Final Results - Year Ended 31 December 1999

Rolls-Royce PLC
2 March 2000

                                                           2 March 2000

           ROLLS-ROYCE DELIVERS CONSISTENT GROWTH

                     1999 annual results

                                          1999          1998      
_____________________________________________________________________________
Sales from continuing operations          £4,744m       £4,326m    +10%

Profit before tax                         £360m         £325m      +11%

Underlying earnings per share*            19.52p        16.91p     +15%

Dividend                                  7.25p         6.55p      +11%

Order book                                £11.5bn       £10.4bn    +11% 

Net cash balances, before acquisitions    £301m         £302m

*see note 2
_____________________________________________________________________________
Sir Ralph Robins, Chairman, said:

'We have reported another year of double digit earnings growth, in challenging
conditions.

This strong performance reinforces our position in civil aerospace, defence,
marine and energy markets. These are growing markets, in which we are gaining
market share.

During 1999 we strengthened the company through investment in new products and
services and by acquisitions.  With the acquisition of Vickers we have become
a world leader in marine propulsion and we expect to achieve strong growth in
this market.

Conditions remain challenging in 2000.  However we have entered the year with
an £11.5 billion order book and an increasingly efficient company.  We
continue to target double digit earnings growth.'  

Enquiries

Peter Barnes-Wallis
Director of Corporate Communications
0171 222 9020
Rolls-Royce home page: www.rolls-royce.com

-- 2 --

Delivering long term value

1999 was a significant and successful year for Rolls-Royce.  The company made
continued progress with its consistent, long term strategy of building
shareholder value by increasing its share of clearly defined growth markets, 
both through organic growth and acquisitions. 

Underlying earnings per share increased from 16.91p to 19.52p - marking
another year of double digit earnings growth.  This was achieved in the face
of higher research and development investment and an acceleration of the
company's restructuring programme.                      

The acquisition of Vickers during the year has more than doubled the company's
marine business.  Rolls-Royce will benefit from being the first company to
anticipate the changing needs of the marine market.  It has become a world
leader in marine propulsion systems, with the ability to offer fully
integrated power systems across naval and commercial markets.  
  
In the civil aerospace sector, the company delivered a record 1,080 engines in
1999, as a result of its increasingly broad range of competitive products. 

Rolls-Royce strengthened its leading position in the corporate and regional
airlines sector with the assumption of full control of BMW Rolls-Royce, which
had previously operated as a joint venture. At the same time, BMW increased
its shareholding in Rolls-Royce to over ten per cent.

New risk and revenue sharing partners were attracted to the company's
programmes. These partners typically bring additional financial and
engineering resource and share the costs and potential rewards of developing
new products for growing markets. Their participation endorses the future
embedded value Rolls-Royce has created from products which will have market
lives measured in decades.

In 1999, some 40 per cent of sales came from services and aftermarket
activities.  The company has developed successful businesses offering
financial and aftermarket services in response to the rapid growth of its
customer base, the growing number of products in service and the increasing
requirement from customers for through-life support.

The company continues to drive for improved productivity and efficiency.  The
Better Performance Faster programme moved from net investment to net saving in
1999, as the benefits of investment were realised. In addition, the company
substantially increased its investment in restructuring.  During 2000 it will
further accelerate restructuring to create improvements in efficiency.

-- 3 --

Rolls-Royce started the year 2000 with an £11.5 billion order book, a leading
position in growth markets and an increasingly efficient company. This year
will be as challenging as 1999, against a background of the continuing cost of
restructuring, the possibility of adverse exchange rates and a predicted
reduction in large engine deliveries.  2000 also presents significant
opportunities arising from the company's broad product portfolio, new risk and
revenue sharing partners, the continuing drive to reduce costs and
the growing contribution from the newly acquired businesses.

Rolls-Royce continues to target double digit earnings growth.

Rolls-Royce plc 1999 annual results

The Group reported an 11 per cent increase in profit before tax, to 
£360 million, after writing off £13m goodwill.  Sales were £4,744 million,
ten per cent higher than sales from continuing operations in 1998.

Acquisitions contributed £161 million to sales and, after associated
restructuring charges, reduced profit before tax by £1 million.

The Group reported a record order book, of £11.5 billion 
(1998; £10.4 billion).  A further £1.7 billion (1998; £2.2 billion) had been
announced but not signed at the year end.  Acquisitions contributed 
£1.7 billion to the order book.

Before acquisitions, sales from continuing operations increased by 
six per cent.  Aerospace sales were nine per cent higher and industrial sales
were down by five per cent.

Civil aerospace sales were 19 per cent higher than in 1998.  This resulted
from a record 1,080 (1998; 911) civil engine deliveries and a nine per cent
growth in civil spares sales.  Defence aerospace sales reduced by five per
cent.

Industrial sales benefited from growth in oil and gas and marine systems,
offset by a decline in power generation sales and the global recession in the
materials handling business, which is expected to be disposed of during 2000.

Gross margins on continuing operations improved to 20 per cent 
(1998; 18.6 per cent), due to a number of factors, including the benefits from
the Better Performance Faster programme.

Aerospace trading profit increased by 29 per cent, to £555 million and
industrial businesses' trading profit declined by £28 million to £36 million. 
Industrial businesses were affected by £17 million restructuring charges and a
trading loss in materials handling.  Oil and gas and marine systems made
strong positive contributions.

The level of segmental analysis will be increased in 2000 to reflect the major
market sectors which the company serves.  1999 figures, in the new segmental
analysis, have been provided in note 1 to enable future comparisons to be
made.

-- 4 --

The company's treasury operations reduced the expected adverse impact of
dollar sterling exchange rates in 1999.  The deterioration in the achieved
exchange rate resulted in a £2 million reduction of profit, compared to the
rate achieved in 1998. In 2000, the company is, again, expected to face
adverse exchange rates, which could lead to a maximum deterioration of
£30 million, compared to the average exchange rates achieved in 1999.

The company accelerated its restructuring activities in the second half of
1999, incurring a total charge for the year of £55 million (1998; £15
million).  This cost has been recorded within cost of sales.  Significant
additional restructuring is anticipated in 2000 as the company takes every
opportunity to create further improvements in efficiency.

Gross research and development investment, including contributions from
partners and customers, was £626 million (1998; £668 million).  Net research
and development investment increased, as expected, to £215 million, (1998;
£173 million)of which £2 million related to acquisitions.  Investment is
expected to increase in 2000, as a result of acquisitions.  

The net positive impact of risk and revenue sharing partners was £133 million
(1998; £99 million).

Cash flow for the year was neutral, before the impact of acquisitions.  This
reflected a significant inflow in the second half as net working capital was
reduced and aircraft assets were acquired by the Pembroke Group, the company's
50 per cent owned aircraft leasing joint venture.

Cash from trading activities, before research and development, increased by 
25 per cent, to £574 million.

At the year end the company reported net debt, including the impact of
acquisitions, of £694 million, representing gearing of 35 per cent.

Shareholders' funds were £1,988 million (1998; £1,705 million), including the
issue of 40 million new shares.                              

The recommended final dividend is 4.55 pence per share, making a total for the
year of 7.25 pence per share, an increase of 11 per cent over 1998.  The final
dividend is payable on 3 July 2000, to shareholders on the register on
2 May 2000.  The ex-dividend date is 25 April 2000.


-- 5 -

Review of operations

Civil aerospace - 1999 sales £2654 million; profit £232 million

Rolls-Royce has developed the broadest range of aero-engines in the world,
available for more than 30 current airframes, a five-fold increase compared to
the position at the start of the 1990s.  Engine deliveries have increased from
less than 400 in 1990 to a record 1,080 in 1999, establishing Rolls-Royce as
the second largest civil aero engine manufacturer in the world.  The strength
of the company's product portfolio will enable deliveries to grow further in
2000, to about 1,120 engines, although the expected reduction in large engine
deliveries will result in a fall in the equivalent thrust delivered. 
Deliveries of 1,250 engines are expected in 2001, with the equivalent thrust
delivered exceeding the 1999 level.

The Trent has continued to be the engine of choice for both the Boeing 777 and
the Airbus Industrie A330.  It has now secured the market leading position on
these airframes, with a 42 per cent share overall.

On the Boeing 777, Rolls-Royce won additional business from existing customers
and recently gained El Al as a new Trent 800 customer. The Trent 800 has
demonstrated outstanding performance and, in February this year, passed one
million hours in service.

Nine new Trent 700 customers from Europe, the Middle East, North America and
Asia took delivery of their A330 aircraft during 1999.

The Trent 500, under development for the A340-500/-600 aircraft, ran for the
first time, achieving its 60,000lb certification thrust.  Orders and options
in excess of $5 billion have been received from ten customers for this
engine.  Production deliveries are scheduled to start in 2001 and will grow to
more than 120 engine deliveries in 2002.

The International Aero Engines' V2500, in which Rolls-Royce is a major
shareholder, had an excellent year and now has more than 75 customers
world-wide with sales to date exceeding $18 billion.

The company made strong progress in the rapidly growing market for corporate
and regional airlines.  In October the BR715 entered service on the Boeing
717.  This engine is the sole powerplant for the B717, which has secured firm
and option orders for more than 250 aircraft.

The AE3007 is playing a key role as the sole source powerplant for the Embraer
RJ135, RJ140 and RJ145 family of aircraft.  The total firm and option order
book for these twin-engined aircraft is now almost 1,000.  During 1999 the
five hundredth AE3007 engine was delivered and by the end of the year AE3007
engines had completed nearly 2 million flight hours.

-- 6 --

Defence  - 1999 sales £1138 million; profit £181 million

Rolls-Royce has a strong position in all the key defence market sectors -
combat, VSTOL, light attack, trainer, transport, helicopters, maritime
reconnaissance and aerial surveillance. In all these markets, customers are
increasingly seeking a full spectrum of aviation support and services.
Rolls-Royce is well placed to respond to these new requirements with
innovative products for customer support.  The company foresees strong demand
for military aero engines over the next ten years and, through its presence on
the principal new programmes, is well positioned to take advantage of this
growth.

Production of the EJ200 has commenced for Eurofighter 2000.  The four-nation
Eurojet consortium, in which Rolls-Royce is the major participant, has
received firm orders for an initial 363 EJ200 engines out of a total European
requirement for 1,500 engines. The first engines will be delivered to the
customers this year and output is expected to grow to 40 engines in 2001.

The United States Joint Strike Fighter programme is one of the world's largest
defence procurement programmes.  Rolls-Royce participates in all of the
proposed configurations of this aircraft.  The Rolls-Royce developed LiftFan
performed well during testing and, in 1999, successfully demonstrated its full
range of performance characteristics.  This fan-only system is a unique
development and includes some of the largest bladed disks (blisks) ever made. 
Strong progress was also made on the F-120 alternate engine, where Rolls-Royce
is teamed with General Electric.  A $440 million contract was awarded for
design and test of this engine.

The Hawk advanced trainer, powered by the Rolls-Royce Turbomeca Adour,
continues to attract new orders. During 1999 NATO Flight Training Canada
placed a £100 million contract with the company for the supply and
through-life support of the Adour engine. The company also secured a contract
worth £150 million for the through-life support of Adour engines for
Australia's Hawk  aircraft. The contract covers the 33 aircraft ordered by
Australia, the first of which will be delivered in 2000.

The AE1107C is now in production for the V-22 Osprey tilt rotor. The
customer's service needs will be met by an innovative fleet hour agreement,
the first of its kind between Rolls-Royce and a US defence organisation.

Further in-service support agreements included a five year partnership, valued
at £30 million, covering RTM 322 helicopter engines for all three UK armed
forces and the introduction of JETScan technology for the RB199 fleet. 
JETScan is an engine oil system diagnosis tool for improving flight safety and
minimising maintenance.

In December Rolls-Royce secured one of the first contracts to be announced
under the UK's smart procurement initiative when the Ministry of Defence
placed an order worth up to £350 million to upgrade Pegasus engines for RAF
Harrier GR 7 aircraft.  This new style of contract provides major cost,
performance and reliability improvements to the customer.

-- 7 --

Marine systems - 1999 sales £385 million; profit £37 million

Rolls-Royce has become a world leader in marine propulsion systems. The
acquisition of Vickers has added a strong commercial marine business to the
company's existing naval business.

The ability of Rolls-Royce to offer fully integrated power systems across
naval and commercial markets will open up significant opportunities.  This
expanded capability matches the needs of the changing marine market as
customers increasingly demand integrated propulsion system design and supply. 
The company's extended range of marine capabilities includes project
management, design and integration, ship control and instrumentation,
procurement and equipment supply, installation and commissioning, integrated
logistics and platform support.

Rolls-Royce supports its broad range of capabilities with a comprehensive
product range.  Power is available from gas turbines, diesel engines and
electric motors.  Propulsion equipment includes market leading products such
as Kamewa and Bird Johnson water jets, Ulstein propellers and Bergen diesels. 
New markets addressed by the company in the commercial sector include cargo
shipping, cruise, fishing, tugs and offshore support vessels.

In the naval market sector, Rolls-Royce is undertaking propulsion system
development for all planned Royal Navy platforms, including Type 45, Future
Attack Submarine, Future Carrier and Future Surface Combatant.  In 1999 the
company was selected to provide power systems for the Royal Navy's ASTUTE
class of submarine, with a contract to design, build and supply three sets of
turbo generators which will provide the submarines with electrical power for
sensors, services and weapons systems.  All three ASTUTE submarines will be
powered by Rolls-Royce nuclear steam raising plant.                    

The company made good progress with the WR-21 engine, which is the only
advanced-cycle marine gas turbine under development in the world.  The engine
has now completed development testing.  During the year the company launched a
new marine gas turbine, the 601K in the 6-8MW class, primarily designed to
power corvette and fast patrol craft.

In August Rolls-Royce achieved a significant breakthrough in the commercial
market when the marine Trent was selected for a $1 billion contract to power
the future FastShip cargo vessel.  Each of five vessels will be powered by
five marine Trents driving Kamewa water jets.  The gas turbines and
water jets will each be rated at 50 MW, the most powerful in the world.

The company leads the world in the field of podded electric systems and
achieved an order book of more than 30 Mermaid units in 1999.  Two Mermaid
propulsion systems have recently been successfully mounted on the first of
four Millennium series cruise ships for Celebrity Cruises.

-- 8 --

The company's marine systems business has developed a strong services
capability, building upon the generic skills developed in other sectors. 
Total care packages such as Power by the Hour are offered.  One of the first
applications will be FastShip for which a 20 year support package has been
proposed.

Energy - 1999 sales £482 million; loss £39 million

Rolls-Royce is investing in its energy businesses, concentrating on
applications in the oil and gas sector and power generation equipment up to
75MW.  These markets are addressed through a broad range of diesels and gas
turbines and a comprehensive project development capability.             

The company's oil and gas business had a strong year.  The acquisition of
Cooper Cameron's rotating compressor business enhances the company's position
as a leader in the oil and gas industry for pumping and compression and
offshore power generation.  Customers in these markets increasingly require
innovative package solutions.  The acquisition will enable Rolls-Royce to
provide customers with improved products and integrated aftermarket services.

In power generation the company increased its investment in new products.  The
latest addition to the portfolio of advanced medium speed diesels, the Allen
5016, was launched in September and is already attracting interest from
potential customers world-wide.

The company's continuing investment in the industrial Trent resulted in
increased in-service availability of the engines, with the fleet achieving
20,000 running hours in 1999.  Whilst development of this product has taken
longer than originally anticipated, market interest remains strong.  By the
end of the year, five Trent power stations were in operation.  Good progress
has been made with reducing emissions and the company expects to introduce a
fully compliant combustor in 2000.  Continuing investment in this area will
benefit the company's complete range of industrial gas turbine products.

Rolls-Royce has 2,500 industrial gas turbines in active service and expects
this to grow as a consequence of the increased demand for distributed power
and its investment in a broader range of products.  The service element of
this activity will assume a greater importance as customers increasingly
outsource the maintenance and operation of equipment.

Services

Financial and aftermarket service activities account for 40 per cent of the
company's sales. Rolls-Royce continued to grow these businesses in 1999,
offering a broader range of customer services and generating increased
revenue.

-- 9 --

Financial Services - 1999 Sales £37 million; profit £24 million

Rolls-Royce & Partners Finance, established in 1989, is the world's largest
specialist aero-engine leasing company.  It successfully completed its first
full year as a joint venture with GATX Capital.  At the end of the year the
joint venture owned 144 aero-engines, all of which are on lease to customers
around the world.

Pembroke Group also completed a successful first full year of trading as a
Rolls-Royce joint venture company.  It specialises in aircraft leasing and
management and, at the end of 1999, owned 48 aircraft and managed a further 45
on behalf of customers.

Rolls-Royce Power Ventures continued to develop its portfolio of power
development projects.  Successes in 1999 included the entry into service of a
diesel power station in the Caribbean and a new contract to supply diesel
generating sets to gold mining operations in Tanzania. The company has
attracted new partners into development projects and will be seeking further
opportunities to sell down shares in projects, thus unlocking value and
releasing capital.

Aftermarket Services - sales and profit figures are included in the relevant
market sectors.

Rolls-Royce overhauls more than 1,500 aero-engines and 4,500 modules each
year.  The company repairs 47 different engine types for 400 customers through
an international network of repair and overhaul operations based at 16
locations on four continents.

The company's aero repair and overhaul business continued to grow in 1999 as a
result of its comprehensive international network of repair bases and the
growing installed base of engines.  Rolls-Royce won more than 100 repair and
overhaul contracts during the year.

In September, the acquisition for $73 million of National Airmotive
Corporation, one of the United States' leading aero and industrial engine
repair and overhaul businesses, strengthened the company's position in the
aftermarket.  National Airmotive is an authorised maintenance centre for a
variety of engines, including the Rolls-Royce T56 and Model 250 engines, both
of which have large fleets in service.

The recently announced joint venture with SR Technics, a sister company of
Swissair, expanded the company's global network for Trent support,
complementing existing facilities in the United States, Hong Kong, Singapore
and the United Kingdom.

-- 10 --  

Rolls-Royce formed a joint venture company, Data Systems & Solutions (DS&S),
with Science Applications International Corporation.   DS&S provides systems
integration, integrated asset management and maintenance solutions to
customers in aerospace, defence, marine and energy markets.  DS&S won 
$82 million worth of new business in 1999 with customers as diverse as Condor,
the German charter airline, and the Ignalina nuclear power station in
Lithuania.  DS&S now monitors 453 engines for 17 customers.  Key development
areas are the efficient capture of data, the enhancement of analytical tools
and the delivery of information to customers via the internet.




-- 11 --
                              
Group profit and loss account
for the year ended December 31, 1999
                                    
                                                     Other     
                                                   Continuing  Total  Total
                                      Acquisitions operations  1999   1998

                               Notes      £m          £m        £m     £m
                                
____________________________________________________________________________
Turnover: Group and share of             
 joint ventures                          161       4,646     4,807   4,687
Sales to joint ventures                    -         799       799     701
Less share of joint ventures'              
 turnover                                  -        (862)     (862)   (892)
____________________________________________________________________________
Group turnover                  1        161       4,583     4,744    4,496
Cost of sales                           (124)     (3,663)   (3,787)  (3,689)
____________________________________________________________________________
Gross profit                              37         920       957      807
Commercial, marketing and 
 product support costs                    (7)       (188)     (195)    (162)
General and administrative           
 costs                                   (21)       (150)     (171)    (156)
Research and development(net)*            (2)       (213)     (215)    (173)
____________________________________________________________________________
Group operating profit                     7         369       376      316
Share of operating profit of                    
 joint ventures                            -          31        31       17  
Loss on sale of businesses                 -         (14)      (14)     (40)
Profit from the sale to BMW of                                   
 the automotive trademark             
 registrations of the 
 Rolls-Royce name                          -           -         -       40
Profit on sale of fixed assets    2        -          20        20        9
____________________________________________________________________________
Profit on ordinary activities   
 before Interest                  1        7         406       413      342  
                                      ___________________
Net interest payable     
  - Group                                                      (35)     (12)
  - joint ventures                                             (18)      (5)
___________________________________                        __________________ 
Profit on ordinary activities                                  
 before taxation                                               360      325
Taxation                                                       (74)     (65)
___________________________________                        __________________
Profit on ordinary activities                           
 after taxation                                                286      260
Equity minority interests in                                     
 subsidiary undertakings                                        (2)      (2) 
___________________________________                        __________________
Profit attributable to                            
 ordinary shareholders                                         284      258
Dividends                                                     (112)     (99)
___________________________________                        __________________
Transferred to reserves                                        172      159
___________________________________                        __________________
                                                                
*Research and development (gross)                             (626)    (668)
                                                                 
Earnings per ordinary share:      2                             
Underlying                                                   19.52p   16.91p
Basic                                                        18.86p   17.25p
Diluted basic                                                18.62p   17.10p
                                                                 
-- 12 --
                                                                 
Group Balance sheet
at December 31, 1999
                                    
                                                                  
                                               ______________________
                                                  1999         1998
                                                    £m           £m
_____________________________________________________________________
Fixed assets                                                
Intangible assets - purchased goodwill             873            8
Tangible assets                                  1,753        1,217
Investments    - subsidiary undertakings             -            -
               - joint ventures                    151          134
                 share of gross assets             958          855
                 share of gross liabilities       (807)        (721)
               - other                              31           15
______________________________________________________________________
                                                 2,808        1,374
______________________________________________________________________
Current assets                                              
Stocks                                           1,274        1,041
Debtors - amounts falling due within one year    1,321          975
        - amounts falling due after one year       371          372
Short-term deposits and investments                464          722
Cash at bank and in hand                           521          297
______________________________________________________________________
                                                 3,951        3,407
Creditors - amounts falling due within one                  
 year
Borrowings                                        (408)        (177)
Other creditors                                 (2,467)      (1,961)
________________________________________________________________________
Net current assets                               1,076        1,269
________________________________________________________________________
                                                            
Total assets less current liabilities            3,884        2,643
                                                            
Creditors - amounts falling due after one                   
 year
Borrowings                                      (1,271)        (540)
Other creditors                                   (109)         (63)
                                                            
Provisions for liabilities and charges            (503)        (323)
______________________________________________________________________
                                                 2,001        1,717
______________________________________________________________________
                                                            
Capital and reserves                                        
Called up share capital                            309          301
Share premium account                              615          548
Revaluation reserve                                112          114
Other reserves                                     140          132
Profit and loss account                            812          610
______________________________________________________________________
Equity shareholders' funds                       1,988        1,705
                                                            
Equity minority interests in subsidiary             
 undertakings                                       13           12
______________________________________________________________________
                                                 2,001        1,717
______________________________________________________________________
               
-- 13 --                                         
                                    
Group cash flow statement
for the year ended December 31, 1999
                                    
                                          Notes      1999         1998
                                                      £m           £m
________________________________________________________________________
Net cash inflow from operating activities  A         359          285
Dividends received from joint ventures                 6           11
Returns on investments and servicing of           
 finance                                   B         (32)         (10)
Taxation paid                                        (38)         (34)
Capital expenditure and financial 
 investment                                C        (199)        (309)
Acquisitions and disposals                 D        (666)          87
Equity dividends paid                                (88)         (65)
________________________________________________________________________
Cash (outflow)/inflow before use of 
 liquid resources and financing                     (658)         (35)
Management of liquid resources             E         261         (336)
Financing                                  F         622          113
________________________________________________________________________
Increase/(decrease) in cash                          225         (258)
________________________________________________________________________
                                                            
Reconciliation of net cash flow to movement                 
 in net funds
Increase/(decrease) in cash                          225         (258)
Cash (inflow)/outflow from                          
 (decrease)/increase in liquid resources            (261)         336
Cash inflow from increase in borrowings             (618)         (99)
________________________________________________________________________
Change in net funds resulting from cash flows       (654)         (21)
Borrowings of businesses acquired                   (332)           -
Loans disposed of with subsidiary                           
 undertakings (including reclassification to          
 joint ventures)                                       -          112
Zero-coupon bonds 2005/2007 (9.0% Interest        
 accretion)                                           (3)          (2)
Exchange adjustments                                  (7)           -
________________________________________________________________________
Movement in net funds                               (996)          89
Net funds at January 1                               302          213
________________________________________________________________________
Net funds at December 31                            (694)         302
________________________________________________________________________

-- 14 --
                              
Reconciliation of operating profit to operating       
cash flow
                                                     1999         1998
                                                      £m           £m
                                                        
Operating profit                                     376          316
Depreciation of tangible fixed assets                105          113
Amortisation of purchased goodwill                     5            -
Loss/(profit) on disposals of tangible fixed assets    4           (1)
Decrease in provisions for liabilities and charges   (34)         (89)
Decrease in stocks                                    39         (102)
Increase in debtors                                 (113)         (82)
Decrease in creditors                                (23)         130
________________________________________________________________________
A    Net cash inflow from operating activities       359          285
________________________________________________________________________
Returns on investments and servicing of finance                
Interest received                                     26           47
Interest paid                                        (51)         (50)
Interest element of finance lease payments            (7)          (7)
________________________________________________________________________
B    Net cash outflow for returns on investments             
      and servicing of finance                       (32)         (10)
________________________________________________________________________
Capital expenditure and financial investment                   
Purchases of tangible fixed assets                  (381)        (387)
Disposals of tangible fixed assets                   187           41
Sale to BMW of the automotive trademark                
 registrations of the Rolls-Royce name                 -           40
Other investments                                     (5)          (3)
________________________________________________________________________
C    Net cash outflow for capital expenditure and  
      financial investment                          (199)        (309)
________________________________________________________________________
Acquisitions and disposals                                     
Acquisitions of businesses                          (653)           -
Disposals of businesses - including cash 
 balances disposed of                                  -          132
Deferred consideration in respect of prior year         
 disposals                                            14            -
Investments in joint ventures                        (16)         (44)
Loans to joint ventures                              (11)           -
Loan repayments from joint ventures                    -            5
Acquisition of non-equity minority interests in          
 subsidiary undertakings                               -           (6)
________________________________________________________________________
D    Net cash outflow for acquisitions and           
      disposals                                     (666)          87
________________________________________________________________________
Management of liquid resources                                 
Decrease/(increase) in short-term deposits           262         (333)
Increase in government securities and corporate        
 bonds                                                (1)          (3)
________________________________________________________________________
E    Net cash inflow/(outflow) from management of      
      liquid resources                               261         (336)
________________________________________________________________________
Financing                                                      
Borrowings due within one year 
     - repayment of notes                              -         (150)
     - increase in bank loans                         88           87
Borrowings due after one year 
     - repayment of loans                           (196)          (4)
     - new loans                                     734          177
Capital element of finance lease payments             (8)         (11)
________________________________________________________________________
Net cash inflow from increase in borrowings          618           99
Issue of ordinary shares                               4           14
________________________________________________________________________
F    Net cash inflow from financing                  622          113
________________________________________________________________________

-- 15 --
       
Group statement of total recognised gains and losses
for the year ended December 31, 1999
                                    
                                                     1999         1998
                                                      £m           £m
________________________________________________________________________
Profit attributable to the shareholders of 
Rolls-Royce plc                                      284          258
Exchange adjustments on foreign currency net            
 investments                                          17          (12)
________________________________________________________________________
Total recognised gains for the year                  301          246
________________________________________________________________________
                                                               
                                                               
Group historical cost profits and losses                       
for the year ended December 31, 1999                           
________________________________________________________________________
                                                     1999         1998
                                                      £m           £m
________________________________________________________________________
Profit on ordinary activities before taxation        360          325
Realisation of property revaluation gains of                       
 previous years                                        -            5
Difference between the historical cost depreciation            
 charge and the actual depreciation charge for the        
 year calculated on the revalued amount                2            2
________________________________________________________________________
Historical cost profit on ordinary activities                 
 before taxation                                     362          332
________________________________________________________________________
Historical cost transfer to reserves                 174          167
________________________________________________________________________
                                                              
                                    
                                    
                                    
Reconciliations of movements in Group shareholders' funds
for the year ended December 31, 1999
                                    
                                                     1999         1998
                                                      £m           £m
________________________________________________________________________
At January 1                                       1,705        1,443
Total recognised gains for the year                  301          246
Ordinary dividends (net of scrip dividend           
 adjustments)                                       (101)         (76)
New ordinary share capital issued (net of expenses)   75           14
Goodwill transferred to the profit and loss account            
 in respect of disposal of businesses                  8           78
________________________________________________________________________
At December 31                                     1,988        1,705
________________________________________________________________________

-- 16 --

Notes
                                    
1.   Segmental Analysis
                                    
                           Group turnover  Profit before   Net assets*
                                             interest
                           _____________________________________________
                          
                            1999   1998    1999     1998   1999    1998
                             £m     £m      £m       £m     £m      £m
________________________________________________________________________
Analysis by businesses:                                           
  Aerospace               3,774  3,476     442      370  1,543   1,036
  Industrial                922    767      (7)      35  1,149     390
  Business to be disposed    48     83     (22)       -      3      10
________________________________________________________________________
                          4,744  4,326     413      405  2,695   1,436
  Industrial -                
   discontinued operations    -    170       -      (63)     -     (21)
________________________________________________________________________
                          4,744  4,496     413      342  2,695   1,415
________________________________________________________________________
Geographical analysis by                                          
 origin:
  United Kingdom          3,663  3,575     334      238  1,506   1,059
  Other                   1,081    921      79      104  1,189     356
________________________________________________________________________
                          4,744  4,496     413      342  2,695   1,415
________________________________________________________________________
Geographical analysis by
 destination:
  United Kingdom            956  1,022
  Rest of Europe            658    415
  USA                     1,625  1,619
  Canada                    104    120
  Asia                      796    827
  Africa                    106    193
  Australasia               228    116
  Other                     271    184
_______________________________________
                          4,744  4,496
_______________________________________
Exports from United 
 Kingdom                  2,737  2,582
Sales to overseas 
 subsidiaries              (213)  (213)
Sales by overseas
 subsidiaries             1,260  1,101
Sales by overseas 
 joint arrangements           4      4
_______________________________________
Total overseas            3,788  3,474
_______________________________________

*Net assets exclude net debt of £694m (1998 net funds of £302m).

Discontinued operations include the 3 October 1998 disposal of the
Transmission and Distributions business.

In 2000 the company will adopt a new segmental analysis.  The revised
analysis, below, is provided to enable future comparisons.

                                              Turnover         PBIT
                                                1999           1999
                                                  £m             £m
____________________________________________________________________________
Civil aerospace                                 2,654           232
Defence                                         1,138           181
Marine systems                                    385            37
Energy                                            482           (39)
Financial services*                                37            24
To be disposed                                     48           (22)
____________________________________________________________________________
                                                4,744           413
____________________________________________________________________________

*Gross turnover of financial services companies and joint ventures is £82m.

-- 17 --

2. Earnings per ordinary share

Basic earnings per ordinary share are calculated by dividing the profit
attributable to ordinary shareholders of £284 million (1998 £258m) by 
1,506 million (1998 1,496 million) ordinary shares, being the average number
of ordinary shares in issue during the year, excluding own shares held under
trust which have been treated as if they have been cancelled.

Underlying earnings per ordinary share have been calculated as follows:

                                                          1999
                                                       Pence  £m
Profit attributable to ordinary shareholders           18.86  284
Exclude:
   Net loss on sale of businesses                       0.93   14
   Profit on sale of fixed assets*                     (1.13) (17)
   Amortisation of goodwill                             0.33    5
   Restructuring of acquired business                   0.40    6
   Related tax effect                                   0.13    2
                                                       _____  ___
Underlying earnings per share                          19.52  294
                                                       _____  ___

*excluding lease engines and aircraft sold by financial services companies.

Diluted basic earnings per ordinary share are calculated by dividing the
profit attributable to ordinary shareholders of £284m (1998 £258m) by 1,525
million (1998 1,509 million) ordinary shares, being 1,506 million (1998 1,496
million) as above adjusted by the bonus element of existing share options of
19 million (1998 13 million).

3. Group Employees at the period end

                                          31 December     31 December
                                             1999            1998
                                            Number          Number

   Aerospace                                32,200          30,000

   Industrial                               17,400          10,300

                                            49,600          40,300

Note: Acquisitions and disposals accounted for a net increase of 10,900       
      employees.  The underlying reduction of 1,600 was spread across the     
      Group.

4.    The financial information above does not constitute the Group's         
      statutory accounts for the year ended December 31, 1999 or 1998.        
      Statutory accounts for 1998 have been delivered to the Registrar of     
      Companies, whereas those for 1999 will be delivered following the annual
      general meeting.  The auditors have reported on those accounts; their   
      reports were unqualified and did not contain a statement under section  
      237(2) or (3) of the Companies Act 1985.