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March 6,1992 Version 3.0

Mobil AEM P&L Review Lessons From Other Companies. March 6,1992 Version 3.0. Context Companies visited Frito-Lay Amoco Other companies Motorola Dow Chemical Phillips Chevron Conclusions. Agenda.

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March 6,1992 Version 3.0

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

  2. Context Companies visited Frito-Lay Amoco Other companies Motorola Dow Chemical Phillips Chevron Conclusions Agenda

  3. 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: Context

  4. 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. Frito-Lay

  5. 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. Frito-Lay (cont.)

  6. Amoco (visited): W. Robb to provide after visit on 3/11/92 Amoco

  7. 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 Motorola

  8. 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 Dow Chemical

  9. 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. Phillips, Chevron

  10. 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

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