Elliott Sends Letter and Presentation to the Directors of BHP Billiton Outlining Shareholder Value Unlock Plan

London (ots/PRNewswire) - Elliott today sent a letter to the
directors of BHP Billiton outlining a plan to unlock value and
improve capital returns to shareholders. The Elliott funds, together
with certain of their affiliates, hold a long economic interest in
respect of approximately 4.1% of the issued share capital of BHP
Billiton plc ("PLC")[1].

In the letter and the accompanying presentation, Elliott outlined a
plan that could enable management to provide BHP shareholders with an
increase in value attributable to their shareholdings of up to c.
48.6% for Limited shareholders and c. 51.0% for PLC shareholders by
following three key steps:

- Step 1: Unifying BHP's Dual-listed company structure into a single
Australian- headquartered and Australian tax resident listed company

- Step 2: Demerging and separately listing BHP's US petroleum
business on the NYSE

- Step 3: Adopting a consistent and value-optimized capital return
policy - an opportunity to monetize the substantial franking credit
balance through discounted off-market buybacks

Elliott is making the letter and presentation publicly available as a
follow-up to its discussions with senior members of BHP's management.
The goal is to provide details of The BHP Shareholder Value Unlock
Plan to all of BHP's shareholders, so that BHP can engage openly with
all parties on the plan to unlock shareholder value.

The letter and presentation can be downloaded at
http://www.valueunlockplanforbhp.com

Full text of the letter follows:

[1] In addition to their long economic interest in PLC, the Elliott
funds, together with certain of their affiliates, hold rights to
acquire up to approximately 0.4% of the issued shares in BHP Billiton
Limited ("Limited").

-----

April 10, 2017

http://www.valueunlockplanforbhp.com

LETTER TO THE DIRECTORS OF EACH OF BHP BILLITON LIMITED ("LIMITED")
AND BHP BILLITON PLC ("PLC" AND TOGETHER WITH LIMITED, "BHP")

Your attention is drawn to the important information which is set out
in the Appendix to this letter. This letter and a related
presentation are being made publicly available at
http://www.valueunlockplanforbhp.com [1]

To the directors of BHP:

Introduction

We are writing to you on behalf of Elliott Associates, L.P. and
Elliott International, L.P. (together, the "Elliott Funds")[2], which
together with certain of their affiliates hold a long economic
interest in respect of approximately 4.1% of the issued share capital
of PLC[3].

Despite being a leading global resources company with a portfolio of
best-in-class large-scale diversified mining assets, in recent years
BHP as an investment has underperformed a portfolio of comparable
mineral and petroleum companies.

Unfortunately, despite the progressive and successful demerger of
South32 in May 2015, BHP's management still cannot deliver optimal
shareholder value without (i) resolving the shareholder value
inefficiencies caused by its dual-listed company ("DLC") structure;
(ii) monetizing the intrinsic value of BHP's US petroleum business
[4], the value of which is being obscured by its continued inclusion
within the group; and (iii) enhancing capital management to an
optimal level.

The BHP Shareholder Value Unlock Plan, which we outline in this
letter and the enclosed presentation (the "Value Unlock Plan"), is
designed to directly address these issues with three key steps:

- Step 1: Unifying BHP's DLC structure into a single
Australian-headquartered and

Australian tax resident listed company

- Step 2: Demerging and separately listing BHP's US petroleum
business on the NYSE

- Step 3: Adopting a policy of consistent and value-optimized capital
returns to shareholders - which would also help BHP's management to
avoid any repetition of prior tendencies to make value-destructive
large-scale acquisitions paid for in cash

Our analysis shows that implementation of the Value Unlock Plan could
enable management to provide BHP shareholders with an increase in
value attributable to their shareholdings of up to c. 48.6% (Limited
shareholders) / c. 51.0% (PLC shareholders).

We are making this letter publicly available as a follow-up to our
discussions with certain senior members of BHP's management, in order
to provide access to the details of the Value Unlock Plan for all of
BHP's shareholders, and so that you can work openly with all
shareholders with regard to our plan for significantly enhancing
shareholder value.

BHP in context

BHP's DLC structure dates back to 2001 and was originally put in
place in order to economically combine PLC and Limited without either
company actually acquiring or merging with the other in the legal
sense.

Today, out of approximately fourteen major corporate groups which
adopted a DLC structure over time, BHP is one of only five
significantly-sized DLCs[5] in the world which remain, of which the
largest by market value is already under review with the objective of
creating greater simplification and strategic flexibility[6]. We,
along with many other market participants, believe that BHP's DLC
structure has far outlived its original utility.

One key aspect of management's inability to deliver optimal value for
BHP's shareholders is that the DLC structure has led to a massive
build-up of franking credits[7] at Limited. Australian tax resident
companies like Limited should be able to pass on all of those tax
credits to shareholders, but BHP cannot do that in an economically
efficient way whilst it retains its legacy DLC structure. The Value
Unlock Plan would rectify that.

A first-class portfolio of assets which are failing to deliver
optimal value for shareholders

Despite the first-class quality of most of BHP's assets, BHP as an
investment has underperformed a portfolio of comparable mineral and
petroleum companies in recent years across a number of metrics,
including total shareholder returns - this is clear from the charts
on slides 8 to 10 of the enclosed presentation.

BHP's management took an important first step towards streamlining
BHP's portfolio in order to release value for BHP's shareholders by
demerging South32 in May 2015. However, in isolation, we believe that
the South32 demerger has actually magnified the inefficiencies of
BHP's DLC structure by further decreasing the proportion of BHP's
EBITDA which is generated by PLC.

In our view, most of BHP's underperformance in terms of total
shareholder returns has been driven by the incomplete status of
management's streamlining and value-optimization of BHP's group
structure and asset portfolio. The Value Unlock Plan is designed to
directly address this and would be the logical next step.

The Value Unlock Plan for BHP - addressing key shareholder value
issues

The Value Unlock Plan is intended to directly address BHP's key
shareholder value issues for BHP's owners, with three key steps. Each
step is designed to individually contribute to unlocking significant
shareholder value and we present them in the order in which they
should be undertaken:

Step 1: Unifying BHP into a single Australian-headquartered and
Australian tax resident listed company

Following the South32 demerger, we estimate that PLC now generates
only c. 8.9%[8] of BHP's EBITDA, but PLC's shares account for 39.7%
of BHP's aggregate number of issued shares. The long-term
misalignment of profits vs. shareholder base in the DLC structure has
led to a massive and continuing build-up of franking credits -
totaling US$9.7bn [9] or c. 10% of BHP's market capitalization.

Absent a clearly defined optimal path to monetizing those franking
credits, they are not being appropriately valued by the market.

Over the last 16 years since the completion of the DLC merger, PLC's
shares have traded at an average discount of 12.7% to Limited's
shares. In our view, that sort of price dislocation stems from the
economic asymmetry described above, as between PLC and Limited, which
in turn undermines the fundamental principles and objectives of the
DLC structure, being the achievement of equivalent economic returns
on their shares as between PLC and Limited shareholders.

Unification[10] would:

- create a single Australian-headquartered and Australian tax
resident unified BHP company which would continue to be managed from
Australia. That company could retain BHP's current stock market
listings and continue to be included within key FTSE and ASX stock
indices;

- put BHP's Limited and PLC shareholders on the same footing,
eliminating the current trading value mismatch between the two lines
of shares;

- allow BHP to access the value represented by its existing massive
US$9.7bn franking credit balance, plus future franking credits
generated by the business, for the benefit of all BHP
shareholders[11];

- significantly enhance the scope for, and optimize the value
impact of, BHP share buybacks - unified BHP's management could
return the substantial upcoming excess cashflow to shareholders by
way of 14% discounted off-market share buybacks. That would be a
highly value-accretive way of management deploying a large amount of

capital without any additional operational risk - effectively buying
BHP's own first- class core assets at a meaningful discount to their
market price;

- remove any need to use the Dividend Share Mechanism, thereby
avoiding wastage of valuable franking credits;

- help management to avoid making badly timed acquisitions paid for
in cash, given the opportunity to deploy significant cash resources
in value-enhancing post-unification share buybacks;

- increase the scope for management to pursue appropriate acquisition
opportunities using unified BHP's own shares as consideration; and

- remove certain other material tax, operational and strategic
inefficiencies caused by the DLC structure.

We estimate that the BHP group's tax and other deal costs for
implementing our unification plan would be both reasonable and far
outweighed by the significant shareholder value unlock opportunity to
which it is key. In addition, we do not see any material regulatory
obstacles to BHP implementing our unification plan - for example, a
unified BHP would be tax resident and headquartered in Australia, so
there should be no reason for concern on the part of FIRB[12].

Step 2: Demerging and separately listing BHP's US petroleum
business

Based on commonly utilized valuation metrics for comparable
businesses, the indicated value for BHP's US petroleum business is c.
US$22bn, which is well in excess of the current analyst consensus
valuation for that business.

Our analysis indicates that the US petroleum business has not been
able to successfully contribute to shareholder value at BHP since (i)
it provides no meaningful diversification benefits to BHP as a whole;
(ii) there is a lack of synergies between BHP's US petroleum business
and its mining assets; and (iii) its intrinsic value is being
obscured by bundling it with BHP's other assets.

We believe that within the confines of the existing group, BHP's US
onshore acreage opportunities are extremely limited. BHP has
competing capital allocation alternatives - including its world-
beating mining assets such as those within its iron ore division, and
highly value-accretive post- unification off-market BHP share
buybacks at a 14% discount to market price. In the circumstances,
BHP's management simply cannot justify allocating the capital which
the US onshore assets would need for the US petroleum business to
realize its growth potential or meaningful corporate expansion
activities.

A demerger and separate listing of BHP's US petroleum assets on the
NYSE would:

- unlock the intrinsic value of the US petroleum business and provide
shareholders with access to what we believe would be a much higher
market value for that business;

- allow the demerged US petroleum business to be properly capitalized
and pursue value- accretive strategic opportunities;

- allow BHP's management to fully focus on deriving value from BHP's
unrivalled portfolio of first-tier mineral assets; and

- allow BHP's investors to tailor their own desired exposure to US
energy and petroleum equities rather than being constrained by the
fixed acreage composition and petroleum vs. minerals mix currently
being offered by BHP.

We see the demerger of BHP's Gulf of Mexico assets in combination
with the US onshore petroleum assets as providing a standalone US
petroleum business with consistent cash flow to fund its own further
expansion, allowing BHP to increase its focus on its core
competencies and also helping the value of BHP's remaining core
portfolio to positively re-rate.

Step 3: Adopting a policy of consistent and optimized capital
returns to shareholders

BHP is expected to generate c. US$31bn[13] of excess cashflow in the
next 5 years, assuming the current 50% payout ratio of net income.

Unfortunately, BHP has previously used excess cash to make
value-destructive acquisitions when it acquired certain Fayetteville
assets and Petrohawk. Management should avoid making badly timed
acquisitions for cash and instead return its substantial upcoming
excess cashflow to shareholders by way of highly value-accretive
post-unification 14% discounted off-market share buybacks.

A clearly defined and communicated ongoing 14% discounted off-market
buyback program undertaken by a unified Australian tax resident BHP
which has demerged its US petroleum business would:

- enable BHP to purchase its own shares at a substantial discount,
achieving an overall cost which is c. 5.6% lower[14] than the price
at which BHP can currently buy back its shares;

- release up to c. 66% more[15] franking credits to shareholders; and

- facilitate an initial off-market buyback of at least US$6bn.

We estimate that within the five year period ending June 2022, in
addition to the continuation of the current 50% dividend payout
ratio, adopting this capital return policy as part of the Value
Unlock Plan could result in[16]:

- a total of c. US$33bn being returned to shareholders via share
buybacks;

- c. 29% of core BHP's share capital being repurchased;

- total EPS accretion from buybacks of c. 33% in respect of the
shares remaining in issue after the 14% discounted buyback program;
and

- an increase in BHP's NPV of c. US$20bn (c.21% of BHP's current
market capitalization)[17].

Moreover, BHP could deliver these sorts of significantly enhanced
returns for shareholders whilst still retaining an "A" grade credit
rating[18].

The potential to unlock a significant amount of shareholder value
at BHP

Our analysis indicates that implementation of the Value Unlock Plan
could provide BHP shareholders with an increase in the value
attributable to their shareholdings of up to c. 48.6% (Limited
shareholders) / c. 51.0% (PLC shareholders)[19].

(Photo: http://mma.prnewswire.com/media/488297/Value_Unlock_Plan.jpg
)

Source: Company filings and Elliott's estimates.

Independent analysts' views

Independent research analysts have commented[26] on many of the
issues which underpin the Value Unlock Plan and a selection of those
comments is set out in the Appendix to this letter.

Conclusion and next steps

BHP's management has a remarkable opportunity to significantly
enhance shareholder value. We urge each of you, consistent with your
duties as directors of BHP, to review the Value Unlock Plan in light
of the very real and measurable benefits which we believe they can
have for BHP's shareholders.

Given that our analysis shows that implementation of the Value Unlock
Plan could provide BHP's shareholders with an increase in the value
attributable to their shareholdings of up to c. 48.6% (Limited
shareholders) / c. 51.0% (PLC shareholders), we expect that a full
and open review of our plan by management in the near term would be
welcomed by an overwhelming majority of BHP's owners.

We look forward to you as BHP's directors announcing on a timely
basis the start of your work in formally reviewing the Value Unlock
Plan, along with a commitment to publishing within a reasonable
timeframe the details of the scope and results of that review.

Yours faithfully,

Elliott Advisors (HK) Limited

APPENDIX

Independent analysts' comments on DLC issues

"DLC Structures are not permanent. Based on our analysis we have seen
that DLC structures are not intended to be permanent structures and
nor are they beneficial for shareholders forever. We believe that now
is an appropriate time for BHP to consider unifying the DLC
structure." - UBS, July 14, 2014

"[A] collapse of the DLC such that all shareholders are holders of
Ltd shares, would see all dividends utilise franking credits going
forward. We believe that BHP will be capable of maintaining the fully
franked divided to all shareholders following a collapse of the DLC,
given that the bulk of earnings are generated by the Australian
assets (in particular iron ore) and the payout ratio should be
maintained at ~50%." - UBS, July 14, 2014

"New proposal will lead to wastage of future franking credits...:
Australian shareholders can benefit from tax relief on dividends
("franking credits"). Under the proposed change to the dividend
funding mechanism, Ltd's dividends to plc would have franking credits
attached, but these credits can only be monetized by Australian
shareholders. At 30th June, BHP Ltd had

$10.9bn of franking credits, equivalent to ~4 years of fully franked
Ltd dividends. We believe certain Australian shareholders may
consider the leakage of franking credits to plc shareholders, which
they are unable to monitise, as disadvantaging Ltd shareholders." -
JP Morgan - September 22, 2015

Independent analysts' comments on BHP's US petroleum business

"We have always struggled with US onshore asset as in our view they
do not fit in BHP's strategy of building large scale low cost tier 1
assets and are arguably worth more to someone else." - Citigroup -
April 22, 2016

"On strategy, we think there is no real benefit from portfolio
diversification per se and unless we see a dramatic outperformance of
oil versus iron ore (clearly not the case at present) we see no
reason for BHP to trade ahead of Rio Tinto." - Bernstein - January 5,
2017

Independent analysts' comments on capital returns

"If the DLC were to be collapsed, then every dollar returned via a
buyback would be done through the buyback of Ltd shares which
provided sufficient franking credits existed, could be done at a ~14%
discount to the prevailing share price on the day. This is more
accretive than buying back Plc shares as the discount at which Plc
shares trade to Ltd shares has historically been narrower than 14%.
The off-market buyback of Ltd shares also enables distribution of
franking credits to shareholders that can utilise them" - UBS - July
14, 2014

"Despite >US$30b spent, failed tilts at RIO and Potash Corp and
overpaying for US Shale suggest M&A is not BHP's raison d'être." -
Citigroup - May 27, 2016

"At spot prices BHP would have even stronger free cash flow
generation, largely thanks to iron ore, and be able to significantly
increase shareholder returns. Dividend yield could increase to >6%
and even if a more conservative balance sheet was run it would still
allow for ~US$5b to be returned per year." - Citigroup - Feb 21,
2017

IMPORTANT INFORMATION

This letter is provided solely by Elliott. Many of the statements in
this letter are the opinions, interpretations and/or beliefs of
Elliott which are based on its own analysis of publicly available
information. Elliott is expressing those opinions, interpretations
and beliefs solely in its capacity as an investment adviser to the
Elliott Funds. Any statement or opinion expressed or implied in this
letter is provided in good faith but only on the basis that no
investment decision(s) will be made based on, or other reliance will
be placed on, any of the contents herein by others. Nothing in this
letter, the enclosed presentation or in any related materials is a
statement of or indicates or implies any specific or probable value
outcome for BHP's shareholders in any particular circumstance.
Certain statements and opinions expressed or implied in this letter
are necessarily based on or involve assumptions, because not all
information on BHP is publically available. If any of these
assumptions are incorrect, it could cause our statements and/or
opinions to differ materially.

The Elliott Funds, together with certain of their affiliates, hold a
long economic interest in respect of approximately 4.1% of the issued
share capital of PLC[27]. The Elliott Funds and/or any of their
respective affiliates (i) may at any time in the future, without
notice to any person (other than as required under, or in compliance
with, applicable laws and regulations), increase or reduce their
holdings of any BHP entity's shares or other equity or debt
securities and/or may at any time have long, short, neutral or no
economic or other exposure in respect of any BHP entity's shares or
other equity or debt securities; and/or (ii) may now have and/or at
any time in the future, without notice to any person (other than as
required under, or in compliance with, applicable laws and
regulations), may establish, increase and/or decrease long or short
positions in respect of or related to any BHP entity's shares or
other equity or debt securities, in each case irrespective of whether
or not all or any part of the Value Unlock Plan is, or is expected to
be, implemented. As a result of its arrangements with the Elliott
Funds and/or their affiliates, Elliott has a financial interest in
the profitability of the Elliott Funds' positions in or relating to
BHP.

This letter is published solely for informational purposes and is
not, and should not be construed as, investment, financial, legal,
tax or other advice or recommendations. This letter is not intended
to be and does not constitute or contain any investment
recommendation as defined by Regulation (EU) No 596/2014. No
information in this letter should be construed as recommending or
suggesting an investment strategy.

This letter has been compiled based on publicly available information
(which has not been separately verified by the Elliott Funds,
Elliott, or any of their respective affiliates) and does not:

(i) purport to be complete or comprehensive; or

(ii) constitute an agreement, offer, a solicitation of an offer, or
any advice or recommendation to enter into or conclude any
transaction or take or refrain from taking any other course of action
(whether on the terms shown herein or otherwise).

The market data contained in or utilized for the purposes of
preparing this letter is (unless otherwise specified) as at the end
of trading hours on April 7, 2017. Changes may have occurred or may
occur with respect to such market data and neither the Elliott Funds,
nor Elliott, nor any of their respective affiliates is under any
obligation to provide any updated or additional information or to
correct any inaccuracies in this letter.

The information in this letter contains 'forward-looking statements.'
Specific forward-looking statements can be identified by the fact
that they do not relate strictly to historical or current facts and
include, without limitation, words such as "may", "can", "will",
"expects", "believes", "anticipates", "plans", "estimates",
"projects", "targets", "forecasts", "seeks", "could", "would" or the
negative of such terms or other variations on such terms or
comparable terminology. Similarly, statements that describe any
objectives, plans or goals of the Elliott Funds and/or Elliott and/or
their respective affiliates are forward-looking. Any forward-looking
statements are based on the current intent, belief, expectations,
estimates and projections of Elliott. These statements are not
guarantees of future performance and involve risks, uncertainties,
assumptions and other factors that are difficult to predict and that
could cause actual results to differ materially. Accordingly, you
should not rely upon forward-looking statements as a prediction of
actual results and actual results may vary materially from what is
expressed in or indicated by the forward-looking statements.

No representation or warranty, either expressed or implied, is
provided in relation to the accuracy, completeness or reliability of
the information contained herein, nor is it intended to be a complete
statement or summary of the securities, markets or developments
referred to herein. It should not be regarded by recipients as a
substitute for the exercise of their own judgment. You should obtain
your own professional advice and conduct your own independent
evaluation with respect to the subject matter herein. The information
contained herein has been made available on the basis that the
recipient is a person into whose possession such information may be
lawfully delivered in accordance with the laws of the jurisdiction in
which the recipient is located.

Each of the Elliott Funds, Elliott, and their respective affiliates
expressly disclaims any responsibility or liability for any loss
howsoever arising from any use of, or reliance on, this letter or its
contents as a whole or in part by any person, or otherwise howsoever
arising in connection with this letter.

ABOUT ELLIOTT

Founded in 1977, Elliott manages two funds, Elliott Associates, L.P.
and Elliott International, L.P., with assets under management
totaling more than US$32.7 billion. Elliott's investors include
pension plans, sovereign wealth funds, hospital and university
endowments, charitable foundations, funds-of-funds, individuals and
families, and employees of the firm.

With tens of millions of beneficiary stakeholders located on five
continents, Elliott's primary focus is on risk control, stability,
and steady growth of capital. Today, Elliott has offices in New York,
London, Hong Kong and Tokyo. Elliott is a multi-strategy hedge
fund, carrying out a diverse range of investment activities. Its
strategies include actively managed equity investments in which
Elliott's objectives include promoting shareholder value and good
corporate governance for the benefit of all shareholders.

[1] Together with this letter we are today making publicly available
a presentation that details the points set out below, including our
related analysis (the "Presentation"). The Presentation and this
letter are available at our website
http://www.valueunlockplanforbhp.com.

[2] Founded in 1977, Elliott Management Corporation ("EMC") manages
the two Elliott Funds, with assets under management totalling more
than US$32.7 billion as at the date of this letter. Elliott Advisors
(HK) Limited ("Elliott") is an affiliate of the Elliott Funds and
EMC.

[3] In addition to their long economic interest in PLC, the only
other BHP positions that the Elliott Funds and their affiliates hold
are the rights to acquire up to approximately 0.4% of the issued
shares in Limited. The Elliott Funds may at any time increase or
reduce their holdings of, or economic exposure in respect of, any BHP
entity's shares or other equity or debt securities. See the important
information which is set out in the Appendix to this letter for
further details.

[4] The "US petroleum business" means BHP's US onshore petroleum
assets and its Gulf of Mexico assets.

[5] Based on DLC structures with a combined market capital of over
US$15bn.

[6] As announced by Unilever on April 6, 2017.

[7] When Limited, as an Australian tax resident company, pays tax on
its income it can record that tax paid as franking credits. Limited
then attaches those franking credits to any dividend it makes, or to
any income component of a share buyback which it

undertakes. Those franking credits can then be used by Australian tax
resident shareholders who receive them to offset their own

liability to Australian tax on the dividend income, or income
component of any share buyback consideration, which it receives from
Limited. Further detail on franking credits, their potential wastage
in the current DLC structure and their monetization is set out in the
Appendix to the Presentation.

[8] Calculated by EBITDA contribution split for the last reported
twelve month period, excluding third-party products and unnamed
assets. Based on Elliott estimates of asset ownership between Limited
and PLC, using the asset split at the time of the DLC inception and
assumes (i) no subsequent intra-group asset transfers between PLC and
Limited; and (ii) that assets located in Australia that were acquired
from Western Mining were acquired by, and continue to be held
directly or indirectly by, Limited.

[9] Based on last reported figures.

[10] Unification would be implemented by way of inter-conditional
share-for-share schemes of arrangement of each of Limited and

PLC under which Limited and PLC shareholders would become
shareholders in a single unified BHP public company listco
incorporated in England & Wales, which would 100% own both of
then-delisted Limited and PLC.

[11] Whilst unlocked franking credits could only be used by
Australian tax resident shareholders, non-tendering shareholders
should benefit from incremental accretion and share demand resulting
from monetization of BHP's substantial franking credit balance.

[12] The Foreign Investment Review Board of Australia, which would
review a unification transaction involving a resulting single unified
BHP public company listco which is incorporated in England & Wales.

[13] Free cash flows from operations less free cash flows from
investing and dividends, assuming the current 50% payout ratio of net
income. Calculated by Elliott as the average of the figures produced
by analysts at major international investment banks.

[14] The assumptions utilized in calculating this figure are
described in the Presentation.

[15] The assumptions utilized in calculating this figure are
described in the Presentation.

[16] Assumes annual off-market share buybacks starting at US$6bn and
then utilizing excess cash flow whilst maintaining a 1.3x net debt /
EBITDA target thereafter. Cash flow levels are Elliott's estimates
based on a 1.3x net debt / EBITDA target. Also assumes share price
appreciates annually based on constant multiples and that BHP
conducts annual buybacks at a 14% discount to the post annual EPS
accretion share price.

[17] The NPV is calculated in respect of (i) the increased share
price implied by the EPS accretion, applied to the reduced number of
shares in issue post buybacks; and (ii) the capital returned through
the discounted off-market share buybacks up to June 2022.

[18] "A" grade credit rating means an "A-, A or A+" credit rating.
This could be retained whilst maintaining a net debt/EBITDA ratio of
1.3x (or other appropriate metric).

[19] Please see the Presentation for further details.

[20] These per-share numbers are in respect of the current aggregate
number of BHP shares in issue, except for the franking credits from
buybacks number, which is based on the number of Limited shares
currently in issue.

[21] Enterprise value measured before demerger of BHP's US petroleum
business. Assumes that the BHP share price post-unification would be
the weighted average (by number of shares in issue at Limited and
PLC) of the current share prices of Limited and PLC. The
post-unification (before demerger) enterprise value is therefore
assumed to remain the same as BHP's current enterprise value.

[22] Valuation based on mean values of US petroleum and unified core
BHP shown in the valuation slides in the Presentation.

[23] Valuation based on the NPV of (i) the increase in core BHP's
share price implied by the EPS accretion from the share buybacks
which are proposed by Elliott in the Presentation, applied to the
reduced number of shares in issue post buybacks; and (ii) the capital
thereby returned to shareholders.

[24] NPV of franking credits released from Elliott's proposed
discounted off-market buyback program.

[25] Assumes US$2.5bn of BHP's existing net debt is allocated to the
US petroleum business (c. 0.9x net debt / consensus 18E EBITDA).

[27] In addition to their long economic interest in PLC, the only
other positions that the Elliott Funds and their affiliates hold in
or relating to BHP are the rights to acquire up to approximately 0.4%
of the issued shares in Limited.

[26] The analysts' views mentioned in this letter shall not be taken
to mean or imply (i) that the research reports referred to are a
representative sample of all research reports on the topics
concerned; or (ii) that the authors of the reports or their employing
banks/brokers endorse in any way the Value Unlock Plan or the views
set out in this letter. We have emboldened, by way of emphasis,
certain parts of the original text of the analysts' views which
appear in this letter.

ORIGINAL APA-OTS TEXT - THE INFORMATION CONTAINED IN THIS PRESS RELEASE IS SUBJECT TO THE EXCLUSIVE RESPONSIBILITY OF THE ISSUER | PRN

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