emerging respiratory viruses, where a decoy liposome isengineered to bind, inactivate and clear the viruses. Inaddition to efforts with specific sponsors, the <strong>Laboratory</strong>is an active contributor to advisory boards and panels,with <strong>Draper</strong> staff being appointed members of theDefense and Intelligence Science Boards and the NavalStudies Board.“Making things that work” is central to <strong>Draper</strong>’sreputation for developing and demonstrating newsystems – The vast majority of the <strong>Laboratory</strong>’sprojects design, develop and demonstrate new systemcapabilities. Important accomplishments in <strong>Draper</strong>’s<strong>2010</strong> fiscal year include demonstrating the control andmaneuver capability to guide a 50-caliber bullet, creatingnew precision air drop systems in response to JointUrgent Operational Needs (JUONs) from U.S. forcesin Afghanistan, and developing specialized vanishinglysmall sensors for close-in intelligence/surveillance/reconnaissance (ISR). With Navy Strategic SystemsProjects, the <strong>Laboratory</strong> also successfully flight testedguidance technology required for a maneuvering reentrybody to support a prompt global strike weapon. We areespecially proud of the fact that <strong>Draper</strong> was recognizedthis past year for outstanding accomplishments in thepast. Along with NASA’s Dryden Flight Research Center,we were inducted into the Space Technology Hall ofFame for the first aircraft demonstration of digital fly-bywire.We were also part of the team awarded the <strong>2010</strong>Collier Trophy, the nation’s oldest and most prestigiousaviation award, as part of the team that developed theInternational Space Station.Transitioning systems to operational use is adiscriminating capability – <strong>Draper</strong>’s ability to transitionsystem designs to operational use ensures that the<strong>Laboratory</strong>’s innovation and creativity provides realvalue to the sponsors by being deployed. Our peopleknow that their mission is not finished until they seetheir work in the field. Because of this commitment andthe flexibility provided by our independent not-for-profitstatus, <strong>Draper</strong> has been more effective at transition thanmany other R&D organizations. This year’s annual reporthighlights several successful transitions. Particularlynotable is the Navy’s MK6 submarine-launched ballisticmissile guidance life extension program. Here, <strong>Draper</strong>’straditional design agent role, where after the design isvalidated, it is provided to the government for acquisition,has evolved such that the <strong>Laboratory</strong> will also managethe industrial partners during the production phase. Wecompleted production readiness reviews for all majorsuppliers this year.To transition the specialized vanishingly small sensorsand electronics required for close-in ISR, <strong>Draper</strong>produces the low volumes required by these demandingsponsors. In response to increased demand for thiscapability, we completed the certification of a newmultichip module low-rate fabrication facility inSt. Petersburg, Florida, capping a total investment ofnearly $20 million in this unique national asset. In otherareas, such as precision airdrop for cargo delivery andautonomous control of unmanned underwater vehicles,the <strong>Laboratory</strong> developed open architecture softwarethat was provided to the government for it to furnish tothe commercial contractors that build the platforms. Asa final example of an approach to technology transition,<strong>Draper</strong> is working directly with several of the contractorsthat NASA is seeding to create commercial services tocarry cargo and crew to low earth orbit, particularly theInternational Space Station. As a result, the capabilities<strong>Draper</strong> developed over the last 40 years for safely gettinghumans into space and for the autonomous rendezvousof two spacecraft in orbit will be broadly deployed.None of this is possible without an exceptionally strongstaff and outstanding leadership and management. Ourengineering and technical staff is stronger than ever.Our financial and administration staff is streamliningmanagement and accounting processes, creating theenvironment for solid technical work. The managementteam is truly a team working closely together to leveragethe interdisciplinary skills of the entire laboratory.With sadness, we must report that Lew Allen andKenneth G. McKay, former chairmen of the <strong>Draper</strong> Boardof Directors both passed away this year. We rememberthe significant contributions each of these leaders madeto the <strong>Laboratory</strong>.We are proud of the contributions that <strong>Draper</strong> is makingto national security and a wide range of sponsors. Whilewe see ahead of us some real risks and uncertainties aspressures on our sponsors’ budgets continue to increase,we believe we are well positioned and the future is brightbecause of the <strong>Laboratory</strong>’s long-term relationships withexisting sponsors and our sharp focus on solving criticalproblems facing the nation.John A. Gordon James D. ShieldsChairmanPresident and CEOFinancial Highlights for years 2006-<strong>2010</strong>Dollars in millionsTotal Revenues and SubcontractsDFY10 Sponsored BusinessNavyArmyOther National SecurityNASANon DoDTotal Assets and Net AssetsRevenues Subcontracts Total Assets Net Assetsfiscal year 2006 - <strong>2010</strong> fiscal year 2006 - <strong>2010</strong>$34823%$39610%6%$420$145$432$164$493$162$164Distribution of Internal Research &Development InvestmentsAutonomyBiomedicalEnergyGuidance, Navigation,& ControlInformation &Decision SystemsAdvanced InertialSensingVanishingly SmallSystems<strong>Draper</strong> <strong>Laboratory</strong>’s Fiscal Year <strong>2010</strong> financial statements were audited by PricewaterhouseCoopers, LLP. Its report expressed an unqualifiedopinion that the financial statements are presented fairly, in all material respects, in conformity with accounting principles generally accepted inthe United States of America. Copies of the complete audited financial statements are available upon request.$392$440$259$296 $2962006 2007 2008 2009 <strong>2010</strong> 2006 2007 2008 2009 <strong>2010</strong>4% 6%57%$21126%19%$438$42714%$45314%$25015%6%$2622 | DRAPER LABORATORY | TRANSITIONING TECHNOLOGY3