Annual report copywriting - BAA

BAA continued to progress on two major fronts: consolidating, streamlining and more effectively capitalising on its legacy assets; pursuing its global ambitions into new regions and areas of operation. As in earlier reports, the emphasis was on vision, clarity and forthrightness.

Financial review

We run a unique portfolio of airports, serving different markets and different passenger needs within the dynamic aviation sector. All the opportunities that this presents are underpinned by what is the bedrock of our financial performance: healthy cash flows combined with an ever-improving efficient balance sheet. This supports our investment strategy, enabling us to create additional shareholder value.

This year, we made significant progress in realising some of the Group's strategic ambition. A key example is the acquisition of a 75% (minus one share) interest in Budapest Airport in December. We are restructuring this business with speed, reflecting the depth of planning and due diligence prior to acquisition. The refinancing of the Budapest acquisition bank facility was successfully concluded in February, following the raising of £1,940 million of bonds in a unique set of circumstances due to the announcement of the Ferrovial Consortium's potential cash bid for BAA after the pricing of the bonds but before settlement.

BAA's continuing excellent progress towards the completion of Heathrow Terminal 5 (T5) within timetable and budget, and our transaction with Arora (selling this hotel developer land to build a high-quality hotel adjacent to the new terminal at Heathrow) affirms BAA management's ability to implement projects of material scale, whilst, at the same time, finding and executing innovative opportunities to realise value.

The experience we gain from T5 will be invaluable, as we plan, and then undertake other ambitious projects, such as the expansion of Stansted and the transformation of the central terminal area at Heathrow, Heathrow East. Strong implementation of innovative plans will benefit the industry, our customers (airlines and passengers) and our shareholders.

BAA's continued investment in improving its service and efficiency - the Delivering Excellence change programme – is now beginning to bear fruit and is on course to deliver the planned f45 millior of sustainable benefits from 2008/09.