Second Quarter Review 2005

1 July 2005

                    QUARTERLY NEWS UPDATE FROM ROLLS-ROYCE 
                          SECOND QUARTER REVIEW, 2005                          

The first flight of the Airbus A380, powered by the Rolls-Royce Trent 900, and
several services contracts were among the highlights of the second quarter of
2005. The expansion of market share in the civil aerospace sector and the
resulting growth in the aftermarket services business were themes of both the
Annual General Meeting for shareholders and the Paris Air Show.

Rolls-Royce said that, based on last year's level of deliveries, the civil
engine fleet will increase by 40 per cent over the next five years, with half
the fleet coming under long-term service agreements such as TotalCareâ„¢,
representing an 80 per cent increase since 2004.

Services business was won across all sectors, with three TotalCareâ„¢ contracts
for the Trent 700, which powers the A330 and another 40 orders for the
Rolls-Royce CorporateCare® programme - corporate aviation's most comprehensive
engine care service. In addition, TOTAL E&P UK plc signed a multi-million
dollar contract for the technical support of key equipment in service on
offshore platforms in the North Sea.

The Rolls-Royce Turbomeca (RRTM) RTM322 engine has been selected by the
Australian Department of Defence to power its initial order for 12 twin-engine
NH90 multi-role helicopters. Australia becomes the eleventh out of twelve NH90
customers to select the RTM322.

Colin Smith succeeds Dr Mike Howse as Director of Engineering and Technology on
July 1, joining the board as an executive director.

Other business highlights during the quarter:

Marine

  * Rolls-Royce established its first University Technology Centre in Norway,
    to conduct key research programmes in the marine sector. The UTC will
    provide better understanding of the operating environment of marine vessels
    and their propulsor and manoeuvring systems.
   
  * A new generation of coastguard vessels for the Royal Danish Navy will be
    designed by Rolls-Royce. These ships will carry out surveillance and
    law-enforcement duties.
   
  * In Norway, five passenger/vehicle ferries fuelled by liquefied natural gas
    will be powered by Rolls-Royce Bergen diesel engines.
   
  * EISA-Estaleiro Ilha S.A. delivered to the Norwegian group Norskan the
    largest and most complex maritime support vessel ever built in Brazil. The
    Norskan Copacabana is a UT722L anchor handling vessel designed by
    Rolls-Royce. It has been chartered by Petrobras and will operate supporting
    the oil exploration activities in the Campos Basin.
   
Defence

  * The GE Rolls-Royce Fighter Engine Team's (FET) F136 programme has
    successfully completed the first phase of testing for the Joint Strike
    Fighter programme. A full System Development & Demonstration (SDD)
    contract, worth around $1 billion to Rolls-Royce, is due to be awarded in
    August.
   
  * The US Navy has praised an innovative "Power by the Hourâ„¢" support contract
    for the F405 engine on the T-45 Goshawk trainer aircraft. The $50 million
    annual contract, based on engine availability, has resulted in greatly
    increased resource availability and reduced costs.
   
Civil aerospace

  * The Rolls-Royce powered Airbus A380 made a successful maiden flight and has
    made significant progress in its flight test programme. The engines have
    produced excellent results during the test phase with better than predicted
    performance.
   
  * Air China selected the Trent 700 to power its new fleet of Airbus A330
    aircraft, together with a long-term TotalCareâ„¢ agreement in a deal worth
    $800 million.
   
  * France's Regional, a wholly-owned subsidiary of Air France-KLM, has signed
    long-term service agreements covering engines for its fleet of 49 Embraer
    and Fokker jets. A TotalCareâ„¢ contract will cover the airline's AE 3007,
    which power Regional's 37 Embraer ERJ135 and ERJ145s, and a shop visit
    agreement for some of the airline's Tay engines on 12 Fokker 70 and Fokker
    100s.
   
  * Hong Kong-based Dragonair's new 11-year TotalCareâ„¢ maintenance contract
    covers the fleet of Trent 700 engines which will power 11 Airbus A330
    aircraft on lease from ILFC. This deal is in addition to an existing
    TotalCare contract that Dragonair has placed for its five purchased A330
    aircraft.
   
  * Middle East Airlines (MEA) has signed a six-year TotalCareâ„¢ maintenance
    agreement with Rolls-Royce for the Trent 700 engines which power the
    airline's Airbus A330 aircraft.
   
  * Rolls-Royce now has more than 450 aircraft under CorporateCare® or other
    corporate flight hour agreements, with contract values exceeding
    $900 million.
   
  * Carlton, the US forging and machining specialist, became the fifth risk and
    revenue sharing partner (RRSP) on the Trent 1000 engine, and will be
    responsible for supplying titanium forgings for the Trent 1000's fan case
    containment system.
   
Energy

  * Rolls-Royce and TOTAL E&P UK plc signed a multi-million dollar contract for
    the technical support of key equipment in service on offshore platforms
    operated by TOTAL. An extension was signed to the contract covering
    existing Avon and RB211 gas turbines installed on the Alwyn North and Elgin
    gas production platforms in the North Sea.
   
  * Rolls-Royce has been awarded a contract from ExxonMobil for two gas turbine
    packages for an offshore Nigeria project in one of the most prolific oil
    and gas regions in the world. The packages will work alongside five
    identical units ordered in 2003. All units are to be used for the East Area
    Additional Oil Recovery (AOR) Project.
   
Further information on the above can be found at: www.Rolls-Royce.com

Or please contact:

Peter Barnes-Wallis
Director, Financial Communications
Rolls-Royce plc
Tel: [phone]