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SECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549

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FORM 10-QQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

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For the quarter ended June 30, 2002

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                                          | 10010                               
|New York, N.Y.(Address of principal executive offices)         | (Zip Code)                          

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

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

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

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

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CREDIT SUISSE FIRST BOSTON (USA), INC.    Quarterly Report on Form 10-Q for the Quarter Ended June 30, 2002    TABLE OF CONTENTS

|        |  |                       |  |                                                                                                                                   |  | Number
Page
|------- |  | --------------------- |  | --------------------------------------------------------------------------------------------------------------------------------- |  | -----------
|PART I  |  | FINANCIAL INFORMATION |  |                                                                                                                                  
|        |  | Item 1.               |  | Financial Statements                                                                                                              |  |            
|        |  |                       |  | Condensed Consolidated Statements of Financial Condition at June 30, 2002 and December 31, 2001 (Unaudited)                       |  | 2          
|        |  |                       |  | Condensed Consolidated Statements of Income for the three and six months ended June 30, 2002 and 2001 (Unaudited)                 |  | 4          
|        |  |                       |  | Condensed Consolidated Statements of Changes in Stockholders' Equity for the six months ended June 30, 2001, and 2002 (Unaudited) |  | 5          
|        |  |                       |  | Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2002 and 2001 (Unaudited)                       |  | 6          
|        |  |                       |  | Notes to Condensed Consolidated Financial Statements (Unaudited)                                                                  |  | 8          
|        |  |                       |  | Independent Accountants' Review Report                                                                                            |  | 26         
|        |  | Item 2.               |  | Management's Discussion and Analysis of Financial Condition and Results of Operations                                             |  | 27         
|        |  | Item 3.               |  | Quantitative and Qualitative Disclosures about Market Risk                                                                        |  | 44         
|PART II |  | OTHER INFORMATION     |  |                                                                                                                                  
|        |  | Item 1.               |  | Legal Proceedings                                                                                                                 |  | 45         
|        |  | Item 2.               |  | Omitted Pursuant to General Instruction H                                                                                         |  | 46         
|        |  | Item 3.               |  | Omitted Pursuant to General Instruction H                                                                                         |  | 46         
|        |  | Item 4.               |  | Omitted Pursuant to General Instruction H                                                                                         |  | 46         
|        |  | Item 5.               |  | Other Information                                                                                                                 |  | 46         
|        |  | Item 6.               |  | Exhibits                                                                                                                          |  | 47         
|        |  | Signature             |  | 48                                                                                                                               

1

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PART I    FINANCIAL INFORMATION

ITEM 1.    FINANCIAL STATEMENTS

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

|                                                                                                            |                                                                                                               | June 30,
2002 |         | December 31,
2001
|----------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------- | ------------- | ------- | -----------------
|ASSETS                                                                                                     
|Cash and cash equivalents                                                                                   |                                                                                                               | $             | 1,486   |                  
|Cash and securities segregated for regulatory purposes or deposited with clearing organizations             |                                                                                                               |               | 5,742   |                  
|Collateralized short-term agreements:                                                                       |                                                                                                               |               |         |                  
|                                                                                                            | Securities purchased under agreements to resell                                                               |               |         | 52,817           
|                                                                                                            | Securities borrowed                                                                                           |               |         | 68,781           
|Receivables:                                                                                                |                                                                                                               |               |         |                  
|                                                                                                            | Customers                                                                                                     |               |         | 4,631            
|                                                                                                            | Brokers, dealers and other                                                                                    |               |         | 9,365            
|Financial instruments owned:                                                                                |                                                                                                               |               |         |                  
|                                                                                                            | U.S. government and agencies (includes securities pledged
as collateral of $30,221 and $21,639, respectively) |               |         | 36,765           
|                                                                                                            | Corporate debt (includes securities pledged as collateral
of $9,915 and $9,765, respectively)                 |               |         | 13,318           
|                                                                                                            | Mortgage whole loans (includes loans pledged as
collateral of $6,320 and $4,997, respectively)                |               |         | 7,387            
|                                                                                                            | Equities (includes securities pledged as collateral
of $5,474 and $5,917, respectively)                       |               |         | 10,042           
|                                                                                                            | Commercial paper                                                                                              |               |         | 665              
|                                                                                                            | Private equity and other long-term investments                                                                |               |         | 776              
|                                                                                                            | Derivatives contracts                                                                                         |               |         | 2,116            
|                                                                                                            | Other                                                                                                         |               |         | 1,804            
|Net deferred tax asset                                                                                      |                                                                                                               |               | 1,509   |                  
|Office facilities at cost (net of accumulated depreciation and amortization of $715 and $683, respectively) |                                                                                                               |               | 591     |                  
|Goodwill and other intangible assets                                                                        |                                                                                                               |               | 320     |                  
|Loans receivable from parent and affiliates                                                                 |                                                                                                               |               | 15,580  |                  
|Other assets and deferred amounts                                                                           |                                                                                                               |               | 1,795   |                  
|                                                                                                            |                                                                                                               |               |         |                  
|Total Assets                                                                                                |                                                                                                               | $             | 235,490 |                  
|                                                                                                            |                                                                                                               |               |         |                  

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

2

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|                                                                                               |                                                                                                             | June 30,
2002 |         | December 31,
2001 |  
|---------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------- | ------------- | ------- | ----------------- | -
|LIABILITIES AND STOCKHOLDERS' EQUITY                                                           |                                                                                                            
|Commercial paper and short-term borrowings                                                     |                                                                                                             | $             | 12,050  |                   | $
|Collateralized short-term financings:                                                          |                                                                                                             |               |         |                   |  
|                                                                                               | Securities sold under agreements to repurchase                                                              |               |         | 113,635           |  
|                                                                                               | Securities loaned                                                                                           |               |         | 19,888            |  
|Payables:                                                                                      |                                                                                                             |               |         |                   |  
|                                                                                               | Customers                                                                                                   |               |         | 8,934             |  
|                                                                                               | Brokers, dealers and other                                                                                  |               |         | 9,926             |  
|Financial instruments sold not yet purchased:                                                  |                                                                                                             |               |         |                   |  
|                                                                                               | U.S. government and agencies                                                                                |               |         | 27,295            |  
|                                                                                               | Corporate debt                                                                                              |               |         | 3,135             |  
|                                                                                               | Equities                                                                                                    |               |         | 3,172             |  
|                                                                                               | Derivatives contracts                                                                                       |               |         | 1,901             |  
|                                                                                               | Other                                                                                                       |               |         | 405               |  
|Obligation to return securities received as collateral                                         |                                                                                                             |               | 638     |                   |  
|Accounts payable and accrued expenses                                                          |                                                                                                             |               | 3,693   |                   |  
|Other liabilities                                                                              |                                                                                                             |               | 717     |                   |  
|Long-term borrowings                                                                           |                                                                                                             |               | 22,227  |                   |  
|                                                                                               |                                                                                                             |               |         |                   |  
|                                                                                               | Total liabilities                                                                                           |               |         | 227,616           |  
|                                                                                               |                                                                                                             |               |         |                   |  
|Stockholders' Equity:                                                                          |                                                                                                             |               |         |                   |  
|Preferred stock, 50,000,000 shares authorized:                                                 |                                                                                                             |               |         |                   |  
|                                                                                               | Series B Preferred Stock, at $50.00 per share liquidation preference
(90,000 shares issued and outstanding) |               |         | 5                 |  
|Common Stock, ($0.10 par value; 50,000 shares authorized; 1,100 shares
issued and outstanding) |                                                                                                             |               |        |                   |  
|Paid-in capital                                                                                |                                                                                                             |               | 6,406   |                   |  
|Retained earnings                                                                              |                                                                                                             |               | 1,527   |                   |  
|Accumulated other comprehensive loss                                                           |                                                                                                             |               | (64     | )                 |  
|                                                                                               |                                                                                                             |               |         |                   |  
|                                                                                               | Total stockholders' equity                                                                                  |               |         | 7,874             |  
|                                                                                               |                                                                                                             |               |         |                   |  
|Total Liabilities and Stockholders' Equity                                                     |                                                                                                             | $             | 235,490 |                   | $
|                                                                                               |                                                                                                             |               |         |                   |  

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

3

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

|                                                                                                    |                                                                                                    | Three Months Ended
June 30, |     | Six Months Ended
June 30,
|--------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------- | --------------------------- | --- | -------------------------
|
|Revenues:                                                                                           |                                                                                                    |                             |     |                          
|                                                                                                    | Principal transactionsnet                                                                         |                             | $   | 118                      
|                                                                                                    | Investment banking and advisory                                                                    |                             |     | 877                      
|                                                                                                    | Commissions                                                                                        |                             |     | 391                      
|                                                                                                    | Interest and dividends, net of interest expense of $1,459, $3,089, $2,815 and $6,449, respectively |                             |     | 541                      
|                                                                                                    | Other                                                                                              |                             |     | 17                       
|                                                                                                    |                                                                                                    |                             |     |                          
|                                                                                                    | Total net revenues                                                                                 |                             |     | 1,944                    
|                                                                                                    |                                                                                                    |                             |     |                          
|Expenses:                                                                                           |                                                                                                    |                             |     |                          
|                                                                                                    | Employee compensation and benefits                                                                 |                             |     | 1,022                    
|                                                                                                    | Occupancy and equipment rental                                                                     |                             |     | 148                      
|                                                                                                    | Brokerage, clearing, and exchange fees                                                             |                             |     | 73                       
|                                                                                                    | Communications                                                                                     |                             |     | 56                       
|                                                                                                    | Professional fees                                                                                  |                             |     | 51                       
|                                                                                                    | Merger-related costs                                                                               |                             |     | 91                       
|                                                                                                    | Other operating expenses                                                                           |                             |     | 72                       
|                                                                                                    |                                                                                                    |                             |     |                          
|                                                                                                    | Total expenses                                                                                     |                             |     | 1,513                    
|                                                                                                    |                                                                                                    |                             |     |                          
|Income before provision for income taxes, and cumulative effect of a change in accounting principle |                                                                                                    |                             | 431 |                          
|Provision for income taxes                                                                          |                                                                                                    |                             | 148 |                          
|                                                                                                    |                                                                                                    |                             |     |                          
|Income before cumulative effect of a change in accounting principle                                 |                                                                                                    |                             | 283 |                          
|Cumulative effect of a change in accounting principle, net of tax provision of $0.3                 |                                                                                                    |                             |    |                          
|                                                                                                    |                                                                                                    |                             |     |                          
|Net income                                                                                          |                                                                                                    | $                           | 283 |                          
|                                                                                                    |                                                                                                    |                             |     |                          

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

4

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CREDIT SUISSE FIRST BOSTON (USA), INC. AND SUBSIDIARIES        Condensed Consolidated Statements of Changes in Stockholders' Equity  (Unaudited)        For the Six Months Ended June 30,
2001 and June 30, 2002  (In millions)

|                                                                          |                            | Preferred
Stock |     | CSFB
(USA)
Common
Stock |   | CSFBdirectCommon
Stock |   | Paid-in
Capital |   | Retained
Earnings |   | Accumulated
Other
Comprehensive
Income (loss) |   | Total |      
|------------------------------------------------------------------------- | -------------------------- | --------------- | --- | ----------------------- | - | ---------------------- | - | --------------- | - | ----------------- | - | --------------------------------------------- | - | ----- | -----
|Balances at December 31, 2000                                             |                            | $               | 375 |                         | $ |                       |   | $               | 2 |                   | $ | 5,072                                         |   | $     | 1,064
|Net income                                                                |                            |                 |    |                         |   |                       |   |                 |  |                   |   |                                              |   |       | 372  
|Translation adjustment                                                    |                            |                 |    |                         |   |                       |   |                 |  |                   |   |                                              |   |       |     
|Change in accounting principle (SFAS 133)                                 |                            |                 |    |                         |   |                       |   |                 |  |                   |   |                                              |   |       |     
|                                                                          |                            |                 |     |                         |   |                        |   |                 |   |                   |   |                                               |   |       |      
|                                                                          | Total comprehensive income |                 |     |                         |   |                        |   |                 |   |                   |   |                                               |   |       |      
|                                                                          |                            |                 |     |                         |   |                        |   |                 |   |                   |   |                                               |   |       |      
|Capital contribution of Credit Suisse First Boston Capital Holdings, Inc. |                            |                 |    |                         |   |                       |   |                 |  |                   |   | 34                                            |   |       |     
|Dividends:                                                                |                            |                 |     |                         |   |                        |   |                 |   |                   |   |                                               |   |       |      
|                                                                          | Preferred stock            |                 |     |                        |   |                        |  |                 |   |                  |   |                                               |  |       |      
|CSG Share Plan Activity                                                   |                            |                 |    |                         |   |                       |   |                 |  |                   |   | 478                                           |   |       |     
|Tax benefit on CSG Share Plan Activity                                    |                            |                 |    |                         |   |                       |   |                 |  |                   |   | 41                                            |   |       |     
|                                                                          |                            |                 |     |                         |   |                        |   |                 |   |                   |   |                                               |   |       |      
|Balances at June 30, 2001                                                 |                            | $               | 375 |                         | $ |                       |   | $               | 2 |                   | $ | 5,625                                         |   | $     | 1,426
|                                                                          |                            |                 |     |                         |   |                        |   |                 |   |                   |   |                                               |   |       |      
|Balances at December 31, 2001                                             |                            |                 | 5   |                         |   |                       |   |                 |  |                   |   | 6,064                                         |   |       | 891  
|Net income                                                                |                            |                 |    |                         |   |                       |   |                 |  |                   |   |                                              |   |       | 636  
|Foreign currency translation adjustment                                   |                            |                 |    |                         |   |                       |   |                 |  |                   |   |                                              |   |       |     
|Decrease in pension liability, net of tax expense of $3                   |                            |                 |    |                         |   |                       |   |                 |  |                   |   |                                              |   |       |     
|                                                                          |                            |                 |     |                         |   |                        |   |                 |   |                   |   |                                               |   |       |      
|                                                                          | Total comprehensive income |                 |     |                         |   |                        |   |                 |   |                   |   |                                               |   |       |      
|                                                                          |                            |                 |     |                         |   |                        |   |                 |   |                   |   |                                               |   |       |      
|CSG Share Plan Activity                                                   |                            |                 |    |                         |   |                       |   |                 |  |                   |   | 342                                           |   |       |     
|                                                                          |                            |                 |     |                         |   |                        |   |                 |   |                   |   |                                               |   |       |      
|Balances at June 30, 2002                                                 |                            | $               | 5   |                         | $ |                       |   | $               |  |                   | $ | 6,406                                         |   | $     | 1,527
|                                                                          |                            |                 |     |                         |   |                        |   |                 |   |                   |   |                                               |   |       |      

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

5

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

|                                      |                                                                               | Six Months Ended
June 30,                                                                       |        
|------------------------------------- | ----------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------- | -------
|
|Cash flows from operating activities: |                                                                               |                                                                                                 |        
|                                      | Net income                                                                    |                                                                                                 | $      
|                                      | Adjustments to reconcile net income to net cash used in operating activities: |                                                                                                 |        
|                                      |                                                                               | Net pre-tax gain on sale of certain broker dealer subsidiaries                                  |        
|                                      |                                                                               | Depreciation and amortization                                                                   |        
|                                      |                                                                               | CSG Share Plan activity                                                                         |        
|                                      |                                                                               | Deferred taxes                                                                                  |        
|                                      |                                                                               | Net change in the fair value of private equity and other long-term investments                  |        
|                                      |                                                                               | Other, net                                                                                      |        
|                                      | (Increase) decrease in operating assets:                                      |                                                                                                 |        
|                                      |                                                                               | Cash and securities segregated for regulatory purposes or deposited with clearing organizations |        
|                                      |                                                                               | Securities borrowed                                                                             |        
|                                      |                                                                               | Receivables from customers                                                                      |        
|                                      |                                                                               | Receivables from brokers, dealers and other                                                     |        
|                                      |                                                                               | Financial instruments owned                                                                     |        
|                                      |                                                                               | Other assets and deferred amounts                                                               |        
|                                      | Increase (decrease) in operating liabilities:                                 |                                                                                                 |        
|                                      |                                                                               | Securities loaned                                                                               |        
|                                      |                                                                               | Payables to customers                                                                           |        
|                                      |                                                                               | Payables to brokers, dealers and other                                                          |        
|                                      |                                                                               | Financial instruments sold not yet purchased                                                    |        
|                                      |                                                                               | Obligation to return securities received as collateral                                          |        
|                                      |                                                                               | Accounts payable and accrued expenses                                                           |        
|                                      |                                                                               | Other liabilities                                                                               |        
|                                      |                                                                               |                                                                                                 |        
|Net cash used in operating activities |                                                                               | $                                                                                               | (11,025
|                                      |                                                                               |                                                                                                 |        

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

6

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

|                                                    |                                                                      | Six Months Ended
June 30,                                                                              |                                 
|--------------------------------------------------- | -------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------ | --------------------------------
|
|Cash flows from investing activities:               |                                                                      |                                                                                                        |                                 
|                                                    | Net (payments for) proceeds from:                                    |                                                                                                        |                                 
|                                                    |                                                                      | Loans receivable from parent and affiliates                                                            |                                 
|                                                    |                                                                      | Capital contribution of Credit Suisse First Boston Capital Holdings, Inc.                              |                                 
|                                                    |                                                                      | Purchases of private equity and other long-term investments                                            |                                 
|                                                    |                                                                      | Sales of private equity and other long-term investments                                                |                                 
|                                                    |                                                                      | Office facilities                                                                                      |                                 
|                                                    |                                                                      | Sale of certain broker-dealer subsidiaries                                                             |                                 
|                                                    |                                                                      | Purchase of subsidiary                                                                                 |                                 
|                                                    |                                                                      | Other assets                                                                                           |                                 
|                                                    |                                                                      |                                                                                                        |                                 
|Net cash (used in) provided by investing activities |                                                                      |                                                                                                        | (7,145                          
|                                                    |                                                                      |                                                                                                        |                                 
|Cash flows from financing activities:               |                                                                      |                                                                                                        |                                 
|                                                    | Net proceeds from (payments for):                                    |                                                                                                        |                                 
|                                                    |                                                                      | Short-term financings                                                                                  |                                 
|                                                    |                                                                      | Securities sold under agreements to repurchase, net of securities purchased under agreements to resell |                                 
|                                                    |                                                                      | Senior notes                                                                                           |                                 
|                                                    |                                                                      | Medium-term notes                                                                                      |                                 
|                                                    |                                                                      | Structured notes                                                                                       |                                 
|                                                    |                                                                      | Other long-term borrowings                                                                             |                                 
|                                                    |                                                                      | Subordinated loan agreements                                                                           |                                 
|                                                    |                                                                      | Cash dividends                                                                                         |                                 
|                                                    |                                                                      | Other assets                                                                                           |                                 
|                                                    |                                                                      |                                                                                                        |                                 
|Net cash provided by financing activities           |                                                                      |                                                                                                        | 17,990                          
|                                                    |                                                                      |                                                                                                        |                                 
|Decrease in cash and cash equivalents               |                                                                      |                                                                                                        | (180                            
|Cash and cash equivalents at beginning of period    |                                                                      |                                                                                                        | 1,666                           
|                                                    |                                                                      |                                                                                                        |                                 
|Cash and cash equivalents at end of period          |                                                                      | $                                                                                                      | 1,486                           
|                                                    |                                                                      |                                                                                                        |                                 
|Supplemental statement of cash flows information:   |                                                                      |                                                                                                        |                                 
|                                                    | Supplemental schedule of noncash investing and financing activities: |                                                                                                        |                                 
|                                                    |                                                                      | Capital contribution of Credit Suisse First Boston Capital Holdings, Inc.                              |                                 
|                                                    |                                                                      |                                                                                                        | Fair value of assets contributed
|                                                    |                                                                      |                                                                                                        | Less: liabilities assumed       
|                                                    |                                                                      |                                                                                                        |                                 
|                                                    |                                                                      | Capital contribution of Credit Suisse First Boston Capital Holdings, Inc.                              |                                 
|                                                    |                                                                      |                                                                                                        |                                 

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

7

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CREDIT SUISSE FIRST BOSTON (USA), INC. AND SUBSIDIARIES        Notes to Condensed Consolidated Financial Statements (Unaudited)        June 30, 2002

1. Summary of Significant Accounting Policies

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

The
condensed consolidated financial statements include Credit Suisse First Boston (USA), Inc. and its subsidiaries. All significant intercompany balances and transactions have
been eliminated. The Company is a wholly owned subsidiary of Credit Suisse First Boston, Inc. ("CSFBI") and was acquired on November 3, 2000 (the "Acquisition"). No adjustments of the
historical carrying values of the Company's assets and liabilities to reflect the Acquisition by CSFBI were recorded in the Company's historical consolidated financial statements. Similarly, although
the Acquisition gave rise to goodwill, none of this goodwill was "pushed down" to the Company. For further discussion of the Acquisition, see the Company's Annual Report on
Form 10-K for the year ended December 31, 2001.

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), which are necessary for a fair presentation of the condensed consolidated statements of financial condition and income for the interim periods presented.

The
results of operations for interim periods are not necessarily indicative of results for the entire year. These condensed consolidated financial statements should be read in
conjunction with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2001.

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 amounts of assets and liabilities, disclosure of contingent assets and liabilities, and reported amounts of revenues and expenses. Actual results could differ from
those estimates.

In
the second quarter 2002, the Company purchased residential mortgage whole loans which are being held for trading purposes. Mortgage whole loans held for trading purposes are carried
at fair value in the condensed consolidated statements of financial condition, with changes in fair value included in principal transactions-net in the consolidated statements of income.
Mortgage whole loans held for sale are carried at the lower of aggregate cost or fair value in the condensed consolidated statements of financial condition. The amount by which aggregate cost exceeds
fair value is reflected in principal transactions-net in the condensed consolidated statements of income.

In
June 2001, the Financial Accounting Standards Board (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 is not permitted. The
Company previously adopted SFAS 141 for all business combinations initiated after June 30, 2001. Effective January 1, 2002, the Company adopted the remaining provisions of
SFAS 141.

8

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In
June 2001, the FASB issued Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets" ("SFAS 142"), which requires that goodwill
and indefinite-lived intangible assets be reviewed annually for impairment instead of being amortized to earnings. Intangible assets that do not have indefinite lives will continue to be amortized
over their useful lives and reviewed for impairment. Effective January 1, 2002, the Company adopted SFAS 142. During the second quarter of 2002, the Company completed the transitional
impairment test of goodwill as of January 1, 2002 and determined that there was no impairment to goodwill and no effect on the Company's consolidated financial condition or results of
operations as of January 1, 2002. There have been no events or circumstances occurring subsequent to the transitional impairment test that would more likely than not have resulted in the fair
value of the Company's reporting units being below their respective carrying values. See note 15 for more information on goodwill and identifiable intangible assets.

In
June 2001, the FASB issued Statement of Financial Accounting Standards No. 143, "Accounting for Asset Retirement Obligations" ("SFAS 143"), which addresses the
financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs. This statement is effective for
fiscal years beginning after June 15, 2002. Management believes that the adoption of SFAS 143 will not have a significant impact on the Company's consolidated financial condition or
results of operations.

In
October 2001, the FASB issued Statement of Financial Accounting Standards No. 144, "Accounting for Impairment or Disposal of Long-Lived Assets"
("SFAS 144"), which replaces FASB Statement No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of".
SFAS 144 requires that long-lived assets which are "held for sale" be measured at the lower of carrying amount or fair value less cost to sell and also broadens the reporting
requirements for discontinued operations. This statement is effective for fiscal years beginning after December 15, 2001, and is to be applied prospectively. Effective January 1, 2002,
the Company adopted SFAS 144. There was no impact on the Company's consolidated financial condition or results of operations as a result of adopting SFAS 144.

In
April 2002, the FASB issued Statement of Financial Accounting Standards No. 145, "Rescission of FASB Statements No. 4, 44 and 64, Amendment of FASB Statement
No. 13, and Technical Corrections" ("SFAS 145"). SFAS 145 rescinds FASB Statement No. 4, "Reporting Gains and Losses from Extinguishment of Debt", and an amendment of that
Statement, FASB Statement No. 64, "Extinguishments of Debt Made to Satisfy Sinking-Fund Requirements". This amends FASB Statement No. 13, "Accounting for Leases", to
eliminate an inconsistency between the required accounting for sale-leaseback transactions and the required accounting for certain lease modifications that have economic effects that are
similar to sale-leaseback transactions. The statement is effective for fiscal years beginning after May 15, 2002. Management is evaluating the impact of adopting SFAS 145.

In
June 2002, the FASB issued Statement of Financial Accounting Standards No. 146 "Accounting for Costs Associated with Exit or Disposal Activities" ("SFAS 146"),
which requires companies to recognize costs associated with exit or disposal activities when they are incurred, rather than at the date of a commitment to an exit or disposal plan. Examples of costs
covered by the standard include lease termination costs and certain employee severance costs that are associated with restructuring, a discontinued operations, plant closing, or other exit or disposal
activity. The statement is effective for exit or disposal activities initiated after December 31, 2002. Management is evaluating the impact of adopting SFAS 146.

9

---

In
June 2002, the FASB issued an Exposure Draft, "Proposed Interpretation: Consolidation of Certain Special-Purpose Entitiesan Interpretation of ARB No. 51".
This Proposed Interpretation would address consolidation by business enterprises of special purpose entities ("SPEs") to which the usual condition for consolidation described in Accounting Research
Bulletin No. 51,Consolidated Financial Statements,does not apply because the SPEs have no voting interests or otherwise are not subject to
control through ownership of voting interests. If the Proposed Interpretation were adopted, off balance sheet treatment would be eliminated for many transactions that were structured by companies
under current
accounting guidance. Management is evaluating the impact of having to adopt the Proposed Interpretation.

The
Company accounts for income taxes under the provisions of Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes" ("SFAS 109"). Under
SFAS 109, deferred income taxes are recorded for the future tax consequences of events that have been recognized in the financial statements or tax returns, based upon enacted tax laws and
rates. Deferred tax assets are recognized subject to management's judgment that realization is more likely than not.

On
January 31, 2002, the Company acquired the assets of Holt Value Associates, L.P., a leading provider of independent research and valuation services to asset managers, which was
integrated with CSFBEdge, the Company's online research and valuation database service.

In
the first quarter of 2002, the Company sold three of its broker-dealers, CSFBdirectLLC,
DLJdirectLtd. and Autranet, LLC. As a result, the Company recorded a pre-tax gain of $528 million in the quarter ended
March 31, 2002.

Certain
reclassifications have been made to prior year condensed consolidated financial statements to conform to the 2002 presentation.

2. Merger-Related Costs

Merger-related costs represent retention awards related to the Acquisition, which are being expensed over the vesting period. The vesting period is generally
three years. The remaining retention awards of $345 million at June 30, 2002 are expected to be charged against earnings in the following periods:

Amounts to be Charged(In millions)2002 (remaining 6 months)

$
1592003


1662004


20$
345


3. Related Party Transactions

Credit Suisse Group ("CSG"), through CSFBI, owns all of our outstanding voting common stock. The Company is involved in significant financing and other
transactions, and has significant related party balances, with Credit Suisse First Boston and certain of its subsidiaries and affiliates. The Company enters into these transactions in the ordinary
course of business and believes that these transactions are on market terms that could be obtained from unrelated third parties.

10

---

The
following table sets forth related party assets and liabilities:

June 30,
2002

December 31,
2001(In millions)Securities purchased under agreements to resell

$
6,875

$
2,740Securities borrowed


1,696


1,552Receivables from brokers, dealers and other


1,736


Derivatives contracts


882


710Taxes receivable (included in other assets and deferred amounts)


12


8Loans receivable


15,580


7,626Total Assets

$
26,781

$
12,636Securities sold under agreements to repurchase

$
19,715

$
13,994Securities loaned


11,494


12,604Short-term borrowings


10,537


7,136Payables to brokers, dealers and other


1,937


2,172Derivatives contracts


518


709Taxes payable (included in other liabilities)


439


959Intercompany payables (included in other liabilities)


81


598Total Liabilities

$
44,721

$
38,172


Included
in these related party 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 various service level arrangements. Service level fees are treated as a reduction of other operating expenses in
the condensed consolidated statements of income.

The
following table sets forth related party revenues and expenses:

Six Months EndedJune 30,
2002

June 30,
2001(In millions)Commissions

$
(8
)
$
(17
)Interest Income


193


309Total Revenues

$
185

$
292Interest Expense

$
353

$
1,203Other Operating Expenses


(81
)

(66
)Total Expenses

$
272

$
1,137


11

---

Pursuant
to an agreement, the Company sold at cost, without recourse, to CSFBI the right, title and interest in certain assets aggregating $410.2 million and $216.2 million
at June 30, 2002 and December 31, 2001, respectively.

The
CSG Share Plan (the "Plan") provides for equity-based awards to the Company's employees based on CSG registered shares. Pursuant to the Plan, employees of the Company may be granted,
as compensation, stock or other equity-based awards. The provisions of the Plan include a provision to deliver CSG registered shares to the employees as compensation for services performed. To the
extent that CSFBI does not require reimbursement from the Company for these awards, amounts are considered a capital contribution to the Company and credited to paid-in capital.

As
part of our securitization activities, the Company sells residential and commercial mortgage loans to an affiliate at market value. The affiliate then securitizes these assets. For
the six months ended June 30, 2002, the Company sold $11.7 billion of commercial and residential mortgage loans to an affiliate.

4. Income Taxes

The Company is included in a consolidated federal income tax return and combined New York State and New York City income tax returns filed by CSFBI. CSFBI
allocates federal, state and local income taxes to its subsidiaries on a separate return basis. Any resulting liability is paid currently to CSFBI. Any credits for losses will be paid by CSFBI to the
Company to the extent that such credits are for tax benefits that have been utilized in the consolidated federal or combined state and local income tax return. CSFBI allocated current tax expense of
$29 million and $132 million to the Company for the six months ended June 30, 2002 and 2001, respectively. Prior to the Acquisition, the Company filed its own U.S. consolidated
federal income tax return.

Income
taxes included in the condensed consolidated statements of income include the following:

Six Months EndedJune 30, 2002

June 30, 2001(In millions)Current:U.S. Federal

$
28

$
154Foreign


3


2State and local


(2
)

(24
)Total current


29


132Deferred:U.S. Federal


314


53Total deferred


314


53Total provision for income taxes

$
343

$
185


The
following table summarizes the difference between the "expected" tax provision, which is computed by applying the statutory tax rate to income before provision for income taxes, and
the actual

12

---

provision for income taxes, which is computed by using the effective tax rate for the six months ended June 30, 2002 and 2001:

|                                                         |  | Six Months Ended |    
|-------------------------------------------------------- |  | ---------------- | ---
|
|
|
|Computed "expected" tax provision                        |  | $                | 343
|Increase (decrease) due to:                              |  |                  |    
|Dividend exclusion                                       |  |                  | (12
|Entertainment expense                                    |  |                  | 3  
|Goodwill amortization                                    |  |                  |   
|Other                                                    |  |                  | 10 
|State and local taxes, net of federal income tax effects |  |                  | (1 
|                                                         |  |                  |    
|Provision for income taxes                               |  | $                | 343
|                                                         |  |                  |    

Deferred
tax assets and deferred tax liabilities are generated by the following temporary differences:

June 30,
2002

December 31,
2001(In millions)Deferred tax assets:Inventory

$
7

$
8Investments


404


319Other liabilities and accrued expenses, primarily compensation and benefits


1,218


1,630Office facilities


20


21Net operating loss carryforward





373State and local taxes


42


62Total deferred tax assets


1,691


2,413Deferred tax liabilities:Inventory


65


58Investments


65


63Office facilities


10


6Other





24Total deferred tax liabilities


140


151Deferred tax assets net of deferred tax liabilities


1,551


2,262Valuation allowance for state and local taxes


(42
)

(62
)Net deferred tax asset

$
1,509

$
2,200


13

---

Management
has determined that the realization of the recognized gross deferred tax asset of $1.7 billion and $2.4 billion at June 30, 2002 and December 31,
2001, respectively, is more likely than not based on anticipated future taxable income. In addition, for federal income tax purposes, the Company has planning strategies available that may enhance its
ability to utilize these tax benefits. However, if estimates of future taxable income are reduced, the amount of the deferred tax asset considered realizable could also be reduced. Further, 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 in the amount of $42 million and $62 million, at June 30, 2002 and December 31, 2001, respectively.

5. Transfers and Servicing of Financial Assets

As of June 30, 2002 and December 31, 2001, the fair market value of assets that the Company has pledged to counterparties was $170.0 billion
and $143.5 billion, respectively, of which $51.9 billion and $42.3 billion, respectively, is included in financial instruments owned. 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, 2002 and December 31, 2001, the fair market value of the assets pledged to the Company
was $162.8 billion and $135.2 billion, respectively. The Company routinely re-pledges or lends these assets to third parties.

As
part of the Company's securitization activities, commercial and residential mortgages are sold to qualifying entities or SPEs and securitized. Beneficial interests in those entities
are sold to investors. The investors and the securitization entities have no recourse to the Company's assets. For the six months ended June 30, 2002, the Company securitized $3 billion
in residential mortgages. For the six months ended June 30, 2002, net loss recognized on these transactions was $21.2 million. For the six months ended June 30, 2001, the Company
securitized $202.3 million in residential mortgages. For the six months ended June 30, 2001, net loss recognized on these transactions was $0.7 million. In addition, for the six
months ended June 30, 2002 and 2001, the Company sold $11.7 billion and $6.5 billion, respectively, of residential and commercial mortgages to an affiliate, which were
subsequently securitized. The Company's primary broker-dealer subsidiary acting as underwriter has unsold positions of $537 million and $528 million at June 30, 2002 and 2001,
respectively, associated with these transactions.

6. Borrowings

Short-term borrowings are generally demand obligations with interest approximating the Federal Funds rate, LIBOR or other money market indices. Such
borrowings are generally used to facilitate the securities settlement process, to finance securities inventories, and to finance securities purchased by customers on margin.

At
June 30, 2002 and December 31, 2001, there were no borrowings secured by Company-own securities.

The
Company has two commercial paper programs exempt from registration under the Securities Act of 1933, which allows the Company to issue up to $7.0 billion in commercial paper.
At June 30, 2002 and December 31, 2001, $1.4 billion and $1.2 billion, respectively, of commercial paper was outstanding under these programs.

14

---

The
following table sets forth the Company's long-term borrowings:

June 30,
2002

December 31,
2001(In millions)Senior notes 5.75%-8.00%, due various dates through 2012

$
10,406

$
7,548Medium-term notes 2.54%-7.49%, due various dates through 2032


11,588


7,813Structured borrowings 6.995%-7.335%, due various dates through 2014


233


297Other





5Total long-term borrowings

$
22,227

$
15,663Current maturities of long-term borrowings

$
4,763

$
4,028


In
May 2002, the Company replaced its $3.5 billion revolving credit facility with a new 364-day $3.0 billion revolving credit facility available to the
Company as borrower. Proceeds from borrowings under this facility can be used for general corporate purposes and the facility is guaranteed by Credit Suisse Group. The facility contains customary
covenants that the Company believes will not impair its ability to obtain funding. At June 30, 2002, no borrowings were outstanding under this facility.

Under
the Company's currently effective $10 billion shelf registration statement on file with the Securities and Exchange Commission, which allows the Company to issue from time
to time senior and subordinated debt securities and warrants to purchase such securities, the Company had at August 13, 2002 approximately $8.5 billion available for issuance. During the
six months ended June 30, 2002, under this and predecessor shelf registration statements, the Company issued both medium-term notes and longer-dated fixed income securities to
extend the maturity profile of the Company's debt. In the six months ended June 30, 2002, the Company issued $2.75 billion 61/2% notes due 2012, $1.75 billion
53/4% notes due 2007 and $2.7 billion in medium-term notes off current and predecessor shelf registration statements and $822 million in Euro
medium-term notes under the Company's $5 billion program established in
July 2001. On July 19, 2002, the Company issued $1.0 billion 71/8% senior notes due 2032 off its shelf registration statement.

For
the six months ended June 30, 2002 and 2001, interest paid on all borrowings and financing arrangements was $2.2 billion and $6.4 billion, respectively. At
June 30, 2002 and December 31, 2001, the Company had entered into interest rate and currency swaps on $7.0 billion and $3.3 billion, respectively, of its senior and
medium-term notes. See note 10 for more discussion on derivatives.

7. Private equity and other long-term investments

Private equity and other long-term investment activities include direct investments and investments in partnerships that make private equity and
related investments in various portfolio companies and funds. The Company's subsidiaries act as general partner for many of these private equity partnerships. These investments are carried at
estimated fair value in the condensed consolidated financial statements. These investments are primarily in unlisted or illiquid equity or equity-related securities. At June 30, 2002 and
December 31, 2001, the Company had investments of $776 million and $963 million, respectively, and had commitments to invest up to an additional $2.1 billion and
$1.7 billion, respectively. The cost of these investments was $1.1 billion and $1.2 billion at June 30, 2002, and December 31, 2001, respectively.

15

---

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.

8. Net Capital

The Company's principal wholly owned subsidiaries, Donaldson, Lufkin & Jenrette Securities Corporation ("DLJSC") and Credit Suisse First Boston Corporation
("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 the
NYSE's net capital rule, which conforms to the Uniform Net Capital Rule pursuant to Rule 15c3-1 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Under the
alternative method permitted by this rule, the required net capital may not be less than two percent of aggregate debit balances arising from customer transactions or four percent of segregated funds,
whichever is greater. If a member firm's 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, 2002, DLJSC's and CSFB Corp.'s net capital of
approximately $1.6 billion and $3.5 billion, respectively, was 32.97 percent and 114.24 percent, respectively, of aggregate debit balances and in excess of the minimum
requirement by approximately $1.5 billion and $3.4 billion, respectively. The Company's broker-dealer lite entity, Credit Suisse First Boston Capital LLC, is also subject to the uniform
net capital rule, but calculates its net capital requirements under Appendix F of SEC Rule 15c3-1. The Company's London-based broker-dealer subsidiaries are subject to the
requirements of the Financial Services Authority. Certain other
subsidiaries are also subject to capital adequacy requirements. At June 30, 2002, the Company and its subsidiaries complied with all applicable regulatory capital adequacy requirements.

9. Cash and Securities Segregated Under Federal and Other Regulations

In compliance with the Commodities Exchange Act, the Company segregates funds deposited by customers and funds accruing to customers as a result of trades or
contracts. As of June 30, 2002 and December 31, 2001, cash and securities aggregating $1.5 billion and $1.0 billion, respectively, were segregated or secured in separate
accounts on behalf of customers.

In
accordance with the Securities and Exchange Commission's no action letter dated November 3, 1998, the Company computed a reserve requirement for the proprietary accounts of
introducing broker-dealers. As of June 30, 2002, and December 31, 2001, securities aggregating $40.3 million and $40.4 million, respectively, were segregated on behalf of
introducing broker-dealers.

In
addition, U.S. Treasury securities with a market value of $4.2 billion and $5.3 billion, as of June 30, 2002 and December 31, 2001, respectively, were
segregated in a special reserve bank account to benefit customers as required by Rule 15c3-3 of the Securities and Exchange Commission.

10. Derivative Contracts

The Company uses derivative contracts for both trading and hedging purposes. These derivatives include options, forwards, futures and swaps. Most of the Company's
derivatives transactions are accounted for as trading positions.

16

---

Hedging Derivatives

The Company manages its interest rate exposure on its fixed-rate debt by using interest rate swaps that qualify for hedge accounting under Statement
of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities" ("SFAS 133"). These financials instruments are accounted for as fair value
hedges, with changes in fair value included in other revenues in the condensed consolidated statements of income.

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 subsequent gains or losses attributable to the hedged item cease to be recognized, while the subsequent changes in the derivative instrument's fair value are recognized in earnings, in
each reporting period. There were no gains or losses on derivatives that were excluded from the assessment of effectiveness during the six months ended June 30, 2002.

Other
derivatives used for hedging purposes that do not qualify as hedges under SFAS 133 are carried at fair value with changes in value included in principal
transactions-net in the condensed consolidated statements of income. For the six months ended June 30, 2002 and 2001, the Company recognized an after tax gain (loss) of ($4.0)
million and $3.4 million, respectively, for these derivatives.

Trading Derivatives

Options

The Company writes option contracts specifically designed to meet customer needs or for asset/liability management purposes. These 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
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, foreign currencies and interest rate instruments or indices. The counterparties to
these purchases are reviewed to determine whether they are creditworthy.

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.

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

17

---

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.

Quantitative Disclosures for All Derivatives

The fair values of all derivatives contracts outstanding at June 30, 2002 and December 31, 2001 were as follows:

June 30, 2002

December 31, 2001Assets

Liabilities

Assets

Liabilities(In millions)Options

$
725

$
1,073

$
968

$
1,010Forward contracts


640


443


1,652


1,647Futures contracts


18


36


103


20Swaps


733


349


354


280Total

$
2,116

$
1,901

$
3,077

$
2,957


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

11. Financial Instruments With Off Balance Sheet Risk

In the normal course of business, the Company's customer, trading and 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, 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 clearance activities,

18

---

introducing 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 and currency 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 or currency 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 the above transactions is not expected to have a material adverse effect on the Company's consolidated financial condition or results of operations.

12. Concentrations of Credit Risk

As a securities broker and dealer, the Company is engaged in various securities trading and brokerage activities servicing a diverse group of domestic and foreign
corporations, governments, and institutional and individual investors. A substantial portion of the Company's transactions is executed with and on behalf of institutional investors including other
brokers and dealers, mortgage brokers, commercial banks, U.S. agencies, mutual funds and other financial institutions. These transactions are generally collateralized. Credit risk is the potential for
loss resulting from the default by a counterparty of its obligations. Exposure to credit risk is generated by securities and currency settlements, contracting derivative and forward transactions with
customers and dealers, and the holding in inventory of bonds and/or loans. The Company uses various means to manage its credit risk. The creditworthiness of all counterparties is analyzed at the
outset of a credit relationship with the Company. These counterparties are subsequently reviewed on a periodic basis. The Company sets a maximum exposure limit for each counterparty, as well as for
groups or classes of counterparties. Furthermore, the Company enters into master netting agreements when feasible and demands collateral from certain counterparties or for certain types of credit
transactions.

The
Company's customer securities activities are transacted either in cash or on a margin basis, in which the Company extends credit to the customer. The Company seeks to control the
risks associated with its customer activities by requiring customers to maintain margin collateral to comply with various regulatory and internal guidelines. The Company monitors required margin
levels each day and requires customers to deposit additional collateral, or reduce positions, when necessary.

13. Commitments and Contingent Liabilities

The Company had commitments of approximately $2.1 billion and $1.7 billion at June 30, 2002 and December 31, 2001, respectively, to
invest in or on a side-by-side basis with partnerships that make private equity and related investments in various portfolio companies or other private equity funds.

19

---

The
Company was contingently liable for letters of credit aggregating approximately $638 million and $588 million at June 30, 2002 and December 31, 2001,
respectively. These letters of credit satisfy various collateral requirements.

As
of June 30, 2002 and December 31, 2001, the Company had commitments to enter into securities purchased under agreements to resell and securities sold under agreements to
repurchase of approximately $1.0 billion and $3.0 billion, respectively. See "Contractual Obligations and Contingent Commitments" in the "Management's Discussion and Analysis of
Financial Condition and Results of Operations" in Item 2 of this report.

14. Industry Segment and Geographic Data

The Company operates and manages its businesses through three operating divisions: Investment Banking and Private Equity Division ("IBD"), Securities Division
consisting of Equity and Fixed Income and Financial Services Division.

Such
divisions are managed based on types of products and services offered and their related client bases. The Company evaluates the performance of its divisions based primarily on
income (loss) before income taxes and cumulative effect of a change in accounting principle.

IBD
raises and invests capital and provides financial advice to companies throughout the United States and abroad. Through IBD, the Company manages and underwrites offerings of
securities, arranges private placements, provides client advisory and other services, pursues private equity investments in a variety of areas, and provides venture capital to companies.

Securities
Division:



Financial
Services Division provides a broad array of services to individual high-net-worth investors and the financial intermediaries that represent them. This
division also provides introducing broker services, clearing, research and trading services.

|                                   |  | IBD |     | Securities |   | Financial
Services |  | Elimination
& Other |     | Total
|---------------------------------- |  | --- | --- | ---------- | - | ------------------ |  | ------------------- | --- | -----
|
|Three months ended June 30, 2002:  |  |     |     |            |   |                    |  |                     |     |      
|Net revenues from external sources |  | $   | 496 |            | $ | 694                |  | $                   | 257 |      
|                                   |  |     |     |            |   |                    |  |                     |     |      
|Net interdivision revenues         |  |     |    |            |   |                   |  |                     | 4   |      
|                                   |  |     |     |            |   |                    |  |                     |     |      
|Net interest revenue (expense)     |  |     | 9   |            |   | 511                |  |                     | 34  |      
|                                   |  |     |     |            |   |                    |  |                     |     |      
|Total expenses                     |  |     | 456 |            |   | 757                |  |                     | 258 |      
|                                   |  |     |     |            |   |                    |  |                     |     |      
|Income (loss) before income taxes  |  | $   | 49  |            | $ | 448                |  | $                   | 37  |      
|                                   |  |     |     |            |   |                    |  |                     |     |      

20

---

|Three months ended June 30, 2001:  |  |   |       |   |   |       |  |   |     |  |   |      |   |   |      
|---------------------------------- |  | - | ----- | - | - | ----- |  | - | --- |  | - | ---- | - | - | -----
|Net revenues from external sources |  | $ | 539   |   | $ | 974   |  | $ | 260 |  | $ | 60   |   | $ | 1,833
|                                   |  |   |       |   |   |       |  |   |     | 
|Net interdivision revenues         |  |   |      |   |   |      |  |   | 25  |  |   | (25  | ) |   |     
|                                   |  |   |       |   |   |       |  |   |     | 
|Net interest revenue (expense)     |  |   | (29   | ) |   | 215   |  |   | 67  |  |   | 29   |   |   | 282  
|                                   |  |   |       |   |   |       |  |   |     | 
|Total expenses                     |  |   | 615   |   |   | 864   |  |   | 341 |  |   | 198  |   |   | 2,018
|                                   |  |   |       |   |   |       |  |   |     | 
|Income (loss) before income taxes  |  | $ | (105  | ) | $ | 325   |  | $ | 11  |  | $ | (134 | ) | $ | 97   
|                                   |  |   |       |   |   |       |  |   |     | 
|Six months ended June 30, 2002:    |  |   |       |   |   |       |  |   |     |  |   |      |   |   |      
|Net revenues from external sources |  | $ | 937   |   | $ | 1,147 |  | $ | 532 |  | $ | 539  |   | $ | 3,155
|                                   |  |   |       |   |   |       |  |   |     | 
|Net interdivision revenues         |  |   |      |   |   |      |  |   | 16  |  |   | (16  | ) |   |     
|                                   |  |   |       |   |   |       |  |   |     | 
|Net interest revenue (expense)     |  |   | 16    |   |   | 954   |  |   | 68  |  |   | (72  | ) |   | 966  
|                                   |  |   |       |   |   |       |  |   |     | 
|Total expenses                     |  |   | 890   |   |   | 1,520 |  |   | 529 |  |   | 203  |   |   | 3,142
|                                   |  |   |       |   |   |       |  |   |     | 
|Income (loss) before income taxes  |  | $ | 63    |   | $ | 581   |  | $ | 87  |  | $ | 248  |   | $ | 979  
|                                   |  |   |       |   |   |       |  |   |     | 
|Six months ended June 30, 2001:    |  |   |       |   |   |       |  |   |     |  |   |      |   |   |      
|Net revenues from external sources |  | $ | 1,142 |   | $ | 2,163 |  | $ | 572 |  | $ | 318  |   | $ | 4,195
|                                   |  |   |       |   |   |       |  |   |     | 
|Net interdivision revenues         |  |   |      |   |   |      |  |   | 57  |  |   | (57  | ) |   |     
|                                   |  |   |       |   |   |       |  |   |     | 
|Net interest revenue (expense)     |  |   | (48   | ) |   | 274   |  |   | 139 |  |   | 70   |   |   | 435  
|                                   |  |   |       |   |   |       |  |   |     | 
|Total expenses                     |  |   | 1,160 |   |   | 1,715 |  |   | 685 |  |   | 514  |   |   | 4,074
|                                   |  |   |       |   |   |       |  |   |     | 
|Income (loss) before income taxes* |  | $ | (66   | ) | $ | 722   |  | $ | 83  |  | $ | (183 | ) | $ | 556  
|                                   |  |   |       |   |   |       |  |   |     | 

---

The
Company allocates to its divisions 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 division allocation of some costs, such as incentive bonuses,
has been estimated.

The
Company has not allocated merger-related costs to its divisions since none of these costs represents normal operating costs. These costs are included in the Elimination &
Other category. Also included in this category are intercompany accounts/interdivisional revenue charges that are eliminated in consolidation, as well as the results for the broker-dealers
CSFBdirectLLC, DLJdirectLtd. and Autranet, LLC up to the time of, and the gain resulting from,
their sale in the first quarter of 2002. All other accounting policies of the divisions are the same as those described in the summary of significant accounting policies.

21

---

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

|                                                                                                     |                                           | Three Months Ended
June 30,                                                                              |   | Six Months Ended
June 30, |      
|---------------------------------------------------------------------------------------------------- | ----------------------------------------- | -------------------------------------------------------------------------------------------------------- | - | ------------------------- | -----
|
|
|Revenues:                                                                                            |                                           |                                                                                                          |   |                           |      
|                                                                                                     | Total net revenues for reported divisions |                                                                                                          | $ | 2,005                     |      
|                                                                                                     | Elimination and Other(1)                  |                                                                                                          |   | (61                       | )    
|                                                                                                     |                                           |                                                                                                          |   |                           |      
|                                                                                                     |                                           | Total consolidated net revenues                                                                          |   | $                         | 1,944
|                                                                                                     |                                           |                                                                                                          |   |                           |      
|Income before provision for income taxes, and cumulative effect of a change in accounting principle: |                                           |                                                                                                          |   |                           |      
|                                                                                                     | Total income for reported divisions       |                                                                                                          | $ | 534                       |      
|                                                                                                     | Elimination and Other(1)                  |                                                                                                          |   | (103                      | )    
|                                                                                                     |                                           |                                                                                                          |   |                           |      
|                                                                                                     |                                           | Total income before provision for income taxes and cumulative effect of a change in accounting principle |   | $                         | 431  
|                                                                                                     |                                           |                                                                                                          |   |                           |      

---

The
Company's principal operations are located in the United States. The Company maintains sales offices in Europe, Latin America and Asia. The Company's foreign revenues are not
significant.

15. Goodwill and Identifiable Intangible Assets

On January 1, 2002, the Company adopted SFAS 142, which addresses the initial recognition and measurement of intangible assets acquired outside a
business combination and the recognition and measurement of goodwill and other intangible assets subsequent to acquisition. Under the new standard, goodwill and indefinite-lived assets are reviewed
annually for impairment instead of being amortized to earnings. Intangible assets that do not have indefinite lives will continue to be amortized over their useful lives and reviewed for impairment.

As
of June 30, 2002 and December 31, 2001, goodwill of $291 million and $249 million, respectively, is included in goodwill and other intangible assets in the
condensed consolidated statements of financial condition. Through December 2001, goodwill was amortized over a 20-year life on a straight-line basis. During the second
quarter of 2002, the Company completed the transitional impairment test of goodwill as of January 1, 2002 and determined that there was no impairment to goodwill and no effect on the

22

---

Company's consolidated financial condition or results of operations as of January 1, 2002. There have been no events or circumstances occurring subsequent to the transitional impairment test
that would more likely than not have resulted in the fair value of the Company's reporting units being below their respective carry values.

The
following table sets forth reported net income, as adjusted to exclude goodwill amortization expense:

Three Months Ended
June 30,

Six Months Ended
June 30,2002

2001

2002

2001(In millions)Net income as reported

$
283

$
69

$
636

$
372Net income as adjusted

$
283

$
77

$
636

$
391


At
June 30, 2002, the Company had identifiable intangible assets of $28 million consisting primarily of software and customer lists, which are being amortized over useful
lives ranging from 5-20 years.

On
January 31, 2002, the Company acquired the assets of Holt Value Associates, L.P., a leading provider of independent research and valuation services to asset managers, which was
integrated with CSFBEdge, the Company's online research and valuation database service. This acquisition was accounted for as a purchase. In connection
with the acquisition, the Company recorded approximately $42 million of goodwill and approximately $28 million of intangible assets relating primarily to software and customer lists.

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, 2001 and Quarterly Report on Form 10-Q for the three months ended March 31, 2002. The following is an update of such proceedings.

Independent Energy Holdings PLC Litigation

By Opinion and Order entered on May 30, 2002, the Court certified a class of 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.

Litigation Relating to CSFB's Acquisition of DLJ

On June 6, 2002, the Court approved the settlement in the consolidatedIn re CSFBdirect Tracking Stock Shareholders
Litigationand dismissed the action with prejudice.

Litigation Relating To IPO Allocation Practices

On May 24, 2002, CSFB Corp. moved to dismiss the amended complaint filed in the U.S. District Court for the Southern District of New York alleging
violations of the federal and state antitrust laws in connection with alleged IPO allocation practices.

23

---

On
June 25, 2002, the Court denied CSFB Corp.'s motion to dismiss the amended complaint in the action pending in the U.S. District Court for the Southern District of New York
brought by a putative class of issuers in initial public offerings in which CSFB Corp. acted as lead manager.

On
July 1, 2002, CSFB Corp., DLJSC and several other investment banks moved to dismiss the consolidated amended class action complaints filed in the U.S. District Court for the
Southern District of New York concerning IPO allocation practices.

Enron-related Litigation and Inquiries

On May 8, 2002, CSFB Corp. moved to dismiss the putative class action complaint in theTittle v. Enron Corp., et.
almatter that was filed on April 8, 2002 in Texas federal court by participants in Enron's employee savings plans against Enron and certain executives and directors of
Enron, Arthur Andersen and certain partners, executives and employees of Arthur Andersen, the law firm of Vincent & Elkins, L.L.P. and certain partners of Vincent & Elkins, and CSFB
Corp. and certain other investment banks.

On
May 8, 2002, CSFB Corp. moved to dismiss the consolidated putative class action complaint in theNewby v. Enron Corp., et. almatter that was filed on
April 8, 2002 in Texas federal court on behalf of purchasers of Enron stock against Enron and certain
executives and directors of Enron, Arthur Andersen and certain partners, executives and employees of Arthur Andersen, the law firms of Vincent & Elkins, L.L.P. and Kirkland & Ellis, and
CSFB Corp. and certain other investment banks.

TheRetirement Systems of Alabama v. Merrill Lynch & Co., et. almatter, filed on March 15, 2002 against certain executives
and directors of Enron, Arthur Andersen, and CSFBC and certain other investment banks, has been remanded to Alabama state court, and on July 18, 2002, CSFB Corp. moved to dismiss plaintiff's
third amended complaint.

The
Company has received additional requests for information from certain U.S. Congressional committees and additional requests for information and/or subpoenas from certain governmental
and regulatory agencies regarding certain transactions and business relationships with Enron and its affiliates, including certain Enron-related special purpose entities. The Company is cooperating
fully with such inquiries.

On
July 12, 2002, CSFB Corp. was named as an additional defendant in an action brought by a non-profit electric power cooperative against various defendants, including
certain energy and power companies, financial institutions, other investment banks and one individual, in the District Court of Johnson County in the State of Texas. On July 25, 2002, certain
defendants removed the case to the U.S. District Court for the Northern District of Texas. The complaint alleges violations of Texas statutory and common law in connection with the purchase of an
electric generating plant in Texas by an Enron designee.

On
July 22, 2002, certain executives and directors of Enron, Arthur Andersen and certain partners, executives and employees of Arthur Andersen, the law firm of Vinson &
Elkins, L.L.P. and certain of its partners, CSFB Corp., Credit Suisse First Boston International, Credit Suisse First Boston Europe Ltd., DLJ and certain other investment banks were named in a
putative class action filed in the U.S. District Court for the Southern District of New York by purchasers of certain credit-linked notes. Three of our employees (as well as certain employees of other
investment banks) were also named as defendants in the

24

---

complaint. The complaint alleges violations of the Racketeer Influenced and Corrupt Organizations Act, or RICO, in connection with various offerings of credit-linked notes.

Research Matters

The Company has received a subpoena from the U.S. Department of Justice and from the Commonwealth of Massachusetts relating to research departments. The Company
is cooperating fully with this inquiry.

General

The Company is 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 its businesses. Some of the actions have been brought on behalf of various classes of claimants and seek
damages of material and indeterminate amounts. The Company believes, based on currently available information and advice of counsel, that the results of such proceedings, in the aggregate, will not
have a material adverse effect on its financial condition but might be material to operating results for any particular period, depending, in part, upon the operating results for such period. The
Company intends to defend vigorously against all of the claims asserted in these matters.

25

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Independent Accountants' Review Report

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

We
have reviewed the accompanying condensed consolidated statement of financial condition of Credit Suisse First Boston (USA), Inc. and subsidiaries (formerly known as Donaldson,
Lufkin & Jenrette, Inc. and subsidiaries), (the "Company"), as of June 30, 2002, and the related condensed consolidated statements of income for the three and
six-month periods ended June 30, 2002 and 2001, and the related condensed consolidated statements of changes in stockholders' equity and cash flows for the six-month
periods ended June 30, 2002 and 2001. These condensed consolidated financial statements are the responsibility of the Company's management.

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

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

We
have previously audited, in accordance with auditing standards generally accepted in the United States of America, the consolidated statement of financial condition of Credit Suisse
First Boston (USA), Inc. and subsidiaries as of December 31, 2001, and the related consolidated statements of operations, changes in stockholders' equity, and cash flows for the year
ended December 31, 2001 (not presented herein); and in our report dated January 31, 2002, we expressed an unqualified opinion on those consolidated financial statements. In our opinion,
the information set forth in the accompanying condensed consolidated statement of financial condition as of December 31, 2001, is fairly stated, in all material respects, in relation to the
consolidated statement of financial condition from which it has been derived.

/s/
KPMG LLP
New York, New York
August 14, 2002

26

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

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

We are a leading integrated investment bank serving institutional, corporate, government and individual clients. We are part of the Credit Suisse First Boston
business unit, which we call CSFB, of Credit Suisse Group, and our results do not necessarily reflect the overall performance of CSFB or Credit Suisse Group. As a result of being a part of a larger
business unit, our results may not reflect the impact of hedging or trading strategies that are managed on a global basis. When we use the terms "we" and "our" and the "Company", we mean Credit Suisse
First Boston (USA), Inc., a Delaware corporation, and its consolidated subsidiaries.

BUSINESS ENVIRONMENT

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

The
second quarter 2002 has been extremely challenging for the investment banking industry. This has been a period of significant crisis in investor confidence in reaction to accounting
improprieties by certain leading corporations, several significant bankruptcies, weak corporate earnings, the threat of terrorism and international conflicts. U.S. economic growth has continued in the
second quarter but at a slower rate than in the first quarter. This trend points to prospects of a sustainable rebound in the economy but concerns related to a soft labor market and weak corporate
earnings are adversely affecting market expectations. The Federal Reserve Board left unchanged during the quarter the discount and overnight lending rates.

Global
issuance of debt, equity and equity-related securities has remained steady compared to the first quarter and is down more than 5% compared to the second quarter 2001.
Industry-wide fees from underwriting activity are down significantly from second quarter 2001. Global initial public offerings declined significantly from the first quarter of 2002.
Nonetheless, the steep yield curve has continued to provide a positive environment for certain fixed income products in the U.S., although U.S. investment grade debt issuances for the first half of
2002 decreased 4.3% compared to the first half of 2001, which had the second largest volume to date. U.S. mortgage-backed securities had a record first half in 2002. U.S. asset-backed issuances
increased 15% for the first half of 2002 compared to the first half of 2001.

U.S.
mergers and acquisitions activity increased modestly compared to the first quarter but was 35% down in dollar value compared to the second quarter 2001. Prospects for a substantial
recovery in the near term remain limited as stock prices continue to be lower and more volatile.

CRITICAL ACCOUNTING POLICIES

For a discussion of the Company's accounting policies that may involve a high degree of judgment and complexity, refer to "Management's Discussion and Analysis of
Financial Condition and Results of OperationsCritical Accounting Policies" included in our Annual Report on Form 10-K for the year ended December 31, 2001.

RESULTS OF OPERATIONS

The Company recorded net income of $283 million for the quarter ended June 30, 2002 compared to net income of $69 million for the quarter
ended June 30, 2001. For the six months ended June 30, 2002 and 2001, the Company recorded net income of $636 million and $372 million, respectively. These results

27

---

reflect the efforts of a $1 billion cost cutting initiative for the CSFB business unit in response to the challenging market conditions throughout the industry in 2002.

The
Company's businesses are materially affected by conditions in the financial markets and economic conditions generally. Unpredictable or adverse market and economic conditions may
adversely affect our results of operations. See "BusinessCertain Factors That May Affect Our Business" in our Annual Report on Form 10-K for the year ended
December 31, 2001.

Results by Segment

The Company operates and manages its businesses through three operating divisions: Investment Banking and Private Equity Division ("IBD"), Securities Division,
consisting of Equity and Fixed Income,and Financial Services Division.

Such
divisions are managed based on types of products and services offered and their related client bases. The Company evaluates the performance of its divisions based primarily on
income (loss) before income taxes and cumulative effect of a change in accounting principle.

IBD
raises and invests capital and provides financial advice to companies throughout the U.S. and abroad. Through IBD, the Company manages and underwrites offerings of securities,
arranges private placements, provides client advisory and other services, pursues private equity investments in a variety of areas, and provides venture capital to companies.

Securities
Division:



Financial
Services Division provides a broad array of services to individual high-net-worth investors and the financial intermediaries that represent them. This
division also provides introducing broker services, clearing, research and trading services.

28

---

The
following table sets forth the net revenues, total expenses, and income (loss) before provision for income taxes, and the cumulative effect of a change in accounting principle of our
divisions:

Three Months Ended
June 30

Six Months Ended
June 302002

2001

2002

2001(In millions)Investment Banking and Private Equity DivisionNet Revenues

$
505

$
510

$
953

$
1,094Total Expenses


456


615


890


1,160Income/(Loss)(1)


49


(105
)

63


(66
)Securities DivisionEquityNet Revenues


419


565


828


1,208Total Expenses


318


431


644


901Income(1)


101


134


184


307Fixed IncomeNet Revenues


786


624


1,273


1,229Total Expenses


439


433


876


814Income(1)


347


191


397


415Subtotal Securities DivisionNet Revenues


1,205


1,189


2,101


2,437Total Expenses


757


864


1,520


1,715Income(1)


448


325


581


722Financial Services DivisionNet Revenues


295


352


616


768Total Expenses


258


341


529


685Income(1)


37


11


87


83Total(2)Net Revenues(2)


1,944


2,115


4,121


4,630Total Expenses(3)


1,513


2,018


3,142


4,074Income(1)

$
431

$
97

$
979

$
556


---

Quarter Ended June 30, 2002 Compared to Quarter Ended June 30, 2001

For the quarter ended June 30, 2002, total net revenues decreased $171 million or 8% to $1.9 billion. Total net revenues decreased primarily
as a result of decreases in trading revenues and investment banking and advisory fees partially offset by increases in net interest income and higher commissions.

29

---

In
the Securities Division, net revenues increased $16 million to $1.2 billion. Equity net revenues decreased $146 million or 26% to $419 million primarily as
a result of decreased trading revenues offset by higher commissions and increased net interest income. The decimalization of the U.S. markets led to decreased profit margins and a shift to a
commission-based pricing structure resulted in a reduction in trading gains. This combined with the decline in the new issues market contributed to the overall decrease in revenues. Fixed Income net
revenues increased $162 million or 26% to $786 million, principally as a result of an increase in net interest income offset by a decrease in investment banking and advisory fees.
Investment Banking and Private Equity Division's net revenues decreased $5 million to $505 million primarily due to decreased investment banking and advisory fees offset by higher net
interest income. Revenues from our Private Equity business were essentially flat quarter over quarter. Financial Services Division's net revenues decreased $57 million or 16% to
$295 million primarily as a result of decreases in net interest income and commissions.

Principal
transactions-net decreased $396 million or 77% to $118 million primarily as a result of decreased revenues from the Securities Division. The decreased
revenues are primarily in derivatives, NASDAQ equities, mortgages and other fixed income products. The decrease in market volatility and the weak equity markets created difficult conditions and
contributed to decreased revenues on derivatives trades. The decreased revenues in NASDAQ equities were offset by increased commission revenue due to a change in the pricing structure from one based
on trading, in which revenues were generally based on the difference between the bid and ask prices, to one based on commissions. The losses in mortgages were offset by increased net interest income
as a result of lower interest expense due to lower interest rates and a shift from hedging with interest bearing securities to hedging with forward transactions.

Investment
banking and advisory revenues decreased $103 million or 11% to $877 million primarily as a result of a decrease in fees from reduced mergers and acquisitions
activity.

Commission
revenues increased $53 million or 16% to $391 million primarily as a result of higher institutional commission revenues received due to a change in the NASDAQ
business from one in which revenues were based on the spread to one based on commissions. This change was a result of decimalization of the U.S. markets. These increased revenues were partially offset
by reduced commissions due to the sale of certain broker-dealer subsidiaries.

Interest
and dividend income, net of interest expense increased $259 million or 92% to $541 million. The increase was a result of reduced interest expense because of the
decline in global interest rates since the first quarter of 2001, which has reduced funding costs.

Total
expenses for the three months ended June 30, 2002 decreased $505 million or 25% to $1.5 billion primarily due to the continuing results of a $1 billion
cost cutting initiative for the CSFB business unit begun in the fourth quarter of 2001.

Employee
compensation and benefits decreased $259 million or 20% to $1.0 billion, primarily due to staff reductions and lower bonus accruals. 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 estimated and recorded throughout the year based upon a number of factors
including the profitability of each business division and market conditions. From time to time we guarantee certain minimum compensation levels to attract new employees or to retain existing employees
in a competitive environment. Consistent with industry practice, certain of these guarantees were multi-year. As a result of the change in senior management, the poor market conditions,
and efforts to promote greater teamwork across divisions and product areas, certain of these guarantees were renegotiated in 2001 and contributed to the decrease in employee compensation and benefits.
A portion of our incentive compensation consists of awards of Credit Suisse Group shares under a Credit Suisse Group stock plan, options to acquire shares, and units, the value of which is tied to the
return on equity of CSFB over a three-year period.

30

---

Occupancy
and equipment rental decreased $37 million to $148 million as a result of consolidation of office facilities and decreased head count. Brokerage, clearing, and
exchange fees and other expenses remained essentially flat at $73 million; communications expense decreased by $18 million to $56 million; and professional fees decreased
$58 million to $51 million, all as a result of our cost-cutting initiatives and our focus on core businesses. Merger-related costs of $91 million reflect the accrual
during the quarter of retention awards related to the Acquisition. Other operating expenses decreased $78 million to $72 million primarily as a result of higher expenses in 2001 due to
certain litigation settlements, and the sale of certain broker-dealer subsidiaries in the first quarter of 2002 resulting in lower purchased research and advertising expenses.

In
the Securities Division, pre-tax income increased $123 million to $448 million. Equity pre-tax income decreased $33 million to
$101 million primarily due to decreased trading revenues. Fixed Income pre-tax income increased $156 million to $347 million primarily as a result of increased net
interest income offset by a decrease in investment banking and advisory fees. Investment Banking and Private Equity Division's pre-tax income increased $154 million to
$49 million principally as a result of a decrease in compensation expense reflecting a reduction in staffing levels due to decreased mergers and acquisition activity. Pre-tax income
from our Private Equity business improved by $20 million. Financial Services Division's pre-tax income increased $26 million to $37 million primarily as a result of
cost cutting initiatives.

Our
income tax provision for the second quarter 2002 and 2001 was $148 million and $28 million, a 34% and 29% effective tax rate, respectively.

Net
income for the second quarter 2002 was $283 million compared with $69 million for 2001.

Six Months Ended June 30, 2002 Compared to Six Months Ended June 30, 2001

For the six months ended June 30, 2002, total net revenues decreased $509 million or 11% to $4.1 billion. Total net revenues decreased
primarily as a result of decreases in trading revenues and investment banking and advisory fees, partially offset by increases in net interest income and other income. Included in other income for the
six months ended June 30, 2002 is a pre-tax gain of approximately $528 million on the sales of the U.K. and U.S. CSFBdirectbusiness and Autranet, LLC. Included in other income for the six months ended June 30, 2001 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.

In
the Securities Division, net revenues decreased $336 million to $2.1 billion. Equity net revenues decreased $380 million or 31% to $828 million primarily
as a result of decreased trading revenues offset
by higher commission income and net interest income. The decimalization of the U.S. markets led to decreased profit margins and a shift to a commission-based pricing structure resulted in a reduction
in trading gains. This combined with the decline in the new issues market contributed to the overall decrease in revenues. Fixed Income net revenues increased $44 million or 4% to
$1.3 billion, principally as a result of increased net interest income offset by decreased trading revenues and investment banking and advisory fees. Investment Banking and Private Equity
Division's net revenues decreased $141.0 million or 13% to $953 million primarily due to the decline in investment banking and advisory fees. Revenues from our Private Equity business
increased $28 million primarily as a result of lower losses on investments and lower net interest expense. Financial Services Division net revenues decreased $152 million or 20% to
$616 million primarily as a result of decreased trading and commission revenues and a decrease in net interest income.

Principal
transactions-net, decreased $1.1 billion or 89% to $141 million primarily as a result of decreased revenues from the Securities Division, particularly
mortgages, high yield securities and equity-related products. The decrease in market volatility and the weak equity markets created difficult conditions and contributed to decreased revenues on
derivatives trades. The decreased revenues in NASDAQ equities

31

---

were offset by increased commission revenue due to a change in the pricing structure from one based on trading, in which revenues were generally based on the difference between the bid and ask
prices, to one based on commissions. The losses in mortgages were offset by increased net interest income as a result of lower interest expense due to lower interest rates and a shift from hedging
with interest bearing securities to hedging with forward transactions.

Investment
banking and advisory revenues decreased $249 million or 13% to $1.7 billion as a result of decreased mergers and acquisitions activity.

Commission
revenues decreased $3 million to $775 million as a result of the sale of certain broker-dealer subsidiaries in the first quarter 2002. This was offset by higher
institutional commission revenues received due to a change in the NASDAQ business from one in which revenues were based on the spread to one based on commissions. This change was a result of
decimalization of the U.S. markets.

Interest
and dividend income, net of interest expense, increased $531 million or 122% to $966 million. The increase was a result of reduced interest expense because of the
decline in global interest rates since the first quarter of 2001, which has reduced funding costs.

Other
income increased $361million to $551 million primarily as a result of the net gain recognized from the sales of the U.K and U.S.
CSFBdirectbusiness and Autranet, LLC.

Total
expenses for the six months ended June 30, 2002 decreased $932 million or 23% to $3.1 billion due to the continuing results of a $1 billion cost cutting
initiative for the CSFB business unit begun in the fourth quarter of 2001.

Employee
compensation and benefits decreased $551 million or 21% to $2.0 billion primarily due to staff reductions and lower bonus accruals. 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. Consistent
with industry practice, certain of these guarantees were multi-year. As a result of the change in senior management, the poor market conditions, and efforts to promote greater teamwork
across divisions and product areas, certain of these guarantees were renegotiated and contributed to the decrease in employee compensation and benefits. A portion of our incentive compensation
consists of awards of Credit Suisse Group shares under a Credit Suisse Group stock plan, options to acquire shares, and units, the value of which is tied to the return on equity of CSFB over a
three-year period.

Occupancy
and equipment rental decreased $50 million to $290 million as a result of consolidation of office facilities and decreased head count. Brokerage, clearing and
exchange fees and other expenses remained essentially flat at $144 million; communications expense decreased by $34 million to $118 million; and professional fees decreased
$84 million to $109 million, all as a result of our cost-cutting initiatives and our focus on core businesses. Merger-related costs of $182 million reflect the accrual
of retention awards related to the Acquisition. Other operating expenses decreased $105 million to $235 million primarily as a result of our cost-cutting initiatives which
generated reductions in travel and travel-related expenses. Other operating expenses decreased compared to 2001 due to higher expenses in 2001 from certain litigation settlements and
one-time charitable contributions. In addition, the sale of certain broker-dealer subsidiaries in the first quarter of 2002 reduced purchased research and advertising expenses.

32

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In the Securities Division, pre-tax income decreased $141 million to $581 million. Equity pre-tax income decreased $123 million to
$184 million principally due to a decrease in trading revenues, and Fixed Income pre-tax income decreased $18 million to $397 million principally as a result of
decreased trading revenues and investment banking and advisory fees offset by an increase in net interest income. Investment Banking and Private Equity Division's pre-tax income increased
$129 million to $63 million principally as a result of a decrease in compensation expense reflecting a reduction in staffing levels due to decreased mergers and acquisitions activity.
Pre-tax losses from our Private Equity business increased $9 million. Financial Services Division pre-tax income increased $4 million to $87 million
primarily as a result of lower expenses due to cost cutting initiatives.

Our
income tax provision for the first half of 2002 and first half of 2001 was $343 million and $185 million, a 35% and 33% effective tax rate, respectively.

Net
income for the first half of 2002 was $636 million compared with net income of $372 million in 2001.

LIQUIDITY AND CAPITAL RESOURCES

Liquidity Management Oversight

The Company believes that maintaining access to liquidity is fundamental for firms operating in the financial services industry. The Company has therefore
established a comprehensive process for the management and oversight of its liquidity, funding and capital strategies. The Capital Allocation and Risk Management Committee ("CARMC") has primary
oversight responsibility for these functional disciplines. CARMC periodically reviews and approves our liquidity management policies and targets, in addition to reviewing our liquidity position and
other key risk indicators. The Corporate Treasury department is responsible for the management of liquidity, long-term funding and capital as well as relationships with creditor banks. It
also maintains regular contact with both rating agencies and regulators on liquidity and capital issues. See "Liquidity" in "Business  Certain Factors that May Affect the Company's
Business" in our Annual Report on Form 10-K for the year ended December 31, 2001.

Balance Sheet

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

In
addition to these liquid assets, as part of our investment banking and fixed income market activities we also maintain positions in less liquid assets, including mortgage whole loans,
leveraged funds, high yield debt securities and private equity investments. These assets may be relatively illiquid at times, including periods of market stress. We typically fund a significant
portion of less liquid assets with long-term borrowings and stockholders' equity.

Because
of changes relating to customer needs, economic and market conditions and proprietary trading and other strategies, our total assets or the individual components of total assets
may vary significantly from period to period. At June 30, 2002 and December 31, 2001, our total assets were $235.5 billion and $218.3 billion, respectively.

33

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Funding Sources and Strategy

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

The
majority of our unsecured funding originates largely from two sources: we borrow from affiliates and we issue liabilities directly to the market. We lend funds as needed to our
operating subsidiaries and affiliates on both a senior and subordinated basis, the latter typically to meet capital requirements
in regulated subsidiaries. We generally try to ensure that loans to our operating subsidiaries and affiliates have maturities equal to or shorter in tenor than the maturities of our market borrowings.
Additionally, we generally fund investments in subsidiaries with capital contributions.

Liquidity Planning and Measurement

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

The
principal measure we use to monitor our liquidity position is the "liquidity barometer", which estimates the time horizon over which the adjusted market value of unencumbered assets
plus committed revolving credit facilities exceeds the aggregate value of our maturing unsecured liabilities plus anticipated contingent commitments. The adjusted market value of unencumbered assets
includes a reduction from market value, or "haircut", reflecting the amount that could be realized by pledging an asset as collateral to a third-party lender in a secured funding transaction.
Contingent commitments include such things as letters of credit, guarantees and credit rating-related collateralization requirements. Our objective, as mandated by CARMC, is to ensure that the
liquidity barometer equals or exceeds 365 days. We believe this will enable us to carry out our business plans during extended periods of market stress, while minimizing, to the extent
possible, disruptions to our business.

Contractual Obligations and Contingent Commitments

We have contractual obligations to make future payments under long-term debt and long-term non-cancelable lease and other
agreements and have contingent commitments under a variety of commercial arrangements as described in the notes to our condensed consolidated financial statements.

The
following table sets forth our long-term contractual obligations as of June 30, 2002:

Contractual Obligations

Less than 1 year

1-2 years

3-4 years

After 4 years

Total(In millions)Long-term debt

$
4,763

$
2,445

$
3,605

$
11,414

$
22,227Operating leases


179


358


344


1,776


2,657Total contractual obligations

$
4,942

$
2,803

$
3,949

$
13,190

$
24,884


34

---

Our
long-term borrowings are on an unsecured basis. As of June 30, 2002 and December 31, 2001, the weighted average maturity of our long-term
borrowings was approximately 4.4 years and 4.0 years, respectively. Our lease obligations are primarily for our principal offices in New York City and our other office locations.

The
following table sets forth our short-term unsecured borrowings at June 30, 2002 and December 31, 2001.

June 30,
2002

December 31,
2001(In millions)Bank Loans

$
124

$
951Commercial paper(1)


1,389


1,200Loans from affiliates(2)


10,537


7,136Total

$
12,050

$
9,287


---

The
following table sets forth our contingent commitments at June 30, 2002:

Contingent Commitments

Less than
1 year

1-2 years

3-4 years

Over 4 years

Total Amounts
CommittedAmount of Commitment Expiration Per Period
(In millions)Standby letters of credit(1)

$
638

$


$


$


$
638Private equity(2)


55


6


292


1,768


2,121Total contingent commitments

$
693

$
6

$
292

$
1,768

$
2,759


---

We
issue guarantees to customers of certain of our consolidated subsidiaries with respect to obligations of such subsidiaries incurred in the ordinary course of their business. The
underlying obligations for these guarantees are reflected in our condensed consolidated financial statements, and, therefore, the guarantees do no create any incremental liability. We also issue from
time to time a limited number of guarantees in respect of affiliated sister company obligations incurred in the ordinary course of business. These sister company obligations are not reflected in our
financial statements but are reflected in the financial statements of our ultimate parent companies, Credit Suisse First Boston and Credit Suisse
Group. These guarantees are not included in the table above and are not material contingent commitments.

As
of June 30, 2002, we had commitments to enter into securities purchased under agreements to resell and securities sold under agreements to repurchase of $1.0 billion.
See note 13 of the condensed consolidated financial statements for more information on our commitments and contingent liabilities.

35

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Revolving Credit Facility

We maintain a committed revolving credit facility with various banks that, if drawn upon, would bear interest at short-term rates, such as Federal
Funds or LIBOR. In May 2002, we replaced our $3.5 billion revolving credit facility with a new 364-day $3.0 billion revolving credit facility available to the Company
as borrower. Proceeds from borrowings under this facility can be used for general corporate purposes and Credit Suisse Group guarantees the facility. The facility contains customary covenants that we
believe will not impair our ability to obtain funding. At June 30, 2002, no borrowings were outstanding under this new facility.

Long-term Funding

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

Under
the Company's currently effective $10 billion shelf registration statement on file with the SEC, which allows the Company to issue from time to time senior and subordinated
debt securities and warrants to purchase such securities, the Company had at August 13, 2002 approximately $8.5 billion available for issuance. During the six months ended
June 30, 2002, under this and predecessor shelf registration statements, the Company issued both medium-term notes and longer-dated fixed income securities to extend the maturity
profile of the Company's debt. In the six months ended June 30, 2002, the Company issued $2.75 billion 61/2% notes due 2012, $1.75 billion 53/4%
notes due 2007 and $2.7 billion in medium-term notes off current and predecessor shelf registration statements and $822 million in Euro medium-term notes under
the Company's $5 billion program established in July 2001. On July 19, 2002, the Company issued $1.0 billion of 71/8% senior notes due 2032 off its shelf
registration statement.

Credit Ratings

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

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

At
August 9, 2002, our ratings and ratings outlooks were as follows:

Long-Term Debt

Commercial Paper

OutlookFitch

AA-

F-1+

StableMoody's

Aa3

P-1

NegativeStandard & Poor's

AA-

A-1+

Negative


On
July 5, 2002, Moody's Investors Service affirmed the ratings but changed to "negative" from "stable" the ratings outlook for our Aa3 senior debt rating and the Aa3 senior debt
rating of Credit Suisse Group and Credit Suisse First Boston.

36

---

On
July 17, 2002, Standard & Poor's affirmed the ratings but changed to "negative" from "stable" the ratings outlook for our AA- senior debt rating, the
AA- senior debt rating of Credit Suisse First Boston and the A+ senior debt rating of Credit Suisse Group.

Capital Resources

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

Regulated Subsidiaries

Our principal wholly owned subsidiaries, Donaldson, Lufkin & Jenrette Securities Corporation ("DLJSC") and Credit Suisse First Boston Corporation ("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 the NYSE's net
capital rule, which conforms to the Uniform Net Capital Rule pursuant to Rule 15c3-1 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Under the alternative
method permitted by this rule, the required net capital may not be less than two percent of aggregate debit balances arising from customer transactions or four percent of segregated funds, whichever
is greater. If a member firm's 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, 2002, DLJSC's and CSFB Corp.'s net capital of
approximately $1.6 billion and $3.5 billion, respectively, was 32.97 percent and 114.24 percent, respectively, of aggregate debit balances and in excess of the minimum
requirement by approximately $1.5 billion and $3.4 billion, respectively. Our broker-dealer lite entity, Credit Suisse First Boston Capital LLC, is also subject to the uniform net
capital rule, but calculates its net capital requirements under Appendix F of SEC Rule 15c3-1. The Company's London-based broker-dealer subsidiaries are subject to the
requirements of the Financial Services Authority. Certain other subsidiaries are also subject to capital adequacy requirements. At June 30, 2002, our subsidiaries complied 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. These statements should be read in
conjunction with the note and table on Related Party Transactions that follow our discussion of cash flows.

Six Months Ended June 30, 2002 and 2001

At June 30, 2002 and 2001, cash and cash equivalents totaled $1.5 billion and $1.9 billion, respectively, a decrease of $0.2 billion
and $0.9 billion, respectively, compared to December 31, 2001 and 2000.

Net
cash used in operating activities totaled $11.0 billion and $12.2 billion for the six months ended June 30, 2002 and 2001, respectively. In 2002, there were
increases in assets including financial instruments owned of $4.1 billion, and decreases in liabilities including securities loaned of $7.2 billion, payables to customers of
$2.7 billion, payables to brokers, dealers and other of $2.9 billion, accounts payable and accrued expenses of $1.6 billion, and other liabilities of $1.2 billion. These
were partially offset by decreases in receivables from brokers, dealers and other of $2.2 billion and increases in financial instruments sold not yet purchased of $5.3 billion. In the
first six months of 2001, there were increases in assets including securities borrowed of $2.2 billion, receivables from brokers, dealers and other of

37

---

$4.3 billion, financial instruments owned of $2.7 billion, and decreases in liabilities including securities loaned of $4.2 billion, payables to brokers, dealers, and other of
$1.8 billion, and accounts payable and accrued expenses of $3.4 billion. These were partially offset by decreases in financial instruments sold not yet purchased of $1.9 billion
and obligation to return securities received as collateral of $2.0 billion.

For
the first six months of 2002 and 2001, net cash (used in) provided by investing activities was ($7.1) billion and $1.9 billion, respectively. This was due primarily to an
increase in 2002 in receivables from parent and affiliates of $7.9 billion offset in part by the sales of certain broker-dealer subsidiaries. In 2001, the increase was due to decreased
receivables from parent and affiliates of $1.9 billion.

In
the first six months of 2002 and 2001, net cash provided by financing activities totaled $18.0 billion and $9.5 billion, respectively. During the six months ended
June 30, 2002, there were increases in short-term financings of $2.8 billion, and securities sold under agreements to repurchase, net of securities purchased under agreements
to resell of $8.7 billion, net increases in senior notes of $4.0 billion ($4.7 billion were issued while $700 million matured) and net increases in medium-term
notes of $2.6 billion. During the six months ended June 30, 2001, there were increases in securities sold under
agreements to repurchase, net of securities purchased under agreements to resell of $22.3 billion and a net increase of $1.3 billion of medium-term notes ($2.3 billion
were issued and $1.0 billion matured). These were offset in part by decreases in short-term financings of $9.6 billion and subordinated loan agreements of
$4.2 billion.

RELATED PARTY TRANSACTIONS

Credit Suisse Group ("CSG"), through CSFBI, owns all of our outstanding voting common stock. The Company is involved in significant financing and other
transactions, and has significant related party balances, with CSG and certain of its subsidiaries and affiliates. The Company enters into these transactions in the ordinary course of business and
believes that these transactions are on market terms that could be obtained from unrelated third parties.

The
following table sets forth related party assets and liabilities:

June 30,
2002

December 31,
2001(In millions)Securities purchased under agreements to resell

$
6,875

$
2,740Securities borrowed


1,696


1,552Receivables from brokers, dealers and other


1,736


Derivatives contracts


882


710Taxes receivable (included in other assets and deferred amounts)


12


8Loans receivable


15,580


7,626Total Assets

$
26,781

$
12,636Securities sold under agreements to repurchase

$
19,715

$
13,994Securities loaned


11,494


12,604Short-term borrowings


10,537


7,136Payables to brokers, dealers and other


1,937


2,172Derivatives contracts


518


709Taxes payable (included in other liabilities)


439


959Intercompany payables (included in other liabilities)


81


598Total Liabilities

$
44,721

$
38,172


Included
in these related party transactions are revenues and expenses resulting from various securities trading, investment banking and financing activities with certain affiliates, as
well as fees for

38

---

administrative services performed by the Company under the terms of various service level fee arrangements. Service level fees are treated as a reduction of other operating expenses in the condensed
consolidated statements of income.

The
following table sets forth related party revenues and expenses:

Six Months EndedJune 30, 2002

June 30, 2001(In millions)Commissions

$
(8
)
$
(17
)Interest Income


193


309Total Revenues

$
185

$
292Interest Expense

$
353

$
1,203Other Operating Expenses


(81
)

(66
)Total Expenses

$
272

$
1,137


Pursuant
to an agreement, the Company sold at cost, without recourse, to CSFBI the right, title and interest in certain assets aggregating $410.2 million and $216.2 million
at June 30, 2002 and December 31, 2001, respectively.

See
"Derivatives" and "Off Balance Sheet Transactions" for further discussion of transactions with affiliated companies as well as note 3 to the condensed consolidated financial
statements.

DERIVATIVES

We enter into various transactions involving derivatives. We use derivative contracts for both trading and hedging purposes. These derivatives include options,
forwards, futures and swaps. In general, derivatives are contractual agreements that derive their values from the performance of underlying assets, interest or currency exchange rates, or a variety of
indices. Most of our derivative transactions are accounted for as trading positions.

Hedging Derivatives

We manage our interest rate exposure on our fixed-rate debt by using interest rate swaps that qualify for hedge accounting under Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities" ("SFAS 133"). These financial instruments are accounted for as fair value hedges,
with changes in fair value included in other revenues in the condensed consolidated statements of income.

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 subsequent gains or losses attributable to the hedged item cease to be recognized, while the subsequent changes in the derivative instrument's fair value are recognized in earnings, in
each reporting period. There were no gains or losses on derivatives that were excluded from the assessment of effectiveness during the six months ended June 30, 2002.

Other
derivatives used for hedging purposes that do not qualify as hedges under SFAS 133 are carried at fair value with changes in value included in principal
transactionsnet in the condensed consolidated statements of income. For the six months ended June 30, 2002 and 2001, we recognized an after tax gain (loss) of ($4.0) million and
$3.4 million, respectively, for these derivatives.

39

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Trading Derivatives

Options

We write option contracts specifically designed to meet customer needs or for hedging purposes. These options do not expose us to credit risk since we, not our
counterparty, are obligated to perform. At the beginning of the contract period, we receive a cash premium. During the contract period, we bear the risk of unfavorable changes in the value of the
financial instruments underlying the options ("market risk"). To manage this market risk, we purchase or sell 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.

We
also purchase options for trading purposes. With purchased options, we get 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 rate instruments and foreign currencies. The counterparties to these purchases are reviewed to
determine whether they are creditworthy.

Forwards and Futures

We enter into forward purchases and sales contracts for mortgage-backed securities and foreign currencies. In addition, we enter into futures contracts on
equity-based indices, foreign currencies and other financial instruments as well as options on futures contracts.

For
forward contracts, cash is generally not required at inception; cash equal to the contract value is required at settlement. For futures contracts, the original margin is required 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, we are exposed to credit risk. To monitor this credit risk, we limit transactions with specific
counterparties, review credit limits and adhere to internally established credit extension policies. For futures contracts and options on futures contracts, the change in the market value is settled
with the exchanges in cash each day. As a result, the credit risk with the futures exchanges is limited to the net positive change in the market value for a single day.

Swaps

Our swap agreements consist primarily of equity and interest rate swaps. 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. Interest rate swaps are contractual
agreements to exchange interest rate payments based on agreed notional amounts and maturity. Swaps are reported at fair value.

Quantitative Disclosures for All Derivatives

The fair values of all derivatives outstanding at June 30, 2002 and December 31, 2001 are as follows:

June 30, 2002

December 31, 2001Assets

Liabilities

Assets

Liabilities(In millions)Options

$
725

$
1,073

$
968

$
1,010Forward contracts


640


443


1,652


1,647Futures contracts


18


36


103


20Swaps


733


349


354


280Total

$
2,116

$
1,901

$
3,077

$
2,957


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

40

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Derivatives With Related Parties

Included below are derivatives transactions with related parties consisting primarily of interest rate, foreign exchange and credit default swaps. The fair value
of derivatives outstanding at June 30, 2002 and December 31, 2001 with related parties was as follows:

June 30, 2002

December 31, 2001Assets

Liabilities

Assets

Liabilities(In millions)Options

$
91

$
246

$
157

$
383Forward contracts


186


98


212


117Swaps


605


174


341


209$
882

$
518

$
710

$
709


Sources and Maturities of OTC Derivatives

The following table sets forth the distributions, by maturity, of substantially all of our exposure with respect to OTC derivatives as of June 30, 2002
after taking into account the effect of netting agreements. Fair values were determined on the basis of pricing models and other valuation methods.

|                  |       | Assets
Fair Value at June 30, 2002
|----------------- | ----- | ----------------------------------
|
|
|Options           |       | $                                 
|Forward Contracts |       |                                   
|Swaps             |       |                                   
|                  |       |                                   
|                  | Total |                                   
|                  |       |                                   

|                  |       | Liabilities
Fair Value at June 30, 2002
|----------------- | ----- | ---------------------------------------
|
|
|Options           |       | $                                      
|Forward Contracts |       |                                        
|Swaps             |       |                                        
|                  |       |                                        
|                  | Total |                                        
|                  |       |                                        

PRIVATE EQUITY ACTIVITIES

Our private equity activities include direct investments and investments in partnerships that make private equity and related investments in various portfolio
companies and funds. Our subsidiaries act as general partner of many of these private equity partnerships. These investments are carried at estimated fair value in our consolidated financial
statements. These investments are primarily in unlisted or illiquid equity or equity-related securities. At June 30, 2002 and December 31, 2001, we had private equity and other
long-term investments of $776 million and $963 million, respectively, and had commitments to invest up to an additional $2.1 billion and $1.7 billion,
respectively. We managed or advised funds and proprietary equity portfolios with total committed capital of $20.1 billion and $20.7 billion at June 30, 2002 and
December 31, 2001, respectively.

41

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

We underwrite, trade and hold high yield debt, mortgage whole loans, loan participations 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 fair value, mortgage whole loans and loan participations at lower of cost or fair value and foreign sovereign and other non-investment-grade debt
at fair value. Timing of the securitization of our mortgage whole loan inventory will impact the size of our positions at any given time. The following summarizes our positions in these instruments:

June 30, 2002

December 31, 2001Long

Short

Long

Short(In millions)High yield debt

$
1,035

$
638

$
895

$
731Mortgage whole loans


7,387





6,846


Loan participations


130





162


Other non-investment grade debt


29





187


Total

$
8,581

$
638

$
8,090

$
731


OFF BALANCE SHEET ARRANGEMENTS

In the ordinary course of business, we sell commercial and residential mortgage whole loans to special purpose vehicles ("SPVs"). These SPVs are set up by our
subsidiaries and affiliates to securitize mortgage whole loans. Our principal broker-dealer subsidiary, CSFB Corp., underwrites asset-backed securities for the SPVs. These SPVs are qualified special
purpose vehicles ("QSPEs") under Statement of Financial Accounting Standards No. 140, "Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities" a
replacement of FASB Statement No. 125 ("SFAS 140"). As more fully described below under "Accounting Developments", SFAS 140 sets forth specific guidelines to distinguish transfers
of financial assets that are sales from transfers that are secured borrowings. An SPV that is a QSPE is not required to be consolidated in the transferor's financial statements. For an SPV to qualify
as a QSPE, certain conditions must be met such as being an entity demonstratively distinct from the transferor, with limits on permitted activities, assets it can hold and permitted sales, exchanges,
puts or distribution of its assets. Since our securitization SPVs have been structured to qualify as QSPEs, the related assets and liabilities are not consolidated into our financial statements.

As
part of our securitization activities, commercial and residential mortgages are sold to qualifying entities or SPEs and securitized. Beneficial interests in those entities are sold to
investors. The investors and the securitization entities have no recourse to the Company's assets. For the six months ended June 30, 2002, we securitized $3 billion in residential
mortgages. For the six months ended June 30, 2002 net loss recognized on these transactions was $21.2 million. For the six months ended June 30, 2001, we securitized
$202.3 million in residential mortgages. For the six months ended June 30, 2001 net loss recognized on these transactions was $0.7 million. In addition, for the six months ended
June 30, 2002 and 2001, we sold $11.7 billion and $6.5 billion, respectively, of residential and commercial mortgages to an affiliate, which were subsequently securitized. Our
primary broker-dealer subsidiary acting as underwriter has unsold positions of $537 million and $528 million at June 30, 2002 and 2001, respectively, associated with these
transactions.

42

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ACCOUNTING DEVELOPMENTS

In June 2001, the Financial Accounting Standards Board (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 is not permitted. The Company previously adopted SFAS 141 for all business combinations initiated after June 30, 2001. Effective January 1, 2002, the Company adopted the
remaining provisions of SFAS 141.

In
June 2001, the FASB issued Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets" ("SFAS 142"), which requires that goodwill
and indefinite-lived intangible assets be reviewed annually for impairment instead of being amortized to earnings. Intangible assets that do not have indefinite lives will continue to be amortized
over their useful lives and reviewed for impairment. Effective January 1, 2002, the Company adopted SFAS 142. During the second quarter of 2002, the Company completed the transitional
impairment test of goodwill as of January 1, 2002 and determined that there was no impairment to goodwill and no effect on the Company's consolidated financial condition or results of
operations as of January 1, 2002. There have been no events or circumstances occurring subsequent to the transitional impairment test that would more likely than not have resulted in the fair
value of the Company's reporting units being below their respective carry values. See note 15 of the condensed consolidated financial statements for more information on goodwill and
identifiable intangible assets.

In
June 2001, the FASB issued Statement of Financial Accounting Standards No. 143, "Accounting for Asset Retirement Obligations" ("SFAS 143"), which addresses the
financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs. This statement is effective for
fiscal years beginning after June 15, 2002. Management believes that the adoption of SFAS 143 will not have a significant impact on the Company's consolidated financial condition or
results of operations.

In
October 2001, the FASB, issued Statement of Financial Accounting Standards No. 144, "Accounting for Impairment or Disposal of Long-Lived Assets"
("SFAS 144"), which replaces FASB Statement No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of".
SFAS 144 requires that long-lived assets which are "held for sale" be measured at the lower of carrying amount or fair value less cost to sell and also broadens the reporting
requirements for discontinued operations. This statement is effective for fiscal years beginning after December 15, 2001, and is to be applied prospectively. Effective January 1, 2002,
the Company adopted SFAS 144. There was no impact on the Company's consolidated financial condition or results of operations as a result of adopting SFAS 144.

In
April 2002, the FASB issued Statement of Financial Accounting Standards No. 145, "Rescission of FASB Statements No. 4, 44 and 64, Amendment of FASB Statement
No. 13, and Technical Corrections" ("SFAS 145"). This Statement rescinds FASB Statement No. 4, "Reporting Gains and Losses from Extinguishment of Debt", and an amendment of that
Statement, FASB Statement No. 64, "Extinguishments of Debt Made to Satisfy Sinking-Fund Requirements". This amends FASB Statement No. 13, Accounting for Leases, to eliminate
an inconsistency between the required accounting for sale-leaseback transactions and the required accounting for certain lease modifications that have economic effects that are similar to
sale-leaseback transactions. This statement is effective for fiscal years beginning after May 15, 2002. Management is evaluating the impact of adopting SFAS 145.

In
June 2002, the FASB issued Statement of Financial Accounting Standards No. 146 "Accounting for Costs Associated with Exit or Disposal Activities" ("SFAS 146"),
which requires companies to recognize costs associated with exit or disposal activities when they are incurred rather than at the date of a commitment to an exit or disposal plan. Examples of costs
covered by the standard include lease

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termination costs and certain employee severance costs that are associated with restructuring a discontinued operation, plant closing, or other exit or disposal activity. The statement is effective
for exit or disposal activities initiated after December 31, 2002. Management is evaluating the impact of adopting SFAS 146.

In
June 2002, the FASB issued an Exposure Draft, "Proposed Interpretation: Consolidation of Certain Special-Purpose Entitiesan Interpretation of ARB No. 51".
This Proposed Interpretation would address consolidation by business enterprises of special purpose entities ("SPEs") to which the usual condition for consolidation described in Accounting Research
Bulletin No. 51,Consolidated Financial Statements,does not apply because the SPEs have no voting interests or otherwise are not subject to
control through ownership of voting interests. If the Proposed Interpretation were adopted, off balance sheet treatment would be eliminated for many transactions that were structured by companies
under current accounting guidance. Management is evaluating the impact of having to adopt the Proposed Interpretation.

ITEM 3: Quantitative and Qualitative Disclosures about Market Risk

Risk Management and Value at Risk

For a description of the Company's risk management policies and procedures and value-at-risk ("VAR") model, including such model's
assumptions and limitations, refer to the Management's Discussion and Analysis of Financial Condition and Results of Operations included in the Company's 2001 Annual Report on
Form 10-K. The Company-wide trading portfolio VAR was approximately $31.0 million and $28.7 million at June 30, 2002 and December 31, 2001,
respectively.

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

June 30,
2002

December 31,
2001Trading:Interest rate risk

$
31.7

$
29.2Equity risk


5.9


10.0Foreign currency exchange risk


0.1


0.0Total

$
31.0

$
28.7


The
equity risk on our non-trading financial instruments portfolio, which is mainly comprised of our private equity investments, is calculated using a
sensitivity analysis as described in the Company's 2001 Annual Report on Form 10-K. The Company equity risk on the non-trading portfolio was approximately
$77.6 million and $95.9 million at June 30, 2002 and December 31, 2001, respectively.

The
interest rate risk on non-trading positions is measured using sensitivity analysis that estimates the potential decline in the value of the non-trading
portfolio resulting from a 100 basis points decline in the interest rates of G21 nations and a 200 basis points decline in the interest rates of non-G21 nations. Our
non-trading interest rate risk was approximately $353.8 million and $361.0 million at June 30, 2002 and December 31, 2001, respectively.

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

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PART II    OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Certain significant legal proceedings and matters have been previously disclosed in the Company's Annual Report on Form 10-K for the year ended
December 31, 2001 and Quarterly Report on Form 10-Q for the three months ended March 31, 2002. The following is an update of such proceedings.

Independent Energy Holdings PLC Litigation

By Opinion and Order entered on May 30, 2002, the Court certified a class of 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.

Litigation Relating to CSFB's Acquisition of DLJ

On June 6, 2002, the Court approved the settlement in the consolidatedIn re CSFBdirect Tracking Stock Shareholders
Litigationand dismissed the action with prejudice.

Litigation Relating To IPO Allocation Practices

On May 24, 2002, CSFB Corp. moved to dismiss the amended complaint filed in the U.S. District Court for the Southern District of New York alleging
violations of the federal and state antitrust laws in connection with alleged IPO allocation practices.

On
June 25, 2002, the Court denied CSFB Corp.'s motion to dismiss the amended complaint in the action pending in the U.S. District Court for the Southern District of New York
brought by a putative class of issuers in initial public offerings in which CSFB Corp. acted as lead manager.

On
July 1, 2002, CSFB Corp., DLJSC and several other investment banks moved to dismiss the consolidated amended class action complaints filed in the U.S. District Court for the
Southern District of New York concerning IPO allocation practices.

Enron-related Litigation and Inquiries

On May 8, 2002, CSFB Corp. moved to dismiss the putative class action complaint in theTittle v. Enron Corp., et.
almatter that was filed on April 8, 2002 in Texas federal court by participants in Enron's employee savings plans against Enron and certain executives and directors of
Enron, Arthur Andersen and certain partners, executives and employees of Arthur Andersen, the law firm of Vincent & Elkins, L.L.P. and certain partners of Vincent & Elkins, and CSFB
Corp. and certain other investment banks.

On
May 8, 2002, CSFB Corp. moved to dismiss the consolidated putative class action complaint in theNewby v. Enron Corp., et. almatter that was filed on April 8, 2002 in Texas federal court on behalf of purchasers of Enron stock against Enron and certain executives and directors of Enron, Arthur Andersen and certain
partners, executives and employees of Arthur Andersen, the law firms of Vincent & Elkins, L.L.P. and Kirkland & Ellis, and CSFB Corp. and certain other investment banks.

TheRetirement Systems of Alabama v. Merrill Lynch & Co., et. almatter, filed on March 15, 2002 against certain executives
and directors of Enron, Arthur Andersen, and CSFB Corp. and certain other investment banks, has been remanded to Alabama state court, and on July 18, 2002, CSFB Corp. moved to dismiss
plaintiff's third amended complaint.

We
have received additional requests for information from certain U.S. Congressional committees and additional requests for information and/or subpoenas from certain governmental and
regulatory

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agencies regarding certain transactions and business relationships with Enron and its affiliates, including certain Enron-related special purpose entities. We are cooperating fully with such
inquiries.

On
July 12, 2002, CSFB Corp. was named as an additional defendant in an action brought by a non-profit electric power cooperative against various defendants, including
certain energy and power companies, financial institutions, other investment banks and one individual, in the District Court of Johnson County in the State of Texas. On July 25, 2002, certain
defendants removed the case to the U.S. District Court for the Northern District of Texas. The complaint alleges violations of Texas statutory and common law in connection with the purchase of an
electric generating plant in Texas by an Enron designee.

On
July 22, 2002, certain executives and directors of Enron, Arthur Andersen and certain partners, executives and employees of Arthur Andersen, the law firm of Vinson &
Elkins, L.L.P. and certain of its partners, CSFB Corp., Credit Suisse First Boston International, Credti Suisse First Boston Europe Ltd., DLJ and certain other investment banks were named in a
putative class action filed in the U.S. District Court for the Southern District of New York by purchasers of certain credit-linked notes. Three of our employees (as well as certain employees of other
investment banks) were also named as defendants in the complaint. The complaint alleges violations of the Racketeer Influenced and Corrupt Organizations Act, or RICO, in connection with various
offerings of credit-linked notes.

Research Matters

We have received a subpoena from the U.S. Department of Justice and from the Commonwealth of Massachusetts relating to research departments. We are cooperating
fully with this inquiry.

General

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

ITEMS 2, 3 and 4.

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

ITEM 5.

We have made in this Quarterly Report on Form 10-Q, including, without limitation in "Legal Proceedings" in Part II, Item 1, and in
"Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part I, Item 2, and from time to time may otherwise make in our public filings and press releases,
forward-looking statements concerning our operations, economic performance and financial condition, as well as our future plans and strategic objectives. Such forward-looking statements are subject to
various risks and uncertainties, and we claim the protection afforded by the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Actual
results could differ materially from those anticipated herein or in any such other filings, releases or statements because of a number of factors, including without limitation, those detailed in
"BusinessCertain Factors That May Affect Our Business" in Part I, Item 1 of our Annual Report on Form 10-K for the year ended December 31, 2001, those
discussed elsewhere herein, and in other public filings and press releases. These forward-looking statements are not historical facts but instead represent only our belief

46

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regarding future events, many of which, by their nature, are inherently uncertain and beyond our control. By identifying these statements for you in this manner, we are alerting you to the
possibility that our actual results may differ, possibly materially, from the results indicated in these forward-looking statements. We undertake no obligation to update or revise any forward-looking
statements except as otherwise required by applicable law.

ITEM 6. EXHIBITS



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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, 2002 |  | By:                                   

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INDEX TO EXHIBITS

|Exhibits No. |  | Description                                        
|------------ |  | ---------------------------------------------------
|12           |  | Computation of ratio of earnings to fixed charges.*
|15           |  | Letter re unaudited interim financial information* 

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