NZME Full Year Results

NZME Limited
Results for announcement to the market

Reporting Period 12 months to 31 December 2017
Previous Reporting Period 12 months to 31 December 2016

Amount (000s) Percentage change
Revenue from ordinary
activities
$NZ 390,688 -4.2%
Profit (loss) from ordinary
activities after tax
attributable to security
holder
$NZ 20,885 141.3%
Net profit (loss)
attributable to security
holders
$NZ 20,885 -72.0%

Final Dividend Amount per security Imputed amount per
security
NZ 6.0 cents NZ 2.3333 cents
i

i A supplementary dividend of NZ 1.0588 cents per security will be payable to shareholders who are not tax resident
in New Zealand and who hold less than 10% of the shares in NZME Limited.

Record Date 18 April 2018
Dividend Payment Date 3 May 2018

Comments: A brief For the 12 months to 31 December 2017, NZME
Limited’s reported profit from ordinary activities after tax
was NZ$ 20.9 million compared to a loss of NZ$50.6
million in the comparative period. The loss from
ordinary activities for the 12 months to 31 December
2016 contained some significant non-repeating tax
adjustments in relation to the settlement of historical
matters with the IRD.

The net profit after tax for the year to 31 December
2017 of NZ$ 20.9 million is down 72% from the net
profit after tax of NZ$ 74.5 million for the year to 31
December 2016 (which included a non-controlling
interest profit of NZ$ 13.9 million and the impact of the
demerger from HT&E Limited (previously APN News &
Media Limited) in June 2016).

Net assets per share as at 31 December 2017 was NZ$
1.47 compared to NZ$ 1.46 as at 31 December 2016.

Net tangible assets per share as at 31 December 2017
was NZ$ (0.21) compared to NZ$ (0.23) as at 31
December 2016


Refer to the attached audited Consolidated Financial Statements for the year ended
31 December 2017 for NZME Limited and its subsidiaries and the Results
Presentation for a more detailed analysis and explanation.

---

Page 1
Consolidated Financial Statements
NZME Limited
for the year ended 31 December 2017

Page 2
CONTENTS
CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2017
Directors’ Statement
3
Consolidated Income Statement
4
Consolidated Statement of Comprehensive Income
5
Consolidated Balance Sheet
6
Consolidated Statement of Changes in Equity
7
Consolidated Statement of Cash Flows
8
Notes to the Consolidated Financial Statements*
Basis of Preparation
9
Group Performance
11
Operating Assets and Liabilities
17
Capital Management
26
Taxation
38
Group Structure and Investments in Other Entities
41
Other Notes
46
Independent Auditor’s Report
49
*In an attempt to make these financial statements easier to read, the notes to the financial statements
have been grouped into seven sections; aimed at grouping items of a similar nature together. The Basis of
Preparation section presents a summary of material information and general accounting policies that are
necessary to understand the basis on which these consolidated financial statements have been prepared.
Accounting policies specific to a particular note are included in that note and are shaded for ease of reference.
Key judgments and estimates relevant to a particular note are also included in the relevant note, and are
clearly marked as such. A summary of the key judgments and estimates is also included under the Basis of
Preparation section on pages 9 to 10.

Page 3
DIRECTORS’ STATEMENT
The directors are pleased to present the consolidated financial
statements of NZME Limited (the “Company”) and its subsidiaries
(together the “Group”) for the year ended 31 December 2017, incorporating
the consolidated financial statements and the auditor’s report.
The directors are responsible, on behalf of the Company, for presenting
these consolidated financial statements in accordance with applicable
New Zealand legislation and generally acceptable accounting practices
in New Zealand in order to present consolidated financial statements
that present fairly, in all material respects, the financial position of the
Group as at 31 December 2017 and the results of the Group’s operations
and cash flows for the year then ended.
The consolidated financial statements for the Group as presented on
pages 2 to 48 are signed on behalf of the Board of Directors, and are
authorised for issue on the date below.
For and on behalf of the Board of Directors
Peter Cullinane
Director
Carol Campbell
Director
Date: 21 February 2018

Page 4
CONSOLIDATED INCOME STATEMENT
for the year ended 31 December 2017
NOTE
2017
$’000
2016
$’000
CONTINUING OPERATIONS
Revenue2.1
390,688
4 07,8 5 6
Finance and other income 2.1
926
2,340
Total revenue and other income
2.1
391,614
410,196
Expenses from operations before finance costs, depreciation,
amortisation
2.2.1
(332,839)
(363,553)
Depreciation & amortisation2.2.2
(24,946)
(23,845)
Finance costs2.2.3
(4,497)
(9,300)
Profit / (loss) from continuing operations before income tax
expense
29,332
(13,498)
Income tax expense5.1
(8,447)
(64,050)
Profit / (loss) from continuing operations for the year20,885
(50,552)
DISCONTINUED OPERATIONS
Profit / (loss) after tax from discontinued operations
-
125,095
Profit / (loss) for the year

20,885
74,54 3
PROFIT / (LOSS) FOR THE YEAR IS ATTRIBUTABLE TO:
Owners of the Company
20,885
60,618
Non-controlling interests
-
13,925
Profit / (loss) for the year

20,885
74,54 3
NOTE
CENTS
CENTS
Earnings per share from continuing operations
attributable to the ordinary shareholders of the company
Basic / diluted earnings per share2.3
1 0.7
(28.0)
Earnings per share from profit for the year (continuing
and discontinued operations) attributable to the ordinary
shareholders of the Company
Basic / diluted earnings per share2.3
1 0.7
30.9
The above Consolidated Income Statement should be read in conjunction with the accompanying notes.

Page 5
The above Consolidated Statement of Comprehensive Income should be read in conjunction with the
accompanying notes.
NOTE
2017
$’000
2016
$’000
Profit for the year20,885
74,543
OTHER COMPREHENSIVE INCOME
Items that may be reclassified to profit or loss
Exchange differences on translation of foreign operations4.2
(15)
44,846
Items that will not be reclassified to profit or loss
Exchange and other differences applicable
to non-controlling interests
-
(14,683)
Other comprehensive income, net of tax(15)
30,163
Total comprehensive income20,870
104,706
TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO:
Owners of the Company
20,870
105,464
Non-controlling interests
-
(758)
20,870
104,706
TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO OWNERS
OF THE COMPANY:
Continuing operations
20,870
(10,038)
Discontinued operations
-
115,502
20,870
105,464
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 December 2017

Page 6
NOTE
2017
$’000
2016
$’000
CURRENT ASSETS
Cash and cash equivalents4.7
9,570
16,242
Trade and other receivables3.3
55,323
53,631
Inventories
1,926
2,226
Total current assets66,819
72,099
NON-CURRENT ASSETS
Intangible assets3.1
330,553
329,776
Property, plant and equipment3.2
64,725
75,677
Other financial assets6.3.2
5,988
5,988
Total non-current assets401,266
411,441
Total assets468,085
483,540
CURRENT LIABILITIES
Trade and other payables3.4
56,894
66,379
Current tax provision
7, 5 6 7
2,800
Total current liabilities64,461
69,179
NON-CURRENT LIABILITIES
Trade and other payables3.4
13,565
13,423
Interest bearing liabilities4.5
99,78 8
112,168
Deferred tax liabilities5.2
1,239
3,211
Total non-current liabilities114,592
128,802
Total liabilities179,053
197,9 8 1
Net assets289,032
285,559
EQUITY
Share capital4.1
360,363
360,363
Reserves4.2
2,385
(5,198)
Retained earnings
(73,716)
(69,606)
Total equity289,032
285,559
CONSOLIDATED BALANCE SHEET
as at 31 December 2017
The above Consolidated Balance Sheet should be read in conjunction with the accompanying notes.

Page 7
— Attributable to owners of the Company —
NOTESHARE
CAPITAL
$’000
RESERVES
$’000
RETAINED
EARNINGS
$’000
TOTAL
$’000
NON-CON-
TROLLING
INTERESTS
$’000
TOTAL
EQUITY
$’000
BALANCE AT 1 JANUARY 2016
360,363(34,992)104,584
429,955
201,869
631,824
Profit for the year--60,618
60,618
13,925
74 ,5 4 3
Other comprehensive
income
-44,846-
44,846
(14,683)
30,163
TOTAL COMPREHENSIVE
INCOME
-44,84660,618
105,464
(758)
104,706
Transfer from asset
revaluation reserve
4.2-(464)464
-
-
-
Transfer from transaction with
non-controlling interest reserve
4.2-(14,732)14,732
-
-
-
Dividends paid4.4--(198,118)
(198,118)
-
(198,118)
Transactions with
non-controlling interests
---
-
(3,630)
(3,630)
Share based payments expense4.2-144-
144
-
144
Acquisitions and
divestments of subsidiaries and
operations
--(51,886)
(51,886)
(197,481)
(249,367 )
Balance at
31 December 2016
360,363(5,198)(69,606)
285,559
-
285,559
BALANCE AT 1 JANUARY 2017
360,363(5,198)(69,606)
285,559
-
285,559
Profit for the year--20,885
20,885
-
20,885
Other comprehensive
income
-(15)-
(15)
-
(15)
TOTAL COMPREHENSIVE
INCOME
-(15)20,885
20,870
-
20,870
Dividends paid4.4--(18,622)
(18,622)
-
(18,622)
Supplementary dividends paid4.4--(2,785)
(2,785)
-
(2,785)
Tax credit on supplementary
dividends
--2,785
2 ,78 5
-
2 ,78 5
Transfer from transaction with
non-controlling interest reserve
4.2-6,373(6,373)
-
-
-
Share based payments expense4.2-1,225-
1,225
-
1,225
Balance at
31 December 2017
360,3632,385(73,716)
289,032
-
289,032
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2017

Page 8
NOTE
2017
$’000
2016
$’000
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers
3 8 7, 2 2 8
581,485
Payments to suppliers and employees
(336,626)
(488,558)
Dividends received
128
141
Interest received
139
223
Interest paid
(5,804)
(8,811)
Income taxes paid
(5,610)
(22,798)
Net cash inflows / (outflows) from operating activities
4.7
39,455
61,682
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for property, plant and equipment
(4,881)
(11,549)
Payments for intangible assets including software
(10,165)
(4,407)
Proceeds from sale of property, plant and equipment
27
2,251
Proceeds from divestment of subsidiaries, net of their cash, as part of
internal restructure
-
95,936
Payments for investment in other entities
-
(848)
Net loans repaid / (advanced) to other entities
-
2,278
Net cash inflows / (outflows) from investing activities(15,019)
83,661
CASH FLOWS FROM FINANCING ACTIVITIES
Loans advanced / (repaid) by related parties
-
(55,958)
Proceeds from borrowings4.5
84,000
54,000
Repayments of borrowings4.5
(96,486)
(127,242)
Payments for borrowing cost
-
(400)
Dividends paid to Company’s shareholders
(18,622)
(6,860)
Net payments to non-controlling interests
-
(3,630)
Net cash inflows / (outflows) from financing activities(31,108)
(140, 090)
Net increase / (decrease) in cash and cash equivalents(6,672)
5,253
Cash and cash equivalents at beginning of the year
16,242
11,065
Effect of exchange rate changes
-
(76)
Cash and cash equivalents at end of the year
4.7
9,570
16,242
The Consolidated Statement of Cash Flows includes cash flows from continuing and discontinued operations.
Refer to Note 6.1 and the Consolidated Financial Statements for the year ended 31 December 2016 (available on
the Company’s website) for further information on cash flows from discontinued operations.
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 31 December 2017

Page 9
1.1 REPORTING ENTITY AND
STATUTORY BASE
NZME Limited (NZX and ASX:NZM) is a
for-profit company limited by ordinary
shares which are publicly traded on
the NZX Main Board and the Australian
Securities Exchange as a Foreign Exempt
Listing. NZME Limited is incorporated and
domiciled in New Zealand. It is registered
under the Companies Act 1993 and is
a FMC reporting entity under Part 7 of
the Financial Markets Conduct Act 2013.
The entity’s registered office is 2 Graham
Street, Auckland, 1010, New Zealand.
NZME Limited (the “Company” or “Parent”)
and its subsidiaries’ (together the “Group”)
principal activity during the financial year
was the operation of an integrated media
and entertainment business.
1.2 GENERAL ACCOUNTING
POLICIES
These consolidated financial statements
have been prepared in accordance
with New Zealand Generally Accepted
Accounting Practice (“NZ GAAP”). They
comply with New Zealand equivalents
to International Financial Reporting
Standards (“NZ IFRS”) and other applicable
Financial Reporting Standards, as
appropriate for for-profit entities. The
consolidated financial statements also
comply with International Financial
Reporting Standards (“IFRS”). The
consolidated financial statements have
also been prepared in accordance with
Part 7 of the Financial Markets Conduct
Act 2013 and the NZX Listing Rules.
The principal accounting policies
adopted in the preparation of the
financial statements are either set out
below, or in the relevant note. These
policies have been consistently applied to
all the years presented, unless otherwise
stated. These consolidated financial
statements are presented for the Group
and were approved for issue by the Board
of Directors on 21 February 2018.
1.2.1 Basis of measurement
These financial statements have
been prepared under the historical
cost convention with the exception
of certain items for which specific
accounting policies are identified.
1.2.2 Comparatives
Certain prior period information has
been re-presented consistent with
current year disclosures to provide
more meaningful comparison.
1.2.3 Foreign currency translation
Functional and presentation currency
Items included in the financial statements
of each of the Group’s entities are
measured using the currency of the
primary economic environment in which
the entity operates (functional currency).
The consolidated financial statements
are presented in New Zealand dollars,
which is the Company’s functional and
the Group’s presentation currency, and
rounded to the nearest thousand, except
where otherwise stated.
1.2.4 Goods and Services Tax (‘GST’)
The income statement has been prepared
so that all components are stated exclusive
of GST. All items in the balance sheet
are stated net of GST, with exception
of receivables and payables, which
include GST invoiced. In the statement
of cash flows, receipts from customers
and payments to suppliers are shown
inclusive of GST.
1.3 SIGNIFICANT ACCOUNTING
ESTIMATES AND JUDGEMENTS
The preparation of the consolidated
financial statements requires the use
of certain significant judgements,
accounting estimates and assumptions,
including judgements, estimates and
assumptions concerning the future. The
estimates and assumptions are based on
historical experiences and other factors
that are considered to be relevant. The
resulting accounting estimates will by
definition, seldom equal the related
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1.0 BASIS OF PREPARATION

Page 10
actual results and are reviewed on an
ongoing basis. A list of those areas of
significant estimation or judgement
and a reference to the notes containing
further information is provided below:
1.4 SIGNIFICANT CHANGES
1.4.1 Demerger from APN News &
Media Limited (now HT&E Limited)
and tax settlement in the prior year
The Company completed its demerger
from APN News & Media Limited
(subsequently rebranded as HT&E Limited
(“HT&E)) on 29 June 2016, marking the
creation of a standalone New Zealand
Group focused on the operation of
an integrated print, radio and digital
media and entertainment business. On
23 June 2016, the Company and HT&E
reached a binding heads of agreement
with the Inland Revenue Department
(“IRD”) to settle the Mandatory Convertible
Note transaction, the Branch financing
transaction, non-resident withholding
tax and thin capitalisation issues, and a
further matter that was under review by
the IRD. The demerger and tax settlement
had a significant impact on the audited
consolidated financial statements for
the year ended 31 December 2016 as
shown in the comparatives to these
consolidated financial statements. The
demerger and the tax settlement did
not have a material impact on the year
ended 31 December 2017. Detailed
notes regarding the demerger and the tax
settlement are included in the audited
consolidated financial statements for
the year ended 31 December 2016
available on the Company’s website.
Also refer to note 6.1 of these
consolidated financial statements.
1.4.2 Proposed Merger with Stuff Limited
On 7 September 2016 the Company
and Fairfax Media Limited (“Fairfax”)
announced the signing of a merger
implementation agreement to effect
the merger of the Company and Stuff
Limited,formerly Fairfax New Zealand
Limited, (“Stuff”).
The New Zealand Commerce Commission
(“NZCC”) declined to grant clearance or
authorisation for the proposed merger of
the Company with Stuff on 3 May 2017.
On 26 May 2017 the Company, Fairfax and
Stuff announced that they would appeal
the NZCC’s decision in the High Court.
A nine day hearing was held in October
2017 and on 19 December 2017 we
announced that the High Court has
upheld the NZCC’s decision not to clear
or authorise the proposed merger. The
Company, Fairfax and Stuff have now
applied for leave to appeal the High
Court decision upholding the NZCC’s
decision not to clear or authorise the
proposed merger of the two businesses.
Areas of significant accounting
estimates or judgements
Note
Impact of Performance Rights
on earnings per share
2.3
Determination of number of
reportable segments
2.4
Intangible assets with indefinite
useful lives
3.1
Assumptions used in testing
for impairment of indefinite
life intangible assets
3.1.1
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Page 11
2017
$’000
2016
$’000
FROM CONTINUING OPERATIONS
Advertising revenue
279,095
295,141
Circulation and subscription revenue
83,263
86,782
Services revenue
12,542
12,206
Other revenue
1 5,78 8
13,727
Revenue from continuing operations 390,688
4 07,8 5 6
Dividends
128
141
Rental income from sub-leases
632
586
Profit / (loss) on disposal of properties and businesses
-
1,320
Profit / (loss) on disposal of property, plant and equipment
27
-
Other income787
2,047
Interest income – related parties
-
91
Interest income – other entities
139
202
Finance income139
293
Total finance and other income 926
2,340
Total revenue and other income 391,614
410,196
FROM DISCONTINUED OPERATIONS (REFER TO NOTE 6.1)
Total revenue and other income-
127,542
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2.0 GROUP PERFORMANCE
2.1 REVENUE AND OTHER INCOME
Accounting Policies
Revenue is measured at the fair value of consideration received or receivable. Amounts disclosed as
revenue are net of returns, rebates and taxes paid.
The Group recognises revenue when:
·the amount of revenue can be reliably measured;
·it is probable that the economic benefits will flow to the Group; and
·the criteria for revenue recognition has been satisfied.
Advertising revenue is recognised when the advertisement is published or broadcast, when the coupon
is sold, or over the period the advertisement is displayed.
Circulation and subscription revenue is recognised when the publication is purchased or on a straight-line
basis over the subscription period.
Services revenue is recognised by reference to the stage of completion of the transaction, when it can
be measured reliably. Services revenue includes printing and production and revenue generated by the
shared services centre.
Other revenue includes revenue from events, recycling of waste, distribution and digital design and is
recognised when the event occurs, the product is delivered or the goods are sold.

Page 12
2017
$’000
2016
$’000
FROM CONTINUING OPERATIONS
Employee benefits expense
157,350
161,610
Production and distribution expense
75,045
82,301
Selling and marketing expense
47,569
45,840
Rental and occupancy expense
21,986
23,711
Masthead license fees
-
12,216
Costs in relation to one-off projects
2,970
6,946
Redundancies and associated costs
4,314
6,009
Asset write-downs and business closures
275
-
Repairs and maintenance costs
6,973
6,166
Travel and entertainment costs
4 ,1 8 0
4,086
Other
12,177
14,668
Total expenses from operations before finance costs,
depreciation, amortisation
332,839
363,553
2017
$’000
2016
$’000
2.2.2 Depreciation & amortisation
FROM CONTINUING OPERATIONS
Depreciation
15,559
16,173
Amortisation
9,387
7,67 2
Total depreciation & amortisation24,946
23,845
2.2.3 Finance cost
FROM CONTINUING OPERATIONS
Interest and finance charges – related parties
-
2,765
Interest and finance charges – other entities
4,391
6,482
Borrowing cost amortisation
106
53
Total finance cost4,497
9,300
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2.2 EXPENSES
2.2.1 Expenses from operations before finance costs, depreciation, amortisation

Page 13
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2017
$’000
2016
$’000
2.2.4 Fees paid to auditors
Fees paid to the Group’s auditors, PricewaterhouseCoopers, consist of:
Audit or review of financial statements
A
368
454
Other services
Other assurance services
B
51
6
Tax services
C
109
1,057
Other services
D
125
1,231
Total other services285
2,294
Total fees paid to auditors653
2,748
(A) Includes the fee for both the audit of the annual financial statements and the independent review of the interim financial statements.
(B) Includes regulatory and other assurance services, including New Zealand circulations and payroll assurance. (C) Includes services relating
to transactional advice, tax compliance services, tax pooling services (2016 only) and services relating to the IRD settlement (2016 only).
(D) Includes due diligence and advisory services relating to the proposed merger with Stuff Limited of $124,941 (2016: $1,224,179).

Page 14
2.3 EARNINGS PER SHARE
2017
$’000
2016
$’000
RECONCILIATION OF EARNINGS USED IN CALCULATING BASIC / DILUTED
EARNINGS PER SHARE (“EPS”)
Profit / (Loss) from continuing operations attributable to owners of the parent entity
20,885
(54,884)
Profit from discontinuing operations attributable to owners of the parent entity
-
115,502
Profit / (Loss) attributable to owners of the parent entity used in calculating EPS20,885
60,618
2017
NUMBER
2016
NUMBER
WEIGHTED AVERAGE NUMBER OF SHARES
Weighted average number of shares in the denominator in calculating basic EPS
196,011,282
196,011,282
Adjusted for calculation of diluted EPS
-
-
Weighted average number of shares in the denominator in calculating diluted EPS 196,011,282
196,011,282
2017
CENTS
2016
CENTS
BASIC / DILUTED EARNINGS PER SHARE
From continuing operations attributable to owners of the parent entity
1 0.7
(28.0)
From discontinuing operations attributable to owners of the parent entity
-
58.9
Total basic / diluted earnings per share attributable to owners of the parent entity1 0.7
30.9
Significant Judgement
Under the Group’s Total Incentive Plan (“TIP”) as discussed in Note 4.3, Performance Rights were issued to
certain participating employees that, for the 2017 TIP, will at the discretion of the Board either convert into
fully paid ordinary shares or be settled in cash; and for the 2016 TIP, will convert into fully paid ordinary
shares. Under the TIP, where Performance Rights are settled in shares, the Company would either repurchase
those shares from the market or issue new shares. Any new shares issued would have a dilutive effect on
the Earnings Per Share calculations noted below. It is currently the intention of the Company to either
repurchase shares from the market or settle the rights in cash and not to issue new shares.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Page 15
Accounting policies
Basic earnings per share (from continuing operations)
Basic earnings per share is determined by dividing:
·the profit or loss attributable to owners of the Company; by
·the weighted average number of ordinary shares outstanding during the financial year, adjusted
for bonus elements in ordinary shares issued during the financial year.
Diluted earnings per share (from continuing operations)
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share by
taking into account:
·the after-tax effect of dividends, interest and other changes in income or expense associated with
dilutive potential ordinary shares; and
·the weighted average number of additional ordinary shares that would have been outstanding
assuming the conversion of all dilutive potential ordinary shares.
(Note that there are no dilutive potential ordinary shares in 2017 (2016: nil)).
Basic / dilutive earnings per share (from discontinued operations)
Basic / dilutive earnings per share (from discontinued operations) are calculated on the same basis as
the policies described above, except that net profit or loss attributable to the owners of the Company
is replaced with profit or loss from discontinued operations attributable to the owners of the Company.
Significant Judgement
The Group has one reportable segment – being “Integrated Media and Entertainment”. All significant
operating decisions are based upon analysis of NZME as one operating segment. The Executive Team
and the Board of Directors have been identified as the Chief Operating Decision Maker. The Group’s major
products and services are split by channel only at the revenue level into Print, Radio & Experiential and
Digital & e-Commerce which is the way in which revenue is reported to the Chief Operating Decision
Maker. Although the Group operates in many different markets within New Zealand, for management
reporting purposes the Group operates in one principle geographical area being New Zealand as a whole.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2.4 SEGMENT INFORMATION
2.4.1 Determination and description of segments
Integrated Media and Entertainment incorporates the sale of advertising, goods and services generated from
the audiences attached to the Group’s media platforms.

Page 16
2017
$’000
2016
$’000
REVENUES FROM EXTERNAL CUSTOMERS BY CHANNEL
Print
221,319
239,127
Radio & Experiential
110,071
114,849
Digital & e-Commerce
56,327
52,153
Segment revenue from integrated media and entertainment activities387,717
406,129
Revenue from shared service centre
2,971
1,727
Total revenues from external customers390,688
4 07,8 5 6
Dividend income
128
141
Rental income from sub-leases
632
586
Expenses from operations before finance costs, depreciation,
amortisation and exceptional items
(325,280)
(338,382)
Total Segment Adjusted EBITDA
A
6 6 ,1 6 8
70,201
Depreciation and amortisation
(24,946)
(23,845)
Interest income
139
293
Finance cost
(4,497)
(9,300)
EXCEPTIONAL ITEMS
Gain / (loss) on disposal of properties and businesses
B
(248)
1,320
Masthead royalty charges
C
-
(12,216)
Redundancies and associated costs
D
(4,314)
(6,009)
Costs in relation to one off projects
E
(2,970)
(6,946)
Profit / (Loss) before tax from continuing operations29,332
13,498
2.4.2 Segment revenues and results
The segment information provided to the Directors and Executive Team for the year ended 31 December 2017
is as follows:
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(A) Adjusted Earnings before Interest, Tax, Depreciation and Amortisation (“Adjusted EBITDA”) from continuing operations which excludes exceptional
items, is a non-GAAP measure that represents the Group’s total segment result which is regularly monitored by the Chief Operating Decision Maker.
Exceptional items are those gains, losses, income and expense items that are not directly related to the primary business activities of the Group
which are determined in accordance with the NZME Exceptional Items Recognition Framework adopted by the Audit & Risk Committee. Exceptional
items include redundancies, impairment, one-off projects and the disposal of properties or businesses. These items are excluded from the segment
result that is regularly reviewed by the Chief Operating Decision Maker. (B) Gain / (loss) on disposal of properties and businesses is the loss on sale of
land in Ouruhia and Greymouth in 2017 and the gain on sale of the Wairarapa Times Age, Whakatane News offset by loss on sale of property in Nelson
in 2016. (C) Costs charged from a subsidiary company of HT&E for use of NZ publishing mastheads in 2016. On 24 June 2016, the Group acquired
certain NZ publishing mastheads on normal commercial terms from this subsidiary company of HT&E. As a result, masthead royalty charges have not
been incurred by the Group from 24 June 2016 onwards. (D) The redundancies and associated costs relate to the restructuring and integration of the
New Zealand operations. (E) The costs related to one off projects refers primarily to costs of external consultants assisting with the proposed merger
with Stuff and the continuing integration and co-location of NZME. In 2016 this also included costs relating to listing.
As the Group has one operating segment, the assets and liabilities as reported on the consolidated balance sheet
are also the segment assets and liabilities, and the income tax expense in the consolidated income statement is
also the segment income tax.

Page 17
GOODWILL
$’000
SOFTWARE
$’000
MASTHEAD
BRANDS
$’000
RADIO
LICENCES
$’000
BRANDS
$’000
TOTAL
$’000
AS AT 1 JANUARY 2016
Cost177,00646,587-479,49259,079
762,164
Accumulated amortisation
and impairment
(95,614)(35,316)-(34,134)-
(165,064)
Net book value
81,39211,271-445,35859,079
597,100
FOR THE YEAR ENDED 31 DECEMBER 2016
Opening net book amount81,39211,271-445,35859,079
597,100
Additions
A
-4,286146,976--
151,262
Divestment of subsidiaries
and operations
B
(10,804)--(390,454)-
(401,258)
Amortisation-(4,721)-(3,422)-
(8,143)
Foreign exchange differences19534-(9,414)-
(9,185)
Net book value
70,78310,870146,97642,06859,079
329,776
AS AT 31 DECEMBER 2016
Cost166,39749,309146,9767 7,4 5759,079
499,218
Accumulated amortisation
and impairment
(95,614)(38,439)-(35,389)-
(169,442)
Net book value
70,78310,870146,97642,06859,079
329,776
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3.0 OPERATING ASSETS & LIABILITIES
3.1 INTANGIBLE ASSETS
Significant Judgement
The Directors have determined that Masthead Brands and Brands have indefinite lives and are therefore
not amortised. Refer to the accounting policies below for further information.

Page 18
GOODWILL
$’000
SOFTWARE
$’000
MASTHEAD
BRANDS
$’000
RADIO
LICENCES
$’000
BRANDS
$’000
TOTAL
$’000
FOR THE YEAR ENDED 31 DECEMBER 2017
Opening net book amount70,78310,870146,97642,06859,079
329,776
Additions-1,932-90-
2,022
Amortisation-(6,434)-(2,953)-
(9,387)
Transfers and other adjustments
C
-8,142---
8,142
Net book value
70,78314,510146,97639,20559,079
330,553
AS AT 31 DECEMBER 2017
Cost166,39759,384146,9767 7, 54759,079
509,383
Accumulated amortisation
and impairment
(95,614)(44,874 )-(38,342)-
(178,830)
Net book value
70,78314,510146,97639,20559,079
330,553
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(A) Prior to the implementation of the demerger, the Group acquired certain NZ publishing Masthead Brands on normal commercial terms from
a subsidiary company of APN News & Media Limited (now HT&E Limited (“HT&E”)). These Masthead Brands were purchased for consideration
of $146,976,000 together with a termination amount in regard to the masthead license of $2,065,575, which was incurred as the Group early
terminated the masthead licences agreement with HT&E. (B) The Company completed its demerger from HT&E on 29 June 2016. Refer to Note 6.1 and
the Consolidated Financial Statements for the year ended 31 December 2016 (available on the Company’s website) for further details around assets
disposed and acquired as part of the Internal Restructure. (C) Included in plant and equipment is capitalised work in progress which is transferred to
the relevant asset category (including software) once the project is complete (refer to note 3.2). Transfers and other adjustments primarily comprise
of transfers from work in progress during the year.
Accounting policies
Goodwill
Goodwill represents the excess of the cost of an acquisition over the fair value of the Group’s share
of the net identifiable assets of the acquired business at the date of the acquisition. Goodwill is not
amortised but rather is subject to periodic impairment testing.
Software
Costs incurred in developing systems, acquiring software and licences are capitalised to software. Costs
capitalised include materials, services, payroll and payroll related costs of employees involved in development.
Amortisation is calculated on a straight line basis over the useful life of the asset (typically 3 to 10 years).
Radio licences
Commercial radio licences are accounted for as identifiable assets and are initially recognised at cost.
The current New Zealand radio licences expire on 31 March 2031 and are being amortised on a straight
line basis to that date.
Masthead Brands
Masthead Brands, being the titles, logo’s and similar items of the integrated media assets of the Group
are accounted for as identifiable assets and are initially recognised at cost. The Directors believe the
masthead brands have indefinite lives as there is no foreseeable limit over which they are expected
to generate net cash inflows for the Group. Accordingly, Masthead Brands are not amortised but are
tested for impairment each year (refer to note 3.1.1 below).
Brands
Brands are accounted for as identifiable assets and are initially recognised at cost. The Directors have
considered the geographic location, legal, technical and other commercial factors likely to impact the
assets’ useful lives and consider that they have indefinite lives. Accordingly, Brands are not amortised
but are tested for impairment each year (refer to note 3.1.1 below).

Page 19
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3.1.1 Year-end impairment review
Significant Judgement
As disclosed in note 2.4 the Directors have determined that the Group has one reportable segment –
being “Integrated Media and Entertainment”. The Directors have also determined that this is the only
cash generating unit (“CGU”) for impairment testing because this is the lowest level for which there
are separately identifiable cash inflows which are largely independent of the cash inflows from other
assets or groups of assets. Accordingly all goodwill and intangibles with indefinite useful lives are
allocated to one CGU. This note also includes details of certain key estimates and assumptions made
during the impairment testing calculations.
A comprehensive impairment review was conducted at 31 December 2017. The recoverable amount of the CGU
(which includes goodwill and indefinite life intangible assets) is determined based on the higher of fair value less
costs to sell and value in use calculations using management budgets and forecasts. The recoverable amount of
the CGU is compared against the carrying value of the CGU to determine whether there has been an impairment.
Key estimates and assumptions
Year 1 cash flows:
Based on Board approved annual budget.
Years 2 to 5 cash flows
Revenue forecasts are prepared based on management’s current expectations, with consideration
given to internal information and relevant external industry data and analysis. In particular:
·Print revenues are forecast to decline in line with recent experience and industry trends.
·Digital revenues are forecast to grow based on recent experience and industry trends and
include cash flow assumptions for new digital ventures being launched in 2018.
·Radio and experiential revenues are forecast to grow based on management expectations
of performance as a result of investment in key initiatives.
Expenses are forecast based on management expectations, with consideration given to internal
information and relevant external data.
2017
Post-tax
discount rate
2017
Long-term
growth rate
2016
Post-tax
discount rate
2016
Long-term
growth rate
Integrated Media and Entertainment CGU
9.5%0%
9.5%0%
3.1.2 Impact of reasonably possible
change in key assumptions
The forecasts used in impairment testing
require assumptions and judgements
about the future, such as discount rates,
long term growth rates, forecasted print
and digital revenues, to which the model
is sensitive and which are inherently
uncertain. Given these uncertainties,
the Group has adopted a valuation
approach based on scenario analysis
for those scenarios that it considers to
be reasonably likely to occur. Based on
all available information, the directors do
not consider there to be any reasonably
possible change in the key assumptions
that would cause impairment. Accordingly,
based on the annual impairment assessment
performed, there is no impairment.

Page 20
Accounting policies
Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation and
are tested annually for impairment and whenever there is an indication that they may be impaired.
Intangible assets that are subject to amortisation are tested for impairment whenever events or changes
in circumstances indicate that the carrying amount may exceed its recoverable amount. An impairment
charge is recognised for the amount by which the asset’s carrying amount exceeds its recoverable
amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use.
For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are
separately identifiable cash inflows which are largely independent of the cash inflows from other assets
or groups of assets (cash-generating units). Currently, the group has only one CGU, being Integrated
Media and Entertainment. Non-financial intangible assets, other than goodwill, that suffer impairment
are reviewed for possible reversal of the impairment at each reporting date.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FREEHOLD
LAND
B
$’000
BUILDINGS
B
$’000
PLANT AND
EQUIPMENT
C
$’000
TOTAL
$’000
AS AT 1 JANUARY 2016
Cost or fair value2,990480404,483
407,953
Accumulated depreciation and impairment--(308,737)
(308,737)
Net book amount
2,9904809 5,746
99,216
YEAR ENDED 31 DECEMBER 2016
Opening net book amount2,9904809 5,746
99,216
Additions-1,57610,160
11,73 6
Disposals(752)(98)(172)
(1,022)
Divestment of subsidiaries and operations
A
(1,133)(714)(14,928)
(16,775)
Depreciation-(2,217)(15,832)
(18,049)
Transfers and other adjustments
C
30213,335(12,701)
936
Foreign exchange differences(26)(17)(322)
(365)
Net book amount
1,38112,34561,951
75,677
(Footnotes on the next page)
3.2 PROPERTY, PLANT AND EQUIPMENT

Page 21
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FREEHOLD
LAND
B
$’000
BUILDINGS
B
$’000
PLANT AND
EQUIPMENT
C
$’000
TOTAL
$’000
AS AT 31 DECEMBER 2016
Cost or fair value1,38114,562336,730
352,673
Accumulated depreciation and impairment-(2,217)(274,779)
(276,996)
Net book amount
1,38112,34561,951
75,677
YEAR ENDED 31 DECEMBER 2017
Opening net book amount1,38112,34561,951
75,677
Additions-27312,759
13,032
Disposals(216)(8)(60)
(284)
Depreciation-(2,302)(13,257)
(15,559)
Transfers and other adjustments
C
-(29)(8,112)
(8,141)
Net book amount
1,16510,27953,281
64,725
AS AT 31 DECEMBER 2017
Cost or fair value1,16514,764338,715
354,644
Accumulated depreciation and impairment-(4,485)(285,434)
(289,919)
Net book amount
1,16510,27953,281
64,725
(A) The Company completed its demerger from APN News & Media Limited (now HT&E Limited (“HT&E”)) on 29 June 2016. Refer to Note 6.1 and the
Consolidated Financial Statements for the year ended 31 December 2016 (available on the Company’s website) for further details around assets
disposed and acquired as part of the Internal Restructure. (B) Freehold land and buildings include leasehold improvements with a net book value of
$9,901,993 (2016: $11,942,062) carried at cost. All other freehold land and buildings are held at fair value based on independent valuations. If land
and buildings were stated on the historical cost basis, the net book value of land would have been $442,270 (2016: $658,270) and the net book
value of buildings would have been $336,973 (2016: $347,504). The last revaluation was performed for the year ended 31 December 2015.
(C) Included in plant and equipment is capitalised work in progress with a net book value of $8,149,802 (2016: $7,285,650) which is transferred to
the relevant asset category (including software) once the project is complete. Transfers and other adjustments primarily comprise of transfers from
work in progress during the year. Work in progress is not depreciated until the asset is completed.

Page 22
Accounting policies
Land is not depreciated. Depreciation on other assets is calculated using the straight line method to allocate
their cost or revalued amounts, net of their residual values, over their estimated useful lives, as follows:
The assets’ residual values and useful lives are reviewed and adjusted, if appropriate, at each balance
sheet date. Gains and losses on disposals are determined by comparing proceeds with carrying amount
and are included in the income statement.
Land and buildings (excluding leasehold improvements) are recorded at fair value, based on periodic
valuations (at least every 3 years) by external independent valuers, less subsequent depreciation for
buildings. Any accumulated depreciation at the date of revaluation is eliminated against the gross carrying
amount of the asset and the net amount is restated to the revalued amount of the asset. Increases in
the carrying amounts arising on revaluation of land and buildings are credited to revaluation reserves in
equity. To the extent that the increase reverses a decrease previously recognised in the income statement,
the increase is first recognised in the income statement. Decreases that reverse previous increases of
the same asset are first charged against the revaluation reserves directly in equity to the extent of the
remaining reserve attributable to the asset. All other decreases are charged to the income statement.
Plant and equipment, furniture and fittings and motor vehicles are stated at historical cost less depreciation.
Historical cost includes expenditure that is directly attributable to the acquisition of the items. Subsequent
costs are included in the assets carrying amount or recognised as a separate asset, as appropriate, only
when it is probable that future economic benefits associated with the item will flow to the Group and
the cost of the item can be reliably measured. All other repairs and maintenance are charged to the
income statement during the financial period in which they are incurred.
Impairment of assets
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying
amount is greater than its estimated recoverable amount. Assets that are subject to depreciation are
tested for impairment whenever changes in circumstances indicate that the asset’s carrying amount
may exceed its recoverable amount. An impairment charge is recognised for the amount by which the
asset’s carrying amount exceeds its recoverable amount. Assets that suffer an impairment are reviewed
for possible reversal of the impairment at each reporting date.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Furniture and fittings3 to 25 years
Buildings10 to 25 years
Leasehold improvements3 to 25 years
Motor vehicles5 to 10 years
Plant & equipment3 to 25 years

Page 23
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2017
$’000
2016
$’000
Trade receivables
44,811
45,043
Provision for impairment
(592)
(1,042)
44,219
44,001
Amounts due from related companies (note 7.1.2)
1,028
750
Other receivables and prepayments
10,076
8,880
Total current trade and other receivables55,323
53,631
Movements in the provision for impairment are as follows:
Balance at beginning of the year
1,042
2,146
Provision for impairment expense
430
596
Receivables written off
(880)
(1,700)
Provision for impairment592
1,042
3.3 TRADE AND OTHER RECEIVABLES
3.3.1 Classification
Trade receivables are amounts due from customers
for goods sold or services performed in the ordinary
course of business. Receivables and other financial
assets are classified as subsequently measured at
amortised cost on the basis of both the Group’s
business model for managing the financial assets
and the contractual cash flow characteristics of the
financial asset. If collection of the amounts is expected
in one year or less they are classified as current assets.
3.3.2 Fair values of trade and other receivables
Due to the short-term nature of the current receivables,
their carrying amount is considered to be the same as
their fair value.
3.3.3 Impairment and risk exposure
The maximum exposure to credit risk at the reporting
date is the higher of the carrying value and fair value
of each receivable. The Group does not hold any
collateral as security. Refer to note 4.8.3 for credit risk
and note 4.9 for fair value information.
Accounting policies
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost
using the effective interest method, less provision for impairment.
Receivables are monitored on an individual basis and the company considers the probability of default
upon initial recognition of the receivable and throughout the period and provides for receivables
expected to be impaired. The amount of loss is recognised in the income statement within other
expenses. When a trade receivable is uncollectible, it is written off against the provision account for
trade receivables. Subsequent recoveries of amounts previously written off are credited against other
income in the income statement.

Page 24
2017
$’000
2016
$’000
CURRENT PAYABLES
Lease liability
A
833
833
Amounts due to related companies (note 7.1.2)
1,194
2,654
Employee entitlements
7, 2 1 1
7,1 04
Trade payables and accruals
4 7,6 5 6
55,788
Total current trade and other payables56,894
66,379
NON-CURRENT PAYABLE
Lease liability
A
13,565
13,423
Total non-current trade and other payables13,565
13,423
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3.4 TRADE AND OTHER PAYABLES
(A) Lease liability includes lease incentives received on operating leases.
Refer to note 4.8 for information regarding risk exposure, note 4.9 for further fair value considerations and note
4.6 for lease commitments.
Accounting policies
Trade and other payables
Trade payables, including accruals not yet billed, are recognised when the Group becomes obliged
to make future payments as a result of a purchase of assets or services. Trade payables are carried
at amortised cost which is the fair value of the consideration to be paid in the future for goods and
services received. Trade payables are unsecured and are generally settled within 30 to 45 days.
Leases
Finance leases are leases of property, plant and equipment where the Group, as lessee, has substantially
all the risk and rewards of ownership. Finance leases are capitalised at the lease’s inception at the
lower of the fair value of the leased property and the present value of the minimum lease payments. A
corresponding liability is also established and each lease payment is allocated between the liability and
finance charges. The interest element is charged to the income statement over the period of the lease.
Leased assets are amortised on a straight line basis over the term of the lease, or where it is likely that
the Group will obtain ownership of the asset, the life of the asset. Leased assets held at balance date are
amortised over the shorter of the estimated useful life or the lease term. The Group does not currently
have any material finance leases.
Operating leases are other leases under which all the risks and benefits of ownership are effectively
retained by the lessor. Operating lease payments, excluding contingent payments are charged to the
income statement on a straight line basis over the period of the lease, net of lease incentives, which
are classified as payables and amortised over the life of the associated lease.
Lease incentives are presented as part of the lease liabilities and are recognised in the income statement
on a straight line basis over the lease term.

Page 25
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Employee entitlements
Wages and salaries and annual leave
Liabilities for wages and salaries, including non-monetary benefits and annual leave expected to be wholly
settled within 12 months from the reporting date are recognised in payables and accruals in respect of
employees’ services up to the reporting date and are measured at the amounts expected to be paid
when the liabilities are settled. Amounts to be settled more than 12 months after the reporting date are
recognised as a non-current payable. Liabilities for non-accumulating sick leave are recognised when
the leave is taken and measured at the rates paid or payable.
Short-term incentive plans
A liability for short-term incentives is recognised in trade payables when there is an expectation of
settlement and at least one of the following conditions is met:
·there are contracted terms in the plan for determining the amount of the benefit;
·the amounts to be paid are determined before the time of completion of the financial statements; or
·past practice gives clear evidence of the amount of the obligation.
Liabilities for short-term incentives are expected to be settled within 12 months and are recognised at
the amounts expected to be paid when they are settled.
Refer to note 4.3 for disclosures relating to share based payments and note 7.1.1 for key management compensation.
2017
$’000
2016
$’000
AS AT 31 DECEMBER
Total assets
468,085
483,540
Less intangible assets
(330,553)
(329,776)
Less total liabilities
(179,053)
(197,981)
Net tangible assets(41,521)
(44,217)
Number of shares issued (in thousands)
196,011
196,011
Net tangible assets per share($0.21)
($0.23)
3.5 NET TANGIBLE ASSETS
Net tangible assets per share is a non-GAAP measure that is required to be disclosed by the NZX Listing Rules.
The calculation of the Group’s net tangible assets per share and its reconciliation to the consolidated balance
sheet is presented below:

Page 26
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
4.0 CAPITAL MANAGEMENT
AUTHORISED, ISSUED
AND PAID UP SHARE CAPITAL
2017
NUMBER
‘000
2016
NUMBER
‘000
2017
$’000
2016
$’000
Balance at the beginning of the period
196,011
378,550
360,363
360,363
Shares consolidated as part of the demerger
A
-
(182,539)
-
-
Balance at the end of the period196,011
196,011
360,363
360,363
4.1 SHARE CAPITAL
4.2 RESERVES
(A) On demerger, NZME shares were distributed to eligible APN News & Media Limited (now HT&E Limited (“HT&E”)) shareholders at a ratio of one
NZME share for every one HT&E share. Also refer to note 6.1 and the Consolidated Financial Statements for the year ended 31 December 2016
(available on the Company’s website) for further details on the demerger.
Accounting policies
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares
or options are shown in equity as a deduction, net of tax, from the proceeds.
2017
$’000
2016
$’000
SHARE BASED PAYMENTS RESERVE
Balance at the beginning of the year
144
-
Share based payment expense
1,225
144
Balance at end of the year1,369
144
ASSET REVALUATION RESERVE
Balance at beginning of the year
722
1,186
Transfer to retained earnings due to asset disposals and discontinued operations
-
(464)
Balance at end of year722
722
FOREIGN CURRENCY TRANSLATION RESERVE
Balance at beginning of the year
309
(44,537)
Foreign exchange transfers
-
44,844
Net exchange difference on translation of foreign operations
(15)
2
Total movement for the year
(15)
44,846
Balance at end of year294
309
TRANSACTIONS WITH NON-CONTROLLING INTERESTS RESERVE
Balance at beginning of the year
(6,373)
8,359
Transfer to retained earnings
6,373
(14,732)
Balance at end of year-
(6,373)
Total reserves2,385
(5,198)

Page 27
20172016
AVERAGE PRICE
PER RIGHT
(CENTS)
NUMBER OF
RIGHTS
AVERAGE PRICE
PER RIGHT
(CENTS)
NUMBER OF
RIGHTS
As at 1 January
0.58745,301
--
Granted (2016 TIP)
A
0.58 70,236
0.58745,301
Granted (2017 TIP)
0.901,933,927
--
Forfeited
B
0.58(101,820)
--
Exercised
--
--
As at 31 December0.812,647,644
0.58745,301
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
4.2.1 Nature and purpose of reserves
Share based payments reserve
The share based payments reserve is used to recognise
the fair value of the performance rights issued but not
yet vested as described in note 4.3.
Asset revaluation reserve
The asset revaluation reserve is used to record increments
and decrements on the revaluation of non-current assets,
as described in note 3.2. In the event of the sale of an asset,
the revaluation surplus is transferred to retained earnings.
Foreign currency translation reserve
Exchange differences arising on translation of any foreign
controlled entities are taken to the foreign currency
translation reserve, as described in the basis of preparation.
Transactions with non-controlling interests reserve
Following the demerger, there is no non-controlling interest
in any of the Group’s subsidiaries and the remaining
balance at the beginning of the year relates to historical
transactions with minority interests in entities that are
still part of the Group. Given that there are no non-
controlling interests in any of the Group entities, the
remaining balance has been transferred to another
category of equity; retained earnings.
PERFORMANCE RIGHTS
GRANT DATEVESTING DATEVALUE OF RIGHT
AT GRANT DATE
(CENTS)
2017
$’000
2016
$’000
20 December 201631 Dec 2017 0.58
414
432
25 September 201731 Dec 20180.90
1,741
-
As at 31 December2,155
432
Share based payment expense recognised
in the current period (refer to note 4.2)
1,225
144
2017
2016
Weighted average remaining time until rights outstanding at the end of
the period vest
12 months
12 months
Weighted average remaining time until rights outstanding at the end of
the period automatically converts to ordinary shares
34 months
36 months
(A) Included in the number of rights granted for the year ended 31 December 2017 are 70,236 rights granted at a price of $0.58 per right relating to
the 2016 TIP based on the final number of rights approved by the Board in March 2017. Under the 2016 Plan, the participants will be entitled to
additional shares (not reflected in the rights above) when the rights are exercised (on 31 December 2019) for any dividends foregone during the
period 1 January 2017 to 31 December 2019. For dividends declared during the period 1 January 2017 to 31 December 2017, this will result in an
additional 96,862 shares being issued to the participants. (B) Two participants in the 2016 TIP departed prior to the completion of the Service
Period and forfeited their rights under the 2016 TIP.
4.3 SHARE BASED PAYMENTS
Share rights outstanding at the end of the year have the following expiry date and fair value at grant date:

Page 28
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
4.3.1 Background
Total incentive plan (“TIP”)
The TIP is designed to align the reward outcomes with
the shareholders’ interest and to support the achievement
of the Group’s business strategy and was approved by
the Board on 20 December 2016. Under the TIP, and at
the absolute discretion of the Board, the CEO and other
executive key management personnel are eligible to
participate in the TIP. Eligible participants have a target
award opportunity, which varies between 50% and 100%
of fixed remuneration, depending on the participant’s
role and responsibilities. A new TIP opportunity will be
offered at the commencement of each financial year.
The award is dependent on performance over a one year
period (“performance period”) and there is no opportunity
for retesting. Performance is formally evaluated after
the date that the full year financial performance is
announced to the market.
4.3.2 2017 TIP
Performance measures
Financial performance conditions (50%): Performance
will be measured against earnings before interest,
tax, depreciation and amortisation (“EBITDA”). This
portion is determined based on actual EBITDA against
budgeted EBITDA on the following scale:
Business Unit Goals (25%):This portion is determined
based on actual achievement against Business Unit
(“BU”) Goals on the following scale:
Individual performance conditions (25%): This portion is
determined against individual performance conditions,
as determined for each participant. The TIP award is
earned if all of the individual performance conditions
% of EBITDA% of target
opportunity awarded
< 95%0%
> 95% to 100%Pro-rata vesting between
25% and 100%
> 100% to 110%Pro-rata vesting between
100% and 150%
% of BU Goal
achieved
% of target
opportunity awarded
< 95%25%
> 95% to 100%Pro-rata vesting between
25% and 100%
> 100% to 110%Pro-rata vesting between
100% and 150%
have been achieved, although the Board has discretion
to award less than a 100% of the target for partial
performance and more than a 100% of the target for
exceptional performance.
Awards under the TIP are granted to participants
following the assessment of performance. To the
extent that performance measures are met:
·50% of awards are made in cash; and
·50% of awards are granted in rights to acquire
fully paid ordinary shares in the Company for
$nil consideration (“Rights”).
The performance period for the 2017 awards is a twelve
month period which commenced on 1 January 2017.
Subject to remaining employed by the Company for
a further one year period following the performance
period (“service period”), rights will vest. The vested
rights cannot be exercised for a further two years
(“deferral period”). Vested rights will automatically
convert into ordinary shares for $nil consideration at
the end of the deferral period without the requirement
for the participant to exercise their Rights. At the
discretion of the Board, validly exercised rights may
be satisfied in cash, rather than in shares. Participants
are not entitled to receive any dividends for the rights
they hold, but the Board may, at its sole discretion,
allocate shares or make a cash payment to participants
equal to the value of dividends that were payable
whilst holding the unvested and/or vested rights.
The Company may reduce unvested equity awards
in certain circumstances such as gross misconduct,
material misstatement or fraud. The Board may also
reduce unvested awards to recover amounts where
performance that led to payments being awarded is
later determined to have been incorrectly measured
or not sustained. Awards are normally forfeited if the
participant leaves before the end of the performance
period, except in limited circumstances that are
approved by the Board on a case-by-case basis. If a
participant leaves during the service period, the rights
that will vest will be determined on a pro-rata basis
based on when they leave during the service period.
If a participant leaves during the deferral period, no
rights will be forfeited, but rights will still only convert
into ordinary shares at the end of the deferral period.
The fair value of the rights at grant date was estimated
based on the NZME share price as at 25 September
2017, being the date on which the terms, as approved
by the Board, were communicated to the eligible
participants. The number of rights awarded are based
on the Volume Weighted Average Price (“VWAP”) of
the Company’s shares for the first 5 trading days of
the Performance Period.

Page 29
4.3.3 2016 TIP
Performance measures
Financial performance conditions (75%): Performance
will be measured against earnings before interest,
tax, depreciation and amortisation (“EBITDA”). This
portion is determined based on actual EBITDA against
budgeted EBITDA on the following scale:
Non-financial performance conditions (25%):
Performance will be measured against specific
measures, as determined for each participant at
the commencement of the performance period.
Awards under the TIP are granted to participants
following the assessment of performance. To the
extent the performance measures are met:
·50% of awards are made in cash; and
·50% of awards are granted in rights to acquire
fully paid ordinary shares in the Company for
$nil consideration (“Rights”).
The performance period for the 2016 awards is a 6
month period which commenced on 1 July 2016. Going
forward, the performance period will be a 12 month
period commencing at the start of the financial year.
Subject to remaining employed by the Company for
a further one year period following the performance
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
% of EBITDA% of target opportunity
awarded
< 95%0%
> 95% to 100%Pro-rata vesting between
25% and 100%
> 100% to 110%Pro-rata vesting between
100% and 150%
Model inputs
The following is a summary of the key inputs in calculating the share-based payment expense under the 2017 TIP:
It is assumed that all participating employees will remain employed with the Company until the end of the Vesting Period.
Performance Period1 January 2017 to 31 December 2017
Service Period1 January 2018 to 31 December 2018
Vesting Period (being the Performance Period and the Service Period)1 January 2017 to 31 December 2018
Deferral Period1 January 2019 to 31 December 2020
Share price at grant date90 cents
VWAP59.4 cents
period (“service period”), rights will vest and will be
kept in trust for a further two years (“deferral period”).
Vested rights will automatically convert into ordinary
shares for $nil consideration at the end of the deferral
period without the requirement for the participant
to exercise their Rights. Participants will receive
an additional allocation of shares when rights are
exercised equal to the dividends paid on vested Rights
over the Vesting Period and the Deferral Period. The
Company may reduce unvested equity awards in
certain circumstances such as gross misconduct,
material misstatement or fraud. The Board may also
reduce unvested awards to recover amounts where
performance that led to payments being awarded is
later determined to have been incorrectly measured
or not sustained. Awards are normally forfeited if the
participant leaves before the end of the performance
period, except in limited circumstances that are approved
by the Board on a case-by-case basis. If a participant
leaves during the service period, the rights that will
vest will be determined on a pro-rata basis based
on when they leave during the service period. If a
participant leaves during the deferral period, no rights
will be forfeited, but rights will still only convert into
ordinary shares at the end of the deferral period.
The fair value of the rights at grant date was estimated
based on the NZME share price as at 20 December
2016, being the date on which the terms, as approved
by the Board, were communicated to the eligible
participants. The number of rights awarded are based
on the Volume Weighted Average Price (“VWAP”) of
the Company’s shares for the first 5 trading days of
the Performance Period.

Page 30
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Model inputs
The following is a summary of the key inputs in calculating the share-based payment expense under the 2016 TIP:
It is assumed that all participating employees will remain employed with the Company until the end of the Vesting Period.
Performance Period1 July 2016 to 31 December 2016
Service Period1 January 2017 to 31 December 2017
Vesting Period (being the Performance Period and the Service Period)1 July 2016 to 31 December 2017
Deferral Period1 January 2018 to 31 December 2019
Share price at grant date58 cents
VWAP70 cents
Accounting policies
Total incentive plan (TIP)
The fair value of rights granted under the TIP plan is recognised as an employee benefits expense
with a corresponding increase in equity over the vesting period, being the service period and the
deferral period. The fair value is measured at grant date and the number of rights are determined
using the volume weighted average price of NZME’s shares on the NZX over the first 5 trading days
of the performance period.
The fair value at grant date is determined taking into account the share price, any market performance
conditions and any non-vesting conditions, but excluding the impact of any service and non-market
performance vesting conditions.
Non-market vesting conditions are included in assumptions about the number of rights that are
expected to vest. At each reporting date, the Group revises its estimate of the number of rights that
are expected to become exercisable.
The employee benefits expense recognised each period takes into account the most recent estimate.
The impact of the revision to the original estimates, is recognised in profit or loss with a corresponding
adjustment to equity.
4.4 DIVIDENDS
4.4.1 Dividends paid
On 23 February 2017, the Board of Directors declared
a fully imputed final dividend for the year ended 31
December 2016 of 6 cents per share, paid on 28 April
2017 to registered shareholders as at 11 April 2017.
The Board of Directors also declared a supplementary
dividend of 1.06 cents per share, paid on 28 April 2017
to registered shareholders as at 11 April 2017, to those
shareholders who are not tax residents in New Zealand
and who hold less than 10% of the shares in the Company.
On 24 August 2017, the Board of Directors declared a
fully imputed interim dividend of 3.5 cents per share,
paid on 27 October 2017 to registered shareholders
as at 17 October 2017. The Board of Directors also
declared a supplementary dividend of 0.62 cents
per share, paid on 27 October 2017 to registered
shareholders as at 17 October 2017, to those shareholders
who are not tax residents in New Zealand and who
hold less than 10% of the shares in the Company. The
payment of a supplementary dividend effectively puts
non-resident shareholders in the position they would
have been had they received imputation credits (which
are only available to resident shareholders).

Page 31
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
4.4.2 Dividends declared after balance date
On 21 February 2018, the Board of Directors declared
a fully imputed final dividend of 6 cents per share, to
be paid on 3 May 2018 to registered shareholders as
at 18 April 2018. The Board of Directors also declared
a supplementary dividend of 1.06 cents per share, to
be paid on 3 May 2018 to registered shareholders as
2017
‘000
2016
‘000
Imputation credits available for subsequent reporting periods based on the
New Zealand 28% tax rate for the Group
NZ$ 8,519NZ$4,739
Franking credits available to the Company for subsequent reporting periods
based on the Australia 30% tax rate for the Group
AU$ 0
A
AU$ 0
A
at 18 April 2018, to those shareholders who are not
tax residents in New Zealand and who hold less than
10% of the shares in the Company. The payment of a
supplementary dividend effectively puts non-resident
shareholders in the position they would have been
had they received imputation credits (which are only
available to resident shareholders).
4.4.3 Franking and imputation credits
(A) Although the Company does not have any franking credits available for use, other entities within the Group have AU$10,828,676
(2016:AU$10,828,676) available that might become available to the Company in future periods.
2017
$’000
2016
$’000
Non-current interest bearing liabilities
Bank loans – secured
100,000
112,486
Deduct:
Capitalised borrowing costs
(212)
(318)
Total non-current interest bearing liabilities99,78 8
112,168
NET DEBT
Non-current interest bearing liabilities
100,000
112,486
Capitalised borrowing costs
(212)
(318)
Cash and cash equivalents
(9,570)
(16,242)
Total debt less cash and cash equivalents90,218
95,926
4.5 INTEREST BEARING LIABILITIES

Page 32
Accounting policies
Borrowings are initially recognised at fair value less attributable transaction costs and subsequently
measured at amortised cost. Any difference between cost and redemption value is recognised in the
income statement over the period of the borrowing on an effective interest basis.
Costs incurred in connection with the arrangement of borrowings are deferred and amortised over
the period of the borrowing. These costs are netted off against the carrying value of borrowings in
the balance sheet.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2017
$’000
2016
$’000
Commitments for minimum lease payments in relation to rental commitments
contracted for at the reporting date and not recognised as liabilities, payable:
Not later than one year
16,389
16,406
Later than one year but not later than five years
48,973
52,307
Later than five years
62,185
71,856
Commitments not recognised in the financial statements127,547
140,569
4.6 COMMITMENTS
4.6.1 Lease commitments
The group leases certain premises under operating leases. The leases have varying terms, escalation clauses
and renewal rights. Excess space is sub-let to third parties under non-cancellable operating leases.
The change in the bank loans - secured balance for the
year ended 31 December 2017 of $12,486,375 is due to
proceeds from borrowings / repayments of borrowings
as reflected in the consolidated statement of cash flows.
The change in capitalised borrowing costs of $212,220
for the year ended 31 December 2017 is due to the
amortisation of those capitalised borrowing costs over
the period of the loan.
The Group is funded from a combination of its own cash
reserves and NZ$160 million bilateral bank loan facility,
which NZME entered into on 29 June 2016, of which
$100 million (2016: $112.5 million) is drawn and $60
million (2016: $47.5 million) is undrawn as at 31 December
2017. The facility expires on 1 January 2020.
The interest rate for the drawn facility is the applicable
bank screen rate plus credit margin.
The NZME Bilateral Facilities contain undertakings which
are customary for a facility of this nature including,
but not limited to, provision of information, negative
pledge and restrictions on priority indebtedness and
disposals of assets. The assets of the Group are
collateral for the interest bearing liability.
In addition, the Group must comply with financial
covenants (a net debt to EBITDA ratio and an EBITDA
to net interest expense ratio) for each 12 month period
ending on 30 June and 31 December. The Group has
complied with these covenants.

Page 33
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2017
$’000
2016
$’000
RECONCILIATION OF CASH
Cash at end of the year, as shown in the statements of cash flows, comprises:
Cash and cash equivalents9,570
16,242
RECONCILIATION OF NET CASH INFLOWS (OUTFLOWS) FROM OPERATING
ACTIVITIES TO PROFIT / (LOSS) FOR THE YEAR:
Profit / (loss) for the year
20,885
74,543
Depreciation and amortisation expense
24,946
26,193
Borrowing cost amortisation
106
53
Net loss on sale of non-current assets
216
9
Gain on sale of business after tax
-
(192,519)
Reclassification of foreign currency translation reserve
-
65,326
Change in current / deferred tax payable
2,837
41,289
Current tax funded through related party balances
-
(12,842)
Foreign exchange losses / (gains)
-
1,086
Asset write offs and business closure
-
15
Revaluation/impairment of financial assets
-
(2,245)
Change in fair value of financial instrument
-
31,481
Share based payment expense
1,225
144
Changes in assets and liabilities net of effect of acquisitions:
Trade and other receivables
(187)
51,104
Inventories
299
730
Prepayments
(1,505)
(306)
Trade and other payables and employee benefits
(9,367 )
(22,379)
Net cash inflows/(outflows) from operating activities39,455
61,682
4.7 CASH FLOW INFORMATION

Page 34
4.8 FINANCIAL RISK MANAGEMENT
4.8.1 Capital and Risk Management
The Group’s objectives when managing
capital are to:
·Safeguard their ability to continue
as a going concern, so that they
can continue to provide returns for
shareholders and benefits for other
stakeholders; and
·Maintain an optimal capital structure
to reduce the cost of capital.
In order to maintain or adjust the capital
structure, the Group may adjust the
amount of dividends paid to shareholders,
return capital to shareholders, issue new
shares or sell assets to reduce debt.
Refer to note 4.5 for undrawn facilities to
which the group has access to as well as
the net debt calculation that is used by
the group to capital requirements.
The Group’s activities expose it to a variety
of financial risks: market risk (including
interest rate risk, and price risk), credit
risk and liquidity risk. The Group’s overall
risk management programme focuses on
the unpredictability of financial markets
and seeks to minimise potential adverse
effects on the financial performance of
the Group. The Group uses different methods
to measure different types of risk to which
it is exposed. These methods include
sensitivity analysis in the case of interest
rate and ageing analysis for credit risk.
Financial risk management is carried out
by the Group Treasury function. The Group
Treasury function meet regularly with the
Group CFO to cover specific areas, such
as interest rate risk and credit risk, use
of derivative financial instruments and
non-derivative financial instruments, and
investment of excess liquidity. Due to
the Group’s limited operations in foreign
jurisdictions, the Group does not have a
significant foreign exchange exposure.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
4.8.2 Market risk
(a) Cash flow and fair value interest rate risk
Long term borrowings issued at variable
rates expose the Group to cash flow
interest rate risk. Borrowings issued at
fixed interest rates expose the Group
to fair value interest rate risk. The Group
makes decisions regarding variable or
fixed rate debt as and when debt contracts
are entered into. Current interest bearing
debt is fixed for 30 days on a rolling basis.
Based on the outstanding net floating debt
at 31 December 2017, a change in interest
rates of +/-1% per annum with all other
variables being constant would impact post-
tax profit and equity by $1.0 million lower/
higher (2016: $1.1 million lower/higher).
(c) Price risk
The Group is not exposed to significant
price risk. There is some risk associated
with other financial assets however this
is not deemed to be significant as other
financial assets are categorised as level
3 in the fair value hierarchy and have been
impaired, where applicable, to the present
value of expected future cash flows.
4.8.3 Credit Risk
Credit risk is managed on a Group basis.
Credit risk arises from cash and cash
equivalents and deposits with banks
and financial institutions, as well as
credit exposures to wholesale and
retail customers, including outstanding
receivables and committed transactions.
For banks and financial institutions,
the creditworthiness is assessed prior
to entering into arrangements and
approved by the Board. For other
customers, risk control assesses the
credit quality, taking into account
financial position, past experience
and other factors. The utilisation of
credit limits is regularly monitored and
the Group does not normally obtain
collateral from its customers.

Page 35
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
PAST DUE
CURRENT
$’000
LESS
THAN ONE
MONTH
$’000
ONE TO
THREE
MONTHS
$’000
THREE
TO SIX
MONTHS
$’000
OVER SIX
MONTHS
$’000
TOTAL
$’000
2017
Expected loss rate0.0%0.6%4.6%13.7%37. 2 %
Trade Receivables30,30810,6011,9291,258715
44,811
Impaired receivables(65)(89)(172)(266)
(592)
30,30810,5361,8401,086449
44,219
2016
Expected loss rate0.0%0.7%6.5%47.8%62.0%
Trade Receivables23,8901 7,1 862,616619732
45,043
Impaired receivables(121)(171)(296)(454)
(1,042)
23,89017,0652,445323278
44,001
The table below sets out additional information about the credit quality of trade receivables net of the
provision for doubtful debts:
Trade receivables are generally settled within 30 to 45 days. The Directors consider the carrying amount of trade
receivables approximates their net fair value. Receivables are monitored on an individual basis and the company
considers the probability of default upon initial recognition of the receivable and throughout the period and
provides for receivables considered to be impaired.
As of 31 December 2017, trade receivables of $3,375,000 (2016: $3,046,000) were past due but not impaired.
The maximum exposure to credit risk at 31 December is equal to the carrying amount of cash and cash equivalents
and trade and other receivables. The Group is not exposed to any concentrations of credit risk within cash and
cash equivalents or trade and other receivables.
Credit risk further arises in relation to financial guarantees given to certain parties from time to time.

Page 36
4.8.4 Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability
of funding through an adequate amount of committed credit facilities and the ability to close out market
positions. Due to the dynamic nature of the underlying business, Group Treasury aims at maintaining flexibility
in funding by keeping committed credit lines available. Management monitors rolling forecasts of the Group’s
liquidity reserve on the basis of expected cash flows.
The tables below analyse the Group’s financial liabilities including interest to maturity into relevant maturity
groupings based on the remaining period at the reporting date to the contractual maturity date. The amounts
disclosed in the tables are the contractual undiscounted cash flows.
LESS THAN
ONE YEAR
$’000
BETWEEN ONE
AND TWO YEARS
$’000
BETWEEN TWO
AND FIVE YEARS
$’000
OVER FIVE
YEARS
$’000
31 DECEMBER 2017
Trade payables47,6 5 6 - - -
Bank loans 4,0224,022104,022 -
Gross liability51,6784,022104,022 -
Less: interest(4,022)(4,022)(4,022)
Total financial liabilities
47,6 5 6 - 100,000 -
31 DECEMBER 2016
Trade payables 55,788 - - -
Bank loans 4,480 4,480 116,966 -
Gross liability 60,268 4,480 116,966 -
Less: interest (4,480) (4,480) (4,480)
Total financial liabilities
55,788 - 112,486 -
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Page 37
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
4.9 FAIR VALUE MEASUREMENT
The Group measures and recognises the following
assets and liabilities at fair value on a recurring basis:
·Financial assets at fair value through profit or
loss (FVTPL);
·Land and buildings (excluding leasehold
improvements).
2017
$’000
2016
$’000
RECURRING FAIR VALUE MEASUREMENTS (LEVEL 3)
There are no financial assets carried at fair value. Other financial assets of $5,988,765
(2016: $5,988,765) are held at cost and therefore have been excluded from this table.
NON-FINANCIAL ASSETS
Freehold land and buildings
Freehold land
1,165
1,381
Buildings (excluding leasehold improvements)
377
403
Total non-financial assets1,542
1,784
4.9.2 Recognised fair value measurements
All fair value measurements referred to above are in Level 3 of the fair value hierarchy and there were no transfers
between levels. The Group’s policy is to recognise transfers between fair value hierarchy levels as at the end of
the reporting period.
4.9.3 Disclosed fair values
The Group also has a number of assets and liabilities
which are not measured at fair value but for which fair
values are disclosed in these notes.
The carrying amounts of trade receivables and
payables are assumed to approximate their fair
values due to their short-term nature. There are no
outstanding non-current receivables as at 31
December 2017 or 31 December 2016 (level 3).
The fair value of interest bearing liabilities disclosed
in note 4.5 is estimated by discounting the future
contractual cash flows at the current market interest
rates that are available to the group for similar financial
instruments. For the period ending 31 December 2017,
the borrowing rates were determined to be between
3.3% and 4% (2016: between 3.5% and 4%), depending
on the type of borrowing. The fair value of borrowings
approximates the carrying amount, as the impact of
discounting is not significant (level 2).
4.9.4 Valuation techniques used to derive at level
2 and 3 fair values
Recurring fair value measurements
The fair value of financial instruments that are not traded
in an active market is determined using valuation
techniques. These valuation techniques maximise the
use of observable market data where it is available and
rely as little as possible on entity specific estimates. If
all significant inputs required to fair value an instrument
are observable, the instrument is included in level 2.
If one or more of the significant inputs is not based on
observable market data, the instrument is included in level 3.
The Group obtains independent valuations at least
every three years for its freehold land and buildings
(classified as property, plant and equipment in note
3.2), less subsequent depreciation for buildings. This
is considered sufficient regularity to ensure that the
carrying amount does not differ materially from that
which would be determined using fair value at the
end of the reporting period. All resulting fair value
estimates for properties are included as Level 3.
4.9.1 Fair value hierarchy
NZ IFRS 13 requires disclosure of fair value measurements
by level of the following fair value measurement hierarchy:
·Level 1: quoted prices (unadjusted) in active
markets for identical assets or liabilities;
·Level 2: inputs other than quoted prices included
within level 1 that are observable for the asset or
liability, either directly or indirectly; and
·Level 3: inputs for the asset or liability that are not
based on observable market data (unobservable inputs).

Page 38
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
5.0 TAXATION
2017
$’000
2016
$’000
REPORTED INCOME TAX EXPENSE / (BENEFIT) COMPRISES:
Current tax expense / (benefit)
10,529
70,791
Deferred tax expense / (benefit)
(1,972)
8,175
(Over) / under provision in prior years
(110)
(3,310)
Income tax expense8,447
75,656
Income tax is attributable to:
Profit from continuing operations
8,447
64,050
Profit from discontinued operations
-
11,606
Total income tax expense8,447
75,656
INCOME TAX EXPENSE DIFFERS FROM THE AMOUNT
PRIMA FACIE PAYABLE AS FOLLOWS:
Profit from operations before tax
From continuing operations
29,332
13,498
From discontinued operations
-
136,701
29,332
150,199
Prima facie income tax at 28%
8,213
42,056
IRD settlement
-
16,968
Non assessable asset sales and exempt distribution receipts
(27)
(275)
Non-deductible expenses
675
1,554
Derecognition of deferred tax on losses and foreign tax credits
-
62,035
Derecognition of deferred tax on intangible assets
-
(15,803)
Differences in international tax rates
(8)
(2)
Effects of accounting for discontinued operations
-
(26,498)
Other
(296)
(1,069)
(Over) / under provision in prior years
(110)
(3,310)
Income tax expense8,447
75,656
5.1 INCOME TAX

Page 39
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
BALANCERECOGNISED
IN INCOME
$’000
RECOGNISED
IN EQUITY
$’000
OTHER
MOVEMENTS
$’000
BALANCE
$’000
2016
Tax credits1,890(1,887)--
3
Tax losses67,14 9(61,549)-(5,600)
-
Employee benefits2,987(1,554)--
1,433
Doubtful debts636(345)--
291
Accruals / restructuring705397--
1,102
Intangible assets (43,155)42,031595-
(529)
Property plant and
equipment
(8,860)3,490--
(5,370)
Other(11,383)11,242--
(141)
9,969(8,175)595(5,600)
(3,211)
2017
Tax credits3---
3
Employee benefits1,433765--
2,198
Doubtful debts291(126)--
165
Accruals / restructuring1,102(560)--
542
Intangible assets (529)37--
(492)
Property plant and
equipment
(5,370)1,720--
(3,650)
Other(141)136--
(5)
(3,211)1,972--
(1,239)
5.2 DEFERRED TAX
Deferred tax assets and liabilities are attributable to:

Page 40
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
There are unrecognised tax losses of $1,917,077 (AUD1,744,812) (2016: $1,811,935 (AUD1,744,812)) in an Australian
subsidiary of the Company which have not been recognised as there is uncertainty as to their future recoverability.
The deferred tax asset on these losses were not offset against the deferred tax liabilities of the rest of the Group
because they are levied by a different tax authority.
Accounting policies
The tax expense for the period comprises current and deferred tax. Tax is recognised in the income
statement, except to the extent that it relates to items recognised in other comprehensive income or
directly in equity. In this case the tax is also recognised in other comprehensive income or directly in
equity, respectively.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted
at the balance sheet date in the countries where the company and its subsidiaries operate and generate
taxable income. Management periodically evaluates positions taken in tax returns with respect to situations
in which applicable tax regulation is subject to interpretation. It establishes provision where appropriate
on the basis of amounts expected to be paid to the tax authorities.
Deferred tax is recognised, using the liability method, on temporary differences arising between the
tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements.
However, deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill:
deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in
a transaction other than a business combination that at the time of the transaction affects neither
accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws)
that have been enacted or substantially enacted by the balance sheet date and are expected to apply
when the related deferred income tax asset is realised or the deferred income tax liability is settled.
Deferred income tax assets are recognised only to the extent that it is probable that future taxable
profit will be available against which the temporary differences can be utilised.
Deferred income tax is provided on temporary differences arising on investments in subsidiaries and
associates, except for deferred income tax liability where the timing of the reversal of the temporary
difference is controlled by the Group and it is probable that the temporary difference will not reverse
in the foreseeable future.
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset
current tax assets against current tax liabilities and when the deferred income taxes assets and liabilities
relate to income taxes levied by the same taxation authority on either the same taxable entity or different
taxable entities where there is an intention to settle the balances on a net basis.

Page 41
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
6.0 GROUP STRUCTURE AND INVESTMENTS IN OTHER ENTITIES
6.1 NZME DEMERGER FROM APN
On 11 May 2016, APN News & Media Limited (subsequently
rebranded as HT&E Limited (“HT&E)) then the ultimate
parent entity of the Company announced a demerger
of 100% of the Group to HT&E shareholders (“Demerger”),
subject to a majority shareholder vote held on 16 June
2016. The Demerger was approved by the requisite
majority of HT&E shareholders and all other conditions
precedent to the Demerger were satisfied or waived.
The Demerger was completed on 29 June 2016.
On 27 June 2016 the Company was listed as a separate
standalone entity on the NZX Main Board and ASX under
the ticker code NZM on a deferred settlement basis
(on a post consolidation basis). Trading of NZME shares
commenced on a normal settlement basis on 1 July 2016.
Detailed disclosures regarding the demerger (which affects
the comparative figures included in these consolidated
financial statements) are included in the audited
consolidated financial statements for the year ended
31 December 2016 available on the Company’s website.
Significant Judgement
Prior to the Demerger as described in note 6.1, the Group held 50% of the issued capital of Australia Radio
Network Pty Ltd, but exercised effective control over the entity based on the Board and management
representation and the 76.8% economic interest held by the Group.
6.2 CONTROLLED ENTITIES
The consolidated financial statements incorporate
the assets, liabilities and results of the subsidiaries
listed below. Unless otherwise stated, they have
share capital consisting solely of ordinary shares that
are held directly by the Group, and the proportion of
ownership interest held equals the voting rights held
by the Group. All entities are incorporated in, and
operate in, New Zealand unless otherwise stated.
There were no changes in control during the year
ended 31 December 2017.

Page 42
NAME OF ENTITY
2017
2016
Adhub Limited
100%
100%
ESKY Limited
100%
100%
Grabone Limited
100%
100%
Idea HQ Limited
100%
100%
Mt Maunganui Publishing Co Limited
100%
100%
NZME 2014 Limited
100%
100%
NZME Australia Pty Limited
A
100%
100%
NZME Digital Limited
100%
100%
NZME Educational Media Limited
100%
100%
NZME Finance Limited
100%
100%
NZME Holdings Limited
100%
100%
NZME Investments Limited
100%
100%
NZME Online Limited
100%
100%
NZME Print Limited
100%
100%
NZME Publishing Limited
100%
100%
NZME Radio Investments Limited
100%
100%
NZME Radio Limited
B
100%
100%
NZME Specialist Limited
100%
100%
NZME Trading Limited
100%
100%
Regional Publishers Limited
100%
100%
Sell Me Free Limited
100%
100%
Sella Limited
100%
100%
Stanley Newcomb & Co Limited
100%
100%
The Hive Online Limited
100%
100%
New Zealand Radio Network Limited
100%
100%
The Radio Bureau Limited
100%
100%
Trade Debts Collecting Co Limited
100%
100%
W & H Interactive Limited
100%
100%
(A) Incorporated in, and operates in, Australia. (B) One “Kiwi Share” held by the Minister of Finance. The rights and obligations are set out in the
NZME Radio constitution.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Page 43
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Accounting policies
The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its
involvement with the entity and has the ability to affect those returns through its power to direct the
activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the
Group. They are de-consolidated from the date that control ceases. The acquisition method of accounting is
used to account for business combinations by the Group, other than for common control transactions.
Intercompany transactions, balances and unrealised gains on transactions between Group companies
are eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure
consistency with the policies adopted by the group. Non-controlling interests in the results and equity of
subsidiaries are shown separately in the consolidated income statement, statement of comprehensives
income, statement of changes in equity and balance sheet respectively.
Business combinations in which all of the combining entities or businesses ultimately controlled by the same
party or parties both before and after the combination are recognised as common control transactions.
The Group applies the predecessor values method, without any step up to fair value. The net assets
acquired, including goodwill, are incorporated in the Group financial statements at the book values as
per the consolidated financial statements of the highest entity that has common control. The difference
between any consideration given and the aggregate book value of net assets (at the date of the transaction)
of the acquired entity is recorded as an adjustment to equity. No additional goodwill is created.
The Group financial statements incorporate the acquired entity’s results only from the date of acquisition.
The corresponding amounts of the previous period are not restated

Page 44
OWNERSHIP
INTEREST
2017
OWNERSHIP
INTEREST
2016
Chinese New Zealand Herald Limited
A
50%
50%
Eveve New Zealand Limited
A
40%
40%
KPEX Limited
A
25%
25%
New Zealand Press Association Limited
A
38.82%
38.82%
Restaurant Hub Limited
A
40%
40%
The Beacon Printing & Publishing Company Limited
A
21%
21%
The Gisborne Herald Company Limited (held through Essex
Castle Limited as a trust company for NZME Publishing Limited)
A
49%
49%
The Radio Bureau
B
50%
50%
The Wairoa Star Limited
A
40.41%
40.41%
Ratebroker Limited
A
20%
20%
The Newspaper Publishers Association of New Zealand Incorporated
C
-
-
The New Zealand Press Council Incorporated
C
-
-
Radio Broadcasters Association Incorporated
C
-
-
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
6.3 INTERESTS IN OTHER ENTITIES
6.3.1 Associates, joint ventures and joint operations
The Group has the following associates, joint ventures and joint operations:
(A) These entities are classified as joint ventures or associates. Because the effects of equity accounting are immaterial, these investments are
carried at cost (refer note 6.3.2). (B) The Radio Bureau is classified as a joint operation and the Group has included its direct right to the assets,
liabilities, revenues and expenses of joint operations and its share of any jointly held or incurred assets, liabilities, revenues and expenses in
these consolidated financial statements.(C) These are bodies with which entities in the Group have memberships, but no ownership interest.

Page 45
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Accounting policies
Associates
Associates are all entities over which the Group has significant influence but not control or joint control.
Material investments in associates are accounted for in the consolidated financial statements using
the equity method of accounting, after initially being recognised at cost. The Group’s investment in
associates includes goodwill (net of any accumulated impairment loss) identified on acquisition.
Joint arrangements
Under NZ IFRS 11 Joint Arrangements investments in joint arrangements are classified as either joint
operations or joint ventures. The classification depends on the contractual rights and obligations of
each investor, rather than the legal structure of the joint arrangement.
For material joint operations, the Group recognises its direct right to the assets, liabilities, revenues and
expenses of joint operations and its share of any jointly held or incurred assets, liabilities, revenues and
expenses. These have been incorporated in the financial statements under the appropriate headings.
Interests in material joint ventures are accounted for using the equity method (see below) after initially
being recognised at cost in the consolidated balance sheet.
Equity method of accounting
Under the equity method of accounting, the investments are initially recognised at cost and adjusted
thereafter to recognise the group’s share of the post-acquisition profits or losses of the investee in
profit or loss, and the Group’s share of movements in other comprehensive income of the investee in
other comprehensive income. Dividends received or receivable from associates and joint ventures are
recognised as a reduction in the carrying amount of the investment.
When the Group’s share of losses in an equity-accounted investment equals or exceeds its interest in
the entity, including any other unsecured long-term receivables, the Group does not recognise further
losses, unless it has incurred obligations or made payments on behalf of the other entity.
Unrealised gains on transactions between the group and its associates and joint ventures are eliminated
to the extent of the Group’s interest in these entities. Unrealised losses are also eliminated unless the
transaction provides evidence of an impairment of the asset transferred. Accounting policies of equity
accounted investees have been changed where necessary to ensure consistency with the policies
adopted by the Group.
The carrying amount of equity-accounted investments is tested for impairment whenever events or
changes in circumstances indicate that the carrying amount may not be recoverable. Where the
effects of equity accounting is immaterial, investments are carried at cost.
2017
$’000
2016
$’000
Shares in other corporations
5,988
5,988
Total other financial assets5,988
5,988
6.3.2 Other financial assets
Shares in other corporations consist of investments in entities that are not consolidated or equity accounted
(see also note 6.3.1). These investments are carried at cost.

Page 46
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
7.0 OTHER NOTES
7.1 RELATED PARTIES
7.1.1 Key management compensation
2017
$’000
2016
$’000
TOTAL REMUNERATION FOR DIRECTORS
AND OTHER KEY MANAGEMENT PERSONNEL :
Short term benefits
5,935
5,510
Termination benefits
364
52
Dividends
33
10
Share-based payments
1,225
144
7, 5 5 7
5,716
The table above includes remuneration of the Board of
Directors and the Executive Team, including amounts
paid to members of the Executive Team who left
during the year. Where a staff member was acting in
a position on the Executive Team, that portion of their
remuneration has been included in the table above.
7.1.2 Other transactions with related parties
During the year, the Group purchased print services
worth $3,385,000 (2016: $4,134,000) from The
Beacon Printing & Publishing Company Limited, a
company in which the Group holds an interest in.
New Zealand entities in the Group offset tax losses to
New Zealand entities outside the Group of $nil (2016:
$35,110,134) for consideration of $nil (2016: $9,830,837).
In November 2015, the Company, Stuff, TVNZ and
MediaWorks launched a new local advertising
exchange service, KPEX Limited, offering media
agencies and clients a programmatic option for
purchasing online advertising. The group received
advertising revenue of $2,768,773 (2016: $2,359,475)
and paid commission of $412,931 (2016: $358,782).
The Group has commitments to provide future services
(such as house advertising, occupancy space at
NZME offices, business as usual finance and human
resources support) to certain joint ventures and
associates. During the year such services were
provided to Eveve New Zealand Limited, valued at
$66,879 (2016:$10,706), Restaurant Hub Limited, valued
at $281,923 (2016:$41,415) and Ratebroker Limited,
valued at $1,174,394 (2016: $nil). The outstanding
balances for future services are included in the table
below, along with other receivables and payables.
2017
RECEIVABLES
$’000
2016
RECEIVABLES
$’000
2017
PAYABLES
$’000
2016
PAYABLES
$’000
Balances with related party
KPEX Limited
1,028
750
148
113
Chinese New Zealand Herald Limited
-
-
43
43
Eveve New Zealand Limited
-
-
28
194
Restaurant Hub Limited
-
-
449
604
Ratebroker Limited
-
-
526
1,700
Total related party receivables and payables1,028
750
1,194
2,654

Page 47
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
7.1.3 Transactions with pre-Demerger
related parties
The Company was, until the 29 June 2016,
a wholly owned subsidiary of the APN
News & Media Limited (subsequently
rebranded as HT&E Limited (“HT&E”))
group. The transactions with these
HT&E related parties as described below
include transactions up to 29 June 2016,
the date on which these parties ceased
being related parties to the Group.
In 2016 amounts due from related parties
of $304,931,000 and amounts due to
related parties of $322,304,000 have
been settled, with a significant portion of
the settlement occurring as part of the
internal restructure prior to the Demerger
(refer to Note 6.1 for further details).
In 2016 the Group charged interest of
$358,780 to Biffin Pty Ltd a member of
the HT&E Group. Biffin Pty Ltd charged
management fees to NZME Holdings
Limited of $611,056. A Group company,
NZME Holdings Limited, charged shared
services fees totalling $1,456,000 to
related parties.
In 2016, Biffin Pty Ltd repaid loans of
$5,012,246 to Group companies.
In 2016, Wilson & Horton Finance Pty
Ltd, New Zealand Branch (the “Branch”),
charged royalty fees of $12,216,000,
advanced $13,200,000, repaid loans
of $539,000 and charged interest of
$2,765,000 to the Group. The Group
charged the Branch, office rental and
service fees of $78,000.
7.2 CONTINGENT LIABILITIES
7.2.1 Claims
Claims for damages are made against
the Group from time to time in the
ordinary course of business. The
Group has previously disclosed that
Sky Network Television Limited initiated
proceedings against NZME Publishing
Limited and other NZ media companies
alleging breaches of copyright in relation
to the use of rugby video footage in
news stories. This matter has now been
settled on confidential terms.
7.3 SUBSEQUENT EVENTS
Refer to note 1.4.2 for a description of
events relating to the proposed merger
with Stuff and note 4.4.2 for the dividend
declared after the balance date.
The Directors are not aware of any
other material events subsequent to
the balance sheet date.
7.4 NEW STANDARDS AND
INTERPRETATIONS ADOPTED
IN THE CURRENT YEAR
The Group applied the following new
or revised pronouncements for the first
time during the year.
Recognition of deferred tax assets for
unrealised losses (Amendments to NZ
IAS 12) (effective 1 January 2017)
Amendments to clarify that unrealised
losses on debt instruments measured
at fair value for accounting purposes,
but at cost for tax purposes, can give
rise to deductible temporary differences;
when determining whether future taxable
profits are available against which
deductible temporary differences may
be utilised, tax deductions resulting
from the reversal of those deductible
temporary differences are excluded;
and estimates of future taxable profits
may take into account the recovery
of an asset for more than its carrying
amount if there is sufficient evidence
that this recovery is probable. None of
these changes had a material impact on
disclosures or amounts recognised in
these consolidated financial statements.
Disclosure initiative (Amendments to NZ
IAS 7) (effective 1 January 2017)
The amendments to NZ IAS 7 require
disclosures that allow users of financial
statements to evaluate changes in
liabilities which arise from financing
activities (this includes both changes
arising from cash flows and non-cash
changes). The amendments apply
prospectively from 1 January 2017 and
no comparative information is required
in the first year of application. Additional
disclosures for the year ended 31
December 2017 are included in note 4.5.

Page 48
7.5 STANDARDS AND
INTERPRETATIONS ISSUED
BUT NOT YET EFFECTIVE
NZ IFRS 16 Leases replaces NZ IAS 17
and is effective for periods commencing
1 January 2019. It requires a lessee to
recognise a lease liability reflecting
future lease payments and a ‘right-of-
use asset’ for virtually all lease contracts.
Included is an optional exemption for
certain short-term leases and leases of
low-value assets for lessees. Although
the full impact of this standards has
not yet been determined, it will result
in additional assets and liabilities when
the current operating leases are brought
on to the balance sheet; with interest
and depreciation replacing the current
operating lease expense when the
standard is adopted.
NZ IFRS 15 Revenue from contracts
with customers replaces NZ IAS 18 and
NZ IAS 11 and is effective for periods
commencing 1 January 2018. The new
standard is based on the principle that
revenue is recognised when control of a
good or service transfers to a customer.
The notion of control therefore replaces
the existing notion of risks and rewards.
The Group is currently assessing the
effects of applying the new standard on
the consolidated financial statements.
Although this assessment has not been
finalised, we currently expect the standard
to result in us concluding that the nature
of our promises (and therefore the
performance obligations) in certain
contra and experiential contracts are
that we act as a principal and not as an
agent as previously concluded (i.e. the
nature of the performance obligations in
those contracts are obligations to provide
specified goods or services as opposed
to arranging for those goods and services
to be provided by another party). This is
expected to result in an increase in both
revenue and the related costs (i.e. the
revenue and costs are shown on a gross
basis and not on a net basis), without any
material impact on profit for the year.
The Group does not currently expect the
standard to have a material impact on the
timing of revenue recognition.
The standard permits either a full
retrospective or a modified retrospective
approach for adoption. The Group
currently intends to adopt the standard
using the modified retrospective approach,
which means that the cumulative impact
(if any) of the adoption will be recognised
in retained earnings as at 1 January 2018
and that comparatives will not be restated.
All other standards, interpretations and
amendments issued but not yet effective
are either not applicable to the Group or
not material.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


PricewaterhouseCoopers, 188 Quay Street, Private Bag 92162, Auckland 1142, New Zealand
T: +64 9 355 8000, F: +64 9 355 8001, pwc.co.nz
Independent auditor’s report
To the shareholders of NZME Limited
The consolidated financial statements (“financial statements”) comprise:
 the consolidated balance sheet as at 31 December 2017;
 the consolidated income statement for the year then ended;
 the consolidated statement of comprehensive income for the year then ended;
 the consolidated statement of changes in equity for the year then ended;
 the consolidated statement of cash flows for the year then ended; and
 the notes to the consolidated financial statements, which include the principal accounting policies.
Our opinion
In our opinion, the financial statements of NZME Limited (the Company), including its subsidiaries
(the Group), present fairly, in all material respects, the financial position of the Group as at 31
December 2017, its financial performance and its cash flows for the year then ended in accordance
with New Zealand Equivalents to International Financial Reporting Standards (NZ IFRS) and
International Financial Reporting Standards (IFRS).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (New Zealand) (ISAs
NZ) and International Standards on Auditing (ISAs). Our responsibilities under those standards are
further described in the Auditor’s responsibilities for the audit of the financial statements section of
our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
We are independent of the Group in accordance with Professional and Ethical Standard 1 (Revised)
Code of Ethics for Assurance Practitioners (PES 1) issued by the New Zealand Auditing and Assurance
Standards Board and the International Ethics Standards Board for Accountants’ Code of Ethics for
Professional Accountants (IESBA Code), and we have fulfilled our other ethical responsibilities in
accordance with these requirements.
Our firm carries out other services for the Group in the areas of taxation compliance and advisory
services, advisory services in connection with the potential merger with Fairfax, and other assurance
services including circulation and payroll assurance services. The provision of these other services has
not impaired our independence as auditor of the Group.

PricewaterhouseCoopers, 188 Quay Street, Private Bag 92162, Auckland 1142, New Zealand
T: +64 9 355 8000, F: +64 9 355 8001, pwc.co.nz
Independent auditor’s report
To the shareholders of NZME Limited
The consolidated financial statements (“financial statements”) comprise:
 the consolidated balance sheet as at 31 December 2017;
 the consolidated income statement for the year then ended;
 the consolidated statement of comprehensive income for the year then ended;
 the consolidated statement of changes in equity for the year then ended;
 the consolidated statement of cash flows for the year then ended; and
 the notes to the consolidated financial statements, which include the principal accounting policies.
Our opinion
In our opinion, the financial statements of NZME Limited (the Company), including its subsidiaries
(the Group), present fairly, in all material respects, the financial position of the Group as at 31
December 2017, its financial performance and its cash flows for the year then ended in accordance
with New Zealand Equivalents to International Financial Reporting Standards (NZ IFRS) and
International Financial Reporting Standards (IFRS).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (New Zealand) (ISAs
NZ) and International Standards on Auditing (ISAs). Our responsibilities under those standards are
further described in the Auditor’s responsibilities for the audit of the financial statements section of
our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
We are independent of the Group in accordance with Professional and Ethical Standard 1 (Revised)
Code of Ethics for Assurance Practitioners (PES 1) issued by the New Zealand Auditing and Assurance
Standards Board and the International Ethics Standards Board for Accountants’ Code of Ethics for
Professional Accountants (IESBA Code), and we have fulfilled our other ethical responsibilities in
accordance with these requirements.
Our firm carries out other services for the Group in the areas of taxation compliance and advisory
services, advisory services in connection with the potential merger with Fairfax, and other assurance
services including circulation and payroll assurance services. The provision of these other services has
not impaired our independence as auditor of the Group.

PwC 50

Our audit approach
Overview

An audit is designed to obtain reasonable assurance whether the financial
statements are free from material misstatement.
Our overall group materiality was $1,845,000, which represents 5% of profit
before tax, excluding one-off expense items incurred during the year.
We chose profit before tax as the benchmark because, in our view, it is the
benchmark against which the performance of the Group is most commonly
measured by users, and is a generally accepted benchmark. We have adjusted
this benchmark for one-off transactions to reduce volatility and to reflect the
underlying performance of the Group.

We have determined that there is one key audit matter for the year to 31
December 2017, being the impairment testing of intangible assets.

Materiality
The scope of our audit was influenced by our application of materiality.
Based on our professional judgement, we determined certain quantitative thresholds for materiality,
including the overall Group materiality for the financial statements as a whole as set out above. These,
together with qualitative considerations, helped us to determine the scope of our audit, the nature,
timing and extent of our audit procedures and to evaluate the effect of misstatements, both
individually and in aggregate on the financial statements as a whole.
Audit scope
We designed our audit by assessing the risk of material misstatement in the financial statements and
our application of materiality. As in all of our audits, we also addressed the risk of management
override of internal controls including among other matters, consideration of whether there was
evidence of bias that represented a risk of material misstatement due to fraud.
We tailored the scope of our audit in order to perform sufficient work to enable us to provide an
opinion on the financial statements as a whole, taking into account the structure of the Group, the
accounting processes and controls, and the industry in which the Group operates.




PwC 51

Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the financial statements of the current year. The key audit matter below was addressed in
the context of our audit of the financial statements as a whole, and in forming our opinion thereon,
and we do not provide a separate opinion on this matter.
Key audit matter How our audit addressed the key audit matter
Impairment testing of intangible assets
As outlined in note 3.1, total non-
amortising intangible assets, including
goodwill ($70.8 million), masthead
brands ($147.0 million), and brands
($59.1 million) have a combined carrying
value of $276.9 million at 31 December
2017 and represent 59% of the total assets
of the Group.
In completing their annual impairment
assessment management utilised a value
in use methodology, reflecting the
strategic direction of NZME, to determine
the value of the business using
discounted cash flows. This assessment
is complex in nature and includes key
estimates and assumptions made by
management, particularly in the
following areas:
 The assessment that the NZME
business constitutes one CGU.
 The expected future trading results of
both existing activities and new
ventures which are based on budgets
and forecasts which have been
approved by the Board of Directors.
 The weighted average cost of capital
of 9.5% used as the discount rate in
the model.
 The application of a 0% long term
growth rate for the purposes of
impairment testing.
 Considering sensitivity by
determining other reasonably possible
scenarios and assessing the impact on
the valuation of these scenarios.
In their sensitivity analysis management
identified that the model was sensitive to
the discount rate, long term growth rate,
We understood the strategic objectives of the business
to enable us to evaluate the impairment assessment
performed by management.
We gained an understanding of the business, how it is
managed, and how the results are reported to
management and the Directors in order to understand
management’s determination that NZME constitutes
one CGU.
We tested the mathematical accuracy of the model by
reperforming the calculation of the recoverable
amount of the business, based on the same estimates
and assumptions used by management. We then
agreed the relevant net assets of the Group to the
audited carrying values.
We also assessed key estimates and assumptions made
by management. Our audit procedures included the
following:
 We gained an understanding of the business
process and controls applied by management
in their impairment assessment.
 We agreed the future cash flows included in
management’s model to the budgets and
forecasts approved by the Board of Directors.
 We considered the reasonableness of key
assumptions for both existing activities and
new ventures in the cash flow forecasts, in
particular revenue growth for each channel,
the expected trends of print and digital
revenues, forecast margins and terminal
growth rates. This was done with reference to
the historic performance of the Group, key
initiatives being undertaken and comparison
to the results of comparable companies and
available broker reports.
 We engaged an auditor’s expert to recalculate
a reasonable range for the weighted average
cost of capital used as the discount rate in the
model and determined that the discount rate

PwC 51

Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the financial statements of the current year. The key audit matter below was addressed in
the context of our audit of the financial statements as a whole, and in forming our opinion thereon,
and we do not provide a separate opinion on this matter.
Key audit matter How our audit addressed the key audit matter
Impairment testing of intangible assets
As outlined in note 3.1, total non-
amortising intangible assets, including
goodwill ($70.8 million), masthead
brands ($147.0 million), and brands
($59.1 million) have a combined carrying
value of $276.9 million at 31 December
2017 and represent 59% of the total assets
of the Group.
In completing their annual impairment
assessment management utilised a value
in use methodology, reflecting the
strategic direction of NZME, to determine
the value of the business using
discounted cash flows. This assessment
is complex in nature and includes key
estimates and assumptions made by
management, particularly in the
following areas:
 The assessment that the NZME
business constitutes one CGU.
 The expected future trading results of
both existing activities and new
ventures which are based on budgets
and forecasts which have been
approved by the Board of Directors.
 The weighted average cost of capital
of 9.5% used as the discount rate in
the model.
 The application of a 0% long term
growth rate for the purposes of
impairment testing.
 Considering sensitivity by
determining other reasonably possible
scenarios and assessing the impact on
the valuation of these scenarios.
In their sensitivity analysis management
identified that the model was sensitive to
the discount rate, long term growth rate,
We understood the strategic objectives of the business
to enable us to evaluate the impairment assessment
performed by management.
We gained an understanding of the business, how it is
managed, and how the results are reported to
management and the Directors in order to understand
management’s determination that NZME constitutes
one CGU.
We tested the mathematical accuracy of the model by
reperforming the calculation of the recoverable
amount of the business, based on the same estimates
and assumptions used by management. We then
agreed the relevant net assets of the Group to the
audited carrying values.
We also assessed key estimates and assumptions made
by management. Our audit procedures included the
following:
 We gained an understanding of the business
process and controls applied by management
in their impairment assessment.
 We agreed the future cash flows included in
management’s model to the budgets and
forecasts approved by the Board of Directors.
 We considered the reasonableness of key
assumptions for both existing activities and
new ventures in the cash flow forecasts, in
particular revenue growth for each channel,
the expected trends of print and digital
revenues, forecast margins and terminal
growth rates. This was done with reference to
the historic performance of the Group, key
initiatives being undertaken and comparison
to the results of comparable companies and
available broker reports.
 We engaged an auditor’s expert to recalculate
a reasonable range for the weighted average
cost of capital used as the discount rate in the
model and determined that the discount rate

PwC 52

Key audit matter How our audit addressed the key audit matter
forecasted print and digital revenues.
The impairment assessment completed
by management calculated the
recoverable amount of the business as
higher than the carrying value of
applicable net assets and no impairment
was identified.
used by management was materially
consistent with this.
 We considered a range of reasonably possible
scenarios, including those identified by
management. For each scenario we tested the
mathematical accuracy of the changes made to
each assumption, and the impact of those
changes on the valuation and comparison to
the relevant net asset value of the Group.
We reviewed the disclosures in the financial
statements to ensure that they are compliant with the
requirements of the relevant accounting standards and
we have no other matters to report.

Information other than the financial statements and auditor’s report
The Directors are responsible for the annual report. Our opinion on the financial statements does not
cover the other information included in the annual report and we do not, and will not, express any
form of assurance conclusion on the other information.
In connection with our audit of the financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with
the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially
misstated. If, based on the work we have performed on the other information that we obtained prior to
the date of this auditor’s report, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard, except that
not all other information was available to us at the date of signing our auditor’s report.
Responsibilities of the Directors for the financial statements
The Directors are responsible, on behalf of the Company, for the preparation and fair presentation of
the financial statements in accordance with NZ IFRS and IFRS, and for such internal control as the
Directors determine is necessary to enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Group’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the Directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.




PwC 53

Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements, as a whole,
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report
that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee
that an audit conducted in accordance with ISAs NZ and ISAs will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located at the
External Reporting Board’s website at:
https://www.xrb.govt.nz/standards-for-assurance-practitioners/auditors-responsibilities/audit-report-1/
This description forms part of our auditor’s report.
Who we report to
This report is made solely to the Company’s shareholders, as a body. Our audit work has been
undertaken so that we might state those matters which we are required to state to them in an auditor’s
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 and the Company’s shareholders, as a body, for our
audit work, for this report or for the opinions we have formed.
The engagement partner on the audit resulting in this independent auditor’s report is Julian Prior.
For and on behalf of:






Chartered Accountants Auckland
21 February 2018

PwC 52

Key audit matter How our audit addressed the key audit matter
forecasted print and digital revenues.
The impairment assessment completed
by management calculated the
recoverable amount of the business as
higher than the carrying value of
applicable net assets and no impairment
was identified.
used by management was materially
consistent with this.
 We considered a range of reasonably possible
scenarios, including those identified by
management. For each scenario we tested the
mathematical accuracy of the changes made to
each assumption, and the impact of those
changes on the valuation and comparison to
the relevant net asset value of the Group.
We reviewed the disclosures in the financial
statements to ensure that they are compliant with the
requirements of the relevant accounting standards and
we have no other matters to report.

Information other than the financial statements and auditor’s report
The Directors are responsible for the annual report. Our opinion on the financial statements does not
cover the other information included in the annual report and we do not, and will not, express any
form of assurance conclusion on the other information.
In connection with our audit of the financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with
the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially
misstated. If, based on the work we have performed on the other information that we obtained prior to
the date of this auditor’s report, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard, except that
not all other information was available to us at the date of signing our auditor’s report.
Responsibilities of the Directors for the financial statements
The Directors are responsible, on behalf of the Company, for the preparation and fair presentation of
the financial statements in accordance with NZ IFRS and IFRS, and for such internal control as the
Directors determine is necessary to enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Group’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the Directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.




PwC 53

Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements, as a whole,
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report
that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee
that an audit conducted in accordance with ISAs NZ and ISAs will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located at the
External Reporting Board’s website at:
https://www.xrb.govt.nz/standards-for-assurance-practitioners/auditors-responsibilities/audit-report-1/
This description forms part of our auditor’s report.
Who we report to
This report is made solely to the Company’s shareholders, as a body. Our audit work has been
undertaken so that we might state those matters which we are required to state to them in an auditor’s
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 and the Company’s shareholders, as a body, for our
audit work, for this report or for the opinions we have formed.
The engagement partner on the audit resulting in this independent auditor’s report is Julian Prior.
For and on behalf of:






Chartered Accountants Auckland
21 February 2018

---

1

MEDIA RELEASE

22 February 2018


Solid earnings performance and 6.0 cent final dividend

NZME Limited (NZME) today reports solid earnings performance for the full year ended 31
December 2017. The result from NZME’s integrated media and entertainment business
featured continued Digital revenue growth, a slowing rate of decline in Print advertising
revenue and an improvement in Radio revenue trends over the year. NZME’s strong focus on
cost control and business integration assisted earnings.

FY 2017 highlights
 FY 2017 Statutory NPAT of $20.9 million compared to FY 2016 Statutory NPAT of
$74.5 million, impacted by demerger from HT&E Limited (formerly APN News &
Media) and discontinued businesses.
 Trading NPAT
1
of $26.7 million and Trading EPS
1
of 13.6 cents, down 4% compared to
Pro forma
1
FY 2016.
 Trading EBITDA
1
of $66.2 million, down 2% compared to Pro forma
1
FY 2016,
benefiting from a 5% reduction in operating costs.
 Trading Revenue
1
declined 4% compared to Pro forma
1
FY 2016 to $387.7 million.
 Fully imputed final dividend of 6.0 cents declared, bringing full year dividends to 9.5
cents; supplementary dividend for qualifying non-resident shareholders.

NZME’s Chairman Peter Cullinane said, “NZME’s strategy and the ongoing benefits of
integration continued to deliver value for shareholders in the 2017 financial year. The Board
is pleased to declare a final dividend of 6.0 cents per share”.

NZME’s audience grew 2% in FY 2017, reaching more than 3.2 million New Zealanders
2
, with
further benefits from the integration strategy evident in cross-pollination of brands. NZME’s
Print audience has been stable since 2015
2
, while strong growth in Digital audience continues
with monthly unique audience to the nzherald.co.nz up 12% in FY 2017
3
.

Operational and content initiatives in Radio in the last twelve months supported 2.7% growth
in Radio major market share in the key 18 to 54 year old demographic
4
. Survey highlights
included Newstalk ZB retained the highest station market share nationally, also winning a
number of other key categories
5
; and The Hits with Sarah, Sam & Toni growing their
audience in every survey since launch in early 2017
6
.


1
All Trading and Pro forma measures are non-GAAP measures that are explained and reconciled in the NZME Full Year 2017
Results Presentation dated 22 February 2018.
2
Nielsen CMI, November fused database: Q4 15 to Q3 17 (population 10 years +). Based on unduplicated weekly reach of
NZME newspapers, radio stations, and monthly domestic unique audience of NZME’s digital channels.
3
Nielsen Online Ratings, Domestic Unique Audience, 2016-2017.
4
GfK Radio Audience Measurement, Commercial Stations. NZME & Partners in Major Markets (top 13 markets). Trended till
T4/2017. Station Share %. Mon-Sun 12mn-12mn, 18-54.
5
GfK Radio Audience Measurement. Total NZ Survey, NZME & Partners. Trended till T4/2017. Cumulative Audience. Mon-Sun
12mn-12mn, All 10+.
6
GfK Radio Audience Measurement, The Hits. Auckland. Trended till T4/2017. Cumulative Audience. Mon-Fri 6am-9am, 25-54.

2

NZME Chief Executive Michael Boggs said, “2017 included a difficult third quarter, partly due
to national elections, however continued focus on our priorities and cost management
provided some offset. We are pleased to see the decline in Print advertising revenue slow a
little given stable Print readership and the success of our integrated sales strategies.”

NZME’s Radio revenue returned to growth in the fourth quarter, supported by operational and
content initiatives implemented over the last twelve months. These included the completion
of a nationwide sales team transformation, and the implementation of a new CRM system and
sales tools to support integrated sales and enhance customer understanding, both in the
second half.

“Strong Digital growth continues, powered in part by our great work in mobile and video
advertising. The implementation of the Washington Post arc software, as well as enhancing
the user experience, offers further revenue opportunities through innovative ad executions
and premium content inventory.

“Print subscriber revenues were stable for the year and we are happy to have outperformed
the market in both Print advertising revenue and circulation volume trends. We are increasing
engagement with our growing news, sport and entertainment audiences by enhancing
content and talent and addressing unmet customer needs by developing new revenue
streams,” said Mr. Boggs.

On 7 February 2018, NZME and Fairfax announced their intention to appeal the High Court’s
adverse ruling on the Stuff Limited (formerly Fairfax New Zealand)/NZME merger. Subject to
a final decision on the scope of appeal, it is expected that the matter will be heard in the
Court of Appeal in Q2 2018, with a judgment expected in the second half. There is a further
right of appeal to the Supreme Court with leave on points of general public interest. The
transaction remains subject to finance and shareholder approval. Merging with Stuff Limited
remains a priority to underwrite the competitiveness of New Zealand content generation and
delivery.

Outlook

Traditional advertising markets have continued to face headwinds in FY 2017, with a similar
climate expected in FY 2018.

While operational efficiency remains a focus, the rate of improvement in cost-out is slowing,
consistent with FY 2017, and therefore EBITDA is likely to continue to be pressured in the
near term. As previously outlined, NZME is reinvesting in growth initiatives such as DRIVEN,
YUDU and OneRoof, with revenue benefits from these expected to be realised over the
medium term.

NZME aims to deliver revenue and EBITDA growth in the medium term, supported by
revenue retention in the existing business and newly established revenue streams.

NZME’s strategy is based on a three horizon model of optimising core businesses; growing
new revenue streams that leverage existing audience and customer relationships; and re-
imagining revenue models to address unmet customer needs.

NZME has six key priorities for the current year to enhance shareholder value:

1. Grow audience and engagement through amplification of NZME’s brands and
increased focus on planned, unique, local and premium content, supported by
technology implementation;

3

2. Return advertising revenue to growth by retaining Print revenues, driving Digital
revenue growth and capitalising on Radio coverage, content and talent
enhancements;
3. Effective cost and capital management through reducing and leveraging our fixed cost
base; with a continued focus on balance sheet strength and delivering shareholder
returns;
4. Engage and develop our people through leadership and talent succession planning;
5. Grow new revenue streams through the launch of DRIVEN, YUDU and OneRoof,
improved data monetisation, developing a paid content proposition and identifying
new business models; and
6. Progress the Stuff merger to further improve our efficiency and underwrite the
competitiveness of New Zealand content generation and delivery.

Mr. Boggs said “I would like to thank the NZME team for all of their hard work in completing
our first full financial year as a standalone business; we have come a long way. We will
continue to work hard on our key priorities and I look forward to updating shareholders on
our progress.”

A fully imputed final dividend of 6.0 cents per share is scheduled for payment on Thursday, 3
May 2018 to those shareholders on the register on Wednesday, 18 April 2018.

All FY 2017 results materials can be found at:
www.nzx.com/markets/NZSX/securities/NZM/announcements

ENDS

For further information:

Michael Boggs
Chief Executive Officer
T: +64 9 367 6123
Email: Michael.Boggs@nzme.co.nz

Paddy Walker
Investor Relations Manager
M: +64 21 486 003
Email: Paddy.Walker@nzme.co.nz

Briefing Audio Recording:
There will be an audio recording of the full year results briefing, to be held at 10:00 a.m. NZT
on Thursday, 22 February 2018, including Q&A, made available later in the day at
www.nzme.co.nz/investor-relations/presentations-webcasts
About NZME
NZME is a leading New Zealand media and entertainment business that reaches more than
3.2 million kiwis
7
. Whether reading, listening, or watching, our audience gets the content
they want - where and when they want it. NZME offers advertisers a unique opportunity to
access its growing audience via a fully integrated multi-platform presence. NZME is listed on
the NZX Main Board (code NZM) with a foreign exempt listing on the ASX (code NZM).
www.nzme.co.nz

7
Nielsen CMI, November fused database: Q4 16 to Q3 17 (population 10 years +). Based on unduplicated weekly reach of
NZME newspapers, radio stations, and monthly domestic unique audience of NZME’s digital channels.

---

1

NZX/ASX RELEASE

22 February 2018

Solid earnings performance and 6.0 cent final dividend

NZME Limited results for the full year ended 31 December 2017

FY 2017 highlights
 FY 2017 Statutory NPAT of $20.9 million compared to FY 2016 Statutory NPAT of
$74.5 million, impacted by demerger from HT&E Limited (formerly APN News &
Media) and discontinued businesses.
 Trading NPAT
1
pf $26.7 million and Trading EPS
1
13.6 cents, down 4% compared to
Pro forma
1
FY 2016.
 Trading EBITDA
1
of $66.2 million, down 2% compared to Pro forma
1
FY 2016.
 Trading Revenue
1
declined 4% compared to Pro forma
1
FY 2016.
 Fully imputed final dividend 6.0 cents declared, bringing full year dividends to 9.5
cents; supplementary dividend for qualifying non-resident shareholders.
 Audience reach up 2% year on year to over 3.2 million
2
.
 Estimated market share gains in Print, Radio agency and Digital advertising
3
.
 Print advertising revenue trends improved in FY 2017.
 Radio revenue returned to growth in fourth quarter of FY 2017.
 Digital revenue growth of 18% in FY 2017.
 Costs reduced by a further 5% in FY2017.
 Improvements in leadership team engagement and talent developed across Newstalk
ZB, The Hits, Coast and ZM.
 Applied for leave to appeal on Stuff Limited (formerly Fairfax New Zealand) merger.
Financial summary

$m FY17
FY16
Pro forma
1

% Change
Trading Revenue
1
387.7 404.7 (4%)
Other Income 3.7 4.0 (6%)
Costs (325.3) (341.5) (5%)
Trading EBITDA
1
66.2 67.2 (2%)
Trading NPAT
1
26.7 27.8 (4%)
Statutory NPAT 20.9 74.5 (72%)
Final Dividend (cps) 6.0 6.0 -

1
All Trading and Pro forma measures are non-GAAP measures that are explained and reconciled in the NZME Full Year 2017
Results Presentation dated 22 February 2018.
2
Nielsen CMI, November fused database: Q4 15 to Q3 17 (population 10 years +). Based on unduplicated weekly reach of
NZME newspapers, radio stations, and monthly domestic unique audience of NZME’s digital channels.
3
PwC NPA Quarterly Performance Comparison Report Q4 2017. (3) SMI New Zealand Agency Advertising Expenditure Report
December 2017. (4) IAB / PWC New Zealand Q3 2017 Interactive Advertising Spend Report; digital excluding classifieds,
search and directories, and social media (NZ market only).

2

Full year summary
NZME Limited (NZME) today reports solid earnings performance from its integrated media
and entertainment business, supported by continued Digital revenue growth, a slowing rate
of decline in Print advertising revenue and an improvement in Radio revenue trends over the
year. NZME’s strong focus on cost control and business integration assisted earnings.

Trading Revenue
4
declined 4%, consistent with the 4% decline seen in FY 2016. Trading
EBITDA
4
decreased 2% on Pro forma
4
FY 2016, supported by a 5% reduction in costs as part
of an ongoing focus on efficiency.

NZME’s audience grew 2% year on year in FY 2017, reaching more than 3.2 million New
Zealanders
5
. Print audience has been stable since 2015
5
, while Radio listenership and share
has continued to grow since 2016
6
and nzherald.co.nz unique audience grew 12% year on
year in FY 2017
7
.

Net debt was $90.2 million at 31 December 2017, down from $95.9 million at 31 December
2016. The reduction in net debt was supported by healthy cash flows and modest capital
expenditure in line with budget and occurred notwithstanding the payment of healthy
dividends. Capital expenditure was $15.0 million in FY 2017, compared to $14.9 million in FY
2016. Gearing and liquidity ratios are sound and NZME retains undrawn bank facilities of
$60.0 million.

Trading NPAT
4
of $27.8 million and Trading EPS
4
of 13.6 cents were both 4% lower than FY
2016. The fully imputed final dividend of 6.0 cents per share is scheduled for payment on 3
May 2018 and brings full year dividends to 9.5 cents per share, in line with the dividend
policy of 60-80% of underlying NPAT. Once again, a supplementary dividend will be paid to
qualifying non-resident shareholders.

The FY 2016 Statutory Result is not considered reflective of the NZME business going forward
due to the demerger from HT&E (formerly APN), divestments, tax payments, and the
inclusion of the previous ownership interest in the Australian Radio business. Reconciliations
of Statutory, and non-GAAP Trading and Pro forma measures are shown in the Full Year 2017
Results Presentation dated 22 February 2018.

Print

Pro forma
4
Print revenue declined 7% to $221.3 million in FY 2017, excluding the impact of
business divestments. Print remains as NZME’s largest revenue segment, representing 57%
of total NZME FY 2017 Trading Revenue
4
, comprising of Print advertising revenue (31% of
group Trading Revenue
4
), Print circulation revenue (21%) and other Print revenue (4%).

In FY 2017, the rate of decline in Print advertising revenue slowed to 9%, from 10% in Pro
forma
4
FY 2016. This was despite a challenging third quarter, impacted by reduced spending
ahead of the NZ general election in September 2017 and a slowing property market. NZME’s

4
All Trading and Pro forma measures are non-GAAP measures that are explained and reconciled in the NZME Full Year 2017
Results Presentation dated 22 February 2018.
5
Nielsen CMI, November fused database: Q4 15 to Q3 17 (population 10 years +). Based on unduplicated weekly reach of
NZME newspapers, radio stations, and monthly domestic unique audience of NZME’s digital channels.
6
GfK Radio Audience Measurement, Commercial Stations. NZME & Partners in Major Markets (top 13 markets), trended till
T4/2017. Station Share %. Mon-Sun 12mn-12mn, 18-54.
7
Nielsen Online Ratings, Domestic Unique Audience, 2016-2017.

3

strong focus on realising the benefits of the integrated sales model supported growth in Print
advertising market share to 42%, compared to an average of 40% in FY 2016
8
.

Circulation revenue declined 3% in FY 2017, largely due to retail volume pressures. This was
partially offset by cover price increases across the majority of NZME’s titles in the fourth
quarter. Subscriber revenue was stable in FY 2017, with a subscriber volume decline of 4%
offset by yield management.

Other Print revenue, relating to printing and distribution services provided to external parties,
decreased 10% year on year, due to lower third party circulation volume.

The New Zealand Herald’s average issue readership has remained stable since 2015 and the
Herald on Sunday remains the most-read and highest-selling Sunday Newspaper in the
country
9
. NZME’s 5% decline in average net circulation volumes to the third quarter of 2017
outperformed the estimated market rate of decline of 7% over the same period
9
.

The NZ Herald’s daily brand audience, which includes digital, passed one million readers for
the first time in the third quarter 2017
10
, reflecting the strength of the NZ Herald brand and
NZME’s continued success in growing audience reach.

Radio and Experiential

Radio and Experiential revenue declined 4% to $110.1 million in FY 2017, an improvement on
the 6% decline in FY 2016 and contributing 28% of total NZME FY 2017 Trading Revenue
11
.
Positive audience growth was reflected in increased agency revenue over the year,
outperforming the market in this segment.

Audience growth in the key 18 to 54 year old demographic also supported overall Radio
revenue returning to growth in the fourth quarter year on year. NZME’s share of this
demographic in the top 13 major markets in New Zealand has increased 2.7% since 2016
12
.
Survey highlights included Newstalk ZB retained the highest station market share nationally,
also winning a number of other key categories
13
; and The Hits with Sarah, Sam & Toni
growing their audience in survey since launch in early 2017
14
.

The direct market has been slower to respond to audience improvements due to differences
in buying behaviours, however, total Radio revenues returned to growth in the fourth quarter
of 2017, supported by operational and content initiatives implemented during the year.

These initiatives including completion of a nationwide sales team transformation, with all
direct frontline staff now equipped to sell Radio, and implementation of a new targeted
incentive scheme, both in the second half. NZME’s new CRM system and suite of sales tools
will support the integrated sales model and enhance customer understanding. Further
benefits from these initiatives, and recent audience growth, are expected to be realised in the
current financial year.

8
PwC NPA Quarterly performance comparison report Q1 2016 – Q4 2017.
9
Nielsen CMI, NZ Herald AIR trend to Q3 17. AP15+. ABC Circulation Q4 16 - Q3 17.
10
Nielsen CMI Q4 2016 – Q3 2017. AP15+.
11
All Trading and Pro forma measures are non-GAAP measures that are explained and reconciled in the NZME Full Year 2017
Results Presentation dated 22 February 2018.
12
GfK Radio Audience Measurement, Commercial Stations. NZME & Partners in Major Markets (top 13 markets) Trended till
T4/2017. Station Share %. Mon-Sun 12mn-12mn, 18-54.
13
GfK Radio Audience Measurement. Total NZ Survey, NZME & Partners. Trended till T4/2017. Cumulative Audience. Mon-Sun
12mn-12mn, All 10+.
14
GfK Radio Audience Measurement, The Hits Auckland, trended till T4/2017. Cumulative Audience. Mon-Fri 6am-9am, 25-54.