Re Contract

HONEYWELL AND ROLLS-ROYCE JOINT VENTURE CTS800-4 TURBOSHAFT ENGINE TO POWER  
                                  FUTURE LYNX                                  

                        FOR UNITED KINGDOM ARMED FORCES                        

PHOENIX / INDIANAPOLIS, June 22, 2006 -- The Light Helicopter Turbine Engine
Company (LHTEC), a partnership between Honeywell and Rolls-Royce, today
announced that the company has won a $140 million USD (£75 million) contract
from AgustaWestland to supply the CTS800-4 turboshaft engine for the British
Armed Forces' Future Lynx helicopter.

The UK Ministry of Defence (MoD) has ordered 70 Future Lynx tactical transport
and maritime helicopters from AgustaWestland to meet the requirements of the
British Army Air Corps and Royal Navy.

Powering the new Future Lynx will be two 1,361 shaft horsepower CTS800-4
turboshaft engines, offering a significant power improvement over the current
Lynx helicopter engine. The CTS800-4 delivers a significant improvement in the
helicopter's `hot and high' performance and coupled with reduced fuel flows,
the engine expands the mission capability for the new helicopter.

The Future Lynx Helicopter is expected to enter service in 2014, replacing the
current Lynx helicopter fleet. The CTS800 is also currently undergoing flying
testing with the AgustaWestland A129 attack helicopter.

"The CTS800 engine provides the Future Lynx with reliable, affordable power,
maximising mission effectiveness in the toughest of operating environments,"
said Nasos Karras, Vice-President of Honeywell's Helicopters business segment
within its Defence and Space strategic business unit and LHTEC board member.
"The extensive service life designed into the rotating components and its `on
condition' maintenance management will also provide operators with
significantly reduced direct maintenance and aircraft operating costs."

"Honeywell, whose engines power the Chinook, and Rolls-Royce, whose engines
power the Apache, Lynx, Sea King and Merlin, have a successful history of
providing power for frontline British rotorcraft, and we are proud to continue
supporting the UK armed forces through the CTS800-powered Future Lynx," added
Scott Crislip, President of Rolls-Royce Helicopters & Small Gas Turbine
Engines, and also LHTEC board member.

The LHTEC CTS800-4 turboshaft engine is equipped with a full-authority digital
engine control (FADEC) which reduces pilot workload and facilitates the
engine's on-condition maintenance program.

The LHTEC CTS800 also powers applications in Japan, the United States and
Europe. These include the boundary layer control system of the ShinMaywa US-1A
Kai amphibian, currently in development by the Japanese Navy; and the prototype
of the Sikorsky X2 Technology high-speed compound rotorcraft, which is due to
make its maiden flight by the end of the year.

Growth versions of the T800/CTS800 engine include a 1,680 shp class version
being offered for emerging civil and military applications.

The Future Lynx Helicopter is based on the CTS800-powered Super Lynx 300, which
is already in operation with the Royal Malaysian Navy, the Royal Thai Navy and
the Royal Air Force of Oman. The type has also been ordered by the South
African Air Force.

Media Contacts:

Justine Steele

Head of Communications - Defence Aerospace

Rolls-Royce Plc

Tel: [phone]

Email: [e-mail]

Website: www.rolls-royce.com

Bill Reavis

Dir., Media Relations

Honeywell Aerospace

Tel: [phone]

Email: [e-mail]

Website: www.honeywell.com

George McLaren

Senior Communications Manager

Rolls-Royce Corp.

Tel: [phone]

Email: [e-mail]

Website: www.rolls-royce.com