The civil aerospace business continued to expand its broadly-based installed fleet and once again generated growth in customer services.

New orders announced during 2006 amounted to approximately £7 billion, resulting in a record order book of £20 billion.

The Trent-powered Airbus A380 received its Type Certificate from the US FAA and the European EASA airworthiness authorities, the first time clearance has been awarded simultaneously by the two bodies.

The Trent 900, chosen by seven A380 customers, continued to build maturity through testing, completing almost 31,000 engine cycles by the end of 2006.

Rolls-Royce reacted swiftly to the announcement that A380 deliveries had been delayed by a further 12 months by halting production and procurement for the Trent 900 until October 2007. The strength and breadth of our business portfolio enable us to absorb such changes with little overall financial impact.

We signed a commercial and technical agreement with Airbus to offer a next-generation Trent for all variants of the new A350 XWB, due to enter service in 2013.

The Trent 1000, which had its first success in China, with an order to power Air China's fleet of Boeing 787s, completed a successful first run exactly on schedule against a date set three years earlier.

Towards the end of the year, preparations began for the first flight-test of the Trent 1000 on the Company's Boeing 747 flying testbed in readiness for the maiden flight in the spring of 2007.

Air New Zealand's decision to convert its existing Boeing 787-8 order to the larger 787-9 variant means that the Trent 1000 is now the launch engine for all three versions of the aircraft. It has been selected by 11 customers and operators.

As the Trent series passed 20 million hours in service, the first member of the family, the Trent 700, continued to win new business with airlines including Lufthansa and Singapore Airlines.

In Bangkok, celebrations with launch customer Thai Airways International marked the tenth anniversary of the Trent 800 in service, while in Australia, the RB211–524, workhorse of the Qantas Boeing 747 fleet, passed the milestone of ten million flying hours with the airline.

International Aero Engines (IAE), in which Rolls-Royce is a major shareholder, won a significant follow-on contract from China Southern for V2500s to power a further 50 Airbus A320 series airliners. IAE booked orders for a total of 454 engines from 14 customers, with a value to Rolls-Royce of US$1.2 billion. During 2006, the transfer of V2500 production from Derby in the UK to Dahlewitz in Germany, was completed, creating capacity in the UK for rising Trent production.

Our long-standing relationship with Gulfstream Aerospace was reflected in a ceremony marking the delivery of its 3,000th Rolls-Royce engine.

We also celebrated the tenth anniversary of the AE 3007C on the Citation X, the fastest business jet in service. China's Hainan Airlines Group ordered 50 Embraer ERJ 145 regional jets, also powered exclusively by the AE 3007 engine.

Civil engine deliveries reduced by three per cent to 856, with weak demand in the regional sector, partially offset by increased Trent engine deliveries. Our underlying original equipment revenues grew by 15 per cent, as a result of the increased proportion of high-value products in the sales mix.

Civil fleet flying hours rose by eight per cent compared with 2005, driven by the increased number of engines in service and global traffic growth.

Underlying services revenues increased by 15 per cent to £2.3 billion, representing 59 per cent of civil aerospace revenues. More than 48 per cent of our modern jet fleet is covered by TotalCare® or CorporateCare service agreements.