Notes to the Financial Statements

Business Combinations

UBS Bunting Limited

On 28 March 2006, UBS acquired the 50% minority interest in its Canadian institutional securities subsidiary, UBS Bunting Limited. The purchase price consists of a combination of cash and UBS stock and has been estimated at CAD 163 million (approximately CHF 182 million). Approximately CAD 23 million (approximately CHF 26 million) of the consideration is linked to the performance of the acquired business in 2006 and 2007 and may be reduced if agreed revenue targets are not achieved. The purchase price allocation has not yet been completed at 31 March 2006. A portion of the difference between the purchase price and the carrying value of the acquired minority interest is expected to be allocated to intangible assets and the remainder will be recognized as goodwill. Through this transaction UBS now wholly owns the Investment Bank’s operations in Canada, which continue to operate under the same leadership team as before this transaction.

Dolfi

On 2 March 2006, UBS acquired Dolfi Finance SAS, a small wealth management firm based in Strasbourg, France, as well as certain assets from Mr Dolfi. The company, established 18 years ago, serves clients in the North Eastern part of France and has more than EUR 600 million of invested assets. The acquisition complements UBS’s existing wealth management business in France.

Discontinued operations

Motor-Columbus

On 23 March 2006, UBS sold its 55.6% stake in Motor-Columbus to a consortium representing Atel’s Swiss minority shareholders (EBM, EBL, the Canton of Solothurn, IB Aarau and newcomers AIL Lugano and WWZ Zug), EOS Holding and Atel, as well as to French utility Electricité de France (EDF) following receipt of relevant regulatory approvals by the Swiss and international authorities.

Motor-Columbus is presented as a discontinued operation in these Financial Statements. The income statements for the comparative prior periods have been restated to reflect that presentation. In total, UBS sold 281,535 Motor-Columbus shares, at a price of CHF 4,600 per share, resulting in a sale price of approximately CHF 1,295 million, which was fully paid in cash. A pre-tax gain of CHF 365 million is reported in the segment “Industrial Holdings”. From 1 January to 23 March 2006, Motor-Columbus had a net profit from operations of CHF 24 million. Together with the after-tax gain on sale of CHF 290 million, the net profit from discontinued operations is CHF 314 million in first quarter 2006.

Acquisitions announced in second quarter

Piper Jaffray Companies’ Private Client Branch Network

On 11 April 2006, UBS announced that it will acquire the Minneapolis-based Private Client Branch Network of Piper Jaffray Companies for USD 500 million (approximately CHF 650 million) in cash and an additional cash consideration of USD 75 million (approximately CHF 98 million) at closing, dependent on certain criteria and business thresholds being met. The transaction is expected to close at the beginning of third quarter 2006, subject to regulatory approval. The transaction also includes the assignment of a portfolio of client loans for approximately USD 300 million (approximately CHF 390 million). The acquisition will be accounted for as a business combination under IFRS.

Piper Jaffray has more than 800 financial advisors, 190,000 household relationships and total client assets of USD 52 billion. It provides wealth management services to private clients including estate planning, retirement planning, brokerage and insurance at nearly 90 branch offices located across 17 states. The operations of Piper Jaffray will be integrated into UBS Wealth Management US and will enhance UBS Wealth Management’s presence in the Midwest and western United States as well as allowing it to serve additional clients.

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