REVISED SLIDES

Ballast Manufacturer Impact

Analysis

DOE Workshop

April 28, 1998

N

fo

U.S. Department of Energy

Office of Energy Efficiency

and Renewable Energy

1000 Independence Avenue, SW /

Washington, DC 20585

EE-RM-97-500 COMMENT 21JJ

REVISED SLIDES 

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 

L 

REVISED SLIDES 

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 

L 
Strawman Industry Cash Flow Strawman Estimate of Ballast Prices

Current I ndustrial Reports were estimate manufacturer

pri ces.

.. QUANTITY AND VALUE OF SHIPMENTS , BY TYPE OF BALLAST

2nd, 3rd & 4th Quarters 1997

(Quantity in 1,000 ballasts; Value in $1,000)

Product descri tion i Q tity V l

.^

A P i

GRIM

p uan P

MA NE

a ue vg. r ce roduct Class

G TIC TYPE..........

Two-lamp 96T12 & 72T12....... 4,510 47,615 $10.56 2 F96T12

Two lamp 40W/48T12/RS...... 19, 864 115,177 $5.80 2 F40T12

One lamp 40W/48T12/RS ...*r 1,721

Other rapid start .................... j 3,786

12,489 $7.26

55,032 $14.54

1 F40T12

2 F96T12H0 **

ELECTRONIC TYPE .....................

^^^^^^

.

Instant start:

1 and 2 lamp 32W/48T8........... E 11,899

'

139,783 $11.75 1 & 2 F32T8

3 and 4 lamp 32W/48T8......... 9,744 134,600 d en $13.81 1 3 & 4 F32T8

Rapid start:

2 lamp 40W/48T12/RS ............ ."^ 472 7439 $15.76 2 F40T12 RS

* Quantity and Value represent combined values for One lamp 40W/48T1 2/RS and Two lamp

32W/48T8/RS to avoid disclosing data for individual companies. I%

** Since shipments of 2F96T12HO represent a minor fraction of this CIR category, the price estimate

is not as reliable as for other ballast types. ^^

April28, 1998

19

EE-RM-97-500 COMMENT 21JJ

Strawman Industry Cash Flow Strawman Estimate of Ballast Prices 

Current Industrial Reports were used to estimate manufacturer 

prices. 

Product de~ripti~n~_. 

MAGNETIC TyPE ........................ . 

Two-lamp 96T12 & 72T12 ...... . 

Two lamp 40W/48T121RS ..... . 

One lamp 40W/48T121RS ........ *i 

Other rapid start .. :.:_ .. _ ..... _ _ .. _ .. _ ... _ .. +' ____ '-----+-__ '---__ 

Rapid start: 

2 lamp 40W/48T121RS ............ . 

1------------ -'---1 

* Quantity and Value represent combined values for One lamp 40W/4ST12/RS and Two lamp 

32W/4STS/RS to avoid disclosing data for individual companies. 

** Since shipments of2F96T12HO represent a minorfraction of this CIR category, the price estima!~ 

is not as reliable as for other ballast types. 

April 28, 1998 

19 

Strawman Industry Cash Flow Strawman Estimate of Ballast Prices 

Current Industrial Reports were used to estimate manufacturer 

prices. 

QUANTITY AND VALUE OF SHIPMENTS, BY TYPE OF BALLAST J----------------- 2nd, 3rd & 4th Quarters 1997 

(Quantity in 1,000 ballasts; Value in $1,000) 

Product description 

J----------~--"---------_4,------------r-----------r-"~------+---------~"1 MAGNETIC TyPE ...........•............. 

Two-lamp 96T12 & 72T12 ...... . 

Two lamp 40W/48T121RS ..... . 

One lamp 40W/48T121RS ........ *i 

Other rapid start .. :.:_ .. _ ..... _ _ .. _ .. _ ... _ .. +l ____ _ 

ELECTRONICTYP~E.~ .. ... ~ ~ .. ~ ... ~ .. ~ .. ~~------_+---------+_---____ +-__ __ 

Instant start: i 

1 and 2 lamp 32W/48T8 .......... "t-- ".<&~~~,=w~ ... ~ __ ''''''''''M''''''''''''''''''''''''''A'"'N' . .,~'''~'~''''''''''» __ '''''N''''~"~" 

3 and 4 lamp 32W/48T8 ... 

Rapid start: 

2 lamp 40W/48T121RS .......... . 

1-------------"-----L...----~---'------------'------'----------1 

* Quantity and Value represent combined values for One lamp 40W/4ST12/RS and Two lamp 

32W/4STS/RS to avoid disclosing data for individual companies. 

** Since shipments of2F96T12HO represent a minorfraction of this CIR category, the price estima!~ 

is not as reliable as for other ballast types. 

April 28, 1998 

19 
Strawman Industry Cash Fl ow Industry Cost Structure

For "reverse-calculating" manufactu ring bal last industry structure developed usi ng publicly available i nformation.

Profit before

tax

6.3%

Depreciation Cost of

2.9% 1 Materials

Overhead 53.7%

8.2%

Cost of Labor

11.2%

April28, 1998

20

EE-RM-97-500 COMMENT 21JJ

Strawman Industry Cash Flow Industry Cost Structure 

For "reverse-calculating" manufacturing costs, ballast industry cost 

structure was developed using publicly available information. 

Profit before 

tax 

6.30/0 

SG&A 

17.7% 

(R&D = 1.8%) 

Depreciation 

2.9% 

Overh 

8.20/0 

Cost of Labor 

11.2% 

Cost of 

Materials 

53.70/0 

April 28, 1998 

20 

Strawman Industry Cash Flow Industry Cost Structure 

For "reverse-calculating" manufacturing costs, ballast industry cost 

structure was developed using publicly available information. 

Profit before 

tax 

6.30/0 

SG&A 

17.7% 

(R&D = 1.8%) 

Depreciation 

2.9% 

Overhea 

8.20/0 

Cost of Labor 

11.2% 

Cost of 

Materials 

53.70/0 

April 28, 1998 

20 
Strawman Industry Cash Flow Strawman Estimate of Manufacturing Costs

Starting from the manufacturer prices, the industry structure

used to estimate isa g g at manufacturing

Ballast € CIR Using Industry Cost Structure

type 1997

e

Labor Materials

a Tooling 1 Overhead` Total

1 F40T12 OEM / Mfg. price 7.26;

(Magnetic) Mfg. cost 0.81' 3.901 0.21 1 0.60 5.52 2F40T12 OEM / Mfg. price 5.80 C }

(Magnetic) Mfg. cost 0.65' 3.111 0.171 0.481 4.41 2F96T12 OEM / Mfg. price 10.56 3

(Magnetic) Mfg. cost 1.18' 5.671 0.31 0.87; 8.02 2F96T12HO OEM /M!g price 14.54

(Magnetic) Mfg• cost 1.631 7.81; 0.42 11 1.191 11.05 2F40T12 OEM / Mfg. price 15.76;

(Electronic) Mfg. cost 1.77 8.46' 0.46 1.29 11.98 1 F32T8 OEM / Mfg. price 11.75;

( ) Electronic Mf cost g

[ 1.321 6.31 0.341 0.96' 8.93 2F32T8 OEM / Mfg. price 11.75:

( ) Electronic Mf cost 9• 1.32! 6.311 0,34 0,961 8.93 3F32T8 OEM/ Mfg. price 13.81

(Electronic) Mfg. cost -

1.55E 7.421 0.401 1.131; 10.50 4F32T8 OEM / Mfg. price 13.811 3 L (Electronic) Mfg. cost 1.55 7.421 0.401 1.13' 10.50

Tooling costs are approximat ely equal to depreciation costs.

i

1

April 28, 1998

21

EE-RM-97-500 COMMENT 21JJ

Strawman Industry Cash Flow Strawman Estimate of Manufacturing Costs 

Starting from the manufacturer prices, the industry cost structure was 

used to estimate disaggregated manufacturing costs 

ng costs are approximately equal to depreciation costs. 

April 28. 1998 

21 

Strawman Industry Cash Flow Strawman Estimate of Manufacturing Costs 

Starting from the manufacturer prices, the industry cost structure was 

used to estimate disaggregated manufacturing costs 

* Tooling costs are approximately equal to depreciation costs. 

April 28. 1998 

21 
Strawman Industry Cash Flow Ballast Shipment Scenarios

The impnew bal last standards are dependent on assumptions

about the "base case."

I I I I I

1997 2000 2003 2006 2009 2012 2015 2018

Std. Year

-.-- Constant Shipments Scenario A Declining Shipments Scenario

April 28, 1998

24

EE-RM-97-500 COMMENT 21JJ

Strawman Industry Cash Flow Ballast Shipment Scenarios 

The impact of new ballast standards are dependent on assumptions 

about the "base case." 

..... 

tI) 

ct'l 

--ct'l 

en 

1997 2000 2003 2006 2009 2012 2015 2018 

Std. Year 

I-+- Constant Shipments Scenario --*- Declining Shipments Scenario I 

April 28, 1998 

24 

Strawman Industry Cash Flow Ballast Shipment Scenarios 

The impact of new ballast standards are dependent on assumptions 

about the "base case." 

..... 

tI) 

ct'l 

--ct'l 

en 

1997 2000 2003 2006 2009 2012 2015 2018 

Std. Year 

I-+- Constant Shipments Scenario --*- Declining Shipments Scenario I 

April 28, 1998 

24 
Strawman Industry Cash Flow Declining Shipments Scenario

For the purpose calculating the impact of standards, GRIM will only

consi der those ballasts are impacted standards

Baseline Case

(Magnetic Ballast Sales)

0

1998 2000 2002 2004 2006 2008 2010 2012

Baseline Case

(Electronic Ballast Sales)

35

30

25

20

15

10

5

0-

1998 2000 2002 2004 2006 2008 2010 2012

35

30

--1 F40T12 25

--2F40T12 20

- 2F96T12 15

-x-2F96T12HO 10

5

0*3c ) ;

1998 2000 2002 2004 2006 2008 2010 2012

35

1F40T12

30

2F40T12

25

3F40T12

20

4F40T12 15

2F96T12 10

2F96T12H0 5

0

1998 2000 2002 2004 2006 2008 2010 2012

Standards Case

(Magnetic Ballast Sales)

Std. Year

Standards Case

(Electronic Ballast Sales)

Std. Year

--®--1 F40T12

-m--2F40T12

--2F96T12

-2F96T12HO

-®--1F40T12

--2F40T12

-^ 3F40T12

--4F40T12

--o-2F96T12

.- 2F96T12H 0

April 28, 1998

25

EE-RM-97-500 COMMENT 21JJ

Strawman Industry Cash Flow Declining Shipments Scenario 

For the purpose of calculating the impact of standards, GRIM will only 

consider those ballasts that are impacted by standards 

Baseline Case Standards Case 

(Magnetic Ballast Sales) (Magnetic Ballast Sales) 

Std. Year 

25 35 

20 30 

__ 1F40T12 25 

15 __ 1F40T12 

-lII-2F40T12 20 __ 2F40T12 

10 --*-2F96T12 15 --*-2F96T12 ___ 2F96T12HO 10 ___ 2F96T12HO 

5 5 

0 0 

1998 2000 2002 2004 2006 2008 2010 2012 1998 2000 2002 2004 2006 2008 2010 2012 

Baseline Case Standards Case 

(Electronic Ballast Sales) (Electronic Ballast Sales) 

Std. Year 

35 35 1F40T12 __ 1F40T12 

30 30 

2F40T12 __ 2F40T12 25 25 

20 3F40T12 20 --*-3F40T12 

15 4F40T12 15 ___ 4F40T12 

10 2F96T12 10 -<>-2F96T12 

5 2F96T12HO 5 

0 -2F96T12HO 

0 

1998 2000 2002 2004 2006 2008 2010 2012 1998 2000 2002 2004 2006 2008 2010 2012 

April 28, 1998 

25 

Strawman Industry Cash Flow Declining Shipments Scenario 

For the purpose of calculating the impact of standards, GRIM will only 

consider those ballasts that are impacted by standards 

Baseline Case Standards Case 

(Magnetic Ballast Sales) (Magnetic Ballast Sales) 

Std. Year 

25 35 

20 30 

__ 1F40T12 25 

15 __ 1F40T12 

-lII-2F40T12 20 __ 2F40T12 

10 --*-2F96T12 15 --*-2F96T12 ___ 2F96T12HO 10 ___ 2F96T12HO 

5 5 

0 0 

1998 2000 2002 2004 2006 2008 2010 2012 1998 2000 2002 2004 2006 2008 2010 2012 

Baseline Case Standards Case 

(Electronic Ballast Sales) (Electronic Ballast Sales) 

Std. Year 

35 35 1F40T12 __ 1F40T12 

30 30 

2F40T12 __ 2F40T12 25 25 

20 3F40T12 20 --*-3F40T12 

15 4F40T12 15 ___ 4F40T12 

10 2F96T12 10 -<>-2F96T12 

5 2F96T12HO 5 

0 -2F96T12HO 

0 

1998 2000 2002 2004 2006 2008 2010 2012 1998 2000 2002 2004 2006 2008 2010 2012 

April 28, 1998 

25 
Strawman Industry Cash Flow Strawman Inputs-Constant Shipments Scenario

" ra a man ufacturing costs, prices and sh i pments for various

ballast types will be aggregated usi ng shi pment weighted

before i nput "Strawman" spreadsheet.

iBASE CAcFSCMANO I I

Ntt2nct)C10! .ts F1cct;unitl;ulla^is SiOpn;nt

19!33 Lkfudcl.due 1F40T12 2k4 0T12 2F96TT2 2196TJZHO 141f.mlt'alue 1F40T12 2F40T12 3F40112 4F40T12 3F96`l'12 2F?96`C12I Nuii!htedaw-.

Price/Unit ($) (from C/R) 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 Saks (niillionS ) (from NESS)* 1201 2300 6.00 0.30 (front NESS) 0.00 0.00 0.00 0.00 0.00 0.00 31.50

Unit Saks nvllions) (Manufacturer)

Cost of Sales ($) (` Of Price/Unit) _' - (% Of Price/Unit)

labor/Unit 11.20% 0.81 0.65 1.15 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

1

$3.70

Overhead/Unit 8.20% 0.60 0.48 0.87 1.19 820% 1.29 1.29 1.29 129 1.81 177 1 $0.57

* NESS: National EnerSSavin^s S re m adsheet developed by LBNL^ NESS is underdevelopment.T)tese i aluesare "prelindnar^"

Inputs-Base Case

hluorescent Lntn J Ballasts

' BASE CASE SCENARIO Base Year

I 1998 1999 2000 2001 2002 2003

Price/Unit 6.89 6,89 6.891 6.89 6.891 6.89

IUnit Sales 31.50 31.50 31.50 31.50 31.50 31.50

;Revenues 217.1 217.1 1 217.1 217.1 217.1 217.1

Cost o Sales_

Labor 24.3 24.3 24.3 24.3 i 24.3 1 24.3

Material 116.6 116.6 116.6 116.6 116.6 116.6

Overhead 17.8 17.8 17.8 17.8 178

_

17.8

De reciation 6.3 6.3 6.3 6.3,3 , 6.3L 6.3

Base Case Cash Flow

'''anao

aeon,,'

April28, 1998

28

EE-RM-97-500 COMMENT 21JJ

Strawman Industry Cash Flow Strawman Inputs-Constant Shipments Scenario 

"Strawman" manufacturing costs, prices and shipments for various 

ballast types will be aggregated using shipment weighted averages 

before input to the "Strawman" GRIM spreadsheet 

•• 011 •• ' 

• D. B a •• 

••• uus. 

April 28, 1998 

28 

Strawman Industry Cash Flow Strawman Inputs-Constant Shipments Scenario 

"Strawman" manufacturing costs, prices and shipments for various 

ballast types will be aggregated using shipment weighted averages 

before input to the "Strawman" GRIM spreadsheet 

•• 011 •• ' 

• D. B a •• 

••• uus. 

April 28, 1998 

28 
Ballast Industry Cash Flow

The Industry Flow will be presented both with

and without standards (Baseline

Fluorescent Lamp ,IIaStS

6.89

31.50

6.89

31.50

6.89

31.50

6.89

31.50

6.89

31.50

BASE CASE SCENARIO

ins um ^.: uient

Price/Unit

Sellin General and Administrative

Standard SG&A s

Present Value Factor

Discounted Cash Flow

Value (Net

nic Ballast)

Ordinar y CaRiitalExpenditures

Conversion Ca il Ex enditures

n Investment

34.5 34.5 34.5 34.5 34.5 34.5

3.8 3.8 3.8 3.8 3 8_ 3.8

13.8 13.8 13.8

.......................__.......__..;................. ...._..........................__............_........... ....._

5.1 5.1 5.1 5.1 5.1

8.7 8.7 8.7 8.7 8.7 1 8.7

8.7 8.7 8.78.7 ._......__ ................._

6.3 6.3 ........

........ ...... ..

15.0 15.0 1

(7.4)( (7.4). (7.4). (7,4) (7.4)!

(74)^ (7.4) (7.4)1 (7.4) (7.4) (7.4)

7.6 L___2-6 7.6 7.6 7.6

.0000 1 0.9259

24.3 24.3 24.3

116.6 116 6 116 6

17.8 17.8 17.8 .... ......

6.36.3 6.3

15.0 15.0

13.8 13.8) 13.8

1Unt Sales

Revenues

jCost ofSales

Labor........ ........

1Material

Overhead

Depreciation

?Net Income . . . . . . . . . . . . . . .. . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . Depreciation .__...._...

.(Change in W orking Capital

243 243_

116 .6 116. 6

178 178

6 .3 6.3

2003

Output for Public Review

a aaan.

as as an

aaaaaa.

aaaaaa.

aaaaaa.

aaaaaa n

6.89

31.50

2 7.1

24.3

116.6

17.8

6.33.....

13.8

15.0 ......._.......

(7.4)

(7.4)

7.6

94.6

0.3405

34.8

rii 2898

34

EE-RM-97-500 COMMENT 21JJ

Ballast Industry Cash Flow Output for Public Review 

The Industry Cash Flow will be presented both with (Standards Case) 

and without standards (Baseline Case) 

....... 1····201·2········ 

6,89 

3I,50 

217.1 j .8.IIB.I I····························· 

24.3 

116.6 

17.8 

6.3 

a.8 •••• 

34.5 

3.8 

13.8 •• D •••• 

5.1 

........ 

B.DDS.' 

.8 •••• 1 

34 

Ballast Industry Cash Flow Output for Public Review 

The Industry Cash Flow will be presented both with (Standards Case) 

and without standards (Baseline Case) 

....... 1····201·2········ 

6,89 

3I,50 

217.1 j .8.IIB.I I····························· 

24.3 

116.6 

17.8 

6.3 

a.8 •••• 

34.5 

3.8 

13.8 •• D •••• 

5.1 

........ 

B.DDS.' 

.8 •••• 1 

34