# REVISED SLIDES

B al last Manufacturer I mpact Analysi s DOE Wo r kshop April 28, 1998 

## N fo

U.S. Department of Energy Office of Energy Efficiency 

### and Renewable Energy 1000 Independence Avenue, SW / Washington, DC 20585 

# 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



# Cu rrent I ndustri a l Re ports we r e es ti mate manu factu rer pri ces .


# ..

QUANTITY AND VALUE OF SHIPMENTS , BY TYPE OF BALLAST

2nd, 3rd & 4th Qu arters 1997 (Quantity in 1,000 ballasts ; Value in $1,000) Product descri tion i Q tity V l .^ A P i GRIM

P p uan MA NE a ue vg. r ce roduct Class TIC TYPE .......... G 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 

## 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



# Fo r "reve rse-cal cu l ati ng " manufactu ri ng ba l last i ndustry st r uctu re devel oped us i ng pub li cly ava il able i nformati on.
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 

## 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 m an ufa cturer 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 0.17 1 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 (Mag

### netic) Mf

g• 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; 

### El ectronic ( ) 

### 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. i1
April 28, 1998 21 

## Strawman Industry Cash Flow Strawman Estimate ofManufacturing 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 ofManufacturing 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

### S trawman Industry Cash Flow Ballast Shipment Scenarios



# The impn ew ba l last standa rds a re de pendent on assumpti ons abou t the "base cas e ."

I I I I I 

### 1997 200 0 2003 2006 2009 20 12 2015 2018

Std. Year 

## -.-- Constant Shipments Scenario A D eclining S hip ments S cenario

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 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



# Fo r the pu r pose ca l c ul ati ng the impact of standards, GRIM will only cons i de r t hose ba ll ast s a re i mpacted standards
Baseline Case (Magnetic Ballast Sales)

01998 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 01998 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 

### 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

### S trawman Industry Cash Flow Strawman Inputs-Constant Shipments Scenario



# " ra a ma n ufacturin g costs , p ri ces and sh i pments for va r ious ballast types will be agg re g ated us i ng sh i pm e nt we i ghted befo re i nput " Strawman" sp readsheet.

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 18.141 $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 is underdevelopment.T)tese i aluesare "prelindnar^" * NESS: National EnerSSavin^s S re m adsheet developed by LBNL^ 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 3 , 6.3 6.3, L 6.3 Base Case Cash Flow '''anao

aeon,,'

April28, 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 

## 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

### B allast Industry Cash Flow



# The Industry Flow will be presented both with and with o ut standa rd s ( Baseli ne

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 enditures Conversion Ca il Ex 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 

## 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