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. The development of the pension liabilities and the funds is disclosed in Note 23 to the consolidated financial statements of the 2007 Annual Report. We are also continuing 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 try to mitigate such increases by limiting the amount payable by the Corporation. A report on the status of the dispute concerning a change in the amount of our contribution is provided in Note 32 to the consolidated financial statements of the 2007 Annual Report.