Financial Contemplations FOR A REUSABLE Dispatch VEHICLE.

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Monetary Contemplations FOR A REUSABLE Dispatch VEHICLE National Meeting and Instructive Workshop June 11-14, 2002 Phoenix, Arizona Exhibited by: Wayne A. Johnson Science Applications Global Organization Huntsville, Alabama Foundation
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Financial CONSIDERATIONS FOR A REUSABLE LAUNCH VEHICLE National Conference & Educational Workshop June 11-14, 2002 Phoenix, Arizona Presented by: Wayne A. Johnson Science Applications International Corporation Huntsville, Alabama

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Background NASA Space Launch Initiative (SLI) Managed by NASA Marshall Space Flight Center $4.85B FY02-FY06 Reusable Vehicle Concepts Lower Technical/Business Risks Increase Safety/Reliability Technology Development 22 Contracts Let Spring 2001 SLI review liveliness

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FY06 FY99 FY00 FY01 FY02 FY03 FY04 FY05 Phase 2 Concept Development/Risk Reduction/Advanced Development Phase 1 Concept Definition and Risk Reduction STAS Program Milestones Focused Architecture Selections Program ATP IAR SRR FSD Requirements Definition and Tool Development NRA Cycle II Procurement (NRA8-30 and In-House) 8-27 NRA 8-30 Award for TA1 NRA8-30 Release Base Award Option 1 NRA 8-30 Awards TA2-9 Base Award Option 1 Option 2 (TA 2-9 as suitable) NRA 8-30 Awards for TA-10 Flight Demonstrations Base Award Option 1 Option 2 RFP Release ATP RFP Development Preliminary Design and Advanced Development SLI Schedule Courtesy: NASA

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Stakeholder Perspectives Stakeholder Issues Industry - Launch Providers - Payload Manufacturers Government ISS Support Crew Rotation Logistics Asset Deployment/Recovery Reconnaissance Financiers/Backers Bankers Brokers - Insurers Architecture Size Market Demand Launch Price Safety/Reliability Replacement $ < Shuttle $ Launch Price Safety/Reliability Return on Investment Risk

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Acquisition Phase DDT&E Costs Mission Requirements Trade Analyses Prototypes/Test Units Production Costs Lean Manufacturing Quantities/Element Facilities (New/Refurbish) Booster/Orbiter/CTV Processing Mission Operations Runway Location(s) Temporal (Time Phasing) Debt Instruments Private/Public Debt Internal Government Loans/Guarantees Interest Rate Time

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Operations Phase Recurring - Flight Operations Propellants Labor Insurance Non-Recurring Costs - Ground Support Equipment - Facilities Upgrades Flight Rates Quantities Turn-Around Time Operating Revenues - Price/Flight Facilities - Mission Operations ?

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Advertising Recreation ISS Missions Health & Medicine Satellite Servicing Parcel Deliveries Defense Transportation/Tourism Non-Terrestrial Mining Communications Media (TV, Movies) Applied Sciences Space Agriculture Space Business Parks Energy Earth Observation Space Based Utilities Logistics Support Data Networks On-Orbit Construction Traditional Emerging Market Considerations

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Market Considerations (Cont’d) RLV Faces Competition From Expendable Launch Market Highly Reliable Launchers More Launch Site Choices Worldwide Competition Government Subsidies Tumultuous Commercial Satellite Industry - Mergers & Acquisitions - Regulatory Policies in Emerging Markets Uncertainty in Broadband Market Excess Transponder Capacity Terrestrial Competition Negligible RLV Market for Small and Heavy Payloads - Micro/Small Class (< 5K Lbs.) Best Launched with Expendables - Heavy Payloads (>25K Lbs.) Are Few; Primarily DoD Projections for Intermediate to Large Markets Are Flat Long Range Forecasts are Difficult Projections Needed to 2030 Time Frame for Most Business Cases Technology and External Influences Can Cause Wild Swings

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Satellite Mass Growth Trend Predicted satellite mass no more noteworthy than 20K lbs by 2020 Source: Futron, Inc.

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Financial Metrics Cash Flow The distinction between approaching income and active expenses over a limited time period. This is a decent metric for knowledge into the measure of inflows/surges, their rates of expansion/abatement, and gives transient experiences, for example, speculation recuperation (equal the initial investment) time. Marked down Cash Flow An income rundown that has been acclimated to mirror the time estimation of cash. This idea considers the Present Value (PV) and Future Value (FV) thoughts of monetary investigation. The PV is the thing that future cash is worth in today’s terms. Interior Rate of Return - the rebate rate for which aggregate present estimation of future money streams approaches the venture\'s expense. The IRR is a particular ascertained interest rate that will create a Net Present Value (NPV) of zero. This is an amazing metric to utilize when there is an extensive starting money expense. Payback Period The time allotment needed to recuperate the expense of a speculation, typically measured in years. Different things being equivalent, the venture with a shorter the payback time is better and are for the most part thought to be less dangerous.

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Break-Even Point + Cash Flows 0 Acquisition Phase Operations Phase - Time Cumulative Cash Flow Profile Revenues Exceed Costs Max. Misfortune Exposure Government can hold up longer to recover speculations; industry has shorter time burdens Before/After Tax profiles can contrast fundamentally

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Building a Shuttle Replacement Case No Shuttle Replacement Shuttle Yearly Operations Cost RLV IOC Time A substitution RLV framework must end up being less extravagant to work (in the long haul) than proceeding with Shuttle operations Ongoing transport operations oblige wellbeing and execution redesigns RLV must be more solid and more secure then Shuttle

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A Modeling Approach Sample Data Only

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Sensitivity Analysis FSD Decision in 2006; consistent armada size Production, Facilities, Operations expenses, Launch Prices held Steady State Operations 5 yrs Post IOC All different components equivalent, money related measurements are delicate to obtaining expenses

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Sensitivity Analysis Acquisition and operations expenses held steady Constant business sector costs 20 years of operation post IOC Adequate Facility Capacity to Accommodate Higher Flight Rates As flight rate is multiplied, IRR enhances to a most extreme of 13% over the pattern

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Summary Costs - Acquisition - Operations - Phasing Revenues - Prices Flight Rates - Mission Types - Processing Times Markets Elasticity Emerging Financial Metrics - NPV IRR Payback Period

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