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  "documentTitle": "Phillips 66 (PSX)",
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      "text": "LACK OF REFINING EXPERIENCE",
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      "text": "Our discussions with industry experts suggest Phillips needs to dramatically improve its commercial function and reduce refining costs to achieve best-in-class operating results",
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      "text": "Trading organization viewed as “unsophisticated” relative to experience with other leading refiners\n“Price-taker” approach vs. profit-center approach to crude procurement\nTraders not compensated appropriately to drive entrepreneurial thinking, leading to talent flight",
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      "text": "Corporate leadership does not have the requisite refining background\nThe Company relies on management consulting firms to improve operations. Industry experts have suggested that external consulting firms are leading the Phillips turnaround",
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      "text": "Cost savings targets set against artificially high baselines allow for gaming success yet never deliver results to the bottom line\nExtraneous overhead in the back and middle office and research departments creates unnecessarily high costs\nComplex structure has led to elevated opex and capex spending, as well as disparate IT systems across regions",
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      "text": "1) Baseline year of 2022 had elevated opex due to high natural gas prices. We estimate 65% of claimed opex reductions were driven by natural gas price reductions rather than fundamentally lower costs. See 'Impact of Natural Gas Prices on PSX Opex/bbl Declines' calculation on slide 49 in the appendix.",
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      "text": "LAGGING PROFITABILITY IS A SYMPTOM OF MANAGEMENT DYSFUNCTION",
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