Note 2 Reporting by Business Group

Internal charges and transfer pricing adjustments are reflected in the performance of each business. Revenue-sharing agreements are used to allocate external customer revenues to a Business Group on a reasonable basis. Transactions between Business Groups are conducted at arm’s length. The presentation of the business segments below reflects UBS’s organization structure and management responsibilities. It shows how UBS is organized into six Business Groups, two of which are composed of two underlying Business Units. The management of the Wealth Management & Business Banking Business Group is responsible for the Wealth Management and the Business Banking Switzerland units, whereas the management of Corporate Center is responsible for the Private Banks & GAM unit as well as for all Corporate Functions. A new segment called Industrial Holdings was added with the consolidation of Motor-Columbus.

For the year ended 31 December 2004

For internal management reporting purposes, we measure credit loss using an expected loss concept. The table below shows Business Group performance consistent with the way in which our businesses are managed and the way Business Group performance is measured. Expected credit loss reflects the average annual costs that are expected to arise from positions in the current portfolio that become impaired. The adjusted expected credit loss reported for each Business Group is the expected credit loss on its portfolio plus the difference between credit loss expense and expected credit loss, amortized over a three year period. The difference between these adjusted expected credit loss figures and credit loss expense recorded at Group level for reporting purposes is reported in the Corporate Center.

For the year ended 31 December 2003

For internal management reporting purposes, we measure credit loss using an expected loss concept. The table below shows Business Group performance consistent with the way in which our businesses are managed and the way Business Group performance is measured. Expected credit loss reflects the average annual costs that are expected to arise from positions in the current portfolio that become impaired. The adjusted expected credit loss reported for each Business Group is the expected credit loss on its portfolio plus the difference between credit loss expense and expected credit loss, amortized over a three year period. The difference between these adjusted expected credit loss figures and credit loss expense recorded at Group level for reporting purposes is reported in the Corporate Center.