{ "docId": "019dd923-622b-71dc-a6d8-caf7ba55853c", "docSlug": "de33cb3292ec", "documentTitle": "Phillips 66 (PSX)", "authorId": "02_Elliott_Management", "authorName": "John Pike", "documentKindSlug": "activist-deck", "documentKindLabel": "Activist deck", "sourceTypeSlug": "activist_investor", "sourceTypeLabel": "Activist investor", "presentationDate": "2025-02-11 00:00:00", "orientation": "portrait", "aspectRatio": 0.77272725, "pageNumber": 3, "pageCount": 105, "prevPage": 2, "nextPage": 4, "slideType": "demand_list", "function": "state_demand", "density": "overcrowded", "nDataPoints": 4, "notes": "This is a text-heavy slide serving as a formal letter introduction.", "elementsJson": [ "paragraph", "footnote" ], "metadataConfidence": 1, "imagePath": null, "slideHref": "/slides/019dd923-622b-71dc-a6d8-caf7ba55853c/3", "deckHref": "/decks/019dd923-622b-71dc-a6d8-caf7ba55853c", "deckJsonHref": "/decks/019dd923-622b-71dc-a6d8-caf7ba55853c.json", "deckAnchorHref": "/decks/019dd923-622b-71dc-a6d8-caf7ba55853c#slide-3", "components": [ { "bbox": { "h": 0.12, "w": 0.3, "x": 0.14, "y": 0.19 }, "kind": "paragraph", "text": "The full text of the letter follows: February 11, 2025 The Board of Directors Phillips 66 2331 CityWest Boulevard Houston, TX 77042 Dear Members of the Board:", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "31e8ad91-72be-482f-b034-294f2b107f65", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.02, "w": 0.45, "x": 0.14, "y": 0.15 }, "kind": "paragraph", "text": "The letter and presentation can be downloaded at Streamline66.com.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "64ee74e0-0a51-466f-8c40-1b20c959c1ac", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.05, "w": 0.72, "x": 0.14, "y": 0.64 }, "kind": "paragraph", "text": "The 2023 publication of these views put a spotlight on the significant opportunity present at Phillips and initially sparked market optimism for a long-overdue turnaround at the Company. Unfortunately for investors, patience has been punished.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "6a948369-c85c-4d44-8a53-f743ca025c7d", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.12, "w": 0.72, "x": 0.14, "y": 0.7 }, "kind": "paragraph", "text": "As detailed in the enclosed presentation, available at Streamline66.com, Phillips has failed to make meaningful progress on its targets. It abandoned serious collaboration on Board and corporate governance improvements by failing to honor its commitment to add a second director and reverting to a combined CEO-Chairman role. And despite possessing valuable assets and a clear, achievable path to realizing their full potential, Phillips’ total shareholder return has continued to disappoint, lagging well behind peers. Over the past decade, Phillips has underperformed Valero by 138% and Marathon by 188%.²", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "8368a93b-9f1b-4c35-beef-a367a8dfc6c5", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.06, "w": 0.72, "x": 0.14, "y": 0.33 }, "kind": "paragraph", "text": "We are writing to you on behalf of funds managed by Elliott Investment Management L.P. (together with such funds, “Elliott” or “we”). We have an investment of more than $2.5 billion in Phillips 66 (the “Company” or “Phillips”), making us one of your top five investors.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "a9f43cae-3f17-473a-a612-3d2690496ad7", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.22, "w": 0.72, "x": 0.14, "y": 0.41 }, "kind": "paragraph", "text": "As you know, this is not the first time we have publicly shared our views on Phillips’ opportunities and challenges. In November of 2023, we published a letter to the Board noting the Company’s ambitious targets in the areas of operational improvement, portfolio-rationalization and improved capital return to shareholders. To repair Phillips’ damaged credibility with investors and ensure the right oversight and accountability, we called for collaboration on the addition of two new directors with refining-operation experience. And if Phillips failed to show material progress, we suggested an alternative path similar to the one taken by Marathon Petroleum (“Marathon”) following our engagement there in 2019. In that situation, board and management enhancements led to operational improvement, portfolio-rationalization and significant long-term share-price outperformance. Since our engagement, Marathon’s total shareholder return has outperformed Valero Energy Corp. (“Valero”) by 120% and Phillips by 178%.¹", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "e5948336-9f2e-400c-82e7-db32ef956f24", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.04, "w": 0.5, "x": 0.14, "y": 0.84 }, "kind": "source-note", "text": "¹ Bloomberg, from 9/24/2019 (the day prior to Elliott’s public presentation) to 2/7/2025\n² Bloomberg, as of 2/7/2025", "attrs": { "numbered": true }, "subkind": null, "toolName": null, "toolSlug": null, "confidence": null, "componentId": "3e465882-59a0-4327-8a9a-227f493ab254", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.04, "w": 0.72, "x": 0.14, "y": 0.09 }, "kind": "title", "text": "3) Enhanced Oversight – New independent directors are needed to bolster accountability and oversee a comprehensive review of the executive leadership team.", "attrs": null, "subkind": "headline", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "112945c5-adb9-4cbf-841c-b6bc6b6ec0a1", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [], "frameworks": [], "arcBeats": [], "loops": [], "imagePathAlt": null, "thumbSrc": null, "thumbSrcAlt": null, "locked": true }