#1November 2019 This is how we roll... out fibre to the country. CHORUS Chorus Limited- Debt Investor Presentation DEBT INVESTOR PRESENTATION CHORUS 13#2Disclaimer This presentation: ■ Includes forward-looking statements. These statements are not guarantees or predictions of future performance. They involve known and unknown risks, uncertainties and other factors, many of which are beyond Chorus' control, and which may cause actual results to differ materially from those contained in this presentation. Includes statements relating to past performance which should not be regarded as reliable indicators of future performance. Is current at the date of this presentation, unless otherwise stated. Except as required by law or the NZX and ASX listing rules, Chorus is not under any obligation to update this presentation, whether as a result of new information, future events or otherwise. Should be read in conjunction with Chorus' audited consolidated financial statements for the year to 30 June 2019 and NZX and ASX market releases. Includes non-GAAP financial measures including "EBITDA". These measures do not have a standardised meaning prescribed by GAAP and therefore may not be comparable to similar financial information presented by other entities. They should not be used in substitution for, or isolation of, Chorus' audited consolidated financial statements. Chorus monitors EBITDA as a key performance indicator and believes it assists investors in assessing the performance of the core operations of Chorus' business. Refer to Chorus' FY19 results investor presentation for further detail relating to EBITDA measures. Has been prepared with due care and attention. However, Chorus and its directors and employees accept no liability for any errors or omissions. Contains information from third parties Chorus believes reliable. However, no representations or warranties (express or implied) are made as to the accuracy or completeness of such information. This presentation does not constitute investment advice or a securities recommendation and has not taken into account any particular investor's investment objectives or other circumstances. Investors are encouraged to make an independent assessment of Chorus. Note that references made to $ within this presentation refer to New Zealand dollars (NZD). To the extent permitted by law, the Joint Lead Managers and their respective related bodies corporate, officers, employees, agents, advisers, contractors and members: (a) disclaim any and all liability relating to this information, including, without limitation, any express or implied representation for statements and conclusions contained in and omissions from this presentation; and (b) accept no liability (whether in negligence or otherwise) for any loss, damage, costs or expenses of any nature which may be suffered or incurred by any person relying on any information or statement contained herein or otherwise arising in connection with any such information or statement. The recipient should not rely upon the contents of this presentation but should make its own assessment and evaluation, undertake an investigation and enquire and seek advice to enable it to make any decision concerning its own risks 2 November 2019 DEBT INVESTOR PRESENTATION CHORUS#3Presenters David Collins Chief Financial Officer Andrew Hopkinson Treasurer Brett Jackson IR Manager David joined Chorus in December 2018 after 9 years with Aurizon, Australia's largest rail freight operator David is responsible for ensuring Chorus' strong financial performance, and creating a stable and sustainable business. This includes building relationships with shareholders, debt holders, and the wider investment community Andrew joined Chorus after 17 years with TCNZ where he held a number of roles in finance, before being appointed Treasurer in 2005 Andrew worked on the debt management aspects of the TCNZ / Chorus demerger Prior to joining TCNZ, Andrew worked at the Reserve Bank of New Zealand in the financial markets group Brett has run Chorus' investor relations programme since the demerger from TCNZ in late 2011 Brett joined Chorus when it was first established as an operationally separate business unit within TCNZ in 2008 and was involved in marketing communications, industry consultation and network projects bid 3 November 2019 DEBT INVESTOR PRESENTATION CHORUS#4Table of Contents 1. Introducing Chorus 2. Business Overview 3. Financial Highlights 4. Appendices 4 November 2019 DEBT INVESTOR PRESENTATION CHORUS#5Introducing Chorus New Zealand's largest fixed line communications infrastructure business 5 November 2019 DEBT INVESTOR PRESENTATION CHORUS#6Key Credit Highlights New Zealand's largest fixed line communications infrastructure company Building and operating 75% of NZ's planned fibre to the premises footprint Fibre partnership with NZ Government: pre-committed, low cost, long-term funding Regulated utility framework to underpin financial profile from 2022 Strong demand for fibre broadband, and population/premises growth Strong operating cash flows and financial performance Financial flexibility via $550m bank facility, multi-currency EMTN and NZ dollar retail bond programmes Proven commitment to maintaining a BBB credit rating (S&P or equivalent) 6 November 2019 DEBT INVESTOR PRESENTATION CHORUS#7An Overview Of Chorus New Zealand's largest fixed line communications infrastructure business Established in Dec 2011 following demerger from Telecom NZ ~900 employees, supported by service company contractors and subcontractors Listed on NZX and ASX: CNU ~NZ$2.5 billion market capitalisation (as at 20/11/19) A nationwide copper and growing fibre (FTTH) network Wholesale network operator with ~100 retailer customers ~1.45m connections, including ~1.2m broadband 82% of way through 11-year fibre to premises rollout 55% fibre uptake, well ahead of initial rollout target of 20% by 2020 Streaming video services driving significant data consumption CHORUS 7 Agency S&P Rating BBB Outlook Stable Moody's Baa2 Stable November 2019 MEMBER OF Dow Jones Sustainability Indices In Collaboration with RobecoSAM DEBT INVESTOR PRESENTATION CHORUS#8The Ultra-fast Broadband Initiative Ultra-fast broadband (UFB): a Government objective original objective (UFB1): fibre to premises covering 75% of population by 2020 subsequent agreements (UFB2 and UFB2+) extended coverage goal to 87% of population by the end of 2022 Chorus was awarded ~75% of the fibre rollout requirement that Chorus split from Telecom NZ to participate: demerger in December 2011 government partnerships with four fibre companies: Chorus, Enable, Northpower, Ultrafast Fibre (WEL Networks) 8 QUEENSTOWN AUCKLAND WAIUKU HAMILTON- TOKOROA NEW PLYMOUTH NELSON GREYMOUTH- HAWERA TAUPO WANGANUI LEVIN KAPITI -WHANGAREI WAIHEKE ISLAND PUKEKOHE TAURANGA ROTORUA WHAKATANE GISBORNE NAPIER HASTINGS FEILDING PALMERSTON NORTH MASTERTON WELLINGTON BLENHEIM RANGIORA CHRISTCHURCH ASHBURTON TIMARU OAMARU DUNEDIN INVERCARGILL November 2019 DEBT INVESTOR PRESENTATION NORTHPOWER WEL NETWORKS ENABLE CHORUS CHORUS#9Our Network Infrastructure Copper VDSL to ~80% of lines; Fibre to pass ~1.36m end customers by end 2022 Exchange co-location: wireless co-location and network edge computing 6 Offices: fibre access and 'fibre to the desktop' ~600 exchanges Fibre to smart locations: CCTV, traffic lights Fibre backhaul: to mobile towers, small cells ~52,000km fibre; ~130,000km copper cable November 2019 IOT: pole and cabinet assets provide coverage and power infrastructure School Wi-Fi trials: extend school network to local students via Chorus network FTTP: enabling unlimited data, enhanced Wi-Fi and TV broadcast capability ~12,000 cabinets ~290,000 poles ~37,000km duct network DEBT INVESTOR PRESENTATION SCHOOL CHORUS#10Business Overview Chorus' role within the New Zealand fixed line market 10 November 2019 DEBT INVESTOR PRESENTATION CHORUS#11An Open Access Wholesale Network International media providers: Local Media: (Broadcast) BBC iPlayer Apple TV Google Play Netflix YouTube Hulu Amazon Local Media: (On Demand) Vodafone TV Lightbox Retail Service Providers: Fixed Line Access Networks: TVNZ TV3 Sky TV via satellite and IP set-top boxes OnDemand 3Now Neon Vodafone Spark 2degrees +Skinny Vocus Slingshot, Orcon, Flip Trustpower Others: e.g. Megatel 3 Nova Energy Contact Energy (S MyRepublic Stuff Fibre NOW HFC cable in Wellington + Christchurch (~60k customers) Chorus Nationwide network access wholesaled to -100 retail service providers; Fibre to pass -1.36m homes and businesses Note: Fibre to the premises will cover -87% of NZ population by the end of 2022 11 November 2019 Local Fibre Companies: Enable - Ultrafast Fibre - Northpower Fibre to pass ~450k homes and businesses DEBT INVESTOR PRESENTATION Mobile network Wireless Broadband Power + Broadband CHORUS#12Fibre to reach 87% of NZ population by 2023 Local fibre companies ~450k end users uptake ~255k Planned fibre footprint > Rollout progress > Uptake > Chorus to pass ~1.36m end users rollout 82% complete uptake ~624k = 55% of deployed footprint 12 November 2019 DEBT INVESTOR PRESENTATION Auckland: broadband connections by type (%) 13 15 72 ■ Fibre ■ VDSL ADSL CHORUS#13Premises growth supporting broadband uptake 96,000 dwellings forecast to be consented in Auckland (2019-2024) Auckland Figure 4.1.2 Dwelling units in Auckland, 1994 to 2024 " New peak of ~14k dwelling unit consents in 2019, forecast to keep growing 18,000 number/year 16,000 14,000 12,182 New Zealand 12,000 Average of 37,000 new dwellings forecast per annum for the next six years 10,000 8,000 Multi-unit dwellings expected to grow from 36% to 41% of new residential dwellings by 2024 6,000 4,000 2,000 0 94 96 98 94 00 00 13 November 2019 DEBT INVESTOR PRESENTATION 02 04 06 08 10 12 14 16 12,862 18 20 22 24 Source: BRANZ/Stats NZ CHORUS 14,500 17,100#14Broadband: the 4th utility 14 November 2019 DEBT INVESTOR PRESENTATION CHORUS#150 50 100 Unlimited data and streaming are the norm Monthly average data usage per connection on our network 400 350 300 Data 250 usage 200 (GB) 150 360 279 187 Growing catalogue and quality of streaming content is driving broadband uptake and usage higher 2degrees bundle with Amazon Prime Stuff launched news and content portal: play stuff Sky TV focused on streaming services: Sky Sport Now New standalone Vodafone TV device to enable online content Spark Sport showing English Premier League, Rugby World Cup ➤ Rugby World Cup promoted uptake of smart TV's and introduced traditional TV viewers to streaming ➤Chorus network capacity increased ~50% in FY19 15 November 2019 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Copper Dec-16 Mar-17 Jun-17 Sep-17 Fibre Average Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 Mar-19 Jun-19 Sep-19 STREAM BIG NEW ZEALAND! Sports streaming services. DEBT INVESTOR PRESENTATION What is sports streaming? How can I stream sports? Tips for watching CHORUS#161,000 Gigabytes per month by 2023... Video content and 4K, 8K to drive usage growth Speed requirements in Mbps Chorus Forecast: Average Monthly Broadband Usage 500 2 8 8 GB 1400 16 17 51 Today 1200 HD Camera Today IP Video 1000 100 2 UHD Cameras 800 UHD Streaming VR 600 UHD IP Video 167 8K Wall TV 400 Future HD VR UHD VR 200 Future Source: Cisco VNI, Forecast and Trends, 2017-2022 16 November 2019 •Copper -Fibre 0 JUNE 2019 JUNE 2020 JUNE 2021 JUNE 2022 JUNE 2023 JUNE 2024 DEBT INVESTOR PRESENTATION CHORUS#17Active wholesaler campaigns driving ARPU growth Total mass market fibre uptake by plan type Business/Education plans 100 1Gbps 90 200Mbps 60 80 70 70 % of plans 60 60 50 40 40 30 30 20 20 100Mbps 10 50Mbps 0 Jun-18 Sep-18 Dec-18 Mar-19 Jun-19 17 November 2019 $60 p.m. $55 p.m. $46 p.m. 46,000 mass market fibre connections added in Q1 (vs. 43k in Q4 FY19) 1Gbps connections grew to 69k (Q4 FY19: 58k) and are now ~11% of mass market fibre connections Second tier retailers continue to grow market share with some promoting 1Gbps at ~$85p.m. 100Mbps connections stable at 71% UFB prices capped to 2022 with annual CPI adjustment 10G PON in development, 25G PON on the roadmap New Hyperfibre products, initially as 2 & 4 Gbps services were recently launched Hyperfibre will enable new technologies and experiences, fundamentally changing the possibilities for how we live, work and innovate $42.50 p.m. Sep-19 DEBT INVESTOR PRESENTATION CHORUS#18Streamlining and simplification Accelerating our transformation programme Assure: new channel launched; identifying opportunities to solve faults proactively and remotely Intact connections: make it easier and faster for customers to get service switched on Fibre connect: keep refining our process; emphasis on reducing reschedules and cancellations Property developers: manage growing premises volumes and lift developer experience Complex orders: new channels for non-premises connections CHORUS Low touch channels Seamless flow of information One source of truth e it easy and conven 18 November 2019 DEBT INVESTOR PRESENTATION Customer insight Smart automation Keep me informed อน фан * Skilled technicians SERVICE COMPANIES Meet my expectation Install options L Consistent and fast process опе RETAILERS CHORUS#19Growing our portfolio Moving from innovation to product phase Edge Centre Colocation: 3 sites open for data centre space; ~30% of space filled Smart locations: growing demand for non-building connections (e.g. CCTV) Fibre to desktop: market identified; exploring channels to market Wi-Fi ONT: device being deployed as part of standard installation; considering Wi-Fi service options 19 November 2019 DEBT INVESTOR PRESENTATION CHORUS#2020 20 Regulatory Framework November 2019 DEBT INVESTOR PRESENTATION CHORUS#21Legislation passed in November 2018 87% of population where fibre will be available by end of 2022 Fibre access network Regulated asset base (RAB) with revenue cap to be determined by Commerce Commission Price caps on contracted fibre products with annual inflation adjustment, until 2022. Price caps then only apply to fibre voice service, a fibre broadband service and direct fibre Copper - where fibre is available: Copper network to be deregulated and Telecommunications Service Obligation (TSO) removed Chorus can withdraw copper service subject to minimum consumer protection requirements being developed by the Commission and due by mid-2020 Remaining 13% of population Copper - where fibre is not available: -> Copper remains regulated and TSO applies Copper pricing capped at 2019 levels with CPI adjustments Commission required to review pricing framework no later than 2025 Unbundled fibre (commercial price) to be available in UFB1 areas from 2020 and UFB2 areas from 2026 Three years after new regime commences, the Commission can review the revenue cap model and anchor products, subject to specified conditions and statutory criteria 21 November 2019 DEBT INVESTOR PRESENTATION CHORUS#22Overview of current RAB implementation The Commerce Commission is implementing the new framework On 19 November, the Commerce Commission released its draft Input Methodologies decision, following extensive submissions from Chorus and investors. Key changes from the Commission's 'emerging views' paper published in May were: Higher WACC following an upward revision of: Indicative fibre regulation timeline June 2020 Input methodologies final decision due (the "rule book") ◉ the asset beta from 0.46 to 0.49; and Q4 2020 Draft price-quality path Market Risk Premium from 7% to 7.5% (applicable after 2020) Q2 2021 Tax losses to be carried forward to implementation date Final price-quality path (sets the revenue and RAB) More favourable treatment of Crown financing The Input Methodologies are expected to be finalised by mid 2020, followed by Price-Quality decisions in mid 2021. 22 22 November 2019 DEBT INVESTOR PRESENTATION CHORUS#23Regulated Asset Base implementation Commerce Commission will determine the starting value of the RAB, regulatory WACC, cost allocations, expenditure allowances and maximum allowable revenue Illustrative Only Initial RAB value Capex 23 November 2019 RAB × × Opex ALLOWABLE ANNUAL MAXIMUM Regulatory WACC = Return on capital Depreciation Return of capital Regulatory tax allowance REVENUE Anchor and price capped products: ■ voice ■ 100/20Mbps fibre ■ direct fibre NB. Symmetrical wash- up for under or overs Asset lives Building block cost stack DEBT INVESTOR PRESENTATION CHORUS#24FINANCIAL HIGHLIGHTS Financial overview and capital management 24 November 2019 DEBT INVESTOR PRESENTATION CHORUS#25Financial snapshot Revenue ($m) 1,200 1,040 990 970 1,000 800 600 400 200 FY17 EBITDA ($m) FY18* 680 660 652 653 636 640 620 600 580 560 540 520 500 FY17 FY18* * New accounting standards IFRS 9, 15 and 16 were adopted from FY18 25 November 2019 FY19 FY19 FY20 FY20 guidance 625m-645m ■ Revenue has reduced due to: copper line loss in areas where Chorus is not building the fibre network. fixed wireless competition Revenue loss partially offset by: strong fibre uptake customers moving to higher priced plans (e.g. 1Gbps, enhanced business plans) Expect to return to modest EBITDA growth in FY20 Expect continued broadband and ARPU growth Ongoing programmes to reduce costs DEBT INVESTOR PRESENTATION CHORUS#26We've passed our capex peak UFB rollout schedule (premises) 160,000 140,000 120,000 100,000 80,000 60,000 40,000 20,000 26 26 FY19 Capex $810m $804m $689m* $660 $700m 231 245 183 258 294 308 550-580 95 66 111 125 132 81 57 58 59 FY20 FY21 FY22 FY23 FY17 FY18 FY19 50-70 50-65 FY20 GUIDANCE** UFB2 UFB1 Greenfields ■Common Copper ■Fibre other - Fibre - connect - Fibre communal UFB1 Brownfields November 2019 DEBT INVESTOR PRESENTATION *FY17 capex adjusted for NZ IFRS **FY20 subtotals are not additive CHORUS#27Leverage follows Capex 3.92 4.06 3.43 3.1 2.98 3.1 2.9 2.7 680 593 689 810 804 681 679 597 ■ ■ Capex peaked in FY18 & FY19, leverage to peak in FY20 UFB1 will be completed in December 2019 Leverage will reduce in line with lower capex/growing free cash flow in future. years FY20 gross capex guidance: ■ $660m-$700m FY20 EBITDA guidance: ■ $625-645m FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 ■ Capex Senior ND/EBITDA *4.06x calculated at mid guidance levels Key Financial ratios: Bank covenant- - Net Senior Debt/EBITDA 4.75x Credit rating down driver - Net Senior Debt/EBITDA on a sustained basis > 4.25x (S&P) ◉ > 4.20x (Moody's) 27 November 2019 DEBT INVESTOR PRESENTATION CHORUS#28Capital management Chorus Limited is rated BBB (stable) by Standard & Poor's and Baa2 (stable) by Moody's. The Chorus Board considers that a 'BBB' credit rating or equivalent is appropriate for a company such as Chorus. We maintain capital management and financial policies consistent with these ratings. Chorus maintains ready access to ample liquidity across cash balances and availability under its bank facilities, as well as remaining capacity under the arrangement with Crown Infrastructure Partners (CIP) with respect to UFB fibre rollout capex ■ Chorus can issue debt securities to the Crown up to a total face value of $570 million. These securities are non interest bearing, repayable in tranches between 2025 and 2036, and rank equally with all other unsecured, unsubordinated creditors of Chorus Chorus can issue equity securities to the Crown up to a total face value of $766 million, which pay no dividends until 2025 - at which point dividends are phased in between 2025 and 2036, and are deferrable (optional and mandatory) on a non-cumulative basis - To date $982 million of securities have been issued to the Crown, leaving $354 million of crown funding available Chorus' financial bank facility covenants require its senior debt ratio to be no greater than 4.75 times 28 November 2019 DEBT INVESTOR PRESENTATION CHORUS#29Total Crown Financing Face Value CIP Equity Securities Crown Financing ($m) at 31 October 19 Face Value CIP Debt Securities 2020 2021 2022 2023 800 785 677 700 600 500 400 400 350 300 200 100 0 200 2024 Debt and Liquidity 2025 2026 4 82 2027 2028 2029 2030 2031 23 82 DEBT INVESTOR PRESENTATION 982 354 1,336 CHORUS Drawn Available 444 21 Total 465 UFB1 105 105 $465m UFB2/2+ $105m 444 21 465 UFB1 $465m 94 207 301 UFB2/2+ $301m 2032 2033 2034 123 2035 2036 157 ■ EUR EMTN ■Bank Facility $677m Face value of CIP debt securities issued 500 ■CIP debt securities available $400m $784m 52 $500m 44 GBP EMTN ■ NZ Bond As at 31 Oct 2019, borrowings of $2,426m comprised of: $ 65m drawn from bank facilities equivalent at hedged rates GBP259.82m due April 2020 NZD bond due May 2021 equivalent at hedged rates EUR500m due October 2023 NZD bond due December 2028 $2,426m Total gross debt Bank Facilities $350m Evergreen, May 2022 $250m Evergreen, May 2024 $550m 29 29 November 2019#30Making New Zealand better We take a long term view of our network infrastructure investments and our people take pride in delivering an asset for New Zealand's ongoing social and economic betterment The broadband networks we build and maintain are aligned with the infrastructure-focused elements of the United Nations Sustainable Development Goals. Our networks enable sustainable cities and communities, decent work and economic growth, quality education, good health and well-being and climate action Our People We're committed to building a culture that's inspiring for our employees and drives the desired brand experience for our customers Equip our people with the tools and skills needed to support the changes within the business Employee Benefits: Wellbeing & Volunteer Days Diversity and Inclusion Keeping Communities Connected New Zealanders place great reliance upon the availability of our network both as a utility service for their daily lives and businesses, as well as a critical lifeline service in times of emergency We work to ensure the 1.45 million connections on our network receive stable and reliable service Average duration of network interruptions in FY19 across fibre and copper network was 18 hours, down from 21 hours in FY18 Enabling Climate Action broadband Enhanced connectivity opens up alternative business models and communications options that reduce the need for carbon emitting activity During FY19 we completed our programme to replace air conditioning units that relied on ozone depleting refrigerant We expect our investment in fibre to help us achieve an 80% reduction in our scope 1 and 2 emissions, from our FY12 base year, by 2030 Waste and Recycling We have an extensive waste minimisation process for network activities 279 279 10 Tonnes Tonnes of metal recovered for recycling Tonnes of ducting recovered for recycling of e-waste diverted from landfill Cybersecurity and Privacy As a wholesale network operator our cybersecurity risks are different from those of retail service providers. We don't hold direct personal information of the consumers connecting to our network. For the limited information we hold, we adhere to the requirements of the New Zealand Privacy Act The Telecommunications Information Privacy Code (2003) also stipulates that we must not collect telecommunications information except in exceptional circumstances limited 30 November 2019 DEBT INVESTOR PRESENTATION CHORUS#31Appendix: Key Terms Term ADSL Description Asymmetric digital subscriber line a communication technology allowing high-speed data transfer over copper-based access networks in the local loop ARPU Average revenue per user CIP Crown Infrastructure Partners FTTH Fibre to the home GBs Gigabits per second. A measure of data consumption HFC Hybrid fibre copper IoT LFC Mbps ONT Internet of things - network of physical devices, vehicles, home appliances and other items embedded with electronics, software, sensors, actuators, and network connectivity which enables these objects to be connected and exchange data. Local fibre company - the companies responsible for the roll out, provisioning and maintenance of the UFB network Megabits per second. A measure of network speed Optical network terminal. General term for a specialised piece of network equipment that terminates a single dark fibre and is located at the End User premises PON RAB Passive optical network. A line consisting of optical fibres spliced end-to-end possibly via a splitter Regulated asset base VDSL Very high bit rate digital subscriber line - the highest speed variant of ADSL technology WACC Weighted average cost of capital 31 November 2019 DEBT INVESTOR PRESENTATION CHORUS#32Thank you 32 November 2019 DEBT INVESTOR PRESENTATION CHORUS