March 6,1992 Version 3.0 Mobil AEM P&L Review Lessons From Other Companies

© 1992 Gemini Consulting. Reproduction with Express Permission Only. 10/10/2015 – 18:29 – 2 P&L Review Agenda Context Companies visited -Frito-Lay -Amoco Other companies -Motorola -Dow Chemical -Phillips -Chevron Conclusions

© 1992 Gemini Consulting. Reproduction with Express Permission Only. 10/10/2015 – 18:29 – 3 P&L Review Context Comparison of Mobil's P&L process to other companies was generally beyond the scope of this project However, readily available information and visits to two companies revealed the following:

© 1992 Gemini Consulting. Reproduction with Express Permission Only. 10/10/2015 – 18:29 – 4 P&L Review Frito-Lay Frito-Lay (visited): Frito-Lay, a unit of Pepsico, is considered to be a “best practices” company with respect to P&L Processes and Reports. They have a highly automated P&L process which can identify 400,000 separate P&L results on a monthly basis and cut by any combination of product, region and sales channel. The process is supported by: -A highly centralized accounting / financial analysis structure (700 people total, very few in the field). -Field input from PC's at plants and hand-held computers in delivery trucks. The employee no mini- computer in the system.

© 1992 Gemini Consulting. Reproduction with Express Permission Only. 10/10/2015 – 18:29 – 5 P&L Review Frito-Lay (cont.) -A detailed, but stable, allocations / system transfer price which does not appear to be overly troubled by internal renegotiation. -A corporate culture which focuses the P&L on future trends and on competitive factors (market share / pricing), rather than detailed analysis versus plans and prior periods. -Highly developed computer systems providing access to P&L information to all levels of management.

© 1992 Gemini Consulting. Reproduction with Express Permission Only. 10/10/2015 – 18:29 – 6 P&L Review Amoco Amoco (visited): W. Robb to provide after visit on 3/11/92

© 1992 Gemini Consulting. Reproduction with Express Permission Only. 10/10/2015 – 18:29 – 7 P&L Review Motorola Motorola (visited): Currently on a 4-5 day close schedule (previously 12 days) by fifth day — management summary reports, P&L, cash flow balance sheet and ratios provided Goal is a two day P&L close -No longer burdensome process -Reducing cycle time and simplifying processes reduced errors -Layers removed, simultaneous transmission -Fewer levels of review Shifted from P&L forecasts to key indicator forecasts

© 1992 Gemini Consulting. Reproduction with Express Permission Only. 10/10/2015 – 18:29 – 8 P&L Review Dow Chemical Dow Chemical Company: Determined that better decisions were not being made as a result of monthly information being collected from and reported to entire organization Data available to those who need it in their decision-making role Corporate quarterly report adopted Goal is to reduce bureaucracy as well as costs Adopted 1984

© 1992 Gemini Consulting. Reproduction with Express Permission Only. 10/10/2015 – 18:29 – 9 P&L Review Phillips, Chevron Other Comments: Phillips closes their books monthly. Final estimate for the month provided by the fourth work day. Actual results by end of second week. Chevron estimates monthly results at mid-month and updates weekly until closing.

© 1992 Gemini Consulting. Reproduction with Express Permission Only. 10/10/2015 – 18:29 – 10 P&L Review Conclusions Mobil's P&L Process appears to be consistent with other oil companies Best Practices companies in other industries have taken significant steps to simplify, streamline and accelerate the P&L Process