12-A-i

APPENDIX 12-A MANUFACTURER IMPACT ANALYSIS INTERVIEW 

GUIDE, GOVERNMENT REGULATORY IMPACT MODEL, AND 

COMPLETE MIA RESULTS

TABLE OF CONTENTS

12-A.1. MANUFACTURER IMPACT ANALYSIS INTERVIEW GUIDES ......................... 1

12-A.2. GOVERNMENT REGULATORY IMPACT MODEL............................................. 14
12-A-1

12-A.1. MANUFACTURER IMPACT ANALYSIS INTERVIEW GUIDES

Residential Clothes Washer Rulemaking

Manufacturer Impact Analysis Interview Guide
12-A-2

The Association of Home Appliance Manufacturers (AHAM) and the American Council for an 

Energy Efficient Economy (ACEEE) recently released a multi-product standards agreement 

(Consensus Agreement) that addressed negotiated standards for residential refrigerators/freezers, 

clothes washers, clothes dryers, room air conditioners, and dishwashers. For clothes washers, the 

Consensus Agreement proposes updated standards for top-loading standard and top-loading 

compact product classes, as well as splitting the existing front-loading product class into frontloading standard and front-loading compact clothes washers. DOE’s rulemaking process allows 

for the publication of a direct final rule if DOE concludes that standards proposed in the 

Consensus Agreement meet certain statutory criteria. In order to evaluate the product classes and 

standards proposed in the Consensus Agreement for residential clothes washers, DOE is 

requesting information on the topics in this questionnaire.

DOE is requesting information on the product classes in the table below. 

Baseline Efficiencies for Considered Product Classes

Product Class Product Class Description Baseline MEF

(ft3/kWh/cycle)

Baseline 

Standby Power

(W)

Top-Loading, 

Standard

Top-loading with capacity 

greater than or equal to 1.6 ft3 1.26 0

Top-Loading, 

Compact

Top-loading with capacity less 

than 1.6 ft3 0.65 0

Front-Loading, 

Standard

Front-loading with capacity 

greater than or equal to 1.6 ft3 1.72 2.3

Front-Loading, 

Compact*

Front-loading with capacity 

less than 1.6 ft3 N/A N/A

*DOE is not aware of any compact front-loading clothes washers available on the market, and is especially 

interested in information on this product class to evaluate the proposed standard in the Consensus Agreement.

Any amended standards for residential clothes washers would be expressed in terms of the 

integrated modified energy factor (IMEF), as proposed in the test procedure NOPR published on 

September 21, 2010. 75 FR 57556. Based on the current definition, DOE expects IMEF to vary 

significantly from the current MEF metric. IMEF will account for standby and off mode energy 

consumption, as well as energy use from steam and self-cleaning cycles.1The proposed test 

procedure also includes changes to the capacity measurement for top-loading washers, which 

will affect IMEF. The discussion below references efficiency levels in terms of MEF to avoid 

metrics unfamiliar to manufacturers.

1. KEY ISSUES

1.1 You previously indicated the following key issues in this rulemaking: [Fill in as 

appropriate]. Do these remain key issues for your company in this rulemaking, and are there any 

additional key issues you believe DOE should consider in this rulemaking?

2. ENGINEERING AND LIFE-CYCLE COST 

 

1 Note that the clothes washer test procedure final rule did not adopt provisions to measure the energy consumption 

of steam and self-cleaning cycles. 77 FR 13888 (March 7, 2012).
12-A-3

Are the AHAM-supplied average incremental manufacturing costs at each efficiency level 

representative of costs your company incurs at each of these efficiency levels? Also, please 

indicate if the design options you previously stated for the given efficiency levels are still valid.

AHAM-Supplied Standard Top-Loading Incremental Costs

MEF

(ft3/kWh/cycle)

AHAM Average 

Incremental Cost 

(materials, labor, OH)

Actual 

Incremental Cost 

(if different)

Description of Design Options

1.40 $3.08

1.72 $8.39

1.80 $13.02

2.00 $23.99

2.26 $59.25

AHAM-Supplied Standard Front-Loading Incremental Costs

MEF

(ft3/kWh/cycle)

AHAM Average 

Incremental Cost 

(materials, labor, OH)

Actual 

Incremental Cost 

(if different)

Description of Design Options

1.80 $2.13

2.00 $6.09

2.20 $15.73

2.40 $38.89

2.89 $72.13

Front-loading design options (not specific to a certain efficiency level): larger drum and tub, less 

external hot water use and more internal heating, more efficient motors, higher spin speeds, more 

sophisticated drum designs, and less overall water usage.

At the time the Framework Document was published, the max-tech units had MEF ratings of 

2.26 and 2.89 for top-loading and front-loading clothes washers respectively. DOE is now aware 

of top-loading clothes washers with a MEF of 2.57, and front-loading clothes washers with a 

MEF of 3.35. What design features and associated costs would be necessary to reach these 

efficiencies?

Do the design options and associated costs in the tables above also apply to the compact frontand top-loading product classes?

Please comment on any issues related to the following proposed changes to the DOE clothes 

washer test procedure and how they may impact the design options used to reach higher 

efficiencies for each product class, as appropriate:

2.1 Standby and Off Mode Power

How would accounting for standby and off mode power impact the measured efficiencies of 

clothes washers? Would the inclusion of standby and off mode power affect the design options 

currently used to reach higher efficiencies?
12-A-4

2.2 Steam Wash Cycles

How would accounting for steam wash cycles affect the measured efficiency of clothes washers 

with this feature compared to the efficiency as measured using the existing test procedure? Is it 

appropriate to account for steam wash cycles in the measured efficiency of clothes washers? 

What percentage of your total shipments do clothes washers offering a steam wash cycle account 

for?

2.3 Self-Clean Cycles

How would including self-clean cycles affect the measured efficiency as compared to the current 

test procedure? What fraction of your total clothes washer shipments includes a pre-set selfclean cycle, and how frequently do you recommend consumers use such a cycle?

2.4 Use Factors

Will the proposed amendments to the use factors in the DOE test procedure significantly affect 

the measured efficiencies of any clothes washers? Are the proposed values consistent with actual 

consumer use? Can you provide any non-proprietary data related to consumer use of different 

cycles?

2.5 Capacity Measurement Method

Will the proposed capacity measurement method affect the design options you use to reach 

higher efficiencies?

2.6 Energy Test Cycle Definition

How will the changes to the energy test cycle definition change how your clothes washers are 

tested? Will this revised definition limit the design options available for reaching higher 

efficiencies?

3. CONVERSION COSTS

The MIA considers two types of conversion costs:

Capital conversion costs are one-time investments in plant, property, and equipment (PPE) 

necessitated by an amended energy conservation standard. These may be incremental changes to 

existing PPE or the replacement of existing PPE. Included are expenditures on buildings, 

equipment, and tooling.

Product conversion costs are costs related research, product development, testing, marketing and 

other costs for redesigning products necessitated by an amended energy conservation standard.

The tables below show the AHAM-submitted average capital conversion costs for a number of 

efficiency levels. Please indicate if your expected capital conversion costs vary from the AHAMsubmitted estimate. In the description column, DOE is interested in understanding the kinds of 

changes that would need to be implemented to production lines and production facilities at each 

efficiency level. Where applicable, please quantify the number and cost of new production 

equipment, molds, etc. that would be required to implement the specified design changes. 
12-A-5

AHAM-Supplied Standard Top-Loading Capital Conversion Costs

MEF

(ft3/kWh/cycle)

AHAM Average 

Capital Conversion 

Costs ($mm)

Actual Capital 

Conversion Cost 

(if different)

Description

1.40 $1.51

1.72 $34.98

1.80 $37.84

2.00 $41.76

2.26 $60.88

AHAM-Supplied Standard Front-Loading Capital Conversion Costs

MEF

(ft3/kWh/cycle)

AHAM Average 

Capital Conversion 

Costs ($mm)

Actual Capital 

Conversion Cost 

(if different)

Description

1.80 $0.85

2.00 $0.86

2.20 $13.32

2.40 $19.46

2.89 $25.78

The tables below show the AHAM-submitted average product conversion costs for a number of 

efficiency levels. Please indicate if your expected product conversion costs vary from the 

AHAM-submitted estimate. In the description column, DOE is interested in understanding such

expenses as product development, prototyping, testing, certification, and marketing. In the 

description column, please describe the assumptions behind the estimates provided. 

AHAM-Supplied Standard Top-Loading Product Conversion Costs

MEF

(ft3/kWh/cycle)

AHAM Average 

Product Conversion 

Costs

Actual Product 

Conversion Cost 

(if different)

Description

1.40 $0.93

1.72 $1.43

1.80 $3.62

2.00 $7.95

2.26 $12.84

AHAM-Supplied Standard Front-Loading Product Conversion Costs

MEF

(ft3/kWh/cycle)

AHAM Average 

Product Conversion 

Costs

Actual Product 

Conversion Cost 

(if different)

Description

1.80 $0.53

2.00 $0.53

2.20 $3.10

2.40 $5.91

2.89 $11.48
12-A-6

Are the capital and product conversion costs described above applicable to the compact product 

classes as well? Would the magnitude and nature of the conversion costs differ for the compact 

product classes?

Please provide additional qualitative information to help DOE understand the types and nature of 

your investments, including the plant and tooling changes and the product development effort 

required at different efficiency levels.

4. MARKUPS AND PROFITABILITY

DOE estimated the manufacturer production costs for the two standard product classes of 

residential clothes washers. DOE assumed the other two compact product classes would have 

similar baseline markup values. DOE defines manufacturer production cost as all direct costs 

associated with manufacturing a product: direct labor, direct materials, and overhead (which 

includes depreciation). The manufacturer markup is a multiplier applied to manufacturer 

production cost to cover non-production costs, such as SG&A and R&D, as well as profit. It does 

not reflect a “profit margin.” 

The manufacturer production cost multiplied by the manufacturer markup equals the 

manufacturer selling price. Manufacturer selling price is the price manufacturers charge their 

first customers, but does not include additional costs along the distribution channels. 

Please comment on the baseline markups DOE calculated as compared to your company’s 

baseline markups for the clothes washer product classes.

Residential Clothes Washer Baseline Manufacturer Markups by Product Class

Product Class Product Class Description

Estimated 

Baseline 

Markup

Manufacturer Comments 

or Revised Estimates

Top-Loading, 

Compact

Top-loading with capacity less than 

1.6 ft3 1.22

Top-Loading, 

Standard

Top-loading with capacity greater 

than or equal to 1.6 ft3 1.22

Front-Loading, 

Compact

Front-loading with capacity less than 

1.6 ft3 1.30

Front-Loading, 

Standard

Front-loading with capacity greater 

than or equal to 1.6 ft3 1.30

One of the possible scenarios DOE uses to model impacts on industry profitability is the impact 

of commoditization of premium products. Because the market disruption caused by standards 

can alter the pricing of premium products, DOE is interested in understanding if efficiency is a 

feature that earns a premium. Within each product class, do markups vary by efficiency level? If 

yes, please provide information about the markups at efficiencies above the baseline in the tables 

below. Would these markups also vary for compact product classes?
12-A-7

Estimated Standard Top-Loading Markups by Efficiency Level

MEF

(ft3/kWh/cycle)

Estimated 

Markup Manufacturer Comments

1.40

1.72

1.80

2.00

2.26

Estimated Standard Front-Loading Markups by Efficiency Level

MEF

(ft3/kWh/cycle)

Estimated 

Markup Manufacturer Comments

1.80

2.00

2.20

2.40

2.89

Would you expect changes in your estimated profitability following an amended energy 

conservation standard? If so, please explain why. Can you suggest any scenarios that would 

model these expected changes?

5. FINANCIAL PARAMETERS

In order to accurately collect information about clothes washer manufacturing, please compare 

your financial parameters to the GRIM parameters tabulated below.
12-A-8

Financial Parameters for Residential Clothes Washer Manufacturing

GRIM Input Definition Industry 

Estimated

Value (%)

Your Actual (If 

Different from 

DOE’s 

Estimate)

Income Tax 

Rate

Corporate effective income tax paid (percentage of 

earnings before taxes, EBT) 34.3

Discount Rate

Weighted average cost of capital (inflationadjusted weighted average of corporate cost of 

debt and return on equity)

8.0

Working 

Capital

Current assets less current liabilities (percentage of 

revenues) 6.5

Net PPE Net plant property and equipment (percentage of 

revenues) 17.7

SG&A Selling, general, and administrative expenses 

(percentage of revenues) 11.3

R&D Research and development expenses (percentage 

of revenues) 2.2

Depreciation Amortization of fixed assets (percentage of 

revenues) 4.7

Capital 

Expenditures

Outlay of cash to acquire or improve capital assets 

(percentage of revenues, not including acquisition 

or sale of business units)

2.7

Cost of Goods 

Sold

Includes material, labor, overhead, and 

depreciation (percentage of revenues) 83.0

6. ADDITIONAL IMPACTS

You previously indicated the following regulatory burdens: [Fill in as appropriate]. Do these 

still represent regulatory burdens, and are there any additional regulatory burdens at this time?

What costs do you anticipate incurring to meet these regulations?

The impact of amended energy conservation standards on employment is an important 

consideration in the rulemaking process. Where are your residential clothes washer facilities that 

produce products for the United States located? Please also provide employment levels and total 

washer shipments at each of these facilities.

At what efficiency levels would you consider relocating current domestic production abroad?

Are you aware of any small businesses, niche manufacturers, or component manufacturers for 

which amended energy conservation standards would have a severe impact? If so, why?

Have any of your U.S. facilities qualified for grants available through the American Recovery 

and Reinvestment Act? Has your company reached the $75 million limit for efficient appliances 

under the Energy Improvement and Extension Act of 2008? How many shipments of washers 

qualifying for a $250 production tax credit under the Energy Improvement and Extension Act do 

you anticipate manufacturing in 2010?
12-A-9

Information Request for Compact-Size Product Classes

for Residential Clothes Washers

The United States Department of Energy (DOE) is currently reviewing energy conservation 

standards for residential clothes washers, including the standards proposed in the AHAMACEEE Multi-Product Standards Agreement (“Consensus Agreement”). In particular, DOE 

would like to understand the rationale for the proposed efficiency standards for the top-loading 

compact and front-loading compact product classes.

1. Consensus Agreement Standard Levels

Table 1 shows the proposed standards in the Consensus Agreement.

Table 1. AHAM-ACEEE Multi-Product Standards Agreement for Residential Clothes 

Washers 

Product Description

New Standard

Jan. 1, 2015

(MEF/WF)

New Standard

Jan. 1, 2018

(MEF/WF)

Top-Loading, Compact

(less than 1.6 cubic feet capacity) 1.26 / 14.0 1.81 / 11.6

Top-Loading, Standard 1.72 / 8.0 2.0 / 6.0

Front-Loading, Compact

(less than 1.6 cubic feet capacity) 1.72 / 8.0

Front-Loading, Standard 2.2 / 4.5

Table 2 compares the Consensus Agreement standards for the compact product classes to the 

current DOE standard, as well as the efficiency levels of compact top-loaders currently on the 

market.

Table 2. Efficiency Levels for Compact-Size Residential Clothes Washers

Efficiency Level Source

Efficiency Level

MEF WF

Top-Loading, Compact

DOE Standard 0.65 none

Level 1 (currently on the market) 0.78 13.9

Level 2 (currently on the market) 1.00 12.7

Consensus Agreement, 2015 1.26 14.0

Consensus Agreement, 2018 1.81 11.6

Front-Loading, Compact

DOE Standard 1.26 none

Consensus Agreement, 2015 1.72 8.0
12-A-10

Questions:

 Top-loading compact

o How were the standards for the top-loading compact product class established?

o What was the rationale for the tiered standards?

o Are you aware of any products on the market that meet the 2015 standards? 2018 

standards?

o Within the top-loading compact product class, what percentage market share do 

your company’s shipments represent?

o Do you foresee any potential changes in the competitive landscape for compact 

clothes washers due to the proposed standards?

 Front-loading compact

o How were the proposed standards for the front-loading compact product class 

established?

o Are you aware of any compact front-loaders on the market that meet the proposed 

standards? If not, do you foresee any entrants into this market in the future?
12-A-11

2. Design Options and Costs for Achieving Proposed Standard Levels

The inclusion of more stringent standards for top-loading compact and front-loading compact 

product classes in the Consensus Agreement implies that these standards are technologically 

achievable and economically justifiable. Because the proposed standards for the top-loading 

product class represent a significant improvement over current standards, DOE would like to 

better understand how these higher standard levels can be achieved. Table 3 shows the design 

options considered for standard-size top-loading clothes washers.

Table 3. Design Options for Standard-Size Top-Loading Clothes Washers

Design Options

Applicable to Compact 

Product Class?

More Advanced Controls

Adaptive fill control (more accurate pressure switches)

Temperature control (more accurate sensors)

Water inlet valves (more accurate flow control)

Electronic controls

Accelerometers

Motor Improvements

More efficient motor

Variable speed drive

Higher spin speeds

Basket/Drum Modifications

Basket shape modification

Stainless steel basket

Larger capacity

Stronger basket

Agitator modification

Reduced Water Consumption

Spray rinse

Recirculation pumps

Gray-water rinse

Structural Improvements

Better suspension system

Out-of-balance detection

Operational Design Options

Longer cycle times

Lower water temperatures
12-A-12

Questions:

 What design options are available for the compact product classes to meet the higher 

standard levels?

 What design options are most likely to be used to reach the proposed 2015 standards? 

The 2018 standards?

 What are the average costs associated with meeting each incremental standard level? (See 

Table 4)

Table 4. Cost Associated with Meeting Each Incremental Efficiency Level

Efficiency Level Source

Efficiency Level Incremental Cost 

MEF WF ($/Unit)

Top-Loading, Compact

DOE Standard 0.65 none

Level 1 (currently on the market) 0.78 13.9

Level 2 (currently on the market) 1.00 12.7

Consensus Agreement, 2015 1.26 14.0

Consensus Agreement, 2018 1.81 11.6

Front-Loading, Compact

DOE Standard 1.26 none

Consensus Agreement, 2015 1.72 8.0

 Are there any significant differences between product types or platforms (e.g. stacked 

washer/dryer vs. portable top-loading washer) that could affect the ability for a particular 

product type to achieve the proposed standard levels?

 Can the front-loading compact efficiency standards be achieved assuming similar design 

options as “nearly compact” front-loaders ranging from 1.6–2.4 cubic feet?
12-A-13

3. Consumer Utility

DOE would like to better understand the unique consumer utility offered by compact-size clothes 

washers.

Questions:

 Does the market continue to demand clothes washers with capacity less than 1.6 cubic 

feet?

 Are the disparate compact top-loading products considered substitutes for each other? Or 

does each distinct product type satisfy a unique niche within the market? (e.g. stacked 

washer/dryer vs. portable top-loading washer)

 Would the proposed standards have any negative impacts on consumer utility of 

compact-size clothes washers?
12-A-14

12-A.2. GOVERNMENT REGULATORY IMPACT MODEL

12-A.2.1 Introduction and Purpose

The purpose of the Government Regulatory Impact Model (GRIM) is to help quantify the 

impacts of energy conservation standards and other regulations on manufacturers. The basic 

mode of analysis is to estimate the change in value of the industry or manufacturers(s) following 

a regulation or a series of regulations. The model structure also allows an analysis of multiple 

products with regulations taking effect over a period of time, and of multiple regulations on the 

same products.

Industry net present value is defined, for the purpose of this analysis, as the discounted 

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

actual cash flows by year and then determines the present value of those cash flows both without 

an energy conservation standard (i.e., the base case) and under different trial standard levels 

(TSLs).

Output from the model consists of summary financial metrics, graphs of major variables, 

and, when appropriate, access to the complete cash flow calculation.

12-A.2.2 Model Description

The basic structure of the GRIM is a standard annual cash flow analysis that uses 

manufacturer selling prices, manufacturing costs, a shipments forecast, and financial parameters 

as inputs and accepts a set of regulatory conditions as changes in costs and investments. The 

cash flow analysis is separated into two major blocks: income and cash flow. The income 

calculation determines net operating profit after taxes. The cash flow calculation converts net 

operating profit after taxes into an annual cash flow by including investment and non-cash items. 

Below are definitions of listed items on the printout of the output sheet (see page 12-A-17 of this 

appendix for an example of such a sheet).

Unit Sales: Total annual shipments for the industry were obtained from the National 

Impact Analysis Spreadsheet;

Revenues: Annual revenues - computed by multiplying equipment unit price at each 

efficiency level by the appropriate manufacturer markup;

Labor: The portion of cost of goods sold (COGS) that includes direct labor, 

commissions, dismissal pay, bonuses, vacation, sick leave, social security contributions, fringe, 

and assembly labor up-time; 

Material: The portion of COGS that includes materials;

Overhead: The portion of COGS that includes indirect labor, indirect material, energy 

use, maintenance, depreciation, property taxes, and insurance related to assets. While included 

in overhead, the depreciation is shown as a separate line item;
12-A-15

Depreciation: Annual depreciation computed as a percentage of COGS. While included 

in overhead, the depreciation is shown as a separate line item;

Stranded Assets: In the year the standard becomes effective, a one-time write-off of 

stranded assets is accounted for; 

Standard SG&A: Selling, general, and administrative costs are computed as a percentage 

of Revenues;

R&D: GRIM separately accounts for ordinary research and development (R&D) as a 

percentage of Revenues;

Product Conversion Costs: Product conversion costs are one-time investments in 

research, development, testing, and marketing focused on making product designs comply with 

the amended energy conservation standard. GRIM allocates these costs over the period between 

the standard’s announcement and effective dates;

Earnings Before Interest and Taxes (EBIT): Includes profits before deductions for 

interest paid and taxes;

EBIT as a Percentage of Sales: GRIM calculates EBIT as a percentage of sales to 

compare with the industry’s average reported in financial statements;

Taxes: Taxes on EBIT are calculated by multiplying the tax rate contained in Major 

Assumptions by EBIT.

Net Operating Profits After Taxes (NOPAT): Computed by subtracting Cost of Goods 

Sold, SG&A, R&D, Product Conversion Cost, and Taxes from Revenues.

NOPAT repeated: NOPAT is repeated in the Statement of Cash Flows;

Depreciation repeated: Depreciation is added back in the Statement of Cash Flows 

including stranded assets because both are non-cash expenses;

Change in Working Capital: Change in cash tied up in accounts receivable, inventory, 

and other cash investments necessary to support operations is calculated by multiplying working 

capital (as a percentage of revenues) by the change in annual revenues; 

Cash Flow From Operations: Calculated by taking NOPAT, adding back non-cash items 

such as a Depreciation, and subtracting out Change in Working Capital;

Ordinary Capital Expenditures: Ordinary investments in property, plant, and equipment 

to maintain and replace existing production assets, computed as a percentage of Revenues;

Capital Conversion Costs: Capital conversion costs are one-time investments in 

property, plant, and equipment to adapt or change existing production facilities so that new 

product designs can be fabricated and assembled under the new regulation;
12-A-16

Capital Investments: Total investments in property, plant, and equipment are computed 

by adding Ordinary Capital Expenditures and Conversion Capital Expenditures;

Free Cash Flow: Annual cash flow from operations and investments; computed by 

subtracting Capital Investment from Cash Flow from Operations;

Terminal Value: Estimate of the continuing value of the industry after 2044. Computed 

by growing the Free Cash Flow in year 2044 at a constant rate in perpetuity;

Present Value Factor: Factor used to calculate an estimate of the present value of an 

amount to be received in the future;

Discounted Cash Flow: Free Cash Flows (22) multiplied by the Present Value Factor. 

For 2042 the discounted cash flow includes the discounted Terminal Value; and

Industry Value thru 2044: The sum of Discounted Cash Flows.
12-A-17 

Base Year

2008 2009 2010 2011 2012 2013 2014

Unit Sales 8.3 8.1 8.6 9.2 9.3 9.3 9.4

Revenues 3,816.6 3,855.7 4,211.9 4,492.9 4,482.8 4,435.6 4,409.6

Cost of Sales

Labor 436.0 428.7 461.2 486.2 480.7 472.5 467.4

Material 2,123.0 2,158.9 2,367.0 2,531.9 2,531.4 2,508.7 2,496.8

Overhead 300.8 294.8 316.4 333.0 328.9 323.0 319.2

Depreciation 166.1 167.4 182.7 194.7 194.1 191.9 190.7

Stranded Assets $ - $ - $ - $ - $ - $ - $ -

Selling, General and Administrative

Standard SG&A $ 431.3 $ 435.7 $ 475.9 $ 507.7 $ 506.6 $ 501.2 $ 498.3

R&D $ 84.0 $ 84.8 $ 92.7 $ 98.8 $ 98.6 $ 97.6 $ 97.0

Product Conversion Costs $ - $ - $ - $ - $ - $ - $ 2.1

Earnings Before Interest and Taxes (EBIT) $ 275.4 $ 285.3 $ 316.0 $ 340.6 $ 342.5 $ 340.8 $ 338.1

EBIT/Revenues 7.2% 7.4% 7.5% 7.6% 7.6% 7.7% 7.7%

Taxes $ 94.5 $ 97.9 $ 108.4 $ 116.8 $ 117.5 $ 116.9 $ 116.0

Net Operating Profit after Taxes (NOPAT) $ 181.0 $ 187.4 $ 207.6 $ 223.8 $ 225.0 $ 223.9 $ 222.1

NOPAT $ 181.0 $ 187.4 $ 207.6 $ 223.8 $ 225.0 $ 223.9 $ 222.1

Depreciation $ 166.1 $ 167.4 $ 182.7 $ 194.7 $ 194.1 $ 191.9 $ 190.7

Change in Working Capital $ (248.1) $ (2.5) $ (23.1) $ (18.3) $ 0.7 $ 3.1 $ 1.7

Cash Flows from Operations $ 99.0 $ 352.3 $ 367.1 $ 400.2 $ 419.7 $ 418.9 $ 414.5

Ordinary Capital Expenditures $ (175.6) $ (177.4) $ (193.7) $ (206.7) $ (206.2) $ (204.0) $ (202.8)

Capital Conversion Costs $ - $ - $ - $ - $ - $ - $ (6.2)

Capital Investments $ (175.6) $ (177.4) $ (193.7) $ (206.7) $ (206.2) $ (204.0) $ (209.1)

Free Cash Flow $ (76.6) $ 175.0 $ 173.4 $ 193.5 $ 213.5 $ 214.8 $ 205.49

Terminal Value $ - $ - $ - $ - $ - $ - $ -

Present Value Factor 0.000 0.000 0.000 1.000 0.922 0.849 0.783

Discounted Cash Flow $ - $ - $ - $ 193.50 $ 196.79 $ 182.50 $ 160.88

Industry Value thru 2044 $ 1,762.80

Cash Flow Statement 

STANDARD CASE SCENARIO

Industry Income Statement

r r 

I I I I 

I 

I 

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