10-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

For Annual and Transition Reports

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

(Mark One)
þ	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the fiscal year ended December 31, 2005
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from           to

Commission file number 1-14279

ORBITAL SCIENCES CORPORATION

(Exact name of registrant as specified in charter)

Delaware	06-1209561
(State or Other Jurisdiction of Incorporation or Organization of Registrant)	(I.R.S. Employer Identification No.)
21839 Atlantic Boulevard, Dulles, Virginia	20166 (Zip Code)
(Address of principal executive offices)

Registrant’s telephone number, including area code:

(703) 406-5000

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Name of Each Exchange on Which Registered
Common Stock, par value $.01 per share	The New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

     Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.      Yes þ     No o

     Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.      Yes o     No þ 

     Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.      Yes þ     No o

     Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.     o

     Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o     Accelerated filer þ     Non-accelerated filer o

     Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).      Yes o     No þ 

     The aggregate market value of the voting common equity held by non-affiliates of the registrant based on the closing sales price of the registrant’s Common Stock as reported on The New York Stock Exchange on June 30, 2005 was approximately $526,145,000. The registrant has no non-voting common equity.

     As of February 28, 2006, 55,099,555 shares of the registrant’s Common Stock were outstanding.

     Portions of the registrant’s definitive proxy statement to be filed on or about March 21, 2006 are incorporated by reference in Part III of this report.

TABLE OF CONTENTS

Item		Page
	PART I
Item 1.	Business		1
Item 1A.	Risk Factors		7
Item 1B.	Unresolved Staff Comments		13
Item 2.	Properties		13
Item 3.	Legal Proceedings		13
Item 4.	Submission of Matters to a Vote of Security Holders		14
Item 4A.	Executive Officers of the Registrant		14
	PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		16
Item 6.	Selected Financial Data		18
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		20
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk		33
Item 8.	Financial Statements and Supplementary Data		34
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		60
Item 9A.	Controls and Procedures		60
Item 9B.	Other Information		60
	PART III
Item 10.	Directors and Executive Officers of the Registrant		61
Item 11.	Executive Compensation		61
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		62
Item 13.	Certain Relationships and Related Transactions		63
Item 14.	Principal Accounting Fees and Services		63
	PART IV
Item 15.	Exhibits and Financial Statement Schedule		64

Pegasus is a registered trademark and service mark of Orbital Sciences Corporation; Taurus is a registered trademark of Orbital Sciences Corporation; Orbital is a trademark of Orbital Sciences Corporation.

PART I

Item 1.     Business

General

   We develop and manufacture small rockets and space systems for commercial, military and civil government customers, including the U.S. Department of Defense (“DoD”), the National Aeronautics and Space Administration (“NASA”) and other U.S. government agencies.

   Our primary products and services include the following:

•  Launch Vehicles. Rockets that are used as interceptor and target vehicles for missile defense systems, small-class space launch vehicles that place satellites into low-Earth orbit, and suborbital launch vehicles that place payloads into a variety of high-altitude trajectories.

•  Satellites and Related Space Systems. Satellites and interplanetary spacecraft for communications, remote sensing, scientific and military missions, and space-related technical services.

•  Transportation Management Systems. Software-based systems that combine satellite navigation and wireless communications to enable municipal transit and other fleet operators to manage and dispatch vehicles.

   Our general strategy is to develop and expand a core integrated business of space and launch systems technologies and products, focusing on the design and manufacturing of affordable lightweight rockets, small satellites and other space systems in order to establish and expand positions in niche markets that have not typically been emphasized by our larger competitors. It is also part of our strategy to seek customer contracts that will fund the development of enhancements to our existing launch vehicle and space systems product lines. As a result of our capabilities and experience in designing, developing, manufacturing and operating a broad range of small rockets and space systems, we believe we are well positioned to capitalize on the demand for small space-technology systems in missile defense, space-based military and intelligence operations, and commercial satellite communications programs, and to take advantage of continuing government-sponsored initiatives for space-based scientific research and lunar and planetary exploration initiatives.

   Orbital was incorporated in Delaware in 1987 to consolidate the assets, liabilities and operations of two entities established in 1982 and 1983.

   Our executive offices are located at 21839 Atlantic Boulevard, Dulles, Virginia 20166 and our telephone number is (703) 406-5000.

Available Information

   We maintain an Internet website at www.orbital.com. In addition to news and other information about our company, we make available on or through the Investor Information section of our website our annual report on Form 10-K, our quarterly reports on Form 10-Q, our current reports on Form 8-K and all amendments to these reports as soon as reasonably practicable after we electronically file this material with, or furnish it to, the U.S. Securities and Exchange Commission.

   At the Investor Information section of our website, we have a Corporate Governance page that includes, among other things, copies of our Code of Business Conduct and Ethics, our Corporate Governance Guidelines and the charters for each standing committee of the Board of Directors,

including the Audit and Finance Committee, the Corporate Governance and Nominating Committee and the Human Resources and Compensation Committee.

   Printed copies of all of the above-referenced reports and documents may be requested by contacting our Investor Relations Department either by mail at our corporate headquarters, by telephone at (703) 406-5543 or by e-mail at investor.relations@orbital.com. All of the above-referenced reports and documents are available free of charge.

Description of Orbital’s Products and Services

   Our products and services are grouped into three reportable segments that are described more fully below: launch vehicles, satellites and related space systems, and transportation management systems. Our business is not seasonal. Customers or U.S. government agencies or prime contractors that accounted for 10% or more of our consolidated revenues in 2005 were The Boeing Company (“Boeing”), DoD and NASA.

   Launch Vehicles. Our launch vehicles segment is involved in developing and producing interceptor launch vehicles, target launch vehicles and space launch vehicles.

   Interceptor Launch Vehicles. We develop and produce rockets that are used as interceptor and target vehicles for missile defense systems, including interceptor boosters that carry “kill vehicles” designed to defend against ballistic missile attacks. Pursuant to a contract with Boeing, we are the primary supplier of operational and test interceptor boosters for the U.S. Missile Defense Agency’s (“MDA”) Ground-based Midcourse Defense (“GMD”) program, for which our interceptor boost vehicle, a modified version of our Pegasus rocket, is being used as a major operational element in the U.S. national missile defense system. We are also developing a boost vehicle for MDA’s Kinetic Energy Interceptor (“KEI”) program. During 2005, we conducted one successful GMD interceptor flight test and delivered four GMD boost vehicles.

   Target Launch Vehicles. We design and produce suborbital launch vehicles that place payloads into a variety of high-altitude trajectories, but unlike space launch vehicles, do not place payloads into orbit around the Earth. Our target launch vehicles include suborbital rockets and their principal subsystems, as well as payloads carried by such vehicles.

   Various branches and agencies of the U.S. military, including MDA, use our suborbital launch vehicles as targets for defense-related applications such as ballistic missile interceptor testing and related experiments. These rockets are programmed to simulate incoming enemy missiles, offering an affordable and reliable means to test advanced missile defense systems. Our family of targets extends from long-range ballistic target launch vehicles, which include targets for testing the MDA’s GMD system, to medium-and short-range target vehicles designed to simulate threats to U.S. and allied military forces deployed in overseas theaters. We have also developed a short-range supersonic sea-skimming target that flies just above the ocean’s surface and is currently being used by the U.S. Navy.

   Since 1982, we have performed a total of 132 target launch missions, including eight successful missions in 2005.

   Space Launch Vehicles. We develop and produce small-class launch vehicles that place satellites weighing up to 4,000 lbs. into low-Earth orbit, including the Pegasus, Taurus and Minotaur space launch vehicles that are used by commercial, civil government and military customers. Our Pegasus launch vehicle is launched from the company’s L-1011 carrier aircraft to deploy relatively lightweight satellites into low-Earth orbit. The Taurus launch vehicle is a ground-launched derivative of the Pegasus vehicle that can carry heavier payloads to orbit. The ground-launched Minotaur launch

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vehicle family combines Minuteman II and Peacekeeper ballistic missile rocket motors with our Pegasus and Taurus technology. Since 1990, the Pegasus, Taurus and Minotaur rockets have performed a total of 49 launches. Pursuant to a contract with the U.S. Air Force, we are developing a new class of Minotaur rockets that can carry heavier payloads than the Taurus. In 2005, we carried out two successful Minotaur missions and one successful Pegasus mission. We did not conduct any Taurus missions in 2005.

   Our launch vehicle technology has also been the basis for several other advanced space and suborbital programs, including supporting efforts to develop technologies that could be applied to reusable launch vehicles, space maneuvering vehicles, hypersonic aircraft and missiles, and missile defense systems. In 2005, we launched a demonstration vehicle developed for NASA that helped to validate technology that will allow in-orbit spacecraft to rendezvous with other spacecraft without human intervention.

   Customers or U.S. government agencies or prime contractors that accounted for 10% or more of our launch vehicles segment revenues in 2005 were Boeing, DoD and NASA.

   Satellites and Related Space Systems. Our satellites and related space systems segment is involved in developing and producing geosynchronous Earth orbit (“GEO”) satellites, low-Earth orbit (“LEO”) satellites and planetary (or “deep space”) spacecraft for communications, remote sensing, scientific, military and technology demonstration missions.

   These product lines are:

•  Communications Satellites. Small GEO satellites that provide cable and direct-to-home television distribution, business data network connectivity, regional mobile telephony and other space-based communications services.

•  Science, Technology and Defense Satellites. Small- and medium-class spacecraft that are used to conduct space-related scientific research, to carry out interplanetary and other deep-space exploration missions, to demonstrate new space technologies, to collect imagery and other remotely-sensed data about the Earth and to enable national security applications.

•  Space Technical Services. Advanced space systems, including satellite command and data handling, attitude control and structural subsystems and a broad range of space-related technical services.

   Since 1982, we have built and delivered 94 satellites for various commercial and governmental customers for a wide range of communications, broadcasting, remote imaging, scientific and national security applications. In 2005, we had 23 spacecraft in various stages of design, production and/or delivery, including 12 LEO satellites, 10 GEO satellites and one planetary spacecraft. We also develop and build human space-related systems such as cargo transportation containers for the International Space Station and Space Shuttle equipment for the Hubble Space Telescope servicing missions.

   Customers or U.S. government agencies or prime contractors that accounted for 10% or more of our satellites and related space systems segment revenues in 2005 were DoD, NASA, Optus Networks Pty. Limited and PanAmSat Corporation.

   Transportation Management Systems. Our transportation management systems division develops and produces fleet management systems that are used primarily by metropolitan mass transit operators in the United States. We combine global positioning satellite vehicle tracking technology with terrestrial wireless communications to help transit agencies manage public bus fleets and public works systems. Major customers for our transportation management systems include the metropolitan

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mass transit authorities in Los Angeles, Philadelphia, Baltimore, Denver, Phoenix, San Diego, and a number of other state and municipal transit systems and private vehicle fleet operators. In addition, we have a contract to provide a system to a mass transit service in Singapore.

Competition

   We believe that competition for sales of our products and services is based on performance, other technical features, reliability, price, delivery schedule and customization, and we believe that we compete favorably on the basis of these factors. The table below identifies our primary competitors for each major product line.

Product Line	Competitors
Interceptor launch vehicles	Lockheed Martin Corporation Raytheon Company
Target launch vehicles	Lockheed Martin Corporation L-3 Communications, Inc. Space Vector Corporation, a wholly owned   subsidiary of Pemco Aviation Group
Space launch vehicles	Russian and other international launch   vehicles could represent competition for   commercial, as opposed to U.S.   government, launches Space Exploration Technologies Corp. (a   potential U.S.-based competitor whose   launch vehicle is still in the development   phase)
Communications satellites	Lockheed Martin Corporation Alcatel Alenia Space EADS Astrium Antrix, the commercial arm of India’s   Space Research Organization
Science, technology and defense satellites	Ball Aerospace and Technology Corporation Lockheed Martin Corporation General Dynamics Corporation The Boeing Company Northrop Grumman Corporation
Space technical services	Jackson and Tull Inc. Northrop Grumman Corporation Lockheed Martin Corporation Swales Aerospace, Inc.
Transportation management systems	Siemens Corporation

   Many of our competitors are larger and have substantially greater resources than we do. Furthermore, it is possible that other domestic or foreign companies or governments, some with greater experience in the space and defense industry and many with greater financial resources than we possess, will seek to provide products or services that compete with our products or services. Any such foreign competitor could benefit from subsidies from or other protective measures by its home country.

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Research and Development

   We invest in product-related research and development to conceive and develop new products and to enhance existing products. Our research and development expenses totaled approximately $6.3 million, $6.3 million and $7.8 million for the years ended December 31, 2005, 2004 and 2003, respectively. In addition, a large portion of our total new product development and enhancement programs is funded under customer contracts.

Patents

   We rely, in part, on patents, trade secrets and know-how to develop and maintain our competitive position and technological advantage, particularly with respect to our launch vehicle and satellite products. We hold U.S. and foreign patents relating to the Pegasus vehicle, certain of our satellites and other systems and products. The majority of our U.S. patents relating to the Pegasus vehicle expire between 2007 and 2016, and most of our U.S. patents relating to our satellites expire beginning in 2013. We believe our ability to conduct operations would not be materially affected with the loss of any particular intellectual property right.

Components, Raw Materials and Carrier Aircraft

   We purchase a significant percentage of our product components, structural assemblies and certain key satellite components and instruments from third parties. We also occasionally obtain from the U.S. government parts and equipment that are used in the production of our products or in the provision of our services. Generally, we have not experienced material difficulty in obtaining product components or necessary parts and equipment and we believe that alternatives to our existing sources of supply are available, although increased costs and possible delays could be incurred in securing alternative sources of supply. We rely upon sole source suppliers for rocket motors used on all our launch vehicles. While alternative sources would be available, the inability of such suppliers to provide us with motors could result in significant delays, expenses and loss of revenues. Our ability to launch our Pegasus vehicle depends on the availability of an aircraft with the capability of carrying and launching such space launch vehicle. We own a modified Lockheed L-1011 carrier aircraft that is used to launch the Pegasus vehicle. In the event that our L-1011 carrier aircraft were to be unavailable, we would experience significant delays, expenses and loss of revenues as a result of having to acquire and modify a new carrier aircraft or transition customers to other launch vehicles.

U.S. Government Contracts

   During 2005, 2004 and 2003, approximately 77%, 80% and 67%, respectively, of our total annual revenues were derived from contracts with the U.S. government and its agencies or from subcontracts with other U.S. government prime contractors. Most of our U.S. government contracts are funded incrementally on a year-to-year basis.

   Our major contracts with the U.S. government primarily fall into two categories: cost-reimbursable contracts and fixed-price contracts. Approximately 89% and 11% of revenues from U.S. government contracts in 2005 were derived from cost-reimbursable contracts and fixed-price contracts, respectively. Under a cost-reimbursable contract, we recover our actual allowable costs incurred, allocable overhead costs and a fee consisting of a base amount that is fixed at the inception of the contract and/or an award amount that is based on the customer’s evaluation of our performance in terms of the criteria stated in the contract. Our fixed-price contracts include firm fixed-price and fixed-price incentive fee contracts. Under firm fixed-price contracts, work performed and products shipped are paid for at a fixed price without adjustment for actual costs incurred in connection with

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the contract. Therefore, we bear the risk of loss if costs increase, although some of this risk may be passed on to subcontractors. Fixed-price incentive fee contracts provide for sharing by us and the customer of unexpected costs incurred or savings realized within specified limits, and may provide for adjustments in price depending on actual contract performance other than costs. Costs in excess of the negotiated maximum (ceiling) price and the risk of loss by reason of such excess costs are borne by us, although some of this risk may be passed on to subcontractors.

   We derive a significant portion of our revenues from U.S. government contracts, which are dependent on continued political support and funding. All our U.S. government contracts and, in general, our subcontracts with other U.S. government prime contractors provide that such contracts may be terminated for convenience at any time by the U.S. government or the prime contractor, respectively. Furthermore, any of these contracts may become subject to a government-issued stop work order under which we would be required to suspend production. In the event of a termination for convenience, contractors generally are entitled to receive the purchase price for delivered items, reimbursement for allowable costs for work in process and an allowance for reasonable profit thereon or adjustment for loss if completion of performance would have resulted in a loss. For a more detailed description of risks relating to the U.S. government contract industry, see “Item 1A – Risk Factors.”

   A portion of our business is classified for national security purposes by the U.S. government and cannot be specifically described. The operating results of these classified programs are included in our consolidated financial statements. The business risks associated with classified programs, as a general matter, do not differ materially from those of our other U.S. government programs and products.

Regulation

   Our ability to pursue our business activities is regulated by various agencies and departments of the U.S. government and, in certain circumstances, the governments of other countries. Commercial space launches require licenses from the U.S. Department of Transportation (“DoT”) and operation of our L-1011 aircraft requires licenses from certain agencies of the DoT, including the Federal Aviation Administration. Our classified programs require that we and certain employees maintain appropriate security clearances. We also require licenses from the U.S. Department of State (“DoS”) and the U.S. Department of Commerce (“DoC”) with respect to work we do for foreign customers or with foreign subcontractors.

Contract Backlog

   Our firm backlog was approximately $1.26 billion at December 31, 2005 and approximately $1.17 billion at December 31, 2004. We expect to convert approximately $600 million of the 2005 year-end firm backlog into revenues during 2006.

   Our firm backlog as of December 31, 2005 included approximately $880 million of contracts with the U.S. government and its agencies or from subcontracts with prime contractors of the U.S. government. Most of our government contracts are funded incrementally on a year-to-year basis. Firm backlog from government contracts at December 31, 2005 included total funded orders of about $150 million and orders not yet funded of about $730 million. Changes in government policies, priorities or funding levels through agency or program budget reductions by the U.S. Congress or executive agencies could materially adversely affect our financial condition and results of operations. Furthermore, contracts with the U.S. government may be terminated or suspended by the

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U.S. government at any time, with or without cause. Such contract suspensions or terminations could result in unreimbursable expenses or charges or otherwise adversely affect our business.

   Total backlog was approximately $2.90 billion at December 31, 2005. Total backlog includes firm backlog in addition to unexercised options, indefinite-quantity contracts and undefinitized orders and contract award selections.

Employees

   As of February 1, 2006, Orbital had approximately 2,600 permanent employees. None of our employees is subject to collective bargaining agreements. We believe our employee relations are good.

* * *

   Financial information about our products and services, domestic and foreign operations and export sales is included in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the notes to our consolidated financial statements, and is incorporated herein by reference.

Special Note Regarding Forward-Looking Statements

   All statements other than those of historical facts included in this Form 10-K, including those related to our financial outlook, liquidity, goals, business strategy, projected plans and objectives of management for future operating results, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements are subject to numerous assumptions, risks and uncertainties, including the risks set forth below, and are based on our current expectations and projections about future events. Our actual results, performance or achievements could be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Although we believe the expectations reflected in these forward-looking statements are based on reasonable assumptions, there is a risk that these expectations will not be attained and that any deviations will be material. We disclaim any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained in this Form 10-K to reflect any changes in our expectations or any change in events, conditions or circumstances on which any statement is based.

Item 1A. Risk Factors

   Investors should carefully consider, among other factors, the risks listed below.

We derive a significant portion of our revenues from U.S. government contracts, which are dependent on continued political support and funding and are subject to termination by the U.S. government at any time.

   During 2005, approximately 77% of our total annual revenues, and at December 31, 2005, approximately 70% of our firm backlog was derived from U.S. government contracts. Most of our U.S. government contracts are funded incrementally on a year-to-year basis and are subject to uncertain future funding levels. Furthermore, our direct and indirect contracts with the U.S. government may be terminated or suspended by the U.S. government or its prime contractors at any time, with or without cause. There can be no assurance that government contracts will not be terminated or suspended in the future, or that contract suspensions or terminations will not result in

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unreimbursable expenses or charges or other adverse effects on our financial condition. A decline in U.S. government support and funding for key missile defense and space programs could materially adversely affect our financial condition and results of operations.

   We are also subject to laws and regulations regulating the formation, administration and performance of, and accounting for, U.S. government contracts. Failure to comply with applicable laws could result in contract termination, price or fee reductions, civil or criminal penalties, injunctions or other sanctions and/or administrative sanctions such as suspension or debarment from contracting with the U.S. government. In the second quarter of 2005, the U.S. government commenced an investigation which we believe is focused on contracting matters related to certain U.S. government launch vehicle programs. Should any violations be alleged or found, we could face the possibility of criminal or civil penalties and/or administrative sanctions such as suspension or debarment from contracting with the U.S. government, depending on the nature of such violations. In any event, responding to this investigation involves significant expense and management attention.

Our U.S. government contracts are subject to audits that could result in a material adverse effect on our financial condition and results of operations if a material adjustment were required.

   The accuracy and appropriateness of costs charged to U.S. government contracts are subject to regulation, audit and possible disallowance by the Defense Contract Audit Agency or other government agencies. Accordingly, costs billed or billable to U.S. government customers are subject to potential adjustment upon audit by such agencies. Responding to governmental audits, inquiries or investigations may involve significant expense and divert management attention. Also, an adverse finding in any such audit, inquiry or investigation could involve fines, injunctions or other sanctions.

Termination of our backlog of orders could negatively impact our revenues.

   All of our direct and indirect contracts with the U.S. government or its prime contractors may be terminated or suspended at any time, with or without cause, for the convenience of the government. Our contract with Boeing to provide interceptor boosters for MDA’s GMD program is material, and the program’s termination could have an adverse impact on our liquidity and operations. From time to time, certain of our commercial contracts have also given the customer the right to unilaterally terminate the contracts. For these reasons, we cannot assure you that our backlog will ultimately result in revenues.

We may not receive full payment for our satellites or launch services and we could incur penalties in the event of failure, malfunction or if our satellites are not delivered or our rockets are not launched on schedule.

   Some of our satellite contracts provide for performance-based payments to be made to us after the satellite is in-orbit over periods that may be as long as 15 years. Additionally, some satellite contracts require us to refund cash to the customer if performance criteria, which cover periods of up to 15 years, are not satisfied. Certain launch contracts have payments contingent upon a successful launch. While our practice is generally to procure insurance policies that would indemnify us for satellite incentive fees that are not earned and for performance refund obligations, insurance may not continue to be available on economical terms, if at all. Further, we may elect not to procure insurance. In addition, some of our satellite and launch contracts require us to pay penalties in the event that satellites are not delivered, or the launch does not occur, on a timely basis, or to refund all cash receipts if a contract is terminated for default prior to launch. Our failure to receive incentive payments, or a requirement that we refund amounts previously received or that we pay delay penalties, could adversely affect our results of operations, profitability and liquidity.

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The majority of our contracts are long-term contracts, and our revenue and profit recognition under such contracts may be adversely affected to the extent that actual costs exceed estimates or that there are delays in completing such contracts.

   The majority of our contracts are long-term contracts. We generally recognize revenues on long-term contracts using the percentage-of-completion method of accounting, whereby revenue and profit is recognized based on actual costs incurred in relation to total estimated costs to complete the contract. Revenue and profit from a particular contract may be adversely affected to the extent that estimated costs to complete increase, incentive or award fee estimates are reduced, delivery schedules are delayed or progress under a contract is otherwise impeded.

Contract cost overruns could subject us to losses and impair our liquidity.

   We provide our products and services primarily through fixed-price and cost-reimbursable contracts. Cost overruns may result in losses and, if significant, could adversely impact our financial results and our liquidity:

•  Under fixed-price contracts, our customers pay us for work performed and products shipped without adjustment for any cost overruns. Therefore, we generally bear all of the risk of losses as a result of increased costs on these contracts, although some of this risk may be passed on to subcontractors. Some of our fixed-price contracts provide for sharing of unexpected cost increases or savings realized within specified limits and may provide for adjustments in price depending on actual contract performance other than costs. We bear the entire risk of cost overruns in excess of the negotiated maximum amount of unexpected costs to be shared.

•  Under cost-reimbursable contracts, we are reimbursed for allowable incurred costs plus a fee, which may be fixed or variable (based, in part, on the customer’s evaluation of our performance under the contract). There is no guarantee as to the amount of fee, if any, we will be awarded under a cost-reimbursable contract with a variable fee. In addition, the price on a cost-reimbursable contract is based on allowable costs incurred, but generally is subject to contract funding limitations. If we incur costs in excess of the amount funded, we may not be able to recover such costs.

Our success depends on our ability to penetrate and retain markets for our existing products and to continue to conceive, design, manufacture and market new products on a cost-effective and timely basis.

   We anticipate that we will continue to incur expenses to design and develop new products. There can be no assurance that we will be able to achieve the technological advances necessary to remain competitive and profitable, that new products will be developed and manufactured on schedule or on a cost-effective basis or that our existing products will not become technologically obsolete. Our failure to predict accurately the needs of our customers and prospective customers, and to develop products or product enhancements that address those needs, may result in the loss of current customers or the inability to secure new customers. The development of new or enhanced products is a complex and uncertain process that requires the accurate anticipation of technological and market trends and can take a significant amount of time to complete. We may experience design, manufacturing, marketing and other difficulties that could delay or prevent the development, introduction or acceptance of new products and enhancements.

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There can be no assurance that our products will be successfully developed or manufactured or that they will perform as intended.

   Most of the products we develop and manufacture are technologically advanced and sometimes include novel systems that must function under highly demanding operating conditions and are subject to significant technological change and innovation. From time to time, we experience product failures, cost overruns in developing and manufacturing our products, delays in delivery and other operational problems. We may experience some product and service failures, schedule delays and other problems in connection with our launch vehicles, satellites, transportation management systems and other products in the future. Some of our satellite and launch services contracts impose penalties on us for delays, which could be significant. In addition to any costs resulting from product warranties or required remedial action, product failures or significant delays may result in increased costs or loss of revenues due to postponement or cancellation of subsequently scheduled operations or product deliveries and claims against performance bonds. Negative publicity from product failures may also impair our ability to win new contracts.

If our key suppliers fail to perform as expected, we may experience delays and cost increases, and our operating results may be impacted adversely.

   We purchase a significant percentage of our product components, structural assemblies and some key satellite components and instruments from third parties. We also occasionally obtain from the U.S. government parts and equipment used in the production of our products or the provision of our services. In addition, we have a sole source for the rocket motors we use on our Pegasus and Taurus launch vehicles and the interceptor boost vehicles that we are producing for MDA under our contract with Boeing. If our subcontractors fail to perform as expected or encounter financial difficulties, we may have difficulty replacing them in a timely or cost effective manner. As a result, we may experience delays that could result in additional costs, a customer terminating our contract for default, or damage to our customer relationships, causing our revenues, profitability and cash flow to decline. In addition, negative publicity from any failure of one of our products as a result of a failure by a key supplier could damage our reputation and prevent us from winning new contracts.

Our international business is subject to risks. Political and economic instability in foreign markets may have a material adverse effect on our operating results.

   For the years ended December 31, 2005, 2004 and 2003, direct sales to non-U.S. customers comprised approximately 10%, 15% and 19%, respectively, of our consolidated revenues. Further, as of December 31, 2005, approximately 19% of our firm backlog was derived from non-U.S. customers. International contracts are subject to numerous risks, including:

•  political and economic instability in foreign markets;

•  restrictive trade policies of the U.S. government and foreign governments;

•  inconsistent product regulation by foreign agencies or governments;

•  imposition of product tariffs and burdens;

•  costs of complying with a wide variety of international and U.S. export laws and regulatory requirements;

•  inability to obtain required U.S. export licenses; and

•  foreign currency and standby letter of credit exposure.

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We operate in a regulated industry, and our inability to secure or maintain the licenses, clearances or approvals necessary to operate our business could have a material adverse effect on our financial condition and results of operations.

   Our ability to pursue our business activities is regulated by various agencies and departments of the U.S. government and, in certain circumstances, the governments of other countries. Commercial space launches require licenses from the DoT, and operation of our L-1011 aircraft requires licenses from certain agencies of the DoT, including the Federal Aviation Administration. Our classified programs require that we and certain employees maintain appropriate security clearances. There can be no assurance that we will be successful in our future efforts to secure and maintain necessary licenses, clearances or regulatory approvals. Exports of our products, services and technical information frequently require licenses from the DoS or from the DoC. We have a number of international customers and subcontractors. Our inability to secure or maintain any necessary licenses or approvals or significant delays in obtaining such licenses or approvals could negatively impact our ability to compete successfully in international markets, and could result in an event of default under certain of our international contracts.

We face significant competition in each of our lines of business and many of our competitors possess significantly more resources than we do.

   Many of our competitors are larger and have substantially greater resources than we do. Furthermore, it is possible that other domestic or foreign companies or governments, some with greater experience in the space industry and many with greater financial resources than we possess, could seek to produce products or services that compete with our products or services, including new launch vehicles using new technology which could render our launch vehicles less competitively viable. Some of our foreign competitors currently benefit from, and others may benefit in the future from, subsidies from or other protective measures by their home countries.

Our financial covenants may restrict our operating activities.

   Our revolving credit facility and the indenture governing our 9% senior notes contain certain financial and operating covenants, including, among other things, certain coverage ratios, as well as limitations on our ability to incur debt, make dividend payments, make investments, sell all or substantially all of our assets and engage in mergers and consolidations and certain acquisitions. These covenants may restrict our ability to pursue certain business initiatives or certain acquisition transactions. In addition, failure to meet any of the financial covenants in our credit facility could cause an event of default under and/or accelerate some or all of our indebtedness, which would have a material adverse effect on us.

The loss of executive officers and our inability to retain other key personnel could adversely affect our operations.

   Our inability to retain our executive officers and other key employees, including personnel with security clearances required for classified work and highly skilled engineers, could have a material adverse effect on our operations.

The anticipated benefits of future acquisitions may not be realized.

   From time to time we may evaluate potential acquisitions that we believe would enhance our business. Were we to complete any acquisition transaction, the anticipated benefits may not be fully realized if we are unable to successfully integrate the acquired operations, technologies and personnel into our organization.

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We are subject to environmental regulations.

   We are subject to various federal, state and local environmental laws and regulations relating to the operation of our business, including those governing pollution, the handling, storage and disposal of hazardous substances and the ownership and operation of real property. Such laws may result in significant liabilities and costs. We do not believe that compliance with or liability under environmental laws and regulations has had a material impact on our operations to date, but there can be no assurance that such laws and regulations will not have a material adverse effect on us in the future.

Our restated certificate of incorporation, our amended and restated bylaws, our stockholder rights plan and Delaware law contain anti-takeover provisions that may adversely affect the rights of our stockholders.

   Our Board of Directors has the authority to issue up to 10 million shares of our preferred stock, $0.01 par value per share, and to determine the price, rights, preferences and privileges of those shares without any further vote or action by the stockholders. The rights of the holders of our common stock will be subject to, and may be adversely affected by, the rights of the holders of any preferred stock that may be issued in the future. The issuance of preferred stock, while providing desirable flexibility in connection with possible acquisitions and other corporate purposes, could have the effect of making it more difficult for a third party to acquire a majority of our outstanding voting stock.

   In addition to our ability to issue preferred stock without stockholder approval, our charter documents contain other provisions which could have an anti-takeover effect, including:

•  our charter provides for a staggered Board of Directors as a result of which only one of the three classes of directors is elected each year;

•  any merger, acquisition or other business combination that is not approved by our Board of Directors must be approved by 66²/3% of voting stockholders;

•  stockholders holding less than 10% of our outstanding voting stock cannot call a special meeting of stockholders; and

•  stockholders must give advance notice to nominate directors or submit proposals for consideration at stockholder meetings.

   In 1998, we adopted a stockholder rights plan which is intended to deter coercive or unfair takeover tactics. Under the rights plan, a preferred share purchase right, which is attached to each share of our common stock, generally will be triggered upon the acquisition, or actions that would result in the acquisition, of 15% or more of our common stock by any person or group. If triggered, these rights would entitle our stockholders (other than the acquirer) to purchase, for the exercise price, shares of Orbital’s common stock having a market value of two times the exercise price. The exercise price, which is subject to certain adjustments, is $210 per right. The stock purchase rights would cause substantial dilution to a person or group that attempts to acquire us on terms not approved by our Board of Directors.

   In addition, we are subject to the anti-takeover provisions of Section 203 of the Delaware General Corporation Law, which restrict the ability of current stockholders holding more than 15% of our voting shares to acquire us without the approval of 66²/3% of the other stockholders. These provisions could discourage potential acquisition proposals and could delay or prevent a change in control transaction. They could also have the effect of discouraging others from making tender offers for our common stock. As a result, these provisions may prevent our stock price from increasing

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substantially in response to actual or rumored takeover attempts. These provisions may also prevent changes in our management.

We may not have the ability to raise the funds necessary to finance the repurchase offer required by the indenture governing our senior notes in the event of a change of control, which may prevent us from entering into or consummating a change of control transaction otherwise in the best interests of our stockholders.

   In the event of a change of control, under the terms of the indenture governing the terms of our $126.4 million aggregate principal amount of our 9% senior notes due 2011, we are required to offer to repurchase the notes at a premium. If a change of control were to occur, there can be no assurance that we would have sufficient financial resources, or would be able to arrange financing, to pay the purchase price for all notes tendered by holders thereof. In addition, our repurchase of the notes as a result of a change of control may be prohibited or limited by, or constitute an event of default under, the terms of our credit facility or the terms of other agreements which we may enter into from time to time. Because our failure to repurchase the notes would constitute an event of default under the indenture, we may not be able to consummate a change of control transaction, even if the transaction may be in the best interests of our stockholders.

Item 1B. Unresolved Staff Comments

   Not applicable.

Item 2. Properties

   We lease approximately 950,000 square feet of office, engineering and manufacturing space in various locations in the United States, as summarized in the table below:

Business Unit	Principal Location(s)
Corporate Headquarters	Dulles, Virginia
Launch Vehicles	Chandler, Arizona; Dulles, Virginia; Vandenberg Air Force Base, California
Satellites and Related Space Systems	Dulles, Virginia; Greenbelt, Maryland
Transportation Management Systems	Columbia, Maryland

   We also own a 125,000 square foot state-of-the-art space systems manufacturing facility that primarily houses our satellite manufacturing, assembly and testing activities in Dulles, Virginia.

   We believe that our existing facilities are adequate for our requirements for the foreseeable future.

Item 3. Legal Proceedings

   On May 26, 2005, the United States Attorney’s Office for the District of Arizona commenced an investigation which we believe is focused on contracting matters related to certain U.S. government launch vehicle programs. We are cooperating fully with U.S. government authorities in connection with this investigation, and management strongly supports and is committed to the U.S. government’s procurement integrity processes. We cannot predict whether the government ultimately will conclude that there have been violations of any federal contracting laws, policies or procedures, or any other applicable laws. Should any such violations be alleged or found, we could face the possibility of criminal or civil penalties and/or administrative sanctions such as suspension and/or debarment from contracting with the U.S. government, depending on the nature of such violations.

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   We are party to certain litigation or proceedings arising in the ordinary course of business. In the opinion of management, the probability is remote that the outcome of any such litigation or proceedings will have a material adverse effect on our results of operations or financial condition.

Item 4. Submission of Matters to a Vote of Security Holders

   There was no matter submitted to a vote of our security holders during the fourth quarter of 2005.

Item 4A. Executive Officers of the Registrant

   The following table sets forth the name, age and position of each of the executive officers of Orbital as of February 25, 2006. All executive officers are elected annually and serve at the discretion of the Board of Directors.

Name	Age		Position
David W. Thompson		51	Chairman of the Board and Chief Executive Officer
James R. Thompson		69	Vice Chairman, President and Chief Operating Officer, Director
Garrett E. Pierce		61	Vice Chairman and Chief Financial Officer, Director
Ronald J. Grabe		60	Executive Vice President and General Manager, Launch Systems Group
John M. Danko		64	Executive Vice President and General Manager, Space Systems Group
Antonio L. Elias		56	Executive Vice President and General Manager, Advanced Programs Group
Susan Herlick		41	Senior Vice President, General Counsel and Corporate Secretary

   David W. Thompson is a co-founder of Orbital and has been Chairman of the Board and Chief Executive Officer of Orbital since 1982. From 1982 until October 1999, he also served as our President. Prior to founding Orbital, Mr. Thompson was employed by Hughes Electronics Corporation as special assistant to the President of its Missile Systems Group and by NASA at the Marshall Space Flight Center as a project manager and engineer, and also worked on the Space Shuttle’s autopilot design at the Charles Stark Draper Laboratory. Mr. Thompson is a Fellow of the American Institute of Aeronautics and Astronautics, the American Astronautical Society and the Royal Aeronautical Society, and is a member of the U.S. National Academy of Engineering.

   James R. Thompson (who is not related to David W. Thompson), has been Vice Chairman, President and Chief Operating Officer since April 2002, and was President and Chief Operating Officer since October 1999. He has been a director of the Company since 1992. He was Acting General Manager of our Transportation Management Systems Group from 2001 until August 2003. From 1993 until October 1999, Mr. Thompson served as Executive Vice President and General Manager, Launch Systems Group. Mr. Thompson was Executive Vice President and Chief Technical Officer of Orbital from 1991 to 1993. He was Deputy Administrator of NASA from 1989 to 1991. From 1986 until 1989, Mr. Thompson was Director of the Marshall Space Flight Center at NASA. Mr. Thompson was Deputy Director for Technical Operations at Princeton University’s Plasma Physics Laboratory from 1983 through 1986. Before that, he had a 20-year career with NASA at the Marshall Space Flight Center. He is a director of SPACEHAB Incorporated.

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   Garrett E. Pierce has been Vice Chairman and Chief Financial Officer since April 2002, and was Executive Vice President and Chief Financial Officer since August 2000. He has been a director of the Company since August 2000. From 1996 until August 2000, he was Executive Vice President and Chief Financial Officer of Sensormatic Electronics Corp., a supplier of electronic security systems, where he was also named Chief Administrative Officer in July 1998. Prior to joining Sensormatic, Mr. Pierce was the Executive Vice President and Chief Financial Officer of California Microwave, Inc., a supplier of microwave, radio frequency and satellite systems and products for communications and wireless networks. From 1980 to 1993, Mr. Pierce was with Materials Research Corporation, a provider of thin film equipment and high purity materials to the semiconductor, telecommunications and media storage industries, where he progressed from Chief Financial Officer to President and Chief Executive Officer. Materials Research Corporation was acquired by Sony Corporation as a wholly owned subsidiary in 1989. From 1972 to 1980, Mr. Pierce held various management positions with The Signal Companies. Mr. Pierce is a director of Kulicke and Soffa Industries, Inc.

   Ronald J. Grabe has been Executive Vice President and General Manager, Launch Systems Group since 1999. From 1996 to 1999, he was Senior Vice President and Assistant General Manager of the Launch Systems Group, and Senior Vice President of the Launch Systems Group since 1995. From 1994 to 1995, Mr. Grabe served as Vice President for Business Development in the Launch Systems Group. From 1980 to 1993, Mr. Grabe was a NASA astronaut during which time he flew four Space Shuttle missions and was lead astronaut for development of the International Space Station.

   John M. Danko has been Executive Vice President and General Manager, Space Systems Group since 2003. He served as Senior Vice President and Acting General Manager, Space Systems Group during 2002. From 1998 until the end of 2001, he served as Deputy General Manager, Space Systems Group. He previously was in charge of our Technical Services Division, a position he had held since 1989 at one of our predecessor companies. Mr. Danko held various positions with OAO Corporation from 1975 until 1989, including General Manager of the Aerospace Division when it was formed in 1980.

   Antonio L. Elias has been Executive Vice President and General Manager, Advanced Programs Group since October 2001, and was Senior Vice President and General Manager, Advanced Programs Group since August 1997. From January 1996 until August 1997, Dr. Elias served as Senior Vice President and Chief Technical Officer of Orbital. From May 1993 through December 1995, he was Senior Vice President for Advanced Projects, and was Senior Vice President, Space Systems Division from 1990 to April 1993. He was Vice President, Engineering of Orbital from 1989 to 1990 and was Chief Engineer from 1986 to 1989. From 1980 to 1986, Dr. Elias was an Assistant Professor of Aeronautics and Astronautics at Massachusetts Institute of Technology. He was elected to the National Academy of Engineering in 2001.

   Susan Herlick has been Senior Vice President, General Counsel and Corporate Secretary since January 2006 and served as Vice President and Deputy General Counsel from 2003 to 2005. From 1997 to 2002, she was Vice President and Assistant General Counsel. She joined Orbital as Assistant General Counsel in 1995. Prior to that, she was an attorney at the law firm of Hogan & Hartson LLP.

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PART II

Item 5.  Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

   On February 28, 2006, there were 2,273 Orbital common stockholders of record.

   Our common stock trades on the New York Stock Exchange (“NYSE”) under the symbol ORB. The range of high and low sales prices of Orbital common stock, as reported on the NYSE, was as follows:

2005	High		Low
4th Quarter	$	13.22	$	11.07
3rd Quarter	$	12.50	$	10.04
2nd Quarter	$	10.62	$	9.09
1st Quarter	$	11.47	$	9.48

2004	High		Low
4th Quarter	$	13.00	$	10.35
3rd Quarter	$	13.60	$	9.77
2nd Quarter	$	14.06	$	12.05
1st Quarter	$	13.74	$	11.32

We have never paid any cash dividends on our common stock, nor do we anticipate paying cash dividends on our common stock at any time in the foreseeable future. Moreover, our credit facility and our indenture governing our 9% senior notes contain covenants limiting our ability to pay cash dividends. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources.”

   The transfer agent for our common stock is:

Computershare Trust Company, N.A.

P.O. Box 43010

Providence, RI 02940

Telephone: (781) 575-3170

www.computershare.com

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   The following table sets forth information regarding our repurchase of common stock during, and as of, the quarter ended December 31, 2005.

					Total Number of		Maximum Number
					Shares		(or Approximate
					Purchased as		Dollar Value) of
	Total				Part of Publicly		Shares That May
	Number of		Average		Announced		Yet Be Purchased
	Shares		Price Paid		Plans or		Under the Plans
Period	Purchased		Per Share		Programs		or Programs(1)
October 1, 2005 to October 31, 2005		327,000	$	11.38		327,000	$	26,278,560
November 1, 2005 to November 30, 2005		670,900	$	11.79		670,900	$	18,367,402
December 1, 2005 to December 31, 2005		231,800	$	12.66		231,800	$	15,432,138
Total		1,229,700	$	11.85		1,229,700	$	15,432,138

⁽¹⁾  On April 21, 2005, we announced the company’s plan, subject to certain conditions, to repurchase up to $50 million of outstanding debt and equity securities, including our common stock, up through April 20, 2006.

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Item 6. Selected Financial Data

Selected Consolidated Financial Data

   The selected consolidated financial data of the company for the years ended December 31, 2005, 2004, 2003, 2002 and 2001 have been derived from our audited consolidated financial statements. This information should be read in conjunction with the 2005, 2004 and 2003 consolidated financial statements and the related notes thereto appearing elsewhere in this Annual Report on Form 10-K.

		Years Ended December 31,
		2005			2004(1)			2003(2)			2002			2001(3)
		(In thousands, except per share data)
Operating Data:
	Revenues	$	703,450		$	675,935		$	581,500		$	551,642		$	415,249
	Costs of goods sold		578,764			566,787			477,273			460,231			387,433
	Gross profit		124,686			109,148			104,227			91,411			27,816
	Operating expenses		71,733			53,825			68,669			62,372			80,789
	Income (loss) from operations		52,953			55,323			35,558			29,039			(52,973	)
	Allocated share of losses of affiliate		—			—			—			—			(26,495	)
	Gain on reversal of allocated losses of affiliate		—			—			40,586			—			—
	Debt extinguishment expense		—			(2,099	)		(38,836	)		—			—
	Other expense, net		(7,170	)		(9,096	)		(17,336	)		(15,089	)		(16,146	)
	Income (loss) before provision for income taxes and discontinued operations		45,783			44,128			19,972			13,950			(95,614	)
	Income tax (provision) benefit		(17,620	)		155,872			265			(265	)		—
	Income (loss) from continuing operations		28,163			200,000			20,237			13,685			(95,614	)
	Income from discontinued operations		—			—			—			875			114,565
	Cumulative effect of change in accounting		—			—			—			(13,795	)		—
	Net income	$	28,163		$	200,000		$	20,237		$	765		$	18,951
Basic Income Per Share:
	Income (loss) from continuing operations	$	0.51		$	4.03		$	0.43		$	0.31		$	(2.49	)
	Income from discontinued operations		—			—			—			0.02			2.98
	Cumulative effect of change in accounting		—			—			—			(0.31	)		—
	Net income	$	0.51		$	4.03		$	0.43		$	0.02		$	0.49
	Shares used in computing basic per share amounts		54,804			49,658			46,718			43,908			38,424
Diluted Income Per Share:
	Income (loss) from continuing operations	$	0.45		$	3.08		$	0.35		$	0.30		$	(2.49	)
	Income from discontinued operations		—			—			—			0.02			2.98
	Cumulative effect of change in accounting		—			—			—			(0.30	)		—
	Net income	$	0.45		$	3.08		$	0.35		$	0.02		$	0.49
	Shares used in computing diluted per share amounts		62,415			65,022			58,221			44,937			38,424

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		Years Ended December 31,
		2005			2004(1)			2003(2)			2002			2001(3)
		(In thousands, except per share data)
Statement of Cash Flow Data:
	Cash flow from operating activities	$	74,696		$	66,998		$	46,474		$	(29,848	)	$	(80,989	)
	Cash flow from investing activities		(13,615	)		(3,399	)		(15,594	)		(14,341	)		236,980
	Cash flow from financing activities		(27,736	)		1,005			(13,420	)		24,414			(137,852	)
Balance Sheet Data:
	Cash, cash equivalents and restricted cash	$	165,143		$	133,819		$	80,158		$	53,741		$	74,030
	Net working capital		205,977			186,361			115,189			92,350			(63,384	)
	Total assets		668,790			663,770			439,300			416,310			432,734
	Short-term borrowings		76			161			297			1,854			103,710
	Long-term obligations, net		126,459			128,375			137,116			114,833			4,665
	Stockholders’ equity		395,734			394,124			166,877			134,568			94,285

(1)	Operating income in 2004 included a $2.5 million gain recorded as a credit to settlement expense. The income tax benefit in 2004 included a $156.5 million benefit resulting from the December 31, 2004 reversal of substantially all of the company’s deferred income tax valuation allowance.
(2)	Operating income in 2003 included $3.9 million in net settlement expenses.
(3)	Revenue, gross profit and operating income in 2001 included a $13.0 million favorable adjustment as a result of a contract settlement and a $3.4 million reversal of a provision for uncollectible receivables in connection with a contract that was terminated in March 2001. Operating expenses in 2001 included $5.4 million of litigation-related settlement expenses.

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Item 7.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview

   With the exception of historical information, the matters discussed below under the headings “Consolidated Results of Operations for the Years Ended December 31, 2005, 2004 and 2003,” “Segment Results,” “Liquidity and Capital Resources” and elsewhere in this Form 10-K include forward-looking statements that involve risks and uncertainties, many of which are beyond our control. Readers should be cautioned that a number of important factors, including those identified above in “Item 1 – Special Note Regarding Forward-Looking Statements” and “Item 1A – Risk Factors” may affect actual results and may cause actual results to differ materially from those anticipated or expected in any forward-looking statement. Historical results of operations may not be indicative of future operating results.

   We develop and manufacture small rockets and space systems for commercial, military and civil government customers. Our primary products are satellites and launch vehicles, including low-orbit, geosynchronous-orbit and planetary spacecraft for communications, remote sensing, scientific and military missions; ground- and air-launched rockets that deliver satellites into orbit; and missile defense systems that are used as interceptor and target vehicles. We also offer space-related technical services to government agencies and develop and build satellite-based transportation management systems for public transit agencies and private vehicle fleet operators.

Critical Accounting Policies and Significant Estimates

   The preparation of consolidated financial statements requires management to make judgments based upon estimates and assumptions that are inherently uncertain. Such judgments affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. Management continuously evaluates its estimates and assumptions, including those related to long-term contracts and incentives, inventories, long-lived assets, warranty obligations, income taxes, contingencies and litigation, and the carrying values of assets and liabilities. Management bases its estimates on historical experience and on various other assumptions that it believes to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions.

   The following is a summary of the most critical accounting policies used in the preparation of our consolidated financial statements.

•  Our revenue is derived primarily from long-term contracts. Revenues on cost-reimbursable contracts are recognized to the extent of costs incurred plus a proportionate amount of fee earned. Revenues on long-term fixed-price contracts are generally recognized using the percentage-of-completion method of accounting. Such revenues are recorded based on the percentage that costs incurred to date bear to the most recent estimates of total costs to complete each contract. Estimating future costs and, therefore, revenues and profits, is a process requiring a high degree of management judgment, including management’s assumptions regarding our future operations as well as general economic conditions. In the event of a change in total estimated contract cost or profit, the cumulative effect of such change is recorded in the period the change in estimate occurs. Frequently, the period of performance of a contract extends over a long period of time and, as such, revenue recognition and our profitability from a particular contract may be adversely affected to the extent that estimated cost to complete or

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incentive or award fee estimates are revised, delivery schedules are delayed or progress under a contract is otherwise impeded. Accordingly, our recorded revenues and gross profits from period to period can fluctuate significantly. In the event cost estimates indicate a loss on a contract, the total amount of such loss, excluding general and administrative expense, is recorded in the period in which the loss is first estimated.

Certain contracts include provisions for increased or decreased revenue and profit based on performance against established targets. Incentive and award fees are included in estimated contract revenue at the time the amounts can be reasonably determined and are reasonably assured based upon historical experience and other objective criteria. Should performance under such contracts differ from previous assumptions, current period revenues and profits would be adjusted and could therefore fluctuate significantly.

As of December 31, 2005, unbilled receivables included $16.8 million of incentive fees on certain satellite contracts that become due incrementally over periods of up to 15 years, subject to the achievement of performance criteria. Additionally, some satellite contracts require us to refund cash to the customer if performance criteria, which cover periods of up to 15 years, are not satisfied and, as of December 31, 2005, up to $27.9 million of revenues recognized under such contracts could be reversed if satellite performance criteria were not met. We generally procure insurance policies that would indemnify us for satellite incentive fees that are not earned and for performance refund obligations.

•  Inventory is stated at the lower of cost or estimated market value. Cost is determined on an average cost or specific identification basis. Estimated market value is determined based on assumptions about future demand and market conditions. If actual market conditions were less favorable than those previously projected by management, inventory write-downs could be required.

•  We record a liability in connection with certain warranty obligations. Our warranty obligations are affected by product failure rates and material usage and service delivery costs incurred in correcting a product failure. Should actual product failure rates, material usage or service delivery costs differ from our estimates, revisions to the estimated warranty liability would be required.

•  We account for income taxes using the asset and liability method. Under this method, deferred tax assets and liabilities are recorded for the future tax consequences attributable to differences between the financial statement carrying amounts of assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a tax rate change on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. We record valuation allowances to reduce net deferred tax assets to the amount considered more likely than not to be realized. Changes in estimates of future taxable income can materially change the amount of such valuation allowances.

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Consolidated Results of Operations for the Years Ended December 31, 2005, 2004 and 2003

2005 Compared With 2004

   Revenues – Our consolidated revenues were $703.5 million in 2005, a 4% increase compared to $675.9 million in 2004. This increase was driven primarily by $12.0 million revenue growth in our launch vehicles segment and $16.9 million growth in our satellites and related space systems segment, offset partially by a $2.6 million decrease in our transportation management systems segment. The launch vehicles segment growth was driven by higher revenues in the interceptor launch vehicles and target launch vehicles product lines, partially offset by lower revenues in the space launch vehicles product line. The satellites and related space systems segment growth was driven by significantly higher revenues in the communications satellites product line, offset partially by lower revenues from science, technology and defense satellite contracts and space technical services. Transportation management systems segment revenues decreased due to the completion or near-completion of certain contracts.

   Gross Profit – Our consolidated gross profit was $124.7 million in 2005, a 14% increase compared to $109.1 million in 2004. Gross profit is affected by a number of factors, including the mix of contract types and costs incurred thereon in relation to revenues recognized. Such costs include the costs of personnel, materials, subcontracts and overhead.

   The gross profit increase in 2005, as compared to 2004, was due to a $12.3 million, or 22%, increase in our launch vehicles segment, a $2.2 million, or 5%, increase in our satellites and related space systems segment and a $1.1 million, or 20%, increase in our transportation management systems segment.

   The increase in gross profit in our launch vehicles segment was primarily attributable to a higher profit from the interceptor launch vehicles product line due to increased activity levels in 2005 and cost growth on Taurus and Pegasus rocket contracts recorded in 2004 that did not recur in 2005. These increases were partially offset by cost growth on certain contracts in 2005.

   The increase in gross profit in our satellites and related space systems segment was largely due to $2.7 million of revenue and profit recorded in the second quarter of 2005 related to satellite acceptance and incentive fees received from a customer and former affiliate. Although revenues were higher in our satellites and related space systems segment, profit was lower in 2005 due to significant cost growth on our communication satellites contracts.

   The increase in our transportation management systems segment was largely attributable to improved profitability on certain transportation management systems contracts.

   Research and Development Expenses – Research and development expenses are comprised of our self-funded product research and development activities and exclude direct customer-funded development activities. Research and development expenses were $6.3 million, or 0.9% of revenues, in both 2005 and 2004. These expenses related primarily to the development of improved launch vehicles and satellites.

   Selling, General and Administrative Expenses – Selling, general and administrative expenses were $65.4 million, or 9.3% of revenues, and $50.1 million, or 7.4% of revenues, in 2005 and 2004, respectively. Selling, general and administrative expenses include the costs of our finance, legal, administrative and general management functions, as well as the costs of marketing, advertising, promotional and other selling expenses. The increase in selling, general and administrative expenses

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was driven by increases in bid, proposal and marketing costs, higher legal fees and expenses and increased personnel-related costs. The increase in bid, proposal and marketing costs was driven by satellite and launch vehicle proposal efforts in 2005. Legal fees and expenses related to the U.S. government investigation initiated in 2005 and described more fully in Note 7 to the consolidated financial statements totaled approximately $2.2 million in 2005. Personnel-related costs increased largely due to higher staff levels and, in part, due to the expense related to an equity-based compensation arrangement initiated in 2005, discussed in more detail below.

   Settlement Expense – In 2004, we recorded a $2.5 million gain as a credit to settlement expense in connection with the sale of senior subordinated notes which we had received in 2003 from a former affiliate.

   Interest Expense – Interest expense was $11.7 million and $11.4 million in 2005 and 2004, respectively. Interest expense in 2005 remained relatively consistent with interest expense in 2004 primarily as a result of our unchanged fixed-rate debt balance during 2005.

   Interest Income and Other – Interest income and other was $4.6 million and $2.3 million in 2005 and 2004, respectively, consisting primarily of interest income of $5.1 million and $2.0 million in 2005 and 2004, respectively. Interest income increased primarily as a result of higher interest rates and higher short-term invested cash balances.

   Debt Extinguishment Expense – During 2004, we recorded $2.1 million in debt extinguishment expenses associated with repurchases of a portion of our 9% senior notes and the replacement of our bank credit agreement as further described in “Liquidity and Capital Resources.”

   Income Taxes – In the fourth quarter of 2004, we reversed nearly all of our deferred tax valuation allowance due to our assessment that substantially all of our deferred tax assets are more likely than not realizable, as discussed more fully in the section “2004 Compared with 2003” below. This resulted in our recording significantly higher income tax expense beginning in 2005, nearly all of which is offset by net operating loss carryforwards and other deferred tax assets, resulting in minimal cash tax payments. Our cash income tax payments, which primarily relate to alternative minimum tax (“AMT”), are currently less than 2% of pretax income.

   We recorded $17.6 million of income tax expense in 2005, reflecting an annualized effective income tax rate of 38.5%. The $155.9 million net income tax benefit recorded in 2004 was comprised of (i) $156.5 million in deferred tax benefit in connection with the reversal of the valuation allowance discussed below and (ii) a $0.6 million current provision for 2004 AMT and state tax obligations.

   Net Income – Our consolidated net income was $28.2 million and $200.0 million, or $0.45 and $3.08 diluted earnings per share, in 2005 and 2004, respectively. The decrease in net income in 2005 was due to a $1.7 million increase in pretax income, offset by the impact of the $155.9 million net income tax benefit in 2004 compared to the $17.6 million income tax expense in 2005.

2004 Compared With 2003

   Revenues – Our consolidated revenues were $675.9 million in 2004, a 16% increase compared to $581.5 million in 2003. This increase was driven primarily by a $113.0 million revenue growth in our satellites and related space systems segment, offset partially by a $10.0 million decrease in our launch vehicles segment and a $7.4 million decrease in our transportation management systems

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segment. The increase in satellites and related space systems segment revenues was largely attributable to increased revenues from science, technology and defense satellite contracts.

   Gross Profit – Our consolidated gross profit was $109.1 million in 2004, a 5% increase compared to $104.2 million in 2003. Gross profit is affected by a number of factors, including the mix of contract types and costs incurred thereon in relation to revenues recognized. Such costs include the costs of personnel, materials, subcontracts and overhead.

   The gross profit increase in 2004, as compared to 2003, was driven by a $9.1 million increase in our satellites and related space systems segment and a $5.6 million improvement in our transportation management systems segment, partially offset by a $9.8 million decrease in our launch vehicles segment. The increase in our satellites and related space systems segment was primarily due to profit derived from the significant revenue growth in the science, technology and defense satellite product line, offset by lower profit in the communications satellites product line. The improvement in our transportation management systems segment was mainly attributable to the absence in 2004 of cost increases and other charges recorded in 2003 on certain transportation management systems contracts. The decrease in gross profit in our launch vehicles segment was due to the completion of certain advanced space flight systems contracts in 2003 and lower profit in our space launch vehicles product line, offset partially by profit growth from our missile defense interceptor program.

   Research and Development Expenses – Research and development expenses are comprised of our self-funded product research and development activities and exclude direct customer-funded development activities. Research and development expenses were $6.3 million, or 0.9% of revenues, and $7.8 million, or 1.3% of revenues, in 2004 and 2003, respectively. These expenses related primarily to the development of improved launch vehicles and satellites.

   Selling, General and Administrative Expenses – Selling, general and administrative expenses were $50.1 million, or 7.4% of revenues, and $57.0 million, or 9.8% of revenues, in 2004 and 2003, respectively. Selling, general and administrative expenses include the costs of our finance, legal, administrative and general management functions, as well as the costs of marketing, advertising, promotional and other selling expenses. Selling, general and administrative expenses decreased largely due to a $2.7 million reduction in bid and proposal costs and $2.1 million of non-recurring litigation expenses in our transportation management systems segment in 2003.

   Settlement Expense – In 2004, we recorded a $2.5 million gain as a credit to settlement expense in connection with the sale of senior subordinated notes which we had received in 2003 from a former affiliate.

   In 2003, we recorded $4.8 million of settlement charges in connection with the settlement of litigation between a former affiliate and Orbital. These charges included a $2.3 million delay penalty related to the OrbView-3 satellite and a $2.5 million litigation settlement payment. Also in 2003, we recorded a $0.9 million reduction in settlement expense in connection with the settlement of an action we had brought against certain of our insurers seeking reimbursement for defense and settlement costs we had incurred several years earlier defending a breach of contract lawsuit.

   Interest Expense – Interest expense was $11.4 million and $18.7 million in 2004 and 2003, respectively. Interest expense decreased in 2004 as compared to 2003 primarily as a result of a lower interest rate on our debt and a reduction in the amortization of debt costs resulting from our refinancing transactions in the third quarter of 2003.

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   Interest Income and Other – Interest income and other was $2.3 million and $1.3 million in 2004 and 2003, respectively, consisting largely of interest income of $2.0 million and $0.7 million in 2004 and 2003, respectively.

   Gain on Reversal of Allocated Losses of Affiliate – In 2003, we recorded a $40.6 million gain in connection with the reversal of our previously recorded liability related to the allocated losses of a former affiliate. This gain was recorded as a result of the cancellation of our ownership interest in connection with the former affiliate’s reorganization in December 2003.

   Debt Extinguishment Expense – During 2004, we recorded $2.1 million in debt extinguishment expenses associated with repurchases of a portion of our 9% senior notes and the replacement of our bank credit agreement as further described in “Liquidity and Capital Resources.”

   In 2003, we recorded $38.8 million in debt extinguishment expenses associated with debt refinancing in July 2003. The debt extinguishment expenses consisted of $20.7 million in accelerated amortization of debt discount on our 12% notes issued in August 2002, $10.1 million in accelerated amortization of debt issuance costs and $8.0 million in prepayment premiums and other expenses.

   Income Taxes – The $155.9 million net tax benefit recorded in 2004 was comprised of (i) the $156.5 million deferred income tax benefit in connection with the reversal of the valuation allowance discussed below and (ii) a $0.6 million current income tax provision for 2004 alternative minimum taxes and state tax obligations. In 2003, the benefit recorded for income taxes was solely attributable to the refund of state income taxes paid in 2002.

   In prior years and until the fourth quarter of 2004, we had recorded a valuation allowance to fully reserve our net deferred tax assets based on our assessment that the realization of our net deferred tax assets did not meet the “more likely than not” criterion under SFAS No. 109, “Accounting for Income Taxes.” As of December 31, 2004 we determined that based upon a number of factors, including our cumulative taxable income in recent years and our expected profitability in future years, substantially all of our net deferred tax assets are more likely than not realizable through future earnings. Accordingly, as of December 31, 2004 we reversed $212.6 million of our deferred income tax valuation allowance and recorded (i) a tax benefit of $156.5 million in our consolidated income statement, (ii) a $39.7 million reduction in goodwill and (iii) a $16.4 million increase to additional paid-in capital. The portion of the reversal recorded as a reduction in goodwill relates to valuation allowances established in prior years in connection with business acquisitions. The portion of the reversal recorded as an increase to additional paid-in capital is primarily related to tax benefits associated with stock option exercises in 2004 and prior years.

   Net Income – Our consolidated net income was $200.0 million, or $3.08 diluted earnings per share, and $20.2 million, or $0.35 diluted earnings per share, in 2004 and 2003, respectively. The increase in net income in 2004 consisted of a $24.2 million increase in pretax income, plus the $156.5 million income tax benefit in 2004 discussed above.

Segment Results

   Our products and services are grouped into three reportable segments: (i) launch vehicles; (ii) satellites and related space systems; and (iii) transportation management systems. Corporate office transactions that have not been attributed to a particular segment, as well as consolidating eliminations and adjustments, are reported in corporate and other.

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   The following table summarizes revenues and income from operations for our reportable business segments and corporate and other (in thousands):

	Years Ended December 31,
	2005			2004			2003
Revenues
Launch Vehicles	$	335,315		$	323,287		$	333,272
Satellites and Related Space Systems		348,579			331,726			218,679
Transportation Management Systems		26,532			29,135			36,571
Corporate and Other		(6,976	)		(8,213	)		(7,022	)
Total	$	703,450		$	675,935		$	581,500
Income (Loss) from Operations
Launch Vehicles	$	35,444		$	30,103		$	32,801
Satellites and Related Space Systems		16,015			21,439			14,555
Transportation Management Systems		1,494			1,243			(7,629	)
Corporate and Other		—			2,538			(298	)
Settlement Expense		—			—			(3,871	)
Total	$	52,953		$	55,323		$	35,558

2005 Compared With 2004

   Launch Vehicles – Launch vehicles segment revenues increased 4% primarily due to a $15.8 million revenue increase from our interceptor launch vehicles product line and a $5.6 million revenue increase from our target launch vehicles product line, partially offset by a $9.8 million revenue decrease in our space launch vehicles product line. In our interceptor launch vehicles product line, we are developing and manufacturing interceptor boosters designed to defend against ballistic missile attacks, including the midcourse-phase Orbital Boost Vehicle (“OBV”) and the boost-phase Kinetic Energy Interceptors (“KEI”) programs directed by the U.S. Missile Defense Agency. The OBV and KEI programs accounted for $192.2 million and $176.3 million in revenues, or 57% and 55% of total segment revenues in 2005 and 2004, respectively. Revenues in our target launch vehicles product line increased primarily due to a higher level of activity on target vehicles in 2005. Revenues decreased in our space launch vehicles product line primarily due to lower levels of activity on Taurus and Minotaur programs and on the DART mission launched in April 2005. Also contributing to the decrease in our space launch vehicles product line was a non-recurring $2.0 million early termination fee in 2004 in connection with a Taurus contract cancellation, partially offset by increased activity in 2005 on Pegasus programs. We completed one Pegasus launch during 2005 compared to no Pegasus launches in 2004, and we completed no Taurus launches in 2005 compared to one Taurus launch in 2004.

   Operating income in the launch vehicles segment increased 18% primarily due to improved operating results in the interceptor launch vehicles and the space launch vehicles product lines. Operating income from our interceptor launch vehicles product line was the largest contributor to

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this segment’s operating income, reporting $24.3 million, or 69%, of total segment operating profit in 2005, compared to $20.6 million, or 68%, in 2004. The profit growth in interceptors was driven by higher activity levels in 2005. While space launch vehicles revenues were lower, operating profit improved in this product line due to increased activity on Pegasus programs and significant cost growth in 2004 on a Pegasus contract and a Taurus contract that did not recur in 2005, offset partially by the $2.0 million contract termination fee in 2004 discussed above. Although target launch vehicles revenues were higher, operating results declined marginally in this product line primarily due to cost growth impacting several contracts. Segment operating margin as a percentage of revenues was 10.6% in 2005, compared to 9.3% in 2004. The increase in operating margin was primarily the result of improved interceptor launch vehicles margins and the impact of the 2004 contract cost growth discussed above, offset partially by $2.2 million of investigation-related legal expenses discussed previously that are reflected in the launch vehicles segment financial results in 2005.

   Satellites and Related Space Systems – Satellites and related space systems segment revenues increased 5% as a result of a $33.1 million increase in revenues in our communications satellites product line, partially offset by a $12.2 million decrease in our science, technology and defense satellite product line and a $3.5 million decrease in space technical services revenues. Revenues increased in our communications satellites product line due to revenues on several recently awarded geosynchronous-orbit satellite contracts begun in 2005. Communications satellites revenues accounted for 36% and 28% of total segment revenues in 2005 and 2004, respectively. Revenues decreased in our science, technology and defense satellites product line as a result of a decline in activity on certain contracts that were in the latter stages of production in 2005, offset partially by $2.7 million of revenue recorded in the second quarter of 2005 related to satellite acceptance and incentive fees received from a customer and former affiliate. Revenues from space technical services declined largely due to lower levels of program activity.

   Operating income in the satellites and related space systems segment decreased $5.4 million due to a $6.4 million decrease in operating results in the communications satellites product line, partially offset by higher income in our other product lines. The decline in communications satellites operating results was primarily due to significant cost growth on certain contracts in 2005, partially offset by operating income from the contracts begun in 2005 mentioned previously, resulting in an operating loss in the communications satellites product line in 2005. The increase in our other product lines was primarily due to $2.7 million of operating profit from the satellite acceptance and incentive fees discussed above offset partially by lower income on certain science, technology and defense contracts driven by lower activity levels. Segment operating margin was 4.6% in 2005, compared to 6.5% in 2004. The decrease in operating margin was largely due to the communications satellite cost growth noted above.

   Transportation Management Systems – Transportation management systems segment revenues decreased 9% in 2005 compared to 2004 largely due to completion or near-completion of certain contracts, partially offset by revenues from several recently awarded contracts.

   Although revenues decreased, operating income increased $0.3 million largely due to higher profit rates in 2005 from recently awarded contracts. This improved profitability was partially offset by a $0.4 million charge to reserve a note receivable in 2005 and by the absence in 2005 of a favorable revenue adjustment in 2004 on a contract that was renegotiated and resumed in 2004.

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   Corporate and Other – Corporate and other revenues are comprised solely of the elimination of intercompany revenues. Corporate and other operating income in 2004 was comprised solely of the first quarter 2004 gain on the sale of notes received from a former affiliate discussed above.

   In 2005, we granted to employees 745,000 restricted stock units (“RSU”) valued at $11.28 each. Each RSU entitles the holder to receive one share of common stock on the date of vesting. The cost of these units is amortized over a three-year vesting period and we recorded $1.4 million of such amortization expense in 2005. This expense and the related profit impact is allocated among all our reportable business segments.

2004 Compared With 2003

   Launch Vehicles – Launch vehicles segment revenues decreased 3% primarily due to a $17.0 million decrease in revenues from certain advanced space flight systems contracts that were completed in 2003 and a $7.3 million decrease in our space launch vehicle product line, offset partially by a $15.2 million increase in our OBV missile defense interceptor program. The OBV program accounted for $176.3 million and $161.1 million in revenues, or 55% and 48% of total segment revenues in 2004 and 2003, respectively. The decrease in our space launch vehicle product line was primarily due to lower Pegasus and Taurus program revenues. We completed four Pegasus launches during 2003 compared to no Pegasus launches in 2004, and we completed one Taurus launch in May 2004 compared to no Taurus launches in 2003. The reduction in launch vehicle program activity in 2004 was partially offset by a $2.0 million early termination fee recognized in connection with a Taurus contract that was cancelled by the customer in December 2004 due to a change in the customer’s plans prior to our commencing any significant work on the contract. Revenues in our target vehicle product line were relatively unchanged in 2004 as compared to 2003.

   Operating income decreased 8% due to the completion of certain advanced space flight systems contracts in 2003 and lower profit in our space launch vehicles product line, offset partially by increased income from our OBV missile defense interceptor program. Operating income from our OBV missile defense interceptor program was $20.6 million in 2004, or 68% of total segment income, compared to $17.2 million, or 52% of total segment income, in 2003. Our space launch vehicle product line operating income decreased due to lower program activity, as discussed above, and significant cost growth in 2004 on a Pegasus contract and a Taurus contract, offset partially by the $2.0 million contract termination fee discussed above. Operating income in our target vehicle product line was relatively unchanged in 2004 compared to 2003. The segment’s total operating margin was 9.3% in 2004 compared to 9.8% in 2003.

   Satellites and Related Space Systems – Satellites and related space systems segment revenues increased 52% primarily as a result of revenue growth of $121.1 million in our science, technology and defense satellite product line and $4.5 million from space technical services, offset partially by an $11.9 million revenue reduction in our communications satellites product line. The revenue increase in our science, technology and defense satellite product line was primarily due to $81.7 million in revenues from defense-related contracts awarded in 2004 and late 2003, together with 2004 revenue growth of $27.0 million from the Dawn interplanetary mission contract with NASA and $9.9 million from a new NASA scientific satellite contract started late in 2003. Revenues decreased $11.9 million to $91.2 million in our communications satellites product line primarily as a result of the completion of the BSAT-2c and PanAmSat Galaxy-XII satellites in 2003 and lower program activity in 2004 on the TELKOM satellite contract, partially offset by revenues from a new contract for two communications satellites awarded in late 2003.

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   Operating income increased 47% largely as a result of a $12.6 million increase in profits derived from the revenue growth in the science, technology and defense satellite product line, partially offset by a $5.1 million decrease in profits in our communications satellites product line. The decrease in communications satellites income in 2004 was primarily attributable to the completion and launch of the BSAT-2c satellite and the receipt of a $2.0 million fee associated with the cancellation of a contract in 2003 and an operating loss in 2004 on a new contract awarded in late 2003. These negative factors were partially offset by favorable profit adjustments on certain other communications satellites contracts. The profit growth in the science, technology and defense satellite product line reflects the revenue growth in this product line in addition to the absence in 2004 of $4.5 million of charges recorded in 2003 for increases in the costs to complete the OrbView-3 satellite contract. This segment’s operating margin (as a percentage of revenues) was 6.5% in 2004 compared to 6.7% in 2003.

   Transportation Management Systems – Transportation management systems segment revenues decreased 20% largely due to a reduction in activity on a contract that was substantially completed in the third quarter of 2004. This was partially offset by a $2.7 million favorable revenue adjustment on a previously suspended contract that was renegotiated and resumed in the third quarter of 2004.

   Operating results improved from a $7.6 million loss in 2003 to $1.2 million income in 2004. This improvement was primarily attributable to significant cost growth in 2003 that did not recur in 2004 and a $1.4 million favorable operating income adjustment in 2004 from the resumed contract mentioned above. The 2003 charges included $1.4 million of inventory-related charges, $2.1 million of non-recurring litigation expenses and $5.0 million of unfavorable adjustments as a result of cost increases on a number of contracts.

   Corporate and Other – Corporate and other revenues are comprised solely of the elimination of intercompany revenues. Corporate and other operating income in 2004 was comprised solely of the first quarter 2004 gain on the sale of notes received from a former affiliate discussed above. In 2003, corporate and other operating results included $4.8 million of settlement expense discussed in “Consolidated Results of Operations for the Years Ended December 31, 2005, 2004 and 2003.”

Liquidity and Capital Resources

   Cash Flow from Operating Activities – Cash flow from operating activities in 2005 was $74.7 million as compared to $67.0 million in 2004 and $46.5 million in 2003. The increase in 2005 as compared to 2004 was primarily due to a $9.2 million increase in changes in assets and liabilities. Receivables, inventories and other assets decreased $10.5 million in 2005, compared to a $0.5 million decrease in 2004. Accounts payable, accrued expenses, deferred revenue and other liabilities increased $4.5 million in 2005 compared to a $5.3 million increase in 2004.

   Cash flow from operating activities increased $20.5 million in 2004 as compared to 2003 primarily attributable to, and consistent with, the year-over-year growth in income adjusted for the impact of non-cash transactions.

   Cash Flow from Investing Activities – In 2005, we spent $15.6 million for capital expenditures and we reduced restricted cash by $2.0 million, resulting in a net $13.6 million use of cash for investing activities. In 2004, we spent $14.3 million for capital expenditures and we reduced restricted cash by $10.9 million, resulting in a net $3.4 million use of cash for investing activities. As of December 31,

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2005 and 2004, we had $6.3 million and $8.3 million, respectively, of restricted cash, primarily associated with letters of credit issued by financial institutions on our behalf.

   In 2003, we spent $9.6 million for capital expenditures and we increased restricted cash by $9.0 million. These uses of cash were partially offset by a $3.0 million cash receipt from an escrow account, resulting in a net $15.6 million use of cash for investing activities.

   Cash Flow from Financing Activities – In 2005, we repurchased and retired 3.17 million shares of our common stock at a cost of $34.6 million. In 2004, we repurchased and retired 595,000 shares of our common stock at a cost of $7.0 million.

   During 2005 and 2004, we received $7.0 million and $18.1 million, respectively, from the issuance of common stock in connection with stock option and warrant exercises. The 2004 activity included $11.5 million received from the exercise of 2.4 million common stock warrants prior to their expiration date in 2004.

   During 2004, we repurchased and cancelled $8.6 million of our 9% senior notes at a cost of $9.6 million, and we expended $0.4 million to obtain a new credit facility discussed below.

   In December 2004, we replaced our previous line of credit with a $50.0 million revolving credit facility (the “Revolver”) with the option to increase the amount of the Revolver up to $25 million to the extent that any one or more lenders commit to be a lender for such amount. Loans under the Revolver bear interest at LIBOR plus a margin ranging from 1.5% to 2.25% or at a prime rate plus a margin ranging from zero to 0.75%, with the applicable margin in each case varying according to our ratio of total debt to earnings before interest, taxes, depreciation and amortization. The Revolver is collateralized by our intellectual property and accounts receivable. Up to $40.0 million of the Revolver may be reserved for letters of credit. As of December 31, 2005, there were no borrowings under the Revolver, although $22.5 million of letters of credit were issued under the Revolver. Accordingly, as of December 31, 2005, $27.5 million of the Revolver was available for borrowing.

   In July 2003, we closed two financing transactions. In the first transaction, we issued $135.0 million of 9% senior notes due 2011 with interest payable semi-annually each January 15 and July 15, starting in 2004. During the third quarter of 2003, we used the net proceeds from this offering, together with available cash on hand, to repurchase or redeem all of our $135.0 million 12% Second Priority Secured Notes due 2006. In the second transaction, we replaced our previous $35.0 million revolving line of credit with a $50.0 million revolving line of credit that was subsequently replaced in December 2004, as described above.

   In 2003, we entered into an eight-year interest rate swap agreement with a financial institution on a notional amount of $50.0 million, whereby the company would receive fixed-rate interest of 9% in exchange for variable interest payments. This arrangement was designated an effective fair value hedge of $50.0 million of our 9% senior notes due 2011. In June 2005, we terminated the swap agreement.

   Our 9% senior notes due 2011 and the Revolver contain covenants limiting our ability to, among other things, incur additional debt, pay cash dividends, make investments, redeem or repurchase Orbital stock, enter into transactions with affiliates, merge or consolidate with others and dispose of assets or create liens on assets. In addition, the Revolver contains financial covenants with respect to leverage, secured leverage, fixed charge coverage, consolidated net worth and the ratio of accounts

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receivable to senior secured indebtedness. As of December 31, 2005, we were in compliance with all of these covenants.

   The following table sets forth our long-term obligations, excluding capital lease obligations (in thousands):

	December 31,
	2005		2004
9% senior notes, interest due semi-annually, principal due in July 2011	$	126,425	$	126,425
Interest rate swap fair value hedge adjustment on $50 million of 9% senior notes		—		1,844
		126,425		128,269
Less current portion		—		—
Long-term portion	$	126,425	$	128,269

   The fair value of our senior notes at December 31, 2005 was estimated at $135.3 million, based on market trading activity.

   Available Cash and Future Funding – At December 31, 2005, we had $158.8 million of unrestricted cash and cash equivalents. Management believes that available cash, cash expected to be generated from operations and borrowing capacity under the Revolver will be sufficient to fund our operating and capital expenditure requirements in the foreseeable future. However, there can be no assurance that this will be the case. Our ability to borrow additional funds is limited by the terms of our outstanding debt. Additionally, significant unforeseen events such as termination of major orders or late delivery or failure of launch vehicle or satellite products could adversely affect our liquidity and results of operations.

   In April 2005, our Board of Directors authorized the purchase of up to $50 million of our outstanding securities over a 12-month period. We may repurchase our 9% senior notes due 2011, common stock or common stock warrants that expire in 2006, or a combination thereof. Shares of common stock may be purchased from time to time in the open market, by block purchase or in negotiated transactions. The warrants and notes may be purchased in negotiated transactions. The timing, amount and type of securities to be repurchased will be determined based on our loan covenants, market conditions and other factors. As described above, we repurchased and retired 3.17 million shares of our common stock at a cost of $34.6 million during 2005 under this securities purchase program. As of December 31, 2005, $15.4 million of additional possible repurchases are authorized for 2006.

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Aggregate Contractual Obligations

   The following summarizes Orbital’s contractual obligations at December 31, 2005, both on- and off-balance sheet, and the effect such obligations are expected to have on our liquidity and cash flow in future periods (in millions):

			Payments Due by Period
			Less than		1 to 3		3 to 5		More than 5
	Total		1 Year		Years		Years		Years
Long-term debt	$	126.4	$	—	$	—	$	—	$	126.4
Interest on long-term debt		68.4		11.4		22.8		22.8		11.4
Capital leases		0.1		0.1		—		—		—
Operating leases(1)		94.8		13.8		24.1		17.6		39.3
Purchase obligations(2)		256.3		168.5		87.6		0.2		—
Other long-term liabilities		0.1		0.1		—		—		—
Total	$	546.1	$	193.9	$	134.5	$	40.6	$	177.1

(1)	Our obligations under operating leases consist of minimum rental commitments under non-cancelable operating leases primarily for office space and equipment.
(2)	Purchase obligations consist of open purchase orders that we issued to acquire materials, parts or services in future periods.

   Occasionally, certain contracts require us to post letters of credit supporting our performance obligations under the contracts. We had $28.8 million of letters of credit outstanding at December 31, 2005, of which $6.3 million was collateralized by our restricted cash and $22.5 million was issued under the Revolver.

Off-Balance Sheet Arrangements

   We believe that we do not have any material off-balance sheet arrangements, as defined by applicable securities regulations, that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

New Accounting Pronouncement

   In December 2004, Statement of Financial Accounting Standards (“SFAS”) No. 123(R), “Share-Based Payment,” was issued. SFAS No. 123(R) amends SFAS No. 123, “Accounting for Stock-Based Compensation,” to require companies to recognize as expense the fair value of all employee stock-based awards, including stock option grants. Our adoption date for SFAS No. 123(R) is January 1, 2006, using the modified prospective application method, as defined under SFAS No. 123(R). We are completing our assessment of the expected impact on our 2006 consolidated financial statements. See Note 8 to the consolidated financial statements elsewhere in this Form 10-K for further information regarding our stock-based compensation.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

   At December 31, 2005, we had $3.5 million of receivables denominated in Japanese yen and $5.9 million denominated in Singapore dollars. At December 31, 2004, we had $4.3 million of receivables denominated in Japanese yen and $3.7 million denominated in Singapore dollars.

   From time to time, we enter into forward exchange contracts to hedge against foreign currency fluctuations on receivables or expected payments denominated in foreign currency. At December 31, 2005, we had no foreign currency forward exchange contracts.

   The fair market value of our outstanding 9% senior notes due 2011 was estimated at approximately $135.3 million and $142.5 million at December 31, 2005 and 2004, respectively, based on market trading activity.

   We have an unfunded deferred compensation plan for senior managers and executive officers with a total liability balance of $5.2 million and $4.9 million at December 31, 2005 and 2004, respectively. This liability is subject to fluctuation based upon the market value of certain investment securities selected by participants to measure the market fluctuations and to measure our liability to each participant.

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Item 8.  Financial Statements and Supplementary Data

INDEX TO FINANCIAL STATEMENTS AND SCHEDULE

	Page
Report of Independent Registered Public Accounting Firm		35
Consolidated Income Statements		37
Consolidated Balance Sheets		38
Consolidated Statements of Stockholders’ Equity		39
Consolidated Statements of Cash Flows		40
Notes to Consolidated Financial Statements		41
Schedule II – Valuation and Qualifying Accounts		59

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and
           Stockholders of Orbital Sciences Corporation:

   We have completed integrated audits of Orbital Sciences Corporation’s 2005 and 2004 consolidated financial statements and of its internal control over financial reporting as of December 31, 2005, and an audit of its 2003 consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Our opinions, based on our audits, are presented below.

  Consolidated financial statements and financial statement schedule

   In our opinion, the consolidated financial statements listed in the accompanying index present fairly, in all material respects, the financial position of Orbital Sciences Corporation and its subsidiaries at December 31, 2005 and 2004, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2005 in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedule listed in the accompanying index presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. These financial statements and financial statement schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and financial statement schedule based on our audits. We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit of financial statements includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

  Internal control over financial reporting

   Also, in our opinion, management’s assessment, included in Management’s Report on Internal Control Over Financial Reporting appearing under Item 9A, that the Company maintained effective internal control over financial reporting as of December 31, 2005 based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), is fairly stated, in all material respects, based on those criteria. Furthermore, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2005, based on criteria established in Internal Control – Integrated Framework issued by the COSO. The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express opinions on management’s assessment and on the effectiveness of the Company’s internal control over financial reporting based on our audit. We conducted our audit of internal control over financial reporting in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about

35

whether effective internal control over financial reporting was maintained in all material respects. An audit of internal control over financial reporting includes obtaining an understanding of internal control over financial reporting, evaluating management’s assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we consider necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinions.

   A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

   Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

PricewaterhouseCoopers LLP

McLean, Virginia

March 2, 2006

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ORBITAL SCIENCES CORPORATION

CONSOLIDATED INCOME STATEMENTS

(In thousands, except per share data)

	Years Ended December 31,
	2005			2004			2003
Revenues	$	703,450		$	675,935		$	581,500
Costs of goods sold		578,764			566,787			477,273
Gross profit		124,686			109,148			104,227
Research and development expenses		6,294			6,311			7,835
Selling, general and administrative expenses		65,439			50,052			56,963
Settlement expense		—			(2,538	)		3,871
Income from operations		52,953			55,323			35,558
Interest expense		(11,746	)		(11,386	)		(18,683	)
Interest income and other		4,576			2,290			1,347
Gain on reversal of allocated losses of affiliate		—			—			40,586
Debt extinguishment expense		—			(2,099	)		(38,836	)
Income before taxes		45,783			44,128			19,972
Income tax (provision) benefit		(17,620	)		155,872			265
Net income	$	28,163		$	200,000		$	20,237
Basic net income per share	$	0.51		$	4.03		$	0.43
Diluted net income per share	$	0.45		$	3.08		$	0.35

See accompanying notes to consolidated financial statements.

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ORBITAL SCIENCES CORPORATION

CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

			December 31,
			2005			2004
ASSETS
Current Assets:
	Cash and cash equivalents		$	158,849		$	125,504
	Restricted cash			6,294			8,315
	Receivables, net			131,251			149,480
	Inventories, net			19,006			13,565
	Deferred income taxes, net			30,614			26,710
	Other current assets			6,473			3,880
		Total current assets		352,487			327,454
Property, plant and equipment, net				85,640			83,154
Goodwill				55,551			55,551
Deferred income taxes, net				166,248			185,940
Other non-current assets				8,864			11,671
		Total Assets	$	668,790		$	663,770
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
	Short-term borrowings and current portion of long-term obligations		$	76		$	161
	Accounts payable			14,404			30,740
	Accrued expenses			101,749			90,714
	Deferred revenues			30,281			19,478
		Total current liabilities		146,510			141,093
Long-term obligations, net of current portion				126,459			128,375
Other non-current liabilities				87			178
		Total liabilities		273,056			269,646
Commitments and contingencies
Stockholders’ Equity:
	Preferred Stock, par value $.01; 10,000,000 shares authorized, none outstanding			—			—
	Common Stock, par value $.01; 200,000,000 shares authorized, 55,032,244 and 52,823,032 shares outstanding, respectively			550			528
	Additional paid-in capital			591,604			618,232
	Deferred compensation			—			(53	)
	Accumulated deficit			(196,420	)		(224,583	)
		Total stockholders’ equity		395,734			394,124
		Total Liabilities and Stockholders’ Equity	$	668,790		$	663,770

See accompanying notes to consolidated financial statements.

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ORBITAL SCIENCES CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands)

		Common Stock						Additional
								Paid-In			Deferred			Accumulated
		Shares			Amount			Capital			Compensation			Deficit			Total
Balance, December 31, 2002			45,611		$	456		$	579,285		$	(353	)	$	(444,820	)	$	134,568
	Shares issued to employees, officers and directors		2,140			21			10,401			—			—			10,422
	Warrants exercised		122			1			436			—			—			437
	Issuance of restricted stock		200			2			1,360			(1,362	)		—			—
	Amortization of deferred compensation		—			—			—			1,213			—			1,213
	Net income		—			—			—			—			20,237			20,237
Balance, December 31, 2003			48,073			480			591,482			(502	)		(424,583	)		166,877
	Shares issued to employees, officers and directors		1,260			13			5,915			—			—			5,928
	Warrants exercised		4,085			41			11,392			—			—			11,433
	Repurchases of common stock		(595	)		(6	)		(6,994	)		—			—			(7,000	)
	Amortization of deferred compensation		—			—			—			449			—			449
	Tax benefit of stock-based compensation		—			—			16,437			—			—			16,437
	Net income		—			—			—			—			200,000			200,000
Balance, December 31, 2004			52,823			528			618,232			(53	)		(224,583	)		394,124
	Shares issued to employees, officers and directors		598			6			3,825			—			—			3,831
	Warrants exercised		4,782			48			2,880			—			—			2,928
	Repurchases of common stock		(3,171	)		(32	)		(34,536	)		—			—			(34,568	)
	Amortization of deferred compensation		—			—			—			53			—			53
	Tax benefit of stock-based compensation		—			—			1,203			—			—			1,203
	Net income		—			—			—			—			28,163			28,163
Balance, December 31, 2005			55,032		$	550		$	591,604		$	—		$	(196,420	)	$	395,734

See accompanying notes to consolidated financial statements.

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ORBITAL SCIENCES CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

				Years Ended December 31,
				2005			2004			2003
Operating Activities:
	Net income			$	28,163		$	200,000		$	20,237
	Adjustments to reconcile net income to net cash provided by operating activities:
		Depreciation expense			13,954			15,009			16,008
		Deferred income taxes			16,990			(156,471	)		—
		Amortization of debt costs			612			860			4,056
		Gain on reversal of allocated losses of affiliate			—			—			(40,586	)
		Debt extinguishment expense			—			2,099			38,836
		Stock-based compensation and other			(50	)		(318	)		7,280
	Changes in assets and liabilities:
		Receivables			18,229			28			(14,332	)
		Inventories			(5,441	)		(923	)		4,494
		Other assets			(2,239	)		1,370			(355	)
		Accounts payable and accrued expenses			(6,235	)		4,672			23,837
		Deferred revenue			10,803			3,186			(11,802	)
		Other liabilities			(90	)		(2,514	)		(1,199	)
			Net cash provided by operating activities		74,696			66,998			46,474
Investing Activities:
	Capital expenditures				(15,636	)		(14,340	)		(9,578	)
	Escrow proceeds received				—			—			3,000
	Decrease (increase) in cash restricted for letters of credit, net				2,021			10,941			(9,016	)
			Net cash used in investing activities		(13,615	)		(3,399	)		(15,594	)
Financing Activities:
	Principal payments on long-term obligations and other				(157	)		(10,109	)		(146,952	)
	Net proceeds from issuances of long-term obligations				—			—			128,962
	Repurchase of common stock				(34,568	)		(7,000	)		—
	Net proceeds from issuances of common stock				6,989			18,114			4,570
			Net cash (used in) provided by financing activities		(27,736	)		1,005			(13,420	)
Net increase in cash and cash equivalents					33,345			64,604			17,460
Cash and cash equivalents, beginning of year					125,504			60,900			43,440
Cash and cash equivalents, end of year				$	158,849		$	125,504		$	60,900

See accompanying notes to consolidated financial statements.

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ORBITAL SCIENCES CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Business and Summary of Significant Accounting Policies

Business Operations

   Orbital Sciences Corporation (together with its subsidiaries, “Orbital” or the “company”), a Delaware corporation, develops and manufactures small rockets and space systems for commercial, military and civil government customers. The company’s primary products are satellites and launch vehicles, including low-orbit, geosynchronous-orbit and planetary spacecraft for communications, remote sensing, scientific and military 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 offers space-related technical services to government agencies and develops and builds satellite-based transportation management systems for public transit agencies and private vehicle fleet operators.

Principles of Consolidation

   The consolidated financial statements include the accounts of Orbital and its wholly owned subsidiaries. As of December 31, 2005 and 2004, the company had no partially owned subsidiaries. All significant intercompany balances and transactions have been eliminated.

Preparation of Consolidated Financial Statements

   The preparation of consolidated financial statements in conformity with generally accepted accounting principles in the United States requires management to make estimates and assumptions, including estimates of future contract costs and earnings. Such estimates and assumptions affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and earnings during the current reporting period. Management periodically assesses and evaluates the adequacy and/or deficiency of estimated liabilities recorded for various reserves, liabilities, contract risks and uncertainties. Actual results could differ from these estimates.

   All financial amounts are stated in U.S. dollars unless otherwise indicated.

Revenue Recognition

   Orbital’s revenue is derived primarily from long-term contracts. Revenues on cost-reimbursable contracts are recognized to the extent of costs incurred plus a proportionate amount of fee earned. Revenues on long-term fixed-price contracts are generally recognized using the percentage-of-completion method of accounting. Such revenues are recorded based on the percentage that costs incurred to date bear to the most recent estimates of total costs to complete each contract. Estimating future costs and, therefore, revenues and profits, is a process requiring a high degree of management judgment, including management’s assumptions regarding future operations of Orbital as well as general economic conditions. In the event of a change in total estimated contract cost or profit, the cumulative effect of such change is recorded in the period the change in estimate occurs.

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Frequently, the period of performance of a contract extends over a long period of time and, as such, revenue recognition and the company’s profitability from a particular contract may be adversely affected to the extent that estimated cost to complete or incentive or award fee estimates are revised, delivery schedules are delayed or progress under a contract is otherwise impeded. Accordingly, the company’s recorded revenues and gross profits from period to period can fluctuate significantly. In the event cost estimates indicate a loss on a contract, the total amount of such loss, excluding general and administrative expenses, is recorded in the period in which the loss is first estimated.

   Certain contracts include provisions for increased or decreased revenue and profit based on performance against established targets. Incentive and award fees are included in estimated contract revenue at the time the amounts can be reasonably determined and are reasonably assured based upon historical experience and other objective criteria. Should performance under such contracts differ from previous assumptions, current period revenues and profits would be adjusted and could therefore fluctuate significantly.

Property, Plant and Equipment

   Property, plant and equipment are stated at cost. Major improvements are capitalized while expenditures for maintenance, repairs and minor improvements are charged to expense. When assets are retired or otherwise disposed of, the assets and related accumulated depreciation and amortization are eliminated from the accounts and any resulting gain or loss is reflected in operations. Depreciation expense is determined using the straight-line method based on the following useful lives:

Buildings	20 years
Machinery, equipment and software	3 to 12 years
Leasehold improvements	Shorter of estimated useful life or lease term

Recoverability of Long-Lived Assets

   Orbital’s policy is to evaluate its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. When an evaluation indicates that an asset impairment has occurred, a loss is recognized and the asset is adjusted to its estimated fair value. Given the inherent technical and commercial risks within the aerospace industry and the special purpose use of certain of the company’s assets, future impairment charges could be required if the company were to change its current expectation that it will recover the carrying amount of its long-lived assets from future operations.

Income Taxes

   Orbital accounts for income taxes using the asset and liability method. Under this method, deferred tax assets and liabilities are recorded for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a tax rate change on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The company records valuation

42

allowances to reduce net deferred tax assets to the amount considered more likely than not to be realized. Changes in estimates of future taxable income can materially change the amount of such valuation allowances.

Earnings Per Share

   Basic earnings per share are calculated using the weighted-average number of common shares outstanding during the periods. Diluted earnings per share include the weighted-average effect of all dilutive securities outstanding during the periods.

   The following table presents the shares used in computing basic and diluted earnings per share (in thousands):

	Years Ended December 31,
	2005		2004		2003
Weighted average of outstanding shares for basic earnings per share		54,804		49,658		46,718
Dilutive effect of outstanding stock options		1,313		2,441		1,641
Dilutive effect of outstanding stock warrants		6,199		12,798		9,742
Dilutive effect of restricted stock		99		125		120
Shares for diluted earnings per share		62,415		65,022		58,221

   In 2005, 2004 and 2003, diluted weighted-average shares outstanding excluded the effect of 3.2 million, 2.0 million and 2.3 million, respectively, of stock options that were anti-dilutive.

Cash and Cash Equivalents

   Cash and cash equivalents consist of cash and short-term, highly liquid investments with maturities of 90 days or less.

Inventories

   Inventory is stated at the lower of cost or estimated market value. Cost is determined on an average cost or specific identification basis. Estimated market value is determined based on assumptions about future demand and market conditions. If actual market conditions were less favorable than those previously projected by management, inventory write-downs could be required.

Self-Constructed Assets

   The company self-constructs some of its ground and airborne support and special test equipment utilized in the manufacture, production and delivery of some of its products. Orbital capitalizes direct costs incurred in constructing such equipment and certain allocated indirect costs. Capitalized costs generally include direct software coding costs and certain allocated indirect costs.

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Goodwill

   Goodwill comprises costs in excess of fair values assigned to the underlying net assets of acquired companies. Goodwill is tested at least annually for impairment using an estimation of the fair value of the reporting unit that the goodwill is attributable to.

Deferred Revenue

   The company occasionally receives cash from customers in excess of revenues recognized on certain contracts. These cash receipts are reported as deferred revenues on the balance sheet.

Comprehensive Income

   Orbital’s comprehensive income in the years ended December 31, 2005, 2004 and 2003 was equal to net income. Accumulated other comprehensive income as of December 31, 2005, 2004 and 2003 was $0.

Financial Instruments

   Orbital occasionally uses forward contracts and interest rate swaps to manage certain foreign currency and interest rate exposures, respectively. Derivative instruments, such as forward contracts and interest rate swaps, are viewed as risk management tools by Orbital and are not used for trading or speculative purposes. Derivatives used for hedging purposes are generally designated as effective hedges. Accordingly, changes in the fair value of a derivative contract are highly correlated with changes in the fair value of the underlying hedged item at inception of the hedge and over the life of the hedge contract. Derivative instruments are recorded on the balance sheet at fair value. The ineffective portion of all hedges, if any, is recognized currently in earnings.

Research and Development Expenses

   Expenditures for company-sponsored research and development projects are expensed as incurred. Research and development projects performed under contracts for customers are accounted for as contract costs as the work is performed.

Stock-Based Compensation and New Accounting Pronouncement

   In December 2004, Statement of Financial Accounting Standards (“SFAS”) No. 123(R), “Share-Based Payment,” was issued. SFAS No. 123(R) amends SFAS No. 123, “Accounting for Stock-Based Compensation,” to require companies to recognize as expense the fair value of all employee stock-based awards, including stock option grants. The company’s adoption date for SFAS No. 123(R) is January 1, 2006, using the modified prospective application method, as defined under SFAS No. 123(R). The company is completing its assessment of the expected impact on its 2006 consolidated financial statements. See Note 8 for further information regarding the company’s stock-based compensation.

   Through December 31, 2005, the company applied the provisions of SFAS No. 123, as amended by SFAS No. 148, “Accounting for Stock-Based Compensation — Transition and Disclosure, an

44

amendment of FASB Statement No. 123.” Under those provisions, the company has provided pro forma net income and earnings per share disclosures for its employee stock option grants as if the fair-value-based method defined in SFAS No. 123 had been applied (see below). The company has not recorded any compensation cost associated with stock options issued to date since all such options had an exercise price equal to the market value of the company’s common stock on the date of grant.

   The company used the Black-Scholes option-pricing model to determine the pro forma impact under SFAS Nos. 123 and 148 on the company’s net income and earnings per share. The model utilizes certain information, such as the interest rate on a risk-free security maturing generally at the same time as the option being valued, and requires certain assumptions, such as the expected amount of time an option will be outstanding until it is exercised or it expires, to calculate the fair value of stock options granted. This information and the assumptions used for 2005, 2004 and 2003 are summarized as follows:

	2005		2004		2003
Volatility		57%		64%		66%
Risk-free interest rate		3.71%		3.06%		1.7%
Weighted-average fair value per share at grant date	$	4.75	$	4.94	$	3.35
Expected dividend yield		—		—		—
Average expected life of options (years)		4.5		2.5 - 4.5		4.5

   The following table illustrates the effect on net income and earnings per share if the company had applied the fair value recognition provisions of SFAS No. 123 to its stock option plan (in thousands, except per share amounts):

		Years Ended December 31,
		2005			2004			2003
Net income, as reported		$	28,163		$	200,000		$	20,237
Deduct: Net stock-based employee compensation expense determined under fair value based method			(2,257	)		(6,673	)		(4,464	)
Pro forma net income		$	25,906		$	193,327		$	15,773
Net income per share:
	Basic — as reported	$	0.51		$	4.03		$	0.43
	Basic — pro forma	$	0.47		$	3.89		$	0.34
	Diluted — as reported	$	0.45		$	3.08		$	0.35
	Diluted — pro forma	$	0.42		$	2.97		$	0.27

   Pro forma net income reflects only options granted through 2005 and, therefore, may not be representative of the effects for future periods.

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2. Industry Segment Information

Orbital’s products and services are grouped into three reportable segments: (i) launch vehicles; (ii) satellites and related space systems; and (iii) transportation management systems. Reportable segments are generally organized based upon product lines. Corporate office transactions that have not been attributed to a particular segment, as well as consolidating eliminations and adjustments, are reported in corporate and other.

   The primary products and services from which the company’s reportable segments derive revenues are:

•  Launch Vehicles. Rockets that are used as interceptor and target vehicles for missile defense systems, small-class space launch vehicles that place satellites into low-Earth orbit, and suborbital launch vehicles that place payloads into a variety of high-altitude trajectories.

•  Satellites and Related Space Systems. Satellites and interplanetary spacecraft for communications, remote sensing, scientific and military missions, and space-related technical services.

•  Transportation Management Systems. Software-based systems that combine satellite navigation and wireless communications to enable municipal transit and other fleet operators to manage and dispatch vehicles.

   Intersegment sales are generally negotiated and accounted for under terms and conditions that are similar to other commercial and government contracts. Substantially all of the company’s assets and operations are located within the United States.

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   The following table presents operating information and identifiable assets by reportable segment (in thousands):

		Years Ended December 31,
		2005			2004			2003
Launch Vehicles:
	Revenues	$	335,315		$	323,287		$	333,272
	Operating income		35,444			30,103			32,801
	Identifiable assets		114,882			123,882			126,960
	Capital expenditures		5,796			4,303			5,228
	Depreciation		5,293			5,533			5,805
Satellites and Related Space Systems:
	Revenues(1)	$	348,579		$	331,726		$	218,679
	Operating income		16,015			21,439			14,555
	Identifiable assets		135,903			130,047			149,933
	Capital expenditures		7,852			8,236			2,786
	Depreciation		4,906			5,286			5,705
Transportation Management Systems:
	Revenues	$	26,532		$	29,135		$	36,571
	Operating income (loss)		1,494			1,243			(7,629	)
	Identifiable assets		19,251			23,124			37,596
	Capital expenditures		432			166			266
	Depreciation		599			732			787
Corporate and Other:
	Revenues(1)	$	(6,976	)	$	(8,213	)	$	(7,022	)
	Operating income (loss)(2)		—			2,538			(4,169	)
	Identifiable assets		398,754			386,717			124,811
	Capital expenditures		1,556			1,635			1,298
	Depreciation		3,156			3,458			3,711
Consolidated:
	Revenues	$	703,450		$	675,935		$	581,500
	Operating income		52,953			55,323			35,558
	Identifiable assets		668,790			663,770			439,300
	Capital expenditures		15,636			14,340			9,578
	Depreciation		13,954			15,009			16,008

(1)	Corporate and other revenues are comprised solely of the elimination of intersegment sales. Satellites and related space systems revenues include $6.3 million, $7.9 million and $7.0 million of the intersegment sales in 2005, 2004 and 2003, respectively.
(2)	Corporate and other operating income in 2004 included a $2.5 million gain in connection with the sale of a note from a former affiliate. Corporate and other operating income in 2003 included $4.8 million of settlement charges (see Note 5), offset by a $0.9 million reduction in settlement expense related to the settlement of a legal matter.

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Export Sales and Major Customers

   Orbital’s revenues by geographic area, as determined by customer location, were as follows (in thousands):

		Years Ended December 31,
		2005		2004		2003
United States		$	635,138	$	573,339	$	469,997
East Asia and Australia			57,812		102,596		111,503
Europe			10,500		—		—
	Total	$	703,450	$	675,935	$	581,500

   Approximately 77%, 80% and 67% of the company’s revenues in 2005, 2004 and 2003, respectively, were generated under contracts with the U.S. government and its agencies or under subcontracts with the U.S. government’s prime contractors. All such revenues were recorded either in the launch vehicles segment or in the satellites and related space systems segment.

3. Balance Sheet Accounts

Restricted Cash

   At December 31, 2005 and 2004, the company had $6.3 million and $8.3 million, respectively, of cash restricted primarily to collateralize letters of credit.

Inventory

   Inventories consisted of the following (in thousands):

		December 31,
		2005			2004
Inventories		$	19,626		$	16,554
Allowance for inventory obsolescence			(620	)		(2,989	)
	Total	$	19,006		$	13,565

   Substantially all of the company’s inventory consisted of component parts and raw materials.

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Receivables

   The components of receivables were as follows (in thousands):

		December 31,
		2005			2004
Billed		$	31,546		$	54,800
Unbilled			92,323			84,208
Retainages due upon contract completion			7,497			10,649
Allowance for doubtful accounts			(115	)		(177	)
	Total	$	131,251		$	149,480

   Approximately 77% of unbilled receivables and retainages at December 31, 2005 are due within one year and will be billed on the basis of contract terms and delivery schedules.

   As of December 31, 2005, unbilled receivables included $16.8 million of incentive fees on certain satellite contracts that become due incrementally over periods of up to 15 years, subject to the achievement of performance criteria. Additionally, some satellite contracts require the company to refund cash to the customer if performance criteria, which cover periods of up to 15 years, are not satisfied and, as of December 31, 2005, up to $27.9 million of revenues recognized under such contracts could be reversed if satellite performance criteria were not met. The company generally procures insurance policies that would indemnify the company for satellite incentive fees that are not earned and for performance refund obligations.

   Receivables from non-U.S. customers totaled $10.5 million and $11.0 million at December 31, 2005 and 2004, respectively.

Property, Plant and Equipment

   Property, plant and equipment consisted of the following (in thousands):

		December 31,
		2005			2004
Land		$	4,061		$	4,061
Buildings and leasehold improvements			40,775			39,671
Furniture, fixtures and equipment			147,110			129,513
Software and other			15,255			18,013
			207,201			191,258
Accumulated depreciation and amortization			(121,561	)		(108,104	)
	Total	$	85,640		$	83,154

   Depreciation expense for the years ended December 31, 2005, 2004 and 2003 was $14.0 million, $15.0 million and $16.0 million, respectively.

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Accrued Expenses

   Accrued expenses consisted of the following (in thousands):

		December 31,
		2005		2004
Contract related accruals		$	51,110	$	42,115
Payroll, payroll taxes and fringe benefits			34,051		30,939
Interest			5,434		3,844
Warranty obligations			2,028		3,145
Other			9,126		10,671
	Total	$	101,749	$	90,714

Warranties

   The company assumes warranty obligations in connection with certain transportation management systems contracts. The company records a liability for the expected costs to service estimated warranty claims. Activity in the warranty liability consisted of the following (in thousands):

	2005			2004			2003
Balance at January 1	$	3,145		$	5,020		$	4,554
Accruals during the year		1,537			844			1,473
Reductions during the year		(2,654	)		(2,719	)		(1,007	)
Balance at December 31	$	2,028		$	3,145		$	5,020

4. Debt Obligations

   Long-term obligations, excluding capital lease obligations, consisted of the following (in thousands):

	December 31,
	2005		2004
9% senior notes, interest due semi-annually, principal due in July 2011	$	126,425	$	126,425
Interest rate swap fair value hedge adjustment on $50 million of 9% senior notes		—		1,844
		126,425		128,269
Less current portion		—		—
Long-term portion	$	126,425	$	128,269

   The fair value of the 9% senior notes at December 31, 2005 was estimated at approximately $135.3 million based on market trading activity.

50

Revolving Credit Facility

   The company has a $50.0 million revolving credit facility (the “Revolver”) with the option to increase the amount of the Revolver up to $25 million to the extent that any one or more lenders commit to be a lender for such amount. Loans under the Revolver bear interest at LIBOR plus a margin ranging from 1.5% to 2.25% or at a prime rate plus a margin ranging from zero to 0.75%, with the applicable margin in each case varying according to the company’s ratio of total debt to earnings before interest, taxes, depreciation and amortization. The Revolver is collateralized by the company’s intellectual property and accounts receivable. Up to $40.0 million of the Revolver may be reserved for letters of credit. As of December 31, 2005, there were no borrowings under the Revolver, although $22.5 million of letters of credit were issued under the Revolver. Accordingly, as of December 31, 2005, $27.5 million of the Revolver was available for borrowing.

Debt Extinguishment Transactions

   During 2004, the company repurchased and cancelled $8.6 million of the company’s 9% notes at a cost of $9.6 million.

   During 2003, the company recorded $38.8 million of debt extinguishment expenses in connection with financing transactions in July 2003. The debt extinguishment expenses consisted of accelerated amortization of unamortized debt discount of $20.7 million on notes that were repurchased or redeemed with the proceeds from the issuance of the company’s 9% senior notes, accelerated amortization of debt issuance costs of $10.1 million and $8.0 million in prepayment premiums and other expenses.

Debt Covenants

   Orbital’s 9% senior notes due 2011 and the Revolver contain covenants limiting the company’s ability to, among other things, incur additional debt, pay cash dividends, make investments, redeem or repurchase Orbital stock, enter into transactions with affiliates, merge or consolidate with others and dispose of assets or create liens on assets. In addition, the Revolver contains financial covenants with respect to leverage, secured leverage, fixed charge coverage, consolidated net worth and the ratio of accounts receivable to senior secured indebtedness. As of December 31, 2005, the company was in compliance with all of these covenants.

Interest Rate Swap

   In 2003, the company entered into an eight-year interest rate swap agreement with a financial institution on a notional amount of $50.0 million, whereby the company would receive fixed-rate interest of 9% in exchange for variable interest payments. This arrangement was designated an effective fair value hedge of $50.0 million of the company’s 9% senior notes due 2011. In June 2005, the company terminated the swap agreement.

5.  Former Affiliate Transactions

   In December 2003, the company’s former affiliate, Orbital Imaging Corporation (“ORBIMAGE”), reorganized and Orbital’s equity ownership interest was cancelled. Orbital had used the equity method of accounting for its investment in ORBIMAGE and through

51

December 31, 2003, Orbital had recognized $40.6 million of losses in excess of its investment. In connection with the cancellation of Orbital’s ownership interest, the company recorded a $40.6 million gain in December 2003 to reverse the previously recorded losses in excess of its investment. Orbital does not have any affiliation with ORBIMAGE’s successor company.

   In 2003, Orbital recorded $4.8 million of settlement charges in connection with the settlement of litigation and disputes between ORBIMAGE and Orbital. These charges included a $2.3 million delay penalty related to the OrbView-3 satellite and a $2.5 million litigation settlement payment.

   Orbital received $2.5 million of notes receivable from ORBIMAGE in connection with its reorganization in December 2003. In January 2004, Orbital sold the notes to a third party financial institution and recorded a $2.5 million gain as a credit to settlement expense.

6.  Income Taxes

   For the year ended December 31, 2003, and until the fourth quarter of 2004, Orbital had recorded a valuation allowance to fully reserve its net deferred tax assets based on the company’s assessment that the realization of the net deferred tax assets did not meet the “more likely than not” criterion under SFAS No. 109, “Accounting for Income Taxes.” As of December 31, 2004 the company determined that based upon a number of factors, including the company’s cumulative taxable income in recent years and expected profitability in future years, substantially all of its net deferred tax assets are “more likely than not” realizable through future earnings. Accordingly, as of December 31, 2004 the company reversed $212.6 million of its deferred income tax valuation allowance and recorded (i) a tax benefit of $156.5 million in the consolidated income statement, (ii) a $39.7 million reduction in goodwill and (iii) a $16.4 million increase to additional paid-in capital. The portion of the reversal recorded as a reduction in goodwill relates to valuation allowances established in prior years in connection with business acquisitions. The portion of the reversal recorded as an increase to additional paid-in capital is primarily related to tax benefits associated with stock option exercises in 2004 and prior years.

   The company’s deferred tax assets and liabilities were (in thousands):

			December 31,
			2005			2004
Deferred Tax Assets:
	U.S. Federal and state net operating loss carryforwards		$	153,830		$	167,284
	Capitalized research and development costs			32,128			34,607
	Accruals and reserves			14,811			16,478
	Tax credit carryforwards			2,919			2,978
	Intangible assets and other			1,809			1,977
		Total deferred tax assets		205,497			223,324
	Valuation allowance			(3,189	)		(3,986	)
		Deferred tax assets, net		202,308			219,338
Deferred Tax Liabilities:
	Excess tax depreciation and other			(5,446	)		(6,688	)
		Net deferred tax assets	$	196,862		$	212,650

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   Of the deferred net tax assets at December 31, 2005, $30.6 million are classified as current assets in the consolidated balance sheet, consisting of $15.2 million in U.S. Federal and state net operating loss carryforwards and $15.4 million in accruals and reserves and other. Of the deferred net tax assets at December 31, 2004, $26.7 million are classified as current assets in the consolidated balance sheet, consisting of $10.1 million in U.S. Federal and state net operating loss carryforwards and $16.6 million in accruals and reserves and other. The remaining net deferred tax assets are classified as non-current assets in the consolidated balance sheet.

   The $17.6 million tax provision recorded in 2005 was comprised of $0.6 million in current tax provision and $17.0 million in deferred tax expense. The $155.9 million tax benefit recorded in 2004 was comprised of (i) the $156.5 million deferred tax benefit in connection with the reversal of the valuation allowance discussed above and (ii) a $0.6 million current provision for 2004 alternative minimum taxes and state tax obligations. In 2003, the benefit for income taxes was solely attributable to the refund of state income taxes paid in 2002.

   The income tax provisions (benefits) were different from those computed using the statutory U.S. Federal income tax rate as set forth below:

		Years Ended
		December 31,
		2005			2004			2003
U.S. Federal statutory rate			35.0	%		35.0	%		35.0	%
Investment in former affiliate			—			—			(70.2	)
State taxes			4.1			4.1			(5.0	)
Other, net			(0.6	)		0.6			4.3
Changes in valuation allowance			—			(392.9	)		34.6
	Effective rate		38.5	%		(353.2	)%		(1.3	)%

   At December 31, 2005, the company had U.S. Federal net operating loss carryforwards (portions of which expire beginning in 2008 through 2024) of approximately $403 million and U.S. research and experimental tax credit carryforwards of approximately $2 million (portions of which expire beginning in 2006 through 2008). These net operating loss carryforwards and tax credits are subject to certain limitations and other restrictions.

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7. Commitments and Contingencies

Leases

   Aggregate minimum commitments under non-cancelable operating leases, primarily for office space and equipment rentals, at December 31, 2005 were as follows (in thousands):

2006	$	13,751
2007		13,028
2008		11,072
2009		9,980
2010		7,645
Thereafter		39,324
	$	94,800

   Rent expense for 2005, 2004 and 2003 was $14.9 million, $15.0 million and $14.4 million, respectively.

Litigation

   The company is party to certain litigation or other legal proceedings arising in the ordinary course of business. In the opinion of management, the outcome of such legal matters will not have a material adverse effect on the company’s results of operations or financial condition.

U.S. Government Contracts

   The accuracy and appropriateness of costs charged to U.S. government contracts are subject to regulation, audit and possible disallowance by the Defense Contract Audit Agency or other government agencies. Accordingly, costs billed or billable to U.S. government customers are subject to potential adjustment upon audit by such agencies.

   Most of the company’s U.S. government contracts are funded incrementally on a year-to-year basis. Changes in government policies, priorities or funding levels through agency or program budget reductions by the U.S. Congress or executive agencies could materially adversely affect the company’s financial condition or results of operations. Furthermore, contracts with the U.S. government may be terminated or suspended by the U.S. government at any time, with or without cause. Such contract suspensions or terminations could result in unreimbursable expenses or charges or otherwise adversely affect the company’s financial condition and/or results of operations.

   In the second quarter of 2005, the U.S. government commenced an investigation which the company believes is focused on contracting matters related to certain U.S. government launch vehicle programs. The company cannot predict whether the government ultimately will conclude that there have been violations of any federal contracting laws, policies or procedures, or any other applicable laws. Should any such violations be alleged or found, the company could face the possibility of criminal, civil and/or administrative penalties depending on the nature of such violations.

54

8. Share-Based Plans and Equity Transactions

Stock Option and Incentive Plans

   The company has stock option and incentive plans whereby the company may grant incentive or non-qualified stock options, restricted stock or restricted stock units and certain other instruments to employees, directors, consultants and advisers of the company. As of December 31, 2005, up to 2.3 million shares of common stock are available for grant under the plans. The exercise price of options granted under the plans must be at least equal to the fair market value of the company’s common stock on the date of grant. Options and restricted stock units generally vest over three years. Options expire no more than ten years following the grant date.

   On October 26, 2005, the company modified 348,793 of its unvested stock options that were previously awarded to the company’s employees with an exercise price greater than $11.28, such that the stock options became fully vested on that date. The company’s stock price was $11.28 on the date of the modification. The primary purpose of this vesting acceleration was to eliminate approximately $400,000 in compensation expense that the company would have recognized in its consolidated income statement after the adoption of SFAS No. 123(R) on January 1, 2006.

   The following two tables summarize information regarding the company’s stock options for the last three years:

							Weighted
							Average		Outstanding
		Number of			Option Price		Exercise		and
Options		Shares			Per Share		Price		Exercisable
Outstanding at December 31, 2002			6,123,727		$	1.30-$43.31	$	10.53		4,397,349
	Granted		2,492,428			4.33-8.95		6.38
	Exercised		(639,323	)		3.45-5.79		3.85
	Cancelled or expired		(637,095	)		3.45-43.31		18.31
Outstanding at December 31, 2003			7,339,737			1.30-43.31		9.01		4,854,429
	Granted		1,154,500			9.77-12.62		12.09
	Exercised		(1,167,478	)		1.30-12.25		4.54
	Cancelled or expired		(284,222	)		3.45-36.50		20.18
Outstanding at December 31, 2004			7,042,537			1.30-43.31		9.80		4,924,708
	Granted		97,500			9.16-11.49		10.73
	Exercised		(477,488	)		2.95-12.40		5.94
	Cancelled or expired		(130,410	)		3.45-30.69		12.43
Outstanding at December 31, 2005			6,532,139		$	1.30-$43.31	$	10.06		5,708,941

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		Options Outstanding
								Options Exercisable
				Weighted
		Number		Average		Weighted		Number		Weighted
Range of		Outstanding		Remaining		Average		Exercisable		Average
Exercise Prices		at Dec. 31, 2005		Contractual Life		Exercise Price		at Dec. 31, 2005		Exercise Price
$	1.30-$5.79		2,365,717		6.40	$	4.78		1,999,293	$	4.62
	6.15-12.05		2,218,435		5.97		9.60		1,761,661		10.07
	12.18-43.31		1,947,987		3.13		16.98		1,947,987		16.98
$	1.30-$43.31		6,532,139		5.28	$	10.06		5,708,941	$	10.52

   In 1999, the company adopted an Employee Stock Purchase Plan (“ESPP”) for employees of the company. The ESPP has quarterly offering periods and allows employees to purchase shares of stock at the lesser of 85% of the fair market value of shares at the beginning or the end of the offering period. During the three years ended December 31, 2005, employees purchased approximately 600,000 shares of Orbital’s common stock under the ESPP. As of December 31, 2005, up to 1.2 million additional shares of common stock are available for purchase under the ESPP.

   On October 26, 2005, the company granted 745,000 restricted stock units (“RSU”) valued at $11.28 each, all of which were outstanding as of December 31, 2005. Each RSU entitles the holder to receive from the company one share of common stock on the date of vesting. The cost of these units is amortized over the three-year vesting period, and the company recorded $1.4 million of such amortization expense in 2005.

Warrants

   In August 2002, the company issued 135,000 warrants to purchase approximately 16.5 million shares of the company’s common stock as part of a sale of units consisting of notes and warrants. Each warrant is exercisable for up to 122.23 shares of Orbital’s common stock at an exercise price of $3.86 per share for a period of four years from the date of their issuance. As of December 31, 2005, 75,390 of these warrants had been exercised.

   During 2004, 2.4 million common stock warrants with a $4.82 exercise price that had originally been issued in 2001 were exercised. The warrants expired on August 31, 2004. The company received $11.4 million of proceeds from the warrant exercises during 2004. A total of 2.1 million warrants expired unexercised.

Stockholder Rights Plan

   In October 1998, the company adopted a stockholder rights plan in which preferred stock purchase rights were granted as a dividend at the rate of one right for each share of common stock to stockholders of record on November 13, 1998. The plan is designed to deter coercive or unfair takeover tactics. The rights become exercisable only if a person or group in the future becomes the beneficial owner of 15% or more of Orbital’s common stock or announces a tender or exchange offer that would result in its ownership of 15% or more of the company’s common stock. The rights are generally redeemable by Orbital’s Board of Directors at a redemption price of $0.005 per right and expire on October 31, 2008.

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Securities Repurchase Transactions

   In April 2005, the company’s Board of Directors authorized the purchase of up to $50 million of the company’s outstanding securities over a 12-month period. The company may repurchase its 9% senior notes due 2011, common stock or common stock warrants that expire in 2006, or a combination thereof. Shares of common stock may be purchased from time to time in the open market, by block purchase or in negotiated transactions. The warrants and notes may be purchased in negotiated transactions. The timing, amount and type of securities to be repurchased will be determined based on our loan covenants, market conditions and other factors. The company repurchased and retired 3.17 million shares of its common stock at a cost of $34.6 million during 2005 under this securities purchase program. As of December 31, 2005, $15.4 million of additional possible repurchases are authorized for 2006.

9. Supplemental Disclosures

Defined Contribution Plan

   At December 31, 2005, the company had a defined contribution plan (the “Plan”) generally covering all full-time employees. Company contributions to the Plan are made based on certain plan provisions and at the discretion of the Board of Directors and were $8.7 million, $8.1 million and $6.8 million during 2005, 2004 and 2003, respectively. The company’s 2005 and 2004 contributions were made solely in the form of cash. The company’s 2003 contributions consisted of $1.2 million in cash and 800,000 shares of Orbital common stock, which employees are permitted to exchange into other investment alternatives.

Deferred Compensation Plan

   The company has a deferred compensation plan for senior managers and executive officers. At December 31, 2005 and 2004, liabilities related to this plan totaling $5.2 million and $4.9 million, respectively, were included in accrued expenses.

Cash Flow

   Cash payments for interest and income taxes were as follows (in thousands):

	Years Ended December 31,
	2005		2004		2003
Interest paid	$	10,156	$	11,224	$	15,781
Income taxes paid (refunds received)		559		529		(265	)

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10. Summary of Selected Quarterly Financial Data (Unaudited)

   The following is a summary of selected quarterly financial data for the previous two years (in thousands, except per share data).

		Quarters Ended
		March 31		June 30		Sept. 30		Dec. 31
2005
	Revenues	$	167,149	$	177,403	$	159,324	$	199,574
	Gross profit		27,811		32,485		30,113		34,277
	Income from operations		12,217		14,706		12,233		13,797
	Net income		6,152		7,584		6,810		7,617
	Basic income per share		0.11		0.14		0.13		0.14
	Diluted income per share		0.10		0.12		0.11		0.12
2004(1)
	Revenues	$	151,372	$	177,683	$	171,695	$	175,185
	Gross profit		24,918		29,651		29,237		25,342
	Income from operations		14,205		14,509		14,323		12,286
	Net income		11,494		11,053		11,395		166,058
	Basic income per share		0.24		0.23		0.23		3.22
	Diluted income per share		0.18		0.17		0.18		2.58

(1)  Operating income included a $2.5 million gain recorded as a credit to net settlement expenses in the first quarter of 2004 related to the company’s sale of senior subordinated notes which the company had received in 2003 from a former affiliate. Net income included a $156.5 million income tax benefit in the fourth quarter of 2004 related to a deferred tax valuation allowance reversal.

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ORBITAL SCIENCES CORPORATION

SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS

FORM 10-K FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003

(In thousands)

				Additions
						Charged/
		Balance at		Charged to		Credited to					Balance
		Start of		Costs and		Other					At End of
Description		Period		Expenses		Accounts		Deductions			Period
YEAR ENDED DECEMBER 31, 2003
	Allowance for doubtful accounts	$	2,086	$	66		—	$	(1,965	)	$	187
	Allowance for obsolete inventory		3,233		406		—		(806	)		2,833
	Deferred income tax valuation allowance		232,244		—		12,913		—			245,157
YEAR ENDED DECEMBER 31, 2004
	Allowance for doubtful accounts		187		—		—		(10	)		177
	Allowance for obsolete inventory		2,833		156		—		—			2,989
	Deferred income tax valuation allowance		245,157		—		—		(241,171	)		3,986
YEAR ENDED DECEMBER 31, 2005
	Allowance for doubtful accounts		177		—		—		(62	)		115
	Allowance for obsolete inventory		2,989		233		—		(2,602	)		620
	Deferred income tax valuation allowance		3,986		—		—		(797	)		3,189

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Item 9.  Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

   None.

Item 9A.  Controls and Procedures

Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures and Changes in Internal Control Over Financial Reporting

   An evaluation was performed under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934, as amended) as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that these disclosure controls and procedures were effective. There has been no change in our internal control over financial reporting during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Management’s Report on Internal Control Over Financial Reporting

   Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) under the Securities and Exchange Act of 1934, as amended. Under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.

   Based on our evaluation under the framework in Internal Control — Integrated Framework, management concluded that our internal control over financial reporting was effective as of December 31, 2005. Management’s assessment of the effectiveness of the company’s internal control over financial reporting as of December 31, 2005 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which is included herein.

Item 9B.  Other Information

   None.

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PART III

Item 10.  Directors and Executive Officers of the Registrant

   The information required by this Item is included under the captions “Executive Officers of the Registrant” in Part I above and under the captions “Proposal 1 — Election of Directors — Directors to be Elected at the 2006 Meeting, — Directors Whose Terms Expire in 2007, — Directors Whose Terms Expire in 2008,” “Corporate Governance — Code of Business Conduct and Ethics,” “Information Concerning the Board and Its Committees — Our Committees” and “Other Matters — Section 16(a) Beneficial Ownership Reporting Compliance” in our definitive proxy statement to be filed pursuant to Regulation 14A on or about March 21, 2006 and is incorporated herein by reference.

Item 11.  Executive Compensation

   The information required by this Item is included under the captions “Executive Compensation — Summary Compensation Table, — Option Grants in Last Fiscal Year, — Aggregated Option Exercises During 2005 and December 31, 2005 Option Values, — Indemnification Agreements, — Executive Employment Agreements, — Compensation Committee Interlocks and Insider Participation” and “Information Concerning the Board and Its Committees — Director Compensation” in our definitive proxy statement to be filed pursuant to Regulation 14A on or about March 21, 2006 and is incorporated herein by reference.

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Item 12.  Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Equity Compensation Plan Information

   The following table sets forth certain information regarding our equity compensation plans as of December 31, 2005.

					Number of Securities
					Remaining Available for
			Weighted-Average		Future Issuance Under
	Number of Securities to be		Exercise Price of		Equity Compensation
	Issued Upon Exercise of		Outstanding		Plans (excluding
	Outstanding Options,		Options, Warrants		securities reflected
Plan Category	Warrants and Rights		and Rights		in first column)
Equity Compensation Plans Approved by Security Holders(a)		1,510,162	$	16.27		1,755,000
Equity Compensation Plans Not Approved by Security Holders(b)		5,766,977	$	8.59		503,084
Total		7,277,139	$	10.18		2,258,084

(a)  The equity compensation plans approved by our stockholders include our 1990 Stock Option Plan, our Non-Employee Director Stock Option Plan, our 1997 Stock Option and Incentive Plan (“1997 Option Plan”) and our 2005 Stock Incentive Plan (“2005 Stock Plan”). A subsequent amendment in 1998 to the 1997 Option Plan increasing the total number of authorized shares thereunder to 3,200,000 also was approved by our stockholders. For purposes of reporting on the options outstanding under the 1997 Option Plan, we have assumed that all 3,200,000 shares approved by stockholders were issued during 1997 and 1998. Our stockholders approved the 2005 Stock Plan at our annual meeting of stockholders on April 28, 2005. The 2005 Stock Plan has a maximum of 2,500,000 shares available for issuance, subject to adjustment upon the occurrence of certain events. The share numbers shown in this row do not include shares that may be issued under the company’s 1999 Employee Stock Purchase Plan, which currently has approximately 1,230,000 shares available for issuance.

(b)  As permitted by the then applicable rules of the NYSE, in 1999, 2000, 2001 and 2002, we amended the 1997 Option Plan to increase the number of securities available for issuance under that plan by 1,800,000, 1,800,000, 1,800,000 and 2,000,000 shares, respectively, without seeking the approval of our stockholders. As of December 31, 2005, the 1997 Option Plan provided for awards of up to 10,600,000 incentive or non-qualified stock options and shares of restricted stock to employees, directors, consultants and advisers of the company and its subsidiaries without giving effect to any exercises or cancellations. Under the terms of the 1997 Option Plan, options may not be issued at less than 100% of the fair market value of the company’s common stock on the date of grant. Options under the 1997 Option Plan vest at a rate set forth by the Board of Directors in each individual option agreement, generally in one-third increments over a three-year period following the date of grant or in equal one-third increments, with one-third vesting on the grant date, an additional one-third vesting on the first anniversary of the grant date and

62

the remaining one-third vesting on the second anniversary of the grant date. Options expire no more than 10 years following the grant date. The 1997 Option Plan also provides for automatic grants of non-qualified stock options to our non-employee directors.

   The information required by this Item is also included under the caption “Ownership of Common Stock” in our definitive proxy statement to be filed pursuant to Regulation 14A on or about March 21, 2006 and is incorporated herein by reference.

Item 13.  Certain Relationships and Related Transactions

   None.

Item 14.  Principal Accounting Fees and Services

   The information required by this Item is included under the caption “Other Matters — Fees of Independent Auditors, — Pre-Approval of Audit and Non-Audit Services” in our definitive proxy statement to be filed pursuant to Regulation 14A on or about March 21, 2006 and is incorporated herein by reference.

63

PART IV

Item 15.  Exhibits and Financial Statement Schedule

   (a) Documents filed as part of this Report:

1.  Financial Statements. The following financial statements, together with the report of independent registered public accounting firm, are filed as a part of this report:

      A. Report of Independent Registered Public Accounting Firm

      B. Consolidated Income Statements

      C. Consolidated Balance Sheets

      D. Consolidated Statements of Stockholders’ Equity

      E. Consolidated Statements of Cash Flows

      F. Notes to Consolidated Financial Statements

2.  Financial Statement Schedule.

  The following additional financial data are transmitted with this report and should be read in conjunction with the consolidated financial statements contained herein. Schedules other than those listed below have been omitted because they are inapplicable or are not required.

Schedule II — Valuation and Qualifying Accounts

3.  Exhibits. A complete listing of exhibits required is given in the Exhibit Index that precedes the exhibits filed with this report.

   (b) See Item 15(a)(3) of this report.

   (c) See Item 15(a)(2) of this report.

64

   Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Dated: March 3, 2006	ORBITAL SCIENCES CORPORATION
	By:	/s/ David W. Thompson David W. Thompson Chairman of the Board and Chief Executive Officer

   Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated.

Dated: March 3, 2006

Signature:	Title:
/s/ David W. Thompson David W. Thompson	Chairman of the Board and Chief Executive Officer, Director (Principal Executive Officer)
/s/ James R. Thompson James R. Thompson	Vice Chairman, President and Chief Operating Officer, Director
/s/ Garrett E. Pierce Garrett E. Pierce	Vice Chairman and Chief Financial Officer, Director (Principal Financial Officer)
/s/ N. Paul Brost N. Paul Brost	Senior Vice President, Finance
/s/ Hollis M. Thompson Hollis M. Thompson	Vice President and Controller (Principal Accounting Officer)
/s/ Edward F. Crawley Edward F. Crawley	Director
/s/ Daniel J. Fink Daniel J. Fink	Director
/s/ Lennard A. Fisk Lennard A. Fisk	Director
/s/ Robert M. Hanisee Robert M. Hanisee	Director

65

/s/ Robert J. Hermann Robert J. Hermann	Director
/s/ Ronald T. Kadish Ronald T. Kadish	Director
/s/ Janice I. Obuchowski Janice I. Obuchowski	Director
/s/ James G. Roche James G. Roche	Director
/s/ Frank L. Salizzoni Frank L. Salizzoni	Director
/s/ Harrison H. Schmitt Harrison H. Schmitt	Director
/s/ Scott L. Webster Scott L. Webster	Director

66

EXHIBIT INDEX

   The following exhibits are filed as part of this report. Where such filing is made by incorporation by reference to a previously filed statement or report, such statement or report is identified in parentheses.

Exhibit
Number			Description of Exhibit
	3	.1	Restated Certificate of Incorporation (incorporated by reference to Exhibit 4.1 to the company’s Registration Statement on Form S-3 (File Number 333-08769) filed and effective on July 25, 1996).
	3	.2	Amended and Restated Bylaws (incorporated by reference to Exhibit 3.2 to the company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2005).
	3	.3	Certificate of Amendment to Restated Certificate of Incorporation, dated April 29, 1997 (incorporated by reference to Exhibit 3.3 to the company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1998).
	3	.4	Certificate of Amendment to Restated Certificate of Incorporation, dated April 30, 2003 (incorporated by reference to Exhibit 3.4 to the company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2003).
	3	.5	Certificate of Designation, Preferences and Rights of Series B Junior Participating Preferred Stock, dated November 2, 1998 (incorporated by reference to Exhibit 2 to the company’s Registration Statement on Form 8-A filed on November 2, 1998).
	4	.1	Form of Certificate of Common Stock (incorporated by reference to Exhibit 4.1 to the company’s Registration Statement on Form S-1 (File Number 33-33453) filed on February 9, 1990 and effective on April 24, 1990).
	4	.2	Indenture, dated as of July 10, 2003, by and between Orbital Sciences Corporation and U.S. Bank, National Association, as Trustee (incorporated by reference to Exhibit 4.1 to the company’s Current Report on Form 8-K filed on July 18, 2003).
	4	.3	Form of 9% Senior Note due 2011 (incorporated by reference to Exhibit 4.2 to the company’s Current Report on Form 8-K filed on July 18, 2003).
	4	.4	Warrant Agreement, dated as of August 22, 2002, by and between Orbital Sciences Corporation and U.S. Bank, N.A., as Warrant Agent (incorporated by reference to Exhibit 4.2 to the company’s Current Report on Form 8-K filed on August 27, 2002).
	4	.5	Form of Common Stock Purchase Warrant for Warrants Expiring August 15, 2006 (restricted) (incorporated by reference to Exhibit 4.4 to the company’s Current Report on Form 8-K filed on August 27, 2002).
	4	.6	Form of Common Stock Purchase Warrant for Warrants Expiring August 15, 2006 (registered) (incorporated by reference to Exhibit 4.4 to the company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2003).
	4	.7	Rights Agreement dated as of October 22, 1998, between Orbital Sciences Corporation and BankBoston N.A., as Rights Agent (incorporated by reference to Exhibit 1 to the company’s Report on Form 8-A filed on November 2, 1998).
	4	.8	Form of Rights Certificate (incorporated by reference to Exhibit 3 to the company’s Report on Form 8-A filed on November 2, 1998).
	10	.1	Amended and Restated Credit Agreement dated as of December 29, 2004, by and among Orbital Sciences Corporation, Bank of America, N.A., as administrative agent, Wachovia Bank, National Association, as documentation agent, and the other parties thereto (incorporated by reference to Exhibit 10.1 to the company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2004).

67

Exhibit
Number			Description of Exhibit
	10	.2	Amended and Restated Security Agreement dated as of December 29, 2004, by and between Orbital Sciences Corporation, Bank of America, N.A., as administrative agent (incorporated by reference to Exhibit 10.2 to the company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2004).
	10	.3	Lease Agreement by and between Boston Properties Limited Partnership and Orbital Sciences Corporation dated May 18, 1999 (incorporated by reference to Exhibit 10.4 to the company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2001).
	10	.4	Lease Agreement by and between Boston Properties Limited Partnership and Orbital Sciences Corporation dated April 5, 1999 (incorporated by reference to Exhibit 10.5 to the company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2001).
	10	.5	Lease Agreement by and between Boston Properties Limited Partnership and Orbital Sciences Corporation dated December 1, 1999 (incorporated by reference to Exhibit 10.6 to the company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2001).
	10	.6	Sale/Leaseback Agreement, dated September 29, 1989, by and among Corporate Property Associates 8, L.P., Corporate Property Associates 9, L.P. and Space Data Corporation (incorporated by reference to Exhibit 10.2 to the company’s Registration Statement on Form S-1 (File Number 33-33453) filed on February 9, 1990).
	10	.7	First Amendment to Sale/Leaseback Agreement, dated as of December 27, 1990, by and among Corporate Property Associates 8, L.P., Corporate Property Associates 9, L.P. and Space Data Corporation (incorporated by reference to Exhibit 10.2.1 to the company’s annual Report on Form 10-K for the year ended December 31, 1991).
	10	.8	Orbital Sciences Corporation 1990 Stock Option Plan, restated as of April 27, 1995 (incorporated by reference to Exhibit 10.5.1 to the company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 1995).*
	10	.9	Orbital Sciences Corporation 1990 Stock Option Plan for Non-Employee Directors, restated as of April 27, 1995 (incorporated by reference to Exhibit 10.5.2 to the company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 1995).*
	10	.10	Amended and Restated Orbital Sciences Corporation 1997 Stock Option and Incentive Plan (incorporated by reference to Exhibit 10.1 to the company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2005).
	10	.11	Orbital Sciences Corporation 2005 Stock Incentive Plan (incorporated by reference to Exhibit 10.1 to the company’s Current Report on Form 8-K filed on May 2, 2005).
	10	.12	Orbital Sciences Corporation 2003 Nonqualified Management Deferred Compensation Plan (incorporated by reference to Exhibit 10.12 to the company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2003).*
	10	.13	Executive Relocation Agreement between Orbital Sciences Corporation and Ronald J. Grabe, Executive Vice President and General Manager, Launch Systems Group dated August 7, 2003 (incorporated by reference to Exhibit 10.1 to the company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2003).*
	10	.14	First Amendment to Executive Relocation Agreement between Orbital Sciences Corporation and Ronald J. Grabe, Executive Vice President and General Manager, Launch Systems Group dated April 28, 2005 (incorporated by reference to Exhibit 10.4 to the company’s Current Report on Form 8-K filed on May 2, 2005).*
	10	.15	Executive Employment Agreement dated as of August 9, 2000, by and between Orbital Sciences Corporation and Garrett E. Pierce (incorporated by reference to Exhibit 10.3 to the company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2000).*

68

Exhibit
Number			Description of Exhibit
	10	.16	Executive Employment and Change of Control Agreement dated as of August 9, 2000, by and between Orbital Sciences Corporation and Garrett E. Pierce (incorporated by reference to Exhibit 10.4 to the company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2000).*
	10	.17	Supplemental Employment Agreement between Garrett E. Pierce and Orbital Sciences Corporation dated July 19, 2002 (incorporated by reference to Exhibit 10.1 to the company’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2002).*
	10	.18	Form of Director and Executive Officer Indemnification Agreement (incorporated by reference to Exhibit 10.23 to the company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1998).*
	10	.19	Form of Executive Employment Agreement (incorporated by reference to Exhibit 10.2 to the company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2003).*
	10	.20	Purchase Contract dated as of March 27, 2002, by and between Orbital Sciences Corporation and The Boeing Company (incorporated by reference to Exhibit 10.2 to the company’s Quarterly Report on Form 10-Q/A for the fiscal quarter ended March 31, 2003).**
	10	.21	Amendment, dated as of January 13, 2005, to Purchase Contract by and between Orbital Sciences Corporation and The Boeing Company (incorporated by reference to Exhibit 10.22 to the company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2004).
	10	.22	Amendment, dated as of January 18, 2006, to Purchase Contract by and between Orbital Sciences Corporation and The Boeing Company (transmitted herewith).
	10	.23	Form of Executive Nonstatutory Stock Option Agreement under the 1997 Stock Option and Incentive Plan (incorporated by reference to Exhibit 10.23 to the company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2004).*
	10	.24	Form of Non-Employee Director Nonstatutory Stock Option Agreement under the 1997 Stock Option and Incentive Plan (incorporated by reference to Exhibit 10.24 to the company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2004).*
	10	.25	Form of Director Restricted Stock Agreement (incorporated by reference to Exhibit 10.1 to the company’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2004).*
	10	.26	Form of Stock Unit Agreement under the 2005 Stock Incentive Plan (incorporated by reference to Exhibit 10.2 to the company’s Current Report on Form 8-K filed on May 2, 2005).*
	10	.27	Form of Stock Unit Agreement under the 1997 Stock Option and Incentive Plan (incorporated by reference to Exhibit 10.3 to the company’s Current Report on Form 8-K filed on May 2, 2005).*
	10	.28	Non-Employee Director Compensation Program (transmitted herewith).*
	12		Statement re Computation of Ratio of Earnings to Fixed Charges (transmitted herewith).
	23		Consent of PricewaterhouseCoopers LLP (transmitted herewith).
	31	.1	Certification of Chairman and Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Sec. 1350) (transmitted herewith).
	31	.2	Certification of Vice Chairman and Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Sec. 1350) (transmitted herewith).
	32	.1	Written Statement of Chairman and Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350) (transmitted herewith).

69

Exhibit
Number			Description of Exhibit
	32	.2	Written Statement of Vice Chairman and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350) (transmitted herewith).

*	Management Contract or Compensatory Plan or Arrangement.
**	Certain portions of this Exhibit were omitted by means of redacting a portion of the text in accordance with Rule 0-6 of the Securities Exchange Act of 1934, as amended.

70 EX-10.22 2 w16989exv10w22.htm EX-10.22

Exhibit 10.22

Amendment, dated as of January 18, 2006, to Purchase Contract by and between Orbital Sciences Corporation and The Boeing Company.

	PURCHASE CONTRACT	ACCEPTANCE REQUIRED:  þ
The Boeing Company Bldg. 222, Receiving Dock 3370 Miraloma Avenue Anaheim           CA 92806	SPECIAL CONTRACT INSTRUCTIONS ARE ATTACHED HERETO:

ORBITAL SCIENCES CORP		675784	PURCHASE CONTRACT NO:				PCC	STATUS			Page
3380 S PRICE ROAD			101018				89	AP			1 OF 75
CHANDLER	AZ 85248-3534			Release Date:	18-JAN-06
US				Original PC Date:	27-MAR-02				o	Subject to Tax
Attention:   Camille Cisek				Confirm Date:		12/19/01			þ	For Resale, Not Subject to Tax (Cert No. RA 948)

SHIP VIA:   Standard — See Attachment	FOB:   Destination	TERMS:   0% 0 NET 30
SHIP TO:    The Boeing Company 799A James Record Road		Huntsville           , AL 35824

ADDRESS ALL INQUIRIES TO BUYER:
Buyer Name:   Michael Hammett	Mail Stop GB40	Phone:   714-762-0714	Fax:   714-762-2431
	Email:   michael.a. hammett@boeing.com

The applicable “IDS Common Clauses” are listed below and incorporated as Attachments) into this contract with fixed text. In addition to The Boeing Company form “General Provisions” these clauses are set forth and may be accessed at:  

<http://www.boeing.com/company offices/doingbiz/idscommon/guide.htm>

At this URL choose “Common IDS Clauses ”. The clauses are grouped under the first alphabetic character contained in the Attachment Name.

The Attachment(s) that are incorporated into this contract with variable text will include the variable text portion of the clause in this RFQ/contract.

Unless indicated otherwise elsewhere in this contract, the version of each incorporated clause applicable to this contract is the latest dated version as of the original confirming date of this contract.

Additional applicable terms and conditions identified in the list are attached hereto. Terms and conditions applicable to specific line items are identified with the line item.

If you are unable to access the internet, please contact the procurement agent identified above.

ATTACHMENTS

Type	Name	Description
FREEFORM	PC CHANGES	Purchase Contract Change Summary
CLAUSES	A229	Incorporation by Reference
CLAUSES	A441	SPECIALTY METALS CLAUSE
CLAUSES	D401	Hazardous Material - Material Safety Data Sheets
CLAUSES	P306	Code of Conduct
CLAUSES-FX	H920	Representations and Certifications
DPAS	DPAS ORDER	Defense Priority Allocation System
FREEFORM	A120	Ship To:
FREEFORM	G194 (MODIFIED)	Price Adjustment for Downward Rate Change
FREEFORM	GSEGTM235	SOW for GSE for GTM-2, 3 & 5
FREEFORM	LDCSOW	SOW for LDC Threat Implementation
FREEFORM	MRTF13	Convert GDIL GTM to IFT Config with Special Instru

TOTAL PC VALUE	$652,947,155.00 NTE
CURRENT FUNDED VALUE	$602,055,783.00

GOVERNMENT PRIORITY RATINGS IDENTIFIED AT THE LINE ITEM LEVEL INDICATE THAT REQUIREMENTS WITHIN THIS ORDER ARE CERTIFIED FOR NATIONAL DEFENSE USE UNDER DMS REGULATION 1 , AND YOU ARE HEREBY REQUESTED TO SIGN AND RETURN ACKNOWLEDGEMENT WITHIN FIFTEEN WORKING DAYS FOR DO RATED REQUIREMENTS AND WITHIN TEN WORKING DAYS FOR DX RATED REQUIREMENTS.	ACCEPTANCE OF THE OFFER REPRESENTED BY THIS ORDER IS EXPRESSLY LIMITED TO THE PROVISIONS HERETO. SIGNING AND RETURNING THE ACKNOWLEDGMENT COPY OF THE ORDER (IF ATTACHED HERETO), OR, IN ANY EVENT, DELIVERY IN THE WHOLE OR IN PART OF THE ARTICLES TO BE FURNISHED HEREUNDER SHALL CONSTITUTE ACCEPTANCE OF THIS ORDER. THIS IS THE ENTIRE CONTRACT AND NO CHANGES OF ANY KIND WHATSOEVER ARE BINDING ON THE BUYER UNLESS THEY ARE ACCEPTED BY THE BUYER IN WRITING.
- ACCEPTANCE OF THIS PURCHASE ORDER IS HEREBY ACKNOWLEDGED -
SELLER   /s/ CAMILLE CISEK             DATE 25 JAN 06	BUYER   /s/ M. L. Hammett              DATE 1/18/06

PURCHASE CONTRACT     
CONTINUATION PURCHASE CONTRACT:  101018      REVISION:  89      Page    2 of 75

ADDITIONAL HEADER ATTACHMENT
FREEFORM	MRTF16	Perform MIL-STD-1540B Study
FREEFORM	MRTF8	Implement Special Instrumentation on all Flight Te
FREEFORM	PATH1	Pathfinder Phase 1
FREEFORM	PATH2	Pathfinder Phase 2
FREEFORM	PM&P/ PIND	SOW for PM&P Risk Assessment & PIND Tesing
FREEFORM	PTSOW	Pallet Test Statement of Work
FREEFORM	SOW 1901A	SOW for MIL-STD 1901A Trade Studies
FREEFORM	SOW SUPPORT	SOW Integration and Tesing Support
FREEFORM	SOW T2-1	Perform Shroud Thermal Separation Test
FREEFORM	SOW T2-5	OBV support for conversion of IFT14b to Hi-Fi GTM
FREEFORM	SOW T2-51	OBV Simulator Fidelity Upgrade (5 EISs)
FREEFORM	SOW T2-52	BIT/Abort Study and IFT-2 SW Upgrade
FREEFORM	SOW T2-54	OBV-3 MACH Upgrade for Dual FET Ignition Inhibit
FREEFORM	SOW T2-55	Field Site Motor Inspections
FREEFORM	SOWCR125	Statement of Work for Modification of the CR125
FREEFORM	SOWSURVIVESTUDY	SOW Interceptor Survivability Capability Enhanceme
FREEFORM	SUBCONTRACT SCHEDULE	Subcontract Schedule
FREEFORM	T3-12)	Simulation Upgrades
FREEFORM	T3-15)	Motor Static Fire
FREEFORM	T3-17)	GTM-3 needed for VAFB
FREEFORM	T3-18)	GTM-4 (inert motors) for GDIL
FREEFORM	T3-20)	GT-1 using GTM-5 from RTS
FREEFORM	T3-22)	GT-2 using GTM- 5
FREEFORM	T3-23)	FT-2 from VAFB
FREEFORM	T3-4)	Requirements, Test Planning and Procedures Mods
FREEFORM	T3-9)	OBV MIL-STD-1540 Delta Qualification (Initial)
FREEFORM	T4-28	OBV Support for GDIL Testing Using GTM-4
FREEFORM	T4-33	Ground Test Missile (GTM) -2 at FGA
FREEFORM	T4-34	NTE Backfill for Hardware Reassigned to GDIL
PROVSNS-FX	GP-4	Cost Reimbursement Contract General Provisions
QA NOTES	Q004	Boeing QA Mgt Sys BQMS Requirements Appendix A
QA NOTES	Q049	Government Source Inspection
QA NOTES	Q053	Boeing Source Inspection
QA NOTES	Q073	AS9102 Aerospace First Article Inspection Req
QA NOTES	Q094	Certification of Compliance
QA NOTES	Q122	Electrostatic Sensitive Discharge Protection Prog
QA NOTES	Q301	Unconfirmed Failure Rejections
SHIP   VIA:	HSV. SHIPPING INSTRUCTIONS	Boeing Huntsville Traffic Routing Guide
ZZZZ	END	End of Attachments

ITEM	QUANTITY		UM	PART NUMBER				PROJECT CCN
		VENDOR P/N			DESCRIPTION
		CUSTOMER / PRIME CONTRACT NUMBER				PRIORITY RATING	FUNDED UNIT PRICE		FUNDED EXTENDED PRICE
		TRUE MANUFACTURER

PURCHASE CONTRACT     
CONTINUATION PURCHASE CONTRACT:  101018      REVISION:  89      Page    3 of 75

ITEM	QUANTITY		UM	PART NUMBER				PROJECT CCN
		VENDOR P/N			DESCRIPTION
		CUSTOMER / PRIME CONTRACT NUMBER				PRIORITY RATING	FUNDED UNIT PRICE		FUNDED EXTENDED PRICE
		TRUE MANUFACTURER

0001 0 LT VHA**10**093

RAPID BV LAUNCH	ORBITAL SCIENCES
HQ0006-01-C-0001/HQ0006-01-C-0001 SOW:  Rapid BV Lau    SOW Rev:  12/17/20	DX-C9	$	0.0000	$	0.0000
Item Note:   This line item value is reduced to $0 and all costs associated with this line is transferred to Purchase Contract 101954. QA  Requirements do not apply to this line item.
Item Reference:  Transferred to PO 101954
Item Unit Value:   $0.000		Value Code:   H
Period of Performance:  12/18/2001 thru  03/31/2003
Ship This Item Only To:  See Attachment A120

Quantity Ordered   0 Scheduled Delivery Date   30-APR-02 Original Delivery Date   29-MAR-07

0002 1 LT VHA**10**093

FLIGHT TEST	ORBITAL SCIENCES
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	364,819,841.0000	$	364,819,841.0000
Item Note:  “Q” clauses are not applicable to this Line Item.
Item Reference:  Cost Collection
Item Unit Value:  $412,873,876.0000		Value Code:   A
Period of Performance:  12/18/2001 thru 03/31/2007
Ship This Item Only To:  See Attachment A120

FREEFORM
FREEFORM
FREEFORM
FREEFORM
FREEFORM
MAB SOW Rev 00
SOW — DVT Rev 00
SOW — MULTIPLE ITEMS Rev 00
SOW — REDESIGN YOLK Rev 00
SOW — SOLAR Rev 00

Quantity Ordered   1 Scheduled Delivery Date   30-MAR-07

PURCHASE CONTRACT     
CONTINUATION PURCHASE CONTRACT:   101018      REVISION:   89      Page    4 of 75

ITEM	QUANTITY		UM	PART NUMBER				PROJECT CCN
		VENDOR P/N			DESCRIPTION
		CUSTOMER / PRIME CONTRACT NUMBER				PRIORITY RATING	FUNDED UNIT PRICE		FUNDED EXTENDED PRICE
		TRUE MANUFACTURER

0003 1 LT VHA**E0**088

	BOOST VEHICLES FOR TEST BED
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	85,163,481.0000	$	85,163,481.0000
Item Note:   “Q” clauses are not applicable to this Line Item.
Item Reference:  Cost Collection
Item Unit Value:   $105,354,904.0000		Value Code:   A
Period of Performance:  02/08/2002 thru  /10/31/2005
Ship This Item Only To:  See Attachment A120

Quantity Ordered   1 Scheduled Delivery Date   31-OCT-05

0004 1 LT VHAPPHO**013

	OSC CE PROPOSAL PREPARATION
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
Item Note:  “Q” clauses are not applicable to this Line Item.
Item Reference:  Cost Collection
Item Unit Value:  $247,132.0000		Value Code:  A
Period of Performance:  02/04/2003 thru 03/31/2004
Ship This Item Only To:  See Attachment A120

Quantity Ordered   1 Scheduled Delivery Date   31-MAR-04

PURCHASE CONTRACT     
CONTINUATION PURCHASE CONTRACT:  101018      REVISION:  89      Page    5 of 75

ITEM	QUANTITY		UM	PART NUMBER				PROJECT CCN
		VENDOR P/N			DESCRIPTION
		CUSTOMER / PRIME CONTRACT NUMBER				PRIORITY RATING	FUNDED UNIT PRICE		FUNDED EXTENDED PRICE
		TRUE MANUFACTURER

0005 1 EA  1034-3000-001(TS) VHA**10**364

	BAM RECEIPT & TEST
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
Item Note:   BAM for BV — 6
Project CC shown above , VHA**10**364, is disregarded and Project CC VHA**10**093 is used in lieu thereof.
Item Reference:  Definitized price included in Line Item 0002
Item Unit Value:  $0.0000		Value Code:  F

Quantity Ordered   1 Scheduled Delivery Date   11-JUN-03

0006 2 EA   1034-9050-001 VHA**10**093

	WIC
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
Item Note:  QA requirements do not apply to this line item.
Item Reference:  Definitized price included in Line Item 0002
Item Unit Value:  $0.0000		Value Code:  F

Quantity Ordered   1
1 Scheduled Delivery Date   21-JUL-03
04-AUG-03

PURCHASE CONTRACT     
CONTINUATION PURCHASE CONTRACT:  101018 REVISION:  89      Page    6 of 75

ITEM	QUANTITY		UM	PART NUMBER				PROJECT CCN
		VENDOR P/N			DESCRIPTION
		CUSTOMER / PRIME CONTRACT NUMBER				PRIORITY RATING	FUNDED UNIT PRICE		FUNDED EXTENDED PRICE
		TRUE MANUFACTURER

0007 2 EA 1034-9050-001 VHA**10**093

	WIC
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
Item Note:   These WIC’s are scheduled to be delivered to VAFB by Boeing. QA requirements do not apply to this line item.
Item Reference:   Definitized price included in Line Item 0002
Item Unit Value:  $0.0000		Value Code:  F
Required Serial Numbers:  T003, T004

Quantity Ordered	Scheduled Delivery Date
2	04 -AUG- 03

0008 2 EA 1034-9050-001 VHA**10**093

	WIC
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
Item Note:   “ These two WIC’s are schedule to be delivered to RTS by Boeing. QA requirements do not apply to this line item.
Item Reference:   Definitized price included in Line Item 0002
Item Unit Value:  $0.0000		Value Code:  F
Required Serial  Numbers:  T005, T006

Quantity Ordered	Scheduled Delivery Date
2	04 -AUG- 03

PURCHASE CONTRACT     
CONTINUATION PURCHASE CONTRACT:  101018      REVISION:  89      Page    7 of 75

ITEM	QUANTITY		UM	PART NUMBER				PROJECT CCN
		VENDOR P/N			DESCRIPTION
		CUSTOMER / PRIME CONTRACT NUMBER				PRIORITY RATING	FUNDED UNIT PRICE		FUNDED EXTENDED PRICE
		TRUE MANUFACTURER

0009 1 EA 1034-3100-001 VHA**10**093

		BOOSTER AVIONICS MODULE (OSC)
HQ0006-01-C-0001/HQ0006-01-C-0001 675784		DX-C9		$	0.0000	$	0.0000
Dwg:  1034-3100-001	Dwg. Rev:  Rev A	P/L:  HAL # 24	P/L Rev:
SOW:  D743-16366-1			SOW Rev:  Rev B
Item Note:  BAM for IFT-13b
Item Reference:  Definitized price included in Line Item 0002
Item Unit Value:  $0.0000				Value Code:  F
Required Serial Numbers:  A001

Quantity Ordered	Scheduled Delivery Date
1	13 -AUG- 03

0010 4 EA 1034-9700-001 VHA**10**093

	ELECTRONIC INTERFACE SIMULATOR
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
Item Reference:  Definitized price included in Line Item 0002
Item Unit Value:  $0.0000		Value Code:  F

Quantity Ordered	Scheduled Delivery Date
1	13 -AUG- 03
1	14 -AUG- 03
1	15 -AUG- 03
1	01 -JUN- 04

0011 1 EA 900-100114-001 VHA**10**093

	OSC/OBV PIL EMULATOR - TACTICAL
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
Item Reference:  Definitized price included in Line Item 0002
Item Unit Value:  $0.0000		Value Code:  F

Quantity Ordered	Scheduled Delivery Date
1	13 -AUG- 03

PURCHASE CONTRACT     
CONTINUATION PURCHASE CONTRACT:  101018      REVISION:  89      Page    8 of 75

ITEM	QUANTITY		UM	PART NUMBER				PROJECT CCN
		VENDOR P/N			DESCRIPTION
		CUSTOMER / PRIME CONTRACT NUMBER				PRIORITY RATING	FUNDED UNIT PRICE		FUNDED EXTENDED PRICE
		TRUE MANUFACTURER

0012 2 EA 900-100114-002 VHA**10**093

	OSC/OBV PIL EMULATOR - TACTICAL
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
Item Reference:   Definitized price included in Line Item 0002
Item Unit Value:  $0.0000		Value Code:  F

Quantity Ordered	Scheduled Delivery Date
1	13 -AUG- 03
1	14 -AUG- 03

0013 1 LT VHAP1H03*040

	CE LONG LEAD FOR ACCELERATED SCHEDULE
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
Item Note:   This line item value is reduced to $0 and all costs associated with this line are transferred to Line Item 0078 for definitization of CE.“Q”:  Clauses are not applicable to this Line Item.
Item Unit Value:  $0.0000		Value Code:  E
Period of Performance:  09/08/2003 thru 05/28/2004
Ship This Item Only To:  See Attachment A120

Quantity Ordered	Scheduled Delivery Date
1	28 -MAY- 04

PURCHASE CONTRACT     
CONTINUATION PURCHASE CONTRACT:  101018      REVISION:  89      Page    9 of 75

ITEM	QUANTITY		UM	PART NUMBER				PROJECT CCN
		VENDOR P/N			DESCRIPTION
		CUSTOMER / PRIME CONTRACT NUMBER				PRIORITY RATING	FUNDED UNIT PRICE		FUNDED EXTENDED PRICE
		TRUE MANUFACTURER

0014 1 EA 1034-0050-001 VHA**10**093

	IFT-13B BOOSTER STACK
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
Item Note:  Booster Stack for IFT-13b
Item Reference:  Definitized price included in Line Item 0002
Item Unit Value:  $0.0000		Value Code:  F
Ship This Item Only To:  See Attachment A120

Quantity Ordered	Scheduled Delivery Date
1	21 -NOV- 03

0015 1 EA 1034-3100-002 VHA**11**722

	OSC BAM
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
Item Note:  BAM for IFT-13c
Project CC shown above, VHA**11**722, is disregarded and Project CC VHA**10**093 is used in lieu thereof.
Item Reference:  Definitized price included in Line Item 0002
Item Unit Value:  $0.0000		Value Code:  F

Quantity Ordered	Scheduled Delivery Date
1	21 -NOV- 03

PURCHASE CONTRACT     
CONTINUATION PURCHASE CONTRACT:  101018      REVISION:  89      Page    10 of 75

ITEM	QUANTITY		UM	PART NUMBER				PROJECT CCN
		VENDOR P/N			DESCRIPTION
		CUSTOMER / PRIME CONTRACT NUMBER				PRIORITY RATING	FUNDED UNIT PRICE		FUNDED EXTENDED PRICE
		TRUE MANUFACTURER

0016 1 EA 1034-0100-001 VHA**10**093

		OSC BOOSTER STACK
HQ0006-01-C-0001/HQ0006-01-C-0001 675784		DX-C9		$	0.0000	$	0.0000
Dwg:  1034-0100	Dwg. Rev:   -1	P/L:	P/L Rev:
Item Note:  IFT-13c Booster
Item Reference:  Definitized price included in Line Item 0002
Item Unit Value:  $0.000				Value Code:  F
Ship This Item Only To:  See Attachment A120

Quantity Ordered	Scheduled Delivery Date
1	12 -JAN- 04

0017 1 LT VHA**10**093

	MECHANICAL PATHFINDER
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
Item Note:  Booster Stack for Mechanical Pathfinder
Item Reference:   Definitized price included in Line Item 0002
Item Unit Value:  $0.0000		Value Code:  F
Ship This Item Only To:  See Attachment A120

Quantity Ordered	Scheduled Delivery Date
1	09 -JAN- 04

PURCHASE CONTRACT     
CONTINUATION PURCHASE CONTRACT:  101018      REVISION:  89      Page    11 of 75

ITEM	QUANTITY		UM	PART NUMBER				PROJECT CCN
		VENDOR P/N			DESCRIPTION
		CUSTOMER / PRIME CONTRACT NUMBER				PRIORITY RATING	FUNDED UNIT PRICE		FUNDED EXTENDED PRICE
		TRUE MANUFACTURER

0018 1 EA VH2**CO**064

9600-4077-003	OSC FLIGHT DATA PROCESSOR
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	89,979.0000	$	89,979.0000
Item Note:  Costs shall be collected and reported separately under CLIN 0107. A Financial Report, Format 6, shall be submitted the
month following delivery of the unit.
Item Unit Value:  $89,979.0000		Value Code:  H

PROPERTY PROPERTY ACCOUNTABILITY - GMD Rev 02/02

Quantity Ordered   1 Scheduled Delivery Date   01-JULY-04

0019 2                   EA   1034-3100-003 VHA**10**093

	BAM
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
Item Note:  IFT-14 and IFT-15 Booster Avionics Module
Item Reference:  Definitized price included in item 0002
Item Unit Value:  $0.0000		Value Code:  F

Quantity Ordered   1
1 Scheduled Delivery Date   30-JAN-04
30-JUN-04

PURCHASE CONTRACT     
CONTINUATION PURCHASE CONTRACT:  101018      REVISION:  89      Page    12 of 75

ITEM	QUANTITY		UM	PART NUMBER				PROJECT CCN
		VENDOR P/N			DESCRIPTION
		CUSTOMER / PRIME CONTRACT NUMBER				PRIORITY RATING	FUNDED UNIT PRICE		FUNDED EXTENDED PRICE
		TRUE MANUFACTURER

0020 2                   EA   1034-0100-002 VHA**10**093

	BOOSTER STACK
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
Item Note:  IFT-14 and IFT-15 Booster Stack
Item Reference:  Definitized price included in Line Item 0002
Item Unit Value:  $0.0000		Value Code:  F
Ship This Item Only To:  See Attachment A120

Quantity Ordered   1
1 Scheduled Delivery Date   27-FEB-04
30-JUL-04

0021 2                   EA   1034-0086-001 VHA**10**093

	ORDNANCE CLOSEOUT INSTALLATION
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
Item Note:  IFT-14 and IFT-15
Item Reference:   Definitized price included in Line Item 0002
Item Unit Value:  $0.0000		Value Code:  F
Ship This Item Only To:  See Attachment A120

Quantity Ordered   1
1 Scheduled Delivery Date   27-FEB-04
30-JUL-04

PURCHASE CONTRACT     
CONTINUATION PURCHASE CONTRACT:  101018      REVISION:  89      Page    13 of 75

ITEM	QUANTITY		UM	PART NUMBER				PROJECT CCN
		VENDOR P/N			DESCRIPTION
		CUSTOMER / PRIME CONTRACT NUMBER				PRIORITY RATING	FUNDED UNIT PRICE		FUNDED EXTENDED PRICE
		TRUE MANUFACTURER

0022 2                   EA   1034-0084-003 VHA**10**093

	SHROUD INSTALLATION
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
Item Note:  IFT-14 and IFT-15
Item Reference:  Definitized price included in Line Item 0002
Item Unit Value:  $0.0000		Value Code:  F
Ship This Item Only To:  See Attachment A120

Quantity Ordered   1
1 Scheduled Delivery Date   27-FEB-04
30-JUL-04

0023 2                   EA   1034-0082-003 VHA**10**093

	PAM ASSEMBLY INSTALLATION
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
Item Note:  IFT-14 and IFT-15.
Item Reference:  Definitized price included in Line Item 0002
Item Unit Value:  $0.0000		Value Code:  F
Ship This Item Only To:  See Attachment A120

Quantity Ordered   1
1 Scheduled Delivery Date   27-FEB-04
30-JUL-04

PURCHASE CONTRACT     
CONTINUATION PURCHASE CONTRACT:  101018      REVISION:  89      Page    14 of 75

ITEM	QUANTITY		UM	PART NUMBER				PROJECT CCN
		VENDOR P/N			DESCRIPTION
		CUSTOMER / PRIME CONTRACT NUMBER				PRIORITY RATING	FUNDED UNIT PRICE		FUNDED EXTENDED PRICE
		TRUE MANUFACTURER

0024 2                   EA   1034-0037-002 VHA**10**093

	TPS CLOSEOUT INSTALLATION
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
Item Note:  IFT-14 and IFT-15.
Item Reference:  Definitized price included in Line Item 0002
Item Unit Value:   $0.0000		Value Code:  F
Ship This Item Only To:  See Attachment A120

Quantity Ordered   1
1 Scheduled Delivery Date   27-FEB-04
30-JUL-04

0025 2                   EA   1034-0038-004 VHA**10**093

	EMPLACEMENT COMPONENTS INSTALLATION
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
Item Note:  IFT-14 and IFT-15
Item Reference:  Definitized price included in Line Item 0002
Item Unit Value:  $0.0000		Value Code:  F
Ship This Item Only To:  See Attachment A120

Quantity Ordered   1
1 Scheduled Delivery Date   27-FEB-04
30-JUL-04

PURCHASE CONTRACT     
CONTINUATION PURCHASE CONTRACT:  101018      REVISION:  89      Page    15 of 75

ITEM	QUANTITY		UM	PART NUMBER				PROJECT CCN
		VENDOR P/N			DESCRIPTION
		CUSTOMER / PRIME CONTRACT NUMBER				PRIORITY RATING	FUNDED UNIT PRICE		FUNDED EXTENDED PRICE
		TRUE MANUFACTURER

0026 3                   EA VHA**10**093

	DGT TESTING
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
Item Note:  “Non-Receivable” item, test support only. Supports IFT-13b, IFT-13c, and IFT-14.
Item Reference:  Definitized price included in Line Item 0002
Item Unit Value:  $0.0000		Value Code:  F
Ship This Item Only To:  See Attachment A120

Quantity Ordered   1
1
1 Scheduled Delivery Date   29-SEP-03
27-FEB-04
30-APR-04

0027 1                   LT VHA**10**093

	OSC SOLAR PARTS TESTING FOR GMD
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
Item Note:  This item is issued pursuant to the “Changes” Clause.
Item Reference:  Definitized price included in Line Item 0002.
Item Unit Value:  $0.0000		Value Code:  F
Period of Performance:  4/22/2004 through 8/31/2004
Ship This Item Only To:  See Attachment A120

Quantity Ordered   1 Scheduled Delivery Date   31-AUG-04

PURCHASE CONTRACT     
CONTINUATION PURCHASE CONTRACT:  101018      REVISION:  89      Page    16 of 75

ITEM	QUANTITY		UM	PART NUMBER				PROJECT CCN
		VENDOR P/N			DESCRIPTION
		CUSTOMER / PRIME CONTRACT NUMBER				PRIORITY RATING	FUNDED UNIT PRICE		FUNDED EXTENDED PRICE
		TRUE MANUFACTURER

0028 1 EA   SK3625 VHA**10**093

	BAM MECHANICAL PATHFINDER
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9		$     0.0000	$	0.0000
Item Reference:  Definitized price included in Line Item 0002
Item Unit Value:  $0.0000		Value Code:  F

Quantity Ordered   1 Scheduled Delivery Date   17-DEC-02

0029 1 EA VHA**10**093

	BOOSTER STACK PATHFINDER
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
Item Reference:  Definitized price included in Line Item 0002
Item Unit Value:   $0.0000		Value Code:  F
Ship This Item Only To:  See Attachment A120

Quantity Ordered   1 Scheduled Delivery Date   13-NOV-02

0030 1 EA   SK1034-0726-X1 VHA**10**093

	GTM BOOSTER STACK
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
Item Reference:  Definitized price included in Line Item 0002
Item Unit Value:   $0.0000		Value Code:  F
Ship This Item Only To:  See Attachment A120

Quantity Ordered   1 Scheduled Delivery Date   21-APR-04

PURCHASE CONTRACT     
CONTINUATION PURCHASE CONTRACT:  101018      REVISION:  89      Page    17 of 75

ITEM	QUANTITY		UM	PART NUMBER				PROJECT CCN
		VENDOR P/N			DESCRIPTION
		CUSTOMER / PRIME CONTRACT NUMBER				PRIORITY RATING	FUNDED UNIT PRICE		FUNDED EXTENDED PRICE
		TRUE MANUFACTURER

0031 1 EA   SK1034-3700-001 VHA**10**093

	GTU BAM
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
Item Reference:  Definitized price included in Line Item 0002
Item Unit Value:   $0.0000		Value Code:  F

Quantity Ordered   1 Scheduled Delivery Date   16-APR-04

0032 3 EA VHA**10**093

	BAM EMULATOR UPGRADE
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
Item Reference:  Definitized price included in Line Item 0002
Item Unit Value:   $0.0000		Value Code:  F

Quantity Ordered   1
1
1 Scheduled Delivery Date   30-SEP-04
29-OCT-04
30-NOV-04

0033 3 EA VHA**10**093

	BOOSTER STACK EMULATOR UPGRADE
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
Item Reference:  Definitized price included in Line Item 0002
Item Unit Value:  $0.0000		Value Code:  F

Quantity Ordered   1
1
1 Scheduled Delivery Date   30-SEP-04
29-OCT-04
30-NOV-04

PURCHASE CONTRACT     
CONTINUATION PURCHASE CONTRACT:  101018      REVISION:  89      Page    18 of 75

ITEM	QUANTITY		UM	PART NUMBER				PROJECT CCN
		VENDOR P/N			DESCRIPTION
		CUSTOMER / PRIME CONTRACT NUMBER				PRIORITY RATING	FUNDED UNIT PRICE		FUNDED EXTENDED PRICE
		TRUE MANUFACTURER

0034 5 EA   1034-9681 VHA**10**093

	CARRIAGE ADAPTER
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
Item Note:  S/N’s 0001, 0002, 0003, 0004, 0005
Item Reference:  Definitized price included in Line Item 0002
Item Unit Value:  $0.0000		Value Code:  F

Quantity Ordered   1
1
1
1
1 Scheduled Delivery Date   21-NOV-03
28-JAN-04
09-FEB-04
21-APR-04
15-JUN-04

0035 20 EA   1034-9690 VHA**10**093

	RACEWAY BRIDGE
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
Item Note:  Used in sets of four. 5 sets of 4. 20 each total.                      S//N’s 8, 12, 13, 19; 1, 3, 5, 9; 2, 4, 15, 7; 6, 10, 11, 15; 7, 16, 18, 20
Item Reference:  Definitized price included in Line Item 0002
Item Unit Value:  $0.0000		Value Code:  F

Quantity Ordered   20 Scheduled Delivery Date   14-OCT-05

PURCHASE CONTRACT     
CONTINUATION PURCHASE CONTRACT:  101018      REVISION:  89      Page    19 of 75

ITEM	QUANTITY		UM	PART NUMBER				PROJECT CCN
		VENDOR P/N			DESCRIPTION
		CUSTOMER / PRIME CONTRACT NUMBER				PRIORITY RATING	FUNDED UNIT PRICE		FUNDED EXTENDED PRICE
		TRUE MANUFACTURER

0036 5 EA 1034-9600 VHA**10**093

	VERTICAL LIFT SLING
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
Item Note:   S/N’s  001, 002, 003, 004, 005
Item Reference:  Definitized price included in Line Item 0002
Item Unit Value:  $0.0000		Value Code:  F

Quantity Ordered   2
1
2 Scheduled Delivery Date   13-NOV-02
16-APR-04
17-SEP-04

0037 1 EA 1034-9631 VHA**10**093

	VERTICAL LIFT BEAM
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
Item Reference:  Definitized price included in Line Item 0002
Item Unit Value:  $0.0000		Value Code:  F

Quantity Ordered   1 Scheduled Delivery Date   13-NOV-02

0038 3 EA VHA**10**093

	UMBILICAL TEST KIT
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
Item Reference:  Definitized price included in Line Item 0002
Item Unit Value:  $0.0000		Value Code:  F

Quantity Ordered   1
1
1 Scheduled Delivery Date   15-JAN-03
24-FEB-03
03-MAR-03

PURCHASE CONTRACT     
CONTINUATION PURCHASE CONTRACT:  101018      REVISION:  89      Page    20 of 75

ITEM	QUANTITY		UM	PART NUMBER				PROJECT CCN
		VENDOR P/N			DESCRIPTION
		CUSTOMER / PRIME CONTRACT NUMBER				PRIORITY RATING	FUNDED UNIT PRICE		FUNDED EXTENDED PRICE
		TRUE MANUFACTURER

0039 1 EA VHA**10**093

	CHOCKS
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
Item Note:  of five
Item Reference:  Definitized price included in Line Item 0002
Item Unit Value:  $0.0000		Value Code:  F

Quantity Ordered   1 Scheduled Delivery Date   10-MAY-04

0040 1 EA   70004325-520 VHA**10**093

	TRIPLE FILL BOX, LIM
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
Item Note:  Includes cables, part number 1034-3339-001
Item Reference:  Definitized price included in Line Item 0002
Item Unit Value:  $0.0000		Value Code:  F

Quantity Ordered   1 Scheduled Delivery Date   07-JUN-04

0041 1 EA   1034-0001-001 VHA**10**093

	OSC BV6 BOOSTER STACK
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
Item Reference:  Definitized price included in Line Item 0002
Item Unit Value:  $0.0000		Value Code:  F
Ship This Item Only To:  See Attachment A120

Quantity Ordered   1 Scheduled Delivery Date   03-JUL-03

PURCHASE CONTRACT     
CONTINUATION PURCHASE CONTRACT:  101018 REVISION:  89 Page    21 of 75

ITEM	QUANTITY		UM	PART NUMBER				PROJECT CCN
		VENDOR P/N			DESCRIPTION
		CUSTOMER / PRIME CONTRACT NUMBER				PRIORITY RATING	FUNDED UNIT PRICE		FUNDED EXTENDED PRICE
		TRUE MANUFACTURER

0042 1 EA 1034-0036-001 VHA**10**093

	ORDNANCE CLOSEOUT KIT
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
Item Note:  Kit for BV-6
Item Reference:  Definitized price included in Line Item 0002
Item Unit Value:  $0.0000		Value Code:  F
Ship This Item Only To:  See Attachment A120

Quantity Ordered   1 Scheduled Delivery Date   03-JUL-03

0043 1 EA 1034-0034-001 VHA**10**093

	SHROUD INSTALLATION KIT
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
Item Note:  Kit for BV-6
Item Reference:  Definitized price included in Line Item 0002
Item Unit Value:  $0.0000		Value Code:  F
Ship This Item Only To:  See Attachment A120

Quantity Ordered   1 Scheduled Delivery Date   03-JUL-03

PURCHASE CONTRACT     
CONTINUATION PURCHASE CONTRACT:  101018 REVISION:  89 Page    22 of 75

ITEM	QUANTITY		UM	PART NUMBER				PROJECT CCN
		VENDOR P/N			DESCRIPTION
		CUSTOMER / PRIME CONTRACT NUMBER				PRIORITY RATING	FUNDED UNIT PRICE		FUNDED EXTENDED PRICE
		TRUE MANUFACTURER

0044 1 EA 1034-0032-001 VHA**10**093

	PAM ASSEMBLY KIT
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
Item Note:  Kit for BV-6
Item Reference:  Definitized price included in Line Item 0002
Item Unit Value:  $0.0000		Value Code:  F
Ship This Item Only To:  See Attachment A120

Quantity Ordered   1 Scheduled Delivery Date   03-JUL-03

0045 1 EA 1034-0037-001 VHA**10**093

	TPS CLOSEOUT KIT
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
Item Note:  Kit for BV-6
Item Reference:  Definitized price included in Line Item 0002
Item Unit Value:  $0.0000		Value Code:  F
Ship This Item Only To:  See Attachment A120

Quantity Ordered   1 Scheduled Delivery Date   03-JUL-03

PURCHASE CONTRACT     
CONTINUATION PURCHASE CONTRACT:  101018      REVISION:  89      Page    23 of 75

ITEM	QUANTITY		UM	PART NUMBER				PROJECT CCN
		VENDOR P/N			DESCRIPTION
		CUSTOMER / PRIME CONTRACT NUMBER				PRIORITY RATING	FUNDED UNIT PRICE		FUNDED EXTENDED PRICE
		TRUE MANUFACTURER

0046 2 EA 1034-0038-001 VHA**10**093

	EMPLACEMENT COMPONENT KIT
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
Item Note:  Kits for BV-6 and IFT-13b
Item Reference:  Definitized price included in Line Item 0002
Item Unit Value:  $0.0000		Value Code:  F
Ship This Item Only To:  See Attachment A120

Quantity Ordered   1
1 Scheduled Delivery Date   03-JUL-03
21-NOV-03

0047 2 EA 1034-0086-001 VHA**10**093

	ORDNANCE CLOSEOUT INSTALLATION
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
Item Note:  Kit for IFT-13b and IFT-13c
Item Reference:  Definitized price included in Line Item 0002
Item Unit Value:  $0.0000		Value Code:  F
Ship This Item Only To:  See Attachment A120

Quantity Ordered   1
1 Scheduled Delivery Date   21-NOV-03
28-JAN-04

PURCHASE CONTRACT     
CONTINUATION PURCHASE CONTRACT:  101018 REVISION:  89 Page    24 of 75

ITEM	QUANTITY		UM	PART NUMBER				PROJECT CCN
		VENDOR P/N			DESCRIPTION
		CUSTOMER / PRIME CONTRACT NUMBER				PRIORITY RATING	FUNDED UNIT PRICE		FUNDED EXTENDED PRICE
		TRUE MANUFACTURER

0048 1 EA 1034-0084-001 VHA**10**093

	SHROUD INSTALLATION KIT
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
Item Note:  Kit for IFT-13b
Item Reference:  Definitized price included in Line Item 0002
Item Unit Value:  $0.0000		Value Code:  F
Ship This Item Only To:  See Attachment A120

Quantity Ordered   1 Scheduled Delivery Date   21-NOV-03

0049 1 EA 1034-0082-001 VHA**10**093

	PAM INSTALLATION KIT
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
Item Note:  Kit for IFT-13b
Item Reference:  Definitized price included in Line Item 0002
Item Unit Value:  $0.0000		Value Code:   F
Ship This Item Only To:  See Attachment A120

Quantity Ordered   1 Scheduled Delivery Date   21-NOV-03

PURCHASE CONTRACT     
CONTINUATION PURCHASE CONTRACT:  101018      REVISION:  89      Page    25 of 75

ITEM	QUANTITY		UM	PART NUMBER				PROJECT CCN
		VENDOR P/N			DESCRIPTION
		CUSTOMER / PRIME CONTRACT NUMBER				PRIORITY RATING	FUNDED UNIT PRICE		FUNDED EXTENDED PRICE
		TRUE MANUFACTURER

0050 1 EA 1034-0037-001 VHA**10**093

	TPS CLOSEOUT KIT
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
Item Note:  Kit for IFT-13b
Item Reference:  Definitized price included in Line Item 0002
Item Unit Value:  $0.0000		Value Code:  F
Ship This Item Only To:  See Attachment A120

Quantity Ordered   1 Scheduled Delivery Date   21-NOV-03

0051 1 EA 1034-0084-002 VHA**10**093

	SHROUD INSTALLATION
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
Item Note:  Kit for IFT-13c
Item Reference:  Definitized price included in Line Item 0002
Item Unit Value:  $0.0000		Value Code:  F
Ship This Item Only To:  See Attachment A120

Quantity Ordered   1 Scheduled Delivery Date   28-JAN-03

PURCHASE CONTRACT     
CONTINUATION PURCHASE CONTRACT:  101018      REVISION:  89      Page    26 of 75

ITEM	QUANTITY		UM	PART NUMBER				PROJECT CCN
		VENDOR P/N			DESCRIPTION
		CUSTOMER / PRIME CONTRACT NUMBER				PRIORITY RATING	FUNDED UNIT PRICE		FUNDED EXTENDED PRICE
		TRUE MANUFACTURER

0052      1 EA     1034-0082-002 VHA**10**093

PAM ASSEMBLY INSTALLATION

HQ0006-01-C-0001/HQ0006-01-C-0001	DX-C9	$0.0000	$0.0000
675784
Item Note:  Kit for IFT-13c
Item Reference:  Definitized price included in Line Item 0002
Item Unit Value:  $0.0000                                         Value Code:  F
Ship This Item Only To:  See Attachment A120

Quantity Ordered	Scheduled Delivery Date
1	28-JAN-04

0053      1 EA      1034-0037-002 VHA**10**093

TPS CLOSEOUT INSTALLATION

HQ0006-01-C-0001/HQ0006-01-C-0001	DX-C9	$0.0000	$0.0000
675784
Item Note:  Kit for IFT-13c
Item Reference:  Definitized price included in Line Item 0002
Item Unit Value:  $0.0000                                         Value Code:  F
Ship This item Only To:  See Attachment A120

Quantity Ordered	Scheduled Delivery Date
1	28-JAN-04

PURCHASE CONTRACT     
CONTINUATION PURCHASE CONTRACT:  101018      REVISION:  89      Page    27 of 75

ITEM	QUANTITY		UM	PART NUMBER				PROJECT CCN
		VENDOR P/N			DESCRIPTION
		CUSTOMER / PRIME CONTRACT NUMBER				PRIORITY RATING	FUNDED UNIT PRICE		FUNDED EXTENDED PRICE
		TRUE MANUFACTURER

0054      1 EA      1034-0038-003 VHA**10**093

EMPLACEMENT COMPONENTS INSTALLATION

HQ0006-01-C-0001/HQ0006-01-C-0001	DX-C9	$0.0000	$0.0000
675784
Item Note:  Kit for IFT-13c
Item Reference:  Definitized price included in Line Item 0002
Item Unit Value:  $0.0000                                         Value Code:  F
Ship This Item Only To:  See Attachment A120

Quantity Ordered	Scheduled Delivery Date
1	28-JAN-04

0055      2 EA       1034-3600-001 VHA**10**093

AVIONICS ASSEMBLY

HQ0006-01-C-0001/HQ0006-01-C-0001	DX-C9	$0.0000	$0.0000
675784
Item Note:  BAM for IDC-19 and IDC-20
Item Reference:  Definitized price included in Line Item 0002
Item Unit Value:  $0.0000                                         Value Code :  F

Quantity Ordered	Scheduled Delivery Date
1	15-SEP-05
1	14-OCT-05

PURCHASE CONTRACT     
CONTINUATION PURCHASE CONTRACT:  101018      REVISION:  89      Page    28 of 75

ITEM	QUANTITY		UM	PART NUMBER				PROJECT CCN
		VENDOR P/N			DESCRIPTION
		CUSTOMER / PRIME CONTRACT NUMBER				PRIORITY RATING	FUNDED UNIT PRICE		FUNDED EXTENDED PRICE
		TRUE MANUFACTURER

0056      2 EA      1034-0600-001 VHA**10**093

OBV-VEHICLE ASSEMBLY

HQ0006-01-C-0001/HQ0006-01-C-0001	DX-C9	$0.0000	$0.0000
675784
Item Note:  Booster Stack for IDC-19 and IDC-20
Item Reference:  Definitized price included in Line Item 0002
Item Unit Value:  $0.0000                                          Value Code :  F
Ship This Item Only To:  See Attachment A120

Quantity Ordered	Scheduled Delivery Date	Original Delivery Date
1	14-FEB-06	14-OCT-05
1	14-MAR-06	14-NOV-05

0057      2 EA      1034-0636-001 VHA**10**093

ORDNANCE CLOSEOUT INSTALLATION KIT

HQ0006-01-C-0001/HQ0006-01-C-0001	DX-C9	$0.0000	$0.0000
675784
Item Note:  Kit for IDC-19 and IDC-20
Item Reference:  Definitized price included in Line Item 0002
Item Unit Value:  $0.0000                                         Value Code :  F
Ship This Item Only To:  See Attachment A120

Quantity Ordered	Scheduled Delivery Date	Original Delivery Date
1	14-MAR -06	14-OCT-05
1	14-FEB-06	14-NOV-05

PURCHASE CONTRACT     
CONTINUATION PURCHASE CONTRACT:  101018      REVISION:  89      Page    29 of 75

ITEM	QUANTITY		UM	PART NUMBER				PROJECT CCN
		VENDOR P/N			DESCRIPTION
		CUSTOMER / PRIME CONTRACT NUMBER				PRIORITY RATING	FUNDED UNIT PRICE		FUNDED EXTENDED PRICE
		TRUE MANUFACTURER

0058      2 EA      1034-0634-001 VHA**10**093

SHROUD INSTALLATION KIT

HQ0006-01-C-0001/HQ0006-01-C-0001	DX-C9	$0.0000	$0.0000
675784
Item Note:  Kit for IDC-19 and IDC-20
Item Reference:  Definitized price included in Line Item 0002
Item Unit Value:  $0.0000                                         Value Code :  F
Ship This Item Only To:  See Attachment A120

Quantity Ordered	Scheduled Delivery Date	Original Delivery Date
1	14-MAR-06	14-NOV-05
1	14-FEB-06	14-OCT-05

0059     2 EA      1034-0632-001 VHA**10**093

PAM ASSEMBLY INSTALLATION KIT

HQ0006-01-C-0001/HQ0006-01-C-0001	DX-C9	$0.0000	$0.0000
675784
Item Note:  Kit for IDC-19 and IDC-20
Item Reference:   Definitized price included in Line Item 0002
Item Unit Value:  $0.0000                                         Value Code :  F
Ship This Item Only To:  See Attachment A120

Quantity Ordered	Scheduled Delivery Date	Original Delivery Date
1	14-FEB-06	14-OCT-05
1	14-MAR-06	14-NOV-05

PURCHASE CONTRACT     
CONTINUATION PURCHASE CONTRACT:  101018      REVISION:  89      Page    30 of 75

ITEM	QUANTITY		UM	PART NUMBER				PROJECT CCN
		VENDOR P/N			DESCRIPTION
		CUSTOMER / PRIME CONTRACT NUMBER				PRIORITY RATING	FUNDED UNIT PRICE		FUNDED EXTENDED PRICE
		TRUE MANUFACTURER

0060      2 EA      1034-0637-001 VHA**10**093

TPS CLOSEOUT INSTALLATION KIT

HQ0006-01-C-0001/HQ0006-01-C-0001	DX-C9	$0.0000	$0.0000
675784
Item Reference:  Definitized price included in Line Item 0002
Item Unit Value:  $0.0000                                         Value Code :  F
Ship This Item Only To:  See Attachment A120

Quantity Ordered	Scheduled Delivery Date	Original Delivery Date
1	14-MAR-06	14-OCT-05
1	14-FEB-06	14-NOV-05

0061       2 EA      1034-0638-001 VHA**10**093

EMPLACEMENT COMPONENTS INSTALLATION KIT

HQ0006-01-C-0001/HQ0006-01-C-0001	DX-C9	$0.0000	$0.0000
675784
Item Note:  Kits for IDC-19 and IDC-20
Item Reference:  Definitized price included in Line Item 0002
Item Unit Value:  $0.0000                                         Value Code :  F
Ship This Item Only To:  See Attachment A120

Quantity Ordered	Scheduled Delivery Date	Original Delivery Date
1	14-FEB-06	14-OCT-05
1	14-MAR-06	14-NOV-05

PURCHASE CONTRACT     
CONTINUATION PURCHASE CONTRACT:  101018      REVISION:  89      Page    31 of 75

ITEM	QUANTITY		UM	PART NUMBER				PROJECT CCN
		VENDOR P/N			DESCRIPTION
		CUSTOMER / PRIME CONTRACT NUMBER				PRIORITY RATING	FUNDED UNIT PRICE		FUNDED EXTENDED PRICE
		TRUE MANUFACTURER

0062 2 EA 1034-3600-001 VHA**10**093

	AVIONICS ASSEMBLY
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
Item Note:  BAM for IFT-19 and IFT-20
Item Reference:  Definitized price included in Line Item 0002
Item Unit Value:  $0.0000		Value Code:  F

Quantity Ordered   1
1 Scheduled Delivery Date   15-FEB-06
15-MAR-06 Original Delivery Date   15-NOV-05
15-DEC-05

0063 2 EA 1034-0600-001 VHA**10**093

	OBV - VEHICLE ASSEMBLY
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
Item Note:  Booster Stacks for IFT-19 and IFT-20.
Item Reference:  Definitized price included in Line Item 0002
Item Unit Value:  $0.0000		Value Code: F
Ship This Item Only To:  See Attachment A120

Quantity Ordered   1
1 Scheduled Delivery Date   15-DEC-05
06-JAN-06

PURCHASE CONTRACT     
CONTINUATION PURCHASE CONTRACT:  101018      REVISION:  89      Page    32 of 75

ITEM	QUANTITY		UM	PART NUMBER				PROJECT CCN
		VENDOR P/N			DESCRIPTION
		CUSTOMER / PRIME CONTRACT NUMBER				PRIORITY RATING	FUNDED UNIT PRICE		FUNDED EXTENDED PRICE
		TRUE MANUFACTURER

0064 2 EA 1034-0636-001 VHA**10**093

	ORDNANCE CLOSEOUT INSTALLATION KIT
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
Item Note:  Kit for IFT-19 and IFT-20
Item Reference:  Definitized price included in Line Item 0002
Item Unit Value:  $0.0000		Value Code:  F
Ship This Item Only To:  See Attachment A120

Quantity Ordered   1
1 Scheduled Delivery Date   15-DEC-05
16-JAN-06

0065 2 EA 1034-0634-001 VHA**10**093

	SHROUD INSTALLATION KIT
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
Item Note:  Kit for IFT-19 and IFT-20
Item Reference:  Definitized price included in Line Item 0002
Item Unit Value:  $0.0000		Value Code:  F
Ship This Item Only To:  See Attachment A120

Quantity Ordered   1
1 Scheduled Delivery Date   15-DEC-05
16-JAN-06

PURCHASE CONTRACT     
CONTINUATION PURCHASE CONTRACT:  101018      REVISION:  89      Page    33 of 75

ITEM	QUANTITY		UM	PART NUMBER				PROJECT CCN
		VENDOR P/N			DESCRIPTION
		CUSTOMER / PRIME CONTRACT NUMBER				PRIORITY RATING	FUNDED UNIT PRICE		FUNDED EXTENDED PRICE
		TRUE MANUFACTURER

0066 2 EA 1034-0632-001 VHA**10**093

	PAM ASSEMBLY INSTALLATION KIT
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
Item Note:  Kit for IFT-19 and IFT-20
Item Reference:  Definitized price included in Line Item 0002
Item Unit Value:  $0.0000		Value Code:  F
Ship This Item Only To:  See Attachment A120

Quantity Ordered   1
1 Scheduled Delivery Date   15-DEC-05
16-JAN-06

0067 2 EA 1034-0637-001 VHA**10**093

	TPS CLOSEOUT INSTALLATION KIT
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
Item Note:  Kit for IFT-19 and IFT-20
Item Reference:  Definitized price included in Line Item 0002
Item Unit Value:  $0.0000		Value Code:  F
Ship This Item Only To:  See Attachment A120

Quantity Ordered   1
1 Scheduled Delivery Date   15-DEC-05
16-JAN-06

PURCHASE CONTRACT     
CONTINUATION PURCHASE CONTRACT:  101018      REVISION:  89      Page    34 of 75

ITEM	QUANTITY		UM	PART NUMBER				PROJECT CCN
		VENDOR P/N			DESCRIPTION
		CUSTOMER / PRIME CONTRACT NUMBER				PRIORITY RATING	FUNDED UNIT PRICE		FUNDED EXTENDED PRICE
		TRUE MANUFACTURER

0068 2 EA 1034-0638-001 VHA**10**093

	EMPLACEMENT COMPONENTS INSTALLATION KIT
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
Item Note:  Kit for IFT-19 and IFT-20
Item Reference:  Definitized price included in Line Item 0002
Item Unit Value:  $0.0000		Value Code:  F
Ship This Item Only To:  See Attachment A120

Quantity Ordered   1
1 Scheduled Delivery Date   15-DEC-05
16-JAN-06

0069 2 EA VHA**10**093

	NON-TACTICAL EQUIPMENT INSTALL KIT
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
Item Note:  NTE Kits for IFT-21 and IFT-25
Item Reference:  Definitized price included in Line Item 0002
Item Unit Value:  $0.0000		Value Code:  F
Ship This Item Only To:  See Attachment A120

Quantity Ordered   1
1 Scheduled Delivery Date   15-DEC-05
16-JAN-06

PURCHASE CONTRACT     
CONTINUATION PURCHASE CONTRACT:  101018      REVISION:  89      Page    35 of 75

ITEM	QUANTITY		UM	PART NUMBER				PROJECT CCN
		VENDOR P/N			DESCRIPTION
		CUSTOMER / PRIME CONTRACT NUMBER				PRIORITY RATING	FUNDED UNIT PRICE		FUNDED EXTENDED PRICE
		TRUE MANUFACTURER

0070 1 EA VHA**10**093

	DD254 SCG REVISION ORBITAL SCIENCES CORPORATION
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
Item Note:  Item includes:  DD254/SCG Training and development of Orbital internal SCG Users Guide. User’s Guide requires final review and concurrence by Boeing Security Representative. QA requirements do not apply to this line item.
Item Reference:  Definitized price included in Line Item 0002
Item Unit Value:  $0.0000		Value Code:  F
Period of Performance:  06/07/2004 thru 06/06/2005
Ship This Item Only To:  See Attachment A120

Quantity Ordered   1
Scheduled Delivery Date   06-JUN-05

0071 8 EA 1034-3600-001 VHA**E0**088

	AVIONICS ASSEMBLY
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
Item Note:  BAM for TB-1 (IDC-1), TB-2 (IDC-2), TB-3 (IDC-3), TB-4 (IDC-4), TB-5 (IDC-5), IDC-16, IDC-17, IDC-18
Item Reference:  Definitized price included in Line Item 0003
Item Unit Value:  $0.0000		Value Code:  F

Quantity Ordered   1
1
1
1
1
1
1
1 Scheduled Delivery Date   31-MAR-04
30-APR-04
28-MAY-04
30-JUN-04
15-JUL-04
15-JUN-05
15-JUL-05
15-AUG-05

PURCHASE CONTRACT     
CONTINUATION PURCHASE CONTRACT:  101018      REVISION:  89      Page    36 of 75

ITEM	QUANTITY		UM	PART NUMBER				PROJECT CCN
		VENDOR P/N			DESCRIPTION
		CUSTOMER / PRIME CONTRACT NUMBER				PRIORITY RATING	FUNDED UNIT PRICE		FUNDED EXTENDED PRICE
		TRUE MANUFACTURER

0072 8 EA 1034-0600-001 VHA**E0**088

	OBV — VEHICLE ASSEMBLY
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
Item Note:  Booster Stack for TB-1 (IDC-1), TB-2 (IDC-2), TB-3 (IDC-3), TB-4 (IDC-4), TB-5 (IDC-5), IDC-16,
IDC-17, IDC-18
Item Reference:  Definitized price included in Line Item 0003
Item Unit Value:  $0.0000		Value Code:  F
Ship This Item Only To:  See Attachment A120

Quantity Ordered   1
1
1
1
1
1
1
1 Scheduled Delivery Date   30-APR-04
28-MAY-04
30-JUN-04
30-JUL-04
16-AUG-04
15-JUL-05
15-AUG-05
15-SEP-05

PURCHASE CONTRACT     
CONTINUATION PURCHASE CONTRACT:  101018      REVISION:  89      Page    37 of 75

ITEM	QUANTITY		UM	PART NUMBER				PROJECT CCN
		VENDOR P/N			DESCRIPTION
		CUSTOMER / PRIME CONTRACT NUMBER				PRIORITY RATING	FUNDED UNIT PRICE		FUNDED EXTENDED PRICE
		TRUE MANUFACTURER

0073 8 EA 1034-0636-001 VHA**E0**088

	ORDNANCE CLOSEOUT INSTALLATION KIT
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
Item Note:  Kit for TB-1 (IDC-1), TB-2 (IDC-2), TB-3 (IDC-3), TB-4 (IDC-4), TB-5 (IDC-5), IDC-16, IDC-17, IDC-18
Item Reference:  Definitized price included in Line Item 0003
Item Unit Value:  $0.0000		Value Code:  F
Ship This Item Only To:  See Attachment A120

Quantity Ordered   1
1
1
1
1
1
1
1 Scheduled Delivery Date   30-APR-04
28-MAY-04
30-JUN-04
30-JUL-04
16-AUG-04
15-JUL-05
15-AUG-05
15-SEP-05

PURCHASE CONTRACT     
CONTINUATION PURCHASE CONTRACT:  101018      REVISION:  89      Page    38 of 75

ITEM	QUANTITY		UM	PART NUMBER				PROJECT CCN
		VENDOR P/N			DESCRIPTION
		CUSTOMER / PRIME CONTRACT NUMBER				PRIORITY RATING	FUNDED UNIT PRICE		FUNDED EXTENDED PRICE
		TRUE MANUFACTURER

0074 8 EA 1034-0634-001 VHA**E0**088

	SHROUD INSTALLATION KIT
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
Item Note:  Kit for TB-1 (IDC-1), TB-2 (IDC-2), TB-3 (IDC-3), TB-4 (IDC-4), TB-5 (IDC-5), IDC-16, IDC-17, IDC-18
Item Reference:  Definitized price included in Line Item 0003
Item Unit Value:  $0.0000		Value Code:  F
Ship This Item Only To:  See Attachment A120

Quantity Ordered   1
1
1
1
1
1
1
1 Scheduled Delivery Date   30-APR-04
28-MAY-04
30-JUN-04
30-JUL-04
16-AUG-04
15-JUL-05
15-AUG-05
15-SEP-05

PURCHASE CONTRACT     
CONTINUATION PURCHASE CONTRACT:  101018      REVISION:  89      Page    39 of 75

ITEM	QUANTITY		UM	PART NUMBER				PROJECT CCN
		VENDOR P/N			DESCRIPTION
		CUSTOMER / PRIME CONTRACT NUMBER				PRIORITY RATING	FUNDED UNIT PRICE		FUNDED EXTENDED PRICE
		TRUE MANUFACTURER

0075 8 EA 1034-0632-001 VHA**E0**088

	PAM ASSEMBLY INSTALLATION KIT
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
Item Note:  Kit for TB-1 (IDC-1), TB-2 (IDC-2), TB-3 (IDC-3), TB-4 (IDC-4), TB-5 (IDC-5), IDC-16, IDC-17, IDC-18
Item Reference:  Definitized price included in Line Item 0003
Item Unit Value:  $0.0000		Value Code:  F
Ship This Item Only To:  See Attachment A120

Quantity Ordered   1
1
1
1
1
1
1
1 Scheduled Delivery Date   30-APR-04
28-MAY-04
30-JUN-04
30-JUL-04
16-AUG-04
15-JUL-05
15-AUG-05
15-SEP-05

PURCHASE CONTRACT     
CONTINUATION PURCHASE CONTRACT:  101018      REVISION:  89      Page    40 of 75

ITEM	QUANTITY		UM	PART NUMBER				PROJECT CCN
		VENDOR P/N			DESCRIPTION
		CUSTOMER / PRIME CONTRACT NUMBER				PRIORITY RATING	FUNDED UNIT PRICE		FUNDED EXTENDED PRICE
		TRUE MANUFACTURER

0076 8 EA 1034-0637-001 VHA**E0**088

	TPS CLOSEOUT INSTALLATION KIT
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
Item Note:  Kit for TB-1 (IDC-1), TB-2 (IDC-2), TB-3 (IDC-3), TB-4 (IDC-4), TB-5 (IDC-5), IDC-16, IDC-17, IDC-18
Item Reference:  Definitized price included in Line Item 0003
Item Unit Value:  $0.0000		Value Code:  F
Ship This Item Only To:  See Attachment A120

Quantity Ordered   1
1
1
1
1
1
1
1 Scheduled Delivery Date   30-APR-04
28-MAY-04
30-JUN-04
30-JUL-04
16-AUG-04
15-JUL-05
15-AUG-05
15-SEP-05

PURCHASE CONTRACT     
CONTINUATION PURCHASE CONTRACT:  101018      REVISION:  89      Page    41 of 75

ITEM	QUANTITY		UM	PART NUMBER				PROJECT CCN
		VENDOR P/N			DESCRIPTION
		CUSTOMER / PRIME CONTRACT NUMBER				PRIORITY RATING	FUNDED UNIT PRICE		FUNDED EXTENDED PRICE
		TRUE MANUFACTURER

0077     8 EA      1034-0638-001 VHA**E0**088

	EMPLACEMENT COMPONENTS INSTALLATION KIT
HQ0006-01-C-001/HQ0006-01-C-0001	DX-C9	$	0.0000	$	0.0000
675784

      Item Note:  Kit for TB-1 (IDC-1), TB-2 (IDC-2), TB-3 (IDC-3), TB-4 (IDC-4), TB-5 (IDC-5), IDC-16, IDC-17, IDC-18

      Item Reference:  Definitized price included in Line Item 0003

      Item Unit Value:  $0.0000                     Value Code:  F

      Ship This Item Only To:  See Attachment A120

Quantity Ordered	Scheduled Delivery Date
1	30-APR-04
1	28-MAY-04
1	30-JUN-04
1	30-JUL-04
1	16-AUG-04
1	15-JUL-05
1	15-AUG-05
1	15-SEP-05

0078      1 LT VHAP1H03*040

	CAPABILITIES ENHANCEMENTS
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	111,009,433.0000	$	111,009,433.0000

      Item Note:  “Q” clauses are not applicable to this Line Item.

     Item Reference:  Cost Collection

      Item Unit Value:  $124,098,853.0000                     Value Code:  A

      Period of Performance:  02/04/2003 thru 07/31/2005

      Ship This Item Only To:  See Attachment A120

Quantity Ordered	Scheduled Delivery Date
1	29-JUL-05

PURCHASE CONTRACT     
CONTINUATION PURCHASE CONTRACT:  101018      REVISION:  89      Page    42 of 75

ITEM	QUANTITY		UM	PART NUMBER				PROJECT CCN
		VENDOR P/N			DESCRIPTION
		CUSTOMER / PRIME CONTRACT NUMBER				PRIORITY RATING	FUNDED UNIT PRICE		FUNDED EXTENDED PRICE
		TRUE MANUFACTURER

0079      10 EA      1034-3600-001 VHAP1H 03*040

	AVIONICS ASSEMBLY
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$0.0000

     Item Note:  BAM for IDC-6, IDC-7, IDC-8, IDC-9, IDC-10, IDC-11, IDC-12, IDC-13, IDC-14, IDC-15

     Item Reference:  Definitized price included in Line Item 0078

     Item Unit Value:  $0.0000 Value Code:  F

Quantity Ordered	Scheduled Delivery Date
1	16-AUG-04
1	15-SEP-04
1	15-OCT-04
1	15-NOV-04
1	14-DEC-04
1	14-JAN-05
1	14-FEB-05
1	14-MAR-05
1	15-APR-05
1	16-MAY-05

PURCHASE CONTRACT     
CONTINUATION PURCHASE CONTRACT:  101018      REVISION:  89      Page    43 of 75

ITEM	QUANTITY		UM	PART NUMBER				PROJECT CCN
		VENDOR P/N			DESCRIPTION
		CUSTOMER / PRIME CONTRACT NUMBER				PRIORITY RATING	FUNDED UNIT PRICE		FUNDED EXTENDED PRICE
		TRUE MANUFACTURER

0080      10 EA      1034-0600-001 VHAP1H03*040

	OBV - VEHICLE ASSEMBLY
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000

     Item Note:  Booster Stack for IDC-6, IDC-7, IDC-8, IDC-9, IDC-10, IDC-11, IDC-12, IDC-13, IDC-14, IDC-15

     Item Reference:  Definitized price included in Line Item 0078

     Item Unit Value:  $0.0000 Value Code:  F

     Ship This item Only To:  See Attachment A120

Quantity Ordered	Scheduled Delivery Date
1	15-SEP-04
1	15-OCT-04
1	15-NOV-04
1	14-DEC-04
1	14-JAN-05
1	14-FEB-05
1	14-MAR-05
1	15-APR-05
1	16-MAY-05
1	14-JUN-05

PURCHASE CONTRACT     
CONTINUATION PURCHASE CONTRACT:  101018      REVISION:  89      Page    44 of 75

ITEM	QUANTITY		UM	PART NUMBER				PROJECT CCN
		VENDOR P/N			DESCRIPTION
		CUSTOMER / PRIME CONTRACT NUMBER				PRIORITY RATING	FUNDED UNIT PRICE		FUNDED EXTENDED PRICE
		TRUE MANUFACTURER

0081      10 EA      1034-0636-001 VHAP1H03*040

	ORDNANCE CLOSEOUT INSTALLATION KIT
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000

     Item Note:  Kits for IDC-6, IDC-7, IDC-8, IDC-9, IDC-10, IDC-11, IDC-12, IDC-13, IDC-14, IDC-15

     Item Reference:  Definitized price included in Line Item 0078

     Item Unit Value:  $0.0000 Value Code:  F

     Ship This Item Only To:  See Attachment A120

Quantity Ordered	Scheduled Delivery Date
1	15-SEP-04
1	15-OCT-04
1	15-NOV-04
1	14-DEC-04
1	14-JAN-05
1	14-FEB-05
1	14-MAR-05
1	15-APR-05
1	16-MAY-05
1	14-JUN-05

PURCHASE CONTRACT     
CONTINUATION PURCHASE CONTRACT:  101018      REVISION:  89      Page    45 of 75

ITEM	QUANTITY		UM	PART NUMBER				PROJECT CCN
		VENDOR P/N			DESCRIPTION
		CUSTOMER / PRIME CONTRACT NUMBER				PRIORITY RATING	FUNDED UNIT PRICE		FUNDED EXTENDED PRICE
		TRUE MANUFACTURER

0082      5 EA     1034-0634-001 VHAP1H03*040

	SHROUD INSTALLATION KIT
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000

     Item Note:  Kits for IDC-6, IDC-7, IDC-8, IDC-9, IDC-10

     Item Reference:  Definitized price included in Line Item 0078

     Item Unit Value:  $0.0000 Value Code:  F

     Ship This Item Only To:  See Attachment A120

Quantity Ordered	Scheduled Delivery Date
1	15-SEP-04
1	15-OCT-04
1	15-NOV-04
1	14-DEC-04
1	14-JAN-05

PURCHASE CONTRACT     
CONTINUATION PURCHASE CONTRACT:  101018      REVISION:  89      Page    46 of 75

ITEM	QUANTITY		UM	PART NUMBER				PROJECT CCN
		VENDOR P/N			DESCRIPTION
		CUSTOMER / PRIME CONTRACT NUMBER				PRIORITY RATING	FUNDED UNIT PRICE		FUNDED EXTENDED PRICE
		TRUE MANUFACTURER

0083 10 EA 1034-0632-001 VHAP1H03*040

		PAM ASSEMBLY INSTALLATION KIT
HQ0006-01-C-0001/HQ0006-01-C-0001 675784		DX-C9	$	0.0000	$	0.0000
Item Note:  Kits for IDC-6, IDC-7, IDC-8, IDC-9, IDC-10, IDC-11, IDC-12, IDC-13, IDC-14, IDC-15
Item Reference:  Definitized price included in Line Item 0078
Item Unit Value:  $0.0000	Value Code:  F
Ship This Item Only To:  See Attachment A120

Quantity Ordered	Scheduled Delivery Date
1		15-SEP-04
1		15-OCT-04
1		15-NOV-04
1		14-DEC-04
1		14-JAN-05
1		14-FEB-05
1		14-MAR-05
1		15-APR-05
1		16-MAY-05
1		14-JUN-05

PURCHASE CONTRACT     
CONTINUATION PURCHASE CONTRACT:  101018      REVISION:  89      Page    47 of 75

ITEM	QUANTITY		UM	PART NUMBER				PROJECT CCN
		VENDOR P/N			DESCRIPTION
		CUSTOMER / PRIME CONTRACT NUMBER				PRIORITY RATING	FUNDED UNIT PRICE		FUNDED EXTENDED PRICE
		TRUE MANUFACTURER

0084 10 EA 1034-0637-001 VHAP1H03*040

		TPS CLOSEOUT INSTALLATION KIT
HQ0006-01-C-0001/HQ0006-01-C-0001 675784		DX-C9	$	0.0000	$	0.0000
Item Note:  Kits for IDC-6, IDC-7, IDC-8, IDC-9, IDC-10, IDC-11, IDC-12, IDC-13, IDC-14, IDC-15
Item Reference:  Definitized price included in Line Item 0078
Item Unit Value:  $0.0000	Value Code:  F
Ship This Item Only To:  See Attachment A120

Quantity Ordered	Scheduled Delivery Date
1		15-SEP-04
1		15-OCT-04
1		15-NOV-04
1		14-DEC-04
1		14-JAN-05
1		14-FEB-05
1		14-MAR-05
1		15-APR-05
1		16-MAY-05
1		14-JUN-05

PURCHASE CONTRACT     
CONTINUATION PURCHASE CONTRACT:  101018      REVISION:  89      Page    48 of 75

ITEM	QUANTITY		UM	PART NUMBER				PROJECT CCN
		VENDOR P/N			DESCRIPTION
		CUSTOMER / PRIME CONTRACT NUMBER				PRIORITY RATING	FUNDED UNIT PRICE		FUNDED EXTENDED PRICE
		TRUE MANUFACTURER

0085 10 EA 1034-0638-001 VHAP1H03*040

		EMPLACEMENT COMPONENTS INSTALLATION KIT
HQ0006-01-C-0001/HQ0006-01-C-0001 675784		DX-C9	$	0.0000	$	0.0000
Item Note:  Kits for IDC-6, IDC-7, IDC-8, IDC-9, IDC-10, IDC-11, IDC-12, IDC-13, IDC-14, IDC-15
Item Reference:  Definitized price included in Line Item 0078
Item Unit Value:  $0.0000	Value Code:  F
Ship This Item Only To:  See Attachment A120

Quantity Ordered	Scheduled Delivery Date
1		15-SEP-04
1		15-OCT-04
1		15-NOV-04
1		14-DEC-04
1		14-JAN-05
1		14-FEB-05
1		14-MAR-05
1		15-APR-05
1		16-MAY-05
1		14-JUN-05

0086 1 EA VHA**10**093

1034-9622		OSC-TELEMETRY TEST
HQ0006-01-C-0001/HQ0006-01-C-0001 675784		DX-C9	$	0.0000	$	0.0000
Item Reference:  Definitized price included in Line Item 0002.
Item Unit Value:  $0.0000	Value Code:  F
Ship This Item Only To:  See Attachment A120

Quantity Ordered   1 Scheduled Delivery Date   09-JUL-04

PURCHASE CONTRACT     
CONTINUATION PURCHASE CONTRACT:  101018      REVISION:  89      Page    49 of 75

ITEM	QUANTITY		UM	PART NUMBER				PROJECT CCN
		VENDOR P/N			DESCRIPTION
		CUSTOMER / PRIME CONTRACT NUMBER				PRIORITY RATING	FUNDED UNIT PRICE		FUNDED EXTENDED PRICE
		TRUE MANUFACTURER

0087 1 EA VHA**10**093

		3.9.2 OSC-DVT
HQ0006-01-C-0001/HQ0006-01-C-0001 675784		DX-C9	$	0.0000	$	0.0000
Item Note:  “Q” clauses are not applicable to this Line Item.
Item Reference:  Definitized price included in Line Item 0002.
Item Unit Value:  $0.0000	Value Code:  F
Period of Performance:    07/06/2004 thru 08/31/2004
Ship This Item Only To:    See Attachment A120

Quantity Ordered   1 Scheduled Delivery Date   31-AUG-04

0088 1 LT VHACP12**112

		OSC-CAPABILITY ENHANCEMENTS II PROPOSAL PREPARATIO
HQ0006-01-C-0001/HQ0006-01-C-0001 675784		DX-C9	$	0.0000	$	0.0000
Item Note:    “Q” clauses are not applicable to this Line Item.
Item Reference:    Cost Collection
Item Unit Value:    $139,664.0000	Value Code:   A
Period of Performance:     05/05/2004 thru 09/30/04
Ship This Item Only To:    See Attachment A120

Quantity Ordered   1 Scheduled Delivery Date   30-SEP-04

PURCHASE CONTRACT     
CONTINUATION PURCHASE CONTRACT:  101018      REVISION:  89      Page    50 of 75

ITEM	QUANTITY		UM	PART NUMBER				PROJECT CCN
		VENDOR P/N			DESCRIPTION
		CUSTOMER / PRIME CONTRACT NUMBER				PRIORITY RATING	FUNDED UNIT PRICE		FUNDED EXTENDED PRICE
		TRUE MANUFACTURER

0089 1 LT VHAC3P0**002

		WBS 3.9.2 CAPABILITY ENHANCEMENT II-LONG LEAD
HQ0006-01-C-0001/HQ0006-01-C-0001 675784		DX-C9	$	0.0000	$	0.0000
Item Note:  This Line Item value is reduced to $0 and all costs associated with this Line Item are transferred to Line Item 0102 for definitization of CEII. “Q” clauses are not applicable to this Line Item.
Item Reference:  This Line Item value is reduced to $0
Item Unit Value:  $0.0000	Value Code:  E
Period of Performance:  06/09/2004 thru 09/30/2004
Ship This Item Only To:  See Attachment A120

Quantity Ordered   1 Scheduled Delivery Date   30-SEP-04

0090 8 EA 1034-9606-002 VHA**10**093

		YOKE REDESIGN
HQ0006-01-C-0001/HQ0006-01-C-0001 675784		DX-C9	$	0.0000	$	0.0000
Item Note:  “Q” clauses are not applicable to this Line Item.
Item Reference:  Definitized $686,502 included in line item 0002
Item Unit Value:  $0.0000	Value Code:  G

Quantity Ordered   8 Scheduled Delivery Date   28-FEB-05

PURCHASE CONTRACT     
CONTINUATION PURCHASE CONTRACT:  101018      REVISION:  89      Page    51 of 75

ITEM	QUANTITY		UM	PART NUMBER				PROJECT CCN
		VENDOR P/N			DESCRIPTION
		CUSTOMER / PRIME CONTRACT NUMBER				PRIORITY RATING	FUNDED UNIT PRICE		FUNDED EXTENDED PRICE
		TRUE MANUFACTURER

0091 1 LT VHA**E0**088

	OSC SUPPORT AT FT. GREELY
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	210,118.0000	$	210,118.0000
Item Note:  “Q” clauses are not applicable to this Line Item.
Item Unit Value:  $210,118.0000		Value Code:  H
Period of Performance:  09/01/2004 — 10/08/2004
Ship This Item Only To:  See Attachment A120

FREEFORM SOW - INTEGRATION SUPPORT (6) Rev 00

Quantity Ordered   1 Scheduled Delivery Date   08-OCT-04

0092 1 EA 1034-9700-001 VHA**10**093

	ELECTRONIC INTERFACE SIMULATOR
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
Item Reference:   Definitized price included in Line Item 0002
Item Unit Value:  $0.0000		Value Code:  F
Ship This Item Only To:  See Attachment A120

Quantity Ordered   1 Scheduled Delivery Date   28-FEB-05

PURCHASE CONTRACT     
CONTINUATION PURCHASE CONTRACT:   101018      REVISION:  89      Page    52 of 75

ITEM	QUANTITY		UM	PART NUMBER				PROJECT CCN
		VENDOR P/N			DESCRIPTION
		CUSTOMER / PRIME CONTRACT NUMBER				PRIORITY RATING	FUNDED UNIT PRICE		FUNDED EXTENDED PRICE
		TRUE MANUFACTURER

0093 1 LT VHA**E0**088

	OSC SUPPORT AT FORT GREELY - GBI INTEGRATION
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
Item Note:  “Q” clauses are not applicable to this Line Item.
Item Reference:  Definitized price included in Item 0003
Item Unit Value:   $ 0.0000		Value Code:   F
Period of Performance:  09/03/04 thru 10/31/2004
Ship This Item Only To:  See Attachment A120

FREEFORM SOW - INTEGRATION SUPPORT (4) Rev 00

Quantity Ordered   1 Scheduled Delivery Date   29-OCT-04

0094 1 EA P16M-22-116 VHA**10**093

	TVC SIMULATOR, STAGE 1
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
Item Reference:  Definitized price included in Line Item 0002
Item Unit Value:  $0.0000		Value Code:   F

Quantity Ordered   1 Scheduled Delivery Date   30-AUG-04

0095 2 EA 1034-0880-001 VHA**10**093

	NTE KIT
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
Item Reference:  Definitized $3,504,766 included in item 0002
Item Unit Value:   $0.0000		Value Code:   G

Quantity Ordered   2 Scheduled Delivery Date   15-MAR-06 Original Delivery Date   15-NOV-05

PURCHASE CONTRACT     
CONTINUATION PURCHASE CONTRACT:  101018      REVISION:  89      Page    53 of 75

ITEM	QUANTITY		UM	PART NUMBER				PROJECT CCN
		VENDOR P/N			DESCRIPTION
		CUSTOMER / PRIME CONTRACT NUMBER				PRIORITY RATING	FUNDED UNIT PRICE		FUNDED EXTENDED PRICE
		TRUE MANUFACTURER

0096 1 EA VHA**HO**040

N/A	OSC SUPPORT TO FT. GREELY
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	50,802.0000	$	50,802.0000
Item Reference:  Not To Exceed $50,802
Item Unit Value:   $50,802.0000		Value Code:  C
Period of Performance:  10/13/2004 thru 11/08/2004
Ship This Item Only To:  See Attachment A120
FREEFORM      SOW - INTEGRATION SUPPORT (3) Rev 00

Quantity Ordered   1 Scheduled Delivery Date   08-NOV-04

0097 2 EA 1034-1014-003 VHA**10**093

	TPS BOOT ASSEMBLY
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
Item Reference:  Definitized price included in Line Item 0002
Item Unit Value:   $0.0000		Value Code:  F
Ship This Item Only To:  See Attachment A120

Quantity Ordered   2 Scheduled Delivery Date   20-OCT-04

PURCHASE CONTRACT     
CONTINUATION PURCHASE CONTRACT:  101018      REVISION:  89      Page    54 of 75

ITEM	QUANTITY		UM	PART NUMBER				PROJECT CCN
		VENDOR P/N			DESCRIPTION
		CUSTOMER / PRIME CONTRACT NUMBER				PRIORITY RATING	FUNDED UNIT PRICE		FUNDED EXTENDED PRICE
		TRUE MANUFACTURER

0098 2 EA 1034-1014-004 VHA**10**093

		TPS BOOT ASSEMBLY
HQ0006-01-C-0001/HQ0006-01-C-0001 675784		DX-C9	$	0.0000	$	0.0000
Item Reference:  Definitized price included in Line Item 0002
Item Unit Value:  $0.0000	Value Code:   F
Ship This Item Only To:  See Attachment A120

Quantity Ordered   2 Scheduled Delivery Date   20-OCT-04

0099 1 EA 1034-9600-002 VHA**10**093

REPAIR PER NC00200609		VLS (VERTICAL LIFTING SLING)
HQ0006-01-C-0001/HQ0006-01-C-0001 675784		DX-C9	$	0.0000	$	0.0000
Item Reference:  Definitized price included in Line Item 0002
Item Unit Value:  $0.0000	Value Code:  F

Quantity Ordered   1 Scheduled Delivery Date   10-DEC-04

0100 1 EA VHA**10**093

NO HARDWARE		SURV STUDY/WBS 2.6 CLIN 0101 ENGINEER SUPPORT
HQ0006-01-C-0001/HQ0006-01-C-0001 675784		DX-C9	$	0.0000	$	0.0000
Item Reference:  Definitized Price included in item 0002
Item Unit Value:  $0.0000	Value Code:  F
Period of Performance:  12/1/2004 — 02/28/2005

Quantity Ordered   1 Scheduled Delivery Date   28-FEB-05

PURCHASE CONTRACT     
CONTINUATION PURCHASE CONTRACT:  101018      REVISION:  89      Page    55 of 75

ITEM	QUANTITY		UM	PART NUMBER				PROJECT CCN
		VENDOR P/N			DESCRIPTION
		CUSTOMER / PRIME CONTRACT NUMBER				PRIORITY RATING	FUNDED UNIT PRICE		FUNDED EXTENDED PRICE
		TRUE MANUFACTURER

0101 1 EA VHA**10**093

	OSC EXTENDED DATA REVIEW
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
Item Reference:  Undefinitized Price include initem 0002
Item Unit Value:  $0.0000		Value Code:  G
Period of Performance:  02/2005 - 06/2006

Quantity Ordered   1 Scheduled Delivery Date   30-JUN-06

0102 12 EA VHAC3P0**002

	TACTICAL VEHICLES - CE II
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
Item Reference:  Undefinitized Price included in Item 0103
Item Unit Value:  $0.0000		Value Code:  G
Period of Performance:  8/17/2004 - 8/18/2006
Ship This Item Only To:

See Attachment A120

Quantity Ordered   1
2
2
1
1
1
1
1
1
1 Scheduled Delivery Date   12-JAN-06
10-FAB-06
10-MAR-06
10-APR-06
12-APR-06
10-MAY-06
11-MAY-06
09-JUN-06
12-JUN-06
10-JUL-06

PURCHASE CONTRACT     
CONTINUATION PURCHASE CONTRACT:  101018      REVISION:  89      Page    56 of 75

ITEM	QUANTITY		UM	PART NUMBER				PROJECT CCN
		VENDOR P/N			DESCRIPTION
		CUSTOMER / PRIME CONTRACT NUMBER				PRIORITY RATING	FUNDED UNIT PRICE		FUNDED EXTENDED PRICE
		TRUE MANUFACTURER

0103 1 LT VHAC3PO**002

	TACTICAL VEHICLES - CE II
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	37,478,129.0000	$	37,478,129.0000
Item Reference:  Cost Collection
Item Unit Value:  $8,367,000.0000		Value Code:  A

Quantity Ordered   1 Scheduled Delivery Date   12-JAN-06

0104 1 EA VHA**MO**002

	SAASM GPS
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	3,234,000.0000	$	3,234,000.0000
Item Reference:  To be negotiated, Not-to-exceed $687,000
Item Unit Value:  $687,000.0000		Value Code:  D
Period of Performance:  11/09/2004 - 01/31/2006
Ship This Item Only To:  See Attachment A120                                              See Attachment A120

Quantity Ordered   1 Scheduled Delivery Date   03-FEB-05

0105 3 EA VHA1**10**093

1034-9578-001	OSC TEST CABLES
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
Item Reference:  Price definitized under line item 0002
Item Unit Value:		Value Code:  A

Quantity Ordered   3 Scheduled Delivery Date   16-MAY-05

PURCHASE CONTRACT     
CONTINUATION PURCHASE CONTRACT:  101018      REVISION:  89      Page    57 of 75

ITEM	QUANTITY		UM	PART NUMBER				PROJECT CCN
		VENDOR P/N			DESCRIPTION
		CUSTOMER / PRIME CONTRACT NUMBER				PRIORITY RATING	FUNDED UNIT PRICE		FUNDED EXTENDED PRICE
		TRUE MANUFACTURER

0106 3 EA VHA**10**093

1039-9137-001	OSC TEST CABLES
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
Item Reference:  Price definitized under line item 0002
Item Unit Value:		Value Code:  A

Quantity Ordered   3 Scheduled Delivery Date   15-APR-05

0107 1 EA VHAC3PO**002

PM&P FAST TRACK EFFORT	CE II-LOT 1 HARDWARE MODIFICATIONS
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
Item Reference:  Undefinitized $2,658,000 include in item 0103
Item Unit Value:  $0.0000		Value Code:  G
Ship This Item Only To:  See Attachment A120                                              See Attachment A120

Quantity Ordered   1 Scheduled Delivery Date   30-DEC-05

0108 1 EA VHA**10**093

	OSC MIL STD 1901A COMPLIANCE
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
Item Reference:  Definitized $97,960 included in line item 0002
Item Unit Value:  $0.0000		Value Code:
Period of Performance:  05/01/2005   thru   06/30/2005

Quantity Ordered   1 Scheduled Delivery Date   30-JUN-05

PURCHASE CONTRACT     
CONTINUATION PURCHASE CONTRACT:  101018      REVISION:  89      Page    58 of 75

ITEM	QUANTITY		UM	PART NUMBER				PROJECT CCN
		VENDOR P/N			DESCRIPTION
		CUSTOMER / PRIME CONTRACT NUMBER				PRIORITY RATING	FUNDED UNIT PRICE		FUNDED EXTENDED PRICE
		TRUE MANUFACTURER

0109 1 EA VHA**10**093

HSV IIF/GDIIL	OSC INTEGRATION & TESTING SPT
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
Item Reference:  Undefinitized $300,000 included in item 0002
Item Unit Value:  $0.0000		Value Code:
Period of Performance:  01/01/2005   thru   09/20/2006

Quantity Ordered   1 Scheduled Delivery Date   20-SEP-06

0110 1 EA VHA**EO**088

GREELY/VAFB LDC INTEGRATION	OSC INTEGRATION & TESTING SPT
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
Item Reference:  Undefinitized $400,000 included in item 0003
Item Unit Value:  $0.0000		Value Code:
Period of Performance:  01/01/2005   thru   09/20/2006

Quantity Ordered   1 Scheduled Delivery Date   20-SEP-06

0111 1 EA VHA**H0**040

RTS/VAFB LAUNCH SITES	OSC INTEGRATION & TESTING SPT
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
Item Reference:   Undefinitized $1,600,000 included in item 0078
Item Unit Value:  $0.0000		Value Code:
Period of Performance:  01/01/2005   thru   09/20/2006

Quantity Ordered   1 Scheduled Delivery Date   20-SEP-06

PURCHASE CONTRACT     
CONTINUATION PURCHASE CONTRACT:  101018      REVISION:  89      Page    59 of 75

ITEM	QUANTITY		UM	PART NUMBER				PROJECT CCN
		VENDOR P/N			DESCRIPTION
		CUSTOMER / PRIME CONTRACT NUMBER				PRIORITY RATING	FUNDED UNIT PRICE		FUNDED EXTENDED PRICE
		TRUE MANUFACTURER

0112 1 EA VHA**10**093

SHROUD TPS ENHANCEMENT PROGRAM	OSC TPS UPGRADE
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
SOW:  D744-214-75     SOW Rev:  New
Item Reference:  Undefinitized $3,375,274 included in item 0002
Item Unit Value:  $0.0000		Value Code:
Period of Performance:  2/17/2005   thru   6/30/2005

Quantity Ordered   1 Scheduled Delivery Date   30-JUN-05

0113 1 EA VHA**HO**040

SHROUD TPS ENHANCEMENT PROGRAM	OSC TPS UPGRADE   -   CLIN 0401
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
SOW:  D744-214-75     SOW Rev:  New
Item Reference:  Undefinitized $466,909 included in item 0078
Item Unit Value:  $0.0000		Value Code:
Period of Performance:  2/17/2005   thru   6/30/2005

Quantity Ordered   1 Scheduled Delivery Date   30-JUN-05

0114 1 EA VHA**10**093

MRTF   TASK 8	OSC SPECIAL INSTRUMENTATION ON IFT’S (GILSET 2)
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
SOW:  MRTF8      SOW Rev:
Item Reference:  Undefinitized $1,960,000 included in item 0002
Item Unit Value:  $0.0000		Value Code:
Period of Performance:  6/8/2005   thru   9/30/07

Quantity Ordered   1 Scheduled Delivery Date   28-SEP-07

PURCHASE CONTRACT     
CONTINUATION PURCHASE CONTRACT:  101018      REVISION:  89      Page    60 of 75

ITEM	QUANTITY		UM	PART NUMBER				PROJECT CCN
		VENDOR P/N			DESCRIPTION
		CUSTOMER / PRIME CONTRACT NUMBER				PRIORITY RATING	FUNDED UNIT PRICE		FUNDED EXTENDED PRICE
		TRUE MANUFACTURER

0115 1 EA VHA**10**093

MRTF TASK 13	OSC GTM NTE & SPECIAL INSTRUMENTATION
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
SOW:  MRTF13     SOW Rev:
Item Reference:  Undefinitized $1,392,000 included in item 0002
Item Unit Value:  $0.0000		Value Code:
Period of Performance:  6/8/05   thru   9/30/06

Quantity Ordered   1 Scheduled Delivery Date   29-SEP-06

0116 1 EA VHA**10**093

MRTF TASK 16	OSC MIL-STD-1540B STUDY (GILSET #6)
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
SOW:  MRTF16     SOW Rev:
Item Reference:  Undefinitized $50,000 included in item 0002
Item Unit Value:   $0.0000		Value Code:
Period of Performance:  6/8/05   thru   9/30/06

Quantity Ordered   1 Scheduled Delivery Date   29-SEP-06

0117 1 EA VHA**10**093

	3.9.2 OSC PALLET TEST
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
Item Reference:  Definitized $565,616 included in item 0002
Item Unit Value:  $0.0000		Value Code:
Period of Performance:  10-03 to 6/04

Quantity Ordered   1 Scheduled Delivery Date   23-JUN-04

PURCHASE CONTRACT
CONTINUATION PURCHASE CONTRACT:  101018 REVISION:  89 Page    61 of 75

ITEM	QUANTITY		UM	PART NUMBER				PROJECT CCN
		VENDOR P/N			DESCRIPTION
		CUSTOMER / PRIME CONTRACT NUMBER				PRIORITY RATING	FUNDED UNIT PRICE		FUNDED EXTENDED PRICE
		TRUE MANUFACTURER

0118 1 EA VHA**10**093

	OSC SHROUD THERMAL SEPARATION TEST (T2-1)
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
SOW:  SOW T2-1           SOW Rev:
Item Reference:  Undefinitized $1,300,000 included in item 0002
Item Unit Value:  $0.0000		Value Code:
Period of Performance:  6/13/05 thru 9/30/05

Quantity Ordered   1 Scheduled Delivery Date   30-SEP-05

0119 1 EA VHA**10**093

	OSC CONVERT 14B TO HIFI GTM (T2-5)
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
SOW:  SOW T2-5          SOW Rev:
Item Reference:  Undefinitized $200,000 included in item 0002
Item Unit Value:  $0.0000		Value Code:
Period of Performance:  6/13/05 thru 9/30/06

Quantity Ordered   1 Scheduled Delivery Date   29-SEP-06

0120 1 EA VHA**10**093

	OBV SIMULATOR FIDELITY UPGRADE (NAV SETS)
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
SOW:  SOW T2-51          SOW Rev:
Item Reference:  Undefinitized $1,500,000 included in item 0002
Item Unit Value:  $0.0000		Value Code:
Period of Performance:  6/14/05 thru 9/30/06

Quantity Ordered   1 Scheduled Delivery Date   29-SEP-06

PURCHASE CONTRACT
CONTINUATION PURCHASE CONTRACT:  101018 REVISION:  89 Page    62 of 75

ITEM	QUANTITY		UM	PART NUMBER				PROJECT CCN
		VENDOR P/N			DESCRIPTION
		CUSTOMER / PRIME CONTRACT NUMBER				PRIORITY RATING	FUNDED UNIT PRICE		FUNDED EXTENDED PRICE
		TRUE MANUFACTURER

0121 1 EA VHA**10**093

	BIT AND ABORT SOFTWARE STUDY UPDATE RQRD DOCS
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
SOW:  SOW T2-52          SOW Rev:
Item Reference:  Undefinitized $179,000 included in item 0002
Item Unit Value:  $0.0000		Value Code:
Period of Performance:  6/14/05 thru 9/30/06

Quantity Ordered   1 Scheduled Delivery Date   29-SEP-06

0122 1 EA VHA**10**093

	OBV-3 MACH SWAP (DUAL FET MOD)
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
SOW:  SOW T2-54          SOW Rev:
Item Reference:  Undefinitized $50,000 included in item 0002
Item Unit Value:  $0.0000		Value Code:
Period of Performance:  6/14/05 thru 9/30/06

Quantity Ordered   1 Scheduled Delivery Date   29-SEP-06

0123 1 EA VHA**10**093

	FIELD SITE MOTOR INSPECTIONS
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
SOW:  SOW T2-55          SOW Rev:
Item Reference:  Undefinitized $75,000 included in item 0002
Item Unit Value:  $0.0000		Value Code:
Period of Performance:  6/14/05 thru 9/30/06

Quantity Ordered   1 Scheduled Delivery Date   29-SEP-06

PURCHASE CONTRACT
CONTINUATION PURCHASE CONTRACT:  101018 REVISION:  89 Page    63 of 75

ITEM	QUANTITY		UM	PART NUMBER				PROJECT CCN
		VENDOR P/N			DESCRIPTION
		CUSTOMER / PRIME CONTRACT NUMBER				PRIORITY RATING	FUNDED UNIT PRICE		FUNDED EXTENDED PRICE
		TRUE MANUFACTURER

0124 1 EA VHA**10**093

	OSC-CR125
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
SOW:  SOWCR125           SOW Rev:
Item Reference:  Definitized $508,526 included in item 0002
Item Unit Value:  $0.0000		Value Code:
Period of Performance:  7/05 thru 6/06

Quantity Ordered   1 Scheduled Delivery Date   23-JUN-06

0125 1 EA VHA**10**093

	T3-4 RQMTS, TEST PLANNING AND PROCEDURES MODS
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
SOW:  T3-4)          SOW Rev:  New
Item Reference:  Undefinitized $30,000 included in item 0002
Item Unit Value:  $0.0000		Value Code:
Period of Performance:  7/1/05 — 9/30/07

Quantity Ordered   1 Scheduled Delivery Date   24-JUN-05

0126 1 EA VHA**10**093

	T3-9 OBV MIL-STD 1540 DELTA QUALIFICATION
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
SOW:  T3-9)          SOW Rev:  New
Item Reference:  Undefinitized $3,550,520 included in item 0002
Item Unit Value:  $0.0000		Value Code:
Period of Performance:  7/1/05 — 9/30/07

Quantity Ordered   1 Scheduled Delivery Date   24-JUN-05

PURCHASE CONTRACT
CONTINUATION PURCHASE CONTRACT:  101018 REVISION:  89 Page    64 of 75

ITEM	QUANTITY		UM	PART NUMBER				PROJECT CCN
		VENDOR P/N			DESCRIPTION
		CUSTOMER / PRIME CONTRACT NUMBER				PRIORITY RATING	FUNDED UNIT PRICE		FUNDED EXTENDED PRICE
		TRUE MANUFACTURER

0127 1 EA VHA**10**093

	T3-12 SIMULATION UPGRADES
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
SOW:  T3-12)           SOW Rev:  New
Item Reference:  Undefinitized $801,499 included in item 0002
Item Unit Value:  $0.0000		Value Code:
Period of Performance:  7/1/05 — 9/30/07

Quantity Ordered   1 Scheduled Delivery Date   24-JUN-05

0128 1 EA VHA**10**093

	T3-15 MOTOR STATIC FIRE
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
SOW:  T3-15)          SOW Rev:     New
Item Reference:  Undefinitized $1,813,259 included in item 0002
Item Unit Value:  $0.0000		Value Code:
Period of Performance:  7/1/05 — 9/30/07

Quantity Ordered   1 Scheduled Delivery Date   24-JUN-05

0129 1 EA VHA**10**093

	T3-20 GT-1 USING GTM-5 AT RTS
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
SOW:  T3-20)          SOW Rev:  New
Item Reference:  Undefinitized $313,206 included in item 0002
Item Unit Value:  $0.0000		Value Code:
Period of Performance:  7/1/05 — 9/30/07

Quantity Ordered   1 Scheduled Delivery Date   24-JUN-05

PURCHASE CONTRACT
CONTINUATION PURCHASE CONTRACT:  101018 REVISION:  89 Page    65 of 75

ITEM	QUANTITY		UM	PART NUMBER				PROJECT CCN
		VENDOR P/N			DESCRIPTION
		CUSTOMER / PRIME CONTRACT NUMBER				PRIORITY RATING	FUNDED UNIT PRICE		FUNDED EXTENDED PRICE
		TRUE MANUFACTURER

0130 1 EA VHA**10**093

	T3-22 GT-2 USING GTM-5
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
SOW:  T3-22)          SOW Rev:  New
Item Reference:  Definitized $202,035 included in item 0002
Item Unit Value:  $0.0000		Value Code:
Period of Performance:  7/1/05 — 9/30/07

Quantity Ordered   1 Scheduled Delivery Date   24-JUN-05

0131 1 EA VHA**10**093

	T3-23 FT-2 FROM VAFB
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
SOW:  T3-23)          SOW Rev:  New
Item Reference:  Undefinitized $22,032 included in item 0002
Item Unit Value:  $0.0000		Value Code:
Period of Performance:  7/1/05 — 9/30/07

Quantity Ordered   1 Scheduled Delivery Date   24-JUN-05

0132 1 EA VHAP1H03*040

	OSC MRTF T3-17 GTM NEED FOR VAFB
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
SOW:  T3-17)          SOW Rev:  New
Item Reference:  Undefinitized $1,129,538 included in item 0078
Item Unit Value:  $0.0000		Value Code:
Period of Performance:  7/1/05 — 9/30/07

Quantity Ordered   1 Scheduled Delivery Date   24-JUN-05

PURCHASE CONTRACT     
CONTINUATION PURCHASE CONTRACT:  101018      REVISION:  89      Page    66 of 75

ITEM	QUANTITY		UM	PART NUMBER				PROJECT CCN
		VENDOR P/N			DESCRIPTION
		CUSTOMER / PRIME CONTRACT NUMBER				PRIORITY RATING	FUNDED UNIT PRICE		FUNDED EXTENDED PRICE
		TRUE MANUFACTURER

0133 1 EA VHAP1H03*040

	OSC MRTF T3-18-GTM-4 (INERT MOTORS) FOR GDIL
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
SOW:  T3-18)      SOW Rev:  New
Item Reference:  Undefinitized $206,170 included in item 0078
Item Unit Value:  $0.0000		Value Code:
Period of Performance:  7/1/05 — 9/30/07

Quantity Ordered   1 Scheduled Delivery Date   24-JUN-05

0134 1 EA VHA**10**093

	PHASE 1	OSC PATHFINDER
	HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
SOW:  PATH1      SOW Rev:  New
	Item Reference:  Undefinitized $42,800 included in item 0002
	Item Unit Value:  $0.0000		Value Code:
	Period of Performance:  7/01/05 — 9/20/05

Quantity Ordered   1 Scheduled Delivery Date   24-JUN-05

0135 1 EA VHA**10**093

	PHASE 2	OSC - PATHFINDER PHASE
	HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
SOW:  PATH2      SOW Rev:  New
	Item Reference:  Undefinitized $55,600 included in item 0002
	Item Unit Value:  $0.0000		Value Code:
	Period of Performance:  7/15/05 — 9/30/05

Quantity Ordered   1 Scheduled Delivery Date   08-JUL-05

PURCHASE CONTRACT     
CONTINUATION PURCHASE CONTRACT:  101018      REVISION:  89      Page    67 of 75

ITEM	QUANTITY		UM	PART NUMBER				PROJECT CCN
		VENDOR P/N			DESCRIPTION
		CUSTOMER / PRIME CONTRACT NUMBER				PRIORITY RATING	FUNDED UNIT PRICE		FUNDED EXTENDED PRICE
		TRUE MANUFACTURER

0136 1 EA VHA**10**093

	OSC STEP CLAM TEST
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
SOW:  D744-214-75      SOW Rev:  A
Item Reference:  Undefinitized $700,000 included in item 0002
Item Unit Value:  $0.0000		Value Code:
Period of Performance:  7/15/05 — 12/01/05

Quantity Ordered   1 Scheduled Delivery Date   08-JUL-05

0137 1 EA VHA**13**070

	OSC SAFE & ARM DEVICES (PACSCI)
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
Item Reference:  Undefinitized $120,000 included in item 0137
Item Unit Value:  $120,000.0000		Value Code:  A
Period of Performance:  7/15/05 — 10/31/05

Quantity Ordered   1 Scheduled Delivery Date   08-JUL-05

PURCHASE CONTRACT     
CONTINUATION PURCHASE CONTRACT:  101018      REVISION:  89      Page    68 of 75

ITEM	QUANTITY		UM	PART NUMBER				PROJECT CCN
		VENDOR P/N			DESCRIPTION
		CUSTOMER / PRIME CONTRACT NUMBER				PRIORITY RATING	FUNDED UNIT PRICE		FUNDED EXTENDED PRICE
		TRUE MANUFACTURER

0138 1 EA VHA**10**093

	OSC TVC HYDRAULIC
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
Item Note:   Seller shall provide onsite support, labor and parts associated with the Repair/Rework to the LDC-9 TVC hydraulic
leak at Ft. Greely as documented in NCR # 00202929.
Item Reference:   Undefinitized $88,000 included in item 0002
Item Unit Value:  $0.0000		Value Code:
Period of Performance:  6/30/05 — 9/30/05
Ship This Item Only To:  See Attachment A120 See Attachment A120

Quantity Ordered   1 Scheduled Delivery Date   23-JUN-05

0139 5 EA VHAP1H03*040

1034-0634-002	OSC- CAPABILITY ENHANCEMENT
HQ0006-01-C-0001/HQ0006-01-C-0001	DX-C9	$	0.0000	$	0.0000
Item Note:  Kits for IDC-11, IDC-12, IDC-13, IDC-14, IDC-15
Ship This Item Only To:  See Attachment A120 See Attachment A120

Quantity Ordered 1	Scheduled Delivery Date 14-OCT-05	Original Delivery Date
1	15-FEB-06	18-NOV-05
1	16-MAR-05	16-DEC-05
1	20-APR-06	20-JAN-06
1	17-MAY-06	17-FEB-06

PURCHASE CONTRACT     
CONTINUATION PURCHASE CONTRACT:  101018      REVISION:  89      Page    69 of 75

ITEM	QUANTITY		UM	PART NUMBER				PROJECT CCN
		VENDOR P/N			DESCRIPTION
		CUSTOMER / PRIME CONTRACT NUMBER				PRIORITY RATING	FUNDED UNIT PRICE		FUNDED EXTENDED PRICE
		TRUE MANUFACTURER

0140 1 EA VHA**10**093

	CORK REPAIR AT FT. GREELY LDC 1, 2 AND 6 CLIN0101
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
Item Reference:   Undefinitized $84,000 included in item 0002
Item Unit Value:  $0.0000		Value Code:
Period of Performance:  8/29/05 — 9/30/07

Quantity Ordered   1 Scheduled Delivery Date   22-AUG-05

0141 1 EA VHA**10**093

	PRE-STEP RAIN EROSION TESTING
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
Item Reference:   Definitized $57,490 included in item 0002
Item Unit Value:  $0.0000		Value Code:
Period of Performance:  8/29/05 — 9/30/07

Quantity Ordered   1 Scheduled Delivery Date   22-AUG-05

0142 1 EA VHA**10**093

	DGT REPAIR
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
Item Reference:   Definitized $10,993 included in item 0002
Item Unit Value:  $0.0000		Value Code:
Period of Performance:  9/15/05 — 9/30/07

Quantity Ordered   1 Scheduled Delivery Date   08-SEP-05

PURCHASE CONTRACT     
CONTINUATION PURCHASE CONTRACT:  101018      REVISION:  89      Page    70 of 75

ITEM	QUANTITY		UM	PART NUMBER				PROJECT CCN
		VENDOR P/N			DESCRIPTION
		CUSTOMER / PRIME CONTRACT NUMBER				PRIORITY RATING	FUNDED UNIT PRICE		FUNDED EXTENDED PRICE
		TRUE MANUFACTURER

0143 11 EA VHA**13**199

	GMD GBI PROCUREMENT OF NON-SAASM SIGI?S
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
Item Reference:   Definitized $694,327 included in item 0143
Item Unit Value:  $694,327.0000		Value Code:
Period of Performance:  9/16/05 — 9/30/07

Quantity Ordered   11 Scheduled Delivery Date   09-SEP-05

0144 1 EA VHA**10**093

T4-28 GDIL TESTING USING GTM-4 HQ0006-01-C-0001/HQ0006-01-C-0001 675784	OSC MRTF T4                         DX-C9	$	0.0000	$	0.0000
SOW:   T4-28           SOW Rev:  New
Item Reference:   Undefinitized $813,540 included in item 0002
Item Unit Value:  $0.0000		Value Code:
Period of Performance:  8/29/05 — 9/30/07

Quantity Ordered   1 Scheduled Delivery Date   22-AUG-05

0145 1 EA VHA**10**093

T4 -33 GTM-2 AT FGA HQ0006-01-C-0001/HQ0006-01-C-0001 675784	OSC MRTF T4                         DX–C9	$	0.0000	$	0.0000
SOW:   T4-33           SOW Rev:  New
Item Reference:   Undefinitized $56,925 included in item 0002
Item Unit Value:  $0.0000		Value Code:
Period of Performance:  8/29/05 — 9/30/07

Quantity Ordered   1 Scheduled Delivery Date   29-AUG-05

PURCHASE CONTRACT     
CONTINUATION PURCHASE CONTRACT:  101018      REVISION:  89      Page    71 of 75

ITEM	QUANTITY		UM	PART NUMBER				PROJECT CCN
		VENDOR P/N			DESCRIPTION
		CUSTOMER / PRIME CONTRACT NUMBER				PRIORITY RATING	FUNDED UNIT PRICE		FUNDED EXTENDED PRICE
		TRUE MANUFACTURER

0146 1 EA VHA**10**093

T4-34 NTE FOR GDIL	OSC MRTF T4
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
SOW:   T4-34                    SOW Rev:  New
Item Reference:   Undefinitized $784,471 included in item 0002
Item Unit Value:  $0.0000		Value Code:
Period of Performance:   8/29/05  —  9/30/07

Quantity Ordered   1 Scheduled Delivery Date   29-AUG-05

0147 1 EA VHA**10**093

	OSC-MRTF T3 GTM INERT MOTOR REQUIREMENT CHANGE
HQ0006-01-C-0001/HQ0006-01-C-0001 675784		DX-C9	$	0.0000	$	0.0000
Item Note:   Procurement of inert S/As, frangible rail set and frangible joints. Also includes additional charge to convert flight motors to inert. Applies to GTM-2 and GTM-3.
Item Reference:   Undefinitized $560,000 included in item 0002
Item Unit Value:  $0.0000			Value Code:
Period of Performance:   8/4/05  —  9/30/07

Quantity Ordered   1 Scheduled Delivery Date   28-JUL-05

0148 1 EA VHA**10**093

	OSC CORP-LDC THREAT IMPLEMENTATION (ECP 168)
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
SOW:   LDCSOW                    SOW Rev:  New
Item Reference:   Undefinitized $352,324 included in item 0002
Item Unit Value:  $0.0000		Value Code:
Period of Performance:   7/1/05  —  9/30/07

Quantity Ordered   1 Scheduled Delivery Date   24-JUN-05

PURCHASE CONTRACT     
CONTINUATION PURCHASE CONTRACT:  101018      REVISION:  89      Page    72 of 75

ITEM	QUANTITY		UM	PART NUMBER				PROJECT CCN
		VENDOR P/N			DESCRIPTION
		CUSTOMER / PRIME CONTRACT NUMBER				PRIORITY RATING	FUNDED UNIT PRICE		FUNDED EXTENDED PRICE
		TRUE MANUFACTURER

0149 1 EA VHA**10**093

	OSC PM&P PIND INITIAL AUTHORIZATION
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
SOW:   PM&P/PIND             SOW Rev:  New
Item Reference:   Undefinitized $100,000 included in item 0002
Item Unit Value:  $0.0000		Value Code:
Period of Performance:  6/28/05 — 10/31/05

Quantity Ordered   1 Scheduled Delivery Date   21-JUN-05

0150 1 EA VHA**10**093

		ECU VOLTAGE TESTING
HQ0006-01-C-0001/HQ0006-01-C-0001 675784		DX-C9	$	0.0000	$	0.0000
Item Note:	Perform additional testing and gather test data in the current GMD silo configuration with power supply voltage
	increases to 80V. Evaluate data and provide assessment of increased voltage. Tests will be performed at 40V, 50V, 60V, 70V and 80V.
Item Reference:  Definitized $8,932 included in Item 0002
Item Unit Value:  $0.0000		Value Code:
Period of Performance:  9/6/05 — 9/30/07

Quantity Ordered   1 Scheduled Delivery Date   30-AUG-05

PURCHASE CONTRACT     
CONTINUATION PURCHASE CONTRACT:  101018      REVISION:  89      Page    73 of 75

ITEM	QUANTITY		UM	PART NUMBER				PROJECT CCN
		VENDOR P/N			DESCRIPTION
		CUSTOMER / PRIME CONTRACT NUMBER				PRIORITY RATING	FUNDED UNIT PRICE		FUNDED EXTENDED PRICE
		TRUE MANUFACTURER

0151 1 EA VHAP1H03*040

	MRTF ? GSE FOR GTM 4
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
Item Note:   Add to MRTF Task T3-18 for GTM-4:  One (1) set of Vehicle support Chocks required for permanent storage of the   vehicle. Chocks (1 set) - - P/N 83344J00727 (2), 83344J00728 (1) and 83344J00729 (1).
Item Reference:  Undefinitized $35,459 included in item 0078
Item Unit Value:  $0.0000		Value Code:
Period of performance:  9/19/05 — 9/30/07

Quantity Ordered   1 Scheduled Delivery Date   12-SEP-05

0152 1 EA VHA**10**093

	MRTF ? GSE FOR GTM 2, 3 & 5
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
SOW:  GSEGTM235      SOW Rev:  New
Item Reference:  Undefinitized $256,452 included in item 0002
Item Unit Value:  $0.0000		Value Code:
Period of performance:  9/19/05 — 9/30/07

Quantity Ordered   1 Scheduled Delivery Date   12-SEP-05

PURCHASE CONTRACT     
CONTINUATION PURCHASE CONTRACT:  101018      REVISION:  89      Page    74 of 75

ITEM	QUANTITY		UM	PART NUMBER				PROJECT CCN
		VENDOR P/N			DESCRIPTION
		CUSTOMER / PRIME CONTRACT NUMBER				PRIORITY RATING	FUNDED UNIT PRICE		FUNDED EXTENDED PRICE
		TRUE MANUFACTURER

0153 1 LT VHA**10**093

		LONG LEAD MATERIAL 4 OBVS
HQ0006-01-C-0001/HQ0006-01-C-0001 675784		DX-C9	$	0.0000	$	0.0000
Item Note:  Seller is authorized to procure for 4 OBV boost vehicles Nozzle Manufacturing materials and effort, Adapter and Bearing Ring Forgings to support Case Manufacturing, Case Forging, Nozzle Forging, Attachment Ring Forging and Flexsel Forging.
Item Reference:  Undefinitized $3,600,000 included in item 0002
Item Unit Value:  $0.0000	Value Code:
Period of Performance:  11/17/05 — 5/01/06

Quantity Ordered   1 Scheduled Delivery Date   01-MAY-06

0154 1 EA VHA**12**385

	CRS-125 TEST EQUIPMENT REPAIR
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9		$	0.0000	$	0.0000
Item Note:  This test rack is used in the qualification and acceptance testing of the CR-125’s for both the OBV’s and BV+’s. This requires the return of the test rack back to full up condition with repairs to the signal generator and power supply and raplaces the printer.
Item Reference:  The $13,500 is undefinitized
Item Unit Value:  $13,500.0000		Value Code:
Period of Performance:  01/15/2006 — 02/15/2006

Quantity Ordered   1 Scheduled Delivery Date   10-OCT-05

PURCHASE CONTRACT     
CONTINUATION PURCHASE CONTRACT:  101018      REVISION:  89      Page    75 of 75

ITEM	QUANTITY		UM	PART NUMBER				PROJECT CCN
		VENDOR P/N			DESCRIPTION
		CUSTOMER / PRIME CONTRACT NUMBER				PRIORITY RATING	FUNDED UNIT PRICE		FUNDED EXTENDED PRICE
		TRUE MANUFACTURER

0155 1 EA VHA**10**093

	SHROUD TEST FOR 6 DOF
HQ0006-01-C-0001/HQ0006-01-C-0001 675784	DX-C9	$	0.0000	$	0.0000
Item Note:  Perform Shroud Test for 6 Degrees of Freedom
Item Reference:  Definitized $600,000 included in item 0002
Item Unit Value:   $0.0000		Value Code:
Period of Performance:  10/5/05 — 9/30/07

Quantity Ordered   1 Scheduled Delivery Date   28-SEP-05

EX-10.22

exv10w22

EX-10.28

Exhibit 10.28

2006 Non-Employee Director Compensation Program

     The following is a summary of the compensation arrangements for Orbital’s non-employee directors effective January 1, 2006:

Annual Retainers and Meeting Fees*:

– Annual retainer of $30,000

– Annual retainer of $5,000 for the chairperson of each standing committee for up to one standing committee per year

– Annual retainer of $1,000 for each non-chair member of each standing committee for up to two standing committees per year

– Annual retainer of $10,000 for the lead independent director

– $1,000 for each Board meeting attended in person in excess of five meetings per year

– A pro-rated amount up to $1,000 for each Board meeting held telephonically based on the length of such meeting

– $1,000 for each committee meeting attended in person

– $500 for each committee meeting held telephonically

*The annual retainers and meeting fees are payable in cash or shares of restricted common stock at the non-employee director’s election. The restricted common stock grants are issued under our 1997 Stock Option and Incentive Plan and have a two-year vesting term.

Stock Purchase Matching Program:

– Orbital matches a non-employee director’s purchase of up to $10,000 worth of common stock in the open market in a calendar year with a grant of restricted common stock that vests in its entirety two years from the date of grant.

Annual Stock Option Grant:

– Under Orbital’s 1997 Stock Option and Incentive Plan, on the first business day in January, each non-employee director receives an automatic annual grant of 5,000 options to purchase common stock at an exercise price equal to the fair market value on the date of grant. All of the option grants vest in their entirety one year from the date of grant.

EX-12

Exhibit 12

COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES

	Years ended December 31,
	2005		2004		2003			2002		2001 (a)
Earnings—
Pre-tax income (loss) from continuing operations	$	45,783	$	44,128	$	19,972		$	13,950	$	(95,614	)
Add: Allocated (gains) losses of equity investees		—		—		(40,586	)		—		26,495
Fixed charges		16,649		18,449		62,324			22,824		26,100
Amortization of capitalized interest		48		180		180			182		222
Less: Interest capitalized		—		—		—			—		—
Earnings	$	62,480	$	62,757	$	41,890		$	36,956	$	(42,797	)
Fixed Charges—
Interest costs	$	11,746	$	11,386	$	18,683		$	17,450	$	21,671
Debt extinguishment expense		—		2,099		38,836			—		—
Portion of rental expense representative of interest factor		4,903		4,964		4,805			5,374		4,429
Fixed Charges	$	16,649	$	18,449	$	62,324		$	22,824	$	26,100
Ratio of Earnings to Fixed Charges		3.8		3.4		0.7			1.6		—

(a) For the year ended December 31, 2001, earnings were inadequate to cover fixed charges by approximately $68.9 million.

EX-23

Exhibit 23

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (Nos. 333-84296, 333-62277, 333-64517, 333-53585, 333-69887, 333-69885, 333-27999, 333-59470, 333-59474, 333-105341 and 333-124807) and Form S-3 (Nos. 333-59402 and 333-101329) of Orbital Sciences Corporation of our report dated March 2, 2006, relating to the financial statements, financial statement schedule, management’s assessment of the effectiveness of internal control over financial reporting and the effectiveness of internal control over financial reporting, which appears in this Form 10-K.

PricewaterhouseCoopers LLP
McLean, Virginia
March 2, 2006

EX-31.1

Exhibit 31.1

CERTIFICATION

I, David W. Thompson, Chairman and Chief Executive Officer, certify that:

1.	I have reviewed this annual report on Form 10-K of Orbital Sciences Corporation;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

(a)	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)	evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 3, 2006

/s/ David W. Thompson

David W. Thompson

Chairman and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Garrett E. Pierce, Vice Chairman and Chief Financial Officer, certify that:

1.	I have reviewed this annual report on Form 10-K of Orbital Sciences Corporation;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

(a)	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)	evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 3, 2006

/s/ Garrett E. Pierce

Garrett E. Pierce

Vice Chairman and Chief Financial Officer

EX-32.1

Exhibit 32.1

Written Statement of Chairman and Chief Executive Officer
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350)

     The undersigned, the Chairman and Chief Executive Officer of Orbital Sciences Corporation (the “Company”), hereby certifies that, to his knowledge, on the date hereof:

(a)	the Annual Report on Form 10-K of the Company for the Year Ended December 31, 2005 filed on the date hereof with the Securities and Exchange Commission (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(b)	information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ David W. Thompson

David W. Thompson

Chairman and Chief Executive Officer

March 3, 2006

     A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

Written Statement of Vice Chairman and Chief Financial Officer
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350)

     The undersigned, the Vice Chairman and Chief Financial Officer of Orbital Sciences Corporation (the “Company”), hereby certifies that, to his knowledge, on the date hereof:

(a)	the Annual Report on Form 10-K of the Company for the Year Ended December 31, 2005 filed on the date hereof with the Securities and Exchange Commission (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(b)	information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Garrett E. Pierce

Garrett E. Pierce

Vice Chairman and Chief Financial Officer

March 3, 2006

     A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.