The Mississippi Valley Trade & Transport Council

BHP announces US$10.4 bn shareholder return programme

(Posted on 01/11/18)

BHP plans to return US$10.4 billion to its shareholders through the combination of an off-market buy-back and a special dividend.

The programme will commence immediately with BHP targeting an off-market buy-back of US$5.2 billion (A$7.3 billion)(1) of BHP Billiton Limited shares (Off-Market Buy-Back) under which BHP Billiton Limited can buy back shares at up to a 14% discount. BHP intends to pay the balance of the net proceeds from the sale of its Onshore US assets (expected to be US$5.2 billion) to all shareholders in the form of a special dividend (Special Dividend) to be determined following completion of the Off-Market Buy-Back, and to be payable in January 2019.

BHP is a world-leading resources company, which extract and process minerals, oil and gas, with more than 62,000 employees and contractors, primarily in Australia and the Americas.

BHP Chief Executive Officer, Andrew Mackenzie, said "We made a commitment that all the net proceeds from the disposal of our Onshore US assets would be returned to shareholders and we are honouring that commitment now that the sale transactions have been completed. Returning this US$10.4 billion will bring the total cash returned to shareholders to US$21 billion over the last two years.”

BHP Chairman, Ken MacKenzie, said “Consistent with our Capital Allocation Framework, the Board has carefully considered how best to return the net proceeds to our shareholders. We believe that the off-market buy-back and special dividend program announced today will return significant value to all our shareholders, allowing the entire BHP global shareholder base to participate, both directly and indirectly, in the shareholder return program.”

All shareholders are expected to benefit from the Off-Market Buy-Back as (i) for some BHP Billiton Limited shareholders, depending on their tax status, the after-tax return from participating in the Off-Market Buy-Back may be greater than the return from the sale of their shares on-market; (ii) the Off-Market Buy-Back is expected to improve return on equity, cash flow per share and earnings per share for all shareholders who continue to hold shares in BHP; and (iii) the Off-Market Buy-Back is an efficient means of returning capital to shareholders, including as a result of the discount of up to 14 per cent available to BHP Billiton Limited under the Off-Market Buy-Back.

BHP will target an Off-Market Buy-Back of US$5.2 billion (A$7.3 billion)(1) of BHP Billiton Limited shares. BHP Billiton Limited may, at its discretion, vary the size of the Off-Market Buy-Back, subject to certain legal restrictions. BHP Billiton Limited expects to announce the results of the Off-Market Buy-Back on Monday 17 December 2018.

Following completion of the Off-Market Buy-Back, BHP intends to determine the Special Dividend on Monday 17 December 2018, with the per share dividend amount to be calculated by reference to the reduced number of shares on issue following completion of the Off-Market Buy-Back. The Special Dividend will be fully franked and, according to the indicative timetable included in this announcement, paid on Wednesday 30 January 2019, with a dividend ex-entitlement date of Thursday 10 January 2019 on the Australian Securities Exchange, London Stock Exchange and New York Stock Exchange, and Wednesday 9 January 2019 on the Johannesburg Stock Exchange.

The dates for the Off-Market Buy-Back and the intended Special Dividend are set out in the indicative timetable included in this announcement. While BHP does not anticipate any changes to the times and dates set out in the indicative timetable, it reserves the right to vary them without notification.