Rolls-Royce Scores F-35 Technology Contract

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Rolls-Royce Holdings PLC has announced a production and support contract worth up to $442 million. The work involves technology for an F-35 aircraft. The company has a new interim depot facility under construction in Indianapolis to provide repair services for the program. February 9, 2015

News Release

LONDON - Rolls-Royce has been awarded three contracts totalling up to $442 million to produce and support LiftSystems for F-35B Lightning II aircraft, including price reductions from prior contracts. The new contracts cover Low Rate Initial Production of 17 LiftSystems for F-35B aircraft, plus support, for two contract periods (LRIP 7-8), and were agreed between Rolls-Royce and Pratt & Whitney, the propulsion provider for the F-35 program.

The LRIP 8 contract reflects a reduction in average price per LiftSystem since LRIP 6, as Rolls-Royce continues to demonstrate success in cost reduction efforts for the F-35 Lightning II program.

LRIP7 also includes delivery of the 50th LiftFan for installation in an F-35B, as the LiftSystem continues to mature in production. The 50th LiftFan meets all Initial Operational Capability (IOC) requirements for the US Marine Corps.

Rolls-Royce has been attacking cost through 150 affordability initiatives internally and throughout the supply chain. Despite the impacts on the program of the probation period, Rolls-Royce is on track to meet the mature cost target and has invested more than $85 million to support the F-35 program in recent years.

John Gallo, Rolls-Royce, President Defense Programs, said, "Rolls-Royce remains committed to reducing LiftSystem costs to meet affordability requirements for the F-35 Lightning II program. Through more than 150 affordability initiatives, we are focused on innovation and delivering cost reduction to the program and the operators."

The Rolls-Royce LiftSystem is comprised of a LiftFan, 3-Bearing Swivel Module, a roll post under each wing, and a shaft connected to the aircraft?¦s F135 engine.

F-35 pilots say the Rolls-Royce LiftSystem has proven to be extremely stable and dependable in flight, with superior aircraft software controls making it easy to operate.

Rolls-Royce is the only company in the world that produces vertical lift technology for fighter aircraft, and has led the aerospace industry in Short Take Off and Vertical Landing (STOVL) technology since 1954, when the company first tested the "Flying Bedstead" technology demonstrator.

Rolls-Royce also continues to expand support for the F-35 program, with field service representatives collaborating with aircraft maintainers at military bases across the US, and a new interim depot facility under development at Rolls-Royce in Indianapolis to provide repair services. The Rolls-Royce LiftSystem was recently recognized as a finalist for the MacRobert Award in the UK, the premier award for innovation in engineering, given by the Royal Academy of Engineering.

About Rolls-Royce Holdings plc

1. Rolls-Royce?¦s vision is to create better power for a changing world via two main business

segments, Aerospace and Land & Sea. These business segments address markets with two

strong technology platforms, gas turbines and reciprocating engines, for use on land, at sea and

in the air. Aerospace comprises Civil Aerospace and Defence Aerospace. Land & Sea

comprises Marine, Nuclear and Power Systems.

2. Rolls-Royce has customers in more than 120 countries, comprising more than 380 airlines and

leasing customers, 160 armed forces, 4,000 marine customers, including 70 navies, and 1,600

energy and nuclear customers.

3. Our business is focused on the 4Cs:

„h Customer ?V placing the customer at the heart of our business

„h Concentration ?V deciding where to grow and where not to

„h Cost ?V continually looking to increase efficiency

„h Cash ?V improving financial performance.

4. Annual underlying revenue was $24.8 billion* in 2013, around half of which came from the

provision of aftermarket services. The firm and announced order book stood at stood at $112.64

billion at 30 June 2014.

5. In 2013, Rolls-Royce invested $1.76 billion on research and development. We also support a

global network of 31 University Technology Centres, which position Rolls-Royce engineers at

the forefront of scientific research.

6. Rolls-Royce employs over 55,000 people in 45 countries. Over 17,000 of these are engineers.

The Energy businesses transferred to Siemens in December 2014 have just under 2,100

permanent employees.

7. The Group has a strong commitment to apprentice and graduate recruitment and to further

developing employee skills. In 2013 we employed 379 graduates and 288 apprentices through

our worldwide training programs. Globally we have over 1,000 Rolls-Royce STEM ambassadors

who are activity involved in education programmes and activities; we have set ourselves a target

to reach 6 million people through our STEM outreach activities by 2020.

*Based on an exchange rate of $1.60

For further information, please contact:

Nick Britton George McLaren

Rolls-Royce - Defence Communications Rolls-Royce - Defence Communications

E: nick.britton@rolls-royce.com E: george.h.mclaren@rolls-royce.com

Tel: +44 7870 242620 (UK) Tel: 1-317 366-9624 (US)

www.rolls-royce.com