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  "notes": "Uses quotes from management to expose a gap between historical performance and current excuses.",
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      "text": "In an effort to avoid admitting a large miss, management has recently started stating that \"to get to its mid-cycle EBITDA PSX needs adjusted gross margin of $14.50/bbl,\"(1) a level that even VLO (best-in-class operator) is not expected to achieve",
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      "text": "Phillips & Valero Refining Gross Margin per Barrel ($/bbl)",
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      "text": "Management is citing the crack environment for the shortfall in forward estimates, despite consensus estimates for 2026 assuming the same 2012-2019 average Phillips used for original mid-cycle goals",
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      "text": "Q: ...[W]hen you look at the differences... between Wall Street and that $14 billion, where do you think the biggest delta still are? Is it chems? Is it refining? A: The biggest delta is in refining and well below mid-cycle refining environments baked into the '25, '26 outlook...",
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      "text": "...[We] designed our mid-cycle methodology around the 2012 to 2019 time frame. You had cycles of strong margins and weak margins during that period of time.",
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      "text": "\"[We] designed our mid-cycle methodology around the 2012 to 2019 time frame. You had cycles of strong margins and weak margins during that period of time.\" — Phillips 66 IR, March 14, 2024; \"Q: ...[W]hen you look at the differences... between Wall Street and that $14 billion, where do you think the biggest delta still are? Is it chems? Is it refining? A: The biggest delta is in refining and well below mid-cycle refining environments baked into the '25, '26 outlook...\" — Mark Lashier, January 7, 2025",
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      "text": "Source: Bloomberg. Note: See appendix for definitions. 1) As reported in UBS's December 16, 2024 research note...",
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      "text": "...FALSELY BLAMING THE SHORTFALL ON THE MARKET ENVIRONMENT",
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