Spark New Zealand H1 FY19 Results

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

JUSTINE GUNN
Acting Company Secretary

Client Market Services
NZX Limited
Level 1, NZX Centre
11 Cable Street
Wellington 6011

ASX Market Announcements
Australian Securities Exchange
4th Floor, 20 Bridge Street
Sydney NSW 2000
Australia


20 February 2019

SPARK NEW ZEALAND LIMITED H1 FY19 RESULTS

Dear Sir/Madam

In accordance with the NZX Listing Rules, I enclose the following for release to the
market in relation to Spark New Zealand Limited’s H1 FY19 results:

1. Results Announcement
2. Interim Financial Statements
3. Distribution Notice x 2
4. Media Release
5. Investor presentation
6. Detailed financial information

Spark New Zealand’s Managing Director, Simon Moutter, and Chief Financial Officer,
David Chalmers, will discuss the H1 FY19 Results at 10:00am New Zealand time today.

ASX Appendix 3A.1 will follow this release.


Yours sincerely



Justine Gunn
Acting Company Secretary

Template
Results announcement
(for Equity Security issuer/Equity and Debt Security issuer)

Results for announcement to the market
Name of issuer Spark New Zealand Limited
Reporting Period 6 months to 31 December 2018
Previous Reporting Period 6 months to 31 December 2017
Amount (000s) Percentage change
Revenue from ordinary
activities
NZ$1,754,000 (0.4%)
Profit (loss) from ordinary
activities after tax
attributable to security
holder
NZ$153,000 (10.5%)
Net profit (loss) attributable
to security holders
NZ$153,000 (5.6%)
Interim/Final Dividend
Amount per Quoted Equity
Security
NZ$0.125 (comprised of an ordinary dividend of NZ$0.11 and a
special dividend of NZ$0.015)
Imputed amount per
Quoted Equity Security
NZ$0.036458 (comprised of NZ$0.032083 in relation to the
ordinary dividend and NZ$0.004375 in relation to the special
dividend)
Record Date 15 March 2019
Dividend Payment Date 5 April 2019
Net tangible assets per
Quoted Equity Security
As at 31 December 2018:
NZ$0.26
As at 31 December 2017:
NZ$0.29
A brief explanation of any
of the figures above
necessary to enable the
figures to be understood
Profit (loss) from ordinary activities after tax attributable to security
holder reflects the impact of NZ$9 million costs of change
associated with the Quantum programme in H1 FY18. This is a
non-GAAP measure. Changes in Spark’s reported and adjusted
earnings before finance expense and income, net investment
income, income tax, depreciation and amortisation (EBITDAI) are
provided in the addendum.
Movements from the prior period are compared to restated
amounts for H1 FY18 following the adoption of NZ IFRS 15 and NZ
IFRS 16 in the current period.
Authority for this announcement
Name of person

authorised
to make this announcement
Justine Gunn, Acting Company Secretary
Contact phone number +64 9 373 6919
Contact email address Company.Secretary@spark.co.nz
Date of release through
MAP

20 February 2019

Unaudited financial statements accompany this announcement.

Addendum:

Amount (000s) Percentage
change
Reported earnings before finance expense and income,
net investment income, income tax, depreciation and
amortisation (Reported EBITDAI)
NZ$489,000 7.2%
Adjusted earnings before finance expense and income, net
investment income, income tax, depreciation and
amortisation (Adjusted EBITDAI)
NZ$489,000 4.3%

Adjusted earnings before finance expense and income, net investment income, income tax,
depreciation and amortisation reflects the impact of NZ$13 million costs of change associated
with the Quantum programme in H1 FY18. This is a non-GAAP measure.

INTERIM FINANCIAL STATEMENTS
for the six months ended 31 December 2018

INTERIM
FINANCIAL
STATEMENTS
For the six months ended 31 December 2018
Interim financial statements03
Notes to the interim financial statements07
Independent review report25
These interim financial statements do not
include all the notes and information normally
included in the annual financial statements.
Accordingly, they should be read in conjunction
with the annual financial statements for the year
ended 30 June 2018.
Page 02
Spark New ZealandInterim financial statements

Statement of profit or loss and other comprehensive income
FOR THE SIX MONTHS ENDED 31 DECEMBER
RESTATED
20182017
UNAUDITEDUNAUDITED
NOTE
$M$M
Operating revenues 1,754 1,761
Operating expenses (1,265) (1,305)
Earnings before finance expense and income, net investment
income, income tax, depreciation and amortisation 489 456
Depreciation and amortisation (245) (237)
Net investment income– 27
Finance income 18 16
Finance expense (40) (37)
Net earnings before income tax4 222 225
Income tax expense (69) (63)
Net earnings for the period 153 162
Other comprehensive income
Items that will not be reclassified to profit or loss:
Revaluation of long-term investments designated at fair value
through other comprehensive income 87 7
Items that may be reclassified to profit or loss:
Translation of foreign operations––
Cash flow hedges net of tax (18) (5)
Other comprehensive income for the period 69 2
Total comprehensive income for the period 222 164
Earnings per share
Basic and diluted earnings per share (cents) 8.3 8.8
Weighted average ordinary shares (millions) 1,836 1,834
Weighted average ordinary shares and options (millions) 1,836 1,835
See accompanying notes to the interim financial statements.
Page 03
Spark New ZealandInterim financial statements

RESTATED
AS AT
31 DECEMBER
AS AT
30 JUNE
20182018
UNAUDITEDAUDITED
NOTES
$M$M
Current assets
Cash 110 55
Short-term receivables and prepayments 695 666
Short-term derivative assets 2 6
Inventories 111 79
Taxation recoverable– 19
Total current assets 918 825
Non-current assets
Long-term receivables and prepayments 270 258
Long-term derivative assets 10 10
Long-term investments7 185 98
Right-of-use assets 615 627
Leased customer equipment assets 32 31
Property, plant and equipment 1,030 1,039
Intangible assets 1,007 956
Total non-current assets 3,149 3,019
Total assets 4,067 3,844
Current liabilities
Short-term payables, accruals and provisions 490 481
Taxation payable 14 3
Short-term derivative liabilities 1 –
Short-term lease liabilities 27 26
Debt due within one year6 448 249
Total current liabilities 980 759
Non-current liabilities
Long-term payables, accruals and provisions 59 34
Long-term derivative liabilities 88 63
Long-term lease liabilities 436 448
Long-term debt6 930 948
Deferred tax liabilities 98 109
Total non-current liabilities 1,611 1,602
Total liabilities 2,591 2,361
Equity
Share capital 942 941
Reserves (369) (437)
Retained earnings 903 979
Total equity 1,476 1,483
Total liabilities and equity 4,067 3,844
See accompanying notes to the interim financial statements.
On behalf of the Board
Justine Smyth, Chair Simon Moutter, Managing Director
Authorised for issue on 20 February 2019
Statement of financial position
Page 04
Spark New ZealandInterim financial statements

Statement of changes in equity
SIX MONTHS ENDED
31 DECEMBER 2018
SHARE
CAPITAL
RETAINED
EARNINGS
HEDGE
RESERVE
SHARE-

BASED
COMPEN-
SATION

RESERVE
RE-

VALUATION
RESERVE
FOREIGN
CURRENCY
TRANS-

LATION
RESERVETOTAL
UNAUDITED$M$M$M$M$M$M$M
Balance at 1 July 2018 941 979 (26) 2 (390) (23) 1,483
Net earnings for the period – 153 – – – – 153
Other comprehensive income/(loss) – – (18) – 87 – 69
Total comprehensive income/(loss)
for the period – 153 (18) – 87 – 222
Contributions by, and distributions
to, owners:
Dividends – (229) – – – – (229)
Supplementary dividends – (21) – – – – (21)
Tax credit on supplementary
dividends – 21 – – – – 21
Issuance of shares under share
schemes 1 – – (1) – – –
Total transactions with owners 1 (229) – (1) – – (229)
Balance at 31 December 2018 942 903 (44) 1 (303) (23) 1,476
RESTATED
SIX MONTHS ENDED
31 DECEMBER 2017
SHARE
CAPITAL
RETAINED
EARNINGS
HEDGE
RESERVE
SHARE-
BASED
COMPEN-
SATION
RESERVE
RE-
VALUATION
RESERVE
FOREIGN
CURRENCY
TRANS-
LATION
RESERVETOTAL
UNAUDITED$M$M$M$M$M$M$M
Balance at 30 June 2017 935 1,122 (20) 5 (368) (23) 1,651
Adjustment on adoption of
NZ IFRS 9 (net of tax) – (12) – – – – (12)
Adjustment on adoption of
NZ IFRS 15 (net of tax) – 18 – – – – 18
Adjustment on adoption of
NZ IFRS 16 (net of tax) – (56) – – – – (56)
Balance at 1 July 2017 935 1,072 (20) 5 (368) (23) 1,601
Net earnings for the period – 162 – – – – 162
Other comprehensive income – – (5) – 7 – 2
Total comprehensive income
for the period – 162 (5) – 7 – 164
Contributions by, and distributions
to, owners:
Dividends – (229) – – – – (229)
Supplementary dividends – (29) – – – – (29)
Tax credit on supplementary
dividends – 29 – – – – 29
Issuance of shares under share
schemes 5 – – (3) – – 2
Total transactions with owners 5 (229) – (3) – – (227)
Balance at 31 December 2017 940 1,005 (25) 2 (361) (23) 1,538
Page 05
Spark New ZealandInterim financial statements

Statement of cash flows
FOR THE SIX MONTHS ENDED 31 DECEMBER
RESTATED
20182017
UNAUDITEDUNAUDITED
NOTE
$M$M
Cash flows from operating activities
Cash received from customers 1,770 1,769
Interest receipts 18 15
Dividend receipts– 7
Payments to suppliers and employees (1,314) (1,266)
Payments for income tax (44) (70)
Payments for interest on debt (22) (14)
Payments for interest on leases (13) (14)
Payments for interest on leased customer equipment assets (2) (1)
Net cash flows from operating activities8 393 426
Cash flows from investing activities
Payments for purchase of businesses– (46)
Payments for, and advances to, long-term investments (6) (6)
Payments for purchase of property, plant and equipment and
intangibles (258) (236)
Payments for capitalised interest (3) (4)
Net cash flows from investing activities (267) (292)
Cash flows from financing activities
Net proceeds from debt 182 184
Payments for dividends (229) (229)
Payments for leases (17) (17)
Payments for leased customer equipment assets (8) (8)
Receipts from finance leases 1 1
Net cash flows from financing activities (71) (69)
Net cash flow 55 65
Opening cash position 55 52
Closing cash position 110 117
See accompanying notes to the interim financial statements.
Page 06
Spark New ZealandInterim financial statements

Notes to the interim financial statements
NOTE 1 About this report
Reporting entity
These unaudited interim financial statements
are for Spark New Zealand Limited (the
‘Company’) and its subsidiaries (together
‘Spark’ or ‘the ‘Group’) for the six months
ended 31 December 2018.
The Company is incorporated and domiciled in
New Zealand, registered under the Companies
Act 1993 and is an FMC reporting entity under
the Financial Markets Conduct Act 2013. The
Company is listed on the New Zealand Main
Board equity security market and the Australian
Securities Exchange.
Basis of preparation
The interim financial statements have been
prepared in accordance with the New Zealand
equivalent to International Accounting Standard
34: Interim Financial Reporting and International
Accounting Standard 34: Interim Financial
Reporting.
Except as amended by the adoption of NZ IFRS
15 Contracts with customers and NZ IFRS 16
Leases, the accounting policies adopted are
consistent with those followed in the
preparation of Spark’s annual financial
statements for the year ended 30 June 2018.
The preparation of the interim financial
statements requires management to make
judgements, estimates and assumptions.
Spark has been consistent in applying the
judgements, estimates and assumptions
adopted in the annual financial statements for
the year ended 30 June 2018 and critical
accounting policies are the same as those set
out in the annual financial statements for the
year ended 30 June 2018, except as amended
by the adoption of NZ IFRS 15 and NZ IFRS 16
described below.
Financial instruments are either carried at
amortised cost, less any provision for
impairment, or fair value. The only significant
variances between instruments held at
amortised cost and their fair value relates to
long-term debt. There were no changes in
valuation techniques during the period. Spark’s
derivatives are classified as being within level 2
of the fair value hierarchy. The fair value of
interest rate swaps is calculated as the present
value of the estimated future cash flows based
on observable yield curves. The fair value of
forward foreign exchange contracts is
determined using forward exchange rates at
the period end date, with the resulting value
discounted back to present value.
At 31 December 2018, capital expenditure
amounting to $161 million (31 December 2017:
$134 million) had been committed under
contractual arrangements.
Adoption of NZ IFRS 15 Revenue from
contracts with customers (NZ IFRS 15) and
NZ IFRS 16 Leases (NZ IFRS 16)
Spark has adopted NZ IFRS 15 and NZ IFRS 16
using the fully retrospective method and
amounts presented for the comparative period
within the interim financial statements have
therefore been restated. The impact of the
adoption of these standards on the comparative
statement of profit or loss, statement of cash
flows and the opening statement of financial
position as at 1 July 2017 is provided in note 3.
Further details on the adoption of NZ IFRS 15
and NZ IFRS 16 and the impact on Spark’s
performance and position are provided in notes
10 and 11. Spark has also provided additional
information on the adoption of these standards,
together with restated results for each half of
FY18 and estimated impacts for FY17, in a
market release available on the investor section
of our website at: investors.sparknz.co.nz/
investor-centre.
Changes in key estimates and assumptions
In adopting and applying NZ IFRS 15 and
determining the accounting impacts (as
described in note 10), the following new key
estimates and assumptions are required:
• Spark regularly enters into contracts which
contain extension periods, where either
the customer or both parties can choose to
extend the contract or there is an automatic
annual renewal, and/or termination clauses
that could impact the actual duration of the
contract. Judgement is applied to assess
the impact that these clauses have when
determining the appropriate contract term.
The term of the contract impacts both the
period over which revenue from performance
obligations may be recognised and the
period over which contract fulfilment costs
are deferred.
Page 07
Spark New ZealandInterim financial statements

Notes to the interim financial statements
• Determining the standalone selling price for
allocating revenue between performance
obligations where contracts contain multiple
performance obligations requires judgement.
These may be regulated prices, list prices, a
cost-plus derived price, the price of similar
products when sold on a stand-alone basis by
Spark or a competitor, or in some cases the
contract price where the price contracted
represents a bespoke price that would be
the same for a similar customer in a
similar circumstance.
• Judgements relating to the reporting of
revenue and costs on a gross or net basis.
Whether Spark is considered to be the
principal or an agent in the transaction
depends on analysis by management of
NOTE 1 About this report (continued)
both the legal form and substance of the
agreement between Spark and its business
partners and such judgements impact the
amount of reported revenue and operating
expenses but do not impact reported
net earnings.
In adopting and applying NZ IFRS 16 and
determining the accounting impacts (as
described in note 11), several key estimates and
assumptions were required. These include
determining the lease term (which can be
complex where leases include rights of renewal
or cancellation), the discount rate applicable
to each lease and the lease payments, which
may not be fixed and may vary depending on
an index.
NOTE 2 Significant transactions and events for the current period
The following significant transactions and events
affected the financial performance and financial
position of Spark for the six month period to
31 December 2018:
Debt programme
• On 7 September 2018 Spark issued $125
million of unsecured, unsubordinated fixed
rate bonds with a coupon rate of 3.37%,
maturing on 7 March 2024.
• On 31 October 2018 Spark established a
new $100 million committed revolving
facility with The Hongkong and Shanghai
Banking Corporation Limited, to mature
on 30 November 2021.
Capital expenditure
• Spark’s additions to property, plant and
equipment and intangible assets were
$264 million, details of which are available
in a separate detailed financials file on
the investor section of our website at:
investors.sparknz.co.nz/investor-centre.
Dividends
• Dividends paid during the six month period
ended 31 December 2018 in relation to the
H2 FY18 second-half dividend (ordinary
dividend of 11 cents per share and special
dividend of 1.5 cents per share) totalled
$229 million or 12.5 cents per share.
Dividends paid during the prior six month
period ended 31 December 2017 totalled
$229 million or 12.5 cents per share.
Long-term investments
• Following the announcement in August 2017
of the intention for Vodafone Hutchison
Australia Pty Limited and TPG Telecom
Limited to merge, the quoted price of Spark’s
investment in Hutchison Telecommunications
Australia Limited (a shareholder of Vodafone
Hutchison Australia Pty Limited) increased
materially. As at 31 December 2018, the fair
value of Spark’s investment was $156 million
and the increase of $87 million during the
period has been recognised within other
comprehensive income.
Page 08
Spark New ZealandInterim financial statements

Notes to the interim financial statements
NOTE 3 Impact of adoption of NZ IFRS 15 and NZ IFRS 16
The impact of the adoption of NZ IFRS 15, NZ IFRS 16 and the change in disclosure of Spark’s long
term investments on the statement of profit or loss for the six months ended 31 December 2017 is
set out below:
Statement of profit or loss
SIX MONTHS ENDED 31 DECEMBER 2017REPORTED
ADOPTION
OF NZ IFRS 15
ADOPTION
OF NZ IFRS 16
LONG-TERM
INVESTMENTSRESTATED
UNAUDITED$M$M$M$M$M
Operating revenues 1,822 (33) – (28) 1,761
Operating expenses (1,358) 20 33 – (1,305)
Share of associates’ and joint
ventures’ net losses (1) – – 1 –
Earnings before finance expense
and income, net investment income,
income tax, depreciation and
amortisation 463 (13) 33 (27) 456
Depreciation and amortisation (214) – (23) – (237)
Net investment income – – – 27 27
Finance income 8 8 – – 16
Finance expense (22) – (15) – (37)
Net earnings before income tax 235 (5) (5) – 225
Income tax expense (63) – – – (63)
Net earnings for the period 172 (5) (5) – 162
Page 09
Spark New ZealandInterim financial statements

Notes to the interim financial statements
The impact of the adoption of NZ IFRS 15 and NZ IFRS 16 on the statement of cash flows for the
six months ended 31 December 2017 is set out below:
Statement of cash flows
SIX MONTHS ENDED 31 DECEMBER 2017REPORTED
ADOPTION
OF NZ IFRS 15
ADOPTION
OF NZ IFRS 16RESTATED
UNAUDITED$M$M$M$M
Cash flows from operating activities
Cash received from customers 1,777 (8) – 1,769
Interest receipts 7 8 – 15
Dividend receipts 7 – – 7
Payments to suppliers and employees (1,302) – 36 (1,266)
Payments for income tax (70) – – (70)
Payments for interest on debt (14) – – (14)
Payments for interest on leases – – (14) (14)
Payments for interest on leased customer
equipment assets – – (1) (1)
Net cash flows from operating activities 405 – 21 426
Cash flows from investing activities
Payments for purchase of businesses (46) – – (46)
Payments for long-term investments (6) – – (6)
Payments for purchase of property, plant and
equipment and intangibles (236) – – (236)
Payments for capitalised interest (4) – – (4)
Net cash flows from investing activities (292) – – (292)
Cash flows from financing activities
Net proceeds from debt 184 – – 184
Payments for dividends (229) – – (229)
Payments for leases (4) – (13) (17)
Payments for leased customer equipment assets – – (8) (8)
Receipts from finance leases 1 – – 1
Net cash flows from financing activities (48) – (21) (69)
Net cash flow 65 – – 65
Opening cash position 52 – – 52
Closing cash position 117 – – 117
NOTE 3 Impact of adoption of NZ IFRS 15 and NZ IFRS 16 (continued)
Page 10
Spark New ZealandInterim financial statements

Notes to the interim financial statements
NOTE 3 Impact of adoption of NZ IFRS 15 and NZ IFRS 16 (continued)
The impact of the adoption of NZ IFRS 15 and NZ IFRS 16 (and NZ IFRS 9 as adopted in the year ended
30 June 2018) on the opening restated statement of financial position as at 1 July 2017 is set out below:
Statement of financial position
AUDITEDUNAUDITED
REPORTED
30 JUNE 2017
ADOPTION
OF NZ IFRS 9
ADOPTION
OF NZ IFRS 15
ADOPTION
OF NZ IFRS 16
RESTATED
1 JULY 2017
$M$M$M$M$M
Current assets
Cash52–––52
Short-term receivables and
prepayments610(9)33(9)625
Inventories94–––94
Total current assets756(9)33(9)771
Non-current assets
Long-term receivables and
prepayments237(8)(7)14236
Long-term derivative assets7–––7
Long-term investments108–––108
Right-of-use assets–––603603
Leased customer equipment assets–––2929
Property, plant and equipment1,070–––1,070
Intangible assets1,153––(253)900
Total non-current assets2,575(8)(7)3932,953
Total assets3,331(17)263843,724
Current liabilities
Short-term payables, accruals and
provisions464–11466
Taxation payable2–––2
Short-term derivative liabilities30–––30
Short-term lease liabilities–––2424
Debt due within one year295–––295
Total current liabilities791–125817
Non-current liabilities
Long-term payables, accruals and
provisions18––1432
Long-term derivative liabilities45–––45
Long-term lease liabilities–––423423
Long-term debt692–––692
Deferred tax liabilities134(5)7(22)114
Total non-current liabilities889(5)74151,306
Total liabilities1,680(5)84402,123
Equity
Share capital935–––935
Reserves(406)–––(406)
Retained earnings1,122(12)18(56)1,072
Total equity1,651(12)18(56)1,601
Total liabilities and equity3,331(17)263843,724
Page 11
Spark New ZealandInterim financial statements

Notes to the interim financial statements
NOTE 4 Segment information
The segment results disclosed are based on
those reported to the Managing Director and
are how Spark reviews its performance.
Spark’s segments have changed following the
change in organisational operating model in
conjunction with the adoption of agile ways
of working, which has eliminated the previous
business unit structure. Spark’s segment results
are now measured based on product margin
which includes product operating revenues
and direct product costs. The segment result
excludes labour, operating expenses,
depreciation and amortisation, net investment
income, finance income and expense and
income tax expense as these are assessed
at an overall Spark level by the Managing
Director.
Comparative segment results
Spark has restated the comparative segment
results in line with the change in organisational
operating model and the adoption of NZ IFRS 15
and NZ IFRS 16.
Restated segment results for each half-year
period of FY17 and FY18 are available in a
separate detailed financials file on the investor
section of our website at: investors.sparknz.co.
nz/investor-centre.
FOR THE SIX MONTHS ENDED
31 DECEMBER
20182017 RESTATED
OPERATING
REVENUES
PRODUCT
COSTS
PRODUCT
MARGIN
OPERATING
REVENUES
PRODUCT
COSTS
PRODUCT
MARGIN
UNAUDITED$M$M$M$M$M$M
Mobile 622 (246) 376 613 (257) 356
Voice 250 (92) 158 293 (104) 189
Broadband 344 (176) 168 331 (173) 158
Cloud, security and service
management 195 (32) 163 179 (27) 152
Procurement and partners 191 (173) 18 184 (167) 17
Managed data and networks 96 (45) 51 104 (50) 54
Other 56 (31) 25 57 (32) 25
Segment result 1,754 (795) 959 1,761 (810) 951
Page 12
Spark New ZealandInterim financial statements

Notes to the interim financial statements
NOTE 4 Segment information (continued)
Reconciliation from segment result to consolidated net earnings before income tax
RESTATED
SIX MONTHS ENDED 31 DECEMBER20182017
UNAUDITED$M$M
Segment result 959 951
Labour (250) (276)
Other operating expenses
Network support costs (37) (31)
Computer costs (46) (41)
Accommodation costs (37) (32)
Advertising, promotions and communication (47) (51)
Bad debts (6) (7)
Impairment expense (5) (1)
Costs of change – (13)
Other (42) (43)
Earnings before finance expense and income, net investment income,
income tax, depreciation and amortisation 489 456
Depreciation and amortisation expense
Depreciation – property, plant and equipment (128) (129)
Depreciation – right-of-use assets (25) (24)
Depreciation – leased customer equipment assets (9) (8)
Amortisation of intangibles (83) (76)
Net investment income
1
Dividend income– 28
Share of associates' and joint ventures' net losses– (1)
Finance income
Finance lease interest income 7 7
Other interest income 11 9
Finance expense
Finance expense on long-term debt (27) (25)
Capitalised interest 4 4
Lease interest expense (15) (15)
Leased customer equipment interest expense (2) (1)
Net earnings before income tax 222 225
1 Dividend income includes dividends received from associate companies Pacific Carriage Holdings Limited and Southern
Cross Cables Holdings Limited.
Page 13
Spark New ZealandInterim financial statements

Notes to the interim financial statements
NOTE 5 Non-GAAP measures
Spark uses non-GAAP financial measures that
are not prepared in accordance with New
Zealand Equivalents to International Financial
Reporting Standards (‘NZ IFRS’). Spark believes
that these non-GAAP financial measures provide
useful information to readers to assist in the
understanding of the financial performance,
financial position or returns of Spark. These
measures are also used internally to evaluate
performance of products, to analyse trends in
cash-based expenses, to establish operational
goals and allocate resources. However, they
should not be viewed in isolation, nor
considered as a substitute for measures
reported in accordance with NZ IFRS, as they
are not uniformly defined or utilised by all
companies in New Zealand or the
telecommunications industry.
Spark’s policy is to present ‘adjusted EBITDAI’
and ‘adjusted net earnings’ when a financial year
includes significant items (such as one-off gains,
expenses and impairments) greater than
$25 million. In FY18 costs of change of
$49 million associated with the Quantum
programme were deemed an adjusting item,
of which $13 million were incurred in the
six months ended 31 December 2017.
There are no adjusting items for the six
months ended 31 December 2018.
Earnings before finance expense and
income, net investment income, income tax,
depreciation and amortisation (EBITDAI)
and adjusted EBITDAI
Spark calculates EBITDAI by adding back
depreciation and amortisation, finance expense
and income tax expense and subtracting finance
income and net investment income (which
includes dividend income and Spark’s share of
net profits or losses from associates and joint
ventures) to net earnings. A reconciliation of
Spark’s EBITDAI and adjusted EBITDAI is
provided below and based on amounts taken
from, and consistent with, those presented in
the interim financial statements.
RESTATED
SIX MONTHS ENDED 31 DECEMBER20182017
UNAUDITED$M$M
Net earnings for the period reported under NZ IFRS 153 162
Add back: depreciation and amortisation 245 237
Add back: finance expense 40 37
Less: net investment income – (27)
Less: finance income (18) (16)
Add back: income tax expense 69 63
EBITDAI 489 456
Add: costs of change – 13
Adjusted EBITDAI 489 469
Adjusted net earnings
Adjusted net earnings reflects adjusted EBITDAI, together with any adjustments to depreciation and
amortisation and net finance expense, whilst also allowing for any tax impact of those items.
RESTATED
SIX MONTHS ENDED 31 DECEMBER20182017
UNAUDITED$M$M
Net earnings for the period reported under NZ IFRS 153 162
Add: costs of change– 13
Less: tax effect on costs of change– (4)
Adjusted net earnings 153 171
Page 14
Spark New ZealandInterim financial statements

Notes to the interim financial statements
NOTE 6 Debt
RESTATED
AS AT

31 DECEMBER
AS AT
30 JUNE
20182018
COUPON
RATE
UNAUDITEDAUDITED
FACE VALUEFACILITYMATURITY$M$M
Short-term debt
Short-term borrowingsVariable< 1 month 48 –
Commercial paperVariable< 5 months 150 149
198 149
Bank funding
Bank of New Zealand100 million NZDVariable31/10/2018 – 100
Westpac New Zealand Limited200 million NZDVariable30/11/2020 60 50
The Hongkong and Shanghai
Banking Corporation Limited100 million NZDVariable30/11/2021 100 –
MUFG Bank, Ltd125 million NZDVariable30/11/2022 125 125
285 275
Domestic notes
250 million NZD5.25%25/10/2019 250 250
100 million NZD4.50%25/03/2022 102 102
100 million NZD4.51%10/03/2023 105 104
125 million NZD3.37%07/03/2024 126 –
125 million NZD3.94%07/09/2026 124 120
707 576
Foreign currency Medium Term Notes
Euro Medium Term Notes - 18 million GBP5.75%06/04/2020 34 34
Australian Medium Term Notes - 150 million AUD4.00%20/10/2027 154 163
188 197
1,378 1,197
Debt due within one year 448 249
Long-term debt 930 948
On 7 September 2018 Spark issued $125 million of unsecured, unsubordinated fixed rate bonds
with a coupon rate of 3.37%, maturing on 7 March 2024. On 31 October 2018 Spark established
a new NZ$100 million committed revolving facility with The Hongkong and Shanghai Banking
Corporation Limited, to mature on 30 November 2021.
There have been no other changes in Spark’s short-term financing programmes or stand-by facilities
since 30 June 2018.
Page 15
Spark New ZealandInterim financial statements

Notes to the interim financial statements
NOTE 6 Debt (continued)
Net debt
Net debt includes long-term debt at the value of hedged cash flows due to arise on maturity, plus
short-term debt, less any cash. Net debt is a non-GAAP measure not defined in accordance with
NZ IFRS but is a measure used by management and is reconciled below:

RESTATED
AS AT

31 DECEMBER
AS AT
30 JUNE
20182018
UNAUDITEDAUDITED
$M$M
Cash (110) (55)
Short-term debt 198 149
Long-term debt at hedged rates
1
1,202 1,064
Net debt 1,290 1,158
1 Long-term debt at hedged rates differs from spot rates as reported under NZ IFRS and includes the impact of hedged
rates used of $20 million and $2 million of unamortised discount (30 June 2018: $14 million and $2 million).
Page 16
Spark New ZealandInterim financial statements

Notes to the interim financial statements
NOTE 7 Long-term investments
RESTATED
AS AT

31 DECEMBER
AS AT
30 JUNE
20182018
UNAUDITEDAUDITED
$M$M
Shares in Hutchison 156 69
Investment in associates and joint ventures 23 21
Other long-term investments 6 8
185 98
Spark holds a 10% interest in Hutchison Telecommunications Australia Limited (Hutchison) which is
quoted on the Australian Securities Exchange (ASX) and measures its fair value using its observable
market share price as quoted on the ASX, classified as being within level 1 of the fair value hierarchy.
As at 31 December 2018 the quoted price of Hutchison’s shares on the ASX was A$0.110 (30 June
2018: A$0.047). The change in fair value is recognised in other comprehensive income.
Investment in associates and joint ventures
Spark’s investment in associates and joint ventures at 31 December 2018 consists of the following:
NAMETYPECOUNTRYOWNERSHIPPRINCIPAL ACTIVITY
Connect 8 LimitedJoint VentureNew Zealand50%Fibre network
construction
Feenix Communications LimitedAssociateNew Zealand30%Supplier of network
services
Lightbox Sport General Partner
Limited
Joint VentureNew Zealand50%A holding company
NOW New Zealand LimitedAssociateNew Zealand37%Internet service provider
Pacific Carriage Holdings LimitedAssociateBermuda50%A holding company
PropertyNZ Limited
(homes.co.nz)
AssociateNew Zealand23%Property data website
Rural Connectivity Group LimitedJoint VentureNew Zealand33%Rural broadband
Southern Cross Cables Holdings
Limited
AssociateBermuda50%A holding company
TNAS LimitedJoint VentureNew Zealand50%Telecommunications
development
Vigil Monitoring Limited (Jupl)AssociateNew Zealand26%Healthcare technology
Page 17
Spark New ZealandInterim financial statements

Notes to the interim financial statements
NOTE 8 Reconciliation of net earnings to net cash flows from operating activities
RESTATED
SIX MONTHS ENDED 31 DECEMBER20182017
UNAUDITED$M$M
Net earnings for the period 153 162
Adjustments to reconcile net earnings to net cash flows
from operating activities
Depreciation and amortisation 245 237
Bad and doubtful accounts 9 8
Deferred income tax (6) (10)
Share of associates’ and joint ventures’ net losses – 1
Impairments 5 1
Other (1) (2)
Changes in assets and liabilities net of effects of non-cash and investing
and financing activities
Movement in accounts receivable and related items (42) (48)
Movement in inventories (32) 11
Movement in current taxation 30 –
Movement in payables and related items 32 66
Net cash flows from operating activities 393 426
NOTE 9 Significant events after balance date
Dividends
On 20 February 2019 the Board approved the payment of a first half ordinary dividend of
11.0 cents per share or approximately $202 million and a special dividend of 1.5 cents per share
or approximately $28 million. The ordinary and special dividend will be 75% imputed in line with
the corporate income tax rate. In addition, supplementary dividends totalling approximately
$22 million will be payable to shareholders who are not resident in New Zealand. In accordance
with the Income Tax Act 2007, Spark will receive a tax credit from Inland Revenue equivalent to
the amount of supplementary dividends paid.
Page 18
Spark New ZealandInterim financial statements

Notes to the interim financial statements
NOTE 10 Adoption of NZ IFRS 15 Revenue from contracts with customers
NZ IFRS 15 transition method
NZ IFRS 15 Revenue from contracts with
customers (NZ IFRS 15) replaces NZ IAS 18
Revenue and related interpretations and is
effective from the current financial year, being
the year ending 30 June 2019. Spark has
elected to transition to NZ IFRS 15 using the full
retrospective method which applies the
standard retrospectively to prior reporting
periods, subject to the permitted and following
elected practical expedients:
1. in respect of completed contracts, Spark has
not restated contracts that: (i) begin and end
within the same annual reporting period; or
(ii) were completed contracts at the
beginning of the earliest period presented;
2. in respect of completed contracts that have
variable consideration, Spark used the
transaction price at the date the contract was
completed rather than estimating variable
consideration amounts in the comparative
periods;
3. for contracts that were modified before the
beginning of the earliest period presented,
Spark has not retrospectively restated the
contract for those modifications. Instead,
Spark has reflected the aggregate effect of
all of the modifications that occur before the
beginning of the earliest period presented
when: (i) identifying the satisfied and
unsatisfied performance obligations; (ii)
determining the transaction price; and (iii)
allocating the transaction price to the
satisfied and unsatisfied performance
obligations; and
4. for all reporting periods presented before
the date of initial application, Spark will not
disclose the amount of the transaction price
allocated to the remaining performance
obligations or an explanation of when we
expect to recognise that amount as revenue.
Impact of adoption on Spark’s revenue
NZ IFRS 15 sets out the requirements for
recognising revenue and costs from contracts
with customers. The standard requires the
apportionment of revenue earned from
contracts to individual promises, or performance
obligations, on a relative stand-alone selling
price basis, based on a five-step model. The
material changes on adoption of NZ IFRS 15 by
Spark are summarised by revenue type below.
i) Mobile revenue
The majority of Spark’s consumer pay-monthly
mobile contracts are ‘open-term’, however some
customers have contracts with a fixed contract
term, such as 24 months. These contracts
generally include device subsidies, which can
be applied to the discounted purchase of a
handset. Under the previous revenue standard,
NZ IAS 18, Spark recognised revenue from
arrangements with multiple elements in a
manner that is similar to the requirements of
NZ IFRS 15, based on previous industry
guidance for the telecommunications sector
available for these transactions. There has
therefore not been a material acceleration of
device revenue on adoption of NZ IFRS 15 and
this may differ to other telecommunications
companies. However, under NZ IFRS 15 revenue
is allocated with reference to the stand-alone
selling prices and the allocation of revenue to
distinct goods or services (performance
obligations) varies from the previous allocation
which was based on relative fair value.
Spark provides customers the ability to obtain
devices on an ‘interest free’ device repayment
plan. The inherent financing component of this
offer to customers was previously assessed
using Spark’s incremental borrowing rate,
however NZ IFRS 15 requires the use of an
interest rate that would be used in a separate
financing transaction between Spark and the
customer that reflects their credit characteristics.
The application of this rate to the sale of devices
sold on repayment plans has resulted in a
reduction in device revenue and an increase in
interest income recognised over the repayment
term.
NZ IFRS 15 provides updated guidance for
determining whether an entity is a principal or
agent when delivering goods or services to
customers. This is applicable for mobile
contracts where Spark provides customers the
option to obtain free or discounted services that
are provided by third parties, such as Spotify,
within our mobile contracts. Spark has assessed
that under NZ IFRS 15 we are an agent in
Page 19
Spark New ZealandInterim financial statements

Notes to the interim financial statements
NOTE 10 Adoption of NZ IFRS 15 Revenue from contracts with customers
(continued)
relation to such services. Spark’s previous
accounting policy under NZ IAS 18 was to
recognise the cost of these extras within
operating expenses. However, under NZ IFRS 15
these extras are considered separate performance
obligations and revenue is recognised, net of
relevant costs, upon delivery to the customer.
This has resulted in a reduction in reported
operating revenue and operating expenses,
but no impact on net earnings.
There has been no material change to revenue
recognition practices for mobile revenue from
enterprise and government customers due to
the implementation of NZ IFRS 15.
ii) Broadband revenue
As noted above for mobile revenue, Spark has
previously recognised revenue under NZ IAS 18
from arrangements with multiple elements in a
manner that is similar to the requirements of
NZ IFRS 15. For broadband contracts this
included the recognition of revenue on delivery
of modems (excluding wireless broadband
modems) provided free to new broadband
customers, as they are deemed to be distinct
goods. Revenue was allocated to the modem
and the broadband service based on their
relative fair value, with the revenue for the
broadband service recognised as that service
is provided across its contract term. There has
not been an acceleration of modem revenue
on adoption of NZ IFRS 15 and this may differ
to other telecommunications companies.
However, as the revenue is now allocated to a
customer’s broadband contract with reference
to the stand-alone selling prices of all
performance obligations provided in the
contract, the allocation of revenue between
revenue types has changed.
Spark’s broadband contracts may include offers
such as account credits, periods of ‘free’ service
and other incentives. Under NZ IAS 18 Spark
previously accounted for such offers as a
reduction in broadband service revenue over a
customer’s contract period. Under NZ IFRS 15
such incentives are generally included within the
calculation of the total transaction price for the
bundle of goods and services provided in a
broadband contract. Revenue is then allocated
to each performance obligation based on its
relative stand-alone selling price and recognised
either at a point in time or over time. This results
in incentives generally being allocated to other
performance obligations in a broadband
contract, such as the modem.
Where Spark provides value added services
such as Lightbox as part of a mobile or
broadband plan, revenue must be allocated
to each component of that offer. Spark has
calculated the revised allocation of revenue
to each these components, however, to be
consistent with how the business is managed
and performance assessed, has elected to retain
allocated revenue within the same product
category in which revenues are currently
reported. For example, revenue attributable to
Lightbox as part of a bundled broadband offer
continues to be reported within broadband
revenue.
As with mobile contracts the updated NZ IFRS
15 guidance for determining whether an entity
is a principal or agent is also relevant for Spark’s
broadband contracts. Broadband contracts can
include options to obtain free or discounted
services that are provided by third parties, such
as Netflix. Spark’s previous accounting policy
under NZ IAS 18 was to recognise the cost of
these extras within operating expenses over the
contract term. However, under NZ IFRS 15 these
extras are considered separate performance
obligations and revenue is recognised, net of
relevant costs, upon delivery to the customer.
This results in a reduction in reported operating
revenue and operating expenses, but no impact
on net earnings.
iii) Voice
Voice revenue includes revenue from customers
with a landline-only service, calling and video-
conferencing services. Revenue from such
contracts under NZ IFRS 15 is generally
recognised in a pattern consistent with the
previous requirements of NZ IAS 18 and no
material changes have resulted from the
adoption of NZ IFRS 15.
iv) Cloud, security and service management
Spark provides cloud, security and service
management services primarily to large
enterprises and government departments.
Page 20
Spark New ZealandInterim financial statements

Notes to the interim financial statements
For all contracts, Spark determines if the
arrangement with a customer creates
enforceable rights and obligations. This
assessment results in certain Master Service
Agreements (“MSAs”) signed with enterprise
and government customers not meeting the
definition of a contract under NZ IFRS 15 and
as such the individual service agreements,
linked to the MSA, are treated as individual
contracts. Each contract may include multiple
services, such as data centre services,
infrastructure-as-a-service, software-as-a-service,
secure connectivity services, data analytics
services, IT sourcing, and professional services
for technology requirements and IT projects.
The contracts may incorporate services provided
by third parties, which, based on the updated
NZ IFRS 15 guidance for determining whether
an entity is a principal or agent when delivering
goods or services to customers, has resulted
in Spark recognising net proceeds from such
transactions. This results in a net reduction in
reported operating revenue, but no impact on
net earnings.
Cloud services, which allow customers to use
Spark’s infrastructure and hosted software over
the contract period without taking possession
of the infrastructure or software, are provided
on either a subscription or consumption basis.
Revenue related to cloud services provided on
a subscription basis is recognised rateably over
the contract period. Revenue related to cloud
services provided on a consumption basis, such
as the amount of storage used in a period, is
recognised based on the customer utilisation
of such resources. When cloud services
require a significant level of integration and
interdependency with software and the
individual components are not considered
distinct, all revenue is recognised over the
period in which the cloud services are provided.
Cloud, security and service management
contracts frequently include transition projects
that do not deliver a distinct good or service
to the customer and as such do not qualify as
separate performance obligations. For the
majority of these contracts the value to the
customer is delivered over time, regardless of
upfront transition activities. Operating revenue
received for these projects, as well as costs
NOTE 10 Adoption of NZ IFRS 15 Revenue from contracts with customers
(continued)
incurred to fulfil such contracts, are currently
deferred and recognised in revenue and
operating expenses respectively over the life
of the contract to the extent that they are
recoverable. This treatment is consistent with the
contract cost requirements of NZ IFRS 15 and
there have therefore been no material changes
in relation to their accounting treatment.
Some contracts may include the provision
of a service, together with a device or other
equipment, which meets the definition of an
operating lease under NZ IFRS 16 Leases. Spark
has early adopted NZ IFRS 16 at the same time
as NZ IFRS 15 and further details of the impact
are outlined in note 10.
v) Procurement and partners
Procurement revenue relates to the procurement
of hardware and software on behalf of
customers and partner revenue relates to
partner-provided IT services. NZ IFRS 15
provides updated guidance for determining
whether an entity is a principal or agent when
delivering goods or services to customers.
Where an agency relationship is identified, the
result is Spark recognising net proceeds from
such transactions, decreasing operating
revenue, but with no impact on net earnings.
No material changes have resulted from the
adoption of the new revenue standard.
vi) Managed data and networks
Managed data and networks revenue includes
revenue from the provision of data connectivity
for businesses and proactive monitoring and
managed services for customer networks.
Revenue from such contracts was generally
recognised in a pattern consistent with the
requirements of NZ IFRS 15 and no material
changes have resulted from the adoption of
the new revenue standard.
vii) Other operating revenue
Other operating revenue includes revenue from
subsidiary companies such as Qrious, Lightbox,
Morepork and other charges to customers.
Revenue from such contracts was generally
recognised in a pattern consistent with the
requirements of NZ IFRS 15 and no material
changes have resulted from the adoption of
the new revenue standard.
Page 21
Spark New ZealandInterim financial statements

Notes to the interim financial statements
NOTE 10 Adoption of NZ IFRS 15 Revenue from contracts with customers
(continued)
Impact of adoption on Spark’s statement
of financial position
The adoption of NZ IFRS 15 has resulted in
changes to Spark’s balance sheet as summarised
in note 3. The primary changes are as a result
of new guidance for the treatment of contract
costs, including costs to obtain a contract and
costs to fulfil a contract.
Under NZ IAS 18, Spark deferred and
recognised certain commission costs over their
contract term within operating expense. Such
costs continue to meet the costs to obtain a
contract criterion under NZ IFRS 15, however
we have identified further commission costs
that are required to be deferred under the
new standard. The deferral of these further
commission costs has been applied
retrospectively and due to the timing and
composition of Spark’s prior treatment, resulted
in a net decrease in earnings for FY18 on
adoption of NZ IFRS 15. Contract costs are
amortised over the expected contract period
using a systematic basis that mirrors the pattern
in which Spark transfers control of the service
to the customer.
Impact of adoption on Spark’s statement
of cash flows
The adoption of NZ IFRS 15 has no impact on
Spark’s net cash flows from operating, investing
or financing activities, or the overall net cash
flows for the current or restated periods.
As summarised in note 3, the application of an
interest rate that would be used in a separate
financing transaction between Spark and the
customer that reflects their credit characteristics
for our ‘interest free’ device offer has resulted in
a reclassification between cash received from
customers and interest receipts.
Page 22
Spark New ZealandInterim financial statements

Notes to the interim financial statements
NZ IFRS 16 transition method
NZ IFRS 16 Leases (NZ IFRS 16) replaces NZ IAS
17 Leases and removes the distinction between
operating and finance leases for lessees. Spark
has elected to early adopt NZ IFRS 16 in the
current financial year, being the year ending
30 June 2019. Spark has also elected to apply
the full retrospective transition method, which
applies the standard retrospectively to prior
reporting periods, subject to the permitted
and following elected practical expedients
and exemptions:
1. The recognition exemption for short-term
leases (leases with a lease term of up to one
year) and leases of low-value assets where
appropriate; and
2. The practical expedient which states that an
entity is not required to reassess whether a
contract is, or contains, a lease at the date of
initial application. This practical expedient is
applied to all of Spark’s contracts entered
into before the date of initial application.
NZ IFRS 16 requires Spark to recognise most
leases, where Spark is a lessee, on the statement
of financial position. Similar to the previous
finance lease model, this has resulted in the
recognition of ‘right-of-use’ assets and related
lease liability balances. As a result, rental
payments for leases previously classified as
operating leases - including corporate property
leases, mobile cell site leases and customer
equipment leases - will move from being
included in operating expenses, to depreciation
and finance expenses. The impact on net
earnings before income tax of an individual
lease over its term remains the same, however,
the new standard results in a higher interest
expense in the early years, and lower in the later
years of a lease, compared with the previous
straight-line expense profile of an operating
lease, like a table mortgage.
Spark’s leases
Spark is a lessee for a large number of
leases, including:
• Property - Spark leases a number of office
buildings and retail stores. These leases have
the most significant impact on adoption of
NZ IFRS 16 given their high value and, taking
into accounting rights of renewal that are
reasonably certain to be exercised, long
lease terms;
• Mobile sites – Spark has entered into a
number of land access agreements to allow
the operation of mobile network infrastructure
throughout New Zealand;
• Equipment – Spark acts as the intermediate
party (as a lessee and a lessor) in a number of
back-to-back lease arrangements for
customer premises equipment. Such
arrangements may also include an initial sale
and leaseback transaction;
• Motor vehicles – Spark leases motor vehicles
for use in sales, field operations and
maintenance of infrastructure equipment;
• Capacity arrangements - Spark enters into a
number of capacity arrangements for cable
capacity; and
• Other leases – other leases include items such
as general IT equipment and photocopiers.
Spark has utilised the recognition exemption
for leases of low-value assets to these leases
where appropriate.
Spark also acts as a lessor, including for
the following:
• Space in exchanges – Spark has leases for
space in exchange buildings, including as a
lessor for space in Spark exchanges and a
lessee for space in Chorus exchanges. These
leases include a legal right of offset, as Spark
and Chorus settle the payments on a net basis
and are therefore shown as a net finance
lease receivable on the statement of financial
position. Spark has assessed there is no
impact on adoption for exchange space
leases; and
• Property subleases – Spark has entered
subleases in relation to excess property that
are all currently classified as operating leases.
Each sublease has been assessed to
determine whether it is a finance or operating
lease under NZ IFRS 16. A number of these
are now classified as finance subleases
because they are for the whole remaining
term of the head lease.
NOTE 11 Adoption of NZ IFRS 16 Leases
Page 23
Spark New ZealandInterim financial statements

Notes to the interim financial statements
NOTE 11 Adoption of NZ IFRS 16 Leases (continued)
Impact of adoption on Spark’s statement
of profit or loss
The adoption of NZ IFRS 16 has had a significant
impact on the statement of profit or loss of
Spark as illustrated in note 3. For the comparative
six months ended 31 December 2017, this
includes the reduction of operating expenses
by $33 million, increase in depreciation expense
by $23 million and increase in finance expense
by $15 million - reducing net earnings by
$5 million. The fully retrospective application of
NZ IFRS 16 results in the combined depreciation
and interest expense for any lease in the
early years of its cycle being higher than the
operating expenses previously recognised.
With Spark’s long-term corporate property
leases (which account for a significant portion
of the adjustments under NZ IFRS 16) being in
the early years of their lease period, both net
earnings before tax and retained earnings
subsequently decrease following adoption
of NZ IFRS 16. The difference over the life of
the leases will be nil and there is no impact
on cash flows.
Impact of adoption on Spark’s statement
of financial position
The adoption of NZ IFRS 16 has also had a
significant impact on the statement of financial
position of Spark as illustrated in note 3. For the
comparative balance sheet as at 30 June 2018,
this includes an increase in total assets by
$410 million and total liabilities by $475 million,
with a $65 million reduction in retained earnings.
As outlined above, the decrease in retained
earnings is as a result of the acceleration of lease
interest expense in the early years of leases.
There has also been a change in the treatment
of equipment leases where Spark acts as the
intermediate party (i.e. back-to-back leases)
and which also includes an initial sale and
leaseback transaction. Under the new standard
Spark has assessed that the initial sale of the
equipment does not result in control being
passed. In combination with new guidance
provided by NZ IFRS 15, under the new
standard Spark has assessed that the initial
sale of the equipment does not result in control
being passed to the customer. As a result, the
equipment is not derecognised following the
initial sale and remains as leased customer
equipment assets on the statement of financial
position. The leaseback is accounted as a
financial liability in accordance with NZ IFRS 9
and the sub-lease as either an outwards
operating lease or finance lease depending
on its terms.
On adoption of NZ IFRS 16, Spark has also
reclassified assets associated with capacity
arrangements which were previously recognised
within intangible assets to right-of-use assets.
For the opening balance sheet as at 1 July 2017,
this resulted in a reclassification of $253 million.
Capacity arrangements are generally in the
form of an indefeasible right of use and meet
the definition of a lease under NZ IFRS 16.
Payments for such arrangements are generally
made up front and there is therefore no
associated lease liability.
Impact of adoption on Spark’s statement
of cash flows
The adoption of NZ IFRS 16 has had no net
impact on Spark’s statement of cash flows,
however as illustrated in note 3, has resulted
in the reclassification of cash flows from
lease arrangements.
Payments for operating leases under NZ IAS 17
were included within ‘payments to suppliers
and employees’ in operating cash flows.
Payments for leases are now split between
payments for interest, included in operating
cash flows, and payments which reduce the
principal balance of a lease liability, included in
financing cash flows. For the comparative six
months ended 31 December 2017, this resulted
in an increase in cash flows from operating
activities of $21 million and a decrease in cash
flows from financing activities of $21 million.
Page 24
Spark New ZealandInterim financial statements

© 2019 KPMG, a New Zealand partnership and a member firm of the KPMG network of independent
member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.

Independent Review Report
To the shareholders of Spark New Zealand Limited
Report on the interim consolidated financial statements
Conclusion
Based on our review, nothing has come to our
attention that causes us to believe that the interim
consolidated financial statements on pages 3 to 24
do not:
i.present fairly in all material respects the
group’s financial position as at 31
December 2018 and its financial
performance and cash flows for the 6
month period ended on that date; and
ii.comply with NZ IAS 34 Interim Financial
Reporting.
We have completed a review of the accompanying
interim consolidated financial statements which
comprise:
—the consolidated statement of financial position
as at 31 December 2018;
—the consolidated statements of profit or loss
and other comprehensive income, changes in
equity and cash flows for the 6 month period
then ended; and
—notes, including a summary of significant
accounting policies and other explanatory
information.
Basis for conclusion
A review of interim consolidated financial statements in accordance with NZ SRE 2410 Review of Financial
Statements Performed by the Independent Auditor of the Entity (“NZ SRE 2410”) is a limited assurance
engagement. The auditor performs procedures, consisting of making enquiries, primarily of persons responsible
for financial and accounting matters, and applying analytical and other review procedures.
As the auditor of Spark New Zealand Limited, NZ SRE 2410 requires that we comply with the ethical
requirements relevant to the audit of the annual financial statements.
Our firm has also provided other services to the group in relation to regulatory audit, other assurance related
services (such as trustee reporting) and compliance services. Subject to certain restrictions, partners and
employees of our firm may also deal with the group on normal terms within the ordinary course of trading
activities of the business of the group. These matters have not impaired our independence as reviewer of the
group. The firm has no other relationship with, or interest in, the group.
Use of this Independent Review Report
This report is made solely to the shareholders as a body. Our review work has been undertaken so that we
might state to the shareholders those matters we are required to state to them in the Independent Review
Report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the shareholders as a body for our review work, this report, or any of the
opinions we have formed.
Page 25
Spark New ZealandInterim financial statements

2

Responsibilities of the Directors for the interim consolidated financial
statements
The Directors, on behalf of the group, are responsible for:
—the preparation and fair presentation of the interim consolidated financial statements in accordance with NZ
IAS 34 Interim Financial Reporting;
—implementing necessary internal control to enable the preparation of interim consolidated financial
statements that are fairly presented and free from material misstatement, whether due to fraud or error; and
—assessing the ability to continue as a going concern. This includes disclosing, as applicable, matters related
to going concern and using the going concern basis of accounting unless they either intend to liquidate or to
cease operations, or have no realistic alternative but to do so.
Auditor’s Responsibilities for the review of the interim consolidated
financial statements
Our responsibility is to express a conclusion on the interim consolidated financial statements based on our
review. We conducted our review in accordance with NZ SRE 2410. NZ SRE 2410 requires us to conclude
whether anything has come to our attention that causes us to believe that the interim consolidated financial
statements are not prepared, in all material respects, in accordance with NZ IAS 34 Interim Financial Reporting.
The procedures performed in a review are substantially less than those performed in an audit conducted in
accordance with International Standards on Auditing (New Zealand). Accordingly we do not express an audit
opinion on these interim financial statements.
This description forms part of our Independent Review Report.


KPMG
Wellington
20 February 2019


Page 26
Spark New ZealandInterim financial statements

Contact details
Registered office
Level 2
Spark City
167 Victoria Street West
Auckland 1010
New Zealand
Ph +64 4 471 1638 or 0800 108 010
Acting Company secretary
Justine Gunn
New Zealand registry
Link Market Services Limited
Level 11 Deloitte House
PO Box 91976
80 Queen Street
Auckland 1142
Ph +64 9 375 5998 (investor enquiries)
Fax +64 9 375 5990
enquiries@linkmarketservices.com
www.linkmarketservices.co.nz
Australian registry
Link Market Services Limited
Level 12
680 George Street
Sydney NSW 2000
Australia
Locked Bag A14
Sydney South NSW 1235
Australia
Ph +61 2 8280 7111 (investor enquiries)
Fax +61 2 9287 0303
registrars@linkmarketservices.com.au
www.linkmarketservices.com.au
United States registry
Computershare Investor Services
P.O. Box 505000
Louisville, KY 40233-5000
United States of America
Ph +1 888 BNY ADRS (+1 888 269 2377)
or +1 201 680 6825 (from outside the
United States)
shrrelations@cpushareownerservices.com
www-us.computershare.com/investor
For more information
For inquiries about Spark’s operating and
financial performance contact:
investor-info@spark.co.nz
Investor Relations
Spark New Zealand Limited
Private Bag 92028
Auckland 1142
New Zealand
investors.sparknz.co.nz
insight
creative.co.nz
SPARK036 02/19
Page 27
Spark New ZealandInterim financial statements

investors.sparknz.co.nz
ARBN 050 611 277

Corporate Action Notice
(for a Distribution)


Section 1: issuer information
Name of issuer Spark New Zealand Limited
Financial product name/description Ordinary shares
NZX ticker code SPK
ISIN NZ TELE0001S4
Type of distribution Full Year Quarterly
Half Year X Special
DRP applies No
Record date Close of trading on: 15 March 2019
Ex-Date (one business day before the
Record Date)
14 March 2019 AUST & NZ; 13 March 2019
USA
Payment date (and allotment date for
DRP)
5 April 2019 AUST & NZ; 19 April 2019 USA
Total monies associated with the
distribution
NZD$201,981,074
(1,836,191,581 shares @ $0.11 per share)
Source of distribution Retained earnings
Section 2: distribution amounts
Total amount $0.14208333
Cash per financial product $0.11
Supplementary distribution $0.01455882
Section 3:
Is the distribution imputed Fully imputed
Partial imputation
No imputation
If fully or partially imputed, please state
imputation rate as % applied
75%
Imputation tax credits per financial
product
$0.03208333
Resident withhold tax amount per
financial product
$0.01480417
Section 4: distribution re-investment plan (if applicable)
DRP % discount (if any)
Start date and end date for determining
market price for DRP
Close of trading on: Close of trading on:
Date strike price to be announced (if
not available at this time)
Close of trading on:

Corporate Action Notice
(for a Distribution)

Specify source of financial products to
be issued under DRP programme (new
issue or to be bought on market)

DRP strike price per financial product $
Last date to submit a participation
notice for this distribution in accordance
with DRP participation terms

Section 5: authority for this announcement
Name of person authorised to make
this announcement
Justine Gunn, Acting Company Secretary
Contact phone number +64 9 373 6919
Contact email address Company.Secretary@spark.co.nz
Date of release via MAP 20 February 2019

Corporate Action Notice
(for a Distribution)


Section 1: issuer information
Name of issuer Spark New Zealand Limited
Financial product name/description Ordinary shares
NZX ticker code SPK
ISIN NZ TELE0001S4
Type of distribution Full Year Quarterly
Half Year Special X
DRP applies No
Record date Close of trading on: 15 March 2019
Ex-Date (one business day before the
Record Date)
14 March 2019 AUST & NZ; 13 March 2019
USA
Payment date (and allotment date for
DRP)
5 April 2019 AUST & NZ; 19 April 2019 USA
Total monies associated with the
distribution
NZD$27,542,874
(1,836,191,581 shares @ $0.015 per share)
Source of distribution Retained earnings
Section 2: distribution amounts
Total amount $0.01937500
Cash per financial product $0.015
Supplementary distribution $0.00198529
Section 3:
Is the distribution imputed Fully imputed
Partial imputation
No imputation
If fully or partially imputed, please state
imputation rate as % applied
75%
Imputation tax credits per financial
product
$0.00437500
Resident withhold tax amount per
financial product
$0.00201875
Section 4: distribution re-investment plan (if applicable)
DRP % discount (if any)
Start date and end date for determining
market price for DRP
Close of trading on: Close of trading on:
Date strike price to be announced (if
not available at this time)
Close of trading on:

Corporate Action Notice
(for a Distribution)

Specify source of financial products to
be issued under DRP programme (new
issue or to be bought on market)

DRP strike price per financial product $
Last date to submit a participation
notice for this distribution in accordance
with DRP participation terms

Section 5: authority for this announcement
Name of person authorised to make
this announcement
Justine Gunn, Acting Company Secretary
Contact phone number +64 9 373 6919
Contact email address Company.Secretary@spark.co.nz
Date of release via MAP 20 February 2019

---

MARKET RELEASE
20 February 2019

Spark New Zealand H1 FY19 results show increased efficiency
and Agile benefits driving performance in challenging market
• Customer experience benefits and resultant cost savings from digitisation
and automation initiatives underpin solid EBITDAI
1
performance, despite a
slight revenue decline due to expected impact of accelerated decline in legacy
products and moderated revenue growth in core products.
• Transition to Agile operating model is complete across the business; already
delivering benefits and allowing Spark to deliver products and services and
consistent experience customers expect, on a much lower cost base.
• Mobile margins strong as market shifts to focus on profitability, customer
value and innovation.
• NPAT down on prior period due to decision by Southern Cross shareholders
to withhold paying a dividend pending potential investment in the Southern
Cross Next cable.
• Spark Sport platform build on track, with beta version to launch in early
March; pricing of $19.99 per month announced today.

Spark New Zealand’s financial results for the half year to 31 December 2018 show the
combined focus on efficiency and innovation across core products and services is
delivering for the business.
Spark Chair Justine Smyth said Spark’s programme of simplification, digitisation and
automation initiatives, and disciplined cost management more generally, meant the
business continued to deliver EBITDAI growth, despite competition remaining intense
and declines in legacy areas of the business continuing.
“Our transformation to a lower cost base, our improved and increasingly digitised
customer experience, and the benefits already flowing from our Agile operating model
have set Spark up with an enduring competitive advantage,” Ms Smyth says.
“We were particularly pleased to see evidence of this improved digital customer
experience come through strongly over the half year. The number of voice calls into our

1
Earnings before finance expense and income, net investment income, income tax, depreciation and
amortisation

customer care teams was down 30% year-on-year, while the number of live chats
handled by virtual assistants increased eightfold in the same period. At the same time,
customers reported higher levels of satisfaction with the experience they had when
coming to us for help – as measured by ‘interaction net promoter score’ or iNPS.”
Spark reported revenue of $1,754m for the half, down $7m year-on-year, as revenue
from growth products was negated by declines in legacy voice and managed data. In the
half, Spark saw the revenue impact of an accelerated decline in wholesale voice
connections that occurred in the previous financial year, and a slight moderation in
revenue growth for mobile and for cloud, security and service management.
Reported EBITDAI was up $33m, or 7.2%, on the prior year to $489m (or up 4.3% on an
adjusted basis)
2
. Improved margins in mobile, broadband, and cloud, security and
service management, and benefits from Spark’s digitisation and automation initiatives
underpinned this growth. EBITDAI was impacted by a $5m fair value adjustment to
Spark’s investment in a global IoT start-up.
Although reported EBITDAI was up, reported net profit after tax (NPAT) was down 5.6%
to $153m (or down 10.5% on an adjusted basis)
2
. This was due to a $28m decline in
Southern Cross dividend (no dividend was declared in H1 FY19) and associated
increase in Spark’s effective income tax rate. Southern Cross shareholders decided to
withhold a dividend for H1 FY19 to fund the potential construction of the Southern Cross
Next cable – an excellent investment which will create value for our shareholders. If
Southern Cross dividends continue to be withheld for the remainder of FY19, then FY19
earnings per share - and associated guidance - will reduce by approximately 1c. A
further market update will be provided in the event that Southern Cross dividends are
withheld for the remainder of FY19.
Managing Director Simon Moutter said he was pleased to see the big calls Spark had
made in the previous financial year to reduce costs were now flowing through to a strong
EBITDAI result. He also noted the mobile market shift to a focus on innovation and
customer value, rather than chasing low value casual rate prepaid connections – was
resulting in stronger margins.
“Over the half, we saw customers continue to choose higher-value plans, with the
number of customers on our unlimited mobile plan doubling over the period. This trend
was also visible in the more price-sensitive end of the market, with a 16.1% increase in
Skinny customers adopting a recurring top-up plan,” said Mr Moutter.

2
Adjusted to exclude Quantum implementation costs incurred in H1 FY18 ($13m pre-tax and $9m after tax)

Cloud, security and service management revenue grew by $16m or 8.9% year on year,
driven by good demand and volume growth, but offset somewhat by more competitive
intensity from local and global providers.
Broadband revenues returned to growth, up 3.9% in a challenged market.
“We are seeing a more positive story emerging in broadband resulting from some
conscious decisions. We made a change to copper pricing, to better reflect the higher
costs of providing this service to customers versus newer technologies like fibre and
wireless broadband. We also chose to introduce a new “Unplan” broadband service,
which emphasises value in the core offer rather than needing to be propped up with
substantial acquisition and retention incentives. Wireless broadband grew by a further
13,000 connections over the half year and continues to deliver annualised reductions in
access costs. These decisions have helped to put broadband margins back on a path to
a more sustainable level,” said Mr Moutter
Voice revenue declined 14.7%, a slightly higher decline than in the previous period. This
reflected the expected impact of an accelerated wholesale connection decline in the
previous financial year, and a higher decline in calling volumes (down 18%).
Spark also saw wireless voice connection growth of 4,000 to a total of 18,000
connections.
“Wireless voice offers customers a high-quality product at a lower price. We are now in
the throes of progressively shutting down the legacy public switched telephone network
(PSTN) and want to keep ahead of this change by helping customers move from the old
to the new technology, well ahead of any withdrawal of access to the copper network”.
“We intend to further accelerate wireless voice connections by year-end and are working
through how we can better explain the benefits to customers who may feel a bit wary of
new technology,” said Mr Moutter.
Mr Moutter said that over the half, Spark began to see concrete benefits from the Agile
ways of working now embedded across the entire business.
“Agile is already delivering for our customers. Agile methods ensure our people have a
crystal-clear view of what customers value and can totally focus on their part of
delivering that. The empowerment framework removes the barriers that might have held
things up in the past.

“As a result, Spark has improved the speed with which we can bring new products and
services to market, ensuring these are aligned with customers’ high expectations and
our customer experience continues to improve – all while operating on a much lower
cost base.”
Looking to the future, Mr Moutter said Spark sees the deployment of 5G technology as a
crucial enabler of Spark’s future growth and vital for New Zealand to keep up with the
rest of the world.
“5G will be a big driver of future innovation – not only for our industry but also for New
Zealand’s economy. We are still working towards launching the network by July 2020 at
the latest.”
Today Spark also announced pricing for its new Spark Sport platform, which will launch
in early March in beta. Spark Sport subscriptions – excluding Rugby World Cup 2019 -
will be $19.99 per month, with a one-month free trial available at launch.
“We’re excited to bring this fantastic service to New Zealanders next month. We have a
capable Spark Sport team in place and the platform build is on plan. The service will be
live in time for the first Formula One race, the Australian Grand Prix. As we appreciate
that the launch of Spark Sport is relatively close to the start of the Formula One season,
the Australian Grand Prix will be simulcast on Spark Sport and TVNZ.
“During the beta phase we will welcome feedback from users, and we’ll continue to
develop the platform and roll out new functionality in the weeks and months after launch.
“We are well on track with our planning for the Rugby World Cup in September. Pricing
and plans for the tournament will be announced and put on sale in Q4 FY2019. We will
time the RWC2019 pricing announcement for when the Spark Sport platform is fully
launched, as we expect many New Zealanders will want to sign up early,” said Mr
Moutter.
Spark announced an H1 FY19 total dividend per share of 12.5c, which will be made up
of a 75% imputed ordinary dividend per share of 11.0c and a 75% imputed special
dividend per share of 1.5c.
ENDS

For media queries, please contact:
Lucy Fullarton
Corporate Relations Partner
+64 (0) 21 070 6197

For investor relations queries, please contact:
Dean Werder
Finance Lead Partner Product and Performance
+64 (0) 27 259 7176

Spark New Zealand
H1 FY19 Results Summary
Simon Moutter, Managing Director
David Chalmers, Finance Director

Overall Performance
Key Result Themes
Financial and market share results are on plan, with focus on customer experience and operational efficiency driving performancein a challenging market.
Implementation of Agile operating model completed across the business. Already delivering expected benefits in customer centricity, speed to market,
productivity and employee engagement.
Focus on wireless maintained, albeit market forces seeing slowing usage revenue growth -somewhat compensated by margin improvement. Mobile market
shifting focus to customer value and profitability with some changes in handset buyer behaviour also evident.
Expect 5G to be a driver of innovation for both our industry and the New Zealand economy. In trial/demo phase now and working towards commercial launch
by July 2020 at the latest.
Pricing initiatives influencing positive margin performance in broadband with copper pricing increased and upfront contract incentives being heavily reduced.
Wireless broadband uptake continuing to grow with consequent customer experience and margin benefits flowing.
Cloud, security and service management revenue growth maintained with continuing strong customer demand; albeit moderated by rising competitive intensity
from local and global providers.
Decision by Southern Cross to withhold dividends pending investment in potential build of Southern Cross Next cable - impacting short term earnings in favour of
long-term investment returns.
Spark Sport platform build on track, with beta version to launch in March 2019. Spark Sport subscription pricing of $19.99 per month announced today.
Confidently progressing with all preparations needed for successful delivery of the Rugby World Cup in September 2019 (RWC 2019).
Spark’s H1 FY19 result is reported in accordance with previously announced changes to Spark’s disclosure of long-term investments and Spark’s recent adoption
of NZ IFRS 15 Revenue from contracts with customersand NZ IFRS 16 Leases. While these changes have no impact on cash flow they do alter the presentation of
Spark’s financial results –primarily due to:
•Dividend income from Southern Cross (and other investments) together with Sparks share of associates’ and joint ventures’ netpr ofit and losses being
included in a new ‘net investment income’ category outside of EBITDAI;
•A shift from operating revenue to interest income to reflect the credit risk on interest free mobile device sales;
•A reduction in operating revenues and operating costs to reflect the netting-off of Spotify and Netflix expenses that are now treated as agency
arrangements; and
•A change in the classification of operating lease costs to depreciation and interest expenses.
The impact of these changes on FY17 and FY18 financial statements are summarised in Appendix 1
(1)
.
2
(1)
Further information in relation to Spark’s updated approach to external reporting can be found on our investor centre websiteinvestors/sparknz.co.nz. See announcement and accompanying
explanatory presentation from 4 December 2018.

•Solid progress towards being mostly ex copper by 2020 with 58% of broadband customers now on new broadband
technologies – up 13ppin the last twelve months
•Customer uptake of wireless broadband continues; with base increasing by a further 13k connections in H1. 18% of
broadband customers (129k) now benefiting from wireless broadband; further demonstrating the potential for
expanded speed and capacity of 4.5G and 5G networks to satisfy customer demand
•Adoption of ‘Unlimited’ mobile plans, including shareable plan launched during H1 FY19, demonstrates customer
demand for price certainty. Number of customers on an ‘Unlimited’ mobile plan doubled during H1, fuelling a 2pp
YoY increase in the proportion of consumer pay monthly customers on a $55+ plan
•Skinny’s lower priced high data-cap mobile plans continue to perform well; contributing to significant ARPU growth of
10% YoY and a 16% YoY increase in Skinny customers on recurring plans
•Skinny sub-brand secured connection growth in a hyper-competitive broadband market
•Introduction of new SD-WAN
(3)
products providing lower priced connectivity solutions to business customers; associated
margin supported by a lower cost to serve via improved customer experience and self-service options
Quantum programme
(4)
of simplification, digitisation and automation has delivered a transformative improvement in
service experience and productivity:
•Met H1 target for annualised net labour costs – reducing a further ~$30m to ~$470m during the half. Total Quantum
implementation costs of $57m have now delivered net annualised benefits of ~$110m.
•Delivered further reductions in consumer customer care voice interactions during the half; down 30% YoY whilst
improving interaction NPS
•Growth in wireless broadband customer base generated a further $8m YoY reduction in broadband access costs
during H1 FY19; bringing annualised benefits to a total of ~$62m
Implementation of scaled Agile operating model complete; new ways of working already demonstrating benefits across
customer experience, speed to market and employee engagement
Lowest cost operator
Better serving price sensitive customers
Emphasis on Wireless
Overall Performance
Key Areas of Focus
Further progress made against three key areas of focus
~$62m
Wireless Broadband Migration
annualised gross reduction in
access costs
3
39.1%
+0.5 pp
Market Share of Mobile
Service Revenues
(1)
vs. H1 FY18
40.9%
- 1.0 pp
Market Share of Broadband
Connections
(1) (2)
vs. H1 FY18
(1)
Independent market share estimate
(2)
Includes wireless broadband connections
(3)
Software Defined Wide Area Network
(4)
No material Quantum costs of change incurred during H1 FY19
~$110m
Quantum Programme
annualised net reduction in
labour costs

Overall Performance
Financial Summary
EBITDAI of $489m up $33m (7.2%) on reported prior year EBITDAI and up $20m (4.3%) on adjusted prior year EBITDAI. Underpinned
by gross margin growth and a $40m (3.1%) reduction in total operating expenses - including a further $26m (9.4%) YoY reduction in
net labour costs delivered via Spark’s Quantum programme – partially offset by a $5m fair value adjustment of Spark’s investmentin a
global IoT start-up. Annualised net labour costs reduced to ~$470m during H1 FY19, down ~$110m since June 2017.
Gross margin up $8m (0.8%) on prior year despite reported revenue decline of $7m (0.4%); due to improved gross margin
percentages across mobile, broadband and managed data and networks.
•Revenue growth totalling $25m across mobile (up 1.5%) and cloud, security and service management (up 8.9%) and a return to
growth in a challenging broadband market (up 3.9%) partially offsetting continued declines in voice, managed data and networks
revenues; down $51m in total.
•Mobile, cloud, security and service management now account for 56% of Spark’s gross margin; up 3pp since H1 FY18.
NPAT down $9m or (5.6%) versus reported prior year NPAT and down $18m or (10.5%) on adjusted prior year NPAT; with EBITDAI
growth more than offset by:
•$28m decline in Southern Cross dividend (no dividend was declared in H1 FY19) and associated increase in Spark’s effective income
tax rate
(1)
;
•Depreciation and amortisation up $8m (3.4%) due to shortened asset life of a single software solution that Spark is migratingaway
from; and
•Increase in finance expenses of $3m (8.1%) on higher average net debt.
Net debt increased by $132m during H1 FY19 primarily due to top-up of dividends and device receivable growth. Rate of net debt
growth is expected to slow significantly during H2 FY19.
•H1 FY19 capital expenditure in line with prior year; on track to remain within targeted capital expenditure of 11%-12% of
operating revenues for FY19.
•Cash conversion ratio
(2)
of 92% consistent with expected full year conversion ratio of 95%; underlying improvements in cash
conversion partially offset by timing of Quantum implementation costs and slower than expected sell-through of higher end mobile
device inventory.
H1 FY19 total dividend per share of 12.5c will be made up of a 75% imputed ordinary dividend per share of 11.0c and a 75%
imputed special dividend per share of 1.5c. Reported net debt
(3)
to EBITDA ratio of ~1.2x is consistent with our ongoing commitment to
maintaining an A- S&P credit rating.
(1)
New Zealand tax rules treat Spark’s 50% share of SX earnings as taxable and any SX dividend income as tax exempt. With no SX dividends paid in the current period Sparks H1 FY19
tax expense (and effective tax rate) are higher as tax will still be paid on Spark’s share of underlying earnings.
(2)
Calculated as net cash flow from operations (excluding tax, dividend receipts and interest) divided by EBITDAI (excluding netgains from divestments and impairments)
(3)
Reported net debt at hedged rates as reported in note 6 of Spark’s H1 FY19 Interim Financial Statements
($7m)
(0.4%)
Revenue
movement
vs. H1 FY18
$33m
7.2%
EBITDAI
movement
vs. reported H1
FY18
($9m)
(5.6%)
NPAT movement
vs. reported H1
FY18
EBITDAI growth underpinned by margin expansion and Quantum programme
benefits reducing cost base
4

Overall Performance
Financials
H1 FY19
$m
H1 FY18
$m
CHANGE
Operating revenues1,7541,761(0.4%)
Operating expenses(1,265)(1,305)(3.1%)
Reported EBITDAI4894567.2%
Depreciation and amortisation(245)(237)3.4%
Net investment income-27(100%)
Finance income181612.5%
Finance expense(40)(37)8.1%
Net earnings before tax expense222225(1.3%)
Tax expense(69)(63)9.5%
Net earnings after tax expense153162(5.6%)
Adjusted EBITDAI
(1)
4894694.3%
Adjusted net earnings after income tax
(2)
153171(10.5%)
Capital expenditure2642620.8%
Underlying free cash flow
(3)
14611032.7%
Reported EBITDAI margin27.9%25.9%2.0pp
Adjusted EBITDAI margin27.9%26.6%1.3pp
Reportedeffective tax rate31.1%28.0%3.1pp
Capital expenditure to operating revenues15.1%14.9%0.2pp
Reported Earnings per Share8.3c8.8c(5.7%)
Adjusted Earnings per Share8.3c9.3c(10.8%)
Total Dividend per Share12.5c12.5c-
(1)
Adjusted H1 FY18 EBITDAI calculated as: reported EBITDAI of $456m adjusted to exclude Quantum implementation costs of $13m
(2)
Adjusted H1 FY18 net earnings after tax calculated as: reported net earnings after tax adjusted to excludeQuantum implementation costs of $13m lesstax effect on implementation costs of $4m
(3)
For further information refer to appendix 3
5

Mobile revenue growth of $9m or 1.5% driven by:
•Higher margin service revenue growth of $8m (2.0%) on connection growth
and improving pre-paid ARPU, partially offset by persistent pricing
pressure in the business segment; and
•$1m (0.5%) increase in low margin mobile non-service revenue with
ongoing, although moderating, consumer demand for premium devices offset
by declines in business device sales
Voice and collaboration revenue decline of $43m (14.7%) versus prior period
decline of $46m (13.6%) - due to full-period impact of increased Wholesale
connection churn seen during H2 FY18. Wholesale churn has since moderated
Return to broadband revenue growth up $13m (3.9%) - despite connection loss
- following increase in retail price of copper plans and cessation of acquisition
credits alongside launch of ‘Unplan’
Cloud, security and service management growth of $16m (8.9%) demonstrating
ongoing customer demand for the flexibility and benefits that cloud based “as
a Service” products offer –albeit at levels slightly moderated from those seen
in previous periods
Increase in low margin procurement revenues of $7m (3.8%) driven by customer
demand
Managed data and networks revenue decline of $8m (7.7%) in line with prior
period
Other revenue movements include:
•100% increase in Lightbox revenue driven by premium subscription and
TVOD services launched in H2 FY18; offset by
•Reduction in shared services income due to customer migration off shared IT
platforms
Overall Performance
Revenue
Revenue growth moderating across key products in line with market trends but focus on
costs has expanded margins
6
1,761
1,754
9
13
16
7
(43)
(8)
(1)
1,725
1,750
1,775
H1 FY18MobileVoiceBroadbandCloud,
security &
service
management
Procurement
& partners
Managed data
& networks
Other
operating
H1 FY19
$m
(0.4%)
Revenues H1 FY18 vs H1 FY19

Overall Performance
Operating Expenses
7
Mobile product costs down $11m (4.3%) due to:
•Lower external commission costs following insourcing of retail stores in late
H1 FY18; and
•Reduced mobile insurance costs driven by improvements in repair and claims
processes
Voice product costs reduced by $12m (11.5%) due to declines in voice
connections - primarily in Wholesale - partially offset by increase in regulated
access charges
Broadband product costs up $3m (1.7%) on prior year driven by:
•$8m YoY reduction in access costs due to further adoption of wireless
broadband; offset by
•Increase in non-standard fibre installation costs; and
•Increases in wholesale access charges for both fibre and copper
Cloud, security and service management product costs increased (up $5m or
18.5%) at a faster rate than revenue growth due to a shift in revenue mix
towards service management
Increase in procurement and partners product costs in line with growth in
associated low-margin revenues
Managed data and network product costs decreased (down $5m or 10.0%) at
a faster rate than revenue due to platform cost savings enabled by proactive
customer migration off traditional managed data products on to newer
technology platforms
Net labour costs reduced $26m (9.4%) following successful implementation of
Quantum initiatives – FTE down 5.3% YoY and 7.9% since June 2017
Excluding $13m Quantum implementation costs incurred in H1 FY18, other
expenses increased $14m, or (6.8%) driven by:
•$5m fair value adjustment of investment in a global IoT start up;
•Ongoing impact of high electricity spot-prices; and
•Support costs associated with maintaining Spark’s mobile and data networks
Quantum programme of simplification, digitisation and automation continues to deliver
significant cost reductions
1,305
1,292
1,265
3
5
6
14
(13)
(11)
(12)
(5)
(1)
(26)
1,250
1,275
1,300
H1 FY18Costs of
change
Revised H1
FY18
MobileVoiceBroadbandCloud,
security &
service
management
Procurement
& partners
Managed
data &
networks
Other
product
LabourOtherH1 FY19
$m
Expenses H1 FY18 vs H1 FY19
(3.1%)
(2.1%)
Adjusted
H1 FY18

Overall Performance
EBITDAI
Gross margin improved by $8m (0.8%) due to:
•5.6% increase in mobile gross margin on increase in connections,
strong ARPU growth in Skinny and mobile product cost
reductions;
•7.2% increase in cloud, security and service management gross
margin due to ongoing revenue growth - primarily in cloud; and
•6.3% improvement in broadband gross margin due to both a
return to revenue growth and increased adoption of higher-
margin wireless broadband services
Reported EBITDAI margin of 27.9% up 2.0% pp on prior year due
to:
•Margin improvement across mobile, broadband and managed
data and networks;
•Quantum led initiatives delivering $26m (9.4%) YoY reduction in
net labour; partially offset by
•Ongoing declines in high-margin voice revenues; and
•Increases in other operating expenses; including $5m fair value
adjustment of investment in global IoT start up
Excluding H1 FY18 Quantum costs of change, EBITDAI grew $20m
(4.3%) to $489m
8
Reported EBITDAI up $33m (7.2%) due to margin growth in mobile, cloud, security, service
management and broadband coupled with labour cost reductions
456
469
489
13
20
10
11
1
26
(31)
(3)
(14)
450
475
500
H1 FY18Costs of
change
Revised H1
FY18
Mobile
margin
Voice marginBroadband
margin
Cloud,
security &
service
management
margin
Procurement
& partners
margin
Managed
data &
networks
margin
LabourOther
operating
expenses
H1 FY19
$m
+4.3%
EBITDAI H1 FY18 vs H1 FY19
+7.2%
Adjusted
H1 FY18

Product Performance
Mobile
Market forces have required a shift in focus from service revenue growth to margin expansion
as rate of overall market revenue growth slows
(1)
Total mobile revenue, up $9m (1.5%), accounting for 35.5% of total operating revenues; a 0.7pp
increase on prior year due to:
•Pay-monthly connection growth of 67k (5.8%) – accounting for 43.5% of total H1 FY19 pay-
monthly market growth
(1)
; total pay-monthly connections now greater than total prepaid
connections for the first time in more than 10 years; partially offset by
•39k YoY decline in pre-paid connections due to loss of lower-value customers on ‘casual’ pricing
plans. Prepaid customer mix benefiting from more active and higher value customers –
evidenced by a 16.1% YoY increase in the number of Skinny customers on a recurring top up
plan; and
•Modest growth in low margin non-service revenue (up $1m versus $21m YoY growth in H1
FY18) due to a continued, albeit moderated, decline in the number of consumer handsets sold
and modest growth in average consumer handset prices (up only 3% versus 18% YoY growth in
H1 FY18) coupled with a significant decline in business other mobile device revenue (including
tablets, radio handsets etc) due to the presence of a large one-of device deal in FY18 –
partially offset by strong growth in consumer other mobile device revenue
Market connection and revenue growth has slowed
(1)
; aspiration for FY19 mobile service revenue
growth has been subsequently revised down from 5% to 3%
Focus shifted to margin improvement to support profitability, resulting in $20m (5.6%) increase in
mobile gross marginand a 2.4pp improvement in mobile gross margin percentage (to 60.5%) due
to:
•Mobile services revenue growth of $8m (2.0%) largely driven by consumer pay-monthly
connection growth;
•Lower external commission costs following insourcing of retail stores in late H1 FY18; and
•Ongoing migration away from device subsidies with 97%
(2)
of consumer pay-monthly base now
on open term plans - up 3pp on prior year
Total mobile ARPU stable YoY:
•Stable consumer pay monthly ARPUs with 38% of customers now on higher value $55+ plans;
•Skinny prepaid offerings continuing to resonate with price sensitive customers driving ARPU
growth of 10%; offset by
•ARPU declines in business segment due to persistent competitive pressure
9
-40k
-20k
0k
20k
40k
60k
H1 FY17H2 FY17H1 FY18H2 FY18H1 FY19
Net connection movement
pay-monthlyprepaid
29%
36%
38%
0%
50%
100%
H1 FY17H1 FY18H1 FY19
Consumer pay-monthly plan mix
(2)
Less than $55$55 or greater
(1)
Based on independent market growth estimates
(2)
Updated from previously communicated results to only include consumer pay-monthly connections. Calculation previously included
SME connections which are now classified as business within Spark’s new segmental reporting
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
2012201320142015201620172018
Mobile service revenue market growth
(1)

Wireless Technology Pathway
5G Update
10
Planning to roll-out 5G prior to July 2020 however decisions on spectrum are needed
Plan to launch Spark’s 5G network
by 1 July 2020 at the latest, subject
to the necessary spectrum being
made available by the New Zealand
Government
Outdoor and indoor trials completed
early 2018.
5G Innovation Lab launched to allow
partner companies to test and
develop applications over a pre-
commercial 5G network.
Build programme to increase the
number of cell sites in existing mobile
network underway to meet near-term
capacity demand and lay groundwork
for network densification required for
5G.
A refresh of Spark’s Mobile core has
completed in readiness for 5G and
RAN integration of the Next
Generation Core has been completed
in the innovation lab.
5G can enable additional capacity to
be provided at a lower incremental
unit cost than under 4G and 4.5G
Strong commercial incentive to rapidly
build 5G network capability -once 5G
is available to deploy - as the primary
means of:
•Keeping ahead of growing customer
demand for more data at faster
speeds; and
•Supporting innovation and new
services coming to market.
International markets moving ahead at
pace with some already launching
initial services. Spark leading out on
investment and moving ahead to ensure
New Zealand is not left behind.
Spark having to make decisions in
absence of any clear government
policy on when spectrum will be
available and in what bands
Allocation processes for spectrum
needs to be completed as soon as
possible as Spark continues to have to
make decisions contingent on securing
additional 5G spectrum.
Disappointed with initial GCSB
decision in relation to proposed use of
Huawei RAN equipment in Spark’s 5G
network. Still in discussions, have yet to
make any decision on whether or
when we should submit a revised
proposal to GCSB. However,
confident that this will not affect plans
to launch 5G network as Spark is
multi-vendor capable.
Spark expects to fund the first phase
of 5G network development
(excluding spectrum) within its existing
capital expenditure envelope of
11%-12% of revenues.

Broadband revenues returned to growth despite modest connection decline in a challenging and
saturated market
(1)
. Further margin expansion as migration to wireless broadband services
continues
Product Performance
Broadband
Broadband market remains challenged; tier 2 players continue to offer
aggressive price based bundles to secure growth in a saturated market
(1)
; 2018
market connection growth of ~3% was the lowest in more than7 years
In this environment Spark successfully returned to broadband revenue growth up
$13m (3.9%) on prior year due to:
•Increase in retail price of copper plans and cessation of acquisition credits
alongside launch of innovative ‘Unplan’; and
•Ongoing increase in unlimited customer base with unlimited plans now
accounting for 60% of base – up 7pp on prior year
Broadband gross margin expansion continues; up $10m (6.3%) driven by
revenue growth and:
•Launch of ‘Unplan’ driving another wave of wireless broadband uptake; now
at 129k connections, delivering a further $8m reduction in broadband access
costs during the period and ~$62m of annualised gross benefits; partially
offset by
•Higher non-standard fibre install costs across both consumer and business; and
•Increases in copper and fibre input costs
Despite overall Spark connection decline (down 2k in H1) growth in SME and
Skinny sub-brand connections continues. Skinny propositions, supported by lower
cost to serve and fewer inclusions, continue to resonate with price-sensitive
customers
Customer demand for data steadily rising; with average monthly data usage per
connection of ~150GB up 13.4%
(2)
on prior year
11
(1)
Based on independent market growth estimates
(2)
Excludes Skinny, Bigpipe and Digital Island
74%
55%
42%
0%
20%
40%
60%
80%
100%
H1 FY17H1 FY18H1 FY19
Connection mix by input type
copperfibrewireless broadband
26%
45%
58%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
2012201320142015201620172018
Broadband market connection growth

Product Performance
Cloud, security and service management
Revenue growth fuelled by continued adoption of cloud services; further expansion in gross
margin reflecting service management efficiency gains
Toplinerevenue growth of $16m (8.9%) however momentum has
slowed. Ongoing demand and volume growth being partially offset by:
•Emerging price pressure on renewals driven by increased competition
from local and global providers;
•Customer transitions proving to be slower and more complex as we
move into ‘middle-market’ segment of the adoption curve for cloud;
and
•Delayed roll-out of new digital workplace and security offerings due
to refinement of customer proposition
Fundamental drivers of revenue growth continue to be:
•Long pipeline of organic sales opportunities due to relatively low
market penetration; and
•Global trends favouring cloud solutions
However due to emergence of moderating influences we are revising
our FY19 revenue growth aspiration from 15% to 10%
Contribution margin
(1)
of 36.9% in line with H1 FY18 but down on H2
FY18 due to cyclical nature of project completion and customers moving
to run state
Ongoing performance will be supported by a focus on:
•Product development for new market segments;
•Attracting skilled resources; and
•Continuing to mature our sales processes
12
150
166
179
191
195
H1 FY17H2 FY17H1 FY18H2 FY18H1 FY19
$m
Cloud, security and service management revenue
+8.9%
(1)
Contribution margin is defined as reported gross margin less labour and other costs that are directly attributable to the implementation and ongoing support of specific contract services

Product Performance
Voice, Managed Data and Networks
Acceleration in rate of voice revenue decline as expected; due to impact of increased Wholesale
connection churn seen during H2 FY18. Proactive migration away from traditional products
driving improvement in managed data margins
Total voice, managed data and networks revenue declined by $51m (12.8%) on prior year;
versus $54m (12.0%) YoY decline in H1 FY18.
H1 FY19 voice revenue
(1)
decline of $43m (14.7%) - versus prior period decline of $46m
(13.6%)- due to:
•$27m (19.9%) decrease in landline only
(2)
revenues primarily due to full period impact of
a large wholesale customer migrating away from PSTN to an alternative technology
during H2 FY18; and
•$11m (11.2%) decrease in higher-margin calling revenues due to a 18% YoY decline in
total calling minutes
Voice product costs down $12m (11.5%) principally due to connection decline and lower
international calling costs in line with reduced total calling minutes
Wireless voice connection growth of 4k (28.6%) to 18k slower than expected; due to
challenges in identifying the optimal sales approach to voice only customer base. Currently
lagging behind growth aspiration to double base to 30k by the end of FY19; however we
intend to accelerate wireless voice connections in H2
Managed data and networks revenue decline of $8m (7.7%) consistent with YoY decline
seen in H1 FY18. However gross margin percentage up 1.2pp on prior year, to 53.1%, due
to:
•Proactive migration of customers off legacy data platforms - onto new lower-margin
fibre based alternatives largely complete; and
•Cost to serve benefits of support systems launched in FY18 - offering customers better
self-service and improved customer experience. Delivery of WAN services reduced by
45+ days
Foundational customer experience and delivery work complete - focus now shifting to
stabilisation of churn
13
(1)
Voice revenue includes connections delivered over the mobile network (Voice over wireless)
(2)
Landline only revenue includes revenue from ‘voice only’ access plans
451
397
346
100
200
300
400
500
H1 FY17H1 FY18H1 FY19
Total voice and managed data and networks revenue
VoiceManaged data and networks
339
293
250
100
200
300
400
H1 FY17H1 FY18H1 FY19
$m
Total voice revenue by customer segment
ConsumerBusinessWholesale and other

Strategy: Progress Update
Spark Sport
Creating a future-focussed sports media business that meets the evolving needs of New
Zealand sports viewers
14
Targeting commercial returns,
rather than retention or
acquisition benefits
Disciplined investment approach
with considered moves into sports
content; focused on a package of
rights that can be commercialised
with confidence
Well-balanced portfolio of initial
content secured, demonstrating
Spark’s ambition to become a key
player in the local sports market
and a provider of international
sports coverage
Cloud and App based platform
minimises fixed cost infrastructure
and costly investment in set-top
boxes
Platform build tracking to plan
with internal testing underway
Contracted a world-class streaming
partner iStreamPlanet; currently
supporting large scale international
sporting codes and events such as:
•Super Bowl
•NBA League Pass; and
•Winter Olympics
Expect to launch beta version in
early March 2019, in time for
streaming F1 Australian Grand Prix
which will be simulcast on TVNZ
On track to have platform stress
tested and ready for Rugby World
Cup 2019
Pricing for Spark Sport service
(excl. RWC 2019) announced
today
Spark Sport subscriptions will be
$19.99 per month, with a one-
month free trial available at launch
Pricing and packages for Rugby
World Cup 2019 will be announced
and on sale early in Q4 FY19 once
the service is out of beta

15
Strategy: Progress Update
Quantum: Agile Ways of Working
Full implementation of scale Agile operating model now complete. Focus shifting to optimisation
and maturing of ways of working
Agile transformation providing foundation for a sustained long-term competitive advantage.
•Customer excluded from internal design and build
process
•Traditional hierarchical approach
•Pilot in 9 months
•Migration underway in 12 months
•8 schools migrated a day
•Migration completed after 40 months
Pre-Agile
•Customer involved in squad
•Collaborative design and build approach
•Pilot in 5 weeks
•Migration underway in 6 months
•16 schools migrated a day
•Migration on schedule to complete in 14 months
Post-Agile
Case Study: Network for Learning (N4L) migration
Network for learning have partnered with Spark to provide network connectivity to schools across NZ
•2,400+ schools serviced by N4L network, 825k+ users per school day
"Previously we had to liaise with many different people across different Spark teams, and we had concerns there wasn't the focusor urgency given to key
projects. Today we are dealing with one multi-disciplinary team and we are making important decisions together, collaborating inreal time, and resolving
issues as they arise. There is full transparency and we now see this as one of our most positive and productive partnerships."
LarrieMoore, N4L CEO
Significant improvement in Managed Data tribe eNPSnow at world class level above 70 (~30 before Agile transformation)

Capital Management
Capital Expenditure
Capital envelope continues to provide sufficient capacity to execute strategy, with FY19
investment weighted towards H1 as expected
Plant, network and core sustain includes ongoing fibre build
programmes and investments in Spark-owned properties.
IT systems investment to enhance product offerings, improve
customer experience and maintain business operations.
Mobile investment of $89m in line with H1 FY18 expenditure,
with the single radio access network (SRAN) programme
completed in H1 FY19.
Multi-year Converged Communication Network (CCN) investment
will replace the legacy PSTN network and enable the delivery
of future IP based voice services
International cable includes capacity purchases on Southern
Cross cable and investment in Tasman Global Access cable
Continue to operate within annual capital expenditure envelope
of between 11% to 12% of operating revenues
16
(1)
IT systems includes investments in core IT systems and Telecommunications-as -a- Service
(2)
Mobile includes investment in standalone mobile assets including capacity in support of wireless
broadband
(3)
Other includes store refits, Lightbox, Qrious, IoT and Morepork
CapitalExpenditure ($m)
H1
FY18
H1
FY19
Plant, network, core sustain and resiliency38 36
IT systems
(1)
64 70
Mobile
(2)
89 89
Cloud19 26
Other
(3)
21 12
Converged Communications Network17 20
International cable construction and capacity14 11
Total CAPEX262264
Total CAPEX to operating revenue 14.9%15.1%

17
$667m
60%
CapitalManagement
Cash flow
Underlying free cash flow
(1)
up $36m or 33% on H1 FY18; benefits generated by
Quantum programme more than offsetting diminishing, and currently withheld,
Southern Cross dividends
(1)
For further information refer to appendix 3
Key components of $36m growth in underlying
free cash flow
(1)
between H1 FY18 and H1 FY19
Net cash flow from operating activities minus
movements in working capital and dividends
received from Southern Cross
Predominantly driven by EBITDAI growth - due to gross
margin expansion and benefits of Quantum Programme
$58m
Payments for purchase of property, plant, equipment
and intangibles
Increase in cash payments for capital assets due to
timing of FY18 purchases – H1 FY19 cash payment of
$258m was in line with reported capital expenditure of
$264m
($22m)
Net payments for leases including customer
equipment assets
No YoY change in cash payments; stable at $23m in
both H1 and H2 of each financial year
-
$m
133
224
110
199
146
22
44
7
43
0
50
100
150
200
250
300
H1 FY17H2 FY17H1 FY18H2 FY18H1 FY19
Cash flow excluding movements in working capital
Underlying free cash flowSouthern Cross dividend

1,158
1,164
1,247
1,290
6
83
23
15
5
1,050
1,100
1,150
1,200
1,250
1,300
H2 FY18Business acquisitions and minority investmentsTop-up of dividendMo vem ent in devic e receivable balanceMo vem ent in ot her w orking capitalTiming o f tax and ot her m isc. mo vem entsH1 FY19
Movement in Net Debt during H1 FY19
Spark’s net debt
(3)
to EBITDAI ratio of ~1.2x is consistent with:
•Our ongoing commitment to maintain an A- S&P credit rating; and
•Spark’s internal capital management policy to ensure that on a long-run basis
reported net debt
(3)
to EBITDAI does not exceed 1.4x; which Spark estimates is
approximately equivalent to Standards & Poors’ 1.5x
(6)
adjusted debt to
EBITDAI threshold under Spark’s A- credit rating. Spark’s internal threshold of
1.4x accounts for Standard & Poor’s adjustmentsin relation to Spark’s captive
finance operations
(7)
.
During H1 FY19 Spark adopted the new NZ IFRS 15 and NZ IFRS 16 accounting
standards. While adoption of these standards has altered the presentation of
Spark’s financials - as summarised in appendix 1 -Spark’s Standard & Poors’ A-
credit rating remains unchanged.
The rate of net debt growth is expected to slow significantly in H2 FY19 as:
•Earnings growth provides additional funding headroom;
•Application of refreshed working capital policies improves underlying cash
conversion; and
•Mobile device inventory is reduced
(1)
Miscellaneous movements include adjustments for fair value estimate of debt and timing of interest, capex and
lease payments
(2)
Dividend top calculated as total dividends paid less underlying free cash flow and dividends received from
Southern Cross
(3)
Net debt at hedged rates as reported in note 6 of Spark’s FY19 Interim Financial Statements
(4)
Calculated as total H1 FY19 increase in working capital of $38m less H1 FY19 increase in mobile device
receivable balance of $23m
(5)
Drivers of movement in working capital movements are outlined further in appendix 2
(6)
Includes adjustments for leases, share based compensations, a 25% reduction in reported cash and captive finance
operations
(7)
As at 30 June 2018 equates to approximately 0.1x reduction in Spark’s adjusted debt to EBITDAI ratio
Capital Management
Net Debt
Current net debt to EBITDAI ratioof ~1.2x continues to provide sufficient debt headroom within our S&P A-credit
rating; with net debt increasing by $132m during H1 FY19 primarily due to payment of dividends and continued
growth in device receivable balance
H1
FY19
(2)
$m
Business
acquisitions and
minority
investments
Top-up of
dividends
paid
Movement
in device
receivable
balance
Timing of tax
and other
misc.
mvmts.
(1)
Movement
in other
working
capital
(3)
Total movement in
working capital
$38m
H2
FY18
(2)
Various minority investments
Dividend top-up
(2)
$29m less than H1 FY18 due to growth in underlying free
cash flow; partially offset by decline in cash dividends received from
Southern Cross. Debt support for dividend higher in H1 of each financial
year with only ~37% of full year cashflow normally delivered during H1
Ongoing growth in device receivable balance due to increases in both the
average retail price of mobile devices and the volume of accessories sold
via a deferred payment arrangement
Increase in other working capital
(4) (5)
due to:
•Increased mobile device inventory; and
•Payment of Quantum implementation costs recognised in FY18; partially
offset by
•Cyclical nature of payment due dates for a key supplier
$6m
$83m
$23m
$15m
18

19
FY18 Actual
(2)
FY19 Guidance
(1) (2)
Change to previous FY19 Guidance
Reported
Adjusted
excludingQuantum
implementation costs
Total
Revenues
$3,533m$3,530m to $3,600m-
EBITDAI$981m$1,030m$1,065m to $1,095m-
Capex
(3)
$413m~$410m-
Earnings
per Share
19.9c21.8c22c to 23c-
Dividend
per Share
Total 25.0cps
75% imputed
Total 25.0cps
at least 75% imputed
(4)
-
(1)
Guidance subject to no adverse change in operating outlook
(2)
Includes restatements for: new approach to disclosure of Spark’s long-term investments; and adoption of NZ IFRS 15 and NZ IFRS 16 accounting standards
(3)
Includes purchase of property, plant and equipment and intangible assets, capacity purchases (including Southern Cross) but excludes leased customer equipment assets
(4)
Likely to be made up of an ordinary dividend determined by earnings, topped up by a special dividend to maintain a total dividend per share of 25.0c
FY19 Outlook
Guidance
(1)
FY19 guidance unchanged.However, if Southern Cross dividends continue to be withheld as pre-funding for
build of Southern Cross Next cable then FY19 earnings per share -and associated FY19 guidance - will reduce
by ~1c.A market update will be provided in the event that Southern Cross dividends are withheld for the
remainder of FY19

20
MeasuresTarget
30 June 2019
StatusRevised Target
30 June 2019
Technology
evolution
Clear pathway to 5G including spectrumentitlementsby end of H2On Track but Government
decisions needed for auction
commencement
-
Proportion of broadband customers off copper60%On Track-
Launch of wireless broadband and Voice over LTE (VoLTE) products to rural
customers using the RuralConnectivity Group (RCG) network
by end of H2On Track-
PSTN exchange closures completed during FY19at least a further 100 closuresOn Track-
Voice-only copper connections substituted to wirelessdouble connections to 30kImprovement Needed-
Sports media service tested and ready for RWC deliveryby end of H2On Track-
Ways of
working
Full implementation of scaleAgile operating modelby end of H1Completed-
Percentage of Agile squads at or above level 3 Agile maturity80%On Track-
Diverse and inclusive workplace showing through in employee NPS7 point liftAhead-
Annualised net labour costs at $470m or lessby end of H1Delivered-
Digital and
data
adoption
Percentage of new customer journeys implemented digital first85%On Track-
Reductionin monthly Customer Care workload minutes
(1)
10% to 15%Ahead-
Winning in
market
Spark consumer market NPS5 pointliftOn Track-
Total mobile service revenue growth5%Target Revised3%
Cloud, security and service management revenue growth15%Target Revised10%
Number of Internet of Things products launched4 to 6On Track-
Increase in number of customers actively using two or more digital services15%Ahead-
FY19 Outlook
Indicators of Success
(1)
Workload minutes defined as interactions answered x average handling time

Appendices
21

22
Appendix 1
Adoption of IFRS 15 and IFRS 16
Reported
excludingimpacts from new
disclosures
Adoption of NZ IFRS 15
Revenue from contracts with
customers
Adoption of NZ IFRS 16
Leases
Change in disclosure of
Spark’s long-term investments
Restated
includingimpacts from new
disclosures
FY17
$m
FY18
$m
FY17
$m
FY18
$m
FY17
$m
FY18
$m
FY17
$m
FY18
$m
FY17
$m
FY18
$m
Operating revenues and other gains3,6143,649(50)(69)23(61)(50)3,5053,533
Operating expenses(2,594)(2,657)26397066--(2,498)(2,552)
Share of associates’ (4)(3)----43--
EBITDAI1,016989(24)(30)7269(57)(47)1,007981
Depreciation and amortisation(430)(434)--(52)(47)--(482)(481)
Net investment income------57475747
Finance income1616141811--3135
Finance expense(42)(46)--(33)(31)--(75)(77)
Net earnings before income tax560525(10)(12)(12)(8)--538505
Tax expense(142)(140)-
-----(142)(140)
Net earnings after income tax418385(10)(12)(12)(8)--396365
EBITDAI Margin (%)28.127.128.727.8
Earnings per share (cents)22.821.0(0.5)(0.7)(0.7)(0.4)--21.619.9
The resulting impact on reported FY17 and FY18 earnings is summarised below

71
46
(45)
55
38
(60)
(40)
(20)
0
20
40
60
80
H1 FY17H2 FY17H1 FY18H2 FY18H1 FY19
Movement in working capital
(2)
23
$667m
60%
Appendix 2
Working Capital
H1 FY19 cash conversion ratio
(1)
of 92% remains in line with expected full year conversion
ratio of 95%; underlying improvements in cash conversion partially offset by timing of
Quantum implementation costs and increased mobile device inventory
(1)
Calculated as net cash flow from operations (excluding tax, dividend receipts and interest) divided
by EBITDAI (excluding impairments and net gains from divestments)
(2)
Calculated as EBITDAI (excluding impairments and net gains from divestments)less operating cash-
flow (excluding tax, dividend receipts and interest)
(3)
Retail price includingGST
Key components of movement in working capital
(2)
during H1 FY19
Device receivable
Slowing rate of growth (versus H1 FY18 increase of $29m) due to:
•Increase in average price of mobile devices -demonstrated by 8pp
increase in proportion of deferred mobile device purchases sold at
a retail price
(3)
of $1,500 or more; and
•Increase in volume of accessories and other consumer devices
purchased via deferred payment; partially offset by
•3% YoY reduction in volume of mobile devices purchased via
deferred payment – due to emergence of longer consumer refresh
cycles
$23m
Prepayments and accruals
Biennial software licence renewals and payments for content ahead of
Spark Sports launch – with content only classified as inventory once it is
available for distribution
$20m
IT services contracts
Primarily due to a cash neutral reclassification from receivables - to
more accurately reflect contract assets
$18m
Timing of payables and receivables
Mostly driven by:
•Underlying cyclical nature of payment due dates for a key
supplier; and
•Cash neutral reclassification from receivables - to more accurately
reflect contract assets; partially offset by
•Payment of Quantum implementation costs recognised in H2 FY18
($55m)
Inventory
Slower than expected sales ofhigh-capacity flagship mobile devices;
due to emergence of a consumer ‘price ceiling’
$32m
Cash conversion
ratio
(1)
85%
91%
110%
90%
$m
92%

24
Appendix 3
Cash flow
Following adoption of new accounting standards and changes to the disclosure of
Spark’s long-term investments Spark has introduced a new measure to better
communicate cash flow
H1
FY17
$m
H2
FY17
$m
H1
FY18
$m
H2
FY18
$m
H1
FY19
$m
Net cash flows from operations
320438426394393
Payments for purchase of property,
plant, equipment and intangibles
(211)(187)(236)(178)(258)
Payments for capitalised interest
(2)(4)(4)(4)(3)
Payments for leases
(17)(17)(17)(17)(17)
Payments for leased customer
equipment assets
(7)(8)(8)(9)(8)
Receipts from finance leases
1-111
excluding
(Increase)/decrease in working
capital
(1)
(71)(46)45 (55)(38)
Dividends received from Southern
Cross
22 44 7 43 -
Underlying free cash flow
133224110199146
(1)
Calculated as EBITDAI (excluding impairments and net gains from divestments)less operating cash-flow (excluding tax, dividend receipts and interest)
When first announced, this measure specifically
excluded payments for the purchase of spectrum.
However it has since been refined to also
exclude:
•All movements in working capital
(1)
including
the intermittent YoY cash flow impact (of
over $80m) resulting from cyclical payment
due dates for a key supplier; and
•Southern Cross dividends - to provide a
clearer view of cash flow generated by the
operational activities of the business
The refined measure will be identified as
“underlying free cash flow” and will be provided
as part of ongoing external financial reporting
To enable reconciliation of this measure to
Spark’s cash flow statement, a new category has
been created within Spark’s cash flow statement
called “payments for purchase of spectrum”

Disclaimer
25
This announcement may include forward-looking statements regarding future events and the future financial
performance of Spark New Zealand. Such forward-looking statements are based on the beliefs of and assumptions
made by management along with information currently available at the time such statements were made.
These forward-looking statements may be identified by words such as ‘guidance’, ‘anticipate’, ‘believe’, ‘estimate’,
‘expect’, ‘intend’, ‘will’, ‘plan’, ‘may’, ‘could’, ‘ambition’, ‘aspiration’ and similar expressions. Any statements in this
announcement that are not historical facts are forward-looking statements. These forward-looking statements are not
guarantees or predictions of future performance, and involve known and unknown risks, uncertainties and other
factors, many of which are beyond Spark New Zealand’s control, and which may cause actual results to differ
materially from those projected in the forward-looking statements contained in this announcement.
Factors that could cause actual results or performance to differ materially from those expressed or implied in the
forward-looking statements are discussed herein and also include Spark New Zealand's anticipated growth
strategies, Spark New Zealand's future results of operations and financial condition, economic conditions and the
regulatory environment in New Zealand, competition in the markets in which Spark New Zealand operates, risks
related to the sharing arrangements with Chorus, other factors or trends affecting the telecommunications industry
generally and Spark New Zealand’s financial condition in particular and risks detailed in Spark New Zealand's
filings with NZX and ASX. Except as required by law or the listing rules of the stock exchanges on which Spark New
Zealand is listed, Spark New Zealand undertakes no obligation to update any forward-looking statements whether
as a result of new information, future events or otherwise.

Spark New Zealand
Group result - reported
H1 FY17H2 FY17H1 FY18H2 FY18H1 FY19
$m$m$m$m$m$m%
Operating revenues and other gains1,7381,7671,7611,7721,754(7)(0.4%)
Operating expenses(1,273)(1,225)(1,305)(1,247)(1,265)40(3.1%)
EBITDAI465542456525489337.2%
Depreciation and amortisation expense(242)(240)(237)(244)(245)(8)3.4%
Net investment income33242720-(27)(100.0%)
Finance income1615161918212.5%
Finance expense(37)(38)(37)(40)(40)(3)8.1%
Net earnings before income tax235303225280222(3)(1.3%)
Tax expense(65)(77)(63)(77)(69)(6)9.5%
Net earnings for the period170226162203153(9)(5.6%)
Capital expenditure22419126215126420.8%
Underlying free cash flows1332241101991463632.7%
Reported EBITDAI margin26.8%30.7%25.9%29.6%27.9%2.0%7.7%
Reported effective tax rate27.7%25.4%28.0%27.5%31.1%3.1%11.1%
Capital expenditure to operating revenues12.9%10.8%14.9%8.5%15.1%0.2%1.3%
Reported basic and diluted earnings per share (cents)9.312.38.811.18.3(0.5)(5.7%)
Group result - adjusted
H1 FY17H2 FY17H1 FY18H2 FY18H1 FY19
$m$m$m$m$m$m%
Operating revenues and other gains1,7381,7671,7611,7721,754(7)(0.4%)
Adjusted operating expenses(1,273)(1,225)(1,292)(1,211)(1,265)27(2.1%)
Adjusted EBITDAI465542469561489204.3%
Depreciation and amortisation expense(242)(240)(237)(244)(245)(8)3.4%
Net investment income33242720-(27)(100.0%)
Finance income1615161918212.5%
Finance expense(37)(38)(37)(40)(40)(3)8.1%
Adjusted net earnings before income tax235303238316222(16)(6.7%)
Adjusted tax expense(65)(77)(67)(87)(69)(2)3.0%
Adjusted net earnings for the period170226171229153(18)(10.5%)
Adjusted EBITDAI margin26.8%30.7%26.6%31.7%27.9%1.3%4.9%
Adjusted effective tax rate27.7%25.4%28.2%27.5%31.1%2.9%10.3%
Adjusted basic and diluted earnings per share (cents)9.312.39.312.58.3(1.0)(10.8%)
H1 FY18 v H1 FY19
Spark presents adjusted EBITDAI and adjusted net earnings when the year includes significant items greater than $25 million.
FY18 included $49 million of costs of change and adjusted EBITDAI and adjusted net earnings are as follows:
H1 FY18 v H1 FY19
The tax effect on costs of change in H1 FY18 is $4m and in H2 FY18 is $10m. There were no adjusting items in FY17.

Spark New Zealand
Gross margin by product
H1 FY17H2 FY17H1 FY18H2 FY18H1 FY19
$m$m$m$m$m$m%
Mobile341363356376376205.6%
Voice221204189180158(31)(16.4%)
Broadband146152158157168106.3%
Cloud, security and service management129144152163163117.2%
Procurement and partners222317231815.9%
Managed data and networks6263545751(3)(5.6%)
Other2251253425--%
Total Spark Group9431,00095199095980.8%
Connections
H1 FY17H2 FY17H1 FY18H2 FY18H1 FY19
000's000's000's000's000's000's%
Mobile connections2,3532,3922,4372,4582,464271.1%
Voice connections by type
1
POTS & ISDN629567491400356(135)(27.5%)
VoIP41444752571021.3%
Voice over wireless-11141418428.6%
670622552466431(121)(21.9%)
Broadband connections
Copper497431384346296(88)(22.9%)
Fibre1381722062382736732.5%
Wireless40841041161292524.0%
67568769470069840.6%
Group FTE's
H1 FY17H2 FY17H1 FY18H2 FY18H1 FY19#%
FTE permanent5,6645,5545,3845,2665,107(277)(5.1%)
FTE contractors 279220230241212(18)(7.8%)
Total FTE5,9435,7745,6145,5075,319(295)(5.3%)
Dividends
H1 FY17H2 FY17H1 FY18H2 FY18H1 FY19$%
Ordinary dividends (cents per share)11.0011.0011.0011.0011.00--%
Special dividends (cents per share)1.501.501.501.501.50--%
12.5012.5012.5012.5012.50--%
H1 FY18 v H1 FY19
H1 FY18 v H1 FY19
H1 FY18 v H1 FY19
1
Voice connections include all voice technology types, including POTS, ISDN, VoIP and wireless voice. Voice connections
exclude connections where Spark also provide a bundled broadband service, but include all wholesale voice connections
(including those where the underlying customer has a bundled broadband service).
H1 FY18 v H1 FY19

Spark New Zealand
Group operating revenues and other gains
H1 FY17H2 FY17H1 FY18H2 FY18H1 FY19
$m$m$m$m$m$m%
Operating revenues
Mobile
Service revenue37939339540040382.0%
Non-service revenue19719821822421910.5%
57659161362462291.5%
Voice
Access160149136124109(27)(19.9%)
Calling112105989587(11)(11.2%)
Videoconferencing2828262925(1)(3.8%)
Other voice revenue3936333229(4)(12.1%)
339318293280250(43)(14.7%)
Broadband337336331334344133.9%
Cloud, security and service management150166179191195168.9%
Procurement and partners17817318417319173.8%
Managed data and networks11211310410396(8)(7.7%)
Other operating revenue4650575756(1)(1.8%)
Total operating revenues1,7381,7471,7611,7621,754(7)(0.4%)
Other gains-20-10--NM
Total operating revenues and other gains1,7381,7671,7611,7721,754(7)(0.4%)
Wireless broadband revenues and connections are included in broadband revenues and connections.
Operating revenues and other gains by customer segment
H1 FY17H2 FY17H1 FY18H2 FY18H1 FY19
Operating revenues and other gains$m$m$m$m$m$m%
Consumer78778178678779040.5%
Business83584986686686710.1%
Wholesale and other135157128142118(10)(7.8%)
Eliminations(19)(20)(19)(23)(21)(2)10.5%
1,7381,7671,7611,7721,754(7)(0.4%)
Net investment income
H1 FY17H2 FY17H1 FY18H2 FY18H1 FY19
Net investment income$m$m$m$m$m$m%
Dividend income35262822-(28)(100.0%)
Share of associates' and joint ventures' net losses(2)(2)(1)(2)-1(100.0%)
33242720-(27)(100.0%)
Finance income
H1 FY17H2 FY17H1 FY18H2 FY18H1 FY19
Finance income$m$m$m$m$m$m%
Finance lease interest income87777--%
Other interest income8891211222.2%
1615161918212.5%
H1 FY18 v H1 FY19
H1 FY18 v H1 FY19
H1 FY18 v H1 FY19
H1 FY18 v H1 FY19

Spark New Zealand
Revenue classification changes
Product nameServices providedPrevious categoryNew category
Cellphone insuranceOther operating revenueMobile service revenue
VoIP revenueVoice calling revenueVoice access revenue
Value added voice
services
Voice calling revenueOther voice revenue
Managed internetBroadband revenueManaged data revenueProvision of internet services for a
managed data network
Additionally, the split of revenues between cloud, security and service management and procurement and partners has also
been reviewed. The majority of reallocation relates to the treatment of revenue from subsidiaries.
As part of the adoption of the Agile business model, the management of certain product lines have been reallocated from one
part of the business to another. The details of the key changes and the associated impact on revenue reporting are as
Insurance coverage for accidental loss
or damage to purchased Mobile
devices
Provision of voice services over an
internet based connection
Additional services over a voice line
such as call diversion, caller
identification and other smartphone
services

Spark New Zealand
Group operating expenses
H1 FY17H2 FY17H1 FY18H2 FY18H1 FY19
$m$m$m$m$m$m%
Product costs
Mobile235228257248246(11)(4.3%)
Voice11811410410092(12)(11.5%)
Broadband19118417317717631.7%
Cloud, security and service management2122272832518.5%
Procurement and partners15615016715017363.6%
Managed data and networks5050504645(5)(10.0%)
Other product costs2419323331(1)(3.1%)
795767810782795(15)(1.9%)
Labour278272276237250(26)(9.4%)
Other operating expenses
Network support costs3129313137619.4%
Computer costs4042414346512.2%
Accommodation costs2625322937515.6%
Advertising, promotions and communication4128513347(4)(7.8%)
Bad debts99796(1)(14.3%)
Impairment expense2-1654NM
Costs of change--1336-(13)(100.0%)
Other5153434142(1)(2.3%)
20018621922822010.5%
Total operating expenses1,2731,2251,3051,2471,265(40)(3.1%)
Depreciation and amortisation expense
Depreciation - property, plant and equipment122128129134128(1)(0.8%)
Depreciation - right-of-use assets272624262514.2%
Depreciation - leased customer equipment assets88889112.5%
Amortisation of intangibles857876768379.2%
24224023724424583.4%
Finance expense
Finance expense on long-term debt212325282728.0%
Capitalised interest(2)(3)(4)(4)(4)--%
Lease interest expense1616151415--%
Leased customer equipment interest expense221221100.0%
373837404038.1%
Adjusted operating expenses
H1 FY17H2 FY17H1 FY18H2 FY18H1 FY19
$m$m$m$m$m$m%
Total operating expenses1,2731,2251,3051,2471,265(40)(3.1%)
Less: costs of change--(13)(36)-13(100.0%)
Adjusted operating expenses1,2731,2251,2921,2111,265(27)(2.1%)
H1 FY18 v H1 FY19
H1 FY18 v H1 FY19

Spark New Zealand
Analysis & KPI's - Mobile
H1 FY17H2 FY17H1 FY18H2 FY18H1 FY19
Mobile revenue by type (Consumer and Business)$m$m$m$m$m$m%
Mobile service revenue372385388395398102.6%
Mobile non-service revenue
1
189187208210206(2)(1.0%)
56157259660560481.3%
151917191815.9%
Total mobile revenue57659161362462291.5%
Mobile product costs
3
(235)(228)(257)(248)(246)11(4.3%)
Mobile gross margin341363356376376205.6%
Mobile gross margin %59.2%61.4%58.1%60.3%60.5%2.4%4.1%
H1 FY17H2 FY17H1 FY18H2 FY18H1 FY19
Total mobile revenue by customer segment$m$m$m$m$m$m%
Consumer369379397409410133.3%
Business192193199196194(5)(2.5%)
Wholesale and other151917191815.9%
57659161362462291.5%
Average revenue per user (ARPU) - 6 month activeH1 FY17H2 FY17H1 FY18H2 FY18H1 FY19
Consumer and Business
$ per
month
$ per
month
$ per
month
$ per
month
$ per
month
$ per
month%
Total ARPU27.4527.2727.5827.2527.56(0.02)(0.1%)
Pay-monthly ARPU45.0545.0244.2943.3142.82(1.47)(3.3%)
Prepaid ARPU11.6511.7512.2012.1312.290.090.7%
H1 FY17H2 FY17H1 FY18H2 FY18H1 FY19
000's000's000's000's000's000's%
Pay-monthly connections1,0851,1081,1581,1891,225675.8%
Prepaid connections1,2311,2481,2451,2361,206(39)(3.1%)
Internal connections44444--%
Total mobile connections2,3202,3602,4072,4292,435281.2%
1
Mobile non-service revenue includes handset sales and mobile interconnect.
2
Includes MVNO revenue.
3
Includes handset, interconnect and cellphone tower access costs.
Number of mobile connections at period end - 6
month active - Consumer and Business
H1 FY18 v H1 FY19
H1 FY18 v H1 FY19
Wholesale and other customer segment mobile
revenue
2
H1 FY18 v H1 FY19
H1 FY18 v H1 FY19

Spark New Zealand
Analysis & KPI's - Voice
H1 FY17H2 FY17H1 FY18H2 FY18H1 FY19
Voice revenue by type$m$m$m$m$m$m%
Access160149136124109(27)(19.9%)
Calling112105989587(11)(11.2%)
Videoconferencing2828262925(1)(3.8%)
Other voice revenue3936333229(4)(12.1%)
Total voice revenue339318293280250(43)(14.7%)
Voice product costs
1
(118)(114)(104)(100)(92)12(11.5%)
Voice gross margin221204189180158(31)(16.4%)
Voice gross margin %65.2%64.2%64.5%64.3%63.2%(1.3%)(2.0%)
H1 FY17H2 FY17H1 FY18H2 FY18H1 FY19
000's000's000's000's000's000's%
POTS and ISDN629567491400356(135)(27.5%)
VoIP41444752571021.3%
Voice over wireless-11141418428.6%
Total voice connections670622552466431(121)(21.9%)
H1 FY17H2 FY17H1 FY18H2 FY18H1 FY19
000's000's000's000's000's000's%
Consumer124124118108104(14)(11.9%)
Business211198185180177(8)(4.3%)
Wholesale and other335300249178150(99)(39.8%)
Total voice connections670622552466431(121)(21.9%)
1
Includes voice access (baseband), interconnect, international calling and videoconferencing platform costs.
Analysis & KPI's - Broadband
H1 FY17H2 FY17H1 FY18H2 FY18H1 FY19
$m$m$m$m$m$m%
Total broadband revenue337336331334344133.9%
Broadband product costs
2
(191)(184)(173)(177)(176)(3)1.7%
Broadband gross margin146152158157168106.3%
Broadband gross margin %43.3%45.2%47.7%47.0%48.8%1.1%2.3%
H1 FY17H2 FY17H1 FY18H2 FY18H1 FY19
000's000's000's000's000's000's%
Copper497431384346296(88)(22.9%)
Fibre1381722062382736732.5%
Wireless40841041161292524.0%
Total broadband connections67568769470069840.6%
H1 FY17H2 FY17H1 FY18H2 FY18H1 FY19
000's000's000's000's000's000's%
Consumer589597601604598(3)(0.5%)
Business869092959866.5%
Wholesale and other--1121100.0%
Total broadband connections67568769470069840.6%
2
Includes broadband access (UBA/UCLL/Fibre), modem and e-mail platform support costs.
H1 FY18 v H1 FY19
Broadband connections by technology
H1 FY18 v H1 FY19
Broadband connections by segment
H1 FY18 v H1 FY19
H1 FY18 v H1 FY19
Voice connections by type
H1 FY18 v H1 FY19
Voice connections by customer segment
H1 FY18 v H1 FY19

Spark New Zealand
Analysis & KPI's - Cloud, Security and Service management
H1 FY17H2 FY17H1 FY18H2 FY18H1 FY19
$m$m$m$m$m$m%
Cloud, Security and Service managegement revenue150166179191195168.9%
Cloud, Security and Service management product costs(21)(22)(27)(28)(32)(5)18.5%
Cloud, Security and Service management gross margin129144152163163117.2%
Cloud, Security and Service management gross margin %86.0%86.7%84.9%85.3%83.6%(1.3%)(1.5%)
Contribution margin (approximated) %
1
34.0%44.6%36.9%46.6%36.9%-%-%
Analysis & KPI's - Procurement and Partners
H1 FY17H2 FY17H1 FY18H2 FY18H1 FY19
$m$m$m$m$m$m%
Procurement and partners revenue17817318417319173.8%
Procurement and partners product costs(156)(150)(167)(150)(173)(6)3.6%
Procurement and partners gross margin222317231815.9%
12.4%13.3%9.2%13.3%9.4%0.2%2.2%
Analysis & KPI's - Managed data and networks
H1 FY17H2 FY17H1 FY18H2 FY18H1 FY19
$m$m$m$m$m$m%
Managed data and networks revenue11211310410396(8)(7.7%)
Managed data and networks product costs
2
(50)(50)(50)(46)(45)5(10.0%)
Managed data and networks gross margin6263545751(3)(5.6%)
55.4%55.8%51.9%55.3%53.1%1.2%2.3%
2
Includes wide area network access, international data and network backhaul costs.
H1 FY18 v H1 FY19
1
Contribution margin is defined as reported gross margin less labour and other costs that are directly attributable to the
implementation and ongoing support of specific contract services.
H1 FY18 v H1 FY19
H1 FY18 v H1 FY19

Spark New Zealand
Statement of cash flows
H1 FY17H2 FY17H1 FY18H2 FY18H1 FY19
$m$m$m$m$m$m%
Cash flows from operating activities
Cash received from customers 1,724 1,686 1,768 1,721 1,770 20.1%
Interest receipts 14 15 16 18 18 212.5%
Dividend receipts 22 44 7 43 - (7)(100.0%)
Payments to suppliers and employees (1,328) (1,207) (1,266) (1,252) (1,314)(48)3.8%
Payments for income tax (79) (64) (70) (97) (44)26(37.1%)
Payments for interest on debt (18) (18) (14) (23) (22)(8)57.1%
Payments for interest on leases (14) (14) (14) (14) (13)1(7.1%)
Payments for interest on leased customer equipment
assets
(1) (2) (1) (2) (2)(1)100.0%
Net cash flows from operating activities 320 440 426 394 393 (33)(7.7%)
Cash flows from investing activities
Proceeds from sale of property, plant and equipment - 27 - 1 - -NM
Proceeds from long-term investments - 6 - - - -NM
Proceeds from sale of business - - - 8 - -NM
Payments for purchase of businesses (2) (2) (46) (5) - 46(100.0%)
Payments for, and advances to, long-term investments (2) (3) (6) (14) (6)--%
Payments for purchase of property, plant and
equipment and intangibles
(211) (187) (236) (178) (258)(22)9.3%
Payments for capitalised interest (2) (4) (4) (4) (3)1(25.0%)
Net cash flows from investing activities (217) (163) (292) (192) (267)25(8.6%)
Cash flows from financing activities
Net proceeds from debt 153 (25) 184 (10) 182 (2)(1.1%)
Payments for dividends (229) (229) (229) (229) (229)--%
Payments for leases (17) (17) (17) (17) (17)--%
Payments for leased customer equipment assets (7) (10) (8) (9) (8)--%
Receipts from finance leases 1 - 1 1 1 --%
Net cash flows from financing activities (99) (281) (69) (264) (71)(2)2.9%
Net cash flow 4 (4) 65 (62) 55
(10)(15.4%)
Opening cash position 52 56 52 117 55 35.8%
Closing cash position 56 52 117 55 110
(7)(6.0%)
Analysis & KPIs - Underlying free cash flows
H1 FY17H2 FY17H1 FY18H2 FY18H1 FY19
$m$m$m$m$m$m%
Net cash flows from operating activities320 440 426 394 393 (33)(7.7%)
Less: Payments for purchase of property, plant and
equipment and intangibles
(211) (187) (236) (178) (258) (22)9.3%
Less: Payments for capitalised interest(2) (4) (4) (4) (3) 1(25.0%)
Less: Payments for leases(17) (17) (17) (17) (17) --%
Less: Payments for leased customer equipment assets(7) (10) (8) (9) (8) --%
Plus: Receipts from finance leases1 - 1 1 1 --%
Less: Dividend receipts(22) (44) (7) (43) - 7(100.0%)
Movements in working capital71 46 (45) 55 38 83NM
Underlying free cash flow133 224 110 199 146 3632.7%
H1 FY18 v H1 FY19
Spark's free cash flow measure, defined as cash from operations minus net payments for leases, capital expenditure (excl.
spectrum), dividend receipts and movements in working capital, is reconciled below:
H1 FY18 v H1 FY19

Spark New Zealand
Group capital expenditure
H1 FY17H2 FY17H1 FY18H2 FY18H1 FY19
$m$m$m$m$m$m
%
Cloud2220192026
736.8%
Converged Communications Network (CCN)312171520
317.6%
International cable construction and capacity purchases 142014-11(3)(21.4%)
IT systems6052644970
69.4%
Mobile network6933892689
--%
Plant, network and core sustain and resiliency3631382436
(2)(5.3%)
Other2023211712
(9)(42.9%)
Total capital expenditure22419126215126420.8%
Analysis & KPI's - Capital expenditure depreciation and amortisation
H1 FY17H2 FY17H1 FY18H2 FY18H1 FY19
$m$m$m$m$m$m
%
Depreciation - property, plant and equipment122128129134128
(1)(0.8%)
Depreciation - right-of-use assets
1
8910109
(1)(10.0%)
Amortisation of intangibles857876768379.2%
Total capital expenditure depreciation and amortisation21521521522022052.3%
1
Includes depreciation on capacity right-of-use assets only as these are included within Spark’s definition of capital expenditure.
H1 FY18 v H1 FY19
Capital expenditure is presented on an accruals basis, and includes purchase of property, plant and equipment and intangible
assets, capacity purchases (including Southern Cross) but excludes leased customer equipment assets.
On adoption of NZ IFRS 16 Leases, assets associated with capacity arrangements which were previously recognised within
intangible assets have been reclassified to right-of-use assets. Payments for capacity purchases remain within Spark’s definition
of capital expenditure. Total depreciation on property plant and equipment, depreciation on capacity right-of-use assets and
amortisation of intangibles is reconciled below:
H1 FY18 v H1 FY19