Menu Report 2019.Report Integrated Limited. Energy Meridian 2 Meridian Annual Report 2019 Introduction Menu The The to Make Power Power a Difference. a all be proud to be part of. part to be proud all be weto create a can world work together with them to we want And future. for our hope there is toWe want know them our shared environment. and world about their people to feel positive We want way forward. only the it’s We believe world. and healthier afairer for energy clean about We’re serious 04 What we do

07 How we create value

12 Setting our course

13 Directors’ statement

21 Chair and CEO ­­—­– The difference we made this year

24 What drives us

29 Our climate action plan

34 Helping our customers make a difference now

35 The difference we made this year

50 A different tomorrow

57 Making the most of powerful forces

58 Our elements of success

72 Our powerful future

75 Rewarding strong performance

85 Further disclosures

102 Financial statements

147 Financial auditor’s report

151 GRI Standards assurance report

Menu 153 Global Reporting Initiative (GRI) Content index

157 Directory This is our business Menu

5 Offices 1 Office 1 Office 840 Employees 80 Employees 160 Employees NZ (100 at our power stations) AU (10 at our power stations) FLUX (3 in the UK)

Customers

What we do 302K 132K 4 Customer connections Customer connections (incl gas) Clients (Software)

~15% national retail volume1 <1% National Energy Market retail volume

Retailing as: Retailing as: Licensing the Flux platform Meridian Energy Powershop, and providing energy services Powershop to DC Power and Kogan Energy and the Powershop brand

Generation

Meridian Annual Report 2019 5 7 2 3

~30% national electricity generation

4 1 Excludes Tiwai Point Aluminium Smelter These are our customers Menu NZ AU FLUX

Meridian Powershop NZ Powershop Australia Under licence

The Powershop brand and Flux platform operate under licence to the What we do 228K 74K 110K large UK electricity retailer nPower Customer connections: Customer connections: Electricity customer connections residential residential business business corporate agri-business 22K 75K Carbon-neutral gas customer connections nPower customer connections

Now over 300,000 customer connections Transitioning to the Flux platform All on the Flux platform All on the Flux platform on the Flux platform in total

NZAS Now in South Australia

A large financial contract with Powershop can now be found in New Zealand Aluminium Smelter four Australian states, giving us (NZAS) at Tiwai Point, equivalent to broad coverage in Australia around 38% of Meridian’s generation Meridian Annual Report 2019 5 This is what we generate Menu NZ AU FLUX

New Zealand’s largest Generating <1% of the

What we do electricity generator National Energy Market

~30% national electricity generation Enough electricity for about 167k homes yearly 1.7M 50K

Waitaki and Equivalent to the Hume Equivalent to the Manapōuri power needs of Burrinjuck power needs of generate around around 1.7 million Keepit around 50,000 50% of NZ’s New Zealand Australian total hydro homes yearly homes yearly

Meridian Annual Report 2019 200K 116K

White Hill Equivalent to the power Mt Millar Equivalent to the West Wind needs of around Mt Mercer power needs of Mill Creek 200,000 New Zealand around 116,000 Te Āpiti homes yearly Australian

6 Te Uku homes yearly 7 Meridian Annual Report 2019 How we create value Menu directly to customers to directly the wholesale market to sell purchase back electricity from market wholesale the electricity we sell into the generate that farms wind and We own hydro power stations How we create value . We also .

8 Meridian Annual Report 2019 How we create value Menu 1 our earnings across the year. out smooth they and volatility price around risks commercial our control help also contracts, forward and range of other financial instruments variations. These contracts, plus a to price exposure their to limit market electricity spot the from directly buy that to businesses contracts financial offer We also pricing. fixed offering by customers supply physical for our risk this we manage term, medium to short the In availability. gas as well as by rainfall, affected significantly be can Prices time. in any point are able to generate at electricity depending on what technologies Vertical integration vary significantly in New Zealand Wholesale market prices can

2 the price stabilises again. stabilises the price the supply-demand balance and restores plant new in investment generation by made possible the new power The stations. additional in for investment case business the up, improving goes electricity demand, the price for the available rising to meet generation enough not is there If up. track generally will price wholesale the over time, if demand for is rising electricity shut down in response. Alternatively, economic generation plant may over older, supply persists, less If the down. goes price wholesale too much available, electricity the is there If demand. and of supply 1 is affected by the dynamics dynamics by the affected is The wholesale market price 2 3 decreasing demand. of emissions-intensive industries, change could lead to disruption to climate respond required to Equally,boilers. the transition through vehicles electric and electric could increase consumption electricity because climate action regulations supply, and to increase demand, reduce or to increase potential the demand. Climate change also has smelter, for example, would reduce aluminium Point Tiwai the closing supply-demand balance. NZAS the affect can that factors other of anumber are There 3 4 long-term success. benefit consumers and enable our markets with these characteristics We believe efficient. and fair open, are in we operate markets the ensure conversations on public to policy help to We contribute customers. to our and competitors to our fair been has behaviour our if decide also can New Zealand, the ElectricityAuthority in regulator main the As regulators. and Government by the and market, price are controlled by the electricity our and determine electricity a sell we can which in ways The 4

9 Meridian Annual Report 2019 How we create value Menu 1 media and digital channels. channels. digital and media traditional through by marketing competitors with strong brands and differentiate ourselves from our to we need retailers, many so are there Because Australia. in Powershop and Zealand, New in brands: Meridian and Powershop We retail have three companies. Great customer experience customer Great households and other electricity businesses, are customers Our 1 and engaging way. and engaging irreverent a fun, in and cost usage customers control over their energy offers it because attractive is Powershopaction. New Zealand renewable and climate electricity to commitment Group by our This is demonstrated sustainability. in aleader as positioning of our to customers because attractive are Meridian and Powershop Australia 2 2 and governance functions. billing marketing, and ICT, sales and facilities physical include They offices. corporate of many to those similar retail operations’ requirements are lines and metering companies. Our are managed by national and local use its meter and electricity distribute to used assets physical the because have verysupply short chains brands retailing energy our All 3 in the UK. in the Powershop brand under licence the and platform software its markets also Flux effectively. and smoothly interact can they ensure to like Flux platforms rely on Those teams and our customers through our frontline teams. service providing excellent experiences by loyalty customers’ our earning to keep we need Zealand New and brands profitably in Australia our to operate us for order In 3 10 Meridian Annual Report 2019 How we create value Menu 1 management providers. facilities’ and ICT including providers suppliers, and service specialist parts general engineering consumable and of amix as well as assets, generation our maintain and to build needed us with and the components parts local and global suppliers to provide parties) who contract with a range of by third maintained also farms wind of our (with some staff Meridian by maintained are assets Our employees, suppliers and contractors. skilled by highly supported systems, ICT and assets of our quality the on Responsible generation safely and reliably is dependent electricity to generate ability Our 1

2 issues suchissues as water, biodiversity, and consultation on important through engagement, employment and areas in which we operate commitment to the communities making a long-term and deep communities. We achieve this by local governmentusers, and to water iwi Tahu other and Ngāi of stakeholders, ranging from trust the maintain and to win To we need this do consents. resource andsecuring maintaining energy, we are dependent on our to assets generate renewable implications around how we use we how use around implications thereBecause are environmental 2 for Aotearoa’s power needs. of renewable electricity available amount the and reduce profitability our affect materially would which we the way do, assets our operate not we could government, local and stakeholder groups, communities people, of our buy-in the Without and environmental management. prosperity and long-term planning environmental local impact, 3 3 4 faith in our performance. performance. our in faith continued having investors on our great place to work. great place a creating we in are successful how and and behaviours, values purpose, our in grounded brand employer by astrong supported is and activities, our business all in competitiveness our central to central is staff right retain the and to attract ability Our company we are dependent listed apublicly as Finally, 4 11 Meridian Annual Report 2019 How we create value Menu 1 at any given point in time. time. in point at any given perceives our company to be worth market the what is of our shares value The of work. programme ongoing our to support business into our reinvested then is of that ayear. werevenue in make Aportion conditions, determines how much trading managing in skill our with residential customers, combined and business our from we receive margin the plus market, wholesale Reliable returns Reliable electricity weelectricity generate on the the from we make money The

1 2 funding arrangements with us. long-term in investors have other also share price is given or implied. We future or current of our guarantee No dip. prices when shares more more valuable and potentially buy are they when shares our to sell them allow which price, share our every year; and from the changes in the dividend payments we make from ways: two in us in investments their from money share),a 51% earn the Government (which holds Our shareholders, including

integrated report. integrated (particularly water) – hence this resources natural and of stakeholders, relationships we have with a variety the people, our platforms, technology assets, physical reserves, financial our – we how up create make value that management of all the components our around story compelling and astrong them to tell able to be us want investors And markets. the of own understanding their and them, with we share the information own knowledge, their on based to invest decide our investors All 2 Setting Menu our course Directors’ statement Directors’ Meridian Annual Report 2019 12 Directors’ statement Menu We are one of the largest companies on the New Zealand Stock Exchange. Directors’ statement Directors’

Focused on governance This year, we became New Zealand’s Crown through reports like this, 2 For FY19 the Meridian Group included the parent company Meridian Energy Limited and all its The Meridian Group2 is listed largest company on the NZX, with our disclosures to the markets, operational subsidiaries (note the Group structure in the financial statements). Throughout the report, on both the New Zealand Stock a total market capitalisation in excess and meetings and briefings with non-financial data and commentary pertain to the Exchange (NZX) and the Australian of $12 billion. The New Zealand a range of groups and officials. Meridian Group as much as possible. References to ‘Meridian’ (the parent company), ‘Powershop Stock Exchange (ASX), and we are Government is our majority share- New Zealand’, ‘Powershop Australia’ and ‘Flux’ are used when only specific parts of the Group substantial in scale in a New Zealand holder, and we are precluded by The Board has a policy of rotating are being discussed (‘Powershop Australia’ refers to our retailing operations in Australia; the generation context, with operating revenue legislation from having any other the location of the annual shareholder activities in Australia are included in discussions of this year of $3,491 million, EBITDAF3 significant shareholders (i.e. more meeting between Auckland, Meridian’s generation activities). In both the data and commentary. Dam Safety Intelligence is included in of $838 million and net assets of than 10% holding). Wellington and Christchurch, and the parent company and Flux-UK Limited employees are included in ‘Flux’, unless specifically mentioned. $5,457 million, although we have a our 2019 meeting will be held in 3 Earnings before interest, tax, depreciation, modestly sized workforce of around As a business with a significant Christchurch. We’ll provide you with amortisation and changes in fair value of hedges and other significant items. 1,080 people4 who are directly retail shareholder base, Meridian is more information closer to the time 4 See page 101 for a detailed breakdown of our workforce. employed by or contracted to us, constantly looking for ways to be in the Notice of Meeting. If you Meridian Annual Report 2019 and third parties who provide us as accessible and open as possible. can’t attend, you’ll find a link to a live with ICT, facilities’ management We engage with investors and the webcast on the Meridian website. and meter-reading services. 13 14 Meridian Annual Report 2019 Directors’ statement Menu be found on page 109, and has 109, has and page on be found can of which details standards, accordance with appropriate hasreport been prepared in this in information financial The and non-financial information. financial our of both seek assurance to is policy our accordingly, and with preparing and presenting it and has entrusted Management report integrated of this integrity and quality the to ensure processes The Board has established shareholder returns. toour continue ability delivering iwi and the environment supports communities, local its people, its Meridian takes care of its customers, which way in the that view Board’s the It reflects Framework. Reporting Council’sReporting Integrated using the International Integrated prepared been has and for FY19 and environmental performance of our financial, economic, social This integrated report is a review report this to Welcome

Governance Statement View Corporate this report. detailed where relevant throughout also are them we manage how and risks of the remainder The this report. throughout discussed are they and Corporate Governance Statement FY19 the in found be can key risks risk management. A list of Meridian’s appetite for risk and its approach to The Board sets Meridian’s overall Assurance on page Report 151). (see the Independent Accountant’s Limited been assured by Deloitte also has and Standards) (the GRI Reporting Standards Sustainability Global Reporting Initiative’s of the Core requirements the prepared in accordance with report has been this in information on page 147). The non-financial (see the Independent Auditor’s Report on behalf of the Auditor-General been audited by Limited Deloitte

continually improve our disclosures. to processes assurance our and these from We feedback use impacts. to manage their environmental companies, cities, states and regions for investors, system disclosure profit charity that runs a global anot-for- is CDP (CDP). The Project Disclosure Carbon to the responded Dow Index Jones Sustainability and into the for inclusion assessed In addition, we have again been Inventory Report View Greenhouse Gas provided in this report. is summary and a Limited by Deloitte Inventory has Report been assured Gas Greenhouse Group Meridian Our Report TCFD View included throughout this report. are matters (TCFD). These Disclosures Financial Climate-related Force for Task the from guidance on based ofopportunities climate change, and risks the on specifically report This year we have prepared a

15 Meridian Annual Report 2019 Directors’ statement Menu Goals (SDGs), electricity-sector- Nations Development Sustainable United the Standards, GRI the from generated is of topics list abroad First, changes in emphasis. or trends to reflect adjusting prioritiesour require sustainability also allows us to re-evaluate if the reporting year. This process toimportant our stakeholders in been has to what according them and priorities, tailor sustainability of our terms in we’ve made reporting that reflect the decisions topicsManagement select for world. make in the to we look positive change the to contribute collectively and our interdependencies relate all how on responsibly and objective is to openly report our to report, what deciding In Focusing on what’s important in this report. in this significant enough to be included the but are business, not considered relevant and are actively managed by considered are topics of other A variety topics). of reported list for afull 153 page on Index GRI reporting (see our twofirst categories prioritised for low, the and with medium high, we rely). which Topics rated are upon resources the on impacts their words other (in to create value ability our natural environment, and on impacts onimpact our stakeholders and the of significance and of scale terms in relevance to our importance business, topics is evaluated by Management for of list this workshops, internal Using priorities. on their them to canvass interactions with our stakeholders other sources. We also use regular risk register, Board discussions and Meridian’s the media, in up come have that topics issues, specific 16 Meridian Annual Report 2019 Directors’ statement Menu Shareholder Meeting in October, 2019 Annual the after adirector as down step will who Devine, Mary The Board also bids farewell to and energy. his insights to forward look and role new to his the energy sector. We welcome Mark director with years of involvement in in 2017 and is an experienced company was appointed to the Meridian Board 2019. Mark October from of Chair VerbiestMark will take over the role retire this year. will 2011, since Chair our and 2008 Chris Moller, a Board member from (Ngāi Tahu’s governing body). Tahuof Te Rūnanga o Ngāi aformer ChiefGoodall, Executive is currently undertaken by Anake always be considered. This role that a position on the Board should is such an stakeholder important are, assets of Meridian’s most where Island South of the majority over the who have mana whenua (authority) Tahu, Ngāi that view a collective does not require it, this Board has While the company’s constitution directors are independent directors. website at meridianenergy.co.nz. All our on Team available are Executive the and directors our of Biographies experience. and skills of arange with recruits Board members Meridian Our structure Board

on 1 January 2020. 1January on will commence her role as a Director Shareholders’ Meeting and, if elected, Annual the at election for her approval will also seek formal shareholder at that meeting. Sanatkumar Nagaja shareholder approval for their election formal seek retire and will both and Shareholders’ Meeting in October 2019 directors prior to Meridian’s Annual and Julia Hoare will commence as Meridian Board. Michelle Henderson the join will directors new three In August 2019, Meridian announced adirector. was he the decade during contribution We for Steve’s grateful are significant Committee.Safety and Sustainability the Chaired and and safety health of and engineering, sustainability for Meridian, fields particularly the in Steve Reindler. Steve had a passion In August 2018, the Board farewelled us. with time her during and her relentless customer focus energytoday. for her her We thank we have that culture collaborative strong the building in instrumental been has and Board to the brand and of marketing knowledge deep brought has Mary Committee. Remuneration and Human Resources of our Chair as time including years, for nine adirector been has Mary Hallenstein Glasson Holdings Limited. Director, Managing role of the up taken has she that March in following the announcement Governance Statement View Corporate Corporate Governance Statement. FY19 our in those principles recommendations and applied those wehow have fulfilled You about read ASX. the can Financial Markets Authority and New Zealand of the principles the corporate governance adopted ownership)also and has Crown 51% of our aresult is (Takeover3.6 Protocol), which (other than Recommendation Corporate Governance Code NZX of the recommendations Meridian complies with all the reputation and brand). building the company’s and customers, satisfying environmental performance, new enhancing assets, engagement, investing in to water, building employee access retaining as (such value various long-term drivers of how they’re managing the and business the to take wish they which in direction the on and challenge Management, thoughts, their to share Board regular meetings allow our and days Strategy activities. companies’ in overseeing role important have an Boards Board our of role The

Chair Elect Verbiest Mark guidance he has provided. for the and service his him for to take to this opportunity thank year, we wish retire this and He will return. shareholder of total in terms Australia and Zealand New in sector successful company in the electricity most the and listed company become New Zealand’s largest the mixed-ownership-model to through evolved the company as helm the at hand astrong been has He 2011. since Chair our been has and 2008 in board the joined Chris Chair. of role to the has brought and experience that Chris Moller considerable and skilful leadership the to acknowledge like would Meridian of people and Board The you Thank 17 Meridian Annual Report 2019 Directors’ statement Menu Director Anake Goodall Director DevineMary Chair Chris Moller Director Dawson Jan Director Verbiest Mark Deputy Chair Deputy Peter Wilson Director Cairns Mark View Director Biographies and experience. with arange of skills recruits Board members Meridian important. is Diversity of perspective Board Our 18 Meridian Annual Report 2019 Directors’ statement Menu challenges they may face. and how to handle the and issues expected are that behaviours the on to staff guidance Code provides to honour. The agree employees all of which content the Conduct, of aCode including operations, incorporate in the company’s to and to adhere are required range of policies that Management The Board has approved a wide 77. page on people is our to remunerating approach Our efforts. their for appropriately rewarded and supported well are and strategy company’s the with essential that they are aligned it’s so shareholders, our for value to create hard work They resource. important most our are who people, Meridian’s for if it weren’t achievable be would processes or policies goals, strategic our of None culture and people of role The

accounting and reporting. related to risk management, financial in matters responsibilities in its fulfilling theand Board Risk Committee assists Audit Our to work. place great be a to efforts our oversees Committee Remuneration and Human Resources Waitaki reconsenting process. Our toparticularly as it pertains the progress as a responsible generator, our oversees awhole as Board The Action). (Climate SDG13 Energy) and on SDG7 (Affordable and Clean has responsibility for our progress Committee Safety and Sustainability The on. to focus we have chosen SDGs UN the on progress oversee The Board and Committees also day-to-day operations. of informed well Board keep the also They direction. and strategy overall company’s feed into the and success, business for our we depend which on of resources spectrum the cover awhole, as Board the and Committees, The advice. and insights offer experts and havingissues subject matter specific on detail providing by the support Board Committees Committees of roles The

Significant risks around resources resources Natural groups other — All — Our people Relationships and reputation safety and — Health expertise and people — Our Human capital Technology assets) and cash (our Financial and manufactured capital Resources Audit and Risk Committee Committee Safety and Sustainability Safety and Committee Sustainability and full Board Committee Resources Human and Remuneration Committee Safety and Sustainability Committee Resources Human and Remuneration Full Board Audit and Risk Committee oversight Board 19 Meridian Annual Report 2019 Directors’ statement Menu result achieved this year. is proud of the record Executive TeamOur Julian Smith Guy Waipara Mike Roan Mike Jason Stein Nic Kennedy Neal Barclay Ed McManus Tania Palmer

Chief Customer Officer General Manager, Generation and Natural Resources Chief Executive Powershop Australia Limited Pty Chief Executive, Meridian Energy Australia Limited, Pty Chief Financial Officer Chief People Officer General Counsel and Company Secretary Limited Federation Flux Executive, Chief

20 Meridian Annual Report 2019 Directors’ statement Menu Chris Moller left us to pursueother opportunities Paul Chambers, who replaced He functions. finance, strategyICT and responsible for ourOfficer, Financial Chief Wholesale, appointed was Manager of General role the in was who Roan, Mike of April, end At the and banking industries. the energy in roles previous her from safety and health and team in leadership development to the skills further Tania adds business. to the contribution with us and we thank her for her was she years six the in Meridian at function resources human the a significant role in developing played Jacqui 2018. October in General Human Manager Resources Cleland, of Jacqui resignation the as Chief People Officer, following 2019, joined June In Tania Palmer year. the half of Team second the in Executive There were changes in the Team Executive Our

Peter Wilson endeavours. next their in success both them wish and business to our for their enthusiasm and contribution down later this year. We thank them to step intentions their have signalled Meridian Australia, Ed McManus, of Executive Chief our and Smith, Julian Officer, Customer Chief Our Executive team. valuable addition to the Meridian a is She technology. and business in board and has a strong background Flux of the Chair previously was Nic him for his many achievements. We thank first. customer the putting by always sector to the contribution renegade, made a significant industry an as regarded Ari, Flux. and Zealand New Powershop both of development the leading Group, after 20 years with the Meridian resigned May. in Ari Sargent of Ari resignation the following Executive Chief as Flux joined Kennedy Nic future. the all the best for massive contribution him and wish company. We thank Paul for his after nearly 10 years with the [email protected] atManager contacting the InvestorRelations via Meridian’s website or by directly comment or on this report information request questions, to ask free feel If you are a shareholder, please information Further 21 Meridian Annual Report 2019 Chair and CEO Report Menu our customers and shareholders. shareholders. and our customers commitments and the needs of social our with align ways that in for afairer and healthier world purpose. We strive for clean energy advancement and the of our intentions commercial pursued our we’ve year This successfully we made this year —– Chair and CEO Report The difference difference The

22 Meridian Annual Report 2019 Chair and CEO Report Menu Chair Chris Moller Chief Executive Neal Barclay 23 Meridian Annual Report 2019 Chair and CEO Report Menu financial results. by this year’s outstanding and consistent, is purposeful, responsible levels all at making decision where These factors point to an organisation among our workforce. diversity, inclusion and engagement value and of opportunities greater the energy. We’vefuel leveraged by fossil- dominated a country a carbon-neutral alternative in difference in Australia, offering areal We’ve made world. warmer degree a1.5 with line in emissions our to reduce committing and now emissions carbon our offsetting – action climate taken years. We’ve vulnerable Kiwi households for discounts which have disadvantaged removingfirst, prompt payment We’ve fairness put point. proof is a year this we’ve achieved Everything as a business. we action every and guide principles define these assets, Underpinned by our world class advocacy as leader. a sustainability and customers, and our staunch people our for care genuine our way we work, the we hold, values driven by principles: the unique Our commercial performance is drivenSuccess by principles profitable – as demonstrated

take

24 Meridian Annual Report 2019 Chair and CEO Report Menu • • • markets. competitive of the benefits Champion strategy: Our Supporting wholesale liquidity.Supporting Australia and Zealand New in Leadership in sustainability Competing vigorously What drives us Clean energy for fairerClean a and healthier world. purpose: Our Great place to work. leadership. Sustainability Putting customers first. Our values:

• • • • • retail. New Zealand Grow loved energy brands. loved energy New Zealand’s most Deployment of customer experience Relentless focus on Faster adaptation cost Reduced Simpler systems

Our behaviours: Be gutsy.Be agood human.Be in theBe waka. legacy. our generation protect and growth retail Support energy pipeline. cost), best-placedrenewable (safety, and efficiency portfolio a best-in-class generation renewable aspiration, maintaining 100% of hydro to New Zealand’s Demonstrating the contribution

SDG7  SDG13 Climate Action. goals: key sustainability Our

Clean Energy.Clean Affordable and • • earnings. Grow overseas Flux global growth. global Flux vertically integrated position our in Australia, maintaining Grow customer numbers

25 Meridian Annual Report 2019 Chair and CEO Report Menu 36% to around 132,000. to around 36% by have increased Australia in connections Our customer customer connections. 300,000 than by 4%to more Zealand New in base customer our increasing by trends industry We’ve defied in customers increase Significant environment. and the to people difference making a wind, water and sun, while actively but of nothing energy, made through generating 100% renewable action climate taking for: we stand of what articulation and bolder acrisper market the to present we wanted change, the Through we how perform. and we behave how for, we value, what we stand what through mark our to make intention our of sign most visible the perhaps is year this financial of end the towards brands, retail three our of one identity, visual and brand Meridian our of refresh The identity new A bold Putting first customers 1

of the big five retailers. five big the of industry, Meridian the highest in the highest the Zealand New and Meridian brands — Powershop in NPS in market-leading performance our we maintained year This service customer Outstanding 5 of our Meridian customers to the customers Meridian of our of thousands migration successful The Awards. Energy 2019 Deloitte the Year of the at Retailer Energy were awarded Consumer NZ Powershop New Zealand who of proud very We were also based generation. operate predominantly coal- by much larger companies that challenger in a market dominated a as for itself name areal making brand Australia Powershop our to see markets. It’s encouraging, for example, to grow both in continue Australia, in Powershop and New Zealand in Powershop brands, other Our of customer satisfaction. of customer ameasure is (NPS) Score Promoter Net 2 5 for both the Powershop Powershop both the for

this year. customer connections Meridian 50,000 to migrate another We aim globally. platform Flux oncustomer our connections over 300,000 now are There grow to Flux continues work at several of our generation generation of our several at work maintenanceundertook important healthier world’. This year we and for afairer energy of ‘Clean purpose our of advancing part is all protecting our generation legacy and growth retail Supporting carbon-neutral reticulated gas. product offering to include certified- our expand and move states into new Australia, where we have been able to competitive retail particularly offers, in of number high the given significant is Australia and both New Zealand in markedly base customer our growing customer experiences. Our success in well on course to deliver exceptional we are means platform Flux new 3

final Meridian Board approval. to the subject beginning of 2020, at of Napier the north to project our of start construction we can that is hope Our market. Zealand New the into capacity wind greater to inject larger, more efficient wind turbines for to allow amended them to get consents for new generationprojects existing three our on working actively we’re time, same Atstrategy. the rolling generation asset management sites in accordance with our 20-year

26 Meridian Annual Report 2019 Chair and CEO Report Menu Amp tool). Amp tool). (we the Culture use participants survey global 25% top ofby all the overall engagement score achieved 78% to the us close positions and range of external benchmarks, a against positive is result This 2018. in 78% from point just one engagement score down of 77% overall our with overat 90%, high extremely to be continued participation units, business rates individual in downward trends and of upward amix was there While year. challenging times, at and, busy a through us with people our take to we have continued that showing steady, are year for the results Overall our employee engagement May. of weeks two first the during engagement survey took place Our annual Meridian Group Engagement remains steady mental wellbeing. mental wellbeing. their to improving open more are and it is encouraging that people today, society in under are of us most stresses of the asign this runsessions by Mike. We consider the following support for further out reaching staff of our athird with received well been has King, Mike Healthy Minds Programme, featuring Our wellbeing. and health mental on to focus safety, we continue In addition to our people’s physical incidents. these behind cause root a is there whether understand to approach our at look a fresh We taking currently are processes. culturally, or in our systems and taken a step backwards either hasn’t business the that confident with this level of performance, we’re we’re happy not Whilst significant. were incidents of these Three work. off time requiring also year, this July in sites our of one on injury an sustained contractor Another work. off time required that three contractors received injuries and members staff five however year, this sites our of any at injured seriously were public of members No safety and Health

27 Meridian Annual Report 2019 Chair and CEO Report Menu organisation. In addition to our for our we create value that others for value creating through is it that we know and society New Zealand plays an essential role within year, business our last we noted As society. equitable and a more planet the on impact human meaningful contribution to both We a to make want over time. businesses successful most the be that sustainable will businesses view the to hold We continue business Sustainable over time. businesses successful most the will be businesses Sustainable lower rates. rates. lower instead, replacing it with new and, bill to their pay struggle most who those impacts which Discounts Payment Prompt using to stop retailer energy major first the we became protecting vulnerable customers, to keeping energy affordable and In alignment with our commitment Payment Discount Prompt Clean Energy. Action and SDG7 Affordable and SDG13 Climate UN with efforts our focused aligning on sustainability, generator, we have again this year a responsible being and to work place agreat creating on efforts will actually mean. of 1.5 warming global of what assessment (IPCC) Change Climate new Intergovernmental Panel on a and action, of climate name the in strike on go students school seen has year –this are they as on go can’t things that of us many There’s a deepening sense amongst action climate for need A real

o C Menu

Our most significant climate action is Energy Awards where we won the But we wanted to go a step further, certainly the work of the Taskforce on our commitment to 100% renewable Low Carbon Future Award. so we’ve also set a meaningful and Climate-related Financial Disclosures energy generation, both here and in significant reduction target of “Half (TCFD) will see the calls for voluntary Australia. This is our commitment in At Meridian, we’re motivated to be by 2030” — halving our operational climate-related financial disclosures our own business, but also a long- part of the solution. At the same greenhouse gas emissions across become louder, especially for publicly term aspiration for the electricity time we recognise that change the Group — which will reduce the traded companies. systems we are a part of. must be managed justly. Our people, amount we offset in future years. our customers, our investors and This won’t be easy given our We are very proud to be the As we work together as an industry communities are all groups who ambitious plans for growth in our first company in Aotearoa to to reach that goal, there is a must be supported through the Australian business and with Flux publish a report using the TCFD’s valuable and necessary contribution upcoming transition. globally, but we know it is the right recommendations and we look renewable electricity can make to thing to do, and it brings us into forward to other companies analysing the decarbonisation of the rest of We will halve our operational alignment with a 1.5 degree and disclosing their risks and the economy – in both transport emissions by 2030. warmer world. opportunities, so investors can make and industrial heat. Our ambition As of the release of this report, we are sound decisions in light of the climate is to accelerate the pace of this now net Zero Carbon for our Group An increasing appetite to decarbonise challenge we are facing globally. Chair and CEO Report transition, for example, by supporting operational emissions through the the economy will challenge businesses the uptake of electric vehicles, purchase of certified carbon offsets. to think more deeply about how providing leadership for other And we’ve started work on our forestry they mitigate their environmental businesses to do the same. Our efforts project to grow our own carbon offsets impacts, both directly and within were recognised at the 2019 Deloitte in the medium- to long-term. their dispersed supply chains. Almost

Meridian Group greenhouse gas emissions FY19

7 tCO2e Emissions Offsets Balance after offsetting

Scope 1 1,099 1,099 –

Scope 2 2,318 2,318 –

Scope 3 operational 33,566 33,566 –

Total Group operational emissions 36,983 36,983 – Meridian Annual Report 2019 Scope 3 energy purchased and onsold6 6 Emissions from our electricity purchased and on sold calculated using market-based methodologies. In New Zealand we use the annual netting off New Zealand electricity – – methodology. In Australia we use the National Carbon Offset Standard (NCOS) administered by Australian electricity and gas 611,822 611,822 – the Australian government. 7 Offsets include credits surrendered to the New Zealand government for SF6 gas, credits Scope 3 one-time construction and upgrades 68 – 68 cancelled by suppliers against their own emissions, credits purchased by Powershop Australia as part Total Group value chain emissions 648,873 648,805 68 of NCOS, and Gold Standard Voluntary Emissions

28 Reductions (GS VERs) 29 Meridian Annual Report 2019 Chair and CEO Report Menu for our staff our for Workshops targets science-based set to suppliers Encouraging Renewable 100% Our climate action plan action climate Our energy generator. renewable a100% We’re Together Working Working We’re engaging our suppliers

Wind. Water. Sun. of Conduct Supplier Code projects large our into procurement and design sustainable Incorporating

We’ve done the work to analyse how how analyse to work the done We’ve climate change affects our business ourchange affects business climate Climate Change Climate Understanding Understanding and we’re happy to share to happy we’re and Measuring and auditing our carbon footprint footprint our carbon

since 2006 Scopes 1 and 2 1and Scopes offset FY18

Offsetting value chain (Scopes 1, 2 and 3) 2and 1, (Scopes chain value our operational offsetting FY19 Reducing Impact electricity in New Zealand in electricity Our reduction goal goal reduction Our The goal for renewable is half by 2030 by half is 100% We want to accelerate the pace of change change of pace the accelerate to We want Creating Action Creating Electrification of heat industrial Electrification in the systems we’re a part of apart we’re systems the in Electrification of transport

Planting 1,000ha of forest forest of 1,000ha Planting to grow our own offsets own our grow to 1,000ha electric boat and and boat electric electricity in Australia Increasing renewable Investigating an an Investigating other big ideas big other

30 Meridian Annual Report 2019 Chair and CEO Report Menu Up spot prices meant Meridian paid higher than last year. While higher generation spot revenue was 61% Zealand New aresult as and periods through these hydro storage good Meridian maintainedoutages. relatively and some thermal generation plant hydro inflows of low national periods with coincided scarcity gas This field. gas offshore largest country’s the from interruptions to supply response in prices spot higher sustained of periods saw marketwholesale electricity Zealand New the year the During yet result financial best Our NZ Energy Margin Energy NZ 17%

Up NPATunderlying (+62%). higher NPAT (+69%) and higher into translated FY19 in EBITDAF costs and expense, tax the higher depreciation, interest amortisation, instruments, and increases in of financial value fair the net from to profit areduction Despite 26% aboveFY19, FY18. EBITDAF arecord achieve in result helped business our Australian from contribution the in a45% uplift and revenue, prudent market hedging customers, the higher generation customers, higher to sales those Zealand New its to supply more 57% EBITDAF 26%

Up Total Dividend 2019. to June in the year index 50 NZX the in 17% increase companies have a helped support New Zealand utility and property where the yield characteristics of reflected in the wider share market, including This Meridian. is also stocks, electricity Zealand of New good support for the share prices interest rates continue to provide 2019. June to Low 30 year in the of 59% to aTSR amounts this FY19, increase in the share price during share. Combined with the 52% year amounted to 19.52 cents per Total dividends paid during the shareholders (TSR) to return total Healthy 11% Up under the terms of the scheme. scheme. of the terms the under this year been awarded extra shares company shares holding have FY17 the at still company. Employees the in own now shares employees 50% of Meridian parent permanent scheme MyShare Share Price 52% 31 Meridian Annual Report 2019 Chair and CEO Report Menu 1,000 400 600 800 200 400 600 500 300 200 700 EBITDAF Cash flowCash from activities operating Value shareholders for our 100 $M $M 0 0 FY15 FY15 440 618 FY16 FY16 650 452 FY17 FY17 470 657 FY18 FY18 427 666 FY19 FY19 838 635 400 300 200 CPS Net profit after tax (NPAT) tax after profit Net Dividends declared Dividends 100 20 $M 25 10 15 0 5 0 Total dividends Special Ordinary dividends FY15 FY15 247

12.88 5.35 18.23 FY16 FY16 185

13.50 4.88 18.38 FY17 FY17 200

14.03 4.88 18.91 FY18 FY18 201

14.32 4.88 19.20 FY19 FY19 339

16.42 4.88 21.30 400 300 200 100 $M Total return shareholder Financial Year Ended June 30 Five-Year Performance Underlying NPAT 40 60 50 30 20 10 0 % 0 FY15 Peer group median Meridian FY15 209 33% FY16 FY16 233

31% FY17 FY17 221 17%

FY18 FY18 206 14% FY19 FY19 333 59% 32 Meridian Annual Report 2019 Chair and CEO Report Menu 0.0 Financial year ended 30 June debt/EBITDAF Net 0.5 2.0 per share ($62.5 million) under cents of 2.44 dividend special Meridian has also declared a final flow. free cash a75% of FY19 payout represents share, 15% higher than last year and per cents to 16.42 FY19 in declared This brings total ordinary dividends per share, 20% higher than last year. final ordinary dividend of 10.72 cents a declared has Board flow. The cash of free level high asimilarly supported FY19 in of EBITDAF level record The Times 2.5 1.0 1.5 2015 1.7 2016 1.8 2017 1.9 2018 2.3 2019 1.7 (cents per share) Dividend declared forDividends year the financial ended 30 June per share, 11% higher than FY18. cents of 21.30 FY19 in dividends The Board has declared total 2015. August in commenced managementcapital programme the since distributed now million centsto per share, 4.88 with $562.5 special dividend declared in FY19 brings the management capital 2022. This final special dividend the seven year period to February million$825 to shareholders over management programme to return the company’s existing capital 2015 2016 2017 2018 2019 dividends Ordinary 13.50 14.03 16.42 14.32 12.88 special dividends

management Capital Standard & Poor’s. agency by rating used bounds the company credit metrics well within remains in a strong position, with the Meridian’spurposes. balance sheet maturity and for general corporate USPP existing an refinance used to was which million circa NZ$439 We received April. in settled was maturities.15-year The placement and 12 10, across funding term long million in transaction raised US$300 States Private Placement (USPP) In 2019, February our third United 2.44 4.88 4.88 4.88 4.88 Other special special Other dividends 2.91 21.30 19.20 18.38 18.23 Total 18.91 will significantly benefit consumers. reforms that to believe we continue Transmission Pricing Methodology – of the review the a keen eye on years ahead. We also are keeping an exciting for opportunity the the economy and this presents of rest the decarbonising in play level of renewable can electricity high Zealand’s New role of the recognition this to see great is It produced.electricity increase the amount of renewable help will that reform RMA and strategies on renewable energy to develop looking is Resources and report, of Energy Minister the Climate Change Committee (ICCC) this review, to and the recent Interim We response in that note fairness. and affordability on afocus keeping and competitiveness,efficiency while market’s the to enhance seek that supportive of draft recommendations We to date. broadly are positive The ElectricityPrice Review has been be made. could that improvements genuine choice, there are always designed, where consumers have well whole the on is market electricity Zealand New the that opinion the of we are While moment. the at world regulatory the in on going lot is There outlook Regulatory

33 Meridian Annual Report 2019 Chair and CEO Report Menu Chris Moller financial result. financial outstanding an proud of, and delivered you a company to be the Meridian teams who have to lastly, and partners; and our customers, communities thank you to our shareholders, Team, asincere Executive the and Board of the behalf On businesses. customer our in Tasman the of sides both on momentum we have strong And year. the of half second the in rainfall of to plenty thanks good is position water Our from a of position strength. year the we approach but andchallenges opportunities, some up throw doubt no The 2020 financial year will heart good in year the We end Neal Barclay

34 Meridian Annual Report 2019 Helping our customers make a difference now Menu Helping Helping make a make now customers our difference difference

35 Meridian Annual Report 2019 Helping our customers make a difference now Menu that climate action is happening now. meaningful, something of part are choosing us: they want to know they about. That’s akey reason for their providers that they feel good to make choices about their power with us. We offer them opportunities Our customers are on the journey we year this made difference The

36 Meridian Annual Report 2019 Helping our customers make a difference now Menu 300 10 9 8 200 and a relentless focus on creating reduced costs, faster adaptation retail through systems, simpler We grow Zealand New to want help possible. ways efficient the most they value and delivering them in us tell customers our things on the focusing about all is success Retail 000’s connections Customer 350 250 100 150 50 Also 22,612 gas customer connections in Australia, with a total of 364TJ in volume. in 364TJ of atotal with Australia, in connections customer gas 22,612 Also Installation control points (ICPs). generation metering distributed . have connections customer 4,700 Around network; transmission the to connected are ICPs above the <10 of Smelter; Aluminium Point Tiwai the Excludes 0 NZ FY15 276,446 AU 48,208 NZ FY16 274,920 AU 77,970 8 (ICPs NZ FY17 9

276,767 ) AU 100,524 NZ FY18 and engagement. leading customer experiences platform alongside offering market- software Federation Flux to the the transition of our customers customer experience is driven by Meridian to improve our key project an easy customer experience. Our 290,756 AU 100,545 NZ FY19 302,277 206,150 21,705 74,422 AU 109,804 10 4,000 6,000 5,000 3,000 2,000 GWH Customer sales volume sales Customer frameworks set by our regulators. regulators. by our set frameworks efficient markets that work within the and to smooth towe want contribute humour. And across all our operations control with an irreverent sense of we offer Zealand, New in Powershop our leadership in sustainability. For for chosen to we want be Australia, For Meridian and Powershop 7,000 1,000 0 NZ FY15 5,967 AU 167 NZ FY16 5,969 AU 345 NZ FY17 5,727 AU 493 NZ FY18 5,981 AU 549 NZ FY19 6,240 3,123 2,338 779 AU 553

Meridian res, agri, small and medium business Meridian corporate Powershop Menu

Competition works for consumers There is intense competition in the retail market. New Zealand’s residential electricity prices are around 20% lower than the OECD average11, and these lower prices have been achieved despite New Zealand’s low population density and relatively high network costs (due to our geography), and a lack of subsidies.

Part of what keeps prices low in New Zealand is competitor behaviour, but this also represents a key risk to Meridian’s business. Aggressive pricing campaigns and the entry of new competitors may put downward pressure on retail electricity prices and reduce Meridian’s market share, or require Meridian to increase its sales and marketing costs to maintain

Helping our customers make a difference now sales volumes. Meridian Annual Report 2019

11 International Energy Electricity Information 2018 shows New Zealand household electricity costs at 194.97 US dollars per megawatt hour (USD/ MWh) (converted with purchasing power parity). The mathematical average is 244.66 USD/MWh for

37 the OECD countries for which data was available. Bill breakdown Menu 32% 27% 10.5% 13% 13% generation distribution transmission retail GST

3.5% Meridian metering

1% market governance

34% 40% 8.5% 13% generation distribution retail GST and transmission 3.5% metering

Powershop New Zealand 1% Helping our customers make a difference now market governance

39% 32% 15% 9% generation distribution retail GST Meridian Annual Report 2019 and transmission 4% As you can see from the bill breakdown, metering about 75% of the price of power is from

Powershop Australia Powershop generation, transmission, distribution 1% and metering (creating the power market

38 and getting it to the customer). governance Menu

Switching rates12 FY17 FY18 FY19

Powershop New Zealand 33.9% 33.7% 29.6%

Meridian 19.1% 17.9% 16.9%

New Zealand combined 22.3% 21.4% 19.9% 12 Data from the Electricity Authority (emi.ea.govt.nz) New Zealand industry average 20.4% 21.0% 20.5% and Meridian analysis. Switching rates are not published by the market operator in Australia.

Just as consumer behaviour can Australia and New Zealand have Changing our pricing structure shape how we and our competitors very competitive markets where Despite the high level of competition act, so our behaviour and that of keeping customers is challenging. creating positive price outcomes our competitors can be affected by Since 2011 in New Zealand there for New Zealand and Australian changes in customer behaviour. has been no real price increase customers, past research has for consumers arising from the revealed that around 103,000 Such changes can include reductions competitive parts of the electricity New Zealand households spent

Helping our customers make a difference now in demand (for example, a reduction supply chain (generation and retail). more than 10% of their incomes in consumption by the Tiwai Point on their household energy bills13. aluminium smelter), the displacement Meridian’s switching rate in the past of demand by technology change, 12 months has continued to drop. There are multiple reasons for and large business customers This year it was 16.9% (down from this. We know that people with choosing to buy electricity directly 17.9% last year), which is the lowest low incomes are more likely than on the wholesale spot market among the major electricity retailers. others to live in housing that is not rather than enter fixed contracts. Switching rates for Powershop in both energy efficient or well insulated, New Zealand and Australia remain meaning they often need more High customer switching levels affect higher, but Meridian and Powershop power to stay warm. These homes the cost of acquiring and maintaining New Zealand’s combined switching are also linked with higher rates Meridian Annual Report 2019 Meridian’s customer base, and they rate of 19.9% (down from 21.4% last of respiratory and other illnesses, are a good reminder that both year) is now lower than the industry which in turn affects health, energy average of 20.5%. levels, mobility and income.

13 Electricity Price Review Hikohiko Te Uira

39 First Report 30 August 2018, page 4. 40 Meridian Annual Report 2019 Helping our customers make a difference now Menu Price Review panel found that that found panel Review Price Electricity Government’s The dates. payment their on late they’re if hurt being without benefit same the gets everyone that ensure rates lower new Our to time. time from bills energy to their pay struggle who customers to unfair as discounts payment We view prompt customers. our all rate for lower anew offering now we are Instead Discount. Payment Prompt the replaced and rates our This year we have restructured fairly. treated are vulnerable customers most our of electricity is making sure that Part of being agreat provider findings werefindings announced. panel’s the before shortly Discount Payment Prompt the to removing move committing in right the made we had that comfort gave us This and non-vulnerable households. disparities between vulnerable of price cause single biggest the was discount the that and Discount Payment Prompt their receiving not disproportionately affected by vulnerable households were 41 Meridian Annual Report 2019 Helping our customers make a difference now Menu % 0.0 0.4 0.6 0.5 0.2 0.8 0.3 current and future bills. We also work work We also bills. future and current their manage difficulty in customers employ a Hardship Consultant to help We industry. our in lowest the among customer disconnection rates are fortnightly or monthly. Meridian’s and options to pay for power weekly, year, the throughout same the bills monthly keeps that a LevelPay product including tailored payment plans, bills, power to their pay households low-income of ways of assisting anumber has also company The suit. following retailers to other $5 million per year. We look forward us to cost expected is initiative The structure. pricing overall alower with replace the Prompt Payment Discount to retailer energy major only – –and first the is far,So Meridian New 0.7 0.1 Zealand disconnections

0.4 FY15 0.3 0.3 14

FY16 0.2 0.2 their landlords about insulation. to talk or banks like curtain services and working with them to access warm and healthy their homes are, of how assessments high-level doing theplans, right pricing etc), plans, payment (about retailers to their talk of energy hardship by helping them coaches families support at highest risk The families. 150 with trialled being It’s organisations and the Government. retailers, lines companies, community of electricity anumber involves that (ERANZ), Zealand of New Association Retailers’ Electricity by the service EnergyMate, a free in-home coaching is start, the from with involved Another initiative, which we were Income. Work and as such with government agencies support 0.3

0.1 FY17 0.2 0.3

0.1 FY18 0.3 poorly insulated homes, illness, being being illness, homes, insulated poorly reasons that are outside their control – of range for awide use electricity power, but have high many less poorer households are able to use charge. The regulations assume higher variable or per-kilowatt-hour to a pay return in households those require but amonth $9 to around households on low user plans pay that charge fixed the cap These Low Fixed Charge (LFC) regulations. the is example unfair A particularly costs. of network share fair their customers paying more than consumers. This can result in poorer ofsupplying costs actual of the or network charges are not reflective distribution Currently reform. pricing distribution support why we strongly Concern for affordability is also 0.4

FY19 0.1 0.2 0.5

Meridian Powershop NZ Total market their fair share. share. fair their paid consumers all that help ensure would it costs, of actual reflective If network charges were more electricity. besides of heating sources efficient appliances and alternative energy latest the insulation, good rates by having modern homes with of LFC advantage take and usage comfortably able to reduce power high-income households who are many cross-subsidising are they concerningly Most bills. power their on incomes their household of portion asignificant spending up end can and model, LFC the by disadvantaged are actively households roof. These same many family members under the day, the having or during home at 14 FY19 only includes three quarters of data. of quarters three includes only FY19 (emi.ea.govt.nz/Datasets/Retail/Disconnections). Data from the Electricity Authority

42 Meridian Annual Report 2019 Helping our customers make a difference now Menu household gas product. our certified-carbon-neutral of introduction by the supported Australia, in growth customer strong enjoyed We also time. first for the Zealand New in threshold customer300,000 connections the passed Group the end year 2019. June by At 30 connections customer 74,400 reached which by Powershop, of gains aresult as –mostly year 4% last up from base, to grow customer our continued We retailers. large other of the trend the bucked year this growth customer retail Zealand New Our markets. are growing in both we Australia), retailers 33 and Zealand New in brands retail 40 were 2019 there June (as at 30 Despite the intense competition emotional and rational drivers. to different that appeal customers choice and options our we offer markets, in two customerestablished brands well- and distinctive three With different customer needs meet brands three Our

for cleaner options. and more Australian consumers look it continues to grow rapidly as more overall, market that in player small arelatively is and revenue annual Group of our 10% than less represents still ourWhile business Australian lack of clarity on environmental policy. country’s high reliance on coal and to the contrast adeliberate offering brand focuses on sustainability, In Australia, our Powershop Australia engaging way. and irreverent afun, in cost, and control over their energy usage suits consumers who want to have Zealand New in brand Powershop Our future generations. to making are brands perceive they contribution the on based choices brand their filter who consumers of conscientious group of agrowing part are They values. alignment with their environmental in brand our choose deliberately ofone-fifth Meridian customers Around Zealand. of New people the and environment the about energy generator that cares deeply who are looking for a renewable Our Meridian brand customers serves

manage the wholesale price risk. to of mechanisms arange use and secure long-term contracts for supply to able we’ve been but for us, new is risk gas Managing fuel. for dual up signed who customers new or gas, either customers electricity and added connections, with customers who were customer We have now 22,000 been well has received. product That year. financial of this beginning the at Australia Victoria, in product retail gas acarbon-neutral We launched approach. cost and low a digital with offering market amass be will It before the end of the calendar year. Energy Kogan to launch Kogan with also signed a white-label agreement on top. In June, Powershop Australia provides a range of additional services residential solar market specifically, and the Power targets Co DC services. retail-related all and energy their with retailer. We provide their customers energy Power asolar-focused Co, onservices a white-label to basis DC into an arrangement to provide retail This year, Powershop Australia entered

Flux platform. platform. Flux customer connections will be on our calendar year, up to 50,000 Meridian 2019 of the end By the well. tracking is business retail of our transformation The to serve. cost overall our lower deliver products to market faster and needs, to customers’ to respond us allowing customers, our all offer we experiences the will improve customer experience technology of our alignment so software, this using already brands are year programme). Both Powershop three- million of a$30 two (year platform software Federation Flux to the customers Meridian our This year we continued to transition communication channels they prefer. the through and their terms on easily, us with to engage able to be us from buy who people We want the market. crowded avery in others to differentiating ourselves from vital is we offer what improving experiences rise, we recognise that As around customer expectations better customer experiences deliver us help will Flux 43 Meridian Annual Report 2019 Helping our customers make a difference now Menu from energy efficiency to pricing. to pricing. efficiency from energy ranging areas in issues resolve and customers our needs of the meet to staff management account and sales centre, call our to develop We continue choice. of employer an to be ability to our linked andservice experience is strongly toability offer competitive customer transformation programme, our ambitious our for needed platform development talent to develop the and design software with people on depends Flux as Just component critical the are People to be an employer of choice. ability our linked to strongly is and experience service customer competitive offer to ability Our have been shifted to the purview of purview to the shifted have been office’ ‘back have considered would team, where functions that we once customer the in also changes are There customers. to our of low value are that those particularly scope, in reduce deliberately projects seeing We’re also problems. for solving teams take greater responsibility We’re ways of working. seeing agile to more business we wider evolve the as approach, and of culture change a driving also is It technology. in Flux is much more than a change with align to better infrastructure ICT The transformation of Meridian’s us perform. us perform. to help empowered and skilled highly equipped, well motivated, are who of people up made teams expectations will require diversified customers’ and stakeholders’ our meeting ahead, Looking capabilities. their empathy and problem-solving on to focus roles frontline these in people our support us seen has shift problems much more quickly. That their to solve customers with dealing our frontline teams, allowing people

Encouraging Menu openness and diversity

Meridian’s diversity and inclusion programme Gender. Ethnicity. centres on four key pillars, each led by a member of To increase the number of To increase ethnic diversity the Executive Team who is accountable for ensuring women in people leadership across the workforce to be the goals are achieved: and senior specialist positions more representative of the below Executive Team level to New Zealand population 40% by the end of 2020. and build cultural awareness. Helping our customers make a difference now Inclusion. Flexibility.

To be the most inclusive To enhance workplace company in New Zealand, flexibility as and where to allow our people to bring appropriate. Meridian Annual Report 2019 their whole selves to work. 44 45 Meridian Annual Report 2019 Helping our customers make a difference now Menu 100 17 By salary band Group % ratio female salary to male salary C–D E–F G–H I–J K–L Average of average of Average A–B Diversity by age (headcount) by age Diversity 150 125 16 15 50 25 75 0 K & L are our highest salary bands and A & B are our lowest. our A&Bare and bands salary highest our K &Lare Includes Flux UK staff. Includes Dam Safety and Intelligence.

0% Board 0% 100% 17

0% Executive Team 56% 44%

22% Corporate centre 63% 15%

6% ICT 71% 23%

17% Generation and 47% 15 natural resources 36%

16% Wholesale 55% 29%

31% 100.4%

103.9% The customer team 53% 98.3% 93.0% 97.4% 96.1% 99.1% FY18 16%

56% Powershop NZ 41% 3%

27% Flux Federation NZ16 70% 3% Under 30 105.9% 105.9% 100.3% 100.3% 26% 98.4% 98.4% 95.4% 95.4% 99.2% 99.2% 30–50 91.5% 91.5% 98.1% 98.1% FY19 Australia 60% 14% Over 50 300 200 levels. senior at women men than more still are there women because for salary average the higher than is men for organisation the across accountabilities, but the average salary with similar skills, experience and roles, sized similarly in employees all for equity to pay We’re committed group the for (headcount) by gender Diversity 45% female45% Overall 250 100 150 50 0

Board 29% 71%

Executive Team 22% 78%

Corporate centre 69% 31%

ICT 37% 63%

Generation and 22% 78% natural resources15

Wholesale 29% 71%

The customer team 62% 38%

Powershop NZ 60% 40%

Flux Federation NZ16 37% 63% Female Australia 26% 74% Male 46 Meridian Annual Report 2019 Helping our customers make a difference now Menu organisations to achieve this so far. seven of just one is Meridian to gender in equity the workplace. demonstrate their commitment to businesses for programme accreditation New Zealand-based achieved the Gender Tick, a unique pay. We equal on also focus and Pay for Compact our initiatives Equal YWCA 2018 the awarded also We were New Zealand. in of choice commitment to being an employer overall of our part as pay to equal for our continued commitment Pay Awards Equal YWCA award the at Organisation Progressive the won we Board to every manager. This year the from equity pay around culture We have a embedded transparent inequality. to pay difference biggest the making was levels senior highlighted that gender imbalance at areview when 2013 since Meridian for afocus been has equity Pay A more balanced approach

by 30 June 2020. 2020. June by 30 of 40% atarget Team against level specialist positions below Executive in people leadership and senior women We have 35.2% currently this. addressing on focus weongoing have an and business, senior-level roles throughout the represented in leadership and turnover. Women are also under- of low staff because take time will this we know but generation, male-dominated areas like women to work in traditionally young recruiting in inroads good We making are progress. in a work Gender and age balances are still in New Zealand. for all permanent employees Meridian pays the Living Wage aminimum, –as approach remuneration into our fairness to incorporate ways we try all In Percentage of women by salary band Female representation (%) 19 June 30 at roles senior in women of Percentage 18 A–B C–D E–F K–L G–H I–J Females on the Board Female share of total workforce workforce total of share Female management (as % of total junior management positions) of level first i.e. positions, management junior in Females (as % of total management workforce) management total %of (as Females in management positions (i.e. excluding support functions such as HR, IT, legal, etc.) IT, legal, HR, as such functions support excluding (i.e. managers such all a%of as sales) (e.g. functions Females in management positions in revenue-generating positions) management top total a%of (as positions comparable or Executive Chief the from away levels two Females in top management positions, i.e. maximum and senior specialist roles, below Executive Team level. Team Executive below roles, specialist and senior Parent company only, women in people leadership lowest. our A&Bare and bands salary highest our K &Lare 18 19 32.8% FY17 25.0% 36.3% 30.7% 33.6% 29.4% 41.8% 65.4% 33.5% 54.7% 43.7% 28.6% 31.2% 16.7% FY18 FY18 FY18 30.8% 30.8% 43.2% 43.2% 49.7% 49.7% 72.2% 72.2% 40.8% 40.8% 35.2% 45.3% 45.3% 33.6% 33.6% 28.6% 28.6% 33.7% 33.7% 37.2% 37.2% 27.1% 27.1% 18.5% 18.5% FY19 FY19 FY19 47 Meridian Annual Report 2019 Helping our customers make a difference now Menu resolve complex situations. our problem-solving capabilities to problems. Our intention is to widen to solve thinking design in engage to and others' with skills their to mix and inclusion, to encourage people initiative to encourage tolerance of awider is part openness Cultural of our workforce. part that are cultures other many explore the We also encourage our people to of respect. are key expressions language and protocol because of te reo pronunciation proper and our Meridian people in tikanga In Aotearoa, we continue to train countries. of our and the changing ethnic make-up in we compete markets the to reflect abusiness as make-up We want our culture. our into languages and different viewpoints, backgrounds we incorporate sure making is right mix skills our getting of Part Helping people to feel included and beyond our organisation. for the LGBT+ community both within support our recognising last year, Rainbow Tick Meridian received the to life to we bring do of what this colourful celebration is part Pride Parade. Our participation in the 2019 Wellington International in part we took inclusion publicly, commitment to diversity and our of signalling May,In part as Award. Specialist HR the won We also inclusion. and of diversity aspects all in we doing are work for the Awards Award HR 2019 NZ the at We won the & Inclusion Diversity that their opinions are valued. building diverse teams, and feeling especially positive about Meridian to our workplace, with our people be making a positive contribution diversity and inclusion seems to to survey. Our commitment the completing people of our were up significantly, with 61% rates Participation 2015. since diversity and inclusion survey This year we undertook our first 60,000 litres of fuel per year. per of fuel litres 60,000 schedule could save us more than our people, the change to the boat to benefits to the addition in but without its operational challenges, not was trial The fortnight. each off giving all team members an extra day into nine, days ten to fit days working For the trial, we scheduled longer site. on present physically to be need they means also work of the nature The sailings. 45-minute scheduled by two dictated is programme work by boat, meaning the team’s daily roster. The station is only accessible began trialling a nine-day-fortnight West Arm on Lake we Manapōuri, at our power Manapōuri station in As an example, in this February year, best. to their to work people reward conditions that encourage and provide a work environment and to we need that recognising time, some for business whole across the intoflexibility our working style We have building been greater flexible workplace amore to Committed wind farm. and Te Āpiti hydro stations the Ōhau that Meridian has at been undertaking include also refurbishmentCosts work market. New Zealand competitive highly the in pressure acquisition businesses, and continued customer Flux and offering) gas a retail (including Australia Powershop of the investment to expansion support last year, reflecting an ongoing than (9%) higher million $23 FY19, in operating costs were $282 million to flourish. Employee and other business for the to order in we need to invest afraid not we’re where also However, numbers. staff increasing simply than rather business of the needs changing the meet can to we where business the within from managing headcount, and fill roles on focus astrong We maintain right outcomes. the to deliver roles right in the people right have the we always sure to make we want work, best their to do and included to feel our people supporting Alongside Increased costs

48 Meridian Annual Report 2019 Helping our customers make a difference now Menu Sydney Gay and Lesbian Mardi Gras. Mardi Lesbian and Sydney Gay are with Museums Victoria and the key our partnerships Australia in And Trust. Neonatal of the work saving life- of the support New Zealand's Island Rowing, and Powershop include Meridian’s for support South (see page 69). Other sponsorships funds Power community our Up are as credentials, responsibility social enhance our environmental and that takes meaningful to actions we are a trustworthy company way of showing important an are of funding) years three additional to an we committed year (this Programme Recovery Kākāpō the Our relationships with and KidsCan View K View View KidsCan wepartnerships support. the social and environmental through part in comes choosing worth acompany we are that staff our and customers our for Proof Enduring partnerships ā k ā p ō Recovery customer experiences and fair pricing. to in excellent we put hard work the respective markets,their reflecting in average industry the than higher three much to score brands continue All (NPS). Score Promoter Net the uses Group Meridian the customers, our with relationship our To assess us help and the Powershop mobile app. with customers largely through email on digital channels, communicating Powershop Our rely businesses heavily portal. online our use a third around communications via email and of Meridian customers receive Three-quarters FY19). in Group the across million of $12.8 investment channels and (an partnerships of avariety through customers campaigns to reach prospective awareness, and marketing and sales campaigns to grow general brand marketing We integrated group. use the priorities and triggers for each understand to better we collect data the to use us enabling part, their play also strategies marketing Our sales staff. our for in we invest the training and Flux projects with technology service customer our both for goals understanding of their are needs, and building a deeper business, to our valuable most are that Identifying the customer segments our customers understanding Better 22 21 20 Australian industry average Customer satisfaction — Net Promoter Score (NPS) Score Promoter —Net satisfaction Customer Meridian Powershop New Zealand Powershop Australia New Zealand industry average Perceptive Group Limited: New Zealand & Australia NPS Industry Benchmarks. Industry &Australia NPS Zealand New Limited: Group Perceptive year. afull not data FY17 versa). vice (and detractors versus promoters are customers more that indicates value Apositive promoters. of percentage the from detractors of percentage the you would that it recommend is Meridian/Powershop likely to a friend “How or colleague?” scale and then subtracting a0–10 using customers asking asurvey from Calculated 21 22 22 20 FY17 45 48 FY18 (14) 55 53 14 16 FY19 (18) 53 24 18 51 49 Meridian Annual Report 2019 Helping our customers make a difference now Menu of customers. portfolio Federation’s Flux of market and the ongoing expansion challenger brand in the Australian through expansion of our Powershop intention to grow overseas earnings our with aligns Zealand New beyond The ongoing of success our businesses base customer Flux’s Growing software development teams. of the Wellington-headquartered biggest of the one them making testers and product experts, designers, developers, 160 software grow to around Federation Flux New people and teams have seen Powershop brand under licence). the (which retails UK the nPower in forfunctionality our brands and for its development to capability improve scaling successfully years, two than separate Meridian entity for more a as operating been now has Flux 50 Meridian Annual Report 2019 A different tomorrow Menu we do business in each country. how influence characteristics These in contrast depends on fossil fuels. market Australian The and wind. market revolves water around Zealand New The characteristics. different havemarkets very Australian and Zealand New The tomorrow different A 51 Meridian Annual Report 2019 A different tomorrow Menu commercial goals. and sustainability that are conducive to achieving our and a wider regulatory environment advocate for a market environment to citizen corporate agood as energy sector, we have a responsibility of the akey As member markets. efficient and fair open, supporting on focused are and Australia Zealand New both in Regulators model. business to our changes performance, or force undesired our financial and operational of aspects other or initiatives competitive position, development relative costs, sales, affect our Such changes could adversely business significantly. our to affect potential have the changed environmental regulations) renewable energy, and new or to support policies in changes regulation, (including electricity Australia or Zealand New either in tochanges or legislation regulation to lead that policy to public Changes Working regulators with outcomes for New Zealand consumers. efficient, reliable and sustainable is for the delivering most part fair, market electricity Zealand the New that we believe time because some for review this We have supported sector inelectricity New Zealand. of the state the assessing in done have they work the on Panel Review to congratulate the ElectricityPrice like We’d world. the in effective and efficient most of the one already is that to amarket improvements with to an opportunity make further us provided has This process. Review engaged in the ElectricityPrice This year in particular we have submissions. and regular meetings and government agencies through regulators both with we engage and of ERANZ, membership our through customers New Zealand for our for value We advocate liquidity. wholesale supporting New Zealand and Australia, and in leading in sustainability through competing vigorously, ofbenefits competitive markets the we champion that, of part As to affordable energy committed We are are not compromised or impeded. of supply security to maintain required competition and the investments that to ensure carefully to tread need reviewing the on industry its behalf, those and Government, the believe social and we affordability issues, wider to remedy looking in Also, share. their than more for paying up end them least afford can who those that risk the avoid solar and electric vehicles and to rooftop as such technologies new in to encourage appropriate investment accelerated be should reform pricing wereport, believe that distribution year’s last in out we pointed as But considered be could reforms Other to focus. where prioritised so that the sector knows that the recommendations will be withpleased the panel’s indication be a significant workload and we are on the recommendations is likely to to the release of the Delivering report. recommendations. We look forward year, 32 this with of May end the at Resources and of Energy Minister the The panel delivered a final to report

demand to rise in the years ahead. wider economy, we expect electricity a key enabler of decarbonisation in the renewable is recognised electricity as New Zealand’s high proportion of year. Because financial new the in announced to be we expect that Trading Scheme Emissions to the 2019. It accompanies changes further late in into law to pass expected is Bill (Zero Carbon) Amendment Bill. That by the Climate Change Response Climate Change enabled Commission will be by superseded an independent Interim Climate Change Committee year. next The the in policy climate in we are expecting changes important Authority. Even as its work continues, Electricity body, the regulatory key of our work the support and environment regulatory current of the certainty and stability the we value assets, of long-term owner the As 52 Meridian Annual Report 2019 A different tomorrow Menu and regulators on these policies. policies. these on regulators and continue to work with governments We market. retail the in outcomes to improve customer level, federal and state both at out rolled being A number of regulatory changes are carbon) policy. (and related energy federal bipartisan astable, of lack the In Australia, our challenge biggest is reform continues regulatory Australian intensive industries. from disruption to emissions- significant reduction in demand climate action could also cause a Policy changes to achieve strong prices. electricity affect turn could in of these All events. catastrophic and competing technologies), weather of subsidisation of regulatory potentially as a consequence (includingelectricity by customers, of generation and use efficient more the in advances technological growth, economic conditions, regulatory changes, population sector, competitor behaviour, levelsactivity in the industrial including factors, number of by a affected be can Demand period. for a sustained potentially prices, adversely affect or generation oversupply may demand in Afall term. long for the determinant of prices electricity akey is generators from to supply level of customer demand relative the that ensure dynamics market report, this in earlier discussed As any reason. falls for significantly demand if impact apotential is there future, the in business our could affect In addition to how regulation could hurt our business demand in A change

53 Meridian Annual Report 2019 A different tomorrow Menu using coal-fired generation. world the in elsewhere made less is aluminium produced here means The shores. our reach beyond benefits The world. the in purest most environmentally friendly and of the some among to be continues by NZAS produced aluminium The investment. and of jobs terms in economy Southland for the also but business for our just not impacts commitmentNZAS’s has important to 2030. per year of electricity 5,000GWh for about certainty price provides hedge agreement with that NZAS It sits separately from Meridian’s main Zealand’s total demand. electricity New in growth a1% and capacity production plant’s the in increase a9% represents contract new The 2018. October from potline fourth its restart power, enabling the company to base-load of 50MW on a further wholesale market price exposure NZAS's to hedge contract a financial yearLast we successfully negotiated part of our business important an is NZAS

wholesale electricity prices. and moderate any reduction in of electricity the supply turn reduce in could which plant, retire their or to mothball choose could plant generators with thermal generation For example, other electricity market participants.electricity the response by generators and demand growthelectricity and New Zealand rate of residual the occurs, transmission constraints, reduction the which in period the reduction, of NZAS’s volume the number of variables, including wouldMeridian, depend on a on impacts of the severity the therefore and losses, associated and of any reductions size The generation output and demand. output in any year, depending on around of 38% Meridian’s generation consumesNZAS the equivalent of wholesale and retail). by lower prices electricity (both decline in revenue, largely caused a in term, near the in likely result, would reduction or aclosure such because is This affected. adversely we be may us, with agreement its or not it also terminated or breached consumption significantly, whether smelter or reduce its electricity Point Tiwai its were to close NZAS if that though, We acknowledge,

Clean Energy. Action and SDG7 Affordable and Climate SDG13 to UN commitments technologies alsoour align with new adopt and numbers greater in customers to take up vehicles electric our to support initiatives Our coal. and gas on rely currently that processes heat of industrial electrification the become more prevalent and also sectortransport as vehicles electric increased decarbonisation in the to lead likely will –which Discount Clean Car Standard and Clean Car proposed recently the and Scheme, Trading Emissions to the changes upcoming Bill, Amendment Change Response (Zero Carbon) Climate the particularly and – policy action climate be rise will of that key the We driver believe view is that demand will increase. risks of demand reducing, our overall While we openly acknowledge the increase to demand We expect do therefore demand. electricity New Zealand’s population and uninhabitable, which could increase migration as globally regions become will lead to large-scale international change climate that possible also It is (and therefore demand). electricity leading to an increase in irrigation drought to increased due affected conditioning. Agriculture could be demand for heating and air have a direct on impact electricity Higher temperatures are likely to change could also increase demand. of climate impacts physical The 54 Meridian Annual Report 2019 A different tomorrow Menu charging infrastructure network, Mt Cook. Despite this growing Aoraki/ at such as the public, also installing charging stations for we are (EECA) funding, Authority Energy and Conservation Efficiency customers, and at times with In with partnership our business rates for charging their vehicles. cars with cheaper overnight electricity consumers who purchase electric Electric Car pricing plan that rewards vehicles.electric We introduced an have who for customers choice first the to be is in sustainability Clearly, one of our goals as a leader of vehicles electric in New Zealand. uptake the We to want accelerate for electricity. vehicles will also increase demand more electric course, Of emissions. country’s the of 20% around for accounts currently which sector, decarbonise New Zealand’s transport they have such potential to help electric vehicles on our roads because to more ashift supports Meridian Encouraging vehicle electric uptake

marine and aviation vehicles. other vehicles, including trucks, vehicles and the of electrification electric for introducing timeline the next, thepossible massive scale, and is what on insights back brought He shift. to the make Meridian the key elements that are enabling and story Zealand New share the joined an international panel to he April, In Norway. Summit in EV global the to attend invited was then Nick RobilliardProperty Manager Meridian’s Procurement and converted. over 40% car transition is currently at sitting to vehicles. electric Norway’s electric Norway’s world-leading conversion what New Zealand can learn from on insights her to share November in to New Zealand Association, Vehicle Electric Norwegian ofthe General Secretary Bu, Christina brought we uptake, accelerate wehow can To by 2021. understand road the help target vehicles electric of 64,000 on national to meet the dramatically conversionelectric will have to grow to fuel rate of fossil Zealand’s New economy by 2050. economy transition to a net zero carbon to successfully enable our country’s expertise our to using committed can combat climate change and we’re most significant ways that Aotearoa of the sector is one transport our electrification the Weof that know fleets. to their businesses electrify other to help continuing and EV100, Coalition, participation in and EVWorld Drive Electric and the Climate Leaders of membership our advertising, vehicles, through our website and to promote a wider use of electric In the year ahead we will continue vehicleselectric by 2030. of 100% our EV100 commitment to meet us to enable few years next models becoming available in the to new forward we looking are and our operational worksites to electric, (commercial light vehicles) used on converting 15% of our utility vehicles in succeeded We’ve of 2020. also end by to to grow the 90% track that on we are and engines) have petrol still vehicles (as from distinct hybrids that electric battery 80% almost now fleet is Meridian’s own vehicle passenger

55 Meridian Annual Report 2019 A different tomorrow Menu solar generation is most effective. effective. is most solar generation when the day during to be tends energy, and commercialuse energy renewable to generate locations untapped previously use they as the potential for far-reaching benefits, have programmes solar Commercial residential energy. of, or, part their for all solar as use New Zealand and Meridian brands Powershop our across households consumption. Currently, over 4,000 for their own power generation and values and take greater responsibility away their to as live it see customers around 85% renewable already), our New Zealand’s supply electricity is (given that action climate a powerful residential solar installations are not change. While in New Zealand climate combating in their part to want play new technologies to to switch motivated are who customers residential of our Many tocustomers adopt new technologies. our we’reto evolve, encouraging continues sector As the electricity Zealand of solar in New theadoption Supporting

solar partner Reidsolar partner Technology. delivered by Meridian’s commercial was and efficiency to maximise degrees 10 at tilted panels spec high- 1,408 features 422kWp system Auckland distribution centre. The state-of-the-art Mainfreight’s at array solar rooftop largest Zealand’s New on switched We also cost. for a fixed produced electricity the purchases system cost, now and Kiwi Property upfront covered the and we installed power purchase agreement model, of the for ayear. part As vehicles 30 households or nearly electric 100 of equivalent the to power enough 200,000kWh of per year, electricity over generate 672 panels The Centre. Shopping Northlands at Woods, Megan Dr Hon. Resources, and of Energy by Minister on switched was installations of four first the power. June In of solar user biggest company,property New Zealand’s listed largest country’s the Property, Kiwi make help will The programme HamiltonNorth, and Auckland. Palmerston Christchurch, in centres shopping on panels solar rooftop 2,500 almost to install Property We have partnered with Kiwi the landlords and tenants to benefit develop SunYield the Australian company Stoddart to solar energy. We have worked with in to invest incentives had good landlords and tenants have not recently, Australian until Up bills. power their save on them help that this to do opting rewards for receive and customers grid wider the off pressure takes This spikes. of electricity cost the customers’ systems battery when our Reposit, partner we activate Alongside Power Plant. of aVirtual tothe opportunity become part customers with solar and batteries offers which Impact, like Grid successfully introduced initiatives solar installations. Powershop has have who Australia in customers We have over 22,000 currently space. that in brand credentials our and amplifying platform around a strong sustainability are building our customer base we and take, can households reduction action that Australian climate and billimportant avery is panels solar Installing Australia in sun the comes Here ® . This allows both both allows . This can use the SunYield the use can investor An homes. new on solar from scale renewable energy solutions. for-profit organisations to install small- to not- distributes then Powershop that attached apremium has this – bills their pay they when Powerpack Energy Your the choose Community programme works where customers The over $500,000. raised now has Community Energy programme Your Australia’s Powershop involved. parties for all is a win that solution innovative This is an power. rate for their a discounted income stream, and the tenants get another has The investor property. the occupy who tenants to the back roof property's investment an on produced power solar to sell system ® solar power power solar

56 Meridian Annual Report 2019 A different tomorrow Menu rural communities can use to act. use can communities rural that ameasure provide does it tools, modelling gas detailed greenhouse to replace intended not is tool new the While emissions. their to offset forest in planted be could that area the or acar in travelled distance the carbon footprint and compares it to farm’s of their approximation quick a afarmer gives NZ, and Agrilink and Economics Research Unit Lincoln University’s Agribusiness by developed tool, The footprints. carbon of their size to the a guide carbon calculator that gives farmers anew to support Zealand New We partnered with Westpac sector. the farming for particularly coming years, in intensify only will footprints andunderstand contain carbon to pressure the New Zealand, in sector agriculture the For Helping farmers measure carbon

remains significant. and alternative technologies current between gap commercial the that shows analysis current our although contribute, wehow can to We investigate continue chains. responsible and effective supply more and efficiencies around andimportant wider conversations users though, is driving sustainability energy big many For financially. what is feasible commercially and complex considerations around involve sometimes They fixes. not quick are These for electricity. andaction would increase demand climate apowerful is this Aotearoa In by electricity. powered is that plant with gas boilers and coal existing convert their and to replace opportunities industrial consumers, there are like energy of users major For Replacing coal and gas boilers being rewarded for doing so. so. for doing rewarded being and usage energy their by reducing contributions to the environment customers are able to make positive overall demand, while electricity our to manage us allows programme This bills. energy next their on discounts receive automatically they targets, Curb their hit successfully If they hours. four than more –no of time period for aset voluntarily usage their to curtail them asking notification sends participants or an SMS app a peak demand event, Powershop is there When meters. smart with Powershop customers in Victoria to available is programme This programme. our demand response Your Curb in Power, part taking from generation, electricity by emissions carbon as well as money consumption at saving peak times, electricity their to reduce act can Australia in customers Our curbing power use for options New 57 Meridian Annual Report 2019 Making the most of powerful forces Menu the the forces Making Making powerful powerful most of of 58 Meridian Annual Report 2019 Making the most of powerful forces Menu •

from renewable sources. renewable from 100% generating with alignment integrity, with and in responsibly Webrings. generation approach clean energy and the benefits it water and sun. We’re excited about of wind, made is business Our of success elements Our 59 Meridian Annual Report 2019 Making the most of powerful forces Menu 15,000 12,000 Generation (GWhGeneration so in years to come. to come. so in years to do continue will and system energy generation to our energy other intermittent renewable and wind of amounts large of enabled the integration seamless of renewable energy. Hydro has New Zealand’s high percentage of backbone the therefore is and advantages great of its one is supply and demand in shifts with hydro of to deal flexibility The 600 900 300 0 FY15 13,851 23 ) FY16 14,226 FY17 13,825 FY18 periods or drought conditions in conditions, resulting from dry conditions. Adverse hydrological hydrological by seasonal influenced hydroManapōuri systems are heavily and to, water. Waitaki access The and of, availability the is hydro generation Zealand New for Meridian’s A key risk world. in the changeable commodity markets most of the one is that market availablecapacity create an energy low storage relatively the and inflows of water However, variability the 13,109 FY19 14,298 12,326 1,244 525 203

generated into the wholesale market. we have electricity selling from making customer commitments than we are our to meet market wholesale the on purchasing from electricity be forced to spend more money we may low inflows, from resulting levels we have low storage When and these prices can significantly. vary fromelectricity the wholesale market their all buy retailers Electricity our generation capability. affect significantly water levels and reduce may catchments, those Capacity (MW Capacity 3,000 2,000 3,500 2,500 1,000 1,500 500 0 FY15 2,955 24 ) FY16 2,955 FY17 2,955 FY18 manage inflow volatility carefully. volatility carefully. inflow manage to we need mean will it demand, to electricity match ability improve our may this While rainfall. summer than more to increase predicted hydro catchments Meridian’s in rainfall winter with projected, are changes rainfall Seasonal by 2055. 5–15% by approximately increase Meridian’s catchments could into rainfall annual average that indicates modelling however our exacerbated by climate change, be could that arisk is This 3,047 FY19 3,047 2,338 416 201 92 24 23 (power). of generating capacity measure Megawatts: output (energy). measure of generating hours: Gigawatt

Hydro NZ Wind NZ Wind AU Hydro AU 60 Meridian Annual Report 2019 Making the most of powerful forces Menu Operating cash flows cash Operating 400 600 800 200 $M 0 FY15 440 FY16 452 FY17 470 FY18 427 FY19 635 returns for our investors. investors. for our returns for our customers and more reliable certainty price greater achieve us help Together, mechanisms these to manage transmission constraints. use Energy, we also which Genesis is a hedge contract or ‘swaption’ with instruments financial of these biggest prolonged conditions. dry The market prices that can accompany that shield us from higher wholesale instruments with counterparties of financial arange through amounts to ‘dry-year insurance’ water storage, and we employ what lake we how use in flexibility some us give that consents resource and agreements with stakeholders have we also Zealand New In risks. manage changeable commercial we way which in one is model business integrated vertically Our different trading conditions. management practices to manage risk our we adjust and business our of parcel and part are demand, wholesale prices and electricity in create they volatility and the weatherChangeable conditions, flows cash Stable at the Tiwai Point smelter. Tiwai Point at the production to increased due part Island)North and higher demand in the in to hydro lower generation Taupō Lake at (leading hydro storage was compoundedbelow-average by of this impact The prices. wholesale on upward pressure put uncertainty resulting the and output, station power reduced Thesefield. shortages gas planned outages at the Pohokura gas by followed constraints supply gas year, of the unplanned with part second into the continued year The conditions we reported at half expenditure.capital business in was of which million $48 million, $64 was FY19 in expenditure of operating earnings. Total capital level record to the due year, mainly last than (49%) higher million $208 FY19, in million were $635 flows cash done so for some years. Operating has –and weather the despite flows generate relatively stable, strong cash to continues business the aresult, As 61 Meridian Annual Report 2019 Making the most of powerful forces Menu commercial exposure to the high high to the exposure commercial with to Genesis manage our contract financial our on calls made we events, supply gas the During and South Islands. price separation between the North market wholesale cause also can toability generate. Such conditions our limited which north, power of our the islands was not able to transmit all when the transmission link between period (winter). There were also times water for our traditionally lower inflow enough towe sure had make levels eye hydro to an on keep we needed though, time same At the station. power Huntly at units' 'Rankine operate, including Energy’s Genesis encouraged thermal generation to generate at higher and capacity to us incentivised prices higher These average. FY18 the than FY19 prices were significantly higher in wholesale meant factors of these All 2018 set new records but that these these that but records new set 2018 spring in prices spot that out point did It UTS. no was there concluded and claim the in matters the The ElectricityAuthority investigated (UTS).Situation existence of an Undesirable Trading the to claim company alines and retailers small four led that and year this of some for unsettled more much was market the half, second the in high were prices wholesale Because More transparency needed result. financial arecord with and shape good very in year the finished of winter. We start the at storage our hydro boosted flooding) Coast West the caused event that (the same March event in inflow Alarge period. our low-inflow we entered and storage was dropping below average, on hydro generation when our hydro back we eased as prices, market spot of other energy sector participants. participants. energy sector of other is comparable with the requirements that their activities in of visibility level a to deliver by regulators required be should industry gas the that is view Our risks. of perceived because volatile more potentially pricing makes also but don’t know what they’re planning for, they because efficiently, compete only makes it harder for retailers to not information of in-depth lack The market. gas Zealand New the of changes and developments in of visibility lack ongoing the is us for highlights matter this What behaviour. by collusion or other undesirable were caused prices spot high the that concluded there was no evidence Theoutages. regulator also production gas and hydro storage and demand constrained by low prices reflected underlying supply 62 Meridian Annual Report 2019 Making the most of powerful forces Menu Other Net hedging position Net VAS revenue Net Generation spot revenue customers supply to Costs sales revenue Wholesale contracted sales revenue contracted Retail Total New Zealand energy margin energy Zealand New Total generation revenues such as frequency keeping including Electricity Authority levies and ancillary costs and revenues market associated Other from those derivatives received revenue spot the of net risk, market The fixed cost of derivatives used to manage New Zealand Mercury and Energy Genesis with (VAS) swaps asset virtual of position revenue net The Meridian generates that electricity of volume the from Revenue contracted customer sales cover to purchased electricity of volume The price revenues from derivatives sold Sales to large industrial customers and fixed customers) to electricity of distribution of costs the cover that companies network distribution to (fees costs distribution of net customers retail to sales from received Revenues (1,874) 1,108 2019 2019 1,672 654 524 $M 126 (5) 11

(1,194) 1,039 2018 2018 944 435 629 $M (4) (2) 41

above FY18. 17% increase margin energy New Zealand saw hedging market revenue and prudentgeneration higher the customers, to those sales its New Zealand customers, higher Meridian paid 57% more to supply While the higher spot prices meant average. of historical of 104% by inflows supported was which increase, to this contributed also volumes generation physical in of 8% higher than last year. An increase generation spot revenue was 61% Zealand New of FY19, much during market the in prevailing prices market spot wholesale high With model. integrated vertically our of success of the indicator agood is and businesses of Meridian’s retail and wholesale the combined financial performance of ameasure is margin energy Our margin energy Our 63 Meridian Annual Report 2019 Making the most of powerful forces Menu Movement in EBITDAF in Movement 1,000 1,400 1,500 during the year, with a 1% increase year, increase a1% with during the customerelectricity base 13% grew its Australia Powershop farms. two wind availability at Meridian Australia’s plant and volumes wind lower and Wales South New in conditions dry by impacted was hydro generation However hydro assets. Australian our year of the seasonal generation from with a fullhigher calendar than FY18, 37% was margin energy Australian 1,300 1,200 1,100 600 900 800 700 M 666 2018 June 30 EBITAF

+25 sales contracted Retail

+89 sales contracted Wholesale New Zealand Energy Margin +$164M Margin Energy Zealand New

633 various users. The amount we can we can amount The users. various for partitioned are of water volumes available overcontrol the how has authority water local the but water, of the release the control we physically we Australia, own in hydro stations three power the With TJ. of 364 sales with of FY19, end by the customers gas 22,600 Victoria, Powershop Australia had in offer gas of aretail the launch With sales. electricity in contracted revenue spot Generation -680 customers supply to Cost

+85 of hedges hedges of cost Net +13 swaps asset Virtual -1 programme to allow operators to operators to allow programme has also undergone an automation demand. The Hume power station dam to coincide with peak electricity the from released water the 'shape' to us allows that programme change a to trial Authority Basin Darling Murray- the with working we’ve been At Hume, purposes. recreational or cultural, irrigation, environmental from the dam for downstream to release we instructed of water are generate depends on the amount costs market Other +32 margin energy AUS increase in Group EBITDAF. Group in increase significant driver behind the the was margin energy FY19, In +3 revenue Other -4 expenses mission Trans - wholesale prices during the day. during prices wholesale of higher most the us to make have enabled measures of these Both Wales). South New or into (Victoria flows electricity the where and station the from output the control remotely -23 expenses operating other and Employee 838 2019 June 30 EBITDAF 64 Meridian Annual Report 2019 Making the most of powerful forces Menu assets across the Group. the assets across and improvement of our generation towards the ongoing maintenance This year Meridian invested million $60 hydro and wind generation assets. or enhancement work on both our identifies and prioritises remedial asset management plan, which Programme, and our 20-year strategic Assurance Safety Dam and Policy Safety Dam our hydroof our assets, location the in We have confidence severe. more be may they that and frequently, more events these we experience may that indicates impacts change of climate Our modelling assets. generation our damaging events flood extreme is risks of these One owners. property Meridian operates and third-party which in markets the on effect adverse have an could turn in which own customers), our (including consumersalso major affect electricity transmission grid. Such an event could high-voltage national of the a failure power stations or other operations, or of our all of any or afailure cause or affect adversely could of terrorism act or explosion cyclone, flood, fire, as a major earthquake, landslide, event such of acatastrophic risk The operation of our power stations. depends on the continued efficient electricity to generate ability Our Comprehensive asset management

our overall insurance contracts. overall insurance our cyber-insurance cover of as part governance. In addition, we hold user awareness and having robust information risks, raising security includesThis and identifying resolving appropriate measures security in place. having and practices standard industry by following risks such We mitigate subsequent fines and penalties. to exposed be could company the perceptions of poor security, and and safety to public risks potential potential environmental damage, service, to reduced due suffer likely interruption. Our reputation would and manage any subsequent business assets, damaged repair potentially systems, the repair attack, the to stop costs We incur could assets. operating our critical systems or damage did occur, it could interruptordisable compromised. If such a compromise information technology systems will be critical of our security the that a risk is –there systems information our to extend risks infrastructure Our or delay paying insurance claims. succession, or where insurers contest in occur events catastrophic catastrophic event occur or multiple asingle should enough be won’t this that However, possible is it losses. interruption business and damage to cover material $1 billion to for up have insurance We also 65 Meridian Annual Report 2019 Making the most of powerful forces Menu systems at Aviemore power station service local of the upgrade a major removed. We have also completed disruption risk has now been financial year and means a significant of this most taken has project That unit transformers at Manapōuri. main seven of all replacement this year has been the successful achievement for our generation team A key of risk. understanding detailed works is prioritised on based a full and management of asset programme long-term Our quickly. issues escalating and of assets condition current the reviewing in expertise team that provides on-the-ground very capable reliability engineering We have a programmes. upgrade our ongoing improvement and through risks We these counter be reduced. our generation may production replacementoutages, or repair, requiring power unplanned station conditionasset or human error) as such issues (through failures to suffer were systems control or structures, civil canal and gates switchgear,transformers, control for example, generating plant, orequipment technology, including, our power stations. If any critical andequipment at technology of pieces various on We rely Looking after our plant end of this calendar year. by the completed to be two-thirds work the we expect hand and in well is Arefurbishment time. some for capacity half at working been we’ve meant machines have our with Te Āpiti wind farm, mechanical issues occur. still At can failures significant Despite this risk management process, onimpacts other components. failures and prevent consequential asset to predict ability we have the that so turbines wind the within monitoring of critical components we manage this risk by ongoing defined regular maintenance regime, remediation. In addition to a well- other or covered bynot warranties are they if farm wind a particular of operation and reliability the on may therefore have an adverse effect larger components, serial defects the For site. one throughout plant same the use generally farms Wind to up date. stations three those keeping of part Cas Ōhau Band Ōhau A, Ōhau and refurbishing key components at replacing be we will few years next the Over efficiency. and redundancy current system and improve reliability, Benmore power station to replace the at upgrade water cooling year of amulti- middle the we in are and Hydro Australia Hydro Zealand New Hydro Wind Australia Wind New Zealand % Strength of our asset maintenance – plant availability –plant maintenance asset our of Strength FY15 88.4 95.5 92.8 FY16 93.4 88.9 91.0 FY17 85.4 92.6 91.3 FY18 90.4 93.4 85.8 83.9 FY19 88.6 83.3 80.1 91.6 66 Meridian Annual Report 2019 Making the most of powerful forces Menu Total net freshwater consumption quality similar with extraction of source the to returned Water Fresh surface water (lakes, rivers) New Zealand the about opinions strong voicing issue, with local communities often emotive an be can too energy Wind we can. as parties many as with collaborate with and reach agreements to look actively and waterways and of water role the and value the both aware of highly we remain business, own to our central so is water Because use. quality to to availability from everything about concerned parties of range awide with issue, important and emotive an to be continues Australia and Zealand New in use Water Responsible use of water and wind Water returned to the source of extraction with similar quality similar with extraction of source the to returned Water Fresh surface water (lakes, rivers) Australia Water consumption 25 26 Biodiversity Collaborative Group. Collaborative Biodiversity the for biodiversity through policy developed an environmentalalso and climate change. We have relevant to both hydro operation are that issues policy water on InnovationBusiness, and Employment of Ministry the and Environment for the Ministry the from officials Nationally, we have worked with goals and targets. action climate of meeting capable a diverse and resilient energy system to achieve countries both helping in however, ingredients wind, vital are hydro Both and live. they which in places the on of turbines effects 73,883 62,518 11,365 FY15 Mm 3

70,610 56,481 14,130 FY16 FY16 Mm 3 as possible. clean were as catchments in these water the if be would therefore us for solution best The needs. power New Zealand’s to meet deliver we can and the amount of renewable energy profitability our on affect actions such contaminants, of these effects the to dilute into waterways water more change in water by quality releasing any mitigate help we can While weeds. and growth of algal chances the boosting potentially activities, by others’ compromised be can systems river Waitaki and the Waiau on however, quality water quality; Hydro generation itself doesn’t alter 72,946 61,499 11,447 Mm FY17 3 65,562 53,823 11,739 FY18 Mm 3 61,832 74,183 12,351 3,696 3,696 FY19 Mm 3

26 25 not altered in terms of water quality. water of terms in altered not is and environment, a marine Sound, Doubtful into Fresh water taken from Lake Manapōuri is released rights themselves. water the hold not We do stations. power hydro Australian our with associated dams the through passing water from electricity generate to right the hold only we that Note drought. from suffer can that areas in operating are stations power our Australia in areas, stressed water to exposure no have we Zealand New in While metered). not and (minimal Municipal water consumption not reported 67 Meridian Annual Report 2019 Making the most of powerful forces Menu river habitats and are of part the (tuna) braided eel and on impacts concentrated on the lessening are projects These Trust”). “Waiau EnhancementHabitat Trust (the Wildlife and Fisheries Waiau and the structure, Project River Recovery dam and Lake Manapōuri Control ‘trap and transfer’ at the Waitaki eel as such projects support or we fund impacts, To these address fish. native of movements natural the as well as flows, river of volume and timing the affect and and canals that divert the water lakes by creating landscape the these. Hydro generation affects to manage have aresponsibility the wider environment, and we generation have does on impacts contribution to climate hydro action, its positive Notwithstanding In there’s Manapōuri, still a large sea. the from to and successfully migrate can they released, Once catchment. Waitaki the in amount eels at and Manapōuri, a smaller adult and of elvers number large we move year a Every adults. and to elvers move both transfer and trap we use so movement that impede structures Our to grow to adulthood. elvers small as up-river to freshwater to return need eels Juvenile trench. Tonga the in to spawn and cycle life their to complete freshwater from sea to the have to migrate eels Adult originally granted. were consents our to when agreed we that parties interested other and collaboration with local authorities because it’sbecause a national park and there self-sustaining population of eels

thousands of elvers and 72 adult eels. adult and 72 of elvers thousands to equating eels, and 37kg of elvers over just we’ve caught At Waitaki, exceptionally high catch numbers. eels at down Manapōuri, on last year’s and 700kg of elvers around moved migration condition. This year we’ve in are that adults of the all up, and turn that We elvers the move all into causes and possible responses. Industriesgroup Primary is looking for river. the up Currently, aMinistry to migrate trying elvers of juvenile numbers have smaller and pressure, change and commercial fishing use land through of habitat a lot have that lost catchments coast east what is happening in the South Island is much smaller. This is consistent with the Waitaki catchment, the population In pressure. catch commercial no is

68 Meridian Annual Report 2019 Making the most of powerful forces Menu 27 drained have been wetlands New Zealand original of the 90% roughly that estimated has Environment the for Ministry the into perspective, To that put wetlands. of new hectares over 100 created has their populations. The partnership recover stilt black or kakī help and fronted tern/tarapirohe colonies pest eradication to protect black- and riverbed of the control weed through catchment Waitaki the in and restore braided river habitats of Conservation works to preserve Funded by the Meridian, Department conservation/business partnership. New Zealand’s longest-running catchment and is perhaps Waitaki the in 1991 since place in been has Recovery River Project particularly during consenting and closely with local government bodies, waterways. For example, we work the with groups connected governed by agreements with are hydro our operations All ofwetlands. areas Trust has also restored significant project and contribution. The Waiau www.mfe.govt.nz/Environment-Aotearoa-2019-Summary Environment Aotearoa Report 2019 27 , so this is an important important an is this , so adversely that activities affect are Planusers. changes could also water on payments or royalty generation, and imposing charges levels in rivers that have hydro minimum flow or maximum nutrient Those could include imposing customers. to our on to pass able be not may or we may that sources hydro use or to access ability our conditions on and costs additional bodies may impose restrictions, local authorities and other regulatory Government, the overevolve time, settings policy how on Depending the water we need to access Retaining . operations. day-to-day our in we acted as a responsible generator that We confident are were serious. of environmental compliance, none breaches plant-related four record did we While to operate. to continue us a generator was allowing recertified, as safety public our and prosecutions were no there year past the In with resource consent conditions. we report regularly on our compliance and process, submissions the through use and access to water. to water. access use and work together to pursue responsible all how we can on Aotearoa, in issues interests in strong water have who processes and other stakeholders continue to engage with RMA It’s therefore important that we Court. the Environment to through going processes (RMA) local Resource Management Act from or charging) of water forms through or taxes environmental of (e.g. imposition change policy througheither government direct to water access Meridian’s reduce could This users. of other needs the and water more unpredictable for weather becomes more variable, as change by climate exacerbated be also could issues Regulatory catchment for Meridian. flow from the Waitaki or Manapōuri available the reducing purposes, other for or interests iwi specified to meet or users to water agricultural more to allocate changed be policies could consents. National and regional water currently without resource permitted 69 Meridian Annual Report 2019 Making the most of powerful forces Menu that Ngāi Tahu’s history is shared is shared Tahu’s Ngāi history that important it’s because district, the across signage other unveiled and Pūkaki, of Lake bottom the at Centre helped develop the Punatahi Visitor We areas. catchment our around key at sites Tahu signage to develop Ngāi with we closely have worked year the past In catchments. Waiau and Waitaki the in fish native and kai as well as trusts to enhance mahinga and the Waitaki Governance Group Te through Marama Ao and Waihōpai) Moeraki, Ōraka Aparima, Waihao (Arowhenua, Awarua, Hokonui, rūnanga local with closely work sea) toand the mountains the (from tai ki uta of ki kaupapa to the respond and Weways. recognise several in iwi other and them with Ngāi Tahu takiwā, and engage the in hydroto our schemes relation in Tahu, particularly of Ngāi We recognise the mana whenua relationship with te rūnanga. communities and our long-term government agencies and local on strong relationships with financial success, depends continued our and therefore to water, access continued Our to our relationships committed We are

local communities. into these projects back 1,000 over $7.5 through invested and million locals important to are that projects been able to undertake a range of we’ve time that In Te Uku Waitaki. and WestManapōuri, Wind, White Hill, Creek, Te in Mill Āpiti, projects local supporting been Power has Up fund operate. For 12 years, our community we which in communities local the build strong, mutual relationships with us helps it and supportive and involved demonstrate that we want to be locally we by locals, good doing and with By building good relationships towns. to smaller back people communities to and flourish attracts Local employment helps small local Powering up communities local to our operations. included and consulted in relation to feel communities and groups regarding consents. We want people, wind assets our around communities specific in meetings hold We also area’s importance. the understand and appreciate all better we can so visitors all with 70 Meridian Annual Report 2019 Making the most of powerful forces Menu 0.0 4.0 Total recordable injury frequency rate (TRIFR rate frequency injury Total recordable 3.0 electrical and mechanical assets. environments, with extremely large operate in technically challenging We work. their from risk at put lives their in value they what and lives to have their people our of none we want and assets, generation our of operation responsible to the critical is safe people our Keeping Looking our after people 29 28 2.0 1.0 Includes Meridian Australia generation staff. recorded. been not has periods those for worked hours of the as number calculated be cannot TRIFR the contractors, off-site and Australia Powershop New Zealand, Powershop for numbers incident have we While injuries. work and treatment restricted medical time, lost all includes and hours 200,000 per calculated is TRIFR

FY15 1.18 2.68 1.52

1.67 FY16 3.11 1.86

0.19 FY17 when connecting and disconnecting road driving, and at customer sites off- and of on-road alot requiring construction sites, in remote locations on assets, operating on to hazards exposed also are contractors and staff Our public. of the amember or member, a contractor, a customer to astaff injury serious of or fatality to the lead will incident an that of water. arisk is volumes There to large close and hydro structures large structures, on tall wind and locations – underground, inside of avariety in work people Our 3.61 0.73 28 )

0.70 FY18 1.82 0.88

1.34 FY19 3.99 1.72 10.0 14.0 15.0 12.0 Lost time injury frequency injury Lost time rate (LTIFR 30 receive regular training in risk risk training in regular receive representatives on these committees The have occurred. that incidents review and hazards to identify monthly meet committees These contractors. including sites, our on committees represent all employees safety and health Site-specific Tie approach. Bow the using analysis following place in controls consequences injuries and have of high- arisk posing as Framework Risk Fatal our through identified have been activities power. These 0.0 4.0 6.0 8.0 2.0 worked for those periods has not been recorded. recorded. been not has periods those worked for hours of number the as calculated be cannot TRIFR the contractors, off-site and Australia Powershop Zealand, New Powershop for numbers incident have While we injuries. work time lost all includes and hours 1,000,000 per calculated is LTIFR

FY15 1.0 6.7

FY16 1.9 3.1 FY17 4.5 30 ) as well. well. as hydro stations Australian the at safety year to integrate management of past the in we’ve hard worked and approach, safety into our embedded fully are Australia in farms wind Our operations. by our presented hazards the reviews of regular with assist who units, business of our each in specialists safety by dedicated supported are identification and controls and

FY18 1.7 13.6

FY19 4.2 15.0

Meridian employees29 Meridian on-site contractors Meridian on-site 71 Meridian Annual Report 2019 Making the most of powerful forces Menu FY17 In five years five In 10.2% Manager, a dedicated number, 0800 safety management system Safety incidents through Meridian’s electronic required to any report hazards or Our employees and contractors are health. and mental wellbeing overall focuses employees’ on our that programme, Minds Healthy our programmes, including several have We safety. also physical people’s our just beyond goes approach Our meetings. performance management engagement, tender processes and direct through beyond and business of our part the generation in contractors and suppliers to our work. Our engagement extends at towards safety attitudes and encourage consistent behaviour and awareness health and safety to raise programmes training in Wegains. invest continuously accuracy and efficiency make to technology to use we look as broader to expertise run, particularly require assets The changing. are assets our upgrade and maintain to manage, required skills The Generation and wholesale staff approaching and retirement age Generation wholesale staff In ten years ten In 22.7% accountability for safety behaviour teaches personalresponsibility and that –acourse training (ZIP) Process Induction on Zero arefresher did We it. also have caused could we had any culture problems that whether at look Teat and Āpiti people our Voss with to work Phil Dr psychologist we engaged time, for along like this incident an Meridian hadbecause not had loss, fingertip of the case the In chain. Waitaki on the 22 Gate a winch at with working to a contractor injury finger was a incident serious other The causes. of web acomplex incident with an in was involved for two years site the at working had been who acontractor Te Apiti, at where loss afingertip involved One serious. were Two of incidents these contractors; and five employees. incidents: threeinjury involving time lost were eight there year This or site managers. health and safety representatives or one of our organisations elected FY18 9.1% In five years five In

In ten years ten In 20.3% across the sector to improve safety. to improve safety. sector the across forum focussing on working together industry electricity an Live, Stay of member We’re active an also right. as is their unsafe, is work if up them to speak encourage and basis a regular leaders engage with people on protect themselves. Our senior training, helping our people to health and safety on year every We invest a considerable amount of hazards). including behaviour, behaviour (and positive reporting of unsafe reporting have honest we that and robust is culture safety our that we confident are Overall, than soldiering on. rather themselves after are looking been reported and that people thatpleased these matters have we are work, at injured anyone see wants Whilemishaps. no-one to involving back and minor pain slips, were minor, incidents of the rest The 'how'. the versus safe towant stay we 'why' the at looking and results, FY19 In five years five In 10.9% their areas of expertise. of expertise. areas their there is a clear succession plan for part-time arrangements) and that through (for example work smoothly of out to transition supported are older people consider retirement they our as that to ensure is goal Our us. their trade apprenticeships with foropportunities people to complete offered and teams our to join graduates) (often professionals young encouraged we have actively on, passed are skills their that ensure considering retirement. To help be soon may staff experienced of our percentage A significant 45). page (see business our of part the people puzzle in the generation of part one only is balance Gender next the to generation one From of training. state current contractors all detailing adatabase including first, industry an tool, competency and training aspecific launch proudly will group Live Stay the year this Later groups. working multiple on and forum of the chair –as involved We have several Meridian people 22.5% In ten years ten In 72 Meridian Annual Report 2019 Our powerful future Menu and state governments. and state commitment from federal is less renewables are exciting but there for opportunities the Australia, In hit its renewable energy targets. as the country looks for ways to generation more viable becoming is solar and wind Zealand, New In future powerful Our 73 Meridian Annual Report 2019 Our powerful future Menu route for the Manawatū Gorge Gorge Manawatū route for the areplacement (NZTA) have proposed the New Zealand Transport Agency farm, Te our at wind Āpiti Meanwhile, Board approval. Meridian to final subject of 2020, beginning the at works physical start to we intend variation, the granted we be Should turbines. wind larger to accommodate consent to the including applying for a variation Hawke’s Bay, in farm wind consented Preliminary work continues with our to this). add may economy in thedecarbonisation efforts wider (accelerated decade next over the of demand to 4,000GWh 2,000 years, which equates to an additional few next for the year per 0.5–1% least of at demand in increase overall an we forecasting are wayBy of context, 390GWh. afurther for underway investigations and 1,135GWh on options consents, of 1,148GWh in New Zealand significantly, with to increase renewable generation represent opportunities important investigated further. Together these being or either consented are that options of generation we have aportfolio end, year At pipeline in New Zealand Wind generation Because this matter is so important important so is matter this Because shareholders could be affected. to our return asteady provide to ability our from, to generate water we have If less risk. financial however,do, asignificant represent to water access to our changes Any energy generated for the country). decrease the amount of renewable (which would any less or impacts) could increase environmental (which water for any more asking we not are meaning for-like basis, alike- on scheme the consenting re- on work We have begun 2025. in expire Zealand, New in providing renewable energy for Scheme, which plays a critical role Power Waitaki the for consents Our underway Waitaki reconsenting around Conversations minimised. can be any impacts that hopeful remain to manage construction, and we aconsortium appointed NZTA has To date of turbines. removal the avoid wind farm during construction, and of the operation continued the ensure NZTA to is with through this working available to New Zealand. Our goal in amount of renewable generation the reduce and financially, us affect could This site. our through go directly will 3that Highway of State section better. One of the major attractions attractions major of the One better. Thatbarriers. is changing for the significant have been networks energy into standard it integrating building wind infrastructure and then in involved costs the Globally, connections for both. provides and co-benefits meaningful away in that communities with work to for us opportunities creating still framework more streamlined while make the Resource Management Act to Government the to engage able be year, this we will later Bill Amendment Change Response (Zero Carbon) Climate of the passing expected the generation. Our hope is that, with consents for renewable electricity fair and balanced conversation on for a allow view our in not does Act The current Resource Management hurdle. biggest our remains of Consentinga options. portfolio goodmaking progress in building Zealand, New in sites wind new several to investigate We continue Removing the barriers 2022/23. around application our to lodge expect either planned or underway. We stakeholders, with scientific studies conversations with most of our into early we have entered to us, other country in the world. world. the in country other any virtually than in network overall into the solar and like wind generation cheaper integration of intermittent backbone enables much and easier hydro our that is of integration advantage in Aotearoa in terms geothermal and hydro. Another key renewable energy alongside wind, of amounts way to significant make unsubsidised an represent well may cost of utility-scale solar installations the in decline acontinuing 10 years within and price, in down coming is more efficient.Solar generation too becoming is machinery the and significantly reduced has cost that the for more wind generation now is 74 Meridian Annual Report 2019 Our powerful future Menu market structure and the introduction we remain confident that the current So to rise. continues of carbon price the and to fall continues technology of wind cost the as particularly retire, they as stations power fossil-fuel additional and capacity to replace and most viable option for building generation being the cheapest wind and to geothermal points regulatory perspective. Everything environmentally and from a world, the in best of the one is market our that We’re confident of flexible hydro generation. framework and a significant volume regulatory robust market, a future, including a mature wholesale electricity carbon low avery for necessary are that features the of have many we already In addition, countries. other most than more geothermal. This is significantly and water, wind through primarily around 85% renewable electricity, New Zealand currently generates carbon zero be to electricity Zealand New for determination Our

non-fossil-fuel dependent ways. in deficits those meet could system the how We investigating are years. some in occur that deficits energy 3,000–5,000GWh the to handle activated be can it that in useful is Stored thermal generation capacity spells. dry extended as such events make up for longer-term climatic to fuel thermal needs still country the because expensive and difficult more be 5% will last the though, report, year’s last in we discussed As retired). are plants scale thermal (once larger years 10–15 next the least 95% renewable energy within forneeded Aotearoa to reach at incentives investment create the will Trading Scheme Emissions the through pricing carbon of increased the Powershop brand. brand. the Powershop through for us growth customer continued supports it and country; for the good it’s market; Australian the in to consumers attractive increasingly is it key advantages: renewable energy as this has three in to invest to continue is plan term to long- medium- Our volume. generation Group overall 5% of our around represents which 728GWh, generation at is sitting around In Australia, our annual renewable to renewable energy. system electricity Australian of the acan support faster conversion we how to investigate continue Affordable and Clean Energy, we SDG7 and Action SDG13 Climate to commitment of our As part acceptable price and reliability. maintaining while the sector The challenge is to decarbonise production. ofmajority electricity the up makes still generation fossil-fuel-based where Australia, in complicated more are Things Australia in for renewables challenges and Opportunities Rewarding Menu strong performance Rewarding strong performance strong Rewarding Meridian Annual Report 2019 75 76 Meridian Annual Report 2019 Rewarding strong performance Menu competitively for their contributions. their for competitively to remunerate and them business people we can, to retain them in our best the remunerationour to attract Weshareholders. have structured our for returns strong deliver to We depend heavily on our people business a As 77 Meridian Annual Report 2019 Rewarding strong performance Menu outcomes on an annual basis. financial performance targets and scorecard objectives, company Board approves executive balanced recommendations to the Board. The provides and practice and reviews remuneration policy Resources regularly Committee The Remuneration and Human • • • • • • remuneration will that principles by the guided is Our remuneration philosophy success. is key to Meridian’s and long-term shareholder value, performance business desired delivering for them rewarding motivating talented people, and and retaining Attracting, remunerating our people to approach Our shareholder value. align with creating performance recognise and reward high organisational context market conditions and the appropriately reflect be fair, equitable and flexible and engage employees retain to attract, us support and strategy company values, culture be clearly aligned with our

at the discretion of the Board. the discretion of at the and met, are hurdles performance and non-financial financial specific incentives,based awarded only if LTI plan are variable, performance- the and scheme STI the (LTI) Both plan. participate in a long-term incentive to opportunity have the also (CE) Executive Team and Chief Executive The discounts. to purchasing access to purchase additional leave, and parental leave provisions, the ability employee insurance, enhanced including provided, is of benefits all permanent employees. A range Meridian pays the Living Wage for aminimum, As Board. of the invitation and discretion the at scheme (STI) participate in a short-term incentive and permanent employees may data remuneration to market Fixed remuneration is benchmarked of predetermined company profit profit company of predetermined STI payments reflect the achievement invitation from the Board. Potential by year for aspecific offered be may which incentive, at-risk an is STI The (STI) incentive Short-term annually. are reviewed Salaries to of up 4%. contributions KiwiSaver matched and salary Fixed remuneration includes base Fixed remuneration was 30%. opportunity Team STI Executive the and salary, of of 40% opportunity an STI had CE The roles. of the levels and remuneration reflects the complexity withinThe STI total opportunity the Board. of discretion the at and hurdles, company financial performance and gate to abehaviour subject paid be may STI An discretionary. wholly are and goals, and strategy to business aligned objectives levels and individual performance are provided on page 84. 84. page on provided are LTI of the plan details Further period. of athree-year conclusion the at and relative performance TSR hurdles absolute both meeting on contingent Team. LTI of the Vesting Executive is for the of salary 30% and CE for the of salary 40% is LTIThe opportunity optimise long-term shareholder returns. and shareholders’ interests and executives’ Team, to align Executive Zealand New to the Board of the discretion the at LTI offered An is plan Long-term incentive (LTI) 78 Meridian Annual Report 2019 Rewarding strong performance Menu $100,000 is outlined opposite: outlined $100,000 is compensation) exceeding contributions and redundancy performance incentives, KiwiSaver benefits (including at-risk cash remuneration and other 2019 received June 30 ended year the during who directors) (not including its subsidiaries and former employees of Meridian and of employees number The Employee remuneration range participated in MyShare. of employees 50% FY19, In Shares). competitors (Performance Award of group apeer outperforming TSR Award Shares) and the company to ongoing employment (Tenure eligible for award shares subject be may participants years, three After annum. per $5,000 and $500 monthly pay of deductions between participating employees, funded by Meridian shares are purchased for plan, MyShare. Under MyShare, Meridian’s employee share ownership to join invited are Employees Employee share ownership $260,000–269,999 $250,000–259,999 $240,000–249,999 $230,000–239,999 $220,000–229,999 $210,000–219,999 $200,000–209,999 $190,000–199,999 $180,000–189,999 $170,000–179,999 $160,000–169,999 $150,000–159,999 $140,000–149,999 $130,000–139,999 $120,000–129,999 $110,000–119,999 $100,000–109,999 Band Remuneration employees Number of 46 66 57 75 37 10 10 18 31 12 21 4 9 3 3 3 7 31. $1,400,000–1,499,999 $1,030,000–1,039,999 $760,000–769,999 $730,000–739,999 $690,000–699,000 $670,000–679,999 $610,000–619,999 $520,000–529,999 $490,000–499,999 $470,000–479,999 $380,000–389,999 $360,000–369,999 $330,000–339,999 $320,000–329,999 $310,000–319,999 $300,000–309,999 $290,000–299,999 $280,000–289,999 $270,000–279,999 Energy Limited and its subsidiaries. its and Limited Energy Meridian by employed no longer are who employees 29 includes This 448 4 4 4 3 3 31 2 2 2 2 1 1 1 1 1 1 1 1 1 1 79 Meridian Annual Report 2019 Rewarding strong performance Menu Year Year Year Five year remuneration summary 2018 June 30 ending period performance for remuneration Executive Chief 2019 June 30 ending period performance for remuneration Executive Chief Neal Barclay CE2 FY18 Mark Binns Mark CE1 FY18 FY18 CE Total CE FY18 ExecutiveChief remuneration FY19 Neal Barclay Neal FY19 FY15 FY16 FY17 FY18 FY19 $1,120,545 $475,000 $645,545 $973,750 salary salary Base Base Base Base Single figure

$2,370,556 $2,156,484 $2,379,768 $1,695,195 $1,909,121 benefits benefits $44,822 $38,950 Taxable Taxable $19,000 $25,822 rem

32 32 $1,165,367 $1,012,700 $494,000 $671,367 Fixed Fixed Fixed Fixed rem rem against maximum against 33 33

MyShare MyShare 86.34% 79.29% 82.93% 90.91% 72.8% $2,500 $2,500 $4,274 % STI % STI $1,774

34 34 $384,919 $431,086 $216,999 $167,920 Pay for performance Pay for performance against maximum against STI STI 35 35 % vested LTIs % vested $601,924 $244,023 $248,909 $357,901 100% 100% 100% 75% LTI LTI n/a 37 36 36

$986,843 $574,900 Subtotal Subtotal $679,995 $411,943 performance period $2,156,484 Span of LTI of Span FY14–FY16 FY16–FY18 FY15–FY17 $1,248,041 FY17–FY19 $1,695,195 $908,443 Total Total Total Total rem rem

37 36 35 34 33 32 Barclay. for Neal were $57,608 company’s KiwiSaver contributions the LTI). the and STI FY19 the In both gross taxable earnings (including of 4% of contribution employer amatching to receive entitled CE is the of KiwiSaver, amember As KiwiSaver • • Notes vested in FY16. Prior to that no LTI was offered. LTI was no that to Prior FY16. in vested plan first the and FY14 in introduced was LTI plan The KiwiSaver contributions. company 4% includes PAYE for and up grossed LTI is and includes 4% company KiwiSaver contributions. period applicable the for performance achieved on based payment potential the is STI in the applicable period. MyShare is gross value of award shares received KiwiSaver contributions. Fixed remuneration is plus salary company contributions on salary. Taxable benefits are 4% company KiwiSaver was in a previous management role. scheme, from when Neal Barclay LTI FY17 of the vesting full to the relating LTI payment is The figure MyShare plan. FY17 the in to participation related MyShare is the award $2,500 shares 80 Meridian Annual Report 2019 Rewarding strong performance Menu Employees Development Future Customer Financial/Stewardship Performance area FY19 for Measures Scorecard Performance for Pay LTI STI Description (FY19) performance for pay Executive Chief of Breakdown Environment LTI plan. 40% of base salary. Conditional awards of shares under company measures. of financial and non-financial ascorecard and result of company Combination salary. base of 40% • Absolute TSR over the relevant assessment period: below. table the in shown as scorecard comprising financial and non-financial objectives, aBoard-approved against performance on weighting 40% charge). capital EBITDAF minus Group which comprises (company profit, performance company on weighting 60% Performance measures • • • Relative TSR—if positive and: • • • • • • • • • Measures • TSR of the peer group the of TSR percentile/median >50th and positive; be must progressively vests on a straight-line basis. astraight-line on vests progressively group, peer of TSRs percentile 75th and 50th the between vests 100% TSR, percentile ≥ 75th vests 50% least at group, peer of TSR percentile > 50th Diversity & Inclusion progress &Inclusion Diversity Culture Safety Engagement Wind development pipeline brand each for –measurement Score Promoter Net Australian customer numbers New Zealand retail netback Delivery of consenting milestones Total Shareholder Return Progress against initiatives sustainability 38 . % achieved Hurdle met Hurdle Weighting 126.7%

100% 20% 25% 25% 76% 15% 15% 38 Trustpower and Genesis Energy. NZ, Mercury Energy, Contact Origin Energy, Energy, AGL comprises group Peer 81 Meridian Annual Report 2019 Rewarding strong performance Menu 40 60 50 30 20 validated by external experts. experts. by external validated outcomes are independently 2019. performance June TSR 30 and 2015 June 30 between companies of group apeer shares against the performance of Meridian’s illustrates above summary TSR The group peer vs Energy (Meridian Five-year summary – performance % 39 10 0 Mercury NZ, Trustpower and Genesis Energy. Energy, Origin Energy, Contact Energy, AGL comprises group Peer FY15 33% 9%

FY16 31% 11%

FY17 18% 17%

39 )

FY18 14% 9%

43% 59% FY19

Meridian Peer group median $000 of total remuneration. remuneration. of total aproportion 2019 as June 30 ended under various scenarios for the year design remuneration CE’s of the The above chart elements depicts 2,000 Chief ExecutiveChief pay performance remuneration for FY19 2,500 1,000 1,500 500 0 Fixed remuneration 100% Meets expectations Meets 60% 22% 18% Maximum 48% 23% 29%

Fixed remuneration Annual Variable LTI 82 Meridian Annual Report 2019 Rewarding strong performance Menu Deputy Chair Deputy Chair Position held Individual Board – approved annual fee breakdown 2016. October of 28 Meeting Shareholder Annual the at by shareholders approved was that pool fee director total the from paid is remuneration Director Approved for FY19 remuneration director Total pool fees Committee Board fees Safety & Sustainability Committee member Committee Safety & Sustainability Chair Committee Safety & Sustainability member Committee &Risk Audit Chair Committee &Risk Audit Director Remuneration & Human Resources Committee member member Committee Resources &Human Remuneration Chair Committee Resources &Human Remuneration $1,000,000 $1,100,000 $200,000 $100,000 $140,000 $110,000 $22,500 $10,000 $15,000 $15,000 $9,200 $9,100 FY18 FY18 $1,000,000 $1,100,000 $200,000 $100,000 $140,000 $110,000 $22,500 $10,000 $15,000 $15,000 $9,200 $9,100 FY19 FY19 83 Meridian Annual Report 2019 Rewarding strong performance Menu Reindler Stephen Anake Goodall Mark Cairns Mark Jan Dawson Jan Mary DevineMary (Deputy Chair)(Deputy Wilson Peter (Chair) Chris Moller director of Name 42 41 40 FY19. in by directors were received benefits or payments No additional directors. Meridian as duties their performing in incurred Directors are reimbursed for all reasonable and properly documented expenses Director remuneration received in FY19 received in FY19 remuneration Director Mark VerbiestMark Total Steve Reindler resigned from the Board effective 27 August 2018, so fees do not represent a full year. afull represent not do fees so 2018, August 27 effective Board the from 2018. resigned September Reindler from Steve Committee Sustainability and safety the of Chair became Wilson Peter Chris Moller does not receive additional fees for committee membership. 42 40 40 41 $200,000 $140,000 $110,000 $110,000 $110,000 $110,000 $110,000 $907,142 $17,142 Board Board fees

Audit & Risk &Risk Audit Committee $42,500 $22,500 $22,500 $10,000 $10,000 (Chair) – – – – –

Remuneration Remuneration Committee Resources & Human & Human $24,100 $15,000 $9,100 (Chair) – – – – –

Sustainability Sustainability Committee Safety & Safety $25,570 $14,033 $9,200 (Chair) $2,337 $2,337 – – – – –

remuneration $200,000 $120,000 $125,000 $132,500 $999,312 $164,033 $119,200 $119,100 $19,479 Total Total Michael Koziarski (independent director) Catherine Reynolds (independent director) Nicola Kennedy (independent Chair) 2019 was: June 30 ended year the during of Meridian of subsidiaries directors as capacity their in directors to non-executive paid Remuneration do not receive any directorship fees. any directorship do not receive Meridian employees appointed as directors of Meridian subsidiaries director of Name Flux Federation Limited Flux Federation Limited Flux Federation Limited Subsidiary $66,668 $46,667 $25,833 Fees 84 Meridian Annual Report 2019 Rewarding strong performance Menu • period: a three-year over met are hurdles performance following the whether on depend LTI plan trustee. Any shares awarded by the trust on held shares the with interest-free loan from the company, purchase Meridian shares via an executives where scheme, bonus cash and loan LTI ashare is The plan Long-term incentive (LTI) plan report components remuneration Other • • • many shares vest: how to determine applied is scale vesting aprogressive been achieved, have hurdles performance the If • The company’s absolute must TSR TSR of the peer group. peer of the TSR is thanTSR less the 50th percentile No shares will vest if the company’s points. two these between basis astraight-line on vesting group, with peer of the TSR percentile 75th the meeting on vest will shares 100% vest. will shares executive’s of an 50% least group, at peer percentile of TSR the benchmark three-year period exceeds the 50th over the TSR company’s the If group. peer to a benchmark The company’s compared TSR be positive; and

eligible participants. to the transferred been shares has of 223,623 Atotal repaid. been now has 2019 of $555,162 June 30 at loans interest-free of the balance outstanding the Therefore, 100%. was of vesting level the FY19, end of the at LTI vested the that For plan forfeited. be also vested will 75th percentile, shares that have not the below but peer group, benchmark greater than the 50th percentile of the is TSR the LTI Where the under plan. relevant executive receives no benefits the and trustee to the forfeited are shares the percentile, 50th of the hurdle TSR relative group peer the meet not does zero) TSR the if or than less is terms absolute in (i.e. positive not is TSR the If scale. vesting with the outcome on the progressive the peer group of companies along and of Meridian TSR the measures independent external expert For each three-year plan, an outstanding loan balance. executive’s to the repay used is other applicable deductions) salary before but of tax, the deduction (after amount acash confirmed, been has level vesting the Once termination of his employment. termination payments following the certain to receive entitled be will CE The committed. is of bankruptcy serious misconduct or where an act or of redundancy grounds the on also terminate the CE’s employment months’ written notice. Meridian may of six provision the on termination of rights have mutual Meridian and employment agreement, the CE agreement. Pursuant to the in accordance with his employment until his employment is terminated CE as employed be will Barclay Mr employment. of their terms the out setting executives with Meridian has written agreements plan. the in participating of risk economic the limit that otherwise) or derivatives of use the through (whether transactions into to enter permitted not LTI are plan Executive the of participants the that to ensure apolicy has Meridian Corporate Governance Statement in provided information Other 85 Meridian Annual Report 2019 Further disclosures Menu other rules. legislation or and 1993 Act Companies by the Listing NZX Rules, the required disclosures Further Further disclosures 86 Meridian Annual Report 2019 Further disclosures Menu as at 30 June 2019 is: June as at 30 and officers directors Meridian’s of make-up gender the Rules, Listing NZX the with accordance In team gender composition Executive and Board Current Corporate Governance Code. NZX the in out set factors the and Rules Listing NZX to the are independent having regard 2019, June directors 30 all at as that determined has Board The of Meridian Energy Limited. office as directors held who changes among the people The table opposite outlines Meridian Energy 43 directors of Number Company name Meridian Energy Limited Company name Percentage of officers of Percentage Number of officers of Number directors of Percentage Includes positions where there is a person acting in a role pending an appointment process. appointment an pending arole in acting aperson is there where positions Includes 43 (ceased 27 August 2018) August 27 (ceased Reindler Steve Wilson, Peter Devine, Mary Verbiest, Mark Anake Goodall, Chris Moller, Jan Dawson, Mark Cairns, Directors As at 30 June 2019 June 30 at As Female 28.6% 22.2% 2 2 77.8% 71.4% Male 5 7 As at 30 June 2018 June 30 at As Female 25.0% 12.5% 2 1 75.0% 87.5% Male 6 7 87 Meridian Annual Report 2019 Further disclosures Menu are indicated with an (A): an with are indicated directors Alternate directors. as office held who the people among and to those subsidiaries any changes and period, accounting the during Limited subsidiaries of Meridian Energy the list tables following The Meridian subsidiaries Three River Holdings No. 2Limited No. Holdings River Three 1Limited No. Holdings River Three Powershop New Zealand Limited Meridian LTI Trustee Limited Meridian Limited Meridian Energy International Limited Meridian Energy Captive Insurance Flux Federation Limited Dam Safety Intelligence Limited Company name subsidiaries Zealand New Jason Stein Jason 2019), May 28 (appointed Roan Michael Barclay, Neal Stein Jason 2019), May 28 (appointed Roan Michael Barclay, Neal 2019) April 12 (appointed Stein Jason 2019), May 28 (appointed Roan Michael Barclay, Neal Devine,Mary Anake Goodall Stein Jason 2019), May 28 (appointed Roan Michael Barclay, Neal Stein Jason 2019), May 28 (appointed Roan Michael Barclay, Neal Stein Jason 2019), May 28 (appointed Roan Michael Barclay, Neal (A) Blythe Gillian 2019), 5June (appointed Barclay Neal 2019), 5June (appointed Roan Michael Stein, Jason Stein Jason Barclay, Neal Directors

Kelvin Mason (A) (ceased 12 April 2019) April 12 (ceased (A) Mason Kelvin 2019), April 12 (ceased Chambers Paul 2019) April 12 (ceased (A) Mason Kelvin 2019), April 12 (ceased Chambers Paul 2019) April 12 (ceased Chambers Paul 2019) April 12 (ceased Chambers Paul 2019) April 12 (ceased Chambers Paul 2019) April 12 (ceased Chambers Paul 2019) 5June 2019, ceased February 19 (appointed Koziarski Michael 2019), June 5 (ceased (Gould) Reynolds Catherine 2019), 5June (ceased Kennedy Nicola 2019), April 12 (ceased Chambers Paul Further information 88 Meridian Annual Report 2019 Further disclosures Menu GSP Energy Pty Limited Pty Energy GSP Powershop Australia Limited Pty Limited Pty Farm Wind Mercer Mt Limited Pty Farm Wind Millar Mt Limited Pty Range Monaro Wind Meridian Holdings Pty Limited Meridian Wind Monaro Range Meridian Wind Australia Holdings Limited Pty Limited Pty Finco Meridian Meridian Energy Markets Limited Pty Meridian Energy Australia Limited Pty Meridian Australia Holdings Limited Pty Company name Australian subsidiaries Ed McManus, Gillian Blythe (appointed 24 July 2018) 24 July (appointed Blythe Gillian McManus, Ed 2019), June 12 (appointed Michael Roan Barclay, Neal 2018) 24 July (appointed Blythe Gillian McManus, Ed 2019), June 12 (appointed Michael Roan Barclay, Neal 2018) 24 July (appointed Blythe Gillian McManus, Ed 2019), June 12 (appointed Michael Roan Barclay, Neal 2018) 24 July (appointed Blythe Gillian McManus, Ed 2019), June 12 (appointed Michael Roan Barclay, Neal 2018) 24 July (appointed Blythe Gillian McManus, Ed 2019), June 12 (appointed Michael Roan Barclay, Neal 2018) 24 July (appointed Blythe Gillian McManus, Ed 2019), June 12 (appointed Michael Roan Barclay, Neal 2018) 24 July (appointed Blythe Gillian McManus, Ed 2019), June 12 (appointed Michael Roan Barclay, Neal 2018) 24 July (appointed Blythe Gillian McManus, Ed 2019), June 12 (appointed Michael Roan Barclay, Neal 2018) 24 July (appointed Blythe Gillian McManus, Ed 2019), June 12 (appointed Michael Roan Barclay, Neal 2018) 24 July (appointed Blythe Gillian McManus, Ed 2019), June 12 (appointed Michael Roan Barclay, Neal 2018) 24 July (appointed Blythe Gillian McManus, Ed 2019), June 12 (appointed Michael Roan Barclay, Neal Directors Paul Chambers (ceased 12 April 2019) April 12 (ceased Chambers Paul 2019) April 12 (ceased Chambers Paul 2019) April 12 (ceased Chambers Paul 2019) April 12 (ceased Chambers Paul 2019) April 12 (ceased Chambers Paul 2019) April 12 (ceased Chambers Paul 2019) April 12 (ceased Chambers Paul 2019) April 12 (ceased Chambers Paul 2019) April 12 (ceased Chambers Paul 2019) April 12 (ceased Chambers Paul 2019) April 12 (ceased Chambers Paul Further information 89 Meridian Annual Report 2019 Further disclosures Menu Limited and its subsidiaries: Energy of Meridian by directors of interest general disclosures the lists opposite table 1993, the Act and 211(e) Companies of the In accordance with 140 sections request. register on interests full Limited’s Meridian Energy Shareholders can review period the accounting during made register interests the in entries of Particulars Chris Moller Anake Goodall Dawson Jan Cairns Mark Name Flux-UK Limited Company name subsidiary UK Mary DevineMary Chair, Meridian Energy Limited and Meridian LTI Trustee Limited Limited Energy Meridian Director, Director, Meridian Energy Limited Director, Meridian Energy Limited Position and Meridian LTI Trustee Limited Limited Energy Meridian Director, Neal Barclay, Jim Barrett Jim Barclay, Neal Directors Westpac New Zealand Limited—Director Trustpower Limited—Bondholder Contact Energy Limited—Shareholder Seed The Change – He Kākano Hāpai—Chair Moreton Resources Limited (formerly Cougar Energy Limited)—Shareholder Impax Environmental Markets—Shareholder Limited—Director Group Beca Air New Zealand Limited—Director, Shareholder and Bondholder AIG Insurance New Zealand Limited—Director Limited—Director Northport MarshallingQuality Limited—Chair Port of Tauranga Trustee Company Limited—Director Port of Tauranga Limited—Employee Coda GP Limited—Director Disclosures Briscoe Group—Director Briscoe IAG (NZ) Holdings Limited—Director IAG New Zealand Limited—Director 2019) 1April from Director (Managing Hallenstein Holdings Glasson Limited—Director South Limited—Director Island Foodstuffs (NewFoodstuffs Zealand) Limited—Director Christchurch Holdings City Limited—Director 2015) March from (Chair Limited—Director Zealand New Westpac Mercury NZ Limited—Shareholder 44 Ari Sargent (ceased 3 May 2019) 3May (ceased Sargent Ari 2019) April 12 (ceased Chambers Paul Further information 44

44 44 45 45 44 90 Meridian Annual Report 2019 Further disclosures Menu 45 44 Peter Wilson Name Mark VerbiestMark Entries added by notices given by directors during the year ended 30 June 2019. June 30 ended year the during directors by given notices by added Entries 2019. June 30 ended year the during directors by given notices by removed Entries Director, Meridian Energy Limited Position Director, Meridian Energy Limited Willis Bond General Partner Limited—Chair Willis Bond Capital Partners Limited—Chair and Shareholder Farmlands Trading Limited—Director Society Contact Energy Limited–Shareholder Group—Chair Arvida Disclosures Aspiring Foundation Trust—Trustee Limited—Director Zealand New Bank ANZ UDC FinanceUDC Limited—Chair Spark New Zealand—Shareholder Southern Alps Rescue Trust—Trustee Southern Lakes Festival Arts Trust—Trustee NZ Council of Women—Advisory panel member New Zealand Treasury Commercial Operations Advisory Board—Member New Zealand Treasury Advisory Board Mycare Limited—Chair and Shareholder Infratil Limited—Shareholder Freightways Limited—Chair and Shareholder Bear Fund NZ Limited—Director Mercury NZ Limited—Shareholder Mercury NZ Limited—Bondholder Infratil Limited—Shareholder EnergyGenesis Limited—Shareholder EnergyGenesis Limited–Bondholder 45 45 (ceasing 30 September 2019) September 30 (ceasing 44 44 44 44 44 44 91 Meridian Annual Report 2019 Further disclosures Menu malicious or wilful or acts omissions. provided for fraudulent, dishonest, not is Insurance by such policies. covered normally to cover risks insuranceliability was renewed officers’ and Meridian’s directors’ 2019, From 1May directors. as inor omissions their capacity for actions incur might they costs directors for potential liabilities and of have Indemnity been given to by Meridian’s constitution, Deeds asCompanies permitted Act 1993, of the 162 to section Pursuant Director Indemnity during the financial year. in Meridian Energy Limited Securities interests of relevant acquisition the 1993, Act Companies of the 148 section with accordance in disclosed, had Limited Energy of Meridian director 2019 one June 30 at As

Limited and trustee reporting. Meridian Energy Captive Insurance of return LTI solvency plan, executive ofthe vesting registers, securities reviews of carbon emissions, assurance including activities other to related These million). $0.1 (2018: million $0.1 totalled FY19 during undertaken by DeloitteLimited services for other fees The FY19. in fees audit Limited as to Deloitte million) $0.7 (2018: its subsidiaries paid million $0.8 company Meridian and since FY16. of the auditor the been has Deed Mr company. of the auditor as Limited Trevor of Deloitte Deed The Auditor-General has appointed Auditor by the Board. All donations must be approved donations to political parties. make not does Meridian FY19. donations totalling $250,000 during made Group Energy Meridian The Donations relevant interest of Nature Beneficial interest Cairns Mark Date 2 April 2019 2 April

Disposal Acquisition/ Acquisition Director Financial Products: Products: Financial in Meridian Energy Limited Quoted interests relevant following the had Meridian Energy Limited directors 3.7.1(d),Rule 2019 June 30 at as Listing NZX with accordance In Interests in Meridian Securities Mark VerbiestMark Peter Wilson Chris Moller Anake Goodall DevineMary Dawson Jan Cairns Mark

Class Shares of shares 235,000 Number Number 60,000 35,000 92,880 51,300 99,170 51,510

Guy Waipara Smith Julian Roan Mike Neal Barclay Limited equity: interests in Meridian Energy senior managers had relevant 2019, June following 30 the at As holdings equity Senior managers’ # acquired or or # acquired (disposed) 35,000 or received per share per received or Consideration paid Consideration Number of shares 226,932 444,618 327,517 41,873 $4.174

92 Meridian Annual Report 2019 Further disclosures Menu shareholders as at 30 June 2019: June 30 as at shareholders company’s 20 largest registered the lists opposite table The date balance the at as Products Financial Quoted of holders registered Twenty largest BNP Paribas Nominees (NZ) Limited (NZ) Nominees Paribas BNP FNZ Custodians Limited HSBC Custody Nominees (Australia) Limited Limited Nominees (NZ) JBWere NomineesHSBC (New Zealand) Limited SOEs for Minister and Finance of Minister Her Through and by Acting Zealand New of Right In Queen The Majesty Her J.P. Morgan Chase Bank Na NZ Branch-Segregated Clients Acct Clients Branch-Segregated NZ Na Bank Chase J.P. Morgan TEA Custodians Limited Client Property Trust Account Trust Property Client Limited Custodians TEA Forsyth Barr Custodians Limited ANZ Wholesale Australasian Share Fund Custodial Limited Services BNP Paribas Nominees (NZ) Limited (NZ) Nominees Paribas BNP NomineesHSBC (New Zealand) Limited 46 NZCSD. through were held issue) on shares (or 23.74% ordinary shares of the ordinary Meridian 2019, June 30 608,582,499 at As Custodial Limited Services Names Citicorp Limited Nominees Pty Accident Compensation Corporation Citibank Nominees (New Zealand) Limited HSBC Nominees A/C NZ Superannuation Fund Nominees Limited Nominees Fund Superannuation NZ A/C Nominees HSBC Custodial Limited Services National Nominees New Zealand Limited Held through New Zealand Central Securities Depository Limited (NZCSD). NZCSD provides a custodial service that allows electronic trading of securities by its members. members. its by securities of trading electronic allows that service acustodial provides NZCSD (NZCSD). Limited Depository Securities Central Zealand New through Held 46 46 46 46 46 46 46 46 46 46 46

Number of shares 1,307,586,374 105,368,302 132,003,558 132,003,558 28,009,446 28,009,446 24,083,397 24,083,397 25,542,437 25,542,437 92,929,558 29,878,669 29,878,669 27,335,668 18,825,645 39,779,307 39,779,307 14,869,829 73,813,643 15,307,568 17,396,036 17,396,036 21,626,958 21,626,958 10,628,541 10,628,541 18,292,610 29,273,158 29,273,158 24,591,171 % of issued shares issued % of 51.02 0.74 0.84 0.94 0.96 0.68 0.71 0.60 0.42 0.58 4.00 5.15 3.63 2.88 1.00 1.09 1.07 1.55 1.17 1.14 93 Meridian Annual Report 2019 Further disclosures Menu bonds as at 30 June 2019: June 30 at as bonds fixed-rate retail of MEL030 holders company’s 20 largest registered the lists opposite table The J.P. Morgan Chase Bank Na NZ Branch-Segregated Clients Acct Clients Branch-Segregated NZ Na Bank Chase J.P. Morgan Custodial Limited Services Forsyth Barr Custodians Limited FNZ Custodians Limited University Of Foundation Otago Trust Custodial Limited Services FNZ Custodians Limited Limited Custodians FNZ Custodial Limited Services ANZ Custodial New Services Zealand Limited Custodial Limited Services Gao Ning BNP Paribas Nominees (NZ) Limited (NZ) Nominees Paribas BNP Mt Nominees Limited Investment Custodial Services Limited 46 Limited (NZ) Nominees Paribas BNP Names FNZ Custodians Limited Citibank Nominees (New Zealand) Limited Forsyth Barr Custodians Limited Limited Custodians Barr Forsyth TEA Custodians Limited Client Property Trust Account Trust Property Client Limited Custodians TEA Limited Custodians Barr Forsyth Held through New Zealand Central Securities Depository Limited (NZCSD). NZCSD provides a custodial service that allows electronic trading of securities by its members. members. its by securities of trading electronic allows that service acustodial provides NZCSD (NZCSD). Limited Depository Securities Central Zealand New through Held 46 46 46 46 46 46 46 Number of bonds of Number 16,800,000 13,300,000 22,087,000 12,444,000 4,000,000 13,041,000 5,048,000 2,220,000 5,335,000 1,400,000 2,493,000 2,992,000 2,657,000 2,327,000 3,331,000 1,100,000 2,612,000 1,752,000 1,105,000 1,132,000 % of issued shares issued % of 14.72 11.20 8.30 0.93 3.56 8.69 0.75 0.73 0.74 2.22 3.37 8.87 2.67 1.66 1.48 1.55 1.99 1.74 1.77 1.17 94 Meridian Annual Report 2019 Further disclosures Menu bonds as at 30 June 2019: June 30 at as bonds fixed-rate retail of MEL040 holders company’s 20 largest registered the lists opposite table The Woolf Fisher Trust Incorporated 46 Limited (NZ) Nominees Paribas BNP Names BNP Paribas Nominees (NZ) Limited (NZ) Nominees Paribas BNP Citibank Nominees (New Zealand) Limited H Investment Custodial Services Limited Custodial Limited Services FNZ Custodians Limited Custodial Limited Services Custodial Limited Services Forsyth Barr Custodians Limited JBW Forsyth Barr Custodians Limited New Zealand Methodist Trust Association Custodial Limited Services N National Nominees New Zealand Limited J TEA Custodians Limited Client Property Trust Account Trust Property Client Limited Custodians TEA Custodial Limited Services .P SBC Nominees (New Zealand)SBC Limited ZPT Held through New Zealand Central Securities Depository Limited (NZCSD). NZCSD provides a custodial service that allows electronic trading of securities by its members. members. its by securities of trading electronic allows that service acustodial provides NZCSD (NZCSD). Limited Depository Securities Central Zealand New through Held . Morgan Chase Bank Na NZ Branch NZ Na Bank Chase . Morgan ere (N ere Custodians (Grosvenor) Limited Z ) Nominees Limited 46 46 46 46 46 46 46 Number of bonds of Number 16,430,000 3,000,000 3,000,000 3,000,000 11,050,000 5,060,000 2,060,000 3,446,000 3,663,000 2,843,000 4,740,000 7,064,000 19,718,000 1,300,000 2,357,000 7,382,000 4,381,000 7,725,000 5,917,000 1,317,000 % of issued shares issued % of 10.95 2.00 2.00 2.00 0.88 2.30 13.15 2.44 0.87 4.92 3.94 3.37 2.92 1.90 7.37 3.16 5.15 4.71 1.57 1.37 95 Meridian Annual Report 2019 Further disclosures Menu bonds as at 30 June 2019: June 30 at as bonds fixed-rate retail of MEL050 holders company’s 20 largest registered the lists opposite table The HSBC NomineesHSBC (New Zealand) Limited BNP Paribas Nominees (NZ) Limited (NZ) Nominees Paribas BNP Investment Custodial Services Limited Limited Custodians Barr Forsyth Forsyth Barr Custodians Limited FNZ Custodians Limited Custodial Limited Services Risk Reinsurance Limited Mint Nominees Limited Mint Nominees TEA Custodians Limited Client Property Trust Account Trust Property Client Limited Custodians TEA HSBC NomineesHSBC (New Zealand) Limited 46 ANZ Custodial New Services Zealand Limited Names Custodial Limited Services Custodial Limited Services Mt Nominees Limited NZPT Custodians (Grosvenor) Limited Limited Nominees (NZ) JBWere Custodial Limited Services Citibank Nominees (New Zealand) Limited Custodial Limited Services Held through New Zealand Central Securities Depository Limited (NZCSD). NZCSD provides a custodial service that allows electronic trading of securities by its members. members. its by securities of trading electronic allows that service acustodial provides NZCSD (NZCSD). Limited Depository Securities Central Zealand New through Held 46 46 46 46 46 46 46 46 Number of bonds of Number 52,890,000 15,443,000 13,703,000 4,000,000 16,526,000 4,400,000 11,900,000 3,700,000 3,380,000 2,420,000 3,980,000 4,426,000 6,228,000 1,600,000 2,720,000 1,292,000 7,105,000 7,397,000 2,918,000 1,737,000 % of issued shares issued % of 26.45 0.80 2.00 0.65 2.20 6.85 3.55 0.87 3.70 8.26 5.95 1.46 1.69 1.36 1.85 1.99 7.72 2.21 1.21 3.11 96 Meridian Annual Report 2019 Further disclosures Menu ordinary shares as at 30 June 2019: 2019: June 30 at as shares ordinary Limited Energy of Meridian holdings distribution of holders security and the out sets opposite table The 2019 June 30 at as and holdings holders security of Distribution listed opposite: is securities of voting shareholder with the greatest number The 2,563,000,000. was securities Meridian Energy Limited voting of number total 2019 the June 30 at as 2013, Act Conduct Markets In accordance with the Financial securitySubstantial holder 5,001–10,000 1,001–5,000 Total over and 500,001 100,001–500,000 50,001–100,000 10,001–50,000 Size of holding Zealand New of Right in Queen the Majesty Her Shares Name 1–1,000 Number of holders 46,605 22,265 6,928 9,122 7,515 222 477 76 in number of shares of number in Relevant interest interest Relevant 1,307,586,374 47.77 14.87 19.57 0.48 16.12 0.16 1.02 100 %

at the date of notice of date the at Number of shares % of shares held held shares % of 2,563,000,000 2,202,026,728 33,868,592 141,242,728 72,051,243 65,194,757 41,953,272 6,662,680 51.02

Holding % quantity Date of notice of Date 21 May 2016 May 21 85.92 0.26 2.54 1.64 100 5.51 1.32 2.81 97 Meridian Annual Report 2019 Further disclosures Menu bonds as at 30 June 2019: June 30 bonds as at fixed-rate retail of MEL040 distribution the on information The table opposite provides 2019: June 30 bonds as at fixed-rate retail of MEL030 distribution the on information The table opposite provides 30 June 2019 as at statistics Bondholder 5,001–10,000 Size of holding Size of holding 5,001–10,000 1,001–5,000 100,001–500,000 50,001–100,000 10,001–50,000 1,001–5,000 10,001–50,000 500,001 and over and 500,001 100,001–500,000 50,001–100,000 Total over and 500,001 Total Number of bondholders Number of bondholders 800 455 742 188 413 113 46 49 39 26 37 78 27 71 % of bondholders % of bondholders 51.63 15.23 61.32 3.64 4.99 5.26 3.25 23.5 5.75 9.57 9.75 100 100 6.13 Number of bonds of Number Number of bonds of Number 150,000,000 150,000,000 122,836,000 121,645,000 4,083,000 11,393,000 5,430,000 12,441,000 9,510,000 1,058,000 1,788,000 9,231,000 390,000 195,000 % of bonds % of % of bonds % of 81.89 0.26 81.10 6.34 7.60 8.29 3.62 2.72 100 0.13 0.71 100 6.15 1.19 98 Meridian Annual Report 2019 Further disclosures Menu waivers and approvals. of any NZX acondition as required also is designation NS The securities. ownership and transfer of Meridian the regulate that requirements the company’s constitution, including of provisions to particular due is This designation on the Board. Main NZX (NS) a‘non-standard’ has Limited In New Zealand, Meridian Energy Non-standard designation waivers View are available on Meridian’s website. Meridian Energy Limited during FY19 by on relied waivers of the Details FY19. during by NZX published and were granted waivers No NZX from Waivers 2019: June 30 bonds as at fixed-rate retail of MEL050 distribution the on information The table opposite provides Size of holding • • following disclosures: the make must Meridian of admission arequirement As ASX. the on listing exempt aforeign holds Meridian ASX disclosures 396. 800 of 151 Number Body Registered Australian and with has been issued an as aCommission foreign company Australian Securities and Investments Meridian has registered with the as a foreign companyRegistration of BBB+/Stable/A-2rating Standard & Poor’s corporate credit Meridian Energy Limited had a 2019 June 30 at as rating Credit Total over and 500,001 100,001–500,000 50,001–100,000 10,001–50,000 5,001–10,000 1,001–5,000 substantial holdings and takeovers). acquisition of shares (including Corporations Act dealing with the Australian of the 6C and 6B 6A, 6, Meridian is not subject to Chapters New Zealand. Meridian’s place of incorporation is in FY19. FY19. in Number of bondholders classes of shares or voting securities. securities. voting or of shares classes other to those apply also will below future, the restrictions summarised the in rights, voting confer securities other or of shares, class any other issues company the below. If out set Finance Act and the constitution is ownership of shares under the Public the on restrictions of the A summary monitoring and enforcing them. restrictions and mechanisms for constitution incorporates these The restrictions. those of breaching Meridian) and the consequences ownership-model company (including mixed- by each issued of security types of certain ownership the on restrictions to 2012 include June in The Public Finance Act was amended Shareholding restrictions 392 672 103 30 89 29 29 % of bondholders 58.33 15.33 13.24 4.46 4.32 4.32 100 Number of bonds of Number 200,000,000 174,568,000 10,943,000 6,954,000 6,423,000 966,000 146,000 % of bonds % of 87.28 0.48 0.07 3.48 5.47 100 3.21 99 Meridian Annual Report 2019 Further disclosures Menu or potential breach. or potential breach of the company the notify must holder the Limit, 10% of the breach in shares in interest a relevant have may holder by that held shares in interest arelevant has who a person that believes or knows or Limit 10% the breaches of shares aholder If a breach has occurred whether Ascertaining may have a ‘relevant interest’ have a‘relevant may Crown) the (other than person No limit 10% holding. this 51% below Crown falling the in result acquisition or redemption would or redeem any shares if such issue, acquire issue, not must company The the shares on issue. of 51% least at hold Crown must The 51% holding Crown exceeding the 10% Limit. Limit. 10% the Crown exceeding the than other any person in result will acquisition, redemption or transfer issue, such that knowledge actual redeem or transfer any shares if it has acquire, issue, not must company The Limit). issue (10% on shares of the 10% more than 47 in in on these matters. matters. on these before it makes a determination representations to the company shareholder to the opportunity make affected the give must company The inadvertent. was breach that not or whether so, if and, breached been has Limit 10% the not or whether to determine required is Meridian • • if: terms, broad In occurred. has Limit 10% of the abreach whether determine to power the has company The occurred has a breach whether Determining behalf of that holder. of that behalf on by or held shares the a result of as shares in interests have relevant applicable, details of all persons who where to include, required is 10% Limit. That statutory declaration of the breach in to be, likely is or is, aperson that believes or knows Board the if declaration a statutory shares to provide the company with of aholder require may Meridian the company, the reasonable satisfaction of to completed been not has that adeclaration lodges or so to do statutory declaration when required a to lodge fails of shares a holder or 10% Limit; of the breach in be may the company considers that a person • • Limit must: 10% of the breach in is who A person Limit 10% the exceeding of Effect 47 after the sale has been completed. shareholder as soon as practicable relevant to the Limit), 10% of the breach the of investigating costs the the sale (including brokerage and costs incurred in connection with after the deductionof any other of sale, proceeds net the pay will In those circumstances the company behalf of the relevant shareholder. on of shares number relevant of the company may arrange for the sale remedied within that timeframe, the not is breach the If breach. the of aware, to have been ought or aware, became they which on date breach within 60 days after the ensure that they are no longer in Limit 10% the below holding their reducing and breach the remedying of purpose for the notice, the in specified are that steps any other relevant interest in shares, or take their or of shares to dispose them receive from the company requiring comply with any notice that they relationship between them. the of nature the on depending interest’ ‘relevant a has person another which in ashare in interest’ a‘relevant have also may Aperson share. that of, disposal or acquisition the control to or of, dispose or acquire to power the has or share the to attached vote to aright of, exercise the control or exercise, to power the (b) has or share; the of owner beneficial or holder registered the (a) is person the if a share in interest’ a‘relevant has aperson terms, broad In 100 Meridian Annual Report 2019 Further disclosures Menu is held in excess of the 10% Limit). Limit). 10% of the excess in held is interest arelevant which in shares the shareholder or holder (and not just (as applicable) held by the relevant shares of the of all respect in apply will paragraphs preceding the in and other distributions described and entitlement to receive dividends inadvertent, the restrictions on voting not was breach the that determine to information have sufficient not not inadvertent, or that it does was Limit 10% of the abreach that However, determines Board the if • • continues: breach that as long for as then, Limit 10% of the breach in shares any in held is interest arelevant If of the shares. of the respect in Board by the authorised any dividend or other distribution Limit, 10% of the excess in held is shares in which a relevant interest of the respect in to receive, entitled be not will Limit 10% of the breach in held is interest arelevant which in of shares holder a registered Limit 10% of the excess in is held shares in which a relevant interest of any of the respect in shareholder by a directly cast be votes may no 10% Limit’ above. the exceeding ‘Effect of heading has arisen as described under the share that relevant of the of sale apower to exercise or occurred has Limit 10% of the breach whether a investigate the company to may require the Crown breach, the suspected to investigate steps taken not has Board the but breached been Limit has 10% the that suspects the Crown where the constitution. For example, under it on conferred powers the of certain to exercise Board the to direct power the Crown has The Crown directions such statutory declaration. to provide transferee to the notice gave company the which on date of the days 14 within Board by the it statutory declaration requested from a to lodge failed has transferee the where or Limit 10% of the abreach in result will transfer the that believes or knows it if of shares a transfer to register refuse may Board The is current as at 26 August 2019. 26 at August as current is The Corporate Governance Code Governance Statement View Corporate and is available on our website. NZX Corporate Governance Code the with compliance our outlines Governance Statement, which Meridian has a separate Corporate Code Governance Corporate NZX applicable, shareholders. where and, Board by the approved or other form of reconstruction capital reduction of share capital, buyback a through by Meridian cancelled be can shares circumstances certain In Share cancellation that conditions certain are satisfied. provided Limit 10% the from exempt underlying beneficial holders) are of separate number of alarge behalf companies (that hold securities on Trustee corporations and nominee and nominee companies Trustee corporations

101 Meridian Annual Report 2019 Further disclosures Menu Temp/fixed term time part time full term Temp/fixed employees term Temp/Fixed Permanent time part Membership of associations 50 49 48 Permanent employees Workforce Group Meridian Other Large Expenditures (Business NZ) Electric) Drive Hydrogen, NZ NZWEA, (CEC, advocacy energy Clean Sustainable business SBN) (SBC, Australian(ERANZ, Energy Council) customers electricity to Value contributions Largest (NZD) spent Total Total Permanent full time 7.79% of these staff are covered by collective bargaining agreements. bargaining collective by Zealand. New covered are staff Federation these Flux of 7.79% for work employees these of 158 Zealand. New Powershop for work employees these of 143 male). (all UK the in based are employees these 3 of 48 New Zealand Female $162,365 469 $82,000 $21,000 $52,365 418 $7,000 16 18 17 FY16 49 Male 533 501 10 18 4 $242,513 $34,500 $167,763 $18,500 $21,750 FY17 Australia Female 20 19 – – 1 $246,463 $32,000 $22,450 $24,250 $167,763 FY18 50 Male 57 51 3 2 1 $211,927 $32,000 $35,400 $122,077 $22,450 1,079 Total FY19 989 29 24 37 Financial Menu performance Financials Meridian Annual Report 2019 102 And as a result... Menu

Financials This year we achieved our best ever financial result by generating strongly into favourable wholesale market conditions, by focusing on growing our customer base and by encouraging our retail brands

Meridian Annual Report 2019 in Australia and New Zealand to build customer loyalty. 103 Group financial statements Notes to the Group financial statements Menu 105 Income Statement 109 About this report The income earned and operating expenditure incurred by the Meridian 111 Significant matters in the financial year Group during the financial year. 112 A. Financial performance 105 Comprehensive Income Statement Items of income and operating expense, A1. Segment performance A3. Expenses that are not recognised in the income A2. Income A4. Taxation statement and hence taken to reserves in equity. 118 B. Assets used to generate and sell electricity

106 Balance Sheet B1. Property, plant and equipment B3. Customer contract assets A summary of the Meridian Group B2. Intangible assets

Financials assets and liabilities at the end of the financial year. 123 C. Managing funding

107 Statement of Changes in Equity C1. Capital management C6. Trade receivables Components that make up the capital C2. Share capital C7. Borrowings and reserves of the Meridian Group and C3. Earnings per share C8. Finance lease payable the changes of each component during C4. Dividends C9. Commitments the financial year. C5. Cash and cash equivalents 131 D. Financial instruments used to manage risk 108 Statement of Cash Flows Cash generated and used by the D1. Financial risk management Meridian Group.

143 E. Group structure

E1. Subsidiaries

144 F. Other

F1. Share-based payments F4. Contingent assets and liabilities Key F2. Related parties F5. Subsequent events

Meridian Annual Report 2019 F3. Auditors remuneration F6. Changes in financial reporting standards

147 Signed report Subsequent Key judgements Risks event and estimates Independent auditor’s report 104 Income Statement Comprehensive Income Statement Menu

2019 2018 2019 2018 Note $M $M Note $M $M Operating revenue A2 3,491 2,762 Net profit after tax 339 201 Operating expenses A3 (2,653) (2,096) Other comprehensive income Earnings before interest, tax, depreciation, amortisation, changes in fair value of hedges Items that will not be reclassified to profit or loss: and other significant items (EBITDAF) 838 666 Asset revaluation B1 1,139 – Depreciation and amortisation A3 (276) (268) Deferred tax on the above item A4 (320) – Impairment of assets A3 (5) (2) 819 – Gain on sale of assets A3 3 7 Net change in fair value of electricity and other hedges D1 58 (22) Items that may be reclassified to profit or loss: Operating profit 618 381 Net (loss)/gain on cash flow hedges (5) 2 Exchange differences arising from translation Financials Finance costs A3 (84) (82) of foreign operations (21) 11 Interest income A2 1 1 Income tax on the above items A4 1 – Net change in fair value of treasury instruments D1 (63) (4) (25) 13 Net profit before tax 472 296 Tax expense A4 (133) (95) Other comprehensive income for the year, net of tax 794 13 Net profit after tax attributed to the shareholders of the Total comprehensive income for the year, net of tax parent company 339 201 attributed to shareholders of the parent company 1,133 214

Earnings per share (EPS) attributed to ordinary equity holders of the parent Cents Cents Basic and diluted earnings per share C3 13.2 7.8 Meridian Annual Report 2019

105 The notes to the Group financial statements form an integral part of these financial statements. Balance Sheet Menu

2019 2018 2019 2018 Note $M $M Note $M $M Current assets Current liabilities Cash and cash equivalents C5 78 60 Payables and accruals 303 267 Trade receivables C6 292 261 Employee entitlements 17 16 Customer contract assets B3 20 19 Customer contract liabilities 16 14 Financial instruments D1 118 77 Current portion of term borrowings C7 167 450 Other assets 34 32 Finance lease payable C8 1 1 Total current assets 542 449 Financial instruments D1 36 52 Current tax payable 80 43 Non-current assets Total current liabilities 620 843 Property, plant and equipment B1 8,825 7,941

Financials Intangible assets B2 59 60 Non-current liabilities Deferred tax A4 40 46 Term borrowings C7 1,303 1,023 Financial instruments D1 191 136 Deferred tax A4 1,968 1,683 Total non-current assets 9,115 8,183 Provisions 9 9 Total assets 9,657 8,632 Finance lease payables C8 31 47 Financial instruments D1 209 129

Term payables 60 75 Total non-current liabilities 3,580 2,966 Total liabilities 4,200 3,809 For and on behalf of the Board of Directors who authorised the issue of the financial statements on 23 August 2019. Shareholders’ equity

Share capital C2 1,599 1,598

Reserves 3,858 3,225 Total shareholders’ equity 5,457 4,823 Chris Moller, Jan Dawson, Total liabilities and shareholders’ equity 9,657 8,632 Chair, 23 August 2019 Chair, Audit and Risk Committee, 23 August 2019 Meridian Annual Report 2019

106 The notes to the Group financial statements form an integral part of these financial statements. Statement of Changes in Equity Menu

Foreign currency Cash flow Share Share option Revaluation translation hedge Retained $M Note capital reserve reserve reserve reserve earnings Total equity Balance at 1 July 2017 1,598 1 4,249 (27) (1) (725) 5,095

Net profit for the 2018 financial year – – – – – 201 201 Other comprehensive income Net gain on cash flow hedges – – – – 2 – 2 Exchange differences from translation of foreign operations – – – 11 – – 11 Total other comprehensive income, net of tax – – – 11 2 – 13 Total comprehensive income for the year, net of tax – – – 11 2 201 214 Share-based transactions C2,F1 – – – – – – –

Financials Dividends paid C4 – – – – – (486) (486)

Balance at 30 June 2018 and 1 July 2018 1,598 1 4,249 (16) 1 (1,010) 4,823

Net profit for the 2019 financial year – – – – – 339 339 Other comprehensive income Asset revaluation B1 – – 1,139 – – – 1,139 Net loss on cash flow hedges – – – – (5) – (5) Exchange differences from translation of foreign operations – – – (21) – – (21) Income tax relating to other comprehensive income A4 – – (320) – 1 – (319) Total other comprehensive income, net of tax – – 819 (21) (4) – 794 Total comprehensive income for the year, net of tax – – 819 (21) (4) 339 1,133 Share-based transactions C2,F1 1 – – – – – 1 Dividends paid C4 – – – – – (500) (500)

Balance at 30 June 2019 1,599 1 5,068 (37) (3) (1,171) 5,457 Meridian Annual Report 2019

107 The notes to the Group financial statements form an integral part of these financial statements. Statement of Cash Flows Menu

2019 2018 Note $M $M Operating activities Receipts from customers 3,463 2,765 Interest received 1 1 Payments to suppliers and employees (2,628) (2,152) Interest paid (77) (79) Income tax paid (124) (108) Operating cash flows C5 635 427

Investing activities Sale of property, plant and equipment – 23

Financials Purchase of property, plant and equipment (45) (33) Purchase of intangible assets (24) (22) Purchase of subsidiary – (182) Australian stamp duty paid – (10) Investing cash flows (69) (224)

Financing activities Term borrowings drawn 439 462 Term borrowings repaid (484) (200) Finance lease paid (1) (1) Dividends paid C4 (500) (486) Financing cash flows (546) (225)

Net increase/(decrease) in cash and cash equivalents 20 (22) Cash and cash equivalents at beginning of year 60 80 Effect of exchange rate changes on net cash (2) 2 Cash and cash equivalents at end of year C5 78 60 Meridian Annual Report 2019

108 The notes to the Group financial statements form an integral part of these financial statements. 109 Meridian Annual Report 2019 Notes to the Financials — for the year ended 30 June 2019 Menu • • • • is considered relevant and material if: orposition performance. Information changes in Meridian's financial theassist reader in understanding considered relevant and material to include information which is The notes to the financial statements In section. this report About this and services. and services. sale of complementary products the and of electricity retailing and are the generation, trading activities core business Meridian's 2013. Act Conduct Markets Financial of the reporting entity for the purposes FMC an is It Zealand. New in under the Companies Act 1993 entity domiciled and registered Meridian Energy Limited is a for-profit future performance. future to important is that operations Meridian's of aspect to an relates it or business; Meridian's in changes to explain helps it of Meridian; results the understanding for important is it nature; and size its of the amount is significant because • • • • • prepared: have been statements financial These Act 1989. Finance the Public of requirements by the bound is it Zealand, of New Right in Queen the Majesty by Her owned majority As a mixed ownership company, Australian Securities Exchange (ASX). the and (NZX) Exchange Stock Zealand New the on listed is dual Wellington. Meridian Energy Limited Lane, Elizabeth Lady 55 Level 2, is of Meridian office registered The to the financial statements. financial to the notes the throughout provided as policies accounting using and stated; otherwise unless ($M) to millions rounded values with all (NZD), dollars Zealand New in liabilities; and certain assets of by revaluation modified cost, of historical basis the on 2013; Act Conduct Markets Financial of the requirements the with accordance in for-profit entity; for a appropriate as (NZ IFRS), the New Zealand equivalents Reporting Standards (IFRS) and comply with International Financial and Zealand New in (GAAP) Practice Accounting Accepted in accordance with Generally

A2 Note notes: following the in found are Meridian material to understanding the performance of Judgements and estimates which are considered estimates. these from differ may results Actual circumstances. the under be appropriate and various other factors that are considered to assumptions are on based historical experience underlying and estimates The estimates. and Meridian has made a number of judgements standards, of accounting application and policies accounting Group's the of applying process the In Key judgements and estimates. D1 B3 B1 Financial risk management Customer contract assets +equipment plant Property, Income 110 Meridian Annual Report 2019 Notes to the Financials — for the year ended 30 June 2019 Menu the date on which control is lost. is control which on date the to obtained is control which on date areSubsidiaries consolidated from the expenses have been eliminated. balances, incometransactions, and intra-group material all statements, In preparing the Group financial accounting policies. parent company, using consistent the as period reporting same the for prepared are Group of the of members statements financial The Subsidiaries. E1 note in as contained subsidiaries and controlled entities, its and Limited Energy of Meridian comprise the financial statements statements financial Group The of consolidation Basis at the dates of the transactions. transactions. of the dates the at rates exchange the approximating rates at translated are subsidiaries of these expenses and revenue The date. balance rate at closing the at subsidiaries are translated to NZD of international liabilities and assets The 2019. June 30 date, balance at rate prevailing the at translated are liabilities and assets monetary the Foreign transactions. currency of date the at rates exchange the foreign currencies are converted at Transactions denominated in Foreign currency provided in note E1 Subsidiaries. E1 note in provided is currencies functional subsidiary of international list 0.9138). Afull 2018: June (30 0.9571 2019 was June 30 rate at closing the dollars; international subsidiaries is Australian of currency functional principal The occurs. that which income statement in the period in differences are recognised in the translation cumulative these of, an internationaldisposed is subsidiary translation reserve (within equity). If currency foreign the in recorded are exchange differences can arise. These into NZD, translated are subsidiaries of statements financial the When 111 Meridian Annual Report 2019 Notes to the Financials — for the year ended 30 June 2019 Menu notes to the financial statements. the within used measures non-GAAP performance and an explanation of impacted Meridian's financial Significant matters which have In section. this the financial year financial the in matters Significant restated as a result of the adoption. of the aresult as restated prior period has therefore not been financialprimary statements. The to the impacts any material in resulted not has standard new of the financial year. The implementation the 9during IFRS NZ adopted retrospectively Group Meridian Financial Instruments 9: IFRS NZ of Adoption increasing revenues. customer demand, ultimately to meet market into the strongly result Meridian was able to generate a as and year of the half latter the in improved also storage and inflows year. Hydro financial of the half latter the in average above remained but slightly dropped prices high These October. in of $300 average over an prices spot of high periods in resulted issues pipeline gas declined. This combined with in spring and national storage year but conditions drier became financial of this the beginning at existed hydro storage Good inflows Hydro

30 June 2018 (net of deferred tax). (net 2018 of deferred June 30 from million of $819 net increase a in resulted has valuation The (DCFs). cashflows discounted with additional consideration of primarily on of earnings capitalisation based approach income an using set is range valuation The is based. decision valuation ultimate Board's the which on range a valuation an independent valuer to determine uses Meridian date. this at as assets of the value fair the to determine plant has assets been undertaken, Meridian’s generation structures and of 2019 avaluation June At 30 and plant revaluation Generation structures comparedstyle to prior periods. orperiods, amended presentation information compared to prior The changes provide additional • • • • areas: the following in made been both additions and amendments have note will 7. IFRS NZ users in such, As requirements reporting associated the 9and IFRS NZ of both implementation to the due disclosures note Meridian's There have been several additions to Section D: Hedge Accounting Hedge D: Section D: HedgingSection Instruments Management &Risk Risks Key D: Financial Section Losses for Credit Provision C: Section

and gains or losses on sale of assets. of assets. sale on losses or gains and impairments of hedges, value in fair depreciation, change amortisation, tax, interest, before Earnings EBITDAF statements. the financial references for reconciliations to note below, including described are by othermeasuresThe companies. similarly titled measures presented Meridian's calculations may differ from standards, of accounting body other any or by GAAP, NZ IFRS, defined not are measures these As measures. for GAAP asubstitute not are They financial performance and position. their understanding of Meridian's informationfurther with to broaden readers to provide measures GAAP measures is intended to supplement of non-GAAP use limited The notes. statements and accompanying measures within these financial Meridian refers financial to non-GAAP measures Non-GAAP plantProperty and equipment. refer B1 to Note information more For • • valuation were: the influenced that Key factors and Australia. and environment in New Zealand rate low interest current the and Meridian and its sector peers; higher market multiples for

management. Capital C1 note in outlined is this within management its capital and measure this uses Meridian assets. financial of liquid account takes of Meridian's indebtedness that ameasure as by investors used commonly ametric is debt Net debt Net Segment performance. A1 note in performance financial margin within Meridian's segmental of energy measure the uses Meridian and revenue from generation. Meridian's retail purchases electricity of cost the on prices of wholesale impact offsetting broadly the and market electricity wholesale of the revenue, accounts for the variability total unlike that, performance financial Energy margin provides a measure of margin Energy that include these items. companies than measures GAAP industry electricity of other that with comparison of operating performance better allows a This position. tax of Meridian's structure capital and effects the and events occurring infrequently or one-off other and movements of hedging instruments depreciation, fair amortisation, value of impacts non-cash the without of Meridian's operating performance statement, allowing the evaluation income the in reported is EBITDAF 112 Meridian Annual Report 2019 Notes to the Financials — for the year ended 30 June 2019 Menu b. a. statement, including: income the in items individual informationadditional about performance of Meridian, providing This section explains the financial In section. this performance Financial A and taxation. segment, revenue, expenses by operating performance reference to key areas including: by year the for performance analysis of Meridian's in the income statement; and understanding items recognised for relevant are that estimates and judgements accounting policies,

• • • New Zealand wholesale out below: set as of operations, products and and services the location of the nature to the according business The Chief Executive considers the direction. and strategic allocation resource on decisions of making purpose for the segment the operating performance of each operating decision-maker) monitors (the chief Executive Chief The performance A1 Segment in New Zealand. generation electricity opportunities Development of renewable production. Meridian's New Zealand generation of 40%) 2018: June (30 of 39% (NZAS) representing the equivalent Smelter Aluminium Zealand New large industrial customers, including to and segment Retail NZ to the sale marketwholesale electricity and its the from ofelectricity Purchase market.electricity wholesale Zealand New into the Generation of and its electricity sale

• • retail Zealand New eliminated on Group consolidation. is and revenue' 'other in recorded been has million of $3 Revenue forservices Powershop Australia. office back and customer line front Powershop New Zealand provide third parties. manner to transactions with asimilar in set is price transfer The costs". of distribution sales, net is included within "Contracted sales spot from margin Agency prices. market spot wholesale prevailing at segment Wholesale the from purchased (variable price) agreements is spot on customers industrial and to business sold electricity (MWh) and hour megawatt per of $74–$79 price fixed annual segmentWholesale at an average the from purchased is contracts on fixed price variable volume customers industrial and business to residential, sold Electricity Powershop) in New Zealand. two brands (Meridian and complementary products through and of electricity Retailing

segment level. operating an at Executive Chief to the reported not are items sheet central corporate expenses. Balance the financial year) before unallocated included within significant matters in is measures of these (a definition EBITDAF and margin energy using assessed is segments operating of the performance financial The • • Other and unallocated • • • Australia allocated to other segments. allocated to other directly not are costs that Activities and centrally based retailing platform. developed and gas electricity Flux of the licensing including considered segments, reportable Other operations, that are not in Australia. generationelectricity options Development of renewable in Australia. brand Powershop the through mainly of electricity Retailing market.electricity wholesale Australian into the sale and hydro stations, three power Meridian's two wind farms and Generation of from electricity 113 Meridian Annual Report 2019 Notes to the Financials — for the year ended 30 June 2019 Menu A Electricity distributionElectricity expenses Electricity sales revenue, net of hedging Reconciliation of energy margin Electricity expenses, net of hedging of net expenses, Electricity Net profit after tax after profit Net Tax expense tax before profit Net Net change in fair value of treasury instruments treasury of value fair in change Net Interest income Finance costs Operating profit Net change in fair value of electricity and other hedges other and electricity of value fair in change Net Gain/(Loss) on sale of assets of sale on Gain/(Loss) Impairment of assets of Impairment Depreciation and amortisation and Depreciation EBITDAF Other operating expenses expenses metering Electricity Employee expenses Gross margin Gross Energy transmission expense Dividend revenue Other revenue Energy margin margin Energy Other market revenue/(costs) Virtual asset swap margins Inter-segment electricity sales Generation spot revenue Contracted sales, net of distribution costs distribution of net sales, Contracted Net cost of hedging of cost Net A1 Segment performance continued performance A1 Segment Energy margin Energy Cost to supply customers supply to Cost NZ Wholesale (1,538) (1,985) 2,492 2,492 1,672 1,672 954 954 (125) 2019 954 954 740 740 524 524 126 126 831 831 613 613 (63) (28) $M (7) 11 11 – – – – – – – – – – – 2 – (1,042) (1,259) 1,039 1,039 1,825 1,825 2018 663 (122) 435 435 535 535 579 579 783 783 783 783 (56) (28) $M 41 41 (6) (2) – – – – – – – – – – – – 2 NZ Retail 1,297 1,297 (630) (502) (513) 654 654 2019 154 154 154 154 166 166 (35) (33) (31) $M 67 67 12 12 – – – – – – – – – – – – – – – 2 1,201 1,201 (553) (470) (487) 2018 629 629 (34) 173 173 161 161 161 161 (31) (31) $M 77 77 12 12 – – – – – – – – – – – – – – – 2 Australia (150) (107) 290 290 2019 (65) 152 152 (37) 114 114 118 118 (13) 118 118 113 113 64 64 $M (6) (1) 4 – – – – – – – – – – 2 – – – (100) 2018 249 249 (63) 124 124 (99) (29) (25) 44 44 86 86 86 86 $M 82 82 87 87 (5) (9) – – – – – – – – – – – – – (1) 1 Other and Unallocated 2019 (30) (22) 70 70 29 29 $M 41 41 18 18 – – – – – – – – – – – – – – – – – – – – – – – 2018 (22) (27) 20 20 46 46 66 66 $M 17 17 – – – – – – – – – – – – – – – – – – – – – – – Inter-segment (613) (613) 2019 (20) 613 613 613 613 (51) (41) (61) $M 10 10 – – – – – – – – – – – – – – – – – – – – (535) (535) 2018 535 535 535 535 (59) (46) (51) (13) $M – – – – – – – – – – – – – – – – – – – 8 – (2,024) (1,662) 3,466 3,466 1,330 Total 1,226 1,226 1,226 1,226 1,785 1,785 1,120 1,120 (578) (276) (102) (133) (147) 2019 339 339 838 838 472 472 (131) 130 130 (84) 618 618 (63) (33) 58 58 25 25 $M (5) (6) 11 11 3 1 – – (1,293) 1,030 1,030 1,030 2,740 2,740 (1,160) (550) 1,188 1,188 1,126 1,126 (268) 666 (133) 2018 296 296 925 925 (127) 201 201 381 381 (95) (95) (82) (22) (22) (31) $M 22 22 16 16 (4) (5) (2) (2) – – 7 1 114 Meridian Annual Report 2019 Notes to the Financials — for the year ended 30 June 2019 Menu and their demand for electricity. prices sales contract by customer customers. This revenue is influenced residential, business and industrial Revenue received or receivable from sales toElectricity customers revenueOperating Income A2 A Electricity generation, net of hedging Interest income New Zealand Total revenue by area geographic customers to sales Electricity revenue Operating United Kingdom Australia Other revenue revenue services related Electricity or hedge settlement. of generation time the at recognised is and price spot wholesale the the quantity of generation and by influenced is revenue This • • Revenue received from: net of hedging generation, Electricity industrial customers. and to generators, retailers and markets, futures electricity on sold hedges of electricity settlement net and markets; wholesale into the generatedelectricity and sold 3,491 3,491 3,491 3,491 1,693 1,693 3,187 3,187 1,773 1,773 2019 2019 2019 2019 2019 292 292 $M $M $M 12 12 17 17 8 1

2,502 2,502

2,762 2,762 1,088 1,088 1,652 1,652 2018 2018 2018 2018 2018 249 249 $M $M $M 15 15 11 11 7 1 over the contract tenure. contract over the and released to the income statement basis aportfolio on sheet balance the on assets contract to customer a customer contract are deferred retaining or obtaining incurred costs customers and any incremental to given credits and discounts as such price sale of the Elements supply and customer consumption. of time the at recognised is Revenue consumption patterns. onbased the customers' historical are period unread the in usage electricity of customer estimates These date. balance at unread are where customer meters electricity sales, electricity retail estimating Meridian exercises judgement in consumptionElectricity –Revenue. estimates and Key judgements this policy. and terms payment the between There are no significant differences taken by customers. ofdiscounts amount the estimate to used experience accumulated on based discount of estimated net recognised initially is revenue offered is adiscount Where Discounts and payment terms sheet. balance the on assets generation structures and plant of value fair the in included are flows and thecash estimated future income statement the in revenue sales electricity as recognised is Revenue with other industrial customers. with fixed price supply agreements statements in a manner consistent financial these in recognised been has (NZAS) Smelters Aluminium New Zealand with agreement The supplyElectricity with NZAS

115 Meridian Annual Report 2019 Notes to the Financials — for the year ended 30 June 2019 Menu grid by grid providers. grid grid by generation sites to the national Meridian's connecting cost of the and Zealand of New Islands South and North the between link (HVDC) current direct voltage high of the cost of the share Meridian's transmission expensesElectricity properties. the national grid and customers' betweentransporting electricity companies of distribution cost The distributionElectricity expenses spot price. consumption and the wholesale of customer timing and by quantity Electricity expenses are influenced • • • of: cost The expenses,Electricity net of hedging Operating expenses A3 Expenses A Electricity distributionElectricity expenses Electricity expenses, net of hedging of net expenses, Electricity expenses Operating Other expenses meteringElectricity expense Employee expenses Electricity transmission expenses related charges and services. hedges; and electricity of buy-side settlement net customers; to supply markets wholesale purchasedelectricity from distribution costs. distribution Australia are bundled with electricity New Zealand. Metering expenses in customer consumption electricity in of retail gathering data and reading meter meters, of electricity cost The meteringElectricity expenses $4 million). 2018: June 2019 (30 in $5 million plans (largely KiwiSaver) were Contributions to defined contribution of settlement. time the at apply to rate expected remuneration the at carried are They reliably. measured be can and settled be will recognised when it is probable they for rendered. services Provisions are leaveservice and employee incentives wages annual and salaries, leave, long of respect in to employees owing Provisions are made for benefits Employee expenses 2,653 1,662 1,662 2019 2019 578 578 102 102 147 147 131 131 33 33 $M 2,096 2,096 1,160 1,160 550 550 2018 2018 133 133 127 127 95 95 $M 31 31 structures and plant and relates generation of our revaluation of the aresult 2019 is in impairment The treatment. specific for refer to B1 note PP&E revalued are that assets For statement. income the in recognised is expense impairment exceeds the recoverable amount, an asset of an value carrying use). the If in value as known (also assets by the generated to be expected flows cash of future value present and to sell, costs less value fair asset’s of an higher the is amount recoverable The flows. units with separately identifiable cash into cash-generating grouped are They date. balance each at assets amount of its tangible and intangible Meridian reviews the recoverable Impairment of non-financial assets Amortisation of intangibles Depreciation and amortisation Depreciation (Gain) on sale on disposal of assets of disposal on sale on (Gain) Impairment of property, plant and equipment assets of sale on gain and Impairment Interest on finance lease payable Interest on borrowings Finance costs Interest on electricity option premium of the existing resource consent. consent. resource existing of the terms the under to occur unlikely is development as impaired was book value of Central Wind consent the year financial 2018 the During asset. corresponding the of disposal on loss $11 million an by offset largely was which liability derecognition of the finance lease to the due statement income the in recorded was gain million A $13 detail). lease payable for further Finance lease (refer to note C8 Finance the derecognition of the Mt Mercer to relates of assets disposal on sale on gain of the million 2019 $2 In detail. B1 PP&E for further generation Refer assets. to note specifically to our Australian Note Note Note B2 C8 B1 B1 250 250 2019 2019 2019 2019 2019 276 276 $M 26 26 84 84 $M $M 78 78 (3) (3) 4 2 5

2018 2018 268 268 2018 2018 2018 247 247 $M $M $M 82 82 74 74 21 21 (7) (7) 6 2 2 116 Meridian Annual Report 2019 Notes to the Financials — for the year ended 30 June 2019 Menu A4 Taxation A Deferred tax tax Deferred expense tax current Total years prior of tax to Adjustments expense tax income Current Tax expense Tax expense acquisition asset on paid duty Stamp Income tax (over)/under provided in prior year Expenditure not deductible for tax Income tax at applicable rates tax before Profit Reconciliation to profit before tax Total tax acquisition asset on paid duty Stamp

2019 2019 472 472 133 133 133 133 161 161 161 (28) (28) $M – – – – – 2018 2018 296 296 120 120 121 121 (35) (35) 95 95 95 $M 83 83 10 10 10 3 (1) (1) (1) (1) and 30% for Australia. and 30% for New Zealand 28% being date, balance at enacted rates tax using calculated is tax for current liability be taxable or deductible. Meridian’s and also excludes items that will never taxable or deductible in other years, are that expense and of income items excludes it as statement income the in reported tax before profit from for the year. Taxable profit differs onincome taxable profit assessed tax the is expense tax income Current 2018. in duty stamp and tax deferred tax, income Tax expense components are current Current tax expense 117 Meridian Annual Report 2019 Notes to the Financials — for the year ended 30 June 2019 Menu A4 Taxation continued Taxation A4 A Financial instruments Term payables Depreciation/amortisation statement: income in differences Temporary year of beginning at Balance and liabilities Deferred tax assets Financial instruments Term payables Property, Plant and Equipment of: up Made year of end at Balance Other Revaluation reserve movements Temporary differences in other comprehensive income: Other – payables & receivables Deferred income assets contract Customer Australia tax losses utilised Total deferred tax deferred Total asset tax Deferred Deferred income losses tax unused forward Carried liability tax Deferred Other – payables & receivables assets contract Customer 2,009 2,009 1,968 1,637 1,637 1,928 1,928 320 320 2019 2019 (40) (40) (38) (38) (38) (38) (28) (28) (27) (27) $M (19) (19) (2) (2) (2) (2) (1) (1) 9 6 6 – (1) (1) (1) (1)

1,637 1,637 1,637 1,683 1,683 1,672 1,672 1,731 1,731 2018 2018 (35) (35) (46) (46) (46) (46) $M (37) (37) (18) (18) (31) (31) (6) (6) 6 – – – – – 2 (1) (1) 1 1 substantively enacted at balance date. or enacted have been that laws tax and rates tax on based realised, asset or the settled is liability the when year to the to apply expected are that rates tax the at calculated is tax Deferred to their original historical cost. back declines assets of these value fair the if reverse only will balance property, plant and equipment. This of revaluation the on differences of temporary up made is balance tax ofThe majority Meridian's deferred • • differences, other than those arising: is recognised on all temporary tax Deferred returns. tax income of filing the from and reporting for financial liabilities and assets of recognition the in differences differences. These arise from oftemporary unwinding of the aresult as future the in recoverable or payable to be expected is which tax income is tax Deferred Deferred and tax liabilities assets nor taxable profit or loss. accounting the affects neither that (other than in a combination) business atransaction in liabilities assets and from the initial recognition of from goodwill; and

entity and taxation authority. taxable same to the relate they when and liabilities tax current against assets tax current off to set rights enforceable legally are there if only offset are liabilities and assets tax Deferred deferred tax balances Offsetting asset. tax the deferred to utilise future the in be available will profits taxable sufficient that extent that it is no longer probable to the reduced and date balance each at reviewed is This asset. the to use available be will profit taxable the extent it is probable that future to recognised is asset tax Deferred generation in activities that country. future taxable income and from retail operations and will be utilised against Australian our from losses tax unused to relates asset tax deferred The Unused tax losses 118 Meridian Annual Report 2019 Notes to the Financials — for the year ended 30 June 2019 Menu sell electricity generate and to used Assets B c. b. a. about: information is there notes of the section this In revenue. operating and sale of to electricity generate production the in uses Meridian assets the shows section This In section. this customer contract assets contract customer intangible and assets; property, plant and equipment; have been approximately $2.5 billion (30 June 2018: $2.6 billion). $2.6 (30 June 2018: billion $2.5 approximately have been amount would their carrying accumulated losses, impairment carried at historical cost accumulated less depreciation and At 30 June 2019, had the generation structures and plant been equipment and plant B1 Property, Transfers – work in progress in –work Transfers Additions 2018 June 30 at value book Net Net book value at 30 June 2019 2019 June 30 at value book Net Less accumulated depreciation accumulated Less value fair or Cost Foreign currency exchange rate movements lease assets finance Mercer Mt of Derecognition Cost or fair value fair or Cost $M Net book value at 30 June 2018 2018 June 30 at value book Net Depreciation expense Net book value at 30 June 2019 2019 June 30 at value book Net Depreciation expense statement income to taken Decrease Increase taken to revaluation reserve Generation structures and plant revaluation: Net book value at 30 June 2017 2017 June 30 at value book Net depreciation accumulated Less Cost or fair value fair or Cost Additions Transfers – work in progress in –work Transfers Less accumulated depreciation accumulated Less Transfers – intangible assets Disposals Transfers – Other assets Purchase of subsidiary Foreign currency exchange rate movements 52 51 51 plant at fair value structures and and structures Generation 8,654 8,654 8,654 8,654 8,655 7,774 7,774 7,776 7,776 7,776 7,776 8,013 8,013 7,774 7,774 1,139 (238) (238) (237) (237) (237) (237) 181 181 (26) (26) 32 32 17 17 (5) 9 – – – – – – 8 (1) (1)

buildings Land and and Land at cost at 30 30 20 20 20 20 25 25 (10) (10) 15 15 15 15 15 15 15 15 (5) (5) (5) – – – – – – – – – – – –

and equipment Other plant plant Other 52 51 at cost at generation structures and plant at revaluation date. Includes the reversal of accumulated depreciation on other comprehensive income. in reserve translation currency foreign the Through 160 160 169 169 80 80 80 80 171 171 (82) (82) 63 63 (97) (97) 63 63 (10) (10) 87 87 (91) (91) (11) (11) (11) (11) 11 11 (9) (9) (2) (2) 6 – – – – – 2

progress Work in in Work at cost at (43) (43) 70 70 70 70 96 96 93 93 93 93 36 36 39 39 75 75 77 77 (14) (14) 71 71 (3) (3) (2) (2) (2) (2) (2) (2) – – – – – 3 (1) (1) 1

8,050 8,050 8,825 8,825 8,825 8,275 8,275 8,931 8,931 Total Total 7,941 7,941 7,961 7,961 (250) (250) 1,139 (334) (334) (247) (247) (106) (106) 184 184 (89) (89) (28) (28) (10) (10) 36 36 39 39 19 19 (11) (11) (5) (2) (2) – – – 119 Meridian Annual Report 2019 Notes to the Financials — for the year ended 30 June 2019 Menu decision is based. valuation ultimate Board's which the on range avaluation to establish (DCFs) flows cash discounted the with additional consideration of on the of capitalisation earnings valuation approach primarily based income an valuer, uses who Meridian uses an independent date. at balance values fair using determined be would which that from materially differ not does amount carrying the sufficient regularity to ensure that Revaluations are with performed generation structures and plant of revaluation and value Fair continued equipment and plant B1 Property, B impairment losses. impairment any accumulated and depreciation accumulated less cost historical at stated are equipment and plant impairment All other losses. property, anyless subsequent depreciation and of revaluation, date the at value fair their at sheet balance the on held are buildings) and land (including assets Generation structures and plant and measurement Recognition financing costs where appropriate. for its intended purpose, and the location and condition necessary to asset the to bringing attributable directly costs including value, fair recorded at cost, which is considered structures and plant are assets Subsequent additions to generation revalued amount. after revaluation represents the amount carrying the that so amount carrying gross the against revaluation date is eliminated at depreciation Accumulated asset. of that revaluation a previous to relating reserve revaluation the in any, if held balance, the exceeds it that extent to the statement income to the charged is revaluation on A decrease amount in carrying arising the decrease previously charged. of extent to the statement income to the credited is increase the case that In statement. income the in recognised previously asset same for the decrease a revaluation reverses it that except extent to the reserve, revaluation to the credited is revaluation on arising increase Any

in the income statement. income the in depreciation of impact this revaluation no was There to nil. reset is assets these on depreciation accumulated As a consequence of this revaluation, statement. the income in recognised assets impairment of Australian generation :nil) 2018 June (30 million a$5 as and reserve revaluation the in tax) (net nil) of deferred 2018: June (30 million of $819 increase an as recognised is revaluation of the impact The assets. plant and structures in the value carrying of generation of depreciation) reversal the (after nil) 2018: June (30 million of $657 increase a net in resulted revaluation This when determining a valuation range. ofcapitalisation earnings and DCFs using values valuer assessed 30 June 2019. An independent at assets plant and structures Meridian revalued its generation plant structures and Revaluation of generation remaining useful life. over its estimated value, residual any less asset, of an amount value fair or cost the allocates This basis. astraight-line on calculated is land, freehold than other assets, equipment and plant of property, Depreciation Depreciation

at each balance date. balance each at adjusted, appropriate if and reviewed, are lives useful and value residual The • • • are: which of assets, value residual and lives useful remaining the determining Meridian uses its judgement in Useful lives transferred to retained earnings. is reserve revaluation asset the in asset attributable disposed to the statement. Anyincome balancethe in recognised is and asset of the amount carrying the and proceeds sale the between difference the as determined is equipment and plant of property, item of an retirement or disposal the on arising loss or gain The orDisposals retirement up to 20 years. up to 20 – equipment and plant other to –up 67 and years; buildings years; toup 80 generation structures and plant – 120 Meridian Annual Report 2019 Notes to the Financials — for the year ended 30 June 2019 Menu B Operating expenditure generation volume Australian Sensitivities show the movement in fair value as a result of a change in each input (keeping all other inputs constant). inputs other all (keeping input each in of achange aresult as value fair in movement the show Sensitivities generation volume Zealand New multiple EBITDAF earnings expenditure – refer note A3) note –refer expenditure (excludi fair valuemeasure to Key input Financial risk management). D1 in included is other levels of the financial instrument (a definition value 3fair alevel as classified to be marketobservable data, it continues structures and plant does not fully use of generation valuation the As of assets. lives useful remaining estimated the determining in used measurement. Judgement is also value for fair inputs and techniques of key valuation appropriateness judgement to decide on the The Meridian Board uses its valuation and techniques key inputs. Generation structures and plant – estimates and Key judgements ng electricity related related electricity ng Annual generation production Annual generation production comparable companies from earnings and valuations of of 20%) derived premium control Valuation (including multiple Description Meridian’s cost of operations In determining the maintainable and forecast earnings is determined. to capitalise Meridian’s historical an EBITDAF multiple range at which EBITDAF an ofcapitalisation earnings valuation, to In Meridian. preparing the with broadly comparable operations from market prices of listed companies multiplescapitalisation as observed of future maintainable earnings and assessment by to reference an value calculates DCF. methodology and This of earnings capitalisation being range techniques in a establishing valuation which involves incorporating two valuer uses an income approach As above, discussed the independent 890GWh p.a. 890GWh 15,500GWh p.a. 15,500GWh to p.a. 13,520GWh 12.6 xEBITDAF 12.6 unobservable inputs of Range $291M p.a. $291M

arrangements. contractual existing under term, to full runs NZAS with contract the that valuation this in assumed is It used. have been the ASX from extracted prices electricity earnings, wholesale observable –5% +5% – 250GWh + 250GWh –0.5x +0.5x Sensitivity – $10M – $10M + (A$35M) A$35M ($240M) $240M ($395M) $395M valuation on Impact $153M ($153M)

121 Meridian Annual Report 2019 Notes to the Financials — for the year ended 30 June 2019 Menu B2 Intangible assets assets Intangible B2 B Net book value at 30 June 2019 2019 June 30 at value book Net amortisation accumulated Less value fair or Cost 2019 June 30 at value book Net Amortisation expenses Additions 2018 June 30 at value book Net amortisation accumulated Less value fair or Cost 2018 June 30 at value book Net Amortisation expenses Transfers – property, plant and equipment Additions 2017 June 30 at value book Net amortisation accumulated Less value fair or Cost $M Software (153) (153) 150 150 173 173 (114) (114) (90) (90) 211 211 60 60 60 (26) (26) 59 59 58 58 25 25 (21) (21) 21 21 2 recognised as an expense as incurred. as expense an as recognised computer software programs are maintaining with associated Costs basis. astraight-line on lives useful over their amortised are costs these All assets. intangible as recognised also are year one generate economic beyond benefits will that products unique software production of identifiable and the with associated directly costs Additionally, software. specific the to use bring and to acquire incurred costs of the basis the on capitalised ofpart related hardware) are (that are not considered an integral Acquired computer software licences Software balance date. appropriate, adjusted at each areThese reviewed, and, if • • • are: which assets, lives and residual value of intangible useful remaining the determining Meridian uses its judgement in Useful lives to –up 3years. software other and years; to –up 10 control generation toup 5years; – platform retail gas and electricity

B

B3 Customer Contract Assets Menu

2019 2018 $M $M

Opening balance 19 18 Deferred during the period Upfront discounts and credits to customers 11 11 Key judgements and estimates – Sales costs 5 3 Customer Contract Assets Total deferred during the period 16 14 Customer contract tenure Released to the income statement during the period Meridian exercises judgement in estimating Electricity sales to customers (10) (9) customer contract tenures where contracts do Employee expenses (1) (1) not have a fixed term. These estimations are based upon the average rate of customer churn Other expenses (4) (3) for groups of customers with similar attributes. Total released to the income statement during the period (15) (13) The following estimates of customer contract Closing balance 20 19 tenure have been used to spread variable components of the sale price and incremental costs of acquiring a customer:

New Zealand – residential and business between 2 and 3 years.

Australian – residential and business between

Notes to the Financials — for the year ended 30 June 2019 2 and 3 years. Meridian Annual Report 2019 122 123 Meridian Annual Report 2019 Notes to the Financials — for the year ended 30 June 2019 Menu d. c. b. a. information about: is there notes the of section this are returned to shareholders. In funding sources and how dividends various the capital, working and structure capital its manages This section explains how Meridian In section. this funding Managing C leases and commitments. leases receivables and payables; and net debt; andequity dividends; debt facility financial covenants. Meridian is in full compliance with from Standard & Poor's. measure is Meridian's credit rating external cover.interest principal The and to EBITDAF debt net are measures key The ratings. credit and covenants which consider debt facility financial requirements using various measures Meridian regularly monitors its capital • • • various including: means, Meridian manages through its capital debt. net of shareholders' equity, reserves and is definedCapital as the combination capital. cost of the optimises and concern going a to remain ability its safeguards maintaining a structure capital that returns to shareholders whilst iscapital to provide appropriate Meridian's objective when managing riskCapital management objectives C1 management Capital raising or repaying debt. and capital; returning or raising paid to shareholders; of dividends amount the adjusting

53 Interest (C)Interest Net capital Standard & Poor’s rating &Poor’s Standard (B/C) (times) cover interest EBITDAF Interest on borrowings Interest on finance lease Less: cash and cash equivalents equivalents cash and cash Less: Finance lease payable Drawn borrowings Other reserves earnings Retained Share capital EBITDAF (B) EBITDAF EBITDAF Interest cover Net debt to EBITDAF (times) (A/B) (times) EBITDAF to debt Net Operating lease commitments Finance lease payable Drawn borrowings EBITDAF to debt Net Net debt (A) debt Net EBITDAF (B) EBITDAF Less: cash and cash equivalents equivalents cash and cash Less: Add back: cash buffer cash back: Add cash restricted back: Add The cash buffer is calculated as 25% of unrestricted cash and cash equivalents. equivalents. cash and cash unrestricted of 25% as calculated is buffer cash The 53 Note Note Note C5 C8 A3 A3 C2 C9 C7 C5 C5 C8 C7 5,029 5,029 5,457 5,457 6,787 1,330 BBB+ 1,599 1,599 1,376 1,376 1,376 1,376 1,461 1,461 (1,171) (1,171) 10.2 10.2 2019 2019 2019 2019 2019 838 838 838 838 (78) (78) (78) (78) 1.7 1.7 $M $M 82 82 32 32 $M 32 32 78 78 27 27 91 91 13 13 4 6,239 4,235 4,823 4,823 BBB+ (1,010) 1,598 1,598 1,428 1,428 1,529 1,529 1,428 1,428 1,416 1,416 2018 2018 2018 666 2018 2018 666 8.3 8.3 2.3 2.3 (60) (60) (60) (60) 80 80 48 48 $M $M 48 48 $M 29 29 74 74 76 76 6 8 124 Meridian Annual Report 2019 Notes to the Financials — for the year ended 30 June 2019 Menu C3 Earnings per share per Earnings C3 payments). F1 Share based incentive plan for New Zealand-based senior executives (refer note settled equity of along-term part as trust on held and participants by of shares purchase to the relates shares Treasury in movement The company. of the winding up participate equally in any dividend distribution or any surplus on the shares All rights. voting have equal and paid fully are issued shares All C C2 Share Capital Capital Share C2 Basic and diluted EPS (cents per share) per (cents EPS diluted and Basic EPS the calculation of in used shares of number average Weighted the parent company ($M) of shareholders to attributable tax after Profit (EPS) share per earnings diluted and Basic Shares issued Share capital Treasury shares held 2,563,000,000 2,562,318,119 (681,881) (681,881) Shares 1,600 1,600 1,599 1,599 2019 2019 2,563,000,000 $M (1) (1) 2,563,000,000 2,562,429,393 13.2 2019 339 339 (570,607) (570,607) Shares 2,563,000,000 1,600 1,598 2018 2018 2018 201 201 7.8 7.8 $M (2) (2) C4 Dividends Dividends C4 and 23 August 2019. August and 23 payments between balance date therefore recognising any tax 2019, August 23 on available balance the reflect use for future The imputation credits available shareholders' net obligations. tax the reducing it pays, dividends to the credits imputation by attaching paid has it tax income Zealand New of the onpass to its shareholders the benefit Imputation credits allow to Meridian Imputation credit balance and hydrology conditions. market economic, medium-term and short from risks and rating credit BBB+ a maintaining programme, investment medium-term the requirements, capital flow, working cash free Meridian's dividend considers policy Dividend policy Special dividend 2019: 2.44cps (2018:2.44cps) 2.44cps 2019: dividend Special Final ordinary dividend 2019: 10.72cps (2018:8.94cps) 10.72cps 2019: dividend ordinary Final Dividends declared and not recognised as a liability Total dividends paid 11.14cps) (2017: 11.38cps 2018: dividend special and ordinary Final 7.82cps) (2018: Interim ordinary and special dividend 2019: 8.14cps (cents per share) Dividends declared and paid Imputation credits available for future use future for available credits Imputation Imputation credit balance of 2.44 cents per share. per cents of 2.44 dividend un-imputed special an the Board declared per share. Additionally cents of 10.72 dividend imputed ordinary final Board declared a partially 2019 the August 23 On dividend declared – event Subsequent 500 500 208 208 2019 292 292 275 275 64 64 63 63 $M

200 200 486 486 2018 229 229 286 286 63 63 $M 29 125 Meridian Annual Report 2019 Notes to the Financials — for the year ended 30 June 2019 Menu All other and cash equivalent cash balances are available for use. million). $29 2018: June (30 million $27 was 2019, collateral June At 30 this which varies depending on market movements and contracts held. margin as pledged is deposit on holds it funds of the aproportion aresult, As J.P. abroker. as using ASX Morgan the on hedges electricity trades Meridian cash Restricted value. in change risk of to asignificant subject not are and of cash amount known and other short-term, highly liquid investments that are readily convertible to a andCash equivalents cash are made up of on cash hand, deposits on-demand equivalents cash and Cash C5 C Cash and cash equivalents cash and Cash account Current equivalents cash and Cash

2019 $M 78 78 78

2018 60 60 60 60 $M Depreciation and amortisation and Depreciation Adjustments for items: operating activities’ non-cash Net profit after tax after profit Net activities flows fromto operating cash tax after profit net of Reconciliation Movement in deferred tax deferred in Movement Net change in fair value of financial instruments Increase/(decrease) in payables and accruals/employee entitlements (Increase) in other assets (Increase) in customer contract assets (Increase) in accounts receivable Changes in working capital items: Australian stamp duty paid Share-based payments premiums option Electricity Increase in customer contract liabilities Increase in current tax payable assets of sale on (Gain)/Loss assets of Impairment as investingItems classified activities: Cash flow from operating activities operating from flow Cash Working capital items in financing activities and other items non-cash activities investing in items capital Working 2019 635 635 339 339 235 235 276 276 (28) (28) 59 59 $M 37 37 37 37 (19) (19) (31) (31) 12 12 (3) (3) (2) (2) 5 5 5 – 2 (1) (1) 1 2 2018 245 245 427 268 268 201 201 (20) (20) (35) (35) (24) (24) $M 26 26 10 10 (14) (14) (15) (15) 13 13 (7) (7) (7) (7) 6 – 5 2 (1) (1) (1) (1) 1 126 Meridian Annual Report 2019 Notes to the Financials — for the year ended 30 June 2019 Menu C6 Trade receivables C Closing provision for credit loss allowance year the in used Provision year the in created Provision Opening provision allowance loss credit for provision in Movement impaired not but due past receivable Accounts Total trade receivables Accrued receivables Trade receivables Less: credit loss allowance loss credit Less: days 90 than greater due Past days 61 90 to due Past days 60 to 31 due Past days 30 1to due Past Current billed 2019 292 292 223 223 $M 57 57 12 12 11 11 (4) (4) (5) (5) (5) (5) (5) 4 2 2 2 2018 261 261 197 197 $M 57 57 (5) (5) (5) (6) (6) 6 2 2 7 7 1 for enforcement. are handed to collection agencies received. Receivables written off from the debtor, and no payments no communication or response combination of an overdue amount, a typically is of recovery, which there is no reasonable expectation believe Meridian where point Receivables are written at off the million). :$6 2018 (30 June million were $4 year during the Trade receivables written off Australia. and Zealand in New to sales electricity retail customers to related largely amounts are cost.at The amortised overdue and are subsequently carried on initial recognition at fair value, Trade receivables are measured measurement and recognition Trade receivables,

probability rates in our matrices. a trigger for us to reconsider the as acting unemployment forecast in rise alarge with Australia, and also monitored for both New Zealand looking employment are statistics the ageing of debtors. Forward- apply a probability of default given that matrices default we build which performance and trends, through credit history, historical recovery flows by considering customer cash future collective We estimate statement. income the in recognised receive. Additions to the provision are to we expect flows cash future the face value of trade receivables and the between difference the is it current amounts receivable. Or rather, of the lifetime over the losses credit expected Group's of the estimate an are losses for credit allowance The Credit losses 127 Meridian Annual Report 2019 Notes to the Financials — for the year ended 30 June 2019 Menu functional currency at each reporting to the retranslated are currencies borrowings denominated in foreign Any this. on detail for further section Accounting refer to D1 Hedge accounting requirements – please hedge under adjustment value fair a plus cost amortised at carried are borrowings) (USD items hedged as designated have been which borrowings Any method. interest effective the using cost amortised at held subsequently are and paid) costs (net of transaction amount facility drawn of the value fair the at Borrowings are recognised initially and recognition Borrowings, measurement C7 Borrowings C Total borrowings Total non-current borrowings borrowings Unsecured Unsecured borrowings borrowings Unsecured borrowings Non-current Total borrowings current Unsecured borrowings borrowings Unsecured Unsecured borrowings borrowings Unsecured borrowings Current USD USD NZD USD USD NZD borrowed in borrowed Currency Manage Risk".Manage to used Instruments D "Financial section in found be can practices management and hedge accounting More information on Meridian's risk borrowing reporting currency. entity's of the to that different currencies in sourced borrowings and rates to interest exposure its to manage contracts hedge (CCIRS) rate swap Meridian uses cross-currency interest adjustments. hedge value to fair relating amounts any with along table, the in column adjustment" value "Fair the in included is effect retranslation Any date. Drawn facility amount 1,208 1,208 1,376 1,376 598 598 610 610 168 168 168 168 – Transaction costs paid 2019 (4) (4) (3) (3) (2) (2) (1) (1) (1) (1) (1) (1) – classified as Level 2 within the fair fair the Level 2within classified as are values resultant and the discounted cash flow calculation a using calculated is value Fair above. the table in noted are of these instruments values fair estimated and values carrying The relationships. accounting hedge in not longer dated instruments which are Within term borrowings there are at amortised cost at amortised held items of value Fair Retail bonds Unsecured term loan (EKF facility) (EKF loan term Unsecured RateFloating Notes adjustment Fair value value Fair 98 98 98 98 98 98 – – – – Carrying Carrying amount 1,303 1,303 1,470 1,470 608 608 695 695 167 167 167 167 – Drawn facility amount 1,428 987 987 272 272 441 441 166 166 169 169 821 821 within term borrowings. value for all other instruments fair approximates value Carrying D1 Financial instruments). in included is of levels (a definition 1 level as classified being from them precludes NZX the on liquidity lack of however, a instruments; are listed Bonds Retail hierarchy. The value Transaction Carrying Carrying costs paid value 2019 500 100 $M 70 2018 2018 (4) (4) (3) (3) (3) (3) (1) (1) (1) (1) – – value 2019 2019 542 adjustment Fair Fair 101 $M 75 Fair value value Fair

Carrying Carrying 49 49 39 39 39 39 10 10 10 10 – – value

2018 500 100 $M 80 Carrying Carrying amount 1,023 1,023 1,473 1,473 value 2018 2018 450 450 205 205 282 282 Fair Fair 102 514 168 168 818 818 $M 86

128 Meridian Annual Report 2019 Notes to the Financials — for the year ended 30 June 2019 Menu Total Total Finance lease Unsecured borrowings –USD borrowings Unsecured Total Total Total sources of funding Commercial paper Finance lease Unsecured borrowings –USD borrowings Unsecured Total of borrowing sources other bonds rate Fixed rateFloating notes EKF funding

New Zealand bank funding facilities Bank –NZ$M funding of Sources Unsecured borrowings –NZD borrowings Unsecured NZ$M –NZD borrowings Unsecured NZ$M The table below details changes in the Group’s liabilities arising from financing activities, including both changes. and cash non-cash arising from ofReconciliation liabilities activities financing C7 Borrowings continued C Retail bonds Other sources of borrowing facilities bank Total 55 56 57 54 58 54 1 July 2018 1 July 1 July 2017 1 July Balance at at Balance Balance at at Balance 1,239 1,239 1,521 1,521 986 986 487 487 467 467 725 725 48 48 47 47

borrowed in borrowed Currency NZD USD NZD NZD NZD NZD borrowings borrowings drawn drawn Term Term Term Term 439 439 439 439 462 462 462 462 – – – –

borrowings borrowings amount repaid repaid Facility Facility 1,948 1,948 1,278 1,278 (200) (200) Term Term Term Term (200) (200) (484) (272) (272) 600 600 500 500 (212) (212) 670 670 598 598 100 100 80 80 70 70 – – –

Drawn facility adjustments adjustments 2019 amount value value value value 1,278 1,278 1,376 1,376 500 500 598 598 100 100 Fair Fair Fair Fair 37 37 37 37 80 80 12 12 70 70 12 12 98 98 28 28 – – – –

facility amount facility 2019 2018 Exchange Exchange Undrawn Undrawn Foreign Foreign Foreign Foreign 572 572 572 572 572 – (2) (2) 9 – – 2 – – – – – 7 5 3

Facility amount Facility Transaction Transaction costs paid costs paid & accrued & accrued 1,184 1,184 1,914 1,914 500 500 650 650 439 439 100 100 730 145 145 80 80 – – – – (1) (1) (1) (1) 1 1

facility amount facility 2018 lease paid lease paid Finance Finance Finance Finance Drawn Drawn 1,428 1,184 1,184 500 500 244 244 439 439 100 100 164 164 145 145 80 80 – – – – (1) (1) (1) (1) (1) (1) (1) (1)

Derecognition Derecognition facility amount facility Undrawn Undrawn Lease Lease Lease Lease 486 486 486 486 486 (13) (13) (13) (13) – – – – – – – – – – – –

30 June 2019 June 30 58 57 56 55 54 1 July 2018 1 July Balance at at Balance Balance at at Balance a fixed rate of return over a set period of time. time. of period aset over return of rate a fixed unsecured short-term debt obligations paying NZD commercial paper comprises senior Placement Market. Private States United the in issued bonds rate fixed unsecured are bonds rate fixed USD 4.21%. and 4.88% 4.53%, of rates interest bearing bonds retail unsecured senior are Bonds Retail farm. wind Te of Uku construction the for Denmark, of agency credit export official the by provided loan, term amortising unsecured an is facility EKF amargin. plus rate floating market relevant the at interest bears Funding 1,502 1,521 1,521 695 695 986 986 487 487 775 775 48 48 32 32

129 Meridian Annual Report 2019 Notes to the Financials — for the year ended 30 June 2019 Menu C8 Finance lease payable payable lease Finance C8 C Non-current Current Comprising: lease finance in investment Gross Later than 5 years Later than 3 years and not later than 5 years Later than 1 year and not later than 3 years Not later than 1 year Analysed as: payments lease minimum of value Present Later than 3 years and not later than 5 years Later than 1 year and not later than 3 years Not later than 1 year Minimum payments lease payableFinance lease analysis Less future finance costs finance future Less lease finance in investment Gross Later than 5 years 2019 (47) (47) 56 56 $M 32 32 32 32 79 79 27 27 31 31 9 5 2 2 1 1 9 2018 123 123 48 48 $M 43 43 48 48 89 89 (75) (75) 47 47 14 14 13 13 2 2 7 1 1 liabilities cost. at amortised payables are as financial classified lease Finance lease. of the term constant periodic charge over the a reflects interest The expense. interest and principal between split payable. Resulting repayments are arrangements as a finance lease lease payments under finance lease of minimum value present the recognises Meridian lessee. to the rewards of ownership and risks the all A finance lease transfers substantially measurement and recognition Finance lease payable, and equipment. plant other as classified are assets All million). $42 2018: (30 June million $27 is equipment and plant B1 Property, to a finance lease and included in note subject of assets value book net The statement. income the in costs finance in million) $6 2018: (30 June million of $4 expense lease interest Meridian reported a finance derecognised in 2019. been has portion this aresult as of control, to loss due definition met the longer no Mercer to Mt relation in lease finance of the portion a that determined was 2019 it In transmission network. to the Mercer Mt and Creek Mill at farms wind connect that assets to certain transmission connection Meridian's finance leases relate Finance lease details

130 Meridian Annual Report 2019 Notes to the Financials — for the year ended 30 June 2019 Menu rental reviews, in the event Meridian exercises its options to renew. options its exercises event Meridian the in rental reviews, market and increases Index Price Consumer including clauses, rent review contain contracts Lease years. to up 10 to extend options with 1 to 12 years, from ranging leases of the terms with space office leases also Meridian to renew. developing wind farms. These leases range up to 25 years with options In Australia, Meridian has entered into lease agreements for land when million). $6 2018: June 2019 (30 in $7 million were payments Lease lease. of the term over the basis a straight-line on Operating lease payments are recognised in other operating expenses items. leased of the of ownership benefits and risks the all Operating leases are leases where the effectively lessor retains substantially Operating measurement leases, and recognition C9 Commitments C Total operating lease commitments 5years than More Later than 3 years and not later than 5 years Later than 1 year and not later than 3 years Less than 1year than Less operatingNon-cancellable lease commitments Group 2019 $M 62 62 91 91 12 12 11 11 6 2018 $M 45 45 76 76 12 12 12 7 guarantees is $32 million (30 June 2018: $36 million). $36 2018: June (30 million $32 is guarantees these under liability maximum The Limited. Pty Windfarm Mercer Mt guarantees for various construction and grid connection obligations of In addition to the above Meridian Energy Limited has provided parent million). $79 2018: June (30 million $35 is clearing and lines companies. The maximum under liability these guarantees counterparties, with these mostly relating to for security energy market Various entities within the Group provide guarantees to external Guarantees Total expenditure commitments capital Software Property, plant and equipment commitments expenditure Capital Group 2019 $M 8 8 –

2018 $M 4 5 1 131 Meridian Annual Report 2019 Notes to the Financials — for the year ended 30 June 2019 Menu b. a. information: is there notes the of section this In risks. these manages and performance, and how Meridian Meridian'saffect financial position risks Meridian faces, how these risks This section explains the financial In section. this risk to manage used instruments Financial D risk. to manage used instruments (hedging)analysing financial financial risk management; and outlining Meridian's approach to enter into speculative trades. detail).further Meridian does not for section accounting to Hedge accounting relationships (refer hedges are designated in hedge of Treasury number Asmall related". as either "Treasury" or "Electricity- (hedges). are Hedges categorised variety of financial instruments a uses Meridian exposures, risk In order to help balance certain below. further discussed are managed key risks The Group. of the value economic on the financial performance and effects adverse potential to minimise financial risk management activities guide management out in carrying principles and risk tolerance levels to appropriate set which Policies Credit and Hedging Treasury, Electricity Group including policies approves Board The markets. electricity wholesale and markets financial of unpredictability the on focuses risk management framework financial Its risks. of financial variety to a it expose activities Meridian’s D1 Financial risk management

business nature of the hedge. of the nature business hedges", depending on the underlying of treasury value fair in change "Net or value of and other electricity hedges" fair the in change "Net in recognised Fair value (or unrealised) changes are being hedged. the underlying business/transactions as line EBITDAF, same the in within recognised in the income statement are hedges on flows Realised statement. the income Remeasurement is recognised in remeasured on a periodic basis. subsequently are and agreed, are contracts the dates the on value fair at recognised initially are Hedges statement. the income through value fair as instruments and designated certain financial Meridian accounts for derivative • • • financial hedging instruments as: Meridian designates or classifies recognition instrument Financial relationship. ahedging in designated been instruments which have not financial for trading, held transaction; or or a highly probable forecast liability or asset arecognised with associated flow cash particular of a hedges hedge, flow cash liabilities or a firm commitment; or or assets of recognised value fair of the hedges hedge, value fair detail later in this section. this in later detail more in discussed is This periods. future in adjustment of material risk have asignificant can estimates These date. reporting each at value a fair and judgement in order to generate require management estimation electricity-related hedges that of anumber has Meridian • • • valuation process: to the of inputs observability the on three-level fair value hierarchy based measurements are grouped within a financial instruments. Fair value for values fair to calculate order in approach flows cash adiscounted or Meridian uses quoted prices and/ for instruments financial value fair of Calculation (i.e. unobservable inputs). onbased market observable data not are that inputs Level 3Inputs: Level 1 in included prices quoted prices) inputs observable other than prices) or indirectly (i.e. derived from as (i.e. directly either Level 2Inputs: date reporting at access can entity identical or assets liabilities that the for markets active in (unadjusted) prices quoted Level 1Inputs:

132 Meridian Annual Report 2019 Notes to the Financials — for the year ended 30 June 2019 Menu D1 Financial risk management continued management risk D1 Financial D minimum rating of 'A' rating accepted. minimum are independently related with parties a For banks and financial institutions, only levels. to exceed acceptable deemed if risk the to mitigate acts and basis aregular on exposures customer of retail nature and size the occurring. Management monitors debts of bad chances the minimise and works with customers to oversees the collection of receivables are accepted. The credit team customers new before out are carried checks credit customers, retail For other financial institutions. helddeposits with banks and instruments, guarantees and hedging customers, retail and to sales electricity wholesale to: relation in of default risk to the exposed is Meridian Credit risk significant credit risk concentrations. have any not does Meridian losses. credit for any expected we provide of how for adescription C6 to Note Refer report. of this date the at risk to credit exposure likely maximum Meridian’s represent best sheet balance the on recognised assets of financial amounts carrying The Officer. Financial the Chief by monitored are reviewed and customers by wholesale provided utilisation of credit limits and security the and assessments These levels. reduce credit risk to acceptable to from counterparties obtained are of credit/guarantees letters relevant factors. If appropriate, position, past experience and other financial into account taking made, is quality of credit assessment an not independently credit rated, the Board. Where customers are by set limits with accordance in internal or external credit ratings on based set are limits credit For wholesale customers, individual risks are manageable. refinancing that so (or laddered) spaced well are these ensures and also monitors contractual maturities Meridian currencies. and sources funding of different arange uses one lender or funding Meridian type, any on risk To reduce concentration basis. a portfolio on requirements Meridian manages its term debt abnormal hydrological conditions. headroom under both normal and helps ensure Meridian has sufficient This facilities). of undrawn details for Borrowings C7 (see million $200 least of at available lines credit surplus committed by maintaining Meridian ensures flexibility in funding liquidity. patterns, which can affect marketelectricity and weather of the nature dynamic the to exposed is Meridian risk Liquidity of Meridian. byissued the bank to counterparties credit and performance guarantees of letters of the respect in bank of the Meridian indemnifies the obligations operations (30 June 2018: $115 million). $67 million for Meridian's general of support credit provide which of credit and guarantee arrangements of letters into anumber entered has In addition to borrowings, Meridian

133 Meridian Annual Report 2019 Notes to the Financials — for the year ended 30 June 2019 Menu flows and debt financing. obligations from operating cash future its to meet expects Meridian amounts. carrying to flows cash undiscounted total from areconciliation and liabilities to financial relating contracts) the under expected (settlements flows cash undiscounted contractual of the The following tables are an analysis Contractual maturities – Risk Liquidity continued management risk D1 Financial D

LGCs Borrowings $M 2019 IRS Payables, accruals, provisions and option premiums Electricity hedges Finance leases Borrowings $M 2018 Finance leases Electricity hedges IRS Payables, accruals, provisions and option premiums within within 1 year 1 year 602 602 336 336 858 858 223 223 295 295 501 501 Due Due Due Due 20 20 29 29 29 29 6 9 5 7

1 to 2years 1 to 1 to 2years 1 to Due in in Due Due in in Due 142 142 178 178 101 101 30 30 35 35 62 62 32 32 25 25 14 14 4 9 – 8

3 to 5years 3 to 3 to 5years 3 to Due in in Due Due in in Due 680 680 538 538 572 572 714 714 30 30 26 26 53 53 25 25 77 77 13 13 51 51 9 –

Due after after Due Due after after Due 5 years 5 years 1,127 1,127 730 730 953 953 571 571 64 64 56 56 29 29 25 25 89 89 32 32 28 28 10 10 –

undiscounted undiscounted cash flows cash cash flows cash 2,446 2,446 2,585 2,585 1,810 1,810 1,711 1,711 Total Total Total Total 202 202 426 426 410 410 133 133 123 123 68 68 63 63 79 79 6 Impact of Impact of non-cash non-cash non-cash non-cash other other other other items items (4) (4) (5) (5) (4) (4) – – – – – – – 3 (1) (1) (1) (1)

discounting discounting interest/FX interest/FX interest/FX interest/FX Impact of Impact of (336) (336) (428) (428) (362) (362) (234) (234) (47) (47) (29) (29) (75) (75) (18) (18) (21) (21) (19) (19) (6) (6) (5) – carrying carrying carrying carrying 2,083 2,083 1,470 1,470 2,152 2,152 1,473 1,473 value value 405 405 2019 2019 2018 2018 184 184 381 381 114 114 48 48 32 32 61 61 61 61 6

134 Meridian Annual Report 2019 Notes to the Financials — for the year ended 30 June 2019 Menu D hedge accounting relationships. in placed not Energy hedges are other energy market participants. with directly traded are which of some and Exchange, Stock Australian the on which traded are of some position, net energy derivatives to help manage its Meridian also uses electricity prices. energy to future exposure of the for most hedge anatural has of means that electricity Meridian bothBeing a generator and a retailer to volatility in forward prices. electricity exposed is so and market electricity Meridian trades in the wholesale priceCommodity risk discussed below. to are we are exposed that risk of market sub-types main The cause. income statement volatility this can subsequent the and markets those in falls and to rises exposed is such as and financialelectricity markets and the both in involved is Meridian risk Market

hedge accounting relationships. flow cash and value fair both in placed are CCIRS debt. of the life over the flows coupon the and exchange risk on both the notional These derivatives minimise foreign currency. to functional back proceeds the to convert used are (CCIRS) rate swaps interest currency cross Dollars, US in raised debt term For the transaction/underlying exposure. dependinghedges, on the nature of flow cash or hedges value fair either accounting relationships and can be hedge in placed be may items reporting currency terms. Material in value the to fix contracts forward or spot exchange foreign we use Meridian's general operations, from resulting exposures For currencies. foreign in raised debt term from also and currencies denominatedservices in foreign and of goods procurement and exchange risk arising from sales to foreign exposed is Meridian Foreign exchange risk policy and profile. and policy hedging approved Board the with line in rates interest floating to fix hedges IRS uses Meridian currency. borrowings in the entity’s reporting rate floating in results This currency. principal repayments to the reporting currency denominated interest and foreign all to swap CCIRSs uses it Meridian borrows in foreign currency Where hedges. IRS and of CCIRS acombination using achieved is This IRS. of fixed profile based a tenure over rate exposure interest resulting the hedges and inception, loan at rates to floating borrowings of its Meridian swaps a significant portion currencies. foreign in raised for derivatives used for term debt section Exchange Foreign to the refer also Please profile. and policy hedging approved aBoard with line in rate risk, to interest exposure net the to manage used then is (IRS) rate swaps of interest A portfolio time. over rates interest in to changes thus exposed is and basis afloating fixed and debtMeridian issues on both a rate debt. floating and of fixed amix is which portfolio, funding its from arising risk rate to interest exposed is Meridian Interest Rate risk

135 Meridian Annual Report 2019 Notes to the Financials — for the year ended 30 June 2019 Menu on the following pages. on the following noted are categories two of these analysis and disclosure Further Treasury hedges and Electricity-related hedges. Meridian groups its financial instrument into two categories – continued management risk D1 Financial D Non Current Non Electricity-Related Hedges Treasury Hedges Current which of Assets 2019 195 195 309 309 309 309 114 114 191 191 118 118 Fair value on the balance sheet balance the on value Fair Liabilities (209) (184) (245) (245) (245) (245) (36) (61) Assets 2018 213 213 213 213 136 136 152 152 77 77 61 61 Liabilities (129) (129) (181) (181) (181) (181) (114) (114) (52) (52) (67) (67) 136 Meridian Annual Report 2019 Notes to the Financials — for the year ended 30 June 2019 Menu The instruments used are CCIRS, IRS and forward exchange contracts (FX). (FX). contracts exchange forward and IRS CCIRS, are used instruments The funding and activities from general Group operations. the interest rate risk and foreign exchange risks that arise from Meridian's inHedges the Treasury category generally relate to management of Treasury Hedges – Basis and Margin Risk 63 62 61 60 59 In the above table the CCIRS are separated into component as follows: parts USD. in issued debt term long with involved risks to hedge CCIRS uses Meridian Treasury Hedges – Interest Rate Risk Rate –Interest CCIRS – Foreign Exchange Risk FX IRS Treasury hedges

These cover multiple legs including offsetting legs and maturities out to 2034. to out maturities and legs offsetting including legs multiple cover These instruments”. change “Net treasury of within value in fair statement income the in recognised are portfolios FX and IRS the of value borrowings. fair in related the on Changes effects retranslation opposite and equal by offset is treasury and of value fair in instruments" change "Net in statement income the in recorded is retranslation of impact The exchange rates. foreign spot in changes to due CCIRS the of value in movement the is this Risk: Equity. within Exchange Reserve Foreign Hedge Flow Cash the to portions hedge effective accounting hedge adjustments that transfer flow cash with together instruments", treasury of value fair in "Net change statement the in income the in recorded is movement this of side other The margin. credit and (excluding foreign exchange) basis in changes to due CCIRS the of value the in movement the is this risk: margin and Basis borrowings. USD of value fair treasury instruments", in together change with changes "Net in the the in fair value hedge adjustments on statement the designated income the in recorded is movement this of rates. side interest The other benchmark in changes to due CCIRS the of value in movement the is this risk: rate Interest 62 62 59 60 61 Level 2 2 2 Assets 2019 Fair value on the balance sheet balance the on value Fair 114 114 40 40 $M 58 58 92 92 22 22 (6) (6) – Liabilities (184) (184) (184) (184) – – – – – Assets 2018 $M 44 44 47 47 61 61 14 14 (1) (1) 4 – Liabilities (114) (114) (114) (114) – – – – – 2019 in the income income the in (63) (63) (62) (62) $M movements (1) (1) (1) (1) statement – – – Fair value value Fair 2018 $M (4) (4) (3) (3) (1) (1) – – – –

1,492 1,492 2019 Outstanding Outstanding 598 598 $M

principals 14 14 aggregate notional notional 1,837 1,837 2018 439 439 $M 13 63 shown in the table. the in shown not are these therefore and values to fair change little very in result rates exchanges spot in changes portfolio, FX of the size small to the Due table. below the in shown not is and nil is sensitivity P&L CCIRS the Therefore debt. USD of the retranslation FX the and entries accounting hedge from impacts by opposite offset fully are CCIRS of the value fair the in changes that Note andHedges therefore on Meridian’s after profit tax and equity. of Treasury valuation the on constant) held are variables other all (assuming inputs significant in of changes impact the summarises below table The Analysis –Sensitivity Hedges Treasury in. designated are CCIRS the that relationships hedge flow cash and value fair the on detail for further management risk D1of note financial section Accounting Hedge refer to the Please borrowings. currency of foreign retranslation and adjustments accounting hedge of any related net shown are statement income the in movements value fair table, opposite the in that Note Australian benchmark bill rate New Zealand benchmark bill rate rates Interest +100 bps +100 bps -100 bps +100 (bps) points basis -100 Sensitivity 2019 Impact on after tax tax after on Impact (39) (39) 42 42 $M (4) (4) 4 profit &equity profit 2018 $M 36 36 (37) (37) (4) (4) 4

137 Meridian Annual Report 2019 Notes to the Financials — for the year ended 30 June 2019 Menu 64 where it generates electricity. thesupport management of inflow and storage variability in the catchments Meridian trades options electricity with other generators. These are used to markets. futures through managed be not can that risks specific These hedges are generally long-term, large volume contracts that manage or financial institutions. where the counterparties include customers, other energy market participants The category contains ElectricityHedges" "Other over the counter derivatives, that are traded on various exchange markets. based The "Market traded hedges" category contains electricity those instruments production. fall short of) generation (or exceed may customers to supply required of electricity the volume Additionally, inflows into Meridian's storage lakes are variable, therefore for generated, electricity or pays to buy to electricity supply customers. receives it of electricity price spot the in to changes exposed is Meridian from the generation, purchase and sale of electricity. inHedges this category relate to Meridian's management of risk arising Electricity Related Hedges continued management risk D1 Financial D – LGC – Holdings created from wind farm generation farm wind from created –Holdings – LGC LGCs: Market traded electricity hedges: Electricity Related Hedges Electricity related hedges –Hedges – LGC options: Electricity Other electricity hedges: These cover multiple legs including offsetting legs and maturities out to 2030 to out maturities and legs offsetting including legs multiple cover These

2 1 3 1 Level 3 Assets 195 195 70 70 52 52 22 22 16 16 51 51 2019 $M 6 Fair value on the balance sheet balance the on value Fair Liabilities (58) (58) (61) (61) (3) (3) – – – –

on the balance sheet at their fair value. value. fair their at sheet balance the on instruments financial as recognised all are hedges and LGC holdings price. spot prevailing the at margin energy in income as recognised are LGCs generation, of time At the farm. wind of each volatility profit the reduce consequently and represents the derivatives used to firm prices received for LGCs generated second The RECs. surrender and to purchase required is Australia Powershop earn in the form of Large Generation Scale (LGCs). Certificates Additionally, Renewable Energy (RECs) Certificates that Meridian's Australian wind farms the represents first The sub-components. two has LGC category The Hedges. Related to Electricity applied not is accounting Hedge hedges". other and of electricity value fair in change "Net within statement income the in recognised are hedges related of electricity value fair the in Changes parameters. approved by Board guided is strategy of this Execution sales. expected generation purchases and electricity required to contracted support both by estimating exposure net its on focuses strategy hedging Meridian's Assets 152 152 30 30 22 22 87 87 $M 2018 13 13 17 17 5 Liabilities (52) (52) (67) (67) (9) (9) (6) (6) (6) (6) – – Fair value movements in the income statement 58 58 35 2019 (17) (17) 19 19 21 21 17 17 2 $M (22) 24 24 2018 (51) (51) 16 16 16 16 (11) (11) – $M

24,589 GWh GWh 24,589 14,613 GWh 3,990 GWh GWh 3,990 1.0 million million 1.0 0.1 million million 0.1 2019 Outstanding aggregateOutstanding notional volumes notional 26,667 GWh 10,422 GWh

0.2 million million 0.2 5,123 GWh GWh 5,123 1.4 million million 1.4 2018 64

138 Meridian Annual Report 2019 Notes to the Financials — for the year ended 30 June 2019 Menu Electricity Related Hedges: for EBITDAF through settlements of the asummary provides following The Settlements of Electricity Related Hedges Related and Hedges therefore on Meridian’s after profit tax and equity. (assuming all other variables are held constant) on the valuation of Electricity inputs significant in of changes impact the summarises below table The Electricity Related Hedges – Sensitivity Analysis continued management risk D1 Financial D LGC prices LGC volumes Call rates Discount revenue Operating prices Electricity &options hedges Electricity in EBITDAF in settlements Total expenses Operating Electricity Hedges 176 176 (92) (92) 84 84 LGCs 2019 29 29 (12) (12) 17 17 Electricity Options +10% –10% +10% –10% bps +100 bps –100 +10% –10% Sensitivity 18 18 18 18 – Total 182 182 119 119 (63) (63) Electricity Hedges (14) (14) 27 27 (41) (41) 2018 LGCs 35 35 23 23 (12) (12) 2019 2019 Impact on after tax tax after on Impact Electricity (57) (57) $M 57 57 (5) (5) 5 Options (1) (1) (1) 1 1 profit &equity profit 6 6 – 2018 2018 (48) (48) $M 48 48 Total (4) (4) (6) (6) 4 6 (1) (1) 1

15

21 21 (6) (6) of the contract. of the life remaining over the statement income the in yet recognised to be losses or gains future potential reflects table the in shown difference resulting The contract. of the life over the valuations to future applied then is recalibration This price. transaction to the equal inception at avalue in to result percentage by afixed model valuation the for by recalibrating accounted is difference This hedge differs from the transaction price (which is thevalue). evidence best fair of electricity of an value modelled the when arises difference recognition initial An Initial recognition difference Closing difference Recalibration for future price estimates and time and estimates price future for Recalibration amortised and expired Volumes Initial differences on new hedges and options Opening difference arising from electricity hedges and options Movements in recalibration differences 2019 2019 $M (7) (7) (3) (3) 5 – (1) (1) 2018 2018 $M 6 5 – – (1) (1) 139 Meridian Annual Report 2019 Notes to the Financials — for the year ended 30 June 2019 Menu D movements in his to report the Board. value fair explains Officer Financial Chief The measurement. value fair for inputs and techniques valuation of key appropriateness overall the Committee of Meridian determines Risk and Audit The available. is it dataobservable to the extent that or liability, Meridian uses market- asset of an value fair the estimating In Fair value and technique key inputs DCFs / Black Scholes /Black DCFs using valued & Options Contracts Forward LGC valued using DCFs hedges Electricity or liability asset Financial , • Other factors , include prices. spot and benchmarked against market price curve from a third broker, party Price relevant wholesale market factors. any other and supply of new cost the and demand of expected analysis afundamental on based is This pricewholesale electricity is used. forward of long-term estimate best long-dated contracts), Meridian's available or not relevant (i.e. for Price of input Description recognition differences. a consequence of initial as curves price to forward Calibration factor applied , based on a forward LGC aforward on , based , where quoted prices are not not are prices quoted , where • • These are: technique. valuation by the used are assumptions and of inputs number (DCFs), a instrument of the flows cash future estimated of the value present the as calculated is instrument of afinancial value fair the Where the life of electricity options; options; of electricity the life over called volumes electricity of estimate best Meridian's forward foreign exchange rates; published and rates interest market published for electricity, ASX to the forward price curves referenced A$11 toA$11 A$43 ASXobservable prices. terms), excludes real (in $47/MWh to $77/MWh unobservable inputs significant of Range electricity relatedelectricity hedges. 3 2and of level valuation the in used additional key inputs and techniques The table below describes the • • • • contracts run their full term. full their run contracts continuesNZAS to operate; and initial recognition differences; of aconsequence as curves price calibration factor applied to forward risk; for counterparty adjusted curve IRS forward the on based rates discount has the opposite effect. the opposite has LGC prices forward the in Adecrease hedges. of buy value fair the increases and hedges of sell value fair the decreases price forward LGC the in increase An opposite effect. the has price electricity wholesale forward the in Adecrease hedges. sell of value fair the decreases and hedges of buy value fair the increases price wholesale electricity forward the in increase An value input to fair of Relationship

140 Meridian Annual Report 2019 Notes to the Financials — for the year ended 30 June 2019 Menu (30 June 2018: $(44) million). $(44) 2018: June (30 million $18 total date balance held at are 2019 which in hedges 3electricity of level movements value Fair three financial instruments: of level value fair the in and movements EBITDAF through movements of the asummary provides following The Level 3 financial instrument analysis continued management risk D1 Financial D Total settlements in EBITDAF Operating expenses revenue Operating EBITDAF: in settled hedges other and Electricity Balance at the end of the year the of end the at Balance Fair value movements period the of beginning the at Balance and other hedges Total realised and unrealised losses on electricity Hedges settled Remeasurement Reconciliation of level 3 fair value movements $M movements value 3fair level of Reconciliation Net change in fair value of electricity and other hedges: other and electricity of value fair in change Net

Electricity Hedges 152 152 182 182 (117) (117) (65) (65) 117 (39) (39) 35 35 35 (4) 2019 Electricity Options Options 70 70 87 87 (18) (18) (17) (17) (17) 18 18 18 18 – 1 200 200 Total Total (135) (135) 135 135 153 153 (65) (65) 66 48 48 18 18 18 Electricity Hedges (39) (39) (51) (51) (16) (16) (35) (35) (51) 53 53 (18) (18) 35 35 12 12

2018 Electricity Options Options (11) (11) (11) (11) 98 98 87 87 (5) (6) (6) 6 6 –

Total Total (62) (62) (62) (62) 110 48 (21) (21) 59 59 (18) (18) (41) (41) 41 41

141 Meridian Annual Report 2019 Notes to the Financials — for the year ended 30 June 2019 Menu hedge accounting relationships. value fair in borrowings USD on risk Meridian designates the interest rate CCIRS. matching of the leg USD the rate on fixed same the by receiving neutralised is risk This change. rates interest benchmark should rate risk, liabilities and thus present interest rate fixed are borrowings USD The Rate Risk Interest ways: following the for in we account present Meridian with risks which instruments) (hedging CCIRS the and items) (hedged borrowings USD The life. over its effective to remain relationship hedge the we expect where and hedge, of the value fair the to dominate expected not is risk credit where match, economic an are are eligible for hedge accounting and and the hedge exposure underlying accounting relationships where the Meridian only designates hedge Meridian manages. keyof the risks forManagement section a description Risk of the start refer to the Please economically hedge these exposures. financial instruments that are used to CCIRS the and borrowings for USD only so accounting, doing hedge of use limited makes Meridian Accounting Hedge continued management risk D1 Financial D cash flow hedge relationships. into risk margin and (excluding FX) such, Meridian designates risk basis As flows. cash future in variability of arisk presents This borrowings. rate NZD floating having Meridian in results economically CCIRS and borrowings of USD combination The Risk Margin and Basis (2018: $3m). $34m total borrowing USD the on adjustments accounting hedge date to life accumulated the that Note ineffectiveness. hedge to as referred is difference residual This statement. income the in amount to aminimal net should instrument hedging and item hedged the of both revaluations relationships remain effective, the accounting hedge the as long As • • This means that: income statement for this same risk to the revalued are CCIRS the C7 Note in adjustments" accounting "hedge as –noted risk hedged of the value fair the in borrowings are adjusted for changes USD of the value carrying the included within Financial Instruments. Term Borrowings and CCIRS are USD borrowings are included within sheet, balance the on that Note • • • to: refer Please statement. income the in ineffectiveness hedge in result which differences between the above entries small be may there earlier, noted As • • This means that: movements during the period and Reserve Flow Hedge Cash of the balance the Equity for in of Changes Statement the period the during value in fair including notionals and changes (CCIRS), hedging instruments the on information further for D1Note Hedges Treasury borrowings) items (USD hedged of the carrying value for the Borrowings C7 Note Reserve within Equity Flow Hedge Cash to the statement income the from moved are hedge of the portions effective the risk and margin income statement for risk basis to the revalued are CCIRS the

liabilities (NZ$438m equivalent).liabilities (NZ$438m new of the size and borrowings) year 15 and 12 (10, nature term long to the Ineffectiveness has increased due financial year. current the in borrowings USD new of issue to the due is This years. previous in been has it than period Hedge ineffectiveness is higher this relationships. hedge of the zero life over the to net will ineffectiveness Hedge entries. accounting hedge the in included not is but value fair CCIRS of the part is risk This CCIRS. on risk counterparty by credit Ineffectiveness is primarily caused inHedges" the income statement. of Treasury value fair in change "Net This isineffectiveness. included within The below table summarises hedge Hedge Ineffectiveness Impact on income statement Ineffectiveness Hedge 2019 $M $M 1 2018 $M $M – 142 Meridian Annual Report 2019 Notes to the Financials — for the year ended 30 June 2019 Menu settlement. net and of positions netting permit that place in agreements legal has it where instruments of financial value fair the offsets Meridian circumstances certain In offset are which instruments Financial date. reporting at rates AUD/NZD exchange spot using to equivalent NZD translated and rates interest forward market on based table this in shown are They rates. AU benchmark and NZ on based quarterly set are coupons currency Functional Amounts noted include coupons and repayment/exchange of notionals on maturity. CCIRS. hedging the and borrowings USD the both on we expect that flows cash future undiscounted contractual the estimates table below The Flows Cash Future continued management risk D1 Financial D shown in NZD) in shown – flow maturity and (coupons leg currency – Functional Net financial instruments Net financial – USD leg (coupons and maturity flow – shown in USD) in –shown flow maturity and (coupons leg – USD CCIRS Total financial instrument liabilities – Treasury hedges – Electricity and other hedges liabilities instrument Financial – Electricity and other hedges Financial instrument assets USD) in (shown Borrowings USD Currency as indicated below Total financial instrument assets – Treasury hedges Due within within Due Gross Value Value Gross 1 year (19) (19) (17) (17) 17 17 (303) (303) 253 253 (184) (184) 367 367

(119) (119) 114 114 64 64 Due within within Due 1–2 years 1–2 (19) (19) (17) (17) 17 17 Value Offset Offset Value 2019 2019 $M $M

Due within within Due 2–5 years 2–5 (58) (58) (58) (58) 58 58 58 58 – – – (87) (87) (96) (96) 87

Carrying Value Value Carrying Due after after Due 5 years (486) (486) 486 486 (245) (245) 309 309 (184) (184) (671) (671) 195 195 114 114 64 64 (61) (61)

Due within within Due Gross Value Value Gross 1 year (284) (284) (201) (201) 201 201 (226) (226) 258 258

197 197 (114) (114) (112) (112) 32 32 61 61 Due within within Due 1–2 years 1–2 Value Offset Offset Value (5) (6) (6) 5 2018 2018 $M $M

Due within within Due 2–5 years 2–5 (45) (45) (45) (45) 45 45 45 45 – – – (63) (63) (53) (53) 53 53 Carrying Value Value Carrying

Due after 5 years 152 152 213 213 (136) (136) (114) (114) (181) (181) 32 32 (67) (67) (112) (112) 112 112 61 61

143 Meridian Annual Report 2019 Notes to the Financials — for the year ended 30 June 2019 Menu Powershop Limited. Australia Pty to services office back and customer front-line provide and Zealand New in electricity to retail continues Limited Meridian). Powershop New Zealand of subsidiary owned (a wholly Limited Federation to Flux Limited) UK Flux-UK Limited (previously Powershop in shareholding full its as well as assets business supporting and platform retail gas and electricity the sold Limited 2017, 1July Zealand On New Powershop fall due. they as obligations their meet they to ensure order in necessary tosupport its subsidiaries where Meridian Energy Limited provides rights. voting Group's the equals held interests ownership of proportion the and directly, holds Group the that shares of ordinary solely They all have share consisting capital subsidiaries listed opposite. Meridian Energy Limited and the of statements financial the include The consolidated financial statements E1 Subsidiaries Meridian's Subsidiaries. about information is there notes the of section this In Group. the of financial position and performance the affects it how and structure Group help readers the understand Meridian to information provides section This In section this structure Group E

Flux-UK Limited

Meridian Energy Limited 66 65

Meridian Finco Pty Limited Mt Mercer Windfarm Pty Limited GSP Energy Pty Limited Name of entity of Name Members of guaranteeing group. Limited. Flux-UK to name its changed Limited UK Powershop 2018, 4June On Flux Federation Limited Powershop New Zealand Limited Meridian Energy International Limited Meridian Limited Meridian Meridian Energy Captive Insurance Limited Meridian LTI Trustee Limited Dam Safety Intelligence Limited Three River Holdings No. 1Limited No. Holdings River Three Three River Holdings No. 2Limited No. Holdings River Three Powershop Australia Limited Pty Meridian Australia Holdings Limited Pty Limited Pty Holdings Range Monaro Wind Meridian Meridian Energy Australia Limited Pty Meridian Wind Australia Holdings Pty Limited Pty Holdings Australia Wind Meridian Limited Pty Range Monaro Wind Meridian Limited Pty Markets Energy Meridian Mt Millar Wind Farm Pty Limited Pty Farm Wind Millar Mt 65 66 66 66 66 66 66 66 66 66 66 66 66 Software development Software Electricity retailing Electricity Non-trading entity Non-trading Non-trading entity Non-trading Insurance Trustee Professional services Electricity retailing Electricity Electricity generation Electricity generation Holding company Holding company Electricity generation Holding company Holding company entity Non-trading Financing Management services Holding company Holding company Licence holder Principal activity New Zealand dollar New Zealand dollar New Zealand dollar New Zealand dollar New Zealand dollar New Zealand dollar New Zealand dollar Australian dollar Australian dollar Australian dollar Australian dollar Australian dollar Australian dollar Australian dollar Australian dollar Australian dollar Australian dollar Australian dollar New Zealand dollar New Zealand dollar British pounds Functional Currency

by the group the by Interest held 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 2019 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 2018 144 Meridian Annual Report 2019 Notes to the Financials — for the year ended 30 June 2019 Menu reporting standards. reporting financial with comply required to financial statements which is information relating to Meridian’s This includes section the remaining In section. this Other F • • • shares vest: many how to determine applied is scale vesting aprogressive achieved, have been hurdles performance the If • • period: a three-year over met are hurdles performance following the whether on depend LTI plan trustee. Any shares awarded by the trust on held shares the with interest-free loan from the company, purchase Meridian shares via an executives where scheme, bonus cash and LTI loan The ashare is (LTI) incentive term Long F1 Share-based payments TSR of the peer group. peer of the TSR percentile 50th the than less is TSR company’s the if vest will shares No points. two these between basis straight-line a on vesting with peer group, of the TSR percentile 75th the meeting on vest will shares 100% will vest. shares executive’s of an 50% least group, at peer benchmark of the TSR percentile 50th the exceeds period three-year over the TSR company’s the If group. peer to a benchmark The company’s compared TSR be positive; and shareholder return must (TSR) The company’s absolute total

reallocation. until Trustee Limited LTI by Meridian trust in held now are forfeited 10,011) shares 2018: June (30 the eligible and participants, 70,051 shares have been transferred to of 223,623 amount Atotal repaid. been now has 2019 of $0.6m June 30 at loans free interest of the balance Therefore,100%. the outstanding was of 2019,end of vesting level the the at LTI vested the that For plan will also be forfeited. vested have not any that and basis shares are allocated on a percentage percentile, 75th the below group, but percentile of the benchmark peer 50th the than greater is TSR the LTI. the Where under benefits no the relevant executive receives and trustee to the forfeited are shares of the all percentile, 50th of hurdle TSR relative group peer the meet not does zero), TSR if or than less is terms absolute in (i.e. positive not is TSR If scale. vesting with the outcome on the progressive the peer group of companies along and of Meridian TSR measures independent external expert For each three-year plan, an outstanding loan balance. executive’s to the repay used is other deductions, applicable salary before but of tax), deduction the (after amount acash confirmed, been has level vesting the Once

145 Meridian Annual Report 2019 Notes to the Financials — for the year ended 30 June 2019 Menu organisations with which members of the Group may transact. or companies of other officers or directors be may Group of the Directors tax. and travel postal, energy, transmission, trading including of services independently and on an arm’s-length Transactions basis. cover a variety withMeridian transacts other Government-owned or related entities parties Related F2 Movement in zero-priced share options continued payments Share-based F1 F

07/09/2017 22/08/2018 2019 Grant date Grant 04/08/2016 Total 04/08/2016 07/09/2017 2018 03/09/2015 Total Vesting date 30/06/2020 30/06/2021 30/06/2019 30/06/2019 30/06/2020 30/06/2018 fair value of option of value fair Weighted average $1.63 $1.63 $1.20 $1.20 $1.78 $1.78 $1.63 $1.63 $1.61 $1.61 $1.61 $1.61

start of the year the of start 1,001,053 1,001,053 560,596 302,533 302,533 258,063 456,205 456,205 Balance at at Balance 544,848 544,848 – –

during the year was as follows: as was year during the The remuneration of directors and other members of key management Compensation of key management personnel Long–term benefits Redundancy benefits Post–employment benefits Salaries and short–term benefits executives chief subsidiary and team management senior officer, executive Chief Directors’ Fees during the year the during 334,897 334,897 334,897 334,897 344,016 344,016 344,016 344,016 Number of options of Number Granted Granted – – – –

during the year the during (439,565) (223,623) (223,623) (439,565) Vested Vested – – – –

Forfeited during during Forfeited (344,908) (344,908) (105,283) (34,440) (34,440) (198,142) (70,051) (70,051) (41,483) (41,483) the year (35,611) (35,611) –

Group 2019 2019 $M 8 – – 7 1 end of the year the of end 1 the at Balance 560,596 334,897 334,897 258,063 258,063 302,533 302,533 266,922 601,819 2018 2018 $M – – – – 8 7 1 1 146 Meridian Annual Report 2019 Notes to the Financials — for the year ended 30 June 2019 Menu or liabilities at 30 June 2019 (30 June 2018: nil). 2018: June 2019 (30 June 30 at or liabilities assets contingent other were no there to above, referred those than Other $4m. and $3m between ranging clarification and depending on the outcome, there is a potential underpayment legal seek to jointly intending are MBIE and of law. Meridian specific point a with issue apotential identified has review The (2003). Act Holidays reviewing Meridian's approach to the application of amounts under the currently is (MBIE) Employment and Innovation of Business, Ministry The F4 Contingent and liabilities assets reporting. supervisor plan, the solvency return of Meridian Energy Captive Insurance Limited and incentive long-term executive of the register, vesting securities of the audit reporting assurance,sustainability review of the interim financial statements, and inventory gas of greenhouse reviews including activities assurance other undertakenOther services by Limited Deloitte during the year included $29,500). 2018: June (30 of $30,500 The audit fee includes of the Office Auditor-General overhead contribution 2016. since company of the auditor been company. has He of the auditor as Limited Trevor of Deloitte appointed Deed has General that there be lead rotation partner after a maximum of five years. The Auditor- Auditor-General of the Office to the recommending and Limited by Deloitte Company's external auditor, including a review of all other performed services of the independence the to maintain apolicy adopted has Board The F3 Auditors remuneration Total auditor remuneration fees assurance Other companies’ financial statements Zealand-based New of review and Audit for: Limited Deloitte to remuneration Auditors Total audit fees audit Total Audit of overseas-based companies’ financial statements Group 2019 2019 0.2 0.2 0.8 0.8 0.9 0.9 0.6 0.1 0.1 $M 2018 2018 0.8 0.8 0.5 0.5 0.2 0.2 0.7 0.7 0.1 0.1 $M • • • • will: adoption period, FY20 the in that estimates Group the addition, In • • to: 2019, estimated June is 30 it at held leases on Based statements. financial Group’s the impact will 16 IFRS NZ adopted, When 16. IFRS NZ under unchanged is by lessors Accounting months. 12 than of more aterm with leases for all liabilities and assets material to recognise alessee requires and model accounting lessee asingle introduces 16 IFRS NZ annual reporting periods beginning on or 2019). after 1 January for (effective Leases 16 IFRS NZ adopt to not early chosen has Group The statements. financial the in disclosed or recognised amounts the affect materially would that below) listed than those (other yet not effective but issued aware of any not standards is Meridian year. financial the in matters significant the in out set as statements financial the in disclosed or recognised amounts the on standards. The application of these new and amended standards has impacted In the current year, Meridian has adopted all mandatory new and amended F6 standards in Changes reporting financial details). for further 2019 (refer Dividends to C4 note 23 August There are no subsequent events other than dividends declared on events Subsequent F5 by $1m tax before profit net decrease by $5m expense depreciation increase by $2m costs finance increase decrease operating expenses by $6m by $69m liabilities lease increase by $69m &equipment plant property, increase

147 Meridian Annual Report 2019 Independent auditor’s report Menu the year then ended in accordance and its consolidated flows cash for consolidated financial performance its 2019 and June 30 at as Group the consolidated financial position of the respects, material all in financial statements present fairly, In our opinion, the consolidated explanatory information. other and policies accounting of significant asummary including consolidated financial statements to the notes the and date that on ended year for the flows of cash in and equity consolidated statement consolidated statement of changes comprehensive income statement, income statement, consolidated 2019, June consolidated 30 the at the consolidated balance sheet as on pages to 105 that 146, comprise Group of the statements financial We have audited the consolidated Opinion financial statements on his behalf. consolidated the of audit the out to carry Limited, Deloitte of resources and staff the using Trevor Deed, Auditor-General has appointed me, (the The Group). subsidiaries its and Limited Energy Meridian of The Auditor-General is the auditor for the 2019 year June 30 ended To the shareholders of Energy Meridian Limited Independent auditor’s report

our opinion. appropriate to provide a for basis and sufficient is we have obtained We believe that the audit evidence accordance with these requirements. our other ethical responsibilities in Standards Board, and we have fulfilled New Zealand Auditing and Assurance Assurance Practitioners for Ethics of Code 1(Revised) Standard incorporate Professional and Ethical General’s Auditing Standards, which in accordance with the Auditor- We are independent of the Group statements audit of the consolidated financial the standards are described further in Our responsibilities under those and Assurance Standards Board. Auditing Zealand New by the on Auditing (New Zealand) issued and the International Standards the Professional and Ethical Standards Auditing Standards, which incorporate accordance with the Auditor-General’s in audit our We conducted opinion our for Basis Financial Reporting Standards. Standards and International International Financial Reporting with New Zealand equivalents to Auditor’s responsibilities forAuditor’s responsibilities the section of our report. report. of our section issued by the by the issued

it probable that the economic that in our judgement would make Group of the statements financial misstatement in the consolidated of magnitude of the terms in We consider materiality primarily Audit materiality the Group. no relationship with, or interests in, of the Auditor-General, we have as auditorcapacity acting on behalf length transactions, and in our these engagements and arm’s than Other Group. of the auditor not impaired our independence as have services These Group. of the ordinary course of trading activities on arm’s length terms within the Group the with deal firm of our In addition, principals and employees independence requirements. which are compatible with those Limited reporting, and supervisor Meridian Energy Captive Insurance of return solvency the plan, incentive long-term executive of the vesting registers, securities of the audit the interim financial statements, of review assurance, reporting gas inventory and sustainability of greenhouse areas the in Group the out other assurance for assignments Other than the audit, our firm carries separate opinion on these matters. a provide not we do and thereon, a whole, and in forming our opinion consolidated financial statements as of the audit of our context the in These matters were addressed statements of the current period. audit of the consolidated financial our in significance were of most that, in our professional judgement, Key audit matters are those matters Key audit matters $18 million. to be awhole as statements the Group consolidated financial We determined materiality for work. of our results the evaluating in and work audit of our scope the We use materiality both in planning person (the ‘qualitative’ materiality). a of such decisions the influence or audit would in our judgement change the during attention to our come that matters other whether assess we also ‘quantitative’ materiality). In addition, be changed or influenced (the knowledgeable person would decisions of a reasonably

148 Meridian Annual Report 2019 Independent auditor’s report Menu • • reasons: following the for matter akey audit as derivatives 3electricity level of valuation We include million). $52 (2018: million $58 were liabilities derivative 3electricity level and million) $100 (2018: million $121 totalled assets derivative 3electricity 2019, level June 30 At 2019. June 30 at as value fair their at carried are instruments These exchange and interest rate risks which are managed using derivative financial instruments. foreign price, commodity to it expose activities Group’s the D1, note in explained As Derivatives 3Electricity Level of Valuation rates. discount and flows cash forecast the and multiple, earnings and earnings maintainable future forecasted the of determination the Specifically, value. fair the determining with associated complexity judgemental and technical inherent the of because matter akey audit as plant and structures generation of valuation We include valuer. the by made be to estimates and judgement significant require and data market observable use fully not do inputs These (‘EBITDAF’). earnings accounted equity venture joint and assets of sale on losses or gains impairments, instruments, financial of value fair in changes amortisation, depreciation, tax, interest, before earnings maintainable future forecasted and historical Group’s the as well as multiples capitalisation to reference by range value enterprise an determines methodology valuation The 2018. June 30 ended year the during recorded was revaluation No statement. income the in impairment million $5 and reserve revaluation the in million $1,139 of increase an as recognised is revaluation the of impact The million. $1,134 by value in increased have and 2019 June 30 at as year this revalued been have plant and structures generation valuation, independent this of aresult As date. balance at value fair the from significantly differ not does value carrying the that ensure to year every valuation independent an obtains Group The million (2018: $7,776 million). $8,654 is B1 note in reflected as plant and structures generation of value book net The losses at balance sheet date. impairment and depreciation accumulated subsequent any less value fair at carried are plant and structures generation statements, financial Group the in B1 note in explained As Plant and Structures Generation of Valuation Key audit matters factor used to determine the fair value of electricity options and swaps. swaps. and options electricity of value fair the determine to used factor discount and volumes call expected long-term the evaluating in involved judgement The complexity and judgement involved in the valuation techniques and the and factors; market relevant other and supply, new of cost significant and judgement regarding estimates discount demand, expected factors, involves which price, electricity wholesale forward long-term the of estimate best Group’s the on based is hedges electricity of valuation the in used price The • • • included: procedures Our • • • on: focused procedures audit Our • • • • • included: procedures Our • • • on: focused procedures audit Our How our audit addressed the key audit matters audit key the addressed audit our How price and volumes. volumes. price and term, contract the specifically terms, contract to data underlying Agreeing and discount rates; and wholesale electricity price, long-term expected call volumes, day one adjustments Challenging the key assumptions applied, including the long-term forward appropriate; where year prior with the and swaps and ensuring that the methodology has been consistently applied methodology applied in the valuation models for these electricity hedges, options the of appropriateness the evaluating experts, internal our with conjunction In valuation models. The reasonableness of the underlying assumptions and inputs in the The reasonableness of the wholesale electricity price path; and techniques; valuation the of appropriateness The determined by the independent valuer. the valuation methodology and the reasonableness of the valuation range of appropriateness the assess to specialist valuation in-house our Utilising and challenge the critical judgement areas in the valuation; and identify to adopted process valuation the understand to valuer the with Meeting work; their of obtained representation from them regarding their independence and the scope We also experience. and qualifications professional their We assessed valuer. theAssessing competence, objectivity and integrity of the independent registered underlying assumptions; Reviewing the valuation methodology and the reasonableness of the significant andstructures plant; generation the of valuation independent the for processes Group’s the Evaluating units/assets. The reasonableness of the allocations of the enterprise value to business The reasonableness of the forecasted future maintainable earnings; and non observable information considered relevant; The reasonableness of the earnings multiple used and the adjustments for 149 Meridian Annual Report 2019 Independent auditor’s report Menu in this regard. report to We have nothing fact. that to report we required are information, a material misstatement of this other weperformed, conclude that there is we have work the on If, based appears to be materially misstated. obtained in the audit, or otherwise statements or our knowledge with the consolidated financial information is materially inconsistent we consider whether the other so, doing in and information other the to read is responsibility our consolidated financial statements, of the audit our with connection In or assurance conclusion thereon. not express any form of audit opinion we do and information other the cover not does statements financial Our opinion on the consolidated and our auditor’s thereon. report consolidated financial statements, the include to not 157, does 153 but and 1to 104, pages on included information comprises the information other The information. other for the The Board of Directors is responsible information Other

Conduct Act 2013. Conduct Act Markets Financial the from arise responsibilities Directors’ The so. to do but alternative realistic or to cease operations, or have no Group the to liquidate intend either Directors the unless of accounting basis concern going the using and concern to going related matters concern, disclosing, as applicable, agoing as to continue ability Group’s the assessing for Group are responsible on behalf of the financial statements, the Directors In preparing the consolidated to fraud or error. misstatement, whether due material from free that are consolidated financial statements to enable the preparation of necessary is determine the Directors as control internal for such and Financial Reporting Standards Standards and International International Financial Reporting New Zealand Equivalents to statements in accordance with financial consolidated of the preparation and fair presentation for the Group of the behalf on The Directors are responsible statements financial consolidated the for responsibilities Directors’

statements. financial consolidated of these of shareholders taken on the basis to influence the economic decisions they could reasonably be expected aggregate, the in or if, individually or error and are considered material canMisstatements arise from fraud material misstatement when it exists. a detect always will Standards with the Auditor-General’s Auditing that an audit carried out in accordance aguarantee not is but of assurance, Reasonable assurance is a high level that includesreport our opinion. auditor’s an error,or and to issue to fraud whether due misstatement, from material free are awhole, as the consolidated financial statements, reasonable assurance about whether to are obtain objectives Our statements financial consolidated the of audit the forAuditor’s responsibilities 150 Meridian Annual Report 2019 Independent auditor’s report Menu • • We also: audit. the throughout scepticism judgement and maintain professional professional we exercise Standards, with the Auditor-General’s Auditing accordance in audit of an part As internal control. effectiveness of the Group’s of the effectiveness expressing an opinion on the of purpose for the not but appropriate in the circumstances, to design audit procedures that are control relevant to the audit in order Obtain an understanding of internal override of internal control. misrepresentations,omissions, or the involve collusion, forgery, intentional may error, from fraud as resulting from fraud is higher than for one a material misstatement resulting detecting of not risk The opinion. our appropriate to provide a for basis audit evidence that is sufficient and responsive to those risks, and obtain and perform audit procedures whether due to fraud or error, design statements, financial consolidated of the misstatement material of risks the assess and Identify

• • • including the disclosures, and consolidated financial statements, structure and content of the Evaluate the overall presentation, concern. as a going continue to to cease Group the cause future events or conditions may However, report. auditor’s of our date to up the obtained evidence conclusions are on based the audit Our opinion. our to modify inadequate, are disclosures or, such if statements financial disclosures in the consolidated related to the report auditor’s our in to attention draw required are we exists, uncertainty material a that we conclude If concern. agoing as to continue ability Group’s the on doubt significant events or conditions that may cast to related exists uncertainty amaterial whether obtained, and, on based the audit evidence directors by the of accounting basis concern going of the use of the Conclude on the appropriateness made by management. estimates and related disclosures reasonableness of accounting the and used policies accounting Evaluate the appropriateness of applicable, related safeguards. on our independence, and where may reasonably be thought to bear relationships and other matters that to communicate with them all regarding independence, and with relevant ethical requirements a statement that we have complied with Directors the provide We also audit. our during we identify that control internal in deficiencies includingfindings, any significant the audit and significant audit of timing and scope planned the regarding, among other matters, Directors the with We communicate • responsible for our audit opinion. solely We remain audit. group the and performancesupervision of We are responsible for the direction, consolidated financial statements. the on opinion an to express Group or within activities business the entities of the information financial audit evidence regarding the Obtain sufficient appropriate that achieves fair presentation. transactions and events in a manner statements represent the underlying whether the consolidated financial

23 August 2019 August 23 Wellington, New Zealand On behalf of the Auditor-General for Limited Deloitte Partner Trevor Deed, Public Audit Act 2001. Our responsibilities arise from the communication. of such benefits interest public the reasonably be expected to outweigh consequences of doing so would adverse the because report our in communicated be not should matter a that we determine circumstances, rare extremely in when, or the matter precludes public disclosure about unlessreport law or regulation auditor’s our in matters these the key audit We matters. describe the current period and are therefore consolidated financial statements of of the audit the in significance were of most that matters those we determine Directors, the with From the matters communicated

151 Meridian Annual Report 2019 Independent accountant’s assurance report Menu or online supplements. cover forward looking statements not does but Report Integrated the of to 157 4to 74, 153 and 101 pages on included and Index GRI the in disclosures and indicators listed of the consists which content’ engagement is the ‘sustainability assurance limited of our subject The to 156. 153 pages on Index’) ‘GRI InitiativeReporting Index (the Global the in out set are against reported Standards GRI specific The (the Standards’): Core ‘GRI option. Standards Reporting Sustainability the Initiative Reporting Global prepared in accordance with is that information includes informationsustainability which ‘Integrated contains Report’) ended June 30 2019 (the year the for Report Integrated Energy Limited’sMeridian Integrated Report 2019 the within content sustainability on Report To the directors of Meridian Energy Limited Independent accountant’s assurance report

to provide a basis for our conclusion. for our abasis to provide appropriate and sufficient is obtained we have evidence the that We believe Assurance Standards Board. and Auditing Zealand New by the issued (Revised)’) 3000 (NZ) (‘ISAE Historical Financial Information of Reviews or Audits than Other Assurance Engagements (Revised): Engagements (New Zealand) 3000 International Standard on Assurance conducted in accordance with Our engagement has been Conclusion for Basis 2019. June 30 ended Standards: Core option for the year GRI the with accordance in respects, has not been prepared, in all material believe that the content sustainability to us causes that attention to our nothingperformed, has come we have procedures the from obtained evidence the on Based assurance report. elsewhere in this independent the inherent outlined limitations to, subject of, is and basis the on This conclusion has been formed Conclusion

professional behaviour. due care, confidentiality and and competence professional principles of integrity, objectivity, which is founded on fundamental and Assurance Standards Board, byissued the New Zealand Auditing of Ethics for Assurance Practitioners Code 1(Revised): Standard Ethical and of Professional requirements independence and other ethical the with We have complied Control and Quality Our Independence • • • • responsible for: is of Directors Board The Board of Responsibility Directors’ selected sustainability information. sustainability selected systems in order to derive the management and internal control appropriate performance andestablishing maintaining Index; GRI the in out set and specifically those GRI Standards with the GRI Standards: Core option content is prepared in accordance ensuring that the sustainability theselecting material topics; reporting; sustainability of respect in objectives Limited’s determining Meridian Energy

and Reviews of Financial Statements, Audits Perform that Firms for Control Ethical Standard 3 (Amended): Quality and Professional applies firm The Group. Energy Meridian the no relationship with, or interests in, length we transactions, have than these engagements and arm’s Other engagement. of this purposes impaired our independence for the have not services These Group. Energy Meridian of the activities of trading course ordinary the within terms arm’s length on Group Energy Meridian the with deal firm of our In addition, principals and employees independence requirements. which are compatible with those reporting, Limited and supervisory return of Meridian Captive Insurance long-term incentive plan, the solvency executive of the vesting registers, securities of the audit statements, financial interim of the review greenhouse gas inventory assurance, of areas the in Group Energy other for assignments the Meridian Auditor-General, our firm carries out of the behalf on statements financial statutory of the auditor as role our Other than this engagement and

152 Meridian Annual Report 2019 Independent accountant’s assurance report Menu and walk-throughs, and evaluates the the evaluates and walk-throughs, and entity, as appropriate, and observation management and others within the of enquiries and of discussion procedures, primarily consisting the assurance practitioner performs In a limited assurance engagement, Report. Integrated of the publication and controls over the electronic security the We evaluate not did Core option. accordance with the GRI Standards: in respects, material all in prepared, contentsustainability has not been the that to believe us causes that attention to our come has anything performed, procedures the on based order to express an opinion whether, limited assurance engagement in a to conduct is responsibility Our Responsibility Independent Accountant’s legal and regulatory requirements. professional standards and applicable compliance with ethical requirements, regarding procedures and policies control including documented comprehensive system of quality a maintains accordingly and and Assurance Standards Board Auditing Zealand New by the issued and Other Assurance Engagements ,

Consequently, the level of assurance of assurance level the Consequently, reasonable assurance engagement. for, than a extent in less are and from, timing and nature in vary limited assurance engagement a in performed procedures The • • • • • Our procedures included: to arise. likely is Standards GRI the risk of material non-compliance with including areas identifying where the dependselected on our judgement, procedures The obtained. evidence at Meridian Energy Limited. of reporting processes sustainability overall knowledge and experience presented is consistent with our information the whether Evaluating Core option; accordance with the GRI Standards: indicators have been reported in Checking whether the appropriate presented; information of the checks test other and review Analytical Integrated Report; the in for inclusion chosen topics material the to determine followed process materiality of the A review reporting process; systems relevant to the sustainability processassessment and information internal control environment, risk Obtaining an understanding of the Standards will continue in the future. future. the in continue will Standards GRI the with compliance whether on assurance provide not does A limited assurance engagement basis. above the on formed been has report this in expressed conclusion The procedures. and otheranalytical review responsible party, and applying making enquiries, primarily of the Core option as it generally comprises compliance with the GRI Standards: of non- instances all to detect engagement is not designed assurance A limited detected. be not and occur may non-compliance it that is possible fraud, error or of any limited assurance engagement, limitations inherent of the Because Inherent Limitations GRI Standards: Core option. the with accordance in respects, has been prepared, in all material Energy Limited’s Integrated Report opinion about whether Meridian express a reasonable assurance Accordingly, not we do performed. assurance engagement been been obtained had a reasonable have would that assurance the than engagement is substantially lower assurance alimited in obtained

Auckland, New Zealand 2019 August 23 Accountants Chartered conclusions we have reached. for the or report, assurance this for work, for our Limited Energy of Meridian directors the than other or responsibility to assume anyone by law, accept not we do permitted extent To fullest the purpose. other for no and report assurance this in to state engaged have been who matters those directors to the state we might that so undertaken been has work Our engagement. of our terms the with accordance in Limited Energy of Meridian directors to the solely made is report assurance Our Report of Use 153 Meridian Annual Report 2019 GRI Standards Content Index Menu 102-14 Strategy EU5 EU4 EU3 EU2 102-10 102-9 102-8 102-7 102-6 102-5 102-4 102-3 102-2 102-1 Organisational profile 2016 Disclosures General 102: GRI General disclosures 2016 Foundation 101: GRI below. italics in are against reported Standards GRI specific The Core option. This has report been prepared in accordance with the GRI Standards: Standards ContentGRI Index 102-11 102-12 EU1 102-13 65 Statement from senior decision-maker allowances emissions CO2e of Allocation Transmission and distribution lines accounts customer of Number Net energy output Installed capacity Significant changes Supply chain Information on employees and other workers Scale of the organisation Markets served Ownership and legal form Location of operations Location of headquarters Activities, brands, products, and services Name of organisation Precautionary principle or approach External initiatives Memberships of associations 21–33 n/a n/a 36 59 59 9, 10 9, 9, 101 10, 59 36, 13, 4–6, 5 13 4-6 157 4-11 cover Front # Pg 101 allowances received allowances emissions No Length insignificant Comment No significant changes principle-based approach takes a precautionary- Relevant legislation Climate Leaders Coalition. pledge. Harm Zero

102-47 102-46 102-45 Reporting practice 102-44 102-43 102-42 102-41 102-40 Stakeholder Engagements 102-18 Governance 102-16 Ethics and integrity General disclosures 102-48 102-49 102-56 102-55 102-54 102-53 102-52 102-51 102-50 List of material topics material of List Defining report content and topic Boundaries financial statements Entities included in the consolidated raised concerns and Key topics Approach to stakeholder engagement Identifying and selecting stakeholders Collective bargaining agreements groups stakeholder of List Governance structure and norms of behaviour Values, principles, standards, Restatements of information of Restatements Changes in reporting External assurance policy GRI content index with the GRI Standards accordance in reporting of Claims report the regarding questions for point Contact Reporting cycle report recent most of Date Reporting period Pg # Pg 15 142 69 68, 51, 47, 26, 48, 13, 69 68, 51, 47, 26, 48, 13, 15 101 8–11 16–18 24 18, 14 153 153 20 14 14 14 Comment Content Index GRI this to Refer report where relevant where report the throughout Discussed Annual 2018 August 21 None

154 Meridian Annual Report 2019 GRI Standards Content Index Menu 67 Financial impacts of hydrology Non-GRI Non-GRI Non-GRI GRI 103: Management Approach 2016 Action on climate change Environmental EU10 GRI 103: Management Approach 2016 Pipeline of generation options 201-2 2016 Performance Economic 201: GRI GRI 103: Management Approach 2016 Financial impacts of climate change Non-GRI GRI 103: Management Approach 2016 GRI 103: Management Approach 2016 Financial performance Economic Material topics and associated disclosures Non-GRI

Non-GRI – some material topics and disclosures listed above are additional or alternatives to those those to alternatives or covered in the GRI additional Standards. are above listed disclosures and topics material –some Non-GRI 67 Various financial measures in Australia projects energy community for raised Funds mitigation actions change climate customers’ for Support resources renewable from generation Group Meridian of Proportion Planned capacity against demand dueopportunities to climate change Financial implications and other risks and hydrology in Financial implications of variability 67 67 67 67 68 31–32 55 53–56 29 29 73 73 8 8 59–63 59–63 # Pg 27–32 Comment TCFD-Report-FY19.pdf Climate-Disclosures- e93f942ead/Meridian- Sustainability/ co.nz/assets/ www.meridianenergy. at Report (TCFD) Financial Disclosures Climate-related for Taskforce our to refer Also report. the Throughout 68 307-1 G GRI 103: Management Approach 2016 Environmental compliance 304-2 2016 Biodiversity 304: GRI GRI 103: Management Approach 2016 Impact on biodiversity 303-5 303-4 303-3 303-2 303-1 2018 Effluents and Water 303: GRI GRI 103: Management Approach 2016 water on Impact 305-3 305-2 305-1 2016 Emissions 305: GRI GRI 103: Management Approach 2016 Operational carbon emissions Material topics and associated disclosures RI 307: Environmental Compliance 2016 in accordance with GRI 103: Management Approach 2016. “103-2 The management approach and its components”, Evaluation and “103-3 of the management approach”, Each Disclosure of Management Approach includes “103-1 Explanation of the material topic and its boundaries”, laws and regulations Non-compliance with environmental biodiversity on services and products, Significant impacts of activities, Water consumption Water discharge Water withdrawal discharge-related impacts Management of water resource ashared as water with Interactions emissions GHG 3) (Scope indirect Other emissions 2) GHG (Scope indirect Energy emissions GHG 1) (Scope Direct 68 68 66–68 66–68 66 66 66 66–68 66–68 66–68 28 28 28 28 # Pg Comment emissions-reports green-house-gas- about-us/sustainability/ meridianenergy.co.nz/ website: our on FY18 Report Inventory Gas Greenhouse Group Meridian our see Also 155 Meridian Annual Report 2019 GRI Standards Content Index Menu 67 405-2 405-1 2016 Opportunity Equal and Diversity 405: GRI GRI 103: Management Approach 2016 Diversity and equal opportunity Non-GRI 403-9 403-8 403-7 403-6 403-5 403-4 403-3 403-2 403-1 2018 Safety and Health Occupational 403: GRI GRI 103: Management Approach 2016 Occupational health and safety Non-GRI GRI 103: Management Approach 2016 Employee engagement Labour Practices Material topics and associated disclosures

Non-GRI – some material topics and disclosures listed above are additional or alternatives to those those to alternatives or covered in the GRI additional Standards. are above listed disclosures and topics material –some Non-GRI remuneration of women to men to women of remuneration and salary basic of Ratio and employees Diversity of governance bodies (TRIFR) rate frequency injury recordable Total Work-related injuries health and safety management system Workers covered by an occupational by business relationships linked directly impacts safety and health Prevention and mitigation of occupational Promotion of worker health health and safety Worker training on occupational health and safety and communication on occupational Worker participation, consultation, Occupational health services and incident investigation Hazard identification, risk assessment, management system Occupational health and safety Employee engagement surveys 67 45 45, 46 44–47 70 70 70–71 70–71 70–71 70–71 70–71 70–71 70–71 70–71 70–71 26, 26 26 # Pg Comment Retaining expertise Non-GRI Material topics and associated disclosures Access to water to Access Society EU15 GRI 103: Management Approach 2016 413-1 2016 Communities Local 413: GRI GRI 103: Management Approach 2016 Contribution to local communities Non-GRI GRI 103: Management Approach 2016 Non-GRI 415-1 2016 Policy Public 415: GRI GRI 103: Management Approach 2016 Contribution to public policy Non-GRI Non-GRI and senior specialist positions Women in people leadership Tenure by age by Tenure and development programs development and engagement, impact assessments, Operations with local community stakeholders interested in water Strength of relationships with such as trade associations trade as such Expenditure on “lobbying” organisations Political contributions in New Zealand grants fund community of Number in New Zealand Contribution to local communities 67 67 46 # Pg 71 71 69 68–69 68–69 101 91 51–52 32, 69 69 Comment of Conduct) Code our in specified (as parties political any to donate not does Meridian MW capacity of –95% don't) stations power hydro Australian our and Millar (Mt programmes community engagement local have stations power 17 our of out 13 156 Meridian Annual Report 2019 GRI Standards Content Index Menu 67 Non-GRI GRI 103: Management Approach 2016 safety Process EU30 GRI 103: Management Approach 2016 EU27 GRI 103: Management Approach 2016 Support for vulnerable customers Non-GRI GRI 103: Management Approach 2016 Electricity pricing Non-GRI Non-GRI GRI 103: Management Approach 2016 Customer satisfaction Product Responsibility Non-GRI Material topics and associated disclosures Plant performance Plant

Non-GRI – some material topics and disclosures listed above are additional or alternatives to those those to alternatives or covered in the GRI additional Standards. are above listed disclosures and topics material –some Non-GRI Actions to improve process safety process improve to Actions Plant availability factor Disconnections countries OECD other to compared NZ AU and in electricity of Price Customer retention rates satisfaction customer of Level issues Key regulatory 67 67 67 67 67 64 64 65 65 40–41 37 27, 37–40 39 48 25, 48 25, 51–52 32, # Pg 41 Comment 157 Meridian Annual Report 2019 Directory Menu +64 3 435 9393 9393 3435 T +64 Zealand New Twizel 7944 950 Bag Private Zealand New Twizel 7901 and Mackenzie Drive Place Market of Corner 9700 3357 T +64 Zealand New 8140 Christchurch 2146 Box PO Zealand New 8013 Christchurch Christchurch Central North Street Durham 287-293 7800 9477 T +64 Zealand New Auckland 2150 Auckland Airport 107174 Box PO Zealand New Auckland 2022 Auckland Airport Drive Isitt 6 Leonard 7, 2 Level Quad Offices 1201 4381 F +64 1200 4381 T +64 Zealand New 6143 Wellington Terrace The 10840 Box PO Zealand New 6011 Wellington Central Wellington Lane Elizabeth Lady 55 Limited Energy Meridian Registered office Directory

+64 0800 1000 60 1000 0800 T +64 Zealand New 6242 Wellington Newtown 7651 Box PO New Zealand 6011 Wellington Street Tory 147 3 Level Powershop United Kingdom B1Birmingham 2HF Street Broad 252-260 Tower Quayside Floor, 9th 0859 4389 T +64 New Zealand 6011 Wellington Central Wellington Quay Customhouse 86 offices Federation Flux 5235 F +61 39620 2100 T +61 38370 Australia 3000 VIC Melbourne Street Collins 357 15 Level Limited Pty Australia Energy Meridian Australian registered office

Zealand Zealand New 6140 Wellington 1990 Box PO Limited Deloitte GRI standards assurance Jason Stachurski Partner ofthe the Office Auditor-General of behalf on audit Financial Partner Trevor Deed, Auditor [email protected] F +61 39473 2500 Australia) (outside T +61 4083 39415 Australia) (within 366 501 T 1800 Australia 3001 VIC Melbourne 3329 Box GPO Australia 3037 VIC Abbotsford Street Johnston 452 Yarra Falls Limited Pty Services Investor Computershare Share Registrar Australia investorcentre.com/nz [email protected] 8787 9488 F +64 8777 9488 T +64 Zealand New Auckland 1142 West Street Victoria 92119 Bag Private Zealand New Auckland 0622 Takapuna Road Hurstmere 159 2 Level Limited Services Investor Computershare New Zealand Registrar Share

Mark Cairns Mark Chair Deputy Wilson, Peter Chris Moller, Chair Directors New Zealand Wellington Westpac Banker [email protected] [email protected] or or comments, please email questions any have you If Guy Waipara Jason Stein Smith Julian Roan Mike Tania Palmer Ed McManus Kennedy Nic Executive Chief Barclay, Neal Team Executive Mark Verbiest Anake Goodall DevineMary Jan Dawson

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Integrated Report for the year ended 30 June 2019.