Our services strategy remains unchanged with a continued focus on providing the right equipment availability at the right price for all of our customers in each of our business sectors. Frequently, this will entail long-term fixed price contracts in which we apply our skills to managing our customers' assets and we are proud of our record of delivering our availability commitments. We are building a record of repeat business and contract renewals, often involving increases in scope. This demonstrates customer confidence in our approach and ability to deliver and gives us confidence in the sustainability of our model.

In the civil aerospace market, we continued to make progress, with 48 per cent of the fleet by value now under management. Often these contracts will involve the maintenance and associated logistics of accessories in addition to the engines and, consequently, we developed 'ComponentCare'. Thirty seven such contracts have now been implemented. The business jet market has been particularly strong and 165 CorporateCare® contracts were signed in 2006, exceeding the previous year's record of 103.

The defence business had a strong year. Highlights included the Hercules Integrated Operational Support Contract covering 244 AE 2100 and T56 engines and the extension of the Spey engine contract and the inclusion of accessories in its scope. A series of contract wins in the US over the past two years, including the third renewal of the F405 contract, have resulted in more than 1,000 engines now being subject to Performance Based Logistics contracts for the US Department of Defense.

The successful execution of these service contracts requires a well co-ordinated approach, from pricing and monitoring and building the appropriate supply chains to day-to-day management of service delivery. As we invest to support our service business, two themes recur: closeness and responsiveness to the customer and partnership and integration across the supply chain.

Our operations rooms exemplify this commitment to responsiveness and integration by collecting, analysing, sharing and acting upon customer data to deliver the performance our customers demand. They are the focal point for our service delivery, assessing the condition of the fleets and instructing logistics and field maintenance activity accordingly.

To complement the operations rooms and our remote diagnostic capability, we are building up the local service infrastructure in each of our sectors. In the civil market we have On-Wing Care centres in Hong Kong, London and Newark in the US, with additional centres opening in 2007. In the energy and marine sectors, we have embarked upon a multi-year plan to expand our global service network in the Americas, Europe, Middle East and Asia to provide engineering and logistics support closer to the point of demand. In defence markets, we have teamed with Kellogg Brown & Root to win a support contract for the Australian Navy and have entered into agreements with Serco and Goodrich to support the delivery of extended scope contracts.

Comprehensive global repair networks are central to our strategy. Our new facility in Derby opened and the joint venture with Lufthansa Technik, N3, in Germany will commence operations in 2007. In the defence sector, we continue to support the UK Ministry of Defence's Combat Aero Engine Support Alignment Study and our Ansty facility has a key role to play in the support of the RAF's requirements.