I am pleased to report that Lend Lease has again performed reasonably well in an extremely difficult property market. Even more pleasing is the strong financial position the Company enjoys as we deal with tough market and economic conditions around the globe.

That financial strength – substantial cash on hand coupled with good operating cash flows and low debt – means that despite our setback in writing down Crosby Lend Lease inventory in the UK, we can stay our strategic course rather than selling assets at less than optimum value and exiting businesses to reduce excessive debt or prop up earnings.

Lend Lease continues to focus on areas where we have strong market positions and competitive advantage. Our diverse development pipeline and $9.3 billion in assets under management give the Company flexibility in its business planning. Like most companies, we have lowered short term earnings expectations, but the financial and strategic underpinnings for long term shareholder value remain intact.

For financial year 2008, the key standouts were strong contributions from Bovis Lend Lease, especially in Australia and the Asia Pacific region, and from Actus Lend Lease in the United States with a backlog gross profit margin of $447.5 million.

We finalised an interim development management agreement with the United Kingdom’s Olympic Delivery Authority for the 2012 Athletes Village. Elsewhere in the UK, construction started at Greenwich Peninsula and Lend Lease was selected as preferred development partner for the massive Elephant & Castle residential redevelopment in south-east London.

The Investment Management business saw continued strong performance of funds, including capital recycling of co-investments. New equity of $700 million was raised and there is significant committed funds under management growth over the next three years from the development pipeline within the funds.

During the year, we reduced the carrying value of the UK Communities operations, principally Crosby Lend Lease, reflecting the currently weak UK residential market.

International accounting rules also required a reduction in the value of certain retail property investments. Importantly, these writedowns are non-cash and do not affect underlying cash flow or net operating profit. We continue to invest in the UK retail development pipeline based on long term fundamentals of that market. Our overall retail development pipeline stands at $4.8 billion. The Australian Communities operations continued to generate increased sales despite weaker market conditions.

Beyond financial prudence and strategic discipline, equally fundamental to the way we do business is our aim for sustainability in all we do. The global measurement program continues and we can report good progress this year. At the same time, we continue our focus on our vision to be Incident & Injury Free. There were six fatalities across Lend Lease projects this year, down from nine in 2007. No fatality is ever acceptable.

Finally, this is likely to be my last report to shareholders. Now in my sixth year of a seven year commitment that I gave the Board when I was appointed CEO, it is time to select the CEO to lead Lend Lease through its next phase of development. The search process is well under way and the Board will announce the appointment of my successor in due course. I will continue with my duties until then to ensure a smooth transition.

It has been an honour to serve Lend Lease. I wish to record my sincere appreciation for the support and wise counsel Directors have afforded me as we have repositioned Lend Lease and strengthened its foundations for a long and successful future. I am also very grateful for the untiring support and valuable insights that I have been given by my senior executive colleagues and so many Lend Lease team members around the world.

I believe that my successor will take charge of one of the best property businesses to be found in the world today and that Lend Lease is extremely well positioned for the property market recovery when it eventuates.

Greg Clarke