Chorus HY 2019 results

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







STOCK EXCHANGE ANNOUNCEMENT

25 February 2019


Chorus 2019 half year result

The following are attached in relation to Chorus’ half year result for the period to 31
December 2018:

1. Media Release
2. Investor Presentation
3. Letter to investors
4. Management Commentary and Financial Statements (including auditor review
report)
5. NZX Results Announcement
6. NZX Distribution Notice

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



ENDS


For further information:


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

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

---

Chorus Limited
Level 10, 1 Willis Street
P O Box 632
Wellington
New Zealand

Email: company.secretary@chorus.co.nz

STOCK EXCHANGE ANNOUNCEMENT

25 February 2019


Chorus half year result

 Net profit after tax $30m (HY18: $47m)
 EBITDA $318m (HY18: $329m)
 Operating revenue of $489m (HY18: $499m)
 FY19 EBITDA and gross capex guidance remain unchanged
 Updates to FY19 guidance for fibre and copper capex categories
 Interim fully imputed dividend 9.5 cents per share
 Record 95,000 fibre installations in six months to end of December
 529,000 fibre connections (FY18: 445,000)
 Record customer satisfaction score of 7.9 out of 10 in December
Chorus has today reported a net profit after tax (NPAT) of $30m and earnings before
interest, tax, depreciation and amortisation (EBITDA) of $318m for the half year
ended 31 December 2018.

Operating revenue for the period was $489m (HY18: $499m) and operating expenses
were $171m (HY18: $170m).

Depreciation and amortisation for the period was $196m (HY18: $192m), delivering
earnings before interest and tax (EBIT) of $122m (HY18: $137m).

Demand for fibre continues to surge

Chorus CEO Kate McKenzie said while demand for fibre continues to surge, a very
pleasing aspect of the demand is the improvements Chorus is starting to see in
customer satisfaction with the fibre installation experience.

“We’ve put a lot of focus on improving our processes, as well as working closely with
individual retailers on theirs, to lift customer satisfaction scores.

“We know the need to be at home for several technician visits has not been
convenient for customers and our goal by Christmas was to start completing 50% of
installations with just one visit. We achieved that goal and recorded our highest ever
customer satisfaction score of 7.9 out of 10 in December, up from 7.5 in June.

“Moreover, we installed fibre in 95,000 homes and business in the six months to the
end of December, compared to 79,000 installations in the six months to the end of
June.”

Chorus added another 84,000 fibre connections nationwide in this six-month period,
and fibre uptake grew to 51% across our UFB footprint, up from 45% at the end of
June. This includes smaller, recently completed UFB2 towns, such as Hokitika and
Horotiu, where uptake rates have hit 43% and 52% respectively within a very short
time.

Data usage

The continuing growth in data usage - with monthly average household data usage of
235 gigabytes (GB) in December, compared to 210GB in June, and fibre customers
consuming an average of 315GB – means customers are increasingly conscious of the
limitations of fixed wireless networks.

“Data usage is growing across all our network technologies as streaming becomes
mainstream and consumers adopt new bandwidth hungry devices. Freeview’s new
streaming device, for example, removes the need for a TV aerial or satellite dish by
transferring their content entirely onto broadband. These technology developments
support our own and independent forecasts that suggest average data usage by 2024
is likely to exceed 1,000GB a month.

“We’re also pleased with the performance of the copper network and the recent
investments we’ve made in enhancing high-speed VDSL broadband mean many Kiwis
can easily access streamed sports events online without the limitations of datacaps.

“While we’re starting to plan for when we might start switching off parts of the copper
network in our fibre areas, that is still some time in the future and will be on a street-
by-street basis, subject to factors such as fibre uptake. An industry code is being
developed and naturally we’ll inform customers well in advance.”

Legislation marks the beginning of our transition to a regulated utility

Chorus reached a significant milestone in November with the Telecommunications
(New Regulatory Framework) Amendment Act passing into law following bipartisan
political support.

This marked the culmination of about five years of policy review of the regulatory
framework that applies to Chorus’ business and the decision to transition to a utility-
style framework for fibre access services.

The Commerce Commission is now required to implement the new framework that
transitions us from a contractual model into a regulatory model by establishing a
regulated asset base and allowable revenues for fibre.

“Our focus is on ensuring that the significant investments we’ve made in enabling
fibre broadband, both through the ultra-fast broadband rollout and the extensive
shared infrastructure that underpins it, are fully and fairly reflected in the regulated
asset base determined by the Commission.”

The Commission has requested, and been granted, a deferral of the implementation
from 1 January 2020 until 1 January 2022 to complete its work.

Outlook

The second half of FY19 seems likely to set a new record for fibre demand. Orders are
already tracking ahead of Chorus’ expectations leading into what is typically a busy
seasonal connection period, with the return of university students and the completion
of about 80,000 more premises in our UFB rollout areas scheduled by the end of June.

Spark has launched a sports streaming service and will broadcast the 2019 Rugby
World Cup online, and together with other retailers’ individual marketing strategies
and Chorus’ own migration campaigns, should give fibre demand added momentum.

“Our objective is simply to connect as many customers to our fibre network as fast as
we can, while continuing to lift customer satisfaction. To do this, we’ll keep working
with our service company partners and retailers to improve our connection processes
and productivity. Our new target is to be completing 75% of installations in a single
visit by the end of June.”

Ms McKenzie said the company’s objective is to return to modest EBITDA growth in
FY20, subject to no material changes in expected regulatory environment or
competitive outlook.

“Maximising the number of connections on our network through broadband growth
and our innovation programme are pivotal to this. At a cost level, we’re maintaining a
tight focus on capital and operating expenditure as we optimise our business.

“Our fibre rollout remains on time and on budget, and we’re beginning to see some of
the benefits of the migration to fibre flow through to reduced network maintenance
and other operational costs.

“The pace of this migration will continue to shape our business as we transition to a
fibre future and the new regulatory framework.”

FY19 guidance

 EBITDA guidance unchanged at $625 - $645 million
 Gross capex guidance unchanged at $820 - $860 million
 Fibre capex increased to $685 - $715 million, from $660 - $690 million
previously
 Fibre connections & layer 2 capex increased to $310 - $340 million, from
$280m - $310 million previously
 Copper capex reduced to $75 - $95 million, from $90 - $110 million previously
 FY19 dividend: 23 cents per share, subject to no material adverse changes in
circumstances or outlook

ENDS

Chorus Chief Executive, Kate McKenzie, and Chief Financial Officer David Collins will
discuss the half year results at a briefing in Wellington from 10.00am (NZ time). The
webcast will be available at www.chorus.co.nz/webcast


For further information:

Nathan Beaumont
Stakeholder Communications Manager
Phone: +64 4 896 4352
Mobile: +64 (21) 243 8412
Email: Nathan.Beaumont@chorus.co.nz

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

---

We’re pleased to provide you with our update
on the progress your company is making towards
our goal of keeping New Zealand new.
Recent changes to the NZX Listing Rules mean we’re no
longer required to publish a half year report, but we’ll continue
to provide you with a summary of key developments in
this newsletter format, as well as making our management
commentary and financial statements available online at
www.chorus.co.nz/reports. The web page also has a link to
the webcast of our half year result presentation, featuring our
Chief Executive, Kate McKenzie, and Chief Financial Officer,
David Collins. David joined us recently from Aurizon, Australia’s
largest regulated rail freight operator in Queensland.
Net profit for the six months to 31 December 2018 was
$30 million and we achieved EBITDA
1
of $318 million. Our
EBITDA guidance for the full year remains $625 million to
$645 million. A fully imputed interim dividend of 9.5 cents
per share will be paid on 16 April 2019.
Legislation marks the beginning of our transition
to a regulated utility
We reached a significant milestone in November with the
Telecommunications (New Regulatory Framework) Amendment
Act passing into law following bipartisan political support. This
marked the culmination of about five years of policy review
of the regulatory framework that applies to our business and
the decision to transition to a utility-style framework for fibre
access services. The Commerce Commission is now required
to implement the new framework that transitions us from a
contractual model into a regulatory model by establishing a
regulated asset base and allowable revenues for fibre.
Our focus is on ensuring that the significant investments we’ve
made in enabling fibre broadband, both through the ultra-fast
broadband (UFB) rollout and the extensive shared infrastructure
that underpins it, are fully and fairly reflected in the regulated
asset base determined by the Commission. The Commission has
requested, and been granted, a deferral of the implementation
from 1 January 2020 until 1 January 2022 to complete its work. 
dear
investors
Letter to investors:
FY19 half year result
Dividend reinvestment plan
for shareholders
A dividend reinvestment plan is available to our Australian
and New Zealand resident shareholders with a discount
rate of 3% for the 16 April 2019 dividend payment.
If you haven’t previously registered to participate and wish
to do so, you’ll need to have registered your participation
by 5:00pm (NZ time) on 20 March 2019.
You can register by logging into our Computershare
profile at www.investorcentre.com/nz or downloading
the Participation Notice at www.chorus.co.nz/dividends
and returning it to Computershare.
The full terms of the reinvestment plan can be read
in our Offer Document dated February 2016 at
www.chorus.co.nz/dividends, or you can request a
copy free of charge. Our most recent audited financial
statements, and auditor’s report, are included in our 2018
annual report, which is available free of charge on request
and at www.chorus.co.nz/financial-results.
Dividend
HY19
9.5cps
HY18
9cps
Fibre connections
HY19
529,000
FY18
445,000
Broadband connections
HY19
1,186,000
FY18
1,187,000
Fixed line connections
HY19
1,486,000
FY18
1,526,000
Net profit after tax
HY19
$30m
HY18
$47m
EBITDA
1
HY19
$318m
HY18
$329m
1 Earnings before interest, income tax, depreciation and amortisation (EBITDA)
is a non-GAAP profit measure. We monitor this as a key performance indicator
and we believe it assists investors in assessing the performance of the core
operations of the business.
Half year result overview

An indicative implementation timeline has been published for
its various workstreams. We know investors would like further
regulatory clarity sooner rather than later, and we’ll do what we
can to support the Commission’s concurrent workstreams and
expedite certainty within the process.
The transition to the new regulatory framework has provided us
with the clarity necessary to begin increasing our debt maturity
profile to better align with the long term nature of our assets.
In December, strong investor interest saw us issue $500 million
of 10-year unsecured, unsubordinated bonds maturing in 2028.
Demand for fibre continues to surge
Our market research shows that New Zealanders’ recognise
fibre broadband as the premium technology for a broadband
connection and this is evident in the continued strength of fibre
demand. We added another 84,000 fibre connections nationwide
in this six-month period, and fibre uptake grew to 51% across
our UFB footprint, up from 45% at the end of June. This includes
smaller, recently completed UFB2
2
towns, such as Hokitika and
Horotiu, where we are seeing uptake rates of 43% and 52%
respectively within a very short time.
The ongoing rollout of our fibre network, together with the
investment we made in enhanced copper broadband technology
in some areas last year, are helping us win cable and fixed wireless
broadband customers back from other networks. However,
the popularity of fibre broadband means other fibre companies
continue to reduce our copper broadband connections in areas
where we’re not the Government’s UFB partner. Our voice only
copper connections, for which we receive lower revenue than
a broadband connection, also continue to decline as customers
take up broadband or migrate to alternative fibre, mobile or fixed
wireless networks.
The net effect of these trends was a decline of 40,000
connections in total fixed line connections in the six-month
period to a total of 1,486,000. This was higher than the 33,000
disconnections in the six months to 30 June 2018, but the
months prior to Christmas are typically characterised by higher
disconnections.
The number of connections taking a broadband service
decreased by just 1,000 connections in the six months, to
a total of 1,186,000. This is the same number of broadband
connections we had at 30 June 2017. In our UFB rollout areas,
broadband connections grew by 18,000 connections across
the six months. This reflects the degree to which premises
growth and increasing broadband penetration, as broadband
becomes the fourth utility, is helping offset ongoing line loss
to the other local fibre company networks.
A very pleasing aspect of the demand for fibre is the
improvements we’re starting to see with customer satisfaction
with the fibre installation experience. We’ve put a lot of focus
on improving our processes, as well as working closely with
individual retailers on theirs, to lift customer satisfaction scores.
We know the need to be at home for several technician visits
isn’t convenient for customers and our goal by Christmas was
to start completing 50% of installations with just one visit.
We achieved that goal and recorded our highest ever customer
satisfaction score of 7.9 out of 10 in December, up from 7.5
in June. Moreover, we installed fibre in 95,000 homes and
businesses in the six months to the end of December, compared
to 79,000 installations in the six months to the end of June.
2 UFB2 refers to the additional UFB rollout areas agreed with the Government in 2017
These customer results also reflect the efforts of the service
company subcontractors undertaking installation work on our
behalf. Our ability to draw upon this subcontractor workforce
has been critical to help us address the rapid growth in demand
for fibre broadband. We were, therefore, very disappointed when
the government Labour Inspectorate announced early findings
of breaches of employment standards by some subcontractors.
While there has been no suggestion of wrongdoing by Chorus,
we believe anyone working on our behalf should be treated fairly
and within the law. Our primary contractors, Visionstream and
UCG, have initiated their own independent audits and stood down
a handful of subcontracting firms. We’re working with our primary
contractors to try to minimise disruption to any affected workers,
by helping those workers find roles with other subcontractors.
We’re also working closely with the Labour Inspectorate and
commissioned an independent review into the work practices of
our subcontractors to identify what improvements we could make.
We’ll share the outcomes of this review when it is completed.
Customer satisfaction
HY18
7.57.97.4
FY18HY19
OUT OF 10
(TARGET 7.9)
Fibre installation crews
HY18
800750700
FY18HY19
Work in progress (fibre orders)
HY18
30k22k25k
FY18HY19
Completed installations
HY18
79k95k77k
FY18HY19

Outlook
The second half of FY19 seems likely to set a new record for
fibre demand. Orders are already tracking ahead of our
expectations leading into what is typically a busy seasonal
connection period, with the return of university students and
the completion of approximately 80,000 more premises in our
UFB rollout areas scheduled by the end of June. Spark’s plans
to launch a sports streaming service and broadcast the 2019
Rugby World Cup online, together with other retailers’ individual
marketing strategies and our own migration campaigns, should
give fibre demand added momentum.
Our objective is simply to connect as many customers to our
fibre network as fast as we can, while continuing to lift customer
satisfaction. To do this, we’ll keep working with our service
company partners and retailers to improve our connection
processes and productivity. Our new target is to be completing
75% of installations in a single visit by the end of June.
Where fibre isn’t available, or sports events drive short term
shortages in workforce capacity, we’ll continue to drive
awareness of the availability of our high speed VDSL capability.
The continuing growth in data usage - with monthly average
household data usage of 235 gigabytes (GB) in December,
compared to 210GB in June, and fibre customers consuming an
average of 315GB – means customers are increasingly conscious
of the limitations of fixed wireless networks. Data usage is
growing across all our network technologies as streaming
becomes mainstream and consumers adopt new bandwidth
hungry devices. Freeview’s new streaming device, for example,
removes the need for a TV aerial or satellite dish by transferring
their content entirely onto broadband. These technology
developments support our own and independent forecasts that
suggest average data usage by 2024 is likely to exceed 1,000GB
a month.
Chorus forecast: average monthly broadband usage (GB)
CopperFibre
GB
1,400
1,200
1,000
800
600
400
200
0
JUNE 2019JUNE 2020JUNE 2021JUNE 2022JUNE 2023JUNE 2024
Figure 1:
Our objective is to return to modest EBITDA growth in FY20,
subject to no material changes in expected regulatory environment
or competitive outlook. Maximising the number of connections
on our network through broadband growth and our innovation
programme are pivotal to this. At a cost level, we’re maintaining a
tight focus on capital and operating expenditure as we optimise
our business. Our fibre rollout remains on time and on budget,
and we’re beginning to see some of the benefits of the migration
to fibre flow through to reduced network maintenance and other
operational costs.
The pace of this migration will continue to shape our business as
we transition to a fibre future and the new regulatory framework.
We look forward to updating you on our progress at the full year
result in late August.
Thank you for your support of Chorus.
Kind regards
Patrick Strange
Chair

---

Half Year Result
For the six months ended 31 December 2018
01 Half year result overview
02 Management commentary
04 Financial statements

1
Half Year Result 2019
Half year result overview
1 Earnings before interest, income tax, depreciation and amortisation (EBITDA) is a non-GAAP profit measure. We monitor this as a
key performance indicator and we believe it assists investors in assessing the performance of the core operations of our business.
Fibre connectionsDividend
529,000
HY19
9.5cps
HY19
445,000
FY18
9cps
HY18
Fixed line connectionsBroadband connections
1,186,000
HY19HY19
1,486,000
1,187,000
FY18FY18
1,526,000
EBITDA
1
Net profit after tax
HY19HY18
$318m
HY19
HY19
$30m
HY19
$329m
HY18
HY18
$47m
HY18

Half Year Result 2019
2
Management commentary
We report earnings before interest, income tax, depreciation and amortisation (EBITDA)
of $318 million for the six months ending 31 December 2018 (HY19). This was a decrease of
$11 million on the same six months in FY18 (HY18), largely reflecting the revenue impact of
declining copper connection numbers. This, and an increase in finance expenses due to a new
$500 million bond issue in December, resulted in a net earnings decrease by $17 million between
HY18 and HY19. Our EBITDA guidance for the full year remains $625 million to $645 million.
Operating revenue
Revenues of $489 million were down $10 million compared
to HY18. This was largely a consequence of copper-based
voice and broadband customers migrating to alternative
fibre and wireless networks. Revenue from premium
connections, comprising data services (copper) and fibre
premium connections, also continued to decline as retailers
transitioned customers from legacy services to our lower
cost ultra-fast broadband (UFB) services, or to alternative
fibre networks.
These declines in connections were mostly offset by
strong ongoing growth in mass market fibre broadband
connections, with HY19 fibre broadband revenues increasing
$46 million relative to HY18. Average revenue per user has
also improved as the proportion of customers taking fibre
services above the entry level 50 megabits per second
(Mbps) service grew to 73%, up from 64% at the end of HY18.
Approximately 44,000 customers were on 1 gigabit per
second (Gbps) services, up from 20,000 customers at the
end of HY18, including about 13,000 customers in the
Dunedin ‘Gigatown’ area where pricing is sponsored at
the 50Mbps level until July 2019.
Field services revenue was up $4 million from HY18 driven
by higher activity related to chargeable network relocation
activity, which is also reflected in the increase in other
network costs.
Other revenue categories were largely flat period over period.
CONNECTIONS
31 DECEMBER 2018
CONNECTIONS
30 JUNE 2018
CONNECTIONS
31 DECEMBER 2017
Fibre broadband (GPON)
2
517,000433,000362,000
Fibre premium (P2P)
3
12,00012,00013,000
Copper VDSL295,000321,000320,000
Copper ADSL374,000433,000499,000
Data services over copper5,0006,0007,000
Unbundled copper39,00053,00068,000
Baseband copper244,000268,000290,000
Total fixed line connections1,486,0001,526,0001,559,000

Expenses
Expenditure remained flat from HY18 at $171 million.
This reflects a continued tight focus on cost, with reduced
network maintenance expenses offset by increases in
other network costs, rent and rates.
Labour
Labour costs of $37 million represent staff costs that are
not capitalised. Staff numbers have continued to reduce
and we had 914 permanent and fixed term employees
at 31 December 2018, down from 971 employees at
31 December 2017. This 6% reduction in our internal
workforce was the main contributor to reduced labour
costs across the two periods, offset partially by
CPI-related increases.
Network maintenance
Network maintenance costs reduced by $5 million compared
to the same period in FY18, largely as a consequence of
fewer network faults and truck rolls. The main contributors
to this outcome were:
• this period featured fewer extreme weather events
than the particularly wet weather we noted in the first
half of FY18.
• retailers are using our new Application Programming
Interface tools to better identify which faults don’t
require Chorus truck rolls.
• underlying fault levels are reducing as our customer
base reduces and a greater proportion migrate to the
newer fibre network.
While the volume of truck rolls reduced, the average cost
per fault increased. This is because the mix of faults shifted
from lower cost work at customer premises, which may be
recovered as Field Services revenue, to higher cost faults
within our fibre and copper street network.
2 GPON: Gigabit Passive Optical Network
3 P2P: Where two parties or devices are connected point-to-point
via fibre.

Half Year Result 2019
3
Other network
Other network costs increased by $3 million compared
to HY18. This reflected an increase in third party requests
for network relocation activity that cannot be capitalised,
although it may be recovered as Field Services revenue.
Other network costs also include costs associated with
service partner contracts, engineering services, fibre access
from third parties, warehousing, fibre order cancellations
and network spares.
Rent and rates
Rent and rates increased by $2 million, compared to HY18,
because the UFB rollout results in higher council rateable
values for our network infrastructure.
Depreciation and amortisation
Depreciation continues to increase as a consequence of
our ongoing programme of significant investment in long
life network assets for the UFB rollout. This is partially offset
by the increasing amortisation of Crown funding against
these assets.
Amortisation of customer retention assets has slowed as
capitalised provisioning activity has reduced and the useful
life of these assets increased, from three to four years, to
reflect the increasing proportion of fibre customers.
Finance expense
Interest on debt (European Medium Term Notes, fixed
rate NZD bonds and syndicated bank facilities) has
increased in the current period due to the issuance of a
new NZD $500 million domestic bond. Notional interest
on Crown Infrastructure Partners (CIP) securities has also
increased in line with the increase in Crown funding.
There was a one-off $2 million expense for restructuring
of forward dated interest rate swaps.
Capital expenditure
Gross capital expenditure for HY19 was $395 million, up
slightly from $391 million in HY18. The proportion invested
in fibre has grown from 77% to 84% between the two periods.
This reflects more premises being passed in HY19 as the
UFB2 and 2+ rollout ramps up and the UFB1 rollout reaches
its peak, the continued growth in fibre installation volumes,
and reduced copper investment following the conclusion
of our VDSL upgrade programme.
We invested $119 million in the UFB rollout during the period,
with $78 million spent in UFB1 areas and $41 million spent
on the UFB2 and 2+ rollout. A total of 38,000 premises were
passed, up from 32,000 premises in HY18. This included
13,000 UFB2/2+ premises.
The average cost per premises passed for UFB1 premises
was $1,662. This is expected to reduce to within our
guidance range of $1,500-$1,600 by the end of FY19,
as significantly more premises are completed in the
second half.
Fibre connections and layer 2 spend was $161 million,
driven largely by the cost to connect fibre to 95,000 homes
and businesses (UFB1 90,000; UFB2 5,000). This was up
significantly from 77,000 homes and businesses in HY18.
The average cost per premises connected in UFB1 areas
during the period was $1,038. This was in the lower half of
the FY19 guidance range of $1,000 to $1,150 (for a standard
residential connection, excluding layer 2 and including
standard installations and some non-standard single
dwellings and service desk costs).
Spend on other fibre connections and growth was
$36 million, up from $28 million in HY18 as demand for
connections to new housing subdivisions grew and our
pole replacement programme continued in UFB areas.
Copper capital expenditure reduced from $64 million
in HY18 to $39 million in the current period. Customer
retention costs reduced by $17 million as uptake of copper
broadband reduced and retailer campaigns focused more
on fibre customer acquisition. Copper layer 2 spend reduced
by $10 million following the conclusion of our programme
to deploy VDSL vectoring technology outside our UFB areas.
Dividends, equity and capital management
We will pay an interim dividend of 9.5 cents per share
on 16 April 2019 to all holders registered at 5:00pm
19 March 2019. The dividends paid will be fully imputed,
at a ratio of 28/72, in line with the corporate income tax
rate. A supplementary dividend of 1.68 cents per share
will be payable to shareholders who are not resident
in New Zealand.
The dividend reinvestment plan will apply for the interim
dividend at a discount rate of 3%. Shareholders who have
previously elected to participate in the dividend reinvestment
plan do not need to take any further action. For those
shareholders who wish to participate, election notices
to participate must be received by 5:00pm (NZ time) on
20 March 2019.
A final dividend of 13.5 cents per share is expected to be
declared in August 2019, subject to no material adverse
changes in circumstances or outlook. During the UFB build
programme to 2020, the Board expects to be able to provide
shareholders with modest dividend growth from a base of
20 cents per share paid for FY16.
On 6 December 2018 Chorus issued $500 million ten-year
unsecured, unsubordinated, fixed rate bonds. The interest
rate for the first five years has been set at 4.35% per annum.
The funds raised will be used for general corporate purposes
including paying down Chorus’ existing bank facility and
partially funding repayment of its GBP Euro Medium Term
Notes in April 2020.
The Board considers that a ‘BBB’ or equivalent credit rating
is appropriate for a company such as Chorus. It intends to
maintain capital management policies and financial policies
consistent with these credit ratings. At 31 December 2018,
we had a long term credit rating of BBB/stable outlook
by Standard & Poor’s and Baa2/stable by Moody’s
Investors Service.

Half Year Result 2019
4
Condensed consolidated
income statement
For the six months ended 31 December 2018
(Dollars in millions)Notes
SIX MONTHS ENDED
31 DECEMBER 2018
UNAUDITED
$M
SIX MONTHS ENDED
31 DECEMBER 2017
UNAUDITED
$M
YEAR ENDED
30 JUNE 2018
AUDITED
$M
Fibre broadband (GPON) 136 90 198
Fibre premium (P2P) 37 40 78
Copper based broadband 181 219 421
Copper based voice 56 69 133
Data services copper 10 14 27
Value added network services 16 17 33
Infrastructure 12 12 23
Field services products 39 35 70
Other 2 3 7
Total operating revenue 489 499 990
Labour (37) (39) (73)
Provisioning (3) (4) (6)
Network maintenance (38) (43) (87)
Other network (18) (15) (34)
Information technology (26) (27) (54)
Rent and rates (7) (5) (9)
Property maintenance (6) (6) (15)
Electricity (9) (8) (15)
Insurance (2) (1) (3)
Consultants (4) (3) (5)
Regulatory levies (8) (7) (13)
Other (13) (12) (23)
Total operating expenses (171) (170) (337)
Earnings before interest, income tax, depreciation and amortisation 318 329 653
Depreciation1 (150) (139) (283)
Amortisation2 (46) (53) (104)
Earnings before interest and income tax 122 137 266
Finance income 4 4 7
Finance expense (83) (74) (151)
Net earnings before income tax 43 67 122
Income tax expense (13) (20) (37)
Net earnings for the period 30 47 85
Earnings per share
Basic earnings per share (dollars)0.07 0.12 0.20
Diluted earnings per share (dollars)0.05 0.10 0.16
Financial statements

Half Year Result 2019
5
Condensed consolidated statement
of comprehensive income
For the six months ended 31 December 2018
(Dollars in millions)Note
SIX MONTHS ENDED
31 DECEMBER 2018
UNAUDITED
$M
SIX MONTHS ENDED
31 DECEMBER 2017
UNAUDITED
$M
YEAR ENDED
30 JUNE 2018
AUDITED
$M
Net earnings for the period 30 47 85
Other comprehensive income
Items that will be reclassified subsequently to the income
statement when specific conditions are met
Movements in effective cash flow hedges8 (14) 2 (3)
Amortisation of de-designated cash flow hedges transferred
to income statement
8 (1) (1) (1)
Movement in cost of hedging reserve8 (1) 1 (3)
Other comprehensive income net of tax (16) 2 (7)
Total comprehensive income for the period net of tax 14 49 78

Half Year Result 2019
6
Patrick Strange
Chair
Kate McKenzie
Chief Executive Officer and Managing Director
Condensed consolidated statement
of financial position
As at 31 December 2018
(Dollars in millions)Notes
31 DECEMBER 2018
UNAUDITED
$M
31 DECEMBER 2017
UNAUDITED
$M
30 JUNE 2018
AUDITED
$M
Current assets
Cash and call deposits 281 40 50
Income tax receivable 12 11 12
Trade and other receivables 214 211 154
Derivative financial instruments8 4 1 3
Finance lease receivable 5 5 5
Total current assets 516 268 224
Non-current assets
Derivative financial instruments8 43 32 74
Trade and other receivables 5 7 7
Software and other intangibles2 181 185 182
Network assets1 4,634 4,195 4,439
Total non-current assets 4,863 4,419 4,702
Total assets 5,379 4,687 4,926
Current liabilities
Trade and other payables 359 341 370
Lease payable 6 10 6
Derivative financial instruments8 18 1 19
Total current liabilities excluding Crown funding 383 352 395
Current portion of Crown funding5 23 20 21
Total current liabilities 406 372 416
Non-current liabilities
Derivative financial instruments8 222 203 210
Lease payable 237 200 237
Debt3 2,224 1,781 1,807
Deferred tax payable 225 215 224
Total non-current liabilities excluding CIP and Crown funding 2,908 2,399 2,478
Crown Infrastructure Partners (CIP) securities4 299 219 273
Crown funding5 756 684 737
Total non-current liabilities 3,963 3,302 3,488
Total liabilities 4,369 3,674 3,904
Equity
Share capital 620 571 590
Reserves(52)(27)(36)
Retained earnings 442 469 468
Tot al e quit y 1,010 1,013 1,022
Total liabilities and equity 5,379 4,687 4,926
The financial statements are approved and signed on behalf of the Board.
Authorised for issue on 25 February 2019

Half Year Result 2019
7
Condensed consolidated statement
of changes in equity
For the six months ended 31 December 2018
(Dollars in millions)Note
Share capital
$M
Retained
earnings
$M
Hedging-related
reserves
$M
Total
$M
Balance at 1 July 2017 520 473 (29) 964
Comprehensive income
Net earnings for the period – 85 – 85
Other comprehensive income
Changes in cash flow hedge reserve – – (3) (3)
Amortisation of de-designated cash flow hedges transferred
to income statement
– – (1) (1)
Movement in cost of hedging reserve – – (3) (3)
Total comprehensive income – 85 (7) 78
Contributions by and (distributions to) owners:
Dividends7 – (90) – (90)
Supplementary dividends – (10) – (10)
Tax credit on supplementary dividends – 10 – 10
Dividend reinvestment plan 47 – – 47
Issue of new shares 23 – – 23
Total transactions with owners 70 (90) – (20)
Balance at 30 June 2018 (AUDITED) 590 468 (36) 1,022
Comprehensive income
Net earnings for the period – 30 – 30
Other comprehensive income
Changes in cash flow hedge reserve – – (14) (14)
Amortisation of de-designated cash flow hedges transferred
to income statement
– – (1) (1)
Movement in cost of hedging reserve – – (1) (1)
Total comprehensive income – 30 (16) 14
Contributions by and (distributions to) owners:
Dividends7 – (56) – (56)
Supplementary dividends – (7) – (7)
Tax credit on supplementary dividends – 7 – 7
Dividend reinvestment plan 30 – – 30
Total transactions with owners 30 (56) – (26)
Balance at 31 December 2018 (UNAUDITED) 620 442 (52) 1,010

Half Year Result 2019
8
Condensed consolidated statement
of changes in equity (continued)
For the six months ended 31 December 2018
(Dollars in millions)Note
Share capital
$M
Retained
earnings
$M
Hedging-related
reserves
$M
Total
$M
Balance at 1 July 2017 520 473 (29) 964
Comprehensive income
Net earnings for the period – 47 – 47
Other comprehensive income
Changes in cash flow hedge reserve – – 2 2
Amortisation of de-designated cash flow hedges transferred
to income statement
– – (1) (1)
Movement in cost of hedging reserve – – 1 1
Total comprehensive income – 47 2 49
Contributions by and (distributions to) owners:
Dividends7 – (51) – (51)
Supplementary dividends – (6) – (6)
Tax credit on supplementary dividends – 6 – 6
Dividend reinvestment plan 28 – – 28
Issue of new shares 23 – – 23
Total transactions with owners 51 (51) – –
Balance at 31 December 2017 (UNAUDITED) 571 469 (27) 1,013

Half Year Result 2019
9
Condensed consolidated statement
of cash flows
For the six months ended 31 December 2018
(Dollars in millions)
SIX MONTHS ENDED
31 DECEMBER 2018
UNAUDITED
$M
SIX MONTHS ENDED
31 DECEMBER 2017
UNAUDITED
$M
YEAR ENDED
30 JUNE 2018
AUDITED
$M
Cash flows from operating activities
Cash was provided from/(applied to):
Cash received from customers 447 448 1,002
Finance income – 2 3
Payment to suppliers and employees (209) (204) (350)
Taxation paid (7) (25) (30)
Interest paid (55) (56) (117)
Net cash flows from operating activities 176 165 508
Cash flows applied to investing activities
Cash was provided from/(applied to):
Purchase of network and intangible assets (401) (384) (766)
Capitalised interest paid (2) (1) (4)
Net cash flows applied to investing activities (403) (385) (770)
Cash flows from financing activities
Cash was provided from/(applied to):
Net (outflow)/inflow from leases (5)(5) (15)
Crown funding (including CIP securities) 49 25 117
Issuance of share capital – 23 23
Proceeds from debt 500 70 70
Repayment of debt (60) – (10)
Dividends paid (26) (23) (43)
Net cash flows from financing activities 458 90 142
Net cash flow 231 (130) (120)
Cash and call deposits at the beginning of the period 50 170 170
Cash and call deposits at the end of the period 281 40 50

Half Year Result 2019
10
Notes to the financial statements
Reporting entity and statutory base
Chorus includes Chorus Limited together with its subsidiaries
as at and for the six months ended 31 December 2018.
Chorus is New Zealand’s largest fixed line communications
infrastructure services provider. It maintains and builds a
network predominantly made up of fibre and copper cables,
local telephone exchanges and cabinets.
Chorus Limited is a profit-orientated company registered in
New Zealand under the Companies Act 1993 and a FMC
Reporting Entity for the purposes of the Financial Markets
Conduct Act 2013.
The condensed consolidated interim financial statements
(financial statements) have been prepared in accordance
with the New Zealand equivalent to International Accounting
Standard No. 34: “Interim Financial Reporting” and Generally
Accepted Accounting Practice in New Zealand (NZ GAAP).
These financial statements do not include all of the information
required for the full annual financial statements and should be
read in conjunction with the consolidated financial statements
of Chorus as at and for the year ended 30 June 2018.
These financial statements are expressed in New Zealand
dollars. All financial information has been rounded to the
nearest million, unless otherwise stated.
The measurement basis adopted in the preparation of
these financial statements is historical cost, modified by the
revaluation of financial instruments as identified in the specific
accounting policies disclosed in the notes to the consolidated
financial statements for the year ended 30 June 2018 and
described in note 8 to these financial statements.
Accounting policies and standards
The accounting policies adopted and methods of computation
have been applied consistently throughout the periods
presented in these financial statements.
The financial statements for the six months ended 31 December
2018 and comparative information for the six months ended
31 December 2017 are unaudited. The comparative information
for the year ended 30 June 2018 is audited.
Reclassification and re-statement of comparatives
Where management have reclassified items in the financial
statements, the related comparative disclosures have been
adjusted to provide a like-for-like comparison.
Accounting estimates and judgements
In preparing the financial statements, management has made
estimates and assumptions about the future that affect the
reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of revenue
and expenses during the period. Actual results could differ
from those estimates.
In preparing the financial statements, the significant judgements
made by management in applying Chorus’ accounting policies
were the same as those that applied to the consolidated financial
statements as at and for the year ended 30 June 2018.

Half Year Result 2019
11
Note 1 – Network assets
(Dollars in millions)
31 DECEMBER 2018
UNAUDITED
$M
31 DECEMBER 2017
UNAUDITED
$M
30 JUNE 2018
AUDITED
$M
Cost
Opening balance 9,626 8,940 8,940
Additions 353 323 721
Other4 – 7
Disposals (18) (17) (42)
Closing balance 9,965 9,246 9,626
Accumulated depreciation
Opening balance (5,187) (4,918) (4,918)
Depreciation (162) (150) (305)
Other – – (2)
Disposals 18 17 38
Closing balance (5,331) (5,051) (5,187)
Net carrying amount 4,634 4,195 4,439
Depreciation
The Crown funding amortisation that was released against
depreciation for the six months ended 31 December 2018 was
$12 million (31 December 2017: $11 million; 30 June 2018:
$22 million). See note 5.
Additions
Additions also includes the net movement within capital work
in progress in the period.
Other – property exchanges
Chorus has leased exchange space and commercial co-
location space owned by Spark which is subject to finance lease
arrangements (included within right of use assets). Chorus in
turn leases exchange space and commercial co-location space
owned by Chorus to Spark under a finance lease arrangement.
For sites that it does not own, Chorus recognises its share of
the assets based on occupancy percentage, as well as a liability
for the future payments due. For sites that it does own, Chorus
derecognises the share of the asset used by Spark, as well as
recognising a receivable for the future receipts due.
The 'Other' cost and accumulated depreciation movement
related to property exchanges in the six months to 31 December
2018 is nil (31 December 2017: nil; 30 June 2018: $5 million) as
no reassessment of the extent of Spark’s use of Chorus owned
sites and Chorus’ use of Spark’s sites has occurred within
the period.
Capital commitments
There are no restrictions on Chorus network assets or any
network assets pledged as security for liabilities.
At 31 December 2018 the contractual commitment for
acquisition of network assets was $395 million (31 December
2017: $529 million; 30 June 2018: $448 million), mainly
relating to UFB build activity.
Right of use assets
Network assets comprise of owned and right of use (leased)
assets. The value of right of use assets at 31 December 2018 was
$222 million (31 December 2017: $200 million; 30 June 2018:
$226 million).
(Dollars in millions)Fibre cables
Ducts, manholes
and polesPropertyTotal
Balance at 1 July 2017 6 21 179 206
Additions (net of relinquishments) 3 7 23 33
Depreciation charge – (2) (11) (13)
Balance at 30 June 2018 9 26 191 226
Additions (net of relinquishments) – 2 – 2
Depreciation charge – (1) (5) (6)
Balance at 31 December 2018 9 27 186 222
Balance 1 July 2017 6 21 179 206
Depreciation charge – (1) (5) (6)
Balance at 31 December 2017 6 20 174 200
Additions to right of use assets during the period to 31 December 2018 were largely CPI adjustments to ducts, manholes
and poles leases, and additions to pole leases related to the UFB build activity.

Half Year Result 2019
12
Note 2 – Software and other intangibles
(Dollars in millions)
31 DECEMBER 2018
UNAUDITED
$M
31 DECEMBER 2017
UNAUDITED
$M
30 JUNE 2018
AUDITED
$M
Cost
Opening balance 824 708 719
Additions 45 69 117
Disposals (10) – (12)
Closing balance 859 777 824
Accumulated depreciation
Opening balance (642) (539) (550)
Amortisation (46) (53) (104)
Disposals 10 – 12
Closing balance (678) (592) (642)
Net carrying amount 181 185 182
There are no restrictions on Chorus software and other intangible assets, or any pledged as security for liabilities.
Capital commitments
At 31 December 2018, the contractual commitment for acquisition of software and other intangible assets was $12 million
(31 December 2017: $12 million; 30 June 2018: $11 million).
Note 3 – Debt
(Dollars in millions)
31 DECEMBER 2018
UNAUDITED
$M
31 DECEMBER 2017
UNAUDITED
$M
30 JUNE 2018
AUDITED
$M
Syndicated bank facility – May 2020 – 70 60
Euro medium term notes GBP – Apr 2020 493 495 507
Euro medium term notes EUR – Oct 2023 848 829 852
Fixed rate NZD Bonds – May 2021 400 400 400
Fixed rate NZD Bonds – December 2028 500 – –
Less: facility fees (17) (13) (12)
2,224 1,781 1,807
Current – – –
Non-current 2,224 1,781 1,807
On 6 December 2018 Chorus issued a $500 million bond at
a fixed interest rate for five years of 4.35%. The bond will mature
in December 2028, with a rate reset in December 2023. The
exposure of the floating rate at reset date has been hedged
using interest rate swaps (see note 8).
As at 31 December 2018 Chorus had $350 million committed
syndicated facilities on market standard terms and conditions
(31 December 2017: $350 million; 30 June 2018: $350 million).
The amount undrawn of the syndicated bank facility that is
available for future operating activities is $350 million (31
December 2017: $280 million; 30 June 2018: $290 million).
The syndicated bank facility is held with bank and institutional
counterparties rated – A to AAA, based on rating agency
Standard & Poor's ratings.
The Euro Medium Term Note debt of GBP 260 million has been
swapped to a hedged rate of $677 million (31 December 2017:
$677 million; 30 June 2018: $677 million), and the Euro Medium
Term Note debt of EUR 500 million has been swapped to a
hedged rate of $785 million (31 December 2017: $785 million;
30 June 2018: $785 million), both using cross currency interest
rate swaps (see note 8).

Half Year Result 2019
13
Note 4 – CIP securities
(Dollars in millions)
31 DECEMBER 2018
UNAUDITED
$M
31 DECEMBER 2017
UNAUDITED
$M
30 JUNE 2018
AUDITED
$M
Fair value on initial recognition
Opening balance 223 170 170
Additional securities recognised at fair value 15 8 53
Closing balance 238 178 223
Accumulated notional interest
Opening balance 50 33 33
Notional interest 11 8 17
Closing balance 61 41 50
Total CIP securities 299 219 273
Note 5 – Crown funding
(Dollars in millions)
31 DECEMBER 2018
UNAUDITED
$M
31 DECEMBER 2017
UNAUDITED
$M
30 JUNE 2018
AUDITED
$M
Fair value on initial recognition
Opening balance 841 759 759
Additional funding recognised at fair value 33 17 82
Closing balance 874 776 841
Accumulated amortisation
Opening balance(83) (61) (61)
Amortisation (12) (11) (22)
Closing balance (95)(72)(83)
Total Crown funding 779 704 758
Current 23 20 21
Non-current 756 684 737
Ultra-Fast Broadband
Chorus receives funding from the Crown to finance
construction costs associated with the development of
the UFB network. During the period Chorus has recognised
funding for 30,461 premises passed; 14,353 UFB1 and 16,108
UFB2 (31 December 2017: UFB1 21,655, UFB2 nil; 30 June 2018:
UFB1 112,124, UFB2 1,953) where the premises were passed
and tested by CIP at 31 December 2018. This brings the total
number of premises passed and tested by CIP at 31 December
2018 to approximately 715,000 (31 December 2017: 594,000;
30 June 2018: 685,000).
Total CIP funding including accruals for UFB build as at 31
December 2018 is $812 million (31 December 2017: $664 million,
30 June 2018: $771 million).
Continued recognition of the full amount of the Crown funding
is contingent on certain material performance targets being met
by Chorus. The most significant of these material performance
targets relate to compliance with certain specifications under
user acceptance testing by CIP. Performance targets to date
have been met.

Half Year Result 2019
14
Note 6 – Segmental reporting
Chorus has determined that it operates in one segment
providing nationwide fixed line access network infrastructure.
The determination is based on the reports reviewed by the
Chief Executive Officer in assessing performance, allocating
resources and making strategic decisions.
Note 7 – Equity
Dividends
On 9 October 2018 a fully imputed final dividend of 13 cents per
share, $56 million, was paid to shareholders (31 December 2017:
12.5 cents per share, $51 million; 30 June 2018: 21.5 cents per
share, $90 million). There was an issue of 6,433,813 shares
under the Dividend Reinvestment plan offered to shareholders.
Net tangible assets per security
Net tangible assets per security for the period 31 December 2018
was $1.79 (31 December 2017: $1.95; 30 June 2018: $1.78).
Long-term performance share scheme
Chorus operates a long-term performance share scheme for
selected key management personnel.
In August 2016 Chorus issued one three year grant. The shares
have a vesting date of 22 September 2019 and an expiry date
of 22 September 2020. The grant has an absolute performance
hurdle (Chorus’ actual total shareholder return equalling or
being greater than 9.8% per annum compounding) ending
on the vesting date, with provision for monthly retesting in
the following twelve month period.
In August 2017 Chorus issued one three year grant. The shares
have a vesting date of 8 September 2020 and an expiry date
of 8 September 2021. The grant has an absolute performance
hurdle (Chorus’ actual total shareholder return equalling or
being greater than 10.6% per annum compounding) ending
on the vesting date, with provision for monthly retesting in
the following twelve month period.
In August 2018 Chorus issued one three year grant. The shares
have a vesting date of 27 August 2021 and an expiry date of
27 February 2022. The grant has an absolute performance
hurdle (Chorus’ actual total shareholder return equalling or
being greater than 10.4% per annum compounding) ending
on the vesting date, with provision for monthly retesting in
the following six month period.
The combined option cost for the period ended 31 December
2018 of $141,000 has been recognised in the income statement
(31 December 2017: $158,000; 30 June 2018: $268,000).
Note 8 – Derivative financial instruments
Finance expense includes any unrealised ineffectiveness arising
from the Euro Medium Term Notes (EMTN) hedge relationship.
Following the close out of the cross currency interest rate
swaps and interest rate swaps relating to the EMTN (GBP), the
hedge relationship was reset in December 2013 with a fair value
of $49 million. The unamortised balance of this original fair
value at 31 December 2018 is $6 million (31 December 2017:
$12 million; 30 June 2018: $8 million). As long as the hedge
remains effective, any future gains or losses will be processed
through the hedge reserve; however, the initial fair value will
flow to finance expense in the income statement at some time
over the life of the derivatives as ineffectiveness. Neither the
direction, nor the rate of the impact on the income statement
can be predicted. Due to the complex nature of this instrument,
practical expedients available in NZ IFRS 9 have been applied
for the EMTN (GBP), so the designation remains unchanged.
For the six months to 31 December 2018, a debit of $2 million
ineffectiveness was recognised within finance expense in the
income statement (31 December 2017: $3 million; 30 June 2018:
$7 million).
In conjunction with the EMTN (EUR) 500 million issued in
October 2016, Chorus entered into cross currency interest
rate swaps to hedge the foreign currency and foreign interest
rate risks on the EMTN (EUR). These swaps have an aggregate
principal of EUR 500 million on the receive leg and NZD 785
million on the pay leg. Using the cross currency interest rate
swap, Chorus will pay New Zealand Dollar floating interest rates
and receive EUR nominated fixed interest with coupon payments
matching the underlying notes. Chorus designated the EMTN
and cross currency interest rate swaps into three part-hedging
relationships; a fair value hedge of EUR benchmark interest
rates, a cash flow hedge of margin and a cash flow hedge of the
principal exchange. For the period to 31 December 2018, there
were no unrealised losses recognised in finance expense (31
December 2017: nil; 30 June 2018: $2 million credit). The cost of
hedging (the fair value of the change in currency basis spread)
recognised in the cost of hedging reserve, for the period to 31
December 2018 was $1 million credit (31 December 2017: $1
million debit; 30 June 2018: $3 million credit).

Half Year Result 2019
15
Chorus maintains one interest rate swap that is not designated
for accounting purposes in a hedging relationship. The fair value
re-measurement of unrealised gains or losses on interest rate
swaps that are not held in a hedging relationship are recognised
immediately in finance expense in the income statement. For
the period to 31 December 2018, $2 million credit was
recognised in finance expense (31 December 2017: $1 million;
30 June 2018: $3 million).
Chorus have entered into forward dated interest rate swaps
which are all held in effective hedging relationships and their
unrealised gains or losses are recognised in the cash flow
hedge reserve. Two forward dated interest rate swaps with a
combined face value of $500 million were restructured during
the period in conjunction with the resettable fixed rate bond
issued on 6 December 2018, to hedge interest rate exposure
from December 2023. This restructure incurred a one off cost
during the period of $2 million, recognised in finance expense.
Note 9 – Related party transactions
The gross remuneration of directors and key management
personnel during the period was $8.1 million (31 December 2017:
$6.5 million; 30 June 2018: $10.4 million).
The Company has loans to employees and nominees
(Chorus LTI Trustee Limited) receivable at 31 December 2018
of $1.5 million (31 December 2017: $1.6 million; 30 June 2018:
$1.6 million) relating to Chorus long term performance share
scheme outlined in note 7. All loans outstanding are interest-
free limited recourse loans.
Note 10 – Post balance date events
Dividends
On 25 February 2019 Chorus declared an interim dividend in
respect of the six month period ending 31 December 2018.
The total amount of the dividend is $41.4 million, which
represents a fully imputed dividend of 9.5 cents per
ordinary share.
CIP securities and Crown funding
There was one call notice issued on 18 January 2019 to CIP in
respect to 2,955 premises (UFB2) with a total aggregate issue
price of $5 million. These premises had been passed and tested
by CIP before 31 December 2018 so were accrued for in these
financial statements. A further 6,025 premises (UFB1) were
passed and tested by CIP by 31 December 2018 for which
$7 million was also accrued for in these financial statements.

Half Year Result 2019
16
Independent review report
To the shareholders of Chorus Limited
Report on the condensed consolidated interim financial statements
Basis for opinion
A review of condensed consolidated interim financial
statements in accordance with NZ SRE 2410 Review of
Financial Statements Performed by the Independent
Auditor of the Entity (“NZ SRE 2410”) is a limited assurance
engagement. The auditor performs procedures, consisting
of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical
and other review procedures.
As the auditor of the Group, NZ SRE 2410 requires that we
comply with the ethical requirements relevant to the audit
of the annual financial statements.
Our firm has also provided other services to the Group in
relation to regulatory audit services, tax compliance services,
technical accounting training and other assurance services.
These matters have not impaired our independence as
reviewer of the Group. The firm has no other relationship
with, or interest in, the Group.
Use of this Independent Review Report
This report is made solely to the shareholders as a body.
Our review work has been undertaken so that we might
state to the shareholders those matters we are required to
state to them in the Independent Review Report and for
no other purpose. To the fullest extent permitted by law,
we do not accept or assume responsibility to anyone other
than the shareholders as a body for our review work, this
report, or any of the opinions we have formed.
Responsibilities of the Directors for the
condensed consolidated interim
financial statements
The Directors, on behalf of the Group, are responsible for:
— the preparation and fair presentation of the condensed
consolidated interim financial statements inaccordance
with NZ IAS 34 Interim Financial Reporting;
— implementing necessary internal control to enable the
preparation of condensed consolidated interim financial
statements that is 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
condensed consolidated interim financial
statements
Our responsibility is to express a conclusion on the interim
financial statements based on our review. We conducted
our review in accordance with NZ SRE 2410. NZ SRE 2410
requires us to conclude whether anything has come to our
attention that causes us to believe that the interim financial
statements are not prepared, in all material respects, in
accordance with NZ IAS 34 Interim Financial Reporting.
The procedures performed in a review are substantially
less than those performed in an audit conducted in
accordance with International Standards on Auditing
(New Zealand). Accordingly we do not express an audit
opinion on these condensed consolidated interim
financial statements.
This description forms part of our Independent
Review Report.
KPMG
Wellington
25 February 2019
Conclusion
Based on our review, nothing has come to our attention
that causes us to believe that the condensed consolidated
interim financial statements of Chorus Limited and its
subsidiaries (“the Group”) on pages 4 to 15 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
condensed consolidated interim financial statements
which comprise:
— the condensed consolidated statement of financial
position as at 31 December 2018;
— the condensed consolidated income statement,
statements of other comprehensive income, changes
in equity and cash flows for the 6 month period then
ended; and
— notes to the condensed consolidated interim financial
statements, and other explanatory information.

---

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



Results for announcement to the market
Name of issuer Chorus 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$489,000 Down 2%
Profit (loss) from ordinary
activities after tax attributable
to security holder
NZ$30,000 Down 36%
Net profit (loss) attributable
to security holders
NZ$30,000 Down 36%
Interim/Final Dividend
Amount per Quoted Equity
Security
NZ$ 0.095000
Imputed amount per sec
Quoted Equity Security
NZ$0.036944
Record Date 19 March 2019
Dividend Payment Date 16 April 2019
31 December 2018 31 December 2017
Net tangible assets per
Quoted Equity Security
NZ$1.79 NZ$1.95

A brief explanation of any of
the figures above necessary
to enable the figures to be
understood
This announcement should be read in conjunction with the
attached management commentary and financial statements for
the six months ended 31 December 2018, media release and
investor presentation.

Authority for this announcement
Name of person

authorised
to make this announcement
David Collins
Chief Financial Officer
Contact phone number +64 4 8964220
Contact email address David.Collins@chorus.co.nz
Date of release through MAP

25/02/2019

Unaudited, but reviewed financial statements accompany this announcement. The auditors
have issued a clear review report.

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Corporate Action Notice
(for a Distribution)

Page 1 of 2

Section 1: issuer information
Name of issuer Chorus Limited
Financial product name/description Ordinary Shares
NZX ticker code CNU
ISIN (If unknown, check on NZX
website)
NZCNUE0001S2
Type of distribution
(Please mark with an X in the relevant
box/es)
Full Year Quarterly
Half Year X Special
DRP applies X
Record date Close of trading on: 19/03/2019
Ex-Date (one business day before the
Record Date)
18/03/2019
Payment date (and allotment date for
DRP)
16/04/2019
Total monies associated with the
distribution
$41,427,126
Source of distribution (for example,
retained earnings)
Retained earnings
Section 2: distribution amounts
Total amount $0.131944
Cash per financial product $0.095000
Supplementary distribution $0.016765
Section 3:
Is the distribution imputed
Fully imputed
Partial imputation
No imputation
If fully or partially imputed, please state
imputation rate as % applied
100%
Imputation tax credits per financial
product
$0.036944

Page 2 of 2



Resident withhold tax amount per
financial product
1

$0.006597
Section 4: distribution re-investment plan (if applicable)
DRP % discount (if any) 3%
Start date and end date for determining
market price for DRP
18/03/2019 22/03/2019
Date strike price to be announced (if not
available at this time)
26/03/2019
Specify source of financial products to
be issued under DRP programme (new
issue or to be bought on market)
New issue
DRP strike price per financial product unknown
Last date to submit a participation
notice for this distribution in accordance
with DRP participation terms
5pm (NZ time) 20/03/2019
Section 5: authority for this announcement
Name of person authorised to make this
announcement
David Collins
Chief Financial Officer
Contact phone number +64 4 896 4220
Contact email address David.Collins@chorus.co.nz
Date of release via MAP 25/02/2019