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Line 15—Total Smelter Investment. Enter for each year the total of Lines 09 through 14.

Line 16—Accumulated Depreciation and Amortization. Report for each year accumulated depreciation, amortization and other valuation charges recorded for certified financial statement reporting purposes in relation to smelter investment as reported on Line 15. Other valuation charges are defined in Financial Accounting Standards Board (FASB) Statement No. 19 as losses recognized in connection with an impairment in the value of an unimproved property below its acquisition cost. Refer to Line 17 instructions for additional reporting requirements on smelter facility investments.

Line 17—Net Smelter Investment. Enter for each year the difference between Lines 15 and 16. Attach as part of Exhibit B a schedule classifying gross facility investments, accumulated depreciation, amortization charges, and net facility investments by major pollution control and non-pollution control components. Identify for each asset component the direct versus joint-use investments assigned to the smelter and explain the basis used to allocate amounts associated with joint-use facilities to the smelter.

Line 18—Other Non-Current Assets. Report for each year other assets assignable to the smelter's operations. Attach as part of Exhibit B a schedule reporting by type and amount the major components of such investments.

Line 19—Total Smelter Capital Investment. Enter for each year the total of Lines 08, 17 and 18.

Line 20 and 21—Trade Accounts and Notes Payable. Report for each year trade accounts and notes due on the smelter's purchases from unaffiliated suppliers (Line 20) and on its intersegment transfers or purchases from affiliated suppliers (Line 21). Trade payables reported by the smelter as due to affiliated suppliers should be stated or, if necessary, restated on terms equivalent to those received from unaffiliated suppliers on a purchase of comparable materials. Attach as part of Exhibit B a schedule showing adjustments required on the smelter's trade payables to equate trade credit terms received from affiliated and unaffiliated suppliers.

Line 22—Other Expense Accruals. Report for each year payments classified as current for salaries and wages, other employee benefits, operating taxes and related operating expenses assignable to the smelter's operations. Attach as part of Exhibit B a schedule classifying by type and amount the major components of such accruals.

Line 23—Current Notes Payable. Report for each year payments due to nontrade creditors on short-term financing arrangements directly associated with the smelter's operations. Exclude current installments due on long-term debt financing arrangements, notes due to offices and directors, intersegment loans or advances and loans or advances from affiliated operating segments.

Line 24—Other Current Liabilities. Report for each year other nontrade payables classified as current obligations assignable to the smelter's operations.

Line 25—Total Current Liabilities. Enter for each year the total of Lines 20 through 24.

Line 26—Net Smelter Capital Investment. Enter for each year the difference between Lines 19 and 25.

Schedule B.1—Pre-Control Revenue Forecast

General. Use Schedule B.1 to report annual forecasts of operating revenues anticipated during the years 1984 through 1990 from operation of the smelter subject to this NSO application. These pre-control revenue projections should be based on revenues and production associated with operating the smelter without any SO2 air pollution controls that have not been installed as of the NSO application date. Forecast smelter revenues should be expressed on a tolling service equivalent basis as described in Section 2.3.4.

Copper smelters that will process concentrates containing an average of 1,000 pounds per hour or more of arsenic during the forecast period should assume that they will use best engineering techniques to control fugitive emissions of arsenic. All smelters should also assume that they will be required to meet all other regulatory requirements in effect at the time the application is made.

The line items in Schedule B.1 are explained in the following instructions. Attach as part of Exhibit B schedules to (1) explain the methods used to make the required forecasts, (2) explain differences, if any, between historical trends and the forecasts and (3) provide data and information to support the forecasts.

Lines 01 and 05—Concentrates Processed. Report for each year the forecast quantity of concentrates processed for unaffiliated parties (Line 01) and affiliated parties (Line 05).

Lines 02 and 06—Smelting Charge. Report for each year the forecast smelting charge for unaffiliated parties (Line 02) and affiliated parties (Line 06). See Section 2.4 for forecast copper smelting charges furnished by EPA.

Lines 03 and 07—Total Smelter Revenues. Report for each year the forecast total operating revenues derived from processing concentrates. The total for unaffiliated parties (Line 03) is equal to the product of Lines 01, 02, and 04, and for affiliated parties (Line 07), the product of Lines 05, 06, and 08.

Lines 04 and 08—Average Product Grade. Report for each year the forecast average quality rating assigned to concentrates processed for unaffiliated parties (Line 04) and affiliated parties (Line 08).

Line 09—Total Co-Product Revenues. Report for each year the forecast net revenues from sales of co-products derived from the smelter's operations. Attach as part of Exhibit B a schedule showing by individual type of co-product, the forecast quantity produced and sold, forecast market price per unit of sales, and forecast total revenues derived from the co-product sales.

Line 10—Total By-product Revenues From Pollution Control Facilities. Report for each year forecast revenues from the sale of by-products derived from operation of the smelter's pollution control facilities, excluding any SO2 air pollution controls that have not been installed as of the NSO application date. Attach as part of Exhibit B a schedule showing by type of by-product produced (e.g., sulfuric acid) the forecast quantity of output, forecast market price per unit of output sold, and forecast total revenue derived from the by-product sales.

Line 11—Total By-product Revenues From Other Smelter Processing. Report forecast revenues from the sales of gold, silver, and other by-products derived from the smelter's operations. Attach as part of Exhibit B a schedule providing additional documentation as specified in the instructions for Line 10.

Line 12—Total Co-product and By-product Revenues. Enter for each year the total of Lines 09 through 11.

Schedule B.2—Pre-Control Cost Forecast

General. Use Schedule B.2 to report annual forecasts of operating costs anticipated during the years 1984 through 1990 from operation of the smelter subject to this NSO application. These pre-control cost projections should be based on costs and production associated with operating the smelter without any SO2 air pollution controls that have not been installed as of the NSO application date.

Copper smelters that will process concentrates containing an average of 1,000 pounds per hour or more of arsenic during the forecast period should assume that they will use best engineering techniques to control fugitive emissions of arsenic. All smelters should also assume that they will be required to meet all other regulatory requirements in effect at the time the application is made.

The line items in Schedule B.2 are explained in the following instructions. Attach as part of Exhibit B schedules to (1) explain the methods used to make the required forecasts, (2) explain differences, if any, between historical trends and the forecasts, and (3) provide data and information to support the forecasts.

Line 01—Direct Labor Hours. Report for each year the quantity of direct labor hours required to support the processing levels previously reported. Attach as part of Exhibit B an explanation of the labor productivity factors involved.

Line 02—Average Hourly Wage Rate. Report for each year the forecast average wage rate per unit of direct labor input. Attach as part of Exhibit B a description of direct labor cost factors under any existing labor contracts that extend to the forecast period and an explanation of the methodology used to forecast wage rates. EPA-provided forecast wage indices are reported in Section 2.4.

Line 03—Total Wage Payments. Enter for each year the product of Lines 01 and 02.

Line 04—Supplemental Employee Benefits. Report for each year adjustments required to direct labor costs for other employee compensation under supplemental benefit plans. Attach as part of Exhibit B a description of such plans and their costs and an explanation of the methodology used to forecast such costs. EPA-provided forecast wage indices are reported in Section 2.4.

Line 05—Total Production Labor Cost. Enter for each year the total of Lines 03 and 04.

Lines 06, 09, 12, 15 and 18—Energy Quantities. Report for each year the quantity of energy by type required to support the processing levels reported in the smelter's revenue. Attach as part of Exhibit B an explanation of energy characteristics and use factors considered in forecasting the smelter's future energy requirements.

Lines 07, 10, 13, 16, and 19—Unit Prices. Report for each year the forecast price per unit of energy input by type of energy. Attach as part of Exhibit B a description of the energy price factors under any existing energy contracts that extend to the forecast period and an explanation of the methodology used to forecast unit energy prices. EPA-provided forecast energy indices are reported in Section 2.4.

Lines 08, 11, 14, 17, and 20—Total Payments. Enter for each year the products of quantity and prices paid for electricity (Lines 06×07), natural gas (Lines 09×10), coal (Lines 12×13), fuel oil (Lines 15×16), and other (Lines 18×19).

Line 21—Total Energy Costs. Enter for each year the total of Lines 08, 11, 14, 17, and 20.

Schedule B.3—Pre-Control Forecast Profit and Loss Summary

General. Use Schedule B.3 to report annual forecasts of operating revenues and operating costs derived in Schedules B.1 and B.2 for the years 1984 through 1990. The transfer of line items from Schedules B.1 and B.2 to this Schedule is explained in the following instructions.

Line 01—Smelter Revenues-Unaffiliated Parties. Enter the totals reported in Schedule B.1, Line 03.

Line 02—Smelter Revenues-Affiliated Parties. Enter the totals reported in Schedule B.1, Line 07.

Line 03—Co-product and By-product Sales Revenues. Enter the totals reported in Schedule B.1, Line 12.

Line 04—Other Operating Revenues. Report operating revenues anticipated from sources not accounted for under Lines 01 through 03. Refer to instructions for Line 04 of Schedule A.3 for items that should not be included in “Other Operating Revenues.” Attach as part of Exhibit B a schedule showing annual amounts forecast by individual revenue component for “other” operating revenues associated with the smelter's forecast pre-control operations. Identify in the supporting schedule any differences in the “other” revenue components reported in this Schedule and Schedule A.3 and explain the reasons for such differences.

Line 05—Total Operating Revenues. Enter for each year the total of Lines 01 through 04.

Line 06—Material Costs. Report total costs forecast for flux, refractories, coke and other materials directly associated with the smelter's processing of concentrates. Attach as part of Exhibit B a schedule showing the annual amounts forecast by major material cost components. For each cost component, identify the forecast quantity and unit price elements of material cost and explain the basis for forecasting these quantity and price elements. Identify in the supporting schedule any differences in the “other” material cost components shown in this Schedule and Schedule A.3 and explain the reasons for such differences.

Line 07—Production Labor Costs. Enter the totals reported in Schedule B.2, Line 05.

Line 08—Energy Costs. Enter the totals reported in Schedule B.2, Line 21.

Line 09—Pollution Control Costs. Report the total costs forecast for expenses identifiable with operation and maintenance of all pollution control equipment and facilities except any SO2 air pollution controls that have not been installed as of the NSO application date. By-product credits associated with operation of the pollution control facilities should be eliminated from the cost accounts, reclassified to Schedule B.1, Line 10 and included in Line 03 of this Schedule. Attach a schedule as part of Exhibit B classifying pollution control costs by major cost components. Explain the basis used for estimating each of the cost components.

Line 10—Production Overhead Costs. Report the total costs forecast for indirect labor, indirect materials and other production overhead costs associated with the smelter's operations. Attach as part of Exhibit B a schedule showing annual overhead costs projected by major cost components associated with the smelter's operations. For each cost component, where appropriate, identify the forecast quantity and unit price elements of overhead costs and explain the basis for estimating these quantity and price elements. Also identify in the supporting schedule any differences in production overhead cost classifications used in this Schedule and Schedule A.3 and explain the reasons for such differences.

Line 11—Other Production Costs. Report other forecast production costs not previously reported on Lines 06 through 10. Attach as part of Exhibit B supporting schedules showing the basis of the forecasts.

Line 12—Total Cost of Sales. Enter for each year the sum of operating costs reported on Lines 06 through 11.

Line 13—Gross Operating Profit. Enter for each year the difference between Lines 05 and 12.

Line 14—Selling, General and Administrative Expenses. Report the total costs forecast for administrative, marketing and general corporate overhead functions that directly or indirectly support the smelter's operations. Refer to the NSO Financial Reporting Overview for a general discussion of indirect cost allocations from overhead cost pools. Attach as part of Exhibit B a schedule classifying selling, general and administrative expenses into major cost components. Indicate whether each component represents costs directly assignable to the smelter or indirect costs allocated from other business segments to the smelter. Explain the basis used for estimating the amount of expected costs included in each component and the basis used for allocating indirect cost elements to the smelter. Identify and explain any differences between the selling, general and administrative cost classification used in this Schedule and that used in Line 15 of Schedule A.3.

Line 15—Taxes, Other than Income Taxes. Report the total costs forecast for property taxes and associated levies paid to governmental units by or for the benefits of the smelter operation. Attach as part of Exhibit B a schedule classifying operating taxes by major component. Indicate whether each component represents taxes directly assignable to the smelter or taxes that have been allocated among more than one facility. Explain the basis used for estimating taxes and the basis for any allocation of taxes to the smelter. Identify and explain any differences between the component classifications used in this Schedule and those used in Line 16 of Schedule A.3.

Line 16—Research Costs. Report the estimates of research costs incurred directly by or for the benefit of the smelter operations. Attach as part of Exhibit B a schedule classifying the costs by major direct and indirect assigned components. Explain the basis for estimating the costs assigned to each component. Identify and explain any differences between classifications used in this Schedule and those used in Line 17 of Schedule A.3.

Line 17—Pollution Control Facility Depreciation and Amortization. Report the estimates of depreciation and amortization charges associated with the smelter's actual and forecast investment in all pollution control equipment and facilities except any SO2 air pollution controls that have not been installed as of the NSO application date. Reported charges should be computed in accordance with depreciation and amortization methods adopted for certified financial statement reporting purposes by the firm. Attach explanatory supporting schedules as part of Exhibit B.

Line 18—Other Smelter Facility Depreciation and Amortization. Report the pro forma estimates of depreciation and amortization charges associated with the smelter's investment in equipment and facilities other than those classified as pollution control facilities. Attach explanatory supporting schedules as part of Exhibit B.

Line 19—Interests. Report the estimates of interest and other financing charges on the smelter's current and long-term liabilities. Attach as part of Exhibit B a schedule showing the interest-bearing debt contracts identifiable with the smelter's operations, the interest rate projected for these contracts, and the estimated annual interest charges.

Line 20—Miscellaneous Operating Expenses. Report only the total operating expenses associated with or allocated to the smelter that cannot be appropriately classsified in one of the preceding line items. Attach as part of Exhibit B a schedule showing the classification of these residual operating expenses into major cost components. Explain the basis used for forecasting the cost under each component. Identify each cost component in terms of direct or indirect cost and explain the basis used for allocating the indirect costs to smelter operations. Identify and explain any differences between cost classifications included in this Schedule and those used in Line 21 of Schedule A.3.

Line 21—Total Other Operating Expenses. Enter for each year the sum of operating costs reported on Lines 14 through 20.

Line 22—Income From Operations. Enter for each year the difference between Lines 21 and 13.

Schedule B.4—Constant Controls Revenue Forecast

General. Use Schedule B.4 to report annual forecasts of operating revenues anticipated during the years 1984 through 1990 from operation of the smelter subject to this NSO application. These constant controls revenue forecasts should be based on an assumption that the applicant immediately implements a program of additional pollution control facility investments sufficient to achieve full compliance with the smelter's SIP stack emission limitations for sulfur dioxide. Forecast smelter revenues should be expressed on a tolling service equivalent basis as described in Section 2.3.4.

The assumed investment program should be based on whichever adequately demonstrated system, applicable to the smelter, that would be most economically beneficial subsequent to installation of the system. For this purpose, adequately demonstrated systems include those specified in Section 57.102(b)(1).

Copper smelters that will process concentrates containing an average of 1,000 pounds per hour or more of arsenic during the forecast period should assume that they will use best engineering techniques to control fugitive emissions of arsenic. All smelters should also assume that they will be required to meet all other regulatory requirements in effect at the time the application is made.

The line items in Schedule B.4 are explained in the following instructions. Attach as part of Exhibit B schedules to (1) explain the methods used to make the required forecasts, (2) explain differences, if any, between historical trends and the forecasts, and (3) provide data and information to support the forecasts.

Lines 01 and 05—Concentrates Processed. Report for each year the forecast quantity of concentrates processed for unaffiliated parties (Line 01) and affiliated parties (Line 05).

Lines 02 and 06—Smelting Charge. Report for each year the forecast smelting charge for unaffiliated parties (Line 02) and affiliated parties (Line 06). See Section 2.4 for forecast copper smelting charges furnished by EPA.

Lines 03 and 07—Total Smelter Revenues. Report for each year the forecast total operating revenues derived from processing concentrates. The total for unaffiliated parties (Line 03) is equal to the product of Lines 01, 02, and 04, and for affiliated parties (Line 07), the product of Lines 05, 06, and 08.

Lines 04 and 08—Average Product Grade. Report for each year the forecast average quality rating assigned to concentrates processed for unaffiliated parties (Line 04) and affiliated parties (Line 08).

Line 09—Total Co-Product Revenues. Report for each year the forecast net revenues from sales of co-products derived from the smelter's operations. Attach as part of Exhibit B a schedule showing by individual type of co-product, the forecast quantity produced and sold, forecast market price per unit of sales, and forecast total revenues derived from the co-product sales.

Line 10—Total By-product Revenues From Pollution Control Facilities. Report for each year forecast revenues from the sale of by-products derived from operation of the smelter's pollution control facilities. Attach as part of Exhibit B a schedule showing by type of by-product produced (e.g., sulfuric acid) the forecast quantity of output, forecast market price per unit of output sold, and forecast total revenue derived from the by-product sales.

Line 11—Total By-product Revenues From Other Smelter Processing. Report forecast revenues from the sales of gold, silver, and other by-products derived from the smelter's operations. Attach as part of Exhibit B a schedule providing additional documentation as specified in the instructions for Line 10.

Line 12—Total Co-product and By-product Revenues. Enter for each year the total of Lines 09 through 11.

Schedule B.5—Constant Controls Cost Forecast

General. Use Schedule B.5 to report annual forecasts of operating costs anticipated during the years 1984 through 1990 from operation of the smelter subject to this NSO application. These constant controls cost forecasts should be based on an assumption that the applicant immediately implements a program of additional pollution control facility investments sufficient to achieve full compliance with the smelter's SIP stack emission limitations for sulfur dioxide.

The assumed investment program should be based on whichever adequately demonstrated system, applicable to the smelter, would be most economically beneficial subsequent to installation of the system. For this purpose, adequately demonstrated systems include those specified in §57.102(b)(1).

Copper smelters that will process concentrates containing an average of 1,000 pounds per hour or more of arsenic during the forecast period should assume that they will use best engineering techniques to control fugitive emissions of arsenic. All smelters should also assume that they will be required to meet all other regulatory requirements in effect at the time the application is made.

The line items in Schedule B.5 are explained in the following instructions. Attach as part of Exhibit B schedules to (1) explain the methods used to make the required forecasts, (2) explain differences, if any, between historical trends and the forecasts, and (3) provide data and information to support the forecasts.

Line 01—Direct Labor Hours. Report for each year the quantity of direct labor hours required to support the processing levels previously reported. Attach as part of Exhibit B an explanation of the labor productivity factors involved.

Line 02—Average Hourly Wage Rate. Report for each year the forecast average wage rate per unit of direct labor input. Attach as part of Exhibit B a description of direct labor cost factors under any existing labor contracts that extend to the forecast period and an explanation of the methodology used to forecast wage rates. EPA-provided forecast wage indices are reported in Section 2.4.

Line 03—Total Wage Payments. Enter for each year the product of Lines 01 and 02.

Line 04—Supplemental Employee Benefits. Report for each year adjustments required to direct labor costs for other employee compensation under supplemental benefit plans. Attach as part of Exhibits B a description of such plans and their costs and an explanation of the methodology used to forecast such costs. EPA-provided forecast wage indices are reported in Section 2.4.

Lines 05—Total Production Labor Cost. Enter for each year the total of Lines 03 and 04.

Lines 06, 09, 12, 15 and 18—Energy Quantities. Report for each year the quantity of energy by type required to support the processing levels reported in the smelter's revenue. Attach as part of Exhibit B an explanation of energy characteristics and use factors considered in forecasting the smelter's future energy requirements.

Lines 07, 10, 13, 16, and 19—Unit Prices. Report for each year the forecast price per unit of energy input by type of energy. Attach as part of Exhibit B a description of the energy price factors under any existing energy contracts that extend to the forecast period and an explanation of the methodology used to forecast unit energy prices. EPA-provided forecast energy indices are reported in Section 2.4.

Lines 08, 11, 14, 17, and 20—Total Payments. Enter for each year the products of quantity and prices paid for electricity (Lines 06×07), natural gas (Lines 09×10), coal (Lines 12×13), fuel oil (Lines 15×16), and other (Lines 18×19).

Lines 21—Total Energy Costs. Enter for each year the total of Lines 08, 11, 14, 17, and 20.

Schedule B.6—Constant Controls Forecast Profit and Loss Summary for the Profit Protection Test

General. Use Schedule B.6 to report annual forecasts of operating revenues and operating costs derived in Schedules B.4 and B.5 for the years 1984 through 1990. These constant controls forecasts should be based on an assumption that the applicant immediately implements a program of additional pollution control facility investments sufficient to achieve full compliance with the smelter's SIP stack emission limitations for sulfur dioxide. The transfer of line items from Schedules B.4 and B.5 to this Schedule is explained in the following instructions.

Line 01—Smelter Revenues-Unaffiliated Parties. Enter the totals reported in Schedule B.4, Line 03.

Line 02—Smelter Revenues-Affiliated Parties. Enter the totals reported in Schedule B.4, Line 07.

Line 03—Co-product and By-product Sales Revenues. Enter the totals reported in Schedule B.4, Line 12.

Line 04—Other Operating Revenues. Report operating revenues anticipated from sources not accounted for under Lines 01 through 03. Refer to instructions for Line 04 of Schedule A.3 for items that should not be included in “Other Operating Revenues.” Attach as part of Exhibit B a schedule showing annual amounts forecast by individual revenue component for “other” operating revenues associated with the smelter's forecast constant controls operations. Identify in the supporting schedule any differences in the “other” revenue components reported in this Schedule and Schedule A.3 and explain the reasons for such differences.

Line 05—Total Operating Revenues. Enter for each year the total of Lines 01 through 04.

Line 06—Material Costs. Report total costs forecast for flux, refractories, coke and other materials directly associated with the smelter's processing of concentrates. Attach as part of Exhibit B a schedule showing the annual amounts forecast by major material cost components. For each cost component, identify the forecast quantity and unit price elements of material cost and explain the basis for forecasting these quantity and price elements. Identify in the supporting schedule any differences in the “other” material cost components shown in this Schedule and Schedule A.3 and explain the reasons for such differences.

Line 07—Production Labor Costs. Enter the totals reported in Schedule B.5, Line 05.

Line 08—Energy Costs. Enter the totals reported in Schedule B.5, Line 21.

Line 09—Pollution Control Costs. Report the total costs forecast for expenses identifiable with operation and maintenance of all pollution control equipment and facilities. By-product credits associated with operation of the pollution control facilities should be eliminated from the cost accounts, reclassified to Schedule B.4, Line 10 and included in Line 03 of this Schedule. Attach a schedule as part of Exhibit B classifying pollution control costs by major cost components. Explain the basis used for estimating each of the cost components.

Line 10—Production Overhead Costs. Report the total costs forecast for indirect labor, indirect materials and other production overhead costs associated with the smelter's constant controls forecasts. Attach as part of Exhibit B a schedule showing annual overhead costs projected by major cost components associated with the smelter's operations. For each cost component, where appropriate, identify the forecast quantity and unit price elements of overhead costs and explain the basis for estimating these quantity and price elements. Also identify in the supporting schedule any differences in production overhead cost classifications used in this Schedule and Schedule A.3 and explain the reasons for such differences.

Line 11—Other Production Costs. Report other forecast production costs not previously reported on Lines 06 through 10. Attach as part of Exhibit B supporting schedules showing the basis of the forecasts.

Line 12—Total Cost of Sales. Enter for each year the sum of operating costs reported on Lines 06 through 11.

Line 13—Gross Operating Profit. Enter for each year the difference between Lines 05 and 12.

Line 14—Selling, General and Administrative Expenses. Report the total costs forecast for administrative, marketing and general corporate overhead functions that directly or indirectly support the smelter's operations. Refer to the NSO financial Reporting Overview for a general discussion of indirect cost allocations from overhead cost pools. Attach as part of Exhibit B a schedule classifying selling, general and administrative expenses into major cost components. Indicate whether each component represents costs directly assignable to the smelter or indirect costs allocated from other business segments to the smelter. Explain the basis used for estimating the amount of expected costs included in each component and the basis used for allocating indirect cost elements to the smelter. Identify and explain any differences between the selling, general and administrative cost classification used in this Schedule and that used in Line 15 of Schedule A.3.

Line 15—Taxes, Other than Income Taxes. Report the total costs forecast for property taxes and associated levies paid to governmental units by or for the benefit of the smelter operation. Attach as part of Exhibit B a schedule classifying operating taxes by major component. Indicate whether each component represents taxes directly assignable to the smelter or taxes that have been allocated among more than one facility. Explain the basis used for estimating taxes and the basis for any allocation of taxes to the smelter. Identify and explain any differences between the component classifications used in this Schedule and those used in Line 16 of Schedule A.3.

Line 16—Research Costs. Report the estimates of research costs incurred directly by or for the benefit of the smelter operations. Attach as part of Exhibit B a schedule classifying the costs by major direct and indirect cost components. Explain the basis for estimating the costs assigned to each component. Identify and explain any differences between classifications used in this Schedule and those used in Line 17 of Schedule A.3.

Line 17—Pollution Control Facility Depreciation and Amortization. Report the estimates of depreciation and amortization charges associated with the smelter's actual and forecast investment in all pollution control equipment and facilities. Reported charges should be completed in accordance with depreciation and amortization methods adopted for certified financial statement reporting purposes by the firm. Attach explanatory supporting schedules as part of Exhibit B.

Line 18—Other Smelter Facility Depreciation and Amortization. Report the pro forma estimates of depreciation and amortization charges associated with the smelter's investment in equipment and facilities other than those classified as pollution control facilities. Attach explanatory supporting schedules as part of Exhibit B.

Line 19—Interest. Report the estimates of interest and other financing charges on the smelter's current and long-term liabilities. Attach as part of Exhibit B a schedule showing the interest-bearing debt contracts identifiable with the smelter's operations, the interest rate projected for these contracts, and the estimated annual interest charges.

Line 20—Miscellaneous Operating Expenses. Report only the total operating expenses associated with or allocated to the smelter that cannot be appropriately classified in one of the preceding line items. Attach as part of Exhibit B a schedule showing the classification of these residual operating expenses into major cost components. Explain the basis used for forecasting the cost under each component. Identify each cost component in terms of direct or indirect cost and explain the basis used for allocating the indirect costs to smelter operations. Identify and explain any differences between cost classifications included in this Schedule and those used in Line 21 of Schedule A.3.

Line 21—Total Other Operating Expenses. Enter for each year the sum of operating costs reported on Lines 14 through 20.

Line 22—Income From Operations. Enter for each year the difference between Lines 21 and 13.

Schedule B.7—Profit Protection Test

General. Applicants must complete this Schedule and/or Schedule C.4 and the accompanying schedules if they seek eligibility for an NSO. The line items in Schedule B.7 are explained in the following instructions.

Line 01—Net Income from Operations. Enter for each year the amounts reported in Schedule B.3, Line 22.

Line 02—Discount Factors. Enter the discount factor for each year, computed as described in the instructions under Section 2.6.

Line 03—Present Value of Future Net Income. Enter for each year the product of Lines 01 and 02.

Line 04—Horizon Value. Enter under the Total column, the estimated horizon value of the smelter. This shall be computed by capitalizing the forecast net income from operations in Line 01 as described in the instructions under Section 2.7.

Line 05—Discount Factor. Enter under the Total column the appropriate discount factor corresponding to the weighted cost of capital, computed as described in the instructions under Section 2.6.

Line 06—Present Value of Horizon Value. Enter under the Total column the product of Lines 04 and 05.

Line 07—Present Value of Future Net Income. Enter under the Total Column the sum of amounts previously reported on Line 03 for 1984 through 1990.

Line 08—Total Present Value. Enter for each year the sum of Lines 06 and 07.

Line 09—Net Income from Operations. Enter for each year the amount reported in Schedule B.6, Line 22.

Line 10—Discount Factors. Follow the instructions for Line 02.

Line 11—Present Value of Future Net Income. Enter for each year the product of Lines 09 and 10.

Line 12—Horizon Value. Enter under the Total column, the estimated horizon value of the smelter. This shall be computed by capitalizing the forecast net income from operations in Line 09 as described in the instructions under Section 2.7.

Line 13—Discount Factor. Follow the instructions for Line 05.

Line 14—Present Value of Horizon Value. Enter under the Total column the product of Lines 12 and 13.

Line 15—Present Value of Future Net Income. Enter under the Total column the sum of amounts previously reported on Line 11 for 1984 through 1990.

Line 16—Total Present Value. Enter the sum of Lines 14 and 15.

Line 17—Ratio for Total Present Value of Constant Controls Case to Total Present Value of Pre-Control Case. Enter the ratio of Lines 16 to 08. If this ratio is less than .50, the smelter passes the Profit Protection Test. An applicant also passes the Profit Protection Test if the reported total present value of pre-tax profits for the pre-control case on Line 08 is a negative value.

Schedule C.1—Constant Controls Forecast Profit and Loss Summary for the Rate of Return Test

General. Use Schedule C.1 to report forecast revenue and cost information derived in Schedules B.4 and B.5 for the years 1984 through 1990. These constant controls forecasts should be based on an assumption that the applicant immediately implements a program of additional pollution control facility investments sufficient to achieve full compliance with the smelter's SIP stack emission limitations for sulfur dioxide. The transfer of line items from Schedules B.4 and B.5 to this Schedule is explained in the following instructions.

Line 01—Smelter Revenues-Unaffiliated Parties. Enter the totals reported in Schedule B.4, Line 03.

Line 02—Smelter Revenues-Affiliated Parties. Enter the totals reported in Schedule B.4, Line 07.

Line 03—Co-product and By-product Sales Revenues. Enter the totals reported in Schedule B.4, Line 12.

Line 04—Other Operating Revenues. Report operating revenues anticipated from sources not accounted for under Lines 01 through 03. Refer to instructions for Line 04 of Schedule A.3 for items that should not be included in “Other Operating Revenues.” Attach as part of Exhibit B a schedule showing annual amounts forecast by individual revenue component for “other” operating revenues associated with the smelter's forecast constant controls operations. Identify in the supporting schedule any differences in the “other” revenue components reported in this Schedule and Schedule A.3 and explain the reasons for such differences.

Line 05—Total Operating Revenues. Enter for each year the total of Lines 01 through 04.

Line 06—Material Costs. Report total costs forecast for flux, refractories, coke and other materials directly associated with the smelter's processing of concentrates. Attach as part of Exhibit B a schedule showing the annual amounts forecast by major material cost components. For each cost component, identify the forecast quantity and unit price elements of material cost and explain the basis for forecasting these quantity and price elements. Identify in the supporting schedule any differences in the “other” material cost components shown in this Schedule and Schedule A.3 and explain the reasons for such differences.

Line 07—Production Labor Costs. Enter the totals reported in Schedule B.5, Line 05.

Line 08—Energy Costs. Enter the totals reported in Schedule B.5, Line 21.

Line 09—Pollution Control Costs. Report the total costs forecast for expenses identifiable with operation and maintenance of all pollution control equipment and facilities. By-product credits associated with operation of the pollution control facilities should be eliminated from the cost accounts, reclassified to Schedule B.4, Line 10 and included in Line 03 of this Schedule. Attach a schedule as part of Exhibit B classifying pollution control costs by major cost components. Explain the basis used for estimating each of the cost components.

Line 10—Production Overhead Costs. Report the total costs forecast for indirect labor, indirect materials and other production overhead costs associated with the smelter's constant controls forecasts. Attach as part of Exhibit B a schedule showing annual overhead costs projected by major cost components associated with the smelter's operations. For each cost component, where appropriate, identify the forecast quantity and unit price elements of overhead costs and explain the basis for estimating these quantity and price elements. Also identify in the supporting schedule any differences in production overhead cost classifications used in this Schedule and Schedule A.3 and explain the reasons for such differences.

Line 11—Other Production Costs. Report other forecast production costs not previously reported on Lines 06 through 10. Attach as part of Exhibit B supporting schedules showing the basis of the forecasts.

Line 12—Total Cost of Sales. Enter for each year the sum of operating costs reported on Lines 06 through 10.

Line 13—Gross Operating Profit. Enter for each year the difference between Lines 05 and 12.

Line 14—Selling, General and Administrative Expenses. Report the total costs forecast for administrative, marketing and general corporate overhead functions that directly or indirectly support the smelter's operations. Refer to the NSO Financial Reporting Overview for a general discussion of indirect cost allocations from overhead cost pools. Attach as part of Exhibit B a schedule classifying selling, general and administrative expenses into major cost components. Indicate whether each component represents costs directly assignable to the smelter or indirect costs allocated from other business segments to the smelter. Explain the basis used for estimating the amount of expected costs included in each component and the basis used for allocating indirect cost elements to the smelter. Identify and explain any differences between the selling, general and administrative cost classification used in this Schedule and that used in Line 15 of Schedule A.3.

Line 15—Taxes, Other than Income Taxes. Report the total costs forecast for property taxes and associated levies paid to governmental units by or for the benefit of the smelter operation. Attach as part of Exhibit B a schedule classifying operating taxes by major component. Indicate whether each component represents taxes directly assignable to the smelter or taxes that have been allocated among more than one facility. Explain the basis used for estimating taxes and the basis for any allocation of taxes to the smelter. Identify and explain any differences between the component classifications used in this Schedule and those used in Line 16 of Schedule A.3.

Line 16—Research Costs. Report the estimates of research costs incurred directly by or for the benefit of the smelter operations. Attach as part of Exhibit B a schedule classifying the costs by major direct and indirect costs components. Explain the basis for estimating the costs assigned to each component. Identify and explain any differences between classifications used in this Schedule and those used in Line 17 of Schedule A.3.

Line 17—Pollution Control Facility Depreciation and Amortization. Report the estimates of depreciation and amortization charges associated with the smelter's actual and forecast investment in all pollution control equipment and facilities. Reported charges should be computed in accordance with depreciation and amortization methods adopted for tax reporting purposes by the firm. Attach explanatory supporting schedules as part of Exhibit B.

Line 18—Other Smelter Facility Depreciation and Amortization. Report the pro forma estimates of depreciation and amortization charge associated with the smelter's investment in equipment and facilities other than those classified as pollution control facilities. Attach explanatory supporting schedules as part of Exhibit B.

Line 19—Interest on Short-Term Debt. Report the estimates of interest and other financing charges on forecast short-term obligations as classified in the smelter's current liabilities on Schedule A.4. Interest and associated financing charges on long-term debt should not be included as an expense identifiable with the smelter's operations. Attach as part of Exhibit B a schedule showing the interest-bearing, short-term debt contracts identifiable with the smelter's operations, the interest rate projected for these contracts, and the estimated annual interest charges. Identify and explain any differences between the classifications used in this Schedule and those used in Line 20 of Schedule A.3.

Line 20—Miscellaneous Operating Expenses. Report only the total operating expenses associated with or allocated to the smelter that cannot be appropriately classified in one of the preceding line items. Attach as part of Exhibit B a schedule showing the classification of these residual operating expenses into major cost components. Explain the basis used for forecasting the cost under each component. Identify each cost component in terms of direct or indirect cost and explain the basis used for allocating the indirect costs to smelter operations. Identify and explain any differences between cost classification included in this Schedule and those used in Line 21 of Schedule A.3.

Line 21—Total Other Operating Expenses. Enter for each year the sum of operating costs reported on Lines 14 through 20.

Line 22—Income From Operations. Enter for each year the difference between Lines 21 and 13.

Line 23—Income Taxes. Enter the product of income from operations (Line 22) and the sum of the Federal, State and local marginal tax rates. Attach as part of Exhibit B a schedule detailing the estimated marginal tax rate by taxing entity.

Line 24—Net Income From Operations. Enter for each year the difference between Lines 23 and 22.

Schedule C.2—Constant Controls Sustaining Capital Investment Forecast

General. The applicant should estimate and report, in Schedule C.2, yearly sustaining capital outlays for maintenance of the smelter's existing productive capability. These estimates should be forecast under the assumption that full compliance with SIP emission limitations for SO2 will be achieved. Major elements of these outlays should be disclosed, as well as the total of such outlays. Estimates shall be restricted to those items that will be capitalized for tax purposes. These outlays shall primarily be for plant replacement, although outlays for improvements and expansion may be included to the extent that improvements and/or expansion, exclusive of required pollution control outlays, can be justified as economically feasible. Estimates of sustaining capital shall exclude any incremental investment for constant control requirements. Sustaining capital investments in facilities shared with other operating segments shall be allocated in accordance with the instructions given below.

Estimates of sustaining capital shall be compatible with productive capacity and pollution control requirements underlying the operating revenue and cost forecasts incorporated in Schedule C.1.

Lines 01 to 06—Sustaining Capital. Report for each year by individual line item property, plant and equipment sustaining capital investments assignable to smelter operations. Include both (1) property, plant and equipment directly associated with the smelter's operations and (2) facilities shared with other operating segments to the extent that a causal and beneficial relationship can be established for the intersegment allocations of such facility investments.

Attach as part of Exhibit B an explanatory schedule disclosing and supporting by individual line item the major elements of annual capital expenditures for sustaining capital. Further classify these annual capital expenditures into both (1) investments required to maintain the smelter versus investments in smelter expansion and improvements and (2) direct facility versus joint-use facility investments. Explain the method used for allocating capital expenditures on joint-use facilities to the smelter's operations.

Line 07—Total Smelter Sustaining Capital. Enter for each year the total of Lines 01 through 06. Transfer the reported total for each year to Schedule C.4, Line 06.

Schedule C.3—Historical Capital Investment In Constant Dollars

General. Use Schedule C.3 to report the end-of-period asset investments and current liabilities for the most recent fiscal year: (a) expressed in nominal dollars as of the date of the original transaction, and (b) expressed in the current year's dollars, i.e. 1984 dollars. The value of net investment in constant dollars (1984 dollars for smelters applying for an NSO in 1984) is used in Schedule C.4 as the benchmark of the Rate of Return Test.

Applicants should complete Schedule C.3 according to the following instructions. Transfer into the first column of Schedule C.3 the historical cost figures that are reported in the last (1983) column of Table A.4. In the second column of Schedule C.3, report the figures from the first column of Schedule C.3, expressed in constant (1984) dollars.

Convert each nominal dollar figure of the first column into constant (1984) dollars in accordance with the historical cost/constant dollar accounting method defined in Financial Accounting Standards Board (FASB) Statement No. 33 (Docket Item No. IV-A-6d), with the following exception: the applicant must not report the lower recoverable amount as required by FASB No. 33. Attach explanatory supporting schedules as part of Exhibit B.

Schedule C.4—Rate of Return Test

General. Applicants must complete this Schedule and/or Schedule B.7 and the accompanying schedules if they seek eligibility for an NSO. The line items in Schedule C.4 are explained in the following instructions.

Line 01—Net Income from Operations. Enter for each year the amounts reported in Schedule C.1, Line 24.

Lines 02 and 03—Depreciation and Amortization. Enter for each year the amounts reported in Schedule C.1, Lines 17 and 18, respectively.

Line 04—Operating Cash Flow. Enter foreach year the total of amounts reported on Lines 01 through 03. (continued)