Item 2

Appropriation of retained earnings and distribution

A. Proposed appropriation of retained earnings and distribution of capital contribution reserves
The Board of Directors proposes the following appropriation:

CHF million

31 December 2011

Profit for the period

5,440

Total available for appropriation

5,440

Appropriation to other reserves

5,440

Total appropriation

5,440

The Board of Directors proposes the payout of CHF 0.10 per share of CHF 0.10 par value out of capital contribution reserves.

CHF million, except where indicated

31 December 2011

Total capital contribution reserves before proposed distribution

42,537 1, 2

Proposed distribution of capital contribution reserves within general statutory  reserves: CHF 0.10 per dividend-bearing share 3

(383)

Total capital contribution reserves after proposed distribution

42,154

B. Explanation
The profit of the financial year 2011 will be attributed to other reserves.

Provided that the proposed distribution of capital contribution reserves is approved, the payment of CHF 0.10 per share would be made on 10 May 2012 to holders of shares on the record date 9 May 2012. The shares will be traded ex-dividend as of 7 May 2012, and accordingly the last day on which the shares may be traded with entitlement to receive a payout will be 4 May 2012.