Note 25

Operating Lease Commitments

At 31 December 2007, UBS was obligated under a number of non-cancellable operating leases for premises and equipment used primarily for banking purposes. The significant premises leases usually include renewal options and escalation clauses in line with general office rental market conditions as well as rent adjustments based on price indices. However, the lease agreements do not contain contingent rent payment clauses and purchase options. The leases also do not impose any restrictions on UBS's ability to pay dividends, engage in debt financing transactions or enter into further lease agreements.

The minimum commitments for non-cancellable leases of premises and equipment are presented as follows:

CHF million	31.12.07
Operating leases due
2008	1,085
2009	1,009
2010	920
2011	833
2012	762
2013 and thereafter	3,769
Subtotal commitments for minimum payments under operating leases	8,378
Less: Sublease rentals under non-cancellable leases	742
Net commitments for minimum payments under operating leases	7,636

CHF million	31.12.07	31.12.06	31.12.05
Gross operating lease expense	1,251	1,170	1,232
from continuing operations	1,248	1,150	1,084
from discontinued operations	3	20	148
Sublease rental income from continuing operations	54	56	51
Net operating lease expense	1,197	1,114	1,181
from continuing operations	1,194	1,094	1,033
from discontinued operations	3	20	148

Operating lease contracts include non-cancellable long-term leases of office buildings in most UBS locations. At 31 December 2007, the minimum lease commitments for 17 office locations each exceeded CHF 100 million. Non-cancellable minimum lease commitments for three office locations in New Jersey, London and Zurich each exceeded CHF 500 million.

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