Furnaces & Boilers Government Regulatory Impact Model

NAVIGANT CONSULTING, INC.

1801 K Street NW, Suite 500

Washington DC

20006 September, 2007

DRAFT Residential Furnace and Boiler Rulemaking

Because software is inherently complex and may not

be completely free of errors, you are advised to verify

your work. In no event will Navigant Consulting be liable

for direct, indirect, special, incidental, or

consequential damages arising out of the use of

or inability to use the software or documentation,

even if advised of the possibility of such damages.
atory Impact Model

September, 2007
Welcome to the Government Regulatory Impact Model (GRIM) for 

Residential Furnaces and Boilers

User Instructions

2. Pink cells designate input information. Green cells designate intermediate calculations.

3. By clicking on sheet names in column B of the "Index" sheet, the workbook can be quickly navigated.

4. Use the "Major Assumptions" sheet to choose the desired scenario. Cells C3 to C8 let the user select key scena

5. After selecting the desired scenario, go to the blue-tabbed sheet entitled "Summary Report." 

 Rows 16-18 summarize the impact on Industry Net Present Value (INPV).

1. The red-tabbed sheets pertain to overview information. The pink-tabbed sheets refer to input information. The g

 The blue-tabbed sheets contain numerical and graphical output.

6. Other blue-tabbed sheets provide graphical information summarizing the scenario. Note, on some computers, 

opened before the graphical information will completely update.
quickly navigated.

 let the user select key scenario assumptions

er to input information. The green-tabbed sheets represent calculations. 

Note, on some computers, the workbook may need to be closed and re-
Sheet/Area

Cover

Index

Glossary

Calculation Flow (INPV)

Major Assumptions

Product Costs

NWGF Ship

WGF Ship

MHF Ship

OF Ship

GB Ship

OB Ship

Conversion Cost Timing

Base Revenue & Costs

Standard Revenue & Costs

Base Case

Standard Case

Output Summary Report

Graph - Shipments

Graph - Revenue by Year

Graph - ROIC

Graph - Profits

Graph - Investments

Graph - Operating Cash Flow

Graph - Net Cash Flow

Graph - Industry Value (NPV)

Graph - Income After Tax

Graph - Average Unit Price

Data for Graphs

Calculations

Navigation

Input
Description

Nameplate

Links to Sheets

Manufacturer Impact Analysis Glossary

Description of the industry net present value (NPV) calculation method

Scenario selection, all major assumptions, including conversion costs

Detailed product cost assumptions

Non-weatherized Gas Furnace shipment forecasts

Weatherized Gas Furnace shipment forecasts

Manufactured Home Furnace shipment forecasts

Oil Furnace shipment forecasts

Gas Boiler shipment forecasts

Oil Boiler shipment forecasts

Table showing how fast conversion costs are incurred

Revenues and costs, for the Base case

Revenues and costs, for the Standards case

Calculation of cash flow, for the Base case

Calculation of cash flow, for the Standards case

Summary of results

Shipments by year

Total Revenue by year

Return on Invested Capital by year

Profit Before Tax by year

Capital expenditure by year

Operating Cash Flow by year

Cash Flow by year

Total Net Present Value of the Industry (Base vs. Standard cases)

Income After Tax by year

Unit price by year

Underlying data for graphs.
Advanced Notice of Proposed Rulemaking 

(ANOPR)

Annual Compliance Costs

Base Case

Beta

Capital Asset Pricing Model (CAPM)

Capital Expenditures

Conversion Capital Expenditures

Conversion Costs

Cost of Debt, Kd

Cost of Equity, Ke

Cost of Goods Sold (COGS)

Depreciation

Direct Labor Cost

Direct Material Cost

Earnings Before Interest and Taxes (EBIT)

EPACT

Free Cash Flow

Full Cost of Product

Full Production Cost

Governmental Regulatory Impact Model (GRIM)

(Income) Tax Rate

Manufacturer Impact Analysis (MIA)

Net Operating Profit After Taxes (NOPAT)

Net Present Value (NPV), or Industry NPV

(Net) Working Capital (NWC)

Non-Production Cost Markup

Notice of Proposed Rulemaking (NOPR)

Overhead (factory overhead)

Product Conversion Expenses
Product Mix

Property, Plant, & Equipment, net (PPE, net)

Return on Invested Capital (ROIC)

Return on Sales

Revenue

Risk Premium

Riskless Rate

Selling, General, and Administrative Expenses 

(SG&A)

Shipment Model

Standard Case

Techical Support Document (TSD)

Trial Standard Level (TSL)

Weighted Average Cost of Capital (WACC)
Federal Register notice detailing preliminary analyses conducted by the DOE to establish the economic feasibility

of increased minimum efficiency standards.

Ongoing annual costs required to comply with an appliance efficiency standard. These are incurred on and after 

the standard effective date, typically as a result of testing requirements. 

The "no standard" case. The industry valuation is conducted assuming that an appliance energy efficiency

standard is not implemented.

The covariance of a stock in relation to the rest of the stock market. If B>1, the stock is more volatile than the 

rest of the stockmarket. If B<1, the stock is less volative than the rest of the stockmarket.

A standard financial model expressing the relationship between expected risk and expected return. The return on 

an asset equals the riskless rate plus a risk premium.

Outlay of money to acquire or improve capital assets such as plant, property, and equipment.

One-time investments in plant, property, and equipment; resulting from an appliance energy efficiency standard's 

implementation.

Conversion costs include Product Conversion Expenses and Capital Conversion Costs. 

The average interest rate a company is paying on all of its debt.

The required return of a company's stockholders.

The cost of buying raw materials and producing finished goods. COGS includes materials, labor, and overhead, 

where part of overhead is depreciation.

Amortization of fixed assets (such as PPE), so as to allocate the cost over their depreciable life. Depreciation 

does not reduce free cash flow, but it does reduce taxable income.

The portion of COGS that includes direct labor, commissions, dismissal pay, bonuses, vacation, sick leave, social 

security contributions, fringe, and assembly labor up-time.

The portion of COGS that includes direct materials and scrap.

Revenue less COGS and SG&A expenses (including R&D, product conversion expenses, and annual compliance 

costs). 

Energy Policy Act (of 1992).

Cash available after operations and investments.

The result of applying the Non-Production Cost markup to the Full Production Cost. The full Cost of Product is 

the same as the Manufacturer Selling Price.

Includes direct labor, direct material, and (factory) overhead (including depreciation). This includes the same cost 

categories that comprise Cost of Goods Sold in the discounted cash flow analysis.

The industry cash flow model used by the US Department of Energy to assess impacts on manufacturers due to 

proposed appliance efficiency standards.

The effective tax rate assessed on a company's earnings before taxes (EBT).

The analysis of potential impacts on manufacturers resulting from various Trial Standard Levels (TSLs). The MIA 

will influence the appliance energy efficiency standards that are proposed in the NOPR. The MIA will be 

published in the TSD that accompanies the NOPR.

EBIT less taxes.

The discounted sum of industry free cash flows plus a discounted terminal value.

Current assets less current liabilities. The change in working capital is the difference in required working capital 

between a given year and the previous year.

The markup that converts Full Production Cost to a Full Cost of Product (i.e, Manufacturer Selling Price). The 

Non-Production Cost markup includes SG&A, R&D, interest, and profit.

Federal Register notice detailing analyses conducted by the DOE to establish proposed appliance energy

efficiency standards. The GRIM and associated Manufacturer Impact Analysis (MIA) will be incorporated in the 

NOPR and the NOPR TSD.

The portion of COGS that includes indirect labor, indirect material, energy use, maintenance, depreciation, 

property taxes, and insurance related to assets.

Conversion expenses incurred prior to the appliance efficiency standard's effective date including R&D, 

engineering design costs, marketing, and preparation for testing.

GLOSSARY
The mix of product efficiencies sold by a company or industry.

PPE is fixed assets, or long-lived assets, including building, machinery, and equipment. PPE, net is PPE less 

accumulated depreciation.

ROIC is equal to NOPAT / (PPE, net + NWC). When ROIC is greater than WACC, a company or industry is 

creating value.

Return on Sales is equal to EBIT / revenue.

Net sales.

The difference between the total return and the riskless return from a risky investment. In the CAPM, the market 

risk premium reflects systematic risk as measured by Beta (as opposed to idiosynchratic risk). For GRIM, the 

market risk premium is assumed to be 9.2% (nominal).

Assumed to be the historical average yield on 10-year treasuries.

A major component of the manufacturer selling price, accounted for in the GRIM as part of the Non-Production 

Cost markup. 

A sub-model used in the National Impact Analysis that provides base case and standard case shipment 

projections.

The case where appliance energy efficiency standards are implemented. Compare to base case.

TSD's are published by the DOE as companion documents to Federal Register notices (e.g., ANOPRs and 

NOPRs). The TSD's include technical detail that supports the notices. The NOPR's TSD will include the 

discussion of the Manufacturer Impact Analysis (MIA), based on the GRIM.

A trial appliance energy efficiency standard evaluated by the DOE during the NOPR phase analyses.

The weighted average cost of debt and equity capital for a firm or industry, weighted by the proportions of each 

source. The cost of debt is reduced by the tax shield provided by debt-financing. The GRIM's WACC is typically

specified in real terms (inflation-adjusted).
Base Case Standard Case



FCFt



FCFt 4. Industry 

1. Revenues

Costs

Prices X Shipments = Revenue

•Efficiency 

Level

•Markups

•Efficiency

Level

Prices X Shipments = Revenue

3. Free Cash 

Flow (FCFt)

NOPAT

Change in 

Depreciation Working Capital

Cash Used in 

Investment FCFt

+ + + =

Distribution Transformer GRIM Model

•Conversion

CAPEX

•Efficiency

Level

•Conversion 

CAPEX

•Efficiency

Level

NOPAT

Change in 

Depreciation Working Capital

Cash Used in 

Investment FCFt

+ + + =

2. Net 

Operating 

Profit after 

Taxes 

(NOPAT)

= NOPAT •Efficiency

Level

•Conversion 

CAPEX

•Product Conversion 

Expenses

•Efficiency

Level

Revenue – (COGS w/ Depreciation + SG&A + Taxes) Revenue – (COGS w/ Depreciation + SG&A + Taxes)

Base Case Standard Case



FCFt



FCFt 4. Industry 

1. Revenues

Costs

Prices X Shipments = Revenue

Costs

Prices X Shipments = Revenue

•Efficiency 

Level

•Markups

•Efficiency

Level

Prices X Shipments = Revenue

•Efficiency 

Level

•Markups

•Efficiency

Level

Prices X Shipments = Revenue

3. Free Cash 

Flow (FCFt)

NOPAT

Change in 

Depreciation Working Capital

Cash Used in 

Investment FCFt

+ + + =

Distribution Transformer GRIM Model

•Conversion

CAPEX

•Efficiency

Level

•Conversion 

CAPEX

•Efficiency

Level

NOPAT

Change in 

Depreciation Working Capital

Cash Used in 

Investment FCFt

+ + + =

2. Net 

Operating 

Profit after 

Taxes 

(NOPAT)

= NOPAT •Efficiency

Level

•Conversion 

CAPEX

•Product Conversion 

Expenses

•Efficiency

Level

Revenue – (COGS w/ Depreciation + SG&A + Taxes) Revenue – (COGS w/ Depreciation + SG&A + Taxes)

Index

Change in INPV = INPV Standard – INPV Base

INPV Base = 

FCF

(1 + WACC)

t

t

+ Discounted 

Terminal Value

INPV Standard = 

FCF

(1 + WACC)

t

t

+ Discounted 

Terminal 

Value

4. Industry 

Net Present 

Value 

(INPV)

Level Level

Change in INPV = INPV Standard – INPV Base

INPV Base = 

FCF

(1 + WACC)

t

t

+ Discounted 

Terminal Value

INPV Standard = 

FCF

(1 + WACC)

t

t

+ Discounted 

Terminal 

Value

4. Industry 

Net Present 

Value 

(INPV)

Level Level
Assumptions Page for 0.00%

Mobile Home Furnaces

Active Class Selected: Mobile Home Furnaces

Standard Case AFUE (%): 75%

Markup Scenario: Flat

Economic Growth Scenario: Reference

GAMA Min/Max Cost Scenario: Low

Manufacturer Shipments? Y

Trial Standard Level 0

Class Index 3

Scenario Index 183

Economic Growth Index 0

Financial Parameters

Base Year 2006

Announcement Year 2007

Standard Year 2015

Terminal Year 2038

PPE Depreciation Period (years) 10

Growth Rate @ Terminal Year 1%

Inflation: Nominal Terms Off

Selected MHF

Tax rate 37.9% 37.9% of EBT

Working Capital 22.0% 22.0% of Revenue

Standard SG&A 16.6% 16.6% of Revenue

Capital Expenditures 1.8% 1.8% of Revenue

Depreciation 1.9% 1.9% of Revenue

R&D 1.0% 1.0% of Revenue

Net Property, Plant, & Equipment 15% 14.7% of Revenue

Discount Rate 5% 5.1% of Revenue

Inflation Rate 0% 0.0% per year

% of Conv Capex to replace Stranded Assets 100% 100.0%

0.0%

Markup Scenario Flat Flat

Markup Index 1 1

Average Markup 1.285 1.29

Market Share 100% 100%

Base Case AFUE (%) 75% 75%

Standard Case AFUE (%) 75% 75%
26% Avg Markup

AFUE Material Labor Transportation Overhead Depreciation

Total w/o 

Depreciation

Base 

Markup

Base 

Case 

Price

Standard 

Case 

Markup

Standard 

Case 

Price

1.29

1 75% $208.00 $41.82 $42.44 $22.30 $5.80 $308.75 1.29 $396.75 1.29 $396.75 15%

2 76%

3 77%

4 78%

5 79%

6 80% $237.14 $46.28 $42.44 $23.92 $6.22 $343.55 1.29 $441.46 1.29 $441.46 80%

7 81% $240.05 $47.67 $43.71 $23.92 $6.22 $349.12 1.29 $448.62 1.29 $448.62 0%

9 82%

10 83%

11 84%

12 85%

13 86%

14 87%

15 88%

16 89%

17 90% $327.45 $58.34 $50.93 $28.70 $7.46 $457.96 1.29 $588.48 1.29 $588.48 5%

18 91%

19 92%

20 93%

21 94%

22 95%

Manufactured Home Furnaces

23 96%

24 97%

25 98%

26 99%

100%

Manufacturer Markup:MHF

Flat

75% 80% 81% 90%

AFUE 75% 1.29 1.29 1.29 1.29

STD 80% 1.29 1.29 1.29
81% 1.29 1.29

90% 1.29

Exponential

5%

75% 80% 81% 90%

AFUE 75% 1.29 1.29 1.29 1.29

STD 80% 1.29 1.29 1.29

81% 1.29 1.29

90% 1.29

Custom

60%

75% 80% 81% 90%

AFUE 75% 1.285 1.285 1.285 1.285

STD 80% 1.300 1.285 1.300

81% 1.270 1.285

90% 1.210

22.77696

0 232.15

0.01 232.15

0.02 232.15
0.03 232.15

0.04 232.15

0.05 232.15

0.06 232.15

0.07 232.15

0.08 232.15

0.09 232.15

0.1 232.15

0.11 232.15

0.12 232.15

0.13 232.15

0.14 232.15

0.15 232.15

0.16 232.15

0.17 232.15

0.18 232.15

0.19 232.15 0 232.15

0.001 232.15

0.002 232.15

0.003 232.15

0.004 232.15

0.005 232.15

0.006 232.15

0.007 232.15

0.008 232.15

0.009 232.15

0.01 232.15

0.011 232.15

0.012 232.15

0.013 232.15

0.014 232.15

0.015 232.15

0.016 232.15

0.017 232.15

0.018 232.15

0.019 232.15

0.02 232.15

-0.001 232.15

-0.0009 232.15

-0.0008 232.15

-0.0007 232.15

-0.0006 232.15

-0.0005 232.15

-0.0004 232.15

-0.0003 232.15

-0.0002 232.15

-1E-04 232.15
1.89735E-19 232.15

0.0001 232.15

0.0002 232.15

0.0003 232.15

0.0004 232.15

0.0005 232.15

0.0006 232.15

0.0007 232.15

0.0008 232.15

0.0009 232.15

0.001 232.15

-0.001

41 42 43 44 45 46 47 48 49 50 51 52 53 93 94



95 96 97 98 99 100 101 102 103 104 105 106 107 108



109 110 111 112 113 114 115 116 117 118 119 120 121 122 123 124



125
1 2 3 4 5 6 7 8 9 10 11 12

FALSE Total mln

75% 75% 75% 75% 75% 80% 80% 80% 80% 80% 81%

75% 80% 81% 90% Total 75% 80% 81% 90% Total 75%

0.143 2003 0.021 0.114 0.000 0.007 0.143 0.021 0.114 0.000 0.007 0.143 0.021

0.144 2004 0.022 0.115 0.000 0.007 0.144 0.022 0.115 0.000 0.007 0.144 0.022

0.139 2005 0.021 0.111 0.000 0.007 0.139 0.021 0.111 0.000 0.007 0.139 0.021

0.139 2006 0.021 0.111 0.000 0.007 0.139 0.021 0.111 0.000 0.007 0.139 0.021

0.142 2007 0.021 0.113 0.000 0.007 0.142 0.021 0.113 0.000 0.007 0.142 0.021

0.146 2008 0.022 0.117 0.000 0.007 0.146 0.022 0.117 0.000 0.007 0.146 0.022

0.155 2009 0.023 0.124 0.000 0.008 0.155 0.023 0.124 0.000 0.008 0.155 0.023

0.164 2010 0.025 0.131 0.000 0.008 0.164 0.025 0.131 0.000 0.008 0.164 0.025

0.173 2011 0.026 0.139 0.000 0.009 0.173 0.026 0.139 0.000 0.009 0.173 0.026

0.183 2012 0.027 0.146 0.000 0.009 0.183 0.027 0.146 0.000 0.009 0.183 0.027

0.193 2013 0.029 0.154 0.000 0.010 0.193 0.029 0.154 0.000 0.010 0.193 0.029

0.200 2014 0.030 0.160 0.000 0.010 0.200 0.030 0.160 0.000 0.010 0.200 0.030

0.196 2015 0.029 0.154 0.000 0.010 0.192 0.000 0.182 0.000 0.010 0.192 0.000

0.185 2016 0.028 0.149 0.000 0.009 0.186 0.000 0.177 0.000 0.009 0.186 0.000

0.172 2017 0.026 0.140 0.000 0.009 0.175 0.000 0.166 0.000 0.009 0.175 0.000

0.158 2018 0.025 0.131 0.000 0.008 0.164 0.000 0.156 0.000 0.008 0.164 0.000

0.140 2019 0.023 0.120 0.000 0.008 0.150 0.000 0.143 0.000 0.008 0.150 0.000

0.123 2020 0.020 0.107 0.000 0.007 0.134 0.000 0.127 0.000 0.007 0.134 0.000

0.109 2021 0.018 0.098 0.000 0.006 0.122 0.000 0.116 0.000 0.006 0.122 0.000

0.097 2022 0.016 0.087 0.000 0.005 0.109 0.000 0.104 0.000 0.005 0.109 0.000

0.093 2023 0.015 0.082 0.000 0.005 0.103 0.000 0.098 0.000 0.005 0.103 0.000

0.095 2024 0.015 0.082 0.000 0.005 0.102 0.000 0.097 0.000 0.005 0.102 0.000

0.098 2025 0.016 0.083 0.000 0.005 0.104 0.000 0.099 0.000 0.005 0.104 0.000

0.106 2026 0.017 0.088 0.000 0.006 0.110 0.000 0.105 0.000 0.006 0.110 0.000

0.113 2027 0.017 0.092 0.000 0.006 0.115 0.000 0.109 0.000 0.006 0.115 0.000

0.119 2028 0.018 0.095 0.000 0.006 0.119 0.000 0.113 0.000 0.006 0.119 0.000

0.123 2029 0.018 0.098 0.000 0.006 0.123 0.000 0.117 0.000 0.006 0.123 0.000

0.124 2030 0.019 0.100 0.000 0.006 0.125 0.000 0.119 0.000 0.006 0.125 0.000

0.123 2031 0.019 0.102 0.000 0.006 0.127 0.000 0.121 0.000 0.006 0.127 0.000

0.121 2032 0.019 0.102 0.000 0.006 0.128 0.000 0.122 0.000 0.006 0.128 0.000

0.118 2033 0.019 0.102 0.000 0.006 0.128 0.000 0.122 0.000 0.006 0.128 0.000

0.114 2034 0.019 0.103 0.000 0.006 0.129 0.000 0.123 0.000 0.006 0.129 0.000

0.111 2035 0.019 0.103 0.000 0.006 0.129 0.000 0.123 0.000 0.006 0.129 0.000

0.108 2036 0.019 0.103 0.000 0.006 0.129 0.000 0.123 0.000 0.006 0.129 0.000

0.105 2037 0.019 0.103 0.000 0.006 0.129 0.000 0.123 0.000 0.006 0.129 0.000

0.103 2038 0.019 0.103 0.000 0.006 0.129 0.000 0.123 0.000 0.006 0.129 0.000

5.081 5.081
13 14 15 16 17 18 19 20 21

81% 81% 81% 81% 90% 90% 90% 90% 90%

80% 81% 90% Total 75% 80% 81% 90% Total

0.114 0.000 0.007 0.143 0.021 0.114 0.000 0.007 0.143

0.115 0.000 0.007 0.144 0.022 0.115 0.000 0.007 0.144

0.111 0.000 0.007 0.139 0.021 0.111 0.000 0.007 0.139

0.111 0.000 0.007 0.139 0.021 0.111 0.000 0.007 0.139

0.113 0.000 0.007 0.142 0.021 0.113 0.000 0.007 0.142

0.117 0.000 0.007 0.146 0.022 0.117 0.000 0.007 0.146

0.124 0.000 0.008 0.155 0.023 0.124 0.000 0.008 0.155

0.131 0.000 0.008 0.164 0.025 0.131 0.000 0.008 0.164

0.139 0.000 0.009 0.173 0.026 0.139 0.000 0.009 0.173

0.146 0.000 0.009 0.183 0.027 0.146 0.000 0.009 0.183

0.154 0.000 0.010 0.193 0.029 0.154 0.000 0.010 0.193

0.160 0.000 0.010 0.200 0.030 0.160 0.000 0.010 0.200

0.000 0.174 0.009 0.183 0.000 0.000 0.000 0.124 0.124

0.000 0.171 0.009 0.180 0.000 0.000 0.000 0.117 0.117

0.000 0.162 0.009 0.170 0.000 0.000 0.000 0.109 0.109

0.000 0.152 0.008 0.160 0.000 0.000 0.000 0.101 0.101

0.000 0.133 0.007 0.140 0.000 0.000 0.000 0.094 0.094

0.000 0.124 0.007 0.130 0.000 0.000 0.000 0.086 0.086

0.000 0.105 0.006 0.110 0.000 0.000 0.000 0.078 0.078

0.000 0.095 0.005 0.100 0.000 0.000 0.000 0.062 0.062

0.000 0.095 0.005 0.100 0.000 0.000 0.000 0.062 0.062

0.000 0.095 0.005 0.100 0.000 0.000 0.000 0.062 0.062

0.000 0.095 0.005 0.100 0.000 0.000 0.000 0.062 0.062

0.000 0.095 0.005 0.100 0.000 0.000 0.000 0.062 0.062

0.000 0.105 0.006 0.110 0.000 0.000 0.000 0.070 0.070

0.000 0.105 0.006 0.110 0.000 0.000 0.000 0.070 0.070

0.000 0.105 0.006 0.110 0.000 0.000 0.000 0.070 0.070

0.000 0.114 0.006 0.120 0.000 0.000 0.000 0.078 0.078

0.000 0.114 0.006 0.120 0.000 0.000 0.000 0.078 0.078

0.000 0.114 0.006 0.120 0.000 0.000 0.000 0.078 0.078

0.000 0.114 0.006 0.120 0.000 0.000 0.000 0.078 0.078

0.000 0.114 0.006 0.120 0.000 0.000 0.000 0.078 0.078

0.000 0.114 0.006 0.120 0.000 0.000 0.000 0.078 0.078

0.000 0.114 0.006 0.120 0.000 0.000 0.000 0.078 0.078

0.000 0.114 0.006 0.120 0.000 0.000 0.000 0.078 0.078

0.000 0.114 0.006 0.120 0.000 0.000 0.000 0.078 0.078

4.903 3.854
Prod Hold Factor 0.98

Product Conversion Factors

1 2 3 4 5 6

std yr 2% 2% 2% 2% 2% 2%

std yr-1 98% 44% 39% 44% 44% 44%

std yr-2 54% 34% 35% 35% 35%

std yr-3 25% 17% 17% 17%

std yr-4 2% 2% 2%

std yr-5 0% 0%

std yr-6 0%

std yr-7

std yr-8

std yr-9

std yr-10

std yr-11

std yr-12

std yr-13

std yr-14

Conversion Expenditure Factors

1 2 3 4 5 6

std yr 0% 0% 0% 0% 0% 0%

std yr-1 100% 45% 40% 45% 45% 45%

std yr-2 55% 35% 36% 36% 36%

std yr-3 25% 17% 17% 17%

std yr-4 2% 2% 2%

std yr-5 0%

std yr-6

std yr-7

std yr-8

std yr-9

std yr-10

std yr-11

std yr-12

std yr-13

std yr-14

100% 100% 100% 100% 100% 100%
7

89 10 11 12 13 14

2% 2% 2% 2% 2% 2% 2% 2%

44% 44% 44% 44% 44% 44% 44% 44%

35% 35% 35% 35% 35% 35% 35% 35%

17% 17% 17% 17% 17% 17% 17% 17%

2% 2% 2% 2% 2% 2% 2% 2%

0% 0% 0% 0% 0% 0% 0% 0%

0% 0% 0% 0% 0% 0% 0% 0%

0% 0% 0% 0% 0% 0% 0% 0%

0% 0% 0% 0% 0% 0% 0%

0% 0% 0% 0% 0% 0%

0% 0% 0% 0% 0%

0% 0% 0% 0%

0% 0% 0%

0% 0%

0%

789 10 11 12 13 14

0% 0% 0% 0% 0% 0% 0% 0%

45% 45% 45% 45% 45% 45% 45% 45%

36% 36% 36% 36% 36% 36% 36% 36%

17% 17% 17% 17% 17% 17% 17% 17%

2% 2% 2% 2% 2% 2% 2% 2%

0% 0% 0% 0% 0% 0% 0% 0%

0% 0% 0% 0% 0% 0% 0% 0%

0% 0% 0% 0% 0% 0% 0%

0% 0% 0% 0% 0% 0%

Index

0% 0% 0% 0% 0% 0%

0% 0% 0% 0% 0% 0%

0% 0% 0% 0% 0%

0% 0% 0% 0%

0% 0% 0%

0% 0%

0%

100% 100% 100% 100% 100% 100% 100% 100%

Index
Mobile Home Furnaces

Base Year

Announcement 

Year

Standard 

Year

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038

Mobile Home Furnaces

Income Statement

75% AFUE

Unit Price $ 397 $ 397 $ 397 $ 397 $ 397 $ 397 $ 397 $ 397 $ 397 $ 397 $ 397 $ 397 $ 397 $ 397 $ 397 $ 397 $ 397 $ 397 $ 397 $ 397 $ 397 $ 397 $ 397 $ 397 $ 397 $ 397 $ 397 $ 397 $ 397 $ 397 $ 397 $ 397 $ 397 $ 397 $ 397 $ 397

Unit Sales 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.561

Revenues $ 9 $ 9 $ 8 $ 8 $ 8 $ 9 $ 9 $ 10 $ 10 $ 11 $ 11 $ 12 $ 11 $ 11 $ 10 $ 10 $ 9 $ 8 $ 7 $ 6 $ 6 $ 6 $ 6 $ 7 $ 7 $ 7 $ 7 $ 7 $ 8 $ 8 $ 8 $ 8 $ 8 $ 8 $ 8 $ 8

Cost of Sales

Labor $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1

Material $ 4 $ 4 $ 4 $ 4 $ 4 $ 5 $ 5 $ 5 $ 5 $ 6 $ 6 $ 6 $ 6 $ 6 $ 5 $ 5 $ 5 $ 4 $ 4 $ 3 $ 3 $ 3 $ 3 $ 3 $ 4 $ 4 $ 4 $ 4 $ 4 $ 4 $ 4 $ 4 $ 4 $ 4 $ 4 $ 4

Overhead $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0

Freight $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1

80% AFUE

Unit Price $ 441 $ 441 $ 441 $ 441 $ 441 $ 441 $ 441 $ 441 $ 441 $ 441 $ 441 $ 441 $ 441 $ 441 $ 441 $ 441 $ 441 $ 441 $ 441 $ 441 $ 441 $ 441 $ 441 $ 441 $ 441 $ 441 $ 441 $ 441 $ 441 $ 441 $ 441 $ 441 $ 441 $ 441 $ 441 $ 441 $ 15,893

Unit Sales 0.11 0.11 0.11 0.11 0.11 0.12 0.12 0.13 0.14 0.15 0.15 0.16 0.15 0.15 0.14 0.13 0.12 0.11 0.10 0.09 0.08 0.08 0.08 0.09 0.09 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 2.990

Revenues $ 50 $ 51 $ 49 $ 49 $ 50 $ 52 $ 55 $ 58 $ 61 $ 65 $ 68 $ 71 $ 68 $ 66 $ 62 $ 58 $ 53 $ 47 $ 43 $ 38 $ 36 $ 36 $ 37 $ 39 $ 41 $ 42 $ 43 $ 44 $ 45 $ 45 $ 45 $ 46 $ 46 $ 46 $ 46 $ 46

1.452804 1 2

Cost of Sales

Labor $ 5 $ 5 $ 5 $ 5 $ 5 $ 5 $ 6 $ 6 $ 6 $ 7 $ 7 $ 7 $ 7 $ 7 $ 6 $ 6 $ 6 $ 5 $ 5 $ 4 $ 4 $ 4 $ 4 $ 4 $ 4 $ 4 $ 5 $ 5 $ 5 $ 5 $ 5 $ 5 $ 5 $ 5 $ 5 $ 5

Material Material $ $ 27 $ $ 27 $ $ 26 $ $ 26 $ $ 27 $ $ 28 $ $ 29 $ $ 31 $ $ 33 $ $ 35 $ $ 37 $ $ 38 $ $ 36 $ $ 35 $ $ 33 $ $ 31 $ $ 28 $ $ 25 $ $ 23 $ $ 21 $ $ 20 $ $ 19 $ $ 20 $ $ 21 $ $ 22 $ $ 23 $ $ 23 $ $ 24 $ $ 24 $ $ 24 $ $ 24 $ $ 24 $ $ 24 $ $ 24 $ $ 24 $ $ 24

Overhead $ 2 $ 2 $ 2 $ 2 $ 2 $ 2 $ 2 $ 2 $ 2 $ 3 $ 3 $ 3 $ 3 $ 3 $ 2 $ 2 $ 2 $ 2 $ 2 $ 2 $ 1 $ 1 $ 1 $ 2 $ 2 $ 2 $ 2 $ 2 $ 2 $ 2 $ 2 $ 2 $ 2 $ 2 $ 2 $ 2

Freight $ 5 $ 5 $ 5 $ 5 $ 5 $ 5 $ 5 $ 6 $ 6 $ 6 $ 7 $ 7 $ 7 $ 6 $ 6 $ 6 $ 5 $ 5 $ 4 $ 4 $ 3 $ 3 $ 4 $ 4 $ 4 $ 4 $ 4 $ 4 $ 4 $ 4 $ 4 $ 4 $ 4 $ 4 $ 4 $ 4

81% AFUE

Unit Price $ 449 $ 449 $ 449 $ 449 $ 449 $ 449 $ 449 $ 449 $ 449 $ 449 $ 449 $ 449 $ 449 $ 449 $ 449 $ 449 $ 449 $ 449 $ 449 $ 449 $ 449 $ 449 $ 449 $ 449 $ 449 $ 449 $ 449 $ 449 $ 449 $ 449 $ 449 $ 449 $ 449 $ 449 $ 449 $ 449 $ 16,150

Unit Sales - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 0.000

Revenues $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -

Cost of Sales

Labor $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -

Material $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -

Overhead $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -

Freight $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -

90% AFUE

Unit Price $ 588 $ 588 $ 588 $ 588 $ 588 $ 588 $ 588 $ 588 $ 588 $ 588 $ 588 $ 588 $ 588 $ 588 $ 588 $ 588 $ 588 $ 588 $ 588 $ 588 $ 588 $ 588 $ 588 $ 588 $ 588 $ 588 $ 588 $ 588 $ 588 $ 588 $ 588 $ 588 $ 588 $ 588 $ 588 $ 588 $ 21,185

Unit Sales 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.187

Revenues $ 4 $ 4 $ 4 $ 4 $ 4 $ 4 $ 5 $ 5 $ 5 $ 5 $ 6 $ 6 $ 6 $ 5 $ 5 $ 5 $ 4 $ 4 $ 4 $ 3 $ 3 $ 3 $ 3 $ 3 $ 3 $ 4 $ 4 $ 4 $ 4 $ 4 $ 4 $ 4 $ 4 $ 4 $ 4 $ 4

Cost of Sales

Labor $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0

Material $ 2 $ 2 $ 2 $ 2 $ 2 $ 2 $ 3 $ 3 $ 3 $ 3 $ 3 $ 3 $ 3 $ 3 $ 3 $ 3 $ 2 $ 2 $ 2 $ 2 $ 2 $ 2 $ 2 $ 2 $ 2 $ 2 $ 2 $ 2 $ 2 $ 2 $ 2 $ 2 $ 2 $ 2 $ 2 $ 2

Overhead $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0

Freight $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 1 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0

Average Price per Unit Average Price per Unit $ 442 $ 442 $ 442 $ 442 $ $ 442 $ 442 $ 442 $ 442 $ 442 $ 442 $ 442 $ 442 $ 442 $ 442 $ 442 $ 442 $ 442 $ 442 $ 442 $ 442 $ 442 $ 442 $ 442 $ 442 $ 442 $ 442 $ 442 $ 442 $ 442 $ 442 $ 442 $ 442 $ 442 $ 442 $ 442 $ 442
Mobile Home Furnaces

Base Year

Announcem

ent Year

2003 2004 2005 2006 2007 2008

NWGF

0.05131 1

Income Statement 1

75% AFUE

Unit Price $ 397 $ 397 $ 397 $ 397 $ 397 $ 397

Unit Sales 0.02 0.02 0.02 0.02 0.02 0.02

Revenues $ 9 $ 9 $ 8 $ 8 $ 8 $ 9

Cost of Sales

Labor $ 1 $ 1 $ 1 $ 1 $ 1 $ 1

Material $ 4 $ 4 $ 4 $ 4 $ 4 $ 5

Overhead $ 0 $ 0 $ 0 $ 0 $ 0 $ 0

Freight $ 1 $ 1 $ 1 $ 1 $ 1 $ 1

80% AFUE

Unit Price $ 441 $ 441 $ 441 $ 441 $ 441 $ 441

Unit Sales 0.11 0.11 0.11 0.11 0.11 0.12

Revenues $ 50 $ 51 $ 49 $ 49 $ 50 $ 52

Cost of Sales

Labor $ 5 $ 5 $ 5 $ 5 $ 5 $ 5

Material $ 27 $ 27 $ 26 $ 26 $ 27 $ 28

Overhead $ 2 $ 2 $ 2 $ 2 $ 2 $ 2

Freight $ 5 $ 5 $ 5 $ 5 $ 5 $ 5

81% AFUE

Unit Price $ 449 $ 449 $ 449 $ 449 $ 449 $ 449

Unit Sales - - - - - -

Revenues $ - $ - $ - $ - $ - $ -

Cost of Sales

Labor $ - $ - $ - $ - $ - $ -

Material $ - $ - $ - $ - $ - $ -

Overhead $ - $ - $ - $ - $ - $ -

Freight $ - $ - $ - $ - $ - $ -

90% AFUE

Unit Price $ 588 $ 588 $ 588 $ 588 $ 588 $ 588

Unit Sales 0.01 0.01 0.01 0.01 0.01 0.01

Revenues $ 4 $ 4 $ 4 $ 4 $ 4 $ 4

Cost of Sales

Labor $ 0 $ 0 $ 0 $ 0 $ 0 $ 0

Material $ 2 $ 2 $ 2 $ 2 $ 2 $ 2

Overhead $ 0 $ 0 $ 0 $ 0 $ 0 $ 0

Freight $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
Average Price per Unit $ 442 $ 442 $ 442 $ 442 $ 442 $ 442
Standard 

Year

2009 2010 2011 2012 2013 2014 2015 2016 2017

$ 397 $ 397 $ 397 $ 397 $ 397 $ 397 $ 397 $ 397 $ 397

 0.02 0.02 0.03 0.03 0.03 0.03 0.03 0.03 0.03

$ 9 $ 10 $ 10 $ 11 $ 11 $ 12 $ 11 $ 11 $ 10

$ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1

$ 5 $ 5 $ 5 $ 6 $ 6 $ 6 $ 6 $ 6 $ 5

$ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0

$ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1

$ 441 $ 441 $ 441 $ 441 $ 441 $ 441 $ 441 $ 441 $ 441

 0.12 0.13 0.14 0.15 0.15 0.16 0.15 0.15 0.14

$ 55 $ 58 $ 61 $ 65 $ 68 $ 71 $ 68 $ 66 $ 62

$ 6 $ 6 $ 6 $ 7 $ 7 $ 7 $ 7 $ 7 $ 6

$ 29 $ 31 $ 33 $ 35 $ 37 $ 38 $ 36 $ 35 $ 33

$ 2 $ 2 $ 2 $ 3 $ 3 $ 3 $ 3 $ 3 $ 2

$ 5 $ 6 $ 6 $ 6 $ 7 $ 7 $ 7 $ 6 $ 6

$ 449 $ 449 $ 449 $ 449 $ 449 $ 449 $ 449 $ 449 $ 449

 - - - - - - - - -

$ - $ - $ - $ - $ - $ - $ - $ - $ -

$ - $ - $ - $ - $ - $ - $ - $ - $ -

$ - $ - $ - $ - $ - $ - $ - $ - $ -

$ - $ - $ - $ - $ - $ - $ - $ - $ -

$ - $ - $ - $ - $ - $ - $ - $ - $ -

$ 588 $ 588 $ 588 $ 588 $ 588 $ 588 $ 588 $ 588 $ 588

 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01

$ 5 $ 5 $ 5 $ 5 $ 6 $ 6 $ 6 $ 5 $ 5

$ 0 $ 0 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1

$ 3 $ 3 $ 3 $ 3 $ 3 $ 3 $ 3 $ 3 $ 3

$ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0

$ 0 $ 0 $ 0 $ 0 $ 0 $ 1 $ 0 $ 0 $ 0
$ 442 $ 442 $ 442 $ 442 $ 442 $ 442 $ 442 $ 442 $ 442
2018 2019 2020 2021 2022 2023 2024 2025 2026

$ 397 $ 397 $ 397 $ 397 $ 397 $ 397 $ 397 $ 397 $ 397

 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02

$ 10 $ 9 $ 8 $ 7 $ 6 $ 6 $ 6 $ 6 $ 7

$ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1

$ 5 $ 5 $ 4 $ 4 $ 3 $ 3 $ 3 $ 3 $ 3

$ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0

$ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1

$ 441 $ 441 $ 441 $ 441 $ 441 $ 441 $ 441 $ 441 $ 441

 0.13 0.12 0.11 0.10 0.09 0.08 0.08 0.08 0.09

$ 58 $ 53 $ 47 $ 43 $ 38 $ 36 $ 36 $ 37 $ 39

$ 6 $ 6 $ 5 $ 5 $ 4 $ 4 $ 4 $ 4 $ 4

$ 31 $ 28 $ 25 $ 23 $ 21 $ 20 $ 19 $ 20 $ 21

$ 2 $ 2 $ 2 $ 2 $ 2 $ 1 $ 1 $ 1 $ 2

$ 6 $ 5 $ 5 $ 4 $ 4 $ 3 $ 3 $ 4 $ 4

$ 449 $ 449 $ 449 $ 449 $ 449 $ 449 $ 449 $ 449 $ 449

 - - - - - - - - -

$ - $ - $ - $ - $ - $ - $ - $ - $ -

$ - $ - $ - $ - $ - $ - $ - $ - $ -

$ - $ - $ - $ - $ - $ - $ - $ - $ -

$ - $ - $ - $ - $ - $ - $ - $ - $ -

$ - $ - $ - $ - $ - $ - $ - $ - $ -

$ 588 $ 588 $ 588 $ 588 $ 588 $ 588 $ 588 $ 588 $ 588

 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01

$ 5 $ 4 $ 4 $ 4 $ 3 $ 3 $ 3 $ 3 $ 3

$ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0

$ 3 $ 2 $ 2 $ 2 $ 2 $ 2 $ 2 $ 2 $ 2

$ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0

$ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
$ 442 $ 442 $ 442 $ 442 $ 442 $ 442 $ 442 $ 442 $ 442
2027 2028 2029 2030 2031 2032 2033 2034 2035

$ 397 $ 397 $ 397 $ 397 $ 397 $ 397 $ 397 $ 397 $ 397

 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02

$ 7 $ 7 $ 7 $ 7 $ 8 $ 8 $ 8 $ 8 $ 8

$ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1

$ 4 $ 4 $ 4 $ 4 $ 4 $ 4 $ 4 $ 4 $ 4

$ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0

$ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1

$ 441 $ 441 $ 441 $ 441 $ 441 $ 441 $ 441 $ 441 $ 441

 0.09 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10

$ 41 $ 42 $ 43 $ 44 $ 45 $ 45 $ 45 $ 46 $ 46

$ 4 $ 4 $ 5 $ 5 $ 5 $ 5 $ 5 $ 5 $ 5

$ 22 $ 23 $ 23 $ 24 $ 24 $ 24 $ 24 $ 24 $ 24

$ 2 $ 2 $ 2 $ 2 $ 2 $ 2 $ 2 $ 2 $ 2

$ 4 $ 4 $ 4 $ 4 $ 4 $ 4 $ 4 $ 4 $ 4

$ 449 $ 449 $ 449 $ 449 $ 449 $ 449 $ 449 $ 449 $ 449

 - - - - - - - - -

$ - $ - $ - $ - $ - $ - $ - $ - $ -

$ - $ - $ - $ - $ - $ - $ - $ - $ -

$ - $ - $ - $ - $ - $ - $ - $ - $ -

$ - $ - $ - $ - $ - $ - $ - $ - $ -

$ - $ - $ - $ - $ - $ - $ - $ - $ -

$ 588 $ 588 $ 588 $ 588 $ 588 $ 588 $ 588 $ 588 $ 588

 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01

$ 3 $ 4 $ 4 $ 4 $ 4 $ 4 $ 4 $ 4 $ 4

$ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0

$ 2 $ 2 $ 2 $ 2 $ 2 $ 2 $ 2 $ 2 $ 2

$ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0

$ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
$ 442 $ 442 $ 442 $ 442 $ 442 $ 442 $ 442 $ 442 $ 442
2036 2037 2038

$ 397 $ 397 $ 397

 0.02 0.02 0.02 0.56

$ 8 $ 8 $ 8

$ 1 $ 1 $ 1

$ 4 $ 4 $ 4

$ 0 $ 0 $ 0

$ 1 $ 1 $ 1

$ 441 $ 441 $ 441

 0.10 0.10 0.10 2.99

$ 46 $ 46 $ 46

$ 5 $ 5 $ 5

$ 24 $ 24 $ 24

$ 2 $ 2 $ 2

$ 4 $ 4 $ 4

$ 449 $ 449 $ 449

 - - - 0.00

$ - $ - $ -

$ - $ - $ -

$ - $ - $ -

$ - $ - $ -

$ - $ - $ -

$ 588 $ 588 $ 588

 0.01 0.01 0.01 0.19

$ 4 $ 4 $ 4

$ 0 $ 0 $ 0

$ 2 $ 2 $ 2

$ 0 $ 0 $ 0

$ 0 $ 0 $ 0
$ 442 $ 442 $ 442
Mobile Home Furnaces

BASE CASE SCENARIO Base Year

Announcem

ent Year

Standard 

Year

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Unit Sales 0.14 0.14 0.14 0.14 0.14 0.15 0.15 0.16 0.17 0.18 0.19 0.20 0.19

Revenues 63.17 63.51 61.48 61.29 62.62 64.71 68.35 72.61 76.60 80.85 85.18 88.63 84.88

Cost of Sales

Labor 10.5% 6.60 6.64 6.43 6.41 6.55 6.76 7.14 7.59 8.01 8.45 8.90 9.26 8.87

Material 53.7% 33.90 34.09 32.99 32.90 33.61 34.73 36.69 38.97 41.11 43.39 45.72 47.57 45.56

Overhead 4.0% 2.53 2.54 2.46 2.45 2.51 2.59 2.74 2.91 3.07 3.24 3.41 3.55 3.40

Freight 9.7% 6.12 6.16 5.96 5.94 6.07 6.27 6.63 7.04 7.43 7.84 8.26 8.59 8.23

Depreciation 1.90% 1.20 1.21 1.17 1.16 1.19 1.23 1.30 1.38 1.46 1.54 1.62 1.68 1.61

Selling, General and Administrative

Standard SG&A 16.6% 10.46 10.51 10.18 10.14 10.37 10.71 11.31 12.02 12.68 13.38 14.10 14.67 14.05

R&D 1.0% 0.64 0.64 0.62 0.62 0.64 0.66 0.69 0.74 0.78 0.82 0.86 0.90 0.86

Product Conversion Expense - - - - - - - - - - - - -

Profit Before Tax 2.7% 1.71 1.72 1.67 1.66 1.70 1.75 1.85 1.97 2.08 2.19 2.31 2.40 2.30

 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03

Taxes 0.65 0.65 0.63 0.63 0.64 0.66 0.70 0.75 0.79 0.83 0.87 0.91 0.87

NOPAT 1.06 1.07 1.04 1.03 1.06 1.09 1.15 1.22 1.29 1.36 1.44 1.49 1.43

 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02

NOPAT 1.06 1.07 1.04 1.03 1.06 1.09 1.15 1.22 1.29 1.36 1.44 1.49 1.43

Depreciation 1.20 1.21 1.17 1.16 1.19 1.23 1.30 1.38 1.46 1.54 1.62 1.68 1.61

Cash Flow Statement 

Income Statement (mln)

Depreciation 1.20 1.21 1.17 1.16 1.19 1.23 1.30 1.38 1.46 1.54 1.62 1.68 1.61

Change in Working Capital - (0.07) 0.45 0.04 (0.29) (0.46) (0.80) (0.94) (0.88) (0.93) (0.95) (0.76) 0.82

Cash Flows from Operations 2.26 2.20 2.65 2.24 1.95 1.86 1.65 1.67 1.87 1.97 2.10 2.42 3.87

Ordinary Capital Expenditures 1.80% (1.14) (1.14) (1.11) (1.10) (1.13) (1.16) (1.23) (1.31) (1.38) (1.46) (1.53) (1.60) (1.53)

Conversion Capital Expenditures - - - - - - - - - - - - -

Cash Used In Investment (1.14) (1.14) (1.11) (1.10) (1.13) (1.16) (1.23) (1.31) (1.38) (1.46) (1.53) (1.60) (1.53)

Net Cash Flow 1.13 1.06 1.54 1.13 0.83 0.70 0.42 0.36 0.49 0.51 0.57 0.82 2.34

Terminal Value - - - - - - - - - - - - -

Present Value Factor 1.11 1.05 1.00 0.95 0.90 0.86 0.82 0.78 0.74 0.71 0.67 0.64 0.61

Discounted Cash Flow 1.25 1.11 1.54 1.08 0.75 0.60 0.34 0.28 0.36 0.36 0.38 0.53 1.42

Industry Value thru 2038 $ 23

ROIC Calculation Seed Value

Net Property Plant and Equipment 14.75% 9.32 9.25 9.19 9.13 9.07 9.00 8.93 8.86 8.78 8.70 8.62 8.53 8.44

Net Working Capital 13.87 13.95 13.50 13.46 13.75 14.21 15.01 15.95 16.82 17.75 18.70 19.46 18.64

Other Operating Assets, Net of other Liabilities - - - - - - - - - - - - -

Operating Invested Capital (beginning of year) 23.19 23.20 22.69 22.59 22.82 23.21 23.94 24.81 25.60 26.46 27.32 27.99 27.08
Return on Invested Capital (ROIC) 4.77% 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05

Weighted Average Cost of Capital (WACC) 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05

Capex as % of Sales 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02

Depre. as % of Sales 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02

Net PPE as % of Sales 15% 0.15 0.15 0.15 0.15 0.14 0.14 0.13 0.12 0.11 0.11 0.10 0.10 0.10

Tolerance 3%
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033

 0.19 0.18 0.16 0.15 0.13 0.12 0.11 0.10 0.10 0.10 0.11 0.12 0.12 0.12 0.13 0.13 0.13 0.13

 82.23 77.37 72.51 66.32 59.24 53.94 48.19 45.54 45.09 45.98 48.63 50.84 52.61 54.38 55.26 56.15 56.59 56.59

 8.60 8.09 7.58 6.93 6.19 5.64 5.04 4.76 4.71 4.81 5.08 5.31 5.50 5.68 5.78 5.87 5.92 5.92

 44.13 41.52 38.91 35.59 31.80 28.95 25.86 24.44 24.20 24.68 26.10 27.29 28.24 29.19 29.66 30.13 30.37 30.37

 3.29 3.10 2.90 2.65 2.37 2.16 1.93 1.82 1.81 1.84 1.95 2.04 2.11 2.18 2.21 2.25 2.27 2.27

 7.97 7.50 7.03 6.43 5.74 5.23 4.67 4.41 4.37 4.46 4.71 4.93 5.10 5.27 5.36 5.44 5.49 5.49

 1.56 1.47 1.38 1.26 1.13 1.02 0.92 0.87 0.86 0.87 0.92 0.97 1.00 1.03 1.05 1.07 1.08 1.08

 13.61 12.81 12.00 10.98 9.81 8.93 7.98 7.54 7.46 7.61 8.05 8.42 8.71 9.00 9.15 9.29 9.37 9.37

 0.83 0.79 0.74 0.67 0.60 0.55 0.49 0.46 0.46 0.47 0.49 0.52 0.53 0.55 0.56 0.57 0.57 0.57

 - - - - - - - - - - - - - - - - - -

 2.23 2.10 1.97 1.80 1.61 1.46 1.31 1.23 1.22 1.25 1.32 1.38 1.43 1.47 1.50 1.52 1.53 1.53

 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03

 0.84 0.79 0.74 0.68 0.61 0.55 0.49 0.47 0.46 0.47 0.50 0.52 0.54 0.56 0.57 0.58 0.58 0.58

 1.39 1.30 1.22 1.12 1.00 0.91 0.81 0.77 0.76 0.77 0.82 0.86 0.89 0.92 0.93 0.95 0.95 0.95

 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02

 1.39 1.30 1.22 1.12 1.00 0.91 0.81 0.77 0.76 0.77 0.82 0.86 0.89 0.92 0.93 0.95 0.95 0.95

 1.56 1.47 1.38 1.26 1.13 1.02 0.92 0.87 0.86 0.87 0.92 0.97 1.00 1.03 1.05 1.07 1.08 1.08

 0.58 1.07 1.07 1.36 1.55 1.16 1.26 0.58 0.10 (0.19) (0.58) (0.49) (0.39) (0.39) (0.19) (0.19) (0.10) -

 3.53 3.84 3.67 3.74 3.68 3.10 2.99 2.22 1.71 1.45 1.16 1.34 1.50 1.56 1.79 1.82 1.93 2.03

 (1.48) (1.39) (1.31) (1.19) (1.07) (0.97) (0.87) (0.82) (0.81) (0.83) (0.88) (0.92) (0.95) (0.98) (0.99) (1.01) (1.02) (1.02)

 - - - - - - - - - - - - - - - - - -

 (1.48) (1.39) (1.31) (1.19) (1.07) (0.97) (0.87) (0.82) (0.81) (0.83) (0.88) (0.92) (0.95) (0.98) (0.99) (1.01) (1.02) (1.02)

 2.05 2.45 2.36 2.54 2.61 2.13 2.12 1.40 0.90 0.63 0.29 0.42 0.55 0.58 0.79 0.81 0.91 1.01

 - - - - - - - - - - - - - - - - - -

 0.58 0.55 0.52 0.50 0.47 0.45 0.43 0.41 0.39 0.37 0.35 0.33 0.32 0.30 0.29 0.27 0.26 0.25

 1.18 1.35 1.23 1.26 1.23 0.96 0.91 0.57 0.35 0.23 0.10 0.14 0.17 0.18 0.23 0.22 0.24 0.25

 8.36 8.29 8.21 8.15 8.09 8.03 7.99 7.94 7.89 7.85 7.80 7.75 7.70 7.64 7.59 7.53 7.47 7.42

 18.06 16.99 15.92 14.56 13.01 11.84 10.58 10.00 9.90 10.10 10.68 11.16 11.55 11.94 12.14 12.33 12.43 12.43

 - - - - - - - - - - - - - - - - - -

 26.42 25.27 24.13 22.71 21.10 19.88 18.57 17.94 17.80 17.94 18.48 18.91 19.25 19.58 19.72 19.86 19.90 19.84
 0.05 0.05 0.05 0.05 0.05 0.05 0.04 0.04 0.04 0.04 0.04 0.05 0.05 0.05 0.05 0.05 0.05 0.05

 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05

 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02

 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02

 0.10 0.11 0.11 0.12 0.14 0.15 0.17 0.17 0.18 0.17 0.16 0.15 0.15 0.14 0.14 0.13 0.13 0.13
2034 2035 2036 2037 2038

 0.13 0.13 0.13 0.13 0.13

 57.03 57.03 57.03 57.03 57.03

 5.96 5.96 5.96 5.96 5.96

 30.61 30.61 30.61 30.61 30.61

 2.28 2.28 2.28 2.28 2.28

 5.53 5.53 5.53 5.53 5.53

 1.08 1.08 1.08 1.08 1.08

 9.44 9.44 9.44 9.44 9.44

 0.58 0.58 0.58 0.58 0.58

 - - - - -

 1.55 1.55 1.55 1.55 1.55

 0.03 0.03 0.03 0.03 0.03

 0.59 0.59 0.59 0.59 0.59

 0.96 0.96 0.96 0.96 0.96

 0.02 0.02 0.02 0.02 0.02

 0.96 0.96 0.96 0.96 0.96

 1.08 1.08 1.08 1.08 1.08

 (0.10) - - - -

 1.95 2.04 2.04 2.04 2.04

 (1.03) (1.03) (1.03) (1.03) (1.03)

 - - - - -

 (1.03) (1.03) (1.03) (1.03) (1.03)

 0.92 1.02 1.02 1.02 1.02

 - - - - 24.97

 0.24 0.22 0.21 0.20 0.19

 0.22 0.23 0.22 0.21 5.00

 7.36 7.30 7.25 7.19 7.13

 12.52 12.52 12.52 12.52 12.52

 - - - - -

 19.88 19.83 19.77 19.71 19.66
 0.05 0.05 0.05 0.05 0.05

 0.05 0.05 0.05 0.05 0.05xxxx

 0.02 0.02 0.02 0.02 0.02x

 0.02 0.02 0.02 0.02 0.02x

 0.13 0.13 0.13 0.13 0.13xx
0900006480fa7774.xls

Mobile Home Furnaces

STANDARD CASE SCENARIO Base Year

Announceme

nt Year

Standard 

Year

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Unit Sales 0.14 0.14 0.14 0.14 0.14 0.15 0.15 0.16 0.17 0.18 0.19 0.20 0.19 0.19

Revenues 63.17 63.51 61.48 61.29 62.62 64.71 68.35 72.61 76.60 80.85 85.18 88.63 84.88 82.23

Cost of Sales

Labor 10.5% 6.60 6.64 6.43 6.41 6.55 6.76 7.14 7.59 8.01 8.45 8.90 9.26 8.87 8.60

Material 53.7% 33.90 34.09 32.99 32.90 33.61 34.73 36.69 38.97 41.11 43.39 45.72 47.57 45.56 44.13

Overhead 4.0% 2.53 2.54 2.46 2.45 2.51 2.59 2.74 2.91 3.07 3.24 3.41 3.55 3.40 3.29

Freight 9.7% 6.12 6.16 5.96 5.94 6.07 6.27 6.63 7.04 7.43 7.84 8.26 8.59 8.23 7.97

Depreciation 1.90% 1.20 1.21 1.17 1.16 1.19 1.23 1.30 1.38 1.46 1.54 1.62 1.68 1.61 1.56

Selling, General and Administrative

Standard SG&A 16.6% 10.46 10.51 10.18 10.14 10.37 10.71 11.31 12.02 12.68 13.38 14.10 14.67 14.05 13.61

R&D 1.0% 0.64 0.64 0.62 0.62 0.64 0.66 0.69 0.74 0.78 0.82 0.86 0.90 0.86 0.83

Product Conversion Expense - - - - - - - - - - - - - -

 -

Profit Before Tax 2.7% 1.71 1.72 1.67 1.66 1.70 1.75 1.85 1.97 2.08 2.19 2.31 2.40 2.30 2.23

One-time writeoff on stranded assets -

EBT as % of Revenues 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03

Taxes 37.9% 0.65 0.65 0.63 0.63 0.64 0.66 0.70 0.75 0.79 0.83 0.87 0.91 0.87 0.84

NOPAT 1.06 1.07 1.04 1.03 1.06 1.09 1.15 1.22 1.29 1.36 1.44 1.49 1.43 1.39

 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02

NOPAT 1.06 1.07 1.04 1.03 1.06 1.09 1.15 1.22 1.29 1.36 1.44 1.49 1.43 1.39

Depreciation 1.20 1.21 1.17 1.16 1.19 1.23 1.30 1.38 1.46 1.54 1.62 1.68 1.61 1.56

Change in Working Capital - (0.07) 0.45 0.04 (0.29) (0.46) (0.80) (0.94) (0.88) (0.93) (0.95) (0.76) 0.82 0.58

Income Statement (mln)

Cash Flow Statement 

Cash Flows from Operations 2.26 2.20 2.65 2.24 1.95 1.86 1.65 1.67 1.87 1.97 2.10 2.42 3.87 3.53

Ordinary Capital Expenditures (1.14) (1.14) (1.11) (1.10) (1.13) (1.16) (1.23) (1.31) (1.38) (1.46) (1.53) (1.60) (1.53) (1.48)

Conversion Capital Expenditures - - - - - - - - - - - - - -

Cash Used In Investment (1.14) (1.14) (1.11) (1.10) (1.13) (1.16) (1.23) (1.31) (1.38) (1.46) (1.53) (1.60) (1.53) (1.48)

Net Cash Flow 1.13 1.06 1.54 1.13 0.83 0.70 0.42 0.36 0.49 0.51 0.57 0.82 2.34 2.05

Terminal Value - - - - - - - - - - - - - -

Present Value Factor 1.11 1.05 1.00 0.95 0.90 0.86 0.82 0.78 0.74 0.71 0.67 0.64 0.61 0.58

Discounted Cash Flow 1.25 1.11 1.54 1.08 0.75 0.60 0.34 0.28 0.36 0.36 0.38 0.53 1.42 1.18

Industry Value thru 2038 $ 23

ROIC Calculation

Net Property Plant and Equipment 14.7% 9.32 9.25 9.19 9.13 9.07 9.00 8.93 8.86 8.78 8.70 8.62 8.53 8.44 8.36

Net Working Capital 13.87 13.95 13.50 13.46 13.75 14.21 15.01 15.95 16.82 17.75 18.70 19.46 18.64 18.06

Other Operating Assets, Net of other Liabilities - - - - - - - - - - - - - -

Operating Invested Capital (beginning of year) 23.19 23.20 22.69 22.59 22.82 23.21 23.94 24.81 25.60 26.46 27.32 27.99 27.08 26.42

Return on Invested Capital (ROIC) 4.77% 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05

Weighted Average Cost of Capital (WACC) 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05

Net PPE as % of Revenues 15% 0.15 0.15 0.15 0.15 0.14 0.14 0.13 0.12 0.11 0.11 0.10 0.10 0.10 0.10

Tolerance 3%
0900006480fa7774.xls

net PPE/Gross PPE 50%

Detailed Depreciation & Capex Calculation

Depreciation 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

1.90% Depre. on base-case PPE base $ 1.20 $ 1.21 $ 1.17 $ 1.16 $ 1.19 $ 1.23 $ 1.30 $ 1.38 $ 1.46 $ 1.54 $ 1.62 $ 1.68 $ - $ -

Depre. post-std $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ 1.61 $ 1.56

Total Depre $ 1.20 $ 1.21 $ 1.17 $ 1.16 $ 1.19 $ 1.23 $ 1.30 $ 1.38 $ 1.46 $ 1.54 $ 1.62 $ 1.68 $ 1.61 $ 1.56

1.90% 1.90% 1.90% 1.90% 1.90% 1.90% 1.90% 1.90% 1.90% 1.90% 1.90% 1.90% 1.90% 1.90%
0900006480fa7774.xls

Mobile Home Furnaces

STANDARD CASE SCENARIO

Unit Sales

Revenues

Cost of Sales

Labor 10.5%

Material 53.7%

Overhead 4.0%

Freight 9.7%

Depreciation 1.90%

Selling, General and Administrative

Standard SG&A 16.6%

R&D 1.0%

Product Conversion Expense

Profit Before Tax 2.7%

One-time writeoff on stranded assets

EBT as % of Revenues

Taxes 37.9%

NOPAT

NOPAT

Depreciation

Change in Working Capital

Income Statement (mln)

Cash Flow Statement 

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

 0.18 0.16 0.15 0.13 0.12 0.11 0.10 0.10 0.10 0.11 0.12 0.12 0.12 0.13

 77.37 72.51 66.32 59.24 53.94 48.19 45.54 45.09 45.98 48.63 50.84 52.61 54.38 55.26

 8.09 7.58 6.93 6.19 5.64 5.04 4.76 4.71 4.81 5.08 5.31 5.50 5.68 5.78

 41.52 38.91 35.59 31.80 28.95 25.86 24.44 24.20 24.68 26.10 27.29 28.24 29.19 29.66

 3.10 2.90 2.65 2.37 2.16 1.93 1.82 1.81 1.84 1.95 2.04 2.11 2.18 2.21

 7.50 7.03 6.43 5.74 5.23 4.67 4.41 4.37 4.46 4.71 4.93 5.10 5.27 5.36

 1.47 1.38 1.26 1.13 1.02 0.92 0.87 0.86 0.87 0.92 0.97 1.00 1.03 1.05

 12.81 12.00 10.98 9.81 8.93 7.98 7.54 7.46 7.61 8.05 8.42 8.71 9.00 9.15

 0.79 0.74 0.67 0.60 0.55 0.49 0.46 0.46 0.47 0.49 0.52 0.53 0.55 0.56

 - - - - - - - - - - - - - -

 2.10 1.97 1.80 1.61 1.46 1.31 1.23 1.22 1.25 1.32 1.38 1.43 1.47 1.50

 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03

 0.79 0.74 0.68 0.61 0.55 0.49 0.47 0.46 0.47 0.50 0.52 0.54 0.56 0.57

 1.30 1.22 1.12 1.00 0.91 0.81 0.77 0.76 0.77 0.82 0.86 0.89 0.92 0.93

 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02

 1.30 1.22 1.12 1.00 0.91 0.81 0.77 0.76 0.77 0.82 0.86 0.89 0.92 0.93

 1.47 1.38 1.26 1.13 1.02 0.92 0.87 0.86 0.87 0.92 0.97 1.00 1.03 1.05

 1.07 1.07 1.36 1.55 1.16 1.26 0.58 0.10 (0.19) (0.58) (0.49) (0.39) (0.39) (0.19)

Cash Flows from Operations

Ordinary Capital Expenditures

Conversion Capital Expenditures

Cash Used In Investment

Net Cash Flow

Terminal Value

Present Value Factor

Discounted Cash Flow

Industry Value thru 2038 $ 23

ROIC Calculation

Net Property Plant and Equipment 14.7%

Net Working Capital

Other Operating Assets, Net of other Liabilities

Operating Invested Capital (beginning of year)

Return on Invested Capital (ROIC) 4.77%

Weighted Average Cost of Capital (WACC)

Net PPE as % of Revenues 15%

Tolerance 3%

 3.84 3.67 3.74 3.68 3.10 2.99 2.22 1.71 1.45 1.16 1.34 1.50 1.56 1.79

 (1.39) (1.31) (1.19) (1.07) (0.97) (0.87) (0.82) (0.81) (0.83) (0.88) (0.92) (0.95) (0.98) (0.99)

 - - - - - - - - - - - - - -

 (1.39) (1.31) (1.19) (1.07) (0.97) (0.87) (0.82) (0.81) (0.83) (0.88) (0.92) (0.95) (0.98) (0.99)

 2.45 2.36 2.54 2.61 2.13 2.12 1.40 0.90 0.63 0.29 0.42 0.55 0.58 0.79

 - - - - - - - - - - - - - -

 0.55 0.52 0.50 0.47 0.45 0.43 0.41 0.39 0.37 0.35 0.33 0.32 0.30 0.29

 1.35 1.23 1.26 1.23 0.96 0.91 0.57 0.35 0.23 0.10 0.14 0.17 0.18 0.23

 8.29 8.21 8.15 8.09 8.03 7.99 7.94 7.89 7.85 7.80 7.75 7.70 7.64 7.59

 16.99 15.92 14.56 13.01 11.84 10.58 10.00 9.90 10.10 10.68 11.16 11.55 11.94 12.14

 - - - - - - - - - - - - - -

 25.27 24.13 22.71 21.10 19.88 18.57 17.94 17.80 17.94 18.48 18.91 19.25 19.58 19.72

 0.05 0.05 0.05 0.05 0.05 0.04 0.04 0.04 0.04 0.04 0.05 0.05 0.05 0.05

 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05

 0.11 0.11 0.12 0.14 0.15 0.17 0.17 0.18 0.17 0.16 0.15 0.15 0.14 0.14
0900006480fa7774.xls

net PPE/Gross PPE 50%

Detailed Depreciation & Capex Calculation

Depreciation

1.90% Depre. on base-case PPE base

Depre. post-std 

Total Depre

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -

$ 1.47 $ 1.38 $ 1.26 $ 1.13 $ 1.02 $ 0.92 $ 0.87 $ 0.86 $ 0.87 $ 0.92 $ 0.97 $ 1.00 $ 1.03 $ 1.05

$ 1.47 $ 1.38 $ 1.26 $ 1.13 $ 1.02 $ 0.92 $ 0.87 $ 0.86 $ 0.87 $ 0.92 $ 0.97 $ 1.00 $ 1.03 $ 1.05

1.90% 1.90% 1.90% 1.90% 1.90% 1.90% 1.90% 1.90% 1.90% 1.90% 1.90% 1.90% 1.90% 1.90%
0900006480fa7774.xls

Mobile Home Furnaces

STANDARD CASE SCENARIO

Unit Sales

Revenues

Cost of Sales

Labor 10.5%

Material 53.7%

Overhead 4.0%

Freight 9.7%

Depreciation 1.90%

Selling, General and Administrative

Standard SG&A 16.6%

R&D 1.0%

Product Conversion Expense

Profit Before Tax 2.7%

One-time writeoff on stranded assets

EBT as % of Revenues

Taxes 37.9%

NOPAT

NOPAT

Depreciation

Change in Working Capital

Income Statement (mln)

Cash Flow Statement 

2031 2032 2033 2034 2035 2036 2037 2038

 0.13 0.13 0.13 0.13 0.13 0.13 0.13 0.13 3.16

 56.15 56.59 56.59 57.03 57.03 57.03 57.03 57.03 $ 1,397

 5.87 5.92 5.92 5.96 5.96 5.96 5.96 5.96 $ 146

 30.13 30.37 30.37 30.61 30.61 30.61 30.61 30.61

 2.25 2.27 2.27 2.28 2.28 2.28 2.28 2.28

 5.44 5.49 5.49 5.53 5.53 5.53 5.53 5.53

 1.07 1.08 1.08 1.08 1.08 1.08 1.08 1.08

 9.29 9.37 9.37 9.44 9.44 9.44 9.44 9.44 x

 0.57 0.57 0.57 0.58 0.58 0.58 0.58 0.58 x

 - - - - - - - - x

x

 1.52 1.53 1.53 1.55 1.55 1.55 1.55 1.55 x

 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 x

x

 0.58 0.58 0.58 0.59 0.59 0.59 0.59 0.59 x

 0.95 0.95 0.95 0.96 0.96 0.96 0.96 0.96 x

 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 x

x

 0.95 0.95 0.95 0.96 0.96 0.96 0.96 0.96 x

 1.07 1.08 1.08 1.08 1.08 1.08 1.08 1.08 x

 (0.19) (0.10) - (0.10) - - - - x

Cash Flows from Operations

Ordinary Capital Expenditures

Conversion Capital Expenditures

Cash Used In Investment

Net Cash Flow

Terminal Value

Present Value Factor

Discounted Cash Flow

Industry Value thru 2038 $ 23

ROIC Calculation

Net Property Plant and Equipment 14.7%

Net Working Capital

Other Operating Assets, Net of other Liabilities

Operating Invested Capital (beginning of year)

Return on Invested Capital (ROIC) 4.77%

Weighted Average Cost of Capital (WACC)

Net PPE as % of Revenues 15%

Tolerance 3%

 1.82 1.93 2.03 1.95 2.04 2.04 2.04 2.04 x

x

 (1.01) (1.02) (1.02) (1.03) (1.03) (1.03) (1.03) (1.03) x

 - - - - - - - - x

 (1.01) (1.02) (1.02) (1.03) (1.03) (1.03) (1.03) (1.03) x

x

 0.81 0.91 1.01 0.92 1.02 1.02 1.02 1.02 x

 - - - - - - - 24.97 x

 0.27 0.26 0.25 0.24 0.22 0.21 0.20 0.19 x

 0.22 0.24 0.25 0.22 0.23 0.22 0.21 5.00 x

x

x

x

x

 7.53 7.47 7.42 7.36 7.30 7.25 7.19 7.13 x

 12.33 12.43 12.43 12.52 12.52 12.52 12.52 12.52 x

 - - - - - - - - x

 19.86 19.90 19.84 19.88 19.83 19.77 19.71 19.66 x

 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 x

 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 x

x

 0.13 0.13 0.13 0.13 0.13 0.13 0.13 0.13 x

x
0900006480fa7774.xls

net PPE/Gross PPE 50%

Detailed Depreciation & Capex Calculation

Depreciation

1.90% Depre. on base-case PPE base

Depre. post-std 

Total Depre

x

x

x

x

x

2031 2032 2033 2034 2035 2036 2037 2038

$ - $ - $ - $ - $ - $ - $ - $ - x

$ 1.07 $ 1.08 $ 1.08 $ 1.08 $ 1.08 $ 1.08 $ 1.08 $ 1.08 x

$ 1.07 $ 1.08 $ 1.08 $ 1.08 $ 1.08 $ 1.08 $ 1.08 $ 1.08 x

1.90% 1.90% 1.90% 1.90% 1.90% 1.90% 1.90% 1.90% x

x

x

x

x

x

x

x

x

x

x

x

x

x
Flat Markups, Revised NES, GAMA Low

75% AFUE Standard Pre-Regulation

(Base)

2015

Unit Shipments (000,000) 0.19

Price per unit (weighted avg.) $442

Total Revenues ($000,000) $85

Net Income Before Financing ($000,000) $1

Net Cash Flow (2016) ($000,000) $2

Industry Value thru 2038 ($000,000) $23

MAJOR ASSUMPTIONS

Manufacturing Costs

Materials per Unit $237

Labor per Unit $46

Overhead per Unit $18

Conversion Cost

Capital Expenditures ($000,000)

Product Conversion Costs ($000,000)

Total Conversion Costs ($000,000) $0

Summary Report for 

Mobile Home Furnaces

Change in Industry Value

Mobile Home Furnaces
Post-Regulation

(Standard)

2015

0.19

$442

$85

$1

$2

$23

$0

0%

$237

$46

$18

$0

$0

$0

Mobile Home Furnaces
0.10 

0.15 

0.20 

0.25 

millions

SHIPMENTS

MOBILE HOME FURNACES

0.00 

0.05 

2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029

Base 75% AFUE Standard 75% AFUE
40.00 

50.00 

60.00 

70.00 

80.00 

90.00 

100.00 

millions

REVENUE BY YEAR

MOBILE HOME FURNACES

0.00 

10.00 

20.00 

30.00 

2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029

Base 75% AFUE Standard 75% AFUE
3.0%

4.0%

5.0%

6.0%

R

OIC

RETURN ON INVESTED CAPITAL (ROIC)

MOBILE HOME FURNACES

0.0%

1.0%

2.0%

2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029

Base 75% AFUE Standard 75% AFUE
2.7%

%

Reven

ue

PROFIT BEFORE TAX

MOBILE HOME FURNACES

2.7%

2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029

Base 75% AFUE Standard 75% AFUE
0.6 

0.8 

1.0 

1.2 

1.4 

1.6 

1.8 

$ millions

CASH USED IN INVESTMENT

MOBILE HOME FURNACES

0.0 

0.2 

0.4 

0.6 

2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029

Base 75% AFUE Standard 75% AFUE
2.0 

2.5 

3.0 

3.5 

4.0 

4.5 

$ millions

OPERATING CASHFLOW TOTALS 

MOBILE HOME FURNACES

0.0 

0.5 

1.0 

1.5 

2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029

Base 75% AFUE Standard 75% AFUE
1.5 

2.0 

2.5 

3.0 

$ millions

NET CASH FLOW TOTALS

MOBILE HOME FURNACES

0.0 

0.5 

1.0 

2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029

Base 75% AFUE Standard 75% AFUE
10.0 

15.0 

20.0 

25.0 

$ millions

INDUSTRY VALUE (NPV)

MOBILE HOME FURNACES

0.0 

5.0 

10.0 

Base 75% AFUE Standard 75% AFUE
0.6 

0.8 

1.0 

1.2 

1.4 

1.6 

$ millions

INCOME AFTER TAX

MOBILE HOME FURNACES

0.0 

0.2 

0.4 

2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029

Base 75% AFUE Standard 75% AFUE
442.1 

442.1 

442.1 

$ millions

AVERAGE UNIT PRICE

MOBILE HOME FURNACES

442.1 

442.1 

2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029

Base 75% AFUE Standard 75% AFUE
MOBILE HOME FURNACES

Base 75% AFUE

NET CASH FLOW TOTALSMOBILE HOME FURNACES Net Cashflow

REVENUE BY YEARMOBILE HOME FURNACES Revenues

INCOME AFTER TAXMOBILE HOME FURNACES Income After Tax

SHIPMENTSMOBILE HOME FURNACES Shipments

AVERAGE UNIT PRICEMOBILE HOME FURNACES Avg Price

INDUSTRY VALUE (NPV)MOBILE HOME FURNACES Industry Value

CASH USED IN INVESTMENTMOBILE HOME FURNACES Investments

RETURN ON INVESTED CAPITAL (ROIC)MOBILE HOME FURNACROIC

OPERATING CASHFLOW TOTALS MOBILE HOME FURNACES Operating Cashflow

PROFIT BEFORE TAXMOBILE HOME FURNACES

Standard 75% AFUE

Net Cashflow

Revenues

Income After Tax

Shipments

Price

Industry Value

Investments

ROIC

Operating Cashflow
OME FURNACES

2003 2004 2005 2006 2007 2008 2009 2010 2011

$ 1 $ 1 $ 2 $ 1 $ 1 $ 1 $ 0 $ 0 $ 0

$ 63 $ 64 $ 61 $ 61 $ 63 $ 65 $ 68 $ 73 $ 77

$ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1

0.1 0.1 0.1 0.1 0.1 0.1 0.2 0.2 0.2

$ 442 $ 442 $ 442 $ 442 $ 442 $ 442 $ 442 $ 442 $ 442

$ 23

$ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1

5% 5% 5% 5% 5% 5% 5% 5% 5%

$ 2 $ 2 $ 3 $ 2 $ 2 $ 2 $ 2 $ 2 $ 2

$ 1 $ 1 $ 2 $ 1 $ 1 $ 1 $ 0 $ 0 $ 0

$ 63 $ 64 $ 61 $ 61 $ 63 $ 65 $ 68 $ 73 $ 77

$ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1

0.143 0.1 0.1 0.1 0.1 0.1 0.2 0.2 0.2

$ 442 $ 442 $ 442 $ 442 $ 442 $ 442 $ 442 $ 442 $ 442

$ 23

$ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1

5% 5% 5% 5% 5% 5% 5% 5% 5%

$ 2 $ 2 $ 3 $ 2 $ 2 $ 2 $ 2 $ 2 $ 2
2012 2013 2014 2015 2016 2017 2018 2019 2020

$ 1 $ 1 $ 1 $ 2 $ 2 $ 2 $ 2 $ 3 $ 3

$ 81 $ 85 $ 89 $ 85 $ 82 $ 77 $ 73 $ 66 $ 59

$ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1

0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.1

$ 442 $ 442 $ 442 $ 442 $ 442 $ 442 $ 442 $ 442 $ 442

$ 1 $ 2 $ 2 $ 2 $ 1 $ 1 $ 1 $ 1 $ 1

5% 5% 5% 5% 5% 5% 5% 5% 5%

$ 2 $ 2 $ 2 $ 4 $ 4 $ 4 $ 4 $ 4 $ 4

$ 1 $ 1 $ 1 $ 2 $ 2 $ 2 $ 2 $ 3 $ 3

$ 81 $ 85 $ 89 $ 85 $ 82 $ 77 $ 73 $ 66 $ 59

$ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1

0.2 0.2 0.2 0.192 0.2 0.2 0.2 0.2 0.134

$ 442 $ 442 $ 442 $ 442 $ 442 $ 442 $ 442 $ 442 $ 442

$ 1 $ 2 $ 2 $ 2 $ 1 $ 1 $ 1 $ 1 $ 1

5% 5% 5% 5% 5% 5% 5% 5% 5%

$ 2 $ 2 $ 2 $ 4 $ 4 $ 4 $ 4 $ 4 $ 4
2021 2022 2023 2024 2025 2026 2027 2028 2029

$ 2 $ 2 $ 1 $ 1 $ 1 $ 0 $ 0 $ 1 $ 1

$ 54 $ 48 $ 46 $ 45 $ 46 $ 49 $ 51 $ 53 $ 54

$ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1

0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1

$ 442 $ 442 $ 442 $ 442 $ 442 $ 442 $ 442 $ 442 $ 442

$ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1

5% 4% 4% 4% 4% 4% 5% 5% 5%

$ 3 $ 3 $ 2 $ 2 $ 1 $ 1 $ 1 $ 1 $ 2

$ 2 $ 2 $ 1 $ 1 $ 1 $ 0 $ 0 $ 1 $ 1

$ 54 $ 48 $ 46 $ 45 $ 46 $ 49 $ 51 $ 53 $ 54

$ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1

0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1

$ 442 $ 442 $ 442 $ 442 $ 442 $ 442 $ 442 $ 442 $ 442

$ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1 $ 1

5% 4% 4% 4% 4% 4% 5% 5% 5%

$ 3 $ 3 $ 2 $ 2 $ 1 $ 1 $ 1 $ 1 $ 2
2030

$ 1

$ 55

$ 1

0.1

$ 442

$ 1

5%

$ 2

$ 1

$ 55

$ 1

0.1

$ 442

$ 1

5%

$ 2