Note 2 Segment Reporting by Business Group

UBS’s financial businesses are organized on a worldwide basis into three Business Groups and the Corporate Center. Global Wealth Management & Business Banking consists of three segments, Wealth Management International & Switzerland, Wealth Management US and Business Banking Switzerland. The Corporate Center consists of two segments, Corporate Functions and Private Banks & GAM, which was sold on 2 December 2005. The Industrial Holdings segment holds all industrial operations controlled by the Group. In total, UBS reports eight business segments.

Global Wealth Management & Business Banking

Global Wealth Management & Business Banking comprises three segments. Wealth Management International & Switzerland offers a comprehensive range of products and services individually tailored to affluent international and Swiss clients, operating from offices around the world. Wealth Management US is a US financial services firm providing sophisticated wealth management services to affluent US clients through a highly trained financial advisor network. Business Banking Switzerland provides individual and corporate clients in Switzerland with a complete portfolio of banking and securities services, focused on customer service excellence, profitability and growth, by using a multi-channel distribution. The segments share technological and physical infrastructure, and have joint departments supporting major functions such as e-commerce, financial planning and wealth management, investment policy and strategy.

Global Asset Management

Global Asset Management provides investment products and services to institutional investors and wholesale intermediaries around the globe. Clients include corporate and public pension plans, financial institutions and advisors, central banks as well as charities, foundations and individual investors.

Investment Bank

The Investment Bank operates globally as a client-driven investment banking and securities firm providing innovative products, research, advice and complete access to the world’s capital markets for intermediaries, governments, corporate and institutional clients and other parts of UBS.

Corporate Center

Corporate Center comprises two segments. Corporate Functions ensures that the Business Groups operate as a coherent and effective whole with a common set of values and principles in such areas as risk management and control, financial reporting, marketing and communications, funding, capital and balance sheet management, management of foreign exchange earnings and information technology infrastructure. Private Banks & GAM, the second segment, was sold on 2 December 2005.

Industrial Holdings

The Industrial Holdings segment includes the non-financial businesses of UBS. The most significant business in this segment is Motor-Columbus, a financial holding company whose only significant asset is a 59.3% interest in the Atel Group. Atel is a European energy provider focused on domestic and international power generation, electricity transmission, energy services as well as electricity trading and marketing. The private equity business investing UBS and third-party funds, primarily in unlisted companies, is reported in Industrial Holdings.

For the year ended 31 December 2005

Internal charges and transfer pricing adjustments are reflected in the performance of each business. Revenue-sharing agreements are used to allocate external customer revenues to a Business Group on a reasonable basis. Transactions between Business Groups are conducted at internally agreed transfer prices or at arm’s length.

	Financial Businesses							Industrial Holdings	UBS
	Global Wealth Management & Business Banking			Global Asset Management	Investment Bank	Corporate Center
CHF million	Wealth Management & International & Switzerland	Management US	Business Banking Switzerland			Private Banks & GAM	Corporate Functions
Income ¹	9,024	5,158	4,949	2,487	17,448		455	11,079	50,600
Credit loss (expense) / recovery	(8)	0	231	0	152		0	0	375
Total operating income	9,016	5,158	5,180	2,487	17,600		455	11,079	50,975
Personnel expenses	2,579	3,460	2,450	988	9,259		1,167	1,146	21,049
General and administrative expenses	804	1,047	994	304	2,215		1,084	599	7,047
Services to / from other business units	1,371	223	(634)	116	640		(1,730)	14	0
Depreciation of property and equipment	89	65	72	21	136		857	253	1,493
Amortization of other intangible assets ²	7	49	0	1	53		17	207	334
Goods and materials purchased								8,003	8,003
Total operating expenses	4,850	4,844	2,882	1,430	12,303		1,395	10,222	37,926
Business Group performance
from continuing operations before tax	4,166	314	2,298	1,057	5,297		(940)	857	13,049
Business Group performance
from discontinued operations before tax						4,556	8	124	4,688
Business Group performance before tax	4,166	314	2,298	1,057	5,297	4,556	(932)	981	17,737
Tax expense on continuing operations									2,549
Tax expense on discontinued operations									498
Net profit									14,690
Additional information ³
Total assets	223,719	64,896	176,713	40,782	1,768,391		(225,800)	11,549	2,060,250
Total liabilities	219,069	59,567	170,544	39,191	1,750,762		(242,640)	11,814	2,008,307
Capital expenditure	81	84	58	16	138	25	1,264	299	1,965

Management reporting based on expected credit loss

For internal management reporting purposes, we measure credit loss using an expected loss concept. This table shows Business Group performance consistent with the way in which our businesses are managed and the way Business Group performance is measured. Expected credit loss reflects the average annual costs that are expected to arise from positions in the current portfolio that become impaired. The adjusted expected credit loss reported for each Business Group is the expected credit loss on its portfolio plus the difference between credit loss expense and expected credit loss, amortized over a three year period. The difference between these adjusted expected credit loss figures and the credit loss expense recorded at Group level for reporting purposes is reported in Corporate Functions.

Income ¹	9,024	5,158	4,949	2,487	17,448		455	11,079	50,600
Adjusted expected credit loss	(13)	(2)	122	0	36		232	0	375
Total operating income	9,011	5,156	5,071	2,487	17,484		687	11,079	50,975
Personnel expenses	2,579	3,460	2,450	988	9,259		1,167	1,146	21,049
General and administrative expenses	804	1,047	994	304	2,215		1,084	599	7,047
Services to / from other business units	1,371	223	(634)	116	640		(1,730)	14	0
Depreciation of property and equipment	89	65	72	21	136		857	253	1,493
Amortization of other intangible assets ²	7	49	0	1	53		17	207	334
Goods and materials purchased								8,003	8,003
Total operating expenses	4,850	4,844	2,882	1,430	12,303		1,395	10,222	37,926
Business Group performance
from continuing operations before tax	4,161	312	2,189	1,057	5,181		(708)	857	13,049
Business Group performance
from discontinued operations before tax						4,508	56	124	4,688
Business Group performance before tax	4,161	312	2,189	1,057	5,181	4,508	(652)	981	17,737
Tax expense on continuing operations									2,549
Tax expense on discontinued operations									498
Net profit									14,690

1 Impairments of financial investments for the year ended 31 December 2005 were as follows: Global Wealth Management & Business Banking CHF 10 million; Global Asset Management CHF 0 million; Investment Bank CHF 0 million; Corporate Center CHF 16 million and Industrial Holdings CHF 81 million. 2 For further information regarding goodwill and other intangible assets by Business Group, please see Note 15: Goodwill and Other Intangible Assets. 3 The funding surplus or requirement is reflected in each Business Group and adjusted in Corporate Center.

For the year ended 31 December 2004

	Financial Businesses							Industrial ¹ Holdings	UBS
	Global Wealth Management & Business Banking			Global Asset Management	Investment Bank	Corporate Center
CHF million	Wealth Management & International & Switzerland	Management US	Business Banking Switzerland			Private Banks & GAM	Corporate Functions
Income ²	7,701	4,741	5,064	2,022	16,090		112	6,440	42,170
Credit loss (expense) / recovery	(1)	3	92	0	147		0	0	241
Total operating income	7,700	4,744	5,156	2,022	16,237		112	6,440	42,411
Personnel expenses	2,119	3,320	2,426	893	8,152		796	906	18,612
General and administrative expenses	642	767	1,064	299	2,538		1,077	773	7,160
Services to / from other