Government Regulatc^

Ballast Manufacturer Impact

Analysis

DOE Workshop

April 28, 1998 U.S. Department of Energy

Office of Energy Efficiency

and Renewable Energy

1000 Independence Avenue, SW

Washington, DC 20585

EE-RM-97-500 COMMENT 20I

Government Regulatory Impact Model (GRIM) 

Ballast Manufacturer Impact 

Analysis 

DOE Workshop 

April 28, 1998 U.S. Department of Energy 

Office of Energy Efficiency 

and Renewable Energy 

1000 Independence Avenue, SW 

Washington, DC 20585 
ARTHUR D. LITTLE, INC.

Acorn Park

Cambridge, Massachusetts

02140-2390

Because software is inherently complex and may not

be completely free of errors, you are advised to verify

your work. In no event will Arthur D. Little 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.

Government

Regulatory Impact

Model

Draft - Under Development -Ballastl.x Is

April 28, 1998

Modified to account for Electronic Ballasts

EE-RM-97-500 COMMENT 20I
Government Regulatory

Impact Model

Assumptions Page for

1, 111 orescent Lamp Ballasts

Scenario Description

Base Year

Announcement Year

Standard Year

Tax Rate

Discount Rate for NPV

Inflation Rate

Working Capital

Standard SG&A

Research and Development

Ordinary Depreciation

Ordinary Capital Expenditures

Conversion Costs

Design & Marketing Expenses

Capital Investment per Electronic Ballast

Amortization Period

Fluorescent Lamp Ballasts

1998

1999

2002

37.2%

8.0%

0.0%

16.4%

15.9%

1.8%

2.9%

-3.4%

Beginning year for analytical purposes

Year in which the regulation announcement is made

Year in which the regulation takes effect

TBD - The Dept. will seek additional information

per annum

of Revenue

of Revenue

of Revenue

of Revenue

of Revenue

0.5

($000,000)

10

4/28/98 Major Assumptions GRIM_Ballast2.XLS

EE-RM-97-500 COMMENT 20I

Scenario Description 

Base Year 

Announcement Year 

Standard Year 

Tax Rate 

Discount Rate for NPV 

Inflation Rate 

Working Capital 

1 

Standard SG&A 

Research and Development 

Ordinary Depreciation 

Ordinary 1 Capital Expenditures 

Conversion Costs 

Design & Marketing Expenses 

Capital Investment per Electronic Ballast 

Amortization Period 

4/28/98 

Government Regulatory 

Impact Model 

Assumptions Page for 

Fluorescent Lamp Ballasts 

Fluorescent Lamp Ballasts 

1998 Beginning year for analytical purposes 

1999 Year in which the regulation announcement is made 

2002 Year in which the regulation takes effect 

37.2% 

8.0% TBD - The Dept. will seek additional information 

0.0% per annum 

16.4% of Revenue 

15.9%IOf Revenue 

1.8% of Revenue 

2.9%IOf Revenue 

-3.4% of Revenue 

§($Ooo,Ooo) 

0.5 { . 

10 

Major Assumptions GRIM_Ballast2.XLS 
SHIPMENT SCENARIO

Baseline Case

(Magnetic Ballast Sales)

0

1998 2000 2002 2004 2006 2008 2010 2012

Baseline Case

(Electronic Ballast Sales)

35

30

-o 1 F40T12 25

-D-- 2F40T12 20

-*- 2F96T12 15

- 2F96T12H0 10

5

0

Std. Year

Standards Case

(Magnetic Ballast Sales)

1998 2000 2002 2004 2006 2008 2010 2012

35- 35

1F40T12

30- 30

2F40T12

25 25

3F40T12

20 20

4F40T12

15 15

10 2F96T12 10

5

2F96T12H0 5

0

0

1998 2000 2002 2004 2006 2008 2010 2012

Std. Year

Standards Case

(Electronic Ballast Sales)

1998 2000 2002 2004 2006 2008 2010

-4-1 F40T12

2F40T12

-s<- 2F96T12

--*- 2F96T12H0

-®-1 F40T12

2F40T12

-^- 3F40T12

^E-- 4F40T12

-e- 2F96T12

- 2F96T12H0

EE-RM-97-500 COMMENT 20I

SHIPMENT SCENARIO 

25 

20 

15 

10 

5 

o 

1998 

35 

30 

25 

20 

15 

10 

5 

0 

1998 

2000 

2000 

2002 

2002 

Baseline Case 

(Magnetic Ballast Sales) 

2004 2006 2008 

Baseline Case 

(Electronic Ballast Sales) 

2004 2006 2008 

2010 2012 

2010 2012 

-+-1F40T12 

__ 2F40T12 

--.lk-2F96T12 

-7f- 2F96T12HO 

1F40T12 

2F40T12 

3F40T12 

4F40T12 

2F96T12 

2F96T12HO 

SId. Vear 

35 

30 

25 

20 

15 

10 

5 

0 

1998 2000 2002 

SId. Ve.r 

35 

30 

25 

20 

15 

10 

5 

0 

1998 2000 2002 

Standards Case 

(Magnetic Ballast Sales) 

2004 2006 2008 

Standards Case 

(Electronic Ballast Sales) 

2004 2006 2008 

2010 2012 

2010 2012 

-+-1F40T12 

__ 2F40T12 

--.lk-2F96T12 

-~- 2F96T12HO 

-+-1F40T12 

__ 2F40T12 

--.lk-3F40T12 

··K··4F40T12 

--G- 2F96T12 

-2F96T12HO 
Inputs-Base Case

BASE CASE SCENARIO

Magnetic Ballasts Electronic Ballasts Shipment

Base Year 1998 Default Value IF411TI2 2F40T12 2F96C12 2F96T12H0 Default Value 1F40'T12 2F40T12 3F40T12 4F40T32 2F96T12 ZF96T12HO wei hted avg.

Price/Unit ($) (from CIR) 7.26 5.80 10.56 14.54 (from CIR) 15.76 15.76 15,76 15.76 22.03 33.78 $6:89

Unit Sales (millions) (from NESS) 2.20 23.00 6.00 0.30 (from NESS) 0.00 0.00 0.00 0.00 0.00 0.00 31.50

Unit Sales (millions) (Mont facnrrer)

Cost of Sales ($) (% OfPrice/Unit) (% OfPrice/Untr)

Labor/Unit 11.20% 0.81 0.65 1.18 1.63 11.20% 1.77 1.77 1.77 1.77 2.47 3.78 $0.77

Material/Unit 53.70% 3.90 3.11 5.67 7.81 53.70% 8.46 8.46 8.46 8.46 11.83 18.14 $3.70

Overhead/Unit 8.20% 0.60 0.48 0.87 1.19 8.20% 1.29 1.29 1.29 1.29 1.81 2.77 $0.57

* NESS: National Energy Savings Spreadsheet (developed by LBNL) - NESS is under development. These values are preliminary ".

Ma eticBallasts Electronic Ballasts Shipment

1999 1)rfnult V'nlue 1F40T12 2F40T12 2F96T12 2F96T12H0 l)ufault VsIuc 1F40T12 2F40T12 3F40T12 4F40T12 2F96T12 2F06T12U0 weighted avg.

Price/Unit ($) (from CIR) 7.26 5.80 10.56 14.54 (from CJR) 15.76 15.76 15.76 15.76 22.03 33.78 $6.89

Unit Sales (millions) (from NESS) 2.20 23.00 6.00 0.30 (from NESS) 0.00 0.00 0.00 0.00 0.00 0.00 31.50

Cost of Sales ($) (% ofPrfcelunit) (% OfPrice/Unit)

Labor/Unit 11.20% 0.81 0.65 1.18 1.63 11.20% 1.77 1.77 1.77 1.77 2.47 3.78 $0.77

Material/Unit 53.70% 3.90 3.11 5.67 7.81 53.70% 8.46 8.46 8.46 8.46 11.83 18.14 $3.70

Overhead/Unit 8.20% 0.60 0.48 0.87 1.19 8.20% 1.29 1.29 1.29 1.29 1.81 2.77 $0.57

Magnetic Ballasts Electronic Ballasts Shipment

2000 Default Value 1F40T12 2F40T12 2F96C12 2F96T12H0 Default Value 1F40T12 2F40T12 3F40T12 4F40T12 2F96T12 2F06T12H0 weighted avg.

Price/Unit ($) (from CIR) 7.26 5.80 10.56 14.54 (from CIR) 15.76 15.76 15.76 15.76 22.03 33. 78 $6.89

Unit Sales (millions) (from NESS) 2.20 23.00 6.00 0.30 (from NESS) 0.00 0.00 0.00 0.00 0.00 0.00 31.50

Cost of Sales ($) (% OfPrice/Unit) (% OfPrice/Unit)

Labor/Unit 11.20% 0.81 0.65 1.18 1.63 11.20% 1.77 1.77 1.77 1.77 2.47 3.78 $0.77

Material/Unit 53.70% 3.90 3.11 5.67 7.81 53.70% 8,46 8.46 8.46 8.46 11.83 18.14 $3.70

Overhead/Unit 8.20% 0.60 0.48 0.87 1.19 8.20% 1.29 1.29 1.29 1.29 1.81 2.77 $0.57

Ma eticBallasts FlcctronicBallast s Shipment

20{11 Default Value 1F40T12 2F411T12 2F96T12 2F96T12H0 Default Value 1F40T12 2F4t1T12 3F40T12 4F40T12 2F96T12 2F96T12H0 weigh I ena_tis.

Price/Unit ($) (from CIR) 7.26 5.80 10.56 14.54 (from CIR) 15.76 15:70 15.76 15.76 ` 22.03 33. 78 $6.89

Unit Sales (millions) (from NESS) 2.20 23.00 6.00 0.30 (from NESS) 0.00 0.00 0.00 0.00 0.00 0.00 31.50

Cost of Sales ($) (% Ofpnce/Unit) (% OfPrice bolt)

Labor/Unit 11.20% 0.81 0.65 1.18 1.63 11.20% 1.77 1.77 1.77 1.77 2.47 3.78 $0.77

Material/Unit 53.70% 3.90 3.11 5.67 7.81 53.70% 8.46 8.46 8.46 8.46 11.83 18.14 $3.70

Overhead/Unit 8.20% 0.60 0.48 0.87 1.19 8.20% 1.29 1.29 1.29 1.29 1.81 2.77 $0.57

Magnetic Ballasts Elc-etrrmieBallasts Shipment

Std. Year 2002 Default Value 1F40T12 2F40T12 2F96T12 2F96T12H0 Default Value IF40T12 2F40T12 I 3F40T12 4F40T12 2F96T12 2F96T12H0 wet hted avg.

Price/Unit ($) (from CIR) 7.26 5.80 10.56 14.54 (from CIR) 15.76 15.76 15.76 15.76 22.03 33.78 $6.89

Unit Sales (millions) (from NESS) 2.20 23.00 6.00 0.30 (from NESS) 0.00 0.00 0.00 0.00 0.00 0.00 31.50

Cost of Sales ($) (% Of Pnce/Unis (% OfPrice/Unit)

Labor/Unit 11.20% 0.81 0.65 1.18 1.63 11.20% 1.77 1.77 1.77 1.77 2.47 3.78 $0.77

Material/Unit 53.70% 3.90 3.11 5.67 7.81 53.70% 8.46 8.46 8.46 8.46 11.83 18.14 $3.70

Overhead/Unit 8.20% 0.60 0.48 0.87 1.19 8.20% 1,29 1.29 1.29 1.29 1.81 2.77 $0.57

Page i

EE-RM-97-500 COMMENT 20I

Inputs-Base Case 

Page 1 
Inputs-Std. Case

STANDARD CASE SCENARIO

Magnetic Ballasts Electronic Ballasts Shipment

Base Year 1998 Default Value 1F40'f12 2F40TI2 2F96T12 2F96T12H0 Default Value IF40TI2 2F40T12 3F40T12 4F40T12 2F96TI2 2F96T12H0 wei kited av .

PricelUnit ($) (front CIR) 7.26 5.80 10,56 14.54 (from CIR) 15.76 15.76 15.76 15.76 22.03 33.78 $6.89

Unit Sales (millions) (front NESS) 2.20 23.00 6.00 0.30 (from NESS) 0.00 0.00 0:00 0.00 0.00 0.00 31.50

Unit Sales (millions) (Mmmfacturer)

Cost of Sales ($) (% OfPricelUnit) (% OfPrice/Unit)

Labor/Unit 11.20% 0.81 0.65 1.18 1.63 11.20% 1.77 1.77 1.77 1.77 2.47 3.78 $0.77

Material/Unit 53.70% 3.90 3.11 5.67 7.81 53.70% 8.46 8.46 8.46 8.46 11.83 18.14 $3.70

Overhead/Unit 8.20% 0.60 0.48 0.87 1.19 8.20% 1.29 1.29 1.29 1.29 1.81 2.77 $0.57

Magnetic Ballasts I I,,trnnic Ballasts Shipment

1999 Default Valet 1140T12 2F40T12 2F96T12 2F96T12H0 Default Value 1F40T12 2F40T1< [ 3140 T-1-2 41 0TQ 2F967 11 ; 2F06112HO wei kited avg

Price/Unit ($) (front CIR) 7.26 5.80 10.56 14.54 (from CIR) 15.76 15.76 15.76 15.76 22.03 33. 78

.

$6.89

Unit Sales (millions) (from NESS) 2.20 23.00 6.00 0.30 (from NESS) 0.00 0.00 0.00 0.00 0.00 0.00 31.50

Cost of Sales ($) (%OfPricelUnit) (% OfPricelUnit)

Labor/Unit 11.20% 0.81 0.65 1.18 1.63 11.20% 1.77 1.77 1.77 1.77 2.47 3.78 $0.77

Material/Unit 53.70% 3.90 3.11 5.67 7.81 53.70% 8.46 8.46 8.46 8.46 11,83 18.14 $3.70

Overhead/Unit 8.20% 0.60 0.48 0.87 1.19 8.20% 1.29 1.29 1.29 1.29 1.81 2.77 $0.57

Magnetic Ballasts Electronic Ballasts Srt^ipmuut

2000 Default Value IF40T12 2F40T12 2F96T12 2F96T12H0 Default Value IF40T12 2F40TI2 3F40T12 4F40T12 2F96T12 2F96T12110 wei kited av

Price/Unit ($) (from CIR) 7.26 5.80 10.56 14.54 (from CIR) 15.76 15.76 15.76 1 , 15.76 22.03 33.78

g.

$6.89

Unit Sales (millions) (from NESS) 2.20 23.00 6.00 0.30 (from NESS) 0.00 0.00 0.00 0.00 0.00 0.00 31.50

Cost of Sales ($) (%Of PricelUnit (% Of Price/Unit)

Labor/Unit 11.20% 0.81 0.65 1.18 1.63 11.20% 1.77 1.77 1.77 1.77 2.47 3.78 $0.77

Material/Unit 53.70% 3.90 3.11 5.67 7.81 53.70% 8.46 8.46 8.46 8.46 11.83 18.14 $3.70

Overhead/Unit 8.209/, 0.60 0.48 0.87 1.19 8.20% 1.29 1.29 1.29 1.29 1.81 2.77 $0.57

Magnetic Ballau, II e ctrnuic Ballasts 5hipmrnc

2001 Uefault Value IF40T12 2F40T12 2F96T12 2F9sT12H0 DefaultValue IF40TI2 2F40T12 31,40T12 4F40T12 2F96T12 2F96T12130 wei htea ut/.

Price/Unit ($) (front CIR) 7.26 5.80 10.56 14.54 (front CIR) 15.76 15.76 15.76 15.76 22.03 33. 78 $6.89

Unit Sales (millions) (front NESS) 2.20 23.00 6.00 0.30 (from NESS) 0.00 0.00 0.00 0.00 0.00 0.00 31.50

Cost of Sales ($) (%OfPrice/Unit) (%gPricelUnit)

Labor(Unit 11.20% 0.81 0.65 1.18 1.63 11.20% 1.77 1.77 1.77 1.77 2.47 3.78 $0.77

Material/Unit 53.70% 3.90 3.11 5.67 7.81 53.70% 8.46 8.46 8.46 8.46 11.83 18.14 $3.70

Overhead/Unit 8.20% 0.60 0.48 0.87 1.19 8.20% 1.29 1.29 1.29 1.29 1.81 2.77 $0.57

Magnetic Ballasts Electronic Ballasts Sitipntcut

Std. Year 2002 Default Value 1F40T12 2F40T)2 2F96T12 2F96T12H0 Default Value 1F40TI2 2F40T12 3F40T12 4F40TI2 2F96T12 2F96T12H0 weiihtc l avg.

Price/Unit ($) (front CIR) 7.26 5.80 10.56 14.54 (front CIR) 15.76 15.76 15.76 15.76 22.03 33.78 $17.54

Unit Sales (millions) (front NESS) 0.00 0.00 0.00 0.00 (from NESS) 1.17 8.74 1.92 6.10 6.00 0.30 24.22 Cost of Sales ($) (%Of )"ice/Unit) (% Of Price/Unit)

LaborfUnit 11.20% 0.81 0.65 1.18 1.63 11.20% 1.77 1.77 1.77 1.77 2.47 3.78 $1.96

Material/Unit 53.70% 3.90 3.11 5.67 7.81 53.70% 8.46 8.46 8.46 8.46 11.83 18 .14 $9.42

Overhead/Unit 8.20% 0.60 0.48 0.87 1.19 8.20% 1.29 1.29 1.29 1.29 1.81 2.77 $1.44

Page I

EE-RM-97-500 COMMENT 20I

Inputs-Std. Case 

Page 1 
Government Regulatory

Impact Model

Fluorescent Lamp Ballasts

BASE CASE SCENARIO Base Year

1998

Income Statement

Price/Unit 6.89

Unit Sales 31.50

Revenues 217.1

Cost of Sales

Labor 24.3

Material 116.6

Overhead 17.8

Depreciation 6.3

Selling, General and Administrative

Standard SG&A 34.5

R&D 3.8

Product Conversion Expense

(Electronic Ballast)

Profit Before Tax 13.8

Taxes 5.1

Net Income Before Financing 8.7

Cash Flow Statement

Net Income 8.7

Depreciation 6.3

Change in Working Capital

Cash Flows from Operations 15.0

Ordinary Capital Expenditures (7.4)

Conversion Capital Expenditures

Cash Used In Investment (7.4)

Net Cash Flow 7.6

Terminal Value

Present Value Factor 1.0000

Discounted Cash Flow 7.6

Industry Value (Net Present Value) $ 102.2

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

6.89 6.89 6.89 6.89 6.89 6.89 6.89 6.89 6.89 6.89 6.89 6.89 6.89 6.89

31.50 31.50 31.50 31.50 31.50 31.50 31.50 31.50 31.50 31,50 31.50 31.50 31.50 31.50

217.1 217.1 217.1 217.1 217.1 217.1 217.1 217.1 217.1 217.1 217.1 217.1 217.1 217.1

24.3 24.3 24.3 24.3 24.3 24.3 24.3 24.3 24.3 24.3 24.3 24.3 24.3 24.3

116.6 116.6 116.6 116.6 116.6 116.6 116.6 116.6 116.6 116.6 116.6 116.6 116.6 116.6

17.8 17.8 17.8 17.8 17.8 17.8 17.8 17.8 17.8 17.8 17.8 17.8 17.8 17.8

6.3 6.3 6.3 6.3 6.3 6.3 6.3 6.3 6.3 6.3 6.3 6.3 6.3 6.3

34.5 34.5 34.5 34.5 34.5 34.5 34.5 34.5 34.5 34.5 34.5 34.5 34.5 34.5

3.8 3.8 3.8 3.8 3.8 3.8 3.8 3.8 3.8 3.8 3.8 3.8 3.8 3.8

13.8 13.8 13.8 13.8 13.8 13.8 13.8 13.8 13.8 13.8 13.8 13.8 13.8 13.8

5.1 5.1 5.1 5.1 5.1 5.1 5.1 5.1 5.1 5.1 5.1 5.1 5.1 5.1

8.7 8.7 8.7 8.7 8.7 8.7 8.7 8.7 8.7 8.7 8.7 8.7 8.7 8.7

8.7 8.7 8.7 8.7 8.7 8.7 8.7 8.7 8.7 8.7 8.7 8.7 8.7 8.7

6.3 6.3 6.3 6.3 6.3 6.3 6.3 6.3 6.3 6.3 6.3 6.3 6.3 6.3

15.0 15.0 15.0 15.0 15.0 15.0 15.0 15.0 15.0 15.0 15.0 15.0 15.0 15.0

(7.4) (7.4) (7.4) (7.4) (7.4) (7.4) (7.4) (7.4) (7.4) (7.4) (7.4) (7.4) (7.4) (7.4)

(7.4) (7.4) (7.4) (7.4) (7.4) (7.4) (7.4) (7.4) (7.4) (7.4) (7.4) (7.4) (7.4) (7.4)

7.6 7.6 7.6 7.6 7.6 7.6 7.6 7.6 7.6 7.6 7.6 7.6 7.6 7.6

94.6

0.9259 0.8573 . 0.7938 0.7350 0.6806 0.6302 0.5835 0.5403 0.5002 0.4632 0.4289 0.3971 0.3677 0.3405

7.0 6.5 6.0 5.6 5.2 4.8 4.4 4.1 3.8 3.5 31 3.0 2.8 34.8

4/28/98 BaseCase GRIM_Ballast2.XLS

EE-RM-97-500 COMMENT 20I

Government Regulatory 

Impact Model 

Fluorescent Lamp Ballasts 

BASE CASE SCENARIO Base Year 

1998 1999 2000 2001 2002 2003 2004 200S 2006 2007 2008 2009 2010 2011 2012 

PricelUnit 

Unit Sales 

Revenues 

Cost of Sales 

Labor 24.3 24.3 24.3 24.3 24.3 24.3 24.3 24.3 24.3 24.3 24.3 24.3 24.3 24.3 24.3 

Material 116.6 116.6 116.6 116.6 116.6 116.6 116.6 116.6 116.6 116.6 116.6 116.6 116.6 116.6 116.6 

Overhead 17.8 17.8 17.8 17.8 17.8 17.8 17.8 17.8 17.8 17.8 17.8 17.8 17.8 17.8 17.8 

Depredation 6.3 6.3 6.3 6.3 6.3 6.3 6.3 6.3 6.3 6.3 6.3 6.3 6.3 6.3 6.3 

Selling, General and Administrative 

Standard SG&A 34.S 34.5 34.5 34.S 34.5 34.5 34.5 34.5 34.S 34.5 34.5 34.5 34.5 34.5 34.S 

R&D 3.8 3.8 3.8 3.8 3.8 3.8 3.8 3.8 3.8 3.8 3.8 3.8 3.8 3.8 3.8 

Product Conversion Expense 

(Electronic Ballast) 

Profit Before Tax 13.8 13.8 13.8 13.8 13.8 13.8 13.8 13.8 13.8 13.8 13.8 13.8 13.8 13.8 13.8 

Taxes S.I S.I S.I S.I S.I S.I S.I S.I S.I S.I S.I S.I S.I S.I S.I 

Net Income Before Financing 8.7 8.7 8.7 8.7 8.7 8.7 8.7 8.7 8.7 8.7 8.7 8.7 8.7 8.7 8.7 

l~if~:!£{{>'~;ji!)i~IFlllWiSfil~n~l?~'iiljgP!i~<lifl!~J Net Income 8.7 8.7 8.7 8.7 8.7 8.7 8.7 8.7 8.7 8.7 8.7 8.7 8.7 8.7 8.7 

Depreciation 6.3 6.3 6.3 6.3 6.3 6.3 6.3 6.3 6.3 6.3 6.3 6.3 6.3 6.3 6.3 

Change in Working Capital 

Cash Flows from Operations IS.O IS.0 IS.O IS.O IS.O IS.O IS.O IS.O IS.O IS.O IS.O IS.O IS.O IS.O IS.O 

Ordinary Capital Expenditures (7.4) (7.4) (7.4) (7.4) (7.4) (7.4) (7.4) (7.4) (7.4) (7.4) (7.4) (7.4) (7.4) (7.4) (7.4) 

Conversion Capital Expenditures 

Cash Used In Investmenl (7.4) (7.4) (7.4) (7.4) (7.4) (7.4) (7.4) (7.4) (7.4) (7.4) (7.4) (7.4) (7.4) (7.4) (7.4) 

Net Cash Flow 7.6 7.6 7.6 7.6 7.6 7.6 7.6 7.6 7.6 7.6 7.6 7.6 7.6 7.6 7.6 

Terminal Value 94.6 

Present Value Factor 1.0000 0.92S9 0.8S73 0.7938 0.73S0 0.6806 0.6302 0.583S 0.5403 0.5002 0.4632 0.4289 0.3971 0.3677 0.340S 

Discounted Cash Flow 7.6 7.0 6.5 6.0 S.6 S.2 4.8 4.4 4.1 3.8 3.5 3.2 3.0 2.8 34.8 

Industry Value (Net Present Value) $ 102.2 

4/28198 Base Case GRIM_Ballast2XLS 
Government Regulatory

Impact Model

Fluorescent Lamp Ballasts

STANDARD CASE SCENARIO Base Year

1998

PricelUnit 6.89

Unit Sales 31.50

Revenues 217.1

Cost of Sales

Labor 24.3

Material 116.6

Overhead 17.8

Depreciation 6.3

Selling, General and Administrative

Standard SG&A 34.5

R&D 3.8

Product Conversion Expense

(Electronic Ballast)

Profit Before Tax 13.8

Taxes 5.1

Net Income Before Financing 8.7

Cash flow Statement

Net Income 8.7

Depreciation 6.3

Change in Working Capital -

Cash Flows from Operations 15.0

Ordinary Capital Expenditures (7.4)

Conversion Capital Expenditures -

Cash Used In Investment (7.4)

Net Cash Flow 7.6

Terminal Value

Present Value Factor 1.0000

Discounted Cash Flow 7.6

Industry Value (Net Present Value) $ 24.0

Announce

year Standard Year

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 ' 2010 2011 2012

6.89 6.89 6.89 17.54 17.54 1T.54 17.54 17.54 17.54 17.54 17.54 17.54 17.54 17.54

31.50 31.50 31.50 24.22 24.22 24.22 24.22 24.22 24.22 24.22 24.22 24.22 24.22 24.22

217.1 217.1 217.1 424.7 424.7 424.7 424.7 424.7 424.7 424.7 424.7 424.7 424.7 424.7

24.3 24.3 24.3 47.6 47.6 47.6 47.6 47.6 47.6 47.6 47.6 47.6 47.6 47.6

116.6 116.6 116.6 228.1 228.1 228.1 228.1 228.1 228.1 228.1 228.1 228.1 228.1 228.1

17.8 17.8 17.8 34.8 34.8 34.8 34.8 34.8 34.8 34.8 34.8 34.8 34.8 34.8

6.3 6.3 6.3 12.3 12.3 12.3 12.3 12.3 12.3 12.3 12.3 12.3 12.3 12.3

34.5 34.5 34.5 67.5 67.5 67.5 67.5 67.5 67.5 67.5 67.5 67.5 67.5 67.5

3.8 3.8 3.8 7.4 7.4 7.4 7.4 7.4 7.4 7.4 7.4 7.4 7.4 7.4

13.8 13.8 13.8 27.0 27.0 27.0 27.0 27.0 27.0 27.0 27.0 27.0 27.0 27.0

5.1 5.1 5.1 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0

8.7 8.7 8.7 16.9 16.9 16.9 16.9 16.9 16.9 16.9 16.9 16.9 16.9 16.9

8.7 8.7 8.7 16.9 16.9 16.9 16.9 16.9 16.9 16.9 16.9 16.9 16.9 16.9

6.3 6.3 6.3 12.3 12.3 12.3 12.3 12.3 12.3 12.3 12.3 12.3 12.3 12.3

- - - (34.0) - - - - - - - - - -

15.0 15.0 15.0 (4.8) 29.3 29.3 29.3 29.3 29.3 29.3 29.3 29.3 29.3 29.3

(7.4) (7.4) (7.4) (14.4) (14.4) (14.4) (14.4) (14.4) (14.4) (14.4) (14.4) (14.4) (14.4) (14.4)

- - (157.5) - - - - - - - - -

(7.4) (7.4) (164.9) (14.4) (14.4) (14.4) (14.4) (14.4) (14.4) (14.4) (14.4) (14.4) (14.4) (14.4)

7.6 7.6 (149.9) (19.2) 14.8 14.8 14.8 14.8 14.8 14.8 14.8 14.8 14.8 14.8

185.2

0.9259 0.8573 . 0.7938 0.7350 0.6806 0.6302 0.5835 0.5403 0.5002 0.4632 0.4289 0.3971 0.3677 0.3405

7.0 6.5 (119.0) (14.1) 10.1 9.3 8.6 8.0 7.4 6.9 6.4 5.9 5.4 68.1

4/2&98 Standard Case GRIM Batlast2.XLS

EE-RM-97-500 COMMENT 20I

Government Regulatory 

Impact Model 

Fluorescent L.m~ Ballasts 

Announce 

STANDARD CASE SCENARIO Base Year Year Standard Year 

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 . 2008 2C()9 2010 2011 2012 

11tf%$'~~~~~i~i}{;J;t:~s.a~~~~~W:0{~~S~~Q~1 

PriceiUnit 17.54 17.54 17.54 17.54 17.54 

Unit Sales 24.22 24.22 24.22 24.22 24.22 

Revenues 424.7 424.7 424.7 424.7 424.7 

Cost of Sales 

Labor 24.3 24.3 24.3 24.3 47.6 47.6 47.6 47.6 47.6 47.6 47.6 47.6 47.6 47.6 47.6 

Material 116.6 116.6 116.6 116.6 228.1 228.1 228.1 228.1 228.1 228) 228.1 228.1 228.1 228.1 228.1 

Overhead 17.8 17.8 17.8 17.8 34.8 34.8 34.8 34.8 34.8 34.8 34.8 34.8 34.8 34.8 34.8 

Depreciation 6.3 6.3 6.3 6.3 12.3 12.3 12.3 12.3 12.3 12.3 12.3 12.3 12.3 12.3 12.3 

Selling, General and Administrative 

Standard SG&A 34.5 34.5 34.5 34.5 67.5 67.5 67.5 67.5 67.5 67.5 67.5 67.5 67.5 67.5 67.5 

R&D 3.8 3.8 3.8 3.8 7.4 7.4 7.4 7.4 7.4 7.4 7.4 7.4 7.4 7.4 7.4 

Product Conversion Expense 

(Electronic Ballast) 

Profit Before Tax 13.8 13.8 13.8 13.8 27.0 27.0 27.0 27.0 27.0 27.0 27.0 27.0 27.0 27.0 27.0 

Taxes 5.1 5.1 5.1 5.1 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 

Net Income Before Financing 8.7 8.7 8.7 8.7 16.9 16.9 16.9 16.9 16.9 16.9 16.9 16.9 16.9 16.9 16.9 

1~i\;$i"~.~1IIOW"$Iil~f;73!Y~a\\!I~'l!rl -Net Income 8.7 8.7 8.7 8.7 16.9 16.9 16.9 16.9 16.9 16.9 16.9 16.9 16.9 16.9 16.9 

Depreciation 6.3 6.3 6.3 6.3 12.3 12.3 12.3 12.3 12.3 12.3 12.3 12.3 12.3 12.3 12.3 

Change in Working Cafital (34.0) 

Cash F10ws from Operations 15.0 15.0 15.0 15.0 (4.8) 29.3 29.3 29.3 29.3 29.3 29.3 29.3 29.3 29.3 29.3 

Ordinary Capital Expenditures (7.4) (7.4) (7.4) (7.4) (14.4) (14.4) (14.4) (14.4) (14.4) (14.4) (14.4) (14.4) (14.4) (14.4) (14.4) 

Conversion Capital Expenditures (157.5) 

Cash Used In Investment (7.4) (7.4) (7.4) (164.9) (14.4) (14.4) (14.4) (14.4) (14.4) (14.4) (14.4) (14.4) (14.4) (14.4) (14.4) 

Net Cash Flow 7.6 7.6 7.6 (149.9) (19.2) 14.8 14.8 14.8 14.8 14.8 14.8 14.8 14.8 14.8 14.8 

Terminal Value 185.2 

Present Value Factor 1.0000 0.9259 0.8573 0.7938 0.7350 0.6806 0.6302 0.5835 0.5403 0.5002 0.4632 0.4289 0.3971 0.3677 O.340S 

Discounted Cash F10w 7.6 7.0 6.5 (119.0) (14.1) 10.1 9.3 8.6 8.0 7.4 6.9 6.4 5.9 5.4 68.1 

Industry Value (Net Present Value) 24.0 

4/28/98 Standard Case GRIM_Ballast2.xLS