Fund Description: ProShares UltraShort FTSE Europe, formerly ProShares UltraShort MSCI Europe, is an exchange-traded index fund or Index ETF which is a separate investment portfolio of the ProShares Trust, an investment management company. INVESTMENT OBJECTIVE: ProShares UltraShort FTSE Europe seeks daily investment results, before fees and expenses, that correspond to twice (200%) the inverse (opposite) of the daily performance of the FTSE Developed Europe Index, formerly the MSCI Europe Index. The Fund does not seek to achieve its stated investment objective over a period of time greater than one day. This means that the return of the Fund for a period longer than a single trading day will be the result of each day’s returns compounded over the period, which will very likely differ from twice (200%) the inverse of the return of the MSCI Europe Index for that period. The Fund is different from most exchange-traded funds in that it seeks leveraged returns and only on a daily basis. The Fund should be used only by knowledgeable investors who understand the potential consequences of seeking daily leveraged investment results and should actively monitor their investments as frequently as daily. INDEX DESCRIPTION: The FTSE Developed Europe Index is comprised of large- and mid-cap stocks and targets the performance of approximately 500 large- and mid-cap companies. The Index utilizes free float-adjusted market capitalizations and components are screened for liquidity. As of June 30, 2012, the Index consists of the following 16 developed market countries: Austria, Belgium/Luxembourg, Denmark, Finland, France, Germany, Greece, Ireland, Italy, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland and the United Kingdom. The Index is published under the Bloomberg ticker symbol FTR1DEUR. FUND STRATEGY: The Fund invests in derivatives that ProShare Advisors believes should have similar daily performance characteristics as twice (200%) the inverse of the daily return of the Index. Assets of the Fund not invested in derivatives will typically be held in money market instruments. In seeking to achieve each Fund’s investment objective, a mathematical approach to investing is used which determines the type, quantity and mix of investment positions that a Fund should hold to approximate the performance of the Index. A sampling process involves selecting a representative sample of securities in an index principally to enhance liquidity and reduce transaction costs while seeking to maintain high correlation with, and similar aggregate characteristics to, the Index. At the close of the markets each trading day, the Fund will seek to position its portfolio so that the Fund’s exposure to the Index is consistent with the Fund’s investment objective. The impact of the Index’s movements during the day will determine whether the Fund’s portfolio needs to be re-positioned. FUND MANAGEMENT: ProShare Advisors serves as the investment advisor and provides investment advice and management services to the Fund.