Industrial Holdings

Major participations 2007 2006

Income statement
	As of or for the year ended			% change from
CHF million, except where indicated	31.12.07	31.12.06	31.12.05	31.12.06

Continuing operations
Revenues from Industrial Holdings	268	262	229	2
Other income	680	303	566	124
Total operating income	948	565	795	68
Personnel expenses	111	122	164	(9)
General and administrative expenses	44	51	56	(14)
Services (to) / from other business units	124	9	14
Depreciation of property and equipment	8	7	7	14
Amortization of intangible assets	6	5	6	20
Goods and materials purchased	119	116	97	3
Total operating expenses	412	310	344	33
Operating profit from continuing operations before tax	536	255	451	110
Tax expense	36	34	169	6
Net profit from continuing operations	500	221	282	126

Discontinued operations
Profit from discontinued operations before tax	128	875	530	(85)
Tax expense	(8)	(12)	93	33
Net profit from discontinued operations	136	887	437	(85)

Net profit	636	1,108	719	(43)
Net profit / (loss) attributable to minority interests	50	104	207	(52)
from continuing operations	50	1	(24)
from discontinued operations	0	103	231	(100)
Net profit attributable to UBS shareholders	586	1,004	512	(42)
from continuing operations	450	220	306	105
from discontinued operations	136	784	206	(83)

Additional information
Private equity ¹
Investments, at cost ²	92	344	744	(73)
Gains recognized directly in equity	76	517	264	(85)
Portfolio fair value	168	861	1,008	(80)
Cost / income ratio (%) ³	43.5	54.9	43.3
BIS risk-weighted assets	117	443	2,035	(74)
Personnel (full-time equivalents)	3,843	4,241	21,636	(9)
1 Only comprises financial investments available-for-sale. 2 Historical cost of investments made, less divestments and impairments. 3 Operating expenses / operating income.

Major participations

The private equity investments of UBS were moved to the Industrial Holdings segment in first quarter 2005, matching the strategy of de-emphasizing and reducing exposure to this asset class while capitalizing on orderly exit opportunities as they arise.

The sale of UBS's 55.6% stake of Motor-Columbus to a consortium of Atel's Swiss minority shareholders, EOS Holding and Atel, as well as to French utility Electricité de France (EDF), which was included in this segment, was successfully completed on 23 March 2006. The sale price was set at approximately CHF 1,295 million. The disposal gain of CHF 387 million and the operating result of CHF 71 million realized during the quarter before the deal closed are reported as discontinued operations after tax. All prior periods have been restated accordingly.

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2007

In 2007, the Industrial Holdings segment reported a net profit of CHF 636 million, of which CHF 586 million was attributable to UBS shareholders.

In 2007, UBS completed the sale of two fully consolidated investments. The realized divestment gains are presented as discontinued operations for Industrial Holdings. Previous income statements have also been restated to reflect these divestments.

In 2007, unconsolidated private equity investments, including those accounted for under the equity method, recorded total divestment gains of CHF 718 million. The level of financial investments available-for-sale fell to CHF 92 million on 31 December 2007 from CHF 344 million a year earlier due to a number of exits which were partially offset by the funding of existing commitments. The fair value of this part of the portfolio decreased to CHF 168 million in 2007 from CHF 861 million in 2006 reflecting revaluations and successful divestments. Unfunded commitments on 31 December 2007 were CHF 67 million, down from CHF 227 million at the end of December 2006.

The net profit result in 2007 is shown after transfers of CHF 118 million to the Investment Bank. This was to compensate the Investment Bank for its efforts in helping dispose of certain private equity instruments, which had been transferred from the Investment Bank in 2005.

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2006

In 2006, the Industrial Holdings segment reported a net profit attributable to UBS shareholders of CHF 1,004 million. In 2006, it completed the sale of four fully consolidated investments. The realized divestment gains are presented as discontinued operations for Industrial Holdings.

In 2006, unconsolidated private equity investments, including those accounted for under the equity method, recorded total divestment gains of CHF 391 million. The level of financial investments available-for-sale fell to CHF 344 million on 31 December 2006 from CHF 744 million a year earlier due to a number of exits which were partially offset by the funding of existing commitments. The fair value of this part of the portfolio decreased to CHF 861 million in 2006 from CHF 1,008 million in 2005 reflecting revaluations and successful divestments. Unfunded commitments on 31 December 2006 were CHF 227 million, down from CHF 367 million at the end of December 2005.

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