Financial Statements

Statement of Cash Flows

	For the year ended
CHF million	31.12.05	31.12.04	31.12.03

Cash flow from / (used in) operating activities
Net profit	14,690	8,470	6,253
Adjustments to reconcile net profit to cash flow from / (used in) operating activities
Non-cash items included in net profit and other adjustments:
Depreciation of property and equipment	1,556	1,576	1,570
Amortization of goodwill and other intangible assets	340	1,066	980
Credit loss expense / (recovery)	(374)	(241)	102
Equity in income of associates	(152)	(67)	(138)
Deferred tax expense / (benefit)	(382)	171	360
Net loss / (gain) from investing activities	(5,062)	(1,008)	(301)
Net loss / (gain) from financing activities	4,025	1,203	115
Net (increase) / decrease in operating assets:
Net due from / to banks	(1,690)	(7,471)	42,916
Reverse repurchase agreements and cash collateral on securities borrowed	(127,357)	(42,975)	(101,381)
Trading portfolio and net replacement values	(74,799)	(19,733)	(52,193)
Loans / due to customers	42,440	10,093	38,636
Accrued income, prepaid expenses and other assets	(1,227)	(10,809)	(20,296)
Net increase / (decrease) in operating liabilities:
Repurchase agreements and cash collateral on securities lent	71,643	14,991	65,413
Accrued expenses and other liabilities	15,536	22,019	22,420
Income taxes paid	(2,394)	(1,345)	(1,117)
Net cash flow from / (used in) operating activities	(63,207)	(24,060)	3,339

Cash flow from / (used in) investing activities
Investments in subsidiaries and associates	(1,540)	(2,511)	(428)
Disposal of subsidiaries and associates	3,240	1,277	1,234
Purchase of property and equipment	(1,892)	(1,149)	(1,376)
Disposal of property and equipment	270	704	123
Net (investment in) / divestment of financial investments	(2,487)	703	2,317
Net cash flow from / (used in) investing activities	(2,409)	(976)	1,870

Statement of Cash Flows

	For the year ended
CHF million	31.12.05	31.12.04	31.12.03

Cash flow from / (used in) financing activities
Net money market paper issued / (repaid)	23,221	21,379	(14,737)
Net movements in treasury shares and own equity derivative activity	(2,416)	(4,999)	(6,810)
Capital issuance	2	2	2
Dividends paid	(3,105)	(2,806)	(2,298)
Issuance of long-term debt, including financial liabilities designated at fair value	76,307	51,211	23,644
Repayment of long-term debt, including financial liabilities designated at fair value	(30,457)	(24,717)	(13,615)
Increase in minority interests ¹	1,572	85	419
Dividend payments to / purchase from minority interests	(575)	(332)	(278)
Net cash flow from / (used in) financing activities	64,549	39,823	(13,673)
Effects of exchange rate differences	5,018	(1,052)	(524)
Net increase / (decrease) in cash and cash equivalents	3,951	13,735	(8,988)
Cash and cash equivalents, beginning of the year	87,091	73,356	82,344
Cash and cash equivalents, end of the year	91,042	87,091	73,356
Cash and cash equivalents comprise:
Cash and balances with central banks	5,359	6,036	3,584
Money market paper ²	57,826	45,523	40,599
Due from banks with original maturity of less than three months	27,857	35,532	29,173
Total	91,042	87,091	73,356

Significant non-cash investing and financing activities
Provisions for reinstatement costs
Property and equipment			137
Motor-Columbus, Baden, from valuation at equity to full consolidation
Financial investments		644
Investments in associates		261
Property and equipment		2,083
Goodwill and other intangible assets		1,194
Debt issued		727
Minority interests		1,742
Investment funds transferred to other liabilities according to IAS 32
Minority interests		336
Private Banks and GAM, deconsolidation
Financial investments	60
Property and equipment	180
Goodwill and other intangible assets	362
Debt issued	5
Private equity investments, deconsolidation
Property and equipment	248
Goodwill and other intangible assets	3
Minority interests	27
Acquisitions of businesses
Financial investments	35
Property and equipment	112
Goodwill and other intangible assets	377
Minority interests	6

1 Includes issuance of preferred securities of CHF 1,539 million for the year ended 31 December 2005 and CHF 372 million for the year ended 31 December 2003. 2 Money market paper is included in the balance sheet under Trading portfolio assets and Financial investments. CHF 4,744 million, CHF 5,289 million and CHF 6,430 million were pledged at 31 December 2005, 31 December 2004 and 31 December 2003, respectively.

Cash paid for interest was CHF 44,392 million and CHF 24,192 million for 2005 and 2004 respectively.