The Corporation has successfully employed the rail plus property business model as its foundation business strategy. This hybrid model gives rise to fair-priced public transport while allowing operational resilience as a commercial entity. Accordingly, revenue streams are derived from rail services augmented by the financial opportunity of the development rights to the properties attached to the rail network.

The purchase of the property assets and development rights from the KCRC as part of the rail merger package extends the Company's financial planning under the rail plus property model by an additional 7-10 years to present strategy. With this acquisition, our asset base continues to be property strong giving rise to potential opportunity in this traditionally solid performing industry.

With the use of rail and property cross-subsidised sources, we have consistently operated as a profitable business. However, with the business momentum building in international markets and emerging trends in urban dynamics within Hong Kong, flexibility is required when studying new projects. Alternative fit for purpose agreements are considered as seen with the West Island Line, Shatin to Central Link, the Regional Express and in our international operating concessions. In view of these developments and the ongoing corporate financial planning, all projects regardless of financing model are assessed under the financial premise of a WACC + (Weighted Average Cost of Capital plus) basis, as stated in our listing prospectus in 2000.

MTR Corporation was amongst the first of Hong Kong corporate entities to obtain internationally-recognised long-term credit ratings (1988) from Moody's and S&P. Set at par with the sovereign ratings of the Hong Kong SAR Government, the Corporation has maintains such status based on sound credit fundamentals, prudent financial management and continuous Government support. The Corporation is also a member of the MSCI and FTSE-All-World indices as global benchmarks in financial performance. And, we maintain our inclusion in the DJSI and FTSE4Good as confirmation of our best practice towards sustainable development.

In 2007, boosted by Hong Kong's robust economic performance, we delivered another strong year in passenger numbers, turnover and earnings. Our 2007 Annual Report discusses these and further financial performance in detail.