We invest in commodities as a hedge against the cost of paying inflation-protected pensions.

In the short term, commodity prices reflect supply and demand imbalances in global markets as well as short-term changes in inflation. Over the long term, commodity prices reflect inflation expectations.

We primarily invest through swap agreements linked to the S&P GSCI and the S&P GSCI 3-Month Forward. This index is a key barometer for investment performance in the commodity markets. It includes exposure to oil and gas, industrial metals, precious metals, agricultural crops and livestock.

Investments in commodities totalled $5.7 billion at the end of 2011, compared to $5.2 billion at the end of 2010.