Virginia Transformer Price Adjustment Policy and Index

EFFECTIVE MARCH 29, 2004 – Rev2 May 1, 2006

As a result of significant commodity fluctuations in the market, Virginia Transformer Corp has established a Price Adjustment Policy effective March 29, 2004 as described below. Further, this policy has been revised to a monthly index from quarterly index as of January 1, 2005 and has been further revised to adjust the commodity weightings as of May 1, 2006.

POLICY:

VTC’s selling price will be subject to adjustment at the time of shipment based on a monthly price index as described in this policy. The current price index will be based on the commodity costs for the prior month. The price at shipment will be the quoted price times the price index ratio at the time of shipment. Any resulting purchase order must acknowledge this Price Adjustment Policy.

A1. PRICE INDEX:

A monthly price index (Iq) will be based on the Comex, Core, Steel, Oil, Major Accessories and Labor costs at the middle of each month for the month. Iq for January 2004 will be 1.0. The price index will be published to the VTC web site at the beginning of each month and will be effective for the whole month. The index will be based on the prior month’s prices.

A2. PRICE ADJUSTMENT CALCULATION:

The price index will be used to calculate the adjustment applied to the price at shipment per the below equation:

Equation

Where:

  • Iq = New Price Index for month of shipment
  • I0 = Original Price Index at time of quote
  • Pn = New Price at shipment after adjustment
  • P0 = Original Price at time of quote

Customer price will be increased or decreased at the time of shipment as indicated by the index ratio. The quote proposal will contain the index used at time of proposal.

Virginia Transformer Price Index tracking began on January 1, 2004 with a base index of 1.00

Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2006 170.0 170.5 172.4 174.3 175.1 185.9 188.6 191.2 193.7 194.1 194.0 194.7
2007 197.2 203.1 204.5 204.8 207.2 206.4 207.6 209.7 207.9 208.4 209.6 211.0
2008 217.0 217.9 225.0 226.4 229.6 234.6 239.0 238.2 238.6 238.9 225.3 221.8
2009 215.2 218.5 220.2 219.6 219.7 221.6 221.1 224.4 227.0 228.0 231.2 232.8
2010 235.2 235.6 235.4 235.6 238.4 237.0 236.5 236.6 236.7 237.5 238.5 238.5
2011 240.5 242.9 244.1 245.7 246.5 245.6 245.3 245.3 243.5 243.4 243.4 243.8
2012 246.8 247.1 243.5 245.4 244.6 243.2 240.1 240.2 240.4 241.5 240.4 239.9
2013 241.3 241.3 242.2 240.6 241.9 240.2 239.2 240.6 241.5 240.9 240.5 239.7
2014 240.1 240.4 241.6 241.1 241.6 241.5 242.7 243.0 242.2 241.4 240.0 239.3
2015 237.2 234.9 234.3 231.1 231.8 231.3 230.9 230.1 228.2 225.4 223.9 223.1
2016 223.1 226.4 227.7 228.6 228.5 228.5 228.4 228.1 228.4(P) 228.1(P) 228.2(P) 230.0(P)
P : Preliminary. All indexes are subject to revision four months after original publication.