Industrial Holdings

Income statement
	As of or for the year ended			% change from
CHF million, except where indicated	31.12.06	31.12.05	31.12.04	31.12.05

Continuing operations
Revenues from Industrial Holdings	693	675	640	3
Other income	301	561	275	(46)
Total operating income	994	1,236	915	(20)
Personnel expenses	202	245	185	(18)
General and administrative expenses	187	184	176	2
Services (to) / from other business units	9	14	20	(36)
Depreciation of property and equipment	18	21	22	(14)
Amortization of goodwill	0	0	27
Amortization of intangible assets	5	4	2	25
Goods and materials purchased	295	283	263	4
Total operating expenses	716	751	695	(5)
Operating profit from continuing operations before tax	278	485	220	(43)
Tax expense	35	175	51	(80)
Net profit from continuing operations	243	310	169	(22)

Discontinued operations
Profit from discontinued operations before tax	852	496	385	72
Tax expense / (benefit)	(13)	87	101
Net profit from discontinued operations	865	409	284	111

Net profit	1,108	719	453	54
Net profit / (loss) attributable to minority interests	104	207	93	(50)
from continuing operations	1	(24)	(21)
from discontinued operations	103	231	114	(55)
Net profit attributable to UBS shareholders	1,004	512	360	96
from continuing operations	242	334	190	(28)
from discontinued operations	762	178	170	328

Additional information
Private Equity¹
Investments, at cost ²	344	744	1,219	(54)
Unrecognized gains	517	264	467	96
Portfolio fair value	861	1,008	1,686	(15)
Cost / income ratio (%) ³	72.0	60.8	76.0
BIS risk-weighted assets	443	2,035	2,773	(78)
Personnel (full-time equivalents)	4,241	21,636	29,453	(80)
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

Our private equity investments were moved to our Industrial Holdings segment in first quarter 2005, matching our 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.

2006

In 2006, the Industrial Holdings segment reported a net profit of CHF 1,108 million, of which CHF 1,004 million was attributable to UBS shareholders.

In 2006, we completed the sale of four 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 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.

2005

In 2005, the Industrial Holdings segment reported a net profit attributable to UBS shareholders of CHF 512 million. In 2005, it completed the sale of four fully consolidated investments. The operating profit or loss and gains on disposal are presented as discontinued operations for Industrial Holdings.

In 2005, unconsolidated private equity investments, including those accounted for under the equity method, recorded total divestment gains of CHF 684 million. The level of financial investments available-for-sale fell to CHF 744 million on 31 December 2005 from CHF 1,219 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 1,008 million in 2005 from CHF 1,686 million in 2004. Unfunded commitments on 31 December 2005 were CHF 367 million, down from CHF 769 million at the end of December 2004, primarily due to the exit from one investment.