Quarterly News Update

4 April 2007

                    QUARTERLY NEWS UPDATE FROM ROLLS-ROYCE:                    
                          FIRST QUARTER REVIEW, 2007                           

Rolls-Royce, a world-leading provider of power systems and services, has made
strong progress in the first quarter of 2007, securing new engine business and
continuing to grow its services revenues.

The Group announced its Preliminary Results for 2006 in February with
underlying sales growth of 14 per cent and an increase in underlying profit
before tax of 19 per cent to £705 million (2005 £593 million). The Group's
ability to win business in growing and global markets resulted in an increase
in the order book to £26.1 billion (2005 £24.4 billion)

Finnair became the first customer for the Trent XWB, the engine being developed
for the Airbus A350 XWB airliner. The Finnish flag carrier will use the sixth
and latest member of the Trent family to power 11 of the new twinjets on firm
order, with options for four more aircraft.

British Airways selected the Trent 800 to power up to eight additional Boeing
777-200 twinjets. The deal is potentially worth $320 million to Rolls-Royce at
list prices. Engine maintenance will be covered by an extension of the
airline's existing TotalCare agreement. British Airways already operates 16
Trent powered 777 aircraft.

Rolls-Royce announced its newest helicopter engine, the RR300, for the new R66
helicopter from launch customer, Robinson Helicopter Company, the world's
leading manufacturer of civil helicopters. Discussions are also taking place
with Enstrom Helicopters, MD Helicopters and Schweizer Aircraft over future
applications of the RR300.

A decision of major strategic importance for the Group's marine business was
the US Navy's selection of four MT30 gas turbine generator sets for the first
two ships in a new class of advanced surface combatant ship, the DDG-1000
Zumwalt Class destroyer. This is the second U.S. Navy programme to feature the
MT30 as it has already been selected to power the first two Lockheed Martin
Littoral Combat Ships.

Both the civil and defence aerospace businesses announced significant new
services activities.

A Memorandum of Understanding (MoU) was signed with BAE Systems to work
together to improve support to the UK Ministry of Defence (MoD) and other
worldwide customers, by building on two successful availability contracts for
the UK's RB199-powered Tornado fleet.

Long-term service agreements were signed in Asia and the US. A TotalCare®
agreement with Singapore Airlines covers the Trent 800 engines powering its
fleet of 58 Boeing 777s. The contract is in addition to a similar maintenance
deal for Trent 500 engines on the airline's A340-500 aircraft.

Rolls-Royce now has aftermarket agreements in place with all branches of the US
military, including the Coast Guard, following the signing of two contracts,
worth up to $235 million over five years, with the US Air Force for propulsion
aftermarket services and spares for C-130J military transport aircraft.

In the energy sector, the Group's fuel cell business acquired the assets of
US-based SOFCo-EFS Holdings LLC from McDermott International Inc.. SOFCo-EFS
has proven expertise in fuel processing technologies and undertakes advanced
research and development in solid oxide fuel cell stacks and system
integration.

Other business highlights include:

Civil Aerospace

  * Florida-based Spirit Airlines selected V2500 engines for 30 Airbus A319
    twinjets, providing Rolls-Royce with a $200 million share of the order. The
    V2500 is produced by the International Aero Engines consortium, in which
    Rolls-Royce is a senior partner.
   
  * Rolls-Royce and Brazil's Embraer celebrated the delivery of the 2,000th
    AE3007 engine, which for a decade has powered the ERJ family of regional
    jets, and the Legacy Business Jet. In Canada, Rolls-Royce marked the
    delivery of the 500th BR710 engine, to Bombardier. BR710s power Global 5000
    and Global Express XRS business jets.
   
  * As flight testing and route proving of the Trent 900-powered Airbus A380
    continues, the A380 has added the United States and Hong Kong to its list
    of destinations. An A380 also flew over the Rolls-Royce site in Derby, UK
    as a "thank you" to employees before flying to Bristol for a similar fly
    past at Airbus and Rolls-Royce facilities.
   
Defence

  * The Australian Department of Defence selected the Rolls-Royce Turbomeca
    RTM322 to power another 34 MRH90 Multi-Role Helicopters, bringing the total
    number of RTM322 engines ordered by Australia to 92. Over 90 per cent of
    NH90 operators have selected the RTM322 engine.
   
  * The annual Rolls-Royce 10-year helicopter industry forecast predicted a
    rise in turbine-powered helicopter deliveries to around 15,000 helicopters,
    worth around $144 billion, over the 2007-2016 period. The value of total
    engine business for these helicopters is forecast at around $15 billion.
    The increase is due to a significant number of new military requirements
    together with increased opportunities in emerging markets such as India,
    Russia and China.
   
  * Singapore will this summer receive the first of four Gulfstream G550
    Compact Airborne Early Warning (CAEW) aircraft, powered by the Rolls-Royce
    BR710. Support for the engines will be provided through Mission Ready
    Management Solutions (MRMS).
   
Marine

  * Rolls-Royce strengthened its position in South America as a
    supplier of ship designs and equipment packages for offshore vessels with
    contracts for six platform supply vessels worth around £45 million. The
    contracts included the first offshore orders from Chile.
   
  * A new coastguard vessel for the Icelandic government will be
   
designed by Rolls-Royce and will include a full equipment package.

  * The first of two coastal protection vessels designed and equipped by
    Rolls-Royce was handed over to Spain's maritime safety authority (SASEMAR).
   
Energy

  * Three RB211 gas turbine packages will power a new Mediterranean sub-sea
    pipeline to transport natural gas from Algeria to Spain under a $58 million
    contract with MEDGAZ. The gas line, scheduled for completion in 2009, will
    carry gas for 200 kilometres on the seabed from the coastal city of Beni
    Saf in Algeria to the Spanish province of Almeria.
   
Operations and technology

  * Rolls-Royce supported the launch of a new National Skills Academy for
    Manufacturing. The `virtual' academy, one of a network of academies aimed
    at improving productivity and tackling skills shortages in key sectors of
    the UK economy, will deliver quality-assured courses, qualifications and
    providers wherever training and development are needed. Improved skills
    levels should contribute to the creation of more high value-added
    manufacturing jobs.
   
  * Two strategic technology partnerships have been established with the
    University of Birmingham - in casting technology and process modelling.
   
The new partnerships build on an existing Rolls-Royce funded
University Technology Centre (UTC) in Materials, based in
Birmingham since 1991.

For images please go to:

http://www.rolls-royce.com/media/gallery/default.jsp

For further information please contact:

Caroline Harris
Tel: [phone]
[e-mail]

Martin Brodie
Tel: [phone]
[e-mail]