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<br />88
<br />Page 34
<br />
<br />I Fiaure A
<br />
<br />".~.oo j
<br />S 11 ,50e,ooo
<br />
<br />i
<br />511,000,000 .!
<br />!
<br />
<br />.:",0 ;
<br />
<br />~,,'i'.";"/i" 11,997,081
<br />
<br />..~""11.354,687
<br />".p,r'"'<'''
<br />
<br />4)
<br />11.284.58
<br />
<br />....;.A
<br />
<br />I
<br />i
<br />$10,500,000 ~
<br />J .~ W'
<br />! $10,000,000 b ~"~,?~~~:~,:,~~?,,,,,,...,,,,:,~;.,~~,~;~~,,,,.~,,.~?:.~,~?:??~,,.."..,~,.~~~?,?,:.?:~",.,.,*,,,~,~:,~~~;~~~,,,~,~.';'~ 1 00 000
<br />
<br />s::
<br />Gl
<br />>
<br />Gl
<br />rr
<br />~ 59,600,000
<br />"
<br />o
<br />E
<br />E
<br />8 59.000.000
<br />
<br />0" 10.732.287
<br />
<br />. 10,652,187
<br />
<br />S8,500,OOO
<br />
<br />I --- . in n10 '1A7;. -
<br />52.85M 52.218M S1.585M $0,953M SO,713M I
<br />I $33.80llon $26.30llon $18,801101\ $11 ,30lton S8.4Slton I
<br />I ---- - ---l
<br />I 0- 9,387,387 !
<br />! i
<br />~ 0 g, 147 .075 i
<br /> .-.....
<br />; - !
<br />L--- ;
<br /> "~ R 51~ ~..,c:::
<br />I i
<br />I i
<br /> - --- j
<br /> .. 7.882,275 i
<br /> I
<br /> - I
<br /> I
<br /> SBR .. .. 7,250,000 I
<br /> 7,250,000 I
<br /> --- ~".~_.- ......-
<br />
<br />S8.000,OOO
<br />
<br />$7,500,000
<br />
<br />$7,000.000
<br />
<br />$0.00
<br />
<br />$85.98
<br />
<br />$95,98
<br />
<br />5105.98 $115.98 $119.78
<br />Price per Ton
<br />
<br />$129.78
<br />
<br />$139.78
<br />
<br />$149.78
<br />
<br />It is important to consider in the evaluation of the two short listed firms the ability of one
<br />company to market commodities at a higher price than another company. In information
<br />provided by the two companies, a substantial difference in reported commodity sale revenues
<br />exists between the two proposing companies. In the original proposals, HBC referenced an
<br />average material sale price of $203.34 per ton compared to a material sale price of $228.49 per
<br />ton by SBR. In fact during the fourth quarter of 2007, SBR's commodity prices were $25.15 per
<br />ton, or 12.4% higher than those of HBC.
<br />
<br />If this historic commodity sales information reported by the two companies can be used to
<br />forecast future sales prices, then SBR would generate more commodity revenues than HBC.
<br />This higher sales revenue by SBR could have the impact of canceling out the higher Revenue
<br />Guarantee offered by HBC. For example, SBR could "catch up" to the higher Revenue
<br />Guarantee offered by HBC, if the commodity prices they obtain are $11.27 per ton higher than
<br />HBC's (this is computed by taking the $8.45 per ton difference previously cited and dividing it by
<br />.75). Hence if SBR is able to command commodity prices of $138.05 per ton or higher ($119.78
<br />+ $11.27), then SBR would "catch-up" with HBC's Revenue Guarantee.
<br />
<br />Operatina Cost
<br />
<br />Another factor in considering the Revenue Guarantee offered by companies is to consider it in
<br />relation to the company's proposed annual operating costs. In the case of HBC, HBC's
<br />proposal will cost the SBWMA $1.82M per year more than SBR in operating costs. The
<br />analysis provided in Table 5, compares the annual operating costs of the two proposers after
<br />adjusting the operating costs by the commodity revenue generated under their Revenue
<br />
<br />SBWMA - EC Report
<br />
<br />Page
<br />16
<br />
<br />1/15/2009
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