Quarterly News Review

3 April, 2008

          QUARTERLY NEWS REVIEW FROM ROLLS-ROYCE: FIRST QUARTER, 2008          

During the first quarter of 2008, Rolls-Royce demonstrated the value of its
broad portfolio and of its consistent strategy of investing in technology and
capability and access to global markets .

The continuing strength of the market was underlined by the announcement of
around $14.7 billion of new business in the first three months of 2008. This
included firm and option orders plus long-term service agreements worth $14.4
billion for the Trent engine family, already making 2008 the company's second
most successful year for Trent orders.

A major milestone was also reached in Trent production with the groundbreaking
of the new $225 million `Facility of the Future' in Singapore. This will be the
most modern Rolls-Royce production assembly and test facility for large
commercial aero engines. It will also be its first such facility in Asia,
bringing Rolls-Royce closer to customers, including its long-term partner
Singapore Airlines, whose future fleet will include engines assembled locally.

The Trent 700, the first member of the Trent family to enter service, continued
to demonstrate competitive advantage, retaining its leading position on the
A330 with a 53 per market share. It won $6.4 billion of business during the
quarter, with orders and options for up to 192 engines, all covered by
long-term service agreements. This included the AirTanker consortium's winning
bid in March to power the UK Ministry of Defence's new fleet of 14 Airbus A330
tanker aircraft. Rolls-Royce will not only supply Trent 700s but will also
provide full support for the engines. Its share of this contract is estimated
to be worth more than £700 million over the programme's 27-year life.

Growing success in international markets was illustrated by the marine
business's first offshore contract in China, worth £58 million. Rolls-Royce
will design and equip two of its UT 788 offshore support vessels for China
Oilfield Services Ltd.

The company's product portfolio continued to expand, with the launch in March
of the BR725, its fourth new engine launch in just over 12 months. The engine
will power Gulfstream's new flagship corporate jet, the G650, in a sector where
Rolls-Royce is already the world's leading supplier with a 34 per cent share of
the market. The engine combines proven features of the BR700 and Trent engine
families with new technologies derived from the Group's `Vision' technology
acquisition programmes.

Another new engine programme, the RR300 gas turbine for Robinson Helicopters'
new R66, became the first engine to roll off the newly-commissioned small
engine assembly line at the Rolls-Royce facility in Indianapolis, US. The
engine has also received both FAA Type and Production Certification ahead of
schedule.

In January, Rolls-Royce took a further step in its continuing programme to
improve its global efficiency and competitiveness. Proposals were announced to
improve the efficiency of its overhead structure by reducing managerial,
professional and clerical staff by up to 2,300 on a worldwide basis.

In February, Rolls-Royce announced its Preliminary Results for 2007, reporting
strong progress during the year. The company delivered underlying sales and
profit growth across all businesses and good cash flow, despite the continuing
challenges of a weak US dollar and increased unit costs. The order book
increased by 76 per cent to a record £45.9 billion at the end of December as a
result of a strong order intake across all businesses. Underlying sales
increased by six per cent to
£7,817 million and underlying profit before tax increased by 13 per cent to
£800 million (2006 £705 million).

The Group will issue its interim management statement at the Annual General
Meeting on 7 May 2008.

Business highlights

Civil Aerospace

  * Value of orders. Announced orders during the quarter were worth around $13
    billion.
   
  * Trent 700 orders. The largest single order was from US Airways for Trent
    700s to power up to 30 A330-200s twinjets. THAI Airways International
    selected the engine for a new fleet of eight Airbus A330s, while an order
    from Hong Kong Airlines involved 20 aircraft, entering service from 2010.
    Oman Air chose the Trent 700 for seven aircraft and Turkey's leading cargo
    carrier, MNG Airlines, for up to three aircraft. An order from EgyptAir
    involved up to eight A330s. MatlinPatterson Global Advisers LLC selected
    Trent- powered A330 freighters, with the six aircraft being leased to
    MatlinPatterson portfolio companies. All the Trent 700s are covered by
    TotalCare agreements.
   
  * Trent XWB orders. Taiwan's China Airlines, Synergy Aerospace of South
    America and Bangkok Airways ordered new A350 XWB fleets with Trent XWB
    engines. China Airlines and Synergy will each take up to 20 aircraft ,
    including Trent TotalCare agreements, while the Bangkok order was for up to
    six twinjets. Rolls-Royce has now been selected to power 409 A350 XWB
    aircraft, for which it is the only engine currently available.
   
  * Trent 1000 orders. Business worth $2.6 billion was announced with Virgin
    Atlantic for Trent 1000 engines to power up to 43 Boeing 787 Dreamliners.
    The arrangement includes a full-life TotalCare agreement which will be used
    to develop an environmental partnership to find ways of improving engine
    performance to reduce the airline's carbon footprint. Spain's Air Europa
    and Latin American carrier LAN Airlines SA also selected the Trent 1000,
    with TotalCare packages, for their 787s. Air Europa's order involved eight
    firm aircraft, while LAN selected the Trent 1000 for six aircraft to be
    leased from International Lease Finance Corporation (ILFC). Air Astana,
    Kazakhstan's national airline, selected Trent 1000 engines for up to six
    787-8s.
   
  * Trent 500 orders. Iberia ordered an additional three firm and three option
    Airbus A340-600s, for which the Trent 500 is the sole engine. The follow-on
    order, with a TotalCare agreement, could see Iberia's A340-600 fleet grow
    to 19 aircraft.
   
  * Trent 900 orders. Singapore Airlines inaugurated its Singapore - London
    Airbus A380 service on 18 March. Earlier, it placed a follow-on order for
    Trent 900s for an additional nine firm A380s, bringing its fleet to 19
    aircraft. All the Trent 900s will be maintained by Rolls-Royce through
    TotalCare.
   
  * New record for CorporateCare packages. This was set in 2007 with 194 engine
    maintenance management contracts. More than 700 corporate aircraft are now
    under the company's management programmes.
   
Defence

  * Value of orders. Announced orders during the quarter were worth around $1.5
    billion.
   
  * Future Strategic Tanker Aircraft (FSTA). The £13 billion contract to the
    AirTanker consortium could be worth more than £700 million to Rolls-Royce,
    which is a shareholder and sub-contractor to AirTanker. Rolls-Royce will
    build Trent 700 engines for the A330-200 tankers, as well as providing
    Mission Ready Management Solutions support for the propulsion system over
    the 27-year life of the programme.
   
  * AE2100D3 for Canada. Rolls-Royce has been selected as the propulsion system
    provider for the Canadian Air Force's fleet of 17 Lockheed Martin C-130J
    tactical lift aircraft powered by AE2100D3 advanced turboprop engines.
    Value of the business is more than $135 million, excluding 20-year
    in-service support. Aircraft delivery is scheduled for 2010.
   
  * TP400-D6 update. Europrop International (EPI) delivered the last of the
    four TP400-D6 flight test engines to power the first Airbus A400M and
    reached the milestone of 1,000 hours of engine ground testing. Installation
    of engines on the first flight test aircraft is now underway.
   
  * Heli-Expo round-up. Announcements included the delivery of the 30,000th
    Model 250 engine and the 35,000 flight hour milestone for the LHTEC family
    of CTS800 engines. Rolls-Royce also released its annual ten-year forecast
    of worldwide turbine helicopter deliveries which projects 15,711 turbine
    helicopters, valued at $141 billion and $13.3 billion, for engines over the
    period 2008-2017.
   
  * F136 progress. The GE Rolls-Royce Fighter Engine Team successfully
    completed the Critical Design Review, which validated the design of the
    F136 engine for the F-35 Lightning II. High-altitude afterburner tests on
    an F136 engine at the US Air Force Arnold Engineering Development Center
    were completed. A second test engine continues running at a new GE testing
    facility near Cincinnati, US. The F136 has achieved more than 600 hours of
    full-engine testing and is currently fully funded by the US Government for
    FY2008.
   
Marine

  * Value of orders. Announced orders during the quarter were worth around $116
    million.
   
  * First China offshore order. Rolls-Royce won its first contract from China,
    worth £58 million, for design and equipment systems for offshore support
    vessels. China Oilfield Services Ltd (COSL) will operate two UT 788 CDs,
    the world's most advanced vessels in support of oil and gas exploration and
    production.
   
  * Vietnam agreement. A memorandum of understanding (MoU) was signed with
    Vietnam Shipbuilding Industry Group (Vinashin) in Hanoi under which the two
    companies will work together to help develop Vietnam's fast-growing marine
    industry.
   
Energy

  * Value of orders. Announced orders during the quarter were worth more than
    $150 million.
   
  * Milan milestone. The company's largest contract for gas engines, valued at
    $38 million, for nine high-efficiency Bergen B-Gas engines to power three
    power stations in the Italian city of Milan, was received from AEM SpA, a
    leading electrical power provider.
   
  * New Petrobras order. The Brazilian state oil company, Petrobras, ordered an
    additional four industrial RB211 gas turbine power generation packages,
    valued at $73 million, for use on its new P-56 offshore platform.
   
  * RB211s for paper power. Two contracts from paper manufacturers in Spain and
    Portugal were received for RB211-GT61 gas turbine powered electrical
    generating sets to be used in co-generation plants. Both are covered by
    ten-year TotalCare service agreements.
   
  * More Avon 200s. Dubai Petroleum is upgrading a further six industrial Avon
    gas generators, following a previous order for four conversions to the Avon
    200 standard, all for offshore platforms in the Fateh gas field.    

  * Airport power. A 10 MW electrical tri-generation power plant powered by
    Bergen K-gas engines for Istanbul's Atatürk airport was the third order
    received in four months to power a major international airport.
   
Technology

  * First Asian UTC. The first Rolls-Royce University Technology Centre (UTC)
    in Asia opened at Pusan National University (PNU) in Busan, South Korea. It
    will focus on thermal management, particularly the development of
    high-efficiency lightweight heat exchangers. These offer potentially large
    environmental benefits as the pressure increases on industry to address
    climate change.
   
  * Clean Sky launch. Europe's largest-ever aerospace research programme,
    "Clean Sky" - in which Rolls-Royce is an industrial partner - has been
    launched in Brussels. This joint technology initiative, which targets a
    sustainable air transport industry, will run for seven years with a budget
    of €1.6 billion. Rolls-Royce will lead certain projects within the
    Sustainable and Green Engine demonstrator programmes.
   
Corporate responsibility

  * Project Enthuse. Rolls-Royce is one of the industry partners contributing
    towards the UK's Project Enthuse, a new £30 million partnership between the
    private, public and charitable sectors to offer much needed training to
    science teachers, enabling the UK to produce the next generation of
    world-class scientists. It will be linked to the company's prestigious
    Science Prize programme.
   
For further information please contact:

Mark Alflatt
Director of Financial Communications
Tel: [phone]
[e-mail]