Spark New Zealand Updates to External Reporting Full Pack

Spark New Zealand Limited ARBN 050 611 277
Spark City, 167 Victoria Street West, Private Bag 92028, Auckland, New Zealand

MARKET RELEASE

16 February 2018
Updates to External Reporting
In advance of Spark New Zealand Limited’s (“Spark’s”) FY18 interim results announcement on
Wednesday 21 February 2018, Spark has today released restated historical detailed financials to
assist analysts in recalibrating their models.
Spark has made a number of improvements to the structure and detail of its externally reported
financials:
Segmental reporting
• Segmental reporting has been updated to align with recent changes in internal business unit
accountability
IT services revenues
• As indicated at our FY17 results announcement we have reclassified IT services revenues to
provide greater insight into the drivers of business performance
• An accompanying presentation has also been released to provide further insight into how to
model reclassified Spark Digital revenues
Broadband cost of sales
• As indicated at our FY17 results announcement all broadband related Unbundled Copper Local
Loop (UCLL) costs have now been reallocated to ‘broadband cost of sales’. This is to align the
classification of copper broadband inputs with the existing classification of fibre broadband
inputs
Voice connections
• To better align with the definition used for reporting of voice revenues, reported voice
connections now include all connection types (including ISDN, VOIP and wireless voice) rather
than just those provisioned on the legacy PSTN network

The comparative historical detailed financials have been adjusted to reflect these changes with no
impact on the Spark Group result.
Investors and analysts are also invited to attend a presentation to discuss updates to Spark New
Zealand Limited’s (“Spark’s”) external reporting. Attendees are able to attend the presentation in
person at Spark City, 167 Victoria Street West, Auckland or via teleconference.

Spark New Zealand Limited ARBN 050 611 277
Spark City, 167 Victoria Street West, Private Bag 92028, Auckland, New Zealand

To access the teleconference please pre-register by clicking here

DATE: Friday, 16 February 2018
TIME: 9.00 am (AEDT)
11.00 am (NZDT)
If you would like to join via teleconference, please use the following dial-in numbers:
AUDIO CONFERENCE ID: 9287669
Country Date Time Dial In
New Zealand 16/02/18 11.00am NZDT 0800 667 014
Australia 16/02/18 09.00am AEDT 1800 015 837
USA 15/02/18 5.00pm EST 1844 294 9606
Hong Kong 16/02/18 06.00am HKT 800 967 614
Singapore 16/02/18 06.00am SGT 800 616 2327
Japan 16/02/18 07.00am JST 012 043 2027
UK 15/02/18 10.00pm GMT 0808 234 4636

Please dial into the teleconference 10 minutes before the start of the presentation.

-ENDS-
For media queries, please contact:
Lucy Fullarton
Communications Partner +64 (0) 21 070 6197

For investor relations queries, please contact:
Dean Werder
GM Finance & Performance +64 (0) 27 259 7176

Updates to External Reporting
Investor & Analyst Briefing 16 February 2018

2
Updates to External Reporting (1/2)
Segmental reporting has been updated to align with recent changes in business unit accountability
Segmental Updates
DescriptionDetailsFromTo
Medium enterprisecustomers
Medium enterprise customers now serviced by HMB business hubs, to better align service
models
DigitalHMB
InterconnectionChange in allocation method for interconnect revenue and costsVentures and Wholesale
HMB and
Digital
PayphonesManagement of payphones and calling card business transferred to Connect and PlatformsHMBConnect and Platforms
Inbound Roaming
Inbound roaming revenue transferred to Wholesale to align with ownership of international
carrierrelationships
HMBVentures and Wholesale
Data centre costsTransfer of data centrecosts to centralisemanagement of all accommodation expensesDigitalConnect and Platforms
Service centre costsTransfer of service desk coststo align with management of associatedresourcesDigitalConnect and Platforms
Mobility IOT
Managementof mobile machine-to-machine products moved to Spark Ventures’ Internet of
Things unit
DigitalVentures and Wholesale

3
$667m
$736m
$667m
$736m
Other Disclosure Changes
IT services revenue
As indicated at our FY17 Results Announcement we have reclassified IT services revenues to provide greater insight into the drivers of business performance.Previously reported IT services revenues have now been
reclassified into the following categories:
•Procurement and partners
•Cloud, security and service management
•Voice
•Managed data and networks
•Other operating revenues
Previously reported FY17 IT services revenues are reconciled to the new categories below:
Broadband input costs
As indicated at our FY17 Results Announcement allbroadband related Unbundled Copper Local Loop (UCLL) costs have now been reallocated to ‘broadband cost of sales’. This is to align the classification of copper
broadband inputs with the existing classification of fibrebroadband inputs.
Voice connections
To better align with the definition used for reporting of voice revenues, reported voice connections now include all connection types (including ISDN, VOIP and wireless voice) rather than just those provisioned on the
legacy PSTN network.
Previous Categories ($m)
Traditional ITPlatform ITProcurementTotal
New Categories
($m)
Voice2925-54
Managed data and networks3211-43
Cloud, security and service management1241982324
Procurement and partners27-318345
Other operating revenue214117
Total214248321783
Updates to External Reporting (2/2)
Additional disclosure changes have also been made to provide greater insight into the performance of IT
services, broadband and voice

Modelling Spark Digital
Spark’s Enterprise and Government Business
Investor & Analyst Briefing 16 February 2018

5
Spark Digital Overview
Key Facts
•Focused on business segments, starting at businesses
with ~100 FTE, up to and including large Enterprise
and Government
•Operates in the telecommunications and digital services
markets; focused on meeting the needs of businesses
•Major competitors include Vodafone New Zealand,
Datacom, Dimension Data and Fujitsu
•Includes revenues from subsidiaries Revera and
Computer Concepts Limited (CCL)
Financial breakdown for Spark Digital (restated)

6
Voice
Revenue lineDescription
FY17
Revenue
FY17YoY
movement
FY18 to FY20 AspirationHow to model
Landline onlyAccess revenues for landline (including
POTS, VOIP & ISDN)
$60m(8%)Consistentrate of decline:
•Some variability driven by migration rates
as customers shift from legacy access to
cheaper VoIP options
Connections x ARPU
CallingCalling revenue for landlines (including
POTS, VOIP & ISDN)
$100m(2%)Greater rate of decline due to:
•FY17 included strong growth in 0800
calling which is expected to moderate
•Ongoing migration off landline
•Shift to unlimited calling plans
Year on year trends
Video-
conferencing
Video and audio conferencing,
including Skype for Businessand
contact centre solutions
$54m15%Moderatedrateof growth due to:
•Volume growth in Skype forBusiness and
video conferencing, partially offset by
•Price pressure and decline in contact
centre solutions
Year on year trends
Other voiceNot material$2m0%Not materialNot material
Total VoiceAs above$216m0%
Notes
•POTS: Plain Old Telephone Service, refers to the standard analogue copper based telephone service that most homes and businesses have historically used. Excludes VoIP and ISDN
•ISDN: Integrated Services Digital Network, refers to a digital service that allows simultaneous transmission of voice, data andvideo
•VoIP: Voice over IP

7
Broadband
Revenue lineDescription
FY17
Revenue
FY17YoY
movement
FY18 to FY20 AspirationHow to model
Total BroadbandFixed and wireless broadband,
includes business broadband as well
as managed corporate internet
$29m0%Marginal rate of decline due to:
•Customers migrating from legacy
managed internet products to cheaper
business broadband plans
Connections x ARPU

8
Managed Data and Networks
Revenue lineDescription
FY17
Revenue
FY17YoY
movement
FY18 to FY20 AspirationHow to model
Managed DataServices which allow customers to
connect to data centres and to connect
remote sites together.
Includes WAN, carrier ethernet, and
DTS
$120m(8%)Consistentrate of decline due to:
•Ongoing pricing pressure
•Increased migration off legacy products
and closure of ATM platform
•Opportunity to grow connections in mid
market
Year on year trends
NetworksProactive monitoring and managed
services for clients networks
$43m5%Higherrate of growth due to:
•Strong pipeline of opportunities across
Enterprise and Government segments
Year on year trends
Total Managed Data
and Networks
As above$163m(5%)Smaller rate of decline, as described aboveAs above
Notes
•WAN -Wide Area Networking: Provides customers with their own private, managed network to securely connect multiple locations in New Zealand or around the world
•Carrier ethernet: Provides a high speed, scalable private and secure WAN connection that caters to applications such as cloud-delivered video conferencing, IP telephony or data centre connections.
•DTS: Provides a reliable connection for transferring large amounts of data at very fast speeds, using a private optical path

9
Mobile
Revenue lineDescription
FY17
Revenue
FY17YoY
movement
FY18 to FY20 AspirationHow to model
Total MobileMobile usage revenues (including
voice, text and data usage) and
revenues from device sales
$171m3%Flatto decliningdue to:
•Strong pricing pressure impacting ARPU’s;
and
•Ongoing growth in connections; potentially
offset by
•Growth in device revenues including
reductionsinsubsidies
Connections x ARPU

10
Cloud, Security and Service Management
Revenue lineDescriptionFY17 Revenue
FY17YoY
movement
FY18 to FY20 AspirationHow to model
CloudIncludes services such as:
•Infrastructure as a Service (IaaS*),
•Desktop as a Service (DaaS)
•Platform as a Service (PaaS*)
•Public cloud (e.g. Amazon Web Services, Microsoft
Azure) resale
•Cloud related consulting and managed services.
•Data centre co-location revenue within Sparkincluding
Managed Infrastructure.
Includes all revenues from Reveraand CCL(excluding
procurement)
$316m27%Moderatedgrowth due to:
•Strong growth in a cloud market
with relatively low penetration;
•Higher growth in security; and
•Consistent growth in service
management; partially offset by
•Pricing pressure from global
providers
NB: FY17 was the first full year of
CCL revenues
Year on year
trends
SecurityCyber security services
Service ManagementManaged ICT services provided via service desks for
Spark products and third parties
Total Cloud, Security and
Service Management
As above$316m27%As aboveAs above
Notes
•IaaS: Provision of virtualised cloud based computing and data centre storage, where the hardware is provided by an external provider
•PaaS: Consistent with IaaS, however the operating system is also managed by an external provider

11
Procurement & Partners
Revenue lineDescription
FY17
Revenue
FY17YoY
movement
FY18 to FY20 AspirationHow to model
ProcurementProcurement of hardware and
software on behalf of customers
$340m16%Moderatedrate ofgrowth:
•Procurement revenues can be “lumpy”
according to deal flow, but low margin so
limited impact on EBITDA
•Continued growth from Partners as
demand for IT services grows in regional
areas
Year on year trends
PartnersPartner provided IT services, primarily
in the regions where Spark Digital
does not have a presence
Total Procurement and
Partners
As above$340m16%As aboveAs above

12
Disclaimer
This announcement may include forward-looking statements regarding future events and the future financial performance of Spark New Zealand. Such forward-
looking statements are based on the beliefs of and assumptions made by management along with information currently available at the time such statements
were made.
These forward-looking statements may be identified by words such as ‘guidance’, ‘anticipate’, ‘believe’, ‘estimate’, ‘expect’, ‘intend’, ‘will’, ‘plan’, ‘may’, ‘could’,
‘ambition’, ‘aspiration’ and similar expressions. Any statements in this announcement that are not historical facts are forward-looking statements. These forward-
looking statements are not guarantees or predictions of future performance, and involve known and unknown risks, uncertainties and other factors, many of
which are beyond Spark New Zealand’s control, and which may cause actual results to differ materially from those projected inthe forward-looking statements
contained in this announcement.
Factors that could cause actual results or performance to differ materially from those expressed or implied in the forward-looking statements are discussed
herein and also include Spark New Zealand's anticipated growth strategies, Spark New Zealand's future results of operations and financial condition, economic
conditions and the regulatory environment in New Zealand, competition in the markets in which Spark New Zealand operates, risks related to the sharing
arrangements with Chorus, other factors or trends affecting the telecommunications industry generally and Spark New Zealand’sfinancial condition in particular
and risks detailed in Spark New Zealand's filings with NZX and ASX. Except as required by law or the listing rules of the stock exchanges on which Spark New
Zealand is listed, Spark New Zealand undertakes no obligation to update any forward-looking statements whether as a result of new information, future events
or otherwise.

Spark New Zealand
Group result
H1 FY16H2 FY16H1 FY17H2 FY17
$m$m$m$m
Operating revenues and other gains1,7231,7741,7931,821
Operating expenses1,2661,2401,3201,274
Share of associates' and joint ventures' net losses(2)(3)(2)(2)
EBITDA455531471545
Depreciation and amortisation expense224222215215
Net finance expense13151313
Net earnings before income tax218294243317
Tax expense60826577
Net earnings for the period158212178240
EBITDA by business unit
H1 FY16H2 FY16H1 FY17H2 FY17
EBITDA$m$m$m$m
Spark Home, Mobile & Business417426411442
Spark Digital176201178206
Spark Connect & Platforms(192)(169)(179)(169)
Spark Ventures & Wholesale70756366
Corporate(16)(2)(2)-
455531471545
Connections
H1 FY16H2 FY16H1 FY17H2 FY17
000's000's000's000's
Mobile connections2,2122,2932,3532,392
Voice connections
1
744713670622
Broadband connections
Copper615564497431
Fibre5899138172
Wireless2124084
675675675687
Dividends
H1 FY16H2 FY16H1 FY17H2 FY17
Ordinary dividends (cents per share)11.0011.0011.0011.00
Special dividends (cents per share)1.501.501.501.50
12.5012.5012.5012.50
1
Voice connections now include all voice technology types, including ISDN and VOIP. Connections for prior periods
have been updated to ensure consistency.
Voice connections exclude connections where Spark also provide a bundled broadband service, but include all
wholesale voice connections (including those where the underlying customer has a bundled broadband service).

Spark New Zealand
Operating revenues and other gains by business unit
H1 FY16H2 FY16H1 FY17H2 FY17
Operating revenues and other gains$m$m$m$m
Spark Home, Mobile & Business1,0081,0251,0191,021
Spark Digital557575614623
Spark Connect & Platforms22232428
Spark Ventures & Wholesale131134120124
Corporate26413546
Eliminations(21)(24)(19)(21)
1,7231,7741,7931,821
Group operating revenues and other gains
H1 FY16H2 FY16H1 FY17H2 FY17
$m$m$m$m
Operating revenues
Mobile
Service revenue371379383398
Other mobile revenue192192205211
563571588609
Voice
Landline only169166155143
Calling153164142134
Videoconferencing24232727
Other voice revenue15141413
361367338317
Broadband339346344345
Cloud, security and service management117140154170
Procurement and partners152147176169
Managed data and networks118111105102
Other operating revenue73928889
Total operating revenues1,7231,7741,7931,801
Other gains---20
Total operating revenues and other gains1,7231,7741,7931,821
Wireless broadband revenues and connections are included in broadband revenues and connections.

Spark New Zealand
Revenue classification changes
Revenue typeServices providedPrevious categoryNew category
CloudIncludes IaaS, DaaS, PaaS, public cloud resale and
related consulting and managed services. Also
includes data centre co-location and managed
infrastructure.
IT services
SecurityCyber security services.IT services
Service managementIT managed services including service desk,
incident management, problem management,
change management, configuration management
and release management.
IT services
ProcurementProcurement of hardware and software on behalf
of customers.
IT services
PartnersPartner provided IT services, primarily in the
regions where Spark does not have a presence.
IT services
VideoconferencingVideo and audio conferencing, including Skype for
Business and contact centre solutions.
IT services
NetworksProactive monitoring and managed services for
customer networks.
IT services
MobilityMachine to machine revenue.IT services
H1 FY16H2 FY16H1 FY17H2 FY17
$m$m$m$m
Cloud, security and service management117140154170
Procurement and partners152147176169
Networks22192023
Videoconferencing24232727
Other operating revenue77710
Previous IT services revenue category322336384399
A reconciliation of the new revenue categories to an equivalent of the previously reported 'IT services' revenue
category is provided below:
Spark has revised some of the categories of operating revenues presented to provide greater insight into the drivers of
business performance. This has resulted in the disaggregation of the previously reported ‘IT services’ revenue category
as outlined below:
Other operating
revenue
Managed data and
networks
Procurement and
partners
Procurement and
partners
Cloud, security and
service
management
Cloud, security and
service
management
Cloud, security and
service
management
Voice

Spark New Zealand
Financial breakdown by business unit - Spark Home, Mobile & Business
H1 FY16H2 FY16H1 FY17H2 FY17
$m$m$m$m
Operating revenues
Mobile467471486506
Voice186189169152
Broadband324332330330
Cloud, security and service management4444
Procurement and partners3232
Managed data and networks3332
Other operating revenue21242425
1,0081,0251,0191,021
Operating expenses
Labour58607066
Other operating expenses519522524496
Internal expenses14171417
591599608579
EBITDA417426411442
EBITDA margin41.4%41.6%40.3%43.3%
Analysis & KPI's - Spark Home, Mobile & Business
H1 FY16H2 FY16H1 FY17H2 FY17
Voice revenue by type$m$m$m$m
Landline only89828172
Calling86977871
Other voice revenue1110109
186189169152
H1 FY16H2 FY16H1 FY17H2 FY17
Connections000's000's000's000's
Broadband connections659659659671
Voice only connections227218203201

Spark New Zealand
Financial breakdown by business unit - Spark Digital
H1 FY16H2 FY16H1 FY17H2 FY17
$m$m$m$m
Operating revenues
Mobile82848784
Voice107109108108
Broadband15141415
Cloud, security and service management113136150166
Procurement and partners149145173167
Managed data and networks88848182
Internal revenue3311
557575614623
Operating expenses
Labour9495110101
Other operating expenses283274322312
Internal expenses4544
381374436417
EBITDA176201178206
EBITDA margin31.6%35.0%29.0%33.1%
Analysis & KPI's - Spark Digital
H1 FY16H2 FY16H1 FY17H2 FY17
Voice revenue by type$m$m$m$m
Landline only32333030
Calling50525050
Videoconferencing24232727
Other voice revenue1111
107109108108
H1 FY16H2 FY16H1 FY17H2 FY17
Connections000's000's000's000's
Broadband connections16161616
Voice only connections135136132121

Spark New Zealand
Financial breakdown by business unit - Spark Connect & Platforms
H1 FY16H2 FY16H1 FY17H2 FY17
$m$m$m$m
Operating revenues
Mobile2334
Voice4333
Other operating revenue16171821
22232428
Operating expenses
Labour77707683
Other operating expenses136121127113
Internal expenses21--
215192203196
Share of associates' and joint ventures' net profits / (losses)1--(1)
EBITDA(192)(169)(179)(169)
Analysis & KPI's - Spark Connect & Platforms
H1 FY16H2 FY16H1 FY17H2 FY17
Voice revenue by type$m$m$m$m
Calling4333

Spark New Zealand
Financial breakdown by business unit - Spark Ventures & Wholesale
H1 FY16H2 FY16H1 FY17H2 FY17
$m$m$m$m
Operating revenues
Mobile12131215
Voice64665854
Managed data and networks27242118
Other operating revenue10101117
Internal revenue18211820
131134120124
Operating expenses
Labour7688
Other operating expenses50504850
Internal expenses11--
58575658
Share of associates' and joint ventures' net losses(3)(2)(1)-
EBITDA70756366
EBITDA margin53.4%56.0%53.0%53.0%
Analysis & KPI's - Spark Ventures & Wholesale
H1 FY16H2 FY16H1 FY17H2 FY17
Voice revenue by type$m$m$m$m
Landline only48514441
Calling13121110
Other voice revenue3333
64665854
H1 FY16H2 FY16H1 FY17H2 FY17
Connections000's000's000's000's
Voice connections
1
382359335300
Voice only connections89827670
Mobile connections
2
34353332
2
Mobile connections exclude MVNO connections
1
Includes all wholesale voice connections (including those where the underlying customer has a bundled broadband
service).

Spark New Zealand
Financial breakdown by business unit - Corporate
H1 FY16H2 FY16H1 FY17H2 FY17
$m$m$m$m
Operating revenues and other gains
Other operating revenue26413526
Other gains---20
26413546
Operating expenses
Labour16141414
Other operating expenses26282131
Internal expenses--1-
42423645
Share of associates' and joint ventures' net losses-(1)(1)(1)
EBITDA(16)(2)(2)-
Analysis & KPI's - Corporate
H1 FY16H2 FY16H1 FY17H2 FY17
$m$m$m$m
Southern cross dividends26403526

Spark New Zealand
Analysis & KPI's - Mobile (Spark Home, Mobile & Business and Spark Digital)
H1 FY16H2 FY16H1 FY17H2 FY17
Mobile revenue by type$m$m$m$m
Mobile service revenue365373376390
Other mobile revenue
1
184182197200
549555573590
H1 FY16H2 FY16H1 FY17H2 FY17
Average revenue per user (ARPU) - 6 month active
$ per
month
$ per
month
$ per
month
$ per
month
Total ARPU28.4427.8927.7127.68
Pay-monthly ARPU46.5545.9945.5945.88
Prepaid ARPU11.7211.8711.6511.75
H1 FY16H2 FY16H1 FY17H2 FY17
Number of mobile connections at period end - 6 month active000's000's000's000's
Pay-monthly connections1,0351,0561,0851,108
Prepaid connections1,1391,1981,2311,248
Internal connections4444
Total mobile connections2,1782,2582,3202,360
1
Other mobile revenue includes handset sales and mobile interconnect

Spark New Zealand
Group expenses
H1 FY16H2 FY16H1 FY17H2 FY17
$m$m$m$m
Payments to telecommunications operators
1
Baseband and access charges71787469
Other intercarrier costs43484749
Broadband cost of sales210226223214
Field services10877
334360351339
Mobile acquisition, procurement and IT services
Mobile cost of sales229219222214
IT services cost of sales184177215205
413396437419
Labour252245278272
Other operating expenses
Direct network costs38313129
Computer costs38364042
Accommodation costs47455049
Advertising, promotions and communication45324128
Bad debts111199
Impairment expense-92-
Other88758187
267239254244
Total operating expenses1,2661,2401,3201,274
Depreciation and amortisation expense
Depreciation126122122128
Amortisation981009387
224222215215
Net finance expense
Finance income(9)(9)(8)(8)
Finance expense22242121
13151313
Group FTE's
H1 FY16H2 FY16H1 FY17H2 FY17
FTE permanent5,0235,2415,6645,554
FTE contractors 301328279220
Total FTE5,3245,5695,9435,774
1
Broadband related Unbundled Copper Local Loop (UCLL) costs have been reclassified from 'baseband and access
charges' to ‘broadband cost of sales’ to align the classification of copper broadband inputs with the existing
classification of fibre broadband inputs. Total payments to telecommunications operators remains unchanged.

Spark New Zealand
Group capital expenditure
H1 FY16H2 FY16H1 FY17H2 FY17
$m$m$m$m
Cloud10242220
Converged Communications Network (CCN)-3312
International cable construction and capacity purchases 2171420
IT systems17426052
Re-engineering of IT systems4224--
Mobile network58196933
Plant, network and core sustain and resiliency53263631
Other15202023
Total capital expenditure excluding mobile spectrum216165224191
Mobile spectrum-9--
Total capital expenditure216174224191
Capital expenditure is presented on an accruals basis.