Re Contract

23 August 2005

            GE ROLLS-ROYCE FIGHTER ENGINE TEAM AWARDED $2.4 BILLION            
                          ENGINE DEVELOPMENT CONTRACT                          

Evendale, Ohio - The GE Rolls-Royce Fighter Engine Team (FET) has been awarded
a contract valued at $2.4 billion to develop its F136 engine for the F-35 Joint
Strike Fighter (JSF) program.

The contract, issued by the U.S. government, will be applied towards the System
Development and Demonstration (SDD) phase of the F136 engine program. This SDD
phase will run through September 2013. The F136 Initial Service Release is
planned in 2012 at which time the first F136 production engines will begin
deliveries.

"This SDD contract allows the team to transition the development engine into a
long-term production program," said Bob Griswold, of GE Transportation and
president of the Fighter Engine Team. "We have worked hard to make the GE
Rolls-Royce Fighter Engine Team one entity with a common focus on the F136
engine's success. We are confident the FET is in position for success as we
enter into SDD."

The F-35 is a next-generation, multi-role stealth aircraft designed to replace
the AV-8B Harrier, A-10, F-16, F/A-18 Hornet and the United Kingdom's Harrier
GR.7 and Sea Harrier, all of which are currently powered by a GE or Rolls-Royce
engine. Potential F-35 production for the U.S. Air Force, Navy, Marines and
international customers, including the UK Royal Air Force and Royal Navy, may
reach as many as 5000 to 6000 aircraft over the next 30 years.

In addition to full-scale development work, the F136 SDD phase includes the
production and qualification of 14 engines, seven of which are for ground-test,
and six plus one spare for flight-tests. The first F136 engine is expected to
test in mid-2008, but earlier risk-reduction tests are due to begin in 2006
using one of the Fighter Engine Team's original pre-SDD development engines.

The F136 engine is expected to flight test on the F-35 in 2010, with production
engines available in 2012. This occurs during the fourth lot of F-35 aircraft
production, which is very early in the overall F-35 production program.

Tom Hartmann, of Rolls-Royce and Senior Vice President for the Fighter Engine
Team said, "We completed pre-SDD testing on schedule and under budget which is
a major achievement, but not unusual for two companies with many decades of
international collaborative experience."

The FET is actively supporting Lockheed Martin's activities to maximize F-35
international industrial participation opportunities. GE and Rolls-Royce
provided a significant number of manufacturing opportunities to the
international partners of which six were involved in the Phase III pre-SDD
period and are working to maximize manufacturing, engineering, and sustainment
opportunities for all eight countries during the SDD phase. A substantial
number of contracts issued, on a single source basis, are due to be announced
in the coming months, and will be awarded on a best value, competitive basis.
In addition, key universities based within the partner nations are in
discussion with the FET regarding their involvement in a number of knowledge
programs.

"Congratulations to the F136 Fighter Engine Team of General Electric and
Rolls-Royce for achieving this significant milestone in the JSF F-35 Program,"
said Dan Crowley, Lockheed Martin Executive Vice President and General Manager
for the F-35 Program.

"The Lockheed Martin JSF Team is confident that the Fighter Engine Team will be
successful in the execution of the F136 System Development and Demonstration
Program Contract and, ultimately, will provide a highly capable propulsion
system for future production F-35 aircraft."

Offering unrivaled experience in performance based logistics, military engine
depot management, single engine, carrier, Short Take-Off Vertical Landing
(STOVL), and stealth aircraft operations, the F136 will be fully and physically
interchangeable to power the F-35 Joint Strike Fighter (JSF). The F136 offers a
single engine configuration for all three versions of the aircraft: STOVL for
the U.S. Marine Corps and U.K. Royal Navy, CTOL for the U.S. Air Force, and the
CV for the U.S. Navy.

With the infusion of best practices and improved technology, the F136 is
expected to exceed requirements for maintainability, affordability, and
reliability for all JSF variants, while enhancing the ability of the U.S.
services and international partners to cooperate in joint coalition operations.

Editor's notes

GE Transportation - Aircraft Engines, with responsibility for 60 percent of the
F136 program, is developing the core compressor and coupled high-pressure/
low-pressure turbine system components, controls and accessories, and the
augmentor. Rolls-Royce, with 40 percent of the F136 program, is responsible for
the front fan, combustor, stages 2 and 3 of the low-pressure turbine, and
gearboxes. International participant countries are also contributing to the
F136 through involvement in engine development and component manufacturing.

For further information, contact:

Rick Kennedy [e-mail] U.S.: 513.243.3372

George McLaren [e-mail] U.S.: 317.230.8260

Dan Meador [e-mail] U.S.: 703.414.5551

Nick Britton [e-mail] U.K : [phone]