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SECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549

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FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

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For the six months ended June 30, 2001 Commission File Number: 1-6862

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

Delaware

13-1898818(State or other jurisdiction of
incorporation or organization)

(I.R.S. employer identification no.)Eleven Madison Avenue

10010New York, N.Y.

(Zip Code)(Address of principal executive offices)


(212) 325-2000(Registrant's telephone number, including area code)

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 /x/ No / /

As
of August 10, 2001, there were 18,400,000 shares of non-voting common stock of the registrant, $0.10 par value
("CSFBdirectCommon Stock"), outstanding. As of August 10, the aggregate market value of the
CSFBdirectCommon Stock held by non-affiliates of the registrant was approximately $109.7 million. All of the outstanding shares of
voting 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 Six Months Ended June 30, 2001

|        |  |                       |  |                                                                                                                                                              |  | Number
Page
|------- |  | --------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | -----------
|PART I  |  | FINANCIAL INFORMATION
|        |  | Item 1.               |  | Financial Statements                                                                                                                                         |  |            
|        |  |                       |  | Credit Suisse First Boston (USA), Inc. Consolidated Financial Statements                                                                                     |  |            
|        |  |                       |  | Condensed Consolidated Statements of Financial Condition at June 30, 2001 and December 31, 2000 (Unaudited)                                                  |  | 3          
|        |  |                       |  | Condensed Consolidated Statements of Income for the three and six months ended June 30, 2001 and 2000 (Unaudited)                                            |  | 5          
|        |  |                       |  | Condensed Consolidated Statements of Changes in Stockholders' Equity for the six months ended June 30, 2001 and the year ended December 31, 2000 (Unaudited) |  | 7          
|        |  |                       |  | Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2001 and 2000 (Unaudited)                                                  |  | 8          
|        |  |                       |  | Notes to Condensed Consolidated Financial Statements (Unaudited)                                                                                             |  | 10         
|        |  |                       |  | CSFBdirectCombined Financial Statements                                                                                                                      |  |            
|        |  |                       |  | Condensed Combined Statements of Financial Condition at June 30, 2001 and December 31, 2000 (Unaudited)                                                      |  | 38         
|        |  |                       |  | Condensed Combined Statements of Operations for the three and six months ended June 30, 2001 and 2000 (Unaudited)                                            |  | 39         
|        |  |                       |  | Condensed Combined Statements of Changes in Allocated Equity for the six months ended June 30, 2001 and the year ended December 31, 2000 (Unaudited)         |  | 40         
|        |  |                       |  | Condensed Combined Statements of Cash Flows for the six months ended June 30, 2001 and 2000 (Unaudited)                                                      |  | 41         
|        |  |                       |  | Notes to Condensed Combined Financial Statements (Unaudited)                                                                                                 |  | 42         
|        |  | Item 2.               |  | Management's Discussion and Analysis of Financial Condition and Results of Operations                                                                        |  |            
|        |  |                       |  | Credit Suisse First Boston (USA), Inc. Management's Discussion and Analysis of Financial Condition and Results of Operations                                 |  | 26         
|        |  |                       |  | CSFBdirectManagement's Discussion and Analysis of Financial Condition and Results of Operations                                                              |  | 46         
|        |  | Item 3.               |  | Quantitative and Qualitative Disclosures about Market Risk                                                                                                   |  | 34         
|        |  | Item 4.               |  | Submission of Matters to a Vote of Security Holders                                                                                                          |  | 35         
|Part II |  | OTHER INFORMATION    
|        |  | Item 1.               |  | Legal Proceedings                                                                                                                                            |  |            
|        |  |                       |  | Credit Suisse First Boston (USA), Inc                                                                                                                        |  | 36         
|        |  | Item 6.               |  | Exhibits and Reports on Form 8-K                                                                                                                             |  | 51         
|        |  | Signature             |  | 52                                                                                                                                                          

2

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

|                                                                                                                     |                                                                                                                       | June 30,
2001 |             | December 31,
2000
|-------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------- | ------------- | ----------- | -----------------
|ASSETS                                                                                                               |                                                                                                                       |               |            
|Cash and cash equivalents                                                                                            |                                                                                                                       | $             | 1,886,515   |                  
|Cash and securities segregated for regulatory purposes or deposited with clearing organizations                      |                                                                                                                       |               | 4,362,966   |                  
|Collateralized short-term agreements:                                                                                |                                                                                                                       |               |             |                  
|                                                                                                                     | Securities purchased under agreements to resell                                                                       |               |             | 37,019,938       
|                                                                                                                     | Securities borrowed                                                                                                   |               |             | 79,459,575       
|Receivables:                                                                                                         |                                                                                                                       |               |             |                  
|                                                                                                                     | Customers                                                                                                             |               |             | 8,676,504        
|                                                                                                                     | Brokers, dealers and other                                                                                            |               |             | 13,506,023       
|Note receivable from parent                                                                                          |                                                                                                                       |               |            |                  
|Financial instruments owned, at value:                                                                               |                                                                                                                       |               |             |                  
|                                                                                                                     | U.S. government and agencies (includes securities pledged as collateral of $24,666,171 and $14,272,177, respectively) |               |             | 27,750,707       
|                                                                                                                     | Corporate debt (includes securities pledged as collateral of $11,299,765 and $6,074,305, respectively)                |               |             | 14,258,978       
|                                                                                                                     | Foreign sovereign debt                                                                                                |               |             | 63,203           
|                                                                                                                     | Mortgage whole loans (includes securities pledged as collateral of $6,753,732 and $4,136,383, respectively)           |               |             | 9,452,508        
|                                                                                                                     | Equities (includes securities pledged as collateral of $6,996,085 and $9,325,965, respectively)                       |               |             | 10,603,665       
|                                                                                                                     | Commercial paper                                                                                                      |               |             | 1,611,187        
|                                                                                                                     | Other                                                                                                                 |               |             | 2,813,160        
|                                                                                                                     | Long-term corporate development investments                                                                           |               |             | 936,042          
|Federal income taxes receivable                                                                                      |                                                                                                                       |               | 77,754      |                  
|Net deferred tax asset                                                                                               |                                                                                                                       |               | 1,771,015   |                  
|Office facilities at cost (net off accumulated depreciation and amortization of $621,445 and $723,365, respectively) |                                                                                                                       |               | 770,593     |                  
|Other assets and deferred amounts                                                                                    |                                                                                                                       |               | 3,239,064   |                  
|Goodwill                                                                                                             |                                                                                                                       |               | 294,233     |                  
|                                                                                                                     |                                                                                                                       |               |             |                  
|Total Assets                                                                                                         |                                                                                                                       | $             | 218,553,630 |                  
|                                                                                                                     |                                                                                                                       |               |             |                  

See
accompanying notes to condensed consolidated financial statements.

3

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

Condensed Consolidated Statements of Financial Condition (Continued)

(Unaudited)
(In thousands, except share and per share data)

|                                                                                                                       |                                                                                                                                                                                                                    | June 30,
2001 |                            | December 31,
2000 |  
|---------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ------------- | -------------------------- | ----------------- | -
|LIABILITIES AND STOCKHOLDERS' EQUITY                                                                                   |                                                                                                                                                                                                                    |               |                            |                  
|Commercial paper and short-term borrowings                                                                             |                                                                                                                                                                                                                    | $             | 11,132,994                 |                   | $
|Collateralized short-term financings:                                                                                  |                                                                                                                                                                                                                    |               |                            |                   |  
|                                                                                                                       | Securities sold under agreements to repurchase                                                                                                                                                                     |               |                            | 94,804,356        |  
|                                                                                                                       | Securities loaned                                                                                                                                                                                                  |               |                            | 31,369,541        |  
|Payables:                                                                                                              |                                                                                                                                                                                                                    |               |                            |                   |  
|                                                                                                                       | Customers                                                                                                                                                                                                          |               |                            | 11,446,426        |  
|                                                                                                                       | Brokers, dealers and other                                                                                                                                                                                         |               |                            | 11,745,614        |  
|Financial instruments sold not yet purchased, at value:                                                                |                                                                                                                                                                                                                    |               |                            |                   |  
|                                                                                                                       | U.S. government and agencies                                                                                                                                                                                       |               |                            | 22,971,561        |  
|                                                                                                                       | Corporate debt                                                                                                                                                                                                     |               |                            | 4,390,890         |  
|                                                                                                                       | Equities                                                                                                                                                                                                           |               |                            | 4,523,929         |  
|                                                                                                                       | Other                                                                                                                                                                                                              |               |                            | 2,160,506         |  
|Obligation to return securities received as collateral                                                                 |                                                                                                                                                                                                                    |               | 2,025,244                  |                   |  
|Accounts payable and accrued expenses                                                                                  |                                                                                                                                                                                                                    |               | 4,092,084                  |                   |  
|Other liabilities                                                                                                      |                                                                                                                                                                                                                    |               | 2,153,669                  |                   |  
|Long-term borrowings                                                                                                   |                                                                                                                                                                                                                    |               | 8,120,558                  |                   |  
|Company-obligated mandatorily redeemable trust securities of subsidiary trust holding solely debentures of the Company |                                                                                                                                                                                                                    |               | 200,000                    |                   |  
|Stockholders' Equity:                                                                                                  |                                                                                                                                                                                                                    |               |                            |                   |  
|Preferred stock, 50,000,000 shares authorized:                                                                         |                                                                                                                                                                                                                    |               |                            |                   |  
|                                                                                                                       | Series A Preferred Stock, at $50.00 per share liquidation preference (4,000,000 shares issued and outstanding)                                                                                                     |               |                            | 200,000           |  
|                                                                                                                       | Series B Preferred Stock, at $50.00 per share liquidation preference (3,500,000 shares issued and outstanding)                                                                                                     |               |                            | 175,000           |  
|Common Stock, 1,500,000,000 shares authorized:                                                                         |                                                                                                                                                                                                                    |               |                            |                   |  
|                                                                                                                       | CSFB (USA) Common Stock ($0.10 par value; 500,000,000 shares authorized; 1,000 shares issued and outstanding)                                                                                                      |               |                            |                  |  
|                                                                                                                       | CSFBdirectCommon Stock ($0.10 par value; 500,000,000 shares authorized; 18,400,000 shares issued and outstanding; 90,752,242 and 84,250,000 notional shares, respectively, in
respect of CSFB's retained interest) |               |                            | 1,840             |  
|Paid-in capital                                                                                                        |                                                                                                                                                                                                                    |               | 5,625,072                  |                   |  
|Retained earnings                                                                                                      |                                                                                                                                                                                                                    |               | 1,425,959                  |                   |  
|Accumulated other comprehensive loss                                                                                   |                                                                                                                                                                                                                    |               | (11,613                    | )                 |  
|                                                                                                                       |                                                                                                                                                                                                                    |               |                            |                   |  
|                                                                                                                       |                                                                                                                                                                                                                    |               | Total stockholders' equity |                   |  
|                                                                                                                       |                                                                                                                                                                                                                    |               |                            |                   |  
|Total Liabilities and Stockholders' Equity                                                                             |                                                                                                                                                                                                                    | $             | 218,553,630                |                   | $
|                                                                                                                       |                                                                                                                                                                                                                    |               |                            |                   |  

See
accompanying notes to condensed consolidated financial statements.

4

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CREDIT SUISSE FIRST BOSTON (USA), INC. AND SUBSIDIARIES        Condensed Consolidated Statements of Income        (Unaudited)        (In thousands, except
share and per share data)

|                                                                                                   |                                                                                                                            | Three Months Ended
June 30, |                          | Six Months Ended
June 30,
|-------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------- | --------------------------- | ------------------------ | -------------------------
|
|Revenues:                                                                                          |                                                                                                                            |                             |                          |                          
|                                                                                                   | Principal transactions-net                                                                                                 |                             | $                        | 570,269                  
|                                                                                                   | Investment banking and advisory                                                                                            |                             |                          | 921,278                  
|                                                                                                   | Commissions                                                                                                                |                             |                          | 345,818                  
|                                                                                                   | Interest and dividend income (net of interest expense of $3,033,467, $1,904,579, $6,333,887, and $3,478,960, respectively) |                             |                          | 282,119                  
|                                                                                                   | Other                                                                                                                      |                             |                          | 668                      
|                                                                                                   |                                                                                                                            |                             |                          |                          
|                                                                                                   |                                                                                                                            |                             | Total net revenues       |                          
|                                                                                                   |                                                                                                                            |                             |                          |                          
|Expenses:                                                                                          |                                                                                                                            |                             |                          |                          
|                                                                                                   | Employee compensation and benefits                                                                                         |                             |                          | 1,274,085                
|                                                                                                   | Occupancy and equipment rental                                                                                             |                             |                          | 179,660                  
|                                                                                                   | Brokerage, clearing and exchange fees                                                                                      |                             |                          | 70,503                   
|                                                                                                   | Communications                                                                                                             |                             |                          | 79,777                   
|                                                                                                   | Professional fees                                                                                                          |                             |                          | 90,650                   
|                                                                                                   | Merger-related costs                                                                                                       |                             |                          | 144,954                  
|                                                                                                   | Other operating expenses                                                                                                   |                             |                          | 183,709                  
|                                                                                                   |                                                                                                                            |                             |                          |                          
|                                                                                                   |                                                                                                                            |                             | Total costs and expenses |                          
|                                                                                                   |                                                                                                                            |                             |                          |                          
|Income before provision for income taxes and cumulative effect of a change in accounting principle |                                                                                                                            |                             | 96,814                   |                          
|                                                                                                   |                                                                                                                            |                             |                          |                          
|Provision for income taxes                                                                         |                                                                                                                            |                             | 27,785                   |                          
|                                                                                                   |                                                                                                                            |                             |                          |                          
|Income before cumulative effect of a change in accounting principle                                |                                                                                                                            |                             | 69,029                   |                          
|Cumulative effect of a change in accounting principle, net of tax provision of $346                |                                                                                                                            |                             |                         |                          
|                                                                                                   |                                                                                                                            |                             |                          |                          
|Net income                                                                                         |                                                                                                                            | $                           | 69,029                   |                          
|                                                                                                   |                                                                                                                            |                             |                          |                          
|Dividends on preferred stock                                                                       |                                                                                                                            | $                           | 5,289                    |                          
|                                                                                                   |                                                                                                                            |                             |                          |                          
|Earnings applicable to common shares                                                               |                                                                                                                            | $                           | 63,740                   |                          
|                                                                                                   |                                                                                                                            |                             |                          |                          

See
accompanying notes to condensed consolidated financial statements.

5

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

Condensed Consolidated Statements of Income (Continued)

(Unaudited)

(In thousands, except share and per share data)

|                                             |                               | Three Months Ended
June 30,                                         |   | Six Months Ended
June 30,
|-------------------------------------------- | ----------------------------- | ------------------------------------------------------------------- | - | -------------------------
|
|Earnings (loss) applicable to common shares: |                               |                                                                     |   |                          
|                                             | CSFB (USA):                   |                                                                     |   |                          
|                                             |                               | Income before cumulative effect of a change in accounting principle |   | $                        
|                                             |                               | Cumulative effect of a change in accounting principle, net of tax   |   | $                        
|                                             |                               | Earnings (loss) applicable to common shares                         |   | $                        
|                                             | CSFBdirect                    |                                                                     | $ | (5,242                   
|Earnings (loss) per common share:            |                               |                                                                     |   |                          
|                                             | CSFB (USA)Basic and Diluted: |                                                                     |   |                          
|                                             |                               | Income before cumulative effect of a change in accounting principle |   | $                        
|                                             |                               | Cumulative effect of a change in accounting principle, net of tax   |   | $                        
|                                             |                               |                                                                     |   |                          
|                                             |                               | Earnings (loss) per common share                                    |   | $                        
|                                             |                               |                                                                     |   |                          
|                                             | CSFBdirect                    |                                                                     |   |                          
|                                             |                               | Basic                                                               |   | $                        
|                                             |                               |                                                                     |   |                          
|                                             |                               | Diluted                                                             |   | $                        
|                                             |                               |                                                                     |   |                          
|Weighted average common shares:              |                               |                                                                     |   |                          
|                                             | CSFB (USA)                    |                                                                     |   |                          
|                                             |                               | Basic and Diluted                                                   |   |                          
|                                             |                               |                                                                     |   |                          
|                                             | CSFBdirect                    |                                                                     |   |                          
|                                             |                               | Basic                                                               |   |                          
|                                             |                               |                                                                     |   |                          
|                                             |                               | Diluted                                                             |   |                          
|                                             |                               |                                                                     |   |                          

Subsequent
to the acquisition by Credit Suisse Group of 100% of the shares of the Company's voting common stock designated Credit Suisse First Boston (USA), Inc. Common Stock
("CSFB (USA) Common Stock"), existing shares were canceled and the Company issued 1,000 shares of voting common stock to its parent, Credit Suisse First Boston, Inc. All computations of basic
and diluted earnings per share have been adjusted retroactively for all periods presented to reflect the change in capital structure. Basic and diluted earnings per share are the same for all periods
presented.

See
accompanying notes to condensed consolidated financial statements.

6

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CREDIT SUISSE FIRST BOSTON  (USA), INC. AND SUBSIDIARIES        Condensed Consolidated Statements of Changes in Stockholders' Equity        (Unaudited)    
 For the Year Ended December 31, 2000 and the Six Months Ended June 30, 2001  (In thousands, except per share data)

|                                                              |                                             | Preferred
Stock            |         | CSFB
(USA)
Common
Stock |   | CSFBdirectCommon
Stock |   | Paid-in
Capital |       | Retained
Earnings |   | Accumulated
Other
Comprehensive
Income (loss) |   | Total |           
|------------------------------------------------------------- | ------------------------------------------- | -------------------------- | ------- | ----------------------- | - | ---------------------- | - | --------------- | ----- | ----------------- | - | --------------------------------------------- | - | ----- | ----------
|Balances at December 31, 1999                                 |                                             | $                          | 375,000 |                         | $ |                       |   | $               | 1,840 |                   | $ | 1,322,540                                     |   | $     | 2,205,818 
|Net loss                                                      |                                             |                            |        |                         |   |                       |   |                 |      |                   |   |                                              |   |       | (1,075,812
|Translation adjustment                                        |                                             |                            |        |                         |   |                       |   |                 |      |                   |   |                                              |   |       |          
|                                                              | Total comprehensive loss                    |                            |         |                         |   |                        |   |                 |       |                   |   |                                               |   |       |           
|Issuance of shares in consideration of transfer of CSFB Corp. |                                             |                            |        |                         |   |                       |   |                 |      |                   |   | 2,537,976                                     |   |       |          
|Dividend of DLJ Asset Management Group to parent              |                                             |                            |        |                         |   |                       |   |                 |      |                   |   |                                              |   |       | (28,473   
|Dividends:                                                    |                                             |                            |         |                         |   |                        |   |                 |       |                   |   |                                               |   |       |           
|                                                              | CSFB (USA) Common Stock ($31,250 per share) |                            |         |                        |   |                        |  |                 |       |                  |   |                                               |  |       |           
|                                                              | Preferred stock ($2.82 per share)           |                            |         |                        |   |                        |  |                 |       |                  |   |                                               |  |       |           
|CSG Share Plan Activity                                       |                                             |                            |        |                         |   |                       |   |                 |      |                   |   | 298,648                                       |   |       |          
|Exercise of stock options                                     |                                             |                            |        |                         |   |                       |   |                 |      |                   |   | 373,140                                       |   |       |          
|Tax benefit on exercise of stock options                      |                                             |                            |        |                         |   |                       |   |                 |      |                   |   | 406,447                                       |   |       |          
|Tender shares to employee trust                               |                                             |                            |        |                         |   |                       |   |                 |      |                   |   | 122,724                                       |   |       |          
|Conversion of restricted stock units                          |                                             |                            |        |                         |   |                       |   |                 |      |                   |   | 10,740                                        |   |       |          
|                                                              |                                             |                            |         |                         |   |                        |   |                 |       |                   |   |                                               |   |       |           
|Balances at December 31, 2000                                 |                                             |                            | 375,000 |                         |   |                       |   |                 | 1,840 |                   |   | 5,072,215                                     |   |       | 1,064,413 
|Net income                                                    |                                             |                            |        |                         |   |                       |   |                 |      |                   |   |                                              |   |       | 372,124   
|Translation adjustment                                        |                                             |                            |        |                         |   |                       |   |                 |      |                   |   |                                              |   |       |          
|Change in accounting principle (FAS 133)                      |                                             |                            |        |                         |   |                       |   |                 |      |                   |   |                                              |   |       |          
|                                                              |                                             | Total comprehensive income |         |                         |   |                        |   |                 |       |                   |   |                                               |   |       |           
|Capital contribution of CSFB Capital Holdings, Inc.           |                                             |                            |        |                         |   |                       |   |                 |      |                   |   | 34,519                                        |   |       |          
|Dividends:                                                    |                                             |                            |         |                         |   |                        |   |                 |       |                   |   |                                               |   |       |           
|                                                              | Preferred stock ($1.41 per share)           |                            |         |                        |   |                        |  |                 |       |                  |   |                                               |  |       |           
|CSG Share Plan Activity                                       |                                             |                            |        |                         |   |                       |   |                 |      |                   |   | 518,338                                       |   |       |          
|                                                              |                                             |                            |         |                         |   |                        |   |                 |       |                   |   |                                               |   |       |           
|Balances at June 30, 2001                                     |                                             | $                          | 375,000 |                         | $ |                       |   | $               | 1,840 |                   | $ | 5,625,072                                     |   | $     | 1,425,959 
|                                                              |                                             |                            |         |                         |   |                        |   |                 |       |                   |   |                                               |   |       |           

See accompanying notes to condensed consolidated financial statements.

7

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CREDIT SUISSE FIRST BOSTON (USA), INC. AND SUBSIDIARIES        Condensed Consolidated Statements of Cash Flows        (Unaudited)        For the Six Months
Ended June 30, 2001 and 2000

|                                                    |                                                                                             | 2001                                                                                            |             | 2000    |           
|--------------------------------------------------- | ------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------- | ----------- | ------- | ----------
|
|Cash flows from operating activities:               |                                                                                             |                                                                                                 |             |         |           
|                                                    | Net income                                                                                  |                                                                                                 | $           | 372,124 |           
|                                                    | Adjustments to reconcile net income to net cash (used in) provided by operating activities: |                                                                                                 |             |         |           
|                                                    |                                                                                             | Depreciation and amortization                                                                   |             |         | 120,548   
|                                                    |                                                                                             | CSG Share Plan activity                                                                         |             |         | 477,614   
|                                                    |                                                                                             | Deferred taxes                                                                                  |             |         | 53,116    
|                                                    |                                                                                             | Decrease (increase) in unrealized appreciation of long-term corporate development investments   |             |         | 42,315    
|                                                    |                                                                                             | Foreign currency translation adjustment                                                         |             |         | (2,577    
|                                                    |                                                                                             | Cumulative effect of a change in accounting principle                                           |             |         | (1,539    
|                                                    | (Increase) decrease in operating assets:                                                    |                                                                                                 |             |         |           
|                                                    |                                                                                             | Cash and securities segregated for regulatory purposes or deposited with clearing organizations |             |         | 605,739   
|                                                    |                                                                                             | Securities purchased under agreements to resell                                                 |             |         | 4,646,901 
|                                                    |                                                                                             | Securities borrowed                                                                             |             |         | (2,155,059
|                                                    |                                                                                             | Receivables from customers                                                                      |             |         | 1,419,707 
|                                                    |                                                                                             | Receivables from brokers, dealers and other                                                     |             |         | (4,299,500
|                                                    |                                                                                             | Financial instruments owned, at value                                                           |             |         | (2,795,179
|                                                    |                                                                                             | Federal income taxes receivable                                                                 |             |         | 412,036   
|                                                    |                                                                                             | Other assets and deferred amounts                                                               |             |         | 51,829    
|                                                    | Increase (decrease) in operating liabilities:                                               |                                                                                                 |             |         |           
|                                                    |                                                                                             | Securities sold under agreements to repurchase                                                  |             |         | (4,646,901
|                                                    |                                                                                             | Securities loaned                                                                               |             |         | (4,228,233
|                                                    |                                                                                             | Payables to customers                                                                           |             |         | (672,337  
|                                                    |                                                                                             | Payables to brokers, dealers and other                                                          |             |         | (1,833,309
|                                                    |                                                                                             | Financial instruments sold not yet purchased, at value                                          |             |         | 795,947   
|                                                    |                                                                                             | Obligation to return securities received as collateral                                          |             |         | 2,025,244 
|                                                    |                                                                                             | Accounts payable and accrued expenses                                                           |             |         | (3,395,984
|                                                    |                                                                                             | Other liabilities                                                                               |             |         | 797,292   
|                                                    |                                                                                             |                                                                                                 |             |         |           
|Net cash (used in) provided by operating activities |                                                                                             | $                                                                                               | (12,210,206 | )       | $         
|                                                    |                                                                                             |                                                                                                 |             |         |           

See
accompanying notes to condensed consolidated financial statements.

8

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CREDIT SUISSE FIRST BOSTON (USA), INC. AND SUBSIDIARIES        Condensed Consolidated Statements of Cash Flows        (Unaudited)        For the Six Months
Ended June 30, 2001 and 2000

|                                                    |                                                                      | 2001                                                     |                                    | 2000    |           
|--------------------------------------------------- | -------------------------------------------------------------------- | -------------------------------------------------------- | ---------------------------------- | ------- | ----------
|
|Cash flows from investing activities:               |                                                                      |                                                          |                                    |         |           
|                                                    | Net proceeds from (payments for):                                    |                                                          |                                    |         |           
|                                                    |                                                                      | Capital contribution of CSFB Capital Holdings, Inc.      |                                    | $       | 34,519    
|                                                    |                                                                      | Purchases of long-term corporate development investments |                                    |         | (109,519  
|                                                    |                                                                      | Sales of long-term corporate development investments     |                                    |         | 162,501   
|                                                    |                                                                      | Office facilities                                        |                                    |         | 119,257   
|                                                    |                                                                      | Note receivable from parent                              |                                    |         | 3,100,000 
|                                                    |                                                                      | Other assets                                             |                                    |         | (1,454,899
|                                                    |                                                                      |                                                          |                                    |         |           
|Net cash provided by (used in) investing activities |                                                                      |                                                          | 1,851,859                          |         |           
|                                                    |                                                                      |                                                          |                                    |         |           
|Cash flows from financing activities:               |                                                                      |                                                          |                                    |         |           
|                                                    | Net proceeds from (payments for):                                    |                                                          |                                    |         |           
|                                                    |                                                                      | Short-term financings                                    |                                    |         | 12,634,008
|                                                    |                                                                      | Issuance (repayments) of:                                |                                    |         |           
|                                                    |                                                                      |                                                          | Subordinated loan agreements       |         |           
|                                                    |                                                                      |                                                          | Senior notes                       |         |           
|                                                    |                                                                      |                                                          | Senior secured floating rate notes |         |           
|                                                    |                                                                      |                                                          | Global floating rate notes         |         |           
|                                                    |                                                                      |                                                          | Medium-term notes                  |         |           
|                                                    |                                                                      |                                                          | Structured notes                   |         |           
|                                                    |                                                                      |                                                          | Other long-term debt               |         |           
|                                                    | Cash dividends                                                       |                                                          |                                    | (10,578 | )         
|                                                    | Exercise of stock options                                            |                                                          |                                    |        |           
|                                                    |                                                                      |                                                          |                                    |         |           
|Net cash provided by (used in) financing activities |                                                                      |                                                          | 9,486,472                          |         |           
|                                                    |                                                                      |                                                          |                                    |         |           
|Decrease in cash and cash equivalents               |                                                                      |                                                          | (871,875                           | )       |           
|Cash and cash equivalents at beginning of period    |                                                                      |                                                          | 2,758,390                          |         |           
|                                                    |                                                                      |                                                          |                                    |         |           
|Cash and cash equivalents at end of period          |                                                                      | $                                                        | 1,886,515                          |         | $         
|                                                    |                                                                      |                                                          |                                    |         |           
|Supplemental schedule of cash flows information:    |                                                                      |                                                          |                                    |         |           
|                                                    | Supplemental schedule of noncash investing and financing activities: |                                                          |                                    |         |           
|                                                    |                                                                      | Capital contribution of CSFB Capital Holdings, Inc.      |                                    |         |           
|                                                    |                                                                      |                                                          | Fair value of assets contributed   |         | $         
|                                                    |                                                                      |                                                          | Less: liabilities assumed          |         |           
|                                                    |                                                                      |                                                          |                                    |         |           
|                                                    |                                                                      | Capital contribution of CSFB Capital Holdings, Inc.      |                                    | $       | 34,519    
|                                                    |                                                                      |                                                          |                                    |         |           

See
accompanying notes to condensed consolidated financial statements.

9

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CREDIT SUISSE FIRST BOSTON (USA), INC. AND SUBSIDIARIES        Notes to Condensed Consolidated Financial Statements        June 20, 2001

1.  Summary of Significant Accounting Policies

The condensed consolidated financial statements include Credit Suisse First Boston (USA), Inc. and its subsidiaries (the "Company"). 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 by CSG were recorded in the Company's historical financial
statements. Similarly, although the Acquisition gave rise to goodwill, none of this goodwill was "pushed down" to the Company, and thus goodwill associated with the Acquisition will not affect the
Company's results of operations. In addition, in conjunction with the Acquisition, CSFBI transferred all of the outstanding shares of Credit Suisse First Boston Corporation ("CSFB Corp."), a U.S.
registered broker dealer that was a direct wholly owned subsidiary of CSFBI, to the Company in exchange for newly issued shares of the Company (the "Transfer"). For further discussion of the
Acquisition and the Transfer, see the Company's Annual Report on Form 10-K for the year ended December 31, 2000.

Certain
financial information that is normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of
America but is 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), as well as the accounting change to adopt Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging
Activities" ("SFAS 133"), which are necessary for a fair presentation of the condensed consolidated statements of financial condition and income for the interim periods presented.

In
September 2000, the FASB issued Statement of Financial Accounting Standards No. 140, "Accounting for Transfers and Servicing of Financial Assets and Extinguishment of
Liabilitiesa replacement of FASB Statement No. 125" ("SFAS 140"). While the Company adopted SFAS 140 as of December 31, 2000, certain provisions related to
determining whether the transferor has relinquished control of assets and, therefore determining if the transfer should be accounted for as a sale were adopted for transactions occurring after
March 31, 2001. As a result, the Company was required to recognize securities received as collateral in certain securities lending transactions in the condensed consolidated statement of
financial condition as of June 30, 2001. See Note 6.

In
June 2001, the FASB issued Statement of Financial Accounting Standards No. 141, "Business Combinations" ("SFAS 141"), which requires that all business
combinations initiated after June 30, 2001 be accounted for under the purchase method of accounting. The pooling of interest method will no longer be permitted.

In
June 2001, the FASB issued Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets" ("SFAS 142"), which requires that
goodwill be reviewed for impairment instead of being amortized to earnings. The statement is effective for fiscal years beginning after December 15, 2001. Management is evaluating the impact of
adopting SFAS 142. For the six months ended June 30, 2001, the amount of goodwill amortization charged to earnings was $18.5 million.

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

10

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consolidated financial statements and notes thereto as of and for the year ended December 31, 2000 included in the Company's Annual Report on Form 10-K for the year ended
December 31, 2000.

To
prepare condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States of America, management must estimate certain
amounts that affect the reported assets and liabilities, disclosure of contingent assets and liabilities and reported revenues and expenses. Actual results could differ from those estimates.

The
Company is included in the consolidated federal income tax return and unitary state and local income tax returns filed by CSFBI. CSFBI allocates federal, state and local income
taxes to its subsidiaries on a separate return basis.

Certain
reclassifications have been made to prior year condensed consolidated financial statements to conform to the 2001 presentation.

2.  Restructuring Costs and Merger-Related Costs

As of June 30, 2001, all significant restructuring initiatives contemplated in the Acquisition have been completed. During the six months ended
June 30, 2001, restructuring costs of approximately $467 million were paid. The remaining balance of $8 million is included in accounts payable and accrued expenses in the
condensed consolidated statement of financial condition as of June 30, 2001. All components of restructuring costs were funded from working capital and do not require any incremental funding
source. It is expected that the restructuring plan will be fully executed by December 2001.

Merger-related
costs represent retention awards related to the merger, which are expensed over the vesting period. The vesting period is generally three years. Merger-related costs of
$288.1 million are included in the condensed consolidated statement of income for the six months ended June 30, 2001.

The
following is an analysis of the change in the restructuring accrual account for the six months ended June 30, 2001:

Balance
December 31, 2000

Amounts Paid
in 2001

Balance
June 30, 2001(in millions)Compensation and benefits

$
325

$
322

$
3Occupancy and related costs


76


72


4Technology costs


74


73


1$
475

$
467

$
8


In
addition, included in other income for the six months ended June 30, 2001 is a gain of approximately $163 million on the assignment of the lease and related sale of
leasehold improvements on the Company's former headquarters. In February 2001, an incremental gain related to the lease assignment of $30.4 million was deferred and is being amortized
through February 2002.

3.  Issuance of CSFBdirectCommon Stock

CSFBdirectrepresents a combination of the assets and liabilities of the Company's online discount brokerage
and related investment services business, rather than a separately incorporated entity.

11

---

CSFBdirectCommon Stock tracks the separate performance of these businesses for periods subsequent to the date of the offering ("Tracking Stock"). On
May 28, 1999, the Company issued in an initial public offering 18.4 million shares of CSFBdirectCommon Stock (formerly known as
DLJdirectCommon Stock). Prior to issuing the Tracking Stock, the Company's existing common stock was designated as CSFB (USA) Common Stock to reflect
the performance of the Company's primary businesses,i.e., Equity, Investment Banking, Fixed Income and Financial Services, plus a retained interest in
CSFBdirect. All of the Company's businesses other than those included in CSFBdirect, plus the Company's
retained interest in CSFBdirect, are referred to as CSFB (USA). Holders of the Tracking Stock are common stockholders of the Company but have no voting
rights, except in certain limited circumstances, and will be subject to all of the risks associated with an investment in the Company and all of its businesses, assets and liabilities. Earnings
applicable to common shares for CSFB (USA) includes a 100% retained interest in CSFBdirectfor periods prior to the closing date of the initial public
offering of the Tracking Stock, and 82.1% thereafter, except as described below.

On
March 29, 2001, CSFBdirectreceived a $29.0 million capital contribution as reimbursement for
CSFBdirect'srebranding expenses (net of taxes). As a result of this capital contribution CSFB (USA)'s retained interest increased to 83.1% represented
by 90.8 million notional shares.

On
July 11, 2001, the Company announced the execution of a definitive merger agreement whereby its parent, CSFBI, will acquire the 18.4 million shares of
CSFBdirectcommon stock owned by the public for $6.00 per share in cash, or a total of approximately $110 million. On July 24, 2001, the
Company filed with the Securities and Exchange Commission an offer to purchase for cash all of these outstanding shares. The cash tender offer is expected to close in the third quarter of 2001.

4.  Related Party Transactions

In the normal course of business, the Company enters into transactions with affiliated companies. Total assets and total liabilities at June 30, 2001
and December 31, 2000 include $8.0 billion and $41.4 billion, and $5.6 billion and $47.7 billion, respectively, resulting from these transactions. Included in these
transactions 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 a management fee arrangement. Such fees are treated as a reduction of expenses in the consolidated statements of operations.

From
time to time, the Company enters into financing transactions with various CSFB affiliates. Interest paid or received on notes or advances is at market prices.

5.  Income Taxes

As a result of the Acquisition, 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 city income taxes to its subsidiaries on a separate return basis. Any resulting liability will be paid currently to CSFBI. Any credits for
losses will be paid by CSFBI to the extent that such credits are for tax benefits that have been utilized in the consolidated federal or combined state and city income tax return. The amount due to
CSFBI based on the allocation of tax expense amounted to $131.8 million for the six months ended June 30, 2001.

12

---

During the six months ended June 30, 2000, income taxes were accrued using the Company's estimated effective tax rate. Federal income taxes paid for the six months ended
June 30, 2000 were $244.2 million.

Management
has determined that the realization of the recognized net deferred tax asset of $1.8 billion at June 30, 2001 is more likely than not, based on anticipated
future taxable income. In addition, for federal income tax purposes, the Company has planning strategies available, which may enhance its ability to utilize these tax benefits. However, if estimates
of future taxable income are reduced, the amount of the deferred tax assets considered realizable could also be reduced. In addition, due to uncertainty concerning the Company's ability to generate
the necessary amount and mix of state and local taxable income in future periods, the Company continues to maintain a valuation allowance against its deferred state and local tax asset.

6.  Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities

Effective December 31, 2000, the Company adopted SFAS 140. As of June 30, 2001, the fair market value of assets that the Company has
pledged to counterparties was $168.8 billion. The Company has also received similar assets as collateral where it has the right to re-pledge or sell the assets. As of
June 30, 2001, the fair market value of the assets received was $156.2 billion. The Company routinely re-pledges or lends these assets to third parties.

Certain
provisions of SFAS 140 were required to be adopted for transactions occurring after March 31, 2001. Effective April 1, 2001, as a result of the Company's
adoption of these provisions of SFAS 140, the Company recognized securities received as collateral in the condensed consolidated statement of financial condition (as opposed to cash) in certain
securities lending transactions. At June 30, 2001, as a
result of these transactions, the Company recorded obligations to return securities pledged as collateral of approximately $2.0 billion in the condensed consolidated statements of financial
condition.

The
Company enters into various transactions whereby commercial and residential mortgages are sold to a qualifying trust or special purpose trusts and securitized. Beneficial
interests in those trusts are sold to investors. The investors and the securitization trusts have no recourse to the Company's assets for failure of debtors to pay when due. At June 30, 2001
the amount of beneficial interests retained by the Company are not significant. During the six months ended June 30, 2001, the Company sold $202.3 million in residential mortgages
receivable in securitization transactions. Net losses recognized on these transactions were $0.7 million for the six months ended June 30, 2001.

7.  Borrowings

Short-term borrowings are generally demand obligations with interest approximating the Federal funds rate. Such borrowings are generally used to
facilitate the securities settlement process, to finance securities inventories, and to finance securities purchased by customers on margin. At June 30, 2001 and December 31, 2000, there
were no borrowings secured by Company-owned securities.

The
Company has two commercial paper programs totaling $7.0 billion, which are exempt from registration under the Securities Act of 1933. At June 30, 2001,
$2.2 billion of commercial paper was outstanding under these programs.

13

---

Long-term borrowings:

June 30,
2001

December 31,
2000(In thousands)Senior notes 5.875%-8.00%, due various dates through 2008

$
2,608,055

$
2,544,454Medium-term notes 0.62%-7.49%, due various dates through 2016


5,194,044


3,873,511Global floating rate notes due 2002





349,551Structured borrowings 6.91%-7.41%, due various dates through 2007


292,364


317,533Other


26,095


22,467Subtotal long-term borrowings

$
8,120,558

$
7,107,516Subordinated Loan Agreements with CSFBI:Revolving Subordinated Loan Agreements due 2003-2008





2,650,000Equity Subordination Agreements due 2005-2008





1,500,000Subtotal subordinated loan agreements with CSFBI





4,150,000Total long-term borrowings

$
8,120,558

$
11,257,516Current maturities of long-term borrowings

$
2,148,931

$
1,485,217


In
May 2001, the Company replaced its $2.8 billion credit facility with a $3.5 billion revolving credit facility available to the Company and CSFBI as borrowers.
At June 30, 2001, no borrowings were outstanding under this facility.

In
November 2000, CSFBI obtained a $3.1 billion loan from the Company that had an original maturity date of November 1, 2001 and bore interest at a market rate
based on LIBOR. On April 25, 2001, CSFBI, in a series of transactions, repaid the $3.1 billion loan from the Company, including accrued interest, and the Company's $4.2 billion
subordinated loan agreements with CSFBI referred to above were repaid by the Company in full, including accrued interest.

For
the six months ended June 30, 2001 and 2000, interest paid on all borrowings and financing arrangements was $6.4 billion and $3.4 billion, respectively. At
June 30, 2001, the Company had entered into interest rate and currency swaps on $3.5 billion of its senior and medium-term notes.

During
the quarter ended June 30, 2001 the Company issued $2.3 billion of medium-term notes off its existing $3.1 billion shelf. On June 29,
2001, the Company filed a new shelf registration statement with the Securities and Exchange Commission, which enables the Company to issue up to $5 billion of senior and subordinated debt
securities, preferred stock and warrants to purchase debt securities, preferred stock or other equity securities. On July 27, the Company issued $2.25 billion 57/8% senior
notes due 2006 off this effective shelf registration statement.

In
July 2001, the Company established a Euro Medium-Term Note program, which enables it to issue up to $5 billion of notes. This program replaces the
$1.0 billion Euro Medium-Term Note program established in April 2000.

14

---

8.  Long-term Corporate Development Investments

Long-term corporate development investments represent the Company's involvement in primarily private debt and equity investments. These investments
generally have no readily available market or may be otherwise restricted as to resale under the Securities Act of 1933 and are carried at estimated fair value. The cost of these investments was
$0.9 billion and $1.0 billion at June 30, 2001 and December 31, 2000, respectively. In the first six months of 2001 and 2000, net unrealized appreciation of
long-term corporate development investments decreased $42.3 million and increased $49.1 million, respectively. Changes in net unrealized (depreciation) appreciation arising
from changes in fair value or upon realization are reflected in principal transactions-net in the condensed consolidated statements of income.

9.  Net Capital

The Company's principal wholly owned subsidiaries, Donaldson, Lufkin & Jenrette Securities Corp. ("DLJSC") and CSFB Corp., are registered
broker-dealers, registered futures commission merchants and member firms of The New York Stock Exchange, Inc. (the "NYSE"). As such, they are subject to 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
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. At June 30, 2001, DLJSC's and CSFB Corp.'s net capital of approximately $1.3 billion and
$2.7 billion, respectively, was 17.1 percent and 99.2 percent, respectively, of aggregate debit balances and in excess of the minimum requirement by approximately
$1.2 billion and $2.6 billion, respectively.

The
Company's London-based broker-dealer subsidiaries are subject to the requirements of the Securities and Futures Authority, a self-regulatory organization established
pursuant to the U.K. Financial Services Act of 1986. Other U.S. and foreign broker-dealer subsidiaries of the Company are
subject to net capital requirements of their respective regulatory agencies. At June 30, 2001, the Company and its broker-dealer subsidiaries complied with all applicable regulatory capital
adequacy requirements.

15

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

Notes to Condensed Consolidated Financial Statements (Continued)

June 20, 2001

10. Accounting for Derivative Instruments and Hedging Activities

In June 1998, the Financial Accounting Standards Board ("FASB") issued SFAS 133 which was amended by Statement of Financial Accounting Standards
No. 137, "Accounting for Derivative Instruments and Hedging ActivitiesDeferral of the Effective Date of FASB Statement No. 133an amendment of FASB Statement
No. 133" ("SFAS 137") and Statement of Financial Accounting Standards No. 138, "Accounting for Certain Derivative Instruments and Certain Hedging Activities" ("SFAS 138").

The
standard establishes new accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging
activities. It does not change the accounting for derivative instruments held or issued for trading purposes. All derivatives are required to be recognized as assets or liabilities in the statement of
financial condition at fair value.

The
recognition of the changes in fair value in a derivative instrument depends upon the intended use and designation of the derivative instrument. If certain conditions are met,
entities may elect to designate a derivative instrument as a hedge of exposures to changes in fair values, cash flows or a net investment in a foreign subsidiary. If the hedged exposure is a fair
value exposure, the gain or loss on the derivative instrument is recognized in current earnings together with the offsetting loss or gain on the hedged item attributable to the risk being hedged. If
the hedged exposure is a cash flow exposure, the effective portion of the gain or loss on the derivative instrument is reported initially in other comprehensive income (a component of equity) and
subsequently reclassified into earnings when the forecasted transaction affects earnings. Any amounts excluded from the assessment of hedge effectiveness as well as the ineffective portion of the gain
or loss is reported in earnings immediately. If the derivative instrument is not designated as a hedge, the gain or loss is recognized in current earnings.

The
Company enters into derivative transactions primarily for trading purposes, or to provide products for its clients. The Company also uses derivative instruments to manage
exposures to interest rate and foreign currency risks by modifying the characteristics of periodic interest payments and foreign currency exposure associated with some of its long-term
debt obligations. As of June 30, 2001, the Company only has fair value hedges of fixed rate debt for which derivatives hedge the fair value of the debt.

These
derivatives or other derivatives that do not qualify as hedges under the new rules are also carried at fair value with changes in value included in other revenues in the
condensed consolidated statements of income. For the six months ended June 30, 2001, the Company recognized an after-tax gain of $3.4 million for such non-trading
derivatives.

The
effectiveness of hedging relationships is evaluated using quantitative measures of correlation. If a hedge relationship is not found to be highly effective, it no longer qualifies
as a hedge and any excess gains or losses attributable to the hedged item, as well as subsequent changes in the fair value of the derivative, are recognized in other revenues. For the six months ended
June 30, 2001, the amount of hedge ineffectiveness that reduced other revenues was $1.7 million, net of tax. There were no gains or losses on derivatives that were excluded from the
assessment of effectiveness during the six months ended June 30, 2001.

The
cumulative effect of adopting SFAS 133 at January 1, 2001, representing the initial revaluation of derivatives and other items as described above, was an
after-tax gain of $0.6 million reported in the condensed consolidated statements of income separately as "cumulative effect of change in accounting

16

---

principle" and an after-tax loss of $1.6 million included in other comprehensive income. The Company estimates that $0.4 million of net derivative losses included in other
comprehensive income will be reclassified into other revenues within the next twelve months.

As
noted above, the Company enters into various transactions involving derivatives for trading purposes or to provide products for its clients. These derivatives include options,
forwards, futures and swaps.

Options

The Company writes option contracts specifically designed to meet customers' needs. Most of the options do not expose the Company to credit risk since 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 ("market risk"). 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 and options. The counterparties to these purchases and sales are
reviewed to determine whether they are creditworthy. Future cash requirements for options written equal the fair value of the options.

The
Company also purchases options for trading 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 mortgage-backed securities, equities, interest rates and foreign currencies. All options are reported at fair value.

Forwards and Futures

The Company enters into forward purchases and sales contracts for mortgage-backed securities and foreign currencies. In addition, the Company enters into
futures contracts on equity-based indices, foreign currencies and other financial instruments as well as options on futures contracts. Market risk is the price movement on the notional value of the
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
in cash at inception; cash equal to the change in market value is required daily.

Since
forward contracts are subject to the financial reliability of the counterparty, the Company is exposed to credit risk. To monitor 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.

17

---

Quantitative Disclosures for All Trading Derivatives

The fair values of trading derivatives outstanding at June 30, 2001 and December 31, 2000 are as follows:

June 30, 2001

December 31, 2000Assets

Liabilities

Assets

Liabilities(In millions)Options

$
703.6

$
1,002.4

$
1,143.0

$
2,122.7Forward contracts

$
742.7

$
650.8

$
727.4

$
719.2Futures contracts

$
33.9

$
48.1

$
180.0

$
15.5Swaps

$
251.5

$
293.2

$
943.7

$
868.1


These
amounts are included in financial instruments owned/sold not yet purchased in the condensed consolidated statements of financial condition.

The
majority of the Company's derivatives are short-term in duration.

11. Financial Instruments With Off-Balance Sheet Risk

In the normal course of business, the Company's customer, trading and correspondent clearance activities include executing, settling and financing various
securities and financial instrument transactions. To execute these transactions, the Company purchases and sells (including "short sales") securities, writes options, and purchases and sells forward
contracts for mortgage-backed securities and foreign currencies and financial futures contracts. If the customer or counterparty to the transaction is unable to fulfill its contractual obligations,
and margin requirements are not sufficient to cover losses, the Company may be exposed to off-balance sheet risk. In these situations, the Company may be required to purchase or sell
financial instruments at prevailing market prices, which may not fully cover the obligations of its customers or counterparties. This risk is limited by requiring customers and counterparties to
maintain margin collateral that complies with regulatory and internal guidelines. Additionally, with respect to the Company's correspondent clearance activities, introducing correspondent brokers are
required to guarantee the performance of their customers to meet contractual obligations.

As
part of the Company's financing and securities settlement activities, the Company uses securities as collateral to support various secured financing sources. If the counterparty
does not meet its contractual obligation to return securities used as collateral, the Company may be exposed to the risk of reacquiring the securities at prevailing market prices to satisfy its
obligations. The Company controls this risk by monitoring the market value of securities pledged each day and by requiring collateral levels to be adjusted in the event of excess market exposure.

The
Company enters into forward contracts under which securities are delivered or received in the future at a specified price or yield. If counterparties are unable to perform under
the terms of the contracts or if the value of securities and interest rates changes, the Company is exposed to risk. Such risk is controlled by monitoring the market value of the securities contracted
for each day and by reviewing the creditworthiness of the counterparties.

The
settlement of these transactions is not expected to have a material adverse effect on the Company's consolidated financial statements.

18

---

12. Stockholders' Equity

As a result of the change in capital structure brought about by the Acquisition by CSFBI of all of the outstanding shares of CSFB (USA) common stock, 1,000
shares of CSFB (USA) Common Stock were issued to CSFBI. All share and per share amounts have been adjusted retroactively to reflect this change in capital structure.

In
February 2001, CSFBI transferred CSFB Capital Holdings, Inc. to the Company as a capital contribution of $34.5 million. CSFB Capital Holdings, Inc. is
the parent of Credit Suisse First Boston Capital LLC ("CSFB Capital"), which is a broker-dealer registered with the Securities and Exchange Commission. On May 1, 2001, CSFB Capital received
regulatory approval to commence operating as an OTC derivatives dealer pursuant to Appendix F of Rule 15c3-1.

CSG
Share Plan Activity includes amounts contributed by CSFBI related to retention awards and other stock awards to be settled in Credit Suisse Group shares.

13. Earnings Per Share

As a result of the Acquisition, CSFBI acquired 100% of the shares of the Company's voting common stock (that is, the common stock of the Company of the series
previously designated Donaldson,
Lufkin & Jenrette, Inc.DLJ Common Stock, par value $.10 per share). Subsequent to the Acquisition by CSFBI of all such existing shares, such existing shares were canceled
and the Company issued 1,000 shares of voting common stock to CSFBI. All computations of basic and diluted earnings per share have been adjusted retroactively for all periods presented to reflect the
change in capital structure. Basic and diluted earnings per share are the same for all periods presented.

Earnings
per common share for periods subsequent to the issuance of the Tracking Stock have been calculated using the two-class method. The two-class method is
an earnings allocation formula that determines the earnings per share for each class of common stock according to participation rights in undistributed earnings. The Company's Tracking Stock (that is,
the common stock of the Company of the series designated CSFB (USA), Inc. CSFBdirectCommon Stock, par value $.10 per share) was not directly
affected by the Acquisition and remains outstanding.

For
CSFBdirect, basic earnings per share is calculated by dividing earnings applicable to common shares for the period the Tracking
Stock was outstanding by the weighted average actual number of such common shares outstanding. Diluted earnings per common share include the dilutive effect, if any, of options calculated under the
treasury stock method.

19

---

The numerators and denominators of the basic and diluted earnings per common share computations include the following items:

|                                                    |               | Three Months Ended |        | Six Months Ended
|--------------------------------------------------- | ------------- | ------------------ | ------ | ----------------
|
|
|
|CSFB (USA) Common Stock                             |               |                    |        |                 
|Basic Earnings applicable to Common Shares          |               | $                  | 68,982 |                 
|Effect of Dilutive Securities:                      |               |                    |        |                 
|                                                    | Stock options |                    |        |                
|                                                    |               |                    |        |                 
|Diluted Earnings applicable to Common Shares        |               | $                  | 68,982 |                 
|                                                    |               |                    |        |                 
|CSFBdirectCommon Stock                              |               |                    |        |                 
|Basic Earnings (Loss) applicable to Common Shares:  |               |                    |        |                 
|Basic and Diluted                                   |               |                    | (5,242 | )               
|Effect of Dilutive Securities:                      |               |                    |        |                 
|                                                    | Stock options |                    |        |                
|                                                    |               |                    |        |                 
|Diluted Earnings (Loss) applicable to Common Shares |               | $                  | (5,242 | )               
|                                                    |               |                    |        |                 

14. Leases, Commitments and Contingent Liabilities

In February 2001, the Company assigned its interest in substantially all leases and sold the related leasehold improvements of its former headquarters
and recorded approximately $163 million in other income for the six months ended June 30, 2001 in the accompanying condensed consolidated statements of income.

In
the normal course of business, the Company enters into firm underwriting commitments, which represent the Company's future obligation to issue and sell securities for or on behalf
of a customer. The Company had approximately $2.9 billion and $1.8 billion in outstanding firm underwriting commitments at June 30, 2001, and December 31, 2000,
respectively.

The
Company was contingently liable for letters of credit aggregating approximately $0.9 billion and $1.0 billion at June 30, 2001 and December 31, 2000,
respectively, which satisfy various collateral requirements.

The
Company enters into commitments to extend credit to non-investment grade borrowers in connection with the origination and syndication of senior bank debt. Unfunded
senior bank loan commitments outstanding were $126.1 million and $334.7 million at June 30, 2001 and December 31, 2000, respectively.

The
Company had commitments to invest on a side-by-side basis with merchant banking partnerships of approximately $2.4 billion and $1.6 billion
at June 30, 2001 and December 31, 2000, respectively.

15. Industry Segment and Geographic Data

The Company operates and manages its businesses through four operating segments: Equity, Investment Banking ("IBD"), Fixed Income ("FID") and Financial
Services.

Such
segments are managed separately 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 before income taxes and cumulative effect of a change in accounting principle.

20

---

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

Notes to Condensed Consolidated Financial Statements (Continued)

June 30, 2001

In conjunction with the Acquisition, the Company changed its method of allocation of underwriting revenues and related expenses to operating segments to conform to the CSFB
methodology. Accordingly, segment data has been restated to conform to the current method of managing its business. The change in allocation did not have an effect on the Company's consolidated
results.

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 interest rates applied will also vary depending upon the type
and duration of the asset. The segment allocation of some costs, such as incentive bonuses, has been estimated. The Company has not allocated merger-related costs to its segments since none of these
costs represent normal operating costs. Instead, these costs are in the Elimination & Other category. All other accounting policies of the segments are the same as those described in the
summary of significant accounting policies.

|                                                                                                          |  | Equity |       | IBD |   | FID    |   | Financial
Services |       | Elimination
& Other |   | Total
|--------------------------------------------------------------------------------------------------------- |  | ------ | ----- | --- | - | ------ | - | ------------------ | ----- | ------------------- | - | -----
|
|For the Quarters Ended:                                                                                   |  |        |       |     |   |        |   |                    |       |                     |   |      
|June 30, 2001                                                                                             |  |        |       |     |   |        |   |                    |       |                     |   |      
|Net revenues from external sources                                                                        |  | $      | 632.5 |     | $ | 450.0  |   | $                  | 394.3 |                     | $ | 270.9
|Net intersegment revenues                                                                                 |  |        |      |     |   |       |   |                    |      |                     |   | 25.3 
|Net interest and dividend revenue                                                                         |  |        | (44.5 | )   |   | (6.1   | ) |                    | 282.4 |                     |   | 88.8 
|Income (loss) before provision for income taxes and cumulative effect of a change in accounting principle |  | $      | 176.3 |     | $ | (316.0 | ) | $                  | 260.5 |                     | $ | (9.0 
|June 30, 2000                                                                                             |  |        |       |     |   |        |   |                    |       |                     |   |      
|Net revenues from external sources                                                                        |  | $      | 327.6 |     | $ | 457.3  |   | $                  | 119.9 |                     | $ | 368.9
|Net intersegment revenues                                                                                 |  |        | (1.2  | )   |   |       |   |                    | (0.1  | )                   |   | 42.2 
|Net interest and dividend revenue                                                                         |  |        | 22.4  |     |   | (7.5   | ) |                    | 42.3  |                     |   | 114.9
|Income (loss) before income taxes                                                                         |  | $      | 33.4  |     | $ | 102.5  |   | $                  | 31.7  |                     | $ | 101.1

|                                                                                            |  | Equity |         | IBD |   | FID    |   | Financial
Services |       | Elimination
& Other |   | Total
|------------------------------------------------------------------------------------------- |  | ------ | ------- | --- | - | ------ | - | ------------------ | ----- | ------------------- | - | -----
|
|For the Six Months Ended:                                                                   |  |        |         |     |   |        |   |                    |       |                     |   |      
|June 30, 2001                                                                               |  |        |         |     |   |        |   |                    |       |                     |   |      
|Net revenues from external sources                                                          |  | $      | 1,410.3 |     | $ | 971.7  |   | $                  | 901.9 |                     | $ | 606.9
|Net intersegment revenues                                                                   |  |        |        |     |   |       |   |                    |      |                     |   | 56.5 
|Net interest and dividend revenue                                                           |  |        | (147.3  | )   |   | (29.5  | ) |                    | 441.1 |                     |   | 172.8
|Income (loss) before income taxes and cumulative effect of a change in accounting principle |  | $      | 381.9   |     | $ | (301.6 | ) | $                  | 539.6 |                     | $ | (6.3 

21

---

|June 30, 2000                      |  |   |       |   |   |       |   |   |       |  |   |       |  |   |       |   |   |        
|---------------------------------- |  | - | ----- | - | - | ----- | - | - | ----- |  | - | ----- |  | - | ----- | - | - | -------
|Net revenues from external sources |  | $ | 751.1 |   | $ | 996.7 |   | $ | 313.3 |  | $ | 838.4 |  | $ | 102.6 |   | $ | 3,002.1
|Net intersegment revenues          |  |   | (3.1  | ) |   |      |   |   |      |  |   | 87.4  |  |   | (84.3 | ) |   |       
|Net interest and dividend revenue  |  |   | 31.8  |   |   | (10.5 | ) |   | 90.3  |  |   | 231.4 |  |   | 72.9  |   |   | 415.9  
|Income (loss) before income taxes  |  | $ | 109.3 |   | $ | 257.9 |   | $ | 113.9 |  | $ | 262.3 |  | $ | (96.7 | ) | $ | 646.7  

The
following is a reconciliation of the Company's reported revenues and income before provision for income taxes and cumulative effect of change in accounting principle to the
Company's consolidated totals:

For the Quarter Ended
June 30,

For the Six
Months Ended
June 30,2001

2000

2001

2000Revenues:Total net revenues for reported segments

$
2,093.6

$
1,486.7

$
4,384.4

$
3,326.8All other revenues


51.9


145.0


303.5


175.5Consolidation/elimination(1)


(25.3
)

(40.9
)

(56.5
)

(84.3
)Total consolidated net revenues

$
2,120.2

$
1,590.8

$
4,631.4

$
3,418.0Income before provision for income taxes:Total income for reported segments

$
111.8

$
268.7

$
613.6

$
743.4All other income (loss)


10.3


29.7


(1.1
)

(12.4
)Consolidation/elimination(1)


(25.3
)

(40.9
)

(56.5
)

(84.3
)Total income before provision for income taxes and cumulative effect of change in accounting principle

$
96.8

$
257.5

$
556.0

$
646.7


---

The
Company's principal operations are located in the United States. The Company maintains offices in Europe, Latin America and Asia. Historically, the majority of foreign business
was done through the London offices. The Company's foreign revenues are not significant.

22

---

16. 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, 2000, Quarterly Report on Form 10-Q for the three months ended March 31, 2001, or Current Reports on Form 8-Ks previously filed
in 2001. The following is an update of such proceedings:

On
May 30, 2001, DLJ Capital Funding moved to dismiss the amended complaint filed on May 1, 2001 in the bankruptcy court adversary proceeding by holders of the secured
notes issued by AmeriServe Food Distribution, Inc. ("AmeriServe"). Resolution of that motion is pending.

In
the action filed by GSC Recovery, Inc. in New Jersey State Court arising out of alleged misrepresentations and omissions relating to GSC's purchases of certain unsecured
AmeriServe notes issued on or about October 1, 1999, the Court granted in part, and denied in part, the motion to dismiss filed on March 6, 2001 by the DLJ entities named as defendants.
The plaintiffs have moved the Court to reconsider its decision and resolution of that motion is pending.

A
trial date has been set for October 1, 2001, in the action filed by Morgens Waterfall Holdings, LLC ("Morgens") in the U.S. District Court for the Southern District of New
York arising out of Morgens' purchases of the secured AmeriServe notes issued on or about October 1, 1999.

On
May 23, 2001, the DLJ defendants were served with the complaint in the action filed by Conseco Capital Management, Inc. and certain affiliated entities in the U.S.
District Court for the Southern District of New York arising out of alleged misrepresentations and omissions relating to Conseco's purchases of the secured AmeriServe notes issued on or about
October 1, 1999.

On
June 14, 2001, briefing was completed on the defendant DLJ entities' motion to dismiss the amended consolidated complaint filed by plaintiffs in the consolidated action
captionedIn re Independent Energy Holdings PLC Securities Litigationpending in the U.S. District Court for the Southern District of New York. On
July 26, 2001, the Court rendered a decision granting in part, and denying in part, the DLJ entities' motion. The Court held that plaintiffs' amended consolidated complaint states a claim
against DLJSC and DLJ International, Ltd. under the Securities Act of 1933
and against DLJSC under the Exchange Act of 1934 and also states a control person liability claim against DLJ under the Securities Act.

On
or about March 30, 2001, the putative class actions initially filed in September 2000 in the Delaware Court of Chancery by the public shareholders of
CSFBdirectcommon stock were consolidated and captionedIn re CSFBdirect Tracking Stock Shareholders
Litigation. Plaintiffs simultaneously filed a second consolidated amended complaint asserting their original claims and adding claims that alleged that the proposed offer by
the Company, announced on March 26, 2001, to purchase all the publicly owned common stock of CSFBdirectat a price of $4 per share was unfair.
Subsequent to the Company's proposed offer to acquire all of the publicly owned CSFBdirectcommon stock for $4 per share, an additional ten putative
class actions were filed in the Delaware Chancery Court alleging that the Company's proposed offer was unfair. Those actions were then consolidated with theIn re CSFBdirect
Tracking Stock Shareholders Litigation. On July 10, 2001, the parties to the consolidated cases entered into a Memorandum of Understanding that provides for the
settlement, pending court approval, of those cases with no admission of liability by defendants.

On
April 19, 2001, the U.S. District Court for the Southern District of New York heard oral argument on the defendants' motion to dismiss the putative class action filed in
September 2000 that alleges, among other things, that certain statements in the 1999 prospectus issued in connection with the Initial Public Offering of
DLJdirectshares were false and misleading in their description of the

23

---

rights attributable to the DLJdirectshares; that the tender offer materials disseminated in connection with Credit Suisse Group's acquisition of DLJ
(the "CSG Transaction") were false and misleading in allegedly failing to describe certain rights to the DLJdirectshares in connection with the CSG
Transaction, among other things; and that these alleged misstatements constitute violations of the federal securities laws. The Court has reserved decision on the motion.

DLJSC
entered into an agreement, dated May 21, 2001, to settle the six separate actions brought against DLJSC between September 1995 and October 1998 by
institutional investors who invested in
three hedge funds managed by David Askin (the "Funds"). DLJSC entered into an agreement, dated May 18, 2001, to settle the action brought against DLJSC in August 1997 by the Funds'
"Litigation Advisory Board" that arose out of the Funds' bankruptcy, and, on June 11, 2001, the United States District Court approved that settlement. DLJSC has funded these settlements;
releases have been obtained from the plaintiffs; and these actions have been dismissed pursuant to stipulations of dismissal filed with the Court.

On
July 6, 2001, the plaintiffs inWestern Pacific,CHS Electronicsand MDCM Holdings, three purported
class actions filed against various underwriters of initial public offering securities, including CSFB Corp. and DLJSC,
that allege the defendants conspired to fix the "fee" paid for underwriting initial public offering securities in violation of the federal antitrust laws, as well as the plaintiff in a fourth action
brought by a purported issuer,EqualNet Communications Corp. v. Goldman Sachs Group, Inc., et al.,
No. 01-Civ.-2231, filed a consolidated complaint under the captionIn re Issuer Plaintiff Initial Public Offering Fee Antitrust
Litigation, No. 00-Civ.-7804.

CSFB
Corp. has been named as a defendant in two putative class actions asserting claims arising under state law with respect to alleged misconduct in connection with initial public
offerings. First, CSFB Corp. has been sued by a putative class of issuers in initial public offerings in which CSFB Corp. acted as lead manager on the grounds that CSFB Corp. accepted excessive
brokerage commissions in exchange for allocations in initial public offerings, required investors to give CSFB Corp. a share of initial public offering profits, and used initial public offering
allocations to obtain additional investment banking business, all in breach of the underwriting agreement. Second, CSFB Corp., together with another investment bank, has also been named as a defendant
in an action brought by a putative class consisting of CSFB Corp. retail customers that purchased shares in Covad Communications. CSFB Corp. is alleged to have violated a fiduciary duty to its retail
customers by issuing favorable analyst reports in an effort to obtain investment banking business from Covad, including secondary offerings. CSFB Corp. intends to defend itself vigorously against all
of the claims asserted in these matters.

On
August 2, 2001, CSFB Corp. and five other investment banks were named as defendants in a putative class action filed with the U.S. District Court for the Southern District
of New York, alleging violations of the federal securities laws resulting from the issuance by defendants' research analysts of research reports on certain internet and technology company stocks,
which reports included "buy" recommendations that increased or sustained the trading price of the stocks, and that such reports were materially misleading because they did not disclose alleged
financial interests of the analyst or the
defendant investment banks in the subject internet or technology company. CSFB Corp. has not yet been served with the complaint in this action. CSFB Corp. intends to defend itself vigorously against
all of the claims asserted in the complaint.

We
intend to defend vigorously against all of the claims asserted in these matters.

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

24

---

arising in connection with the conduct of our businesses. Some of the actions have been brought on behalf of various classes of claimants and seek damages of material and 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.

17. Subsequent Event

On
August 1, 2001, the Company provided notice to holders of DLJ Capital Trust I preferred trust securities, of the full redemption of $200 million 8.42% redeemable
preferred trust securities, effective August 31, 2001, at a redemption price of $25 per preferred security, plus accrued and unpaid distributions to the redemption date.

25

---



MANAGEMENT'S DISCUSSION AND ANALYSIS OF  FINANCIAL CONDITION AND RESULTS OF OPERATIONS  CREDIT SUISSE FIRST BOSTON (USA), INC. AND SUBSIDIARIES

We are a global integrated investment bank serving institutional, corporate, government and individual clients. On November 3, 2000, Credit Suisse Group
acquired DLJ, which we call the Acquisition. For a complete description of the Acquisition, we refer you to our Annual Report on Form 10-K for the year ended December 31,
2000 filed with the Securities and Exchange Commission.

We
have made in this Quarterly Report on Form 10-Q for the three months ended June 30, 2001, and from time to time may otherwise make in our public filings,
press releases and discussions with our management, "forward-looking statements", within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, concerning
our operations, economic performance and financial condition, as well as our strategic objectives, including, without limitation, global expansion. 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. 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 currently anticipated because of a number of factors in addition to those discussed elsewhere herein and in our other public filings, press releases and
discussions with our management, including:



BUSINESS ENVIRONMENT

Our principal business activities, investment banking and private equity, securities underwriting, sales and trading, and correspondent and online brokerage
services, are, by their nature, highly competitive and subject to general market conditions, volatile trading markets and fluctuations in the volume of market activity. Consequently, our operations
and our results have been, and are likely to continue to be, subject to wide fluctuations reflecting the impact of many factors beyond our control,

26

---

including securities market conditions, the level and volatility of interest rates, competitive conditions and the size and timing of transactions.

Market
and economic conditions continued to be difficult in the second quarter of 2001. The slowdown in global economic growth in the second half of 2000 accelerated during the first
half of 2001. Volatile
equity markets characterized market and economic conditions in the first half of 2001. The economic slowdown in the United States has led to market uncertainty, a general decline in all of the major
stock indices from the higher levels in 2000, and a decline in merger and acquisition activity and capital market transactions in virtually all sectors. The new issue market has been severely
affected, especially in the technology area. As a consequence, our results for the second quarter of 2001 have been adversely affected. Positive fixed income results have been more than offset by the
difficult operating environment which has adversely impacted most of our other businesses, particularly mergers and acquisitions, equity capital markets and financial services.

RECENT DEVELOPMENTS

On August 1, 2001, the Company provided notice to holders of DLJ Capital Trust I preferred trust securities, of the full redemption of
$200 million 8.42% redeemable preferred trust securities, effective August 31, 2001, at a redemption price of $25 per preferred security, plus accrued and unpaid distributions to the
redemption date.

On
July 12, 2001, John J. Mack became the Chief Executive Officer of Credit Suisse First Boston, or CSFB, the business unit of which we are a part, Chairman of the Executive
Board of CSFB and Vice Chairman of the Executive Board of our ultimate parent, Credit Suisse Group. Mr. Mack has also been elected as one of our Directors and a member of the Operating
Committee of our Board of Directors, and as our President and Chief Executive Officer. Mr. Mack succeeds Allen D. Wheat, our former Director, President and Chief Executive Officer, who resigned
effective July 12, 2001. Credit Suisse Group also announced on July 12, 2001 a realignment of certain of its operations effective January 1, 2002. Under this realignment, the
asset management business of Credit Suisse Group, which is not a part of our operations, will be combined under the leadership of Mr. Mack. Prior to joining Credit Suisse Group, CSFB and us,
Mr. Mack served as President and Chief Operating Officer of Morgan Stanley Dean Witter & Co. until March 2001. In addition, effective August 1, 2001, Stephen R. Volk became
a Vice Chairman and member of the Executive Board of CSFB, was elected to the Board of Directors of CSFB and was elected as one of our Directors and, effective August 6, 2001, was elected as a
Managing Director and member of the Operating Committee of the Board of Directors of the Company. Prior to joining CSFB, Mr. Volk was the managing partner at the law firm of Shearman &
Sterling for the past 11 years.

On
July 11, 2001, we announced the execution of a definitive merger agreement whereby our direct parent, Credit Suisse First Boston, Inc. or CSFBI, will acquire the
18,400,000 shares of CSFBdirectcommon stock owned by the public for $6.00 per share in cash, or a total of approximately $110 million. On
July 24, 2001, we filed with the Securities and Exchange Commission, or the SEC, an offer to purchase for cash all of these outstanding shares. The cash tender offer is expected to close in the
third quarter of 2001.

In
July 2001, we established a Euro-Medium-Term Note program, which enables us to issue up to $5 billion of medium-term notes. This program replaces the $1.0 billion
Euro Medium-Term Note program established in April 2000.

In
June 2001, we filed a shelf registration statement with the SEC, which enables us to issue up to $5.0 billion of senior and subordinated debt securities, preferred
stock and warrants to purchase debt securities, preferred stock or other equity securities. On July 27, 2001, we issued $2.25 billion 57/8% senior notes due 2006 off this
effective shelf registration statement.

27

---

RESULTS OF OPERATIONS

We are part of the CSFB business unit of Credit Suisse Group, but our results do not reflect the overall performance of CSFB or Credit Suisse Group.

The
transfer of Credit Suisse First Boston Corporation, or CSFB Corp., Credit Suisse Group's principal U.S. registered broker-dealer subsidiary, to us by our direct parent, Credit
Suisse First Boston, Inc., or CSFBI, in November 2000 had a significant effect on our statement of financial condition and results of operations. As a result, inclusion of results of
CSFB Corp. for the six months ended June 30, 2001 increased virtually all revenue, expense and statement of financial condition line items. Because of the inclusion of CSFB Corp. from
November 3, 2000 through December 31, 2000, and for the six months ended June 30, 2001, our financial statements may not be fully comparable with prior periods. For example, due
to the size of the Acquisition, the volume of our activity for the three and six months ended June 30, 2001 has been significantly greater than for the comparable periods in the prior year
despite adverse market conditions. For more information on the transfer of CSFB Corp. to us, we refer you to our Annual Report on Form 10-K for the year ended December 31,
2000.

We
refer you to note 2 of notes to the condensed consolidated financial statements for a discussion of restructuring and merger-related costs.

Quarter Ended June 30, 2001 Compared to Quarter Ended June 30, 2000

For the three months ended June 30, 2001, total net revenues increased $529.4 million, or 33.3% to $2.1 billion. During the second quarter
of 2001, revenues increased primarily as a result of increases in investment banking and advisory, trading gains and interest and dividend income as a result of the inclusion of CSFB Corp. These
increases were offset in part by a decrease in other income. In conjunction with the Acquisition, we changed our method of allocation of underwriting revenues and related expenses to operating
segments to conform to the CSFB methodology. Accordingly, segment data has been restated to conform to the current method of managing our business. Equity Division net revenues from external sources
increased $304.9 million or 93.1% to $632.5 million, primarily as a result
of increased trading revenues and the inclusion of CSFB Corp. Investment Banking Division net revenues from external sources decreased $7.3 million or 1.6% to $450.0 million, primarily
due to a decline in underwriting and merger and acquisition fees offset in part by the inclusion of CSFB Corp. Fixed Income Division net revenues from external sources increased $274.4 million
or 228.9% to $394.3 million, principally as a result of increased trading gains in the high-yield, government bond and real estate products areas. Financial Services Division net
revenues from external sources decreased $98.0 million or 26.6% to $270.9 million, primarily as a result of decreased commission revenues in our correspondent and online brokerage
businesses, and the transfer of the asset management business to Credit Suisse Asset Management in November 2000. For more information on segment data, we refer you to note 15 of notes
to the condensed consolidated financial statements.

Principal
transactions-net, increased $343 million or 151.3% to $570.3 million, primarily as a result of gains in the Fixed Income Division, particularly in
high-yield bonds and mortgage and other real estate products, and decreases in interest rates. These increases were offset by losses on our private equity investments due to unfavorable
market conditions.

Investment
banking and advisory revenues increased $195.1 million or 26.9% to $921.3 million as a result of the inclusion of CSFB Corp. revenues and increased
underwriting revenue and fees from debt capital market transactions. These increases more than offset decreased fees in investment banking. The transfer of the asset management business to Credit
Suisse Asset Management in November 2000 partially offset these increases.

Commission
revenues decreased $50.9 million or 12.8% to $345.8 million, primarily as a result of a decline in daily trading volume in our online and correspondent
brokerage business.

28

---

Interest and dividend income, net of interest expense, increased $69.3 million or 32.6% to $282.1 million. The increase was primarily attributable to the inclusion of
CSFB Corp., offset in part by reduced interest rates on lower customer balances in the online and correspondent brokerage businesses.

Total
costs and expenses for the three months ended June 30, 2001 increased approximately $690.1 million or 51.8% to $2.0 billion, primarily due to merger-related
costs and the inclusion of CSFB Corp.

Employee
compensation and benefits increased $363.1million or 39.9% to $1.3 billion. The increase was primarily attributable to increased headcount due to the inclusion of CSFB
Corp. As is normal in our industry, a significant portion of compensation expense is a bonus amount awarded at or shortly after year-end. Bonuses are based upon a number of factors
including the profitability of each business
segment and market conditions. From time to time to attract new employees or to retain existing employees in a competitive environment, we guarantee certain minimum compensation levels. For these
reasons and as a result of the Acquisition, we provided greater bonus guarantees for 2001 than in prior fiscal years. Consistent with industry practice, certain of these guarantees are
multi-year and extend into fiscal years beyond 2001.

Occupancy
and equipment rental increased $78.9 million to $179.7 million; communications expense increased by $37.5 million to $79.8 million; brokerage,
clearing, exchange fees and other expenses increased $26.6 million to $70.5 million; and professional fees increased $36.0 million to $90.7 million, in each case
principally due to the inclusion of CSFB Corp. Merger and other related costs of $145.0 million reflect the accrual of the retention awards related to the merger. Other operating expenses
increased $3.1 million to $183.7 million.

Equity
Division pre-tax income increased $142.9 million to $176.3 million, primarily due to the inclusion of CSFB Corp. Investment Banking Division
pre-tax income decreased $418.5 million to a loss of $316.0 million, primarily as a result of decreased underwriting revenues and fees related to mergers and acquisitions
activity. Fixed Income Division pre-tax income increased $228.8 million to $260.5 million, primarily as a result of increased trading gains in high-yield,
government bonds and mortgage and other real estate products. Financial Services Division pre-tax income decreased $110.1 million to a loss of $9.0 million, primarily as a
result of decreased commissions, underwritings and interest related to our correspondent and online brokerage businesses, and the transfer of the asset management business to Credit Suisse Asset
Management.

Our
income tax provision for the second quarter of 2001 and 2000 was $27.8 million and $95.3 million, a 28.7% and 37.0% effective tax rate, respectively.

Net
income for the second quarter 2001 was $69.0 million compared with net income of $162.2 million in the second quarter of 2000.

Six Months Ended June 30, 2001 Compared to Six Months Ended June 30, 2000

For the six months ended June 30, 2001, total net revenues increased $1.2 billion, or 35.5% to $4.6 billion. During the first half of
2001, revenues increased primarily as a result of increases in investment banking and advisory, trading gains and other, primarily due to the inclusion of CSFB Corp. Included in other income is a
pre-tax gain of approximately $163 million from the assignment of the lease and sale of leasehold improvements of our former headquarters at 277 Park Avenue. These increases were
offset in part by a decrease in commission income. Equity Division net revenues from external sources increased $659.2 million or 87.8% to $1,410.3 million primarily as a result of
increased trading revenues and the inclusion of CSFB Corp. Investment Banking Division net revenues from external sources decreased $25.0 million or 2.5% to $971.7 million primarily due
to the decline in underwritings and merger and acquisition fees offset in part by the inclusion of CSFB Corp. Fixed

29

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Income Division net revenues from external sources increased $588.6 million or 187.9% to $901.9 million, principally as a result of increased trading gains in high-yield
government bond and real estate securitizations. Financial Services Division net revenues from external sources decreased $231.5 million or 27.6% to $606.9 million primarily as a result
of decreased commission revenues in our correspondent and online brokerage businesses, and the transfer of the asset management business to Credit Suisse Asset Management in November 2000.

Principal
transactions-net, increased $640.4 million or 87.8% to $1.4 billion primarily as a result of gains in the Fixed Income Division, particularly in
high-yield bonds and mortgage and other real estate products, and decreases in interest rates. These increases were offset by losses on our private equity investments due to unfavorable
market conditions.

Investment
banking and advisory revenues increased $466.2 million or 33.9% to $1.8 billion as a result of the inclusion of CSFB Corp. revenues, particularly merger and
acquisition fees, and fees for a variety of portfolio advisory and technology services in our correspondent and online brokerage businesses. The transfer of the asset management business to Credit
Suisse Asset Management in November 2000 and the contraction in the U.S. new issues market partially offset these increases.

Commission
revenues decreased $49.4 million or 5.8% to $794.9 million as a result of decreases in commissions in our online and correspondent brokerage operations due to
unfavorable market conditions. These decreases were substantially offset by the inclusion of CSFB Corp.

Interest
and dividend income, net of interest expense, increased $19.1 million or 4.6% to $435.0 million. The increase was primarily attributable to the inclusion of
CSFB Corp.

Other
income increased $137.2 million to $189.6 million primarily as a result of a pre-tax gain of approximately $163 million on the assignment of the
lease and sale of related leasehold improvements on our former headquarters.

Total
costs and expenses for the six months ended June 30, 2001 increased approximately $1.3 billion or 47.1% to $4.1 billion, primarily due to merger related
costs and the inclusion of CSFB Corp.

Employee
compensation and benefits increased $626.6 million or 31.5% to $2.6 billion. The increase was primarily attributable to increased headcount due to the inclusion
of CSFB Corp. As is normal in our industry, a significant portion of compensation expense is a bonus amount awarded at or shortly after year-end. Bonuses are based upon a number of factors
including the profitability of each business
segment and market conditions. From time to time to attract new employees or to retain existing employees in a competitive environment, we guarantee certain minimum compensation levels. For these
reasons and as a result of the Acquisition, we provided greater bonus guarantees for 2001 than in prior fiscal years. Consistent with industry practice, certain of these guarantees are
multi-year and extend into fiscal years beyond 2001.

Occupancy
and equipment rental increased $148.4 million to $339.8 million; communications expense increased by $68.0 million to $152.4 million; brokerage,
clearing, exchange fees and other expenses increased $53.3 million to $138.2 million; and professional fees increased $64.1 million to $167.2 million, in each case
primarily due to the inclusion of CSFB Corp. Merger and other related costs of $288.1 million reflect the accrual of the retention awards related to the merger. All other operating expenses
increased $55.8 million to $374.7 million, which resulted principally from rebranding costs related to the CSFBdirectname change as well
as the inclusion of CSFB Corp.

Equity
Division pre-tax income increased $272.6 million to $381.9 million principally due to the inclusion of CSFB Corp. Investment Banking Division
pre-tax income decreased $559.5 million to a loss of $301.6 million principally as a result of decreased underwritings and fees related to mergers and acquisitions activity.
Fixed Income Division pre-tax income increased $425.7 million to $539.6 million

30

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principally as a result of increased trading gains in high yield, government bonds and mortgage and real estate products. Financial Services Division pre-tax income decreased
$268.6 million to a loss of $6.3 million, principally as a result of decreased commissions and underwritings related to its correspondent and online brokerage businesses, and the
transfer of the asset management business to Credit Suisse Asset Management.

Our
income tax provision for the first half of 2001 and first half of 2000 was $184.6 million and $239.3 million, a 33.2% and 37.0% effective tax rate, respectively.

Net
income for the first half of 2001 was $372.1 million compared with net income of $407.4 million in 2000.

LIQUIDITY AND CAPITAL RESOURCES

Our assets are highly liquid with the majority consisting of securities inventories and collateralized receivables, each of which fluctuate depending on the
levels of proprietary trading and customer business. Such collateralized receivables consist primarily of resale agreements and securities borrowed both of which are secured by U.S. government and
agency securities, and marketable corporate debt
and equity securities. In addition, we have significant receivables from customers, brokers and dealers that turn over frequently. To meet client needs as a securities dealer, we may carry significant
levels of trading inventories. Because of changes relating to customer needs, economic and market conditions and proprietary trading strategies, our total assets or the individual components of total
assets may vary significantly from period to period. At June 30, 2001 and December 31, 2000, our total assets were $218.6 billion and $213.3 billion, respectively.

The
majority of our assets are financed through daily operations by repurchase agreements, financial instruments sold not yet purchased, securities loaned, bank loans, commercial
paper and payables to brokers and dealers. Short-term funding is generally obtained at rates related to federal funds, LIBOR and money market rates. Depending upon prevailing market
conditions, other borrowing costs are negotiated. We monitor overall liquidity by tracking the extent to which unencumbered marketable assets exceed short-term unsecured borrowings.

In
May 2001, we replaced our $2.8 billion credit facility with a $3.5 billion revolving credit facility available to us and CSFBI as borrowers. There were no
borrowings outstanding under this facility at June 30, 2001.

During
the quarter ended June 30, 2001 we issued $2.3 billion of medium-term notes off our existing $3.1 billion shelf. In June 2001, we filed
a new shelf registration statement with the Securities and Exchange Commission, or the SEC, which enables us to issue up to $5.0 billion of senior and subordinated debt securities, preferred
stock and warrants to purchase debt securities, preferred stock or other equity securities. On July 27, 2001, we issued $2.25 billion 57/8% senior notes due 2006 off this
effective shelf registration statement.

In
July 2001, we established a Euro Medium-Term Note program, which enables us to issue up to $5 billion of medium-term notes. This program
replaces the $1.0 billion Euro Medium-Term Note program established in April 2000.

In
conjunction with the Acquisition, CSFBI, our parent, obtained a $3.1 billion loan from us that was to mature on November 1, 2001 and bore interest at a market rate
based on LIBOR. On April 25, 2001, CSFBI, in a series of transactions, repaid the $3.1 billion loan from us, plus accrued interest and our $4.15 billion subordinated loan
agreements with CSFBI were repaid in full, including accrued interest.

Certain
of our businesses are capital intensive. In addition to normal operating requirements, capital is required to cover financing and regulatory charges on securities inventories,
private equity

31

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investments and investments in fixed assets. Our overall capital needs are continually reviewed to ensure that our capital base can appropriately support the anticipated needs of our business
divisions as well as the regulatory capital requirements of our subsidiaries. Based upon these analyses, we believe that our debt and equity base is adequate for current operating levels.

At
June 30, 2001 the credit ratings of our long-term debt and commercial paper were as follows:

Long-Term Debt

Commercial PaperFitch

A+

F-1Moody's

A1

P-1Standard & Poor's

AA-

A-1+


As
registered broker-dealers and member firms of various self-regulatory organizations, each of our broker-dealer subsidiaries, which include Donaldson, Lufkin &
Jenrette Securities Corporation, or DLJSC, and CSFB Corp., is subject to the uniform net capital rule, Rule 15c3-1 under the Securities Exchange Act of 1934. This rule specifies the
minimum level of net capital a broker-dealer must maintain and also requires that part of its assets be kept in relatively liquid form. DLJSC and CSFB Corp. are also subject to the net capital
requirements of the Commodity Futures Trading Commission and various commodity exchanges. At June 30, 2001, DLJSC and CSFB Corp. had aggregate regulatory net capital, after adjustments required
by Rule 15c3-1 of approximately $1.3 billion and $2.7 billion, respectively, which exceeded minimum net capital requirements by $1.2 billion and
$2.6 billion, respectively.

The
SEC, and various self-regulatory organizations impose rules that require notification when net capital falls below certain predefined criteria, dictate the ratio of
subordinated debt to equity in the regulatory capital composition of a broker-dealer and constrain the ability of a broker-dealer to expand its business under certain circumstances. Additionally, the
SEC's uniform net capital rule imposes certain requirements that may have the effect of prohibiting a broker-dealer from distributing or withdrawing capital and requiring prior notice to the SEC for
certain withdrawals of capital.

Compliance
with net capital requirements of these and other regulators could limit those operations of our subsidiaries that require the intensive use of capital, such as underwriting
and trading activities and
the financing of customer account balances, and also could restrict our ability to withdraw capital from our regulated subsidiaries, which in turn could limit our ability to pay our debt obligations.

At
June 30, 2001, our broker-dealer subsidiaries were in compliance with all applicable regulatory capital adequacy requirements.

Cash Flows

Our consolidated statements of cash flows classify cash flow into three broad categories: cash flows from operating activities, investing activities and
financing activities. Our net cash flows are principally associated with operating and financing activities, which support our trading, customer and banking activities.

The
inclusion of results of CSFB Corp. for the first half of 2001 had a significant effect on our financial statements, increasing virtually all revenue, expense and statement of
financial condition line items. Because of the inclusion of CSFB Corp. for the six months ended June 30, 2001, our financial statements may not be fully comparable with prior periods. Due to
the size of the Acquisition, the volume of activity of the combined entity was significantly greater than for our previous activities despite unfavorable market conditions.

32

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Six Months Ended June 30, 2001 and 2000

At June 30, 2001 and 2000, cash and cash equivalents totaled $1.9 billion and $1.8 billion, respectively, an increase of
$1.1 billion and a decrease of $0.7 billion, respectively, compared to December 31, 2000 and 1999.

Cash
(used in) provided by operating activities totaled $(12.2) billion and $1.4 billion in the first six months of 2001 and 2000, respectively. In the first six months of
2001, there were increases in assets including receivables from brokers, dealers and others of $4.3 billion, financial instruments owned of $2.8 billion and securities borrowed of
$2.2.billion and decreases in liabilities, including securities loaned of $4.2 billion and accounts payable and accrued expenses of $3.4 billion. These were offset by decreases in
assets, including receivables from customers of $0.8 billion and increases in financial instruments sold not yet purchased of $1.4 billion and obligation to return securities received as
collateral of $2.0 billion. In 2000, there were increases in assets including receivables from customers, brokers and dealers of $4.2 billion, securities borrowed of $4.5 billion
and receivables from customers of $2.1 billion. These increases were partially offset by increases in liabilities including payables to brokers, dealers and other of $4.9 billion,
securities loaned of $2.6 billion and financial instruments sold not yet purchased of $5.0 billion.

In
the first six months of 2001 and 2000, net cash provided by (used in) investing activities was $1.9 billion and $(0.2) billion, respectively. In 2001, cash was provided
primarily as a result of the prepayment of the $3.1 billion note receivable from our parent, offset in part by a decrease in other assets of $1.5 billion. In 2000, cash was used primarily to
purchase long-term corporate development investments and office facilities.

In
the first six months of 2001 and 2000, net cash provided by (used in) financing activities totaled $9.5 billion and $(1.4) billion, respectively. During the first six months
of 2001, $12.6 billion was provided by short-term financings (principally repurchase agreements), $2.3 billion of medium-term notes were issued and $0.8 billion
of medium-term notes matured. In the first six months of 2000, $3.4 billion of short-term financings were repaid, which was offset in part by the issuance of
$2.1 billion of senior notes, medium-term notes and structured borrowings.

We
believe our cash, cash equivalents and cash generated from operations and financing activities will be sufficient to meet our expected cash needs for working capital and capital
expenditures through at least the end of 2001.

DERIVATIVE FINANCIAL INSTRUMENTS

We enter into various transactions involving derivatives. 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. We enter into derivative transactions primarily for trading purposes, or to provide products for our clients. These
transactions involve options, forwards, futures and swaps. We also enter into interest rate and cross currency swaps to modify the characteristics of periodic interest payments associated with some of
our long-term debt obligations.

In
June 1998, the Financial Accounting Standards Board ("FASB") issued SFAS No. 133, which was amended by SFAS No. 137 and SFAS No. 138, and was adopted by
the Company on January 1, 2001.

For
further discussion of these matters, we refer you to note 10 of notes to the condensed consolidated financial statements for the three and six months ended June 30,
2001 included herein, and note 12 of notes to the consolidated financial statements and Management's Discussion and Analysis of Financial Condition and Results of Operations included in our
Annual Report on Form 10-K for the year ended December 31, 2000.

33

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PRIVATE EQUITY ACTIVITIES

Our private equity activities include direct investments and investments in various partnerships, for which our subsidiaries act as general partner. These
instruments are primarily in unlisted or illiquid equity or equity-related securities. At June 30, 2001 and December 31, 2000, we had investments of $0.7 billion and
$0.8 billion, respectively, and had commitments to invest up to an additional $2.4 billion and $1.6 billion, respectively.

HIGH-YIELD DEBT, MORTGAGE WHOLE LOANS AND OTHER NON-INVESTMENT-GRADE DEBT

We underwrite, trade, sell and hold high-yield debt, mortgage whole loans, senior bank and foreign sovereign debt and other
non-investment-grade debt. Due to credit considerations, liquidity of secondary trading markets and vulnerability to general economic conditions, these securities generally involve greater
risk than investment-grade securities.

We
record high-yield debt at market value, mortgage whole loans and senior bank debt at lower of cost or market value and foreign sovereign and other
non-investment-grade debt at market value or fair value. At June 30, 2001, we had long positions of high-yield debt, mortgage whole loans, and other
non-investment-grade debt of approximately $961.7 million, $9.5 billion, and $1.5 billion, respectively, and short positions of approximately $551.0 million,
$725.9 million, and $24.5 million, respectively. At December 31, 2000, we had long positions of high-yield debt, mortgage whole loans, senior bank and foreign
sovereign debt, and other non-investment-grade debt of approximately $1.1 billion, $6.9 billion, $929.4 million and $990.5 million, respectively, and short
positions of approximately $536.8 million, $1.0 million, $0.8 million and $238.1 million, respectively. Timing of the securitization of our mortgage whole loan inventory
will impact the size of our positions at any given time.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKCSFB (USA), INC.

RISK MANAGEMENT AND VALUE AT RISK

For a description of our risk management policies and procedures and the value-at-risk ("VAR") model, including such model's
assumptions and limitations, we refer you to the Management's Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for
the year ended December 31, 2000. Our trading portfolio VAR was approximately $175 million and $103 million at June 30, 2001 and December 31, 2000, respectively.

The
VAR data below shows the market risk exposures of our trading positions at June 30, 2001 and December 31, 2000. Due to the benefit of diversification the
Company-wide VAR is less than the sum of the individual components.

June 30,
2001

December 31,
2000(In millions)Trading:Interest rate risk

$
209.0

$
99.9Equity risk

$
42.4

$
32.1Foreign currency exchange risk

$
0.6

$
1.6Total

$
175.0

$
102.7


We
have equity risk on our non-trading financial instruments portfolio, which is mainly comprised of our private equity investments. We measure this equity risk using a sensitivity
analysis that estimates

34

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the potential decline in the recorded value of the investments resulting from a 10% decline in equity markets. Different assumptions could produce materially different estimates of market risk as
described in our Annual Report on Form 10-K for the year ended December 31, 2000. Our equity risk on the non-trading portfolio was approximately
$72 million and $97 million at June 30, 2001 and December 31, 2000, respectively. These non-trading market risk estimates measure the potential decline in the
recorded value of the private equity investments.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERSCSFB (USA), INC.

There were no matters submitted to a vote of our sole security holder, CSFBI, in the second quarter of 2001.

35

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PART II    OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGSCSFB (USA), Inc.

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, 2000, Quarterly Report on Form 10-Q for the three months ended March 31, 2001, or Current Reports on Form 8-Ks previously filed
in 2001. The following is an update of such proceedings:

On
May 30, 2001, DLJ Capital Funding moved to dismiss the amended complaint filed on May 1, 2001 in the bankruptcy court adversary proceeding by holders of the secured
notes issued by AmeriServe Food Distribution, Inc. ("AmeriServe"). Resolution of that motion is pending.

In
the action filed by GSC Recovery, Inc. in New Jersey State Court arising out of alleged misrepresentations and omissions relating to GSC's purchases of certain unsecured
AmeriServe notes issued on or about October 1, 1999, the Court granted in part, and denied in part, the motion to dismiss filed on March 6, 2001 by the DLJ entities named as defendants.
The plaintiffs have moved the Court to reconsider its decision and resolution of that motion is pending.

A
trial date has been set for October 1, 2001, in the action filed by Morgens Waterfall Holdings, LLC ("Morgens") in the U.S. District Court for the Southern District of New
York arising out of Morgens' purchases of the secured AmeriServe notes issued on or about October 1, 1999.

On
May 23, 2001, the DLJ defendants were served with the complaint in the action filed by Conseco Capital Management, Inc. and certain affiliated entities in the U.S.
District Court for the Southern District of New York arising out of alleged misrepresentations and omissions relating to Conseco's purchases of the secured AmeriServe notes issued on or about
October 1, 1999.

On
June 14, 2001, briefing was completed on the defendant DLJ entities' motion to dismiss the amended consolidated complaint filed by plaintiffs in the consolidated action
captionedIn re Independent Energy Holdings PLC Securities Litigationpending in the U.S. District Court for the Southern District of New York. On
July 26, 2001, the Court rendered a decision granting in part, and denying in part, the DLJ entities' motion. The Court held that plaintiffs' amended consolidated complaint states a claim
against DLJSC and DLJ International, Ltd. under the Securities Act of 1933 and against DLJSC under the Exchange Act of 1934 and also states a control person liability claim against DLJ under
the Securities Act.

On
or about March 30, 2001, the putative class actions initially filed in September 2000 in the Delaware Court of Chancery by the public shareholders of
CSFBdirectcommon stock were consolidated and captionedIn re CSFBdirect Tracking Stock Shareholders
Litigation. Plaintiffs simultaneously filed a second consolidated amended complaint asserting their original claims and adding claims that alleged that the proposed offer by
the Company, announced on March 26, 2001, to purchase all the publicly owned common stock of CSFBdirectat a price of $4 per share was unfair.
Subsequent to the Company's proposed offer to acquire all of the publicly owned CSFBdirectcommon stock for $4 per share, an additional ten putative
class actions were filed in the Delaware Chancery Court alleging that the Company's proposed offer was unfair. Those actions were then consolidated with theIn re CSFBdirect
Tracking Stock Shareholders Litigation. On July 10, 2001, the parties to the consolidated cases entered into a Memorandum of Understanding that provides for the
settlement, pending court approval, of those cases with no admission of liability by defendants.

On
April 19, 2001, the U.S. District Court for the Southern District of New York heard oral argument on the defendants' motion to dismiss the putative class action filed in
September 2000 that alleges, among other things, that certain statements in the 1999 prospectus issued in connection with the Initial Public Offering of
DLJdirectshares were false and misleading in their description of the rights attributable to the
DLJdirectshares; that the tender offer materials disseminated in connection

36

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with Credit Suisse Group's acquisition of DLJ (the "CSG Transaction") were false and misleading in allegedly failing to describe certain rights to the
DLJdirectshares in connection with the CSG Transaction, among other things; and that these alleged misstatements constitute violations of the federal
securities laws. The Court has reserved decision on the motion.

DLJSC
entered into an agreement, dated May 21, 2001, to settle the six separate actions brought against DLJSC between September 1995 and October 1998 by
institutional investors who invested in three hedge funds managed by David Askin (the "Funds"). DLJSC entered into an agreement, dated May 18, 2001, to settle the action brought against DLJSC
in August 1997 by the Funds' "Litigation Advisory Board" that arose out of the Funds' bankruptcy, and, on June 11, 2001, the United States District Court approved that settlement. DLJSC
has funded these settlements; releases have been obtained from the plaintiffs; and these actions have been dismissed pursuant to stipulations of dismissal filed with the Court.

On
July 6, 2001, the plaintiffs inWestern Pacific,CHS Electronicsand MDCM Holdings, three purported
class actions filed against various underwriters of initial public offering securities, including CSFB Corp. and DLJSC,
that allege the defendants conspired to fix the "fee" paid for underwriting initial public offering securities in violation of the federal antitrust laws, as well as the plaintiff in a fourth action
brought by a purported issuer,EqualNet Communications Corp. v. Goldman Sachs Group, Inc., et al.,
No. 01-Civ.-2231, filed a consolidated complaint under the captionIn re Issuer Plaintiff Initial Public Offering Fee Antitrust
Litigation, No. 00-Civ.-7804.

CSFB
Corp. has been named as a defendant in two putative class actions asserting claims arising under state law with respect to alleged misconduct in connection with initial public
offerings. First, CSFB Corp. has been sued by a putative class of issuers in initial public offerings in which CSFB Corp. acted as lead manager on the grounds that CSFB Corp. accepted excessive
brokerage commissions in exchange for allocations in initial public offerings, required investors to give CSFB Corp. a share of initial public offering profits, and used initial public offering
allocations to obtain additional investment banking business, all in breach of the underwriting agreement. Second, CSFB Corp., together with another investment bank, has also been named as a defendant
in an action brought by a putative class consisting of CSFB Corp. retail customers that purchased shares in Covad Communications. CSFB Corp. is alleged to have violated a fiduciary duty to its retail
customers by issuing favorable analyst reports in an effort to obtain investment banking business from Covad, including secondary offerings. CSFB Corp. intends to defend itself vigorously against all
of the claims asserted in these matters.

On
August 2, 2001, CSFB Corp. and five other investment banks were named as defendants in a putative class action filed with the U.S. District Court for the Southern District
of New York, alleging violations of the federal securities laws resulting from the issuance by defendants' research analysts of research reports on certain internet and technology company stocks,
which reports included "buy" recommendations that increased or sustained the trading price of the stocks, and that such reports were materially misleading because they did not disclose alleged
financial interests of the analyst or the defendant investment banks in the subject internet or technology company. CSFB Corp. has not yet been served with the complaint in this action. CSFB Corp.
intends to defend itself vigorously against all of the claims asserted in the complaint.

We
intend to defend vigorously against all of the claims asserted in these matters.

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 seek damages of material and
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.

37

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CSFBdirect(a combination of certain assets and liabilities as described in note 1)        Condensed
Combined Statements of Financial Condition        (In thousands)

|                                                                                                               |                                                               | June 30,
2001 |         | December 31,
2000
|-------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------- | ------------- | ------- | -----------------
|ASSETS                                                                                                         |                                                               |               |        
|Cash and cash equivalents                                                                                      |                                                               | $             | 84,533  |                  
|Short-term investments                                                                                         |                                                               |               | 25,006  |                  
|Deposit with affiliated clearing broker                                                                        |                                                               |               | 447     |                  
|Receivables from brokers, dealers and others, net                                                              |                                                               |               | 44,824  |                  
|Financial instruments owned, at market value                                                                   |                                                               |               | 49      |                  
|Office facilities, at cost (net of accumulated depreciation and amortization of $1,687 and $753, respectively) |                                                               |               | 8,690   |                  
|Investment in and advances to joint ventures                                                                   |                                                               |               | 70,939  |                  
|Long-term corporate development investments                                                                    |                                                               |               | 5,522   |                  
|Other assets                                                                                                   |                                                               |               | 12,712  |                  
|                                                                                                               |                                                               |               |         |                  
|Total Assets                                                                                                   |                                                               | $             | 252,722 |                  
|                                                                                                               |                                                               |               |         |                  
|LIABILITIES AND ALLOCATED EQUITY                                                                               |                                                               |               |        
|Liabilities:                                                                                                   |                                                               |               |         |                  
|                                                                                                               | Payables to parent and affiliates, net                        |               | $       | 31,844           
|                                                                                                               | Financial instruments sold not yet purchased, at market value |               |         |                 
|                                                                                                               | Accounts payable, accrued expenses and other liabilities      |               |         | 42,213           
|                                                                                                               |                                                               |               |         |                  
|Total liabilities                                                                                              |                                                               |               | 74,057  |                  
|                                                                                                               |                                                               |               |         |                  
|Commitments and contingencies                                                                                  |                                                               |               |        |                  
|Allocated equity                                                                                               |                                                               |               | 179,116 |                  
|Accumulated other comprehensive income (loss)                                                                  |                                                               |               | (451    | )                
|                                                                                                               |                                                               |               |         |                  
|Total allocated equity                                                                                         |                                                               |               | 178,665 |                  
|                                                                                                               |                                                               |               |         |                  
|Total Liabilities and Allocated Equity                                                                         |                                                               | $             | 252,722 |                  
|                                                                                                               |                                                               |               |         |                  

See
accompanying notes to condensed combined financial statements.

38

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CSFBdirect(a combination of certain assets and liabilities as described in note 1)        Condensed
Combined Statements of Operations        (In thousands, except per share data)

|                                                                                             |                                                                                | Three Months Ended June 30,                  |                          | Six Months Ended
June 30, |       
|-------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------ | -------------------------------------------- | ------------------------ | ------------------------- | ------
|
|Revenues:                                                                                    |                                                                                |                                              |                          |                           |       
|                                                                                             | Commissions                                                                    |                                              | $                        | 28,048                    |       
|                                                                                             | Underwritings                                                                  |                                              |                          | 673                       |       
|                                                                                             | Fees                                                                           |                                              |                          | 17,882                    |       
|                                                                                             | Interest, net of interest expense of $772, $375, $1,517 and $890, respectively |                                              |                          | 12,808                    |       
|                                                                                             |                                                                                |                                              |                          |                           |       
|                                                                                             |                                                                                |                                              | Total net revenues       |                           |       
|                                                                                             |                                                                                |                                              |                          |                           |       
|                                                                                             | Costs and expenses:                                                            |                                              |                          |                           |       
|                                                                                             |                                                                                | Compensation and benefits                    |                          |                           | 31,818
|                                                                                             |                                                                                | Brokerage, clearing, exchange fees and other |                          |                           | 9,198 
|                                                                                             |                                                                                | Advertising                                  |                          |                           | 6,782 
|                                                                                             |                                                                                | Occupancy and related costs                  |                          |                           | 7,849 
|                                                                                             |                                                                                | Communications and technology                |                          |                           | 11,990
|                                                                                             |                                                                                | Rebranding costs                             |                          |                           | 4,442 
|                                                                                             |                                                                                | Restructuring costs                          |                          |                           | 15,939
|                                                                                             |                                                                                | Merger-related retention costs               |                          |                           | 8,767 
|                                                                                             |                                                                                | Other operating expenses                     |                          |                           | 10,947
|                                                                                             |                                                                                |                                              |                          |                           |       
|                                                                                             |                                                                                |                                              | Total costs and expenses |                           |       
|                                                                                             |                                                                                |                                              |                          |                           |       
|Income (loss) before income tax provision (benefit) and equity in net loss of joint ventures |                                                                                |                                              | (48,321                  | )                         |       
|                                                                                             |                                                                                |                                              |                          |                           |       
|Income tax provision (benefit)                                                               |                                                                                |                                              | (17,638                  | )                         |       
|Equity in net loss of joint ventures                                                         |                                                                                |                                              | (411                     | )                         |       
|                                                                                             |                                                                                |                                              |                          |                           |       
|Net income (loss)                                                                            |                                                                                | $                                            | (31,094                  | )                         | $     
|                                                                                             |                                                                                |                                              |                          |                           |       
|Earnings (loss) per share:                                                                   |                                                                                |                                              |                          |                           |       
|                                                                                             | Basic                                                                          |                                              | $                        | (0.28                     | )     
|                                                                                             | Diluted                                                                        |                                              | $                        | (0.28                     | )     
|                                                                                             |                                                                                |                                              |                          |                           |       
|Weighted average notional and outstanding shares:                                            |                                                                                |                                              |                          |                           |       
|                                                                                             | Basic                                                                          |                                              |                          | 109,152                   |       
|                                                                                             | Diluted                                                                        |                                              |                          | 109,152                   |       
|                                                                                             |                                                                                |                                              |                          |                           |       
|Earnings (loss) attributable to:                                                             |                                                                                |                                              |                          |                           |       
|                                                                                             | CSFB (USA) Retained Interest                                                   |                                              | $                        | (25,852                   | )     
|                                                                                             | CSFBdirectCommon Stock                                                         |                                              | $                        | (5,242                    | )     
|                                                                                             |                                                                                |                                              |                          |                           |       
|CSFBdirectCommon Stock earnings (loss) per share:                                            |                                                                                |                                              |                          |                           |       
|                                                                                             | Basic                                                                          |                                              | $                        | (0.28                     | )     
|                                                                                             | Diluted                                                                        |                                              | $                        | (0.28                     | )     
|                                                                                             |                                                                                |                                              |                          |                           |       
|CSFBdirectCommon Stock weighted average common shares:                                       |                                                                                |                                              |                          |                           |       
|                                                                                             | Basic                                                                          |                                              |                          | 18,400                    |       
|                                                                                             | Diluted                                                                        |                                              |                          | 18,400                    |       
|                                                                                             |                                                                                |                                              |                          |                           |       

See
accompanying notes to condensed combined financial statements.

39

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CSFBdirect(a combination of certain assets and liabilities as described in note 1)        Condensed
Combined Statements of Changes in Allocated Equity        For the Year Ended December 31, 2000 and the Six Months Ended June 30, 2001

|                                    |                                   | Allocated Equity |         | Accumulated Other Comprehensive Income (Loss) |   | Total
Allocated Equity |  
|----------------------------------- | --------------------------------- | ---------------- | ------- | --------------------------------------------- | - | ---------------------- | -
|
|Balances at December 31, 1999       |                                   | $                | 230,662 |                                               | $ | 1,130                  |  
|Net loss                            |                                   |                  | (7,930  | )                                             |   |                       |  
|Translation adjustmentnet of taxes |                                   |                  |        |                                               |   | (572                   | )
|                                    | Total comprehensive income (loss) |                  |         |                                              |   |                        |  
|                                    |                                   |                  |         |                                               |   |                        |  
|Balances at December 31, 2000       |                                   |                  | 222,732 |                                               |   | 558                    |  
|Net loss                            |                                   |                  | (72,616 | )                                             |   |                       |  
|Translation adjustmentnet of taxes |                                   |                  |        |                                               |   | (1,009                 | )
|                                    | Total comprehensive income (loss) |                  |         |                                              |   |                        | 
|Capital contribution                |                                   |                  | 29,000  |                                               |   |                       |  
|                                    |                                   |                  |         |                                               |   |                        |  
|Balances at June 30, 2001           |                                   | $                | 179,116 |                                               | $ | (451                   | )
|                                    |                                   |                  |         |                                               |   |                        |  

See
accompanying notes to condensed combined financial statements.

40

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CSFBdirect(a combination of certain assets and liabilities as described in note 1)        Condensed
Combined Statements of Cash Flows        (In thousands)        For the Six Months Ended June 30, 2001 and 2000

|                                                 |                                                                                                    | 2001 |                      | 2000    |  
|------------------------------------------------ | -------------------------------------------------------------------------------------------------- | ---- | -------------------- | ------- | -
|Cash flows from operating activities:            |                                                                                                    |      |                      |         |  
|                                                 | Net income (loss)                                                                                  |      | $                    | (72,616 | )
|                                                 | Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |      |                      |         |  
|                                                 | Depreciation and amortization                                                                      |      |                      | 1,252   |  
|                                                 | Deferred taxes                                                                                     |      |                      | 1,942   |  
|                                                 | Equity in net loss of joint venture                                                                |      |                      | 4,130   |  
|(Increase) decrease in operating assets:         |                                                                                                    |      |                      |         |  
|                                                 | Deposit with affiliated clearing broker                                                            |      |                      |        |  
|                                                 | Receivables from brokers, dealers and other, net                                                   |      |                      | (16,409 | )
|                                                 | Financial instruments owned, at market value                                                       |      |                      | 329     |  
|                                                 | Other assets                                                                                       |      |                      | (9,114  | )
|Increase (decrease) in operating liabilities:    |                                                                                                    |      |                      |         |  
|                                                 | Payables to parent and affiliates, net                                                             |      |                      | 4,171   |  
|                                                 | Financial instruments sold, not yet purchased, at market value                                     |      |                      | (115    | )
|                                                 | Accounts payable, accrued expenses and other liabilities                                           |      |                      | 15,491  |  
|                                                 |                                                                                                    |      |                      |         |  
|                                                 | Net cash provided by (used in) operating activities                                                |      |                      | (70,939 | )
|                                                 |                                                                                                    |      |                      |         |  
|Cash flows from investing activities:            |                                                                                                    |      |                      |         |  
|Net proceeds from (payments for):                |                                                                                                    |      |                      |         |  
|                                                 | Purchase of long-term corporate development investments                                            |      |                      |        |  
|                                                 | Purchase of office facilities                                                                      |      |                      | (9,115  | )
|                                                 | Investment in and advances to joint ventures                                                       |      |                      | (28,125 | )
|                                                 | Short-term investments                                                                             |      |                      | 22,152  |  
|                                                 |                                                                                                    |      |                      |         |  
|Net cash (used in) investing activities          |                                                                                                    |      | (15,088              | )       |  
|                                                 |                                                                                                    |      |                      |         |  
|Cash flows from financing activities:            |                                                                                                    |      |                      |         |  
|Net proceeds from:                               |                                                                                                    |      |                      |         |  
|                                                 |                                                                                                    |      | Capital contribution |         |  
|                                                 |                                                                                                    |      |                      |         |  
|Net cash provided by financing activities        |                                                                                                    |      | 29,000               |         |  
|                                                 |                                                                                                    |      |                      |         |  
|Decrease in cash and cash equivalents            |                                                                                                    |      | (57,027              | )       |  
|Cash and cash equivalents at beginning of period |                                                                                                    |      | 141,560              |         |  
|                                                 |                                                                                                    |      |                      |         |  
|Cash and cash equivalents at end of period       |                                                                                                    | $    | 84,533               |         | $
|                                                 |                                                                                                    |      |                      |         |  

See
accompanying notes to condensed combined financial statements.

41

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CSFBdirect(a combination of certain assets and liabilities as described in note 1)        Notes to
Condensed Combined Financial Statements        June 30, 2001

1.  Basis of Presentation

CSFBdirectrepresents a combination of the assets and liabilities of the online discount brokerage and related
investment services business of Credit Suisse First Boston (USA), Inc. ("CSFB (USA), Inc."), rather than a separately incorporated entity. CSFB (USA), Inc. became an indirect
wholly owned subsidiary of Credit Suisse Group ("CSG"), a corporation organized under the laws of Switzerland, as a result of an acquisition, which was completed on November 3, 2000 (the
"Acquisition"). The Acquisition did not have an effect on the outstanding shares of CSFBdirecttracking stock. Costs incurred as a
result of the name change are included in rebranding costs in the condensed combined statements of operations.

CSFBdirectCommon Stock tracks the separate performance of these businesses for periods subsequent to the date of the offering
("Tracking Stock"). On May 28, 1999, CSFB (USA), Inc. issued in an initial public offering 18.4 million shares of CSFBdirectCommon
Stock. The shares of Tracking Stock have no voting rights, except in certain limited circumstances, and holders of the Tracking Stock do not have any claims to the net assets of
CSFBdirect. Prior to the offering, CSFB (USA), Inc. designated its existing common stock as CSFB (USA) Common Stock, which represents the
performance of CSFB (USA), Inc.'s primary businesses plus a retained interest in CSFBdirect. All of CSFB (USA), Inc.'s businesses other
than those included in CSFBdirect, plus its retained interest in CSFBdirect, are referred to as CSFB
(USA). As a result of the offering, CSFB (USA) had a retained interest of 82.1% in CSFBdirectrepresented by 84.3 million notional shares. The
18.4 million shares of Tracking Stock reflect the 17.9% owned by the public, except as described below. Prior to the offering, CSFB (USA) had a 100% interest in the earnings of
CSFBdirect. As a result of its $29.0 million capital contribution on March 29, 2001, CSFB (USA)'s retained interest increased to 83.1%,
represented by 90.8 million notional shares.

On
July 11, 2001, CSFB (USA), Inc. announced the execution of a definitive merger agreement whereby Credit Suisse First Boston, Inc., the direct parent of CSFB
(USA), Inc., will acquire the 18.4 million shares of CSFBdirectCommon Stock owned by the public for $6.00 per share in cash, or a total
of approximately $110 million. On July 24, 2001, CSFB (USA), Inc. filed with the Securities and Exchange Commission an offer to purchase for cash all of these outstanding shares.
The cash tender offer is expected to close in the third quarter of 2001.

The
Tracking Stock initially consisted principally of the assets, liabilities, revenues and expenses of CSFB (USA), Inc.'s ultimate 100% equity interest in
CSFBdirectHoldings Inc. (subsequent to June 1, 1997) and CSFB (USA), Inc.'s online discount brokerage division (prior to
June 2, 1997). CSFBdirectmay also include such other related assets and liabilities of CSFB (USA), Inc. as the Board of Directors of CSFB
(USA), Inc. may deem appropriate in the future.

Even
though CSFB (USA), Inc. has allocated certain assets, liabilities, revenues, expenses and cash flows to CSFBdirect, that
allocation will not change the legal title to any assets or responsibility for any liabilities and will not affect the rights of creditors. Holders of Tracking Stock are common stockholders of CSFB
(USA), Inc. and are subject to all the risks associated with an investment in CSFB (USA), Inc. and all of its businesses, assets and liabilities. Material financial events, which may
occur at CSFB (USA), Inc., may affect CSFBdirect's results of operations or financial position. Accordingly,

42

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financial information for CSFBdirectshould be read in conjunction with financial information of CSFB (USA), Inc. included herein.

Certain
financial information that is normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of
America but is not required for interim reporting purposes has been condensed or omitted. These condensed combined financial statements reflect, in the opinion of management, all adjustments
(consisting of normal, recurring accruals) necessary for a fair presentation of the condensed combined financial position and results of operations for the interim periods presented. The results of
operations for interim periods are not necessarily indicative of results for the entire year. These financial statements should be read in conjunction with the combined financial statements and notes
thereto as of and for the year ended December 31, 2000 included in CSFB (USA), Inc.'s Annual Report on Form 10-K for the year ended December 31, 2000.

To
prepare condensed combined financial statements in conformity with accounting principles generally accepted in the United States of America, management must estimate certain
amounts that affect the reported assets and liabilities, disclosure of contingent assets and liabilities, and reported revenues and
expenses. Actual results could differ from those estimates. Certain other reclassifications have been made to prior year combined financial statements to conform to the 2001 presentation.

2.  Restructuring Costs and Merger-Related Costs

During the six months ended June 30, 2001, restructuring costs of approximately $24.9 million were incurred by
CSFBdirectas a result of the closing of CSFBdirect's Parsippany, New Jersey office and the elimination
of positions in other sites in addition to the termination of 180 employees and closing of one of the offices in Charlotte, North Carolina. These costs are included in the accompanying condensed
combined statements of operations as follows:

(in thousands)Compensation and benefits

$
8,634Occupancy and related costs


13,303Communications and technology


2,486Other


503Total restructuring costs

$
24,926


Merger-related
retention costs of $8.8 million represent the amortization of retention awards related to the Acquisition over the life of the awards.

3.  Related Party Transactions

CSFBdirecttransacts business with a group of companies affiliated through common majority ownership with CSFB
(USA), Inc., and has various transactions and relationships with members of the group. Due to these relationships, it is possible that the terms of these transactions are not the same as those
that would result from transactions among unrelated parties.

On
March 29, 2001, CSFBdirectreceived a $29.0 million capital contribution as reimbursement for
CSFBdirect's rebranding expenses (net of taxes).

43

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CSFBdirectreceived two Japanese Yen denominated notes receivable from DLJdirectSFG
Securities Inc., a 50% owned joint venture in Japan, in the US dollar equivalent amounts of $17.3 million and $24.2 million. The notes bear interest at 1.61% and 3.66%, and mature
on September 28, 2001 and March 21, 2007, respectively. Simultaneously, CSFBdirectpurchased two foreign exchange contracts for the US
dollar equivalent amounts of the notes. These notes are included in investment in and advances to joint ventures in the condensed combined statements of financial condition.

4.  Net Capital

CSFBdirectincludes CSFBdirectInc., a registered
broker-dealer and a member of the National Association of Securities Dealers, Inc. ("NASD"). CSFBdirectInc. is subject to the minimum net
capital requirements of the Securities and Exchange Commission and the NASD. As such, it is subject to the NASD's net capital rule, which conforms to the Uniform Net Capital Rule pursuant to
Rule 15c3-1 under the Securities Exchange Act of 1934. As a broker-dealer who does not carry customer accounts, under the alternative method permitted by this rule, the required net
capital, as defined, shall not be less than $250,000. At June 30, 2001, CSFBdirectInc.'s net capital of $25.5 million was in
excess of the minimum requirement by $25.2 million.

CSFBdirect's London-based broker-dealer affiliate, CSFBdirectLtd., is subject
to the requirements of the Securities and Futures Authority, a self-regulatory organization established pursuant to the U.K. Financial Services Act of 1986. At June 30, 2001,
CSFBdirectcomplied with all applicable regulatory capital adequacy requirements.

5.  Income Taxes

CSFBdirectis part of a group that files consolidated Federal income tax returns.
CSFBdirectsettles all taxes with CSFB (USA), Inc. under a tax sharing arrangement. Taxes are provided and presented as if
CSFBdirectfiled a separate return.

6.  Earnings Per Share

Earnings (loss) per share amounts have been calculated by dividing net income (loss) by the weighted average notional and outstanding shares of Tracking Stock.
The notional shares represent CSFB (USA)'s retained interest in CSFBdirect. Prior to the offering, CSFB (USA) had a 100% interest in the earnings of
CSFBdirect. As a result of the $29.0 million capital contribution on March 29, 2001, CSFB (USA)'s retained interest increased to 83.1%,
represented by 90.8 million notional shares.

Tracking
Stock earnings per common share amounts have been calculated by dividing earnings applicable to common shares by the weighted average actual common shares outstanding.

44

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The numerators and denominators of the basic and diluted earnings per common share computations include the following items:

|                                                    |               | Three Months Ended |         | Six Months Ended
|--------------------------------------------------- | ------------- | ------------------ | ------- | ----------------
|
|
|
|Basic earnings (loss) applicable to common shares   |               | $                  | (31,094 | )               
|                                                    |               |                    |         |                 
|Effect of dilutive securities:                      |               |                    |         |                 
|                                                    | Stock options |                    | $       |                
|                                                    |               |                    |         |                 
|Diluted earnings (loss) applicable to common shares |               | $                  | (31,094 | )               
|                                                    |               |                    |         |                 
|CSFBdirectCommon Stock                              |               |                    |         |                 
|Basic earnings (loss) applicable to common shares   |               | $                  | (5,242  | )               
|                                                    |               |                    |         |                 
|Effect of diluted stock options:                    |               |                    |         |                 
|                                                    | Stock options |                    | $       |                
|                                                    |               |                    |         |                 
|Diluted earnings (loss) applicable to common shares |               | $                  | (5,242  | )               
|                                                    |               |                    |         |                 

---

7.  Commitments and Contingent Liabilities

CSFBdirectHoldings Inc. has issued a $5.0 million letter of credit guaranteeing obligations of
Hutchison CSFBdirectLimited, a 50% owned joint venture in Hong Kong. As of June 30, 2001, there was no balance outstanding.

CSFBdirectHoldings Inc. has guaranteed a $13.0 million five-year credit facility issued to an affiliate. As
of June 30, 2001, $6.6 million was outstanding under this agreement, and is included in accounts payable, accrued expenses and other liabilities in the condensed combined statements of
financial condition.

8.  Legal Proceedings

CSFBdirecthas been named a defendant in actions relating to its businesses. While the ultimate outcome of
litigation involving CSFBdirectcannot be predicted with certainty, management, having reviewed these actions with its counsel, believes it has
meritorious defenses to all such actions and intends to defend each of these vigorously. In the opinion of management of CSFBdirect, the ultimate
resolution of all litigation, regulatory and investigative matters affecting CSFBdirectwill not have a material adverse effect on the financial
condition or results of operations of CSFBdirect.

For
a more detailed description of litigation involving CSFBdirect, we refer you to note 16 of the Notes to the Condensed
Consolidated Financial Statements of CSFB (USA), Inc.

45

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9.  Subsequent Event

On July 11, 2001, CSFB (USA), Inc. announced the execution of a definitive merger agreement whereby Credit Suisse First Boston Inc., the
direct parent of CSFB (USA), Inc., will acquire the 18.4 million shares of CSFBdirectCommon Stock owned by the public for $6.00 per share
in cash, or a total of approximately $110 million. On July 24, 2001, CSFB (USA), Inc. filed with the Securities and Exchange Commission an offer to purchase for cash all of these
outstanding shares. The cash tender offer is expected to close in the third quarter of 2001.

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCSFBdirect

CSFBdirectrepresents a combination of the assets and liabilities of our online discount brokerage and related
investment services business, rather than a separately incorporated entity. On May 28, 1999, we issued in an initial public offering 18.4 million shares of our non-voting
common stock, CSFBdirectCommon Stock. CSFBdirectCommon Stock tracks the separate performance of
CSFBdirect. The shares of our voting common stock, CSFB (USA) Common Stock, reflect the performance of our primary businesses, i.e., Equity, Investment
Banking, Fixed Income and Financial Services Divisions, plus our retained interest in
CSFBdirect. All of our businesses other than those included in CSFBdirectplus our retained interest in
CSFBdirectare referred to as CSFB (USA). Earnings applicable to CSFB (USA) Common Stock include a 100% interest in
CSFBdirectfor periods prior to May 28, 1999 and 82.1% thereafter, except as described below. The 18.4 million shares of
CSFBdirectCommon Stock represent the 17.9% owned by the public. On March 29, 2001, CSFBdirectreceived a $29.0 million capital contribution to reimburse the rebranding expenses (net of taxes) in connection with the name change from
DLJdirectto CSFBdirect. As a result of this capital contribution, CSFB (USA)'s retained interest
increased to 83.1% and the minority interest held by the public was reduced to 16.9%.

The
following analysis of the results of operations and financial condition of CSFBdirectshould be read in conjunction with the
Condensed Combined Financial Statements and the related Notes thereto, and with the Condensed Consolidated Financial Statements and related Notes of CSFB (USA), Inc. included elsewhere herein.

BUSINESS ENVIRONMENT

The online discount brokerage industry is experiencing substantial competition from established financial services firms as well as new entrants which are
trying quickly to establish their presence in the market. As a result of intense competitive pressures, the industry has experienced a significant increase in brand development costs, a lowering of
commission pricing and an increase in content development costs.

RECENT DEVELOPMENTS

CSFB (USA), Inc. became an indirect wholly owned subsidiary of Credit Suisse Group as a result of the Acquisition on November 3, 2000. The
Acquisition did not have an effect on the outstanding shares of CSFBdirectCommon Stock.

Effective
January 15, 2001, CSFB (USA), Inc. changed the name of DLJdirectto
CSFBdirect. Costs incurred as a result of the name change are included in rebranding costs in the combined statements of operations. On March 29,
2001, CSFBdirectreceived a $29.0 million capital contribution to reimburse the rebranding expenses (net of taxes).

On
March 14, 2001, we closed CSFBdirect's Parsippany, New Jersey call center and made staff reductions of 139, or approximately
8% of U.S. employees for CSFBdirect, as part of its cost-containment initiatives. CSFBdirectrecorded a pre-tax charge of approximately $9.0 million in the first quarter of 2001, consisting of employee termination benefit payments and costs related to leases of property and
equipment.

46

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In May 2001, we eliminated 180 positions in Jersey City and East Brunswick, New Jersey and Charlotte, North Carolina. In addition, we reduced space requirements in Jersey City
and Charlotte. CSFBdirectincurred a pre-tax charge of approximately $15.9 million in connection with these reductions.

On
July 11, 2001, CSFB (USA), Inc. announced the execution of a definitive merger agreement whereby CSFB Inc., the direct parent of CSFB (USA), Inc. will
acquire the 18.4 million shares of CSFBdirectCommon Stock owned by the public for $6.00 per share in cash, or a total of approximately
$110 million. On July 24, 2001, CSFB (USA), Inc. filed with the Securities and Exchange Commission an offer to purchase for cash all of these outstanding shares. The cash tender
offer is expected to close in the third quarter of 2001.

RESULTS OF OPERATIONS

Quarter Ended June 30, 2001 Compared to Quarter Ended June 30, 2000

CSFBdirect's total net revenues decreased $24.2 million or 28.9% to $59.4 million. This decrease
was due primarily to a decline in commissions.

Commission
revenues decreased $17.5 million or 38.5% to $28.0 million. The decrease was due primarily to significant decreases in customer trading volume. Average trades
per day decreased 42.6% to 17,000 for the quarter ended June 30, 2001 from 29,600 for the quarter ended June 30, 2000. Commission revenues represented 47.1% and 54.4% of total net
revenues for the quarters ended June 30, 2001 and 2000, respectively.

Underwriting
revenues decreased $921,000 or 57.8% to $0.7 million. This decrease was due primarily to the slowdown in underwriting activity as well as a decline in market
activity.

Fee
revenues increased $0.2 million or 1.1% to $17.9 million. Fees for technology development increased $2.2 million or 23.2% to $11.7 million, primarily
due to increased demand for Internet-based technology applications. Payments for routing orders decreased $2.8 million or 68.3% to $1.3 million, due primarily to significant decreases in
customer trading volume, as well as to a decline in the amount of revenue per trade that CSFBdirectreceived for routing orders. Revenue from money
market fund distribution fees increased $0.9 million or 31.0% to $3.8 million due to an increase in customer money market fund balances of $586.0 million or 30.6% to
$2.5 billion. Fee revenues represented 30.1% and 21.2% of total net revenues for the quarters ended June 30, 2001 and 2000, respectively.

Interest,
net of interest expense, decreased $6.0 million or 31.9% to $12.8 million. This decrease was due primarily to decreases in margin debits and free credits.
Margin debits decreased $833.4 million or 48.4% to $888.7 million. Free credits decreased $71.6 million or 9.7% to $663.7 million and short sale balances increased
$28.7 million or 36.6% to $107.1 million. Interest, net of interest expense, represented 21.5% and 22.5% of total net revenues for the quarters ended June 30, 2001 and 2000,
respectively.

Total
costs and expenses increased $16.2 million or 17.7% to $107.7 million.

Compensation
and benefits increased $4.8 million or 17.8% to $31.8 million. This increase was due primarily to growth in the number of employees in the latter half of
2000 primarily in CSFBdirect's investor services area to accommodate increased customer activity in 2000 and in
CSFBdirect's technology group to develop new products. In May 2001, as part of a reorganization,
CSFBdirectlaid off 180 individuals, which had a small impact on the amount of compensation and benefits for the quarter ended June 30, 2001.

Brokerage,
clearing, exchange and other fees decreased $3.7 million or 28.7% to $9.2 million primarily due to significant decreases in customer trading volume and lower
clearing fees per trade resulting from reduced clearing rates.

47

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Advertising costs decreased $13.2 million or 66.0% to $6.8 million due primarily to the decision to reduce advertising expenditures because market activity and account
openings decreased significantly.

Occupancy
and related costs increased $4.7 million or 151.6% to $7.8 million due primarily to the opening of two investor services facilities, one in Charlotte, North
Carolina and the other in Sandy City, Utah, new technology centers in East Brunswick, New Jersey and Chennai, India, and the expansion of
CSFBdirect's headquarters.

Communications
and technology costs increased $0.6 million or 5.3% to $12.0 million.

Rebranding
costs of $4.4 million were incurred because of the name change from DLJdirectto
CSFBdirectas a result of the Acquisition.

Restructuring
costs of $15.9 million were incurred as a result of staff reductions and reduced office space in both Jersey City, New Jersey and Charlotte, North Carolina.

Merger-related
retention costs of $8.8 million were allocated to CSFBdirectas a result of the Acquisition.

Other
operating expenses decreased $6.2 million or 36.3% to $10.9 million. Operating expenses are comprised of professional fees, printing and stationery, economic and
investment research, allocated overhead and miscellaneous expenses. Professional fees primarily include payments made to technology
and marketing consultants and recruiters, and for legal services. Professional fees decreased $2.1 million or 32.8% to $4.3 million primarily due to program reductions. Miscellaneous
expenses decreased $1.9 million or 31.1% to $4.2 million, consisting primarily of travel and entertainment, information services, customer service related expenses, employee registration
fees and expenses for new account credit checks.

Income
(loss) before income tax provision (benefit) and equity in net loss of joint ventures decreased $40.4 million to a loss of $48.3 for the quarter ended June 30,
2001. The (benefit) for income taxes for the quarters ended June 30, 2001 and 2000 was $(17.6) million and $(3.4) million, representing a 36.5% and 42.3% effective tax rate, respectively.

CSFBdirecthas a 50% interest in foreign-based joint ventures in Japan, Hong Kong and the Middle East. For the quarters ended
June 30, 2001 and 2000, CSFBdirect's share of the equity in the net loss of these joint ventures was $0.4 million and $2.1 million,
respectively.

CSFBdirectreported a net loss of $31.1 million for the quarter ended June 30, 2001 as compared with net loss of
$6.6 million for the quarter ended June 30, 2000. For the quarter ended June 30, 2001, net loss applicable to the shareholders of
CSFBdirectCommon Stock was $5.2 million or $0.28 per share.

Six Months Ended June 30, 2001 Compared to Six Months Ended June 30, 2000

CSFBdirect'stotal net revenues decreased $67.0 million or 33.9% to $130.8 million. This decrease
was due primarily to a decline in commissions.

Commissions
decreased $58.6 million or 48.8% to $61.5 million. Commissions represented 47.0% of total revenues for the six months ended June 30, 2001 and 60.7% of
total revenues for the six months ended June 30, 2000. The decrease in commissions was due primarily to decreases in customer trading volume. Average trades per day decreased 50.0% from 38,000
for the six months ended June 30, 2000 to 19,000 for the six months ended June 30, 2001.

Underwritings
decreased $3.8 million or 80.8% to $900,000. This decrease was due primarily to the slowdown in underwriting activity as well as a decline in market activity.

Fees
increased $3.6 million or 9.9% to $40.0 million. Fees represented 30.6% of total net revenues for the six months ended June 30, 2001 and 18.4% of total net
revenues for the six months ended June 30, 2000. Payments for routing orders decreased $6.8 million or 62.4% to $4.1 million. The decrease in payments for routing orders was due
primarily to a decrease in average trades per day as

48

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well as a decline in the amount of revenue per trade that CSFBdirectreceives for routing orders. Fees for technology development increased
$8.4 million or 46.9% to $26.3 million primarily due to increased demand from related entities for Internet-based technology applications. Revenue from money market fund distribution
fees increased $2.1 million or 41.2% to $7.2 million. This growth was due to an increase in customer money market fund balances of $586.0 million or 30.6% to $2.5 billion.

Interest,
net of interest expense, decreased $8.1 million or 22.1% to $28.5 million. Interest represented 21.8% of total net revenues for the six months ended
June 30, 2000 and 18.5% of total net revenues for the six months ended June 30, 2001. The decrease was due primarily to decreases in margin debits and free credits. Margin debits
decreased $833.4 million or 48.4% to $888.7 million. Free credits decreased $71.6 million or 9.7% to $663.7 million and short sale balances increased $28.7 million
or 36.6% to $107.1 million.

Total
costs and expenses increased $61.4 million or 34.1% to $241.7 million.

Compensation
and benefits increased $14.6 million or 26.9% to $68.8 million. The increase in compensation and benefits was due primarily to growth in the number of
employees in the latter half of 2000 primarily in CSFBdirect's investor services areas to accommodate increased customer activity in 2000 and in
CSFBdirect's technology group to develop new products. In May 2001, as part of a reorganization,
CSFBdirectlaid off 180 individuals, which had a small impact on the amount of compensation and benefits for the six months ended June 30, 2001.

Brokerage,
clearing, exchange and other fees decreased $12.1 million or 38.4% to $19.4 million. The decrease in brokerage, clearing, exchange and other fees was
primarily due to significant decreases in customer trading volume, and lower clearing fees per trade resulting from reduced clearing rates.

Advertising
costs decreased $20.1 million or 52.8% to $18.0 million as a result of the decision to reduce advertising expenditures because market activity and account
openings decreased significantly.

Occupancy
and related costs increased $10.1 million or 183.6% to $15.6 million primarily due to the opening of two investor services facilities, one in Charlotte, North
Carolina and the other in Sandy City, Utah, new technology centers in East Brunswick, New Jersey and Chennai, India, and the expansion of
CSFBdirect's headquarters.

Communications
and technology costs increased $1.6 million or 7.4% to $23.1 million.

Rebranding
costs of $38.9 million were incurred because of the name change from DLJdirectto
CSFBdirectas a result of the Acquisition.

Restructuring
costs of $24.9 million were incurred as a result of staff reductions, the closing of the Parsipanny, New Jersey call center, and reduced office space in both
Jersey City, New Jersey and Charlotte, North Carolina.

Merger-related
retention costs of $8.8 million were allocated to CSFBdirectas a result of the Acquisition.

Other
operating expenses decreased $5.1 million or 17.3% to $24.4 million. Professional fees increased $1.0 million or 9.7% to $11.3 million. Miscellaneous
expenses decreased $4.7 million or 41.2% to $6.7 million. Miscellaneous expenses consisted primarily of travel and entertainment, information services, customer service related expenses,
employee registration fees and expenses for new account credit checks.

Income
(loss) before income tax provision and equity in net loss of joint ventures decreased $128.5 million from income of $17.6 million for the six months ended
June 30, 2000 to loss of $110.9 million for the six months ended June 30, 2001. The provision (benefit) for income taxes for the six months ended June 30, 2001 and for the
six months ended June 30, 2000 was $(42.4) million, representing a 38.3% effective tax rate, and $7.3 million, representing a 41.6% effective tax rate, respectively.

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CSFBdirecthas a 50% interest in foreign-based joint ventures in Japan, Hong Kong and the Middle East. For the six months ended
June 30, 2001 and 2000, CSFBdirect's share of the equity in the net loss of the these joint ventures was $4.1 million and
$3.3 million, respectively.

CSFBdirectreported a net loss of $72.6 million for the six months ended June 30, 2001 as compared with net income of
$7.0 million for the six months ended June 30, 2000. Net loss applicable to the shareholders of CSFBdirectCommon Stock was
$12.7 million of $0.69 per share for the six months ended June 30, 2001.

LIQUIDITY AND CAPITAL RESOURCES

The principal sources of liquidity for CSFBdirect's operations are allocated capital and leases of fixed assets
through an affiliate. The value of equipment acquired through leases of fixed assets through an affiliate totaled $21.6 million for the six months ended June 30, 2001 and
$18.0 million for the six months ended June 30, 2000. These fixed assets were comprised primarily of computers and related systems, furniture and leasehold improvements.

Although
CSFBdirectmaintains substantial money market accounts, bank accounts and investment accounts consistent with regulatory
requirements, CSFBdirectcontinues to be substantially dependent on us for almost all of its daily financial, administrative and operational services
and related support functions including cash management, the receipt of payments from third parties and the distribution of payments to third parties.
CSFBdirectcontinues to invest its excess cash. At June 30, 2001, CSFBdirecthad approximately
$109.5 million invested in money market accounts and short-term investments. CSFB (USA) intends to fund CSFBdirect's liquidity needs
in the ordinary course of business. However, significant expenditures will be funded on a case-by-case basis as determined by CSFB (USA)'s Board of Directors. CSFB (USA)'s
Board of Directors will determine whether to provide any particular funds to either CSFB (USA) or CSFBdirectand will not be obligated to do so. In this
connection, intercompany receivables/payables are settled periodically through cash transfers to and from CSFBdirect's accounts. There are no specific
criteria to determine when we will account for a cash transfer as a long-term loan, a capital contribution or a return of capital rather than an inter-group revolving credit advance. CSFB
(USA)'s Board of Directors will make such a determination in the exercise of its business judgment at the time of such transfer, or the first of such type of transfer, based upon all relevant
circumstances.

Applicable
law and regulations require minimum levels of capital to be maintained by CSFBdirectInc., the broker-dealer
subsidiary of CSFBdirectHoldings Inc. Consequently, the cash balances of CSFBdirectInc.
may not be available as a source of liquidity to support other aspects of the business of CSFBdirect. The net capital rules of the SEC are the primary
regulatory restrictions. CSFBdirectcontinually reviews the capital in its broker-dealer subsidiary to ensure that it meets these regulatory requirements
and can appropriately support the anticipated capital needs of the business. CSFBdirect's right to participate in the assets of any subsidiary is also
subject to prior claims of the subsidiary's customers and other creditors.

Cash
used in operating activities totaled $70.9 million for the six months ended June 30, 2001, and cash provided by operations was $7.4 million for the six
months ended June 30, 2000. The changes were primarily due to decreases in transaction volume related to the decline in the online brokerage operations. For the six months ended June 30,
2001, there were increased assets, including increases in receivables from brokers, dealers and other, net of $16.4 million and other assets of $9.1 million. This increase was offset in
part by an increase in payables to parent and affiliates, net of $4.2 million and an increase in accounts payable, accrued expenses and other liabilities of $15.5 million. For the six
months ended June 30, 2000, there were increased assets including receivables from brokers, dealers and other, net of $0.8 million. These increases were offset by increases in payables
to parent and affiliates, net of $2.0 million.

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Cash used in investing activities totaled $15.1 million and $56.1 million for the six months ended June 30, 2001 and 2000, respectively. For the six months ended
June 30, 2001, CSFBdirectreceived proceeds of $22.2 million from the sale of short-term investments and invested and advanced
$28.1million in connection with existing interests in several foreign joint ventures. For the six months ended June 30, 2000, CSFBdirectinvested
$36.3 million in short-term investments and $14.9 million in connection with its existing 50% interest in a joint venture with a Japanese bank.

Net
cash provided by financing activities for the six months ended June 30, 2001 totaled $29.0 million received as a capital contribution as reimbursement for rebranding
expenses (net of taxes).

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

CSFBdirect's primary financial instruments are cash and cash equivalents. This includes cash in banks and
highly rated liquid money market investments. CSFBdirectbelieves that such instruments are not subject to material potential near-term
losses in future earnings from reasonably possible near-term changes in market rates or prices.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

|2.1   |  | Agreement and Plan of Merger, dated as of July 11, 2001, among Credit Suisse First Boston, Inc., CSFBdirect Acquisition Corp. and the Registrant, as amended (incorporated by reference to Exhibit (d)(1) to the Tender Offer Statement on Schedule TO
filed by Credit Suisse Group, Credit Suisse First Boston, Inc. and CSFBdirect Acquisition Corp. on July 24, 2001).
|----- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|4.3   |  | Form of Senior Indenture between the Registrant and The Chase Manhattan Bank, as trustee (incorporated by reference to Exhibit 4.5 to the Registrant's Registration Statement on Form S-3, File No. 333-62422).                                                                                                                                                          
|10.67 |  | Assignment Agreement by and between Credit Suisse First Boston (USA), Inc. (successor in interest to Donaldson, Lufkin & Jenrette, Inc.) and the Chase Manhattan Bank.                                                                                                                                                                                                   
|11.1  |  | Statement re: computation of basic earnings per share.                                                                                                                                                                                                                                                                                                                   
|11.2  |  | Statement re: computation of diluted earnings per share.                                                                                                                                                                                                                                                                                                                 
|12.1  |  | Computation of ratio of earnings to fixed charges and ratio of earnings to combined fixed charges and preferred stock dividends.                                                                                                                                                                                                                                         

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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.
|--------------- |  | --------------------------------------
|August 14, 2001 |  | By:                                   

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INDEX TO EXHIBITS

|Exhibits No. |  | Description                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|------------ |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2.1          |  | Agreement and Plan of Merger, dated as of August 30, 2000, among Credit Suisse Group, Diamond Acquisition Corp. and the Registrant, as amended (incorporated by reference to Exhibit (d)(1) to the Tender Offer Statement on Schedule TO filed by Credit
Suisse Group and the Diamond Acquisition Corp. in relation to the Registration on September 8, 2000 and Exhibit (d)(5) to Amendment No. 2 to such Tender Offer Statement on Schedule TO/A filed by Credit Suisse Group and the Diamond Acquisition Corp.
in relation to the Registrant on October 6, 2000).
|4.3          |  | The instruments defining the rights of holders of long-term debt securities of the Registrant and its subsidiaries are omitted pursuant to Section (b)(4)(iii)(A) of Item 601 of Regulation S-K. The Registrant hereby agrees to furnish copies of these
instruments to the Securities and Exchange Commission upon request.                                                                                                                                                                                                                                        
|10.67        |  | Assignment Agreement by and between Credit Suisse First Boston (USA), Inc. (successor in interest to Donaldson, Lufkin & Jenrette, Inc.) and the Chase Manhattan Bank.                                                                                                                                                                                                                                                                                                                                                                                              
|11.1         |  | Statement re: computation of basic earnings per share.*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|11.2         |  | Statement re: computation of diluted earnings per share.*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|12.1         |  | Computation of ratio of earnings to fixed charges and ratio of earnings to combined fixed charges and preferred stock dividends.*                                                                                                                                                                                                                                                                                                                                                                                                                                   

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