We're super excited at SpaceX to announce some of the details around the Falcon Heavy

rocket, which is our large rocket development - our really large rocket development, and

this is something we've alluded to in the past but I've only just recently completed

the design and I've been able to increase the thrust and payload capability of the rocket

considerably over our previous estimations.

With Falcon Heavy we'll be able to put well over 100,000 pounds into orbit. In fact, it's

looking like at least on the order of 117,000 pounds, maybe even above 120,000 pounds, depending

upon what the final performance numbers look like. This is a rocket of truly huge scale.

As we mentioned in the press release, this is - the 117,000 pounds is more than a fully

loaded Boeing 737 with 136 passengers, luggage and fuel - in orbit. So that is, really really

humungous. It's more payload capability than any vehicle in history apart from the Saturn

V, and so opens up a range of possibilities, for government and commercial customers, that

simply aren't present with the current launch capacity. If you compare our lifting capacity

to, say, the space shuttle or the Delta IV Heavy, which are the two most capable vehicles

in the world today, we're twice - more than twice - the capability of either of those

vehicles. Although the space shuttle is obviously retiring this year - I think - this is something

America can be really proud of - the fact that there's actually going to be a vehicle

with twice the capability of the space shuttle, that going to be ready to launch at the end

of next year.

The initial launch will take place from Vandenburg air force base in California, where we have

space launch complex 4 and shortly thereafter expect to be launching from Cape Canaveral

as well. So we'll certainly have that capability on both coasts. We expect to be launching

Falcon Heavy a lot, actually. Whereas Falcon 9 can address about half the market, Falcon

Heavy can address the other half of the market which is the largest government and commercial

satellites, as well as - as I mentioned - as well as opening up new market opportunities

for satellites and spacecraft that simply cannot be carried to space by the currently

available rockets. So I expect to see, potentially new opportunities arising because of Falcon

Heavy.

Also, from a cost standpoint - which is critically important in space, because launch costs have

been steadily rising over the years, Falcon Heavy represents a huge economic advantage.

Falcon Heavy costs about a third as much per flight as Delta IV Heavy, but carries twice

as much payload to orbit, so it's effectively a six-fold improvement in the cost per pound

to orbit. In fact, Falcon Heavy sets a new world record for the cost per pound to orbit

of around about $1000. So that's a pretty huge leap in capability.

Let's show the video.

In addition to representing a new world record in cost per pound to orbit, the Falcon Heavy

is also designed to meet the NASA human rating standards. For example, it is designed with structural safety margins that are 40%

above the actual flight loads that it expects to encounter, as opposed to normal satellite

launchers which are designed to only 25% above the flight loads. It also has engine-out capability,

so you can lose multiple engines on the vehicle and still complete the mission. It has cross-feed

between the cores which is the first time any rocket has been able to cross-feed propellant

between the cores. Triple-redundant avionics. All of this is such that it can launch people

if need be and do so safely.

Also, it has so much capability, so much more than any other vehicle, that we can start

to realistically contemplate missions like a Mars sample return - which requires quite

a lot of lift capability because you've gotta send a lander to Mars that still has enough

propellant to return to Earth. If you try to do a mission like that with a smaller vehicle

you have to do several launches and either do orbital rendezvous or do some sort of much

more complex mission whereas with Falcon Heavy you could potentially do it with a single

flight.

Let me turn it over to questions.

The payload to Mars would be about a quarter of its payload to LEO. So we're talking about,

something like, 30,000 pounds to trans-Mars injection. To the Moon it would be about,

maybe, 35,000 pounds.

The Falcon 9 is suitable for transporting people to low Earth orbit, like to the space

station and back, but Falcon 9 doesn't quite have the lifting power to go beyond the space

station, whereas Falcon Heavy go, really, much further than low Earth orbit. Falcon

Heavy is about half the lifting capability of a Saturn V, so, in principle you could

do another mission to the Moon, just by doing two launches of a Falcon Heavy. Perhaps one

that delivered the return vehicle to the surface of the Moon and one that delivered the lander

to the surface of the Moon. As far as human standards are concerned, the Falcon 9 and Falcon Heavy are designed

to meet all of the published NASA human rating standards. So it would only be if there's

some unpublished standard or some new standard that's about to be published - that it would

not be in compliance.

Falcon 9, we've always said it would be about 3 years from when we received NASA funding

to conduct a demonstration, and the gating fact on that isn't actually the rocket, it's

the launch escape system on the spacecraft. Falcon Heavy would be, really, capable of

launching people as soon as we've proven it out with a few launches, really. There's no

changes, that we are aware of, that we would make to the Falcon Heavy that would be required

to launch people. There may be changes to the spacecraft that it carries, but not to

the launch vehicle itself - or if there are, they're very minor. So yeah, it certainly

opens up a wide range of possibilities, such as returning to the Moon and conceivably even

going to Mars, although it would require probably twice as many launches as a Moon mission.

We have an upgrade in the works for our Merlin engine. Going from 95,000 pounds of sea-level

thrust to 140,000 pounds of sea-level thrust. So, pretty substantial upgrade. We're also

doing some design improvements to improve the manufacturability, so we can go to a high

rate of engine production. We're anticipating, if launch demand ends up being like we think

it is, we'll have a production rate of about 400 booster engines per year. Which, I think,

would be more engines than the rest of the world production combined. As it is, we're

already more than the rest of US production combined. Although that's not saying much.

Unfortunately.

We do not have - so we're expecting to do an initial demonstration flight of Falcon

Heavy, that doesn't have a primary customer, although that could change. It'll probably

have some smaller secondary satellites on-board. However, we are highly confident of announcing

customers for Falcon Heavy for the second and subsequent flights, and we're in liaison

discussions with government and commercial customers in that regard.

Even on Falcon 9 we have been launching secondary satellites, we launched some secondary satellites

on the last flight of Falcon 9. With the upcoming flight of Falcon 9, the first one that's going

to the space station, that will carry a couple of ORBCOMM satellites. With every, with most

missions we expect to be launching secondary satellites. It's not always with the same

dispenser, although that would make it a lot more convenient, but I think it's likely that

most of our flights will carry secondary satellites.

I think you should definitely count on Falcon Heavy being there for the long term. When

it succeeds, and certainly that is right from the initial launch as it was with Falcon 9.

We're starting off at Vandenburg but we'll then be transitioning to the cape. We'll be

upgrading our launch pad at Cape Canaveral so that we can process both a Falcon 9 and

a Falcon Heavy simultaneously and they can both roll out to the pad. We're also investigating

the possibility at the cape of using one of the old shuttle pads for the Falcon Heavy.

That's a possibility but our default plan is to use our existing launch pad but upgrade

it such that there's a hanger where you can process Falcon 9 and that rolls to the pad,

and another hanger - kinda at 90 degrees - where you can process Falcon Heavy and either one

of them can roll to the pad, so you can have dual processing take place.

In terms of the number of jobs, it really depends on the launch rate, so I'd expect

that number to grow over time, but I think once it really gets going - and we do expect

more launches to occur from the cape than from Vandenburg in the long haul, with Falcon

Heavy, because most of our commercial customers want to go to GTO which, obviously, is cape

launches. So we're expecting probably a couple of hundred jobs. It depends on customer demand,

so I'd say, it's probably 2 to 3 years, but it really depends on what the customer adoption

rate is. I'm confident of a couple of hundred jobs when the customer adoption is high, when

we're doing several launches a year. I think we'll probably do as many Falcon Heavy launches

as we do Falcon 9 launches. Our rough ballpark estimate is something on the order of 20 launches

per year of which roughly half are Falcon Heavy, roughly half are Falcon 9 and of those,

probably 60%, 70%, are [inaudible].

I think there's a lot of wishful thinking on the part of our competitors that our prices

must be higher, but they are not. In fact, I think that we're unique in the launch business

of publishing our prices on our website. Whereas other launch providers sort of treat it like

a rug bazaar - they'll charge you what they think you can afford. We believe in every

day low prices, you know, and we've stuck to our guns on that. The Falcon 9 costs $50

million, and it's been that way for a while, and the Falcon Heavy is, on average, about

$100 million, so we're very very confident of being able to maintain those prices, and

I say let history be the judge. Here I am saying it, we'll see if that remains true,

but you have it on camera.

[Question about getting to the Moon.] If you had a small enough spacecraft, you could conceivably

do it with one Falcon Heavy. It kinda depends on how big of a spacecraft and how many people

you want to send, but I think you could slim it down to just do it on one Falcon Heavy.

[Question about getting to an asteroid.] I'm sure you could do it with two Falcon Heavy

launches. If your spacecraft had a little bit of propellant on-board, presumably it

would because it has to get back from the asteroid too, then I think you could do it

with two Falcon Heavy launches.

I think we've thought a lot about going public but before we do so we want to make sure that

we have a very predictable revenue stream because the markets don't like surprises,

but I think that there's a decent chance we'll look at going public towards the end of next

year. Not saying we will, but it's a possibility. It's possible that we could see acquisition

interest, but I have no interest in selling and I am the controlling shareholder in the

company. We've had some inquiries, but then I'm pretty clear with them that I would not

give up a controlling stake in the company because SpaceX has some philosophical goals,

or philanthropic goals, which may not be coincidental with the goals of a large government contractor.

I think end of next year meaning November, December, is when we expect to have Falcon

Heavy at the launch pad at Vandenburg. The launch itself is a little more difficult to

predict, because we have to go through final regulatory approvals, there could be things

that we have to debug about the rocket and the launch site interaction, so I think, most

likely what you'll see is a rocket at the pad towards the end of next year and a launch

sometime in 2013.

I don't want to speak for specific customers, but I can say that there is strong interest

from both the US government and large commercial operators in Falcon Heavy and that we are

at an advanced stage of discussions with both, and part of what's needed to get them to sign

up to a launch is to not be the first. It's always possible that a customer may jump in

at the last minute and say, okay, they'll do it, but it's a lot easier to get deals

done if customers know that they don't have to be the first flight. It's a bit of a, I

guess, a slight risk on our part to be doing the first launch on our own funds, and of

course, it does cost us some money, but it's an important thing to do in order to get customers

to sign up. We had to do something similar with Falcon 9.

Ramping up production is our number one focus. That's what I have the whole company focused

on. We're bringing in people both from the rocket industry, as well as from other industries,

like automotive and high volume aircraft production. We'll be making more rocket engines than any

company - actually, more than any country, I think - has every made. At 400 booster engines

per year, I guess, at 500 booster engines per year it is more than the rest of the world's

production combined. So that's pretty serious scale in the rocket business. In terms of

the number of cores, we're talking about 40 cores. So it's very high volume but that's

what's needed in order to do 10 Falcon 9s and 10 Falcon Heavys in a given year. As it

is, if you look at our launch manifest, just based on existing contracts that we have,

if you go out 3 or 4 years, we already have on the order of 10 launches booked of Falcon

9 and we've only done two Falcon 9 launches, and we're only just putting a stake in the

ground with Falcon Heavy. Twenty launches a year, is not a crazy number at all. We expect

that to occur without any miracles. So we must make sure that we are building our production

capability and our launch capability to meet that demand.

Right now our engine production rate is around 50 to 60 per year. That's what we're doing

with the Merlin 1C. Merlin 1D, in addition to being a thrust upgrade, and some performance

upgrade, is really a design for manufacturability as well. It's helpful that I have experience

from the automotive world as well because, in automotive, 400 engines per year is nothing.

There are a lot of techniques which the car industry has developed to be able to do high

volume production but also be very reliable and consistent in doing so. I'm very confident