Financial Statements

Income Statement
		For the year ended			% change from
CHF million, except per share data	Note	31.12.06	31.12.05	31.12.04	31.12.05

Continuing operations
Interest income	3	87,401	59,286	39,228	47
Interest expense	3	(80,880)	(49,758)	(27,484)	63
Net interest income	3	6,521	9,528	11,744	(32)
Credit loss (expense) / recovery		156	375	241	(58)
Net interest income after credit loss expense		6,677	9,903	11,985	(33)
Net fee and commission income	4	25,881	21,436	18,506	21
Net trading income	3	13,318	7,996	4,902	67
Other income	5	1,596	1,122	853	42
Revenues from industrial holdings		693	675	640	3
Total operating income		48,165	41,132	36,886	17
Personnel expenses	6	23,671	20,148	17,891	17
General and administrative expenses	7	8,116	6,632	6,563	22
Depreciation of property and equipment	15	1,263	1,261	1,284	0
Amortization of goodwill	16	0	0	673
Amortization of other intangible assets	16	153	131	170	17
Goods and materials purchased		295	283	263	4
Total operating expenses		33,498	28,455	26,844	18
Operating profit from continuing operations before tax		14,667	12,677	10,042	16
Tax expense	22	2,786	2,471	2,155	13
Net profit from continuing operations		11,881	10,206	7,887	16

Discontinued operations
Operating profit from discontinued operations before tax	38	856	5,060	781	(83)
Tax expense / (benefit)	22	(13)	576	198
Net profit from discontinued operations		869	4,484	583	(81)

Net profit		12,750	14,690	8,470	(13)
Net profit attributable to minority interests		493	661	454	(25)
from continuing operations		390	430	340	(9)
from discontinued operations		103	231	114	(55)
Net profit attributable to UBS shareholders		12,257	14,029	8,016	(13)
from continuing operations		11,491	9,776	7,547	18
from discontinued operations		766	4,253	469	(82)

Earnings per share
Basic earnings per share (CHF)	8	6.20	6.97	3.89	(11)
from continuing operations		5.81	4.85	3.66	20
from discontinued operations		0.39	2.12	0.23	(82)
Diluted earnings per share (CHF)	8	5.95	6.68	3.70	(11)
from continuing operations		5.58	4.66	3.49	20
from discontinued operations		0.37	2.02	0.21	(82)

Balance Sheet
				% change from
CHF million	Note	31.12.06	31.12.05	31.12.05

Assets
Cash and balances with central banks		3,495	5,359	(35)
Due from banks	10	50,426	33,644	50
Cash collateral on securities borrowed	11	351,590	288,435	22
Reverse repurchase agreements	11	405,834	404,432	0
Trading portfolio assets	12	627,036	499,297	26
Trading portfolio assets pledged as collateral	12	251,478	154,759	62
Positive replacement values	23	328,445	333,782	(2)
Financial assets designated at fair value	9	5,930	1,153	414
Loans	10	312,521	279,910	12
Financial investments available-for-sale	13	8,937	6,551	36
Accrued income and prepaid expenses		10,361	8,918	16
Investments in associates	14	1,523	2,956	(48)
Property and equipment	15	6,913	9,423	(27)
Goodwill and other intangible assets	16	14,773	13,486	10
Other assets	17, 22	17,249	16,243	6
Total assets		2,396,511	2,058,348	16

Liabilities
Due to banks	18	203,689	124,328	64
Cash collateral on securities lent	11	63,088	59,938	5
Repurchase agreements	11	545,480	478,508	14
Trading portfolio liabilities	12	204,773	188,631	9
Negative replacement values	23	332,533	337,663	(2)
Financial liabilities designated at fair value	19	145,687	117,401	24
Due to customers	18	570,565	466,907	22
Accrued expenses and deferred income		21,527	18,791	15
Debt issued	19	190,143	160,710	18
Other liabilities	20, 21, 22	63,251	53,837	17
Total liabilities		2,340,736	2,006,714	17

Equity
Share capital		211	871	(76)
Share premium		9,870	9,992	(1)
Net income recognized directly in equity, net of tax		815	(182)
Revaluation reserve from step acquisitions, net of tax		38	101	(62)
Retained earnings		49,151	44,105	11
Equity classified as obligation to purchase own shares		(185)	(133)	(39)
Treasury shares		(10,214)	(10,739)	5
Equity attributable to UBS shareholders		49,686	44,015	13
Equity attributable to minority interests		6,089	7,619	(20)
Total equity		55,775	51,634	8
Total liabilities and equity		2,396,511	2,058,348	16

Statement of Changes in Equity
	For the year ended
CHF million	31.12.06	31.12.05	31.12.04
Share capital
Balance at the beginning of the year	871	901	946
Issue of share capital	1	2	2
Capital repayment by par value reduction	(631)
Cancellation of second trading line treasury shares	(30)	(32)	(47)
Balance at the end of the year	211	871	901
Share premium
Balance at the beginning of the year	9,992	9,231	7,595
Premium on shares issued and warrants exercised	46	36	70
Net premium / (discount) on treasury share and own equity derivative activity	(271)	(309)	(20)
Employee share and share options plans	(508)	768	1,244
Tax benefits from exercise of employee share options	611	266	342
Balance at the end of the year	9,870	9,992	9,231
Net income recognized directly in equity, net of tax
Foreign currency translation
Balance at the beginning of the year	(432)	(2,520)	(1,694)
Movements during the year	(1,186)	2,088	(826)
Subtotal – balance at the end of the year¹	(1,618)	(432)	(2,520)
Net unrealized gains / (losses) on financial investments available-for-sale, net of tax
Balance at the beginning of the year	931	761	399
Net unrealized gains / (losses) on financial investments available-for-sale	2,574	463	501