Infratil Limited

Non-executive directors’ fees benchmarking

Summary

25 July 2019

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Reward Service provider - independence declaration

PwC’s Reward Services team has been engaged by the Board of Directors (Board) of Infratil Limited (Infratil) to provide independent remuneration benchmarking services in relation to Non-Executive Directors’ fees at Infratil (the Services).

As lead engagement Partner for the provision of the Services to the Board, I declare that no influence has been brought to bear upon me or, to the best of my knowledge and belief, any member of the PwC Reward Services team, by any Board member, employee or executive of Infratil or any other party regarding the services or outcomes of the Services.

In my professional opinion all members of the PwC engagement team are therefore independent for the purposes of the Services as outlined in the commentary to Recommendation 5.2 of the NZX Corporate Governance Code 2017.

Dated: 25 July 2019

Chris Place Partner PricewaterhouseCoopers

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Summary – Infratil directors’ fees market analysis

Non executive Directors’ (NEDs’) fee market data has been provided by PwC for Infratil from two comparator groups of NZX-listed companies. Details of the peer groups are provided in Appendix 1. These two New Zealand comparator groups were agreed with the Infratil Board, so as to provide two separate New Zealand data points for comparative purposes:

 Comparator Group 1, underpinned by comparable market capitalisation, is comprised of 14 NZX- listed companies, seven smaller and seven larger than Infratil by relative market capitalisation. The basis for the development of this comparator group was companies in a circa 50% - 200% range of Infratil’s current market capitalisation of $2.9 billion.

 Comparator Group 2, underpinned by comparable total asset value (assuming completion of the Vodafone transaction). This group (which has some crossover with Comparator Group 1) is comprised of 10 NZX-listed companies, in a circa 50% - 200% range of Infratil’s assumed total asset value of $7.6 billion following completion of the Vodafone acquisition (as instructed by Infratil management). This is comprised of six smaller and four larger companies by comparable total asset value.

As a third reference point, directors’ fees data for two ASX-listed companies (NEXTDC Ltd and Spark Infrastructure Group) has also been itemised separately (the ASX Comparators) due to the Board’s view of these companies’ direct comparability to Infratil. The data for these two companies has not been aggregated.

The tables in this summary report summarise the Directors’ fees for the two New Zealand comparator groups, and compare Infratil fees to the median and the 75th percentile of each. Where the Board chooses to position its fees against this market data will however depend on the Board’s view of the overall relevance of the comparator groups, and specifically Infratil’s perceived relative complexity of operations, relative scale, ranking (by scale) and risk profile as compared with those of the comparator companies.

Infratil relativity to Comparator Group 1 Comparator Comparative Comparator Comparative Infratil Group 1 ratio to the Role/Observation Group 1 ratio to the current 75th 75th median median percentile percentile Base fees Chairman 210,000 220,300 95% 273,800 77% Non-Executive Directors 102,500 104,300 98% 124,900 82% Committee fees Audit & Risk Comm. 20,000 21,300 94% 35,500 56% Chair Audit & Risk Comm. 10,000 15,000 67% 18,300 55% Member Nom. & Rem. Comm. Nil 20,000 24,500 Chair Nom. & Rem. Comm. Nil 10,900 13,700 Member NED fee pool 819,9691 1,100,000 74% 1,260,000 65%

1 The directors’ fee pool approved at the 2018 Infratil AGM was $999,969. Of this, $819,969 was allocated to the Infratil Board for a Board of six directors, and $180,000 was allocated to subsidiary director fees. On the appointment of an additional director in March 2019 and assuming seven directors, the approved pool is, we understand, effectively increased to $1,034,573 under NZX Listing Rule 2.11.3.

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Infratil relativity to Comparator Group 2 Comparator Comparative Comparator Comparative Infratil Group 2 ratio to the Role/Observation Group 2 ratio to the current 75th 75th median median percentile percentile Base fees Chairman 210,000 239,800 88% 273,800 77% Non-Executive 102,500 112,000 92% 131,500 78% Directors Committee fees Audit & Risk Comm. 20,000 37,000 54% 40,000 50% Chair Audit & Risk Comm. 10,000 18,800 53% 20,600 49% Member Nom. & Rem. Comm. Nil 24,000 27,400 Chair Nom. & Rem. Comm. Nil 12,300 13,700 Member NED fee pool 819,9692 1,149,500 71% 1,566,700 52%

ASX Comparators Data (in AUD) from the two ASX comparators is summarised below as a third reference point.

Company NEXTDC Ltd Spark Infrastructure Group Total assets ($m) $1,236 $3,212 Market capitalisation ($b) $2.24 $4.11 Board Chair $275,000 $303,000 NED $135,000 $130,000 Audit & Risk Committee Chair $30,000 $39,800 Audit & Risk Comm. Member $13,000 $19,900 Rem. & Nom. Committee Chair $25,000 $34,200 Rem. & Nom. Comm. Member $13,000 $17,100 Total fee pool $1,250,000 $2,000,000 Market capitalisation data sourced from ASX, and other information from published annual reports.

2 See footnote 1.

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Appendix 1 – Comparator Group Composition

Comparator Group 1 – underpinned by market capitalisation

Market Company total Company total Capitalisation as Organisation name revenue gross assets at 18 June ($ millions) ($ millions) ($ millions)

Ryman Healthcare Limited (NZSE:RYM) 5775 382 6651

Contact Energy Limited (NZSE:CEN) 5383 2283 5311

Fletcher Building Limited (NZSE:FBU) 4574 9471 8532

Mainfreight Limited (NZSE:MFT) 3988 2824 1376

EBOS Group Limited (NZSE:EBO) 3800 7506 3263

Vector Limited (NZSE:VCT) 3710 1341 5808

Air New Zealand Limited (NZSE:AIR) 2987 5680 7846

SKYCITY Entertainment Group Limited (NZSE:SKC) 2548 997 2545

Chorus Limited (NZSE:CNU) 2537 980 4926

Goodman Property Trust (NZSE:GMT) 2436 127 2721

Z Energy Limited (NZSE:ZEL) 2432 5450 2847

Kiwi Property Group Limited (NZSE:KPG) 2250 245 3086

Precinct Properties New Zealand Limited (NZSE:PCT) 2213 130 2562

Trustpower Limited (NZSE:TPW) 2197 861 2214

Infratil Limited (NZSE:IFT) 2941 1787 7621

Note: Infratil’s asset value includes an assumed additional $1b of assets reflecting the balance sheet impact of completion of the Vodafone transaction as advised by Infratil management. Market capitalisation information sourced from NZX and other metrics from latest published annual reports.

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Appendix 1 – Comparator Group Composition (cont)

Comparator Group 2 – underpinned by total assets

Market Company total Company total Capitalisation as Organisation name revenue gross assets at 18 June ($ millions) ($ millions) ($ millions)

Meridian Energy Limited (NZSE:MEL) 12071 2762 8632

Fletcher Building Limited (NZSE:FBU) 4574 9471 8532

Auckland International Airport Limited (NZSE:AIA) 11120 684 8197

Air New Zealand Limited (NZSE:AIR) 3015 5485 7846

Ryman Healthcare Limited (NZSE:RYM) 5775 382 6651

Mercury NZ Limited (NZSE:MCY) 5654 1803 6091

Vector Limited (NZSE:VCT) 3730 1328 5808

Contact Energy Limited (NZSE:CEN) 5383 2283 5311

Chorus Limited (NZSE:CNU) 2576 990 4926

Spark New Zealand Limited (NZSE:SPK) 7244 3649 3419

Infratil Limited (NZSE:IFT) 2941 1787 7621

Note: Infratil’s asset value includes an assumed additional $1b of assets reflecting the balance sheet impact of completion of the Vodafone transaction as advised by Infratil management. Market capitalisation information sourced from NZX and other metrics from latest published annual reports.

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