Quarterly News Update

4 October 2005

                    QUARTERLY NEWS UPDATE FROM ROLLS-ROYCE                    
                          THIRD QUARTER REVIEW, 2005                           

The third quarter began with the publication of the 2004 Interim Results, in
which the highlights included a record order book at £21.9 billion and a 14 per
cent increase in Group sales, on an underlying basis, to £3,184 million.
Service revenues continued to grow, and now generate 55 per cent of total
revenues.

Underlying profit before tax increased to £260 million, up 54 per cent on a
like for like basis. Average net debt reduced to £377 million and the interim
payment to shareholders increased by five per cent.

The increasingly international nature of Rolls-Royce and its portfolio of
products and services was illustrated by a number of significant development in
the United States during the quarter.

Northwest Airlines, the fourth largest carrier in the world, selected the Trent
1000 - the first time it has chosen a Rolls-Royce aero engine - for up to 36
Boeing 787 Dreamliners, for entry into service from 2008. These will also be
the first Trent 1000s to be operated by a US carrier. The total deal, including
a TotalCareâ„¢ agreement, is worth $2 billion to Rolls-Royce.

The GE Rolls-Royce Fighter Engine Team received a full $2.4 billion System
Development and Demonstration (SDD) contract, worth around $1 billion to
Rolls-Royce, for the interchangeable F136 engine for the Joint Strike Fighter.
The contract includes production of 14 engines and continues until 2013,
preparing the way for full production of engines.

The latest Rolls-Royce marine gas turbine, the most powerful in the world, has
passed a crucial milestone in the programme to power a next-generation US Navy
warship. The MT30, the product of world-leading Trent aero engine technology,
has been activated for the first time for its first customer Northrop Grumman,
prime contractor for the US Navy's DD(X) destroyer.

In addition, the two MT30 gas turbines that will power USS Freedom, the first
US Navy Littoral Combat Ship, have been delivered to the Marinette Marine
Corporation shipyard. The ship, which will also feature Rolls-Royce Kamewa
waterjets and shafts as well as Michell bearings, is being built for Lockheed
Martin and will be delivered to the Navy in late 2006.

Other business highlights during the quarter:

Civil

  * LOT Polish Airlines has become the first European customer, and the fourth
    worldwide, to choose the Trent 1000 engine to power its Boeing 787
    Dreamliners. The deal is for engines to power seven aircraft on firm order,
    plus a further two options and five purchase rights. In addition, the
    engines will be maintained under a 15-year TotalCareâ„¢ services agreement.
   
  * Rolls-Royce delivered its 1000th BR710 engine to Gulfstream for its G550
    long-range business jet. The BR710 engine, which was certificated in 1996,
    has achieved more than 1.5 million flying hours and over 600,000 flight
    cycles at a dispatch reliability that currently stands at 99.99 per cent.
   
  * LAN Airlines of Chile selected IAE V2500 engines to power up to 40 Airbus
    A320 family aircraft. The order is made up of 18 firm and 22 options. The
    airline has also selected a long-term Fleet Hour Agreement
    (FHA) to cover the fleet expansion. This announcement is in addition to
    the 20 V2500-powered Airbus A320 aircraft already ordered by LAN
    Airlines from IAE (which is 32.5% owned by Rolls-Royce).
   
Defence

  * Rolls-Royce has been awarded a £48 million contract to support the UK's
    fleet of AE 2100 engines that power the advanced C-130J Hercules aircraft.
    The contract is effective from July 2005 and extends to March 2008.
   
  * Rolls-Royce has been awarded a $19 million contract to produce 100 Infrared
    Exhaust Suppressors to be fitted to US Special Operations Command MH-47
    Chinook helicopters. These are designed to reduce engine heat signature, so
    diminishing vulnerability to heat-seeking missile attacks. Engineering and
    programme management will be conducted at the Indianapolis-based research
    and development unit, Rolls-Royce North American Technologies Inc (or the
    "LibertyWorks"), formerly known as Allison Advanced Development Company
    (AADC).
   
  * In an important milestone for EPI Europrop International GmbH (EPI),
    Rolls-Royce has delivered the first High-Pressure Compressor (HPC) for the
    TP400-D6 engine. The compressor will form the core of the largest modern
    turboprop engine in the world which will power the Airbus A400M military
    transport aircraft. Design and development of the HPC has been undertaken
    at Rolls-Royce facilities in Germany and the UK, with final assembly taking
    place at the company's centre for compressor development at Dahlewitz,
    outside Berlin.
   
  * The LHTEC T800 turboshaft engine, developed in partnership with Honeywell,
    has been chosen as one of three engines for further evaluation in support
    of the Korean Helicopter Program (KHP). Final engine selection is expected
    later this year.
   
  * The Model 250 turboshaft engine has logged orders from Russian helicopter
    maker Kamov (50 engines) for the Ka-226 and PZL-Swidnik (10 engines) of
    Poland for the SW-4 helicopter. Both companies have also signed agreements
    with Rolls-Royce to explore further opportunities on the Model 250.
   
  * As part of its separate involvement in the STOVL (Short Take-Off Vertical
    Landing) variant of the Joint Strike Fighter, Rolls-Royce has completed the
    first Variable Area Vane Box Nozzle (VAVBN). This is the first hardware in
    the aircraft assembly sequence and, once installed, is never removed
    throughout the service life (typically 8,000 flight hours or 30 years). The
    company also announced that it had completed more than 3,000 hours of STOVL
    testing for the JSF programme.
   
  * Rolls-Royce has joined Kelly Aviation Center in San Antonio, Texas, as a
    minority partner to assist with service of T56 engines on U.S. Air Force
    aircraft. Other partners in the joint venture include Lockheed Martin and
    General Electric. The new partnership expands the Rolls-Royce role in
    aftermarket services for defense.
   
Marine

  * The US Navy's Office of Naval Research has unveiled its new advanced
    electric-ship demonstrator ship, SEA JET, for the first time. The ship will
    test Rolls-Royce patented AWJ-21â„¢ waterjet technology over the next six
    months on Lake Pend Oreille at the Navy's Acoustic Research Department in
    Bayview, Idaho.
   
  * The first deliveries of the new S3-series Kamewa waterjets have been agreed
    with the shipyard Overmarine in Italy. Rolls-Royce will deliver two
    steerable and reversible Kamewa waterjets size 63S3 to propel a fast
    superyacht in Overmarine's Mangusta 108 series. Previously 17 vessels of
    the Mangusta 108 series have been delivered with the SII-series.
   
Energy

  * Sharjah Electricity and Water Authority has chosen the Trent 60 to power
    the latest phase of the Wasit power plant expansion. Two Trent 60 dual-fuel
    generating sets, with a combined output of nearly 80MW operating at 40
    degrees C, will be used to help meet the fluctuating demand for critical
    power in this region of the United Arab Emirates. The units are expected to
    be operational in early 2007.
   
  * Six RB211 industrial gas turbine power generation units have been ordered
    to provide electrical power for a Floating Production, Storage and
    Offloading (FPSO) vessel operated by Total Upstream Nigerian Limited. Under
    the $82 million contract, six RB211 gensets will provide 100MW of
    electrical power needed to develop 22 oil and gas production, 20 water
    injection and two gas injection wells in the Akpo field 200 km offshore
    Nigeria.
   
  * Rolls-Royce continues to strengthen its position in important Asian energy
    markets with three new orders. The first order is for two RB211 gas
    compression packages for the Arthit offshore platform in the Gulf of
    Thailand. Operated by PTT Exploration and Production Public Company Ltd.,
    the two units will deliver gas to PTT's onshore gas separation plant via a
    transmission pipeline.
   
A second Thai order is for three RB211 Dry Low Emissions mechanical
drive packages for an onshore compressor station at Rayong, operated by
PTT Public Company Ltd. The units will drive compressor trains for
onshore gas transmission and will increase pipeline capacity to help meet
future growth demands for gas in Thailand.

In Malaysia, the national petroleum company, PETRONAS, has
contracted for an RB211 gas compressor package to be installed at its
Segamat compression station. It will operate alongside two other RB211
packages installed there in 1997. The order also includes upgrades to the
two existing compressors and control system.

For further information please contact:

Duncan Campbell-Smith
Director - Corporate Communications
Rolls-Royce plc
Tel: [phone]
email: [e-mail]