Notes (unaudited)

In second quarter 2008, UBS recognized an incremental net deferred tax asset of CHF 3,885 million relating to losses incurred in UBS AG, Switzerland, that can be utilized to offset taxable income in Switzerland in future years. The losses relate to the write-down of investments in US subsidiaries, following losses in these subsidiaries (predominantly related to US real estate) and they also relate to treasury share transactions. The recognition of the deferred tax asset impacted the income statement by CHF 3,200 million and an amount of CHF 685 million has been reflected directly in equity. The realized losses on treasury shares are recognized in share premium under IFRS, as is the related deferred tax asset.