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SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

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FORM 10-Q

|ý                                                             | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 
|------------------------------------------------------------- | ----------------------------------------------------------------------------------------
|For the quarterly period ended September 30, 2003            
|OR                                                           
|o                                                             | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|For the transition period
from                             to

Commission File Number: 1-6862

Credit Suisse First Boston (USA), Inc.(Exact name of registrant as specified in its charter)

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|Delaware(State or other jurisdiction of
incorporation or organization)       |  | 13-1898818(I.R.S. employer identification no.)
|---------------------------------------------------------------------------- |  | ----------------------------------------------
|Eleven Madison Avenue
New York, N.Y.(Address of principal executive offices) |  | 10010(Zip Code)                               
|(212) 325-2000(Registrant's telephone number, including area code)          

The Registrant meets the conditions set forth in General Instruction H (1) (a) and (b) of Form 10-Q and is therefore filing this
Form 10-Q with the reduced disclosure format.

Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past
90 days: Yes ý    No o

Indicated
by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange
Act). Yes o    No ý

All
of the outstanding shares of common stock of the registrant, $0.10 par value, are held by Credit Suisse First Boston, Inc.

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CREDIT SUISSE FIRST BOSTON (USA), INC.    Quarterly Report on Form 10-Q for the Quarter Ended September 30, 2003

PART I

FINANCIAL INFORMATIONITEM 1: Financial StatementsCondensed Consolidated Statements of Financial Condition
    (Unaudited) as of September 30, 2003 and December 31, 2002

2Condensed Consolidated Statements of Income
    (Unaudited) for the three and nine months ended September 30, 2003 and 2002

4Condensed Consolidated Statements of Changes in Stockholders' Equity
    (Unaudited) for the nine months ended September 30, 2003 and 2002

5Condensed Consolidated Statements of Cash Flows
    (Unaudited) for the nine months ended September 30, 2003 and 2002

6Notes to Condensed Consolidated Financial Statements (Unaudited)1.

Summary of Significant Accounting Policies

72.

Stock-Based Compensation

93.

Discontinued Operations

104.

Merger-Related Costs

115.

Related Party Transactions

116.

Transfers and Servicing of Financial Assets

137.

Borrowings

178.

Private Equity and Other Long-Term Investments

189.

Net Capital

1910.

Cash and Securities Segregated Under Federal and Other Regulations

1911.

Derivatives Contracts

2012.

Commitments

2213.

Guarantees

2314.

Industry Segment and Geographic Data

2615.

Legal Proceedings

28Independent Accountants' Review Report

29ITEM 2: Management's Discussion and Analysis of Financial Condition and Results of
                   Operations

30ITEM 3: Quantitative and Qualitative Disclosures About Market Risk

50ITEM 4: Controls and Procedures

52PART II

OTHER INFORMATIONITEM 1: Legal Proceedings

53ITEM 5: Other Information

54ITEM 6: Exhibits and Reports on Form 8-K

55Signature

56


AVAILABLE INFORMATION

We file annual, quarterly and current reports and other information with the Securities and Exchange Commission, or SEC. Our SEC filings are available to the
public over the internet on the SEC's website at www.sec.gov. You may also view our annual, quarterly and current reports on our website at www.csfb.com as soon as is reasonably practicable after the
report is electronically filed with, or furnished to, the SEC. The information on our website is not incorporated by reference into this Quarterly Report.

1

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PART I  FINANCIAL INFORMATION  ITEM 1: Financial Statements        CREDIT SUISSE FIRST BOSTON (USA), INC. AND SUBSIDIARIES  Condensed Consolidated Statements of Financial Condition
(Unaudited)  (In millions)

|                                                                                                                  |                                                 | September 30,
2003 |        | December 31,
2002
|----------------------------------------------------------------------------------------------------------------- | ----------------------------------------------- | ------------------ | ------ | -----------------
|ASSETS                                                                                                            |                                                 |                    |        |                  
|Cash and cash equivalents                                                                                         |                                                 | $                  | 455    |                  
|Collateralized short-term financings:                                                                             |                                                 |                    |        |                  
|                                                                                                                  | Securities purchased under agreements to resell |                    |        | 52,663           
|                                                                                                                  | Securities borrowed                             |                    |        | 70,004           
|Receivables:                                                                                                      |                                                 |                    |        |                  
|                                                                                                                  | Customers                                       |                    |        | 1,509            
|                                                                                                                  | Brokers, dealers and other                      |                    |        | 11,920           
|Financial instruments owned (includes securities pledged as collateral of
    $55,247 and $49,695, respectively): |                                                 |                    |        |                  
|                                                                                                                  | U.S. government and agencies                    |                    |        | 32,803           
|                                                                                                                  | Corporate debt                                  |                    |        | 12,313           
|                                                                                                                  | Mortgage whole loans                            |                    |        | 10,046           
|                                                                                                                  | Equities                                        |                    |        | 13,623           
|                                                                                                                  | Commercial paper                                |                    |        | 830              
|                                                                                                                  | Private equity and other long-term investments  |                    |        | 1,043            
|                                                                                                                  | Derivatives contracts                           |                    |        | 7,578            
|                                                                                                                  | Other                                           |                    |        | 4,729            
|Net deferred tax asset                                                                                            |                                                 |                    | 1,472  |                  
|Office facilities at cost (net of accumulated depreciation and amortization of
    $866 and $749, respectively)   |                                                 |                    | 444    |                  
|Goodwill                                                                                                          |                                                 |                    | 320    |                  
|Loans receivable from parent and affiliates                                                                       |                                                 |                    | 17,676 |                  
|Other assets and deferred amounts                                                                                 |                                                 |                    | 1,561  |                  
|Assets held for sale                                                                                              |                                                 |                    |       |                  
|                                                                                                                  |                                                 |                    |        |                  
|                                                                                                                  | Total assets                                    |                    | $      | 240,989          
|                                                                                                                  |                                                 |                    |        |                  

See
accompanying notes to condensed consolidated financial statements (unaudited).

2

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CREDIT SUISSE FIRST BOSTON (USA), INC. AND SUBSIDIARIES  Condensed Consolidated Statements of Financial Condition (Continued)  (Unaudited)  (In millions, except share data)

|                                                                                                  |                                                                                                                                      | September 30,
2003 |        | December 31,
2002 |  
|------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------ | ------------------ | ------ | ----------------- | -
|LIABILITIES AND STOCKHOLDERS' EQUITY                                                              |                                                                                                                                      |                    |        |                   |  
|Commercial paper and short-term borrowings                                                        |                                                                                                                                      | $                  | 15,207 |                   | $
|Collateralized short-term financings:                                                             |                                                                                                                                      |                    |        |                   |  
|                                                                                                  | Securities sold under agreements to repurchase                                                                                       |                    |        | 101,769           |  
|                                                                                                  | Securities loaned                                                                                                                    |                    |        | 28,441            |  
|Payables:                                                                                         |                                                                                                                                      |                    |        |                   |  
|                                                                                                  | Customers                                                                                                                            |                    |        | 4,498             |  
|                                                                                                  | Brokers, dealers and other                                                                                                           |                    |        | 11,520            |  
|Financial instruments sold not yet purchased:                                                     |                                                                                                                                      |                    |        |                   |  
|                                                                                                  | U.S. government and agencies                                                                                                         |                    |        | 26,044            |  
|                                                                                                  | Corporate debt                                                                                                                       |                    |        | 2,330             |  
|                                                                                                  | Equities                                                                                                                             |                    |        | 4,357             |  
|                                                                                                  | Derivatives contracts                                                                                                                |                    |        | 6,311             |  
|                                                                                                  | Other                                                                                                                                |                    |        | 125               |  
|Obligation to return securities received as collateral                                            |                                                                                                                                      |                    | 1,340  |                   |  
|Accounts payable and accrued expenses                                                             |                                                                                                                                      |                    | 2,533  |                   |  
|Other liabilities                                                                                 |                                                                                                                                      |                    | 3,227  |                   |  
|Long-term borrowings                                                                              |                                                                                                                                      |                    | 24,016 |                   |  
|Liabilities held for sale                                                                         |                                                                                                                                      |                    |       |                   |  
|                                                                                                  |                                                                                                                                      |                    |        |                   |  
|                                                                                                  | Total liabilities                                                                                                                    |                    |        | 231,718           |  
|                                                                                                  |                                                                                                                                      |                    |        |                   |  
|Stockholders' Equity:                                                                             |                                                                                                                                      |                    |        |                   |  
|Preferred stock, 50,000,000 shares authorized:                                                    |                                                                                                                                      |                    |        |                   |  
|                                                                                                  | Series B preferred stock, at $50.00 per share liquidation preference (88,500
    shares issued and outstanding at December 31, 2002) |                    |        |                  |  
|Common stock ($0.10 par value; 50,000 shares authorized; 1,100 shares issued
    and outstanding) |                                                                                                                                      |                    |       |                   |  
|Paid-in capital                                                                                   |                                                                                                                                      |                    | 7,604  |                   |  
|Retained earnings                                                                                 |                                                                                                                                      |                    | 1,824  |                   |  
|Accumulated other comprehensive loss                                                              |                                                                                                                                      |                    | (157   | )                 |  
|                                                                                                  |                                                                                                                                      |                    |        |                   |  
|                                                                                                  | Total stockholders' equity                                                                                                           |                    |        | 9,271             |  
|                                                                                                  |                                                                                                                                      |                    |        |                   |  
|                                                                                                  | Total liabilities and stockholders' equity                                                                                           |                    | $      | 240,989           |  
|                                                                                                  |                                                                                                                                      |                    |        |                   |  

See
accompanying notes to condensed consolidated financial statements (unaudited).

3

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CREDIT SUISSE FIRST BOSTON (USA), INC. AND SUBSIDIARIES  Condensed Consolidated Statements of Income  (Unaudited)  (In millions)

|                                                                                                                     |                                                                                                        | Three Months Ended
September 30, |     | Nine Months Ended
September 30, |  
|-------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------ | -------------------------------- | --- | ------------------------------- | -
|
|Revenues:                                                                                                            |                                                                                                        |                                  |     |                                 |  
|                                                                                                                     | Principal transactions-net                                                                             |                                  | $   | (318                            | )
|                                                                                                                     | Investment banking and advisory                                                                        |                                  |     | 599                             |  
|                                                                                                                     | Commissions                                                                                            |                                  |     | 273                             |  
|                                                                                                                     | Interest and dividends, net of interest expense of $1,035,
    $1,421, $3,359 and $4,174, respectively |                                  |     | 529                             |  
|                                                                                                                     | Other                                                                                                  |                                  |     | 16                              |  
|                                                                                                                     |                                                                                                        |                                  |     |                                 |  
|                                                                                                                     | Total net revenues                                                                                     |                                  |     | 1,099                           |  
|                                                                                                                     |                                                                                                        |                                  |     |                                 |  
|Expenses:                                                                                                            |                                                                                                        |                                  |     |                                 |  
|                                                                                                                     | Employee compensation and benefits                                                                     |                                  |     | 513                             |  
|                                                                                                                     | Occupancy and equipment rental                                                                         |                                  |     | 111                             |  
|                                                                                                                     | Brokerage, clearing and exchange fees                                                                  |                                  |     | 76                              |  
|                                                                                                                     | Communications                                                                                         |                                  |     | 31                              |  
|                                                                                                                     | Professional fees                                                                                      |                                  |     | 65                              |  
|                                                                                                                     | Merger-related costs                                                                                   |                                  |     | 4                               |  
|                                                                                                                     | Other operating expenses                                                                               |                                  |     | 75                              |  
|                                                                                                                     |                                                                                                        |                                  |     |                                 |  
|                                                                                                                     | Total expenses                                                                                         |                                  |     | 875                             |  
|                                                                                                                     |                                                                                                        |                                  |     |                                 |  
|Income (loss) from continuing operations before provision
    (benefit) for income taxes and discontinued operations |                                                                                                        |                                  | 224 |                                 |  
|Provision (benefit) for income taxes                                                                                 |                                                                                                        |                                  | 68  |                                 |  
|                                                                                                                     |                                                                                                        |                                  |     |                                 |  
|Income (loss) from continuing operations before discontinued
    operations                                          |                                                                                                        |                                  | 156 |                                 |  
|Discontinued operations:                                                                                             |                                                                                                        |                                  |     |                                 |  
|                                                                                                                     | Income from discontinued operations                                                                    |                                  |     |                                |  
|                                                                                                                     | Provision for income taxes                                                                             |                                  |     |                                |  
|                                                                                                                     |                                                                                                        |                                  |     |                                 |  
|                                                                                                                     | Income from discontinued operations, net of income taxes                                               |                                  |     |                                |  
|                                                                                                                     |                                                                                                        |                                  |     |                                 |  
|Net income (loss)                                                                                                    |                                                                                                        | $                                | 156 |                                 | $
|                                                                                                                     |                                                                                                        |                                  |     |                                 |  

See
accompanying notes to condensed consolidated financial statements (unaudited).

4

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CREDIT SUISSE FIRST BOSTON (USA), INC. AND SUBSIDIARIES  Condensed Consolidated Statements of Changes in Stockholders' Equity  (Unaudited)  For the Nine Months Ended September 30, 2003 and
September 30, 2002  (In millions)

|                                                                   |                            | Preferred Stock |    | Common Stock |   | Paid-in Capital |  | Retained Earnings |       | Accumulated Other Comprehensive Income (Loss) |   | Total | 
|------------------------------------------------------------------ | -------------------------- | --------------- | -- | ------------ | - | --------------- |  | ----------------- | ----- | --------------------------------------------- | - | ----- | 
|Balances at December 31, 2001                                      |                            | $               | 5  |              | $ |                |  | $                 | 6,326 |                                               | $ | 859   | 
|Net income                                                         |                            |                 |   |              |   |                |  |                   |      |                                               |   | 329   | 
|Foreign currency translation adjustment                            |                            |                 |   |              |   |                |  |                   |      |                                               |   |      | 
|Decrease in pension liability, net of income
    tax expense of $3 |                            |                 |   |              |   |                |  |                   |      |                                               |   |      | 
|                                                                   |                            |                 |    |              |   |                 |  |                   |       |                                               |   |       | 
|                                                                   | Total comprehensive income |                 |    |              |   |                 |  |                   |       |                                               |   |       | 
|                                                                   |                            |                 |    |              |   |                 |  |                   |       |                                               |   |       | 
|CSG share plan activity, net of tax effect of
    $4               |                            |                 |   |              |   |                |  |                   | 461   |                                               |   |      | 
|Redemption of Series B preferred stock                             |                            |                 | (1 | )            |   |                |  |                   |      |                                               |   |      | 
|                                                                   |                            |                 |    |              |   |                 |  |                   |       |                                               |   |       | 
|Balances at September 30, 2002                                     |                            | $               | 4  |              | $ |                |  | $                 | 6,787 |                                               | $ | 1,188 | 
|                                                                   |                            |                 |    |              |   |                 |  |                   |       |                                               |   |       | 
|Balances at December 31, 2002                                      |                            | $               | 4  |              | $ |                |  | $                 | 7,279 |                                               | $ | 604   | 
|Net income                                                         |                            |                 |   |              |   |                |  |                   |      |                                               |   | 1,220 | 
|Foreign currency translation adjustment                            |                            |                 |   |              |   |                |  |                   |      |                                               |   |      | 
|                                                                   |                            |                 |    |              |   |                 |  |                   |       |                                               |   |       | 
|                                                                   | Total comprehensive income |                 |    |              |   |                 |  |                   |       |                                               |   |       | 
|                                                                   |                            |                 |    |              |   |                 |  |                   |       |                                               |   |       | 
|CSG share plan activity, net of tax effect of
    $28              |                            |                 |   |              |   |                |  |                   | 250   |                                               |   |      | 
|Redemption of Series B preferred stock                             |                            |                 | (4 | )            |   |                |  |                   |      |                                               |   |      | 
|Capital contribution by CSFBI                                      |                            |                 |   |              |   |                |  |                   | 75    |                                               |   |      | 
|                                                                   |                            |                 |    |              |   |                 |  |                   |       |                                               |   |       | 
|Balances at September 30, 2003                                     |                            | $               |   |              | $ |                |  | $                 | 7,604 |                                               | $ | 1,824 | 
|                                                                   |                            |                 |    |              |   |                 |  |                   |       |                                               |   |       | 

See
accompanying notes to condensed consolidated financial statements (unaudited).

5

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CREDIT SUISSE FIRST BOSTON (USA), INC. AND SUBSIDIARIES  Condensed Consolidated Statements of Cash Flows  (Unaudited)  (In millions)

|                                                    |                                                                                                 | Nine Months Ended
September 30,                                                                            |       
|--------------------------------------------------- | ----------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------- | ------
|
|Cash flows from operating activities:               |                                                                                                 |                                                                                                            |       
|                                                    | Net income                                                                                      |                                                                                                            | $     
|                                                    | Adjustments to reconcile net income to net cash (used in) provided by
    operating activities: |                                                                                                            |       
|                                                    |                                                                                                 | Net pre-tax gain on sale of certain broker-dealer subsidiaries                                             |       
|                                                    |                                                                                                 | Pre-tax gain on sale of Pershing                                                                           |       
|                                                    |                                                                                                 | Depreciation and amortization                                                                              |       
|                                                    |                                                                                                 | CSG share plan activity                                                                                    |       
|                                                    |                                                                                                 | Deferred taxes                                                                                             |       
|                                                    |                                                                                                 | Other, net                                                                                                 |       
|                                                    | Change in operating assets and operating liabilities:                                           |                                                                                                            |       
|                                                    |                                                                                                 | Securities borrowed                                                                                        |       
|                                                    |                                                                                                 | Receivables from customers                                                                                 |       
|                                                    |                                                                                                 | Receivables from brokers, dealers and other                                                                |       
|                                                    |                                                                                                 | Financial instruments owned                                                                                |       
|                                                    |                                                                                                 | Other assets and Other liabilities, net                                                                    |       
|                                                    |                                                                                                 | Securities loaned                                                                                          |       
|                                                    |                                                                                                 | Payables to customers                                                                                      |       
|                                                    |                                                                                                 | Payables to brokers, dealers and other                                                                     |       
|                                                    |                                                                                                 | Financial instruments sold not yet purchased                                                               |       
|                                                    |                                                                                                 | Obligation to return securities received as collateral                                                     |       
|                                                    |                                                                                                 | Accounts payable and accrued expenses                                                                      |       
|                                                    |                                                                                                 |                                                                                                            |       
|Net cash provided by (used in) operating activities |                                                                                                 |                                                                                                            | 2,050 
|                                                    |                                                                                                 |                                                                                                            |       
|Cash flows from investing activities:               |                                                                                                 |                                                                                                            |       
|                                                    | Net (payments for) proceeds from:                                                               |                                                                                                            |       
|                                                    |                                                                                                 | Loans receivable from parent and affiliates                                                                |       
|                                                    |                                                                                                 | Sale of broker-dealer subsidiaries                                                                         |       
|                                                    |                                                                                                 | Sale of Pershing                                                                                           |       
|                                                    |                                                                                                 | Office facilities                                                                                          |       
|                                                    |                                                                                                 | Purchase of subsidiary                                                                                     |       
|                                                    |                                                                                                 |                                                                                                            |       
|Net cash provided by (used in) investing activities |                                                                                                 |                                                                                                            | 656   
|                                                    |                                                                                                 |                                                                                                            |       
|Cash flows from financing activities:               |                                                                                                 |                                                                                                            |       
|                                                    | Net proceeds from (payments for):                                                               |                                                                                                            |       
|                                                    |                                                                                                 | Commercial paper and short-term borrowings                                                                 |       
|                                                    |                                                                                                 | Securities purchased under agreements to resell, net of securities sold
    under agreements to repurchase |       
|                                                    |                                                                                                 | Capital contribution from CSFBI                                                                            |       
|                                                    |                                                                                                 | Redemption of Series B preferred stock                                                                     |       
|                                                    |                                                                                                 | Issuances of long-term borrowings                                                                          |       
|                                                    |                                                                                                 | Redemptions and maturities of long-term borrowings                                                         |       
|                                                    |                                                                                                 |                                                                                                            |       
|Net cash (used in) provided by financing activities |                                                                                                 |                                                                                                            | (2,731
|                                                    |                                                                                                 |                                                                                                            |       
|Decrease in cash and cash equivalents               |                                                                                                 |                                                                                                            | (25   
|                                                    |                                                                                                 |                                                                                                            |       
|Cash and cash equivalents at beginning of period    |                                                                                                 |                                                                                                            | 480   
|                                                    |                                                                                                 |                                                                                                            |       
|Cash and cash equivalents at end of period          |                                                                                                 | $                                                                                                          | 455   
|                                                    |                                                                                                 |                                                                                                            |       

See accompanying notes to condensed consolidated financial statements (unaudited).

6

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CREDIT SUISSE FIRST BOSTON (USA), INC. AND SUBSIDIARIES        Notes to Condensed Consolidated Financial Statements (Unaudited)        September 30, 2003

1.    Summary of Significant Accounting Policies

The Company

Credit Suisse First Boston (USA), Inc., formerly known as Donaldson, Lufkin & Jenrette, Inc., and its subsidiaries (the "Company"), is a
leading integrated investment bank serving institutional, corporate, government and high-net worth individual clients. The Company provides clients with a broad range of products and
services that includes securities underwriting, sales and trading, investment banking, financial advisory services, private equity investments, full-service brokerage services, derivatives
and risk management products and research.

Basis of Presentation

The condensed consolidated financial statements include Credit Suisse First Boston (USA), Inc. and its subsidiaries. All significant intercompany balances
and transactions have been eliminated. The Company is a wholly owned subsidiary of Credit Suisse First Boston, Inc. ("CSFBI") and was acquired on November 3, 2000 (the "Acquisition"). No
adjustments of the historical carrying values of the Company's assets and liabilities to reflect the Acquisition were recorded in the Company's historical consolidated financial statements.
Accordingly, although the Acquisition gave rise to goodwill, none of
this goodwill was "pushed down" to the Company. For further discussion of the Acquisition, see the Company's Annual Report on Form 10-K for the year ended December 31, 2002.

Certain
financial information that is normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States but not
required for interim reporting purposes has been condensed or omitted. These condensed consolidated financial statements reflect, in the opinion of management, all adjustments (consisting of normal,
recurring accruals) that are necessary for a fair presentation of the condensed consolidated statements of financial condition and income for the interim periods presented.

The
results of operations for interim periods are not necessarily indicative of results for the entire year. These condensed consolidated financial statements should be read in
conjunction with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2002.

To
prepare condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States, management must estimate certain amounts that
affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities and reported amounts of revenues and expenses. Actual results could differ materially from those
estimates. For a description of the Company's significant accounting policies, see Note 1 of the consolidated financial statements in Part II, Item 8 in the Company's Annual Report on
Form 10-K for the year ended December 31, 2002.

Certain
reclassifications have been made to prior year condensed consolidated financial statements to conform to the 2003 presentation.

New Accounting Pronouncements

The Financial Accounting Standards Board ("FASB") issued FASB Interpretation ("FIN") No. 46, "Consolidation of Variable Interest Entities," an
Interpretation of Accounting Research Bulletin

7

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No. 51,
"Consolidated Financial Statements" ("FIN 46"), in January 2003. FIN 46 requires a company to consolidate a variable interest entity ("VIE") if the company is the
primary beneficiary, defined as the entity with the majority of the expected losses or expected residual returns, or both. The guidance in FIN 46 is applicable for many special purpose entities
and any other entity not explicitly excluded from the scope that does not meet the criteria set out in FIN 46 for determining whether analysis based on a majority of voting equity is
appropriate. Generally, FIN 46 does not require consolidation of qualifying special purpose entities ("QSPEs") that meet the requirements of Statement of Financial Accounting Standards ("SFAS")
No. 140, "Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities" ("SFAS 140"). In October 2003, the FASB deferred the effective date for
applying FIN 46 to VIEs created before February 1, 2003 to fiscal periods ending after December 15, 2003. See Note 6 for more information.

In
April 2003, the FASB issued SFAS No. 149, "Amendment of Statement 133 on Derivative Instruments and Hedging Activities" ("SFAS 149"), which amends and
clarifies accounting and reporting for derivative instruments and hedging activities under SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities" ("SFAS 133") and
requires derivatives that contain a financing component to be disclosed in the statement of cash flows. The statement is effective for contracts entered into or modified after June 30, 2003.
The adoption of SFAS 149 did not have a material impact on the Company's financial position, results of operations or cash flows.

In
May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity" ("SFAS 150").
SFAS 150 establishes standards for an issuer's classification of certain financial instruments that have both liability and equity characteristics and imposes additional disclosure
requirements. SFAS 150 applies to financial instruments entered into or modified after May 31, 2003 and is effective for fiscal periods beginning after June 15, 2003. The adoption
of SFAS 150 did not have a material impact on the Company's financial position, results of operations or cash flows.

Recent Developments

On May 1, 2003, the Company sold its Pershing unit, which was part of the Financial Services segment, to The Bank of New York Company, Inc., and
reported a pre-tax gain of approximately $1.3 billion and an after-tax gain of $852 million in the second quarter of 2003. The Company presented the assets and
liabilities of its Pershing unit as "Assets held for sale" and "Liabilities held for sale" as of December 31, 2002 in the condensed consolidated statements of
financial condition. The operating results of the Pershing unit, including the gain on the sale, have been presented as "Discontinued Operations" for all periods presented in the condensed
consolidated statements of income. See Note 3 for more information.

On
March 20, 2003, the Company's immediate parent company, CSFBI, transferred Credit Suisse First Boston Management Corporation to the Company as a capital contribution, and the
company was subsequently converted to the Delaware limited liability company Credit Suisse First Boston Management LLC ("Management LLC"). Management LLC engages in derivatives transactions and holds
a portfolio of private equity, distressed assets and real estate investments. The derivatives transactions entered into by Management LLC have historically been designed to hedge certain trading and
other positions held by Credit Suisse First Boston LLC ("CSFB LLC"), the Company's principal

8

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wholly
owned subsidiary. The transfer of Management LLC has been accounted for at historical cost in a manner similar to pooling-of-interest accounting because Management LLC
and the Company were under the common control of CSFBI at the time of the transfer. The Company has restated financial information for all periods presented to reflect the results of operations and
financial position of Management LLC as if the Company had acquired it on November 3, 2000, the date that the Company was acquired by CSFBI.

2.    Stock-Based Compensation

The stock plan (the "Plan") of Credit Suisse Group ("CSG"), the Company's ultimate parent, provide for stock options or other equity-based awards, including CSG
shares, to the Company's employees as compensation for services performed. CSFBI purchases the shares on behalf of the Company but does not require reimbursement. Amounts contributed by CSFBI relating
to compensation were $250 million and $461 million, net of taxes, for the nine months ended September 30, 2003 and 2002, respectively, and are considered a capital contribution to
the Company and credited to paid-in-capital.

During
August 2003, the Company adopted the fair value recognition provisions of SFAS No. 123, "Accounting for Stock-Based Compensation" ("SFAS 123"), as amended by
SFAS No. 148, "Accounting for Stock-Based CompensationTransition and Disclosure," using the prospective method. Under the prospective method, compensation expense is recognized for
all stock options and restricted stock granted for services provided after January 1, 2003 as the options and stock vest. Option awards granted for services provided before January 1,
2003, if not subsequently modified, will continue to be accounted for under the recognition and measurement provisions of Accounting Principles Board Opinion No. 25, "Accounting for Stock
Issued to Employees," and no compensation expense has been or will be recognized for those option awards, which had no intrinsic value on the date of grant. Restricted stock awards granted in or
before January 2003 for services provided in prior years (including those granted in January 2003 for services provided in 2002) were expensed in full during the year the
services were provided because the restricted stock awards were fully vested at the time they were granted.

In
the third quarter of 2003, the Company introduced three-year vesting for all stock option and restricted stock awards, in line with investment banking industry practice.
The imposition of three-year vesting is intended to improve employee retention and long-term performance.

With
the adoption of SFAS 123 and the change in vesting of stock option and restricted stock awards, the Company will expense stock option and restricted stock awards as they vest
over the three-year service period, beginning with the grants expected in January 2004. Accordingly, compensation expense will be recognized over the service period based on the
fair value of the stock option or restricted stock awards at the grant date. As a result of the change in vesting, the Company's accrued compensation expense of $85 million recorded in the
first half of 2003 related to restricted stock awards expected to be granted in January 2004 was reversed, and compensation expense during the third quarter was significantly reduced compared
to prior periods. The reversal of the first half accrual was more than offset by an incentive compensation accrual.

9

---

On
September 9, 2003, CSG completed its option reduction program, which entitled employees to exchange on a value-for-value basis certain existing options
for new options or restricted stock. In accordance with SFAS 123, the Company did not recognize any compensation expense as a result of that exchange.

If
the Company had applied the fair-value based method under SFAS 123 to all equity-based awards in each period, net income would have decreased for the three and nine
months ended September 30, 2003 and 2002 due to the fair valuation of stock options granted. The following table reflects this pro forma effect:

|                               |                                                                                                                                            | Three Months Ended
September 30, |     | Nine Months Ended
September 30, |  
|------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------------ | -------------------------------- | --- | ------------------------------- | -
|
|
|Net income (loss), as reported |                                                                                                                                            | $                                | 156 |                                 | $
|                               | Add: Stock-based employee compensation expense, net of related tax effects, included in reported net income                                |                                  |     | 29                              |  
|                               | Deduct: Stock-based employee compensation expense, net of related tax effects, determined under the fair-value based method for all awards |                                  |     | (34                             | )
|                               |                                                                                                                                            |                                  |     |                                 |  
|Pro forma net income (loss)    |                                                                                                                                            | $                                | 151 |                                 | $
|                               |                                                                                                                                            |                                  |     |                                 |  

---

3.    Discontinued Operations

In accordance with SFAS No. 144, "Accounting for Impairment or Disposal of Long-Lived Assets," the Company presented the assets and liabilities
of its Pershing unit as of December 31, 2002 as "Assets held for sale" and "Liabilities held for sale" in the condensed consolidated statements of financial condition. At December 31,
2002, "Assets held for sale" were $11.5 billion and "Liabilities held for sale" were $10.9 billion. The operating results of the Pershing unit, including the gain on the sale, for all
periods presented are presented as "Discontinued operations" in the condensed consolidated statements of income.

The
following table summarizes the results of operations of Pershing, excluding the gain on the sale, for the three and nine months ended September 30, 2003 and 2002:

|                   |                                                         | Three Months Ended
September 30, |   | Nine Months Ended
September 30,
|------------------ | ------------------------------------------------------- | -------------------------------- | - | -------------------------------
|
|
|Total net revenues |                                                         | $                                |  |                                
|Total expenses     |                                                         |                                  |  |                                
|                   |                                                         |                                  |   |                                
|                   | Income from discontinued operations before income taxes |                                  | $ |                               
|                   |                                                         |                                  |   |                                

10

---

4.    Merger-Related Costs

Merger-related costs represent retention awards related to the Acquisition, which are being expensed over a vesting period of generally three years. The Company
expects to charge $5 million against earnings in the remaining three months of 2003 and $11 million against earnings in 2004 related to the remaining retention awards.

5.    Related Party Transactions

CSG, through CSFBI, owns all of the Company's outstanding voting common stock. The Company is involved in significant financing and other transactions, and has
significant related party balances, with Credit Suisse First Boston, a Swiss bank subsidiary of CSG and an indirect parent of the Company, and certain of its subsidiaries and affiliates. The Company
generally enters into these transactions in the ordinary course of business and believes that these transactions are generally on market terms that could be obtained from unrelated third parties.

The
following table sets forth related party assets and liabilities as of September 30, 2003 and December 31, 2002. The Company has presented the assets and liabilities of
Pershing as of December 31, 2002 as "Assets held for sale" and "Liabilities held for sale" in the condensed consolidated statements of financial condition and has excluded from the table below
transactions between Pershing, which was sold in the second quarter of 2003, and any CSG affiliate, including the Company.

|                                                                 |                   | September 30,
2003 |        | December 31,
2002
|---------------------------------------------------------------- | ----------------- | ------------------ | ------ | -----------------
|
|ASSETS                                                           |                   |                    |        |                  
|Securities purchased under agreements to resell                  |                   | $                  | 9,722  |                  
|Securities borrowed                                              |                   |                    | 1,356  |                  
|Receivables from customers                                       |                   |                    | 244    |                  
|Receivables from brokers, dealers and other                      |                   |                    | 2,948  |                  
|Derivatives contracts                                            |                   |                    | 2,295  |                  
|Taxes receivable (included in Other assets and deferred amounts) |                   |                    |       |                  
|Loans receivable from parent and affiliates                      |                   |                    | 17,676 |                  
|                                                                 |                   |                    |        |                  
|                                                                 | Total assets      |                    | $      | 34,241           
|                                                                 |                   |                    |        |                  
|LIABILITIES                                                      |                   |                    |        |                  
|Short-term borrowings                                            |                   | $                  | 13,867 |                  
|Securities sold under agreements to repurchase                   |                   |                    | 20,833 |                  
|Securities loaned                                                |                   |                    | 15,740 |                  
|Payables to brokers, dealers and other                           |                   |                    | 2,044  |                  
|Derivatives contracts                                            |                   |                    | 1,015  |                  
|Taxes payable (included in Other liabilities)                    |                   |                    | 307    |                  
|Intercompany payables (included in Other liabilities)            |                   |                    | 206    |                  
|                                                                 |                   |                    |        |                  
|                                                                 | Total liabilities |                    | $      | 54,012           
|                                                                 |                   |                    |        |                  

11

---

Included
in the condensed consolidated statements of income are revenues and expenses resulting from various securities trading, investment banking and financing activities with certain
affiliates, as well as fees for administrative services performed by the Company under the terms of various service agreements. Service fees earned are treated as a reduction of other operating
expenses in the condensed consolidated statements of income.

The
following table sets forth the Company's related party revenues and expenses, excluding transactions with Pershing, for the three and nine months ended September 30, 2003 and
2002:

|                                                   |                    | Three Months Ended
September 30, |     | Nine Months Ended
September 30, |  
|-------------------------------------------------- | ------------------ | -------------------------------- | --- | ------------------------------- | -
|
|
|Principal transactions-net (derivatives contracts) |                    | $                                | 216 |                                 | $
|Commissions                                        |                    |                                  | (10 | )                               |  
|Net interest expense                               |                    |                                  | (36 | )                               |  
|                                                   |                    |                                  |     |                                 |  
|                                                   | Total net revenues |                                  | $   | 170                             |  
|                                                   |                    |                                  |     |                                 |  
|Other operating expenses                           |                    | $                                | (44 | )                               | $
|                                                   |                    |                                  |     |                                 |  
|                                                   | Total expenses     |                                  | $   | (44                             | )
|                                                   |                    |                                  |     |                                 |  

The
following table sets forth revenues and expenses of Pershing with respect to related party transactions with the Company for the three and nine months ended September 30, 2003
and 2002. The operating results of Pershing for these periods are presented as "Discontinued operations" in the condensed consolidated statements of income.

|                                |                              | Three Months Ended
September 30, |   | Nine Months Ended
September 30,
|------------------------------- | ---------------------------- | -------------------------------- | - | -------------------------------
|
|
|Commissions                     |                              | $                                |  |                                
|Net interest revenues (expense) |                              |                                  |  |                                
|                                |                              |                                  |   |                                
|                                | Total net revenues (expense) |                                  | $ |                               
|                                |                              |                                  |   |                                

For
the three and nine months ended September 30, 2003, Pershing had no revenues from CSG, its subsidiaries and affiliates outside the Company. For the three and nine months ended
September 30, 2002, Pershing had revenues of $8 million and $18 million, respectively, from CSG, its subsidiaries and affiliates outside the Company. For the three and nine months
ended September 30, 2003 and 2002, Pershing had no expenses with respect to related party transactions with CSG, its subsidiaries and affiliates outside the Company.

The
Company sold at cost, without recourse, to CSFBI, the right, title and interest in certain assets with an aggregate value of $306 million and $342 million as of
September 30, 2003 and December 31, 2002, respectively.

As
of June 30, 2003, the management of certain private equity funds with approximately $4.1 billion of committed capital was transferred to the Company's private equity
business from the

12

---

Company's
affiliate, Credit Suisse Asset Management. During the three months ended September 30, 2003, Credit Suisse Asset Management reimbursed the private equity business for all costs and
expenses incurred by the Company in connection with managing the funds.

Certain
of the Company's directors, officers and employees and those of the Company's affiliates and their subsidiaries maintain margin accounts with CSFB LLC and other affiliated
broker-dealers in the ordinary course of business. In addition, certain of such directors, officers and employees had
investments or commitments to invest in various private equity funds sponsored by the Company, pursuant to which the Company has made loans to such directors, officers and employees, to the extent
permitted by law. CSFB LLC and other affiliated broker-dealers, from time to time and in the ordinary course of business, enter into, as principal, transactions involving the purchase or sale of
securities from or to such directors, officers and employees and members of their immediate families.

The
Company is included in a consolidated federal income tax return and combined New York State and New York City income tax returns filed by CSFBI. CSFBI allocates federal, state and
local income taxes to its subsidiaries on a separate return basis. Any resulting liability is paid currently to CSFBI. Any credits for losses are paid by CSFBI to the Company to the extent that such
credits are for tax benefits that have been used in the consolidated federal or combined state and local income tax return. CSFBI allocated to the Company a current income tax provision of
$12 million and $1 million and a deferred income tax provision of $56 million and a deferred income tax benefit of $130 million for the three months ended
September 30, 2003 and 2002, respectively, related to continuing operations. CSFBI allocated to the Company a current income tax benefit of $1 million and $15 million and a
deferred income tax provision of $130 million and $157 million for the nine months ended September 30, 2003 and 2002, respectively, related to continuing operations.

6. Transfers and Servicing of Financial Assets

As of September 30, 2003 and December 31, 2002, the fair market value of assets that the Company pledged to counterparties was $160.8 billion
and $147.0 billion, respectively, of which $55.2 billion and $49.7 billion, respectively, are included in financial instruments owned in the condensed consolidated statements of
financial condition.

The
Company has also received similar assets as collateral which the Company has the right to re-pledge or sell. The Company routinely re-pledges or lends these
assets to third parties. As of September 30, 2003 and December 31, 2002, the fair market value of the assets pledged to the Company was $151.0 billion and $140.3 billion,
respectively.

Securitization Activities

The Company originates and purchases commercial mortgages and purchases residential mortgages for the purpose of securitization. The Company transfers these
mortgage loans to QSPEs. These QSPEs issue securities that are backed by the assets transferred to the QSPEs and pay a return based on the returns on those assets. Investors in these mortgage-backed
securities typically have recourse to the assets in the QSPE. The investors and the QSPEs have no recourse to the Company's assets. CSFB LLC is an underwriter of, and makes a market in, these
securities.

13

---



The
Company purchases loans and other debt obligations from clients for the purpose of securitization. The loans and other debt obligations are transferred by the Company directly, or
indirectly through affiliates, to QSPEs or other VIEs that issue collateralized debt obligations ("CDOs"). CSFB LLC structures, underwrites and makes a market in these CDOs.

The
Company may retain interests in these securitized assets in connection with its underwriting and market-making activities. The Company's exposure in its securitization activities is
limited to its retained interests. Retained interests in securitized financial assets are included at fair value in financial instruments owned in the condensed consolidated statements of financial
condition. Any changes in the fair value of these retained interests are recognized in the condensed consolidated statements of income. The fair values of retained interests are determined using
present value of estimated future cash flows valuation techniques that incorporate assumptions that market participants customarily use in their estimates of values.

The
following table presents the proceeds and gain or loss related to the securitization of commercial mortgage loans, residential mortgage loans and CDOs for the nine months ended
September 30, 2003 and 2002:

Nine Months Ended September 30, 2003

Nine Months Ended September 30, 2002Commercial
mortgage
loans

Residential
mortgage
loans

Collateralized
debt
obligations

Commercial
mortgage
loans

Residential
mortgage
loans

Collateralized
debt
obligations(In millions)Proceeds from
    new securitizations

$
4,756

$
22,747

$
4,044

$
2,331

$
17,776

$
4,375Gain (loss) on securitizations(1)

$
203

$
(51
)
$
36

$
57

$
(56
)
$
60


---

Key economic assumptions used in measuring the fair value of the retained interests at the date of securitization resulting from securitizations completed
during the nine months ended September 30, 2003 were as follows:

Nine Months Ended September 30, 2003Commercial
mortgage
loans(1)



Residential
mortgage
loans



Collateralized
debt
obligations(2)Weighted-average life (in years)

2.8



4.4



7.9Prepayment speed assumption ("PSA") (in
    rate per annum)(3)

N/A



200 PSA to 325 PSA



N/ACash flow discount rate (in rate per annum)(4)

7.8%12.8%



4.3%37.5%



2.9%6.9%Expected credit losses (in rate per annum)(5)












14

---

The
following table sets forth the fair value of retained interests from securitizations not consolidated as of September 30, 2003, key economic assumptions used to determine the
fair value and the sensitivity of the fair value to immediate adverse changes in those assumptions:

September 30, 2003Commercial
mortgage
loans(1)

Residential
mortgage
loans

Collateralized
debt
obligations(2)(Dollars in millions)Carrying amount/fair value of retained interests

$
95

$
834

$
235Weighted-average life (in years)


1.6


3.8


11.5PSA (in rate per annum)(3)


N/A


250 PSA


N/AImpact on fair value of 10% adverse change




$
18


Impact on fair value of 20% adverse change




$
29


Cash flow discount rate (in rate per annum)(4)


10.3
%

16.8
%

5.9
%Impact on fair value of 10% adverse change

$
1

$
2

$
8Impact on fair value of 20% adverse change

$
3

$
4

$
17Expected credit losses (in rate per annum)(5)








Impact on fair value of 10% adverse change(6)

$


$


$
1Impact on fair value of 20% adverse change(6)

$


$
1

$
3


---

These
sensitivities are hypothetical and do not reflect the benefits of hedging activities and therefore should be used with caution. Changes in fair value based on a 10% or 20%
variation in assumptions generally cannot be extrapolated because the relationship of the change in assumption to the change in fair value may not be linear. Also, the effect of a variation in a
particular assumption on the fair value of the retained interests is calculated without changing any other assumption. In practice,

15

---

changes
in one assumption may result in changes in other assumptions (for example, increases in market interest rates may result in lower prepayments and increased credit losses), which may magnify or
counteract the sensitivities.

Variable Interest Entities

Pursuant to FIN 46, the Company is consolidating VIEs created after January 31, 2003 for which it is the primary beneficiary, defined as the entity that
will absorb a majority of expected losses, receive a majority of the expected residual returns, or both. In October 2003, the FASB deferred the effective date for applying FIN 46 to VIEs
created before February 1, 2003 to fiscal periods ending after December 15, 2003. Accordingly, the Company expects to consolidate VIEs created before February 1, 2003 for which it
is the primary beneficiary in the fourth quarter of 2003.

The
Company has variable interests in several CDO VIEs. As described under "Securitization Activities," in the normal course of its business, the Company purchases loans and
other debt obligations from and on behalf of clients for the purpose of securitization. These assets are sold to and warehoused by affiliates and, at the end of a warehousing period, the assets are
sold to QSPEs or VIEs for securitization. In connection with its underwriting and market-making activities, the Company may retain interests in the CDO VIEs. The CDO entities may have actively managed
("open") portfolios or static or unmanaged ("closed") portfolios.

The
open CDO entities are managed by collateral managers and do not qualify for QSPE status. The Company has consolidated open CDO VIEs created after January 31, 2003 for which it
is the primary beneficiary. As of September 30, 2003, the Company recorded $1.2 billion, the carrying amount of the assets of these CDO VIEs, in financial instruments owned and
$1.0 billion, the carrying amount of the liabilities of these CDO VIEs, in other liabilities. The Company's maximum exposure to loss was $236 million, which was the amount of its
retained interests as of September 30, 2003. This amount was eliminated in consolidation. The Company expects to consolidate, in the fourth quarter of 2003, those open CDO VIEs created prior to
February 1, 2003 for which it is the primary beneficiary. The carrying amount of the assets of these CDO VIEs that would be included in financial instruments owned was $753 million as of
September 30, 2003. The Company's maximum exposure to loss was $8 million, which was the amount of its retained interests as of September 30, 2003, carried at fair value in
financial instruments owned. This amount would be eliminated in consolidation. The beneficial interests of these consolidated CDO VIEs are payable solely from the cash flows of the related collateral,
and the creditors of these VIEs do not have recourse to the Company in the event of default.

The
Company also retains significant debt and equity interests in open CDO VIEs that are not consolidated because the Company is not the primary beneficiary. The total assets in these
CDO VIEs as of September 30, 2003 were $2.0 billion. The Company's maximum exposure to loss as of September 30, 2003 was $36 million, which was the amount of its retained
interests, carried at fair value in financial instruments owned.

In
addition, the Company retains small, minority debt and equity interests in open CDO VIEs. These CDO VIEs are also not consolidated because the Company is not the primary beneficiary.
The Company's maximum exposure to loss in those VIEs as of September 30, 2003 was $134 million, which was the amount of its retained interests, carried at fair value in financial
instruments owned.

16

---

The
closed CDO transactions are structured to use QSPEs, which are not consolidated in the Company's financial statements. The Company's maximum exposure to loss as of
September 30, 2003 was $57 million, which was the amount of its retained interests, carried at fair value in financial instruments owned.

The
Company is still evaluating the impact of FIN 46, and it may be required to consolidate other entities with which it is involved in the normal course of business that may be deemed
to be VIEs for which the Company is the primary beneficiary.

7. Borrowings

Short-term borrowings are generally demand obligations with interest approximating the federal funds rate, LIBOR or other money market indices. Such
borrowings are generally used to facilitate the securities settlement process, to finance securities inventories and to finance securities purchased by customers on margin. As of September 30,
2003 and December 31, 2002, there were no short-term borrowings secured by Company-owned securities.

The
Company has two commercial paper programs exempt from registration under the Securities Act of 1933 that allow the Company to issue up to $7.0 billion in commercial paper. As
of September 30, 2003 and December 31, 2002, $873 million and $2.1 billion, respectively, of commercial paper was outstanding under these programs.

In
April 2002, the Company filed with the SEC a shelf registration statement that allows the Company to issue from time to time up to $10.0 billion of senior and
subordinated debt securities, and warrants to purchase such securities. Under that shelf registration statement, the Company had, at November 7, 2003, approximately $4.5 billion
available for issuance.

The
following table sets forth the Company's long-term borrowings as of September 30, 2003 and December 31, 2002:

September 30, 2003

December 31, 2002(In millions)Senior notes 4.63%-8.00%, due various dates through 2032

$
16,087

$
14,735Medium-term notes 1.04%-7.53%, due various dates through 2032


7,795


8,185Structured borrowings 7.06%-7.34%, due various dates through 2014


134


174Total long-term borrowings

$
24,016

$
23,094Current maturities of long-term borrowings

$
2,065

$
3,589


For
the nine months ended September 30, 2003 and 2002, interest paid on all borrowings and financing arrangements was $3.6 billion and $3.4 billion, respectively. As
of September 30, 2003 and December 31, 2002, long-term borrowings included unrealized appreciation of approximately $1.1 billion and $1.2 billion, respectively,
associated with fair value hedges under SFAS 133. As of September 30, 2003 and December 31, 2002, the Company had entered into interest rate and currency swaps on
$15.6 billion and $15.0 billion, respectively, of the Company's long-term borrowings for

17

---

hedging
purposes. Substantially all of these swaps qualified as fair value hedges under SFAS 133. See Note 11 for more information.

The
Company maintains a 364-day $1.0 billion committed revolving credit facility with a syndicate of banks available to the Company as borrower. This facility, which
is guaranteed by CSG, extends through May 2004. The Company's principal wholly owned broker-dealer subsidiary, CSFB LLC, maintains a 364-day $200 million committed secured
revolving credit facility, extending through August 2004, with an unaffiliated bank. The secured facility requires CSFB LLC to pledge unencumbered marketable securities if the facility is drawn
upon. Borrowings under each facility would bear interest at short-term rates related to either the federal funds rate or LIBOR and can be used for general corporate purposes. Both
facilities contain customary covenants that the Company believes will not impair its ability to obtain funding. As of September 30, 2003, no borrowings were outstanding under either facility.

2003 Financings:

In the nine months ended September 30, 2003, the Company issued $1.2 billion in medium-term notes, $1.0 billion of 5.5% notes due
2013 and $300 million of 6.125% notes due 2011 under its $10.0 billion shelf registration statement and $1.5 billion in medium-term notes under a $5.0 billion
Euromarket program established in July 2001.

During
the nine months ended September 30, 2003, the Company repaid approximately $3.1 billion of medium-term notes and $23 million of structured notes.

8. Private Equity and Other Long-Term Investments

Private equity and other long-term investments include direct investments and investments in investment vehicles that are generally structured as
limited partnerships that in turn make private equity and related investments in various portfolio companies and funds. The Company categorizes its private equity investments and other
long-term investments into two categories, public securities and private securities. Private securities are further classified as
CSFB-managed funds, direct investments or third-party managed funds. These investments generally have no readily available market or may be otherwise restricted as to resale under the
Securities Act of 1933; therefore, these investments are carried at estimated fair value.

The
Company's subsidiaries, generally acting as managing general partner, manage many private equity partnerships (the "Funds"). When the investment performance on
CSFB-managed Funds exceeds specific thresholds, the Company and certain other general partners (the "GPs") may be entitled to receive a carried interest distribution. Carried interest
distributions are based on the cumulative investment performance of each Fund at the time the distribution is made. As a result, the Company, in its capacity as a GP (or general partner or managing
member of a GP), may be obligated to return to investors in the Funds all or a portion of the carried interest distributions received by the GPs if the GPs have received excess carried interest
payments over the life of the Funds under the governing documents of the Funds. The amount of such contingent obligation is based upon the performance of the Funds but cannot exceed the amount
received by the GPs. As of September 30, 2003 and December 31, 2002, the maximum amount of such contingent obligations was $228 million

18

---

and
$155 million, respectively, assuming the Funds' remaining investments were worthless. Assuming the Funds' remaining investments were sold at their current carrying values as of
September 30, 2003 and December 31, 2002, the contingent obligations would have been $11 million and $31 million, respectively.

In
addition, pursuant to certain contractual arrangements, the Company is obligated to make cash payments to certain investors in certain Funds if specified performance thresholds are
not met by such Funds. As of September 30, 2003 and December 31, 2002, the maximum amount of such contingent obligations was $44 million and $37 million, respectively,
assuming the Funds' remaining investments were worthless. Assuming the Funds' remaining investments were sold at their current carrying values at both September 30, 2003 and December 31,
2002, the contingent obligations would have been $1 million.

As
of both September 30, 2003 and December 31, 2002, the Company had investments in private equity and other long-term investments of $1.0 billion and
had commitments to invest up to an additional $1.4 billion and $1.7 billion as of September 30, 2003 and December 31, 2002, respectively. Changes in net unrealized
appreciation/depreciation arising from changes in fair value and the gain or loss realized upon sale are reflected in principal transactions-net in the condensed consolidated statements of
income.

9. Net Capital

The Company's principal wholly owned subsidiary, CSFB LLC, is a registered broker-dealer, registered futures commission merchant and member firm of the New York
Stock Exchange Inc. ("NYSE"). As such, it is subject to the NYSE's net capital rule, which conforms to the uniform net capital rule
pursuant to Rule 15c3-1 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Under the alternative method permitted by this rule, the required net capital may
not be less than two percent of aggregate debit balances arising from customer transactions or four percent of segregated funds, whichever is greater. If a member firm's net capital is less than four
percent of aggregate debit balances, the NYSE may require the firm to reduce its business. If a member firm's net capital is less than five percent of aggregate debit balances, the NYSE may prevent
the firm from expanding its business and declaring cash dividends. As of September 30, 2003, CSFB LLC's net capital of approximately $2.6 billion was 35% of aggregate debit balances and
in excess of the minimum requirement by approximately $2.5 billion. The Company's over-the-counter ("OTC") derivatives dealer subsidiary, Credit Suisse First Boston
Capital LLC, is also subject to the uniform net capital rule, but calculates its net capital requirements under Appendix F of Rule 15c3-1.

Certain
other subsidiaries are subject to capital adequacy requirements. As of September 30, 2003, the Company and its subsidiaries complied with all applicable regulatory capital
adequacy requirements.

10. Cash and Securities Segregated Under Federal and Other Regulations

In compliance with the Commodity Exchange Act, CSFB LLC segregates funds deposited by customers and funds accruing to customers as a result of trades or
contracts. As of September 30, 2003 and December 31, 2002, cash and securities aggregating $2.9 billion and $1.8 billion, respectively, were segregated or secured by CSFB
LLC in separate accounts exclusively for the benefit of customers.

19

---

In
accordance with the SEC's no-action letter dated November 3, 1998, CSFB LLC computed a reserve requirement for the proprietary accounts of introducing
broker-dealers. As of September 30, 2003 and December 31, 2002, CSFB LLC segregated securities aggregating $162 million and $41 million, respectively, on behalf of
introducing broker-dealers. As of December 31, 2002, Pershing LLC, which was sold in connection with the Pershing sale, segregated $283 million on behalf of introducing broker-dealers.

In
addition, CSFB LLC segregated U.S. Treasury securities with a market value of $4.6 billion and $2.3 billion as of September 30, 2003 and December 31, 2002,
respectively, in a special reserve bank account exclusively for the benefit of customers as required by Rule 15c3-3 of the Exchange Act. Pershing LLC segregated $2.8 billion
in a special reserve account exclusively for the benefit of customers as of December 31, 2002.

11. Derivatives Contracts

The Company uses derivatives contracts for trading and hedging purposes and to meet client needs. These derivatives include options, forwards, futures and swaps.

Non-trading Derivatives

The Company manages its interest rate exposure on its fixed-rate debt by using interest rate swaps. These swaps are considered hedging instruments and
qualify as fair value hedges under SFAS 133. For qualifying fair value hedges, the changes in fair value of both the hedging instrument and the underlying debt are included in other revenues in
the condensed consolidated statements of income.

The
effectiveness of a qualifying hedging relationship is evaluated using quantitative measures of correlation. If a hedge relationship is not found to be highly effective, the hedge
relationship no longer qualifies for hedge accounting under SFAS 133. As such, any subsequent gains or losses attributable to the hedged item cease to be recognized, while the subsequent
changes in the derivative instrument's fair value are recognized in earnings, in each reporting period. In addition, the fair value adjustment of the debt due to hedge accounting is amortized over the
remaining life of the debt as a yield adjustment.

The
gains and losses related to the ineffective component of the fair value hedges were not material for the nine months ended September 30, 2003 and 2002.

Other
derivatives used for hedging purposes that do not qualify as hedges under SFAS 133 are carried at fair value with changes in value included in principal
transactions-net in the condensed consolidated statements of income. For the nine months ended September 30, 2003 and 2002, the Company recognized a pre-tax gain of
$3 million and a pre-tax loss of $7 million, respectively, for these derivatives.

Trading Derivatives

The Company enters into various transactions using derivatives for trading purposes, to hedge trading exposures or to provide products to its clients. These
derivatives include options, forwards, futures and swaps.

20

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Options

The Company writes option contracts specifically designed to meet customer needs, for trading purposes or for hedging purposes. The options do not expose the
Company to credit risk because the Company, not its counterparty, is obligated to perform. At the beginning of the contract period, the Company receives a cash premium. During the contract period, the
Company bears the risk of unfavorable changes in the value of the financial instruments underlying the options. To manage this market risk, the Company purchases or sells cash or derivative financial
instruments on a proprietary basis. Such purchases and sales may include debt and equity securities, forward and futures contracts, swaps and options.

The
Company also purchases options to meet customer needs, for trading purposes or for hedging purposes. With purchased options, the Company gets the right, for a fee, to buy or sell the
underlying instrument at a fixed price on or before a specified date. The underlying instruments for these options include fixed income securities, equities, foreign currencies and interest rate
instruments or indices. The counterparties to these option contracts are reviewed to determine whether they are creditworthy.

Forwards

The Company enters into forward purchases and sales contracts for mortgage-backed securities, foreign currencies and commitments to buy or sell residential
mortgages. In addition, the Company enters into futures contracts on equity-based indices and other financial instruments, as well as options on futures contracts.

For
forward contracts, cash is generally not required at inception; cash equal to the contract value is required at settlement. For futures contracts, the original margin is required
generally in cash at inception; cash equal to the change in market value is required daily.

Because
forward contracts are subject to the financial reliability of the counterparty, the Company is exposed to credit risk. To mitigate this credit risk, the Company limits
transactions with specific counterparties, reviews credit limits and adheres to internally established credit extension policies. For futures contracts and options on futures contracts, the change in
the market value is settled with a clearing broker in cash each day. As a result, the credit risk with the clearing broker is limited to the net positive change in the market value for a single day.

Swaps

The Company's swap agreements consist primarily of interest rate and equity swaps. Interest rate swaps are contractual agreements to exchange interest rate
payments based on agreed notional amounts and maturity. Equity swaps are contractual agreements to receive the appreciation or depreciation in value based on a specific strike price on an equity
instrument in exchange for paying another rate, which is usually based on index or interest rate movements. Swaps are reported at fair value.

Trading
derivative contracts are carried at fair value with changes in unrealized gains and losses and realized gains and losses included in principal transactions-net in the
condensed consolidated statements of income.

21

---

Quantitative Disclosures for All Derivatives

The fair values of all derivatives contracts outstanding as of September 30, 2003 and December 31, 2002 were as follows:

September 30, 2003

December 31, 2002Assets

Liabilities

Assets

Liabilities(In millions)Options

$
2,442

$
2,397

$
830

$
1,110Forward contracts


2,550


2,761


719


655Swaps


2,586


1,153


2,407


1,084Total

$
7,578

$
6,311

$
3,956

$
2,849


These
assets and liabilities are included as derivatives contracts in financial instruments owned/sold not yet purchased, respectively, in the condensed consolidated statements of
financial condition.

12. Commitments

The following table sets forth certain of the Company's long-term commitments, including the current portion, as of September 30, 2003:

Commitment Expiration Per PeriodLess than 1
year

1-3
years

4-5
years

Over 5
years

Total
commitments(In millions)Standby repurchase agreements(1)

$


$
75

$


$


$
75Operating leases(2)


200


351


333


1,607


2,491Private equity(3)


31


216


339


797


1,383Total commitments

$
231

$
642

$
672

$
2,404

$
3,949


---

The
Company obtained letters of credit of $192 million and $543 million as of September 30, 2003 and December 31, 2002, respectively, in order to satisfy
counterparty collateral requirements.

In
addition, as of September 30, 2003 the Company had certain commitments that expire within one year, including commitments to enter into resale agreements of
$7.3 billion.

The
Company has contractual obligations related to certain information technology and mainframe systems. As of September 30, 2003, these obligations were not significant. The
Company had no capital lease obligations as of September 30, 2003. For certain of the Company's additional commitments, see Notes 7, 8 and 13.

22

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13. Guarantees

In the ordinary course of business, the Company enters into guarantee contracts as guarantor. FIN No. 45, "Guarantor's Accounting and Disclosure
Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others" ("FIN 45") requires disclosure by a guarantor of its maximum potential payment obligations under certain of
its guarantees to the extent that it is possible to estimate them. FIN 45 also requires a guarantor to recognize, at the inception of a guarantee, a liability for the fair value of the
obligations undertaken in issuing such guarantee, including its ongoing obligation to stand ready to perform over the term of the guarantee in the event that certain events or conditions occur. With
certain exceptions, these recognition requirements apply to any new guarantees entered into, or current guarantees that are modified, after December 31, 2002.

The
guarantees covered by FIN 45 may require the Company to make payments to the guaranteed party based on changes related to an asset, a liability or an equity security of the
guaranteed party. The Company may also be contingently required to make payments to the guaranteed party based on another entity's failure to perform under an agreement, or the Company may have an
indirect guarantee of the indebtedness of others, even though the payment to the guaranteed party may not be based on changes related to an asset, liability or equity security of the guaranteed party.

In
addition, FIN 45 covers certain indemnification agreements that contingently require the Company to make payments to the indemnified party based on changes related to an asset,
liability or equity security of the indemnified party, such as an adverse judgment in a lawsuit or the imposition of additional taxes due to either a change in the tax law or an adverse interpretation
of the tax law.

The
following table sets forth the maximum quantifiable contingent liability associated with guarantees covered by FIN 45 as of September 30, 2003 by maturity:

Guarantee of Commitment
Expiration Per PeriodLess than 1
year

1-3
years

4-5
years

Over
5 years

Total
guarantees(In millions)Performance guarantees

$


$


$


$
131

$
131Market value guarantees


3,384


2,392


1,291


965


8,032Related party guarantees











1,375


1,375Total guarantees

$
3,384

$
2,392

$
1,291

$
2,471

$
9,538


Performance Guarantees

In the ordinary course of business, the Company enters into contracts that would require it, as the guarantor, to make payments to the guaranteed party based on a
third party's failure to perform under an agreement. As of September 30, 2003, the Company had a maximum contingent liability of $131 million under performance guarantees.

Market Value Guarantees

In the ordinary course of business, the Company enters into OTC contracts that contingently require it, as the guarantor, to make payments based on changes in an
underlying financial instrument.

23

---

Included
in this category are certain written OTC put option contracts, pursuant to which the counterparty can potentially force the Company to acquire the underlying financial instrument or require
the Company to make a cash payment in an amount equal to the decline in value of the financial instrument underlying the OTC put option. Also included in this category are credit derivatives that may
subject the Company to credit spread or issuer default risk because the change in credit spreads or the credit quality of the underlying financial instrument may obligate the Company to make a
payment. The Company seeks to manage these OTC derivatives exposures by engaging in various hedging strategies to reduce its exposure, such as purchasing an option to sell the related financial
instrument or entering into other offsetting derivatives contracts.

FIN 45
does not require disclosures about derivatives if they can be cash settled and the Company has no basis to conclude that it is probable that the counterparties held the
underlying instruments related to the derivative at the inception of the contract. Derivatives meeting both of these criteria are not disclosed in the table above.

As
of September 30, 2003, the Company recorded $403 million in market value guarantees. These guarantees are reflected as derivatives contracts in the condensed
consolidated statements of financial condition. See Note 11 for more information on derivatives. The maximum gross contingent liability, excluding any potential offset from hedging activities
of these contracts, is $8.0 billion, of which $5.4 billion is with CSG affiliates, and represents the obligation of the Company in the event that all the underlying securities are
worthless, the likelihood of which the Company believes is remote.

Related Party Guarantees

For purposes of FIN 45, related party guarantees refer to any guarantees issued by the Company for obligations of any company ("affiliates") controlled by
CSG, the Company's ultimate parent, unless it is one of the Company's consolidated subsidiaries. Guarantees issued by the Company for the obligations of its consolidated subsidiaries are excluded
because they do not create any incremental liability.

The
Company issues guarantees to customers with respect to certain obligations of its affiliates in the ordinary course of business, including, but not limited to, certain derivatives
transactions. Failure to perform by an affiliate would require the Company to perform under the guarantee. The maximum
contingent liability of future payments of guarantees issued to counterparties of affiliates as of September 30, 2003 was $1.4 billion. While the maximum contingent liability represents
possible future payments under the guarantees, the Company believes that the likelihood of nonperformance by these affiliates is remote. Excluded from the maximum contingent liability above are
certain guarantees for which an estimate cannot be made because the exposure is unlimited and therefore impossible to estimate.

Guarantees Related to Private Equity Carried Interest

Under certain circumstances, the Company has provided investors in private equity funds sponsored by the Company guarantees of potential obligations of certain
GPs to return amounts previously paid as carried interest to those GPs. To manage its exposure, the Company generally withholds a portion of carried interest distributions to cover any repayment
obligations. As of

24

---

September 30,
2003, the Company had a maximum contingent liability of $228 million related to such arrangements, assuming the funds' remaining investments were worthless, and of
$11 million, assuming the funds' remaining investments were sold at their current carrying values; the amounts of such guarantees are included in the contingent obligations disclosed in
Note 8.

Guarantees of Collection of Prepayment Penalties

As part of the Company's residential mortgage securitization activities, the Company at times guarantees the collection by the servicer of prepayment penalties.
As of September 30, 2003, the Company's maximum exposure, assuming all of the underlying borrowers prepaid the loans and no prepayment penalties were collected by the servicer, was
$334 million.

Other Guarantees

The Company has certain guarantees for which its maximum contingent liability cannot be quantified. These guarantees are not reflected in the table above and are
discussed below.

Indemnifications issued in connection with asset sales

In connection with sales of certain assets or businesses, the Company has provided purchasers customary indemnification provisions based on changes in an
underlying asset or liability relating to the assets sold. These indemnification provisions are negotiated with the purchaser of the assets or businesses and vary in their scope and duration. These
indemnification provisions generally shift the risk of certain unquantifiable and unknowable loss contingencies (e.g., relating to litigation, tax and intellectual property matters) from the purchaser
to the seller, as known or quantifiable loss contingencies generally are reflected in the value of the assets or businesses being sold. The Company has determined that it is not possible to make an
estimate of the maximum amount that the Company could be obligated to pay under these indemnification provisions. To date, the Company's actual payments arising from these indemnification provisions
have been in connection with litigation matters and have not been material.

Tax gross-up arrangements

The Company provides indemnifications to certain counterparties in connection with its normal operating activities. The Company has determined that it is not
possible to make an estimate of the maximum amount it could be obligated to pay. As a normal part of issuing its own securities, the Company typically agrees to reimburse holders for additional tax
withholding charges or assessments resulting from changes in applicable tax laws or the interpretation of those laws. Securities that include these agreements to pay additional amounts generally also
include a related redemption or call provision if the obligation to pay the additional amounts results from a change in law or its interpretation and the obligation cannot be avoided by the issuer
taking reasonable steps to avoid the payment of additional amounts. Since such potential obligations are dependent on future changes in tax laws, the related liabilities the Company may incur as a
result of such changes cannot be reasonably estimated. In light of the related call provisions typically included, the Company does not expect any potential liabilities in respect of tax
gross-ups to be material.

25

---

Exchange and clearinghouse memberships

The Company is a member of numerous securities exchanges and clearinghouses, and may, as a result of its membership arrangements, be required to perform if
another member defaults. The Company has determined that it is not possible to estimate the maximum amount of these obligations and believes that any potential requirement to make payments under these
arrangements is remote.

14. Industry Segment and Geographic Data

The Company operates and manages its businesses through two operating segments: the Institutional Securities segment, consisting of the Investment Banking, Equity
and Fixed Income divisions, and the Financial Services segment.

The
Company's segments are managed based on types of products and services offered and their related client bases. The Company evaluates the performance of its segments based primarily
on income (loss) before income taxes and discontinued operations.

In
the Institutional Securities segment:



The
Financial Services segment provides investment advisory services to high-net-worth individuals and the financial intermediaries that represent them. The range
of services includes single-stock brokerage, hedging and sales of restricted securities and investment management products, such as third-party managed accounts and alternative investments. The
presentation of Pershing results, including the gain on the sale in the second quarter of 2003, as "Discontinued operations" for all periods presented resulted in a material decrease in the Financial
Services segment's revenues as the Pershing business contributed materially to the net revenues of the Financial Services segment.

The
Company allocates to its segments a pro rata share of certain centrally managed costs, such as leased facilities and equipment costs, employee benefits and certain general overhead
expenses based upon specified amounts, usage criteria or agreed rates, and allocates interest expense based upon the type of asset. The segmental allocation of some costs, such as incentive bonuses,
has been estimated.

The
Company has not allocated merger-related and certain other costs and charges to its segments because none of these costs represents normal operating costs. Instead, these costs are
in the Elimination & Other category in the table below. The Company's results from the legacy private equity and distressed businesses are also included in the Elimination & Other
category in the table below. All

26

---

other
accounting policies of the segments are the same as those described in the summary of significant accounting policies in the Company's Annual Report on Form 10-K for the year
ended December 31, 2002.

The
following table sets forth the net revenues excluding net interest, net interest revenue (expense), total net revenues, total expenses and income (loss) from continuing operations
before provision (benefit) for income taxes and discontinued operations of the Company's segments and reconciles the Company's segment totals to the Company's condensed consolidated results.

Institutional SecuritiesInvestment
Banking

Equity

Fixed Income(3)

Institutional
Securities

Financial
Services

Total for
Reported
Segments

Elimination
& Other(2)

Total(In millions)Three Months Ended
    September 30, 2003:Net revenues excluding net
    interest

$
359

$
269

$
(139
)
$
489

$
55

$
544

$
26

$
570Net interest revenue (expense)


13


32


495


540


4


544


(15
)

529Total net revenues


372


301


356


1,029


59


1,088


11


1,099Total expenses


216


216


278


710


61


771


104


875Income (loss)(1)

$
156

$
85

$
78

$
319

$
(2
)
$
317

$
(93
)
$
224Three Months Ended
    September 30, 2002:Net revenues excluding net
    interest

$
296

$
229

$
(205
)
$
320

$
57

$
377

$
(186
)
$
191Net interest revenue (expense)


13


16


474


503


3


506


(10
)

496Total net revenues


309


245


269


823


60


883


(196
)

687Total expenses


357


268


370


995


66


1,061


(6
)

1,055Income (loss)(1)

$
(48
)
$
(23
)
$
(101
)
$
(172
)
$
(6
)
$
(178
)
$
(190
)
$
(368
)Nine Months Ended
    September 30, 2003:Net revenues excluding net
    interest

$
1,039

$
843

$
72

$
1,954

$
163

$
2,117

$
31

$
2,148Net interest revenue (expense)


24


95


1,498


1,617


8


1,625


(29
)

1,596Total net revenues


1,063


938


1,570


3,571


171


3,742


2


3,744Total expenses


835


808


1,085


2,728


189


2,917


354


3,271Income (loss)(1)

$
228

$
130

$
485

$
843

$
(18
)
$
825

$
(352
)
$
473Segment assets at
    September 30, 2003

$
1,616

$
65,052

$
173,988

$
240,656

$
36

$
240,692

$
297

$
240,989Nine Months Ended
    September 30, 2002:Net revenues excluding net
    interest

$
1,243

$
1,028

$
142

$
2,413

$
219

$
2,632

$
248

$
2,880Net interest revenue (expense)


27


44


1,317


1,388


11


1,399


(34
)

1,365Total net revenues


1,270


1,072


1,459


3,801


230


4,031


214


4,245Total expenses


1,214


894


1,279


3,387


254


3,641


198


3,839Income (loss)(1)

$
56

$
178

$
180

$
414

$
(24
)
$
390

$
16

$
406Segment assets at
    December 31, 2002

$
1,487

$
52,900

$
169,748

$
224,135

$
92

$
224,227

$
11,870

$
236,097


---

27

---

The
Company's principal operations are located in the United States. The Company's foreign revenues are not significant.

15. Legal Proceedings

The Company is involved in a number of judicial, regulatory and arbitration proceedings concerning matters arising in connection with the conduct of its
businesses. These actions have been brought on behalf of various classes of claimants and, unless otherwise specified, seek damages of material and/or indeterminate amounts. The Company believes,
based on currently available information and advice of counsel, that the results of such proceedings, in the aggregate, will not have a material adverse effect on its financial condition but might be
material to operating results for any particular period, depending, in part, upon the operating results for such period. For a discussion of the Company's legal proceedings, see "Legal Proceedings" in
Part II, Item 1.

28

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Independent Accountants' Review Report

The
Board of Directors and Stockholder
Credit Suisse First Boston (USA), Inc.:

We
have reviewed the accompanying condensed consolidated statement of financial condition of Credit Suisse First Boston (USA), Inc. and subsidiaries (formerly known as Donaldson,
Lufkin & Jenrette, Inc. and subsidiaries) as of September 30, 2003, the related condensed consolidated statements of income for the three-month and nine-month periods
ended September 30, 2003 and 2002, and the related condensed consolidated statements of changes in stockholders' equity and cash flows for the nine-month periods ended
September 30, 2003 and 2002. These condensed consolidated financial statements are the responsibility of the Company's management.

We
conducted our reviews in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists
principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance
with auditing standards generally accepted in the United States of America, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we
do not express such an opinion.

Based
on our reviews, we are not aware of any material modifications that should be made to the condensed consolidated financial statements referred to above for them to be in conformity
with accounting principles generally accepted in the United States of America.

We
have previously audited, in accordance with auditing standards generally accepted in the United States of America, the consolidated statement of financial condition of Credit Suisse
First Boston (USA), Inc. and subsidiaries as of December 31, 2002, and the related consolidated statements of income, changes in stockholders' equity and cash flows for the year then
ended (not presented herein); and in our report dated February 19, 2003, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set
forth in the accompanying condensed
consolidated statement of financial condition as of December 31, 2002 is fairly stated, in all material respects, in relation to the consolidated statement of financial condition from which it
has been derived.

|/s/KPMG LLPNew York, New York
October 27, 2003 |  | 
|---------------------------------------------- |  | 

29

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CREDIT SUISSE FIRST BOSTON (USA), INC. AND SUBSIDIARIES

ITEM 2:    Management's Discussion and Analysis of Financial Condition and Results of Operations

We are a leading integrated investment bank serving institutional, corporate, government and individual clients. We are part of the Credit Suisse First Boston
business unit, which we call CSFB, of Credit Suisse Group, or CSG, and our results do not necessarily reflect the overall performance of CSFB or CSG. When we use the terms "we" and "our" and the
"Company," we mean Credit Suisse First Boston (USA), Inc., a Delaware corporation, and its consolidated subsidiaries.

The
Company's principal operations are located in the United States. The Company's foreign revenues are not significant.

BUSINESS ENVIRONMENT

Our principal business activities, investment banking and private equity, securities underwriting and sales and trading, are, by their nature, highly competitive
and subject to general market conditions that include volatile trading markets and fluctuations in the volume of market activity. Consequently, our results have been, and are likely to continue to be,
subject to wide fluctuations reflecting the impact of many factors beyond our control, including securities market conditions, the level and volatility of interest rates, competitive conditions, the
size and timing of transactions and the geopolitical environment.

Despite
concerns over low levels of capital spending and high unemployment, the U.S. economy continued to gain momentum in the third quarter of 2003, as low interest rates spurred
consumer spending. The strengthening economy and expectations of improved corporate earnings prompted increases in the stock market, with the Dow Jones Industrial Average up 3% and 11%, the
Standard & Poor's 500 stock index up 2% and 13%, and the NASDAQ composite index up 10% and 34% for the three and nine months ended September 30, 2003, respectively.

The
fixed income markets experienced interest rate volatility during July and August over concerns that the Federal Reserve Board would raise its federal funds rate target. These
concerns drove up the yield on the 10-year Treasury note and threatened to slow mortgage refinancing and certain consumer spending, two elements that have been vital in the economy's
recovery. In August, Treasury prices rebounded when the Federal Reserve Board left the federal funds rate at 1%, a 41-year low, and reassured the market that it intended to maintain a low
interest rate policy.

The
dollar value of U.S. equity and equity-related underwriting for the three and nine months ended September 30, 2003 increased 131% and 6%, respectively, compared with the same
periods in 2002, due to increases in convertible bond offerings. The dollar value of proceeds from initial public offerings in the United States for the three and nine months ended
September 30, 2003 decreased 16% and 65%, respectively, compared with the same periods in 2002; however, demand for more conventional equity products increased in the third quarter as reflected
in the increase in the number of initial public offerings compared with the first and second quarters of 2003. Fixed income underwriting continued to perform well despite the volatility in the debt
markets during July and August, and the dollar value of U.S. debt underwriting for the three and nine months ended September 30, 2003 climbed 24% and 17%, respectively, compared with the same
periods in 2002. The dollar value of completed mergers and acquisitions in the United States for the three and nine months ended September 30, 2003 was down 40% and 18%, respectively, compared
with the same periods in 2002, despite increased activity in June and July.

30

---

RECENT DEVELOPMENTS

On May 1, 2003, we sold our Pershing unit, which was part of the Financial Services segment, to The Bank of New York Company, Inc. and reported a
pre-tax gain of approximately $1.3 billion and an after-tax gain of $852 million in the second quarter of 2003. We presented the assets and liabilities of our
Pershing unit as "Assets held for sale" and "Liabilities held for sale" as of December 31, 2002 in the condensed consolidated statements of financial condition. The operating results of the
Pershing unit, including the gain on the sale, have been presented as "Discontinued operations" for all periods presented in the condensed consolidated statements of income.

On
March 20, 2003, our immediate parent company, Credit Suisse First Boston, Inc., or CSFBI, transferred Credit Suisse First Boston Management Corporation to us as a
capital contribution, and, subsequently, the company was converted to the Delaware limited liability company Credit Suisse First Boston Management LLC, or Management LLC. Management LLC engages in
derivatives transactions and holds a portfolio of private equity, distressed assets and real estate investments. The derivatives transactions entered into by Management LLC have historically been
designed to hedge certain trading
and other positions held by Credit Suisse First Boston LLC, or CSFB LLC. The transfer of Management LLC was accounted for at historical cost in a manner similar to
pooling-of-interest accounting because Management LLC and we were under the common control of CSFBI at the time of the transfer. We have restated financial information for all
periods presented to reflect the results of operations and financial position of Management LLC as if we had acquired it on November 3, 2000, the date that we were acquired by CSFBI.

In
the third quarter of 2003, we introduced three-year vesting for all stock option and restricted stock awards, in line with investment banking industry practice. The
imposition of three-year vesting is intended to improve our employee retention and long-term performance. Following our adoption of Statement of Financial Accounting Standards,
or SFAS, No. 123, "Accounting for Stock-Based Compensation," or SFAS 123, as amended by SFAS No. 148, "Accounting for Stock-Based CompensationTransition and
Disclosure," and the change in vesting of stock option and restricted stock awards, we will expense stock option and restricted stock awards as they vest over the three-year service
period, beginning with the grants we expect to make in January 2004. Accordingly, compensation expense will be recognized over the service period based on the fair value of the stock option or
restricted stock awards at the grant date. As a result of the change in vesting, we reversed our accrued compensation expense of $85 million recorded in the first half of 2003 related to
restricted stock awards expected to be granted in January 2004, and our compensation expense during the third quarter was significantly reduced compared to prior periods. The reversal of the
first half accrual was more than offset by an incentive compensation accrual. See Note 2 of the condensed consolidated financial statements in Part I, Item 1.

On
September 9, 2003, CSG completed its option reduction program, which entitled employees to exchange on a value-for-value basis certain existing options
for new options or restricted stock. In accordance with SFAS 123, we did not recognize any compensation expense as a result of that exchange.

CRITICAL ACCOUNTING POLICIES

In order to prepare the condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States of America,
or U.S. GAAP, we must make estimates and assumptions based on judgment and available information. The reported amounts of assets and liabilities and revenues and expenses are affected by these
estimates and assumptions. Actual results could differ from these estimates and the differences could be material.

Our
significant accounting policies are disclosed in Note 1 of the consolidated financial statements in Part II, Item 8 in our Annual Report on Form 10-K
for the year ended December 31, 2002. We

31

---

believe
that the critical accounting policies discussed below involve the most complex judgments and assessments. We believe that the estimates and assumptions used in the preparation of the condensed
consolidated financial statements are prudent and reasonable.

Fair Value

As is the normal practice in our industry, the values we report in the condensed consolidated financial statements with respect to "Financial instruments owned"
and "Financial instruments sold not yet purchased" are in most cases based on fair value, with related unrealized and realized gains or losses included in the condensed consolidated statements of
income. Commercial mortgage whole loans and certain residential mortgage whole loans held for sale are carried at the lower of aggregate cost or fair value.

Fair
value may be objective, as is the case for exchange-traded instruments, for which quoted prices in price-efficient and liquid markets generally exist, or as is the case where a
financial instrument's fair value is derived from actively quoted prices or pricing parameters. Fair value may also be subjective and dependent on varying degrees of judgment depending on liquidity,
concentration, uncertainty of market factors and pricing assumptions and other risks affecting the specific instrument; valuation adjustments are made in such circumstances to reflect these
investments at management's best estimate of fair value. In addition, there are circumstances in which financial instruments that are ordinarily valued on quoted prices may be distorted in times of
market dislocation.



Control processes are applied to ensure that the fair values reported in our condensed consolidated financial statements are appropriate and measured on a
reliable basis. These control processes include price verification procedures and reviews of models used to price financial instruments by personnel with relevant expertise who are independent of the
trading and investment functions. For further discussion of our risk management policies and procedures, see "Quantitative and Qualitative Disclosure About Market Risk" in our Annual Report on
Form 10-K for the year ended December 31, 2002.



The fair value of the vast majority of our financial instruments owned and financial instruments sold not yet purchased is based on quoted market prices or
observable market parameters or is derived from such prices or parameters. The fair value of our cash positions in U.S. government and agency securities and corporate debt, equity and commercial paper
is based principally on observable market prices (i.e.,dealer quotes or exchange-traded prices) or derived from observable market prices. For those
cash positions in corporate debt and equity that are thinly traded or not quoted, more judgment is required in the determination of fair value. Examples of cash products with no quoted prices or that
are thinly traded are certain high-yield debt securities, certain collateralized mortgage obligations, distressed debt securities and equity securities that are not publicly traded.
Generally, the techniques used to determine fair value for these positions are based on the type of product. For certain debt securities for which market prices are not available, value is based on
yields reflecting the perceived risk of the issuer or country rating and the maturity of the security, which may involve some judgment. For other thinly traded securities, including convertible
securities and asset-backed securities, internal and external models are used that take into consideration the input parameters such as underlying stock price, dividend rates, credit spreads, foreign
exchange rates, prepayment rates and equity market volatility. For certain asset-backed securities, pricing models employing prepayment scenarios are used.

Financial
instruments held in the distressed portfolio are typically issued by private companies under significant financial duress and/or near bankruptcy. Due to the less liquid nature
of these

32

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financial
instruments, valuation techniques often include earnings-multiple analyses, similar market transactions and default recovery analyses. In addition, liquidity and credit concerns are also
considered in the determination of fair value. All of these factors contribute to significant subjectivity in the valuation of these financial instruments. As of September 30, 2003 and
December 31, 2002, the fair value of our distressed financial instruments, net of valuation adjustments, was $183 million and $208 million, respectively.

For
residential mortgage loans, valuations are based on market information on similar loans trading in the current market. Proprietary models employing prepayment scenarios and Monte
Carlo simulations are also used. Commercial real estate loans are valued using origination spreads, loan-to-value ratios, debt service coverage ratios, geographic location,
prepayment considerations and current yield curves. In addition, current written offers or contract prices are considered in the valuation process.

Our
derivatives portfolio includes both exchange-traded and over-the-counter, or OTC, derivatives. The fair value of exchange-traded derivatives is typically
derived from the observable exchange price and/or observable market parameters. Our primary exchange-traded derivatives include futures and certain option agreements.
OTC derivatives include forwards, swaps and options on foreign exchange, interest rates, equities and credit products. Fair values for OTC derivatives are determined on the basis of internally
developed proprietary models using various input parameters. The input parameters include those characteristics of the derivative that have a bearing on the economics of the instrument and market
parameters. In well-established derivatives markets, the use of a particular model may be widely accepted. For example, the Black-Scholes model is widely used to calculate the fair value
of many types of options. These models are used to calculate the fair value of OTC derivatives and to facilitate the effective risk management of the portfolio. The determination of the fair value of
many derivatives involves only limited subjectivity because the required input parameters are observable in the marketplace. The pricing of these instruments is referred to as "direct." For other more
complex derivatives, subjectivity relating to the determination of input parameters reduces price transparency. The pricing of these instruments is referred to as "indirect." Specific areas of
subjectivity include long-dated volatilities on OTC option transactions and recovery rate assumptions for credit derivative transactions. Uncertainty of pricing assumptions and liquidity
are also considered as part of the valuation process. As of September 30, 2003 and December 31, 2002, substantially all of the replacement values reported in our condensed consolidated
statement of financial condition were derived using direct pricing.



Private equity and other long-term investments include direct investments and investments in partnerships that make private equity and related
investments in various portfolio companies and funds. The Company categorizes its private equity investments and other long-term investments into two categories, public securities and
private securities. Private securities are further classified as CSFB-managed funds, direct investments or funds managed by third parties. These investments generally have no readily
available market or may be otherwise restricted as to resale; therefore, these investments are carried at estimated fair value. Fair value for private equity and other long-term
investments is based upon a number of factors as described below.



Publicly traded investments are valued based upon readily available market quotes with the appropriate adjustments for liquidity as a result of holding large
blocks and/or having trading restrictions. As of September 30, 2003 and December 31, 2002, the fair value of public securities in our private equity portfolio was $55 million and
$57 million, respectively.

33

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CSFB-Managed Funds.CSFB-managed funds are funds for which CSFB acts as fund advisor and makes
investment decisions. The investments in the funds are valued taking into account a number of factors, such as the most recent round of financing involving unrelated new investors, earnings multiple
analyses using comparable companies or discounted cash flow analysis. The investments in fund of funds partnerships are valued based on periodic statements received from the underlying fund manager.
As of September 30, 2003 and December 31, 2002, the fair value of our investments in CSFB-managed funds was $539 million and $486 million, respectively.

Direct Investments.Direct investments are generally side-by-side investments in portfolio companies
of CSFB-managed or third-party-managed funds. The investments are valued in accordance with the procedures for CSFB-managed or third-party-managed funds. As of
September 30, 2003 and December 31, 2002, the fair value of direct investments in our private equity portfolio was $184 million and $288 million, respectively.

Funds Managed by Third Parties.Funds managed by third parties are limited partnership interests in a fund managed by an
external fund manager. These funds are valued based on periodic statements received from the general partner of the fund. As of September 30, 2003 and December 31, 2002, the fair value
of funds managed by third parties in our private equity portfolio was $265 million and $125 million, respectively. Included in funds managed by third parties are private equity
investments made by both the private equity and equity businesses.

Deferred Tax Assets

Deferred tax assets and liabilities are recognized for the estimated future tax effects of operating loss carry-forwards and temporary differences between the
carrying amounts of existing assets and liabilities and their respective tax bases at the balance sheet date.

The
realization of deferred tax assets on temporary differences is dependent upon the generation of taxable income during the periods in which those temporary differences become
deductible. The realization of deferred tax assets on net operating losses is dependent upon the generation of taxable income during the periods prior to their expiration, if any. Periodically,
management evaluates whether deferred tax assets can be realized. If management considers it more likely than not that all or a portion of a deferred tax asset will not be realized, a corresponding
valuation allowance is established. In evaluating whether deferred tax assets can be realized, management considers projected future taxable income, the scheduled reversal of deferred tax liabilities
and tax planning strategies.

This
evaluation requires significant management judgment, primarily with respect to projected taxable income. The estimate of future taxable income can never be predicted with certainty.
It is derived from budgets and strategic business plans but is dependent on numerous factors, some of which are beyond our control. Substantial variance of actual results from estimated future taxable
profits, or changes in our estimate of future taxable profits, could lead to changes in deferred tax assets being realizable or considered realizable, and would require a corresponding adjustment to
the valuation allowance.

As
of September 30, 2003, we had deferred tax assets resulting from temporary differences that could reduce taxable income in future periods. The condensed consolidated statements
of financial condition as of September 30, 2003 and December 31, 2002 include deferred tax assets of $1.8 billion and $2.1 billion, respectively, and deferred tax
liabilities of $320 million and $336 million, respectively. Due to uncertainty concerning our ability to generate the necessary amount and mix of state and local taxable income in future
periods, we maintain a full valuation allowance against our deferred state and local tax assets in the amount of $42 million and $46 million as of September 30, 2003 and
December 31, 2002, respectively.

34

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Litigation Contingencies

From time to time, we are involved in a variety of legal, regulatory and arbitration matters in connection with the conduct of our business. It is inherently
difficult to predict the outcome of many of these matters, particularly those cases in which the matters are brought on behalf of various classes of claimants, seek damages of unspecified or
indeterminate amounts or involve novel legal claims. In presenting the consolidated financial statements, management makes estimates regarding the outcome of legal, regulatory and arbitration matters
and takes a charge to income when losses with respect to such matters are probable and can be reasonably estimated. Charges, other than those taken periodically for cost of defense, are not
established for matters when losses cannot be reasonably estimated. Estimates, by their nature, are based on judgment and currently available information and involve a variety of factors, including,
but not limited to, the type and nature of the litigation, claim or proceeding, the progress of the matter, the advice of legal counsel and other advisers, our defenses and our experience in similar
cases or proceedings. See "Legal Proceedings" in Part II, Item 1.

RESULTS OF OPERATIONS

The assets and liabilities of Pershing as of December 31, 2002 have been presented as "Assets held for sale" and "Liabilities held for sale," respectively,
in the condensed consolidated statements of financial condition. The results of operations for Pershing, including the gain on the sale, for all periods presented have been presented as "Discontinued
operations" in the condensed consolidated statements of income. The presentation of the Pershing results as "Discontinued operations" for the periods
presented results in a decrease in commission revenues and net interest and a material decrease in the Financial Services segment net revenues as the Pershing business contributed materially to the
net revenues of that segment. We present the condensed consolidated statements of cash flows for all periods presented as if the assets and liabilities of Pershing as of December 31, 2002 were
not presented as "Assets held for sale" and "Liabilities held for sale" in the condensed consolidated statements of financial condition and the results of operations of Pershing were not presented as
"Discontinued operations" in the condensed consolidated statements of income.

The
following table sets forth a summary of our financial results:

|                                                                                                                     |  | Three Months Ended
September 30, |       | Nine Months Ended
September 30,
|-------------------------------------------------------------------------------------------------------------------- |  | -------------------------------- | ----- | -------------------------------
|
|
|Total net revenues                                                                                                   |  | $                                | 1,099 |                                
|Total expenses                                                                                                       |  |                                  | 875   |                                
|                                                                                                                     |  |                                  |       |                                
|Income (loss) from continuing operations before provision (benefit)
    for income taxes and discontinued operations |  |                                  | 224   |                                
|Provision (benefit) for income taxes                                                                                 |  |                                  | 68    |                                
|                                                                                                                     |  |                                  |       |                                
|Income (loss) from continuing operations before discontinued
    operations                                          |  |                                  | 156   |                                
|Income (loss) from discontinued operations, net of income taxes                                                      |  |                                  |      |                                
|                                                                                                                     |  |                                  |       |                                
|Net income (loss)                                                                                                    |  | $                                | 156   |                                
|                                                                                                                     |  |                                  |       |                                

The
Company's results, including the legacy private equity and distressed businesses (included in Elimination & Other as described in Note 14 of the condensed consolidated
financial statements in Part I, Item 1), and those of the Fixed Income business of the Institutional Securities segment, were impacted by the transfer of Management LLC as a capital
contribution on March 20, 2003.

35

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Interest
income (expense) is accrued at the stated coupon rate for coupon-bearing financial instruments, and for non-coupon-bearing financial instruments, interest income is
recognized by accreting the discount over the life of the instrument. For coupon-bearing financial instruments purchased at a discount or premium, the difference between interest income (expense)
accrued at the stated coupon rate and interest income (expense) determined on an effective yield basis is included in principal transactions-net.

Our
businesses are materially affected by conditions in the financial markets and economic conditions generally, including geopolitical events. Unpredictable or adverse market and
economic conditions have adversely affected and may in the future adversely affect our results of operations. See "BusinessCertain Factors That May Affect Our Results of Operations" in
our Annual Report on Form 10-K for the year ended December 31, 2002.

Three Months Ended September 30, 2003 Compared to Three Months Ended September 30, 2002

The Company recorded net income of $156 million for the three months ended September 30, 2003 compared to a net loss of $219 million in the
same period in 2002, reflecting an increase in net revenues and a decrease in expenses.

Net
revenues increased $412 million, or 60%, to $1.1 billion for the three months ended September 30, 2003, with principal transactions and investment banking and
advisory revenues increasing compared to the three months ended September 30, 2002. Reduced losses in principal transactions reflected significant write-downs taken on legacy assets in the
three months ended September 30, 2002 and stronger trading results in equity products, including convertible securities and OTC equity derivatives. Investment banking revenues increased
primarily due to improved results from fixed income underwriting, particularly of high-yield and asset-backed securities and private equity. Commissions, net interest and other revenues
were in line with the three months ended September 30, 2002.

Expenses
decreased 17% for the three months ended September 30, 2003 compared to the same period in 2002, primarily as a result of reduced headcount, continuing
cost-reduction efforts, the effect of the change in vesting for stock awards and substantial completion of retention award payments. See "Expenses."

Nine Months Ended September 30, 2003 Compared to Nine Months Ended September 30, 2002

The Company recorded net income of $1.2 billion for the nine months ended September 30, 2003 compared to $329 million in the same period in
2002. The increase in net income reflected the after-tax gain of $852 million from the sale of Pershing, included in income from discontinued operations, during the second quarter
of 2003. The results for the nine months ended September 30, 2002 included an after-tax gain of $330 million from the sale of three broker-dealers,
CSFBdirectLLC, DLJdirectLtd. and Autranet, LLC, in the first quarter of 2002. Excluding these
items, net income increased $369 million.

Net
revenues decreased $501 million, or 12%, to $3.7 billion for the nine months ended September 30, 2003, as investment banking and advisory, commissions and other
revenues all declined compared to the nine months ended September 30, 2002. The decline in investment banking and advisory revenues reflected the industry-wide reduction in mergers
and acquisitions and equity new issuance activity. Commissions declined as a result of lower single-stock trading volumes and competitive pricing pressure. A significant part of the decline in other
revenues resulted from the inclusion in 2002 of a pre-tax gain of $528 million from the sale of three of the Company's broker-dealers. Net revenues, excluding this gain on the sale
of the three broker-dealers in 2002, were relatively unchanged for the nine months ended September 30, 2003 compared with the nine months ended September 30, 2002. Principal transactions
losses were lower for the nine months ended

36

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September 30,
2003 compared to the nine months ended September 30, 2002, primarily due to improved results in private equity, OTC equity derivatives, convertible securities and decreased
write-downs on legacy assets. Net interest income benefited from the favorable interest rate environment.

Expenses
decreased 15% for the nine months ended September 30, 2003 compared to the same period in 2002, primarily as a result of reduced headcount, continuing
cost-reduction efforts, substantial completion of retention awards, the effect of the change in vesting for stock awards, consolidation of office facilities and the impact from the sale of
the three broker-dealers in 2002. See "Expenses."

Results by Segment

The discussion of net revenues is presented by segment. We operate and manage our business through two principal operating segments: the Institutional Securities
segment and the Financial Services segment. The Institutional Securities segment consists of the Investment Banking, Equity and Fixed Income divisions. Our segments are managed based on types of
products and services offered and their related client bases. We evaluate the performance of our segments based primarily on income (loss) from continuing operations before provision (benefit) for
income taxes and discontinued operations.

We
evaluate revenues in the aggregate, including an assessment of trading gains and losses and the related interest income and expense attributable to financing and hedging these
positions. Therefore, individual revenue categories may not be indicative of the performance of the total Institutional Securities segment results.

For
divisional reporting of net revenues and expenses, equity capital market underwriting fees are shared between the Investment Banking division and the Equity division and debt capital
market underwriting fees are shared between the Investment Banking division and the Fixed Income division.

The
cost structure of each of our segments is broadly similar to that of the Company as a whole, and, consequently, the discussion of expenses is presented on a company-wide
basis. The Company allocates to its segments a pro rata share of certain centrally managed costs, such as leased facilities and equipment costs, employee benefits and certain general overhead expenses
based upon specified amounts, usage criteria or agreed rates, and allocates interest expense based upon the type of asset. The allocation of some costs, such as incentive bonuses, has been estimated.
The timing and magnitude of changes in our incentive bonus accrual can have a significant effect on our operating results for a given period.

37

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The
following table sets forth the net revenues, total expenses and income (loss) from continuing operations before provision (benefit) for income taxes and discontinued operations,
including the gain on the sale of Pershing, of the Company's segments:

|                                       |                    | Institutional Securities |   |     |   |   |    
|-------------------------------------- | ------------------ | ------------------------ | - | --- | - | - | ---
|
|
|Three Months Ended September 30, 2003: |                    |                          |   |     |   |   |    
|                                       | Total net revenues |                          | $ | 372 |   | $ | 301
|                                       | Total expenses     |                          |   | 216 |   |   | 216
|                                       |                    |                          |   |     |   |   |    
|                                       | Income (loss)(1)   |                          | $ | 156 |   | $ | 85 
|                                       |                    |                          |   |     |   |   |    
|Three Months Ended September 30, 2002: |                    |                          |   |     |   |   |    
|                                       | Total net revenues |                          | $ | 309 |   | $ | 245
|                                       | Total expenses     |                          |   | 357 |   |   | 268
|                                       |                    |                          |   |     |   |   |    
|                                       | Income (loss)(1)   |                          | $ | (48 | ) | $ | (23
|                                       |                    |                          |   |     |   |   |    

|                                      |                    | Institutional Securities |   |       |  |   |      
|------------------------------------- | ------------------ | ------------------------ | - | ----- |  | - | -----
|
|
|Nine Months Ended September 30, 2003: |                    |                          |   |       |  |   |      
|                                      | Total net revenues |                          | $ | 1,063 |  | $ | 938  
|                                      | Total expenses     |                          |   | 835   |  |   | 808  
|                                      |                    |                          |   |       |  |   |      
|                                      | Income (loss)(1)   |                          | $ | 228   |  | $ | 130  
|                                      |                    |                          |   |       |  |   |      
|Nine Months Ended September 30, 2002: |                    |                          |   |       |  |   |      
|                                      | Total net revenues |                          | $ | 1,270 |  | $ | 1,072
|                                      | Total expenses     |                          |   | 1,214 |  |   | 894  
|                                      |                    |                          |   |       |  |   |      
|                                      | Income (loss)(1)   |                          | $ | 56    |  | $ | 178  
|                                      |                    |                          |   |       |  |   |      

---



The Institutional Securities segment includes the Investment Banking, Equity and Fixed Income divisions. The Investment Banking division raises and invests
capital and provides financial advice to companies throughout the United States and abroad. Through the Investment Banking division, we manage and underwrite offerings of securities, arrange private
placements, provide financial advisory and other services, pursue private equity investments in a variety of areas and provide venture capital to companies. The Equity division trades, originates and
distributes equity securities and equity-related derivatives. The Fixed Income division trades, originates and distributes fixed income securities and fixed income-related derivatives, and places
private debt instruments.



Net revenues for the Institutional Securities segment were $1.0 billion and $823 million for the three months ended September 30, 2003 and
2002, respectively, an increase of 25%, reflecting increases in net revenues across the divisions.

38

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Investment
Banking net revenues increased 20% to $372 million, primarily as a result of increased high-yield and other fixed income underwriting activity, higher
mergers and acquisition and restructuring fees and improved private equity net revenues, partially offset by reduced placement fees on private fund investments.

Equity
net revenues increased 23% to $301 million, primarily due to improved trading results in convertible securities due to tighter credit spreads and higher trading revenues
from OTC equity derivatives as a result of improved market conditions that increased transaction flows. These improved trading results were partially offset by lower trading revenues in index
arbitrage, proprietary equity derivatives trading and program trading.

Fixed
Income net revenues increased 32%to $356 million, reflecting a favorable trading, underwriting, origination and
securitization environment driven by low interest rates and interest rate volatility. This increase resulted in part from gains on derivatives that hedge certain repurchase agreements. In addition,
listed derivatives net revenues increased as a result of higher volumes. Revenues from high-yield new issuances improved as industry-wide high-yield underwriting
activity increased. Commercial mortgage-backed revenues were higher, reflecting improved spreads, and asset-backed revenues were higher due to increased origination and securitization activity. These
increases were partially offset by declines in net revenues from residential mortgages as a result of increased interest rate volatility and from secondary asset-backed trading as a result of declines
in the credit quality of certain industry sectors. High-yield and proprietary trading results declined compared to the three months ended September 30, 2002.



Net revenues for the Institutional Securities segment were $3.6 billion and $3.8 billion for the nine months ended September 30, 2003 and
2002, respectively, a decrease of 6%, reflecting declines in Investment Banking and Equity net revenues and an increase in Fixed Income net revenues.

Investment
Banking net revenues decreased 16% to $1.1 billion, primarily due to the industry-wide slowdown in mergers and acquisitions and equity new issuance
activities and reduced placement fees on private fund investments. This decline was partially offset by improved net revenues from private equity and high-yield new issuances and fees from
restructurings and other advisory activities.

Equity
net revenues decreased 13% to $938 million, primarily due to lower commission revenues from listed and OTC secondary trading as a result of lower volumes due to market
uncertainty in the first quarter of 2003, lower trading revenues from proprietary equity derivatives and reduced investment banking revenues from new equity issues due to weak demand. These decreases
were partially offset by increased trading revenues from convertible securities due to tighter credit spreads and higher trading revenues from OTC equity derivatives as a result of improved market
conditions that increased transaction flows for derivatives products.

Fixed
Income net revenues increased 8% to $1.6 billion, reflecting a favorable trading, underwriting, origination and securitization environment driven by low interest rates and
interest rate volatility. This increase resulted in part from gains on derivatives that hedge certain repurchase agreements. In addition, listed derivatives net revenues increased as a result of
higher volumes. Revenues from high-yield new issuances improved as industry-wide high-yield underwriting activity increased. Commercial mortgage-backed revenues
increased, reflecting improved spreads, and asset-backed revenues were higher due to increased origination and securitization activity. These increases were partially offset by decreases in net
revenues from investment-grade debt trading, which was down from the very high levels in the nine months ended September 30, 2002 when many investors moved to higher-credit quality issuers in
the wake of several corporate scandals. Net revenues from residential mortgages declined as a result of increased interest rate volatility and secondary asset-backed trading revenues decreased as a
result of declines in the credit quality of certain industry sectors.

39

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The Financial Services segment provides investment advisory services to high-net-worth individual investors and the financial
intermediaries that represent them. The range of services includes single-stock brokerage, hedging and sales of restricted securities and investment management products such as third-party managed
accounts and alternative investments.



Net revenues for the Financial Services segment were $59 million and $60 million for the three months ended September 30, 2003 and 2002,
respectively, a decrease of 2%, primarily reflecting declines in investment banking revenues from equity capital markets and lower commissions revenues as a result of lower transaction volumes and
reduced fee revenue due to a decline in assets under management.



Net revenues for the Financial Services segment were $171 million and $230 million for the nine months ended September 30, 2003 and 2002,
respectively, a decrease of 26%, primarily reflecting declines in new issuance revenues from equity capital markets and lower commissions revenues as a result of lower transaction volumes and reduced
fee revenue due to a decline in assets under management.

Expenses

The normal operating cost structure of each of our segments is broadly similar to that of the Company as a whole. Merger-related and certain other costs and
charges, which can be significant, do not represent normal operating costs and are not allocated to the segments. For these reasons, the discussion of expenses is presented on a
company-wide basis.

The
following table sets forth employee compensation and benefits expenses, other expenses and total expenses of the Company:

Three Months Ended
September 30,

Nine Months Ended
September 30,2003

2002

2003

2002(In millions)Employee compensation and benefits

$
513

$
669

$
2,084

$
2,540Other expenses


362


386


1,187


1,299Total expenses

$
875

$
1,055

$
3,271

$
3,839




Total expenses decreased $180 million, or 17%, to $875 million for the three months ended September 30, 2003. The decrease was principally
due to CSFB's reduced headcount, continuing cost reduction efforts, the effect of the change in vesting for stock awards and substantial completion of retention award payments.

Employee
compensation and benefits declined 23% for the three months ended September 30, 2003 due to reduced headcount, resulting in lower salaries and incentive compensation, and
the effect of the change in vesting for stock awards. As a result of the change in vesting, the Company's accrued compensation expense of $85 million recorded in the first half of 2003 related
to restricted stock awards expected to be granted in January 2004 was reversed, and compensation expense during the third quarter was significantly reduced compared to prior periods. The
reversal of the first half accrual was more than offset by an incentive compensation accrual. The declines were partially offset by increases in deferred compensation tied to certain equity indices,
which increased in the third quarter of 2003, and certain compensation tied to CSFB's return on equity.

40

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Other expenses principally consist of occupancy and equipment rental; brokerage, clearing and exchange fees; communications; professional fees and merger-related costs. Other expenses
decreased 6% for the three months ended September 30, 2003 compared to the three months ended September 30, 2002, primarily as a result of decreased merger-related costs, with retention
awards substantially completed in the second quarter of 2003, partially offset by increases in other operating expenses related to increased litigation provisions.



Total expenses decreased $568 million, or 15%, to $3.3 billion for the nine months ended September 30, 2003. The decrease was principally due
to CSFB's reduced headcount, continuing cost reduction efforts, substantial completion of retention awards, the effect of the change in vesting for stock awards, consolidation of office facilities and
the impact of the sale of the three broker-dealers in 2002.

Employee
compensation and benefits declined 18% for the nine months ended September 30, 2003 due to reduced headcount resulting in lower salaries and incentive compensation and
the effect of the change in vesting for stock awards. The declines were partially offset by increases in deferred compensation tied to certain equity indices, which increased during 2003, and certain
compensation tied to CSFB's return on equity.

Other
expenses decreased 9% for the nine months ended September 30, 2003 compared to the nine months ended September 30, 2002, primarily as a result of reduced headcount,
the sale of the CSFBdirect, DLJdirect, and Autranet businesses during the first quarter of 2002, reduced
merger-related costs with retention awards substantially completed in the second quarter of 2003 and the consolidation of office facilities. These reductions were partially offset by increases in
professional fees.

Provision for Income Taxes

The provision (benefit) for income taxes from continuing operations for the three months ended September 30, 2003 and 2002 were $68 million and
$(129) million, respectively. The provision for income taxes from continuing operations for the nine months ended September 30, 2003 and 2002 were $129 million and
$142 million, respectively. Excluded from the provision for income taxes for the nine
months ended September 30, 2003 and 2002 was a provision of $485 million and $35 million, respectively, from discontinued operations.

The
effective tax rate for continuing operations changed to 30.4% for the three months ended September 30, 2003 from 35.0% for the three months ended September 30, 2002.
The change in the effective tax rate was primarily due to the effects of tax-exempt income recognized in the third quarter of 2003.

The
effective tax rate for continuing operations changed to 27.3% for the nine months ended September 30, 2003 from 35.0% for the nine months ended September 30, 2002. The
change in the effective tax rate was primarily due to certain nonrecurring compensation-related tax benefits recognized in the second quarter of 2003.

LIQUIDITY AND CAPITAL RESOURCES

Liquidity Management Oversight

We believe that maintaining access to liquidity is fundamental for firms operating in the financial services industry. We have therefore established a
comprehensive process for the management and oversight of our liquidity, funding and capital strategies. CSFB's Capital Allocation and Risk Management Committee, or CARMC, has primary oversight
responsibility for these functional disciplines. CARMC periodically reviews and approves our liquidity management policies and targets

41

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and
reviews our liquidity position and other key risk indicators. The Corporate Treasury department is responsible for the management of liquidity, long-term funding, certain
short-term funding and capital, as well as relationships with creditor banks and investors. It also maintains regular contact with rating agencies and regulators on liquidity and capital
issues.

See
"Liquidity Risk" in "BusinessCertain Factors That May Affect Our Results of Operations" in our Annual Report on Form 10-K for the year ended
December 31, 2002.

Balance Sheet

Significant portions of our assets are highly liquid, with the majority consisting of securities inventories and collateralized receivables, which fluctuate
depending on the levels of proprietary trading and customer business. Collateralized receivables consist primarily of securities purchased under agreements to resell and securities borrowed, both of
which are primarily secured by U.S. government and agency securities and marketable corporate debt and equity securities. In addition, we have significant receivables from customers, brokers, dealers
and others that turn over frequently. To meet client needs as a securities dealer, we carry significant levels of trading inventories.

In
addition to these liquid assets, as part of our investment banking and fixed income markets activities, we also maintain positions in less liquid assets, such as certain mortgage
whole loans, distressed securities, high-yield debt securities, asset-backed securities and private equity investments. These assets may be relatively illiquid at times, especially during
periods of market stress. We typically fund a significant portion of less liquid assets, such as private equity investments, with long-term borrowings and stockholders' equity. Mortgage
whole loans, distressed securities, high-yield debt and asset-backed securities are generally financed with short-term unsecured financing or repurchase agreements, as well as
long-term borrowings and stockholders' equity.

Because
of changes relating to customer needs, economic and market conditions and proprietary trading and other strategies, our total assets or the individual components of total assets
may vary significantly from period to period. As of September 30, 2003 and December 31, 2002, our total assets were $241.0 billion and $236.1 billion, respectively.

Included
below is a discussion of our long-term contractual obligations, off-balance sheet arrangements and less liquid assets.

Funding Sources and Strategy

The majority of our assets are funded by collateralized short-term borrowings, which include securities sold under agreements to repurchase and
securities loaned. Other significant funding sources include commercial paper, short-term borrowings from affiliates, payables to customers, brokers, dealers and others,
long-term borrowings and stockholders' equity. Short-term funding is generally obtained at rates related to the federal funds rate, LIBOR or other money market indices, while
long-term funding is generally obtained at fixed and floating rates related to U.S. Treasury securities or LIBOR, depending upon prevailing market conditions. We continually aim to broaden
our funding base by geography, investor and funding instrument.

The
majority of our unsecured funding originates largely from two sources: we borrow from affiliates (principally Credit Suisse First Boston, a Swiss bank and our indirect parent) and we
issue debt securities directly to the market. We lend funds as needed to our operating subsidiaries and affiliates on both a senior and subordinated basis, the latter typically to meet capital
requirements of regulated subsidiaries. We generally try to ensure that loans to our operating subsidiaries and affiliates have maturities equal to or shorter than the maturities of our market
borrowings.

42

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Liquidity Planning and Measurement

We maintain a large secondary source of liquidity, principally through our broker-dealers and various other operating subsidiaries. We have historically been able
to access significant liquidity through the secured funding markets (securities sold under agreements to repurchase, securities loaned and other collateralized financing arrangements), even in periods
of market stress. We continually monitor overall liquidity by tracking the extent to which unencumbered marketable assets and alternative unsecured funding sources exceed both contractual obligations
and anticipated contingent commitments.

The
principal measure we use to monitor our liquidity position is the "liquidity barometer," which estimates the time period over which the adjusted market value of unencumbered assets
plus committed revolving credit facilities exceeds the aggregate value of our maturing unsecured liabilities plus anticipated contingent commitments. The adjusted market value of unencumbered assets
includes a reduction from market value, or "haircut," reflecting the amount that could be realized by pledging an asset as collateral to a third-party lender in a secured funding transaction.
Contingent commitments include letters of credit, commitments to invest in private equity funds and collateralization requirements related to credit ratings. Our objective, as mandated by CARMC, is to
ensure that the liquidity barometer equals or exceeds one year. We believe this will enable us to carry out our business plans during extended periods of market stress, while minimizing, to the extent
possible, disruptions to our business.

Contractual Obligations

We have contractual obligations to make future payments under long-term debt, long-term non-cancelable lease agreements and
other long-term obligations. The following table sets forth future cash payments on our contractual obligations pursuant to long-term borrowings and operating leases as of
September 30, 2003:

Contractual Obligations
Expiration Per PeriodLess than 1
year

1-3
years

4-5
years

Over
5 years

Total(In millions)Long-term borrowings

$
2,065

$
6,913

$
5,841

$
9,197

$
24,016Operating leases


200


351


333


1,607


2,491Total contractual obligations

$
2,265

$
7,264

$
6,174

$
10,804

$
26,507


Our
long-term borrowings are unsecured. As of September 30, 2003, the weighted average maturity of our long-term borrowings was approximately
5.6 years. Our lease obligations are primarily for our principal offices in New York City and other locations. The operating lease obligations in the table above do not include
$499 million in sublease revenue.

We
have contractual obligations related to certain information technology, equipment leases and software licenses. As of September 30, 2003, these obligations were not
significant. We had no capital lease obligations as of September 30, 2003.

For
information on these and other material commitments, see Notes 7, 8, 12 and 13 of the condensed consolidated financial statements in Part I, Item 1.

43

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The
following table sets forth our short-term unsecured borrowings:

September 30,
2003

December 31,
2002(In millions)Bank loans

$
467

$
76Commercial paper(1)


873


2,082Loans from affiliates(2)


13,867


9,775Total

$
15,207

$
11,933


---

Revolving Credit Facilities

We maintain a 364-day $1.0 billion committed revolving credit facility with a syndicate of banks available to us as borrower. This facility,
which is guaranteed by CSG, extends through May 2004. Our principal wholly owned broker-dealer subsidiary, CSFB LLC, maintains a 364-day $200 million committed secured
revolving credit facility, extending through August 2004, with an unaffiliated bank. The secured facility requires CSFB LLC to pledge unencumbered marketable securities if the facility is drawn
upon. Borrowings under each facility would bear interest at short-term rates related to either the federal funds rate or LIBOR and can be used for general corporate purposes. Both
facilities contain customary covenants that we believe will not impair our ability to obtain funding. As of September 30, 2003, no borrowings were outstanding under either facility.

Long-term Funding

We issue long-term debt through U.S. and Euromarket medium-term note programs, as well as syndicated and privately placed offerings around
the world.

Under
our currently effective $10.0 billion shelf registration statement on file with the SEC, which allows us to issue from time to time senior and subordinated debt securities
and warrants to purchase such securities, we had at November 7, 2003 approximately $4.5 billion available for issuance.

For
the nine months ended September 30, 2003, we issued $1.2 billion in medium-term notes, $1.0 billion of 5.5% notes due 2013 and $300 million of
6.125% notes due 2011 under our $10.0 billion shelf registration statement and $1.5 billion in medium-term notes under a $5.0 billion Euromarket program established in
July 2001.

During
the nine months ended September 30, 2003, we repaid approximately $3.1 billion of medium-term notes and $23 million of structured notes.

Credit Ratings

Our access to the debt capital markets and our borrowing costs depend significantly on our credit ratings. These ratings are assigned by agencies, which may
raise, lower or withdraw their ratings or place us on "creditwatch" with positive or negative implications at any time. Credit ratings are important to us when competing in certain markets and when
seeking to engage in longer-term transactions, including OTC derivatives. We believe agencies consider several factors in determining our credit ratings, including earnings performance,
business mix, market position, financial strategy, level of capital, risk management policies and practices and management team, in addition to the broader outlook for the financial services industry.

44

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A
reduction in our credit ratings could limit our access to capital markets, increase our borrowing costs, require us to provide additional collateral and allow counterparties to
terminate transactions under certain of our trading and collateralized financing contracts. This, in turn, could reduce our liquidity and negatively impact our operating results and financial
position. Our liquidity planning takes into consideration those contingent events associated with a reduction in our credit ratings.

At
November 7, 2003, our ratings and ratings outlooks were as follows:

Long-Term
Debt

Commercial
Paper

OutlookFitch

AA-

F-1+

Negative outlookMoody's

Aa3

P-1

Negative outlookStandard & Poor's

A+

A-1

Stable


Capital Resources

Certain of our businesses are capital intensive. In addition to normal operating requirements, capital is required to cover financing and regulatory capital
charges on securities inventories, private equity investments and investments in fixed assets. Our overall capital needs are regularly reviewed to ensure that our capital base can appropriately
support the anticipated needs of our business and the capital requirements (regulatory and other) of our subsidiaries. Based upon these analyses, we believe that our capitalization is adequate for
current operating levels.



Our principal wholly owned subsidiary, CSFB LLC, is a registered broker-dealer, registered futures commission merchant and member firm of the New York Stock
Exchange Inc., or NYSE. As such, it is subject to the NYSE's net capital rule, which conforms to the uniform net capital rule pursuant to Rule 15c3-1 of the Securities
Exchange Act of 1934, as amended, or the Exchange Act. Under the alternative method permitted by this rule, the required net capital may not be less than two percent of aggregate debit balances
arising from customer transactions or four percent of segregated funds, whichever is greater. If a member firm's capital is less than four percent of aggregate debit balances, the NYSE may require the
firm to reduce its business. If a member firm's net capital is less than five percent of aggregate debit balances, the NYSE may prevent the firm from expanding its business and declaring cash
dividends. As of September 30, 2003, CSFB LLC's net capital of
approximately $2.6 billion was 35% of aggregate debit balances and in excess of the minimum requirement by approximately $2.5 billion. Our OTC derivatives dealer subsidiary, Credit
Suisse First Boston Capital LLC, is also subject to the uniform net capital rule, but calculates its net capital requirements under Appendix F to Rule 15c3-1.

Certain
other of our subsidiaries are subject to capital adequacy requirements. As of September 30, 2003, our subsidiaries complied with all applicable regulatory capital adequacy
requirements.

Cash Flows

Our condensed consolidated statements of cash flows classify cash flows into three broad categories: cash flows from operating activities, investing activities
and financing activities. These statements should be read in conjunction with "Related Party Transactions" as well as Notes 3 and 5 of the condensed consolidated financial statements in
Part I, Item 1.



Cash and cash equivalents decreased by $25 million from December 31, 2002 to $455 million as of September 30, 2003. Cash provided by
operating activities was $2.1 billion, reflecting net increases in

45

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operating
assets of $14.5 billion and net increases in operating liabilities of $16.2 billion. These changes occurred in the normal course of operations as a result of changes in
customer needs, market conditions and proprietary trading and other strategies.

Cash
provided by investing activities was $656 million. We provided additional funding of $1.3 billion to our affiliates. We received $2.0 billion in cash as a
result of the Pershing sale.

Cash
used in financing activities was $2.7 billion, reflecting a decrease in net proceeds from financing arrangements of $7.0 billion and repayment of $3.1 billion
in long-term borrowings. These decreases were partially offset by increases in short-term and long-term borrowings of $3.3 billion and $4.1 million,
respectively. We used cash provided by operating and investing activities to meet our financing needs.



Cash and cash equivalents decreased by $251 million from December 31, 2001 to $1.5 billion as of September 30, 2002. Cash used in
operating activities was $2.6 billion. The change in cash used in operating activities is primarily from net decreases in operating assets of $3.9 billion and net decreases in operating
liabilities of $7.0 billion, which occurred in the normal course of operations as a result of changes in customer needs, market conditions and proprietary trading and other strategies.

Cash
used in investing activities was $10.2 billion, reflecting the fact that we provided funding to CSFBI, resulting in increases in receivables from affiliates of
$10.7 billion. We received $674 million as a result of the sale of three of our broker-dealer subsidiaries.

Cash
provided by financing activities was $12.5 billion, reflecting increases in net proceeds from financing arrangements of $4.6 billion, short-term borrowings
of $1.1 billion and $9.0 billion of long-term borrowings. We also repaid $2.2 billion in long-term borrowings. The amount provided was used to fund our
operating and investing activities.

OFF-BALANCE SHEET ARRANGEMENTS

We enter into off-balance sheet arrangements in the ordinary course of business. Off-balance sheet arrangements are transactions,
agreements or other contractual arrangements with or for the benefit of an entity that is not consolidated with us, and which include guarantees and similar arrangements, retained or contingent
interests in assets transferred to an unconsolidated entity, and obligations and liabilities (including contingent obligations and liabilities) under material variable interests in unconsolidated
entities for the purpose of providing financing, liquidity, market risk or credit risk support.

We
have not entered into any derivatives contracts indexed or linked to the stock of CSG.

Guarantees

In the ordinary course of our business, we provide guarantees and indemnifications that contingently obligate us to make payments to the guaranteed or indemnified
party based on changes in an asset, liability or equity security of the guaranteed or indemnified party. We may also be contingently obligated to make payments to a guaranteed party based on another
entity's failure to perform, or we may have an indirect guarantee of the indebtedness of others. Guarantees we provide include customary indemnifications to purchasers in conjunction with the sale of
assets or businesses; to investors in private equity funds sponsored by the firm regarding potential obligations of its employees to return amounts previously paid as carried interest; and to
investors in our securities and other arrangements to provide "gross up" payments if there is a withholding or deduction because of a tax assessment or other governmental charge. From time to time, we
also guarantee the obligations of subsidiaries of CSG that are not our consolidated subsidiaries, and these guarantees are included in the

46

---

scope
of the disclosure requirements of Financial Accounting Standards Board, or FASB, Interpretation, or FIN, No. 45, "Guarantor's Accounting and Disclosure Requirements for Guarantees,
Including Indirect Guarantees of Indebtedness of Others," or FIN 45.

FIN
45 requires disclosure of our maximum potential payment obligations under certain guarantees to the extent that it is possible to estimate them and requires recognition of a
liability for the fair value of guaranteed obligations for guarantees issued or amended after December 31, 2002. The recognition of these liabilities did not have a material effect on our
financial position or results of operations. See Note 13 of the condensed consolidated financial statements in Part I, Item 1.

Retained or Contingent Interests in Assets Transferred to Unconsolidated Entities

We originate and purchase commercial mortgages and purchase residential mortgages and sell these assets directly or through affiliates to special purpose entities
that are, in most cases, qualified special purpose entities, or QSPEs. These QSPEs issue securities that are backed by the assets transferred to the QSPEs and pay a return based on the returns on
those assets. Investors in these mortgage-backed securities typically have recourse to the assets in the QSPE. The investors and the QSPEs have no recourse to our assets.

These
QSPEs are set up by our subsidiaries. Our principal broker-dealer subsidiary, CSFB LLC, underwrites and makes markets in these mortgage-backed securities. Under SFAS
No. 140, "Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities, a replacement of FASB Statement No. 125," or SFAS 140, a QSPE is not
required to be consolidated with the transferor. Our mortgage-backed securitization activities are generally structured to use QSPEs, and therefore the assets and liabilities transferred to QSPEs are
not included in our financial statements.

We
may retain interests in these securitized assets if CSFB LLC holds the assets in connection with its underwriting or market-making activities. Retained interests in securitized
financial assets are included at fair value in the condensed consolidated statements of financial condition. Any changes in the fair value of these retained interests are recognized in the condensed
consolidated statements of income. We engage in these securitization activities to meet the needs of clients as part of our fixed income activities and to sell financial assets. These securitization
activities do not provide a material source of our funding. See Note 6 of the condensed consolidated financial statements in Part I, Item 1.

Variable Interest Entities

We are involved with various entities in the normal course of business that may be deemed to be variable interest entities, or VIEs, including VIEs that issue
collateralized debt obligations, or CDOs.

We
purchase loans and other debt obligations from and on behalf of clients for the purpose of securitization. The loans and other debt obligations are transferred by us directly, or
indirectly through affiliates, to QSPEs or to VIEs that issue CDOs. CSFB LLC structures, underwrites and makes a market in these CDOs, and we may have retained interests in these CDOs in connection
with CSFB LLC's underwriting and market-making activities. We engage in these CDO transactions to meet the needs of clients.

FIN
No. 46, "Consolidation of Variable Interest Entities," an Interpretation of Accounting Research Bulletin No. 51, "Consolidated Financial Statements," requires us to
consolidate CDO VIEs created after January 31, 2003 for which we are the primary beneficiary, defined as the entity that will absorb a majority of expected losses, receive a majority of the
expected residual returns, or both. We also have interests in CDO VIEs that are not required to be consolidated because we are not the primary beneficiary. See Note 6 of the condensed
consolidated financial statements in Part I, Item 1.

47

---

OTHER COMMITMENTS

We have commitments under a variety of commercial arrangements that are not recorded as liabilities in our condensed consolidated statements of financial
condition. These commitments are in addition to guarantees and other arrangements discussed in "Off-Balance Sheet Arrangements." These commitments include standby letters of
credit, standby repurchase agreement facilities that commit us to enter into reverse repurchase agreements with customers at market rates, commitments to invest in various partnerships that make
private equity and related investments in
various portfolio companies and in other private equity funds and forward commitments to enter into reverse repurchase agreements. See Note 12 of the condensed consolidated financial statements
in Part I, Item 1.

RELATED PARTY TRANSACTIONS

CSG, through CSFBI, owns all of our outstanding voting common stock. We are involved in significant financing and other transactions, and have significant related
party balances, with Credit Suisse First Boston and certain affiliates. We generally enter into these transactions in the ordinary course of business and believe that these transactions are on market
terms that could be obtained from unrelated third parties. See "Derivatives" and Notes 5 and 13 of the condensed consolidated financial statements in Part I, Item 1 for more
information.

LESS LIQUID ASSETS

Certain of our assets, including private equity and other long-term investments, distressed securities, high-yield debt, mortgage whole
loans and other non-investment-grade debt, are not highly liquid.

Private Equity Activities

Our private equity and other long-term investment activities include direct investments and investments in partnerships that make private equity and
related investments in various portfolio companies and funds. These investments are primarily in unlisted or illiquid equity or equity-related securities and are carried at estimated fair value based
on a number of factors. See "BusinessProducts and ServicesInvestment BankingPrivate Equity" in our Annual Report on Form 10-K for the year
ended December 31, 2002 and "Critical Accounting PoliciesFair Value" in Part I, Item 2 for more information. As of both September 30, 2003 and
December 31, 2002, we had investments in private equity and other long-term investments of $1.0 billion and we had commitments to invest up to an additional
$1.4 billion and $1.7 billion as of September 30, 2003 and December 31, 2002, respectively.

High-Yield Debt, Mortgage Whole Loans and Other Non-Investment-Grade Financial Instruments

We underwrite, trade and hold high-yield debt, mortgage whole loans, loan participations, distressed financial instruments and other
non-investment-grade financial instruments. Due to credit considerations, liquidity of secondary trading markets and vulnerability to general economic conditions, these financial
instruments and loans generally involve greater risk than investment-grade financial instruments. We record high-yield debt, residential mortgage whole loans, distressed financial
instruments and other non-investment-grade financial instruments at fair value, with the exception of certain residential mortgage whole loans that are held for sale and are carried at the
lower of cost or fair value. We record commercial mortgage whole loans held for sale and loan participations at the lower of cost or fair value. Timing of the securitization of our mortgage whole loan
inventory will affect

48

---

the
size of our positions at any given time. The following table sets forth our positions in these instruments as of September 30, 2003 and December 31, 2002:

September 30, 2003

December 31, 2002Long

Short

Long

Short(In millions)High-yield debt

$
1,358

$
629

$
1,620

$
691Mortgage whole loans


10,046





9,465


Loan participations


143





126


Distressed financial instruments


183





208


Other non-investment-grade financial instruments


12





22


Total

$
11,742

$
629

$
11,441

$
691


DERIVATIVES

We enter into various transactions involving derivatives. We use derivatives contracts for both trading and hedging purposes and to provide products for our
clients. These derivatives include options, forwards and swaps. In general, derivatives are contractual agreements that derive their values from the performance of underlying assets, interest or
currency exchange rates or a variety of indices. Most of our derivatives transactions are considered trading positions. See Note 11 of the condensed consolidated financial statements in
Part I, Item 1 for more information.

Sources and Maturities of OTC Derivatives

The following table sets forth the distributions, by maturity, of substantially all of our exposure with respect to OTC derivatives as of September 30,
2003, after taking into account the effect of netting agreements. Fair values were determined on the basis of pricing models and other valuation methods. See Note 11 of the condensed
consolidated financial statements in Part I, Item 1 and "Critical Accounting PoliciesFair Value" for more information.

Assets
Maturity Distribution as of September 30, 2003Less than
1 year

1-3 years

4-5 years

Over 5 years

Total fair
value(In millions)Options

$
145

$
218

$
31

$
19

$
413Forward contracts


2,367


21





162


2,550Swaps


343


696


290


1,257


2,586Total

$
2,855

$
935

$
321

$
1,438

$
5,549


Liabilities
Maturity Distribution as of September 30, 2003Less than
1 year

1-3 years

4-5 years

Over 5 years

Total fair
value(In millions)Options

$
119

$
363

$
6

$
16

$
504Forward contracts


2,633


14


50


64


2,761Swaps


160


457


81


455


1,153Total

$
2,912

$
834

$
137

$
535

$
4,418


49

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The following table sets forth as of September 30, 2003 substantially all of our exposure with respect to OTC derivatives, by counterparty credit rating and with affiliates, after
taking into account the effect of netting agreements.

|Credit Rating(1)            |       | September 30,
2003
|--------------------------- | ----- | ------------------
|
|AAA                         |       | $                 
|AA+/AA                      |       |                   
|AA-                         |       |                   
|A+/A/A-                     |       |                   
|BBB+/BBB/BBB-               |       |                   
|BB+ or lower                |       |                   
|Unrated                     |       |                   
|Derivatives with affiliates |       |                   
|                            |       |                   
|                            | Total |                   
|                            |       |                   

---

Derivatives With Related Parties

We enter into a substantial number of derivatives transactions with related parties. The following table sets forth derivatives transactions with related parties
consisting primarily of interest rate swaps, credit default swaps and foreign exchange forward contracts. The fair values of derivatives contracts outstanding with related parties as of
September 30, 2003 and December 31, 2002 were as follows:

|                  |       | September 30, 2003 |       | December 31, 2002
|----------------- | ----- | ------------------ | ----- | -----------------
|
|
|Options           |       | $                  | 121   |                  
|Forward contracts |       |                    | 4     |                  
|Swaps             |       |                    | 2,170 |                  
|                  |       |                    |       |                  
|                  | Total |                    | $     | 2,295            
|                  |       |                    |       |                  

ITEM 3: Quantitative and Qualitative Disclosures About Market Risk

RISK MANAGEMENT AND VALUE AT RISK

For a description of the Company's risk management policies and procedures and value-at-risk, or VAR, model, including such model's
assumptions and limitations, see "Quantitative and Qualitative Disclosure About Market Risk" in Part II, Item 7A of the Company's Annual Report on Form 10-K for the year
ended December 31, 2002.

MARKET RISK EXPOSURES

Trading Portfolios

The Company-wide trading portfolio VAR was approximately $36 million and $41 million as of September 30, 2003 and
December 31, 2002, respectively. In the third quarter of 2003, the Company introduced a refined risk methodology for mortgages, which, combined with lower interest rate positions, led to a
decrease in the Company-wide trading portfolio VAR compared with the second quarter of 2003.

50

---

Due
to the benefit of diversification, the Company-wide VAR is less than the sum of the individual components. The two main components of market risk, expressed in terms of
theoretical fair values, had the following VAR:

Company's Market Risk Exposures in Trading Portfolios (Unaudited)

|                  |                            | September 30,
2003 |   | December 31,
2002 |   
|----------------- | -------------------------- | ------------------ | - | ----------------- | --
|
|99%, one-day VAR: |                            |                    |   |                   |   
|                  | Interest rate risk         |                    | $ | 33                |   
|                  | Equity risk                |                    |   | 11                |   
|                  | Benefit of diversification |                    |   | (8                | ) 
|                  |                            |                    |   |                   |   
|                  |                            | Total              |   | $                 | 36
|                  |                            |                    |   |                   |   

The
average, maximum and minimum daily trading revenue during 2003 is shown below:

|                       |         | Three months ended
September 30,
2003 |   | Three months ended
June 30,
2003 |   | Three months ended
March 31,
2003 |    
|---------------------- | ------- | ------------------------------------- | - | -------------------------------- | - | --------------------------------- | ---
|
|Daily trading revenue: |         |                                       |   |                                  |   |                                   |    
|                       | Average |                                       | $ | 8                                |   | $                                 | 18 
|                       | Maximum |                                       |   | 40                               |   |                                   | 112
|                       | Minimum |                                       | $ | (41                              | ) | $                                 | (39

Non-trading Portfolios

We measure equity risk on non-trading positions using a sensitivity analysis that estimates the potential change in the recorded value of the
investments resulting from a 10% decline in the equity markets of G-21 nations and a 20% decline in the equity markets of non-G-21 nations. The estimated impact of
equity risk on our non-trading financial instruments portfolio, which is mainly comprised of our private equity investments, would be a decrease in the value of the non-trading
portfolio of approximately $91 million and $96 million as of September 30, 2003 and December 31, 2002, respectively.

The
interest rate risk on non-trading positions is measured using a sensitivity analysis that estimates the potential change in the value of the non-trading
portfolio resulting from a 50 basis points decline in the interest rates of G-21 nations and a 200 basis points decline in the interest rates of non-G-21 nations.
Due to the current low levels of U.S. interest rates, the calculation of non-trading portfolio interest rate risk was changed from a 100 basis points decline to a 50 basis points decline
in interest rates for G-21 nations during the second quarter of 2003. The estimated impact of interest rate risk on pre-tax net income would be a decrease of approximately
$10 million and an increase of approximately $28 million as of September 30, 2003 and December 31, 2002, respectively.

The
foreign currency exchange risk on non-trading positions is measured using a sensitivity analysis that estimates the potential change in the value of the
non-trading portfolio resulting from a 10% strengthening of the U.S. dollar against G-21 currencies and a 20% strengthening of the U.S. dollar against
non-G-21 currencies.

We
do not have material foreign currency exchange or commodity price risks on our trading and non-trading portfolios.

51

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ITEM 4: Controls and Procedures

As of the end of the period covered by this report, an evaluation was carried out under the supervision and with the participation of our management, including
our Chief Executive Officer and Chief Financial and Accounting Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. There are inherent limitations to
the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even
effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives. Based upon and as of the date of the evaluation, our Chief Executive Officer
and Chief Financial and Accounting Officer concluded that the design and operation of these disclosure controls and procedures were effective in all material respects to provide reasonable assurance
that information required to be disclosed in the reports we file and submit under the Exchange Act is recorded, processed, summarized and reported as and when required. There were no changes in our
internal control over financial reporting that occurred during the quarter ended September 30, 2003 that materially affected, or are reasonably likely to materially affect, our internal control
over financial reporting.

52

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PART II  OTHER INFORMATION

ITEM 1: Legal Proceedings

Certain significant legal proceedings and matters have been previously disclosed in the Company's Annual Report on Form 10-K for the year ended
December 31, 2002 and Form 10-Q for the three months ended March 31, 2003 and June 30, 2003. The following is an update of such proceedings.

Governmental/Regulatory Inquiries Relating to IPO Allocation/Research-related Practices

On October 31, 2003, the U.S. District Court for the Southern District of New York approved the global settlement among CSFB and other Wall Street firms
and a coalition of state and federal regulators and self-regulatory organizations.

Litigation Relating to IPO Allocation and Research-related Practices

IPO Allocation-related Litigation

On September 12, 2003, the Company filed a motion to dismiss the action brought in the U.S. District Court for the Southern District of New York on behalf
of a putative class of issuers in IPOs for which Donaldson, Lufkin & Jenrette Securities Corporation acted as lead underwriter.

On
November 3, 2003, the U.S. District Court for the Southern District of New York granted the motion to dismiss filed by CSFB LLC and the other defendants in the action alleging
violations of the federal and state antitrust laws in connection with alleged IPO allocations practices. The court dismissed the action with prejudice as to all defendants.

Research-related Litigation

Plaintiffs have filed a notice of appeal from the court's dismissal, with prejudice, of the actions relating to Covad Communications Co., consolidated in the U.S.
District Court for the Southern District of New York. The actions were dismissed on June 30, 2003.

Enron-related Litigation and Inquiries

On July 11, 2003, the court issued a scheduling order setting theNewby v. Enron Corp., et al.and Tittle, et
al. v. Enron Corp., et al.cases for trial in October 2005. The cases are now proceeding into discovery. A motion by CSFB to dismiss
the complaint inTittlewas granted in full on September 30, 2003, thereby dismissing the action in its entirety as to CSFB.

Additional
actions have been filed in various U.S. federal and state courts against CSFB and/or certain CSFB affiliates, along with other parties, including, in addition to matters
previously disclosed, (i) a putative class action on behalf of persons who purchased Enron common stock prior to October 16, 1998, and held such stock through and including
November 27, 2001, for alleged negligent misrepresentation, common law fraud and aiding and abetting breach of fiduciary duty under Illinois law; and (ii) a complaint by an institutional
investor for alleged conspiracy under Texas law. The existing actions filed by CalPERS, The Retirement Systems of Alabama, and the individual purchaser of various Enron notes have been coordinated or
consolidated withNewby.

The
bankruptcy examiner in Enron's Chapter 11 petition is expected to file his report concerning CSFB (and presumably other entities) in the fourth quarter of this year.

Certain
of the state court plaintiffs with claims against CSFB have been added to the mediation that had been ordered on May 28, 2003. That mediation commenced on
September 29, 2003 and is scheduled to continue into 2004.

53

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Independent Energy Holdings PLC Litigation

After a hearing on September 3, 2003, the stipulation of settlement executed by the DLJ entities, the lead plaintiffs and the remaining parties was given
final approval by the court on September 26, 2003. All claims asserted against the DLJ entities in this case have now been resolved.

NCFE-related Litigation

On October 9, 2003, a hearing was held on the motion to consolidate all the NCFE-related lawsuits. A decision by the Judicial Panel on
Multidistrict Litigation is pending.

U.K. Insurance Litigation

On August 7, 2003, a syndicate of insurance companies filed Consolidated Particulars of Claims against CSG, CSFB LLC and the Company in the London
Commercial Court alleging that certain excess liability insurance policies provided to these entities should be invalidated. The CSG entities are currently scheduled to respond to the claims at the
end of November 2003.

We
are involved in a number of judicial, regulatory and arbitration proceedings (including those described above and actions that have been separately described in previous filings)
concerning matters arising in connection with the conduct of our businesses. Some of the actions have been brought on behalf of various classes of claimants and, unless otherwise specified, seek
damages of material and/or indeterminate amounts. We believe, based on currently available information and advice of counsel, that the results of such proceedings, in the aggregate, will not have a
material adverse effect on our financial condition but might be material to operating results for any particular period, depending in part upon the operating results for such period. We intend to
defend ourselves vigorously against all of the claims asserted in these matters.

ITEMS 2, 3 and 4:

Pursuant to General Instruction H of Form 10-Q, the information required by Items 2, 3 and 4 is omitted.

ITEM 5: Other Information

We have made in this Quarterly Report on Form 10-Q, including, without limitation, in "Legal Proceedings" in Part II, Item 1, and in
"Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part I, Item 2, and from time to time may otherwise make in our public filings and press releases,
forward-looking statements concerning our operations, economic performance and financial condition, as well as our future plans and strategic objectives. Such forward-looking statements are subject to
various risks and uncertainties, and we claim the protection afforded by the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Actual
results could differ materially from those anticipated herein or in any such other filings, releases or statements because of a number of factors, including without limitation, those detailed in
"BusinessCertain Factors That May Affect Our Results of Operations" in Part I, Item 1 of our Annual Report on Form 10-K for the year ended December 31,
2002, those discussed elsewhere herein, and in other public filings and press releases. These forward-looking statements are not historical facts but instead represent only our belief regarding future
events, many of which, by their nature, are inherently uncertain and beyond our control. Forward-looking statements are typically identified by the use of future or conditional verbs such as "will,"
"should," "would" or "could," and by words or phrases such as "believe," "expect," "intend," "estimate" and similar expressions. By identifying these statements for you in this manner, we are alerting
you to the possibility that our actual results may differ, possibly materially, from the results indicated in these forward-looking statements. We undertake

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no
obligation to update or revise any forward-looking statements except as otherwise required by applicable law.

ITEM 6: Exhibits and Reports on Form 8-K

(a)

Exhibits12

Statement re computation of ratio of earnings to fixed charges15

Letter re unaudited interim financial information31.1

Rule 13a-14(a) certification of Chief Executive Officer31.2

Rule 13a-14(a) certification of Chief Financial and Accounting Officer32

Section 1350 certifications(b)

Reports on Form 8-K1.    Form 8-K dated August 5, 2003; Item 52.    Form 8-K dated September 30, 2003; Item 73.    Form 8-K dated November 4, 2003; Item 5


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Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.

|                  |  | CREDIT SUISSE FIRST BOSTON (USA), INC.
|----------------- |  | --------------------------------------
|November 10, 2003 |  | By:                                   

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INDEX TO EXHIBITS

|Exhibit No. |  | Description                                                           
|----------- |  | ----------------------------------------------------------------------
|12          |  | Statement re computation of ratio of earnings to fixed charges        
|15          |  | Letter re unaudited interim financial information                     
|31.1        |  | Rule 13a-14(a) certification of Chief Executive Officer               
|31.2        |  | Rule 13a-14(a) certification of Chief Financial and Accounting Officer
|32          |  | Section 1350 certifications                                           

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