Rolls-Royce Regulatory News (RR.)

29 Jun 2012 10:25

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. 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 GoodsonDirector - Investor RelationsRolls-Royce plcTel: +44 (0)20 7227 9237simon.goodson@rolls-royce.comMedia:Josh RosenstockDirector of External CommunicationsRolls-Royce plcTel: +44 (0)20 7227 9163josh.rosenstock@rolls-royce.comwww.Rolls-Royce.comCautionary 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.