Annual Report and Section 209c Notice

Annual Report 2018
WE’RE A
COMPA N Y
T H AT
DELIVERS

Contents
Introduction 4
Highlights 6
Chairman and CEO’s report 10
Materiality 18
People 22
Environment 26
The Freightways family 28
Community 32
Our Board 34
Our leadership team 35
Directors’ report 36
Independent auditor’s report 42
Financial statements 47
Shareholder information 90
Corporate governance 92

IN SO
MANY WAYS
Freightways Limited and its subsidiariesAnnual Report 2018
3

Introduction
4
FREIGHTWAYS HAS ALWAYS BEEN
AN ENTREPRENEURIAL COMPANY.
FROM OUR CORE EXPRESS PACKAGE
BUSINESS, WE’VE SUCCESSFULLY
EXPANDED INTO INFORMATION
MANAGEMENT, BUILDING
15
DIGITAL
AND PHYSICAL SERVICES IN AUSTRALIA
AND NEW ZEALAND THAT ARE STEADILY
INCREASING OUR REVENUES AND OUR
PRESENCE. MORE RECENTLY WE HAVE
DIVERSIFIED OUR SECURE DESTRUCTION
BUSINESS TO INCORPORATE A NEW
MEDICAL WASTE OPERATION WHICH
REPRESENTS AN EXCITING NEW
HORIZON OF GROWTH.
Our goal over the medium term is to continue to
leverage our expertise and our appetite for innovation
in lateral ways: to build new horizons of growth off our
expanding base of customers and services in Express
Package and Information Management – to compete
meaningfully and profitably throughout Australasia.
In this report we signal how we intend to use our
ability to run strong businesses and apply disciplined
application of capital to continue to grow our business.
Express Package
Freightways operates a
multi-brand strategy in the
domestic courier market
through New Zealand Couriers,
Post Haste, Castle Parcels,
NOW Couriers, SUB60,
Security Express, Kiwi Express,
Stuck and Pass The Parcel.
Our strategy is to position
brands with unique selling
propositions to customer
niches that require those
services. To avoid duplication
of costs all of these brands
share a common backbone
in terms of branch networks,
air and road linehaul and IT.
Introduction
Freightways Limited and its subsidiaries

Freightways Limited and its subsidiariesAnnual Report 2018
5
Aviation
Fieldair provides Freightways
with its airfreight capability
through a joint venture which
operates three 737- 400 aircraft,
providing the backbone of
Freightways overnight Express
Package delivery service.
The joint venture manages
all aspects of the operation to
fly over 32 million kg’s of freight
per annum for its customers.
Business Mail
DX Mail and Dataprint
provide a range of physical
and digital postal services to
business customers throughout
New Zealand. DX Mail provides
time sensitive mail delivery to
over 40% of NZ while Dataprint
provides both traditional
mailhouse-print services as well
as several homegrown digital
mail presentation platforms.
Information Management
The Information Management
Group (TIMG) provides a range of
physical storage and information
management services as well
as emerging digital information
processing services such as;
digitisation, business process
outsourcing, online back-up
and eDiscovery services.
Secure Destruction
and Medical Waste
Shred-X operates a Secure
Destruction business providing
not only document destruction
services, but also eDestruction,
product destruction and,
following an acquisition in
September 2017, Medical
Waste services, under the
brand of Med-X.
Introduction
Express
Package
Product
Destruction
Pick up
Process
Deliver
Document &
eDestruction
Medical
Waste
Aviation
Business
Mail
Document &
Media Strorage
Online
Back-up
Digital Information
Processing
The Freightways network model

Highlights
6
Highlights
STRONG EARNINGS
IN OUR CORE ACTIVITIES
WERE MATCHED BY
ENCOURAGING GROWTH
IN OUR NEWER MARKETS
Freightways operating revenue FY18 ($m)
Rounded to the nearest $m
Freightways net profit after tax ($m)
Financial highlights
$ 5 81m
2017
2018
$545
$581
$62.2m
2017
2018
$60.9
$62.2
Freightways EBITA ($m)
Excluding non-recurring items
1

Freightways EBITA ($m)
Including non-recurring items
1

$ 93.7m$96.3m
2017
2018
$89.3
$93.7
2017
2018
$93.0
$96.3
1. Refer to the Chairman and CEO’s report on page 10 for reconciliation between
operating profit before interest, tax and amortisation (EBITA) including non-recurring
items and EBITA excluding non-recurring items.
Freightways Limited and its subsidiaries

Freightways Limited and its subsidiariesAnnual Report 2018
7
Highlights
Operational highlights
Information Management warehouse utilisationTonnes of paper collected
and recycled in New Zealand
and Australia
47,000
Divisional highlights
Information Management revenue growth
over ten years
Rounded to the nearest $m
Express Package & Business Mail revenue growth
over ten years
Rounded to the nearest $m
FY08 FY08
FY13 FY13
FY18 FY18
54%228%
$277m$47m
$100m$306m
$427m$154m
FY18 NZ
8 1%
FY18 Australia
6 1%
NZ Greenhouse Gas (GHG) EmissionsTotal gross GHG emissions (tCO
2
e) per million dollar of revenue
Year-on-year reduction
10.0%
14.6%
2.0%
7.2%
CEMARS
®
certified
FY18 to be certified in November 2018
30%
30% Reduction in gross GHG emissions per
revenue over the last 4 years
FY14
FY15
FY16
FY17
FY18
136.64
123.02
105.01
102.93
95.52

MESSENGER SERVICES:
REINVENTED AND THRIVING
Ten years ago, during the Global Financial Crisis,
Messenger Services found itself in a rapidly declining
market. Desperate to reduce costs, companies were
avoiding expensive point to point couriers – sending
items digitally rather than physically or directing them
through cheaper and slower hub and spoke networks.
Messenger Services recognised that if it didn’t adapt
– and quickly – there was a good chance it wouldn’t
survive. At the time Messenger Services operated a
fleet of small cars and motorbikes designed to carry
small items, mostly documents. Over the ensuing years
the team transitioned the fleet from small cars to vans,
provided new services to move larger products, created
new brands such as Stuck, established dedicated
networks, expanded geographically and entered new
markets such as point-to-point trucking and time-
sensitive refrigerated transport.
Today Messenger Services operates four distinct
brands, represented by over 240 contractors located
in all major cities and regions throughout New Zealand.
It is now our fastest growing courier business –
operating at the premium end of the market and
constantly finding new ways to meet unique customer
needs while providing new opportunities for its
independent contractors to grow their businesses.
Messenger Services’ story proves that resilience,
determination and innovation are powerful assets
in testing times. Its turnaround plan didn’t just get
Messenger Services out of trouble, it used product and
process innovation to establish new ways of thinking
and diversified revenue streams that have generated
ongoing success and profitability.

Highlights of the year include:
Overall year-on-year revenue, earnings
and dividend growth.
In the express package & business mail
(EP&BM) division:
•Attaining essential network capacity to
support future growth objectives, and
•Transitioning to Agile IT deployment,
driving progress towards achieving
greater speed of execution on our IT
business priorities.
In the information management (IM) division:
•A major data collection/transformation
contract win, supporting the growth of the
division’s suite of digital IM services, and
•A successful first year in the Medical
Waste industry, supporting the objective
to further diversify the Secure
Destruction business.
Sustained strong cash generation from
both divisions, leading to reduced
gearing levels.
Chairman and CEO’s report
Chairman and CEO’s report
FULL YEAR
REVIEW FROM THE
CHAIRMAN AND CHIEF
EXECUTIVE OFFICER
The Directors are pleased to present the consolidated financial results of Freightways
Limited (Freightways) for the year ended 30 June 2018. This report discusses the results,
reviews the operations of each division and provides an outlook for the year ahead.
Operating performance
The table below presents the reported 2018 result compared to the prior comparative period
(pcp), both before and after the inclusion of non-recurring items that were reported in the pcp.
Notes
i. Operating profit before interest, tax and amortisation, before non-recurring items.
ii. Operating profit before interest, tax and amortisation.
iii. Net profit after tax (NPAT), before non-recurring items.
iv. Profit for the year attributable to shareholders.
Note
June 2018
$M
June 2017
$M
Increase
%
Revenue580.9545.36.5%
EBITA, before non-recurring itemsi.93.789.34.9%
Non-recurring items2.63.7
EBITAii.96.393.03.5%
NPAT, before non-recurring itemsiii.59.656.65.3%
Non-recurring items after tax2.64.3
N PATiv62.260.92.1%
Basic EPS (cents), before
non-recurring items38.436.5
10
Freightways Limited and its subsidiaries

Chair’s Report
The results discussed throughout this
commentary exclude the impact of the
following non-recurring items that the
Directors believe should not be
included when assessing underlying
trading performance:
• 2018: Non-recurring benefits before tax
totalling $2.6 million (no tax applicable)
in respect of reversing $1.6 million of
a previously accrued final acquisition
payable that is no longer expected to
be required and a $1.0 million gain upon
recording the replacement of earthquake-
related damaged racking funded by
insurance proceeds. The gain on the
racking replacement arises from the
insurance proceeds for new racking
($3.0 million) exceeding the $2.0 million
written down book value of the
structurally-compromised racking
written-off.
• 2017: A non-recurring benefit before tax
of $5.6 million (no tax applicable) relating
to previously accrued final acquisition
payables that are no longer expected to
be required. A non-recurring cost before
tax of $1.9 million ($1.3 million after tax)
relating to the relocation of the TIMG
business in Sydney.
Dividend
The Directors have declared a final dividend
of 15.25 cents per share, fully imputed at
a tax rate of 28%, being a 3% increase
above the pcp final dividend of 14.75 cents
per share. This represents a payout of
approximately $23.7 million compared with
$22.9 million for the pcp. The dividend will be
paid on 2 October 2018. The record date for
determination of entitlements to the dividend
is 14 September 2018.
The Dividend Reinvestment Plan (DRP) will
not be offered in relation to this dividend. As a
capital management tool, the application of the
DRP will be reviewed for each future dividend.
Review of operations
Divisional results for the year ended
30 June 2018 are provided below for
the EP&BM division and the IM division.
Express Package & Business
Mail revenue growth
2018 result:
Operating revenue of $428.8 million
was 6.5% higher than the pcp. Earnings
before interest, taxes and amortisation
(EBITA) of $67.9 million was 4% higher
than the pcp.
This result is a sound outcome, particularly
given increased costs relating to investment
in network capacity to accommodate current,
and expected future, increases in volumes.
This investment has included the use of a
chartered Convair aircraft to supplement
the jet fleet and moving into larger depots
in Christchurch and Auckland’s North
Harbour. Additionally, the transformation of
Freightways’ dedicated IT business to agile
work practices and the recruitment of a
number of new team members has enabled
the progression of many key IT projects.
Overall labour costs also stepped-up
throughout the year, an inevitable outcome
of operating in a tight labour market.
Volume growth, and consequently revenue
and earnings, were slightly stronger in the
first half of the year than the second half.
Freightways’ smaller postal business,
DX Mail, had a challenging second half and
returned lower earnings than the prior year.
Despite overall growth in mail volumes, higher
margin mail declined and was offset by lower
margin bulk mail.
The EP&BM division delivered a sound
full year result, while increasing important
network capacity and strengthening its
service capability.
Freightways Limited and its subsidiaries
11
Annual Report 2018

Key strategies in 2019:
Residential network review: A review
of the residential fleets of contractors
across all brands commenced in the latter
months of the financial year to improve the
productivity and earning capacity of these
courier runs. The overall mix of business
continues to see faster growth in Business
to Consumer (B2C) than Business to
Business (B2B) volume. This strategy for
residential deliveries will see an increased
number of items delivered per courier
through greater consolidation of volume
from all brands channelled into single-area
runs, improving the density of deliveries
into smaller concentrated geographic
areas. It is expected this will have a positive
impact on a number of Freightways’
environmental, social & governance (ESG)
initiatives, including, ongoing strategies to
improve courier earnings & service levels,
as well as reducing carbon emissions.
Pricing for Effort: A strategy to appropriately
price B2C services to ensure both the
company and its contractors are motivated
to facilitate profitable e-commerce revenue
growth is being actively pursued. It is
expected e-commerce will continue to drive
increased volumes to Freightways year on
year and the group is committed to ensuring
this growth is both profitable and sustainable
and that the B2C services provided meet
customers’ expectations. Similarly, the
DX Mail business will raise its prices for the
first time in two years to reflect the increasing
cost of mail delivery.
Visibility and data analytics: New scanning
technology for the EP businesses will be
implemented over the coming financial year
to enable improved visibility for customers
and their receivers. This will complement
improved reporting capabilities which will
allow the EP teams to better analyse every
aspect of their operations so as to help
deliver improved efficiency, profit margins
and service standards.
Information Management division
2018 result:
Operating revenue of $153.8 million was
6.6% higher than the pcp. EBITA of $29.8
million was 7.8% higher than the pcp.
Compared to the pcp, improved financial
results were achieved by all businesses
within this division. Utilisation of IM facilities
across New Zealand and Australia improved
as storage volumes increased. Secure
Destruction revenues increased across the
suite of paper sold as well as revenue for
eDestruction and Medical Waste services.
In recent years, a range of digital IM services
has been developed and introduced to the
market. Growth in these digital services,
while at an early stage, has been positive
and was boosted by the winning of a major
data collection and transformation project
in New Zealand.
Good progress is being made to replace
all racking in TIMG’s Porirua document
storage facility that was damaged in the
North Canterbury earthquake. Freightways
carries comprehensive insurance for events
such as this.
12
Chairman and CEO’s report
Chairman and CEO’s report
Freightways Limited and its subsidiaries

The $2.0 million write-off of the written down
book value of the structurally-compromised
racking in the division’s result and its
progressive replacement with new racking
since have been funded by insurance
proceeds received during the year, resulting
in a non-recurring accounting gain of
$1 million in this year’s result. Importantly,
this project is tracking to timetable and is
being managed in a way that ensures no
service disruption to customers.
Australian IM earnings were at the same
level as the New Zealand’s earnings for
2018. Given the larger scale of the
Australian market, and the broader range
of opportunities, including in the Medical
Waste industry, it is expected that Australia
will surpass New Zealand’s earnings
going forward.
Key strategies in 2019:
Facility utilisation: The footprint for
facilities across Australasia will require only
incremental additional storage space in the
short term. In particular, the current focus is
to add profitable new business into existing
facilities to take advantage of the investment
made in recent years in Australia.
Digital Services growth: TIMG is well-
positioned with a range of digital services
which is proving to be attractive to its
customer base. In the coming year, TIMG
will invest in additional sales & marketing
resource to increase revenue growth in these
service lines. TIMG will also continue to
assess new digitally-delivered services
which are considered complementary to
the existing portfolio of services.
Secure Destruction and Medical Waste:
It is planned to continue the investment and
management focus on revenue streams in
related markets that complement the physical
footprint established by Shred-X in the
Secure Destruction market. These markets
present an opportunity to apply Shred-X’s
consistent and high quality national service
standards and sales methodologies to grow
through a number of niches, including;
eDestruction, Medical Waste, Product
Destruction and other high value recycling.
Acquisitions and alliances: Freightways
will continue to explore and investigate
acquisition and alliance opportunities for
both current and future complementary
service offerings.
Freightways is pleased to announce the
recent acquisition of a number of small
businesses in Australia that operate in
the IM and Medical Waste industries.
Two businesses were acquired shortly
before year-end and two will be effective
from early in the new financial year. These
businesses were acquired for a total of
$9.8 million. EBITDA of $1.7 million
per annum is expected to be realised
after the businesses have been fully
integrated. Related capital expenditure
will be approximately $0.6 million. These
acquisitions will be immediately EPS positive.
The LexData scanning business acquired in
2016 involves a potential maximum earn-out
of $3.6 million, dependent on certain financial
performance hurdles being achieved for
the three years ended 30 June 2019. Latest
forecasts indicated the estimated earn-out
payable recorded in the balance sheet was
in excess of that likely to be required and has
been reduced by $1.5 million, resulting in a
non-recurring earnings benefit in Freightways’
2018 consolidated result.
Freightways Limited and its subsidiaries
13
Annual Report 2018

SHRED
-
X: TURNING WASTE
INTO GOLD
Shred-X is a powerful Freightways success story.
The company that started life as a greenfield start-up
by Nick Karos on Australia’s Gold Coast determined to
“paint Australia orange” with just one van, is now the
dominant secure destruction brand in Australia, with
10 branches across the country and a comprehensive
national network.

Freightways acquired the business in 2008 and
supported owners Nick and his brother, Van, with
their vision of growing the business through
disciplined application of capital, knowledge around
completing mergers and acquisitions and experience
in establishing start-ups.10 years on, Shred-X has
grown into a highly successful secure destruction
business with the highest industry certifications and
a strong reputation among corporate, government
and SME businesses. In September 2017 Shred-X
added Medical Waste services to its portfolio through
the newly-formed Med-X Healthcare Solutions
by acquiring State Waste Services in Sydney and
more recently Medico in Victoria. Med-X has also
commenced a greenfield service in Queensland and
is actively seeking opportunities to grow its national
footprint throughout Australia.

Shred-X proves that a powerful entrepreneurial spirit
is critical to building successful businesses. Its growth
has been fuelled by its willingness and ability to see
and seize opportunities, develop a powerful fit within
its teams and astutely apply capital to best effect.
The decision to identify new business opportunities
by successfully extending from the core business of
document destruction into identified areas of need, such
as Medical Waste, has opened up new markets and
established a new horizon of growth for Freightways.

Corporate
Corporate costs increased by $0.4 million
compared to the pcp, primarily due to one-off
costs associated with transitioning leadership
and appointing a new non-executive Director.
Net debt decreased by approximately $4
million to $154 million during the year, driven by
strong cash flows from operations, offsetting
investment in operating capacity and a number
of small acquisitions. Debt to debt & equity
gearing levels have decreased below 40%.
Outlook
The markets in which Freightways operates
in both New Zealand and Australia remain
positive, albeit the company is cautious about
recent declines in business confidence, which
may affect volumes through the network.
Organic and acquisition growth opportunities
exist in both New Zealand and Australia.
Subject to factors beyond its control,
Freightways is once again targeting year-
on-year earnings growth in the 2019 year.
Within the EP&BM division, current indications
are that organic volume growth will be slightly
lower in 2019 than it was in 2018. Network
capacity costs are not expected to step-up at
the same level as in the pcp, with investment
in capacity and capability expected to be
more incremental. Strategies to better align
service with customer expectations will
continue to be implemented, particularly
in the faster-growing B2C market.
The inflationary cost of operating in a tight
labour market, along with a generally higher
cost of doing business, is expected to be
offset by increased pricing, including pricing
related to higher fuel costs. Freightways will
continue to monitor employment law reform.
Within the IM division, increased utilisation
of existing capacity will be a key focus.
Encouraging progress has been made with
digital IM services and Freightways will
continue to invest in its digital capability.
The group’s recent entry into the Medical
Waste industry has tracked to expectations
and Freightways’ presence in this market
will be extended through a small, recently-
acquired Victorian business.
Overall capital expenditure for the 2019
financial year is expected to be in the range
of $20-22 million. Operating cash flows are
expected to remain strong throughout 2019.
Strategic growth opportunities, including
acquisitions and alliances that complement
existing capabilities, will be executed where
they make commercial sense.
Conclusion
Freightways has continued to invest
in the future of its businesses, while
returning a sound result for 2018. There
are opportunities for all of the group’s
businesses to continue to grow and
evolve their service offerings to meet
customers’ demands.
Freightways’ agility and entrepreneurial
outlook should see it continue to adapt
to changing markets and conditions and
continue to be resilient in the face of external
factors. The strength of Freightways’ brands
allows them to compete strongly in their
respective niches and collaborate behind
the scenes to share common infrastructure
and capability. Freightways is committed
to improving the long-term sustainability
of its business for the benefit of its teams
of people, its customers, its shareholders
and the environments in which it operates.
The Directors acknowledge the outstanding
work and ongoing dedication of the
Freightways teams of people throughout
New Zealand and Australia.
Susan Sheldon
Chairman
16
Mark Troughear
Chief Executive Officer
Chairman and CEO’s report
Chairman and CEO’s report
Freightways Limited and its subsidiaries

17
Chairman and CEO’s report
Leadership changes in 2018
Managing Director/Chief Executive Officer
In December 2017, Dean Bracewell stepped
down after 34 years’ service to Freightways,
18 of which were as Managing Director.
Dean lead Freightways through its Initial
Public Offering (IPO) in 2003 at an initial
market capitalisation of $0.2 billion to a
market capitalisation of $1.2 billion and a
Total Shareholder Return in excess of 600%.
Dean’s relentless focus on organic
growth along with strategic investment
in acquisitions and operating capacity,
combined with strong business disciplines,
has served the business well over his time
at the helm. Dean has made a substantive
contribution to Freightways over a long and
successful career with the Company.
Mark Troughear was promoted to the role
of Chief Executive Officer from January
2018 to replace Dean. Mark joined
Freightways in 1996 and has been directly
involved in developing the Company’s
strategic direction and overall performance.
He has led Freightways businesses in the
EP&BM division and has had over-arching
responsibility for the IM division.
Chairman:
Sue Sheldon, Chairman of the Board
of Directors of Freightways, will resign
her position effective at the close of the
Company’s Annual Shareholders’ Meeting in
October this year. Sue joined Freightways as
an independent director in 2003 ahead of its
IPO and has been Chairman since October
2010. Sue has supported the Company’s
relentless focus on organic growth and
strategic investment in acquisitions and
operating capacity. She has encouraged
strong business disciplines and overseen
governance practices that have been
hallmarks of Freightways’ performance.
The Board has unanimously resolved to
appoint Mark Verbiest as Chairman to
replace Sue upon her retirement. Mark
joined Freightways as an independent
director in 2010. Mark is an experienced
company Chairman, a very accomplished
professional director with broad commercial
experience and most importantly will
ensure the continuity of leadership on
the Freightways Board.
Directors:
Freightways has appointed two new
independent directors to the Board to
replace Sue and Dean.
Abby Foote joined the Board in June
2018. Abby is a professional director
based in Christchurch with over 10 years’
governance experience, including various
NZX-listed and Crown-owned companies.
Abby has a strong analytical and strategic
focus, coupled with a critical awareness
of corporate governance and risk
management issues.
Andrea Staines joined the Board in August
2018. Andrea has 12 years’ governance
experience on the Boards of a range
of Australian entities. Andrea brings to
Freightways key strengths in fast moving
consumer services and transport sectors,
a track record of operational excellence and
innovation and a proven strategic focus.
Freightways Limited and its subsidiariesAnnual Report 2018

Materiality
Materiality
THE IMPACTS
WE HAVE
Our materiality process
We began by engaging with our own people
in order to identify which SDGs they felt
were most important to the business. We
asked a broad cross section of our staff
to identify which of the goals they felt we
contributed to already and which ones
they thought we should aim to deliver on
throughout our business. We then asked a
number of working groups in the company
to do the same. To help make the SDGs real,
we broke them down into tangible aspects,
using a combination of the UN definitions
and our own interpretation of what they
might mean in a Freightways setting.
We then asked both groups to score
these individual aspects rather than the
high-level SDGs, before aggregating
the results to identify which SDGs they
considered most important.
From there we engaged with clients and
investors, asking them also to rank the
list of SDGs. We provided them with the
interpretation of the goals in a Freightways
setting that we had used for the internal
groups and asked them to score which
goals were most important for them.
Freightways is committed to incorporating non-financial criteria into its decision-making and
public reporting to meet the growing demand by stakeholders for access to broader information
about company activities. This year for the first time we conducted an assessment to determine
which issues are most material to our business and to our reporting. Specifically we wanted to
compare and contrast the issues that impact the business and those that are of most interest
and concern to our stakeholders.
To do this, we used the Sustainable Development Goals (SDGs) developed by the United Nations
(UN) because they represent a cohesive framework and a global and consistent set of goals
that align with our wish to take whatever actions we can to improve the lives of our people, the
communities we are part of, the environment and the interests of investors and other stakeholders.
18
Freightways Limited and its subsidiaries

Freightways Limited and its subsidiariesAnnual Report 2018
Materiality
Materiality Matrix
Impact on business
Stakeholder importance
7.0 7.2 7.4 7.6 7.8 8.0 8.2 8.4 8.6 8.8 9.0
10.0
9.0
8.0
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0.0
SDG 8
SDG 3
SDG 16
SDG 9
SDG 13
The Sustainable
Development Goals
The UN SDGs aim to end all forms
of poverty, fight inequalities and
tackle climate change over the next
15 years. The SDGs are unique
because they look to involve
everyone in promoting prosperity
while protecting the planet. They
include SDGs intended to build
economic growth and address
social needs including education,
health, social protection, and
job opportunities, while tackling
climate change and environmental
protection. There are 17 SDGs in
all. Freightways has selected the
5 most relevant SDGs to focus on.
19
M
a
t
e
r
i
a
l
i
t
y

c
u
r
v
e
SDG 16 Peace, justice
and strong institutions
• Ethics, bribery and
corruption (Integrity)
• Transparency
SDG 13 Climate action
• GHG emissions
SDG 9 Industry, innovation
and infrastructure
• Product and process innovation
• Customer experience
• Data security
• New business opportunities (e.g.
medical waste management)
SDG 8 Decent work and
economic growth
• Profitability
• Organisational culture
• Growing the incomes of
our contractors
SDG 3 Good health and
well-being
• Health and Safety in
Employment – injury reduction
• Non-GHG emissions
(e.g. particulate, NOx)
• Road safety
• Employee wellness programme

WIDE AWAKE TO THE NEEDS
OF OUR DRIVERS
Our people are our biggest responsibility and we take
their livelihoods and their safety very seriously. Our
internal line-haul business (Parceline) is one of a number
of businesses made up of dedicated contractors, many
of whom have been with us for over 20 years. These
contractors have built their livelihoods and those of the
teams they employ by providing outstanding service to
the retail brands of New Zealand Couriers, Post Haste,
Castle Parcels, NOW Couriers and DX Mail.
Together, these contractors cover over 11 million
kms every year, usually in the dead of night, in all the
weather conditions that New Zealand can throw at
them. To make sure that they can do their work as
safely as possible, we’ve introduced and funded
Guardian Seeing Machines into the truck cabs of
our Parceline fleet, to make sure that our people stay
awake and alert throughout their working days on
New Zealand’s roads.
Guardian Seeing Machines is state-of-the-art fatigue
detection technology. The technology literally keeps
an eye on our drivers while they work, recording their
eye movements and looking for any signs of fatigue
or inattention. Should it detect anything unusual, the
technology immediately alerts the driver (through real
time in-cab vibration) and at the same time contacts
the principal contractor and Parceline management.
It’s another example of how Freightways is committed
to injury reduction and road safety while giving
our contractors the autonomy they want to grow
their incomes as our contractors and arrive at their
destinations safely.
SDG 3

WE ARE A BUSINESS
BUILT ON THE POWER
OF NETWORKS.
CONNECTING WITH OUR
PEOPLE IS CENTRAL
TO OUR SUCCESS
People
Freightways’ commitment to the UN
Sustainable Development Goals (SDGs)
has brought new emphasis to existing
practices and motivated us to adopt new
initiatives that enable Freightways to make
a difference to the lives of New Zealanders
and Australians who need additional
support to achieve their particular goals.
Delivering on decent work and
economic growth
Our commitment to SDG 8: Decent Work
and Economic Growth is all about promoting
inclusive and sustainable economic growth,
employment and decent work for all. In
April 2018, we partnered with On Demand
Logistics (a transport and logistics training
facilitator) and the Ministry of Social
Development (MSD) to provide a pathway
for school leavers and long term unemployed
to make their way into the workforce. We
chose On Demand Logistics because we
share similar values and because they
demonstrated a genuine care and concern
for people and an ability to contribute
positively to family, whanau and communities.
This aligned with our People strategies and
our aim of giving back to our communities.
The three partners are now working
together on three specific programmes:
1. Gateway school holiday programme
(one-week programme)
Students attend a one week training
programme and then experience two days
of work in a transport/logistics organisation.
They are placed in a Freightways business
where they quickly learn what will be
expected of them when they enter the
workforce. There is a heavy focus on the
basic responsibilities of being a good
employee - being on time and reliable,
understanding and following health and
safety practices as well as the specifics
of doing the work.
2. Gateway term programme
(seven-week programme)
Students attend a seven week training
programme facilitated by On Demand
Logistics. An integral part of the programme
is an extended work experience opportunity.
Students must attend work experience
one day a week over a 4 week period
in a designated Freightways business.
They then undertake the work experience
component having completed qualifications
in Workplace Health and Safety, OSH
Forklift licence and Manual handling
and Hearing conservation.
3. Ministry of Social Development (MSD) –
training, work experience and employment
(four week programme)
We support this MSD initiative by providing
a suitable meeting room for a week and the
necessary training resources to facilitate
warehousing/distribution and Class 2 licence
training. It begins with the 10 participants
undertaking hands-on training at the
Freightways Southern Business Hub in
Christchurch. This is followed by an intensive
week of ‘on the job’ experience with one of
the brands at the same site.
Our people work for us in a range of locations and commercial arrangements. Many we employ
directly. Others work as independent contractors. This year we continued to roll out initiatives to
help ensure that everyone enjoys an environment of respect, that career advancement is broadly
available, and that our people are safe throughout their working day.
22
PeopleFreightways Limited and its subsidiaries

People
Other significant people
initiatives this year
DX Mail has implemented customised
advanced rider training for their Posties
to help them safely navigate the specific
hazards that can emerge when operating
motorbikes around driveways and in
suburban areas.
We made Employee Assistance
Programme (EAP) services available to
all of our teams to assist our people to
deal with issues that affect their health and
wellbeing as part of our commitment to our
people in the work place, and beyond. We
want to ensure that our teams have access
to support options for any issues that may
impact them negatively. This commitment
aligns with the UN SDG of Good Health
and Well-Being. EAP run a confidential
self-referral system.
Freightways Fundamentals is a training
programme designed for those new to
supervisory and management positions.
The Freightways Fundamentals programme
traces its origins back to the late 80’s where
it focused on the disciplines required to
manage a successful express package
business. Today, Freightways Fundamentals
covers a wide range of topics including
leadership, coaching and development
and performance management, while still
maintaining a healthy focus on financials and
the importance of margin to a sustainable
business. Over 160 participants attended
Fundamentals in 2018.
In 2017 Post Haste Limited won the NZIHR
award for Health, Safety and Wellbeing
for their “Movement” programme. This
initiative focused on supporting family,
whanau and communities and incorporated
elements intended to promote fitness,
nutrition, mental wellbeing and healthy living.
In 2019 we will look to broaden the scope of
the programme across the wider group. We
undertook a strategic review at Messenger
Services and Post Haste to improve courier
remuneration by focusing on higher priced
jobs at Messenger Services, proactively
managing fleet size to match demand and
working one on one with contractors to
maximise their earnings potential. Post
Haste has introduced a residential payment
model. This was trialled earlier this year and
will be rolled out to predominantly residential
couriers in FY19 to help enable contractors
to improve their revenue earning potential.
We introduced the Freightways
LEAD programme to grow emerging
management talent within the business.
This custom designed leadership course is
conducted over 3 months and structured
into 3 modules. It is moderated with a mix
of external and internal facilitators to ensure
the Freightways “way of doing things” is
combined with best external practice. The
course also incorporates a strategic initiative
that participants design and implement
to improve some aspect of their current
business’ performance. LEAD will take 12
new successful applicants each year. 25%
of the participants from the 2017 intake have
already been promoted within the group.
23
Freightways Limited and its subsidiariesAnnual Report 2018
DX: Posting healthy profits
in a declining market
DX Mail is one of the few postal
operators in the world making
money out of mail. By taking a
lean and adaptive approach, we’ve
rolled out an alternative national
mail network that now covers a
large proportion of New Zealand
and continues to expand – at a time
when global postal markets are in
decline. DX Mail uses product and
process innovation to provide a range
of high quality mail services aimed
predominantly at businesses who
require time sensitive delivery for
important documents. The network
is based on a high level of variability
allowing it to expand and react to
changes in demand as required.
SDG 8
SDG 3

Lovey Woodhouse, Courier Contractor,
New Zealand Couriers North Harbour branch.

Freightways is built on the power of networks.
Connecting with our people is central to our success
– and this means supporting them to achieve the
career they want. Lovey has been a New Zealand
Couriers Contractor, on and off, for 17 years. She
says the support she’s received from Freightways
has been crucial to her success.
“I was first introduced to the world of courier
contracting back in 2000 when I used to help my
brother-in-law with his runs. What immediately
appealed was the freedom and social interaction the
job offered. As a sportsperson, the physicality was
also attractive – being outside and active, not being
confined to one space. So I decided to give it a go!
And I haven’t looked back.
What I find most rewarding is the autonomy the job
offers. I’m my own boss, I get to dictate my own
terms and be in control. When you run your own
business, you certainly don’t go into it with a ‘9-5’
attitude – you’ve got to be prepared to work hard,
be proactive and ambitious.
The great thing about being part of the Freightways
Group is that you’re never left to do it alone. From
day 1 there’s a fantastic crew of people supporting
you, and I continue to rely on them today to help
grow my business. Our relationship is based on
mutual respect and teamwork, so although managing
my own business was a big step-up for me, I knew
Freightways always had my back.
But, ultimately, it’s the relationships we have with
our customers that lie at the heart of our business.
Seeing them a few times a day, we really get to know
them and they can trust us to go the extra mile. It’s
this relationship, beyond the obvious things like great
service, quick turnaround and a premium brand, that
sees them stay with us. A quick chat and a friendly
smile can speak volumes!
As much as I love my job, I believe being a courier has
a shelf life because of its physical nature. The natural
progression for me is to move into an operations or
fleet manager role within Freightways, where I might
add value from a contractor’s perspective. And, when
the time comes to make that move, I know Freightways
will support me 100%.”
LOVING THE WAY OF LIFE
SDG 8

REDUCING
OUR IMPACTS
Network intensification
Freightways’ highly productive Express
Package business model drives efficiency
and a constant reduction in emissions per
item as volumes grow.
Freightways concentrates its runs for
contractors to achieve the right level of
volume within defined areas. As incremental
volume is added through the national
network, contractors can pick up and
deliver a greater number of items with no
need to travel any greater distance. This
intensification, combined with maintaining
modern vehicle types, results in reducing
emissions per item as volumes grow.
Fleet flexibility
Our linehaul fleet is held to high standards
of Euro 5 and above through refreshing units
on a regular basis.
In the future it will be critical to maintain
flexibility to transition to new technology
– as it emerges and the supporting
infrastructure is built – capable of carrying
heavy loads over 12 hour timeframes and
the terrain we operate within.
Freightways is also investing in modernising
its owned Information Management fleets
in NZ and Australia which will result in
better fuel economy and reduced carbon
emissions over the coming years.
Environment
Environment
26
Freightways Limited and its subsidiaries

Freightways Limited and its subsidiariesAnnual Report 2018
Faced with needing to refresh a 60 year old aircraft fleet,
we established a joint venture with Airwork to operate three
737- 400s to meet the national demand for overnight parcel
delivery. The new arrangement not only increased overall
speed and capacity by enabling more efficient use of aircraft
and ground services, it also enabled Freightways to significantly
reduce its aviation fuel emissions.
FIELDAIR: WORKING
TOGETHER TO
EVERYONE’S BENEFIT
27
Volume density
Network intensification
Lower emissions per item
Fleet modernisation
Innovative climate actions
this year
In addition to the benefits from intensification
and flexible fleets we will trial a number of
new technologies this year.
• Introduction of electric bicycles at
Messenger Services.
• Trial of electric motorbikes at DX Mail.
Shred-X in Australia and TIMG in NZ have
collected and processed over 40,000 tonnes
of paper which is delivered to paper mills for
recycling. This recycled paper reduces the
demand for virgin wood pulp and contributes
to reducing deforestation. Shred-X and
TIMG have also partnered with e-Stewards
to deal with e-destruction and e-waste.
SDG 13

The Freightways family
The Freightways family
Delivering on innovation
and infrastructure
Our commitment to SDG 9: Innovation
and Infrastructure has seen us change
not just how products and services are
delivered, it’s also motivated us to continue
to make changes large and small to the
services we offer.
Some of those innovations are literally
challenging established networks. DX Mail
for example has pioneered an alternate
postal delivery network that provides a
distinct alternative to a larger incumbent
and it continues to expand despite an
overall market which is declining.
In our Express Package business we have
invested in state of the art automated
freight sorting technology at our new
Christchurch Southern Business Hub.
This system allows our hub and spoke
brands to scan, weigh and cube every
item that travels over the conveyor system
to provide valuable consignment data as
well as speeding up the processing of
freight to meet our strict deadlines.
This year Shred-X has begun using on-
board vehicle scales to provide improved
environmental reporting. That reporting
complements the business’s decision
to engage independent carbon advisor
Pangolin to review and measure the
company’s greenhouse emissions and
to help the brand report on these findings.
These measures and many others are
part of our drive at Freightways to look
for improvements and opportunities
across all aspects of our business. But
just as important as the contributions to
the business and the environment are the
endorsements that these improvements
to innovation and infrastructure make to
our brands.
With each innovation, we reinforce the
hard-earned reputations of our brands and
position our businesses as change-makers
in sectors where too often competitors have
been happy to leave things as they were.
At Freightways, our view is that dynamism
and responsiveness are key proof-points for
customers. They confirm that as a group,
and within each of our brands, there is a
deep commitment to pushing boundaries in
a bid to find competitive edge, operational
improvements and environmental efficiencies.
OUR STRATEGY IS TO
DEVELOP AND SUPPORT
POWERFUL BRANDS
THAT CUSTOMERS
KNOW AND TRUST
If our customers are to truly trust us to deliver products and services that are vital
to their interests, they want to be able to deal with brands that they recognise as
providing superior and focussed service levels.
28
InMotion: in response to customer
demand for an application that could
help them better manage and organise
outgoing communications, Dataprint
developed InMotion – a platform which
enables businesses to send either
electronic or physical mass communication
from their desktop. Amongst a host of
features, the platform applies business
rules, document tracking and scheduled
job release to take the hassle out of
sending mass communications.
Innovations this year
Messenger Services has continued to
innovate its portfolio of time sensitive
services by introducing an express
refrigerated delivery service this year.
It provides high quality business-to-
business and business-to-consumer
delivery of perishables and complements
the national delivery of perishable foods
and vaccines undertaken by Freightways’
hub and spoke brands.
SDG 9
Freightways Limited and its subsidiaries

TIMG has developed a workflow
management tool to assist businesses
manage previously cumbersome paper
communications. Paperlite detects either
pure digital, or scanned physical, inputs
and applies business rules to the critical
data that is collected. By automating
both the decision making that applies
to the data and the transfer of work to
appropriate departments, Paperlite is
forging a niche as a tool to aid
business efficiency.
Freightways’ in-house IT division (FIS)
has adopted Agile as a way of working
to implement a range of digital enabled
solutions for the Express Package
division. With all of the markets we operate
in experiencing significant rates of change
and an unquenchable demand for visibility
and data, it’s essential that new initiatives
are scoped and developed quickly. FIS has
developed teams which work in an integrated
way with the business to deliver 2 weekly
sprints of progress on the many projects we
have underway at any given time.
Shred-X has launched its first mobile
data destruction truck in Sydney in
response to demand from customers
for on-site secure destruction of their
electronic media. With increasingly large
penalties now in place in Australia for
data breach, it is critical that any device
that holds data is safely and securely
destroyed at the end of its life. Shred-X
has long provided offsite destruction
services and now can meet the needs
of customers who want data destroyed
right outside their doors.
Freightways Limited and its subsidiariesAnnual Report 2018
The Freightways family
29

TIMG is the information management specialist.
Our team take the pain out of managing physical
and digital information for our customers. Over 15
years, TIMG has grown from a small records storage
business in Auckland to an extensive operation
spanning 19 facilities in 15 cities, expanding as we
did so from a single line of business to 15 information
management services. As a result, TIMG is now well
positioned to continue building physical and digital
information management business in Australasia.

This year TIMG New Zealand was entrusted with
transforming data capture and processing for several
large government agencies in New Zealand. As
information management specialists, with particular
skills in critical areas like data security, we have
introduced technology to help these agencies update
inefficient paper-based processes.

One agency asked us to help solve the problem of
increased demand for paper-based application forms
and to improve their outdated and inefficient manual
processes. We scoped, implemented and managed
an outsourced digital solution that removed data entry,
improved accuracy, reduced risk and significantly
improved processing time.

Another agency needed our expertise to deliver a
large-scale scanning and data extraction solution.
To achieve this, we established a facility in a secure
location, configured specialised software to read
handwriting and brought in a team of around 150
people to receive, image, repair and transmit the data.

TIMG has delivered to New Zealand Government
agencies solutions that work, further enhancing their
reputation as a company to be trusted with matters
of national importance when accuracy, speed and
reliability are critical to success.
TIMG: INTRODUCING
NEW TECHNOLOGY TO THE
BUSINESS OF GOVERNMENT
SDG 9
TIMG is the information management specialist.
Our team take the pain out of managing physical
and digital information for our customers. Over 15
years, TIMG has grown from a small records storage
business in Auckland to an extensive operation
spanning 19 facilities in 15 cities, expanding as we
did so from a single line of business to 15 information
management services. As a result, TIMG is now well
positioned to continue building physical and digital
information management business in Australasia.

This year TIMG New Zealand was entrusted with
transforming data capture and processing for several
large government agencies in New Zealand. As
information management specialists, with particular
skills in critical areas like data security, we have
introduced technology to help these agencies update
inefficient paper-based processes.

One agency asked us to help solve the problem of
increased demand for paper-based application forms
and to improve their outdated and inefficient manual
processes. We scoped, implemented and managed
an outsourced digital solution that removed data entry,
improved accuracy, reduced risk and significantly
improved processing time.

Another agency needed our expertise to deliver a
large-scale scanning and data extraction solution.
To achieve this, we established a facility in a secure
location, configured specialised software to read
handwriting and brought in a team of around 150
people to receive, image, repair and transmit the data.

TIMG has delivered to New Zealand Government
agencies solutions that work, further enhancing their
reputation as a company to be trusted with matters
of national importance when accuracy, speed and
reliability are critical to success.
TIMG: INTRODUCING
NEW TECHNOLOGY TO THE
BUSINESS OF GOVERNMENT
SDG 9

Community
A YEAR OF
EXTENDING OUR
SENSE OF COMMUNITY
Child Cancer Foundation
NZ Couriers is proud to have a long-standing
relationship with Child Cancer Foundation.
Each year NZ Couriers provides a free
mail collection service, reduced and free
courier rates throughout the year and
regular donations to the Stars of Courage
programme – where each child diagnosed
with cancer is gifted a dedicated star. The
money we raise helps fund the $3 million
required annually for child and family
support services in New Zealand. To learn
more about the Child Cancer Foundation
please visit: www.childcancer.org.nz
Keep New Zealand Beautiful
Freightways is hugely grateful for what
this charity does for our country. Since
2001, along with monetary donations, our
people have rolled up their sleeves in the
annual Clean Up Week. We have also
provided valuable savings with reduced
courier rates. NZ Couriers sponsorship
of the “Volunteer of the Month”, and the
annual Beautiful Awards in categories
such as “Best Towns and Cities, “Best
Community / Environmentally Minded
Initiative” and “Sustainable Schools” also
helps to support those who generously
give their time and in doing so, encourages
others to join the cause. To find out more
about how to keep New Zealand beautiful
please visit: www.knzb.org.nz
Every day, the Freightways Group engages with hundreds of thousands of New Zealanders
and Australians in communities big and small. Sponsorship is one way that we look to
add our support to what those communities value. Acting in a sustainable way is part of
being a good corporate citizen and inspiring others to be responsible. Via our network of
motivated and passionate individuals we work with a variety of environmental, educational
and charitable groups. Of the many organisations we engage with as a Group, two are
signature sponsorship partners.
Community
01
Key community initiatives
Child Cancer Foundation
(03)
Kidsline (part of Lifeline)
Keep New Zealand Beautiful
(01)
The Hearing House
Beanies for Babies
Duffy Books
Auckland Rescue Helicopter Trust
(02)
Cancer Society
Auckland Kidney Society
McGrath Foundation
32
Freightways Limited and its subsidiaries

Freightways Limited and its subsidiariesAnnual Report 2018
01
02
03
33

Leading us forward
Susan Sheldon CNZM
Chairman
B.Com, FCA, CF Inst D
Mark Rushworth
BE (Hons), MEM
Kim Ellis
B.CA, B.ENG
Peter Kean
Mark Verbiest
LLB, CF INST D
Abby Foote
LLB (Hons), BCA, CMInstD, INFINZ (Cert)
OUR BOARD
Leading us forward
34
Andrea Staines joined the Board as a non-executive director in August 2018.
Freightways Limited and its subsidiaries

Leading us forward
Mark Troughear
Chief Executive Officer
BMS, Waikato University
Mark Royle
Chief Financial Officer and Company Secretary
B.BUS (Acc), CA
Matthew Cocker
Chief Information Officer
PhD, Georgetown University
Neil Wilson
General Manager, Freightways
Steve Wells
General Manager, Express Package Division
OUR LEADERSHIP TEAM
Freightways Limited and its subsidiariesAnnual Report 2018
35

Directors’ report
Directors’ report
The Directors of Freightways Limited (Freightways) resolved to
submit the following report with respect to the financial position
of the Group as at 30 June 2018 and its financial performance
and cash flows for the year ended on that date.
Directors
The names of the Directors of the Company in office at the date
of this report are:
Sue Sheldon CNZM, B.Com, FCA, CF Inst D.
Sue was appointed a Director in July 2003 and appointed
Chairman in October 2010. She is a Chartered Accountant and
full-time professional director and is currently a director of
Contact Energy Limited and Real Journeys Limited. Sue is
Independent Chair of the Audit & Risk Management Committee of
Christchurch City Council, Independent Chair of the Audit & Risk
Management Committee of Auckland City Council and a former
President of the New Zealand Institute of Chartered Accountants.
Kim Ellis
Kim was appointed a Director in August 2009. He spent 28 years
in chief executive roles in a number of sectors, including 13 years
as Managing Director of Waste Management NZ Limited until
its sale in 2006 to Transpacific Industries Pty Limited, and has
developed businesses in both New Zealand and Australia. Kim is
now a professional director working with both private and listed
companies. Kim is currently a director and the Chairman of NZ Social
Infrastructure Fund Limited, Metlifecare Limited and Sleepyhead
Group Limited. He is also a director of Port of Tauranga Limited,
FSF Management Company Limited and Ballance Agri-Nutrients
Limited and an advisor to Envirowaste Services Limited.
Abby Foote LLB (Hons), BCA, CMInstD, INFINZ (cert)
Abby was appointed a Director in June 2018. She is a professional
director with over 10 years’ governance experience, with qualifications
in both law and accounting. Abby has experience in a range of
senior management, finance and legal roles, with a focus on
corporate finance and commercial transactions. Abby is currently
a director of Z Energy Limited, where she chairs the Health, Safety,
Security & Environment Committee; a director and chair of the
audit & risk committees of The Museum of New Zealand Te Papa
Tongarewa, TVNZ and Livestock Improvement Corporation Limited;
and a director of Sanford Limited.
Peter Kean
Peter was appointed a Director in July 2016. He brings to
Freightways many years of senior executive experience with the
Lion group of companies in both New Zealand and Australia.
Peter’s last executive roles were as Managing Director of Lion
Nathan New Zealand and Managing Director of Lion Dairy and
Drinks, based in Melbourne. Peter retired from Lion in 2014 and
has since developed his career in governance. Peter is also a
director of Sanford Limited, the New Zealand Rugby Union and
a number of private companies.
Mark Rushworth BE(Hons), MEM
Mark was appointed a Director in September 2015. He has extensive
experience in the technology sector, with a decade’s governance
experience, predominantly in the high tech and innovation space.
An electrical engineer by training, with widespread operations and
marketing experience, he spent 4 years on the senior executive
team of Vodafone NZ through until 2010, where among other things
he had executive accountability for the fixed line business and as
executive director of marketing. Mark previously served as chief
executive of Pacific Fibre, Paymark Limited and internet provider
ihug. Mark is Chairman of Genoapay Limited and a director of
GeoOP Limited, Enable Networks Limited and Kin2kin Limited.
Mark Verbiest LLB, CF Inst D.
Mark was appointed a Director in February 2010. He is a professional
director with a strong working knowledge of technology and
technology-related businesses, as well as having extensive capital
markets experience. A lawyer by training, with widespread corporate
legal experience in private practice, he spent over 7 years on the
senior executive team of Telecom NZ through until mid-2008, where
among other things he had executive accountability for two business
units. Mark recently retired from his role as Chairman of Spark
New Zealand Limited. Mark is currently Chairman of Willis Bond
Capital Partners Limited and MyCare Limited, an early-staged digital
company. Mark is also a director of ANZ Bank New Zealand Limited
and Meridian Energy Limited and a member of both the Advisory
Board of The Treasury and the Commercial Operations Advisory
Board of The Treasury.
The Board has determined for the purposes of the NZX Listing Rules
that, as at 30 June 2018, Sue Sheldon, Kim Ellis, Abby Foote, Peter
Kean, Mark Rushworth and Mark Verbiest are independent Directors.
Principal activities
The principal activities of the Group during the year ended 30 June
2018 were the operation of express package & business mail services
and information management services.
Directors’ report
Freightways Limited and its subsidiaries
36

2018
$000
2017
$000
Operating revenue580,886545,262
Operating profit before interest, income tax and amortisation of intangibles96,28693,031
Amortisation of intangibles(1,954)(1,679)
Profit before interest and income tax
94,33291,352
Net interest and finance costs
(9,666)(9,570)
Profit before income tax
84,66681,782
Income tax(22,505)(20,926)
Profit for the year attributable to the shareholders62,16160,856
Group
Fees (per annum)
Position
Note
2018
$
2017
$
Board of DirectorsChairman(1)160,000152,000
Member85,00080,000
Audit & Risk CommitteeChairman(2)15,00010,500
People & Remuneration CommitteeChairman(2)7,5005,000
Committee work pool (if required)48,00045,500
Total annual fee pool limit(3)570,500533,000
Notes:
(1) Inclusive of all fees
(2) Exclusive of Board member fee
(3) Approved by shareholders at Annual Shareholders Meeting in October
Directors’ report
Directors’ report
Consolidated result for the year
Approved remuneration of directors (effective 1 November)
Directors holding office during the year were:
Parent:
Sue Sheldon (Chairman)
Dean Bracewell (resigned 31 December 2017)
Kim Ellis
Abby Foote (appointed 1 June 2018)
Peter Kean
Mark Rushworth
Mark Verbiest
Subsidiaries:
Dean Bracewell (resigned 31 December 2017)
Mark Troughear (appointed 1 January 2018)
Mark Royle
Freightways Limited and its subsidiariesAnnual Report 2018
37

2018
$
2017
$
Directors of Freightways (Parent company)
Sue Sheldon (Chairman)157,333150,767
Roger Corcoran (resigned 27 October 2016)-25,676
Kim Ellis90,00081,417
Abby Foote (appointed 1 June 2018)6,944-
Peter Kean83,33379,333
Mark Rushworth83,33379,333
Mark Verbiest96,83389,767
Total non-executive Directors517,776506,293
Dean Bracewell (Managing Director; resigned 31 December 2017)850,3991,370,140
Total Parent1,368,1751,876,433
Directors of Group subsidiaries only
Mark Troughear (CEO; appointed 1 January 2018)341,564-
Mark Royle (CFO)636,771679,007
978,335679,007
Total Group2,346,5102,555,440
Remuneration received by directors
Remuneration of other officers
Fixed remuneration of other officers, not being directors, representing a range from 76% to 84% of their total remuneration, is benchmarked to
market and consists of base salary and matched Kiwisaver contributions up to a maximum of 3%. The officers participate in an at-risk short-
term incentive (STI) scheme, representing a range from 16% to 24% of their total remuneration, that reflects the achievement of predetermined
company profit levels and individual performance objectives aligned to business strategy and goals. The officers also participate in the
Freightways Senior Executive Performance Share Plan (the ‘Plan’) described in Note 21 of the Financial Statements by way of an annual
allocation of partly-paid shares. The partly-paid shares have a 3-year vesting period and are subject to the achievement of financial hurdles,
as described in Note 21. Both the STI scheme and Senior Executive Performance Share Plan are variable, performance-based incentives
and are only awarded if specific financial and non-financial performance hurdles are met, and at the discretion of the Board. The Company’s
Remuneration Policy can be found at www.freightways.co.nz/about/corporate-governance
Remuneration of executive Directors includes the incentive payments made during the year ended 30 June 2018 in respect of the two
previous six-month performance periods (1 January to 30 June 2017 and 1 July to 31 December 2017). No amount is included above in
respect of incentive payments for the period 1 January to 30 June 2018, as these were paid in August 2018. Remuneration of the past
Managing Director comprised a fixed remuneration package representing 70% of his total remuneration and an ‘at risk’ portion representing
30%, payable on achievement of short-term financial objectives. He also participated in the Freightways Senior Executive Performance
Share Plan described in Note 21 of the Financial Statements by way of an annual allocation of partly-paid shares equivalent to 55% of his
fixed remuneration, but otherwise on the same terms and conditions as other Freightways executives. Remuneration of the Chief Executive
Officer and Chief Financial Officer (being the only Directors of all of Freightways Limited’s subsidiaries) comprises a fixed remuneration
package representing 70% and 78% of their total remuneration, respectively, and an ‘at risk’ portion representing 30% and 22%, respectively.
The performance hurdles for the Chief Executive Officer’s at risk portion, which are set by the Board at the start of each financial year, are
Group financial performance (weighted at 90%) and individual non-financial performance target (weighted at 10%). In the 2018 financial year,
non-financial objectives for both the past Managing Director and the Chief Executive Officer relate to health & safety. The Chief Executive
Officer and Chief Financial Officer also participate in the Freightways Senior Executive Performance Share Plan described in Note 21 of
the Financial Statements by way of an annual allocation of partly-paid shares equivalent to 25% of their respective fixed remuneration, but
otherwise on the same terms and conditions as other Freightways executives. The partly-paid shares have a 3-year vesting period and are
subject to the achievement of financial hurdles, as described in Note 21. The Company’s Remuneration Policy can be found at
www.freightways.co.nz/about/corporate-governance
Freightways Limited and its subsidiaries
38
Directors’ report
Directors’ report

Remuneration of employees
The number of employees, not being directors, within the Group receiving annual remuneration and benefits above $100,000 are as indicated in
the following table:
Group
2018
2017
$100,000 – $109,999 50 49
$110,000 – $119,999 34 31
$120,000 – $129,999 30 21
$130,000 – $139,999 10 24
$140,000 – $149,999 18 19
$150,000 – $159,999 18 6
$160,000 – $169,999 12 16
$170,000 – $179,999 9 10
$180,000 – $189,999 10 7
$190,000 – $199,999 3 10
$200,000 – $209,999 7 6
$210,000 – $219,999 7 5
$220,000 – $229,999 5 4
$230,000 – $239,999 2 -
$240,000 – $249,999 2 2
$250,000 – $259,999 1 1
$260,000 – $269,999 2 -
$270,000 – $279,999 2 -
$280,000 – $289,999-2
$290,000 – $299,99922
$300,000 – $309,99912
$310,000 – $319,9992-
$320,000 – $329,99911
$350,000 – $359,9991-
$360,000 – $369,9991-
$370,000 – $379,99911
$380,000 – $389,99921
$390,000 – $399,999-1
$400,000 – $409,9992-
$410,000 – $419,99911
$450,000 – $459,999-1
$510,000 – $519,999-1
$550,000 – $559,9991-
$680,000 – $689,9991-
Freightways Limited and its subsidiariesAnnual Report 2018
39
Directors’ report
Directors’ report

Entries in the register of directors’ interests
The Register of Directors’ Interests records that the following directors of Freightways Limited and its subsidiaries have an equity interest
in the Company. These Directors therefore have an interest in any transactions between Freightways Limited and any of its subsidiaries:
Freightways Limited shares
At balance date Directors held the following number of equity securities in the Company:
Fully-paid ordinary shares
Partly-paid
ordinary shares
BeneficiallyNon-beneficiallyBeneficially
Director
Sue Sheldon-121,262-
Kim Ellis-50,000-
Abby Foote---
Peter Kean10,500--
Mark Rushworth-8,000-
Mark Verbiest-10,000-
Mark Troughear-399,16714,558
Mark Royle-173,61725,791
Freightways Limited and its subsidiaries
40
Directors’ report
Directors’ report

Number$
Note
Acquired
(Disposed)
Cost
(Sale)
Dean Bracewell (resigned 31 December 2017)
Non-beneficial ownership in shares acquired 13 September 2017(i)42,194211,843
Beneficial ownership in partly-paid shares acquired 13 September 2017(ii)33,932339
Beneficial ownership in partly-paid shares disposed of 13 September 2017(iii)(41)-
Non-beneficial ownership in shares disposed of 30 October 2017(300,000)(2,264,894)
Mark Troughear (appointed 1 January 2018)
Beneficial ownership in shares acquired 13 September 2017(i)5,18626,016
Beneficial ownership in partly-paid shares acquired 13 September 2017(ii)4,06041
Beneficial ownership in partly-paid shares disposed of 13 September 2017(iii)(6)-
Non-beneficial ownership in shares acquired 13 September 2017(iv)3312,334
Mark Royle
Non-beneficial ownership in shares acquired 13 September 2017(i)9,52547,761
Beneficial ownership in partly-paid shares acquired 13 September 2017(ii)7,32873
Beneficial ownership in partly-paid shares disposed of 13 September 2017(iii)(11)-
Notes:
(i) Partly-paid shares fully paid-up under the Freightways Senior Executive Performance Share Plan.
(ii) Allocation of partly-paid shares under the Freightways Senior Executive Performance Share Plan.
(iii) Partly-paid shares redeemed for one cent each and cancelled by the Company under the Freightways Senior Executive
Performance Share Plan.
(iv) Allocation of fully paid shares under the Freightways Employee Share Plan.
The following table shows transactions recorded in respect of securities acquired or disposed of by Directors of the Group during the year
ended 30 June 2018:
Directors’ and officers’ liability insurance
Deeds of indemnity have been granted by the Company in favour of the Directors of the Company and its subsidiaries, to the fullest extent
permitted by the Companies Act 1993. In accordance with the deeds of indemnity, the Company has insured all its Directors and the Directors
of its subsidiaries against liabilities to other parties (except the Company or a related party of the Company) that may arise from their positions
as Directors. The insurance does not cover liabilities arising from criminal actions.
For and on behalf of the Board this 13th day of August 2018.
Susan Sheldon
Chairman
Mark Verbiest
Director
Freightways Limited and its subsidiariesAnnual Report 2018
41
Directors’ report
Directors’ report

PricewaterhouseCoopers, 188 Quay Street, Private Bag 92162, Auckland 1142, New Zealand
T: +64 9 355 8000, F: +64 9 355 8001, pwc.co.nz
Independent auditor’s report
To the shareholders of Freightways Limited
The financial statements comprise:
the balance sheet as at 30 June 2018;
the income statement for the year then ended;
the statement of comprehensive income for the year then ended;
the statement of changes in equity for the year then ended;
the statement of cash flows for the year then ended; and
the notes to the financial statements, which include a summary of significant accounting policies.
Our opinion
In our opinion, the financial statements of Freightways Limited (the Company), including its
subsidiaries (the Group), present fairly, in all material respects, the financial position of the Group as
at 30 June 2018, its financial performance and its cash flows for the year then ended in accordance
with New Zealand Equivalents to International Financial Reporting Standards (NZ IFRS) and
International Financial Reporting Standards (IFRS).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (New Zealand) (ISAs
NZ) and International Standards on Auditing (ISAs). Our responsibilities under those standards are
further described in theAuditor’s responsibilities for the audit of the financial statementssection of
our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
We are independent of the Group in accordance with Professional and Ethical Standard 1 (Revised)
Code of Ethics for Assurance Practitioners(PES 1) issued by the New Zealand Auditing and Assurance
Standards Board and the International Ethics Standards Board for Accountants’Code of Ethics for
Professional Accountants(IESBA Code), and we have fulfilled our other ethical responsibilities in
accordance with these requirements.
Our firm carries out other services for the Group in the areas of Data Integrity audit, specified
procedures over the poll for the shareholder resolutions at the Annual General Meeting, Executive
Remuneration Benchmarking and other related assurance services. The provision of these other
services has not impaired our independence as auditor of the Group.
Independent auditor’s report
Independent auditor’s report
To the shareholders of Freightways Limited
Freightways Limited and its subsidiaries
42

PwC
Our audit approach
Overview
An audit is designed to obtain reasonable assurance whether the
financial statements are free from material misstatement.
Overall Group materiality: $4.15 million, which represents approximately
5% of profit before tax.
We chose profit before tax as the benchmark because, in our view, it is
the benchmark against which the performance of the Group is most
commonly measured by users, and is a generally accepted benchmark.
We have determined that there are two key audit matters:
Impairment assessment of goodwill and brands
Prepaid Ticket Liability (“PTL”)
Materiality
The scope of our audit was influenced by our application of materiality.
Based on our professional judgement, we determined certain quantitative thresholds for materiality,
including the overall Group materiality for the financial statements as a whole as set out above. These,
together with qualitative considerations, helped us to determine the scope of our audit, the nature,
timing and extent of our audit procedures and to evaluate the effect of misstatements, both
individually and in aggregate on the financial statements as a whole.
Audit scope
We designed our audit by assessing the risks of material misstatement in the financial statements and
our application of materiality. As in all of our audits, we also addressed the risk of management
override of internal controls including among other matters, consideration of whether there was
evidence of bias that represented a risk of material misstatement due to fraud.
We tailored the scope of our audit in order to perform sufficient work to enable us to provide an
opinion on the financial statements as a whole, taking into account the structure of the Group, the
accounting processes and controls, and the industries in which the Group operates.
We conducted full scope audit work at four divisions which make up 72% of external revenue and 76%
of profit before tax in New Zealand and Australia. The remaining divisions in the Group were not
considered individually significant and depending on our risk assessment were subject to other audit
procedures such as analytical review, enquiry, testing key balances or reconciliations.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the financial statements of the current year. These matters were addressed in the context
of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
Independent auditor’s report
Independent auditor’s report
To the shareholders of Freightways Limited
Freightways Limited and its subsidiariesAnnual Report 2018
43

Freightways Limited and its subsidiaries
44
Independent auditor’s report
Independent auditor’s report
To the shareholders of Freightways Limited
PwC
Key audit matterHow our audit addressed the key audit matter
Impairment assessment of goodwill
and brands
As disclosed in note 13 of the
financial statements, the Group has
goodwill at 30 June 2018 of $208.2
million and brands valued at $114.8
million. The Group is required to
perform an annual impairment
assessment of both goodwill and
brands, which are accounted for as
indefinite life intangible assets.
This is a key focus of our audit due to
the value of these assets on the
balance sheet and the inherent
judgement in assessing these assets
for impairment.
Management prepared an
impairment assessment for the
Group based on the latest forecasts
for each Cash Generating Unit
(‘CGU’) using a discounted cash flow
model to support the goodwill and
brands balance on a value-in-use
basis.
The key assumptions used by
Management in creating their cash
flow model are included in note 13 of
the financial statements and include:
Growth rates;
Terminal growth rates; and
Discount rates.
As detailed in note 13, as a result of
these impairment assessments the
Directors have not identified any
impairment in the current year.
Our audit procedures included aspects of the following
depending on the level of sensitivity of each CGU:
We have considered the appropriate composition of
each CGU.
We tested the calculation of the impairment model
including the inputs and mathematical accuracy of the
model and comparison to the net assets value.
We assessed whether forecast earnings and growth
rates were supportable by performing the following:
assessing the reliability of management’s historical
budgets and forecasts by reference to actual
performance;
assessing whether the growth rates used over the 5
year forecast period were supported by historic
growth;
where appropriate, we understood the key changes
between the performance for the year to 30 June
2018 and the 2019 budget, in particular, key
movements in revenue and expenditure. We
considered these with reference to past
performance and changes that have been made
within the business.
We assessed whether terminal growth rates were
supportable by comparing them against New Zealand
and Australian long-term inflation rates.
We utilised our internal expert to assist us in the review
of the methodology utilised by management in their
value-in-use model and to assess the discount rates
based on our expert’s market and valuation knowledge.
We performed sensitivity analysis over management’s
key assumptions.
We have no matters to report from the procedures we have
undertaken.

Independent auditor’s report
Independent auditor’s report
To the shareholders of Freightways Limited
Freightways Limited and its subsidiariesAnnual Report 2018
45
PwC
Key audit matterHow our audit addressed the key audit matter
Prepaid Ticket Liability (“PTL”)
The prepaid ticket liability is
disclosed as ‘unearned income’ on
the balance sheet which represents
the deferral of revenue in relation to
the sale of prepaid tickets for courier
services in advance of the service
being provided. The PTL at 30 June
2018 was $15.9 million.
The PTL is an area of focus due to the
extent of audit effort that is required
to test the liability.
At each balance sheet date, the
calculation of the PTL is based on the
likely utilisation of the prepaid
tickets outstanding at year end. This
is based on historical prepaid ticket
utilisation. The percentage of prepaid
tickets not expected to be used are
released from the PTL to the income
statement as revenue.
Our audit procedures included the following:
We confirmed that the methodology applied for the
year ended 30 June 2018 was consistent with previous
periods.
We substantively tested the historical sales and use of
prepaid tickets to assess the usage assumptions for the
calculation of the liability in the current year.
We tested the system reports from which the data used
in the PTL calculation and revenue is recorded as
follows:
the sales of prepaid tickets during the year, which
increases the liability, was sample tested to invoices
issued and cash received.
for completeness of sales of prepaid tickets we have
agreed a sample of cash receipts from bank
statements to check whether the sale of prepaid
tickets was recorded as an increase in the liability.
to obtain comfort over the revenue recognised from
prepaid tickets being used, for a sample of
deliveries, we agreed the usage date to the date that
the package was scanned as delivered per the parcel
tracking website, and checked that the driver was
subsequently paid for delivery.
We challenged management’s underlying assumptions
of usage rates and the methodology used in the PTL
calculations by re-computing the usage profile
calculation based on the above tested inputs, as well as
assessing whether the revenue recognition policies
adopted comply with the accounting standards.
We re-performed the calculation of the PTL to test the
mathematical accuracy of the model.
From the evidence obtained and procedures performed, the
outcome of our testing was consistent with management’s
estimate.
Information other than the financial statements and auditor’s report
The Directors are responsible for the annual report. Our opinion on the financial statements does not
cover the other information included in the annual report and we do not, and will not express any form
of assurance conclusion on the other information.
In connection with our audit of the financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with
the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially
misstated. If, based on the work we have performed on the other information that we obtained prior to
the date of this auditor’s report, we conclude that there is a material misstatement of this other
information, we are required to report that fact.

Freightways Limited and its subsidiaries
46
Independent auditor’s report
Independent auditor’s report
To the shareholders of Freightways Limited
PwC
We have nothing to report in this regard, except that not all other information was available to us at
the date of our signing. Prior to the date of this report we had received and read Company Particulars,
Group Profile, Financial Summary, Report from the Chairman and Chief Executive Officer, Directors’
Report, Shareholder Information, Corporate Governance Statement and Directory. The remaining
other information is expected to be made available to us after the date of our report.
Responsibilities of the Directors for the financial statements
The Directors are responsible, on behalf of the Company, for the preparation and fair presentation of
the financial statements in accordance with NZ IFRS and IFRS, and for such internal control as the
Directors determine is necessary to enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Group’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the Directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements, as a whole,
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report
that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee
that an audit conducted in accordance with ISAs NZ and ISAs will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located at the
External Reporting Board’s website at:
https://www.xrb.govt.nz/standards-for-assurance-practitioners/auditors-responsibilities/audit-
report-1/
This description forms part of our auditor’s report.
Who we report to
This report is made solely to the Company’s shareholders, as a body. Our audit work has been
undertaken so that we might state those matters which we are required to state to them in an auditor’s
report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company and the Company’s shareholders, as a body, for our
audit work, for this report or for the opinions we have formed.
The engagement partner on the audit resulting in this independent auditor’s report is Leopino (Leo)
Foliaki.
For and on behalf of:
Chartered Accountants
13 August 2018
Auckland

Group
Note
2018
$000
2017
$000
Operating revenue
2580,886545,262
Other income52,5722,119
Transport and logistics expenses(229,812)(215,883)
Employee benefits expenses(159,161)(149,896)
Occupancy expenses
(26,385)(24,768)
General and administration expenses(57,798)(53,718)
Other expenses5(2,572)(2,119)
Non-recurring items3,52,5563,686
Operating profit before interest, income tax, depreciation
and software amortisation, and amortisation of intangibles110,286104,683
Depreciation and software amortisation3(14,000)(11,652)
Operating profit before interest, income tax and amortisation
of intangibles96,28693,031
Amortisation of intangibles3(1,954)(1,679)
Profit before interest and income tax
94,33291,352
Net interest and finance costs3(9,666)(9,570)
Profit before income tax
84,66681,782
Income tax4(22,505)(20,926)
Profit for the year attributable to the shareholders
62,16160,856
Earnings per share24
Basic earnings per share (cents)40.139.3
Diluted earnings per share (cents)40.039.2
NB: All revenue and earnings are from continuing operations.
The above Income Statement should be read in conjunction with the accompanying notes.
Income Statement
For the year ended 30 June 2018
Freightways Limited and its subsidiariesAnnual Report 2018
47
Financial statements

Financial statements
Freightways Limited and its subsidiaries
48
Statement of Comprehensive Income
For the year ended 30 June 2018
Group
Note
2018
$000
2017
$000
Profit for the year (NPAT)62,16160,856
Other comprehensive income
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translation of foreign operations201,775(41)
Cash flow hedges taken directly to equity, net of tax202,2612,927
Total other comprehensive income after income tax4,0362,886
Total comprehensive income for the year attributable
to the shareholders66,19763,742
The above Statement of Comprehensive Income should be read in conjunction with the accompanying notes.

Freightways Limited and its subsidiariesAnnual Report 2018
49
Financial statements
GroupContributed
equity
$000
Retained
earnings
$000
Cash flow
hedge reserve
$000
Foreign
currency
translation
reserve
$000
Total
equity
$000
Balance at 1 July 2017124,430124,072
(6,490)
(5,444)236,568
Profit for the year-62,161--62,161
Exchange differences on translation
of foreign operations
---1,7751,775
Cash flow hedges taken directly to equity,
net of tax--2,261-2,261
Total Comprehensive Income-62,1612,2611,77566,197
Dividend payments-(45,372)--(45,372)
Shares issued830---830
Balance at 30 June 2018125,260140,861(4,229)(3,669)258,223
GroupContributed
equity
$000
Retained
earnings
$000
Cash flow
hedge reserve
$000
Foreign
currency
translation
reserve
$000
Total
equity
$000
Balance at 1 July 2016123,852105,824
(9,417)
(5,403)214,856
Profit for the year-60,856--60,856
Exchange differences on translation
of foreign operations
---(41)(41)
Cash flow hedges taken directly to equity,
net of tax--2,927-2,927
Total Comprehensive Income-60,8562,927(41)
63,742
Dividend payments-(42,608)--(42,608)
Shares issued578---578
Balance at 30 June 2017124,430124,072(6,490)(5,444)236,568
The above Statement of Changes in Equity should be read in conjunction with the accompanying notes.
Statement of Changes in Equity
For the year ended 30 June 2018
The Board of Directors of Freightways Limited authorised these financial statements for issue on the date below.
For and on behalf of the Board this 13th day of August 2018.
Susan Sheldon
Chairman
Mark Verbiest
Director

Financial statements
Freightways Limited and its subsidiaries
50
Group
Note
2018
$000
2017
$000
Current assets
Cash and cash equivalents77,4108,423
Trade and other receivables882,15077,253
Inventories94,8045,190
Income tax receivable-705
Total current assets94,36491,571
Non-current assets
Trade receivables and other non-current assets8
4,803
3,787
Property, plant and equipment12
103,102
100,992
Intangible assets13
358,419
343,543
Total non-current assets466,324448,322
Total assets560,688539,893
Current liabilities
Trade and other payables15
66,887
65,722
Finance lease liabilities
126
147
Income tax payable5,5253,350
Provisions177101,008
Derivative financial instruments104512,054
Unearned income1815,86415,446
Total current liabilities89,56387,727
Non-current liabilities
Trade and other payables15
3,446
2,867
Borrowings (secured)19
161,800
166,241
Deferred tax liability1437,50635,606
Provisions174,4653,691
Finance lease liabilities286204
Derivative financial instruments10
5,399
6,989
Total non-current liabilities212,902215,598
Total liabilities302,465303,325
Net assets258,223236,568
Equity
Contributed equity
125,260
124,430
Retained earnings
140,861
124,072
Cash flow hedge reserve(4,229)(6,490)
Foreign currency translation reserve(3,669)(5,444)
Total equity
20
258,223236,568
The above Balance Sheet should be read in conjunction with the accompanying notes.
Balance Sheet
For the year ended 30 June 2018

Financial statements
Freightways Limited and its subsidiariesAnnual Report 2018
51
Group
Note
2018
$000
Inflows
(Outflows)
2017
$000
Inflows
(Outflows)
Cash flows from operating activities
Receipts from customers575,864535,943
Payments to suppliers and employees(471,175)(436,385)
Cash generated from operations104,68999,558
Interest received18278
Interest and other costs of finance paid(9,710)(9,820)
Income taxes paid(19,451)(24,559)
Net cash inflows from operating activities
22
75,71065,257
Cash flows from investing activities
Payments for property, plant and equipment(14,062)(21,507)
Payments for software (4,343)(3,689)
Proceeds from disposal of property, plant and equipment1,1601,064
Payments for businesses acquired (net of cash acquired) 29(7,865)(2,648)
Receipts (payments) from (to) associate464(1,671)
Cash flows from other investing activities
(218)
(517)
Net cash outflows from investing activities(24,864)(28,968)
Cash flows from financing activities
Dividends paid(45,372)(42,608)
Increase (decrease) in bank borrowings(7,521)7,174
Proceeds from issue of ordinary shares 704716
Finance lease liabilities repaid(114)(174)
Net cash outflows from financing activities(52,303)(34,892)
Net increase (decrease) in cash and cash equivalents
(1,457)1,397
Cash and cash equivalents at beginning of year8,423
7,065
Exchange rate adjustments
444(39)
Cash and cash equivalents at end of year
7
7,4108,423
The above Statement of Cash Flows should be read in conjunction with the accompanying notes.
Statement of Cash Flows
For the year ended 30 June 2018

Financial statements
Freightways Limited and its subsidiaries
52
Notes to the financial statements
For the year ended 30 June 2018
Note 1. Summary of significant accounting policies
(a) Reporting entity and statutory base
Freightways Limited is a company registered under the Companies
Act 1993 and is an FMC reporting entity under Part 7 of the Financial
Markets Conduct Act 2013. The financial statements of the Group
have been prepared in accordance with the requirements of Part 7
of the Financial Markets Conduct Act 2013 and the NZX Main Board
Listing Rules. In accordance with the Financial Markets Conduct
Act 2013, group financial statements are prepared and presented
for Freightways Limited and its subsidiaries. Accordingly, separate
financial statements for Freightways Limited are no longer required
to be prepared and presented.
The financial statements are stated in New Zealand dollars
rounded to the nearest thousand, unless otherwise indicated.
Basis of preparation
The consolidated financial statements of the Group have been
prepared in accordance with Generally Accepted Accounting
Practice in New Zealand (NZ GAAP).
The Group is a for-profit entity for the purposes of complying
with NZ GAAP. The consolidated financial statements comply
with New Zealand equivalents to International Financial Reporting
Standards (NZ IFRS), other New Zealand accounting standards
and authoritative notices that are applicable to entities that apply
NZ IFRS. The consolidated financial statements also comply with
International Financial Reporting Standards (IFRS).
Certain comparatives have been restated to align with current
year presentation.
The consolidated financial statements have been prepared on a
historical cost basis, except for derivative financial instruments,
which have been measured at fair value and assets held for sale
which are stated at fair value less estimated costs to sell.
Critical accounting estimates and judgements
The preparation of financial statements in conformity with NZ IFRS
requires the use of certain critical accounting estimates, where
necessary, and may require management to exercise judgement in
the process of applying the Group’s accounting policies. There are
no judgements made that are considered to have a significant risk
of causing a material adjustment to the carrying value of assets
or liabilities. Specific areas of critical accounting estimates and
assumptions used are as follows:
(i) Carrying value of indefinite life intangible assets
Impairment reviews are performed by management, at least
annually, to assess the carrying value of indefinite life intangible
assets, including goodwill and brand names. The recoverable
amounts of cash-generating units have been determined based
on value-in-use calculations. These calculations require the use
of estimates. Refer to Note 13.
(ii) Accounting for unearned income
An unearned income liability is recorded in the balance sheet
reflecting the future service obligation for products that have been
sold in advance of their use. The balance is supported by reference
to historical customer prepaid product usage patterns.
Accordingly, the balance is sensitive to movements in the future
level of customer purchases and use of prepaid products, which
involves estimates. Management regularly review the historical
usage patterns to ensure adequate unearned income
is recognised.
(iii) Fair value of derivatives
The fair value of financial instruments that are not traded in an
active market is determined by using valuation techniques. The
Group uses its judgement to select a variety of valuation methods
and makes assumptions that are mainly based on market
conditions existing at the end of each reporting period.
(iv) Customer relationships
The estimation of the useful lives of customer relationships
has been based on historical experience. The useful lives are
reviewed at least once per year and adjustments to useful
lives are made when considered necessary.
(v) Acquisition earn-out amounts payable
The valuation of the Group’s acquisition earn-out amounts payable
are based on the post-acquisition performance of the acquired
businesses. These fair value measurements require, among other
things, significant estimation of post-acquisition performance
of the acquired business and judgment on time value of money.
Acquisition earn-out amounts payable shall be remeasured at
their fair value resulting from events or factors that emerge after
the acquisition date, with any resulting gain or loss recognised
in the income statement. Judgement is applied to determine key
assumptions (such as growth in sales and margins) adopted in
the estimate of post-acquisition performance of the acquired
business. Judgement is also applied to determine the appropriate
discount rate applied to calculate the present value of the amount
payable. Changes to key assumptions may impact the future
payable amount. Refer also to Note 29.
(b) Basis of consolidation
(i) Subsidiaries
Subsidiaries are entities that are controlled either directly by the
Company or where the substance of the relationship between the
Company and the entity indicates the Company controls it. The
results of businesses acquired or disposed of during the year are
included in the consolidated income statement from the date of
acquisition or up to the date of disposal.

Financial statements
Freightways Limited and its subsidiariesAnnual Report 2018
53
Notes to the financial statements
For the year ended 30 June 2018
The consolidated financial statements include the Company and
its subsidiaries accounted for using the acquisition method. The
cost of an acquisition is measured as the fair value of the assets
acquired, equity instruments issued and liabilities incurred or
assumed at the date of acquisition. Costs directly attributable to
the acquisition are expensed to the income statement. Identifiable
assets acquired, liabilities and contingent liabilities assumed in a
business combination are measured initially at their fair values at
acquisition date. The excess of the consideration transferred over
the fair value of the Group’s share of the identifiable net assets
acquired is recorded as goodwill.
All material transactions between subsidiaries or between the
Company and subsidiaries are eliminated on consolidation.
Accounting policies of subsidiaries are consistent with those
adopted by the Group.
Any contingent consideration to be transferred by the Group
is recognised at fair value at the acquisition date. Subsequent
changes to the fair value of the contingent consideration that is
deemed to be an asset or liability is recognised in accordance
with NZ IAS 39 either in the income statement or as a change
to other comprehensive income. Contingent consideration that
is classified as equity is not remeasured, and its subsequent
settlement is accounted for within equity.
(ii) Joint arrangements and joint ventures
The Group applies NZ IFRS 11 to all joint arrangements.
Under NZ IFRS 11 investments in joint arrangements are
classified as either joint operations or joint ventures depending
on the contractual rights and obligations of each investor.
The Group has assessed the nature of its joint arrangements
and determined them to be joint ventures. Joint ventures are
accounted for using the equity method.
Under the equity method of accounting, interests in joint
ventures are initially recognised at cost and adjusted thereafter
to recognise the Group’s share of the post-acquisition profits
or losses and movements in other comprehensive income.
When the Group’s share of losses in a joint venture equals or
exceeds its interests in the joint venture (which includes any
long-term interests that, in substance, form part of the Group’s
net investment in the joint venture), the Group does not
recognise further losses, unless it has incurred obligations
or made payments on behalf of the joint venture.
Unrealised gains on transactions between the Group and
its joint ventures are eliminated to the extent of the Group’s
interest in the joint ventures. Unrealised losses are also
eliminated unless the transaction provides evidence of an
impairment of the asset transferred. Accounting policies of
joint ventures are changed where necessary to ensure
consistency with the policies adopted by the Group.
(c) Foreign currency translation
(i) Functional and presentation currency
Items included in the financial statements of each entity in the
Group are measured using the currency that best reflects the
primary economic environment in which the entity operates
(the “functional currency”). The consolidated financial statements
are presented in New Zealand Dollars, which is the Company’s
functional currency and the Group’s presentation currency.
(ii) Transactions and balances
Transactions in foreign currencies are translated into the
functional currency using the foreign exchange rate ruling
at the date of the transaction. Foreign exchange gains and
losses resulting from the settlement of such transactions and
from the translation at year-end exchange rates of monetary
assets and liabilities denominated in foreign currencies are
recognised in the income statement, except when deferred
in equity as qualifying cash flow hedges.
(iii) Foreign operations
The results and balance sheets of foreign operations (none
of which has the currency of a hyperinflationary economy)
that have a functional currency different from the presentation
currency are translated into the presentation currency as follows:
· assets and liabilities for the balance sheet presented are
translated at the closing rate at the date of the balance sheet
· income and expenses for the income statement are translated
at average exchange rates (unless this is not a reasonable
approximation of the cumulative effect of the rates prevailing on
the transaction dates, in which case income and expenses are
translated at the dates of the transactions)
· all resulting exchange differences are recognised as a separate
component of equity.
Goodwill and fair value adjustments arising on the acquisition of a
foreign operation are treated as assets and liabilities of the foreign
operation and translated at the closing rate.
(d) Revenue recognition
(i) Goods and services
Revenue is measured at the fair value of the consideration
received and receivable for goods and services supplied to
customers in the ordinary course of business. The Group
recognises revenue when the amount of revenue can be reliably
measured and when it is probable that future economic benefits
will flow to the entity. Income invoiced and received in advance
of a service being provided is recorded in the balance sheet as
‘Unearned Income’. This income is brought to account in the
year in which the service is provided.

Financial statements
Freightways Limited and its subsidiaries
54
Notes to the financial statements
For the year ended 30 June 2018
(ii) Interest income
Interest income is recognised on a time-proportionate basis
using the effective interest method, which takes into account
the effective yield on the relevant financial asset.
(iii) Dividend income
Dividend income from investments is recognised when
the shareholder’s right to receive payment is established.
(e) Impairment of non-financial assets
Assets that have an indefinite life are not subject to amortisation
and are tested annually for impairment. Assets that are subject to
amortisation or depreciation are reviewed for impairment whenever
events or changes in circumstances indicate that the carrying
amount may not be recoverable. An impairment loss is recognised
for the amount by which the asset’s carrying amount exceeds
its recoverable amount. The recoverable amount is the higher
of an asset’s fair value, less costs to sell, and value-in-use. For
the purposes of assessing impairment, assets are grouped at
the lowest levels for which there are separately identifiable cash
flows (cash-generating units).
(f) Financial assets
Regular purchases and sales of financial assets are recognised
on the trade date, i.e. the date on which the Group commits to
purchase or sell the asset. Financial assets are derecognised when
the rights to receive cash flows from the investments have expired
or the Group has transferred substantially all the risks and
rewards of ownership.
Financial assets are classified into the following specified
categories: financial assets ‘at fair value through profit or loss’
and ‘loans and receivables’. The classification depends on the
nature and purpose of the financial assets and is determined
at the time of initial recognition.
(i) Financial assets at fair value through profit or loss
This category has two sub-categories: financial assets held for
trading and those designated at fair value through profit or loss
at inception. A financial asset is classified in this category if
acquired principally for the purpose of selling in the short
term or if so designated by management. Derivatives are also
categorised as held for trading unless they are designated as
hedges. Assets in this category are classified as current assets
if they are either held for trading or are expected to be realised
within 12 months of the balance date.
(ii) Loans and receivables
Loans and receivables are non-derivative instruments with fixed
or determinable payments that are not quoted in an active market.
They are included in current assets, except for maturities greater
than 12 months after the balance date, which are classified as
non-current assets. Loans and receivables are reported separately
in Trade and other receivables and Cash and cash equivalents on
the balance sheet.
(g) Derivative financial instruments
Derivative financial instruments, such as interest rate caps and
collar contracts and fixed rate agreements are entered into from
time to time to manage interest rate exposure on borrowings.
Forward exchange contracts are also entered into from time to
time to manage foreign exchange exposures. Derivative financial
instruments are initially recognised at fair value on the date a
derivative contract is entered into and are subsequently remeasured
and restated to their fair value at the reporting date. The method
of recognising the resultant gain or loss depends on whether
the derivative financial instrument is designated as a hedging
instrument and, if so, the nature of the item being hedged. The
Group designates derivative financial instruments as either fair value
hedges (hedges of the fair value of recognised assets or liabilities or
a firm commitment) or cash flow hedges (hedges of highly probable
forecast transactions).
At the inception of the transaction, the Group documents the
relationship between the hedging instrument and the hedged
item, as well as its risk management objective and strategy for
undertaking the hedge transaction. The Group also documents its
assessment, both at hedge inception and on an ongoing basis, of
whether the derivative financial instruments that are used in hedging
transactions have been and will continue to be highly effective in
offsetting changes in fair values or cash flows of hedged items.
(i) Fair value hedges
Changes in the fair value of derivative financial instruments
that are designated and qualify as fair value hedges are recorded
in the income statement, together with any changes in the fair
value of the hedged asset or liability that are attributable to the
hedged risk.
(ii) Cash flow hedges
The effective portion of changes in the fair value of derivative
financial instruments that are designated and qualify as cash
flow hedges is recognised in equity in the cash flow hedge
reserve. The gain or loss relating to any ineffective portion is
recognised immediately in the income statement.
Amounts taken to equity are transferred to the income statement
when the hedged transaction affects profit or loss, such as when
hedged income or expenses are recognised or when a forecast
sale or purchase occurs. When the hedged item is the cost of a
non-financial asset or liability, the amounts taken to equity are
transferred to the initial carrying amount of the non-financial asset
or liability.
If the forecast transaction is no longer expected to occur,
amounts previously recognised in equity are immediately
transferred to the income statement. If the hedging instrument
expires or is sold, terminated or exercised without replacement
or rollover, or if its designation as a hedge is revoked, amounts
previously recognised in equity remain in equity until the forecast
transaction occurs. If the related transaction is not expected to
occur, the amount is taken immediately to the income statement.

Financial statements
Freightways Limited and its subsidiariesAnnual Report 2018
55
Notes to the financial statements
For the year ended 30 June 2018
(iii) Derivatives that do not qualify for hedge accounting
Certain derivative financial instruments do not qualify for
hedge accounting or hedge accounting has not been
adopted. Changes in the fair value of these derivative
financial instruments are recognised immediately in the
income statement.
(h) Fair value estimation
The fair value of financial assets and financial liabilities is
estimated for recognition and measurement or for disclosure
purposes. The fair value of financial instruments that are not
traded in an active market (for example, over the counter
derivatives) is determined using accepted treasury valuation
techniques, such as estimated discounted cash flows, by an
external treasury management system provider. The carrying
value of trade receivables (less provision for doubtful receivables)
and payables approximatetheir fair values.
(i) Employee entitlements
(i) Wages, salaries and annual leave
Liabilities for wages and salaries, including non-monetary
benefits, and annual leave expected to be settled within
12 months of the reporting date are recognised in respect
of employees’ services rendered up to the reporting date.
They are measured for recognition by assessing the amounts
expected to be paid when the liabilities are settled.
(ii) Long service leave
Liability for long service leave is recognised and measured
as the present value of expected future payments to be made
in respect of services provided by the employee. Consideration
is given to expected future wage and salary levels, experience
of employee departures and periods of service.
(iii) Share-based compensation
The Group operates an equity-settled, share-based compensation
plan for senior executives, under which the Group receives
services from employees as consideration for partly-paid ordinary
shares in the Company. The fair value of the employee services
received in exchange for the partly-paid ordinary shares is
recognised as an expense. The total amount to be expensed
is determined by reference to the fair value of the partly-paid
ordinary shares allotted, taking into account market vesting
conditions (for example, total shareholder return measures such
as outperforming the median of the NZX50 Index), but excluding
the impact of any non-market service and performance vesting
conditions (for example, compound growth rates for earnings per
share and remaining an employee of the Group over a specified
time period). Non-market vesting conditions are included in
assumptions about the number of partly-paid ordinary shares that
are expected to vest. The total amount expensed is recognised
over the relevant vesting period, which is the period over which
all of the specified vesting conditions are to be satisfied. At each
balance sheet date, the Group revises its estimates of the number
of partly-paid ordinary shares that are expected to vest based on
the non-market vesting conditions. It recognises the impact of the
revision to original estimates, if any, in the income statement.
(j) Capitalised interest and finance costs
Interest and finance costs incurred for the construction of a
qualifying asset are capitalised during the period of time that
is required to complete and prepare the asset for its intended
use. Other interest and finance costs are expensed.
(k) Goods and services tax (GST)
The income statement and statement of cash flows have been
prepared so that all components are stated exclusive of GST.
All items in the balance sheet are stated net of GST, with the
exception of trade receivables and payables, which include
GST invoiced.
(l) Changes in accounting policies
The accounting policies and methods of computation are
consistent with those used in the prior year.

Financial statements
Freightways Limited and its subsidiaries
56
Notes to the financial statements
For the year ended 30 June 2018
As at and for the year ended 30 June 2018:
Express
Package &
Business
Mail
$000
Information
Management
$000
Corporate
$000
Inter-
segment
Elimination
$000
Consolidated
Operations
$000
Income statement
Sales to external customers
427,096153,789 1-580,886
Inter-segment sales
1,664 384,535 (6,237) -
Total revenue
428,760153,827 4,536 (6,237) 580,886
Operating profit before non-recurring items,
interest, income tax, depreciationand software
amortisation, and amortisation of intangibles
74,84035,378(2,488)-107,730
Non-recurring items
-2,556--2,556
Operating profit before interest, income
tax, depreciation and software amortisation,
and amortisation of intangibles
74,84037,934(2,488)-110,286
Depreciation and software amortisation
(6,931) (5,550) (1,519) -(14,000)
Operating profit before interest, income
tax and amortisation of intangibles
67,90932,384(4,007)-96,286
Amortisation of intangibles
(50)(1,904)--(1,954)
Profit before interest and income tax
67,85930,480(4,007)-94,332
Net interest and finance costs
(20)(251)(9,395)-(9,666)
Profit before income tax
67,83930,229(13,402)-84,666
Income tax
(18,729)(8,105)4,329-(22,505)
Profit for the year attributable to the
shareholders
49,110 22,124 (9,073) -62,161
Balance sheet
Segment assets300,254220,93039,504-560,688
Segment liabilities60,08029,623212,762-302,465
Additions to non-current assets, excluding
deferred tax asset10,20419,93948-30,191
Note 2. Segment reporting
A segment is a component of the Group that can be distinguished from other components of the Group by the products or services it sells, the
primary market it operates in and the risks and returns applicable to it. Operating segments are reported upon in a manner consistent with the
internal reporting used by the Chief Executive Officer, as the chief operating decision maker, and the Board for allocating resources, assessing
performance and strategic decision making.
The Group is organised into the following reportable operating segments:
Express package & business mail: Comprises network courier, point-to-point courier and postal services.
Information management: Comprises secure paper-based and electronic business information management services.
Corporate and other: Comprises corporate, financing and property management services.
The Group has no individual customer that represents more than 3% of external sales revenue.

Financial statements
Freightways Limited and its subsidiariesAnnual Report 2018
57
Notes to the financial statements
For the year ended 30 June 2018
As at and for the year ended 30 June 2017:
Express
Package &
Business
Mail
$000
Information
Management
$000
Corporate
$000
Inter-
segment
Elimination
$000
Consolidated
Operations
$000
Income statement
Sales to external customers401,071144,1901-545,262
Inter-segment sales1,522474,510(6,079)-
Total revenue
402,593144,2374,511(6,079)545,262
Operating profit before non-recurring
items, interest, income tax, depreciation
and software amortisation, and amortisation
of intangibles70,35332,727(2,083)-100,997
Non-recurring items-3,686--3,686
Operating profit before interest, income
tax, depreciation and software amortisation,
and amortisation of intangibles70,35336,413(2,083)-104,683
Depreciation and software amortisation(5,083)(5,050)(1,519)-(11,652)
Operating profit before interest, income
tax and amortisation of intangibles65,27031,363(3,602)-93,031
Amortisation of intangibles(50)(1,629)--(1,679)
Profit before interest and income tax65,22029,734(3,602)-91,352
Net interest and finance costs(30)(320)(9,220)-(9,570)
Profit before income tax65,19029,414(12,822)-81,782
Income tax(18,050)(6,883)4,007-(20,926)
Profit for the year attributable to the
shareholders47,14022,531(8,815)-60,856
Balance sheet
Segment assets292,718206,12641,049-539,893
Segment liabilities83,06532,940187,320-303,325
Additions to non-current assets, excluding
deferred tax asset19,45612,56796-32,119
Segment assets and liabilities are disclosed net of inter-company balances.
For the year ended 30 June 2018, external revenue from customers in the Group’s New Zealand and Australian operations
was $472.6 million and $108.3 million, respectively (2017: $444.1 million and $101.2 million, respectively). As at 30 June 2018,
non-current assets in respect of the New Zealand and Australian operations (excluding deferred tax assets) were $310.9 million
and $155.4 million, respectively (2017: $308.2 million and $140.2 million, respectively).

Financial statements
Freightways Limited and its subsidiaries
58
Notes to the financial statements
For the year ended 30 June 2018
Group
Note
2018
$000
2017
$000
Income
Interest income180443
Operating expenses
Net loss (gain) on disposal of property, plant and equipment(994)229
Depreciation 1211,7789,838
Amortisation of intangible assets131,9541,679
Amortisation of software 132,222 1,814
Operating lease expenses24,28123,062
Auditors’ fees
Audit of annual financial statements and review
of interim financial statements 402369
Annual Shareholders Meeting specified procedures87
Directors benchmarking fees2210
Data integrity audit54-
Costs of offering credit
Impairment loss (gain) on trade receivables(13)23
Interest and finance costs
Interest on bank borrowings9,7089,606
Interest on finance leases2430
Derivative fair value movement(52)208
Unwinding of discount on acquisition earn-out liability166169
Other
Net foreign exchange loss (gain)318
Directors’ fees518506
Donations347300
Non-recurring (gain) loss*
Insurance proceeds for replacement racking(2,994)-
Impairment loss on damaged racking1,978-
Reversal of earn-out payables(1,540)(5,630)
Premises relocation cost-1,944
* Non-recurring items for the years ended 30 June 2018 and 30 June 2017, as applicable, relate to:
· insurance proceeds received from the Group’s insurers to reinstate racking in Wellington damaged by the North Canterbury earthquake;
· impairment loss related to the write-off of the earthquake-damaged racking in Wellington;
· reversal of previously-accrued earn-out payables that are no longer expected to be paid; and
· relocation costs of the TIMG business in Sydney.
Note 3. Income and expenses
Profit before income tax includes the following specific income and expenses:

Financial statements
Freightways Limited and its subsidiariesAnnual Report 2018
59
Notes to the financial statements
For the year ended 30 June 2018
Group
2018
$000
2017
$000
Current tax
Current tax on profit for the year22,32521,037
Deferred tax (Note 14)
Reversal of temporary differences180 (111)
Total deferred tax180 (111)
Income tax expense22,505 20,926
Income tax applicable to the Group’s net profit before tax differs from the theoretical amount that would arise using the weighted average
tax rate applicable to the profits of the consolidated entities, as follows:
Profit before income tax84,666 81,782
Income tax calculated at domestic tax rates applicable to the accounting
profits in the respective countries23,934 23,151
Tax-effect of amounts which are treated differently
when calculating taxable income:
· Additional amounts deductible
(1,426)(2,578)
· Other(3)353
Income tax expense22,50520,926
The Group has no tax losses (2017: Nil) and no unrecognised temporary differences (2017: Nil).
Note 4. Income tax expense
The income tax expense for the year is the tax payable on the current year’s taxable income based on the income tax rate for each jurisdiction
adjusted by changes in deferred tax assets and liabilities attributable to temporary differences between the tax bases of assets and liabilities and
their carrying amounts in the financial statements.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply when the assets are recovered or
liabilities are settled, based on those tax rates which are enacted or substantively enacted for each jurisdiction. The relevant tax rates are applied
to the cumulative amounts of deductible and taxable temporary differences to measure the deferred tax asset or liability. An exception is made
for certain temporary differences arising from the initial recognition of an asset or a liability. No deferred tax asset or liability is recognised in
relation to these temporary differences if they arose as a result of a transaction, other than a business combination, that at the time of the
transaction did not affect either accounting profit or taxable income.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable
amounts will be available to utilise those temporary differences and losses.
Current and deferred tax balances attributable to amounts that have been recognised directly in equity, are also taken directly to equity.
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax
liabilities and when the deferred income tax assets and liabilities relate to income taxes levied by the same taxation authority on either the
same taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.

Financial statements
Freightways Limited and its subsidiaries
60
Notes to the financial statements
For the year ended 30 June 2018
Group
2018
$000
2017
$000
Imputation credits account
Imputation credits available for use in subsequent reporting periods31,28730,284
The above amounts represent the balance of the imputation account as at the end of the reporting period, adjusted for:
(a) Imputation credits that will arise from the payment of the amount of the provision for income tax;
(b) Imputation debits that will arise from the payment of dividends recognised as a liability at the reporting date; and
(c) Imputation credits that will arise from the receipt of dividends recognised as receivables at the reporting date.
Imputation credits that will be attached to the final dividend for 2018 which was declared subsequent to 30 June 2018 will reduce
the above-stated available balance of imputation credits by approximately $9.2 million.
2017 ($000)Before taxTax (charge)
/Credit
After tax
Exchange difference on translation of foreign operations(41)-(41)
Cash flow hedges taken directly to equity 4,066(1,139)2,927
Other comprehensive income4,025(1,139)2,886
Current tax-
Deferred tax (1,139)
(1,139)
The tax (charge)/credit relating to components of other comprehensive income is as follows:
2018 ($000)Before taxTax (charge)
/credit
After tax
Exchange difference on translation of foreign operations1,775-1,775
Cash flow hedges taken directly to equity 3,140(879)2,261
Other comprehensive income4,915(879)4,036
Current tax-
Deferred tax (879)
(879)
Note 5. Impairment loss and compensation
Included in non-recurring items is an impairment loss of $2 million related to the information management division’s racking at its Porirua
site in Wellington that was damaged by the North Canterbury earthquake. It has been determined that all of this racking will be replaced
under insurance. Accordingly, also included in non-recurring items is $3 million of insurance proceeds received from the Group’s insurers
to reinstate this damaged racking.
Included in other expenses is an amount of $2.6 million in additional costs of operations resulting from the above-mentioned earthquake,
which are also recoverable from insurance, and compensation of $2.6 million received from the Group’s insurers for these additional costs
of operations has been included in other income.

Financial statements
Freightways Limited and its subsidiariesAnnual Report 2018
61
Notes to the financial statements
For the year ended 30 June 2018
Group
2018
$000
2017
$000
Comprises
· Cash at bank
7,301
8,318
· Overnight deposits
109 105
Cash and cash equivalents in statement of cash flows
7,4108,423
Group
2018
$000
2017
$000
Recognised amounts
Fully imputed dividends declared and paid during the year:
Final dividend for 2017 at 14.75 cents per share (2016: 14.5 cents)22,88022,466
Interim dividend for 2018 at 14.5 cents per share (2017: 13.0 cents)
22,49220,142
45,37242,608
Unrecognised amounts
Final dividend for 2018 at 15.25 cents per share (2017: 14.75 cents)
23,712 22,884
Subsequent to balance date the above unrecognised dividend was approved by a directors’ resolution dated 13 August 2018.
This amount has not been recognised as a liability at the reporting date, but will be brought to account when paid.
Note 7. Cash and cash equivalents
Cash and cash equivalents comprise cash balances and overnight deposits. Bank overdrafts that are repayable on demand and form an
integral part of the Group’s cash management are included as a component of cash and cash equivalents for the purpose of the statement
of cash flows. Bank overdrafts are shown within borrowings in the current liabilities on the balance sheet to the extent they exceed the
legal right of off-set against cash included in current assets.
Note 6. Dividends
Note 8. Trade receivables and other non-current assets
Trade and other receivables are recognised at their fair value and subsequently measured at amortised cost using the effective interest rate,
less provision for impairment.

Financial statements
Freightways Limited and its subsidiaries
62
Notes to the financial statements
For the year ended 30 June 2018
Group
2018
$000
2017
$000
Current
Trade receivables70,99467,249
Provision for doubtful receivables(1,629)(1,655)
69,36565,594
Other debtors and prepayments12,44911,390
Share plan loans receivable from employee336269
82,15077,253
Non-current
Share plan loans receivable from employees198140
Other non-current assets4,6053,647
4,8033,787
Trade receivables are non-interest bearing and are generally on 7-30 day terms.
Recoverability of trade and other receivables is reviewed on an ongoing basis. Amounts that are known to be uncollectible are
written-off when identified. An allowance for doubtful receivables is raised when there is objective evidence that the Group will
not be able to collect all amounts due according to the original terms of the receivable.
The movements in the provision for doubtful receivables for the Group were as follows:
Group
2018
$000
2017
$000
Opening balance1,6551,649
Provision for doubtful receivables74192
Receivables written off during the year as uncollectible(117)(188)
Exchange rate movement172
Closing balance (Note 27.1(b))1,6291,655
Group
2018
$000
2017
$000
Finished goods1,9231,682
Ticket stocks, uniforms and consumables2,8813,508
4,8045,190
Note 9. Inventories
Inventories are stated at the lower of cost, determined on a first-in-first-out basis, and net realisable value. Full provision is made for
obsolescence, where applicable. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated
costs of completion and the estimated costs necessary to make the sale. The cost of inventories recognised as an expense and included
in ‘general and administration expenses’ amounted to $11.7 million (2017: $12.3 million).

Financial statements
Freightways Limited and its subsidiariesAnnual Report 2018
63
Notes to the financial statements
For the year ended 30 June 2018
Group
2018
$000
Asset (Liability)
2017
$000
Asset (Liability)
Current
Interest rate swaps – cash flow hedge(264)(1,470)
Forward foreign exchange contracts – cash flow hedge(187)(584)
(451)(2,054)
Non-current
Interest rate swaps – cash flow hedge(5,119)(5,584)
Forward foreign exchange contracts – cash flow hedge(280)(1,405)
(5,399)(6,989)
The notional or principal contract amounts of derivative financial instruments outstanding at balance date are:
NZDAUD
2018
$000
2017
$000
2018
$000
2017
$000
Interest rate swaps59,00079,00058,00068,000
Forward foreign exchange contracts29,55125,021--
Note 10. Derivative financial instruments
An income of $0.1 million, representing predominantly the hedge instrument expiring, was recognised in the income statement during
the year (2017: $0.2 million).
(i) Forward foreign exchange contracts
The forward foreign exchange contracts hedge highly probably forecast transactions denominated in foreign currency and are timed
to mature when payments are scheduled to be made. Gains and losses recognised in the hedging reserve in equity on forward foreign
exchange contracts as of 30 June 2018 are recognised in the income statement in the period during which the hedged forecast
transaction affects the income statement. The cash flows are expected to occur monthly for the next five years.
(ii) Interest rate swaps
The interest rate derivatives are 100% effective as cash flow hedges against the future interest payments of the Group (2017: 100%).
Gains and losses recognised in the hedging reserve in equity on interest rate swap contracts as of 30 June 2018 will be continuously
released to the income statement within finance costs until the repayment of the applicable bank borrowings.

Financial statements
Freightways Limited and its subsidiaries
64
Notes to the financial statements
For the year ended 30 June 2018
Name of entityPrincipal activitiesCountry of Incorporation
Air Freight NZ LimitedExpress package linehaulNew Zealand
Castle Parcels LimitedExpress package servicesNew Zealand
Fieldair Engineering LimitedGeneral & aviation engineering servicesNew Zealand
Fieldair Holdings LimitedAviation-related servicesNew Zealand
Freightways Finance LimitedGroup treasury managementNew Zealand
Freightways Information Services LimitedIT infrastructure support servicesNew Zealand
Freightways Properties LimitedProperty managementNew Zealand
Freightways Trustee Company LimitedTrustee of Freightways Employee Share PlanNew Zealand
Info Management Services Australia LPAustralian treasury servicesAustralia
LitSupport Pty LimitedInformation managementAustralia
Med-X Pty LimitedInformation managementAustralia
Messenger Services LimitedExpress package servicesNew Zealand
New Zealand Couriers LimitedExpress package servicesNew Zealand
New Zealand Document Exchange LimitedBusiness mailNew Zealand
NOW Couriers LimitedExpress package servicesNew Zealand
Parceline Express LimitedExpress package linehaulNew Zealand
Post Haste LimitedExpress package servicesNew Zealand
Shred-X Pty LimitedInformation managementAustralia
The Information Management Group (NZ) LimitedInformation managementNew Zealand
The Information Management Group Pty LimitedInformation managementAustralia
Other than the formation of a new subsidiary, Med-X Pty Limited, to facilitate the acquisition of medical waste businesses in Australia,
there has been no change in investments in subsidiaries during the year.
Note 11. Investments in subsidiaries
The Company’s investment in its only directly-owned subsidiary, Freightways Express Limited (FEL), comprises shares at cost.
Listed below are all the significant subsidiaries wholly-owned directly or indirectly by FEL. All subsidiaries have a balance date of 30 June.

Financial statements
Freightways Limited and its subsidiariesAnnual Report 2018
65
Notes to the financial statements
For the year ended 30 June 2018
LandBuildingsLeasehold
alterations
Motor
vehicles
EquipmentTotal
2018 ($000)
Opening net book value
13,748 23,452 3,618 5,739 54,435 100,992
Additions-11753 2,347 10,880 13,991
Acquisitions through business
combinations (Note 29)---7373481,085
Depreciation expense-(1,607) (665) (1,435) (8,071) (11,778)
Disposals--(3)(114) (2,029) (2,146)
Exchange rate movement52 51 59 157 639 958
Closing net book value13,800 21,907 3,762 7,431 56,202 103,102
As at end of year
Cost13,800 39,509 9,58717,280 115,662 195,838
Accumulated depreciation-(17,602) (5,825) (9,849) (59,460) (92,736)
Net book value13,80021,907 3,7627,43156,202 103,102
Note 12. Property, plant and equipment
Property, plant and equipment are stated at historical cost less accumulated depreciation and any accumulated impairment losses.
Historical cost includes all expenditure directly attributable to the acquisition or construction of the item, including interest.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable
that future economic benefits associated will flow to the Group and the cost of the asset can be measured reliably. Such cost includes the
cost of replacing parts that are eligible for capitalisation when the cost of replacing the parts is incurred. The carrying amount of the replaced
part is derecognised. All other repairs and maintenance costs are recognised in the income statement as incurred.
Depreciation is calculated on a straight line basis on all tangible fixed assets, other than land and leasehold improvements, so as to expense
the cost of the assets to their estimated residual values over their estimated useful lives. Land is not depreciated. Leasehold improvements
are depreciated over the shorter of the unexpired period of the lease and the estimated useful life of the improvements. Estimated useful lives
are as follows:
Estimated useful life
Buildings 25 to 50 years
Leasehold alterations period of the lease or estimated useful life
Motor vehicles 5 to 10 years
Equipment 3 to 20 years
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance date.

Financial statements
Freightways Limited and its subsidiaries
66
Notes to the financial statements
For the year ended 30 June 2018
LandBuildingsLeasehold
alterations
Motor
vehicles
EquipmentTotal
2017 ($000)
Opening net book value
13,744 25,061 3,2594,851 40,764 87,679
Additions--1,110 2,156 19,968 23,234
Acquisitions through business
combinations----144144
Depreciation expense-(1,607) (638) (1,269) (6,324) (9,838)
Disposals-(7)(118)(6) (161) (292)
Exchange rate movement4 5 5 7 44 65
Closing net book value13,748 23,452 3,6185,739 54,435 100,992
As at end of year
Cost13,748 39,434 9,001 13,750 112,311 188,244
Accumulated depreciation-(15,982) (5,383) (8,011) (57,876) (87,252)
Net book value13,748 23,452 3,6185,73954,435 100,992
The cost of equipment in respect of assets under construction for which depreciation has not commenced as at 30 June 2018 is
$3 million (2017: Nil).
The latest independent valuations of land and buildings (performed in June 2018) assess these assets to have a total fair value of
$71.3 million. The fair values have been derived using the direct capitalisation approach. The valuation technique uses significant
unobservable inputs, namely capitalisation rate and potential new market income of land and buildings. Therefore, these are
considered level 3 valuations, as defined in Note 27.1(d).
Note 13. Intangible assets
(i) Goodwill
Goodwill represents the excess of the consideration transferred in an acquisition over the fair value of the Group’s share of the net
identifiable assets of the acquired business at the date of acquisition. Goodwill is not amortised, but is tested for impairment annually
or whenever events or changes in circumstances indicate that it might be impaired, and is carried at cost less accumulated impairment
losses. Goodwill is allocated to cash-generating units for the purpose of impairment testing.
(ii) Brand names
Acquired brand names are recognised at cost, being their fair value at the date of acquisition if acquired in a business combination.
Brand names with indefinite useful lives are not subject to amortisation, but are tested for impairment annually or whenever events
or changes in circumstances indicate that they might be impaired, and are carried at cost less amortisation and impairment losses.
The useful lives and amortisation methods are reviewed and adjusted, if appropriate, at each balance sheet date.
Brand names are allocated to cash-generating units for the purpose of impairment testing. The allocation is made to those cash-generating
units or groups of cash-generating units that are expected to benefit from the brand names.
An independent valuation of the brand names was conducted by Deloitte in July 2018. This independent report assessed the fair market
value of the brand names as at 30 June 2018 to be between $349 million and $385 million, using the value-in-use approach. The valuation
technique uses significant unobservable inputs, namely discount rate, growth rate and cash flow. Therefore, these are considered level 3
valuations, as defined in Note 27.1(d).
(iii) Computer software
External software costs, together with payroll and related costs for employees directly associated with the development of software,
are capitalised. Costs associated with upgrades and enhancements are capitalised to the extent they result in additional functionality.
Amortisation is charged on a straight-line basis over the estimated useful life of the software which ranges between 3 and 10 years.
Included in the cost of software is work in progress of $2.9 million (2017: $2.9 million) for which amortisation has not commenced.

Financial statements
Freightways Limited and its subsidiariesAnnual Report 2018
67
Notes to the financial statements
For the year ended 30 June 2018
GoodwillBrand
names
SoftwareCustomer
relationships
OtherTotal
2018 ($000)
Opening net book value
197,287114,045 12,17917,044 2,988 343,543
Additions--4,343 -218 4,561
Acquisition through business
combinations (Note 29)8,145--2,419 -10,564
Amortisation expense
--(2,222) (1,686) (268) (4,176)
Exchange rate movement2,747 730 59 309 82 3,927
Closing net book value208,179 114,775 14,35918,086 3,020 358,419
As at end of year
Cost226,841 114,775
27,540
24,979
4,526
398,661
Accumulated amortisation(18,662)-(13,181) (6,893) (1,506) (40,242)
Net book value
208,179 114,775 14,359 18,086 3,020 358,419
GoodwillBrand
names
SoftwareCustomer
relationships
OtherTotal
2017 ($000)
Opening net book value
193,037113,976 10,29717,946 2,648 337,904
Additions--3,689 -517 4,206
Acquisition through
business combinations 3,972--554 -4,526
Amortisation expense
--(1,814) (1,498) (181) (3,493)
Exchange rate movement278 69 7 42 4 400
Closing net book value197,287 114,045 12,17917,044 2,988 343,543
As at end of year
Cost215,949 114,045
23,099
22,118
4,215
379,426
Accumulated amortisation(18,662)-(10,920) (5,074) (1,227) (35,883)
Net book value
197,287 114,045 12,179 17,044 2,988 343,543
(iv) Customer relationships
· Contractual: An intangible asset is recorded at fair value in respect of the amount of any contractual termination fees payable by
customers of businesses acquired in respect of their document holdings. As it is not known when permanent retrieval fees may arise,
this asset is only amortised upon the actual retrieval fee being charged to the respective customer.
· Other: Non-contractual customer relationships acquired in a business combination are recognised at fair value at the acquisition
date. These customer relationships have an estimated finite useful life and are carried at cost less accumulated amortisation.
Amortisation is calculated using the straight-line method over the expected useful life of the customer relationship which ranges
between 10 and 20 years.

Financial statements
Freightways Limited and its subsidiaries
68
Notes to the financial statements
For the year ended 30 June 2018
Goodwill Brand names
2018
$000
2017
$000
2018
$000
2017
$000
Messenger Services8,7668,7665,1005,100
New Zealand Couriers47,75247,75258,50058,500
New Zealand Document Exchange10,96710,9675,9005,900
Dataprint
4,125
4,125
1,310
1,310
Post Haste, Castle Parcels and NOW Couriers27,15927,15918,39518,395
Total Express Package & Business Mail98,76998,76989,20589,205
The Information Management Group (New Zealand)17,57717,5774,4004,400
The Information Management Group (Australia)55,36153,48917,80517,191
Shred-X36,47227,4533,3653,249
Total Information Management109,41098,51925,57024,840
Total208,179197,288114,775114,045
(i) Key assumptions used for value-in-use calculations
On an annual basis, the recoverable amount of goodwill and brand names is determined based on value-in-use calculations specific
to the CGU associated with both goodwill and brand names.
These calculations use pre-tax cash flow projections based on financial budgets prepared by management and approved by the
Board for the year ended 30 June 2019. Cash flows beyond June 2019 have been extrapolated using growth rates which do not
exceed the historical compound annual earnings growth rates for each respective CGU, taking into consideration current and
forecast economic conditions.
The compound annual earnings growth rate for the Express Package & Business Mail segment over the past 10 years has been
approximately 3% (2017: 3%). A 1% (2017: 1%) growth rate and 1% (2017: 1%) terminal growth rate have been applied to the
Express Package & Business Mail businesses in the value-in-use calculation.
For the Information Management segment, the compound annual earnings growth rate for the last 5 years of approximately
9% (2017: 10%) is considered indicative of the growth in this segment since the Company’s expansion into Australia and a 3%
(2017: 3%) growth rate and 2.5% (2017: 2.5%) terminal growth rate have been applied to the value-in-use calculation.
In particular, for The Information Management Group (Australia) CGU, within the Information Management segment, the average
annual compound growth rate in the value-in-use calculation is 8% for the first 5 years from 2018. This growth rate would have to
reduce to 1.5% to result in there being no excess over the carrying value of this CGU. This is considered an unlikely eventuality.
A pre-tax discount rate of 11% (2017: 11%) has been applied to all CGU’s.
The value-in-use calculations indicate that the recoverable amounts of goodwill and brand names exceed their carrying values and
therefore there is no impairment in the value of goodwill and brand names.
(ii) Sensitivity to changes in assumptions
With regard to the value-in-use assessment for all CGU’s, management believes that no reasonably possible change in any of the above
assumptions would cause the carrying values of goodwill and brand names to materially exceed their respective recoverable amounts.
Impairment tests for indefinite life intangible assets
Goodwill and brand names are allocated to those cash-generating units (CGU’s) or groups of CGU’s that are expected to benefit from
them. The carrying amount of intangible assets allocated by CGU or group of CGU’s is outlined below:

Financial statements
Freightways Limited and its subsidiariesAnnual Report 2018
69
Notes to the financial statements
For the year ended 30 June 2018
Property,
plant and
equipment
Employee
entitlements
Accruals
and
provisions
Derivative
financial
instruments
Intangible
assets
Total
2018 ($000)
Balance at beginning of year(7,941)3,786 2,876 2,531 (36,858)(35,606)
Prior period adjustment(1,010)(6)(4)-(14)(1,034)
Transfer to income statement3626956(14)507854
Amounts relating to business
combinations (Note 29)-54--(693) (639)
Adjustment for cash flow hedge reserve---(879)-(879)
Exchange rate movement3 7089-(364)(202)
Balance at end of year(8,912)4,173 3,0171,638 (37,422)(37,506)
Property,
plant and
equipment
Employee
entitlements
Accruals
and
provisions
Derivative
financial
instruments
Intangible
assets
Total
2017 ($000)
Balance at beginning of year(7,999)3,494 3,5353,611 (37,132)(34,491)
Prior period adjustment(119)(41)19-66(75)
Transfer to income statement177243(686)58394186
Amounts relating to business
combinations-855-(166) (76)
Adjustment for cash flow hedge reserve---(1,139)-(1,139)
Exchange rate movement- 531(20)(11)
Balance at end of year(7,941)3,786 2,876 2,531 (36,858)(35,606)
Note 14. Deferred liability
The movement in deferred tax assets and liabilities during the year, without taking into consideration the offsetting of balances within the
same jurisdiction, is as follows:

Financial statements
Freightways Limited and its subsidiaries
70
Notes to the financial statements
For the year ended 30 June 2018
2018
$000
2017
$000
Within one year27,16324,935
After one year but not more than five years71,42563,520
After five years37,71028,667
136,298117,122
The leases have varying terms, escalation clauses and renewal rights. Upon renewal, the terms of the leases are renegotiated.
Group
2018
$000
2017
$000
Current
Trade creditors37,07437,050
Employee entitlements15,99516,210
Other creditors and accruals12,72912,462
Acquisition earn-out payables1,089-
66,88765,722
Non-current
Acquisition earn-out payables2,0241,786
Other non-current payables1,4221,081
3,4462,867
Note 16. Leases
Operating lease commitments (non-cancellable)
Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases.
Payments made under operating leases (net of any incentives received from the lessor) are charged to the income statement on a
straight-line basis over the period of the lease.
The Group leases certain premises, motor vehicles and plant and equipment, and as a result has the following operating lease commitments:
Note 15. Trade and other payables
Trade and other payables are recognised when the Group becomes obligated to make future payments resulting from the purchase of goods
or services. They are initially recognised at fair value and subsequently measured at amortised cost using the effective interest rate method.
The amounts are unsecured.
Note 17. Provisions
A provision is recognised when the Group has a present legal or constructive obligation as a result of a past event, and it is probable
that an outflow of economic benefits will be required to settle the obligation and a reliable estimate of the obligation can be made. If the
effect is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market
assessments of the time value of money and, where appropriate, the risks specific to the liability. The increase in the provision due only to
the passage of time is recognised as an interest expense.

Financial statements
Freightways Limited and its subsidiariesAnnual Report 2018
71
Notes to the financial statements
For the year ended 30 June 2018
Customer
Claims
$000
Long Service
Leave
$000
Lease
Obligations
$000
Total
$000
2018
Balance at beginning of year5052,4551,7394,699
Current year provision 47472127646
Amounts relating to business combinations-78109187
Expenses incurred
-(377) - (377)
Movement in exchange rate-88 (68) 20
Balance at end of year5522,7161,9075,175
2018
$000
2017
$000
Analysis of total provisions
Current7101,008
Non-current4,465 3,691
Total5,1754,699
Customer
Claims
$000
Long Service
Leave
$000
Lease
Obligations
$000
Total
$000
2017
Balance at beginning of year6132,089
1,448
4,150
Current year provision (83)512
660
1,089
Amounts relating to business combinations-116
16
132
Expenses incurred(25)(235)
(384)
(644)
Movement in exchange rate-(27) (1) (28)
Balance at end of year5052,4551,7394,699
Explanation of provisions
Provision for customer claims relates to actual claims received from customers that are being considered for payment as at reporting
date and are expected to be resolved within the next two months.
Provision for long service leave relates to the potential leave obligation for employees who reach continuous employment milestones
required under Australian regulations. Consideration is given to expected future wage and salary levels, experience of employee
departures and periods of service.
Provision for lease obligations relates to estimated payments to reinstate leased buildings and equipment used to an appropriate
condition upon the expiry of the respective lease terms.

Financial statements
Freightways Limited and its subsidiaries
72
Notes to the financial statements
For the year ended 30 June 2018
Group
2018
$000
2017
$000
Non-current
Bank borrowings161,800166,241
(a) Security for borrowings
The bank borrowings are secured by a charge over the assets of the majority of the Company’s New Zealand subsidiaries in
favour of its primary lenders and guarantees from the Company’s primary Australian subsidiaries. As at 30 June 2018, the carrying
amount of the assets pledged as security is $207 million (2017: $198 million).
(b) Finance facilities
The following finance facilities existed at the reporting date:
Facilities denominated in
New Zealand Dollars
Facilities denominated in
Australian Dollars
2018
$000
2017
$000
2018
$000
2017
$000
Bank overdraft
Total bank overdraft facility available8,0008,000--
Amount of overdraft facility unused
8,0008,000-
-
Loan facilities
Total loan facilities available103,500110,00097,00097,000
Maturing 1 September 2018-37,000-27,500
Maturing 1 September 201937,00037,00035,00035,000
Maturing 1 September 202026,00026,00024,50024,500
Maturing 1 September 202130,500-27,500-
Maturing 15 December 202610,00010,00010,00010,000
Amount of loan facilities used74,00078,00080,60083,900
Amount of loan facilities unused29,50032,00016,40013,100
Effective interest rate at 30 June as
amended for interest rate hedges6.31%6.15%5.02%5.12%
Note 19. Borrowings
Interest-bearing bank loans and overdrafts are initially recognised at fair value and subsequently measured at amortised cost using the
effective interest rate method. Costs incurred in establishing finance facilities are amortised to the income statement over the term of
the respective facilities.
Note 18. Unearned income
An unearned income liability is recorded in the balance sheet reflecting the future service obligation for products that have been sold in
advance of their use.

Financial statements
Freightways Limited and its subsidiariesAnnual Report 2018
73
Notes to the financial statements
For the year ended 30 June 2018
Group
2018
Ordinary
shares
2017
Ordinary
shares
2018
$000
2017
$000
Balance at beginning of year154,933,678154,757,589124,430123,852
Partly-paid ordinary shares issued--11
Partly-paid shares, fully paid up to ordinary shares102,721127,534521532
Employee share-based payment--(218)(271)
Shares issued for employee share plan75,00050,000529307
(Increase) decrease in employee share plan unallocated shares489(1,445)(3)9
Balance at end of year
155,111,888154,933,678125,260124,430
The fair values of borrowings are not materially different to their carrying amount, since the interest payable on those borrowings is either close
to market rate or the borrowings are of a short term nature.
During July 2017, the Group negotiated a three-year extension of its syndicated bank facilities that were maturing on 1 September 2018 and
reduced the New Zealand dollars facility by $6.5 million. The extended facilities became effective from 14 July 2017.
In December 2016, a US$125 million uncommitted finance facility was established with a US-based lender on the same terms as those that are
in place with the existing banking syndicate. Of this facility, the US dollar equivalent of NZ$10 million and A$10 million has been drawn as at 30
June 2018.
The Group was in compliance with all of its banking covenants throughout the year ended 30 June 2018.
Net debt reconciliation
An analysis of net debt and the movements in net debt is:
Liabilities from financing activities
Cash
$000
Other
borrowings
due within
1 year
$000
Other
borrowing
due after
1 year
$000
Bank
borrowings
due with
1 year
$000
Bank
borrowing
due after
1 year
$000
Total
$000
Balance at 1 July 20167,065(79)(32) - (158,801)(151,847)
Cashflow1,397174--(7,174)(5,603)
Acquisitions – finance leases-(242)(172)--(414)
Exchange rate movement(39) ---(266)(305)
Balance at 30 June 20178,423(147) (204)- (166,241)(158,169)
Cashflow(1,456)114--7,5226,180
Acquisitions – finance leases-(93)(82)-- (175)
Exchange rate movement443 ---3,0813,524
Balance at 30 June 20187,410(126) (286) - (155,638)(148,640)
Note 20. Equity
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares are shown in equity as a reduction
in the amount of proceeds arising from the issue of shares.

Financial statements
Freightways Limited and its subsidiaries
74
Notes to the financial statements
For the year ended 30 June 2018
Contributed Equity
(i) Fully paid ordinary shares
As at 30 June 2018 there were 155,115,946 shares issued and fully paid (2017: 154,938,225). All fully paid ordinary shares have equal
voting rights and share equally in dividends and surplus on winding up.
(ii) Partly-paid ordinary shares
On 13 September 2017, 96,018 partly-paid shares were issued to certain senior executives under the rules of the Freightways Senior
Executive Performance Share Plan (2017: 103,682). The issue price per share was $7.83 (2017: $6.82) and the shares have been paid
up by the relevant participants to one cent per share. The balance of the issue price per share may only be paid up upon the participants
meeting agreed performance hurdles and upon the expiry of the applicable three-year escrow period in accordance with the Plan rules
(refer Note 21). During the year, 15,790 partly-paid shares were redeemed and cancelled (2017: 17,863). As at 30 June 2018 there were
319,513 partly-paid shares on issue, paid up to one cent per share (2017: 342,006). Partly-paid shares have no voting rights and no rights
to dividends and surplus on winding up.
(iii) Partly-paid shares, fully paid up to ordinary shares
On 13 September 2017, 102,721 (2017: 127,534) partly-paid shares were fully paid-up by certain Freightways senior executives upon the
achievement of agreed performance targets in accordance with the terms of the original issue of the relevant partly-paid shares under the
Freightways Senior Executive Performance Share Plan. The average issue price per share was $5.07 (2017: $4.17).
(iv) Employee Share Plan
On 13 September 2017, the Company issued 75,000 fully paid ordinary shares at $7.05 each to Freightways Trustee Company Limited, as
Trustee for the Freightways Employee Share Plan (September 2016: 50,000 fully paid ordinary shares at $6.13 each). In total, participating
employees were provided with interest-free loans of $0.5 million to fund their purchase of the shares in the Share Plan (September 2016:
$0.3 million). The loans are repayable over three years and repayment commenced in October 2017.
As at 30 June 2018 the Trustee held 486,672 (2017: 496,143) fully paid ordinary shares (representing 0.3% (2017: 0.3%) of all issued
ordinary shares) of which 4,058 (2017: 4,547) were unallocated. These shares are held for allocation in the future.
The Employee Share Plan operates in accordance with section DC13 of the New Zealand Income Tax Act 2007 and the Trustees are
appointed by the Freightways Limited Board of Directors.
Nature and Purpose of Reserves
(i) Cash flow hedge reserve
The cash flow hedge reserve is used to record gains or losses on a hedging instrument within a cash flow hedge. The amounts are
recognised in the income statement when the associated hedged transactions affect profit or loss, as described in Note 1(g).
(ii) Foreign currency translation reserve
The foreign currency translation reserve comprises all foreign exchange differences arising from the translation of the financial
statements of foreign operations into New Zealand dollars, as described in Note 1(c).
Note 21. Share based payments
Freightways Senior Executive Performance Share Plan (the ‘Plan’).
In September 2008, the Board approved the introduction of a long-term incentive scheme for certain Freightways senior executives using
a performance share plan. The Plan aligns senior executives’ long-term objectives with the interests of Freightways Limited shareholders.
Payment of any benefit is dependent upon the achievement of agreed performance targets. Partly-paid shares (paid up to one cent per
share) are issued at the discretion of the Board, subject to a three-year escrow period. At the end of each escrow period the Group will
pay a bonus to the senior executives to the extent the performance targets have been achieved, sufficient for the shares to be fully paid
up. In the event that the performance targets have not been achieved at the expiry of the escrow period, the partly-paid shares may be
redeemed by the Company.
Allocations are made annually in September each year. The terms for these allocations, including the relevant performance hurdles,
are determined by the Board of Directors at the time of each allocation.

Financial statements
Freightways Limited and its subsidiariesAnnual Report 2018
75
Notes to the financial statements
For the year ended 30 June 2018
Total number of partly-paid shares on issue:2018
2017
Balance at beginning of the year342,006383,721
Issued during the year96,018103,682
Cancelled during the year(15,790)(17,863)
Fully paid-up during the year(102,721)(127,534)
Balance at end of the year319,513342,006
Partly-paid shares eligible to be paid up at end of year107,491Nil
Details of outstanding allocations are as follows:
Share allocation date:
10 Sep
2012
11 Sep
2013
10 Sep
2014
14 Sep
2015
12 Sep
2016
12 Sep
2017
Number of partly-paid shares allocated155,832148,386124,221121,691103,68296,018
Market price per share at date of allocation$3.97$4.12$5.11$5.39$6.82$7.83
Amount paid up per share upon allocation$0.01$0.01$0.01$0.01$0.01$0.01
Total amount paid-up upon allocation$1,558$1,484$1,242$1,217$1,037$960
Total amount paid-up upon vesting:
· Year ended 30 June 2016$547,973-----
· Year ended 30 June 2017$8,914$483,225$38,005---
· Year ended 30 June 2018$1,192$30,213$475,193-$12,898-
Escrow periods ended 30 June:2015
(100%)
2016
(100%)
2017
(100%)
2018
(100%)
2019
(100%)
2020
(100%)
2018
$000
2017
$000
Total amount expensed during the year for the senior executive
performance share plan
814750
Liability recognised at year end for estimated income tax applicable to bonuses
payable to facilitate the paying-up of vested partly-paid shares739521
The fair value of the Plan was estimated as at the date of each allocation of partly-paid shares using both the binomial option pricing
model and monte carlo simulation and taking into account the terms and conditions upon which the partly-paid shares were issued.

Financial statements
Freightways Limited and its subsidiaries
76
Notes to the financial statements
For the year ended 30 June 2018
Group
Note
2018
$000
2017
$000
Profit for the year62,16160,856
Add non-cash items
Depreciation and amortisation315,95413,331
Movement in provision for doubtful debts(26) 23
Movement in deferred income tax1,0591,027
Net (gain) loss on disposal of property, plant and equipment (994)229
Net foreign exchange loss318
Movement in derivative fair value(52)208
Impairment of property, plant and equipment1,978-
Non-recurring items(1,540) (5,630)
Movement in working capital, net of effects of acquisitions of businesses
Increase in trade and other receivables(7,150) (10,479)
Decrease in inventories 598 61
Increase in trade and other payables849 9,130
Increase (decrease) in income taxes payable2,870(3,517)
Net cash inflows from operating activities75,71065,257
Note 22. Reconciliation of profit for the year with cash flows from operating activities
Note 23. Capital commitments and contingent liabilities
The Group had made capital commitments to purchase or construct buildings and equipment for $3.8 million at 30 June 2018
(2017: $2.7 million), principally relating to the completion of operating facilities throughout the Group.
As at 30 June 2018, the Group had outstanding letters of credit and bank guarantees issued by its lenders totalling approximately
$6.1 million (2017: $5.9 million). The letters of credit relate predominantly to support for regular payroll payments. The bank guarantees
relate to security given to various landlords in respect of leased operating facilities.
Group
2018
2017
Profit for the year attributable to shareholders ($000)62,16160,856
Weighted average number of ordinary shares (‘000)155,080154,903
Basic earnings per share (cents)40.139.3
Note 24. Earnings per share*
Basic earnings per share
Basic earnings per share is calculated by dividing the profit for the year attributable to shareholders by the weighted average number of ordinary
shares outstanding during the year:

Financial statements
Freightways Limited and its subsidiariesAnnual Report 2018
77
Notes to the financial statements
For the year ended 30 June 2018
Group
2018
2017
Profit for the year attributable to shareholders ($000)62,16160,856
Weighted average number of ordinary shares (‘000)155,080154,903
Effect of dilution319342
Diluted weighted average number of ordinary shares (‘000)155,399155,245
Diluted earnings per share (cents)40.039.2
* Basic and diluted earnings per share calculated on the profit for the year attributable to shareholders, excluding non-recurring items,
net of tax (refer Note 3), are both 38.4 cents (2017: both 36.5 cents).
Diluted earnings per share
Diluted earnings per share is calculated by dividing the profit for the year attributable to shareholders by the weighted average number of
ordinary shares outstanding during the year, adjusted to include all dilutive potential ordinary shares (for example, partly-paid shares on
issue) as if they had been converted to ordinary shares at the beginning of the year:
Note 25. Net tangible assets per security
Net tangible assets (liabilities) per security at 30 June 2018 was ($0.55) (2017: ($0.61)).
Group
2018
$000
2017
$000
Short term employee benefits 8,1736,846
Long term employee benefits--
Post-employment benefits--
Termination benefits--
Share-based payments (Note 21)814521
Note 26. Transactions with related parties
Trading with related parties
The Group has not entered into any material external related party transactions which require disclosure. The Group does trade, on normal
commercial terms, with certain companies in which there are common directorships. These counterparties include Spark New Zealand Limited,
ANZ Bank New Zealand Limited and Contact Energy Limited.
Payments to associate
During the year, the Group paid Parcelair Limited $10.5 million for the provision of airfreight linehaul services on normal commercial terms.
Parcelair Limited is incorporated in New Zealand and is half-owned by the Group.
Key management compensation
Compensation paid during the year (or payable as at year end in respect of the year) to key management, which includes senior executives
of the Group and non-executive independent directors, is as follows:

Financial statements
Freightways Limited and its subsidiaries
78
Notes to the financial statements
For the year ended 30 June 2018
Group ($000)
Less
than 6
months
6-12
months
1-2
years
2-5
years
More
than
5 years
Total
2018
Bank borrowings3,278 3,338 60,389 107,513 24,731199,249
Trade and other payables55,918 13,603 178 2,396 57772,672
Finance lease liabilities686825323-412
Derivative financial instruments – interest rate swaps*1,2841,2231,8401,515385,900
2017
Bank borrowings3,043 3,192 72,496 100,369 25,428204,528
Trade and other payables54,262 8,154 - 1,786 -64,202
Finance lease liabilities7575 108 93-351
Derivative financial instruments – interest rate swaps*1,6751,5262,2322,29027,725
* The amounts expected to be payable in relation to the interest rate swaps have been estimated using forward interest rates
applicable at the reporting date.
Note 27. Financial risk management
27.1 Financial risk factors
The Group’s activities expose it to various financial risks, including liquidity risk, credit risk and market risk (which includes currency risk
and cash flow interest rate risk). The Group’s overall risk management programme focuses on the uncertainty of financial markets and
seeks to minimise potential adverse effects on the Group’s financial performance. The Group uses derivative financial instruments to
hedge certain risk exposures.
Treasury activities are performed centrally by the Group’s corporate team, supplemented by external financial advice and the use of derivative
financial instruments is governed by a Group Treasury Policy approved by the Company’s Board of Directors.
The Group does not engage in speculative transactions or hold derivative financial instruments for trading purposes.
(a) Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as and when they fall due. The Group’s approach
to liquidity risk management includes maintaining sufficient cash reserves and ensuring adequate committed finance facilities are available.
In assessing its exposure to liquidity risk, the Group regularly monitors rolling 3, 6 and 12 months cash requirement forecasts.
The following table analyses the Group’s financial liabilities into relevant maturity groupings, based on the remaining period from the reporting
date to the contractual maturity date.
The amounts disclosed below are contractual, undiscounted cash flows, except for interest rate swaps.

Financial statements
Freightways Limited and its subsidiariesAnnual Report 2018
79
Notes to the financial statements
For the year ended 30 June 2018
Group
2018
$000
2017
$000
Cash and cash equivalents
7,410
8,423
Trade and other receivables74,04870,483
81,45878,906
Cash and cash equivalents are held with banks with Standard & Poor’s rating of AA-.
Trade receivables analysis
At 30 June aging analysis of trade receivables is as follows:
Group
2018
$000
2017
$000
Current59,04956,169
31-60 days over standard terms8,4247,327
60-90 days over standard terms1,5331,137
91+ days over standard terms1,9882,616
70,99467,249
The Group has $10.3 million (2017: $9.4 million) of financial assets that are overdue and not impaired.
(b) Credit risk
Credit risk refers to the risk of a counterparty failing to discharge its obligation. Financial instruments which potentially subject the Group to
credit risk principally consist of bank balances, accounts receivable and derivative financial instruments.
The Group has credit policies that are used to manage the exposure to credit risk. As part of these policies, exposures with counterparties are
monitored on a regular basis. The Group performs credit evaluations on all customers requiring credit and generally does not require collateral.
The Group’s Treasury Policy ensures due consideration is given to the financial standing of the counterparty banks with which the Group holds
cash reserves and transacts derivative financial instruments. A minimum Standard & Poor’s long-term credit rating of A+ is required to qualify
as an approved counterparty. The quantum of transactions entered into with the Group’s various financial lenders is also balanced to mitigate
exposure to concentrated counterparty credit risk with any one financial provider.
The Group does not have any significant concentrations of credit risk.
For counterparties to trade receivables that are neither past due nor impaired, payments have historically been received regularly and on time.
The Group considers its maximum exposure to credit risk to be as follows:

Financial statements
Freightways Limited and its subsidiaries
80
Notes to the financial statements
For the year ended 30 June 2018
(c) Market risk
Foreign exchange risk
Exposure to foreign exchange risk arises when (i) a transaction is denominated in a foreign currency and any movement in foreign exchange rates
will affect the value of that transaction when translated into the functional currency of the Company or a subsidiary; and (ii) the value of assets and
liabilities of overseas subsidiaries are required to be translated into the Group’s reporting currency.
The Group’s Treasury Policy is used to assist in managing foreign exchange risk. In accordance with Treasury Policy guidelines, foreign
exchange hedging is used as soon as a defined exposure to foreign exchange risk arises and exceeds certain thresholds.
As disclosed in Note 19, at 30 June 2018 the Group had Australian dollar denominated bank borrowings of AUD80,600,000 (2017:
AUD83,900,000). Of these borrowings, AUD14,200,000 (2017: AUD14,200,000) were borrowed by a New Zealand subsidiary and have
been translated at the prevailing foreign currency rate as at balance date. The rest of the Australian dollar denominated bank borrowings
have been borrowed by an Australian subsidiary and are translated as part of the consolidation of the Group for reporting purposes. The
Group has no other outstanding foreign currency denominated monetary items.
The table on the following page details the Group’s sensitivity to the increase and decrease in the New Zealand dollar (NZD) against the
Australian dollar (AUD) in respect of the Australian dollar denominated bank borrowings, borrowed in New Zealand. The sensitivity analysis
only includes outstanding foreign currency denominated monetary items at the reporting date and adjusts their translation as at that date
for the change in foreign currency rates. A positive number indicates a decrease in liabilities (bank borrowings) where the NZD strengthens
against the AUD.
Interest rate risk
Exposure to cash flow interest rate risk arises in borrowings of the Group that are at the prevailing market interest rate current at the time
of drawdown and are re-priced at intervals not exceeding 180 days.
Interest rate risk is identified by forecasting short and long-term cash flow requirements.
The Group’s Treasury Policy is used to assist in managing interest rate risk. Treasury Policy requires projected annual core debt to be
effectively hedged within interest rate risk control limits against adverse fluctuations in market interest rates.
The following table demonstrates the sensitivity of the Group’s equity and profit after tax to a potential change in interest rates by plus or
minus 100 basis points, with all other variables held constant and in relation only to that portion of the Group’s borrowings that are subject to
floating interest rates.
Significant assumptions used in the interest rate sensitivity analysis include:
(i) reasonably possible movements in interest rates were determined based on the Group’s current mix of debt in New Zealand and Australia,
the level of debt that is expected to be renewed and a review of the last two year’s historical movements; and
(ii) price sensitivity of derivatives has been based on a reasonably possible movement of interest rates at balance dates by applying
the change as a parallel shift in the forward curve.