Note 39

Additional Disclosures Required under SEC Rules

Note 39.1 Industrial Holdings' Income Statement Note 39.2 Supplemental Guarantor Information

Note 39.1 Industrial Holdings' Income Statement

From 1 July 2004, UBS held a majority ownership interest in Motor-Columbus and consolidated it in its Financial Statements. Motor-Columbus was sold on 23 March 2006, and it is presented below as a discontinued operation in the income statements for the years ended 31 December 2006 and 31 December 2005. Refer to Note 36 Discontinued Operations for further information.

The following table provides information required by Regulation S-X for commercial and industrial companies, including a condensed income statement and certain additional balance sheet information.

	As of or for the year ended
CHF million	31.12.07	31.12.06	31.12.05

Operating income
Net Sales	268	262	229

Operating expenses
Cost of products sold	229	220	196
Marketing expenses	2	2	2
General and administrative expenses	14	20	22
Amortization of intangible assets	6	5	6
Other operating expenses	161	63	118
Total operating expenses	412	310	344
Operating profit	(144)	(48)	(115)

Non-operating profit
Interest income	6	0	6
Interest expense	(9)	(44)	(54)
Other non-operating income, net	708	336	589
Non-operating profit	705	292	541

Net profit from continuing operations before tax	561	244	426
Tax expense	36	34	169
Equity in income of associates, net of tax	(25)	11	25
Net profit from continuing operations	500	221	282
Net profit from discontinued operations	136	887	437
Net profit	636	1,108	719
Net profit attributable to minority interests	50	104	207
Net profit attributable to UBS shareholders	586	1,004	512

Accounts receivable trade, gross	27	103
Allowance for doubtful receivables	(2)	(7)
Accounts receivables trade, net	25	96

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Note 39.2 Supplemental Guarantor Information

Guarantee of PaineWebber securities

Following the acquisition of Paine Webber Group Inc., UBS AG made a full and unconditional guarantee of the senior and subordinated notes and trust preferred securities ("Debt Securities") of PaineWebber. Prior to the acquisition, PaineWebber was an SEC Registrant. Upon the acquisition, PaineWebber was merged into UBS Americas Inc., a wholly owned subsidiary of UBS.

Under the guarantee, if UBS Americas Inc. fails to make any timely payment under the Debt Securities agreements, the holders of the Debt Securities or the Debt Securities trustee may demand payment from UBS without first proceeding against UBS Americas Inc. UBS's obligations under the subordinated note guarantee are subordinated to the prior payment in full of the deposit liabilities of UBS and all other liabilities of UBS. At 31 December 2007, the amount of senior liabilities of UBS to which the holders of the subordinated debt securities would be subordinated is approximately CHF 2,215 billion.

The information presented in this note is prepared in accordance with IFRS and should be read in conjunction with the Consolidated Financial Statements of UBS of which this information is part.

Supplemental Guarantor Consolidating Income Statement
CHF million For the year ended 31 December 2007	UBS AG Parent Bank ¹	UBS Americas Inc.	Subsidiaries	Consolidating Entries	UBS Group
Operating income
Interest income	77,306	47,747	51,985	(67,926)	109,112
Interest expense	(74,689)	(46,420)	(50,592)	67,926	(103,775)
Net interest income	2,617	1,327	1,393	0	5,337
Credit loss (expense) / recovery	11	(234)	(15)	0	(238)
Net interest income after credit loss expense	2,628	1,093	1,378	0	5,099
Net fee and commission income	12,852	10,119	7,663	0	30,634
Net trading income	3,467	(9,932)	(1,888)	0	(8,353)
Income from subsidiaries	602	0	0	(602)	0
Other income	(4,273)	8,369	236	0	4,332
Revenues from industrial holdings	0	0	268	0	268
Total operating income	15,276	9,649	7,657	(602)	31,980
Operating expenses
Personnel expenses	12,611	8,307	3,880	0	24,798
General and administrative expenses	5,684	3,446	(665)	0	8,465
Depreciation of property and equipment	930	138	183	0	1,251
Amortization of intangible assets	3	101	178	0	282
Goods and materials purchased	0	0	119	0	119
Total operating expenses	19,228	11,992	3,695	0	34,915
Operating profit from continuing operations before tax	(3,952)	(2,343)	3,962	(602)	(2,935)
Tax expense / (benefit)	697	(486)	1,100	0	1,311
Net profit / (loss) from continuing operations	(4,649)	(1,857)	2,862	(602)	(4,246)
Net profit / (loss) from discontinued operations	265	0	136	0	401
Net profit / (loss)	(4,384)	(1,857)	2,998	(602)	(3,845)
Net profit / (loss) attributable to minority interests	0	18	521	0	539
Net profit / (loss) attributable to UBS shareholders	(4,384)	(1,875)	2,477	(602)	(4,384)
1 UBS AG Parent Bank prepares its financial statements in accordance with Swiss banking law requirements. For the purpose of this disclosure, the accounts have been adjusted to IFRS.

Note 39.2 Supplemental Guarantor Consolidating Balance Sheet
CHF million As of 31 December 2007	UBS AG Parent Bank ¹	UBS Americas Inc.	Subsidiaries	Consolidating Entries	UBS Group
Assets
Cash and balances with central banks	8,530	109	10,154	0	18,793
Due from banks	154,138	16,530	200,488	(310,249)	60,907
Cash collateral on securities borrowed	117,312	166,479	53,672	(130,400)	207,063
Reverse repurchase agreements	292,839	106,775	266,470	(289,156)	376,928
Trading portfolio assets	354,200	170,977	84,884	0	610,061
Trading portfolio assets pledged as collateral	103,971	55,842	4,498	0	164,311
Positive replacement values	436,271	16,770	192,144	(216,968)	428,217
Financial assets designated at fair value	5,510	7,149	8,421	(9,315)	11,765
Loans	370,274	41,398	43,584	(119,392)	335,864
Financial investments available-for-sale	2,611	980	1,375	0	4,966
Accrued income and prepaid expenses	7,379	4,369	4,883	(4,678)	11,953
Investments in associates	28,049	139	150	(26,359)	1,979
Property and equipment	5,352	959	923	0	7,234
Goodwill and intangible assets	276	10,516	3,746	0	14,538
Other assets	13,606	5,135	4,881	(5,622)	18,000
Total assets	1,900,318	604,127	880,273	(1,112,139)	2,272,579
Liabilities
Due to banks	246,977	114,066	94,968	(310,249)	145,762
Cash collateral on securities lent	45,055	64,281	52,685	(130,400)	31,621
Repurchase agreements	105,750	238,880	250,413	(289,156)	305,887
Trading portfolio liabilities	111,955	51,904	929	0	164,788
Negative replacement values	456,631	16,333	187,543	(216,968)	443,539
Financial liabilities designated at fair value	146,701	14,947	39,520	(9,315)	191,853
Due to customers	555,694	87,534	118,056	(119,392)	641,892
Accrued expenses and deferred income	13,276	7,940	5,310	(4,678)	21,848
Debt issued	168,266	3,478	50,333	0	222,077
Other liabilities	19,011	5,356	42,031	(5,622)	60,776
Total liabilities	1,869,316	604,719	841,788	(1,085,780)	2,230,043
Equity attributable to UBS shareholders	31,002	(2,916)	33,858	(26,359)	35,585
Minority interests	0	2,324	4,627	0	6,951
Total equity	31,002	(592)	38,485	(26,359)	42,536
Total liabilities and equity	1,900,318	604,127	880,273	(1,112,139)	2,272,579
1 UBS AG Parent Bank prepares its financial statements in accordance with Swiss banking law requirements. For the purpose of this disclosure, the accounts have been adjusted to IFRS.

Note 39.2 Supplemental Guarantor Consolidating Cash Flow Statement
CHF million For the year ended 31 December 2007	UBS AG Parent Bank ¹	UBS Americas Inc.	Subsidiaries	UBS Group
Net cash flow from / (used in) operating activities	(65,133)	19,722	(5,865)	(51,276)
Cash flow from / (used in) investing activities
Investments in subsidiaries and associates	(2,337)	0	0	(2,337)
Disposal of subsidiaries and associates	885	0	0	885
Purchase of property and equipment	(1,022)	(581)	(307)	(1,910)
Disposal of property and equipment	40	28	66	134
Net (investment in) / divestment of financial investments available-for-sale	4,027	34	1,920	5,981
Net cash flow from / (used in) investing activities	1,593	(519)	1,679	2,753
Cash flow from / (used in) financing activities
Net money market paper issued / (repaid)	35,017	(1,426)	(919)	32,672
Net movements in treasury shares and own equity derivative activity	(3,550)	0	0	(3,550)
Dividends paid	(4,275)	0	0	(4,275)
Issuance of long-term debt, including financial liabilities designated at fair value	105,197	1,022	4,655	110,874
Repayment of long-term debt, including financial liabilities designated at fair value	(54,251)	(7,022)	(1,134)	(62,407)
Increase in minority interests	0	32	1,062	1,094
Dividend payments to / purchase from minority interests	0	(665)	46	(619)
Net activity in investments in subsidiaries	1,057	(6,679)	5,622	0
Net cash flow from / (used in) financing activities	79,195	(14,738)	9,332	73,789
Effects of exchange rate differences	(9,093)	(3,062)	(96)	(12,251)
Net increase / (decrease) in cash equivalents	6,562	1,403	5,050	13,015
Cash and cash equivalents, beginning of the year	102,548	14,129	19,413	136,090
Cash and cash equivalents, end of the year	109,110	15,532	24,463	149,105
Cash and cash equivalents comprise:
Cash and balances with central banks	8,530	109	10,154	18,793
Money market paper ²	60,266	13,202	3,747	77,215
Due from banks with original maturity of less than three months	40,314	2,221	10,562	53,097
Total	109,110	15,532	24,463	149,105
1 UBS AG Parent Bank prepares its financial statements in accordance with Swiss banking law requirements. For the purpose of this disclosure, the accounts have been adjusted to IFRS. 2 Money market paper is included in the Balance sheet under Trading portfolio assets and Financial investments available-for-sale. CHF 3,364 million was pledged at 31 December 2007.

Note 39.2 Supplemental Guarantor Consolidating Income Statement
CHF million For the year ended 31 December 2006	UBS AG Parent Bank ¹	UBS Americas Inc.	Subsidiaries	Consolidating Entries	UBS Group
Operating income
Interest income	60,057	42,667	39,269	(54,592)	87,401
Interest expense	(56,020)	(41,049)	(38,403)	54,592	(80,880)
Net interest income	4,037	1,618	866	0	6,521
Credit loss (expense) / recovery	167	(6)	(5)	0	156
Net interest income after credit loss expense	4,204	1,612	861	0	6,677
Net fee and commission income	11,646	8,590	5,220	0	25,456
Net trading income	10,306	1,634	1,803	0	13,743
Income from subsidiaries	3,760	0	0	(3,760)	0
Other income	(450)	1,637	411	0	1,598
Revenues from industrial holdings	0	0	262	0	262
Total operating income	29,466	13,473	8,557	(3,760)	47,736
Operating expenses
Personnel expenses	12,208	8,040	3,343	0	23,591
General and administrative expenses	2,805	3,362	1,813	0	7,980
Depreciation of property and equipment	979	133	140	0	1,252
Amortization of intangible assets	14	83	56	0	153
Goods and materials purchased	0	0	116	0	116
Total operating expenses	16,006	11,618	5,468	0	33,092
Operating profit from continuing operations before tax	13,460	1,855	3,089	(3,760)	14,644
Tax expense / (benefit)	1,715	585	485	0	2,785
Net profit / (loss) from continuing operations	11,745	1,270	2,604	(3,760)	11,859
Net profit / (loss) from discontinued operations	512	0	379	0	891
Net profit / (loss)	12,257	1,270	2,983	(3,760)	12,750
Net profit / (loss) attributable to minority interests	0	527	(34)	0	493
Net profit / (loss) attributable to UBS shareholders	12,257	743	3,017	(3,760)	12,257
1 UBS AG Parent Bank prepares its financial statements in accordance with Swiss banking law requirements. For the purpose of this disclosure, the accounts have been adjusted to IFRS.

Note 39.2 Supplemental Guarantor Consolidating Balance Sheet
CHF million As of 31 December 2006	UBS AG Parent Bank ¹	UBS Americas Inc.	Subsidiaries	Consolidating Entries	UBS Group
Assets
Cash and balances with central banks	2,660	78	757	0	3,495
Due from banks	121,404	16,884	182,850	(270,712)	50,426
Cash collateral on securities borrowed	99,829	303,607	156,083	(207,929)	351,590
Reverse repurchase agreements	270,814	167,222	300,862	(333,064)	405,834
Trading portfolio assets	294,590	188,710	143,736	0	627,036
Trading portfolio assets pledged as collateral	162,722	51,834	36,922	0	251,478
Positive replacement values	283,466	13,168	173,243	(176,902)	292,975
Financial assets designated at fair value	2,902	4,147	7,146	(8,265)	5,930
Loans	399,352	40,279	38,644	(180,433)	297,842
Financial investments available-for-sale	5,843	862	2,232	0	8,937
Accrued income and prepaid expenses	6,598	4,029	4,809	(5,075)	10,361
Investments in associates	34,887	179	237	(33,780)	1,523
Property and equipment	5,432	637	844	0	6,913
Goodwill and intangible assets	258	11,128	3,387	0	14,773
Other assets	10,709	5,524	5,587	(4,571)	17,249
Total assets	1,701,466	808,288	1,057,339	(1,220,731)	2,346,362
Liabilities
Due to banks	228,992	114,782	130,627	(270,712)	203,689
Cash collateral on securities lent	106,019	57,937	107,061	(207,929)	63,088
Repurchase agreements	167,166	419,427	291,951	(333,064)	545,480
Trading portfolio liabilities	107,747	71,165	25,861	0	204,773
Negative replacement values	290,746	13,629	169,590	(176,902)	297,063
Financial liabilities designated at fair value	121,074	49	32,829	(8,265)	145,687
Due to customers	489,823	80,936	165,560	(180,433)	555,886
Accrued expenses and deferred income	12,336	8,406	5,860	(5,075)	21,527
Debt issued	110,020	29,149	50,974	0	190,143
Other liabilities	16,488	4,284	47,050	(4,571)	63,251
Total liabilities	1,650,411	799,764	1,027,363	(1,186,951)	2,290,587
Equity attributable to UBS shareholders	51,055	5,539	26,872	(33,780)	49,686
Minority interests	0	2,985	3,104	0	6,089
Total equity	51,055	8,524	29,976	(33,780)	55,775
Total liabilities and equity	1,701,466	808,288	1,057,339	(1,220,731)	2,346,362
1 UBS AG Parent Bank prepares its financial statements in accordance with Swiss banking law requirements. For the purpose of this disclosure, the accounts have been adjusted to IFRS.

Note 39.2 Supplemental Guarantor Consolidating Cash Flow Statement
CHF million For the year ended 31 December 2006	UBS AG Parent Bank ¹	UBS Americas Inc.	Subsidiaries	UBS Group
Net cash flow from / (used in) operating activities	(1,916)	(14,810)	11,805	(4,921)
Cash flow from / (used in) investing activities
Investments in subsidiaries and associates	2,856	0	0	2,856
Disposal of subsidiaries and associates	1,154	0	0	1,154
Purchase of property and equipment	(1,292)	(255)	(246)	(1,793)
Disposal of property and equipment	298	47	154	499
Net (investment in) / divestment of financial investments available-for-sale	90	433	1,200	1,723
Net cash flow from / (used in) investing activities	3,106	225	1,108	4,439
Cash flow from / (used in) financing activities
Net money market paper issued / (repaid)	17,526	1,039	(1,644)	16,921
Net movements in treasury shares and own equity derivative activity	(3,624)	0	0	(3,624)
Capital issuance	1	0	0	1
Capital repayment by par value reduction	(631)	0	0	(631)
Dividends paid	(3,214)	0	0	(3,214)
Issuance of long-term debt, including financial liabilities designated at fair value	79,358	10,881	7,436	97,675
Repayment of long-term debt, including financial liabilities designated at fair value	(48,748)	(447)	(10,545)	(59,740)
Increase in minority interests	0	85	1,246	1,331
Dividend payments to / purchase from minority interests	0	2,441	(3,513)	(1,072)
Net activity in investments in subsidiaries	(8,246)	3,055	5,191	0
Net cash flow from / (used in) financing activities	32,422	17,054	(1,829)	47,647
Effects of exchange rate differences	388	(1,871)	(634)	(2,117)
Net increase / (decrease) in cash equivalents	34,000	598	10,450	45,048
Cash and cash equivalents, beginning of the year	68,548	13,531	8,963	91,042
Cash and cash equivalents, end of the year	102,548	14,129	19,413	136,090
Cash and cash equivalents comprise:
Cash and balances with central banks	2,660	78	757	3,495
Money market paper ²	73,431	11,488	2,225	87,144
Due from banks with original maturity of less than three months	26,457	2,563	16,431	45,451
Total	102,548	14,129	19,413	136,090
1 UBS AG Parent Bank prepares its financial statements in accordance with Swiss banking law requirements. For the purpose of this disclosure, the accounts have been adjusted to IFRS. 2 Money market paper is included in the Balance sheet under Trading portfolio assets and Financial investments available-for-sale. CHF 7,183 million was pledged at 31 December 2006.

Note 39.2 Supplemental Guarantor Consolidating Income Statement
CHF million For the year ended 31 December 2005	UBS AG Parent Bank ¹	UBS Americas Inc.	Subsidiaries	Consolidating Entries	UBS Group
Operating income
Interest income	39,779	27,782	20,729	(29,004)	59,286
Interest expense	(33,892)	(24,803)	(20,067)	29,004	(49,758)
Net interest income	5,887	2,979	662	0	9,528
Credit loss (expense) / recovery	370	(3)	8	0	375
Net interest income after credit loss expense	6,257	2,976	670	0	9,903
Net fee and commission income	9,670	7,420	4,094	0	21,184
Net trading income	7,453	(123)	918	0	8,248
Income from subsidiaries	(675)	0	0	675	0
Other income	2,635	476	(1,984)	0	1,127
Revenues from industrial holdings	0	0	229	0	229
Total operating income	25,340	10,749	3,927	675	40,691
Operating expenses
Personnel expenses	9,962	6,587	3,518	0	20,067
General and administrative expenses	2,330	2,667	1,507	0	6,504
Depreciation of property and equipment	988	140	119	0	1,247
Amortization of intangible assets	24	70	39	0	133
Goods and materials purchased	0	0	97	0	97
Total operating expenses	13,304	9,464	5,280	0	28,048
Operating profit from continuing operations before tax	12,036	1,285	(1,353)	675	12,643
Tax expense / (benefit)	1,712	1,079	(326)	0	2,465
Net profit / (loss) from continuing operations	10,324	206	(1,027)	675	10,178
Net profit / (loss) from discontinued operations	3,705	0	807	0	4,512
Net profit / (loss)	14,029	206	(220)	675	14,690
Net profit / (loss) attributable to minority interests	0	122	539	0	661
Net profit / (loss) attributable to UBS shareholders	14,029	84	(759)	675	14,029
1 UBS AG Parent Bank prepares its financial statements in accordance with Swiss banking law requirements. For the purpose of this disclosure, the accounts have been adjusted to IFRS.

Note 39.2 Supplemental Guarantor Consolidating Cash Flow Statement
CHF million For the year ended 31 December 2005	UBS AG Parent Bank ¹	UBS Americas Inc.	Subsidiaries	UBS Group
Net cash flow from / (used in) operating activities	(29,118)	(15,771)	(18,318)	(63,207)
Cash flow from / (used in) investing activities
Investments in subsidiaries and associates	(1,540)	0	0	(1,540)
Disposal of subsidiaries and associates	3,240	0	0	3,240
Purchase of property and equipment	(1,153)	(155)	(584)	(1,892)
Disposal of property and equipment	71	6	193	270
Net (investment in) / divestment of financial investments available-for-sale	(4,667)	(40)	2,220	(2,487)
Net cash flow from / (used in) investing activities	(4,049)	(189)	1,829	(2,409)
Cash flow from / (used in) financing activities
Net money market paper issued / (repaid)	22,698	615	(92)	23,221
Net movements in treasury shares and own equity derivative activity	(2,416)	0	0	(2,416)
Capital issuance	2	0	0	2
Dividends paid	(3,105)	0	0	(3,105)
Issuance of long-term debt, including financial liabilities designated at fair value	50,587	14,635	11,085	76,307
Repayment of long-term debt, including financial liabilities designated at fair value	(17,780)	(753)	(11,924)	(30,457)
Increase in minority interests	0	8	1,564	1,572
Dividend payments to / purchase from minority interests	0	(175)	(400)	(575)
Net activity in investments in subsidiaries	(1,591)	(214)	1,805	0
Net cash flow from / (used in) financing activities	48,395	14,116	2,038	64,549
Effects of exchange rate differences	3,283	(720)	2,455	5,018
Net increase / (decrease) in cash equivalents	18,511	(2,564)	(11,996)	3,951
Cash and cash equivalents, beginning of the year	50,037	16,095	20,959	87,091
Cash and cash equivalents, end of the year	68,548	13,531	8,963	91,042
Cash and cash equivalents comprise:
Cash and balances with central banks	2,712	5	2,642	5,359
Money market paper ²	47,838	8,991	997	57,826
Due from banks with original maturity of less than three months	17,998	4,535	5,324	27,857
Total	68,548	13,531	8,963	91,042
1 UBS AG Parent Bank prepares its financial statements in accordance with Swiss banking law requirements. For the purpose of this disclosure, the accounts have been adjusted to IFRS. 2 Money market paper is included in the Balance sheet under Trading portfolio assets and Financial investments available-for-sale. CHF 4,744 million was pledged at 31 December 2005.

Guarantee of other securities

UBS AG, acting through wholly-owned finance subsidiaries, issued the following trust preferred securities:

USD billion, unless otherwise indicated		Outstanding as of 31.12.07
Issuing Entity	Type of security	Date issued	Interest (%)	Amount
UBS Preferred Funding Trust I	Trust preferred securities	October 2000	8.622	1.5
UBS Preferred Funding Trust II	Trust preferred securities ¹	June 2001	7.247	0.5
UBS Preferred Funding Trust IV	Floating rate noncumulative trust preferred securities	May 2003	one-month LIBOR + 0.7%	0.3
UBS Preferred Funding Trust V	Trust preferred securities	May 2006	6.243	1.0
1 In June 2006, USD 300 million (at 7.25%) of Trust preferred securities also issued in June 2001 were redeemed.

UBS AG has fully and unconditionally guaranteed these securities. UBS's obligations under the trust preferred securities guarantee are subordinated to the prior payment in full of the deposit liabilities of UBS and all other liabilities of UBS. At 31 December 2007, the amount of senior liabilities of UBS to which the holders of the subordinated debt securities would be subordinated is approximately CHF 2,215 billion.

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