Statement of changes in equity

	For the year ended
CHF million	31.12.08	31.12.07	31.12.06
Share capital
Balance at the beginning of the year	207	211	871
Issue of share capital	86	0	1
Capital repayment by par value reduction	0	0	(631)
Cancellation of second trading line treasury shares	0	(4)	(30)
Balance at the end of the year attributable to UBS shareholders	293	207	211
Share premium
Balance at the beginning of the year	8,884	9,870	9,992
Change in accounting policy	3,549	2,770	2,325
Premium on shares issued and warrants exercised	20,003	12	46
Net premium / (discount) on treasury share and own equity derivative activity	(4,626)	(560)	(271)
Employee share and share option plans	(1,961)	898	(56)
Tax benefits from deferred compensation awards	(176)	(557)	604
Transaction costs related to share issuances, net of tax	(423)	0	0
Balance at the end of the year attributable to UBS shareholders	25,250	12,433	12,640
Balance at the end of the year attributable to minority interests	417	556	461
Balance at the end of the year	25,667	12,989	13,101
Net income recognized directly in equity, net of tax
Foreign currency translation
Balance at the beginning of the year	(2,627)	(1,618)	(432)
Change in accounting policy	27	4	(14)
Movements during the year	(3,709)	(986)	(1,168)
Subtotal - balance at the end of the year attributable to UBS shareholders ¹	(6,309)	(2,600)	(1,614)
Balance at the end of the year attributable to minority interests	(1,095)	(480)	(208)
Subtotal - balance at the end of the year	(7,404)	(3,080)	(1,822)
Net unrealized gains / (losses) on financial investments available-for-sale, net of tax
Balance at the beginning of the year	1,471	2,876	931
Net unrealized gains / (losses) on financial investments available-for-sale	(648)	1,213	2,574
Impairment charges reclassified to the income statement	42	14	19
Realized gains reclassified to the income statement	(524)	(2,638)	(649)
Realized losses reclassified to the income statement	6	6	1
Subtotal - balance at the end of the year attributable to UBS shareholders	347	1,471	2,876
Balance at the end of the year attributable to minority interests	2	32	30
Subtotal - balance at the end of the year	349	1,503	2,906
Changes in fair value of derivative instruments designated as cash flow hedges, net of tax
Balance at the beginning of the year	(32)	(443)	(681)
Net unrealized gains / (losses) on the revaluation of cash flow hedges	1,780	239	1
Net realized (gains) / losses reclassified to the income statement	(121)	172	237
Subtotal - balance at the end of the year attributable to UBS shareholders	1,627	(32)	(443)
Balance at the end of the year attributable to minority interests	0	0	0
Subtotal - balance at the end of the year	1,627	(32)	(443)

Net income recognized directly in equity, net of tax - attributable to UBS shareholders	(4,335)	(1,161)	819
Net income recognized directly in equity - attributable to minority interests	(1,093)	(448)	(178)
Balance at the end of the year	(5,428)	(1,609)	641

Revaluation reserve from step acquisitions, net of tax
Balance at the beginning of the year	38	38	101
Movements during the year	0	0	(63)
Balance at the end of the year attributable to UBS shareholders	38	38	38
1 Net of CHF (17) million, CHF 39 million and CHF 83 million of related taxes for the years ended 31.12.08, 31.12.07 and 31.12.06 respectively.
	For the year ended
CHF million	31.12.08	31.12.07	31.12.06
Retained earnings
Balance at the beginning of the year	38,081	49,151	44,105
Change in accounting policy	(2,286)	(1,423)	(693)
Net profit attributable to UBS shareholders for the year	(21,292)	(5,247)	11,527
Dividends paid ¹	(16)	(4,275)	(3,214)
Cancellation of second trading line treasury shares	0	(2,411)	(3,997)
Balance at the end of the year attributable to UBS shareholders	14,487	35,795	47,728
Balance at the end of the year attributable to minority interests	234	16	(25)
Balance at the end of the year	14,721	35,811	47,703
Equity classified as obligation to purchase own shares
Balance at the beginning of the year	(74)	(185)	(133)
Movements during the year	28	111	(52)
Balance at the end of the year attributable to UBS shareholders	(46)	(74)	(185)
Treasury shares
Balance at the beginning of the year	(10,363)	(10,214)	(10,739)
Acquisitions	(367)	(7,169)	(8,314)
Disposals	7,574	4,605	4,812
Cancellation of second trading line treasury shares	0	2,415	4,027
Balance at the end of the year attributable to UBS shareholders	(3,156)	(10,363)	(10,214)

Minority interests - preferred securities	8,444	6,827	5,831

Total equity attributable to UBS shareholders	32,531	36,875	51,037
Total equity attributable to minority interests	8,002	6,951	6,089
Total equity	40,533	43,826	57,126
1 Stock dividend of 20-for-1 was distributed in April 2008, cash dividends of CHF 2.20 per share and CHF 1.60 per share were paid on 23 April 2007 and 24 April 2006 respectively.

Additional information: Equity attributable to minority interests
	For the year ended
CHF million	31.12.08	31.12.07	31.12.06
Balance at the beginning of the year	6,951	6,089	7,619
Issuance of preferred securities	1,618	996	1,219
Other increases	12	101	131
Decreases and dividend payments	(532)	(502)	(3,191)
Foreign currency translation	(615)	(272)	(182)
Minority interest in net profit	568	539	493
Balance at the end of the year	8,002	6,951	6,089

	For the year ended			% change from
Number of shares	31.12.08	31.12.07	31.12.06	31.12.07

Shares issued
Balance at the beginning of the year	2,073,547,344	2,105,273,286	2,177,265,044	(2)
Issuance of share capital	859,033,205	1,294,058	2,208,242
Cancellation of second trading line treasury shares		(33,020,000)	(74,200,000)	100
Balance at the end of the year	2,932,580,549	2,073,547,344	2,105,273,286	41

Treasury shares
Balance at the beginning of the year	158,105,524	164,475,699	208,519,748	(4)
Acquisitions	13,398,118	102,074,942	117,160,339	(87)
Disposals	(109,600,521)	(75,425,117)	(87,004,388)	(45)
Cancellation of second trading line treasury shares		(33,020,000)	(74,200,000)	100
Balance at the end of the year	61,903,121	158,105,524	164,475,699	(61)

On 31 December 2008, a maximum of 100,415 shares can be issued against the future exercise of options from former PaineWebber employee option plans. These shares are shown as conditional share capital in the UBS AG (Parent Bank) disclosure. During 2006, shareholders approved the creation of conditional capital of up to a maximum of 150 million shares to fund UBS's employee share option programs. In 2008 and 2007, zero and 5,704 shares had been issued under this program. The remaining conditional capital to fund UBS's employee share option programs amounts to 149,994,296 shares.

On 27 February 2008 the extraordinary general meeting of shareholders approved the creation of a maximum of CHF 10,370,000 in authorized capital, allowing the distribution of a stock dividend. Additionally, on 23 April 2008, the Annual General Meeting of shareholders (AGM) approved a capital increase that resulted in the issuance of 760,295,181 fully paid registered shares. In addition during 2008, shareholders approved the creation of conditional capital in a maximum amount of 642,750,000 shares for the two issuances of mandatory convertible notes (MCNs). For further information refer to "Note 26 Capital increases and mandatory convertible notes" in the financial statements.

All issued shares are fully paid.

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