Re Agreement

13 October, 2004

         ROLLS-ROYCE ANNOUNCES FURTHER JAPANESE PARTNER ON TRENT 1000          

Rolls-Royce announced today (13 October) that Japan's Kawasaki Heavy Industries
(KHI) is to be a risk and revenue sharing partner (RRSP) on the Trent 1000
engine being developed for the Boeing 7E7 Dreamliner.

KHI, which will be responsible for the supply and assembly of the intermediate
pressure compressor module, will have an 8.5 per cent share in the programme.
It may also carry out part of the engine testing programme on the Trent 1000.

KHI will play a leading role in the design of its components, with teams based
in Derby, UK, and Japan.

Earlier today, it was announced that 7E7 launch customer ANA (All Nippon
Airways) of Japan had chosen the Trent 1000 to power its fleet of 50
Dreamliners. Air New Zealand, the only other airline to make an engine
selection for the 7E7 so far, also opted for Rolls-Royce.

Charles Cuddington, Managing Director - Airlines, at Rolls-Royce, said: "This
agreement with KHI extends a long and valued relationship with Rolls-Royce. KHI
makes a major contribution to the success of other members of the Trent family,
and we look forward to building on that excellent record through KHI's central
role on the Trent 1000."

KHI's links with Rolls-Royce span more than 40 years and include participation
in marine, energy and defence activities as well as civil aerospace. KHI is a
risk and revenue sharing partner on the Trent 500, Trent 700 and Trent 800, and
a programme associate on the Trent 900. It also has a joint interest through
the RB211 engine series.

Last month, Rolls-Royce announced that Japan's Mitsubishi Heavy Industries
(MHI) would be a risk and revenue sharing partner on the Trent 1000 engine,
taking a 7 per cent share in the programme by supplying the combustor and low
pressure turbine blades. Rolls-Royce is in continuing discussion with other
potential Trent 1000 RRSPs.

Preliminary design on the Trent 1000 is due to be completed by the end of this
year. The first development engine is scheduled to run in 2006, with engine
certification by the airworthiness authorities coming in 2007. The Boeing 7E7
is due to enter service in 2008.

Corporate note to editors

Rolls-Royce operates in four global markets - civil aerospace, defence
aerospace, marine and energy. It invests in technology and capability that can
be exploited in each of these sectors to create a competitive range of
products.

The success of these products is demonstrated by the company's rapid and
substantial gains in market share over recent years. The company now has a
total of 54,000 gas turbines in service worldwide. The investments in product,
capability and infrastructure to gain this market position create high barriers
to entry.

Rolls-Royce has a broad customer base comprising more than 500 airlines, 4,000
corporate and utility aircraft and helicopter operators, 160 armed forces and
more than 2,000 marine customers, including 50 navies. The company has energy
customers in nearly 120 countries. Rolls-Royce employs around 35,000 people, of
which 21,000 are in the UK. Forty per cent of its employees are based outside
the UK - including 5,000 in the rest of Europe and 8,000 in North America.

The large installed base of engines generates demand for the provision of
services. A key element of the company's strategy is to maximize services
revenues, which have increased by 60 per cent over the past five years, by the
provision of a comprehensive portfolio of services.

Annual sales total nearly £6 billion, of which more than 50 per cent are
services revenues. The order book is more than £19 billion, which, together
with demand for services, provides visibility as to future activity levels.

For further information contact:

Martin Johnson

Vice President, Communications

Rolls-Royce

PO Box 31

Derby DE24 8BJ

UK

Tel: [phone]

Fax: [phone]

Email: [e-mail]