Market leader in the civil and defense aircraft engine businesses. Substantial order backlog of £59 billion. Increasing revenues from recurring engine servicing activities, which offset the effects of more cyclical engine sales. Strong liquidity and solid cash flow generation. Civil aircraft engine business is cyclical and capital intensive. Significant exposure to foreign currency risks. Defense business reliant on government budgets. The ratings on Rolls-Royce PLC reflect Standard&Poor's Ratings Services view of the group's strong market positions in the civil and military aviation industries, high share of more-stable aftermarket sales, and fairly diverse earnings base. In addition, Rolls-Royce enjoys strong and relatively stable cash generation and, in our view, demonstrates good liquidity management. We consider these factors to be
