Re Agreement

29 JUNE 2012

ROLLS-ROYCE COMPLETES RESTRUCTURING OF INTERNATIONAL AERO ENGINES COLLABORATION

Rolls-Royce, the global power systems company, confirms that it has today
completed the restructuring of its participation in International Aero Engines
(IAE) Collaboration, which produces the V2500 engine for the Airbus A320 family
of aircraft. Rolls-Royce has sold its equity and programme shares in the IAE
Collaboration to Pratt & Whitney, a United Technologies Corp. (NYSE:UTX)
company, for a consideration of $1.5 billion. In addition to the consideration,
which will be subject to working capital adjustments, Rolls-Royce will also
receive an agreed payment for each hour flown by the current installed fleet of
V2500-powered aircraft for the next fifteen years.

Rolls-Royce remains committed to IAE and its customers and continues to be an
essential supplier, retaining responsibility for the manufacture of
high-pressure compressors, fan blades and discs as well as the provision of
engineering support and final assembly of 50 per cent of V2500 engines.

As well as restructuring their participation in IAE, on 12 October 2011,
Rolls-Royce and Pratt & Whitney also announced the formation of a new engine
collaboration to power future mid-size aircraft, which is subject to separate
regulatory approvals. IAE partners, Japanese Aero Engines Corporation (JAEC)
and MTU Aero Engines GmbH (MTU), have also agreed to join this new venture.
This collaboration will draw on the most advanced technology from these
world-class companies to drive enhanced performance for this fast growing
segment in which worldwide demand for around 20,000 new aircraft (or nearly
45,000 engines) is predicted over the next twenty years.

Notes to Editors:

 1. As announced on 12 October 2011, the transaction is expected to improve
    Civil Aerospace's operating profit by more than £140m in the first 12
    months after closing. Thereafter, a slowly diminishing improvement is
    expected in successive years, depending on the utilisation of the current
    V2500 fleet. Further detail will be provided at the Rolls-Royce Half-yearly
    results briefing on 26 July 2012.
   
 2. Rolls-Royce is a world-leading provider of power systems and services for
    use on land, at sea and in the air, and has established a strong position
    in global markets - civil aerospace, defence aerospace, marine and energy.
   
 3. As a result of this strategy, Rolls-Royce has a broad customer base
    comprising more than 500 airlines, 4,000 corporate and utility aircraft and
    helicopter operators, 160 armed forces, more than 4,000 marine customers,
    including 70 navies, and energy customers in more than 80 countries.
   
 4. Annual underlying revenues were £11.3 billion in 2011, of which more than
    half came from the provision of services. The firm and announced order book
    stood at £62.2 billion at 31 December 2011, providing visibility of future
    levels of activity.
   
 5. Rolls-Royce employs over 40,000 people in offices, manufacturing and
    service facilities in over 50 countries. Over 11,000 of these employees are
    engineers.
   
 6. In 2011, Rolls-Royce invested £908 million on research and development, two
    thirds of which had the objective of further improving the environmental
    performance of its products, in particular reducing emissions.
   
 7. Rolls-Royce supports a global network of 28 University Technology Centres,
    which connect the company's engineers with the forefront of scientific
    research.
   
 8. The Group has a strong commitment to apprentice and graduate recruitment
    and to further developing employee skills.
   
 9. Since its creation almost thirty years ago IAE has become a major force in
    international aviation with approximately 5,000 V2500 engines delivered and
    approximately 2,000 on order.
   
For further information, please contact:

Investors:

Simon Goodson
Director - Investor Relations
Rolls-Royce plc
Tel: [phone]
[e-mail]

Media:

Josh Rosenstock
Director of External Communications
Rolls-Royce plc
Tel: [phone]
[e-mail]

www.Rolls-Royce.com


Cautionary Statement

This Announcement contains certain forward-looking statements. These
forward-looking statements can be identified by the fact that they do not
relate only to historical or current facts. In particular, all statements that
express forecasts, expectations and projections with respect to future matters,
including trends in results of operations, margins, growth rates, overall
market trends, the impact of interest or exchange rates, the availability of
financing to the Company, anticipated cost savings or synergies and the
completion of the Company's strategic transactions, are forward-looking
statements. By their nature, these statements and forecasts involve risk and
uncertainty because they relate to events and depend on circumstances that may
or may not occur in the future. There are a number of factors that could cause
actual results or developments to differ materially from those expressed or
implied by these forward-looking statements and forecasts. The forward-looking
statements reflect the knowledge and information available at the date of
preparation of this Announcement, and will not be updated during the year.
Nothing in this Announcement should be construed as a profit forecast.