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  "documentTitle": "Phillips 66 (PSX)",
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  "presentationDate": "2025-04-28 00:00:00",
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  "notes": "Uses a contrast-pair framework to dismantle the company's argument.",
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      "text": "ELLIOTT HAS WORKED WITH A TOP ACCOUNTING FIRM WHICH HAS PERFORMED AN OUTSIDE-IN ANALYSIS TO CONFIRM THAT NONE OF THESE ARE TRUE.",
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      "text": "WE INVITE THE COMPANY TO SHARE ITS TAX WORK WITH ALL SHAREHOLDERS. THE COMPANY’S TAX BASIS IS NOT COMMERCIALLY SENSITIVE OR MNPI.",
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      "text": "OR: Phillips is not prioritizing shareholder interests:",
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      "text": "For this to be true, you need to believe the following:",
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      "text": "The tax basis of the non-DCP or PSXP assets (which are the minority of midstream assets) has >$15bn of negative basis as to outweigh the >$15bn of liabilities associated with the midstream business",
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      "text": "Avoiding focusing on a tax-free spin as a valid option, if remarkably tax leakage proves substantial",
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      "text": "Despite claiming they have actively evaluated a sale of midstream, Phillips 66 has not performed a reasonable tax analysis for the transaction because they never seriously considered it",
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      "text": "Despite having >$15bn of estimated liabilities at the midstream entity including PSXP and DCP debt, working capital and other liabilities, there is minimal tax basis attributed to the liabilities",
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      "text": "Despite Phillips 66 publicly confirming that the acquisitions of DCP (2023) and PSXP (2022) were taxable transactions, thereby stepping up the basis of the majority of midstream assets, these assets have minimal tax basis today",
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      "text": "The Company has performed the tax analysis, but is hiding the result from shareholders as it does not support their narrative",
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      "text": "Phillips 66 has claimed that in a 50bn T EV midstream sale, “tax leakage costs could be as high as 10 billion.”(1) This would require that there is little tax basis in the $50bn asset. This is highly unlikely if not impossible.",
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      "text": "Our in-depth work, confirmed by multiple accounting experts, has shown that the taxes for a potential sale are likely to be materially lower than $10bn. Phillips 66 could also separate its midstream business via a tax-free spin.",
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      "text": "Phillips 66 has claimed that in a 50bn T EV midstream sale, “tax leakage costs could be as high as 10 billion.”(1) — Phillips 66",
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      "text": "(1) Phillips 66 Letter to Shareholders, 4/8/25.",
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      "text": "CLAIM: MIDSTREAM SALE COULD RESULT IN LEAKAGE UP TO $10BN REALITY: LEAKAGE IS OVERSTATED; TAX-FREE SPIN ON THE TABLE",
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