Rolls-Royce to Relocate Large Engine Testing Facility to U.S.

CHANTILLY, Va., Feb. 15, 2005 -- Rolls-Royce announced today that it had selected the National Aeronautics And Space Administration's John C. Stennis Space Center in Mississippi as the preferred site for relocation of its large engines outdoor test facility from the U.K. This is the first time Rolls-Royce has partnered in this manner with NASA.

The facility will be used to test development and prototype engines for performance, noise and other factors. In addition to this Rolls-Royce site, there are only two other such facilities in the world.

"This move highlights our growing commitment to the U.S.," said James M. Guyette, President and CEO, Rolls-Royce North America. "As a global company with nearly 100 years of operations in this country, we are pleased to be able to conduct this important work on these shores."

Rolls-Royce will spend $42 million on construction and facility upgrades as well as utilize existing infrastructure of the Stennis Space Center.

"We are pleased that Rolls-Royce has chosen our region to perform this work," said Mississippi Senator Trent Lott. "The people of Mississippi and Rolls-Royce have enjoyed a close relationship for some time and this relocation only enhances that partnership."

Rolls-Royce also has a Naval Marine foundry in Pascagoula, Mississippi and plans to unveil its expansion later this month that will enhance manufacturing capabilities and improve production efficiencies across a range of marine products.

Work involving the company's two latest, high-thrust Trent engine programs will take place at the Stennis Space Center in 2007 when the Trent 900, which powers the Airbus A380, and the Trent 1000, being developed for the Boeing 787 Dreamliner, both undergo noise measurement testing.

Rolls-Royce briefed employees in 2001 that it planned to close its long- established outdoor testing facility at Hucknall, U.K.

Rolls-Royce operates in four global markets -- civil aerospace, defense aerospace, marine and energy. It is investing in technology and capability that can be exploited in each of these sectors to create a competitive range of products.

The success of these products is demonstrated by the company's rapid and substantial gains in market share over recent years. The company now has a total of 54,000 gas turbines in service worldwide. The investments in product, capability and infrastructure to gain this market position create high barriers to entry.

Rolls-Royce has a broad customer base comprising more than 500 airlines, 4,000 corporate and utility aircraft and helicopter operators, 160 armed forces and more than 2,000 marine customers, including 70 navies. The company has energy customers in nearly 120 countries. Rolls-Royce employs around 35,000 people, of which 21,000 are in the U.K. Forty per cent of its employees are based outside the U.K. -- including 5,000 in the rest of Europe and 8,000 in North America.

The large installed base of engines generates demand for the provision of services. A key element of the company's strategy is to maximize services revenues, which have increased by 60 per cent over the past five years, by the provision of a comprehensive portfolio of services.

Annual sales total nearly 6 billion pounds Sterling, of which 55 per cent are services revenues. The order book is more than 21 billion pounds Sterling, which, together with demand for services, provides visibility as to future activity levels.