P, ovidecl for the exclusive use of Sreemathy Ganesasubramanya111a t DB Employee on 2018-10-03 TOS:05 >00:00 DO NOT REDISTRIBUTE Deutsche Bank Markets Research

Rating Company Date IZI Hold BHP 1 October 2018 Company Update Australasia Australia Reuters Bloomberg Exchange Ticker Price at 27 Sep 2018 34.48 M&M - Diversified BHP.AX BHP AU ASX BHP Price target - 12mth 34.50 Resources 52 week range (AUD) 35.08 - 25.58 ALL ORDINARIES 6,308 Compendium

Valuation & Risks James Gurry Simplifying but far from simple Research Analyst A cash-back offer for buyers, but is the oil price and the rate of change +61-3-9270-4104 slowing? This report summarizes our published view on BHP Billiton and encompasses a Liam Fitzpatrick deep dive on the assets in conjunction with our most recent commodity outlook Research Analyst reports. +44-207-541-3233

We recently downgraded BHP to HOLD recognising that a large potential Tim Hoff off-market buyback is on offer in the coming months but much of the out Research Analyst performance vs. peers has been driven by the oil price, in our view, and while +61-2-8258-1424 we are not negative on oil, the best gains are probably behind us but we are not negative on the stock. j Price/price relative

Another South 32 in here? We see some assets likely to receive less attention under the renewed "Competition for capital" (these being: Nickel West, Australian oil/gas assets, tax loss carrying energy coal). Together they generate ~$4bn of annual EBITDA with up to $600m of annual capex (current forecasts). We think Jan '17 Jul '17 Jen '18 Jul '18

they hold less strategic importance to the simplified BHP and have an NPV of > - BHP ALL ORDINARIES (Rebased) $15bn (DBe), at >4x EBITDA an EV of $16bn, both these valuations far above net book value near $5bn. Performance (%) 1m 3m 12m Absolute 5.5 5.7 33.8 ALL ORDINARIES -0.8 0.2 10.1 The end of the capital preservation era could also be an opportunity to revisit Source: Deutsche Bank I executive-level change much like FMG (CEO) and Rio Tinto (CFO) have in recent months. jKey indicators (FY1) ROE(%) 17.8 ROA(%) 18.8 Away from macro economic moves in commodity markets, catalysts include the Net debt/equity (%) 15.0 return of the $1 0bn asset sale proceeds from shale asset sale, BHP has scheduled Book value/share (USO) 9.75 a market update on this topic 21-Nov-20118. Price/book (x) 2.6 Net interest cover (x) 21.6 EBIT margin (%) 38.4 Source: Deutsche Bank I

Deutsche Bank AG/Sydney · · h · d · · Distributed on: 30/09/2018 19:30:00 GMT D eutsc h e Ban k d oes an d see k S to d O b us mess Wit companies covere In its rescu, "" , ...,.,v ...... " ...... , " ...... ,v,..., vOOVUOU ..,.., aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. DISCLOSURES AND ANALYST CERTIFICATIONS ARE LOCATED IN APPENDIX 1. MCI (P) 091/04/2018. Provided for the exclusive use of Sreernathy Ganesasubrarnanyam at DB Employee on 2018-10-03T05:05>00:00 DO NOT REDISTRIBUTE 1 October 2018 M&M - Diversified Resources BHP IZI j Figure 1: BHP-RIO buy back history

200 ( Aug-2018 (RIO): US$1.75bn on­ market buy-back completed; US$2.2bn lo be 160 bought back Nov-2007 (BHP) : 1.IS$2Jbnol l• IrMlk ol buy•bacl< Aug-2010 (RIO) ; I Fob•2018 (RIO): I\ USS9.2bnboy •ba.tk (~r:~015 (RIO): US$ 1. Obnbuj •boc, 120 !a.nnauncod i US$0.4bn otf-markel IOMOun

40

- BHP share price (A$) - RIO share price (A$)

Source:Blaomberg LP, Company dara

l Figure 2: BHP buy-back scenario Units 2011 FY19scenario Asset sale proceeds net of tax USSbn 6.3 10.5 Portion of promised capital return for Ltd buyback % 100% 60% Potential buyback amount A$bn 6.0 8.8 AUD/USD exchange rate 0.95 0.72 Market price A$ 47.50 31.48 Buy-back discount (subject to ATO approval) % 14.0% 12.0% Buy-back price A$ 40.85 27.70 Scale back % 78.3% Likely high BHP BIiiiton Ltd shares bought back m 147.0 316.7 % of BHP Billtion Group issued capital % 2.7% 5.9% 1% at BHP Billt Ion Ltd 1ssued capita l % 4.4% 9.9% Capital component A$ 0.28 Additional capital component A$ 9.03 Fully franked dividend component A$ 40.57 Tax value A$ 49.88 Group EBITDA lost on US Shale divestment ussm 928 Group EBITDAlost on US Shale divestment % 3.8% On market Pie US$bn 4.2 On market Pie GBP 3.2 FX GBP:USD 1.31 Share price GBP 15.3 Shares potentially repurchased 208.5 % of Pie shares 10% Total shares off and on market million 525.2 Total shares off and on market % 10%

Source: Company data• 2011 Buyback , 08 estimates for FY19.

Page 2 Deutsche Bank AG/Sydney Provided for t11eex clusive use of Sreemathy Gane sasubramanyam at DB Employ ee on 2018-10-03 T05:05, 00:00 DO NOT REDISTR IBUT E 1 October 2018 M&M - Diversified Resources BHP [Z]

Figure 3: Potential Divestiture Assets Figure 4: Potential Valuation Scenarios of BHP Energy Australia

A1ut , l(IIIOolllU\,1111 (,1~1;f1Jis,i ,J t U')t t"fl(I I 1u,1 fU C-1 20,000 ~\I\IIA1I 1,016 975 m Nunll W~ Shelf 1,336 1,372 59 "' ~S.Ce~ PvreneeJ,MlnervaandAl.11eria m 26 129 Hi"W (M •,rt 10,t 836 "' 1()0 111 15,000 N"..:bt'Wl!-u 568 "'822 160 Tow ~w Dhaduu~ uu ... .,.,"' 10,000

5,000

0 NPV EV (4x EBITDA) Book value • Nickel West • NSW Energy coal ■ Macedon, Pyrenees, Minerva and Algeria • North West Shelf • Bass strait

Source: Deutsche Bank Source: Deutsche Bank

j Figure 5: BHP NPV valuation j Figure 6: NPV split by operations US$m US$/sh A$/sh Iron ore Iron ore 69,242 14.22 19.22 49% Base Metals (Copper) 25,325 5.20 7.03 Petroleum 18,481 3.80 5.13 Nickel West Met Coal 18,775 3.86 5,21 Potash - Jansen (capex value) 2,800 0.58 0.78 (gross) Energy Coal (N5W & Columbia) 5,091 1.05 1.41 2% Nickel West (gross) 2,511 0.52 0.70 Energy Coal -1,800 -0.37 -0.50 (NSW& Group & Unallocated -936 -0.19 -0.26 Columbia) Base Metals Provisions and rehab -8,200 -1.68 -2.28 3% Net (debt) /ca sh -7,952 -1.63 -2.10 (Copper) Potash - Jansen TOTAL 123,337 25.33 34.34 18% (capex value) Met Coal Petroleum 2% 13% 13%

Source : Deutsche Bank eslimarss Source: Deutsche Bank

IFore casts and ratios Year End Jun 30 2017A 2018A 2019E 2020E 2021E Sales (USDm) 38,285 43,638 44,133 44,683 44,195 EBITDA (USDm) 20,296 20,262 23,724 24,273 23,090 Net Profit (USDm) 6,732 8,933 9,189 9,701 9,011 EPS (USD) 1.26 1.67 1.88 2.08 2.02 EPS Growth( %) 452.6 32.7 12.4 10.4 -2.7 PER (x) 14.0 13.3 13.3 12.0 12.4 PE Relative (x) EV/EBITDA (x) 6.0 6.8 5.8 5.6 5.9 DPS (net) (USD) 0.83 1.18 1.28 1.23 1.20 Yield (net) (%) 4.7 5.3 5.1 4.9 4.8 Franking (%) 100 100 100 100 100 Source: Deutsche Bank osrlm{IUJ:!l.co mp.,ny,dor,,

Deutsche Bank AG/Sydney Page 3 Provirled for Ille exclusive u se o f Sree,na tliy GanesasufJramc1nyam ,ll DB Empl oyee on 2018-10 -03T05:05>00:00 D O N O T REDISTRIBUTE 1 October 2018 M&M - Diversified Resources BHP IZI IFigure 7: BHP financial summary ifXJCOMMobme:s(Noml,ioQ f'Y17A FY18A FY1s/! FY2:0f FY211' f.'i:tiF IMerket bate Ltd Plc Total AUDUSD 0.75 0,78 0.74 0.74 0.74 0.74 Ticker SHP,AX BLT,L Oif. e,.,nt IUSS/bbO 61 64 n 72 69 70 IShnl•Jjl>Cfl - fl 34.48 16.62 011- WTf IUS$/bbll 49 59 70 64 60 63 SN!lfQ-,, co llJSO OQ'UIYl:lklPO 2502 2I.e:l Coppert USSllbl 2.45 3.06 3.16 3.45 3.48 3.38 Price difference 14% -13% Iron ore • lump (US$/tl - CIF 76 80 74 68 6B 69 Shares on issue Im) 3,212 2,112 5,324 Irono"' • l1neaIUSS/1) - CIF 88 67 82 68 68 158 % of shares s plit ltd v Pie 60% 40 % Coking oool IUSS/1) 193 197 176 160 148 146 Soot FXCI\UO .USDI (USO.GBPI 0.73 1.32 Thermal coal (USM) - contract 67 90 102 89 86 80 IM>lk,u C.o IUSD

IKEl:1'.INAHCIAI..MSBICS INPV(HD181 USSM USS/sh A$/sh UnderlyingEominge IUSSMI 6,732 8.833 8,189 9,701 9,011 9,848 Iron ore 69,242 14,22 19.22 EPS IUScl 126 167 188 208 202 232 Base Meta ls !Copper! 25,325 5 20 7.03 EPS Change(%) 5 0 0 (DI 0 Petroleum 18.481 3.80 5. 13 DPS iUScl 83 718 128 123 120 137 Met Coal 18,775 3 86 5.21 Payout ratio(%) 66% 70% 68% 59% 59% 59% Potash - Jansen tcapex valu e) 2,800 0 58 0.78 CAfil:!.llilW Energy Coal (NSW & Columbia) 5,091 1.05 1.41 Operating Cash Flow (USSMI 16,804 18,461 17,386 18,820 18,374 19.079 Nickel West {gross ) 2,511 0 52 0.70 Capex and exp loration expenditure IUSSMJ 15,2201 15,8021 (7,540) 17,871) 17.1211 (6,0201 Samarco -1,800 -03 7 -0.50 Other investin g cash flows (incl. d ivestments) (US$M) 1,059 11191 10,970 Group & Unallocated -936 -0. 19 -0.26 FreeCash Flow (USSM) - beforedMdenda 12,643 12,640 20,818 10,848 11,263 13,068 Provision s and rehab -8,200 -1,68 -2.28 Divid end IUS$Ml 12,9211 15,220) 16,6201 16,187) 15.556) l5.G161 Less: Net debt -7,952 -1.63 -2.10 Share Buybacks (US$M) 110,700) 15,000) 15,0001 15,0001 TOTAL 123,337 25.33 34.34 Free CashFlow (USSM) · beforedebt 9,722 7,320 3,487 1238) 686 2,444 Free CaohRow yieldI"') 9.6"' 9.4"' 17.0"' 9.4"' 10.1'16 12.3"' P/FCF 11 11 6 11 10 8 WACC (nominaO 9"' Sharee 4,B68M IBALANCE SHEET AND RETURNS Nat Dob1(USSM) 16,321 10,934 7,962 B,837 8,762 8,869 !Valuation 120181 GaaMng(ND/ND+E - "') 21"' 16"' 1311, 14"' 1611, 12"' ROEi %! 12% 16% 18% 2 1% 20% 22% Iron ore ROAl'lo) 12"' 14"' 19!f. 2011, 20% 21"' 49% ROCEl"'I 10"' 16"' 18% 18!f. 1811, 19'16 Nickel West PRODUCTION Copper11<1)· oonsolidatad 1,326 1,763 1,729 1,768 1,761 1,869 Copp er (kt!- equity 998 1,238 1,239 1,234 1.236 1,377 Iron ore (Ml) -Attributable (incl Jim blebar) 228 234 237 256 259 279 Energy COof iNSW& Iron ore (Mt)• Pilbare 1100%1 268 276 278 291 294 31B Columbia! Petroleum (Mmboe) - US Onshore 80 72 3% Base Metals Petroleum(% Liquid s! - US Onshore 43% 40% 0% 0% 0% 0% (Copperl Petro leum tMmboel - Conven tional 128 120 116 109 103 104 Potash • 18% Pouoleum(Mmboo) • Toi.I 208 192 11e 108 100 104 Coal· Hard coking IMII • A ttrib utable 39 8 42.6 44.3 46.5 48 .1 49 1 Cool-Hardcoking IMU - Qld (100'16) 71.2 76.6 78.8 83.6 66.6 BB.8 Coal - Thermal (Mt) 29 6 29.2 28.4 28.4 28.4 28 4 Nicke l (kt) 85 91 91 87 87 87 Copper Eq Producllon (Mt) 6.1 6.3 8.7 6.7 6.8 7.1 Chango l'll,I -7.0"' 2.1'11, 8.8'16 0.2"' 1.6'11, 3.4'11,

CAPEX (US$MI f Growth capoxop lrt 1201SA Growth Petrol eum - US Onshor e 575 Petrol eum - Conventional 697 442 839 961 710 ,0 5 Petroleum 1,272 442 938 961 710 48li Copper 596 812 7.500 1,400 750 600 Iron Ore 800 1.000 1.100 250 Coal 141 131 100 150 150 50 Potash 162 230 280 180 Toi.I GrowthCepax 2,026 1,481 3,618 3,691 2,710 1,386 Copper Suato lnlng Capex 2,227 3,609 3,129 3,266 3,496 3 ,716 42% Petroleum - ConaolidatedCepex 4,262 4,979 8,847 6,867 6,206 6,103 Conventional Exploration 968 823 892 914 915 9 17 24% Total capex Incl. Elcploratlon 6,220 6,802 7,640 7,671 7,121 8,020 Guidance (consolidated excluding share from mid FY19) 6,900 <8,000 <8,000

fEBITOA(U$$M) I EBn'bA split (2019A Petroleum - US Onshore 1,004 Pet,oleum - Conventional 3,059 3,3,1 4,452 3,969 3,791 4,075 Petro1eum 4,063 3,341 4,462 3,969 3,781 4,076 Copper 3,545 8,622 8,809 7,968 7,337 7,437 Iron Ore 0.on 8,930 7,318 7,778 7,738 8,666 Coal 3,794 4,397 4,628 3,866 3,323 3,221 G&A (corporate, G&A (cor porate, Nickel West, Potash) 11731 171 619 684 899 231 Nickel West, Total 20,286 23,183 23,724 24,273 23,090 23,619 Potash) 2% EBIT IUSSM) Petroleum - US Onshor e 17771 Petrol eum - Conventional 1,343 1,546 2,813 2,452 2,3B0 2,727 Petroleum 568 1,648 2,813 2,452 2,380 2,727 Petroleum- Copper 2,006 4,389 4,748 6,878 4,967 5,048 Copper Convention al Iron Ore 7,197 7,196 6,644 8,036 6,990 8,719 29% 19% Cool 3,060 3,682 3,828 3,187 2,677 2,6158 G&A (corporate, Nick el West, Potash) 1430) 12501 12 504 598 463 Total 12,389 16,682 18,943 17,856 18,612 17,614

Source: Deutsche Bank, Company data

Page 4 Deutsche Bank AG/Sydney Provid ed for the exclusive use of Sreemathy Ganesasubramanyam at DB Employee on 20 I 8-10-03T05 05 >00:00 DO NOT REDISTRIBUTE 1 October 2018 M&M - Diversified Resources BHP IZI Simplified but far from simple

A cash back offer but oil price and the rate of change is slowing ...

After solid performance through 2018, we downgraded from BUY to HOLD recognizing that a large potential off -market buyback is on offer in the near term but much of the performance has been driven by the oil price, in our view, and while we are not negative on oil, the best gains are probably behind us.

Oil's out performance of alumini um may come to an end We are now more constructive on the aluminium sector (refer report: Global Aluminium Sector - Supply sta nation drives reco rd deficit 5-Se t than oil and with cost inflation now an issue, we have our largest cap miners both on HOLD rating . With iron ore and copper, dividends and dual-listed capital structure similar between Rio Tinto and BHP, the divergent performance between what they don't have in common can sometimes help explain performance.

Figure 8: Aluminium and Brent oil indexed price Figure 9: BHP vs RIO share price comparison - YTD. BHP comparison - YTD. Oil has clearly outperformed YTD but has outperformed in 2018, similarly oil price has done we are now more constructive aluminium. better than aluminium.

125 125 120 120 115 115 110 110 105 105 100 100 ~ 95 95 90 90 85 85 80 -1----.---~---.--~--~---.--~--~ 80 1----.----.----.----.----.----..----~ Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18

- Aluminium (US$/lb) - Brent oil (US$/bbl) - RIO AU (US$/sh) - BHP AU (US$/sh)

Source: 8/oombBrg Finance LP Source: 8/oamborg Finance LP

Cash back offer ... BHP has promised to return the net proceeds (-$10.7bn) to shareholders in a form likely to be disclosed at the time of sale completion (expected end October). The proceeds are to be fully received 6 months after completion as BP pays the second 50% of its consideration over 6 equal monthly installments.

Through its history BHP has tended to favour off-market buybacks as a tax effective way to return capital. This is a significant one step reduction in share count and would require agreement with tax authorities. Nevertheless, it is a sign ificant return of capital for only giving up less than 4% of EBITDA and on what was a far less than successful ownership of the shale business .

Deutsch e Bank AG/Sydney Page 5 P,ov ided for the exclusive use of Sreemathy GE1nesasubra1nanyarn at DB Employee on 20 I8-10-03-I05:05+00:00 DO NO T REDISTRIBUTE 1 October 2018 M&M - Diversified Resources BHP [Z)

IFigure 10: BHP buy-back. scenario Units 2011 FY19scenario Asset sale proceeds net of tax US$bn 6.3 10.5 Port ion of promised capital return for Ltd buyback % 100% 60% Pot ential buyback amount A$bn 6.0 8.9 AUD/USD exchange rate 0.95 0.71 Mar ket price A$ 47 .50 31.10 Buy-back discount (subject to ATO approval) % 14.0% 12.0% Buy-back price A$ 40.85 27.37 Scale back % 78.3% Likely high BHP Billiton Ltd shares bought back m 147.0 324.S % of BHP Billtion Group issued capital % 2.7% 6.1% % or BHP Billtion Ltd issuea capita, % 4.4% 10.1% Capital component A$ 0.28 Addit ional capita l component A$ 9.03 Fully franked dividend component A$ 40 .57 Tax value A$ 49.88 Group EBITDA lost on US Shale divestment US$m 928 Group EBITDA lost on US Shale divestment % 3.8% On market Pie US$bn 4.2 ., On mar ket Pie GBP 3.2 FXGBP:USD 1.30 Share price GBP 15,0 Shares potentially repurchased 216 ,1 % of Pie shares 10% Total shares off and on market million 540 .6 Total shares off and on market % 10%

Source: Company dara - 2011 Buy back . DB estimates for FY19.

BHP could possibly return:

• 60% of shale proceeds A$8.8bn could be off-mkt = 10% of Ltd shares

• 40% on-market Pie buyback in UK= US$4.7bn , = 10% of Pie shares

• = 10% of Group shares.

• 2011 scale back was 78% .

However it is close to 10% bordering on the threshold needed for an additional shareholder vote. Each year at the AGM the company seeks and is granted approval by shareholders to buyback up to 10% each of Ltd and Pie. Such a sizable return of capital being put forward with the shale asset sale proceeds and AGM(s) due in UK/Aust in Oct/Nov 2018 if any approval is needed it could be granted in the normal course.

In terms of form of capital return, we think more market credibility comes by doing smaller more regular buybacks than one large one (using loss making asset sale proceeds anyway) and S32 and Rio Tinto perhaps demonstrate these past 3 years in this sector, and companies such as the often cites Exxon demonstrate it over a longer period of time.

The last time BHP had a $10bn capital management program was in February 2011 and it then elected to return $6.3bn via off market buyback of Ltd shares and $3.7bn via on market Pie buyback reflecting its distribution of shares across the dual listed companies.

Page 6 Deutsche Bank AG/Sydney Provid ed for the exc lusive use, of Sreemathy Gan esas ubra111anya111at DB Employ ee on 2018-10 -0 3T05:05 ➔ 00:00 DO NOT REDIS TR IBUTE 1 October 2018 M&M- Diversified Resources BHP IZI IF igu re 11: Capital managem ent (Buybacks and acqu isitions) 14 (US$bn)

12

10

8

6

4

2001 2003 2005 2007 2009 2011 2013 2015 2017 2019E

• Acquisitions ■ Buy-back

Source : Deutsc he Bank, Company data

Not yet simple ... further divestment potential

• BHP is more simplified but not yet simple after spinning of South 32 in 2015 ($9.4bn), and now divesting the shale business ($1 O.Bbn) this year.

• However we see other assets in the portfolio that are, like the South 32 assets once did, likely to receive less capital under the oft spoken of BHP "Competition for capital" . These include Nickel West and the Australian oil/gas assets (Algeria aside). It could be widely seen as a Australian energy business covering gas, oil and coal. This asset grouping sees value is concentrated in the Bass Strait and North West Shelf assets. We understand NSW Energy coal (which is housed in the Billiton Corporate side) provides valuable tax losses to the wider Group and could be exhausted within 3-4 years. At $4bn of EBITDA this asset grouping may have a market enterprise value of 4x or $16bn, but more likely something between this and net book value near $5bn.

j Figure 12: BHP's less core assets generate $4bn+ of EBITDA

Source.Deutsche Bank estimates and company data for book value.

Deutsche Bank AG/Sydney Page 7 Provided for lhe exclusive use of Sreemalhy Ganesasubram anyam al DB Employee on 20 18-10-03T05:05+00:00 DO NOT REDISTR IBUTE 1 October 2018 M&M- Diversified Resources BHP IZI Figure 13: BHP NPV break-up for Core and Non-core Figure 14: Potential Valuation Scenarios of BHP Energy assets Australia US$m 20,000 (US$m) 17,957 BHP Group NPV (base case) 123,337 15,909 Less:Non-core assets (potential divestments) Bass strait 3,293 15,000 North West Shelf 6,096 Macedon, Pyrenees, Minerva and Algeria 1,406 10,000 · NSW Energy coal 2,356 Nickel West 2,758 5,000 Non-core assetssub-total 15,909 BHP Group core assets NPV (base case) 107,428 0 NPV EV (4x EBITDA) Book value ■ Nickel West ■ NSW Energy coal ■ Macedon , Pyrenees , Minerva and Algeria ■ North West Shelf ■ Bass strait

Source: Deutsche Bank Source: Deutsche Bank

We expect BHP to eventually exit its interest in the Samarco operating asset over time given its lack of synergy with the rest of the portfolio and challenges managing it from Australia. We currently value Samarco at just US$1 Om. Samarco had a negative net book value (or carrying value) of US$1.3bn as of 30- June-2018 .

End of an (austerity) Era: Time for Management Change? • End of capital preservation era could see executive level change and some M&A. The peak in operating margins and inflection point on capex is perhaps signaling a new phase for the sector. This is potentially an appropriate time to refresh executive level management after much has been achieved in the austerity era and the sector faces a new outlook. While Rio and FMG have announced executive level changes to the CFO and CEO respectively we are yet to see the same at BHP (in fact some may have been expecting it after the recent results period when the successful divestment process of shale was delivered early and at a slight premium to consensus value expectations, even if BHP took another near $3bn write-down against book).

• Management change in itself is rarely an immediate catalyst but does potentially signal a subtle (or otherwise in the case of Rio Tinto in 2013) change in overall strategy. Capital preservation has been the mantra of the past few years with significant cost and capex reductions, a moratorium on management to make acquisitions and a series of significant asset divestments. With balance sheets now fixed, capex spending rebounding to at least normalised levels, buybacks and special dividends a regular sector feature, it seems an appropriate juncture to at least discuss management succession and tooling for the current environment.

Page 8 Deutsche Bank AG/Sydney Provided for the exclusive use of Sreemathy G<1nesasubramanyam al DB Employee on 2018-10-03 T05:05+00:00 DO NOT REDISTRIBUTE 1 October 2018 M&M - Diversified Resources BHP IZI Figure 15:Current strategy - August 2018 : Culture, layers, even more nimble Future plans

Zero faiati1ie,s Front line coo1,nuo1,:s,mpro, •ement

Cu1,11eor conl\CC;li·,i1y.team or te11ms Even more nimble and te~s t;iure,w;;ra1ic

Polent,;il f01 more CQpperan

• Fewer managcrncnl la;-crs

BHP O;>ert11iri'i)Sys1cm - 1r11:,cascdSlil•;

• VVorld Class Functi◊liS - !;heilmlmed cnd-1a-end processes to 1ellect simpler por1fo,o

Saurce:Company data ~ FY18 financial results presentation

Where are we currently with BHP?

Strategy - what is the current strategy of the CEO? The current CEO came to the job with an agenda to simpl ify the business and with the spin off of S32 and other divestments including shale (not part of the original plan). Now done, the agenda appears to be one of internal focus of culture change and removing layers within BHP's well known bureaucracy . There are 7-8 layers of mgt between the CEO and front line employees. In 2018 we see BHP spending time re-examining the way they work target ing less bureaucracy and conducting motion studies etc to standardise work practices. No specific target has been communicated.

IFigure 16: Elliott proposal vs. BHP Elliott Proposal BHP Billiton Conclusions

UK incorporated NewCo (Australian lax resid ent) to • Costs significantly outweigh savings, no other material benefits own 100% of botl1 Limited and Pie Wastage of franking credits • Prirna1y LSE listing Off-market buybacks would be less attractive Secondary listing of COis on ASX Unlikely to appeal to Limited shareholders • Fully fungible • Regulatory uncertainty

Demerger of tl1e Group' s Onsl1ore US and Gulf of Petroleum benefits the Group and vice versa Mexico deepwater asset s into separate NYSE -listed Onshore benefits Conventional and vice versa vehicle ------Demerger has limited upside, significant downside risk Major discounted off-market buyllack of at least Buybacks an important part of our capital allocation framework , - USS6 billion but now is not the right time for a US$6 billion buyback Series of sullsequent buyba cks based on a formula • DLC is not an impediment Mechanistic approach is not appropria1e

Each of Elliott's proposals could be implemented independently and the merits of each should be assessed standalone

Source: Company data • Response to Elliott proposals Apr 2017

Deutsche Bank AG/Sydney Page 9 Provided for the exclusive use of Sreemalhy Ganesasubramanyam at DB Employee on 2018-10-03T05:05+00:00 DO NOT REDISTRIBUTE 1 October 2018 M&M - Diversified Resources BHP IZI Cost efficiencies BHP has outlined its medium term cost guidance for its 4 key commodities , interestingly the company wants to expand in the 2 commodities with increasing medium term cost guidance - in our view this reflects the longer term attractive economics of those commodities (scarcity , global production challenges due to grades and natural decline rates, long term demand outlook generally positive).

j Figure 17: WAIO unit cost trend (US$/t) IFigure 18: Escondida unit cost trend (US$/lb) 40 1.6 .... 52% I ' ' ,,...,~-- •1t.0, ------20 ' 08 T' 14.26

o 00 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19e Medium FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19e Medium

Source: Company data - FY18 financial ,~suits presentation , WA/O unit cost excludes freight and royalties Source: Company data - FY18 financial results presentation. Escondia unit cost is net of by-product credits, but excludes freight and TC/RC charges

Figure 19: Queensland Coal unit cost trend (US$/t) Figure 20 : Conventional Petroleum unit cost trend (US$/ boe) 160 20 .... 30% ' +' ' 80 10 .------­ ~------"'.&~a.;;ot _____ - 10.06

0 o FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19e Medium FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19e Medium

Source: Company data - FY18 financial results presentation. Queensland Coal unit cost excludes freight Source: Company data - FY18 financi'sl results presentation . Conventional petroleum unit cost excludes and royalties expforarion expense, freight, dBve/opment & evaluation and other

IFigure 21: ROCE by asset (%) Anla~ina ~ NSWEC 35

25 - - - • FY17 ROCE

15

5 Olympic Dam Potash OnnllOmUS J (5) 0 10 20 30 40 50 GO 70 l Average capital employed (USS billion) Exploration

Source: Company data - FY18 financial rBSulrs presentation . Underlying ROCE represents atrdbutable profit after tax excluding BXCtJptionalitems and net finance costs falter tax} divided by average capital employed. AVtJrage capital employed is calculated as the averagB of net assets less net debt for the last two financial y88rs.

Page 10 Deutsche Bank AG/Sydney Provid ed for tile exclusive use of Sreematl1y Ganesasubramanyam at DB Employee on 2018-10-03T05:05+00:00 DO NOT REDISTRIBUTE 1 October 2018 M&M - Diversified Resources BHP IZI Guidance

J Figure 22: Capex guidance

Group FY19o Capital nnd exploration cxpend,lurc (USS bn) <8 0 Cash basis Including Maintenance 2 1 lnclurJes non d1scrcl1onary cap11a1expenditure lo marn!c11nassel 1nlcg1ity reduce 11sks .:ind meet compliance reqlllrernents Also includes r.ap1lill1$Cd dcfer1ed s1npp1n9 of US$1 O b1ll1onfor FYl9 lmp1ovemcn1 22 lnc.ludes Nortn West Shelf Grea1er Weslcrn Flank -B Convant1onalPetroleum infill dr11/1ngand South Flank

Includes Escond1da Willer Supply Extension Caval Ridge Southern C1rcu1t Olympic Dam Southern Mine Area , Western Austraha Iron l .:itcnt c<1r,3c1ty 06 Ott! lo 290 Mlpa

Ma 1or 91owlh 19 Includes Spence Growth Opt100 Mad Dog Phase 2 Jansen Exp!orallon 09 Includes USS750 m•lhon PeIrotc\1m and - USS70 mlltion Copper C)lploration prcgmm plannelJ !or rvrn

011sho1eUS 03 U11l1Icornplchun of d1ves1rncn1 ~xpcctcrJ l>y the E:"llrJol Oi:lubc1 2018 we intt?nl.1tu operate- live 11gs111 Onsr101c US and 11Kw c,~p1lat l'.!:

Source: Company data - FY18 fillanci"a/ results presentori on

J Figure 23: Petroleum production and cost guidance

Polroloum FY111o Totat Convcn\10,rnl petroleum produchon (M~ll>oe) 113 - 118 Given our ir,tenl1on to cxil Onshorn US no aru1uaI guida11ce ror the 2019 financ ,al yea, ror these as~cls wdl be provided, however unl 1! complel1on, we expecl a produchon run ,ate broadly cons1slent with The secood t1aI1 of the 2018 hnancial year lnf1ll dnlhng p101ccts .1re more 1han ollscl by planned d1y dock n1c1inlcn.1nccat Pyrenees and naturcJI field decline ac,oss lhc porlfo'io Convonllonal Potrolaum

Capital expcn d1lt1re (USSm) 730 PrirTI£'1nlyrocuscd on progressing the klad Dog Phase 2 pro1ecl am.I completing ttic Norlh Wi!SI Sheil Greater WcslCfn Flank•B proiect

Unit COSl (US S:boc) <\ I Excludes mvenlory movemenls embedded de11vatives movements, fre1gt11 thud party product purchases and e.-:plora11onexpense Basecl on e,.,change rales of AUD1USD O 75

E)lr,lor..i!ion (USSn1) 750 fOCU'.S,Cd on Mexico, lhC Gull ol Mc:,uco illltl lhC Caril)!)('ilrl

Source: Company data - FY18 financial resutrs presentation

J Figure 24: Copper production and cost guidance

Coppor FY19• To1,llcopper p,oour.t.on (MIJ 166 1 77 lm::lutfesE~comlld;_i.i\ 112 1 16MI Eacondlda PmduCIH)!\ (Ml 100~-~basis) 1 12 - 1 1U Rellecls s1qn,hcan! c1t!crea5t!111 ~ve1r19e wn cenlrnlm hec1<.1g,atlt~ r.011s1shm!Y11th \he mine pl;Jr, UM cash Cll~IS (USS/lb) ._1 15 E11.cludes.lre1ghl and lrealrnenl and 1er1n1n9c harge~ nel ol by pro to !.ctt le-l;1bou1negol1i'\1ons bJsed on an e:.changc- 1alt! of USDICLP 66J

Source: Company data - FY18 financial results presentation

i Figure 25: Iron ore production and cost guidance Iron 010 l'YtOo l 01.111ton ore produclion (Ml) 2-11 2~0 A p,oar.im or wo1k lo opt1n11semJ,ntcn.:incc SCht!

u,111c~s1 , cos ls (USS 11 < 14 !:11.cludc~lre 1ghl ;Jnd ,oya irjt!S l,, ) s; :(J Oil ,lll e1. ClldlHjC l,llC of AU0 1USO O 75

Sus laimng capital eii.pend1lure (US$ •!) Met11umlern, avero:1ge t! SO~'c11~ an~ g1ve1\ year lm:ludes South F-lo:1nkof USS45 pe, to11ne

Source: Company data - FY18 financial results presentation

Deutsche Bank AG/Sydney Page 11 Provided for the exclusive use of Sreernathy Ganesasubrarnanyarn at DB Employee on 2018-10-03 T05:05+00:00 DO NOT REDISTRIBUTE 1 October 2018 M&M - Diversified Resources BHP IZI IFigure 26: Coal production and cost guidance Cool FYI.. T otae metaMurgt,ealcO&I produebOn (Ml) 43 46 An ealeo:s...,e maInlenance pcogram Is planned for lhe ftrsl hatf of lhu 2010 rmanctal year Wlfh a cooespondmg 1mpaC111I:soe~cted on uml cosls

Total energy coal Pfoduct10n(Mt) 28 29 Q_,_landCoal

P1oducft

Sustaining ,r.aprlal e•pend1lure tUSS11) 8 Med1umterm a"erage , +.1 SQ .!1~ •n any g,ven yedl' NSW Ene,ayCoal un,tc.ash cos.ti ,uss •u 43 48 E)tdude-s freight and ,oy,al1;,es ba~ on ,>n c•change rate orJ\UOIUSO O 75

Su'iold111ing capila1 e,,(pef1d 1lurj1; {US$it) Med1t..1n1te,m a'llerage ♦ /- SO¼ rn any 9111enyear

Sour ce: Company data - FY18 financial resvlrs presentation

Risks

/ Figure 27: Key Underlying EBITDA sensitivities Impact on FY19EBITDA for changeof: US$m US$1/t on iron ore price 227 US$1/bbl on oil price 43 US$1/t on metallurgical coal price 41 USC::1/lbon copper price 35 US$1/t on energy coal price 17 USC::1/lbon nickel price 1 AUD (USC1/A$) operations 116

So urce: Company data - FY18 financial results presentation

Page 12 Deutsche Bank AG/Sydney Provi ded fu, t11e exc lusive use of S1ee 111athy Gctnesasubrama nyam at OB Employee 01120 18-10-03 f05:05i 00:00 DO NOT REDIS I RIBUTE 1 October 2018 M&M - Diversifi ed Resources BHP IZ] Compendi .um

Asset overview

BHP is is often referred to as having the best assets in mining. Western Australia Iron Ore, Coking Coal in Queensland and the Copper Assets exhibit relative market share at around 25%, 20% and 4%.

WAIO Western Australia Iron Ore (WAIO) is an integrated system of four processing hubs and five mines, connected by more than 1,000kms of rail infrastructure and port facilities in the Pilbara region of northern Western Australia.

At each mining hub - Newman, Yandi, Mining Area C and Jimblebar - ore from mines is crushed, beneficiated (where necessary) and blended to create high­ grade hematite lump and fines products. Iron ore products are then transported along the Port Hedland - Newman Rail Line to the Finucane Island and Nelson Point port facilities at Port Hedland.

WAIO's port facilities at Nelson Point are owned by the Mt Newman JV, and Finucane Island is owned by the Mt Goldsworthy JV. BHP interest varies between 85 and 100% across joint ventures.

J Figure 28 :WAIO location and infrastructure

□ Australiawestern

Port Hedlalld Flnuonn IJlnnd •!~ ~ ._------South H IXl . 'GoldsworthV Raut'•, 11, th, '/lo"•·• 't'anle

Port Hedlund- Nawmln RailLine

rlr,1 lioM I Yendi Pa« Mining~ C • 0febodyl 2A/25 e OrebodyJB • • J'trrtt:J,Jetw/ Onbody'lJl/3Q/35Mt~ .Ncv,ml)n Whoeltrfl

• Ex1s1in,g O!)4!ration~ ~ Pon Port Hedland - Newman Rail Lin~ ·· · Goldswonhy Ra.ILioo

Saurce:Company dara • Minerals Aust ralia Briefing Nov 2017

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iFigure 29:WAIO costs summary Cash co,ts Fixed versus variable split (approximate) (f'.V18o, %) (FY18o, %) 11% 7% ■ Conlrac!otsand ronsuttants Conslm,ab-1~ 5% ■ Laoou1 Por1and ra

■ other

• fo:e-d 2C% Van-able

Source:Company data - Minerals AustraliaBriefing Nov 2017

IFigure 30: Iron ore division EBITDA contribution IFigure 31 :Iron ore division EBIT contribution 16,000 (US$m) 60% 15,000 (US$m) 120% 14,000 12,000 12,000 40% 10,000 9,000 8,000 6,000 6,000 20% 4,000 3,000 20% 2,000 0 ...... - ~ --.- ,..- 0% cocno..-NC'JV ~ w ~ w w w w w w w w 0 0 T"' .,... .,... ,.... .,.... .,... .,... .,.... CD en O T"' C'\I M ~ ~ 0 0 O O O O 0 0 0 0 ..- T"' C\I C\I N N C'\I C\I C\I C\I C\I C\I C\I C\I N C\I C\I C\I O O O O O O O 0 N N C\I C\I C\I C\I C\I C\I - Iron ore division EBITDA - % of BHP group underlying EBITOA- RHS - Iron ore division EBIT

Source: Deutschs Bank, Company date Source:Deutsche Bank, Company data

IFigure 32: WAIO unit cash cost summary IFigure 33: WAIO volume growth 2010 ~ 2025

35 (US$/t) 40 (Mt) 29.3 35 30 25.9 30 25 20.4 25 20 20 ·

15 15 10 10 5 5 0 ,._ l"" 0 N C') ...

Source: DBucscheBank, Company data Source: Oeutsch9 Bank, Company data

Page 14 Deutsche Bank AG/Sydney Provided for the exclusive use of Sreemathy Ganesas uhramanyam ;it DB Employee on 2018-10-03T05:05 I00:00 DO NOT REDISTRIBUTE 1 October 2018 M&M- Diversified Resources BHP IZI Figure 34: Quarterly annualized production 01 10 - 04 20 300 (Ml)

250

200

150

100

50 -r- 0 0 ~ N N M M ...... , r-- r-- co co en 0 0 "'0 "' ~ ~ "' "' .,6. "- 6. i 6. .,"- 6. "- 6. ~ 6. "- 6. "- 6. "- 6. ~ 6. "- 6. "- "'.,6. en ::;;.. en .. ::;; en.. ::;; en.. ::;;.. en .. ::;; en.. ::;;"" en.. :."' en.. :. "' en.. :. en.. :."' en.. :."' en - Pilbara production

Source: Deutsche Bank, Company data

Queensland Coal Queensland Coal comprises the BHP Mitsubishi Alliance (BMA) and BHP Mitsui Coal (BMC) assets in the Bowen Basin in Central Queensland, Australia .

BMA operates seven Bowen Basin mines (Goonyella Riverside, Broadmeadow, Daunia, Peak Downs, Saraji, Blackwater and Caval Ridge) and owns and operates the Hay Point Coal Terminal near Mackay. With the exception of the Broadmeadow underground longwall operation, BMA's mines are open-cut, using drag lines and truck and shovel fleets for overburden removal. BMA is owned by BHP (50%) and Mitsubishi (50%).

BMC owns and operates two open-cut metallurgical coal mines in the Bowen Basin (South Walker Creek and Poitrel). BMC is owned by BHP (80%) and Mitsui and Co (20%).

Queensland Coal has access to key infrastructure in the Bowen Basin, including a modern , multi -user rail network and its own coal-loading terminal at Hay Point. Queensland Coal also has contracted capacity at three other multi-user port facilities, including the Port of Gladstone (RG Tanna Coal Terminal). Dalrymple Bay Coal Terminal and Abbot Point Coal Terminal.

Deutsche Bank AG/Sydney Page 15 Provided for the exclusive use of Sre0ma thy Ganesasubramanyam at DB Employee on 2018- 10-03T05: 05+00:00 DO NOT REDISTRIBUTE 1 October 2018 M&M - Diversified Resources BHP lZ)

Figure 35: Queensland coal location and infrastructure

I!! D.1l1;mi;k ll.w 11.-,J>i:.rt

Source: Company data - Minerals Australia Briefing Nov 2017

IFigure 36: Queensland Coal cost summary Cash costs Fixed versus variable split (approximate) (I YHlc>. %) (FY 18e, %) ■ CDnhJclois anr.Jco .nsul1anls Iii Consurn.Jb'es ■ labour I'; Port ,1nd ra

■ Ott1er

■ rio,ei:, 12% V

Source: Company data - Mlnerals A ustralia Briefing Nov 2017

Olympic Dam Olymp ic Dam is one of t he world's largest ore bod ies. Located 560k ms nort h of Adelaide, it is one of the world's largest deposits of copper, gold and uranium, and it also has a significant deposit of silver. Olympic Dam operates a fully integrated processing facility from ore to metal.

Olympic Dam's underground mine is made up of more than 450kms of underground roads and tunnels . The asset extracts copper uranium ore, with the ore hauled by automated train to feed underground crushing, storage and ore hoisting facilities.

Olympic Dam's processing plant consists of two grinding circuits in which high­ quality copper concentrate is extracted from sulph ide ore through a flotation extraction process. The asset includes a fully integrated metallurgical complex with a grinding and concentrating circuit, a hydrometallurgical plant incorporating

Page 16 Deutsche Bank AG/Sydney Provided fo, til e exclusive use of Sreemalhy Ganesa sullrarncmyam at DB Employ ee on 2018 -10-03 ro5:05+00:00 DO NOT REDISTRIBUTE 1 October 2018 M&M - Diversified Resources BHP IZI solvent extraction circuits for copper and uranium, a copper smelter, a copper refinery and a recovery circuit for precious metals. BHP interest is 100%.

Figure 37: Olympic Dam location and infrastructure

V.:l

Source: Company data - Minerals Australia Briefing Nov 2017

IFigure 38: Olympic Dam costs summary Cash costs Fixed versus variable split (approximate) [f'Y18 e <:-:,) (F-Y1Be. ~-, )

0 '. ■ r, onlra.r::(Qrs;ind c;qnsul1,:111Cs 8 '" t.· Consumables

■ Lnbou, ,!; Pail and Wtl

Royalties rdkS and IHXCS

■ l· ul!l i:1!1tl c,cclrI<:1ly

■ Ol11er

■ f' txt:!d 19°,:, Va riab le

Source: Company data - Mimua/s Australia Briefing Nov 20 17

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IFigure 39: Olympic Dam - Staged resource development strategy

Resource development via staged, independent, Investment options, subject to strict capital allocation framework tests

O Stabilisebase operations Brownfield expansion option (BFX)2 ODEP optionality 2 IRR>50% 1 IRR >20¾ 1 Studies underway

Da-boltlanock mine, focus on productivity and stablllty Capital ottlclont lncroaso In capacity Potontlal to transition to a low cost, high-volume operation Mine expansion into Southern Mine Area (SMA) flf'.Xbeing sluchcd Restore operational slabilily - , melte1 capac,ly upgrade Large scale underg,ouncl nnd grccnl,e\11surface cxpilns,on - largest planned smelter shut - new rcl,nery li1nkhoust:: Possible lic~p leach • , - refinery upgrade - acJu,lio11a1mill,n9 cdpacily Whenan hoist refurbishment /v:cc!err1te rrnne ctevf:!lopment - new tailings storage facility Js.socic,tcd1ntr.JStrlJCtlJrc BFX SMA MHS Stage 2 OFX f,r,,t p,O

FY18e FY19e FY20e FY21e FY22e FY23e Long-term Production guidanco (Cu ktpa) lndicalivo capacity (Cu klpa)

Source: Company data • Minerals Austr~l,B Brief;ng Nov 2017

IFigure 40: Olympic Dam - Current/BFX flowsheet

Prfmlry COpJMr Strum - Grind ing - Or• - - otoopa, f Pt:)tt.. <>4l mlll.Hi= I!

Sln>e• TrY~nl

Sl.>g \• Stcono~ry o,,rllowI llquon .,j... CopJMr ..J- ~nd Coppot & Ur.in tum c.,_, u,ar.YM 1um - Coun\f, Vr~lif"l Cl¥1fi<~""' - - u,... Strum Curn,nl Sot.

Source: Company data • MimJrals Australia Briefi'ng Nov 2017

Page 18 Deutsche Bank AG/Sydney Provid ed for tr1e exc lusive use of Sreemathy Ganesasubramanyam at DB Employ ee on 2018 -10-03T05:05+00:00 DO NOT REDISTRIBUTE 1 October 2018 M&M - Diversified Resources BHP IZI IFigure 41: Olympic Dam - Potential expansion flowsheet

Wol~r t1 Pun~, S!KOOIL.~..~ rir.e.1~1,m i 1'111 "'II r,n, - Clll't.hil L1111eWa,er •• Acid =.:, I WUl'-"!7 \•' l I I R()to>S Gnn

Ole J Th1cJ.;ener StachlQ R F1ltral1on 1 Oll C(.l(;(OIIIUI(• -L Pr11.'9n~)r1t Ll•lilll< Slf(JhOrtC Acid Pli~nt usx - cu,;x -

Pr,-<:11"1 1"10 & Cn A\ 11)11 ou;,, - · •...uo - Gol

Source: Company data - Miflerals Australia Briefing Nov 2017

Escondida IFigure 42: Escondida Process flowsheet

-1 .4 Mlpd tot.if m.iH,rl.if mo..,umunl Lt:osGo!oradi:i·5, L Ofld l .;_u;l•'~· s,:r-;1 anr:t -:H5 klpd ctr,:,,;tiv

~J.5 Mtpa of conc~nlrate 11hlpp,ed

l:i p occ !.IOCli.

-29-0 klp-d of or~ ~t.,ck(ld

-J.J.O kip~ or (l!f4)(1ivc, c,,lhodo P-,Qductlori r;3pa,;ity

-- ~6-0 klpd of or~ 1tackcd

O• •J~ ac {J lcac.h P o' Antolaga~I.1 and I r..•e,1lo<1es ,,:J

Source: Company data - BHP Copper briefing Der: 2015

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Figure 43: Escondida - Shifting towards greater use of desalination

FY14

• ,•,nod ra.n

•[};• ·111,1\ on

FY1SO

• f11• ,. l,:r

Ov •M 11

c:ovr d 'IM ' •1

Source: Company data - BHP Copper briefing DeG 2015

J Figure 44: Copper unit cash cost calculations

or unit costs USS m 1lhon FY12 FY13 Y14 FY1S FY16e FY17e Revenue! 11,258 12 382 11.6 58 10,500 Underlying EBITDA 5.125 6.261 5,838 5.106 Cash costs (gross) 6,133 6,121 5,820 5,394 Less : one -off ilems 206 103 188 Less . by-produ ct credits 813 795 658 596 Less : freight 132 159 159 132 Less: treatment and refining charges 218 300 341 474 Cash costs (net) 4,763 4,764 4,662 4,004 Sales (ktJ 1 1.325 1,531 1.525 1.644 Cash cost per pound (US$) 1.63 1.41 1.39 1.10 1.27 1.08 Escond1da grade adjustment" (020) 0.01 (0.07) Base year (0 26) (0 20) Adjusted cash cost per pound (US$) 1.43 1.42 1.32 1.10 1.01 0.88

comJlda uni t cos t (USS m II o n) FY12 FY13 FY 14 FY15 FY 16e 'FY17 Revenue 6,960 8.596 8.085 7,819 Underlying EBI I DA 3.654 5.175 4.754 4.064 Cash costs (gross) 3,306 3,421 3,331 3,755 Less one-off ,terns 171 103 188 Less by-product credits 252 211 175 177 Less : freight 115 142 139 117 Less treatment and refining charges 218 300 341 474 Cash costs (net) 2,549 2,665 2,676 2,799 Sales (kl)' 863 1,130 1.116 1.259 Cash cost per pound (US$) 1.34 1.07 1.09 1.01 1.21 1.08 Escondida grade ad1ustment' (0 24) 001 (0.08) Base year (034) (027) Adjusted cash cost per pound (US$) 1.10 1.08 1.01 1.01 0.87 0.81

1 Sales volumes ad1usled fo, ,mpacI of ,nte,oompany sales and pure/lases 2 EscoM oda sales volumes grade a<11usIedlo fY 15 ••• Sourc e: Company data • BHP Copper briefing Dec 2015

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Petroleum

J Figure 45 : Petroleum assets location and production out look

Conventional production outlook (FY17e . BHP Bilhlon share)

t 4 " largost 1n1orn111lon,I othor producer 11, GoM

■• North Wost Sholl ? l"'IJ<>II ■ ·>• roduc,r hl 28-JOl,'lllbO~ AustraU., 3J-35 MMboe Trinidad & Tobago •S-6MMboe• ■ ■ Crude & Condensate ■ NGL ■ Gas Australia operated 16 \7 MMboe ■ LNG Bass S1ralt 35-37 MMboc ••• Source: Company data - BHP Petroleum brieffng Oct 2016

J Figure 46: Bass Strait asset summary j Figure 47: North West Shelf asset summary

Oporato, Esso Operator Wood~lde

BHP 8il lito11 GBJV50.0% 8HP 8illitor, -13% NRI over 9 separate JV Ownorshlp KUJV 32 5% Ownership agreemet11s Fir-SI Rasou rc su 1984 Resourcesu 1969 procludlun

FY16 27.5MMboe 35.3MMboe pro

548MMboe 401MMboe

Source: Company data - BHP Petroleum briefing Oct 2016 Source: Campany data - BHP Petroleum briefing Oct 2016

J Figure 48 : Pyrenees asset summary J Figure 49 : Macedon asset summary

Oporator BHP Blnlton Opi:,ral o r BHP Billiton

BHP BIiiiton BIIP BW ih.m 71.43% 71.43% O,.,rwr-:;tuµ Ov,•,iur5h1p

Flbt 2013 2010 p, o rJ<1,:tim1

F"'r 1 fj 8.SMMboe 8.6MMlloe p, u r.Jud1or'l 1

52Mll.lloe 99MMboe

Source: Company data - BHP P9troleum briefing Oct 2016 SourcB: Company data - BHP Petroleum bdt1fing 0cc 2016

Deutsche Bank AG/Sydney Page 21 Provided for the exclusive use of Sreernathy Ganesasubrarnanyam at DB Employee on 20 18-10-03T0 5:05+00:00 DO NOT REDISTRIBUTE 1 October 2018 M&M - Diversified Resources BHP IZI IFigure 50: Atlantis asset summary IFigure 51: Mad Dog asset summary

Op-EHJ[ur BP Operator BP

BHP Ellll i!On Bf!P B1ll ·1to11 23.9% Owmrr-stu;.i Owm1r:;t11p

first F,ifi;I 2007 2005 JH0tlui:.t ioro producllun

FY1G FY16 18.3MMoo& 1 3.SMMboe JHUUU~t,on ' !.lr{H.lu ct1 ll ll

225Mmboe 329MMboe

Sourc e: Campanydara - BHP Petroleum briefing Oct 2016 Source: Company data - BHP Petroleum briefing Oct 2016

IFigure 52: Shenzi asset summary IFigure 53 : Angostura asset summary

Op orator BHP BIiiiton Opera\01 BHP Bi!llton

BHP BIii iton 44.0% BHP 81lllto11 45.0% Block 2{c) Ow11BrSh1p ow,wrstl ip 25_5%Btock 3(a} fir s \ Resourcu 2,, 2009 2·3 production 2005 Resources

fYH', 13.7MMboe FY16 protluchun' 5.9MMboe produttiun' Ro sources · 168MMboe 124MMboe

SourctJ: Company data - BHP Petroleum briefing Oct 2016 SourctJ: Company duta - BHP Petroleum briefing Oct 2016

IFigure 54: Algeria (ROD) asset summary [ Figure 55: North Sea asset summary

Opuratur Groupeml!fltSonatrach Aglp Oparatot BP

BftP Blllilun 45.0% BHP Bil ll lu11 16.D%Bfi108 Ownership Owner:stl il,J 31.B3% K!!llh

F lrsl 2004 Resource :u Firs! 1993 Bru~ pruduct1011 produ ct.o n 2000 Kenn

F Y16 FY16 3_7MMboe 1.0MMboe µrocJuct,ori' producHun'

Resources · 5DMMboe Rlisuurces ' 7MMbo9

Sour ce: Company data - BHP Petroleum brl of,flg Oct 2016 Source: Company data - BHP Petroleum briefing Oct 2016

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Mineral Resources IFigure 56: Petroleum exploration well information 8puddele l ,0'41~411jtJul)th 2, ~2016 !.171 maU.

Source: Company data - FY18 ffnancia/results presentation -

l Figure 57: Australia mineral resources (100% basis) ~--;;;. Plnandal YHr MMIUIN ltNaURN IMI) lndlc.tteelRHOU,CH IMI, lnfwnld fl.HOUrCH(Ml) Of I Jilt1~ a.r,, Au.41{.dlt ;;-,,.,o,-, WAIO 2017 2.740 &,930 20.390 lOI :t. '.,tJ .UIU ,. t "'11• ' Operartont- MlAtthut Coal 2011 897 i.m l ,0Ht 100 2013 8117 2,1611 670 100 2017 719 117 1051 100 2013 119 1.051 100 Me,._.,co., · OIH,...,.. "' Queeralal'ldCQCA.JV 2017 31411 2169 U82 00 2013 2,!,61 2.882 2353 60 2017 7.0 1127 0.3 110 2013 7.9 130 7 03 !O 2017 29S 390 238 80 2013 258 347 233 80 Mtt-aJC..1-Prrii,a, Queen,land COCA .N 2017 701 2,IIM 1405 !O 2013 273 1,•476 1 39& 60 GNtQOt'YJ\I 2017 ... !O 2013 5.6 60 BHPM•sul Coal 2017 154 1 80 ..o,.~ lfil ..

2017 1.-tr,oao~Co 030kWtonne U1O.. 0 ◄ 1QJ1Au. 2C>1Ag 4 600Q1) 79"Cu, 0.2 .. f>'IOMeU ,0 0 0 349'1,., 1g/l l\g J,92000 71'4 Cu.a 24kit'lonneu,o,.o 28Gfl Au . 19"1Ao 100 ~ •~~1 ~ 0 U-0 JI.&\~ :~s~} "• •" J~J _ (.,wlj/ .9 ',f/G,(l~&.j IJ1~ -L_,l~~Cu 1 l ~ .. u~.,•~TjfJ •'9 100 2017 180GQ.74%N, 1aooo.e1""' 135G085%Ni 100 21113 21

Soorco: Company data - FY18 financialrosults presentation

IFigure 58: Americas mineral resources (100% basis) Commodity Flr,andalYur M... uM Ruourcea CIII) lndlett.d lteoour

lll•°"""'"1~nl' Juneneu ~r

Escoodda Omnct 2017 6,0270063 fCu 5051C!l056% fCu 15,1611@0- TCu 57S

20'3 5 78500 67" fCu 3,54200 5'% TCu 12,ltJOCI0 . ◄ 7% TCu 57.5

PampaNorle 2017 825GO 54% fCu 1,119Q041% TCu 3 158C() 31% TCu 100

2013 00300 63% TCu 1 . l&60() ◄ 0% TCu 1275GO

MtilmN 2017 2300091 Cu.O 1~ Zn IOg/1Ag 255 ppm Mo 113900 M% Cu O 78% Zn. t1gJ1 Ag.191 ppm Mo 1,248Q088%Cu08~ Zn l~Ag,185ppmMo 33.75

2013 18300 11"-Cu.O ~ Zn.10GllAo.238 ppm Mo 94300 92% Cu,O 66,. Zn, 1 IQIIAg.208ppm Mo 8eDQ062% Cu O :19" Zn,11o,'IAQ 173ppm t,to 33.76

""'"" 2011 ~.170025 7% K,O 1 270025 7% K.,O 100 -p- 2013 5 326025 7" K,O I 28802, 1"' K~O 100 EM,WC<>al CoffljOn 2011 2111 1196 631 3333 2013 2924 989 3333

Somtm>"""°'" 2017 2.600 2,600 1,300 00 2013 3,000 3000 2,000 !O

Sourcfl: Company data - FY18 ffnarrcia/n,sults prr,ssnrBrion

Deutsche Bank AG/Sydney Page 23 Provided for the exclusive use of Sreemathy Ganesasubramanyam at DB Employee on 2018-10-03T05:05+00:00 DO NOT REDISTRIBUTE 1 October 2018 M&M - Diversified Resources BHP IZ]

Projects overview (capex)

·I Figure 59: Latent capacity - attractive returns, limited risk

Option s IRR-' Risk ' ' Timing " Capcx Dosc ription (%) (1 •'.•J ,US::.m1 WAIO SUpplych11ln debottlenecking initiatives at the port aml rail, and releasing latent >100 <2 years <250 Oebottlenecking • cap c (y at Jlmblebar to increase production to 290 Mtpa Escomllda Expansion of desalination plant to reduce groundwater usage and maximise >50 <2 years EWS Expans ion •• -soo concentrator throughput

Escondlda Concentrator debolllenecking, sulphide leach reprocessing of ripios, truck and >100 var10us >500 De bottlenecking •• shovelfleetupgrades

Spence -60 2-5 yea,s 250-500 Reprocessingof ripios dumped since the beginning of the Spence operations Ripios proce ssing ••

Queensland Coal Investing in stripping capacity and pipeline of produc1ivily initiatives to shift the >100 >5 years >500 Latent capacity • botlleneck towards lhe coal handling plants

Otymplr. Dam FMhlilll) Jlrl'lj for RFX. P.w!P.nrlinom;itP.riRls h,mrlling systP.m (MHS) intn -20 >5 years -500 Material handling system • ------SouthernMine Area Spence Processing lower grade hypogene material with increased recoveries. concentrator >15 >5 years >500 DebolUenecking ••• debottlenecking, in-pit semi mobile ore conveying

Average/aggregate >100 -USS4 bn Up to -2 Ml of incremental Cu cq . capacity wllh -USS16 bn unrisked NPV

Source: Company data • 2018 BAML presentation

IFigure 60: Future options - worked for value, timed for returns

Options IRR 9 Risk" Ooscrlpt1on ('\',) (1-'i )

Atlantis Phase 3 Non­ -25 Tie back to existingAtlantis tacUlty unlocked through Advanced Seismic Imaging Petrnleum operated

Olympic Dam BFX Accelerated development into the Southern Mine Area, debottlenecking of existing surface infrastructure lo -20 Copper •• increase production lo 330 ktpa

Scarborough Non­ >15 Tie back devetopment to existing LNG facility Petroleum operated

Wards Well Long-Ille, premiumhard coking coal resource,greenfield underground longwall mine with proximity to existing Metallurgical Coal -15 •••• operating ---- assets Resolution Non ­ ~15 Underground block cave with attraclive grade profile and compelilive cost curve pos ition Copper operated

Jansen Stage 11• ~13 Tier 1 resourcewith operating costs of -US$100/t (fOB Vancouver) and valuable expansion optionality Potash •••

JanSBn Stage 2-4 -16 Sequen~ brownfield expansions of up to 12 Mtpa (4 Mtpa per stage) Potash ••

Avcragelaggrogale - 17 Aggrogato unriskod valuo of -USS15 bn spanning commod1tlos and time po nods

Source: Company dara • 2018 BAML presenrarion

Jansen Potash Project

Potash project. It just won't go away. And we would not sell it. BHP's Jansen project and the significant tenement holding in Canada is a valuable long term option in our view. Now that all the other large capex projects have been approved and are in progress (Spence, South Flank) the "go slow" and "depend on market conditions strategy" remains in place in relation to the Jansen potash development but we sense, like a brownfield capex project, given the infrastructure is sunk, the economics are likely to be tempting for a development

Page 24 Deutsche Bank AG/Sydney Provided fo1 the exclusive use of Sreemathy Ganesasubramanyam at DB Employee on 2018-10-03T05:05+00:00 DO NOT REDISTRIBUTE 1 October 2018 M&M - Diversified Resources BHP IZ]

decision in 2020 or soon thereafter . Our expectations are presented in the table below for a decision in 2020 or 2021 and first potash production potentially in 2026.

The Jansen potash project is located -140kms east of Saskatoon in the province of Saskatchewan, Canada. BHP currently owns 100% interest in the project and holds extensive exploration permits and mining leases covering -9 ,600sq . kms. The project is one of the world's largest undeveloped potash project and hosts total mineral resources of 6,440Mt @ 25.7% K2O, 7.8% insolubles and 0.08% MgO in its Lower Patience Lake (LPL) potash unit. Given the large resource base, the project offers potential for staged development over an expected longer life of - 70 years, with initial throughput of 4Mtpa and gradually ramping up to -30Mtpa in multiple stages.

As guided by BHP, the proposed flowsheet of the Jansen potash facility would: a) receive shipments of product by rail from the proposed Jansen mine , b) offoad product from rail cars to the conveyor system, c) store potash in the product storage building, and d) transfer product from the product storage building via conveyors to the shiploader and to a waiting vessel for export (8 to 10 trains per week are expected). Three to four vessels would load at the facility per week ranging from Handysize up to Kamsarmax size.

In FY18, BHP's major focus was on the completion of safe excavation and preliminary lining of two 7.3m diameter shafts. Excavat ion of both the service and production shafts were completed by the end of Aug-2018, at a depth of 1,005m and 975m , respectively. Both shafts have reached potash in the Upper and Lower Patience Lake formations .

In June 2018, BHP approved an additional US$122m funding to cover support services at the project site, which further increased the total approved capex to US$2 .7bn and total capex commitment to US$3.9bn. For FY19, BHP has guided to spend -US$239m mainly focusing on the installation of essential surface infrastructure and utilities. The project was -79% complete as of 30-Jun -2018.

The project is currently in permitting and public review process with the Vancouver Fraser Port Authority . BHP is considering multiple options to maximise the value of Jansen, including improvements to capital efficiency , optimisation of design and dilution of interest by bringing in a partner .

We have currently included US$2.8bn (US$0.58 or A$0.78 per share) of undeveloped capex value in our base case NPV. Nevertheless, we estimate the Jansen project to cont ribute US$4.6bn (US$0.95 or A$1.28 per share) in NPV, based on the following assumptions:

■ We assume a development decision in 2020 or soon thereafter, with first potash production potentially in 2026 .

■ We expect the project to be developed in stages, with an initial throughput of 4Mtpa and gradually ramping up to 30Mtpa by 2035.

■ We have conservatively modelled total mineable resources of 1,932Mt over a life of 69 years, which translates to a resource conversion of -30% compared to the total reported mineral resources of 6,440Mt .

Deuts che Bank AG/Sydney Page 25 Provided for the exclusive use of Sreen1athy Ganesasub,amany~m at DB Employee on 2018- 10-03T05 :05->00:00 DO NOT REDISTR IBUT E 1 October 2018 M&M - Diversified Resources BHP IZI • We expect the project to produce ~ 10Mtpa of KCI product at a LOM average K2O grade of 25.7% (in with the reported resource grade), recovery rate of ~82% and K2O equivalent grade in KCI of ~60%. The source of potassium cloride (KCI) is the mineral sylvite (KCI) that contains 63.2% K2O equivalent . KCI product is at least 95% KCI for standard grade and at least 60% K2O equivalent. We expect BHP likely to target a 82% recovery of K2O.

• The project is likely to be one of the world's lowest cost potash producer, with an estimated LOM C1 cash costs of US$111/t and C2 cash costs of US$129/t of KCI product. We assume a LOM average royalties of ~5% of FOB potash price.

• We estimate a total staged development capex of US$12.9bn, which translates to a capital intensity of US$1,307/t ore. We expect a LOM average sustaining capex of US$148m {or US$15/t).

• Bl'!sed on our long-term real FOB potash price of US$350/t, CAD/USO exchange rate of 0.87 and real WACC of 6.4% {8.9% in nominal terms), we estimate the project to generate NPV of US$4.6bn and IRR of~ 10%.

Figure 61: Jansen Potash Growth project DB expectations

Source : Deutsche Bank, Company data

J Figure 62: Jansen potash project economics summary (on 100% basis) Units DB estimate Operating Summary LOM modelled resource Mt 1,932 Mine life Yrs 69 LOM average K2O grade % 25.7% K2O recovery % 82.0% K2O equivalent grade in KCI % 60.0% LOM avera11:eKCI production Mtoa 10 Unit Costand FinancialSummary Min ing US$/t mined 18 Processing US$/t milled 5 Mining and processing US$/t KCI 66 Rail, port and distribution US$/t KCI 45 Cl cashcosts US$/t KCI 111 Royalties US$/t KCI 18 CZ cashcosts US$/t KCI 129 Depreciation US$/t KCt 80 LOM development capex US$m 12,858 LOM sustaining capex US$m 10,179 LOM total capex US$m 23,037 NPV (@ 6.4% real WACC) US$m 4,628 NPV (@ 6.4% real WACC) A$m 6,255 NPV per share US$/sh 0.95 I RR (post-tax) % 10% Long-termPrice Assumptions CAD/USD exchange rate 0.87 Potash price - FOB US$/t 350

Source : Deutsche Bank, Company data

Page 26 Deutsche Bank AG/Sydney Provirlecl for lhe exclusive use of Sreen1all1y Gil nes8s ulmm1anyc1ma t DB Emµloyee on 2018-10-03T05:05 >00:00 DO NOT RED ISTRIBUTE 1 October 2018 M&M - Diversified Resources BHP lZI IFigure 63: Jansen potash project NPV sensitivity Movement In LT real FOB potash price (US$350/t, DBe) -30% -20% -10% 0% 10% 20% 30% -30% 2,367 3,954 5,555 7,224 8,892 10,560 12,229 -20% 1,531 3,125 4,700 6,336 8,004 9,672 11,341 -10% 695 2,295 3,873 5,448 7,116 8,785 10,453 0% -·142 1,462 3,052 4,628 6,229 7,897 9,565 10% -985 628 2,221 3,800 5,374 7,009 8,677 20% -1,828 -208 1,389 2,977 4,556 6,121 7,789 30% -2,674 ·1,046 557 2,148 3,727 5 303 6,902

Source: Deutsche Bank.

Regulatory - operating licence

As part of the 2001 merger with Billiton, BHP is subject to Australian State and Federal regulation that its HQ must remain in Australia (Melbourne) and its CFO and CEO reside in Australia.

Earnings over time

• Financial year end is June and re~orting currency is USD

■ BHP was incorporated in 1885 and BHP Ltd merged with Billiton Pie in 2001 to create its current dual listed structure

■ BHP index weight is 6.55% of ASX100

• Over the 18 years since the merger, the company has been NPAT (underlying earnings) profitable and paid a dividend in all the 18 years

IFigure 64 : EBITDA split by divisions [ Figure 65: Underlying EBITDA summary

Others 40,000 (US$m) 2% Petroleum 19% 35,000 30,000 25,000 20,000 15,000 10,000 5,000

0 OJ') ,._ a:, 0 ,._ a:, w w 0 0 0 0 0 0 0 0 IJ "" "' "' 0 Iron ore 0"' 0 0" 0 0 0 0 0"' 0 0 0"' 0"" "0 0 "'0 0 0 C\I 0"' 0 31% "' "' "' "' "' "' "' "' "' "' "' "' "' "' "' "' "' "' "'

Source: Deutsch e Bank Source: Deursche Bank, Company data

Deutsche Bank AG/Sydney Page 27 Provided for the exclusive use of Sre emath y Ganesasubramanyam at DB Emp loyee on 2018-10-0 3T05 :05+00 :00 DO NOT REDISTRIBUTE 1 October 2018 M&M - Diversified Resources BHP IZ]

j Figure 66: Underlying EBIT summary j Figure 67 : Underlying EPS summary

35,000 (US$m) 450 (US¢) 400 30,000 350 25,000 300 20,000 250

15,000 200 150 10,000 100 5,000 50 j 0 0 .,, 0 0 c1; 0 "' "' "' ulll 0 0 0 0 0 0, 0 0 ....0 0 11ll0 0 0 0 0 0 0 0 ;; "' "' J.lll 0 0 0 0 0 0 0 0 0 0 0 0 u0 0 0 0 0 0 0 0 0 0 N N N N 0 0 N N N N N N N N N N 0 0 "' "' "' "' "' "' "' "' "' "' "' "' "' "' N"' "' "' "' "' "' "' "' "' "' "' Source: Deutsche Bank. Company data Source: Deutsche Bank, Company data

IFigure 68: Sustaining and growth capex split IFigure 69: Capex summary 25,000 (US$m) 25,000 (US$m)

20,000 20,000

15,000

10,000

5,000

0 . - .- ,-,.-,.-.,,-., ,- ,-.-.,-..--.- - .. -..-.- ... -.-.·-.•~·-"1" • -N~V~~~ro~o-NMV~~~rowwwwwww ogai~~~~~~~~~~~~~~~~~~~~~ 000000000------mo-NMV~ 000000000000000000-NNNNNN NNNNNNNNNNNNNNNNNN~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~~~~

■ Growth capex • Sustainingcapex • TotaI capex

Source: Deutsche Bank, Company data Source:Deul5che Bank, Company data

IFigure 70: Underlying EBITDA progression by division 40,000 (US$m) 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 -5,000 LU LU LU LU LU LU a, 0 (\J LO (\J 1'i (\J ~ C\J 0 0 0 0 0 0 (\J (\J (\J (\J (\J (\J

■ Petroleum ■ Copper ■ Iron ore ■ Met Coal ■ Energy Coal ■ Others (incl. exploration & evaluation)

Source: Deutsche Bonk, Company datB

Page 28 Deutsche Bank AG/Sydney Provid ed for the exclusive use of Sreemathy Ga11esasubrarna11yamat DB Employee on 2018 -10-03rG5:05•00:00 DO NOT REDISTRIBUTE 1 October 2018 M&M - Diversified Resources BHP IZI Valuation trends over time (PE, EBITDAx)

IFigure 71: Forward EV/EBITDA multiple (x) IFigure 72: Forward P/E multiple (x)

12 50 10 40 8 30 6 20 4 2 10 l!)

Source: Deutsche Bank, Bloomberg Finance LP Source: Deutsche Bank, Bloomberg Finance LP

Capital structure

IFigu re 73: Share price performance j Figure 74: Share premium (BHP ASX vs. BLT LSE)

60 (US$/sh) 60% 50% 50 40% 40 30% 30 20% 20 10% 10 0% 0 -10% Lt) a, It) (l) 0 l!) a, Lt) 0 C\J M "

Source: Bloomber g Finance LP Source: Bloomberg Finance LP

j Figure 75 : Shares in issue IFigure 76: Total shares 7,000 (m) 6,600 (m) 6,500 6,000 6,400 5,500 6,200 5,000 4,500 6,000 4,000 5,B00 3,500 3,000 5,600 2,500 2,000 5,400 1,500 5,200 1,000 500 5,000 0 4,B00 0 C\I LO I'- CX) 0, 0 LO I'- CX) ... 0 0 ... 0 ... LO I'- co 0 ... LO I'- co 9 9 9 "'9 9 "' 9 9 9 "' "' "' 0 0 0 0 0"' "' C: C: C: C: C: C: C C C: C C C C: /::. 9 9 "' "' 9 "' "' "' ~ ~ ~ ~ ~ C C i i /::. C /::. /::. /::. /::. /::. /::. /::. /::. /::. /::. /::. ~ /::. -, -, -,"' -,"' -,"' -,"' -,"' -,"' -,"' -,"' -, -, -, -,"' -,"' -,"' -,"' -,"' -,"' -,"' -,"' -,"' -,"' -,"' -,"' -,"' -,"' -,"' -,"' -,"' -,"' -,"' -,"' -,"' -,"' -,"' -,"' -,"' -- BHP shares on issue -- BLT shares on issue --Total shares -- Total shares

Source: Bloomberg Finance LP Source: Bloomberg Finance LP

Deutsche Bank AG/Sydney Page 29 Provided for the exclusive use of Sree rnalhy Ganesasubrarnanyarn at DB Empl oyee on 2018-10-03T05:05+00:00 DO NOT REDISTRIBUTE 1 October 2018 M&M - Diversified Resources BHP IZI j Figure 77: Ltd as a % of total shares

63%

62%

61%

60% 59% 58% 57%

56% 0 ,- t\J C') ' 0 t\J C') '

Source : Bloomberg Finance LP

$10bn of proceeds - how to return? Historically BHP has opted for off market buybacks as the preferred way to return capital and we would not be surprised to see this occur again given it offers the opportunity to repurchase at a discount to Ltd share price and return franking credits.

IFigure 78: BHP history of Capital Management in detail Description Date Date Shares Cost (local Cost (US$ Ratio commenced completed repurchased currency) million) Ltd Pie August 2004 program Off-market buy-back of BHP Billiton Limited shares 23-Nov-04 180,716,428 A$2,272m US$1,780m February 2006 program Off-market buy-back of BHP Billiton Limited shares 3-Apr-06 95,950,979 A$2,250m US$1,600m 80% 20% On-market buy-back of BHP Billiton Pie shares 27-Apr-06 16-May-06 18,820,000 £217m US$409m Total under February 2006 program 114,770,979 US$2,009m February 2011 expanded program On-market buy-back of BHP Billiton Pie shares (1) 7-Sep-06 14-Dec-07 243,625,800 £3,012m US$6,002m 32% 68% Off-market buy-back of BHP Billiton Limited shares (1) 26-Mar-07 141,098,555 A$3,501m US$2,817m Off-market buy-back of BHP Billiton Limited shares (2) 11-Apr-11 146,899,809 A$6,000m US$6,340m 63% 37% On-market buy-back of BHP Billiton Pie shares (2) 16-Nov-10 29-Jun-11 94,935,748 £2,275m US$3,677m Total under February 2011 program expanded 626,559,912 US$18,836m 49% 51% Notes: Ill On 23 August 2006, BHP BIiiiton announced its Intention to return U5$3 billion to shareholders over the next 18 months through a series of share buy-backs. On 7 February 2007, a US$10 billion extension to this program was announced. At that date, 93,435,000 shares in BHP Billiton Pie had been repurchased under t he August 2006 program at a cost of US$1.7 billion, leaving US$1.3 billion to be carried forward and added to the February 2007 program. On-market purchases of BHP Billiton Pie shares continued until 14 December 2007, when the program was suspended until further notice (DB note : offer to acquire Rio Tinto commenced around this time) (2) On 15 November 2010, BHP Billiton announced its intention to continue the company's strong track record of returning excess capital to shareholders by reactivating the remaining US$4.2 billion component of its previously suspended US$13 billion buy-back program. On 16 February 2011, BHP Billiton announced an expanded total US$10 billion capital management program (which includes the US$4.2 billion reactivated on 15 November 2010) which was completed on 29 June 2011 .

Source: Companydata

Page 30 Deutsche Bank AG/Sydney Provid ed for tl1e exclusive use of Sreem athy Ganesas ubramanyam at DB Employee on 2018 -10-03T05:05+00 00 DO NOT REDISTRIBUTE 1 October 2018 M&M - Diversified Resources BHP IZI IFigure 79: Cross guarantee structure for issuance of debt

IHP lllllton Ud 8h•rehokt•n

[ IHP lilllton_ Ud_ ___, Pie

Cross Guarant•u

,ubr diuy of 8HP 81tllton L d u the Issue ,/ bo1rowe,

Source: Company data

IFigure 80: Dual Listed Company structure - merged but not consummated

Tru~1 ru•1 Billiton Corpor.i:lon orporn1 Shareholders l lilliw1 SPC llHP \P C. 11,i1h \'ihh ~PQ

BHP ')i .:1• ; ·'\( , ' 11.ir, •• ,·1 1, 8111iton r l

Source: Company data

Deutsche Bank AG/Sydney Page 31 Provid ed for the exclusive use of Sreemathy Ganesasubramanyam at DB Employee on 2018-10-03T05 :05+00:00 DO NOT REDISTRIBUTE 1 October 2018 M&M - Diversified Resources BHP [Z)

Debt maturity profile

J Figure 81: Debt balances Debt balances (US$ billion)

8

6

4 2 - 0 - FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29 Post FY29

USS Euro Sterling AS cs Bonds Bonds Bond~ Bonds Bonds Subsidiaries % ol portfolio 3% 3% Capital markets 90% Asset financing 10%

Source: Company data - FY18 financial results presentation

Capital allocation and returns

j Figure 82: Capital allocation framework

Ove,.111r1g C•p1t•I produtl i'_-1ty vrc:.1h1c•1v1cy

Not Dl>lffllt n9 cnh ftaw

Munton1nco c,opt1&I -----

Source: Company data • 2018 BAML presentation

Page 32 Deutsche Bank AG/Sydney Provided for the exclusive use of Sreemathy Ganesasubramanyam at DB Employee on 2018-10-03T05:05+00:00 DO NOT REDISTRIBUTE 1 October 2018 M&M· Diversified Resources BHP IZI [ Figure 83: Capital returns over time

Capflal roturnod ovor limo' ■ Dividends ■ Buyh kt. (hi M:11(,f I 11 /r: ■ Buybacks Off~Market Ltd (USS·~ billion) 14.9

10 8.0 8.3

5

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 H1 FY17

Source: Company data - Response to Elli'ott proposals Apr 2017

Dividend Policy The Group adopted a dividend policy in February 2016 that provides for a minimum 50% payout of underlying attributable profit at every reporting period.

The Board will assess, at every reporting period, the ability to pay amounts additional to the minimum payment, in accordance with the Capital Allocation Framework.

Sourced from: Annual Report

Management

The CEO was appointed in May-2013, taking over from who held the role for 6 years.

Andrew Mackenzie - Chief Executive Officer BSc (Geology), PhD (Chemistry).

Andrew commenced as Chief Executive Officer in May 2013 . He joined BHP in November 2008 as Chief Executive Non-Ferrous. Prior to BHP, Andrew worked at Rio Tinto, where he was Chief Executive of Diamonds and Minerals, and BP, where he held a number of senior roles, including Group Vice President for Technology and Engineering, and Group Vice President for Chemicals .

Arnaud Balhuizen - Chief Commercial Officer BBE.

Arnaud was appointed Chief Commercial Officer in March 2017 . Prior to this, he was President Marketing and Supply from 2016. Arnaud started his career with Billiton in 1994 working for the Marketing and Trading division in the Netherlands and since then he has held various marketing roles, including General Manager Marketing for Copper Cathodes, Vice President Iron Ore Marketing and Vice President Petroleum Marketing.

Peter Beaven - Chief Financial Officer BAcc, CA.

Peter was appointed Chief Financial Officer in October 2014. Previously he was the President of Copper and prior to that appointment in May 2013,

Deutsche Bank AG/Sydney Page 33 Provided for t11e exclusive use of Sreemathy Ganesas ubramanyam at DB Employee on 2018-10-03T05:05+00 :00 DO NOT REDISTRIBUTE 1 October 2018 M&M - Diversified Resources BHP IZI President of Base Metals, President of Manganese, and Vice President and Chief Development Officer for Carbon Steel Materials . He has wide experience across a range of regions and businesses in BHP, UBS Warburg, Kleinwort Benson and PricewaterhouseCoopers. Peter holds a Bachelor of Accountancy from University of Natal, Pietermaritzburg, South Africa and is a Chartered Accountant.

Geoff Healy - Chief External Affairs Officer BEc, LLB.

Geoff joined BHP as Chief Legal Counsel in June 2013. Prior to BHP, Geoff was a partner at Herbert Smith Freehills for 16 years and worked widely across its network of Australian and international offices . His core field of expertise is complex corporate and regulatory advisory work, risk management, investigations and disputes.

Geoff has been an active member of the International Bar Association (International Litigation) and is currently the Australian Chair of that Committee. Geoff has also been a member of the New South Wales Law Society professional conduct review tribunal and undertaken work for a range of charitable and not­ for-profit organisations over many years.

Mike Henry - President Operations , Minerals Australia BSc (Chem).

Mr Henry joined BHP in 2003 and served as President, Coal from January 2015 to February 2016 when he was appointed President Operations, Minerals Australia . Prior to January 2015, he was President, HSE, Marketing & Technology. His earlier career with BHP included a number of commercial roles covering both Minerals and Petroleum , including the role of Chief Marketing Officer.

Diane Jurgens - Chief Technology Officer BSEE, MSEE, MBA

Diane joined BHP in 2015 and was appointed Chief Technology Officer in February, 2016 . Prior to joining the company, Diane was based in China for nearly 10 years, serving as Board Member and Managing Director of Shanghai OnStar Telematics Company in addition to prior roles as Chief Information Officer and Strategy Board member for General Motors' International and China Operations. Diane's early career was with the Boeing Company where she worked for 12 years in engineering, information technology and business development leadership roles.

Daniel Malchuk - President Operations , Minerals Americas BE, MBA.

Daniel was appointed President, Copper in March 2015. Previously he was the President of the Aluminium, Manganese & Nickel Business and prior to that appointment in May 2013, President of Minerals Exploration. He worked for the Company between 1996 and 1998 in BHP Copper in the USA and has held a number of roles in the Base Metals business since he rejoined BHP in 2002. In 2006 he took the role of Asset Leader Joint Ventures and was also Vice President Strategy and Development in Base Metals . Daniel has a Civil Industrial Engineering degree from the University of Chile and a Masters of Business Administration from the University of California in Los Angeles (UCLA).

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Steve Pastor - President Operations, Petroleum BSc (Mechanical Engineering), MBA.

Steve joined BHP in 2001 and was appointed President Petroleum Operations in February 2016. He is responsible for the Company's global oil and gas operations and exploration program. Over his career with the Company, Steve has served as Asset President Conventional and he has held leadership roles in deepwater and shale operations . Prior to joining BHP, Steve's experience includes 11 years with Chevron .

Athalie Williams - Chief People Officer BA (Hons).

Ms Williams joined BHP in 2007 and was appointed to the Group Management Committee as President, Human Resources in January 2015 . Ms Williams' title changed to Chief People Officer effective 1 July 2015. She has previously held senior Human Resources positions including Vice President Human Resources Marketing, Vice President Human Resources for the Uranium business and Group HR Manager, Executive Resourcing & Development . Prior to BHP, Ms Williams was an organisation strategy and workforce transformation advisor with Accenture {formerly Andersen Consulting) and National Australia Bank.

Sourced from: Company Website

Board of Directors overview

BHP's board consists of 10 members led by Mr. Ken MacKenzie {Chairman) and includes the CEO.

Mr . Ken has been a Director of BHP Billiton Limited and BHP Billiton Pie since September 2016 . He was appointed Chairman with effect from 1 September 2017 .

Ken MacKenzie - BEng, FIEA, FAICD / Independent Skills and experience:

Ken has extensive global and executive experience, and a deeply strategic approach . From 2005 until 2015, he served as the Managing Director and Chief Executive Officer of Amcor Limited, a global packaging company with operations in over 40 countries . During his 23 year career with Amcor, Ken gained extensive experience across all of Amcor's major business segments in developed and emerging markets in the Americas, Australia, Asia and Europe .

Other directorships and offices (current and recent):

■ Former Managing Director and Chief Executive Officer of Amcor Limited (from July 2005 to April 2015).

■ Advisory Board member of American Securities Capital Partners LLC {since January 2016) .

■ Advisory Board member of Adamantem Capital (since September 2016).

■ Former Senior Adviser to McKinsey & Company (from January 2016 to June 2017).

Deutsche Bank AG/Sydney Page 35 Provided for the exclusive use of Sreemathy Ganesasubramanyam at DB Employee on 2018-10-03T05 :05 >00:00 DO NOT REDISTRIBUTE 1 October 2018 M&M - Diversified Resources BHP IZI Board Committee memberships :

• Chairman of the Nomination and Governance Committee .

• Member of the Sustainability Committee.

Sourced from: Company Website

History of Significant Corporate Events

IFigure 84: BHP significant events O.atc Event 2001 OHP BIiiiton merger approved 2001 Aotamina Copper-Zinc project in Northern Peru achieves commercial production 2001 0:MI Diamond Mine in Canada starts Misery Pipe production 2002 8HP Billiton completes withdrawal from the Ok Tedi copper mine in PNG 2002 Oemergerof BHP Steel 2003 appointed as BHP Billiton Chief Executive 2003 First oil and gas production from the Boris field In the deepwater Gulf of Me,cico 2004 BHP BIiiiton approves US$870mn for Escondida Sulphide Leach Copper Project in Chile 2004 BHP Billiton approves US$990 million for Spence copper project in Northern Chile 2005 OIi and natural gas production begins from the Mad Dog In the deepwater Gulf of Mexico 29-Aug-05 BHP extends on market buyback by 12 months to 30-Sep-06 and nearly doubles the number of shares to be bought back to 356mn from 186mn. BHP Billiton acquired Western Mining Corporation (WMC) for A$7.8S per share (A$9.2bn), adding key assets Olympic Dam (copper/gold in South Australia) and Nickel West (Western 2005 Australln) 2006 BHPBIiiiton agrees to sell Its Australian Coal 8ed Methane (C8M) interests to The Australian Gas Light Company (AGL) for US$687mn 3-Apr-06 BHPcompletes A$2 .25bn (US$1.6bn) off-market share buy-back 26-Mar-07 BHPcompletes US$3.Sbn off market buy-back 31-May-07 Mariu s Kloppers succeeds Chip Goodyear as Chief Executive Officer Nov-07 Bl-lP proposes to merge with Rio Tinto, offering three BHP shares for one Rio share. Rio rejects approach D~ -07 a~•Psuspends on market buyback Feb-08 BHP increases Rio offer to 3.4 shares 17-Jul,08 Ac.quires New Saraji Coal project in Queensland for US$1 2bn Nov-08 BHP withdraws offer for Rio Tinto 2009 fir "St oil and natural gas production from the Shenzi development in the deepwater Gulf of Mexico 2009 BHP Billiton celebrates the opening of the "Newman Mlnlng Hub" at its Western Australia tron Ore operations Jun-09 RIO Tinto and BHP Billiton sign a non-binding agreement to establish a production JV covering Western Australian Iron Ore assets 2009 flrs-t production from the expansion of the Alumar alumina refinery in Brazil 2010 BHP BIiiiton acquires Athabasca Potash in Canada Aug-JO BHP makes cash offer for Potash Corp of Saskatchewan at US$130/share for US$40bn Oct-10 BHP Billiton and Rio Tinto drop plans for Western Australia Iron Ore JV following concerns from regulators in Europe and Asia Nov-10 BHP withdraws from Potash Corp takeover after Canadian Investment Review rejection Nov-10 BHP reactivates buyback 22-Feb-11 BHP acquires Chesapeake Energy Carp's interests in the Fayetteville Shale, USA for US$4.7Sbn 22-Feb-11 BHP announces off-market buyback that will form part of its expanded US$10bn capital management initiative 24-Mar-11 BHP approves US$7 4bn of CAPEXto fuel production growth in the WA Iron Ore operations 24•Mar-11 BHP approves US$2.Sbn for three met coal projects In the Bowen Basin, Queensland 2·May•l l Sarnarco approves US$3.Sbn (BHP share US$1.75bn) for iron ore operations In Fourth Pellet Plant Project, Samarco, Brazil 1S•lul-11 BHP acquires Energy Corp for US$12.lbn, which provides BHP with operated positions in the Permian Basin, Eagle Ford, and Haynesville shales 12-0ct -11 BHP announces US$1.2bn in pre-commitmerit capital to fund the first phase of the Olympic Dam Project to develop an open pit mine in South Australia 1-Feb-ll BHP exits Titanium minerals industry after selling its 37% non-operated interest in (RBM) to Rio Tinto 14-Feb-12 BHPapproves US$2.6bn investment for the Escondida mine for the Organic growth Project 1 (OGPl) and the Oxide Leach Area Project (OLAP) 14-NOV•12 BHP sells diamonds business to Harry Winston Diamond Mines for US$500mn 7-Jun-13 Sells interest in Browse oil/gas JV for pre tax profit $1.Sbn 2013 Work stops on Port Hedland Outer-Harbour Iron Ore expansion and Olymplc Dam expansions 1.HFY14 Share of Jimblebar iron ore WA and Pinto Valley Copper (USA) sold for $2.2bn S•Nov·IS Samarco BHP's 50/50 Iron Ore JV in Brazil with Vale suffers failure causing extensive flood and the loss of 17 lives Ocl-15 Issue hybrid debt $6.Sbn that matures 207S with varying Interest rates up to 6.2S%. Feb-16 Drops long held progressive dividend policy in place of 50% of EPSplus additional as can afford .

Mar-17 US activist fund Elliot discloses shareholding and calls for change including selling petroleum, unifying the dual listing structure and returning more cash to shareholders via buybacks. 17-Aug-17 Approves$2.Sbn to extend life of Spence Copper mine Chile App roves 80Mt/yr. South Flank Iron Ore mine Pilbara for $2.9bn (for 85% share), replacing 80Mt/yr. and in process upgrading BHP's average ore grade~Approval came sooner 14-Jun-18 lhon originally guided , Jul-18 Sells US on shore shale petrol1,um to BP for $10 .Sbn cash cxltlnR the who le business

Source: Company daro

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Significant shareholders

IFigure 85: Top 20 shareholders of BHP Billiton Ltd Name Shareslml ·":held HSBC Custo dy Nominees (Allst rat!a) Ltd 785.6 24.5 J P Morgan Nominees Australia Ltd 541.6 16.9 Citic orp Nominees Pty Ltd 161.0 5.0 Citi corp Nominees Pty Ltd 147.7 4.6 Nati on ~! Nominees Ltd 120.9 3.8 BNPPar ibas Nominees Ply Ltd 78.0 2.4 Citicorp Nominees Pty Ltd 35.2 1.1 BNP Paribas Noms Pty Ltd 35.1 1.1 HSBC Custo dy Nom inees (Australia) Ltd 21.1 0.7 Computershare Nominees Cl Ltd 14.7 0.5 Australian Foundat ion Investment Company Ltd 14.0 0.4 AM P Life Ltd 10.4 0.3 Argo Investm ents Ltd 7.9 0.3 HSBCC ustody Nominees (Australia) Ltd 6.5 0,2 HSBCCu stody Nominees (Australia) Ltd 5.9 0.2 N~lllsato r Australia Ltd 4.3 0.1 Solium Nominees (Australia) Pty Ltd 4.2 0.1 MIiton Corporation Ltd 4.0 0.1 Netwealth Investments Ltd 4.0 0.1 IOOF Investment Manairement Ltd 3.4 0.1 Top 20Total 2,005.S 62.4

Source: Compan y data - BHP 20 18 Ann ual Report

j Figure 86: Top 20 shareholders of BHP Billiton Pie Name 5hareslml "held PLC Nominees (Proprietary) Ltd 316.9 15.0 State Street Nominees Ltd 165.7 7.9 National City Nominees Ltd 111.9 5.3 The Bank of New York (Nominees) Ltd 98.4 4.7 Chase Nom inees Ltd 65.9 3.1 State Street Nominees Ltd 53.4 2.5 Vidaco s Nominee s Ltd <13559 > 50.6 2.4 Nortrust Nominees Ltd 47.7 2.3 Government Employees Pension fund - PIC 39.0 1.8 Hanover Nominees Ltd 33.3 1.6 Vidaco s Nom inees Ltd 32.0 1.5 Chase Nominees Ltd 30.5 1.4 Chase Nom inees l td 30.1 1.4 State Street Nominees Ltd <0D64> 30.1 1.4 Euroclear Nominees Ltd 27.1 1.3 Lynchwood Nominees Ltd <2006420> 25.6 1.2 Nutraco Nominees ltd <781221> 25.2 1.2 Industrial Development Corporation of South Africa 23.7 1.1 HSBC Global Custody Nominee (UK) Ltd <357206 > 23.4 1.1 Vidacos Nominees Ltd <10245> 22.6 1.1 Top 20 Total 1,253.2 59.3

Source: Compan y data - BHP 2018 An nual Report

Research Contribution

The authors of this report wish to acknowledge the contributions made by Priyabrata Mansingh and Sreemathy Ganesasubramanyam, employees of lrevna, a division of CRISIL Limited and a third-party provider to Deutsche Bank of offshore research support services .

Deutsche Bank AG/Sydney Page 37 Provided for the exclusive use of Sreemathy Ganesasub ramanyam at DB Employee on 2018- 10-03T05:05+00:00 DO NOT REDISTRIBUTE 1 October 2018 M&M - Diversified Resources BHP IZI Appendix

Dividend histor Figure 87: BHP Billiton Ltd dividend history

310 09 Aug 1985 n/a n/a 311 18 Apr 1986 02 May 1986 28 May 1986 20C 7.17 n/a n/a 312 19 Sep 1986 31 Oct 1986 26 Nov 1986 17.SC 8.11 n/a n/a 313 27 Mar 1987 01 May 1987 27 May 1987 20C 8.85 n/a n/a 314 18 Sep 1987 30 Oct 1987 25 Nov 1987 15C • 7.04 n/a 49% 315 24 Mar 1988 29 Apr 1988 08 Jun 1988 17¢ • 7.18 n/a 49% 29 Nov 1988 17C 316 16 Sep 1988 04 Nov 1988 7.22 30 Nov 1988 17C * 7.22 49% 16 May 1989 9C 6.97 317 31 Mar 1989 28 Apr 1989 17 May 1989 9C * 6.97 49% 04 Jul 1989 9C 318 25 May 1989 16 Jun 1989 8.11 05Jul1989 9C * 8.11 39% 28 Nov 1989 17.5¢ 319 15 Sep 1989 10 Nov 1989 8.71 29 Nov 1989 17.SC * 8.71 39% 05 Jun 1990 19C 320 30 Mar 1990 18 May 1990 8.67 06 Jun 1990 19¢ * 8.67 39% 27 Nov 1990 19.5¢ 321 21 Sep 1990 09 Nov 1990 9.84 28 Nov 1990 19.5¢ * 9.84 39% 04 Jun 1991 21¢ 322 22 Mar 1991 17 May 1991 11.68 05 Jun 1991 21c• 11.68 39% 26 Nov 1991 19.5¢ 323 20 Sep 1991 08 Nov 1991 14.26 27 Nov 1991 19.5¢* 14.26 39% 02 Jun 1992 21¢ 324 27 Mar 1992 15 May 1992 13.39 03 Jun 1992 21¢* 13.39 39% 24 Nov 1992 19.5¢ 325 18 Sep 1992 06 Nov 1992 10.37 25 Nov 1992 19.5C* 10.37 39% 01 Jun 1993 21¢ 326 26 Mar 1993 14 May 1993 13.29 02 Jun 1993 21¢* 13.29 39% 23 Nov 1993 21C 327 17 Sep 1993 05 Nov 1993 16.71 24 Nov 1993 21¢* 16.71 39% 01 Jun 1994 23C 328 25 Mar 1994 13 May 1994 15.88 01 Jun 1994 23C* 15.88 39% 29 Nov 1994 24C 329 23 Sep 1994 11 Nov 1994 18.46 30 Nov 1994 24C* 18.46 39% 06 Jun 1995 26C 330 31 Mar 1995 19 May 1995 16.97 07 Jun 1995 26C* 16.97 33%# 28 Nov 1995 25C 331 22 Sep 1995 10 Nov 1995 17.15 29 Nov 1995 25¢* 17.15 36% 04 Jun 1996 26¢ 332 22 Mar 1996 17 May 1996 18.11 05 Jun 1996 26C* 18.11 36% 26 Nov 1996 25C 333 20 Sep 1996 08 Nov 1996 15.82 27 Nov 1996 25C* 15.82 36% Note: • - Fully Franked," Fully Unfranked, # 16.51% of dividend was franked at 39% and 83.49% was franked at 33% Dividend Investment Plan commenced with the 307th dividend payment and was suspended after the 339th dividend payment. BonusShare Plan commenced with the 316th dividend payment and was suspended after the 338th dividend payment . The rate used to calculate BSP shares is a not ional value only.

Source: CamlH!_n't'_data

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IFigure 88: BHP Billiton Ltd dividend history (continued) Determination Dividend Rate Dividend Rate DIP$ Value BSP Notional Value Rate of Imp . Record Date Date Payable Payment Number Date (AUS) [US) Per Share Per Share Cred. 03 Jun 1997 26C 17.81 334 21 Mar 1997 16 May 1997 04Jun 1997 26C* 17.81 36% 25 Nov 1997 25C 14.25 335 19 Sep 1997 07 Nov 1997 26 Nov 1997 25C* 14.25 36% 02 Jun 1998 26¢ 13.89 336 20 Mar 1998 15 May 1998 03 Jun 1998 26C* 13.89 36% 24 Nov 1998 25C 13.00 337 18 Sep 1998 06 Nov 1998 25 Nov 1998 25C* 13.00 36% 01 Jun 1999 26C 16.55 338 26 Mar 1999 14 May 1999 02 Jun 1999 26C* 16.55 36% 339 17 Sep 1999 05 Nov 1999 24 Nov 1999 25¢" 15.67 N/A 0% 340 26 May 2000 09Jun 2000 03Jul2000 26¢" N/A N/A 0% As at 1 Novembe 2000 BHP Limited capital was reduced by $0.66 ~er sharesthrough the OneSteel Limited Splnout. 341 02 Nov2000 17 Nov 2000 06 Dec 2000 2SC" N/A N/A 0% 342 03 May 2001 08 Jun 2001 02Jul2001 26C" N/A N/A 30% 343 07 Nov 2001 16 Nov 2001 05 Dec 2001 12.soc• 6.5C N/A N/A 30% 344 03 May 2002 07 Jun 2002 03Jul 2002 11.96c• 6.SC N/A N/A 30% 345 31 Oct 2002 15 Nov 2002 04 Dec 2002 12.52C • 7.0C N/A N/A 30% 346 07 May 2003 13 Jun 2003 02Jul 2003 1_1.88C" 7.SC N/A N/A 30% 347 29 Oct 2003 14 Nov 2003 03 Dec 2003 11.4tc• 8.0C N/A N/A 30% 348 23 Mar 2004 16 Apr 2004 05 May 2004 11.34C" 8.5C N/A N/A 30% 349 18 Aug 2004 03 Sep 2004 22 Sep 2004 13.23C* 9.SC N/A N/A 30% 350 28 Feb 2005 04 Mar 2005 23 Mar 2005 17.15C* 13.SC N/A N/A 30% 351 24Aug2005 09 Sep 2005 28 Sep 2005 19.20C* 14.SC N/A N/A 30% 352 15 Feb 2006 03 Mar 2006 22 Mar 2006 23.72C* 17.SC N/A N/A 30% 353 23 Aug 2006 08 Sep 2006 27 Sep 2006 24.24C* 18.SC N/A N/A 30% 354 07 Feb 2007 02 Mar 2007 20 Mar 2007 25.81C* 20C N/A N/A 30% 355 22 Aug 2007 14 Sep 2007 28 Sep 2007 33.63C* 27C N/A N/A 30% 356 06 Feb 2008 29 Feb 2008 18 Mar 2008 31.94C* 29C N/A N/A 30% 357 18Aug 2008 05 Sep 2008 25 Sep 2008 46.90¢* 41C N/A N/A 30% 358 04 Feb 2009 27 Feb 2009 17 Mar 2009 64.95¢* 41C N/A N/A 30% 359 12 Aug 2009 04 Sep 2009 25 Sep 2009 48.68¢* 41C N/A N/A 30% 360 10 Feb 2010 05 Mar 2010 23 Mar 2010 46.47C* 42¢ N/A N/A 30% 361 25 Aug 2010 10 Sep 2010 30 Sep 2010 48.65¢* 45C N/A N/A 30% 362 16 Feb 2011 11 Mar 2011 31 Mar 2011 45.94¢* 46C N/A N/A 30% 363 24 Aug 2011 09 Sep 2011 29 Sep 2011 52.0lC* SSC N/A N/A 30% 364 08 Feb 2012 02 Mar 2012 22 Mar 2012 51.07¢* SSC N/A N/A 30% 365 22 Aug 2012 07 Sep 2012 28 Sep 2012 ss.o8c* 57C N/A N/A 30% 366 20 Feb 2013 08 Mar 2013 28 Mar 2013 55.57C* 57C N/A N/A 30% 367 20 Aug 2013 06 Sep 2013 25 Sep 2013 64.38C* 59¢ N/A N/A 30% 368 18 Feb 2014 07 Mar 2014 26 Mar 2014 64.72C* 59C N/A N/A 30% 369 19 Aug 2014 OSSep 2014 23 Sep 2014 66.20C* 62C N/A N/A 30% 370 24 Feb 2015 13 Mar 2015 31 Mar 2015 80.82¢* 62C N/A N/A 30% 371 25 Aug 2015 11 Sep 2015 29 Sep 2015 87.78C* 62C N/A N/A 30% 372 23 Feb 2016 11 Mar 2016 31 Mar 2016 21.37C* 16C N/A N/A 30% 373 16Aug 2016 02 Sep 2016 20 Sep 2016 18.52 C* 14C N/A N/A 30% 374 21 Feb 2017 10 Mar 2017 28 Mar 2017 53.18C* 40C N/A N/A 30% 375 22 Aug 2017 08Jul 1907 26 Sep 2017 52.95C* 43C N/A N/A 30% 376 20 Feb 2018 09 Mar 2018 27 Mar 2018 70.58C* SSC N/A N/A 30% Note: • - Fully Franked, "Fully Unfranked, # 16.51% of dividend was franked at 39% and 83.49% was franked at 33% DividendInvestment Plan commenced with the 307th dividend payment and was suspended after the 339th dividend payment. BonusShare Plan commenced with the 316th dividend payment and was suspended after the 338th dividend payment. The rate used to calculate BSP shares is a notional value only.

Source: Company data

Deutsche Bank AG/Sydney Page 39 Provided for the exclusive use of Sreemathy Ganesasubramanyam at DB Employee on 2018-10-03T05 :05+00:00 DO NOT REDISTRIBUTE 1 October 2018 M&M · Diversified Resources BHP IZI j Figure 89: BHP Billiton Pie dividend history Payment Number Determination Date Record Date Date Payable Dividend Rate (US) Dividend Rate (£) Dividend Rate (ZAR) 1 02 Mar 1998 13 Mar 1998 17 Apr 1998 0.04 0.02 0.17 2 07 Sep 1998 18 Sep 1998 23 Oct 1998 0.07 0.04 0.43 3 01 Mar 1999 12 Mar 1999 16Apr 1999 0.04 0.02 0.22 4 07 Sep 1999 17 Sep 1999 22 Oct 1999 0.07 0.04 0.42 5 28 Feb 2000 10 Mar 2000 07 Apr 2000 0.04 0.02 0.24 6 29Aug2000 08Sep 2000 03 Nov 2000 0.08 0.05 0.52 7 12 Feb 2001 23 Feb 2001 23 Mar 2001 0.04 0.03 0.32 8 21 May 2001 01 Jun 2001 02Jul2001 0.08 0.06 0.64 9 07 Nov 2001 16 Nov 2001 05 Dec 2001 0.07 0.04 0.62 10 03 May 2002 07 Jun 2002 03Jul2002 0.07 0.04 0.69 11 31 Oct 2002 15 Nov 2002 04 Dec 2002 0.07 0.05 0.70 12 07 May 2003 13 Jun 2003 02Jul2003 0.08 0.05 0.56 13 29 Oct 2003 14 Nov 2003 03 Dec 2003 0.08 0.05 0.55 14 23 Mar 2004 16 Apr 2004 05 May 2004 0.09 0.05 0.56 15 18Aug 2004 03 Sep 2004 22 Sep 2004 0.10 0.05 0.62 16 16 Feb 2005 04 Mar 2005 23 Mar 2005 0.14 0.07 0.82 17 24Aug 2005 01 Sep 2005 28 Sep 2005 0.15 0.08 0.94 18 15 Feb 2006 03 Mar 2006 22 Mar 2006 0.18 0.10 1.08 19 23 Aug 2006 08 Sep 2006 27 Sep 2006 0.19 0.10 1.30 20 07 Feb 2007 02 Mar 2007 20 Mar 2007 0.20 0.10 1.45 21 22 Aug 2007 14 Sep 2007 28 Sep 2007 0.27 0.14 1.98 22 06 Feb 2008 29 Feb 2008 18 Mar 2008 0.29 0.15 2.14 23 18 Aug 2008 05 Sep 2008 25 Sep 2008 0.41 0.22 3.21 24 04 Feb 2009 27 Feb 2009 17 Mar 2009 0.41 0.29 4.18 25 12 Aug 2009 04Sep 2009 25 Sep 2009 0.41 0.25 3.18 26 10 Feb 2010 05 Mar 2010 23 Mar 2010 0.42 0.28 3.27 27 25 Aug 2010 10 Sep 2010 30 Sep 2010 0.45 0.29 3.25 28 16 Feb 2011 11 Mar 2011 31 Mar 2011 0.46 0.29 3.17 29 24 Aug 2011 09 Sep 2011 29 Sep 2011 0.55 0.34 3.85 30 08 Feb 2012 02 Mar 2012 22 Mar 2012 0.55 0.35 4.19 31 22 Aug 2012 07 Sep 2012 28 Sep 2012 0.57 0.36 4.81 32 20 Feb 2013 08 Mar 2013 28 Mar 2013 0.57 0.38 5.14 33 20Aug 2013 06 Sep 2013 25 Sep 2013 0.59 0.38 6.10 34 18 Feb 2014 07 Mar 2014 26 Mar 2014 0.59 0.35 6.33 35 19 Aug 2014 05 Sep 2014 23 Sep 2014 0.62 0.38 6.58 36 24 Feb 2015 13 Mar 2015 31 Mar 2015 0.62 0.42 7.31 37 25 Aug 2015 11 Sep 2015 29 Sep 2015 0.62 0.40 8.46 38 23 Feb 2016 11 Mar 2016 31 Mar 2016 0.16 0.11 2.50 39 16 Aug 2016 02 Sep 2016 20 Sep 2016 0.14 0.11 1.99 40 21 Feb 2017 10 Mar 2017 28 Mar 2017 0.40 0.33 5.25 41 22 Aug 2017 08 Sep 2017 26 Sep 2017 0.43 0.33 5.57 42 20 Feb 2018 09 Mar 2018 27 Mar 2018 0.55 0.40 6.52

Source: Company data

Page 40 Deutsche Bank AG/Sydney Provideci for the exclusive use of Sreernathy Ga11esasub1amanyarn at DB Employee on 2018-10-17T09:30·1 00:00 DO NOT REDISTRIBUTE Deutsche Bank Research

Rating Company Date IZI Hold BHP 17 October 2018 Results Australasia Australia Reuters Bloomberg Exchange Ticker Price at 16 Oct 2018 33.90 M&M - Diversified BHP.AX BHP AU ASX BHP Price target - 12mth 36.00 Resources 52 week range (AUD) 35.50 - 26.49 ALL ORDINARIES 6,041 Firing along

Valuation & Risks James Gurry Production for 01 was broadly in line noting that the last time BHP spoke to the Research Analyst market post results in August, the Olympic Dam acid plant outage was occurring +61-3-9270-4104 and hinted at future changes to copper guidance, and since then Spence Copper in Chile experienced a fire at the electro-winning plant. Both events resulting in the Liam Fitzpatrick full-year reduction in copper production guidance by 3% to 1,620-1, 705kt (DBe Research Analyst now 1,673kt against 1,729kt previously). This drives our EBITDA forecast down +44-207-541-3233 by 1%. IKey changes Elsewhere, we note : Sales (FYE) 44,632 to j, -1.2% 44,113 EBIT margin 38.7 to 38.9 r 0.6% • Iron ore 59Mt was 4% below June-Otr as expected, no update on Samarco (FYE) Brazil resuming operations anytime soon. Net profit (FYE) 9,511.7 to j, -0.3% 9,479.1 • Copper 409kt below our estimates of 442kt with mining and development Source: Deutsche Bank work continuing despite the operational incidents at Olympic Dam and IPrice/price relative Spence. Surface operations remain suspended at Olympic Dam, are expected to resume end of October and with full capacity reached during November. The sale of Cerro Colorado in Chile (65kt copper sales last year) is expected to close end of December, simplifying Chilean copper operations to Escondida and Spence. Jan '17 Jul '17 Jen'18 Jul '18

• Conventional Petroleum, now the focus area flagged for reinvestment - BHP ALL ORDINARIES (Rebased) after the agreed shale sale, volumes were up 15% qtr on qtr (but flat year on year). Exploration budget unchanged at $750m for FY19 with six well Performance (%) 1m 3m 12m reported upon this quarter (one well operated by BHP was abandoned Absolute 6.5 2.5 25.8 after mechanical failure). We await any significant details from appraisal ALL ORDINARIES -3.7 -4.5 1.8 work in Gulf of Mexico (Samurai-2), Trinidad and Tobago, and Trion, the Source: Deutsche Bank I latter starting this Dec-Otr. IKey indicators (FY1) ROE(%) 18.3 ■ Cobalt production reported for the first time from Nickel West operation, ROA(%) 18,9 1,060t in FY18 and 249t this Sept-Otr. Net debt/equity (%) 16.2 Book value/share (USO) 9.81 We recently downgraded BHP to HOLD recognising that a large potential off­ Price/book (x) 2.6 market buyback is on offer in the coming months (i.e., "Harvest") but we see Net interest cover (x) 21.7 greater upside elsewhere in the sector. We think there will be much anticipation EBIT margin (%) 38 .9 ahead of the Strategy and Capital Allocation Investor update now scheduled for Source: Deutsche Bank I 21-Nov. Our base-case expectation for shareholder returns is a $1 0bn return of capital split among Ltd and Pie shares 60/40, respectively, with the overriding

Deutsche Bank AG/Sydney Distributed on: 17/10/2018 08:00:11 GMT Deutsche Bank does and seeks to do business with companies covered in its research reports. Thus, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. DISCLOSURES AND ANALYST CERTIFICATIONS ARE LOCATED IN APPENDIX 1. MCI (P) 091/04/2018. Provided for the exclusive use of Sreemalhy Ganes.:isubramanyam al DB Employee on 20'18-10-17T09:30+00 :00 DO NOT REDISTRIBUTE 17 October 2018 M&M - Diversified Resources BHP IZI point being not the exact form but the overall size of the capital return itself, anything significantly less than $10bn may disappoint the market, in our view.

Strategically BHP has made it clear conventional oil/gas assets are likely to see some level of reinvestment (West Barracouta in Australia , Atlantis 3 and Ruby projects in Gulf of Mexico are flagged for approvals). and we see some assets (Nickel, some oil/gas assets, and energy coal) as likely to receive less attention over the long term under BHP's "Competition for capital ". These assets generate -$4bn of annual EBITDA and hold less strategic importance to the simplified BHP. Our NPV of these assets is >$17bn (DBe) and at >4x EBITDA would have a stand­ alone EV of -$19bn, far above net book value near $5bn. The end of the capital preservation era could also be an opportunity to revisit executive -level change much like FMG (CEO) and Rio Tinto (CFO) have in recent months.

Key Catalysts :

■ November to March period: We are cautious on iron ore (-50% of BHP valuation) ahead of Chinese winter curtailment period and the potential negative impact this may have on prices;

■ By End-October: Shale sale confirmation of completion. BHP is due half the money upon completion with remainder due in monthly installments in following 6 months.

• On or By 21-November: Strategy and Capital Allocation Investor briefing - We would expect to hear by this time about the form of the guided shareholder returns ($10.5bn in shale proceeds), which could equate to 10% of the Ltd and Pie lines each. Given the form of payment (half upon completion and staggered thereafter), we would not be surprised to see off market Ltd buyback before end-December and Pie on market buyback through end of the financial year (end June-2019) but we emphasise the quantum rather than exact form should be the focus .

IFigure 1: BHP-RIO buy-back history

200 Aug-2018 (RIO): US$1.75bn on­ market buy-back completed; US$2.2bn lo be 160 bought back Nov-2007 (BHP): US$23bn oll­ market buy-back Aug -2010 (RIO): Feb-2018 (RIO) : US$9~2bn buy-back Apr-2015 (RIO): US$1.0bn buy-back 120 ' announced US$0.4bn off-market announced rbu y-back

- BHP share price (A$) - RIO share prloe (A$)

Source: Bloomberg LP, Company data

Page 2 Deutsche Bank AG/Sydney Provid e cl for Ifi e exc lusive use of Sre emathy Ganesns ubra111anyam at DB Employee on 20 18-10 -17T09 :30< 00:00 DO NOT REDISTf,IBUl E 17 October 2018 M&M - Diversified Resources BHP IZI IFigure 2: BHP buy-back scenario Units 2011 FY19scenario Asset sale proceeds net of tax USSbn 6.3 10.5 Portion of promised capital return for Ltd buyback % 100% 60% Potential buyback amount A$bn 6.0 8.8 AUD/USO exchange rate 0.95 0.72 Market price A$ 47.50 31.48 Buy-back discount (subject to ATO approval) % 14.0% 12.0% Buy-back price A$ 40.85 27.70 Scale back % 78.3% Likely high BHP Billiton Ltd shares bought back m 147.0 316.7 % of BHP Billtion Group issued capital % 2.7% 5.9% % OTBHP Billt ion lrd lSSUedcapiral % 4.4% 9.9% Capit al component AS 0.28 Additional capital component A$ 9.03 Fully franked dividend component A$ 40.57 Tax value A$ 49.88 Group EBITDA lost on US Shale divestment US$m 928 Group EBITDA lost on US Shale divestment % 3.8% On market Pie US$bn 4.2 On market Pie GBP 3.2 FX GBP:USD 1.31 Share price GBP 15.3 Shares potentially repurchased 208 .5 % of Pie shares 10% Total shares off and on market million 525 .2 Total shares off and on market % 10%

Source: Company data - 2011 Buy back . DB estimaros for FY19. PriCe as on 27-Sep-2018

Figure 3: Potential Divestiture Assets Figure 4: Potential Valuation Scenarios of BHP Energy Australia A~1•t1 llLltOAfViS'"l c,~,,11.>\Soml IU 'ilt Hll,'J nl'H IU OI (US$m) ~1WM .,. .,, \ S6 20,000 "•""WtW~ 1,600 1,3116 "' 60 \lllfC'lf

5,000

0 NPV EV (4x EBITDA) Book value ■ Nickel West ■ NSW Energy coal ■ Macedon, Pyrenees , Minerva and Algeria ■ North West Shelf • Bass strait

Source : Deutsche Bank est imates Sourco: Deutsche Bank estimates

Deutsche Bank AG/Sydney Page 3 Provided for the exclusive use of S,eemathy Gsnesasubramanyam at DB Employee on 2018-10-17T09:30+00:00 DO NOT REDISTRIBUTE 17 October 2018 M&M - Diversified Resources BHP IZ]

j Figure 5: BHP NPV valuation j Figure 6: NPV split by operations US$m USShh A$/•h 1,or1ore 73,287 15.06 20.36 Ba,e Metals (Copper) 24,116 4.96 6.70 Petroleum 18,536 3.81 5.15 Nickel West Me t Coal 20,457 4.20 5.68 (gross) Potash • Jansen (cape>evalue) 2,800 0.58 0.78 2% Energy Coal (NSW & Columbia) 7,393 1.52 2.05 Nickel West (gross) 2,561 0,53 0.71 Energy Coal S-nm~rco (1,800) (0.37) (0.50) (NSW& Columbia) Base Metals Group & Unallocated (921) (0.19) (0.26) (Copper) Provisions and rehab (8,200) fl.69) {2.28) 5% 16% Net !deb tl/ Qash {8,633) (1.771 (2.28) Potash - Jansen 129,595 TOTAl 26.64 36.12 (capex value) 2% Met Coal 14%

Source: Deutsche Bank estima tes Source: Deutsche Bank

IForecasts and ratios Year End Jun 30 2017A 2018A 2019E 2020E 2021E Sales (USDm) 38,285 43,638 44,113 44,843 44,137 EBITDA (USDm) 20,296 20,262 23,760 24,326 23,006 Net Profit (USDm) 6,732 8,933 9,479 9,944 9,022 EPS (USO) 1.26 1.67 1.94 2.13 2.03 OLD EPS (USO) 1.26 1.67 1.95 2.13 2.02 % Change 0.0% 0.0% -0.3% 0.2% 0.2% EPS Growth(%) 452.6 32.7 16.1 9.7 -5.0 PER (x) 14.0 13.3 12.5 11.4 11.9 PE Relative (x) EV/EBITDA (x) 6.0 6.B 5.6 5.5 5.9 DPS (net) (USD) 0.83 1.18 1.32 1.26 1.20 Yield (net) (%) 4.7 5.3 5.5 5.2 5.0 Franking (%) 100 100 100 100 100 Source: Deutsche Bank estimates, comp any dara

Page 4 Deutsche Bank AG/Sydney Prov1cleci fo1 tl 1e excl1Jsive use of Srnernalhy G8n esas ul:,r a rn ,rnyarn cit DB Empl oyee on 2018-10- 171'09:30 >00:00 DO NOT REDISTRIBUT E 17 October 2018 M&M - Diversified Resources BHP [Z]

IFigure 7: BHP financial summary lfX/COMMOD!TIESINom lnall FYl1A FV1aA P(18f Pi':iof Fh 1F FV:!2F IMorl;ot 0, 1.1 Ltd Pio Tot.II AUDUSD 0.76 0.78 0.73 0.73 0.73 0.73 Tlck"' OHPJ\X BlT.l Oil - Brent IUSS/bbD 61 64 78 76 71 70 ISl\ara ~•-=a11ocog 33.90 15.8!1 Od - WTI iUS$/bbl) 49 59 71 66 62 63 .sna,o Ql'rC

IW. EIIIAN!:JALMlillllCS INPV(HD18) US$M US$/eh A$/eh Underly(ng Eeminga IUS$M) 8,732 8,933 8,478 8,944 8,022 10,039 Iron ore 73,287 15.06 20.36 EPS (UScl 126 167 194 213 203 237 Base Metals (Copper) 24 ,116 4 ,96 6 70 EPS Change lo/ol 5 0 0 0 101 0 Petroleum 18,536 3,81 5. 15 DPS iUScl 83 118 132 126 120 140 Met Coal 20,457 4 20 568 Payout ratio (%1 BG% 70% 68% 59% 59% 59% Potash - Jansen (capex value) 2,800 0,58 0 78 ~ Energy Coal (NSW & Columbia) 7,393 1.52 2.05 Ope111tingCash Flow (US$M) 16,804 18,461 16,650 17,912 17,519 18,435 Nickel West (gross) 2,56 1 0,53 0.71 Capex and explora tion expendit ure (US$M) (5,220) 15,8021 (7,556) 17,859) 17.1071 15,997) Samarco -1,800 -0.37 -0,50 O 1her investing cash flows (incl , divestments) (US$M) 1,059 1119) 10,970 Group & Unallocat ed -921 -0.19 -0,26 FIN Caah Flow (US$M) - before dividends 12,643 12,640 20,084 10,063 10,411 12,439 Provisions and rehab -8,200 -1,69 -2,28 Dividend !US$M) 12.9211 15,220) 16,6181 16,5471 15.5391 15,544) Less: Net debt -8,633 -1.77 -2.28 Share Buybacks IUSSM) 110,7001 15,0001 15.0001 15,0001 TOTAL 128,686 26.64 38.12 FIN Caoh Flow IUSSM) • before debt 9,722 7,320 2,748 11,4941 (1281 1,784 Free Caah Flow yield(%) 9.8% 9.7% 17.0% 8,8% 9.7% 12.1% P/FCF 10 10 6 11 10 WACC lnomlnoD 9% Sh11raa 4,866M

!BALANCE SHEETANO RETURNS Nol Debt (US$MJ 16,321 10,934 8,833 10,886 11,368 10,106 !Veluetion 12018) Georing (ND/ND+E - %I 21% 16% 14% 17% 18% 18% ROEi%! 12% 16% 18% 21% 20% 23% Iron ore ROAi%) 12% 14% 18% 20% 19% 20% ◄ 9% ROCEI%) 10% 16% 17% 18% 17% 18%

PRODUCTION Copper llctr oonaolldated 1,328 1,763 1,873 1,768 1,761 1,888 Coppe r (kt)- equity 998 1,238 1,180 1,234 1,236 1,377 Iron ore (Mt) - Allribulable (incl Jimblebar) 228 234 237 256 259 279 E11ergyC~I Iron ore (Mt! - Pllbor, 1100%) 288 276 278 281 284 318 (NSW& Petroleum (Mmboe) - US Onshore 80 72 20 Columbia} Base Metals Petroleum (% Liquids) - US Onshore 43% 40% 37% 0% 0% 0% 5% (Copper) Petroleum !Mmboe) • Conventional 128 120 117 108 102 104 16% Petro!t<,m (Mm~) • Total 208 192 137 106 102 104 Potash • Jansen (capex Coal• HarcJcoking (Mt)· Attributable 39.8 42.6 44.5 46,5 48.1 49.1 value) Cool· Hard coking IMij - Old 1100%) 71.2 76.6 78.6 83.6 88.6 88.8 2% Met Coal Coal • Thermal (tylt) 29.6 29.2 28.5 28.4 28.4 284 Ii:!% N ickel tktl 85 93 90 87 87 87 Copper Eq Production IMI) 6.1 6.3 8.7 8.7 6.8 7.1 Chango(%) -7.0% 2.1% 8.8'll, 0.2'll, 1.8'll, 3.4%

CAPEX(US$M) I Grow1h cepex spilt (Z018Fl Growth Petroleum • US Onshore 575 Petroleum • Conventional 697 442 838 956 705 4BO Patrol"um 1,272 442 838 868 706 480 Copper 596 812 1,500 1,400 750 600 Iron Ore 800 1,000 I, too 250 Potash Coal 141 131 100 150 150 50 8% Potash 162 230 280 180 Total Growth C11pex 2,026 1,481 3,618 3,888 2,706 1,380 Copper SuetalnlngCepex 2,227 3,608 3,146 3,269 3,487 3,700 42% Petroleum - ConaolldatedCapex 4,262 4,978 6,884 8,846 6,192 6,080 Conventional Exploration 968 823 892 914 915 917 24% Total oapex Incl.E,rpla11tlon 6,220 6,802 7,666 7,868 7,107 6,987 Guidance (consolidated excluding slme from rrnd FY19) 6,900 <8,000 <8,000

IEBITDA (USSMI I EBITDA sp lit (2018F) Petroleum • US Onshore 1,004 Petroleum • Conventiona l 3,059 3,341 4.402 4,076 3,9 10 4,060 Petro\eum 4,063 3,341 4,~ 4,078 3,910 4,060 Copper 3,646 6,622 6,1161 8,976 8,911 7,366 Iron Ora e,on 8,930 7,783 8,092 7,863 8,831 Iron Ore Cool 3,784 4,397 6,140 4,474 3,821 3,633 33% G&A (corpo,ate, Nickel West, Potash) )1731 171 584 709 911 247 G&A (corporate, Nickel West, Tot.II 20,286 23,183 23,780 24,328 23,008 23,926 Potash! 2% EBITIUSSMI Petroleum • US Onshore 17771 Petro leum • Conventional 1,343 1,546 2,870 2,568 2,507 2,721 Petroleum 688 1,648 2,870 2,688 2,607 2,n1 Petroleum- Copper 2,008 4,389 3,874 4,880 4,541 4,968 Copper Conventional Iron Ora 7,187 7,186 8,008 8,348 6,904 8,786 25% 18% Cool 3,060 3,882 4,440 3,806 2,976 2,871 GM (corporate. Nickel West. Potash) 1430) 12501 1221 529 610 479 Total 12,389 18,682 17,170 17,840 18,637 17,924

Source : Deutsche Bank esrimares, Company data

Deutsche Bank AG/Sydney Page 5 P,ovided for the exclusive use of Sreem athy Ganesasubramanyam at DB Employee on 20 18-10- H T09:30 100:00 DO NOT RED ISTRIB UTE 17 October 2018 M&M - Diversified Resources BHP IZI 1Q FY19 production

Production summary and earnings changes

IFigure 8: BHP 1Q FY19 production summary Produ1;:tron ,.: Ch•og o fY19E (RHP stuiro un less otherwise 1Ull (:dl Units 1Ql8A 2QUA lQll!A 4(U 8A JQ.19[ JQl9A QoQ YoY vs DBe Previous n.. il

Source: Deutsche Bank estimates, Campany data

IFigure 9: BHP Earnings changes summary Metrics Unit FY19e FY20e FY21e Production WAIO(100%) (Mt) Revised 279 291 294 Previous 278 291 294 Delta 0.3% 0.0% 0.0% Copper (kt) Revised 1,673 1,759 1,751 Previous 1,729 1,759 1,751 Delta -3.3% 0.0% 0.0% Petroleum (Mmboe) Revised 117 108 102 Previous 116 109 103 Delta 0.1% -0.4% -0.5% Financial Underlying EBITDA (US$m) Revised 23,760 24,326 23,006 Previous 24,025 24,301 22,981 Delta -1.1% 0.1% 0.1% Underlying EBIT (US$m) Revised 17,170 17,940 16,537 Previous 17,262 17,907 16,505 Delta -0.5% 0.2% 0.2% Underlying NPAT (US$m) Revised 9,479 9,944 9,022 Previous 9,512 9,925 9,003 Delta -0.3% 0.2% 0.2% Capex (excl. exploration) (US$m) Revised 6,664 6,945 6,192 Previous 6,640 6,950 6,197 Delta 0.4% -0.1% -0.1% FCF (US$m) Revised 20,064 10,053 10,411 Previous 20,295 10,029 10,392 Delta -1.1% 0.2% 0.2% DPS (US$/sh) Revised 1.32 1.26 1.20 Previous 1.33 1.26 1.20 Delta -0.3% 0.2% 0.2% EPS (US$/sh) Revised 1.94 2.13 2.03 Previous 1.95 2.13 2.02 Delta -0.3% 0.2% 0.2%

Source: Deutsche Bank esrimates

Page 6 Deutsche Bank AG/Sydney Provided fo, the exclusive use of Sreernathy Gc1nesasubramanyam al DB Employee on 2018-10-17T09:30+00:00 DO f"OT REDISTRIBUTE 17 October 2018 M&M - Diversified Resources BHP IZI Model updated: 17 October 2018 Fiscal year end 30-Jun 2016 2017 2018 2019E 2020E 2021E j Running the numbers IFinancial Summary Australasia DB EPS (USD) 0.23 1.26 1.67 1.94 2.13 2.03 Reported EPS (USD) -1.20 1.10 0.69 1.94 2.13 2.03 Australia DPS (USD) 0.30 0.83 1.18 1.32 1.26 1.20 M&M - Diversified Resources BVPS (USD) 10.20 10.76 10.44 9.81 9.92 10.05 IValuation Metrics Price/Sales (x) 2.5 2.5 2,7 2.7 2.6 2.7 Reuters: BHP.AX Bloomberg: BHP AU P/E (DB) (x) 64.8 14.0 13.3 12.5 11.4 11.9 P/E (Reported) (x) nm 16.0 32.1 12.5 11.4 11.9 P/BV(x) 1.3 1.6 2.5 2.6 2.5 2.5

! Hold FCF yield (%) 5.0 14.0 11.4 8.7 9.7 10.5 Dividend yield(%) 2.0 4.7 5.3 5.5 5.2 5,0 Price (16 Oct 18) AUD 33.90 EV/Sales 3.6 3.2 3.2 3,0 3,0 3,1 Target Price AUD 36.00 EV/EBITDA 8.9 6.0 6,8 5.6 5.5 5,9 EV/EBIT 31.7 9.7 10.1 7.7 7.4 8,2 52 Week range AUD 26.49 - 35.50 [ income Statement (USDm) Market cap (m) AUDm 164,936 USDm 117,715 Sales 30,912 38,285 43,638 44,113 44,843 44,137 EBITDA 12,340 20,296 20,262 23,760 24,326 23,006 EBIT 3,469 12,389 13,641 17,170 17,940 16,537 ICompany Profile Pre.tax profit -7,259 10,322 11,830 16,379 17,290 15,902 BHP Billiton Limited is an international resources company , The Net income -6,385 5,890 3,705 9,479 9,944 9,022 company's principal business lines are mineral and petroleum production, including coal (thermal and coking), iron ore, [ Cash Flow (USDm) copper, and oil & gas (conventional and unconventional, LNG). Cash now from operations 10,625 16,804 18,461 16,650 17,912 17,519 Net Capex -6,673 -3,607 -4,890 -6,394 -6,945 -6,192 Free cash flow 3,952 13,197 13,571 10,256 10,967 11,327 Equity raised/(bought back) 0 0 0 -10,700 -5,000 -5,000 Dividends paid -4,130 -2,921 -5,220 -6,618 -6,547 -5,539 IPrice Performance Net inc/(dec) in borrowings 4,451 -5,543 -3,660 -2,173 -4,460 -2,000 40 Other investing/financing cash flows -372 -543 -2,740 10,255 -538 -563 Net cash flow 3,664 3,510 1,649 128 -6,492 -2,691 Change in working capital -207 352 118 299 176 -291

j Balance Sheet (USDm) Cash and cash equivalents 10,319 14,153 15,871 15,999 9,507 6,816 ~ 1¢!·-~~~Jan '17 Jul '17 Jan '18 Jul ' 18 -Property, plant and equipment 83,975 80,497 67,182 56,285 56,844 56,568 Goodwill 2,480 2,389 468 749 1,031 1,312 - BHP ALL ORDINARIES (Rebased) Other assets 22,179 19,967 28,472 28,505 2B,565 28,287 Total assets 118,953 117,006 111,993 101,539 95,947 92,983 Debi 36,421 30,474 26,805 24,632 20,172 18,172 Other liabilities 22.461 23,806 24,518 23,516 23,363 23,290 Total liabilities 58,882 54,280 51,323 48,148 43,535 41,462 -4 Total shareholders' equity 60,071 62,726 60,670 53,391 52,412 51,521 Net debt 26,102 16,321 10,934 8,633 10,665 11,356

j Key Company Metrics 20E 21E Sales growth (%) -30.7 23.9 14.0 1.1 1.7 -1.6 DB EPS growth (%) -82.9 452 .6 32.7 16.1 9.7 -5.0 EBITDA Margin .,._ EBIT Margin Payout ratio(%) nm 75,0 169.5 67,9 59.1 59.1 Growth & Profitibil ity I EBITDA Margin (%) 39,9 53,0 46.4 53.9 54.2 52.1 EBIT Margin (%) 11.2 32.4 31.3 38,9 40.0 37.5 ROE(%) 2.0 12.1 15.8 18.3 21.2 19.9 Net debVequity (%) 43.5 26.0 18.0 16.2 20.3 22.0 lWJ¾td~1- 1rNet interest cover (x) 3.4 8.7 11.0 21.7 27.6 26.0 16 17 18 19E 20E 21E IDuPont Analysis Sales growth (LHS) + ROE (RHS) EBIT margin(%) 11.2 32.4 31.3 38,9 40.0 37.5 x Asset turnover (x) 0.3 0.3 0.4 0.4 0.5 0.5 ISolvency x Financial cost ratio (x) 0.7 0.9 0.9 1.0 1.0 1.0 x Tax and other effects (x) -2.6 0.5 0.3 0.6 0,6 0.6 = ROA (post tax) (%) -5.2 5.0 3.2 8.9 10,1 9.6 x Financial leverage (x) 2.0 2.1 2.0 2.1 2.1 2.1 = ROE(%) -10.7 10.6 6.6 18.3 21.2 19.9 annual growth (%) na na -37.8 179.4 15.5 -6.2 x NT A/share (avg) (x) 11,2 10.5 10.6 10.6 10.1 10.2 = Reported EPS -1,20 1.10 0,69 1,94 2.13 2.03 ~tk16 17 lttl18 19E 20E -21E t:annual growth (%) na na -37.1 179.8 9.7 -5.0 Net debt/equity (LHS) ... Net interest cover (RHS) Source: Company data, Deutsche Bank estimates James Gurry +6139270-4104 [email protected]

Deutsche Bank AG/Sydney Page 7 Provided for the exclusive use of Srnemal hy Ganesasubramanyam at DB Employee on 2018-10-17T09:30+00:00 DO NOT RED ISTRIBUTE 17 October 2018 M&M - Diversified Resources BHP IZI Investment Thesis

Outlook

The long-term BHP Billiton story is (as we define it): 1. Production , earnings and cash flow growth from their low cost mining and oil projects through further cost out, efficiency gains , automation, and brownfields expansions, 2. Continued portfolio simplification by selling non-core assets (US Onshore, possibly small met coal, thermal coal, small copper), and selling down assets (possibly Jansen), and 3. Growing by approving more high returning projects (Spence, Olympic Dam UG expansion, met coal creep) and adding more projects to the portfolio. The company's capital allocation strategy remains: 1. Balance sheet management (maintaining the A credit rating), 2. Paying out 50% of underlying earnings through the cycle. 3. Investing counter-cyclically by reducing debt , organic growth , M&A, buy-backs, special dividends etc. BHP Billiton's assets are mostly long life, low operating cost , and in low to moderate risk countries (Australia, North America, Brazil, Chile) and overall are considered prem ium quality relative to the minerals sector , offering above average returns and operating margins. We rate BHP HOLD on valuation.

Valuation

We value BHP Billiton using life-of-mine cash flows with a nominal WACC of 9%. Our price target is set broadly in line with our NPV, which assumes a long­ term AUD/USO of 0.75.

Risks

The key upside risks include higher commodity prices, weaker FX and better cost out than what we currently forecast. Downside risks include weaker commodity prices, stronger FX, capex and opex inflation, higher than expected cost of litigation associated with Samarco, and potential production outages due to industrial action at Escondida .

Page 8 Deutsche Bank AG/Sydney