Chorus updates on RAB finalisation process and FY22 Capex

Chorus Limited
Level 10, 1 Willis Street
P O Box 632
Wellington
New Zealand

Email: company.secretary@chorus.co.nz






STOCK EXCHANGE ANNOUNCEMENT

10 June 2022

Chorus updates on RAB finalisation process and FY22 capex guidance

Chorus has submitted updated modelling to the Commerce Commission as required
for the Commission’s regulated asset base (RAB) finalisation process. The
Commission is currently scheduled to confirm the final RAB in July.

Chorus’ modelling updates previous spending forecasts that informed the
Commission’s draft starting RAB, announced in December 2021, with actual spending
over the 18 months to 31 December 2021.

The combined effect of lower than forecast capital and operating expenditure in FY21
and HY22 suggests a reduction in the 1 January 2022 starting RAB, from $5.425
billion to $5.346 billion. This comprises a $65 million reduction in the core RAB from
the transitional RAB decision and a $14 million reduction in the financial loss asset.

However, this modelling does not yet reflect a separate Chorus submission on shared
exchange space that is being considered by the Commission and could add up to $67
million to the starting RAB.

Chorus CFO David Collins said today’s update reflects a combination of COVID
impacts and positive business gains.

“COVID restrictions delayed investment in the core RAB by slowing our fibre
installation programme and other expected network projects. Lower than expected
operating expenditure over the 18 months, net of revenue, is the main contributor to
the change in the financial loss asset,” he said.

Revenue effects from any changes to the final RAB will be washed up as part of the
maximum allowable revenue in the next regulatory period beginning in 2025.

FY22 capital expenditure guidance update

Chorus has also updated its FY22 capital expenditure guidance to reflect the ongoing
constraints COVID has had on fibre installations and other network investment
activity. Chorus now expects FY22 capital expenditure to be within a range of $480
million to $500 million. This is below the previous range of $520 million to $560
million provided at the half year results announcement in February.

Consumer demand for new fibre connections remains strong with Chorus continuing
to promote the activation of pre-installed fibre connections. Managed migration
campaigns have been reoriented to focus on areas where fibre has been recently

deployed, or where copper services are in the process of being withdrawn. Chorus
will release its Q4 connections update in early July.

Chorus’ FY22 EBITDA guidance of $665 million to $685 million remains unchanged.




Authorised by:

David Collins
Chief Financial Officer

ENDS

For further information:

Brett Jackson
Investor Relations Manager
Phone: +64 4 896 4039
Mobile: +64 (27) 488 7808
Email: Brett.Jackson@chorus.co.nz

Steve Pettigrew
Head of External Communications
Mobile +64 (27) 258 6257
Email: Steve.Pettigrew@chorus.co.nz