Fonterra Financial Overview

Glossary Gearing ratio (adjusted net debt) Is adjusted net debt divided by total capital. Total capital is equity excluding hedge reserves, plus adjusted net debt Greater China Represents the Ingredients, Foodservice and Consumer channels in Greater China, and the Falcon China Farms JV Group Operations Comprises functions under the Chief Operating Office (COO) including New Zealand milk collection and processing operations and assets, supply chain, Group IT, Sustainability and Innovation; Fonterra Farm Source TM retail stores; and the Central Portfolio Management function (CPM) Ingredients Represents the channel comprising bulk and specialty dairy products such as milk powders, dairy fats, cheese and proteins manufactured in New Zealand, Australia, Europe and Latin America, or sourced through our global network, and sold to food producers and distributors kgMS Means kilograms of milk solids, the measure of the amount of fat and protein in the milk supplied to Fonterra Net debt (adjusted) Fonterra Dairy for life Is calculated as total borrowings, plus bank overdraft, less cash and cash equivalents, plus a cash adjustment for 25% of cash and cash equivalents held by the Group's subsidiaries, adjusted for derivatives used to manage changes in hedged risks on debt instruments. Amounts relating to disposal groups held for sale are included in the calculation Normalised earnings per share (EPS) Normalised earnings per share is calculated as normalised profit after tax attributed to equity holders of the Co-operative divided by the weighted average number of shares on issue for the period Return on capital Is Total Group normalised EBIT including finance income on long-term advances less a notional tax charge, divided by average capital employed Season New Zealand: A period of 12 months from 1 June to 31 May Australia: A period of 12 months from 1 July to 30 June Chile: A period of 12 months from 1 August to 31 July Unallocated costs and eliminations Represents corporate costs including Co-operative Affairs and Group Functions; and any other costs that are not directly associated to the reporting segments; and eliminations of inter-segment transactions 39

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