Nine Entertainment Co Holdings Ltd Annual Report 2018

FY2018 Annual Report · Nine Entertainment Co Holdings Ltd
Loading PDF…
ANNUAL REPORT
2018

CONTENTS

CHAIRMAN'S ADDRESS 
CHIEF EXECUTIVE OFFICER’S ADDRESS 
OPERATIONAL REVIEW 
GOVERNANCE 
NINE CARES 
BOARD OF DIRECTORS 

2
4
6
18
20
22

DIRECTORS’ REPORT 
REMUNERATION REPORT 
OPERATING AND FINANCIAL REVIEW  
FINANCIAL STATEMENTS 
SHAREHOLDER INFORMATION 
CORPORATE DIRECTORY  

24
30
49
53
113
115 

YEAR IN BRIEF

During FY18, the strong operating performance of traditional linear television has enabled Nine to step up the focus on, 
and commitment to, the long-term growth of the overall business. 

Positive ratings momentum combined with Nine’s focus on the 25-54 demographic is translating to improved revenue share 
in Free To Air (FTA) television. In Digital, 9Now is experiencing strong revenue and proﬁt growth as the business continues 
to mature and the Digital Publishing business has reported accelerating growth in revenues and EBITDA, driven by video-
led content and based around the key verticals of News, Sport, Entertainment and Lifestyle. Stan has passed through the 
milestone of 1 million subscribers and remains focussed on building a long term competitive and proﬁtable SVOD business. 

During the year, Nine has challenged the paradigm – trialling new content, investing in new distribution platforms and 
creating new ways to engage with its audiences and advertisers. The progress has been tangible.

RESULT IN BRIEF
In FY18, NEC reported Group EBITDA of $257 million, up 25% on FY17, driven by a 6% increase in Group revenues. Nine 
increased its share of a Free To Air market which returned to growth over the year, underpinning the result. Importantly for 
the future of the business, Nine’s FTA growth was augmented by strong growth in 9Now and Digital Publishing. 

Net Proﬁt after Tax and before Speciﬁc Items increased by 27% to $157 million compared to the FY17 result. On the same 
basis, earnings per share grew by 27%. The Statutory Net Proﬁt after Speciﬁc Items, which aside from the proﬁt on the sale 
of the Willoughby premises were predominately accounting-led non-cash items, was $222 million. 

Operationally, Nine gained signiﬁcant positive momentum across all aspects of its business. 

YEAR TO JUNE, $M

REVENUE

GROUP EBITDA

NPAT, BEFORE SPECIFIC ITEMS

STATUTORY NPAT, AFTER SPECIFIC ITEMS

OPERATING FREE CASH FLOW

EARNINGS PER SHARE, BEFORE SPECIFIC ITEMS — CENTS

DIVIDEND PER SHARE — CENTS

FY18

FY17

VARIANCE

1,318.2

257.2

156.7

209.7

242.6

18.0

10.0

1,237.8

205.6

123.6

(203.4)

109.2

14.2

9.5

+6%

+25%

+27%

NA

+122%

+27%

+0.5C

Operating free cash ﬂow for the year, before Speciﬁc Items, interest and tax, was $243 million. This was before the 
cash impact of the Warner Speciﬁc Item ($43 million). Net Debt at 30 June 2018 was $121 million, down from $225 million 
12 months earlier. During the year, $87 million was returned to shareholders through dividends, $125 million was received 
via the sale of the Group’s Willoughby premises, and nearly $100 million was invested in the business, including through 
Stan and Pedestrian. 

REPORTED, AS AT

NET DEBT, $M

NET LEVERAGE

EBITDA INTEREST COVER

30 JUNE 2018 30 JUNE 2017

121.3

0.5X

114.5X

224.5

-$103.2M

1.1X

36.7X

-0.6X

 
 NINE ANNUAL REPORT 2018

I

H
G
H
L
I
G
H
T
S

Create Great Content 
Distribute it Broadly 
Engage Audiences 
and Advertisers

1

NINE ANNUAL REPORT 2018

OPERATIONAL HIGHLIGHTS 2018

NINE: WHERE  
AUSTRALIA CONNECTS

Nine was home to the 
No 1 entertainment 
program of 2017 with 
The Block – Winner 
Announced achieving 
a national audience 
of more than 3.5m

15 episodes of Love Island Australia 
attracted a larger audience on 9Now 
than linear TV, and was Nine’s most live 
streamed (non sport) program to date

1.1M

ACTIVE SUBSCRIBERS 
OF STAN 

23% 

GROWTH IN PREMIUM 
REVENUE, ACROSS 
ALL PLATFORMS 

15% GROWTH 

IN 25-54S AUDIENCE*  
FOR SEASON 5 OF  
MARRIED AT FIRST SIGHT

* CONSOLIDATED 28, NATIONAL

FORMATION OF JV WITH 
AUSTRALIAN NEWS 
CHANNEL TO LAUNCH 
NEW BUSINESS CHANNEL, 
YOUR MONEY

ACQUISITION OF 
EXCLUSIVE LIVE  
RIGHTS TO ALL  
PREMIUM TENNIS  
PLAYED IN AUSTRALIA 
FOR SEASONS 2019-2024

AUSTRALIA’S LOVE 
ISLAND DRIVES 
RECORD YOUNGER 
AUDIENCES TO 9GO! 
AND 9NOW

ROLL OUT OF 

9GALAXY

OPTIMISING THE RETURN 
FROM NON-PREMIUM 
INVENTORY

NINE: WHERE  
AUSTRALIA CONNECTS

27% GROWTH 

IN 25-54S AUDIENCE*
FOR SEASON 13 OF THE BLOCK
* CONSOLIDATED 28, NATIONAL

6.8M*
REGISTERED USERS 
REGISTERED USERS  
OF 9NOW

* AS AT SEPTEMBER 2018

#1 
BROADCAST 
NETWORK IN 25-54 
DEMOGRAPHICS

(SOURCE: 12 MONTHS TO  
JUNE 2018, 6AM-MIDNIGHT)

1.1M

ACTIVE SUBSCRIBERS 
OF STAN 

23% 

GROWTH IN PREMIUM 
REVENUE, ACROSS 
ALL PLATFORMS 

FORMATION OF JV WITH 
AUSTRALIAN NEWS 
CHANNEL TO LAUNCH 
NEW BUSINESS CHANNEL, 
YOUR MONEY

ROLL OUT OF 

9GALAXY

OPTIMISING THE RETURN 
FROM NON-PREMIUM 

INVENTORY

60 Minutes 
– celebrating 
its 40th year 
on air in 2018

NINE ANNUAL REPORT 2018

CHAIRMAN’S ADDRESS

“The advantage 
we have 
against the 
new technology 
companies….is our 
premium content 
in a trusted 
and brand-safe 
environment for 
audiences.”

Nine has made great progress during 
FY18. Growth in audiences – on Free To 
Air TV, Broadcast Video on Demand, 
Subscription Video on Demand and 
across our broader digital publishing 
assets - has translated to Group 
revenue which was up 6%, and a 25% 
increase in Group EBITDA for the year.

The year started strongly in July 2017 
with the launch of Australian Ninja 
Warrior, which set the basis for a very 
strong ratings period for Nine. Perennial 
favourite The Block and relative new-
comer Married at First Sight proved that 
Free To Air audiences can grow with 
the right content. And the consumer can 
now take the opportunity to ﬁnd that 
content on whichever platform they wish 
to view it. 

It was pleasing to see the TV 
market return to growth this year, 
as advertisers, many of them digital 
companies, recognised the unrivalled 

power of Free To Air television when 
it comes to building their brand. 
The advantage we have against 
the new technology companies 
that are entering the market 
is our premium content in 
a trusted and brand-

safe environment for 

audiences.

Nine’s catch up and live streaming 
business, 9Now, has continued to 
build both in terms of registered 
users, and revenue and proﬁt growth. 
These registered users have formed 
the core of Nine’s proprietary data-
base. Nine’s unique suite of assets – 
linear television, Broadcast Video On 
Demand (BVOD) and digital publishing 
– can now oﬀer advertisers the full 
spectrum of advertising alternatives, 
from mass market brand-building to 
truly addressable advertising. The 
market’s response to this opportunity 
has been very encouraging. 

Stan reached the milestone of 1m 
active subscribers towards the end of 
the year and the momentum has not 
slowed. Stan’s exclusive content, sourced 
both from a range of international 
studios and its own commissions, is 
gaining popular appeal, driving market 
awareness, and importantly subscriber 
take-up. With the right balance of 
premium content, we are more excited 
than ever about the future of Stan. 

During the year, we entered into a 
partnership agreement with Tennis 
Australia for the broadcast rights to all 
premium tennis played in Australia for 
the 2019 to 2024 seasons. This landmark 
deal is a testament to the work done 
by Nine’s sports teams who are to be 
congratulated for their determination 
and the diﬀerent perspective they 
were willing to take on an established 
equation. As a Company, we are 
looking forward to our ﬁrst broadcast of 
Australian Tennis in January 2019. 

In October 2017, we completed the sale 
of the Willoughby site, after more than 
60 years. In 2020, our Sydney business 
will be relocating to 1 Denison Street in 
North Sydney, bringing together Nine’s 
Sydney CBD and Willoughby oﬃces for 
the ﬁrst time. Culturally and physically, 
this move will mark the beginning of 
an exciting new era for the Company.

2

I

C
H
A
R
M
A
N
S

’

 NINE ANNUAL REPORT 2018

A
D
D
R
E
S
S

The Today Show wrapped 
up the 2017 ratings year as 
the most watched breakfast 
show in the country’s two 
largest markets of Sydney 
and Melbourne. 

Post balance date, in July 2018, Nine 
approached Fairfax Media with a 
proposal to merge our two companies. 
Both Nine and Fairfax have played an 
important role in shaping the Australian 
media landscape over many years. 
The combination of our businesses and 
our people will position us to deliver 
new opportunities and further innovation 
for our shareholders, staﬀ and all 
Australians in the years ahead. As a 
Company, we are very excited about 
the prospect of being able to take our 
combined premium content propositions 
across television, digital, radio and print 
in a mutually beneﬁcial way.

We are constantly reviewing the way 
we remunerate and reward our people. 
Whilst there have been no substantive 
changes this year, we continually seek 
feed-back from our shareholders 
and the market overall. We need to 
ensure that the levels of our employee 
compensation enable Nine to attract 
and retain a leading team of executives, 
ﬁt for the modern media world and 
competitive with our international peers. 

I would like to thank my fellow Board 
members for their commitment this year, 
particularly these past few months when 
Company-deﬁning decisions have been 
made. It’s been a year of stability with 
no changes to a Board that retains 
an enviable mix of skills across media, 
ﬁnance and general business and 
the ability to move swiftly, and in the 
interests of all shareholders. I would like 
to thank my fellow Directors for their 
ongoing commitment to Nine.

We will continue to focus on ensuring 
superior returns for all of our 
shareholders. We are excited by what 
the future has to oﬀer, and look forward 
to sharing the rewards of that future 
with all of Nine’s stakeholders.

In closing, results like these cannot 
be achieved without an incredible 
group of passionate and committed 
people. I would like to thank all of 
Nine’s employees for their eﬀorts this 
year. We have markedly improved the 
performance of the traditional business, 
while containing costs and we have 
delivered on our longer term goal of 
broadening the base of our revenue 
streams with new and enlarged digital 
audiences. And we are well-positioned 
for this momentum to continue.

PETER COSTELLO, AC
CHAIRMAN 

The Voice continues to deliver for Nine, with the 2018 grand 
ﬁnal attracting a national audience of more than 1.5m

3

NINE ANNUAL REPORT 2018

CHIEF EXECUTIVE
OFFICER'S ADDRESS

“Our ambition 
to be able 
to provide 
advertising 
solutions 
supported by 
data across the 
entire spectrum 
is becoming 
a reality.”

2018 has been a great year for Nine, 
with positive momentum recorded 
across all of our assets. As a result, we 
reported strong FY18 results – Group 
EBITDA of $257 million, up 25% on 
FY17 and a Net Proﬁt After Tax of 
$157 million, pre Speciﬁc Items, up 27%. 
Our shareholders were rewarded not 
just with a 10c fully franked dividend, 
but with strong share price performance 
across the year. 

The Metro television ad market 
returned to growth in FY18, while BVOD 
continued to surge. Metro Free To Air 
revenues increased by 2.5%, which 
included a notable 3.8% growth in the 
second half while BVOD ad revenues 
increased 32%. With the strong support 
of Think TV, the medium’s unsurpassed 
ability to build brand has again come to 
the fore. 

Nine’s Free To Air TV ratings showed 
steady growth across FY18 and we 
focussed eﬀectively on improving 
the monetisation of our content, 

both in terms of premium 
revenue and cross platform 
opportunities. This drove Nine 
to the number one revenue 

share position for both the 
ﬁrst half of FY18, and 
the ﬁnancial year 
as a whole, for 

the ﬁrst time in 

12 years.

4

This positive momentum has enabled us 
to continue to invest in those areas that 
will be important to both the short and 
long term future of Nine – through 
investment in content that continues 
to increase the depth and consistency 
of Nine’s schedule, and in content 
that thrives in a complementary non-
linear environment. In this fragmenting 
environment, the increasing value of 
content is becoming clearer and Nine’s 
strategy over the past few years has 
played to this theme. 

9Now was a direct beneﬁciary of 
our investment, and its user base, 
engagement and sales proposition 
continue to expand. The experiment of 
Love Island, content that was tailored 
speciﬁcally for the streaming platform, 
was a great success with more than 
half of the total audience viewing 
Love Island through 9Now. As the user 
education and experience has matured, 
9Now has become a major contributor 
to Group proﬁt, and growing strongly. 
The net result being that our Digital 
business, ex the discontinued Bing 
sales relationship, doubled its proﬁt 
contribution to $34 million. A result that 
bodes well for the future.

Stan is a further step in this strategy, 
providing an outlet for much of the 
content that no longer works on Free 
To Air TV but which has a passionate 
and loyal following on SVOD. Content 
like Billions, Younger, Better Call Saul 
and No Activity has driven Stan to a 
subscriber base of more than 1.1 million 
in just three years of operation. Stan is 
now in a very strong position to take 
the next steps critical to drive its growth 
from its current subscriber base to 
2 million or even 3 million subscribers in 
the medium term. This can be achieved, 
assisted by the potential of the 
enhanced strategic relationships which 
will be inﬂuential in accelerating Stan’s 
future growth. 

Over the past two years, we have been 
actively investing in our technology 
and systems. We have completed and 
rolled out Australia’s ﬁrst automated 
trading platform, Galaxy, and the early 
results in terms of ease, eﬃciency and 
inventory optimisation have been very 

 NINE ANNUAL REPORT 2018

’

C
E
O
S
A
D
D
R
E
S
S

Family Food Fight was new to the schedule 
this year, and ensured Nine’s season 2017 
ﬁnished strongly, with an average national 
audience of almost 800,000

5

Beneﬁts in scale both in terms of 
Beneﬁts in scale both in terms of 
advertising relationships and the 
advertising relationships and the 
opportunities aﬀorded by data, as well 
opportunities aﬀorded by data, as well 
as the combined Group’s ability to 
maximise the operating performance of 
both Domain and the aggregated news 
product, and the potential presented 
by a consolidated Stan, are exciting to 
consider. And whilst we have cited an 
initial estimate of at least $50 million of 
cost synergies, this was not a merger 
that was instigated or even justiﬁed 
by cost out. The really exciting parts 
for us and for Fairfax, are the growth 
opportunities that will emerge or be 
accelerated by virtue of the combination.

In closing, I’d like to thank all of our 
staﬀ and the Board for their ongoing 
support and dedication as we continue 
to redeﬁne our business. Nine has great 
momentum and we have used this  
period to invest in our future. 
These past twelve months have 
been both challenging and 
rewarding and we are equally 
excited about our future.

Thank you

HUGH MARKS
CEO 

pleasing. In just 8 months, we now have 
pleasing. In just 8 months, we now have 
23% of all of our oﬀ peak and multi-
channel advertising bookings being 
processed through Galaxy, driving 
greater eﬃciencies for our business 
and for our agency partners. We have 
committed to developing 9Galaxy 
2.0 with a development roadmap 
out until the end of 2020. This will 
enable Nine to include 9Now with 
every television campaign, to increase 
the utilization of our inventory cross 
platform and to deliver campaigns with 
unduplicated reach. 

At the same time, we have been 
building out Nine’s data oﬀering. The 
ambition to extend our proposition to 
addressable and ultimately targeted 
advertising is ﬁnally becoming a reality. 
This is possible due primarily to the 
data we are currently accessing from 
9Now through our single sign on, and 
also from Stan and our data partners. 
As our portfolio of assets matures, and 
potentially grows, our ambition to be 
able to provide advertising solutions 
supported by data across the entire 
spectrum – from mass market brand 
building to very targeted transactional 
campaigns – is becoming a reality. 

Subsequent to the end of the ﬁnancial 
year, in July 2018, we made a decision 
to pursue a merger proposal with 
Fairfax Media. 

There were many drivers behind this 
decision. None of them reﬂect on our 
business which, as you can see from 
this result, is in great shape and has a 
strong balance sheet and operational 
momentum. What the merger will do, 
is help to `super-charge’ many of the 
opportunities that both Fairfax and 
Nine are already exploring separately. 
Eﬀectively an extension of the strategy 
we have been working on over the last 
couple of years that is delivering the 
results we are now achieving. 

 
NINE ANNUAL REPORT 2018

OPERATIONAL REVIEW

For the year to June 2018, Nine was the 
#1 Free To Air Network in all of the key 
buying demographics. 

Network ratings for the year

#1

25-54s 38.2%  

+1.9pts

commercial share

#1

16-39s

38.4%  
commercial share

+2.5pts

#1 GB+CH 40.5%  

+2.6pts

commercial share

OzTAM data, 12 months to end of June 2018, 
6am–midnight, ex Commonwealth Games

The year started strongly for Nine, with 
the launch of Australian Ninja Warrior in 
July 2017. The opening night momentum 
– an audience of 2.5 million nationally, 
or almost 1.8 million on a 5 city basis – 
continued throughout the series and set 
the stage for a schedule that showed 
increasing depth and consistency across 
the year. Season 13 of The Block again 
showed the industry what can be 
achieved with premium original content 
and an integrated sales eﬀort that 
brought around 30 advertising partners 
into the show. Average audiences for 
The Block were up around 25%, on both 
a 5-city metro and national basis.

The return of Married At First Sight at 
the start of calendar 2018 meant Nine 
had strongly positive momentum for 
the start of the ratings season. MAFS 
captured the heart and imagination 
of Australia for 8 weeks, recording 10% 
growth in linear audiences on 2017 
and an average audience, including 
live streaming, of almost 2.4 million 
per episode.

Nine now has a strong and consistent 
schedule of premium entertainment 
content across the full calendar year. 
Married at First Sight, The Voice, 
Australian Ninja Warrior, The Block and 
Family Food Fight to close the year 
has created an unrivalled consistency 
for our advertisers. Moreover, Nine has 
further increased its depth around these 
core titles – Travel Guides, This Time 
Next Year, Doctor Doctor and Hamish 
and Andy to name a few. 

NEWS AND CURRENT AFFAIRS
News remains core to Nine, with around 
65 hours of television news and current 
aﬀairs broadcast each week. Nine’s 
6pm news service is consistently one 
of the top ﬁve shows for the night, 
attracting a Free To Air audience of 
almost 1m people, 365 days a year. 
Nine prides itself on the depth, 
breadth and independence of its 
news coverage. 

FREE TO AIR TELEVISION
Nine’s Free To Air business recorded its 
strongest result in many years in FY18. 
Growth in ratings and revenue share 
underpinned a 26.5% increase in TV 
EBITDA to $238 million.

TV

m
$

e
u
n
e
v
e
R

1400

1200

1000

800

600

400

200

0

FY16

FY17

FY18

PREMIUM REVENUE

OTHER REVENUE

EBITDA

300

250

200

150

100

50

0

E
B
I
T
D
A
$
m

Total revenues were up 7%, on the back 
of a Metro TV market which grew by 
2.5% for the 12 months. Nine’s share of 
Metro revenues for the year was 38.6%, 
up from 35.7%, despite the broadcast 
of a number of special events on 
competing networks. Nine continued to 
grow its premium revenue base, up 23% 
for the year. This growth reﬂects Nine’s 
focus on oﬀering innovative advertising 
solutions extending beyond the use of 
traditional advertising spots. 

Premium Ad Revenue - Free To Air

+23%

2017

2018

Entertainment

Sport

200

150

100

50

0

6

 
 
 
 NINE ANNUAL REPORT 2018

R
E
V
I
E
W

O
P
E
R
A
T
I
O
N
A
L

7

NINE ANNUAL REPORT 2018

OPERATIONAL REVIEW (CONT)

In FY18, Nine extended its regional news 
coverage, gathering and producing 
news from 15 regional markets, for 
broadcast through its Southern Cross 
aﬃliation. This news initiative has 
brought more than 170,000 people 
in these regional markets to Nine’s 
local news services.

As media has fragmented, the Nine 
news and current aﬀairs brands 
have also extended their reach through 
Nine’s digital publishing platforms. 
15 million news video streams through 
nine.com.au and 9News.com which 
attracts a unique audience of more 
than 8.5 million Australians each month. 
This reach is further augmented by 
social with Facebook, Twitter and 
Instagram together accounting for 
around 250 million views each month. 

Nine retains its ambition to be the 
primary supplier of news to all 
Australians – across all demographics, 
and distribution platforms. Nine’s 
commitment to and investment in all 
things news remains, with a focus on 
optimising the monetisation of all of 
Nine’s own platforms and ensuring fair 
monetisation from those platforms that 
use the content. 

SPORT
Sport is a key component of Nine’s 
programming schedule. In FY18, Nine 
broadcast 700 hours of premium sport 
across the year, in addition to around 
230 hours of other sports-related content. 

In FY18, Nine’s Summer of Cricket 
beneﬁtted from the touring English team 
and The Ashes. Nine broadcast 39 days 
in total of cricket coverage over summer, 
with a national reach of 16.1 million 
and an average national audience of 
1.3 million.

The NRL remains Nine’s core winter 
sport. For the ﬁrst 24 rounds of season 
2018, Nine’s regular NRL broadcasts 
attracted an average audience of more 
than 3 million league supporters each 
week, a fertile audience for advertisers 
chasing that tight demographic. The 
State of Origin series reached a massive 
9.9 million people nationally – one of the 
few events in Australia to reach such a 
big audience and accounted for three of 
the top ten shows on Australian television 
in the year to June 2018.

Across the 2018 season of Suncorp 
Super Netball, total audience reach of 
6.7 million viewers equated to a match 
average of 140,000, up 26% on 2017. 
In addition, 9Now streamed more than 
18 million minutes across the season, with 
live minutes viewed more than trebling.

Through Nine’s digital publishing platform, 
WWOS has taken Nine’s traditional sports 
franchise even further. WWOS recorded 
growth across all major demographics 
for the year with strong double digit 
growth in audiences and solid single 
digit growth in engagement. These trends 
accelerated into the June half with 30% 
growth in 25-54 audiences and double-
digit growth in engagement across all 
key demographics.

State of Origin game 1 2018 was the 
largest streaming event ever on 9Now

During the year, Nine successfully bid 
for the rights for premium tennis in 
Australia and from FY19 will broadcast 
The Australian Open over summer, 
complementing its winter of NRL and 
Super Netball. The decision to switch 
after 40 years of cricket to tennis 
was not taken lightly and reﬂects a 
conﬂuence of factors – the changing 
demographics of the Nine audiences, 
the timing of tennis which attracts 
huge audiences leading into a new 
season of television, the aligned view 
of the sport taken by Nine and Tennis 
Australia, as well as fundamentally 
enhanced economics. 

9GALAXY
In early 2018, Nine rolled out 9Galaxy, 
its advanced automated trading 
platform for television, designed to 
provide advertisers with guaranteed 
delivery of campaigns, to target 
demographics with pricing certainty and 
result in signiﬁcant buying eﬃciencies. 
For Nine, it provides an eﬃcient way to 
sell advertising inventory and an ability 
to better optimise inventory usage. 

8

 NINE ANNUAL REPORT 2018

R
E
V
I
E
W

O
P
E
R
A
T
I
O
N
A
L

9

NINE ANNUAL REPORT 2018

OPERATIONAL REVIEW (CONT)

By June 2018, more than 20% of Nine’s 
multi channel and oﬀ-peak television 
inventory was traded through 9Galaxy. 
And by the end of calendar 2018, Nine 
intends to add 9Now’s inventory onto 
the platform, enabling the trading of 
audiences across linear TV and 9Now 
against age and sex demographics, 
and importantly, a range of behavioural 
segments. It will be done in one 
seamless transaction to optimise the 
utilisation of inventory and maximise 
the value of audiences across every 
platform, making Nine even easier to 
deal with.

DIGITAL
For the 12 months to June, Nine Digital 
recorded a revenue increase of 7%, 
underpinned by long form video, 
particularly 9Now, and an increasing 
contribution from both Pedestrian TV 
and CarAdvice. This growth more than 
oﬀset the declining revenue in the 
traditional display category and the 
absence of contribution from Bing.

Digital Results

E
B
I
T
D
A
$
m

50

0

FY14

FY15

FY16

FY17

FY18

EBITDA

REVENUE

m
$

e
u
n
e
v
e
R

180

160

140

120

100

80

60

40

20

0

10

EBITDA growth of 18% reﬂected this 
revenue growth and the changing 
mix to increasing premium and higher 
margin revenues. The Digital business’s 
ability to grow reported EBITDA in 
FY18 was signiﬁcant given the negative 
impact of the absence of Bing as 
well as the increased investment in 
the newer businesses of 9Honey and 
Future Women

Components of Digital EBITDA

40

35

30

25

20

15

10

5

0

FY16

FY17

FY18

Bing

Digital Publishing

9 Now

9NOW
2018 was a landmark year for 9Now, 
Nine’s live streaming and catch-
up service. This has been reﬂected 
in signiﬁcant growth in all of the 
Group’s key metrics – registered users, 
engagement, revenue and proﬁtability.

Growth in 9Now

This success has been primarily driven 
by the broad performance of Nine’s 
schedule. In particular, the popularity 
of Married At First Sight, The Voice and 
Love Island helped to underpin a 93% 
increase in long form streams for the 
year. This resulted in revenue growth 
of 86% and a more than three-fold 
increase in proﬁt contribution from 
9Now. 

Importantly, Nine has invested above 
and beyond its traditional linear 
content in 9Now. The performance 
of Love Island in particular, has reset 
the deﬁnition of true cross platform 
programming and driven a new 
population of audience to 9Now. 
Young females, a traditionally diﬃcult 
to reach audience segment, embraced 
the platform to tune into the latest 
instalment from the Island, vindicating 
the decision to invest in content primarily 
for an on-line audience. For the season 
in total, more than half of the total 
audience for Love Island Australia 
was derived from 9Now, there were 
13m stream starts across catch-up and 
live and almost 400 million minutes of 
content was viewed.

m
$

e
u
n
e
v
e
R

45

40

35

30

25

20

15

10

5

0

2017

2018

EBITDA

REVENUE

E
B
I
T
D
A
$
m

There is much work still to do. 9Now 
is now available across all major 
platforms. And while the content has 
been attracting viewers at a rate far 
surpassing expectations, conversion to 
revenue has lagged. Technical issues 
and advertiser take-up have hindered 
the industry globally but these are now 
being resolved. 

#1 Commercial BVOD site 

by Unique Audience (2.6m)

Source: Nielsen June 2018

#1 Commercial BVOD 

site by Engagement  
(2hr 25 mins)
Source: Nielsen June 2018

6.4m 

Registered users  
as at 30 June 2018

MAFS #1 

VPM rating for a reality 
program 

Year to June 2018

 
 
 
 
 
 NINE ANNUAL REPORT 2018

R
E
V
I
E
W

O
P
E
R
A
T
I
O
N
A
L

11

NINE ANNUAL REPORT 2018

OPERATIONAL REVIEW (CONT)

Industry-wide BVOD revenue of 
$90 million in FY18 was up 31% and is 
expected to continue to grow strongly 
as usage continues to increase and 
advertiser support grows. Nine’s share 
of 39.4% was indicative of its market 
leading proposition. 

9Now is instrumental to the success of 
Nine – a distribution platform adding 
incrementally to the returns Nine is 
achieving on its premium content and 
enabling broader demographics to 
engage with this content.

9Now’s unique single sign-in process 
has enabled the development of a 
proprietary data base which is becoming 
a key asset for Nine for the future. Data 
will allow advertisers to better target 
their audiences, increasing advertising 
eﬀectiveness for them and ultimately yield 
for Nine. Early in FY19, 9Now introduced 
addressable advertising, enabling the 
serving of diﬀerentiated advertising 
content to customer bases with speciﬁc 
gender, age and location characteristics. 
From an advertisers’ perspective, 
addressable advertising brings together 
the very best of television and the best 
of digital. 9Now’s signed in user base 
gives Nine an important and unique 
competitive advantage. 

DIGITAL PUBLISHING
Nine’s Digital Publishing business has been 
built around the same content verticals as 
Nine’s traditional Free To Air business – 
News, Sport, Lifestyle and Entertainment. 

Nine.com.au is the gateway to Nine’s 
Digital Publishing business, a genuine 
commitment between the broadcast 
and digital editorial teams to ensure a 
seamless way of connecting Australians.

9Honey, Nine’s lifestyle vertical, was ﬁrst 
launched in 2016 and quickly established 
itself as a leading women’s lifestyle brand. 
The combination of Nine’s content and 
9Honey’s audience has created adjacent 
opportunities with initiatives like Talking 
Married, a half hour chat show broadcast 
on 9Life, and complementing Married At 
First Sight on Channel Nine. Overall, the 
program drew total audiences of around 
200,000 (including encore and VPM) to 
make it among the most watched shows 
in 9Life’s history. Over the past year, 
9Honey’s average monthly audience has 
consolidated at around 2.4 million. 

During the year, Nine invested in Future 
Women a premium subscription site for 
women. The launch of a diﬀerent revenue 
model for a diﬀerent audience was about 
attracting incremental revenue outside the 
mass market appeal of 9Honey. Future 
Women launched in August 2018.

The aim is to extend Nine’s relationship 
with audiences and advertisers by 
leveraging the Network’s unique premium 
content, news, brands, talent, production 
and cross promotional capability across 
additional platforms. Nine is constantly 
seeking incremental opportunities to 
further grow its Digital Publishing business.

Nine.com.au

53%

growth in streams
Source: Omniture, year on year

9Honey

#1

lifestyle site by engagement
Source: Nielsen, June 2018

Nine.com.au

#2

commercial news site by 
unique users
Source: Nielsen, June 2018

Nine Fix

#2

entertainment website by 
unique users and engagement
Source: Nielsen, June 2018

12

PEDESTRIAN
Towards the end of FY18, Nine acquired 
the outstanding 40% minority interest in 
Pedestrian TV. Pedestrian is Australia’s 
largest youth focussed publishing brand, 
with a monthly reach of more than 
1 million 16-35 year old Australians, a 
notoriously diﬃcult to reach demographic.

Pedestrian has a unique business model 
which ensures that its predominately 
native advertising content is monetisable 
across every platform on which it is 
consumed. Advertisers eﬀectively employ 
Pedestrian to create engaging content 
and distribute that content, with its 
embedded advertising message, across 
both its own platform as well as other 
social media platforms like Facebook, 
Snapchat and Instagram.

Pedestrian’s revenue grew by c50% in 
FY18 while proﬁts close to doubled.

CARADVICE
In September 2016, Nine 
acquired a majority stake 
in CarAdvice, the leading 
publisher of online 
automotive editorial 
content in Australia. This 
acquisition marked an 
expanded presence for 
Nine in one of Australia’s 
largest video advertising 
categories, and provides Nine 
with a unique proposition for its 
automotive advertisers across 
multiple platforms.

CarAdvice and Nine are now 
successfully working to maximise 
share of the automotive market, 
through their collaborative data 
and inventory capabilities.

During FY18, CarAdvice’s 
contribution to revenue for 
the year grew by c40% while 
the EBITDA contribution more 
than doubled.

 NINE ANNUAL REPORT 2018

R
E
V
I
E
W

O
P
E
R
A
T
I
O
N
A
L

Married At First Sight won the early year ratings war, with the 
2018 ﬁnale attracting an average national audience of 2.6m

13

NINE ANNUAL REPORT 2018

REVIEW (CONT)
OPERATIONAL REVIEW (CONT)

STAN
Ownership and control of content is 
key to Nine’s business and Stan is a 
natural ﬁt. Taking premium video content 
into a subscription environment. Stan 
is now clearly the leading local player 
in Subscription Video On Demand with 
more than 1.1 million active subscriptions, 
a number which is growing every month. 
Subscriber engagement is strong with 
year-on-year viewing per subscriber up 
around 25%.

Total Active Subs

1000000

Stan continues to build and ﬁnesse its 
content oﬀering, with around 10,000 
hours now available. Stan has exclusive 
output deals with Showtime, Starz and 
MGM, bringing Australians exclusives 
like Billions, Sherlock, Better Call Saul, 
Younger and Twin Peaks and Stan 
originals such as Wolf Creek, No Activity 
and Romper Stomper. The key to Stan’s 
success has been a world-class line-up 
of international and locally produced 
exclusive content which is refreshed and 
supplemented monthly. It is generally 
diﬀerent content to what audiences love 
about Nine – edgier and often more 
niche in its appeal but nonetheless 
compelling to its viewers. 

As the business is reaching critical 
As the business is reaching critical 
As the business is reaching critical 
As the business is reaching critical 
mass, Stan has introduced tiering of 
mass, Stan has introduced tiering of 
mass, Stan has introduced tiering of 
mass, Stan has introduced tiering of 
mass, Stan has introduced tiering of 
its service to cater for a range of 
its service to cater for a range of 
its service to cater for a range of 
its service to cater for a range of 
its service to cater for a range of 
audience preferences and to enable 
audience preferences and to enable 
audience preferences and to enable 
audience preferences and to enable 
audience preferences and to enable 
greater control of its top line. Revenue 
greater control of its top line. Revenue 
greater control of its top line. Revenue 
growth of 72% in FY18 coupled with cost 
growth of 72% in FY18 coupled with cost 
increases of 23% highlights the leverage 
increases of 23% highlights the leverage 
of the business, and underpinned a 
of the business, and underpinned a 
of the business, and underpinned a 
markedly improving proﬁle of quarterly 
markedly improving proﬁle of quarterly 
markedly improving proﬁle of quarterly 
markedly improving proﬁle of quarterly 
markedly improving proﬁle of quarterly 
operational results. 
operational results. 
operational results. 
operational results. 

Having reached the milestone of 1 million 
Having reached the milestone of 1 million 
Having reached the milestone of 1 million 
Having reached the milestone of 1 million 
subscribers, Stan is increasingly focused 
subscribers, Stan is increasingly focused 
subscribers, Stan is increasingly focused 
on further building its subscriber base, 
on further building its subscriber base, 
oﬀering content providers a compelling 
oﬀering content providers a compelling 
oﬀering content providers a compelling 
route to market and solidifying Stan’s 
route to market and solidifying Stan’s 
route to market and solidifying Stan’s 
route to market and solidifying Stan’s 
long term competitive position.
long term competitive position.
long term competitive position.
long term competitive position.
long term competitive position.

Total Active Subs

0

31-D ec-14

31- M ar-15

30-Jun-15

30-Se p-15

31-D ec-15

31- M ar-16

30-Jun-16

30-Se p-16

31-D ec-16

31- M ar-17

30-Jun-17

30-Se p-17

31-D ec-17

31- M ar-18

30-Jun-18

Billions and Younger, two of Stan’s key 
shows driving active subscriber growth 
of nearly 40% across the year

14

 NINE ANNUAL REPORT 2018
NINE ANNUAL REPORT 2018

R
R
E
E
V
V
I
I
E
E
W
W

O
O
P
P
E
E
R
R
A
A
T
T
I
I
O
O
N
N
A
A
L
L

Nine introduced a range of new formats in season 2017, including 
Nine introduced a range of new formats in season 2017, including 
True Story with Hamish and Andy. This original comedy series 
Andy
Andy. This original comedy series 
True Story with Hamish and Andy. This original comedy series 
wrapped up a ten-episode season with a national average 
wrapped up a ten-episode season with a national average 
audience of almost 1.5m
audience of almost 1.5m

15

NINE ANNUAL REPORT 2018

OPERATIONAL REVIEW (CONT)

PROPOSED MERGER 
WITH FAIRFAX
In July 2018, Nine and Fairfax Media 
entered into a Scheme Implementation 
Agreement under which the companies 
will merge to establish Nine as one of 
Australia’s leading, independent media 
companies. The combined business will 
include Nine’s Free-to-Air television 
network, a portfolio of high growth 
digital businesses including Domain, 
100% of Stan and 9Now, as well as 
Fairfax’s mastheads and radio interests 
through Macquarie Media. 

Further details regarding the proposed 
merger are available with the Scheme 
documentation (released early October). 
Completion, which is anticipated before 
the end of calendar 2018, is subject to a 
number of conditions including approval 
of Fairfax shareholders and the Federal 
courts and no regulatory intervention.

REGULATORY REVIEW
Presently, a regulatory imbalance 
exists within Australia’s media market. 
Incumbent businesses including Nine 
bear a great deal of regulatory 
responsibility including obligations 
to produce local content, restrictions 
on advertising and the classiﬁcation 
of content, while new entrants are 
unencumbered by this type of 
regulation. As the media market rapidly 
changes, Nine welcomes the regulatory 
reviews that are underway. In particular, 
the ACCC’s review of digital platforms, 
the Government’s review of content 
regulations and their review of the 
competitive behaviour of the public 
broadcasters. A great deal of thought 
and resources have gone into Nine’s 
participation in these reviews. Nine 
continues to advocate for meaningful 
reform as a result of these reviews to 
ensure a more level playing ﬁeld into 
the future.

THE FUTURE
The core to all of Nine’s businesses 
is premium content, based broadly 
around the pillars of News, Sport, 
Entertainment and Lifestyle. Over the 
past 12 months, Nine’s strategy has 
focussed on investing in content and in 
the broader distribution of that content. 
As is evidenced in these results, Nine’s 
business has a clear strategy and strong 
operational momentum.

Through linear television, 9Now, Stan 
and Digital Publishing, Nine oﬀers a 
genuine cross platform opportunity for 
monetisation of content. Additionally, 
Nine has been proactive in exploring 
and implementing premium advertising 
opportunities, ensuring closer 
relationship with clients, and the ability 
to maximise returns for both parties. 

Nine’s collection and use of data will 
ensure heightened relevance of the 
advertising message, further improving 
both the eﬃciency and therefore value 
of Nine’s ecosystem.

And with the successful investment in 
sales technology through 9Galaxy, 
Nine has also ensured the ease and 
eﬃciency of delivery of advertising 
for clients. 

Which brings us back to our 
mantra – Create Great Content. 
Distribute it Broadly, Engage 
Audiences and Advertisers.

The ﬁrst season of Australian Ninja 
Warrior was a ratings smash with 
all episodes surpassing 2m viewers

16

 NINE ANNUAL REPORT 2018

R
E
V
I
E
W

O
P
E
R
A
T
I
O
N
A
L

17

NINE ANNUAL REPORT 2018

GOVERNANCE

DIVERSITY AND INCLUSION
At Nine, we know that for us to deliver 
against our strategy, we need to create 
a workplace where our people can 
be their best every day. This means 
creating an environment where diversity 
of thought, background and experience 
as well as gender, sexual orientation, 
age and race is recognised and valued. 
In doing this, we create a vibrant, 
creative organisation that mirrors 
the diversity of our audience and 
our advertisers.

WOMEN @ NINE
We are proud of our gender 
representation, at both Board and 
Senior Executive level and believe that 
this demonstrates our commitment to 
attracting, selecting and developing 
the right people for the right roles, 
regardless of gender. There is always 
more to do however, particularly 
to support the development of our 
women at Nine.

On International Women’s Day in March 
we launched Women @ Nine, a range 
of initiatives for our people centred 
around development through mentoring, 
inspiration and networking. This 
included gifting all of our employees a 
12-month subscription to Future Women, 
Nine’s new subscription site aimed at 
professionals and entrepreneurs. 

In addition, we announced the 9Mentor 
Program, designed to support the 
career progression of women at Nine. 
Two programs were introduced, one 

for women with more than 9 years 
experience in the media industry who 
aspire to leadership roles, and a second, 
9Gen, for those earlier in their career 
wanting support and professional advice 
for important decisions, workplace 
challenges and goal setting. 

We have also introduced Through 
Her Lens, a video and event series 
to showcase the stories behind Nine’s 
leading women and share inspiration 
and knowledge. Commencing in FY19, 
we will host a series of live events, 
each featuring one of our amazing 
women with a look at life through her 
lens. The live event will be streamed 
into other states, enabling all of our 
people to participate, regardless of 
where they are located. We will also 
be publishing a monthly video content 
series with speciﬁc topics covered by 
our business leaders. 

PAY EQUITY
During 2018, we undertook analysis of 
equity in remuneration and incentive 
review outcomes for approximately 
950 salaried employees (primarily 
non-Award covered employees). This 
analysis demonstrated that incentive 
and remuneration outcomes are 
not inﬂuenced by gender. Reviewing 
gender pay equity is something we 
are constantly aware of and we 
continue to ﬁne-tune our approach 
and methodology. Whilst we are of 
the view that we are paying market 
rates for roles regardless of gender, we 
recognise the need to proactively focus 

on ensuring future remuneration reviews 
use the best available market data 
for each role, and that our managers 
are provided with the appropriate 
processes and support to make 
unbiased decisions. 

#MeToo 
FY18 saw the rise around the world of 
the MeToo movement, particularly in 
regards to allegations of inappropriate 
behaviour in the entertainment industry. 
Nine is committed to providing a 
workplace free from bullying or 
harassment of any nature. In response 
to MeToo, we provided current and 
former employees and contractors with 
the opportunity to call an anonymous 
outsourced hotline (provided through 
our Employee Assistance Provider, 
Converge International), to report 
any current or historical allegations 
of bullying or harassment, particularly 
sexual harassment, and receive 
counselling if required. This hotline has 
remained open to our current and 
former employee and contractors; and 
we continue to encourage employees 
to report any allegations of harassment 
through our internal processes. 

DEVELOPING OUR PEOPLE
In FY18, we continued to focus 
eﬀorts on building our leadership 
capability through our Leading @ 
Nine programs. Designed over three 
modules, the program is aimed at the 
introductory or early career leadership 
levels. Almost 300 leaders have now 
completed Modules 1 and 2. In FY19, 

NEC MANAGEMENT

NEC TOTAL EMPLOYEES

NEC BOARD

MALE 62 %
FEMALE 38 %

MALE 58 %
FEMALE 42 %

MALE 50 %
FEMALE 50 %

Source: Workplace Gender Equality Report, 2018

18

 NINE ANNUAL REPORT 2018

G
O
V
E
R
N
A
N
C
E

we will focus on completing the 
ﬁnal module, and ensuring ongoing 
implementation into everyday leadership.

After the successful introduction of the 
Senior Leadership program in the ﬁrst 
half of FY18, we undertook to review 
the program with a view to continuing 
to build our leadership capability 
consistently across Nine. The refreshed 
program has been designed with 
reputable external partners delivering 
a bespoke program tailored to the 
leadership needs at Nine. A second 
cohort of senior leaders (the ﬁrst to 
complete the refreshed program) 
commenced the program in August 
2018. We are committed to building our 
leadership capability, and will conduct 
the senior leader program at least 
annually over the coming years.

ENGAGING OUR PEOPLE
Our people are at the heart of 
everything we do at Nine. We know 
that to engage our audiences and 
advertisers, we need to continue to 
engage our people. 

Across Nine, we have measured the 
engagement of our people in a variety 
of ways across departments. For 
example, our Sales team undertook 
the Media I Industry Survey in May 
2018 which measures both internal and 
external perceptions. The results of this 
survey indicated positive year on year 
growth in every internal measurement, 
with an overall ‘Happiness’ result of 86%. 
This increase in internal results correlated 
strongly with external perceptions from 
agencies, with signiﬁcant growth in 
measures such as proactivity and net 
promoter scores. 

In FY19, we intend to gather further 
employee insight through conducting 
our ﬁrst organisation-wide survey 
to support our continuing build of 
employee engagement.

KEEPING OUR PEOPLE SAFE
During FY18, we engaged Aon Hewett 
to conduct an assessment of Nine’s 
Health and Safety Management System 
based on the Australian self-insurer’s 
standard. The assessment consisted of 
examining a sample of records to assess 
the health and safety standards and 
procedures in place. Observations in the 
workplace and interviews with a sample 
of our people were also conducted 
to gauge the level of implementation 
of those standards and procedures. 
Pleasingly, the assessment did not ﬁnd 
any areas of non-compliance, but found 
both positive aspects of our health and 
management system and opportunities 
for improvement. We have created an 
Action Plan to address these areas 
for continuous improvement, with both 
short and long term objectives, and with 
quarterly reporting to the People and 
Remuneration Committee on progress. 

CORPORATE GOVERNANCE
Nine’s Corporate Governance Statement 
demonstrates the extent to which Nine 
has complied with the ASX’s Corporate 
Governance Council Principles and 
Recommendations and corporate 
governance best practice. 

The Corporate Governance Statement, 
Charters and related corporate 
governance policies are available 
on Nine’s website (http://www.
nineentertainmentco.com.au/investor-
centre).

MEDIA ETHICS AND 
CONTENT REGULATION
As a commercial television licence 
holder, Nine is bound by the Commercial 
Television Code of Practice, which 
prohibits certain types of programs and 
advertisements, requires classiﬁcation 
of program material and broadcasts 
in suitable time slots, and puts limits on 

the amount of advertising and other 
non-programming matter which can be 
broadcast. It also promotes editorial 
accuracy, fairness and protection of 
privacy for individuals in relation to news 
and current aﬀairs. The Commercial 
Television Code of Practice requires 
Nine to ensure advertisers comply with 
the AANA Advertiser Code of Ethics 
and the AANA Code of Advertising and 
Marketing Communications to Children.

Further, Nine’s commercial television 
licences issued under the Broadcasting 
Services Act are subject to conditions 
around speciﬁc matters such as 
advertising of tobacco and interactive 
gambling, obligations to broadcast 
matters of national interest, and 
prohibitions on the broadcast of 
material with certain classiﬁcations.

Nine provides regular training for 
employees on Nine’s obligations under 
the Commercial Television Code of 
Practice and compliance with other 
applicable laws, relating to matters such 
as defamation and contempt of court.

Nine.com.au is a member of the Press 
Council of Australia. The Press Council 
has issued a Statement of General 
Principles, a Statement of Privacy 
Principles and Speciﬁc Principles 
covering matters such as the reporting 
of suicides, which guide the publication 
of content by nine.com.au. As a member 
of the Press Council, nine.com.au must 
cooperate with the Press Council’s 
consideration of complaints against 
it and publish any decisions by the 
Press Council following a complaint 
to nine.com.au.

19

NINE ANNUAL REPORT 2018

NINE CARES

Nine Cares provides a valuable service 
utilising Nine’s network of media assets 
across television, digital and social and 
Nine’s role as a content creator to 
connect communities. Nine’s reach in 
terms of both depth and breadth makes 
it a unique platform for many needy 
individuals and organisations, and Nine 
Cares’ commitment to continuing its role 
in drawing attention to and support for 
some of Australia’s most critical social 
issues remains unwavering. 

In FY18, Nine Cares managed and 
provided almost $30 million of airtime 
for Community Service Announcements 
(CSAs) for community or not-for-proﬁt 
organisations in support of causes 
including the Mates4Mates, St Vincent 
de Paul, the Children’s Tumour 
Foundation, Jeans 4 Genes, the Gidget 
Foundation and the Mark Hughes 
Foundation. Nine Cares is committed 
to providing community groups with 
the ability to connect with the general 
public and maximise the reach and 
understanding of their messages.

During FY18, Nine was again 
instrumental in the raising of almost 
$20 million for the local children’s 
hospitals through telethons in Sydney 
and Brisbane and the Easter Appeal in 
Adelaide. These telethons remain key to 
the hospitals’ annual fundraising eﬀorts, 
with the proceeds used to provide 

$40M IN PUBLICITY 
AND ASSISTANCE

essential equipment, services and 
research. The telethons are televised on 
Nine in their local markets, with many 
of Nine’s key talent volunteering to staﬀ 
the phone lines, further encouraging 
the public’s generosity. 

Nine again joined forces with the 
NRL and the broader rugby league 
community to help fund brain cancer 
research. Through the Beanies for 
Brain Cancer Round 12 in May, the Mark 
Hughes Foundation raised more than 
$4.5 million, helping to fund research 
into a cancer which kills more people 
under 40 in Australia than any other 
cancer and yet receives less than 5% of 
government cancer research funding.

The AFL Footy Show My Room Telethon 
raised $1.1 million for the children’s 
cancer charity, My Room Charity.

A Current Aﬀair serves a signiﬁcant 
community interest by publicising news-
worthy human interest stories. Genuinely 
needy people are provided a forum to 
tell their stories, often with incredible 
outcomes. Donations of money, care 
or essential devices are not uncommon 
as the nightly 1m-plus audiences are 
inspired. A Current Aﬀair also promotes 
the national ACA Christmas hamper 
giveaway where tens of thousands of 
dollars worth of food are donated, 
packed and distributed to hundreds of 
needy families. 

Nine Cares also continues its active 
involvement in communities around 
Australia, sponsoring local council events 
and surf clubs, as well as The Australian 
Maritime Museum, The Adelaide Zoo, 
The Perth City To Surf, the Mater Little 
Miracles Easter Appeal, the Melbourne 
Mothers’ Day Classic, as well as Carols 
by Candlelight across many of the 
Australian capital cities.

Post balance date, Nine joined forces 
with the National Farmers’ Federation 
and Rotary Australia to launch a 
national fundraising drive to support 
drought-aﬀected farming families. The 
2018 Drought Relief Fund was launched 
on Nine’s Today show by hosts Georgie 
Gardner and Karl Stefanovic. 

Nine’s support ensured that the call for 
assistance reached a national audience 
with the Fund promoted across Nine’s 
national programming spanning news, 
sport and entertainment as well as on 
social media and the response was 
overwhelming. Nine’s staﬀ answered 
the phones, while viewers around the 
country opened their hearts and wallets, 
raising an astounding $3,268,449 
in the ﬁrst week, and more than 
$10 million overall.

INCLUDING $29M IN 
CSA AIRTIME (CSA = 
COMMUNITY SERVICE 
ANNOUNCEMENT)

~ALMOST $75M 
RAISED BY 
TELETHONS SINCE 
INCEPTION

Sydney Gold Telethon 2018, 
David Campbell and Ollie 
(the face of the Telethon)

20

 NINE ANNUAL REPORT 2018

I

N
N
E

C
A
R
E
S

21

 
NINE ANNUAL REPORT 2018

BOARD OF DIRECTORS

PETER COSTELLO
(INDEPENDENT NON-
EXECUTIVE CHAIRMAN)

HUGH MARKS
(DIRECTOR AND CHIEF 
EXECUTIVE OFFICER)

DAVID GYNGELL
(NON-EXECUTIVE 
DIRECTOR)

JANETTE KENDALL
(INDEPENDENT NON-
EXECUTIVE DIRECTOR)

Mr Gyngell was the Company’s 
Chief Executive Oﬃcer from 
November 2010 until November 
2015, having previously 
served as the Chief Executive 
Oﬃcer of Nine Network from 
September 2007. Mr Gyngell 
became a Non-Executive 
Director of the Company 
in November 2015. He has 
almost 20 years of experience 
at the Company and over 
25 years overall media 
sector experience. Previously, 
Mr Gyngell was Chief 
Executive Oﬃcer of Granada 
Television and also Director 
of International Management 
Group and Transworld 
Media International. He has 
also worked as Executive 
Director, Group Marketing and 
Communications for Publishing 
& Broadcasting Limited.

Mr Costello was appointed to 
the Board in February 2013 
as an independent, Non-
Executive Director and in 
March 2016 became Chairman 
of the Board. He is also a 
member of the Audit & Risk 
Management Committee. 
Mr Costello is currently 
Chairman of the Board of 
Guardians of Australia’s 
Future Fund and serves on a 
number of advisory boards. 
His business ECG Financial 
Pty Ltd is a boutique advisor 
on mergers and acquisitions, 
foreign investment, competition 
and regulatory issues which 
aﬀect business in Australia. 
Mr Costello served as a 
member of the House of 
Representatives from 1990 
to 2009 and was Treasurer 
of the Commonwealth of 
Australia from March 1996 to 
December 2007.

Prior to entering Parliament 
Mr Costello was a barrister. 
He has a Bachelor of Arts and 
a Bachelor of Laws (Hons) 
and a Doctorate of Laws 
(Honoris Causa) from Monash 
University. In 2011 Mr Costello 
was appointed a Companion 
of the Order of Australia.

Mr Marks was appointed 
Chief Executive Oﬃcer of Nine 
Entertainment Co. in November 
2015. Prior to this, Mr Marks 
had been an independent, 
Non-Executive Director since 
February 2013. Mr Marks has 
over 20 years experience as 
a senior Executive in content 
production and broadcasting 
in Australia and overseas. 
Prior to his appointment as 
CEO, Mr Marks owned talent 
management agency RGM 
Artists and had ownership 
and management interests 
in a number of independent 
companies producing content 
for broadcast and pay TV. 
Before joining the Board, 
Mr Marks was an authority 
member for the Australian 
Communications and Media 
Authority for over two years. 
Previously, Mr Marks was 
Chief Executive Oﬃcer of the 
Southern Star Group. Mr Marks 
has also worked with the Nine 
Network as legal counsel and 
then as Director of Nine Films 
& Television for seven years.

Mr Marks received a Bachelor 
of Commerce and Bachelor 
of Laws from the University of  
New South Wales.

Ms Kendall was appointed 
to the Board in June 2017 
as an independent, Non-
Executive Director and is a 
member of the People & 
Remuneration Committee. 
Ms Kendall has more than 
23 years board experience 
across public, private and 
not-for-proﬁt organisations, 
spanning a range of industries 
including marketing and 
technology, advertising, digital 
media, supermarkets and 
the arts. She is currently a 
Non-Executive Director of 
Costa Group (since October 
2016), Vicinity Centres (since 
December 2017), Wellcom 
Group (since January 2016), 
Placer Property and the 
Melbourne Theatre Company. 
Ms Kendall is a former 
senior executive who has 
held various roles in her 
career including Senior Vice 
President of Marketing at 
Galaxy Entertainment Group 
in Macau, China; Executive 
General Manager of Marketing 
at Crown Melbourne; General 
Manager, Paciﬁc Brands; 
Managing Director of emitch 
Limited; and Executive 
Director of Clemenger BBDO. 
Ms Kendall holds a Bachelor 
of Business — Marketing, and is 
also a Fellow of the Australian 
Institute of Company Directors.

22

 NINE ANNUAL REPORT 2018

I

D
R
E
C
T
O
R
S

B
O
A
R
D
O
F

“Nine has made great 
progress during FY18. 
Growth in audiences 
– on Free To Air TV, 
Broadcast Video on 
Demand, Subscription 
Video on Demand and 
across our broader 
digital publishing assets...”

23

SAMANTHA LEWIS
(INDEPENDENT NON-
EXECUTIVE DIRECTOR)

CATHERINE WEST
(INDEPENDENT NON-
EXECUTIVE DIRECTOR)

Ms West was appointed to 
the Board in May 2016 as an 
Independent, Non-Executive 
Director and is the Chair of 
the People & Remuneration 
Committee and a member of 
the Audit & Risk Management 
Committee. Ms West has 
more than 20 years’ business 
and legal aﬀairs experience 
in the media industry, both 
in Australia and the UK. 
Her most recent executive 
role was Director of Legal 
— Content Commercial and 
Joint Ventures for Sky Plc in 
the UK. In this role, Ms West 
was responsible for all of 
Sky’s content relationships, 
distribution, commercial 
activities and joint ventures. 
Ms West is currently a non-
executive director of Southern 
Phones and a Graduate 
Member of the Australian 
Institute of Company 
Directors and a Vice President 
of the Sydney Breast 
Cancer Foundation at Chris 
O’Brien Lifehouse. 

Ms West holds both a Bachelor 
of Laws (Hons) and Bachelor 
of Economics degree from the 
University of Sydney.

Ms Lewis joined the Board in 
March 2017 as an independent, 
Non-Executive Director and 
is Chair of the Audit & Risk 
Management Committee and 
a member of the People & 
Remuneration Committee. 
Ms Lewis has extensive 
ﬁnancial experience, with 
20 years at Deloitte Touche 
Tohmatsu including 14 years 
as a Partner. In that role, she 
led the audit of a number 
of major Australian listed 
companies, in the retail/FMCG 
and industrial sectors. During 
her time at Deloitte, Ms Lewis 
also provided accounting 
advice and transactional 
advisory services, including 
due diligence, IPOs and debt/
equity raising. Since retiring 
from Deloitte in 2014, Ms Lewis 
has been appointed to the 
Boards of ASX-listed Orora Ltd 
(since March 2014) and Aurizon 
Holdings Ltd (since February 
2015) and is also the Chair 
of the Audit Committee of 
the Australian Prudential 
Regulatory Authority. She is 
a Member of the Institute of 
Chartered Accountants in both 
Australia, and England and 
Wales, and is a Member of the 
Australian Institute of Company 
Directors. 

Ms Lewis holds a Bachelor of 
Arts (Hons) degree from the 
University of Liverpool. 

 
NINE ANNUAL REPORT 2018

DIRECTORS’
REPORT

The Directors present the ﬁnancial report for the year ended 30 June 2018. The ﬁnancial report includes the results of Nine 
Entertainment Co. Holdings Limited (the “Company”) and the entities that it controlled during the year (the “Group”). 

DIRECTORS 
The Directors of the Company at any time during the ﬁnancial year or up to the date of this report were as follows.

Directors held oﬃce for the entire period.

NAME

TITLE

Peter Costello 

Independent Non-Executive Chairman 

Hugh Marks

Chief Executive Oﬃcer 

David Gyngell

Non-Executive Director 

Janette Kendall

Independent Non-Executive Director

Samantha Lewis

Independent Non-Executive Director 

Catherine West

Independent Non-Executive Director 

DATE APPOINTED

6 February 2013

6 February 2013

25 November 2010

5 June 2017

20 March 2017

9 May 2016

Peter Costello (Independent Non-Executive Chairman)
Mr Costello was appointed to the Board in February 2013 as an independent, Non-Executive Director and in March 2016 became 
Chairman of the Board. He is also a member of the Audit & Risk Management Committee. Mr Costello is currently Chairman of the 
Board of Guardians of Australia’s Future Fund and serves on a number of advisory boards. His business ECG Financial Pty Ltd is a 
boutique advisor on mergers and acquisitions, foreign investment, competition and regulatory issues which aﬀect business in Australia. 
Mr Costello served as a member of the House of Representatives from 1990 to 2009 and was Treasurer of the Commonwealth of 
Australia from March 1996 to December 2007.

Prior to entering Parliament Mr Costello was a barrister. He has a Bachelor of Arts and a Bachelor of Laws (Hons) and a Doctorate 
of Laws (Honoris Causa) from Monash University. In 2011 Mr Costello was appointed a Companion of the Order of Australia.

Hugh Marks (Director and Chief Executive Oﬃcer)
Mr Marks was appointed Chief Executive Oﬃcer of Nine Entertainment Co. in November 2015. Prior to this, Mr Marks had been an 
independent, Non-Executive Director since February 2013. Mr Marks has over 20 years experience as a senior Executive in content 
production and broadcasting in Australia and overseas. Prior to his appointment as CEO, Mr Marks owned talent management 
agency RGM Artists and had ownership and management interests in a number of independent companies producing content for 
broadcast and pay TV. Before joining the Board, Mr Marks was an authority member for the Australian Communications and Media 
Authority for over two years. Previously, Mr Marks was Chief Executive Oﬃcer of the Southern Star Group. Mr Marks has also worked 
with the Nine Network as legal counsel and then as Director of Nine Films & Television for seven years.

Mr Marks received a Bachelor of Commerce and Bachelor of Laws from the University of New South Wales.

David Gyngell (Non-Executive Director)
Mr Gyngell was the Company’s Chief Executive Oﬃcer from November 2010 until November 2015, having previously served as the 
Chief Executive Oﬃcer of Nine Network from September 2007. Mr Gyngell became a Non-Executive Director of the Company 
in November 2015. He has almost 20 years of experience at the Company and over 25 years overall media sector experience. 
Previously, Mr Gyngell was Chief Executive Oﬃcer of Granada Television and also Director of International Management Group and 
Transworld Media International. He has also worked as Executive Director, Group Marketing and Communications for Publishing & 
Broadcasting Limited.

Janette Kendall (Independent Non-Executive Director)
Ms Kendall was appointed to the Board in June 2017 as an independent, Non-Executive Director and is a member of the People 
& Remuneration Committee. Ms Kendall has more than 23 years board experience across public, private and not-for-proﬁt 
organisations, spanning a range of industries including marketing and technology, advertising, digital media, supermarkets and the 
arts. She is currently a Non-Executive Director of Costa Group (since October 2016), Vicinity Centres (since December 2017), Wellcom 
Group (since January 2016), Placer Property and the Melbourne Theatre Company. Ms Kendall is a former senior executive who 
has held various roles in her career including Senior Vice President of Marketing at Galaxy Entertainment Group in Macau, China; 

24

I

D
R
E
C
T
O
R
S

’

 NINE ANNUAL REPORT 2018

R
E
P
O
R
T

Executive General Manager of Marketing at Crown Melbourne; General Manager, Paciﬁc Brands; Managing Director of emitch 
Limited; and Executive Director of Clemenger BBDO. Ms Kendall holds a Bachelor of Business — Marketing, and is also a Fellow 
of the Australian Institute of Company Directors. 

Samantha Lewis (Independent Non-Executive Director)
Ms Lewis joined the Board in March 2017 as an independent, Non-Executive Director and is Chair of the Audit & Risk Management 
Committee and a member of the People & Remuneration Committee. Ms Lewis has extensive ﬁnancial experience, with 20 years 
at Deloitte Touche Tohmatsu including 14 years as a Partner. In that role, she led the audit of a number of major Australian listed 
companies, in the retail/FMCG and industrial sectors. During her time at Deloitte, Ms Lewis also provided accounting advice and 
transactional advisory services, including due diligence, IPOs and debt/equity raising. Since retiring from Deloitte in 2014, Ms Lewis 
has been appointed to the Boards of ASX-listed Orora Ltd (since March 2014) and Aurizon Holdings Ltd (since February 2015) 
and is also the Chair of the Audit Committee of the Australian Prudential Regulatory Authority. She is a Member of the Institute of 
Chartered Accountants in both Australia, and England and Wales, and is a Member of the Australian Institute of Company Directors. 

Ms Lewis holds a Bachelor of Arts (Hons) degree from the University of Liverpool. 

Catherine West (Independent Non-Executive Director)
Ms West was appointed to the Board in May 2016 as an Independent, Non-Executive Director and is the Chair of the People & 
Remuneration Committee and a member of the Audit & Risk Management Committee. Ms West has more than 20 years’ business 
and legal aﬀairs experience in the media industry, both in Australia and the UK. Her most recent executive role was Director of 
Legal — Content Commercial and Joint Ventures for Sky Plc in the UK. In this role, Ms West was responsible for all of Sky’s content 
relationships, distribution, commercial activities and joint ventures. Ms West is currently a non-executive director of Southern Phones 
and a Graduate Member of the Australian Institute of Company Directors and a Vice President of the Sydney Breast Cancer 
Foundation at Chris O’Brien Lifehouse. 

Ms West holds both a Bachelor of Laws (Hons) and Bachelor of Economics degree from the University of Sydney.

REMUNERATION REPORT
The Remuneration Report is set out on the pages that follow and forms part of this Directors’ Report.

DIRECTORS’ INTERESTS
The relevant interests of each Director in the equity of the Company and related bodies corporate as at the date of this report are 
disclosed in the Remuneration Report.

DIRECTORS’ MEETINGS 
The number of meetings of Directors (including meetings of committees of Directors) held during the year, and the number of 
meetings attended by each Director, were as follows:

Hugh Marks

Peter Costello

David Gyngell

Janette Kendall 

Samantha Lewis

Catherine West

BOARD

AUDIT & RISK MANAGEMENT 
COMMITTEE

PEOPLE & REMUNERATION 
COMMITTEE

MEETINGS 
HELD*

MEETINGS 
ATTENDED

MEETINGS 
HELD*

MEETINGS 
ATTENDED

MEETINGS 
HELD*

MEETINGS 
ATTENDED

11

11

11

11

11

11

11

11

9

10

11

11

—

4

—

—

4

4

—

4

—

—

4

4

—

4

—

4

4

4

—

4

—

4

4

4

* The number of meetings held refers to the number of meetings held while the Director was a member of the Board or Committee.

25

NINE ANNUAL REPORT 2018

DIRECTORS’
REPORT continued

COMPANY SECRETARY

Rachel Launders (General Counsel and Company Secretary)
Ms Launders was appointed joint Company Secretary on 4 February 2015 and became sole Company Secretary on 29 February 2016. 
Ms Launders holds the role of General Counsel and Company Secretary at the Group. Prior to joining the Group in January 2015, 
Ms Launders was a partner at Gilbert + Tobin for over 13 years where she specialised in mergers and acquisitions, corporate 
governance and compliance.

Ms Launders holds a Bachelor of Arts and Bachelor of Laws (Hons) from the University of Sydney. She also completed the Graduate 
Diploma of Applied Finance and Investment at the Financial Services Institute of Australasia and is a Fellow of the Financial Services 
Institute of Australasia and a graduate of the Australian Institute of Company Directors.

PRINCIPAL ACTIVITIES
The principal activities of the entities within the Group during the year were:
•  Television broadcasting and program production; and
•  Digital, internet, subscription video, and other media sectors.

DIVIDENDS
Nine Entertainment Co. Holdings Limited paid an interim dividend of 5 cents per share, fully franked, in respect of the year ended 
30 June 2018 amounting to $43,537,912 during the year. Since the year end, the Company has proposed a ﬁnal dividend of ﬁve 
cents per share, fully franked, in respect of the year ended 30 June 2018 amounting to $43,557,105.

The Company declared and paid a ﬁnal dividend of 5 cents per share, fully franked, in respect of the year ended 30 June 2017 
amounting to $43,537,908 during the current year. 

CORPORATE INFORMATION
Nine Entertainment Co. Holdings Limited is a company limited by shares that is incorporated and domiciled in Australia. It is the 
parent entity of the Group.

The registered oﬃce of Nine Entertainment Co. Holdings Limited is 24 Artarmon Road, Willoughby NSW 2068.

REVIEW OF OPERATIONS
For the year to 30 June 2018, the Group reported a consolidated net proﬁt after income tax of $209,666,000 
(2017: loss $203,438,000).

The Group’s revenues from operations for the year to 30 June 2018 increased by $158,990,000 (12.8%) to $1,403,945,000 
(2017: $1,244,955,000).

The Group’s earnings before interest, tax, depreciation and amortisation (EBITDA) and before speciﬁc items (Note 1.4) for continuing 
operations for the year ended 30 June 2018 was a proﬁt of $257,237,000 (2017: proﬁt of $205,619,000).

The Group’s cash ﬂows generated in operations for the year to 30 June 2018 were $161,087,000 (2017: used in operations: $4,186,000).

Further information is provided in the Operating and Financial Review on pages 49 to 52.

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
During the year, the Group acquired 80% of Future Women Pty Ltd and the remaining 40% of Pedestrian TV (refer to Note 5.3 for 
further details).

26

I

D
R
E
C
T
O
R
S

’

 NINE ANNUAL REPORT 2018

R
E
P
O
R
T

SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE

NATIONAL PLAYOUT CENTRE
On 1 July 2018, Nine completed the transfer of assets relating to the National Playout Centre, and employment of a number of 
employees, to NPC Media Pty Ltd, a joint venture company owned 50% by each of Nine and Seven Network (Operations) Limited. 
The purchase price payable by NPC Media Pty Ltd reﬂected the written down value of the transferred assets, subject to adjustment 
for leave liabilities assumed by NPC Media Pty Ltd for transferring employees. NPC Media Pty Ltd now provides playout services 
to Nine. 

MERGER WITH FAIRFAX MEDIA 
On 26 July 2018, Nine and Fairfax Media (ASX: FXJ) announced that they had entered into a Scheme Implementation Agreement 
(“the Scheme”) under which the companies will merge. The proposed transaction will, subject to required approvals, be implemented 
by Nine acquiring all Fairfax shares under a Scheme of Arrangement. Under the Scheme of Arrangement, Nine will acquire all of the 
outstanding shares in Fairfax, in return for the issue of 0.3627 shares in Nine and 2.5 cents cash, per Fairfax Share. This will result in 
Nine shareholders holding approximately 51.1% of the expanded capital and Fairfax shareholders holding 48.9%. Further details will be 
announced with the Scheme documentation, expected to be released in October 2018. Nine currently expects that the transaction 
will be completed by December 2018.

Other than noted above, there has not arisen in the interval between the end of the ﬁnancial period and the date of this report 
any item, transaction or event of a material and unusual nature, to aﬀect signiﬁcantly the operations of the consolidated entity, the 
results of those operations, or the state of aﬀairs of the consolidated entity, in future years.

LIKELY DEVELOPMENTS AND EXPECTED RESULTS
Other than the developments described in this report, the Directors are of the opinion that no other matters or circumstance will 
signiﬁcantly aﬀect the operations and expected results of the Group.

UNISSUED SHARES AND OPTIONS
As at the date of this report, there were no unissued ordinary shares or options. There have not been any share options issued 
during the year or subsequent to the year end. 

INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS
During or since the ﬁnancial year, Nine Entertainment Co. Holdings Limited has paid premiums in respect of a contract insuring 
all the Directors and oﬃcers of the parent entity and its controlled entities against costs incurred by them in defending any legal 
proceedings arising out of their conduct while acting in their capacity as Director or oﬃcer of Nine Entertainment Co. Holdings 
Limited or its controlled entities. The insurance contract speciﬁcally prohibits disclosure of the nature of the insurance cover, the 
limit of the aggregate liability and the premiums paid. 

AUDITOR’S INDEPENDENCE DECLARATION
The Directors have received the Auditor’s Independence Declaration, a copy of which is included on page 29.

INDEMNIFICATION OF AUDITORS
To the extent permitted by law, the Company has agreed to indemnify its auditors, Ernst & Young, as part of the terms of its audit 
engagement agreement against claims by third parties arising from the audit (for an unspeciﬁed amount). No payment has been 
made to indemnify Ernst & Young during or since the ﬁnancial year.

NON-AUDIT SERVICES
Details of amounts paid or payable to the auditor for non-audit services provided by the auditor during the year are set out in 
Note 6.3 of the ﬁnancial statements.

The Directors are satisﬁed that the provision of non-audit services is compatible with the general standard of independence for 
auditors imposed by the Corporations Act 2001. The nature and scope of each type of non-audit service provided means that 
auditor independence was not compromised.

27

NINE ANNUAL REPORT 2018

DIRECTORS’
REPORT continued

ROUNDING
The amounts contained in the ﬁnancial statements have been rounded oﬀ to the nearest thousand dollars (where rounding is 
applicable) under the option available to the Group under ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 
2016/191. Nine Entertainment Co. Holdings Limited is an entity to which the Instrument applies.

Signed on behalf of the Directors in accordance with a resolution of the Directors.

Peter Costello 
Chairman 

Sydney, 23 August 2018 

Hugh Marks
Chief Executive Oﬃcer and Director

28

 
AUDITOR’S  INDEPENDENCE
DECLARATION 

 NINE ANNUAL REPORT 2018

D
E
C
L
A
R
A
T
I
O
N

A
U
D
I
T
O
R
S

’

I

N
D
E
P
E
N
D
E
N
C
E

Ernst & Young 
200 George Street 
Sydney  NSW  2000 Australia 
GPO Box 2646 Sydney  NSW  2001 

Tel: +61 2 9248 5555 
Fax: +61 2 9248 5959 
ey.com/au 

Auditor’s Independence Declaration to the Directors of Nine 
Entertainment Co. Holdings Limited 

As lead auditor for the audit of Nine Entertainment Co. Holdings Limited for the financial year ended 
30 June 2018, I declare to the best of my knowledge and belief, there have been: 

a)  no contraventions of the auditor independence requirements of the Corporations Act 2001 in 

relation to the audit; and   

b)  no contraventions of any applicable code of professional conduct in relation to the audit. 

This declaration is in respect of Nine Entertainment Co. Holdings Limited and the entities it controlled 
during the financial year. 

Ernst & Young 

John Robinson 
Partner 
23 August 2018 

A member firm of Ernst & Young Global Limited 

Liability limited by a scheme approved under Professional Standards Legislation 

29

7 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NINE ANNUAL REPORT 2018

REMUNERATION REPORT 
– AUDITED

1  Key Management Personnel 

2  Executive Summary 

2.1  Summary of Executive Remuneration Outcomes 

3  Executive Remuneration 

3.1  Remuneration Principles 
3.2 Approach to Setting Remuneration 
3.3 Remuneration Mix (at target) 
3.4 Fixed Remuneration 
3.5 Short Term Incentive (STI) Plan 
3.6 Long Term Incentive (LTI) Plan 

4  Linking Pay to Performance 

4.1  Impact of NEC’s 2018 performance on remuneration 
4.2 Short Term Incentives (STI) 
4.3 Long Term Incentives (LTI) 

5  Executive Agreements 

6  Remuneration Governance 

6.1  The Board 
6.2 People and Remuneration Committee (PRC) 
6.3 Management 
6.4 Use of Remuneration Consultants 
6.5 Associated Policies 

7  Detailed disclosure of executive remuneration 

7.1  Statutory remuneration disclosures 
7.2  Non-statutory remuneration disclosures 
7.3 Performance Rights and Share Interests of Key Management Personnel 

8  Non-Executive Director (NED) Remuneration Arrangements and detailed disclosures of NED remuneration 

9  Loans to Key Management Personnel and their related parties 

10  Other transactions and balances with Key Management Personnel and their related parties 

32

33  
34

34 
34 
34 
35
35 
35 
37

40 
40
41
41

42

43
43
43
43
43
43

44 
44
45
46

47 

48

48

30

 NINE ANNUAL REPORT 2018

–
A
U
D
I
T
E
D

R
E
M
U
N
E
R
A
T
I
O
N

R
E
P
O
R
T

LETTER FROM COMMITTEE CHAIR 
I am pleased to present the Company’s 2018 Remuneration Report on behalf of the Board. 

Our result reﬂects the strong performance of the business in embracing transformation and delivering to our Group strategy. In 2018, 
the Group continued to build on momentum and delivered signiﬁcant EBITDA growth as well as delivering on strategic objectives 
to drive sustainable growth. During this period, the share price rose from $1.38 to $2.48 and net proﬁt after tax (pre Speciﬁc Items) 
rose 27%. 

Whilst delivering a strong FY18 result, the team has also been focused on setting the business up for a sustainable future, considering 
growth opportunities outside of our traditional revenue streams. This has seen us continue to explore and develop strategic 
opportunities such as joint ventures.

As foreshadowed last year, we made changes to our Short-Term Incentive plan in FY18. These changes included changing the 
Group’s ﬁnancial performance measure to Group EBITDA and upweighting the individual objective metrics (from 25% to 40%). 
Individual objectives included both ﬁnancial and strategic objectives aligned to our long-term strategy. The Board is of the view 
that these changes contributed to our overall Group results through enabling greater accountability for our executives to the 
areas that could make the greatest contribution to our strategy, focusing on driving our core business whilst delivering on business 
transformation initiatives. The FY18 Short-Term Incentive plan outcomes are reﬂective of our strong performance, with diﬀerentiated 
outcomes depending on the Executive KMP scope of accountability, business and performance.

The 2016-2018 Long Term Incentive Plan grant was tested at the conclusion of FY18. The 2016-2018 Long-Term Incentive Plan provided 
targets for Total Shareholder Return (TSR) and Earnings per Share Growth (EPSG). With signiﬁcant increase in the share price 
particularly in FY18, Total Shareholder Return requirements were met, resulting in vesting of 100% of the rights attributable to that 
hurdle. The cumulative EPSG threshold target was also achieved, resulting in vesting of 55.8% of the rights attributable to that hurdle. 
This resulted in participants receiving a total of 77.9% of the maximum possible beneﬁts under the Long-Term Incentive Plan. 

The Board intends to take a considered and measured approach to changes in the remuneration framework over time. We continue 
to review our position on how to ensure alignment of incentives to our longer-term growth areas whilst reducing dependence 
on traded revenues so we can drive sustainable shareholder value. Should we proceed with any changes, we will engage with 
stakeholders to seek their views and understanding of any changes. 

There were no changes this year to either the Board or the Key Management Personnel. 

On behalf of the Board I would like to thank our people for executing Nine’s strategy and delivery of strong performance.

I trust you will ﬁnd this report informative. I encourage you to vote in favour of the report, and welcome any questions at the 
Annual General Meeting. 

Yours faithfully

Catherine West 

Chair of the People and Remuneration Committee

31

 
 
 
NINE ANNUAL REPORT 2018

REMUNERATION REPORT 
– AUDITED continued

1  KEY MANAGEMENT PERSONNEL
The Remuneration Report details the remuneration framework and arrangements for Key Management Personnel (KMP), as set 
out below for the year ended 30 June 2018. KMP are those persons having authority and responsibility for planning, directing and 
controlling the major activities of the Group, directly or indirectly, including any Director (whether Executive or otherwise) of the 
Company. The tables detail movements during the 2018 ﬁnancial year and current KMP and Directors. 

KEY MANAGEMENT PERSONNEL 

NAME

POSITION

TERM 2018

Non-Executive Directors (NEDs)

Peter Costello

David Gyngell

Janette Kendall

Samantha Lewis

Catherine West

Executive Director

Hugh Marks

Other Executive KMP

Greg Barnes

Michael Stephenson

Chairman (independent, Non-Executive) 

Full year

Director (Non-Executive) 

Director (independent Non-Executive)

Director (independent Non-Executive)

Director (independent Non-Executive)

Chief Executive Oﬃcer

Chief Financial Oﬃcer

Chief Sales Oﬃcer

Full year

Full year

Full year

Full year

Full year

Full year

Full year

Former Key Management Personnel

Amanda Laing1

Managing Director 

Ceased to be KMP on 3 July 2017

1.  Amanda Laing resigned eﬀective 3 July 2017.

32

 NINE ANNUAL REPORT 2018

–
A
U
D
I
T
E
D

R
E
M
U
N
E
R
A
T
I
O
N

R
E
P
O
R
T

2  EXECUTIVE SUMMARY
The Table below outlines each component of the remuneration framework, metrics and the link to Group strategic objectives

PERFORMANCE 
MEASURE

Performance and 
delivery of key 
responsibilities as set 
out in the position 
description. 

AT RISK PORTION

LINK TO STRATEGIC OBJECTIVE

Not applicable

COMPONENT

Fixed remuneration 

Salary, non-
monetary beneﬁts 
and statutory 
superannuation.

Further detail in 
section 3.3

Annual short term 
incentive (STI) 

Cash payments 
and deferred shares.

Further detail in 
section 3.4.

Long term 
incentive (LTI) 

Performance rights 
used to align the 
reward of executives 
to the returns 
generated for NEC 
shareholders. 

Further detail in 
section 3.5.

Total Remuneration

Fixed remuneration is set at competitive 
levels to attract and retain high performance 
individuals. 

Other considerations include:
•  Scope of role and responsibility;
•  Capability, experience and competency; 

and 

•  Internal and external benchmarks.
The ﬁnancial measure rewards Group 
performance. The ﬁnancial performance 
measure was chosen because it contributes 
to the determining of dividend outcomes 
and share price performance over time.

Individual measures reﬂect individuals’ 
performance and contribution to the 
achievement of both business unit and 
Group long-term objectives including growth 
of supplementary revenue streams, content 
production and monetisation, audience share 
and talent management.

A portion is paid in cash and a portion (33%) 
delivered as NEC shares deferred for up to 
two years to ensure continued alignment 
to shareholder outcomes and a positive 
impact beyond the performance year of 
the incentive. 

Creates a strong link with the creation of 
shareholder value.

Relative TSR was chosen as it provides an 
external market performance measure having 
regard to S&P/ASX 200 Index companies 
representing Consumer Discretionary, 
Consumer Staples, Information Technology 
and Telecommunication Services.

EPSG was chosen as it aligns with 
shareholder dividends over time. 

Financial measures:

60% — Group Earnings 
Before Interest, Tax, 
Depreciation and 
Amortisation before 
speciﬁc items (EBITDA).

Individual measures:

40% — Individual 
objectives related to 
the KMP’s role and 
responsibilities

Chief Executive 
Oﬃcer:
Target 100% of ﬁxed 
remuneration

Maximum 150% of 
ﬁxed remuneration.

Other Executive 
KMP:
Target 50% of ﬁxed 
remuneration

Maximum 75% of 
ﬁxed remuneration.

50% — Total Shareholder 
Return (TSR) — relative 
to S&P/ASX 200 Index 
companies.

50% — Earnings Per 
Share Growth (EPSG). 

Measured over a 
three-year performance 
period.

Chief Executive 
Oﬃcer: 
100% of ﬁxed 
remuneration.

Other Executive 
KMP: 
50% of ﬁxed 
remuneration.

The remuneration mix is designed to align Executive remuneration and rewards to the creation of long 
term shareholder value. The remuneration of Executive KMP is set on appointment and then reviewed 
annually. We set both ﬁxed remuneration and the total remuneration opportunity by considering factors 
such as experience, competence and performance in the role, competitive market pressures, and 
internal equity with peers.

33

 
 
 
NINE ANNUAL REPORT 2018

REMUNERATION REPORT 
– AUDITED continued

2.1  SUMMARY OF EXECUTIVE REMUNERATION OUTCOMES
The table below is a summary of remuneration outcomes for ﬁnancial year 2018. 

Fixed remuneration

•  During the 2018 ﬁnancial year, no increases were made to CEO or other Executive KMP ﬁxed 

remuneration.

Short-term incentive (STI)

•  At a reported level, pre-speciﬁc items, NEC, and the Television and Digital divisions’ actual 

EBITDA results exceeded STI targets (budget) for the year. 

Long-term Incentive (LTI)

Award vesting

•  The Personal Objectives component of individual STI outcomes was assessed against speciﬁc 

targets and awarded where achieved.

•  LTI grants were made in line with plan rules for Executive KMP in ﬁnancial year 2018.
•  LTI grants made in ﬁnancial year 2016 were tested at 30 June 2018 in line with the plan rules. 
TSR requirements were met, resulting in maximum vesting of this portion of the grant (50% of 
total grant). The cumulative EPSG threshold target was also achieved, resulting in vesting of 
55.8% of this portion of the grant (27.9% of total grant), resulting in a total of 77.9 % of the 
performance rights vesting.

Non-executive director fees

•  The total amount paid to non-executive directors in ﬁnancial year 2018 was $985,000.

3  EXECUTIVE REMUNERATION 

3.1  REMUNERATION PRINCIPLES 
The remuneration framework is designed to attract and retain high performing individuals, align executive reward to NEC’s business 
objectives and to create shareholder value. The remuneration framework reﬂects the Company’s remuneration approach and 
considers industry and market practices and advice from independent external advisers.

The Company’s executive reward structure is designed to:
•  Align rewards to the creation of shareholder value, implementation of business strategy and delivery of results;
•  Implement targeted goals that encourage high performance and establish a clear link between executive remuneration and 

performance, both at Company and individual business unit levels;

•  Attract, retain and motivate high calibre executives for key business roles; 
•  Provide a balance between ﬁxed remuneration and at-risk elements and short- and long-term outcomes that encourages 

appropriate behaviour to provide reward for short-term delivery and long-term sustainability; and

•  Implement an industry competitive remuneration structure.

3.2  APPROACH TO SETTING REMUNERATION
Our Executive KMP reward is designed to support and reinforce the NEC strategy and reward delivery against our objectives 
and returns to shareholders. The Group aims to reward the Chief Executive Oﬃcer and other Executive KMP (Executive KMP) 
with competitive remuneration and beneﬁts based on consideration of all the relevant inputs and provides a mix of remuneration 
(comprising ﬁxed remuneration, short- and long-term incentives) appropriate to their position, responsibilities and performance within 
the Group and aligned with industry and market practice. 

The key components of the remuneration framework for Executive KMP detailed in this remuneration report include ﬁxed 
remuneration and at-risk remuneration. 

•  Fixed remuneration is made up of base salary, non-monetary beneﬁts and superannuation; and
•  At-Risk remuneration is made up of Short Term and Long Term incentives which form the at-risk component of Executive 

KMP remuneration.

The Company reviews remuneration on a periodic and case-by-case basis that considers market data, performance of the 
Company and individual and market conditions. The policy is to position remuneration for Executive KMP principally within a 
competitive range of direct industry peers in light of the small pool of executive talent with appropriate media and entertainment 
industry experience and skills. There is also consideration of other Australian listed companies of a similar size, complexity and 
prominence. Total remuneration at target is positioned at the median of this comparator group, while providing the opportunity 
to earn top quartile rewards for outstanding performance against stretch targets.

34

 NINE ANNUAL REPORT 2018

–
A
U
D
I
T
E
D

R
E
M
U
N
E
R
A
T
I
O
N

R
E
P
O
R
T

The following table summarises the Executive KMP remuneration structure and mix under the Company’s Remuneration Framework. 

3.3  REMUNERATION MIX (AT TARGET)

CHIEF EXECUTIVE OFFICER

FIXED REMUNERATION

SHORT-TERM INCENTIVE

LONG-TERM INCENTIVE

TOTAL AT RISK

33.3%

33.3%

33.3%

Cash  –  67%   Deferred Shares  –  33%

66.6%

OTHER EXECUTIVE KMP

FIXED REMUNERATION

SHORT-TERM INCENTIVE

LONG-TERM INCENTIVE

TOTAL AT RISK

50%

25%

25%

Cash  –  67%   Deferred Shares  –  33%

50%

LONGER TERM FOCUS THROUGH INCENTIVE DEFERRAL
The remuneration mix is structured so that a substantial portion of remuneration is delivered through Deferred STI or LTI. The table 
below shows that remuneration awards to KMPs are earned over a period of up to three years. This ensures that the interests of 
executives are aligned with shareholders and the delivery of the long-term business strategy. 

YEAR 1

Fixed remuneration

STI — cash

LTI — 3 year performance period

YEAR 2

YEAR 3

 STI — deferred shares

STI — deferred shares

3.4  FIXED REMUNERATION
Fixed remuneration represents the amount comprising base salary, non-monetary beneﬁts and superannuation appropriate to the 
Executive KMP’s role. Fixed Remuneration is set at a competitive level to attract and retain talent and considers the scope of the 
role, knowledge and experience of the individual and the internal and external market.

3.5  SHORT TERM INCENTIVE PLAN (STI) PLAN

Purpose and 
overview

STI funding

STI Opportunity
(at target)

•  The STI plan is the annual incentive plan that is used for the Executive KMPs and other Executives. 

The STI plan is designed to align individual performance to the achievement of the business strategy 
and increased shareholder value. 

•  Awards are made annually and are aligned to the attainment of clearly deﬁned Group, business unit 

and individual targets. 

•  The STI plan is subject to annual review by the People and Remuneration Committee (PRC). 
The structure, performance measures and weightings may therefore vary from year to year. 

•  The pool to fund STI rewards is determined by the Group’s ﬁnancial performance before signiﬁcant items. 
•  The STI is weighted 60% to a Group ﬁnancial measure and 40% to individual measures.

% OF FIXED REMUNERATION 

CEO

Other Executive KMP

100

50

35

 
 
 
 
 
 
 
 
 
NINE ANNUAL REPORT 2018

REMUNERATION REPORT 
– AUDITED continued

Group Financial 
Measures

•  Group EBITDA (60% of the STI). 
•  Group EBITDA was chosen to align executive performance with the key drivers of shareholder value 

and reﬂect the short-term performance of the business. 

•  Group Financial performance measures for future years will be determined annually. 
•  Payouts based on ﬁnancial measures are detailed below (pro-rata between bands).

PERFORMANCE AGAINST TARGET

<95%

95%

100%

105%

110%

>115%

% PAYOUT (OF GROUP FINANCIAL COMPONENT)
VS TARGET PAYOUT

Subject to Board consideration

50%

100%

110%

125%

150%

Individual 
measures

•  Executive KMPs are assigned individual objectives based on their speciﬁc area of responsibility. These 

objectives are directly aligned to the Board approved ﬁnancial, operational and strategic objectives and 
include quantitative measures where appropriate. Weightings are assigned to each objective to reﬂect 
their relative importance to delivery of the strategy and required focus. 

•  Individual objectives include audience share, revenue share and supplementary revenue streams, strategic 

growth opportunities, and reduction in operating expenditure.

Payouts based on individual measures are detailed below.

PERFORMANCE ASSESSMENT
BASED ON DELIVERY OF PERSONAL KPIS

% PAYOUT (OF INDIVIDUAL COMPONENT)
VS TARGET PAYOUT

Unsatisfactory

Performance Requires Development

Valued Contribution

Superior Contribution

Exceptional Contribution

Nil

25–75%

75–110%

110–130%

130–150%

Deferred STI 
Payment

•  33% of any STI outcome is deferred into NEC shares (Shares) that vest in two tranches and cannot be 

traded until after they have vested.

•  Any unvested Shares may be forfeited if the executive ceases to be an employee before a vesting date.

The following allocation of any STI payment between cash and Shares applies for ﬁnancial year 2018.

CASH

DEFERRED SHARES

Date Payable/of Vesting

Following results release

1 year following end of 
performance period

2 years following end of 
performance period

Percentage

67%

16.5%

16.5%

36

 NINE ANNUAL REPORT 2018

–
A
U
D
I
T
E
D

R
E
M
U
N
E
R
A
T
I
O
N

R
E
P
O
R
T

Assessment and 
Board discretion

•  The number of Shares subject to deferral is determined by dividing the deferred STI amount (being 33% 
of the STI payable) by the volume weighted average price (VWAP). VWAP is calculated over the period 
commencing 5 trading days before and ending 4 trading days after the performance period results 
release (i.e. over a total period of 10 trading days).

•  The Executive KMP will receive all beneﬁts of holding the Shares in the period before vesting, including 

dividends, capital returns and voting rights. 

•  Shares which have vested can only be traded, within speciﬁed trading windows, consistent with NEC’s 

Securities Trading Policy or any applicable laws (such as the insider trading provisions).

•  The Board has determined that Shares will be acquired on-market to satisfy awards under this 

component of the STI Plan.

•  Actual performance against group ﬁnancial and individual measures is assessed at the end of the 

ﬁnancial year. 

•  In assessing the achievement of group ﬁnancial and individual measures the People and Remuneration 
Committee may exercise its discretion to adjust outcomes for signiﬁcant factors that are considered 
outside the control of management that contribute positively or negatively to results. Adjustments are 
by exception and are not intended to be regular. Any adjustment will require the judgement of the PRC 
and should balance ensuring fair outcomes that reﬂect management’s delivery of ﬁnancial performance, 
with ensuring the outcomes experienced by NEC’s shareholders. They are not intended to deliver an 
advantage or a disadvantage to the incentive outcome. 

•  The Board determines the amount, if any, of the short-term incentive to be paid to each Executive KMP, 

seeking recommendations from the PRC and CEO as appropriate.

•  In exceptional circumstances, individuals may be awarded an STI payment of up to 150% of their target 

STI based on signiﬁcant outperformance of ﬁnancial measures and personal objectives.

3.6  LONG TERM INCENTIVE (LTI) PLAN
The LTI plan involves the annual granting of conditional rights to participants.

Overview

The Long-Term Incentive Plan is an equity incentive plan used to align the Executive KMPs remuneration to 
the returns generated for NEC shareholders. 

Grant Date(s)

The following grants have been issued and remain on foot (or subject to testing against vesting conditions):

1 December 2016 — FY2017 grant

1 December 2017 — FY2018 grant

The nature and structure of each grant is identical (in most respects) and discussed collectively, below.

Consideration

Nil

Performance Rights Performance rights are awarded based on the ﬁxed amount to which the individual is entitled and the 

VWAP. VWAP is calculated over the period commencing 5 trading days before and ending 4 trading days 
after the results release immediately following the start of the performance period (i.e. over a total period 
of 10 trading days).

Upon satisfaction of Vesting Conditions, each Performance Right will, at the Company’s election, convert 
to a Share on a one-for-one basis or entitle the Participant to receive cash to the value of a Share. 
No amount is payable on conversion.

LTI opportunity 
(at target)

CEO

Other Executive KMP 

% OF FIXED REMUNERATION

100

50

37

 
 
 
NINE ANNUAL REPORT 2018

REMUNERATION REPORT 
– AUDITED continued

Performance 
Period

Vesting Dates

The Performance Period for each grant is three ﬁnancial years from the ﬁnancial year of granting. 
For the FY18 grant, the performance period is the three year period from 1 July 2017 to 30 June 2020. 
(Vesting Date).

Subject to the Vesting Conditions and Employment Conditions described below, Performance Rights held by 
each Participant will vest on the Vesting Date (with no opportunity to retest).

Vesting Conditions Performance Rights granted in any one allocation will vest:

•  50% subject to the Company’s TSR performance against S&P/ASX 200 Index companies representing 
Consumer Discretionary, Consumer Staples, Information Technology and Telecommunication Services. 
TSR was chosen as it provides a relative, external market performance measure.

•  50% subject to the achievement of fully diluted EPSG targets as set by the Board over the Performance 
Period. EPSG was chosen as it aligns with shareholder dividends over time and provides a clear focus 
on meeting the earnings expectations delivered to the market.

TOTAL SHAREHOLDER RETURN (TSR)

TSR VESTING SCHEDULE

OUTCOME

Ranked at the 75th percentile or higher

Ranked at the 50th percentile (Threshold)

Ranked below the 50th percentile

EARNINGS PER SHARE GROWTH (EPSG)

EPSG VESTING SCHEDULE

OUTCOME

The EPSG hurdle assesses cumulative growth in EPS as the sum of the annual EPS growth 
relative to actual EPS for the year preceding commencement of the plan. This is calculated 
at the end of each ﬁnancial year over the performance period.

Vesting occurs when:

Cumulative annual growth over the period exceeds the Maximum Vesting Target

Cumulative annual growth over the period exceeds the Threshold 

Cumulative annual growth over the period of less than the Threshold 

VESTING

50%

25%

0%

VESTING

50%

16.5%

0%

The Board may vary the Vesting Conditions for each Plan issue. Vesting is pro-rated if the outcome is 
between the Threshold and Maximum bands.

EPSG hurdles are determined at the issue of each grant with regards to factors including:
•  Internal forecasting estimates taking into account the outlook for the industry including audience viewing, 

advertising revenues and inﬂation

•  Market expectations, including reference to sell-side equity analyst forecasts
•  Recent actual performance
•  Market practice and competitor benchmarking

38

 NINE ANNUAL REPORT 2018

–
A
U
D
I
T
E
D

R
E
M
U
N
E
R
A
T
I
O
N

R
E
P
O
R
T

Due to the nature of these hurdles and the implied outlook for NEC earnings, the PRC and NEC Board has 
determined to disclose these targets upon vesting of any performance rights.

In respect of the FY16 grant, the EPS growth targets were at a Threshold of 1% per annum (being the 
equivalent of 0.8658c growth pooled over the period) and a Maximum Vesting Target of 4.6% per annum 
(equivalent to 4.079c growth pooled over the period). 

The Company achieved 1.957c growth (pooled) over the period, resulting in the partial vesting of the portion 
of the award determined by Earnings per Share. The resulting vesting was 55.8% of the Maximum Vesting 
Target for this portion of the grant (which is 27.9% of the maximum available). The Company also exceeded 
the 75th percentile on the TSR hurdle, resulting in 100% of the performance rights vesting for the portion 
of the award determined by Total Shareholder Return (50% of the maximum available). The total amount 
vested on both performance hurdles was 77.9% of the performance rights available.

Cessation of 
employment

(Employment 
Conditions)

If the Participant is not employed by NEC or any NEC Group member on a particular Vesting Date due to 
the Participant either: 
•  having been summarily dismissed; or
•  having terminated his/her employment agreement otherwise than in accordance with the terms of that 

agreement or, for the FY18 grant, by resigning,

any unvested Performance Rights held on or after the date of termination will lapse.

If the Participant has ceased to be employed by NEC in any other circumstances (e.g. redundancy, 
retirement, ill health), the Participant will retain a time based, pro-rated number of unvested Performance 
Rights determined on a tranche by tranche basis (where the time based proportion of each tranche 
is determined as the length of time from the start of the performance period to the date on which 
employment ceases divided by the total performance period of a particular tranche). 

Any unvested Performance Rights that do not lapse in accordance with the above, remain on foot until 
the relevant Vesting Date. Any vesting at that time will be determined based on Vesting Conditions for those 
Performance Rights being met.

Where vesting occurs during a trading blackout period under the Company’s Securities Trading Policy, any 
Shares issued or transferred to the Participant upon vesting of any Performance Rights will be subject to 
restrictions on disposal from the date of issue (or transfer) of the Shares until the commencement of the 
business day following the end of that blackout period, or such later date that the Board may determine 
under the Company’s Securities Trading Policy.

A Participant may not enter into any arrangement for the purpose of hedging, or otherwise aﬀecting their 
economic exposure to their Performance Rights.

Disposal 
restrictions

Change of control  The Board has the discretion to accelerate vesting of some or all of a Participant’s Performance Rights 
in the event of certain transactions which may result in a change of control of Nine Entertainment Co. 
Holdings Ltd. The discretion will be exercised having regard to all relevant circumstances at the time. 
Unvested Performance Rights will remain in place unless the Board determines to exercise that discretion.

Amendments

To the extent permitted by the ASX Listing Rules, the Board retains the discretion to vary the terms and 
conditions of the Performance Rights Plan. This includes varying the number of Performance Rights or the 
number of Shares to which a Participant is entitled upon a reorganisation of capital of NEC.

Capital Initiatives

The Board will endeavour to amend the terms of any Performance Rights on issue to equitably deal with 
any capital return, share consolidation, share split, such that the value of those rights is not prejudiced. 
The Board’s actions here will be at their sole discretion.

39

 
 
 
NINE ANNUAL REPORT 2018

REMUNERATION REPORT 
– AUDITED continued

4 

LINKING PAY TO PERFORMANCE

4.1  IMPACT OF NEC’S 2018 PERFORMANCE ON REMUNERATION
In 2018, the Group continued to build on momentum and delivered signiﬁcant EBITDA growth, as well as delivering on strategic 
opportunities to drive sustainable growth.

During this period, the share price rose from $1.38 to $2.48. Similarly, Net Proﬁt After Tax (pre-speciﬁc items) rose 27% during the year. 
Accordingly, incentive payments for the ﬁnancial year have increased. 

At the outset of FY18, clear performance objectives were set for Executive KMPs that were critical to the delivery of the FY2018 plan 
and fundamental to the success of the long-term strategy while addressing the ongoing challenges in a dynamic and competitive 
operating environment. The successful achievement of these objectives has contributed signiﬁcantly to our Group results in 2018. 

Detailed assessments of the Executive KMP performance were prepared by the CEO and discussed with the PRC. The Board and 
the PRC believe that the performance in FY2018 has been appropriately reﬂected in the Short-Term Incentive outcomes. 

The link between Executive KMP remuneration and Group ﬁnancial performance is set out below. 

30 JUNE 18
$m

30 JUNE 17
$m

30 JUNE 16
$m

1,403.9

257.2

18%

218.2

156.7

1,244.9

205.6

17%

164.7

123.6

1,286.4

201.7

16%

164.1

118.6

18.0 cents

14.0 cents

13.5 cents

30 JUNE 18
Cents/Share

30 JUNE 17
Cents/Share

30 JUNE 16
Cents/Share

138

248

10

105

138

9.5

155

105

12

30 JUNE 18

30 JUNE 17

30 JUNE 16

129.2% 

—

94.2%

5.8%

19%

81%

Revenue

Group EBITDA

Group EBITDA %

Net proﬁt before tax and speciﬁc items

Net proﬁt after tax before speciﬁc items

Earnings per share — cents

Opening share price

Closing share price

Dividend

EXECUTIVE KMP STI PAYMENTS

Earned

Forfeited (at target)

40

 NINE ANNUAL REPORT 2018

–
A
U
D
I
T
E
D

R
E
M
U
N
E
R
A
T
I
O
N

R
E
P
O
R
T

4.2  SHORT TERM INCENTIVES (STI)
In FY2018, the Group ﬁnancial STI targets were aligned with the delivery of budgeted Group EBITDA. Individual measurable 
performance objectives were determined on an individual-by-individual basis based on their respective delivery of key operational 
and strategic objectives of the Group, as determined by the Company’s Board. 

Each Executive KMP has a target opportunity speciﬁed in their contract. The FY18 target for the CEO was 100% of ﬁxed 
remuneration. For the other Executive KMP it was 50% of ﬁxed remuneration. The maximum award an individual can earn is 150% 
of their respective target opportunity.

The proportions of target and maximum STI that were earned and forfeited by each Executive KMP in relation to the current 
ﬁnancial year are set out below:

NAME

Hugh Marks

Greg Barnes

Michael Stephenson

FORMER KEY MANAGEMENT PERSONNEL

Amanda Laing

PROPORTION OF
TARGET STI (%)

PROPORTION OF
MAXIMUM STI (%)

EARNED % FORFEITED %

EARNED % FORFEITED %

FY18

FY17

FY18

FY17

FY18

FY17

FY18

FY17

136.1%

95.9%

100.0%

95.9%

137.0%

83.5%

—

95.9%

0.0%

4.1%

0.0%

4.1%

0.0%

16.5%

—

4.1%

90.7%

69.7%

67.7%

69.7%

91.3%

60.7   %

9.3%

30.3%

33.3%

30.3%

8.7%

39.3%

— 

—

69.7%

30.3 %

In accordance with the share deferral component of the STI plan, 33% of the 2018 ﬁnancial year STI payments earned by current 
Executive KMP, at 30 June 2018, will be provided as shares in accordance with that plan, as described in section 3.5. The balance of 
the STI payable will be paid in cash following the release of the Company’s 2018 ﬁnancial results. 

4.3  LONG TERM INCENTIVES (LTI)

GRANT DATE

29 January 2016

TEST DATE

30 June 2018

1 December 2016

30 June 2019

1 December 2017

30 June 2020

PERFORMANCE HURDLES
•  50% — Total Shareholder Return 
•  50% — Earnings Per Share Growth 
•  50% — Total Shareholder Return 
•  50% — Earnings Per Share Growth 
•  50% — Total Shareholder Return 
•  50% — Earnings Per Share Growth 

VESTING OUTCOME 
(%)

77.9%

NA

NA

41

 
 
 
 
 
NINE ANNUAL REPORT 2018

REMUNERATION REPORT 
– AUDITED continued

The performance period of the FY16 Long Term Incentive Plan commenced on 1 July 2015 and concluded on 30 June 2018. 
Performance was assessed at the conclusion of the FY18 year, and as a result of performance over the three-year period, the Total 
Shareholder return achieved the requirements for maximum vesting. The Company’s three year Earnings per Share growth resulted 
in partial vesting of the portion of the award determined by Earnings per share. The resulting vesting was 55.8% of target (which is 
27.9% of the maximum available).

GRANT 

PERFORMANCE 
PERIOD

PERFORMANCE 
MEASURE

WEIGHTING

TARGET

STRETCH

FY16

1 July 2015 to 
30 June 2018

EPS

50%

1% pa
(0.8658c growth 
pooled)

4.6% pa
(4.079c growth 
pooled)

ACTUAL 
PERFORMANCE

PERFORMANCE 
ACHIEVED

1.957c

55.8%

TSR

Total

50%

100%

50th percentile 75th percentile > 75th percentile

n/a

n/a

100%

77.9%

5  EXECUTIVE AGREEMENTS
Each Executive KMP has a formal employment agreement. Each of these employment agreements, which are of a continuing nature 
and have no ﬁxed term, provide for the payment of ﬁxed and performance-based remuneration, superannuation and other beneﬁts 
such as statutory leave entitlements.

There were no changes to the key terms of the Executive KMP contracts in ﬁnancial year 2018. The key terms of Executive KMP 
contracts at 30 June 2018 were as follows: 

Hugh Marks2

Greg Barnes2

Michael Stephenson2

FIXED
REMUNERATION1

TARGET STI

NOTICE 
PERIOD BY 
EXECUTIVE

NOTICE 
PERIOD BY 
COMPANY

RESTRAINT

$1,400,000

$1,400,000

12 months

12 months

12 months

$850,000

$425,000

12 months

12 months

12 months

$730,000

$365,000

12 months

12 months

12 months

1.   Fixed Remuneration comprises base cash remuneration, superannuation and other beneﬁts which can be sacriﬁced for cash at the 

employee’s election. 

2. KMP are entitled to participate in a long-term incentive plan, as discussed separately in this report. 

42

 NINE ANNUAL REPORT 2018

–
A
U
D
I
T
E
D

R
E
M
U
N
E
R
A
T
I
O
N

R
E
P
O
R
T

6  REMUNERATION GOVERNANCE 

6.1  THE BOARD 
The Board approves the remuneration arrangements of the Chief Executive Oﬃcer (CEO) and other key executives and awards 
made under short-term incentive (STI) and long-term incentive (LTI) plans, following recommendations from the PRC. The Board also 
sets the remuneration levels of Non-Executive Directors (NEDs), subject to the aggregate pool limit approved by shareholders. 

6.2  THE PEOPLE AND REMUNERATION COMMITTEE (PRC)
The PRC assists the Board in fulﬁlling its responsibilities for corporate governance and oversight of NEC’s human resources policies 
and practices and workplace health and safety (WHS) management. The PRC’s goal is to ensure that NEC attracts the industry’s best 
talent, appropriately align their interests with those of key stakeholders, comply with WHS obligations and eﬀectively manage WHS risks. 

The PRC makes recommendations to the Board on CEO and Non-Executive Director remuneration. The PRC approves the executive 
reward strategy, and incentive plans and provides oversight of management’s implementation of approved arrangements. 

Details of the membership, number and attendance at meetings held by the PRC are set out on page 25 of the Directors’ Report. 

Further information on the PRC’s role, responsibilities and membership is included in the committee charter which is available at 
www.nineentertainmentco.com.au.

6.3  MANAGEMENT
Management prepares recommendations and information for the PRC’s consideration and approval. Management also implements 
the approved remuneration arrangements. 

6.4  USE OF REMUNERATION CONSULTANTS
From time to time, the PRC seeks external independent remuneration advice. Remuneration consultants are engaged by, and report 
directly to, the Committee. In selecting a remuneration consultant, the Committee considers potential conﬂicts of interest and requires 
the consultant’s independence from management as part of their terms of engagement.

Where the consultant’s engagement requires a remuneration recommendation, the recommendation is provided to the Chair of the 
PRC to ensure management cannot unduly inﬂuence the outcome.

The Company has engaged the services of PricewaterhouseCoopers (PwC) as the Company’s remuneration advisor during the 2018 
ﬁnancial year. In the current ﬁnancial year PwC did not provide the PRC with any remuneration recommendations. The PRC was 
also provided with information on market trends to assist the Committee with policy development and other strategic advice. 

6.5  ASSOCIATED POLICIES
The Company has established a number of policies to support reward and governance, including the Code of Conduct, Disclosure 
Policy and Securities Trading Policy. These policies have been implemented to promote ethical behaviour and responsible decision 
making. These policies are available on Nine’s website www.nineentertainmentco.com.au.

43

 
 
 
NINE ANNUAL REPORT 2018

REMUNERATION REPORT 
– AUDITED continued

8
6

5
5

0
5

1
2

7
4

4
3

—

3
2

—

4
7
0
2
1
1
,
1

,

,

0
0
4
8
1
4
,
1

—

—

—

,

5
0
6
0
5
4
4

,

,

4
3
3
9
9
1
,
3

—

—

,

0
9
9
5
3
1
,
1

,

7
6
6
4
3
6

0
4
6
4
2
4

,

3
1
6
7,
4
4

4
5
1
,
2
7
6
,
1

—

,

3
7
3
3
0
4

7
4
7
,
1
4
1

,

0
4
2
4
5
3
2

,

,

1
0
5
3
8
9

1
6
8
4
8

,

3
8
8
5
3
1

,

—

—

—

—

—

7
4
5
7,
6
1

3
9
7
6
6
1

,

1
8
8
2
7

,

4
3
5
,
1
0
1

5
1
3
2

,

9
5
1
,
1
4
5
7,

—

,

0
1
9
6
0
7
,
1

,

7
0
2
3
4
9

—

,

9
7
9
3
9
3
2

,

0
0
0
0
5
9

,

5
9
9
6
3
1

,

—

—

—

9
1
5
8
4

,

—

—

—

—

9
5
8
9

,

9
3
8
,
1
1

—

5
6
1
,
4
1

9
5
8
9

,

5
1
6
0
1

,

5
5
8
,
1
3

6
1
6
9
1

,

9
4
0
0
2

,

)
4
8
3
6
(

,

9
4
0
0
2

,

2
3
1
,
5
3

6
1
6
9
1

,

2
2
9
0
1

,

9
4
0
0
2

,

)

3
6
5
9

,

(

6
1
6
9
1

,

—

—

—

—

—

—

—

—

—

,

7
2
6
9
5
0
9

,

,

1
0
5
3
3
9
,
1

6
7
3
9
1
7

,

0
3
0
5
8
6

,

4
3
8
0
5

,

4
0
0
6
2

,

6
8
3
8

,

)
8
3
0
9
4

,

(

3
5
1
,
5
1

6
1
6
9
1

,

7
4
1
,
0
6

2
6
4
8
7

,

6
1
8
6

,

7
0
9
6
1
4

,

0
0
0
0
5
8

,

7
1
Y
F

—

,

5
1
4
6
8
8
,
1

6
1
8
6

,

,

7
6
9
6
8
7
,
1

,

8
6
4
9
1
9
2

,

,

0
5
2
4
6
7
3

,

8
1
Y
F

7
1
Y
F

—

—

8
1
Y
F

,

6
2
2
5
9
8

,

4
8
3
0
8
3
,
1

7
1
Y
F

,

3
3
3
9
6
2
,
1

,

1
5
9
9
7
3
,
1

8
1
Y
F

s
k
r
a
M
h
g
u
H

r
o
t
c
e
r
i
D

e
v
i
t
u
c
e
x
E

5
6
7
,
1
7
2

2
8
4
3
2
8

,

7
1
Y
F

5
9
4
3
8
2

,

,

4
7
8
9
2
8

8
1
Y
F

s
e
n
r
a
B

g
e
r
G

,

7
8
5
3
3
3

3
4
6
9
0
7

,

8
1
Y
F

8
6
0
3
0
2

,

4
8
3
0
1
7

,

7
1
Y
F

n
o
s
n
e
h
p
e
t
S

l

e
a
h
c
M

i

P
M
K

e
v
i
t
u
c
e
x
E

r
e
m
r
o
F

P
M
K

r
e
h
t
O

a
d
n
a
m
A

3
g
n
a
L

i

e
v
i
t
u
c
e
x
E

l

a
t
o
T

P
M
K

s
e
t
o
N

,

s
r
a
e
y

o
w

t

t
x
e
n

e
h
t

r
e
v
o

s
e
h
c
n
a
r
t

l

a
u
q
e

o
w

t

n

i

d
e
l
t
t
e
s

e
b

l
l
i

w

i

s
h
T

.

s
e
r
a
h
s

e
n
N

i

n

i

d
e
r
r
e
f
e
d

t
u
b

r
a
e
y

l

i

a
c
n
a
n
ﬁ

e
h
t

o

t

n
o

i
t

l

a
e
r

n

i

d
e
d
r
a
w
a

I

T
S

o

t

s
e
t
a
e
r

l

I

T
S

d
e
r
r
e
f
e
 D

.

4

.

7
1
0
2

e
n
u
J

0
3

d
e
d
n
e

r
a
e
y

e
h
t

n

i

e
m
o
c
n

I

i

e
v
s
n
e
h
e
r
p
m
o
C

r
e
h
t
O

d
n
a

s
s
o
L

r
o

t
ﬁ
o
r
P

f
o

t
n
e
m
e
t
a
t
S

e
h
t

n

i

d
e
t
c
e
ﬂ
e
r

s
t
s
o
c

h
t
i

w

,

7
1
0
2

l

y
u
J

3

e
v
i
t
c
e
ﬀ
e

d
e
n
g
s
e
r

i

g
n
a
L

i

A

.

3

.
t
n
e
m
y
o
p
m
e

l

f
o

y
t
i
u
n
i
t
n
o
c

i

g
n
m
u
s
s
a

.

d
e
u
r
c
c
a

t

a
h
t

s
d
e
e
c
x
e

r
a
e
y

e
h
t

n

i

n
e
k
a

t

e
v
a
e

l

l

a
u
n
n
a

’

s
P
M
K

e
h
t

e
r
e
h
w

e
v
i
t

a
g
e
n

e
b

y
a
m

s
t
n
u
o
m
A

.
1

.

6
3

.

n
o

i
t
c
e
s

n

i

d
e
n

i
l
t
u
o

e
r
a

n
a
P

l

e
v
i
t
n
e
c
n

I

m
r
e
T

g
n
o
L

e
h
t

f
o

s

l
i

a
t
e
D

.

2

N
G
I
S

D
N
A
N
O

D %
E
T
A
L
E
R

L $
A
T
O
T

S $
T
N
E
M
Y
A
P

2 $
S
E
V
I
T
N
E
C
N

I

4 $
I
T
S

E
C
N
A
M
R
O
F
R
E
P

N
O
I
T
A
N
M
R
E
T

I

M
R
E
T
G
N
O
L

D
E
R
R
E
F
E
D

E
R
A
H
S

S $
T
H
G
R

I

O
P
I
-
E
R
P

E $
V
A
E
L

G
N
O
L

I

E
C
V
R
E
S

L
A
U
N
N
A

-
R
E
P
U
S

1 $
E
V
A
E
L

$

N
O
I
T
A
U
N
N
A

H
S
A
C

O
P
I
-
E
R
P

D
E
T
A
L
E
R

S $
E
V
I
T
N
E
C
N

I

H
S
A
C

S $
U
N
O
B

Y
R
A
L
A
S

S $
E
E
F

D
N
A

S
T
N
E
M
Y
A
P

D
E
S
A
B
-
E
R
A
H
S

S
T
I
F
E
N
E
B
M
R
E
T
G
N
O
L

S
T
I
F
E
N
E
B

S
T
I
F
E
N
E
B
M
R
E
T
T
R
O
H
S

-
T
S
O
P

T
N
E
M
Y
O
L
P
M
E

N
O
I
T
A
R
E
N
U
M
E
R

P
M
K

8
1
0
2

S
E
M
O
C
T
U
O

s
t
n
e
m
e
r
i
u
q
e
r

e
r
u
s
o
c
s
d

i

l

y
r
o
t
u
t
a
t
s

h
t
i

w

e
c
n
a
d
r
o
c
c
a

n

i

l

e
b
a

t

i

g
n
w
o

l
l

o
f

e
h
t

n

i

t
u
o

t
e
s

e
r
a

8
1
0
2

e
n
u
J

0
3

d
e
d
n
e

r
a
e
y

e
h
t

r
o
f

s
e
v
i
t
u
c
e
x
e

e
h
t

f
o

n
o

i
t

a
r
e
n
u
m
e
r

e
h
t

f
o

s

l
i

a
t
e
D

N
O
I
T
A
R
E
N
U
M
E
R

E
V
I
T
U
C
E
X
E

F
O
E
R
U
S
O
L
C
S
I
D
D
E
L
I
A
T
E
D

S
E
R
U
S
O
L
C
S
I
D

N
O
I
T
A
R
E
N
U
M
E
R
Y
R
O
T
U
T
A
T
S

7

1
.
7

44

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
e
b

o

t

d
e
r
e
d
s
n
o
c

i

s

i

n
o

i
t

a
m
r
o
f
n

i

i

s
h
T

.

w
o
e
b

l

l

e
b
a

t

e
h
t

n

i

t
u
o

t
e
s

s

i

)
”
8
1
Y
F
“
(

8
1
0
2

e
n
u
J

0
3

d
e
d
n
e

r
a
e
y

e
h
t

n

i

s
e
v
i
t
u
c
e
x
e

t
n
e
r
r
u
c

y
b

d
e
n
r
a
e

n
o

i
t

a
r
e
n
u
m
e
r

l

a
u
t
c
a

e
h
T

S
E
R
U
S
O
L
C
S
I
D

N
O
I
T
A
R
E
N
U
M
E
R
Y
R
O
T
U
T
A
T
S
-
N
O
N

2
7

.

8
1
Y
F

e
h
t

o

t

g
n
i
t

l

a
e
r

s
t
n
e
m
y
a
p

d
e
s
o
p
o
r
p

e
h
t

s
e
d
u
c
n

l

i

t
I

.

8
1
Y
F

n

i

s
e
v
i
t
u
c
e
x
e

’

s
y
n
a
p
m
o
C

e
h
t

y
b

i

d
e
v
e
c
e
r

y

l
l

a
u
t
c
a

n
o

i
t

a
r
e
n
u
m
e
r

e
h
t

f
o

s

l
i

a
t
e
d

i

s
e
d
v
o
r
p

t
i

s
a

t
n
a
v
e
e
r

l

r
a
e
y

e
h
t

g
n
i
r
u
d

d
e
t
s
e
v

e
v
a
h

i

h
c
h
w

s
I
T
L

l

y
n
O

.

s
t
n
e
m
e
e

l

s
e
r
a
h
s

d
e
r
r
e
f
e
d

d
n
a

h
s
a
c

e
h
t

h
t
o
b

e
d
u
c
n

l

i

s
t
n
u
o
m
a

I

T
S

1

9.
Y
F

n

i

i

d
e
v
e
c
e
r

e
b

l
l
i

w

t
n
e
m
y
a
p

t
i
e
b
a

l

,

n
a
p

l

I

T
S

N
O
I
T
A
R
E
N
U
M
E
R

I
T
L
O
P
I
-
E
R
P

y
a
m

r
o

y
a
m
h
c
h
w

i

I

T
L

r
o
f

l

e
u
a
v

a

s
e
d
u
c
n

l

i

1

7.

n
o

i
t
c
e
s

n

i

l

e
b
a

t

E
H
T
N

I

D
E
T
S
E
V

M
R
E
T
-
G
N
O
L

e
h
t

e
s
u
a
c
e
b

y

l
l

i

a
p
c
n
i
r
p

1

7.

n
o

i
t
c
e
s

n

i

-
A
R
E
N
U
M
E
R

H
S
A
C
D
N
A

R
E
H
T
O

Y
R
A
L
A
S
D
E
X
I
F

R $
A
E
Y

4 $
S
E
V
I
T
N
E
C
N

I

5 $
I
T
S
D
E
R
R
E
F
E
D

2 $
N
O
I
T

S $
U
N
O
B

1 $
S
U
N
O
B

H
S
A
C

e
r
u
s
o
c
s
d

i

l

y
r
o
t
u
t
a
t
s

e
h
t

m
o
r
f

s
r
e
ﬀ
d

i

l

e
b
a

t

e
h
T

.

d
e
d
u
c
n

l

i

e
r
a

Y
R
A
L
A
S

S $
E
E
F

D
N
A

.

s
r
a
e
y

e
r
u
t
u
f

n

i

t
s
e
v

t

o
n

8 $
1
0
2

R
O
F

”
D
E
N
R
A
E
“

N
O
N
G
I
S

S $
T
N
E
M
Y
A
P

,

9
6
8
2
2
0
5

,

,

5
9
6
4
7
7
2

,

,

1
3
6
4
2
0
2

,

—

—

—

,

3
5
8
0
5
2
,
1

,

4
4
5
3
5
0
,
1

,

3
5
3
8
9
2
8

,

—

—

—

,

8
8
3
3
0
1
,
2

0
1
5
7,
1
8

—

—

—

—

—

—

7
6
6
6
1

,

7
2
6
,
1
3
9
5

,

0
1
5
7,
1
8

7
6
6
6
1

,

—

0
3
0
5
8
6

,

—

3
1
6
7,
4
4

2
7
4
,
1
5

,

4
5
2
8
0
7
,
1

,

7
6
6
4
3
6

4
6
6
0
3

,

,

0
1
6
5
7
2
2

,

,

4
8
2
9
4
6
2

,

,

3
3
3
9
6
2
,
1

,

1
5
9
9
7
3
,
1

,

6
2
2
5
9
8

,

4
8
3
0
8
3
,
1

8
1
Y
F

7
1
Y
F

s
k
r
a
M
h
g
u
H

l

e
n
n
o
s
r
e
P

t
n
e
m
e
g
a
n
a
M
y
e
K

r
e
h
t
O

r
o
t
c
e
r
i
D

e
v
i
t
u
c
e
x
E

—

—

—

0
5
8
5
5
7

,

7
4
7
,
1
4
1

3
8
8
5
3
1

,

3
9
7
6
6
1

,

4
3
5
,
1
0
1

4
0
1
,
4
6
4
2

,

,

7
0
2
3
4
9

5
6
6
3
1

,

8
4
7
4
5

,

,

9
6
3
3
1
1
,
1

5
9
4
3
8
2

,

,

7
4
2
5
9
0
,
1

5
6
7
,
1
7
2

,

4
7
8
9
2
8

2
8
4
3
2
8

,

0
3
8
0
4

,

,

0
3
2
3
4
0
,
1

,

7
8
5
3
3
3

3
4
6
9
0
7

,

1
9
8
,
1
2

9
5
1
,
5
8

1
1
1
,
8
2
1

2
5
4
3
1
9

,

8
6
0
3
0
2

,

4
8
3
0
1
7

,

,

3
8
8
5
0
8
4

,

,

9
0
3
4
8
2
4

,

,

5
1
4
6
8
8
,
1

,

9
5
0
0
7
3
,
1

,

8
6
4
9
1
9
2

,

,

0
5
2
4
1
9
2

,

8
1
Y
F

3
7
1
Y
F

8
1
Y
F

7
1
Y
F

8
1
Y
F

7
1
Y
F

s
e
n
r
a
B

g
e
r
G

n
o
s
n
e
h
p
e
t
S

l

e
a
h
c
M

i

e
v
i
t
u
c
e
x
E

l

a
t
o
T

P
M
K

s
e
t
o
N

 NINE ANNUAL REPORT 2018

–
A
U
D
I
T
E
D

R
E
M
U
N
E
R
A
T
I
O
N

R
E
P
O
R
T

,

s
r
a
e
y

o
w

t

t
x
e
n

e
h
t

r
e
v
o

s
e
h
c
n
a
r
t

l

a
u
q
e

o
w

t

n

i

d
e
l
t
t
e
s

e
b

l
l
i

w

i

s
h
T

.

s
e
r
a
h
s

e
n
N

i

n

i

d
e
r
r
e
f
e
d

t
u
b

r
a
e
y

l

i

a
c
n
a
n
ﬁ

e
h
t

o

t

n
o

i
t

l

a
e
r

n

i

d
e
d
r
a
w
a

I

T
S

o

t

s
e
t
a
e
r

l

I

T
S

d
e
r
r
e
f
e
 D

.

5

.
t
n
e
m
y
o
p
m
e

l

f
o

y
t
i
u
n
i
t
n
o
c

i

g
n
m
u
s
s
a

45

’

s
P
M
K

e
h
t

e
r
e
h
w

e
v
i
t

a
g
e
n

e
b

y
a
m

s
e
u
a
v

l

e
h
T

.

s
e
c
n
a
a
b

l

e
v
a
e

l

i

e
c
v
r
e
s

g
n
o

l

d
n
a

e
v
a
e

l

l

a
u
n
n
a

n

i

t
n
e
m
e
v
o
m
d
n
a

n
o

i
t

a
u
n
n
a
r
e
p
u
s

o

t

s
e
t
a
e
r

l

n
o

i
t

a
r
e
n
u
m
e
r

r
e
h
t
 O

.

2

.

d
e
d
u
c
n

l

i

t

o
n

e
r
a

d
e
t
n
a
r
g

s
t
h
g
i
r

e
r
a
h
s

I

T
L

.

s
e
r
a
h
s

d
n
a

h
s
a
c

s
e
d
u
c
n

l

i

t
n
e
m
y
a
p

n
o

n
g
s

i

s
e
n
r
a
B

G

.

3

.

d
e
u
r
c
c
a

t

a
h
t

s
d
e
e
c
x
e

r
a
e
y

e
h
t

n

i

n
e
k
a

t

e
v
a
e

l

l

a
u
n
n
a

s
a
h

s
t
h
g
R

i

e
s
e
h
t

o

t

d
e
t
u
b
i
r
t
t

a

e
u
a
v

l

e
h
T

.

8
1
0
2

e
n
u
J

0
3

o

t

p
u

e
c
n
a
m
r
o
f
r
e
p

n
o

d
e
s
a
b

d
e
r
u
s
a
e
m
e
r
e
w

i

h
c
h
w

t
u
b

8
1
0
2

e
n
u
J

0
3

o

t

t
n
e
u
q
e
s
b
u
s

d
e
t
s
e
v

i

h
c
h
w

s
t
h
g
 R

i

.

4

.
I

T
S

s
a

h
c
u
s

s
t
ﬁ
e
n
e
b

h
s
a
c

s
e
d
u
c
n

l

i

s
u
n
o
b

h
s
a
C

.
1

.

g
n
i
t
s
e
v

n
o

e
u
a
v

l

h
s
a
c

e
h
t

f
o

n
o

i
t

i

a
m
x
o
r
p
p
a

n
a

s
a

8
1
0
2

t
s
u
g
u
A

4
1

t

a

s
a

e
c
i
r
p

e
r
a
h
s

e
h
t

n
o

d
e
s
a
b

l

d
e
t
a
u
c
a
c

l

n
e
e
b

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NINE ANNUAL REPORT 2018

REMUNERATION REPORT 
– AUDITED continued

7.3  PERFORMANCE RIGHTS AND SHARE INTERESTS OF KEY MANAGEMENT PERSONNEL
The number of Performance Rights granted to Executive KMP as remuneration, the number vested during the year and the number 
outstanding at the end of the year are shown below. 

Performance Rights do not carry any voting or dividend rights and can be exercised once the vesting conditions have been met..

SHARE RIGHTS 
OUTSTANDING 
AT START
OF YEAR
NO.

SHARE
RIGHTS 
GRANTED
IN YEAR
NO.

FAIR VALUE 
PER SHARE 
RIGHT AT 
AWARD DATE
$

AWARD
DATE

VESTING
DATE

VESTED1
NO.

CASH
SETTLED 
DURING
THE YEAR
NO.

LAPSED 
DURING
THE YEAR
NO.

SHARE RIGHTS 
OUTSTANDING 
AT END 
OF YEAR
NO.

Executive Director

Hugh Marks

 906,149 

 1,372,549 

 — 

 — 

11 Nov 15

1 Dec 16

 958,904 

1 Dec 17

Other Executive KMP

Greg 
Barnes

400,943

416,667

 — 

 — 

4 Jul 16

1 Dec 16

Michael 
Stephenson

 — 

 291,096 

1 Dec 17

 357,843 

 — 

1 Dec 16

 — 

 250,000 

1 Dec 17

Former Key Management Personnel

Amanda 
Laing2

 188,889 

 138,889 

 — 

 — 

29 Jan 16

1 Dec 16

705,890

 — 

 — 

312,335

 — 

 — 

 — 

 — 

1.09

0.61

1.136

1.09

0.61

1.136

0.61

1.136

1.09

0.61

1 Jul 18

1 Jul 19

1 Jul 20

1 Jul 18

1 Jul 19

1 Jul 20

1 Jul 19

1 Jul 20

1 Jul 18

1 Jul 19

 — 

 — 

 — 

 — 

 — 

 — 

 — 

 — 

 200,259 

 — 

 — 

 — 

 1,372,549 

 958,904 

 88,608 

 — 

 — 

 — 

 — 

 — 

 — 

 — 

 416,667 

 291,096 

 357,843 

 250,000 

 188,889 

 138,889 

1.  Rights which vested subsequent to 30 June 2018 but which were measured based on performance up to 30 June 2018.

2.  In accordance with termination agreements, the rights which were held on termination of employment were or will be cash settled, 
at a price to be determined, based on a volume weighted average price of the shares of the Company in the 5 days immediately 
preceding vesting, subject to meeting performance targets. 

46

 NINE ANNUAL REPORT 2018

–
A
U
D
I
T
E
D

R
E
M
U
N
E
R
A
T
I
O
N

R
E
P
O
R
T

2018 SHAREHOLDING OF KEY MANAGEMENT PERSONNEL
During the year, the Board adopted a policy of encouraging directors to acquire shares to the value of one year’s base fees, to be 
acquired within 5 years of appointment..

Non-Executive Directors

Peter Costello 

Catherine West 

David Gyngell 

Janette Kendall 

Samantha Lewis 

Executive Director 

Hugh Marks 

Other Key Management Personnel

Greg Barnes 

Michael Stephenson 

Total 

AS AT 
1 JULY 20171
ORD

GRANTED
AS STI
ORD

OTHER NET 
CHANGES
ORD

HELD DIRECTLY
AS AT 
30 JUNE 2018
ORD

HELD NOMINALLY 
AS AT 
30 JUNE 2018
ORD

 301,786 

 — 

 4,988,535 

 — 

 — 

— 

 — 

 — 

 — 

 — 

 — 

 40,000 

 — 

 — 

 — 

 4,988,048 

 30,500 

 40,000 

 — 

 — 

 301,786 

 40,000 

 487 

 30,500 

 40,000 

 360,313 

 303,518 

 436,435 

 227,396 

 682,556 

 92,140 

 11,544 

 68,849 

 — 

 — 

 774,696 

 80,393 

 — 

 — 

 6,344,734 

 464,507 

 110,500 

 6,279,572 

 640,169 

1.  A Laing who is a former Key Management Personnel held 286,813 shares at the date of her resignation (3 July 2017).

8 

 NON-EXECUTIVE DIRECTOR (NED) REMUNERATION ARRANGEMENTS AND DETAILED 
DISCLOSURES OF NED REMUNERATION

REMUNERATION POLICY
The Board seeks to set aggregate Non-Executive remuneration at a level that provides the Company with the ability to attract and 
retain Directors of the highest calibre, at a cost that is acceptable to shareholders.

The shareholders of NEC approved an aggregate fee pool of $3m at the AGM on 21 October 2013. The Board will not seek any 
increase to the NED fee pool at the 2018 AGM.

STRUCTURE
The remuneration of NEDs consists of Directors’ fees and committee fees. The payment of additional fees for serving on a 
committee recognises the additional time commitment required by NEDs who serve on committees. The Chairman of the Board 
does not receive any additional fees in addition to Board fees for being a member of any committee. All Board fees include any 
superannuation entitlements, as applicable. These arrangements are set out in the written engagement letters with each Director. 

Following the reduction in non-executive director fees with eﬀect from 1 February 2017, there have been no further changes in the 
NED fees. 

The NED fees are set out below.

ROLE

Chairman

Directors

Audit & Risk Committee chair

Audit & Risk Committee member

People & Remuneration Committee chair

People & Remuneration Committee member

FEES

$340,000

$135,000

$30,000

$20,000

$25,000

$15,000

47

 
 
 
NINE ANNUAL REPORT 2018

REMUNERATION REPORT 
– AUDITED continued

NEDs do not receive retirement beneﬁts, nor do they participate in any incentive programs. No Share Rights or other share-based 
payments were issued to NEDs during the 2018 ﬁnancial year. This table below includes fees for the period, when they held the 
position of NEDs.

NED REMUNERATION FOR YEARS ENDED 30 JUNE 2018 AND 2017

FINANCIAL YEAR

SALARY 
AND FEES
$

SUPER-
ANNUATION
$

TOTAL
$

Non-Executive Directors

Peter Costello

Catherine West

David Gyngell

Janette Kendall

Samantha Lewis

Former Non-Executive Directors

Elizabeth Gaines

Holly Kramer

Total NED

2018

2017

2018

2017

2018

2017

2018

2017

2018

2017

2018

2017

2018

2017

2018

2017

 319,951 

 20,049 

 340,000 

 370,453 

 19,616 

 390,068 

 164,384 

 15,616 

 180,000 

 174,141 

 16,543 

 190,685 

 123,288 

 11,712 

 135,000 

 149,688 

 14,220 

 163,908 

 136,986 

 13,014 

 150,000 

 9,972 

 947 

 10,920 

 164,384 

 15,616 

 180,000 

 43,825 

 4,163 

 47,989 

 — 

 — 

 — 

 106,361 

 10,104 

 116,466 

 — 

 — 

 — 

 113,803 

 10,475 

 124,279 

 908,993 

 76,007 

 985,000 

 968,244 

 76,070 

 1,044,314

LOANS TO KEY MANAGEMENT PERSONNEL AND THEIR RELATED PARTIES 

9 
No loans have been made to KMP or their related parties.

10   OTHER TRANSACTIONS AND BALANCES WITH KEY MANAGEMENT PERSONNEL 

AND THEIR RELATED PARTIES 

The following related party arrangements have been entered into by an NEC Group member:
•  Leila McKinnon, the wife of David Gyngell, is employed by Nine Network as a journalist and news presenter; and
•  Sebastian Costello, the son of Peter Costello, is employed by the Nine Network as a reporter.

These arrangements are on commercial and arm’s length terms. 

48

OPERATING AND
FINANCIAL REVIEW

REVIEW OF OPERATIONS

Revenue from Continuing Operations (before speciﬁc Items)

Group EBITDA from Continuing Operations (before speciﬁc Items)1

Finance Costs from Continuing Operations 

Proﬁt after tax before speciﬁc items from Continuing Operations

Speciﬁc Items from Continuing Operations (before income tax)

Proﬁt/(Loss) from Continuing Operations after Income Tax

Net Cash Flows generated from/ (used in) operating activities

Net Debt2

Leverage3

1.  EBITDA plus share of associates.

2. Interest bearing loans and borrowings, less cash at bank.

3. Net Debt/Group EBITDA (before Speciﬁc Items).

 NINE ANNUAL REPORT 2018

F
I
N
A
N
C
A
L

I

R
E
V
I
E
W

O
P
E
R
A
T
I
N
G
A
N
D

2018
$m

1,327.0

257.2

(11.1)

156.7

56.7

209.7

161.1

121.3

0.5X

2017
$m

1,244.9

205.6

(12.6)

123.6

(355.6)

(203.4)

(4.2)

224.5

1.1X

VARIANCE

$m

82.1

51.6

1.5

33.1

412.3

413.1

165.3

103.2

(0.6X)

%

6.6

25.1

11.9

26.8

115.9

203.1

3,935.7

46.0

—

Revenue from Continuing operations before Speciﬁc items increased by 6.6% to $1,327.0 million. Revenue growth was achieved in 
both the Nine Network and Nine Digital businesses.

Group EBITDA before Speciﬁc Items (from Continuing Operations) increased by $51.6 million (25.1%) to $257.2 million. Revenue growth 
in Television, coupled with continued management of its cost base enabled Nine Network EBITDA to grow 26% to $238.2 million 
during FY18. In Digital, the growth experienced in 9Now and Pedestrian TV more than oﬀset the previously communicated loss of 
the Bing relationship, enabling Digital EBITDA to grow 18% to $34.1 million.

In both the current and prior years Speciﬁc Items had a signiﬁcant impact on the bottom line result with a Proﬁt after Income Tax 
of $209.7 million in the current year compared with a Loss after Income Tax of $203.4 million in the prior year.

Speciﬁc Items in FY18 of +$56.7 million (refer to note 1.4) include $76.9 million net proﬁt on sale of assets held for sale. This gain was 
partially reduced by a net increase in the value of the options for the acquisition of Pedestrian and CarAdvice of $14.7 million and 
restructuring and termination costs of $5.8 million. 

In the prior year, Speciﬁc Items of -$355.6 million (refer to note 1.4) included a $260 million non-cash impairment charge against 
licence, goodwill and investment values on the balance sheet, a $87.5 million inventory and onerous contract provision and 
restructuring and termination costs of $7.2 million. 

Finance Costs decreased from $12.6 million in the prior year to $11.1 million in the current year, reﬂecting lower average Net Debt 
throughout the year.

Operating Cash Flow improved year on year largely due to earnings growth and improved working capital. Working capital 
improvements include the recent local programming (inventory) build nearing its peak. Income tax paid decreased as a result of the 
receipt of prior year tax receivable. At balance sheet date, Net Debt reduced by 46% from $224.5 million to $121.3 million, due to 
proceeds received from the sale of Willoughby being used to reduce the net debt and greatly improved operating cash. The Group 
continues to invest in longer term growth with the acquisition of the remaining 40% of Pedestrian TV and additional funding (by way 
of loan advances) to Stan amounting to $27.3 million. The Group made dividend payments of $87.1 million or 10 cents per share, to 
shareholders during the year. Net Leverage at 30 June 2018 was 0.5X, well within bank covenants.

49

 
 
NINE ANNUAL REPORT 2018

OPERATING AND
FINANCIAL REVIEW continued

SEGMENTAL RESULTS

Revenue1

Network

Digital

Corporate

Total Revenue from Continuing Operations1

EBITDA

Network

Digital

Corporate

Share of Associates

Group EBITDA Continuing Operations

1.  After the elimination of inter-segment revenue and interest income.

A summary of each division’s performance is set out below.

NINE NETWORK

Revenue

EBITDA

Margin

2018
$m

1,152.4

165.8

—

1,318.2

238.2

34.1

(16.2)

1.2

257.2

2017
$m

1,080.4

154.7

2.7

1,237.8

188.3

28.9

(11.8)

0.2

205.6

VARIANCE

$m

72.0

11.1

(2.7)

80.4

49.9

5.2

(4.4)

1.0

51.7

%

6.7

7.2

(100.0)

6.5

26.5

18.0

(37.3)

500.0

25.1

2018
$m

1,152.4

238.2

20.7%

2017
$m

1,080.4

188.3

17.4%

VARIANCE

$m

72.0

49.9

—

%

6.7

26.5

19.0

Nine Network recorded revenue of $1,152.4 million, an increase of $72 million (6.7%) on last year, and an increase in EBITDA of 26.5% 
to $238.2 million compared to the prior year. This increase reﬂects the combination of improved revenues (due to higher ratings) and 
control on costs during the year. 

Metro Free-to-Air (FTA) advertising recorded a 2.5% growth for FY18, the ﬁrst year of growth for this market in four years. This included 
growth in the six month to June of 3.8%. 

For the 12 months to June, Nine’s metro FTA revenue share of 38.6% was up 2.9 points on FY17. Nine’s commitment to premium local 
content, and a willingness to trial new formats have resulted in a more consistent and improved performance across the year. 

Costs were up 2.5% on prior year. However, included in this number is the annual spectrum charge for the ﬁrst time as well as an 
extra week of trading, which together added approximately $16 million to costs. Excluding these impacts, costs were up 1%, which 
included an incremental $6 million of costs which related directly to Nine’s higher revenue base.

50

 NINE ANNUAL REPORT 2018

F
I
N
A
N
C
A
L

I

R
E
V
I
E
W

O
P
E
R
A
T
I
N
G
A
N
D

2018
$m

165.8

34.1

20.6%

2017
$m

154.7

28.9

18.7%

VARIANCE

$m

11.1

5.2

—

%

7.2

18.0

10.2

NINE DIGITAL

Revenue

EBITDA

Margin

In FY18, Nine Digital recorded an increase in revenue to $11.1 million, and growth of 18.0% in EBITDA to $34.1 million compared to the 
prior year. Revenue growth was underpinned by long form video, particularly at 9Now and increased contribution from contributions 
from CarAdvice and Pedestrian TV. This growth more than oﬀset declining revenue in the traditional display category and the 
absence of contribution from Bing (c$14 million). 

EBITDA growth of 18% reﬂects the revenue growth and changing mix to increasing premium, and high margin revenues. Reported 
EBITDA was aﬀected both by the absence of Bing (c$14 million) as well as increased investment in the newer businesses of 9Honey 
and Future Women. 

SHARE OF ASSOCIATES PROFIT
Share of Associates proﬁt increased from $0.2 million to $1.2 million. 

REVIEW OF FINANCIAL POSITION
At 30 June 2018 the Net Assets of the Group were $1,109 million which is approximately $123.1 million higher than as at 30 June 2017. 
The key impact during the period was the operating proﬁt, the proﬁt on sale of Willoughby, the reduction in net debt, and the 
dividends paid. 

UNDERLYING DRIVERS OF PERFORMANCE
The Group operates across two key businesses and industries, each of which has their own underlying drivers of performance. 
These are summarised below:
•  Nine Network — size of the advertising market and the share attributed to Free-to-Air television, Nine’s share of the Free-to-Air 

advertising sector, the regulatory environment and the ability to secure key programming contracts.

•  Nine Digital — size of the advertising market and the share attributed to online and Nine Digital’s share of the online 

advertising sector.

The impacts of changes in underlying drivers of performance on the current year result are set out in the Review of Operations, 
as applicable.

BUSINESS STRATEGIES AND FUTURE PROSPECTS
The Group is focusing on the following business growth strategies:

•  Continue strong momentum and consolidate position as a leading FTA TV network
Nine’s stronger ratings performance since the start of 2017 is expected to continue into CY19. With the absence of key events on 
other Networks, Nine is expecting to grow revenue share from FY18. 

Overall Network performance is driven by the combination of the primary Channel Nine, as well as 9GO! 9GEM and 9Life. 
The Group is also focused on optimising returns through improved broadcast rights deals and aﬃliate arrangements, growth 
in premium or integrated revenue and maintaining disciplined cost management. 

In programming, the Group recognises the importance of leading news and current aﬀairs, sports content, entertainment and 
lifestyle, and is focused on continuing to make targeted investments in content to reﬂect audience preferences. 

51

 
 
NINE ANNUAL REPORT 2018

OPERATING AND
FINANCIAL REVIEW continued

•  Continue to grow digital media assets
The Group intends to build on Nine Digital’s position as a leading online network in Australia to grow audience and advertising 
revenue. The Group plans to expand its audience by increasing its content and the ways customers ﬁnd and access this content, 
including via tablets and mobile devices, particularly in online video. Nine Digital’s goal is to increase its advertising revenue through 
growth in audience and inventory, as well as making use of its data assets to improve yields and eﬀectiveness of advertising.

•  Optimise the returns and opportunities associated with the Group’s premium free content and audience reach 
Across its broadcast and digital media assets, NEC’s strengths lie in the production and distribution of premium content. The Group 
will continue to identify and pursue opportunities where it can increase its content and rights to use content, particularly across 
the core pillars of News, Sports, Entertainment and Lifestyle, and broaden the utilisation of this content across its own integrated 
platform as well as third-party platforms. 

The Group remains committed to the achievement of further cost eﬃciencies through FY19 and beyond.

The Group is conﬁdent that the successful execution of these business strategies will enable the Group to grow in the future.

The key risks which may impact the operations or results of the Group are set out below:

Revenue — the major risks which could aﬀect the revenue of the Group are:
•  a signiﬁcant change to advertising market conditions that leads to a decline in the advertising market or an adverse shift in 

free-to-air (FTA) television’s share of the broader advertising market;

•  Nine’s share of the FTA market itself;
•  A change in the way content is viewed by audiences. 

A contributor to these risks is a change in audience behaviours and preferences. Peak-time programming performance or loss of 
key programming rights may also contribute to this risk materialising. In addition, the continued development of alternative forms 
of media may lead to increased competition for advertising revenue.

Operational — from an operational perspective, the business is subject to operational risks of various kinds, including transmission 
failure, systems failure, data loss, inaccurate reporting, industrial action (such as at ﬁlm and television production studios, in sporting 
competitions broadcast by Nine) and other execution risks. These risks could have a negative eﬀect on Nine’s reputation and its 
ability to conduct its business without disruption or at the budgeted level of cost in various ways. 

Legislation — the FTA industry and Nine’s television business is subject to certain legislation which may change in the future and this 
may impact on the business. These risks include changes to: the regulatory environment under which the FTA industry operates; the 
anti-siphoning legislation; the licence conditions under which Nine operates (including the granting of a fourth licence in the major 
markets in which Nine operates); and regulation of content. 

Systems security and data privacy — while Nine has policies and procedures in place to address system security and data risks, 
there is a risk that these may not be suﬃcient which could adversely aﬀect Nine’s reputation and ﬁnancial position.

Key management personnel and employees — Nine relies upon its ability to attract and retain experienced and high performing 
executives and other employees. The failure to achieve this may impact upon Nine’s ability to develop and meet its strategies and 
may lead to a loss in revenue and proﬁtability.

These risks are managed on an ongoing basis. Mitigations and strategies to address them are maintained and regularly reviewed, 
including via regular reporting to the Board.

52

CONTENTS

 NINE ANNUAL REPORT 2018

FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 

CONSOLIDATED STATEMENT OF CASH FLOWS 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 

DIRECTORS’ DECLARATION  

INDEPENDENT AUDITOR’S REPORT 

ASX INFORMATION 
SHAREHOLDER INFORMATION  

NOTE INDEX

54

55

56

57

58

105

106

113

1. GROUP 
PERFORMANCE

2. OPERATING 
ASSETS AND 
LIABILITIES

3. CAPITAL 
STRUCTURE AND 
MANAGEMENT

1.1 Segment 
information

2.1 Cash and cash 
equivalents

3.1 Interest-
bearing loans 
and borrowings

4. TAXATION

4.1 Taxes

5. GROUP 
STRUCTURE 

6. OTHER

5.1 Investments 
accounted for using 
the equity method

6.1 Other ﬁnancial 
assets

1.2 Revenue and 
other income 

2.2 Trade and other 
receivables

3.2 Share capital

4.2 Deferred tax 
assets and liabilities 

5.2 Investment in 
controlled entities

6.2 Deﬁned beneﬁts 
plan

1.3 Expenses

2.3 Program rights 
and inventories

3.3 Dividends paid 
and proposed

5.3 Business 
combinations

6.3 Auditor’s 
remuneration

1.4 Speciﬁc items

2.4 Trade and other 
payables

3.4 Share based 
payments 

5.4 Deed of cross 
guarantee

6.4 Contingent 
liabilities and 
related matters 

1.5 Earnings per 
share

2.5 Property, plant 
and equipment 

3.5 Financial 
instruments

5.5 Parent entity 
disclosures

6.5 Events after the 
balance sheet date

2.6 Intangible assets

2.7 Provisions 

2.8 Commitments

5.6 Related party 
transactions

6.6 Other signiﬁcant 
accounting policies

53

NINE ANNUAL REPORT 2018

CONSOLIDATED STATEMENT OF PROFIT OR 
LOSS AND OTHER COMPREHENSIVE INCOME 

for the year ended 30 June 2018

Revenues 

Expenses

Finance costs 

Share of proﬁts of associate entities

Net proﬁt/(loss) from operations before income tax expense

Income tax expense

Net proﬁt/(loss) from operations after income tax expense

Other comprehensive (loss)/income

Items that may be reclassiﬁed subsequently to proﬁt or loss:

Foreign currency translation

Items that will not be reclassiﬁed subsequently to proﬁt or loss:

Fair value movement in investment in listed equities (net of tax)

Actuarial gain/(loss) on deﬁned beneﬁt plan

Other comprehensive income for the period

Total comprehensive income/(loss) attributable to equity holders

Earnings/(loss) per share

Basic proﬁt/(loss) attributable to ordinary equity holders of the parent

Diluted proﬁt/(loss) attributable to ordinary equity holders of the parent

NOTE

1.2

1.3

1.3

5.1(c)

2018
$’000

2017
$’000

1,403,945

1,244,955

(1,119,001)

(1,423,421)

(11,121)

1,155

(12,600)

212

274,978

(190,854)

4.1

(65,312)

(12,584)

209,666

(203,438)

 (234)

(111)

 (1,178)

 2,733

 1,321

210,987

11,884

3,565

 15,338

(188,100)

$0.24

$0.24

$(0.23)

$(0.23)

6.1

6.2

1.5

1.5

The above consolidated statement of proﬁt or loss and other comprehensive income should read in conjunction with the 
accompanying notes.

54

 
 
CONSOLIDATED STATEMENT 
OF FINANCIAL POSITION 

as at 30 June 2018

 NINE ANNUAL REPORT 2018

P
O
S
I
T
I
O
N

O
F

F
I
N
A
N
C
A
L

I

C
O
N
S
O
L
I
D
A
T
E
D
S
T
A
T
E
M
E
N
T

NOTE

2018
$’000

2017
$’000

Current assets

Cash and cash equivalents

Trade and other receivables

Program rights and inventories 

Prepayments 

Other assets

Property, plant and equipment held for sale

Income tax receivable

Total current assets

Non-current assets

Receivables

Program rights and inventories 

Investments accounted for using the equity method

Other ﬁnancial assets 

Property, plant and equipment

Intangible assets 

Prepayments 

Deﬁned beneﬁt plan

Other assets 

Total non-current assets

Total assets

Current liabilities

Trade and other payables

Current income tax liabilities

Provisions

Derivative ﬁnancial instruments

Total current liabilities

Non-current liabilities

Payables

Interest-bearing loans and borrowings

Deferred tax liabilities

Provisions 

Derivative ﬁnancial instruments

Total non-current liabilities

Total liabilities

Net assets

Equity

Contributed equity

Reserves

Retained earnings

Total equity attributable to equity holders of the parent

2.1

2.2

2.3

2.5

2.2

2.3

5.1

6.1

2.5

2.6

6.2

2.4

2.7

3.5

2.4

3.1

4.2

2.7

3.5

3.2

36,375

285,469

190,427

19,657

1,228

18,528

—

66,700

261,339

190,320

21,243

4,201

50,941

12,647

551,684

607,391

134,470

69,865

12,479

4,468

106,516

911,984

36,575

25,584

—

96,275

63,356

12,324

5,646

129,289

912,014

52,250

22,851

165

1,301,941

1,853,625

1,294,170

1,901,561

225,460

248,399

35,632

52,315

26,228

339,635

34,123

157,646

173,049

39,530

603

404,951

744,586

1,109,039

745,027

5,409

358,603

1,109,039

—

49,271

21,197

318,867

59,642

291,175

 182,226*

34,693

29,068

596,804

915,671

985,890

748,627

1,250

236,013*

985,890

55

*   See note 4.2 for details of an adjustment made to deferred tax liabilities and opening retained earnings as reﬂected in the 

30 June 2017 ﬁnancial year.

The above consolidated statement of ﬁnancial position should be read in conjunction with the accompanying notes.

 
 
NINE ANNUAL REPORT 2018

CONSOLIDATED STATEMENT
OF CHANGES IN EQUITY 

for the year ended 30 June 2018

CONTRIBUTED 
EQUITY
$’000

RIGHTS
PLAN
SHARES
$’000

FOREIGN 
CURRENCY 
TRANSLATION 
RESERVE
$’000

NET 
UNREALISED 
GAINS 
RESERVE
$’000

SHARE-BASED 
PAYMENTS 
RESERVE
$’000

OTHER
RESERVE
$’000

RETAINED 
EARNINGS
$’000

TOTAL 
EQUITY

$’000

751,998

(3,371)

(1,390)

(2,319)

1,788

3,171

236,013

 985,890

 —

 —

 —

 —

 1,061

(4,661)

 —

 —

 —

 —

 —

 —

 —

 —

 —

 —

(234)

 —

1,555

 —

 —

209,666

209,666

 —

1,321

(234)

1,555

 —

 —

 —

 —

 —

 —

 —

 —

 —

 —

 —

 —

(1,061)

 —

 3,899

 —

 —

209,666

210,987

 —

 —

 —

 —

 —

 —

 —

 —

 —

 —

 —

(4,661)

3,899

(87,076)

(87,076)

At 30 June 2017 
(restated)

Proﬁt for the period

Other comprehensive 
income/(loss) for the 
period

Total comprehensive 
income/(loss) for the 
period

Transfers of fair value 
movement on disposal 
of listed equities

Vesting of Rights Plan 
shares (Note 3.4)

Purchase of shares

Share-based payment 
expense

Dividends to 
shareholders

At 30 June 2018

751,998

(6,971)

(1,624)

(764)

4,626

3,171

358,603

1,109,039

At 30 June 2016 (as 
previously reported)

Deferred tax 
re-assessment*

751,998

(5,435)

(1,279)

 2,567

1,987

3,171

480,830  1,233,839

 —

 —

 —

 —

 —

 —

12,190

12,190

At 1 July 2016 (restated)

751,998

(5,435)

(1,279)

1,987

3,171

 493,020

1,246,029

Proﬁt for the period

Other comprehensive 
income/(loss) for the 
period

Total comprehensive 
income/(loss) for the 
period

Transfers of fair value 
movement on disposal 
of listed equities

Vesting of Rights Plan 
shares (Note 3.4)

Share-based payment 
expense

Dividends to 
shareholders

At 30 June 2017 
(restated)

 —

 —

 —

 —

 —

 —

 —

 —

 —

 —

 —

2,064

 —

 —

 2,567

 —

15,449

 —

(111)

 (111)

15,449

 —

 —

 —

 —

(20,335)

 —

 —

 —

 —  (203,438)

 (203,438)

 —

 —

15,338

 —  (203,438)

(188,100)

 —

 —

 —

 —

 —

20,335

 —

 —

1,865

 —

 —

(73,904)

(73,904)

(2,064)

1,865

 —

 —

 —

 —

751,998

 (3,371)

 (1,390)

 (2,319)

 1,788

 3,171

236,013

 985,890

*  See note 4.2 for details of an adjustment made to opening retained earnings which was reﬂected in the 30 June 2017 ﬁnancial year.

The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.

56

CONSOLIDATED STATEMENT
OF CASH FLOWS 

for the year ended 30 June 2018

Cash ﬂows from operating activities

Receipts from customers

Payments to suppliers and employees

Dividends received — associates

Interest received 

Interest and other costs of ﬁnance paid

Income tax paid

Net cash ﬂows generated from/(used in) operating activities

Cash ﬂows from investing activities

Purchase of property, plant and equipment 

Purchase of other intangible assets

Proceeds on disposal of property, plant and equipment 

Acquisition of subsidiaries, net of cash acquired

Proceeds from/(Investment in) listed entities 

Loans to associates

Net cash ﬂows from investing activities

Cash ﬂows from ﬁnancing activities

Proceeds from borrowings

Repayment of borrowings and borrowing costs

Purchase of rights plan shares

Dividends paid

Net cash ﬂows used in ﬁnancing activities

Net (decrease)/increase in cash and cash equivalents

Cash and cash equivalents at the beginning of the ﬁnancial year

Cash and cash equivalents at the end of the period

 NINE ANNUAL REPORT 2018

O
F
C
A
S
H

F
L
O
W
S

C
O
N
S
O
L
I
D
A
T
E
D
S
T
A
T
E
M
E
N
T

NOTES

2018
$’000

2017
$’000

1,418,625

1,376,721

(1,226,086)

(1,323,278)

5.1

2.1

5.3

6.1

3.3

2.1

1,000

1,927

(8,185)

(26,194)

161,087

(22,666)

(8,981)

134,544

(40,147)

 —

(27,300)

35,450

1,200

2,424

(11,684)

(49,569)

(4,186)

(32,871)

(9,077)

81

(17,341)

123,998

(32,800)

31,990

482,000

307,500

(617,125)

(237,560)

(4,661)

(87,076)

(226,862)

(30,325)

66,700

36,375

—

(73,904)

(3,964)

23,840

42,860

66,700

The above consolidated statement of cash ﬂows should be read in conjunction with the accompanying notes.

57

 
 
 
NINE ANNUAL REPORT 2018

NOTES TO THE CONSOLIDATED 
FINANCIAL STATEMENTS 

for the year ended 30 June 2018

ABOUT THIS REPORT
The ﬁnancial report includes the consolidated entity consisting of Nine Entertainment Co. Holdings Limited (the parent entity) and its 
controlled entities (collectively, the Group) for the year ended 30 June 2018.

Nine Entertainment Co. Holdings Limited is a for-proﬁt company limited by shares incorporated in Australia whose shares are publicly 
traded on the Australian Securities Exchange. 

The nature of the operations and principal activities of the Group is described in the Directors’ Report. Information on the Group’s 
structure is provided in Note 5. Information on other related party relationships is provided in Note 5.6 

The consolidated general purpose ﬁnancial report of the Group for the year ended 30 June 2018 was authorised for issue 
in accordance with a resolution of the directors on 23 August 2018. The Directors have the power to amend and reissue the 
ﬁnancial report. 

BASIS OF PREPARATION 
This ﬁnancial report is a general-purpose ﬁnancial report, which has been prepared in accordance with the requirements of the 
Corporations Act 2001 and Australian Accounting Standards and other authoritative pronouncements of the Australian Accounting 
Standards Board. The ﬁnancial report has been prepared on a historical cost basis, except for derivative ﬁnancial instruments and 
investments in listed equities which have been measured at fair value and investments in associates which have been accounted for 
using the equity method. 

The ﬁnancial report is presented in Australian dollars and all values are rounded to the nearest thousand dollars ($’000) unless 
otherwise stated under the option available to the Company under ASIC Corporations (Rounding in Financial/Directors’ Reports) 
Instrument 2016/191. The Company is an entity to which the instrument applies.

The accounting policies adopted in the preparation of the ﬁnancial report are consistent with those applied and disclosed in the 
2017 annual report. The consolidated ﬁnancial statements provide comparative information in respect of the previous period, which 
is reclassiﬁed where necessary in order to provide consistency with the current ﬁnancial year.

STATEMENT OF COMPLIANCE
The ﬁnancial report complies with Australian Accounting Standards. The ﬁnancial report also complies with International Financial 
Reporting Standards (IFRS) as issued by the International Accounting Standards Board.

KEY JUDGEMENTS AND ESTIMATES
In the process of applying the Group’s accounting policies, management has made a number of judgements and applied estimates 
of future events. Judgements and estimates which are material to the ﬁnancial report are found in the following notes:

Note 2.2 Trade and other receivables

Note 2.3 Program rights and inventories 

Note 2.6 Intangible assets 

Note 2.7 Provisions

58

 NINE ANNUAL REPORT 2018

S
T
A
T
E
M
E
N
T
S

F
I
N
A
N
C
A
L

I

N
O
T
E
S

T
O
T
H
E
C
O
N
S
O
L
I
D
A
T
E
D

THE NOTES TO THE FINANCIAL STATEMENTS
The notes include information which is required to understand the ﬁnancial statements and is material and relevant to the 
operations, ﬁnancial position and performance of the Group. Information is considered material and relevant if, for example:
•  the amount in question is signiﬁcant because of its size or nature;
•  it is important for understanding the results of the Group; 
•  it helps to explain the impact of signiﬁcant changes in the Group’s business or it relates to an aspect of the Group’s operations 

that is important to its future performance.

The notes are organised into the following sections:

1.  Group performance: provides a breakdown of individual line items in the statement of proﬁt or loss and other comprehensive 
income that the directors consider most relevant and summarises the accounting policies, judgements and estimates relevant 
to understanding these line items; 

2.  Operating assets and liabilities: provides a breakdown of the key assets and liabilities and the accounting policies, judgements 

and estimates relevant to understanding these line items. 

3.  Capital structure and management: provides information about the capital management practices of the Group, shareholders 

return and the Group’s exposure to various ﬁnancial risks, how they aﬀect the Group’s performance and are managed; 

4.  Taxation: discusses the tax position of the Group; 

5.  Group structure: explains aspects of the Group structure and how changes have aﬀected the ﬁnancial position and performance 

of the Group; and 

6.  Other: provides information on it ems which require disclosure to comply with Australian Accounting Standards and other 

regulatory pronouncements. However, these are not considered critical in understanding the historical ﬁnancial performance 
or position of the Group.

59

 
 
 
 
NINE ANNUAL REPORT 2018

NOTES TO THE CONSOLIDATED 
FINANCIAL STATEMENTS continued
for the year ended 30 June 2018

1  GROUP PERFORMANCE

1.1  SEGMENT INFORMATION

SEGMENT
REVENUE

EBITDA BEFORE
SPECIFIC ITEMS

DEPRECIATION AND 
AMORTISATION

EBIT BEFORE
SPECIFIC ITEMS

2018
$’000

2017
$’000

2018
$’000

2017
$’000

2018
$’000

2017
$’000

2018
$’000

2017
$’000

1,152,9441

1,081,4551

238,223

188,330

(25,880)

(25,984)

212,343

162,346

Television 

Digital

Segment total

1,318,712

1,236,167

272,294

165,768

154,712

34,071

28,945

217,275

(10,860)

(9,302)

23,211

(36,740)

(35,286)

235,554

Corporate

Associates 

—

—

2,688

—

(16,212)

(11,868)

1,155

212

(2)

—

(2)

—

(16,214)

1,155

19,643

181,989

(11,870)

212

Total Group

1,318,712

1,238,855

257,237

205,619

(36,742)

(35,288)

220,495

170,331

1.  Includes intersegment revenue of $548,000 (2017: $1,053,000).

RECONCILIATION OF TOTAL GROUP REVENUE TO THE CONSOLIDATED STATEMENT
OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME 

Total Group revenue (per above)

Interest income

Inter-segment eliminations

Net proﬁt on sale of assets held for sale

Other 

2018
$’000

2017
$’000

1,318,712

1,238,855

8,875

 (548)

 76,906

—

6,973

 (1,053)

 —

180

Revenue per the Consolidated Statement of Proﬁt or Loss and Other Comprehensive Income 

1,403,945

1,244,955

60

 NINE ANNUAL REPORT 2018

S
T
A
T
E
M
E
N
T
S

F
I
N
A
N
C
A
L

I

N
O
T
E
S

T
O
T
H
E
C
O
N
S
O
L
I
D
A
T
E
D

2018
$’000

2017
$’000

220,495

 170,331

8,875

 (11,121)

 (61,524)

 156,725

6,973

 (12,600)

 (41,083)

 123,621

56,729

 (355,558)

 (3,788)

 28,499

 209,666

 (203,438)

RECONCILIATION OF EBIT BEFORE SPECIFIC ITEMS TO PROFIT AFTER TAX

NOTES

EBIT before speciﬁc items

Interest income 

Finance costs 

Income tax expense 

Proﬁt before speciﬁc items 

Speciﬁc items 

Income tax (expense)/beneﬁt on speciﬁc items

Net proﬁt/(loss) from operations after income tax expense

4.1

1.4

4.1

GEOGRAPHIC INFORMATION
A majority of the Group’s external revenues arise out of sales to customers within Australia. 

MAJOR CUSTOMERS
The Group did not have any customers which accounted for more than 10% of operating revenue for the year (2017: >10%).

ACCOUNTING POLICY 
The Chief Operating Decision Makers (determined to be the Board of Directors) review and manage the business based on the 
following reportable segments:
•  Television — includes free to air television activities.
•  Digital — includes Nine Digital Pty Limited and other digital activities. 

Segment performance is evaluated based on continuing operations segment EBITDA before speciﬁc items. Speciﬁc items are 
items that by size and nature or incidence are relevant in explaining the ﬁnancial performance of the Group.

Group ﬁnance costs, interest income and income taxes are managed on a Group basis and are not allocated to operating 
segments.

Transfer prices between operating segments are on an arm’s length basis in a manner similar to transactions with third parties 
and are eliminated on consolidation. No operating segments are aggregated to form the reportable operating segments.

61

 
 
 
 
NINE ANNUAL REPORT 2018

NOTES TO THE CONSOLIDATED 
FINANCIAL STATEMENTS continued
for the year ended 30 June 2018

1   GROUP PERFORMANCE (CONTINUED)

1.2  REVENUE AND OTHER INCOME

Revenues 

Revenue from rendering services 

Net proﬁt on sale of assets held for sale

Proﬁt on sale of non-current assets 

Dividend received from investment in listed entity

Interest

Other 

2018
$’000

2017
$’000

1,318,140

1,235,090

76,906

24

—

8,875

—

—

24

2,688

6,973

180

Total revenues and other income 

1,403,945

1,244,955

ACCOUNTING POLICY 

REVENUE 
Revenue is recognised to the extent that it is probable that the economic beneﬁts will ﬂow to the Group and the revenue can 
be reliably measured. The following speciﬁc recognition criteria must also be met before revenue is recognised:

TELEVISION AND DIGITAL
Revenue for advertising and media activities is recognised when the advertisement has been broadcast/displayed or the media 
service has been performed. 

DIVIDENDS
Recognised when the right to receive payment has been established. 

INTEREST
Revenue is recognised as the interest accrues using the eﬀective interest method (which is the rate that exactly discounts 
estimated future cash receipts through the expected life of the ﬁnancial instrument to the net carrying amount of the 
ﬁnancial asset).

62

 NINE ANNUAL REPORT 2018

S
T
A
T
E
M
E
N
T
S

F
I
N
A
N
C
A
L

I

N
O
T
E
S

T
O
T
H
E
C
O
N
S
O
L
I
D
A
T
E
D

2018
$’000

2017
$’000

943,828

175,173

1,119,001

36,742

384,040

466,778

887,560

7,867

3,254

—

11,121

999,033

424,388

1,423,421

35,288

358,723

440,236

834,247

10,902

1,693

5

12,600

1.3  EXPENSES

Expenses 

Television activities

Other activities

Total expenses 

Included in the expenses above are the following:

Depreciation and amortisation (excluding program rights)

Salary and employee beneﬁt expenses 

Program rights 

Total depreciation, salary and program rights

Finance Costs

Interest on debt facilities 

Amortisation of debt facility and non-cash interest on derivatives

Other ﬁnance costs

Total ﬁnance costs 

ACCOUNTING POLICY 

BORROWING COSTS
Interest is recognised as an expense when it is incurred. Debt establishment costs are capitalised and expensed over the term 
of the loan.

63

 
 
 
 
NINE ANNUAL REPORT 2018

NOTES TO THE CONSOLIDATED 
FINANCIAL STATEMENTS continued
for the year ended 30 June 2018

1   GROUP PERFORMANCE (CONTINUED)

1.4  SPECIFIC ITEMS
The net proﬁt after tax includes the following speciﬁc items, which by size and nature or incidence are relevant in explaining the 
ﬁnancial performance of the Group:

Net proﬁt on sale of assets held for sale1 

Goodwill impairment (Note 2.6)

Program stock provision write up/(write down)

Withholding tax2

Mark to market of derivatives (Notes 3.5 and 5.3)

Restructuring and termination costs

Other

Net speciﬁc items proﬁt/(expense) before tax

Income tax (expense)/beneﬁt on speciﬁc items

Net speciﬁc items proﬁt/(expense) after tax

2018
$’000

76,906

2017
$’000

—

—

(260,000)

1,720

—

(14,653)

(5,811)

(1,433)

(87,469)

10,700

(9,545)

(7,204)

(2,040)

56,729

(355,558)

(3,788)

52,941

28,499

(327,059)

1.  2018: includes proﬁt on disposal of sale of Willoughby and Tynte Street, Adelaide properties (2017: Nil). 

2.  2017: $10.7 million ATO refund in relation to 2010 Vancouver Winter Olympics and 2012 Summer Olympic Games disputed withholding 

tax deduction. 

1.5  EARNINGS PER SHARE

Basic and diluted earnings per share before speciﬁc items

Basic and diluted earnings per share after speciﬁc items 

Proﬁt/(Loss) attributable to the ordinary equity holders of the Group 
used in calculating the basic and diluted earnings per share ($’000)

2018

$0.18

$0.24

2017

$0.14

$(0.23)

209,666

(203,438)

Weighted average number of ordinary shares for basic earnings per share (‘000)

870,351

869,507

Eﬀect of dilution:

Rights Plan shares under the performance rights plan (Note 3.4) (‘000)

7,137

521

Weighted average number of ordinary shares adjusted for the eﬀect of dilution (’000)

877,488

870,028

ACCOUNTING POLICY 
Basic earnings per share amounts are calculated by dividing the net proﬁt/(loss) for the year attributable to ordinary equity 
holders of the parent by the weighted average number of ordinary shares outstanding during the year, as adjusted for shares 
held in Trust (refer Note 3.4).

Diluted earnings per share amounts are calculated by dividing the net proﬁt/(loss) attributable to ordinary equity holders of 
the parent by the sum of the weighted average number of ordinary shares outstanding during the year plus the number 
of ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares (such as performance rights) 
into ordinary shares. 

64

2  OPERATING ASSETS AND LIABILITIES 

2.1  CASH AND CASH EQUIVALENTS 

a.  For the purpose of the statement of cash ﬂows, cash and cash equivalents comprise the 

following at 30 June 

Cash balances representing continuing operations:

— Cash on hand and at bank

Total cash and cash equivalents

b.  Reconciliation of proﬁt after tax to net cash ﬂows from operations:

Proﬁt/(Loss)/after tax from operations

(Proﬁt) on sale of properties

Depreciation and amortisation

Impairment of assets

Share based expense

Investment distributions from associates

Mark to market on derivatives

Derivative interest unwinding

Other non-cash items 

Changes in assets and liabilities:

Trade and other receivables

Program rights and inventories

Prepayments and other assets 

Trade and other payables

Provision for income tax

Provision for employee entitlements

Other provisions

Deferred income tax liability

Foreign currency movements in assets and liabilities of overseas controlled entities

Net cash ﬂows from operating activities

 NINE ANNUAL REPORT 2018

S
T
A
T
E
M
E
N
T
S

F
I
N
A
N
C
A
L

I

N
O
T
E
S

T
O
T
H
E
C
O
N
S
O
L
I
D
A
T
E
D

2018
$’000

2017
$’000

36,375

36,375

66,700

66,700

209,666

(203,438)

(76,906)

36,742

(15)

35,288

—

260,000

3,899

1,000

14,653

623

(522)

(34,063)

(6,616)

18,724

 (25,995)

48,279

2,834

(21,830)

(9,177)

(224)

161,087

1,864

1,200

9,545

910

533

22,967

(34,648)

19,769

(70,070)

(52,067)

6,156

(16,667)

14,598

(111)

(4,186)

ACCOUNTING POLICY 
Cash and cash equivalents in the Statement of Financial Position comprise cash at bank and in hand, and short-term deposits.

65

 
 
 
 
NINE ANNUAL REPORT 2018

NOTES TO THE CONSOLIDATED 
FINANCIAL STATEMENTS continued
for the year ended 30 June 2018

2  OPERATING ASSETS AND LIABILITIES (CONTINUED) 

2.2  TRADE AND OTHER RECEIVABLES 

Current

Trade receivables

Provision for impairment loss

Related parties receivables (Note 5.6)

Other receivables

Total current trade and other receivables

Non-Current

Loans to related parties (Note 5.6)

Other

Total non-current trade and other receivables

2018
$’000

2017
$’000

265,589

234,260

(775)

(1,438)

264,814

232,822

1,634

19,021

2,803

25,714

285,469

261,339

130,018

4,452

134,470

96,275

—

96,275

A net charge from the provision for impairment loss of $97,000 (2017: $798,000) has been recognised by the Group in the current 
period. 

The ageing analysis of trade receivables not considered impaired is as follows:

2018

2017

PAST DUE
BUT NOT IMPAIRED

TOTAL

264,814

232,822

NOT
PAST DUE

245,746

214,833

<30 DAYS

31-60 DAYS

>61 DAYS

11,724

 9,979

2,914

1,972

4,430

6,038

ACCOUNTING POLICY 
Trade receivables are recognised and carried at original invoice amount less an allowance for any uncollectible amounts. 
They are non-interest bearing and are generally on 30 to 60 day terms. 

A provision for impairment loss is recognised when there is objective evidence that the Group will not be able to collect all 
amounts due according to the original trade terms. Collectability of trade receivables is reviewed on an ongoing basis at 
each division. Individual debts that are known to be uncollectible are written oﬀ when identiﬁed. Factors considered as objective 
evidence of impairment include ageing and timing of expected receipts and the creditworthiness of counterparties. The amount 
of the impairment loss is the receivable carrying amount compared to the present value of estimated future cash ﬂows. 

KEY JUDGEMENTS, ESTIMATES AND ASSUMPTIONS

LOANS TO RELATED PARTIES
The Group has loan balances outstanding from Stan Entertainment Pty Limited. The Group has determined that the loans are 
recoverable and they are planned and likely to be repaid. This determination has been based on certain assumptions being 
made by the Group, including the adoption rate for Subscription Video on Demand (“SVOD”), subscriber numbers, revenue and 
EBITDA. If the loan repayment is no longer planned and likely, it would be reclassiﬁed in the Statement of Financial Position 
from loan receivable to an investment in associate and the Group’s share of cumulative losses of the joint venture recorded 
in the Statement of Proﬁt or Loss and Other Comprehensive Income.

66

2.3  PROGRAM RIGHTS AND INVENTORIES 

Current

Program rights — cost less accumulated amortisation and impairment

Inventories

 NINE ANNUAL REPORT 2018

S
T
A
T
E
M
E
N
T
S

F
I
N
A
N
C
A
L

I

N
O
T
E
S

T
O
T
H
E
C
O
N
S
O
L
I
D
A
T
E
D

2018
$’000

177,179

13,248

2017
$’000

171,672

18,648

Total current program rights and inventories 

190,427

190,320

Non-current

Program rights — cost less accumulated amortisation and impairment

Total non-current program rights

Inventories held are for use in production of television programs.

69,865

69,865

63,356

63,356

ACCOUNTING POLICY 

PROGRAM RIGHTS
The Group recognises program rights which are available for use. Television programs which are available for use, including 
those acquired overseas, are recorded at cost less amounts charged to the Statement of Proﬁt or Loss and Other 
Comprehensive Income based on the useful life of the content and management’s assessment of the future years of beneﬁt, 
which is regularly reviewed with additional write-downs made as considered necessary. Program rights are classiﬁed as current 
or non-current based on the expected realisation of economic beneﬁts ﬂowing from their use.

INVENTORIES
Inventories are carried at lower of cost or net realisable value (“NRV”). The NRV is the estimated selling price in the ordinary 
course of business less the estimated costs of completion and the estimated costs necessary to make the sale.

KEY JUDGEMENTS, ESTIMATES AND ASSUMPTIONS
The assessment of the appropriate carrying value of program rights and inventories requires estimation by management of the 
forecast future cash ﬂows which will be derived from that content. This estimate is based on a combination of market conditions 
and the value generated from the broadcast of comparable programs.

67

 
 
 
 
NINE ANNUAL REPORT 2018

NOTES TO THE CONSOLIDATED 
FINANCIAL STATEMENTS continued
for the year ended 30 June 2018

2  OPERATING ASSETS AND LIABILITIES (CONTINUED) 

2.4  TRADE AND OTHER PAYABLES 

Current — unsecured

Trade and other payables

Program contract payables

Deferred income

Total current trade and other payables

Non-current — unsecured

Program contract payables

Deferred income 

Total non-current trade and other payables

2018
$’000

2017
$’000

121,323

96,226

7,911

124,333

105,641

18,425

225,460

248,399

26,668

7,455

34,123

56,940

2,702

59,642

As a result of exiting the Warner Bros agreement, the Group has a ﬁnal payment of $33.0 million payable to Warner Bros by 
30 June 2019. This is reﬂected in the current program contract payables in the table above.

ACCOUNTING POLICY 
Trade and other payables are carried at amortised cost. Liabilities are brought to account for amounts payable in relation to 
goods received and services rendered, whether or not billed to the Group at reporting date. The Group operates in a number 
of diverse markets, and accordingly the terms of trade vary by business. Terms of trade in relation to trade payables are, on 
average, 30 to 60 days from the date of invoice. Program contract payables are settled according to the contract negotiated 
with the program supplier.

68

 NINE ANNUAL REPORT 2018

S
T
A
T
E
M
E
N
T
S

F
I
N
A
N
C
A
L

I

N
O
T
E
S

T
O
T
H
E
C
O
N
S
O
L
I
D
A
T
E
D

2.5  PROPERTY, PLANT AND EQUIPMENT 

FREEHOLD 
LAND AND 
BUILDINGS
 $‘000

LEASEHOLD 
IMPROVE-
MENTS
$’000

PLANT AND 
EQUIPMENT
$’000

WORK IN 
PROGRESS
$’000

LEASED 
PLANT AND 
EQUIPMENT
$’000

TOTAL 
PROPERTY, 
PLANT AND 
EQUIPMENT
$’000

Year ended 30 June 2018

At 1 July 2017, net of accumulated 
depreciation and impairment

Additions

Transfer from construction work in progress

Disposals

Depreciation expense

Amortisation expense

Transfer to assets held for sale1

At 30 June 2018, net of accumulated 
depreciation and impairment

Year ended 30 June 2017

At 1 July 2016, net of accumulated 
depreciation and impairment

Additions

Acquisition of subsidiaries (Note 5.3)

Transfer from construction work in progress

Disposals

Depreciation expense

Amortisation expense

Transfer to assets held for sale1

At 30 June 2017, net of accumulated 
depreciation and impairment

At 30 June 2018

Cost (gross carrying amount)

Accumulated depreciation and impairment

Net carrying amount

At 30 June 2017

Cost (gross carrying amount)

Accumulated depreciation and impairment

Net carrying amount

1. Assets held for sale

13,569

12,694

9

—

—

(514)

—

(5,150)

63

—

—

—

(2,127)

87,719

15,525

13,053

(57)

(24,492)

—

—

(13,378)

15,307

7,348

(13,053)

—

—

—

—

7,914

10,630

78,370

9,602

—

—

—

—

—

—

—

—

129,289

22,945

—

(57)

(25,006)

(2,127)

(18,528)

106,516

14,634

6,505

78,357

23,780

68

123,344

210

—

17

—

(1,292)

—

—

2,826

111

5,375

—

—

(2,123)

—

15,771

381

18,241

(11)

(23,742)

—

(1,278)

15,160

—

(23,633)

—

—

—

—

13,569

12,694

87,719

15,307

14,783

(6,869)

7,914

30,759

(17,190)

13,569

30,107

379,087

(19,477)

(300,717)

10,630

78,370

23,129

413,505

(10,435)

(325,786)

12,694

87,719

9,602

—

9,602

15,307

—

15,307

—

—

—

(55)

—

(13)

—

—

129

(129)

—

129

(129)

—

33,967

492

—

(66)

(25,034)

(2,136)

(1,278)

129,289

433,708

(327,192)

106,516

482,829

(353,540)

129,289

Assets held for sale includes $13.9 million in respect of the National Playout Centre. The remaining assets held for sale for the 
year ended 30 June 2018 relate to assets held in Newcastle and Perth. Contracts for the sale of the National Playout Centre and 
Newcastle assets had been entered into as at 30 June 2018 with completion post year end. The net proceeds for the National 
Playout Centre were in line with its carrying value, with a gain on sale expected with the disposal of Newcastle assets. 

In 2017 $40.7 million was held for sale in relation to Willoughby, with the remainder in relation to assets held in Adelaide. Both were 

sold in FY18. Refer Note 1.4.

69

 
 
 
 
NINE ANNUAL REPORT 2018

NOTES TO THE CONSOLIDATED 
FINANCIAL STATEMENTS continued
for the year ended 30 June 2018

2  OPERATING ASSETS AND LIABILITIES (CONTINUED)

ACCOUNTING POLICY 
Property, plant and equipment are stated at cost less accumulated depreciation and any accumulated impairment losses. 

Depreciation and amortisation is calculated on a straight-line basis over the estimated useful life of the asset as follows: 
•  freehold buildings — 20 to 40 years;
•  leasehold improvements — lease term; and
•  plant and equipment — 2 to 15 years.

The assets’ residual values, useful lives and amortisation methods are reviewed and adjusted as appropriate each year end.

IMPAIRMENT
The carrying values of property, plant and equipment are reviewed for impairment when events or changes in circumstances 
indicate the carrying value may not be recoverable. The recoverable amount is the greater of fair value less costs to sell and 
value in use. The recoverable amounts are based on the present value of expected future cash ﬂows. For an asset that does 
not generate largely independent cash inﬂows, the recoverable amount is determined for the cash-generating unit to which the 
asset belongs. If any such indication exists and where the carrying values exceed the estimated recoverable amount, the assets 
or cash-generating units are written down to their recoverable amount.

DISPOSAL
An item of property, plant and equipment is derecognised upon disposal or when no further future economic beneﬁts are 
expected to arise from the continued use or disposal of the asset. Any gain or loss arising on derecognition of the asset 
(calculated as the diﬀerence between the net disposal proceeds and the carrying amount of the item) is included in the 
Statement of Proﬁt or Loss and Other Comprehensive Income in the year the item is derecognised.

ASSETS HELD FOR SALE 
The Group classiﬁes non-current assets and disposal groups as held for sale or for distribution to equity holders of the parent if 
their carrying amounts will be recovered principally through sale or a distribution rather than through continuing use. Such non-
current assets and disposal are measured at the lower of their carrying amount and fair value less costs to sell or to distribute. 
Costs to sell or distribute are the incremental costs directly attributable to the sale or distribution, excluding the ﬁnance costs 
and income tax expense.

The criteria for held for sale or for distribution classiﬁcation is regarded as met only when the sale or distribution is highly probable 
and the asset or disposal group is available for immediate sale or distribution in its present condition. Management must be 
committed to the sale or distribution expected within one year from the date of the classiﬁcation.

Property, plant and equipment and intangible assets are not depreciated or amortised once classiﬁed as held for sale or 
distribution.

70

 NINE ANNUAL REPORT 2018

S
T
A
T
E
M
E
N
T
S

F
I
N
A
N
C
A
L

I

N
O
T
E
S

T
O
T
H
E
C
O
N
S
O
L
I
D
A
T
E
D

2.6  INTANGIBLE ASSETS

Year ended 30 June 2018

GOODWILL
$’000

LICENCES
$’000

OTHER1
$’000

TOTAL
$’000

At 1 July 2017, net of accumulated amortisation and impairment 

415,922

477,784

Purchases

Acquisition of subsidiaries (Note 5.3)

Amortisation expense

—

598

—

—

—

—

At 30 June 2018, net of accumulated amortisation and impairment

416,520

477,784

Year ended 30 June 2017

18,308

8,981

—

(9,609)

17,680

912,014

8,981

598

(9,609)

911,984

At 1 July 2016, net of accumulated amortisation and impairment 

632,088

477,784

16,342

1,126,214

Purchases

Acquisition of subsidiaries (Note 5.3)

Amortisation expense

Impairment loss

—

43,834

—

(260,000)

—

—

—

—

9,077

1,007

(8,118)

9,077

44,841

(8,118)

—

(260,000)

At 30 June 2017, net of accumulated amortisation and impairment

415,922

477,784

18,308

912,014

At 30 June 2018

Cost (gross carrying amount)

1,523,681

1,450,353

56,445

3,030,479

Accumulated amortisation and impairment

(1,107,161)

(972,569)

(38,765)

(2,118,495)

Net carrying amount 

At 30 June 2017

Cost (gross carrying amount)

416,520

477,784

17,680

911,984

1,523,083

1,450,353

47,463

3,020,899

Accumulated amortisation and impairment

(1,107,161)

(972,569)

(29,155)

(2,108,885)

Net carrying amount 

415,922

477,784

18,308

912,014

1.  This includes capitalised development costs of software being, in part, an internally generated intangible asset.

2.6(a)  ALLOCATION OF NON-AMORTISING INTANGIBLES AND GOODWILL
The Group has allocated goodwill and licences to the following cash generating units (“CGUs”):

30 June 2018

Nine Network 

NBN

Digital1 

Total licences and goodwill as at 30 June 2018

30 June 2017

Nine Network 

NBN

Digital1

Total licences and goodwill as at 30 June 2017

GOODWILL
$’000

LICENCES
$’000

301,913

466,784

3,300

111,307

11,000

—

416,520

477,784

301,913

3,300

110,709

415,922

466,784

11,000

—

477,784

1.   Digital goodwill is made up of Nine Digital Pty Ltd $47.6 million (2017: $47.6 million), Pedestrian TV $19.3 million (2017: $19.3 million), 

CarAdvice $43.8 million (2017: $43.8 million) and Future Women $0.6 million (2017: Nil).

71

 
 
 
 
NINE ANNUAL REPORT 2018

NOTES TO THE CONSOLIDATED 
FINANCIAL STATEMENTS continued
for the year ended 30 June 2018

2  OPERATING ASSETS AND LIABILITIES (CONTINUED)

2.6(b)  DETERMINATION OF RECOVERABLE AMOUNT
The recoverable amount of the CGUs, which are classiﬁed within Level 3 of the fair value hierarchy, is determined based on fair 
value less cost of disposal calculations using discounted cash ﬂow projections based on ﬁnancial forecasts covering a ﬁve-year 
period with a terminal growth rate applied thereafter. The Group determined Nine Network, NBN and each of the components 
of Digital (Nine Digital Pty Ltd, Pedestrian TV, CarAdvice and Future Women) to be CGUs. 

The Group performed its annual impairment test in June 2018. 

The cash ﬂow projections which are used in determining any impairment require management to make signiﬁcant estimates and 
judgements. Key assumptions in preparing the cash ﬂow projections are set out below. Each of the assumptions is subject to 
signiﬁcant judgement about future economic conditions and the ongoing structure of the free-to-air television and digital industries. 
Management has applied their best estimates to each of these variables but cannot warrant their outcome. Management has 
determined that there is no impairment for Nine Network, Digital and NBN as at 30 June 2018. In determining that no impairment 
was required at 30 June 2018, Management also took into consideration that the market capitalisation of the Group was above 
the book value of its equity.

2.6(c)  IMPAIRMENT LOSSES RECOGNISED
As a result of the analysis performed, there is headroom in the Group’s CGUs and management did not identify an impairment 
charge for any of the CGUs (2017: $260 million impairment was recognised for Free-to-Air television due to lower than previously 
expected growth forecast in the metropolitan advertising market).

2.6(d)  KEY ASSUMPTIONS 
The key assumptions on which management has based its cash ﬂow projections when determining the fair value less cost of 
disposal calculations for Nine Network are set out below. These assumptions are considered to be consistent with industry market 
participant expectations.

•  The advertising market for metro free-to-air television reﬂects management’s expectation of a relatively ﬂat market in the short to 

medium term. 

•  Nine Network’s share of the metro free-to-air advertising market in future years is assumed to remain in line with recent historical 

levels of share which have been achieved.

•  Expenditure is assumed to remain broadly ﬂat in nominal terms over the life of the model, reﬂecting known increases in 

committed expenditure being largely oﬀset by cost saving initiatives and operational eﬃciencies.

•  Terminal growth rate of 1.0% (30 June 2017: 1.0%).
•  The pre-tax discount rate applied to the cash ﬂow projections was 13.9% (30 June 2017: 13.6%) which reﬂects management’s best 
estimate of the time value of money and the risks speciﬁc to the free-to-air television metro market not already reﬂected in the 
cash ﬂows.

The key assumptions on which management has based its cash ﬂow projections when determining the fair value less cost 
of disposal calculations for NBN are set out below. These assumptions are considered to be consistent with industry market 
participant expectations.

•  The advertising market for Regional Free-to-Air television shows single digit declines over the short to medium term followed by 

a ﬂat market in the medium term.

•  The pre-tax discount rate applied to the cash ﬂow projections was 14.2% (30 June 2017: 14.3%) which reﬂects management’s 

best estimate of the time value of money and the risks speciﬁc to the Free-to-Air television market not already reﬂected in the 
cash ﬂows.

•  Terminal growth rate of 0.0% (30 June 2017: 0.0%).

72

 NINE ANNUAL REPORT 2018

S
T
A
T
E
M
E
N
T
S

F
I
N
A
N
C
A
L

I

N
O
T
E
S

T
O
T
H
E
C
O
N
S
O
L
I
D
A
T
E
D

The key assumptions on which management has based its cash ﬂow projections when determining the fair value less cost of 
disposal calculations for Digital are as follows:
•  The digital industry in terms of digital advertising grows consistent with industry market participant expectations.
•  The pre-tax discount rate applied to the cash ﬂow projections was 15.5% (30 June 2017: 15.8%) which reﬂects management’s best 

estimate of the time value of money and the risks speciﬁc to the Digital industry.

•  Terminal growth rate of 2.0% (30 June 2017: 2.0%).

For the purpose of impairment testing, intangible assets with indeﬁnite lives, including goodwill, are allocated to the Group’s operating 
divisions which represent the lowest level within the Group at which the assets are monitored for internal management purposes.

2.6(e)  SENSITIVITY
The estimated recoverable amounts of the Nine Network and NBN CGUs are in excess of the carrying amounts of intangible and 
tangible assets of the respective CGUs. The excess is deemed to relate to previously impaired goodwill, which cannot be written 
up under accounting standards. Any reasonable adverse change in key assumptions would not lead to impairment, however, an 
indication of key sensitivities is as follows: 
•  An adverse movement in discount rate of 0.5% will, if occurring in isolation, result in a reduction in the excess of $63.5 million 

for the Nine Network CGU and $2.1 million for the NBN CGU; 

•  Decrease in forecast revenue of 1.0% will, if occurring in isolation, result in a reduction in the excess of $133 million for the 

Nine Network CGU and $3.9 million for the NBN CGU; and

•  Decline in terminal growth rate of 0.5% will, if occurring in isolation, result in a reduction in the excess of $43 million for the 

Nine Network CGU and $2.0 million for the NBN CGU. 

The estimated recoverable amount of the Digital CGU is in excess of the carrying amount of intangibles. A minor reduction in 
revenue will lead to the recoverable amount of CarAdvice equaling its carrying value. Any reasonable adverse change in key 
assumptions would not lead to impairment of the other Digital CGUs. 

ACCOUNTING POLICY 

LICENCES 
Licences are carried at cost less any accumulated impairment losses. The Directors regularly assess the carrying value of 
licences to ensure they are not carried at a value greater than their recoverable amount.

No amortisation is provided against these assets as the Directors consider that the licences are indeﬁnite life intangible assets.

GOODWILL
Goodwill on acquisition is initially measured at cost being the excess of the cost of the business combination over the Group’s 
interest in the net fair value of the identiﬁable assets, liabilities and contingent liabilities. Following initial recognition, goodwill is 
measured at cost less any accumulated impairment losses. Goodwill is not amortised.

As at the acquisition date, any goodwill acquired is allocated to each of the cash-generating units expected to beneﬁt from the 
combination’s synergies.

Goodwill is reviewed for impairment, annually or more frequently if events or changes in circumstances indicate that the carrying 
value may be impaired. Impairment is determined by assessing the recoverable amount of the cash-generating unit to which 
the goodwill relates. Where the recoverable amount of the cash-generating unit is less than the carrying amount, an impairment 
loss is recognised.

73

 
 
 
 
NINE ANNUAL REPORT 2018

NOTES TO THE CONSOLIDATED 
FINANCIAL STATEMENTS continued
for the year ended 30 June 2018

2  OPERATING ASSETS AND LIABILITIES (CONTINUED)

ACCOUNTING POLICY

OTHER INTANGIBLE ASSETS
Intangible assets acquired separately are capitalised at cost, and from a business combination are capitalised at fair value as at 
the date of acquisition. Following initial recognition, the cost model is applied to the class of intangible assets.

Costs incurred to develop software for internal use, and websites are capitalised and amortised over the estimated useful life of the 
software or website. Costs related to design or maintenance of software for internal use and websites are expensed as incurred. 

Intangible assets, excluding development costs, created within the business are expensed in the year in which the expenditure is incurred.

Only intangible assets with a ﬁnite life are amortised.

Intangible assets are tested for impairment where an indicator of impairment exists, and in the case of indeﬁnite life intangibles 
annually, either individually or at the cash generating unit level. Useful lives are also examined on an annual basis and 
adjustments, where applicable, are made on a prospective basis.

Gains or losses arising from de-recognition of an intangible asset are measured as the diﬀerence between the net disposal 
proceeds and the carrying amount of the asset and are recognised in the Statement of Proﬁt or Loss and Other Comprehensive 
Income when the net asset is derecognised.

KEY JUDGEMENTS, ESTIMATES AND ASSUMPTIONS
The Group determines whether goodwill and television licences with indeﬁnite useful lives are impaired at least on an annual 
basis. This requires an estimation of the recoverable amount of the cash-generating units to which the goodwill and television 
licences with indeﬁnite useful lives are allocated. Refer above for key assumptions used. 

2.7  PROVISIONS

At 1 July 2017

Amounts provided/(Utilised) during the period

At 30 June 2018

Represented by:

Current 

Non-current 

Total at 30 June 2018

EMPLOYEE 
ENTITLEMENTS
$’000

ONEROUS 
CONTRACTS
$’000

60,011

2,834

62,845

37,174

25,671

62,845

3,991

14,421

18,412

8,645

9,767

18,412

OTHER
$’000

19,962

(9,374)

10,588

6,496

4,092

10,588

TOTAL
$’000

83,964

7,881

91,845

52,315

39,530

91,845

74

 NINE ANNUAL REPORT 2018

S
T
A
T
E
M
E
N
T
S

F
I
N
A
N
C
A
L

I

N
O
T
E
S

T
O
T
H
E
C
O
N
S
O
L
I
D
A
T
E
D

ACCOUNTING POLICY 

PROVISIONS
Provisions are recognised when the Group has a legal or constructive obligation to make a future sacriﬁce of economic 
beneﬁts to other entities as a result of past transactions or other events, it is probable that a future sacriﬁce of economic 
beneﬁt will be required and a reliable estimate can be made of the amount of the obligation.

If the eﬀect of the time value of money is material, provisions are discounted using a current pre-tax rate that reﬂects the risks 
speciﬁc to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a 
borrowing cost.

EMPLOYEE BENEFITS 
Provision is made for employee beneﬁts accumulated as a result of employees rendering services up to balance date including 
related on-costs. The beneﬁts include wages and salaries, incentives, compensated absences and other beneﬁts, which are 
charged against proﬁts in their respective expense categories when services are provided or beneﬁts vest with the employee.

The provision for employee beneﬁts is measured at the remuneration rates expected to be paid when the liability is settled. 
Beneﬁts expected to be settled after 12 months from the reporting date are measured at the present value of the estimated 
future cash outﬂows to be made in respect of services provided by employees up to the reporting date.

The liability for long service leave is recognised in the provision for employee beneﬁts and measured as the present value 
of expected future payments to be made in respect of services provided by employees up to the reporting date using the 
projected unit credit method. Consideration is given to expected future wage and salary levels, experience of employee 
departures, and years of service. Expected future payments are discounted using market yields at the reporting date on 
government bonds with terms to maturity and currencies that match, as closely as possible, the estimated future cash outﬂows.

ONEROUS CONTRACTS
The Group is carrying an onerous provision for the cost of the rent for Willoughby (and other property related costs) which the 
Group considers to be in excess of a market rent. 

OTHER
Other provisions principally relate to the value of services which are to be provided to Nine Live following its disposal. These 
services are expected to be provided over the next three years. The other provision also includes the value of services required 
to be provided to Australian Consolidated Press Limited as a requirement of the disposal agreement. These are expected to be 
incurred over the next year.

KEY JUDGEMENTS, ESTIMATES AND ASSUMPTIONS

Onerous contract provisions
The Group has recognised an onerous contract provision in relation to the Willoughby sale and leaseback. The provision is 
calculated as the excess of the cost of the lease (and other property related costs) over what the Group considers to be 
market cost.

75

 
 
 
 
NINE ANNUAL REPORT 2018

NOTES TO THE CONSOLIDATED 
FINANCIAL STATEMENTS continued
for the year ended 30 June 2018

2  OPERATING ASSETS AND LIABILITIES (CONTINUED)

2.8  COMMITMENTS

Year ended 30 June 2018

Capital expenditure 

Operating lease commitments 

Television program and sporting broadcast rights

Total Commitments 

Year ended 30 June 2017

Capital expenditure 

Operating lease commitments 

Finance lease commitments 

Television program and sporting broadcast rights

Total Commitments 

<1 YEAR
$’000

1-5 YEARS
$’000

>5 YEARS
$’000

TOTAL
$’000

18,430

33,371

220,197

271,998

2,010

74,576

669,520

746,106

—

71,864

60,000

20,440

179,811

949,717

131,864

1,149,968

<1 YEAR
$’000

1-5 YEARS
$’000

>5 YEARS
$’000

TOTAL
$’000

11,694

19,423

63

271,074

302,254

2,781

49,480

—

485,869

538,130

—

43,311

—

39,269

 82,580

14,475

112,214

63

796,212

922,964

The Group entered into an Agreement for Lease with Winten Property Group to move the Sydney operations to 1 Denison Street, 
North Sydney. The parties to the current agreement are required to enter a lease agreement once the building construction is 
ﬁnalised and the Group is able to take possession of its areas of the building, which is expected to occur in early 2020. The rent 
which will be payable is dependent on the ﬂoor space which the Group occupies and this is still subject to ﬁnal determination. 
Based on the Group’s best estimate the annual rent will be approximately $10.8 million per annum (with an annual increase which 
approximates CPI). The minimum lease term is expected to be 12 years with options for up to a further 10 years should the Group 
wish to exercise them. The operating lease commitments in the table above do not include the commitments which will arise if the 
Group enters this lease agreement.

Operating lease commitments include leases for telecommunications rental agreements, motor vehicles, land and buildings and items 
of plant and equipment. Renewal terms are included in certain contracts, whereby renewal is at the option of the speciﬁc entity that 
holds the lease. On renewal, the terms of the leases are usually renegotiated. There are no restrictions placed upon the lessee by 
entering into these leases.

ACCOUNTING POLICY 
The determination of whether an arrangement is or contains a lease is based on the substance of the arrangement and 
requires an assessment of whether the fulﬁlment of the arrangement is dependent on the use of a speciﬁc asset or assets 
and the arrangement conveys a right to use the asset.

Operating lease payments are recognised as an expense in the Statement of Proﬁt or Loss and Other Comprehensive Income 
on a straight-line basis over the lease term.

76

3  CAPITAL STRUCTURE AND MANAGEMENT 

3.1  INTEREST-BEARING LOANS AND BORROWINGS

Non-current 

Bank facilities unsecured1

Total non-current interest-bearing loans and borrowings

 NINE ANNUAL REPORT 2018

S
T
A
T
E
M
E
N
T
S

F
I
N
A
N
C
A
L

I

N
O
T
E
S

T
O
T
H
E
C
O
N
S
O
L
I
D
A
T
E
D

2018
$’000

157,646

157,646

2017
$’000

291,175

291,175

1.  Bank facilities include unamortised ﬁnancing costs of $2,354,000 (2017: $1,325,000).

A syndicated bank facility of $450 million (2017: $500 million) is available to the Group with varying maturities from February 2019 
to February 2023. At 30 June 2018, $160,000,000 was drawn (2017:$292,500,000). The interest rate for drawings under this facility is the 
applicable bank bill rate plus a credit margin.

A $15 million bank guarantee is also available to the Group on a rolling annual basis. As at 30 June 2018, $11,725,000 was drawn 
(2017: $10,828,000). 

A $1 million revolving cash advance facility is available to the Group on a rolling annual basis. At 30 June 2018 the facility was not 
drawn (2017: Nil). The interest rate for drawings under this facility is the applicable bank bill rate plus a credit margin.

Corporate facilities
The corporate facilities are provided by a syndicate of banks and ﬁnancial institutions. 

These facilities are supported by Group guarantees from most of the Company’s wholly-owned subsidiaries but are otherwise 
provided on an unsecured basis. Details of the assets and liabilities that form these Group guarantees are included in the Extended 
Closed Group disclosures in Note 5.4. These facilities impose various aﬃrmative and negative covenants on the Company and the 
Group, including restrictions on encumbrances, and customary events of default, including a payment default, breach of covenants, 
cross-default and insolvency events.

As part of the corporate facilities, the Group is subject to certain customary ﬁnancial covenants measured on a six-monthly basis. 
The Group has been in compliance with its ﬁnancial covenant requirements to date including the year ended 30 June 2018.

ACCOUNTING POLICY
All loans and borrowings are initially recognised at cost, being the fair value of the consideration received net of issue costs 
associated with the borrowing. After initial recognition, interest bearing loans and borrowings are subsequently measured at 
amortised costs using the eﬀective interest method.

77

 
 
 
 
NINE ANNUAL REPORT 2018

NOTES TO THE CONSOLIDATED 
FINANCIAL STATEMENTS continued
for the year ended 30 June 2018

3  CAPITAL STRUCTURE AND MANAGEMENT (CONTINUED)

3.2  SHARE CAPITAL 

Issued share capital

871,373,191 ordinary shares authorised and fully paid 

Movements in issued share capital — ordinary shares

Carrying amount at the beginning of the ﬁnancial year 

Purchase of rights plan shares

Vesting of Rights Plan shares (Note 3.4)

Carrying amount at the end of the ﬁnancial year

2018
$’000

2017
$’000

745,027

745,027

748,627

748,627

748,627

746,563

(4,661)

1,061

—

2,064

745,027

748,627

At 30 June 2018, a trust controlled by the Company held 2,614,950 (30 June 2017: 1,341,576) ordinary fully paid shares in the Company. 
During the year, 2,000,000 shares were acquired by the Trust. The shares were purchased for the purpose of allowing the Group to 
satisfy performance rights to certain senior management of the Group. Refer to Note 3.4 for further details. 

Terms and Conditions of Contributed Equity
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up or sale of the Company in proportion 
to the number of shares held. 

ACCOUNTING POLICY 
Ordinary shares are classiﬁed as equity. Issued capital is recognised at the fair value of the consideration received by the 
Group, less transaction costs. The Group provides remuneration to senior management in the form of share-based payments, 
whereby employees render services as consideration for equity instruments. In the Group’s ﬁnancial statements the transactions 
of these share-based payments are settled through a plan trust and are treated as being executed by the Group (an 
external third party acts as the Group’s agent). Where shares to satisfy the Rights Plans are purchased by the plan trust, the 
consideration paid is deducted from total shareholders’ equity and the shares are treated as treasury shares until they are 
subsequently vested, sold, reissued or cancelled. Where such shares are vested, sold or reissued, any consideration received is 
included in shareholders’ equity.

3.3  DIVIDENDS PAID AND PROPOSED

3.3(a)  DIVIDENDS APPROPRIATED DURING THE FINANCIAL YEAR
During the year Nine Entertainment Co. Holdings Limited (“Nine”) paid an interim dividend of 5 cents per share, fully franked 
(amounting to $43,537,912) in respect of the year ended 30 June 2018 and a ﬁnal dividend of 5.0 cents per share, fully franked 
(amounting to $43,537,908) in respect of the year ended 30 June 2017. 

3.3(b) PROPOSED DIVIDENDS ON ORDINARY SHARES NOT RECOGNISED AS A LIABILITY
The ﬁnal cash dividend fully franked, proposed for 2018 of 5.0 cents per share amounts to $43,557,105 (2017: ﬁnal dividend, fully 
franked of 5.0 cents per share amounting to $43,537,908.

3.3(c) FRANKING CREDITS AVAILABLE FOR SUBSEQUENT YEARS
The franked dividends declared after 30 June 2018 will be franked out of existing franking credits or out of franking credits arising 
from the receipt of franked dividends and the payment of tax in the year ending 30 June 2019. The franking credits available for 
subsequent years as at 30 June 2018 was $38,067,759 (2017: $21,830,300). This balance represents the franking account balance 
as at 30 June 2018, after adjusting for franking credits which will arise from the payment of the current tax liability. 

78

 NINE ANNUAL REPORT 2018

S
T
A
T
E
M
E
N
T
S

F
I
N
A
N
C
A
L

I

N
O
T
E
S

T
O
T
H
E
C
O
N
S
O
L
I
D
A
T
E
D

Nine had an exempting account balance of $41,069,000 for the year ended 30 June 2018 (2017: $41,069,000). Nine became a former 
exempting entity as a consequence of the IPO in December 2013. As a result, Nine’s franking account balance at that time was 
transferred to an exempting account. Exempting credits will generally only be of beneﬁt to certain foreign resident shareholders by 
providing an exemption from Australian dividend withholding tax. The exempting credits will generally not give rise to a tax oﬀset for 
Australian resident shareholders.

ACCOUNTING POLICY 
A provision for dividends is not recognised as a liability unless the dividends are declared, determined or publicly recommended 
on or before the reporting date.

3.4  SHARE BASED PAYMENTS
Under the executive long-term incentive plan, performance rights (“Rights”) have been granted to executives and other senior 
management who have an impact on the Group’s performance. On satisfaction of any vesting conditions, each Right will convert to 
a share on a one-for-one basis or entitle the Participant to receive cash to the value of a share. Details of the plan are included in 
the Remuneration Report on pages 30 to 48. 

The total expense recognised for share-based payments during the ﬁnancial year for the Group was $3,899,000 (2017: $1,865,000). 

MOVEMENT DURING THE YEAR 
The following table sets out the number of Rights outstanding as at 30 June.

Outstanding at 1 July 

Granted during the year

Forfeited during the year1

Vested 

Lapsed during the year

Outstanding at 30 June

2018
NUMBER

2017
NUMBER

7,544,012

3,220,198

3,205,820

4,524,508

(694,031)

(200,694)

(2,233,182)2

(633,547)

—

—

7,189,0723

7,544,012

1.  These Rights were forfeited by executives that left during the year. 

2.  These Rights vested subsequent to 30 June 2018 but were measured based on performance up to 30 June 2018. This includes 360,829 

Rights in relation to executives that left in prior years which will be cash settled.

3.  This includes 341,095 Rights in relation to executives that left in prior years which will be cash settled if they vest at the end of the 

testing period. 

During the year ended 30 June 2018, the Group granted 726,626 shares to senior management as part payment of their short-term 
incentives for the year ended 30 June 2017. The total cost of $1,060,874 was expensed in the Consolidated Statement of Proﬁt or Loss 
and Other Comprehensive Income in the year ended 30 June 2017. 

ACCOUNTING POLICY 
The Group provides remuneration to senior management in the form of share-based payments, whereby employees render 
services as consideration for equity instruments (equity-settled transactions). 

The cost for equity-settled transactions is determined by the fair value at the date when the grant is made using an appropriate 
valuation model. That cost is recognised in employee beneﬁt expense, together with a corresponding increase in share-based 
payment reserves, over the period in which the performance and/or service conditions are fulﬁlled. The cumulative expense 
recognised at each reporting date, until vesting dates, reﬂects the extent to which the vesting period has expired. The share-
based payments can be settled with either cash or equity at the election of the Group. 

79

 
 
 
 
NINE ANNUAL REPORT 2018

NOTES TO THE CONSOLIDATED 
FINANCIAL STATEMENTS continued
for the year ended 30 June 2018

3  CAPITAL STRUCTURE AND MANAGEMENT (CONTINUED)

3.5  FINANCIAL INSTRUMENTS 

3.5(a)  FINANCIAL RISK MANAGEMENT
The Group’s principal ﬁnancial instruments, other than derivatives, comprise cash and short-term deposits and credit facilities (refer 
to Note 2.1). The main purpose of these ﬁnancial instruments is to manage liquidity and to raise ﬁnance for the Group’s operations. 
The Group has various other ﬁnancial instruments, such as trade and other receivables and trade and other payables, which arise 
directly from its operations. 

The Group uses derivatives in accordance with Board approved policies to reduce the Group’s exposure to adverse ﬂuctuations 
in interest rates and foreign exchange rates. Derivative instruments that the Group uses to hedge risks such as interest rate, foreign 
currency and commodity price movements include: 
•  Interest rate swaps; and 
•  forward foreign currency contracts.

The Group’s risk management activities are carried out centrally, under policies as approved by the Board, in cooperation with the 
Group’s operating units so as to maximise the beneﬁts associated with centralised management of Group risk factors.

3.5(b)  CAPITAL RISK MANAGEMENT
The Group manages its capital to ensure that entities in the Group will be able to continue as going concerns while maximising 
the return to shareholders through the optimisation of net debt and total equity balances. 

Capital risk management focuses on the maturity proﬁle and stability of debt facilities. The Group’s capital structure is reviewed 
to maintain: 
•  suﬃcient ﬁnance for the business at a reasonable cost; and
•  suﬃcient funds available to the business to implement its capital expenditure and business acquisition strategies.

3.5(b)(i) Carrying Value and Fair Values of Financial Assets and Financial Liabilities 
The carrying value of a ﬁnancial asset or liability will approximate its fair value where the balances are predominantly short-term in 
nature; can be traded in highly liquid markets; and incur little or no transaction costs. The carrying values of the following accounts 
approximate their fair value:

ACCOUNT

Cash and cash equivalents 

Trade and other receivables

Trade and other payables

NOTES

2.1

2.2

2.4

The Group uses various methods in estimating the fair value of a ﬁnancial asset or liability. The diﬀerent methods have been deﬁned 
as follows:

Level 1: The fair value is calculated using quoted prices in active markets.

Level 2: The fair value is estimated using inputs other than quoted prices included in Level 1 that are observable for the asset or 
liability, through valuation techniques including forward pricing and swap models and using present value calculations. The models 
incorporate various inputs including credit quality of counterparties and foreign exchange spot rates, forward rates and listed share 
prices. Fair values of the Group’s interest-bearing borrowings and loans are determined by using a DCF method using a discount 
rate that reﬂects the issuer’s borrowing rate as at the end of the reporting period. 

Level 3: valuation techniques for which the lowest level input that is signiﬁcant to the fair value measurement is unobservable. The fair 
value of the option over the controlled entity is determined based on a multiple of the controlled entity’s EBITDA at a future date. 
As such, the fair value of the ﬁnancial liability moves based on the EBITDA of the controlled entity and a signiﬁcant increase/
(decrease) in the EBITDA of the controlled entity would result in higher/(lower) fair value of the ﬁnancial liability.

80

 NINE ANNUAL REPORT 2018

S
T
A
T
E
M
E
N
T
S

F
I
N
A
N
C
A
L

I

N
O
T
E
S

T
O
T
H
E
C
O
N
S
O
L
I
D
A
T
E
D

Fair values hierarchy has been determined as follows for ﬁnancial assets and ﬁnancial liabilities of the Group at 30 June 2018.

Level 1: Investment in listed equities (refer to Note 6.1).

Level 2: Forward foreign exchange contracts, interest rate swaps and Interest bearing borrowings and options over listed equities. 

Level 3: Options over unlisted shares and options over controlled entities.

There were no transfers between the Level 1, Level 2 and Level 3 fair value measurements during the year. 

The following table lists the carrying values and fair values of the Group’s derivative ﬁnancial assets and ﬁnancial liabilities at 
balance date:

Derivative ﬁnancial liabilities

Option over controlled entity — current*

Option over controlled entity — non-current

Total derivative ﬁnancial instruments — liabilities

Loan facilities — non-current

Syndicated facility unsecured — at amortised cost

Total loan facilities 

2018

2017

CARRYING 
AMOUNT
$’000

FAIR
VALUE
$’000

CARRYING 
AMOUNT
$’000

NOTE

5.3

5.3

3.1

26,228

603

26,831

26,228

603

26,831

157,646

157,646

157,646

157,646

21,197

29,068

50,265

291,175

291,175

FAIR
VALUE
$’000

21,197

29,068

50,265

291,175

291,175

*   The Group has recognised a $3.2 million gain for mark to market movements related to the options exercisable by the Group over 
the 40.8% shares which it does not currently own in CarAdvice, in accordance with the sale and purchase agreement signed on 
acquisition of CarAdvice during the ﬁnancial year ended 30 June 2017. Given these options are exercisable during the next ﬁnancial 
year (30 June 2019), the liability associated with the option is now classiﬁed as a current liability on the Group’s balance sheet. 
(2017: mark to market movement related to 40% unacquired Pedestrian Group Pty Ltd’s shares. The remaining 40% was fully acquired 
during the year ended 30 June 2018). 

3.5(b)(ii)   Market risk factors
The key risk factors that arise from the Group’s activities, including the Group’s policies for managing these risks, are outlined below. 
Market risk is the risk that the fair value or future cash ﬂows of the Group’s ﬁnancial instruments will ﬂuctuate because of changes in 
market prices. The market risk factors to which the Group is exposed are discussed in further detail below.

Liquidity risk
Liquidity risk is the risk that the Group cannot meet its ﬁnancial commitments as and when they fall due. To help reduce this risk, 
the Group ensures it has readily accessible funding arrangements available. 

The contractual maturity of the Group’s ﬁxed and ﬂoating rate derivatives, other ﬁnancial assets and other ﬁnancial liabilities are 
shown in the following tables. The amounts presented represent the future undiscounted principal and interest cash ﬂows and 
therefore do not equate to the values shown in the Statement of Financial Position.

81

 
 
 
 
NINE ANNUAL REPORT 2018

NOTES TO THE CONSOLIDATED 
FINANCIAL STATEMENTS continued
for the year ended 30 June 2018

3  CAPITAL STRUCTURE AND MANAGEMENT (CONTINUED)

CONTRACTUAL MATURITY (NOMINAL CASH FLOWS)

2018

2017

LESS THAN
1 YEAR
$’000

1 TO 2 
YEAR(S)
$’000

2 TO 5 
YEARS
$’000

OVER 5 
YEARS
$’000

LESS THAN
1 YEAR
$’000

1 TO 2 
YEAR(S)
$’000

2 TO 5 
YEARS
$’000

OVER 5 
YEARS
$’000

Derivatives — outﬂows1

Option over controlled entity (Note 5.2) 
— current

26,228

Option over controlled entity (Note 5.2) 
— non-current

21,197

—

—

603

—

14,270

16,170

Other ﬁnancial assets1

Cash assets

36,375

—

—

Trade and other receivables

285,469

4,973

165,800

Other ﬁnancial liabilities1

—

—

66,700

261,339

—

—

9,186

114,079

Trade and other payables

225,460

25,460

7,262

1,401

248,399

59,642

Debt facilities (including interest)2

5,300

134,094

35,774

—

8,621

301,121

—

—

1.  For ﬂoating rate instruments, the amount disclosed is determined by reference to the interest rate at the last repricing date. 

2. This assumes the amount drawn down at 30 June 2018 remains drawn until the facilities mature.

—

—

—

—

—

—

INTEREST RATE RISK
Interest rate risk refers to the risks that the value of a ﬁnancial instrument or cash ﬂows associated with the instrument will ﬂuctuate 
due to changes in market interest rates. 

Interest rate risk arises from interest-bearing ﬁnancial assets and liabilities that the Group utilises. Non-derivative interest bearing 
assets are predominantly cash. The Group’s debt facilities are all ﬂoating rate liabilities, which gives rise to cash ﬂow interest rate risks. 

The Group’s risk management policy for interest rate risk seeks to minimise the eﬀects of interest rate movements on its asset and 
liability portfolio through active management of the exposures. 

The Group maintains a mix of long-term and short-term debt to manage these risks as deemed appropriate. The Group designates 
which of its ﬁnancial assets and ﬁnancial liabilities are exposed to a fair value or cash ﬂow interest rate risk, such as ﬁnancial assets 
and liabilities with a ﬁxed interest rate or ﬁnancial assets and liabilities with a ﬂoating interest rate that is reset as market rates change.

At balance date, the Group had the following mix of ﬁnancial assets and ﬁnancial liabilities exposed to Australian ﬂoating interest 
rate risk that were not designated as cash ﬂow hedges. 

82

 NINE ANNUAL REPORT 2018

S
T
A
T
E
M
E
N
T
S

F
I
N
A
N
C
A
L

I

N
O
T
E
S

T
O
T
H
E
C
O
N
S
O
L
I
D
A
T
E
D

2018

2017

AVERAGE 
INTEREST 
RATE
P.A. %

FLOAT-
ING
RATE
 $’000

NON-
INTEREST 
BEARING 
$’000

AVERAGE 
INTEREST 
RATE
P.A. %

FLOAT-
ING
RATE
 $’000

NON-
INTEREST 
BEARING 
$’000

TOTAL
 $’000

TOTAL
 $’000

Financial assets 

Cash and cash equivalents 

2.0

36,375

—

36,375

Trade and other receivables

5.86

126,916

293,023

419,939

Financial liabilities 

Trade and other payables

Syndicated facilities — at amortised cost

N/A

3.31

N/A 259,583

259,583

157,646

—

157,646

2.0

5.87

N/A

3.07

66,700

—

66,700

92,990

264,624

357,614

N/A

308,041

308,041

291,175

—

291,175

Interest rate sensitivity analysis 
There will be no material impact on net proﬁt after tax if interest rates were higher or lower by 1% with all other variables held 
constant. A sensitivity of 1% was selected as it is considered reasonable given the current level of both the short-term and long-term 
Australian ﬁnancial market. 

3.5(c)  CREDIT RISK EXPOSURES
Credit risk is the risk that a contracting entity will not complete its obligations under a ﬁnancial instrument and cause the Group 
to make a ﬁnancial loss. The Group has exposure to credit risk on all ﬁnancial assets included in the Group’s statement of ﬁnancial 
position. To help manage this risk, the Group: 
•  has a policy for establishing credit limits; and
•  manages exposures to individual entities it either transacts with or with which it enters into derivative contracts (through a system 

of credit limits).

The Group’s credit risk is mainly concentrated across a number of customers and ﬁnancial institutions. The Group does not have 
any signiﬁcant credit risk exposure to a single customer or group of customers, or individual institutions, other than to related parties. 
The Group has a loan balance due from Stan Entertainment Pty Limited of $126.9 million (Refer Note 5.6(a)), the recoverability of 
which is subject to certain assumptions (Refer Note 2.2). Refer Note 2.2 for details on the Group’s policy on impairment, its ageing 
analysis of trade receivables and the movement in the allowance for doubtful debts. 

Trade receivables include the following credit concentration:

Advertising 

Television stations

Other

2018
$’000

195,316

13,122

57,151

2017
$’000

175,603

13,589

45,068

265,589

234,260

83

 
 
 
 
NINE ANNUAL REPORT 2018

NOTES TO THE CONSOLIDATED 
FINANCIAL STATEMENTS continued
for the year ended 30 June 2018

3  CAPITAL STRUCTURE AND MANAGEMENT (CONTINUED)

3.5(c)(i)  Credit risk
The maximum exposure to credit risk is the carrying amount of current receivables. For those non-current receivables, the maximum 
exposure to credit risk at the reporting date is the carrying amount of each class of receivables. Collateral is not held as security.

3.5(c)(ii) Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash ﬂows of a ﬁnancial instrument will ﬂuctuate because of changes in 
foreign exchange rates. The Group’s exposure to the risk of changes in foreign exchange rates related primarily to trade payables 
and receivables from contractual payments. 

The Group manages this foreign currency risk by entering into cross-currency hedges. 

ACCOUNTING POLICY 
The Group uses derivative ﬁnancial instruments such as foreign currency contracts to hedge its risks associated with interest rate 
and foreign currency ﬂuctuations. Such derivative ﬁnancial instruments are stated at fair value.

The fair value of forward exchange contracts is calculated by reference to current forward exchange rates for contracts with 
similar maturity proﬁles.

For the purposes of hedge accounting, hedges are classiﬁed as either fair value hedges when they hedge the exposure to 
changes in the fair value of a recognised asset or liability, or cash ﬂow hedges where they hedge exposure to variability in cash  
ﬂows that is either attributable to a particular risk associated with a recognised asset or liability or a forecasted transaction.

In relation to fair value hedges, any gain or loss from remeasuring the hedging instrument at fair value is recognised 
immediately in proﬁt or loss as a ﬁnance cost. Any gain or loss attributable to the hedged risk on re-measurement of the 
hedged item is adjusted against the carrying amount of the hedged item and recognised in proﬁt and loss. Any adjustment 
tothe carrying amount of a hedged interest-bearing ﬁnancial instrument is recognised over the remaining term of the hedging 
relationship using the Eﬀective Interest Rate method. 

For derivatives that do not qualify for hedge accounting, any gains or losses arising from changes in fair value are taken 
directly to proﬁt or loss for the year.

84

 NINE ANNUAL REPORT 2018

S
T
A
T
E
M
E
N
T
S

F
I
N
A
N
C
A
L

I

N
O
T
E
S

T
O
T
H
E
C
O
N
S
O
L
I
D
A
T
E
D

2018
$’000

74,489

(9,177)

65,312

2017
$’000

(1,779)

14,363

12,584

274,978

82,493

(190,853)

(57,256)

(347)

(18,243)

(8)

4,583

 — 

(2,047)

(2,020)

901

65,312

(63)

(54)

163

81,136

(3,210)

(1,500)

(4,474)

(2,158)

12,584

4  TAXATION 

4.1  TAXES 

Current tax expense/(beneﬁt)

Deferred tax expense relating to the origination and reversal of temporary diﬀerences

Income tax expense

Reconciliation of tax expense to prima facie tax payable

Proﬁt/(loss) from continuing operations

Prima facie income tax/(beneﬁt)expense at the Australian rate of 30% 

Tax eﬀect of:

Share of associates’ net proﬁts

Diﬀerence between tax and accounting proﬁt from disposal of properties 

Deferred tax liability movement in investment and tangible assets

Write up of derivative ﬁnancial instruments and impairment and write down of investments

Withholding tax refund not assessable

Post, digital and visual eﬀects oﬀset

Research and development tax oﬀset

Other items — net

Income tax expense

4.2  DEFERRED TAX ASSETS AND LIABILITIES 
Deferred tax relates to the following:

CONSOLIDATED
STATEMENT
OF FINANCIAL
POSITION

CONSOLIDATED STATEMENT 
OF PROFIT OR LOSS 
AND OTHER 
COMPREHENSIVE INCOME

Indeﬁnite life television licence 

TV licence fees accrued

Employee beneﬁts provision

Other provisions and accruals

Investments in associates

Accelerated depreciation for tax purposes

Other

2018
$’000

2017
$’000

 (143,300)

 (143,300)

 3,382

 15,109

 20,368

 (1,958)

(72,522)

5,872

1,706

 14,986

 19,525

 (1,855)

(86,792)*

 13,504

Net deferred income tax liabilities

 (173,049)

 (182,226)

2018
$’000

—

 1,676

123

843

 (103)

14,270

 (7,632)

9,177

2017
$’000

—

(10,970)

 568

(12,803)

 (163)

19,492*

(10,487)

(14,363)

*   In the current year, the Group noted that the tax base applied to certain assets was understated. This resulted in a $12.2 million 

overstatement of the Group’s deferred tax liability that arose on the 2013 restructure of the Group. Accordingly, the Group has reduced  
its deferred tax liability by $12.2 million and recognised a commensurate increase in opening retained earnings as of 1 July 2016.

  There was no earnings impact to the 2018 or 2017 years as a result of this adjustment.

85

 
 
 
 
NINE ANNUAL REPORT 2018

NOTES TO THE CONSOLIDATED 
FINANCIAL STATEMENTS continued
for the year ended 30 June 2018

4  TAXATION (CONTINUED)

ACCOUNTING POLICY 
Current tax liabilities are measured at the amount expected to be paid to the taxation authorities based on the current year’s 
taxable income. The tax rules and tax laws used to compute the amount are those that are enacted at the balance date.

Deferred income tax is provided on all temporary diﬀerences at the reporting date between the tax bases of assets and 
liabilities and their carrying amounts for ﬁnancial reporting purposes.

Deferred income tax liabilities are recognised for all taxable temporary diﬀerences:
•  except where the deferred income tax liability arises from the initial recognition of an asset or liability in a transaction that is 
not a business combination and, at the time of the transaction, aﬀects neither the accounting proﬁt nor taxable proﬁt or loss; 
or

•  in respect of taxable temporary diﬀerences associated with investments in subsidiaries, associates and interests in joint 

ventures, except where the timing of the reversal of the temporary diﬀerences can be controlled and it is probable that the 
temporary diﬀerences will not reverse in the foreseeable future.

Deferred income tax assets are recognised for all deductible temporary diﬀerences, carry-forward of unused tax assets and 
unused tax losses, to the extent that it is probable that taxable proﬁt will be available against which the deductible temporary 
diﬀerences, and the carry-forward of unused tax assets and unused tax losses, can be utilised except:
•  where the deferred income tax asset relating to the deductible temporary diﬀerence arises from the initial recognition of 
an asset or liability in a transaction that is not a business combination and, at the time of the transaction, aﬀects neither 
the accounting proﬁt not taxable proﬁt or loss; or

•  in respect of deductible temporary diﬀerences associated with investments in subsidiaries, associates and interests in joint 

ventures, deferred tax assets are only recognised to the extent that it is probable that the temporary diﬀerences will reverse 
in the foreseeable future and taxable proﬁt will be available against which the temporary diﬀerences can be utilised.

The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the extent that it is no 
longer probable that suﬃcient taxable proﬁt will be available to allow all or part of the deferred income tax asset to be utilised.

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset 
is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the 
reporting date.

Income taxes relating to items recognised directly in equity are recognised in other comprehensive income and not in the proﬁt 
or loss for the year.

86

 NINE ANNUAL REPORT 2018

S
T
A
T
E
M
E
N
T
S

F
I
N
A
N
C
A
L

I

N
O
T
E
S

T
O
T
H
E
C
O
N
S
O
L
I
D
A
T
E
D

TAX CONSOLIDATION
Nine Entertainment Co. Holdings Limited (“Nine”) and its 100% owned Australian subsidiaries are part of a tax consolidated 
group. As a result, members of the group have entered into a tax sharing arrangement in order to allocate income tax expense 
to the wholly-owned subsidiaries on a pro-rata basis. In addition, the agreement provides for the allocation of income tax 
liabilities between the entities should the head entity default on its tax obligations. At the balance date, the possibility of default 
is remote. The head entity of the tax consolidated group is Nine. 

Nine has recognised the current tax liability of the tax consolidated group. 

Members of the tax consolidated group are part of a tax funding agreement. The tax funding agreement provides for the 
allocation of current and deferred taxes to members of the tax consolidated group in accordance with their taxable income 
for the year. The allocation of taxes under the tax funding agreement is recognised as an increase/decrease in the subsidiaries’ 
intercompany accounts with the head entity. The Group has applied the group allocation approach to determine the 
appropriate amount of current and deferred tax to allocate to each member of the tax consolidated group. 

OTHER TAXES
Revenues, expenses and assets are recognised net of the amount of GST except:
•  where the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case 
the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and

•  receivables and payables are stated with the amount of GST included.

The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables 
in the statement of ﬁnancial position.

Cash ﬂows are included in the Statement of Cash Flows on a gross basis and the GST components of cash ﬂows arising from 
investing and ﬁnancing activities, which are recoverable from, or payable to, the taxation authority, are classiﬁed as operating 
cash ﬂows. Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the 
taxation authority.

87

 
 
 
 
NINE ANNUAL REPORT 2018

NOTES TO THE CONSOLIDATED 
FINANCIAL STATEMENTS continued
for the year ended 30 June 2018

5  GROUP STRUCTURE 

5.1  INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD 

5.1(a)  INVESTMENTS AT EQUITY ACCOUNTED AMOUNT:

Associated entities — unlisted shares

2018
$’000

12,479

2017
$’000

12,324

5.1(b)  INVESTMENTS IN ASSOCIATES AND JOINT VENTURES
Interests in associates are accounted for using the equity method of accounting. Information relating to associates is set out below:

PRINCIPAL ACTIVITY

COUNTRY OF 
INCORPORATION

30 JUNE
2018

30 JUNE
2017

% INTEREST1

Darwin Digital Television Pty Ltd

Television broadcast

Intrepica Pty Ltd

Oztam Pty Ltd

RateCity Pty Ltd

Online learning service

Television audience measurement

Operator of a ﬁnancial product 
comparison service

Stan Entertainment Pty Ltd

SVOD service 

TX Australia Pty Ltd

Television transmission

Australia

Australia

Australia

Australia

Australia

Australia

1.  The proportion of ownership is equal to the proportion of voting power held.

5.1(c)  CARRYING AMOUNT OF INVESTMENTS IN ASSOCIATES

Balance at the beginning of the ﬁnancial year

Share of associates’ net proﬁt for the year

Dividends received or receivable

Disposal of Australian News Channel Pty Ltd and other Associates

Carrying amount of investments in associates at the end of the ﬁnancial year

50

27

33

50

50

33

2018
$’000

12,324

1,155

(1,000)

—

12,479

50

27

33

50

50

33

2017
$’000

19,680

212

(1,200)

(6,368)

12,324

88

 NINE ANNUAL REPORT 2018

S
T
A
T
E
M
E
N
T
S

F
I
N
A
N
C
A
L

I

N
O
T
E
S

T
O
T
H
E
C
O
N
S
O
L
I
D
A
T
E
D

5.1(d)    SHARE OF ASSOCIATES AND JOINT VENTURES NET (LOSS)/PROFIT 
The following table illustrates the Group’s aggregate share of net proﬁt/(loss) after income tax from associates and joint ventures. 

Net proﬁt/(loss) after income tax from continuing operations

2018
$’000

2017
$’000

(30,951)

(36,301)

The Group’s current year share of losses of associates and joint ventures not recognised is $32.1 million (2017: $36.7 million). 
The Group’s cumulative share of losses of associates and joint ventures not recognised is $127.3 million (2017: $95.6 million). 
These losses are not recognised as the carrying value of these investments is nil.

5.1(e)  SHARE OF ASSOCIATES AND JOINT VENTURES ASSETS AND LIABILITIES 

Current assets

Non-current assets

Total assets

Current liabilities

Non-current liabilities

Total liabilities

2018
$’000

73,459

18,738

92,197

47,831

161,536

209,367

2017
$’000

86,228

18,255

104,483

42,356

147,519

189,875

89

 
 
 
 
NINE ANNUAL REPORT 2018

NOTES TO THE CONSOLIDATED 
FINANCIAL STATEMENTS continued
for the year ended 30 June 2018

5  GROUP STRUCTURE (CONTINUED)

5.1(f)  IMPAIRMENT
There was no impairment recorded during the current ﬁnancial year (2017: Nil). 

ACCOUNTING POLICY 
Associates are entities over which the Group has signiﬁcant inﬂuence and which are not subsidiaries. Signiﬁcant inﬂuence is the 
power to participate in the ﬁnancial and operating policy decisions of the entity but is not control or joint control over those policies. 

A joint venture is a type of joint arrangement whereby the parties that have joint control of the arrangement have rights to the 
net assets of the joint venture. Joint control is the contractually agreed sharing of control of an arrangement, which exists only 
when decisions about the relevant activities require unanimous consent of the parties sharing control. 

The investments in the associate or joint venture are accounted for using the equity method. They are carried in the 
consolidated Statement of Financial Position at cost plus post-acquisition changes in the Group’s share of net assets of the 
associates, less any impairment. Goodwill relating to the associate or joint venture is included in the carrying amount of the 
investment and is neither amortised nor individually tested for impairment. The consolidated Statement of Consolidated Proﬁt or 
Loss and Other Comprehensive Income reﬂects the Group’s share of the results of operations of the associates or joint ventures. 
Dividends received from associates and joint ventures are recognised in the consolidated ﬁnancial statements as a reduction in 
the carrying amount of the investment.

When the Group’s share of losses in the associate or joint venture equals or exceeds its investment in the associate or joint 
venture, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the 
associate or joint venture.

The ﬁnancial statements of the associate or joint venture are prepared for the same reporting period as the Group. 
When necessary, adjustments are made to bring the accounting policies in line with those of the Group. 

IMPAIRMENT
After application of the equity method, the Group determines whether it is necessary to recognise an impairment loss on its 
investment in its associate or joint venture. At each reporting date, the Group performs an impairment test to determine whether 
there is objective evidence that the investment in the associate or joint venture is impaired. If there is such evidence, the Group 
calculates the amount of impairment as the diﬀerence between the recoverable amount of the associate or joint venture and its 
carrying value, then recognises the loss as “Share of proﬁt of an associate” in the Statement of Consolidated Proﬁt or Loss and 
Other Comprehensive Income.

90

 NINE ANNUAL REPORT 2018

S
T
A
T
E
M
E
N
T
S

F
I
N
A
N
C
A
L

I

N
O
T
E
S

T
O
T
H
E
C
O
N
S
O
L
I
D
A
T
E
D

5.2  INVESTMENT IN CONTROLLED ENTITIES 
The consolidated ﬁnancial statements include the ﬁnancial statements of Nine Entertainment Co. Holdings Limited and its controlled 
entities. Signiﬁcant controlled entities and those included in an ASIC instrument with the parent entity are:

FOOTNOTE

PLACE OF
INCORPORATION

Nine Entertainment Co. Holdings Ltd

Channel 9 South Australia Pty Ltd

CarAdvice.com Pty Ltd1

ecorp Pty Ltd

General Television Corporation Pty Limited

Mi9 New Zealand Limited 

Micjoy Pty Ltd

NBN Enterprises Pty Limited

NBN Pty Ltd

Nine Films & Television Pty Ltd

Nine Films & Television Distribution Pty Ltd

Nine Network Australia Pty Ltd

Nine Network Australia Holdings Pty Ltd

Nine Network Marketing Pty Ltd

Nine Network Productions Pty Limited

Nine Entertainment Group Pty Limited 

NEC Mastheads Pty Ltd 

Nine Entertainment Co. Pty Ltd

Nine Digital Pty Ltd 

Pay TV Holdings Pty Limited

Petelex Pty Limited

Pedestrian Corporation Holdings Pty Limited2

Pedestrian Group Pty Limited2

Pink Platypus Pty Ltd

Queensland Television Holdings Pty Ltd

Queensland Television Pty Ltd

Shertip Pty Ltd

Swan Television & Radio Broadcasters Pty Ltd

TCN Channel Nine Pty Ltd 

Television Holdings Darwin Pty Limited

Territory Television Pty Ltd

White Whale Pty Ltd

A, B

A, B

A, B

A, B

A, B

A, B

A, B

A, B

B

A, B

A, B

B

A, B

A, B

A, B

A, B

A, B

A, B

A, B

B

A, B

A, B

A, B

A, B

A, B

A, B

A, B

A, B

Australia

Australia

Australia

Australia

Australia

New Zealand

Australia

Australia

Australia

Australia

Australia

Australia

Australia

Australia

Australia

Australia

Australia

Australia

Australia

Australia

Australia

Australia

Australia

Australia

Australia

Australia

Australia

Australia

Australia

Australia

Australia

Australia

OWNERSHIP 
INTEREST
JUNE 2018
%

OWNERSHIP 
INTEREST
JUNE 2017
%

Parent Entity

Parent Entity

100

59.2

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

59.2

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

60

60

100

100

100

100

100

100

100

100

100

A. These controlled entities have entered into a deed of cross guarantee with the parent entity under ASIC 
Corporations (Wholly-owned Companies) Instrument 2016/785 — the “Closed Group” (refer to Note 5.4).

B. Members of the “Extended Closed Group” (refer to Note 3.1 and 5.4 for further detail).

1.  The Group currently owns 59.2% of the shares CarAdvice, however it is 100% consolidated in accordance with accounting standards.

2.  The Group owned 60% of the shares in these entities at the start of the ﬁnancial year but had consolidated them as 100% in 
accordance with Accounting Standards. The Group became the 100% owner of these entities on 8 May 2018 (Refer note 5.3) 

91

 
 
 
 
NINE ANNUAL REPORT 2018

NOTES TO THE CONSOLIDATED 
FINANCIAL STATEMENTS continued
for the year ended 30 June 2018

5  GROUP STRUCTURE (CONTINUED)

ACCOUNTING POLICY 

BASIS OF CONSOLIDATION 
The consolidated ﬁnancial statements comprise of the ﬁnancial statements of the parent entity and its subsidiaries as at 
30 June 2018. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the 
investee and has the ability to aﬀect those returns through its power over the investee. Controlled entities are de-consolidated 
from the date control ceases. 

Subsidiary acquisitions are accounted for using the acquisition method of accounting. The ﬁnancial statements of subsidiaries 
are prepared for the same reporting year as the parent entity, using consistent accounting policies. Adjustments are made to 
bring into line any dissimilar accounting policies that may exist. All intercompany balances and transactions, including unrealised 
proﬁts arising from intra-group transactions, have been eliminated in full. Unrealised losses are eliminated unless costs cannot 
be recovered.

Non-controlling interest in the results and equity of subsidiaries are shown separately in the consolidated proﬁt or loss and other 
comprehensive income, consolidated statement of changes in equity and balance sheet respectively.

5.3  BUSINESS COMBINATIONS

ACQUISITIONS IN 2018

Acquisition of remaining 40% interest in Pedestrian Group Pty Ltd
In May 2018, the Group acquired the remaining 40% of the shares and voting interests in Pedestrian Group Pty Ltd and Pedestrian 
Corporation Holdings Pty Ltd (“Pedestrian”) for a cash consideration of $39.3 million plus acquisition costs. The option exercise price 
was determined at the date of the exercise of the option based on EBITDA of Pedestrian at that time. Pedestrian has been 100% 
consolidated from the date of initial acquisition of its 60% shares, as the Group had obtained eﬀective control and the exercise of 
the put and call option was considered probable. 

During the year ended 30 June 2018, the Group recognised an expense of $17.9 million in speciﬁc items for the mark to market 
movements on the put and call option in relation to Pedestrian prior to it being settled. 

Acquisition of 80% interest in Future Women Pty Ltd
In January 2018, the Group acquired 80% of the shares and voting interests in Future Women Pty Ltd (“Future Women”) for cash 
consideration of $2.5 million. There is a put and call option for the remaining 20% not owned by the Group that can be exercised 
for the years ending 30 June 2020 through to 30 June 2022. The option exercise price is to be determined at the date of the 
exercise of the option based on the EBITDA of Future Women. 

The Group has completed its fair value assessment of the assets and liabilities acquired and as a result has recognised goodwill of 
$598,000. This has been allocated to the Digital segment. 

Future Women has been 100% consolidated as the Group has gained eﬀective control and it is highly probable that the Group will 
acquire the remaining the 20% due to the put and call options. A derivative liability of $603,000 has been recognised with respect 
to Future Women issued capital not acquired. 

ACQUISITIONS IN 2017

ACQUISITION OF CARADVICE.COM PTY LTD
In September 2016, the Group acquired 59.22% of the shares and voting interests in CarAdvice.com Pty Ltd (“CarAdvice”) for cash 
consideration of $17.3 million plus acquisition costs of $153,150. There is a put and call option for the remaining 40.78% not owned by 
the Group that can be exercised for the years ending 30 June 2018 and 30 June 2019. The option exercise price is to be determined 
at the date of the exercise of the option based on EBITDA of CarAdvice adjusted for working capital at that time. CarAdvice has 
been 100% consolidated from the date of initial acquisition of its 59.22% shares, as the Group had obtained eﬀective control and the 
exercise of the put and call option was considered probable. 

During the year ended 30 June 2018, the Group recognised a gain of $3.2 million in speciﬁc items for the reduction in the mark to 
market value on the put and call option in relation to CarAdvice. 

92

 NINE ANNUAL REPORT 2018

S
T
A
T
E
M
E
N
T
S

F
I
N
A
N
C
A
L

I

N
O
T
E
S

T
O
T
H
E
C
O
N
S
O
L
I
D
A
T
E
D

ACCOUNTING POLICY 
The acquisition method of accounting is used to account for all business combinations regardless of whether equity instruments 
or other assets are acquired. Cost is measured as the fair value of the assets given, shares issued or liabilities incurred or 
assumed at the acquisition date. Where equity instruments are issued in a business combination, the fair value of the instruments 
is their published price at the acquisition date unless, in rare circumstances, it can be demonstrated that the published price 
at the acquisition date is an unreliable indicator of fair value and that other evidence and valuation methods provide a more 
reliable measure of fair value. Transaction costs arising on the issue of equity instruments are recognised directly in equity.

Except for non-current assets or disposal groups classiﬁed as held for sale (which are measured at fair value less costs to sell), 
all identiﬁable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially 
at their fair values at the acquisition date, irrespective of the extent of any Non-Controlling interest. The excess of the cost 
of the business combination over the net fair value of the Group’s share of the identiﬁable net assets acquired is recognised 
as goodwill. If the cost of acquisition is less than the Group’s share of the net fair value of the identiﬁable net assets of the 
subsidiary, the diﬀerence is recognised as a gain in the Statement of Comprehensive Income, but only after a reassessment of 
the identiﬁcation and measurement of the net assets acquired.

Where settlement of any part of the consideration is deferred, the amounts payable in the future are discounted to their present 
value as at the acquisition date. The discount rate used is the Group’s incremental borrowing rate, being the rate at which 
similar borrowing could be obtained from an independent ﬁnancier under comparable terms and conditions.

5.4  DEED OF CROSS GUARANTEE
Pursuant to ASIC Corporations (Wholly-owned Companies) Instrument 2016/785 and various deeds of cross guarantee entered 
into with the parent entity, certain controlled entities of Nine Entertainment Co. Holdings Limited have been granted relief from the 
Corporations Act 2001 requirements for preparation, audit and publication of accounts. The Statement of Consolidated Proﬁt or Loss 
and Other Comprehensive Income of the entities which are members of the “Closed Group” and the “Extended Closed Group” for 
the year ended 30 June 2018 is as follows:

Consolidated Statement of Proﬁt or Loss 
and Other Comprehensive Income

Proﬁt/(loss) from continuing operations before income tax

268,399

(194,222)

268,399

(194,253)

Income tax expense

(62,159)

(11,066)

(62,159)

(11,066)

CLOSED GROUP1

EXTENDED CLOSED GROUP2

2018
$’000

2017
$’000

2018
$’000

2017
$’000

Net proﬁt/(loss) after income tax from operations

206,240

(205,288)

206,240

Dividends paid during the period

Transfers from reserves to equity

(81,504)

(73,304)

(81,504)

—

20,335

—

(205,319)

(73,304)

20,335

487,3613

478,4753

229,073

220,488

353,809

229,073

Accumulated proﬁts at the beginning of the ﬁnancial year

Accumulated proﬁts at the end of the ﬁnancial year

220,488

345,224

1.  Closed Group are those entities party to the Deed of Cross Guarantee.

2. Refer to Note 5.2. 

3.  See Note 4.2 for details of an adjustment made to deferred tax liabilities and opening retained earnings as reﬂected in the 

30 June 2017 ﬁnancial year.

93

 
 
 
 
NINE ANNUAL REPORT 2018

NOTES TO THE CONSOLIDATED 
FINANCIAL STATEMENTS continued
for the year ended 30 June 2018

5  GROUP STRUCTURE (CONTINUED) 
The Consolidated Statement of Financial Position of the entities which are members of the “Closed Group” and the “Extended 
Closed Group” for the year ended 30 June 2018 is as follows:

Current assets

Cash and cash equivalents

Trade and other receivables

Program rights and inventories

Property, plant and equipment held for sale

Other assets

Income tax receivables

Total current assets

Non-current assets

Receivables

Program rights

Investment in associates accounted for using the equity method

Investment in group entities

Investment in listed equities

Property, plant and equipment

Intangible assets

Other assets 

Total non-current assets

Total assets

Current liabilities

Trade and other payables

Income tax liabilities

Provisions

Derivative ﬁnancial instruments

Total current liabilities

Non-current liabilities

Payables

Interest-bearing loans and borrowings

Deferred tax liabilities

Derivative ﬁnancial instruments

Provisions

Total non-current liabilities

Total liabilities

Net assets

CLOSED GROUP

EXTENDED CLOSED GROUP

2018
$’000

2017
$’000

2018
$’000

2017
$’000

22,394

277,864

166,026

18,528

27,065

—

55,492

254,454

179,828

50,941

9,497

12,931

22,394

277,864

190,427

18,528

27,065

—

55,492

254,454

190,320

50,941

9,497

13,495

511,877

563,143

536,278

574,199

169,890

69,710

12,479

86,438

—

104,982

846,144

62,159

137,059

63,259

12,324

83,340

—

128,010

847,515

75,266

132,180

69,865

12,479

86,428

4,468

104,982

846,144

62,159

110,359

63,356

12,324

83,330

5,646

128,010

847,515

75,266

1,351,802

1,346,773

1,318,705

1,325,806

1,863,679

1,909,916

1,854,983

1,900,005

220,313

246,628

223,647

247,572

33,587

50,854

26,228

—

47,932

21,197

33,586

50,854

26,228

330,982

315,757

334,315

34,123

157,646

174,020

603

39,369

405,761

736,743

1,126,936

59,642

291,175

183,156*

29,068

34,522

597,563

913,320

996,596

34,123

157,646

174,016

603

39,369

405,757

740,072

1,114,911

—

47,932

21,197

316,701

59,642

291,175

183,148*

29,068

34,522

597,555

914,256

985,749

*   See note 4.2 for details of an adjustment made to deferred tax liabilities and opening retained earnings as reﬂected in the 

30 June 2017 ﬁnancial year.

94

 NINE ANNUAL REPORT 2018

S
T
A
T
E
M
E
N
T
S

F
I
N
A
N
C
A
L

I

N
O
T
E
S

T
O
T
H
E
C
O
N
S
O
L
I
D
A
T
E
D

PARENT ENTITY

2018
$’000

2017
$’000

50,796

31,171

1,106,728

1,058,928

1,157,524

1,090,099

479

269,951

270,430

887,094

751,998

7,794

127,302

887,094

480

117,810

118,290

971,809

751,998

4,956

214,855

971,809

(477)

(477)

(186,421)

(186,421)

5.5  PARENT ENTITY DISCLOSURES

a. Financial Position

Current assets

Non-current assets

Total assets

Current liabilities

Non-current liabilities

Total liabilities

Net assets

Contributed equity

Reserves

Retained earnings

Total equity

b. Comprehensive (loss)/income

Net (loss)/proﬁt for the year

Total comprehensive (loss)/income for the year

5.6  RELATED PARTY TRANSACTIONS 

5.6(a)  TRANSACTIONS WITH RELATED PARTIES 
The following table provides the total amount of transactions that were entered into with related parties for the relevant ﬁnancial year.

Rendering of services to and other revenue from — 

Associates of Nine Entertainment Co.:

Stan Entertainment Pty Ltd — revenue

Stan Entertainment Pty Ltd — interest income

Ratecity Pty Ltd

Dividends received from — 

Listed Equity investments of Nine Entertainment Co.:

Southern Cross Media

Associates of Nine Entertainment Co.:

Oztam Pty Ltd

2018
$’000

2017
$’000

10,251

6,626

71

5,185

4,567

82

—

2,688

1,000

1,200

95

 
 
 
 
NINE ANNUAL REPORT 2018

NOTES TO THE CONSOLIDATED 
FINANCIAL STATEMENTS continued
for the year ended 30 June 2018

5  GROUP STRUCTURE (CONTINUED) 

Amounts owed by related parties — 

Stan Entertainment Pty Ltd

Ratecity Pty Ltd

Loans to related parties —

Stan Entertainment Pty Ltd1

Darwin Digital Television Pty Ltd2

Other2

2018
$’000

1,486

148

2017
$’000

2,643

160

126,916

92,990

2,910

192

2,760

525

1.   The loans granted to the related party are interest bearing on interest rates that prevail on arm’s length transactions. The interest is 

currently being capitalised and is included within the loan balance above.

2. The loans granted to these related parties are non-interest bearing. 

Terms and conditions of transactions with related parties
All of the above transactions were conducted under normal commercial terms and conditions. Outstanding balances at the year 
end in relation to these transactions, disclosed under “amounts owed by related parties”, are made on terms equivalent to those 
that prevail on arm’s length transactions, are interest free and settlement occurs in cash.

For the year ended 30 June 2018, the Group has not made any allowance for doubtful debts relating to amounts owed by related 
parties. An impairment assessment is undertaken each ﬁnancial year by examining the ﬁnancial position of the related party and 
the market in which the related party operates to determine whether there is objective evidence that a related party receivable 
is impaired. When such objective evidence exists, the Group recognises an allowance for the impairment loss.

5.6(b)  PARENT ENTITY
Nine Entertainment Co. Holdings Limited is the ultimate parent entity of the Group incorporated within Australia and is the most 
senior parent in the Group which produces ﬁnancial statements available for public use.

5.6(c)  CONTROLLED ENTITIES, ASSOCIATES AND JOINT ARRANGEMENTS
Investments in associates and joint arrangements are set out in Note 5.1.

Interests in signiﬁcant controlled entities are set out in Note 5.2.

5.6(d)  KEY MANAGEMENT PERSONNEL

5.6(d)(i)  Transactions with key management personnel 
All transactions between the Group and its key management personnel and their personally related entities are conducted under 
normal commercial terms and conditions unless otherwise noted.

5.6(d)(ii)   Compensation of key management personnel 

REMUNERATION BY CATEGORY

Short-term employee beneﬁts

Post-employment beneﬁts

Long-term beneﬁts

Termination beneﬁts

Share-based payments

Total remuneration of key management personnel

Detailed remuneration disclosures are provided in the Remuneration Report on pages 30 to 48.

96

2018
$

2017
$

5,714,876

6,526,278

136,154

25,012

154,532

34,390

—

1,933,501

2,650,117

1,455,240

8,526,159

10,103,941

6  OTHER 

6.1  OTHER FINANCIAL ASSETS 

Non-Current

Investments in listed entities1 

Closing balance at 30 June 

 NINE ANNUAL REPORT 2018

S
T
A
T
E
M
E
N
T
S

F
I
N
A
N
C
A
L

I

N
O
T
E
S

T
O
T
H
E
C
O
N
S
O
L
I
D
A
T
E
D

2018
$’000

4,468

4,468

2017
$’000

5,646

5,646

1.   Investment in Yellow Brick Road (ASX:YBR). In 2017, the Group disposed of shares in Southern Cross Media Group Ltd (ASX:SXL) for net 

proceeds of $117,497,556, resulting in a gain on disposal of $20,335,000.

ACCOUNTING POLICY
The investment in listed equities is classiﬁed as a Level 1 instrument as described in Note 3.5(b). Fair value was determined 
with reference to a quoted market price with a mark to market loss of $1,178,000 (2017:$19,217,000 gain) adjusted against the 
investment for the year ended 30 June 2018. 

Certain of the Group’s investments are categorised as investments in listed equities under AASB9 — Financial Instruments.

When ﬁnancial assets are recognised initially, they are measured at fair value plus, in the case of assets not recorded at fair 
value through proﬁt or loss, directly attributable transaction costs.

RECOGNITION AND DERECOGNITION
All regular way purchases and sales of ﬁnancial assets are recognised on the trade date i.e., the date that the Group commits 
to purchase or sell the asset. Regular way purchases or sales are purchases or sales of ﬁnancial assets under contracts that 
require delivery of the assets within the period established generally by regulation or convention in the market place. Financial 
assets are derecognised when the right to receive cash ﬂows from the ﬁnancial assets has expired or when the entity transfers 
substantially all the risks and rewards of the ﬁnancial assets. If the entity neither retains nor transfers substantially all of the risks 
and rewards, it derecognises the asset if it has transferred control of the assets.

SUBSEQUENT MEASUREMENT
Investments in listed equities are non-derivative ﬁnancial assets, principally equity securities, which meet the deﬁnition of equity 
instruments. Upon initial recognition under AASB 9, the Group made an irrevocable election, on an instrument by instrument 
basis, to present subsequent changes in the fair value of its investments in listed equities in a separate component of equity. 
Dividends from investments in listed equities are recognised in proﬁt or loss unless the dividend clearly represents a recovery 
of part of the cost of the investment.

The fair values of investments that are actively traded in organised ﬁnancial markets are determined by reference to quoted 
market bid prices at the close of business on the reporting date. For investments with no active market, fair values are determined 
using valuation techniques. Such techniques include: using recent arm’s length market transactions; reference to the current market 
value of another instrument that is substantially the same; discounted cash ﬂow analysis; and option pricing models, making as 
much use of available and supportable market data as possible and keeping judgemental inputs to a minimum.

97

 
 
 
 
NINE ANNUAL REPORT 2018

NOTES TO THE CONSOLIDATED 
FINANCIAL STATEMENTS continued
for the year ended 30 June 2018

6  OTHER (CONTINUED)

6.2  DEFINED BENEFITS PLAN

PLAN INFORMATION
Deﬁned beneﬁt members receive lump sum beneﬁts on retirement, death, disablement and withdrawal. The deﬁned beneﬁt section 
of the Plan is closed to new members. All new members receive accumulation only beneﬁts.

REGULATORY FRAMEWORK
The Superannuation Industry (Supervision) (SIS) legislation governs the superannuation industry and provides the framework within 
which superannuation plans operate. The SIS Regulations require an actuarial valuation to be performed for each deﬁned beneﬁt 
superannuation plan every three years, or every year if the plan pays deﬁned beneﬁt pensions. 

RESPONSIBILITIES FOR THE GOVERNANCE OF THE PLAN
The Plan’s Trustee is responsible for the governance of the Plan. The Trustee has a legal obligation to act solely in the best interests 
of Plan beneﬁciaries. The Trustee has the following roles:
•  administration of the Plan and payment to the beneﬁciaries from Plan assets when required in accordance with Plan rules; 
•  management and investment of the Plan assets; and
•  compliance with superannuation law and other applicable regulations. 

The prudential regulator, the Australian Prudential Regulation Authority (APRA), licenses and supervises regulated superannuation plans.

RISKS
There are a number of risks to which the Plan exposes the Company. The more signiﬁcant risks relating to the deﬁned beneﬁts are:
•  Investment risk — the risk that investment returns will be lower than assumed and the Company will need to increase contributions 

to oﬀset this shortfall;

•  Salary growth risk — the risk that wages or salaries (on which future beneﬁt amounts will be based) will rise more rapidly than 

assumed, increasing deﬁned beneﬁt amounts and thereby requiring additional employer contributions; and

•  Legislative risk — the risk that legislative changes could be made which could increase the cost of providing the deﬁned beneﬁts. 

The deﬁned beneﬁt assets are invested in the AMP Future Directions Balanced investment option. The assets have a 55% weighting 
to equities and therefore the Plan has a signiﬁcant concentration of equity market risk. However, within the equity investments, 
the allocation both globally and across the sectors is diversiﬁed. The assets held to support accumulated beneﬁts, including the 
accumulation accounts in respect of deﬁned beneﬁt members, are held in the investment options selected by the member. 

SIGNIFICANT EVENTS
There were no plan amendments aﬀecting the deﬁned beneﬁts payable, curtailments or settlements during the year. 

VALUATION
The actuarial valuation of the deﬁned beneﬁts fund for the year ended 30 June 2018 was performed by Mercer Investment 
Nominees Limited for the purpose of satisfying accounting requirements.

98

RECONCILIATION OF THE NET DEFINED BENEFIT ASSET

FINANCIAL YEAR ENDED

Net deﬁned beneﬁt asset at start of year

Current service cost

Net interest

Actual return on Plan assets less interest income

Actuarial losses/(gains) arising from changes in ﬁnancial assumptions

Actuarial gains arising from liability experience

Employer contributions

Net deﬁned beneﬁt asset at end of year

RECONCILIATION OF THE FAIR VALUE OF PLAN ASSETS

FINANCIAL YEAR ENDED

Fair value of Plan assets at beginning of the year

Interest income

Actual return on Plan assets less Interest income

Employer contributions

Contributions by Plan participants

Beneﬁts paid

Taxes, premiums and expenses paid

Fair value of planned assets obligations at 30 June 

RECONCILIATION OF THE PRESENT VALUE OF THE DEFINED BENEFIT OBLIGATION

FINANCIAL YEAR ENDED

Present value of deﬁned beneﬁt obligations at beginning of year

Current service cost

Interest cost

Contributions by Plan participants

Actuarial losses/(gains) arising from changes in ﬁnancial assumptions

Actuarial (gain)/losses arising from liability experience

Beneﬁts paid

Taxes, premiums and expenses paid

 NINE ANNUAL REPORT 2018

S
T
A
T
E
M
E
N
T
S

F
I
N
A
N
C
A
L

I

N
O
T
E
S

T
O
T
H
E
C
O
N
S
O
L
I
D
A
T
E
D

30 JUNE 2018
$’000

30 JUNE 2017
$’000

22,851

(667)

708

2,484

(459)

647

20

25,584

19,286

(598)

516

3,789

1,254

(1,420)

24

22,851

30 JUNE 2018
$’000

30 JUNE 2017
$’000

55,320

1,903

2,484

20

741

(1,878)

(107)

58,483

54,979

1,667

3,789

24

704

(5,759)

(84)

55,320

30 JUNE 2018
$’000

30 JUNE 2017
$’000

32,469

35,693

667

1,196

741

459

(647)

(1,878)

(107)

598

1,151

704

(1,254)

1,420

(5,759)

(84)

Present value of deﬁned beneﬁt obligations at 30 June 

32,900

32,469

The deﬁned beneﬁt obligation consists entirely of amounts from Plans that are wholly or partly funded. 

99

 
 
 
 
NINE ANNUAL REPORT 2018

NOTES TO THE CONSOLIDATED 
FINANCIAL STATEMENTS continued
for the year ended 30 June 2018

6  OTHER (CONTINUED)

FAIR VALUE OF PLAN ASSETS
As at 30 June 2018, total Plan assets of $58,483,000 are held in AMP Future Directions Balanced investment option. 

The percentage invested in each asset class at the reporting date is:

AS AT

Australian Equity

International Equity

Fixed Income

Property

Alternatives/Other

Cash

1.  Asset allocation as at 31 March 2018 (2017: 31 March 2017).

The fair value of Plan assets includes no amounts relating to:
•  any of the Company’s own ﬁnancial instruments; or
•  any property occupied by, or other assets used by, the Company.

SIGNIFICANT ACTUARIAL ASSUMPTIONS

AS AT

Assumptions to Determine Beneﬁt Cost

Discount rate

Expected salary increase rate

Assumptions to Determine Beneﬁt Obligation

Discount rate

Expected salary increase rate

30 JUNE 
20181

30 JUNE 
20171

21%

33%

12%

6%

20%

8%

24%

28%

14%

7%

18%

9%

30 JUNE 2018 30 JUNE 2017

3.6% pa

2.0% pa

3.1% pa

2.0% pa

3.4% pa

2.0% pa

3.6% pa

2.0% pa

SENSITIVITY ANALYSIS
The deﬁned beneﬁt obligation as at 30 June 2018 under several scenarios is presented below.

Scenarios A and B relate to discount rate sensitivity. Scenarios C and D relate to salary increase rate sensitivity.

•  Scenario A: 0.5% pa lower discount rate assumption.
•  Scenario B: 0.5% pa higher discount rate assumption.
•  Scenario C: 0.5% pa lower salary increase rate assumption.
•  Scenario D: 0.5% pa higher salary increase rate assumption.

100

 NINE ANNUAL REPORT 2018

S
T
A
T
E
M
E
N
T
S

F
I
N
A
N
C
A
L

I

N
O
T
E
S

T
O
T
H
E
C
O
N
S
O
L
I
D
A
T
E
D

% P.A.

Discount rate

Salary increase rate

Deﬁned beneﬁt obligation ($’000s)1

1.  Includes deﬁned beneﬁt contributions tax provision.

SCENARIO A
–0.5% PA 
DISCOUNT 
RATE

SCENARIO B
+0.5% PA 
DISCOUNT 
RATE

SCENARIO C
–0.5% PA 
SALARY 
INCREASE 
RATE

SCENARIO D
+0.5% PA 
SALARY 
INCREASE 
RATE

2.9% pa

2.0% pa

34,084

3.9% pa

2.0% pa

31,768

3.4% pa

1.5% pa

31,948

3.4% pa

2.5% pa

33,884

BASE CASE

3.4% pa

2.0% pa

32,899

The deﬁned beneﬁt obligation has been recalculated by changing the assumptions as outlined above, whilst retaining all other 
assumptions.

ASSET-LIABILITY MATCHING STRATEGIES
No asset and liability matching strategies have been adopted by the Plan.

FUNDING ARRANGEMENTS
The ﬁnancing objective adopted at the 1 July 2015 actuarial investigation of the Plan, in a report dated 25 February 2016, is to 
maintain the value of the Plan’s assets at least equal to:
•  100% of accumulation account balances (including additional accumulation accounts of deﬁned beneﬁt members); plus
•  110% of deﬁned beneﬁt Leaving Service Beneﬁts. 

In that valuation, it was recommended that the Company contributes to the Plan as follows:

Deﬁned Beneﬁt members:

CATEGORY

EMPLOYER CONTRIBUTIONS RATE (% OF SALARIES)

A

A1

nil

nil

Plus any compulsory or voluntary member pre-tax (salary sacriﬁce) contributions.

For A1 members, the employer should also make the relevant Superannuation Guarantee contributions to members’ chosen funds.

Accumulations members:
•  the Superannuation Guarantee rate of Ordinary Time Earnings (or such lesser amount as required to meet the Employer’s 

obligations under Superannuation Guarantee legislation or employment agreements); plus

•  any additional employer contributions agreed between the Employer and a member (e.g. additional salary sacriﬁce contributions).

EXPECTED CONTRIBUTIONS

FINANCIAL YEAR ENDING

Expected employer contributions

30 JUNE 2019 
$’000

—

101

 
 
 
 
NINE ANNUAL REPORT 2018

NOTES TO THE CONSOLIDATED 
FINANCIAL STATEMENTS continued
for the year ended 30 June 2018

6  OTHER (CONTINUED)

MATURITY PROFILE OF DEFINED BENEFIT OBLIGATION
The weighted average duration of the deﬁned beneﬁt obligation as at 30 June 2018 is six years (30 June 2017: seven years). 

EXPECTED BENEFIT PAYMENTS FOR THE FINANCIAL YEAR ENDING ON:

30 June 2019

30 June 2020

30 June 2021

30 June 2022

30 June 2023

Following ﬁve years

$’000

3,031

4,807

2,914

4,597

4,179

20,973

ACCOUNTING POLICY 
The Group contributes to a deﬁned beneﬁt superannuation fund which requires contributions to be made to a separately 
administered fund. 

The cost of providing beneﬁts under the deﬁned beneﬁt plan is determined separately for each plan using the projected unit 
credit actuarial valuation method.

Re-measurements, comprising actuarial gains and losses, the eﬀect of the asset ceiling (excluding net interest) and the return on 
plan assets (excluding net interest), are recognised immediately in the statement of ﬁnancial position with a corresponding debit 
or credit to a separate component of equity in the period in which they occur. Re-measurements are not reclassiﬁed to proﬁt or 
loss in subsequent periods.

Past service costs are recognised in the Statement of Comprehensive Income on the earlier of the date of the plan amendment 
or curtailment, and the date that the Group recognises restructuring-related costs.

Net interest is calculated by applying the discount rate to the net deﬁned beneﬁt liability or asset. The Group recognises the 
following changes in the net deﬁned beneﬁt obligation under “expenses” in the Statement of Comprehensive Income (by 
function):
•  service costs comprising current service costs, past-service costs, gains and losses on curtailments and non-routine 

settlements; and

•  net interest expense or income.

6.3  AUDITOR’S REMUNERATION

Amounts paid or payable for services by the auditor of the parent entity, Ernst & Young Australia, for:

Audit and review of the ﬁnancial report of the consolidated entity

Taxation services

Assurance related services

Other non-audit services1

Total auditors’ remuneration

2018

2017

561,365

411,877

23,600

—

535,357

592,641

51,061

175,972

996,842

1,355,031

1.   The directors are satisﬁed that these were provided in compliance with general standard of independence for auditors imposed by 

the Corporations Act 2001. 

102

 NINE ANNUAL REPORT 2018

S
T
A
T
E
M
E
N
T
S

F
I
N
A
N
C
A
L

I

N
O
T
E
S

T
O
T
H
E
C
O
N
S
O
L
I
D
A
T
E
D

6.4  CONTINGENT LIABILITIES AND RELATED MATTERS
The consolidated entity has made certain guarantees regarding contractual leases, performance and other commitments of 
$11,725,000 (2017:$10,828,000). All contingent liabilities are unsecured. The probability of having to meet these commitments is remote 
and there are uncertainties relating to the amount and the timing of any outﬂows.

The parent entity was a party to the Deed of Cross Guarantee entered into with various Group companies. Refer to Note 5.4 for 
further details. Refer to Note 2.8 for disclosure of the Group’s commitments. The operation of the Deed of Cross Guarantee has the 
eﬀect of joining the parent entity as a guarantor to the Group’s commitments and contingencies.

6.5  EVENTS AFTER THE BALANCE SHEET DATE

NATIONAL PLAYOUT CENTRE
On 1 July 2018, Nine completed the transfer of assets relating to the National Playout Centre, and employment of a number of 
employees, to NPC Media Pty Ltd, a joint venture company owned 50% by each of Nine and Seven Network (Operations) Limited. 
The purchase price payable by NPC Media Pty Ltd reﬂected the written down value of the transferred assets, subject to adjustment for 
leave liabilities assumed by NPC Media Pty Ltd for transferring employees. NPC Media Pty Ltd now provides playout services to Nine. 

MERGER WITH FAIRFAX MEDIA 
On 26 July 2018, Nine and Fairfax Media (ASX: FXJ) announced that they had entered into a Scheme Implementation Agreement 
(“the Scheme”) under which the companies will merge. The proposed transaction will, subject to required approvals, be implemented 
by Nine acquiring all Fairfax shares under a Scheme of Arrangement. Under the Scheme of Arrangement, Nine will acquire all of the 
outstanding shares in Fairfax, in return for the issue of 0.3627 shares in Nine and 2.5 cents cash, per Fairfax Share. This will result in 
Nine shareholders holding approximately 51.1% of the expanded capital and Fairfax shareholders holding 48.9%. Further details will be 
announced with the Scheme documentation, expected to be released in October 2018. Nine currently expects that the transaction 
will be completed by December 2018.

Other than noted above, there has not arisen in the interval between the end of the ﬁnancial period and the date of this report 
any item, transaction or event of a material and unusual nature, to aﬀect signiﬁcantly the operations of the consolidated entity, the 
results of those operations, or the state of aﬀairs of the consolidated entity, in future years.

6.6  OTHER SIGNIFICANT ACCOUNTING POLICIES

ACCOUNTING POLICY 

6.6(a)  NEW ACCOUNTING STANDARDS AND INTERPRETATIONS 
A number of new accounting standards have been issued or amended which were not yet eﬀective and may impact the Group’s 
future ﬁnancial statements. To the extent noted below, the Group has assessed the impact of these recently issued or amended 
standards on the Group’s ﬁnancial statements. The standards which may impact the Group’s ﬁnancial report are as follows: 
•  AASB 15 Revenue from Contracts with Customers 

AASB 15 will be eﬀective for the Group from 1 July 2018. It establishes a ﬁve-step framework for determining whether, how 
much and when revenue is recognised. It replaces all existing revenue recognition standards including AASB 118 Revenue. 

    Rendering of services
  The Group’s key business activity is the provision of advertising on television and digital platforms. The Group’s revenue  
recognition policy will change due to it adopting AASB 15, in particular due to performance obligation criteria in AASB15.

 For Television, revenue is currently recognised when the planned advertisement has been broadcast. Under the existing 
revenue recognition policy, the broadcast of an advertisement has been considered to be when revenue and costs can be 
measured reliably and it is probable that the economic beneﬁts will ﬂow to the Group. Digital recognises revenue when the 
media services have been performed.

 Under AASB 15, revenue for Television will be recognised by reference to when an advertisement has been broadcast and 
speciﬁc viewer metrics contained in the agreement with the customer have been met. Revenue for Digital will be recognised 
when the media services contained in the agreement with the customer have been met.

103

 
 
 
 
 
 
 
NINE ANNUAL REPORT 2018

NOTES TO THE CONSOLIDATED 
FINANCIAL STATEMENTS continued
for the year ended 30 June 2018

ACCOUNTING POLICY

Transition
The Group plans to adopt AASB 15 on the required eﬀective date using the modiﬁed retrospective method. Thus, the Group 
will not apply AASB 15 requirements to the comparative period presented. 

Estimated impact of adoption
The Group has performed and completed a detailed impact analysis for adoption of AASB 15. The adjustment to the 
retained proﬁts was determined by ﬁrst ascertaining when an advertising contract is considered fulﬁlled. The Group analysed 
sales data to determine the time it took to fulﬁl its obligations within the advertising contracts to customers. All performance 
obligations that were met after the end of a campaign were considered deferred revenue, with an impact to opening 
retained proﬁts as at 1 July 2018 of a reduction of $2.3 million. 

•  AASB 9 Financial Instruments (eﬀective date 1 January 2018) — AASB 9 was issued in phases, with the phased approach 
reﬂecting a number of versions of the standard being issued. The Company early adopted the version of AASB 9 (issued 
in June 2014) on 1 July 2014, which provided guidance on the classiﬁcation and measurement of ﬁnancial assets. On the 
adoption of AASB 9 (2014), those ﬁnancial assets classiﬁed as either amortised cost, fair value through other comprehensive 
income or fair value through proﬁt and loss were measured as such under AASB 9. The Company’s accounting policies under 
AASB 9 are disclosed in note 3.5. The ﬁnal complete standard, AASB 9 (2014), is eﬀective for the Company commencing 
1 July 2018. The new impairment model requires a 12-month expected credit loss provision to be recognised when ﬁnancial 
instruments are ﬁrst recognised and subsequently, if there is a signiﬁcant increase in credit risk, then a lifetime expected credit 
loss provision needs to be recognised. The key AASB 9 (2014) requirements that have not yet been adopted include the 
impairment of ﬁnancial assets. The Group has performed a preliminary assessment of the impact of the full implementation of 
this standard on the Group’s ﬁnancial statements and the impact is expected to be immaterial. 

•  AASB 16 Leases (eﬀective date 1 January 2019) — The AASB issued a new standard which, amongst other things, will have 
the impact of requiring the Group to account for material operating leases in a similar manner to which it already accounts 
for ﬁnance leases. The Group has not yet assessed the impact of this standard on the Group’s ﬁnancial statements. Refer 
note 2.8 for the Group’s lease commitments. 

•  IFRIC interpretation 23 Uncertainty over income tax treatments (eﬀective date 1 January 2019) — This interpretation 

addresses accounting for income taxes when tax treatments involve uncertainty and speciﬁcally addresses whether an entity 
considers uncertain tax treatments individually or collectively, whether the entity assumes the taxation authorities have full 
knowledge of all information and how the entity measures uncertainty. The Group is still assessing the impact of this standard 
on results in the ﬁnancial statements. 

The Group has not included disclosures of new and amended standards and interpretations that do not have any material 
impact on the ﬁnancial statements. 

6.6(c)  OTHER SIGNIFICANT ACCOUNTING POLICIES 

6.6(c)(i)  Foreign currency translation
Both the functional and presentation currency of Nine Entertainment Co. Holdings Limited and its Australian subsidiaries is 
Australian dollars ($). Each foreign entity in the Group determines its own functional currency and items included in the ﬁnancial 
statements of each foreign entity are measured using that functional currency.

Transactions in foreign currencies are initially recorded in the functional currency at the exchange rates ruling at the date of the 
transaction. Monetary assets and liabilities denominated in foreign currencies are re-translated at the rate of exchange ruling at 
the reporting date. All exchange diﬀerences in the consolidated ﬁnancial report are taken to the Statement of Proﬁt or Loss and 
Other Comprehensive Income, with the exception of those items that are designated as hedges which are recognised in Other 
Comprehensive Income. 

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate 
as at the date of the initial transaction. Non-monetary items measured at fair value in a foreign currency are translated using 
the exchange rates at the date when the fair value was determined.

104

I

D
R
E
C
T
O
R
S

’

DIRECTORS’
DECLARATION

 NINE ANNUAL REPORT 2018

D
E
C
L
A
R
A
T
I
O
N

The Directors of Nine Entertainment Co. Holdings Limited have declared that:

1.  the Directors have received the declarations required by section 295A of the Corporations Act 2001 from the Chief Executive 

Oﬃcer and the Chief Financial Oﬃcer for the year ended 30 June 2018;

2.  in the opinion of the Directors, the consolidated ﬁnancial statements and notes that are set out on pages 53 to 104 and the 
Remuneration Report in pages 30 to 48 in the Director’s Report, are in accordance with the Corporations Act 2001, including:

i.  giving a true and fair view of the consolidated entity’s ﬁnancial position as at 30 June 2018 and of its performance for the 

ﬁnancial year ended on that date; and

ii.  complying with Australian Accounting Standards and the Corporations Regulations 2001

3.  in the opinion of the Directors, there are reasonable grounds to believe that the Company will be able to pay its debts as and 

when they become due and payable;

4.  a statement of compliance with International Financial Reporting Standards has been included on page 58 of the ﬁnancial 

statements; and

5.  in the opinion of the Directors, at the date of this declaration, there are reasonable grounds to believe that the members of the 
Closed Group identiﬁed in Note 5.4 will be able to meet any obligations or liabilities which they are or may become subject to, 
by virtue of the Deed of Cross Guarantee. 

The Directors’ Declaration is made in accordance with a resolution of the Board of Nine Entertainment Co. Holdings Limited.

Peter Costello 
Chairman 

Sydney, 23 August 2018 

Hugh Marks
Chief Executive Oﬃcer and Director

105

 
NINE ANNUAL REPORT 2018

INDEPENDENT AUDITOR’S REPORT

to the Members of Nine Entertainment Co. Holdings Limited

200 George Street 
Sydney  NSW  2000 Australia 
GPO Box 2646 Sydney  NSW  2001 

Tel: +61 2 9248 5555 
Fax: +61 2 9248 5959 
ey.com/au 

Independent Auditor’s Report to the Members of Nine Entertainment 
Co. Holdings Limited  

Report on the Audit of the Financial Report 

Opinion 

We have audited the financial report of Nine Entertainment Co. Holdings Limited (the Company) 
and its subsidiaries (collectively the Group), which comprises the consolidated statement of 
financial position as at 30 June 2018, the consolidated statement of comprehensive income, 
consolidated statement of changes in equity and consolidated statement of cash flows for the year 
then ended, notes to the financial statements, including a summary of significant accounting 
policies, and the directors’ declaration. 

In our opinion, the accompanying financial report of the Group is in accordance with the 
Corporations Act 2001, including: 

a) 

b) 

giving a true and fair view of the consolidated financial position of the Group as at 30 June 
2018 and of its consolidated financial performance for the year ended on that date; and 

complying with Australian Accounting Standards and the Corporations Regulations 2001. 

Basis for Opinion 

We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities 
under those standards are further described in the Auditor’s Responsibilities for the Audit of the 
Financial Report section of our report. We are independent of the Group in accordance with the 
auditor independence requirements of the Corporations Act 2001 and the ethical requirements of 
the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for 
Professional Accountants (the Code) that are relevant to our audit of the financial report in 
Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.  

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis 
for our opinion. 

Key Audit Matters 

Key audit matters are those matters that, in our professional judgement, were of most significance 
in our audit of the financial report of the current year. These matters were addressed in the context 
of our audit of the financial report as a whole, and in forming our opinion thereon, but we do not 
provide a separate opinion on these matters. For each matter below, our description of how our 
audit addressed the matter is provided in that context. 

A member firm of Ernst & Young Global Limited 
Liability limited by a scheme approved under Professional Standards Legislation 

76 

106

 
 
 
 
 
 
 
 
 NINE ANNUAL REPORT 2018

’

A
U
D
I
T
O
R
S
R
E
P
O
R
T

I

N
D
E
P
E
N
D
E
N
T

We have fulfilled the responsibilities described in the Auditor’s Responsibilities for the Audit of the 
Financial Report section of our report, including in relation to these matters. Accordingly, our audit 
included the performance of procedures designed to respond to our assessment of the risks of 
material misstatement of the financial report. The results of our audit procedures, including the 
procedures performed to address the matters below, provide the basis for our audit opinion on the 
accompanying financial report. 

1. Carrying value of intangible assets 

Why significant 

How our audit addressed the key audit matter 

As 30 June 2018, the Group’s consolidated 
statement of financial position included 
$416.5m of goodwill, $477.8m of television 
licences and $17.7m of other intangible 
assets, collectively representing 49% of total 
assets. 

As disclosed in Note 2.6 to the financial 
statements, the Directors have assessed 
goodwill, television licences and other 
identifiable intangible assets for impairment 
or the reversal of prior year impairment. This 
assessment involved critical accounting 
estimates and assumptions, specifically 
relating to future discounted cash flows.  

These estimates and assumptions, are 
summarised in Note 2.6.  

We considered this to be a key audit matter 
given the value of these assets relative to 
total assets and the significant judgements 
and assumptions involved in the impairment 
tests. 

Our audit procedures included the following:  

•  Assessed whether the valuation models (“the 
models”) used by the Directors met the 
requirements of Australian Accounting 
Standards. 

•  Evaluated the determination of each Cash 

Generating Unit (“CGU”) with respect to the 
independence of cash inflows generated by 
each CGU. 

•  Tested the mathematical accuracy of the 

models.  

•  Considered the underlying assumptions 

regarding future cash flows used in the models 
by comparing these to the Board approved 
five-year business plan and long term capital 
and content investment plans.  

•  Considered the historical accuracy of the 

Group’s forecasting ability. 

•  Assessed the discount rates, growth rates and 
the terminal growth rates used in the models, 
with involvement from our valuation specialists 
and with reference to external data such as 
broker forecasts and valuations.  

•  Considered the sensitivity analysis performed 
by the Group focusing on the areas in the 
models where a reasonably possible change in 
assumptions could cause the carrying amount 
to differ from its recoverable amount and 
therefore indicate impairment or a reversal of 
prior year impairment. 

•  Considered the adequacy of the disclosures 
relating to intangible assets in the financial 
statements, including those made with respect 
to judgements and estimates. 

A member firm of Ernst & Young Global Limited 
Liability limited by a scheme approved under Professional Standards Legislation 

77 

107

 
 
 
 
 
 
NINE ANNUAL REPORT 2018

INDEPENDENT AUDITOR’S REPORT continued
to the Members of Nine Entertainment Co. Holdings Limited

2. Valuation of program rights 

Why significant 

How our audit addressed the key audit matter 

At 30 June 2018, the program rights balance 
of $247.1m included $177.2m of current and 
$69.9m of non-current program rights.  

As disclosed in Note 2.3 to the financial 
statements, the Directors’ assessment of the 
valuation of program rights involves 
judgement, relating to forecasting the quantum 
of future revenue to be derived from the usage 
of those program rights.   

We considered this a key audit matter due to 
the magnitude of the program rights asset and 
the inherent subjectivity that is involved in 
forecasting future revenue. 

Our audit procedures included the following:  

•  Assessed whether the recognition, valuation 
and amortisation methodology applied by the 
Group met the requirements of Australian 
Accounting Standards.   

•  Compared forecast revenue for material 

program rights to the carrying value of the 
respective program rights.  

•  Assessed the forecast revenue to be derived 

from the usage of program rights by assessing 
the assumptions applied in the Group’s 
calculation with reference to recent historical 
performance of program rights and actual 
revenue earned subsequent to year end.  

•  Evaluated the adequacy of the disclosures in 

the financial report relating to the valuation of 
program rights, including those made with 
respect to judgements and estimates. 

A member firm of Ernst & Young Global Limited 
Liability limited by a scheme approved under Professional Standards Legislation 

78 

108

 
 
 
  
  
  
 
 
 
 NINE ANNUAL REPORT 2018

’

A
U
D
I
T
O
R
S
R
E
P
O
R
T

I

N
D
E
P
E
N
D
E
N
T

3. Recoverability and classification of Stan loan 

Why significant 

How our audit addressed the key audit matter 

At 30 June 2018, a non-current loan 
receivable from the Stan joint venture 
(“Stan”) of $126.9m is recorded in the 
consolidated statement of financial position.  

As disclosed in the notes to the financial 
statements, the Directors’ have exercised 
judgement in assessing the recoverability of 
the receivable at 30 June 2018.  

Our audit procedures included the following:  

•  Assessed whether the requirements of Australian 
Accounting Standards were satisfied to support 
classification as a loan receivable.  

•  Evaluated the Directors’ assessment of the 

recoverability of the loan and their determination 
that repayments continue to be planned and 
likely. These procedures included:  

• 

• 

• 

comparison of forecast performance 
of Stan against actual results in 
respect of subscribers, revenue and 
earnings to 30 June 2018;  

an assessment of the discount rate, 
earnings growth rates and the 
terminal growth rate used in the 
recoverability assessment; and  

reference to external data such as 
broker forecasts and valuations.  

•  Evaluated the adequacy of the disclosures in 

the financial report relating to this matter.  

In assessing future cash flows and, as 
consequence, loan recoverability, the 
Directors considered matters such as:  

•  Stan’s performance compared with 
forecast in respect of subscriber 
numbers, revenue and earnings and 

•  whether future repayment of the loan 

remain planned and likely.  

We considered this to be a key audit matter 
due to the judgements involved in 
considering recoverability and because the 
likelihood of repayment impacts the Group’s 
classification of this balance as a loan.  

Should repayment of the loan no longer be 
planned and likely, it would result in the loan 
being reclassified in the statement of 
financial position from loan receivable to an 
investment in associate and the Group’s 
share of any cumulative losses of the joint 
venture being immediately recorded in the 
statement of financial performance. 

A member firm of Ernst & Young Global Limited 
Liability limited by a scheme approved under Professional Standards Legislation 

79 

109

 
 
 
 
  
 
 
 
NINE ANNUAL REPORT 2018

INDEPENDENT AUDITOR’S REPORT continued
to the Members of Nine Entertainment Co. Holdings Limited

Information Other than the Financial Report and Auditor’s Report Thereon 

The directors are responsible for the other information. The other information comprises the 
information included in the Company’s 2018 Annual Report other than the financial report and our 
auditor’s report thereon. We obtained the Directors’ Report that is to be included in the Annual 
Report, prior to the date of this auditor’s report, and we expect to obtain the remaining sections of 
the Annual Report after the date of this auditor’s report.  

Our opinion on the financial report does not cover the other information and we do not and will not 
express any form of assurance conclusion thereon. 

In connection with our audit of the financial report, our responsibility is to read the other 
information and, in doing so, consider whether the other information is materially inconsistent with 
the financial report or our knowledge obtained in the audit or otherwise appears to be materially 
misstated.  

If, based on the work we have performed on the other information obtained prior to the date of this 
auditor’s report, we conclude that there is a material misstatement of this other information, we 
are required to report that fact. We have nothing to report in this regard. 

Responsibilities of the Directors for the Financial Report 

The Directors of the Company are responsible for the preparation of the financial report that gives 
a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 
2001 and for such internal control as the Directors determine is necessary to enable the 
preparation of the financial report that gives a true and fair view and is free from material 
misstatement, whether due to fraud or error. 

In preparing the financial report, the Directors are responsible for assessing the Group’s ability to 
continue as a going concern, disclosing, as applicable, matters relating to going concern and using 
the going concern basis of accounting unless the directors either intend to liquidate the Group or to 
cease operations, or have no realistic alternative but to do so. 

Auditor's Responsibilities for the Audit of the Financial Report 

Our objectives are to obtain reasonable assurance about whether the financial report as a whole is 
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report 
that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee 
that an audit conducted in accordance with the Australian Auditing Standards will always detect a 
material misstatement when it exists. Misstatements can arise from fraud or error and are 
considered material if, individually or in the aggregate, they could reasonably be expected to 
influence the economic decisions of users taken on the basis of this financial report. 

As part of an audit in accordance with the Australian Auditing Standards, we exercise professional 
judgement and maintain professional scepticism throughout the audit. We also: 

 

Identify and assess the risks of material misstatement of the financial report, whether due to 
fraud or error, design and perform audit procedures responsive to those risks, and obtain 
audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of 
not detecting a material misstatement resulting from fraud is higher than for one resulting 
from error, as fraud may involve collusion, forgery, intentional omissions, 
misrepresentations, or the override of internal control. 

A member firm of Ernst & Young Global Limited 
Liability limited by a scheme approved under Professional Standards Legislation 

80 

110

 
 
 
 
 
 NINE ANNUAL REPORT 2018

’

A
U
D
I
T
O
R
S
R
E
P
O
R
T

I

N
D
E
P
E
N
D
E
N
T











Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the Group’s internal control.

Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by the directors.

Conclude on the appropriateness of the directors’ use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant doubt on the Group’s ability to
continue as a going concern. If we conclude that a material uncertainty exists, we are
required to draw attention in our auditor’s report to the related disclosures in the financial
report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are
based on the audit evidence obtained up to the date of our auditor’s report. However, future
events or conditions may cause the Group to cease to continue as a going concern.

Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and
events in a manner that achieves fair presentation.

Obtain sufficient appropriate audit evidence regarding the financial information of the
entities or business activities within the Group to express an opinion on the financial report.
We are responsible for the direction, supervision and performance of the Group audit. We
remain solely responsible for our audit opinion.

We communicate with the Directors regarding, among other matters, the planned scope and timing 
of the audit and significant audit findings, including any significant deficiencies in internal control 
that we identify during our audit. 

We also provide the Directors with a statement that we have complied with relevant ethical 
requirements regarding independence, and to communicate with them all relationships and other 
matters that may reasonably be thought to bear on our independence, and where applicable, 
related safeguards. 

From the matters communicated to the Directors, we determine those matters that were of most 
significance in the audit of the financial report of the current year and are therefore the key audit 
matters. We describe these matters in our auditor’s report unless law or regulation precludes public 
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter 
should not be communicated in our report because the adverse consequences of doing so would 
reasonably be expected to outweigh the public interest benefits of such communication. 

A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation

81

111

 
NINE ANNUAL REPORT 2018

INDEPENDENT AUDITOR’S REPORT continued
to the Members of Nine Entertainment Co. Holdings Limited

Report on the Audit of the Remuneration Report 

Opinion on the Remuneration Report 

We have audited the Remuneration Report included in pages 30 to 48 of the Directors' Report for 
the year ended 30 June 2018. 

In our opinion, the Remuneration Report of Nine Entertainment Co. Holdings Limited for the year 
ended 30 June 2018, complies with section 300A of the Corporations Act 2001. 

Responsibilities 

The directors of the Company are responsible for the preparation and presentation of the 
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our 
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in 
accordance with Australian Auditing Standards. 

Ernst & Young 

John Robinson 
Partner 
Sydney 
23 August 2018 

A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation

82

112

SHAREHOLDER
INFORMATION

TWENTY LARGEST SHAREHOLDERS AS AT 29 AUGUST 2018

RANK NAME

1

2

3

4

5

6

7

8

9

10

11

12

13

HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED 

BIRKETU PTY LTD 

J P MORGAN NOMINEES AUSTRALIA LIMITED 

CITICORP NOMINEES PTY LIMITED 

NATIONAL NOMINEES LIMITED 

CS THIRD NOMINEES PTY LIMITED 

NATIONAL NOMINEES LIMITED 

BNP PARIBAS NOMINEES PTY LTD 

BAINPRO NOMINEES PTY LIMITED 

HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED 

BNP PARIBAS NOMINEES PTY LTD 

NATIONAL NOMINEES LIMITED 

BNP PARIBAS NOMS PTY LTD 

14 WARBONT NOMINEES PTY LTD 

15

HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED-GSCO ECA 

16 WOODROSS NOMINEES PTY LTD 

17

18

19

DAVID GYNGELL 

PACIFIC CUSTODIANS PTY LIMITED 

BRISPOT NOMINEES PTY LTD 

20

CITICORP NOMINEES PTY LIMITED 

OPTIONS
There were no options exercisable at the end of the ﬁnancial year.

ESCROWED SHARES
There were no shares in escrow at the end of the ﬁnancial year.

SUBSTANTIAL SHAREHOLDERS
Substantial shareholders as shown in substantial shareholding notices received by the Company as at 29 August are:

NAME

Bruce Gordon/Birketu

Deutsche Bank AG

Pendal Group

National Australia Bank

Legg Mason Asset Management

UBS Group AG

Vinva Investment Management

TOTAL SHARES

130,477,718

92,116,890

76,749,736

46,127,119

45,956,947

45,911,261

43,735,942

 NINE ANNUAL REPORT 2018

I

N
F
O
R
M
A
T
I
O
N

S
H
A
R
E
H
O
L
D
E
R

29 AUG 2018

271,842,673

129,677,718

109,625,450

99,239,958

64,814,038

22,638,686

18,643,000

14,549,000

14,454,766

12,443,281

11,260,472

10,779,754

10,274,846

7,388,847

7,169,149

5,195,921

4,878,048

4,140,038

3,748,224

3,730,598

%IC

31.20

14.88

12.58

11.39

7.44

2.60

2.14

1.67

1.66

1.43

1.29

1.24

1.18

0.85

0.82

0.60

0.56

0.48

0.43

0.43

%

14.97%

10.57%

8.81%

5.30%

5.27%

5.27%

5.02%

113

 
NINE ANNUAL REPORT 2018

SHAREHOLDER
INFORMATION continued

RANGE

1 to 1,000

1,001 to 5,000

5,001 to 10,000

10,001 to 100,000

100,001 and Over

Total

Unmarketable Parcels

VOTING RIGHTS

NO. OF 
HOLDERS

852

1,133

447

500

58

2,990

100

%

28.49

37.89

14.95

16.72

1.94

100.00

3.34

On a show of hands, every member present, in person or by proxy shall have one vote and upon a poll, each share shall have 
one vote.

BUY-BACK

There is no current on-market buy-back.

114

 NINE ANNUAL REPORT 2018

I

N
F
O
R
M
A
T
I
O
N

S
H
A
R
E
H
O
L
D
E
R

CORPORATE DIRECTORY

ABN 60 122 203 892

ANNUAL GENERAL MEETING
The Annual General Meeting will be held at 11.00am AEST 
on Wednesday, 14 November 2018 at the oﬃces of Ashurst Australia, 
5 Martin Place, Sydney 2000.

FINANCIAL CALENDAR 2019
Interim Result  

February 2019

Preliminary Final Result   August 2019

Annual General Meeting   November 2019

COMPANY SECRETARY
Rachel Launders

REGISTERED OFFICE
Nine Entertainment Co. Holdings Limited
24 Artarmon Road
Willoughby NSW 2068

Ph:  +61 2 9906 9999

SHARE REGISTRY
Link Market Services Limited
Level 12, 680 George Street
Sydney NSW 2000

Ph:  1300 888 062 (toll free within Australia)
Ph:  +61 2 8280 7670
Fax:  +61 2 9287 0303

Email: registrars@linkmarketservices.com.au
Website: www.linkmarketservices.com.au

SECURITIES EXCHANGE LISTING
The Company’s ordinary shares are listed on the Australian Securities Exchange as NEC. 

AUDITORS
Ernst & Young
200 George Street
Sydney NSW 2000

115