December 2017 Operating Report

Monthly Operating Report
December 2017

»For the month of December 2017 Contact recorded:
•Electricity and gas sales of 571 GWh (December
2016: 582 GWh)
•Netback of $79.23/MWh (December 2016:
$77.40/MWh)
•Cost of energy was $22.56/MWh (December 2016:
$17.11/MWh)
»Otahuhu futures settlement wholesale price for the 1
st
quarter of 2018 (ASX):
•As at 29 January 2018: $111/MWh
•As at 31 December 2017: $104/MWh
•As at 30 November 2017: $90/MWh
»As at 29 January 2018, South Island controlled storage
was 73% of mean (31 December 2017: 80%) and North
Island storage was 124% of mean (31 December 2017:
98%)
•As at 29 January, total Clutha scheme storage
(including uncontrolled storage) was 41% of mean
•Inflows into Contact’s Clutha catchment for
December 2017 were at 50% of mean (November
2017: 69%, October 2017: 51%)
December overview
Operating reportContact Energy Limited
2
»On 21 December 2017, Contact announced that it had
entered into an agreement to sell the AhuroaGas Storage
facility and associated assets to Gas Services New
Zealand, an associate of First Gas Limited, for a cash
consideration of NZ$200 million. As part of the
transaction, Contact will retain access to competitive long
term gas storage services compatible with its
requirements for flexible thermal generation.
»Further information and a replay of the investor call can
be found at https://contact.co.nz/aboutus/investor-centre/

Hydro storage and forward prices
New Zealand controlled hydro storage against mean
Operating reportContact Energy Limited
Benmore ASX futures settlement
Otahuhu ASX futures settlement
3
-
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
Jan
17
Feb
17
Mar
17
Apr
17
May
17
Jun
17
Jul
17
Aug
17
Sep
17
Oct
17
Nov
17
Dec
17
GWh
South Island ActualNorth Island Actual
South Island MeanNational Mean
0
20
40
60
80
100
CY18CY19CY20CY21
$/MWh
30/06/201730/11/201729/12/2017
0
20
40
60
80
100
CY18CY19CY20CY21
$/MWh
30/06/201730/11/201729/12/2017

Wholesale market
Wholesale electricity pricing
Operating reportContact Energy Limited
Distribution of wholesale market price by trading periods
Benmore node
Otahuhu node
4
0
20
40
60
80
100
120
140
JulAugSepOctNovDecJanFebMarAprMayJun
$/MWh
FY17 BENFY18 BENFY17 OTAFY18 OTA
0%
20%
40%
60%
80%
100%
<$35$36-$45$46-$55$56-$65$66-$75$76-$85>$85
% of trading periods
Dec 17Dec 16Nov 17
0%
20%
40%
60%
80%
100%
<$35$36-$45$46-$55$56-$65$66-$75$76-$85>$85
% of trading periods
Dec 17Dec 16Nov 17

Electricity demand
Source: Contact and Electricity Authority grid demand (reconciled) http://www.emi.ea.govt.nz
Operating reportContact Energy Limited
Regional demand change (%) on December 2016
Total national demand (FY16, 17 and 18)
»New Zealand electricity demand was up 5.1% on December 2016 (up 2.5%
on December 2015).
»Cumulative 12 months demand for January 2017 to December 2017 of
41,265 GWh is 1.3% higher than the prior comparative period.
5
Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
(3%)
6%
4%
(3%)
6%
28%
(1%)
(4%)
(4%)
2%
2%
0%
0%
Year
7%
6%
10%
(2%)
2%
-
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
151617151617151617151617151617151617161716171617161716171617
GWh
North IslandSouth IslandNZAS

10
15
20
25
30
35
40
45
50
55
60
-
100
200
300
400
500
600
700
800
900
16 17 16 17 16 17 16 17 16 17 16 17 17 17 17 17 17 17
$/MWh
GWh
GeothermalHydroThermalCost of Energy
Contact’s Generation business performance
Generation mix and cost of energy (FY17 and 18)
Operating reportContact Energy Limited
6
Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
Year

60
65
70
75
80
85
90
95
100
105
110
0
100
200
300
400
500
600
700
800
900
16 17 16 17 16 17 16 17 16 17 16 17 17 17 17 17 17 17
$/MWh
GWh
Commercial & industrial electricity salesMass market electricity sales
Retail gas salesNetback
Retail sales volumes and netback (FY17 and 18)
Contact’s Customer business performance
7
Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
Year
Operating reportContact Energy Limited

Operating statistics have been restated to include
the changes to accounting standards
8
Operating reportContact Energy Limited
Measure
Jul-16Aug-16Sep-16Oct-16Nov-16Dec-16Jan-17Feb-17Mar-17Apr-17May-17Jun-17Jul-17Aug-17Sep-17Oct-17Nov-17Dec-17
Mass market electricity salesGWh396 393 330 301 261 260 254 233 265 289 338 382 409 365 332 292 263 246
Commercial & industrial electricity
sales
GWh304 317 302 301 299 282 280 288 319 287 302 281 280 293 280 284 286 281
Retail gas salesGWh81 72 77 72 50 39 37 29 38 47 71 70 100 87 85 79 57 43
Total electricity and gas salesGWh781 783 709 673 611 582 572 551 621 623 711 734 790 746 697 655 605 571
Average electricity sales price$/MWh198.12 195.16 184.89 180.76 171.37 179.89 180.48 179.93 182.89 185.48 192.93 201.57 198.38 194.61 191.54 183.92 178.57 181.45
Electricity direct pass thru costs$/MWh(81.49)(80.55)(81.29)(81.99)(80.71)(82.80)(82.10)(81.50)(76.85)(81.55)(79.81)(83.89)(82.94)(82.23)(90.01)(83.03)(81.00)(86.27)
Electricity and gas cost to serve$/MWh(12.04)(13.01)(13.71)(13.14)(14.53)(15.97)(13.96)(13.91)(13.96)(14.50)(13.36)(13.77)(11.17)(10.73)(12.01)(12.64)(14.21)(12.07)
Netback$/MWh96.72 94.68 83.30 79.74 72.29 77.40 81.33 82.07 88.94 85.05 92.49 97.46 94.80 92.57 81.96 81.68 77.97 79.23
Actual electricity line losses%7%4%5%5%6%6%6%6%6%2%8%5%7%6%6%6%8%5%
Retail gas salesPJ0.3 0.3 0.2 0.2 0.2 0.1 0.1 0.1 0.1 0.2 0.2 0.3 0.3 0.3 0.3 0.2 0.2 0.1
LPG sales tonnes7,433 7,334 6,477 5,623 5,882 5,363 4,676 4,535 5,293 5,339 7,124 7,622 7,749 7,371 6,558 6,064 5,508 5,128
Electricity customer numbers #
425,500 423,500 423,000 423,000 422,500 421,000 420,500 421,000 421,500 422,000 422,500 423,000 423,500 423,500 423,000 422,500 421,000 420,000
Gas customer numbers #
62,000 62,000 62,500 62,500 62,500 62,500 62,500 62,500 63,000 63,000 63,500 64,000 64,000 64,500 64,500 64,500 64,500 64,500
LPG customer numbers (includes
franchises)
#
76,000 75,500 76,000 75,500 76,000 76,500 77,000 77,000 77,500 78,000 78,500 80,000 80,500 81,500 82,000 82,500 83,500 84,000
Thermal generationGWh148 171 148 128 54 37 39 50 197 120 320 332 365 215 41 29 114 203
Geothermal generationGWh293 294 257 205 208 295 282 253 290 287 287 282 300 300 290 292 279 265
Hydro generationGWh395 319 260 343 369 388 355 314 255 206 195 163 185 270 325 305 293 258
Spot market generationGWh835 783 664 676 632 720 676 617 741 614 802 777 850 785 655 625 687 726
Spot electricity purchasesGWh749 740 664 633 594 574 572 554 620 590 694 699 739 698 647 611 595 556
CfD salesGWh44 21 (45)32 20 89 132 97 141 41 99 44 33 16 (55)19 38 98
Steam salesGWh34 69 66 65 60 55 55 51 58 50 29 10 26 58 67 64 61 54
Commercial & industrial electricity
sales
4 9 10 10 9 9 10 8 9 7 4 1 3 8 9 10 10 10
GWAP $/MWh54 51 50 45 42 38 43 44 49 44 65 110 138 82 53 53 93 119
LWAP $/MWh(63)(56)(54)(50)(47)(44)(51)(53)(53)(47)(70)(121)(152)(87)(59)(59)(102)(130)
LWAP/GWAP%115%109%107%110%114%118%118%119%108%107%108%110%110%106%112%111%109%109%
Gas used in internal generationPJ1.4 1.7 1.5 1.3 0.7 0.6 0.6 0.6 1.7 1.2 2.7 2.8 3.1 2.0 0.6 0.5 1.3 2.0
Gas storage net movementPJ(0.2)(0.5)(0.5)(0.1)0.3 0.3 0.1 0.2 (0.6)(0.3)(1.1)(0.6)(1.0)(0.2)0.5 0.6 (0.0)(0.7)
Unit generation cost $/MWh(28.28)(33.53)(35.66)(33.57)(32.09)(26.04)(24.59)(28.41)(33.34)(35.06)(38.82)(43.46)(42.01)(36.53)(28.16)(29.13)(31.51)(35.64)
Cost of Energy $/MWh(22.60)(27.45)(28.56)(26.64)(26.97)(17.11)(18.67)(23.05)(24.77)(28.36)(34.48)(47.39)(45.44)(32.41)(27.48)(30.44)(19.90)(22.56)
»Contact has elected to early adopt NZ IFRS 15 Revenue from Contracts with Customers (‘revenue standard’) and NZ IFRS 16
Leases (‘leases standard’) for the year ending 30 June 2018. Both standards have been adopted retrospectively. This has resulted
in the restatement of and/or reclassification of comparatives to conform with the current period’s classification.

Restated 6 months ended 31 Dec 2016Restated year ended 30 June 2017
$mGenerationCustomerEliminationTotalGenerationCustomerEliminationTotal
Mass market electricity-465 -465 -892 (1)891
Commercial & Industrial electricity4 231 -235 8 465 -473
Wholesale electricity222 --222 492 --492
Inter-segment electricity sales301 -(301)-596 -(596)-
Gas-36 -36 0 66 -66
LPG-62 -62 -119 -119
Steam14 --14 25 --25
Total revenue541 794 (301)1,034 1,121 1,542 (597)2,066
Other income-3 -3 6 7 -13
Total revenue and other income541 797 (301)1,037 1,127 1,549 (597)2,079
Electricity purchases(206)--(206)(460)--(460)
Inter-segment electricity purchases-(301)301 --(596)596 -
Gas purchases(44)(8)-(52)(100)(15)-(115)
LPG purchases-(33)-(33)-(67)-(67)
Electricity networks, transmission, levies & meter costs(24)(305)-(329)(48)(590)-(638)
Gas networks, transmission, levies & meter costs(4)(19)-(23)(8)(36)-(44)
Other operating expenses(61)(64)-(125)(119)(125)1 (243)
Carbon emissions(4)(1)-(5)(9)(2)-(11)
Total operating expenses(343)(731)301 (773)(744)(1,431)597 (1,578)
EBITDAF198 66 -264 383 118 -501
Depreciation and amortisation(101)(208)
Net interest expense(48)(93)
Tax on underlying profit(33)(58)
Underlying profit82 142
Significant items
Change in fair value of financial instruments30 23
Transition costs(7)(7)
Remediation for Holidays Act non-compliance(5)(5)
Otahuhu thermal power station closure and sale1 -
Tax on significant items(5)(2)
Profit96 151
Underlying profit per share (cents)11.5 19.9
9
Operating reportContact Energy Limited
The segment note has been restated to include
the changes to accounting standards

Contact’s operational performance
10
Operating reportContact Energy Limited
Measure
The month ended The month ended The month ended Six months endedSix months ended
December 2017December 2016November 2017December 2017December 2016
CustomerMass market electricity salesGWh246 260 263 1,907 1,942
Commercial & industrial electricity salesGWh281 282 286 1,704 1,806
Retail gas salesGWh43 39 57 452 392
Total electricity and gas salesGWh571 582 605 4,063 4,139
Average electricity sales price$/MWh181.45 179.89 178.57 188.75 185.90
Electricity direct pass thru costs$/MWh(86.27)(82.80)(81.00)(84.21)(81.43)
Electricity and gas cost to serve$/MWh(12.07)(15.97)(14.21)(12.05)(13.61)
Netback$/MWh79.23 77.40 77.97 85.38 84.95
Actual electricity line losses%5%6%8%6%5%
Retail gas salesPJ0.1 0.1 0.2 1.4 1.3
LPG sales tonnes5,128 5,363 5,508 38,378 38,112
Electricity customer numbers #420,000 421,000 421,000
Gas customer numbers #64,500 62,500 64,500
LPG customer numbers (includes franchises)#84,000 76,500 83,500
GenerationThermal generationGWh203 37 114 966 685
Geothermal generationGWh265 295 279 1,726 1,552
Hydro generationGWh258 388 293 1,635 2,073
Spot market generationGWh726 720 687 4,327 4,310
Spot electricity purchasesGWh556 574 595 3,846 3,955
CfD salesGWh98 89 38 149 161
Steam salesGWh54 55 61 330 349
Commercial & industrial electricity sales10 9 10 50 52
GWAP $/MWh119 38 93 92 47
LWAP $/MWh(130)(44)(102)(99)(53)
LWAP/GWAP%109%118%109%107%112%
Gas used in internal generationPJ2.0 0.6 1.3 9.5 7.4
Gas storage net movementPJ(0.7)0.3 (0.0)3.4 3.9
Unit generation cost $/MWh(35.64)(26.04)(31.51)(34.31)(31.39)
Cost of Energy $/MWh(22.56)(17.11)(19.90)(30.53)(25.07)

Glossary of terms
Netback
Measures the performance of
the Customer business.
This enables the performance of
the retail channels to be
measured without using an
energy cost. The netback is
meant to cover, inter alia, the net
purchase cost, capital return,
risk margin and a retail margin.
Electricity revenue from mass market and C&I customers
Add: Revenue from gas sales
Add: Revenue from steam sales and direct electricity sales from Te Rapa
Less: Electricity distribution network costs, meter costs and electricity levies
Less: Gas distribution network costs, meter costs and gas levies
Less: Operating costs to serve the customer, including head office allocation
Cost of Energy
Measures the performance of
the Generation business.
Cost of energy reflects the total
operational costs of generating
and procuring electricity sold to
customers. It does not include
any capital return expectations.
Wholesale electricity revenue from our generating assets
Less: Electricity purchase costs from the wholesale market to supply customers
Less: Electricity transmission costs and levies
Less: Gas and diesel purchase costs (excluding gas purchases for retail gas sales)
Less: Gas transmission costs and levies
Less: Carbon emissions costs
Less: Generation operating costs and head office allocation
Netback and cost of energy is divided by the total retail sales volumes (electricityand gas sales) to be expressed as $/MWh

Keep in touch
Operating reportContact Energy Limited
12
contact.co.nz
@ContactEnergy
Linkedin.com/company/contact-energy-ltd
Facebook.com/contactenergy
Youtube.com/ContactEnergy
investor.centre@contactenergy.co.nz
contact.co.nz/aboutus/investor-centre
+64 4 462 1323
+64 21 072 8578
Investor Relations
Matthew Forbes -Investor Relations Manager
Contact Energy