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SECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549

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FORM 10-Q

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

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For the quarter ended March 31, 2001

Commission File Number: 1-6862


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

Delaware(State or other jurisdiction of
incorporation or organization)

13-1898818(I.R.S. employer
identification no.)Eleven Madison Avenue
New York, N.Y.(Address of principal executive offices)

10010(Zip Code)


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

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

As
of May 10, 2001, there were 18,400,000 shares of non-voting common stock of the registrant, $0.10 par value ("CSFBdirectCommon Stock"), outstanding. As of May 10, the aggregate market value
of the CSFBdirectCommon Stock held by
non-affiliates of the registrant was approximately $87.4 million. All of the outstanding shares of voting common stock of the registrant, $0.10 par value, are held by Credit Suisse
First Boston, Inc.

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Credit Suisse First Boston (USA), Inc.    Quarterly Report on Form 10-Q for the Quarter Ended March 31, 2001

|                          |  |                       |  |                                                                                       |  |                                                                                                                                                                 |  | Page
Number
|------------------------- |  | --------------------- |  | ------------------------------------------------------------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -----------
|Part I                    |  | FINANCIAL INFORMATION |  |                                                                                      
|                          |  | Item 1.               |  | Financial Statements                                                                  |  |                                                                                                                                                                
|                          |  |                       |  | Credit Suisse First Boston (USA), Inc. Consolidated Financial Statements              |  |                                                                                                                                                                
|                          |  |                       |  |                                                                                       |  | Condensed Consolidated Statements of Financial Condition at March 31, 2001 and December 31, 2000 (Unaudited)                                                    |  | 3          
|                          |  |                       |  |                                                                                       |  | Condensed Consolidated Statements of Income for the three months ended March 31, 2001 and 2000 (Unaudited)                                                      |  | 5          
|                          |  |                       |  |                                                                                       |  | Condensed Consolidated Statements of Changes in Stockholders' Equity for the three months ended March 31, 2001 and the year ended December 31, 2000 (Unaudited) |  | 7          
|                          |  |                       |  |                                                                                       |  | Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2001 and 2000 (Unaudited)                                                  |  | 8          
|                          |  |                       |  |                                                                                       |  | Notes to Condensed Consolidated Financial Statements (Unaudited)                                                                                                |  | 10         
|                          |  |                       |  | CSFBdirectCombined Financial Statements                                               |  |                                                                                                                                                                
|                          |  |                       |  |                                                                                       |  | Condensed Combined Statements of Financial Condition at March 31, 2001 and December 31, 2000 (Unaudited)                                                        |  | 32         
|                          |  |                       |  |                                                                                       |  | Condensed Combined Statements of Operations for the three months ended March 31, 2001 and 2000 (Unaudited)                                                      |  | 33         
|                          |  |                       |  |                                                                                       |  | Condensed Combined Statements of Changes in Allocated Equity for the three months ended March 31, 2001 and the year ended December 31, 2000 (Unaudited)         |  | 34         
|                          |  |                       |  |                                                                                       |  | Condensed Combined Statements of Cash Flows for the three months ended March 31, 2001 and 2000 (Unaudited)                                                      |  | 35         
|                          |  |                       |  |                                                                                       |  | Notes to Condensed Combined Financial Statements (Unaudited)                                                                                                    |  | 36         
|                          |  | Item 2.               |  | Management's Discussion and Analysis of Financial Condition and Results of Operations |  |                                                                                                                                                                
|                          |  |                       |  |                                                                                       |  | Credit Suisse First Boston (USA), Inc. Management's Discussion and Analysis of Financial Condition and Results of Operations                                    |  | 23         
|                          |  |                       |  |                                                                                       |  | CSFBdirectManagement's Discussion and Analysis of Financial Condition and Results of Operations                                                                 |  | 40         
|                          |  | Item 3.               |  | Quantitative and Qualitative Disclosures about Market Risk                            |  | 29                                                                                                                                                             
|                          |  | Item 4.               |  | Submission of Matters to a Vote of Security Holders                                   |  | 29                                                                                                                                                             
|Part II OTHER INFORMATION |  |                      
|                          |  | Item 1.               |  | Legal Proceedings                                                                     |  |                                                                                                                                                                
|                          |  |                       |  | Credit Suisse First Boston (USA), Inc                                                 |  | 30                                                                                                                                                             
|                          |  | Item 6.               |  | Exhibits and Reports on Form 8-K                                                      |  | 43                                                                                                                                                             
|                          |  | Signature             |  | 44                                                                                   

2

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

|                                                                                                                    |                                                                                                                       | March 31,
2001 |             | December 31,
2000
|------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------- | -------------- | ----------- | -----------------
|ASSETS                                                                                                              |                                                                                                                       |                |             |                  
|Cash and cash equivalents                                                                                           |                                                                                                                       | $              | 3,875,397   |                  
|Cash and securities segregated for regulatory purposes or deposited with clearing organizations                     |                                                                                                                       |                | 4,445,711   |                  
|Collateralized short-term agreements:                                                                               |                                                                                                                       |                |             |                  
|                                                                                                                    | Securities purchased under agreements to resell                                                                       |                |             | 43,035,444       
|                                                                                                                    | Securities borrowed                                                                                                   |                |             | 71,744,498       
|Receivables:                                                                                                        |                                                                                                                       |                |             |                  
|                                                                                                                    | Customers                                                                                                             |                |             | 6,326,073        
|                                                                                                                    | Brokers, dealers and other                                                                                            |                |             | 12,681,322       
|Note receivable from parent                                                                                         |                                                                                                                       |                | 3,100,000   |                  
|Financial instruments owned, at value:                                                                              |                                                                                                                       |                |             |                  
|                                                                                                                    | U.S. government and agencies (includes securities pledged as collateral of $19,647,543 and $14,272,177, respectively) |                |             | 22,130,277       
|                                                                                                                    | Corporate debt (includes securities pledged as collateral of $9,619,078 and $6,074,305, respectively)                 |                |             | 14,236,786       
|                                                                                                                    | Foreign sovereign debt                                                                                                |                |             | 66,184           
|                                                                                                                    | Mortgage whole loans (includes securities pledged as collateral of $2,142,047 and $4,136,383, respectively)           |                |             | 7,054,112        
|                                                                                                                    | Equities (includes securities pledged as collateral of $7,317,721 and $9,325,965, respectively)                       |                |             | 12,282,782       
|                                                                                                                    | Other                                                                                                                 |                |             | 2,821,856        
|                                                                                                                    | Long-term corporate development investments                                                                           |                |             | 975,285          
|Federal income taxes receivable                                                                                     |                                                                                                                       |                | 465,856     |                  
|Net deferred tax asset                                                                                              |                                                                                                                       |                | 1,490,698   |                  
|Office facilities at cost (net of accumulated depreciation and amortization of $565,325 and $723,365, respectively) |                                                                                                                       |                | 731,289     |                  
|Other assets and deferred amounts                                                                                   |                                                                                                                       |                | 2,101,806   |                  
|Goodwill                                                                                                            |                                                                                                                       |                | 301,835     |                  
|                                                                                                                    |                                                                                                                       |                |             |                  
|Total Assets                                                                                                        |                                                                                                                       | $              | 209,867,211 |                  
|                                                                                                                    |                                                                                                                       |                |             |                  

See
accompanying notes to condensed consolidated financial statements.

3

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|                                                                                                                       |                                                | March 31,
2001                                                                                                                                                                                                     |                            | December 31,
2000 |        
|---------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | -------------------------- | ----------------- | -------
|LIABILITIES AND STOCKHOLDERS' EQUITY                                                                                   |                                                |                                                                                                                                                                                                                    |                            |                   |        
|Commercial paper and short-term borrowings                                                                             |                                                | $                                                                                                                                                                                                                  | 13,787,813                 |                   | $      
|Collateralized short-term financings:                                                                                  |                                                |                                                                                                                                                                                                                    |                            |                   |        
|                                                                                                                       | Securities sold under agreements to repurchase |                                                                                                                                                                                                                    |                            | 85,717,495        |        
|                                                                                                                       | Securities loaned                              |                                                                                                                                                                                                                    |                            | 31,888,763        |        
|Payables:                                                                                                              |                                                |                                                                                                                                                                                                                    |                            |                   |        
|                                                                                                                       | Customers                                      |                                                                                                                                                                                                                    |                            | 12,367,765        |        
|                                                                                                                       | Brokers, dealers and other                     |                                                                                                                                                                                                                    |                            | 13,948,672        |        
|Financial instruments sold not yet purchased, at value:                                                                |                                                |                                                                                                                                                                                                                    |                            |                   |        
|                                                                                                                       | U.S. government and agencies                   |                                                                                                                                                                                                                    |                            | 19,891,578        |        
|                                                                                                                       | Corporate debt                                 |                                                                                                                                                                                                                    |                            | 3,530,840         |        
|                                                                                                                       | Equities                                       |                                                                                                                                                                                                                    |                            | 2,815,510         |        
|                                                                                                                       | Other                                          |                                                                                                                                                                                                                    |                            | 2,462,987         |        
|Accounts payable and accrued expenses                                                                                  |                                                |                                                                                                                                                                                                                    | 4,415,597                  |                   |        
|Other liabilities                                                                                                      |                                                |                                                                                                                                                                                                                    | 1,147,248                  |                   |        
|Long-term borrowings                                                                                                   |                                                |                                                                                                                                                                                                                    | 10,582,394                 |                   |        
|Company-obligated mandatorily redeemable trust securities of subsidiary trust holding solely debentures of the Company |                                                |                                                                                                                                                                                                                    | 200,000                    |                   |        
|Stockholders' Equity:                                                                                                  |                                                |                                                                                                                                                                                                                    |                            |                   |        
|                                                                                                                       | Preferred stock, 50,000,000 shares authorized: |                                                                                                                                                                                                                    |                            |                   |        
|                                                                                                                       |                                                | Series A Preferred Stock, at $50.00 per share liquidation preference (4,000,000 shares issued and outstanding)                                                                                                     |                            |                   | 200,000
|                                                                                                                       |                                                | Series B Preferred Stock, at $50.00 per share liquidation preference (3,500,000 shares issued and outstanding)                                                                                                     |                            |                   | 175,000
|                                                                                                                       | Common Stock, 1,500,000,000 shares authorized: |                                                                                                                                                                                                                    |                            |                   |        
|                                                                                                                       |                                                | CSFB (USA) Common Stock ($0.10 par value; 500,000,000 shares authorized; 1,000 shares issued and outstanding)                                                                                                      |                            |                   |       
|                                                                                                                       |                                                | CSFBdirectCommon Stock ($0.10 par value; 500,000,000 shares authorized; 18,400,000 shares issued and outstanding; 90,752,242 and 84,250,000 notional shares, respectively, in
respect of CSFB's retained interest) |                            |                   | 1,840  
|                                                                                                                       | Paid-in capital                                |                                                                                                                                                                                                                    |                            | 5,380,157         |        
|                                                                                                                       | Retained earnings                              |                                                                                                                                                                                                                    |                            | 1,362,219         |        
|                                                                                                                       | Accumulated other comprehensive loss           |                                                                                                                                                                                                                    |                            | (8,667            | )      
|                                                                                                                       |                                                |                                                                                                                                                                                                                    |                            |                   |        
|                                                                                                                       |                                                |                                                                                                                                                                                                                    | Total stockholders' equity |                   |        
|                                                                                                                       |                                                |                                                                                                                                                                                                                    |                            |                   |        
|Total Liabilities and Stockholders' Equity                                                                             |                                                | $                                                                                                                                                                                                                  | 209,867,211                |                   | $      
|                                                                                                                       |                                                |                                                                                                                                                                                                                    |                            |                   |        

See
accompanying notes to condensed consolidated financial statements.

4

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

|                                                                                                 |                                                                                                   | Three Months Ended
March 31,
|------------------------------------------------------------------------------------------------ | ------------------------------------------------------------------------------------------------- | ----------------------------
|
|Revenues:                                                                                        |                                                                                                   |                             
|                                                                                                 | Principal transactions-net                                                                        |                             
|                                                                                                 | Investment banking and advisory                                                                   |                             
|                                                                                                 | Commissions                                                                                       |                             
|                                                                                                 | Interest and dividend income (net of interest expense of $3,300,420 and $1,550,064, respectively) |                             
|                                                                                                 | Other                                                                                             |                             
|                                                                                                 |                                                                                                   |                             
|                                                                                                 |                                                                                                   | Total revenues              
|                                                                                                 |                                                                                                   |                             
|Expenses:                                                                                        |                                                                                                   |                             
|                                                                                                 | Employee compensation and benefits                                                                |                             
|                                                                                                 | Occupancy and equipment rental                                                                    |                             
|                                                                                                 | Brokerage, clearing, exchange fees                                                                |                             
|                                                                                                 | Communications                                                                                    |                             
|                                                                                                 | Professional fees                                                                                 |                             
|                                                                                                 | Merger-related costs                                                                              |                             
|                                                                                                 | Other operating expenses                                                                          |                             
|                                                                                                 |                                                                                                   |                             
|                                                                                                 |                                                                                                   | Total costs and expenses    
|                                                                                                 |                                                                                                   |                             
|Income before provision for income taxes and cumulative effect of change in accounting principle |                                                                                                   |                             
|                                                                                                 |                                                                                                   |                             
|Provision for income taxes                                                                       |                                                                                                   |                             
|                                                                                                 |                                                                                                   |                             
|Income before cumulative effect of change in accounting principle                                |                                                                                                   |                             
|                                                                                                 |                                                                                                   |                             
|Cumulative effect of change in accounting principle, net of tax provision of $346                |                                                                                                   |                             
|                                                                                                 |                                                                                                   |                             
|Net income                                                                                       |                                                                                                   | $                           
|                                                                                                 |                                                                                                   |                             
|Dividends on preferred stock                                                                     |                                                                                                   | $                           
|                                                                                                 |                                                                                                   |                             
|Earnings applicable to common shares                                                             |                                                                                                   | $                           
|                                                                                                 |                                                                                                   |                             

See
accompanying notes to condensed consolidated financial statements.

5

---

|                                             |                               | Three Months Ended
March 31,                                     
|-------------------------------------------- | ----------------------------- | -----------------------------------------------------------------
|
|Earnings (loss) applicable to common shares: |                               |                                                                  
|                                             | CSFB (USA):                   |                                                                  
|                                             |                               | Income before cumulative effect of change in accounting principle
|                                             |                               | Cumulative effect of change in accounting principle, net of tax  
|                                             |                               | Net income                                                       
|                                             | CSFBdirect                    |                                                                  
|Earnings (loss) per common share:            |                               |                                                                  
|                                             | CSFB (USA)Basic and Diluted: |                                                                  
|                                             |                               | Income before cumulative effect of change in accounting principle
|                                             |                               | Cumulative effect of change in accounting principle, net of tax  
|                                             |                               | Net income                                                       
|                                             | CSFBdirect                    |                                                                  
|                                             |                               | Basic                                                            
|                                             |                               | Diluted                                                          
|Weighted average common shares:              |                               |                                                                  
|                                             | CSFB (USA)                    |                                                                  
|                                             |                               | Basic and Diluted                                                
|                                             |                               |                                                                  
|                                             | CSFBdirect                    |                                                                  
|                                             |                               | Basic                                                            
|                                             |                               | Diluted                                                          
|                                             |                               |                                                                  

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

See
accompanying notes to condensed consolidated financial statements.

6

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

|                                                              |                                             | Preferred
Stock            |         | CSFB
(USA)
Common
Stock |   | CSFBdirectCommon
Stock |   | Paid-in
Capital |       | Retained
Earnings |   | Accumulated
Other
Comprehensive
Income (loss) |   | Total |           
|------------------------------------------------------------- | ------------------------------------------- | -------------------------- | ------- | ----------------------- | - | ---------------------- | - | --------------- | ----- | ----------------- | - | --------------------------------------------- | - | ----- | ----------
|Balances at December 31, 1999                                 |                                             | $                          | 375,000 |                         | $ |                       |   | $               | 1,840 |                   | $ | 1,322,540                                     |   | $     | 2,205,818 
|Net loss                                                      |                                             |                            |        |                         |   |                       |   |                 |      |                   |   |                                              |   |       | (1,075,812
|Translation adjustment                                        |                                             |                            |        |                         |   |                       |   |                 |      |                   |   |                                              |   |       |          
|                                                              |                                             | Total comprehensive loss   |         |                         |   |                        |   |                 |       |                   |   |                                               |   |       |           
|Issuance of shares in consideration of transfer of CSFB Corp. |                                             |                            |        |                         |   |                       |   |                 |      |                   |   | 2,537,976                                     |   |       |          
|Dividend of DLJ Asset Management Group to parent              |                                             |                            |        |                         |   |                       |   |                 |      |                   |   |                                              |   |       | (28,473   
|Dividends:                                                    |                                             |                            |         |                         |   |                        |   |                 |       |                   |   |                                               |   |       |           
|                                                              | CSFB (USA) Common Stock ($31,250 per share) |                            |         |                        |   |                        |  |                 |       |                  |   |                                               |  |       |           
|                                                              | Preferred stock ($2.82 per share)           |                            |         |                        |   |                        |  |                 |       |                  |   |                                               |  |       |           
|CSG Share Plan Activity                                       |                                             |                            |        |                         |   |                       |   |                 |      |                   |   | 298,648                                       |   |       |          
|Exercise of stock options                                     |                                             |                            |        |                         |   |                        |   |                 |      |                   |   | 373,140                                       |   |       |          
|Tax benefit on exercise of stock options                      |                                             |                            |        |                         |   |                       |   |                 |      |                   |   | 406,447                                       |   |       |          
|Tender shares to employee trust                               |                                             |                            |        |                         |   |                       |   |                 |      |                   |   | 122,724                                       |   |       |          
|Conversion of restricted stock units                          |                                             |                            |        |                         |   |                       |   |                 |      |                   |   | 10,740                                        |   |       |          
|                                                              |                                             |                            |         |                         |   |                        |   |                 |       |                   |   |                                               |   |       |           
|Balances at December 31, 2000                                 |                                             |                            | 375,000 |                         |   |                       |   |                 | 1,840 |                   |   | 5,072,215                                     |   |       | 1,064,413 
|Net income                                                    |                                             |                            |        |                         |   |                       |   |                 |      |                   |   |                                              |   |       | 303,095   
|Translation adjustment                                        |                                             |                            |        |                         |   |                       |   |                 |      |                   |   |                                              |   |       |          
|Change in accounting principle (FAS 133)                      |                                             |                            |        |                         |   |                       |   |                 |      |                   |   |                                              |   |       |          
|                                                              |                                             | Total comprehensive income |         |                         |   |                        |   |                 |       |                   |   |                                               |   |       |           
|Capital contribution of CSFB Capital Holdings, Inc.           |                                             |                            |        |                         |   |                       |   |                 |      |                   |   | 34,519                                        |   |       |          
|Dividends:                                                    |                                             |                            |         |                         |   |                        |   |                 |       |                   |   |                                               |   |       |           
|                                                              | Preferred stock ($0.705 per share)          |                            |         |                        |   |                        |  |                 |       |                  |   |                                               |  |       |           
|CSG Share Plan Activity                                       |                                             |                            |        |                         |   |                       |   |                 |      |                   |   | 273,423                                       |   |       |          
|                                                              |                                             |                            |         |                         |   |                        |   |                 |       |                   |   |                                               |   |       |           
|Balances at March 31, 2001                                    |                                             | $                          | 375,000 |                         | $ |                       |   | $               | 1,840 |                   | $ | 5,380,157                                     |   | $     | 1,362,219 
|                                                              |                                             |                            |         |                         |   |                        |   |                 |       |                   |   |                                               |   |       |           

See accompanying notes to condensed consolidated financial statements.

7

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CREDIT SUISSE FIRST BOSTON (USA), INC. AND SUBSIDIARIES        Condensed Consolidated Statements of Cash Flows        (Unaudited)        For the Three Months
Ended March 31, 2001 and 2000

|                                      |                                                                               | 2001                                                                                            |            | 2000    |           
|------------------------------------- | ----------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------- | ---------- | ------- | ----------
|
|Cash flows from operating activities: |                                                                               |                                                                                                 |            |         |           
|                                      | Net income                                                                    |                                                                                                 | $          | 303,095 |           
|                                      | Adjustments to reconcile net income to net cash used in operating activities: |                                                                                                 |            |         |           
|                                      |                                                                               | Depreciation and amortization                                                                   |            |         | 62,802    
|                                      |                                                                               | CSG Share Plan activity                                                                         |            |         | 273,423   
|                                      |                                                                               | Deferred taxes                                                                                  |            |         | (37,704   
|                                      |                                                                               | Decrease (increase) in unrealized appreciation of long-term corporate development investments   |            |         | 32,333    
|                                      |                                                                               | Foreign currency translation adjustment                                                         |            |         | 429       
|                                      |                                                                               | Cumulative effect of change in accounting principle                                             |            |         | (1,599    
|                                      | (Increase) decrease in operating assets:                                      |                                                                                                 |            |         |           
|                                      |                                                                               | Cash and securities segregated for regulatory purposes or deposited with clearing organizations |            |         | 522,994   
|                                      |                                                                               | Securities purchased under agreements to resell                                                 |            |         | (6,356,663
|                                      |                                                                               | Securities borrowed                                                                             |            |         | 5,560,018 
|                                      |                                                                               | Receivables from customers                                                                      |            |         | 3,770,138 
|                                      |                                                                               | Receivables from brokers, dealers and other                                                     |            |         | (2,742,298
|                                      |                                                                               | Financial instruments owned, at value                                                           |            |         | (35,355   
|                                      |                                                                               | Federal income taxes receivable                                                                 |            |         | 23,934    
|                                      |                                                                               | Net deferred tax asset                                                                          |            |         | 330,159   
|                                      |                                                                               | Other assets and deferred amounts                                                               |            |         | (247,966  
|                                      | Increase (decrease) in operating liabilities:                                 |                                                                                                 |            |         |           
|                                      |                                                                               | Securities sold under agreements to repurchase                                                  |            |         | 6,356,663 
|                                      |                                                                               | Securities loaned                                                                               |            |         | (3,709,011
|                                      |                                                                               | Payables to customers                                                                           |            |         | 249,002   
|                                      |                                                                               | Payables to brokers, dealers and other                                                          |            |         | (265,151  
|                                      |                                                                               | Financial instruments sold not yet purchased, at value                                          |            |         | (3,915,124
|                                      |                                                                               | Accounts payable and accrued expenses                                                           |            |         | (3,072,471
|                                      |                                                                               | Other liabilities                                                                               |            |         | (212,150  
|                                      |                                                                               |                                                                                                 |            |         |           
|Net cash used in operating activities |                                                                               | $                                                                                               | (3,110,502 | )       | $         
|                                      |                                                                               |                                                                                                 |            |         |           

See
accompanying notes to condensed consolidated financial statements.

8

---



CREDIT SUISSE FIRST BOSTON (USA), INC. AND SUBSIDIARIES        Condensed Consolidated Statements of Cash Flows        For the Three Months Ended March 31, 2001 and
2000

|                                                    |                                                                      | 2001                                                     |                                    | 2000   |          
|--------------------------------------------------- | -------------------------------------------------------------------- | -------------------------------------------------------- | ---------------------------------- | ------ | ---------
|
|Cash flows from investing activities:               |                                                                      |                                                          |                                    |        |          
|                                                    | Net proceeds from (payments for):                                    |                                                          |                                    |        |          
|                                                    |                                                                      | Capital contribution of CSFB Capital Holdings, Inc.      |                                    | $      | 34,519   
|                                                    |                                                                      | Purchases of long-term corporate development investments |                                    |        | (30,902  
|                                                    |                                                                      | Sales of long-term corporate development investments     |                                    |        | 54,623   
|                                                    |                                                                      | Office facilities                                        |                                    |        | 208,101  
|                                                    |                                                                      | Other assets                                             |                                    |        | (13,967  
|                                                    |                                                                      |                                                          |                                    |        |          
|Net cash provided by (used in) investing activities |                                                                      |                                                          | 252,374                            |        |          
|                                                    |                                                                      |                                                          |                                    |        |          
|Cash flows from financing activities:               |                                                                      |                                                          |                                    |        |          
|                                                    | Net proceeds from (payments for):                                    |                                                          |                                    |        |          
|                                                    |                                                                      | Short-term financings                                    |                                    |        | 4,655,546
|                                                    |                                                                      | Issuance (repayments) of:                                |                                    |        |          
|                                                    |                                                                      |                                                          | Senior notes                       |        |          
|                                                    |                                                                      |                                                          | Senior secured floating rate notes |        |          
|                                                    |                                                                      |                                                          | Global floating rate notes         |        |          
|                                                    |                                                                      |                                                          | Medium-term notes                  |        |          
|                                                    |                                                                      |                                                          | Structured notes                   |        |          
|                                                    |                                                                      |                                                          | Other long-term debt               |        |          
|                                                    | Cash dividends                                                       |                                                          |                                    | (5,289 | )        
|                                                    | Exercise of stock options                                            |                                                          |                                    |       |          
|                                                    |                                                                      |                                                          |                                    |        |          
|Net cash provided by financing activities           |                                                                      |                                                          | 3,975,135                          |        |          
|                                                    |                                                                      |                                                          |                                    |        |          
|Increase (decrease) in cash and cash equivalents    |                                                                      |                                                          | 1,117,007                          |        |          
|Cash and cash equivalents at beginning of period    |                                                                      |                                                          | 2,758,390                          |        |          
|                                                    |                                                                      |                                                          |                                    |        |          
|Cash and cash equivalents at end of period          |                                                                      | $                                                        | 3,875,397                          |        | $        
|                                                    |                                                                      |                                                          |                                    |        |          
|Supplemental schedule of Cash Flows Information:    |                                                                      |                                                          |                                    |        |          
|                                                    | Supplemental schedule of noncash investing and financing activities: |                                                          |                                    |        |          
|                                                    |                                                                      | Capital contribution of CSFB Capital Holdings, Inc.      |                                    |        |          
|                                                    |                                                                      |                                                          | Fair value of assets acquired      |        | $        
|                                                    |                                                                      |                                                          | Less: liabilities assumed          |        |          
|                                                    |                                                                      |                                                          |                                    |        |          
|                                                    |                                                                      | Capital contribution of CSFB Capital Holdings, Inc.      |                                    | $      | 34,519   
|                                                    |                                                                      |                                                          |                                    |        |          

See
accompanying notes to condensed consolidated financial statements.

9

---



CREDIT SUISSE FIRST BOSTON (USA), INC. AND SUBSIDIARIES        Notes to Condensed Consolidated Financial Statements        March 31, 2001

1.  Summary of Significant Accounting Policies

The
condensed consolidated financial statements include Credit Suisse First Boston (USA), Inc. and its subsidiaries (the "Company"). All significant intercompany balances and
transactions have been eliminated. The Company is a wholly owned subsidiary of Credit Suisse First Boston, Inc. ("CSFBI") and was acquired on November 3, 2000 (the "Acquisition"). No
adjustments of the historical carrying values of the Company's assets and liabilities to reflect the Acquisition by CSFBI were recorded in the Company's historical financial statements. Similarly,
although the Acquisition gave rise to goodwill, none of this goodwill was "pushed down" to the Company, and thus goodwill associated with the Acquisition will not affect the Company's results of
operations. In addition, in conjunction with the Acquisition, CSFBI transferred all of the outstanding shares of Credit Suisse First Boston Corporation ("CSFB Corp."), a U.S. registered broker dealer
that was a direct wholly owned subsidiary of CSFBI, to the Company in exchange for newly issued shares of the Company (the "Transfer"). For further discussion of the Acquisition and the Transfer, see
the Company's Annual Report on Form 10-K for the year ended December 31, 2000.

Certain
financial information that is normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of
America but is not required for interim reporting purposes has been condensed or omitted. These condensed consolidated financial statements reflect, in the opinion of management, all adjustments
(consisting of normal, recurring accruals), as well as the accounting change to adopt Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging
Activities", ("SFAS 133") which are necessary for a fair presentation of the condensed consolidated statements of financial condition and income for the interim periods presented. 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 as of and for the year ended December 31, 2000 included in the Company's Report on Form 10-K for the year ended December 31,
2000.

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

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

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

2.  Restructuring Costs and Merger Related-Costs

As
of March 31, 2001, all significant restructuring initiatives contemplated in the Acquisition have been completed.

During
the quarter ended March 31, 2001, restructuring costs of approximately $391 million were paid. The remaining balance of $84 million is included in accounts
payable and accrued expenses in the condensed consolidated statements of financial condition. All components of restructuring costs were

10

---

funded from working capital and do not require any incremental funding source. It is expected that the restructuring plan will be fully executed by December 2001.

Merger-related
costs represent the amortization of retention awards related to the merger over the life of the awards.

The
following is an analysis of the change in the restructuring accrual account for the quarter ended March 31, 2001:

Balance
December 31, 2000

Amounts
Paid in
2001

Balance
March 31,
2001(in millions)Compensation and benefits

$
325

$
251

$
74Occupancy and related costs


76


68


8Technology costs


74


72


2$
475

$
391

$
84


In
addition, included in other income is a gain of approximately $163 million on the assignment of the lease and related sale of leasehold improvements on the Company's former
headquarters. An incremental gain related to the lease assignment of $30.4 million has been deferred and is being amortized through February 2002.

3.  Issuance of
CSFBdirectCommon Stock

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

On
March 26, 2001, the Company announced that its parent, CSFBI, made a proposal to acquire for $4.00 per share the 18.4 million shares of
CSFBdirectCommon Stock owned by the public. The Special Committee of the Board of Directors of the Company has appointed financial advisors and legal
counsel to assist in its valuation.

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

11

---

4.  Related Party Transactions

In
the normal course of business, the Company enters into transactions with affiliated companies. Included in these transactions are revenues and expenses resulting from various
securities trading, investment banking and financing activities with certain affiliates, as well as fees for administrative services performed by the Company under the terms of a management fee
arrangement. Such fees are treated as a reduction of expenses in the condensed consolidated statements of income.

5.  Income Taxes

Income
taxes for interim period condensed consolidated financial statements have been accrued using the Company's estimated effective tax rate. Federal income taxes refunded (paid)
for the three months ended March 31, 2001 and 2000 were $183.2 million and $(97.7) million, respectively.

Management
has determined that the realization of the recognized net deferred tax asset of $1.5 billion at March 31, 2001 is more likely than not, based on anticipated
future taxable income. In addition, for federal income tax purposes, the Company has planning strategies available, which may enhance its ability to utilize these tax benefits. However, if estimates
of future taxable income are reduced, the amount of the deferred tax assets considered realizable could also be reduced. In addition, due to uncertainty concerning the Company's ability to generate
the necessary amount and mix of state and local taxable income in future periods, the Company continues to maintain a valuation allowance against its deferred state and local tax asset.

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

Effective
December 31, 2000, the Company adopted Statement of Financial Accounting Standard No. 140, "Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities" ("SFAS 140"), a replacement of SFAS No. 125, "Accounting for Transfers and Servicing of Financial
Assets and Extinguishments of Liabilities" ("SFAS 125"). As of March 31, 2001, the fair market value of assets that the Company has pledged to counterparties was $164.3 billion.
The Company has also received similar assets as collateral where we have the right to re-pledge or sell the assets. As of March 31, 2001, the fair market value of the assets
received was $158.2 billion. The Company routinely re-pledges or lends these assets to third parties.

Certain
provisions of SFAS 140 are required to be adopted for transactions occurring after March 31, 2001. The amended provisions generally relate to the criteria
determining whether the transferor has relinquished control of assets and therefore, determining if the transfer should be accounted for as a sale. Management has determined that the adoption of the
remaining provisions of SFAS 140 will not have a significant impact on the Company's earnings, liquidity or capital resources.

The
Company enters into various transactions whereby commercial and residential mortgages are sold to a qualifying trust or special purpose trusts and securitized. Beneficial
interests in those trusts are sold to investors. The investors and the securitization trusts have no recourse to the Company's assets for failure of debtors to pay when due. At March 31, 2001
the amount of beneficial interests retained by the Company are not significant. During the quarter ended March 31, 2001, the Company sold $2.1 billion in residential mortgages and
$881.7 million in commercial mortgage receivables in securitization transactions. Net gains recognized on these transactions were $4.6 million and $17.0 million, respectively, for
the quarter ended March 31, 2001.

12

---

7.  Borrowings

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

The
Company has two commercial paper programs totaling $7.0 billion, which are exempt from registration under the Securities Act of 1933. At March 31, 2001,
$1.3 billion of commercial paper was outstanding under these programs.

Long-term
borrowings:

March 31,
2001

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

$
2,622,692

$
2,544,454Medium-term notes 0.62%-7.60%, due various dates through 2016


3,120,560


3,873,511Global floating rate notes, due 2002


349,618


349,551Structured borrowings, 6.63%-7.41% due various dates through 2007


314,464


317,533Other


25,060


22,467Subtotal long-term borrowings

$
6,432,394

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


2,650,000


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


1,500,000


1,500,000Subtotal subordinated loan agreements with CSFBI


4,150,000


4,150,000Total long-term borrowings

$
10,582,394

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

$
1,174,162

$
1,485,217


The
subordinated loan agreements with CSFBI are at floating interest rates and are equivalent to those obtained by the parent for its subordinated borrowings. The weighted average
effective interest rate at March 31, 2001 for these borrowings was 6.26%. The fair value of these borrowings approximates the amounts reflected in the condensed consolidated statements of
financial condition.

In
November 2000 CSFBI obtained a $3.1 billion loan from the Company that had an original maturity date of November 1, 2001 and bore interest at a market rate
based on LIBOR. On April 25, 2001, CSFBI, in a series of transactions, repaid the $3.1 billion loan from the Company, plus accrued interest, and the Company's $4.15 billion
subordinated loan agreements referred to above with CSFBI were repaid by the Company in full, including accrued interest.

For
the quarters ended March 31, 2001 and 2000, interest paid on all borrowings and financing arrangements was $3.3 billion and $1.5 billion, respectively. At
March 31, 2001, the Company had entered into interest rate and currency swaps on $3.6 billion of its senior and medium-term notes.

13

---

At March 31, 2001 no borrowings were outstanding under the Company's $2.8 billion (as amended) credit facility with banks, of which $2.4 billion may be borrowed
on an unsecured basis.

8.  Long-term Corporate Development Investments

Long-term
corporate development investments represent the Company's involvement in private debt and equity investments. These investments generally have no readily
available market or may be otherwise restricted as to resale under the Securities Act of 1933 and are carried at estimated fair value. The cost of these investments was $1.0 billion at
March 31, 2001 and December 31, 2000, respectively. In the first quarters of 2001 and 2000, net unrealized appreciation of long-term corporate development investments
decreased $32.3 million and increased $51.2 million, respectively. Changes in net unrealized (depreciation) appreciation arising from changes in fair value or upon realization are
reflected in principal transactions-net, investment revenues in the condensed consolidated statements of income.

9.  Net Capital

The
Company's principal wholly owned subsidiaries, DLJSC and CSFB Corp., are registered broker-dealers, registered futures commission merchants and member firms of The New York Stock
Exchange, Inc. (the "NYSE"). As such, they are subject to NYSE's net capital rule, which conforms to the Uniform Net Capital Rule pursuant to Rule 15c3-1 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). Under the alternative method permitted by this rule, the required net capital may not be less than two percent of aggregate debit balances
arising from customer transactions or four percent of segregated funds, whichever is greater. If a member firm's capital is less than four percent of aggregate debit balances, the NYSE may require the
firm to reduce its business. If a member firm's net capital is less than five percent of aggregate debit balances, the NYSE may prevent the firm from expanding its business and declaring cash
dividends. At March 31, 2001, DLJSC's and CSFB Corp.'s net capital of approximately $1.7 billion and $2.13 billion, respectively, were 24.2 percent and 78.2 percent,
respectively, of aggregate debit balances and in excess of the minimum requirement by approximately $1.6 billion and $2.07 billion, respectively.

The
Company's London-based broker-dealer subsidiaries are subject to the requirements of the Securities and Futures Authority, a self-regulatory organization established
pursuant to the U.K. Financial Services Act of 1986. Other U.S. and foreign broker-dealer subsidiaries of the Company are subject to net capital requirements of their respective regulatory agencies.
At March 31, 2001, the
Company and its broker-dealer subsidiaries complied with all applicable regulatory capital adequacy requirements.

10.  Accounting for Derivative Instruments and Hedging Activities

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

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

14

---

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

The
Company enters into derivative transactions primarily for trading purposes, or to provide products for its clients. The Company also uses derivative instruments to manage
exposures to interest rate and foreign currency risks by modifying the characteristics of periodic interest payments and foreign currency exposure associated with some of its long-term
debt obligations. As of March 31, 2001, the Company only has fair value hedges of fixed rate debt for which derivatives hedge the fair value of the debt.

These
derivatives or other derivatives that do not qualify as hedges under the new rules are also carried at fair value with changes in value included in other revenues in the
condensed consolidated statements of income. For the three months ended March 31, 2001, the Company recognized an after-tax gain of $6.5 million for such
non-trading derivatives.

The
effectiveness of hedging relationships is evaluated using quantitative measures of correlation. If a hedge relationship is not found to be highly effective, it no longer qualifies
as a hedge and any excess gains or losses attributable to the hedged item, as well as subsequent changes in the fair value of the derivative, are recognized in other revenues. During the first quarter
of 2001 the amount of hedge ineffectiveness that was recognized in other revenues was $1.9 million, net of tax. There were no gains or losses on derivatives that were excluded from the
assessment of effectiveness during the first quarter of 2001.

The
cumulative effect of adopting SFAS 133 at January 1, 2001, representing the initial revaluation of derivatives and other items as described above, was an
after-tax gain of $0.6 million reported in the condensed consolidated statements of income separately as "cumulative effect of change in accounting principle" and an
after-tax loss of $1.6 million included in other comprehensive income. The Company estimates that $0.2 million of net derivative losses included in other comprehensive income
will be reclassified into other revenues within the next twelve months.

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

Options

The Company writes option contracts specifically designed to meet customers' needs. Most of the options do not expose the Company to credit risk since the
Company, not its counterparty, is obligated to perform. At the beginning of the contract period, the Company receives a cash premium. During the

15

---

contract period, the Company bears the risk of unfavorable changes in the value of the financial instruments underlying the options ("market risk"). To manage this market risk, the Company purchases
or sells cash or derivative financial instruments on a proprietary basis. Such purchases and sales may include debt and equity securities, forward and futures contracts and options. The counterparties
to these purchases and sales are reviewed to determine whether they are creditworthy. Future cash requirements for options written equal the fair value of the options.

The
Company also purchases options for trading purposes. With purchased options, the Company gets the right, for a fee, to buy or sell the underlying instrument at a fixed price on or
before a specified date. The underlying instruments for these options include mortgage-backed securities, equities, interest rates and foreign currencies. All options are reported at fair value.

Forwards and Futures

The Company enters into forward purchases and sales contracts for mortgage-backed securities and foreign currencies. In addition, the Company enters into
futures contracts on equity-based indices, foreign currencies and other financial instruments as well as options on futures contracts. Market risk is the price movement on the notional value of the
contracts.

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

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

Swaps

The Company's swap agreements consist primarily of interest rate and equity swaps. Interest rate swaps are contractual agreements to exchange interest rate
payments based on agreed notional amounts and maturity.

Equity
swaps are contractual agreements to receive the appreciation or depreciation in value based on a specific strike price on an equity instrument in exchange for paying another
rate, which is usually based on index or interest rate movements. Swaps are reported at fair value.

16

---

Quantitative Disclosures for All Trading Derivatives

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

2001

2000Assets

Liabilities

Assets

Liabilities(In millions)Options

$
963.6

$
1,773.9

$
1,143.0

$
2,122.7Forward contracts

$
693.7

$
680.4

$
727.4

$
719.2Futures contracts

$
34.5

$
80.3

$
180.0

$
15.5Swaps

$
282.4

$
213.8

$
943.7

$
868.1


These
amounts are included in receivables/payables from brokers, dealers and other, and financial instruments owned/sold not yet purchased in the condensed consolidated statements of
financial condition.

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

11.  Financial Instruments With Off-Balance Sheet Risk

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

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

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

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

17

---

12.  Stockholders' Equity

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

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

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

13.  Earnings Per Share

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

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

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

18

---

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

|                                                                    |               | March 31, 2001 |         | March 31, 2000
|------------------------------------------------------------------- | ------------- | -------------- | ------- | --------------
|
|
|CSFB (USA) Common Stock                                             |               |                |         |               
|Basic Earnings applicable to Common Shares                          |               | $              | 305,229 |               
|Effect of Dilutive Securities:                                      |               |                |         |               
|                                                                    | Stock options |                |         |              
|                                                                    |               |                |         |               
|Diluted Earnings applicable to Common Shares                        |               | $              | 305,229 |               
|                                                                    |               |                |         |               
|CSFBdirectCommon Stock                                              |               |                |         |               
|Basic Earnings (Loss) applicable to Common SharesBasic and Diluted |               | $              | (7,423  | )             
|Effect of Dilutive Securities:                                      |               |                |         |               
|                                                                    | Stock options |                |         |              
|                                                                    |               |                |         |               
|Diluted Earnings (Loss) applicable to Common Shares                 |               | $              | (7,423  | )             
|                                                                    |               |                |         |               

14.  Leases, Commitments and Contingent Liabilities

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

In
the normal course of business, the Company enters into underwriting commitments. Management of the Company believes that transactions relating to underwriting commitments that were
open at March 31, 2001 will have no material effect on the condensed consolidated financial statements. The Company has issued letters of credit for which it is contingently liable for
$0.9 billion and $1.0 billion at March 31, 2001 and December 31, 2000, respectively.

The
Company enters into commitments to extend credit to non-investment grade borrowers in connection with the origination and syndication of senior bank debt. At
March 31, 2001, unfunded senior bank loan commitments outstanding were $56.3 million.

At
March 31, 2001, the Company has commitments of approximately $1.7 billion to invest on a side-by-side basis with merchant banking
partnerships.

15.  Industry Segment and Geographic Data

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

Such
segments are managed separately based on types of products and services offered and their related client bases. The Company evaluates the performance of its segments based
primarily on income before income taxes.

In
conjunction with the Acquisition, the Company changed its method of allocation of underwriting revenues and related expenses to operating segments to conform to the CSFB
methodology.

19

---

Accordingly, segment data has been restated to conform to the current method of managing its business. The change in allocation did not have a material effect on the Company's consolidated results.

The
Company allocates to its segments a pro rata share of certain centrally managed costs such as leased facilities and equipment costs, employee benefits and certain general overhead
expenses based upon specified amounts, usage criteria or agreed rates, and allocates interest expense based upon the type of asset. The interest rates applied will also vary depending upon the type
and duration of the asset. The segment allocation of some costs, such as incentive bonuses, has been estimated. The Company has not allocated merger-related costs to its segments since none of these
costs represent normal operating costs. Instead, these costs are in the Elimination & Other category. All other accounting policies of the segments are the same as those described in the
summary of significant accounting policies.

|                                                                                          |  | Equity |        | IBD |   | FID   |   | Financial
Services |       | Elimination
& Other |   | Total
|----------------------------------------------------------------------------------------- |  | ------ | ------ | --- | - | ----- | - | ------------------ | ----- | ------------------- | - | -----
|
|March 31, 2001                                                                            |  |        |        |     |   |       |   |                    |       |                     |   |      
|Net revenues                                                                              |  | $      | 777.8  |     | $ | 521.7 |   | $                  | 507.6 |                     | $ | 367.2
|Net interest and dividend revenue                                                         |  |        | (102.8 | )   |   | (23.4 | ) |                    | 158.7 |                     |   | 84.0 
|Income (loss) before income taxes and cumulative effect of change in accounting principle |  | $      | 205.6  |     | $ | 14.4  |   | $                  | 279.1 |                     | $ | 2.7  
|March 31, 2000                                                                            |  |        |        |     |   |       |   |                    |       |                     |   |      
|Net revenues from external sources                                                        |  | $      | 434.9  |     | $ | 525.3 |   | $                  | 193.4 |                     | $ | 515.1
|Net intersegment revenues                                                                 |  |        | (1.9   | )   |   |      |   |                    | 0.1   |                     |   | 45.2 
|Net interest and dividend revenue                                                         |  |        | 5.7    |     |   | (7.2  | ) |                    | 48.1  |                     |   | 113.1
|Income (loss) before income taxes                                                         |  | $      | 82.8   |     | $ | 124.5 |   | $                  | 77.4  |                     | $ | 168.4

20

---

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

For the Quarter Ended
March 31,2001

2000Revenues:Total net revenues for reported segments

$
2,290.8

$
1,871.8All other revenues


155.1


14.9Consolidation/elimination(1)


65.4


(59.5
)Total consolidated net revenues

$
2,511.3

$
1,827.2Income before provision for income taxes:Total income for reported segments

$
501.8

$
453.1All other income (loss)


(108.0
)

68.2Consolidation/elimination(1)


65.4


(132.1
)Total income before provision for income taxes and cumulative effect of change in accounting principle

$
459.2

$
389.2


---

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

16.  Legal Proceedings

Certain
significant legal proceedings and matters have been previously disclosed in the Company's Annual Report on Form 10-K for the year ended December 31,
2000. The following is an update of such proceedings:

On
March 6, 2001, in the action filed by GSC Recovery, Inc. in New Jersey State Court arising out of alleged misrepresentations and omissions relating to GSC's purchases
of certain unsecured AmeriServe notes issued on or about October 1, 1999, the DLJ entities named as defendants moved to dismiss the complaint.

By
letter dated March 30, 2001, the Department of Justice advised DLJSC that it had concluded its investigation of DLJSC relating to alleged price fixing with respect to
underwriting spreads in initial public offerings and would take no action against DLJSC.

On
April 4, 2001, in the adversary proceeding filed in the bankruptcy court by holders of the secured notes issued by AmeriServe Food Distribution, Inc. ("Ameriserve"),
the court denied the motion to dismiss filed by DLJ Capital Funding and ordered plaintiffs to file an amended complaint setting forth with specificity their claims against DLJ Capital Funding. An
amended complaint was served and filed on May 1, 2001.

21

---

On April 6, 2001, in the action filed by Morgens Waterfall Holdings, LLC ("Morgens") in the U.S. District Court for the Southern District of New York arising out of Morgens'
purchases of the secured AmeriServe notes issued on or about October 1, 1999, the entities named as defendants answered the second amended complaint and asserted counterclaims against Morgens
seeking, among other things, compensatory damages for breach of contract. Morgens has answered the counterclaims and discovery has commenced.

On
April 19, 2001, the DLJ entities named as defendants moved to dismiss the amended consolidated complaint filed by plaintiffs in the consolidated action captioned In re Independent Energy Holdings PLC Securities Litigationpending in the U.S. District Court for the Southern District of New York.

On
or about March 30, 2001, the putative class actions initially filed in September 2000 in the Delaware Court of Chancery by the public shareholders of
CSFBdirectcommon stock were consolidated and captionedIn re CSFBdirect Tracking Stock Shareholders
Litigation. Plaintiffs simultaneously filed a second consolidated amended complaint asserting their original claims and adding claims that allege that the proposed offer by the
Company, announced on March 26, 2001, to purchase all the publicly owned common stock of CSFBdirectat a price of $4 per share is unfair.

Since
six putative class actions were filed on March 26, 2001 in the Delaware Chancery court alleging that the Company's proposed offer to acquire all of the publicly owned
CSFBdirectcommon stock for $4 per share is unfair, four additional putative class actions asserting virtually identical claims have been filed in that
court.

CSFB
Corp. as well as, to our knowledge, at least five other investment banks, are being investigated by one or more governmental authorities or self-regulatory
organizations, including the NASD Regulation, Inc. ("NASDR") in connection with their practices as to the allocation of shares in initial
public offerings in which such investment banks were a lead or co-managing underwriter, and subsequent securities transactions and commissions. The inquiries have focused on the allocation
practices with respect to initial public offerings in 1999 and 2000, and in particular, the receipt of allegedly excessive commissions on secondary trades from certain accounts that received
allocations of shares. CSFB Corp. has been cooperating with each of the investigating entities by providing documents and witnesses to be interviewed or deposed in response to subpoenas or otherwise.
These investigations could result in enforcement proceedings against CSFB Corp. by one or more of the investigating entities. In particular, the staff of the NASDR has notified CSFB Corp. that it is
contemplating bringing a proceeding against CSFB Corp. based on the initial public offering allocations and the commissions and alleged practices by certain customers that had received such
allocations.

Beginning
in January 2001, CSFB Corp. was named as a defendant in a large number of putative class action complaints filed in the U.S. District Court for the Southern District
of New York, alleging various violations of the federal securities laws resulting from alleged material omissions and misstatements in registration statements and prospectuses for the initial public
offerings and with respect to transactions in the aftermarket. These lawsuits contain allegations that the registration statement and prospectus either omitted or misrepresented material information
about commissions paid to CSFB Corp. and aftermarket transaction by certain customers that received allocations of shares in the initial public offerings.

Since
March 2001, CSFB Corp. and six other investment banks were named as defendants in several putative class actions filed with the U.S. District Courts for the Southern
District of New York

22

---

and the District of New Jersey, alleging violation of the federal antitrust laws in connection with alleged practices in the allocation of shares in initial public offerings in which such investment
banks were a lead or co-managing underwriter. The lawsuits allege that the underwriter defendants have engaged in an illegal antitrust conspiracy to require customers, in exchange for
initial public offering allocations, to pay undisclosed and excessive commissions, in amounts equaling approximately 33% of the customers' profits from a given initial public offering allocation. The
complaint also alleges that the underwriter defendants conspired to require customers, in exchange for initial public offering allocations, to agree to make after market purchases of the initial
public offering securities at a price
higher than the offering price, as a precondition to receiving an allocation. These alleged "tie-in" arrangements are further alleged to have artificially inflated the market price for the
securities.

CSFB
Corp. intends to defend itself vigorously against all of the claims asserted in these complaints.

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.

23

---



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

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

We
have made in this Quarterly Report on Form 10-Q, and from time to time may otherwise make in our public filings, press releases and discussions with our
management, "forward-looking statements", within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, concerning our operations, economic performance and
financial condition, as well as our strategic objectives, including, without limitation, global expansion. These forward-looking statements are not historical facts but instead represent only our
belief regarding future events, many of which, by their nature, are inherently uncertain and beyond our control. Such forward-looking statements are subject to various risks and uncertainties, and we
claim the protection afforded by the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Actual results could differ materially from those
currently anticipated because of a number of factors in addition to those discussed elsewhere herein and in our other public filings, press releases and discussions with our management, including:



BUSINESS ENVIRONMENT

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

24

---

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

Market
and economic conditions in the first quarter of 2001 were characterized by volatile domestic equity markets and high levels of equity trading volume. The economic slowdown in
the United States
led to market uncertainty, a decline in all of the major stock indices, and a decline in merger and acquisition activity and capital markets transactions in virtually all sectors. The technology heavy
NASDAQ had its worst first quarter ever. The new issue market has been severely impacted, especially in the technology area. In order to stimulate the economy, the Federal Reserve Board cut interest
rates by a half point three times during the first quarter of 2001 and made an additional half-point rate cut in April. Despite these rate decreases, the economy remains weak as consumer
demand continued to decline due in part to rising energy prices and tighter financial conditions.

RESULTS OF OPERATIONS

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

The
transfer of CSFB Corp. to us by CSFBI in November 2000 had a significant effect on our statement of financial condition and results of operations. As a result, inclusion of
results of CSFB Corp. for the first quarter of 2001 increased virtually all revenue, expense and statement of financial condition line items. Because of the inclusion of CSFB Corp. from
November 3, 2000 through December 31, 2000, our financial statements may not be fully comparable with prior periods. It is expected that due to the size of the Acquisition, the volume of
activity of the combined entity will, subject to market conditions, be significantly greater in future periods than for our previous activities. For more information on the transfer of CSFB Corp. to
us, we refer you to our Annual Report on Form 10-K for the year ended December 31, 2000.

We
refer you to our Footnote 2 to the condensed consolidated financial statements for a discussion of Restructuring and Merger-Related Costs.

Quarter Ended March 31, 2001 Compared to Quarter Ended March 31, 2000

For 2001, revenues increased $684.1 million, or 37.4% to $2.5 billion. During 2001, revenues increased primarily as a result of increases in
investment banking and advisory, trading gains and other. Included in other income is a pre-tax gain of approximately $163 million from the assignment of the lease and sale of
leasehold improvements of our former headquarters at 277 Park Avenue. These increases were offset in part by a decrease in interest income. In conjunction with the Acquisition, we changed our method
of allocation of underwriting revenues and related expenses to operating segments to conform to the CSFB methodology. Accordingly, segment data has been restated to conform to the current method of
managing our business. Equity Division net revenues increased $342.9 million or 78.8% to $777.8 million primarily as a result of increased trading revenues and the inclusion of CSFB
Corp. Investment Banking Division net revenues decreased $3.6 million or 0.7% to $521.7 million primarily due to the decline in underwritings and merger and acquisition fees offset by
the inclusion of CSFB Corp. Fixed Income Division net revenues increased $314.2 million or 162.5% to $507.6 million, principally as a result of increased trading gains in the
high-yield and government bond areas. Financial Services Division net revenues decreased $147.9 million or 28.7% to $367.2 million primarily as a result of decreased
commission revenues in our correspondent and online brokerage businesses, and the transfer of the asset management business to Credit Suisse Asset Management in November 2000. For more
information on segment data, we refer you to Note 15 to the condensed consolidated financial statements.

Principal
transactions-net, increased $297.0 million or 59.1% to $799.5 million primarily as a result of gains in the Fixed Income Division, particularly
high yield and government bonds due to the volatile

25

---

equity markets and decreases in interest rates. These increases were offset by losses on our private equity investments due to unfavorable market conditions.

Investment
banking and advisory revenues increased $271.1 million or 41.7% to $920.9 million as a result of the inclusion of CSFB Corp. revenues, particularly merger and
acquisition fees, and fees for a variety of portfolio advisory and technology services in our correspondent and online brokerage businesses. The transfer of the asset management business to Credit
Suisse Asset Management in November 2000 and the contraction in the U.S. new issue market partially offset these increases.

Commission
revenues increased $1.5 million to $449.1 million primarily as a result of the inclusion of CSFB Corp. which offset decreases in commissions in our online and
correspondent brokerage operations, CSFBdirectand Pershing, due to unfavorable market conditions.

Interest
and dividend income, net of interest expense, decreased $50.2 million or 24.7% to $152.9 million. The decrease was primarily attributable to increased equity
inventory positions due to the inclusion of CSFB Corp.

Other
income increased $164.7 million to $188.9 million primarily as a result of a pre-tax gain of approximately $163 million on the assignment of the
lease and sale of related leasehold improvements on the Company's former headquarters.

Total
costs and expenses for the three months ended March 31, 2001 increased approximately $614.1 million or 42.7% to $2.1 billion primarily due to the inclusion
of CSFB Corp.

Employee
compensation and benefits increased $263.4 million or 24.4% to $1.3 billion. The increase was primarily increased headcount due to the inclusion of CSFB Corp.
As is normal in our industry, a
significant portion of compensation expense is a bonus amount awarded at or shortly after year-end. Bonuses are based upon a number of factors including the profitability of each business
segment.

Occupancy
and equipment rental increased $69.5 million to $160.2 million primarily as a result of the inclusion of CSFB Corp. Communications expense increased by
$30.4 million to $72.6 million due to the inclusion of CSFB Corp. Brokerage, clearing, exchange fees and other expenses increased $26.6 million to $67.7 million due to the
inclusion of CSFB Corp. Professional fees increased $28.2 million to $76.6 million due to the inclusion of CSFB Corp. Merger and other related costs of $143.1 million reflect the
accrual of the retention awards related to the merger. All other operating expenses increased $52.7 million to $191.0 million, which resulted principally from rebranding costs related to
the CSFBdirectname change as well as the inclusion of CSFB Corp.

Equity
Division pre-tax income increased $122.8 million or 148.3% to $205.6 million due to the inclusion of CSFB Corp. Investment Banking Division
pre-tax income decreased $110.1 million or 88.4% to $14.4 million as a result of decreased underwritings and fees related to mergers and acquisitions activity. Fixed Income
Division pre-tax income increased $201.7 million or 260.6% to $279.1 million as a result of increased trading gains in high yield and government bonds. Financial Services
Division pre-tax income decreased $165.7 million or 98.4% to $2.7 million as a result of decreased commissions and underwritings related to its correspondent and online
brokerage businesses, rebranding costs related to the CSFBdirectname change and the transfer of the asset management business to Credit Suisse Asset
Management.

Our
income tax provision for 2001 and 2000 was $156.8 million and $144.0 million, a 34.1% and 37.0% effective tax rate, respectively.

Net
income for 2001 was $303.1 million as compared with net income of $245.2 million in 2000.

26

---

LIQUIDITY AND CAPITAL RESOURCES

Our assets are highly liquid with the majority consisting of securities inventories and collateralized receivables, each of which fluctuate depending on the
levels of proprietary trading and customer business. Such collateralized receivables consist primarily of resale agreements and securities borrowed both of which are secured by U.S. government and
agency securities, and marketable corporate debt and equity securities. In addition, we have significant receivables from customers, brokers and dealers that turn over frequently. To meet client needs
as a securities dealer, we may carry significant levels of trading inventories. Because of changes relating to customer needs, economic and market conditions and proprietary trading strategies, our
total assets or the individual components of total assets may vary
significantly from period to period. At March 31, 2001 and 2000, our total assets were $209.9 billion and $213.3 billion, respectively.

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

We
maintain a $2.8 billion revolving credit facility with various banks, of which $2.4 billion may be borrowed on an unsecured basis. There were no borrowings
outstanding under this agreement at March 31, 2001.

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

For
the quarters ended March 31, 2001 and 2000, interest paid on all borrowings and financing arrangements was $3.3 billion and $1.5 billion, respectively. At
March 31, 2001, we had entered into interest rate and currency swaps on $3.6 billion of its senior and medium-term notes.

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

At
March 31, 2001 the credit ratings of our long-term debt and commercial paper were as follows:

Long-Term Debt

Commercial PaperFitch

A+

F-1Moody's

A1

P-1Standard & Poor's

AA-

A-1+


As
registered broker-dealers and member firms of various self-regulatory organizations, each of our broker-dealer subsidiaries, which include DLJSC and CSFB Corp., is
subject to the uniform net capital rule, Rule 15c3-1 under the Securities Exchange Act of 1934. This rule specifies the minimum level of net capital a broker-dealer must maintain
and also requires that part of its assets be kept in relatively liquid form. DLJSC and CSFB Corp. are also subject to the net capital requirements of the Commodity Futures Trading Commission and
various commodity exchanges. At March 31, 2001, DLJSC and CSFB Corp. had aggregate regulatory net capital, after adjustments required by Rule 15c3-1 of

27

---

approximately $1.7 billion and $2.13 billion, respectively, which exceeded minimum net capital requirements by $1.6 billion and $2.07 billion, respectively. DLJSC exceeded
the net capital required by its most restrictive debt covenants by $1.2 billion.

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

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

At
March 31, 2001, our broker-dealer subsidiaries were in compliance with all applicable regulatory capital adequacy requirements.

Cash Flows

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

The
transfer of CSFB Corp. in November 2000 had a significant effect on our statement of financial condition and results of operations. As a result, inclusion of results of
CSFB Corp. for the first quarter of 2001 had a significant effect on our financial statements, increasing virtually all revenue, expense and statement of financial condition line items. It is expected
that due to the size of the Acquisition, the volume of activity of the combined entity will, subject to market conditions, be significantly greater in future periods than for our previous activities.

Quarters Ended March 31, 2001 and 2000

At March 31, 2001 and 2000, cash and cash equivalents totaled $3.9 billion and $1.4 billion, respectively, an increase of
$1.1 billion and a decrease of $0.7 billion, respectively, compared to December 31, 2000 and 1999.

Cash
used in operating activities totaled $3.1 billion and $4.2 billion in 2001 and 2000, respectively. In 2001, there were increases in assets including receivables
from brokers, dealers and others of $2.7 billion and decreases in liabilities, including securities loaned of $3.7 billion, financial instruments sold not yet purchased of
$3.9 billion and accounts payable and accrued expenses of $3.1 billion. These were offset by decreases in assets, including securities borrowed of $5.6 billion and receivables
from customers of $3.8 billion. In 2000, there were increases in assets including financial instruments owned of $4.4 billion, securities borrowed of $7.0 billion and receivables
from customers of $3.1 billion. These increases were partially offset by increases in liabilities including payables to customers of $1.1 billion, securities loaned of
$5.8 billion and financial instruments sold not yet purchased of $3.8 billion.

In
2001 and 2000, net cash provided by (used in) investing activities was $252.4 million and $(112.3) million, respectively. In the first quarter, the capital contribution of
CSFB Capital Holdings, Inc. to us increased our equity by $34.5 million. In addition, our sale of leasehold improvements at our former headquarters at 277 Park Avenue resulted in
cash from investing activities

28

---

of $208.1 million. The sale of the leasehold improvements and assignment of the lease resulted in a pre-tax gain of approximately $163 million.

In
2001 and 2000, net cash provided by financing activities totaled $4.0 billion and $3.7 billion, respectively, of which $4.7 billion and $2.6 billion was
provided by short-term financings (principally repurchase agreements), respectively. During 2001, $0.8 billion of medium-term notes matured. In 2000, $1.0 billion
was provided by the issuance of senior notes, medium-term notes and structured borrowings.

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

DERIVATIVE FINANCIAL INSTRUMENTS

The Company enters into various transactions involving derivatives. In general, derivatives are contractual agreements that derive their values from the
performance of underlying assets, interest or currency exchange rates, or a variety of indices. The Company enters into derivative transactions primarily for trading purposes, or to provide products
for its clients. These transactions involve options, forwards, futures and swaps. The Company also enters into interest rate and cross currency swaps to modify the characteristics of periodic interest
payments associated with some of its long-term debt obligations.

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

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

PRIVATE EQUITY ACTIVITIES

Our private equity activities include direct investments and investments in various partnerships, for which our subsidiaries act as general partner. These
instruments are primarily in unlisted or illiquid equity or equity-related securities. At March 31, 2001 and December 31, 2000 we had investments of $1.0 billion and
$0.8 billion, respectively and had commitments to invest up to an additional $1.7 billion and $1.6 billion, respectively.

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

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

We
record high-yield debt at market value, mortgage whole loans and senior bank debt at lower of cost or market value and foreign sovereign and other
non-investment-grade debt at market value or fair value. At March 31, 2001, we had long positions of high-yield debt, mortgage whole loans, and other
non-investment-grade debt of approximately $866 million, $7.1 billion, and $1.6 billion, respectively, and short positions of approximately $373.0 million,
$5.4 million, and $110.3 million, respectively. At December 31, 2000, we had long positions of high-yield debt, mortgage whole loans, senior bank and

29

---

foreign sovereign debt, and other non-investment-grade debt of approximately $1.1 billion, $6.9 billion, $929.4 million and $990.5 million, respectively, and
short positions of approximately $536.8 million, $1.0 million, $0.8 million and $238.1 million, respectively. Timing of the securitization of our mortgage whole loan
inventory will impact the size of our positions at any given time.

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

RISK MANAGEMENT AND VALUE AT RISK

For a description of our risk management policies and procedures and value-at-risk ("VAR") model, including such model's assumptions
and limitations, we refer you to the Management's Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year
ended December 31, 2000. Our trading portfolio VAR was approximately $155 million and $103 million at March 31, 2001 and December 31, 2000, respectively.

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

March 31,
2001

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

$
173.7

$
99.9Equity risk

$
13.4

$
32.1Foreign currency exchange risk

$
0.7

$
1.6Total

$
155.0

$
102.7


We
have equity risk on our non-trading financial instruments portfolio, which is mainly comprised of our private equity investments. We measure this equity risk using a
sensitivity analysis that estimates the potential decline in the recorded value of the investments resulting from a 10% decline in equity markets. Different assumptions could produce materially
different estimates of market risk as described in the Company's Annual Report on Form 10-K for the year ended December 31, 2000. Our equity risk on the
non-trading portfolio was approximately $73 million and $97 million at March 31, 2001 and December 31, 2000, respectively. These non-trading market
risk estimates measure the potential decline in the recorded value of the private equity investments. Actual losses would be mitigated by any unrealized gains not reflected in the recorded value of
these investments.

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

On February 20, 2001 CSFBI, our sole voting stockholder, consented to the appointment of Carol Einiger to the Board of Directors.

30

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PART II OTHER INFORMATION

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

Certain significant legal proceedings and matters have been previously disclosed in the Company's Annual Report on Form 10-K for the year
ended December 31, 2000. The following is an update of such proceedings:

On
March 6, 2001, in the action filed by GSC Recovery, Inc. in New Jersey State Court arising out of alleged misrepresentations and omissions relating to GSC's purchases
of certain unsecured AmeriServe notes issued on or about October 1, 1999, the DLJ entities named as defendants moved to dismiss the complaint.

By
letter dated March 30, 2001, the Department of Justice advised DLJSC that it had concluded its investigation of DLJSC relating to alleged price fixing with respect to
underwriting spreads in initial public offerings and would take no action against DLJSC.

On
April 4, 2001, in the adversary proceeding filed in the bankruptcy court by holders of the secured notes issued by AmeriServe Food Distribution, Inc. ("Ameriserve"),
the court denied the motion to dismiss filed by DLJ Capital Funding and ordered plaintiffs to file an amended complaint setting forth with specificity their claims against DLJ Capital Funding. An
amended complaint was served and filed on May 1, 2001.

On
April 6, 2001, in the action filed by Morgens Waterfall Holdings, LLC ("Morgens") in the U.S. District Court for the Southern District of New York arising out of Morgens'
purchases of the secured AmeriServe notes issued on or about October 1, 1999, the entities named as defendants answered the second amended complaint and asserted counterclaims against Morgens
seeking, among other things, compensatory damages for breach of contract. Morgens has answered the counterclaims and discovery has commenced.

On
April 19, 2001, the DLJ entities named as defendants moved to dismiss the amended consolidated complaint filed by plaintiffs in the consolidated action captioned In re
Independent Energy Holdings PLC Securities Litigation pending in the U.S. District Court for the Southern District of New York.

On
or about March 30, 2001, the putative class actions initially filed in September 2000 in the Delaware Court of Chancery by the public shareholders of
CSFBdirectcommon stock were consolidated and captionedIn re CSFBdirect Tracking Stock Shareholders
Litigation. Plaintiffs simultaneously filed a second consolidated amended complaint asserting their original claims and adding claims that allege that the proposed offer by the
Company, announced on March 26, 2001, to purchase all the publicly owned common stock of CSFBdirectat a price of $4 per share is unfair.

Since
six putative class actions were filed on March 26, 2001 in the Delaware Chancery court alleging that the Company's proposed offer to acquire all of the publicly owned
CSFBdirectcommon stock for $4 per share is unfair, four additional putative class actions asserting virtually identical claims have been filed in that
court.

CSFB
Corp. as well as, to our knowledge, at least five other investment banks, are being investigated by one or more governmental authorities or self-regulatory
organizations, including the NASD Regulation, Inc. ("NASDR") in connection with their practices as to the allocation of shares in initial public offerings in which such investment banks were a
lead or co-managing underwriter, and subsequent securities transactions and commissions. The inquiries have focused on the allocation practices with respect to initial public offerings in
1999 and 2000, and in particular, the receipt of allegedly excessive commissions on secondary trades from certain accounts that received allocations of shares. CSFB Corp. has been cooperating with
each of the investigating entities by providing documents and witnesses to be interviewed or deposed in response to subpoenas or otherwise. These

31

---

investigations could result in enforcement proceedings against CSFB Corp. by one or more of the investigating entities. In particular, the staff of the NASDR has notified CSFB Corp. that it is
contemplating bringing a proceeding against CSFB Corp. based on the initial public offering allocations and the commissions and alleged practices by certain customers that had received such
allocations.

Beginning
in January 2001, CSFB Corp. was named as a defendant in a large number of putative class action complaints filed in the U.S. District Courts for the Southern District
of new York and the District of New Jersey, alleging various violations of the federal securities laws resulting from alleged material omissions and misstatements in registration statements and
prospectuses for the initial public offerings and with respect to transactions in the aftermarket. These lawsuits contain allegations that the registration statement and prospectus either omitted or
misrepresented material information about commissions paid to CSFB Corp. and aftermarket transaction by certain customers that received allocations of shares in the initial public offerings.

Since
March 2001, CSFB Corp. and six other investment banks were named as defendants in several putative class actions filed with the U.S. District Court for the Southern
District of New York, alleging violation of the federal antitrust laws in connection with alleged practices in the allocation of shares in initial public offerings in which such investment banks were
a lead or co-managing underwriter. The lawsuits allege that the underwriter defendants have engaged in an illegal antitrust conspiracy to require customers, in exchange for initial public
offering allocations, to pay undisclosed and excessive commissions, in amounts equaling approximately 33% of the customers' profits from a given initial public offering allocation. The complaint also
alleges that the underwriter defendants conspired to require customers, in exchange for initial public offering allocations, to agree to make after market purchases of the initial public offering
securities at a price higher than the offering price, as a precondition to receiving an allocation. These alleged "tie-in" arrangements are further alleged to have artificially inflated
the market price for the securities.

CSFB
Corp. intends to defend itself vigorously against all of the claims asserted in these complaints.

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.

32

---



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

|                                                                                                             |                                                               | March 31,
2001 |         | December 31,
2000
|------------------------------------------------------------------------------------------------------------ | ------------------------------------------------------------- | -------------- | ------- | -----------------
|ASSETS                                                                                                       |                                                               |                |         |                  
|Cash and cash equivalents                                                                                    |                                                               | $              | 129,683 |                  
|Short-term investments                                                                                       |                                                               |                | 17,439  |                  
|Deposit with affiliated clearing broker                                                                      |                                                               |                | 447     |                  
|Receivables from brokers, dealers and others, net                                                            |                                                               |                | 32,784  |                  
|Financial instruments owned, at market value                                                                 |                                                               |                | 38      |                  
|Office facilities, at cost (net of accumulated depreciation and amortization of $848 and $753, respectively) |                                                               |                | 6,358   |                  
|Investment in and advances to joint ventures                                                                 |                                                               |                | 64,780  |                  
|Long-term corporate development investments                                                                  |                                                               |                | 5,522   |                  
|Income taxes receivable                                                                                      |                                                               |                | 20,800  |                  
|Other assets                                                                                                 |                                                               |                | 10,540  |                  
|                                                                                                             |                                                               |                |         |                  
|Total Assets                                                                                                 |                                                               | $              | 288,391 |                  
|                                                                                                             |                                                               |                |         |                  
|LIABILITIES AND ALLOCATED EQUITY                                                                             |                                                               |                |         |                  
|Liabilities:                                                                                                 |                                                               |                |         |                  
|                                                                                                             | Payables to parent and affiliates, net                        |                | $       | 42,733           
|                                                                                                             | Financial instruments sold not yet purchased, at market value |                |         | 60               
|                                                                                                             | Accounts payable, accrued expenses and other liabilities      |                |         | 35,901           
|                                                                                                             |                                                               |                |         |                  
|Total liabilities                                                                                            |                                                               |                | 78,694  |                  
|                                                                                                             |                                                               |                |         |                  
|Commitments and contingencies                                                                                |                                                               |                |         |                  
|Allocated equity                                                                                             |                                                               |                | 210,210 |                  
|Accumulated other comprehensive income                                                                       |                                                               |                | (513    | )                
|                                                                                                             |                                                               |                |         |                  
|Total allocated equity                                                                                       |                                                               |                | 209,697 |                  
|                                                                                                             |                                                               |                |         |                  
|Total Liabilities and Allocated Equity                                                                       |                                                               | $              | 288,391 |                  
|                                                                                                             |                                                               |                |         |                  

See
accompanying notes to condensed combined financial statements.

33

---

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

|                                                                                            |                                                                  | Three Months Ended March 31, |                         
|------------------------------------------------------------------------------------------- | ---------------------------------------------------------------- | ---------------------------- | ------------------------
|
|Revenues:                                                                                   |                                                                  |                              |                         
|                                                                                            | Commissions                                                      |                              | $                       
|                                                                                            | Underwritings                                                    |                              |                         
|                                                                                            | Fees                                                             |                              |                         
|                                                                                            | Interest, net of interest expense of $745 and $515, respectively |                              |                         
|                                                                                            |                                                                  |                              |                         
|                                                                                            |                                                                  |                              | Total revenues          
|                                                                                            |                                                                  |                              |                         
|Costs and expenses:                                                                         |                                                                  |                              |                         
|                                                                                            | Compensation and benefits                                        |                              |                         
|                                                                                            | Brokerage, clearing, exchange and other fees                     |                              |                         
|                                                                                            | Advertising                                                      |                              |                         
|                                                                                            | Occupancy and related costs                                      |                              |                         
|                                                                                            | Communications and technology                                    |                              |                         
|                                                                                            | Rebranding costs                                                 |                              |                         
|                                                                                            | Restructuring costs                                              |                              |                         
|                                                                                            | Other operating expenses                                         |                              |                         
|                                                                                            |                                                                  |                              |                         
|                                                                                            |                                                                  |                              | Total costs and expenses
|                                                                                            |                                                                  |                              |                         
|Income (loss) before income tax provision (benefit) and equity in net loss of joint venture |                                                                  |                              | (62,614                 
|                                                                                            |                                                                  |                              |                         
|Income tax provision (benefit)                                                              |                                                                  |                              | (24,811                 
|Equity in net loss of joint ventures                                                        |                                                                  |                              | (3,719                  
|                                                                                            |                                                                  |                              |                         
|Net income (loss)                                                                           |                                                                  | $                            | (41,522                 
|                                                                                            |                                                                  |                              |                         
|Earnings (loss) per share:                                                                  |                                                                  |                              |                         
|                                                                                            | Basic                                                            |                              | $                       
|                                                                                            | Diluted                                                          |                              | $                       
|                                                                                            |                                                                  |                              |                         
|Weighted average notional and outstanding shares:                                           |                                                                  |                              |                         
|                                                                                            | Basic                                                            |                              |                         
|                                                                                            | Diluted                                                          |                              |                         
|                                                                                            |                                                                  |                              |                         
|Earnings (loss) attributable to:                                                            |                                                                  |                              |                         
|                                                                                            | CSFB (USA) Retained Interest                                     |                              | $                       
|                                                                                            | CSFBdirectCommon Stock                                           |                              | $                       
|                                                                                            |                                                                  |                              |                         
|CSFBdirectCommon Stock earnings (loss) per share:                                           |                                                                  |                              |                         
|                                                                                            | Basic                                                            |                              | $                       
|                                                                                            | Diluted                                                          |                              | $                       
|                                                                                            |                                                                  |                              |                         
|CSFBdirectCommon Stock weighted average common shares:                                      |                                                                  |                              |                         
|                                                                                            | Basic                                                            |                              |                         
|                                                                                            | Diluted                                                          |                              |                         
|                                                                                            |                                                                  |                              |                         

See
accompanying notes to condensed combined financial statements.

34

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

|                                                |                            | Allocated Equity |         | Accumulated Other
Comprehensive Income |   | Total
Allocated Equity |  
|----------------------------------------------- | -------------------------- | ---------------- | ------- | -------------------------------------- | - | ---------------------- | -
|Balances at December 31, 1999                   |                            | $                | 230,662 |                                        | $ | 1,130                  |  
|Net loss                                        |                            |                  | (7,930  | )                                      |   |                       |  
|Translation adjustmentnet of taxes (USA), Inc. |                            |                  |        |                                        |   | (572                   | )
|                                                | Total comprehensive income |                  |         |                                       |   |                        |  
|                                                |                            |                  |         |                                        |   |                        |  
|Balances at December 31, 2000                   |                            |                  | 222,732 |                                        |   | 558                    |  
|Net loss                                        |                            |                  | (41,522 | )                                      |   |                       |  
|Translation adjustmentnet of taxes (USA), Inc. |                            |                  |        |                                        |   | (1,071                 | )
|                                                | Total comprehensive income |                  |         |                                       |   |                        | 
|Capital contribution                            |                            |                  | 29,000  |                                        |   |                       |  
|                                                |                            |                  |         |                                        |   |                        |  
|Balances at March 31, 2001                      |                            | $                | 210,210 |                                        | $ | (513                   | )
|                                                |                            |                  |         |                                        |   |                        |  

See
accompanying notes to condensed combined financial statements.

35

---

CSFBdirect(a combination of certain assets and liabilities as described in note 1)        Condensed
Combined Statements of Cash Flows        (In thousands)        For the Three Months Ended March 31, 2001 and 2000

|                                                                                                   |                                                                | 2001 |         | 2000    |  
|-------------------------------------------------------------------------------------------------- | -------------------------------------------------------------- | ---- | ------- | ------- | -
|Cash flows from operating activities:                                                              |                                                                |      |         |         |  
|                                                                                                   | Net income (loss)                                              |      | $       | (41,522 | )
|Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |                                                                |      |         |         |  
|                                                                                                   | Depreciation and amortization                                  |      |         | 325     |  
|                                                                                                   | Deferred taxes                                                 |      |         | 2,224   |  
|                                                                                                   | Equity in net loss of joint venture                            |      |         | 3,719   |  
|(Increase) decrease in operating assets:                                                           |                                                                |      |         |         |  
|                                                                                                   | Deposit with affiliated clearing broker                        |      |         |        |  
|                                                                                                   | Receivables from brokers, dealers and other, net               |      |         | (4,369  | )
|                                                                                                   | Financial instruments owned, at market value                   |      |         | 340     |  
|                                                                                                   | Income taxes receivable                                        |      |         | (20,800 | )
|                                                                                                   | Other assets                                                   |      |         | (6,965  | )
|Increase (decrease) in operating liabilities:                                                      |                                                                |      |         |         |  
|                                                                                                   | Payables to parent and affiliates, net                         |      |         | 14,739  |  
|                                                                                                   | Financial instruments sold, not yet purchased, at market value |      |         | (55     | )
|                                                                                                   | Accounts payable, accrued expenses and other liabilites        |      |         | 9,179   |  
|                                                                                                   |                                                                |      |         |         |  
|                                                                                                   | Net cash provided by (used in) operating activities            |      |         | (43,185 | )
|                                                                                                   |                                                                |      |         |         |  
|Cash flows from investing activities:                                                              |                                                                |      |         |         |  
|Net proceeds from (payments for):                                                                  |                                                                |      |         |         |  
|                                                                                                   | Purchase of long-term corporate development investments        |      |         |        |  
|                                                                                                   | Purchase of office facilities                                  |      |         | (5,856  | )
|                                                                                                   | Investment in and advances to joint ventures                   |      |         | (21,555 | )
|                                                                                                   | Short-term investments                                         |      |         | 29,719  |  
|                                                                                                   |                                                                |      |         |         |  
|Net cash provided by (used in) investing activities                                                |                                                                |      | 2,308   |         |  
|                                                                                                   |                                                                |      |         |         |  
|Cash flows from financing activities:                                                              |                                                                |      |         |         |  
|Net proceeds from:                                                                                 |                                                                |      |         |         |  
|                                                                                                   | Capital contribution                                           |      |         | 29,000  |  
|                                                                                                   |                                                                |      |         |         |  
|Net cash provided by financing activities                                                          |                                                                |      | 29,000  |         |  
|                                                                                                   |                                                                |      |         |         |  
|Increase (decrease) in cash and cash equivalents                                                   |                                                                |      | (11,877 | )       |  
|Cash and cash equivalents at beginning of period                                                   |                                                                |      | 141,560 |         |  
|                                                                                                   |                                                                |      |         |         |  
|Cash and cash equivalents at end of period                                                         |                                                                | $    | 129,683 |         | $
|                                                                                                   |                                                                |      |         |         |  

See
accompanying notes to condensed combined financial statements.

36

---



CSFBdirect(a combination of certain assets and liabilities as described in note 1)        Notes to
Condensed Combined Financial Statements        March 31, 2001

1.  Basis of Presentation

CSFBdirectrepresents a combination of the assets and liabilities of the online discount brokerage and related investment services
business of Credit Suisse First Boston (USA), Inc. ("CSFB (USA), Inc."), rather than a separately incorporated entity. CSFB (USA), Inc. became an indirect wholly owned subsidiary
of Credit Suisse Group ("CSG"), a corporation organized under the laws of Switzerland, as a result of an acquisition, which was completed on November 3, 2000 (the "Acquisition"). The
Acquisition did not have an effect on the outstanding shares of CSFBdirecttracking stock. Costs incurred as a result of the name change are included in
rebranding costs in the condensed combined statements of
operations. On March 26, 2001, CSFB (USA), Inc. announced that its parent, Credit Suisse First Boston, Inc., proposed to acquire for $4.00 per share the 18.4 million shares
of CSFBdirectCommon Stock owned by the public. The Special Committee of the Board of Directors of CSFB (USA), Inc. has appointed financial
advisors and legal counsel to assist in its valuation.

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

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

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

Certain
financial information that is normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of
America but is not required for interim reporting purposes has been condensed or omitted. These condensed combined financial statements reflect, in the opinion of management, all adjustments
(consisting of normal,

37

---

recurring accruals) necessary for a fair presentation of the condensed combined financial position and results of operations for the interim periods presented. The results of operations for interim
periods are not necessarily indicative of results for the entire year. These financial statements should be read in conjunction with the combined financial statements and notes thereto as of and for
the year ended December 31, 2000 included in CSFB (USA), Inc.'s Annual Report on Form 10-K for the year ended December 31, 2000.

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

2.  Restructuring Costs

Restructuring
costs of $9.0 million incurred in March, 2001 as a result of the closing of CSFBdirect's Parsippany, New Jersey
office and the elimination of positions in other sites, are included in the accompanying condensed combined statements of operations as follows:

(in thousands)Compensation and benefits

$
2,400Occupancy and related costs


4,266Communications and technology


2,121Other


200Total restructuring costs

$
8,987


3.  Related Party Transactions

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

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

CSFBdirectreceived two notes receivable from DLJdirectSFG Securities Inc., a
50% owned joint venture in Japan, in the amounts of $17.5 million and $24.4 million. The notes bear interest at 1.38% and 3.16%, and mature on June 29, 2001 and March 21,
2007, respectively. These notes are included in investment in and advances to joint ventures in the condensed combined statements of financial condition.

4.  Net Capital

CSFBdirectincludes CSFBdirectInc., a registered broker-dealer and a member of
the National Association of Securities Dealers, Inc. ("NASD"). CSFBdirectInc. is subject to the minimum net capital requirements of the
Securities and Exchange Commission and the NASD. As such, it is subject to the NASD's net capital rule, which conforms to the Uniform Net Capital Rule pursuant to

38

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Rule 15c3-1 under the Securities Exchange Act of 1934. As a broker-dealer who does not carry customer accounts, under the alternative method permitted by this rule, the required net
capital, as defined, shall not be less than $250,000. At March 31, 2001, CSFBdirectInc.'s net capital of $26.9 million was in
excess of the minimum requirement by $26.6 million.

CSFBdirect's London-based broker-dealer affiliate, CSFBdirectLtd., is subject
to the requirements of the Securities and Futures Authority, a self-regulatory organization established pursuant to the U.K. Financial Services Act of 1986. At March 31, 2001,
CSFBdirectcomplied with all applicable regulatory capital adequacy requirements.

5.  Income Taxes

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

6.  Earnings Per Share

Earnings
(loss) per share amounts have been calculated by dividing net income (loss) by the weighted average notional and outstanding shares of Tracking Stock. The notional shares
represent CSFB (USA)'s 82.1% retained interest in CSFBdirect. Prior to the offering, CSFB (USA) had a 100% interest in the earnings of
CSFBdirect. As a result of the $29.0 million capital contribution on March 29, 2001, CSFB (USA)'s retained interest increased to 83.1%,
represented by 90.8 million notional shares.

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

39

---

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

|                                            |               | Three Months Ended
|------------------------------------------- | ------------- | ------------------
|
|
|
|Basic EPS:                                  |               |                   
|Earnings (loss) applicable to common shares |               | $                 
|                                            |               |                   
|Effect of dilutive securities:              |               |                   
|                                            | Stock options |                   
|                                            |               |                   
|Diluted EPS                                 |               | $                 
|                                            |               |                   
|CSFBdirectCommon Stock                      |               |                   
|Basic EPS:                                  |               |                   
|Earnings (loss) applicable to common shares |               | $                 
|                                            |               |                   
|Effect of dilutive securities:              |               |                   
|                                            | Stock options |                   
|                                            |               |                   
|Diluted EPS                                 |               | $                 
|                                            |               |                   

---

7.  Commitments and Contingent Liabilities

CSFBdirectHoldings Inc. has issued a $5.0 million letter of credit guaranteeing obligations of Hutchison
CSFBdirectLimited, a 50% owned joint venture in Hong Kong. As of March 31, 2001, there was no balance outstanding.

CSFBdirectHoldings Inc. has guaranteed a $13.0 million five-year credit facility issued to an affiliate. As
of March 31, 2001, $5.6 million was outstanding under this agreement, and is included in accounts payable, accrued expenses and other liabilities in the condensed combined statements of
financial condition.

8.  Legal Proceedings

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

For
a more detailed description of litigation involving CSFBdirect, we refer you to CSFB (USA)'s Footnote 16.

9.  Subsequent Event

CSFBdirectexpects to incur a charge of approximately $7.0 million in the second quarter of 2001 in connection with the sublease
of space in Jersey City, New Jersey.

40

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

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

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

BUSINESS ENVIRONMENT

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

RECENT DEVELOPMENTS

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

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

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

On
March 26, 2001, CSFB (USA) announced that its affiliate, Credit Suisse First Boston, Inc., proposed to acquire for $4.00 per share the 18,400,000 shares of
CSFBdirectCommon Stock owned by the public. The Special Committee of the Board of Directors of CSFB (USA), Inc. has appointed financial advisors
and legal counsel to assist in its valuation.

CSFBdirectexpects to incur a charge of approximately $7.0 million in the second quarter of 2001 in connection with the sublease
of space in Jersey City, New Jersey.

41

---

RESULTS OF OPERATIONS

Quarter Ended March 31, 2001 Compared to Quarter Ended March 31, 2000

CSFBdirect's total net revenues decreased $42.8 million or 37.5% to $71.4 million. This decrease
was due primarily to a decline in commissions.

Commission
revenues decreased $41.0 million or 55.0% to $33.5 million. The decrease was due primarily to significant decreases in customer trading volume. Average trades
per day decreased 53.7% to 21,100 for the quarter ended March 31, 2001 from 45,600 for the quarter ended March 31, 2000. Commission revenues represented 46.9% and 65.2% of total net
revenues for the quarters ended March 31, 2001 and 2000, respectively.

Underwriting
revenues decreased $2.9 million or 93.5% to $0.2 million. This decrease was due primarily to the slowdown in underwriting activity as well as a decline in
market activity.

Fee
revenues increased $3.4 million or 18.2% to $22.1 million. Fees for technology development increased $6.2 million or 73.8% to $14.6 million, primarily
due to increased demand for Internet-based technology applications. Payments for routing orders decreased $3.9 million or 57.4% to $2.9 million, due primarily to significant decreases in
customer trading volume, as well as by a decline in the amount of revenue per trade that CSFBdirectreceives for routing orders. Revenue from money
market fund distribution fees increased $1.1 million or 47.8% to $3.4 million due to an increase in customer money market fund balances of $619.3 million or 34.7% to
$2.4 billion. Fee revenues represented 31.0% and 16.4% of total net revenues for the quarters ended March 31, 2001 and 2000, respectively.

Interest,
net of interest expense, decreased $2.3 million or 12.8% to $15.6 million. This decrease was due primarily to decreases in margin debits, free credits and
short sale balances. Margin debits decreased $869.1 million or 43.8% to $1.1 billion. Free credits decreased $176.5 million or 21.1% to $660.2 million and short sale
balances decreased $50.2 million or 43.6% to $65.0 million. Interest, net of interest expense, represented 22.0% and 15.7% of total net revenues for the quarters ended March 31,
2001 and 2000, respectively.

Total
costs and expenses increased $45.3 million or 51.1% to $134.0 million.

Compensation
and benefits increased $9.7 million or 35.7% to $36.9 million. This increase was due primarily to growth in the number of employees from 1,040 to 1,714,
prior to the reorganization. These additional employees were added primarily in CSFBdirect's investor services area to accommodate increased customer
activity in 2000 and in CSFBdirect's technology group both in the United States and in India to develop new products.

Brokerage,
clearing, exchange and other fees decreased $8.4 million or 45.2% to $10.2 million primarily due to significant decreases in customer trading volume and lower
clearing fees per trade resulting from reduced clearing rates.

Advertising
costs decreased $6.9 million or 38.1% to $11.2 million due primarily to the decision to reduce advertising expenditures because market activity and account
openings decreased significantly.

Occupancy
and related costs increased $5.3 million or 220.8% to $7.7 million due primarily to the opening of two investor services facilities, one in Charlotte, North
Carolina and the other in Sandy City, Utah, new technology centers in East Brunswick, New Jersey and Chennai, India, and the expansion of CSFBdirect's
headquarters.

Communications
and technology costs increased $1.0 million or 9.9% to $11.1 million due primarily to improvements in and expansion of technology infrastructure and
increases in facilities and staff.

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Rebranding costs of $34.5 million were incurred because of the name change from DLJdirectto
CSFBdirectas a result of the Acquisition.

Restructuring
costs of $9.0 million were incurred as a result of the closing of the Parsipanny, New Jersey call center and the elimination of positions in other sites.

Other
operating expenses increased $1.1 million or 8.9% to $13.5 million. Operating expenses are comprised of professional fees, printing and stationery, economic and
investment research, allocated overhead and miscellaneous expenses. Professional fees increased $3.0 million or 75.0% to $7.0 million primarily due to program monitoring and
international operations. Miscellaneous expenses decreased $2.7 million or 52.0% to $2.5 million, consisting primarily of travel and entertainment, information services, customer service
related expenses, employee registration fees and expenses for new account credit checks.

Income
(loss) before income tax provision (benefit) and equity in net loss of joint ventures decreased $88.1 million to a loss of $62.6 for the quarter ended March 31,
2001. The provision (benefit) for income taxes for the quarters ended March 31, 2001 and 2000 was $(24.8) million and $10.7 million, representing a 39.6% and 42.0% effective tax rate,
respectively.

CSFBdirecthas a 50% interest in foreign-based joint ventures in Japan, Hong Kong and the Middle East. For the quarters ended
March 31, 2001 and 2000, CSFBdirect's share of the equity in the net loss of these joint ventures was $3.7 million and
$1.2 million, respectively.

CSFBdirectreported a net loss of $41.5 million for the quarter ended March 31, 2001 as compared with net income of
$13.6 million for the quarter ended March 31, 2000. For the quarter ended March 31, 2001, net loss applicable to the shareholders of
CSFBdirectCommon Stock was $7.4 million or $0.40 per share.

LIQUIDITY AND CAPITAL RESOURCES

The principal sources of liquidity for CSFBdirect's operations are allocated capital and leases of fixed assets
through an affiliate. The value of equipment acquired through leases of fixed assets through an affiliate totaled $17.7 million for the quarter ended March 31, 2001 and
$10.6 million for the quarter ended March 31, 2000. These fixed assets were comprised primarily of computers and related systems, furniture and leasehold improvements.

Although
CSFBdirectmaintains substantial money market accounts, bank accounts and investment accounts consistent with regulatory
requirements, CSFBdirectcontinues to be substantially dependent on us for almost all of its daily financial, administrative and operational services
and related support functions including cash management, the receipt of payments from third parties and the distribution of payments to third parties.
CSFBdirectcontinues to invest its excess cash. At March 31, 2001, CSFBdirecthad approximately
$147.1 million invested in money market accounts and short-term investments. CSFB (USA) intends to fund CSFBdirect's liquidity needs
in the ordinary course of business. However, significant expenditures will be funded on a case-by-case basis as determined by CSFB (USA)'s Board of Directors. CSFB (USA)'s
Board of Directors will determine whether to provide any particular funds to either CSFB (USA) or CSFBdirectand will not be obligated to do so. In this
connection, intercompany receivables/payables are settled periodically through cash transfers to and from CSFBdirect's accounts. There are no specific
criteria to determine when we will account for a cash transfer as a long-term loan, a capital contribution or a return of capital rather than an inter-group revolving credit advance. CSFB
(USA)'s Board of Directors will make such a determination in the exercise of its business judgment at the time of such transfer, or the first of such type of transfer, based upon all relevant
circumstances.

Applicable
law and regulations require minimum levels of capital to be maintained by CSFBdirectInc., the broker-dealer
subsidiary of CSFBdirectHoldings Inc. Consequently, the cash

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

Cash
used in operating activities totaled $43.2 million for the quarter ended March 31, 2001, and cash provided by operations was $10.2 million for the quarter
ended March 31, 2000. The changes were primarily due to decreases in transaction volume related to the decline in the online brokerage operations. For the quarter ended March 31, 2001,
there were increased assets, including increases in receivables from brokers, dealers and other, net of $4.4 million and other assets of $27.8 million. This increase was offset in part
by an increase in payables to parent and affiliates, net of $14.7 million and an increase in accounts payable, accrued expenses and other liabilities of $9.2 million. For the quarter
ended March 31, 2000, there were increased assets including receivables from brokers, dealers and other, net of $8.3 million. These increases were offset by increases in payables to
parent and affiliates, net of $7.0 million.

Cash
provided by (used in) investing activities totaled $2.3 million and $(29.5) million for the quarters ended March 31, 2001 and 2000, respectively. For the quarter
ended March 31, 2001, CSFBdirectreceived proceeds of $29.7 million from the sale of short-term investments and invested and
advanced $21.6 million in connection with existing interests in several foreign joint ventures. For the quarter ended March 31, 2000,
CSFBdirectinvested $11.1 million in short-term investments and $13.7 million in connection with its existing 50% interest in
a joint venture with a Japanese bank.

Net
cash provided by financing activities for the quarter ended March 31, 2001, totaled $29.0 million received as a capital contribution as reimbursement for rebranding
expenses (net of taxes).

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

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ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

|      |  |                                                                                                                                                                                                                                                                                                                             
|----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2.1   |  | Agreement and Plan of Merger, dated as of August 30, 2000, among Credit Suisse Group, Diamond Acquisition Corp. and the Registrant, as amended                                                                                                                                                                              
|2.2   |  | Stock Purchase Agreement, dated as of August 30, 2000 among Credit Suisse Group and the AXA entities named therein, as amended                                                                                                                                                                                              
|3.1   |  | Amended and Restated Certificate of Incorporation of Registrant                                                                                                                                                                                                                                                             
|3.2   |  | By-laws of the Registrant                                                                                                                                                                                                                                                                                                   
|4.1   |  | Certificate of Designation of the Registrant's Fixed/Adjustable Rate Cumulative Preferred Stock, Series A                                                                                                                                                                                                                   
|4.2   |  | Certificate of Designation of the Registrant's Fixed/Adjustable Rate Cumulative Preferred Stock, Series B                                                                                                                                                                                                                   
|4.3   |  | The instruments defining the rights of holders of long-term debt securities of the Registrant and its subsidiaries are omitted pursuant to Section (b)(4)(iii)(A) of Item 601 of Regulation S-K. The
Registrant hereby agrees to furnish copies of these instruments to the Securities and Exchange Commission upon request.
|10.67 |  | Assignment Agreement by and between Credit Suisse First Boston (USA), Inc. (successor in interest to Donaldson, Lufkin & Jenrette, Inc.) and the Chase Manhattan Bank                                                                                                                                                       
|11.1  |  | Statement re: computation of basic earnings per share.                                                                                                                                                                                                                                                                      
|11.2  |  | Statement re: computation of diluted earnings per share.                                                                                                                                                                                                                                                                    
|12.1  |  | Computation of ratio of earnings to fixed charges and ratio of earnings to combined fixed charges and preferred stock dividends.                                                                                                                                                                                            

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

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