airbus template
DESCRIPTION
airbusTRANSCRIPT
REQUIRED INVESTMENTS 2000-2008
Source 2000 2001 2002 2003 2004 2005 2006 2007 2008Required Investment
Line 1 Exhibit 11 R&D 1,100 2,200 2,200 2,200 1,320 880 660 440 Line 2 Exhibit 11 Capital Expenditure - 250 350 350 50 100 100 100 Line 3 Exhibit 11 Net Working Capital - 150 300 300 200 50 - -
Total 1,100 2,600 2,850 2,850 1,570 1,030 760 540
Cash FlowsLine 4 Line 1 R&D ExpenseLine 5 + Depreciation - (25) (60) (95) (100) (100) (100) (100)Line 6 EBITLine 7 - Taxes of 38%Line 8 EBIAT
Line 9 Adding Line 5 back in + Depreciation - (25) (60) (95) (100) (100) (100) (100)Line 10 Line 2 - Cap ExLine 11 Line 3 - Incr Work CapLine 12 Free Cash Flow
Discount Rate 11%Line 13 Discount Factor 0.901 0.812 0.731 0.659 0.593 0.535 0.482 0.434 Line 14 FCF * DF PV of InvestmentLine 15 Present value of required investments
CASH FLOWS FROM SALES OF A3XXLine 16Line 17 Price per Plane 225 Line 18 x Number of PlanesLine 19 RevenuesLine 20 x Operating Margin of 18% 18%Line 21 Operating ProfitLine 22 + Depr. Adjustment 100 Line 23 Adj Operating ProfitLine 24 - Taxes of 38%Line 25 Annual Cash Flow
Line 26 Value of Perpetuity (2007) = Line 27 Present Value of Sales Annual Cash Flow / (d - g)
(Value of perpetuity (2007) discounted to 2000) Discount rate (d) = 11% Growth rate (g) = 2%
NET PRESENT VALUE OF 3XX PROJECT
Line 28 Net Present Value of 3XX Project
CONVERSION RATE TO VLA45% 55% 65% 75% 85% 95%
0% 12 12 13 13 14 141% 16 17 18 19 20 212% 22 22 24 26 28 293% 26 29 31 34 37 394% 33 36 40 44 47 515% 41 46 51 56 61 656% 51 57 63 70 76 837% 62 70 79 87 95 1038% 76 86 97 107 117 1289% 93 106 118 131 144 157
10% 113 128 144 160 176 192
Reading the chartSuppose the demand for large aircraft grew at an annual rate of 5%. Suppose alsothat Airbus was able to capture 45% of that new demand with A3XX sales(meaning 55% would be served by 747's). The annual demand for VLA such as the A3XX would be 41 aircraft.
ANNUAL DEMAND FOR VLA UNDER DIFFERENT GROWTH AND CONVERSTION RATE ASSUMPTIONS
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