<PAGE> 1
Filed by UBS AG
Pursuant to Rule 425 under the Securites Act of 1933
Subject Company: Paine Webber, Inc.
Commission File No. 001-07367
abcd
UBS STRATEGY SEMINAR:
UBS WARBURG
GLOBAL FINANCIAL SERVICES
MARKUS GRANZIOL
CHAIRMAN & CEO, UBS Warburg
[GRAPHIC]
<PAGE> 2
CAUTION CONCERNING FORWARD-LOOKING STATEMENTS
As in most presentations, all the following discussions today contain
forward-looking statements, and our actual results may differ materially from
those discussed here. These forward-looking statements are found in various
places throughout these presentations and include, without limitation,
statements concerning the financial conditions, results of operations and
businesses of UBS and PaineWebber and, assuming the consummation of the merger,
a combined UBS and PaineWebber, as well as the expected timing and benefits of
the merger. While these forward-looking statements represent our judgments and
future expectations concerning the development of our business and the timing
and benefits of the merger, a number of risks, uncertainties and other important
factors could cause actual developments and results to differ materially from
our expectations. These factors include, but are not limited to, those listed in
UBS's 1999 Annual Report on Form 20-F and PaineWebber's 1999 Annual Report on
Form 10-K, as well as the failure of the UBS or PaineWebber stockholders to
approve the transaction; the risk that the UBS and PaineWebber businesses will
not be successfully integrated; the costs related to the transaction; the
inability to obtain, or meet conditions imposed for, governmental approvals for
the transaction; the risk that anticipated synergies will not be obtained or not
obtained within the time anticipated; and other key factors that we have
indicated could adversely affect our businesses and financial performance
contained in our past and future filings and reports, including those with the
United States Securities and Exchange Commission (the "SEC"). Additional
information concerning factors that could cause such a difference can be found
in UBS's Second Quarter 2000 Report and other filings made by UBS or
PaineWebber with the SEC. Neither UBS or PaineWebber is under any obligation to
(and expressly disclaims any such obligations to) update or alter its
forward-looking statements whether as a result of new information, future events
or otherwise. ANY FORWARD-LOOKING STATEMENTS MADE WITH REGARD TO PAINEWEBBER IN
THESE PRESENTATIONS ARE SUBJECT TO THE SUCCESSFUL COMPLETION OF THE MERGER.
Abcd 1
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FURTHER INFORMATION ABOUT PROXY MATERIALS
UBS and PaineWebber have filed a proxy statement/prospectus and other relevant
documents concerning the merger with the SEC. WE URGE INVESTORS TO READ THE
PROXY STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS TO BE FILED
WITH THE SEC, BECAUSE THEY CONTAIN IMPORTANT INFORMATION. Investors are
able to obtain the documents free of charge at the SEC's website, www.sec.gov.
In addition, documents filed with the SEC by UBS are available free of charge
from Investor Relations, UBS, Stockerstrasse 64, Zurich, Switzerland.
Documents filed with the SEC by PaineWebber are available free of charge from
Assistant Secretary, Geraldine Banyai, 1285 Ave of the Americas, New York, New
York 10019.
PaineWebber and its directors and executive officers may be deemed to be
participants in the solicitation of proxies from the security holders of
PaineWebber in favor of the merger. The directors and executive officers of
PaineWebber include the following: D. B. Marron; M. Alexander; S. P. Baum; E.
G. Bewkes, Jr.; R. Braun; R. A. Dolan; F. P. Doyle; J. T. Fadden; J. J. Grano;
J. W. Kinnear; R. N. Kiyono; T. A. Levine; R. M. Loeffler; E. Randall III; H.
Rossovsky; K. Sekiguchi; R. H. Silver; M. B. Sutton; and J. R. Torell.
Collectively, as of February 4, 2000, the directors and executive officers of
PaineWebber may be deemed to beneficially own approximately 4.8% of the
outstanding shares of PaineWebber common stock. Security holders of PaineWebber
may obtain additional information regarding the interests of such participants
by reading the proxy statement/prospectus.
Abcd 2
<PAGE> 4
CONTENTS
Section 1 Strategic positioning 2
Section 2 Strong financial base 9
Section 3 Growing global investment banking capabilities 16
Section 4 Relationship enhancing technology 32
Section 5 Global distribution power and content 40
Section 6 Appendix I - Financial Results 58
Section 7 Appendix II - Significant Transactions in 2000 60
Abcd 3
<PAGE> 5
STRATEGIC POSITIONING
SECTION 1
Abcd
<PAGE> 6
CURRENT POSITION
UBS WARBURG IS A LEADING GLOBAL
FINANCIAL SERVICES FIRM, PROVIDING A
FULL SPECTRUM OF PRODUCTS TO
AFFLUENT AND HIGH NET WORTH PRIVATE
CLIENTS, INTERMEDIARIES,
INSTITUTIONAL AND CORPORATE CLIENTS
GLOBALLY
Abcd 5
<PAGE> 7
STRATEGIC GOALS
UBS WARBURG HAS TWO FUNDAMENTAL STRATEGIC GOALS
WE WANT TO BE GLOBALLY THE NUMBER ONE
FINANCIAL SERVICES PROVIDER FOR
INSTITUTIONAL INVESTORS AND
AFFLUENT PRIVATE CLIENTS
WE WANT TO BE GLOBALLY THE QUALITY
INVESTMENT BANK OF CHOICE FOR CORPORATE
CLIENTS
Abcd 6
<PAGE> 8
UBS WARBURG CORE ASSETS--POST PAINEWEBBER
UBS WARBURG'S COMPETITIVE POSITION AND GROWTH IN PROFITABILITY WILL BE DRIVEN BY
THREE CORE ASSETS:
- Top tier capabilities in investment banking
-- We intend to further grow our corporate business across the full range
of services by leveraging on our core strengths in distribution power,
financial advice and content
- Leading relationship-enhancing technology
-- We empower clients and financial advisors
-- Our goal is to deepen client relationships and strengthen the link
between advisors and their clients
-- Unlike many competitors, our technology will be embedded in an
advisor-centric model.
- Unrivalled content and global distribution power
-- The global reach, breadth and diversification of our direct access to
investors - both private and institutional - is unmatched amongst
competitors
Abcd 7
<PAGE> 9
PAINEWEBBER WILL BE TRANSFORMATIONAL
THE PAINEWEBBER MERGER WILL BRING UBS WARBURG AN ENHANCED PLATFORM IN THE US AND
FURTHER SOLIDIFIES UBS WARBURG'S LEADING GLOBAL POSITION, WHILE EXPANDING
PAINEWEBBER'S PRODUCTS AND SERVICES AS WELL AS OPENING UP A NEW GLOBAL CLIENT
BASE
- PaineWebber US Private Client management and products/services can be
globally leveraged allowing UBS Warburg to target the global core
affluent(1) client segment - a major strategic move to build a top tier
global private client business
- UBS Warburg brings global content (global research, structured products
private equity, liability products, etc.) to an ever more demanding global
private client base - a major strategic move to deliver "investment
banking" content to private clients globally
- PaineWebber complements the existing US strengths of UBS Warburg's
institutional business - adding skills in US equities research and
specialised products in fixed income - significantly strengthening our
capabilities with our US institutional investor client base
- The integration of PaineWebber and UBS Warburg is viewed as
straightforward, with minimal risks and unlikely to have any negative
impact on client relationships
Note:
(1) Households with investable assets in excess of US$500k
Abcd 8
<PAGE> 10
PAINEWEBBER INTEGRATION STATUS
THE PAINEWEBBER INTEGRATION PLANNING HAS PROGRESSED RAPIDLY AND SUCCESSFULLY
- Jul 12th Merger Announced
- Jul 14th Integration Team established
- Integration Planning
-- Capital Markets - US Equities, US Fixed Income and US Corporate
Finance business structures confirmed
-- Private Clients - Integration and business planning process well
advanced
- Regulatory Issues / Shareholder Approval
-- Aug 12th US Anti-Trust Clearance Received
-- Sep 7th UBS Extraordinary General Meeting
-- Oct 23rd PaineWebber Special Shareholders Meeting
- Sep 21st UBS Warburg Organisational Structure Confirmed
- Nov Expected Completion
Abcd 9
<PAGE> 11
POST MERGER ORGANISATION
THE POST-MERGER ORGANISATIONAL STRUCTURE IS DESIGNED TO ALLOW MAXIMUM FOCUS ON
CLIENT SEGMENT NEEDS, AND ALL EFFORTS WILL BE MADE TO EXTRACT AS MANY SYNERGIES
AS POSSIBLE
<TABLE>
<CAPTION>
UBS Warburg -- Chairman & CEO
M Granziol
CHIEF OPERATING OFFICER REGIONAL HEAD ASIA PACIFIC
J Costas C Standish
CORPORATE & INSTITUTIONAL CLIENTS PRIVATE CLIENTS AND
AND PRIVATE EQUITY DIVISION ASSET MANAGEMENT DIVISION
CEO -- M Granziol CEO -- J GRANO
<S> <C> <C> <C>
CORPORATE FINANCE PRIVATE EQUITY US PRIVATE CLIENTS ASSET MANAGEMENT
R Tapner/R Gillespie (UBS Capital) (PaineWebber) (Mitchell Hutchins)
P de Weck M Sutton B Storms
EQUITIES NON-US
C Buchan PRIVATE CLIENTS
J Palmer
Fixed Income 1,500 e-services & E-COMMERCE/
J Costas UBSW PC employees INTERMEDIARIES
M Hoekstra
ADMINISTRATION/
TREASURY PRODUCTS TRANSACTION SVCS
J Costas R Dolan
CONTROLS/LOGISTICS 1,600 Capital Markets OPERATIONS & SYSTEMS
M Granziol/J Costas employees R Silver
</TABLE>
Abcd 10
<PAGE> 12
STRONG FINANCIAL BASE
SECTION 2
Abcd
<PAGE> 13
STRONG FINANCIAL BASE
WE HAVE THE RESOURCES TO FINANCE OUR AMBITIONS, AND THE STRONGEST FINANCIAL
PERFORMANCE OF ANY OTHER MAJOR INVESTMENT BANK IN H1 2000 OVER H1 1999(1)
UBS Warburg
net profit before tax
{BAR GRAPH}
Change in
net profit before tax(1) H1
2000 vs. H1 1999
<TABLE>
<CAPTION>
(%)
<S> <C>
UBSW 97
Lehman 75
ML CICG 59
DLJ 42
GS 40
MSDW Secs 37
SSB 25
CSFB 6
JPM 6
</TABLE>
Note:
(1) As measured by net profit before tax in US$, per competitors earnings
releases. Excludes UBS Warburg profit on sale of GTF businesses in H1 1999
Abcd 12
<PAGE> 14
STRONG REVENUE GROWTH
UBS WARBURG HAS SHOWN SUBSTANTIAL TOP LINE REVENUE GROWTH IN THE PAST YEAR, WITH
STRONG GROWTH IN REVENUE PER HEAD, REFLECTING OUR MARKET SHARE GROWTH AND
PRODUCTIVITY GAINS IN THE FRONT OFFICE
Net Revenues
<TABLE>
<CAPTION>
(CHFm)
(28% CAGR)
ANNUALISED)
<S> <C>
Q1 1999 3,361
Q2 1999 3,447
Q3 1999 3,110
Q4 1999 2,790
Q1 2000 5,194
Q2 2000 4,886
</TABLE>
Net Revenue per head growth
H1 2000 vs. H1 1999
<TABLE>
<CAPTION>
(%)
<S> <C>
Lehman 42
ML CICG 36
UBSW 32
GS 16
CSFG 9
DLJ 7
JPM 8
</TABLE>
Note:
(1) Revenues per Head based on US$ Revenues and actual headcount. UBSW excludes
profit on sale of GTF business in H1 1999
Abcd 13
<PAGE> 15
STRONG REVENUE GROWTH(CONTINUED)
UBS WARBURG'S PERFORMANCE IMPROVED WITHOUT TAKING ON MORE MARKET RISK, AND AS WE
CONTINUED TO REDUCE OUR CORPORATE LOAN PORTFOLIO
Value-at-Risk(1)
<TABLE>
<CAPTION>
(CHFm)
<S> <C>
Q1 1999 222
Q2 1999 210
Q3 1999 198
Q4 1999 224
Q1 2000 277
Q2 2000 231
</TABLE>
UBS Warburg
Corporate loan portfolio(2)
<TABLE>
<CAPTION>
(CHFbn)
<S> <C>
Q1 1999 153
Q2 1999 133
Q3 1999 107
Q4 1999 99
Q1 2000 97
Q2 2000 96
</TABLE>
Notes:
(1) 10-day holding period, 99% confidence level
(2) On balance sheet loans and off balance sheet committed facilities as per
internal corporate loan book data not including all loan businesses
published on the balance sheet
Abcd 14
<PAGE> 16
PERSONNEL COSTS
WE CONTINUE TO MAKE SUBSTANTIAL INVESTMENTS IN THE QUALITY AND NUMBER OF OUR
STAFF, KEEPING PERSONNEL COSTS IN LINE WITH REVENUE GROWTH
Personnel costs
<TABLE>
<CAPTION>
(CHFm)
<S> <C>
Q1 1999 1,932
Q2 1999 2,141
Q3 1999 1,713
Q4 1999 1,492
Q1 2000 2,988
Q2 2000 2,761
</TABLE>
Personnel costs as % of revenues
<TABLE>
<CAPTION>
(%)
<S> <C>
Q1 1999 56.1
Q2 1999 57.3
Q3 1999 53.9
Q4 1999 51.8
Q1 2000 56.7
Q2 2000 56.0
</TABLE>
Abcd 15
<PAGE> 17
HIGH PROFITS IN 2000
UBS WARBURG HAS DELIVERED CONSISTENTLY HIGH OVERALL PROFITABILITY AND EXCELLENT
RETURN ON EQUITY
Average regulatory equity usage
<TABLE>
<CAPTION>
(CHFm)
<S> <C>
Q1 1999 11,244
Q2 1999 11,332
Q3 1999 10,982
Q4 1999 10,679
Q1 2000 10,500
Q2 2000 10,690
</TABLE>
Annualized pre-tax return on
average regulatory equity
<TABLE>
<CAPTION>
(%)
<S> <C>
Q1 1999 25.2
Q2 1999 22.5
Q3 1999 19.8
Q4 1999 9.2
Q1 2000 50.2
Q2 2000 45.4
</TABLE>
Abcd 16
<PAGE> 18
TOP INSTITUTIONAL SECURITIES FIRMS--H1 2000
UBS WARBURG IS A TOP THREE INSTITUTIONAL SECURITIES FIRM, AND TOP FIVE OVERALL
<TABLE>
<CAPTION>
(US$bn)
Institutional Clients
& Global Markets Investment Banking Total
<S> <C> <C> <C>
DB GCI 6.7 0.9 7.6
MSDW Secs 5.0 2.2 7.2
GS 4.6 2.3 6.9
ML CICG 4.2 2.0 6.2
UBSW 4.9 1.1 6.0
CSFB 3.9 1.7 5.6
JPM 3.4 0.8 4.2
SSB 2.7 1.3 4.0
Lehman 2.5 0.9 3.4
DLJ 1.3 0.7 2.0
</TABLE>
INVESTMENT BANKING REVENUES = M&A AND PRIMARY REVENUES FOR EQUITIES, HIGH
GRADE, HIGH YIELD AND CONVERTIBLES
Source: Total Revenues as per disclosed results, adjusted for disclosed
accounting differences Investment Banking Revenues--Freeman & Co
Analysis / Thomson Financial Securities Data, except for UBS Warburg
which is actual Investment Banking Revenues (includes some products not
captured by Freeman Analysis)
Notes:
1 UBS Warburg includes Corporate & Institutional Clients and Private Equity
only
2 JP Morgan excludes Asset Management / High Net Worth Individuals and
Euroclear
3 Salomon Smith Barney includes US retail business, excludes forex and
emerging markets (within other parts of Citigroup)
4 Goldman Sachs excludes Asset Management, Private Client Services and
Clearing Services
5 Morgan Stanley Dean Witter Securities revenues = US$11.4 billion. Figure
shown is an estimate excluding US retail
Abcd 17
<PAGE> 19
Growing global investment banking capabilities
SECTION 3
Abcd
<PAGE> 20
Corporate client franchise
OUR CORPORATE CLIENT FRANCHISE HAS GROWN BY 20% IN H1 2000 OVER H1 1999, AND NOW
ACCOUNTS FOR APPROXIMATELY 18% OF TOTAL UBS WARBURG REVENUES
<TABLE>
<CAPTION>
Revenues (CHFm)
Investment Banking Other Revenues from Corporates(1) Total
<S> <C> <C> <C>
Q1 1999 628 131 759
Q2 1999 613 117 730
Q3 1999 482 167 649
Q4 1999 875 155 1,030
Q1 2000 623 189 812
Q2 2000 826 151 977
</TABLE>
* Sales of Equity, Fixed Income Treasury Products to Corporate Clients & Lending
to Corporates
Abcd 19
<PAGE> 21
Growing our capabilities
UBS WARBURG IS COMMITTED TO FURTHER EXPAND ITS CORPORATE FINANCE CAPABILITIES
AND IN LATE 1999 IDENTIFIED THREE KEY AREAS OF EXPANSION: TARGETED GLOBAL
SECTOR-BASED COVERAGE, CORPORATE COVERAGE IN EUROPE AND LEVERAGED FINANCE
CAPABILITIES IN US AND EUROPE
- Our M&A business has made significant inroads globally and is currently
ranked top 5(1)
- By year end 2000, with the integration of PaineWebber corporate finance, we
will have 1,460 corporate finance professionals, an increase of 33% over
year end 1999
- Significant senior hires in Germany and France as well as sector teams have
expanded our corporate coverage - in particular in the largest global
sectors such as FIG and TMT - this will begin to deliver significant
results in the next 12-24 months as client relationships are fully
developed
- Our leveraged finance business has been transformed into a successful
distribution-led business, with the greatest improvements in rankings of
any firm(2)
Notes:
(1) Thomson Financial Securities Data 1 Jan 2000 - 30 Sep 2000
(2) Institutional Investor All America Fixed Income Research Team 2000
Abcd 20
<PAGE> 22
GROWTH OF THE CORPORATE CLIENT FRANCHISE
UBS WARBURG'S M&A RANKINGS CONTINUE TO IMPROVE AND PLACE US IN THE TOP TIER
GLOBALLY WITH MAJOR MARKET SHARE IMPROVEMENTS BOTH GLOBALLY AND EVEN MORE SO IN
EUROPE
<TABLE>
<CAPTION>
SEP 2000 YTD FULL YEAR 1999
--------------------------------------------------------------- ----------------------------
REGION RANK VALUE SHARE RANK VALUE SHARE
--------------------------------------------------------------- ----------------------------
<S> <C> <C> <C> <C> <C> <C>
$Bn % $Bn %
COMPLETED TRANSACTIONS
Global 5 476.4 18.2% 10 145.4 6.6%
----------------------------------------------------------------------------------------------------
Europe 4 377.3 35.3% 7 114.6 11.8%
ANNOUNCED TRANSACTIONS
Global 6 321.1 11.9% 6 530.8 15.5%
Europe 3 199.5 16.7% 5 308.1 19.9%
====================================================================================================
</TABLE>
Source: Thomson Financial Securities Data. "Share" is % of the value of the
deals participated in
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<PAGE> 23
GROWTH OF THE CORPORATE CLIENT FRANCHISE
UBS WARBURG'S CORPORATE CLIENTS INCLUDE GLOBAL COMPANIES IN THE US AND EUROPE
IN A WIDE RANGE OF INDUSTRY SECTORS
[TISCALI LOGO]
SEPTEMBER 2000
Originating and advising Italian ISP / portal Tiscali in its recommended
US$5.4bn offer for the Dutch ISP / portal, World Online. The largest new economy
M&A deal in Europe to date
[VODAFONE LOGO]
MAY 2000
Advised Vodafone and Mannesman in their US$46.5bn disposal of Orange Plc to
France Telecom
[NABISCO LOGO]
JUNE 2000
Advising Nabisco Group Holdings ("NGH") on the US$18.9bn sale of Nabisco to
Philip Morris and then advising on the US$9.8bn merger of Nabisco Group
Holdings and RJ Reynolds
[UNILEVER LOGO]
MAY 2000
Advising Unilever in its US$20.4bn acquisition of Bestfoods. Also are arranging
and providing financing
Abcd 22
<PAGE> 24
CLOSING A STRATEGIC GAP--LEVERAGED FINANCE
UBS WARBURG HAS MADE SIGNIFICANT PROGRESS IN ESTABLISHING TARGETED CAPABILITIES
IN LEVERAGED FINANCE ON A GLOBAL BASIS - A CRITICAL HIGH MARGIN INVESTMENT
BANKING PRODUCT
- Hiring plan completed - Expertise gap filled through 25 senior hires
covering US, Europe and Latin America
- Platform has been transformed to a distribution-led business as measured by
our syndication success
- Ranked 13th in Global Leveraged Loans YTD by volume (compared to 30th in FY
1999), 11th in High Yield Bond Bookrunners (compared to 19th in FY 1999)(1)
- US High Yield Research team improved rankings from number 20 to number
8--biggest jump in rankings of any firm(2)
- Operating revenues at projected levels despite a less favorable market than
expected
Source: (1) Thomson Financial Securities Data
(2) Institutional Investor All America Fixed Income Research Team
Abcd 23
<PAGE> 25
We continue to dominate the Eurobond Market
UBS WARBURG REMAINS THE LEADING PLAYER IN THE EUROBOND MARKET, ALTHOUGH OUR
PRIMARY FIXED INCOME BUSINESS IS RUN FOR PROFITABILITY NOT FOR LEAGUE TABLE
POSITIONS
Bookrunner Eurobonds all currencies (2000 year to date)
<TABLE>
<CAPTION>
2000 1999 AMOUNT %
RANK RANK MANAGER OR GROUP (US$BN) ISSUES SHARE
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1 2 UBS WARBURG 60.1 443 9.3
--------------------------------------------------------------------------------------------------------------------------
2 3 Morgan Stanley Dean Witter 54.3 337 8.4
3 6 Credit Suisse First Boston 49.7 287 7.7
4 1 Deutsche Bank 49.6 312 7.7
5 8 Salomon Smith Barney 46.8 234 7.2
6 4 Merrill Lynch & Co 43.1 338 6.7
7 11 Barclays Capital 32.4 160 5.0
8 9 JP Morgan 31.8 131 4.9
9 7 ABN AMRO 26.1 132 4.0
10 5 BNP Paribas 22.2 109 3.4
--------------------------------------------------------------------------------------------------------------------------
TOTAL 646.9 3,859 100.0
==========================================================================================================================
</TABLE>
Source: Capital Data Bondware excludes Pfandbriefe
Abcd 24
<PAGE> 26
UBS Warburg improving US position
BASED ON STRONG TRADING AND DISTRIBUTION IN THE US WE ARE INCREASINGLY TAKING
LEADERSHIP IN US$ GLOBAL BONDS
US$ Global bond offerings--2000 year to date
<TABLE>
<CAPTION>
2000 1999 FACE VALUE NO. OF
RANK RANK MANAGER OR GROUP (US$BN) ISSUES
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1 2 Merrill Lynch & Co 45.6 22
2 9 UBS Warburg 40.9 26
----------------------------------------------------------------------------------------------------------
3 4 Morgan Stanley Dean Witter 39.0 20
4 6 Goldman Sachs & Co 36.6 19
5 1 Salomon Smith Barney 31.9 22
6 5 JP Morgan Securities 24.4 14
7 8 Credit Suisse First Boston 22.7 12
8 10 Deutsche Bank Securities 19.1 10
9 14 ABN AMRO 14.0 6
10 7 Lehman Brothers 13.0 10
==========================================================================================================
</TABLE>
Source: Capital Data Debt Desk
Notes: Excludes ABS, MBS, high yield and self-issuance
Full credit to bookrunner
Abcd 25
<PAGE> 27
Primary Equities and Equity Linked
OUR CURRENT EQUITY CAPITAL MARKETS LEAGUE TABLE RANKINGS HAVE WEAKENED, ALTHOUGH
THE "INTERNATIONAL" LEAGUE TABLES UNDERSTATE OUR LEADING DOMESTIC BUSINESSES IN
THE UK, SWITZERLAND AND AUSTRALIA
<TABLE>
<CAPTION>
Q3 2000 YTD FULL YEAR 1999
---------------------------------- ---------------------------------
REGION RANK VALUE SHARE RANK VALUE SHARE
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$Bn % $Bn %
All International 9 10.9 3.7% 6 18.2 8.5%
----------------------------------------------------------------------------------------------------------------------
Europe(1) 8 7.6 5.1% 6 11.8 9.6%
Rest of World(1) 12 3.4 2.3% 5 5.8 11.0%
Int'l Equity Linked 4 3.7 11.2% 4 5.6 14.9%
======================================================================================================================
</TABLE>
Source: Capital Data Bondware
Note:
(1) International Tranches Only
Abcd 26
<PAGE> 28
Primary Equities
INITIATIVES ALREADY TAKEN AND OTHERS UNDERWAY AIM TO RESTORE UBS WARBURG TO A
SIGNIFICANTLY STRONGER POSITION IN PRIMARY EQUITIES
- We chose to enter the "TMT" market later than our major competitors -
over 50% of fees on primary deals done in this sector in the first 9 months
of 2000. Over the last few months we have taken advantage of the market
weakness to hire additional resources and increase our focus - this is now
beginning to deliver results
- Weaknesses in corporate coverage in Germany and France have been addressed
with senior banker hires
- Product specialists in block trades and convertibles have also been hired
to further strengthen our capabilities
- The PaineWebber merger will enhance our position with respect to retail
distribution and institutional distribution into the US market for foreign
and domestic issuers
Abcd 27
<PAGE> 29
Competitor loan book analysis
UBS WARBURG'S INITIATIVE TO REDUCE ITS OVERALL LOAN PORTFOLIO IS LARGELY
COMPLETED. WE WILL SELECTIVELY USE THE BALANCE SHEET FOR HIGHER MARGIN,
VALUE-ADDED CORPORATE BUSINESS TO SUPPORT OUR CLIENTS TO DIFFERENTIATE US FROM
ML, GS AND MSDW, BUT WE WILL NOT USE LARGE BALANCE SHEET GROWTH TO BUY
"CORPORATE BUSINESS" AS OTHERS DO
Loan portfolios(1) as of 31 December 1999 and 1998 (indicative)
[BAR GRAPH]
Source: Annual reports, UBS Warburg analysis
Note:
(1) Includes outstanding loans, standby Letters of Credit, unused commitments
and third party guarantees
Abcd 28
<PAGE> 30
Corporate client franchise--client fee ranking
OUR CORPORATE REVENUES HAVE GROWN SUBSTANTIALLY AND THE BUSINESS IS PROFITABLE.
OUR MARKET SHARE HAS DECLINED SLIGHTLY BUT HAS NOT MATERIALLY IMPACTED OUR
OVERALL REVENUES
UBS Warburg Gross Fee Rankings and Market Share for M&A and Financing Products:
1999 & Q3 2000 YTD(1)
<TABLE>
<CAPTION>
Q3 2000 YTD FULL YEAR 1999
---------------------------------------------- ----------------------------------------------
REGION / TOTAL TOTAL
PRODUCT FEE UBSW UBSW UBSW FEE UBSW UBSW UBSW
POOL RANK FEES SHARE POOL RANK FEES SHARE
$BN $BN $BN $BN
---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Global 38.6 9 1.2 3.1% 50.5 7 1.8 3.5%
---------------------------------------------------------------------------------------------------------------------------
Europe 12.3 6 0.6 4.5% 15.4 4 0.7 4.8%
Americas 20.7 12 0.4 2.0% 28.0 8 0.8 2.7%
---------------------------------------------------------------------------------------------------------------------------
M&A 16.8 7 0.6 3.3% 20.2 6 0.8 4.2%
Financing(2) 21.8 9 0.6 2.9% 30.2 9 0.9 3.1%
---------------------------------------------------------------------------------------------------------------------------
</TABLE>
Source: Thomson Financial Securities Data and Freeman & Co. estimates
Notes:
(1) Restated on a pro-forma basis to reflect UBS Warburg/PaineWebber, CSFB/DLJ
& Chase / JP Morgan mergers
(2) Includes Equity, Equity Linked, High Grade and High Yield New Issues
Abcd
<PAGE> 31
Overall corporate client franchise
WE WILL CONTINUE TO MAKE A SIGNIFICANT NUMBER OF SENIOR HIRES, NOW MAINLY
FOCUSED IN THE US, ANCHORED ON OUR FINANCIAL PERFORMANCE AND ENHANCED US
PLATFORM
- Current mergers in the investment banking industry are creating instability
in the market for experienced senior professionals
- The PaineWebber merger will bring the American component of UBS Warburg
staff to 2/3rds and will make us an employer of choice in the US to attract
talent
- We will also selectively continue to strengthen our sector and country
capabilities in the European and Asian regions
Abcd 30
<PAGE> 32
Achievements for 2000 in private equity
OUR PRIVATE EQUITY BUSINESS CONTINUES TO BROADEN ITS INVESTMENT PROGRAM IN NEW
COUNTRIES AND SECTORS, IN BOTH OLD AND NEW ECONOMY COMPANIES, WHILE EXPANDING
OUR GLOBAL PRESENCE
- CHF0.9bn of new investments made in first half of 2000; bringing portfolio
book value to CHF3.8bn, with unrealised gains of nearly CHF1.4 bn
- New business established in Japan, Technology team established in Asia to
join existing teams in the US and Europe - part of overall objective to
develop centres of excellence and sector expertise
- Successful closing of US $1bn US fund and US $500m Latin America fund.
EUR2bn European fund prepares to launch Q1 2001; US $1 billion Asian Fund
prepares to launch Q3 2001
Abcd 31
<PAGE> 33
Maintaining business synergies
THERE ARE SUBSTANTIAL AND SIGNIFICANT POSITIVE LINKS BETWEEN PRIVATE EQUITY, THE
OTHER BUSINESS AREAS OF UBS WARBURG AND OTHERS PARTS OF THE UBS GROUP COVERING
ORIGINATION OF INVESTMENTS, FUNDS, FINANCING AND EXECUTION SERVICES
<TABLE>
<S> <C> <C>
- Private Banking - Private Banking
- Corporate Finance
- Equity Research
- Leveraged
Finance/High
Yield
FUND RAISING ORIGINATION &
INVESTMENT
abcd
EXIT ADDING VALUE
- Acquisitions
- M&A
- Industry Groups
- Corporate - Equity Research
Finance - Leveraged
- Primary Equity Finance/High
Yield
</TABLE>
Abcd 32
<PAGE> 34
Building value in private equity
AS A GLOBAL AND WELL-ESTABLISHED PLAYER IN PRIVATE EQUITY, WE HAVE BUILT A
LEADING REPUTATION IN RAISING FUNDS, MANAGING INVESTMENTS AND REALISING GAINS
- Impressive historical track record with an average IRR of 50-60% p.a. and a
historical loss rate of only 5% p.a.
- Commitment to partnership and flat structure results in a fast and
efficient investment process
- Experienced investment teams managed for long-term performance and
continuity
- Significant synergies within UBS Warburg yield strong competitive
advantages
OUR LEVERAGED FINANCE AND PRIVATE EQUITY CAPABILITIES, COMBINED WITH OUR
INITIATIVES TO STRENGTHEN RESEARCH AND CORPORATE FINANCE RESOURCES FORM THE BASE
FOR GROWTH IN THE TMT SECTOR WHICH ACCOUNTS FOR A LARGE PART OF "INVESTMENT
BANKING" FEES
Abcd 33
<PAGE> 35
Relationship enhancing technology
SECTION 4
Abcd
<PAGE> 36
Relationship enhancing technology
UBS WARBURG'S TECHNOLOGY STRATEGY AIMS TO DIFFERENTIATE OURSELVES FROM THE
COMPETITORS
- We will provide not only efficiency in the distribution of information and
in processing, but technology which is truly individualised, client
enabling and closely linked to the human advisory component
- Our business is not technology driven, but rather technology supports the
client and advisor, and allows a strengthening of the relationship with
institutional, corporate and affluent private clients.
- Our technology strategy is a culture, based on maximum transparency within
an interactive online community
- UBS Warburg's e-commerce capabilities are as good as the best today, and
the PaineWebber front-end/EDGE technology enhancements will provide an
additional boost
Abcd 35
<PAGE> 37
E-commerce at UBS Warburg
CLIENT TECHNOLOGY AT UBS WARBURG IS AN INTEGRAL PART OF ALL OF OUR CLIENT
BUSINESS
[LOGOS AS FOLLOWS]
DebtWeb
TP Trader
OptionsView
DealKey
SwissKey
Avistar
CreditDelta
DealRoom
IBOL
CreditWeb
ERAM
GovernmentWeb
Client Chat
IDEALer
SAFE
FixWeb
ResearchWeb
Abcd 36
<PAGE> 38
IBOL--the UBS Warburg portal for institutional and corporate clients
WE ARE ON TARGET TO ACHIEVE OUR OBJECTIVE TO PROVIDE OUR CLIENTS WITH THE CHOICE
TO TRANSACT ALL BUSINESS ELECTRONICALLY
<TABLE>
<CAPTION>
9 May 2000
<S> <C> <C>
- Research web
- Atlas Web
- ERAM (EQ risk analysis
and management tool)
- FX2B
- VolCast
Institutional
clients - Bond indices
- ECP / MTN
- Secondary Euro, US
corporates and
primary Euro
- Research web
Corporate - DebtWeb
clients
- DealKey
</TABLE>
<TABLE>
<CAPTION>
New products
<S> <C> <C>
- Convertibles market
overview
- Index and data analysis
- New market commentary
and research pages
- Economic webcast
Institutional - Technical analysis online
clients
- Learning centre
- Enhanced analytical tools
- Enhanced quantitative /
advisory commentary
- New Market commentary
and research pages
Corporate
clients - DealKey v.2 - transaction
capabilities
- LIBOR derivatives site
</TABLE>
<TABLE>
<CAPTION>
Planned
<S> <C> <C>
- FixWeb
- PhoenixWeb (for
investment trusts)
- ERAM v.2
- FX strategy; money
markets
Institutional - Online FX spot order tool
clients
- New "Q-Tools"
(stand-alone analytical
suite of applications)
- New market commentary /
research pages for ETD;
Latin America
- New market commentary /
research pages for ETD;
Corporate Latin America
clients
- Global Technology sector
marketing and analysis
</TABLE>
Abcd 37
<PAGE> 39
IBOL -- Investment Banking OnLine
e-COMMERCE IS A REALITY AT UBS WARBURG--OUR CLIENTS ARE USING IT
TOTAL USERS OF IBOL / e-COMMERCE
[LINE GRAPH]
ACCUMULATED VOLUME THROUGH DEBTWEB
[LINE GRAPH]
RESEARCHWEB HOMEPAGE HITS PER DAY
[LINE GRAPH]
Abcd 38
<PAGE> 40
Increased use of Client Interchange
INTERACTIVE TECHNOLOGY HAS PROVED TO BE EFFECTIVE IN DEEPENING CLIENT
RELATIONSHIPS, AND WILL BE LEVERAGED ACROSS OUR PAINE WEBBER CLIENT
RELATIONSHIPS
UBS Warburg Interchange users
[LINE GRAPH]
Client Interchange clients
[LINE GRAPH]
Abcd 39
<PAGE> 41
e-services project
UBS WARBURG'S E-SERVICES PROJECT - INCORPORATING MANY OF THESE CLIENT
RELATIONSHIP ENHANCING TECHNOLOGIES - HAS DELIVERED TO ITS PRE-LAUNCH
OBJECTIVES IN A TIMELY AND VERY SATISFACTORY MANNER
- UK banking licence received from the FSA, with passport to all European
countries
- The two state of the art data centers in London are functioning in the
production environment
- The real time e-services platform (multi-currency, multi-entity,
multi-lingual) has been built and successfully tested. It includes ACE
secure token technology and high speed personalised delivery of information
to users
Abcd 40
<PAGE> 42
Action plan for immediate term
THE MERGER WITH PAINEWEBBER PROVIDES UBS WARBURG WITH A UNIQUE OPPORTUNITY TO
ADDRESS THE CORE AFFLUENT(1) MARKET IN EUROPE WITH AN ENHANCED, ADVISOR-CENTRIC
CLIENT OFFERING, WHICH WOULD NOT HAVE BEEN POSSIBLE OTHERWISE. IN ORDER TO
BETTER LEVERAGE THE E-SERVICES TECHNOLOGY AND CAPABILITIES AND TO ALIGN OUR
EUROPEAN MARKETING, WE HAVE DECIDED TO:
- Redeploy existing e-services "assets" which have been successfully
developed in Germany and move them into a new, integrated private client
business in Europe
- Focus on the core affluent and HNW clients and build a truly
advisor-centric model, both of which require a realignment of e-services
capabilities. An internal business and systems audit has identified
significant opportunities to leverage the overall e-services platform
- Combine the best of PaineWebber's front-end technology (EDGE look and feel)
and advisory processes with the best of e-services back-end
- Cancel the e-services pilot launch planned for late Autumn in Germany, and
run a full internal test of e-services through until year end
- In parallel, we will step up our efforts to integrate the infrastructure,
product development and marketing capabilities of UBS Warburg, under PCAM
management, to capture maximum leverage, efficiency and client penetration
in this very attractive and growing market
Abcd 41
<PAGE> 43
Global distribution power and content
SECTION 5
Abcd
<PAGE> 44
Global distribution strengths of UBS / UBS Warburg
UBS WARBURG, AS PART OF UBS GROUP, IS UNIQUELY POSITIONED, WITH DIRECT ACCESS TO
ALL THE KEY INVESTOR SEGMENTS WORLD-WIDE. UBS WARBURG IS A LEADER COVERING
INSTITUTIONAL WEALTH MANAGERS, AND THROUGH PAINEWEBBER AND UBS SWITZERLAND,
DIRECTLY REACHES PRIVATE CLIENTS HOLDING INVESTABLE ASSETS WORTH $1.1 TRILLION
<TABLE>
<CAPTION>
MARKET SEGMENT (US$TN) BRAND RESOURCES
-------------- -------- ----- ---------
<S> <C> <C> <C>
Institutionally Managed 30.0 abcd 3,100 Client Facing Sales, Sales
Wealth Traders & Analysts
US Core Affluent 12.5 PaineWebber 8,500 Client Advisors managing
Markets 2.7 million clients with investable assets
of US$484 billion
European / Asian Core 13.0 abcd 200 Client Advisors managing
Affluent/HNW 6,600 clients with investable assets of
US$22 billion
Offshore Private Wealth 6.0 ab The world's leading private bank
Market
</TABLE>
Source: Gemini Consulting, McKinsey & Co, DataMonitor, UBS Warburg / PaineWebber
Analysis
Abcd 43
<PAGE> 45
Institutional client franchise
UBS WARBURG HAS A HUGE AND HIGHLY PROFITABLE INSTITUTIONAL CLIENT AND MARKETS
FRANCHISE. THIS GENERATED H1 2000 REVENUES OF CHF 7.1BN, AN INCREASE OF 36%
OVER H1 1999, AND CONSISTENTLY ACCOUNTS FOR APPROXIMATELY 70% OF TOTAL REVENUES
[BAR CHART]
<TABLE>
<CAPTION>
Revenues (CHFm) Q1 1999 Q2 1999 Q3 1999 Q4 1999 Q1 2000 Q2 2000
--------------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
- Institutional Clients & Global Markets 2,532 2,695 2,008 1,684 4,050 3,040
- Investment Banking 628 613 482 875 623 826
- Other Revenues from Corporates* 131 117 167 155 189 151
</TABLE>
Note:
(1) Sales of Equity, Fixed Income Treasury Products to Corporate Clients &
Lending to Corporates
Abcd 44
<PAGE> 46
UBS WARBURG RISK CAPABILITIES
MANAGING MARKET RISK IS ONE OF OUR CORE COMPETENCIES
- We have implemented highly centralised trading across all product classes
globally
- We are able to capture substantial returns in difficult / volatile markets
- We are one of the largest liquidity providers in the market, which allows
us to effectively support our clients' activities
MANAGING MARKET RISK IS ONE OF OUR CORE CAPABILITIES AND KEY TO OUR
SUCCESS WITH INSTITUTIONAL CLIENTS
Abcd 45
<PAGE> 47
STRENGTH IN SECONDARY EQUITIES (CASH & DERIVATIVES)
OUR SECONDARY EQUITY REVENUES WERE THE HIGHEST IN THE INDUSTRY IN H1 2000, AND
HAVE SHOWN A CAGR OF 81% OVER THE PAST THREE YEARS
UBS Warburg secondary equity revenues (CHFm)
84% CAGR
1997-2000
annualised
[BAR GRAPH]
Competitor analysis of secondary equity revenues H1 2000
[BAR GRAPH]
Source: Earnings Releases, SEC Filings, Freeman & Co, UBS Warburg Analysis
Abcd 46
<PAGE> 48
STRENGTH IN SECONDARY EQUITIES (CASH PRODUCTS)
GROWTH IN THE TURNOVER OF GLOBAL EQUITY MARKETS HAS INCREASED SUBSTANTIALLY
SINCE 1990, WHILE MARGINS HAVE DECLINED MUCH MORE SLOWLY
<TABLE>
<CAPTION>
ANNUAL GROWTH RATE ANNUAL GROWTH RATE
1990-1999 1999-H1 2000(1)
--------------------------- -----------------------------
EQUITY MARKET MARKET AVERAGE MARKET AVERAGE
TURNOVER & MARGINS TURNOVER MARGINS TURNOVER MARGINS
---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Europe +22% - 6% +55% - 4%
North America +30% -14% +70% -13%
Asia Pacific +10% - 4% +60% -12%
Total +22% - 8% +65% - 9%
---------------------------------------------------------------------------------------------------
</TABLE>
Source: Market Turnover - FIBV ; Margins - UBS Warburg actual results
Note:
(1) H1 2000 is annualized for comparative purposes
Abcd 47
<PAGE> 49
Strength in Secondary Equities(CASH PRODUCTS)
MARGINS ARE PROJECTED TO DECLINE FURTHER, BUT THE FURTHER RAPID GROWTH IN MARKET
TURNOVER IS EXPECTED TO OUTPACE THIS. UBS WARBURG IS GROWING MARKET SHARE
STEADILY AND IS WELL POSITIONED TO STAY IN THE TOP 3 GLOBALLY
Total market commissions
(US$m)
[BAR GRAPH]
[Arrow pointing to right]
H1 1999 - H1 2000
+40%
<TABLE>
<S> <C>
Q1 1999
Q2 1999
Q3 1999
Q4 1999
Q1 2000
Q2 2000
</TABLE>
UBS Warburg's global market share of
commissions and rank
[BAR GRAPH]
<TABLE>
<CAPTION>
3RD 3RD 3RD 3RD 2ND 3RD
<S> <C> <C> <C> <C> <C> <C>
1999 Q1 8.1%
1999 Q2 8.4%
1999 Q3 8.3%
1999 Q4 8.0%
2000 Q1 9.0%
2000 Q2 8.7%
</TABLE>
Source: Leading Private Industry Survey
Abcd 48
<PAGE> 50
Strength in secondary equities(cash)
UBS WARBURG'S EQUITY CAPABILITIES AND CLIENT BASE ARE WELL BALANCED ACROSS ALL
REGIONS OF THE WORLD, AND THE US PRODUCT WILL GET A FURTHER BOOST FROM THE
PAINEWEBBER RESEARCH AND SALES SKILLS POST-MERGER
% of total commissions generated by UBS Warburg institutional equity clients in
each region (H1 2000) (split according to client domicile)
[PIE CHART]
<TABLE>
<S> <C>
US 40%
UK 20%
Switzerland 11%
Other European 18%
Asia/Pacific 8%
Other 3%
</TABLE>
Equity commission revenues from institutional clients by product at UBS Warburg
(H1 2000)
[PIE CHART]
<TABLE>
<S> <C>
European equities 55%
N. American equities 19%
Asia/Pacific equities 22%
Other equities 4%
</TABLE>
Abcd 49
<PAGE> 51
Research capabilities improving across the board
WE ARE ONE OF THE LEADING RESEARCH FIRMS GLOBALLY. THE ADDITION OF PAINEWEBBER,
AND OTHER RECENT HIRES WILL FURTHER IMPROVE THE OVERALL RANKINGS. ALTHOUGH
RESEARCH RANKINGS DO NOT EQUATE TO COMMISSIONS PAID, AS OUR LEADING GLOBAL
POSITION IN EQUITY CLIENT REVENUES DEMONSTRATES, WE DO TAKE RESEARCH VERY
SERIOUSLY AND WILL CONTINUE TO INVEST IN THIS IMPORTANT CONTENT OFFERING
<TABLE>
<CAPTION>
UBS WARBURG PAINEWEBBER
-------------------- ---------------------
NO OF NO OF
RANKED RANKED
INSTITUTIONAL INVESTOR RANK ANALYSTS RANK ANALYSTS
---------------------- ---- -------- ---- --------
<S> <C> <C> <C> <C>
Global Research 1999 4th 8 -- --
All Europe Research 2000 3rd 36 -- --
All America Research 2000 9th 18
All-America Fixed Income Research 2000(1) 10th 9 14th 5
</TABLE>
Note:
(1) Overall ranking, ranked 8th on both High Grade and High Yield sectors.
PaineWebber rankings driven primarily by Mortgage Backed Securities
Research
Abcd 50
<PAGE> 52
Impact of PaineWebber -- US Equity Research
COMBINING PAINEWEBBER AND UBS WARBURG RESEARCH WILL IMPROVE THE BREADTH OF
COVERAGE AND BRING US TO CRITICAL MASS IN THE US
- Post-merger, UBS Warburg will have 100-105 publishing analysts, which is
very similar to the levels at Merrill Lynch and Salomon Smith Barney
- The integration planning is progressing very well, with little overlap in
terms of sector strengths and coverage lists.
- The PaineWebber research team will provide a significant boost to our
coverage strength in several key US sectors, including
-- Consumer Goods,
-- Energy,
-- Healthcare and
-- Technology.
- The improved US coverage of Media and Pharmaceuticals will complete our
global sector coverage.
- Through PaineWebber, we will also gain the Number 1 ranked Strategy &
Economics Analyst, which fills a major strategic gap and will help to raise
our industry and public relations profile
Abcd 51
<PAGE> 53
Global Distribution Strength in Fixed Income
UBS WARBURG IS RANKED 5TH IN THE US FOR OUR DISTRIBUTION OF CORPORATE BONDS TO
INSTITUTIONAL INVESTORS. THIS FURTHER, ALONG WITH OUR LEADERSHIP POSITION IN
EUROBONDS, DEMONSTRATES OUR BULGE BRACKET STATUS IN FIXED INCOME DISTRIBUTION
Corporate product -- market depth(1)
[BAR CHART]
Source: Orion Consultants
Note:
(1) Market depth measures a firms penetration of its client base - number of
accounts, quality of sales, volume of business
Abcd 52
<PAGE> 54
Impact of PaineWebber -- Fixed Income
THE MERGER WITH PAINEWEBBER WILL ALLOW UBS WARBURG FIXED INCOME TO ESTABLISH A
TRULY GLOBAL REAL ESTATE INVESTMENT BANKING GROUP AND BECOME A SIGNIFICANT
PLAYER IN MORTGAGE BACKED SECURITIES
- The integration of the 85 PaineWebber Real Estate professionals with the
existing 75 strong UBS Warburg Corporate AND Principal Finance Groups will
establish a significant platform in the US, able to compete head-to-head
with the leading firms - We aim to take the expertise and globalise it,
building on our recently established European real estate and principal
finance businesses
- One of PaineWebber's most successful capital markets business is its US
Mortgage and Asset Backed business, covering Trading, Research and S ales
with over 150 professionals. This group will be fully integrated into UBS
Warburg and will be part of a broader product range distributing into
Europe, Asia, and the US
- PaineWebber is consistently ranked as a top two player in the Negotiated
Municipals market, leveraging the strength of their institutional investor
relationships and private client distribution, and meeting the funding
needs of municipal bodies across the US. PaineWebber is also an active
player in the "competitive bid" municipal markets
Abcd 53
<PAGE> 55
Institutional client franchise -- Treasury Products
WE RETAINED OUR 4TH PLACE RANKING IN THE LATEST EUROMONEY FX POLL, AND CONTINUE
TO BUILD PARTNERSHIPS WITH KEY INTERMEDIARY CLIENTS AND PROVIDE THE FULL RANGE
OF TREASURY PRODUCTS AND SERVICES VIA OUR FX2B "PIPE" TO ALL CLIENTS
[BAR GRAPH]
<TABLE>
<CAPTION>
Estimated DB GCI CMB Citi UBSW HSBC GS JPM ML CSFB MSDW
market
share (%)
---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12.5% 8.3% 8.1% 5.0% 4.5% 4.4% 3.9% 3.3% 2.9% 2.9%
</TABLE>
Source: Euromoney May 2000
Abcd 54
<PAGE> 56
Our capabilities are world class, including...
LARGE INSTITUTIONS
<TABLE>
<CAPTION>
CONTENT EXECUTION
------- ---------
<S> <C>
Relationship management Helpdesk
Multi-disciplinary coverage e-training
Strategic advice Capital and liquidity commitment
Portfolio optimisation and advice Interchange community
Balance Sheet management Interchange direct
Direct analyst access Avistar links
Direct economist access Priority position display
Bespoke research pieces Primary issuance access
Data management
Structuring
Risk management advice and software
Management access
Immediate research access
</TABLE>
Abcd 55
<PAGE> 57
From institutional clients ...
...TO HIGH NET WORTH AND AFFLUENT CLIENT SEGMENTS ...
- UBS Warburg is a key content provider to the private clients of the Group
as a whole, and provides execution services in cash and structured
products, across the full product range
- We will leverage our skills, experience and success in meeting the needs of
institutional investors by further targeting:
-- intermediaries - already a substantial business for UBS Warburg,
although there is significant scope for expansion, including using
integrated technology and white-labelling
-- US affluent & HNW clients - provide global content for PaineWebber
clients and further leverage their core client base by expanding the
product range
-- Non-US HNW and Affluent Clients - export PaineWebber experience from
the US market to Europe and Asia, leveraging UBS Warburg's global
content and execution capabilities
Abcd 56
<PAGE> 58
UBS Warburg
TRANSFORMED TO A BROAD BASED GLOBAL FINANCIAL SERVICES FIRM
FURTHER GROWTH TO LEADERSHIP POSITION ACROSS TARGET CLIENT SEGMENTS
VALUE IN COMBINED INSTITUTIONAL, CORPORATE AND AFFLUENT CLIENT BASE
QUALITY PLATFORM FROM WHICH TO GROW ORGANICALLY
Abcd 57
<PAGE> 59
UBS Warburg
is a leading global financial services firm, providing a full spectrum of
products to affluent and high net worth private clients, intermediaries,
institutional and corporate clients globally
Abcd 58
<PAGE> 60
Global locations
[MAP OF WORLD]
-- UBS Warburg offices
- PaineWebber offices
Abcd 59
<PAGE> 61
Appendix I - Financial Results
SECTION 6
Abcd
<PAGE> 62
UBS Warburg Financial Results
UBS WARBURG'S PROFITS IN FIRST HALF 2000 ARE 88% ABOVE 1999 H1, WITH IMPROVED
COST EFFICIENCY AND RETURN ON EQUITY
<TABLE>
<CAPTION>
Q1 Q2 Q3 Q4 Q1 Q2
CHF MILLIONS 1999 1999 1999 1999 2000 2000
------------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Revenues 3443 3736 3179 2883 5269 4926
Credit Loss Expense (82) (89) (69) (93) (75) (40)
----- ----- ----- ----- ----- -----
Net Revenues 3,361 3,647 3,110 2,790 5,194 4,886
Personnel Costs (incl Bonus) 1,932 2,141 1,713 1,492 2,988 2,761
Non-Personnel Costs 721 868 854 1050 887 912
----- ----- ----- ----- ----- -----
Total Costs 2,653 3,009 2,567 2,542 3,875 3,673
===== ===== ===== ===== ===== =====
NPBT 708 638 543 248 1,319 1,213
----- ----- ----- ----- ----- -----
Personnel Cost/Revenues 56.1% 57.3% 53.9% 51.8% 56.7% 56.0%
Cost/Revenues 77.1% 80.5% 80.7% 88.2% 73.5% 74.6%
Annualized Pre-Tax ROE 25.2% 22.5% 19.8% 9.2% 50.2% 45.4%
</TABLE>
Q2 1999 revenues include CHF 200 mn profit on sale of GTF business
Abcd 61
<PAGE> 63
Appendix II - Significant Transactions in 2000
SECTION 7
Abcd
<PAGE> 64
Leveraged Finance Key Transactions in 2000
ACQUISITION LOANS
-----------------
[RMC Logo]
APRIL 2000
(pound sterling)2,000,000,000
Sole Arranger/
Sole Bookrunner
[Scottish & Newcastle Logo]
MAY 2000
(pound sterling)3,400,000,000
Joint Arranger/
Sole Bookrunner
[Unilever Logo]
JUNE 2000
(pound sterling)22,000,000,000
Joint Arranger/
Joint Bookrunner
LEVERAGED LOANS
----------------
[Crescent Logo]
JANUARY 2000
US $850,000,000
Secured Revolving Credit and
Term Loan Facility Sole Lead
Arranger / Bookrunner
[Wassall Logo]
FEBRUARY 2000
(pound sterling)570,000,000
Senior Debt Facilities
Joint Arranger / Joint Bookrunner
Sponsor: Kohlberg, Kravis,
Roberts & Co
[Alfa Laval Logo]
JUNE 2000
(euro)1,200,000,000
Senior Debt Facilities Joint
Arranger Sponsor: Industri Kapital
[Impress Logo]
FEBRUARY 2000
(euro)620,000,000
Joint Arranger / Joint Bookrunner
Sponsor: Doughty Hanson
[Jostens Logo]
MAY 2000
US $645,000,000
Co-arranger Sponsor: Investcorp
Abcd 63
<PAGE> 65
Leveraged Finance key deals -- 31 August 2000 YTD
BRIDGE LOANS
[KPN Logo]
JULY 2000
(pound sterling)1,500,000,000
Bridge facility
Sole arranger
[Jostens Logo]
MAY 2000
US $260,000,000
Bridge facility
Co-arranger
Sponsor: Investcorp
[Alfa Laval Logo]
JUNE 2000
(euro)225,000,000
High Yield Bridge Financing
Joint Arranger
Sponsor: Industri Kapital
[PF.Net Logo]
APRIL 2000
US $225,000,000
Bridge Facility Lead Manager
Sponsor: Odyssey Investment
Partners, LLC
HY BONDS / MEZZANINE FINANCE
[Maxcom Logo]
MARCH 2000
US $300,000,000
Senior Notes
Sole Bookrunner
[Elektra Logo]
MARCH 2000
US $275,000,000
Senior Notes
Sole Bookrunner
[HQ Global Workplaces Logo]
JUNE 2000
US $125,000,000
Mezzanine Bridge Loan and
Mezzanine Bonds
Sole Arranger
Abcd 64
<PAGE> 66
Leveraged Finance key deals -- 31 August 2000 YTD
FINANCIAL SPONSOR M&A AND IPO TRANSACTIONS
[Shoppers Drug Mart Logo]
FEBRUARY 2000
(C)$2,550,000,000
Acquisition Exclusive Adviser
Sponsor: Kohlberg, Kravis, Roberts & Co.
[Wassall Logo]
FEBRUARY 2000
(pound sterling)627,000,000
Public to Private Acquisition
Exclusive Adviser Sponsor:
Kohlberg, Kravis, Roberts & Co.
[Beltone Logo]
MARCH 2000
US $467,500,000
Business sale
Exclusive Adviser
Sponsor: JW Childs
Associates, L.P.
Abcd 65
<PAGE> 67
UBS Warburg continues to dominate...
... THE EUROBOND MARKET
[Fiat Logo]
JULY 2000
Joint bookrunner
(euro)800 million due August 2005
[Assicurazione Generali SpA Logo]
JULY 2000
Joint bookrunner
US $1.25 billion due July 2010
[Deutsche Bahn Logo]
MAY 2000
Joint bookrunner
(euro)1.0 million due June 2010
[Marconi Logo]
JULY 2000
Joint bookrunner
(euro)1.0 billion due March 2010
(euro)500 million due March 2005
Abcd 66
<PAGE> 68
UBS Warburg's improving US position in Fixed Income
FOR MAJOR US ISSUERS
[Freddie Mac Logo]
JUNE 2000
US $4,000 million
Joint bookrunner
SEPTEMBER 2000
US $5,000 million
Joint bookrunner
[Heller Financial Logo]
MAY 2000
US $900 million
Joint bookrunner
[Logo]
JUNE 2000
US $700 million
Joint bookrunner
[The CIT Group Logo]
MARCH 2000
US $1,300 million
Joint bookrunner
Abcd 67
<PAGE> 69
UBS Warburg increasingly takes leadership in...
...THE US $ GLOBAL BOND MARKET(CONTINUED)
[GE Capital Logo]
JANUARY 2000
US $1,000 million
Joint bookrunner
[Federal Home Loan Bank System Logo]
JANUARY 2000
US $3,000 million
Joint bookrunner
[Household Logo]
JULY 2000
US $1,300 million
Joint bookrunner
[General Motors Logo]
JANUARY 2000
US $2,500 million
Joint bookrunner
Abcd 68
<PAGE> 70
UBS Warburg's improving US position in Fixed Income
FOR MAJOR INTERNATIONAL ISSUERS
[World Bank Logo]
FEBRUARY 2000
US$2,000 million
Sole bookrunner
[KPN Logo]
SEPTEMBER 2000
Forthcoming UBS Warburg lead
managed issue
Expected US$4-5 billion
Multi-traded US$ and Euro issues
[JBIC Logo]
JUNE 2000
US$1,000 million
Joint bookrunner
[KfW Logo]
FEBRUARY 2000
US$2,000 million
Joint bookrunner
Abcd 69
<PAGE> 71
Headline Equity and Equity Linked Transactions
EUROPE
[Tella Logo]
MAY 2000
US$8.5 billion
Joint global co-ordinator
Largest IPO in Europe this year
Largest ever equity offering in Scandinavia
[AMADEUS Logo]
MAY 2000
US$813 million
Joint global co-ordinator
Among largest technology
secondary offerings in Europe
[Graphic of Europe]
AMERICAS
[ASUR Logo]
SEPTEMBER 2000
US$375 million
Joint global co-ordinator
Largest Latin American IPO this year
[Graphic of American Flag]
- UBS is best performing lead manager in the after market on US IPOs
[Graphic of North and South America]
Abcd 70
<PAGE> 72
Headline Equity and Equity Linked Transactions
ASIA (EX JAPAN AND AUSTRALASIA)
[Hong Kong Mass Transit Railway Logo]
PENDING
US$1.4 billion
Global co-ordinator
First privatisation in Hong Kong
[KDIC Logo]
PENDING
US$1 billion
Joint bookrunner
Exchangeable into shares of
Korea Electric Power
Largest equity-linked issue in
Asia this year
[Graphic of Asia]
JAPAN
[Lawson Logo]
JUNE 2000
US$2.4 billion
Joint bookrunner
Largest IPO in Japan this year
[Graphic of Japan]
AUSTRALASIA
[Foster's Brewing Group Limited Logo]
AUGUST 2000
US$780 million equity
US$400 million convertible
Global co-ordinator
Largest private sector equity
raising ever in Australasia combined with
underwritten convertible offering
[Graphic of Australia and Southeast Asia]
Abcd 71