Chorus 2018 half year result & report

Chorus Limited
Level 10, 1 Willis Street
P O Box 632
Wellington 6140
New Zealand
Email: company.secretary@chorus.co.nz







STOCK EXCHANGE ANNOUNCEMENT

26 February 2018


Chorus 2018 half year result & report

The following are attached in relation to Chorus’ half year result and report for the
period to 31 December 2017:

1. Media Release
2. Investor Presentation
3. Half Year Report
4. NZX Appendix 1
5. NZX Appendix 7
6. Letter to investors

Chief Executive Officer Kate McKenzie, and Chief Financial Officer Andrew Carroll, will
discuss the half year result by webcast at 10.00am New Zealand time today. The
webcast will be available at www.chorus.co.nz/webcast.



ENDS


For further information:


Nathan Beaumont
Media and PR Manager
Phone: +64 4 896 4352
Mobile: +64 (21) 243 8412
Email: nathan.beaumont@chorus.co.nz

Brett Jackson
Investor Relations Manager
Phone: +64 4 896 4039
Mobile: +64 (27) 488 7808
Email: brett.jackson@chorus.co.nz

---

Chorus
Half Year Report
For the six months ended 31 December 2017

Half Year Report
P | b
FIXED LINE CONNECTIONSBROADBAND CONNECTIONSFIBRE CONNECTIONS
NET PROFIT AFTER TAXEBITDA
1
ADJUSTED EBITDA
2
Half year result overview
1 Earnings before interest, income tax, depreciation and amortisation (EBITDA) is a non-GAAP profit measure.
We monitor this as a key performance indicator and we believe it assists investors in assessing the performance
of the core operations of our business.
2 Adjusted to reflect the effect new NZ IFRS accounting standards adopted in HY18 would have had if they had
applied in HY17.
3%
1,602,0001,559,000
1,186,000
1,181,000
0.4%
$66m
HY17
$47m
HY18
$335m
HY17
$329m
HY18
DIVIDEND
8.5cps
HY17
9cps
HY18
$361m
2
HY17
$329m
HY18
Operating update 1
Operating results 4
Dividends, equity and capital management 6
Outlook 7
Financial statements 10
Glossary 29
Contents
23%
305,000
375,000
FY17HY18FY17HY18FY17HY18

Half Year Report
P | 1
PATRICK STRANGE
Chairman
KATE MCKENZIE
Chief Executive
Dear Investors
Our focus in the first six months of the financial
year has been on implementing a range of
initiatives originating from the strategic review
we talked about in the 2017 Annual Report.

That review considered the longer term outlook
and opportunities for our business, increased
competition from wireless technologies, ongoing
careful management of costs, the potential
regulatory requirements under a utility style
framework and the need to continue improving
the end-to-end experience for customers.
We continued our campaign to promote better
broadband and this, coupled with an expanded
field force, helped drive a strong increase in fibre
and VDSL uptake while also slowing connection
losses to other networks significantly. Wider
retailer adoption of automated fibre provisioning,
together with other process improvements,
allowed us to review our internal structure and
we expect to reduce our internal workforce by
10% from August 2017 levels over the course of
FY18. Despite the pressures in the New Zealand
construction industry, we’ve kept our fibre rollout
costs within plan and we’re maintaining a tight
focus on other costs.
We achieved net profit after tax of $47 million
and EBITDA of $329 million. This was down from
EBITDA of $361 million for same period last year
when adjusted to allow for new accounting
standards.
1
A fully imputed interim dividend of
9 cents per share will be paid on 17 April 2018
and the dividend reinvestment plan is available
for New Zealand and Australian shareholders
who register their intention to participate by
5:00pm (NZ time) on 21 March 2018.
1. Operating update
An increase in the number of fibre field crews
from 615 in June to about 700 in December
helped us complete fibre network installations
Chorus Board and
Management overview
1 The adoption of three new accounting standards has affected results for the current period with changes in the treatment
of operating leases and capitalisation of some costs which were expensed in HY17.

Half Year Report
P | 2
for a record 77,000 customers, up from about
62,000 in the prior six months. Importantly,

from a customer experience perspective,
national weighted average lead times reduced
from 22 days to 14 days despite the record order
volumes. Customer satisfaction remained flat

at an average of 7.4 out of 10 across the period.
However, our ongoing trials of alternative
migration methods, including localised
campaigns, both on our own and in conjunction
with retailers, showed that customer satisfaction
scores of up to 8.6 are achievable.
We’re pleased that our long-term ultra-fast
broadband (UFB) capital expenditure programme
remains on track and budget. In August 2017

we announced a further agreement with the
Government to extend our UFB rollout to about
54,500 more premises across about 200 towns
and rural communities. This is expected to result
in further communal rollout investment of
between $135 million and $155 million. The
Government will provide financing of $2,000

per premises passed, or up to $109 million in
Crown Infrastructure Partners equity securities,
equating to approximately 75% of the expected
communal rollout investment. We also agreed to
complete our current UFB2 rollout in December
2022, two years earlier than initially planned.
When we’ve finished this work, more than

1.3 million customers will be able to connect
to our fibre. That’s about three-quarters of the
87% of New Zealanders to be covered by the
UFB programme, with the balance provided
by other local fibre companies.
Our shift to being a more active wholesaler
through our ask for better campaign and

related efforts to support retailers helped slow
line loss significantly, from a decline of 76,000
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
% uptake
UFB connectionsUFB available addressesPlanned footprint
Uptake – % of available connections
Number of connections
Figure 1:
UFB rollout and uptake
DEC - 22
DEC - 17
SEP - 17
MAR - 17
JUN - 17
DEC - 16
JUN - 16
SEP - 16
DEC - 15
MAR - 16
SEP - 15
JUN - 15

Half Year Report
P | 3
connections in the six months to 30 June 2017,
to 43,000 in the period to 31 December 2017.
Total connections reduced from 1,602,000 to
1,559,000 for the period. Within this total, the
number of customers taking a broadband

service from us reduced by 5,000 connections.
As expected, most line loss is occurring in those
areas where the other local fibre companies

have partnered with the Government under the
UFB initiative, followed by those areas where
vertically integrated fixed wireless retailers are
promoting their networks.
The addition of 68,000 fibre connections in

our UFB areas grew our overall fibre uptake from
35% to 42% in our completed rollout areas, even
as we built the fibre network past another 40,000
potential customers. That’s more than double

the 2020 uptake target of 20% included in our
original UFB contract with the Government.
We experienced strong growth in VDSL
copper-based broadband with 76,000
connections added as some retailers began
migrating their existing customers from ADSL

to VDSL. This is a great outcome for customers
because, as we’ve noted before, many were
unaware a better VDSL service was already
widely available and often at no extra cost
because we charge the same rate for ADSL

and VDSL broadband services. The combination
of fibre and VDSL uptake means 58% of our
broadband connections are on better broadband,
up from 45% at the end of June 2017.
We continued to invest in improving the
performance of our copper network for
customers. A $20 million programme to deploy
VDSL vectoring technology began in rural and
local fibre company areas. This has the potential
to improve VDSL broadband performance for up
to 260,000 addresses in these areas, including
about 37,000 rural addresses where connections
could be capable of speeds above 50Mbps.

Half Year Report
P | 4
2. Operating results
2.1 Operating revenue
Revenues of $499 million were down compared
to revenue of $529 million for the six months
to 31 December 2016. This largely reflects the
reduction in total connections over the last year,
particularly the reduction in copper based voice
and broadband lines as customers migrated

to competing fibre and wireless networks.
The number of copper-based data services
connections also continued to decline as retailers
transitioned customers from these legacy services
to cheaper fibre services either on our UFB
network, or on other local fibre company networks.
These declines in connections revenue were
partially offset by the strong growth in fibre
broadband (GPON) connections, with revenues
increasing $36 million relative to the first six
months of FY17, and increases in regulated copper
pricing applicable in December each year. Fibre
revenues have been supported by the uptake of
higher speed services. The total number of
customers on entry level 50Mbps fibre services
has begun to reduce and, by 31 December 2017,
100Mbps fibre services made up about 64% of our
GPON fibre connections, up from 52% at
31 December 2016. There were approximately
20,000 customers on gigabit services, including
about 10,000 in the Dunedin ‘gigatown’ area
where we are currently providing sponsored
pricing at the equivalent of entry level prici
ng.
Fibre premium (P2P) revenues were up slightly,
although the make-up of these revenues continues
to change as customers migrate from legacy
services to lower cost inputs.
CONNECTIONS
31 DEC 2016
CONNECTIONS
30 JUNE 2017
CONNECTIONS
31 DEC 2017
Unbundled copper99,00082,00068,000
Baseband copper343,000313,000290,000
Fibre broadband (GPON)231,000292,000362,000
Copper VDSL199,000244,000320,000
Copper ADSL784,000650,000499,000
Data services (copper)9,0008,0007,000
Fibre premium (P2P)13,00013,00013,000
Total fixed line connections
1,678,0001,602,0001,559,000
Figure 2:
Chorus connections summary

Half Year Report
P | 5
Field services revenue was down $7 million
relative to the same period in FY17. This largely
reflects a continued reduction in chargeable
copper provisioning work as more customers
migrate to fibre services, where first time
connections are treated as capital expenditure.
Other revenue categories were flat
.
2.2 Operating expenses
Expenses of $170 million for the six months to
31 December 2017 were $2 million higher than
adjusted expenses
2
of $168 million for the six
months to 31 December 2016 reflecting slight
increases in labour, IT and consultancy costs.
Management has been implementing a series
of initiatives in the period that should become
evident in financial results in the second half
of FY18.
Labour costs
Labour costs of $39 million represent staff costs
that are not capitalised. At 31 December 2017

we had 971 permanent and fixed term employees,
up from 963 employees at 31 December 2016.
However, wider retailer adoption of automated
fibre provisioning, together with other process
improvements, allowed us to review our internal
structure and we expect to reduce our internal
workforce by 10% from August 2017 levels over
the course of FY18. There were one-off
restructuring costs of about $1 million in the
period. A review of business support functions

is currently underway.
Network maintenance costs
Network maintenance costs were largely flat
compared to the same period in FY17. This was
despite the total number of connections on
our network having decreased and reflects
a continuing programme of proactive fault
management to ensure good quality of service
for customers, a period of particularly wet
weather, a higher incidence of underground
faults leading to a higher average cost per fault
than the prior period, and inflation related
increases for service company costs.
Information Technology
IT costs remained flat when NZ IFRS 15
adjustments that applied for the first time in HY18
are excluded. Increasing costs from inflation are
being offset by ongoing tight cost control.
Provisioning costs
Provisioning costs are incurred where we provide
new or changed service to our customers. Field
provisioning costs have declined as fibre uptake
increases and fewer truck rolls are required for
copper services. In addition, NZ IFRS 15 provides
for the capitalisation of costs associated with
customer acquisition and retention which resulted
in $12 million of copper based provisioning costs
being capitalised for the period.
2.3 Depreciation and amortisation
Depreciation continues to increase slightly,
reflecting the net effect of significant new
investment and the very long lives of these
assets. Capitalisation of costs relating to

NZ IFRS 15 and NZ IFRS 16 resulted in
$3 million additional depreciation and
$21 million additional amortisation for the
period. The amortisation of Crown funding
against these assets continues to increase and
partially offset the increase in depreciation.
2 To reflect the effect of the adoption of NZ IFRS 15 and 16 on the prior year.

Half Year Report
P | 6
2.4 Finance expenses
Interest on debt (EMTN, fixed rate NZD bonds
and syndicated bank facilities) has decreased
in the current period, reflecting the move to
cheaper funding.
The adoption of NZ IFRS 9 has resulted in
accounting hedging relationships more closely
matching the economic relationships. This
means that much of the ineffectiveness which
was previously accounted for through finance
expense is now flowing through the hedging
reserves, which will reduce the volatility of
finance expense.
2.5 Capital expenditure
Gross capital expenditure for the six months to
31 December 2017 was $391 million, an increase
of $89 million above the same period in FY17.
This mostly reflected additional UFB deployment
work to include UFB2 areas, the growth in fibre
connection volumes and $34 million of costs
that are now capitalised following the adoption
of NZ IFRS 15. The latter included $5 million of
fibre-related spend and $29 million of copper-
related expenditure.
We invested $113 million in the rollout of the
UFB communal network, with a further 32,000
premises passed at an average cost of $1,623.
The average cost is expected to reduce to within
our guidance range of $1,500 to $1,600 by the
end of FY18 as significantly more premises are
completed in the second half.
Fibre connections and layer 2 spend was
$145 million. We built new fibre connections
to 77,000 customers nationwide in the six
month period. The average cost per premises
connected for standard residential premises,
including service desk costs and some non-
standard single dwelling unit connections, was
$1,102, excluding the long run average cost of
layer 2 equipment. This was in the lower half of
the FY18 guidance range of $1,050 to $1,200.
Spend on other fibre connections and growth
was up by $8 million on the six months to
31 December 2016 as we began work on UFB2
backhaul and a pole replacement programme
in UFB areas, and we saw a continued increase
in greenfields work.
Copper capital expenditure was $64 million
for the period, an increase of $40 million on
the prior comparative period, with $29 million
reflecting the accounting changes mentioned
above. Network sustain spend increased by
$7 million as a result of more proactive
maintenance and roadworks related projects,
with the latter undertaken on a cost recovery
basis. Copper layer 2 spend was up by $4 million
as we undertook a significant programme of
work to enhance copper broadband
performance in selected areas through the
deployment of VDSL vectoring technology.
Common capex was in line with the same
period in FY17.
3. Dividends, equity and capital
management
We will pay an interim dividend of 9.0 cents per
share on 17 April 2018 to all holders registered at
5:00pm 20 March 2018. The dividends paid will
be fully imputed, at a ratio of 28/72, in line with
the corporate income tax rate. A supplementary
dividend of 1.6 cents per share will be payable

to shareholders who are not resident in
New Zealand.
The dividend reinvestment plan will apply for

the interim dividend at a discount rate of 3%.
Shareholders who have previously elected to
participate in the dividend reinvestment plan

Half Year Report
P | 7
do not need to take any further action. For those
shareholders who wish to participate, election
notices to participate must be received by
5:00pm (NZ time) on 21 March 2018.
A final dividend of 13.0 cents per share is
expected to be declared in August 2018, subject
to no material adverse changes in circumstances
or outlook.
The Board considers that a ‘BBB’ or equivalent
credit rating is appropriate for a company such as
Chorus. It intends to maintain capital management
policies and financial policies consistent with
these credit ratings. At 31 December 2017, we had
a long term credit rating of BBB/stable outlook by
Standard & Poor’s and Baa2/stable by Moody’s
Investors Service.
4. Outlook
4.1 Regulatory framework transition and
market reviews
A key focus in the next six months and beyond
will be the Government’s steps towards
implementing a utility style regulatory framework
for fibre. There has been widespread support to
move to a building block regulatory model, as
used for electricity and gas networks, through
extensive policy development since the
Telecommunications Act Review began in 2013.
Draft legislation was introduced to Parliament
in August 2017 and a parliamentary Select
Committee is scheduled to report back on the
Bill in late March. When the framework is passed
into law, it will be subject to interpretation and
implementation by the Commerce Commission.
We support the Bill and have made a submission
recommending amendments to help achieve its
policy aims, support prompt implementation by
2020 and ensure the new regulatory regime is
durable. Some of our key proposals include:
• reducing the maximum transition period to
six months from 24 months and ensuring key
elements of the new regime such as copper
deregulation, the determination of the initial
regulated asset base and weighted average
cost of capital, are prioritised
• avoiding potential complexity, delay and
unnecessary shocks for consumers or
investors by providing greater guidance
on the treatment of Crown financing under
the UFB contracts and the approach to
determining financial losses
• incentivising ongoing network innovation
and investment by enabling next generation
technology neutral services, other than
fibre-to-the-premises access, to be
included within the regulatory framework
and made available to innovative non-telco
wholesale customers
• ensuring the regime has flexibility to
accommodate future policy decisions and/or
modernisation of our Telecommunications
Services Obligations affecting the 13% of
New Zealanders where fibre is not planned
The Commission is currently consulting industry
on the scope of a planned study of the mobile
market in New Zealand, to look at the competitive
landscape and any emerging competition issues.
We consider the relative pricing between mobile
and fixed wireless services, the comparatively

low penetration of mobile virtual network
operators, and the potential for shared open
access infrastructure and spectrum to benefit

the rollout of 5G networks, are some of the
topics worthy of further analysis.
In addition, the Commission announced in
January 2018 that it was restarting its study of
the backhaul market to explore whether the
current regulation for backhaul is fit for purpose.

Half Year Report
P | 8
4.2 Customer and cost focus
Our strategic review identified the clear need to
continue improving the end-to-end experience
for customers, as well as to reduce overall costs.
This means we need to develop our build tactics,
systems and industry processes in a way that
streamlines customer effort. These are not
necessarily simple or quick changes, but we
expect to start seeing the benefits of our initial
programme of work in our end of year results.
Recent changes to land access legislation
provided an opportunity for us to revisit our
processes for multi-dwelling and rights of
way connections. These types of connections
often result in the lowest customer satisfaction
results because of the time and complexity
involved for both us and customers.
Our goal is to reduce the customer effort involved
in the transition to a simple fibre connection to
less than a day. We want to achieve this within

18 months and although our initial trials of
different migration approaches have shown

early promise, there’s a long way to go.
The extension and acceleration of our UFB
rollout also demands that we consider our
longer term cost structure in the context of
the likely future regulatory environment and
a much reduced copper network footprint.
Focused fibre migration activities will make
even more economic sense in smaller
population centres and should help realise
cost benefits earlier through reduced copper
maintenance activity.
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23:45
June 2016
June 2017Jan 2018
6am3pm
Peak 1,274 Gbps
Network Throughput (Gbps)
Time of day
Note: data represents average of traffic across all
days in the month, excluding corporate traffic.
1,300
0
100
200
300
400
500
600
700
800
900
1,000
1,100
1,200
6pm9pm
Figure 3:
Chorus network throughput by time of day (monthly average)
18%

Half Year Report
P | 9
4.3 Market developments
Industry commentators have highlighted the
importance of fixed line networks to connect
and power the substantial increase in wireless
base stations likely to be needed by 5G networks.
Looking to the future, we began trialling new
ways we may be able to use our network to
provide new technology solutions for customers.
This included a trial with government organisation
Network for Learning to extend a low decile
school’s managed internet service to local homes
by using wireless technology mounted on our
poles, powered via existing copper cabling

and connected by VDSL and fibre backhaul.
In December we started a proof of concept trial
for a Long Range Wide Area Network to enable
Internet of Things services, again using our
existing copper network to power a pole-
mounted access point that can monitor
hard-to-access locations, such as underground
wastewater or sewage pumping stations.
We remain in the midst of a very clear global
trend, the thirst for data. Average monthly usage
per household on our network was 174 Gigabytes
in December compared to about 155 Gigabytes in
June. On 10 December 2017 about 1,328 gigabits
per second, or the equivalent of about 260,000
HD video streams being watched simultaneously,
was used on our network at 9:25pm.
This was a new record for traffic on our network
and reflects customers using more data, both
as a natural consequence of moving to better
broadband services and as smart TVs and other
devices make it easier to stream video online.
TVNZ On Demand, for example, reportedly
has 1.8 million subscribers and recent Nielsen
research suggests Netflix access has grown to
about 1.2 million New Zealanders. The ability
to access streamed content continues to grow
with Vodafone launching a fibre-based TV
service in October 2017.
We expect data usage to continue to grow
as more smart home devices connect to the
internet, enabled by new generation Wi-Fi mesh
systems, smart speakers and personal assistants.
These trends explain why a growing number
of retailers are choosing to only sell unlimited
data plans. This includes Contact Energy, the
largest electricity retailer to now enter the
broadband market. Retail competition has
tended to focus on 100Mbps services to date,
but there are signs this may be changing with
some retailers now promoting gigabit unlimited
fibre services for less than $100 per month.
We look forward to continuing to work with
retailers to grow the broadband market and
develop new ways in which our network assets
can benefit New Zealanders.
PATRICK STRANGE KATE MCKENZIE
Chairman Chief Executive
26 February 2018

Half Year Report
P | 10
Half Year Report
Financial Statements
For the six months ended 31 December 2017
P | 10

Half Year Report
P | 11
Condensed consolidated income statement
FOR THE SIX MONTHS ENDED 31 DECEMBER 2017
(DOLLARS IN MILLIONS)NOTE
SIX MONTHS
ENDED
31 DEC 2017
UNAUDITED
$M
SIX MONTHS
ENDED
31 DEC 2016
UNAUDITED
$M
YEAR
ENDED
30 JUNE 2017
AUDITED
$M
Copper based voice 6983163
Copper based broadband219263501
Data services copper141732
Fibre broadband (GPON)9054123
Fibre premium (P2P)403979
Value added network services171734
Infrastructure121123
Field services products354276
Other 3 39
Total operating revenue
4995291,040
Labour costs (39) (38) (74)
Provisioning (4) (24) (43)
Network maintenance (43) (42) (87)
Other network costs (15) (15) (27)
Information technology costs (27) (30) (60)
Rent and rates (5) (8) (17)
Property maintenance (6) (5) (13)
Electricity (8) (7) (14)
Insurance (1) (2) (3)
Consultants (3) (1) (10)
Regulatory levies (7) (7) (13)
Other (12) (15) (27)
Total operating expenses
1
(170) (194) (388)
Earnings before interest, income tax,
depreciation and amortisation
329 335 652
Depreciation
2
(139) (132) (274)
Amortisation
3
(53) (32) (65)
Earnings before interest and income tax
137 171 313
Finance income
4 6 10
Finance expense1, 9
(74) (84) (164)
Net earnings before income tax
67 93 159
Income tax expense (20) (27) (46)
Net earnings for the period
47 66 113
Earnings per share
Basic earnings per share (dollars)0.12 0.17 0.28
Diluted earnings per share (dollars)0.10 0.14 0.23

Half Year Report
P | 12
Condensed consolidated statement
of comprehensive income
FOR THE SIX MONTHS ENDED 31 DECEMBER 2017
(DOLLARS IN MILLIONS)NOTE
SIX MONTHS
ENDED
31 DEC 2017
UNAUDITED
$M
SIX MONTHS
ENDED
31 DEC 2016
UNAUDITED
$M
YEAR
ENDED
30 JUNE 2017
AUDITED
$M
Net earnings for the period
4766113
Other comprehensive income
Items that will be reclassified
subsequently to profit and loss when
specific conditions are met
Ineffective portion of changes
in fair value of cash flow hedges
9
2 (1) 12
Effective portion of changes
in fair value of cash flow hedges
9
- 9 (7)
Amortisation of de-designated cash flow
hedges transferred to income statement
9
(1) (1) (1)
Movement in cost of hedging reserve
9
1--
Other comprehensive income net of tax
274
Total comprehensive income
for the period net of tax
49 73 117

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P | 13
Condensed consolidated statement of financial position
AS AT 31 DECEMBER 2017
(DOLLARS IN MILLIONS)NOTES
31 DEC 2017
UNAUDITED
$M
31 DEC 2016
UNAUDITED
$M
30 JUNE 2017
AUDITED
$M
Current assets
Cash and call deposits 40155170
Income tax receivable11 -1
Trade and other receivables211173139
Derivative financial instruments91 - 1
Finance lease receivable545
Total current assets
268332316
Non-current assets
Derivative financial instruments932 - -
Trade and other receivables7107
Software and other intangibles3185143142
Network assets24,1953,8113,973
Total non-current assets
4,4193,9644,122
Total assets
4,6874,2964,438
Current liabilities
Trade and other payables341345346
Income tax payable -7 -
Finance lease payable110 - -
Derivative financial instruments915846
Total current liabilities excluding Crown funding
352410392
Current portion of Crown funding6201819
Total current liabilities
372428411
Non-current liabilities
Derivative financial instruments9 203214231
Finance lease payable1 200150159
Debt41,7811,5971,609
Deferred tax payable215194202
Total non-current liabilities excluding
CIP and Crown funding
2,3992,1552,201
Crown Infrastructure Partners (CIP) securities5219165203
Crown funding6684629679
Total non-current liabilities
3,3022,9493,083
Total liabilities
3,6743,3773,494
Equity
Share capital571504520
Reserves(27)(19)(22)
Retained earnings 469434446
Total e quit y
1,013919944
Total liabilities and equity
4,6874,2964,438

Half Year Report
P | 14
Condensed consolidated statement of changes in equity
FOR THE SIX MONTHS ENDED 31 DECEMBER 2017
(DOLLARS IN MILLIONS)NOTE
SHARE
CAPITAL
$M
RETAINED
EARNINGS
$M
HEDGING
RELATED
RESERVES
$M
TOTAL
$M
Balance at 30 June 2017 (AUDITED)
520446 (22)944
Impact of adopting NZ IFRS 9 at 1 July 2017
1
- 7 (7) -
Impact of adopting NZ IFRS 15 at 1 July 2017
1
-20 -20
Balance at 1 July 2017
520473(29)964
Comprehensive income
Net earnings for the period -47 -47
Other comprehensive income
Ineffective portion of changes in fair
value of cash flow hedges
- -22
Amortisation of de-designated cash flow
hedges transferred to income statement
- - (1) (1)
Movement in cost of hedging reserve - -11
Total comprehensive income
-47249
Contributions by and (distributions to) owners:
Dividends - (51) - (51)
Supplementary dividends - 6 - 6
Tax credit on supplementary dividends - (6) - (6)
Dividend reinvestment plan28 - -28
Issue of new shares2323
Total transactions with owners
51 (51) - -
Balance at 31 December 2017 (UNAUDITED)
571469 (27) 1,013

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(DOLLARS IN MILLIONS)
SHARE
CAPITAL
$M
RETAINED
EARNINGS
$M
HEDGING
RELATED
RESERVES
$M
TOTAL
$M
Balance at 30 June 2016 (AUDITED)
481416 (26)871
Comprehensive income
Net earnings for the period - 66 - 66
Other comprehensive income
Ineffective portion of changes in fair
value of cash flow hedges
- - (1) (1)
Effective portion of changes in fair value
of cash flow hedges
- - 99
Amortisation of de-designated cash flow
hedges transferred to income statement
- - (1) (1)
Total comprehensive income
- 667 73
Contributions by and (distributions to) owners:
Dividends - (48) - (48)
Supplementary dividends - 5 - 5
Tax credit on supplementary dividends - (5) - (5)
Dividend reinvestment plan 23 - -23
Total transactions with owners
23 (48) - (25)
Balance at 31 December 2016 (UNAUDITED)
504434 (19)919
Balance at 1 July 2016
481416 (26)871
Comprehensive income
Net earnings for the period - 113 - 113
Other comprehensive income
Ineffective portion of changes in fair
value of cash flow hedges
- - 12 12
Effective portion of changes in fair value
of cash flow hedges
- - (7) (7)
Amortisation of de-designated cash flow
hedges transferred to income statement
- - (1) (1)
Total comprehensive income
- 1134 117
Contributions by and (distributions to) owners:
Dividends - (83) - (83)
Supplementary dividends - 9 - 9
Tax credit on supplementary dividends - (9) - (9)
Dividend reinvestment plan 40 - - 40
Employee share plan (1) - - (1)
Total transactions with owners
39 (83) - (44)
Balance at 30 June 2017 (AUDITED)
520446 (22)944

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P | 16
Condensed consolidated statement of cash flows
FOR THE SIX MONTHS ENDED 31 DECEMBER 2017
(DOLLARS IN MILLIONS)
SIX MONTHS
ENDED
31 DEC 2017
UNAUDITED
$M
SIX MONTHS
ENDED
31 DEC 2016
UNAUDITED
$M
YEAR
ENDED
30 JUNE 2017
AUDITED
$M
Cash flows from operating activities
Cash was provided from/(applied to):
Cash received from customers
448 548 1,070
Finance income 2 46
Payment to suppliers and employees (204) (226) (397)
Taxation paid (25) (20) (38)
Interest paid (63) (56) (117)
Net cash flows from operating activities
158 250 524
Cash flows applied to investing activities
Cash was provided from/(applied to):
Purchase of network assets and software
and intangible assets
(384) (307) (638)
Capitalised interest paid (1) (2) (4)
Net cash flows applied to investing activities
(385) (309) (642)
Cash flows from financing activities
Cash was provided from/(applied to):
Net proceeds from finance leases
2 23
Crown funding (including CIP securities)2520 117
Issuance of share capital23 - -
Proceeds from debt 70780785
Repayment of debt - (665) (675)
Dividends paid (23) (25) (44)
Net cash flows from financing activities
97112186
Net cash flow
(130) 53 68
Cash at the beginning of the period 170 102 102
Cash at the end of the period
40 155 170

Half Year Report
P | 17
Notes to the financial statements
Reporting entity and statutory base
Chorus includes Chorus Limited together with its subsidiaries as at and for the six months ended
31 December 2017.
Chorus is New Zealand’s largest fixed line communications infrastructure service provider. It maintains
and builds a network predominantly made up of local telephone exchanges, cabinets, copper and

fibre cables.
Chorus Limited is a profit-oriented company registered in New Zealand under the Companies Act
1993 and a FMC Reporting Entity for the purposes of the Financial Markets Conduct Act 2013.
The condensed consolidated interim financial statements have been prepared in accordance with the
New Zealand equivalent to International Accounting Standard No. 34: “Interim Financial Reporting”
and Generally Accepted Accounting Practice in New Zealand (NZ GAAP). These financial statements
are prepared in New Zealand dollars. These condensed consolidated interim financial statements do
not include all of the information required for the full annual financial statements and should be read
in conjunction with the consolidated financial statements of Chorus as at and for the year ended
30 June 2017.
The measurement basis adopted in the preparation of these financial statements is historical cost,
modified by the revaluation of financial instruments as identified in the specific accounting policies
disclosed in the notes to the consolidated financial statements for the year ended 30 June 2017
and described in note 9 to these condensed consolidated interim financial statements.
Accounting policies and standards
The accounting policies adopted and methods of computation have been applied consistently
throughout the periods presented in these condensed consolidated interim financial statements, except
for the three new accounting standards applied only in the six month period ended 31 December 2017.
A number of new accounting standards, NZ IFRS 9: “Financial Instruments”, NZ IFRS 15: “Revenue
from Contracts with Customers” and NZ IFRS 16: “Leases” have been issued. Chorus has elected to
early adopt these standards from 1 July 2017. Further information is detailed below and comparative
information is presented in note 1.
NZ IFRS 9 Financial Instruments
Chorus has early adopted NZ IFRS 9 with a date of initial application of 1 July 2017. As a result, Chorus
has changed its accounting policy for certain financial instruments. Chorus has elected to apply
NZ IFRS 9 on a retrospective basis, however elected not to restate comparative information. This
means NZ IFRS 9 is applied retrospectively, however the valuation of impacted financial instruments
is reflected in opening equity on initial application date, as opposed to previous accounting periods.
NZ IFRS 9 addresses the classification and measurement of financial assets and financial liabilities,
the impairment of financial assets and hedge accounting. The only material impact on Chorus of
adopting this standard is in relation to hedge accounting, where new rules more closely align hedge
accounting with Chorus’ risk management activities, with the result being less reported volatility

Half Year Report
P | 18
in the income statement. Changes in the fair value of the cost to convert foreign currency to NZD
of Chorus’ cross currency interest rate swaps are now separately accounted for as a cost of hedging
and recognised within a new reserve within equity (cost of hedging reserve).
This accounting treatment was not possible under the previous accounting rules, where such changes
in fair value were recognised within the income statement.
NZ IFRS 15 Revenue from Contracts with Customers
Chorus has early adopted NZ IFRS 15 with a date of initial application of 1 July 2017. As a result, Chorus
has changed its accounting policy for revenue recognition and certain customer costs as detailed below.
Chorus has applied NZ IFRS 15 using the cumulative effect method (by recognising the cumulative
effect of initially applying NZ IFRS 15 as an adjustment to the opening balance of equity at
1 July 2017). Comparative information has not been restated and continues to be reported
under NZ IAS 18. The details of this change are set out below.
Customer retention costs
Chorus previously recognised costs when acquiring or retaining customers as expenses when
they were incurred. Under NZ IFRS 15, Chorus capitalises these as costs of obtaining a contract,
including customer incentives, when they are incremental and, if they are expected to be recovered,
it amortises them consistently with the pattern of revenue for the related contract.
NZ IFRS 16 Leases
Chorus has early adopted NZ IFRS 16 with a date of initial application of 1 July 2017. As a result,
Chorus has changed its accounting policy for lease contracts as described below.
Chorus applied NZ IFRS 16 using the modified retrospective approach, under which the cumulative
effect of initial application is recognised in retained earnings at 1 July 2017.
As a lessee
As a lessee, Chorus previously classified leases as operating or finance leases based on its assessment
of whether the lease transferred significantly all the risks and rewards incidental to ownership of the
underlying asset to Chorus. Under NZ IFRS 16, Chorus recognises right of use assets and lease
liabilities on balance sheet for most leases.
i) Leases classified as operating leases under NZ IAS 17
At transition, lease liabilities were measured at the present value of the remaining lease
payments, discounted at Chorus’ incremental borrowing rate as at 1 July 2017.
Right of use assets were measured at an amount equal to the lease liability, Chorus applied this
approach to all leases. The right of use asset is subsequently depreciated using the straight line
method over the shorter of the estimated useful lives of the right of use asset or the remaining
estimated lease term. The estimated useful lives of right of use assets are determined on the
same basis as those of property and equipment.
Chorus presents right of use assets in Network Assets (note 2) and finance lease liabilities

Half Year Report
P | 19
separately on the face of the statement of financial position.
Chorus used the following practical expedients when applying NZ IFRS 16 to leases
previously classified as operating leases under NZ IAS 17:
- Applied a single discount rate to a portfolio of leases with similar characteristics; and
- Applied the exemption not to recognise right of use assets and liabilities for leases
with less than 12 months of lease term.
ii) Leases previously classified as finance leases under NZ IAS 17
For leases that were classified as finance leases under NZ IAS 17, the carrying amount
of the right of use asset and the lease liability at 1 July 2017 are determined at the lease asset
and lease liability under NZ IAS 17 immediately before that date.
As a lessor
Chorus is not required to make any adjustments on transition to NZ IFRS 16 for leases in
which it acts as a lessor.
Reclassification and re-statement of comparatives
The condensed consolidated interim financial statements for the six months ended 31 December 2017,
and comparative information for six months ended 31 December 2016 are unaudited. The presentation
of information for the year ended 30 June 2017 is audited.
Management have reclassified the revenue streams from prior periods in order to simplify reporting
and align with the products and services of Chorus, to provide greater transparency and accuracy to
readers. This exercise was completed to recognise the evolving nature of the industry from being copper
to fibre based. This is consistent with internal management reporting provided to senior management

and the Board.
Crown Fibre Holdings renamed
In September 2017 the New Zealand Government repurposed Crown Fibre Holdings and
changed the name to Crown Infrastructure Partners (CIP). The repurpose will have no material
impact on Chorus’ relationship.
Accounting estimates and judgements
In preparing the condensed consolidated interim financial statements management has made estimates
and assumptions about the future that affect the reported amounts of assets and liabilities at the date

of the financial statements and the reported amounts of revenue and expenses during the period.
Actual results could differ from those estimates.
In preparing the condensed consolidated interim financial statements, the significant judgements

made by management in applying Chorus’ accounting policies and the key source of uncertainty were
the same as those that applied to the consolidated financial statements as at and for the year ended

30 June 2017, except for those associated with the adoption of the three new accounting standards
described above and in note 1.

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P | 20
Note 1 – Comparative information for transition to new NZ IFRS standards
To provide further information and increased transparency, adjusted comparative totals are
disclosed below.
NZ IFRS 9 Financial Instruments
On transition to NZ IFRS 9, Chorus recognised a cost of hedging reserve within equity of $6 million
(net of tax) and an adjustment to the cash flow hedge reserve of $1 million (net of tax). Opening
retained earnings was also adjusted accordingly. Had NZ IFRS 9 applied to the comparative periods
presented, $5 million (pre tax) for the period ended 31 December 2016 (30 June 2017: $10 million)
of hedge ineffectiveness (recorded within finance expense) would have gone to the cost of hedging
reserve (within equity).
NZ IFRS 15 Revenue from Contracts with Customers
On transition to NZ IFRS 15, Chorus recognised an additional $27 million of customer retention assets
(included within ‘software and other intangibles’) relating to open contracts on transition date. This was
adjusted for tax and booked directly to retained earnings. These costs, including additional costs incurred
and capitalised post-transition date, are amortised over the life of the contract, which management have
assessed as three years in tenure.
The following table summarises the impact of adopting NZ IFRS 15 on Chorus’ condensed consolidated
interim financial statements for the period ended 31 December 2017.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
SIX MONTHS ENDED 31 DEC 2017
AS REPORTED
$M
NZ IFRS 15
ADJUSTMENTS
$M
BALANCES
WITHOUT
ADOPTION OF
NZ IFRS 15
$M
Retained earnings (net of tax) – 1 July 2017
473(20)453
Customer retention costs – 1 July 201727(27)-
Customer retention costs – 31 December 201740(40)-
Deferred tax – 31 December 2017215(11)204
CONSOLIDATED INCOME STATEMENT
Amortisation – 31 December 2017(53)21(32)
Operating expenses – 31 December 2017(170)(34)(204)
Had NZ IFRS 15 applied to comparative periods presented, operating expenses would have decreased by
$23 million for the period ended 31 December 2016 (30 June 2017: $42 million), with a corresponding
increase to ‘software and other intangibles’, and an associated increase in amortisation over time.

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P | 21
NZ IFRS 16 Leases
On transition to NZ IFRS 16, Chorus recognised $200 million of right of use assets and lease liabilities.
There was no difference to recognise in retained earnings. Included in this was right of use assets
previously relating to finance leases under NZ IAS 17 of $151 million.
When measuring lease liabilities, Chorus discounted lease payments using its incremental borrowing rates
at 1 July 2017. The weighted average rate applied is 6.06%. Interest expense recognised on lease liabilities
for the period (recognised in finance expense) was $1 million.
Had NZ IFRS 16 applied to comparative periods presented, the depreciation charge would have increased
by $3 million for the period ended 31 December 2016 (30 June 2017: $6 million), and finance expense
would have increased by $1 million for the period ended 31 December 2016 (30 June 2017: $3 million).
Offsetting these increases would have been a corresponding decrease in rent and rates of $4 million for
the period ended 31 December 2016 (30 June 2017: $8 million).
Note 2 – Network assets
(DOLLARS IN MILLIONS)
31 DEC 2017
UNAUDITED
$M
31 DEC 2016
UNAUDITED
$M
30 JUNE 2017
AUDITED
$M
Cost
Opening balance8,8918,3428,342
NZ IFRS 16 opening balance adjustment (note 1)49 - -
Additions 323287592
Other -1015
Disposals (17) (1) (58)
Closing balance9,2468,6388,891
Accumulated depreciation
Opening balance (4,918) (4,686) (4,686)
Depreciation (150) (143) (295)
Other -256
Disposals17 -7
Closing balance (5,051) (4,827) (4,918)
Net carrying amount
4,195 3,811 3,973
Network assets comprise owned and leased assets.

Half Year Report
P | 22
(DOLLARS IN MILLIONS)
31 DEC 2017
UNAUDITED
$M
Network assets owned
4,001
Right of use assets194
Net carrying amount
4,195
Right of use assets
(DOLLARS IN MILLIONS)
DUCTS AND
MANHOLES
$M
PROPERTY
$M
TOTAL
$M
Balance 1 July 2017
21179200
Depreciation charge(1)(5)(6)
Balance at 31 December 2017
20174194
Additions to right of use assets during the period to 31 December 2017 were nil.
There are no restrictions on Chorus network assets or any network assets pledged as security for liabilities.
Other – property exchanges
Chorus has leased exchange space and commercial co-location space owned by Spark which is subject
to finance lease arrangements (included within right of use assets). Chorus in turn leases exchange space
and commercial co-location space owned by Chorus to Spark under a finance lease arrangement.
For sites that it does not own, Chorus recognises its share of the assets based on occupancy percentage,
as well as a liability for the future payments due. For sites that it does own, Chorus derecognises the share
of the asset used by Spark, as well as recognising a receivable for the future receipts due.
The ‘other’ cost and accumulated depreciation movement in the six months to 31 December 2017 is nil

(31 December 2016: $12 million; 30 June 2017: $7 million) as no reassessment of the extent of Spark’s
use of Chorus owned sites and Chorus’ use of Spark’s sites has occurred within the period.
Additions
Additions also includes the net movement within capital work in progress in the period.
Capital commitments
At 31 December 2017 the contractual commitment for acquisition of network assets was $529 million
(31 December 2016: $321 million; 30 June 2017: $507 million).
Depreciation
The Crown funding released against depreciation for the six months ended 31 December 2017 was
$11 million (31 December 2016: $11 million; 30 June 2017: $21 million).

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P | 23
Note 3 – Software and other intangibles
(DOLLARS IN MILLIONS)
31 DEC 2017
UNAUDITED
$M
31 DEC 2016
UNAUDITED
$M
30 JUNE 2017
AUDITED
$M
Cost
Opening balance 681634634
NZ IFRS 15 opening balance adjustment (note 1)27 - -
Additions 691547
Closing balance777649681
Accumulated amortisation
Opening balance (539) (474) (474)
Amortisation (53) (32) (65)
Closing balance (592) (506) (539)
Net carrying amount
185 143 142
There are no restrictions on Chorus software and other intangible assets or any software and other
intangible assets pledged as security for liabilities.
Customer retention costs
Management expects that incremental costs incurred in acquiring or retaining customers are recoverable.
Chorus has therefore capitalised these as customer retention assets, $40 million at 31 December 2017.

In the comparative period such costs were recognised as operating expenses when incurred. Capitalised
customer retention assets are amortised over the life of the contract (estimated to be three years) when
related revenues are recognised. In the period to 31 December 2017, the amount of amortisation was

$21 million and there was no impairment in relation to the costs capitalised.
Capital commitments
At 31 December 2017 the contractual commitment for acquisition of software and other intangible
assets was $12 million (31 December 2016: $29 million; 30 June 2017: $13 million).

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P | 24
Note 4 – Debt
(DOLLARS IN MILLIONS)
31 DEC 2017
UNAUDITED
$M
31 DEC 2016
UNAUDITED
$M
30 JUNE 2017
AUDITED
$M
Syndicated bank facility C – May 2020 70 - -
Euro medium term notes GBP – Apr 2020 495461462
Euro medium term notes EUR – Oct 2023829751762
Fixed rate NZD Bonds – May 2021400400400
Less: facility fees (13) (15) (15)
1,7811,5971,609
Current
- - -
Non-current
1,7811,5971,609
As at 31 December 2017 Chorus had $350 million committed syndicated facilities on market standard
terms and conditions (31 December 2016: $250 million; 30 June 2017: $350 million). The amount

undrawn of the syndicated bank facility that is available for future operating activities is $280 million
(31 December 2016: $250 million; 30 June 2017: $350 million). The syndicated bank facility is held with
bank and institutional counterparties rated - A to AAA, based on rating agency Standard & Poor’s ratings.
The Euro Medium Term Note debt of GBP 260 million has been swapped to $677 million (31 December
2016: $677 million; 30 June 2017: $677 million), and the Euro Medium Term Note debt of EUR 500
million has been swapped to $785 million (31 December 2016: $785 million; 30 June 2017: $785 million),
both using cross currency interest rate swaps (see note 9).
Note 5 – CIP securities
(DOLLARS IN MILLIONS)
31 DEC 2017
UNAUDITED
$M
31 DEC 2016
UNAUDITED
$M
30 JUNE 2017
AUDITED
$M
Fair value on initial recognition
Opening balance 170132132
Additional securities recognised at fair value8738
Closing balance178139170
Accumulated notional interest
Opening balance332020
Notional interest8613
Closing balance412633
Total CIP securities
219165203

Half Year Report
P | 25
Note 6 – Crown funding
(DOLLARS IN MILLIONS)
31 DEC 2017
UNAUDITED
$M
31 DEC 2016
UNAUDITED
$M
30 JUNE 2017
AUDITED
$M
Fair value on initial recognition
Opening balance 759679679
Additional funding recognised at fair value171980
Closing balance776698759
Accumulated amortisation
Opening balance(61) (40) (40)
Amortisation (11) (11) (21)
Closing balance (72)(51)(61)
Total Crown funding
704 647 698
Current
201819
Non-current
684629679
Ultra-Fast Broadband
Chorus receives funding from the Crown to finance construction costs associated with the development
of the UFB network. During the period Chorus has recognised funding for 21,655 premises passed

(31 December 2016: 19,784; 30 June 2017: 98,884) where user acceptance testing was complete at
31 December 2017. This brings the total number of fully completed and paid for premises passed at
31 December 2017 to approximately 594,000 (31 December 2016: 494,000; 30 June 2017: 573,000).
Continued recognition of the full amount of the Crown funding is contingent on certain material
performance targets being met by Chorus. The most significant of these material performance
targets relate to compliance with certain specifications under user acceptance testing by Crown
Infrastructure Partners. Performance targets to date have been met.
Note 7 – Segmental reporting
Chorus has determined that it operates in one segment providing nationwide fixed line access
network infrastructure. The determination is based on the reports reviewed by the Chief Executive
Officer in assessing performance, allocating resources and making strategic decisions.
Note 8 – Equity
Dividends
On 10 October 2017 a fully imputed final dividend of 12.5 cents per share, $51 million, was paid to
shareholders (31 December 2016: 12 cents per share, $48 million; 30 June 2017: 20.5 cents per share,
$83 million). There was an issue of 13,692,543 new shares under a Dividend Reinvestment plan offered
to shareholders, which was underwritten to the value of $51 million.

Half Year Report
P | 26
Net tangible assets per security
Net tangible assets per security for the period to 31 December 2017 was $1.95 (31 December 2016:
$1.91; 30 June 2017: $1.95).
Long-term performance share scheme
Chorus operates a long-term performance share scheme for selected key management personnel.
The August 2015 issue featured two grants. The shares relating to the first grant vested on 30 June 2017
(2 year grant), and the shares relating to the second grant have a vesting date of three years from

30 June 2015 (3 year grant). The three year grant is made up of two tranches, the first with a relative
performance hurdle (Chorus’ actual total shareholder return compared to other members of the NZX50)
and the second with an absolute performance hurdle (Chorus’ actual total shareholder return being
greater than 10.8% per annum compounding).
The August 2016 issue consisted of one three year grant. The shares have a vesting date of

22 September 2019 and an expiry date of 22 September 2020. The grant has an absolute performance
hurdle (Chorus’ actual total shareholder return equalling or being greater than 9.8% per annum
compounding) ending on the vesting date, with provision for monthly retesting in the following twelve
month period (noting that the total shareholder return continues to increase through this period).
The August 2017 issue consisted of one three year grant. The shares have a vesting date of

8 September 2020 and an expiry date of 8 September 2021. The grant has an absolute performance
hurdle (Chorus’ actual total shareholder return equalling or being greater than 10.6% per annum
compounding) ending on the vesting date, with provision for monthly retesting in the following twelve
month period (noting that the total shareholder return continues to increase through this period).
The combined option cost for the period ended 31 December 2017 of $158,000 has been recognised
in the income statement (31 December 2016: $131,000; 30 June 2017: $312,000).
Note 9 – Derivative financial instruments
Finance expense includes any unrealised ineffectiveness arising from the Euro Medium Term Notes
(EMTN) hedge relationship. Following the close out of the cross currency interest rate swaps and
interest rate swaps relating to the EMTN (GBP) the hedge relationship was reset in December 2013
with a fair value of $49 million. The unamortised balance of this original fair value at 31 December 2017
is $12 million (31 December 2016: $22 million; 30 June 2017: $15 million). As long as the hedge
remains effective any future gains or losses will be processed through the hedge reserve, however
the initial fair value will flow to finance expense in the income statement at some time over the life
of the derivatives as ineffectiveness. Neither the direction, nor the rate of the impact on the income
statement can be predicted. Due to the complex nature of this instrument, practical expedients as
introduced by NZ IFRS 9 have not been applied for the EMTN (GBP), thus the designation remains
unchanged. For the six months to 31 December 2017 a debit of $3 million ineffectiveness was
recognised within finance expense in the income statement (31 December 2016: $1 million credit;
30 June 2017: $6 million debit).

Half Year Report
P | 27
In November 2016, Chorus repaid the Syndicated Bank Facility and the associated interest rate swaps
expired, except one that has been maintained and is not in a designated hedging relationship. The fair
value re-measurement of unrealised gains or losses on the interest rate swaps that are not held in a
hedging relationship are recognised immediately in finance expense in the income statement. For the
period to 31 December 2017 $1 million credit was recognised in finance expense (31 December 2016:
$6 million; 30 June 2017: $6 million). In addition to this, forward dated interest rate swaps have been
entered into during the reporting period. These are all held in effective hedging relationships and their
unrealised gains or losses are recognised in the cash flow hedge reserve.
In conjunction with the EMTN (EUR) 500 million issued on 18 October 2016, Chorus entered into
cross currency interest rate swaps to hedge the foreign currency and foreign interest rate risks on
the EMTN (EUR). These swaps have an aggregate principal of EUR 500 million on the receive leg
and NZD 785 million on the pay leg. Using the cross currency interest rate swap, Chorus will pay
New Zealand Dollar floating interest rates and receive EUR nominated fixed interest with coupon
payments matching the underlying notes. Chorus designated the EMTN and cross currency interest

rate swaps into three part-hedging relationships; a fair value hedge of EUR benchmark interest rates,
a cash flow hedge of margin and a cash flow hedge on the principal exchange. For the period to
31 December 2017, there were no unrealised losses recognised in finance expense (31 December 2016:
$1 million; 30 June 2017: $1 million). The cost of hedging (the fair value of the change in currency basis
spread) was recognised in the cost of hedging reserve in the Statement of Changes in Equity (refer note 1).
Note 10 – Related party transactions
The gross remuneration of directors and key management personnel during the period was
$6.5 million (31 December 2016: $4.5 million; 30 June 2017: $7.8 million).
The Company has loans to employees and nominees (Chorus LTI Trustee Limited) receivable at
31 December 2017 of $1.6 million (31 December 2016: $1.6 million; 30 June 2017: $1.6 million)
as outlined in the long-term performance share scheme section of note 8. All loans outstanding
are interest-free limited recourse loans.
Note 11 – Post balance date events
Dividends
On 26 February 2018 Chorus declared an interim dividend in respect of the six month period ending
31 December 2017. The total amount of the dividend is $38.2 million, which represents a fully imputed
dividend of 9.0 cents per ordinary share.
CIP Securities and Crown funding
There were three call notices issued since December 2017 to CIP in respect to premises which had
not completed user acceptance testing before 31 December 2017. The first call on 17 January was
for 1,303 premises, the second call on 25 January for 2,553 premises and the third call on 19 February
was for 13,918 premises, with a total aggregate issue price of $19.9 million. There was no accrual in

the financial statements.

P | 28
Auditors’ review report
To the shareholders of Chorus Limited
Report on the condensed consolidated interim
financial statements
Conclusion
Based on our review, nothing has come to our attention
that causes us to believe that the condensed consolidated
interim financial statements of Chorus Limited and its
subsidiaries (“the Group”) on pages 1 1 to 27 do not:
i. present fairly in all material respects the Group’s
financial position as at 31 December 2017 and its
financial performance and cash flows for the 6 month
period ended on that date; and
ii. comply with NZ IAS 34 Interim Financial Reporting.
We have completed a review of the accompanying
condensed consolidated interim financial statements
which comprise:
— the condensed consolidated statement of financial
position as at 31 December 2017;
— the condensed consolidated income statement,
statements of other comprehensive income, changes
in equity and cash flows for the 6 month period then
ended; and
— notes, including a summary of significant accounting
policies and other explanatory information.
Basis for conclusion
A review of condensed consolidated interim financial
statements in accordance with NZ SRE 2410 Review of
Financial Statements Performed by the Independent
Auditor of the Entity (“NZ SRE 2410”) is a limited assurance
engagement. The auditor performs procedures,
consisting of making enquiries, primarily of persons
responsible for financial and accounting matters, and
applying analytical and other review procedures.
As the auditor of the Group, NZ SRE 2410 requires that

we comply with the ethical requirements relevant to the
audit of the annual financial statements.
Our firm has also provided other services to the Group

in relation to regulatory audit services, tax compliance
services and other assurance services. The Group sponsor
an award at the KPMG Innovation Council. These matters
have not impaired our independence as reviewer of the
Group. The firm has no other relationship with, or interest
in, the Group.
Use of this Independent Review Report
This report is made solely to the shareholders as a body.
Our review work has been undertaken so that we might
state to the shareholders those matters we are required to
state to them in the Independent Review Report and for
no other purpose. To the fullest extent permitted by law,
we do not accept or assume responsibility to anyone
other than the shareholders as a body for our review
work, this report, or any of the opinions we have formed.
Responsibilities of the Directors for the condensed
consolidated interim financial statements
The Directors, on behalf of the Group, are responsible for:
— the preparation and fair presentation of the condensed
consolidated interim financial statements in
accordance with NZ IAS 34 Interim Financial Reporting;
— implementing necessary internal control to enable
the preparation of condensed consolidated interim
financial statements that are fairly presented and free
from material misstatement, whether due to fraud or
error; and
— assessing the ability to continue as a going concern.
This includes disclosing, as applicable, matters related
to going concern and using the going concern basis
of accounting unless they either intend to liquidate or
to cease operations, or have no realistic alternative
but to do so.
Auditor’s Responsibilities for the review of the
condensed consolidated interim financial statements
Our responsibility is to express a conclusion on the
condensed consolidated interim financial statements based
on our review. We conducted our review in accordance
with NZ SRE 2410. NZ SRE 2410 requires us to conclude
whether anything has come to our attention that causes us
to believe that the condensed consolidated interim financial
statements are not prepared, in all material respects, in
accordance with NZ IAS 34 Interim Financial Reporting.
The procedures performed in a review are substantially
less than those performed in an audit conducted in
accordance with International Standards on Auditing
(New Zealand). Accordingly we do not express an audit
opinion on these condensed consolidated interim
financial statements.
This description forms part of our Independent

Review Report.
KPMG, Wellington, 26 February 2018

P | 29
Glossary
BackhaulThe portion of the network that links local exchanges to other exchanges or
retail service provider networks.
Building block model
A methodology used for regulating monopoly utilities. Under BBM a regulated
supplier’s allowed revenue is equal to the sum of the underlying components
or ‘building blocks’, consisting of the return on capital, depreciation,
operating expenditure and various other components such as tax.
CIPCrown Infrastructure Partners, formerly Crown Fibre Holdings Limited, the
Government organisation that manages New Zealand’s rollout of Ultra-Fast
Broadband infrastructure.
CommissionCommerce Commission – the independent Crown Entity whose responsibilities
include overseeing the regulation of the telecommunications sector.
Direct fibreAlso known as ‘dark’ fibre, a fibre service that provides a point to point fibre
connection and can be used to deliver backhaul connections to mobile sites.
FYFinancial year – twelve months ended 30 June. e.g. FY18 is from 1 July 2017
to 30 June 2018.
GigabitThe equivalent of 1 billion bits. Gigabit Ethernet provides data transfer rates
of about 1 gigabit per second.
GbpsGigabits per second. A measure of the average rate of data transfer.
GPONGigabit Passive Optical Network.
HYHalf year – six months ended 31 December. e.g. HY18 is from 1 July 2017
to 31 December 2017.
Layer 2The data link layer, including broadband electronics, within the Open
Systems Interconnection model. Layer 1 is physical cables and
co-location space.
MbpsMegabits per second – a measure of the average rate of data transfer.
NZ IFRSInternational Financial Reporting Standards – the rules that the financial
statements have to be prepared by.
P2PWhere two parties, or devices, are connected point-to-point via fibre.
UFBUltra-Fast Broadband – refers to the Government programme to build
a fibre to the premises network to about 87% of New Zealanders by the
end of 2022.
VDSLVery High Speed Digital Subscriber Line – a copper-based technology
that provides a better broadband connection than ADSL.

ARBN 152 485 848

---

Chorus Limited
Level 10, 1 Willis Street
P O Box 632
Wellington 6140
Email: company.secretary@chorus.co.nz

MEDIA RELEASE

26 February 2018

Chorus half year result

Tracking to top end of full year EBITDA guidance with implementation of
strategic review underway

 Net profit after tax $47m (HY17: $66m)
 EBITDA $329m (HY17: $335m)
 FY18 EBITDA guidance reiterated, tracking to top end
 Operating revenue of $499m (HY17: $529m)
 Total fixed line connections down 3% to 1,559,000
 Broadband connections stable at 1,181,000
 Interim fully imputed dividend 9 cents per share
 70,000 new fibre connections and 76,000 new VDSL connections

Chorus has today reported a net profit after tax (NPAT) of $47m and earnings before
interest, tax, depreciation and amortisation (EBITDA) of $329m for the half year
ended 31 December 2017.

Operating revenue for the period was $499m (HY17: $529m) and operating expenses
were $170m (HY17: $194m).
Depreciation and amortisation for the period was $192m (HY17: $164m), delivering
earnings before interest and tax (EBIT) of $137m (HY17: $171m).
Operating performance
Chorus CEO Kate McKenzie said the company now expected to track towards to the
top end of the full year EBITDA guidance range provided.
“While the impact on revenue of lost lines from previous periods was apparent in the
financial results this period, it was pleasing that the line loss trend showed signs of
abating during the half.
“During the half year we continued our campaign to promote better broadband and
this, coupled with an expanded field force, helped drive a strong increase in fibre and
VDSL uptake while also slowing connection losses to other networks significantly,”
said Kate.

“Losing just 5,000 broadband connections over six months, largely as anticipated to
other local fibre companies, is a positive outcome.
“Ensuring line loss trends continue to improve will be strongly influenced by the
improvements we continue to make in customer experience. For example, we are
aiming to consistently deliver one day installs for fibre by the end of next financial
year.

“In that context, I was pleased to see average lead times for fibre reduce from 22
days to 14 days during the half year, despite record order volumes.

“Further, despite the pressures in the New Zealand construction industry, we’ve kept
our fibre rollout costs within plan and we’re maintaining a tight focus on other costs.

“We will also continue to be an active wholesaler, aiming to stimulate competition
amongst retailers in the market,” she said.

Strategic review
Chorus is now underway with the implementation of a range of initiatives identified
through the strategic review it undertook in the second half of the previous financial
year.
The review considered the longer term outlook and opportunities for the business,
canvassed Chorus’ response to increased network competition, the need for careful
management of costs, the potential regulatory requirements under a utility style
framework and the need to continue improving the end-to-end experience for
customers.
“One of the major initiatives flowing from the strategic review was a new operating
model for the company,” said Kate. “Wider retailer adoption of automated fibre
provisioning, together with other process improvements, has allowed us to review our
internal structure with an expected 10% reduction in headcount now well progressed.

“As such, we anticipate further benefits to labour costs and other cost lines in the
second half as we continue to focus on ensuring our cost base is sustainable. We also
anticipate that improvements will have a commensurate positive impact on the
customer experience,” she said.

Network investment
The long term UFB capital expenditure programme remains on track.
During the half year Chorus announced a further agreement with the Crown to extend
its UFB rollout by another 54,500 premises. In total this means more than 87% of
the population will have fibre available to them by 2022, with Chorus responsible for
around 75% of that footprint.
In addition Chorus is continuing to invest in the performance of its copper network.
This includes a $20m programme to deploy VDSL vectoring technology in rural and

other local fibre company areas, which has the potential to improve broadband
performance for a further 260,000 premises.
“Chorus is investing around 60% of its revenues in rolling out fibre broadband
infrastructure for New Zealand. In that context, certainty for investors is clearly of
paramount importance, and we urge the Government to progress the legislation
underpinning the sector’s regulatory framework.
“The timeframe that is currently indicated suggests the vast majority of the network
will be built before investors are able to gain any certainty about the treatment of
their investment, so naturally we will be seeking timely passage through the House
and implementation,” she said.
FY18 guidance
EBITDA: $625 - $650 million (tracking towards the top end)
Capital expenditure: $780 - $820 million (tracking towards the top half)
Dividend: 22 cents per share, subject to no material adverse changes in
circumstances or outlook.
ENDS
Chorus Chief Executive, Kate McKenzie, and Chief Financial Officer, Andrew Carroll,
will discuss the half year results at a briefing in Wellington from 10.00am (NZ time).
The webcast will be available at www.chorus.co.nz/webcast.

For further information:
Nathan Beaumont
Stakeholder Communications Manager
Phone: +64 4 896 4352
Mobile: +64 (21) 243 8412
Email: nathan.beaumont@chorus.co.nz
Brett Jackson
Investor Relations Manager
Phone: +64 4 896 4039
Mobile: +64 (27) 488 7808
Email: brett.jackson@chorus.co.nz

---

Chorus Limited
Results for announcement to the market

Reporting Period
Six months ended 31 December 2017
Previous Reporting Period
Six months ended 31 December 2016

Amount (000s) Percentage change
Revenue from ordinary
activities
$499,000 Down 6%
Profit (loss) from ordinary
activities after tax attributable
to security holders.
$47,000 Down 29%
Net profit (loss) attributable to
security holders.
$47,000 Down 29%

Interim/Final Dividend Amount per
security
Imputed amount
per security
Final dividend 9.0 cps 3.50 cps

Record Date 20 March 2018
Dividend Payment Date 17 April 2018

Comments:
This announcement should be read in
conjunction with the attached half year
report, financial statements for the six
months ended 31 December 2017 contained
in that report, media release and investor
presentation.


Dividends

A fully imputed interim dividend for the 2018 financial year of 9.0 cents per
ordinary share will be paid on 17 April 2018. The total interim dividend will
be $38.2 million.

Dividend Reinvestment Plan

Chorus’ dividend reinvestment plan will operate for the interim dividend.

Under the Plan eligible shareholders can choose to reinvest all or part of
their dividend entitlements in additional Chorus shares (rather than
receiving cash payments). There are no charges for participation in the
Plan.

The price of the shares to be issued under the Plan will be the volume
weighted average sale price of Chorus shares calculated on all price
setting trades taking place through the NZX over a period of five trading
days commencing on the ex-dividend date less a 3% discount.

Shares issued under the Plan will rank equally with Chorus’ existing
ordinary shares.

Election notices to participate in the Plan must be received by 5pm (NZ
time) 21 March 2018.

Net tangible assets per security

There are $1.95 net tangible assets per security (31 December 2016:
$1.91).

Audit

This report is based on financial statements which have been reviewed.
Chorus’ auditors have issued a clear review report. A copy of the review
report is included in the attached half year report.

Accounting policies

There have been no changes in accounting policies and all policies have
been consistently applied throughout the period, except for the adoption of
three new NZ IFRS’ from 1 July 2017:
- NZ IFRS 9 Financial Instruments
- NZ IFRS 15 Revenue from Contracts with Customers
- NZ IFRS 16 Leases

Refer financial statements for the six month period ended 31 December
2017 for more details.

---

APPENDIX 7 – NZSX Listing Rules
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$
20 March, 201817 April, 2018
17 April, 2018
$38,222,479
Date Payable
17 April, 2018
$$0.006300$0.035000
In dollars and cents
RETAINED EARNINGS
$0.090
NZD$0.015882
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applicable
(04) 896 4003(04) 471 00132622018
ORDINARY SHARESNZCNUE0001S2
EMAIL: announce@nzx.com
Notice of event affecting securities
1
CHORUS LIMITED
ANDREW CARROLLDIRECTORS' RESOLUTION

---

FY18 Half Year Result
26 February 2018

2
Disclaimer
This presentation:
•Is provided for general information purposes and does not constitute investment advice or an offer of or invitation to purchase
Chorus securities.
•Includes forward-looking statements. These statements are not guarantees or predictions of future performance. They involve
known and unknown risks, uncertainties and other factors, many of which are beyond Chorus’ control, and which may cause
actual results to differ materially from those contained in this presentation.
•Includes statements relating to past performance which should not be regarded as reliable indicators of future performance.
•Is current at the date of this presentation, unless otherwise stated. Except as required by law or the NZX Main Board and ASX
listing rules, Chorus is not under any obligation to update this presentation, whether as a result of new information, future
events or otherwise.
•Should be read in conjunction with Chorus’ audited consolidated financial statements for the year to 30 June 2017 and NZX and
ASX market releases.
•Includes non-GAAP financial measures including "EBITDA”. These measures do not have a standardised meaning prescribed by
GAAP and therefore may not be comparable to similar financial information presented by other entities. They should not be used
in substitution for, or isolation of, Chorus' audited consolidated financial statements. We monitor EBITDA as a key performance
indicator and we believe it assists investors in assessing the performance of the core operations of our business. Refer tothe
appendices of this presentation and Chorus’ FY17 results investor presentation for further detail relating to EBITDA measures.
•Has been prepared with due care and attention. However, Chorus and its directors and employees accept no liability for any
errors or omissions.
•Contains information from third parties Chorus believes reliable. However, no representations or warranties are made as to the
accuracy or completeness of such information.

Business performance overview
3
Kate McKenzie, Chief Executive Officer

>Result overview, connections and trends5-9
>Transforming customer experience10-12
>Financial results13-16
>Capex 17-19
>FY18 guidance summary 20
>Capital management, dividend, debt21-22
>Other areas of focus23-26
Appendices
A: FY17 Adjusted EBITDA & CAPEX28-30
B: Connections summary31
C: UFB uptake by region 32
D: NZ broadband market33
E: Regulatory framework34
4
H1 FY18 RESULT PRESENTATION
Kate McKenzie, CEO
Kate McKenzie, CEO
Andrew Carroll, CFO
AGENDA

5

>Total connections reduced by 43,000 to1,559,000 (FY17: -125k)
a reduction of 37,000copper lines with no broadband (FY17: -83k)
adecrease of 5,000total broadband connections to 1,181,000 (FY17: -40k)
BETTER BROADBAND GAINING GROUND
>Key trends
▪local fibre companies gaining share as expected
▪baseband copper decline reflects mobile/wireless
loss, line consolidation and shift to broadband
•unbundled connections shifting to fibre
▪active wholesaler approach achieving
results
•VDSL and fibre connections now 58% of broadband
base (FY17:45%)
•incentives for retailers linked to volume targets and
offnetconnections
▪retail market driving broadband uptake
•bundling of electricity and broadband
•promoting 1 gigabit service for <$100
0
200000
400000
600000
800000
1000000
1200000
1400000
1600000
1800000
Data services (copper)Fibre premium (P2P)
Fibre broadband (GPON)VDSL
Copper ADSLUnbundled copper (no broadband)
Baseband copper (no broadband)
Fibre (GPON)
VDSL
Copper ADSL
Unbundled copper
Baseband copper
H1 FY18 RESULT PRESENTATION

7
ENABLING BETTER BROADBAND
>VDSL vectoring upgrade
▪equipment deployment in non Chorus fibre areas has been completed; rural areas underway
▪trial completed across ~30 cabinets in Christchurch show ~4,000 VDSL customers benefitting with:
•~60% able to achieve 50Mbps+
•~20% able to achieve 100Mbps+
•top download speed increased to ~135Mbps
H1 FY18 RESULT PRESENTATION
0%
5%
10%
15%
20%
05
101520253035404550556065707580859095
100105110115120125130
135+
VDSL vectoring trial results
Before vectoringAfter vectoring
Mbps
% of
connections

>76%of mass market fibre plans now >100Mbps
(FY17:69%)
▪64% of mass market fibre connections on 100Mbps
less than ¼ of fibre connections on entry level 50Mbps
20,000 connections on gigabit plans
8
Total mass market fibre uptake by plan type
% of
plans
GB
0
10
20
30
40
50
60
70
80
90
100
Jun-16Sep-16Dec-16Mar-17Jun-17Sep-17Dec-17
50Mbps100Mbps200Mbps
GigabitEducationBusiness 100Mbps+
GB
100/20Mbps
now $43/month
50/10Mbps now
$40.50/month
DATA DEMAND GROWS AS CUSTOMERS SHIFT TO BETTER
0
50
100
150
200
250
300
CopperFibreAverage
Monthly average data usage per connection on our network
>monthly average data usage per connection on our
network grew to 174GB(Dec) from 162GBin June
▪250GB on fibre
▪141GB on copper
H1 FY18 RESULT PRESENTATION

9
PEAK DEMAND KEEPS SETTING RECORDS
>Streaming video on demand is driving peak hour consumption
▪1.2 million Kiwis (434k households) now access Netflix; TVNZ On Demand has 1.8m subscribers
▪1February: new traffic record on Chorus network of 1,449 Gbps
Chorus network traffic by time of day
H1 FY18 RESULT PRESENTATION
▪HD TV uses 3GBper hour
▪4K TV uses 7GBper hour

>77,000 installations completed in H1; weighted average lead times down to 14 days
▪field crews increased from 615 to 700
▪work in progress reduced to 25,000 from 32,000
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
55%
60%
61218243036424854
FY12FY13FY14FY15FY16FY17
10
TRANSFORMING CUSTOMER EXPERIENCE & COST
H1 FY18 RESULT PRESENTATION
First time fibre orders received over time
(as a % of capable addresses by rollout year)
0
5000
10000
15000
20000
25000
0
5000
10000
15000
20000
25000
Jun-16
Jul-16
Aug-16
Sep-16
Oct-16
Nov-16
Dec-16
Jan-17
Feb-17
Mar-17
Apr-17
May-17
Jun-17
Jul-17
Aug-17
Sep-17
Oct-17
Nov-17
Dec-17
Jan-18
Chorus fibre connection activity -all NZ
Connections built and activatedAdditional connections completed
Orders
(net of cancellations and rejections in the month)
Months fibre available

“Ordered fibreon a sunny December afternoon. Scope and install
dates confirmed on Saturday morning. Working fibreservice 12pm
Monday....Didn’t have to speak to Spark once! Router turned up
10mins before the installer arrived lol....” source:Geekzone
11
STILL PLENTY OF ROOM FOR IMPROVEMENT
THE GOOD
THE BAD
>Customer satisfaction flat at ~7.4/10
▪technician rating consistent at 8.3/10
>‘Batched’ migrations show higher results
▪~4,000 installations completed
▪8.6/10 where Chorus-led (e.g. Hokitika)
▪7.7 for RSP-led migrations
▪ramping up activity across more UFB2 build
areas and dedicated 1-day installation teams
for retailer campaigns
OUR GOAL: REDUCE
CUSTOMER EFFORT TO LESS
THAN 1 DAY
H1 FY18 RESULT PRESENTATION

>‘COMPLEX’ INSTALLATIONS
▪high potential for cancellation of work due to
absence of consent drove stop-start process
▪improved likelihood of success under new regime
favours running consent and backbone build in
parallel
>‘SIMPLE’ INSTALLATIONS
▪currently require customers be at home for 2
visits (scope and inside connection work)
▪this adds scheduling complexity and opportunities
for failure between multiple parties
▪industry move to automated provisioning
platforms paves way to integrate 2 visits into 1
12
STREAMLINING INSTALLATION PROCESSES
H1 FY18 RESULT PRESENTATION
SCOPING VISIT: AGREE INSTALLATION
CONNECTION VISIT: INSIDE
INSTALLATION WORK
BACKBONE DESIGN
CONSENT PROCESS
in parallel
BACKBONE BUILD

Financial performance
13
Andrew Carroll, Chief Financial Officer
H1 FY18 RESULT PRESENTATION

H1
FY18
$m
H2
FY17
(adjusted)
$m
H1
FY17
(adjusted)
$m
Operating revenue499519529
Operating expenses(170)(170)(168)
Earnings before interest, tax,
depreciation and amortisation
(EBITDA)
329349361
Depreciation and amortisation(192)(185)(174)
Earnings before interest and income
tax
137164187
Net interest expense(70)(77)(79)
Net earnings before income tax6788109
Income tax expense(20)(25)(31)
Net earnings for the year476277
14
INCOME STATEMENT
H1 FY18 RESULT PRESENTATION
Note: H1 and H2 FY17 have been adjusted to show
the illustrative impact if NZ IFRS 15 and NZ IFRS 16
had applied in FY17.
>ineffectiveness has notbeen removed from H1 and
H2 FY17 to reflect NZ IFRS 9 changes
>D&A increasing post IFRS adoption

H1 FY18
$m
H2 FY17
(adjusted)
$m
H1 FY17
$m
Copper line698083
Copper based
broadband
219238263
Data services
copper
141517
Fibre broadband
(GPON)
906954
Fibre premium
(P2P)
404039
Value Added
Network Services
171717
Field Services354242
Infrastructure121211
Other363
Total499519529
15
H1 FY18 RESULT PRESENTATION
REVENUE
>revenue declining as copper provisioning reduces and fibre
connections are capitalised. H2 FY17 adjusted to reflect $8m of
broadband promotion credits that would now be capitalised
>copper line and broadband revenues declining as customers
migrate to Chorus fibre or competing networks
>legacy revenues declining as customers migrate to fibre services
>rapidly growing fibre services
Note: H2 FY17 adjusted to show the illustrative impact if NZ IFRS 15
and NZ IFRS 16 had applied in FY17.

H1 FY18
$m
H2 FY17
(adjusted)
$m
H1 FY17
(adjusted)
$m
Labour costs393336
Provisioning4610
Network maintenance434542
Other network costs151215
IT costs272624
Rents, rates and
property maintenance
11139
Regulatory levies767
Electricity877
Consultants391
Insurance112
Other121215
Total170170168
16
H1 FY18 RESULT PRESENTATION
EXPENSES
>staff peak in Aug 2017; 10% reduction in staff across FY18
>reducing as activity shifts to fibre services
>proactive maintenance and weather offsetting copper/fibre mix
and volume effects
>rates increasing as fibre network expands
>one-off strategic review in FY17; ongoing regulatory spend
Note: H1 and H2 FY17 have been adjusted to show the illustrative
impact if NZ IFRS 15 and NZ IFRS 16 had applied in FY17.

CoppercapexH1
FY18
H2 FY17
(adjusted)
H1 FY17
(adjusted)
Note: H1 and H2 FY17 have been adjusted to show the illustrative impact if
NZ IFRS 15 and NZ IFRS 16 had applied in FY17.
Network sustain16209increasein roadworks activity, proactive maintenance and pole spend
Copperconnections122
Copper layer2163212halfway through VDSL vectoring upgrade (~$20mprogramme)
Product211
Customerretention292422reflectsadoption of IFRS 15
Subtotal647946
17
Commoncapex
H1 FY18H2 FY17H1 FY17
Informationtechnology141816
Building& engineering
services
9127
Other322
Subtotal263225
CAPEX SUMMARY: COPPER & COMMON
>Total capex of $391m (H1 FY17: $325m on an adjusted basis) includes $34m of customer
retention costs following adoption of NZ IFRS 15
H1 FY18 RESULT PRESENTATION

18
CAPEX SUMMARY: FIBRE
>UFB1 cost per premises passed (CPPP):
▪$1,623 vs $1,500 -$1,600 guidance
▪32,000 premises passed (HY17: 31,000)
H1 FY18 RESULT PRESENTATION
Fibrecapex
H1 FY18H2 FY17
(adjusted)
H1 FY17
(adjusted)
Note: H1 and H2 FY17 have been adjusted to show the illustrative
impact if NZ IFRS 15 and NZ IFRS 16 had applied in FY17.
UFB communal1139291UFB2 ~25% of H1 FY18 spend
Fibre connections & layer 214512413477,000 connections completed in H1 FY18 (H1 FY17:67k)
Fibre products & systems1098
Other fibre connections & growth282520increase in greenfields, UFB2 and other backhaul, poles
Customerretention531reflects adoption of IFRS 15 -in line with $10m indicated for FY18
Subtotal301253254

Fibre connections & layer 2 capex
H1 FY18H2 FY17 H1 FY17
Layer 2 (long run programmeaverage of $100 per connection)$16m$12m$8m
Premium business fibre connections$6m
(800)
$9m
(900)
$10m
(1,100)
Single dwelling units and apartments connections$84m
(77,000)
$67m
(62,200)
$77m
(66,800)
Backbonebuild: multi-dwelling units and rightsof way$39m
(5,800)
$36m
(5,000)
$39m
(6,200)
TOTAL$145m$124m$134m
19
FIBRE CONNECTIONS CAPEX
Note: we estimate ~45% of MDUs and RoWsrequiring backbone build have now been completed
H1 FY18 RESULT PRESENTATION
>UFB1 Cost per premises connected (CPPC):$1,102* vs $1,050 -$1,200 guidance
*excludes layer 2 and includes standard installations, some non-standard single dwellings and service desk costs

H1 FY18 updatePrior FY18 guidance
FY18 EBITDA
No change however we are tracking
towards the top end of guidance.
$625 –650m
FY18 Gross capex
No change however we are tracking
towards the top half of guidance.
$780m –$820m
Fibre connections &
layer 2 capex
No changehowever we are tracking
towards the top end of guidance due to
continued demand.
$260m –$290m (based on mass market 152,000 fibre
connections,12,000 backbone builds and 2,500 premium business
fibre connections and including service desk costs)
Fibre capex
No change however we are tracking
towards the top end of guidance.
$590m-$625m
Copper capex
No change$125m-$145m
Common capex
No change$50m-$65m
UFB1 Cost Per Premises
Passed (CPPP)
No change$1,500 -$1,600
UFB1 Cost Per Premises
Connected
(CPPC)
No change$1,050 -$1,200
(excluding layer 2 and including standard installations and some
non-standard single dwellings and service desk costs)
20
GUIDANCE SUMMARY
H1 FY18 RESULT PRESENTATION

21
CAPITAL MANAGEMENT & DIVIDEND
>Interim dividend of 9cps, fully imputed
▪supplementary dividend of 1.6cps payable
to non-resident shareholders
▪record date: 20 March 2018
▪payment date: 17 April 2018
▪Dividend Reinvestment Plan applies with
3% discount to prevailing market price;
open to New Zealand and Australian
resident shareholders
▪no DRP underwrite proposed
>FY18 dividend guidance of 22 cps, subject to
no material adverse changes in circumstances
or outlook.
>The Chorus Board considers that a ‘BBB’ credit
rating or equivalent credit rating is appropriate
for a company such as Chorus. It intends to
maintain capital management and financial
policies consistent with these credit ratings.
>During the UFB build programme to 2020, the
Board expects to be able to provide
shareholders with modest dividend growth from
a base of 20cps per annum, subject to no
material adverse changes in circumstances or
outlook.
H1 FY18 RESULT PRESENTATION

As at
31 Dec 2017
$m
As at
30 June
2017
$m
Borrowings1,9321,862
+ PV of CIP debt
securities
(senior)
10799
+ Net Finance
leases
205*154
Sub total2,2442,115
-Cash(40)(170)
Total net debt2,2041,945
Net debt/EBITDA3.41 times2.98 times
Financial covenants require senior debt ratio
to be no greater than 4.75 times
* Reflects adoption of NZ IFRS 16
>After adjusting for the timing of receipt of customer
payments, Net debt/EBITDA would have been 3.33
times at 31 December
>NZ IFRS changes added $49m to net finance leases and
increased EBITDA, with a net increase in leverage
metric of around 0.05 times
>At 31 Dec, borrowing of $1,932m comprised:
▪Long term bank facilities $70m
▪NZ bond $400m
▪Euro Medium Term Notes $1,462m (NZ$ equivalent at
hedged rates)
22
DEBT
H1 FY18 RESULT PRESENTATION

Other areas of focus
23
Kate McKenzie, Chief Executive Officer

>42% uptake at 31 Dec (FY17: 35%)
343,000 connections
821,000customers able to connect
613,000 premises passed
24
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
UFB rollout and uptake
UFB connectionsUFB available addressesPlanned footprint% Uptake
No. of
connections
DELIVERING THE FUTURE BROADBAND NETWORK
H1 FY18 RESULT PRESENTATION
Uptake
Premisesto pass by Dec 2022~1,054,000*
Customers able to connect ~1.36 million
Estimated communal capex to
pass premises
$2.26 to 2.37
billion
Crown funding (57:43equity/debt)up to $1.33
billion

NEW REGULATORY FRAMEWORK
25
>A smooth transition requires:
▪key RAB components (e.g. initial valuation and regulatory WACC) and copper deregulation delivered
by 1 January 2020
▪price capped services moving forward at 2019 prices with CPI
▪ability to recover actual costs incurred with a fair regulatory return
▪improved direction on treatment of Crown financing and financial losses
>A durable framework requires the flexibility to:
▪accommodate changes to TSO in non-UFB areas
▪include next generation technologies and innovative non-telco wholesale customers
H1 FY18 RESULT PRESENTATION
Government
review began in
2013
Draft Bill tabled
August 2017
Select
Committee
report due
March 2018
Revised Bill
then expected
to pass into law
Commerce
Commission
applies new
regime

26
FUTURE OPPORTUNITIES
>Fibre and our existing assets (exchanges, cabinets, poles)
are opening up new possibilities
▪school community wi-fitrial with Network for Learning
▪LoRaWANInternet of Thingstrial with Vianet
▪potential support for TV delivery
H1 FY18 RESULT PRESENTATION

Appendices
27

For information purposes only. This appendix provides an approximate translation of the two halves of FY17 to show the
illustrative impact if IFRS 15 and IFRS 16 had applied in FY17.
Pro-forma FY17 EBITDA
28
H1 17
Statutory
results
$m
IFRS
impact
$m
Adjusted
H1 17
$m
H2 17
Statutory
results
$m
IFRS
impact
$m
Adjusted
H2 17
$m
Totaloperating revenue529-5295118519
Labour(38)2(36)(36)3(33)
Provisioning(24)14(10)(19)13(6)
IT costs*(30)6(24)(30)4(26)
Rent and rates(8)4(4)(9)4(5)
Otheroperating expenses(94)-(94)(100)-(100)
Total operating expenses(194)26(168)(194)24(170)
EBITDA3352636131732349
Appendix A: ADJUSTEDFY17 EBITDA H1 vs H2
H1 FY18 RESULT PRESENTATION
* updated from Appendix B.3 in FY17 results presentation to reflect timing difference

For information purposes only. This appendix provides an approximate translation of the two halves of FY17 to show the
illustrative impact if IFRS 15 and IFRS 16 had applied in FY17.
Pro-forma FY17 EBITDA
29
H1 17
Statutory
results
$m
IFRS
impact
$m
Adjusted
H1 17
$m
H2 17
Statutory
results
$m
IFRS
impact
$m
Adjusted
H2 17
$m
UFBcommunal91919292
Fibre connections & layer 2134134124124
Fibre products & systems8899
Other fibre connections &
growth
20202525
Customer retention-11-33
Totalfibre capex25312542503253
Appendix A.1: ADJUSTED FY17 CAPEX H1 vs H2
H1 FY18 RESULT PRESENTATION
Continued on next page

Pro-forma FY17 EBITDA
30
H1 17
Statutory
results
$m
IFRS
impact
$m
Adjusted
H1 17
$m
H2 17
Statutory
results
$m
IFRS
impact
$m
Adjusted
H2 17
$m
Network sustain992020
Copper connections2222
Copper layer 212123232
Product1111
Customer retention22222424
Total copper capex242246552479
Informationtechnology16161818
Building& engineering
services
771212
Other2222
Total common capex2502532032
TOTAL GROSS CAPEX3022332533727364
Appendix A.1: ADJUSTED FY17 CAPEX H1 vs H2 (cont.)

30 Sept
2016
31 Dec
2016
31 March
2017
30 June
2017
30 Sept
2017
31 Dec
2017
Unbundled
copper
105,00099,00090,00082,00076,00068,000
Baseband
copper
(no broadband)
354,000343,000328,000313,000302,000290,000
Fibre
broadband
(GPON)
203,000231,000259,000292,000328,000362,000
VDSL
(includes
naked)
179,000199,000224,000244,000294,000320,000
Copper
ADSL
(includes
naked)
847,000784,000716,000650,000562,000499,000
Data
services
(copper)
10,0009,0009,0008,0007,0007,000
Fibre
premium
(P2P)
13,00013,00013,00013,00013,00013,000
Total
connections
1,711,0001,678,0001,639,0001,602,0001,582,0001,559,000
Appendix B: CONNECTIONS SUMMARY

0%
10%
20%
30%
40%
50%
60%
Dec-16Mar-17Jun-17Sep-17Dec-17
32
% uptake relative
to capable
addresses
42%
AVERAGE
UPTAKE
ROLLOUT COMPLETED IN THESE AREAS
H1 FY18 RESULT PRESENTATION
Appendix C: UFB UPTAKE BY REGION

>Population and premises growth supporting
ongoing broadband uptake
▪~31,000 new dwellings consented in NZ in 2017 (up
3.4% from 2016
•~11,000 new homes consented in Auckland
•Auckland projected to account for over half of NZ
population growth to 2040 with 400,000 homes
33
Source: IDC
Source: Stats NZ
Appendix D: NZ BROADBAND MARKET
H1 FY18 RESULT PRESENTATION
Source:

APPENDIX E: REGULATORY FRAMEWORK
34
>New regulatory framework bill introduced to Parliament 8 August 2017
Next steps: legislative process, then the Commerce Commission will consult and set input methodologies.
H1 FY18 RESULT PRESENTATION

---

Over 1 million
kiwis have better
broadband right
under their feet.
Ask for it.
Letter to investors: FY18 half year result
Dear Investors
Our focus in the first six months of the financial year has
been on implementing a range of initiatives originating
from the strategic review we talked about in the 2017
Annual Report. That review considered the longer term
outlook and opportunities for our business, increased
competition from wireless technologies, ongoing careful
management of costs, the potential regulatory requirements
under a utility style framework and the need to continue
improving the end-to-end experience for customers.
We continued our campaign to promote better broadband
and this, coupled with an expanded field force, helped drive
a strong increase in fibre and VDSL uptake while also slowing
connection losses to other networks significantly. Wider
retailer adoption of automated fibre provisioning, together
with other process improvements, allowed us to review
our internal structure and we expect to reduce our internal
workforce by 10% from August 2017 levels over the course of
FY18. Despite the pressures in the New Zealand construction
industry, we’ve kept our fibre rollout costs within plan and
we’re maintaining a tight focus on other costs.
Fibre uptake grew from 35% to 42% in our completed rollout
areas, even as we built the fibre network past another 40,000
potential customers. That’s more than double the 2020
uptake target of 20% included in our original ultra-fast
broadband (UFB) contract with the Government. Importantly,
from a customer experience perspective, national weighted
average lead times reduced from 22 days to 14 days despite
the record order volumes. Customer satisfaction remained
flat at an average of 7.4 out of 10 across the period. However,
our ongoing trials of alternative migration methods, including
localised campaigns, both on our own and in conjunction
with retailers, showed that customer satisfaction scores of
up to 8.6 are achievable.
Dividend reinvestment
plan for shareholders
A dividend reinvestment plan is available to
our Australian and New Zealand resident
shareholders with a discount rate of 3% for
the 17 April 2018 dividend payment.
If you haven’t previously registered to
participate and wish to do so, you’ll need
to have registered your participation by
5:00pm (NZ time) on 21 March 2018.
You can register by logging into our
Computershare profile at
www.investorcentre.com/nz or
downloading the Participation Notice at
www.chorus.co.nz/dividends and
returning it to Computershare.
The full terms of the reinvestment plan
can be read in our Offer Document dated
February 2016 at
www.chorus.co.nz/dividends,
or you can request a copy free of charge.
Our most recent audited financial statements,
and auditor’s report, are included in our
2017 annual report, which is available free of
charge on request and at
www.chorus.co.nz/financial-results.
NET PROFIT AFTER TAX
$66m
HY17
$47m
HY18
EBITDA
1
$335m
HY17
$329m
HY18
DIVIDEND
8.5cps
HY17
9cps
HY18
ADJUSTED EBITDA
2
$361m
2
HY17
$329m
HY18
FIXED LINE CONNECTIONS
3%
1,602,0001,559,000
FY17HY18
BROADBAND CONNECTIONS
1,186,000
1,181,000
0.4%
FY17HY18
FIBRE CONNECTIONS
23%
305,000
375,000
FY17HY18
HY18 result overview

Our shift to being a more active wholesaler through our ask
for better campaign and related efforts to support retailers
helped slow line loss significantly, from a decline of 76,000
connections in the six months to 30 June 2017, to 43,000
in the period to 31 December 2017. As expected, most line
loss is occurring in those areas where the other local fibre
companies have partnered with the Government under the
UFB initiative
Against this b
ackdrop, we achieved net profit after tax of
$47 million and EBITDA of $329 million. This was down
from EBITDA of $361 million for the same period last year,
when adjusted to allow for new accounting standards.
3

A fully imputed interim dividend of 9 cents per share will
be paid on 17 April 2018. The dividend reinvestment plan
will be available again for New Zealand and Australian
shareholders at a 3% discount.
Taking fibre further
We’re pleased that our long-term UFB capital expenditure
programme remains on track and on budget. In August 2017
we announced a further agreement with the Government
to extend our UFB rollout to about 200 more towns and
rural communities. We also agreed to complete our current
UFB2 rollout in December 2022, two years earlier than
initially planned. When we’ve finished this work, more
than 1.3 million customers will be able to connect to
our fibre. That’s about three-quarters of the 87% of
New Zealanders to be covered by the UFB programme,
with the balance provided by other local fibre companies.
The extension and acceleration of our UFB rollout demands
that we consider our longer term cost structure in the
context of the likely future regulatory environment and,
eventually, a much reduced copper network footprint.
A key focus is, therefore, the Government’s steps towards
implementing a utility style regulatory framework for fibre.
A parliamentary Select Committee is scheduled to report
back in late March on the draft legislation, introduced
in August 2017. We support the Bill and have made a
submission recommending amendments to help achieve
its policy aims, support its prompt implementation
and ensure the new regulatory regime is durable.
If you’d like more detail on our financial results, the
half year report and a recorded webcast of our results
briefing will be made available on our website at
www.chorus.co.nz/financial-results.
Thank you for your support of Chorus.
Kind regards
Patrick Strange
Chairman
Letter to investors: FY18 half year result
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June 2016
June 2017Jan 2018
6am3pm
Peak 1,274 Gbps
Network Throughput (Gbps)
Time of day
Note: data represents average of traffic across all days in the month, excluding corporate traffic.
1,300
0
100
200
300
400
500
600
700
800
900
1,000
1,100
1,200
6pm9pm
Chorus network throughput by time of day (monthly average)
18%
The thirst for data
We remain in the midst of a very clear global trend, the
thirst for data. Average monthly usage per household on
our network was 174 Gigabytes in December compared
to about 155 Gigabytes in June. On 10 December 2017
about 1,328 gigabits per second, or the equivalent of about
260,000 HD video streams being watched simultaneously,
was used on our network at 9:25pm. This was a new record
for traffic on our network and reflects customers using
more data, both as a natural consequence of moving to
better broadband services and as smart TVs and other
devices make it easier to stream video online. TVNZ On
Demand, for example, reportedly has 1.8 million subscribers
and recent Nielsen research suggests Netflix access has
grown to about 1.2 million New Zealanders. The ability to
access streamed content continues to grow with Vodafone
launching a fibre-based TV service in October 2017.
1 Earnings before interest, income tax, depreciation and amortisation (EBITDA) is a non-GAAP profit measure. We monitor this as a key performance
indicator and we believe it assists investors in assessing the performance of the core operations of our business.
2 Adjusted to reflect the effect new NZ IFRS accounting standards adopted in HY18 would have had if they had applied in HY17.
3
The adoption of three new accounting standards has affected results for the current period with changes in the treatment of operating leases and
capitalisation of some costs which were expensed in HY17.