CHORUS LIMITED — Annual Report 2013

Aug 25, 2013

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Companies Announcement Office Australian Securities Exchange 4[th] Floor, 20 Bridge Street Sydney, NSW 2000 Australia

Chorus Limited Level 9 Datacom House 68-86 Jervois Quay P O Box 632 Wellington New Zealand

Email: company.secretary@chorus.co.nz

26 August 2013

Dear Sir/Madam,

CHORUS FULL YEAR RESULT, FY13: SUPPLEMENTARY DOCUMENTS

Further to the filing of the Appendix 4E, please find attached the following documentation for release to the market:

1. Media Release

2. Investor Presentation

3. NZX Appendix 1

4. NZX Appendix 7

These documents will also be released to the New Zealand Stock Exchange.

Yours sincerely

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Vanessa Oakley General Counsel & Company Secretary Chorus Limited

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Chorus Limited Level 9 Datacom House 68-86 Jervois Quay P O Box 632 Wellington New Zealand Email: company.secretary@chorus.co.nz

STOCK EXCHANGE ANNOUNCEMENT

26 August 2013

Chorus announces FY13 full year result

• $171m NPAT

• 15.5cps dividend for six months

• UFB rollout ahead of target and 18% complete

• New guidance for FY14 capital expenditure and FY14 EBITDA outlook

Chorus Limited has today reported its financial result for the twelve months ended 30 June 2013.

The fixed line communications infrastructure company reported a net profit after tax (NPAT) of $171 million and earnings before interest, tax, depreciation and amortisation (EBITDA) of $663 million for the period. The result includes $1 million relating to insurance claims from the Canterbury earthquakes.

Investment in fibre network, principally for the Ultra-Fast Broadband and Rural Broadband Initiative programmes, accounted for $579 million, or 85%, of Chorus' $681 million gross capital expenditure for the twelve months ended 30 June 2013.

Chief Executive Officer Mark Ratcliffe describes this as “a good operating result, particularly with both the Ultra-Fast Broadband and Rural Broadband Initiative programmes slightly ahead of target, a small increase in the number of access lines and a 6% increase in copper broadband connections. On the downside, capital expenditure demands continue to be significant and regulatory headwinds remain.”

1

"We are making rapid progress in building a fibre future for New Zealand with more than 3,000 kilometres of fibre cabling deployed in just 12 months, taking our total fibre network beyond 30,000 kilometres," Ratcliffe said.

At 30 June, the UFB network was within reach of 205,500 end-users, or 153,000 premises, and 51,200 rural end-users were within reach of better broadband.

"Achieving ongoing efficiency in the cost of the UFB network rollout and ensuring UFB connections are made on a time and cost efficient basis is a key focus. Spending almost two-thirds of our revenues on capital investment is an extraordinary amount for any company," Ratcliffe said.

The average cost of completing the FY13 UFB network build was $2,935 per premises passed. Chorus provided guidance that it expects to spend $660 million to $690 million on capital expenditure in FY14 and is again targeting an average cost per premises passed of between $2,900 and $3,200 for the year, reflecting the challenging mix of build areas planned for FY14.

Chorus now employs 763 permanent and fixed term employees directly, along with a further 4,434 people who are either employed directly by its service company partners or are sub-contracted by the service companies. This means the overall workforce has doubled since Chorus’ demerger from Telecom.

Chorus reports growth of 8,000 fixed line connections for the twelve month period to a total of 1,784,000, including 90% growth in fibre connections to 19,000. Demand for fixed broadband connections continued to grow steadily, with about 64,000 copper broadband connections added over the period.

Chorus also faces ongoing challenges with the current regulatory environment. A Commerce Commission decision on copper line pricing in December has already reduced EBITDA by $20 million on an annualised basis and a recent Government discussion paper proposes a review of the telecommunications regulatory framework with an immediate focus on copper pricing.

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While the outcome of the Government’s regulatory review is uncertain, all potential options contained within the discussion paper imply reduced future earnings for Chorus. The discussion paper suggests a potential decrease of Chorus’ pricing within a range of $2.48 to $7.48 per broadband connection per month. Based on 30 June 2013 connection volumes, Chorus anticipates this could imply a reduction in annual EBITDA in the range of $20 million to $100 million.

“While these regulatory headwinds remain, management is pleased with the principled approach the Crown is taking to the regulatory review”, said Ratcliffe. “We’re seeking a clearer, more aligned regulatory environment that delivers the right incentives to encourage the transition to our fibre network, and help New Zealand realise the productivity and economic benefits UFB and RBI can deliver."

Any changes to regulated pricing will likely be a strong influence on Chorus’ future revenues and industry willingness to migrate to fibre. Against the backdrop of these regulatory and capital expenditure challenges, Chorus’ current view is that its earnings outlook for FY14 is flat to low single digit percentage decline in EBITDA (relative to normalised FY13 EBITDA of $654 million).

The Chorus Board approved a fully imputed final dividend of 15.5 cents per share to be paid on 11 October 2013. The Dividend Reinvestment Plan will apply for eligible shareholders for this dividend.

Chorus' FY14 dividend guidance is unchanged. The Chorus Board will continue to monitor developments and expects to reassess Chorus’ optimal capital management settings as the outcomes from the Government’s regulatory framework review become clearer.

ENDS

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Results summary for the twelve months ending 30 June 2013:

• Chorus achieved EBITDA of $663 million.

• Gross capital expenditure was $681 million with 85%, or $579 million, spent on fibre related projects.

• Fixed line connections increased by 8,000 to total 1,784,000.

• Fibre connections increased by 90% to total 19,000.

• Continued growth in broadband with 64,000 new copper broadband connections.

Chorus Chief Executive, Mark Ratcliffe, and Chief Financial Officer, Andrew Carroll, will discuss the final results at a briefing in Wellington from 10.00am (NZ time). The webcast will be available at www.chorus.co.nz/webcast.

For further information:

Ian Bonnar Corporate Affairs Manager Phone: +64 9 358 6061 Mobile: +64 (27) 215 7564 Email: ian.bonnar@chorus.co.nz

Brett Jackson Investor Relations Manager Phone: +64 4 498 9271 Mobile: +64 (27) 488 7808 Email: brett.jackson@chorus.co.nz

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Chorus Full Year FY13
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26 August 2013, Wellington
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For 12 months ending
30 June 2013
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Disclaimer

Forward-Looking Statements

• This presentation may contain forward-looking statements regarding future events and the future financial per f ormance o f Ch orus, nc u i l di ng orwar f d l oo ki ng s t a t emen t s regar di ng n i d us t ry ren t d s, s t ra t eg es, cap i it a l expenditure, the construction of the UFB network, credit ratings and future financial and operational performance. These forward-looking statements are not guarantees or predictions of future performance, and involve known and unknown risks, uncertainties and other factors, many of which are beyond Chorus’ control, and which may cause actual results to differ materially from those expressed in the statements contained in this p resentation. No re p resentation , warrant y or undertakin g, ex p ress or im p lied , is made as to the fairness , accuracy or completeness of the information contained, referred to or reflected in this presentation, or any information provided orally or in writing in connection with it. Please read this presentation in the wider context of material previously published by Chorus and released through the NZX and ASX.

• Except as required by law or the NZX Main Board and ASX listing rules, Chorus is not under any obligation to u p date this p resentation at an y time after its release to y ou , whether as a result of new information , future events or otherwise.

Not an offer of securities

• None of the information contained in this presentation constitutes an offer of , or a proposal or an invitation to make an offer of, any security (and, in particular, does not constitute an offer of securities in the United States of America or to, or for the account or benefit of, U.S. persons (as defined in Regulation S under the Securities Act of 1933, as amended ). Distribution of this presentation (including an electronic copy) may be restricted by law and, if you come into possession of it, you should observe any such restrictions. These materials are provided for information purposes only.

Investment Advice

• This presentation does not constitute investment advice or a securities recommendation and has not taken into account any particular investor ’ s investment objectives or other circumstances. Investors are encouraged to make an independent assessment of Chorus.

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Mark Ratcliffe
Chorus CEO
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Agenda

M ar k R a t c liff e, CEO

• Full year performance overview

• Connection trends

• UFB and RBI programmes

Andrew Carroll , CFO

• Financial results

• Capex and UFB cost per premises passed, including FY14 guidance

• Dividend and Dividend Reinvestment Plan

Mark Ratcliffe , CEO

• UFB initiatives and regulatory framework

• FY14 Outlook

• Q&A

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OVERVIEW

A good operating result…

Net Profit After Tax of $171 million

> EBITDA of $663 million

Revenue of $1,057 million > T o t a l fi xe d li ne connec ti ons s t a bl e a t 1 784 000 , , > Fibre connections grew 90% to 19,000

> 6% increase in copper broadband connections

UFB and RBI programmes ahead of rollout target

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OVERVIEW

BUT regulatory headwinds and ca p ital ex p enditure demands remain

• Ongoing regulatory uncertainty as framework remains misaligned with Government ’ s UFB initiative

• Copper pricing critical to fund fibre rollout

• Fibre u take linked to re ulator rice settin s p g y p g

• 64% of revenue spent on capex; driven higher by UFB d ep oyment cost c l h a ll enges

• UFB production line taking shape, but not yet ‘steady state’

• Need to achieve further efficiencies in UFB rollout

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Fixed line connections stable

	Fixed line connections	Fixed line connections	Fixed line connections	30 June 2013	30 June 2012
	Basebandcoer			1521000	1585000
	pp			, ,	, ,
	UCLL			122,000	97,000
	SLU/SLES			6,000	12,000*
	N k d B i /E h d UBA d N k d VDSL a e as c n ance an a e			91 000 ,	50 000 ,
	Data services over copper			25,000	22,000**
	Fibre			19,000	10,000
> Connections increased by 8,000 Total fixed line connections 30 50	Total fixed line connections			1,784,000	1,776,000
including adjustments for: ▪ *7,000 lines double counted in SLU/SLES at 30 June 2012 ‐10 10
			Baseband SLU/SLES UCLL Naked Fibre Data
▪ **7,000 lines omitted from data services over copper at 30 June 2012 > 90% increase in fibre connections ‐50 ‐30			copper BUBA/EUBA services over copper
> 82% growth in ‘Naked’ connections ‐70

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Continuin broadband rowth g g

	Broadband connections	30 June 2013	30 June 2012
	BasicUBA	331000	619000
		,	,
	Naked Basic UBA	11,000	11,000
	Enhanced UBA	680,000	371,000
	Naked Enhanced UBA	78 000 ,	39 000 ,
	VDSL/Naked VDSL	4,000	NM
	Fibre(Bitstream 2, 3 and fibre subdivisions)	8,000	NM
	T l b db d i ota roa an connect ons	2 000 1,11 ,	0 0 000 1, 4 ,

• 6% growth in copper broadband connections

• copper lines with Chorus broadband increased from 60% to 63%

• now including some fibre connections in broadband total

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300
200
100
0
Basic UBA Enhanced UBA Naked VDSL/Naked Fibre
‐100 Enhanced UBA VDSL
‐200
‐300
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UFB build ahead of plan

> 18% of way through rollout

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Build complete for 153,000 premises (target 149 , 000)
 includes 38,000 priority premises: 685 schools
> 105,679 premises tested and paid at 30 June
205,500 end users now within reach of UFB
250,000
200,000
Premises passed with UFB
150 , 000 ( cumu ative l )
End users within reach of
100,000 UFB (cumulative)
50,000
0
FY12 FY13
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Rural Broadband rollout

	Rural Broadband rollout	Rural Broadband rollout	Rural Broadband rollout	Rural Broadband rollout	Rural Broadband rollout	Rural Broadband rollout	Rural Broadband rollout
	> 2,150km fibre laid; 779 schools complete
	> 51,200 lines within reach of better broadband Complete To be completed
		Complete		To be completed
		FY12	FY13	FY14	FY15	FY16
	Schools	473	306	163	67	1
	Hospitals	4	17	16
	Fib t RBI	13	40	50	39	12
	re o tower sites
	FTTN cabinets	192	320	306	222	179
	Fixed lines served	20,400	30,800	22,100	18,000	10,700
	Total $m	$59m	$106m

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Chorus fibre connections

> 19,000 fibre connections comprise:

• 44% Next Generation Access (includes UFB Bitstream 2 and 3 and e d uca ti on connec ti ons ) an d pre- UFB fib re su bdi v s on en i i d -users. Predominantly residential connections to 30 June.

• 36% Bandwidth Fibre and High Speed Network Services/Bitstream 4)

• 20% Direct Fibre (‘dark fibre’)

NGA: $37.50 to $175 per month

Direct Fibre: $355 per month

Bandwidth Fibre and HSNS: $380 t o $1 , 355 per mon th

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Chorus CFO
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Income statement

		FY13 $m
	Operatingrevenue	1,057
	Operatingexpenses	(394)
	Earnings before interest tax depreciation and , , amortisation(EBITDA)	663
	Depreciation and amortisation	(319)
	E i b f i d i arn ngs e ore nterest an ncome tax	344
	Net interest expense	(108)
	Net earnings before income tax	236
	Income tax expense	(65)
	Net earnings for theperiod	$171m
	> FY13 normalised EBITDA $654m > FY12 normalised, annualised EBITDA $646m

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FY13 Revenue

	Revenue	FY13	FY13	FY12
	category	$m	$m Normalised	$m Normalised, annualised	FY13 $m
	Basic copper	631	623	665
	Enhanced copper	215	215	152
	Fibre	60	60	48
	Value Added Network Services	37	37	31
	Field Services	85	85	81
	Infrastructure	17	17	24
	Other	12	11	12
	Total revenue	1,057	1,048	1,013

> Basic normalised for UCLL reduction and copper pricing insurance proceeds

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FY1 3 O eratin ex enses p g p

		FY13	FY12
		$m	$m Annualised
	Labour costs	67	53
	Provisioning	51	39
	Network maintenance	100	89
	Othernetworkcosts	37	38
	Electricity	13	19
	Rents, rates and property	24	24
	maintenance
	Consultants	6	9
	Insurance	4	5
	Other	40	40
	Ttlti	394	367
	oa operang expenses

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FY13 g r o ss ca pe x su mm ary

• Total capex of $681m

• consistent with H1 guidance of $640 - $690m and includes:

• $14m additional WIP for FY14 UFB premises

• $27m of capex brought forward and $9m of additional capex that was fully funded

	Fibrecapex $579m	Fibrecapex $579m	Fibrecapex $579m	Copper capex	69
	Fibrecapex	$579m
			10% 5%	Network sustain	33
	UFB communal	362
				Copper connections	21
	UFB connections & fibre layer 2	31		Copper layer 2	8
				Product	7
	Fibre products & systems	27
			Fibre capex 85%	Common capex	33
	Other fibre connections & growth	53		Information technology	16
				Bildi&ii	16
				ung engneerng services
	RBI	106
				~~/ PAGE~~ Other	~~16~~ 1

CPPP: within FY13 guidance

CPPP on track. H1 FY13 guidance was $2,900 to $3,200 for FY13

Year 1 Year 2

CPPP: $3 567, CPPP for UFB ‘ new build ’ premises: $3 048, Blended CPPP: $2,935 (includes existing Broadband Over Fibre premises and new subdivisions)

> FY14 CPPP guidance of $2,900 to $3,200

• consistent with CPPP trend chart (FY13 H1 result)

• continuing to see good progress in bringing costs down for majority of areas

• FY14 contains mix of build areas with ~ 10% of areas challenging

• expected to drive much higher than average costs (e.g. Wellington CBD and Auckland CBD, Ponsonby)

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Cost connected per premises (CPPC)

• Very early days with less than 1% of ultimate UFB footprint connected

• Programme view: $900 to $1,100 (real) average cost to connect standard residential premises; cost expected to be higher in early years of deployment

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Deployment Standard Install – Non Standard install
method Chorus funded up to
non standard distance
Lead-in New Up to 15m 15m – 200m
underground
Chorus
Existing Up to 100m 100m-200m
conduit or o p en $20m
trench
fund
Aerial 1 span Any additional spans
required
In- To ONT Up to 5m Over 5m
home
wiring
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• • Chorus currently installing ONT at point of highest data usage. Incremental in home wiring ~10% of standard install cost, based on initial data

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CPPC: H2 view from Chorus data

• Indicative sam p le of connections ( Januar y -June ) :

• mostly Auckland-based single dwelling units

• mix of connection types influences costs

• still developing training, processes with service companies

	▪early days for RSP interaction	▪early days for RSP interaction	▪early days for RSP interaction	▪early days for RSP interaction
	> $100k d d t d f Ch NSI f d t 31 M h e uc e rom orus un o arc % of installs: Standard % of installs: Non-standard
		% of installs: Standard	% of installs: Non-standard
	L d i ea - n	86%	14%
	In-home wiring	30%	70%
	Average cost	$1,600 (includes all non- standard in-home wiring)	$650 (incremental cost of external lead-in)
	Average time taken	16 hours	19 hours

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CPPC: Early UFB install volumes

• buildin workforce ca acit ahead of demand g p y

• efficiency gains challenging while order levels vary

• order volumes vary widely between UFB areas

• UFB installs averaging ~200 per week; compared to ~3,500 average for copper broadband

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Chorus UFB installs – weekly
(Jan-June)
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CPPC: next steps

• Continuing to build operational capability from 70 crews today

• Establish longer term commercial agreements for resourcing

• Develop demand forecasting to ensure efficient resourcing

• Implement systems and processes to increase productivity

• new deployment technologies

• new ordering system in development

• property pre qualification tools

• phased installation: scope > lead-in > in-home wiring

• separate workstream for large MDUs

• Improved industry and end-user communication to underpin process and experience

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FY14 capex guidance

		FY14 guidance $m	FY13 guidance $m
	Copper capex	70 – 75	70 – 75
	C ommon capex	60 65 -	30 35 -
	Fibre capex	530 – 550	540 – 590
	Gross capex	660 – 690	640 - 690

Note: The individual ranges presented above are not necessarily additive

• Copper capex : consistent with prior period

• Common capex : expected increase reflects separation and other IT spend as per H1 guidance

• Fibre capex : modest reduction expected relative to FY13 with RBI spend expected to halve and total communal spend down, partially offset by growth in connection capex and other fibre growth investment

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Net Debt / EBITDA

Debt increased relative to FY12, reflecting negative FCF throu h eriod. Levera e ratio ex ected to increase throu h g p g p g build period

• Key financial covenants require ratio less than 3.75 times

• ▪ Chorus policy not to materially exceed 3 . 5 times

• Calculation below reflects Standard & Poor’s treatment

		As at 30 June 2013	As at 30 June 2013
		$m
	Borrowings	1,872
	+PVofCFHdebtsecurities(senior)	15
	+ Net Finance leases	120
	+ Operatingleases		26
	Sub total	2,033
	- Cash	(80)
	Totalnetdebt	1953
		,
	Net debt/EBITDA	2.9 times

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Dividends and DRP

• FY13 final dividend of 15.5 cents per share, fully imputed

• Supp l e m e n ta r y d ivi de n d o f 2.7 353 ce n ts pe r s h a r e payab l e to n o n- resident shareholders

• Record date: 27 September 2013

• Payment date: 11 October 2013

• DRP applies for this dividend with 3% discount to the prevailing market price. Shareholders eligible to participate if resident in New Zealand or Australia

• FY14 dividend guidance is unchanged

• The Chorus Board will continue to monitor developments and expects t o reassess Ch orus op ’ ti ma cap l it a managemen l t se tti ngs as th e outcomes from the Government’s regulatory framework review become clearer

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Chorus CEO
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Moving to ‘steady state’ roll out

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FY14
Year 3 build
Year 1&2 build Year 4 build
Focus on
More lead time
implementing
Short or no lead between design,
new service
time between quote and start
company
design quote and enables ‘steady
agreements ,
build start state’ focus on
design and
programme
operational
efficiency
refinements
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Achieving UFB cost efficiencies

• Many initiatives complete or underway:

• organ sa i ti ona c l h anges

• service company contracts

• technology evolution

• local authority requirements

• deployment techniques

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Parallel Government and regulatory processes

Government reviews

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TSO review
Regulatory framework
review (first phase)
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• Telecommunications Service Obligation (TSO) requires Chorus to

• maintain lines/coverage and provide voice input service

• • submissions made 20 August 2013

• Government discussion document (7 August) puts forward three

• options linking copper pricing to entry level fibre prices between $37.50 - $42.50. Implies annual EBITDA reduction of $20m to $100m

• Submissions due 13 September. Subject to outcome, pricing may

• apply from November 2014 or 2015

Commerce Commission processes

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UBA pricing review
UCLL/UCLFS pricing
review
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• Commission continuing with UBA benchmarking process for

• copper broadband pricing

• final decision expected end October 2013

• current legislation requires pricing to apply from December 2014

• Chorus requested review of Commission’s December 2012

• reduction of UCLL/UCLFS copper line pricing

• discussion document expected 18 October 2013

• process scheduled to late 2015

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FY14: another challenging year

Earnings outlook for FY14

• flat to low single digit percentage decline in EBITDA, relative to normalised FY13 EBITDA of $ 654 million

• Regulatory framework : any changes to regulated pricing will i n fl uence Ch orus ’ f u t ure revenues an d fib re eman d d

• UFB rollout : strong focus on achieving ongoing cost efficiencies

• IT transformation : Chorus will be running two IT systems in parallel

• Industry : intensifying RSP focus on Chorus input costs and potential fixed to mobile substitution with 4G networks

• Competition : other UFB networks past 76,000 premises

• End-user demand : fi b r e p r oduct c h o i ce a ff ects ARP U; VD S L connection volumes may increase short term costs

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Focus on the future

• Our strategy is to grow connections and lead New Zealand to fibre

• New fibre plans to assist retail service roviders with roduct p p

• diversity

• VDSL re-priced to provide a stepping stone for fibre

• 5,000 people building and maintaining our network, and delivering wholesale services

• Chorus people engagement at 80%

• Now in FTSE4Good Index and shared award for waste minimisation

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Revenue categories

• core regulated products that are earlier technology or products with limited scope for further development e.g Baseband copper (UCLFS), Basic UBA, Naked UBA, UCLL, SLU, SLES

• products enhanced to deliver higher speed capability and better customer experience e.g. Enhanced UBA, VDSL2, Baseband IP, HSNS Lite Copper

• existing business fibre and new UFB services. Also includes UFB backhaul and direct, or ‘dark’, fibre

• Value Added • products and expertise for higher value or specialist services. Includes carrier network services which provide connectivity

• Network Services across backhaul links

• field force in provisioning, maintaining and installing copper or fibre products

• services that provide access to Chorus’ network assets, principally exchange co-location space

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Capex categories

Fibre capex categories

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UFB
communal
UFB
connections
& fibre layer 2
Fibre
products &
systems
Other fibre
connections &
growth
RBI
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• •cost of building UFB network along street to pass premises

• •UFB connections are subject to demand via RSPs •Layer 2 electronics •Fibre- related product and system development •Demand driven by greenfield & business fibre growth •Regional backhaul to enable RSP traffic •Fibre lifecycle investment •Layers 0, 1 - network duct and fibre; Layer 2 cabinet electronics

• •Expect total 5 year programme to cost around $280-295 million . Spend weighted to front end of programme

/ PAGE 33

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Copper capex categories

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----- Start of picture text -----

Network sustain
Copper
connections
Copper layer 2
Product fixed
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• •Upgrading or replacing plant (e.g. poles, cabinets, cables) where risk of failure or degraded service

• •Proactive network replacement more cost effective than reactive maintenance

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• •Demand for copper connections for residential / business customers (e . g . infill housing , new buildings)

• •Demand driven layer 2 investment in broadband capacity and growth. Expected to reduce slowly as customers migrate to fibre

• •Largely RSP driven investment in copper-related products

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/ PAGE 34

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Common capex categories

•Investment in future Chorus IT platforms, in part to meet June 2014 deadline to move from Telecom enterprise systems Information technology
•Spend for growth and plant replacement (e.g. power, Building and
i diti i ) t Ch h b ildi d i i a r con on ng a orus exc ange, u ng an eng neer ng
remote sites services
•Items such as office accommodation and equipment Other

/ PAGE 35

Contributions to capex

• •CFH funds up to $929 million over course of programme, at a rate of $1,118 per premise

• •Government grant funding of ~$236 million over 5 years to cover most layer 0 and 1 capex spend

• • La y e r 2 is not co v e r ed b y the g r ant •Grant is payable on completion of build work •Annual grant around 80 - 85% of annual RBI capex spend

• •Central & local government contribute to cost (often 100%) when requesting Chorus to relocate or rebuild existing network

/ PAGE 36

Chorus Limited

Chorus Limited	Chorus Limited	Chorus Limited	Chorus Limited
Results for announcement to the market
Reporting Period		Year ended 30 June 2013
Previous Reporting Period		Seven months ended 30 June 2012
	Amount (000s)		Percentage change
Revenue from ordinary activities	$1,057,000		Up 72.4%
Profit (loss) from ordinary activities after tax attributable to security holders.	$171,000		Up 67.6%
Net profit (loss) attributable to security holders.	$171,000		Up 67.6%
Interim/Final Dividend	Amount per security		Imputed amount per security
Final Dividend	15.5cps		6.028cps
Record Date	27 September 2013
Dividend Payment Date	11 October 2013
Comments:	Refer press release. This report should be read in conjunction with the audited financial statements for the year ended 30 June 2013. Note percentage movements above compare a 12 month period with a 7 month period and are therefore not meaningful.

PRELIMINARY ANNOUNCEMENT - FULL YEAR RESULTS For the year ended 30 June 2013

1.1 Reporting Period and Previous Reporting Period

The reporting period is the year ended 30 June 2013 and the comparative period is the seven month period ended 30 June 2012 in accordance with Listing Rule 10.4.2.

1.3 (a) Statement of Financial Performance

Refer to attachment.

1.3 (b) Statement of Financial Position

Refer to attachment.

1.3 (c) Statement of Cash Flows

Refer to attachment.

1.3 (d) Dividends

On 25 August 2013, the Board of Directors declared a fully imputed final dividend for the 2013 financial year of 15.5 cents per ordinary share. The total dividend will be $60,341,353.

For non-resident shareholders a supplementary dividend of 2.7353 cents per ordinary share will also be available in respect of the final dividend.

On 12 April 2013, a fully imputed interim dividend of 10.0 cents per share was paid with a total dividend recognised of $38,508,212. A supplementary dividend was also paid to non-resident shareholders of 1.7647 cents per share. Under the dividend re-investment plan $11,596,547 of the interim dividend payable was settled by the issue of 4,216,926 ordinary shares at $2.75 per ordinary share.

1.3 (e) Dividend Reinvestment Plan

A dividend reinvestment plan (the Plan) has been established which enables eligible shareholders to choose to have Chorus reinvest all or part of their dividend entitlements in additional Chorus shares (rather than receiving cash payments). There are no charges for participation in the Plan, no brokerage fees and additional shares are purchased at a discount to the prevailing market price. The Chorus Board has currently set this discount at 3% which is applied to the volume weighted average sale price for a share, calculated on all price setting trades of shares which take place through the NZX Main Board over a period of five Business Days commencing on the ex dividend date.

The last date for receipt of an election notice to participate in the Plan for the final dividend due for payment on 11 October 2013, is 5pm 27 September 2013.

1.3 (f) Statement of Movements in Equity

Refer to attachment.

• 1.3 (g)

Net tangible assets per security

There are $1.21 net tangible assets per security (30 June 2012: $0.90).

1.3(h) Control of Entities gained or lost during year

• N/A

1.3(i) Details of associates or joint ventures

• N/A

• 1.3 (j) Any other significant information

Refer to attachment and press release.

• 1.3 (k) Commentary on the results of the period

Refer to attachment and press release.

• 1.3 (l) Audit

This report is based on financial statements which have been audited. The auditors have made no qualifications to the financial statements.

1.3 (m) Subsequent events

Refer to attachment.

1.3 (n) Revaluation of Assets N/A

• 3.1

Accounting Standards

The financial statements have been prepared in accordance with generally accepted accounting practice in New Zealand and the Financial Reporting Act 1993. They comply with New Zealand equivalents to International Financial Reporting Standards (NZ IFRS) as appropriate for profit-oriented entities. They also comply with International Financial Reporting Standards.

Critical accounting policies

• 3.2 Refer to attachment.

• 3.3

Changes in accounting policies

There have been no changes in accounting policies, all policies have been consistently applied throughout the period.

3.4 Audit Report Refer to attachment.

APPENDIX 7 – NZSX Listing Rules NZSX Listing Rule 7.12.2. For rights, NZSX Listing Rules 7.10.9 and 7.10.10 For change to allotment, NZSX Listing Rule 7.12.1, a separate advice is required Notice of event affecting securities	APPENDIX 7 – NZSX Listing Rules NZSX Listing Rule 7.12.2. For rights, NZSX Listing Rules 7.10.9 and 7.10.10 For change to allotment, NZSX Listing Rule 7.12.1, a separate advice is required Notice of event affecting securities	APPENDIX 7 – NZSX Listing Rules NZSX Listing Rule 7.12.2. For rights, NZSX Listing Rules 7.10.9 and 7.10.10 For change to allotment, NZSX Listing Rule 7.12.1, a separate advice is required Notice of event affecting securities	APPENDIX 7 – NZSX Listing Rules NZSX Listing Rule 7.12.2. For rights, NZSX Listing Rules 7.10.9 and 7.10.10 For change to allotment, NZSX Listing Rule 7.12.1, a separate advice is required Notice of event affecting securities	APPENDIX 7 – NZSX Listing Rules NZSX Listing Rule 7.12.2. For rights, NZSX Listing Rules 7.10.9 and 7.10.10 For change to allotment, NZSX Listing Rule 7.12.1, a separate advice is required Notice of event affecting securities	APPENDIX 7 – NZSX Listing Rules NZSX Listing Rule 7.12.2. For rights, NZSX Listing Rules 7.10.9 and 7.10.10 For change to allotment, NZSX Listing Rule 7.12.1, a separate advice is required Notice of event affecting securities	APPENDIX 7 – NZSX Listing Rules NZSX Listing Rule 7.12.2. For rights, NZSX Listing Rules 7.10.9 and 7.10.10 For change to allotment, NZSX Listing Rule 7.12.1, a separate advice is required Notice of event affecting securities	APPENDIX 7 – NZSX Listing Rules NZSX Listing Rule 7.12.2. For rights, NZSX Listing Rules 7.10.9 and 7.10.10 For change to allotment, NZSX Listing Rule 7.12.1, a separate advice is required Notice of event affecting securities	APPENDIX 7 – NZSX Listing Rules NZSX Listing Rule 7.12.2. For rights, NZSX Listing Rules 7.10.9 and 7.10.10 For change to allotment, NZSX Listing Rule 7.12.1, a separate advice is required Notice of event affecting securities	APPENDIX 7 – NZSX Listing Rules NZSX Listing Rule 7.12.2. For rights, NZSX Listing Rules 7.10.9 and 7.10.10 For change to allotment, NZSX Listing Rule 7.12.1, a separate advice is required Notice of event affecting securities	APPENDIX 7 – NZSX Listing Rules NZSX Listing Rule 7.12.2. For rights, NZSX Listing Rules 7.10.9 and 7.10.10 For change to allotment, NZSX Listing Rule 7.12.1, a separate advice is required Notice of event affecting securities	APPENDIX 7 – NZSX Listing Rules NZSX Listing Rule 7.12.2. For rights, NZSX Listing Rules 7.10.9 and 7.10.10 For change to allotment, NZSX Listing Rule 7.12.1, a separate advice is required Notice of event affecting securities	APPENDIX 7 – NZSX Listing Rules NZSX Listing Rule 7.12.2. For rights, NZSX Listing Rules 7.10.9 and 7.10.10 For change to allotment, NZSX Listing Rule 7.12.1, a separate advice is required Notice of event affecting securities	APPENDIX 7 – NZSX Listing Rules NZSX Listing Rule 7.12.2. For rights, NZSX Listing Rules 7.10.9 and 7.10.10 For change to allotment, NZSX Listing Rule 7.12.1, a separate advice is required Notice of event affecting securities	APPENDIX 7 – NZSX Listing Rules NZSX Listing Rule 7.12.2. For rights, NZSX Listing Rules 7.10.9 and 7.10.10 For change to allotment, NZSX Listing Rule 7.12.1, a separate advice is required Notice of event affecting securities											EMAIL: announce@nzx.com	EMAIL: announce@nzx.com	EMAIL: announce@nzx.com	EMAIL: announce@nzx.com	EMAIL: announce@nzx.com	EMAIL: announce@nzx.com	EMAIL: announce@nzx.com	EMAIL: announce@nzx.com	EMAIL: announce@nzx.com
																								N (P d	umber of pages including this one lease provide any other relevan etails on additional pages) 1
Full name of Issuer Name of officer make this notice Contact phone number
		CHORUS LIMITED
		authori	sed to												Authority for e.g. Directors					event, ' resolution			Dat	e
							ANDREW CARROLL																		DIRECTORS' RESOLUTION
										Contact fax number
			(04)	498 9331											(04) 499 7070											25 8						2013
Nature of eve Tick as appropr		nt iate		Bonus Issue Rights Issue			If ticked, state whether: Capital Ca			Taxable ll Dividend					/ Non Taxable Conv If ticked, state F					ersion ull						Rights Issue Interest Renouncable
				non-renouncable			change						√		whether: Interim				Y	ear	√			Special				DRP Applies		√
EXISTING se Description of th class of securiti		curitie e es	s affe	cted by this						If more than one security is affected by the event, use a se										parate form			ISIN
				ORDINARY		SHARE																					NZCNUE0001S2
																											If		unknown, contact NZX
Details of se		curitie	s issu	ed pursuant t	o t	his event				If more than one class of security is to be iss										ued, use a			sepa ISIN	rate form			for e		ach class
Description of the class of securities Number of Securities to be issued following eve			nt
																	Minimum Entitlement										If R		unknown, contact NZX atio, e.g 1 for 2 for
Conversion, Maturity, Call Payable or Exercise Date Strike price per security for an Strike Price available.				y issue in lieu or	da												Treatment of Fractions provide an OR explanation of the ranking
						te Enter N/A if not applicable
M	onies Associated with			Event In dollars	an	Dividen d cents				d payable, Call payable, Exercise price, Convers Source of Payment							ion price, Redemption price						, Ap	plication			mone		y.
																	RETAINED												EARNINGS
	Amount per security (does not include any ex			cluded income)	$0.155
	Excluded income per security (only applicable to listed PIEs)
	Currency Total monies				NZD											Supplementary Amount per security dividend in dollars and cents details - NZSX Listing Rule 7.12.7 Date Payable													$0.027353
					$60,341,353																								11 October, 2013
T In is	axation the case of a taxable bonus sue state strike price															Amountper Security in Dollars and cents to six deci													malplaces
												Resident Withholding Tax				Imputation Credits (Give details) $0.010589
							$									$0.010589													$0.060278
												Foreign Withholding Tax				FWP Credits (Give details) $
																$

Timing (Refer Appendix 8 in the NZSX Listing Rules)

Record Date 5pm

For calculation of entitlements -

Notice Date

Entitlement letters, call notices, conversion notices mailed

OFFICE USE ONLY

Ex Date: Commence Quoting Rights: Cease Quoting Rights 5pm: Commence Quoting New Securities: Cease Quoting Old Security 5pm:

Application Date Also, Call Payable, Dividend / 27 September, 2013 Interest Payable, Exercise Date,Conversion Date. In the case 11 October, 2013 of applications this must be the last business day of the week

Allotment Date

For the issue of new securities Must be within 5 business days of application closing date.

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Security Code:

Security Code: