Re Contract

28 January 2009

     ROLLS-ROYCE SECURES £198 MILLION CONTRACT TO SUPPORT UK PEGASUS FLEET     

Rolls-Royce has been awarded a £198 million contract by the UK Ministry of
Defence (MOD) to support the Pegasus engines which provide the Harrier fleet
with its unique Short Take Off and Vertical Landing (STOVL) capability.

The 10-year contract provides a guaranteed level of availability of Pegasus
engines to power the aircraft operating in the UK's Joint Force Harrier, which
is operated by both the Royal Air Force and the Royal Navy.

Under the terms of the contract, Rolls-Royce will undertake all aspects of
engine support, including the provision of replacement engines to meet customer
demands, and technical support both at operating locations and from the
Rolls-Royce state-of-the art facilities in Bristol.

The contract will be managed from the company's Bristol site, with some
activities taking place at RAF Wittering and the main repair and overhaul work
will be undertaken at the Rolls-Royce facility in Ansty.

Martin Fausset, Managing Director of Rolls-Royce Defence Aerospace, said:

"I am delighted that we have signed this important support contract with the
MOD, which means that Rolls-Royce now provides a guaranteed level of
availability for all engines powering the UK's Typhoon, Tornado and Harrier
aircraft.

"We have built a relationship with the MOD that drives innovation and assures
value for money, and we are incentivised to continuously improve the efficiency
of the services that we provide. I am confident that the Pegasus contract will
build on the success of the existing RB199 and EJ200 engine availability
contracts in supporting the UK's operational capability."

Group Captain Andy Ebdon, Harrier Integrated Project Team Leader at the
Ministry of Defence said:

"Awarding this contract to Rolls-Royce for complete through-life support of
Pegasus is a very significant achievement. It not only assures affordable
engine availability, but also incentivises both industry and the MOD to
actively work together to improve efficiency. The end effect is better value
for money and improved support performance for the front."

NOTES TO EDITORS

 1. Rolls-Royce, a world-leading provider of power systems and services for use
    on land, at sea and in the air, has established a strong position in global
    markets - civil aerospace, defence aerospace, marine and energy.
   
 2. The Group has a broad customer base comprising more than 600 airlines,
    4,000 corporate and utility aircraft and helicopter operators, 160 armed
    forces, more than 2,000 marine customers, including 70 navies, and energy
    customers in nearly 120 countries. It employs around 39,000 people
    worldwide people in offices, manufacturing and service facilities in 50
    countries and has businesses headquartered in the UK, US, Canada, Germany,
    Scandinavia and China. This global presence allows the Group to access
    long-term international growth opportunities with its technology, presence,
    partnerships and people.
   
 3. Rolls-Royce is the world's number two defence aero engine company with 160
    customers in 103 countries. The company offers engines in all key defence
    market sectors - combat, transport, helicopters, trainers, patrol, maritime
    and reconnaissance - and is well positioned on a number of new programmes
    that will deliver products over the next decade and beyond.
   
 4. Rolls-Royce is a pioneer in partnered support and availability contracting
    and services account for over half of the revenues of the defence aerospace
    business.
   
 5. The focal point for the rapidly expanding military engine support business
    is an Operations Centre, based in Bristol, which provides around-the-clock
    advice, guidance and information to Rolls-Royce programme managers, field
    representatives, deployed personnel and customers. In addition to the UK
    MOD support contracts, the centre is supporting an increasing number of
    international customers, including Adour support for Hawks based in
    Australia, the USA and Canada.
   
For further information please contact:

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

Nicky Louth-Davies
Director of Corporate Communications
Tel: [phone]
[e-mail]