Chorus FY23 results, annual report & sustainability report

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

Email: company.secretary@chorus.co.nz

STOCK EXCHANGE ANNOUNCEMENT

21 August 2023

Chorus 2023 full year results, annual report & sustainability report

The following are attached in relation to Chorus’ FY23 full year results:
1. Media Release
2. Investor Presentation
3. Annual Report (including audited financial statements)
4. NZX Financial Results Announcement
5. NZX Distribution Notice
6. Sustainability Report
7. Letter to investors

Chief Executive Officer JB Rousselot, and Chief Financial Officer Mark Aue, will discuss
the FY23 full year results by webcast at 10.00am New Zealand time today. The
webcast will be available at www.chorus.co.nz/webcast.

Authorised by:

Mark Aue
Chief Financial Officer

ENDS

For further information:

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

Steve Pettigrew
Head of External Communications
Mobile: +64 (27) 258 6257
Email: steve.pettigrew@chorus.co.nz

---

21 August 2023

Chorus delivers solid full-year result as Kiwis continue to favour fibre broadband
Highlights
• Fibre uptake: 73% in UFB areas, with UFB fibre rollout now complete
• Fibre growth: added 72,000 fibre connections in FY23, totalling 1,031,000
• Fibre plans: 91% of residential and business connections above 300Mbps
• Revenue: grew to $980m from $965m in FY22
• EBIT: down to $226m from $248m in FY22
• Net profit: down to $25m from $64m in FY22
• Dividend: 42.5 cents per share, unimputed for FY23
In FY23, Chorus demonstrated resilience as an essential utility provider amidst economic volatility,
inflation, and uncertainty. As recent weather events have shown, Kiwi homes and businesses
increasingly rely on fast, reliable broadband connections to live, learn, work and play.
Financial overview
Increased fibre connections, the uptake of high-speed plans and inflation-linked price changes saw
underlying revenue grow to $981m from $959m in FY22.
Despite inflationary pressures, underlying operating expenses remained stable at $299m. The
operating results led to an underlying FY23 EBITDA of $682m, a $22m increase from the FY22 EBITDA
of $660m.
Reported EBITDA was $672m, including $10m in one-off costs for extreme weather events and
changes to Chorus’ operating model. Net profit after tax (NPAT) was $25m, down from $64m in
FY22.
Continuing growth in data usage
In July, residential and business fibre customers on the Chorus network used an average of 595GB of
data. Average data usage is near where it peaked during the Auckland Covid-19 lockdown in
September 2021. Forty-five per cent of all traffic on Chorus’ network is streaming video.
Chorus CEO JB Rousselot commented: “There is an apparent pent-up demand for 4K content with
nearly a third of households in New Zealand having a main TV that is 4K capable.
“While 4K content offerings in New Zealand lag other markets, especially in live sports, we expect to
see a significant impact on broadband network capacity as these higher resolution streams become
available.”

Transition to an all-fibre digital infrastructure company
With the ultra-fast broadband rollout finished and the new regulatory regime for fibre established,
Chorus is transitioning to focus more on operating the network. “Customers value fibre above other
technologies as it offers fast, reliable, and resilient service,” said Rousselot.
“Where the long-term value of the connection justifies the cost, we’re willing to invest in connecting
more addresses or locations to fibre, and our new operating model aligns with this strategy.
“This willingness to invest is demonstrated by our upgrading our existing fibre footprint to
Hyperfibre multi-gigabit capability and increasing metro data capacity fourfold to ensure New
Zealanders continue to have access to world-class digital infrastructure.”
Fibre connections on Chorus’ network grew to 1,031,000 in existing ultra-fast broadband areas and
competitively won new property developments. Chorus CEO JB Rousselot commented, “We strongly
believe fibre remains the most effective technology choice for most New Zealanders.
“I’m particularly pleased to see our entry-level fibre plan, Home Fibre Starter, growing strongly with
16,000 connections. It is a plan aimed at price-conscious customers with lighter broadband needs.”
Ninety-one per cent of residential and business plans are on speeds of 300Mbps or above.
Call for more transparent consumer choices
Data consumption trends continue to reinforce the competitive positioning and the future-proof
nature of fibre compared to other technologies.
“It is disappointing to see some retailers not offering all our products to their customers, especially
the low-cost Home Fibre Starter service or our multi-gigabit Hyperfibre range,” said Rousselot.
“It is often too hard for consumers to find our full range of fibre products, which is unfair as
ultimately there is no such thing as 'fibre-like'. Either you're on fibre, or you're not.”
Copper retirement
The migration to fibre saw Chorus’ copper broadband and voice connections reduce by about a
third, or 104,000. About 240,000 copper connections remain. With copper nearing the end of its
technological life New Zealanders without access to fibre will need to consider alternative
technologies.
“With the ongoing shift to fibre and the rise of alternative wireless and satellite broadband options
in rural areas, we’re now on a clear path toward the full retirement of the copper network in New
Zealand,” said Rousselot.
“By the end of 2026, we aim to have fully withdrawn copper voice and broadband services in our
fibre areas, paving the way for a more reliable digital experience.
“Copper is increasingly unsuited to customers’ growing broadband needs. We believe fibre could
and should extend further to help bridge the digital divide between urban and rural communities.
We're currently exploring extending fibre to 10,000 premises beyond UFB areas and considering how
Chorus might play a part in a wider extension with the right investment incentives.”

Tracking towards sustainability targets
Chorus is committed to making a positive impact on the environment and society. In FY23, the
company achieved a 5% reduction in electricity usage, attributed mainly to our copper withdrawal
programme, which saw the retirement of a further 414 broadband cabinets in FY23. Chorus’ Scope 1
and 2 emissions fell by 24% from the year before.
“It was another record year for total data traffic on our network at 7,402 petabytes, up from 7,140
petabytes. Despite this growth, fibre’s efficiency means we can carry more data with less emissions.
We’re also exploring renewable energy sources for the network and plan a solar photovoltaics trial
on exchange buildings.
“While pleased with our progress, we acknowledge that we are in the early stages of our
environmental and social impact journey. We have set ambitious targets for 2030, and although
we’ve made strides this year, we recognise that there is much more for us to do in the ongoing
pursuit of our sustainability targets,” said Rousselot.
Dividend
Chorus will pay a final dividend of 25.5 cents per share, unimputed, on 10 October 2023, bringing
total dividends for FY23 to 42.5 cents per share.
FY24 guidance
FY24 guidance is subject to no material changes in regulatory or competitive outlook.
• EBITDA: $680—$700 million
• Capital expenditure: $400—$440 million
• FY24 dividend: 47.5 cents per share, unimputed
ENDS
Chorus Chief Executive JB Rousselot and Chief Financial Officer Mark Aue will discuss the full-year
results from 10.00 am today, NZST, at www.chorus.co.nz/webcast
For further information:
Steve Pettigrew
External Communications Manager
+64 27 258 6257
steve.pettigrew@chorus.co.nz
Brett Jackson
Investor Relations Manager
+64 27 488 7808
brett.jackson@chorus.co.nz

---

FY23 RESULTS
21 August 2023

21 August 2023
Disclaimer
This presentation:
• Is provided for general information purposes and does not constitute investment advice or an offer of or invitation to purchase Chorus
securities.
• Includes forward-looking statements. These statements are not guarantees or predictions of future performance. They involve known
and unknown risks, uncertainties and other factors, many of which are beyond Chorus’ control, and which may cause actual resultsto
differ materially from those contained in this presentation.
• Includes statements relating to past performance which should not be regarded as reliable indicators of future performance.
• Is current at the date of this presentation, unless otherwise stated. Except as required by law or the NZX Main Board and ASX listing
rules, Chorus is not under any obligation to update this presentation, whether as a result of new information, future events or otherwise.
• Should be read in conjunction with Chorus’ audited consolidated financial statements for the year to 30 June 2023 and NZX and ASX
market releases.
• Includes non-GAAP financial measures such as "EBITDA”. These measures do not have a standardised meaning prescribed by GAAP and
therefore may not be comparable to similar financial information presented by other entities. They should not be used in substitution for,
or isolation of, Chorus' audited consolidated financial statements. We monitor EBITDA as a key performance indicator and we believe it
assists investors in assessing the performance of the core operations of our business.
• Has been prepared with due care and attention. However, Chorus and its directors and employees accept no liability for any errors or
omissions.
• Contains information from third parties Chorus believes reliable. However, no representations or warranties (express or implied) are
made as to the accuracy or completeness of such information.
FY23 RESULTS
2

Agenda
>FY23 overview4
>Fibre uptake and connection trends5-8
>Financial results9-13
>Capex14-15
>FY24 guidance, capital management 16-19
>Regulatory recap20
>NZ runs on fibre 21-23
>Operating model & strategic priorities24-27
>Sustainability in FY2328
Appendices
▪A: Pricing and market data30-32
▪B: Sustainability33
▪C: Additional financial information34-37
▪D: Additional regulatory information38-40
21 August 2023
JB Rousselot, CEO
Mark Aue, CFO
JB Rousselot, CEO
FY23 RESULTS
3

21 August 2023
FY23 overview
FY23 RESULTS
1. Earnings before interest, income tax, depreciation and amortisation (EBITDA) is a non-GAAP profit measure without a standardised meaning for comparison between
companies. We monitor EBITDA as a key performance indicator and we believe it assists investors in assessing the performance of the core operations of our business.
4
FY23FY22
Fibre
connections
1,031,000959,000
Broadband
connections
1,188,0001,189,000
Fixed line
connections
1,271,0001,304,000
Data traffic
(petabytes)
7,402 7,140
Employee
engagement
8.7/108.5/10

>73% uptake within completed UFB footprint
▪UFB1 77% (+3%)
▪UFB2 56.5% (+6.5%)
▪985,000connections (FY22: 919,000)*
*includes business premium and partly subsidised education connections
>10% of fibre connection growth outside Chorus UFB zone
39,000
26,000
7,000
Connection growth +72k
Chorus UFB1Chorus UFB2Non-UFB/LFC
Solid lift in fibre uptake despite workforce constraints
Uptake
21 August 20235
FY23 RESULTS
3
8
14
24
35
45
53
60
69
74
77
0
10
34
42
50
56.5
UFB1UFB2

21 August 2023
Continued broadband growth in our UFB zone
* Excludes ~2k partly subsidised education connections and 11k fibre premium and data services (copper) connections
7
6
3
6
4
-5
-4
-2
-2
-3
-2
-2
-3
-3
-2
-6
-2
-6
-6
-8
-1
-2
-2
-1
-2
-1
-1
-2
-1
-2
-10-50510
Q4 FY23
Q3 FY23
Q2 FY23
Q1 FY23
Q4 FY22
Q4 FY23
Q3 FY23
Q2 FY23
Q1 FY23
Q4 FY22
Q4 FY23
Q3 FY23
Q2 FY23
Q1 FY23
Q4 FY22
Broadband connections
Copper (no broadband) connections
Quarterly change (’000s) by zone*
Other fibre
company (LFC)
zone
Broadband connections25,000Local Fibre Company and fixed wireless provider
activity is driving a gradual decline in copper
connections.
Copper line (no broadband)14,000
TOTAL39,000
Non-UFB zoneBroadband connections129,000Ongoing decline in copper connections due to
mobile/fixed wireless/satellite footprint
expansion. Partly offset by fibre connections
growth for greenfield developments.
Copper line (no broadband)23,000
TOTAL152,000
Chorus UFB zoneBroadband connections1,034,000Chorus copper withdrawal programme resumed
after a pause in Q3 following Cyclone Gabrielle.
Increase in technician workforce enabled a
resumption of proactive fibre migration activity.
Copper line (no broadband)35,000
TOTAL1,069,000
6
FY23 RESULTS
Data is indicative as at 30 June

21 August 2023
FY23 RESULTS
>92kfibre installations (FY22: 117k)
▪at lower end of 90k to 110k guidance due to
technician shortages
▪workforce constraints removed by end FY23
>Managed migration programme
▪contributed 35k of the 92k installations
▪copper withdrawal drove activation of 19k
managed installation addresses
▪17k activations from offnet addresses
Workforce back to sustainable level
7
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
FY19FY20FY21FY22FY23
Managed migration: installations vs activations
Service activation: from copper
Service activation: from offnet
Fibre installations
Customer
experience
FY23FY22
Fault restoration7.8 out of 10
(target 8.2)
8.2 out of 10
Intact provisioning7.3 out of 10
(target 7.6)
7.3 out of 10

>1Gbps and Hyperfibreconnections were 39% of residential connections growth in FY23
>300Mbps plans were 50% of residential connections growth
>91% of residential and business connections are on plans of 300Mbps and above
21 August 2023
More residential consumers opting for 1 Gig plans
0
20,000
40,000
60,000
80,000
100,000
120,000
June 2022June 2023
Business
2Gbps+1Gbps500Mbps300Mbps200Mbps100Mbps<100MbpsVoice
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
1,000,000
June 2022June 2023
Residential
2Gbps+1Gbps300Mbps100Mbps<100MbpsVoice
8
FY23 RESULTS
23%
24%
68%
67%
34%
26%
28%
43%
28%
20%

FY23 RESULTS
Financial performance
Mark Aue, Chief Financial Officer
21 August 2023

Income statement
21 August 2023
>weighted effective interest rate on debt increased from
3.77% to 5.4% (includes accounting adjustments)
FY23 RESULTS
FY23
$m
FY22
$m
Operating revenue980965
Operating expenses(308)(290)
Earnings before interest, tax,
depreciation and amortisation
(EBITDA)
672675
Depreciation and amortisation(446)(427)
Earnings before interest and income tax226248
Net interest expense(195)(142)
Net earnings before income tax31106
Income tax expense(6)(42)
Net earnings2564
>underlying FY23 EBITDA of $682m vs underlying FY22
EBITDA of $660m (see slide 13)
>$15m of additional accelerated copper cable depreciation in
fibre areas
10
>one-off $10m accounting adjustment for useful life of
buildings
>$9m of extreme weather and operating model change costs
>$1m of consumer credits for extreme weather

FY23
$m
FY22
$m
Fibre broadband (GPON)622548
Fibre premium (P2P)6866
Copper based broadband117153
Copper based voice3952
Data services copper46
Field services7071
Value added network
services
2627
Infrastructure3130
Other312
Total980965
21 August 2023
▪copper revenues declining as customers migrate to Chorus fibre or
competing fibre/wireless networks
▪CPI increase of 7.2% applied to some services from mid-December
>growing fibre uptake and ARPU: $53.25 (June FY23) vs $50.67 (June FY22)
Revenue
FY23 RESULTS
>FY22 included $6m property optimisation and $3m legal settlement
>greenfieldsrevenue $33m (FY22: $29m); partly offset by reduced
roadworks $8m (FY22: $10m)
11
>growing demand for direct fibre, mobile access and other backhaul

>CPI impact and increased employee numbers; FY22 included $9m holiday
pay benefit and $2m COVID impact of reduced labour capitalisation
>reduced fault volumes offset by $3m of extreme weather costs, CPI impact
and more expensive fault mix
FY23
$m
FY22
$m
Labour 7664
Network maintenance6059
IT4250
Other network costs3729
Rent, rates and property
maintenance
2628
Electricity1917
Provisioning11
Insurance54
Consultants98
Regulatory levies99
Other2421
Total308290
21 August 2023
Expenses
FY23 RESULTS
>savings from migration off legacy systems and release of $2m software
provision
>$1m extreme weather costs; FY22 included one-off costs for office relocation
and rationalisation
12
>$3m extreme weather costs; $3m network and property optimisation costs
>advertising spend up $2m with increased activity post-COVID

21 August 2023
FY23 RESULTS
13
Underlying EBITDA & asset revaluation
AdjustmentFY23
adjusted
$m
AdjustmentFY22
adjusted
$m
Reported operating revenue
Underlying operating revenue
▪Extreme weather credit
980
__1
981
▪Lease change
▪Legal settlement
965
(3)
_(3)
959
Reported operating expenditure
Underlying operating expenditure
▪Extreme weather costs
▪Operating model change
308
(6)
(3)
299
▪Holiday pay provision
290
9
299
UNDERLYING EBITDA682660
Reported EBITDA672675
Asset revaluation: Land & buildings
>Land & buildings assets increased by $282 million following adoption of revaluation policy
▪valuation increase from $75m to $357m
▪net effect on annual depreciation expected to be ~$1m per annum

21 August 2023
Gross capex: $454 million (FY22 $492m)
Sustaining capex of $207m (FY22: $161m) see p35 for summary
>new property development $68m; Fiordland fibre
backhaul $6m (largely grant funded)
>fibre incentive spend varies subject to connection volumes
and retailer activity
>92,000 installations (FY22: 117,000); $32m backbone;
$51m layer 2
FY23 RESULTS
FibrecapexFY23
$m
FY22
$m
UFB communal577
Fibre installations & layer 2193195
Fibre products & systems1012
Other fibre& growth10579
Fibre sustain1213
Customer retention costs3027
Subtotal355403
▪Average cost per UFB premises installation: $1,067 vs $1,000 -$1,115 guidance*
*excludes layer 2 and includes standard installations, some non-standard single dwellings and service desk costs
14
>UFB rollout ended Dec 2022

21 August 2023
Capex: Copper and Common
FY23 RESULTS
CoppercapexFY23
$m
FY22
$m
Network sustain2727
Copperconnections11
Copper layer213
Customer retention costs47
Subtotal3338
CommoncapexFY23
$m
FY22
$m
Informationtechnology4432
Building& engineering services2219
Subtotal6651
>IT lifecycle projects and investment to support exit
from legacy systems
>FY23 included ~$7mrural cabinet upgrade project
(largely grant funded)
>building projects resumed after COVID delays; FY22
included office relocation costs
15
>reducing with stop sell now in place in fibre areas

180
161
207
492
331
247
$400m to
$440m
0
100
200
300
400
500
600
700
FY21FY22FY23FY24
Sustaining
Discretionary growth
>EBITDA: $680m to $700m
▪subject to no material changes in circumstances or outlook
▪objective of modest EBITDA growth
▪expect costs to be ~$10m higher given deferral of some costs into FY24,
CPI increases, additional regulatory and compliance costs, and operating
model changes due in Q2
>GROSS CAPEX: $400m to $440m
▪Copper$25m to $35m
▪Common$55m to $75m
▪Fibre$320m to $340m: includes $180m-$190m fibre installations &
layer 2 capex: based on mass market 80,000 –100,000 fibre connections
(cost per installation: $1,100 -$1,250*), and 1,500 –2,500 backbone
builds
Note: ranges are not necessarily additive
▪FY24 sustaining capexlifts to $220m-$240mwith CPI effects, catch-
up on property projects delayed by COVID, equipment upgrades to enable
Hyperfibre, increased transport spend to support greater capacity and
rural layer 2 lifecycle replacement.
21 August 2023
FY24 guidance
FY23 RESULTS
16
*excluding layer 2 and including standard installations and some non-standard single
dwellings and service desk costs
$m
Capital expenditure components
**Sustaining network capex is investment to
maintain, replace or improve an existing copper or
fibre asset.

21 August 2023
Net debt/EBITDA
As at30 June 2023 ($m)
Borrowings2,561
+ PV of CIP debt securities
(senior)
279
+ Net leases payable181
Sub total3,021
-Cash76
Total net debt2,945
Net debt/EBITDA*4.39x
>~65% of CNU interest rate exposure was fixed at
30June
▪expect to be~70% fixed over next 3 years with net ~$750m
forward start fixed interest rate swapsstarting in first half of
FY24
▪see slide 37 in Appendix for summary of bond rates
*Based on S&P and bank covenant methodologies
FY23 RESULTS
17
>ND/EBITDA increased from 4.08x(FY22) to 4.39x
▪borrowings increased from $2,389 million (FY22)
▪ratings agency thresholds: Moody’s 5.25x, S&P 5.0x
▪the Board considers that a ‘BBB’ credit rating or equivalent is
appropriate for a company such as Chorus
▪intention that in normal circumstances the ratio of net debt to
EBITDA will not materially exceed 4.75x
▪financial covenants require senior debt ratio to be no greater
than 5.5x
0
1
2
3
4
5
6
0
500
1000
1500
2000
2500
3000
FY18FY19FY20FY21FY22FY23
Average effective interest rate*
EoY Net DebtWeighted average interest rate
%
$m
* includes all interest on borrowings, bank commitment fees and non-cash
accounting adjustments related to financing

18
>At 30 June, debt of $2,561mcomprised:
▪Long term bank facilities of $450m(Undrawn)
▪NZ bonds: $900m
▪Euro Medium Term Notes $1,661m(NZ$ equivalent at hedged rates)
NZ
$M
200
500
200
328
514
820
85
105
167
210
0
100
200
300
400
500
600
700
800
900
NZ BondEUR EMTNFace value of CIP debt securities issued
Crown financing and debt profile
21 August 2023
FY23 RESULTS
Crown
securities
$m
30
June
2025
30
June
2030
30
June
2033
30
June
2036TOTAL
Equity securities
(cumulative total)
85.3197.1377.7766.4766.4
Debt securities
(maturity profile)
85.3104.7166.7210.2566.9
Crown equity securities
▪unique class of security with no voting rights but a repayment
preference on liquidation
▪an increasing portion attract dividend payments from 30 June 2025
onwards based on 180 day NZ bank bill rate, plus 6% p.a. margin
▪redeemable by cash payment of total issue price or the issue of Chorus
shares (at a 5% discount to the 20-day VWAP for Chorus shares)
Crown debt securities
•unsecured, non-interest bearing and carry no voting rights
•to be redeemed in tranches from 30 June 2025 to 2036 by repaying
the issue price to the holder
18

>FY23 final dividend
▪25.5cps, unimputed
•record date: 12September2023
•payment date: 10October2023
•no Dividend Reinvestment Plan available
21 August 2023
>FY24dividend guidance*
▪47.5cps in FY24
▪dividends unimputed in medium term
>~$139m of $150m share buyback complete
▪17.5m shares purchased since February 2022
▪435 million shares on issue at 30 June
Dividend and share buyback
FY23 RESULTS
cps
* subject to no material adverse changes in circumstances or outlook
Dividend guidance
19
Chorus’ policy is to pay an ordinary dividend of 60% to
80% of free cash flow (i.e. net cash flow from operating
activities lesssustaining capital expenditure)
0
5
10
15
20
25
30
35
40
45
50
FY22FY23FY24
FY22 increase to prior guidance

21 August 2023
FY23 RESULTS
Regulatory recap
20
>Information Disclosure in May 2023:
▪RAB grew to $5,710min 2022 (calendar)
▪MAR 2022wash-up balance of ~$47m carried
forward to RP2
>Next regulatory period -RP2 (Jan 2025 to Dec
2028)
▪Chorus expenditure proposal due 31 October
▪WACC due to be confirmed in July 2024
4,032
4,426
1,416
-511
389
356
28
1,284
2022 RAB movement ($m)
Core RABFinancial Loss Asset
5,448
5,710

JB Rousselot, Chief Executive Officer
21 August 2023
FY23 RESULTS

Data usage back at COVID levels; 4K to come
21 August 202322
0
500
1000
1500
2000
2500
Monthly fibre
data usage
today
All streaming
in 4K
All TV
streamed in
4K
4K EFFECT ON DATA
DEMAND
Data usage (GB)
FY23 RESULTS

21 August 2023
FY23 RESULTS
23
Evolution of services driving greater data needs
TodayNear termFuture
Residential
speed
Up to 1GbpsUp to 10GbpsUp to 50Gbps
Enterprise
speed
Up to 100GbpsUp to 400-800GbpsUp to 1.6-3.2Tbps
IntelligenceConditionally
autonomous
Highly autonomous,
fast provisioning times
Fully autonomous
Reliability &
Latency
99.999%/ 5ms
consistent latency
/ low jitter
99.999% / 1ms
latency (hard
guarantee) / very low
jitter
Deterministic reliability/
<1ms latency (hard
guarantee) / very low
jitter
Trustworthy
& Green
5x better per bit
energy efficient
10x better per bit
energy efficient, fast
problem detection and
response (minutes)
10x-plus better per bit
energy efficient, very
fast problem detection
and response (seconds)
Source: World Broadband Association, Omdia
▪applications driving greater bursts of data download and upload (e.g. video, games, software updates)
▪growing number of connected devices per household and multiple simultaneous users requires more bandwidth

21 August 2023
FY23 RESULTS
24
A nimbler Chorus
>Unlocking value through a matrix model
▪including three value streams with sharp strategies
and end-to-end approaches
▪historical functional units (Customer & Network
Operations; Product, Sales & Marketing) realigned to
drive strategic outcomes
▪and enabling a thriving culture
Operating model transition from build to operate

21 August 2023
FY23 RESULTS
25
>Market dynamics remain positive
▪Home Fibre Starter 50Mbps traction: ~60% of July net adds
from offnet
▪1Gig share of net adds ~40% vs 24% share of connections
▪large retailers promoting Hyperfibre(2-8Gbps)
▪continued winbackin Wellington cable areas
>FY24 focus
▪NZ runs on fibrecampaign driving fibre awareness
▪leveraging copper withdrawal programme for fibre demand
▪increasedemphasis on UFB2 uptake
▪strategic approach to CPI adjustments from 1 October
Targeting 80% fibre uptake

21 August 2023
FY23 RESULTS
Bringing more focus to opportunity
▪PowerSense: extreme weather events proved product value
▪Edge Centre: strong pre-orders for extra Auckland capacity
▪Backhaul: fibre nodes in 7 data centres; cellsitedemand growing
▪Smart locations: +19% growth in FY23 as smart city and utility requirements
expand (e.g. traffic cameras, digital billboards)
▪New property development: build completed (ready to connect) for 33k lots in
FY23; current pipeline of work suggests slightly lower completions in FY24
▪Fibre expansion: tender issued for 10k premises (~60% offnet) adjacent to UFB;
decision in H1 FY24with build expected FY25. Further expansion subject to business
casing and regulatory and policy settings
▪Other opportunities: exploring digital infrastructure options
26
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
FY20FY21FY22FY23
Orders (lots)Completed
New Property Pipeline

21 August 2023
FY23 RESULTS
27
Becoming an all-fibredigital infrastructure company
Chorus UFB area
▪35k copper voice lines
▪55k copper broadband lines
Local fibreco. area
▪14k copper voice lines
▪20k copper broadband lines
Non-fibrearea
▪23k copper voice lines
▪90k copper broadband lines
▪FY23: 544 cabinets closed
and~30k consumer notices
▪FY24 target:750+ cabinets
closed,30k+ consumer notices,
88% broadband retention rate
▪targeted copper withdrawal where
remaining connections are
uneconomic
▪first trial notices issued
▪Chorus market share <50%
▪<50% of remaining connections
are TSO qualifying
▪testing satellite options
▪regulatory review 2025
Retired by
end 2026
Retired by
early 2030s

21 August 2023
FY23 RESULTS
28
Significant sustainability gains in FY23
50,000
55,000
60,000
65,000
70,000
75,000
80,000
85,000
90,000
95,000
100,000
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
FY21FY22FY23
Data vs Electricity usage
Copper data usage (PB)Fibre data usage (PB)
Electricity usage (MwH)
▪Copper shut down is beginning to drive electricity reduction
(target: 25% reduction by 2030)
▪Record data traffic (7,400 petabytes) with 91% carried more
energy efficiently by fibre

Questions?
21 August 2023

21 August 2023
FY23 RESULTS
Fibre plan -consumerCurrent wholesale price Price from 1 Oct 2023Notes
Voice line$27.45$29.11
Home starter 50/10Mbps$35$35
Applies where retail price is $60. Price
reduced to $35 from 1 Feb 2022
50/10Mbps$47.28$50.43
100/20Mbps
300/100Mbps
$50.50$53.54
100Mbps is anchor service. 300Mbps
plan introduced late 2021.
1Gbps $58$61.86
Hyperfibre2Gbps$70$70
Hyperfibre4Gbps$85$85
Hyperfibre8Gbps$110$110
Copper pricingCurrent wholesale price Price before 16 Dec 2022 Notes
Copper line$36.17$33.73
Annual CPI adjustment mid-
December 2023
Copper broadband$48.35$45.09
30
Appendix A: Pricing and market data

0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
30-Jun-2230-Sep-2231-Dec-2231-Mar-2330-Jun-23
21 August 2023
30 June
2022
30 Sept
2022
31 Dec
2022
31 March
2023
30 June
2023
Unbundled copper
(no broadband)
1,0001,000not
material
not
material
not
material
Baseband copper
(no broadband)
102,00094,00085,00080,00072,000
Copper ADSL
(includes naked)
122,000112,000102,00094,00084,000
VDSL
(includes naked)
118,000109,000100,00092,00083,000
Fibre broadband
(GPON)
949,000969,000986,0001,002,0001,021,000
Data services
(copper)
2,0001,0001,0001,0001,000
Fibre premium
(P2P)
10,00011,00011,00010,00010,000
Total connections
1,304,0001,297,0001,285,0001,279,0001,271,000
Fibre (GPON)
VDSL
Copper ADSL
Baseband copper
Fibre comprises 81% of Chorus connections
>1,188,000 broadband connections comprises:
▪1,021,000 fibre (GPON) connections
▪167,000 VDSL/ADSL (copper) connections
Business premium
Note: ~2,000 partly subsidisededucation connections are excluded from this data
31
FY23 RESULTS

-
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1,800,000
2,000,000
NZ broadband market –by retailer
SparkOne2degrees (incl Vocus)Mercury (incl Trustpower)ContactOthers
-
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1,800,000
2,000,000
NZ broadband market –by technology
Chorus xDSLChorus mass market fibreChorus premium fibre
Local fibre companies (UFB)Other fibre networksOne cable
Fixed (mobile) wirelessLegacy fixed wireless, satellite
Source: IDC
FY23 RESULTS
21 August 202332

21 August 2023
FY23 RESULTS
33
Appendix B: Sustainability
See also https://company.chorus.co.nz/sustainability

▪copper faults continue to fall in Chorus fibre areas as we withdraw copper services
▪non-fibre areas (~13% of population) make up the majority of copper network faults and reactive costs
▪H2 FY23 copper reactive fault spend included Cyclone Gabrielle costs
21 August 2023
0
5,000
10,000
15,000
20,000
25,000
Chorus UFBLFC UFBRoNZ (non-
UFB)
Copper –fault volumes by area
H1 FY22
H2 FY22
H1 FY23
H2 FY23
0
2
4
6
8
10
12
Chorus UFB LFC UFB Rest of NZ (non
UFB)
Copper -reactive fault spend
by area
Note:
▪reactive maintenance excludesspend on proactive maintenance and customer networks (i.e. premises wiring, no fault found, cancellations)
$m
# of
faults
FY23 RESULTS
Maintenance trends
34
Appendix C: Additional financial information

21 August 2023
Sustaining vs non-sustaining
capex
>sustaining network capex is investment to maintain,
replace or improve an existing copper or fibre asset
>$207m of FY23 capex was sustaining vs $247m non-
sustaining
>fibre sustaining capex is expected to increase over time
as the asset ages
**Relates to provisioning, systems and service desk costs
35
Non-sustaining capexFY23 $mFY22 $m
UFB communal577
Fibre installations142166
Greenfield growth* and product
development
7459
Footprint expansion*1115
Customer retention (incentives)1514
Subtotal247331
Coppercapex: sustainingFY23 $mFY22 $m
Network sustain2027
Copperconnections11
Copper layer213
Customer retention costs**47
Subtotal2638
Commoncapex: sustainingFY23 $mFY22 $m
Informationtechnology4432
Building& engineering services2219
Subtotal6651
Fibrecapex: sustainingFY23 $mFY22 $m
Layer 25129
Fibre products & systems67
Network sustain1213
Other fibre3110
Customer retention costs**1513
Subtotal11572
*majority funded by third party contributions
FY23 RESULTS

>Below are examples of RAB and non-RAB investment being evaluated for 10-year planning:
▪dollar ranges are indicative only and reflect a 10-year total in 2023 dollars
▪opportunities to invest in discretionary long-term growth capex could range up to ~$300 million per annum, subject
to consumer demand (e.g. installations and greenfields), business casing and regulatory settings/approvals
Indicative long-term investment opportunities
Non-RAB investment
(assessed on a risk-adjusted
return basis vs other capital
allocation/investment options)
New products
Edge Centre
Regional backhaul
Other
RAB investment opportunities
XGS-PON electronics (1):
migration to multi-gigabit capability
Fibre installations:
connect fibre to premises
Rural fibre(3):
fibre up to 90% population
Sustainability:
(e.g. solar power options)
Greenfields (2):
communal fibre to new premises
Smart locations:
non-building installations (e.g.CCTV)
Network resilience:
enhance network robustness
Rural fibre electronics:
lifecycle update for RBI* network
36
KEY:Small: <$100m Medium: $100m to $400m Large: $400m+
S
M
L
L
L
L
M
L
M
S
S
SUSTAINING CAPEX –NEW PROJECTS
DISCRETIONARY GROWTH CAPEX
1.Limited XGS-PON investment in RP1. Broader rollout as technology matures.
2.Greenfields investment is gross amount including customer contributions.
3.Communal rollout cost only.
M
S
_
*RBI is Rural Broadband Initiative
FY23 RESULTS
21 August 2023

21 August 2023
FY23 RESULTS
37
Hedging profile
Bond
Amount
(NZ$m)Current hedge profileForward looking profile
Fixed hedging
movements 1HY24 ($m)
EMTN 2023328100% Fixed at 5.15%Matures Oct 23-350
EMTN 2026514100% Fixed at 3.39%Fixed for life of bond
NZD 2027200100% Fixed at 1.98%Fixed for life of bond
NZD 2028500100% Fixed at 4.35%
Coupon to be reset in Dec 23, will be 100%
fixed from this date at a margin of 1.8% over
4.41%500
EMTN 2029820
Swapped to a margin over floating
(BKBM) through cross currency
interest rate swaps
Will be ~50% fixed at margin of 2.2% over
4.1% from Dec 23400
NZD 2030200
Swapped to a margin over floating
(BKBM) through receiver interest
rate swaps
Will be 100% fixed at margin of 1.7% over
0.8% from Oct 23200
Total750

RAB movements for 2022 ID year
Table that shows starting RAB (split Core vs FLA?) and a waterfall for movements in period (e.g.
final RAB, depreciation, new assets (net of contrib?), CPI = end of 2022 RAB
ComponentCore RAB
$m (nominal)
Financial Loss
Asset (FLA)
$m (nominal)
Notes
Opening RAB (1 January 2022)4,0321,416
October 2022 final RAB decision total of $5,413m (core $3,997m and FLA
$1,416m) updated for 2022 allocation factors.
lessDepreciation(277)(234)
FLA depreciation is diminishing value and the core RAB is straight-line.
Assets start depreciating the regulatory year after commissioning.
plusRevaluations287102
7.22% actual inflation in the December quarter versus forecast 1.8% used in
the initial 2022 MAR. The ID RAB rolls forward into RP2 and will be reflected
in the RP2 MAR.
plusAssets commissioned356
Amount is net of $52m capital contributions
plusAdjustment resulting from
asset allocation
28
An upwards adjustment reflects a greater proportion of shared assets being
attributable to fibre (due to differences in allocations drivers such as
revenues and connections) than was forecast for the opening RAB in 2023.
Total closing RAB value
(31 Dec 2022)
4,4261,284
NOTE:
1. RAB movements do not affect the RP1 MAR. The ID RAB closing value will be the basis of the opening RAB for RP2.
2. RAB movement calculations are subject to Commerce Commission review and approval.
38
Closing RAB of $5,710m
Appendix D: Additional regulatory information
FY23 RESULTS
21 August 2023

2022 MAR wash-up balance of $46.8m
39
DescriptionRevenue
$m (nominal)
Wash-up
$m (nominal)
Notes
Building blocks revenue
Pass-through costs
Forecast total allowable revenue 2022
676.1
14.2
690.2
2022 MAR was set on the basis of 2021 forecasts.
Less 2022 FFLAS revenue received(667.2)23.0
Chorus under-earnt initial MAR allowance by $23m.
PlusInitial RAB true-up8.5
MAR adjustment to reflect increased allocation of shared
assets in the final RAB decision: expect ~$30m smoothed
across RP1.
PlusPass-through costs 1.5
Actual pass-through cost of $15.7m versus forecast $14.2m.
PlusCrown financing benefit 0.1
Reflects lower Crown financing balance than forecast.
PlusCost allocators13.7
Previously forecast cost inputs (e.g. totex, connections and
data traffic) have been updated for actuals in the period.
Total wash-up balance for 202246.8
The wash-up balance is rolled forward each year using the
post-tax WACC as the time-value of money to preserve NPV
neutrality. The RP1 balance will be added to the RP2 MAR.
Updated total allowable revenue 2022714
NOTE:
1.The regulations omitted a 2022 wash-up for actual CPI. The 2023 and 2024 MAR will be updated for forecast CPI changes as part ofin-period smoothing.
The 2023 MAR used 2.17% forecast CPI and will be updated for 3.37% (June 2022 forecast) with actual CPI applied via the wash-up process for RP2.
2.There was no wash-up required for individual capex proposals in 2022.
3.A wash-up for connection capex differences vs forecast will occur at the end of 2024.
4.All wash-up estimates are subject to Commerce Commission review and approval.
FY23 RESULTS
21 August 2023

21 August 2023
FY23 RESULTS
Maximum Allowable Revenue (MAR)
Source: Commerce Commission, price-quality path final decision, 16 Dec 2021
>MAR totals reflect draft starting RAB and allocations in 2021. Changes in
the final RAB announced in October 2022 will be reflected in the next
regulatory period wash-up.
Pass-through costs14.214.515.5
TOTAL$690.2$747.4$789.5
>RP1 post-tax WACC of 4.72% (used 0.51% risk-free rate) would be
7.38%if recalculated at 1 Jan 2023 using recent rates.
>forecast CPI used for revaluations in 2022 was 1.8% vs 7.22% actual in
December quarter. 2023 forecast used 2.2% and 2024 is 2.13%. Higher
revaluation rates during RP1 will be reflected in the opening RAB for RP2.
>regulator only allows ~2% return on funded assets. Crown financing
deduction subject to WACC.
>cost allocations will need to be addressed in RP2 given the increasing
dominance of fibrein Chorus’ business operations.
>reflects an implied 14-year asset life through regulatory process.
>reflects asset life of 14.2 years and tilted annuity depreciation (-13% tilt
rate)
>tax building block commences from ~FY27 and grows to ~$100m
>CPI forecast assumptions were 2.71% in 2022, 2.17% in 2023, 2.04% in
2024. The 2023 and 2024 MAR will be updated for preceding June
forecasts and then for actual CPI as part of the RP2 wash-up process.
Chorus has made a submission to the Commission on the status of the
2022 CPI wash-up.
40

---

Annual Report 2023
01 Chorus Board and management overview
10

Management commentary
20
Financial statements
58
Governance and disclosures
92
Glossary

Mark Cross
Chair
Kate Jorgensen
Chair Audit & Risk Management Committee
FY23 results overview
1 Earnings before interest, income tax, depreciation and amortisation (EBITDA) is a non-GAAP profit measure. We monitor this as a key
performance indicator and we believe it assists investors in assessing the core operations of our business.
About this report
Our 2023 Annual Report covers the financial year ended 30 June 2023 and includes aspects of our environment, social
and governance (ESG) performance. For additional ESG reporting, including emissions and climate-related information,
please refer to our separate 2023 Sustainability Report available at www.chorus.co.nz/reports.
This report is dated 21 August 2023 and is signed on behalf of the Board of Chorus Limited by Mark Cross, Board Chair, and
Kate Jorgensen, Chair of the Audit & Risk Management Committee.
Share price
FY23FY22
$ 7. 2 2
$8.425
Operating revenue
FY23
$980m
FY22
$965m
EBITDA
1
FY23FY22
$675m
$672m
Dividend
FY23FY22
35cps
42.5cps
Net profit after tax
FY23FY22
$64m
$25m

Annual Report 20231
Dear investors
On behalf of your Board, I’m pleased to report
that Chorus has delivered another strong
financial result in a year of operating challenges
and change.
Over a period of economic volatility, inflationary pressures
and uncertainty, Chorus continued to prove its resilience
as an essential utility provider. As the recent pandemic
and extreme weather events have shown, Kiwi homes
and businesses are more reliant than ever on our fast and
reliable broadband connections to live, learn, work and play.
We’ve announced a final unimputed dividend for the year
of 25.5 cents per share, bringing total dividends for FY23
to 42.5 cents per share. The dividend reinvestment plan
remains paused.
This is my first annual report as Chair after six years on
the Board as a director. I’m excited to be part of Chorus’
transition from a successful era of building one of the world’s
most advanced fixed broadband networks to now operating
as a digital infrastructure company that can power
New Zealand’s digital future.
Strategy and Core Beliefs
I think it’s important for shareholders to understand what
our beliefs as a board are for your company. These beliefs
underpin Chorus’ three strategic pillars: to win in core fibre, to
optimise the non-fibre asset base and to grow new revenues.
• Empowering our people: One of the best investments we
can make is in having the right people, empowered and
appropriately incentivised. Our aspiration is for Chorus to be
a diverse and inclusive employer of choice.
•
Fibre is future-proofed: We believe fibre is the most effective
technology choice for the vast majority of New Zealanders
because it provides a dedicated connection that delivers
fast and extremely reliable connectivity. While alternative
technologies have a place in the market, fibre has a clear and
easily scalable upgrade path to meet the expected growth in
consumer needs far into the future.
•
Connections, connections, connections: Chorus’ long-
term value is inextricably linked to fibre connections. Now
that we’ve built a world-class network, in partnership with
government, the greatest benefit to the country is to harness
its potential. We’ve begun retiring the copper network in
our urban fibre areas and this will drive fibre uptake even
higher. Consumers value fibre above other technologies as a
high-quality dependable service and we’re willing to invest in
connecting more addresses and devices (e.g. traffic cameras)
where the acquisition cost is justified by the long-term value
of that connection.
•

M
anaged exit from copper: Our copper network is nearing
the end of its technological life and alternative technologies
will be needed beyond the reach of fibre. Our focus is on
managing our copper costs down while deploying fibre
to the maximum extent and ensuring regulation supports
consumers to get the best possible services.
•
Be an active wholesaler:
As an open access wholesaler
we treat all our retailer customers equally. Yet, our largest
customers are also our network competitors and have
direct consumer relationships where we don’t. This means
we need to be an active wholesaler, promoting our network
services and ensuring that the regulatory regime supports
a level playing field between network providers and keeps
consumers fully informed.

• Promote digital equity: We’re the provider of an essential
utility service that enables New Zealanders to access
an increasingly digitised world. This means Chorus
can and should play its part in improving digital equity.
Because we’re a wholesale only provider, this requires a
collaborative effort with government agencies and retail
service providers.
•

P
rioritise long-term value: Capital allocation is one
of our most important responsibilities. We’re making
investment decisions for long-term value, not short-term
profit. We’ll prioritise the efficient allocation of capital
that grows shareholder value and supports a growing
sustainable dividend through time. Our assessment of the
necessary level of returns, the impact on consumer pricing,
competitive market conditions, and the parameters of our
dividend policy and debt limits, will guide our approach to
discretionary investment.
•

A
considered approach to new opportunities: We believe
generating non-regulated income streams is important,
but they must pay their way. We would need to have, or
build, the capability to run these businesses well. We’ll
tread carefully and generally steer away from businesses
that our shareholders can invest in directly, unless there
is a compelling adjacency to, and synergies with, our
core business.
•
An appropriate capital structure: We’re committed to
maintaining a capital structure reflective of a utility
business. At the heart of this is the maintenance of an
investment-grade credit rating (BBB or equivalent) and
financial policies that support this. We’ve begun turning
our minds to the first tranche of Crown funding that will be
due in mid-2025.
Reshaping Chorus for its next phase
We’ve spoken in the past about the transition from a fibre
rollout organisation to one that is focused more on operating
that network. With the UFB rollout finished and the new
regulatory regime for fibre established, Chorus is entering
this new phase of its evolution.
In May, we announced the beginning of changes to our
operating model to better execute our strategy, reflect the
new regulatory framework and respond to a changing market
environment. That environment includes the progressive
withdrawal of our copper network, the emergence of new
technologies and changing consumer needs.

Annual Report 20232
This new operating model includes the introduction of three
end-to-end value streams that are aligned to the core focus
areas of our strategy: win in fibre, grow new revenues and
optimise non-fibre assets. New capabilities, tools and ways
of working are also being introduced so our people can
deliver key initiatives with better focus and prioritisation, and
ultimately provide improved consumer outcomes.
This is a
significant change from our historical operating model that
had been built around delivering a 12-year fibre rollout and
the mass uptake of fibre.
Unfortunately, it has meant the disestablishment of some
executive roles.I would like to acknowledge Andrew Carroll
(GM Customer & Network Operations) and Ed Hyde (Chief
Customer Officer) for the significant contributions they made
to Chorus. Andrew was a member of the leadership team
since Chorus was listed and helped us navigate a number of
significant challenges over many years. Ed was instrumental in
developing our fibre proposition for consumers and ultimately
reaching our target of one million connections in FY23.
Governance
Two directors, Jack Matthews and Kate Jorgensen, are
scheduled to be up for re-election at this year’s annual
shareholders meeting, with no retirements. We’ve had two
director changes during the year, with the retirement of
Patrick Strange as Chair and the subsequent appointment of
Will Irving as a director. Will has been an excellent addition to
the Board, bringing a combination of regulatory, technology
and operational telco experience from his roles at Telstra and
the National Broadband Network in Australia.
I’d like to acknowledge Patrick for his leadership over a long
period at Chorus and for the smooth handover to me. I extend
that appreciation to my fellow Board members for their support
to me in the Chair role and their valuable contributions.
As directors we’re energised by the goals we have set for
the company. I believe the Board has the right blend of
experience and diversity in the broadest sense to drive the
strategy of the company, and to support and challenge
our management.
Becoming an all‑fibre digital infrastructure
company
We've provided dividend guidance of 47.5 cents per share,
unimputed, for FY24. There is approximately $11 million
remaining to be returned to shareholders through the $150
million share buyback programme. To date, more than 17
million shares have been bought back.
In April, we were pleased to see UniSuper receive government
approval to increase its shareholding in Chorus up to 20%,
should it choose to do so. We see this as a positive
e
ndorsement both of Chorus’ strategy and growing
investor recognition of our value as a provider of essential
di
gital infrastructure.

The global boom in fibre rollouts gives us great confidence
that we’ve invested in the right infrastructure for the future.
Recent OECD data shows fibre already accounting for 38%
of all fixed broadband subscriptions at the end of 2022,
surpassing cable on 32% and copper broadband on 24%.
This shift to fibre, and the emergence of alternative wireless
and satellite broadband networks in rural areas, has started
the countdown on the usefulness of copper networks.
Norway and Sweden, for example, are well advanced in the
retirement of copper. We expect this to occur here in the
next decade and we believe fibre should be extended further
to help bridge the digital divide between urban and rural
communities. We’re exploring how we could play a part with
the right investment incentives.
At the same time, we’re enhancing our existing fibre footprint
with upgrades to multi-gigabit Hyperfibre capability. We
know we’re on the right path when Singapore’s latest Digital
Connectivity Blueprint calls for seamless 10Gbps connectivity
to be enabled within the next five years. The trends all point
to exponential data growth in the coming years and the rapid
rise of artificial intelligence services in the past year shows just
how fast and far-reaching changes in our industry can be.

I’d like to thank our chief executive JB Rousselot, our
executive team and the wider Chorus team for their
outstanding efforts over the past year, particularly the way
they dealt with significant operating challenges, including
Cyclone Gabrielle and the ongoing technician shortages.
Finally, I would like to thank you, our shareholders, for
your continued support of Chorus and we look forward to
updating you at our annual meeting in November.
.
Mark Cross
Chair

Annual Report 20233
Operating highlights
FY22FY23
Fixed line connections
2
1,304,0001,271,000
Broadband connections
2
1,189,0001,188,000
Data traffic
7,140 petabytes7,402 petabytes
Employee engagement
score
3
8.5 out of 108.7 out of 10
The completion of the government backed ultra-fast
broadband (UFB) rollout provided the foundation for another
strong financial performance, despite workforce constraints
and extreme weather events bringing new operational
challenges. Fibre connections continued to grow and were
up 72,000 in the year. The migration of consumers to fibre
and alternative networks saw copper connections reduce
by 105,000. Overall, total fixed line connections reduced by
33,000 compared to 36,000 in the prior year.
The increase in fibre connections and ongoing growth in
the uptake of high-speed fibre plans, together with inflation-
linked price changes, underpinned underlying revenue
growth from $959 million to $981 million.
Despite inflationary pressure on various cost lines, underlying
operating expenses were held flat at $299 million.
These operating results produced underlying FY23 EBITDA
of $682 million, a $22 million increase on underlying FY22
EBITDA of $660 million
4
. This was within our updated half
year EBITDA guidance range of $675 million to $690 million
that had excluded allowance for flood and cyclone-related
impacts. Reported EBITDA was $672 million when including
$10 million of one-off costs for the extreme weather events
and operating model changes.
Net profit after tax (NPAT) was $25 million, down from
$64 million in FY22. This reflects the effects of increasing
interest rates, and higher depreciation as we progress the
shutdown of our copper network in fibre areas.
Capital expenditure reduced to $454 million, down from
$492 million in FY22. This was slightly above our guidance of
$410 million to $450 million and reflects a record year of work
completed for new property developments. Our borrowings
at the end of FY23 were 4.39 times net debt to EBITDA and
well within our business tolerance level of 4.75 times.
1.1 Winning in our core fibre business
FY22FY23
Fibre connections
959,0001,031,000
Fibre uptake (UFB areas) 69%73%
Average data usage (June)
567GB585GB
Customer satisfaction –
fault restoration
8.2 out of 107.8 out of 10
(target 8.2)
Customer satisfaction –
intact provisioning
7.3 out of 107.3 out of 10
(target 7.6)
We reached a significant milestone in December when we
connected the last community, Opononi in the Northland
region, to fibre under our 11-year public-private partnership
with the government. By the end of June, fibre uptake had
reached 73% in the completed UFB rollout areas, up from
69% in FY22.
Across our wider fibre network (i.e. including fibre
deployment outside the original UFB rollout footprint), fibre
connections grew to 1,031,000. This surpassed our long-held
target of one million connections by December 2022.
About 250,000, or 24%, of our mass market connections are
on speeds of 1 gigabit per second (Gbps) or Hyperfibre
(2, 4 or 8 Gbps) plans. About 620,000, or 67%, of residential
connections are on our popular 300Mbps plan.
Our entry level 50 megabits per second (Mbps) Home Fibre
Starter plan, intended for price conscious consumers with
basic broadband needs, grew strongly to number 16,000
connections by the end of FY23. We were pleased to see
some large retailers begin offering the plan at $50, compared
to the $60 retail price required to attract the $35 wholesale
line fee.
Workforce challenges
Like many industries, one of the unforeseen challenges
we had to grapple with in FY23 was a shortage of skilled
workers. Visa changes for migrant workers meant many of
the technicians who carried us through the pandemic either
took the opportunity to reconnect with family and friends
overseas, or moved to other local industries. Strong global
competition for fibre technicians was another contributor.
This saw a workforce gap of about 380 technicians emerge
in the first half of FY23. Although our recruitment and
training initiatives had largely bridged this gap by the end of
FY23, the workforce constraints we experienced through the
year meant we weren’t able to meet consumer demand for
installations. This shortage was compounded by the need
to prioritise fault restoration work in the wake of Cyclone
Gabrielle. In the second half of FY23, for example, we had
more than 60 days in which field activity was subject to force
majeure conditions.
1.0
2 Excludes partly subsidised education connections provided as part of Chorus’ COVID-19 response.
3 Based on the average response to four key engagement questions.
4
R
efer to page 13 of the FY23 investor presentation for the detailed reconciliation to EBITDA.

Annual Report 20234
These workforce challenges had a negative effect on our
customer experience measures. Our fibre fault restoration
score dropped from 8.2 last year to 7.8 in June (rolling three-
month average). This reflected the increase in the length of
time taken to resolve faults. Improvements have been made
that should support better outcomes in FY24. For example,
we’ve reconfigured systems and processes through the
industry so consumers can be given a four-hour timeslot for
a technician visit. This is a big step forward from our long-
standing practice of providing the consumer with a date and
no indication of time.
Consumer satisfaction for intact connections, where
consumers are seeking to activate a fibre service in premises
where a fibre socket is already installed, was steady at 7.3
year on year. Workforce constraints and weather events
delayed some planned improvements. Retailer automation
initiatives and improvements to our network records are
expected to support better outcomes in FY24.
Data demand and future-proof fibre
When we began building our fibre network just over a
decade ago, average data usage was 13 gigabytes a month.
Today, the average on our fibre connections is 585GB and
almost 15% of consumers are using 1,000GB a month. In
the United States; AT&T estimates their monthly average will
grow from 900GB to 4,600GB by 2025.
What’s going to make people consume so much data?
Think back to the rapid rise of streaming services we’ve seen
in the last five years. These services now drive 45% of traffic
on our network.
As 4K quality content becomes more common, bandwidth
demand is expected to grow exponentially. If all current
streaming usage was in 4K quality, for example, monthly
usage would double to about 1,200GB a month. For now,
we’re lagging other countries when it comes to the broadcast
of mainstream sports in 4K. Sports events drive substantial
peak time usage and are still largely delivered in Aotearoa via
satellite or terrestrial broadcast. If all TV broadcast content
was delivered online, monthly usage would be in the order
of 2,000GB.
We’ve already had an indication of this kind of effect with
the online gaming phenomenon Fortnite regularly setting
data traffic records on our network. Imagine how this could
snowball as video and latency requirements grow in tandem.
We’re starting to see examples of augmented reality (AR) and
virtual reality (VR) services being adopted by consumers. The
recent pandemic spurred gym providers to develop VR body
combat training options that you can do in your living room,
while music fans can now join some of their favourite bands
on-stage.
Apple has now joined Meta in developing the glasses
technology that is critical to the user experience. The
‘metaverse’ promises virtual 3D worlds where high-quality
video will be mixed with AR and VR. Fortnite provides an
insight into how this could evolve, with friends meeting
online in Fortnite ‘world’ to play games together and attend
one-off events like concerts.
For Chorus’ part, these emerging digital applications and
services are going to need varying combinations of high
bandwidth or speed, low latency and rock-solid reliability and
consistency. With 99.999% reliability and latency below five
milliseconds, fibre is considered the leading technology to
enable this ultra-digital future.
We’re already investing in this future by upgrading to 8Gbps
capability. For fibre, this can be achieved by changing the
electronics on either end of the fibre cable to a home or
business. We’ve also trialled the simultaneous delivery of
25Gbps services on the same cable. Beyond 2030, the World
Broadband Association is suggesting networks will need to
plan for residential speeds of up to 50Gbps and enterprise
speeds of up to 3.2Tbps.
1,000
1,500
2.000
0
500
2,500
Gigabytes
Data usage (GB) per month
Monthly fibre data
usage today
All TV streamed
in 4K
All streaming
in 4K
4K streaming would use about 8GB per hour, versus 2GB per hour for Full High Definition
or 1GB per hour for High Definition content.
Fig ure 1:
4K effect on data demand

Annual Report 20235
0
100
200
300
400
500
700
600
DownstreamUpstream (shown from June 2020 onwards)
Average monthly usage (gigabytes)


Jun-23Dec-22Jun-22Dec-21Jun-21Dec-20Jun-20Dec-19Jun-19Dec-18Jun-18
Figure 2:
Monthly average data usage for fibre grew from 567GB to 585GB across FY23 and is almost back at peak levels seen during
the COVID pandemic lockdowns.
Fibre proves its resilience
Flooding events and cyclones caused substantial damage
to North Island infrastructure and homes in early 2023.
At its peak, about 55,000 Chorus fixed line connections
were affected by the widespread loss of electricity and
network damage in the immediate aftermath of Cyclone
Gabrielle. This was the largest weather event to affect our
network. Five regional fibre routes were damaged by bridge
washouts, or road slips, and we used helicopters to lay
about five kilometres of temporary fibre cable so we could
restore services.
Although the EBITDA impact of these events was
$7 million, the events proved the benefits of the substantial
investment we’ve made in fibre. Cyclone Gabrielle’s effects
saw copper network customers up to 10 times more likely
to lose service than those on fibre and fibre services were
able to be restored twice as fast as those on copper. This is
because the copper network relies on powered equipment
in suburban streets to transmit signals, whereas fibre is a
passive network with data transmitted via light. The copper
network is therefore much more susceptible to water and
lightning damage.
There are lessons to be learnt from Cyclone Gabrielle and
we’ve contributed to a telecommunications industry plan,
led by the New Zealand Telecommunications Forum, to
identify opportunities for enhanced network resilience and
collaboration with government.
We have an ongoing programme of network resilience
projects, including regional backhaul deployments
supported by government.
Our asset management plans are also being shaped by
the detailed assessment of flooding and sea level rise risks
we’ve undertaken as part of our physical climate change
risk analysis. For more information see the Appendix in
our Sustainability Report. Consistent with this assessment,
no significant exchange buildings were affected by the
extreme weather events.
Earthquakes remain the primary focus for our resiliency
planning and we have an ongoing programme to strengthen
critical network sites. Seismologists are taking advantage of
our new West Coast fibre route to analyse the South Island’s
Alpine Fault by using the network itself as a sensor. This study
will provide valuable information to local communities and
organisations so they can be better prepared.
Damage to the regional fibre route on the bridge crossing the Hikuwai
River, north of Gisborne, required 800 metres of fibre to be overlaid.

Annual Report 20236
1.2 Growing new revenues
FY23
Smart locations: +19%
Data centre connectivity: 7 sites
Direct fibre connections: +3%
We made good progress in our push to grow new revenues.
Our PowerSense service, launched in FY22, proved its
value through the extreme weather events in early 2023.
The service collects ‘last gasp’ signals from fibre terminals
to identify when a premises loses electricity. This gave
electricity lines companies real-time visibility of the weather’s
impact on their networks and helped support their own
restoration efforts.
Direct, or dark, fibre connections continue to increase
and now number more than 6,000 connections. Backhaul
connections grew after we revised our Relay Connect
offering for urban centres and our Data Centre Connect
product now covers seven sites. Work is underway to double
the number of Edge Centre racks available in our Auckland
exchange and we’ve already received pre-orders for almost
a third of this additional capacity.
Smart locations are another opportunity to increase
utilisation of our network. We already have several thousand
connections to non-building locations, such as traffic
cameras, digital billboards and electric charging stations.
This category grew by 19% in the year and demand for
Internet of Things (IoT) connectivity is expected to flourish
as smart city and utility requirements expand.
1.3 Optimising our non‑fibre assets
FY22FY23
345,000 copper
connections remaining
240,000 copper
connections remaining
10,100 withdrawal notices30,000 withdrawal notices
(cumulative)
130 broadband cabinets
closed
544 broadband cabinets
closed (cumulative)
14 properties and surplus
leases exited
8 properties and surplus
leases exited
With the UFB rollout completed, we’ve stepped up our
efforts to optimise our copper network in areas where fibre is
available to consumers.
In March 2023, we announced we were stopping the sale of
new copper broadband services in both Chorus and local
fibre company areas. This was extended to copper baseband
voice services from June 2023. Some exceptions remain for
services transferred between broadband retailers, or where a
fibre connection isn’t immediately available.
In Chorus’ fibre areas we provided about 20,000 more
consumers with at least six months’ notice, as required by
the Copper Withdrawal Code, that we were ending copper
services to their address. This enabled us to close another
414 broadband cabinets during the year.
By the end of FY23 we had about 240,000 connections
remaining on our copper network. This was down from
345,000 at the end of FY22. Of these connections,
approximately 115,000 are in areas where fibre isn’t
available. About half of those premises have a historical
Telecommunications Service Obligation (TSO) that requires
us, along with Spark, to maintain telephone services. The
TSO Deed recognises that additional funding may be sought
from government for commercially non-viable customers.
The reality is that copper broadband is increasingly unsuited
to consumers’ growing bandwidth needs. Consumers are
already voting with their feet and paying higher fees to
satellite or government-subsidised fixed wireless providers
for improved services. Mobile network operators are also
partnering with low-earth-orbit satellite providers with a view
to delivering mobile services well beyond current cellsite
coverage. Clearly, the TSO for copper is fast approaching its
use by date.

Annual Report 20237
1.4 Developing our long‑term future
FY22FY23
Electricity
(gigawatt hours)
817 7.4
Emissions (Scope 1 & 2)13,95710,661
Waste in tonnes
(% recycled)
287 (63%)368 (90%)
Gender diversity
(all Chorus)
41%F / 59%M42%F / 58%M
We aim to ‘connect Aotearoa so that we can all live, learn,
work and play’. This means Chorus will invest and innovate to
deliver the best possible connectivity services to help enable
the environmental, economic, and social transformation
ahead. Our focus on Sustainability is guided by our
purpose, by Kaitiakitanga (environmental guardianship) and
Manaakitanga (acts of giving and caring for).
We believe fibre can make a great contribution to reducing
emissions because it can transport large volumes of
data while requiring lower electricity usage than other
technologies such as our copper network. In FY23, we
joined the Climate Leaders Coalition and finalised our
science-based target of a 62% reduction in our Scope 1 and 2
emissions by 2030, from 2020 levels.
A high proportion of renewable electricity generation in
the national grid, together with growing momentum in the
shutdown of our copper network electronics, helped reduce
our emissions by 24% compared to FY22. Electricity usage
was down 5%, even with our network carrying 4% more data
traffic than the year before.
The conclusion of the UFB rollout and reduced fibre
installation activity meant the number of hours worked by
service companies reduced. This in turn contributed to a
reduction in recordable injuries, despite having to manage
Health and Safety risks in the aftermath of extreme weather
events. The total number of recordable injuries for Chorus
and service company people was just eight, down from 17 in
FY22, and these were minor strains, sprains and lacerations.
Every person and every whanau (family) should be able to
unlock the full potential of being a digital citizen. The reality
today is that a significant digital divide still exists. We know
that we can’t solve this social issue alone and we continue
to support government agency initiatives focused on digital
equity. We gave close to half a million dollars to organisations
and charities working within their communities to help close
the digital divide.
Our people remain highly engaged. Overall engagement
rose to 8.7 out of ten, up from 8.5 in FY22. This puts us
within the top 10% of the international technology company
sector we benchmark ourselves against. Our Net Promoter
Score increased from 64 to 70, keeping us in the top 5% of
the technology sector. About a third of our people took up
the opportunity to participate in education programmes to
increase awareness of Te Ao and Te Reo Maori during the year.
The Board sets measurable objectives to promote diversity
and inclusion. Women represented 42% of employees in April
2023, up from 41% the year before. The biggest change was
in the people leaders’ population, with women increasing 3%
to represent 39%. This is close to our objective of a 40:40:20
split of people leaders by 2023
5
.
For more detail on our environmental, social
and governance (ESG) performance during FY23
please see our standalone Sustainability Report at
https://company.chorus.co.nz/sustainability
Shifting to a nimbler Chorus
As consumers’ needs evolve, Chorus needs to change
too. Our previous operating model was focused on cost
effectively delivering large, long term, stable programmes
and won’t be as effective in the future as it has been to date.
With the fibre rollout completed and the regulatory
framework now in place, we’re adopting a new operating
structure that will help us streamline the way we respond
to our retailer customers and deliver better consumer
outcomes. This involves changing our vertically integrated
network and product business units to drive greater cross-
functional collaboration.
We’ve created three new teams focused on key ‘value streams’:
•

A
ccess - responsible for our high-volume products and
tasked with maximising fibre uptake
•
Infrastructure – charged with leveraging our network and
assets to grow new revenues
•
Fi
bre Frontier – directing the extension of our fibre coverage
and eventual retirement of our regional copper network
In addition, accountability for strategy, enterprise
performance, customer experience and marketing has been
combined with Finance under an expanded Chief Operating
Officer role. This is led by Mark Aue. He joined us in April and
was previously chief executive of retail service provider and
mobile network operator 2degrees. Other senior executives
will continue to lead our Technology, Network Operations,
People and Culture, Legal, Regulatory and Stakeholder
Engagement functions.
5 40% men, 40% women, 20% of any/either gender.

Annual Report 20238
Market dynamics
We’re focused on continuing to grow uptake of our network
so its socio-economic benefits can help power Aotearoa’s
digital future. Our copper withdrawal programme will keep
driving fibre uptake in our urban areas and we’re continuing
to be an active wholesaler. Our latest New Zealand runs on
fibre advertising campaign showcases some of the ways fibre
is now used by about three million Kiwis. Market data shows
that consumers value fibre’s reliability and speeds.
We’re cognisant that there are shadows over the wider
economy. We see inflationary pressures across our business
through direct labour costs and our service companies.
There are signs too that our housing development pipeline
is slowing from its recent peak. We know consumers face
economic pressures and, although we’re increasing prices on
some fibre plans by inflation from 1 October, we’ll again hold
the wholesale price of our entry level 50Mbps Home Fibre
Starter plan at its current level.
While Commerce Commission reporting shows no other
technology beats fibre for reliability and capability, we
know that the evolution of 5G fixed wireless will bring
more competition from mobile network operators. The
Commission’s oversight of marketing practices will be
integral to ensuring that vertically integrated providers don’t
use their direct consumer relationships to unfairly undermine
the open access fibre regime the government created in
2011.
The gap between network capability and in-home Wi-Fi
performance is another area that requires ongoing focus
from the industry and government. The age and quality of
home Wi-Fi devices is a potential handbrake on consumers
enjoying the full benefits of the investment made in fibre.
While some retailers are providing Wi-Fi 6 capable mesh
devices, the next generation of Wi-Fi 6E devices could enable
peak speeds of 2Gbps by using 6GHz spectrum to provide
greater bandwidth.
Leading tech countries have already taken the step to
release the entire 6GHz band for this purpose, because they
recognise Wi-Fi is critical to the consumer experience and
ongoing technology innovation. However, to date, the New
Zealand government has opted to release only the lower
6GHz band for Wi-Fi and other unlicensed use.
Regulatory framework
We’re now halfway through our first three-year regulatory
period under a utility-style framework for fibre. In May, we
lodged our Information Disclosure reporting for the 2022
calendar year showing the regulated asset base had grown
from $5.4 billion to $5.7 billion and that we under-earned our
allowable revenue by about $47 million.
In October 2023, we’ll submit our proposal for the expenditure
and investment we anticipate for the next four-year regulatory
period from 2025 to 2029. This is a significant undertaking as
we seek to forecast consumer demands and expectations.
As we know from the effect of Netflix and Fortnite on peak-
time bandwidth, it only takes one new application to change
consumer behaviour almost overnight.
That’s why we’ve been surveying consumers as part of our
proposal development and to help evaluate longer-term
opportunities for investment.
Long-term planning about the management of our assets
is also a key consideration. We’re enhancing our asset
management capability and practices to provide a strong
focus on network operation and lifecycle management. At
the same time, the extreme weather events in early 2023 have
given our network planning team some valuable insights into
how we could develop our approach to network resilience.
An opportunity to take fibre further
In December, the Government released its Lifting
Connectivity in Aotearoa New Zealand paper, setting out
their intent to improve digital connectivity over the next
decade. The paper highlights the need to provide enduring
solutions that can meet future growth in demand for
increased speed and capacity.
A report we commissioned from the New Zealand Institute of
Economic Research calculated a $16.5 billion benefit for rural
homes and businesses over the next decade if they had high-
capacity broadband. That equates to a $6,500 annual benefit
to households better able to access broader employment
opportunities and the ability to use online services for
telemedicine, banking and government agencies.
Europe’s ambition is gigabit coverage for all households
by 2030, with some countries targeting 99% population
coverage with fibre. That’s probably too high for New
Zealand given our challenging topography and generally
lower population density, but we believe we could reach at
least 90% of Kiwis with fibre under the right regulatory and
policy settings. That would require an investment in the order
of $500 million to reach 75,000 premises.
We believe it’s time for a broader discussion about the right
mix of private and public investment that can achieve the
government’s goals and close the digital divide for more Kiwis.
JB Rousselot
Chief Executive
Outlook

Annual Report 20239
Our strategic focus
Sustainability is integrated into our business strategy, with three pillars representing
our commitment to improving environmental, social, and governance performance:
Thriving Environment; Sustainable Digital Futures; and Thriving People.
While the three pillars of our Sustainability strategy are enduring, the activities within them will evolve over time
to ensure we continue to be responsive to changing operating environment and the needs of our stakeholders.
Our Sustainability strategy sits alongside our Diversity, Equity and Inclusion Strategy which informs how we develop
strong connections with Māori and builds our understanding of Te Ao Māori.

Annual Report 202310

Annual Report 202311
Management
commentary
12 In summary
13 Revenue commentary
14 Expenditure commentary
17 Capital expenditure commentary
19 Long term capital management

Annual Report 202312
2023
$M
2022
$M
Operating revenue980965
Operating expenses(308)(290)
Earnings before interest, income tax, depreciation and amortisation672675
Depreciation and amortisation(446)(427)
Earnings before interest and income tax226248
Net finance expense(195)(142)
Net earnings before income tax31106
Income tax expense(6)(42)
Net earnings for the year2564
In summary
1 Partly subsidised education connections are excluded from this data.
We report earnings before interest, income tax, depreciation,
and amortisation (EBITDA) of $672 million for the year
ended 30 June 2023 (FY23), a decrease of $3 million from
FY22 EBITDA of $675 million. When $10 million of costs for
extreme weather events and operating model change are
excluded, underlying EBITDA for FY23 was $682 million.
This was a $22 million increase on underlying FY22 EBITDA
of $660 million.
Revenues increased by $15m to $980 million. This was driven
by an inflation-related price increase to some services in
October 2022 and growing uptake of higher value Hyperfibre
and 1Gbps services. Consumers were provided with $1 million
of credits for disrupted service due to Cyclone Gabrielle.
Operating expenses of $308 million were $18 million greater
than FY22. FY22 included the benefit of a $9 million release
of a holiday pay provision. FY23 costs for extreme weather
events were $6 million and operating model change costs
were $3 million.
Net profit after tax was $25 million compared to $64 million in
FY22. This decrease reflected interest rate rises and increased
depreciation expense due to the accelerated depreciation of
copper cables in areas where fibre is available.
Capex spend was $454 million for FY23. This was a $38 million
decrease from FY22, largely due to the end of the UFB rollout.
We will pay a final unimputed dividend of 25.5 cents per
share on 10 October 2023 resulting in a full-year dividend of
42.5 cents per share.
Connections
2023
Connections
2022
Connections
2021
Fibre broadband (GPON)1,021,000949,000860,000
Fibre premium (P2P)10,00010,00011,000
Copper VDSL83,000118,000157,000
Copper ADSL84,000122,000163,000
Data services over copper1,0002,0002,000
Unbundled copper-1,00010,000
Baseband copper72,000102,000137,000
Total fixed line connections
1
1,271,0001,304,0001,340,000

Management commentary

Annual Report 202313
Revenue commentary
2023
$M
2022
$M
Fibre broadband (GPON)622548
Copper based broadband117153
Fibre premium (P2P)6866
Copper based voice3952
Field services products7071
Value added network services2627
Infrastructure3130
Data services over copper46
Other312
Total revenue980965
Revenue overview
Chorus’ product portfolio encompasses a range of wholesale
broadband, data and voice services across a mix of regulated
and commercial products. Revenues of $980 million
increased by $15 million from $965 million in FY22.
This increase reflects a growing base of fibre connections
and inflation-related price increases.
In our fibre areas broadband connections grew by 22,000,
with total broadband connections nationally remaining
steady at 1,188,000. We ended the year with 1,271,000
fixed line connections, down 33,000 lines compared with a
reduction of 36,000 lines in FY22. Most of this reduction is in
areas where Chorus does not have fibre available.
Fibre broadband (GPON)
Fibre broadband revenues continue to grow as customers
migrate to our fibre network. Fibre broadband connections
grew by 72,000 to 1,021,000, with 91% of residential and
business connections on plans of 300Mbps and above.
Average fibre monthly revenue per user grew from $50.67 to
$53.25 in FY23. This was driven by an inflation related price
increase to some services in October 2022 and uptake of the
higher value 1Gbps service, which is now 24% of our fibre
connection base.
Field services products
Field services revenue remained stable in FY23, decreasing
by $1 million relative to $71 million in FY22. New property
revenues grew from $28 million in FY22 to $33 million in
FY23. This was offset by a reduction in roadworks, installation
and chargeable maintenance activity.
Fibre premium (P2P)
Fibre premium (point to point) revenues increased slightly in
FY23 as demand grew for Direct Fibre Access Service, mobile
access and other backhaul connections.
Value added network services
Value added network services revenue was slightly lower in
FY23 due to reduced demand for legacy backhaul products.
Infrastructure
Demand for new equipment space in exchanges contributed
to a $1 million increase in revenues. This offset the decline in
demand for legacy copper-related space.
Data services over copper
Data services over copper connections continue to decline
as consumers migrate from legacy services to cheaper fibre
based or alternative services.
Other
Other income was lower in FY23 because FY22 included
$9 million of favourable one-off transactions.

Annual Report 202314
Expenditure commentary
Operating expenses
2023
$M
2022
$M
Labour 7664
Network maintenance 6059
Information technology 4250
Other network costs 3729
Rent, rates and property maintenance 2628
Electricity 1917
Advertising 1311
Provisioning11
Insurance54
Consultants98
Regulatory levies99
Other1110
Total operating expenses308290
Total operating expenses of $308 million in FY23 increased by
$18 million compared to $290 million in FY22. This difference
largely reflects a $6m impact from extreme weather events in
FY23, $3 million of operating model change costs and a $9m
holiday pay provision recognised in FY22.
Labour
Labour costs increased by $12 million in FY23 from $64 million
in FY22. FY22 included a one-off benefit of $9 million after a
judicial ruling on the interpretation on the Holidays Act.
At 30 June 2023, we had 846 permanent and fixed term
employees representing a 6% increase from 799 employees
at 30 June 2022. The increase largely reflects additional
resourcing to support the implementation of the new
fibre regulatory framework and IT contractors becoming
full
-time employees.
We capitalise labour costs and the associated overheads in
relation to build and connection activity.
Network maintenance
Network maintenance costs increased by $1 million from
FY22. FY23 includes $3 million of expenditure in relation to
extreme weather events. Overall fault volumes continued to
trend down as customers migrate to the fibre network, while
average fault costs increased with changes in mix to more
expensive faults and inflationary cost increases.
Information technology
Information technology costs were $42 million, down
$8 million compared to FY22. This largely reflects the release
of a software provision initially recognised in FY22 and
savings from migration off legacy systems.
Other network costs
Other network costs were $8 million higher than FY22.
This was due to costs for extreme weather events and
network and property optimisation costs as we exit copper
assets. Other network costs include costs associated with
service partner contracts, fibre access from third parties,
roadworks and other network relocation projects, fibre order
cancellations, network spares, and network and property
optimisation costs.
Electricity
Electricity costs were up $2 million in FY23 from $17 million
in FY22.
Rent, rates and property maintenance
Extreme weather event costs of $1m were incurred for
property maintenance.
Advertising
Advertising costs were $13 million in FY23, up from $11 million
in FY22 when COVID-19 reduced in-market activity.

Annual Report 202315
Depreciation and amortisation expense
2023
$M
2022
$M
Estimated useful
life (years)
Weighted average
useful life (years)
Depreciation
Fibre cables
12812220–3020
Ducts, poles and manholes646120–5049
Copper cables766110–2522
Cabinets18225–2019
Network electronics67622–2510
Right of use assets13154–5028
Other14154–2515
Buildings445050
Less: Crown funding(29)(27)
Total depreciation355335
Amortisation expense
Software
61622-104
Customer retention30301-44
Total amortisation expense9192
Total depreciation and amortisation expense446427
During FY23, $454 million of expenditure on network assets
and software was capitalised. The ‘UFB communal’ and
‘Fibre connections and fibre layer 2’ included in ‘fibre’ capital
expenditure was largely capitalised against the network
assets categories of fibre cables (30%) and ducts, poles
and manholes (26%). The average depreciation rate for UFB
communal infrastructure spend is based on an estimated life
of 41 years, reflecting the very high proportion of long-life
assets constructed.
With the commencement of Chorus’ copper withdrawal
programme, Chorus has revised the depreciation profile for
copper assets in areas where fibre is available. Depreciation
of copper cables is accelerated so those in Chorus UFB areas
will be fully depreciated by June 2025, and those in local
fibre company areas by June 2026. Depreciation of copper
related ducts in local fibre company areas is accelerated from
FY24 so they will be fully depreciated by June 2026.
Software and other intangibles largely consist of the software
components of billing, provisioning and operational systems,
including spend on Spark owned systems.
Chorus expects that incremental costs incurred in
acquiring new contracts with new and existing customers
are recoverable. These costs are capitalised as customer
retention assets and amortised against revenue or within
amortisation expense, depending on their nature. In the
period to 30 June 2023, $30 million was recognised to
amortisation expense.
The offset of Crown funding against depreciation
will continue to amortise as a credit to the associated
depreciation expense.
The weighted average useful life represents the useful life in
each category weighted by the net book value of the assets.

Annual Report 202316
Finance income and expense
(Income)/expense
2023
$M
2022
$M
Finance income(4)–
Finance expense
Interest on syndicated bank facility
2 6
Interest on Euro Medium Term Notes (EMTN)93 51
Interest on fixed rate NZD bonds32 32
Other interest expense35 23
Capitalised interest(1)(2)
Interest costs161 110
Ineffective portion of changes in fair value of cash flow hedges(7)(7)
Total finance expenses excluding securities (notional) interest154103
CIP securities (notional) interest4539
Total finance expense199142
Finance expense increased by $57 million from FY22 due to
increasing interest rates and refinancing activities during FY23.
Interest costs increased by $51 million year on year with the
weighted effective interest rate on debt increasing to 5.40%
from 3.77% in FY22.
EUR 291 million of the 2023 EMTN was repurchased in
September 2022 and a EUR 500 million EMTN, maturing in
2029, was issued. Chorus fully hedges the foreign exchange
exposure on all EMTN with cross-currency interest rate swaps.
Approximately two-thirds of floating interest rate exposure is
hedged using interest rate swaps.
Other interest expense includes lease interest of $11 million
(FY22: $15 million) and amortisation arising from the
difference between fair value and proceeds realised from
interest rate swap resets of $7 million (FY22: $7 million).
Taxation
The FY23 effective tax rate is 19% (FY22: 39%). The decrease
reflects a deferred tax re-assessment in relation to Chorus’
buildings, following the implementation of a revaluation policy.
Excluding the deferred tax re-assessment, the normalised
effective tax rate for FY23 was 51%, higher than the statutory
tax rate of 28% due to permanent differences between tax and
accounting arising from the tax treatment of the CIP securities,
Crown funding for the Rural Broadband Initiative (RBI) and the
West Coast and Southland Network (WCSN).
The interest expense and depreciation credit recognised
in the profit and loss in relation to CIP securities are non-
taxable as confirmed via binding rulings issued by the IRD.
RBI and WCSN assets are funded by non-taxable government
grants and the amortisation of the government grants along
with the accounting depreciation recognised in the profit and
loss are non-taxable and no tax depreciation is claimed on
the assets.

Annual Report 202317
Capital expenditure commentary
2023
$M
2022
$M
Fibre355403
Copper3338
Common6651
Gross capital expenditure454492
2 Layer 2 equipment, such as gigabit capable passive optical network ports, is installed ahead of demand as the UFB footprint expands.
3
E
xcluding layer 2 and backbone costs for multi dwelling units and rights of way and including standard installations and some non-standard
single dwellings and service desk costs.
Gross capital expenditure for FY23 was $454 million, down
$38 million from FY22. Fibre spend decreased $48 million
largely due to the completion of the UFB rollout. Copper
related expenditure reduced by $5 million from FY22 as
copper connections continue to reduce. Crown funding of
$39 million was recognised for the UFB rollout and $2 million
for the WCSN build.
Fibre capital expenditure
2023
$M
2022
$M
UFB communal577
Fibre installations and fibre layer 2
2
193195
Fibre products and systems1012
Other fibre and growth10579
Network sustain1213
Customer retention costs3027
Total fibre capital expenditure355403
UFB communal network spend was $5 million in FY23, down
from $77 million in FY22.
Fibre installations and layer 2 expenditure was $193 million.
About 92,000 fibre installations were completed nationwide.
The average cost per premises installation in UFB areas
was $1,067
3
, which was within the FY23 guidance range of
$1,000 to $1,115.
$32 million was invested in ‘backbone’ network to enable the
connection of multiple customers located along rights of
way and multi dwelling units.
Other fibre and growth increased $26 million compared
to FY22, mainly due to strong new property development
demand and upgrades to core and metro transport electronics.
Customer retention costs increased by $3 million due to
more market activity in FY23 than the prior year.

Annual Report 202318
Copper capital expenditure
2023
$M
2022
$M
Network sustain2727
Copper connections11
Copper layer 213
Customer retention costs47
Total copper capital expenditure3338
Copper capital expenditure decreased by $5 million in FY23, largely due to lower customer retention costs.
Common capital expenditure
2023
$M
2022
$M
Information technology4432
Building and engineering services2219
Total common capital expenditure6651
Information technology spend increased by $12 million in FY23 due to lifecycle upgrade of equipment and investment
enabling reduced reliance on third party legacy systems.

Annual Report 202319
Long term capital management
We will pay a final unimputed dividend of 25.5 cents per
share on 10 October 2023 to all shareholders registered at
5.00pm 12 September 2023. The shares will be quoted on an
ex-dividend basis from 11 September 2023. As the dividend is
unimputed, there will be no supplementary dividend payable
to shareholders outside of New Zealand.
The dividend reinvestment plan will not be available for the
final dividend.
Dividend guidance for FY24 has been set at 47.5 cents per
share, subject to no material adverse changes in circumstance
or outlook. The FY24 dividend will be unimputed.
The Board considers that a ‘BBB’ or equivalent credit rating
is appropriate for a company such as Chorus. It intends
to maintain capital management and financial policies
consistent with these credit ratings. It is Chorus’ intention
that in normal circumstances the ratio of net debt to EBITDA
will not materially exceed 4.75 times.
At 30 June 2023, we had a long-term credit rating of BBB/
stable outlook by Standard & Poor’s and Baa2/stable by
Moody’s Investors Service.

Annual Report 202320

Annual Report 202321
Consolidated financial
statements
22 Independent auditor’s report
25 Consolidated income statement
25 Consolidated statement of
comprehensive income
26 Consolidated statement
of financial position
27
Consolidated statement
of changes in equity
28 Consolidated statement of cash flows
30 Notes to the consolidated
financial statements

Annual Report 202322
Independent auditor’s report
To the shareholders of Chorus Limited
Report on the consolidated financial statements
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (New Zealand) (‘ISAs (NZ)’). We believe
that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
We are independent of the Group in accordance with
Professional and Ethical Standard 1 International Code of
Ethics for Assurance Practitioners (Including International
Independence Standards) (New Zealand) issued by the
New Zealand Auditing and Assurance Standards Board and
the International Ethics Standards Board for Accountants’
International Code of Ethics for Professional Accountants
(including International Independence Standards) (‘IESBA Code’),
and we have fulfilled our other ethical responsibilities in
accordance with these requirements and the IESBA Code.
Our responsibilities under ISAs (NZ) are further described in
the Auditor’s responsibilities for the audit of the consolidated
financial statements section of our report.
Our firm has also provided other services to the group in
relation to regulatory assurance. Subject to certain restrictions,
partners and employees of our firm may also deal with the
group on normal terms within the ordinary course of trading
activities of the business of the group. These matters have not
impaired our independence as auditor of the group. The firm
has no other relationship with, or interest in, the group.
Materiality
The scope of our audit was influenced by our application of
materiality. Materiality helped us to determine the nature,
timing and extent of our audit procedures and to evaluate
the effect of misstatements, both individually and on the
consolidated financial statements as a whole. The materiality
for the consolidated financial statements as a whole was set
at $8.5 million determined with reference to a benchmark of
Group revenue. We chose the benchmark because, in our
view, this is a key measure of the Group’s performance.
Key audit matters
Key audit matters are those matters that, in our professional
judgement, were of most significance in our audit of the
consolidated financial statements in the current period.
We summarise below those matters and our key audit
procedures to address those matters in order that the
shareholders as a body may better understand the process
by which we arrived at our audit opinion. Our procedures
were undertaken in the context of and solely for the purpose
of our statutory audit opinion on the consolidated financial
statements as a whole and we do not express discrete opinions
on separate elements of the consolidated financial statements.
Opinion
In our opinion, the accompanying consolidated financial
statements of Chorus Limited (the ’company’) and its
subsidiaries (the ‘Group’) on pages 25 to 57 present
fairly, in all material respects:
i.
the Group’s financial position as at 30 June 2023 and
its financial performance and cash flows for the year
ended on that date;
ii. in accordance with New Zealand Equivalents to
International Financial Reporting Standards (NZ IFRS)
and International Financial Reporting Standards issued
by the New Zealand Accounting Standards Board.
We have audited the accompanying consolidated financial
statements which comprise:
— the consolidated statement of financial position as at
30 June 2023;
—
t
he consolidated income statement, statements of
other comprehensive income, changes in equity and
cash flows for the year then ended;and
—
notes, including a summary of significant accounting
policies.

Annual Report 202323
The key audit matterHow the matter was addressed in our audit
Recoverability of assets
Refer to Note 1 and 2 to the Financial Statements.
Capitalisation and the carrying value of assets are a key
audit matter due to the significance of assets to the
Group’s consolidated statement of financial position,
and due to the judgement involved in determining the
carrying value of the assets, principally:
—decision to capitalise or expense costs relating
to the network. This depends on whether the
expenditure is to enhance the network (capitalise)
or to maintain the current operating capability of
the network (expense);
—estimation of the stage of completion of assets
under construction;
—estimation of the useful life of the asset once the
costs are capitalised;
—obsolescence and impairment risk; and
—uncertainty of the impact of ongoing
technological change,transitioning to a new
regulated model, movement towards a fibre
future and RSP/LFC behaviour.
Our audit procedures included:
—examining that the controls to recognise capital projects in the fixed asset register
and to monitor labour costs capitalised throughout the year and the approval of
the asset life annual review are effective.
—assessing the nature of costs incurred in capital projects by checking a sample of
costs to invoice to determine whether the description of the expenditure met the
capitalisation criteria.
—assessing, on a sample basis, whether labour rates applied in capitalising employee
and contractor time were consistent with employee career level and contracts or
invoices.
—e
xamining, on a sample basis, that labour costs capitalised, at an individual
employee/contractor level did not exceed an individual’s salary or invoiced time.
Evaluating a sample of assets under construction in which no costs had been
incurred in the final six months of the financial reporting period. We challenged
the status of those assets under construction to determine whether they remained
appropriately capitalised.
—assessing, on a sample basis, whether the accruals recorded for assets under
construction were calculated in accordance with the progress of construction and
the arrangements with external suppliers.
—a
ssessing the useful economic lives of the assets, by comparing to our knowledge
of the business and its operations and industry benchmarks.
Revaluation of land and buildings
Refer to Note 1 to the Financial Statements.
Chorus has adopted a change in accounting policy,
effective 30 June 2023, whereby land and buildings
are recorded at fair value.
As at 30 June 2023 the fair value of the revalued
assets was $357 million (30 June 2022 carrying value
at cost: $75 million).
The change in accounting policy and valuation of
these assets is considered a key audit matter due to
the magnitude, complexity and judgement involved
in the determining the assets current fair value
and the significance of the assets to the Group’s
consolidated statement of financial position.
Our audit procedures included:
—a
ssessing the support for the change in accounting policy.
—assessing the competency, objectivity, and independence of external valuer
engaged by management.
—assessing that the valuation methodology applied is in accordance with valuation
and accounting standards and suitable for determining the fair value of the assets,
by comparing to our understanding of the business and industry practices.
—reconciling the asset holdings in the Group’s fixed asset register to the listing of
assets valued by external valuer to confirm all relevant land and buildings have
been included in the valuation exercise.
—evaluating the valuation of a sample of assets and assessing the inputs used in the
valuation of the assets. On a sample basis we compared key assumptions to market
evidence and applicable source data.
—e
xamining that the valuation adjustments have been correctly accounted for within
the Revaluation Reserve and Statement of Comprehensive Income.
—assessing the disclosures in the financial statements to determine whether these
are in accordance with the applicable accounting standard.
Chorus Funding
Refer to Note 4, 6, 7 and 19 to the Financial Statements.
At 30 June 2023, Chorus had external borrowings of
$2,528 million (30 June 2022: $2,322 million), Crown
funding of $948 million (30 June 2022: $936 million),
CIP securities of $697 million (30 June 2022:
$613 million) and net derivative financial assets of
$65 million (30 June 2022: Net derivative financial
assets of $19 million).
The external borrowings, CIP securities,
cross‑currency and interest rate derivatives are a key
audit matter due to their significance to the Group’s
consolidated statement of financial position and the
complexity and judgement involved in determining
the appropriate valuation and accounting treatment
for the CIP securities and cross
‑currency and interest
rate derivatives.
Our audit procedures to assess the valuation and accounting treatment for the
Group’s interest rate derivatives and CIP securities included:
—O
ur financial instrument specialists re
‑v
aluing all interest rate derivatives using
valuation models and inputs independent from those utilised by management.
—Agreeing the terms of the derivatives to the confirmation provided by the derivative
counterparty.
—E
xamining the hedge documentation for new debt instruments and associated
derivatives against the requirements of IFRS 9.
—E
valuating the hedge effectiveness of the interest rate derivatives hedging the EUR
denominated Euro Medium Term Notes, the NZD Bond 2028 and the NZD Bond 2030.
In all instances, our financial instrument specialists assessed the effectiveness of
these hedges by independently modelling the future changes in the value of these
instruments to assess whether the underlying derivatives were effective.
—A
ssessing the accounting treatment of the CIP securities. We read the underlying
loan agreement and analysed the various features of the loan agreement to
determine whether the CIP securities were a debt or equity instrument.
—Evaluating the valuation of the CIP securities. Our valuation specialists assessed the
methodology used by management for determining the amounts allocated to debt
and government grant.
—A
ssessing the inputs used in the valuation of the CIP securities. On a sample
basis we compared interest rates and credit spreads to independent sources of
information to determine an acceptable range of valuation inputs.
—C
onfirming debt to external support, sighting repayments and reviewing
compliance with covenant requirements.

Annual Report 202324
Other information
The Directors, on behalf of the Group, are responsible for
the other information included in the entity’s Annual Report
information includes Chorus’ operating, marking and regulatory
overviews, management commentary and disclosure relating to
corporate governance and statutory information. Our opinion
on the consolidated financial statements does not cover any
other information and we do not express any form of assurance
conclusion thereon.
In connection with our audit of the consolidated financial
statements our responsibility is to read the other information
and, in doing so, consider whether the other information
is materially inconsistent with the consolidated financial
statements or our knowledge obtained in the audit or otherwise
appears materially misstated. If, based on the work we have
performed, we conclude that there is a material misstatement
of this other information, we are required to report that fact.
We have nothing to report in this regard.
Use of this independent auditor’s report
This independent auditor’s report is made solely to the
shareholders as a body. Our audit work has been undertaken
so that we might state to the shareholders those matters we are
required to state to them in the independent auditor’s report
and for no other purpose. To the fullest extent permitted by law,
we do not accept or assume responsibility to anyone other than
the shareholders as a body for our audit work, this independent
auditor’s report, or any of the opinions we have formed.
Responsibilities of the Directors for the
consolidated financial statements
The Directors, on behalf of the Group, are responsible for:
— the preparation and fair presentation of the consolidated
financial statements in accordance with generally accepted
accounting practice in New Zealand (being New Zealand
Equivalents to International Financial Reporting Standards)
and International Financial Reporting Standards issued by the
New Zealand Accounting Standards Board;
— i
mplementing necessary internal control to enable the
preparation of a consolidated set of financial statements that
is free from material misstatement, whether due to fraud or
error; and
— a
ssessing the ability to continue as a going concern.
This includes disclosing, as applicable, matters related
to going concern and using the going concern basis of
accounting unless they either intend to liquidate or to cease
operations or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the
consolidated financial statements
Our objective is:
— to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement,
whether due to fraud or error; and
— to issue an independent auditor’s report that includes
our opinion.
Reasonable assurance is a high level of assurance but is not a
guarantee that an audit conducted in accordance with ISAs NZ
will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error. They are considered
material if, individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of users taken
on the basis of these consolidated financial statements.
A further description of our responsibilities for the audit of these
consolidated financial statements is located at the External
Reporting Board (XRB) website at:
http://www.xrb.govt.nz/standards-for-assurance-
practitioners/auditors-responsibilities/audit-report-1/
This description forms part of our independent auditor’s report.
The engagement partner on the audit resulting in this
independent auditor’s report is David Gates.
For and on behalf of
KPMG
Wellington
21 August 2023

Annual Report 202325
Consolidated income statement
For the year ended 30 June 2023
Notes
2023
$M
2022
$M
Operating revenue9980 965
Operating expenses10(308)(290)
Earnings before interest, income tax, depreciation and amortisation672 675
Depreciation1,7(355)(335)
Amortisation2,3(91)(92)
Earnings before interest and income tax226 248
Finance income4 –
Finance expense4(199)(142)
Net earnings before income tax31 106
Income tax expense14(6)(42)
Net earnings for the year25 64
Earnings per share
Basic earnings per share (dollars)
170.06 0.14
Diluted earnings per share (dollars)170.05 0.11
Consolidated statement of comprehensive income
For the year ended 30 June 2023
Notes
2023
$M
2022
$M
Net earnings for the year25 64
Other comprehensive income
Movements in effective cash flow hedges
193 96
Amortisation of de‑designated cash flow hedges transferred to consolidated income statement195 5
Movement in cost of hedging reserve19(3)10
Items that will be reclassified subsequently to Income statement when specific conditions
are met net of tax
5 111
Net revaluation of land and buildings265 –
Items that will not be reclassified subsequently to Income statement when specific conditions
are met net of tax
265 –
Total comprehensive income for the year net of tax295 175
The accompanying notes are an integral part of these consolidated financial statements.

Annual Report 202326
Consolidated statement of financial position
As at 30 June 2023
Notes
2023
$M
2022
$M
Current assets
Cash and call deposits
1576 88
Trade and other receivables11153 125
Derivative financial instruments1943 9
Assets held for sale1 –
Total current assets273222
Non-current assets
Derivative financial instruments
19116 120
Trade and other receivables11–1
Customer retention assets360 59
Software and other intangible assets2146 152
Network assets15,2135,190
Land and buildings135775
Total non-current assets5,892 5,597
Total assets6,1655,819
Current liabilities
Trade and other payables
12280 264
Lease payable513 13
Derivative financial instruments191 –
Debt4368 190
Total current liabilities excluding Crown funding662 467
Crown funding728 27
Total current liabilities690 494
Non-current liabilities
Trade and other payables
1211 16
Deferred tax liability14363 342
Derivative financial instruments1993 110
Lease payable5168 174
Debt42,160 2,132
Total non-current liabilities excluding CIP and Crown funding2,795 2 ,774
Crown Infrastructure Partners (CIP) securities6697 613
Crown funding7920 909
Total non-current liabilities4,412 4,296
Total liabilities5,102 4,790
Equity
Share capital
16589 682
Reserves331 60
Retained earnings143 287
Tot al e quit y 1,063 1,029
Total liabilities and equity6,165 5,819
The accompanying notes are an integral part of these consolidated financial statements.
The consolidated financial statements are approved and signed on behalf of the Board.
Mark Cross
Chair
Authorised for issue on 21 August 2023
Kate Jorgensen
Chair, Audit and Risk Management Committee

Annual Report 202327
Consolidated statement of changes in equity
For the year ended 30 June 2023
Notes
Share
capital
$M
Revaluation
reserve
$M
Other
reserves
$M
Retained
earnings
$M
Total
$M
Balance at 1 July 2021689 –(51)351 989
Comprehensive income
Net earnings for the year
–––64 64
Other comprehensive income
Movement in cash flow hedge reserve
19––96 –96
Amortisation of de‑designated cash flow hedges
transferred to Income statement
19––5 –5
Movement in cost of hedging reserve19––10 –10
Total comprehensive income––111 64 175
Contributions by and (distributions to) owners:
Dividends
16–––(128)(128)
Supplementary dividends–––(14)(14)
Tax credit on supplementary dividends–––14 14
Dividend reinvestment plan1631 –––31
Share buy‑back16(38)–––(38)
Total transactions with owners(7)––(128)(135)
Balance at 30 June 2022682 –60 287 1,029
Comprehensive income
Net earnings for the year
–––25 25
Other comprehensive income
Movement in cash flow hedge reserve
19––3 –3
Amortisation of de‑designated cash flow hedges
transferred to Income statement
19––5 –5
Movement in cost of hedging reserve19––(3)–(3)
Movement in revaluation reserve1,14–265 ––265
Total comprehensive income–265 5 25 295
Contributions by and (distributions to) owners:
Dividends
16–––(169)(169)
Dividend reinvestment plan169 –––9
Share buy‑back16(101)–––(101)
Shares issued under LTI scheme16(1)–1 ––
Total transactions with owners(93)–1 (169)(261)
Balance at 30 June 2023589 265 66 143 1,063
The accompanying notes are an integral part of these consolidated financial statements.

Annual Report 202328
Consolidated statement of cash flows
For the year ended 30 June 2023
Notes
2023
$M
2022
$M
Cash flows from operating activities
Cash was provided from/(applied to):
Receipts from customers
973 977
Payment to suppliers and employees(311)(295)
Interest paid(138)(98)
Interest received4 –
Taxation paid (4)(14)
Net cash flows provided from operating activities524 570
Cash flows applied to investing activities
Cash was provided from/(applied to):
Purchase of network and intangible assets
(495)(518)
Disposal of network and intangible assets –3
Capitalised interest paid(1)(2)
Net cash flows applied to investing activities(496)(517)
Cash flows from financing activities
Cash was provided from/(applied to):
Payment of lease liabilities
(15)(14)
Crown funding (including CIP securities)84 81
Proceeds from debt 811 50
Repayment of debt(659)–
Repurchase of shares(101)(38)
Dividends paid(160)(97)
Net cash flows applied to financing activities(40)(18)
Net cash flows(12)35
Cash at the beginning of the year88 53
Cash at the end of the year1576 88
Reconciliation of net earnings to net cash flows from operating activities
Notes
2023
$M
2022
$M
Net earnings for the year25 64
Adjustment for:
Depreciation of network assets
1384 362
Amortisation of Crown funding7(29)(27)
Amortisation of software and other intangible assets261 62
Amortisation of customer retention assets333 34
Deferred income tax 142 45
Ineffective portion of changes in fair value of cash flow hedges4(7)(7)
Amortisation of non‑cash finance expenses10 10
CIP securities (notional) interest445 39
Other5 (3)
529 579
Change in current assets and liabilities:
Increase in trade and other receivables
11(27)(2)
Increase in operating trade payables 1222 10
Increase in income tax receivable–(4)
Decrease in income tax payable–(13)
(5)(9)
Net cash flows from operating activities524 570
The accompanying notes are an integral part of these consolidated financial statements.

Annual Report 202329
Reconciliation of movements of liabilities to cash flows arising from financing activities
Debt
$M
Crown funding
$M
CIP securities
$M
Lease payable
$M
Share capital
$M
Retained earnings
$M
Balance at 1 July 20212,373 906 545 264 689 351
Movements from financing cash flows
Payment of lease liabilities
–––(14)––
Proceeds from debt50 54 27 –––
Repurchase of shares––––(38)–
Dividends paid–––––(97)
Total changes from financing cash flows50 54 27 (14)(38)(97)
Other cash flows
Interest paid on leases
–––(15)––
Non-cash movements
Movements in fair value (including foreign
exchange rates)
(105)–––––
Transaction costs and amortisation related to
financing
(4)(27)39 –––
Accruals–3 2 –––
Dividend reinvestment plan––––31 (31)
Lease movements–––(48)––
Net earnings for the year ended 30 June 2022–––––64
Balance at 30 June 20222,322 936 613 187 682 287
Movements from cash flows
Payment of lease liabilities
–––(15)––
Proceeds from debt811 45 39 –––
Repayment of debt(659)–––––
Repurchase of shares––––(101)–
Dividends paid–––––(160)
Total changes from financing cash flows152 45 39 (15)(101)(160)
Other cash flows
Interest paid on leases
–––(11)––
Non-cash movements
Movements in fair value (including foreign
exchange rates)
50 –––––
Transaction costs and amortisation related to
financing
4 (29)45 –––
Accruals–(4)––(1)–
Dividend reinvestment plan––––9 (9)
Lease movements–––20 ––
Net earnings for the year ended 30 June 2023–––––25
Balance at 30 June 20232,528 948 697 181 589 143
The accompanying notes are an integral part of these consolidated financial statements.

Annual Report 202330
Notes to the consolidated financial statements
Reporting entity and statutory base
Chorus includes Chorus Limited together with its subsidiaries.
Chorus is New Zealand’s largest fixed line communications
infrastructure business. It maintains and builds a network
predominantly made up of fibre and copper cables, local
telephone exchanges and cabinets.
Chorus Limited is a profit‑o
riented company registered in
New Zealand under the Companies Act 1993 and is a FMC
Reporting Entity for the purposes of the Financial Markets
Conduct Act 2013. Chorus Limited was established as a
standalone, publicly listed entity on 1 December 2011, upon its
demerger from Spark New Zealand Limited (Spark, previously
Telecom Corporation of New Zealand Limited). The demerger
was a condition of an agreement with Crown Infrastructure
Partners Limited (previously Crown Fibre Holdings) to enable
Chorus Limited to provide the majority of the Crown’s Ultra‑Fast
Broadband (UFB) network. Chorus Limited is listed and its
ordinary shares are quoted on the NZX main board equity
security market (NZX Main Board) and on the Australian Stock
Exchange (ASX) and has bonds quoted on the NZX and ASX
debt markets. American Depositary Shares, each representing
five ordinary shares (and evidenced by American Depositary
Receipts), are not listed but are traded on the over
‑t
he
‑c
ounter
market in the United States.
These consolidated financial statements (“financial statements”)
have been prepared in accordance with Generally Accepted
Accounting Practice in New Zealand (NZ GAAP) and Part 7 of
the Financial Markets Conduct Act 2013. They comply with
New Zealand equivalents to International Financial Reporting
Standards (NZ IFRS) as appropriate for profit‑oriented entities,
and with International Financial Reporting Standards.
These financial statements are expressed in New Zealand dollars.
All financial information has been rounded to the nearest million,
unless otherwise stated.
The measurement basis adopted in the preparation of these
financial statements is historical cost, modified by the revaluation
of financial instruments and land and buildings as identified in the
specific accounting policies below and the accompanying notes.
Accounting policies and standards
Accounting policies that summarise the measurement basis
used which are relevant to the understanding of the financial
statements are provided throughout the accompanying notes.
The accounting policies adopted and methods of computation
have been applied consistently throughout the periods presented
in these financial statements, except for the below change in
accounting policy.
Change in accounting policy
Chorus has adopted a revaluation policy for measuring land and
building at fair value, as at 30 June 2023. Previously, Chorus
measured land and buildings at depreciated historical cost.
This change in accounting policy applies prospectively and
the revaluation movement has been recognised in the current
year in the Consolidated statement of comprehensive income
(refer to note 1).
Climate impact
In preparing the financial statements, management has
considered climate‑related matters and disclosed as required
when the effect of those matters is material in the context of
the financial statements taken as a whole. In the year ended
30 June 2023 there was no material impact of climate related
matters. Although there was no material impact in the year,
extreme weather events occurred. Individually, these events did
not have a material impact on the financial statements.
Accounting estimates and judgements
In preparing the financial statements, management has made
estimates and assumptions about the future that affect the
reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of revenue and
expenses during the period. Actual results could differ from
those estimates.
Estimates and assumptions are continually evaluated and are
based on experience and other factors, including macro‑
e
conomic and market factors, and expectations of future
events that may have an impact on Chorus. All judgements,
estimates, and assumptions are believed to be reasonable based
on the most current set of circumstances available to Chorus.
The principal areas of judgement in preparing these financial
statements are set out below.
Network assets (note 1)
Assessing the carrying value of network assets for impairment
considerations which includes assessing the appropriateness
of useful life and residual value estimates of network assets,
the physical condition of the asset, technological advances,
regulation and expected disposal proceeds from the future sale
of the asset.

Annual Report 202331
Land and buildings (note 1)
Land and buildings are recorded at fair value. Fair value relating
to land and buildings is determined based on a periodic
independent valuation using a combination of an optimised
depreciated replacement cost, capitalised income, and a market
valuation approach. The valuation technique applied to each
asset is determined by the independent valuer, with input and
review by Chorus management who are familiar with the nature
of the assets. Valuations are performed every three years, or
more frequently where indicators exist that the carrying amount
of the asset materially differs from its fair value at the end of the
reporting period. This may be the result of external factors (e.g.
a volatile property market) or internal factors. In these instances
where indicators of material difference exist, a desktop valuation
may be obtained to appropriately adjust the carrying value of
the assets. The underlying assumptions used in the valuation are
reviewed at each reporting date to ensure the carrying value is
not materially different from the fair value.
Customer retention assets (note 3)
Assessing the carrying value of customer retention assets
for impairment considerations which includes assessing the
appropriateness of useful life, contract terms, revenue and
customer connections data.
Leases (note 5)
A significant portion of lease contracts contain options for
extension, which in turn require management to apply judgement
in assessing if these extensions are likely to be exercised.
Crown Infrastructure Partners (CIP) securities (note 6)
Determining the fair value of the CIP securities requires
assumptions on expected future cash flows and discount rates
based on future long dated swap curves.
Financial risk management (note 19 and 20)
Accounting judgements have been made in determining hedge
designation and the fair value of derivatives and borrowings.
The fair value of derivatives and borrowing are determined based
on valuation models that use forward‑looking estimates and
market observable data, to the extent that it is available.
Non-GAAP measures
Chorus use non‑GAAP measures that are not prepared in
accordance with NZ IFRS. Chorus believes these non‑GAAP
measures provide useful information to users of the financial
statements to assist in understanding the financial performance
of Chorus. These measures are also used internally to evaluate
the performance of Chorus and monitored for compliance
against debt covenants.
These measures should not be viewed in isolation or as a
substitute for measures reported in accordance with NZ IFRS
as they are not uniformly defined or utilised by all companies in
New Zealand or the telecommunications industry.
Earnings before interest and income tax (EBIT) and earnings
before interest, income tax, depreciation and amortisation
(EBITDA)
Chorus calculate EBIT by adding back finance expense and
income tax to, and subtracting finance income from, net
earnings. EBITDA adds back depreciation and amortisation
expense to EBIT. A reconciliation of EBIT and EBITDA is provided
below and based on amounts taken from, and consistent with,
those presented in the financial statements.
Year ended 30 June
2023
$M
2022
$M
Net earnings for the year reported under NZ IFRS 25 64
Add back: income tax expense 6 42
Add back: finance expense 199 142
Subtract: finance income (4) –
EBIT 226 248
Add back: depreciation 355 335
Add back: amortisation 91 92
EBITDA 672 675

Annual Report 202332
Note 1 – Network assets, land and buildings
In the Consolidated statement of financial position, network
assets, except land and buildings, are stated at cost less
accumulated depreciation and any accumulated impairment
losses. The cost of additions to network assets and work in
progress constructed by Chorus includes the cost of all materials
used in construction, direct labour costs specifically associated
with construction, interest costs that are attributable to the asset,
resource management consent costs and attributable overheads.
Repairs and maintenance costs are recognised in the
Consolidated income statement as incurred. If the useful life
of the asset is extended or the asset is enhanced then the
associated costs are capitalised.
Land and buildings
Land and buildings are carried at a revalued amount.
The revalued amount represents the fair value of each land and
building asset at the date of revaluation less any subsequent
accumulated depreciation and subsequent accumulated
impairment losses. If an asset’s carrying amount is increased
as a result of a revaluation, the increase is recognised in
the Consolidated statement of comprehensive income and
accumulated within the revaluation reserve in equity. An increase
shall be recognised in the Consolidated income statement to
the extent it reverses a revaluation decrease of the same asset
previously recognised in profit or loss. If an asset’s carrying
amount is decreased as a result of a revaluation, the decrease is
first recognised in the Consolidated statement of comprehensive
income (and the revaluation reserve) to the extent any credit
balance exists in relation to that asset. Any additional decrease
in the asset’s carrying amount is recognised in the Consolidated
income statement as an expense. The attributable revaluation
surplus remaining in the asset revaluation reserve relating to
land or buildings disposed of, net of any related deferred taxes,
is transferred directly to retained earnings on the derecognition
of the relevant asset. Deferred tax, if any, resulting from the
revaluation of land and buildings are recognised and disclosed in
accordance with NZ IAS 12 Income Taxes.
The Company adopted fair value approach on 30 June 2023.
The movement in fair value of $282 million (excluding deferred tax)
has been recognised as at that date. The prior year comparatives
are recognised at historical cost less accumulated depreciation.
Estimating useful lives and residual values of network assets
and buildings
The determination of the appropriate useful life for a particular
asset requires management to make judgements about,
amongst other factors, the expected period of service potential
of the asset, the likelihood of the asset becoming obsolete as a
result of technological advances, and the likelihood of Chorus
ceasing to use the asset in business operations.
Where an item of network assets or buildings comprises major
components having different useful lives, the components are
accounted for as separate items of network assets or buildings.
Where the remaining useful lives or recoverable values have
diminished due to technological, regulatory or market condition
changes, depreciation is accelerated. The assets’ residual values,
useful lives, and methods of depreciation are reviewed annually
and adjusted prospectively, if appropriate.
Depreciation is charged on a straight‑line basis to write down the
cost of network assets and buildings to their estimated residual
value over their estimated useful life. Estimated useful lives are
as follows:
Fibre cables20–30 years
Ducts, manholes and poles20–50 years
Copper cables10–25 years
Cabinets5–20 years
Buildings50 years
Network electronics2–25 years
Right of use assets4–50 years
Other4–25 years
Other network assets include motor vehicles, test instruments,
furniture and fittings, tools and plant.
An item of network assets and any significant part is
derecognised upon disposal or when no future economic
benefits are expected from its use. Where network assets are
disposed of, the profit or loss recognised in the Consolidated
income statement is calculated as the difference between the
sale price and the carrying value of the asset.
Non‑monetary items that are measured in terms of historical
cost in a foreign currency are translated using the exchange
rates as at the dates of the initial transactions.
Land and work in progress are not depreciated. Work in progress
is reviewed on a regular basis to ensure that costs represent
future assets.

Annual Report 202333
30 June 2023
Fibre
cables
$M
Ducts,
manholes,
and poles
$M
Copper
cables
$M
Cabinets
$M
Network
electronics
$M
Right of
use assets
$M
Other
$M
Work in
progress
$M
Land and
buildings
$M
Total
$M
Gross carrying amount
Balance at 1 July 2022
2,663 3,160 2,424 731 1,762 234 295 141 184 11,594
Additions 134 119 2 17 78 7 7 158 5 527
Disposals– – – – (8) (1) (3)– (1) (13)
Transfers from work in progress– – – – – – – (122)– (122)
Net revaluations through other
comprehensive income
– – – – – – – – 169 169
Other– – – – – 4 – – – 4
Balance at 30 June 2023 2,797 3,279 2,426 748 1,832 244 299 177 357 12,159
Accumulated depreciation–
Balance at 1 July 2022 (964) (778) (2,172) (525) (1,495) (84) (202)– (109) (6,329)
Depreciation (128) (64) (76) (18) (67) (13) (14)– (4) (384)
Disposals– – – – 8 1 2 – – 11
Net revaluations through other
comprehensive income
– – – – – – – – 113 113
Other– – – – – – – – – –
Balance at 30 June 2023 (1,092) (842) (2,248) (543) (1,554) (96) (214)– – (6,589)
Net carrying amount 1,705 2,437 178 205 278 148 85 177 357 5,570
30 June 2022
Fibre
cables
$M
Ducts,
manholes,
and poles
$M
Copper
cables
$M
Cabinets
$M
Network
electronics
$M
Right of
use assets
$M
Other
$M
Work in
progress
$M
Land and
buildings
$M
Total
$M
Cost
Balance at 1 July 2021
2,497 2,965 2,415 715 1,872 301 284 179 179 11,407
Additions 166 195 9 16 50 7 12 181 5 641
Disposals– – – – (160) (10) (1)– – (171)
Transfers from work in progress– – – – – – – (219)– (219)
Other– – – – – (64)– – – (64)
Balance at 30 June 2022 2,663 3,160 2,424 731 1,762 234 295 141 184 11,594
Accumulated depreciation–
Balance at 1 July 2021 (842) (717) (2,111) (503) (1,593) (79) (188)– (105) (6,138)
Depreciation (122) (61) (61) (22) (62) (15) (15)– (4) (362)
Disposals– – – – 160 10 1 – – 171
Balance at 30 June 2022 (964) (778) (2,172) (525) (1,495) (84) (202)– (109) (6,329)
Net carrying amount 1,699 2,382 252 206 267 150 93 141 75 5,265
There are no restrictions on Chorus’ network assets or any
network assets pledged as securities for liabilities.
At 30 June 2023 the contractual commitments for acquisition
and construction of the network assets was $50 million
(30 June 2022: $79 million).
Land and buildings at historical cost
If land and buildings were stated on an historical cost basis,
the amounts would be as follows:
Year ended 30 June
2023
$000’s
Land and buildings (at cost) 188
Buildings accumulated depreciation (113)
Net carrying amount 75

Annual Report 202334
Crown funding
Chorus receives funding from the Crown to finance the capital
expenditure associated with the development of the UFB network
and other services. Where funding is used to construct assets, it is
offset against depreciation over the life of the assets constructed.
Refer to note 7 for information on Crown funding.
Impairment
The carrying amounts of non‑financial assets including network
assets, land and buildings, software and other intangibles and
customer retention assets are reviewed at the end of each
reporting period for any indicators of impairment.
If any such indication exists, the recoverable amount of the
asset is estimated. An impairment loss is recognised in earnings
whenever the carrying amount of an asset exceeds its estimated
recoverable amount. Should the conditions that gave rise to the
impairment loss no longer exist, and the assets are no longer
considered to be impaired, a reversal of an impairment loss
would be recognised immediately in earnings. In the period to
30 June 2023, there was no impairment in relation to the costs
capitalised (30 June 2022: no impairment).
The recoverable amount is the greater of an assets value in use
and fair value less costs to sell. Chorus’ assets do not generate
independent cash flows and are therefore assessed from a single
cash
‑generating unit perspective. In assessing the recoverable
amount, the estimates of future cash flows are discounted to
their net present value using a discount rate that reflects current
market assessments of the time value of money and the risks
specific to the business.
Capitalised interest
Finance costs are capitalised on qualifying items of network
assets and software assets at an annualised rate of 4.00%
(30 June 2022: 4.00%). Interest is capitalised over the period
required to complete the assets and prepare them for their
intended use. In the current year finance costs totalling $1 million
(30 June 2022: $2 million) have been capitalised against network
assets and software assets.
Right of use assets
A right of use asset is recognised on commencement of a lease.
The right of use asset is initially measured at cost, which is made
up of the initial lease liability amount adjusted for any lease
payments made at or before the commencement date, plus any
initial direct costs incurred and an estimate of costs to remove
the underlying asset or to restore the underlying asset or the site
on which it is located, less any lease incentives received.
The right of use asset is subsequently depreciated using the
straight‑line method until the assumed end of the lease term.
The right of use asset is periodically adjusted for certain
remeasurements of the lease liability.
Movements in right of use assets for the period are presented below:
Right of use assets
Fibre cables
$M
Ducts, manholes,
and poles
$M
Property
$M
Total
$M
Balance 1 July 20218 47 167 222
Additions–5 2 7
Relinquishments and modifications––(64)(64)
Depreciation charge(1)(4)(10)(15)
Balance at 30 June 20227 48 95 150
Additions–4 3 7
Disposals––(1)(1)
Other––4 4
Depreciation charge(1)(4)(7)(12)
Balance at 30 June 20236 48 94 148
Property exchanges
Chorus has leased exchange space and commercial co‑location
space owned by Spark which is subject to lease arrangements
(included within right of use assets). Chorus in turn leases
exchange space and commercial co‑location space owned by
Chorus to Spark under an operating lease arrangement.
Note 1 – Network assets, land and buildings (cont.)

Annual Report 202335
Note 2 – Software and other intangible assets
Software and other intangible assets are initially measured
at cost. The direct costs associated with the development of
network and business software for internal use are capitalised
where project success is probable and the capitalisation
criteria is met. Following initial recognition, software and
other intangible assets are stated at cost less accumulated
amortisation and impairment losses. Software and other
intangible assets with a finite life are amortised from the date the
asset is ready for use on a straight‑line basis over its estimated
useful life which is as follows:
Software2–10 years
Other intangibles 20–35 years
Other intangibles mainly consist of land easements.
Where estimated useful lives or recoverable values have
diminished due to technological change or market conditions,
amortisation is accelerated.
There are no restrictions on software and other intangible assets,
or any intangible assets pledged as securities for liabilities.
30 June 2023
Software
$M
Other intangibles
$M
Work in progress
$M
Total
$M
Cost
Balance at 1 July 2022
918 6 17 941
Additions44 –55 99
Disposals(7)––(7)
Transfers from work in progress––(44)(44)
Balance at 30 June 2023955 6 28 989
Accumulated amortisation
Balance at 1 July 2022
(788)(1)–(789)
Amortisation(61)––(61)
Disposals7 ––7
Balance at 30 June 2023(842)(1)–(843)
Net carrying amount113 5 28 146
30 June 2022
Software
$M
Other intangibles
$M
Work in progress
$M
Total
$M
Cost
Balance at 1 July 2021
873 6 22 901
Additions55 –50 105
Disposals(10)––(10)
Transfers from work in progress––(55)(55)
Balance at 30 June 2022918 6 17 941
Accumulated amortisation
Balance at 1 July 2021
(736)(1)–(737)
Amortisation(62)––(62)
Disposals10 ––10
Balance at 30 June 2022(788)(1)–(789)
Net carrying amount130 5 17 152
At 30 June 2023 the contractual commitment for acquisition
of software and other intangible assets was $4 million
(30 June 2022: $2 million).

Annual Report 202336
Note 3 – Customer retention assets
Customer retention costs are incremental costs incurred in
acquiring new contracts with new and existing customers that
Chorus expects are recoverable and are capitalised as customer
retention assets. These represent various costs including
commissions and incentives for customers to connect to the fibre
network. Following initial recognition, customer retention assets
are stated at cost less accumulated amortisation and impairment
losses. Customer retention assets have a finite life and are
amortised from the month that costs are capitalised on a straight‑
line basis over the average connection life which is as follows:
New connections and migrations1–4 years
Customer incentives1 year
Customer retention assets are amortised to the Consolidated
income statement, either as amortisation expense or against
operating revenue, based on the nature of the specific costs
capitalised.
New connections
and migrations
$M
Customer
incentives
$M
Total
$M
Balance at 1 July 2021 (net carrying amount)57 2 59
Additions31 3 34
Amortisation to amortisation expense(30)–(30)
Amortisation to operating revenue–(4)(4)
Balance at 30 June 2022 (net carrying amount)58 1 59
Additions30 4 34
Amortisation to amortisation expense(30)–(30)
Amortisation to operating revenue–(3)(3)
Balance at 30 June 2023 (net carrying amount)58 2 60
Note 4 – Debt
Debt is classified as non‑current liabilities except for those with
maturities less than 12 months from the reporting date, which
are classified as current liabilities.
Debt is initially measured at fair value, less any transaction costs
that are directly attributable to the issue of the instruments.
Debt is subsequently measured at amortised cost using the
effective interest method. Some borrowings are designated in
fair value hedge relationships, which means that any change in
market interest and foreign exchange rates result in a change in
the fair value adjustment on that debt.
The weighted effective interest rate on debt including the effect
of derivative financial instruments and facility fees was 5.40%
(30 June 2022: 3.77%).
Due date
2023
$M
2022
$M
Syndicated bank facilitiesJul 2022–190
Euro medium term notes EUROct 2023368 828
Euro medium term notes EURDec 2026473 464
Euro medium term notes EURSep 2029853 –
Fixed rate NZD BondsDec 2027200 200
Fixed rate NZD BondsDec 2028500 500
Fixed rate NZD BondsDec 2030153 154
Less: facility fees(19)(14)
Total Debt2,528 2,322
Current368 190
Non-current2,160 2,132
Syndicated bank facilities
As at 30 June 2023 Chorus had a $450 million committed syndicated facility on market standard terms and conditions
(30 June 2022: $350 million). The facility is held with banks that are rated A to AA‑, based on Standard & Poor’s ratings.
As at  30 June 2023 nil was drawn down (30 June 2022: $190 million).

Annual Report 202337
Euro Medium Term Note (EMTN)
Face valueInterest rate
2023
$M
2022
$M
EUR 209 million1.13%368 828
EUR 300 million0.88%473 464
EUR 500 million3.63%853 –
EMTN 2023 tender
In September 2022, Chorus repurchased EUR 291 million
($457 million) of the 2023 EMTN for 99.202% of face value.
Concurrently, an equal nominal amount of cross‑currency
interest rate swaps (CCIRS) which hedged the debt were exited
to ensure the hedging relationship remains fully effective.
Costs incurred in repurchasing the debt and terminating the
CCIRS have been recognised in the consolidated income
statement within finance expenses, offset by the discount on
repurchase of the notes.
EMTN 2029 issuance
Chorus also issued EUR 500 million of EMTN in September 2022 for
a term of 7 years at an interest rate of 3.625%. Consistent with the
Chorus Treasury Policy, the debt has been fully hedged with CCIRS
to hedge the foreign currency exposure, which entitle Chorus to
receive EUR 500 million and EUR fixed coupon payments for NZD
820 million principal and NZD floating interest payments.
Transaction costs directly associated with the issuance of the
notes have been capitalised and will be amortised over the term
of the debt to the consolidated income statement.
Chorus has in place cross currency interest rate swaps to hedge
the foreign currency exposure to the EMTN. The cross currency
interest rate swaps entitle Chorus to receive EUR principal and
EUR fixed coupon payments for NZD principal and NZD floating
interest payments. The EUR cross currency interest rate swaps
(notional amount EUR 1,009 million) are partially hedged for the
NZD interest payments using interest rate swaps.
The EUR 500 EMTN cross currency interest rate swaps (notional
amount EUR 500 million) are partially hedged for the NZD
interest payments using interest rate swaps. The EUR 300 cross
currency interest rate swaps (notional amount EUR 300 million)
are fully hedged for the NZD interest payments using interest
rates swaps. The EUR 209 cross currency swaps (notional
amount EUR 209 million) are fully hedged for the NZD interest
payments using interest rate swaps.
The following table reconciles EMTN at hedged rates to EMTN
carrying value based on spot rates as reported under NZ IFRS.
EMTN at hedged rates is a non
‑G
AAP measure and is not defined
by NZ IFRS:
2023
EUR 500
$M
2022
EUR 500
$M
2023
EUR 300
$M
2022
EUR 300
$M
2023
EUR 209
$M
2022
EUR 500
$M
EMTN (at carrying value)853 –473 464 368 828
Impact of fair value hedge38 –62 40 4 11
Impact of hedged rates used(71)–(21)10 (44)(54)
EMTN at hedged rates (non-GAAP measure)820 –514 514 328 785
EMTN at fair value868 –475 461 369 837
The fair value of EMTN’s is calculated based on the present value of future principal and interest cash flows, discounted at market
interest rates at balance date and is determined using Level 2 of the fair value hierarchy as described in note 20.
Fixed rate NZD bonds
Due dateInterest rate
2023
$M
2022
$M
Fixed rate NZD Bonds Dec 20271.98%200 200
Fixed rate NZD Bonds Dec 20284.35%500 500
Fixed rate NZD Bonds Dec 20302.51%153 154
Total fixed rate NZD Bonds853 854
The fixed rate on the 2030 NZD Bonds has been swapped to a
floating rate using interest rate swaps, creating a fair value hedge
which has a fair value of $153 million at balance date (notional
amount $200 million). This hedging relationship was entered to
comply with the Chorus Treasury Policy which does not allow
for greater than 70% of term debt to be subject to fixed interest
rates beyond a three year time period.
At 30 June 2023, Chorus had $900 million of unsecured,
unsubordinated debt securities (30 June 2022: $900 million).
Note 4 – Debt (cont.)

Annual Report 202338
Schedule of maturities
2023
$M
2022
$M
Current368 190
Due one to two years–828
Due three to four years673 –
Due four to five years–464
Due over five years1,506 854
Total due 2,547 2,336
Less: facility fees(19)(14)
2,528 2,322
No debt has been secured against assets, however there are
financial covenants and event of default triggers as defined
in the various debt agreements. During the current year
Chorus complied with the requirements set out in its financing
agreements (30 June 2022: complied).
Refer to note 20 for information on financial risk management.
Finance expense
2023
$M
2022
$M
Interest on syndicated bank facility2 6
Interest on EMTN93 51
Interest on fixed rate NZD bonds32 32
Ineffective portion of changes in fair value of cash flow hedges(7)(7)
Other interest expense35 23
Capitalised interest(1)(2)
Total finance expense excluding CIP securities (notional) interest154 103
CIP securities (notional) interest45 39
Total finance expense199 142
Other interest expense includes $11 million lease interest expense (30 June 2022: $15 million), $11 million of expense recognised for
the partial repurchase of the 2023 EMTN and $7 million of amortisation arising from the difference between fair value and proceeds
realised from the swaps reset (30 June 2022: $7 million).
Note 4 – Debt (cont.)

Annual Report 202339
Note 5 – Leases
Chorus is a lessee of certain network assets under lease
arrangements. For all leases Chorus recognises assets and
liabilities in the Consolidated statement of financial position,
except those determined to be short‑term or low value.
On inception of a new lease, the lease payable is measured at
the present value of the remaining lease payments, discounted at
Chorus’ incremental borrowing rate at that date. Lease costs are
recognised through interest expense over the life of the lease.
The corresponding right of use asset incurs depreciation over
the estimated useful life of the asset.
Chorus’ discounted cash flows by category are summarised
below:
2023
$M
2022
$M
Fibre cables11 11
Ducts, manholes and poles52 51
Property118 125
Total lease payable181 187
Current13 13
Non-current168 174
Extension options
Most leases contain extension options exercisable by Chorus
up to one year before the end of the non‑cancellable contract
period. Where practicable, Chorus seeks to include extension
options in new leases to provide operational flexibility.
The extension options held are exercisable only by Chorus and
not by the lessors. Chorus assesses at lease commencement
whether it is reasonably certain the extension options will be
exercised, and where it is reasonably certain, the extension
period has been included in the lease liability calculation.
Chorus reassesses whether it is reasonably certain to exercise
the options if there is a significant event or significant change in
circumstances within its control.
The amounts recognised in the Consolidated income statement
and the Consolidated statement of cash flows relating to leases
are summarised below:
2023
$M
2022
$M
Amounts recognised in Consolidated income statement:
Interest on lease payable
11 15
Amounts recognised in Consolidated statement of cash flows:
Principal payments
(15)(14)
Lease interest(11)(15)

Annual Report 202340
Note 6 – Crown Infrastructure Partners (CIP) securities
Ultra-Fast Broadband (UFB)
Chorus received Crown funding to finance construction costs
associated with the development of the UFB network. Funding
was received for every premise passed and certified by CIP.
Funding was received over two phases. Phase one of the build
(UFB1) was completed in December 2019 with a total of $924 million
of funding received. Phase two (UFB2 and UFB2+) was completed in
December 2022 with a total of $411 million of funding received.
In return for funding under both phases, CIP equity securities and
CIP debt securities are issued. Under UFB1 CIP warrants were
also issued. Under the UFB2 and UFB2+ arrangement, Chorus
can elect the mix of securities to be issued, up to a maximum
of $306 million of equity securities. This maximum was reached
during the year ended 30 June 2022.
The CIP equity and debt securities were recognised initially
at fair value plus any directly attributable transaction costs.
Subsequently, they are measured at amortised cost using the
effective interest method. The fair value is derived by discounting
the equity securities and debt securities per premises passed by
the effective rate based on market rates. The difference between
funding received and the fair value of the securities is recognised
as Crown funding. Over time, the CIP debt and equity securities
increase to face value and the Crown funding is released against
depreciation and reduces to nil.
CIP debt securities
CIP debt securities are unsecured, non‑interest bearing and
carry no voting rights at meetings of holders of Chorus ordinary
shares. Chorus is required to redeem the CIP debt securities in
tranches from 2025 by repaying the face value to the holder.
The principal amount of CIP debt securities consists of a senior
portion and a subordinated portion. The senior portion ranks
equally with all other unsecured, unsubordinated creditors of
Chorus, and has the benefit of any negative pledge covenant
that may be contained in any of Chorus’ debt arrangements.
The subordinated portion ranks below all other Chorus
indebtedness but above ordinary shares of Chorus. The initial
value of the senior portion is the present value of the sum
repayable on the CIP debt securities, and the initial subordinated
portion will be the difference between the issue price of the CIP
debt security and the value of the senior portion.
CIP equity securities
CIP equity securities are a class of non‑interest bearing security
that carry no right to vote at meetings of holders of Chorus
ordinary shares but entitle the holder to a preferential right to
repayment on liquidation and additional rights that relate to
Chorus’ performance under its construction contract with CIP.
For UFB1 equity securities, dividends will become payable on a
portion of the CIP equity securities from 2025 onwards, with the
portion of CIP equity securities that attract dividends increasing
over time. For UFB2 and UFB2+ equity securities, dividends will
become payable from 2030.
CIP equity securities can be redeemed by Chorus at any time by
payment of the issue price or issue of new ordinary shares (at a
5% discount to the 20
‑day volume weighted average price) to
the holder. In limited circumstances CIP equity securities may be
converted by the holder into voting preference or ordinary shares.
The CIP equity securities are required to be disclosed as a liability
until the liability component of the compound instrument expires.
CIP warrants
Under UFB1 Chorus issued warrants to CIP for nil consideration
along with each tranche of CIP equity securities. Each CIP
warrant gives CIP the right, on a specified exercise date, to
purchase at a set strike price a Chorus share to be issued by
Chorus. The strike price for a CIP warrant is based on a total
shareholder return of 16% per annum on Chorus shares over the
period December 2011 to June 2036.
At 30 June 2023, Chorus had issued a total 15,662,325 warrants
which had a fair value and carrying value that approximated zero
(30 June 2022: 15,138,187 warrants issued). The number of fibre
connections made by 30 June 2023 impacts the number of
warrants that could be exercised.
The fair value has been calculated using discount rates from
market rates at balance date and is a level 2 valuation of the
fair value hierarchy as described in note 20.
At 30 June 2023, the component parts of CIP debt and equity
instruments, including notional interest, were:
20232022
CIP debt
securities
$M
CIP equity
securities
$M
Total CIP
securities
$M
CIP debt
securities
$M
CIP equity
securities
$M
Total CIP
securities
$M
Fair value on initial recognition
Balance at 1 July
189 250 439 176 234 410
Additional securities recognised at fair value39 –39 13 16 29
Balance at 30 June228 250 478 189 250 439
Accumulated notional interest
Balance at 1 July
78 96 174 63 72 135
Notional interest18 27 45 15 24 39
Balance at 30 June96 123 219 78 96 174
Total CIP securities324 373 697 267 346 613
CIP at fair value320 375 695 260 333 593