Re Joint Venture

22, December 2008

        ROLLS-ROYCE AND GOODRICH ANNOUNCE ENGINE CONTROLS JOINT VENTURE        

Further to the announcement on 14 August 2008 regarding the proposed formation
of an engine controls joint venture, Rolls-Royce today announced agreement with
Goodrich Corporation to form Rolls-Royce Goodrich Engine Control Systems
Limited, trading as Aero Engine Controls. Aero Engine Controls will develop and
supply engine controls for Rolls-Royce engines. The transaction is expected to
be complete within two weeks.

Aero Engine Controls, a 50:50 joint venture, will combine Goodrich's existing
UK-based engine controls design and manufacturing business with Rolls-Royce's
Full Authority Digital Engine Control (FADEC) engineering expertise. Goodrich
will retain the aftermarket products and services business associated with the
joint venture's products.

In establishing the joint venture both parties will have transferred
approximately £14m of assets and cash into Aero Engine Controls. In addition
Rolls-Royce will make a cash payment of $100m to Goodrich Corporation and will
assume certain foreign exchange contracts with an estimated cost to Rolls-Royce
of £20m. Assets being transferred from Rolls-Royce to the joint venture are
expected to have minimal impact on Rolls-Royce Group profitability estimates.

Aero Engine Controls will have around 1,330 employees, comprising staff who
will transfer from the two companies, and has sites in Derby, Birmingham and
Belfast.

Colin Smith, Director-Engineering & Technology, Rolls-Royce plc said,

"We are pleased with the progress made since August to form Aero Engine
Controls. Forming this new company provides an exciting opportunity to combine
the skills, knowledge and expertise of both companies into a single team with
common goals.It also enables us to share our joint capability and work more
efficiently to meet the demands of an increasingly important market."

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, operates in four global markets - civil
    aerospace, defence aerospace, marine and energy. Rolls-Royce has a broad
    customer base comprising 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 120 countries. For
    more information visit http://www.rolls-royce.com.
   
 2. Goodrich Corporation, a Fortune 500 company, is a global supplier of
    systems and services to aerospace, defence and homeland security markets.
    With one of the most strategically diversified portfolios of products in
    the industry, Goodrich serves a global customer base with significant
    worldwide manufacturing and service facilities. For more information visit 
    http://www.goodrich.com.
   
 3. The engine control system ensures that the engine safely provides the
    correct power in response to the pilot's demand. It does this by regulating
    the flow of fuel to the engine and adjusts many other variable features,
    which optimise the engine performance and ensure safety. The system also
    provides data to the aircraft avionic systems and for cockpit indication.
    It consists of electronic, hydraulic and mechanical components and depends
    for its function on high integrity software.
   
 4. Goodrich's UK-based controls design and manufacturing is based in
    Birmingham and Belfast, UK. Rolls-Royce aero controls is based in Bristol
    and Derby in the UK, Dahlewitz in Germany and Indianapolis in the United
    States.
   
 5. Approximately 1,100 people at Goodrich (over 3 sites) and 180 people at
    Rolls-Royce (over 2 sites) will be transferred to Aero Engine Controls on
    the first day of trading. It is expected that some employees will be
    transferred from Rolls-Royce in Indianapolis in 2009.
   
 6. The agreement includes usual mechanisms allowing the exit by either party
    from the joint venture in the event of a change of control of either party,
    insolvency or an irresolvable dispute. Depending on the triggering event,
    these provisions provide one of the parties with the option to acquire the
    other's share of the joint venture at net asset value of the venture. In
    addition, under certain circumstances, Rolls-Royce could be required to
    acquire the associated aftermarket products and services business from
    Goodrich at a price to be determined at the time of the transaction by an
    earnings based formula subject to certain caps on the level of
    consideration.
   
For further information, please contact:

Nicky Louth-Davies
Corporate Communications
Rolls-Royce
Tel: [phone]
Email: [e-mail]


Mark Alflatt
Director Financial Communications
Rolls-Royce
Tel: [phone]
Email: [e-mail]