I think that it was said at the 2017 Accounts Presentation that RR would be done with these problems by 2022. So they will take roughly a similar charge in each of the four years to then. It has proved a mighty expensive error on the T900 which started design in 2001 and the original T1000 from 2005. I think that normally, one can expect some infant mortality on mechanical things e.g. the engines for the current narrow bodies. But this RR issue after some many years of EIS is a new hazard. It will result in more testing on new designs, and thus longer times to market. Thus the UltraFan looks more likely to EIS in 2027 or later.
There was also a question on the Boeing Mom engine. The RR response was that they are in business to sell engines, but, but . . . The interesting bit was that they were going to be keeping up the rate of research spending to prepare for the UltraFan. So if the Mom gets the go ahead, and a suitably sized UltraFan is chosen, then RR would could bring forward the monetisation of this investment at an earlier date. The recording is on the RR website.
My take on this is that either the P&W will be the current technology to be used on the Mom, or the UltraFan may be the other newer tech choice. Neither Airbus or Boeing are likely to too happy with the risks to their new Mom sized new projects of using a technology from P&W which will be out dated in a just a few years by the UltraFan. I could be wrong of course.
One of the little nuggets was that the cost reductions achieved on the XWB for the A359 was working well, with the loss per engine cut to £1.5 million. But this is a lot of money when you are making c 400 engines annually. RR have adjusted their policy on capitalising development, to (or as I understand it) bring it into line with GE. RR will extend the time frame of capitalisation by a year of so to include the costs of initial production and re-work of delivered engines. It was not clear to me if the City money folk understood this?
RR are spending c £1 billion annually of technology across the group which is cost against current year profit. And another £1 billion on capex for buildings, plant and machinery, which is depreciated against profits normally. They are not being pressed by the London money folk to cut on these spends, as they are doubling the size of the firm, and securing its future as No 2 in civil engines. This is the opposite of would be happening in New York, who would want first call on cash to be paid out in dividend or share buy back. (Hence Boeing's plight.)
RR have a powerful top management, which is about halfway to dragging it from being a bloated over-centraised outfit it into the firm it ought to be. This is a very considerably success after only 4 years since the new chief took on the challenge of a basket case. Mind, he was a Board Member, so he knew what could be done.