Meridian Energy Limited Interim Results

PG 1

Meridian delivers dividend growth despite dry conditions
21 February 2018
Meridian is pleased to declare a resilient interim dividend for the six months to 31 December 2017, up 1% on the
same period last year. This is despite low inflows in Meridian’s New Zealand hydro catchments, which saw a 16%
reduction in the amount of electricity the Company generated compared to the previous year and impacted
earnings. Meridian delivered EBITDAF
1
of $329 million for the six months to 31 December 2017, a 7% decrease on
the same period last year.
Meridian’s Chief Executive Neal Barclay said despite the persistently low South Island hydro inflows which have
characterised the New Zealand market over the past six months, it was pleasing to see the Company has also
achieved strong customer-led growth across our multiple segments and geographies.
“We have also secured three hydro stations in New South Wales and signed a further three power purchase
agreements to ensure that we can continue to support Powershop growth in Australia. We’re finding there is a
strong and growing desire from Australian electricity consumers to support a ‘green’ energy retailer”.
Meridian is also committed to continuing to support its customers here in New Zealand who are wanting to take
advantage of our country’s unique renewable energy profile.
“We’re pleased to announce the launch of Meridian’s nationwide electric car plan which gives our customers with
an electric car a 20% discount off their electricity bill. We’re encouraging our customers to embrace sustainable
technology so we’re also going to cover the cost of charging their electric car for a year”.
The interim ordinary dividend of 5.38 cents per share is imputed to 88% and will be paid on 17 April 2018. A further
special dividend payment of 2.44 cents per share under the Company’s Capital Management Programme will also
be paid to shareholders.
ENDS
Neal Barclay
Chief Executive
Meridian Energy Limited


1

Earnings before interest, tax, depreciation, amortisation, changes in fair value of hedges and other significant items.

PG 2
For investor relations queries, please contact:
Owen Hackston
Investor Relations Manager
021 246 4772
For media queries, please contact:
Polly Atkins
Senior External Communications Specialist
021 1741715

---

PG 1

PG 2

PG 3

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MERIDIAN
ENERGY
LIMITED
WE’RE
WORKING
TO BUILD
A BETTER
FUTURE
INTERIM REPORT
FOR THE SIX
MONTHS ENDED
31 DECEMBER 2017
As a 100% renewable energy generator,
and as a retailer, our business has always
walked hand in hand with the environment.
But building a sustainable future is much
more than that...
Our success depends on building a better
tomorrow, for our team, our customers,
communities, New Zealand and beyond.

Meridian’s core business activities are the generation, trading and retailing of electricity
and the sale of complementary products and services, in New Zealand and Australia.
The Meridian Energy Group is one of New Zealand’s largest
organisations, with $2,319 million in revenue and $653 million
of EBITDAF
1
in FY17. The company currently has a market
capitalisation of $7.2 billion and net assets of $4.9 billion.
We have a small workforce relative to our size, with more
than 970 people directly employed by or contracted to us,
and third parties providing us with ICT, facilities management
and meter reading services.
Meridian is a public company, listed on both the NZX and the ASX
(Australian Securities Exchange). The company is majority owned
by the New Zealand Government and is precluded by legislation
from having any other significant (more than 10%) shareholders.
About Meridian.
Generation
2
1 Earnings before interest, tax, depreciation,
amortisation, changes in fair value of hedges
and other significant items.
2 Map of Meridian assets: meridianenergy.co.nz/
assetmap
3 Megawatts: measure of generating
capacity (power).
4 Gigawatt hours: measure of generating output
(energy).
5 Excludes the Brooklyn wind turbine.
LOCAL GOVERNMENT
NGĀI TAHU AND OTHER IWI
ASSET COMMUNITIES
GENERATORS
SUPPLIERS/
CONTRACTORS
INDUSTRIAL
USERS
TRANSMISSION
EMPLOYEES
HYDRO POWER
STATIONS
7
NATIONAL
ENERGY MARKET
GENERATION
<1%
NEW ZEALAND’S
GENERATION
30%
WIND
FARMS
5
5
WIND
FARMS
2
MERIDIAN ENERGY
AUSTRALIA
MERIDIAN ENERGY

NEW ZEALAND
MERIDIAN AND POWERSHOP

NEW ZEALAND
CAPACITY (MW
3
)
Hydro NZWind NZWind AUS
4,000
5,000
6,000
7,000
8,000
20132014201520162017
GENERATION (GWh
4
)
Six months ended 31 December
6,852
7,1 7 5
7,338
6,242
7,118
Our supply chain for generating electricity principally relates
to the parts and components used to build and maintain our
generation assets. Our supply chain risk is limited to a small
number of components supplied by local and global suppliers,
with the balance supported by a mix of general engineering
consumable and specialist parts suppliers and service providers.
Meridian’s energy retailing business—in New Zealand and
Australia—has a negligible supply chain as the physical assets
used to distribute electricity and meter its use are managed by
national and local lines and metering companies. Our retail
operations’ requirements are typical of corporate offices, and
include the physical facilities and ICT, sales and marketing,
billing and governance functions.
Retail
6 Installation control points (ICPs).
7 Excluding Tīwai Point Aluminium Smelter.
* Excludes the Tīwai Point Aluminium Smelter; <10 of the above ICPs are connected to the transmission
network; around 4,000 customer connections have distributed generation metering.
SUBSTATIONS
GOVERNMENT/
REGULATORS
ELECTRICITY
MARKET
RETAILERSPOWERSHOPMERIDIAN
INVESTORS/SHAREHOLDERS
BUSINESSESHOUSEHOLDS
13%
OF NZ’S
CUSTOMER
CONNECTIONS
TĪWAI POINT
ALUMINIUM SMELTER
EQUIVALENT TO 37%
OF MERIDIAN’S
GENERATION
12% OF NZ’S
ELECTRICITY
CONSUMPTION
16%
NATIONAL
RETAIL
VOLUME
7
0
500
450
100
200
300
CUSTOMER CONNECTIONS* (ICPs
6
)
278
304
339
366
385
2,000
1,000
3,000
4,000
0
RETAIL SALES VOLUME (GWh)
Six months ended 31 December
2,886
2,995
3,327
3,039
3,430
Meridian NZ
Powershop NZ
Meridian—Res, Agri, SMB
Meridian—CorporatePowershop AUS
Powershop AUS
POWERSHOP
AUSTRALIA
POWERSHOP

UNITED KINGDOM
PROVIDING
SOFTWARE AS
A SERVICE
<1%
NATIONAL
ENERGY MARKET
RETAIL VOLUME
Hydro NZ
2,338
Wind NZ
416
Wind AUS
201
JUN-13JUN-14JUN-15DEC-16DEC-17
20132014201520162017
MERIDIAN ENERGY LIMITED Interim Report for the six months ended 31 December 2017

ii
iii

ABOUT MERIDIAN Interim Report for the six months ended 31 December 2017

v
A view from our Chair
and Chief Executive.
Meridian delivered an EBITDAF of $329 million in the six months to 31 December
2 0 17, a 7% decrease on the prior year. While the company achieved solid,
customer-led growth across our multiple segments and geographies, low inflows
in Meridian’s hydro catchments had a negative impact on the company’s financial
result as the amount of electricity that was able to be generated reduced by 16%
compared with the previous year.
Dividends
Meridian has declared an interim ordinary dividend of 5.38 cents
per share (cps). Despite some earnings decline in the period, it
is pleasing to declare a resilient dividend, up 1% on last year.
This is imputed to 88% and will be payable on 17 April 2018.
Meridian is now three years into its five year, $625 million capital
management programme. Included in the interim dividend is the
Board’s decision to continue the programme and to distribute a
further $62.5 million to shareholders by way of a special dividend
of 2.44 cps, in addition to the interim ordinary dividend described
above. There will be no imputation credits attached to this
payment. This will bring the amount distributed so far under
the programme to $375 million (14.6 cps).
Hydrology conditions
Persistently low South Island hydro inflows characterised the
New Zealand market over the past six months. Despite the dry
weather, the market continues to function well, with Meridian
using a variety of options that enable us to manage low inflow
conditions effectively. Prudent use of water storage saw Meridian
reduce its physical generation volumes by 16% compared with
the same period last year.
The hot, dry weather conditions were responsible for a marked
lift in national electricity demand (+1.1% on 2017), with heightened
irrigation-based load, particularly in the east of the South Island.
Customer growth
Customer sales volumes were up by reasonable levels in
both New Zealand (12%) and Australia (20%). In New Zealand,
Meridian delivered further sales growth in small and large
business segments (9% and 2% respectively). Growth was
higher again in the agricultural and corporate segments (26%
and 22% respectively); however the mixed effect of this growth
and continued strong competition in the whole market saw the
overall average sales price across all New Zealand segments
fall 4%.
In the UK, Flux delivered dual fuel functionality to nPower,
with white label offerings now in the market. Our New Zealand-
developed platform now supports 19,500 nPower UK customers.
Enablers of future Powershop retail growth in Australia have been
put in place in recent months with the acquisition of an additional
749GWh of renewable energy through the purchase of three hydro
stations in New South Wales and by securing three 10-year Power
Purchase Agreements supporting the build of new solar and wind
generation in Australia.
People
With the departure of Mark Binns, Neal Barclay took over as
Meridian’s Chief Executive on 1 January 2018.
The company has appointed Julian Smith to Neal’s previous role
of General Manager of Retail. Julian will bring strong digital
marketing and leadership experience from a variety of sectors,
including retail, banking and technology. In addition Mike Roan,
who previously held the role of Wholesale Markets Manager, was
appointed to the role of General Manager of Wholesale to drive
Meridian’s wholesale strategy, a role that now sits on the Executive
Team. We know Julian and Mike will add valuable experience and
expertise to the Meridian executive team.
Sustainability
With the change in government in New Zealand, last year, we have
noted a shift in political priorities that resonates strongly with the
direction and commitments we have made as a business. We
endorse the Government’s commitment to climate action, the
pursuit of 100% renewable generation and the focus on improving
the overall wellbeing of New Zealanders.
Our commitment to sustainability is genuine and enduring and
permeates our culture and our approach to all we do. Sustainability,
which goes well beyond our commitment to the generation of
renewable energy, has seen our impact as a business recognised by
the Colmar Brunton Better Futures Report, in which we’re named one
of New Zealand’s most sustainable brands for 2017; and for the past
two years we have been one of only three New Zealand companies
listed on the Dow Jones Sustainability Index.
NEAL BARCLAY
CHIEF EXECUTIVE
CHRIS MOLLER
CHAIR
1

A VIEW FROM OUR CHAIR AND CHIEF EXECUTIVE Interim Report for the six months ended 31 December 2017
MERIDIAN ENERGY LIMITED Interim Report for the six months ended 31 December 2017

iv

Leadership
Meridian believes we have a part to play as a business leader in
helping shape a sustainable future for our customers, for the
country and on the global stage. It is one of the reasons we fully
support the Government’s plans to set up an independent Climate
Change Commission, which will be focused on reducing our
country’s emissions and transitioning to a low-emissions economy.
Part of showing leadership is being engaged on key sector
issues and, like others, Meridian will actively participate in the
Government’s Electricity Pricing Review. New Zealand is fortunate
to have a well-functioning electricity market but there is always
room for improvement. At a time when rapidly evolving technology
is providing retailers with many opportunities to better support our
customers, it is important that the regulatory framework continues
to keep pace with technological change. We believe the review
could best add value by focusing on ensuring the regulatory
framework is future proofed.
New technologies
Meridian is working with segments of its commercial customer
base where it makes sense to create a solar solution for their
energy needs. One such company is Kiwi Property who has signed
a Memorandum of Understanding with Meridian for a large scale
solar installation. Meridian’s solar programme will help businesses
further benefit from renewable energy, encourage direct business
investment and directly contribute to the growth of renewables
in New Zealand.
We’ve also been supporting our residential customers to take
advantage of renewable energy at home with sharp electric vehicle
(EV) tariffs. This is why we’ve just launched a nationwide electric
car plan which gives our customers 20% off their electricity bill if
they have an electric car. We’re committed to supporting our
customers to embrace new sustainable technology so we’re also
going to cover the cost of charging their electric car for a year.
Meridian believes in the benefits of driving electric, and we are
on target to convert 50% of our passenger fleet to fully electric
vehicles by June 2018. We recognise the importance of converting
the nation’s fleet to electric in order to reduce our country’s
emissions and reliance on fossil fuels; this is one of the main
actions we can take to help combat climate change.
Maintaining our world-class assets
At Meridian, we’re privileged to be responsible for operating
world-class assets in beautiful locations. Part of this privilege
has also meant that we need to ensure that these assets continue
to remain world-class for generations to come which is why we
have a rolling maintenance programme to ensure that they remain
top-notch. This maintenance is part of our ongoing refurbishment
programme.
In the past six months, we completed much of the transformers
upgrade at the ManapŌuri Power Station. The underground power
station, which was commissioned in 1967, has seven main
transformers. Three were replaced in 2015 and in late November
the remaining four units were delivered to the station. We plan to
have these units installed and operating by April this year.
Work has also been taking place at Te Āpiti, New Zealand’s first
wind farm, to refurbish a number of the turbines and extend their
operating life time through until the middle of the next decade. 
These works include a full hub refurbishment and some foundation
repairs. The programme of work will take close to two years to
complete and is tracking well.
A view from
our Chair and
Chief Executive.
SUSTAIN-
ABLE
VALU-
ABLE
Value for our
shareholders.
3

A VIEW FROM OUR CHAIR AND CHIEF EXECUTIVE Interim Report for the six months ended 31 December 2017
MERIDIAN ENERGY LIMITED Interim Report for the six months ended 31 December 2017

2

Meridian saw its earnings (EBITDAF) for the six months ended
31 December 2017 decrease 7% compared with the prior
corresponding period.
Meridian concluded the 2017 financial year with a four-month
period of below average inflows, with the company reducing its
own generation and utilising dry year insurance and financial
instruments to reduce exposure to high spot market prices.
This dry weather extended into July 2017, when improved
inflows brought lake levels back to about average levels.
Further dry conditions prevailed from October 2017 through
to the end of December 2017 (and extended into January 2018),
with the ongoing cost of acquiring higher levels of generation
and the reduction in Meridian’s own discretionary generation
impacting earnings.
Despite this, Meridian has declared a resilient interim ordinary
dividend, 1% higher than last year.
Meridian has also declared an interim special dividend of 2.44 cents
per share ($62.5 million) under the company’s five-year capital
management programme to return $625 million to shareholders.
This reflects the underlying strength of Meridian’s balance sheet,
allowing dividends to be maintained despite short-term, hydrology
driven fluctuations in earnings. $375 million has now been distributed
since the capital management programme commenced in August
2015. To date, this has been paid as unimputed special dividends;
however a buyback remains a consideration.
INTERIM DIVIDENDS DECLARED
Financial snapshot.
OPERATING
CASH FLOW
$162M
TRANSMISSION
COSTS $63M
NZ
ENERGY
MARGIN
$452M
AUS
ENERGY
MARGIN
$57M
Dividend
declared
7.82cps
UNDERLYING
NPAT $104M
NPAT
$109M
21% LOWER
13% LOWER
7% LOWER
1% HIGHER
19% HIGHER
20% LOWER
OPERATING
COSTS $127M
7% LOWER
AMOUNT
CPS
IMPUTATION
%
FY18
Ordinary dividends
5.3888%
Capital management special dividend2.440%
Total7.8 2
FY17
Ordinary dividends
5.3388%
Capital management special dividend2.440%
Total7.7 7
EBITDAF
$329M
Despite dry conditions causing a 7% decrease in earnings, Meridian
declared an interim dividend 1% higher than last year, reflecting
the underlying strength of the company’s balance sheet.
Value for our
shareholders.
Five-year performance
for the financial year ended 30 June
six months ended 31 December
UNDERLYING NPAT
9
($M)CASH FLOW FROM
OPERATING ACTIVITIES ($M)
INTERIM DIVIDENDS DECLARED (CPS)
EBITDAF ($M)NPAT
8
($M)

Ordinary dividend

Special dividend
5% LOWER4% HIGHER
113
117
230
109
81
104
185
72
125
197
FY14FY15FY16FY17FY18

Interim

Final half-year
700
600
500
400
300
200
100
0
130
247
117
317
268
585
329
318
332
650
299
354
653
FY14FY15FY16FY17FY18

Interim

Final half-year
700
600
500
400
300
200
100
0
294
618
324
112
83
195
104
111
122
233
87
131
218
FY14FY15FY16FY17FY18

Interim

Final half-year
700
600
500
400
300
200
100
0
94
209
115
4.19
2.44
2.44
2.44
5.10
7. 5 4
5.33
5.38
7.7 7
7.82
1.40
6.20
4.80
20132014201520162017
8
7
6
5
4
3
2
1
0
241
192
433
162
246
206
452
267
203
470
FY14FY15FY16FY17FY18

Interim

Final half-year
700
600
500
400
300
200
100
0
223
440
217
8 Net profit after tax.
9 Net profit after tax adjusted for the effects of non-cash fair value movements and on-off items.
5

SUMMARY OF GROUP PERFORMANCE Interim Report for the six months ended 31 December 2017
MERIDIAN ENERGY LIMITED Interim Report for the six months ended 31 December 2017

4

329
+9
+3
-5
-9
+35
-116
+35
+22
+1
354
NEW
ZEALAND
ENERGY
MARGIN
-$33M
Earnings
MOVEMENT IN EBITDAF
300
350
450
400
New Zealand energy margin
1H FY18
$M
1H FY17
$M
Retail contracted sales revenueRevenue received from sales to retail customers net of distribution costs
(fees to distribution network companies that cover the costs of distribution
of electricity to customers)
328306
Wholesale contracted

sales revenue
Sales to large industrial customers and fixed-price revenue from

derivatives sold
191156
Net VAS revenueThe net revenue position of virtual asset swaps (VAS) with Genesis Energy and
Mercury New Zealand
(4)5
Net cost of acquired generationThe cost of derivatives acquired to supplement generation and manage spot price
risks, net of spot revenue received for generation acquired from those derivatives
31(4)
Net spot exposed revenuesRevenue from the volume of electricity that Meridian generates that is in excess of
the volume required to cover contracted customer sales
(92)24
OtherOther associated market revenue and costs including EA levies and ancillary
generation revenues such as frequency keeping
(2)(2)
Total452485
Value created for
our shareholders.
Meridian’s credit metrics remain within the bounds used by rating
agency Standard & Poor’s for BBB rating.
NET DEBT/EBITDAF
Cash flows
Operating cash flows were $162 million for the six months ended
31 December 2017, $41 million (20%) lower than the same period
last year, reflecting the impact of lower EBITDAF, both in the interim
period and in the final months of FY17, impacting cash collected in
July and August 2017.
Total capital expenditure for the six months to 31 December 2017
was $21 million, of which $17 million was stay in business capital
expenditure.
250
$MEBITDAF
31 December
2016
Net VAS
position
Net spot
exposed
revenue
Wholesale
contracted
sales
Net cost of
acquired
generation
Retail
contracted
sales
AUS energy
margin
Other
revenue
EBITDAF
31 December
2017
Transmission
expenses
Employee
and other
operating
expenses
JUN-14JUN-15JUN-16JUN-17DEC-17
1.8
1.7
1.8
1.9
2.2
The New Zealand energy margin was $452 million for the six months
ended 31 December 2017, $33 million (7%) lower than the same
period last year. Customer sales volumes were up by reasonable
levels in both New Zealand (12%) and Australia (20%). In
New Zealand, while residential sales volumes were down slightly
(-1%), Meridian delivered further sales growth in small and large
business segments (10% and 2% respectively). Growth was higher
again in the agricultural and corporate segments (24% and 22%
respectively); however the mix effect of this growth and continued
strong competition in the whole market saw the overall average
sales price across all New Zealand segments fall 4%.
Wholesale contracted sales revenue was $35 million (23%) higher
for the six months ended 31 December 2017. Wholesale derivative
sales volumes were 33% higher at higher average prices than the
same period last year.
The net cost of acquired generation was $35 million lower for the
six months ended 31 December 2017. While acquired generation
volumes were 162% higher at a higher average cost, average spot
prices received on acquired generation sales were higher again.
Spot exposed revenue was $116 million lower for the six months
ended 31 December 2017. Generation volumes were 16% lower
than the same period last year and were impacted by ongoing
low hydro inflows. The dry South Island conditions saw average
generation prices 110% higher than the same period last year.
While overall generation revenue was 77% higher than last year,
the higher wholesale market prices during the six months ended
31 December 2017 meant Meridian paid higher average prices to
supply contracted sales. These purchase volumes were 9% higher
than the same period last year and the higher overall cost to supply
contracted sales for the six months ended 31 December 2017
(125% higher than the same period last year) was $116 million
higher than the increased generation revenue.

Australia energy margin
ENERGY
MARGIN
+$9M
MOVEMENT IN AUSTRALIA SEGMENT EBITDAF

36
30
0
$M
10
50
60
40
30
20
EBITDAF
31 December
2016
Cost to
supply
contracted
sales
+7
-15
Transmission
expenses
Generation
spot
revenue
+17
Contracted
sales
Other
operating
expenses
EBITDAF
31 December
2017
-1
-2
The Australian energy margin was $9 million (16%) higher than
the same period last year, with Powershop Australia’s retail sales
volumes (289GWh in total) 48GWh (20%) higher than the same
period last year. The average generation price was 18% higher
than the same period last year, while wind generation (305GWh
in total) was 1% lower.
Transmission and operating costs
Transmission costs were $63 million for the six months ended
31 December 2017, $3 million (2%) lower than the same period
last year, from lower Transpower charges on the New Zealand
inter-island electricity transmission link.
Employee and other operating costs were $127 million for the six
months ended 31 December 2017, $5 million (4%) higher than the
same period last year. Growth investment supported continued
customer expansion in New Zealand (where customer connection
numbers were 2% higher than a year ago) and in Australia (where
customer connection numbers were 12% higher than a year ago).
The multi-year Ōhau and Te Āpiti refurbishment programmes are
also adding to overall operating costs.
MERIDIAN ENERGY LIMITED Interim Report for the six months ended 31 December 2017

6
7

SUMMARY OF GROUP PERFORMANCE Interim Report for the six months ended 31 December 2017

Net profit after tax
NPAT was $109 million for the six months ended 31 December 2017,
$16 million (13%) lower than the same period last year. Contributing
to lower NPAT were lower EBITDAF, higher depreciation and
amortisation (30 June 2017 asset revaluations) and higher financing
costs on higher net debt.
Meridian recognised a $6 million gain on the sale of surplus land
assets for the six months ended 31 December 2017, compared with
a $2 million loss in the prior period.
The period also saw positive net movements compared with last
year in the fair value movements in electricity hedges and treasury
instruments, which relate to non-cash changes in the carrying value
of derivative instruments and are influenced by changes in forward
prices and rates on these derivative instruments.
Fair value movements in electricity hedges reduced net profit
before tax by $2 million for the six months ended 31 December
2017, reflecting relatively stable forward electricity prices in both
New Zealand and Australia. This compares with a $75 million
reduction in net profit before tax in the same period last year.
Fair value movements in treasury instruments decreased net profit
before tax by $2 million for the six months ended 31 December 2017,
from relatively stable forward interest rates during the period. This
compares with a $63 million increase in net profit before tax in the
same period last year.
After removing the impact of fair value movements and other
one-off or infrequently occurring events, Meridian’s underlying
NPAT (reconciliation on page 9) was $104 million for the six months
ended 31 December 2017. This was $27 million (21%) lower than
the same period last year.





































MERIDIAN GENERATION
PLANT
CAPACITY
MW
SIX MONTHS
ENDED
31 DEC 2017
GWH
SIX MONTHS
ENDED
31 DEC 2016
GWH
YEAR
ENDED
30 JUN 2017
GWH
Ōhau A2644755671,221
Ōhau B2123994741,022
Ōhau C2123984731,019
Benmore5401,0431,1452,447
Aviemore220443485982
Waitaki90229252527
Manapōuri8002,3022,9014,756
Total New Zealand hydro2,3385,2896,29611,974
Te Uku64107126228
Te Āpiti9185119195
Mill Creek60121124235
West Wind143260274515
White Hill587590168
Total New Zealand wind4166487331,341
Mt Millar709585146
Mt Mercer131210224364
Total Australia wind201305309510
Value created for
our shareholders.
INCOME STATEMENT
SIX MONTHS
ENDED
31 DEC 2017
$M
SIX MONTHS
ENDED
31 DEC 2016
10

$M
New Zealand energy margin452485
Australia energy margin5748
Other revenue109
Energy transmission expense(63)(66)
Employee and other operating expenses(127)(122)
EBITDAF329354
Depreciation and amortisation(134)(132)
Impairment of assets(2)–
Gain/(loss) on sale of assets6(2)
Net change in fair value of electricity and other hedges(2)(75)
Net finance costs(41)(38)
Net change in fair value of treasury instruments(2)63
Net profit before tax154170
Income tax expense(4 5)(45)
Net profit after tax109125
UNDERLYING NPAT RECONCILIATION
SIX MONTHS
ENDED
31 DEC 2017
$M
SIX MONTHS
ENDED
31 DEC 2016
10

$M
Net profit after tax109125
Underlying adjustments
Hedging instruments
Net change in fair value of electricity and other hedges275
Net change in fair value of treasury instruments2(6 3)
Premiums paid on electricity options net of interest(6)(6)
Assets
(Gain)/loss on sale of assets(6)2
Impairment of assets2-
Total adjustments before tax(6)8
Taxation
Tax effect of above adjustments1(2)
Underlying net profit after tax104131
10 Restated for the adoption of NZ IFRS 15 (see page 16).
MERIDIAN ENERGY LIMITED Interim Report for the six months ended 31 December 2017

8
9

SUMMARY OF GROUP PERFORMANCE Interim Report for the six months ended 31 December 2017

Income Statement For the six months to 31 December 2017
NOTE
UNAUDITED
2017
$M
RESTATED
2016
$M
Operating revenueA2 1,441 1,131
Operating expensesA3(1,112) (777)
Earnings before interest, tax, depreciation, amortisation, changes in fair
value of hedges and other significant items (EBITDAF) 329 354
Depreciation and amortisationB1, B2(134) (132)
Impairment of assetsA3(2) –
Gain/(loss) on sale of assetsA1 6 (2)
Net change in fair value of electricity and other hedgesD1(2) (75)
Operating profit 197 145
Finance costsA3(41) (39)
Interest income – 1
Net change in fair value of treasury instrumentsD1(2) 63
Net profit before tax 154 170
Income tax expenseA4(45) (45)
Net profit after tax attributed to the shareholders of the parent company 109 125
Profit attributed to the shareholders of the parent company 109 125
Earnings per share (EPS) attributed to ordinary equity holders of the parent Cents Cents
Basic and diluted earnings per shareC24.34.9
Comprehensive Income Statement For the six months to 31 December 2017
UNAUDITED
2017
$M
RESTATED
2016
$M
Net profit after tax 109 125
Other comprehensive income
Items that may be reclassified to profit or loss:
Net gain on cash flow hedges
1 2
Exchange differences arising from translation of foreign operations 15(1)
Other comprehensive income for the period, net of tax 16 1
Total comprehensive income for the period, net of tax attributed to shareholders
of the parent company 125 126

11

THE NUMBERS Group financial statements for the six months ended 31 December 2017
Condensed interim
financial statements
Income Statement .................................11
The income earned and operating
expenditure incurred by the Meridian
Group during the six months.
Comprehensive Income Statement ...........11
Items of income and operating expense that
are not recognised in the income statement
and hence taken to reserves in equity.
Balance Sheet ......................................12
A summary of the Meridian Group assets
and liabilities at the end of the six months.
Changes in Equity .................................13
Components that make up the
capital and reserves of the Meridian
Group and the changes of each
component during the six months.
Cash Flows ...........................................14
Cash generated and used by
the Meridian Group.
Notes to the condensed
interim financial statements
About this report ..................................15
Significant matters in the six months ......16
A. Financial performance .......................18
A1 Segment performance ..........................18
A2 Income .............................................20
A3 Expenses ............................................21
A4 Taxation .............................................21
B. Assets used to generate and sell
electricity ........................................22
B1 Property, plant and equipment ...............22
B2 Intangible assets .................................22
C. Managing funding ..............................23
C1 Capital management ............................23
C2 Earnings per share ...............................23
C3 Dividends ...........................................23
C4 Borrowings ........................................24
D. Financial instruments ........................25
D1 Financial instruments ...........................25
E. Group structure and other..................28
E1 Group structure ...................................28
E2 Commitments .....................................28
E3 Contingent assets and liabilities .............28
E4 Subsequent events ..............................28
E5
Changes in financial
reporting standards
..........................28
Signed report
Independent auditor’s
review report ....................................29
CONDENSED INTERIM FINANCIAL STATEMENTS
AS AT AND FOR THE SIX MONTHS TO 31 DECEMBER 2017
The numbers.
KEY JUDGEMENTS
AND ESTIMATES
SUBSEQUENT
EVENT
RISKS
KEY
MERIDIAN ENERGY LIMITED Interim Report for the six months ended 31 December 2017

10

Balance Sheet As at 31 December 2017
NOTE
UNAUDITED
UNAUDITED
RESTATED
AUDITED
RESTATED
31 DEC 2017
$M
31 DEC 2016
$M
30 JUN 2017
$M
Current assets
Cash and cash equivalents
108 44 80
Trade receivables 304 184 260
Customer contract assetsA2 19 17 18
Financial instrumentsD1 92 95 59
Assets classified as held for sale– – 8
Other assets 30 26 24
Total current assets 553 366 449
Non-current assets
Property, plant and equipment
B1 7, 871 7,6 4 8 7, 9 6 1
Intangible assetsB2 58 57 58
Deferred tax 46 39 43
Financial instrumentsD1 166 186 172
Total non-current assets 8,141 7, 9 3 0 8,234
Total a ssets 8,694 8,296 8,683
Current liabilities
Payables and accruals
328 200 296
Employee entitlements 11 11 15
Current portion of term borrowingsC4 190 187 170
Finance lease payable 1 1 1
Financial instrumentsD1 75 55 67
Current tax payable19 16 30
Total current liabilities624 470 579
Non-current liabilities
Term borrowings
C4 1,176 1,042 1,022
Deferred tax 1,700 1,604 1,715
Provisions 9 8 9
Finance lease payables 47 46 46
Financial instrumentsD1 121 121 124
Term payables 84 97 93
Total non-current liabilities 3,137 2,918 3,009
Total liabilities 3,761 3,388 3,588
Net assets 4,933 4,908 5,095
Shareholders’ equity
Share capital
1,597 1,597 1,598
Reserves 3,336 3,311 3,497
Total shareholders’ equity 4,933 4,908 5,095
For and on behalf of the Board of Directors, who authorised the issue of the condensed interim financial statements on 20 February 2018.
CHRIS MOLLER, Board Chair JAN DAWSON, Chair Audit & Risk Committee
Changes in Equity For the six months to 31 December 2017
AUDITED (RESTATED)NOTE
$M
SHARE
CAPITAL
SHARE
OPTION
RESERVE
REVALUATION
RESERVE
FOREIGN
CURRENCY
TRANSLATION
RESERVE
CASH
FLOW
HEDGE
RESERVE
RETAINED
EARNINGS
SHAREHOLDERS’
EQUITY
Balance at 1 July 2016 1,597 1 3,941 (28) (3) (448) 5,060
Net profit for the year––––– 200 200
Other comprehensive income
Asset revaluation
–– 428 ––– 428
Net gain on cash flow hedges–––– 2 – 2
Exchange differences from translation of
foreign operations
––– 1 –– 1
Income tax relating to other
comprehensive income––(120) –––(120)
Total comprehensive income for the
year, net of tax–– 308 1 2 200 511
Share-based transactions 1 ––––– 1
Dividends paid–––––(477) (477)
Balance at 30 June 2017 and 1 July 2017 1,598 1 4,249 (27) (1) (725) 5,095
UNAUDITED
Net profit for the period––––– 109 109
Other comprehensive income
Net gain on cash flow hedges
–––– 1 – 1
Exchange differences from translation of
foreign operations––– 15 –– 15
Total comprehensive income for the
period, net of tax––– 15 1 109 125
Share-based transactions(1) –––––(1)
Dividends paidC3–––––(286) (286)
Balance at 31 December 2017 1,597 1 4,249 (12) –(902) 4,933
UNAUDITED (RESTATED)NOTE
SHARE
CAPITAL
SHARE
OPTION
RESERVE
REVALUATION
RESERVE
FOREIGN
CURRENCY
TRANSLATION
RESERVE
CASH
FLOW
HEDGE
RESERVE
RETAINED
EARNINGS
SHAREHOLDERS’
EQUITY
Balance at 1 July 2016 1,597 1 3,941 (28) (3) (448) 5,060
Net profit for the period––––– 125 125
Other comprehensive income
Net gain on cash flow hedges
–––– 2 – 2
Exchange differences from translation of
foreign operations–––(1) ––(1)
Total comprehensive income for the
period, net of tax–––(1) 2 125 126
Dividends paidC3–––––(278) (278)
Balance at 31 December 2016 1,597 1 3,941 (29) (1) (601) 4,908
13

THE NUMBERS Group financial statements for the six months ended 31 December 2017
MERIDIAN ENERGY LIMITED Interim Report for the six months ended 31 December 2017

12

Cash Flows For the six months to 31 December 2017
NOTE
UNAUDITED
2017
$M
2016
$M
Operating activities
Receipts from customers
1,374 1,110
Interest received– 1
Payments to suppliers and employees(1,101) (794)
Interest paid(38) (36)
Income tax paid(73) (78)
Operating cash flows 162 203
Investment activities
Sale of property, plant and equipment
12 –
Sale of subsidiary– 1
Purchase of property, plant and equipment(18) (18)
Purchase of intangible assets(10) (9)
Investing cash flows(16) (26)
Financing activities
Term borrowings
170 32
Term borrowings repaid(5) (5)
Dividends C3(286) (278)
Financing cash flows(121) (251)
Net increase/(decrease) in cash and cash equivalents 25 (74)
Cash and cash equivalents at beginning of the six months 80 118
Effect of exchange rate changes on net cash 3 –
Cash and cash equivalents at end of the six months 108 44
About this report
IN THIS SECTION
The summary notes to the condensed interim financial statements include information which is considered relevant and material
to assist the reader in understanding changes in Meridian’s financial position or performance. Information is considered relevant
and material if:
• the amount is significant because of its size and nature;
• it is important for understanding the results of Meridian;
• it helps to explain changes in Meridian’s business; or
• it relates to an aspect of Meridian’s operations that is important to future performance.
Meridian Energy Limited is a for-profit entity domiciled and
registered under the Companies Act 1993 in New Zealand. It
is an FMC reporting entity for the purposes of the Financial
Markets Conduct Act 2013. Meridian’s core business activities
are the generation, trading and retailing of electricity and the
sale of complementary products and services. The registered
office of Meridian is 33 Customhouse Quay, Wellington. Meridian
Energy Limited is dual listed on the New Zealand Stock Exchange
(NZX) and the Australian Securities Exchange (ASX). As a Mixed
Ownership Company, majority owned by Her Majesty the Queen
in Right of New Zealand, it is bound by the requirements of the
Public Finance Act 1989.
These unaudited condensed interim financial statements for the
six months ended 31 December 2017 have been prepared:
• using Generally Accepted Accounting Practice (NZ GAAP) in
New Zealand, accounting policies consistent with International
Financial Reporting Standards (IFRS) and the New Zealand
equivalents (NZ IFRS) and in accordance with IAS 34 Interim
Financial Reporting and NZ IAS 34 Interim Financial Reporting,
as appropriate for a for-profit entity;
• in accordance with the requirements of the Financial Markets
Conduct Act 2013;
• on the basis of historical cost, modified by revaluation of
certain assets and liabilities; and
• in New Zealand dollars (NZD). The principal functional currency
of international subsidiaries is Australian dollars. The closing
rate at 31 December 2017 was 0.9084 (December 2016: 0.9628,
30 June 2017: 0.9536).
All values are rounded to millions ($M) unless otherwise stated.
Accounting policies
The accounting policies, methods of computation and
classification set out in the Group financial statements for the
year ended 30 June 2017 have been applied consistently to all
periods presented in the condensed interim financial statements,
with the exception that NZ IFRS 15 Revenue from Contracts with
Customers has been adopted during the period. This is discussed
on page 16 under significant matters. The application of
further new or amended standards has no material impact on
the amounts recognised in the condensed interim financial
statements.
Judgements and estimates
The basis of key judgements and estimates has not changed
from those used in preparing the financial statements for the
year ended 30 June 2017.
Basis of consolidation
The condensed interim Group financial statements comprise
the financial statements of Meridian Energy Limited and its
subsidiaries and controlled entities.
15

THE NUMBERS Group financial statements for the six months ended 31 December 2017
MERIDIAN ENERGY LIMITED Interim Report for the six months ended 31 December 2017

14

Significant matters in the six months
IN THIS SECTION
This section outlines significant matters which have impacted Meridian’s financial performance and an explanation of non-GAAP
measures used within the notes to the condensed interim financial statements.
Early adoption of NZ IFRS 15 Revenue
from Contracts with Customers
The adoption of the new revenue standard has resulted in a
change to Meridian’s accounting policy relating to the treatment
of incentives given to customers (such as credits applied to a
customer’s account) and any incremental costs directly incurred
in acquiring new customers and retaining existing customers
(such as sales commissions).
Meridian’s previous policy was to recognise customer credits
(upfront discounts) as a discount to electricity sales to customers
at the time the credit was applied to the customer’s account,
and to recognise incremental costs of acquiring and retaining
at the time they were incurred. The change of policy will result
in customer incentives and incremental costs being deferred
to the balance sheet as Customer contract assets and amortised
on a straight-line basis over the expected average customer
contract tenure.
The standard has been applied retrospectively. The effect of this
change in accounting policy is shown below:
6 MONTHS ENDED 31 DECEMBER
INCOME STATEMENT EFFECT
ORIGINAL
2016
$M
ADJUSTMENT
$M
RESTATED
2016
$M
Operating revenue 1,130 1 1,131
Operating expenses (778) 1 (777)
EBITDAF 352 2 354
Income tax expense (44) (1) (45)
Net profit after tax 124 1 125
Earnings per share
(cents per share) 4.8 0.1 4.9
AS AT 30 JUNE
BALANCE SHEET EFFECT
ORIGINAL
2017
$M
ADJUSTMENT
$M
RESTATED
2017
$M
Customer contract assets– 18 18
Deferred tax liability (1,710) (5) (1,715)
Retained earnings (738) 13 (725)
AS AT 31 DECEMBER
BALANCE SHEET EFFECT
ORIGINAL
2016
$M
ADJUSTMENT
$M
RESTATED
2016
$M
Customer contract assets– 17 17
Deferred tax liability (1,598) (6) (1,604)
Retained earnings (612) 11 (601)
Hydro inflows
The dry conditions experienced in the second half of the financial
year ended 30 June 2017 continued through the first quarter of
this financial year. The arrival of Spring inflows saw storage return
to average levels. However a hot and dry December has resulted
in below average inflows and Meridian’s hydro storage dropping
below average for this time of year.
This has resulted in rising wholesale prices, Meridian reducing
its hydro generation production and the calling of electricity
swaptions. Higher wholesale electricity prices positively impacted
revenues received from New Zealand generation production, albeit
at lower production levels. However, this negatively impacts the
cost to supply contracted physical and financial electricity sales.
Acquisition of GSP Energy Pty Ltd
Meridian has entered into an agreement for the purchase of
100% of the shares in GSP Energy Pty Ltd (GSP) for A$168 million
(before stamp duty and any purchase price adjustments). This
will settle on 29 March 2018. GSP operates three hydro power
stations: the Hume, Burrinjuck and Keepit power stations,
located in New South Wales, Australia. The generation produced
from these stations will support sales to Powershop Australia
customers.
Non-GAAP measures
Meridian refers to non-GAAP financial measures within these
condensed interim financial statements and accompanying notes.
The limited use of non-GAAP measures is intended to supplement
GAAP measures to provide readers with further information to
broaden their understanding of Meridian’s financial performance
and position. They are not a substitute for GAAP measures.
As these measures are not defined by NZ GAAP, IFRS, or any other
body of accounting standards, Meridian’s calculations may differ
from similarly titled measures presented by other companies.
The measures are described below, including page references
for reconciliations to the condensed interim financial statements.
EBITDAF
Earnings before interest, tax, depreciation, amortisation,
change in fair value of hedges and other significant items.
EBITDAF is reported in the income statement allowing the
evaluation of Meridian’s operating performance without the
non-cash impact of depreciation, amortisation, fair value
movements of hedging instruments and other one-off
and/or infrequently occurring events as well as the effects
of Meridian’s capital structure and tax position. This allows
a better comparison of operating performance with that of
other electricity industry companies than GAAP measures
that include these items.
Energy margin
Energy margin provides a measure of financial performance
that, unlike total revenue, accounts for the variability of the
wholesale electricity market and the broadly offsetting impact
of the wholesale prices on the cost of Meridian’s retail electricity
purchases and revenue from generation. Meridian uses the
measure of energy margin within its segmental financial
performance in note A1 Segment performance on page 18.
Net debt
Net debt is a metric commonly used by investors as a measure
of Meridian’s indebtedness that takes account of liquid financial
assets. Meridian uses this measure within its capital management
and this is outlined in note C1 Capital management on page 23.
17

THE NUMBERS Group financial statements for the six months ended 31 December 2017
MERIDIAN ENERGY LIMITED Interim Report for the six months ended 31 December 2017

16

A. Financial performance
IN THIS SECTION
This section explains the financial performance of Meridian, providing additional information about individual items in the
income statement, including:
a) accounting policies, judgements and estimates that are relevant for understanding items recognised in the income statement;
and
b) analysis of Meridian’s performance for the six months by reference to key areas including: performance by operating segment,
revenue, expenses and taxation.
A1 Segment performance
The Chief Executive (the chief operating decision-maker) monitors the operating performance of each segment for the purpose of
making decisions on resource allocation and strategic direction.
He considers the business according to the nature of the products and services and the location of operations, as set out below:
SEGMENTACTIVITIES
NZ wholesaleGeneration of electricity and its sale into the New Zealand wholesale electricity market.
Purchase of electricity from the wholesale electricity market and its sale to the NZ Retail segment and to large
industrial customers, including New Zealand Aluminium Smelter (NZAS) representing the equivalent of 43%
(31 December 2016: 36%) of Meridian’s New Zealand generation production.
Development of renewable electricity generation opportunities in New Zealand.
NZ retailRetailing of electricity and complementary products through two brands (Meridian and Powershop) in New Zealand.
Electricity sold to residential, business and industrial customers on fixed-price variable volume contracts is
purchased from the Wholesale segment at an average annual fixed price of $73–$78 per megawatt hour (MWh) and
electricity sold to business and industrial customers on spot (variable price) agreements is purchased from the
Wholesale segment at prevailing wholesale spot market prices.
Agency margin from spot sales is included within ‘Contracted sales, net of distribution costs’.
The transfer price is set in a similar manner to transactions with third parties.
Powershop New Zealand provides front line customer and back office services for Powershop Australia. Revenue of
$2 million has been recorded in ‘other revenue’ and is eliminated on Group consolidation.
AustraliaGeneration of electricity from Meridian’s two wind farms and sale into the Australian wholesale electricity market.
Retailing of electricity through the Powershop brand in Australia.
Development of renewable electricity generation options in Australia.
Other and
unallocated
Other operations that are not considered reportable segments, including licensing of the Powershop platform.
Activities and centrally based costs that are not directly allocated to other segments.
The financial performance of the operating segments is assessed using energy margin and EBITDAF (see page 17 for a definition of these
measures) before unallocated central corporate expenses. Balance sheet items are not reported to the Chief Executive at an operating
segment level.
A1 Segment performance (continued)
FOR THE SIX MONTHS TO 31 DECEMBER
NZ WHOLESALENZ RETAILAUSTRALIAOTHER AND
UNALLOCATED
INTER-SEGMENTGROUP
2017
$M
2016
$M
2017
$M
2016
$M
2017
$M
2016
$M
2017
$M
2016
$M
2017
$M
2016
$M
2017
$M
2016
$M
Contracted sales, net of
distribution costs 191 156 328 306 49 32 – – – – 568 494
Virtual asset swap margins (4) 5 – – – – – – – – (4) 5
Net cost of acquired generation 31 (4) – – – – – – – – 31 (4)
Generation spot revenue 553 312 – – 45 38 – – – – 598 350
Inter-segment electricity sales 274 238 – – – – – – (274) (238) – –
Cost to supply contracted sales (682) (312) (237) (214) (37) (22) – – 274 238 (682) (310)
Other market revenue/(costs) (3) (3) 1 1 – – – – – – (2) (2)
Energy margin 360 392 92 93 57 48 – – – – 509 533
Other revenue 2 3 5 6 – – 8 4 (5) (4) 10 9
Dividend revenue – – – – – – – 1 – (1) – –
Energy transmission expense (60) (64) – – (3) (2) – – – – (63) (66)
Gross margin 302 331 97 99 54 46 8 5 (5) (5) 456 476
Employee expenses (14) (15) (15) (14) (4) (4) (14) (14) – – (47) (47)
Electricity metering expenses – – (15) (15) – – – – – – (15) (15)
Other operating expenses (26) (24) (18) (15) (14) (12) (11) (12) 4 3 (65) (60)
EBITDAF 262 292 49 55 36 30 (17) (21) (1) (2) 329 354
Depreciation and amortisation (134) (132)
Impairment of assets (2) –
Gain/(Loss) on sale of assets 6 (2)
Net change in fair value of
electricity and other hedges (2) (75)
Operating profit 197 145
Finance costs (41) (39)
Interest income – 1
Net change in fair value of
treasury instruments (2) 63
Net profit before tax 154 170
Income tax expense (45) (45)
Net profit after tax 109 125
Reconciliation of energy margin
Electricity sales revenue
942 675 626 584 137 102 – – (274) (238) 1,431 1,123
Electricity expenses,
net of hedging
(582) (283) (285) (263) (47) (28) – – 274 238 (640) (336)
Electricity distribution
expenses – – (249) (228) (33) (26) – – – – (282) (254)
Energy margin 360 392 92 93 57 48 – – – – 509 533
The 2016 comparative performance has been restated to reflect the adoption of NZ IFRS 15 Revenue from Contracts with Customers.
19

THE NUMBERS Group financial statements for the six months ended 31 December 2017
MERIDIAN ENERGY LIMITED Interim Report for the six months ended 31 December 2017

18

A2 Income
6 MONTHS ENDED 31 DECEMBER
OPERATING REVENUE
UNAUDITED
2017
$M
RESTATED
2016
$M
Electricity sales to customers 852 750
Electricity generation, net of hedging 579 373
Electricity-related services revenue 4 5
Other revenue 6 3
1,441 1,131
POSITION AS AT
CUSTOMER CONTRACT ASSETS
UNAUDITED
31 DEC 2017
$M
RESTATED
31 DEC 2016
$M
Opening balance 18 15
Deferred during the period
Discounts and up front credits to customers
5 5
Sales costs 2 2
7 7
Released to the income statement during the period
Electricity sales to customers
(4) (3)
Other expenses (2) (2)
(6) (5)
Closing balance 19 17
6 MONTHS ENDED 31 DECEMBER
TOTAL REVENUE BY GEOGRAPHIC AREA
UNAUDITED
2017
$M
RESTATED
2016
$M
New Zealand 1,300 1,028
Australia 137 101
United Kingdom 4 2
Total operating revenue 1,441 1,131
6 MONTHS ENDED 31 DECEMBER
GAIN/(LOSS) ON SALE OF ASSETS
UNAUDITED
2017
$M
2016
$M
Gain/(loss) on sale of property,
plant and equipment
6 (2)
Operating revenue
Electricity sales to customers
Revenue received or receivable from residential, business and
industrial customers. This revenue is influenced by customer
contract sales prices and their demand for electricity.
Key judgements and estimates –
customer contracts
Electricity consumption
Meridian exercises judgement in estimating retail
electricity sales where customer electricity meters are
unread at balance date. These estimates of customer
electricity usage in the unread period are based on the
customers’ historical consumption patterns.
Revenue is recognised at the time of supply and
customer consumption. Variable elements of the sale
price such as discounts and credits given to customers
and any incremental costs incurred in obtaining or
retaining a customer contract are deferred to customer
contract assets on the balance sheet and released to
the income statement over the contract tenure.
Customer contract tenure
Meridian exercises judgement in estimating customer
contract tenures where contracts do not have a fixed
term. These estimations are based on the average
rate of customer churn for groups of customers with
similar attributes. The following estimates of customer
contract tenure have been used to spread variable
components of the sale price and incremental costs
of acquiring a customer:
• New Zealand—residential and business between
2 and 3 years.
• Australian—residential and business between
2 and 3 years.
Electricity generation, net of hedging
Revenue received from:
• electricity generated and sold into the wholesale markets; and
• the net settlement of electricity hedges sold on electricity
futures markets, and to generators, retailers and industrial
customers.
This revenue is influenced by the quantity of generation and the
wholesale spot price and is recognised at the time of generation
or hedge settlement.
Electricity-related services revenue
Revenues received or receivable from the sale of complementary
products and services to retail customers and the provision of
dam safety and surveillance services.
Other revenue
Includes revenues from non-core activities such as Powershop
platform licensing, finance leases, land leases and farming.
A3 Expenses
6 MONTHS ENDED 31 DECEMBER
OPERATING EXPENSES
UNAUDITED
2017
$M
RESTATED
2016
$M
Electricity expenses, net of hedging 640 336
Electricity distribution expenses 282 253
Electricity transmission expenses 63 66
Employee expenses 47 47
Electricity metering expense 15 15
Other expenses 65 60
1,112 777
FINANCE COSTS
UNAUDITED
2017
$M
2016
$M
Interest on borrowings 37 34
Interest on option premiums 1 2
Interest on finance lease payable 3 3
41 39
IMPAIRMENT OF ASSETS
UNAUDITED
2017
$M
2016
$M
Impairment of assets (2)–
Electricity expenses, net of hedging
The cost of:
• electricity purchased from wholesale markets to supply
customers;
• the net settlement of buy-side electricity hedges; and
• related charges and services.
Electricity expenses are influenced by quantity and timing of
customer consumption and the wholesale spot price.
Electricity distribution expenses
The cost of distribution companies transporting electricity
between the national grid and customers’ properties.
Electricity transmission expenses
Meridian’s share of the cost of the high voltage direct current
(HVDC) link between the North and South Islands of New Zealand
and the cost of connecting Meridian’s generation sites to the
national grid by grid providers.
Employee expenses
Provision is made for benefits owing to employees in respect
of wages and salaries, annual leave, long service leave and
employee incentives for services rendered. Provisions are
recognised when it is probable they will be settled and can be
measured reliably. They are carried at the remuneration rate
expected to apply at the time of settlement.
Impairment of assets
During the period, the book value of Central Wind consent has
been impaired as we no longer intend to pursue development
of this location.
A4 Taxation
6 MONTHS ENDED 31 DECEMBER
INCOME TAX EXPENSE
UNAUDITED
2017
$M
RESTATED
2016
$M
Current income tax charge 63 62
Deferred tax (18) (17)
Income tax expense 45 45
Reconciliation to profit before tax
Profit before tax
154 170
Income tax at applicable rates 44 48
Expenditure not deductible for tax 1 (3)
Income tax expense 45 45
Income tax expense
Income tax expense is the income tax assessed on taxable
profit for the period. Taxable profit differs from profit before tax
reported in the income statement as it excludes items of income
and expense that are taxable or deductible in other periods and
also excludes items that will never be taxable or deductible.
Meridian’s liability for current tax is calculated using tax rates
that have been enacted or substantively enacted at balance
date, being 28% for New Zealand and 30% for Australia.
Income tax expense components are current income tax and
deferred tax.
21

THE NUMBERS Group financial statements for the six months ended 31 December 2017
MERIDIAN ENERGY LIMITED Interim Report for the six months ended 31 December 2017

20

B. Assets used to generate and sell electricity
IN THIS SECTION
This section shows the assets Meridian uses in the production and sale of electricity to generate operating revenues. In this
section of the summary notes there is information about:
a) property, plant and equipment; and
b) intangible assets.
B1 Property, plant and equipment
POSITION AS AT
UNAUDITEDAUDITED
31 DEC
2017
$M
31 DEC
2016
$M
30 JUN
2017
$M
Opening net book value 7,961 7,7 71 7,7 71
Additions 12 12 34
Transfers—intangible assets– (9) (9)
Transfers—other assets– – (8)
Impairment– – (12)
Disposals– (2) (2)
Foreign currency exchange
rate movements
22 (1) 2
Generation structures and plant revaluation:
– revaluation reserve
– – 428
– income statement– – 2
Depreciation expense(124) (123) (245)
Closing net book value 7, 871 7,6 4 8 7,961
B2 Intangible assets
POSITION AS AT
UNAUDITEDAUDITED
31 DEC
2017
$M
31 DEC
2016
$M
30 JUN
2017
$M
Opening net book value 58 47 47
Additions 10 10 21
Transfers—property, plant
and equipment– 9 9
Amortisation expense(10) (9) (19)
Closing net book value 58 57 58
Recognition and measurement
Generation structures and plant assets (including land and
buildings) are held on the balance sheet at their fair value at
the date of revaluation, less any subsequent depreciation and
impairment losses. All other property, plant and equipment is
stated at historical cost less accumulated depreciation and
any accumulated impairment losses.
Fair value and revaluation of generation structures
and plant
Meridian revalued its generation structure and plant assets
at 30 June 2017 using an independent valuer, resulting in a net
increase of $199 million in the carrying value of this asset class.
A review and assessment of key valuation inputs included in that
valuation has been undertaken, indicating that there has been
no material change in fair value.
C. Managing funding
IN THIS SECTION
This section explains how Meridian manages its capital structure and working capital, the various funding sources, and how
dividends are returned to shareholders. In this section of the summary notes there is information about:
a) equity and dividends; and
b) net debt.
C1 Capital management
Capital risk management objectives
Meridian’s objective when managing capital is to provide
appropriate returns to shareholders while maintaining a capital
structure that safeguards its ability to remain a going concern
and optimises the cost of capital.
Capital is defined as the combination of shareholders’ equity,
reserves and net debt.
Meridian manages its capital through various means, including:
• adjusting the amount of dividends paid to shareholders;
• raising or returning capital; and
• raising or repaying debt.
Meridian regularly monitors its capital requirements using various
measures that consider debt facility financial covenants and credit
ratings, the key measures being net debt to EBITDAF and interest
cover. The principal external measure is Meridian’s credit rating
from Standard and Poor’s, which is unchanged at BBB+.
Meridian is in full compliance with debt facility financial covenants.
POSITION AS ATNOTE
UNAUDITEDAUDITED
31 DEC
2017
$M
RESTATED
31 DEC
2016
$M
RESTATED
30 JUN
2017
$M
Share capital 1,597 1,5971,598
Retained earnings(902) (601) (725)
Other reserves 4,238 3,912 4,222
4,933 4,908 5,095
Drawn borrowingsC4 1,331 1,163 1,158
Finance lease payable 48 47 47
Less: cash and cash
equivalents (108) (44) (80)
1,271 1,166 1,125
Net capital 6,204 6,074 6,220
C2 Earnings per share
BASIC AND DILUTED
EARNINGS PER SHARE (EPS)
UNAUDITED
31 DEC 2017
RESTATED
31 DEC 2016
Profit after tax attributable
to shareholders of the
parent company ($M) 109 125
Weighted average number
of shares used in the
calculation of EPS
2,563,000,000 2,563,000,000
Basic and diluted EPS
(cents per share) 4.3 4.9
C3 Dividends
6 MONTHS ENDED 31 DECEMBER
DIVIDENDS DECLARED AND PAID
UNAUDITED
2017
$M
2016
$M
Final ordinary and special dividend 2017:
11.14cps (2016: 10.84cps) 286 278
Total dividends paid 286 278
DIVIDENDS DECLARED AND NOT RECOGNISED AS A LIABILITY
Interim ordinary dividend 2018:
5.38cps (2017: 5.33cps)138 137
Interim special dividend 2018:
2.44cps (2017: 2.44cps) 63 63
Dividend policy
Meridian’s dividend policy considers free cash flow, working
capital requirements, the medium-term investment programme,
maintaining a BBB+ credit rating and risks from short and
medium-term economic, market and hydrology conditions.
Subsequent event—dividend declared
On 20 February 2018, the Board declared a partially
imputed interim ordinary dividend of 5.38 cents per
share. Additionally the Board declared an unimputed
special dividend of 2.44 cents per share.
23

THE NUMBERS Group financial statements for the six months ended 31 December 2017
MERIDIAN ENERGY LIMITED Interim Report for the six months ended 31 December 2017

22

C4 Borrowings
CURRENCY
BORROWED
IN
UNAUDITEDAUDITED
POSITION AS AT
31 DEC 201731 DEC 201630 JUN 2017
GROUP (NZ$M)
DRAWN
FACILITY
AMOUNT
TRANS-
ACTION
COSTS
FAIR
VALUE
ADJUST-
MENT
CARRYING
AMOUNT
DRAWN
FACILITY
AMOUNT
TRANS-
ACTION
COSTS
FAIR
VALUE
ADJUST-
MENT
CARRYING
AMOUNT
DRAWN
FACILITY
AMOUNT
TRANS-
ACTION
COSTS
FAIR
VALUE
ADJUST-
MENT
CARRYING
AMOUNT
Current borrowings
Unsecured
borrowings
NZD 191 (1) – 190 180 (1) – 179 171 (1) – 170
Unsecured
borrowings AUD – – – – 8 – – 8 – – – –
Total current
borrowings 191 (1) – 190 188 (1) – 187 171 (1) – 170
Non-current borrowings
Unsecured
borrowings
NZD 700 (2) – 698 545 (1) – 544 555 (1) – 554
Unsecured
borrowings USD 440 (1) 39 478 430 (2) 70 498 432 (2) 38 468
Total non-current
borrowings
1,140 (3) 39 1,176 975 (3) 70 1,042 987 (3) 38 1,022
Total borrowings
1,331 (4) 39 1,366 1,163 (4) 70 1,229 1,158 (4) 38 1,192
Meridian has committed bank facilities of $685 million, of which
$375 million were undrawn at 31 December 2017. The expiry dates
of these facilities range from July 2018 to April 2026.
Borrowings, measurement and recognition
Borrowings are recognised initially at the fair value of the drawn
facility amount, net of transaction costs paid. Borrowings
are subsequently stated at amortised cost using the effective
interest method. Any borrowings which have been designated
as hedged items (USD borrowings) are carried at amortised
cost plus a fair value adjustment under hedge accounting
requirements. Any borrowings denominated in foreign currencies
are retranslated to the functional currency at each reporting date.
Any retranslation effect is included in the ‘Fair value adjustment’
column in the above movement table.
Meridian uses cross-currency interest rate swap (CCIRS)
hedge contracts to manage its exposure to interest rates and
borrowings sourced in currencies different from that of the
borrowing entity’s reporting currency.
Fair value of items held at amortised cost
UNAUDITEDAUDITEDUNAUDITEDAUDITED
POSITION AS AT31 DEC 201731 DEC 201630 JUN 201731 DEC 201731 DEC 201630 JUN 2017
GROUP (NZ$M)CARRYING VALUEFAIR VALUE
Retail bonds 300 150 300 316 152 311
Renewable energy bonds– 75 – – 77 –
Unsecured term loan (EKF facility) 85 95 90 92 103 98
Within term borrowings there are longer-dated, fixed-interest-
rate instruments which are not in hedge accounting relationships.
The carrying values and estimated fair values of these
instruments are noted in the table above.
The fair value of Meridian’s retail bonds and renewable energy
bonds is calculated by reference to quoted prices on the NZX.
The fair value of Meridian’s EKF facility (provided by the official
export credit agency of Denmark) is calculated using a discounted
cash flow calculation. These are classified as level 2 instruments
within the fair value hierarchy. A lack of liquidity on the NZX
precludes them from being classified as level 1 (a definition of
levels is included in D1 Financial instruments on page 25).
Carrying value approximates fair value for all other instruments
within term borrowings.
D. Financial instruments
IN THIS SECTION
In this section of the summary notes there is information:
a) analysing financial (hedging) instruments used to manage risk; and
b) outlining Meridian’s fair value techniques and key inputs.
D1 Financial instruments
Fair value of hedging financial instruments
The recognition and measurement of hedging financial instruments require management estimation and judgement (this is discussed
in further detail later in this note). These estimates can have a significant risk of material adjustment in future periods. Fair value
measurements are grouped within a three-level fair value hierarchy based on the observability of valuation inputs (described below).
• Level 1 Inputs—Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the
measurement date.
• Level 2 Inputs—Either directly (i.e. as prices) or indirectly (i.e. derived from prices) observable inputs other than quoted prices
included in level 1.
• Level 3 Inputs—Inputs for the asset or liability that are not based on observable market data (unobservable inputs).
LEVEL
FAIR VALUE ON THE BALANCE SHEETFAIR VALUE MOVEMENTS
IN THE INCOME STATEMENT
UNAUDITEDAUDITEDUNAUDITED
31 DEC 201731 DEC 201630 JUN 201731 DEC 201731 DEC 2016
ASSETS
$M
LIABILITIES
$M
ASSETS
$M
LIABILITIES
$M
ASSETS
$M
LIABILITIES
$M$M$M
Cross-currency interest rate swap (CCIRS)—
fair value hedge243(4)70–46(8)–1
CCIRS—cash flow hedge2(2)–(2)–(3)–––
Interest rate swap (IRS)212(112)8(98)9(106)(2)62
Treasury hedges53(116)76(98)52(114)(2)63
Foreign exchange hedges2––1–1––(1)
Market traded electricity hedges122(27)26(13)21(29)31
Other electricity hedges342(26)17(20)41(29)3(67)
Electricity options395–117–98–(3)(3)
Large-scale generation certificates (LGC)—
Holdings created from wind farm generation144–43–16–2–
LGC—forward and option contracts22(27)1(45)2(19)(7)(5)
Electricity and other hedges205(80)205(78)179(77)(2)(75)
Total hedges258(196)281(176)231(191)(4)(12)
Settlements
The following provides a summary of the settlements through EBITDAF for financial instruments:
$M
UNAUDITED
2017
UNAUDITED
2016
ELECTRICITY
HEDGES LGCS
ELECTRICITY
OPTIONS TOTAL
ELECTRICITY
HEDGES LGCS
ELECTRICITY
OPTIONS TOTAL
Operating revenue(34) 28 – (6) 18 28 – 46
Operating expenses 30 (5) 3 28 (16) (5) – (21)
Total settlements in EBITDAF(4) 23 3 22 2 23 – 25
25

THE NUMBERS Group financial statements for the six months ended 31 December 2017
MERIDIAN ENERGY LIMITED Interim Report for the six months ended 31 December 2017

24

Level 3 financial instrument analysis
The following provides a summary of the movements through EBITDAF and movements in the fair value of level 3 financial instruments:
$M
UNAUDITED
2017
UNAUDITED
2016
ELECTRICITY
HEDGES LGCS
ELECTRICITY
OPTIONS TOTAL
ELECTRICITY
HEDGES LGCS
ELECTRICITY
OPTIONS TOTAL
Electricity and other hedges settled
in EBITDAF:
Operating revenue
(13)––(13)17––17
Operating expenses37–340(15)––(15)
Total settlements in EBITDAF24–3272––2
Net change in fair value of electricity
and other hedges:
Remeasurement
27––27(64)(6)(3)(73)
Hedges settled(24)–(3)(27)(2)––(2)
Total net change in fair value of
electricity and other hedges3–(3)–(66)(6)(3)(75)
Balance at the beginning of
the period
12–9811063(38)120145
Fair value movements3–(3)–(66)(6)(3)(75)
Electricity hedges acquired1––1––––
Balance at the end of the year16–95111(3)(44)11770
LGC options and forwards have been transferred to level 2 as inputs derived from observable market prices are now available to value them.
Fair value technique and key inputs
In estimating the fair value of an asset or liability, Meridian uses market-observable data to the extent that it is available. The
Audit and Risk Committee of Meridian determines the overall appropriateness of key valuation techniques and inputs for fair
value measurement. The Chief Financial Officer explains fair value movements in his report to the Board.
Where the fair value of a financial instrument is calculated as the present value of the estimated future cash flows of the
instrument (DCFs), a number of inputs and assumptions are used by the valuation technique. These are:
• forward price curves referenced to the ASX for electricity, published market interest rates and published forward foreign
exchange rates;
• Meridian’s best estimate of electricity volumes called over the life of electricity options;
• discount rates based on the forward IRS curve adjusted for counterparty risk;
• calibration factor applied to forward price curves as a consequence of initial recognition differences;
• NZAS continues to operate; and
• contracts run their full term.
The table below describes the additional key inputs and techniques used in the valuation of level 2 and 3
financial instruments:
FINANCIAL ASSET
OR LIABILITY
DESCRIPTION OF INPUTRANGE OF SIGNIFICANT
UNOBSERVABLE INPUTS
RELATIONSHIP OF INPUT TO
FAIR VALUE
Electricity hedges
and options, valued
using DCFs
Price, where quoted prices are not
available or not relevant (i.e. for
long dated contracts), Meridian’s
best estimate of long-term forward
wholesale electricity price is used.
This is based on a fundamental analysis
of expected demand and the cost of
new supply and any other relevant
wholesale market factors.
$75/MWh to
$107/MWh (in real
terms), excludes
observable ASX
prices.
An increase in forward
wholesale electricity price
increases the fair value of buy
hedges and decreases the fair
value of sell hedges. A decrease
in forward wholesale electricity
price has the opposite effect.
LGC forward contracts
and options, valued using
DCFs/Black-Scholes
Price, based on a forward LGC
price curve from a third-party
broker and benchmarked against
market spot prices.
A$59–A$88An increase in the forward LGC
price decreases the fair value
of sell hedges and increases
the fair value of buy hedges.
A decrease in forward LGC
prices has the opposite effect.
Movements in recalibration differences arising from
electricity hedging
POSITION AS AT
UNAUDITEDAUDITED
31 DEC
2017
$M
31 DEC
2016
$M
30 JUN
2017
$M
Opening difference 6 (55) (55)
Initial differences on new hedges(1) – –
Volumes expired and amortised (1) 4 8
Recalibration for future price
estimates and time– 55 53
Closing difference 4 4 6
Initial recognition difference
An initial recognition difference arises when the modelled value
of an electricity hedge differs from the transaction price (which
is the best evidence of fair value). This difference is accounted
for by recalibrating the valuation model by a fixed percentage to
result in a value at inception equal to the transaction price. This
recalibration is then applied to future valuations over the life of
the contract.
The resulting difference shown in the table reflects potential
future gains or losses yet to be recognised in the income
statement over the remaining life of the contract.
27

THE NUMBERS Group financial statements for the six months ended 31 December 2017
MERIDIAN ENERGY LIMITED Interim Report for the six months ended 31 December 2017

26

Independent review report to the
shareholders of Meridian Energy Limited.
We have reviewed the condensed interim financial statements
of Meridian Energy Limited and its subsidiaries (‘the Group’)
which comprise the balance sheet as at 31 December 2017,
and the comprehensive income statement, changes in equity
and cash flows for the six month period ended on that date,
and other explanatory information on pages 10 to 28.
This report is made solely to the company’s shareholders, as a
body. Our review has been undertaken so that we might state
to the company’s shareholders those matters we are required
to state to them in a review report and for no other purpose.
To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the company’s
shareholders as a body, for our engagement, for this report,
or for the opinions we have formed.
Board of Directors’ Responsibilities
The Board of Directors are responsible on behalf of the Group
for the preparation and fair presentation of the condensed
interim financial statements, in accordance with NZ IAS 34
Interim Financial Reporting and IAS 34 Interim Financial
Reporting and for such internal control as the Board of
Directors determine is necessary to enable the preparation
and fair presentation of the condensed interim financial
statements that are free from material misstatement,
whether due to fraud or error.
The Board of Directors are also responsible for the publication
of the condensed interim financial statements, whether in
printed or electronic form.
Our Responsibilities
The Auditor-General is the auditor of the Group pursuant to
section 5(1)(f ) and section 14 of the Public Audit Act 2001.
Pursuant to section 32 of the Public Audit Act 2001, the
Auditor-General has appointed Trevor Deed of Deloitte
Limited to carry out an annual audit of the Group.
Our responsibility is to express a conclusion on the
condensed interim financial statements based on our review.
We conducted our review in accordance with NZ SRE 2410
Review of Financial Statements Performed by the Independent
Auditor of the Entity (‘NZ SRE 2410’). NZ SRE 2410 requires us
to conclude whether anything has come to our attention that
causes us to believe that the condensed interim financial
statements, taken as a whole, are not prepared, in all
material respects, in accordance with NZ IAS 34 Interim
Financial Reporting and IAS 34 Interim Financial Reporting.
As the auditor of Meridian Energy Limited, NZ SRE 2410
requires that we comply with the ethical requirements
relevant to the audit of the annual financial statements.
A review of the condensed interim financial statements
in accordance with NZ SRE 2410 is a limited assurance
engagement. The auditor performs procedures, primarily
consisting of making enquiries, primarily of persons
responsible for financial and accounting matters, and
applying analytical and other review procedures.
The procedures performed in a review are substantially
less than those performed in an audit conducted in
accordance with International Standards on Auditing
(New Zealand). Accordingly we do not express an audit
opinion on those financial statements.
We did not evaluate the security and controls over the
electronic publication of the condensed interim financial
statements.
In addition to this review and the audit of the Group annual
financial statements, we have carried out other engagements
consisting of a carbon emissions audit, global reporting
initiative analysis, audit of the securities registers, assurance
engagements in relation to the vesting of the executive long
term incentive plan, the solvency return of Meridian Energy
Limited’s captive insurance company and trustee reporting,
which are compatible with the independence requirements of
the Auditor-General, which incorporate the independence
requirements of the External Reporting Board. These services
have not impaired our independence as auditor of the Group.
In addition, principals and employees of our firm deal with the
Group on arm’s length terms within the ordinary course of
trading activities of the Group. Other than these engagements
and arm’s length transactions, and in our capacity as auditor
acting on behalf of the Auditor-General, we have no
relationship with, or interests in, the Group.
Conclusion
Based on our review, nothing has come to our attention
that causes us to believe that the condensed interim
financial statements of the Group do not present fairly, in
all material respects, the financial position of the Group
as at 31 December 2017 and its financial performance and
cash flows for the six month period ended on that date in
accordance with NZ IAS 34 Interim Financial Reporting and
IAS 34 Interim Financial Reporting.
TREVOR DEED
for Deloitte Limited
On behalf of the Auditor-General
20 February 2018
WELLINGTON, NEW ZEALAND
E. Group structure and other
E1 Group structure
The following changes occurred in the six months:
On 25 May 2017, Meridian established Flux Federation Limited.
This entity is responsible for developing and licensing the
Powershop platform. On 1 July 2017, Powershop New Zealand
Limited sold the Powershop platform and supporting business
assets as well as its full shareholding in Powershop UK Limited to
Flux Federation Limited (a wholly owned subsidiary of Meridian).
E2 Commitments
Meridian has entered into an agreement for the purchase of
100% of the shares in GSP Energy Pty Ltd (GSP) for A$168 million
(before stamp duty and any purchase price adjustments). This
will settle on 29 March 2018.
E3 Contingent assets and liabilities
Other than the guarantees disclosed in the 30 June 2017 financial
statements, there were no contingent assets or liabilities at
31 December 2017 (31 Dec 2016: nil, 30 Jun 2017: nil).
E4 Subsequent events
There are no subsequent events other than dividends declared on
20 February 2018. Refer to note C3 Dividends for further details.
E5 Changes in financial reporting
standards
In the current period, Meridian has adopted all mandatory new and
amended standards. The application of these new and amended
standards has had no material impact on the amounts recognised
or disclosed in the financial statements (except in the case of
NZ IFRS 15 Revenue from Contracts with Customers—the details
of which are disclosed in significant matters on page 16).
Meridian is not aware of any standards in issue but not yet
effective (other than those listed below) which would materially
impact on the amounts recognised or disclosed in the financial
statements. Meridian intends to adopt when they become
mandatory.
NZ IFRS 9 Financial Instruments (effective 1 January 2018)—
NZ IFRS 9 will be effective in Meridian’s 2019 financial year.
This standard requires all financial assets to be measured at
fair value, unless the entity’s business model is to hold the
assets to collect contractual cash flows, and contractual terms
give rise to cash flows that are solely payments of interest and
principal, in which case they are measured at amortised cost.
The standard also broadens the eligibility for hedge accounting
as it introduces an objectives-based test that focuses on the
economic relationship between hedged items and hedging
instruments. Meridian has not yet completed its assessment
as to whether currently fair valued financial instruments could
be hedge accounted; therefore the full extent of this standard
cannot yet be determined. However, there is no balance sheet
change, merely a potential shift from the income statement to
other comprehensive income.
NZ IFRS 16 Leases (effective 1 January 2019)—NZ IFRS 16 will be
effective in Meridian’s 2020 financial year. It will fundamentally
change the way leases are accounted for by lessees. Currently,
leases are accounted for as either on-balance-sheet finance
leases or off-balance-sheet operating leases (by lessees). Under
the new accounting standard, this will be replaced by a single,
on-balance-sheet model for all leases, which is similar to the
current finance lease approach. The full impact of this standard
has not yet been fully assessed.
29

THE NUMBERS Group financial statements for the six months ended 31 December 2017
MERIDIAN ENERGY LIMITED Interim Report for the six months ended 31 December 2017

28

Registered office
Meridian Energy Limited
33 Customhouse Quay
Wellington Central
Wellington 6011
PO Box 10840
The Terrace
Wellington 6143
T +64 4 381 1200
F +64 4 381 1201
Offices
Quad 7, Level 2
6 Leonard Isitt Drive
Auckland Airport
Auckland 2022
PO Box 107174
Auckland Airport
Auckland 2150
T +64 9 477 7800
287-293 Durham Street North
Christchurch Central
Christchurch 8013
PO Box 2146
Christchurch 8140
T +64 3 357 9700
Corner of Market Place and
Mackenzie Drive
Twizel 7901
Private Bag 950
Twizel 7944
T +64 3 435 9393
Australian registered office
Meridian Energy
Australia Pty Limited
Level 15
357 Collins Street
Melbourne VIC 3000
Australia
T +61 3 8370 2100
F +61 3 9620 5235
Share Registrar New Zealand
Computershare
Investor Services Limited
Level 2, 159 Hurstmere Road
Takapuna, Auckland 0622
Private Bag 92119
Victoria Street West
Auckland 1142
T +64 9 488 8777
F +64 9 488 8787
enquiry@computershare.co.nz
investorcentre.com/nz
Share Registrar Australia
Computershare
Investor Services Pty Limited
Yarra Falls
452 Johnston Street
Abbotsford VIC 3037
GPO Box 3329
Melbourne VIC 3001
Australia
T 1800 501 366
(within Australia)
T +61 3 9415 4083
(outside Australia)
F +61 3 9473 2500
enquiry@computershare.co.nz
Auditor
Trevor Deed, Partner
On behalf of the Office
of the Auditor-General
Deloitte
PO Box 1990
Wellington 6140
New Zealand
Banker
Westpac Wellington
New Zealand
Directors
Chris Moller, Chair
Peter Wilson, Deputy Chair
Mark Cairns
Jan Dawson
Mary Devine
Anake Goodall
Stephen Reindler
Mark Verbiest
Executive Team
Neal Barclay, Chief Executive
Paul Chambers
Jacqui Cleland
Ed McManus
Sandra Pickering
Mike Roan
Jason Stein
Guy Waipara
If you have any questions
or comments, please email
investors@meridianenergy.co.nz
Directory.
MERIDIAN ENERGY LIMITED Interim Report for the six months ended 31 December 2017

30

t
INTERIM REPORT
FOR THE SIX
MONTHS ENDED
31 DECEMBER 2017
Printed with mineral-oil-free, soy-based
vegetable inks on paper produced using
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practices and principles. Please recycle.
ISSN 1173-6275
meridian.co.nz

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APPENDIX 7 – NZSX Listing Rules
Number of pages including this one
(Please provide any other relevant
NZSX Listing Rule 7.12.2. For rights, NZSX Listing Rules 7.10.9 and 7.10.10. details on additional pages)
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Full name
of Issuer
Name of officer authorised to
Authority for event,
make this notice
e.g. Directors' resolution
Contact phone
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numbernumber
Date
Nature of event
BonusIf ticked,
Rights Issue
Tick as appropriate
Issue
state whether:Taxable
/ Non TaxableConversionInterestRenouncable
Rights IssueCapitalCallDividend
If ticked, stateFull
non-renouncable
change







whether:
Interim







YearSpecialDRP Applies
EXISTING securities affected by this
If more than one security is affected by the event, use a separate form.
Description of theISIN
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If unknown, contact NZX
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provide an
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ORexplanation
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ranking
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Source of
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Payment
(does not include any excluded income)
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(only applicable to listed PIEs)
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Amount per security
Currencydividendin dollars and cents
details -
NZSX Listing Rule 7.12.7
Total monies
TaxationAmount per Security in Dollars and cents to six decimal places
In the case of a taxable bonusResident
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issue state strike priceWithholding Tax(Give details)
Foreign
FDP Credits
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Timing
(Refer Appendix 8 in the NZSX Listing Rules)
Record Date 5pmApplication Date
For calculation of entitlements -Also, Call Payable, Dividend /
Interest Payable, Exercise Date,
Conversion Date. In the case
of applications this must be the
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Notice DateAllotment Date
Entitlement letters, call notices,For the issue of new securities.
conversion notices mailedMust be within 5 business days
of application closing date.
OFFICE USE ONLY
Ex Date:
Commence Quoting Rights:Security Code:
Cease Quoting Rights 5pm:
Commence Quoting New Securities:Security Code:
Cease Quoting Old Security 5pm:
EMAIL: announce@nzx.com
Notice of event affecting securities
1
Meridian Energy Limited
Jason SteinDirectors' resolution
+64 4 381 12002122018
NZMELE0002S7
In dollars and cents
Retained Earnings
$0.0538
Ordinary Shares
Enter N/A if not
applicable
NZ Dollars$0.0084
$137,889,400
Date Payable
17 April, 2018
$$0.0054$0.0184
29 March, 201817 April, 2018
Not ApplicableNot Applicable

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APPENDIX 7 – NZSX Listing Rules
Number of pages including this one
(Please provide any other relevant
NZSX Listing Rule 7.12.2. For rights, NZSX Listing Rules 7.10.9 and 7.10.10. details on additional pages)
For change to allotment, NZSX Listing Rule 7.12.1, a separate advice is required.
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NZMELE0002S7
EMAIL: announce@nzx.com
Notice of event affecting securities
1
Meridian Energy Limited
Jason SteinDirectors' resolution
+64 4 381 12002122018
Enter N/A if not
applicable
In dollars and cents
Retained Earnings
$0.0244
NZ Dollars$0.0000
$62,537,200
Date Payable
17 April, 2018
$$0.0081$0.0000
29 March, 201817 April, 2018
Not ApplicableNot Applicable

---

MERIDIAN ENERGY LIMITED
2018 INTERIM RESULTS PRESENTATION
.

2
•
 
Challenges of two significant dry periods in 2017
•
 
749 GWH of new Australian generation capacity
•
 
Retail platform decision in April 2018
•
 
New government’s target of 100% renewable
generation by 2035
•
 
Exec changes: Julian Smith and Mike Roan
Meridian Energy Limited Interim Results 2018
Opening comments
.

Financial snapshot
.
Meridian Energy Limited Interim Results 2018
3
EBITDAF
3

$329m
Underlying
NPAT
2

$104m
Dividend
declared
7.82cps
NZ energy
margin
4

$452m
Aus energy
margin
$57m
Operating
cash flow
$162m
Operating
Costs
$127m
Transmission
Costs
$63m
NPAT
1

$109m
4
%

h
i
g
h
e
r

7
%

l
o
w
e
r

2
1
%

l
o
w
e
r

1
%

h
i
g
h
e
r

2
0
%

l
o
w
e
r

5
%

l
o
w
e
r

7
%

l
o
w
e
r

1
9
%

h
i
g
h
e
r

1
3
%

l
o
w
e
r

1.
 
Net profit after tax
2.
 
Net profit after tax adjusted for the effects of of non-cash fair value movements and other one-off items
3.
 
Earnings before interest, tax, depreciation, amortisation, changes in fair value of hedges and other significant items
4.
 
See definition on page 32

Meridian Energy Limited Interim Results 2018
4
OUR MARKETS

Meridian Energy Limited Interim Results 2018
5
1.1% demand growth in the last 12 months

•
 
Higher irrigation load
•
 
Excluding irrigation regions, growth is
around 0.7% in the last 12 months
•
 
Growth occurred in all urban areas
•
 
Most regions also recorded growth
•
 
Notable exception was the South Island’s
West Coast (OceanaGold Reefton mine closure in December 2016)
New Zealand
.
41.2k
40.7
+70
+53
+127
+145
+32
+5
Calendar year
2016
Northland/
Auckland
Waikato Christchurch Canterbury Otago/
Southland
Rest of NZ Calendar year
2017
GWh
MOVEMENT IN NATIONAL DEMAND
SOUTH
CANTER-
BURY
+7%
Source: Electricity Authority

Variable rainfall •
 
Central South Island rainfall well below
average in 2017
•
 
Upper North Island rainfall well above
average in 2017
•
 
Higher North Island hydro generation in
1H FY18
Ex-cyclone Fehi impacts in early February
•
 
Fehi inflows have provided lift in South
Island storage (largest Waitaki rain event in five years)
•
 
However storage levels still below
average
•
 
Reduction in irrigation demand
New Zealand
.
Meridian Energy Limited Interim Results 2018
6
Source: NIWA
Source: NIWA
SOIL MOISTURE ANOMALY
7 DECEMBER 2017
2 FEBRUARY 2018
J
ul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18
GWH
NATIONAL STORAGE BY ISLAND
North Island Actual
North Island Average
South Island Actual
South Island Average
Source: NZX, Meridian

Meridian Energy Limited Interim Results 2018
7
Wholesale prices

•
 
Higher thermal utilisation as wholesale
prices rose to signal hydro scarcity
•
 
No risk to security of supply from lower
South Island hydro generation
•
 
Fehi inflows have seen reduced spot and
forward wholesale prices
New Zealand
.
Source: Meridian
50
60
70
80
90
100
110
Q1 2018 Q3 2018 Q1 2019 Q3 2019 Q1 2020 Q3 2020 Q1 2021 Q3 2021
$/MWh
BENMORE ASX FUTURES SETTLEMENT PRICE
30 June 2017
29 September 2017
30 November 2017
29 December 2017
31 January 2018
7 February 2018

Electricity price review •
 
Draft terms of reference published and
consultation has occurred
•
 
Scope is broad - “whether the price paid
by end-consumers for electricity is fair and equitable”
•
 
Will consider the entire electricity
market from generation, through transmission and distribution to retail
•
 
MBIE is expected to report back to the
Minister of Energy in "early 2019”
•
 
Separately, a winter energy payment to
superannuitants and beneficiaries has been announced
New Zealand
.
Meridian Energy Limited Interim Results 2018
8
KEY POINTS OF MERIDIAN’S SUBMISSION •
 
NZ market is delivering fair, equitable, efficient
and sustainable outcomes for consumers

•
 
the review should focus on:
•
 
future regulatory settings (bearing in mind new technologies and new entrants to sector)
•
 
review of the Low Fixed Charge Tariff Option regulations (a source of inequitable outcomes)
•
 
distribution pricing (driving inefficient and inequitable outcomes)
•
 
the review needs to ensure that outcomes are fair,
equitable, efficient and environmentally sustainable
•
 
steps to improve regulatory settings need to be
progressed alongside broader social policy to ensure the best outcomes for consumers

Australia
.
Meridian Energy Limited Interim Results 2018
9
National energy guarantee •
 
State support is mixed
•
 
Further analysis on multiple fronts
•
 
Deadline for final agreement is mid 2018
ACCC report
•
 
Preliminary report has concerns about
NEM operation and affordability
•
 
Final report with reform
recommendations in June 2018
Thwaites review (Victoria)
•
 
Victorian government is still considering
the review panel’s final report
•
 
Appears broad support for the nine
recommendations which do not advocate re-regulation and these may be advanced first

Meridian Energy Limited Interim Results 2018
10
OUR OPERATIONS

NZ customers
.
Meridian Energy Limited Interim Results 2018
11
Higher customer numbers •
 
Growth of 3% in the last 6 months
12% higher sales volume, 9% excl Agri
•
 
In all segments except Residential
•
 
Marginal reduction in average price with
higher weighting of agricultural and corporate load
Commercial solar
•
 
MoU with Kiwi Property to install 650kW
of solar across four major shopping malls
Electric vehicles
•
 
New EV tariff launched in 6 regions: 20%
discount and one year's free charging
•
 
On target to convert 50% of Meridian’s
passenger fleet to electric by June 2018
CUSTOMER SALES

CUSTOMER
NUMBERS
SALES
VOLUME
(GWH)
AVERAGE
PRICE
1
($/MWH)
1H FY2018
Residential 188,698 720 Small medium business
36,918
477
Agricultural 37,741 606 Large business
17,159
224
Total Residential/SMB
280,516
2,027
$118
Corporate 1,880 1,114 $81 1H FY2017 Residential 185,871 748 Small medium business
34,624
438
Agricultural 36,582 480 Large business
16,769
220
Total Residential/SMB
273,846
1,886
$121
Corporate 1,868 911 $84
1.
 
Including distribution costs, discounts and doubtful debts

Meridian Energy Limited Interim Results 2018
12
Segment EBITDAF decline of $6m (11%) •
 
Higher customers sales: revenue and
purchase costs both up; energy margin largely flat
•
 
Promotional investment to support this
customer growth
•
 
Stable cost to serve on a per customer
basis
Average market churn rates remain high
•
 
Meridian Retail churn remains below
industry averages
•
 
Powershop has higher than market
average churn, reflecting customer demographics
NZ customers
.
49
55
+22
-23
-1
-4
EBITDAF 31
Dec 16
Contracted
sales
Cost to
supply
contracted
sales
Other
revenue
Operating
expenses
EBITDAF 31
Dec 17
$M
MOVEMENT IN RETAIL SEGMENT EBITDAF
ENERGY
MARGIN
-$1M
7.0%
12.7%
7.9%
11.7%
22.2%
13.0%
Meridian Powershop Industry Meridian Powershop Industry
%
ICP CHURN
MOVE-IN SWITCH
TRADER SWITCH
Source: Electricity Authority
Source: Meridian

123%
102%
44%
57%
61% 61%
93%
140%
153%
62%
77%
70%
65%
Jan-17 Mar-17 May-17 Jul-17 Sep-17 Nov-17 Jan-18
%
COMBINED CATCHMENT INFLOWS
% of monthly average
Two dry periods in close succession •
 
Four months of below average inflows
prior to July 2017 with each of the last four months also below average
•
 
Resulted in a 1H FY18 reduction in
physical generation (16% lower) and increase in acquired generation (162% higher)
•
 
Dry and warm South Island temperatures
resulted in low seasonal snow storage and 30-year high melt
•
 
Long-term climate predictions are for
lower snow amounts, rising snowlines, higher winter and overall inflows
NZ wholesale and generation
.
Meridian Energy Limited Interim Results 2018
13
Source: Meridian
Source: Meridian
100%

Meridian Energy Limited Interim Results 2018
14
Segment EBITDAF +$6M (20%) •
 
Higher retail sales volume (+20%)
•
 
Average generation price +18%, greater
exposure to increasing merchant prices
Generation acquisitions
•
 
GSP ($168M ex stamp duty, effective 1 April
2018)
•
 
Hume, Burrinjuck and Keepit hydro
•
 
Seasonal generation, expected annual output >280GWH
•
 
Purchase now approved under Australian Foreign Acquisitions and Takeover Act
•
 
PPA’s (466GWH from mid 2018 into 2019)
•
 
Kiamal solar, Crudine Ridge and Salt Creek wind
•
 
Tenure to 2030
Australia
.
36
30
+17
+7
-15
-1
-2
EBITDAF 31
Dec 16
Contracted
sales
Generation
revenue
Cost to
supply
contracted
sales
Transmission
expense
Operating
expenses
EBITDAF 31
Dec 17
$M
MOVEMENT IN AUSTRALIA SEGMENT EBITDAF
ENERGY
MARGIN
+$9M
63,673
77,970
90,631
100,524
101,460
Dec-15 Jun-16 Dec-16 Jun-17 Dec-17
AUSTRALIAN CUSTOMERS
Source: Meridian
Source: Meridian

•
 
19,500 nPower ICP’s through energy only
soft launch
•
 
White label offers launched
•
 
Dual fuel functionality now delivered,
ready for full launch
•
 
Customer uptake dependent on
nPower’s sales and marketing
Powershop UK
.
Meridian Energy Limited Interim Results 2018
15

Meridian Energy Limited Interim Results 2018
16
Future HVDC changes

•
 
Transpower
1
have signalled future HVDC
revenue will fall around $50m per annum
•
 
From lower assumed WACC in the next
regulatory period and an end to historic recovery of underpayments
•
 
Analysts’ estimates put the reduction to
Meridian’s costs at around ~$30M pa from today’s levels
•
 
Transpower’s forecast is a base case,
excluding major HVDC capex that may be required:
•
 
Undersea cable replacement (detailed investigation underway)
•
 
4
th
cable (estimates range $55m-$150m)
•
 
Changes from the TPM review may occur

New Zealand transmission
.
Source: Transpower
1
1.
 
Transpower Integrated Transmission Plan Narrative 2017
2%
-2%
2%
-4%
-28%
-2% -2%
-2% -2%
-30% -26% -22% -18% -14% -10% -6% -2% 2%
0
20
40
60
80
100
120
140 160 180
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
$M
TRANSPOWER HVDC REVENUE FORECAST
HVDC revenue
Year on year change

Meridian Energy Limited Interim Results 2018
17
FINANCIAL PERFORMANCE

Meridian Energy Limited Interim Results 2018
18
1% growth in ordinary dividends declared •
 
Interim ordinary dividend declared of 5.38
cps, 88% imputed
•
 
Capital management interim special
dividend of 2.44 cps, unimputed
•
 
Brings capital management distributions
to $375M since the programme began in August 2015
Dividends
.
INTERIM DIVIDEND DECLARED
AMOUN
T
CPS
IMPUTATION
%
FY2018
Ordinary dividends
5.38
88%
Capital management special dividend
2.4
4
0%
T
o
t
a
l

7
.
8
22
FY2017 Ordinary dividends
5.33
88%
Capital management special dividends
2.4
4
0%
T
o
t
a
l

7
.
7
77
4.19
4.80
5.10
5.33
5.38
1.40
2.44
2.44
2.44
4.19
6.20
7.54
7.77
7.82
2013 2014 2015 2016 2017
CPS
Six months ended 31 December
INTERIM DIVIDEND DECLARED
Ordinary dividend
Special dividend
+1%
Source: Meridian

Meridian Energy Limited Interim Results 2018
19
$25M (7%) decrease in EBITDAF from: Business specific changes •
 
Higher business sales
•
 
Higher corporate sales, lower average price
from timing of a large customer signing
•
 
Some cost expansion to support this
customer growth
•
 
Some transmission cost relief
•
 
Tiwai price increase from 1 January 2017
•
 
Growth in Australian and UK earnings
Market and environmental impacts
•
 
1,100 GWH less physical generation leading
to more acquired generation
•
 
Higher market prices on derivative, physical
and acquired generation sales
•
 
Higher irrigation sales
•
 
Higher market costs to purchase customer
load
447
480
509
533
509
477
474
500
480
924
954
1009
1,013
2014 2015 2016 2017 2018
$M
Financial Year ended 30 June
ENERGY MARGIN
Interim
Final half-year
Earnings
.
268
324
332
354
329
317
294
318
299
585
618
650
653
2014 2015 2016 2017 2018
$M
Financial Year ended 30 June
EBITDAF
Interim
Final half-year
Source: Meridian Source: Meridian

24
23
19
19
17
34
37
31
28
58
61
50
47
2014 2015 2016 2017 2018
$M
Financial Year ended 30 June
STAY IN BUSINESS CAPEX
Interim
Final half-year
Managing cost pressures •
 
$5M (4%) increase in operating costs,
offset by lower Transmission costs
•
 
Promotional investment to support
customer growth in NZ
•
 
Multi year Ōhau and Te Āpiti
refurbishment programmes are adding to operating costs ($2M in 1H FY18)
•
 
Continued cost discipline in other areas of
the business
Costs
.
Meridian Energy Limited Interim Results 2018
20
Source: Meridian Source: Meridian
40
48
18
25
-4
39
44
16
26
-3
NZ Wholesale
NZ Retail
Australia
Other
Inter-segment
$M
OPERATING COSTS
1H FY18
1H FY17

Meridian Energy Limited Interim Results 2018
21
Land sale gains, small impacts from fair value movements in 1H FY18 •
 
$2M (2%) increase depreciation from FY17
asset revaluations
•
 
$3M (8%) increase in net financing costs
from higher net debt
•
 
$6M gain on sale of surplus land
•
 
$2M reduction in NPBT from fair value of
electricity hedges from relatively stable forward electicity prices
•
 
$2M reduction in NPBT from fair value of
treasury instruments from relatively stable forward interest rates
•
 
$16M (13%) decrease in NPAT
•
 
$27M (21%) decrease in underlying NPAT,
largely from lower EBITDAF
Below EBITDAF
.
83
115
122
131
104
112
94
111
87
195
209
233
218
2014 2015 2016 2017 2018
$M
Financial Year ended 30 June
UNDERLYING NPAT
Interim
Final half-year
117 117
104
125
109
113
130
81
72
230
247
185
197
2014 2015 2016 2017 2018
$M
Financial Year ended 30 June
NET PROFIT AFTER TAX
Interim
Final half-year
Source: Meridian
Source: Meridian

Meridian Energy Limited Interim Results 2018
22
CLOSING COMMENTS
.

•
 
Slow start to 2H FY18 with continued
lower physical generation and higher acquired generation
•
 
Lake storage, while still below average,
has lifted significantly, allowing Meridian more trading flexibility
•
 
January 2018 saw another month of
higher customer numbers
•
 
Since October 2017, Powershop and
Meridian have been leading the market in customer growth
Closing comments
.
Meridian Energy Limited Interim Results 2018
23

Questions
.

Meridian Energy Limited Interim Results 2018
25
ADDITIONAL INFORMATION

WHOLESALE RETAIL AUSTRALIA
OTHER/
UNALLOCATED
INTER-
SEGMENT
$M 1H
FY18
1H
FY17
1H
FY18
1H
FY17
1H
FY18
1H
FY17
1H
FY18
1H
FY17
1H
FY18
1H
FY17
Energy margin
360 392 92 93 57 48 - - - -
Other revenue
2 3 5 6 - - 8 4 (5) (4)
Dividend revenue
- - - - - - - 1 - (1)
Energy transmission expense (60) (64) - - (3) (2) - - - - Operating expenses
(40)
(39)
(48)
(44)
(18)
(16)
(25)
(26)
4
3
E
B
I
T
D
A
F

2
6
2

2
9
2

4
9

5
5

3
6

3
0

(
1
7
)

(
2
1
)

(
1
)

(
2
)

Segment results
.
Meridian Energy Limited Interim Results 2018
26
1H FY17 restated for segment changes •
 
Flux Federation (Powershop platform development) now included in other
segment (previously retail segment)
•
 
Powershop UK now included in other segment (previously international segment)
•
 
Small revenue and expense changes for IRFS 15

1,770
1,880
2,001
1,886
2,027
1,116
1,113
1,163
911
1,114
2,886
2,993
3,164
2,797
3,141
2013 2014 2015 2016 2017
GWH
Six months ended 31 December
RETAIL SALES VOLUME
Residential, SMB, Agri
Corporate
108
104
102
103
103
114
116
117
115
117
55
56
56
59
62
277
276
275
277
282
Jun-14 Jun-15 Jun-16 Jun-17 Dec-17
ICP (000)
NEW ZEALAND CUSTOMER NUMBERS
Meridian North Island
Meridian South Island
Powershop
NZ retail
.
Meridian Energy Limited Interim Results 2018
27
Customers •
 
3% increase in customers since June 17
Residential, SMB, Agri segment
•
 
7% increase in overall volumes
•
 
4% decrease in residential
•
 
9% increase in SMB, 2% increase in large
business volumes
•
 
26% increase in agri volumes, irrigation-
driven
•
 
3% decrease in average sales price
Corporate segment
•
 
22% increase in volumes
•
 
4% decrease in average sales price
Source: Meridian Source: Meridian