1 TVNZ ANNUAL REPORT FY2011 2 TVNZ ANNUAL REPORT FY2011 Cover: Aftermath of the 22 February 2011 Christchurch earthquake Table of Contents

Chairman’s Introduction 4

Chief Executive’s Overview 6

Financial Performance 9

TVNZ in Society 11

General Charter Measures 13

Charter Performance Measurements 15

Financial Statements 34

Corporate Governance 85

Directors’ Profiles 86

Main Locations 87

TVNZ ANNUAL REPORT 3 FY2011 ONE News’ Simon Dallow in Christchurch Chairman’s Introduction

Sir John Anderson

These are exciting times. There are enormous changes going on within the industry and TVNZ is well positioned to respond to the challenges and opportunities they present.

4 TVNZ ANNUAL REPORT FY2011 TVNZ has reported a positive performance Kua puta te whakatau whai hua ā Te Reo Tātaki this year. The Company delivered a net mo tēnei tau. Ko taua hua nō muri mai ō nga profit after tax of $2.1 million and underlying tākē, kā eke ki te $2.1 miriona, e whakāta āna, earnings of $31.8 million, up 164% from the e $31.8 miriona te painga. Kotahi rau ono previous year. tekau ma wha ōrau te painga āke.

The Board is pleased to declare a dividend to the Shareholder E hari ana te rūnanga ki te pānui ki te kāwanatanga ngā hua mo of $13.8 million, an increase on the previous year’s dividend of te tau, kua eke nei ki te $13.8 miriona. He painga i kō noa ātu i $4.9 million. te $4.9 miriona o tē tau kua hori.

Credit for this excellent result must go to TVNZ management Ko ngā whakapainga mo tēnei ahuatanga na ngā kaiwhakahaere and staff. The Board thanks them for their contribution and rātou me te hunga mahi i tāea ai. Na rātou, me tō rātou kaha, commitment to bringing to life the Company’s vision of Inspiring mē te tino ū ki te whakatau, Te Whakaaratanga o Aotearoa ki on Every Screen. ngā Rīangi Whakaata Katoa.

Advertising-reliant media companies in and abroad Na nga tikanga whakatahu o nga Whare Pakihi o Aotearoa, faced a challenging year. TVNZ took effective action to mitigate me rāwahi i uaua ai te ara. Na nga karo a Te Reo Tātaki me nga the impact of the global financial crisis on its business through kaupare atu i nga taumahatanga o nga tikanga ā ao, me te disciplined cost management and an ongoing programme of kukuti anō o nga ahuatanga utu i pai ai. Nā te titiro whānui anō business diversification and transformation. ki ngā huarahi i te wātea mai, i ū ai.

The performance of both TV ONE and TV2 has contributed to a lift Nā ngā taumata whakaritenga a TV ONE raua ko TV2 i eke ai in TVNZ’s advertising revenues and market share. TVNZ nga hua o nga kaupapa whakawai me te wāhanga e tika āna secured 80.6% of all growth in television advertising for the year. mo nga pouaka whakaata, huri noa. E 80.6 ōrau te huanga ō nga tikanga whakawai ō ngā pouaka whakaata mo te tau. The Company continued to expand its digital broadcasting horizons. During the year it completed the implementation of I Ākitia e Te Reo Tātaki ōna pae mamati. I tēnei wā i oti te a multi-million dollar digital infrastructure and facility. whakatū i nga taputapu, e hia miriona nei te utu, e taea ai te This allows the Company to reach more New Zealanders in pānui i aua mea mamati. Ma ēnei āhuatanga ē taea ai e mātou more ways as it expands its television and online services. nga kaupapa whakaata, me ōna hononga ki nga ahuatanga maha ki nga rorohiko. The new digital facility enabled TVNZ to launch two new channels: channel U, a free-to-air youth channel aimed at 15 Na ēnei ahuatanga i māunu ai i Te Reo Tātaki nga whakāturanga to 24-year-olds that uses a groundbreaking live interface with hou, kō U tera, ma te hunga taitamariki, me te hono atu ki era Facebook and; TVNZ Kidzone24, a new pay