DraftManufacturerImpactAnalysisC&IPumps2ManufacturerImpactAnalysisPurposeAssesstheimpactsofpotentialenergyconservationstandardsonmanufacturersCashflowmodeltorepresentindustry3IndustryNetPresentValue(INPV)providesasuccinctsummaryofimpactsDiscountedCashFlowModel(2013to2048)Base Yr Ancmt Yr Std YrIndustry Income Statement (in 2013$ millions)2013 2014 2015 2016 2017 2018 2019Revenues 223.7$ 229.0$ 236.4$ 242.9$ 247.5$ 251.2$ 254.8$Total Shipments(million units)0.377 0.385 0.398 0.409 0.417 0.423 0.429- Materials 107.9$ 110.5$ 114.0$ 117.1$ 119.4$ 121.2$ 122.9$- Labor 29.5$ 30.2$ 31.1$ 32.0$ 32.6$ 33.1$ 33.6$- Depreciation 5.8$ 6.0$ 6.1$ 6.3$ 6.4$ 6.5$ 6.6$- Overhead 20.5$ 21.0$ 21.7$ 22.3$ 22.7$ 23.1$ 23.4$- Standard SG&A 48.3$ 49.5$ 51.1$ 52.5$ 53.4$ 54.3$ 55.0$- R&D 3.6$ 3.7$ 3.8$ 3.9$ 4.0$ 4.0$ 4.1$- Product Conversion Costs -$ -$ -$ -$ -$ -$ -$- Stranded Assets -$ -$ -$ -$ -$ -$ -$Earnings Before Interest and Taxes (EBIT) 8.1$ 8.3$ 8.5$ 8.8$ 8.9$ 9.1$ 9.2$Per Unit EBIT($/unit)21.46$ 21.46$ 21.46$ 21.46$ 21.46$ 21.46$ 21.46$EBIT/Revenues (%) 3.6% 3.6% 3.6% 3.6% 3.6% 3.6% 3.6%- Taxes 2.2$ 2.3$ 2.3$ 2.4$ 2.4$ 2.5$ 2.5$Net Operating Profit after Taxes (NOPAT) 5.9$ 6.0$ 6.2$ 6.4$ 6.5$ 6.6$ 6.7$Cash Flow StatementNOPAT 5.9$ 6.0$ 6.2$ 6.4$ 6.5$ 6.6$ 6.7$+ Depreciation 5.8$ 6.0$ 6.1$ 6.3$ 6.4$ 6.5$ 6.6$+ Loss on Disposal of Stranded Assets -$ -$ -$ -$ -$ -$ -$- Change in Working Capital -$ 1.0$ 1.4$ 1.2$ 0.9$ 0.7$ 0.7$Cash Flows from Operations 11.7$ 11.0$ 11.0$ 11.5$ 12.1$ 12.4$ 12.6$- Ordinary Capital Expenditures 6.0$ 6.2$ 6.4$ 6.6$ 6.7$ 6.8$ 6.9$- Capital Conversion Costs -$ -$ -$ -$ -$ -$ -$Free Cash Flow 5.6$ 4.8$ 4.6$ 4.9$ 5.4$ 5.6$ 5.8$Discounted Cash FlowFree Cash Flow 5.6$ 4.8$ 4.6$ 4.9$ 5.4$ 5.6$ 5.8$Terminal Value -$ -$ -$ -$ -$ -$ -$Present Value Factor 0.000 1.000 0.894 0.800 0.716 0.640 0.573Discounted Cash Flow-$ 4.8$ 4.1$ 3.9$ 3.9$ 3.6$ 3.3$INPV at Baseline 55.7$4ManufacturerMarkupScenariosChangeinmanufacturermarkupreflectstheindustry’sabilitytoincreasepricestorecoverconversioncostinvestmentsLowerBound:FlatMarkup•Minimalcostrecovery•Manufacturersarenotabletoraisepricesduetomarketfactors•Minimalchangeinend‐userpricingUpperBound:RecoveryMarkup•Highcostrecovery•ManufacturersareabletoincreaseMSPtorecoverconversioncosts•Maximumincreaseinend‐userpricingPricing&Markups5FlatMarkupBaseCase PER10 PER25 PER40 PER55 PER70ESCC1.35 1.35 1.35 1.35 1.35 1.35ESFM1.33 1.33 1.33 1.33 1.33 1.33IL1.44 1.44 1.44 1.44 1.44 1.44VT‐S1.35 1.35 1.35 1.35 1.35 1.35RS‐VTBD‐‐‐‐‐MarkupsCostRecoveryMarkupBaseCase PER10 PER25 PER40 PER55 PER70ESCC1.35 1.46 1.49 1.51 1.58 1.67ESFM1.33 1.39 1.46 1.50 1.60 1.70IL1.44 1.48 1.52 1.59 1.67 1.76VT‐S1.35 1.38 1.37 1.38 1.41 1.44RS‐VTBD‐‐‐‐‐%ChangeBaseCase PER10 PER25 PER40 PER55 PER70ESCC0% 8% 10% 12% 17% 24%ESFM0% 5% 10% 13% 20% 28%IL0% 3% 6% 10% 16% 22%VT‐S0% 2% 1% 2% 4% 7%RS‐VTBD‐‐‐‐‐6INPVResults$(350.0)$(300.0)$(250.0)$(200.0)$(150.0)$(100.0)$(50.0)$‐$50.0$100.0BaseCase PER10 PER25 PER40 PER55 PER70INPVResultsFlatMarkupCostRecovery7IndustryValuein$MBaseCase PER10 PER25 PER40 PER55 PER70FlatMarkup$55.7$44.3$6.3$(61.3) $(175.4) $(326.4)CostRecoveryMarkup$55.7$53.1$28.3$(24.2) $(108.6) $(149.9)INPVResults%ChangeinIndustryValueBaseCase PER10 PER25 PER40 PER55 PER70FlatMarkup0%‐21%‐89%‐210%‐415%‐686%CostRecoveryMarkup0%‐5%‐49%‐143%‐295%‐369%8Questions?ManufacturerImpactAnalysis