Sky Announces 2020 Full Year Result

Sky New Zealand
PO Box 9059
Newmarket
Auckland 1149
New Zealand

10 Panorama Road
Mt Wellington
Auckland 1060
New Zealand

T. +64 9 579 9999

sky.co.nz




10 September 2020

Sky confirms FY20 results, enters new year in strong financial position
Sky Network Television Limited (SKT) delivered results for the twelve months ended 30 June 2020
(excluding non-cash impairment of goodwill) that were in line with guidance, with revenue towards
the upper end of the guidance range. The results reflect strong performance through the year,
sound navigation of COVID-19 challenges, and provide a positive start to FY21.
Key points:
• Revenue of $747.6m with 35% increase in streaming revenue
• Reported loss after tax of $156.8m including non-cash impairment of goodwill of $177.5m
• Operating profit before impairment of $44.9m
• Net cash from operating and investing activities of $82.7m
• Outlook
1
provided for FY21 of Revenue in the range of $660m - $700m; EBITDA of $125m -
$140m; NPAT of $10m - $20m, reflecting improved trading conditions driven by the faster than
expected return of sport
• Strong financial position to navigate any further COVID-19 uncertainty and deliver on strategy in
FY21 and beyond

The 2020 financial year began well for Sky with a new leadership team, refreshed strategy and
the signing of key sports rights providing clear direction and renewed purpose. In particular, the
decision to accelerate our focus on streaming while improving our service to satellite customers
saw Sky continue to achieve subscriber growth, both organically and through acquisitions that
have created further positive momentum across the business.

The onset of the COVID-19 pandemic during the second half of the year saw Sky swiftly adapt its
business operations to deal with the immediate and ongoing implications of gathering and border
restrictions. These actions ensured the business was well positioned to operate as an essential
service as we worked to minimise the impact on customers, staff and Sky’s financial performance,
while also strengthening our funding position for the longer term.

As such, the reported results (before non-cash write-down of goodwill) for the financial year are
in line with our expectations after confronting the impacts of COVID-19. They include revenue of
$747.6 million, at the upper end of FY20 guidance provided on 21 May 2020 (being revenue in
the range of $730m - $750m).


1
Subject to no adverse change in operating conditions, including future economic impacts flowing
from COVID-19.

As noted in the investor presentation released on 21 May 2020, Sky has continued to review the
assumptions underlying the carrying value of goodwill during the balance of the reporting period.
The Board is required to assess the fair value of intangible assets at each reporting period and has
decided to recognise a further $177.5 million impairment of goodwill. The Board’s decision
reflects the ongoing uncertainty of the impacts of COVID-19 on Sky, supported by an independent
valuation undertaken subsequent to its 21 May 2020 disclosure, and with reference to the
current market share price.

COVID-19 response
We were pleased with the strong engagement and viewership levels recorded for our satellite
and streaming services during the lockdown period when access to news, shows, documentaries,
movies, e-sports and archive sport content was able to keep customers informed and
entertained.

Proactive steps taken by Sky to minimise customer ‘spin-down’ from sport packages during the
COVID-19 lockdown proved very effective. Complimentary upgrades were well received by
customers, with only 8% of sport satellite customers downgrading their packages as a result. The
return of premium live sport starting in May 2020 demonstrated the importance of sport to New
Zealanders as the majority who downgraded sport packages renewed their subscriptions in the
final five weeks of FY20. Sky Sport Now delivered double digit growth in May and June.

Commercial customers were heavily impacted by COVID-19 restrictions and in recognition of the
long-term relationships held with many of these customers, Sky successfully supported them with
a range of discounts and payment holidays. A relaxing of gathering and domestic travel
restrictions, and the faster than anticipated return of sport, saw a return to normal billing for
licensed customers from July. We moved quickly to further support commercial customers in the
Auckland region impacted in August by Level 3 restrictions.

We continue to work constructively with key sport partners, and negotiations around COVID-
impacted sports payments for the 2020 sports calendar have been completed satisfactorily. The
details are commercial and confidential and reflect the faster return of live sport to our screens
and devices. This was in the best interests of all parties and greatly appreciated by sports fans.

Continued progress in delivering on refreshed strategy
Sky continued to grow customer numbers, achieving a record year end total of 990,000, down
slightly from a lockdown peak of 1 million announced in May but ahead of expectations. This
included an impressive increase of 153% in streaming customers to 404,000
2
by year end,
including customers acquired through the Lightbox and RugbyPass acquisitions, up from 160,000
in the previous year.

Throughout FY20 we maintained our focus on streaming while super-serving our satellite
customers. We successfully launched Sky Sport Now in August 2019 with 12 dedicated HD
streamed sport channels and in February 2020 we completed the acquisition of Lightbox,
strengthening Sky’s position as the leading local provider of paid entertainment streaming

2
Streaming customers include Lightbox bundled wholesale subscribers. These subscribers account for
approximately 52% of total entertainment streaming customers as at 30 June 2020.

services. The successful launch of our new Neon platform on 7 July 2020 combines the best of
both Lightbox and Neon products into one compelling offering with enhanced features and an
extensive range of high-quality content delivered at a competitive price point.

At the same time, new initiatives saw a meaningful rise in satellite customer retention rates, as
net customer loss reduced to 5.5% from 6.4% in the previous year, and we achieved net growth
in the final month of the year. Our Sky Go companion app is highly valued by our satellite
customers to deliver a complementary streaming option for viewing their content on the go, and
we plan to launch our enhanced Sky Go product in the second half of FY21. In addition, the
recently announced confirmation of a new satellite agreement with Optus further demonstrates
our commitment to this important and loyal customer base whilst also delivering increased
functionality, flexibility and overall reduced cost.

Sky’s acquisition of RugbyPass in August 2019 expanded our reach into the global rugby market
and opened up new avenues for future growth. While the current uncertainty surrounding the
availability of international rugby has slowed progress in our RugbyPass streaming business, we
have been delighted to be able to work in partnership with SANZAAR and NZ Rugby to bring
Super Rugby Aotearoa to a global audience in 60 countries. Continuing strong demand across all
RugbyPass platforms indicates ongoing audience appetite, with over 3 million unique views and
over 16 million hits on social media during April 2020, up 54% and 60% respectively on the prior
year. Our immediate focus has been to quickly pivot to a lower cost model to capture
opportunities, and whilst uncertainty remains, we continue to see potential for future growth.
Looking to FY21, Sky announced its intention to enter the broadband market. We see more and
more customers watching content over broadband on the device of their choice, and it makes
sense for us to ensure that our customers can view their great content over a broadband service
that is built for entertainment and delivers the same high quality experience that our satellite
customers receive. It also enables us to deepen our customer relationships and offer customers
even more value from their Sky bundle. A number of Sky staff are already using Sky’s broadband
service and it will be extended to a trial group of customers before Christmas, followed by a full
launch in 2021.
Organisational changes complete; continuing focus on costs
Changes to work practices necessitated through the Level 3 and 4 lockdowns were handled well
by the Sky team, which quickly moved to working from home arrangements. The transition
provided an opportunity to accelerate a number of transformation initiatives such as digitising a
range of support services that will deliver ongoing efficiencies. Our transition to a modern,
customer-led multi-media business has involved reorienting our focus and becoming a leaner,
more responsive and collaborative organisation. The major changes are now completed and have
involved a reduction in staff numbers of 18% over the past year with new structures now
embedded and delivering ongoing net annual cost savings of approximately $10 million from
FY21.

Our sharp focus on costs will remain a strong theme for our business in FY21 as we lock in the
gains made during FY20 and continue to innovate and transition to a lighter capital model. The
sale of OSB in early FY21 is further evidence of management’s focus on allocating capital
efficiently with this decision alone leading to a reduction in future capital investment of around
$50 million over the next few years. The faster-than-expected return of sport is likely to have an

impact on operating expenses, however the second half of FY20 has demonstrated Sky’s ability to
flex our cost profile in line with revenue.

Outlook
At the time of the capital raise, Sky provided a view on FY21 performance which was based on
expectations regarding the gradual return of live sport in the first half of FY21 before a full return
in H2 FY21. The faster return of sport than envisaged in this scenario will lead to higher revenues
and commensurate increases in programming and production costs as signalled at the time.
Whilst there is continuing uncertainty and we remain cautious, based on management’s current
assumptions regarding the sporting calendar, Sky expects to deliver results for the year ending 30
June 2021 as follows:

$m FY21 scenario Revised FY21 Outlook
3

Revenue 610 – 640 660 – 700
EBITDA 100 – 130 125 – 140
NPAT 5 – 15 10 – 20
CAPEX 40 – 50 45 – 55

The prudent steps taken in the renegotiation of our banking facilities and strengthening the
balance sheet through raising capital see us entering FY21 in a strong financial position, however
we recognise that the ongoing uncertainty caused by the COVID-19 situation is likely to remain
for some time.

The Board has therefore determined that no final dividend will be payable for the FY20 period.
The Board currently intends to reinvest available free cash flow during FY21 and will re-evaluate
the commencement of dividends following the completion of that period.

The Board and Executive team are confident in Sky’s ability to navigate the ongoing impact of
COVID-19 and to deliver on the refreshed growth strategy.

ENDS

Sky will host a webcast and conference call briefing to discuss the results at 10.00am NZST on
Thursday 10 September 2020. Details on how to participate are as follows:
• Live via video webcast (please note registration is required beforehand):
https://globalmeet.webcasts.com/starthere.jsp?ei=1352190&tp_key=b5faa4164a

• Live via teleconference (for audio only and those who would like to ask questions):
Please join the event conference 5-10 minutes prior to the start time using the Participant
Passcode 778845.
Have the conference call you:
With ‘click to join’, there is no need to dial-in. Simply click the link below and enter your information
to be connected. Note: the link becomes active 15 minutes prior to the scheduled start time.

3
Subject to no adverse change in operating conditions, including future economic impacts flowing from
COVID-19.

https://events.globalmeet.com/Public/ClickToJoin/ZW5jPUU2SFI4S2hvSUNDZWlDMU9Hb1VNWE5za
Hl1NW5jVGVodEtGUTJ0WFZJNjQvd0pnbkdwcFRwdz09
Or to dial in:
‘Click to join’ is the easiest way to join the conference. As an alternative, you can join by dialling one
of the access numbers below.
Participant Passcode: 778845


Authorised for release by the Board of Sky Network Television Limited.
For investor enquiries, please contact: For media enquiries, please contact:
Blair Woodbury Chris Major
Chief Financial Officer Director of External Affairs
P: +64 9 579 9999 P: +64 29 917 6127
E:
blair.woodbury@sky.co.nz E: chris.major@sky.co.nz

LocationPhone TypePhone Number
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United States/CanadaTollfree/Freephone800-289-0459

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

Results for announcement to the market
Name of issuer Sky Network Television Limited
Reporting Period 12 months to 30 June 2020
Previous Reporting Period 12 months to 30 June 2019
Currency NZD
Amount (000s) Percentage change
Revenue from continuing
operations
$747,646 6.0% decrease
Total Revenue $747,646 6.0% decrease
Net profit/(loss) from
continuing operations
$(156,772) 74.2% decrease
Total net profit/(loss) $(156,979) 74.2% decrease
Final Dividend
Amount per Quoted Equity
Security
Nil final dividend
Imputed amount per Quoted
Equity Security
Not Applicable
Record Date Not Applicable
Dividend Payment Date Not Applicable
Current period Prior comparable period
Net tangible assets per
Quoted Equity Security
$0.029 $(0.246)
A brief explanation of any of
the figures above necessary
to enable the figures to be
understood
The adjusted net profit of $41.0 million, adjusted for the impact
of the $177.5 million goodwill impairment charge, $25.0 million
of other non-recurring costs and $3.2m of content write-offs is a
decrease of 57.9% over the $97.4 million adjusted net profit
reported in the previous year. For further explanation refer the
financial commentary and audited financial statements attached.

Authority for this announcement
Name of person

authorised
to make this announcement
Blair Woodbury
Contact person for this
announcement
Blair Woodbury
Contact phone number 027 250 0966
Contact email address Blair.Woodbury@sky.co.nz
Date of release through MAP

10/09/2020

Audited financial statements accompany this announcement.

---

SKY NETWORK TELEVISION LIMITED
2020 Annual Report

Contents
Chairman’s Update 2
CEO Update and Q+A 4
At a Glance 8
Summary of Strategic Priorities 10
Our Customers 12
Our Content 14
Our Products 20
Our People 24
Our Community 26
Our Board of Directors 28
Financials 30
Other Information 93

Sky / 2020 Annual Report
1
This Annual Report is dated 10 September 2020 and is signed for and on behalf of the Board of Directors by:
Martin Stewart
Director and Chief Executive
Philip Bowman
Director and Chairman

Welcome to our Annual Report for the
2020 financial year. To our long-standing
shareholders, thank you for your continued
support in 2020, and in particular to those
who participated in the capital raise.
We also recognise and thank those who
have chosen to become new investors in
Sky during this year.
Chairman’s Update
2

Sky is a business in transformation,
positioning itself for future growth.
Whilst few of us could have predicted
the disruption that was to follow with
COVID-19, the Sky team responded
professionally during the initial
lockdown period and subsequent
restrictions. As an essential
service we continued to support
our customers throughout, always
with a strong focus on the safety
and wellbeing of staff, customers
and other stakeholders. Working
during Level 4 lock-down provided
an enforced catalyst to challenge
many of our processes and we have
been able to embed many of the
lessons as permanent improvements
in the way that we will operate going
forward. On behalf of the Board, I
thank Martin, the leadership team
and all Sky staff for their work and
commitment in a challenging year.
I noted in my letter in the Interim
Report in February that delivering
on Sky’s strategy would require a
strengthened capital structure. Faced
with the additional challenge of the
COVID-19 pandemic, the Board moved
decisively with a capital raise. With net
cash on the balance sheet Sky is now in
a much stronger position to navigate
any further headwinds from the virus
whilst continuing to implement the
refreshed growth strategy. As we
foreshadowed at the time of the
capital raise, further review of the
assumptions underlying the carrying
value of goodwill has been undertaken.
The Board is required to assess the
fair value of intangible assets at
each reporting date. The decision to
make a further non-cash write down
of goodwill reflects the combination
of heightened uncertainties over key
business drivers arising from COVID-19
and the current share price, supported
by an independent valuation.
Successfully delivering a compelling
broadband proposition for Sky
customers is a key priority, as is
delivering our ongoing technology
innovation programme, where we
seek to enhance the experience
of customers at every stage of
their interaction with Sky.
For three decades Sky has played
a vital role in the sport ecosystem
of New Zealand supporting an
increasing number of the codes,
whilst bringing content with great
production values to Kiwis across
the country. New Zealand is not a
large market by world standards
and bearing in mind that there are
limits to the amount that customers
are prepared to pay for content,
particularly in uncertain economic
times, we recognise the careful
balance required between meeting
the expansion appetite of sport codes,
sustaining our sport partnerships
and prudently managing costs
to ensure shareholder returns.
As part of the process of refreshing
the composition of the Board, it
was good to welcome Joan Withers
and Keith Smith to the Sky Board
in September 2019 and April of
this year respectively. Both have
already made a positive impact
and I look forward to their ongoing
contribution. Susan Paterson has
announced her intention to retire
from the Sky Board in October; her
contribution will be missed, and I
would like to recognise and thank
Susan for her service and contribution
to Sky over the last five years.
Thank you again for your investment
in and support for Sky. I look forward
to speaking with you at the Annual
General Meeting in October.
Philip Bowman
INDEPENDENT CHAIRMAN
The Annual Report provides an opportunity to look across
the past 12 months, stepping back from the inevitable focus
since March 2020 on mitigating the local and global impacts
of COVID-19 on all aspects of the Sky business. Despite what
are arguably the most uncertain times for many decades, Sky
continued to make good progress in executing on its strategy,
and delivering against the milestones endorsed by the Board.
Highlights include:
Satellite
We have continued our
improvement of satellite customer
retention and achieved net
growth in satellite customers
in the final month of FY20.
We renewed our contract with
satellite provider Optus which will
deliver a better technical solution
with lower pricing and greater
contractual flexibility to ensure
we can optimise capacity and
cost into the future. This renewed
arrangement positions Sky to
continue to serve our core base
of satellite customers with the
reliable delivery mechanism that
for many Kiwis remains the chosen
way to receive our great content.
Streaming
We have delivered significant
growth in the number of streaming
customers. Our purchase of
Lightbox and the subsequent
merging of this service with
our Neon streaming product
has progressed ahead of our
expectations, and we are now
positioned as the most popular
locally-owned subscription
video on demand (SVOD)
service in New Zealand.
Broadband
We announced Sky’s intention to
enter the broadband market to
broaden customer relationships
and add significant additional
value to them. We look forward
to revealing full details of a
broadband proposition that
will be differentiated on
quality, service and price.
Sky / 2020 Annual Report
3

We are living in extraordinary times.
As we reflect on the past year for
Sky it is inevitable that we are
drawn to the last few months of
COVID-19 and what it has meant
for our business, our people, our
partners and our investors.
CEO Update and Q+A
4

I am immensely
proud of the way
the Sky team
responded to the
COVID-19 challenge,
staying focused on
meeting the needs
of our customers
and continuing
to deliver on our
strategy. Here
are some of my
personal highlights
from the last few
months:
• The superb engagement from customers during
the lockdown period, with strong viewership and
positive feedback, including a pleasing improvement
in NPS. It was a reminder of the special role that
Sky plays in the lives of our customers, entertaining,
informing and inspiring with our great content.
• The ‘can do’ approach of our people, who pivoted to
working from home in less than 48 hours, embraced
the Zoom culture, and took a mature approach to
the restructuring that we had to undertake.
• The engagement with our sport partners, who worked
constructively with us to deliver interesting content
when live sport was temporarily on hold. We successfully
negotiated rights fees for the lost season, recognising
these are difficult times for everyone and trying to
reach solutions that were fair for all. We are now
working closely with all of our sport partners to continue
to deliver great content in the coming months.
• We appreciated the swift support of our entertainment
studio partners to help secure additional value
for our affected sport package customers.
• Hearing that our ‘Streaking Baby’ (Life Needs
More Sport) ad was chosen as New Zealand’s
favourite ad. It’s great to make people smile.
• The successful launch of new Neon, which merged the
best of Lightbox and Neon into one superb streaming
service that has quickly become the most popular
locally-owned Subscription Video-On-Demand (SVOD)
service – nicely timed for our customers to have great
content to binge on while ‘staying in’ is the new reality.
• The feedback from our commercial customers when we
let them know that we were discounting and often fully
pausing their payments while COVID-19 restrictions were in
place. Our customers in the hospitality and accommodation
industry have been particularly hard hit and we have
done our best to support them through this time.
• I look forward to speaking with you at the
Annual General Meeting in October.
Q+A on next page
Sky / 2020 Annual Report
5

What are the main aspects of Sky’s strategy?
Let’s start with our goal, which is to connect our customers
with the sport and entertainment content they love, in ways
that work for them. We do that by securing the rights that
matter, delivering it across all platforms and devices, using
customer insights to drive our decisions, and innovating in the
digital space to meet current and future customer needs.
As a modern multi-media company that means delivering across the
four pillars of Satellite, Streaming, Broadband and RugbyPass.
Why is broadband so important?
There’s the obvious adjacency as a mechanism for high quality delivery of
our streaming and Video-On-Demand services. But it’s much more than
that. Offering a great broadband experience, differentiated on service,
price and quality, means we can deepen our customer relationships and
offer them much more value from their Sky bundle. We’re getting great
feedback from customers about what they want to see from us, with a
significant number of our satellite customers indicating they would buy
broadband from Sky based on our customer service reputation alone.
When is Sky Broadband coming?
Sky Broadband is already a reality, with successful in-home trials
underway with Sky staff. The next phase of testing involves
offering Sky Broadband to a group of customers to enjoy and
provide feedback on, and we remain focused on a FY21 launch.
What changes have you made internally?
Our transformation initiatives are designed to build a leaner, more
responsive and collaborative business. Clearly there is a cost-out
focus, with an 18% reduction in staff and ongoing emphasis on cost
control. But the main goal is to become a modern, digital, consumer-
led multi-media business, and we are well positioned to deliver it.
One of the positive things that emerged from the COVID-19 restrictions
was how well our people were able to work remotely. As a result
we are implementing a new hybrid flexible working model, with a
‘work anywhere’ ethos. Many of our people are keen to embrace it,
and it also means we can look to reduce our property footprint.
You talk about being customer-focused, but
how do you really know what customers want?
In the last year we have made significant progress with data and
insights, including creating a great initiative called Sky Nation
with over 20,000 highly engaged customers giving us regular
feedback on their Sky experience and what they want from us.
Our new ‘big data’ partnerships with specialists like Dot Loves
Data enable us to marry Sky viewing data with external data
sources to provide deeper insights, and our new sport viewing and
analytics platform enables deeper analysis of what sport fans
are watching and how they are watching. We continue to expand
our insights capability, and it’s a valuable resource for Sky and
our partners to become even more customer focused.
A key part of being
able to continue to
deliver and perform
was ensuring we
were in a strong
financial position, and
we are grateful for
the support of our
investors in raising
equity. It means we
have entered the 2021
financial year with a
strong cash position
and the ability to
implement key aspects
of our strategy.
6

What’s happening with sport in 2020 and 2021?
We’re having positive discussions with all of our sport partners,
and there’s a real commitment to delivering compelling sport
competitions for fans. It’s almost certainly going to be different
from what customers are used to, and some of the COVID-19
restrictions mean we’ll have to keep flexible, but it also means
there’s a great opportunity to try new things and innovate.
What’s happening with RugbyPass?
We bought RugbyPass in August 2019 to expand our reach into
the global rugby market and to open up new avenues for future
growth. While the current uncertainty surrounding the availability of
international rugby has slowed progress in the streaming business,
it’s been great to work in partnership with NZ Rugby and SANZAAR
to bring Super Rugby Aotearoa to audiences outside of New Zealand
through RugbyPass. Continuing strong demand across all RugbyPass
content platforms, with over three million unique views in April, up 54%
on the prior year, indicates ongoing audience appetite. Our immediate
focus has been to quickly pivot to a lower cost model to capture
opportunities, and we continue to see potential for future growth.
How are you feeling about entertainment
content and the threat of big studios
going direct to consumer?
One of the positive things that came out of the COVID-19 lockdown
was the reinforcement of the ‘power of the bundle’. Our customers
embraced all aspects of our entertainment content, and even with
the temporary paucity of live sport only 8% of our satellite sport
customers changed their subscriptions. We were able to keep our
loyal customers entertained and engaged because of the deep
range of great content we have available. So yes, we absolutely
acknowledge that trends are shifting, including towards direct-
to-consumer in some markets, but we believe our global partners
continue to see the value of using Sky to reach their New Zealand
fans and the value of our bundle and strong customer relationships.
We also offer the unique ability to deliver their content across
satellite, streaming and free-to-air, and the ability to bundle their
apps with our existing offers and upcoming broadband service.
We feel ready for FY21. On behalf of the team here at Sky,
I would like to thank you for your ongoing support.
Martin Stewart
CHIEF EXECUTIVE
Sky / 2020 Annual Report
7

FY20 Highlights
An incredible range of content in New Zealand
Delivering great content in all the ways our customers want
70+
Satellite channels
12
Dedicated sport
channels and streams
$82.7m
153%
Free cash flow
Growth in streaming
customers
$747.6m
$13
.95
Revenue
Launched new Neon at
attractive price point
40
Sky Go channels
streaming online 24/7
1000s
of TV shows and movies
On Demand
Sky is New Zealand’s
leading digital
multi-media
business committed
to connecting our
customers with
the sport and
entertainment
content they
love, in ways that
work for them.
Through our partnerships
with leading studios and
sport rights holders, expert
curation and award-winning
content production, we
provide New Zealanders with
the best range of acquired
and created content,
including sport, movies,
shows, documentaries,
music and news.
We offer New Zealanders
the choice to watch what
they want, when they want,
how they want, by delivering
our content across a range
of subscription satellite and
streaming products. Our
free-to-air channel Prime
opens a window into Sky
for all New Zealanders, and
our international RugbyPass
business delivers rugby to
a more global audience.
This year we’re celebrating
our 30th birthday. As a proud
New Zealand company, we’re
committed to supporting our
sport and creative sectors,
and our local communities.
50+ different sports and events,
from grassroots to the elite
At a Glance
NRL
V8 Supercars
PGASky Sport Breakers
All Blacks
Netball
8

30
992
Celebrating
30 years
Sky Crew
+9pts
990k
NPS improvement through
customer first approach
Customers
$23.5m
1.2m
Tax contribution in New Zealand
Customer calls supported by
our New Zealand based team
A world of acquired content
International
News
Dedicated children’s
channels and
services, supporting
safe viewing
Telling local stories
in partnership
with NZ On Air
Once Upon a Time
in Hollywood
Sis
WestworldGo Further South
Love IslandHoney Wars
The Handmaid’s Tale
Outlander
Aussie Gold Hunters
Strong entertainment
partnerships
coming soon
1) Includes third party bundled wholesale subscribers from the Lightbox acquisition. These subscribers
account for approximately 52% of total entertainment streaming customers at 30 June 2020.
© 2019 MGM Television Entertainment Inc. and Relentless Productions, LLC. THE HANDMAID’S TALE is a trademark of Metro-Goldwyn-Mayer Studios Inc. All Rights Reserved.
1
An incredible range of content in New Zealand
Sky / 2020 Annual Report
9

Our ambition
We aim to delight our customers
across all platforms and devices,
and we’re innovating in the
digital space to meet current
and future customer needs.
We focus on securing the rights
that matter, and use customer
insight to drive our decisions.
We are transforming into a
modern multimedia company,
with four strategic priorities.
Sky’s goal is to connect
customers with the sport
and entertainment they
love, in ways that work
for them.
How we’re enhancing our
position for the long term
For our customers, our investors, our people,
our partners and New Zealand
10

What matters
most
Our strategic
priorities
Our customers
Delighting our customers by
being a truly customer and
data-led business
Satellite
Strengthen our significant core
business through continued reliable
delivery and enhanced value perception
Streaming
Grow our entertainment and sport
streaming business. We are using digital
innovation to improve the customer
experience and move to a lower cost model
Broadband connectivity
Grow customer relationships with
broadband offers, differentiated on
quality, service and price
RugbyPass
Develop and grow an international rugby
content business and become the online
destination for fans globally
Our community
Making a positive difference to
New Zealand’s sport and creative
sector and our local communities
Our content
Sport and entertainment
leader through trusted
partnerships, expert curation
and innovative storytelling
Our products
Connecting our customers to the
content they love, in ways that work
for them - now and in the future
Our people
Doing right by our people by focusing
on our capability and culture, ensuring
our ways of working meet the needs
of our customers and partners
Sky / 2020 Annual Report
11

Our
Customers
Delighting our
customers by being
a truly customer and
data-led business
This year we’ve continued to build a culture that
genuinely listens and places customers at the heart
of our decisions. We’ve developed more capability
in the insights and customer experience areas of
our business. We’ve been talking to our customers
to understand what matters most, in order to
create meaningful experiences and exceed their
expectations now and in the future.
Sky Nation
Sky Nation is our customer community helping us
to uncover direct, agile and actionable insights
to make more data-driven decisions at Sky.
Launched in April 2020, we were thrilled to see our
Sky Nation community grow rapidly, with 23,000
customers from across New Zealand opting in to
engage with us to help make a positive impact on
the products and services that matter to them and
hear about the outcome of their feedback.
We use Sky Nation as a panel to get feedback on all
sorts of projects, initiatives and new ideas – we’ve
had 40,000 responses to a range of topics including
the appeal of Sky’s offering and channels, what
customers want from Sky Broadband, and what
fans want to see in future sport competitions.
The feedback we receive through Sky Nation will help
every part of Sky, from marketing and sales through to
content and technology, work collectively to craft market
leading propositions and deliver customers’ expectations.
In doing so we aim to deepen our customer relationships,
increase customer satisfaction, and consequently
loyalty; growing long term value for our investors.
Harnessing data and
actionable insights
With a real time
understanding of our
customers
To shape business
decisions, delight our
customers and create
life-long fans
Our Sky Nation community
23,000
Sky customers
20%
55%
44%
1%
65%
Customers from
Cape Reinga to Bluff
Happy or
delighted
with Sky
in rural NZ
Male
Female
Gender
Diverse
12

“ I would like to see Sky better
reward your long-standing
customers.”
What we’re hearing from
our customers
“ Sport coverage cannot be
bettered by any other company.”
“ I thought it was excellent that Sky
offered free movie channels during
the lockdown. Well done Sky - this
has been greatly appreciated.”
“ It’s great being able to only buy a
pass for the time you want to use
it. Has a wide range of sport.”
“ Great service from Kiwi
based call centre, very helpful,
pleasant and onto it.”
“ I love the restart feature on the
movies, ability to download to
my box, Box Sets for binge
watching sessions.”
“ As a family, we love to watch
movies. During lockdown I had
upgraded to the movies package.
It was super easy to upgrade with
the help of a supportive team
member online. I also love how we
can purchase individual movies to
watch as a family cheaper than
going to the actual movies! Bonus!”
“ I like the large variety of shows ...
I got Neon primarily for Game of
Thrones, but have discovered a
wealth of up to date material.
I am so so impressed.”
“ Have been a member since
1995 and could not live without
Sky. Never had an issue, I get
variety and the ability to watch
through Sky Go.”
“ The Sky box being Wi-Fi
compatible is such a bonus,
now Sky On Demand is at a
click of a button.”
“ I like the ability to see it all in one
place - free TV, sport, movies etc.”
“ I think apart from the free
channels, customers should be
able to choose the channels
they want.”
Sky / 2020 Annual Report
13

A story is powerful. It has the ability to connect
humans to their wildest imagination, their history
and whakapapa, their feelings, igniting their
hopes and dreams. Whether they’re an aspiring or
armchair athlete, an adventurer, a newly inspired
isolation foodie or just a kid at heart, Sky brings
New Zealanders stories that connect with the heart,
and the content they love in ways that work for them.
Our
Content
Sport and entertainment
leader through trusted
partnerships, expert
curation and innovative
storytelling
14

Sky / 2020 Annual Report
15

Local content, Sky Originals
The keyword for local content
is diversity. Diverse teams
producing diverse and inclusive
local content, much of it funded
with the support of NZ On Air.
Comedy special Sis and upcoming
drama series Inked are scripted
projects which came from an initiative
supporting new voices. Sis is the first
Polynesian project to premiere on
Comedy Central New Zealand with
huge engagement from NZ, Australia
and around the world, and Inked will
be the first largely Chinese language
series to premiere on a major free to
air network.
The impact of COVID-19 forced
the creative community to go into
overdrive and Prime’s drama INSiDE
was created during lockdown.
Recent local factual shows include
Honey Wars, an observational series
shot in the Far North inside a Māori
owned mānuka honey business, and
the upcoming Growing Dope, following
the ups and downs of a medicinal
cannabis business on the East Coast in
the heart of Ngāti Porou.
Buzzworthy and
bingeable shows
Premium content lovers were
spoiled for choice across Sky and
Neon with new seasons of the
most talked about shows like
Westworld, Peaky Blinders and
Outlander and the final seasons
of Homeland and Ray Donovan.
New obsessions Watchmen, Years
And Years and I May Destroy You
captivated audiences globally
and locally, tapping into timely
conversations around diversity,
politics and consent. British
content overperforms with Sky
audiences, from the miniseries Quiz
that delved into the Who Wants
To Be A Millionaire scandal of the
early 2000s to the sumptuous
Jane Austen adaptation Sanditon
from the BBC.
Coming in hot from
Hollywood
With mega-hits such as Jojo Rabbit,
Joker, Aquaman and Once Upon A
Time in Hollywood our blockbuster
movie slate is unrivalled, and with
quality animated and family titles
like Abominable, Spiderman: Far
From Home and The Secret Life Of
Pets 2 there is plenty to keep the
kids entertained.
We make it easy for our customers
by bringing a range of great content
together in one place, whether on the
big screen via satellite or on device
with Neon or Sky Go.
Our deep partnerships with world
renowned storytellers enable
us to share the best of global
entertainment, and we also showcase
strong local stories, often working
with NZ On Air. This year we renewed
multi-year partnerships with:
BBC Studios, home of BBC UKTV,
BBC Earth, BBC World News and
new preschool channel, CBeebies;
ViacomCBS, home of Comedy Central,
MTV, Nickelodeon, Nick Jr, MTV Hits,
MTV 80’s and Nick Music; Sky News
Australia and Vice. We also renewed
our partnership with Rialto, marking
20 years of the Rialto Channel and
a long-term commitment to New
Zealand’s independent and festival
movie and documentary channel. And
we developed new partnerships with
Hopster, who offer diverse storytelling
for kids; and CuriosityStream, for the
ultimate learner.
The best of real-life
entertainment
Perennial hits from our exceptional
factual and lifestyle channels continue
to deliver large audiences and whether
our customers want edge-of-their seat
viewing or a lean-back experience, Sky
has them covered. It seems viewers
just can’t get enough of Gold Rush,
Love It or List It Australia or Shark
Week. From the Australian bushfires
to the global pandemic, Sky’s array
of news channels kept our customers
informed around the clock. HBO true
crime documentary series’ McMillion$
and I’ll Be Gone In The Dark proved
popular across all platforms, while
at the opposite end of the reality
scale Love Island UK had massive
engagement and drove acquisition for
Neon.
For our littlest customers
The addition of CBeebies to our
suite of family channels further
strengthened our offering and
bolstered video-on-demand in the
kids space across both Sky and Neon,
while the recent launch of Nick Music
provides a safe space for kids to enjoy
their favourite music videos, further
expanding the powerhouse brands of
Nick and Nick Jr.
The Best in Entertainment
The content and media
landscape continues to
change at pace. Consumers
have plenty of choice, there’s
no question about that – but
it’s also a pretty confusing
landscape.
16

Game of Thrones
Most downloaded series
on Sky On Demand
Big Little Lies
Most watched series on Neon
Crazy Rich Asians
Most watched movie on Neon
Bohemian Rhapsody
Most watched movie
on Sky Go
Aussie Gold Hunters
Highest rating factual
content on Sky
Aquaman
Highest rating movie on Sky
Movies & most downloaded
movie on Sky On Demand
Vera
Highest rating entertainment
content on Sky
Love Island UK
Attracted new customers
and a different type of
content for Neon
Polynesian comedy
Sis breaks new ground
130+
April 18
2020 Emmy nominations
across Sky. We also
have New Zealand’s
largest range of 2020
Emmy nominated
content in the televised
primetime categories,
with 69 nominations
Neon’s biggest streaming
day of FY20
Through Sky Originals, we’re committed to
supporting and producing an increasingly diverse
range of local content for Sky’s platforms to reflect
a broad range of New Zealand communities.
Made with the support of NZ On Air, Sis is a
spin-off of the award-winning web series Baby
Mama’s Club and yet again broke fresh ground
for content in New Zealand.
The comedy sketch special follows the ‘ride or die’
friendships of cousins Malia, Gee Gee and Miki.
They’re street, stylish, and hilariously relatable.
As they navigate through a series of stand-alone
misadventures, the Polynesian millennials learn
about life and sisterhood.
Sky / 2020 Annual Report
17

Life Needs More Sport
Connecting
A significant change in the way
we tell our story as the home of
sport is through our award-winning
marketing campaigns. Everyday New
Zealanders and industry experts
have repeatedly voted our Life Needs
More Sport advertisements as their
favourites. Our Summer of Sport
campaign featuring a cheeky toddler
on a typical Kiwi beach perfectly
captured the joy and inspiration
sport delivers week in, week out.
We reach hundreds of thousands of
New Zealanders every day and week
through our social media platforms,
engaging them in conversations about
their favourite sports and athletes
and our in-house promotions team
creates and despatches eye-catching
advertisements for the vast array of
content we offer on Sky Sport.
A glance at our rugby offer
demonstrates this best, with premium
rugby featuring the All Blacks, Super
Rugby, the Black Ferns, Māori All
Blacks, international competitions
such as the Gallagher Premiership,
Super Rugby Australia, TOP14 or the
Men and Women’s HSBC Sevens, right
through to domestic competitions
with Mitre 10 Cup, the Farah Palmer
Cup, First XV and club rugby from
among the 600 plus clubs throughout
Aotearoa.
The variety can be seen across a host
of other sports including rugby league,
netball, football, golf, motorsport,
athletics, cricket, cycling, winter sports,
tennis, yachting, surfing, basketball,
darts, snooker, badminton, and more.
In short, “Life Needs More Sport” and
Sky Sport is the one to provide an
inexhaustible supply.
30 years of sharing the best
and most diverse range of
sport with New Zealanders
has been at the heart of the
Sky promise. The breadth and
depth of our sport content is
nothing short of exceptional.
The Home of Sport
2019 and 2020 has seen rights
secured across a wide variety of
sport and competitions from the
PGA Championship and Masters,
through to the Commonwealth
Games, Rugby, Netball, Supercars,
ICC Cricket tournaments, and
deals with Cricket Australia
(including Big Bash), BCCI and IPL.
Thrill-seekers can now catch up
with the wildest tricks and events
featured by Red Bull thanks to a
long-term partnership to share
their content across all Sky Sport
platforms. We’re delighted to
partner with World Surf League
to showcase the best from around
the globe in this fast-growing and
new Olympic sport. Our landmark
2019 deal with New Zealand Rugby
reflects the unique love Kiwis have
for the sport which unites and
inspires us week in, week out.
But it’s about more than accessing
broadcast rights. As the Home
of Sport, we are invested in the
growth of sport at all levels of
the game and all parts of our
community. This means supporting
and sponsoring grassroots and
community sport (Sky Sport
Next, Rugby League Roadshows),
as well as women’s sport (Kiwi
Ferns, Women’s Warriors, Tall
Ferns, White Sox, Netball NZ).
This approach strengthens our
relationships with key sport partners
and athletes through understanding
their challenges and supporting our
partners and athletes in tackling these.
We are committed to innovating the
sport experience at every touchpoint
– be that in broadcast, through
digital platforms, or in stadium at
Sky Stadium and Eden Park. As sport
and its fans change over time we’re
focused on reaching future fans
through associations with growth
sports like basketball and football
through strong relationships with the
Sky Sport NZ Breakers and Wellington
Phoenix. These sit alongside our
connections with established sports
in New Zealand – which we continue
to nurture such as netball, rugby and
rugby league.
Free to access
While delivering the best content
possible to our customers is our top
priority, we have also committed to
providing important content free

to access.
Examples are many and varied including
the finals of the Cricket World Cup and
Netball World Cup, key Super Rugby
Aotearoa games on Prime, the ANZ
Premiership Grand Final, and free

access to Silver Ferns, Constellation
Cup games, Vodafone Warriors, Black
Ferns and Kiwi Ferns matches.
18

Against a backdrop of a global pandemic and thanks to the co-
operation of the entire population, New Zealand Rugby pulled
off a spectacular tournament in Investec Super Rugby Aotearoa;
captivating rugby fans here and around the world.
322,260 people flooded through the gates with an average crowd of 17,903; up 55.35%
on the 2019 regular season and up 65.23% on 2020 pre-COVID. Sky Sport viewership
increased 65.2% (vs pre-COVID) across all our platforms with fans engaging on Sky
Sport, Sky Sport Now and Sky Go, and in pubs and clubs throughout New Zealand.
Initially the novelty of being able to play and attend live sport was likely a huge
contributor to the success of the competition, but it quickly became evident that the
finest players in the world were meeting each week in a battle to win big in some of the
most creative, exciting and explosive rugby we have seen in a while.
The Sky Sport crew tested a variety of new initiatives designed to heighten interest in
the games such as Player Cam, Fan Cam and in-game coach interviews. The stadia
also pulled out all the stops to provide fun-filled experiences for families and fans.
Sky congratulates everyone involved in Super Rugby Aotearoa. Bring it on in 2021.
22,634
All Blacks v Wallabies
17 August 2019
Top sport event on Sky
Sport and Sky Sport Now
Hours of live sport
The way sporting codes have
pulled together to get back up
in the face of COVID-19 just
goes to show how sport itself
builds resilience.
In addition to the success of rugby,
Sky Sport has been right behind
the ANZ Premiership, the Vodafone
Warriors who have taken on the
challenge of competing in the re-
started NRL away from family and
friends, and the Wellington Phoenix
who have also competed in the
A-League away from home.
Out of adversity comes opportunity
and Sky Sport has supported,
broadcast and live-streamed the
unique and unprecedented events such
as the Sal’s NBL Competition, the
New Zealand Tennis League and the
New Zealand Badminton League.
COVID-19 brought out the best in
the Sky Sport team with popular
new shows launched and produced
remotely during lockdown including
Isolation Nation, NetFit, Netball Zone
and Sky Sport Presents The Pod. The
latter show digs deep into some of
the personal histories of outstanding
leaders in their respective sporting
fields and has generated substantial
coverage in mainstream media.
Sky / 2020 Annual Report
19

We know that we have a privileged role in
our customers’ lives – we entertain them,
we amuse them, we inform and inspire them.
We know our customers choose Sky for our
great content – and we’re obsessed about
delivering it in ways that best meet their needs.
The breadth and depth of our sport and
entertainment content and the way in which
our customers can access it means that Sky
can be in the lives of all New Zealanders.
Our
Products
Connecting our
customers to the
content they love,
in ways that work
for them – now
and in the future
20

2 hours
Average hours customers
spend on Neon per day
Gangs of London
Most watched TV series
Joker
Most watched movie
Neon and Lightbox:
Better together
In February 2020 Sky purchased
the New Zealand streaming service
Lightbox. The recent merge of
Lightbox with our own streaming
service Neon has created a
powerhouse paid streaming service
for New Zealanders, bringing together
the finest features from both services
under a reinvigorated Neon brand.
The best hit TV shows, movies and blockbuster
movie rentals are now all in one place, and we’re
adding new content regularly. We’ve made the
platform easier to use, increased stability and
added new features. Customers can access
Neon on more devices than ever before, create
up to five profiles per account with profile-based
recommendations for a more personalised
experience, and enjoy a dedicated kids area with
parental controls for safer viewing.
With Download to Go, customers can download
their favourite shows or movies to mobile or
tablet devices to watch offline or while on the
move, and with movie rentals customers can
rent the latest digital release movies.
For $13.95 per month with no contract required,
the new Neon offers a world-class streaming
experience that delivers the best range of
quality content and value for money.
Since the migration to new Neon
Sky / 2020 Annual Report
21

Sky Sport Now:
Game-changing sport
streaming
Sky was the first company to bring sport
streaming to New Zealand, first with Sky
Go and then FanPass, which streamed
four sport channels 24/7 for four and a
half years. In August 2019 we changed
the game again when we transformed
FanPass into Sky Sport Now, adding eight
additional live channels including ESPN
plus a library of On Demand content.
Sky Sport Now provides customers with the choice
to watch all of Sky Sport’s great content on a range
of devices through a weekly, monthly or yearly pass.
No long-term contracts, instant access, and no Sky
Box needed. With its unrivalled line up of Live and On
Demand sport and huge range of feature content,
highlights and stats, Sky Sport Now is New Zealand’s
premiere sport streaming service.
Sky Sport Now simultaneously streams 12 high-
definition sport channels 24/7. That’s over 100,000
hours of sport streaming, and thousands of events
every year.
Over the past year we’ve continued to enhance Sky
Sport Now, making it available on more devices
and adding more features to meet customer needs.
Sport is best on the big screen and Sky Sport Now
customers can now watch sports content on smart
TVs from Panasonic, Sony, TCL, and Samsung, via
Freeview’s Android TV platform as well as Apple
TV and PlayStation 4. There’s so much sport on Sky
Sport Now that there are simply not enough hours
in the day to be able to watch it in real time, so
we’ve extended the catch-up features across more
platforms so fans don’t miss out on the action.
As New Zealand’s ultra-fast broadband access
and uptake increases, and more and more New
Zealanders choose to stream their sport content,
we’ll continue to optimise Sky Sport Now to ensure
we continue to deliver the best possible sport
streaming experience to New Zealanders.
22

Sky Nation insights
• Our own customers are
significantly more likely to
consider Sky Broadband due
to stronger brand perceptions
and the desire to bundle their
TV and broadband packages
• The majority of Sky customers
believe we are credible and
have a reputation for quality
service and reliable service into
Kiwi homes. Sky Broadband
can lean on our strengths of
reliable and quality service into
Kiwis homes
• Customers overwhelmingly
want us to focus on three
key areas; speed, value for
money and rewarding existing
customers for their loyalty
• Our base has strongly advised
they want a good value for
money bundles and prices for
broadband, and appear more
interested in long term value,
rather than one off deals or
upfront discounts
The future
of satellite
While Sky is embracing
a streaming future, we
remain committed to the
hundreds of thousands
of New Zealanders
who currently rely on
our satellite services to
receive their sport and
entertainment.
We’ve recently announced a revised
contract with our satellite provider
Optus. The updated agreement
enables Optus to build and launch
a new breed of satellite that is fully
configurable in space, meaning its
location, coverage, bandwidth and
capacity can be changed in orbit as
customer demands evolve – where
traditional satellites are limited by
on-ground configurations that can’t
be altered after launch. The new
software-defined satellite, Optus
11, will give Sky the ability to flex the
transponder capacity as customer
demands evolve over the course of the
ten year arrangement.
The revised contract with Optus gives
our customers comfort that we’ll be
able to continue to deliver our great
content to them without disruption as
we have done successfully for many
years. The New Zealanders who don’t
have access to streaming-capable
internet can rest assured that we
have them covered.
RugbyPass
RugbyPass is the premier destination
for rugby fans across the globe, with
news, analysis, shows, highlights,
podcasts, documentaries, and in some
territories live streaming of rugby
competitions all in HD.
RugbyPass’ subscription arm consisting
of sport streaming, on demand rugby
content and a linear TV channel
operates primarily in Asia, with smaller
outlets in Europe and Australia, whilst
the advertising-funded web content
and media arm has built the largest
independent rugby audience in the
major rugby markets.
Sky purchased RugbyPass in 2019 to
open up growth opportunities and in
particular, expand our reach into the
global rugby market. While COVID-19
has impacted our ambitions for the
sport streaming side of RugbyPass due
to the lack of global rugby product,
we’ve taken the opportunity to refocus
towards the audience media business.
Sky Broadband
In May we announced plans
to become a one-stop-shop
for connectivity and content
through the launch of a high-
performance broadband service.
We want to provide the best possible
sport and entertainment experience
to New Zealanders, and a high-quality,
high-speed broadband service built
specifically for entertainment helps
us do that. It also enables us to
reward our customers with greater
value whilst opening opportunities for
growth. The service will draw on our
wide reach, rich content offering, and
New Zealand based customer services
team. We’ve harnessed customer
insights to design Sky Broadband
around exactly what New Zealanders
want – super-fast reliable broadband,
genuine responsive service, simple
packages, great pricing and not a
word of jargon in sight.
We’ll first offer Sky Broadband to
our customers as an opportunity to
reward their loyalty. We’ll then focus
on the hundreds of thousands of New
Zealand homes that are fibre ready
through the Ultra-Fast Broadband
scheme but not yet connected.
3 million
on the prior year
unique views in April
54%
Sky / 2020 Annual Report
23

As we transform Sky into a leaner, more responsive,
collaborative organisation, we have farewelled a
number of our team members. Many have been a
part of the Sky family for many years, and we thank
them for their dedication and contribution to Sky.
Our superb team showed resilience and a strong
customer service ethos through the COVID-19
lockdown. The rapid pivot to working from home
while continuing to deliver Sky services, at a time
when our customers needed them most, has paved
the way for a hybrid flexible working policy aptly
dubbed ‘Anywhere Works’. It also accelerated our
digital capability and will have positive impacts on our
property needs.
As New Zealand and the world continues to grapple
with the challenges of COVID-19, the safety and
wellbeing of our people will remain a core focus. We
have worked with Sir John Kirwan and his Mentemia
team to deliver mental wellbeing programmes for
our people, including making available the Mentemia
wellbeing app and workshops to equip our people
with the tools and techniques to improve mental
wellbeing.
Critical to our organisation is a talented
and diverse workforce who share
a common goal – delivering for our
customers.
Our people are crucial to our success as a
business. We work hard to ensure that we
continue to attract the best, develop skills
and make Sky a great place to work.
Our People have experienced a lot of
change this year, and we recognise that
organisational change and the impact of
COVID-19 bring with them challenges and
uncertainty.
Our
People
Doing right by our people by
focusing on our capability and
culture, ensuring our ways of
working meet the needs of
our customers and partners
24

Sky / 2020 Annual Report
25

We’re proud to make a significant
social, cultural and economic
contribution to New Zealand.
This year Sky supported 992 jobs, invested millions
into our creative and sporting industries, and
continued our rich history of working alongside our
customers, crew and partners to make a positive
difference in our local communities.
Sky is a longstanding supporter of causes supporting
youth health and wellbeing. Special Children’s
Christmas Parties is a charity helping to bring some
joy to more than 10,000 special Kiwi kids at the
six events held across New Zealand. The parties
are filled with bouncy castles, games and gifts for
Kiwi kids in need, and Sky has been a part of these
special days for 14 years. The Starship Foundation
gives our children better health and brighter futures.
We’ve been a supporter since 2001 – ensuring Sky
channels are at every Starship bedside to entertain
(and sometimes just distract) patients and families
during their stay, and donating airtime to help the
Foundation raise awareness and donations for their
fundraising efforts.
Sport has a great part to play in fostering children’s
wellbeing, social skills and academic success. As the
Home of Sport, we’re committed to improving access
and engagement to sport for all New Zealanders.
In addition to supporting grassroots sport, over the
past year we have continued to donate thousands of
sport tickets to schools and junior club sports teams
throughout New Zealand.
This year we’ve been delighted to launch a number
of new initiatives that have been designed to make
a positive difference to New Zealand’s sport and
creative sector and our local communities.
Making a positive
difference to
New Zealand’s
sport and
creative sector
and our local
communities
Our
Community
26

Sky Community
Advertising
While New Zealand was in
COVID-19 lockdown in April, our
people pulled together to quickly
launch Sky Community Advertising,
an initiative designed to help raise
the profile of organisations making
a real difference in Kiwis lives,
particularly during COVID-19.
Since then, we’ve donated $1.9 million
of TV advertising airtime to community
groups working across a wide range of
causes - from youth development, health
and wellbeing, and domestic violence,
to organisations that support the arts,
small business and rural sectors.
Having received such a positive response,
we’ve since extended our offer to more
organisations who applied for Sky
Community Advertising and will continue
to do so over the months ahead to
make the biggest difference possible.
Sky Sport Next
Sky Sport Next was launched in
November 2019 in partnership with
the New Zealand Sport Collective.
This initiative gives more than 50 rising
and grassroots sports a greater profile in
the community to drive awareness and
participation. We do this by funding filming
and streaming from diverse events such
as Badminton and Basketball to Condor
Sevens, Golf Croquet, Canoe Racing,
Equestrian, Athletics and Water Polo. Tens
of thousands of New Zealanders have been
able to watch up and coming athletes of all
ages compete at events throughout New
Zealand on the free to access Sky Sport Next
YouTube channel. From time to time events
have also been screened on Sky Sport and
free to access on Prime.
Doing our bit to help,
through COVID-19
and beyond.
Sky has donated airtime to:
• White Ribbon
• Make-a-Wish Foundation
• Manaaki
• Rural Support Trust
• Read NZ Te Pou Muramura
• MusicHelps
• Graeme Dingle Foundation
• National Foundation for
Deaf & Hard of Hearing
• Mentemia
• Leukaemia & Blood Cancer
• NZ KidsCan
• The Student Volunteer Army
• Pet Refuge
• Starship Foundation
• Age Concern NZ
• Bowel Cancer NZ
• Ronald McDonald House
• UNICEF
• Fred Hollows Foundation
• Halberg Foundation
• Prostate Cancer Foundation
of New Zealand
Sky Sport Next is an
initiative supporting
rising talent and
grassroots sport
across New Zealand.
Showcasing over 50 sporting
codes and 1000’s of sporting
events.
Sky / 2020 Annual Report
27

Geraldine McBride
INDEPENDENT DIRECTOR
Geraldine was appointed
to the Board in September
2013. A renowned Enterprise
Business Technology and AI
thought leader with a science
background, Geraldine’s global
career spans 30 years, with
senior executive roles in IBM,
Dell and SAP. Her most recent
roles were President & CEO of
SAP North America and SAP
Asia Pacific Japan. Geraldine is
a Director of National Australia
Bank, and Fisher and Paykel
Healthcare. She is also CEO
& Director of MyWave.AI, a
market leading Enterprise AI
company focused on Intelligent
Personalisation by putting
the customer at the centre of
business.
Philip Bowman
INDEPENDENT CHAIRMAN
Philip was appointed Chair of
Sky in September 2019. Philip
is a distinguished businessman
who has led several major global
companies and served on the
Board of a significant number
of public and private companies.
Philip brings knowledge of the
media sector, including having
served on the Board of Sky
UK for ten years. Other roles
include Group Finance Director
of Bass, CEO of Bass Retail,
CEO of Allied Domecq, CEO of
Scottish Power, CEO of Smiths
Group, senior non-executive
director of Burberry, Chairman
of Liberty, Chairman of Coral
Eurobet, Chairman of Miller
Group, and non-executive
director of Scottish & Newcastle.
He currently sits on the Boards
of two other listed companies,
Kathmandu and Ferrovial SA.
Philip has a degree with honours
in Natural Sciences (University
of Cambridge) and Master in
Natural Sciences (University of
Cambridge). He is also a Fellow
of the Institute of Chartered
Accountants of England and
Wales.
Martin Stewart
CHIEF EXECUTIVE & DIRECTOR
Martin joined Sky as Chief
Executive in February 2019 and
was appointed to the Board in
April 2019. A highly-regarded
media sector operator with
a wealth of experience in the
UK, Europe and the Middle
East, Martin brings a valuable
international perspective
to Sky. In the Media and
Communications space Martin
has been CEO of OSN, the
leading pay TV network in the
Middle East and was CFO of
Sky in the United Kingdom when
Sky launched its digital platform
and the company doubled its
subscriber base in 4 years. Other
major roles include CFO of the
Football Association in the UK,
CEO of ONO (Cable Europa in
Madrid), and CFO and Executive
Director of EMI Group.
Derek Handley
INDEPENDENT DIRECTOR
Derek was appointed to the
Board in September 2013.
He is a New Zealand-based
entrepreneur and founding
General Partner at Aera VC, a
global venture capital investor
backing deep-technology start-
ups tackling the United Nations
Sustainable Development
Goals across the future of
climate, carbon, food, health,
work and learning. For the
last ten years, while based in
New York Derek co-created
companies and platforms
delivering social impact and
environmental transformation.
He co-founded the sustainability
alliance, ‘The B Team’ with Sir
Richard Branson and helped
build NY-based start-up studio
‘Human Ventures’. Previously
Derek was named in the ‘Silicon
Alley 100’ most influential
technology people in New York.
He is Adjunct Professor at AUT
University in Auckland, was a
formative member of the Air
New Zealand Sustainability
Advisory Panel, and is an
aspiring civilian astronaut with
Virgin Galactic. Derek also
created the Aera Foundation,
a charitable studio advancing
new models that fuse social and
financial goals.
Our Board of Directors
28

Keith Smith
INDEPENDENT DIRECTOR
Keith was appointed to the
Board in April 2020. He has
a long-standing record of
leadership as a director and
advisor to companies in a
diverse range of industries,
including the energy sector,
rural services, printing, media
and exporting. Keith is Chair
of listed company Goodman
(NZ) Limited (the Manager
of Goodman Property Trust),
Deputy Chair of The Warehouse
Group Limited, and is a director
of Mercury NZ Ltd and several
other private companies. He is a
past President of the Chartered
Accountants Australia and New
Zealand.
Joan Withers
INDEPENDENT DIRECTOR
Joan was appointed to the
Board in September 2019. She
brings a wealth of experience
spanning a 25-year career in
the media industry, including
CEO positions at Fairfax and
the Radio Network as well as
being the former Chair of TVNZ.
Joan’s depth of governance
experience includes her current
roles as Chair of The Warehouse
Group, a director of ANZ
NZ, and previously Chair of
Auckland International Airport
and Mercury NZ Ltd. Joan is a
Trustee of the Louise Perkins
Foundation, and is Chair of a
steering committee working
to increase the percentage
of South Auckland Maori and
Pacific Island students taking
up roles in the health sector.
She holds a Masters Degree in
Business Administration from
the University of Auckland.
In 2015 Joan was named
Supreme Winner in the Women
of Influence Awards and was
named as Chairperson of the
Year in the Deloitte Top 200
Management Awards.
Mike Darcey
INDEPENDENT DIRECTOR
With an extensive track record
of strategy and delivery across
television, publishing and
technology, Mike was appointed
to the Board in September
2017. A New Zealander, he has
lived and worked in the UK
since 1989. Fifteen of those
years were spent at Sky UK,
initially as the Director of
Strategy, then six years as Chief
Operating Officer. He played a
prominent role in most of Sky
UK’s major strategic decisions
and its major commercial and
regulatory dealings during this
period. From 2013 to 2015 Mike
was CEO of News UK. Since
2015, Mike has had a series of
non-executive roles and these
currently include Chairman of
M247 (a global connectivity
and cloud services provider),
Chairman of British Gymnastics,
and director of Arqiva (the UK’s
main independent provider of
television broadcast and mobile
infrastructure). He also provides
strategic consulting services in
the media sector.
Susan Paterson ONZM
INDEPENDENT DIRECTOR
Susan was appointed to the
Sky Board in August 2015.
Susan began her career as a
pharmacist and later completed
a MBA at London Business
School, leading to a career in
management and strategy
consulting in New Zealand,
Europe and the United States
of America. She has been a
professional director for over 20
years, and is a Chartered Fellow
of the Institute of Directors.
Susan is Chair of Steel and
Tube and Theta, and a director
of Goodman NZ, Arvida Group,
ERoad, Les Mills NZ and the
Reserve Bank of New Zealand.
She is also a Member of the
Electricity Authority, and past
director or Chair of a number
of commercial infrastructure
and growth companies and
not for profit entities including
Airways Corp, Transpower
New Zealand, Abano Healthcare,
Housing New Zealand, Home
of Cycling (Avantidrome), NZ
Golf Board, Auckland Hockey,
the NZ Eco-Labelling Trust, St.
Cuthbert’s College and EECA.
Previously she was an external
Monetary Policy Advisor to the
Reserve Bank Governor. In 2015
Susan was made an Officer of
the New Zealand Order of Merit
for her services to corporate
governance.
Susan will conclude her term on
the Sky Board in October 2020
and has chosen not to seek
re-election at the forthcoming
Annual General Meeting.
Sky / 2020 Annual Report
29

30

Sky / 2020 Annual Report
31
For the year ended 30 June 2020
Our 2020
Financials
Financial Overview ................................................................................................32
Financial Performance Trends
....................................................................38
Directors’ Responsibility Statement
.....................................................39
Consolidated Income Statement
............................................................41
Consolidated Statement of Comprehensive Income
...........42
Consolidated Balance Sheet
.......................................................................43
Consolidated Statement of Changes in Equity
.........................44
Consolidated Statement of Cash Flows
..........................................45
Notes to the Consolidated Financial Statements
...................46
Independent Auditor's Report
...................................................................87

32
Financial Overview
Summary
The 2020 financial year began well for Sky with pleasing progress on strategy and positive momentum building within the business.
The onset of the COVID-19 pandemic in the second half of the year presented challenges for the business, and Sky’s operations
were swiftly adapted to deal with the immediate and ongoing implications. As a result, Sky was able to continue to operate as an
essential service and worked to minimise the impact on customers, staff and Sky’s financial performance while also strengthening
our funding position for the longer term.
The net loss after tax for the year ended 30 June 2020 was $156.8 million compared to a net loss of $607.8 million in the prior
year. The net loss includes a goodwill impairment charge of $177.5 million (prior year $670.0 million). Earnings before interest, tax,
depreciation and amortisation are $164.2million compared to $230.1 million in the prior year.
However, the adjusted results are in line with our expectations after confronting the impacts of COVID-19, with adjusted net
profit after tax of $41.0 million, compared to an adjusted net profit after tax of $97.4 million in the prior year. COVID-19 affected
many aspects of Sky’s business in the final quarter of FY20, including a reduction in advertising and commercial revenues. Some of
that reduction was offset by revenue from acquired businesses Lightbox and RugbyPass, and a reduction in satellite revenue was
partially offset by a growth in streaming revenue. Satellite revenue decline was driven mainly by lower satellite customers during
the period.
As foreshadowed in the investor presentation released on 21 May 2020, Sky has continued to review the assumptions underlying
the carrying value of goodwill during the balance of the reporting period. The Board is required to assess the fair value of intangible
assets at each reporting period and has decided to recognise a further $177.5 million impairment of goodwill. The Board’s
decision reflects the ongoing uncertainty of the impacts of COVID-19 on Sky, supported by an independent valuation undertaken
subsequent to its 21 May 2020 disclosure, and with reference to the current market share price. The impairment of goodwill is a
non-cash charge that had no impact on Sky’s 2020 cash flows or any of its bank covenants.
Along with implementing its strategy to enhance streaming services and serve satellite customers, Sky has undertaken a
significant transformation of its business in FY20. Sky has repositioned to be a modern multimedia company, with this
revitalised focus leading to changes in our structure and expansion into new opportunities for growth, including our plans to
offer a broadband service. Alongside these changes, Sky is maintaining a sharp focus on costs with these initiatives leading
to ongoing reductions in operating and capital expenditure.
Costs incurred in FY20 included a number of one-off costs totalling $28.2 million, including redundancy costs, non-recurring
consultancy fees, satellite reservation fees and content write-offs. Prior year adjustments include costs relating to the decision
to cancel the infinite video platform (IVP) project, content write-offs, redundancy and consultancy payments.
Non-GAAP Financial Information
Sky has used non-GAAP profit measures when discussing financial performance (refer to note 32 of the Financial Statements).
The directors and management believe that these measures provide useful information on the underlying performance of the
Group. They are used internally to evaluate performance, analyse trends, and allocate resources. Non GAAP financial measures
are not prepared in accordance with NZ IFRS and are not uniformly defined and therefore should not be viewed in isolation nor
considered as a substitute for measures reported in accordance with NZ IFRS.
The adjustments are summarised below:
For the years ended 30 June
in NZD millions
2020
(adjusted)
2020
(reported)
2019
(adjusted)
2019
(reported)
%
inc/(dec)
Financial performance data
Total revenue
747.6747.6795.1795.1(6.0)
Total operating expenses
555.2583.4554.1565.00.2
EBITDA
192.4164.2241.0230.1(20.2)
Less
Depreciation, amortisation and impairment
119.3119.393.0131.128.3
Net operating profit before interest, income tax
and impairment of goodwill

73.1

44.9

148.0

99.0

(50.6)
Impairment of goodwill
- 177.5 - 670.0-
Net finance costs
13.713.712.412.410.5
Profit/(loss) before tax
59.4(146.3)135.6(583.4)(56.2)
Income tax expense
18.410.538.224.4(51.8)
Profit/(loss) after tax
41.0(156.8)97.4(607.8)(57.9)

Sky / 2020 Annual Report
33
Summary of Adjustments
The adjustments do not account for the impacts of acquiring RugbyPass and Lightbox during the year or for the impacts of
COVID-19. Information on the acquisition of RugbyPass and Lightbox can be found in Note 27 of the Financial Statements and
the impacts of COVID-19 are discussed in Note 3 of the Financial Statements.
In NZD millions
30-Jun-2030-Jun-19
Statutory loss after tax
(156.8)(607.8)
Adjustments to earnings as follows:
Content write-offs
3.25.7
Non-recurring costs included in other costs (1)
25.05.0
Impairment of property, plant and equipment
- 4.8
Cancellation of IVP project
- 33.4
Impairment of goodwill
177.5670.0
Tax effect of adjustments
(7.9)(13.7)
Total adjustments
197.8705.2
Adjusted profit after tax
41.097.4
(1) Adjustments for non-recurring costs include redundancy costs of $15.5 million and Holidays Act compliance provision of $3.2 million (refer notes 5
and 26), non-recurring consultancy costs of $3.3 million and satellite reservation fee of $3.0 million.
Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) for the year ended 30 June 2020 are $192.4 million,
a decrease of 20.2% on the previous year’s comparative of $241.0 million.
EBITDA was impacted by the adoption of NZ IFRS 16 leases from 1 July 2019 as per the table below:
In NZD millions
30-Jun-20
Operating expenses - previously reported in EBITDA
40.3
Depreciation on right-of-use assets
33.6
Interest on finance liabilities
3.4
Cash flow - reduction of liability
36.9
Adjusted net operating profit before interest and tax decreased from $148.0 million to $73.1 million.

34
Financial Commentary (Continued)
Customers
Sky delivers sport and entertainment content to customers through satellite and streaming services. Since the beginning of the
2020 financial year, Sky accelerated its focus on growing its streaming customer base while continuing to serve satellite customers.
Total customer numbers returned to growth in FY19 and significantly increased in FY20 through organic growth of the Neon and
Sky Sport Now streaming products and through the acquisition of RugbyPass and Lightbox, with improved retention of satellite
customers also making a positive contribution.
Average revenue per user (ARPU) for satellite customers continued to reduce slightly and was impacted in the final quarter of FY20
by COVID-19.
20202019201820172016
Satellite customers (1)
585,248 619,073 661,361 705,652 739,558
Streaming customers (2)
404,321 159,767 106,366 110,861 91,218
Other customers (3)
- - - 8,26921,903
Total customers
989,569 778,840 767,727 824,782 852,679
Net customer growth - satellite
-5%-6%-6%-5%-9%
Net customer growth - streaming
153%50%-4%22%121%
Satellite acquisition (4)
41,51049,95259,60379,68588,957
Satellite churn (4)
(75,643)(91,841)(103,394)(113,226)(131,401)
Satellite ARPU (monthly) (5)
$82.08 $83.46 $84.54 $85.05 $86.59
Streaming ARPU (monthly) (6)
$19.80 - - - -
(1) Satellite customer groups comprise residential satellite customers including reseller and commercial.
(2) Streaming customer group comprise Neon, Lightbox, Sky Sport Now (formerly FanPass), RugbyPass and retransmission.
(3) Other customers include customers from non-trading businesses, IGLOO and Fatso.
(4) Satellite acquisition and churn is for Sky residential customers only, including reseller.
(5) Satellite subscription ARPU is average revenue per user for Sky residential customers only, including reseller customers, calculated as the average
for the twelve-month period.
(6) Streaming subscription ARPU is the blended rate across Neon, Lightbox, Sky Sport Now (formerly FanPass), RugbyPass and retransmission.

Sky / 2020 Annual Report
35
Revenue Analysis
Sky’s total revenue was $747.6 million, as follows:
In NZD millions
20202019% inc/(dec)
Residential satellite subscriptions (1)
582.0629.8(7.6)
Other subscriptions (2)
105.498.66.9
Total subscription revenue
687.4728.4(5.6)
Advertising
45.251.8(12.7)
Other revenue and other income
15.0 14.9 0.7
Total other revenue
60.266.7(9.6)
Total revenue
747.6795.1(6.0)
(1) Residential satellite subscriptions include residential satellite customers and reseller customers.
(2) Other subscriptions include Neon, Lightbox, Sky Sport Now, RugbyPass, retransmission and commercial customers.
The COVID-19 pandemic and the associated restrictions on movement, travel and gatherings adversely impacted Sky’s revenue
during the final quarter of FY20.
Sky took a proactive approach with commercial customers (e.g. hotels, motels, restaurants and bars), including discounting or
suspending charging on a case by case basis for customers impacted by lockdown and gathering restrictions. A return to normal
billing practices commenced for the majority of customers from 1 August 2020, with additional support provided later that month
for customers in the Auckland region impacted by a further period of Level 3 restrictions.
Advertising revenues were subdued through the last quarter of FY20, due to market uncertainty surrounding COVID-19 as well as
the absence of live sport. The availability of sport content also impacted on Sky’s residential customer base with a portion of Sky
Sport Now streaming customers electing to pause subscriptions and 8% of satellite customers that subscribe to sport electing
to downgrade their packages. Sky’s satellite sport subscribers were offered complimentary upgrades that reduced the extent of
downgrades, with this initiative well received by customers. The return of live sport events during May saw most satellite sport
customers return by year-end and delivered a strong increase in Sky Sport Now subscriptions.
In contrast, increased demand for entertainment content during the Level 3 and 4 lockdown period resulted in strong growth for
Sky’s entertainment streaming services, Neon and Lightbox.
Sky’s programming costs were lower than anticipated as sport production costs were avoided through the COVID-19 impacted
period. Sky also worked closely with key sport partners to negotiate equitable reductions for COVID-19 impacted sport payments
in 2020.
Residential satellite subscriptions revenue decreased by 7.6% to $582.0 million due to fewer satellite customers, a lower uptake
of premium services (sport and movies) and lower pay-per-view buys. A continuing focus on customer retention saw a 21%
improvement in net annual churn rates as targeted initiatives gained traction.
Other subscriptions revenue includes commercial revenue earned from Sky subscriptions at hotels, motels, restaurants and bars
throughout New Zealand, revenue derived from transmission of programming for third parties and revenue from streaming
subscription services such as Neon, Lightbox, Sky Sport Now and RugbyPass. This revenue increased 6.9% to $105.4 million in 2020
due mainly to an increase in subscriber numbers for Sky’s streaming services from the acquisitions of RugbyPass and Lightbox.
Advertising revenue decreased by 12.7% to $45.2 million in 2020 due to a general weakening of market conditions for advertising
expenditure and impacts of COVID-19.
Other revenue and other income increased marginally by 1.3% to $15.0 million in 2020 mainly due to an increase in satellite access
fees received.

36
Financial Commentary (Continued)
Expense Analysis
A further breakdown of Sky’s operating expenses for 2020 and 2019 is provided below:
30-Jun-2030-Jun-19
In NZD millions AdjustedReported% inc/(dec)% of revenueAdjustedReported% of revenue
Programming
335.5342.14.644.9320.8326.540.3
Subscriber related costs
101.9106.615.413.688.388.311.1
Broadcasting and
infrastructure
70.377.9(26.6)9.495.895.812.0
Other costs
47.5 56.8(3.3)6.449.254.36.2
Depreciation, amortisation
and impairment
119.3 119.3 28.316.093.0 131.1 11.7
Total operating expenses
674.5702.74.390.2647.1696.081.4
Programming costs comprise both the costs of purchasing programme rights and also programme operating costs. Programme
rights costs include the costs of sport rights, pass-through channel rights (e.g. ESPN, Living Channel, National Geographic etc.),
movies (including pay-per-view), streaming rights and music rights. Programme operating costs include the costs of producing live
sport events, satellite and fibre linking costs and original shows produced in-house.
Sky’s adjusted programming costs have increased by $14.7 million and equate to 44.9% of revenue in 2020, up from 40.3% in 2019.
The increase is mainly due to the rights costs of $16.7 million relating to the acquisitions of RugbyPass and Lightbox. Adjusted
programming costs exclude impairment of RugbyPass and other entertainment programme rights of $3.2 million (refer note 9 of
the Financial Statements) and redundancy costs of $3.4 million.
Subscriber related costs include the costs of servicing and monitoring equipment installed at subscribers’ homes, indirect
installation costs, the costs of Sky’s customer service department, sales and marketing costs and general administrative costs
associated with managing the subscriber relationship.
In 2020, subscriber related costs increased by 15.4% due to an increase in sales and marketing costs as Sky implemented initiatives
to attract and grow streaming subscribers. Adjusted subscriber related costs exclude redundancy costs of $4.7 million.
Broadcasting and infrastructure costs consist of transmission and linking costs for transmitting Sky and Prime’s content from
its studios in Auckland to customers over satellite, streaming and other distribution platforms and the costs of operating Sky’s
television stations at Mt Wellington and Albany.
Sky’s broadcasting and infrastructure costs are detailed below:
In NZD millions
20202019
Broadcasting and infrastructure
70.3 63.1
Optus lease expense
- 32.7
Satellite reservation fees
3.0 -
Redundancy
4.6 -
77.9 95.8
The change from 2019 mainly reflects the effect of the adoption of NZ IFRS 16 from 1 July 2019. Optus lease costs are
now expensed as depreciation and interest, whereas previously the cost was an operating cost included in broadcasting and
infrastructure costs. Other adjustments included a one-off satellite reservation fee incurred while Sky worked through the future of
the Optus satellite of $3.0 million and redundancy costs of $4.6 million. The remaining increase is due to costs relating to internet
delivery costs and support for Sky’s streaming services, Neon, Lightbox, Sky Sport Now and RugbyPass.
Other costs include advertising costs and the overhead costs relating to corporate management of the Sky Group including
consultancy costs. The adjusted other costs have decreased by 3.3% to $47.5 million. Adjusted other costs exclude redundancy
costs of $2.7 million, $3.2 million Holidays Act compliance provision and $3.3 million of one-off consultancy costs.

Sky / 2020 Annual Report
37
Depreciation, amortisation and impairment costs include depreciation charges for subscriber equipment including satellite
dishes and decoders owned by Sky, fixed assets such as television station facilities, amortisation of the right-of-use assets created
under NZ IFRS 16 and amortisation of computer software and intangible assets. The current year includes depreciation relating
to right-of-use assets of $33.6 million. This increase offsets the prior year impairment cost for the infinite video platform (IVP) of
$38.2 million. Depreciation of property, plant and equipment has decreased as decoders and installation costs reach the end of
their useful lives while amortisation of intangibles has increased in relation to acquired intangibles for Lightbox and RugbyPass.
Depreciation, amortisation and impairment costs are summarised below:
In NZD millions
20202019
Depreciation of property, plant and equipment
54.7 70.9
Amortisation of intangibles
31.0 22.0
Depreciation of right-of-use assets
33.6 -
Impairment of IVP project
- 38.2
Total depreciation, amortisation and impairment 119.3 131.1
Finance costs, net have increased from $12.4 million to $13.7 million. The increase relates to interest of $3.4 million on lease
liabilities as a result of adopting NZ IFRS 16 lease accounting on 1 July 2019. This is partially offset by a reduction in interest as
debt levels have reduced throughout the year. Sky’s weighted average interest rates are as follows:
20202019
Borrowings
5.42%6.52%
Bonds
6.16%6.13%
Lease liabilities
4.30%-
Combined weighted average
5.21%6.34%
Capital expenditure
Sky’s capital expenditure over the last two years ended 30 June is summarised as follows:
In NZD millions
20202019
Subscriber equipment
4.47.3
Installation costs
12.615.5
Projects under development
11.734.5
Software
19.710.0
Other
8.19.0
Capital expenditure
56.576.3
Assets acquired by way of business acquisitions
16.4 -
Total capital expenditure
72.976.3
Sky has a stated objective to manage capital expenditure within a target band of 7% - 9% of revenue, with FY20 spending of 7.6%
comfortably within this range. The average over the past five years has been 9.6% with this year’s performance contributing to a
positive downward trend.
Capital expenditure had a greater emphasis on Sky’s streaming services in 2020, and less on costs associated with Sky’s satellite
delivery platform.
This approach is consistent with Sky’s accelerated focus on streaming, requiring additional investment in the Sky Go, Sky Sport
Now and Neon platforms which led to an increase in expenditure included as software within intangible assets.
Satellite installation costs and subscriber equipment costs decreased by 25.4%. Capital expenditure in FY19 included expenditure
for the IVP project that was subsequently discontinued. Assets acquired by way of business acquisitions include the Lightbox
streaming platform and other intangible assets.

38
In NZD 000
20202019201820172016
For the year ended 30 June
Income statement
Total revenue
747,646795,126852,710893,485928,200
Total operating expenses
583,395564,958566,900601,145602,914
EBITDA (1)
164,251230,168285,810292,340325,286
Depreciation, amortisation and impairment (2)
119,318131,103102,414105,148100,241
Impairment of goodwill
177,500670,000360,000 - -
Net interest expense and financing charges
15,85913,65017,57620,47019,684
Losses/(gains) on currency and other
(2,120)(1,208)(66)(850) 371
Net (loss)/profit before income tax
(146,306)(583,377)(194,114)167,572204,990
Balance sheet
Property, plant,and equipment, intangibles and
right-of-use assets

287,962

213,702

268,925

301,008

331,157
Goodwill
256,312395,3311,065,3311,425,3311,425,331
Total assets
837,936771,3531,503,0021,887,2001,943,564
Interest bearing loans and liabilities
212,513193,662235,344298,663348,085
Working capital (3)
90,2918,6079,03810,21530,945
Total liabilities
462,966419,785476,315559,322612,641
Total equity
374,970351,5681,026,6871,327,8781,330,923
Cash flow
Net cash from operating activities
157,300178,026213,613244,536275,844
Net cash used in investing activities
(74,627)(69,780)(58,194)(79,640)(133,635)
Free cash flow
82,673108,246155,419164,896142,209
Capital expenditure
Capital expenditure
56,45876,30058,20079,700128,800
Assets acquired by way of business combination (4)
16,354----
Total capital expenditure
72,81276,30058,20079,700128,800
(1) Earnings before income tax, interest expense, depreciation, amortisation and impairment, unrealised gains and losses on currency and interest
rate swaps.
(2) The 2020 year includes depreciation on right-of-use assets of $33.6 million. (refer note 13). The 2019 year includes impairment of property, plant
and equipment of $38.2 million relating to the cancellation of the infinite video platform (IVP) and related decoders and equipment (refer note 12).
(3) Working capital excludes current borrowing, bonds, derivative financial instruments, available for sale financial assets and contract liabilities and
lease liabilities. Prior periods have been adjusted to exclude contract liabilities.
(4) RugbyPass and Lightbox, acquired in the 2020 financial year (refer note 27), were the only substantial acquisitions in the last five years.
Financial Performance
Trends (as reported)

Sky / 2020 Annual Report
39
Directors’ Responsibility
Statement
The directors of Sky Network Television Limited (Sky) are responsible for ensuring that the consolidated
financial statements of Sky and its subsidiaries (the Group) present fairly the financial position of the Group
as at 30 June 2020 and the results of its operations and cash flows for the year ended on that date.
The directors consider that the consolidated financial statements of the Group have been prepared using
appropriate accounting policies, consistently applied and supported by reasonable judgements and estimates
and that all relevant financial reporting and accounting standards have been followed.
The directors believe that proper accounting records have been kept which enable, with reasonable accuracy,
the determination of the financial position of the Group and facilitate compliance of the consolidated financial
statements with the Financial Markets Conduct Act 2013.
The directors consider they have taken adequate steps to safeguard the assets of the Group and to prevent
and detect fraud and other irregularities.
The directors present the consolidated financial statements of the Group for the year ended 30 June 2020.
The Board of Directors of Sky authorise these financial statements for issue on 9 September 2020.
For and on behalf of the Board of Directors

Martin Stewart
Director and Chief Executive
Philip Bowman
Director and Chairman
Date: 9 September 2020

40
Contents
Financial Statements
Consolidated Income Statement ..................................................41
Consolidated Statement of Comprehensive Income .............. 42
Consolidated Balance Sheet ......................................................... 43
Consolidated Statement of Changes in Equity ........................ 44
Consolidated Statement of Cash Flows .................................... 45
Basis of Preparation
1. General Information.................................................................... 46
2. Basis of Consolidation ................................................................ 47
3. Significant Accounting Policies and
Key Sources of Estimation Uncertainty .................................. 47
Performance
4. Segment and Revenue Information ........................................ 50
5. Operating Expenses .................................................................... 52
6. Earnings Per Share ...................................................................... 53
7. Taxation ......................................................................................... 53
Working Capital
8. Trade and Other Receivables .................................................... 55
9. Programme Rights Inventory .................................................... 57
10. Trade and Other Payables and Contract Liabilities .......... 58
Assets
11. Assets Held for Sale .................................................................. 58
12. Property, Plant and Equipment.............................................. 59
13. Right-Of-Use Assets ................................................................. 61
14. Intangible Assets ....................................................................... 62
15. Goodwill ....................................................................................... 63
Funding
16. Borrowings ...................................................................................67
17. Lease Liabilities ...........................................................................69
18. Finance Costs, Net .....................................................................70
19. Share Capital ..............................................................................71
20. Reserves ........................................................................................72
Financial Risk Management
21. Derivative Financial Instruments ............................................73
22. Financial Risk Management - Market Risk............................76
23. Credit Risk ....................................................................................77
24. Liquidity Risk ................................................................................78
25. Classification of Financial Instruments .................................81
Other
26. Contingent Consideration and Provisions ............................82
27. Business Acquisitions .................................................................83
28. Related Parties ...........................................................................84
29. Commitments .............................................................................85
30. Contingent Liabilities ................................................................86
31. Subsequent Events ....................................................................86
32. Non-GAAP Financial Information ...........................................86
Independent Auditor's Report........................................................87

Sky / 2020 Annual Report
41
For the year ended 30 June 2020
In NZD 000Notes30-Jun-2030-Jun-19
Revenue
746,641795,126
Other income
1,005 -
Total revenue
4747,646795,126
Expenses
Programming
342,096326,461
Subscriber related costs
106,55488,323
Broadcasting and infrastructure
77,94295,846
Depreciation, amortisation and impairment of assets
5119,318131,103
Other costs
56,80354,328
Total expenses
702,713696,061
Operating profit before impairment
44,93399,065
Impairment of goodwill
5,15 177,500 670,000
Operating loss
(132,567)(570,935)
Finance costs (net)
18 13,73912,442
Loss before tax
(146,306)(583,377)
Income tax expense
7 10,46624,460
Loss for the year
(156,772)(607,837)
Attributable to
Equity holders of the Company
6(156,979)(608,158)
Non-controlling interests
207321
(156,772)(607,837)
Loss per share
Basic and diluted loss per share (cents)
6(23.91)(119.99)
Consolidated
Income Statement

42
Consolidated Statement
of Comprehensive Income
For the year ended 30 June 2020
In NZD 00030-Jun-2030-Jun-19
Loss for the year
(156,772)(607,837)
Items that may be reclassified to profit or loss
Exchange difference on translation of foreign operations
220 -
Deferred hedging gains/ (losses) transferred to operating expenses during the year
1,196(2,745)
Income tax effect
(335)769
Net other comprehensive income/(loss) to be reclassified to profit or loss,
net of income tax

1,081

(1,976)
Items that may not be reclassified to profit and loss
Deferred hedging losses transferred to non-financial assets during the year
(51)(10,097)
Income tax effect
142,827
Net other comprehensive loss not being reclassified to profit or loss,
net of income tax

(37)

(7,270)
Total comprehensive loss for the year
(155,728)(617,083)
Attributable to:
Equity holders of the Company
(155,935)(617,404)
Non-controlling interest
207321
(155,728)(617,083)

Sky / 2020 Annual Report
43
As at 30 June 2020
In NZD 000Notes30-Jun-2030-Jun-19
Current assets
Cash and cash equivalents
110,6774,283
Trade and other receivables
856,85461,996
Programme rights inventory
9113,82289,458
Derivative financial instruments
213,2655,019
284,618160,756
Non-current assets
Property, plant and equipment
12124,585163,217
Right-of-use assets
1396,821-
Intangible assets
1466,55650,485
Deferred tax asset
7216-
Goodwill
15256,312395,331
Derivative financial instruments
214611,564
544,951610,597
Assets held for sale
11 8,367 -
Total assets
837,936771,353
Current liabilities
Interest bearing loans and borrowings
16 100,7651,701
Lease liabilities
17 36,562-
Trade and other payables
10 176,021136,078
Contract liabilities
10 51,18054,396
Income tax payable
15,04111,052
Derivative financial instruments
21 9222,721
380,491205,948
Non-current liabilities
Interest bearing loans and borrowings
16 1,883191,961
Lease liabilities
17 73,303-
Contingent consideration
26 5,283-
Deferred tax liability
7 - 18,924
Derivative financial instruments
21 4052,952
80,874213,837
Liabilities associated with assets held for sale
11 1,601 -
Total liabilities
462,966419,785
Equity
Share capital
19 767,608577,403
Reserves
20 991(53)
Retained deficit
(394,875)(227,111)
Total equity attributable to equity holders of the Company
373,724350,239
Non-controlling interest
1,2461,329
Total equity
374,970351,568
Total equity and liabilities
837,936771,353
Consolidated
Balance Sheet
Martin Stewart
Director and Chief Executive
Philip Bowman
Director and Chairman
For and on behalf of the Board 9 September 2020

44
For the year ended 30 June 2020
Attributable to owners of the parent
In NZD 000Notes
Share
capitalReserves
Retained
deficitTo t a l
Non-
controlling
interest
To t a l
equity
For the year ended 30 June 2020
Balance at 1 July 2019
577,403(53)(227,111)350,2391,329351,568
Impact of adoption of
new accounting standard

3

-

-

(10,785)

(10,785)

-

(10,785)
Adjusted balance
577,403(53)(237,896)339,4541,329340,783
Loss for the year
- - (156,979)(156,979)207(156,772)
Exchange difference on translation
of foreign operations

-

220

-

220

-

220
Cash flow hedges, net of tax
20 - 824 - 824 - 824
Total comprehensive loss for the year
- 1,044(156,979)(155,935) 207 (155,728)
Transactions with owners in their
capacity as owners
Rights issue and placement of shares
19 157,091 - - 157,091 - 157,091
Issue of ordinary shares related
to business combination

19

24,378

-

-

24,378

-

24,378
Issue of ordinary shares to
NZ Rugby Union9,19 15,436 - - 15,436 - 15,436
Transaction costs relating
to share issues19(7,086) - - (7,086) - (7,086)
Dividend paid
- - - - (290)(290)
CEO share based remuneration
28 386 - - 386 - 386
190,205 - - 190,205(290)189,915
Balance at 30 June 2020
767,608 991 (394,875) 373,724 1,246 374,970
For the year ended 30 June 2019
Balance at 1 July 2018
577,4039,032438,9981,025,4331,2541,026,687
Reversal of deferred tax on
held for sale investment

-

-

420

420

-

420
Balance at 1 July 2018 (restated)
577,4039,032439,4181,025,8531,2541,027,107
Loss for the year
- - (608,158)(608,158)321(607,837)
Cash flow hedges, net of tax
20 - (9,246) - (9,246) - (9,246)
Total comprehensive loss for the year
- (9,246)(608,158)(617,404) 321 (617,083)
Transactions with owners in their
capacity as owners
Dividend paid
- - (58,371)(58,371)(246)(58,617)
Supplementary dividends
- - (8,552)(8,552) - (8,552)
Foreign investor tax credits
- - 8,5528,552 - 8,552
CEO share based remuneration
19,28 - 161 -
161 - 161
- 161 (58,371)(58,210)(246)(58,456)
Balance at 30 June 2019
577,403(53)(227,111)350,2391,329351,568
Consolidated Statement
of Changes in Equity

Sky / 2020 Annual Report
45
For the year ended 30 June 2020
In NZD 000Notes30-Jun-2030-Jun-19
Cash flows from operating activities
Loss before tax
(146,306)(583,377)
Adjustments for:
Depreciation and amortisation
5 119,318 131,103
Impairment of goodwill
5 177,500 670,000
Impairment of programme rights
9 3,240 5,715
Unrealised foreign exchange loss/(gain)
18 1,953 (258)
Interest expense
18 16,020 13,895
Bad debts and movement in provision for loss allowance
5 1,352 1,186
Other non-cash items
1,040 605
Movement in working capital items:
Decrease/(increase) in receivables
10,128 (65)
Increase in payables
17,631 5,362
Increase in programme rights
(5,056)(16,795)
Cash generated from operations
196,820227,371
Interest paid
(15,995)(14,045)
Bank facility fees paid
(25)(800)
Income tax paid
(23,500)(34,500)
Net cash from operating activities
157,300178,026
Cash flows from investing activities
Proceeds from sale of property, plant and equipment
- 228
Acquisition of property, plant, and equipment
12(27,470)(66,307)
Acquisition of intangibles
14(28,988)(10,035)
Acquisition of subsidiaries,net of cash acquired
27(18,169)-
Disposal of held for sale financial asset
11 - 6,334
Net cash used in investing activities
(74,627)(69,780)
Cash flows from financing activities
Proceeds from rights issue and placement of shares
19157,091 -
Transaction costs incurred for rights issue
19(7,086) -
Repayment of borrowings - bank loan
16(207,000)(300,000)
Advances received - bank loan
16119,000 257,000
Vendor finance received
16 - 3,205
Repayment of other borrowings
16(1,093)(1,693)
Payments for lease liability principal
17(36,901)-
Dividend paid to minority shareholders
(290)(246)
Dividends paid
- (66,923)
Net cash from/(used in) financing activities
23,721 (108,657)
Net increase/(decrease) in cash and cash equivalents
106,394 (411)
Cash and cash equivalents at beginning of year
4,283 4,694
Cash and cash equivalents at end of year
110,677 4,283
Consolidated Statement
of Cash Flows

46
Notes to the Consolidated
Financial Statements
For the year ended 30 June 2020
1. General Information
This section sets out the Group’s accounting policies that relate to the consolidated financial statements as a whole.
They have been presented in a structure which is intended to make them more relevant to shareholders. Where an accounting
policy is specific to one note, the policy is described in the note to which it relates.
Sky Network Television Limited (Sky) is a company incorporated and domiciled in New Zealand. The address of its registered office
is 10 Panorama Road, Mt Wellington, Auckland, New Zealand. The consolidated financial statements for the year ended 30 June
2020 comprise Sky Network Television Limited and its subsidiaries (the Group).
Sky is a company registered under the Companies Act 1993 and is a reporting entity under Part 7 of the Financial Markets Conduct
Act 2013. The consolidated financial statements of the Group have been prepared in accordance with the requirements of the
Financial Markets Conduct Act 2013 and the NZX Main Board Listing Rules.
The Group’s primary activity is to operate as a provider of sport and entertainment media services in New Zealand and overseas.
These consolidated financial statements were authorised for issue by the Board on 9 September 2020.
Basis of preparation
The consolidated financial statements of the Group have been prepared in accordance with Generally Accepted Accounting
Practice in New Zealand (NZ GAAP). The Group is a for-profit entity for the purpose of complying with NZ GAAP. The consolidated
financial statements comply with New Zealand equivalents to International Financial Reporting Standards (NZ IFRS), other
New Zealand accounting standards and authoritative notices that are applicable to entities that apply NZ IFRS. The consolidated
financial statements also comply with International Financial Reporting Standards (IFRS).
These consolidated financial statements are prepared on the basis of historical cost except where otherwise identified.
The consolidated financial statements are presented in New Zealand dollars.
Group structure
The Group has a majority share in the following subsidiaries:
Name of EntityPrincipal Activity
Country of
IncorporationParent Interest held
Jun-20Jun-19
Sky DMX Music LimitedCommercial MusicNew ZealandSky
50.50%50.50%
Sky Ventures LimitedInvestmentNew ZealandSky
100.00%100.00%
Media Finance LimitedNon-tradingNew ZealandSky
100.00%100.00%
Outside Broadcasting Limited Broadcasting servicesNew ZealandSky
100.00%100.00%
Screen Enterprises Limited Non-tradingNew ZealandSky
100.00%100.00%
Igloo LimitedNon-tradingNew ZealandSky
100.00%100.00%
Believe It Or Not LimitedEntertainment quizzesNew ZealandSky
51.00%51.00%
Sky Investment Holdings Limited
(incorporated 15 August 2019)
InvestmentNew ZealandSky
100.00% _
RugbyPass Limited
(acquired 19 August 2019)
Streaming servicesIrelandSky Investment
Holdings Limited
100.00% _
RugbyPass Asia Pte Ltd
(acquired 19 August 2019)
Management servicesSingaporeRugbyPass Limited
100.00% _
Lightbox New Zealand Limited
(acquired 31 January 2020)
Streaming servicesNew ZealandSky
100.00% _

Sky / 2020 Annual Report
47
2. Basis of Consolidation
The Group financial statements consolidate the financial statements of Sky and its subsidiaries. The acquisition method of
accounting is used to account for the acquisition of subsidiaries and businesses by the Group. The consideration transferred in
a business combination is measured at fair value, which is calculated as the sum of the acquisition date fair value of the assets
transferred and the liabilities incurred. Each identifiable asset and liability is generally measured at its acquisition date fair value
except if another NZ IFRS requires another measurement basis. The excess of the consideration of the acquisition and the amount
of any non-controlling interest in the acquired company, less the Group's share of the net of the acquisition date amounts of the
identifiable assets acquired and the liabilities assumed, is recognised as goodwill. Acquisition related costs are expensed as incurred.
Subsidiaries
Subsidiaries are entities that are controlled, either directly or indirectly, by the Group. The Group controls an entity when it is
exposed to, or has rights to, variable returns from its involvement with the entity, and has the ability to affect those returns from
its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are
deconsolidated from the date on which control ceases.
Intragroup balances and any unrealised gains and losses or income and expenses arising from intragroup transactions, are
eliminated in preparing the consolidated financial statements. Unrealised losses are eliminated in the same way as are unrealised
gains unless the transaction provides evidence of an impairment of the asset transferred.
Transactions with non-controlling interests
Transactions with non-controlling interests that do not result in loss of control are accounted for as equity transactions – that is,
as transactions with the owners in their capacity as owners. The difference between the fair value of any consideration paid and
the relevant share acquired of the carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on disposals
to non-controlling interests are also recorded in equity.
3. Significant Accounting Policies and
Key Sources of Estimation Uncertainty
Growth strategy and future performance
In the 31 December 2019 interim financial statements, the Group reported that it has continued to execute its strategy which
included:
• The acquisition of RugbyPass Limited in August (refer note 27).
• Negotiating a five-year partnership agreement with the New Zealand Rugby Union (NZR) as a result of successfully renewing
the SANZAAR contract for the five years from 2021 to 2025 (refer note 15), including the issuance of 21,801,325 Sky shares to
NZR with a fair value of $15 million (refer note 9).
• Changing the organisational design and structure within the Group (refer note 5), and
• Completing the acquisition of Lightbox from Spark in January 2020 (refer note 27).
COVID-19
On 11 March 2020 the World Health Organisation declared a global pandemic as a result of the outbreak and spread of COVID-19.
Following this, on 25 March 2020 the New Zealand Government raised its Alert Level to 4 (nationwide lockdown of non-essential
services) for an initial four-week period. Restrictions on movement, travel and gatherings resulted in the significant reduction of
live sports, and increased uncertainty around the future scheduling of sporting events and flow of content, both in New Zealand
and internationally. Sky’s operations were considered to be an essential service and were able to operate during Alert Level 4.
The lockdown resulted in increased demand for entertainment content as people stayed at home and as a result Neon and
Lightbox recorded strong growth.
The Group took several immediate steps to support customer retention and to manage liquidity including:
• Proactively reducing charges to commercial customers and allowing them to suspend their accounts while they were unable
to operate.
• Offering entertainment and movie package upgrades to sports subscribers to reward loyalty, mitigate downgrades and churn.
• Undertaking cost saving measures in relation to operating expenditure, particularly in relation to programming operations
due to a reduction in sports related production.
• Deferring non-essential capital projects.
• Accelerated the raising of additional capital.

48
Notes to the Consolidated Financial Statements (Continued)
3. Significant Accounting Policies and Key Sources
of Estimation Uncertainty (Continued)
As discussed above, the Group was in the process of implementing its growth strategy and ensuring the appropriate funding
structure was in place to support the strategy. The Group completed a capital raise on 21 May 2020 to raise $157 million of
additional capital to strengthen Sky’s balance sheet and reposition for its refreshed strategy and help mitigate the impacts
of COVID-19. The capital raise and renegotiation of bank facility terms (refer note 16) enabled the Group to repay debt and
have access to sufficient capital to repay the bonds in March 2021, withstand near term headwinds and to execute on future
growth opportunities based on the Board approved forecasts. Based on the additional capital secured, including consideration
of an earlier return to sport than forecast, the Board considers that compliance with financial covenants will continue to be
met for at least the next 12 months from approving these consolidated financial statements (refer note 16).
The ongoing uncertainties discussed and other economic effects of the pandemic have been considered in the Group’s key
estimates and judgements as disclosed in the following notes:
• Intangible assets - the ability to achieve future forecasts and the consequential impacts on the carrying value of goodwill and
other finite life intangibles (refer notes 14 and 15).
• Receivables - the ability of its subscribers and commercial customers to pay (refer note 8).
• Programming rights - the ability to monetise prepaid and future sports programming rights (refer note 9).
• Identification of cash generating units (CGUs) and allocation of goodwill to CGUs - the Board reassessed their view of the
Group's CGUs and believe that Sky and RugbyPass are separate individual CGUs which require judgement (refer note 15).
Considering the above, the Board has reviewed the operating and cash flow forecasts for the five-year period to 2025. The Board
is satisfied based on their review of these financial forecasts that during the period to at least 12 months from the approving of
the consolidated financial statements there will be adequate cash flows generated from operating and financing activities to meet
the obligations of the Group.
Accounting policies
The accounting policies applied by the Group in these consolidated financial statements are the same as those applied by
the Group in its consolidated financial statements as at and for the year ended 30 June 2019, except for the adoption of new
standards effective as of 1 July 2019 (detailed below). The Group has not early adopted any other standard, interpretation or
amendment that has been issued but is not yet effective.
The Group has applied NZ IFRS 16 Leases for the first time for the year ended 30 June 2020, using a modified retrospective approach
which does not require restatement of previous financial statements. The nature and effect of these changes are disclosed below.
NZ IFRS 16 - Impact on the financial statements
NZ IFRS 16 primarily changes lease accounting for lessees; lease agreements now give rise to the recognition of an asset
representing the right to use the leased item and a loan obligation for future lease payables. Lease costs are recognised in the
form of depreciation of the right-of-use asset and interest is recognised on the lease liability. The new standard has substantively
changed the accounting treatment for operating leases where rental charges were previously recognised on a straight-line basis
and no lease asset or lease obligation was recognised. The standard was effective for accounting periods beginning on or after
1 January 2019 and the Group adopted the standard from 1 July 2019.
In applying NZ IFRS 16 for the first time the Group has used the following practical expedients permitted by the standard:
• Use of a single discount rate to leases with reasonably similar characteristics.
• Use of hindsight in determining a lease term.
• Exclusion of initial direct costs for the measurement of the lease asset at the date of initial recognition.
• Exclusion of leases with a remaining term of less than 12 months.
Lease liabilities are measured at the present value of the remaining lease payments using the Group’s incremental borrowing rate (IBR)
as at 1 July 2019 as described in note 17. The associated right-of-use assets were measured on a retrospective basis as if the new rules
had always been applied. Right-of-use assets are classified as transmission, property, equipment and motor vehicles. Finance leases at
30 June 2019 were transferred to lease liabilities and right-of-use assets on 1 July 2019.

Sky / 2020 Annual Report
49
The impact of adoption of NZ IFRS 16 on the Group’s consolidated financial statements is summarised in the table below:
In NZD 000Note30-Jun-201-Jul-19
Right-of-use assets
1396,82177,962
Lease liabilities
17(109,865)(92,944)
Deferred tax
3,6524,194
Retained earnings
10,78510,785
Lease payments are discounted using the interest rate implicit in the lease. If the rate cannot be readily determined, which is
the case for most of the Group’s leases, the Group’s incremental borrowing rate (IBR) is used. The IBR is the rate that the Group
would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic
environment with similar terms, security and conditions. To determine the IBR, the Group calculates its internal borrowing rate on a
quarterly basis. The weighted average IBR at 30 June 2020 was 4.37% (1 July 2019: 4.00%).
The table below reconciles commitments disclosed as at 30 June 2019 to the lease liability balance at 1 July 2019:
Commitments disclosed as at 30 June 2019
Operating leases
92,660
Contracts for transmission service
7,038
Other service commitments (note 29)
26,511
126,209
Less short term and immaterial leases recognised on a straight-line basis as an expense
(2,354)
Less contracts assessed as service commitments
(22,813)
Adjustment for transponder accrual
(3,070)
Discounting using the Group's incremental borrowing rate at the date of initial application
(5,028)
Operating lease liability
92,944
Current lease liabilities
36,873
Non-current lease liabilities
56,071
92,944
The adoption of NZ IFRS 16 does not have any significant impact on the Group’s banking covenants since transmission leases were
already treated as finance leases in the covenant calculations.
Foreign currency translation
Functional and presentation currency
The Group’s consolidated financial statements are presented in New Zealand dollars (NZD) which is the Group’s functional and
presentation currency.
Transactions and balances
Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange
rate at the reporting date. Non-monetary assets and liabilities that are measured at fair value in a foreign currency are
translated into the functional currency at the exchange rate when the fair value was determined. Non-monetary items that
are measured based on historical cost in a foreign currency are translated at the exchange rate at the date of the transaction.
Foreign currency differences are generally recognised in profit or loss and presented within finance costs, except when deferred
in other comprehensive income as qualifying cash flow hedges.

50
Notes to the Consolidated Financial Statements (Continued)
Description of revenue streams
Within its operating business segment Sky has several revenue streams which it reports against. These include:
Residential satellite revenue: This includes revenue from Sky’s subscription services linked to its satellite customers.
Customers are invoiced on a monthly basis and contracts are normally for a period of 6 or 12 months with monthly
renewals thereafter. Early termination fees apply. Revenue is recognised over the period to which the subscription related.
Unearned subscriptions and deferred revenues are revenues that have been invoiced relating to services not yet performed
and are reported as contract liabilities (refer note 10).
Other subscription revenue: This includes commercial revenue earned from Sky subscriptions at businesses throughout
New Zealand, revenue from content sold to third parties for retransmission and revenue from streaming services such as
Neon, Sky Sport Now, RugbyPass and Lightbox. This revenue is recognised over time based on the timing of the services
provided. Contracts vary in length, including daily, weekly, monthly and are payable in advance.
Contracts with wholesale customers, where some of the Group’s services, (including Neon, Lightbox and Sky Sport Now) are
combined with the customer’s products and sold as part of a bundled service have differing provisions such that the Group
has been determined to be either the principal or the agent depending on the wholesale contract terms. Revenue from these
contracts is invoiced monthly depending on the services provided, and is reported on a gross basis with the commission paid
or discount offered being treated as an operating expense where the Group is determined to be the principal and on a net
basis where the Group is determined to be the agent.
Advertising revenue: This relates to revenue received from customers in return for advertising placed on the Group’s services.
This revenue is reported when the advertisement is screened. Contract terms and rates vary depending on the customer and
services provided. Customers are billed monthly in arrears. Revenue is earned at a point in time.
Other revenue: This includes revenue from installation services, transmission services and various other non-subscriber
related revenue. This revenue is recorded when the product or service has been delivered to the customer at a point in time.
3. Significant Accounting Policies and Key Sources
of Estimation Uncertainty (Continued)
Foreign operations
The income statements of foreign operations are translated into the Group’s reporting currency at average exchange rates for
the period and the assets and liabilities of foreign operations are translated into NZD at the exchange rates prevailing at the
reporting date. The income and expenses of foreign operations are translated into NZD at the exchange rates at the dates of
the transactions.
Foreign exchange differences are recognised in other comprehensive income and accumulated in the translation reserve.
Goods and services tax (GST)
The consolidated statement of comprehensive income and statement of cash flows have been prepared so that all components
are stated exclusive of GST. All items in the consolidated balance sheet are stated net of GST with the exception of receivables
and payables, which include GST invoiced.
4. Segment and Revenue Information
In NZD 00030-Jun-2030-Jun-19
Residential satellite subscriptions
581,962629,763
Other subscriptions
105,38198,595
Advertising
45,15551,805
Other revenue
14,143 14,963
Other income
1,005-
747,646795,126

Sky / 2020 Annual Report
51
Key estimates and judgements
Gross versus net presentation
If the Group has control of goods or services when they are delivered to a customer, then the Group is the principal in the sale
to the customer, otherwise the Group is acting as an agent. Whether the Group is considered to be the principal or an agent
in the transaction depends on analysis by management of both the legal form and substance of the agreement between the
Group and its business partners; such judgements impact the amount of reported revenue and operating flows. Scenarios
requiring judgement to determine whether the Group is a principal or an agent include, for example, those where the Group
contracts through a third party to deliver its services such as Neon, Sky Sport Now, RugbyPass and Lightbox to customers via
a bundled service offering.
Operating segments are reported in a manner consistent with the internal reporting provided to Sky's executive team who are
the chief operating decision-makers. Sky's executive team is responsible for allocating resources and assessing performance of
the operating segments. Sky operates in a single operating segment; the provision of sport and entertainment media services in New
Zealand. RugbyPass has been identified as a separate operating segment and will form a separate cash generating unit for the year
ended 30 June 2020. For financial reporting purposes and with reference to the aggregation criteria in the accounting standards
RugbyPass will be aggregated with the Sky business operating segment for the purposes of reporting segment disclosure.
The table below shows the disaggregation of the Group’s revenue from contracts with customers on the basis of when revenue
is recognised for its principal revenue streams as described below.
In NZD 000
Residential
satellite
subscriptions
Other
subscriptionsAdvertising
Other
revenue
Total revenue
from contracts
with customers
For the year ended 30 June 2020
Revenue from customers
581,962105,38145,15528,000760,498
Inter-segment revenue
- - - (13,857)(13,857)
Total revenue
581,962105,38145,15514,143746,641
Timing of revenue recognition
At a point in time
10,822 - 45,1557,56363,540
Over time
571,140105,381 - 7,585684,106
581,962105,38145,15515,148747,646
For the year ended 30 June 2019
Revenue from customers
629,76398,59551,80532,847813,010
Inter-segment revenue
- - - (17,884)(17,884)
Total revenue
629,76398,59551,80514,963795,126
Timing of revenue recognition
At a point in time
13,895 - 51,8057,50573,205
Over time
615,86898,595 - 7,458721,921
629,76398,59551,80514,963795,126
Inter-segment revenue relates to intergroup production services.

52
Notes to the Consolidated Financial Statements (Continued)
5. Operating Expenses
Loss before tax includes the following separate expenses/(credits):
In NZD 000Notes30-Jun-2030-Jun-19
Depreciation, amortisation and impairment
Depreciation and impairment of property, plant and equipment (1)
1254,698109,100
Amortisation of intangibles
1431,05022,003
Depreciation of right-of-use assets
1333,570 -
Impairment of goodwill
15177,500670,000
Total depreciation, amortisation and impairment
296,818801,103
Credit loss
Movement in provision
319(57)
Net write-off
1,0331,243
Total credit loss
81,3521,186
Fees paid to external auditors
Audit fees paid to principal auditors (2)
649369
Regulatory reporting
32
Non-assurance services by principal auditors
Agreed upon procedures on the bank compliance certificate
33
Treasury related financial markets risk analysis and commentary
3528
Scenario analysis of property requirements
36
Total fees to external auditors
726402
Employee costs (3)
105,70792,483
Kiwisaver employer contributions
2,3042,193
Donations
302214
Operating lease and rental expenses (4)
91635,872
(1) The majority of depreciation and amortisation relates to broadcasting assets (refer note 12).
(2) The audit fee includes the fee for both the annual audit of the financial statements and the review of the interim financial statements.
(3) Redundancy costs of $15.5 million (30 June 2019: $2.2 million) and a Holidays Act 2003 compliance provision of $3.2 million (note 26) and share
based payments of $386,000 (note 28) are included within employee costs.
(4) The balance includes short term and immaterial operating leases which have been excluded from the new accounting treatment for leases, which
under NZ IFRS 16 have been capitalised as lease liabilities and right-of-use assets (refer notes 13 and 17).
Employee entitlements to salaries, wages and annual leave, to be settled within 12 months of the reporting date represent
present obligations resulting from employees' services provided up to the reporting date calculated at undiscounted
amounts based on remuneration rates that the Group expects to pay.
Incentive plans are recognised as a liability and an expense for discretionary short term incentives (STIs) based on a formula
that takes into account the economic value added by employees during the reporting period. The Group recognises this
provision where contractually obliged or where there is a past practice that has created a constructive obligation.

Sky / 2020 Annual Report
53
6. Earnings Per Share
Basic and diluted loss per share
30-Jun-20
30-Jun-19
(restated)30-Jun-19
Loss after tax attributable to equity holders of the
parent (NZD 000)

(156,979)

(608,158)

(608,158)
Weighted average number of ordinary shares on issue
(thousands)

656,639

506,842

389,140
Basic and diluted earnings/(loss) per share(cents)
(23.91)(119.99)(156.28)
30-Jun-2030-Jun-1930-Jun-19
Issued ordinary shares at the beginning of the year
389,139,785389,139,785389,139,785
Ordinary shares issued on 19 August 2019
25,085,408 - -
Ordinary shares issued on 1 November 2019
21,801,325 - -
Ordinary shares issued on 21 February 2020
200,000 - -
Ordinary shares issued on 2 June 2020
998,629,091 - -
Ordinary shares issued on 16 June 2020
311,423,949 - -
Total number of shares on issue
1,746,279,558 389,139,785 389,139,785
Weighted average number of ordinary shares on issue
656,638,762 506,842,173 389,139,785
The prior year loss per share has been restated to adjust for the impact of the rights issue completed in June 2020 (refer note 19).
Basic loss per share
Basic earnings or loss per share is calculated by dividing the profit attributable to equity holders of Sky by the weighted average
number of ordinary shares on issue during the year.
Diluted earnings per share
Diluted earnings or loss per share is calculated by adjusting the weighted average of ordinary shares outstanding to assume
conversion of all dilutive potential ordinary shares. Sky had no dilutive potential ordinary shares during the current or prior period.
7. Taxation
Income tax expense
The total charge for the year can be reconciled to the accounting profit/(loss) as follows:
In NZD 00030-Jun-2030-Jun-19
Loss before tax
(146,306)(583,377)
Prima facie tax expense at 28%
(40,966)(163,346)
Non deductible expenses
49,806187,812
Prior year adjustment
9(8)
Adjustment for change to building depreciation
(2,487) -
Tax loss not recognised
1,813 -
Other
22
Effect of foreign tax rates
2,289-
Income tax expense
10,46624,460
Allocated between
Current tax payable
27,65642,344
Deferred tax
(17,190)(17,884)
Income tax expense
10,466 24,460

54
Notes to the Consolidated Financial Statements (Continued)
7. Taxation (Continued)
Buildings are currently not depreciable for tax purposes. As a result of a change in tax legislation enacted on 25 March 2020
with effect from 1 July 2020, (being the beginning of the 2020/2021 income year), the ability to tax depreciate buildings has
been reinstated. The change requires the restatement of the tax base (representing the future benefit of available tax deductions)
in the current 2019/2020 income year. This has resulted in a decrease to the deferred tax liability of $2,486,958.
Current income tax expense
Income tax expense represents the sum of the tax currently payable and deferred tax, except to the extent that it relates
to items recognised directly in other comprehensive income, in which case the tax expense is also recognised in other
comprehensive income. The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as
reported in profit or loss because it excludes items of income or expense that are taxable or deductible in other years and it
further excludes items that are never taxable or deductible. The Group's liability for current tax is calculated using the rates
that have been enacted or substantively enacted by the balance date.
Imputation credits
In NZD 00030-Jun-2030-Jun-19
Imputation credits available for subsequent
reporting periods based on a tax rate of 28%

145,963

119,646
The above amounts represent the balance of the imputation credit account as at the end of the reporting period adjusted for:
• Imputation credits that will arise from the payment of the amount of the provision for income tax;
• Imputation debits that will arise from the payment of dividends. Availability of these credits is subject to continuity of ownership
requirements.
Deferred tax (assets) and liabilities
The following are the major deferred tax liabilities and assets and the movements thereon during the current and prior reporting periods.
In NZD 000Notes
Fixed
assets
Leased
assetsOther
Recognised
directly
in equityTo t a l
For the year ended 30 June 2020
At 1 July 2019
8,17815,983(5,271)3418,924
Acquired on acquisition of subsidiaries
271,923 - - -1,923
NZ IFRS 9 hedging adjustment recognised
through other comprehensive income

20

-

-

-

321

321
Reinstatement of building depreciation
(2,487) - - - (2,487)
Leased assets under NZ IFRS 16
- retained earnings impact on transition

3

-

(4,194)

-

-

(4,194)
(Credited)/charged to profit and loss
(5,715)(4,911)(4,077)(14,703)
Balance at 30 June 2020
1,8996,878(9,348)355(216)
For the year ended 30 June 2019
At 1 July 2018
17,54322,364(3,133)4,05240,826
NZ IFRS 9 hedging adjustment recognised
through other comprehensive income

20

-

-

-

(3,597)

(3,597)
Revaluation of available for sale investment
recognised through other comprehensive income

-

-

-

(421)

(421)
(Credited)/charged to profit and loss
(9,365)(6,381)(2,138) - (17,884)
Balance at 30 June 2019
8,17815,983(5,271)3418,924
Certain deferred tax assets and liabilities have been offset as allowed under NZ IAS 12 where there is a legally enforceable right
to set off current tax assets against current tax liabilities and where the deferred tax assets and liabilities are levied by the same
taxation authority.

Sky / 2020 Annual Report
55
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases
of assets and liabilities and their carrying amounts in the consolidated financial statements. Deferred income tax is not
accounted for if it arises from initial recognition of an asset or liability in a transaction, other than a business combination,
that at the time of the transaction neither affects accounting nor taxable profit or loss. Deferred income tax is determined
using tax rates that have been enacted or substantively enacted by the balance date and are expected to apply when the
related deferred income tax asset is realised or the deferred income tax liability is settled. Deferred income tax assets are
recognised to the extent that it is probable that future taxable profit will be available against which the temporary
differences can be utilised.
Key estimates and judgements
Deferred tax assets are recognised for unused tax losses and other deductible temporary differences to the extent that it
is probable that taxable profit will be available against which the losses and other deductible temporary differences can
be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be
recognised based upon the likely timing and level of future taxable profits. No deferred tax asset has been recognised in
relation to the RugbyPass accumulated losses of $14,506,000 and Igloo Limited’s accumulated losses of $12,150,000
(30 June 2019: $12,150,000). Those tax losses can be carried forward for use against future taxable profits of both entities
subject to meeting the requirements of the income tax legislation in the local tax jurisdiction including shareholder continuity.
8. Trade and Other Receivables
In NZD 000Notes30-Jun-2030-Jun-19
Trade receivables
40,193 51,405
Less provision for loss allowance
(898)(579)
Trade receivables - net
39,295 50,826
Other receivables
6,019 2,308
Prepaid expenses
11,540 8,862
Balance at end of year
56,854 61,996
Deduct prepaid expenses
(11,540)(8,862)
Financial instruments
2545,31453,134
Impairment of trade receivables
The Group applies the NZ IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss
allowance for all trade receivables.
To measure the expected credit losses trade receivables have been grouped based on the shared credit risk characteristics
and the days past due. The expected loss rates are based on the payment profiles of revenue over a period of 24 months before
30 June 2020 and 1 July 2019 respectively and the corresponding historical credit losses experienced within this period. As a result
of the COVID-19 pandemic the Group has increased its expected loss rates due to the uncertain future outlook for its residential
and commercial satellite customers. The ability of these customers to settle receivables in the near future is not currently
considered to relate to the historical credit risk characteristics of those customers.
The impairment of trade receivables as at 30 June 2020 is as follows:
30-Jun-2030-Jun-19
In NZD 000
Gross ImpairmentGross Impairment
Residential subscribers
24,383(653)31,622(423)
Commercial subscribers
2,975(58)5,197(17)
Wholesale customers
7,900 - 8,040 -
Advertising
2,894(32)5,132(42)
Other
2,041(155)1,414(97)
40,193(898)51,405(579)

56
Notes to the Consolidated Financial Statements (Continued)
8. Trade and Other Receivables (Continued)
As at 30 June, the ageing analysis of trade receivables is as follows:
30-Jun-2030-Jun-19
In NZD 000
Expected
loss rate
Gross
carrying
amount
Loss
allowanceIn NZD 000
Expected
loss rate
Gross
carrying
amount
Loss
allowance
Not past due
0.2% 34,735 71
Not past due
0.2% 44,527 84
Past due 0-30 days
2.2%3,56680
Past due 0-30 days
2.3%5,177118
Past due 31-60 days
6.4%93760
Past due 31-60 days
6.9%94465
Past due 61-90 days
53.7%406218
Past due 61-90 days
39.1%399156
Greater than 90 days
85.4%549469
Greater than 90 days
43.6%358156
40,19389851,405579
Movements in the provision for impairment of receivables were as follows:
In NZD 000Note30-Jun-2030-Jun-19
Opening balance
579 636
Charged during the year
5 1,352 1,186
Utilised during the year
(1,033)(1,243)
Closing balance
898 579
The provision charged and the amount utilised for impaired receivables has been included in subscriber related costs in profit or loss.
Amounts charged to the allowance account are generally written off when there is no expectation of receiving additional cash, usually
ninety days after a customer has been disconnected. The maximum exposure to credit risk at the reporting date is the fair value of
each class of receivable. The Group holds collateral of $1.2 million (30 June 2019: $1.3 million) in the form of deposits for satellite
commercial customers.
Trade and other receivables are recognised initially at fair value and subsequently measured at amortised cost using the
effective interest method, less provision for impairment. Collectability of trade receivables is reviewed on an on-going basis.
Debts which are known to be uncollectible are written off. An impairment loss is recognised based on expected credit losses
for each trade receivable group.

Sky / 2020 Annual Report
57
9. Programme Rights Inventory
In NZD 00030-Jun-2030-Jun-19
Opening balance
89,45878,378
Acquired as part of acquisition of RugbyPass and Lightbox (note 27)
9,517-
Settled by issue of shares to NZ Rugby Union (Note 19)
15,436-
Acquired during the year
280,247275,789
Written off during the year
(3,240)(5,715)
Charged to programming expenses
(277,596)(258,994)
Balance at end of year
113,82289,458
Key estimates and judgements
The COVID-19 pandemic has resulted in uncertainty around the valuation and amortisation of sports rights specifically in
relation to the value of major sports competitions. Some competitions have been delayed or postponed. As at 30 June 2020 it
is not clear when and if certain sports events will take place, and as a consequence, management have exercised judgement in
assessing the value of programming rights at year end and the estimated amortisation of rights costs. Where the Group has
negotiated an equitable reduction due to COVID-19 prior to balance date on contracted payments for certain sports rights
where content has been prepaid but not delivered or where content has been contracted for but will not be delivered, the
amortisation expense has been adjusted accordingly.
Programme rights inventories for broadcast are stated at the lower of cost and net realisable value (‘NRV’), and net of the
accumulated expense charged to the income statement to date. Such programming rights are included as inventories when
the legally enforceable licence period commences and all of the following conditions have been met: (a) the cost of each
programme is known or reasonably determinable; (b) the programme material has been accepted by the Group in accordance
with the conditions of the rights; and (c) the programme is available for its first showing.
Prior to being included in inventories, the programming rights are classified as television programme rights not yet available
for transmission and not recorded as inventories on the Group’s balance sheet and are instead disclosed as contractual
commitments (see note 29).
The cost of television programme inventories is recognised as programming rights in the income statement, over the period
the Group utilises and consumes the programming rights, applying linear-broadcast and time-based methods of amortisation
depending on the type of programme right, taking into account the circumstances primarily as described below.
These circumstances may change or evolve over time and, as such, the Group regularly reviews and updates the method used
to recognise programming expense.
• Sports – the majority or all of the cost is recognised in the income statement on the first broadcast or, where the rights are
for multiple seasons or competitions, such rights are recognised principally on a straight-line basis across the contracted
broadcast period or season.
• Movies – the cost is recognised in the income statement on an “as played” basis over the period for which the broadcast
rights are licensed.
• Pass through channels – the cost is amortised in the month of activity.
• Entertainment streaming content is amortised on a straight-line basis over the licence period.
The Group regularly reviews its programming rights for impairment. Where programme broadcast rights are surplus to
the Group’s requirements, and no gain is anticipated through a disposal of the rights, or where the programming will not
be broadcast for any other reason, a write-down to the income statement is made. Any reversals of inventory write-downs
are recognised as reductions in operating expense.

58
Notes to the Consolidated Financial Statements (Continued)
10. Trade and Other Payables and Contract Liabilities
In NZD 000Notes30-Jun-2030-Jun-19
Trade payables
94,009 79,000
Deferred consideration
27 10,522 -
Employee entitlements
7,307 13,575
Tax payables
13,750 8,885
Accruals
41,159 34,618
Provisions
26 9,274 -
Balance at end of year
176,021 136,078
Less
Payables not classified as financial instruments
(30,331)(22,460)
Financial instruments
25145,690113,618
Trade payables have increased due to accruals for sports rights payments where delivery of rights has been either postponed
or delayed.
Tax payables, provisions and employee benefits do not meet the definition of a financial instrument and have been excluded from
the “Trade and other payables” category.
Trade and other payables, other than contingent consideration which is measured at fair value, are initially measured at fair
value and are subsequently measured at amortised cost, using the effective interest method.
Contract liabilities
In NZD 00030-Jun-2030-Jun-19
Deferred revenue
51,180 54,396
The opening balance of contract liabilities at 1 July 2018 was $60,746,000. Contract liabilities of $54,396,000 were expensed during
the year ending 30 June 2020.
Contract liabilities are not classified as financial instruments.
Contract liabilities are recognised for payments received from customers in advance and are recognised into revenue over
the service period. Sky invoices customers in advance for both residential and commercial subscriptions. Contract liabilities
recognised at the end of the financial year are recognised as revenue in the following year.
11. Assets Held for Sale
On 11 February 2020, the Board made the decision to dispose of the assets of Outside Broadcasting Limited (OSB) a subsidiary
of Sky. The sale of the assets of OSB is expected to be completed within a year from the reporting date. As at 30 June 2020 the
assets have been classified as held for sale in the financial statements. Assets and liabilities held for sale have been reported at
their book values. OSB is part of the Sky operating segment. The sale of OSB was announced on 12 August 2020 (refer note 31).
In NZD 000Note30-Jun-20
Assets
Property, plant and equipment (net)
127,245
Right-of-use assets (net)
131,122
Assets held for sale
8,367
Liabilities
Employee entitlements
235
Short term lease liabilities
17349
Long term lease liabilities
171,017
Liabilities associated with assets held for sale
1,601

Sky / 2020 Annual Report
59
12. Property, Plant and Equipment
In NZD 000
Land, buildings
& leasehold
improvements
Broadcasting
& studio
equipment
Decoders &
associated
equipment
Capitalised
installation
costs
Other
plant &
equipment
Projects
under
developmentTo t a l
For the year ending 30 June 2020
Cost
Balance at 1 July 2019
70,011 144,811 321,242 261,914 89,091 42,866 929,935
Acquired as part of the
acquisition of RugbyPass and
Lightbox


-


-


-


-


385


-


385
Transfer between categories
(2,408)(78) - - 2,486 - -
Transfer from projects
937 1,676 - - 4,663 (9,440)(2,164)
Assets held for sale (note 11)
(196)(48,942) - - (6,485)(52)(55,675)
Additions
2,4193,68168112,5975,6542,43827,470
Disposals
- (503)(17,840)(22,590)(3,252) - (44,185)
Balance at 30 June 2020
70,763100,645304,083251,92192,54235,812855,766
Accumulated depreciation
Balance at 1 July 2019
26,267136,325298,351209,01263,337 33,426 766,718
Depreciation for the year
2,380 6,460 15,586 23,471 6,801 - 54,698
Assets held for sale (note 11)
(125)(42,414) - - (5,891) - (48,430)
Disposals
- (503)(17,830)(22,590)(882) - (41,805)
Balance at 30 June 2020
28,52299,868296,107209,89363,365 33,426 731,181
Net book value at
30 June 2020

42,241

777

7,976

42,028

29,177

2,386

124,585
For the year ending 30 June 2019
Cost
Balance at 1 July 2018
64,582 139,293 331,720 287,210 77,062 23,295 923,162
Transfer between categories
3,364 1,737 - - 6,739 (11,840)-
Transfer to software assets
- - - - - (3,127)(3,127)
Additions
2,951 4,153 3,229 15,566 5,476 34,538 65,913
Disposals
(886)(372)(13,707)(40,862)(186) - (56,013)
Balance at 30 June 2019
70,011144,811321,242261,91489
,09142,866929,935
Accumulated depreciation
Balance at 1 July 2018
24,753129,828280,099222,51256,388 - 713,580
Depreciation for the year
2,400 6,869 27,165 27,362 7,135 - 70,931
Impairment
- - 4,743 - - 33,426 38,169
Disposals
(886)(372)(13,656)(40,862)(186) - (55,962)
Balance at 30 June 2019
26,267136,325298,351209,01263,337 33,426 766,718
Net book value
at 30 June 2019

43,744

8,486

22,891

52,902

25,754

9,440

163,217

60
Notes to the Consolidated Financial Statements (Continued)
12. Property, Plant and Equipment (Continued)
Land, buildings and leasehold improvements at 30 June 2020 includes land with a cost of $8,820,000 (30 June 2019: $8,820,000).
Depreciation related to broadcasting assets (including decoders and capitalised installation costs) of $45,527,000 (30 June 2019:
$61,391,000) accounts for the majority of the total depreciation charge. Due to immateriality of the remaining depreciation, no
allocation of depreciation has been made across expense categories in the consolidated statement of comprehensive income.
In the prior year, an impairment charge of $38,169,000 was incurred in relation to the closure of infinite video platform project
(IVP) and impairment of decoders and associated equipment.
In compliance with NZ IFRS 16 ‘Leases’, assets relating to finance leases with a value of $2,387,000 were transferred to
right-of-use assets on 1 July 2019. (Refer note 13).
Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses except land which
is shown at cost less impairment. Cost includes expenditure that is directly attributable to the acquisition of the items.
Capitalised installation costs are represented by the cost of satellite dishes, installation costs and direct labour costs. Where
parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items of
property, plant and equipment.
Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when
it is probable that the future economic benefits embodied within the item will flow to the Group and the cost of the item
can be measured reliably. The cost of additions to plant and other assets constructed by the Group consist of all appropriate
costs of development, construction and installation, comprising material, labour, direct overhead and transport costs. For
qualifying assets directly attributable interest costs incurred during the period required to complete and prepare the asset
for its intended use are capitalised as part of the total cost. All other costs are recognised in profit or loss as an expense is
incurred. Additions in the current year include $2,064,000 of capitalised labour costs (30 June 2019: $746,000) and $205,000
of capitalised interest (30 June 2019: $997,000).
Projects under development comprise expenditure on partially completed assets. The projects include items of property, plant
and equipment and intangible assets. At completion of the project the costs are allocated to the appropriate asset categories
and depreciation or amortisation commences.
Costs may also include transfers from equity of any gains or losses on qualifying cash flow hedges of foreign currency
purchases of property, plant and equipment.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and recognised in other
costs in profit or loss.
Depreciation
Property, plant and equipment are depreciated using the straight-line method so as to allocate the costs of assets to their
residual values over their estimated useful lives as follows:
Leasehold improvements 5-50 years
Buildings 50 years
Broadcasting and studio equipment 5-10 years
Decoders and associated equipment 4-5 years
Other plant and equipment 3-10 years
Capitalised installation costs 5 years
The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at each balance date.
Key estimates and judgements
The estimated life of technical assets such as decoders and other broadcasting assets is based on management's best
estimates. Changes in technology may result in the economic life of these assets being different from that estimated
previously. The Board and management regularly review economic life assumptions of these assets as part of management
reporting procedures.

Sky / 2020 Annual Report
61
13. Right-Of-Use Assets
In NZD 000TransmissionPropertyEquipmentMotor vehiclesTo t a l
Right-of-use assets
Transition balance on 1 July 2019
61,8987,6028,03842477,962
Reclassify assets relating to finance
leases previously recognised

-

-

2,387

-

2,387
Held for sale (note 11)
- (1,029) - (93)(1,122)
Additions and lease modification
42,875 5,6283,5042152,028
Terminations
- (864) - - (864)
Depreciation
(25,341)(1,740)(6,342)(147)(33,570)
Balance at 30 June 2020
79,4329,5977,58720596,821
In the previous year, the Group only recognised lease assets for those assets relating to finance leases under NZ IAS 17 Leases.
The assets were presented in property, plant and equipment.
The Group leases various premises, transmission equipment, motor vehicles and sundry equipment. Rental contracts vary
between one and five years with some office leases containing renewal options. The Group has incorporated renewal options
into the lease term where it is reasonably certain that the lease will be extended.
Right-of-use assets are measured at cost which includes the initial measurement of the lease liability, plus any lease payment
made before the commencement date, initial direct costs and restoration costs less any lease incentives received. Right-of-use
assets are generally depreciated over the shorter of the asset’s useful life and the lease term on a straight-line basis.
Due to COVID-19 some lessors have provided the Group with lease concessions, being by way of reduction or postponement
of monthly payments, for periods of up to three months. These concessions have not resulted in any changes in either the lease
asset or the lease liability (refer note 17). The value of lease concessions received is $309,000 for property leases and $440,000 for
equipment leases. These are recorded as a deduction from operating expenses.

62
Notes to the Consolidated Financial Statements (Continued)
14. Intangible Assets
In NZD 000NotesSoftware
Other
intangibles
Projects
under
developmentTo t a l
For the year ending 30 June 2020
Cost
Balance at 1 July 2019
151,8891,083 - 152,972
Acquired as part of the acquisition of
RugbyPass and Lightbox

27

7,995

7,974
-

15,969
Transfer from projects under
development
122,164 - - 2,164
Additions
19,697 - 9,291 28,988
Disposals
(3) - - (3)
Balance at 30 June 2020
181,7429,0579,291200,090
Accumulated amortisation
Balance at 1 July 2019
101,4241,063 - 102,487
Amortisation for the year
29,3301,720 - 31,050
Disposals
(3) - (3)
Balance at 30 June 2020
130,7512,783-133,534
Net book value at 30 June 2020
50,9916,2749,29166,556
For the year ending 30 June 2019
Cost
Balance at 1 July 2018
138,883 1,083 - 139,966
Transfer from projects under
development

12

3,127

-
-

3,127
Additions
10,035 - - 10,035
Disposals
(156) - -(156)
Balance at 30 June 2019151,8891,083
-
152,972
Accumulated amortisation
Balance at 1 July 2018
79,573 1,050 - 80,623
Amortisation for the year
21,990 13 - 22,003
Disposals
(139) - -(139)
Balance at 30 June 2019
101,424 1,063 - 102,487
Net book value at 30 June 2019
50,46520-50,485
Software development costs recognised as assets are amortised on a straight-line basis over their estimated useful lives
(generally three to five years).
Direct costs associated with the development of broadcasting and business software for internal use are capitalised where
it is probable that the asset will generate future economic benefits. Capitalised costs include external direct costs of materials
and services consumed and direct payroll-related costs for employees (including contractors) directly associated with the
project and interest costs incurred during the development stage of a project. Additions in the current year to software
include $9,432,000 of accumulated capitalised labour costs (30 June 2019: $4,014,000), $7,956,000 of which were incurred
in the current year (30 June 2019: $3,331,000) and $513,000 of capitalised interest (30 June 2019; $60,000).
Projects under development comprise expenditure on partially completed assets. The projects include items of property, plant
and equipment and intangible assets. At completion of the project the costs are allocated to the appropriate asset categories
and depreciation or amortisation commences.
Key estimates and judgements
Assets that are subject to amortisation and depreciation are tested for impairment whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount
by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's
fair value less costs to sell and value-in-use.