Meridian Energy Limited 2020 Full Year Financial Results

Full Year Results25 August 2020MELUtilities

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M e r i d i a n E n e r g y L i m i t e d ( A R B N 1 5 1 8 0 0 3 9 6 ) A c o m p a n y i n c o r p o r a t e d i n N e w Z e a l a n d
L e v e l 2 , 5 5 L a d y E l i z a b e t h L a n e , P O B o x 1 0 8 4 0 , W e l l i n g t o n 6 1 4 3

m e r i d i a n e n e r g y . c o . n z
Stock Exchange Listings NZX (MEL) ASX (MEZ)
Meridian delivers strong result – focused on a clean
energy future
26 August 2020
Meridian Energy has reported a strong financial outcome for the FY20 year powered by record generation and
solid retail sales growth on both sides of the Tasman.
Group EBITDAF
1
increased by 2% to $854 million. Net profit after tax decreased 48%, reflecting higher
depreciation on previously revalued assets and movements in forward prices and rates on financial instruments
used to manage risk (non-cash, fair value movements). Underlying net profit after tax
2
(which removes these fair
value movements) decreased by 5%.

Increased retail performance in both New Zealand and Australia supported higher EBITDAF. In addition, Meridian
generated a record amount of electricity in New Zealand, supported by improved wind farm availability and lake
inflows that were 115% of average.

Ordinary dividends increased by 3% in FY20, however the company has now ceased its capital management
programme.

Chief Executive Neal Barclay says “FY20 was another successful year for our Company and we were particularly
pleased with the continued growth in our customer businesses. Financially it was a solid year for Meridian with
another record EBITDAF result, although net profit after tax was lower. But there are significant challenges on
the horizon, particularly the global impact of the COVID-19 pandemic and, the closure of the Tīwai Point
Aluminum Smelter. These changes will affect the way in which we operate our business and we are confident we
have the team and the strategies to manage through these uncertain times”.
The volume of electricity sold to customers increased by 18% and 24% in New Zealand and Australia
respectively. Customer numbers were also well up in both countries.
“Our customer numbers were higher than they were last year, and we also increased our overall customer
satisfaction ratings. Our retention rates continued to improve, and our Meridian brand sets the benchmark for
customer retention in New Zealand.

“Powershop New Zealand was named Energy Retailer of the Year at the Deloitte Energy Excellence Awards, and
Meridian came out on top of the major retailers in Consumer New Zealand’s power satisfaction survey. And in
Australia, Powershop was once again named greenest power company by Greenpeace,” Mr Barclay says.

“Throughout the COVID-19 challenge we have maintained full operational capability and we have supported all
our customer segments affected by this pandemic. We have worked to find payment solutions that suit customers

1
EBITDAF is a non-GAAP financial measure comprising of earnings before interest, tax, depreciation, amortisation, changes in
fair value of hedges, impairments and gains of losses on sale of assets.
2
Underlying net profit after tax is a non-GAAP financial measure comprising net profit after tax adjusted for the effects of
changes on fair value of hedges and other non-cash items. A reconciliation between net profit after tax and underlying net profit
after tax can be found at the end of this release.

m e r i d i a n e n e r g y . c o . n z
PG 2

and made sure their power is not unfairly disconnected. We also have not charged any late-payment fees or
credit-reminder fees to customers across our brands in New Zealand and Australia,” says Barclay.
Just after financial year end, Rio Tinto announced that it was terminating its electricity supply contract with
Meridian Energy.

“Meridian worked with the industry to offer the smelter what we believe was a good deal worth $50 million per
annum from day one, increasing to close to $60 -70 million per annum over the next three years,” says Barclay.

“Despite our efforts the owners have made the decision to terminate the electricity supply agreement with
Meridian in August 2021 and close the smelter. We have engaged with the smelter owners on the possibility of
extending the closure period from one year to four years, At this stage we are not aware if an extended closure
proposition is acceptable to them.

"Rio Tinto’s decision is hugely disappointing for the Smelter workforce and the Southland community and this
outcome is not one that Meridian would have chosen. However, given the age of the facility, a decision to close
was probably inevitable within this next decade in any event.

“NZAS leaving New Zealand creates an imperative for our country to use it as an opportunity to further reduce
our emissions and our reliance on fossil fuels. Meridian will work with government, industries and our customers
to support the future electrification and decarbonisation of the New Zealand economy,” says Barclay.

“The electricity sector is a big part of the solution to our emissions challenge. As the market adapts to this new
future we will see the market harness the renewable generation and transmission assets required to power
growth in the number of electric vehicles on our roads and the electrification of stationary energy uses, ending
our country’s current dependence on fossil fuels. Meridian is focussed on helping the country move rapidly to that
future,” adds Barclay.
Rio Tinto’s exit from New Zealand also means that the Meridian Energy Board has made the tough decision to
defer the construction of its Harapaki wind farm in the Hawke’s Bay.
“While the business case for Harapaki is very sound, the market needs time to adjust to Rio Tinto’s decision to
exit New Zealand. We’re still confident that we’ll build Harapaki in the future,” says Barclay.
Meridian’s full integrated report can be found here.
Underlying net profit after tax reconciliation ($M)
Financial year ended 30 June 2020 2019
Net profit after tax 176 339
Underlying adjustments
Hedging instruments
Net change in fair value of electricity and other hedges 113 (58)
Net change in fair value of treasury instruments 48 63
Premiums paid on electricity options net of interest (20) (17)
Assets
(Gain)/loss on sale of assets - (3)
Impairment of assets 58 5
Total adjustments before tax 199 (10)
Taxation
Tax effect of above adjustments (58) 4
Underlying net profit after tax 317 333

m e r i d i a n e n e r g y . c o . n z
PG 3

ENDS
Neal Barclay
Chief Executive
Meridian Energy Limited

For investor relations queries, please contact:
Owen Hackston
Investor Relations Manager
021 246 4772

For media queries, please contact:
Polly Atkins
External Communications Manager
021 174 1715

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Meridian
Energy
Limited.
Integrated
Report 2020.
Renewing
Our Future.

Renewing
Our Future.

Meridian Integrated Report 2020
02
Introduction
03Climate action is more important than ever
05Focusing on what’s important
08We are one of New Zealand’s largest organisations
12What matters to us and our stakeholders
14
Directors’ statement
15Our commitment to effective governance
24
Chair and CEO overview
25Successfully navigating a range of challenges
31What drives us
32
Championing change
34A leader in one market; a challenger in the other
37Supporting fairness and efficiency
41Leadership means speaking up when it counts
45Reducing our own carbon footprint
51Working with our customers to take action
56Energy hardship intensifies during a pandemic
60
Optimising our relationships
62We want our people to feel they belong
67Bringing through the best people
69Refining our approach to safety
72Getting the most out of our assets
76Working with our partners for good
80Valuing natural resources
83Strong inflows, disruptive outages
86
Sizing up the years ahead
88Supply and demand needs time to find a new level
91Continuing to grow our customer bases
96
Rewarding strong performance
107Additional disclosures
124
Financial statements
173Financial auditor’s report
177GRI Standards assurance report
179Global Reporting Initiative (GRI) Content index
184Directory
Menu

Introduction
2
Meridian Integrated Report 2020
Introduction
2

Climate action is more
important than ever
The world has changed for all of us this year. This year,
global issues have grabbed everyone’s attention. The
significant scale and impact of the fires in Australia
highlighted the need for action on climate change.
Protests in the United States have drawn global
attention to racial inequality. And the global COVID-19
pandemic has exacerbated existing inequality and
political tensions in many countries, overwhelming
public health systems and wreaking havoc on local and
regional economies. All three have highlighted the
threat levels and complexities that humanity now faces.
In this context, what we do at Meridian matters even more
– generating affordable, clean, renewable power is key to
taking us all into a more equitable and sustainable future.
We believe that it is within our power – as businesses
and individuals – to create a sustainable future that is
regenerative and restorative, where global warming is
contained to 1.5 degrees, we are no longer socially divided
by wealth, gender, race or culture, and biodiversity is a
part of our everyday lives. This is an urgent task given
our current trajectory to runaway climate change and
biodiversity loss that threatens the viability of our society
and economy. This urgency drives Meridian’s purpose of
Clean Energy for a Fairer and Healthier World and directs
us to take action towards that vision of a positive future.
The crucial role of energy
Access to energy is fundamental to how we live today.
We need energy to do our work, live our lives and power
our cities and industries – without it, we are left in the
dark, literally. But just as COVID-19 has prompted us to
rethink the way we live our day-to-day lives, the Australian
bushfires made it clear that it is also time for New Zealand
and Australia to be rethinking and renewing our future in
terms of the energy we use and how we use it.
The energy required to power our lives and societies
needs to come from renewable sources. The electricity
sector in New Zealand is advanced on that score, and all of
Meridian’s electricity generation is renewable. We harness
the amazing power of wind, water and sun to create
clean energy for a fairer and healthier world. In Australia,
the legacy of thermal fuels is proving harder to overturn.
Powershop is providing Australian consumers with a unique
3
Meridian Integrated Report 2020
3
Introduction

point of difference that will enable us to continue to grow
and stand out as the best choice for those Australian’s
wanting more environmentally friendly choices.
Greater accessibility
Beyond the electricity sector, Aotearoa has a unique
opportunity to use our highly renewable electricity grid
to take the carbon out of how we move around and how
we produce many of our products. But to really make a
difference, energy must also be affordable, and we need
to play our part in reducing energy hardship. Our goal is to
make the renewable energy we generate as accessible as
possible to as many households, businesses and industries
as possible. It’s why we pioneered the abolition of prompt-
payment discounts in New Zealand and why we continue
to press for reforms in how power is priced and distributed.
Sustainability underpins success
As the COVID-19 pandemic has shown, the world we
think we know can change around us. We made these
systems that govern our lives, and when we need to, we
can recreate them. The actions we’ve taken in Aotearoa
to address the pandemic should give us all confidence to
take actions for our climate and to create a better future for
ourselves and those who’ll come after us. Looking ahead,
we believe that sustainable businesses will be the winners.
We want to make meaningful contributions to both the
human impacts on the planet and a more equitable society.
The success of our business shows that financial returns and
social responsibility are interdependent, not either/or. At
Meridian, we look to work together to power how people
live, acknowledge how embedded we all are in the natural
environment, and deliver our investors strong returns. If
you’ve invested in Meridian Energy, bought power from
us and/or supported the changes we seek, you’re already
contributing to renewing the future of all of us.
Let’s make the changes that matter.
Together we have the power to make a difference.
4
Meridian Integrated Report 2020
Introduction
4

We rely on the effective management of a wide range of
resources, including our physical assets, our technology
platforms, our financial capital, our people and their
knowledge, our many relationships and the natural
resources we use to generate electricity and value.
We want to report openly, responsibly and objectively on
how the resources we’ve utilised and the decisions we’ve
made have delivered positive changes for the future.
Our process
In FY18 we undertook a detailed assessment to identify
the issues that our stakeholders recognised as material
to our business and therefore of interest in our reporting.
To ensure our reporting was relevant to our sector, we
undertook a review of the Global Reporting Initiative (GRI)
topics. We also reviewed material topics regularly reported
by electricity generators and retailers in New Zealand and
Australia. And we identified the United Nations Sustainable
Development Goals (SDGs) that we believe are most
relevant to our business model. Our commitment to making
a renewable difference for the future led us to focus on
two SDGs – SDG7 Affordable and Clean Energy and SDG13
Climate Action – as these apply to areas where we believe
we can make the biggest difference. Finally, we examined
Board papers together with those issues that had received
media coverage, and our risk register.
Once we had a long list of relevant topics, we prioritised
them on the basis of their importance to our stakeholders
and their impacts on our business.
We gathered the views of stakeholders through a series
of internal workshops that included people in our business
who actively engage with the many groups with which we
interacted. The workshops generated valuable insights into
who our key stakeholders are, the levels and nature of the
impacts we have on them, their importance to us, and the
impacts, real and potential, that they have on our business.
We used the outputs from this process in two ways: they
fed into the development of our sustainability roadmap;
and we used them to consider our stakeholders and
what they most want to know from us in preparing
our annual report.
Focusing on what’s important
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Meridian Integrated Report 2020
5
Introduction

Updating our materiality assessment
Each year we update our assessment of the issues that
are material to our business, and on what and how we
should report. For example, we ask our Board to review
the previous year’s report and make recommendations,
and we also look at how the matters we’ve raised have
been covered in the media.
For FY20 we’ve adjusted the rating of energy hardship,
based on the topic’s importance to the Government as
reflected in the Electricity Price Review, and in the context of
the global COVID-19 pandemic and its current and potential
impact on New Zealanders. We’ve also added two new
material topics – dam safety and information security.
Please refer to page 12 for more information on what
matters to us and our stakeholders.
In addition, we’ve again been assessed for inclusion in
the Asia Pacific Dow Jones Sustainability Index and we’ve
responded to the Carbon Disclosure Project (CDP). The
CDP is a not-for-profit that runs a global disclosure system
for investors, companies, cities, states and regions to be
transparent about their environmental impacts. We use
feedback from these assessments and our assurance
processes to continually improve our disclosures.
We plan to undertake another full materiality
assessment in FY21.
6
Meridian Integrated Report 2020
Introduction
6

7
Meridian Integrated Report 2020
Introduction

*EBITDAF is a non-GAAP financial measure comprising of earnings before interest, tax, depreciation, amortisation, changes in fair value of hedges, impairments and gains or losses on sale of assets.
We are one of
New Zealand’s
largest organisations
FY20 EBITDAF*
$854m
Up
Net assets
$5,083m
Down
Total market capitalisation
$12b
Up
FY20 Revenue
$3,405m
Down
8
Meridian Integrated Report 2020
Introduction
8

New Zealand
Government
Listed on both the
Majority owned by the
NZX & ASX
Legislated maximum share
10%
9
Meridian Integrated Report 2020
Introduction
9

This is our business
AU
Retailing as:
Powershop, and providing energy services
to DC Power and Kogan Energy
1 Office
84 Employees
(16 at our power stations)
174K
Customer connections (incl gas)

2
3
FLUX
1 Excludes Tīwai Point Aluminium Smelter
2 Offices
162 Employees
(3 in the UK)
Licensing the Flux platform
and the Powershop brand
4 Clients
(Software)
NZ
Retailing as:
Meridian Energy
Powershop
5 Offices
867 Employees
(86 at our power stations)
Customers
Generation
324K
Customer connections
~15% national retail volume
1
~30% national electricity generation
57
10
Meridian Integrated Report 2020
Introduction
10

These are our customers
Powershop Australia
136K
Electricity customer connections
38K
Carbon-neutral gas customer connections
Now in South Australia
Powershop can now be found in
four Australian states, giving us
broad coverage in Australia
Under licence
The Powershop brand and Flux
platform operate under licence to the
large UK electricity retailer npower
155K
npower customer connections
AUFLUX
NZAS
A large financial contract with
New Zealand Aluminium Smelter
(NZAS) at Tīwai Point, equivalent to
around 38% of Meridian’s generation
Meridian
235K
Customer connections:
residential
business
corporate
agri-business
Powershop NZ
89K
Customer connections:
residential
business
NZ
Transitioning to the Flux platformAll on the Flux platformAll on the Flux platform
Now over 513,000 customer connections
on the Flux platform in total
This is what we generate
AUFLUX
NZ
New Zealand’s largest
electricity generator
~30% national electricity generation
1.7M
Equivalent to the power
needs of around
200,000 New Zealand
homes yearly
Equivalent to the
power needs of
around 1.7 million
New Zealand
homes yearly
White Hill
West Wind
Mill Creek
Te Āpiti
Te Uku
Waitaki and
Manapōuri
generate around
50% of NZ’s
total hydro
200K
Generating <1% of the
National Energy Market
50K
Equivalent to the
power needs of
around 116,000
Australian
homes yearly
Equivalent to the
power needs of
around 50,000
Australian
homes yearly
Mt Millar
Mt Mercer
Hume
Burrinjuck
Keepit
116K
Enough electricity for about 167k homes yearly
11
Meridian Integrated Report 2020
Introduction

Financial performanceClimate actionPutting customers firstResponsible generationGreat place to work
Material topics
Financial impacts
of climate change
Sustainability leadershipFinancial performance
Good governance, ethical
behaviour, reporting
Operational
carbon emissions
Action on
climate
change
Pipeline of
generation
options
Plant
performance
Contribution to
public policy
Customer
satisfaction
Electricity pricing
Support for
vulnerable
customers
Dam safetyProcess safety
Contribution to
local communities
Environmental
compliance
Impact on
biodiversity
Impact on water
Access to water
(strength of
relationships
related to water)
Diversity and
equal opportunity
Employee
engagement
Retaining
expertise
Occupational
health and safety
Stakeholder
Interests
Sustainability
used as a driver of
long-term value
Good corporate
citizen
Commercial
rationale for use
of capital
Dividends
Transparency
and good
communication
Fair and robust
process for the
tendering and
selection of
suppliers
Climate action for a net
zero carbon future
Security of supply
Open, fair and
efficient markets
in New Zealand
and Australia
Easy customer
experience
Fair price for electricity (inequality)Assets are safe for their communities
Investment in
local prosperity
Long term planning
Protecting the
environment
Water quality
(and rights and
interests in water)
Respect and value
the role of Māori
in Aotearoa and
kaitiakitanga
Diverse and
inclusive culture
Fair pay
Growth and
development
opportunities
Safe working
environment
Key
Stakeholders
Investors, the Crown, shareholdersSuppliersNZ Public (and their elected officials)Electricity sectorRegulatorsCustomersAsset communitiesLocal governmentNgāi Tahu and other iwiEmployees
7. View our Climate Action Plan here
8. Maintain our portfolio of generation options with a
disciplined and appropriate expenditure of capital
Asset maintenance
9. Support regulators in their efforts to create efficient
markets that deliver security of supply
10. Invest in delivering outstanding customer
experience through the use of our Flux
platform View fluxfederation.com
11. Support to customers in financial hardship
above and beyond regulatory requirements.
View our Medically Dependent or Vulnerable page
Competitive pricing and support for an open
and efficient market
12. Work closely with local communities from the
time of consent to address concerns when it
comes to building new assets View our
Stakeholder Engagement Guidelines
13. Contribute to asset communities as a local employer,
through our staff as community members, and
through our ‘Power Up’ community funds
View our Power Up Community fund page
14. Long-term consents and operational
management plans
15. Biodiversity projects related to our assets and
local communities View our Environmental
Management Guidelines
16. Manage our own impacts and contribute to
the debate when it affects our ability to operate
our hydro power stations View our Water
Stewardship page
1 7. Work closely with Ngāi Tahu and other iwi to
recognise the kaupapa of Ki Uta Ki Tai (from the
mountains to the sea), and ensure their interests are
reflected in management and decision-making
View our Stakeholder Engagement Guidelines
18. Rainbow Tick, Gender Tick, Diversity Policy
View our Diversity and Inclusion page
19. Commitment to living wages and pay equity
View our Remuneration Policy
20. Internal learning and development programme
View our Careers page
21. Support a culture of health and safety
View our Code of Conduct
7891011121314151617181920
21
13
Meridian Integrated Report 2020
Introduction
13

Directors’ statement
14
Meridian Integrated Report 2020
Directors’ statement
14

This integrated report has been
prepared using the International
Integrated Reporting Council’s
Integrated Reporting Framework.
The Board has established
processes to ensure the quality
and integrity of this integrated
report and has entrusted
Management with preparing
and presenting it accordingly.
About this report
This integrated report reviews
our financial, economic, social and
environmental performance for the
year ended 30 June 2020 (FY20).
It reflects our deeply held view that
the way in which Meridian uses the
natural forces at its disposal and takes
care of its customers, people, local
communities, iwi and the environment
renew our future, both as a business
and collectively. Our approach
strengthens Meridian’s ability as a
significant publicly listed company
to deliver attractive shareholder
returns and to deliver value to all
of our stakeholders.
Our commitment to
effective governance
The Meridian Group is listed
on both the New Zealand Stock
Exchange (NZX) and the Australian
Stock Exchange (ASX), and we’re
substantial in scale in a New Zealand
context, with operating revenue in
FY20 of $3,405 million, EBITDAF
of $854 million and net assets of
$5,083 million, although we have
a modestly sized workforce of
around 1,110 people who are directly
employed by or contracted to us, and
third parties who provide us with ICT,
facilities’ management and meter-
reading services. We’re one of
New Zealand’s largest companies
on the NZX, with a total market
capitalisation in excess of $12 billion.
15
Meridian Integrated Report 2020
Directors’ statement
15

Our Board structure
Meridian recruits Board
members with a range of skills
and experience. Biographies of our
Directors and the Executive Team
are available at meridianenergy.
co.nz/who-we-are. All Directors
are independent directors.
While the Company’s Constitution
doesn’t require it, Meridian’s Board
has a collective view that Ngāi Tahu,
who has mana whenua (authority
over the land) over the majority of
the South Island where Meridian’s
assets are, is such an important
stakeholder that a position on the
Board should always be considered.
This role is currently undertaken
by Anake Goodall, the former Chief
Executive Officer of Te Rūnanga o Ngāi
Tahu (Ngāi Tahu’s governing body).
Three new female Board members
have all joined our Board this financial
year, bringing gender balance to our
Board as well as contributing to the
Board’s expertise. Michelle Henderson
brings electricity industry, engineering
and safety experience. Julia Hoare
is a former financial audit partner
from PwC, where she established
and lead PwC’s sustainability and
climate change practice while
remaining a tax partner. And Nagaja
Sanatkumar brings extensive retail
business insights, particularly from
her leadership roles more recently
at Amazon and Icebreaker, another
New Zealand brand with a strong
brand based on sustainability.
Our commitment
to effective governance
Boards have an important role
in directing companies’ activities.
Strategy days and regular
meetings allow the Meridian
Energy Board members to share
their thoughts and challenge
Management on the direction
they wish to take the business.
The Board closely monitors how
the company is managing the various
long-term drivers of value, such as
retaining access to water, building
employee engagement, investing in
new assets, enhancing environmental
performance, satisfying customers
and building the Company’s
reputation and brand.
The Board also sets Meridian’s
overall appetite for risk and its
approach to risk management.
A summary of Meridian’s key risks
can be found in the FY20 Corporate
Governance Statement available at
www.meridianenergy.co.nz/assets/
Investors/Governance/Meridian-
Energy-Corporate-Governance-
Statement.pdf and they are discussed
throughout this report. Information
on the remainder of the risks and how
we manage them are also detailed
where relevant throughout this report.
Meridian complies with the NZX
Corporate Governance Code
recommendations in all material
respects (other than in respect of
recommendation 3.6 – see page 122
for more details).
We are majority owned by the
New Zealand Government, and
we are precluded by legislation
from having any other significant
shareholders (i.e. more than
10% holding).
The report covers the performance
of the Meridian Group, including
the Parent Meridian Energy entity,
Powershop and Dam Safety
Intelligence in New Zealand,
Meridian Energy Australia and
Powershop Australia, and Flux
Federation (our electricity retailing
software business which operates
in New Zealand and the United
Kingdom). Unless otherwise stated
the information in this report covers
the Group, although for many of
the topics discussed the Parent
company is the primary focus as the
other businesses are smaller in size
(less than 10% of Group revenue).
Powershop New Zealand has been
operationally included into the
Meridian Parent company results,
and as such is no longer reported
on separately in terms of non-
financial information.
To ensure all data in this report is
as accurate as possible, the financial
information has been prepared in
accordance with appropriate financial
reporting standards (see page 131)
and audited by Mike Hoshek for
Deloitte Limited on behalf of the
Auditor-General (see the Independent
Auditor’s Report on page 173). The
non-financial information has been
prepared on accordance with
the Core requirements of the
Global Reporting Initiative’s (GRI’s)
Sustainability Reporting Standards
(the ‘GRI Standards’) and this
sustainability content has been
subjected to a limited assurance
engagement by Deloitte Limited
(see the Independent Accountant’s
Assurance Report on page 177).
The Meridian Group Greenhouse Gas
Inventory Report FY20 is summarised
on pages 47 and 48 of this report, and
has been subjected to a reasonable
assurance engagement by Deloitte
Limited New Zealand.
16
Meridian Integrated Report 2020
Directors’ statement
16

View Director Biographies at:
www.meridianenergy.co.nz/who-we-are/
about-meridian/board-of-directors
Our Board
Nagaja Sanatkumar
Independent Director
Michelle Henderson
Independent Director
Julia Hoare
Independent Director
Mark Verbiest
Chair
Anake Goodall
Independent Director
Mark Cairns
Independent Director
Jan Dawson
Independent Director
Peter Wilson
Deputy Chair
Diversity of perspective is important.
Meridian recruits Board members with
a range of skills and experience.
Meridian Integrated Report 2020
17
Directors’ statement
17

The role of committees
Committees support the Board by
providing detail on specific issues
and having subject matter experts
provide insights and advice. The
Committees, and the Board as
a whole, cover the spectrum of
resources on which we depend for
our business success, feed into the
Company’s overall strategy and
direction and keep the Board well
informed of day-to-day operations.
The Board and Committees also
oversee progress on our SDGs. The
Safety and Sustainability Committee
has responsibility for our progress on
SDG7 Affordable and Clean Energy
and SDG13 Climate Action. The Board
as a whole oversees our progress as a
responsible generator, particularly as
it pertains to the Waitaki reconsenting
process. Our Remuneration and
Human Resources Committee
oversees Meridian’s maintenance
and development of being a great
place to work. Our Audit and Risk
Committee assists the Board in
fulfilling its responsibilities in matters
related to risk management and
financial accounting and reporting.
18
Meridian Integrated Report 2020
Directors’ statement
18
ResourcesBoard oversight
Financial and manufactured capital
(our cash and assets)
Audit and Risk Committee
TechnologyFull Board
Human capital
— Our people and expertisePeople and Remuneration Committee
— Health and safetySafety and Sustainability Committee
Relationships and reputation

— Our peoplePeople and Remuneration Committee
— All other groupsSafety and Sustainability Committee and full Board
Natural resourcesSafety and Sustainability Committee
Significant risks around resources,
including risks due to climate change
Audit and Risk Committee
The role of people and culture
Our people are critical to the
successful delivery of our strategic
goals, policies and processes.
The Board has approved a wide
range of policies that Management
are required to adhere to and
incorporate in the company’s
operations, including a Code of
Conduct, the content of which all
employees agree to honour. The
Code provides guidance to staff on
the behaviours that are expected
and how to handle the issues and
challenges they may face. Our
approach to remunerating our
people is on page 96.
If you’d like further information
As a business with a significant retail
shareholder base, we’re constantly
looking for ways to be as accessible
and open as possible.
We hope you’ll be able to attend the
2020 annual shareholder meeting
in person. The Board has a policy of
rotating the location of the meeting
between Auckland, Wellington and
Christchurch, and our 2020 meeting
will be held in Wellington. We’ll
provide you with more information
closer to the time in the Notice of
Meeting. If you can’t attend, you’ll
find a link to a live webcast on the
Meridian website.
In the meantime, if you’re a
shareholder, please feel free to ask
questions, request information or
comment on this report via Meridian’s
website or by directly contacting
the Investor Relations Manager at
investors@meridianenergy.co.nz.

Our Executive Team
19
Meridian Integrated Report 2020
Directors’ statement
19
Neal Barclay Chief Executive
Tania Palmer Chief People Officer
Mike Roan Chief Financial Officer
Lisa Hannifin Chief Customer Officer
Guy Waipara General Manager, Generation and Natural Resources
Jason Woolley General Counsel and Company Secretary
Claire Shaw General Manager, Corporate Affairs and Sustainabillity
Jason Stein Chief Executive, Meridian Energy Australia Pty Limited,
Powershop Australia Pty Limited
Nic Kennedy Chief Executive, Flux Federation Limited
Chris Ewers General Manager, Wholesale

Wholesale market price variation
Wholesale market prices can
vary significantly in New Zealand
depending on what technologies
are able to generate electricity at
any point in time. Prices can be
significantly affected by rainfall, as
well as gas availability. In the short to
medium term, we manage this risk
for our physical supply customers by
offering fixed pricing. We also offer
financial contracts to businesses that
buy directly from the spot electricity
market to limit their exposure to price
variations. These contracts, plus a
range of other financial instruments
and forward contracts, also help
control our commercial risks around
price volatility and they smooth out
our earnings across the year.
Dynamics of supply and demand
The wholesale market price is
affected by the dynamics of supply
and demand. If there is too much
electricity available, the wholesale
price goes down. If the over supply
persists, older, less economic
generation plant may shut down in
response. Alternatively, if demand
for electricity is rising over time, the
wholesale price will generally track
up. If there is not enough generation
to meet rising demand, the price
for the available electricity goes
up, improving the business case for
investment in new power stations.
The additional generation made
possible by the investment in new
plant restores the supply-demand
balance and the price stabilises again.
Supply-demand balance
There are a number of other
factors that can affect the
supply-demand balance. NZAS
closing the Tīwai Point aluminium
smelter, for example, will reduce
reduce demand. Climate change
also has the potential to increase
or reduce supply, and to increase
demand, because climate action
regulations could increase electricity
consumption through electric
vehicles and electric boilers. Equally,
the transition required to respond
to climate change could lead to
disruption of emissions-intensive
industries, decreasing demand.
The electricity market
The ways in which we can sell our
electricity and determine a price
are controlled by the electricity
market, and by our Government and
regulators. As our main regulator in
New Zealand, the Electricity Authority
can also decide if our behaviour has
been fair to our competitors and
to our customers. We contribute to
conversations on public policy to help
ensure the markets we operate in are
open, fair and efficient. We believe
markets with these characteristics
benefit consumers and enable our
long-term success.
Vertical integration
20
Meridian Integrated Report 2020
Directors’ statement
20

Our customers
Our customers are businesses,
households and other electricity
companies. We have three retail
brands: Meridian and Powershop
in New Zealand, and Powershop
in Australia. Because there are
so many retailers, we need to
differentiate ourselves from our
competitors with strong brands
and by marketing through traditional
media and digital channels.
Meridian and Powershop Australia
are attractive to customers because
of our positioning as a leader in
sustainability. This is demonstrated
by our Group commitment to
renewable electricity and climate
action. Powershop New Zealand
is attractive because it offers
customers control over their
energy usage and cost in a fun
and engaging way.
Short supply chains
All our energy retailing brands have
very short supply chains because
the physical assets used to distribute
electricity and meter its use are
managed by national and local lines
and metering companies. Our retail
operations’ requirements are similar
to those of many corporate offices.
They include physical facilities and
ICT, sales and marketing, billing
and governance functions.
Brands profitably
In order for us to operate our
brands profitably in Australia and
New Zealand we need to keep
earning our customers’ loyalty by
providing excellent experiences
through our frontline service teams.
Those teams and our customers
rely on platforms like Flux to
ensure they can interact smoothly
and effectively. Flux also markets
its software platform and the
Powershop brand under licence
in the UK.
Great customer experience
21
Meridian Integrated Report 2020
Directors’ statement
21

Quality of our assets
Our ability to generate electricity
safely and reliably is dependent
on the quality of our assets and
ICT systems, supported by highly
skilled employees, suppliers and
contractors. Our assets are maintained
by Meridian staff (with some of our
wind farms also maintained by third
parties) who contract with a range of
local and global suppliers to provide
us with the parts and components
needed to build and maintain our
generation assets, as well as a mix of
general engineering consumable and
specialist parts suppliers, and service
providers including ICT and facilities’
management providers.
Renewable energy
Because there are environmental
implications around how we use our
assets to generate renewable energy,
we are dependent on securing and
maintaining resource consents.
To do this we need to win and
maintain the trust of stakeholders,
ranging from Ngāi Tahu and other
iwi to water users, local government
and communities. We achieve this
by making a long-term and deep
commitment to the communities
and areas in which we operate
through engagement, employment
and consultation on important
issues such as water, biodiversity,
environmental impact, local
prosperity and long-term planning
and environmental management.
Without the buy-in of our people,
stakeholder groups, communities
and local government, we could not
operate our assets the way we do,
which would materially affect our
profitability and reduce the amount
of renewable electricity available
for Aotearoa’s power needs.
Retain the right staff
Our ability to attract and retain
the right staff is central to our
competitiveness in all our business
activities, and is supported by a
strong employer brand grounded
in our purpose, values and behaviours,
and how successful we are in creating
a great place to work.
Publicly listed
Finally, as a publicly listed
company we are dependent on
our investors having continued
faith in our performance.
Responsible generation
22
Meridian Integrated Report 2020
Directors’ statement
22

The wholesale market
The money we make from the
electricity we generate on the
wholesale market, plus the margin
we receive from our business and
residential customers, combined
with our skill in managing trading
conditions, determines how much
revenue we make in a year. A portion
of that is then reinvested into our
business to support our ongoing
programme of work. The value
of our shares is what the market
perceives our company to be
worth at any given point in time.
Our shareholders
Our shareholders, including the
Government (which holds a 51%
share), earn money from their
investments in us in two ways: from
the dividend payments we make
every year; and from the changes
in our share price, which allow them
to sell our shares when they are
more valuable and potentially buy
more shares when prices dip. No
guarantee of our current or future
share price is given or implied. We
also have other investors in long-
term funding arrangements with us.
All our investors decide to invest
based on their own knowledge,
the information we share with them,
and their own understanding of
the markets. And investors want
us to be able to tell them a strong
and compelling story around our
management of all the components
that make up how we create value –
our financial reserves, physical assets,
technology platforms, our people, the
relationships we have with a variety
of stakeholders, and natural resources
(particularly water) – hence this
integrated report.
Reliable returns
23
Meridian Integrated Report 2020
Directors’ statement
23

Chair and

CEO overview
24
Meridian Integrated Report 2020
24
Chair and CEO overview

Meridian’s commitment to our
purpose of Clean Energy for a Fairer
and Healthier World continues to
be the number one driver of all our
business decisions, and being closely
aligned with this purpose in FY20
was more important than ever.
FY20 was another successful year
for our Company and we were
particularly pleased with the
continued growth in our customer
businesses. Financially it was a solid
year for Meridian with another record
EBITDAF result, although net profit
after tax was lower.
But there are significant challenges
on the horizon, particularly the global
impact of the COVID-19 pandemic
and the closure of the Tīwai Point
Aluminium Smelter. These changes
Successfully navigating
a range of challenges
will affect the way in which we
operate our business and we are
confident we have the team and the
strategies to manage through these
uncertain times.
Throughout the COVID-19 pandemic
to date we have maintained full
operational capability. For Meridian,
as an essential service, this was vital,
and we believe the electricity sector
and Meridian performed very well
during this time.
25
Meridian Integrated Report 2020
25
Chair and CEO overview

Supporting our customers
We’re fortunate that the product
we generate, and sell is needed by
everyone and that the COVID-19
pandemic’s impacts on demand
and on our business to date have
not been significant.
However, we know that the impacts
on many other New Zealanders,
businesses and the economy
as a whole will be far more
extensive and long lasting. We’re
committed to playing our part
to ensure our economy recovers
as quickly as possible and to help
shape the opportunities that will
deliver sustainable economic and
environmental outcomes.
During FY20, we supported
customers who have been impacted
by COVID-19 by working with them
to find payment solutions that suited
them and by making sure their power
wasn’t unfairly disconnected. We also
didn’t charge any late-payment fees
or credit-reminder fees to customers
across our brands in New Zealand
and Australia.
We also wanted to do something
more to help families facing hardship,
so we matched the $1 million donation
made by generous Kiwis to our charity
partner KidsCan. With that additional
money KidsCan is able to help kiwi
kids in hardship get a hand up, and
the best chance at a good education,
to help break the cycle of poverty.
The ongoing impacts of COVID-19
pandemic have reinforced our view
that sustainable businesses will be the
most successful businesses over time.
Healthy customer growth
Our Powershop business in Australia
once again achieved outstanding
growth as customers continued
to choose cleaner energy options.
Customer numbers grew by 24%
and there was a 24% increase in
the volume of electricity sold whilst
gas sales were up three-fold.
Powershop’s success in Australia
means we’re looking at new
generation options the business
will need in the medium term.
These include the 130-megawatt
Rangoon wind farm development
project that Meridian Australia has
in northern New South Wales, which
could power 58,000 homes a year.
Whilst supporting customers
through the COVID-19 pandemic
we were also able to continue to
grow our retail market share.
In New Zealand across both our
Meridian and Powershop brands,
we grew customer numbers by
7% and the volume of energy sold
by 18%. Even more pleasing, our
overall customer satisfaction ratings
and our customer retention rates
improved and set the benchmark
for the industry.
26
Meridian Integrated Report 2020
26
Chair and CEO overview

Rio Tinto to exit New Zealand
In October 2019 Rio Tinto announced
that it was undertaking a strategic
review of New Zealand’s Aluminium
Smelter at Tīwai Point in Southland.
On 9 July 2020, Rio Tinto announced
the termination of its contract with
Meridian and its intention to close the
smelter by 31 August 2021. Rio Tinto’s
decision is hugely disappointing
for the smelter workforce and the
Southland community of which
we’re a part.
During the Rio Tinto strategic review,
Meridian was able to put together a
package of contractual amendments
that would have delivered a significant
reduction in the cost of delivered
energy to the smelter, well in excess
of $60 million per annum. We believe
that this offer was fair and in the
interests of Meridian shareholders and
New Zealand. As part of that package
we asked the smelter owners to
commit to Aotearoa for a period of
at least four years. They were unwilling
to make that commitment and have
instead chosen to close the smelter.
The loss of roughly 13% of electricity
demand within a relatively short
space of time will undoubtedly be
disruptive for our industry and our
company in the short term. However,
the smelter closure also creates
significant opportunities for Meridian.
Our team is working hard to mitigate
the short-term effects of the closure,
maintain our balance sheet strength
and build an even stronger business
for the future.
Electricity Authority
preliminary undesirable
trading situation decision
In December 2019, an energy trading
company (Haast Energy Trading)
and a group of small retailers lodged
a claim with the New Zealand
Electricity Authority that Meridian
and other South Island hydro
electricity generators had caused an
undesirable trading situation (UTS)
in November and December 2019.
On 30 June the Electricity Authority
released its preliminary decision,
determining that a UTS had occurred
between 3 and 18 December 2019.
Management and the Board have
looked closely at the Authority’s
preliminary decision and we do not
believe our actions constituted a UTS.
We believe the preliminary decision
failed to adequately consider the
enormity of the flood conditions that
Meridian was managing during that
time. We were also very concerned
with the way the preliminary decision
was incorrectly portrayed in the
media as there was no cost to most
consumers. Meridian’s financial
statements have been prepared on
the basis that the Authority confirms
its preliminary decision and resets
prices during the trading periods
concerned. The impact on the financial
statements by making this adjustment
was insignificant.
We have made our position clear in
our submission to the Authority. We
have also suggested amendments to
the Electricity Industry Participation
Code may be necessary to clarify the
Authority’s expectations of generators
in similar situations. Meridian cares
deeply about its customers and the
environment. It was our priority to
put safety and our environmental
obligations first as this significant
rainfall event unfolded.
27
Meridian Integrated Report 2020
27
Chair and CEO overview

Deferring investment at Harapaki
The Board made the tough decision
in August to defer the build of our
Harapaki wind farm.
While the business case for Harapaki
is very sound, the market needs time
to adjust to Rio Tinto’s decision to exit
New Zealand. We’re still confident
that we’ll build Harapaki in the future.
Transmission Pricing
Methodology
Just before the end of the
financial year the Electricity
Authority released its final
decision on the Transmission
Pricing Methodology guidelines.
We’re pleased with the outcome
and that a benefits-based approach
to transmission pricing was adopted
by the Authority. It will provide
certainty, be fairer and enable a more
efficient investment in and use of the
transmission grid. This new approach
will be positive for Meridian financially.
Climate action
We believe that in FY20 there
was considerable progress made
at the policy level to support
Aotearoa in meeting its zero-
carbon aspirations.
The Climate Change Response
(Zero Carbon) Amendment Bill
was passed, the Climate Change
Commission was established, and
we also now have a package of
Emissions Trading Scheme (ETS)
reforms that are the key policy
tool driving emission reductions.
In June a water reform package
outlined changes to how freshwater
is managed and steps to improve
water quality within a generation.
These changes protect the flexibility
and output of existing large hydro
to support further decarbonisation,
aim to improve the health of our
waterways and, importantly, better
recognise the values and perspectives
of tangata whenua.
Most of the energy New Zealand
consumes still comes from burning
fossil fuels – the fuels that power our
cars and provide heat for industries,
homes and public infrastructure.
Combined, these energy sources
account for 41% of New Zealand’s
greenhouse gas emissions. About
half of that’s from transport.
The opportunity to electrify these
energy uses and to power our nation
with renewable electricity is massive
for our country and, once it’s done,
will go a long way to eliminating our
non-agricultural emissions. Meridian
remains totally committed to working
with government, industries and
our customers to support the future
electrification and decarbonisation
of the New Zealand economy.
Our employees are committed
Our survey in May 2020 saw
employee engagement scores
across Meridian, Powershop and
our Australian companies lift to
85%, demonstrating that our people
are proud to work for Meridian and
committed to the company.
This is also reflected in the fact
that nearly 60% of Meridian Group
permanent New Zealand employees
now own shares in the company.
Together, employees in the MyShare
scheme are now one of the 100
largest shareholders in Meridian, out
of a total of 47,000 shareholders.
28
Meridian Integrated Report 2020
28
Chair and CEO overview

We introduced Learning Teams
The most important thing at
Meridian is that our people go
home safely at the end of each
day – but in FY20 we had too
many significant injuries for
our liking.
We made changes to ensure that our
health and safety culture continued
to evolve and improve, and to ensure
that our people were as physically
and mentally protected as possible.
Most notably we introduced Learning
Teams as a replacement for the ICAM
(Incident Cause Analysis Method)
incident investigation process.
Learning Teams is a self-managing
process that allows those close to an
incident to engage more openly in the
review of what happened. As a result,
we’re already seeing a significant
lift in the levels of transparency and
learning that we glean from incidents.
Refreshing our executive
During the year there were four
new appointments to Meridian’s
Executive Team.
Lisa Hannifin was appointed as Chief
Customer Officer, Claire Shaw was
appointed as General Manager
Corporate Affairs and Sustainability,
Jason Woolley was appointed as
General Counsel and Company
Secretary and Jason Stein, who was
previously Meridian Energy’s General
Counsel and General Manager of the
Office of the CEO, was appointed
CEO of Meridian Energy and
Powershop Australia. All these roles
were filled internally after recruitment
processes that included external
candidates. These appointments
show we have talented people in
our organisation, that our people are
encouraged to step up, and that the
skills and leadership we’re developing
here test very well against the market.
Flux increases capability
We’re increasing Flux’s capability
in New Zealand to better support
the migration of Meridian customers
to the platform.
However, this increase and the
associated complexity with Meridian’s
customer base meant that the
migration project, which commenced
during 2018, was extended by nine
months and it’s now scheduled for
completion during September 2021.
The benefits of and business case for
the project remain very positive.
The ongoing relationship between
Flux and Powershop UK is now
uncertain. Powershop UK is owned
by npower who in turn are now part
of E.ON Group.
In the U.K, E.ON and Kraken
Technologies, part of Octopus Energy
Group, entered a strategic agreement
regarding E.ON’s UK residential and
small and medium-sized business
(SME) energy retail businesses.
It is our understanding that E.ON
intend to migrate their customer
base (including the npower customer
base) to the Kraken platform.At this
stage we are unsure of npower’s
intentions in relation to the Powershop
UK brand.
2020 financial results
Meridian Energy has reported a
strong financial outcome for the
FY20 year powered by record
generation and strong retail sales
growth on both sides of the Tasman.
Group EBITDAF

increased by
2% to $854 million. Net profit after
tax decreased 48%, reflecting
higher depreciation on previously
revalued assets and movements in
forward prices and rates on financial
instruments used to manage risk
(non-cash, fair value movements).
Underlying net profit after tax
1

(which removes these fair value
movements) decreased by 5%.
The Board has declared a final
ordinary dividend of 11.20 cents per
share, 4% higher than the previous
year. This brings the total ordinary
dividends declared in FY20 to 16.90
cents per share, 3% higher than last
year’s, and represents a 75% payout
of free cash flow.
1. Net profit after tax adjusted for the effects of
changes in fair value of hedges and other non-cash
items. A reconciliation is provided on page 30.
29
Meridian Integrated Report 2020
29
Chair and CEO overview

Meridian also declared an interim
special dividend of 2.44 cents per
share ($62.5 million) in February
2020 under the company’s capital
management programme. With
Rio Tinto’s announcement of its
intention to close the Tīwai aluminium
smelter, the Board has now ceased
this programme.
The smelter decision also saw
rating agency Standard & Poor’s
change Meridian’s credit rating
outlook from stable to negative.
Undaunted in our pursuit
of our long-term goals
All in all FY20 was quite a year,
but our commitment to 100%
renewable energy and helping
Aotearoa to achieve its zero-carbon
goals remained our focus.
The electricity sector is a big part
of the solution for New Zealand’s
greenhouse gas emissions.
The industry can and will build
the renewable generation and
transmission assets required to
power growth in the number of
electric vehicles on our roads and
the electrification of stationary
energy uses, ending our country’s
current dependence on fossil fuels.
Meridian will play its part in moving
rapidly to that future.
Underlying net profit after tax reconciliation ($M)
Financial year ended 30 June
FY20FY19
Net profit after tax176339
Underlying adjustments
Hedging instruments
Net change in fair value of electricity and other hedges113(58)
Net change in fair value of treasury instruments4863
Premiums paid on electricity options net of interest(20)(17)
Assets
(Gain)/loss on sale of assets–(3)
Impairment of assets585
Total adjustments before tax199(10)
Taxation
Tax effect of above adjustments(58)4
Underlying net profit after tax317333
We also need to preserve our
backbone of hydro generation in
Aotearoa, which can flex and fill
the gaps between intermittent
wind and solar generation. It’s
the key to renewable expansion.
We need to do all this while keeping
electricity affordable – both to
ensure that we’re playing our part
to reduce energy hardship and to
ensure the right priority is put on vital
decarbonisation projects. We need
to focus on projects that will help to
transform our society and economy
in the next decade as we reduce our
reliance on fossil fuels and transition
to clean energy to respond to the
climate emergency facing us all.
We are most definitely on the right
path. New Zealand’s electricity
market is globally recognised as
world-leading and well-functioning.
The International Energy Agency
says New Zealand is a success story
for the development of renewable
energy without the aid of government
subsidies and recent Ministry of
Business, Innovation and Employment
(MBIE) data shows the average New
Zealand household electricity bill is at
its lowest in real terms since 2009.
On behalf of the Board and the
Executive Team, a sincere thank you
to our shareholders, our customers,
communities and partners, and the
Meridian team for your continued
support for and investment in cleaner
energy for a fairer and healthier world.
30
Meridian Integrated Report 2020
30
Chair and CEO overview

What
drives us
Our purpose of Clean Energy for a
Fairer and Healthier World is at the
centre of everything we do. To deliver
on our purpose we have focused
on areas in which we can make a
meaningful difference, and that also
align with our values and goals of
climate action, putting our customers
first, being a great place to work and
our role as a responsible generator.
We strive to achieve these goals by
‘being gusty’, ‘being in the waka’
and ‘being a good human’ to ensure
that we are able to deliver positive
outcomes for New Zealand and for
our shareholders.
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31
Meridian Integrated Report 2020
31
Chair and CEO overview

Championing change
32
Meridian Integrated Report 2020
32
Championing change

Championing change
We operate in two markets with
quite different characteristics.
The New Zealand market draws
on largely renewable energy
sources, while the Australian
market continues to lean heavily
on fossil fuels.
33
Meridian Integrated Report 2020
33
Championing change

A leader in one market;
a challenger in the other
While both countries are currently
making important changes to the
ways their markets operate, our
ability to influence those changes
differs between the two.
Important roles in each country
Given that our presence in
New Zealand is very different
from our presence in Australia, our
approaches to achieving a fairer and
healthier world in each market vary.
In Aotearoa we’re the largest
generator of renewable energy,
generating around a third of all the
country’s energy from our hydro
dams and wind farms. This position
sees us advocating for changes that
align with our purpose of clean energy
for a fairer and healthier world. We’re
fortunate in New Zealand to have a
market that functions well and delivers
good outcomes for consumers.
In Australia our market share is
much smaller and we’re seen as a
challenger brand. We provide
conscientious consumers with the
ability to offset the carbon emissions
associated with their electricity and
gas usage and innovative products
that allow them to engage with their
energy use, backed by 100%
renewable generation and our
participation in the Climate Active
Carbon Neutral Standard (a scheme
run by the Australian Government).
In New Zealand, the Climate
Change Response (Zero Carbon)
Amendment Act 2019 has enabled
the establishment of an independent
Climate Change Commission,
emissions reduction targets for 2050,
and rolling five-yearly budgets to track
progress towards the targets. The
Climate Change Response (Emissions
Trading Reform) Amendment Act
2020 and related regulations help
Aotearoa to achieve its emissions
reduction target by setting a cap
on the volume of units auctioned
under the ETS.
In Australia, while there’s still no
bipartisan federal energy (and related
carbon) policy, regulatory changes at
state and federal levels are being
implemented to improve retail
customer outcomes.
Despite the prevalence of coal as a
fuel in Australia, we remain confident
that decarbonisation will continue and
that we’ll see a further development
of renewable assets as thermal
generators retire in the coming
decade and beyond. With the
emergence of large-scale batteries,
such as the battery we’re proposing
for our existing Hume hydro power
station in New South Wales, we expect
a new era of firmed renewables to
prevail in the medium to long term.
The Australian market’s wholesale
energy prices have reduced in the past
few years due to a range of external
factors. However, over time we expect
to see demand for firmed renewables
grow as thermal generation plant
continues to retire at the end of its
design life.
We advocate for clean energy in both
markets, as well as competitive pricing
for our customers. In addition to our
participation in regulatory processes,
we are also members of a variety of
organisations advocating on issues
we care about. Details of these
organisations can be found on page 123.
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Three brands in two markets
Since 2013, we’ve operated three
distinctive and well-established
customer brands. Our Meridian
brand appeals to customers looking
for a renewable energy generator
that’s deeply connected to the
environment and New Zealand.
In Australia, our Powershop brand
focuses on sustainability, taking a
challenger position against the
country’s high reliance on coal.
To support this position, Powershop
was recognised as Australia’s greenest
power company by Finder in 2020 and
by Greenpeace for the third year in a
row. Powershop in New Zealand offers
customers personal control with its
‘shop’ proposition and attracts them
with its appealing marketing.
While our Australian business
represents 10% of our Group annual
revenue and is a relatively small player
in that market overall, it continues to
grow rapidly as more and more
Australian consumers look for
cleaner options. In FY20, Powershop
Australia’s white-label agreement
with Kogan led to the launch of
Kogan Energy, a mass-market
offering that combines digital
technology and low cost.
Our certified carbon-neutral retail
gas product currently only available
in Victoria had 38,000 customer
connections as at 30 June 2020, up
from 23,000 the previous year, with
customers who were either electricity
customers and added gas, or new
customers who signed up for dual fuel.
While we’re committed to only
renewable energy in New Zealand,
the gas option is a clean alternative for
our Australian customers who buy
their power from a market that’s
dominated by coal generation.
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Supporting fairness
and efficiency
While decisions don’t always go
our way, we continue to advocate
for changes to the market that
deliver great outcomes for market
participants, customers and
the environment.
We’re fortunate that, in both
the New Zealand and Australian
markets, regulators are committed
to supporting open, fair and efficient
markets. This matters because,
while the conversations in the two
markets are different, changes to
public policy that lead to changes
to legislation or regulation in either
New Zealand or Australia (including
electricity regulation, changes in
policies to support renewable energy,
and new or changed environmental
regulations) have the potential to
significantly impact our business.
Such changes could adversely affect
our sales, costs, relative competitive
position, development initiatives or
other aspects of our financial and
operational performance, or force
undesired changes to our business
model. Whilst we remain aware of the
risk, what we have seen on both sides
of the Tasman over the last few years
is net positives in terms of regulatory
outcomes, particularly as they relate
to climate action.
In FY20 Meridian was involved in
public policy and electricity regulation
decisions that didn’t always go our
way. But as a key player in the energy
sector, we have a responsibility to
advocate for a market environment
and a wider regulatory environment
that are conducive to achieving our
commercial and sustainability goals
and provide the best outcomes
for consumers.
Rebalancing transmission costs
In October we responded to the
Electricity Authority’s 2019 Issues
Paper: Transmission Pricing Review,
saying that, in our view, there were
complex problems with the current
Transmission Pricing Methodology
(TPM) and that the existing TPM
guidelines needed to be rethought.
We said that without urgent reform,
New Zealand would face the
prospect of ongoing inefficient grid
use, significant inefficient investments
and a development path that would
cost consumers billions of dollars
more than it should.
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We strongly supported the proposed
new TPM guidelines that would
deliver significant benefits to
New Zealand consumers. In June
2020, after more than 10 years
of consultation and debate, the
Electricity Authority issued new TPM
guidelines that mean the HVDC (the
inter-island link) will be treated in the
same way as other AC transmission
assets, and South Island generators
will no longer be the only ones
that pay for the HVDC (the inter-
island link). The Electricity Authority
estimates that Meridian’s overall
transmission bill will reduce by $27
million per annum when the new
reform package is implemented
in 2023.
Crucially, the Authority estimates
that over time the new guidelines
will deliver significant benefits to
consumers (around $1.3 billion
overall). The change will also support
New Zealand’s transition to a low-
carbon economy by incentivising
more efficient investment and
the use of the grid.
Preliminary ‘undesirable
trading situation’ finding
Meridian was very disappointed
to be the subject of a UTS claim in
FY20 and a related trading conduct
complaint from a group of energy
traders and independent retailers.
The matter related to exceptional
rainfall and inflow events in November
and December 2019, and an allegation
that Meridian and other South Island
generators could have generated
additional electricity using some of
the water we were forced to ‘spill’
through our hydro gates and
structures during those events.
On the final day of the financial
year, the Electricity Authority released
its preliminary decision, indicating
that it believed Meridian Energy had
been involved in a UTS between
3 December and 18 December 2019.
The Authority’s analysis suggested
that just under 0.5% of the total
amount of water that Meridian
either generated or spilled past
its structures during December
had been avoidable. It concluded
that this had resulted in South Island
wholesale power prices being higher
than they should have been during
the period of the UTS.
We have a different view of the event.
We’ll now engage with the Authority
as it works through its full process and
makes its final decision later in 2020.
At the same time, an Electricity
Authority advisory group proposed
rule changes that would redefine
trading conduct standards under the
Electricity Industry Participation Code.
Meridian supports the intent of the
proposed changes, as the trading
conduct standards are in our view
currently opaque, lacking in clarity
and in need of reform. We’ve asked
the Authority to run its own
consultation on any changes rather
than rely on the work of an advisory
group, and suggested that a full
cost-benefit analysis be undertaken.
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Highly competitive markets
New Zealand has one of the world’s
leading energy systems in terms of
price, resilience and sustainability
according to the World Energy
Council, which also ranks our energy
system as the 10th best in the world.
The electricity sector is the most
competitive it’s ever been. There
are currently 39 retail brands in
New Zealand and 33 retailers in
Australia, and most are engaged in
aggressive pricing campaigns and
making new offers that are highly
price competitive.
In Aotearoa, half a million house-
holds change plans every year and a
further 60,000 compare what they’re
paying with other offers but decide
not to switch.
The nature of competition is also
changing and barriers to competition
are reducing, enabled by more new
technologies, open and available
data and more liquid hedge markets.
This is great for consumers and
requires retailers like Meridian
to constantly innovate to remain
relevant for their customers and to
become more efficient to remain
price competitive.
Price will always be a big factor in
the electricity sector, but sustainable
retail success requires more than
just a sharp price. Meridian focus is
on delivering what customers tell
us they value, in the most efficient
ways possible. We look to gain, retain
and add value for our customers
through our brand, our offers and
our customer experience. At the
same time, we pursue reducing
our costs through simpler systems,
insightful customer data and a fast
adaptation to technological and
other opportunities.
Electricity Price Review
final report released
In October 2019 the Government’s
Electricity Price Review panel released
its final report and recommendations.
Meridian considers that the report
and the commitment from the
Government to implement various
recommendations are balanced, and
well-considered, and reflects the fact
that, overall, the sector is performing
well for New Zealanders. Meridian
was particularly pleased with the
recommendations to support people
who struggle to pay their energy
bills and the proposals to phase out
the low-user tariff regulations and
encourage all retailers to stop clawing
back prompt payment discounts.
In October 2018, Meridian made
the decision to replace prompt
payment discounts with a fairer
pricing structure. We believe this
change has helped those customers
who struggle to pay their bills on time
as they no longer lose their discount
as a result of late payment.
The Government has since written
to all retailers asking them to remove
prompt payment discounts. Meridian
is pleased to be able to report that
off the back of the Government’s
letter, Genesis Energy and Contact
Energy have announced that they’ll
stop requiring prompt payment
as a condition of their customer
pricing offers.
Contributing to Australian
regulatory changes
In Australia we interact with a
range of regulators and agencies to
advocate for a fair, transparent and
equitable trading market. In FY20,
for example, we worked with the
Australian Energy Market Operator,
the Australian Energy Regulator
and the Australian Energy Market
Commission on a range of proposed
market operations and rule changes.
We also worked with the Australian
Competition and Consumer
Commission and the Essential
Services Commission of Victoria
on matters related to consumer
data and protection.
Our lobbying efforts focused on price
regulation, specifically the Victorian
Default Offer and the Default Market
Offer. We suggested that relevant
regulators, in setting pricing for energy
in both jurisdictions, consider recent
changes to the costs that retailers were
facing overall and as a specific result of
the COVID-19 pandemic.
We also made a submission on the
Australian Government’s Technology
Investment Roadmap, supporting
the development of technologies to
reduce the reliance on higher-emission
alternatives, and highlighting the need
for a technology-agnostic approach.
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Being a 100% renewable energy
company is great but it’s not enough.
We’re taking action in our business,
working with our customers, our
suppliers and our people to help
effect change. We also speak
up strongly for the policies and
regulations we think will make the
biggest difference in meeting the
climate challenge head-on in the
next decade of change.
Timely consents support
climate action
Resource and other consents govern
our ability to contribute as fully as
possible to renewable development
that can displace thermal generation
and decarbonise the New Zealand
economy. The policy framework for
consenting new renewable electricity
generation projects in New Zealand
requires improvement in our view.
Part of the problem is that while the
current Resource Management Act
1991 explicitly requires a consideration
of climate change factors, it doesn’t
in our opinion allow for fair and
balanced conversations on resource
consents for renewable electricity
generation. We believe it’s important
that stakeholders have the time to
engage appropriately on proposed
changes and developments covered
by the Act, but the lack of movement
in accelerating the resource consent
process remains a significant hurdle
for us, even as the price of building
new renewable generation continues
to fall. It’s heartening to see the
Government indicating that it wishes
to see the resource consent process
take less time, and we look forward
to seeing this progress.
Leadership means
speaking up when it counts
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100% renewable electricity
has consequences
In February 2020, we made a
submission to the Ministry of Business,
Innovation and Employment on
accelerating renewable energy and
energy efficiency. In our submission
we said that we were concerned that
the goal of pursuing 100% renewable
electricity generation could result in
worse emission outcomes as it could
drive up the cost of electricity,
reducing the incentive to electrify
transport and industrial process heat.
We pointed out that modelling by the
Ministry, the Interim Climate Change
Committee, Meridian and others
consistently showed that even under
business-as-usual scenarios,
renewable generation would increase
to around 95% of market share by
around 2035 without any need for
regulatory change. We believe that
the real prize for New Zealand is
the electrification of sectors of the
economy that are heavily reliant
on fossil fuels (transport and
industrial heat).
We continue to stand by this analysis
and position, and advocate for the
pursuit of radical emission reductions
throughout the economy. This may
mean leaving the last couple of
percentage points of the electricity
grid alone until the rest of the energy
consumption in New Zealand has
been decarbonised.
A high cost per tonne of carbon
abated also rules out solar as an
effective climate action response in
the near term, although solar can
provide resiliency of electricity supply
in emergency situations (when paired
with batteries), provide support for
distribution networks, and increase
energy independence for those
who can afford solar systems.
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Tackling the last 5%
In FY20 we looked to increase the
overall renewable energy available
to us in the event of dry conditions
by unlocking access to additional
storage at Lake Pūkaki, the country’s
largest hydro storage lake. Access
to the extra storage at Lake Pūkaki
could provide enough electricity
to power the equivalent of around
50,000 homes.
We’ve had access to 545 gigawatt
hours (GWh) of storage in Lake Pūkaki
during dry conditions under existing
resource consents for some time,
but engineering and operational
constraints have limited how much
of this could actually be used. When
we reviewed this arrangement in FY20,
we re-evaluated those constraints and
we now believe access to the remaining
367GWh is feasible. This additional
storage has now been incorporated
into Meridian’s operations and we’ll
continue to refine it. In essence, the
country’s largest battery just got bigger.
Emissions Trading
Scheme strengthened
Perhaps not surprisingly given our
commitment to a sustainable future,
we view the current electricity market
structure alongside a reformed
New Zealand ETS as a key enabler
of achieving the best long-term
outcomes for New Zealand and the
objective of reducing emissions at
least cost.
We have been, and continue to be,
a strong supporter of ETS reforms,
including the Climate Change
Response (Emissions Trading Reform)
Amendment Bill. Well signalled limits
on the availability of emission units
and the resulting expectations of
emission pricing will enable a market-
led response that identifies the most
efficient investments in emission
reductions over time, across all
technologies, and throughout the
economy. Because of this, businesses
and individuals will be able to invest
with confidence, and competition and
innovation will flourish as we reduce
emissions over time.
Our view is that emission reductions
should begin as soon as possible
to put Aotearoa on track to meet
our emission-reduction targets and
ensure that mitigation steps are not
left until it’s possibly too late. For the
ETS-based approach to be a success,
the Government must be willing to
accept the higher emission prices
that will result from the sinking lid
and resist the urge to intervene
unless there’s a strong case for
doing so. Leaving climate change
mitigation until later would also push
the cost of emission reductions onto
later generations.
In most sectors of the economy the
ETS provides an appropriate price
incentive to ensure New Zealanders
favour low-emission alternatives.
However, for the ETS to be an
effective policy tool, we believe it
must operate to limit emissions over
time and send increasingly strong
price signals as economy-wide
emissions reduce. To date this hasn’t
been the case, as the ETS excludes
some sectors and offers others
fixed-price options that allow them
to emit as much carbon as they want
to at those prices. Our view is that
the Government should generally be
cautious in considering additional,
sector-specific interventions. This is
because there could be unintended
consequences and a risk that emission
reductions are not as efficient as they
could be under an economy wide ETS.
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Climate-related disclosure
may become mandatory
We strongly support steps to
encourage investment that will help
the transition to a net-zero carbon
economy. In July 2019 we were the
first New Zealand-listed issuer to
publish a climate risk disclosures
report, prepared in line with the
recommendations of the Task
Force on Climate-related Financial
Disclosures (TCFD). Since then, the
Government has said it intends
to move to a position where the
effects of climate change become
routinely considered in business and
investment decisions in New Zealand.
A mandatory disclosure regime
would be consistent with existing
commitments made by large sections
of the business community through
the Climate Leaders Coalition to assess
and disclose climate change risks.
We believe that other large-scale
entities shouldn’t be excluded from
the disclosure regime because they’re
privately owned. Disclosure by these
large, privately owned firms would
further enhance the resilience of
the New Zealand economy.
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In FY20 our actions ranged from
planting trees and electrifying our
fleet to once again reporting on how
climate change impacts our business.
Climate action remains the key focus
of our sustainability efforts. As always,
being a 100% renewable energy
generator means that our emissions
from generating electricity are zero,
and our renewable generation is
our most important contribution
to climate action. But to make a
meaningful difference we must
also show leadership.
Understanding how
climate change impacts us
In FY20 in our TCFD report (using the
guidelines published by the TCFD),
and in our submission to the CDP,
we for the first time evaluated the
potential financial impacts of climate
change on our business – both the
physical impacts and the impacts
on electricity demand from climate
action policy. It’s important that we
understand this information internally
as we make plans for the future, and
it’s increasingly of value to investors
as they seek to understand which
companies have better long-term
prospects than others in the context
of climate change.
Overall, climate change isn’t good for
anyone’s business. The pathway we’re
on globally at the moment, towards a
4-degrees-warmer world (or higher)
will have devastating impacts on our
societies, economies and natural
resources. It’s not hard to see how this
will cause some significant problems
for businesses, given that businesses
can only thrive in societies and natural
environments that are stable, resilient
and sustainable.
Our analysis of how climate change
affects us is undertaken out to
2050, as this is the horizon we
use for making decisions on new
investments. In that timeframe, the
physical impacts of climate change
are much the same, regardless of the
temperature increase scenario chosen
from the Intergovernmental Panel on
Climate Change. For us as a generator
from natural resources, these physical
impacts are both positive and
negative.
In the next 30 years we’re likely
to get more water in our hydro
catchments, and that water may
change in seasonality to better match
demand (potentially lifting medium-
term revenue by $12 million per
year). Higher temperatures are likely
to have a mild positive impact on
electricity demand through increased
air-conditioning requirements and
increased irrigation, offset by reduced
Reducing our own
carbon footprint
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winter heating loads (with a potential
positive impact of $5 million per
year). However, higher temperatures
will also increase the likelihood of
extreme rainfall events, which may
then increase the ‘probable maximum
flood’ that we optimise our hydro
operations to cope with. In response
we may need to upgrade our dam
structures and change our flood-
management rules, which could have
an annualised potential financial
impact of $11 million from when the
probable maximum flood increases.
So, without strong climate action
policy, in Aotearoa and globally, there
is a risk of our having no business in
the very long term, but in the next
30 years the impacts are fairly neutral.
Strong climate action policy is also
a mix of positive and negative for our
business. Strong policy settings are
likely to increase electricity demand
from increased requirements for
charging of electric vehicles and the
transition of some industrial heat
processes from coal to electricity.
Combined, this increase in medium-
to long-term revenue could be $7
million per year. Policy that increases
the percentage of renewable
electricity on the grid may be positive
for us in that we could build more
renewable energy power stations;
however, it’s also likely that price
volatility will increase, with a potential
negative medium-term financial
impact of up to $40 million per year.
We could also see a sector of the
economy negatively affected by
climate policy in a way that reduces
demand. For example, a significant
reduction in the dairy industry could
reduce our revenue by $12 million
to $17 million per year.
For context, our revenue in FY20
was $3,405 million, so the potential
impacts that we have so far estimated
are not large in scale in the context
of our business. But the true impact
of climate change is hard to estimate,
particularly if the world fails to move
to a path to reduce emissions radically
in the next two decades. For more
details, see our TCFD report.
Green Finance Framework
Investors are increasingly looking to
demonstrate a “green” investment
portfolio as evidence of their
commitment to sustainability, and
many use frameworks, standards,
rating agencies and others to find
investments that meet their criteria.
Meridian rates highly in the MSCI,
and is also listed on the Dow Jones
Sustainability Asia Pacific Index and
submits to the CDP. These are all
tools that investors use to positively
screen their investment portfolio.
In addition, In FY20 we have
developed a Green Finance
Programme which covers both
existing and future issuances of
debt instruments. This Programme
recognises Meridian’s commitment,
leadership and investment in
renewable energy and will be used
to finance or refinance sustainable
projects and assets such as new or
existing renewable energy projects
or assets.
The Programme enables Meridian
to connect its company strategy and
vision to its financing requirements and
provides investors with an opportunity
to invest in a range of accredited debt
instruments. The proceeds of these
have been allocated (notionally) to
eligible Wind and Hydro assets that
meet the Market Standards.
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Half by 2030, and zero
through offsets right now
Part of understanding how climate
change impacts us, is understanding
our own carbon footprint. We’ve
restated our base year (FY19)
operational emissions to include
emissions from Transpower,
New Zealand’s transmission provider.
This brings our base year operational
footprint up to just over 47,000
tCO2e (tonnes of CO2 equivalent).
Our goal is to cut this in half by
2030. In FY20 our major reduction
initiative was to use our own Certified
Renewable Energy product for our
Scope 2 emissions. We also cut
emissions from air travel and
employee commuting significantly,
given the travel restrictions that we
all experienced, and we have an
internal project underway to lock in
those reductions for the long term.
We also continue to make progress
on the electrification of our fleet.
What we can’t reduce we offset
using Gold Standard Verified Emission
Reductions, and we’ve chosen to use
those carbon credits to support wind
farm and solar projects in India. In the
longer term, our Forever Forests
programme will enable us to grow
our own carbon offsets.
Meridian Group greenhouse gas emissions
tCO2eFY19FY20
Scope 11,0991,177
Scope 21,60517
Scope 3 operational4 4,57443,165
Total Group operational emissions**47, 2 7844,359
Scope 3 energy purchased and onsold*
New Zealand electricity00
Australian electricity and gas 611,822813,054
Scope 3 one-time construction and upgrades6832
Total Group value chain emissions659,1688 57, 4 4 5
* Group operational emissions are offset, using Gold Standard Voluntary Emissions Reductions (GS VERs)
and credits purchased by Powershop Australia as part of NCOS, and taking into account credits cancelled
by suppliers against their own emissions.
** Emissions from our electricity purchased and onsold are calculated using market-based methodologies.
In New Zealand we use annual netting off methodology. In Australia we use the National Carbon Offset
Standard (NCOS) administered by the Austrailan government.
Progress against our Half by 2030 goal (tCO2e)
4
7
,
2
7
9
44,
3
5
9
0
10,000
20,000
30,000
40,000
50,000
60,000
F
Y
1
9
F
Y
2
0
F
Y
2
1
F
Y
2
2
F
Y
2
3
F
Y
2
4
F
Y
2
5
F
Y
2
6
F
Y
2
7
F
Y
2
8
F
Y
2
9
F
Y
3
0
Acutal
Target
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Working with our suppliers
The bulk of our carbon footprint is in
our supply chain. This makes our work
to engage our suppliers crucial if we’re
to achieve our reduction targets.
In the generation side of our
business we have local and global
suppliers provide us with the
parts and components needed to
build and maintain our generation
assets, as well as a mix of general
engineering consumable and
specialist parts’ suppliers, and service
providers including ICT and facilities’
management providers. More than
Total operational greenhouse
gas emissions by scope (tCO2e)
Scope 1:
1,177 (3%)
Scope 2
(market based):
17 (0%)
Scope 3:
43,165 (97%)
1,1 00 people are employed directly
or contracted to us. The majority of
our work is conducted by permanent
employees, not contractors.
In our retail businesses we have
very short supply chains because
the physical assets used to distribute
electricity and meter its use are
managed by national and local lines
and metering companies. Our retail
operation requirements are similar
to those of many corporate offices.
They include physical facilities and
ICT, sales and marketing, billing
and governance functions.
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In addition to our supplier
engagement plan, we’re
investigating partnerships with
other organisations to empower
our suppliers that are small to
medium in size to take climate
action in ways that work for their
businesses and get us on our way
to a net zero carbon Aotearoa
in 2050.
Other strategies
• Hold workshops (one-to-many) for lower impact suppliers on carbon and sustainability
• Working groups for specific categories (for example sustainable events, sustainable apparel)
• Lowest risk suppliers we address at the process level (Supplier Code of Conduct)
Supplier Engagement Plan
• Criticality (risk/spend)
• Modern slavery risk assessment
• High GHG emissions
• Sustainability impacts
specific to that category
• Relationship and contract managers
• Procurement specialists
• The Sustainability Team
IdentifyEngage
Focus on high impact suppliers
• Carbon data and assessment
of modern slavery risk
• Suppliers moving from giving
us data, to reducing their impacts
• Embedded use of our
Supplier Code of Conduct.
Achieve
• Company-wide
sustainable procurement
quiz to set baseline
QuizQuizTeam-by-team workshopseLearning module
• To be completed prior
to each workshop
• Focused on goods
and services specific
to each group
• Repeat of company-wide
quiz, to evaluate training
effectiveness
Deepen our sustainable procurement capability
49
Meridian Integrated Report 2020
49
Championing change

Encouraging climate
action by our people
In FY20, we started encouraging our
people to take climate action, both at
work and in their own lives, to help
Meridian reach its goal of halving our
emissions by 2030. The first piece of
this programme ‘Move’, is one of the
five pillars of our company’s internal
sustainability culture programme.
The pillar supports our people to
change the way we get around by
encouraging low-carbon connections
and innovation in how we move
and work, locking in and improving
on the changes that we all started
during lockdown.
As part of this work and to help keep
climate action at the front of our
people’s minds, we’re also considering
the Future Fit programme offered by
Auckland City Council. This is a big
piece of work that will require all of
us, right across the business and in
our communities, to work together to
figure out how we can take significant
climate action in our everyday lives.
We all need to start making changes
to ensure our children’s future.
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Meridian Integrated Report 2020
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Championing change

From Renewable Energy Certificates
to solar and electric cars, there’s a
growing energy for change and a
real sense of momentum in our work
with customers.
Working with our
customers to take action
Our customers are wanting to be
proactive, show their support for
renewable energy, take climate
action in their own lives, and we’ve
been working on ways we can do
that together. Some of these actions
increase electricity demand, some
of them increase the amount of
renewable energy on the gird, and
all of them create closer, long-term
relationships with our customers,
creating value for them and for
Meridian and Powershop in Australia.
Pouring our energy into great beer
Energy is a vital ingredient in beer,
so we were thrilled when Wellington
craft brewer Garage Project chose
to partner with us in the production
of a special brew.
The Turbine Pale Ale partnership is a
collaboration between Meridian and
Garage Project. Our collaboration
marks the first time that a certified-
renewable-energy product has been
made available in Aotearoa. While
Garage Project’s brewery isn’t directly
plugged in to the nearby Brooklyn
wind turbine, the electricity it uses
is matched on an annual basis with
100% renewable energy generated
from that asset.
It means it can go to market with
a beautiful brew that has been
sustainably produced and truly
celebrates the benefits of being
in Wellington, the windiest capital
city in the world.
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Meridian Integrated Report 2020
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Championing change

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Meridian Integrated Report 2020
52
Championing change

Certified love for renewables
The Australian electricity market has
a formal green electricity product
scheme. In addition to offering
green power, Powershop Australia
offers electricity and gas products
that are certified carbon neutral
according to the Climate Active
Carbon Neutral Standard (a scheme
run by the Australian Government).
However, in New Zealand there’s no
regulatory framework to enable us to
offer similar products to our customers.
Off the back of the successful Garage
Project partnership, Meridian launched
its Certified Renewable Energy product
earlier this year – helping New Zealand
businesses to market themselves as
supporters of renewable energy and to
certify their electricity use as renewable,
supported by the New Zealand Energy
Certificate System.
We need to electrify transport
From both ethical and operational
points of view, we’re motivated to
support a greater electrification of
our transport system. In FY20 we
expressed strong support for the
Government’s proposal to introduce
standards and discounts incentivising
cleaner vehicles in New Zealand.
Transport is New Zealand’s second-
largest source of greenhouse gas
emissions, contributing nearly 20% of
gross emissions. The electrification of
the light-vehicle fleet is therefore one
of Aotearoa’s best opportunities for
reducing emissions and combating
climate change.
Having more electric cars on our
roads will be much better for our
environment, and of course it will
also increase demand for electricity.
The Electric Car Plan we’ve introduced
is about securing our position as a
leader in sustainability and the first
choice for customers who have electric
cars. In partnership with EECA (the
Energy Efficiency and Conservation
Authority) and a range of businesses,
we’ve been rolling out electric car
charging infrastructure around
New Zealand, including in parts of the
country where there was previously
no public charging available.
As well as supporting our customers,
we’ve been working hard on
converting our own fleet of cars
and utility vehicles. We are targeting
90% of our passenger vehicle fleet
to be electric and we reached 76.5%
as of 30 June 2020. We’ve also
committed to 100% electric vehicles
of all types by the end of calendar-
year 2025 as a signatory to the
EV100 commitment. This is putting
pressure on us to sort out the utility
and commercial vehicles we own;
however, with new models now being
released, 20% of our utility vehicles
are now electric and we’re confident
we’ll meet this ambitious goal.
Certificates are issued by the
New Zealand Energy Certificate
System and enable Meridian
business customers to match their
consumption to an equivalent amount
of our renewable energy generation.
Meridian Certified Renewable Energy
enables businesses to report their
Scope 2 electricity emissions as zero
using the market-based methodology
of the Greenhouse Gas Protocol
Scope 2 Standard.
Fisher & Paykel Healthcare, HelloFresh
and Pernod Ricard Winemakers were
among the first to adopt our Certified
Renewable Energy product.
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Meridian Integrated Report 2020
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Championing change

Case study:
The sun comes out at Lincoln
In New Zealand, Lincoln University
has become the first New Zealand
university to adopt commercial-scale
solar energy as part of its plans to
eliminate the use of coal by 2025.
The University has partnered with
us to install a 102-kilowatt-hour solar
array, the largest to be installed at a
New Zealand university.
Half the University’s energy needs are
currently met by an on-site coal boiler.
The solar array will supply renewable
energy directly to the University’s
network, which will displace some
of its coal use. Meridian is planning
additional arrays as part of Lincoln’s
$8 million investment in renewable
energy. As part of our power
purchase agreement, we’re covering
all the work and costs associated
with installation, operation and
maintenance.
Lincoln University is one of a growing
number of organisations that are
signing up for commercial solar
power purchase agreements. The
groundswell of interest in commercial
solar shows companies are excited
about the technology, and we’re
looking forward to it playing a
much bigger role in our renewable
generation mix.
Solar continues to
be vital in Australia
Installing solar panels is an important
climate- and bill-reduction action that
we encourage Australian households
to take. Through Powershop Australia
we’ve introduced a range of initiatives
to help reduce demand on the
electricity grid and help customers
save on their energy bills.
These initiatives include:
• ‘Grid Impact’, where Reposit
customers are guaranteed
GridCredits
®
– payments for
letting Powershop activate their
solar batteries at certain times;
• ‘ChargeForce’, which is offered to
customers who opt in to Grid Impact.
ChargeForce is a virtual power plant
where Powershop uses the energy
stored in a customer’s battery to
help support the electricity grid
when it’s under pressure, and pays
the customer a credit for doing so;
• ‘Curb Your Power’, a demand response
programme in which Victorian
customers curb their power usage at
certain peak demand times to help
reduce demand on the grid; and
• ‘Better Solar’, a solar advisory service
that helps customers to install solar
systems at their properties.
• Powershop Australia’s Your Community
Energy has now raised over $560,000.
The programme works where
customers choose the Your Community
Energy Powerpack when they pay their
bills – this has a premium attached to
it. Powershop then uses the premium
to support positive environmental
initiatives. Most recently, Powershop
customers helped contribute over
$100,000 to the Reef Restoration
Foundation to build two coral nurseries
that grow bleach resistant coral to
restore the Great Barrier Reef.
In addition, Powershop Australia provides
customers with data and insights so they
can use their solar power efficiently.
54
Meridian Integrated Report 2020
54
Championing change

55
Meridian Integrated Report 2020
55
Championing change

During the COVID-19 pandemic
and in the months and years of
impact ahead, we’ll continue to put
our energy and focus into supporting
customers who experience financial
hardship to keep the lights on and
their houses warm.
While prices in New Zealand are
pretty competitive and we have a
competitive market, the cost is always
too high if your house takes too much
energy to heat and your income is low.
Programmes like EnergyMate, which
we help to fund through the Electricity
Retailers’ Association of New Zealand
(ERANZ), and the Government’s new
$17 million fund for energy poverty, are
essential to ensuring that the increased
need for support for energy costs is
met as the financial consequences of
the pandemic unfold, exacerbating
the already unacceptably high levels
of energy hardship experienced in
Aotearoa. Australia has been similarly
hit and is arguably in even more need
due to the bushfires earlier this year
and its ongoing battle to contain the
spread of the virus.
Offering active support to
those hit hard by COVID-19
With the onset of lockdown there
was a significant shift in the types
of electricity demand, and indeed
the timing of peak loads, as
businesses closed and people
increasingly worked from home.
Customers looked to us for assistance,
particularly financially, as the effects
of not being able to work took hold.
In New Zealand we offer our
customers short- and long-term
personalised payment options,
no late-payment fees, offered
account reviews, provide energy
advice, and we’ve chosen not to
disconnect customers. We also put
customers on LevelPay to help them
smooth their payments over the year.
Energy hardship
intensifies during a pandemic
We also implemented a programme
to give relief to smaller businesses
struggling to meet their payments
because of COVID-19. The programme
extended across our Meridian and
Powershop brands and was offered
to SME customers that reached out
for help. Customers were offered up
to $2,500 in credit depending on their
annual consumption. The programme
ended on 30 June 2020, and in total
we gave out $400,000 in credit to
around 450 business customers.
56
Meridian Integrated Report 2020
56
Championing change

Case study:
A major investment in KidsCan
We’ve supported KidsCan’s
amazing work in communities
throughout New Zealand for
the past seven years.
In May 2020 we donated an
additional $1 million to match the
amount raised by generous Kiwis
through the charity’s ‘19 for 19’
COVID-19 appeal.
The additional support recognised
the significant increase in the need
for support among New Zealand
communities through lockdown, and
the expected impacts of COVID-19
on demand for KidsCan’s services.
At the time KidsCan was already seeing
a near 30% increase in demand for
food support, meaning it was trying to
help feed an extra 10,000 children
every day.
KidsCan provides the essentials
to children affected by poverty so
they can participate in learning.
KidsCan is levelling the playing field,
giving children whose families are
struggling the same opportunities
to learn as anyone else. We partner
with the charity to provide thousands
of Kiwi kids with basics such as food,
raincoats, shoes and socks and basic
hygiene and healthcare items.
In February 2020, KidsCan and
Meridian launched a pilot programme
to empower play by providing 20,000
sun hats to more than 200 Decile 1
partner schools and more than 50
early childhood education centres
throughout Aotearoa.
5757
Championing change
Meridian Integrated Report 2020

Supporting customers
in Australia
In Australia, we were already
supporting customers when the
COVID-19 pandemic struck, following
the measures we’d taken in response
to the ‘Black Summer’ bushfires.
Our support programme for those
affected by the bushfires included
placing all bills on hold until further
notice, offering a range of account
payment help options, offering a
hardship plan for those needing
to access relief and covering the
fees associated with connecting
energy with Powershop at new or
temporary accommodation.
Powershop donated $25,000 to
Red Cross and $25,000 to the
WWF bushfire appeals to support
communities and wildlife. On 10
January 2020 we launched the
‘Power It Forward Powerpack’,
allowing Powershop customers
wanting to support those affected
by the bushfires to do so, simply
by purchasing power. The Power
It Forward Powerpack included a
6.6c/kWh premium, which was
pooled and credited (excluding
GST) to the electricity accounts
of customers in bushfire-affected
communities.
We set a target of $150,000, which
we hoped to achieve by the end
of March 2020. In just five weeks,
12,500 customers raised $192,000.
Powershop initially kick-started this
fund with $20,000, bringing the
grand total to $212,000. The funds
went directly towards the bills of
Powershop customers in 265
affected postcodes.
58
Meridian Integrated Report 2020
58
Championing change

New Zealand disconnections*
* Data from the Electricity Authority
(emi.ea.govt.nz/Datasets/Retail/Disconnections)
** FY19 restated with four quarters of data
*** FY20 data only has 2 quarters of data from EA
and therefore does not cover market behaviour
during lockdown period
The ongoing challenge
of energy hardship
Power bills in New Zealand are the
cheapest they’ve been in 11 years,
down $156 per year for the average
household after inflation since 2015.
Since 2011 in New Zealand there
has been no real price increase
for consumers arising from the
competitive parts of the electricity
supply chain (generation and retail).
However, job uncertainty and low-
quality housing have increased
concerns around affordability and
staying warm in winter. As part
of our commitment to affordable
energy, we’ve responded by offering
support to vulnerable customers in a
range of ways. These are customers
who’ve self-identified as financially
vulnerable or struggle to pay their
bills from time to time.
Our support includes a dedicated
page on our website, regular
communication, individualised
support from specialist staff, tips to
improve energy management and,
0
.
3
5
%
0
.
2
0
%
0
.
1
3
%
0
.
1
3
%
0
.
1
0
%
0
.
0
8
%
0
.
33%
0
.
2
3
%
0
.
1
8
%
0
.
2
5
%
0
.
2
3
%
0
.
0
6
%
0
.
2
5
%
0
.
3
0
%
0
.
33%
0
.
3
9
%
0
.
4
2
%
0.0%
0.1%
0.2%
0.3%
0.4%
0.5%
FY15FY16FY17FY18FY19**FY20***
0.18%
Meridian
Powershop NZ
NZ average
where appropriate, introductions
to budgeting advice services and
government agencies such as Work
and Income or the EnergyMate
programme delivered through
ERANZ.
We continue to focus on lowering
our disconnection rates, and
during lockdown adopted a policy
of no disconnections.
59
Meridian Integrated Report 2020
59
Championing change

Optimising our relationships
60
Meridian Integrated Report 2020
60
Optimising our relationships

Optimising our relationships
As a business we engage with
a wide range of stakeholders in
New Zealand and Australia.
Strong relationships not only help
our business to grow and prosper –
they also enable us to explore
new ways to renew the future.
61
Meridian Integrated Report 2020
61
Optimising our relationships

In a year that tested our people,
engagement held up very well.
However, we’re not making
the progress we’d like on
gender diversity.
We want our people
to feel they belong
It’s a sign of our commitment to our
team that, on the eve of lockdown,
Neal Barclay told all staff that no-
one would lose their job because
of the COVID-19 pandemic. Neal’s
commitment recognised the impacts
on people and the business of what
was happening and the need to
help people to get through. That
commitment played out in how our
teams took it upon themselves to
support the business and customers.
Strong engagement
across the Group
Engagement scores across Meridian,
Powershop and our Australian
companies increased to 85%, which
was a fantastic result and above the
Global Top 25% of 78% and the
New Zealand Top 25% of 77%.
Commitment to
belonging and flexibility
In FY20 the Meridian parent
company evolved our diversity and
inclusion approach to introduce and
promulgate the sense of ‘belonging’.
We want our people to feel they
belong here, that they’re empowered,
included and accepted. To foster this,
we established a Belonging steering
group to advance and mature these
ideas. Importantly the group is made
up of people from across the business;
they’ve developed a strategy and
are leading work on five priorities
(inclusion & respect, gender balance,
workplace flexibility, improving
accessibility and ethnic diversity).
They’re supported by our CEO
Neal Barclay and our General
Manager Generation & Natural
Resources Guy Waipara. The success
of this group will be measured
through an uplift in our engagement
survey with a particular focus on the
“I feel comfortable when I bring my
whole self to work” response.
62
Meridian Integrated Report 2020
62
Optimising our relationships

8
7
.
3%
8
7
.
4%
8
0.0%
7
8.0%
8
5.0%
8
1
.
6%
8
6.0%
8
7.0%
8
3
.
7%
7
3.0%
8
0.0%
8
5.0%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
FY16****FY17FY18FY19FY20
Employee engagement*
While we’ve been building greater
flexibility into our working style across
the whole business for some time, the
COVID-19 pandemic has added new
urgency to supporting our people
to work in diverse environments and
ensuring they had the support they
needed to excel. So, for example, we
incorporated new ways of learning
into our professional development
programmes to enable people to do
this better from home.
Our Flexperiment project encouraged
people to think about our values of
being gutsy, good humans and in the
waka, and asked them to examine a
range of common flexible working
scenarios to see which ones they
might like to experiment with. We’re
hoping through this project to lock
in some of the best aspects of being
in lockdown – not needing to travel
to work, having more connection to
our families, reducing our carbon
footprints – while continuing to build
our culture and sense of human
connection to each other and with our
suppliers. We’re also hopeful that this
increased flexibility will mean we’re
able to retain expertise for longer.
Meridian NZ**
Powershop NZ
Meridian Australia***
Global Top 25%
NZ Top 25%
Total market
* Engagement measures enthusiasm, commitment
and the connection employees have with the
organization. Up until 2017 Meridian used the
IBMKenexa engagement survey. From 2018
Meridian has been using the Culture Amp
engagement survey – which has slightly different
questions. Flux is not included in FY20 as different
methodology was used and the data is not
comparable.
** From FY19 onwards Powershop NZ is reported as
part of Meridian NZ.
*** Includes Meridian Australia, Powershop AU and
the Powershop call centre in Masterton is reported
as part of our Australian engagement numbers.
**** FY16 measured engagement for Meridian NZ
and Powershop Australia only.
63
Meridian Integrated Report 2020
63
Optimising our relationships

Supporting inclusion and mental
health comes in many forms
It’s important to us to make sure we
have the right skill mix, incorporating
different viewpoints, backgrounds
and languages into our culture, and
ensuring that our make-up reflects
a healthy gender balance, and the
changing ethnic make-up of our
countries and the markets in which
we compete. In Aotearoa we continue
to train our people in tikanga and
the proper pronunciation of te reo,
because protocols and language are
highly important ways of connecting
with our stakeholders and form
key expressions of respect. We also
encourage our people to explore the
many other cultures that are part of
our workforce.
Society’s ideas around gender
are evolving. Understanding and
incorporating these ideas enables
us to be an employer of choice.
One way we’re doing this is to
respect the identities and pronouns
of our staff, contractors and customers.
Much of the information surrounding
gender identity and expression is
new to many people and we believe
that treating people with respect
and compassion, regardless of how
they choose to identify, is core to
Meridian’s values.
We acknowledge that men in
New Zealand suffer high rates of
depression and suicide, and we’re
committed to combatting this
through communication and
community. We want everyone to
feel that they can bring their whole
selves to work in an environment
that respects them and reach out
if they need help. Our Healthy Minds
programme is about to launch its
second evolution.
Talent comes in all different shapes
and sizes and we believe in success
because of, not in spite of, that diversity.
The Board believes that for this
reporting period Meridian has
made progress towards achieving its
inclusiveness and diversity objectives
as reported in this Integrated Report.
Initiatives under its new Belonging
Policy will guide further inclusivity.
64
Meridian Integrated Report 2020
64
Optimising our relationships

Female representationFY17FY18FY19FY20
Female share of total workforce (%) 41.8%45.3%46.2%
Females on the Board25.0%28.6%50.0%
Females in management positions (as % of total management workforce)33.6%37. 2 %37. 4%
Females in junior management positions, i.e. first level of management (as % of total junior management positions)36.3%40.8%40.0%
Females in top management positions, i.e. maximum two levels away from the CEO or comparable positions
(as a % of total top management positions)
30.7%33.6%34.8%
Females in management positions in revenue-generating functions (e.g. sales) as a % of all such managers
(i.e. excluding support functions such as HR, IT, Legal, etc.)
29.4%33.7%34.0%
Percentage of women in senior roles at 30 June*33.5%32.8%35.2%34.3%
* Parent company only, women in people leadership and senior specialist roles, excluding the Executive Team. FY17 and FY18 figures has been restated to the correct values of 33.5% and 32.8% respectively.
Gender balance remains
a work in progress
Women remain underrepresented
in the engineering parts of our
business, and in leadership and
senior-level roles throughout the
business. Currently 34.3% of our
staff in people leadership and
senior specialist positions below
Executive Team level are women,
against a target of 40% by year-
end 2020.
50.0%
50.0%
40.0%
60.0%
69.7%
30.3%
34.9%
65.1%
21.0%
79.0%
28.6%
71.4%
62.1%
37.9%
63.0%
37.0%
38.9%
61.1%
27.7%
72.3%
0
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* Includes Dam Safety Intelligence
** Includes Flux-UK staff
*** Includes AU CEO
Diversity by gender (headcount)
Female
Male
65
Meridian Integrated Report 2020
Optimising our relationships

Pay equity is also important to us.
We’re committed to achieving pay
equity for all employees in similarly
sized roles and with similar skills,
experience and accountabilities.
In FY20 the average level of gender
pay equity was similar to that in FY19
(96.3 compared with 96.8). A small
deterioration in pay equity at the
higher-pay-band groupings is due
to turnover and promotions at this
level and the recent acquisition of
key technical expertise for one of
our subsidiaries.
The average salary for men across
the organisation remains higher
than the average salary for women,
as there are still more men than
women at senior levels. However,
pleasingly in FY20 there was a
good increase in the proportion
of females at mid-senior levels.
Group % Ratio Female salary to Male salary
by Salary Band*FY18FY19**FY20
K-L93.0%91.5% 89.9%
I-J97. 4%98.1%95.8%
G-H99.1%95.4% 96.1%
E-F96.1%99. 2% 98.3%
C-D103.9% 96.9%97.9 %
A-B100.4%99.7% 99.0%
Average of averages98.3%96.8%96.3%
* K & L are our highest salary bands and A & B are our lowest
** FY19 data restated for Salary Band A-B and C-D
Percentage of women by salary band
by Salary Band*FY18FY19**FY20
K-L16.7%18.5 %24.1%
I-J28.6%27.0%32.0%
G-H31.2%30.8%32.9%
E-F43.7%43.2%43.3%
C-D54.7%59.7%55.4%
A-B65.4%61.6%70.8%
Average of averages40.1%40.1%43.1%
* K & L are our highest salary bands and A & B are our lowest
** FY19 data restated for Salary Band A-B and C-D
66
Meridian Integrated Report 2020
66
Optimising our relationships

The workforce of tomorrow will look
very different from our current ranks.
Our search for the best people we
can attract takes many forms.
Bringing through the next
generation of people
Traditionally, generation, with its
80% male workforce, has had the
biggest gender gap. In FY20 all our
graduates happened to be female –
an encouraging sign that we’re also
on our way to a better gender balance.
Succession planning is a key aspect of
maintaining the performance of our
assets over the years. A significant
percentage of our experienced
staff may soon be considering
retirement. To help ensure that
their skills are passed on, we’ve
actively encouraged young
professionals to join our teams
Generation and Wholesale staff turning age 65
FY17FY18FY19FY20
In five years10.2%9.1%10.9%12.5%
In ten years22.7%20.3%22.5%23.9%
Bringing through
the best people
12.5%0%
87.5%
0%
50% 50%
29%

58%

13%

2%

70%

28%

13%

48%

39%

11%
57%

31%
27%

56%
16%
55%
39%

6%
21%

72%
7%

20%

71%

8%

0
20
40
60
80
100
120
140
160
180
BoardExecutiveCorporate
Centre
ICTGeneration &
Natural
Resources*
WholesaleThe Customer
Team
Powershop
NZ
Flux
Federation NZ**
Australia
Diversity by age (headcount)
Under 30
30–50
Over 50
* Includes Dam Safety Intelligence
** Includes Flux-UK staff
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and offer opportunities for
people to complete their trade
apprenticeships with us. Our goal is
to ensure that, as people consider
retirement, they’re supported to
transition out of work smoothly
(for example, through part-time
arrangements) and there are clear
succession plans for their areas
of expertise.
Our graduate and apprentice
programmes have worked well in
this regard, producing a core cohort
who are now entering our business.
More enquiries from younger people
mean we’re growing a critical mass
of youth in hydro and lowering our
median age in this important part
of our business.
Future-proofing our workforce
As part of our bid to future-proof our
workforce, Meridian Group signed
up to the Aotearoa New Zealand
Skills Pledge in FY20. This initiative
encourages companies to invest in
technology and reskilling people for
future roles by doubling the amount
of formal and informal training. As
part of the Pledge we undertook to
disclose publicly our investment in
on-the-job training and re-skilling
hours annually and to double the
number of on-the-job training and
reskilling hours we provide by 2025.
To help us find the people we’ll need
in the future, we also invested in new
recruitment and learning solution
technology that will enable us to
proactively identify who could form
part of our future workforce as well
as better support our people’s
growth and development.
Our training focus changed in FY20
as well. One of the biggest lessons
we learned when we reviewed our
skills was that we need to build softer
capabilities into the ways we work,
such as those needed for dealing with
situations of ambiguity and driving for
results. These ways of working focus
on capabilities beyond technical skills,
and 70 leaders in our customer-facing
teams received training on them.
Taking into account eLearning and
facilitated learning, our people
received an average of 52 hours of
learning on the job in FY20. Our goal
is to double that amount by 2025.
FY20 Learning hours per person from eLearning and courses
HoursLeadership Professional
Technical/
FunctionalTotal
Meridian LMS Courses
(eLearning modules)
216 Modules
6,480 hours
672 Modules
20,160 hours
787 Modules50,250
hours*
Meridian
Development Courses
4,640 (n=232)004,640**
External-run courses1,677 (n=219)001,677***
FY total
learning hours
56,567
YTD Total
(56,567 learning hours/
headcount n=1,1078****)
52 hours
per person
* Modules are completed in financial year 2020.
Modules are averaged on 30 minutes per module
from Learning Report.
** Internal Development Courses financial year
2020, 232 people across Initiate, Inspire, Keeping
The Blue, Presentation Skills and Flux Mentor
Programme etc.
*** External Development Courses, FY20.
**** Headcount excluding casuals, parental leave.
Includes parent and subsidiaries.
If we were to double the number of OTJ (On the Job)
learning hours this would equate to:
• 104 hours per person per year
• 2.6 weeks/13 days
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Incidents in the past two years
have prompted us to examine
and evolve our approach to safety
across our business.
Refining our
approach to safety
Safety comes first in everything
we do. We operate in technically
challenging environments, with
extremely large electrical and
mechanical assets, and our people
work in a variety of locations – at
home, underground, inside large
structures, on tall wind and hydro
structures and close to large volumes
of water. There is always a risk that
an incident will lead to a fatality or
serious injury for a staff member, a
contractor, a customer or a member
of the public, and we manage our
risks as a priority to prevent this. We
believe that everyone should expect
to finish their work and go home
in the same condition they started,
and we’ve made some changes to
continue evolving our health and
safety culture and strengthen our
defences.
Three serious safety incidents
In FY20 our calculated total
recordable injury frequency rate
for employees and contractors per
200,000 hours worked (TRIFR) was
1.23 (compared with 1.72 in FY19),
representing eight people hurt (two
injuries involved contractors and
six involved employees)
3
. The main
types of injuries to our employees
and contractors in FY20 were hand
injuries, slips, trips and falls.
Although we saw an improvement
in our TRIFR in FY20, three of the
eight injuries were serious. In July
2019, one of our contractor partners
fell approximately five metres into a
turbine pit when a temporary barrier
gave way, resulting in a fractured leg
and 60 days off work. In November
2019 one of our employees who was
3 TRIFR looks at how many people are hurt when
working for us, and includes contractors as well as
our own staff in New Zealand. TRIFR is calculated
by dividing the number of incidents that resulted in
medical treatment, restricted work or time off work
by the hours worked (1,162,135.33 by employees,
135,903 by contractors).
working from home on night shift
fell and sustained a facial injury that
required surgery and 22 days off work.
In April 2020 one of our employees
cut his thumb while recommissioning
a generator exchange at Te Āpiti
wind farm, resulting in 10 days off
work. We responded to these events
with Learning Teams and subsequent
actions to improve our defences.
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Developing our safety culture
Our engagement survey asks our
people to rate how they feel about
our health and safety culture. The
results in FY20 continued to be
strong, with our people rating health,
safety and wellbeing at 89% across
the Group. The questions cover
matters such as how people rate their
workload, how well Management
care for their wellbeing, and
Total recordable injury frequency rate (TRIFR
*
)
* TRIFR is calculated per 200,000 hours and includes all lost time, medical treatment
and restricted work injuries for Meridian NZ employees and contractors only. While we
have incident numbers for Powershop New Zealand, Powershop Australia and offsite
contractors, the TRIFR cannot be calculated as the number of hours worked for those
periods has not been recorded.
Lost time injury frequency rate (LTIFR
*
)
* LTIFR is calculated per 1,000,000 hours and includes all lost time work injuries for
Meridian NZ employees and contractors only. While we have incident numbers for
Powershop New Zealand, Powershop Australia and offsite contractors, the LTIFR cannot
be calculated as the number of hours worked for those periods has not been recorded.
how committed they believe the
organisation and its leaders are to the
health and safety of its people.
In FY20, with the introduction of
new challenges from COVID-19, we
evolved our already strong approach
to mental health and wellbeing, as
well as our approach to physical
health and safety, to address the
specific needs of people working
from home.
While we remain confident that
our safety culture and processes
are strong, we’re not taking this for
granted. So we’ve sought some
specialist external advice, we’ve
refreshed our strategy, and we’re
making some changes to evolve
our health and safety culture while
keeping the bits that continue to
work well. We’ve also created a new
role – Head of Health and Safety –
to lead the health and safety team.
1
.
1
8
1
.
6
7
0
.
1
9
0
.
7
0
1
.
3
4
1
.
0
3
2
.
6
8
3
.
1
1
3
.
6
1
1
.
8
2
3
.
9
9
2
.
9
4
1
.
5
2
1
.
8
6
0
.
7
3
0
.
8
8
1
.
7
2
1
.
2
3
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
FY15FY16FY17FY18FY19FY20
1
.
9
0
.
0
1
.
7
4
.
2
3
.
4
3
.
1
4
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5
1
3
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6
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.
0
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.
4
0
2
4
6
8
10
12
14
16
FY16FY17FY18FY19FY20
Meridian employees
Meridian onsite contractors
Meridian onsite (employees
andcontractors combined)
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Site-specific health and safety
committees represent all employees
on our sites, including contractors.
These committees meet monthly
to identify hazards and review
incidents that have occurred. The
representatives on these committees
receive regular training in risk
identification and controls and are
supported by dedicated safety
specialists in each of our business
units, who provide deep technical
expertise and support. This approach
to safety applies to our assets in both
New Zealand and Australia.
We’re also an active member of Stay
Live, an electricity industry forum
focusing on working together across
the sector to improve safety. We have
several Meridian people involved as
chair of the forum and on multiple
working groups.
We’ve introduced Learning Teams
across our New Zealand businesses
to replace more traditional
investigations, with positive results.
Learning Teams are an effective
way of responding to events and
improving our opportunities to gather
better operational information and
increase worker engagement.
Leading on safety
How leaders respond to safety is
important and we’re continuing to
invest in our leadership capability
through targeted leadership
development and tools to help
leaders make decisions and support
their people when things go wrong.
We’re also simplifying our safety
systems and reporting to make
them more accessible and easier
to understand for our people and
contractor partners.
Being a business that deals with
unique hazards like high-voltage
electricity, large volumes of water
and large machinery means we
really need to know how well
we’re managing the critical risks
that come with these. We counter
these risks through our ongoing
improvement and upgrade
programmes. Our process safety
programme has continued to
deliver improvements and assurance
that can successfully manage
the prevention and control of
incidents that have the potential
to release hazardous materials or
energy, ensure that our assets are
well maintained, and ensure we
have effective safety systems.
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71

Our assets are critical to our ability
to generate electricity. As a company
we’re responsible for nearly 30% of
Aotearoa’s electricity generation.
Getting the most
out of our assets
Our Asset Management Policy coupled
together with our annually reviewed
rolling 20-year Asset Management
Plan identifies and prioritises all
maintenance and enhancement work
on our generation assets. We embrace
a total asset management approach
which encapsulates our people,
our processes and our plant. Our
asset management framework is
aligned with ISO55000 and we
pride ourselves in having an agile
and experienced capability to best
balance risk, plant performance and
financial performance in response
to ever changing market demands.
Our expert engineering and
maintenance teams provides on-
the-ground expertise in reviewing
our assets’ current condition and
escalating issues quickly. Their efforts
in FY20 resulted in significant avoided
costs. During the year Meridian
invested $49 million in the ongoing
maintenance and improvement of our
generation assets across the Group.
Meridian owns and operates the
largest dams in New Zealand and
accordingly we have a duty of care to
both the public and our shareholders
to ensure the operational safety
and performance of our dams is
best in class. Our Dam Safety Policy
sets out our obligations and our
Dam Safety Assurance Programme
details how those obligations will be
met and ensures compliance with
international best practice.
In addition, our Dam Safety
Intelligence subsidiary company
worked with Catalyst IT to create a
new version of our dam-monitoring
software that will further ensure the
long-term safety of our dams and the
dams of its other clients. This project
was successfully delivered within
budget and on time.
Managing our asset risk
through good maintenance
We rely on various pieces of
equipment and technology at
our power stations. If any critical
equipment or technology, including,
for example, generating plant,
transformers, switchgear, control
gates and canal civil structures,
or control systems were to suffer
failures (through issues such as
asset condition or human error)
requiring unplanned power station
outages, replacement or repair,
our generation production may
be reduced. Our ability to
generate electricity depends
on the continued efficient
operation of our power stations.
And generation is an increasingly
complex technical challenge.
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528
113
1,465
12,758
525
203
1,244
12,326
553
28
1,263
11,265
510
1,341
11,974
519
1,456
12,251
201
92.4
416
2,338
201
92.4
416
2,338
201
92.4
416
2,338
201
416
2,338
201
416
2,338
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
FY16FY17FY18FY19FY20
0
500
1,000
1,500
2,000
2,500
3,000
3,500
FY16FY17FY18FY19FY20
528
113
1,465
12,75
8
525
203
1,244
12,326
553
28
1,263
11,265
510
1,341
11,974
519
1,456
12,251
201
92.4
416
2,338
201
92.4
416
2,338
201
92.4
416
2,338
201
416
2,338
201
416
2,338
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
FY16FY17FY18FY19FY20
0
500
1,000
1,500
2,000
2,500
3,000
3,500
FY16FY17FY18FY19FY20
Generation (GWh)Capacity (MW)
Hydro NZ
Wind NZ
Wind AU
Hydro AU
At our hydro power stations, in
addition to routine maintenance,
we’ve been busy completing
a number of upgrades and
refurbishments to reduce this risk.
Key achievements have included
completing several projects including
a second generating unit overhaul
at Ōhau A, a long-running project
to improve the reliability of power
supplies at Manapōuri, refurbishing
the first of three control gates at
the outlet from Lake Pūkaki, and
mechanical overhauls to address
bearing issues on one unit at Benmore
and alignment issues on a further
unit at Manapōuri. These works have
required extended unit outages and
as a consequence availability for FY20
was down slightly. However, the hydro
stations continued to provide the
operational flexibility and reliability
essential for meeting market demand
and optimising river chain hydrology.
The risk of critical equipment or
technology failure also applies to our
wind farms, who generally use the
same plant throughout one site. For
the larger components, serial defects
may therefore have an adverse effect
on the reliability and operation of
a particular wind farm if they are
not covered by warranties or other
remediation. In addition to a well-
defined regular maintenance regime,
we manage this risk by ongoing
monitoring of critical components
within the wind turbines so that
we have the ability to predict asset
failures before they occur and have
consequential impacts on other
components.
Te Āpiti wind farm has been an
example of this risk. We’ve been able
to steadily improve our wind portfolio
by completing the major half-life
refurbishment at Te Āpiti wind farm.
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Meridian’s wind portfolio is now
operating at availability levels around
90%, compared to the low 80% just a
few years ago. This means we’re now
able to generate more consistently
and improve our overall capacity by
around 50-60MW.
Our Australian hydro sites have had
much lower availability, driven entirely
by poor hydrological conditions in
their catchments.
The risk of a catastrophic event such
as a major earthquake, landslide,
fire, flood, cyclone, explosion or act
of terrorism could adversely affect
any or all of our power stations and
including our other operations. These
events could also cause a failure of
the transmission grid for which we are
dependent upon to export our power.
Such an event could affect major
electricity consumers (including our
own customers), which in turn could
have an adverse effect on the markets
in which Meridian operates.
We carry insurance cover for up to
$1.1 billion to cover material damage
and business interruption losses.
However, it is possible that this won’t
be enough should a single catastrophic
event occur, or multiple catastrophic
events occur in succession.
Climate change presents a potential
risk to our dam structures. Increased
temperatures are likely to increase
the severity of extreme rainfall events,
and consequent flood events, in
our catchments, which then poses
a potential increased risk of physical
damage to our dam and hydro
structures.
Best practice dam safety management
requires that all of Meridian’s high
potential impact category dams are
required to be assessed, maintained,
and managed to remain safe even
under extreme flood and seismic
loads. The effects of climate change
are not expected to materialise in any
increase in risk or cost in the near term
but in the future it is possible that we
will need to manage to a higher level
of risk of extreme weather events in
order to ensure the continued safety
of our dams.
Mitigations to the future effects of
climate change include the review
of our flood rules, reducing the
maximum control level in Lake Pukaki
and in the Waiau catchment, we
may need to make physical changes
to our lake control structures.
Plant availability
%FY15FY16FY17FY18FY19FY20
Wind Australia95.591.092.693.488.689.0
Wind New Zealand92.888.985.483.983.389.8
Hydro New Zealand88.493.491.390.491.688.9
Hydro Australia85.880.168.0
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Managing our way
through COVID-19
Our generation teams have
been amazing in their response
throughout the COVID-19 pandemic.
They’ve quite literally kept the lights
on for hundreds of thousands of
New Zealanders and Australians.
During the Alert Level 4 lockdown
in New Zealand and similar
restrictions in Australia, teams
focused on continuing the essential
maintenance work required to keep
our wind turbines spinning and hydro
plant operating safely. Our major
upgrade and refurbishment projects
in New Zealand were deferred under
Alert Level 4 but resumed once we
reached Level 3. In Australia normal
maintenance programs have been
completed whilst adhering to all of
the applicable travel restrictions.
Our technology systems
need to stay secure
We’re aware that the increase in
our people working from home
has increased the importance of
information security and privacy.
The Meridian Group has a clear
information security policy that’s
designed to protect the business
and our customers, investors and
staff. We acknowledge that a failure
to protect our information could
have serious adverse impacts on the
Meridian Group business, especially
if we lose control of our assets.
For example, an event that
compromises our critical information
technology systems could interrupt or
disable our critical systems or damage
operating assets. We could incur costs
to stop the attack, repair the systems,
potentially repair damaged assets,
and manage any subsequent business
interruption. Our reputation would
likely suffer due to reduced service,
potential environmental damage,
potential risks to public safety and
perceptions of poor security, and
the company could be exposed to
subsequent fines and penalties.
Consequently, we take information
security extremely seriously and
work hard to ensure we have robust
and modern protection systems
in place to avoid these potential
outcomes. Across the Meridian Group
we adopt a risk-based approach
to identify threats, weaknesses
and vulnerabilities, and look at
the potential consequences. This
enables each part of the business
to make informed decisions about
opportunities and to address risks that
matter most. We then apply security
measures to manage these risks to
acceptable levels, with the objective
of protecting confidentiality, integrity
and the availability of property,
systems, services, information and
intellectual property, as well as safety.
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Access to water is vital for our
business and for Aotearoa’s
aspiration of net zero carbon
by 2050, but we recognise it’s
also held dear by a wide range
of other parties.
Working with our
partners for good
These parties remain concerned
about and fiercely protective of their
rights around availability and their
commitment to water quality. Wind
energy too can be a challenging
issue for communities, with locals
holding and articulating clear opinions
on the turbines we have in place.
We acknowledge and respect that
the resources we use are valued by
many different stakeholders, and our
relationships with the land and water
sit alongside the relationships that
other groups, including of course iwi
and local communities, have with
these areas. In FY20 we published
our internal guidelines for engaging
with stakeholders and we invite our
stakeholders to give us feedback
on our approach.
The regulatory risk to our business
Depending on how policy settings
evolve over time, the Government,
local authorities and other regulatory
bodies may impose restrictions,
conditions and additional costs on
our ability to access or use hydro
sources that we may or may not be
able to pass on to our customers.
Those could include imposing
minimum flow or maximum nutrient
levels in rivers that have hydro
generation, and imposing charges
or royalty payments on water users.
Plan changes could also adversely
affect activities that are currently
permitted without resource consents.
National and regional water policies
could be changed to allocate more
water to agricultural users or to meet
specified iwi interests or for other
purposes, reducing the available
flow from the Waitaki or Waiau
catchment for Meridian.
Regulatory issues could also be
exacerbated by climate change as
weather becomes more variable
and water more unpredictable for
the needs of other users. This could
reduce Meridian’s access to water
either through direct government
policy change (e.g. imposition of
environmental taxes or through
forms of water charging) or from
local Resource Management Act
(RMA) processes going through
to the Environment Court. For
example, increasingly frequent
east coast droughts (particularly
in the Canterbury region), alongside
global demographics, could drive
substantially more demand for
irrigation water. This could
significantly impact Meridian’s
operating costs and/or erode
our social license.
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However, it is important to recognise
that Aotearoa has the opportunity
to decarbonise the economy
through greater use of renewable
electricity to supply increased
demand to replace fossil fuels used
in transport and industrial processes.
Hydro generation is especially
important as it is an existing form
of renewable generation that can
operate flexibly to support further
renewable generation development
and underpin the decarbonisation of
other energy uses. It is crucial to the
country’s climate change response
Meridian works actively with Central
Government agencies, local councils
and stakeholders to help them
understand the importance of this
issue and to ensure that it is factored in
and appropriately recognised in their
thinking and relevant policy, planning
and regulatory documents.
Reconsenting the Waitaki chain
The water resource consents for
the Waitaki chain of power stations
will come up for reconsent in 2025.
This major catchment represents
18% of New Zealand’s power and
requires respectful engagement
with Ngāi Tahu and a range of other
stakeholders. We’ve been working
constructively alongside Genesis
Energy, which also has consents
in the chain.
Any changes to access to water would
represent a significant financial risk for
Meridian and for Aotearoa as it seeks
to achieve its climate action goals. If we
have less water to generate from, our
ability to provide a steady return to our
shareholders could be affected. Such a
change would also reduce renewable
hydroelectricity significantly and in turn
compromise New Zealand’s progress
in reducing its emissions. Coming to
a consensus and an arrangement that
works for all parties is something that
needs time, and our process for this is
already well underway.
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Part of wider
conversations on water
The conversation on reconsenting
is taking place at the same time as a
range of other conversations on and
regulatory processes involving water
access, water purity and water rights.
We’re pleased that recently passed
clean-water legislation specifically
excludes the five largest hydro
schemes and ensures the output and
flexibility of these schemes should
be protected in order to maintain
renewable electricity generation,
ensure security of supply and
support the further decarbonisation
of New Zealand’s economy.
Meridian is strongly committed
to clean water, and our exemption
in no way compromises the water
quality in our catchments.
Meridian’s Manapōuri and Waitaki
schemes are two of the five schemes
listed. The National Policy Statement
on Fresh Water acknowledges the vital
role that hydro schemes play now, and
their increasingly important function
as we move towards a carbon-neutral
economy. This recognition is a huge
positive for Meridian, its shareholders
and its customers.
We remain committed to working
in good faith with all those involved
in seeing this large, complex and
highly scrutinised process through
to a satisfactory conclusion. The
new approach seeks to prioritise
healthy water ahead of human and
commercial needs, and we expect
that in the catchments where we
operate (Manapōuri and Waitaki) the
perspectives and values of Ngāi Tahu
for freshwater will be given greater
priority than they have in previous
resource management processes.
This should be good for Ngāi Tahu
and good for the environment.
Protection is also being put in place
to maintain wetlands, and new rules
will control winter grazing and other
intensive farming practices. The
Government is making $700 million
available to help with activities to
protect water quality and reduce the
cost of change for landowners. There
is no doubt that the measures should
arrest the decline of water quality
in New Zealand. If the changes are
well implemented by councils and
landowners, improvements in water
quality should be expected.
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We value our
relationships with iwi
We recognise the mana whenua of
Ngāi Tahu, particularly in relation
to our hydro schemes in the Ngāi
Tahu takiwā and engage with
them and other iwi in several ways.
We recognise and respond to
the kaupapa of ki uta ki tai (from
the mountains to the sea) and
work closely with local rūnanga
(Arowhenua, Awarua, Hokonui,
Moeraki, Ōraka Aparima, Waihao
and Waihōpai) through Te Ao
Marama and the Waitaki Governance
Group as well as trusts to enhance
mahinga kai and native fish in the
Waitaki and Waiau catchments.
We work with them of a range of
topics including scheme operation,
water management and Resource
Management Act planning processes.
Offering support
through Power Up
By building good relationships
with and doing good by locals, we
demonstrate that we want to be
locally involved and supportive.
It helps us build strong, mutual
relationships with the local
communities in which we operate. P
art of building strong relationships
is being open to feedback and
working through grievances. We’ve
a range of channels to ensure that
our communities can voice their
opinions and provide us with
feedback on the work we’re doing
For 13 years, our community fund
Power Up has been supporting
local projects in Te Āpiti, Mill Creek,
Manapōuri, West Wind, White Hill,
Te Uku and Waitaki. In that time
we’ve been able to undertake a
range of projects that are important
to locals and have invested more
than $8 million through 1,076 projects
back into these local communities.
The concept sprang from recognising
that local employment helps small
local communities to flourish and
attracts people back to smaller towns.
In FY20, because of the impacts
of COVID-19 on our communities,
we put aside the usual application
criteria and process and put a call
out to see where support was most
needed. $36,000 normally earmarked
for educational, environmental and
recreational activities was instead
redirected to support community
responses and needs. The money was
used to assist the Raglan community
and the Raglan Foodbank, to help
families in Wellington’s Mākara
community with internet access, to
cover food and personal protective
equipment costs for staff at the
Whalan Lodge rest home in the
Waitaki Valley, to pay for vital ICT
resources to connect with patients
at the Twizel Medical Centre, and
to deliver more than 100 bags of
food for volunteers at the Otematata
Volunteer Fire Brigade to distribute
to members of the local community.
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Our social licence to operate relies
on us demonstrating that we’re a
responsible guardian of the natural
elements on which we depend.
In FY20 we have published our
internal guidelines on environmental
management and biodiversity on our
website and invite our stakeholders
to give us feedback on our approach.
The impact of our hydro schemes
Hydro generation itself only has an
impact on water quality when water
is diverted; however, water quality
can be further compromised by a
range of other activities that affect
areas such as the Waiau and Waitaki
river systems. Our preference would
be for the water in these catchments
to be as clean as possible. While we
help to mitigate changes in water
quality by; for example, releasing
more water into waterways; to
dilute the effects of contaminants
and slow down algal growth and
weeds; these actions are not without
their own consequences; affecting
our profitability and reducing the
renewable energy we can deliver to
meet New Zealand’s power needs.
The Manapōuri tailrace discharges
freshwater to Deep Cove (which
is part of Doubtful Sound), this
commenced 50 years ago when
the scheme was first commissioned.
All of the fiords in Fiordland have a
low salinity layer, it is a function of
the shape of the landscape and the
fact Fiordland is a very high rainfall
area. The ecology of all of the fiords
is unique due to the presence of the
natural low salinity layer, it is one of
the reasons that black coral grows at
shallower depths in Fiordland than is
common in other marine settings.
When the scheme was first
commissioned there would have
been a spatial displacement of marine
species at the point of the discharge
in the head of Deep Cove. Since
then the marine ecology of Doubtful
Sound has been stable and healthy.
That is demonstrated by the fact that
sites in Doubtful Sound as recently as
the late 2000’s were identified and
protected as marine reserves due to
their existing high marine values.
Valuing natural resources
Many of the impacts we’re dealing
with were not considered when
the hydro schemes were approved.
Establishing large-scale hydro
schemes is hard to imagine now. The
biodiversity impacts of the schemes
are addressed by our funding of
Project River Recovery and the
Waiau Fisheries and Wildlife Habitat
Enhancement Trust (the Waiau Trust).
Project River Recovery is Aotearoa’s
longest-running conservation/
business partnership; it has been in
place in the Waitaki catchment for
nearly 20 years. Funded by Meridian,
the Department of Conservation
works to preserve and restore braided
river habitats in the Waitaki catchment
through weed control of the riverbed
and pest eradication to protect black-
fronted tern/tarapirohe colonies and
help kakī or black stilt recover their
populations. The partnership has
created more than 100 hectares of
new wetlands.
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Water consumption*
Mm
3
FY16 FY17FY18FY19FY20
New Zealand
Fresh surface water (lakes, rivers)70,61072,94665,56274,18385,339
Water returned to the source of
extraction with similar quality
56,48161,49953,82361,83272,994
Total net freshwater consumption**
14,13011,44711,73912,35112,345
Australia
Fresh surface water (lakes, rivers)3,6962,574
Water returned to the source of
extraction with similar quality
3,6962,574
* Municipal water consumption not reported as minimal and not metered. While in New Zealand we have no
exposure to water stressed areas, in Australia our power stations are operating in areas that can suffer from
drought. Note that we only hold the right to generate electricity from water passing through the dams associated
with our Australian hydro power stations, we do not hold the water rights themselves.
** Fresh water taken from Lake Manapōuri is released into Doubtful Sound, a marine environment, and is not altered
in terms of water quality.
The Waiau Trust has been operating
in the Waiau catchment in Southland
for 23 years. Its goal is to enhance
stream and wetland habitats for
fisheries and wildlife. To date it has
completed more than 220 habitat-
enhancement projects and access
projects, enhancing a total 3,356
hectares of habitat.
Riverways are natural highways for
adult native eels (tuna) needing to
migrate to the sea from freshwater to
complete their life cycle and to spawn
in the Tonga Trench. They also enable
juvenile eels (elvers) to return up-river
to mature. Our structures stand in the
way of these natural movements, so
every year we move a large number
of elvers and adult eels at Manapōuri,
and a smaller amount in the Waitaki
catchment. Once released, they
can migrate successfully to and
from the sea.
In Manapōuri there’s a large self-
sustaining population of eels because
it’s a national park and there’s no
commercial catch pressure. In FY20
we moved around 45 kilograms of
elvers and juvenile eels upstream
and almost 4,000 adult migrants
(equivalent to more than 6,000
kilograms) downstream. These
results were the lowest to date
due to flooding in November and
December 2019 and lockdown
restrictions due to the COVID-19
pandemic.
In the Waitaki catchment the
population is much smaller. We
caught and transferred just over 115
kilograms of elvers and juvenile eels
upstream. Due to a much shorter
season, only 34 adult migrant eels
were moved downstream.
In Australia, Meridian Energy operates
the hydro generators but we don’t
own the dam infrastructure and we
don’t control the flow of the water.
The environmental impacts of these
dam structures and the water use is
the responsibility of WaterNSW.
No serious environmental breaches
These projects form part of our
collaboration with local authorities
and other interested parties and
were agreed to when our consents
were originally granted. We continue
to work closely not just with parties
that use the waterways we share but
also with local government bodies,
particularly during consenting and
through the submissions process,
and we report regularly on our
compliance with resource consent
conditions. In the past year, we’re
pleased to report, there were
no prosecutions. We recorded
13 breaches of environmental
compliance. None were serious
and no significant adverse effects
arose from the breaches.
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Supporting the kākāpō
In 2016 we became a National Partner
of the Department of Conservation’s
Kākāpō Recovery Programme. That
partnership has contributed to critical
research to help the species recover
and has had a real impact in raising
awareness of the plight of these
precious native parrots. It’s not just
our partners who benefit from these
programmes; our staff too find them
inspiring and many volunteer to
help out in their spare time.
Planting 1.5 million trees
Last year we launched our Forever
Forests planting programme to
begin planting 1.5 million trees
on 1,500 hectares of land around
Aotearoa and to have these in
the ground in the next five years.
In FY20 we started with land
around our hydro stations, planting
our first seedlings late in 2019 on
land adjacent to the Manapōuri lake
control structure. The trees are a
mix of natives and exotics. In the
long term, the natives will take over,
leaving a lasting legacy for future
generations. Once the trees have
all been planted, they’ll soak up the
same amount of carbon as our entire
Meridian Group emits, meaning we’ll
be carbon neutral without needing
to buy carbon credits.
8282
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While inflows provided plenty of
water in New Zealand, a planned
transmission outage challenged us to
manage our potential risks carefully.
Strong inflows,
disruptive outages
At year end, a number of variables
remained unresolved. We were
still waiting to hear New Zealand
Aluminium Smelters Limited’s
(NZAS’s) decision on its Tīwai Point
smelter. The COVID-19 pandemic
has had, and may continue to have,
effects on customer demand.
There’ll undoubtably be changes
for businesses in New Zealand due
to ongoing COVID-19 restrictions
internationally and at the border.
These uncertainties may affect our
results in the coming year, but the
year just gone was a good one.
Results in New Zealand
Energy margin measures the
combined financial performance of
our retail and wholesale businesses
and is an indicator of the success of
our vertically integrated model. As a
generator and retailer, Meridian sells
all of the electricity we make into the
wholesale market and we purchase
from the market the electricity that
our retail customers use.
The average wholesale price for
electricity in the year was down
significantly on FY19 by $34 per MWh
(28%). But a lift in generation volumes
along with a significant lift in customer
sales volumes and margins meant we
improved Energy Margin by 1% over
the prior year.
Our customer sales teams lifted
our sales volumes across both the
Meridian and Powershop brands
by 18% and our market share in all
of the customer segments that we
service. We also improved retail
margins significantly as a result of
the increased scale of our retail
businesses, the improved customer
retention rates that we were able to
achieve and the smart pricing we
adopted in the business sectors.
The amount of electricity we
generated was up 5% on the prior
financial year due to reasonably
healthy inflows into our hydro storage
lakes. But overall spot generation
revenues were down 24% on the
prior year due to a significant year-
on-year reduction in the wholesale
prices for electricity.
But that doesn’t tell the full story.
The primary function of our Wholesale
business is to not only generate
the most energy we can from our
generation assets but also to manage
our wholesale price risk. Meridian’s
New Zealand hydro generation
volumes (comprising approximately
90% of its New Zealand generation)
so the availability of, and access to,
water is critical.
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The Waitaki and Manapōuri hydro
systems are heavily influenced by
seasonal hydrological conditions.
Given the high variability in rainfall
in and around our catchments
and the relatively small amount of
hydro storage we have, the amount
of generation available can vary
significantly and managing our
storage lakes well is not only critical
to our financial performance but also
ensuring we play our part in avoiding
energy shortages for New Zealand.
Adverse hydrological conditions,
resulting from dry periods or drought
conditions in those catchments, may
reduce water levels and significantly
affect our generation capability.
As an electricity retailer Meridian
must buy all of the electricity that
our retail customers use from the
wholesale market and wholesale
prices can vary significantly. When
we have low storage levels resulting
from low inflows, we may be forced
to spend more money on purchasing
electricity from the wholesale market
to meet our customer commitments
than we are making from selling
electricity we have generated into
the wholesale market.
Our wholesale team manage
these risks by conservative storage
management and by engaging in
the wholesale market to buy and sell
financial hedge instruments to secure
prices ahead of time and to manage
the impacts of transmission outages
that may limit our ability to generate.
Overall, the team did a great job in
New Zealand by delivering a record
amount of generation for the year
and managing some significant
transmission outages, most notably
the HVDC outage during January
to March.
Our Australian performance
The trading conditions in Australia
throughout the year were challenging,
so an EBITDAF result 3% higher than
the prior year was pleasing. Wholesale
electricity prices trended down as oil
prices and then gas prices collapsed.
In addition, generation volumes from
our hydro assets were down year on
year due to the deepening drought
conditions. Our risk management
processes were put to the test
particularly during a number of high
price events during the summer. As
temperatures soared and bush fires
raged and people consumed energy
to stay cool, we were hard pressed
to make headway.
While our Australian generation
team had a challenging year, our
retail business saw sustained growth
and a significant increase in customer
numbers. In the short term we’ll
continue to focus on growing our
customer numbers and supplying
them with what they want. Pleasingly,
we saw growth in all sectors in FY20,
and this has motivated us to ramp
up our focus on the SME sector in
the year ahead.
4
5
2
4
7
0
4
2
7
6
3
5
6
0
5
200
400
600
800
FY16FY17FY18FY19FY20
Longer term, the prospects are more
optimistic. A large number of coal-
fired plants are approaching the end
of their 20- to 30-year lives and we’re
confident that will produce important
opportunities for renewables.
The Australian energy margin was 3%
higher compared to FY19. Powershop
Australia grew its electricity customer
base by 24% during the year, with a
24% increase in contracted electricity
sales. Our retail gas offer in Victoria
gained 15,000 gas customers by the
end of the year, with sales of 1,491TJ.
Group results
Overall, we recorded a record
EBITDAF result for the year, up 2%
on FY19. Operating cash flows were
$605 million in FY20, $30 million
(5%) lower than last year. Total capital
expenditure was $64 million.
Operating cash flows ($m)
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Movement in EBITDAF
0
200
400
600
800
1,000
1,200
EBITDAF
30 Jun
2019
Retail
contracted
sales
Wholesale
contracted
sales
Generation
spot
revenue
Cost to
supply
customers
Net cost
of hedges
Virtual
asset
swaps
Other
market
costs
Australian
energy
margin
Other
revenue
Trans-
mission
expenses
EBITDAF
30 Jun
2020
Employee
& other
operating
expenses
838
+142
+7
-406
+388
-115
-2
+4
+8
-12
854
0
+2
New Zealand Energy Margin +$14M
Higher retails sales and
record New Zealand
generation helped offset
the impacts of lower
wholesale prices.
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Sizing up the years ahead
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Sizing up the years ahead
We’re proud to announce
another record year in terms of
financial results. However, the NZAS
decision may see developments in
New Zealand put on hold even while
they continue at pace in Australia.
We’ll continue to focus on growing
our customer bases and guiding Flux
to achieve its considerable potential.
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In the short to medium term we
expect to see some instability in the
New Zealand market as dynamics
adjust to the departure of NZAS
and the running down of thermal
capacity. We’ll continue to grow our
connections with our customers.
In New Zealand, opportunities to
grow our renewable generation
portfolio rest on demand growth
and the retirement of thermal power
plants. With NZAS announcing the
closure of the Tīwai Point aluminium
smelter, there is in the short term an
oversupply of renewable energy in
the South Island that will struggle
to move north. Demand for new
renewable-energy power stations
is likely to increase regardless of
this situation, as we expect thermal
plant closures to continue in the
medium term.
Heading into temporary oversupply
The biggest variable the electricity
sector in New Zealand faced for
many years was when New Zealand’s
Aluminium Smelter at Tīwai Point
would close. Just after the financial
year ended, we were notified by
Rio Tinto, the majority owner of the
smelter, that it would terminate its
contract with us with effect from
31 August 2021.
In October 2019 we were advised by
NZAS’s major shareholder, Rio Tinto,
that it intended to conduct a strategic
review of the smelter. The review
would look at all options for the future
of the smelter, including the option
of closure.
Our electricity contract with NZAS
included options for NZAS to
terminate the agreement in full or to
reduce consumption from 572MW to
400MW with 12 months’ notice. NZAS
advised us that volatile international
prices for aluminium, relatively high
energy and transmission costs and an
upcoming refurbishment bill to keep
one of the potlines operational had
brought the future viability of NZAS
into question.
In response we engaged in good
faith, tabling a number of proposed
changes to and concessions in
our existing contract. We believed
the changes were generous and
pragmatic and would support the
smelter’s ongoing viability while
still balancing the interests and
expectations of our own shareholders.
Rio Tinto indicated that it would
provide the market with an update
on the strategic review by the end of
the first quarter in 2020. That decision
was delayed until July. During April,
NZAS exercised its right to suspend
the contract that supported its 50MW
Potline 4 for up to six months, citing
the COVID-19 pandemic as the reason.
Supply and demand needs
time to find a new level
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Recently, the announcement of new
Transmission Pricing Methodology
guidelines would have meant further
transmission cost savings of $10
million per annum for the smelter
from 1 April 2023. NZAS would
have also been able to apply for a
prudent discount, potentially further
reducing its annual transmission bill
from Transpower. We hoped that this
announcement would strengthen
the case for the smelter to stay in
operation, but the smelter owners
made a different decision. Meridian
had always prepared for an exit of
the smelter as a real outcome.
NZAS consumes around 40% of
Meridian’s generation output in
any year, depending on generation
output and demand. Their exit from
the market represents a significant
reduction in demand and will likely
result, in the near term, in a reduction
in Meridian’s revenue, largely caused
by a reduction in electricity prices
(both wholesale and retail). The size
of any such reduction in Meridian’s
revenue and associated losses, and
therefore the severity of the impact
on Meridian, will depend on a number
of variables, including transmission
constraints, the rate of residual New
Zealand electricity demand growth
and the response by generators and
electricity market participants. For
example, other electricity generators
with thermal generation plant could
choose to mothball or retire their
plant, which could have the effect of
reducing the supply of electricity and
moderate any reduction in wholesale
electricity prices.
Once NZAS leaves, more renewable
energy will be available from our
country’s South Island hydro stations
as long as the power can be sent
north to where it’s needed. This will
help to displace fossil fuel power
stations and will make a significant
difference to the percentage of
renewable electricity on the grid.
We’ve been working closely with
Transpower, along with Contact
Energy, on the Clutha Upper
Waitaki Lines Project. In FY20
we contributed $5 million to fund
early work on the transmission
line to help expedite increasing
transmission capacity. We welcome
and commend Transpower’s response
and collaboration. Transpower has
said that the completion date
for this is May 2022.
The full implications for the New
Zealand electricity sector anvd for
Meridian’s business are still being
worked through. While the loss of
such a large consumer of electricity
will be disruptive in the near term,
we’re confident that the opportunities
it affords to both our country and
Meridian will ultimately offset any
short-term negative impacts.
Demand – one step back
but likely two forward
In the short term, the sector is likely to
see a significant reduction in demand
with the closure of the aluminium
smelter at Tīwai Point. However, in
the medium to long term, our overall
view for the future is for significant
positive growth.
This is not easy to forecast. A number
of factors can impact demand,
including activity levels in the
industrial sector, competitor
behaviour, regulatory changes,
population growth, economic
conditions, technological advances
in the more efficient use and
generation of electricity (including
by customers, potentially as
a consequence of regulatory
subsidisation of competing
technologies), weather and
catastrophic events. All of these
could in turn affect electricity prices.
As New Zealand commits to
its climate-change goals and
Government, businesses and
individuals start to lean into our
collective challenge, we expect to
see increasingly faster electrification
of both the transport and stationary
energy sectors that rely on burning
fossils fuels. These changes will go a
long way to reducing New Zealand’s
energy-related greenhouse gas
emissions and will grow the demand
for new renewable electricity in
New Zealand.
The physical impacts of climate
change may also increase demand,
due to higher demand for air
conditioning in summer, and higher
irrigation requirements in the
agricultural sector, partially offset by
lower demand for heating in winter.
Combined, these increases in demand
offer Meridian the opportunity to
grow our electricity generation and
retail businesses.
It’s not all good news though. Climate
change could also lead to a negative
impact on our demand, if climate
action policies curtail a high electricity
consuming industry, for example the
dairy industry.
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The business case for development
The ongoing impacts of the COVID-19
pandemic have created significant
uncertainty for demand growth
expectations in the next few years,
with general recessionary effects and
trade-exposed industries likely to limit
growth. However, as local and global
economies begin to recover, we
expect underlying demand growth to
eventually return but at fairly modest
levels (around 0.5% per annum).
Beyond this, as decarbonisation
efforts begin to accelerate, we
expect demand growth to increase
further (to as much as 1% per annum).
In the next decade this equates to
growth of between 2,000 GWh
and 4,000 GWh.
But modest demand growth doesn’t
necessarily mean that new power
stations won’t be needed. Despite
the oversupply of renewable energy
that the exit of the Tīwai smelter will
create, we’re expecting in the medium
term that this energy will displace
thermal power stations, and there’ll
be a need to replace energy from
any power plant that’s retired in the
next 5–10 years.
Accordingly, in the past few years
we’ve built up our internal capability
to develop and execute new projects,
from wind projects such as the ready-
to-go Harapaki wind farm to large-
scale solar and grid-scale battery
systems. Wind will be an important
part of that future, and we’re buoyed
by the fact that the costs to deliver
new wind capacity have reduced
significantly.
As part of our commitment to SDG13
Climate Action and SDG7 Affordable
and Clean Energy, we continue to
investigate how we can support a
faster conversion of the Australian
electricity system to renewable
energy. Our strategy is to continue
to develop our generation portfolio
through acquisition and development
and expand the pipeline of assets to
eventually include wind, solar and
battery developments. By continuing
to invest in renewable energy we’re
looking to build a business in the
Australian market that’s attractive to
consumers, is good for the country
and the economy, and supports the
ongoing growth and profitability of
the Powershop brand.
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We continue to attract more people
to our brands through the service
and support we offer and the values
our brands represent.
Continuing to grow
our customer bases
In competitive markets like Australia
and New Zealand, where there’s
little organic growth to rely on, our
ability to gain and retain customers
is critical to the successful growth of
our business. A significant amount of
our success in FY20 can be credited
to the growth we achieved in our
retail market share, which bolstered
our underlying performance in both
countries. In FY21 our focus on growth
will continue as we seek to rebalance
our customer book by increasing
the size of our retail and wholesale
customer base in response to NZAS
terminating its contract.
Healthy gains in New Zealand
In FY20 we saw healthy growth in all
our key customer segments compared
to the same period in the previous
year: residential, agriculture, SMEs,
corporate and industrial. Focusing
on better execution helped our sales
teams, particularly in the industrial
and corporate markets. In residential,
competitive pricing for Powershop
products and a stable Meridian
customer base saw the number of
customers we serve grow, and good
growth in the profitability of all our
customer businesses.
Our New Zealand retail customer base
continued to grow. Having passed
the 300,000 customer connections
threshold in New Zealand for the first
time in FY19, we reached 324,000,
up 7%, through very strong gains
in both brands. This was helped by
Meridian evolving the look and feel
of our brand, which gave us even
more appeal with our target market
of conscious consumers. Overall our
New Zealand retail sales volumes
were 18% higher than in FY19.
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Customer retention rates also
improved, and this was a significant
driver of the overall growth we
experienced in our retail businesses
during the year. The Meridian
brand has the best retention
rate in the market and there
were also large improvements in
Powershop’s retention rate in FY20.
This is important because high
customer switching rates require
more investment to just maintain a
customer business let alone grow
it. Overall, switching rates for both
brands in New Zealand decreased
from 20.1% to 17.0% this year.
We note that information about
switching rates is not available for
the electricity industry in Australia.
In this market we again experienced
a significant increase in customer
numbers, with strong growth in
residential and also a lift in SME sales.
Our electricity customer connections
in Australia increased by 24% to
136,000 in FY20.
Switching rates*FY17FY18**FY19**FY20
Powershop New Zealand33.9%33.7%30.3%25.0%
Meridian 19.1%17. 6%16.9%14.2%
New Zealand combined22.3%21.2%20.1%17.0%
New Zealand industry average20.4%21.0%20.6%18.9%
* data from the Electricity Authority (emi.ea.govt.nz) and Meridian analysis. Switching rates are not published by the
market operator in Australia.
** data restated based on final figures from EA.
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Customer sales volume (GWh)*Customer connections* (ICPs)
1
0
9
,
8
0
4
1
3
6
,
2
0
2
26,787
89,144
2
7
4
,
9
2
0
2
7
6
,
7
6
7
2
9
0
,
7
5
6
3
0
2
,
2
7
7
0
50,000
100,000
150,000
00,000
2
2
50,000
00,000
3
3
50,000
NZAUNZAUNZAU***NZAUNZAU**
FY16FY17FY18FY19
FY20
77, 970
100,524
97,241
208,322
324,253
3
4
5
4
9
3
5
4
9
5
5
3
3,440
6
8
3
3,034
903
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
NZAUNZAUNZAUNZAUNZAU
FY16FY17FY18FY19FY20
6,2
4
0
5,9
8
1
5
,
7
2
7
5,9
6
9
7
,
3
7
6
Meridian – Res, Agri, SME
Meridian – Corporate
Powershop
* Excludes the Tīwai Point Aluminium smelter; <10 of the above ICPs are connected to the
transmission network; around 4,500 customer connections have distributed generation metering
** Also 37,878 gas customer connections in Victoria, Australia with total of 1,491TJ in volume
*** Powershop AU FY18 figure restated to correct value of 97,241
* Electricity energy volumes only, and excludes the Tīwai Point Aluminium smelter
Connecting with our customers
Through our brands we look to
connect and engage with defined
customer segments and maximise
our performance. In FY20, through
our integrated marketing strategies
and campaigns, we successfully grew
awareness, consideration and business
performance in our entire portfolio of
brands. In addition to our campaign
activity, we invested in partnerships
that enhanced our respective
brands, including our cornerstone
partnerships with the Department of
Conservation for the Kākāpō Recovery
Programme, and KidsCan. Across
our portfolio of brands we spent
$21 million on marketing activities.
Customer satisfaction —
Net Promoter Score (NPS)*FY17FY18FY19FY20
Powershop Australia**45535357
Australian industry average***(14)(18)N/A
Powershop New Zealand485561
i
64
Meridian
o
2830
New Zealand industry average1418N/A
* Calculated from a survey asking customers using a 0–10 scale “How likely is it that you would recommend
Meridian/Powershop to a friend or colleague?” and then subtracting the percentage of detractors from the
percentage of promoters. A positive value indicates that more customers are promoters versus detractors
(and vice versa). All results are a 12 month moving average from July to June each financial year.
** FY17 data not a full year
*** Perceptive Group Limited: New Zealand & Australia NPS Industry Benchmarks. FY20 data currently unavailable.
i
Powershop New Zealand figure for FY19 has been restated with the correct figure of 61.
° Meridian commenced reporting a 12 month moving average in FY20 to align with Powershop NZ and AU when
sufficient historical data became available. Previous reports showed Meridian’s June score for each financial year.
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93
Sizing up the years ahead

We also continued to pursue
the digitisation of our customer
experience, with the majority of
Meridian customers now serviced
extensively through digital channels.
Powershop also saw strong continued
performance in digital channels.
We continually assess our
relationships with our customers
through ongoing Net Promoter Score
measurements and increasingly
also customer satisfaction surveys.
These globally respected measures
of customer loyalty enable us to stay
closely connected to how customers
are responding to our messaging and
service offering. If for any reason our
customers feel we’re not meeting
their needs they’re able to provide
feedback and complaints through
a variety of channels, including
contacting us directly or by speaking
with Utilities Disputes Limited – a
free and independent dispute-
resolution service.
With more and more being done
online we know that privacy is an
important issue for many of our
customers. Meridian is committed to
keeping our customer data secure
and protecting customer privacy.
Meridian has a comprehensive
privacy policy and a robust policy
framework that’s regularly reviewed.
The oversight of and compliance with
our privacy obligations lies with our
Privacy Officer, who reports directly to
the Board on our compliance with the
Privacy Act 1993 and the effectiveness
of the Meridian Group’s efforts. In
FY20 Meridian received no formal
complaints regarding breaches of
customer privacy from regulatory
bodies or third parties.
Customer migration
to the Flux platform
Our customer experience is also
increasingly digitally enabled. In FY19
we achieved more than 300,000
customer connections on our Flux
platform globally, and in FY20 we
passed the 500,000 mark. The
platform was originally developed to
support our Powershop brands, but in
2018 we launched a project to migrate
the Meridian customer base onto the
platform as part of a broader strategy
to be able to sell the software as a
service to any electricity retailer.
As we move Meridian customers
onto the Flux Federation software
platform, we’re able to enhance our
engagement with those customers
in ways that our Powershop brands
have enjoyed for several years. The
objective of the Meridian migration
project is to improve the quality of
the customer experience for our
Meridian customers and to reduce
costs by rationalising legacy customer
service platforms. By the end of FY20,
we successfully migrated around
88,000 Meridian customers. At this
point the Meridian platform migration
programme is running nine months
behind schedule and is due for
completion in September 2021. The
business case for the migration is still
very positive, and we’re confident it
will deliver the cost-to-serve savings
we’re looking for.
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Sizing up the years ahead

95
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95
Sizing up the years ahead

Rewarding strong

performance
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Rewarding strong performance

As a business
Our people are key to our ability
to deliver strong returns for our
shareholders. We have structured
our remuneration to attract and
retain the best people we can and
to remunerate them competitively
for their contributions.
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Our approach to
remunerating our people
Attracting, retaining and
motivating talented people,
and rewarding them for delivering
desired business performance
and long-term shareholder value,
is key to Meridian’s success.
Our remuneration philosophy
is guided by the principles that
remuneration will:
• be clearly aligned with our
company values, culture
and strategy;
• support us to attract, retain
and engage employees;
• be fair, equitable and flexible;
• appropriately reflect
market conditions and the
organisational context;
• recognise and reward
high performance and;
• align with creating
shareholder value.
The People and Remuneration
Committee regularly review
remuneration policy and practice
and provide recommendations
to the Board. The Board approves
the executive balanced scorecard
objectives, company financial
performance targets and
outcomes on an annual basis.
Fixed remuneration is bench-
marked to market remuneration
data and permanent employees
may participate in a short-term
incentive (STI) scheme at the
discretion and invitation of the
Board. As a minimum, Meridian pays
the Living Wage for all permanent
and fixed term employees. A range
of benefits are provided, including
employee insurance, enhanced
parental leave provisions, the ability
to purchase additional leave, and
access to purchasing discounts.
The Executive Team and Chief
Executive also have the opportunity
to participate in a long-term incentive
(LTI) plan. Both the STI scheme and
LTI plan are variable, performance-
based incentives, awarded only if
specific financial and non-financial
performance hurdles are met, and
at the discretion of the Board.
Fixed remuneration
Fixed remuneration includes base
salary and matched KiwiSaver
contributions of up to 4%. Salaries
are reviewed annually.
Short-term incentive (STI)
The STI is an at-risk incentive,
which may be offered for a specific
year, by invitation from the Board.
Potential STI payments reflect
achievement of predetermined
company profit levels and individual
performance objectives aligned to
business strategy and goals, and are
wholly-discretionary. An STI may
be paid subject to a behaviour gate
and company financial performance
hurdles, and at the discretion of
the Board.
The STI opportunity within total
remuneration reflects the complexity
and level of the roles. In FY20
the Chief Executive had an STI
opportunity of 50% of salary,
and the Executive Team STI
opportunity was 30%.
Long-term incentive (LTI)
An LTI plan is offered at the
discretion of the Board to the
New Zealand Executive Team, to
align executives’ and shareholders’
interests, and optimise long-term
shareholder returns.
The LTI opportunity is 40% of salary
for the Chief Executive, and 30%
of salary for the Executive Team.
Vesting of the LTI is contingent
on meeting both absolute and
relative Total Shareholder Return
(TSR) performance hurdles at the
conclusion of a three-year period.
Further details of the LTI plan are
provided on page 103.
Employee share ownership
Employees are invited to join
Meridian’s employee share ownership
plan, MyShare. Under MyShare,
Meridian shares are purchased for
participating employees, funded by
monthly pay deductions of between
$500 and $5,000 per annum. After
three years, participants may be
eligible for award shares subject
to ongoing employment (Tenure
Award Shares) and the company
TSR outperforming a peer group
of competitors (Performance Award
Shares). In FY20, 54.5% of employees
participated in MyShare, and this
has increased to 58.46% for FY21.
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Employee remuneration range
The number of employees and
former employees of Meridian
and its subsidiaries (not including
directors) who during the year
ended 30 June 2020 received
cash remuneration and other
benefits (including at-risk
performance incentives, KiwiSaver
contributions and redundancy
compensation) exceeding
$100,000 is outlined opposite:
BandTotal
Group
100,000–109,99975
110,000–119,99964
120,000–129,99973
130,000–139,99964
140,000–149,99936
150,000–159,99933
160,000–169,99921
170,000–179,99921
180,000–189,99917
190,000–199,99916
200,000–209,9999
210,000–219,9997
220,000–229,9995
230,000–239,9996
240,000–249,9993
250,000–259,9993
260,000–269,9992
270,000–279,9991
280,000–289,9994
290,000–299,9991
300,000–309,9994
310,000–319,9991
320,000–329,9991
330,000–339,9991
340,000–349,9995
350,000–359,9992
360,000–369,9991
370,000–379,9991
390,000–399,9993
410,000–419,9992
420,000–429,9993
460,000–469,9991
510,000–519,9991
540,000–549,9991
560,000–569,9991
790,000–799,9991
830,000–839,0001
1,290,000–1,299,9991
1,790,000–1,799,9991
493
* This includes 29 employees who are no longer employed by Meridian Energy Limited and its subsidiaries
99
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Rewarding strong performance

Chief Executive remuneration
Chief Executive remuneration for performance period ending 30 June 2020
Ye a r
Base
salary
Taxable
benefits
4
Fixed
rem
5
MyShare
6
Pay for performance
Total
rem
STI
7
LT I
8
Subtotal
FY20 $1,071,125 $42,845 $ 1,113,970 $2,500$ 517, 21 6$406,155$923,371$2,039,841
The Chief Executive is entitled to receive a matching employer KiwiSaver contribution of 4% of gross taxable earnings.
The company’s KiwiSaver contributions for the Chief Executive, paid within the FY20 period, were $69,099.
Chief Executive remuneration for performance period ending 30 June 2019
Ye a r
Base
salary
Taxable
benefits
4
Fixed
rem
5
MyShare
6
Pay for performance
Total
rem
STI
7
LT I
8
Subtotal
FY19$973,750$38,950$1,012,700$2,500$431,086$248,909$679,995$1,695,195
Five-year remuneration summary
Ye a rSingle figure rem
% STI
against maximum
% vested LTIs
against maximum
Span of LTI
performance period
9
FY20$2,039,84178.69%100%FY18–FY20
FY19$1,695,19590.91%100%FY17–FY19
FY18 $2,156,48472.8%75%FY16–FY18
FY17$2,379,76879. 29%100%FY15–FY17
FY16$2,370,55686.34%100%FY14–FY16
Neal Barclay was appointed as Chief Executive effective from 1 January 2018.
Chief Executive remuneration for FY18 therefore reflects the sum of Chief Executive remuneration for Neal Barclay and
previous Chief Executive, Mark Binns.
Notes
• MyShare is the $2,500 award
shares related to participation
in the FY18 MyShare plan.
• The LTI figure is payment relating
to the full vesting of the FY18 LTI
scheme, when Neal Barclay was
in a previous management role.
4. Taxable benefits are 4% company KiwiSaver
contributions on salary.
5. Fixed remuneration is salary plus company KiwiSaver
contributions.
6. MyShare is gross value of award shares received
in the applicable period.
7. STI is the potential payment based on performance
achieved for the applicable period and includes
4% company KiwiSaver contributions.
8. LTI is grossed up for PAYE, and in FY19 included
4% company KiwiSaver contributions. The LTI plan
changed in FY20.
9. An LTI plan was introduced in FY14 and the first
plan vested in FY16.
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Rewarding strong performance

Breakdown of Chief Executive pay for performance (FY20)
DescriptionPerformance measures% achieved
STI50% of base salary. Combination
of company result, and a scorecard
of financial and non-financial
company measures.
60% weighting on company performance (company profit,
which comprises Group EBITDAF minus capital charge).
118.1%
40% weighting on performance against a Board-approved
scorecard comprising financial and non-financial objectives,
as shown in the table below.
55%
LTIConditional awards of shares under
LTI scheme. 40% of base salary.
Absolute TSR over the relevant assessment period:
• must be positive; and > 50th percentile/median TSR
of the peer group
10
.
Hurdle met
Relative TSR—if positive and:
• > 50th percentile TSR of peer group, at least 50% vests
• ≥ 75th percentile TSR, 100% vests
• between the 50th and 75th percentile TSRs of peer group,
progressively vests on a straight-line basis.
100%
10. Peer Group comprises AGL Energy, Origin Energy Contact Energy, Mercury NZ, Trustpower, and Genesis Energy.
Pay for Performance Scorecard Measures for FY20
For FY20, the Board-approved scorecard comprising up to 40% of the Chief Executive’s STI was measured as follows:
Performance areaMeasuresWeighting
EmployeesTrend in Engagement score and TRIFR20%
CustomerNZ Retail Netback 20%
Australian customer numbers20%
Future DevelopmentRenewable development options20%
Migration to single customer platform20%
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102
Five-year summary – Total Shareholder Return (TSR)
performance (Meridian Energy vs peer group)
The TSR summary above illustrates the performance of
Meridian’s shares against a peer group of companies
between 1 July 2015 and 30 June 2020. TSR performance
outcomes are independently validated by external experts.
Chief Executive remuneration performance pay for FY20
The chart above depicts elements of the Chief Executive’s
remuneration design under various scenarios for the year
ended 30 June 2020, as a proportion of Total Remuneration.
3
1
%
1
7
%
1
4
%
5
9
%
9
%
11%
18%
9%
43%
-20%
-10%
0%
10%
20%
30%
40%
50%
60%
70%
80%
FY16FY17FY18FY19FY20
-8%
46%
58%
100%
27%
26%
27%
17%
0
$(000)
500
1,000
1,500
2,000
2,500
Fixed RemunerationMeets ExpectationsMaximum
Fixed remuneration
Annual Variable
LTI
Meridian
Peer group median
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Meridian Integrated Report 2020
Rewarding strong performanceRewarding strong performance

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Meridian Integrated Report 2020
Rewarding strong performance
Other remuneration
report components
Long-term incentive Plans (LTIs)
In August 2019, the Board approved
a new LTI plan to replace Meridian’s
previous LTI plan. Set out below
is a summary of the new LTI plan
which was first offered in FY20 (for
the period commencing on 1 July
2019 and ending 30 June 2022).
A summary of the previous LTI Plan
which was last offered in FY19 (for
the period commencing on 1 July
2018 and ending on 30 June 2021)
is included further below.
New LTI Plan
Under the new LTI plan, the company
issues rights to acquire ordinary
shares in the company (Share Rights)
to eligible participants who accept
the offer to participate in the LTI
plan. Each Share Right entitles the
holder to one ordinary share in the
company and an additional number
of shares equal to the value of gross
cash dividends per share which would
have been paid to a New Zealand
tax resident who held a share for
the duration of the vesting period,
calculated using a 10-day volume
weighted average price.
The number of Share Rights that vest
is dependent on the following
Vesting Conditions:
• Meridian’s total shareholder
return over a 3-year performance
period (Performance Period)
relative to Meridian’s cost of equity
and the total shareholder return
over the Performance Period of a
defined group of NZX Main Board
and ASX listed peer companies
(Performance Hurdles); and
• if the participant continues
to be employed by Meridian
during the vesting period
(Employment Condition).
Performance hurdles
Share Rights are granted in
two tranches:
• Absolute Return Share Rights;
and
• Relative Return Share Rights.
For Absolute Return Share Rights
to vest, the company’s TSR must
be greater than the absolute TSR
benchmark which is set at the
beginning of the vesting period
with regard to the company’s cost
of equity (Absolute TSR Benchmark)
on a compounding annual basis
over the Performance Period. If the
company’s TSR is equal to or lower
than the Absolute TSR Benchmark,
no Absolute Share Rights will vest.
If the company’s TSR is greater than
the Absolute TSR Benchmark, 100%
of the Absolute Return Share Rights
will vest.
The number of Relative Return Share
Rights that vest is determined by the
company’s TSR over the Performance
Period relative to the peer group. For
any of the Relative Return Share Rights
to vest, the company’s TSR must be
greater than or equal to the 50th
percentile / median TSR of the peer
group. 100% of the Share Rights will
vest on meeting the 75th percentile
TSR of the peer group, with vesting
on a straight-line basis between
these two points.
For each three-year plan, an
independent external expert
measures the TSR of Meridian and
the peer group of companies along
with the outcome on the progressive
vesting scale. Share Rights will lapse
if the Vesting Conditions are not
satisfied (although this is subject to
the Board’s discretion in relation
to the Employment Condition).

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Rewarding strong performance
Previous (LTI)
The LTI was a share loan and cash
bonus scheme, where executives
purchase Meridian shares via an
interest-free loan from the company,
with the shares held on trust by the
LTI plan trustee. Any shares awarded
depend on whether the following
performance hurdles are met over
a three-year period:
• The company’s absolute total
shareholder return (TSR) must
be positive; and
• The company’s TSR compared
to a benchmark peer group.
If the performance hurdles have
been achieved, a progressive vesting
scale is applied to determine how
many shares vest:
• If the company’s TSR over the
three-year period exceeds the 50th
percentile TSR of the benchmark
peer group, at least 50% of an
executive’s shares will vest;
• 100% shares will vest on meeting
the 75th percentile TSR of the peer
group, with vesting on a straight-
line basis between these two points;
and
• No shares will vest if the company’s
TSR is less than the 50th percentile
TSR of the peer group.
Over the three-year period, any
dividends paid on the shares are
applied to the executive’s loan
balance. Once the vesting level
has been confirmed, a cash amount
(after the deduction of tax, but before
other applicable salary deductions)
is used to repay the executive’s
outstanding loan balance.
For each three-year plan, an
independent external expert
measures TSR of Meridian and the
peer group of companies along with
the outcome on the progressive
vesting scale. If TSR is not positive
(i.e. in absolute terms is less than
zero), or if TSR does not meet the peer
group relative TSR hurdle of 50th
percentile, the shares are forfeited to
the trustee and the relevant executive
receives no benefits under the LTI.
Where the TSR is greater than the
50th percentile of the benchmark
peer group, but below the 75th
percentile, shares that have not
vested will also be forfeited.
For the LTI plan that vested at the
end of 2020, the level of vesting
was 100% (2019: 100%). Therefore,
the outstanding balance of the
interest free loans at 30 June 2020
of $0.5 million has now been repaid
(2019: $0.6 million). A total amount
of 208,707 shares have been
transferred to the eligible participants
(2019: 223,623), and 154,388 shares
forfeited (2019: 70,051).
Other information
Meridian has a policy to ensure that
the participants of the Executive LTI
Plan are not permitted to enter into
transactions (whether through the
use of derivatives or otherwise)
that limit the economic risk of
participating in the Plan.
Meridian has written agreements
with the Chief Executive and
executives setting out the terms
of their employment.
Neal Barclay will be employed as
Chief Executive until his employment
is terminated in accordance with his
employment agreement. Pursuant
to the employment agreement, the
Chief Executive and Meridian have
mutual rights of termination on the
provision of six months’ written
notice. Meridian may also terminate
the Chief Executive’s employment
on the grounds of redundancy or
serious misconduct or where an
act of bankruptcy is committed.

105
Introduction

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Rewarding strong performance
Approved director remuneration for FY20
Director remuneration is paid from the total director fee pool that was
approved by shareholders at the Annual Meeting of 28 October 2016.
Shareholder approved annual director fee pool
FY19FY20
Board fees$1,000,000$1,000,000
Committee fees$100,000$100,000
Total pool$1,100,000$1,100,000
Individual Board–approved annual fee breakdown
Position heldFY19FY20
Chair$200,000$200,000
Deputy Chair$140,000$140,000
Director$110,000$110,000
Audit & Risk Committee Chair$22,500$22,500
Audit & Risk Committee member$10,000$10,000
Safety & Sustainability Committee Chair$15,000$15,000
Safety & Sustainability Committee member $9, 200$9, 200
People & Remuneration Committee Chair $15,000$15,000
People & Remuneration Committee member $9,100$9,100

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Rewarding strong performance
Director remuneration received in FY20
Name of Director
Board
fees
Audit & Risk
Committee
People &
Remuneration
Committee
Safety &
Sustainability
Committee
Tot a l
remuneration
Mark Verbiest
11
(Chair)$173,342–$2,695–$176,037
Peter Wilson
12

(Deputy Chair)$140,000$10,000–$12,992$162 ,992
Mark Cairns
13
$110,000$6,539–$5,192
(Chair)
$121,731
Jan Dawson
14
$110,000$12,065$10,598
(Chair)
–$132,663
Mary Devine
15
$32,582–$4,443–$37,025
Anake Goodall$110,000––$9, 200$119, 200
Michelle Henderson
16
$78,016$3,489–6,52588,030
Julia Hoare
17
$83,995$15,897
(Chair)
––$99,892
Chris Moller
18
$59, 239–––59, 239
Nagaja Sanatkumar
19
$55,000–$4,550–$59,550
Total$952,174$ 47,9 90$22,286$33,909$1,056,359
Directors are reimbursed for all reasonable and properly documented expenses
incurred in performing their duties as Meridian directors. No additional
payments or benefits were received by directors in FY20.
Meridian employees appointed as directors of Meridian subsidiaries do not
receive any directorship fees.
11. Appointed Chair 17 October 2019. Does not receive additional fees for committee membership as Chair.
12. Ceased as Chair of the Safety and Sustainability Committee, effective 25 February 2020.
13. Appointed Chair of the Safety and Sustainability Committee and ceased from the Audit & Risk
Committee, effective 25 February 2020.
14. Appointed Chair of the People & Remuneration Committee, effective 16 October 2019.
15. Ceased from the Board effective 17 October 2019.
16. Appointed to the Board and Safety and Sustainability Committee, effective 16 October 2019.
Appointed to the Audit & Risk Committee, effective 25 February 2020.
17. Appointed to the Board effective 26 September 2019. Appointed to the Audit & Risk Committee,
effective 16 October 2019.
18. Ceased from the Board effective 17 October 2019.
19. Appointed to the Board and People & Remuneration Committee, effective 1 January 2020.

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Further disclosures
Further disclosures
Further disclosures required
by the NZX Listing Rules, the
Companies Act 1993 and other
legislation or rules.

108
Meridian Integrated Report 2020
Further disclosures
Meridian Energy
The table opposite outlines the
current directors of Meridian
Energy Limited, as well as the
changes among the people
who held office as directors of
Meridian Energy Limited:
Company nameDirectors
Meridian Energy LimitedAnake Goodall, Chris Moller (ceased 17 October 2019),
Jan Dawson, Julia Hoare (appointed 26 September 2019),
Mark Cairns, Mark Verbiest, Mary Devine (ceased 17 October 2019),
Michelle Henderson (appointed 16 October 2019),
Nagaja Sanatkumar (appointed 1 January 2020), Peter Wilson.
As at 30 June 2020As at 30 June 2019
FemaleMaleFemaleMale
Number of directors4425
Percentage of directors50.0%50.0%28.6%71.4%
Number of officers4627
Percentage of officers40.0%60.0%22.2%7 7. 8 %
Current Board and Executive
team gender composition
In accordance with NZX Listing
Rules, the gender make-up of
Meridian’s directors and officers
as at 30 June 2020 is:
The Board has determined that as at 30 June 2020, all Meridian directors are
independent. The factors relevant to this determination are that no director:
• has, within the last three years, been employed in an executive role by
Meridian or any of its subsidiaries;
• has held, within the last 12 months, a senior role in a provider of material
professional services to Meridian or its subsidiaries;
• has had, within the last three years, a material business relationship with
Meridian or its subsidiaries;
• is a substantial product holder of Meridian, or a senior manager of, or
person otherwise associated with a substantial product holder of Meridian;
• has had, within the last three years, a material contractual relationship
with Meridian or any of its subsidiaries;
• has close family ties with anyone in the categories listed above; and
• has been a director of Meridian for a length of time that may
compromise independence.

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Meridian Integrated Report 2020
Further disclosures
Meridian subsidiaries
The following tables list the
subsidiaries of Meridian Energy
Limited during the accounting
period, and any changes to
those subsidiaries and among
the people who held office
as directors.
New Zealand subsidiaries
Company nameDirectorsFurther information
Dam Safety Intelligence LimitedNeal Barclay, Tania Palmer (appointed 10 December 2019)Jason Stein (ceased 10 December 2019)
Flux Federation LimitedNeal Barclay, Michael Roan Jason Stein (ceased 10 December 2019),
Gillian Blythe (ceased 13 December 2019)
Meridian Energy Captive Insurance LimitedNeal Barclay, Michael Roan Jason Stein (ceased 10 December 2019)
Meridian Energy International LimitedNeal Barclay, Michael Roan Jason Stein (ceased 10 December 2019)
Meridian LimitedNeal Barclay, Michael Roan Jason Stein (ceased 10 December 2019)
Meridian LTI Trustee LimitedAnake Goodall, Jan Dawson (appointed 17 October 2019)Mary Devine (ceased 17 October 2019)
Powershop New Zealand LimitedNeal Barclay, Michael Roan Jason Stein (ceased 10 December 2019)
Three River Holdings No. 1 LimitedNeal Barclay, Michael Roan Jason Stein (ceased 10 December 2019)
Three River Holdings No. 2 LimitedNeal Barclay, Michael Roan Jason Stein (ceased 10 December 2019)

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Meridian Integrated Report 2020
Further disclosures
Australian subsidiaries
Company nameDirectorsFurther information
Meridian Australia Holdings Pty LimitedNeal Barclay, Michael Roan, Tony Sherburn (appointed
13 September 2019), Jason Stein (appointed 19 February 2020)
Ed McManus (ceased 14 September 2019),
Gillian Blythe (ceased 13 December 2019)
Meridian Energy Australia Pty LimitedNeal Barclay, Michael Roan, Tony Sherburn (appointed
13 September 2019), Jason Stein (appointed 19 February 2020)
Ed McManus (ceased 14 September 2019),
Gillian Blythe (ceased 13 December 2019)
Meridian Energy Markets Pty LimitedNeal Barclay, Michael Roan, Tony Sherburn (appointed
13 September 2019), Jason Stein (appointed 19 February 2020)
Ed McManus (ceased 14 September 2019),
Gillian Blythe (ceased 13 December 2019)
Meridian Finco Pty LimitedNeal Barclay, Michael Roan, Tony Sherburn (appointed
13 September 2019), Jason Stein (appointed 19 February 2020)
Ed McManus (ceased 14 September 2019),
Gillian Blythe (ceased 13 December 2019)
Meridian Wind Australia Holdings
Pty Limited
Neal Barclay, Michael Roan, Tony Sherburn (appointed
13 September 2019), Jason Stein (appointed 19 February 2020)
Ed McManus (ceased 14 September 2019),
Gillian Blythe (ceased 13 December 2019)
Meridian Wind Monaro Range Holdings
Pty Limited
Neal Barclay, Michael Roan, Tony Sherburn (appointed
13 September 2019), Jason Stein (appointed 19 February 2020)
Ed McManus (ceased 14 September 2019),
Gillian Blythe (ceased 13 December 2019)
Meridian Wind Monaro Range Pty LimitedNeal Barclay, Michael Roan, Tony Sherburn (appointed
13 September 2019), Jason Stein (appointed 19 February 2020)
Ed McManus (ceased 14 September 2019),
Gillian Blythe (ceased 13 December 2019)
Mt Millar Wind Farm Pty LimitedNeal Barclay, Michael Roan, Tony Sherburn (appointed
13 September 2019), Jason Stein (appointed 19 February 2020)
Ed McManus (ceased 14 September 2019),
Gillian Blythe (ceased 13 December 2019)
Mt Mercer Windfarm Pty LimitedNeal Barclay, Michael Roan, Tony Sherburn (appointed
13 September 2019), Jason Stein (appointed 19 February 2020)
Ed McManus (ceased 14 September 2019),
Gillian Blythe (ceased 13 December 2019)
Powershop Australia Pty LimitedNeal Barclay, Michael Roan, Tony Sherburn (appointed
13 September 2019), Jason Stein (appointed 19 February 2020)
Ed McManus (ceased 14 September 2019),
Gillian Blythe (ceased 13 December 2019)
GSP Energy Pty LimitedNeal Barclay, Michael Roan, Tony Sherburn (appointed
13 September 2019), Jason Stein (appointed 19 February 2020)
Ed McManus (ceased 14 September 2019),
Gillian Blythe (ceased 13 December 2019)
Rangoon Energy Park Pty LimitedNeal Barclay, Tony Sherburn, Mike Roan (all appointed
3 March 2020), Jason Stein (appointed 19 June 2020)
–
Wandsworth Wind Farm Pty LimitedNeal Barclay, Tony Sherburn, Mike Roan (all appointed
3 March 2020), Jason Stein (appointed 19 June 2020)
–
UK subsidiary
Company nameDirectorsFurther information
Flux-UK LimitedTania Palmer (appointed 29 April 2020),
Guy Waipara (appointed 29 April 2020)
Neal Barclay (ceased 30 April 2020),
Jim Barret (ceased 30 April 2020)

111
Meridian Integrated Report 2020
Further disclosures
Particulars of entries in the
interests register made during
the accounting period
Shareholders can review Meridian
Energy Limited’s full interests
register on request.
In accordance with sections 140 and
211(e) of the Companies Act 1993,
the table below lists the general
disclosures of interest by directors
of Meridian Energy Limited and
its subsidiaries.
NamePositionDisclosures
Anake GoodallDirector, Meridian Energy Limited and Meridian
LTI Trustee Limited
Impax Environmental Markets—Shareholder
Moreton Resources Limited (formerly Cougar Energy Limited)—Shareholder
Seed The Change — He Kākano Hāpai—Chair
Chris Moller (ceased
17 October 2019)
Chair, Meridian Energy LimitedContact Energy Limited—Shareholder
Trustpower Limited—Bondholder
Westpac New Zealand Limited—Director
Jan DawsonDirector, Meridian Energy LimitedAIG Insurance New Zealand Limited—Director
Air New Zealand Limited—Director, Shareholder and Bondholder
Mercury NZ Limited—Shareholder
Westpac New Zealand Limited—Chair
Julia Hoare Director, Meridian Energy LimitedThe a2 Milk Company Limited—Deputy Chair and Shareholder**
Auckland International Airport Limited—Director and Shareholder**
AWF Madison Limited—Director**
External Reporting Advisory Panel—member**
Institute of Directors—Vice President**
Mercury NZ Limited—Shareholder**
Port of Tauranga Limited —Director**
Sustainable Finance Forum—Leaders’ Group member**
Watercare Services Limited—Deputy Chair**
Nagaja SanatkumarDirector, Meridian Energy LimitedAmazon.com, Inc.—Shareholder**
Imagen8 Limited—Director**
New Zealand Post Limited—Director**
Nova Digital Consulting Limited—Director and Principal**
Mark CairnsDirector, Meridian Energy LimitedCoda GP Limited—Director
Northport Limited—Director
Port of Tauranga Limited—Employee
Port of Tauranga Trustee Company Limited—Director
Quality Marshalling Limited—Chair
Mark VerbiestDirector, Meridian Energy LimitedANZ Bank New Zealand Limited—Director
Freightways Limited—Chair and Shareholder
Infratil Limited—Shareholder
Mycare Limited—Chair *
Mycare Limited—Shareholder
New Zealand Treasury Advisory Board
Southern Lakes Arts Festival Trust—Trustee
Southern Alps Rescue Trust—Trustee
UDC Finance Limited—Chair*
Willis Bond Capital Partners Limited—Chair and Shareholder
Willis Bond General Partner Limited—Chair
* Entries removed by notices given by directors during the year ended 30 June 2020.
** Entries added by notices given by directors during the year ended 30 June 2020.

112
Meridian Integrated Report 2020
Further disclosures
NamePositionDisclosures
Mary Devine (ceased
17 October 2019)
Director, Meridian Energy Limited and Meridian
LTI Trustee Limited
Hallenstein Glasson Holdings Limited—Managing Director
Foodstuffs (New Zealand) Limited—Director
Foodstuffs South Island Limited—Director
Michelle Henderson Director, Meridian Energy Limited Southern Institute of Technology Engineering and Trades Advisory
Committee—Member**
Youthline Southland Charitable Trust
(formerly Youthline Southland Inc)—Director**
Peter WilsonDirector, Meridian Energy LimitedArvida Group—Chair
Contact Energy Limited—Shareholder
Genesis Energy Limited—Bondholder
Genesis Energy Limited—Shareholder
Infratil Limited—Shareholder
Mercury NZ Limited—Bondholder
Mercury NZ Limited—Shareholder
* Entries removed by notices given by directors during the year ended 30 June 2020.
** Entries added by notices given by directors during the year ended 30 June 2020.

113
Meridian Integrated Report 2020
Further disclosures
During FY20, the following disclosure
was made in accordance with section
148 of the Companies Act 1993:
Director
Nature of
relevant interestDate
Acquisition/
DisposalClass
Number
Acquired
Consideration
received per share
Nagaja Sanatkumar
Beneficial interest 1) 3 September 2019
2) 6 September 2019
AcquisitionShares1) 982.8402
2) 2739.7987
1) $5.07
2) $5.465
Director
Number
of shares
Number
of bonds
Mark Cairns235,000–
Jan Dawson51,300–
Anake Goodall60,000–
Michelle Henderson––
Julia Hoare––
Nagaja Sanatkumar3,722.6389–
Mark Verbiest35,000–
Peter Wilson99,170–
Senior Manager
Number
of shares
Neal Barclay581,759
Chris Ewers 52,741
Lisa Hannifin28,020
Mike Roan266,786
Jason Stein291,692
Guy Waipara373,759
Director Indemnity and Insurance
Pursuant to section 162 of the
Companies Act 1993, as permitted
by Meridian’s Constitution, Deeds
of Indemnity have been given to
directors for potential liabilities and
costs they might incur for actions
or omissions in their capacity as
directors. From 1 May 2020,
Meridian’s directors’ and officers’
liability insurance was renewed to
cover risks normally covered by
such policies. Insurance is not
provided for dishonest, fraudulent,
malicious or wilful acts or omissions.
Donations
The Meridian Energy Group made
donations totalling $1,108,340.68
during FY20. Meridian does not
make donations to political parties.
All donations must be approved
by the Board.
Auditor
The Auditor-General has appointed
Mike Hoshek of Deloitte Limited as
auditor of the company. Meridian and
its subsidiaries paid $0.8 million (2019:
$0.8 million) to Deloitte Limited as
audit fees in FY20.
The fees for other services undertaken
by Deloitte Limited during FY20
totalled $0.1 million (2019: $0.1 million).
These related to other assurance
assignments for the Group in the
areas of greenhouse gas inventory
assurance, limited assurance of the
sustainability content in this Report,
review of the interim financial
statements, audit of the securities
registers, vesting of the executive
long-term incentive plan, the solvency
return of Meridian Captive Insurance
Limited and supervised reporting.
Interests in Meridian Securities
In accordance with NZX Listing
Rule 3.7.1(d), as at 30 June 2020
Meridian Energy Limited directors
had the following relevant interests
in Meridian Energy Limited Quoted
Financial Products:
Senior managers’ equity holdings
As at 30 June 2020, the following
senior managers had relevant
interests in Meridian Energy
Limited shares:

114
Meridian Integrated Report 2020
Further disclosures
Twenty largest registered
holders of Quoted Financial
Products as at the balance date
The table opposite lists the
Company’s 20 largest registered
shareholders as at 30 June 2020:
Names
Number of shares% of issued shares
Her Majesty The Queen In Right Of New Zealand Acting by
and Through Her Minister of Finance And Minister for SOEs1,307,586,374 51.018
HSBC Nominees (New Zealand) Limited*130,849,682 5.105
J.P. Morgan Chase Bank Na NZ Branch-Segregated Clients Acct* 111,391,798 4.346
HSBC Nominees (New Zealand) Limited A/C State Street* 109,815,781 4.285
Citibank Nominees (New Zealand) Limited*85,487,309 3.335
Accident Compensation Corporation*46,166,160 1.801
Custodial Services Limited28,210,259 1.101
Custodial Services Limited27, 6 57,1 3 6 1.079
Forsyth Barr Custodians Limited27,433,130 1.07
HSBC Nominees A/C NZ Superannuation Fund Nominees Limited*24,831,286 0.969
JBWere (NZ) Nominees Limited23,719,809 0.925
BNP Paribas Nominees (NZ) Limited*23,621,044 0.922
TEA Custodians Limited Client Property Trust Account*21,033,135 0.821
BNP Paribas Nominees (NZ) Limited*19,849,168 0.7 74
National Nominees Limited*19,7 12,686 0.769
Custodial Services Limited16,756,874 0.654
ANZ Wholesale Australasian Share Fund*15,565,278 0.607
FNZ Custodians Limited 13,832,550 0.54
New Zealand Depository Nominee Limited 12,506,225 0.488
BNP Paribas Nominees (NZ) Limited* 11,075,195 0.432
*Held through New Zealand Central Securities Depository Limited (NZCSD). NZCSD provides a custodial service that allows electronic trading of securities by its members.

115
Meridian Integrated Report 2020
Further disclosures
The table below lists the
Company’s 20 largest registered
holders of MEL030 retail fixed-rate
bonds as at 30 June 2020:
Names
Number of bonds% of issued shares
BNP Paribas Nominees (NZ) Limited*22,187,00014.79
BNP Paribas Nominees (NZ) Limited*16,800,00011.20
Citibank Nominees (New Zealand) Limited*14,531,0009.69
FNZ Custodians Limited13,637,0009.09
Forsyth Barr Custodians Limited 12,382,0008.25
Investment Custodial Services Limited 5,613,0003.74
TEA Custodians Limited Client Property Trust Account*5,335,0003.56
Mt Nominees Limited*4,000,0002.67
Ning Gao3,331,0002.22
Custodial Services Limited 3,142,0002.09
ANZ Custodial Services New Zealand Limited*2,657,0001.77
Custodial Services Limited 2,652,0001.77
Custodial Services Limited 2,512,0001.67
J.P. Morgan Chase Bank Na NZ Branch-Segregated Clients Acct*2,220,0001.48
JBWere (NZ) Nominees Limited2,045,0001.36
Custodial Services Limited1,861,0001.24
FNZ Custodians Limited1,423,0000.95
University Of Otago Foundation Trust1,400,0000.93
Custodial Services Limited1,133,0000.76
FNZ Custodians Limited1,107,0000.74
*Held through New Zealand Central Securities Depository Limited (NZCSD). NZCSD provides a custodial service that allows electronic trading of securities by its members.

116
Meridian Integrated Report 2020
Further disclosures
Names
Number of bonds% of issued shares
BNP Paribas Nominees (NZ) Limited*19,718,00013.15
Citibank Nominees (New Zealand) Limited*16,430,00010.95
BNP Paribas Nominees (NZ) Limited*11,550,0007.70
Custodial Services Limited8,229,0005.49
Custodial Services Limited7,773,0005.18
FNZ Custodians Limited7,310,0004.87
Investment Custodial Services Limited5,784,0003.86
HSBC Nominees (New Zealand) Limited*5,060,0003.37
Custodial Services Limited 4,647,0003.10
Forsyth Barr Custodians Limited 4,218,0002.81
Custodial Services Limited3,823,0002.55
TEA Custodians Limited Client Property Trust Account*3,446,0002.30
J.P. Morgan Chase Bank Na NZ Branch-Segregated Clients Acct*3,000,0002.00
NZPT Custodians (Grosvenor) Limited*3,000,0002.00
Custodial Services Limited 2,839,0001.89
National Nominees Limited*2,500,0001.67
New Zealand Methodist Trust Association2,357,0001.57
Forsyth Barr Custodians Limited1,810,0001.21
TEA Custodians Nominees Limited1,405,0000.94
Woolf Fisher Trust Incorporated1,300,0000.87
The table below lists the
Company’s 20 largest registered
holders of MEL040 retail fixed-rate
bonds as at 30 June 2020:
*Held through New Zealand Central Securities Depository Limited (NZCSD). NZCSD provides a custodial service that allows electronic trading of securities by its members.

117
Meridian Integrated Report 2020
Further disclosures
The table below lists the
Company’s 20 largest registered
holders of MEL050 retail fixed-rate
bonds as at 30 June 2020:
NamesNumber of bonds% of issued shares
ANZ Custodial Services New Zealand Limited*48,071,00024.04
FNZ Custodians Limited17,371,0008.69
Forsyth Barr Custodians Limited15,897,0007.9 5
Investment Custodial Services Limited12,957,0006.48
HSBC Nominees (New Zealand) Limited A/C State Street*11,900,0005.95
BNP Paribas Nominees (NZ) Limited 9,397,0004.70
Custodial Services Limited 8,018,0004.01
Custodial Services Limited 4,471,0002.24
Citibank Nominees (New Zealand) Limited*4,400,0002.20
Mint Nominees Limited*4,138,0002.07
Mt Nominees Limited*4,000,0002.00
Custodial Services Limited3,823,0001.91
HSBC Nominees (New Zealand) Limited*3,700,0001.85
Custodial Services Limited 3,613,0001.81
JBWere (NZ) Nominees Limited3,197,0001.60
TEA Custodians Limited Client Property Trust Account*2,690,0001.35
NZPT Custodians (Grosvenor) Limited*2,570,0001.29
Custodial Services Limited1,909,0000.95
Risk Reinsurance Limited1,600,0000.80
Forsyth Barr Custodians Limited1,392,0000.70
*Held through New Zealand Central Securities Depository Limited (NZCSD). NZCSD provides a custodial service that allows electronic trading of securities by its members.

118
Meridian Integrated Report 2020
Further disclosures
Substantial security holder
The following information is given
pursuant to section 293 of the
Financial Markets Conduct Act 2013.
The substantial security holder
in the Company and its relevant
interests listed opposite. The total
number of voting products in the
class as at 30 June 2020
was 2,563,000,000.
21
20. As at 30 June 2020, the total number of ordinary
shares was 2,563,000,000 which included 409,668
ordinary shares held by Meridian as treasury stock.
Name
Relevant interest
in number of shares
% of shares held
at the date of noticeDate of notice
Ordinary Shares
Her Majesty the Queen in Right of New Zealand1,353,786,55052,8206 July 2015
Size of holdingNumber of holders% Number of sharesHolding quantity %
1–1,0008,46018.016,95 8, 2390.27
1,001–5,00022,30947. 5 064,603,0382.52
5,001–10,0008,84318.8369,4 69,5802.71
10,001–50,0006,60314.06134,542,2975.25
50,001–100,0004711.0033,233,1131.30
100,001–500,0002050.4440,183,6631.57
500,001 and over720.152,214,010,07086.38
Total46,963100.002,563,000,000100.00
Distribution of shareholders
and holdings as at 30 June 2020
The table opposite provides
information on the distribution
of shareholders and holdings of
Meridian Energy Limited ordinary
shares as at 30 June 2020.

119
Meridian Integrated Report 2020
Further disclosures
Distribution of bondholders and
holdings as at 30 June 2020
The table opposite provides
information on the distribution
of MEL030 retail fixed-rate bonds
as at 30 June 2020:
Size of holdingNumber of
bondholders
% of
bondholders
Number of
bonds
% of
bonds
1,001–5,000
729.3 4360,0000.24
5,001–10,00018223.611,732,0001.15
10,001–50,00040552.5311,239,0007. 49
50,001–100,000455.843,798,0002.53
100,001–500,000425.458,713,0005.81
500,001 and over253.24124,158,00082.77
Total771100.00150,000,000100.00
Size of holding
Number of
bondholders
% of
bondholders
Number of
bonds
% of
bonds
1,001–5,000375.10185,0000.12
5,001–10,00011015.171,021,0000.68
10,001–50,00044260.9711,990,0007.9 9
50,001–100,0007410.215,605,0003.74
100,001–500,000354.838,664,0005.78
500,001 and over273.72122,535,00081.69
Total725100.00150,000,000100.00
The table opposite provides
information on the distribution
of MEL040 retail fixed-rate bonds
as at 30 June 2020:

120
Meridian Integrated Report 2020
Further disclosures
Size of holding
Number of
bondholders% of bondholdersNumber of bonds% of bonds
1,001–5,000284.15137,0000.07
5,001–10,0009714.37910,0000.46
10,001–50,00039758.8111,159,0005.58
50,001–100,0008813.046,890,0003.45
100,001–500,000355.198,109,0004.05
500,001 and over304.44172,795,00086.4
Total675100.00200,000,000100.00
Waivers from NZX
On 31 January 2020, NZX
Regulation published a waiver
decision in respect of Listing Rules
5.2.1 and 8.1.5 which documented
a prior waiver decision dated 18
September 2013. A copy of this waiver
decision and a summary of all waivers
granted and published by the NZX
or relied on by Meridian during the
12 months preceding 30 June 2020
is available on Meridian’s website
at: www.meridianenergy. co.nz/
investors/governance/nzx-waivers/.
Non-standard designation
In New Zealand, Meridian Energy
Limited has a ‘non-standard’ (NS)
designation on the NZX Main Board.
This is due to particular provisions of
the company’s constitution, including
requirements that regulate the
ownership and transfer of Meridian
securities. The NS designation is
also required as a condition of any
NZX waivers and approvals.
Credit rating as at 30 June 2020
Meridian Energy Limited had a
Standard & Poor’s corporate credit
rating of BBB+/Stable/A-2 in FY20.
On 10 July 2020, Standard & Poor’s
revised Meridian’s credit rating
outlook to BBB+/Negative.
Registration as a foreign company
Meridian has registered with the
Australian Securities and Investments
Commission as a foreign company and
has been issued with an Australian
Registered Body Number of 151 800 396.
ASX disclosures
Meridian holds a foreign exempt
listing on the ASX. As a requirement
of admission Meridian must make the
following disclosures:
• Meridian’s place of incorporation is
New Zealand; and
• Meridian is not subject to Chapters
6, 6A, 6B and 6C of the Australian
Corporations Act dealing with the
acquisition of shares (including
substantial holdings and takeovers).
Shareholding restrictions
The Public Finance Act was
amended in June 2012 to include
restrictions on the ownership of
certain types of security issued
by each mixed-ownership-model
company (including Meridian) and
the consequences of breaching
those restrictions. The constitution
incorporates these restrictions and
mechanisms for monitoring and
enforcing them.
A summary of the restrictions on
the ownership of shares under
the Public Finance Act and the
constitution is set out below. If the
company issues any other class of
shares, or other securities confer
voting rights, in the future, the
restrictions summarised below will
also apply to those other classes
of shares or voting securities.
The table opposite provides
information on the distribution
of MEL050 retail fixed-rate
bonds as at 30 June 2020:

121
Meridian Integrated Report 2020
Further disclosures
51% holding
The Crown must hold at least 51%
of the shares on issue.
The company must not issue, acquire
or redeem any shares if such issue,
acquisition or redemption would
result in the Crown falling below
this 51% holding.
10% limit
No person (other than the Crown)
may have a ‘relevant interest’
21
in
more than 10% of the shares on
issue (10% Limit).
The company must not issue,
acquire, redeem or transfer any
shares if it has actual knowledge
that such issue, acquisition,
redemption or transfer will result
in any person other than the Crown
exceeding the 10% Limit.
21. In broad terms, a person has a ‘relevant interest’ in
a share if the person (a) is the registered holder or
beneficial owner of the share; or (b) has the power
to exercise, or control the exercise of, a right to vote
attached to the share or has the power to acquire or
dispose of, or to control the acquisition or disposition
of, that share. A person may also have a ‘relevant
interest’ in a share in which another person has a
‘relevant interest’ depending on the nature of the
relationship between them.
Ascertaining whether
a breach has occurred
If a holder of shares breaches the
10% Limit or knows or believes that
a person who has a relevant interest
in shares held by that holder may
have a relevant interest in shares in
breach of the 10% Limit, the holder
must notify the company of the
breach or potential breach.
Meridian may require a holder of
shares to provide the company with
a statutory declaration if the Board
knows or believes that a person is,
or is likely to be, in breach of the
10% Limit. That statutory declaration
is required to include, where
applicable, details of all persons
who have relevant interests in
shares as a result of the shares
held by or on behalf of that holder.
Determining whether
a breach has occurred
The company has the power to
determine whether a breach of
the 10% Limit has occurred. In
broad terms, if:
• the company considers that a
person may be in breach of the
10% Limit; or
• a holder of shares fails to lodge a
statutory declaration when required
to do so or lodges a declaration
that has not been completed to
the reasonable satisfaction of
the company,
Meridian is required to determine
whether or not the 10% Limit has
been breached and, if so, whether
or not that breach was inadvertent.
The company must give the affected
shareholder the opportunity to make
representations to the company
before it makes a determination
on these matters.
Effect of exceeding the 10% Limit
A person who is in breach of the
10% Limit must:
• comply with any notice that they
receive from the company requiring
them to dispose of shares or their
relevant interest in shares, or take
any other steps that are specified
in the notice, for the purpose
of remedying the breach and
reducing their holding below the
10% Limit; and
• ensure that they are no longer in
breach within 60 days after the
date on which they became aware,
or ought to have been aware, of
the breach. If the breach is not
remedied within that timeframe, the
company may arrange for the sale
of the relevant number of shares on
behalf of the relevant shareholder.
In those circumstances the company
will pay the net proceeds of sale,
after the deduction of any other
costs incurred in connection with
the sale (including brokerage and
the costs of investigating the breach
of the 10% Limit), to the relevant
shareholder as soon as practicable
after the sale has been completed.

122
Meridian Integrated Report 2020
Further disclosures
If a relevant interest is held in any
shares in breach of the 10% Limit then,
for as long as that breach continues:
• no votes may be cast directly by a
shareholder in respect of any of the
shares in which a relevant interest is
held in excess of the 10% Limit; or
• a registered holder of shares in
which a relevant interest is held in
breach of the 10% Limit will not be
entitled to receive, in respect of the
shares in which a relevant interest
is held in excess of the 10% Limit,
any dividend or other distribution
authorised by the Board in respect
of the shares.
However, if the Board determines
that a breach of the 10% Limit was
not inadvertent, or that it does
not have sufficient information to
determine that the breach was not
inadvertent, the restrictions on voting
and entitlement to receive dividends
and other distributions described
in the preceding paragraphs will
apply in respect of all of the shares
(as applicable) held by the relevant
shareholder or holder (and not just
the shares in which a relevant interest
is held in excess of the 10% Limit).
The Board may refuse to register
a transfer of shares if it knows or
believes that the transfer will result
in a breach of the 10% Limit or where
the transferee has failed to lodge a
statutory declaration requested from
it by the Board within 14 days of the
date on which the company gave
notice to the transferee to provide
such statutory declaration.
Crown directions
The Crown has the power to direct
the Board to exercise certain of the
powers conferred on it under the
constitution. For example, where the
Crown suspects that the 10% Limit
has been breached but the Board
has not taken steps to investigate the
suspected breach, the Crown may
require the company to investigate
whether a breach of the 10% Limit
has occurred or to exercise a power
of sale of the relevant share that
has arisen as described under the
heading ‘Effect of exceeding the
10% Limit’ above.
Trustee corporations
and nominee companies
Trustee corporations and nominee
companies (that hold securities on
behalf of a large number of separate
underlying beneficial holders) are
exempt from the 10% Limit provided
that certain conditions are satisfied.
Share cancellation
In certain circumstances shares can
be cancelled by Meridian through a
reduction of capital, share buyback or
other form of capital reconstruction
approved by the Board and, where
applicable, shareholders.
NZX Corporate Governance Code
Meridian complied with the NZX
Corporate Governance Code
recommendations in all material
respects during FY20 other than
in respect of recommendation
3.6 as the Board has determined,
given Meridian’s status as a mixed-
ownership model company, it is
not appropriate nor necessary
for Meridian to adopt a takeover
protocol, although there are
protocols to ensure compliance
with the constitution. Meridian has
a separate Corporate Governance
Statement available on its website at
https://www.meridianenergy.co.nz/
investors/governance/. The Corporate
Governance Statement outlines in
detail Meridian’s compliance with the
NZX Corporate Governance Code and
is current as at 26 August 2020.

Trade associations*FY16FY17FY18FY19FY20
Total spent (NZD)$162,365$242,513$246,463$222,624$299,129
Largest contributions
Value to electricity customers
(ERANZ, The Energy Charter)
$52,365$1 67,76 3$1 67,76 3$122,077$140,520
Sustainable business (SBC, SBN)$21,000$18,500$22,450$22,450$22,649
Clean energy advocacy (Clean Energy
Council, NZ Wind Energy Association,
NZ Hydrogen Association, Drive
Electric, Climate Leaders Coalition,
Melbourne Energy Institute)
$7,000$21,750$24,250$46,096$40,130
Other Large Expenditures
(Business NZ, Business Energy
Council, Australian Energy Council)
$82,000$34,500$32,000$32,000$95,830
* FY19 Clean energy advocacy figure for FY19 has been restated to $46,096
New Zealand**Australia***
Permanent employeesFemaleMaleFemaleMaleTotal
Permanent full time* 428 514**** 20 55 1,017
Permanent part time 26 – 1 1 28
Temp/Fixed term employees
Temp/fixed term full time 30 15 1 4 50
Temp/fixed term part time 7 9 1 1 18
Total 491 538 23 61 1,113
* 3 of these employees are based in the UK (all male)
** 154 of these employees work for Powershop New Zealand
** 162 of these employees work for Flux Federation New Zealand
*** 2.38% of these staff are covered by collective bargaining agreements
**** Meridian AU CEO included in NZ as forms part of the Group Executive Team
123
Meridian Integrated Report 2020
Further disclosures

Financials
124
Meridian Integrated Report 2020
Financials

125
Meridian Integrated Report 2020
Financials
This year was another successful year
for our Company. We have continued
to grow our customer businesses and
navigate some significant challenges,
particularly the impact of the COVID-19
pandemic and the termination of the
contract with the T īwai Point Aluminium
Smelter. We are confident we have the
team and the strategies to manage
through these uncertain times.

127Income Statement
The income earned and operating
expenditure incurred by the Meridian
Group during the financial year.
127Comprehensive Income Statement
Items of income and operating expense,
that are not recognised in the income
statement and hence taken to reserves
in equity.
128Balance Sheet
A summary of the Meridian Group
assets and liabilities at the end of
the financial year.
129Statement of Changes in Equity
Components that make up the capital
and reserves of the Meridian Group
and the changes of each component
during the financial year.
130Statement of Cash Flows
Cash generated and used by the
Meridian Group.
131About this report
133Significant matters in the financial year
137
A. Financial performance
A1. Segment performance
A2. Income
A3. Expenses
A4. Taxation
143B. Assets used to generate and sell electricity
B1. Property, plant and equipmentB2. Intangible assets
148
C. Managing funding
C1. Capital management
C2. Share capital
C3. Earnings per share
C4. Dividends
C5. Cash and cash equivalents
C6. Trade receivables
C7. Borrowings
C8. Lease liabilities
C9. Commitments
156
D. Financial instruments used to manage risk
D1. Financial risk management
168E. Group structure
E1. Subsidiaries
169F. O t her
F1. Share-based payments
F2. Related parties
F3. Auditors remuneration
F4. Contingent assets and liabilities
F5. Subsequent events
F6. Changes in financial
reporting standards
173Signed report
Independent auditor’s report
Notes to the Group financial statementsGroup financial statements
Subsequent
event
Key judgements
and estimates
Risks
Key
126
Meridian Integrated Report 2020

Income Statement
For the year ended 30 June 2020
Note
2020
$M
2019
$M
Operating revenueA23,405 3,491
Operating expenses
A3(2,551)
(2,653)
Earnings before interest, tax, depreciation,
amortisation, changes in fair value of hedges
and other significant items (EBITDAF) 854 838
Depreciation and amortisationA3(312) (276)
Impairment of assetsA3(58) (5)
Gain on sale of assets
A3
– 3
Net change in fair value of energy hedgesD1(113) 58
Operating profit 371 618
Finance costsA3(85) (84)
Interest incomeA2 1 1
Net change in fair value of treasury instrumentsD1(48) (63)
Net profit before tax 239 472
Tax expenseA4(63) (133)
Net profit after tax attributed
to the shareholders of the parent company 176 339
Earnings per share (EPS) attributed to
ordinary equity holders of the parent Cents Cents
Basic and diluted earnings per shareC36 .9 13.2
The notes to the Group financial statements form an integral part of these financial statements.
Comprehensive Income Statement
For the year ended 30 June 2020
Note
2020
$M
2019
$M
Net profit after tax 176 339
Other comprehensive income
Items that will not be reclassified to profit or loss:
Asset revaluationB1(22) 1,139
Deferred tax on the above itemA47(320)
(15) 819
Items that may be reclassified to profit or loss:
Net (loss)/gain on cash flow hedges 2 (5)
Exchange differences arising from
translation of foreign operations 11 (21)
Income tax on the above itemsA4(1) 1
12 (25)
Other comprehensive income for the year, net of tax(3) 794
Total comprehensive income for the year, net of tax
attributed to shareholders of the parent company173 1,133
127
Meridian Integrated Report 2020
Financials

Balance Sheet
As at 30 June 2020
Note
2020
$M
2019
$M
Current assets
Cash and cash equivalents
C5 176
78
Trade receivablesC6 323 292
Customer contract assets 24 20
Financial instrumentsD1 100 118
Other assets
42 34
Total current assets 665 542
Non-current assets
Property, plant and equipmentB1 8,594 8,825
Intangible assetsB2 65 59
Deferred taxA4 34 40
Financial instrumentsD1 265 191
Total non-current assets8,958 9,115
Total assets 9,623 9,657
Note
2020
$M
2019
$M
Current liabilities
Payables and accruals
364 303
Employee entitlements 24 17
Customer contract liabilities 23 16
Current portion of term borrowingsC7 88 167
Current portion of lease liabilities
C8
7 1
Financial instrumentsD1 63 36
Current tax payable 79 80
Total current liabilities 648 620
Non-current liabilities
Term borrowingsC7 1,600 1,303
Deferred taxA4 1,850 1,968
Provisions
17 9
Lease liabilitiesC8 97 31
Financial instrumentsD1 279 209
Term payables 49 60
Total non-current liabilities 3,892 3,580
Total liabilities 4,540 4,200
Shareholders’ equity
Share capitalC2 1,598 1,599
Reserves 3,485 3,858
Total shareholders’ equity 5,083 5,457
Total liabilities and shareholder’s equity9,6239,657

The notes to the Group financial statements form an integral part of these financial statements.
For and on behalf of the Board of Directors who authorised the issue of the financial statements
on 25 August 2020
Mark Verbiest,
Chair, 25 August 2020
Julia Hoare,
Chair, Audit and Risk Committee, 25 August 2020
128
Meridian Integrated Report 2020
Financials

Statement of Changes in Equity
For the year ended 30 June 2020
$MNote
Share
capital
Share option
reserve
Revaluation
reserve
Foreign
currency
translation
reserve
Cash flow
hedge
reserve
Retained
earningsTotal equity
Balance at 1 July 2018 1,598 1 4,249 (16) 1 (1,010) 4,823
Net profit for the 2019 financial year––––– 339 339
Other comprehensive income
Asset revaluation B1–– 1,139 ––– 1,139
Net loss on cash flow hedges––––(5) –(5)
Exchange differences from translation of foreign operations–––(21) ––(21)
Income tax relating to other comprehensive incomeA4––(320) – 1 –(319)
Total other comprehensive income, net of tax–– 819 (21) (4) – 794
Total comprehensive income for the year, net of tax–– 819 (21) (4) 339 1,133
Share-based transactionsC2,F1 1 ––––– 1
Dividends paidC4–––––(500) (500)
Balance at 30 June 2019 and 1 July 2019 1,599 1 5,068 (37) (3) (1,171) 5,457
Net profit for the 2020 financial year–––––176176
Other comprehensive income
Asset revaluationB1––(22)–––(22)
Net loss on cash flow hedges–––– 2 – 2
Exchange differences from translation of foreign operations––– 11 –– 11
Income tax relating to other comprehensive incomeA4––7 - (1) –6
Total other comprehensive income, net of tax––(15) 11 1 – (3)
Total comprehensive income for the year, net of tax––(15) 11 1 176 173
Share-based transactionsC2,F1(1) –––––(1)
Dividends paidC4–––––(546) (546)
Balance at 30 June 2020 1,598 1 5,053 (26) (2) (1,541) 5,083
The notes to the Group financial statements form an integral part of these financial statements.
129
Meridian Integrated Report 2020
Financials

Statement of Cash Flows
For the year ended 30 June 2020
Note
2020
$M
2019
$M
Operating activities
Receipts from customers 3,375 3,463
Interest received 1 1
Payments to suppliers and employees(2,519) (2,628)
Interest paid
(79) (77)
Income tax paid(173) (124)
Operating cash flowsC5 605 635
Investing activities
Purchase of property, plant and equipment(43) (45)
Purchase of intangible assets(20) (24)
Purchase of subsidiaryE1(2) –
Investing cash flows(65) (69)
Financing activities
Term borrowings drawnC7 172 439
Term borrowings repaidC7(60) (484)
Lease liabilities repaidC7(7) (1)
Dividends paidC4(546) (500)
Shares purchased for long-term incentiveC2(2) –
Financing cash flows(443) (546)
Net increase/(decrease) in cash and cash equivalents 97 20
Cash and cash equivalents at beginning of year 78 60
Effect of exchange rate changes on net cash 1 (2)
Cash and cash equivalents at end of yearC5 176 78
The notes to the Group financial statements form an integral part of these financial statements.
130
Meridian Integrated Report 2020
Financials

Meridian Energy Limited is a for-
profit entity domiciled and registered
under the Companies Act 1993 in
New Zealand. It is an FMC reporting
entity for the purposes of the
Financial Markets Conduct Act 2013.
Meridian’s core business activities
are the generation, trading and
retailing of electricity and the sale
of complementary products and
services. The registered office of
Meridian is Level 2, 55 Lady Elizabeth
Lane, Wellington.
About this report
In this section
The notes to the financial
statements include information
which is considered relevant and
material to assist the reader in
understanding changes in Meridian’s
financial position or performance.
Information is considered relevant
and material if:
• the amount is significant
because of its size and nature;
• it is important for understanding
the results of Meridian;
• it helps to explain changes in
Meridian’s business; or
• it relates to an aspect of
Meridian’s operations that is
important to future performance.
Key judgements and estimates
In the process of applying the Group’s accounting
policies and application of accounting standards,
Meridian has made a number of judgements
and estimates. The estimates and underlying
assumptions are based on historical experience
and various other factors that are considered to
be appropriate under the circumstances. Actual
results may differ from these estimates.
Judgements and estimates which are considered
material to understanding the performance of
Meridian are found in the following notes:
Note
Significant Matters in the Financial Year – NZAS Exit
A2Income
B1Property, plant + equipment
D1Financial risk management
Meridian Energy Limited is dual
listed on the New Zealand Stock
Exchange (NZX) and the Australian
Securities Exchange (ASX). As a
mixed ownership company, majority
owned by Her Majesty the Queen
in Right of New Zealand, it is bound
by the requirements of the Public
Finance Act 1989.
These financial statements have
been prepared:
• in accordance with Generally
Accepted Accounting Practice
(GAAP) in New Zealand and
comply with International Financial
Reporting Standards (IFRS) and the
New Zealand equivalents (NZ IFRS),
as appropriate for a for-profit entity;
• in accordance with the
requirements of the Financial
Markets Conduct Act 2013;
• on the basis of historical cost,
modified by revaluation of certain
assets and liabilities;
• in New Zealand dollars (NZD),
with all values rounded to millions
($M) unless otherwise stated; and
• using accounting policies as
provided throughout the notes
to the financial statements.
131
Meridian Integrated Report 2020
Notes to the Financials — for the year ended 30 June 2020

Basis of consolidation
The Group financial statements
comprise the financial statements
of Meridian Energy Limited and its
subsidiaries and controlled entities,
as contained in note E1 Subsidiaries.
The financial statements of members
of the Group are prepared for
the same reporting period as the
parent company, using consistent
accounting policies.
In preparing the Group financial
statements, all material intra-group
transactions, balances, income and
expenses have been eliminated.
Subsidiaries are consolidated from
the date on which control is obtained
to the date on which control is lost.
Foreign currency
Transactions denominated in
foreign currencies are converted at
the exchange rates at the date of
the transactions. Foreign currency
monetary assets and liabilities are
translated at the rate prevailing at
balance date, 30 June 2020.
The assets and liabilities of
international subsidiaries are
translated to NZD at the closing rate
at balance date. The revenue and
expenses of these subsidiaries are
translated at rates approximating
the exchange rates at the dates
of the transactions.
When the financial statements of
subsidiaries are translated into NZD,
exchange differences can arise.
These are recorded in the foreign
currency translation reserve (within
equity). If an international subsidiary
is disposed of, these cumulative
translation differences are recognised
in the income statement in the
period in which that occurs.
The principal functional currency
of international subsidiaries is
Australian dollars; the closing rate
at 30 June 2020 was 0.9349
(30 June 2019: 0.9571).
A full list of international subsidiaries
and their functional currencies are
provided in Note E1 Subsidiaries.
132
Meridian Integrated Report 2020
Notes to the Financials — for the year ended 30 June 2020
132

NZAS Exit
On 9 July 2020, the New Zealand
Aluminium Smelter (NZAS)
announced it plans to wind-down
its operation at Tīwai Point. On the
same day, NZAS terminated its
572MW electricity supply agreement
with Meridian, giving a 14-month
notice period through to 31 August
2021. This followed NZAS concluding
a strategic review of their operation,
which was announced to the market
on 23 October 2019.
For Meridian’s financial reporting
purposes and in keeping with NZ
Significant matters
in the financial year
In this section
Significant matters which have
impacted Meridian’s financial
performance and an explanation
of non-GAAP measures used within
the notes to the financial statements.
IFRS, the NZAS exit announcement
is treated as a post balance date
non-adjusting event. This is because
the decision by NZAS to exit Tīwai is
not a condition which existed as at
30 June 2020. As at 30 June 2020,
Meridian had no prior knowledge
or communication of the NZAS
exit decision.
As such, no adjustment has been
made to the Group financial
statements, or accompanying
notes to the accounts, to reflect
any impact that the NZAS exit
may have on Meridian.
Based on currently available
information and management
judgment, we estimate that the
NZAS exit would potentially
impact Meridian’s primary financial
statements within the below ranges.
Note that a significant amount of
uncertainty surrounds the impact
that the NZAS exit will have on
Meridian and the electricity sector
going forward. Therefore, it is possible
that actual outcomes will differ to the
range estimates noted below.
Range of Impact –
increase (decrease) $M
Balance Sheet
Property, plant & equipment (generation structures)(690)–(1,340)
Financial instruments (energy hedge liabilities)(60)–(90)
Deferred tax liability(175)–(350)
Equity (retained earnings) 45–65
Equity (asset revaluation reserve) (500)–(965)
Income Statement
Net change in fair value of energy and other hedges60–90
Tax expense15–25
Statement of Changes in Equity
Retained earnings (current year profit)45–65
Asset revaluation reserve(500)–(965)
133
Meridian Integrated Report 2020
Notes to the Financials — for the year ended 30 June 2020

The items and impact
estimates are described below
Property, Plant & Equipment –
Generation Structures
The NZAS exit will significantly
impact the electricity market in
New Zealand, decreasing demand
in the South Island and due to
transmission constraints may lead
to a reduction in generation
volumes and wholesale prices.
For the purposes of this assessment
we have assumed retail margins
remain unchanged in the long term.
Our assessment of the NZAS exit
in August 2021 on the value of the
generation structures indicates a
reduction in fair values of between
$690 million to $1,340 million. This
reduction would be recognised
against the revaluation reserve
in equity.
For more information on the 30 June
2020 values refer to Note B1 Property,
Plant and Equipment.
Financial Instruments –
Energy Hedge Liabilities
Meridian has energy hedges that
relate to the NZAS supply contract,
a number of which contain
termination conditions.
Where we believe termination of a
hedge is probable (or has occurred
post balance date), we have included
such hedges in our impact estimate.
Where uncertainty remains around
the future of a hedge (whether
directly impacted by the NZAS
exit decision or not), these are not
included in our impact estimates, and
we continue to hold these at their fair
value as assessed at 30 June 2020.
Following the NZAS announcement,
ASX electricity futures prices in New
Zealand decreased significantly. The
fall in ASX prices impacts on the fair
values of certain electricity hedges.
To take this change in market prices
into account, we have recalculated the
fair values of the impacted derivatives
using ASX prices from 31 July 2020.
ASX prices have been taken at this
date to allow time for the market to
adjust to the announcement.
As a result of the above, we estimate
a decrease to the value of financial
instrument liabilities in the range of
$60 million – $90 million. The other
side of this impacts on the Income
Statement, within net changes in the
fair value of energy and other hedges.
For more information on financial
instruments refer to Section D
Finanical Instruments used to
manage risks.
Deferred Tax Liability
The estimates in relation to generation
structures and energy hedge liabilities
have a flow-on impact on our deferred
tax liability balance.
We estimate that our deferred tax
liability would reduce by $175 million
to $350 million.
Equity
Any changes impacting the income
statement flow through to impact
retained earnings (less any tax impact,
if applicable). We estimate the net
impact to retained earnings to
be an increase in the range of
$45 million–$65 million.
Changes relating to generation
structures and associated deferred
tax liability balances impact on the
asset revaluation reserve. We estimate
the net impact to the asset revaluation
reserve to be a decrease in the range
of $500 million – $965 million. This is
the direct impact of the above asset
devaluation range, reduced by the
tax effect impact at 28%.
Significant matters continued
134
Meridian Integrated Report 2020
Notes to the Financials — for the year ended 30 June 2020
134

Other Impacts
We note that following the NZAS
exit decision on 9 July 2020, Meridian
announced the following to the market
on 10 July 2020:
• no change to current ordinary
dividend policy (being 75–90%
of free cash flow);
• an immediate end to the special
dividends that have been paid
under the capital management
program, the last/final special
dividend being that which
occurred in April 2020;
• the swaption renewal process
was abandoned, with the current
swaption with Genesis Energy
22

likely to be terminated (however the
swaption has not been terminated
in the calculation of our impact
estimate); and
• there would be a number of actions
taken in early FY21 to ensure good
energy storage flexibility, rebalance
our wholesale positions and to
accelerate retail volume growth.
22. Meridian has a swaption contract with Genesis
Energy which, if not terminated earlier, will end
on 31 December 2022. The agreement allows,
but does not require, Meridian to enter into 50MW
of daily and/or weekly fixed price derivative cover
year round, with an additional weekly 50MW block
available from 1 April to 31 October in each year of
the contract.
Staged exit negotiations
Meridian is currently in negotiation
with NZAS to determine if the terms
for a staged exit, longer than 14
months, can be agreed. As these
discussions are ongoing, Meridian
cannot estimate the impact that any
agreement may have on the Group.
Hydro inflows
New Zealand hydro storage started
the financial year in a strong position,
with most lake levels well above
average nationally.
Meridian inflows over the year were
above average, with the year overall
being wet. Most of this excess arrived
in November – December and as a
result, significant hydro spill was seen
throughout large parts of summer.
A three month HVDC outage in the
first quarter of 2020 dominated
much mid-to-late summer activity.
Autumn was impacted by COVID-19,
with national demand for power in
April 15% lower than normal with the
lockdown closing most businesses
across New Zealand. Demand in
May and June largely returned to
more typical levels although there
is some weakness apparent.
Market prices have been high
throughout most of the year,
except during the wet summer
quarter when South Island prices
dropped significantly. Meridian’s
generation across the financial year
has been robust, which combined
with high market prices, has resulted
in strong energy margins.
Adoption of NZ IFRS 16: Leases
On 1 July 2019 Meridian adopted
NZ IFRS 16 Leases (“NZ IFRS 16”).
NZ IFRS 16 was adopted using the
modified retrospective approach
and therefore no adjustment or
restatement of comparative figures
has been made.
The adoption of NZ IFRS 16 results
in those leases previously classified
as operating leases being recorded
on the balance sheet. All other
arrangements will be considered
under NZ IFRS 16 when the contract
is amended or renewed.
As a result of applying NZ IFRS 16,
the Group recognised $75 million of
new right-of-use (ROU) lease assets,
which form part of the Property Plant
& Equipment category on the balance
sheet. ROU assets are depreciated
over the expected lease term. The
expected lease term may include the
taking-up of optional lease extensions,
if the Group is reasonably certain of
exercising such options.
Significant matters continued
New liabilities of $75 million were also
recognised. These are classified as
Lease Liabilities on the balance sheet
and split into current and non-current
portions. Expected lease payments
are discounted back to present value
using incremental borrowing costs.
Discount rates are set on a lease-by-
lease basis, with key inputs being the
expected term of the lease and the
currency of the lease (the country in
which it is domiciled).
In the income statement, application
of NZ IFRS 16 in FY20 has decreased
Group operating expenses by
$6 million, increased finance costs by
$2 million and increased depreciation
expense by $4 million (relative to
FY19). These changes meant a net
increase of $6 million in EBITDAF
and a net nil impact on net profit
before tax.
Short term leases and leases related
to low-value items are accounted for
as expenses in the Income Statement,
as allowed under NZ IFRS 16. These
amounts are immaterial.
Further information in relation to
the adoption of NZ IFRS 16: Leases
are included in the following sections
in the notes to the accounts
Section A: Financial performance
Section B: Assets used to generate
and sell electricity
Section C: Managing funding
135
Meridian Integrated Report 2020
Notes to the Financials — for the year ended 30 June 2020

Subsequent to balance date and
up to the date of the approval of
the financial statements, Meridian
has reviewed the recent restrictions
implemented by the Government in
Australia and New Zealand that has
impact to the Group’s operations.
Meridian has considered the impact
of this change and it is not expected
to have a material impact to the
financial statements.
Generation structures
and plant revaluation
At 30 June 2020 a valuation of
Meridian’s generation structures
and plant assets has been undertaken,
to determine the fair value of the
assets as at this date. Meridian uses
an independent valuer to determine
a valuation range on which the
Board’s ultimate valuation decision
is based. The valuation range is set
using an income approach based
primarily on capitalisation of earnings
with additional consideration of
discounted cashflows (DCFs).
The valuation has resulted in a
net decrease of $78 million from
30 June 2019.
For more information refer to Note B1
Property, plant and equipment.
Non-GAAP measures
Meridian refers to non-GAAP financial
measures within these financial
statements and accompanying
notes. The limited use of non-GAAP
measures is intended to supplement
GAAP measures to provide readers
with further information to broaden
their understanding of Meridian’s
financial performance and position.
They are not a substitute for GAAP
measures. As these measures are not
defined by NZ GAAP, IFRS, or any
other body of accounting standards,
Meridian’s calculations may differ from
similarly titled measures presented
by other companies. The measures
are described below, including note
references for reconciliations to the
financial statements.
EBITDAF
Earnings before interest, tax,
depreciation, amortisation, change
in fair value of hedges, impairments
and gains or losses on sale of assets.
EBITDAF is reported in the income
statement, allowing the evaluation
of Meridian’s operating performance
without the non-cash impacts of
depreciation, amortisation, fair value
movements of hedging instruments
and other one-off or infrequently
occurring events and the effects
of Meridian’s capital structure and
tax position. This allows a better
comparison of operating performance
with that of other electricity industry
companies than GAAP measures that
include these items.
Energy margin
Energy margin provides a measure of
financial performance that, unlike total
revenue, accounts for the variability of
the wholesale energy markets and the
broadly offsetting impact of wholesale
prices on the cost of Meridian’s energy
purchases and revenue from generation.
Meridian uses the measure of energy
margin within Meridian’s segmental
financial performance in Note A1
Segment performance.
Net debt
Net debt is a metric commonly used
by investors as a measure of Meridian’s
indebtedness that takes account of
liquid financial assets. Meridian uses
this measure within its capital
management and this is outlined
in Note C1 Capital management.
Significant matters continued
COVID-19
As an essential service provider,
Meridian continued operations
during the 2020 COVID-19 response
in both New Zealand and Australia.
Group revenues have not been
adversely impacted by the resultant
shut-downs and other social and
economic disruption. Certain group
costs have fallen as a result of the
government restrictions, although
these are immaterial to the overall
results of the group e.g. travel costs.
However, Meridian has increased
its provision for doubtful debts this
financial year, in light of the continuing
uncertainty around the economy and
employment. In the short to medium
term Meridian expects a higher level
of debt write-offs, as the impacts of
business closures and job loss impact
on our customers. Meridian expects
that this will taper off as economies
return to a more normal level. Refer to
Note C6 Trade receivables for further
details on this.
Meridian also considered the
impact of COVID-19 as part of our
key assumptions when valuing our
property, plant and equipment and
financial instruments. However
there was no impact when taking
this into consideration. Refer
to Note B1 Property, plant and
equipment and D1 Financial risk
management for further detail.
136
Meridian Integrated Report 2020
Notes to the Financials — for the year ended 30 June 2020
136

A1 Segment performance
The Chief Executive (the chief
operating decision-maker) monitors
the operating performance of each
segment for the purpose of making
decisions on resource allocation
and strategic direction.
The Chief Executive considers the
business according to the nature
of the products and services and
the location of operations, as set
out below:
New Zealand wholesale
• Generation of electricity and
its sale into the New Zealand
wholesale electricity market.
• Purchase of electricity from the
wholesale electricity market and
its sale to the NZ Retail segment
and to large industrial customers,
including New Zealand Aluminium
Smelter (NZAS) representing the
equivalent of 38% (30 June 2019:
39%) of Meridian’s New Zealand
generation production.
• Development of renewable
electricity generation opportunities
in New Zealand.
New Zealand retail
• Retailing of electricity and
complementary products
through two brands (Meridian
and Powershop) in New Zealand.
Electricity sold to residential,
business and industrial customers
on fixed price variable volume
contracts is purchased from
the Wholesale segment at an
average annual fixed price of
$81 per megawatt hour (MWh)
and electricity sold to business
and industrial customers on spot
(variable price) agreements is
purchased from the Wholesale
segment at prevailing wholesale
spot market prices.
Agency margin from spot sales
is included within “Contracted
sales, net of distribution costs”.
The transfer price is set in a
similar manner to transactions
with third parties.
• Powershop New Zealand provide
front line customer and back
office services for Powershop
Australia. Revenue of $3 million
has been recorded in ‘other
revenue’ and is eliminated
on Group consolidation.
Australia
• Generation of electricity from
Meridian’s two wind farms and
three hydro power stations,
and acquired under power
purchase agreements, for sale
into the Australian wholesale
electricity market.
• Retailing of electricity and gas,
mainly through the Powershop
brand in Australia.
• Development of renewable
electricity generation options
in Australia.
Other and unallocated
• Other operations, that are not
considered reportable segments,
include licensing of the Flux
developed electricity and gas
retailing platform.
• Activities and centrally based costs
that are not directly allocated to
other segments.
The financial performance of the
operating segments is assessed
using energy margin and EBITDAF
(a definition of these measures is
included within significant matters in
the financial year) before unallocated
central corporate expenses. Balance
sheet items are not reported to the
Chief Executive at an operating
segment level.
Financial
performance
In this section
This section explains the financial
performance of Meridian, providing
additional information about
individual items in the income
statement, including:
a. accounting policies, judgements
and estimates that are relevant for
understanding items recognised
in the income statement; and
b. analysis of Meridian’s
performance for the year by
reference to key areas including:
performance by operating
segment, revenue, expenses
and taxation.
A
137
Meridian Integrated Report 2020
Notes to the Financials — for the year ended 30 June 2020

A1 Segment performance continued
NZ Wholesale NZ Retail AustraliaOther and Unallocated Inter-segment Total
2020
$M
2019
$M
2020
$M
2019
$M
2020
$M
2019
$M
2020
$M
2019
$M
2020
$M
2019
$M
2020
$M
2019
$M
Contracted sales, net of distribution costs 531 524 796 654 182 152 – – – – 1,509 1,330
Cost to supply customers (1,558) (1,985) (625) (502) (139) (150) – – 697 613 (1,625) (2,024)
Net cost of hedging 11 126 – – (9) 4 – – – – 2 130
Generation spot revenue 1,266 1,672 – – 89 113 – – – – 1,355 1,785
Inter-segment electricity sales 697 613 – – – – – – (697) (613) – –
Virtual asset swap margins 9 11 – – – – – – – – 9 11
Other market revenue/(costs) (6) (7) 1 2 (1) (1) – – – – (6) (6)
Energy margin 950 954 172 154 122 118 – – – – 1,244 1,226
Other revenue3 2 13 12 3 2 32 29 (24) (20) 27 25
Dividend revenue – – – – – – 27 41 (27) (41) – –
Energy transmission expense (116) (125) – – (7) (6) – – – – (123) (131)
Gross margin 837 831 185 166 118 114 59 70 (51) (61) 1,148 1,120
Employee expenses (32) (28) (32) (31) (13) (13) (38) (30) – – (115) (102)
Electricity metering expenses – – (36) (33) – – – – – – (36) (33)
Other operating expenses (61) (63) (34) (35) (39) (37) (22) (22) 13 10 (143) (147)
EBITDAF 744 740 83 67 66 64 (1) 18 (38) (51) 854 838
Depreciation and amortisation–––––––––– (312) (276)
Impairment of assets–––––––––– (58) (5)
Gain/(Loss) on sale of assets–––––––––– – 3
Net change in fair value of electricity and other hedges–––––––––– (113) 58
Operating profit–––––––––– 371 618
Finance costs–––––––––– (85) (84)
Interest income–––––––––– 1 1
Net change in fair value of treasury instruments–––––––––– (48) (63)
Net profit before tax––––––––––239 472
Tax expense–––––––––– (63) (133)
Net profit after tax––––––––––176 339
Reconciliation of energy margin
Electricity sales revenue, net of hedging 2,27 1 2,492 1,453 1,297 351 290 – – (697) (613) 3,378 3,466
Electricity expenses, net of hedging (1,320) (1,538) (714) (630) (142) (107) – – 697 613 (1,479) (1,662)
Electricity distribution expenses (1) – (567) (513) (87) (65) – – – – (655) (578)
Energy margin 950 954 172 154 122 118 – – – – 1,244 1,226

A
138
Meridian Integrated Report 2020
Notes to the Financials — for the year ended 30 June 2020
138

A2 Income
Operating revenue
2020
$M
2019
$M
Energy sales to customers 1,994 1,773
Generation revenue, net of hedging 1,384 1,693
Energy related services revenue 10 8
Other revenue 17 17
3,405 3,491
Total revenue by geographic area
2020
$M
2019
$M
New Zealand 3,039 3,187
Australia 353 292
United Kingdom 13 12
3,405 3,491
2020
$M
2019
$M
Interest income11
Operating revenue
Energy sales to customers
Revenue received or receivable from
residential, business and industrial
customers. This revenue is influenced
by customer contract sales prices
and their demand for energy.
Generation revenue, net of hedging
Revenue received from:
• electricity generated and sold
into the wholesale markets; and
• net settlement of energy hedges
sold on futures markets, and
to generators, retailers and
industrial customers.
This revenue is influenced by
the quantity of generation and
the wholesale spot price and is
recognised at the time of generation
or hedge settlement.
Key judgements and estimates – Revenue
Electricity consumption
Meridian exercises judgement in
estimating retail electricity sales,
where customer electricity meters
are unread at balance date. These
estimates of customer electricity
usage in the unread period are
based on the customers’ historical
consumption patterns.
Revenue is recognised at the time of
supply and customer consumption.
Elements of the sale price such
as discounts and credits given to
customers and any incremental
costs incurred obtaining or retaining
a customer contract are deferred
to customer contract assets on
the balance sheet on a portfolio
basis and released to the income
statement over the contract tenure.
Supply contract with NZAS
The agreement with NZAS has
been recognised in these financial
statements in a manner consistent
with fixed price supply agreements
with other industrial customers.
Revenue is recognised as electricity
sales revenue in the income
statement and the estimated future
cash flows are included in the fair
value of generation structures and
plant assets on the balance sheet.
Discounts and payment terms
Where a discount is offered
revenue is initally recognised net
of estimated discount based on
accumulated experience used to
estimate the amount of discounts
taken by customers.
There are no significant differences
between the payment terms and
this policy.
A
139
Meridian Integrated Report 2020
Notes to the Financials — for the year ended 30 June 2020

A3 Expenses
Operating expenses
2020
$M
2019
$M
Energy expenses, net of hedging 1,479 1,662
Energy distribution expenses 655 578
Energy transmission expenses 123 131
Employee expenses 115 102
Energy metering expense 36 33
Other expenses 143 147
2,551 2,653
Depreciation and amortisationNote
2020
$M
2019
$M
DepreciationB1 288 250
Amortisation of intangiblesB2 24 26
312 276
Finance costsNote
2020
$M
2019
$M
Interest on borrowings 77 78
Interest on electricity option premium 2 2
Interest on finance lease payableC8 6 4
85 84
Impairment and gain on sale of assetsNote
2020
$M
2019
$M
Impairment of property, plant and equipmentB1585
(Gain) on sale on disposal of assets–(3)
A
Operating expenses
Energy expenses, net of hedging
The cost of:
• energy purchased from wholesale
markets to supply customers;
• net settlement of buy-side energy
hedges; and
• related charges and services.
Energy expenses are influenced
by quantity and timing of customer
consumption and wholesale
spot prices.
Energy distribution expenses
The cost of distribution companies
transporting energy between the
national grid and customers’ properties.
Energy transmission expenses
Meridian’s share of the cost of the
high voltage direct current (HVDC)
link between the North and South
Islands of New Zealand and the
cost of connecting Meridian’s
generation sites to the national
grid by grid providers.
Employee expenses
Provisions are made for benefits
owing to employees in respect of
wages and salaries, annual leave,
long service leave and employee
incentives for services rendered.
Provisions are recognised when it is
probable they will be settled and can
be measured reliably. They are carried
at the remuneration rate expected to
apply at the time of settlement.
Contributions to defined contribution
plans (largely KiwiSaver) were
$5 million in 2020 (30 June 2019:
$5 million).
Energy metering expenses
The cost of electricity meters, meter
reading and data gathering of retail
customer electricity consumption in
New Zealand. Metering expenses in
Australia are bundled with electricity
distribution costs.
Impairment of non-financial assets
Meridian reviews the recoverable
amount of its tangible and intangible
assets at each balance date. They are
grouped into cash-generating units
with separately identifiable cash flows.
The recoverable amount is the higher
of an asset’s fair value less costs to
sell, and present value of future cash
flows expected to be generated by
the assets (also known as value in
use). If the carrying value of an asset
exceeds the recoverable amount, an
impairment expense is recognised in
the income statement. For assets that
are revalued refer to Note B1 Property,
plant and equipment for specific
treatment.
$57 million of the impairment in
2020 (2019: $5 million) is a result
of the revaluation of our Australian
generation structures and plant.
Refer to Note B1 Property, plant and
equipment for further detail.
140
Meridian Integrated Report 2020
Notes to the Financials — for the year ended 30 June 2020
140

A4 Taxation
Tax expense
2020
$M
2019
$M
Current income tax expense 169 161
Adjustments to tax of prior years(1) –
Total current tax expense 168 161
Deferred tax(106) (28)
Other1–
Total tax 63 133
Reconciliation to profit before tax
Profit before tax239 472
Income tax at applicable rates65 133
Income tax (over)/under provided in prior year(1) –
Other(1)–
Tax expense 63 133
Current tax expense
Tax expense components are current
income tax and deferred tax.
Current income tax expense is the
income tax assessed on taxable profit
for the year. Taxable profit differs
from profit before tax reported in
the income statement as it excludes
items of income and expense that are
taxable or deductible in other years,
and also excludes items that will never
be taxable or deductible. Meridian’s
liability for current tax is calculated
using tax rates enacted at balance
date, being 28% for New Zealand
and 30% for Australia.
A
141
Meridian Integrated Report 2020
Notes to the Financials — for the year ended 30 June 2020

A4 Taxation continued
Deferred tax assets and liabilities
2020
$M
2019
$M
Balance at beginning of year1,928 1,637
Temporary differences in income statement:
Depreciation/amortisation(69) (38)
Term payables 5 9
Financial instruments(45) (1)
Australia tax losses utilised 7 6
Customer contract assets 1 –
Deferred income–(2)
Other – payables & receivables(5) (2)
(106) (28)
Temporary differences in other comprehensive income:
Revaluation reserve movements(7) 320
Other1(1)
Balance at end of year 1,816 1,928
Made up of:
Property, Plant and Equipment 1,935 2,009
Term payables(22) (27)
Financial instruments(64) (19)
Customer contract assets 7 6
Other – payables & receivables(6) (1)
Deferred tax liability 1,850 1,968
Carried forward unused tax losses(32) (38)
Deferred income(2) (2)
Other––
Deferred tax asset(34) (40)
Total deferred tax 1,816 1,928
Deferred tax assets and liabilities
Deferred tax is income tax which is
expected to be payable or recoverable
in the future as a result of the
unwinding of temporary differences.
These arise from differences in the
recognition of assets and liabilities
for financial reporting and from the
filing of income tax returns. Deferred
tax is recognised on all temporary
differences, other than those arising:
• from goodwill; and
• from the initial recognition of assets
and liabilities in a transaction (other
than in a business combination) that
affects neither the accounting nor
taxable profit or loss.
The majority of Meridian’s deferred
tax balance is made up of temporary
differences on the revaluation of
property, plant and equipment. This
balance will only reverse if the fair
value of these assets declines back
to their original historical cost.
Deferred tax is calculated at the tax
rates that are expected to apply to the
year when the liability is settled or the
asset realised, based on tax rates and
tax laws that have been enacted or
substantively enacted at balance date.
Unused tax losses
The deferred tax asset relates to
unused tax losses from our Australian
operations and will be utilised against
future taxable income from retail and
generation activities in that country.
Deferred tax asset is recognised to
the extent it is probable that future
taxable profit will be available to use
the asset. This is reviewed at each
balance date and reduced to the
extent that it is no longer probable
that sufficient taxable profits will be
available in the future to utilise the
defered tax asset.
Offsetting deferred tax balances
Deferred tax assets and liabilities
are offset only if there are legally
enforceable rights to set off current
tax assets against current tax liabilities
and when they relate to the same
taxable entity and taxation authority.
A
142
Meridian Integrated Report 2020
Notes to the Financials — for the year ended 30 June 2020
142

B1 Property, plant and equipment
Generation structures and plant revaluations:
Generation
structures and
plant at fair value
Land and
buildings
at cost
Other plant
and equipment
at cost
Right of Use
Lease Assets
Work in
progress
at cost Total
Cost or fair value 8,013 20 171 – 71 8,275
Less accumulated depreciation(237) (5) (91) – (1) (334)
Net book value at 30 June 2018 7,7 76 15 80 – 70 7,941
Additions – – – – 39 39
Transfers – work in progress 8 – 6 – (14) –
Derecognition of Mt Mercer finance lease assets – – (11) – – (11)
Disposals – – – – – –
Foreign currency exchange rate movements
23
(26) – (2) – – (28)
Generation structures and plant revaluations:
Increase taken to revaluation reserve 1,139 – – – – 1,139
Decrease taken to income statement(5) – – – – (5)
Depreciation expense(238) – (10) – (2) (250)
Net book value at 30 June 2019 8,654 15 63 – 93 8,825
Cost or fair value 8,655 20 160 – 96 8,931
Less accumulated depreciation
24
(1) (5) (97) – (3) (106)
Net book value at 30 June 2019 8,654 15 63 – 93 8,825
Additions – – – – 38 38
Transfers – work in progress 24 – 5 – (29) –
Lease assets transferred on implementation
of NZ IFRS 16 – – (27) 27 – –
Lease assets recognised on implementation
of NZ IFRS 16 – – – 75 – 75
Adjustment of Right of Use lease assets – – – 1 – 1
Decommisioning Asset - Make good provision 6 – – – – 6
Foreign currency exchange rate movements
23
14 – 1 – – 15
Generation structures and plant revaluation:
Decrease taken to revaluation reserve(21) – – – – (21)
Decrease taken to income statement(57) – – – – (57)
Depreciation expense(275) – (7) (7) 1 (288)
Net book value at 30 June 2020 8,345 15 35 96 103 8,594
Cost or fair value 8,593 20 130 111 105 8,959
Less accumulated depreciation
24
(248) (5) (95) (15) (2) (365)
Net book value at 30 June 2020 8,345 15 35 96 103 8,594
In this section
This section shows the assets
Meridian uses in the production
and sale of electricity to generate
operating revenue. In this section of
the notes there is information about:
a. property, plant and equipment;
and
b. intangible assets.
Assets used to
generate and
sell electricity
B
23. Through the foreign currency translation reserve in other comprehensive income.
24. Includes the reversal of accumulated depreciation on generation structures and plant at revaluation date.
143
Meridian Integrated Report 2020
Notes to the Financials — for the year ended 30 June 2020

A number of Meridian’s lease
arrangements contain options to
extend. Where we are reasonably
certain of taking up those options,
they are included in the lease value.
If there is any uncertainty around
whether an extension will be taken,
it is excluded from the asset value.
Right of Use Assets are depreciated
over the term of their underlying
lease arrangement.
Recognition and measurement
Generation structures and plant
assets (including land and buildings)
are held on the balance sheet at their
fair value at the date of revaluation,
less any subsequent depreciation and
impairment losses. All other property,
plant and equipment are stated
at historical cost less accumulated
depreciation and any accumulated
impairment losses.
Fair value and revaluation of
generation structures and plant
Revaluations are performed with
sufficient regularity to ensure that
the carrying amount does not differ
materially from that which would
be determined using fair values
at balance date.
Meridian uses an independent
valuer, who uses an income valuation
approach based primarily on the
capitalisation of earnings with
additional consideration of the
discounted cash flows (DCFs) to
establish a valuation range on
which the Board’s ultimate
valuation decision is based.
Any increase arising on revaluation
is credited to the revaluation reserve,
except to the extent that it reverses
a revaluation decrease for the
same asset previously recognised
in the income statement. In that
case the increase is credited to the
income statement to the extent of
the decrease previously charged.
A decrease in carrying amount arising
on revaluation is charged to the
income statement to the extent that
it exceeds the balance, if any, held in
the revaluation reserve relating to a
previous revaluation of that asset.
Accumulated depreciation at
revaluation date is eliminated against
the gross carrying amount so that
the carrying amount after revaluation
represents the revalued amount.
Subsequent additions to generation
structures and plant assets are
recorded at cost, which is considered
fair value, including costs directly
attributable to bringing the asset to
the location and condition necessary
for its intended purpose, and
financing costs where appropriate.
At 30 June 2020, had the generation
structures and plant been carried
at historical cost less accumulated
depreciation and accumulated
impairment losses, their carrying
amount would have been
approximately $2.3 billion
(30 June 2019: $2.5 billion).
With the implementation of NZ IFRS
16, a new asset category has been
created called “Right of Use Lease
Assets”. This captures the value to
the Group of the assets we contract to
use via lease arrangements. The new
assets recognised in this financial year
relate to office leases in New Zealand
and Australia, and to land access
arrangements in Australia.
As we used the modified retrospective
method to transition to NZ IFRS 16,
we have not restated prior period
numbers. The $27 million of assets
transferred in the current financial
year relates to finance lease assets
previously recognised under NZ
IAS 17. These balances relate to grid
connection assets at Mill Creek and
Mt Mercer, and were previously
included in the “Other Plant &
Equipment” category. New assets
of $75 million recognised during
the current financial year relate to
arrangements which were previously
classified as operating leases under
NZ IAS 17.
Revaluation of generation
structures and plant
Meridian engaged an independent
valuer to assess its generation
structures and plant assets at
30 June 2020. At this date an
independent valuer assessed
values using capitalisation of
earnings and DCFs when
determining a valuation range.
At 30 June 2020, the revaluation
resulted in a net decrease of
$78 million (2019: net increase of
$657 million) in the carrying value of
our generation structures and plant
assets. The impact of the revaluation
was recognised as a decrease of
$21 million (2019: increase of $1,139
million) in the revaluation reserve
and $57 million impairment (2019:
impairment of $5 million) of Australian
generation assets recognised in the
income statement.
As a consequence of this revaluation,
accumulated depreciation on these
assets is reset to nil. There was no
depreciation impact of this revaluation
in the income statement.
B
B1 Property, plant and equipment continued
144
Meridian Integrated Report 2020
Notes to the Financials — for the year ended 30 June 2020
144

Key judgements and estimates –
Generation structures and plant
valuation techniques and key inputs
The Meridian Board uses its
judgement to decide on the
appropriateness of key valuation
techniques and inputs for fair value
measurement. Judgement is also
used in determining the estimated
remaining useful lives of assets. As the
valuation of generation structures and
plant does not fully use observable
market data, it continues to be
classified as level 3 under Meridian’s
fair value hierarchy defined in Note
D1 Financial risk management.

Key input to
measure fair valueDescription
Range of
unobservable inputsSensitivity
Impact on
valuation
Future NZ wholesale
electricity prices
The price received for NZ generation$74MWh to $105MWh
by 2035 (in real terms)
+ $3MWh
- $3MWh
$501M
($501M)
New Zealand generation volumeAnnual generation production 13,400GWh p.a. to
15,590GWh p.a.
+ 250GWh
- 250GWh
$286M
($286M)
Australian generation volumeAnnual generation production 890GWh p.a. to
820GWh p.a.
+5%
-5%
A$35M
(A$35M)
Operating expenditure
(excluding electricity related
expenditure - refer note A3)
Meridian’s cost of operations$300M p.a.+ $10M
- $10M
($162M)
$162M
EBITDAF earnings multipleValuation multiple (including control
premium of 20%) derived from earnings
and valuations of comparable companies
12.2 x EBITDAF +0.5x
-0.5x
$416M
($416M)
Sensitivities show the movement in fair value as a result of a change in each input (keeping all other inputs constant).
As discussed above, the independent
valuer uses an income approach
which involves incorporating two
techniques in establishing a valuation
range being capitalisation of earnings
and DCF. The fair value adopted
aligns closely with the capitalisation
of earnings value. This methodology
calculates value by reference to an
assessment of future maintainable
earnings and capitalisation multiples
as observed from market prices
of listed companies with broadly
comparable operations to Meridian.
In preparing the capitalisation of
earnings valuation, an EBITDAF
multiple range at which to
capitalise Meridian’s historical and
forecast earnings is determined.
In determining the maintainable
earnings, observable wholesale
electricity prices extracted from
the ASX have been used.
The impact of COVID-19 has been
considered as part of the key
assumptions when preparing this
year’s valuation. There was no
impact on the valuation when
taking this into consideration.
It is assumed in this valuation
that the contract with NZAS runs
to full term, under existing
contractual arrangements.
The table below describes the
key valuation inputs and their
sensitivity to changes.
B
145
Meridian Integrated Report 2020
Notes to the Financials — for the year ended 30 June 2020

B
Depreciation
Depreciation of property, plant and
equipment assets, other than freehold
land, is calculated on a straight-line
basis. This allocates the cost or fair
value amount of an asset, less any
residual value, over its estimated
remaining useful life.
B1 Property, plant and equipment continued
Useful lives
Meridian uses its judgement in
determining the remaining useful
lives and residual value of assets,
which are:
• generation structures
and plant – up to 80 years;
• buildings – up to 67 years;
• other plant and equipment –
up to 20 years; and
• right of use lease assets –
up to 27 years.
The residual value and useful lives
are reviewed, and if appropriate
adjusted, at each balance date.
Disposals or retirement
The gain or loss arising on the disposal
or retirement of an item of property,
plant and equipment is determined
as the difference between the sale
proceeds and the carrying amount
of the asset and is recognised in
the income statement. Any balance
attributable to the disposed asset
in the asset revaluation reserve is
transferred to retained earnings.
146
Meridian Integrated Report 2020
Notes to the Financials — for the year ended 30 June 2020
146

v
B2 Intangible assets
$MGoodwillSoftwareTotal
Cost or fair value– 150 150
Less accumulated amortisation–(90) (90)
Net book value at 30 June 2018 – 60 60
Additions– 25 25
Amortisation expenses–(26) (26)
Net book value at 30 June 2019 – 59 59
Cost or fair value– 173 173
Less accumulated amortisation–(114) (114)
Net book value at 30 June 2019 – 59 59
Additions 5 25 30
Amortisation expenses–(24) (24)
Net book value at 30 June 2020 5 60 65
Cost or fair value 5 198 203
Less accumulated amortisation–(138) (138)
Net book value at 30 June 2020 5 60 65
Software
Acquired computer software
licences (that are not considered
an integral part of related hardware)
are capitalised on the basis of the
costs incurred to acquire and bring to
use the specific software. Additionally,
costs directly associated with the
production of identifiable and
unique software products that will
generate economic benefits beyond
one year are also recognised as
intangible assets.
All these costs are amortised
over their useful lives on a straight-
line basis.
Costs associated with maintaining
computer software programs are
recognised as an expense as incurred.
Useful lives
Meridian uses its judgement in
determining the remaining useful
lives and residual value of intangible
assets, which are:
• electricity and gas retail platform
– up to 5 years;
• generation control – up to
10 years; and
• other software – up to 3 years.
These are reviewed, and, if
appropriate, adjusted at each
balance date.
B
Goodwill
Goodwill represents the excess of
the cost of a business acquisition
over the fair value of the identifiable
assets and liabilities at the date of
acquisition. Goodwill is assessed as
having an indefinite useful life and is
not amortised. Instead, it is subject
to impairment testing at each
reporting date or whenever there are
indications of impairment. Goodwill
has been allocated to the following
entities:
$M20202019
Rangoon Energy
Park Pty Ltd4–
Wandsworth Wind
Farm Pty Ltd1–
5–
The goodwill recognised during
the current financial year relates to
the acquisition in March 2020 of
two wind farm development sites in
Australia. As these are development
sites, the impairment test is based on
comparing the carrying value to the
expected recoverable value of each
site. Key inputs into the expected
recoverable amount include the
potential generation capacity of
each site, and a market value
multiple per unit of generation
capacity ($/MW). Potential capacity
is revisited as the development of
each wind farm site progresses. The
market value multiple is reassessed
by analysing other similar purchase
transaction, where available.
147
Meridian Integrated Report 2020
Notes to the Financials — for the year ended 30 June 2020

C1 Capital management
Capital risk management objectives
Meridian’s objective when managing
capital is to provide appropriate
returns to shareholders whilst
maintaining a capital structure that
safeguards its ability to remain a
going concern and optimises the
cost of capital.
Capital is defined as the combination
of shareholders’ equity, reserves and
borrowings (both drawn debt and
lease liabilities) less gross cash and
cash equivalents.
Meridian manages its capital through
various means, including:
• adjusting the amount of dividends
paid to shareholders;
• raising or returning capital; and
• raising or repaying debt.
Meridian regularly monitors its capital
requirements using various measures
which consider debt facility financial
covenants and credit ratings. The key
measures are net debt to EBITDAF
and interest cover. The principal
external measure is Meridian’s credit
rating from Standard & Poor’s.
Meridian is in full compliance with
debt facility financial covenants.
Note
2020
$M
2019
$M
Share capitalC2 1,598 1,599
Retained earnings(1,541) (1,171)
Other reserves 5,026 5,029
5,083 5,457
Drawn borrowingsC7 1,491 1,376
Lease liabilitiesC8 104 32
Less: cash and cash equivalentsC5(176) (78)
1,419 1,330
Net capital 6,502 6,787
Note
2020
$M
2019
$M
Net debt to EBITDAF
Drawn borrowingsC7 1,491 1,376
Lease liabilitiesC8 104 32
Operating lease commitmentsC9– 91
Less: cash and cash equivalentsC5(176) (78)
Add back: restricted cashC5 67 27
Add back: cash buffer
25
27 13
Net debt (A) 1,513 1,461
EBITDAF (B) 854 838
Net debt to EBITDAF (times) (A/B) 1.8 1.7
Note
2020
$M
2019
$M
EBITDAF Interest cover
EBITDAF (B) 854 838
Interest on borrowingsA3 77 78
Interest on lease liabilitiesA3 6 4
Interest (C) 83 82
EBITDAF interest cover (times) (B/C) 10.3 10.2
Standard & Poor’s rating BBB+ BBB+
25. The cash buffer is calculated as 25% of unrestricted cash and cash equivalents.

In this section
This section explains how
Meridian manages its capital
structure and working capital,
the various funding sources and
how dividends are returned to
shareholders. In this section of the
notes there is information about:
a. equity and dividends;
b. net debt;
c. receivables and payables; and
d. leases and commitments.
Managing
funding
C
148
Meridian Integrated Report 2020
Notes to the Financials — for the year ended 30 June 2020
148

Dividend policy
Meridian’s dividend policy considers
free cash flow, working capital
requirements, the medium-term
investment programme, maintaining
a BBB+ credit rating and risks from
short and medium-term economic,
market and hydrology conditions.
Imputation credit balance
Imputation credits allow Meridian
to pass on to its shareholders
the benefit of the New Zealand
income tax it has paid by attaching
imputation credits to the dividends
it pays, reducing the shareholders’
net tax obligations.
The imputation credits available
for future use reflect the balance
available on 25 August 2020,
therefore recognising any tax
payments between balance date
and 25 August 2020.
C2 Share Capital
Share capitalShares
2020
$MShares
2019
$M
Shares issued 2,563,000,000 1,600 2,563,000,000 1,600
Treasury shares held(1,212,448) (2) (681,881) (1)
Share capital 2,561,787,552 1,598 2,562,318,119 1,599
C
Subsequent event –
dividend declared
On 25 August 2020 the
Board declared a partially
imputed final ordinary
dividend of 11.20 cents
per share.
All shares issued are fully paid and have equal voting rights. All shares
participate equally in any dividend distribution or any surplus on the winding
up of the company.
The movement in Treasury shares relates to the purchase of shares by
participants and held on trust as part of a long-term equity settled incentive
plan for New Zealand-based senior executives (refer to Note F1 Share-based
payments) and to hedging of the new LTI scheme.
C3 Earnings per share
Basic and diluted earnings per share (EPS)20202019
Profit after tax attributable to shareholders
of the parent company ($M) 176 339
Weighted average number of shares
used in the calculation of EPS 2,563,000,000 2,563,000,000
Basic and diluted EPS (cents per share) 6.9 13.2
C4 Dividends
Dividends declared and paid
2020
$M
2019
$M
Interim ordinary and special dividend 2020: 8.14cps (cents per share)
(2019: 8.14cps) 209 208
Final ordinary and special dividend 2019: 13.16cps (2018: 11.38cps) 337 292
Total dividends paid 546 500
Dividends declared and not recognised as a liability
Final ordinary dividend 2020: 11.20cps (2019: 10.72cps) 287 275
Special dividend 2020: nil (2019: 2.44cps)– 63
Imputation credit balance
Imputation credits available for future use94 64
149
Meridian Integrated Report 2020
Notes to the Financials — for the year ended 30 June 2020

C5 Cash and cash equivalents
Cash and cash equivalents
2020
$M
2019
$M
Current account 154 78
Money market account 22 –
Cash and cash equivalents 176 78
Cash and cash equivalents are made up of cash on hand, on-demand deposits
and other short-term, highly liquid investments that are readily convertible to a
known amount of cash and are not subject to a significant risk of change in value.
Restricted cash
Meridian trades electricity hedges on the ASX using JP Morgan as a broker.
As a result, a proportion of the funds it holds on deposit is pledged as margin
which varies depending on market movements and contracts held.
At 30 June 2020, this collateral was $67 million (30 June 2019: $27 million).
All other cash and cash equivalent balances are available for use.

Reconciliation of net profit after tax
to cash flows from operating activities
2020
$M
2019
$M
Net profit after tax 176 339
Adjustments for operating activities’ non-cash items:
Depreciation and amortisation 312 276
Movement in deferred tax(106) (28)
Net change in fair value of financial instruments 161 5
Electricity option premiums(22) (19)
Share-based payments 1 1
346 235
Items classified as investing activities:
Impairment of assets58 5
(Gain)/Loss on sale of assets–(3)
58 2
Changes in working capital items:
(Increase) in accounts receivable(31) (31)
(Increase) in customer contract assets(3) (1)
(Increase) in other assets(8) (2)
Increase in payables and accruals/employee entitlements 68 37
Increase in customer contract liabilities 7 2
(Decrease)/increase in current tax payable(1) 37
Working capital items in investing activities(21) 5
Working capital items in financing activities and other non-cash items 14 12
25 59
Cash flow from operating activities 605 635
C
150
Meridian Integrated Report 2020
Notes to the Financials — for the year ended 30 June 2020
150

C6 Trade receivables
Trade receivables
2020
$M
2019
$M
Accrued receivables 262 223
Current billed 57 57
Past due 1 to 30 days 10 11
Past due 31 to 60 days 3 2
Past due 61 to 90 days 1 2
Past due greater than 90 days 6 2
Less: credit loss allowance(16) (5)
Total trade receivables 323 292
Accounts receivable past due but not impaired 10 12
Movement in provision for credit loss allowance
Opening provision(5) (5)
Provision created in the year(14) (4)
Provision used in the year 3 4
Closing provision for credit loss allowance(16) (5)
Trade receivables,
measurement and recognition
Trade receivables are measured
on initial recognition at fair value,
and are subsequently carried
at amortised cost. The overdue
amounts are largely related to
electricity sales to retail customers
in New Zealand and Australia.
Trade receivables written off
during the year were $3 million
(30 June 2019: $4 million).
Receivables are written off at the
point where Meridian believe
there is no reasonable expectation
of recovery, which is typically a
combination of an overdue amount,
no communication or response
from the debtor, and no payments
received. Receivables written off
are handed to collection agencies
for enforcement.
Credit losses
The allowance for credit losses are
an estimate of the Group’s expected
credit losses over the lifetime of the
current amounts receivable. Or rather,
it is the difference between the
face value of trade receivables and
the future cash flows we expect to
receive. Additions to the provision are
recognised in the income statement.
We estimate collective future cash
flows by considering customer
credit history, historical recovery
performance and trends, through
which we build default matrices that
apply a probability of default given
the ageing of debtors. Forward-
looking employment statistics are also
monitored for both New Zealand and
Australia, with a large rise in forecast
unemployment acting as a trigger for
us to reconsider the probability rates
in our matrices.
As noted in the Significant Matters
section, Meridian has increased its
provision for credit losses in the
current year in response to COVID-19.
C
151
Meridian Integrated Report 2020
Notes to the Financials — for the year ended 30 June 2020

C7 Borrowings
$M
2020 2019
Currency
borrowed in
Drawn facility
amount
Transaction
costs paid
Fair value
adjustment
Carrying
amount
Drawn facility
amount
Transaction
costs paid
Fair value
adjustment
Carrying
amount
Current borrowings
Unsecured borrowings
NZD 89 (1) – 88 168 (1) – 167
Total current borrowings
89 (1) – 88 168 (1) – 167
Non-current borrowings
Unsecured borrowings
NZD 800 (2) – 798 610 (2) – 608
Unsecured borrowings
USD 602 (1) 201 802 598 (1) 98 695
Total non-current borrowings
1,402 (3) 201 1,600 1,208 (3) 98 1,303
Total borrowings
1,491 (4) 201 1,688 1,376 (4) 98 1,470
Fair value of items held
at amortised cost
2020
$M
2020
$M
2019
$M
2019
$M
Carrying
value
Fair
value
Carrying
value
Fair
value
Retail bonds500 558 500 542
Floating Rate Notes50 51 100 101
Unsecured term loan (EKF facility)60 64 70 75
Within term borrowings there are
longer dated instruments which are
not in hedge accounting relationships.
The carrying values and estimated
fair values of these instruments are
noted in the table above.
Fair value is calculated using a
discounted cash flow calculation
and the resultant values would be
classified as Level 2 within the fair
value hierarchy. The Retail Bonds
are listed instruments; however, a
lack of liquidity on the NZX precludes
them from being classified as Level
1 (a definition of hierarchy levels
is included in Note D1 Financial
instruments used to manage risk).

Carrying value approximates fair
value for all other instruments within
term borrowings.
Borrowings, measurement
and recognition
Borrowings are recognised initially
at the fair value of the drawn facility
amount (net of transaction costs
paid) and are subsequently held at
amortised cost using the effective
interest method. Any borrowings
which have been designated as
hedged items (USD borrowings)
are carried at amortised cost plus a
fair value adjustment under hedge
accounting requirements – refer to
Note D1 Hedge accounting section for
further detail on this. Any borrowings
denominated in foreign currencies
are retranslated to the functional
currency at each reporting date. Any
retranslation effect is included in the
“Fair value adjustment” column in the
table, along with any amounts relating
to fair value hedge adjustments.
Meridian uses cross-currency
interest rate swap (CCIRS) hedge
contracts to manage its exposure
to interest rates and borrowings
sourced in currencies different to
that of the borrowing entity’s
reporting currency. More information
on Meridian’s risk management
and hedge accounting practices
can be found in Section D Financial
instruments used to manage risk.
C
152
Meridian Integrated Report 2020
Notes to the Financials — for the year ended 30 June 2020
152

Reconciliation of liabilities arising from financing activities
The table below details changes in the Group’s liabilities arising from financing activities, including both cash and non-cash changes.
$75 million in new lease liabilities were recognised following implementation of NZ IFRS 16 and are noted in the column “Lease liabilities recognised”.
$M
2020
Balance at
30 June 2019
Term
borrowings
drawn
Term
borrowings
repaid
Valuation
adjustments
Foreign
Exchange
Transaction
costs paid
& accrued
Lease
liabilities
recognised
Lease
liabilities
paid
Lease
Derecognition
Unwind of
discounting
Balance at
30 June 2020
Unsecured borrowings – NZD 775 172 (60) – – (1) – – – – 886
Unsecured borrowings – USD 695 – – 80 27 – – – – 802
Lease Liabilities 32 – – (1) (1) – 75 (7) – 6 104
Total 1,502 172 (60) 79 26 (1) 75 (7) – 6 1,792
$M
2019
Balance at
1 July 2018
Term
borrowings
drawn
Term
borrowings
repaid
Valuation
adjustments
Foreign
Exchange
Transaction
costs paid
& accrued
Lease
liabilities
recognised
Lease
liabilities
paid
Lease
Derecognition
Unwind of
discounting
Balance at
30 June 2019
Unsecured borrowings – NZD 986 – (212) – – 1 – – – – 775
Unsecured borrowings – USD 487 439 (272) 37 5 (1) – – – – 695
Lease Liabilities 48 – – – (3) – – (1) (16) 4 32
Total 1,521 439 (484) 37 2 – – (1) (16) 4 1,502
Sources of funding – $M
2020 2019
Currency
borrowed in
Facility
amount
Drawn
facility
amount
Undrawn
facility
amount
Facility
amount
Drawn
facility
amount
Undrawn
facility
amount
Bank facilities
New Zealand bank funding
26
NZD 600 200 400 600 28 572
EKF funding
27
NZD 60 60 – 70 70 –
Total bank facilities 660 260 400 670 98 572
Other sources of borrowing
Retail bonds
28
NZD 500 500 – 500 500 –
Floating rate notes
26
NZD 50 50 – 100 100 –
Fixed rate bonds
29
USD 602 602 – 598 598 –
Commercial paper
30
NZD 79 79 – 80 80 –
Total other sources of borrowing 1,231 1,231 – 1,278 1,278 –
Total sources of funding 1,891 1,491 400 1,948 1,376 572
C7 Borrowings continued
26. Funding bears interest at the relevant market
floating rate plus a margin.
27. EKF facility is an unsecured amortising term
loan, provided by the official export credit
agency of Denmark, for the construction of
Te Uku wind farm.
28. Retail Bonds are senior unsecured retail bonds
bearing interest rates of 4.53%, 4.88% and 4.21%.
29. USD fixed rate bonds are unsecured fixed rate
bonds issued in the United States Private
Placement Market.
30. NZD commercial paper comprises senior
unsecured short-term debt obligations paying
a fixed rate of return over a set period of time.
C
153
Meridian Integrated Report 2020
Notes to the Financials — for the year ended 30 June 2020

C8 Lease Liabilities
Lease liabilities analysis
2020
$M
2019
$M
Minimum lease payments
Not later than 1 year 10 5
Later than 1 year and not later than 3 years20 9
Later than 3 years and not later than 5 years19 9
Later than 5 years109 56
Gross future lease payables158 79
Less future finance costs(54) (47)
Present value of lease liabilities 104 32
Analysed as:
Not later than 1 year7 1
Later than 1 year and not later than 3 years 14 2
Later than 3 years and not later than 5 years 13 2
Later than 5 years 70 27
Present value of lease liabilities 104 32
Comprising:
Current 7 1
Non-current 97 31
104 32
Lease liabilities, measurement
and recognition
Meridian recognises the present value
of expected lease payments under
lease arrangements as lease liabilities
payable. Subsequent repayments
are split between principal and
interest expense. The interest reflects
a constant periodic charge over the
expected term of the lease.
A number of our lease arrangements
contain options to extend. Where
we are reasonably certain of taking
up those options, they are included
in the lease liability. If there is any
uncertainty around whether a lease
extension will be taken up, it is
excluded from the liability value.
Lease liabilities are classified as
financial liabilities at amortised cost.
As at the date of initial application
of NZ IFRS 16, the weighted average
discount rate applied in the calculation
of lease liabilities was 3.11%.
Lease details
Meridian’s leases relate to office
spaces, transmission connection
assets at Mill Creek and Mt Mercer,
and land access arrangements at
our Australian generation sites.
The increase in lease liabilities in
the current financial year is due to
the implementation of NZ IFRS 16,
which saw forward commitments
under operating leases brought on
to balance sheet. Prior year figures
relate only to leases which were
recognised on balance sheet in the
prior reporting period, those being
finance leases recognised under
NZ IAS 17.
Meridian reported interest
expense on lease liabilities of
$6 million (30 June 2019: $4 million)
in the income statement.
Refer to Note B1 Property,
plant and equipment for details of
the related right of use lease assets.
C
154
Meridian Integrated Report 2020
Notes to the Financials — for the year ended 30 June 2020
154

C9 Commitments
Non-cancellable operating
lease commitments are as follows:
Group
2020
$M
2019
$M
Less than 1 year – 6
Later than 1 year and not later than 3 years – 12
Later than 3 years and not later than 5 years – 11
More than 5 years – 62
Total operating lease commitments – 91
Operating leases, measurement and recognition
In the previous financial year, we recognised forward commitments under
NZ IAS 17 operating leases in this table. However, with the implementation of
NZ IFRS 16 in the current financial year, these lease commitments have been
brought on to balance sheet and are now recognised as part of lease liabilities.
Refer to Note C8 Lease liabilities for further details.
The values disclosed in this table in the prior financial year represented the
undiscounted lease payments that Meridian has committed to. The increase in
lease liabilities this year is less than the $91 million in lease commitments noted,
because:
• lease liabilites recognised on balance sheet are discounted to present value;
and
• 12 months of lease payments have been made since 30 June 2019.
Capital expenditure commitments
Group
2020
$M
2019
$M
Property, plant and equipment8 8
Total capital expenditure commitments8 8
Guarantees
Various entities within the Group provide guarantees to external
counterparties, with these mostly relating to security for energy market
clearing and lines companies. The maximum liability under these
guarantees is $75 million (30 June 2019: $35 million).
In addition to the above Meridian Energy Limited has provided parent
guarantees for various construction and grid connection obligations of
Mt Mercer Windfarm Pty Limited. The maximum liability under these
guarantees is $30 million (30 June 2019: $32 million).
C
155
Meridian Integrated Report 2020
Notes to the Financials — for the year ended 30 June 2020

D1 Financial risk management
Meridian’s activities expose it to a
variety of financial risks. Its financial
risk management framework focuses
on the unpredictability of financial
markets and wholesale enegy markets.
The Board approves policies including
Group Treasury, Energy Hedging and
Credit Policies which set appropriate
principles and risk tolerance levels to
guide management in carrying out
financial risk management activities
to minimise potential adverse effects
on the financial performance and
economic value of the Group. The
key risks managed are discussed
further below.
In order to help balance certain risk
exposures, Meridian uses a variety of
financial instruments (hedges). Hedges
are categorised as either “Treasury”
or “Energy” related, based on their
underlying nature. A small number
of Treasury hedges are designated
in hedge accounting relationships
(refer to Hedge accounting section
for further detail). Meridian does not
enter into speculative trades.
Financial instrument recognition
Meridian designates or classifies
financial hedging instruments as:
• Fair value hedge, hedges of the
fair value of recognised assets or
liabilities or a firm commitment; or
• Cash flow hedge, hedges of a
particular cash flow associated
with a recognised asset or liability
or a highly probable forecast
transaction; or
• Held for trading, financial
instruments which have not
been designated in a hedging
relationship.
Meridian accounts for derivative
and certain designated financial
instruments as fair value through
the income statement.
Hedges are initially recognised at
fair value on the dates the contracts
are agreed, and are subsequently
remeasured on a periodic basis.
Remeasurement is recognised in
the income statement.
Realised flows on hedges are
recognised in the income statement
within EBITDAF, in the same line as
the underlying business/transactions
being hedged.
Fair value (or unrealised) changes
are recognised in “Net change in
the fair value of energy hedges” or
“Net change in fair value of treasury
hedges”, depending on the underlying
business nature of the hedge.
Calculation of fair value
for financial instruments
Meridian uses quoted prices and/
or a discounted cash flows approach
in order to calculate fair values for
financial instruments. Fair value
measurements are grouped within
a three-level fair value hierarchy based
on the observability of inputs to the
valuation process:
• Level 1 Inputs: quoted prices
(unadjusted) in active markets for
identical assets or liabilities that the
entity can access at reporting date;
• Level 2 Inputs: either directly (i.e. as
prices) or indirectly (i.e. derived from
prices) observable inputs other than
quoted prices included in Level 1;
• Level 3 Inputs: inputs that are not
based on observable market data
(i.e. unobservable inputs).
Meridian has a number of energy
hedges that require management
estimation and judgement in order to
generate a fair value at each reporting
date. These estimates can have a
significant risk of material adjustment
in future periods. This is discussed in
more detail later in this section.
D
Financial
instruments used
to manage risk
In this section
This section explains the financial
risks Meridian faces, how these risks
affect Meridian’s financial position
and performance, and how Meridian
manages these risks. In this section of
the notes there is information:
a. outlining Meridian’s approach to
financial risk management; and
b. analysing financial (hedging)
instruments used to manage risk.
156
Meridian Integrated Report 2020
Notes to the Financials — for the year ended 30 June 2020
156

Meridian ensures flexibility in funding
by maintaining committed surplus
credit lines available of at least $200
million (refer to Note C7 Borrowings
for details of undrawn facilities). This
helps ensure Meridian has sufficient
headroom under both normal and
abnormal hydrological conditions.
Meridian manages its term debt
requirements on a portfolio basis.
To reduce concentration risk on any
one lender or funding type, Meridian
uses a range of different funding
sources and currencies. Meridian
also monitors contractual maturities
and ensures these are well spaced
(or laddered) so that refinancing risks
are manageable.
For retail customers, credit checks
are carried out before new customers
are accepted. The credit team
oversees the collection of receivables
and works with customers to
minimise the chances of bad debts
occurring. Management monitors
the size and nature of retail customer
exposures on a regular basis and acts
to mitigate the risk if deemed to
exceed acceptable levels.
For banks and financial institutions,
only independently related parties
with a minimum rating of ‘A’
are accepted.
For wholesale customers, individual
credit limits are set based on internal
or external credit ratings in accordance
with limits set by the Board. Where
customers are not independently
credit rated, an assessment of credit
quality is made, taking into account
financial position, past experience and
other relevant factors. If appropriate,
letters of credit/guarantees are
obtained from counterparties to
reduce credit risk to acceptable
levels. These assessments and the
utilisation of credit limits and security
provided by wholesale customers
are reviewed and monitored by the
Chief Financial Officer.
The carrying amounts of financial
assets recognised on the balance
sheet best represent Meridian’s
maximum likely exposure to credit
risk at the date of this report. Refer
to Note C6 Trade receivables for
a description of how we provide
for any credit losses. Meridian does
not have any significant credit risk
concentrations.
In addition to borrowings, Meridian
has entered into a number of letters
of credit and guarantee arrangements
which provide credit support of
$75 million for Meridian’s general
operations (30 June 2019: $67 million).
Meridian indemnifies the obligations
of the bank in respect of the letters of
credit and performance guarantees
issued by the bank to counterparties
of Meridian.
Credit risk
Meridian is exposed to the
risk of default in relation to
energy sales to wholesale
and retail customers, hedging
instruments, guarantees and
deposits held with banks and
other financial institutions.
Liquidity risk
Meridian is exposed to
the dynamic nature of
the energy markets and
weather patterns, which
can affect liquidity.
D
D1 Financial risk management continued
157
Meridian Integrated Report 2020
Notes to the Financials — for the year ended 30 June 2020

Liquidity Risk –
Contractual maturities
The following tables are an analysis
of the contractual undiscounted cash
flows (settlements expected under
the contracts) relating to financial
liabilities and a reconciliation from total
undiscounted cash flows to carrying
amounts. Meridian expects to meet
its future obligations from operating
cash flows and debt financing.
2020
$M
Due
within
1 year
Due in
1 to 2 years
Due in
3 to 5 years
Due after
5 years
Total
undiscounted
cash flows
Impact of
other
non-cash
items
Impact of
interest/FX
discounting
2020
carrying
value
Borrowings 144 174 778 753 1,849 (4) (157) 1,688
Lease liabilities 10 2019109158–(54) 104
Payables, accruals, provisions
and option premiums410 42 9 24 485–(8) 477
Treasury hedges 43 42 92 75 252 –(14) 238
Energy hedges 27 21 31 29 108 (1) (3) 104
6342999299902,852(5) (236) 2,611
2019
$M
Due
within
1 year
Due in
1 to 2 years
Due in
3 to 5 years
Due after
5 years
Total
undiscounted
cash flows
Impact of
other
non-cash
items
Impact of
interest/FX
discounting
2019
carrying
value
Borrowings 223 62 572 953 1,810 (4) (336) 1,470
Lease liabilities 5 9 9 56 79 –(47) 32
Payables, accruals, provisions
and option premiums 336 35 30 25 426 –(21) 405
Treasury hedges 29 32 77 64 202 –(18) 184
Energy hedges 9 4 26 29 68 (1) (6) 61
602 142 714 1,127 2,585 (5) (428) 2,152
D
D1 Financial risk management continued
158
Meridian Integrated Report 2020
Notes to the Financials — for the year ended 30 June 2020
158

Foreign exchange risk
Meridian is exposed to foreign
exchange risk arising from sales and
procurement of goods and services
denominated in foreign currencies
and also from term debt raised in
foreign currencies.
For exposures resulting from
Meridian’s general operations, foreign
exchange spot or forward contracts
are used to fix the value in reporting
currency terms. Material items may
be placed in hedge accounting
relationships and can be either fair
value hedges or cash flow hedges,
depending on the nature of the
transaction/underlying exposure.
For term debt raised in US Dollars,
cross currency interest rate swaps
(CCIRS) are used to convert the
proceeds back to functional currency.
These derivatives minimise foreign
exchange risk on both the notional
and the coupon flows over the life
of the debt. CCIRS are placed in
both fair value and cash flow
hedge accounting relationships.
Interest Rate risk
Meridian is exposed to interest rate
risk arising from its funding portfolio,
which is a mix of fixed and floating
rate debt.
Meridian issues debt on both a
fixed and a floating basis and is thus
exposed to changes in interest rates
over time.
A portfolio of interest rate swaps
(IRS) is then used to manage the
net exposure to interest rate risk, in
line with a Board approved hedging
policy and profile. Please also refer
to the Foreign Exchange section for
derivatives used for term debt raised
in foreign currencies.
Meridian swaps a significant portion
of its borrowings to floating rates
at loan inception, and hedges the
resulting interest rate exposure over
a tenure based profile of fixed IRS.
This is achieved using a combination
of CCIRS and IRS hedges. Where
Meridian borrows in foreign currency
it uses CCIRSs to swap all foreign
currency denominated interest and
principal repayments to the reporting
currency. This results in floating rate
borrowings in the entity’s reporting
currency. Meridian uses IRS hedges to
fix floating interest rates in line with
the Board approved hedging policy
and profile.
Market risk
Meridian is involved in both the
energy and financial markets and as
such is exposed to rises and falls in
those markets and the subsequent
income statement volatility this can
cause. The main sub-types of market
risk that we are exposed to are
discussed below.
Commodity price risk
Meridian trades in the wholesale
energy markets and so is exposed
to volatility in forward energy prices.
Being both a generator and a retailer
of energy means that Meridian has
a natural hedge for most of the
exposure to future energy prices.
Meridian also uses derivatives to help
manage its net energy position, some
of which are traded in quoted markets,
and some of which are traded directly
with other energy market participants.
Energy hedges are not placed in
hedge accounting relationships.
D
159
Meridian Integrated Report 2020
Notes to the Financials — for the year ended 30 June 2020

Meridian groups its financial instrument into two categories -
Treasury hedges and Energy hedges.
$M
Fair value on the balance sheet
2020 2019
AssetsLiabilitiesAssetsLiabilities
Treasury hedges 223 (238) 114 (184)
Energy hedges 142 (104) 195 (61)
365 (342) 309 (245)
of which
Current 100 (63) 118 (36)
Non Current 265 (279) 191 (209)
365 (342) 309 (245)
Further disclosure and analysis of these two categories are noted on the
following pages.
160
Meridian Integrated Report 2020
Notes to the Financials — for the year ended 30 June 2020
160

Treasury hedges – sensitivity analysis
The table below summarises the impact of changes in significant inputs
(assuming all other variables are held constant) on the valuation of Treasury
Hedges and therefore on Meridian’s after tax profit and equity.
Note that changes in the fair value of the CCIRS are fully offset by opposite
impacts from hedge accounting entries and the FX retranslation of the USD
debt. Therefore the CCIRS P&L sensitivity is nil and is not shown in the below
table. Due to the small size of the FX portfolio, changes in spot exchange
rates result in very little change to fair values and therefore these are not
shown in the table.
Impact on after tax
profit & equity
Sensitivity
2020
$M
2019
$M
Interest rates
New Zealand benchmark bill rate-100 basis points (bps)(40) (39)
+100 bps 44 42
Australian benchmark bill rate-100 bps(4) (4)
+100 bps 4 4
Treasury hedges
Hedges in the Treasury category generally relate to management of the interest
rate risks and foreign exchange risks that arise from Meridian’s funding activities
and from general Group operations.
The instruments used are CCIRS, IRS and forward exchange contracts (FX).
Treasury hedges
Fair value on the balance sheet
Fair value
movements
in the income
statement
Outstanding
aggregate
notional
principals
35
2020
$M
2019
$M
2020
$M
2019
$M
2020
$M
2019
$M
LevelAssetsLiabilitiesAssetsLiabilities
CCIRS
– Interest Rate Risk
31
118 – 40 – (2) (1)
– Basis and Margin Risk
32
(4) – (6) – – –
– Foreign Exchange Risk
33
80 – 58 – – –
2 194 – 92 – (2) (1) 602 598
IRS
34
229(238) 22 (184) (46) (62) 1,427 1,492
FX
34
2 – – – – – – 16 14
Treasury hedges 223 (238) 114 (184) (48) (63)
Meridian uses CCIRS to hedge risks involved with long term debt issued in USD.
In the above table the CCIRS are separated into component parts as follows:
In the above table, fair value movements in the income statement are shown
net of any related hedge accounting adjustments and retranslation of foreign
currency borrowings.
Refer to the Hedge Accounting section of Note D1 Financial risk management for
further detail on the fair value and cash flow hedge relationships that the CCIRS
are designated in.
D
D1 Financial risk management continued
31. Interest rate risk: this is the movement in value of the CCIRS due to changes in benchmark interest rates. The
other side of this movement is recorded in the income statement in the “Net change in fair value of treasury
instruments”, together with changes in the fair value hedge adjustments on the designated USD borrowings.
32. Basis and margin risk: this is the movement in the value of the CCIRS due to changes in basis (excluding foreign
exchange) and credit margin. The other side of this movement is recorded in the income statement in the “Net
change in fair value of treasury instruments”, together with cash flow hedge accounting adjustments that transfer
effective hedge portions to the Cash Flow Hedge Reserve within Equity.
33. Foreign Exchange Risk: this is the movement in value of the CCIRS due to changes in spot foreign exchange
rates. The impact of retranslation is recorded in the income statement in “Net change in fair value of treasury
instruments” and is offset by equal and opposite retranslation effects on the related borrowings.
34. Changes in fair value of the IRS and FX portfolios are recognised in the income statement within “Net change in
fair value of treasury instruments”.
35. These cover multiple legs including offsetting legs and maturities out to 2034.161
Meridian Integrated Report 2020
Notes to the Financials — for the year ended 30 June 2020

Energy hedges
Hedges in this category relate to Meridian’s management of risk arising
from the generation, purchase and sale of energy.
Meridian is exposed to changes in the spot price of electricity it receives for
electricity generated, or pays to buy electricity and gas to supply customers.
Additionally, inflows into Meridian’s storage lakes are variable, therefore the
volume of electricity required to supply customers may exceed (or fall short
of) generation production.
Meridian’s hedging strategy focuses on its net exposure by estimating both
expected generation and energy purchases required to support contracted
sales. Execution of this strategy is guided by Board approved parameters.
Changes in the fair value of energy hedges are recognised in the income
statement within “Net change in fair value of energy hedges”. Hedge
accounting is not applied to Energy Hedges.
Energy hedges
Fair value on the balance sheet
Fair value movements in
the income statement
Outstanding aggregate
notional volumes
36
2020
$M
2019
$M
2020
$M
2019
$M20202019
LevelAssetsLiabilitiesAssetsLiabilities
Market traded electricity hedges 1 57 (16) 52 (3) (23) 21 16,982 GWh 14,210 GWh
Market traded gas hedges 1 – (2) – – (2) – 5 49 TJ 403 TJ
Other electricity hedges 3 27 (65) 51 (58) (34) 35 21,086 GWh 24,589 GWh
Other gas hedges 2 – (10) – – (10) – 280 TJ 0 TJ
Electricity options 3 50 – 70 – (20) (17) 2,855 GWh 3,990 GWh
LGCs
LGC – Holdings created from wind farm generation 1 6 – 6 – 1 2 0.1 million 0.1 million
LGC – Hedges 2 2 (11) 16 – (25) 17 2.1 million 1.0 million
8 (11) 22 – (24) 19
Energy related hedges 142 (104) 195 (61) (113) 58
The “Market traded electicity hedges” and “Market traded gas hedges” categories
contain instruments that are traded on various exchange-based markets.
The “Other electricity hedges” and “Other gas hedges” categories contain
over-the-counter derivatives, where counterparties include customers, other
energy market participants and financial institutions. These hedges are generally
longer-term, larger volume contracts that manage specific risks that can not
be managed through exchange-based markets.
Meridian trades electricity options with other generators. These are used to
support the management of inflow and storage variability in the catchments
where it generates electricity.
The LGC category has two sub-components. The first represents the Renewable
Energy Certificates (RECs) that Meridian’s Australian wind farms earn in the
form of Large Scale Generation Certificates (LGCs). Additionally, Powershop
Australia is required to purchase and surrender RECs. The second represents the
derivatives used to firm prices received for LGCs generated and consequently
reduce the profit volatility of each wind farm. At the time of generation, LGCs
are recognised as income in energy margin at the prevailing spot price. LGC
holdings and hedges are all recognised as financial instruments on the balance
sheet at their fair value.
D
D1 Financial risk management continued
36. These cover multiple legs including offsetting legs and maturities out to 2030
162
Meridian Integrated Report 2020
Notes to the Financials — for the year ended 30 June 2020
162

Energy hedges – sensitivity analysis
The table below summarises the impact of changes in significant inputs
(assuming all other variables are held constant) on the valuation of Energy
Hedges and therefore on Meridian’s after tax profit and equity.
Impact on after tax
profit & equity
Sensitivity
2020
$M
2019
$M
Energy hedges
Energy prices-10%(53) (57)
+10% 55 57
Discount rates-100 bps(2) (1)
+100 bps 2 1
Call volumes-10%(3) (5)
+10% 3 5
LGC prices-10% 2 1
+10%(2) (1)
Settlements of energy hedges
The following provides a summary of the settlements through EBITDAF for Energy Hedges:
2020 2019
Market-
traded
electricity
hedges
Market-
traded
gas hedges
Other
electricity
hedges
Other
gas hedges
Electricity
Options
LGC
related Total
Market-
traded
electricity
hedges
Market-
traded
gas hedges
Other
electricity
hedges
Other
gas hedges
Electricity
Options
LGC
related Total
Operating revenue
24 –(14) –– 38 48 (27) –(65) –– 29 (63)
Operating expenses
(50) – 69 – 4 (15) 8 (6) – 182 – 18 (12) 182
Total settlements
in EBITDAF
(26) – 55 – 4 23 56 (33) – 117 – 18 17 119
D
D1 Financial risk management continued
Movements in recalibration differences
arising from energy hedges
2020
$M
2019
$M
Opening difference(3) 5
Initial differences on new hedges - (7)
Volumes expired and amortised 1 (1)
Recalibration for future price estimates and time 1 -
Closing difference(1) (3)
Initial recognition difference
An initial recognition difference arises when the modelled value of an energy
hedge differs from the transaction price (which is the best evidence of fair
value). This difference is accounted for by recalibrating the valuation model
by a fixed percentage to result in a value at inception equal to the transaction
price. This recalibration is then applied to future valuations over the life of
the contract.
The resulting difference shown in the table reflects potential future gains or
losses yet to be recognised in the income statement over the remaining life
of the contract.
163
Meridian Integrated Report 2020
Notes to the Financials — for the year ended 30 June 2020

Fair value technique and key inputs
In estimating the fair value of an asset
or liability, Meridian uses market-
observable data to the extent that
it is available. The Audit and Risk
Committee of Meridian determines
the overall appropriateness of key
valuation techniques and inputs for
fair value measurement. The Chief
Financial Officer explains fair value
movements in his report to the Board.
Where the fair value of a financial
instrument is calculated as the present
value of the estimated future cash
flows of the instrument (DCFs), a
number of inputs and assumptions are
Financial asset
or liabilityDescription of input
Range of significant
unobservable inputs
Relationship of
input to fair value
Other electricity
hedges, valued
using DCFs
Price, where quoted prices are not available or not
relevant (i.e. for long-dated contracts), Meridian’s best
estimate of long-term forward wholesale electricity
price is used. This is based on a fundamental analysis
of expected demand and the cost of new supply and
any other relevant wholesale market factors.
$47/MWh to $77/MWh
(in real terms), excludes
observable ASX prices.
An increase in the forward
wholesale electricity price
increases the fair value of
buy hedges and decreases
the fair value of sell hedges.
A decrease in the forward
wholesale electricity price
has the opposite effect.
LGC Forward Contracts
& Options valued using
DCFs / Black Scholes
Price, based on a forward LGC price curve from a
third party broker, and benchmarked against market
spot prices.
Other factors, include:
• Calibration factor applied to forward price curves
as a consequence of initial recognition differences.
A$21 to A$39An increase in the forward
LGC price decreases the fair
value of sell hedges and
increases the fair value of
buy hedges. A decrease in
the forward LGC prices has
the opposite effect.
used by the valuation technique.
These are:
• forward price curves referenced
to the ASX for electricity, published
market data on gas/oil prices,
published market interest rates
and published forward foreign
exchange rates;
• Meridian’s best estimate of
electricity volumes called over
the life of electricity options;
• discount rates based on market
wholesale interest rate curves,
adjusted for counterparty credit risk;
• calibration factor applied to forward
price curves as a consequence of
initial recognition differences;
• NZAS continues to operate; and
• contracts run their full term (see
significant matters section for
further details on this.)
The impact of COVID-19 has been
considered as part of the assumptions
when determining the fair value of
our financial instruments. There was
no impact on fair value when taking
this into consideration.
The table below describes any
additional key inputs and techniques
used in the valuation of level 2 and 3
energy hedges.
D
164
Meridian Integrated Report 2020
Notes to the Financials — for the year ended 30 June 2020
164

Level 3 financial instrument analysis
The following provides a summary of the movements through EBITDAF and movements in the fair value of level three financial instruments:
Reconciliation of level 3 fair value movements $M
2020 2019
Other
Electricity
Hedges
Electricity
Options Total
Other
Electricity
Hedges
Electricity
Options Total
Energy and other hedges settled in EBITDAF:
Operating revenue(14) –(14) (65) –(65)
Operating expenses 69 4 73 182 18 200
Total settlements in EBITDAF 55 4 59 117 18 135
Net change in fair value of electricity and other hedges:
Remeasurement 21 (16) 5 152 1 153
Hedges settled(55) (4) (59) (117) (18) (135)
Total realised and unrealised losses on energy hedges(34) (20) (54) 35 (17) 18
Balance at the beginning of the period(4) 70 66 (39) 87 48
Fair value movements(34) (20) (54) 35 (17) 18
Balance at the end of the year (38) 50 12 (4) 70 66
Fair value movements of level 3 energy hedges in 2020 which are held at balance date total $52 million (30 June 2019: $18 million).
D
D1 Financial risk management continued
165
Meridian Integrated Report 2020
Notes to the Financials — for the year ended 30 June 2020

Interest rate risk
The USD borrowings are fixed rate
liabilities and thus present interest
rate risk, should benchmark interest
rates change. This risk is neutralised
by receiving the same fixed rate on
the USD leg of the matching CCIRS.
Meridian designates the interest rate
risk on USD borrowings in fair value
hedge accounting relationships.
This means that:
• the carrying value of the USD
borrowings are adjusted for
changes in the fair value of the
hedged risk - noted as “hedge
accounting adjustments” in
Note C7 Borrowings; and
• the CCIRS are revalued to
the income statement for
this same risk.
As long as the hedge accounting
relationships remain effective, the
revaluations of both the hedged item
and hedging instrument should net
to a minimal amount in the income
statement. This residual difference is
referred to as hedge ineffectiveness.
Note that the accumulated life to
date hedge accounting adjustments
on the USD borrowing total
$114 million (2019: $34 million).
Basis and margin risk
The combination of USD borrowings
and CCIRS economically results in
Meridian having floating rate NZD
borrowings. This presents a risk of
variability in future cash flows. As
such, Meridian designates basis risk
(excluding FX) and margin risk into
cash flow hedge relationships.
This means that:
• the CCIRS are revalued to the
income statement for basis risk
and margin risk; and
• the effective portions of the
hedge are moved from the income
statement to the Cash Flow Hedge
Reserve within Equity.
As noted earlier, there may be small
differences between the above entries
which result in hedge ineffectiveness
in the income statement.
Please refer to:
• Note C7 Borrowings for the
carrying value of the hedged
items (USD borrowings);
• Note D1 Treasury hedges for
further information on the
hedging instruments (CCIRS),
including notionals and changes
in fair value during the period; and
• the Statement of Changes in
Equity for the balance of the
Cash Flow Hedge Reserve and
movements during the period.
Note that on the balance sheet, USD
borrowings are included within Term
Borrowings and CCIRS are included
within Financial Instruments.
Hedge ineffectiveness
The below table summarises hedge
ineffectiveness. This is included within
“Net change in fair value of Treasury
Hedges” in the income statement.
Impact on income statement
2020
$M
2019
$M
Hedge
Ineffectiveness(2) (1)
Ineffectiveness is primarily caused
by credit counterparty risk on CCIRS.
This risk is part of the CCIRS fair value
but is not included in the hedge
accounting entries.
Hedge ineffectiveness will net to zero
over the life of the hedge relationships.
D
D1 Financial risk management continued
Hedge accounting
Meridian makes limited use of
hedge accounting, doing so only
for USD borrowings and the CCIRS
financial instruments that are used to
economically hedge these exposures.
Please refer to the start of the Risk
Management section for a description
of the key risks Meridian manages.
Meridian only designates hedge
accounting relationships where the
underlying exposure and the hedge
are eligible for hedge accounting and
are an economic match, where credit
risk is not expected to dominate the
fair value of the hedge, and where
we expect the hedge relationship to
remain effective over its life.
The USD borrowings (hedged items)
and the CCIRS (hedging instruments)
present Meridian with risks which we
account for in the following ways:
166
Meridian Integrated Report 2020
Notes to the Financials for the year ended 30 June 2020
166

Future cash flows
The below table estimates the contractual undiscounted future cash flows that we expect on both the USD borrowings and the hedging CCIRS.
Amounts noted include coupons and repayment/exchange of notionals on maturity.
Currency as indicated below
2020
$M
2019
$M
Due within
1 year
Due within
1–2 years
Due within
2–5 years
Due after
5 years
Due within
1 year
Due within
1–2 years
Due within
2–5 years
Due after
5 years
USD Borrowings (shown in USD)(17) (56) (47) (469) (17) (17) (87) (486)
CCIRS
– USD leg (coupons and maturity flow – shown in USD) 17 56 47 469 17 1787 486
– Functional currency leg (coupons and maturity flow –
shown in NZD)(11) (57) (34) (627) (19)(19)(96)(671)
Functional currency coupons are set quarterly based on NZ and AU benchmark rates. They are shown in this table based on market forward
interest rates and translated to NZD equivalent using spot AUD/NZD exchange rates at reporting date.
Financial instruments which are offset
In certain circumstances Meridian offsets the fair value of financial instruments where it has legal agreements in place that permit netting
of positions and net settlement.
2020
$M
2019
$M
Gross Value Value OffsetCarrying Value Gross Value Value OffsetCarrying Value
Financial instrument assets
– Energy hedges 205 (63) 142 253 (58) 195
– Treasury hedges 223 – 223 114 – 114
Total financial instrument assets 428 (63) 365 367 (58) 309
Financial instrument liabilities
– Energy hedges(167) 63 (104) (119) 58 (61)
– Treasury hedges(238) – (238) (184) – (184)
Total financial instrument liabilities(405) 63 (342) (303) 58 (245)
Net financial instruments 23 – 23 64 – 64
D
D1 Financial risk management continued
167
Meridian Integrated Report 2020
Notes to the Financials for the year ended 30 June 2020

Group
structure
In this section
This section provides information
to help readers understand
the Meridian Group structure
and how it affects the financial
position and performance of
the Group. In this section of
the notes there is information
about Meridian’s Subsidiaries.
E
Interest held
by the group
Name of entityPrincipal activityFunctional Currency20202019
Meridian Energy Limited
37
Powershop New Zealand LimitedElectricity retailingNew Zealand dollar100%100%
Flux Federation LimitedSoftware developmentNew Zealand dollar100%100%
Flux-UK LimitedLicence holderBritish pounds100%100%
Three River Holdings No. 1 Limited
37
Holding companyNew Zealand dollar100%100%
Three River Holdings No. 2 Limited
37
Holding companyNew Zealand dollar100%100%
Meridian Energy Australia Pty Limited
37
Management servicesAustralian dollar100%100%
GSP Energy Pty LimitedElectricity generationAustralian dollar100%100%
Meridian Finco Pty Limited
37
FinancingAustralian dollar100%100%
Rangoon Energy Park Pty LimitedWind farm developmentAustralian dollar100%–
Wandsworth Wind Farm Pty LimitedWind farm developmentAustralian dollar100%–
Meridian Energy Markets Pty Limited
37
Non-trading entityAustralian dollar100%100%
Meridian Wind Monaro Range Holdings Pty Limited
37
Holding companyAustralian dollar100%100%
Meridian Wind Monaro Range Pty Limited
37
Holding companyAustralian dollar100%100%
Mt Millar Wind Farm Pty Limited
37
Electricity generationAustralian dollar100%100%
Meridian Australia Holdings Pty Limited
37
Holding companyAustralian dollar100%100%
Meridian Wind Australia Holdings Pty Limited
37
Holding companyAustralian dollar100%100%
Mt Mercer Windfarm Pty Limited
37
Electricity generationAustralian dollar100%100%
Powershop Australia Pty LimitedElectricity retailingAustralian dollar100%100%
Dam Safety Intelligence LimitedProfessional servicesNew Zealand dollar100%100%
Meridian LTI Trustee LimitedTrusteeNew Zealand dollar100%100%
Meridian Energy Captive Insurance LimitedInsuranceNew Zealand dollar100%100%
Meridian LimitedNon-trading entityNew Zealand dollar100%100%
Meridian Energy International LimitedNon-trading entityNew Zealand dollar100%100%
37. Members of guaranteeing group.
E1 Subsidiaries
The consolidated financial statements
include the financial statements of
Meridian Energy Limited and the
subsidiaries listed below.
They all have share capital consisting
solely of ordinary shares that the
Group holds directly, and the
proportion of ownership interests
held equals the Group’s voting rights.
Meridian Energy Limited provides
support to its subsidiaries where
necessary in order to ensure they
meet their obligations as they fall due.
On 3 March 2020, Meridian Energy
Australia Pty Ltd completed the
acquisition of 100% shareholdings
in two new subsidiaries, Rangoon
Energy Park Pty Ltd and Wandsworth
Wind Farm Pty Ltd. Both entities are
involved in the development of future
wind farm generation options.
168
Meridian Integrated Report 2020
Notes to the Financials — for the year ended 30 June 2020
168

In this section
This section includes the remaining
information relating to Meridian’s
financial statements which is
required to comply with financial
reporting standards.
F1 Share-based payments
Long term incentive (LTI)
In August 2019, the Board approved
a new LTI plan to replace Meridian’s
previous LTI plan. Set out below is
a summary of the previous LTI Plan
which was last offered in FY19 (for
the period commencing on 1 July
2018 and ending on 30 June 2021).
Also set out below is a summary
of the new LTI plan which was first
offered in FY20 (for the period
commencing on 1 July 2019 and
ending 30 June 2022).
Previous LTI Plan
The previous LTI is a share loan and
cash bonus scheme, where executives
purchase Meridian shares via an
interest-free loan from the company,
with the shares held on trust by the
LTI plan trustee. Any shares awarded
depend on whether the following
performance hurdles are met over
a three-year period:
• the company’s absolute total
shareholder return (TSR) must
be positive; and
• the company’s TSR compared
to a benchmark peer group.
If the performance hurdles have
been achieved, a progressive vesting
scale is applied to determine how
many shares vest:
• if the company’s TSR over the
three-year period exceeds the 50th
percentile TSR of the benchmark
peer group, at least 50% of an
executive’s shares will vest;
• 100% shares will vest on meeting
the 75th percentile TSR of the
peer group, with vesting on a
straight-line basis between these
two points; and
• no shares will vest if the company’s
TSR is less than the 50th percentile
TSR of the peer group.
Once the vesting level has been
confirmed, a cash amount (after the
deduction of tax), but before other
applicable salary deductions, is used
to repay the executive’s outstanding
loan balance.
For each three-year plan, an
independent external expert
measures TSR of Meridian and the
peer group of companies along with
the outcome on the progressive
vesting scale. If TSR is not positive
Other
F
(i.e. in absolute terms is less than
zero), or if TSR does not meet the
peer group relative TSR hurdle of
50th percentile, all of the shares
are forfeited to the trustee and
the relevant executive receives no
benefits under the LTI. Where the
TSR is greater than the 50th
percentile of the benchmark peer
group, but below the 75th percentile,
shares are allocated on a percentage
basis and any that have not vested
will also be forfeited.
For the LTI plan that vested at the
end of 2020, the level of vesting
was 100% (2019: 100%). Therefore,
the outstanding balance of the
interest free loans at 30 June
2020 of $0.5 million has now been
repaid (2019: $0.6 million). A total
amount of 208,707 shares have been
transferred to the eligible participants
(2019: 223,623), and 154,388 shares
forfeited (2019: 70,051).
169
Meridian Integrated Report 2020
Notes to the Financials — for the year ended 30 June 2020

New LTI Plan
Under the new LTI plan, the company
issues rights to acquire ordinary
shares in the company (Share Rights)
to eligible participants who accept
the offer to participate in the LTI
plan. Each Share Right entitles the
holder to one ordinary share in the
company and an additional number
of shares equal to the value of gross
cash dividends per share which would
have been paid to a New Zealand
tax resident who held a share for
the duration of the vesting period,
calculated using a 10-day volume
weighted average price.
The number of Share Rights that
vest is dependent on:
• Meridian’s total shareholder return
over a 3-year performance period
(Performance Period) relative to
Meridian’s cost of equity;
• Meridian’s total shareholder
return over the Performance
Period relative to a defined group
of NZX Main Board and ASX listed
peer companies (Performance
Hurdles); and
• if the participant continues to be
employed by Meridian during
the vesting period (Employment
Condition).
F
F1 Share-based payments continued
Performance Hurdles
Share Rights are granted in
two tranches:
• Absolute Return Share (ABS)
Rights; and
• Relative Return Share (REL) Rights.
For ABS Rights to vest, the company’s
TSR must be greater than the absolute
TSR benchmark which is set at the
beginning of the vesting period
with regard to the company’s cost
of equity (Absolute TSR Benchmark)
on a compounding annual basis
over the Performance Period. If the
company’s TSR is equal to or lower
than the Absolute TSR Benchmark, no
ABS Rights will vest. If the company’s
TSR is greater than the Absolute TSR
Benchmark, 100% of the ABS Rights
will vest.
The number of REL Rights that vest
is determined by the company’s TSR
over the Performance Period relative
to the peer group. For any of the
REL Rights to vest, the company’s
TSR must be greater than or equal
to the 50th percentile / median TSR
of the peer group. 100% of the REL
Rights will vest on meeting the 75th
percentile TSR of the peer group,
with vesting on a straight-line basis
between these two points.
For each three-year plan, an
independent external expert
measures the TSR of Meridian and
the peer group of companies along
with the outcome on the progressive
vesting scale. Share Rights will lapse
if the Vesting Conditions are not
satisfied (although this is subject to
the Board’s discretion in relation to
the Employment Condition).
In the current financial year, 409,668
share rights were issued to eligible
staff, 204,834 being ABS Rights and
204,834 being REL Rights.
170
Meridian Integrated Report 2020
Notes to the Financials — for the year ended 30 June 2020
170

F1 Share-based payments continued
Movement in zero-priced share options
Number of options
Grant dateVesting dateLTI Scheme & Type
Weighted average
fair value of option
Balance at
start of the year
Granted
during the year
Vested
during the year
Forfeited during
the year
Balance at the
end of the year
2020
7/10/2019 & 28/2/2030/06/22New – ABS$3.54 – 204,834 – – 204,834
7/10/2019 & 28/2/2030/06/22New – REL$3.36 – 204,834 – – 204,834
22/08/201830/06/21Previous$1.78 334,897 –– (96,173) 238,724
07/09/201730/06/20Previous$1.61 266,922 –(208,707) (58,215) –
Total 601,819 409,668 (208,707) (154,388) 648,392
2019
22/08/201830/06/2021Previous$1.78 – 334,897 –– 334,897
07/09/201730/06/2020Previous$1.61 302,533 ––(35,611) 266,922
04/08/201630/06/2019Previous$1.63 258,063 –(223,623) (34,440) –
Total 560,596 334,897 (223,623) (70,051) 601,819
F2 Related parties
Meridian transacts with other Government-owned or related entities
independently and on an arm’s-length basis. Transactions cover a variety
of services including trading energy, transmission, postal, travel and tax.
Directors of the Group may be directors or officers of other companies
or organisations with which members of the Group may transact.
Compensation of key management personnel
The remuneration of directors and other members of key management
during the year was as follows:
Group
2020
$M
2019
$M
Directors’ Fees11
Chief executive officer, senior management team and subsidiary chief executives
Salaries and short-term benefits8 7
Long-term benefits1 1
9 8
F
171
Meridian Integrated Report 2020
Notes to the Financials — for the year ended 30 June 2020

F
F3 Auditors remuneration
Group
Auditors remuneration to Deloitte Limited for:
2020
$M
2019
$M
Audit and review of New Zealand-based
companies’ financial statements 0.6 0.6
Audit of overseas-based companies’ financial statements 0.2 0.2
Total audit fees 0.8
0.8
Other assurance fees 0.1 0.1
Total auditor remuneration 0.9 0.9
The Board has adopted a policy to maintain the independence of the
Company’s external auditor, including a review of all other services performed
by Deloitte Limited and recommending to the Office of the Auditor-General
that there be lead partner rotation after a maximum of five years. The
Auditor-General has appointed Mike Hoshek of Deloitte Limited as auditor
of the company.
The audit fee includes Office of the Auditor-General overhead contribution
of $33,300 (30 June 2019: $30,500).
Other services undertaken by Deloitte Limited during the year included other
assurance activities including greenhouse gas inventory assurance, limited
assurance of the sustainability content in the integrated report, review of the
interim financial statements, audit of the securities registers, vesting of the
executive long-term incentive plan, the solvency return of Meridian Energy
Captive Insurance Limited and supervisor reporting.
F4 Contingent assets and liabilities
There were no contingent assets or liabilities at 30 June 2020
(2019: $3 million–$4 million).
F5 Subsequent events
There are no subsequent events other than dividends declared on
25 August 2020 (refer to note C4 Dividends for further details).
F6 Changes in financial reporting standards
In the current year, Meridian has adopted all mandatory new and amended
standards - namely NZ IFRS 16. The application of these new and amended
standards has impacted on the amounts recognised or disclosed in the
financial statements as set out in the significant matters in the financial year.
Meridian is not aware of any standards issued but not yet effective that
would materially affect the amounts recognised or disclosed in the financial
statements.
172
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Notes to the Financials — for the year ended 30 June 2020
172

173
The Auditor-General is the auditor
of Meridian Energy Limited and its
subsidiaries (the Group). The Auditor-
General has appointed me, Mike
Hoshek, using the staff and resources
of Deloitte Limited, to carry out the
audit of the consolidated financial
statements on his behalf.
Opinion
We have audited the consolidated
financial statements of the Group
on pages 127 to 172, that comprise
the consolidated balance sheet as
at 30 June 2020, the consolidated
income statement, consolidated
comprehensive income statement,
consolidated statement of changes
in equity and consolidated statement
of cash flows for the year ended
on that date and the notes to the
consolidated financial statements
including a summary of significant
accounting policies and other
explanatory information.
In our opinion, the consolidated
financial statements present
fairly, in all material respects, the
consolidated financial position of the
Group as at 30 June 2020 and its
consolidated financial performance
and its consolidated cash flows for
the year then ended in accordance
with New Zealand equivalents to
International Financial Reporting
Standards and International
Financial Reporting Standards.
Basis for our opinion
We conducted our audit in
accordance with the Auditor-
General’s Auditing Standards, which
incorporate the Professional and
Ethical Standards and the International
Standards on Auditing (New Zealand)
issued by the New Zealand Auditing
and Assurance Standards Board. Our
responsibilities under those standards
are further described in the Auditor’s
responsibilities for the audit of the
consolidated financial statements
section of our report.
We believe that the audit evidence
we have obtained is sufficient and
appropriate to provide a basis for
our opinion.
Other than the audit, our firm carries
out other assurance assignments for
the Group in the areas of greenhouse
gas inventory assurance, limited
assurance of the sustainability content
in the integrated report, review of
the interim financial statements,
audit of the securities registers,
vesting of the executive long-term
incentive plan, the solvency return of
Meridian Captive Insurance Limited
and supervisor reporting, which are
compatible with those independence
requirements.
We are independent of the Group
in accordance with the Auditor-
General’s Auditing Standards, which
incorporate Professional and Ethical
Standard 1 International Code of
Ethics for Assurance Practitioners
issued by the New Zealand Auditing
and Assurance Standards Board, and
we have fulfilled our other ethical
responsibilities in accordance with
these requirements.
In addition, principals and employees
of our firm deal with the Group on
arm’s length terms within the ordinary
course of trading activities of the
Group. These services have not
impaired our independence as
auditor of the Group. Other than
these engagements and arm’s length
transactions, and in our capacity
as auditor acting on behalf of the
Auditor-General, we have no
relationship with, or interests in,
the Group.
Audit materiality
We consider materiality primarily
in terms of the magnitude of
misstatement in the consolidated
financial statements of the Group
that in our judgement would make it
probable that the economic decisions
of a reasonably knowledgeable person
would be changed or influenced (the
‘quantitative’ materiality). In addition,
we also assess whether other matters
that come to our attention during the
audit would in our judgement change
or influence the decisions of such a
person (the ‘qualitative’ materiality).
We use materiality both in planning
the scope of our audit work and in
evaluating the results of our work.
We determined materiality for the
Group consolidated financial
statements as a whole to be $15.1 million.
Key audit matters
Key audit matters are those matters
that, in our professional judgement,
were of most significance in our
audit of the consolidated financial
statements of the current period.
These matters were addressed
in the context of our audit of the
consolidated financial statements as
a whole, and in forming our opinion
thereon, and we do not provide a
separate opinion on these matters.
Independent auditor’s report
To the shareholders of Meridian Energy Limited
for the year ended 30 June 2020
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174
Key audit mattersHow our audit addressed the key audit matters
Valuation of Generation Structures and Plant
As explained in note B1 in the Group financial statements, generation structures and plant are
carried at fair value less any subsequent accumulated depreciation and impairment losses at
balance sheet date.
The net book value of generation structures and plant as reflected in note B1 is $8,345 million
(2019: $8,654 million).
The Group obtains an independent valuation every year to ensure that the carrying value does
not differ significantly from the fair value at balance date.
As a result of this independent valuation, generation structures and plant have been revalued
this year as at 30 June 2020. The revaluation resulted in a decrease in value by $78 million. The
impact of the revaluation is recognised as a decrease of $21 million in the revaluation reserve and
$57 million impairment in the income statement (2019: increase of $1,139 million in the revaluation
reserve and $5 million impairment in the income statement was recorded).
The valuation methodology determines an enterprise value range by considering an income
based valuation approach. This is with reference to a) capitalisation multiples as well as the
Group’s historical and forecasted future maintainable earnings before interest, tax, depreciation,
amortisation, changes in fair value of financial instruments, impairments, gains or losses on sale
of assets and joint venture equity accounted earnings (‘EBITDAF’), and b) a discounted cash flow
valuation. The inputs do not fully use observable market data and require significant judgement
and estimates to be made by the valuer. As outlined in note B1 the valuer has considered the impact
of COVID 19 on the valuation.
In addition, the Significant matters section on page 133 confirms the Group’s assessment that the
NZAS announcement to wind-down its operation at Tīwai Point has been treated as a non-adjustng
post balance date event. The Group has estimated the potential impacts of this closure to the
carrying value of the generation structures and plant as between $690 and $1,340 million. Our
focus was on the judgments and assumptions impacted by the change in market conditions.
We include valuation of generation structures as a key audit matter because of the inherent
technical and judgemental complexity associated with determining the fair value. Specifically,
the determination of the forecasted future maintainable earnings and earnings multiple, and the
forecast cash flows and discount rates.
Our audit procedures focused on:
• The reasonableness of the earnings multiple used and the adjustments for non observable
information considered relevant;
• The reasonableness of the forecasted future maintainable earnings;
• The reasonableness of the allocations of the enterprise value to business units/assets; and
• The impact of COVID 19 on the estimates used within the valuation;
• Whether we concurred with the Board’s assessment that the NZAS exit was a non-adjusting post
balance date event.
Our procedures included:
• Evaluating the Group’s processes for the independent valuation of the generation structures and
plant;
• Reviewing the valuation methodology and the reasonableness of the significant underlying
assumptions;
• Assessing the competence, objectivity and integrity of the independent registered valuer. We
assessed their professional qualifications and experience. We also obtained representation from
them regarding their independence and the scope of their work;
• Meeting with the valuer to understand the valuation process adopted to identify and challenge
the critical judgement areas in the valuation;
• Utilising our in-house valuation specialists to assess the appropriateness of the valuation
methodology and the reasonableness of the valuation range determined by the independent
valuer, including WACC rates, reasonableness of future maintainable earnings and
reasonableness of earnings multiples applied;
• Evaluating the adequacy of the Group’s disclosures in respect of the valuation of generation
structures and plant;
• Considering the definitions and criteria within NZ IAS 10: Events After the Reporting Period
to determine whether the NZAS exit was a non-adjusting post balance date event;
• Evaluating the adequacy of the disclosure of the NZAS exit, including the estimated effects on
the generation structures and plant carrying value; and
• Obtaining the Group’s revised generation structures and assets valuation to ensure the updated
forward electricity prices and revised future generation volumes used by Management were
within acceptable ranges and in line with the market conditions post balance date.
Valuation of Level 3 Electricity Derivatives
As explained in note D1, the Group’s activities expose it to commodity price, foreign exchange
and interest rate risks which are managed using derivative financial instruments. As outlined in
the note, the Board have considered the impact of COVID 19 on the various valuations.
These instruments are carried at their fair value as at 30 June 2020.
At 30 June 2020, level 3 electricity derivative assets totalled $77 million (2019: $121 million) and
level 3 electricity derivative liabilities were $65 million (2019: $58 million).
In addition, the Significant matters section on page 133 confirms the Group’s assessment that
the NZAS announcement to wind-down its operation at Tīwai Point has been treated as a non-
adjustng post balance date event. The Group has estimated the potential impacts of this closure
to the carrying value of the energy hedge liabilities as between $60 and $90 million.
We include valuation of level 3 electricity derivatives as a key audit matter for the following
reasons:
• The price used in the valuation of electricity hedges is based on the Group’s best estimate
of the long-term forward wholesale electricity price, which involves significant judgement
and estimates regarding discount factors, expected demand, cost of new supply, and other
relevant market factors; and
• The complexity and judgement involved in the valuation techniques and the judgement
involved in evaluating the long-term expected call volumes and discount factor used to
determine the fair value of electricity options and swaps.
Our audit procedures focused on:
• The appropriateness of the valuation techniques ;
• The reasonableness of the wholesale electricity price path;
• The reasonableness of the underlying assumptions and inputs in the valuation models;
• The impact of COVID 19 on the estimates used within the valuation; and
• Whether we concurred with the Boards assessment that the NZAS exit was a non-adjusting
post balance date event.
Our procedures included:
• In conjunction with our internal experts, evaluating the appropriateness of the methodology
applied in the valuation models for these electricity hedges, options and swaps and ensuring
that the methodology has been consistently applied with the prior year where appropriate;
• Challenging the key assumptions applied, including the long-term forward wholesale
electricity price, long-term expected call volumes, day one adjustments and discount rates;
• Agreeing underlying data to contract terms, specifically the contract term, price and volumes;
• Evaluating the adequacy of the Group’s disclosures in respect of the valuation of level 3
electricity derivatives;
• Considering the definitions and criteria within NZ IAS 10: Events After the Reporting Period
to determine whether the NZAS exit was a non-adjusting post balance date event;
• Evaluating the adequacy of the disclosure of the NZAS exit, including the estimated effects on
the energy hedge liabilities; and
• Obtaining the Group’s revised energy hedge liability models to ensure that the updated
forward electricity prices based on ASX prices from 31 July 2020 and revised assumptions
used by Management were within acceptable ranges and in line with the market conditions
post balance date.
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Independent auditor’s report

175
Other information
The Board of Directors is responsible
for the other information. The other
information comprises the information
included on pages 1 to 125, and 179
to 182, but does not include the
consolidated financial statements,
and our auditor’s report thereon.
Our opinion on the consolidated
financial statements does not cover
the other information and we do not
express any form of audit opinion or
assurance conclusion thereon.
In connection with our audit of the
consolidated financial statements,
our responsibility is to read the
other information and in doing so,
we consider whether the other
information is materially inconsistent
with the consolidated financial
statements or our knowledge obtained
in the audit, or otherwise appears to be
materially misstated. If, based on the
work we have performed, we conclude
that there is a material misstatement of
this other information, we are required
to report that fact. We have nothing to
report in this regard.
Directors’ responsibilities
for the consolidated
financial statements
The Directors are responsible
on behalf of the Group for the
preparation and fair presentation
of the consolidated financial
statements in accordance with
New Zealand Equivalents to
International Financial Reporting
Standards and International Financial
Reporting Standards and for such
internal control as the Directors
determine is necessary to enable the
preparation of consolidated financial
statements that are free from
material misstatement, whether
due to fraud or error.
In preparing the consolidated
financial statements, the Directors
are responsible on behalf of the
Group for assessing the Group’s
ability to continue as a going
concern, disclosing, as applicable,
matters related to going concern
and using the going concern basis
of accounting unless the Directors
either intend to liquidate the Group
or to cease operations, or have no
realistic alternative but to do so.
The Directors’ responsibilities arise
from the Financial Markets Conduct
Act 2013.
Auditor’s responsibilities for
the audit of the consolidated
financial statements
Our objectives are to obtain
reasonable assurance about whether
the consolidated financial statements,
as a whole, are free from material
misstatement, whether due to fraud
or error, and to issue an auditor’s
report that includes our opinion.
Reasonable assurance is a high level
of assurance, but is not a guarantee
that an audit carried out in accordance
with the Auditor-General’s Auditing
Standards will always detect a
material misstatement when it exists.
Misstatements can arise from fraud
or error and are considered material
if, individually or in the aggregate,
they could reasonably be expected
to influence the economic decisions
of shareholders taken on the basis
of these consolidated financial
statements.
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176
As part of an audit in accordance
with the Auditor-General’s Auditing
Standards, we exercise professional
judgement and maintain professional
scepticism throughout the audit.
We also:
• Identify and assess the risks of
material misstatement of the
consolidated financial statements,
whether due to fraud or error,
design and perform audit
procedures responsive to those
risks, and obtain audit evidence
that is sufficient and appropriate
to provide a basis for our opinion.
The risk of not detecting a material
misstatement resulting from fraud
is higher than for one resulting from
error, as fraud may involve collusion,
forgery, intentional omissions,
misrepresentations, or the override
of internal control.
• Obtain an understanding of internal
control relevant to the audit in order
to design audit procedures that are
appropriate in the circumstances,
but not for the purpose of
expressing an opinion on the
effectiveness of the Group’s
internal control.
• Evaluate the appropriateness of
accounting policies used and the
reasonableness of accounting
estimates and related disclosures
made by management.
• Conclude on the appropriateness
of the use of the going concern
basis of accounting by the directors
and, based on the audit evidence
obtained, whether a material
uncertainty exists related to
events or conditions that may cast
significant doubt on the Group’s
ability to continue as a going
concern. If we conclude that a
material uncertainty exists, we
are required to draw attention in
our auditor’s report to the related
disclosures in the consolidated
financial statements or, if such
disclosures are inadequate,
to modify our opinion. Our
conclusions are based on the audit
evidence obtained up to the date
of our auditor’s report. However,
future events or conditions may
cause the Group to cease to
continue as a going concern.
• Evaluate the overall presentation,
structure and content of the
consolidated financial statements,
including the disclosures, and
whether the consolidated
financial statements represent the
underlying transactions and events
in a manner that achieves fair
presentation.
• Obtain sufficient appropriate
audit evidence regarding the
financial information of the entities
or business activities within the
Group to express an opinion on the
consolidated financial statements.
We are responsible for the direction,
supervision and performance of
the group audit. We remain solely
responsible for our audit opinion.
We communicate with the Directors
regarding, among other matters, the
planned scope and timing of the audit
and significant audit findings, including
any significant deficiencies in internal
control that we identify during our
audit.
We also provide the Directors with
a statement that we have complied
with relevant ethical requirements
regarding independence, and
to communicate with them all
relationships and other matters that
may reasonably be thought to bear
on our independence, and where
applicable, related safeguards.
From the matters communicated with
the Directors, we determine those
matters that were of most significance
in the audit of the consolidated
financial statements of the current
period and are therefore the key audit
matters. We describe these matters
in our auditor’s report unless law or
regulation precludes public disclosure
about the matter or when, in extremely
rare circumstances, we determine that
a matter should not be communicated
in our report because the adverse
consequences of doing so would
reasonably be expected to outweigh
the public interest benefits of such
communication.
Our responsibilities arise from the
Public Audit Act 2001.

Mike Hoshek, Partner
for Deloitte Limited
On behalf of the Auditor-General
Christchurch, New Zealand
25 August 2020
176
Meridian Integrated Report 2020
Independent auditor’s report

Report on sustainability
content within the 2020
Integrated Report
Meridian Energy Limited’s
Integrated Report for the year
ended 30 June 2020 (the ‘Integrated
Report’) includes sustainability
content on pages 3–94, 123 and
179–183 (‘Sustainability Content’)
prepared in accordance with
the Global Reporting Initiative
Sustainability Reporting Standards
(the ‘GRI Standards’): Core option.
The subject of our limited assurance
engagement is the information
included on pages 3–94, 123 and
179–183 of the integrated report,
prepared in accordance with
Reporting Principles of the GRI
Standard 101 for defining report
content and report quality; and the
disclosures listed in the GRI index on
pages 179–182 prepared in accordance
with the GRI standards as referenced
in the GRI index on pages 179–182. Our
report does not cover forward looking
statements or online supplements.
Independent accountant’s assurance report
To the directors of Meridian Energy Limited
Conclusion
This conclusion has been formed
on the basis of, and is subject to,
the inherent limitations outlined
elsewhere in this independent
assurance report.
Based on the evidence obtained
from the procedures we have
performed, nothing has come to
our attention that causes us to
believe that:
• The Sustainability Content on
pages 3–94, 123 and 179–183 of
the Integrated report for the year
ended 30 June 2020, has not
been prepared, in all material
respects, in accordance with
the Reporting Principles of GRI
Standard 101 for Defining the Report
Content: materiality, stakeholder
inclusiveness, sustainability
context and completeness and for
Defining Report Quality: balance,
comparability, accuracy, timeliness,
clarity and reliability; and
• The disclosures listed on the GRI
index on pages 179–182 have not
been prepared, in all material
respects, in accordance with the
GRI Standards referenced in the
GRI index on pages 179–182.
Basis for Conclusion
Our engagement has been
conducted in accordance with
International Standard on Assurance
Engagements (New Zealand) 3000
(Revised): Assurance Engagements
Other than Audits or Reviews of
Historical Financial Information
(‘ISAE (NZ) 3000 (Revised)’) issued
by the New Zealand Auditing and
Assurance Standards Board.
We believe that the evidence
we have obtained is sufficient
and appropriate to provide a
basis for our conclusion.
Board of Directors’ Responsibility
The Board of Directors is
responsible for:
• ensuring that the Sustainability
Content is prepared in accordance
with the GRI Standards: Core option
and specifically those GRI Standards
set out in the GRI Index;
• determining Meridian Energy
Limited’s objectives in respect
of sustainability reporting;
• selecting the material topics; and
• establishing and maintaining
appropriate performance
management and internal control
systems in order to derive the
Sustainability Content.
Our Independence
and Quality Control
We have complied with the
independence and other ethical
requirements of Professional and
Ethical Standard 1 (Revised): Code
of Ethics for Assurance Practitioners
issued by the New Zealand Auditing
and Assurance Standards Board,
which is founded on fundamental
principles of integrity, objectivity,
professional competence and
due care, confidentiality and
professional behaviour.
Other than this engagement and
our role as auditor of the statutory
financial statements on behalf of
the Auditor-General, our firm
carries out other assignments for
the Meridian Energy Group in the
areas of greenhouse gas inventory
assurance, review of the interim
financial statements, audit of the
securities registers, vesting of the
executive long-term incentive plan,
the solvency return of Meridian
Captive Insurance Limited and
supervisory reporting, which
are compatible with those
independence requirements.
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In addition, principals and employees
of our firm deal with the Meridian
Energy Group on arm’s length terms
within the ordinary course of trading
activities of the Meridian Energy
Group. These services have not
impaired our independence for
the purposes of this engagement.
Other than these engagements and
arm’s length transactions, we have
no relationship with, or interests in,
the Meridian Energy Group.
The firm applies Professional and
Ethical Standard 3 (Amended):
Quality Control for Firms that
Perform Audits and Reviews of
Financial Statements, and Other
Assurance Engagements issued
by the New Zealand Auditing
and Assurance Standards Board,
and accordingly maintains a
comprehensive system of quality
control including documented
policies and procedures regarding
compliance with ethical requirements,
professional standards and applicable
legal and regulatory requirements.
Independent Accountant’s
Responsibility
Our responsibility is to conduct a
limited assurance engagement in
order to express an opinion whether,
based on the procedures performed,
anything has come to our attention
that causes us to believe that the
Sustainability Content has not been
prepared, in all material respects, in
accordance with the GRI Standards:
Core option.
We did not evaluate the security
and controls over the electronic
publication of the Integrated Report.
In a limited assurance engagement,
the assurance practitioner performs
procedures, primarily consisting
of discussion and enquiries of
management and others within the
entity, as appropriate, and observation
and walk-throughs, and evaluates the
evidence obtained. The procedures
selected depend on our judgement,
including identifying areas where the
risk of material non-compliance with
the GRI Standards is likely to arise.
Our procedures included:
• Obtaining an understanding of the
internal control environment, risk
assessment process and information
systems relevant to the sustainability
reporting process;
• A review of the materiality process
followed to determine the material
topics chosen for inclusion in the
Sustainability Content;
• Analytical review and other test
checks of the information presented;
• Checking whether the appropriate
indicators have been reported in
accordance with the GRI Standards:
Core option; and
• Evaluating whether the information
presented is consistent with our
overall knowledge and experience
of sustainability reporting processes
at Meridian Energy Limited.
The procedures performed in a
limited assurance engagement vary
in nature and timing from, and are
less in extent than for, a reasonable
assurance engagement. Consequently,
the level of assurance obtained in
a limited assurance engagement is
substantially lower than the assurance
that would have been obtained had
a reasonable assurance engagement
been performed. Accordingly, we do
not express a reasonable assurance
opinion about whether Meridian
Energy Limited’s Sustainability
Content has been prepared, in all
material respects, in accordance
with the GRI Standards: Core option.
Use of Report
Our assurance report is made solely
to the directors of Meridian Energy
Limited in accordance with the terms
of our engagement. Our work has
been undertaken so that we might
state to the directors those matters
we have been engaged to state
in this assurance 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 directors of Meridian
Energy Limited for our work, for
this assurance report, or for the
conclusions we have reached.
Chartered Accountants
25 August 2020
Auckland, New Zealand
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Meridian Integrated Report 2020
GRI Standards Content Index
This report has been prepared in accordance with the GRI Standards:
Core option. The specific GRI Standards reported against are in italics below.
GRI 101: Foundation 2016
General disclosuresPg #Comment
GRI 102: General Disclosures 2016
Organisational profile
102-1Name of organisationFront cover
102-2Activities, brands, products, and services10–11, 21
102-3Location of headquarters183
102-4Location of operations10–11
102-5Ownership and legal form9
102-6Markets served10–11
102-7Scale of the organisation10–11, 15, 73, 93
102-8Information on employees and other workers15, 123
102-9Supply chain21, 48
102-10Significant changes16
102-11Precautionary principle or approachRelevant legislation takes
a precautionaryprinciple-
based approach
102-12External initiativesClimate Leaders Coalition
102-13Memberships of associations123
EU1*Installed capacity73
EU2*Net energy output73
EU3*Number of customer accounts93
EU4*Transmission and distribution linesn/aLength insignificant
EU5*Allocation of CO2e emissions allowancesn/aNo emissions
allowances received
General disclosuresPg #Comment
Strategy
102-14Statement from senior decision-maker3–4, 24–31
Ethics and integrity
102-16Values, principles, standards,
and norms of behaviour
18, 31, 98Also see our
Code of Conduct
Governance
102-18Governance structure15–18
Stakeholder Engagements
102-40List of stakeholder groups12–13
102-41Collective bargaining agreements123
102-42Identifying and selecting stakeholders5-6Also see our Stakeholder
Engagement Guidelines
102-43Approach to stakeholder engagementDiscussed throughout the
report where relevant
102-44Key topics and concerns raised12–13
Reporting practice
102-45Entities included in the consolidated
financial statements
16, 132, 168
102-46Defining report content and topic Boundaries5, 10–11, 16
102-47List of material topics12–13
102-48Restatements of informationDiscussed throughout the
report where relevant
102-49Changes in reporting6
102-50Reporting period15
102-51Date of most recent report23 August 2019
102-52Reporting cycle15Annual
102-53Contact point for questions
regarding the report
18
102-54Claims of reporting in accordance
with the GRI Standards
16
102-55GRI content index179–182
102-56External assurance16
GRI Standards Content Index
*Disclosures starting with “EU” are from the Electric Utilities G4 Sector Disclosure.

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GRI Standards Content Index
Material topics and associated disclosuresPg #Comment
Economic
Financial performance**
GRI 103: Management Approach 2016*83–85
Non-GRI**Various financial measures83–85
Financial impacts of hydrology**
GRI 103: Management Approach 201646, 84
Non-GRI**Financial implications of variability in hydrology46, 84
Financial impacts of climate change
GRI 103: Management Approach 201645–46
See also Taskforce for
Climate-related Financial
Disclosures (TCFD) Report
GRI 201: Economic Performance 2016
201-2Financial implications and other risks and
opportunities due to climate change
45–46
Pipeline of generation options**
GRI 103: Management Approach 201688–90
EU10***Planned capacity against demand**88–90
Environmental
Action on climate change**
GRI 103: Management Approach 20163, 28, 43–57
Non-GRI**Proportion of Meridian Group generation
from renewable resources
45
Non-GRI**Support for customers’ climate actions51–55
Non-GRI**Funds raised for community energy
projects in Australia
54
Non-GRI**Support for our people’s climate actions50
Non-GRI**Operational emissions reduction target47
Material topics and associated disclosuresPg #Comment
Operational carbon emissions
GRI 103: Management Approach 201646–49
GRI 305: Emissions 2016
305-1Direct (Scope 1) GHG emissions47–48
See also Meridian GHG
Inventory Report FY20
305-2Energy indirect (Scope 2) GHG emissions47–48
305-3Other indirect (Scope 3) GHG emissions47–48
Impact on water
GRI 103: Management Approach 201680–81
GRI 303: Water and Effluents 2018
303-1Interactions with water as a shared resource77–81
303-2Management of water
discharge-related impacts
77–81
303-3Water withdrawal81
303-4Water discharge81
303-5Water consumption81
Impact on biodiversity
GRI 103: Management Approach 201680–82
GRI 304: Biodiversity 2016
304-2Significant impacts of activities,
products, and services on biodiversity
80–82
Environmental compliance
GRI 103: Management Approach 201681
GRI 307: Environmental Compliance 2016
307-1Non-compliance with environmental
laws and regulations
81
* Each Disclosure of Management Approach (DMA) includes “103-1 Explanation of the material topic and
its Boundaries”, “103-2 The management approach and its components”, and “103-3 Evaluation of the
management approach”, in accordance with GRI 103: Management Approach 2016
** Non-GRI - some material topics and disclosures listed above are additional or alternatives to those
covered in the GRI Standards.
*** Disclosures starting with “EU” are from the Electric Utilities G4 Sector Disclosure.

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Material topics and associated disclosuresPg #Comment
Social
Employee engagement**
GRI 103: Management Approach 2016*28, 62, 63
Non-GRI**Employee engagement surveys63
Occupational health and safety
GRI 103: Management Approach 201669–71
GRI 403: Occupational Health and Safety 2018
403-1Occupational health and safety
management system
69–71
403-2Hazard identification, risk assessment,
and incident investigation
29, 69–7 1
403-3Occupational health services69–71
403-4Worker participation, consultation,
and communication on occupational
health and safety
69–71
403-5Worker training on occupational
health and safety
69–71
403-6Promotion of worker health64, 69–71
403-7Prevention and mitigation of occupational
health and safety impacts directly linked
by business relationships
69–71
403-8Workers covered by an occupational
health and safety management system
69–71The OHS System is not
internally nor externally
audited, however Meridian
adheres to OSHA standards
and guidelines, as well as
adhering to NZS 7901:2014
Electricity and Gas Industries
– Safety management
systems for public safety.
403-9Work-related injuries69, 70
Non-GRI**Total recordable injury frequency rate (TRIFR)70
Material topics and associated disclosuresPg #Comment
Diversity and equal opportunity
GRI 103: Management Approach 201664-67
GRI 405: Diversity and Equal Opportunity 2016
405-1Diversity of governance bodies
and employees
65, 67
405-2Ratio of basic salary and
remuneration of women to men
66
Non-GRI**Women in people leadership
and senior specialist positions
65
Retaining expertise**
GRI 103: Management Approach 201667–68
EU15***Tenure by age67
Access to water**
GRI 103: Management Approach 201676–79
Non-GRI**Strength of relationships with
stakeholders interested in water
76–79Includes central government,
local government, Ngāi
Tahu and other iwi, local
community groups and the
general public
Contribution to local communities
GRI 103: Management Approach 201679
GRI 413: Local Communities 2016
413-1Operations with local community
engagement, impact assessments,
and development programs
26, 57, 58,
79, 94
13 out of our 17 power
stations have local
community engagement
programmes (Mt Millar
and our Australian power
stations don’t) – 95% by
MW capacity
Non-GRI**Contribution to local communities
in New Zealand
79
Non-GRI**Number of community fund grants
in New Zealand
79
* Each Disclosure of Management Approach (DMA) includes “103-1 Explanation of the material topic and
its Boundaries”, “103-2 The management approach and its components”, and “103-3 Evaluation of the
management approach”, in accordance with GRI 103: Management Approach 2016
** Non-GRI - some material topics and disclosures listed above are additional or alternatives to those
covered in the GRI Standards.
*** Disclosures starting with “EU” are from the Electric Utilities G4 Sector Disclosure.

182
Meridian Integrated Report 2020
GRI Standards Content Index
Material topics and associated disclosuresPg #Comment
Contribution to public policy
GRI 103: Management Approach 2016*37–44
GRI 415: Public Policy 2016
415-1Political contributions113Meridian does not donate
to any political parties
(as specified in our Code
of Conduct)
Non-GRI**Expenditure on “lobbying” organisations
such as trade associations
123
Non-GRI**Key regulatory issues37–44
Customer satisfaction**
GRI 103: Management Approach 201693–94
Non-GRI**Level of customer satisfaction93–94
Non-GRI**Customer retention rates92
Electricity pricing**
GRI 103: Management Approach 2016
23, 33–36,
40
Non-GRI**Price of electricity in AU and NZ
compared to other OECD countries
40
* Each Disclosure of Management Approach (DMA) includes “103-1 Explanation of the material topic and
its Boundaries”, “103-2 The management approach and its components”, and “103-3 Evaluation of the
management approach”, in accordance with GRI 103: Management Approach 2016
** Non-GRI - some material topics and disclosures listed above are additional or alternatives to those
covered in the GRI Standards.
*** Disclosures starting with “EU” are from the Electric Utilities G4 Sector Disclosure.
Material topics and associated disclosuresPg #Comment
Support for vulnerable customers
GRI 103: Management Approach 201640, 56–59
EU27***Disconnections59
Plant performance**
GRI 103: Management Approach 201672–74
EU30***Plant availability factor74
Process safety**
GRI 103: Management Approach 20167 1–74
Non-GRI**Actions to improve process safety7 1–74
Dam safety**
GRI 103: Management Approach 201674
Non-GRI**Actions to improve dam safety74
Information security**
GRI 103: Management Approach 201675
Non-GRI**Actions to improve information security75

Registered office
Meridian Energy Limited
55 Lady Elizabeth Lane
Wellington Central
Wellington 6011
New Zealand
PO Box 10840
The Terrace
Wellington 6143
New Zealand
T +64 4 381 1200
F +64 4 381 1201
Offices
Quad 7, Level 2
6 Leonard Isitt Drive
Auckland Airport
Auckland 2022
New Zealand
PO Box 107174
Auckland Airport
Auckland 2150
New Zealand
T +64 9 477 7800
287-293 Durham Street North
Christchurch Central
Christchurch 8013
New Zealand
PO Box 2146
Christchurch 8140
New Zealand
T +64 3 357 9700
Corner of Market Place
and Mackenzie Drive
Twizel 7901
New Zealand
Private Bag 950
Twizel 7944
New Zealand
T +64 3 435 9393
Australian registered office
Meridian Energy
Australia Pty Limited
Level 15
357 Collins Street
Melbourne VIC 3000
Australia
T +61 3 8370 2100
F +61 3 9620 5235
Flux Federation offices
22 Pollen Street
Grey Lynn
Auckland 1021l
New Zealand
T +64 4 389 0859
9th Floor, Quayside Tower
252-260 Broad Street
Birmingham B1 2HF
United Kingdom
Powershop
55 Lady Elizabeth Lane
Wellington Central
Wellington 6011
New Zealand
PO Box 7651
Newtown
Wellington 6242
New Zealand
427 Queen Street
Masterton 5810
PO Box 392
Masterton 5810
T +64 0800 1000 60
Share Registrar New Zealand
Computershare
Investor Services Limited
Level 2
159 Hurstmere Road
Takapuna
Auckland 0622
New Zealand
Private Bag 92119
Victoria Street West
Auckland 1142
New Zealand
T +64 9 488 8777
F +64 9 488 8787
enquiry@computershare.co.nz
investorcentre.com/nz
Share Registrar Australia
Computershare
Investor Services Pty Limited
Yarra Falls
452 Johnston Street
Abbotsford
VIC 3037
Australia
GPO Box 3329
Melbourne VIC 3001
Australia
T 1800 501 366 (within Australia)
T +61 3 9415 4083 (outside Australia)
F +61 3 9473 2500
enquiry@computershare.co.nz
Auditor
Mike Hoshek, Partner
Financial audit on behalf of
the Office of the Auditor-General
Brett Tomkins
GRI Standards limited assurance
Deloitte Limited
PO Box 1990
Wellington 6140
New Zealand
Banker
Westpac Wellington
New Zealand
Directors
Mark Verbiest, Chair
Peter Wilson, Deputy Chair
Mark Cairns
Jan Dawson
Anake Goodall
Michelle Henderson
Julia Hoare
Nagaja Sanatkumar
Executive Team
Neal Barclay, Chief Executive
Chris Ewers
Lisa Hannifan
Nic Kennedy
Tania Palmer
Mike Roan
Claire Shaw
Jason Stein
Guy Waipara
Jason Woolley
If you have any questions
or comments, please email
investors@meridianenergy.co.nz or
service@meridianenergy.co.nz
Directory

Meridian.co.nz

Integrated Report
for the year ended
30 June 2020.
ISSN 1173-6275 (print)
ISSN 1173-6305 (online)

---

2020 Annual Results Presentation
26 AUGUST 2020

26 AUGUST 20202020 ANNUAL RESULTS PRESENTATION
2
Highlights
customer support
during COVID
2% EBITDAF
1
growth
strong customer
retention rate
record NZ
generation
15% Australasian
customer growth
18% New Zealand
sales growth
response to NZAS
exit established
carbon neutral
24% Australian sales
growth
1
Earnings before interest, tax, depreciation, amortisation, changes in fair value
of hedges, impairments and gains or losses on sale of assets

46%
34%
96%
85%
45%
35%
97%
77%
0%
30%
60%
90%
120%
Women in the
business
Women in senior
roles
Gender pay
equity
Engagement
Workforce measures
FY20FY19
3
Our people
8 LTI injuries (3 serious) in FY20, same number as
FY19
Strong staff engagement
96% gender pay equity
Signatory to the Aotearoa New Zealand Skills
Pledge –reskilling through training investment
Source: Meridian
26 AUGUST 20202020 ANNUAL RESULTS PRESENTATION

26 AUGUST 20202020 ANNUAL RESULTS PRESENTATION
4
Our strategy
Strategic
initiative
Highlights
Challenges
Champion
Competitive markets
Sustainability
Climate action
Optimise
Trading & asset management
Re-consenting
Financing
Grow
Retail
Generation
Flux
Sustainability leadership
Lower real customer prices
Positive outcomes on water
and emissions trading reforms
Final TPM decision
Improved plant availability
2025 Waitaki reconsent
progress
NZAS exit mitigations
Green financing
Standout growth in NZ and
Ausretail businesses
Customer retention
Customer support during
COVID
Gas supply uncertainty
Speed of RMA reform and
generation consenting
Uncertainty on NZAS exit timing
and future market changes
Preliminary UTS decision
COVID impacts and future
demand uncertainty
Lower wholesale prices
Complexity in Meridian migration
to Flux

47,279
44,359
0
10,000
20,000
30,000
40,000
50,000
201920202021202220232024202520262027202820292030
tCO2e
Financial Year ended 30 June
2030 emissions target
actualtarget
5
Our sustainability leadership
Net Zero Carbon across group emissions
Aiming to halve emissions by 2030
Forever Forests: 1.5 million trees in 5 years
100% electric fleet by 2025
Climate risk and carbon disclosure reporting
Green finance framework introduced
Certificated renewable energy product introduced
Lake Pūkakilow range operation
Advocacy for electrification ahead of 100%
renewable generation in New Zealand
Carbon neutral gas in Victoria
Champion
26 AUGUST 20202020 ANNUAL RESULTS PRESENTATION
Source: Meridian

6
Outcomes for Kiwis
Residential energy unit costs (excluding lines) at
their lowest level in 10 years (after inflation)
Residential electricity unit costs (including lines) at
their lowest level in 8 years (after inflation)
Meridian disconnections at <0.1%, half the industry
average
COVID-19 support for customers with payment
solutions, no disconnections, suspension of late
payment fees
Higher level of debt provision ($16m in FY20, up
$11m from FY19)
$1m donation to KidsCan
Suppliers being paid on 7-day terms
Working from home allowances for non-senior staff
Champion
26 AUGUST 20202020 ANNUAL RESULTS PRESENTATION
-2.6%
+1.1%
-0.6%
+1.7%
+1.4%
-0.5%
+3.5%
+2.8%
-1.3%
-1.6%
-1.7%
+2.1%
+0.9%
+0.4%
+0.1%
-5%
-4%
-3%
-2%
-1%
0%
1%
2%
3%
4%
5%
6%
Mar-16Mar-17Mar-18Mar-19Mar-20
%
AVERAGE RESIDENTIAL ELECTRICITY COST
1
Energy & other componentLines componentTotal
Source: Ministry of Business, Innovation & Employment
1
Annual real residential cost per unit based on Statistics New Zealand Consumer Price Index

12,663
9,701
2,608
14,767
641
0
4,000
8,000
12,000
16,000
ResidentialCommercialAgriculture/
Forestry/
Fishing
IndustrialOther
GWh
Annual national consumption (to March 20)
7
New Zealand demand
Underlying demand decline of 0.3% in FY20
Includes a 14% decline in April 2020 from Alert
Level 4 lockdown
And suspension of 4
th
Tiwai potline during Q4
FY20
Pre-COVID 19 growth in commercial and
agricultural sectors, outlook is uncertain
-0.3%
+1.5%
+10.8%
+0.3%
+0.0%
Annual change
Source: Ministry of Business, Innovation and Employment
Source: Electricity Authority
26 AUGUST 20202020 ANNUAL RESULTS PRESENTATION
Champion
2,600
2,800
3,000
3,200
3,400
3,600
3,800
4,000
JanFebMarAprMayJunJulAugSepOctNovDec
GWh
NATIONAL DEMAND
Range (2009-2019)201520162017201820192020

93
65
39
0
20
40
60
80
100
FY20 actualstatus quo
[RCP3] (FY21)
new TPM
(FY24)
$M
Meridian's annual HVDC costs
TPM
EA published final decision in June 2020
Replaces current HVDC charge with benefit–based
and residual charges
New TPM expected to be in place by April 2023 with
transitional cap on charges
Is the subject of legal appeal
UTS
Meridian does not agree with EA’s preliminary
decision
$5m provision taken, reducing NZ energy margin
Spot market outcomes during December 2019 floods
were not unusual
Avoidable spill and customer impacts were negligible
8
New Zealand policy and regulation
Meridian actual
EA estimate
EA estimate
Source: Electricity Authority, Meridian
Note: EA’s estimates based on NZAS as an industrial electricity consumer
26 AUGUST 20202020 ANNUAL RESULTS PRESENTATION
Champion

9
New Zealand policy and regulation
Emissions trading scheme
Climate Change Response Bill passed
Cap on emissions with 5 yearly carbon budgets
A cost containment system to replace the $25 price, set at $25 for
2020, lifting to $50 in 2021, with a $20 price floor
NZU’s currently trading at ~$33
Phase-down of free allocation from 2021
Inclusion of agricultural emissions from 2025
Water reform
Action for healthy waterways sets out a new national direction for
freshwater management
5 large hydro schemes (including Meridian’s) are exempt from
changes to meet water quality standards
Output and flexibility of these schemes to be recognised and
maintained in future planning
26 AUGUST 20202020 ANNUAL RESULTS PRESENTATION
Champion

10
Portfolio response to NZAS exit
Expecting smelter closure on 31 August 2021
Ordinary dividend policy maintained at 75%-90% of free cash
flow (FY20 dividend at 75%)
Capital management programme ended
Completion by Transpower of Clutha Upper Waitaki Lines
Project by May 2022 or earlier
North Island battery location under investigation
Harapakiwindfarm decision deferred
Existing swaption likely to be terminated and renewal process
abandoned
Wholesale bilateral contract negotiations at different stages
Continuation of retail growth
Exploring new lower South Island demand sources
Asset management refocus with significant Waitaki works
prioritised ahead of Manapōuri
26 AUGUST 20202020 ANNUAL RESULTS PRESENTATION
Optimise

11
Lake Pūkaki low range operation
Lake Pūkaki is consented to be used
down to 513.0m
Usage below 518.0m is tied to the
System Operator’s Electricity Risk
Curves (ERC)
Meridian has previously only planned
to operate the lake down to 516.4m
Latest engineering review shows
operations can be extended down to
513.0m
This requires additional foreshore
erosion protection (~$15m of capex)
and modifications to canal protection
systems
Greater flexibility between Waitaki
and Waiaucatchments
26 AUGUST 20202020 ANNUAL RESULTS PRESENTATION
Optimise
Lake Pūkaki operating range schematic
532.5mtop of consented operating range
518.0mElectricity Risk Curves apply
516.4mprevious operational floor
515.0m
513.0m
bottom of consented range
Official
Conservation
Campaign
178GWh
367GWh
1,767GWh

12
New Zealand customers
Customer number and sales volume growth across
all segments
7% to 8% sales growth in residential and small
medium business, stable average sales prices
30% higher corporate sales volume at higher
prices
Corporate sales prices easing as wholesale forward
prices have reduced
Retention rates improving and cost to serve per
customer continuing to fall
CustomersalesAverage price
($/ MWh)
Total sales
volume (GWh)
North Island
sales volume
(GWh)
South Island
sales volume
(GWh)
FY20
Residential1,547825722
Small medium business1,046602444
Agricultural1,265333932
Large business484313171
Total mass market$1154,3422,0742,268
Corporate$983,0342,125909
FY19
Residential1,431750681
Small medium business975552423
Agricultural1,055277778
Large business441290151
Total mass market$1143,9021,8692,033
Corporate$892,3381,684644
26 AUGUST 20202020 ANNUAL RESULTS PRESENTATION
Grow
Retail cost to serveFY18FY19FY20
Retail costs excl. metering$68M$66M$66M
Other segment cost allocation$15M$16M$19M
Year end customer numbers290,756302,277324,253
Cost to serve per customer$287$271$260

0
3,000
6,000
9,000
12,000
15,000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
GWh
Financial Year ended 30 June
New Zealand generation
HydroWind
13
New Zealand generation
Record wind and hydro generation with higher
wind farm availability and inflows 115% above
average
Despite major outages on the HVDC between
January and April 2020 for reconductoring and
replacement works
Average generation price 28% lower than FY19
ASX curve suggests lower future prices
Source: Meridian
26 AUGUST 20202020 ANNUAL RESULTS PRESENTATION
Grow
0
20
40
60
80
100
120
Q3
2019
Q4
2019
Q1
2020
Q2
2020
Q3
2020
Q4
2020
Q1
2021
Q2
2021
Q3
2021
Q4
2021
Q1
2022
Q2
2022
Q3
2022
Q4
2022
Q1
2023
Q2
2023
Q3
2023
Q4
2023
$/MWh
BENMORE ASX FUTURES SETTLEMENT PRICE
31 July 2020FY20 actual

-500
500
1,500
2,500
3,500
4,500
5,500
Jul-18Oct-18Jan-19Apr-19Jul-19Oct-19Jan-20Apr-20
Powershop Australia net customer changes
electricitygas
14
Australian customers
24% growth in both electricity sales volume and
customers during FY20
310% increase in gas sales volumes from a 68%
increase in gas customers
Despite acquisition rates being impacted in Q4 by
COVID-19
Average sales prices for gas and electricity were
both lower in FY20, reflecting movements in
wholesale costs
PowershopAustralia winner of Roy Morgan’s Most
Satisfied Customers award for electricity
Source: Meridian
26 AUGUST 20202020 ANNUAL RESULTS PRESENTATION
Grow

389
139
106
7
367
363
162
179
24
225
0
50
100
150
200
250
300
350
400
450
Mt MercerMt MillarHumeBurrinjuckPPA's
GWh
Australian generation
FY20FY19
15
Australian generation
NSW drought conditions persisted during FY20,
impacting hydro generation
Hydro storage is improving, now above 50% and
close to seasonal average
Repairs and upgrades reduced availability at Mt
Millar during FY20
Asset maintenance costs impacted by Senvion
liquidation
367GWh of PPA offtake in FY20
Feasibility phase completed on 130MW Rangoon
wind and battery facility in NSW
Source: Meridian
26 AUGUST 20202020 ANNUAL RESULTS PRESENTATION
Grow

16
Flux
Now supports 513,000 customers across 3
geographies
88,000 Meridian customers migrated from legacy
systems at end of June 2020
Original Meridian migration project timeline has
been extended 9 months to September 2021
Allows for development of further functionality,
particularly to support large, complex customer
migration
Benefits remain positive from having a single
customer facing platform
Uncertainty about Flux’s UK relationship with
npower as E.ON and Kraken Technologies, (part of
Octopus Energy Group), have entered a strategic
agreement
26 AUGUST 20202020 ANNUAL RESULTS PRESENTATION
Grow

17
Financial performance
26 AUGUST 20202020 ANNUAL RESULTS PRESENTATION

854
838
+14
+4
+2
+8
-12
500
600
700
800
900
EBITDAF 30 Jun 19NZ energy marginAus energy marginOther revenueTransmission
expenses
Operating expensesEBITDAF 30 Jun 20
$M
Group EBITDAF movement
18
EBITDAF
FY20 EBITDAF +2% on FY19
$6M benefit from adoption of IRFS 16
Strong retail performance in New Zealand and
Australia
Lower wholesale prices and HVDC outages slowed
EBITDAF in 2H FY20
Lower New Zealand transmission charges with the
new regulatory control period
A number of one-off items in operating costs
Source: Meridian
26 AUGUST 20202020 ANNUAL RESULTS PRESENTATION
452
470
427
635
605
0
200
400
600
800
20162017201820192020
$M
Financial Year ended 30 June
Cash flow from operating activities

13.50
14.03
14.32
16.42
16.90
4.88
4.88
4.88
4.88
2.44
0
5
10
15
20
25
20162017201820192020
CPS
Financial Year ended 30 June
Dividends declared
Ordinary dividendsSpecial dividends
19
Dividends
Final ordinary dividend declared of 11.20 cps, 86%
imputed
Brings FY20 full year ordinary dividend declared to
16.90 cps, 86% imputed
Represents 75% payout of free cash flow
FY20 full year ordinary dividend +3% on FY19
Capital management programmeceased in July
2020, following NZAS contract termination notice
Total FY20 dividend of 19.34 cps -9% on FY19
DividendsdeclaredFY20FY19
cents per shareimputationcents per shareimputation
Ordinary dividends16.9086%16.4286%
Capitalmanagement special dividends2.440%4.880%
To t a l19.3421.30
21.30
Total
19.20
18.91
18.38
Source: Meridian
26 AUGUST 20202020 ANNUAL RESULTS PRESENTATION
19.34

Customer and sales volume growth across all
segments drove energy margin growth
Upward price pressure in corporate and stable
mass market pricing supported higher sales
Generation length from 1H FY20 moderated in Q3
with the HVDC outage
UTS preliminary decision provided for: generation
revenue -$33M, cost to supply customers -$28M
Financial contract, spot generation and hedging
revenues all reflected lower wholesale prices
Those lower prices also reduced costs in the
portfolio, however higher hedging volumes were
needed to manage the HVDC outage
1,122
1,108
+54
+88
+9
-406
+331
-17
-43
-2
0
700
900
1,100
1,300
1,500
Energy
Margin 30
Jun 19
Res, SMB,
Agi sales
C&I salesNZAS salesGeneration
spot revenue
Cost to
supply
customers
Derivative
sales and
purchases
Cost of
derivative
sales and
purchases
Net VASOtherEnergy
Margin 30
Jun 20
$M
New Zealand energy margin movement
20
New Zealand energy margin
Refer to page 40 for a further breakdown of New Zealand energy margin
Source: Meridian
Physical
+$76M
Financial
-$62M
26 AUGUST 20202020 ANNUAL RESULTS PRESENTATION

122
118
+13
+16
-24
-10
-17
+26
0
20
40
60
80
100
120
140
160
Energy Margin 30
Jun 19
Electricity salesGas salesGeneration spot
revenue
Cost to supply
customers
Derivative sales
and purchases
Cost of derivative
sales and
purchases
Energy Margin 30
Jun 20
$NZ M
Australian energy margin movement
21
Australian energy margin
Electricity and gas sales have lifted physical margin
Residential price pressure reflecting significantly
lower wholesale market costs
Drought conditions and wind farm availability
impacted total generation, 12% lower than FY19
Significantly lower wholesale prices in 2H FY20
impacted generation revenue
And improved the net financial position, which
also saw a positive outcome on LGC hedging
Physical
-$5M
Financial
+$9M
Refer to page 41 for a further breakdown of Australian energy margin
Source: Meridian
26 AUGUST 20202020 ANNUAL RESULTS PRESENTATION

243
258
249
-6+6
+3
+2
+1
+1
+1
+1
230
240
250
260
270
FY19 reportedIFRS 16
impacts
FY19 adjustedHolidays Act
remediation
NZ asset
maintenance
Aus asset
maintenance
InsuranceLow annual
leave/WFH
KidsCan
donation
Flux/0therFY20 reported
$M
FY19 to FY20 opex movement
22
Operating costs
$6M reduction in FY20 operating costs from IFRS 16
Like for like operating cost increase of $15M (6%)
$6M provision taken on Holidays Act payroll
remediation (previously a contingent liability)
Low levels of annual leave taken since COVID-19
Asset maintenance costs impacted by Senvion
liquidation
$1m donation to KidsCan
Expecting FY21 Group operating costs
1
of between
$261M and $266M
1
Source: Meridian
1
Electricity metering expenses are being reclassified into Gross Margin from FY21
26 AUGUST 20202020 ANNUAL RESULTS PRESENTATION
Operating costs pro formaFY19
reported
FY19
IFRS 16
FY20
reported
FY21
estimate
1
Employee & other operating costs$249M$243M$258M$261M-
$266M
Electricity metering expenses$33M$33M$36MGross
margin
Total operating costs$282M$276M$294M

233
221
206
333
317
0
100
200
300
400
20162017201820192020
$M
Financial Year ended 30 June
Underlying net profit after tax
23
Below EBITDAF
1
Net profit before tax
2
Net profit before tax adjusted for the effects of changes in fair value of hedges and other non-cash items
A reconciliation of NPAT to Underlying NPAT is on page 45
13% increase in depreciation from June 2019
revaluation (+$1B)
Immaterial June 2020 devaluation
$58M impairments, mainly Australian generation
assets
$113M decrease in NPBT
1
from fair value of
electricity hedges from lower forward electricity
prices ($58M increase in FY19)
$48M decrease in NPBT from fair value of treasury
instruments from changing forward interest rates
($63M decrease in FY19)
FY20 decrease in net profit after tax (-48%) and
Underlying NPAT
2
(-5%)
Potential FY21 NZAS exit devaluation of $690M-
$1,340M
26 AUGUST 20202020 ANNUAL RESULTS PRESENTATION
185
200
203
339
176
0
100
200
300
400
20162017201820192020
$M
Financial Year ended 30 June
Net profit after tax
Source: Meridian
Source: Meridian

50
48
47
48
45
7
188
16
19
0
50
100
150
200
250
20162017201820192020
$M
Financial Year ended 30 June
Capital expenditure
Stay in businessInvestment
24
Capital expenditure
Consistent level of stay in business capex
Largely consists of system and generation asset
enhancement spend
Currently expecting FY21 Group capex of between
$70M and $80M
$50M to $55M of stay in business capex
$20M to $25M of currently approved
investment spend
64
To t a l
235
55
50
Source: Meridian
26 AUGUST 20202020 ANNUAL RESULTS PRESENTATION
64

10
261
160
285
210
565
75
196
50
0
100
200
300
400
500
600
FY21FY22FY23FY24FY25FY26+
$M
Financial Year ended 30 June
Debt maturity profile as at 30 June 2020
Drawn debt maturing (face value)Available facilities maturing
32%
3%
26%
3%
32%
4%
Sources of Funding -30 June 2020
NZ$ bank facilities
drawn/undrawn
EKF - Danish export credit
Retail Bonds
Floating rate notes
US private placement
Commercial paper
25
Debt and funding
June 2020 total borrowings of $1,688M
Total funding facilities of $1,891M, of which
$400M were undrawn
Net debt of $1,513M, up 4% from FY19
Net debt to EBITDAF at 1.8x (FY19: 1.7x)
Green finance framework developed
Source: Meridian
Source: Meridian
26 AUGUST 20202020 ANNUAL RESULTS PRESENTATION

26
Closing comments
Timing of NZAS exit to be determined
Portfolio response to NZAS exit is well established
Lasting impacts from COVID-19 are unclear
Fundamentals of the sector remain strong
Momentum in both Meridian’s retail businesses is
strong
Solid July 2020 operating result
26 AUGUST 20202020 ANNUAL RESULTS PRESENTATION

27
Additional information
26 AUGUST 20202020 ANNUAL RESULTS PRESENTATION

28
Segment results
Flux Federation and PowershopUK included in ‘other and unallocated’ segment
26 AUGUST 20202020 ANNUAL RESULTS PRESENTATION

29
Six monthly results
26 AUGUST 20202020 ANNUAL RESULTS PRESENTATION

3,781
3,710
3,823
3,902
4,342
2,188
2,017
2,158
2,338
3,034
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
20162017201820192020
GWh
Financial Year ended 30 June
New Zealand retail sales volumes
Residential, SMB, AgriCorporate
102
103
106
109
115
117
115
119
119
120
56
59
66
74
89
0
50
100
150
200
250
300
350
Jun-16Jun-17Jun-18Jun-19Jun-20
ICP (000)
Financial Year ended 30 June
New Zealand customer connections
Meridian North IslandMeridian South IslandPowershop
30
New Zealand retail
Customers
7% increase in customers since June 2019
Residential, business, agrisegment
8% increase in residential volumes
7% increase in small business volumes
11% increase in large business volumes
20% increase in agri volumes
1% increase in average sales price
Corporate segment
30% increase in volumes
9% increase in average sales price
Total
275
277
291
302
Total
5,969
5,727
5,981
6,240
26 AUGUST 20202020 ANNUAL RESULTS PRESENTATION
324
7,376

31
New Zealand hydrology
Inflows
FY20 inflows were 115% of average
July 2020 inflows were 108% of average
Storage
Meridian’s Waitaki storage at 30 June 2020 was
73% of average
By 31 July 2020, this position was 64% of average
26 AUGUST 20202020 ANNUAL RESULTS PRESENTATION
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
200620072008200920102011201220132014201520162017201820192020
GWh
Financial
year
Meridian's combined catchment inflows
June YTD86 year average
0
500
1,000
1,500
2,000
2,500
3,000
1-Jan1-Feb1-Mar1-Apr1-May1-Jun1-Jul1-Aug1-Sep1-Oct1-Nov1-Dec
GWh
Meridian's Waitaki storage
Average 1979-201520162017201820192020

12,251
11,974
11,265
12,326
12,758
1,456
1,341
1,263
1,244
1,465
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
20162017201820192020
GWh
Financial Year ended 30 June
New Zealand generation
HydroWind
32
New Zealand generation
Volume
FY20 generation was 5% higher than FY19, with
higher hydro and wind generation
Price
FY20 average price Meridian received for its
generation was 28% lower than FY19
FY20 average price Meridian paid to supply
customers was 28% lower than FY19
26 AUGUST 20202020 ANNUAL RESULTS PRESENTATION
57
51
83
123
89
0
20
40
60
80
100
120
140
20162017201820192020
$/MWh
Financial Year ended 30 June
NZ average generation price

33
Australian retail
Customers
24% growth in electricity customers since June
2019
37,878 gas customers by June 2020
Sales volume
24% growth in electricity sales volume in FY20
1,491TJ in gas sales in FY20
26 AUGUST 20202020 ANNUAL RESULTS PRESENTATION
78
97
97
110
136
23
38
0
50
100
150
200
20162017201820192020
Financial Year ended 30 June
Australian customer connections
ElectricityGas
345
493
549
553
683
0
100
200
300
400
500
600
700
800
20162017201820192020
GWh
Financial Year ended 30 June
Australian retail sales volume

34
Australian generation
Volume
FY20 generation was 12% lower than FY19
Higher wind and lower hydro generation
367GWh of PPA offtake in FY20
26 AUGUST 20202020 ANNUAL RESULTS PRESENTATION
106
96
110
156
138
0
20
40
60
80
100
120
140
160
180
20162017201820192020
$/MWh
Financial Year ended 30 June
Australian average wind generation price
519
510
553
525
528
28
203
113
0
100
200
300
400
500
600
700
800
20162017201820192020
GWh
Financial Year ended 30 June
Australian generation
WindHydro

854
838
+142
+7
-406
+388
-115
-2
0
+4
+2
+8
-12
500
600
700
800
900
1,000
1,100
EBITDAF 30 Jun
2019
Retail contracted
sales
Wholesale
contracted sales
Generation spot
revenue
Cost to supply
customers
Net cost of hedgesVirtual asset swapsOther market costsAustralian energy
margin
Other revenueTransmission
expenses
Employee & other
operating expenses
EBITDAF 30 Jun
2020
$M
Movement in EBITDAF
35
FY20 EBITDAF
New Zealand energy margin +$14M
26 AUGUST 20202020 ANNUAL RESULTS PRESENTATION

36
EBITDAF to NPAT
26 AUGUST 20202020 ANNUAL RESULTS PRESENTATION
317
176
854
-312
-20
-84
-121
-161
-58
+20
+58
0
100
200
300
400
500
600
700
800
900
EBITDAFDepreciation and
amortisation
Premiums paid on
electricity options net of
interest
Net finance costsTaxUnderlying
NPAT
Net change in fair value
of hedges/instruments
Loss on sale of
assets/impairments
Premiums paid on
electricity options net of
interest
TaxNPAT
$M
FY20 EBITDAF TO NPAT RECONCILIATION

37
Energy margin
A non-GAAP financial measure representing
energy sales revenue less energy related
expenses and energy distribution expenses
Used to measure the vertically integrated
performance of the retail and wholesale
businesses
Used in place of statutory reporting which
requires gross sales and costs to be reported
separately, therefore not accounting for the
variability of the wholesale spot market and
the broadly offsetting impact of wholesale
prices on the cost of retail electricity purchases
Defined as
Revenues received from sales to customers net of distribution
costs (fees to distribution network companies that cover the costs
of distribution of electricity to customers), sales to large industrial
customers and fixed price revenues from financial contracts sold
(contract sales revenue)
The volume of electricity purchased to cover contracted customer
sales and financial contracts sold (cost to supply customers)
The fixed cost of derivatives used to manage market risks, net of
spot revenue received from those derivatives (net cost hedging)
Revenue from the volume of electricity that Meridian generates
(generation spot revenue)
The net margin position of virtual asset swaps with Genesis Energy
and Mercury New Zealand
Other associated market revenues and costs including Electricity
Authority levies and ancillary generation revenues, such as
frequency keeping
26 AUGUST 20202020 ANNUAL RESULTS PRESENTATION

38
New Zealand energy margin
26 AUGUST 20202020 ANNUAL RESULTS PRESENTATION
1,122
499
297
531
1,266
-1,268
-218
-227
252
-14
+9
-5
0
500
1,000
1,500
2,000
2,500
3,000
Res, SMB, Agi
sales
C&I salesFinancial
contract sales
(incl NZAS)
Generation
spot revenue
Cost to supply
customers
Cost to supply
financial
contracts
Hedging fixed
costs
Hedging spot
revenue
Contract close
outs
VAS marginsMarket costsEnergy Margin
$M
New Zealand energy margin

39
New Zealand energy margin
26 AUGUST 20202020 ANNUAL RESULTS PRESENTATION
1,122
1,108
+54
+88
+7
-406
+331
+57
-94
-15
-6
-2
0
700
900
1,100
1,300
1,500
Energy Margin
30 Jun 19
Res, SMB, Agi
sales
C&I salesFinancial
contract sales
(incl NZAS)
Generation
spot revenue
Cost to supply
customers
Cost to supply
financial
contracts
Hedging fixed
costs
Hedging spot
revenue
Contract close
outs
VAS marginsMarket costsEnergy Margin
30 Jun 20
$M
New Zealand energy margin movement

40
New Zealand energy margin
26 AUGUST 20202020 ANNUAL RESULTS PRESENTATION

41
Australian energy margin
26 AUGUST 20202020 ANNUAL RESULTS PRESENTATION

42
Funding metrics
Net debt/EBITDAF is the principal metric underpinning S&P credit rating
S&P calculation of net debt/EBITDAF includes numerous adjustments to reported numbers;
Borrowings adjusted for the impact of finance and operating leases
Cash balances adjusted for restricted cash
A cash buffer at 25% of unrestricted cash and cash equivalents
26 AUGUST 20202020 ANNUAL RESULTS PRESENTATION

43
Fair value movements
Meridian uses derivative instruments to manage
interest rate, foreign exchange and electricity
price risk
As forward prices and rates on these instruments
move, non-cash changes to their carrying value
are reflected in NPAT
Accounting standards only allow hedge accounting
if specific conditions are met, which creates NPAT
volatility
$113M decrease in NPBT from fair value of
electricity hedges from lower forward electricity
prices ($58M increase in FY19)
$48M decrease in NPBT from fair value of treasury
instruments from lower forward interest rates
($63M decrease in FY19)
26 AUGUST 20202020 ANNUAL RESULTS PRESENTATION
-83
-21
-26
-5
-161
-200
-180
-160
-140
-120
-100
-80
-60
-40
-20
0
20162017201820192020
$M
Financial Year ended 30 June
Change in fair value of financial instruments

44
Income statement
26 AUGUST 20202020 ANNUAL RESULTS PRESENTATION

45
Underlying NPAT reconciliation
26 AUGUST 20202020 ANNUAL RESULTS PRESENTATION

46
Cash flow statement
26 AUGUST 20202020 ANNUAL RESULTS PRESENTATION

47
Balance sheet
26 AUGUST 20202020 ANNUAL RESULTS PRESENTATION

48
Glossary
Hedging volumesbuy-side electricity derivativesexcludingthe buy-side of virtual asset swaps
Average generation pricethe volume weighted average price received for Meridian’s physical generation
Average retail contracted sales pricevolume weighted average electricity price received from retail customers, less distribution costs
Average wholesale contracted sales pricevolume weighted average electricity price received from wholesale customers(including NZAS) and financial contracts
Combined catchment inflowscombined water inflows into Meridian’s Waitaki and Waiau hydro storage lakes
Cost of hedgesvolume weighted average price Meridian pays for derivatives acquired
Cost to supply contracted salesvolume weighted average price Meridian pays to supply contracted customer sales and financial contracts
Contracts for Difference (CFDs)an agreement betweenparties to pay the difference between the wholesale electricity price and an agreed fixed price for a specified volume of
electricity. CFDs do not result in the physical supply of electricity
Customer connections (NZ)number of installation control points, excluding vacants
FRMPfinancially responsible market participant
GWhgigawatt hour. Enough electricity for 125 average New Zealand households for one year
Historic average inflowsthe historic average combined water inflows into Meridian’s Waitaki and Waiau hydro storage lakes over the last 84 years
Historic average storagethe historic average level of storage in Meridian’s Waitaki catchment since 1979
HVDChigh voltage direct current link between the North and South Islands of New Zealand
ICPNew Zealand installation control points, excluding vacants
ICP switchingthe number of installation control points changing retailer supplier in New Zealand, recorded in the month the switch was initiated
MWhmegawatt hour. Enough electricity for one average New Zealand household for 46 days
National demandElectricity Authority’s reconciled grid demand
www.emi.ea.govt.nz
NZASNew Zealand Aluminium SmeltersLimited
Retail sales volumescontract sales volumes to retail customers, including both non half hourly and half hourly metered customers
Financial contract salessell-side electricity derivatives excluding thesell-side of virtual asset swaps
TJTerajoules
Virtual Asset Swaps(VAS)CFDs Meridian has with Genesis Energy and Mercury New Zealand. They do not result in the physical supply of electricity
26 AUGUST 20202020 ANNUAL RESULTS PRESENTATION

49
Disclaimer
The information in this presentation was prepared by Meridian Energy with
due care and attention. However, the information is supplied in summary
form and is therefore not necessarily complete, and no representation is
made as to the accuracy, completeness or reliability of the information. In
addition, neither the company nor any of its directors, employees,
shareholders nor any other person shall have liability whatsoever to any
person for any loss (including, without limitation, arising from any fault or
negligence) arising from this presentation or any information supplied in
connection with it.
This presentation may contain forward-looking statements and projections.
These reflect Meridian’s current expectations, based on what it thinks are
reasonable assumptions. Meridian gives no warranty or representation as to
its future financial performance or any future matter. Except as required by
law or NZX or ASX listing rules, Meridian is not obliged to update this
presentation after its release, even if things change materially.
This presentation does not constitute financial advice. Further, this
presentation is not and should not be construed as an offer to sell or a
solicitation of an offer to buy Meridian Energy securities and may not be
relied upon in connection with any purchase of Meridian Energy securities.
This presentation contains a number of non-GAAP financial measures,
including Energy Margin, EBITDAF, Underlying NPAT and gearing. Because
they are not defined by GAAP or IFRS, Meridian's calculation of these
measures may differ from similarly titled measures presented by other
companies and they should not be considered in isolation from, or construed
as an alternative to, other financial measures determined in accordance with
GAAP. Although Meridian believes they provide useful information in
measuring the financial performance and condition of Meridian's business,
readers are cautioned not to place undue reliance on these non-GAAP
financial measures.
The information contained in this presentation should be considered in
conjunction with the company’s financial statements, which are included in
Meridian’s integrated report for the year ended 30 June 2020 and is available
at:
www.meridianenergy.co.nz/investors
All currency amounts are in New Zealand dollars unless stated otherwise.
26 AUGUST 20202020 ANNUAL RESULTS PRESENTATION

---

Meridian Energy Limited.
Investor Letter.

Neal Barclay
Chief Executive
Successfully navigating a
range of challenges
Meridian’s commitment to our purpose
of Clean Energy for a Fairer and
Healthier World continues to be the
number one driver of all our business
decisions and being closely aligned
with this purpose in FY20 was more
important than ever.
FY20 was another successful year for
our Company and we were particularly
pleased with the continued growth in
our customer businesses. Financially
it was a solid year for Meridian with
another record EBITDAF result, although
net profit after tax was lower.
But there are significant challenges
on the horizon, particularly the global
impact of the COVID-19 pandemic and
the closure of the Tīwai Point Aluminium
Smelter. These changes will affect the
way in which we operate our business
and we are confident we have the team
and the strategies to manage through
these uncertain times.
Throughout the COVID-19 pandemic to
date we have maintained full operational
capability. For Meridian, as an essential
service, this was vital, and we believe
the electricity sector and Meridian
performed very well during this time.
Supporting our customers
During FY20, we supported customers
who have been impacted by COVID-19
by working with them to find payment
solutions that suited them and by
making sure their power wasn’t unfairly
disconnected. We also didn’t charge any
late-payment fees or credit-reminder
fees to customers across our brands in
New Zealand and Australia.
We also wanted to do something more
to help families facing hardship, so
we matched the $1 million donation
made by generous Kiwis to our charity
partner KidsCan. With that additional
money KidsCan is able to help kiwi kids
in hardship get a hand up, and the best
chance at a good education, to help
break the cycle of poverty. The ongoing
impacts of COVID-19 have reinforced
our view that sustainable businesses
will be the most successful businesses
over time.
Mark Verbiest
Chair

Healthy customer growth
Our Powershop business in Australia
once again achieved outstanding
growth as customers continued
to choose cleaner energy options.
Customer numbers in grew by 24% and
there was a 24% increase in the volume
of electricity sold whilst gas sales were
up three-fold. Powershop’s success
in Australia means we’re looking at
new generation options the business
will need in the medium term. These
include the 130-megawatt Rangoon
wind farm development project that
Meridian Australia has in northern
New South Wales, which could power
58,000 homes a year.
Whilst supporting customers through
the COVID-19 pandemic we were also
able to continue to grow our retail
market share.
In New Zealand across both our
Meridian and Powershop brands, we
grew customer numbers by 7% and
the volume of energy sold by 18%.
Even more pleasing, our overall
customer satisfaction ratings and our
customer retention rates improved and
set the benchmark for the industry.
Rio Tinto to exit New Zealand
In October 2019 Rio Tinto announced
that it was undertaking a strategic
review of New Zealand’s Aluminium
Smelter at Tīwai Point in Southland.
On 9 July 2020, Rio Tinto announced
the termination of its contract with
Meridian and its intention to close the
smelter by 31 August 2021. Rio Tinto’s
decision is hugely disappointing
for the smelter workforce and the
Southland community of which
we’re a part.
During the Rio Tinto strategic review,
Meridian was able to put together a
package of contractual amendments
that would have delivered a significant
reduction in the cost of delivered
energy to the smelter, well in excess
of $60 million per annum. We believe
that this offer was fair and in the
interests of Meridian shareholders
and New Zealand. As part of that
package we asked the smelter owners
to commit to Aotearoa for a period of
at least four years. They were unwilling
to make that commitment and have
instead chosen to close the smelter.
Electricity Authority preliminary
UTS decision
In December 2019, an energy trading
company (Haast Energy Trading) and a
group of small retailers lodged a claim
with the New Zealand Electricity
Authority that Meridian and other
South Island hydro electricity
generators had caused an undesirable
trading situation (UTS) in November
and December 2019. On 30 June
the Electricity Authority released
its preliminary decision, determining
that a UTS had occurred between
3 and 18 December 2019.
Management and the Board have
looked closely at the Authority’s
preliminary decision and we do not
believe our actions constituted a UTS.
We believe the preliminary decision
failed to adequately consider the
enormity of the flood conditions
that Meridian was managing during
that time.

Harapaki decision
The Board made the tough decision
in August to defer the build of our
Harapaki wind farm. While the
business case for Harapaki is very
sound, the market needs time to adjust
to Rio Tinto’s decision to exit New
Zealand. We are still confident that
we will build Harapaki in the future.
Transmission Pricing Methodology
Just before the end of the financial
year the Electricity Authority released
its final decision on the Transmission
Pricing Methodology guidelines.
We’re pleased with the outcome
and that a benefits-based approach
to transmission pricing was adopted
by the Authority. It will provide
certainty, be fairer and enable a more
efficient investment in and use of the
transmission grid. This new approach
will be positive for Meridian financially.
Climate action
We believe that in FY20 policies
progressed well. There was
considerable progress at the policy
level to support Aotearoa to meet its
zero-carbon aspirations. The Climate
Change Response (Zero Carbon)
Amendment Bill was passed, the
Climate Change Commission was
established, and we also now have
the package of Emissions Trading
Scheme reforms that are the key policy
tool driving emission reductions.
In June a water reform package
outlined changes to how freshwater
is managed and steps to improve
water quality within a generation.
These changes protect the flexibility
and output of existing large hydro
to support further decarbonisation,
aim to improve the health of our
waterways and, importantly, better
recognise the values and perspectives
of tangata whenua.
Most of the energy New Zealand
consumes still comes from burning
fossil fuels – the fuels that power our
cars and provide heat for industries,
homes and public infrastructure.
Combined, these energy sources
account for 41% of New Zealand’s
greenhouse gas emissions. About
half of that’s from transport.
The opportunity to electrify these
energy uses and to power our nation
with renewable electricity is massive
for our country and, once done, will
go a long way to eliminating our
non-agricultural emissions. Meridian
remains totally committed to working
with government, industries and
our customers to support the future
electrification and decarbonisation
of the New Zealand economy.
Our employees are committed
Our survey in May 2020 saw employee
engagement scores across Meridian,
Powershop and our Australian
companies lift to 85%, demonstrating
that our people are proud to work
for Meridian and committed to the
company.
We introduced Learning Teams
The most important thing at Meridian
is that our people go home safely at
the end of each day – but in FY20 we
had too many significant injuries for
our liking. We made changes to ensure
that our health and safety culture
continues to evolve and improve,
and to ensure that our people are
as physically and mentally protected
as possible.
Refreshing our executive
During the year there were four new
appointments to Meridian’s Executive
Team. Lisa Hannifin was appointed as
Chief Customer Officer, Claire Shaw
was appointed as General Manager
Corporate Affairs and Sustainability,
Jason Woolley was appointed as
General Counsel and Company
Secretary and Jason Stein, who was
previously Meridian Energy’s General
Counsel and General Manager of the
Office of the CEO, was appointed CEO
of Meridian Energy and Powershop
Australia. All these roles were filled
internally after recruitment processes
that included external candidates.
These appointments show we have
talented people in our organisation,
that our people are encouraged
to step up, and that the skills and
leadership we’re developing here
test very well against the market.
Flux
We are increasing Flux’s capability in
New Zealand to better support the
migration of Meridian customers to
the platform. However, this increase
and the associated complexity
with Meridian’s customer base
meant that the migration project,
that commenced during 2018, was
extended by nine months, and it is
now scheduled for completion during
September 2021. The benefits of and
business case for the project remain
very positive.
The ongoing relationship between Flux
and Powershop UK is now uncertain.
Powershop UK is owned by npower
who in turn are now part of the E.ON
Group. In the U.K, E.ON and Kraken
Technologies, part of Octopus Energy
Group, entered a strategic agreement
regarding E.ON’s UK residential and
small and medium-sized business
(SME) energy retail businesses. It is our
understanding that E.ON intend to
migrate their customer base (including
the npower customer base) to the
Kraken platform. At this stage we
are unsure of npower’s intentions in
relation to the Powershop UK brand.

2020 financial results
Meridian Energy has reported a
strong financial outcome for the FY20
year powered by record generation
and strong retail sales growth on both
sides of the Tasman.
Group EBITDAF¹ increased by 2%
to $854 million. Net profit after
tax decreased 48%, reflecting
higher depreciation on previously
revalued assets and movements in
forward prices and rates on financial
instruments used to manage risk
(non-cash, fair value movements).
Underlying net profit after tax²
(which removes these fair value
movements) decreased by 5%.
The Board has declared a final ordinary
dividend of 11.20 cents per share, 4%
higher than the previous year. This
brings the total ordinary dividends
declared in FY20 to 16.90 cents per
share, 3% higher than last year’s, and
represents a 75% payout of free cash
flow. Meridian also declared a final
special dividend of 2.44 cents per
share ($62.5 million) in February
2020 under the company’s capital
management programme. With Rio
Tinto’s announcement of its intention
to close the Tīwai aluminium smelter,
the Board has now ceased this
programme.
The smelter decision also saw rating
agency Standard & Poor’s change
Meridian’s credit rating outlook from
stable to negative.
Total Dividend
9%
EBITDAF
2%
Net profit after tax
48%
NZ Energy Margin
1%
1. EBITDAF is a non-GAAP financial measure
comprising of earnings before interest, tax,
depreciation, amortisation, changes in fair value
of hedges, impairments and gains of losses on
sale of assets.
2. Underlying net profit after tax is a non-GAAP
financial measure comprising net profit after tax
adjusted for the effects of changes on fair value
of hedges and other non-cash items.
Underlying net profit after tax reconciliation ($M)
Financial year ended 30 June
FY20FY19
Net profit after tax176339
Underlying adjustments
Hedging instruments
Net change in fair value of electricity and other hedges113(58)
Net change in fair value of treasury instruments4863
Premiums paid on electricity options net of interest(20)(17)
Assets
(Gain)/loss on sale of assets–(3)
Impairment of assets585
Total adjustments before tax199(10)
Taxation
Tax effect of above adjustments(58)4
Underlying net profit after tax317333

Undaunted in our pursuit of our long-term goals
All in all, FY20 was quite a year, but our commitment to 100% renewable
energy and helping New Zealand to achieve its zero-carbon goals
remained our focus.
The electricity sector is a big part of the solution for Aotearoa’s
greenhouse gas emissions. The industry can and will build the renewable
generation and transmission assets required to power growth in the
number of electric vehicles on our roads and the electrification of
stationary energy uses, ending our country’s current dependence on
fossil fuels. Meridian will play its part in moving rapidly to that future.
We also need to preserve our backbone of hydro generation in Aotearoa,
which can flex and fill the gaps between intermittent wind and solar
generation. It’s the key to renewable expansion.
We need to do all this while keeping electricity affordable – both to
ensure that we’re playing our part to reduce energy hardship and to
ensure the right priority is put on vital decarbonisation projects. We need
to focus on projects that will help to transform our society and economy
in the next decade as we reduce our reliance on fossil fuels and transition
to clean energy to respond to the climate emergency facing us all.
We are most definitely on the right path. New Zealand’s electricity
market is globally recognised as world-leading and well-functioning.
The International Energy Agency says New Zealand is a success story for
the development of renewable energy without the aid of government
subsidies and recent Ministry of Business, Innovation and Employment
(MBIE) data shows the average New Zealand household electricity bill is
at its lowest in real terms since 2009.
On behalf of the Board and the Executive Team, a sincere thank you to
our shareholders, our customers, communities and partners, and the
Meridian team for your continued support for and investment in cleaner
energy for a fairer and healthier world.
This year’s Integrated Report aims to provide a concise summary of the year
in review, and the way in which Meridian takes care of its customers, people,
local communities, iwi and the environment which in turn supports our ability
to continue delivering shareholder returns. This way of reporting is significantly
more meaningful and engaging than typical reports, and we encourage you to
read it and would love your feedback which you can email to
investors@meridianenergy.co.nz.
Visit meridian.co.nz/investors
to download the full Meridian Integrated Report
for the year ended 30 June 2020.

---

Results announcement

Results for announcement to the market
Name of issuer Meridian Energy Limited
Reporting Period 12 months to 30 June 2020
Previous Reporting Period 12 months to 30 June 2019
Currency NZD
Amount (NZ$m) Percentage change
Revenue from continuing
operations
$3,405 -2%
Total Revenue $3,405 -2%
Net profit/(loss) from
continuing operations
$176 -48%
Total net profit/(loss) $176 -48%
Interim/Final Dividend
Amount per Quoted Equity
Security
NZ $0.11200000 Final Ordinary Dividend
Imputed amount per Quoted
Equity Security
NZ $0.03745800
Record Date 30/09/2020
Dividend Payment Date 16/10/2020
Current period Prior comparable period
Net tangible assets per
Quoted Equity Security
$1.85 $2.00
A brief explanation of any of
the figures above necessary
to enable the figures to be
understood
For commentary on the operational results please refer to the
media announcement and final results presentation.
This announcement should be read in conjunction with the
attached Annual Financial Statements for the year ended 30
June 2020.
Authority for this announcement
Name of person

authorised
to make this announcement
Jason Woolley
Contact person for this
announcement
Jason Woolley
Contact phone number +64 4 381 1206
Contact email address Jason.Woolley@meridianenergy.co.nz
Date of release through MAP

26/08/2020

Audited financial statements accompany this announcement.

---

Distribution Notice

Section 1: Issuer information
Name of issuer Meridian Energy Limited
Financial product name/description Ordinary Shares
NZX ticker code MEL
ISIN (If unknown, check on NZX
website)
NZMELE0002S7
Type of distribution
(Please mark with an X in the
relevant box/es)
Full Year X Quarterly
Half Year Special
DRP applies
Record date Close of trading on 30/9/2020
Ex-Date (one business day before the
Record Date)
29/09/2020
Payment date (and allotment date for
DRP)
16/10/2020
Total monies associated with the
distribution
1

$287,056,000
Source of distribution (for example,
retained earnings)
Retained Earnings
Currency NZD
Section 2: Distribution amounts per financial product
Gross distribution
2
$0.14945800
Gross taxable amount
3
$0.14945800
Total cash distribution
4
$0.11200000
Excluded amount (applicable to listed
PIEs)
$0.00000000
Supplementary distribution amount $0.01699800
Section 3: Imputation credits and Resident Withholding Tax
5

Is the distribution imputed Partial imputation
If fully or partially imputed, please
state imputation rate as % applied
6

86%
Imputation tax credits per financial
product
$0.03745800

1
Continuous issuers should indicate that this is based on the number of units on issue at the date of the form
2
“Gross distribution” is the total cash distribution plus the amount of imputation credits, per financial product, before the deduction of
Resident Withholding Tax (RWT).
3
“Gross taxable amount” is the gross distribution minus any excluded income.
4
“Total cash distribution” is the cash distribution excluding imputation credits, per financial product, before the deduction of RWT.
This should include any excluded amounts, where applicable to listed PIEs.
5
The imputation credits plus the RWT amount is 33% of the gross taxable amount for the purposes of this form. If the distribution is
fully imputed the imputation credits will be 28% of the gross taxable amount with remaining 5% being RWT. This does not constitute
advice as to whether or not RWT needs to be withheld.
6
Calculated as (imputation credits/gross taxable amount) x 100. Fully imputed dividends will be 28% as a % rate applied.

Resident Withholding Tax per
financial product
$0.01186300
Section 4: Distribution re-investment plan (if applicable)
DRP % discount (if any)

Start date and end date for
determining market price for DRP

Date strike price to be announced (if
not available at this time)

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
Jason Woolley
Contact person for this
announcement
Jason Woolley
Contact phone number +64 4 381 1206
Contact email address jason.woolley@meridianenergy.co.nz
Date of release through MAP

26/08/2020

=== IR PAGE TRANSCRIPT: Annual Results Announcement Transcript (PDF) ===

Meridian Energy FY 20 Results Announcement – 26 August 2020 – LIVE TRANSCRIPT
NEAL BARCLAY: Good morning and welcome to Meridian’s 2020 Annual results call
Good morning and welcome to Meridian’s 2020 annual results call. I’m Neal Barclay, Meridian’s
Chief Executive and I am appropriately physically distanced here in Wellington from Mike Roan,
Meridian’s CFO.
The result that we are about to present is a particularly strong one especially as we managed to
shade the FY19 EBITDAF outcome and FY19 was one out of the box. And whilst I know most people
on this call probably can’t wait until we get to the NZAS bit, you’re just going to have to humour us,
as there is a lot that has occurred in the last 12 months that we want to talk to.
That said, we aren’t getting carried away with ourselves as conditions have moderated in the second
six months and clearly there are a couple of sizable challenges on the horizon.
Whilst EBITDAF was up, reported net profit was down by 48%, largely driven by non-cash fair value
adjustments of hedging instruments. Mike will get into this in more detail, but it does not reflect the
underlying strong business performance.
Here are a few of the highlights. EBITDAF is up 2% and it is the quality of the result that I’m most
pleased with, particularly when compared to the prior year.
Our FY20 outturn was driven by a significant lift in the volume and pricing of contracted retail sales
on both sides of the Tasman. We delivered strong growth across all customer segments. Our
customer retention rates improved, and the Meridian brand sets the benchmark for retention in
New Zealand. Our cost to serve per customer also continued its downward trend.
Hydro conditions were favourable in New Zealand, but the Team did exceptionally well getting away
a record amount of generation, given the HVDC was heavily constrained during Q3. It cost a
reasonable amount of money to hedge that outage but even so, we materially outperformed our
expectations during the event.
The continuing drought in Australia significantly impacted our hydro generation which was around
40% of average and we saw wholesale prices soften materially during the second half of the year.
However much of our position was well hedged and the business was largely immune from falling
wholesale prices. FY21 will be more challenging for MEA but the silver lining is our hydro
catchments are filling up fast so hydro generation should recover during the next year.
My sense is the electricity sector in New Zealand and more generally NZ Corporates have responded
well to the Covid pandemic to date and genuinely put customers first. I’m proud of how our Team
reacted and given we are still a long way from out of the woods you can expect us to continue to
support our customers where we can.
What worries me most in our business, is keeping our people safe and clearly our safety
performance needs to improve. We had eight LTIs during the year and three of those resulted in
serious injuries. But worrying about it doesn’t make it better, so we remain very focussed on making
tangible progress evolving our workforce safety culture. I am confident that the lag injury rate
indicators will start to improve in line with the work we are doing to manage all aspects of what we
do safely.

Like most Kiwi and Aussie businesses, escalation of COVID alert levels forced us to quickly find new
ways of working, while continuing to deliver essential services to customers who themselves are
facing significant disruption. The response of our people was awesome frankly and I couldn’t have
been proud of them. Mental wellness will continue to be a focus for us, and I’d like to acknowledge
our Team in Melbourne who have been working from home since March and continue to do a great
job.
Some of our gender balance targets remain stubbornly hard to shift and we are disappointed not yet
to achieve our target of 40% of women in senior leadership roles. We need to do better but I’d love
to get investors out to some of our generations sites as we have some awesome women leaders
now working in what have traditionally been male dominated teams.
Retaining skilled, engaged staff must be a key goal for every business and so we are committed to
the NZ Skills Pledge. This will bring further investment in technology and training to help better
futureproof our workforce.
Lastly, as you can see from the chart the Meridian Team remain well engaged with our business, our
customers and our purpose.
While our strategic direction is largely unchanged and hopefully familiar to you. Obviously,
responses to COVID and NZAS exit are now part of our future. Over the next few slides, I will cover
off some highlights and some of the challenges in front of us.
We remain absolutely committed to demonstrating sustainability leadership and to our purpose of
Clean Energy for a Fairer and Healthier World. Operationally we have many more runs on the board
in terms of our emissions footprint, climate and carbon reporting and we have achieved changes in
the certification of our financing and customer propositions.
At a more strategic level, debate on the merits and consequences of pursuing a 100% renewable
electricity grid continues. We concur with virtually every study done that the current industry
settings and pure economic fundamentals will deliver a largely renewable electricity system within
the next 10 to 15 year. Eeking out the remaining 5 or so % of gas firming, will likely drive up the cost
of electricity and reduce the incentive to electrify transport and industrial heat and that is where the
real decarbonisation opportunity lies. Our strong view is government policy initiatives should focus
on stimulating demand for electricity not supply.
I’d also suggest that a strong transmission grid is the single largest enabler of generation
competition, renewables growth and ultimately lower prices to consumers. So, policies that support
Transpower to continue to sensibly enhance the grid are also very important.
I joined this industry in late 2008 and since that time, collectively, the sector has delivered a more
secure and more renewable electricity system. And most importantly, Kiwi’s are paying less in real
terms for electricity, than they did back then.
But energy hardship remains a real issue for many New Zealand households. COVID has in some
cases exacerbated that as well as negatively impacting the cashflow and viability of many businesses.
We have responded by providing a greater level of support for our customers. As you will know, in
2018 we stopped clawing back PPD from customers who were late paying and during the pandemic,
we have offered customers individualised payment solutions, we created a targeted credit fund for
customers in real need, we implemented a blanket ‘no disconnections’ policy for Covid related debt

and we suspended late payment fees. There is a cost to this, and we are carrying a higher level of
debt provision as a result, but it remains the right thing to do.
We also wanted to do more to help families facing hardship, so we matched the $1M donation other
generous kiwis made to KidsCan. With that additional money Kidscan are able to give children in
hardship a handup and the best chance of an education, and hopefully help break the cycle of
poverty.
We’ve shown support for our suppliers by shortening up our payment cycle to help support their
cash flows.
And in recognition of the new challenges our staff faced during lockdown, we supported them with a
working from home allowance.
As I said earlier, I’m proud of how our team have responded and more generally I think New Zealand
businesses are playing their part where they can.
There was enough pre COVID organic demand growth to offset the short and dramatic hit to
demand that came during the L4 lockdown. But it is difficult to get any kind of gauge on future
demand, given the uncertain economic outlook ahead and the future exit of 5,000GWh of NZAS load
from the system.
It is interesting to note that the sharp drop in demand during Alert L4 is of a similar quantum to what
we expect to happen when NZAS closes.
To have a final TPM decision now in place is a welcome last milestone in a very long process. The
Electricity Authority’s estimates show Meridian’s likely future cost reductions. However, it is worth
noting these cost levels assume NZAS remains as a market participant. With their exit, we expect our
share of HVDC costs to be higher than this FY24 estimate, but it is difficult to ascertain by how much
at this stage.
On the negative side of the regulatory ledger, it is fair to say we were blindsided by the Authority’s
preliminary decision of an undesirable trading situation, relating to unprecedented flood events of
December 2019.
Our focus at the time was on managing an enormous amount of floodwater through our
catchments. It’s not readily appreciated how well hydro generators do this. For a comparison you
can look at the flood damage that occurred on the uncontrolled Rangitata River during December,
which included nine of Transpower’s pylons being wiped out.
The true level of avoidable spill during the flood is in the margin of error and the customer impacts
are small. Clearly a few parties who speculate on FTRs and take exposure to the spot market missed
an opportunity to profit during this time, but given prices throughout December were on average
the lowest for the calendar year, it is hard to see how anyone can credibly claim to have been
materially out of pocket.
At a technical level we believe the basis for the decision is incorrect as nothing occurred that is
outside the past observed normal operation of the market. The preliminary decision also contradicts
decisions made by the Authority in previous investigations and effectively re writes the rules for
what defines a UTS including a new test that “prices need to be what the Authority would expect to
see”. Which is a very low bar.

Clearly, we don’t think this is the Authority’s best work, but we acknowledge there is a wide range of
views on the matter. And we also believe that the Electricity Authority is a capable and constructive
regulator, so being at odds with them on such an important issue is not where we want to be.
We would prefer to work with the Authority to find a sustainable solution and we believe that
should involve using the code reform process, supported by consultation and appropriate cost
benefit analysis to establish the need for change and how to best implement any change.
These views have gone into our submission to the Authority and we will see later this year what the
final decision is.
On a much more positive note, the coalition government’s climate programme is moving forward
with the strengthening of the ETS. Caps, containment and industrial allocation phasedown will result
in stronger price signals and that will enable more efficient investment decisions in emissions
reduction. New Zealand has plentiful renewable electricity resources available to support this
country’s decarbonisation and I applaud the government’s climate change response.
Also, it was great to see the Government’s water reform programme, to improve water quality,
sensibly recognises the role New Zealand’s large hydro schemes will play in a better future for this
country.
These reforms also put the concept of Te Mana o te wai (the mana of water) as the central concept
of future water planning. The perspectives and value of iwi will be rightfully more important than in
previous resource management processes.
And so to NZAS. To be clear, we are working to an August 2021 smelter closure date. There is dialog
with Rio Tinto on a possible staged exit and I believe they are having further discussions with
Government in relation to transmission costs. But I don’t have anything further to provide on that
currently.
Last month we outlined the steps we will take to respond to their exit. The list of potential
mitigations is growing, and we are getting traction in some key areas.
Most importantly, Transpower have confirmed a May 2022 or earlier completion of the Clutha
Upper Waitaki Lines Project. This project will allow all of the energy from the Manapouri and Clutha
schemes to be exportable from the Lower South Island by at most nine months after the smelter’s
scheduled closure, and possibly even sooner.
In potential partnership with both Contact and Transpower, we are moving forward on our North
Island battery development that will then further increase the economic capacity on the HVDC and
allow export of more of the energy to the North Island.
We’ve taken the decision to defer the build of our Harapaki windfarm in Hawkes Bay. The project
itself is shovel ready and economically viable, even with the smelter’s hard closure scenario playing
out. So, we will review the build decision as the uncertainty around the smelter exit starts to
dissipate, but Spring 2021 would be the earliest possible commencement date.
Whilst we cannot save our way out of the near-term revenue reduction from the smelter exit, it does
create the opportunity and imperative to further optimise the business cost structure. And in light
of the likelihood of restricted Manapouri generation between August 2021 and May 2022, we are
reprioritising asset management work which will lead to some near-term cost savings.

We are also fielding plenty of enquiries from parties who would like to establish alternate industries
and take advantage of the renewable electricity available in the South Island. Some of these parties
are very credible but any development is likely to be around three to five years away, so we are not
relying on it as part of our immediate portfolio response.
Continuing the momentum we have established over the last two years growing our retail business
is also a key mitigation measure. I’ve read some industry analysts calling out concerns around
heightened retail price competition emerging. I think that is just the nature of the competitive
market we operate in.
We’ve also noted comments made by the other large generators about how things may play out
after an NZAS exit. It’s clear we’ve got slightly different views on the risks and opportunities that our
respective businesses face. And that’s not too surprising.
From our perspective there are many moving parts and the worst of the news is certainly now out
there. But I’d make the following overall observations:
Transmission is the enabler of competition and must be prioritised. Being a long generator in a
market with excess supply is not likely to be a winning strategy. Hence you can expect Meridian’s
mitigations will focus on bringing our position into balance. In this regard helping to facilitate new
load in the South Island, hands down, is the most valuable play for our business - followed by growth
in retail market share.
Large volume inter generator deals have a part to play as they enable parties to better manage their
risks through the changes ahead. But I would not expect them to have any real bearing on the
economic fundamentals that will drive generation retirement and new development decisions.
In summary, an NZAS exit was not something we would have chosen, but at the same time it was
kind of inevitable. In the mid to longer term we are in the unique position of holding a 5,000GWh
renewable energy advantage and I am confident we will execute on our mitigation strategies and
build an even more resilient business.
During the year we worked out how to gain access to the full consented range of Lake Pukaki. I
know we have talked about it on a couple of investors calls previously but for completeness I wanted
to touch on this again because it was a very successful initiative delivered by our hydro team during
the year.
In simple terms we now have access to another 367GWh of fuel. That’s the equivalent to a new
medium sized wind farm for around $15m.
The additional GWhs also create greater flexibility to balance out storage and production,
particularly where there are constraints on the HVDC. We have modelled that in the order of $10-
$15M p.a. of energy margin uplift.
The next 5 slides provide an update on Meridian’s operating units.
Our Customer Team’s performance during the last year was awesome. We added over 1,100GWh of
contract load in FY20 at improved average prices.
Brand strength, service accuracy, higher retention rates and reducing cost to serve have all
supported growth across all customer segments, something we have continued to see during July
and August.

As I said earlier, maintaining this momentum is massively valuable going into a future without NZAS.
But we are also very aware that the competition isn’t going away, so we’ll need to get appreciably
better to continue to win.
We hit record generation in New Zealand – in both wind and hydro. And whilst we enjoyed above
average hydro inflows, the Wind Team managed to lift wind farm availability and our Wholesale
crew navigated the significant period of interruption to the HVDC flows. So, I think on balance, we
got the very most we could have out of the generation fleet this last year.
The strong generation volumes obviously helped offset the expected softening in wholesale prices,
which saw our average generation price fall 28% in the year.
The forward curve suggests the gas scarcity that has led to elevated prices over the last couple of
years is going to be overtaken by the likelihood of NZAS closing next year. A period of soft wholesale
prices is probably inevitable.
Like in New Zealand our Powershop Teams in Melbourne and Masterton continued to deliver the
goods. Electricity customers and sales volumes are up around 24% and our carbon neutral Victorian
gas offer is gaining real momentum.
Our retail margins remain solid, but headline prices have fallen in line with wholesale price
reductions.
The Australian market isn’t without its COVID impacts either. Lower industry churn rates have
slowed our acquisitions in recent months. We’ve also boosted our doubtful debt provisions
significantly.
We still see plenty of upside growth potential for Powershop in Australia.
The now familiar NSW drought conditions persisted through FY20. However, in what is hopefully
something of a circuit breaker, storage is improving quickly, and we are now have the novelty of
near seasonal average storage.
Generation prices were well off during the year with record domestic gas production and less LNG
exports ultimately driving lower electricity prices. Our Team got ahead of the softening market and
hedged a large proportion of our generation to both Black and Green prices but the outlook for FY21
will be certainly be more challenging.
However, over the medium to long term the trading conditions still look favourable as Australia
comes to grips with their decarbonisation challenge and as the aging coal fired generation fleet
marches toward their inevitable retirement.
So, we continue to actively seek generation development and firming options to support our
planned growth of Powershop. Most recently, we completed feasibility work on the 130MW
Rangoon wind farm development option and we have made good progress on a firming battery
option, adjacent to our Hume hydro station.
Mike will talk to the project to migrate the Meridian customers to the Flux platform shortly. I’ll just
make some overarching comments. It is taking longer than we expected and will cost more but not
to a material degree. Most importantly we are still confident in the benefits that drove the business
case and we’ve migrated over 100,000 customers now with very little fuss.
Flux’s continuing relationship with Powershop UK is uncertain though. Powershop UK are owned by
npower and npower has now completed its merger with E.ON. Both npower and E.ON have

announced their intention to move their customers to the Kraken platform (owned by Octopus
Energy), but as yet there is no decision about the Powershop UK customers.
So on that not so cheery but also not too surprising note, I’ll now hand over to Mike to talk to the
Financials in more depth before I round up at the end. Thanks Mike.

MIKE ROAN: Thanks Neal, we have just had another tremendous year.
And the results that I will talk to in a minute are driven by a very talented and committed team in
New Zealand and Australia that not only delivers in the current environment but has been testing
how it might overcome the set of challenges that closure of the Tiwai aluminium smelter might
bring.
So alongside taking pride in the outcomes from FY20, if that plays out the team is looking forward to
proving to you, our shareholders, that we can create more value than we would have, had it stayed.
Time will tell whether the smelter does go of course but competition is a wonderful thing and there
is plenty of value to unlock looking forward. But back to the year that was.
As you all know, the financials were solid. While accounting measures like Net Profit After Tax were
well off last years run rate, non-cash items drove that reduction and we tend to look at EBITDAF as
both a comparative measure across energy businesses and across time.
And the small lift in EBITDAF this year to $854m is very satisfying.
If I dive into that figure a little, and as I stated during our interim announcement, this outcome was
driven by outstanding execution in NZ, where EBITDAF lifted by $20m, while Meridian Energy
Australia more than held its own as the team there lifted EBITDAF by $2m .
The reduction in transmission expense in NZ that started to flow through in April didn’t hurt either
but our increased costs, while being well signalled, brought us back a touch. All in all, and as I say
very satisfying.
Alongside EBITDAF, I tend to look to operating cashflows as my measure of underlying performance.
And here again, we had another strong year with net cash from operations at $605 million. If I
compare this to operating cashflow from two years ago, it is up a whopping 42% or $178 million.
That said, it is $30m lower than last year but largely because cash tax was $43m higher in FY20.
And this strong cashflow is crucial, not only given the change coming at us, but also as it has helped
maintain a strong balance sheet while letting us support our people, customers and suppliers during
the first lockdown due to COVID. It also meant that financing needs were well down on last year,
even as we lifted the ordinary dividend.
As a result, net debt only lifted $52 million over the year and the key S&P ratios that support our
BBB+ credit rating, “net debt/EBITDAF” and “EBITDAF Interest Cover”, at 1.8 and 10.3 times
respectively, did not move substantially during the year.
Which is a perfect segue to dividend flow.

On July 10 we announced the cessation of the capital management program so that does not factor
into the conversation today. However, given the strong year, and our healthy cash flow and balance
sheet, we have decided on a final ordinary dividend of 11.20 cps.
This means the total dividend for FY20 is 19.34 cps.
While this represents a fall of 9% on last year, that fall is driven by the cessation of the capital
management program. With this in mind, the lift in ordinary dividend of 3% is pleasing.
And to save on valuable question time, we recognise that there is uncertainty about future earnings
and cashflows of the business, but we won’t be moving away from our policy of not providing
earnings and dividend guidance today.
So on to NZ performance. As you may recall we had a strong first half year in NZ. The best first half
ever in fact.
While the second half wasn’t as strong, the teams navigated a three-month HVDC outage expertly
and without fuss (as I suggested they would), COVID and towards the end of the year, the beginnings
of a drought that has extended into August.
At the same time, I can categorically say that we have a Customer business with strong momentum.
In Neal’s earlier slide you would have seen that customer numbers, volumes and prices were all up
on 2019. Here you can see how that momentum translated into value.
Contract sales across our customer segment lifted by $142 million year on year and that in turn
delivered an $18 million lift in Energy Margin for the Customer team. At the same time, strong
generation volumes supported higher wholesale derivative sales but as prices fell year on year, the
value of those derivative sales fell by $17 million.
The wholesale team also did a stellar job of managing risk during the 3 month HVDC outage where
they bought over 500GWh of derivatives and 150MW of FTRs over the past four years to make sure
our position remained sound. And these hedges contributed to the $43m lift in the cost of
derivative purchases.
I won’t focus on COVID specifically as while it did have a material impact on electricity consumption
in April, the effect was shorter and smaller than expected. Overall, NZ Energy Margin lifted by $14
million.
That may not sound like much and it is down from the H1 uplift of $76m but I can tell you that
retailing and wholesaling electricity is very competitive and improving results takes considerable
coordination, discipline and grit. So both teams have done a tremendous job.
And while we are on NZ, as you know we are contesting the Electricity Authority’s preliminary
findings that there was a UTS in December 2019. While we do this, we have booked a $5 million
provision in case the regulator maintains its position. We do not believe that would be the right
outcome of course, so time will tell whether this is a reasonable call to make or not.
Moving on. As you can see from the graph, the customer story in Australia is similar, strong retail
performance with electricity and gas customer numbers and contracted sales lifting. The wholesale
story is similar too, with wholesale prices falling materially during the year.

It can be a bit tough to pick this apart from this side of the ditch but the volume growth across both
electricity and gas businesses drove the $29 million lift in contracted sales shown here whereas the
price falls held this lift in check. And while wholesale prices did fall materially, with VIC FY20 futures
trading $110MWh in November 2019 but falling to $73MWh by June, as can be seen the position
was well hedged and those derivatives added $9m to the teams result.
We also had a significant benefit from having hedged our LGC sales, which settled in February, at
much higher prices. We gained A$14m from this but unfortunately that gain will not be repeated in
FY21.
At the same time, Meridian Australia’s retail electricity prices, net of distribution, fell by 8% over the
year. And the reason they fell, is that there are two regulated price frameworks in Australia, one for
Victoria, Victoria Default Offer or VDO, and another for the rest of the National Electricity Market,
Default Market Offer or DMO. As wholesale prices fall, both VDO and DMO track with them and as
customers can access VDO and DMO offers from retailers, all prices tend to fall or rise alongside
those frameworks. While I won’t do the calculations justice here, both use wholesale prices as a
component of their calculations, and therefore they both fell and retail prices went with them.
And before someone says we should deploy this here, there are plenty of pitfalls in both and given
volatility in underlying wholesale prices in NZ, I doubt customers here would accept the price swings
that would bring.
At the same time, the Australian drought that I talked about this time last year, continued. For the
full 12 months of FY20, the Green State hydro assets only produced 113GWh, down from 203GWh
the previous year and a full 175GWh off their average generation levels.
The good news is that while the above dynamics were in play, Meridian Energy Australia managed to
lift its Energy Margin contribution by $4 million. This is a solid outcome, given at Interims the team
was down $1 million on last year and I noted that should the drought extend, our second half
performance might be challenged.
As we sit here today, there is some further good news, in that the drought has broken and hydro
storage lakes are filling nicely. But this is tempered by the fact that wholesale prices remain low. So,
the Australian business is in for another bumpy ride in FY21.
At last years results announcement, we looked to set expectations in terms of cost by introducing a
range for both opex and capex.
At that time, we said that FY20 opex was likely to fall in a range of $280 to $286 million. I’ll come to
the waterfall chart in a minute but FY20 opex actually landed at $294 million so well above the top
end of that range. At first blush, that is not flash. But, as with most things, it is explainable. To do
that, I first want to talk to the table that provides a legend for the waterfall chart.
In FY21, we have moved Electricity Metering expenses into Direct costs. We have done this as
Electricity Metering expenses tend to move up if customer numbers are growing, and down if they
are not. So, by removing this category, you should be able to gain further insight into operating
expense movements generally.
Therefore, to provide a comparison between FY20 and FY19 we need to deduct Metering expenses
from operating costs for both years. We also need to adjust for IFRS16 that I talked to at our Interim

results – simply put, implementation of that accounting standard drops operating costs by $6million
Year on Year, and of course lifts EBITDAF by the same amount.
Having made both adjustments, the FY19 operating cost base was $243 million and in FY20 it lifted
to $258 million. This lift in cost was due to the following elements.
A provision that we took for holiday pay of $6 million. The reason for this is there is a risk that
Meridian has to pay holiday pay on incentives and this matter is currently before the courts. We
thought it prudent to capture this year, just in case.
There was also a $3 million lift in asset cost that is largely due to the Ohau refurbishment program,
while we are also in the closing stages of a 3 year remediation program at Te Apiti windfarm that
brought that farm back to respectable levels of availability and that program cost a little more than
expected.
I will talk to our NZ asset maintenance program further at Interims as with the Tiwai exit in front of
us, we will likely reset our work program for Manapōuri, White Hill and the Waitaki assets. If we do
do this, it will reduce our FY22 and 23 opex materially and as we near FY23, we will also begin to see
the benefits of the Customer teams transition to Flux. Both arrive at the right time. But I will talk to
that when we present our interim statements next February.
The Australian asset cost increase was driven by Senvion, who provided O&M services at the Mt
Mercer windfarm, being placed into receivership. I mentioned this at our Interim announcement
where I said that we were able to leverage wider relationships to manage this failure. We did this
and as a result, we now have Siemens as our O&M partner at Mt Mercer. This outcome did cost us
some coin, as you can see here, and while most of this was legal cost related to the receivership and
renegotiation, there was about $0.5m that represents an ongoing cost, as opposed to a one off.
Insurance costs are an ever increasing, but important, nuisance and Neal talked to the COVID impact
– here we simply frame up the costs across outstanding leave balances, working from home benefits
and KidsCan, who did and do incredible work by the way.
And while it isn’t captured as a cost item here, we did lift our provisions for doubtful debts from $5
million in FY19 to $15.7 million in FY20 given the risks COVID poses for the wider NZ and Australian
economies. We haven’t experienced any erosion in the quality of our debtors to date, so we will see
in time whether this was overly cautious or prudent.
So $258 million in opex came around pretty quick but when you strip out the FY20 one offs like
COVID and holiday pay, our opex lifted by $8million year on year to $251 million.
Looking forward, we expect to spend between $261 and $266 million in FY21 or between $10 and
$15 million more than FY20 when removing those one offs. The lift largely comes from growth
initiatives that I don’t want to lay out today for competitive reasons, but I will provide insight on
them in time, either as this year progresses or as they deliver fruit. As I said right at the outset, we
can see opportunities to unlock value given Tiwai’s nearing departure in NZ but we can also see
them in Australia.
As mentioned earlier, Net Profit After Tax fell by a sizeable 48%. But when you add the fair value
movements in electricity and treasury hedges, impairments – that I will talk to in a minute - and the

tax effect of those adjustments; the non-GAAP measure, Underlying Profit After Tax, only fell by 5%
year on year, but was still well up on 2018.
As for those impairments, last year we signalled that we were likely to take further impairments on
our Australian wind farms given forecast revenue streams for those assets fell faster than the
depreciation expense associated with them.
Back then we took a $5 million impairment on Mt Millar. This year that lifted to $33 million and the
fall in Australian futures curves, saw us impair Mt Mercer wind farm by $24 million as well.
And finally, in a note to the financial statements, we have provided an indication of the impact that
an NZAS exit might have on the valuation of our generation assets, should the smelter shutdown in
August 2021. While that impact will become clearer in time, we consider that it could be an
accounting devaluation of between $690 million and $1.3 billion.
As I note, the actual outcome is uncertain and we will update it again when we present our interim
statements, but if it proves accurate, this is similar to the uplift in value written into last years
financial statements.
Not much to talk to here really. We spent $64 million of capex in FY20 which was below our forecast
range of $70 to $80 million. We will roll that same range into FY21.
In saying this, we might need to lift that forecast during the year as we expect significant progress on
the project that is moving our customers over to the Flux platform. That initiative has been making
good progress, but as captured in our Integrated report, it has been re-baselined. The original
schedule had completion of that transition by December 2020, and a total cost for the initiative of
$31 million. We now expect it to be complete by September 2021 and total costs have lifted to $48
milion. And while those changes drop the net benefit of the initiative, those benefits still remain
strongly positive and they continue to tell us that the Flux engine has real value moving forward.
So, if we do revise that range upwards it will be because that initiative is making sound progress.
I have already talked too much of this slide so I only wanted to cover one thing. And as well as
unveiling our annual results today, something else we are unveiling is Meridian’s new Green Finance
Programme.
You will be aware, as a company we are deeply committed to sustainability. It is at the heart of our
purpose, and one of the key reasons we only generate electricity from renewable resources. We
know how important it is for us to play our part to help combat climate change, and recognise the
critical role renewable energy plays in driving decarbonisation of the wider economy.
Meridian has a deep understanding of how climate change can impact its business, now and in the
future. We were the first company in New Zealand to prepare and publish a climate risk disclosure
report. In addition, Meridian reports to the Carbon Disclosure Project and the Dow Jones
Sustainability Index, and is committed to the Sustainable Development Goals 7 and 13 which have
been integrated into our business and our business reporting. As part of Meridian’s ongoing
commitment to sustainability, we are adding this green finance program to those initiatives.
Our overarching goal is to reach a wider community of likeminded investors, and to do this we need
to keep building our credentials with those who may not know Meridian Energy directly, but are

looking to place their money with businesses like ours. The Green Finance programme should help
us do that.
It will also be used to finance or refinance projects and assets that deliver positive environmental
outcomes.
As of tomorrow, all of Meridian’s existing funding will fall under the umbrella of this program and
our Retail bonds listed on NZX will be designated as “Green bonds”. We believe this will benefit
investors by providing an opportunity to invest in a broad range of accredited green debt
instruments. I’d like to thank Westpac for their help in implementing the Programme and you can
check out our website for more information.
So, alongside a great result, this is a nice addition to unpin the fact that we remain one on NZ’s
largest and most sustainable businesses. Neal, back to you.
NEAL BARCLAY: Thanks Mike.
So I think today draws a line under a remarkable couple of years of financial performance. Based on
forward wholesale prices, I wouldn’t expect to see that level of performance replicated, at least not
until the market fully transitions away from the loss of NZAS. That said I can assure you that
Management and the Board remain strongly focused on managing the business and our balance
sheet in a way that delivers a competitive dividend to our shareholders.
The ongoing effects in both New Zealand and Australia of a lasting global pandemic is still highly
unknown. The economic contraction and the lasting loss of business activity must ultimately weigh
on electricity demand.
But if I take a ‘half glass full’ perspective, we now have certainty an NZAS exit will happen, if not in a
year then certainly within the next 4. The mitigations that we and many others in the industry are
now turning our minds to, most notably Transpower, will make more renewable energy available
more quickly than was the base case assumption prior to 9 July. I believe Meridian’s low-cost asset
base, strong retail brands and our exposure to Australia still leaves us strategically well positioned to
lead the sector.
We’ve certainly got some near-term headwinds, but beyond that, the Meridian valuation and the
sector’s fundamentals strong. We are at the start of a great opportunity to reshape our business,
our sector and drive New Zealand’s decarbonisation. And that is something we will all benefit from.
Thank you, so that’s our presentation. We’re now available to take some questions.
>> Thank you very much sir. Ladies and gentlemen, if you would like to ask a question, please press 0
followed by 1 on your telephone keypad and wait your name to be announced. That is zero followed
by 1 on your telephone keypad.
>> Your first question is from the line of Grant Swanepole from Jarden. Please go ahead, sir.
GRANT SWANEPOLE: Good morning Neal and Mike. Couple of questions. Firstly, on Harapaki. You
delayed your decision. I was under the impression that you didn't have the ability to extend your
resource consent. Can we just start on how far you have been able to extend that consent until?
NEAL BARCLAY: Grant, the consent lasts until 2023. We would have to have a meaningful project
underway sort of late '23 to - you know, the live within the existing consent conditions. We have a
few years of time to work with.

GRANT SWANEPOLE: So that means you have a 6-month window to pull the trigger. Is that correct?
NEAL BARCLAY: No, no, 2023 Grant. We can pull the trigger effectively earlier in that year.
GRANT SWANEPOLE: Oh, OK. Thanks. On Flux, can you remind us what the benefits were you
mentioned about a year ago? Was it about 10 million a year?
NEAL BARCLAY: Yeah, about 80 million over a 10 period. So - and we have already actually taken
some of them onboard with the restructure of our ICT group a year-and-a-half ago. With the
additional cost on the actual project delivery, those benefits are reduced by about 15 million. But
we’re still looking at about 70 to 75 million over the term of the - life of the asset, if you like.
GRANT SWANEPOLE: Thank you. The UTS outage, the $5 million - is that the max penalty do you
believe? If it's not, what do you reckon the range of impacts and the timing of when you might have
to pay up?
NEAL BARCLAY: I think the - it's interesting. UTS isn't a penalty regime in itself. So, if the EA want to
restate prices, if that's where they go, then it is quite a complicated process, because you'd have to
restate prices for about 3,000 separate trading periods, which creates some complexity in its own
right. But when we have worked through and assumed a very low price, like around $6 or so, $5
million would be the maximum impact on our business.
GRANT SWANEPOLE: Thanks. Genesis in their results presentation mentioned that they would be
looking for a long-term PPA with yourselves. Can you talk to the trade-offs that you see in terms of
putting one of those in place to give yourself some earning certainty in the near-term, against what
you might give up in the longer term, by putting in a 10-plus year contract with them?
NEAL BARCLAY: Yeah. It was interesting to see that from Genesis Energy because we certainly
haven't agreed with a 10-year plus contract with them. We are interested in talking to them on a
range of issues, and other party for that matter. Certainly we would be looking at a, if possible, we
would be looking in transition hedges, so maybe out to five years.
We have also got the virtual asset swaps that start to wind down in 2023, and we would like to talk
to both Mercury and Genesis about extending those transactions. They worked well. They are
market linked, so they don't leave anyone exposed and outside of the market for a long period of
time. We will always - as a South Island hydro generator, be interested in talking to parties about
peaking or firming load in the North Island. So there is a range of options to discuss with our
competitors. You would have got the message earlier that our strongest - from a Meridian
perspective - our strongest option is to grow load in the South Islandm and beyond that to continue
with the momentum that we have got in our retail side of our business. So, a long-term hedge would
have to be balanced off against those aspirations.
GRANT SWANEPOLE: Thanks. Nice segue to my final question - can you give colour on the demand
response in the South Island that you were talking too earlier, other than dairy that we were all
expecting something to happen in.
NEAL BARCLAY There is a range of parties that want to talk to us, and talk to other folk as well. I
don't want to get to the details on any of them, because the conversations are commercially
confidential to a certain extent but you would have heard talk of data centres, hydrogen facilities,
carbon capture facilities. There is a range of industries and some pretty credible players behind them
that are pretty keen to engage.
GRANT SWANEPOLE: Thank you very much, Neal. That's it from me.

NEAL BARCLAY: Thank you Grant.
>> Thank you very much. Your next question is from the line of Andrew Harvey-Green from Forsyth
Barr. Please go ahead, sir.
ANDREW HARVEY-GREEN: Good morning Neal and Mike. Couple of questions from me, following on
from Grant. First, just in terms of your ability to retail on the North Island and then your sort of
confidence levels about being able to do that successfully, given the South Island basin and dealing
with the basis risk?
MIKE ROAN: Thanks Andrew. We are very confident to run our retail business in both the South and
North Island. There are products we need to purchase to be able to do that, but the team has been
well aware of this risk, and understands that risk pretty well, given we do retail in the North Island
today. So, they have either bought a number of products and will continue buying a number of
products to help manage those exposures. But I think the key message, Andrew, is we're confident
our capacity to grow that position and manage the risk associated with it.
ANDREW HARVEY-GREEN: OK. Thanks. And following on, around the Genesis question and what
Genesis is saying, so they made it pretty clear that they weren't interested in the short-term
contract. I suspect five years might be viewed by them as too short term. How comfortable are you
about operating without any agreement with Genesis? Is that a plausible scenario?
NEAL BARCLAY: I’ll tell you one thing I'm not comfortable about is having a negotiation on
intergeneration hedge in public. We will probably... (LAUGHTER) We will probably park that there.
But, like I say, for us - I understand their position. But our position is different. You know, these
things, you tend to work through and try and find a middle ground. And we're not only talking to
Genesis about the sorts of cover we're looking for for the future.
ANDREW HARVEY-GREEN: Sure. OK. And last question from me was just around transmission costs.
So, I think you provided some guidance around the DC cost expectations for FY '21. I'm assuming the
other connection charges will be dropping as well. Are we sort of looking at around about 70 million-
odd all-up for transmission costs as a reasonable assumption for FY '21?
MIKE ROAN: Yeah Andrew. Slightly higher, but in that ball-park.
ANDREW HARVEY-GREEN: OK. That's great. Thanks.
NEAL BARCLAY: Thank, Andrew.
>> Thank you very much. Your next question is from the line of Stephen Hudson. Please go ahead.
STEPHEN HUDSON: Good morning, Neal and Mike. A couple of quick ones from me. Firstly, I
wondered if you could have a stab at estimating the cost of the HVDC outage over the second half.
Secondly, I think Standard & Poor's estimated that your trough EBITDAF hard exit would be around
about the $470 million mark. I wondered if you can give us a comment on if veracity of that number.
Thirdly, can you give us an update on the Waitaki region consenting and what, if any, risks surround
that process. And then just lastly, if you can sort of sweeping back to NZAS, give us the feel for how
the $50 to $70 million step out in your offer actually behaves and why there is that step up?
NEAL BARCLAY: I will cover the last two, you cover the first two.
MIKE ROAN: Yeah. Hey Stephen, the cost of the HVDC outage hedging, I mentioned in my notes that
we bought about 500 gigs of derivatives and about 130 odd megs of FTRs to cover that position. But
they were brought over a reasonable period of time. You would have noted that our overall cost

derivatives lifted by 43 million over the year. Much of that was due to covering the HVDC outage. In
terms of the S&P forecast for EBITDAF, I think you mentioned 470 mil. You know we don't provide
guidance on that but we're probably a bit more optimistic in our opportunities as we approach that
year. So, that would be my response to that number specifically.
NEAL BARCLAY: Stephen in terms of the Waitaki region consenting, that process has been going
well. We have had a strategy in play for three years. We are maintaining strong relationships with all
the key stakeholders, particularly those that we think will be critical in the end decision. And I'd call
out Ngai Tahu, the Department of Conservation, and ECAN obviously. I point to the changes in the
fresh water consenting - well, fresh water regulations that the Government's announced. They do
actually point to the importance of maintaining flexibility for those major hydro schemes around the
country. So that supports our position in the reconsenting process as well. So yeah that is tracking
well. No real red flags. But it is a big process. It will go right to the 2025 deadline, I suspect.
In terms of the step-up in the NZAS offer that we had on the table before they decided to exit New
Zealand, I think that's what you're referring to. It is kind of moot at this stage Stephen. It isn't part of
the transaction going forward in terms of the staged exit deal that we have got on the table. It had a
number of components, but the reason why it stepped up between now and 2023 is we had a
demand response part of the package on the table and that would replace, or a component of, if not
most of the existing swaption that we have the Genesis that winds down in 2023. And there's been
no secret that Contact have provided some support for the offers that we've had in place and the
nature of their pricing changed a wee bit as well. That sort of led the offer to improve over time. The
other bit that was part of it was potentially a transmission underwrite. But, again, that's all kind of
moot and history because that's not what we ever talking about with the staged exit offer.
STEPHEN HUDSON Clear. Thanks, guys.
NEAL BARCLAY: Thank, Stephen.
>> Thank you very much. Once again, zero followed by 1 on your telephone keypad. Wait your name
to be announced. That is zero followed be a1 on your telephone keypad. Thank you.
Your next question is from the line of Nevill Gluyas, from Jarden. Please go ahead. Sir.
NEVILL GLUYAS: Good morning, team. Just a few questions from me. Just in terms of demand
stimulation ideas you have on the South Island, what's the sort of earliest time frame you think we
could see some material growth there? Are we talking three years to 500 gigawatt hours? 3 years to
200? Just to set some envelope around our expectations.
NEAL BARCLAY: That’s really hard, Nevill. I would expect - you know, maybe a thousand gigawatt
hours... Depends on the nature and who actually gets their business case up and what actually ends
up happening. Three years would be the earliest for a material chunk of load, I think, and probably
within five years - hopefully - you know, we would have filled the entire gap.
NEVILL GLUYAS: Great. And what sort of gap size do you think that is?
NEAL BARCLAY: Well, we're losing 5,000 gigawatt hours with the NZAS exit. There's the potential to
grow demand to that level and beyond, to be frank.
NEVILL GLUYAS: Right. OK. That's great. Thank you. Next question - just on the UTS. You suggested
maybe a code change might be the better way to address the issues, that the EA is concerned about
in the UTS decision. Preliminary decision. Can you suggest what sort of code changes you think
would be best?

NEAL BARCLAY: What we have put in our submission is that we would be up for talking about some
sort of code change that went to spill pricing. It seems to be...
NEVILL GLUYAS: Gotcha
NEAL BARCLAY: ...an issue that they are concerned about. Like I say, I don't think we have done
anything inconsistent with practice previously adopted by ourselves and other generators. But it is a
concern for the Electricity Authority. We should address that head-on, I think.
NEVILL GLUYAS: OK. That's useful. Thank you. In terms of Flux out in Europe, if - do you have an
option to withdraw from the scheme? Can you - I guess I'm wondering whether or not you can take
the Flux idea to other potential partners over there if Eon is going to move on with Kracken.
NEAL BARCLAY: We had an exclusivity arrangement with nPower. But that expires at the end of this
year, if they don't hit certain customer targets. And it appears they won't at this stage. So we're
locked in. We do have a 2-year term nation right on the contract as well. With the chunk of fixed
revenues associated with that. So, we have a wee bit of time to work our way through it but as I say,
we don't really have any clear guidance from nPower or Eon at this stage in terms of what they want
to do with the Powershop UK customer base.
NEVILL GLUYAS: Thank you. Very useful. The last question from me was just in relation to your Flux
conversion here in New Zealand. I suppose it's a difficult time, given what we think might be
happening with the retail market, competition increasing, to be changing your billing platform. Are
you comfortable that you're sort of in a good position to compete for new customers and potentially
elevated levels of churn as you go through that transition?
NEAL BARCLAY: Yes. I mean, it's running slower than we would have liked. But it should be
completed by September next year. We already have 100,000 customers on it. We will have most of
the mass market customers on it before the end of this calendar year. And really the time delay is
down to the complexity in developing the product to manage the CNI segments.
NEVILL GLUYAS: Great. OK. That was very useful. Thank you very much.
NEAL BARCLAY: Thanks Nev.
>> Thank you, sir. There are no further questions at this point. Mr Barclay, please continue. Thank
you.
NEAL BARCLAY: Thank you, all, for your attendance. We will wrap it up there. Have a good rest of
the day. Thank you.

Meridian Energy monthly operating report for July 2020 D&O Ongoing Disclosure Notice – multiple

Data sourced from publicly available filings. Our datasets may not be complete. Automated analysis can produce errors. If you believe any data on this page is incorrect, please contact us at hello@nzxplorer.co.nz. For informational purposes only. Not investment advice.

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