities
Proceeds from borrowings	1,624.3	1,978.5
Repayment of borrowings	(1,802.7)	(1,847.4)
Dividends/distributions paid	(157.7)	(139.9)
Proceeds from sale of treasury securities	106.5
Other fnancing activities	(9.9)	(4.8)
Net cash used in fnancing activities	(239.5)	(13.6)
Other Cash Flow Items
Efect of foreign exchange rate movements on cash and cash equivalents	8.9	2.3
Net increase/(decrease) in cash and cash equivalents	12.4	(180.1)
Cash and cash equivalents at beginning of fnancial period	1,008.4	750.1
Cash and cash equivalents at end of fnancial period	1,020.8	570.0

The accompanying notes form part of these consolidated financial statements.

HALF YEAR CONSOLIDATED FINANCIAL REPORT DECEMBER 2016 | LENDLEASE

Notes to the Consolidated Financial Statements

Basis of Preparation

The consolidated financial report is a general purpose financial report, which:

has been prepared in accordance with AASB 134 Interim Financial Reporting and the Corporations Act 2001 ;
complies with the recognition and measurement requirements of the International Financial Reporting Standards (IFRSs) adopted by the International Accounting Standards Board (IASB);
should be read in conjunction with the 30 June 2016 annual consolidated financial report and any public announcements by the Group during the half year in accordance with continuous disclosure obligations arising under the Corporations Act 2001 . The half year financial report does not contain all the information required for a full financial report;
is presented in Australian dollars , with all values rounded off to the nearest tenth of a million dollars unless otherwise indicated, in accordance with ASIC Corporations (Rounding in Financial/Directors’ Reports) instrument 2016/191; 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 within the notes to the financial statements for the basis of valuation of assets and liabilities measured at fair value.

The preparation of an interim financial report that complies with AASB 134 requires management to make judgements, estimates and

assumptions .

This can affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognised prospectively.
The accounting policies have been consistently applied by the Group and are consistent with those applied in the 30 June 2016 annual financial statements other than as stated below.

Impact of New and Revised Accounting Standards

New and Revised Accounting Standards Adopted 1 July 2016

The Group adopted AASB 2014-3 Amendments to Australian Accounting Standards – Accounting for Acquisitions of Interests in Joint Operations and AASB 2015-2 Amendments to AASB 101 for the half year ended 31 December 2016. There is no financial impact on the Group following adoption of these amendments. Additional disclosures have been included in the Statement of Comprehensive Income as required by AASB 2015-2 for joint ventures and associates share of comprehensive income.

New Accounting Standards and Interpretations Not Yet Adopted

Accounting Standard	Requirement	Impact on Financial Statements
AASB 2016-1	The amendments to AASB 112 clarify the accounting for deferred	Based on preliminary analysis
Amendments to Australian	tax where an asset is measured at fair value and that fair value is	performed, the amendments are not
Accounting Standards – Recognition	below the asset’s tax base.	expected to have a material impact on
of Deferred Tax Assets for Unrealised Losses	The amendment becomes mandatory for the June 2018 fnancial year and will be applied retrospectively.	the Group.
AASB 2016-2	The amendment to AASB 107 introduces additional disclosures	The amendment will impact the type of
Amendments to Australian	relating to changes in liabilities arising from fnancing activities.	information disclosed in relation to
Accounting Standards – Disclosure Initiative: Amendments to AASB 107	The amendment becomes mandatory for the June 2018 fnancial year and will be applied prospectively.	fnancing cash fows.
AASB 9	AASB 9 addresses the classifcation, measurement and	Based on the preliminary analysis
_Financial Instruments_and	derecognition of fnancial assets, fnancial liabilities and hedging.	performed, AASB 9 will impact the
consequential amendments	The standard becomes mandatory for the June 2019 fnancial year, and will be applied retrospectively.	classifcation of available for sale fnancial assets, while other amendments are not expected to have
		a material impact on the Group.
AASB 15	AASB 15 provides a new fve step model for recognising revenue	Based on the preliminary analysis
Revenue from Contracts	earned from a contract with a customer and will replace the	performed, this standard is not
_with Customers_and	existing AASB 118_Revenue_and AASB 111_Construction Contracts_.	expected to have a material impact on
consequential amendments	The standard becomes mandatory for the June 2019 fnancial year and will be applied retrospectively.	the Group, however it will impact the information disclosed in relation to revenue contracts.
AASB 2014-10	AASB 2014-10 amends AASB 10 and AASB 128 to clarify the	Based on preliminary analysis
Amendments to Australian	requirements for recording the sale or contribution of assets	performed, the amendments are not
Accounting Standards – Sale or	between an investor and its associate or joint venture.	expected to have a material impact on
Contribution of Assets between an Investor and its Associate or Joint _Venture_and consequential	The amendment becomes mandatory for the June 2019 fnancial year and will be applied prospectively.	the Group.
amendments
AASB 16	AASB 16 provides a new model for accounting for leases.	The potential efect of this standard is
Leases	The standard becomes mandatory for the June 2020 fnancial	yet to be determined.
	year and will be applied retrospectively.

HALF YEAR CONSOLIDATED FINANCIAL REPORT DECEMBER 2016 | LENDLEASE

Section A: Performance

Profit after Tax (PAT) is the key measure used to assess the Group’s performance. This section of the Financial Report focuses on disclosure that enhances a user’s understanding of PAT. Segment Reporting provides a breakdown of profit and revenue by the operational activity. The key line items of the Income Statement along with their components provide detail behind the reported balances. Group performance will also impact the earnings per stapled security and dividend payout, therefore disclosure on these items has been included in this section. Further information and analysis on performance can be found in the Performance & Outlook section of the Directors’ Report.

1. Segment Reporting

At 30 June 2016, the Group re-evaluated its segments to better reflect the operational focus and underlying revenue generating activities in each segment. The revised segments are based on the operational activity of each segment and not the geographical region of the operations. The three revised segments are Development, Construction and Investments. The Group does not consider corporate activities to be an operating segment. For further information refer to the 30 June 2016 Annual Report. The prior period amounts in the disclosures below have been restated to reflect the revised segmentation.

The operating segments are as follows:

Development

Operates in all four geographic regions. It is involved in the development of communities, inner city mixed use developments, apartments, retirement, retail, commercial assets and social and economic infrastructure.

Construction

Operates across all four geographic regions to provide project management, design and construction services, predominately in the infrastructure, defence, mixed use, commercial and residential sectors.

Investments

Own and/or manage investments across all four geographic regions. The investments segment includes a leading wholesale investment management platform and also includes the Group’s ownership interests in property and infrastructure Co-Investments, Retirement Living and US Military Housing.

Financial information regarding the performance of each reportable segment and a reconciliation of these reportable segments to the financial statements is included below.

Financial information regarding the performance of each fnancial statements is included below.	reportable segment and a	reconciliation of these reportable segments to the
Financial Disclosure	SEGMENT REVENUE1 6 months December 2016 A$m 6 months December 20152 A$m	PROFIT AFTER TAX GROUP TOTAL ASSETS 6 months December 2016 A$m 6 months December 20153 A$m 6 months December 2016 A$m June 2016 A$m
Development	1,330.8 1,115.1	181.5 183.4 5,579.1 5,667.8
Construction	6,305.9 5,961.3	107.2 77.0 4,236.7 4,499.1
Investments	304.8 271.1	215.4 202.9 8,228.2 7,959.4
Total segment	7,941.5 7,347.5	504.1 463.3 18,044.0 18,126.3
Reconciling items Corporate activities	9.3 7.3	(109.3) (109.5) 862.5 466.6
Statutory result attributable to securityholders	7,950.8 7,354.8	394.8 353.8 18,906.5 18,592.9
External non controlling interests		(0.3) (0.2)
Statutory result	7,950.8 7,354.8	394.5 353.6 18,906.5 18,592.9

Segment revenue represents revenue and finance revenue.
December 2015 has been restated to reflect the change in reporting segments as noted above. Segment Revenue for Infrastructure Development of A$59.0 million has been restated to Investments A$40.5 million and Development A$18.5 million. Development A$132.2 million has been restated to Investments.
December 2015 has been restated to reflect the change in reporting segments as noted above. Profit After Tax for Infrastructure Development of A$28.3 million has been restated to Investments A$19.0 million and Development A$9.3 million. Development A$76.7 million has been restated to Investments.

HALF YEAR CONSOLIDATED FINANCIAL REPORT DECEMBER 2016 | LENDLEASE

Notes to the Consolidated Financial Statements continued

2. Dividends/Distributions[1]

Cents Per Share/Unit Franked Amount Per Share %	COMPANY/TRUST 6 months December 2016 A$m 6 months December 2015 A$m
Parent Company Interim Dividend December 2016 – declared subsequent to reporting date2 29.8	173.5
December 2015 – paid 15 March 2016 21.4	124.1
Lendlease Trust Interim Distribution December 2016 – payable 24 March 2017 3.2	18.9
December 2015 – paid 15 March 2016 8.6	50.3
	192.4 174.4
Cents Per Share/Unit Franked Amount Per Share %	COMPANY/TRUST 6 months June 2016 A$m 6 months June 2015 A$m
Parent Company Final Dividend June 2016 – paid 14 September 2016 27.5	160.0
June 2015 – paid 18 September 2015 22.9 25.0	132.7
Lendlease Trust Final Distribution June 2016 – paid 14 September 2016 2.5	14.7
June 2015 – paid 18 September 2015 4.1	24.0
	174.7 156.7

Interim dividends/distributions were not franked in the current and prior period. The June 2016 final dividend component was not franked. The June 2015 final dividend component was franked to 25.0%.
No provision for this dividend has been recognised in the Statement of Financial Position at 31 December 2016, as it was declared after the end of the half year.

3. Earnings Per Share/Stapled Security (EPS/EPSS)

	DECEMBER 2016	DECEMBER 2015
	Shares/Securities excluding Treasury Securities Shares/ Securities on Issue	Shares/Securities excluding Treasury Securities Shares/ Securities on Issue
Basic/Diluted Earnings Per Share (EPS) Proft attributable to members of Lendlease Corporation Limited A$m		257.7 257.7
	338.6 338.6
Weighted average number of ordinary shares m	556.4 582.7	552.1 580.9
Basic/Diluted EPS cents	60.9 58.1	46.7 44.4
Basic/Diluted Earnings Per Stapled Security (EPSS) Proft attributable to securityholders of Lendlease Group A$m		353.8 353.8
	394.8 394.8
Weighted average number of stapled securities m	556.4 582.7	552.1 580.9
Basic/Diluted EPSS cents	71.0 67.8	64.1 60.9

HALF YEAR CONSOLIDATED FINANCIAL REPORT DECEMBER 2016 | LENDLEASE

4. Revenue

4. Revenue
	6 months	6 months
	December 2016	December 2015
	A$m	A$m
Revenue from the provision of services
Construction	6,305.0	5,959.7
Development1	381.5	144.3
Investments1	286.2	230.2
Total revenue from the provision of services	6,972.7	6,334.2
Revenue from the sale of development properties	939.9	971.3
Rental revenue	9.4	5.1
Other revenue	23.3	29.4
Total revenue	7,945.3	7,340.0

December 2015 has been restated to refl ect the change in reporting segments as noted in Note 1 ‘Segment Reporting’. Revenue from the provision of services previously reported for Infrastructure Development of A$49.0 million has been restated to the Investments line A$34.9 million and to the Development line A$14.1 million. Development revenues previously reported of A$119.1 million have been restated to the Investments line.

5. Other Income

5. Other Income
	6 months	6 months
	December 2016	December 2015
	A$m	A$m
Net gain on sale/transfer of investments
Equity accounted investments		40.3
Other assets and liabilities	4.5	2.6
Consolidated entities	78.61
Available for sale fnancial assets		16.8
Total net gain on sale/transfer of investments	83.1	59.7
Net gain on fair value measurement
Investment properties		6.7
Derivative contracts held for trading		0.1
Fair value through proft or loss assets	28.9	14.4
Total net gain on fair value measurement	28.9	21.2
Other	27.01	4.2
Total other income	139.0	85.1

Net gain on sale of consolidated entities includes a A$66.2 million gain on sale of the Circular Quay Tower entities in December 2016. Other income includes the related A$16.7 million revaluation gain on the retained equity accounted investment in the entities.

6. Other Expenses

6. Other Expenses
	6 months	6 months
	December 2016	December 2015
	A$m	A$m
Proft before income tax includes the following other expense items:
Net defned beneft plan expense	2.4	4.5
Expenses include impairments raised/(reversals) relating to:
Loans and receivables	0.1	(3.3)
Property inventories	(17.9)	(5.9)
Equity accounted investments	(1.9)	(0.6)
Other fnancial assets		3.4
Net loss on sale of other assets and liabilities	6.9
Net loss on fair value measurement of investment properties	1.5
Operating lease expense	49.0	44.5
Depreciation and amortisation	47.8	40.8
Net foreign exchange loss	6.0	10.2

HALF YEAR CONSOLIDATED FINANCIAL REPORT DECEMBER 2016 | LENDLEASE

Notes to the Consolidated Financial Statements continued

7. Finance Revenue and Finance Costs

7. Finance Revenue and Finance Costs
6 months	6 months
December 2016	December 2015
A$m	A$m
Finance Revenue Related parties	1.3
Other corporations 4.3	3.8
Total interest fnance revenue 4.3	5.1
Interest discounting 1.2	9.7
Total fnance revenue 5.5	14.8
Finance Costs Other corporations 59.7	67.3
Less: Capitalised interest fnance costs (11.7)	(12.2)
Total interest fnance costs 48.0	55.1
Non interest fnance costs 7.1	5.4
Total fnance costs 55.1	60.5
Net fnance costs (49.6)	(45.7)

8. Share of Profi t of Equity Accounted Investments

8. Share of Prof t of Equity Accounted Investments
	6 months	6 months
	December 2016	December 2015
	A$m	A$m
Associates
Share of proft	7.6	10.2
Joint Ventures
Share of proft	36.1	111.2
Total share ofproft of equity accounted investments	43.7	121.4
a. Associates1
Australia
Development
Lendlease Communities Fund 1	(0.2)	0.3
Investments
Lendlease Sub Regional Retail Fund	1.7	2.2
Total Australia	1.5	2.5
Asia
Investments
Lendlease Asian Retail Investment Fund 2	0.1	(1.5)
Lendlease Asian Retail Investment Fund 3	4.2	4.5
Total Asia	4.3	3.0
Europe
Development
Other	0.6	3.5
Total Europe	0.6	3.5
Americas
Investments
Other	1.2	1.2
Total Americas	1.2	1.2
Total share of proft from associates	7.6	10.2

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.

HALF YEAR CONSOLIDATED FINANCIAL REPORT DECEMBER 2016 | LENDLEASE

8. Share of Profi t of Equity Accounted Investments continued

8. Share of Prof t of Equity Accounted Investmentscontinued
	6 months	6 months
	December 2016	December 2015
	A$m	A$m
b. Joint Ventures1
Australia
Development
Sunshine Coast University Hospital2		4.4
Other	5.0	3.9
Investments
Lendlease International Towers Sydney Trust3	17.6	34.1
Lendlease One International Towers Sydney Trust3	(0.3)	(0.9)
Total Australia	22.3	41.5
Asia
Development
Paya Lebar Quarter	0.5	0.5
Other		0.1
Investments
CDR JV Ltd (313@somerset)	0.7	(11.8)
Total Asia	1.2	(11.2)
Europe
Development
Stratford City Business District Limited	12.6	72.4
Investments
Majadahonda Hospital		0.6
Other		7.9
Total Europe	12.6	80.9
Americas
Total Americas	–	–
Total share of proft from joint ventures	36.1	111.2
Total share of proft from equity accounted investments	43.7	121.4

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.
Joint venture sold as part of the Australian PPP entities sale in June 2016.
As a result of reaching the operational phase for the three towers at International Towers Sydney, the governance structures of Lendlease International Towers Sydney Trust and Lendlease One International Towers Sydney Trust changed. The Group reassessed its joint control conclusions, and determined that joint control no longer exists. As a result, these investments have been reclassified from Equity Accounted Investments to Other Financial Assets measured at fair value through profit and loss. The Group has recorded its share of comprehensive income in relation to these investments for the period joint control was maintained.

c. Material Associates and Joint Ventures Summarised Financial Information

Material associates and joint ventures are determined by comparing individual investment carrying value and share of profit with the total equity accounted investment carrying value and share of profit, along with consideration of relevant qualitative factors. At 31 December 2016, there are no individually material associates or joint ventures requiring disclosure of financial information.

	ASSOCIATES	ASSOCIATES	JOINT VENTURES	JOINT VENTURES
	6 months December 2016 A$m	6 months December 2015 A$m	6 months December 2016 A$m	6 months December 2015 A$m
Group’s share of other comprehensive income/(expense) from equity accounted investments	(7.7) 0.3		16.5 4.0

HALF YEAR CONSOLIDATED FINANCIAL REPORT DECEMBER 2016 | LENDLEASE

Notes to the Consolidated Financial Statements continued

9. Taxation

Income Tax Expense

Income Tax Expense
	6 months	6 months
	December 2016	December 2015
	A$m	A$m
Recognised in the Income Statement
Current Tax Expense
Current period	78.3	11.7
Adjustments for prior years	(2.7)	0.3
Beneft of tax losses recognised	(2.6)	(7.0)
Deferred Tax Expense	73.0	5.0
Origination and reversal of temporary diferences	70.7	55.5
Temporary diferences (recovered)/recognised	(5.4)	0.9
Net tax losses written of	7.9	2.2
Change in tax rate	2.6
Adjustments for prior years	(1.1)	8.3
	74.7	66.9
Total income tax expense	147.7	71.9
Reconciliation of Ef ective Tax Rate
Proft before Tax	542.2	425.5
Income tax using the domestic corporation tax rate 30%	162.7	127.7
Adjustments for prior year tax claim	(2.7)	0.3
Non assessable and exempt income1	(21.7)	(55.4)
Non allowable expenses2	4.3	5.2
Net writeof of tax losses through income tax expense	10.4	20.8
Temporary diferences recognised through income tax expense3	(1.1)	(6.2)
Utilisation of capital losses on disposal of assets		(6.3)
Efect of tax rates in foreign jurisdictions4	3.0	(5.6)
Other	(7.2)	(8.6)
Income tax expense	147.7	71.9

Includes LLT profit.
Includes accounting expenses for which a tax deduction is not allowed permanently.
Includes temporary differences recognised in a previous year but are subsequently written off to the income tax expense in the current period and temporary differences that arose in a previous year but were not recognised until the current period.
The Group operates in a number of foreign jurisdictions for trading purposes which have significantly lower tax rates than Australia such as the United Kingdom and Singapore and higher tax rates such as the United States of America and Japan. Also includes the effect of change in tax rates.

10. Events Subsequent to Balance Date

There were no material events subsquent to the end of the financial period.

HALF YEAR CONSOLIDATED FINANCIAL REPORT DECEMBER 2016 | LENDLEASE

Section B: Investment

Investment in the property and infrastructure development pipeline, joint ventures in property projects, the retirement sector, and more passive assets, such as property funds, drives the current and future performance of the Group. This section includes disclosures for property such as Inventories and Investment Properties and indirect property assets such as Equity Accounted Investments and Other Financial Assets contained within the Statement of Financial Position.

11. Inventories

11. Inventories
	December 2016	June 2016
	A$m	A$m
Current
Development properties	1,654.3	1,020.1
Construction work in progress	816.9	894.0
Other	17.0	8.9
Total current	2,488.2	1,923.0
Non Current
Development properties	2,475.4	2,679.9
Total non current	2,475.4	2,679.9
Total inventories	4,963.6	4,602.9

12. Equity Accounted Investments

	December 2016	June 2016
	A$m	A$m
Associates
Investment in associates	220.1	228.1
Less: Impairment	(6.4)	(5.9)
Total associates	213.7	222.2
Joint Ventures
Investment in joint ventures	544.2	946.9
Less: Impairment	(13.9)	(16.5)
Total joint ventures	530.3	930.4
Total equity accounted investments	744.0	1,152.6

HALF YEAR CONSOLIDATED FINANCIAL REPORT DECEMBER 2016 | LENDLEASE

Notes to the Consolidated Financial Statements continued

12. Equity Accounted Investments continued

12. Equity Accounted Investmentscontinued
	INTEREST December 2016 % June 2016 %		NET BOOK VALUE
	December 2016 %		December 2016 A$m	June 2016 A$m
a. Associates Australia Development Lendlease Communities Fund 1				4.3


	20.8	20.8	4.1
Investments Lendlease Sub Regional Retail Fund1				38.0
	10.0	10.0	38.4
Total Australia			42.5	42.3
Asia Investments Lendlease Asian Retail Investment Fund 2				24.0

	35.9	35.9	22.1
Lendlease Asian Retail Investment Fund 3	20.1	20.1	150.3	156.4
Total Asia			172.4	180.4
Europe Development Other				4.0

			3.9
Total Europe			3.9	4.0
Americas Investments Other				1.4

			1.3
Total Americas			1.3	1.4
Total			220.1	228.1
Less: Impairment			(6.4)	(5.9)
Total associates			213.7	222.2

Although the Group has a 10% ownership interest in Lendlease Sub Regional Retail Fund, it holds 20% of the voting rights over the fund and has significant influence over the investment. As a result, the Group applies equity accounting for its ownership interest.

HALF YEAR CONSOLIDATED FINANCIAL REPORT DECEMBER 2016 | LENDLEASE

12. Equity Accounted Investmentscontinued	INTEREST December 2016 % June 2016 %	NET BOOK VALUE
		December 2016 A$m June 2016 A$m
b. Joint Ventures Australia Development Circular Quay Tower	20.0	34.0
Other		17.5 19.9
Investments Lendlease International Towers Sydney Trust1	15.0	380.3
Lendlease One International Towers Sydney Trust1	12.5	107.5
Total Australia		51.5 507.7
Asia Development Paya Lebar Quarter	30.0 30.0	178.4 177.3
Investments CDR JV Ltd (313@somerset)	25.0 25.0	84.2 90.6
Total Asia		262.6 267.9
Europe Development Stratford City Business District Limited	50.0 50.0	58.4 45.8
Hungate (York) Regeneration Limited	50.0 50.0	4.7 4.8
Investments Treviso	50.0 50.0	7.7 7.6
Other		4.9 5.0
Total Europe		75.7 63.2
Americas Development 281 Fifth Avenue	40.0 40.0	56.5 53.3
Riverline	60.0 60.0	68.2 48.9
845 Madison	70.0 70.0	28.3 4.4
Construction Other		1.4 1.5
Total Americas		154.4 108.1
Total		544.2 946.9
Less: Impairment		(13.9) (16.5)
Total joint ventures		530.3 930.4
Total equity accounted investments		744.0 1,152.6

As a result of reaching the operational phase for the three towers at International Towers Sydney, the governance structures of Lendlease International Towers Sydney Trust and Lendlease One International Towers Sydney Trust changed. The Group reassessed its joint control conclusions, and determined that joint control no longer exists. As a result, these investments have been reclassified from Equity Accounted Investments to Other Financial Assets measured at fair value through profit and loss.

c. Material Associates and Joint Ventures Summarised Financial Information

HALF YEAR CONSOLIDATED FINANCIAL REPORT DECEMBER 2016 | LENDLEASE

Notes to the Consolidated Financial Statements continued

13. Investment Properties

13. Investment Properties
	December 2016	June 2016
	A$m	A$m
a. Investment Properties – Non Current
Retirement living properties	6,236.6	5,743.1
Retail properties	72.3	71.9
Assets under construction	130.6	125.7
Total investmentproperties	6,439.5	5,940.7
Reconciliations
Reconciliations of the carrying amount for investment properties are as follows:
Carrying amount at beginning of fnancial period	5,940.7	5,994.9
(Disposal)/acquisition and capital expenditure of investment properties	165.4	(410.9)
Fair value loss recognised through the Income Statement	(1.5)	(2.2)
Increase attributable to capital gain	335.0	328.3
Foreign exchange rate/other movements	(0.1)	30.6
Carrying amount at end of fnancial period	6,439.5	5,940.7
b. Resident Liabilities1
Gross resident liabilities	5,144.9	4,796.9
Deferred management fees receivable on owned sites	(700.8)	(677.4)
Total resident liabilities	4,444.1	4,119.5

Resident liabilities are non interest bearing and are classifi ed as current liabilities because any resident may choose to depart within 12 months. The Group’s actual commercial history has shown residents stay for an average period of 11 years in independent living units (ILUs) and six years in serviced apartments (SAs). Therefore the portion of the resident liabilities that could be considered current represents 5%-10% of the total balance and non current represents 90%-95% of the total balance. This current and non current split of resident liabilities provides more useful and meaningful information as it better refl ects the commercial substance of the Group’s liabilities.

Net investment properties are classified as Level 3 in the fair value hierarchy. Refer below for valuation technique.

Net investment properties includes net retirement living properties after deducting resident liabilities and related deferred revenue, A$1,664.9 million (June 2016: A$1,508.1 million), retail properties A$72.3 million (June 2016: A$71.9 million) and assets under construction A$130.6 million (June 2016: A$125.7 million).

c. Valuation Technique

The key assumptions used in the fair value assessments 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:

Weighted average discount rate of 13.0% (June 2016: 13.3%) and weighted average future growth rate of 3.6% (June 2016: 3.7%);
Average length of stay: 11 years for independent living units (June 2016: 11 years) and six years for serviced apartments (June 2016: six years); and
A discounted cash flow valuation model using a 50 year terminal yield.

For retirement living properties included in assets under construction, the assumptions adopted in determining the fair values at 31 December 2016 included:

Discount rates between 14.0% and 17.0% (June 2016: 14.0% and 17.0%) based on the stage of development/assessed project risk; and
Growth rates are generally between 3.0% and 4.0% (June 2016: between 2.0% and 4.0%) based on price and cost escalation assumptions determined by individual property factors.

d. Fair Value Reconciliation

Reconciliation of carrying value for Level 3 net investment properties.

	December 2016	June 2016
	A$m	A$m
Carrying amount at beginning of fnancial period	1,705.7	1,779.0
Additions/(disposals) and capital expenditure	76.6	(108.4)
Losses recognised in Income Statement	(1.5)	(2.2)
Other movements	87.0	37.3
Carrying amount at end of fnancial period	1,867.8	1,705.7

The potential effect of using reasonably possible alternative assumptions for valuation inputs would not have a material impact on the Group.

HALF YEAR CONSOLIDATED FINANCIAL REPORT DECEMBER 2016 | LENDLEASE

14. Other Financial Assets

14. Other Financial Assets
	Fair Value	December 2016	June 2016
	Level1	A$m	A$m
Current Measured at Fair Value
Fair Value Through Proft or Loss – Designated at Initial Recognition
Negotiable instruments	Level 1	34.6	36.1
Derivatives	Level 2	30.4	14.6
Total current		65.0	50.7
Non Current Measured at Fair Value
Available for Sale
Australian Prime Property Fund – Retail	Level 3	45.3	44.8
Lendlease Core Plus Fund	Level 3		0.5
Lendlease Retail LP	Level 3	61.6	65.7
Lendlease Asian Retail Investment Fund	Level 3	27.1	29.1
Parkway Parade Partnership Limited	Level 3	39.4	34.9
Other	Level 3	132.6	129.1
Fair Value Through Proft or Loss – Designated at Initial Recognition		306.0	304.1
Lendlease International Towers Sydney Trust2	Level 3	391.7
Lendlease One International Towers Sydney Trust2	Level 3	195.3
Australian Prime PropertyFund – Industrial	Level 3	74.2	73.3
Australian Prime PropertyFund – Commercial	Level 3	202.1	191.4
Lendlease Public Infrastructure Investment Company	Level 3	42.4	40.5
Other unlisted investments	Level 3	10.1	10.1
Derivatives	Level 2	0.3	0.7
Held to Maturity – Other	N/A	916.1 8.3	316.0 8.7
Total non current		1,230.4	628.8
Total other fnancial assets		1,295.4	679.5

Refer to Note 17 ‘Fair Value Measurement’ for details on basis of determining fair value and valuation technique.
As a result of reaching the operational phase for the three towers at International Towers Sydney, the governance structures of Lendlease International Towers Sydney Trust and Lendlease One International Towers Sydney Trust changed. The Group reassessed its joint control conclusions, and determined that joint control no longer exists. As a result, these investments have been reclassified from Equity Accounted Investments to Other Financial Assets measured at fair value through profit and loss.

a. Fair Value Reconciliation[1]

The reconciliation of the carrying amount for Level 3 financial assets is set out as follows.

The reconciliation of the carrying amount for Level 3 fnancial assets is set out	as follows.
		Available for	Unlisted
		Sale Investments	Investments
December 2016	Note	A$m	A$m
Carrying amount at beginning of fnancial period		304.1	315.3
Additions/(disposals)		6.0	73.8
Gains/(losses)recognised in Income Statement			28.8
Gains/(losses) recognised in Other Comprehensive Income		(6.4)
Other movements		2.3	497.92
Carrying amount at end of fnancial period	14	306.0	915.8
June 2016
Carrying amount at beginning of fnancial year		328.3	287.2
Additions/(disposals)		(16.3)	16.2
Gains/(losses)recognised in Income Statement2		(3.4)	12.0
Gains/(losses) recognised in Other Comprehensive Income3		(4.5)	(0.1)
Carrying amount at end of fnancialyear	14	304.1	315.3

Held to Maturity investments have been removed from the Fair Value Reconciliation as amounts are held at amortised cost.
Includes transfers from Equity Accounted Investments during the period for investments in Lendlease International Towers Sydney Trust and Lendlease One International Towers Sydney Trust.
June 2016 comparatives have been restated and presented on a combined basis for the half year ended 31 December 2016 to reflect current period presentation.

The potential effect of using reasonably possible alternative assumptions for valuation inputs would not have a material impact on the Group.

HALF YEAR CONSOLIDATED FINANCIAL REPORT DECEMBER 2016 | LENDLEASE

Notes to the Consolidated Financial Statements continued

Section C: Liquidity and Working Capital

The ability of the Group to fund the continued investment in the property and infrastructure pipeline, invest in new opportunities and meet current commitments is dependent on available cash and access to third party capital. This section contains disclosure on the financial assets, financial liabilities, cash flows and equity that are required to finance the Group’s activities, including existing commitments and the liquidity risk exposure associated with financial liabilities. The section also contains disclosures for the Group’s trading assets, excluding inventories, and the trading liabilities incurred as a result of trading activities used to generate the Group’s performance.

15. Borrowings and Financing Arrangements

15. Borrowings and Financing Arrangements
December 2016 A$m	June 2016 A$m
a. Borrowings – Measured at Amortised Cost Current Commercial notes 297.8
Total current 297.8	–
Non Current Commercial notes 1,538.8	1,843.9
Bank credit facilities 8.3	187.4
Total non current 1,547.1	2,031.3
Total borrowings 1,844.9	2,031.3
b. Finance Facilities The Group has access to the following lines of credit: Commercial Notes Facility available 1,836.6	1,843.9
Amount of facility used (1,836.6)	(1,843.9)
Amount of facility unused –	–
Bank Credit Facilities Facility available 2,198.0	2,223.1
Amount of facility used (8.3)	(187.4)
Amount of facility unused 2,189.7	2,035.7
Bank Overdrafts Facility available and amount unused 123.6	136.9

Commercial notes include:

£300.0 million of guaranteed unsecured notes issued in October 2006 in the UK bond market with a 6.125% p.a. coupon maturing in October 2021;
US$25.0 million of guaranteed unsecured senior notes issued in October 2005 in the US private placement market with a 5.8% coupon maturing in October 2017, classifi ed as current for December 2016; US$400.0 million of guaranteed unsecured senior notes issued in May 2016 in the US Reg. S market under Lendlease’s Euro Medium Term Note programme with a coupon of 4.5% maturing in May 2026;
S$275.0 million of senior unsecured notes issued in July 2012 in the Singapore bond market with a 4.625% p.a. coupon maturing in July 2017, classifi ed as current for December 2016; and
A$475.0 million of unsecured medium term notes issued in May 2013 (A$375.0 million) and June 2014 (A$100.0 million) in the Australian bond market comprising A$250.0 million with a 5.5% p.a. coupon maturing in November 2018 and A$225.0 million with a 6.0% p.a. coupon maturing in May 2020.

Bank credit facilities include:

£400.0 million club bank facility maturing in March 2021 undrawn as at 31 December 2016; and
A$1,500.0 million syndicated multi-option facility maturing in June 2019 (A$600.0 million) and June 2020 (A$900.0 million) undrawn as at 31 December 2016.

The bank overdraft facilities may be drawn at any time and are repayable on demand.

Consistent with prior periods, the Group has not defaulted on any obligations in relation to its borrowings and finance arrangements and other financial liabilities.

HALF YEAR CONSOLIDATED FINANCIAL REPORT DECEMBER 2016 | LENDLEASE

16. Issued Capital

	LENDLEASE CORPORATION LIMITED	LENDLEASE CORPORATION LIMITED	LENDLEASE TRUST	LENDLEASE TRUST
	December 2016 No. of Shares (m) A$m	June 2016 No. of Shares (m) A$m	December 2016 No. of Units (m) A$m	June 2016
				No. of Units (m) A$m
Beginning of fnancial period	582.3 1,276.3	580.5 1,256.3	582.3 915.8	580.5 911.2
Transactions with owners: Distribution Reinvestment Plan		1.8 20.0		1.8 4.6
	0.7 7.6		0.7 1.7
End of fnancial period	583.0 1,283.9	582.3 1,276.3	583.0 917.5	582.3 915.8

a. Issuance of Securities

As at 31 December 2016, the Group had 583.0 million stapled securities on issue, equivalent to the number of Lendlease Corporation shares and Lendlease Trust (LLT) 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.

b. 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 6 March 2017. The issue price is the arithmetic average of the daily volume weighted average price of Lendlease Group stapled securities traded (on the Australian Securities Exchange) for the period of five 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.

c. Terms and Conditions

Issued capital for Lendlease Corporation Limited comprises of 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.

HALF YEAR CONSOLIDATED FINANCIAL REPORT DECEMBER 2016 | LENDLEASE

Notes to the Consolidated Financial Statements continued

Section D: Other Notes

17. Fair Value Measurement

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	DECEMBER 2016	JUNE 2016
	Carrying Amount A$m Fair Value A$m	Carrying Amount A$m Fair Value A$m
Liabilities Current Commercial notes 15a		– –

	297.8 305.6
Non Current Commercial notes 15a		1,843.9 2,237.3
	1,538.8 1,806.0

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.

a. Basis of Determining Fair Value

The determination of fair values of financial assets and liabilities that are measured at fair value are summarised as follows:

The fair value of unlisted equity investments, including investments in property funds, is determined based on an assessment of the underlying net assets, future maintainable earnings and any special circumstances pertaining to the particular investment;
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
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 and includes consideration of counterparty risk adjustments.

b. Fair Value Measurements

The different levels for valuation method have been defined as follows:

Level 1: The fair value is determined using the unadjusted quoted price for an identical asset or liability in an active market for identical assets or liabilities;
Level 2: The fair value is calculated using predominantly observable market data other than unadjusted quoted prices for an identical asset or liability; and
Level 3: The fair value is calculated using inputs that are not based on observable market data.

During the period there were no transfers between Level 1, Level 2 and Level 3 fair value hierarchies.

HALF YEAR CONSOLIDATED FINANCIAL REPORT DECEMBER 2016 | LENDLEASE

18. 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 to 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 of the Company’s subsidiaries.
A contingent liability exists in relation to the Lend Lease Retirement Benefit Fund. This is disclosed in detail in the 30 June 2016 annual consolidated financial report Note 29b ‘Employee Security Ownership Vehicles’.
Various actions have been commenced in which damages, compensation or contribution is sought from various subsidiaries of the Company (LLP entities) in respect of transactions entered into in mid 2007 in relation to a number of retirement villages which were at that time part of the Prime Trust portfolio. The liquidator of Australian Property Custodian Holdings Limited (Receivers and Managers Appointed) (Controllers Appointed) (In Liquidation) (APCH) has commenced three proceedings in which claims are made against the LLP entities. One proceeding was permanently stayed on 22 December 2015. On 9 February 2016, the liquidator served an application for leave to appeal against the stay, which the LLP entities are vigorously defending. The appeal has been heard. Judgment remains reserved. In the remaining two proceedings, APCH has made allegations against third parties in relation to the same transactions and those third parties have made contribution claims against the LLP entities. The LLP entities are vigorously defending these proceedings. The relevant transactions all occurred prior to the LLP entities becoming subsidiaries of the Company and at the relevant time the LLP entities were controlled by APCH or entities related to William Lewski, a director of the LLP entities at the time.

HALF YEAR CONSOLIDATED FINANCIAL REPORT DECEMBER 2016 | LENDLEASE

Notes to the Consolidated Financial Statements continued

Section E: Basis of Consolidation

19. Consolidated Entities

The material consolidated entities of the Group listed below were wholly owned during the current and prior period.

PARENT ENTITY

Lendlease Corporation Limited AUSTRALIA EUROPE Capella Capital Lendlease Pty Limited Lendlease Construction (Europe) Limited Capella Capital Partnership Lendlease Construction Holdings (Europe) Limited Lendlease Building Pty Limited Lendlease Europe Finance plc Lendlease Building Contractors Pty Limited Lendlease Europe Limited Lendlease Communities (Australia) Limited Lendlease Residential (CG) plc Lendlease Development Pty Limited ASIA Lendlease Engineering Pty Limited Lendlease Japan Inc. Lendlease Finance Limited Lendlease Singapore Pte. Limited Lendlease Infrastructure Investments Pty Limited AMERICAS Lendlease International Pty Limited Lendlease (US) Capital, Inc. Lendlease (Millers Point) Trust Lendlease (US) Construction, Inc. Lendlease Primelife Limited Lendlease (US) Construction LMB, Inc. Lendlease Real Estate Investments Limited Lendlease (US) Healthcare Development LLC Lendlease Responsible Entity Limited Lendlease (US) Public Partnerships, LLC Lendlease Services Pty Limited Lendlease Trust[1]

Lendlease Trust is a consolidated entity of the Group as the parent entity is deemed to control it. Lendlease Trust is not wholly owned.

During the current and prior period, there were no acquisitions of material consolidated entities.

During the prior period there were no disposals of material consolidated entities. The following material disposals of consolidated entities occured in the current period:

occured in the current period:
			Gross
	Ownership Interest		Consideration
	Disposed	Date	received/
	%	Disposed	receivable
AUSTRALIA
Circular Quay Tower1	80.0	20 December 2016	240.0
Lendlease (EGRP) Pty Ltd	100.0	6 October 2016	38.8

Represents the disposal of three entities relating to the Circular Quay Tower project.

HALF YEAR CONSOLIDATED FINANCIAL REPORT DECEMBER 2016 | LENDLEASE

Directors’ Declaration

In the opinion of the Directors of Lendlease Corporation Limited (the Company):

The financial statements and notes are in accordance with the Corporations Act 2001, including:
a. Giving a true and fair view of the financial position of the Company as at 31 December 2016 and of its performance for the half year ended on that date; and
b. Complying with Australian Accounting Standards AASB 134 Interim Financial Reporting and the Corporations Regulations 2001.
There are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

Signed in accordance with a resolution of the Directors:

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D A Crawford, AO Chairman

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S B McCann

Group Chief Executive Officer and Managing Director

Sydney, 27 February 2017

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Independent auditor’s review report to the members of Lendlease Corporation Limited

We have reviewed the accompanying half year financial report of Lendlease Corporation Limited (the Company), which comprises the consolidated statement of financial position as at 31 December 2016, consolidated income statement and consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the half year ended on that date, notes 1 to 19 comprising a summary of significant accounting policies and other explanatory information and the directors’ declaration of the Group comprising the Company and the entities it controlled at the half year’s end or from time to time during the half year.

Responsibility of the Directors for the half year financial report

The directors of the Company are responsible for the preparation of the half year financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the half year financial report that is free from material misstatement, whether due to fraud or error.

Auditor’s responsibility for the review of the half year financial report

Our responsibility is to express a conclusion on the half year financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity, in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the half year financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the Group’s financial position as at 31 December 2016 and its performance for the half year ended on that date; and complying with Australian Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 . As auditor of Lendlease Corporation Limited, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.

A review of a half year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Independence

In conducting our review, we have complied with the independence requirements of the Corporations Act 2001 .

KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.

Liability limited by a scheme approved under Professional Standards Legislation.

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Conclusion

Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the half year financial report of Lendlease Corporation Limited is not in accordance with the Corporations Act 2001 , including:

(a) giving a true and fair view of the Group’s financial position as at 31 December 2016 and of its performance for the half year ended on that date; and

(b) complying with Australian Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 .

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KPMG

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Duncan McLennan

Partner

Sydney

27 February 2017

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Portfolio Report December 2016

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Key Portfolio Metrics

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December 2016
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Key Portfolio Metrics
Development	1
Construction	2
Investments	3
Australia - Major Projects/Investments	5
Development	5
Construction	7
Investments	10
Asia - Major Projects/Investments	14
Development	14
Construction	14
Investments	14
Europe - Major Projects/Investments	16
Development	16
Construction	17
Investments	18
Americas - Major Projects/Investments	19
Development	19
Construction	19
Investments	20

The Portfolio Report is based on the Lendlease Group (the Group) Consolidated Financial Statements for the six months ended 31 December 2016 and should be read in conjunction with those � nancial statements.

All currency amounts in the Portfolio Report are expressed in Australian dollars unless otherwise speci � ed.

HALF YEAR CONSOLIDATED FINANCIAL REPORT DECEMBER 2016 | LENDLEASE

Portfolio Report

Key Portfolio Metrics

Development

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AUSTRALIA ASIA EUROPE AMERICAS TOTAL
Dec June Dec June Dec June Dec June Dec June
2016 2016 2016 2016 2016 2016 2016 2016 2016 2016
Residential and Commercial
Number of development projects [1] no. 24 25 2 2 10 11 6 5 42 43
Backlog Units [2]
Residential – Land units zoned no. 47,205 48,835 3,860 3,860 51,065 52,695
Residential – Built-form units zoned/
unzoned [3] no. 13,070 13,905 2,830 2,230 5,105 4,995 4,940 4,360 25,945 25,490
Total residential units no. 60,275 62,740 2,830 2,230 5,105 4,995 8,800 8,220 77,010 78,185
Commercial backlog zoned [4] sqm/000s 4,894 5,095 383 369 305 230 377 379 5,959 6,073
Retirement Living
Backlog units [5] no. 4,827 4,028 4,827 4,028
Infastructure
Number of infrastructure projects [6,7] no 1 2 2 2 3
Invested Equity [8] A$m 20.4 7.3 6.4 7.3 26.8
Committed Equity [9] A$m 10.7 12.3 10.7 12.3
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Where a project has multiple stages these have been combined in line with the planning process. Does not include the Alkimos Central and Mt Gilead projects in
Australia as the acquisitions are subject to a number of conditions including planning.
Backlog includes Group owned, joint venture and managed projects. The actual number of units for any particular project can vary as planning approvals are obtained.
Includes 25,365 zoned units and 580 unzoned units at December 2016 (June 2016: 25,490 zoned and zero unzoned units).
The actual land area and � oor space for any particular project can vary as planning approvals are obtained.
Backlog units include Group owned and managed sites and aged care beds within facilities to be constructed, subject to planning approval.
The Australian Infrastructure Development projects are managed by the Capella Capital business.
Projects in Europe as at December 2016 include Brescia 2 in Italy, which is under construction and Treviso Hospital in Italy for which the Group is preferred bidder.
Invested equity refers to the contributed equity for each project.
Committed equity refers to equity the Group has a future commitment to invest.

HALF YEAR CONSOLIDATED FINANCIAL REPORT DECEMBER 2016 | LENDLEASE

Construction

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AUSTRALIA ASIA EUROPE AMERICAS TOTAL
Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec
2016 2015 2016 2015 2016 2015 2016 2015 2016 2015
A$m A$m A$m A$m A$m A$m A$m A$m A$m A$m
New work secured revenue [1]
Building 2,331.1 2,052.4 598.1 48.0 411.7 623.7 2,547.7 1,654.0 5,888.6 4,378.1
Engineering 335.1 1,145.5 22.0 14.8 357.1 1,160.3
Services 99.9 517.1 99.9 517.1
Total new work secured
revenue 2,766.1 3,715.0 620.1 62.8 411.7 623.7 2,547.7 1,654.0 6,345.6 6,055.5
AUSTRALIA ASIA EUROPE AMERICAS TOTAL
Dec June Dec June Dec June Dec June Dec June
2016 2016 2016 2016 2016 2016 2016 2016 2016 2016
A$m A$m A$m A$m A$m A$m A$m A$m A$m A$m
Backlog revenue [2]
Building 6,843.8 6,330.6 884.2 555.9 1,076.8 1,505.0 6,924.3 6,715.2 15,729.1 15,106.7
Engineering 3,273.5 3,845.5 4.4 3.8 3,277.9 3,849.3
Services 1,523.7 1,714.2 1,523.7 1,714.2
Total backlog revenue 11,641.0 11,890.3 888.6 559.7 1,076.8 1,505.0 6,924.3 6,715.2 20,530.7 20,670.2
AUSTRALIA ASIA EUROPE AMERICAS TOTAL
Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec
2016 2015 2016 2015 2016 2015 2016 2015 2016 2015
% % % % % % % % % %
Backlog realisation
Year ending June 2017 31 30 38 60 63 41 31 30 31 31
Year ending June 2018 42 38 55 36 26 51 42 40 43 40
Post June 2018 27 32 7 4 11 8 27 30 26 29
Total 100 100 100 100 100 100 100 100 100 100
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New work secured revenue is the total revenue to be earned from projects secured during the period.
Current year backlog revenue is the total revenue to be earned from projects in future � nancial years, based on projects secured as at 31 December 2016.

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.

HALF YEAR CONSOLIDATED FINANCIAL REPORT DECEMBER 2016 | LENDLEASE

continued Portfolio Report

Key Portfolio Metrics continued

Investments

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AUSTRALIA ASIA EUROPE AMERICAS TOTAL
Dec June Dec June Dec June Dec June Dec June
2016 2016 2016 2016 2016 2016 2016 2016 2016 2016
Investments [1] (A$m)
- Co-Investments 1,088.8 974.7 327.9 339.8 61.5 65.7 1,478.2 1,380.2
- Retirement Ownership 1,653.9 1,488.3 1,653.9 1,488.3
- Infrastructure Investment 15.2 15.2 111.7 109.4 126.9 124.6
Total Investments 2,757.9 2,478.2 327.9 339.8 61.5 65.7 111.7 109.4 3,259.0 2,993.1
Funds Under Management (FUM) [1]
(A$b)
FUM at the beginning of the
period 16.5 13.8 5.6 5.3 1.5 2.2 23.6 21.3
Foreign exchange movement (0.2) 0.2 (0.1) (0.4) (0.3) (0.2)
Additions 1.0 2.1 0.2 1.0 2.3
Reductions (0.1) (0.3) (0.1) (0.4) (0.1) (0.8)
Net revaluations 0.5 0.9 0.1 0.5 1.0
Total FUM 17.9 16.5 5.4 5.6 1.4 1.5 24.7 23.6
Assets Under Management
(AUM)
Number of centres 16 16 4 4 2 2 22 22
AUM [1] (A$b) 6.8 6.4 4.2 4.4 0.9 0.9 11.9 11.7
GLA under management
(sqm/000s) [2] 726.4 722.2 312.6 294.8 141.7 141.7 1,180.7 1,158.7
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Represents the Group’s assessment of the market value.
Represents the gross lettable area of the centres, with the exception of Asia which represents the net lettable area of the centres.

HALF YEAR CONSOLIDATED FINANCIAL REPORT DECEMBER 2016 | LENDLEASE

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HALF YEAR CONSOLIDATED FINANCIAL REPORT DECEMBER 2016 | LENDLEASE

continued Portfolio Report

Australia

Development

Residential and Commercial Project Listing

Development Residential and Commercial Project Listing
Project Sector Location1	Ownership Interest Estimated Completion Date2	RESIDENTIAL Estimated Backlog Land Units3,4 Estimated Backlog Built-Form Units3,4	COMMERCIAL
			Estimated Backlog sqm/000s5
Zoned Projects Bingara Gorge Communities NSW	Land management 2025	1,170	38
Calderwood Valley Communities NSW	Land management 2035	4,565	56
St Marys – Jordan Springs Communities NSW	Owned (100% interest) 2023	1,075 20	491
The New Rouse Hill Communities NSW	Land management 2018	25 430
Barangaroo South Urbanisation NSW	Staged payments (100% interest) 2023	775	80
Circular Quay Urbanisation NSW	Joint Venture (20% interest) 2021		55
Darling Square Urbanisation NSW	Staged payments (100% interest) 2019	1,507	70
Fernbrooke Ridge Communities Qld	Land management 2018	195
Elliot Springs (formerly Rocky Springs) Communities Qld	Land management 2058	10,675	1,037
Spring�eld Lakes Communities Qld	Land Management 2026	4,340 315	47
Yarrabilba Communities Qld	Staged acquisition (100% interest) 2043	13,255 1,190	2,097
Brisbane Showgrounds Urbanisation Qld	Land Management 2029	2,579	85
Subtotal zoned (carried forward)		35,300 6,816	4,056

Locations are New South Wales (NSW) and Queensland (Qld).
Estimated completion date represents the expected � nancial year in which the last unit will be settled for master-planned communities and the construction

completion date for apartments and non-residential projects.

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.
Backlog units do not include the Alkimos Central and Mt Gilead projects as the acquisitions are subject to a number of conditions including planning.
Represents net developable land in relation to master-planned urban communities and net developable � oor space for other developments. The actual land area and � oor space for any particular project can vary as planning approvals are obtained.

HALF YEAR CONSOLIDATED FINANCIAL REPORT DECEMBER 2016 | LENDLEASE

Residential and Commercial Project Listing continued

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RESIDENTIAL COMMERCIAL
Estimated Estimated
Estimated Backlog Backlog Estimated
Completion Land Built-Form Backlog
Project Sector Location [1] Ownership Interest Date [2] Units [3,4] Units [3,4] sqm/000s [5]
Subtotal zoned projects (brought forward) 35,300 6,816 4,056
Staged acquisition
Blakes Crossing Communities SA (100% interest) 2019 525 9
Owned (100%
Richmond Urbanisation Vic interest) 2021 363
Owned (100%
Toorak Park Urbanisation Vic interest) 2017 468
Land
Atherstone Communities Vic management 2033 3,950 80
Owned (100%
Aurora Communities Vic interest) 2025 2,700 189
Land
Harpley Communities Vic management 2024 3,190 313
Owned (100%
May � eld Communities Vic interest) 2017 25
Land
Melbourne Quarter Urbanisation Vic management 2022 1,683 129
Land
Victoria Harbour Urbanisation Vic management 2025 2,500 46
Land
Alkimos Communities WA management 2024 1,500 15 55
The Assembly at Land
Coolbellup Communities WA management 2017 15
Land
Waterbank Urbanisation WA management 2026 1,225 17
Total zoned 47,205 13,070 4,894
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Locations are South Australia (SA), Victoria (Vic) and Western Australia (WA).
Estimated completion date represents the expected � nancial year in which the last unit will be settled for master-planned communities and the construction

apartments and non-residential projects.

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 are obtained.
Backlog units do not include the Alkimos Central and Mt Gilead projects in Australia as the acquisitions are subject to a number of conditions including planning.
Represents net developable land in relation to master-planned urban communities and net developable � oor space for other developments. The actual land area any particular project can vary as planning approvals are obtained.

HALF YEAR CONSOLIDATED FINANCIAL REPORT DECEMBER 2016 | LENDLEASE

continued Portfolio Report

Australia continued

Construction

Major Projects – Building[1,2]

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Construction Value [5]
Project Location [3] Client Contract Type [4] A$m Secured Date [6] Completion Date [7] Sector
Barangaroo South NSW Lendlease/Barangaroo Delivery Authority LS 3,018 2012 2017 Commercial & Residential
Darling Square (formerly Darling Harbour Live) NSW Lendlease Development LS/MC 1,080 2015 2019 Residential & Hotel/Entertainment
Crown Sydney Hotel Resort NSW Crown Resorts Limited MC 1,052 2015 2021 Hotel/Entertainment
New Air Combat Capability – RAAF Williamtown NSW Commonwealth Department of Defence MC 862 2015 2019 Defence
New Bendigo Hospital Vic Victorian Government / Bendigo Health LS 630 2013 2018 Other
New Air Combat Capability - RAAF Tindal NT Commonwealth Department of Defence MC 418 2016 2021 Defence
Adelaide Convention Centre Redevelopment Department of Planning, Transport and Infrastructure,
SA South Australia MC 356 2011 2018 Commercial
ADF Air Tra � c Control Complex Infrastructure Project National Commonwealth Department of Defence MC 335 2017 2019 Defence
Western Sydney Stadium NSW Infrastructure NSW LS 300 2017 2019 Hotel/Entertainment
Air 7000 Phase 2B SA Commonwealth Department of Defence MC 287 2016 2019 Defence
Sunshine Plaza Redevelopment Qld APPF/GPT Funds Management Limited LS 286 2017 2019 Other
60 Martin Place NSW Investa LS 276 2016 2020 Commercial
Land 121 Stage 2 Unit Sustainment Facilities National Commonwealth Department of Defence MC 258 2016 2020 Defence
Monash Children’s Hospital Vic Department of Health and Human Services MC 222 2014 2017 Other
Gosford Hospital Redevelopment NSW Health Infrastructure LS 214 2016 2019 Other
Adelaide Medical & Nursing School SA The University of Adelaide MC 212 2014 2017 Other
Toorak Park, Armadale Vic Lendlease Development CM 209 2015 2017 Residential
Campbell Barracks Redevelopment Project WA Commonwealth Department of Defence LS 200 2016 2019 Defence
Western Women’s & Children’s Hospital Vic Department of Health and Human Services MC 187 2016 2019 Other
Hunter Correctional Centre NSW NSW Department of Justice GMP 184 2017 2018 Other
Victoria Harbour - 883 Collins Vic Lendlease Development CM 173 2016 2018 Residential
Melbourne Quarter – Commercial One Vic Lendlease Development LS 172 2017 2019 Commercial
Victoria Harbour - 889 Collins Vic Lendlease Development CM 171 2015 2017 Residential
Palmerston Hospital NT Department of Infrastructure NT MC 166 2016 2018 Other
Macarthur Square Redevelopment NSW APPF/GPT Funds Management Limited LS 151 2016 2018 Other
HATS Delivery Phase – Helicopter Aircrew Training
System Facilities Project ACT Commonwealth Department of Defence MC 134 2015 2017 Defence
Victoria Harbour – Collins Wharf 1 Vic Lendlease Development CM 136 2017 2018 Residential
Delamere Air Weapons Range Redelopment Project NT Commonwealth Department of Defence MC 134 2017 2018 Defence
Growler Airbourne Attack Facility Project Qld Commonwealth Department of Defence MC 121 2016 2018 Defence
The Yards Qld Lendlease Development CM 121 2015 2017 Residential
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Disclosure of major projects is subject to client approval. This could impact the projects available for disclosure.
Backlog revenue as at 31 December 2016 for the projects listed totals A$5,895 million, representing 86% of the total backlog revenue for the region in relation to
Building projects.
Locations are New South Wales (NSW ), Victoria (Vic), Northern Territory (NT), South Australia (SA), National, Queensland (Qld) and Western Australia (WA).
Contract types are Lump Sum (LS), Managing Contractor (MC), Construction Management (CM) and Guaranteed Maximum Price (GMP).
Construction value represents the Group’s share of the total construction value of the project.
Secured date represents the � nancial year in which the project was secured.
Completion date represents the � nancial year in which the project is expected to be completed.

HALF YEAR CONSOLIDATED FINANCIAL REPORT DECEMBER 2016 | LENDLEASE

continued Portfolio Report

Australia continued

Construction continued

Major Projects – Engineering[1,2]

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Construction
Project Location [3] Client ContractType [4] ValueA$m [5] SecuredDate [6] [Completion] Date [7] Sector
North Connex NSW NorthConnex Co. Pty. Ltd D&C 1,283 2015 2020 Transport
M1/M2 Tunnel
Northern Connector SA SA Department of Planning D&C 985 2016 2019 Transport
Transport & Infrastructure
Gateway Qld Queensland Department of D&C 658 2016 2018 Transport
Upgrade North Transport & Main Roads
Oxley Highway NSW NSW Roads & Maritime Services D&C 598 2014 2018 Transport
to Kundabung, Paci � c
Highway
Caul � eld to Dandenong Vic Level Crossing Removal ALL 530 2016 2019 Transport
Authority
Kingsford Smith Drive Qld Brisbane City Council D&C 441 2016 2019 Transport
CityLink Tulla Widening Vic VicRoads D&C 230 2016 2018 Transport
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Disclosure of major projects is subject to client approval. This could impact the projects available for disclosure.
Backlog revenue as at 31 December 2016 for the projects listed totals A$2,972 million, representing 91% of the total backlog revenue for the region in relation to Engineering projects.
Locations are New South Wales (NSW), South Australia (SA), Queensland (Qld), and Victoria (Vic).
Contract types are Design and Construct (D&C) and Alliance (ALL).
Construction value represents the Group’s share of the total construction value of the project.
Secured date represents the � nancial year in which the project was secured.
Completion date represents the � nancial year in which the project is expected to be completed.

HALF YEAR CONSOLIDATED FINANCIAL REPORT DECEMBER 2016 | LENDLEASE

Investments

Co-Investments

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Lendlease Market Value [1] Market Value [1]
Interest December 2016 June 2016
Region % A$m A$m
Lendlease International Towers Sydney Trust Australia 15.0 391.6 380.3
Australian Prime Property Fund – Commercial Australia 7.8 208.3 197.3
Lendlease One International Towers Sydney Trust Australia 12.5 195.5 107.5
Craigieburn Central Australia 25.0 78.7 78.3
Australian Prime Property Fund – Industrial Australia 10.7 79.3 78.3
Australian Prime Property Fund – Retail Australia 1.0 45.0 44.5
Lendlease Public Infrastructure Investment Company Australia 10.0 42.4 40.5
Lendlease Sub Regional Retail Fund Australia 10.0 38.4 38.0
Lendlease Real Estate Partners New Zealand Fund New Zealand 5.3 8.4 8.1
Lendlease Communities Fund 1 Australia 20.8 1.2 1.4
Lendlease Core Plus Fund Australia n/a 0.5
Total Investments 1,088.8 974.7
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Represents the Group’s assessment of the market value.

HALF YEAR CONSOLIDATED FINANCIAL REPORT DECEMBER 2016 | LENDLEASE

continued Portfolio Report

Australia continued

Investments continued

Funds Under Management

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Market Value [1] Market Value [1]
Dec 2016 June 2016
Fund Fund type Asset class A$b A$b
Australian Prime Property Fund – Retail Core Retail 5.1 5.0
Lendlease International Towers Sydney Trust Core Commercial 3.3 3.2
Australian Prime Property Fund – Commercial Core Commercial 3.0 2.9
Managed Investment Mandates Core Various 2.5 2.0
Lendlease One International Towers Sydney Trust Core Commercial 1.8 1.3
Australian Prime Property Fund – Industrial Core Industrial 0.9 0.9
Lendlease Sub Regional Retail Fund Core Retail 0.6 0.6
Lendlease Public Infrastructure Investment Company Core Social Infrastructure 0.4 0.4
Lendlease Real Estate Partners New Zealand Fund Enhanced Retail 0.3 0.2
Total FUM 17.9 16.5
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Represents the Group’s assessment of the market value.

HALF YEAR CONSOLIDATED FINANCIAL REPORT DECEMBER 2016 | LENDLEASE

Assets Under Management

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Market Value [2] Market Value [2]
GLA Dec 2016 June 2016
Shopping centres Managed on behalf of sqm/000s [1] A$b A$b
Cairns Central, Qld APPF Retail 52.8
Caneland Central, Qld APPF Retail 65.6
Caroline Springs Square, Vic APPF Retail 21.0
Sunshine Plaza, Qld APPF Retail/Other joint owners 73.7
Erina Fair, NSW APPF Retail/Other joint owners 114.7
Macarthur Square, NSW APPF Retail/Other joint owners 94.6
Mid City (retail), NSW APPF Retail/Other joint owners 9.5
Lakeside Joondalup, WA APPF Retail/Other joint owners 100.2
Craigieburn Central, Vic APPF Retail/Lendlease 62.7 6.8 6.4
Menai Marketplace, NSW Lendlease Sub Regional Retail Fund 16.5
Settlement City, NSW Lendlease Sub Regional Retail Fund 19.4
Southlands Boulevarde, WA Lendlease Sub Regional Retail Fund 21.5
Armadale Shopping City, WA Lendlease Sub Regional Retail Fund 31.0
Northgate, WA Lendlease Sub Regional Retail Fund 15.9
Barangaroo South (Retail), NSW Other owner 6.3
Watertown, WA Other owner 21.0
Total 726.4 6.8 6.4
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GLA represents the gross lettable area of the centres.
Represents the Group’s assessment of the market value.

Retirement Living Portfolio Summary

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AUSTRALIA
Dec June
2016 2016
Retirement Living
Villages – owned no. 71 69
Villages – managed/leased/other no. 4
Number of villages no. 71 73
Units – owned no. 12,433 12,172
Units – managed/leased/other no. 1,212
Number of units [1] no. 12,433 13,384
Number of resale units [2] no. 453 541
Long Term Growth Rate % 3.6 3.7
Discount Rate % 13.0 13.3
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Includes 100% of Group owned and managed properties. Only includes completed units.
Comparative units of 541 represent resales during the prior corresponding period ending December 2015.

HALF YEAR CONSOLIDATED FINANCIAL REPORT DECEMBER 2016 | LENDLEASE

continued Portfolio Report

Australia continued

Investments continued

Retirement Living Portfolio Summary

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Total Number of
Location [1] Villages Total Units [2]
Qld 12 2,913
NSW 17 3,181
Vic 26 4,057
SA 4 500
WA 10 1,623
ACT 2 159
Total retirement villages 71 12,433
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1 Locations are Queensland (Qld), New South Wales (NSW), Victoria (Vic), South Australia (SA), Western Australia (WA), Australian Capital Territory (ACT).

2 Includes 100% of Group owned and managed properties. Only includes completed units.

Infrastructure Investment

Actual Financial	Operational	Invested Equity2
Project Location1 Status Close Date Healthcare Queen Elizabeth II Medical Centre Car Park WA Operational Jul 11	Term Years 26	A$m 15.2
Total		15.2

Location is Western Australia (WA).
Invested equity refers to the contributed equity for each project.

HALF YEAR CONSOLIDATED FINANCIAL REPORT DECEMBER 2016 | LENDLEASE

Asia

Development

Project Sector Location Ownership Interest % Estimated Completion Date1 Estimated Backlog Built-Form Units2	Estimated Commercial Backlog sqm/000s3
Zoned Projects
Paya Lebar Quarter Urbanisation Singapore 30 2019 430	137
The Lifestyle Quarter at Tun Razak Exchange Urbanisation Malaysia 60 2024 2,400	246
Total zoned 2,830	383

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

2 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.

3 Commercial space has been disclosed based on Gross Floor Area (GFA). GFA in Asia refers to the total area of the covered � oor space measured between the

centre line of party walls, including the thickness of external walls but excluding voids. The actual land area and � oor space for any particular project can vary as planning approvals are obtained.

Construction

Major Projects[1,2]

			Contract	Construction Value4	Secured	Completion
Project	Location	Client	Type3	A$m	Date5	Date6	Sector
Paya Lebar	Singapore	Roma Central Pte. Ltd.	GMP	798.1	2016	2019	Commercial
Quarter		Verona Central Pte. Ltd.					& Residential
		Milano Central Pte. Ltd.

Disclosure of major projects is subject to client approval. This could impact the projects available for disclosure.
Backlog revenue as at 31 December 2016 for the project listed totals A$638 million, representing 72% of the total Construction backlog revenue for the region.
Contract types are Guaranteed Maximum Price (GMP).
Construction value represents the Group’s share of the total construction value of the project.
Secured date represents the � nancial year in which the project was secured.
Completion date represents the � nancial year in which the project is expected to be completed.

Investments

Co - Investments

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Lendlease Market Value [1, 6] Market Value [1, 6] Market Value [1, 6] Market Value [1, 6]
Interest Dec 2016 June 2016 Dec 2016 June 2016
% S$m S$m A$m A$m
Lendlease Asian Retail Investment Fund (ARIF)
ARIF 1 (313@somerset) [2] 10.1 28.2 29.1 27.1 29.1
ARIF 2 (Setia City Mall) [3] 35.9 23.0 24.0 22.1 24.0
ARIF 3 (Jem) [4] 20.1 156.3 156.4 150.3 156.4
313@somerset [2] 25.0 92.3 95.3 88.8 95.3
Parkway Parade Partnership Limited [5] 6.1 41.2 35.0 39.6 35.0
Total Investments 341.0 339.8 327.9 339.8
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Represents the Group’s assessment of the market value.
The Group owns 25% of the 313@somerset retail centre through its investment in CDR JV Ltd, with the remaining 75% held by ARIF 1, in which the Group holds a 10.1% interest.
The Group directly owns 35.9% of ARIF 2, which has a 50% ownership interest in Setia City Mall.
The Group owns 20.1% of ARIF 3, which has a 75% ownership in Jem.
The Group increased its stake in Parkway Parade Partnership Limited from 4.9% as at June 2016 to 6.1% as at 31 December 2016.
The exchange rate applied to the Asia Co-Investment balances as at December 2016 is A$1=S$1.04 (June 2016: A$1 = S$1).

HALF YEAR CONSOLIDATED FINANCIAL REPORT DECEMBER 2016 | LENDLEASE

continued Portfolio Report

Asia continued

Investments continued

Funds Under Management

Funds Under Management
			Market	Market	Market	Market
			Value1,2	Value1,2	Value1,2	Value1,2
			Dec	June	Dec	June
			2016	2016	2016	2016
Fund Lendlease Asian Retail Investment Fund (ARIF)	Fund Type Core	Asset Class Retail and Commercial	S$b 2.4	S$b 2.5	A$b 2.3	A$b 2.5
Managed Investment Mandate	Value Add	Retail and Commercial	1.5	1.4	1.4	1.4
Parkway Parade Partnership Limited	Core Plus	Retail and Commercial	1.2	1.2	1.2	1.2
Lendlease Jem Partners Fund Limited	Core	Retail and Commercial	0.5	0.5	0.5	0.5
Total FUM			5.6	5.6	5.4	5.6

Represents the Group’s assessment of the market value.
The exchange rate applied to the Asia FUM balances as at December 2016 is A$1=S$1.04 (June 2016: A$1 = S$1).

Assets Under Management

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Market Value [2] Market Value [2] Market Value [2] Market Value [2]
GLA Dec 2016 June 2016 Dec 2016 June 2016
Shopping centres Managed on behalf of sqm/000s [1] S$b S$b A$b A$b
Jem, Singapore ARIF/Lendlease Jem 108.2 1.9 1.9 1.8 1.9
Partners Fund Limited
Parkway Parade, Parkway Parade 52.5 1.2 1.2 1.2 1.2
Singapore Partnership Limited
313@somerset, Singapore ARIF/Lendlease 27.1 1.0 1.0 1.0 1.0
Setia City Mall, Malaysia ARIF/Lendlease 124.8 0.2 0.3 0.2 0.3
Total 312.6 4.3 4.4 4.2 4.4
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Represents the net lettable area of the centres.
Represents the Group’s assessment of the market value. The exchange rate applied as at December 2016 is A$1=S$1.04 (June 2015: A$1 = S$1).

HALF YEAR CONSOLIDATED FINANCIAL REPORT DECEMBER 2016 | LENDLEASE

Europe

Development

Project Listing

		Estimated	Estimated
Ownership	Estimated	Backlog	Commercial
Interest	Completion	Built-Form	Backlog
Project Sector Location % Zoned Projects Elephant & Castle Urbanisation London, UK 100% Deptford Urbanisation London, UK 100% International Quarter London Urbanisation London, UK 50% Chiswick Urbanisation London, UK 100% Wandsworth Urbanisation London, UK 100% UK residential projects Urbanisation Various Various John Bright Street Communities Birmingham, UK 100%	Date1 Various Various Various 2019 Various Various 2017	Units2 2,410 1,130 220 135 110 1,100	sqm/000s3 18 7 273 2 4 1
Total Development		5,105	305

Estimated completion date for built-form units represents the � nancial year in which the project construction is expected to be completed.
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.
Represents net developable land in relation to master-planned urban communities and net developable � oor space for other developments. The actual land area and � oor space for any particular project can vary as planning approvals are obtained.

HALF YEAR CONSOLIDATED FINANCIAL REPORT DECEMBER 2016 | LENDLEASE

continued Portfolio Report

Europe continued

Construction

Major Projects[1,2]

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Construction Construction
Contract Value [4] Value [4] Secured Completion
Project Location Client Type [3] £m A$m Date [5] Date [6] Sector
Elephant & Castle – West London Lendlease LS 213 362 2016 2019 Residential
Grove Residential (CG)
Plc
Rathbone Square London Great Portland LS 210 356 2015 2017 Commercial &
Estates plc Residential
International Quarter London Stratford City LS 202 343 2015 2018 Commercial
London – Building 1 Business District
Limited
North Wales Prison Wales Ministry of LS 167 282 2014 2018 Other
Justice
International Quarter London Stratford City LS 120 204 2015 2018 Commercial
London – Building 2 Business District
Limited
Elephant & Castle – South London Lendlease LS 119 202 2015 2018 Residential
Gardens Residential (CG)
Plc
International Quarter London SCBD Residential LS 89 152 2014 2017 Residential
London – Glasshouse Limited
Gardens
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Disclosure of major projects is subject to client approval. This could impact the projects available for disclosure.
Backlog revenue as at 31 December 2016 for the projects listed totals £425 million, representing 67% of the total Construction backlog revenue for the region.
Contract type is Lump Sum (LS).
Construction value represents the Group’s share of the total construction value of the project.
Secured date represents the � nancial year in which the project was secured.
Completion date represents the � nancial year in which the project is expected to be completed.

HALF YEAR CONSOLIDATED FINANCIAL REPORT DECEMBER 2016 | LENDLEASE

Investments

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Co-Investments
Lend Lease Market Value [1] Market Value [1] Market Value [1] Market Value [1]
Interest Dec 2016 June 2016 Dec 2016 June 2016
% £m £m A$m A$m
Lendlease Retail LP 4 35.7 36.8 61.5 65.7
Total 35.7 36.8 61.5 65.7
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1 Represents the Group’s assessment of the market value. The exchange rate applied as at December 2016 is A$1 = £0.58 (June 2016: A$1 = £0.56).

Funds Under Management
Fund	Fund type Asset class	Market Value1 Dec 2016 £b Market Value1 June 2016 £b Market Value1 Dec 2016 A$b	Market Value1 June 2016 A$b
Lendlease Retail LP	Core Retail	0.8 0.9 1.4	1.5
Total FUM		0.8 0.9 1.4	1.5

Represents the Group’s assessment of the market value. The exchange rate applied as at December 2016 is A$1 = £0.58 (June 2016: A$1 = £0.56).

Assets Under Management

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Market Value [1] Market Value [1] Market Value [1] Market Value [1]
Managed on GLA [ 2] Dec 2016 June 2016 Dec 2016 June 2016
Shopping centres behalf of sqm/000s £m £m A$m A$m
LendLease
Touchwood, Solihull Retail LP 60.4 286.4 299.4 493.8 534.6
IREEF
Queensgate
Queensgate, Peterborough Peterborough 81.3 230.0 230.0 396.6 410.7
Total 141.7 516.4 529.4 890.4 945.3
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Represents the Group’s assessment of the market value. The exchange rate applied as at December 2016 is A$1 = £0.58 (June 2016: A$1 = £0.56).
GLA represents the gross lettable area of the centres.

HALF YEAR CONSOLIDATED FINANCIAL REPORT DECEMBER 2016 | LENDLEASE

continued Portfolio Report

Americas

Development

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Estimated Estimated Estimated
Ownership Estimated Backlog Backlog Commercial
Interest Completion Land Built-Form Backlog
Project Sector Location % Date [1] Units [2] Units [2] sqm/000s [3]
Zoned Projects
Horizon Uptown Communities Colorado 100% 2033 3,860 371
281 Fifth Avenue Urbanisation New York 40% 2019 130 1
Clippership Wharf Urbanisation Massachusetts 100% 2021 480 1
Riverline Urbanisation Illinois 60% 2025 3,750 1
Nebraska Medical Center Urbanisation Nebraska 100% 2018 3
Integrated Services Center
Total Zoned 3,860 4,360 377
Unzoned Projects
845 Madison Urbanisation Chicago 70% 2021 580
Total Unzoned 580
Total Development 3,860 4,940 377
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Estimated completion date represents the estimated � nancial year in which the last unit will be settled for master-planned communities and the � nancial year in which construction will be completed for apartments and healthcare projects.
The actual number of units for any particular project can vary as planning applications are obtained.
Represents expected rentable square metres. The actual � oor space for any particular project can vary as planning approvals are obtained.

Construction

Major Projects[1,2]

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Constr- Constr-
uction uction
Contract Value [4] Value [4] Secured Completion
Project Location Client Type [3] US$m A$m Date [5] Date [6] Sector
432 Park Avenue New York CIM Group GMP 718 957 2012 2017 Mixed-use
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Project Location Client Contract Type3 Constr- uction Value4 US$m Constr- uction Value4 A$m Secured Date5 Completion Date6 Sector	Project Location Client Contract Type3 Constr- uction Value4 US$m Constr- uction Value4 A$m Secured Date5 Completion Date6 Sector
432 Park Avenue New York CIM Group GMP 718 957 2012 2017 Mixed-use

56 Leonard Avenue New York 56 Leonard LLC GMP 379 505 2012 2017	Residential
252 East 57th Street New York World Wide Holdings GMP 355 474 2014 2017	Mixed-use
520 Park Avenue New York Zeckendorf Development LLC GMP 299 398 2014 2018	Residential
9 W Walton Chicago 9 West Walton Condominium Developer LLC GMP 146 195 2015 2018	Residential
Clippership Wharf Boston Lendlease Development GMP 99 133 2016 2020	Residential

Disclosure of major projects is subject to client approval. This could impact the projects available for disclosure.
Backlog revenue as at 31 December 2016 for the projects listed totals US$434 million, representing 8% of the total Construction backlog revenue for the region.
Contract type is Guaranteed Maximum Price (GMP).
Construction value represents the Group’s share of the total construction value of the project.
Secured date represents the � nancial year in which the project was secured.
Completion date represents the � nancial year in which the project is expected to be completed.

HALF YEAR CONSOLIDATED FINANCIAL REPORT DECEMBER 2016 | LENDLEASE

continued Portfolio Report

Americas continued

Investments

Infrastructure Investment

Project1 Location Service Status Original Financial Close Date Operat- ional Term Years Invested Equity2 US$m Invested Equity2 A$m	Project1 Location Service Status Original Financial Close Date Operat- ional Term Years Invested Equity2 US$m Invested Equity2 A$m	Units Under Management4
Air Combat Command Group II Arizona/ New Mexico Air Force Operational Jul 07 50	11.0 14.9	2,200
Camp Lejeune Phases 1, 2 and 3 North Carolina/ New York Marine Corps Operational Oct 05 50	14.5 19.6	6,470
Tri-Command South Carolina Marine Corps Operational Feb 03 50	3.3 4.5	1,500
Fort Campbell Kentucky Army Operational Dec 03 50	6.0 8.1	4,450
Fort Drum New York Army Operational May 05 50	5.0 6.8	4,025
Fort Hood Texas Army Operational Oct 01 50	6.0 8.1	5,900
Fort Knox Phase 1 and 23 Kentucky Army Operational Feb 07 50		2,385
Hickam Hawaii Air Force Operational Feb 05 50	17.3 23.3	2,500
Island Palm Communities Hawaii Army Operational Apr 05 50	8.0 10.8	7,750
PAL Groups A, B and C Various Army Operational Aug 09 50		12,500
Tri-Group Colorado/ California Air Force Operational Sep 07 50	10.4 15.6	1,525
Wainwright/Greely Phase 1 and 23 Alaska Army Operational Apr 09 50		1,900
Total	81.5 111.7	53,105

The number of projects for December 2016 total 17. A number of the projects were combined to re � ect the investment, such as Camp Lejeune Phases 1 and 2 and

Camp Lejeune Phase 3, Fort Hood and Fort Hood Stage 3 (Cha � ee Village 1), Fort Knox Phase 1 and Fort Knox Phase 2 (Additional Scoring), PAL Groups A and B and PAL Groups C and Wainwright/Greely Phase 1 and Wainwright/Greely Phase 2.

Invested equity refers to the contributed equity for each project.
Committed equity as at 31 December 2016 totals US$5m/A$7m comprising of Fort Knox Phase 1 and 2 (US$3m/A$4.2m) and Wainwright / Greely Phase 1 and 2 (US$2m / A$2.8m).
Units under management are the expected number of units at the end of the initial project development period.

AI assistant

LENDLEASE GROUP — Interim / Quarterly Report 2017

65243_rns_2017-02-26_91acee84-2e38-402c-914e-3b7e8243283d.pdf

Appendix 4D, Half Year Consolidated Financial Report and Portfolio Report

ENDS

Lendlease Group

Appendix 4D

Results for Announcement to the Market

Profit After Tax

Stapling of the Company Shares and LLT Units

Dividends/Distributions

Additional Information

Table of Contents

Directors’ Report

1. Board/Directors

2. Dividends/Distributions

3. Events Subsequent to Balance Date

4. Lead Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001

5. Rounding Off

6. Performance & Outlook

Group Highlights

Performance Update

Key Financials

EBITDA Mix

Group Outlook

Portfolio Management Framework

Outlook

Portfolio Management Framework

Development Performance

Performance

Segment Snapshot

Invested Capital[2] ($b)

Invested Capital[2] by Product ($b)

EBITDA by Region ($m)

Return on Invested Capital[3]

Settlement Profile (Units)

Development Outlook

Outlook

Segment Overview

Pipeline by Product ($b)

Residential Presales[1 ] by Region ($b)

Pipeline by Region ($b)

Movement in Residential Presales ($b)

Commercial Building Completion Profile

Development Pipeline

Urbanisation Pipeline Profile

Apartments

Commercial

Urbanisation Pipeline by Region ($b)

Urbanisation Pipeline by Product ($b)

Construction Performance

Performance

Segment Snapshot

Revenue by Product ($b)

New Work Secured by Product ($b)

EBITDA by Region ($m)

EBITDA Margin

New Work Secured by Region ($b)

Construction Outlook

Outlook

Segment Overview

Backlog by Product ($b)

Backlog by Region ($b)

Backlog[1] by Sector

Backlog[1] by Client

Investments Performance

Performance

Segment Snapshot

EBITDA by Region ($m)

Invested Capital[2] ($b)

Investments EBITDA by Activity ($m)

Growth in Funds Under Management ($b)

Investments Outlook

Outlook

Funds Under Management by Asset Class ($b)

Investments[1] by Product ($b)

Segment Overview

Funds Under Management by Region ($b)

Investments[1] by Region ($b)

Financial Position and Cash Flow Movements

LENDLEASE GROUP Interim / Quarterly Report 2017