Lendlease Annual Report 2024

116 Lendlease Annual Report 2024 Notes to Consolidated Financial Statements continued June 2024 June 2023 $m $m Loss before income tax includes the following expense items: Total Employee Benefit Expense 1,781 1,963 Less: Recoveries through projects (1,494) (1,570) Net employee overhead 287 393 Lease expense (including outgoings) 26 27 IT expense 125 82 Other 99 99 Net overheads 537 601 Americas Telecommunications provision 1 58 74 Loans and receivables impairments 22 20 Property inventories impairments 16 - Equity accounted investments impairments - 2 Net (gain)/loss on fair value measurement of investment properties and other financial assets (4) - Net loss on sale of investment property 5 - Net defined benefit plan expense 2 (47) (9) Net foreign exchange loss 12 6 Total other expenses per Note 1a 'Segment Reporting' 3 599 694 Depreciation on right-of-use assets 47 51 Depreciation on owned assets 28 26 Amortisation 47 66 Total depreciation and amortisation 122 143 Costs relating to the strategy update 4 Development impairments 5 547 - Goodwill impairments 6 513 - Redundancy, tenancy and other break costs 91 - Other strategy update costs 7 91 - Total costs relating to the strategy update per Note 1a 'Segment Reporting' 1,242 - Other items Other restructuring costs 8 117 - UK building remediation 9 17 295 Net loss/(gain) on fair value measurement of investment properties and other financial assets 158 76 Total other expense non-operating items included in Note 1a 'Segment Reporting' 292 371 Total Other Expenses 2,255 1,208 1. Represents provisions raised on future consideration receivable on the sale of the Americas Telecommunication business. The recoverability of the receivable is contingent on the disposed business meeting certain revenue targets post sale, the measurement date for this is 31 December 2024. Based on current performance these targets are no longer expected to be met by the measurement date and the balance has been provided in full. 2. Includes the impact of a Lendlease UK Pension Scheme amendment during the year, approved by the Trustees, to bring the valuation of members' future benefits in line with the scheme rules and statutory requirements, resulting in a gain of $42 million recognised in the income statement. Refer to Note 34 'Defined Benefit Plan' for further detail. 3. Prior year excludes $76 million of Other expenses recognised as discontinued operations. 4. On 27 May 2024 the Group announced a strategy update with key actions to simplify the organisational structure, exit international construction and accelerate the release of offshore development capital. Financial impacts include impairment charges on Goodwill and Development projects and other related costs to accelerate the release of capital. 5. Relates to the impairment of development assets attributable to the Americas and Europe regions as a result of the strategy update. Includes impairment of inventory and receivables from joint ventures. Refer to Note 11 'Inventories' and Note 21 'Loans and Receivables' for further detail. 6. Relates to the impairment of Construction and Development goodwill attributable to the Americas ($247 million), Asia ($6 million) and Europe ($260 million) regions as a result of the strategy update announced on 27 May 2024. Refer to Note 32 'Intangible Assets' for further detail. 7. Includes the impact to the Digital products as a result of this strategy update, wherein the recoverable amount of the Digital assets was reassessed and an impairment charge $16 million was recognised in Corporate Activities. At 30 June 2024, the carrying value of the remaining Digital assets was $55 million (30 June 2023: $53 million). Refer to Note 32 'Intangible Assets' for further detail. 8. Represents expenses in relation to other cost initiatives undertaken during the current period, primarily consisting of redundancy costs. 9. Expense recorded during the period in relation to UK building remediation. Refer to Note 23 ‘Provisions’ for further detail. Section A. Performance continued 7. Other Expenses continued