Financial Performance and Guidance

DEFINITIONS AND CALCULATIONS Return on Capital: RoC = net operating profit after tax / average invested capital Net operating profit is defined as underlying operating profit after tax (where the tax charge reflects the group tax charge after removing the estimated tax shield on net financing costs). Invested capital is defined as total assets (excluding cash and cash equivalents and any surplus on post-retirement schemes) minus current liabilities (excluding debt), with an average calculated as the difference between opening and closing balance sheets. Total cash costs / Gross margin: TCC/GM = (self-funded R&D expenditure + C&A costs) / underlying gross profit Self-funded research and development (R&D) expenditure excludes the impact of contributions (government funding, amortisation and impairment of capitalised costs and amounts capitalised during the year) and fees. Free Cash Flow is cash from operating activities including capital expenditure and movement in investments, capital elements of lease payments, interest paid and excluding amounts spent or received on activity relating to business acquisitions or disposals, financial penalties paid and exceptional restructuring payments. The information in this document is proprietary and confidential to Rolls-Royce and is available to authorised recipients only copying and onward distribution is prohibited other than for the purpose for which it was made available. Rolls-Royce content only. ROLLS R ROYCE ©2024 Rolls-Royce 03/04/2024 Not Subject to Export Control 80

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