In the U.S.A., the United Kingdom, and certain other countries, we use pension funds run by independent external fund managers to manage and finance pension commitments. In 2006, Continental established legally independent trust funds under a contractual trust arrangement for the funding of post-employment obligations of certain subsidiaries in Germany. Weak financial markets can impact the pension fund’s performance and lead to significant additional expenses. Developments on the international equity markets in the past fiscal year have had a negative impact on performance. By contrast, our investment ratio in the bonds sector and on the money market had a stabilizing effect. The development of the pension liabilities and the funds is disclosed in Note 24 to the consolidated financial statements of the annual report 2008. For some time now, we have been proceeding with our gradual transition to defined contribution pension plans to further reduce the risks from pension commitments.

Some of the subsidiaries in the U.S.A. also have obligations to contribute to the healthcare costs of retirees. A further increase in these costs cannot be excluded, but we aim to mitigate this risk by limiting the amount payable by the corporation.