--Company Reports Solid Financial and Operational Performance--
--Fourth Quarter New Business Activity Totals Nearly $1 Billion--

(Dulles, VA 18 February 2010) – Orbital Sciences Corporation (NYSE: ORB) today reported its financial results for the fourth quarter and full year 2009.  Fourth quarter 2009 revenues were $282.3 million, compared to $305.2 million in the fourth quarter of 2008.  Fourth quarter 2009 operating income was $14.7 million, compared to $16.8 million in the fourth quarter of 2008.

Net income was $9.3 million, or $0.16 diluted earnings per share, in the fourth quarter of 2009, compared to net income of $9.0 million, or $0.15 diluted earnings per share, in the fourth quarter of 2008.  Orbital generated $8.3 million of free cash flow* in the fourth quarter of 2009 compared to free cash flow of $14.1 million in the fourth quarter of 2008.

Full year 2009 revenues were $1,125.3 million, compared to $1,168.6 million in 2008.  Operating income was $52.3 million in 2009, compared to $84.3 million in 2008.  Net income was $36.6 million, or $0.63 diluted earnings per share in 2009, compared to income from continuing operations of $42.6 million, or $0.70 per diluted share in 2008.  Orbital generated $58.7 million of free cash flow in 2009, compared to $82.3 million in 2008.

Mr. David W. Thompson, Orbital’s Chairman and Chief Executive Officer, said, “Orbital ended 2009 with its best quarter of the year for new business and with its busiest period for operational activity.  In addition, the company’s fourth quarter financial results were better than expected, due in large measure to strong revenue growth in advanced space programs and solid profit margins in satellites and space systems.” 

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* “Free cash flow” is a non-GAAP financial measure discussed in this release.  For additional details, please refer to the sections of this press release entitled “Cash Flow” and “Disclosure of Non-GAAP Financial Measure.”

Fourth Quarter Financial Highlights

Summary financial results were as follows:

Revenues decreased $22.9 million, or 8%, in the fourth quarter of 2009 compared to the fourth quarter of 2008 primarily due to decreased contract activity on communications satellite, missile defense and Orion programs, partially offset by increased activity on the International Space Station Commercial Resupply Services (CRS) contract awarded by NASA at the end of 2008.

Operating income decreased $2.1 million, or 13%, in the fourth quarter of 2009 compared to the fourth quarter of 2008.  This was due to a $4.1 million decrease in operating income related to a net reduction in contract activity and a $3.6 million increase in unrecovered research and development (R&D) expenses.  The fourth quarter of 2008 included a $5.6 million profit reduction related to a launch failure.

Net income in the fourth quarter of 2009 was $9.3 million, or $0.16 diluted earnings per share, compared to $9.0 million, or $0.15 diluted earnings per share in the fourth quarter of 2008.  The increase in net income was due to a $6.2 million reduction in investment impairment charges offset by a $2.1 million reduction in operating income, a $2.6 million increase in income tax expense and a $1.2 million reduction in other income.

Diluted weighted-average shares outstanding were 57.5 million in the fourth quarter of 2009, down from 59.3 million in the fourth quarter of 2008 due to share repurchases made by the company in the first half of 2009.

Segment Results

Launch Vehicles

Launch vehicles segment revenues decreased $28.3 million in the fourth quarter of 2009 compared to the fourth quarter of 2008 primarily due to decreased activity on the Ground-based Midcourse Defense (GMD) missile defense program and the termination of the Kinetic Energy Interceptor (KEI) program in the second quarter of 2009.  Segment operating income decreased $1.6 million in the fourth quarter primarily due to the reduction in activity on the GMD and KEI programs and higher TaurusÒ II launch vehicle R&D expenditures.  The fourth quarter of 2008 included a $5.6 million profit reduction charge related to a launch failure.

The company’s R&D expenses are generally recoverable under contracts with the U.S. Government.  However, in the fourth quarters of 2009 and 2008, the company’s operating income was reduced by $5.1 million and $1.5 million, respectively, of unrecovered R&D expenses that exceeded a self-imposed ceiling on such costs. 

Satellites and Space Systems

Satellites and space systems segment revenues decreased $35.5 million in the fourth quarter of 2009 compared to the fourth quarter of 2008 primarily due to decreased activity on communications satellite contracts as a result of the substantial completion of certain satellites.  Segment operating income decreased $2.6 million in the fourth quarter primarily due to the reduction in communication satellite contract activity.  Segment operating margin for the quarter increased slightly primarily due to favorable profit adjustments on certain communications satellite contracts.

Advanced Space Programs

Advanced space programs segment revenues increased $42.8 million in the fourth quarter of 2009 compared to the fourth quarter of 2008 due to increased activity on the CRS contract and certain national security satellite contracts, partially offset by a reduction in activity on the Orion human space vehicle program.  Segment operating income increased $2.1 million in the quarter primarily due to the increase in activity on the CRS contract, partially offset by a reduction in Orion program activity. 

Cash Flow

Cash flow for the fourth quarter and full year 2009 was as follows:

Free cash flow was $8.3 million for the fourth quarter and $58.7 million for the full year 2009.  Orbital did not repurchase any shares of its common stock during the second half of 2009, but did repurchase approximately 1.2 million shares for $16.7 million in the first half of 2009.  The company’s unrestricted cash balance was $373.0 million as of December 31, 2009.

New Business Highlights

During the fourth quarter of 2009, Orbital received approximately $660 million in new firm and option contract bookings.  In addition, the company received approximately $335 million of option exercises under existing contracts.  Major fourth quarter bookings included firm and option orders for five commercial communications satellites and option exercises for another International Space Station CRS cargo delivery mission and a defense satellite program.

For the full year, Orbital received $1.88 billion in total new business, made up of $1.27 billion in new orders and $610 million in option exercises.  As of December 31, 2009, the company’s firm contract backlog was approximately $1.89 billion and its total backlog (including options, indefinite-quantity contracts and undefinitized orders) was approximately $4.94 billion.

Operational Highlights

Orbital carried out five successful launch vehicle and space systems missions in the fourth quarter, including the deployment of the IS-15 communications satellite for Intelsat and the launch of a medium-range target vehicle for the Missile Defense Agency.  In addition, the company completed and delivered five spacecraft and launch vehicles for future applications, including the IS-16 satellite and two Orbital Boost Vehicle (OBV) interceptor rockets.

For the full year 2009, Orbital completed 35 major operational events, consisting of 12 rocket launches and satellite deployments, 17 additional system deliveries and 6 R&D events involving new launch vehicles and spacecraft programs.

The company also conducted three successful space missions so far in 2010, including the deployment of the IS-16 satellite and launches of one OBV interceptor and one target rocket.  In addition, Orbital delivered five other launch vehicles and completed one major R&D event since the start of this year.

2010 Financial Guidance

The company reaffirmed its previous financial guidance for 2010 as follows:

Commenting on Orbital’s 2010 outlook, Mr. Thompson said, “Having built up strong business momentum in 2009, Orbital looks forward to a year of substantial revenue growth together with profit margin expansion and earnings improvement in 2010.  We also expect the year ahead to present more than the usual number of opportunities and challenges as we pursue new growth avenues in several of our core markets and close in on the first launches of our new Taurus II rocket and Cygnus spacecraft planned for 2011.”

Disclosure of Non-GAAP Financial Measure

Free cash flow is defined as GAAP (Generally Accepted Accounting Principles) net cash provided by operating activities less capital expenditures for property, plant and equipment.  A reconciliation of free cash flow to net cash provided by operating activities is included above in the section entitled “Cash Flow.”  Management believes that the company’s presentation of free cash flow is useful because it provides investors with an important perspective on the company’s liquidity, financial flexibility and ability to fund operations and service debt.

Orbital does not intend for the above non-GAAP financial measure to be considered in isolation or as a substitute for the related GAAP measure.  Other companies may define this measure differently.

About Orbital

Orbital develops and manufactures small- and medium-class rockets and space systems for commercial, military and civil government customers.  The company’s primary products are satellites and launch vehicles, including low-Earth orbit, geosynchronous-Earth orbit and planetary exploration spacecraft for communications, remote sensing, scientific and defense missions; human-rated space systems for Earth-orbit, lunar and other missions; ground- and air-launched rockets that deliver satellites into orbit; and missile defense systems that are used as interceptor and target vehicles.  Orbital also provides satellite subsystems and space-related technical services to U.S. Government agencies and laboratories.

“Safe Harbor” Statement Under the Private Securities Litigation Reform Act of 1995

Certain statements in this press release may be forward-looking in nature or “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995.  Such forward-looking statements are subject to risks, trends and uncertainties that could cause the actual results or performance of the company to be materially different from the forward-looking statement.  Uncertainty surrounding factors such as continued government support and funding for key space and defense programs, new product development programs, product performance and market acceptance of products and technologies, government contract procurement and termination risks, as well as other risk factors and business considerations described in the company’s SEC filings, including its annual report on Form 10-K, could impact Orbital’s actual financial and operational results.  Orbital assumes no obligation for updating the information contained in this press release.

A transcript of the earnings teleconference call will be available on Orbital’s website at http://www.orbital.com/Investor