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SECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549

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FORM 10-K/A

AMENDMENT NO. 2 TO
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

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|For the fiscal year ended December 31, 2000 |  | Commission File Number: 1-6862
|------------------------------------------- |  | ------------------------------

Credit Suisse First Boston (USA), Inc.(Exact Name of Registrant as Specified in Its Charter)

Delaware

13-1898818(State or Other Jurisdiction of
Incorporation or Organization)

(I.R.S. Employer
Identification No.)Eleven Madison Avenue
New York, New York

10010(Zip Code)(Address of Principal Executive Offices)


(212) 325-2000(Registrant's Telephone Number, Including Area Code)

Securities
registered pursuant to Section 12(b) of the Act:

|Title of Each Class:                                                                                                    |  | Name of Each Exchange
on Which Registered:
|----------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------
|Series A Fixed/Adjustable Rate Cumulative Preferred Stock, $50 liquidation preference per share                         |  | New York Stock Exchange                   
|Series B Fixed/Adjustable Rate Cumulative Preferred Stock, $50 liquidation preference per share New York Stock Exchange |  | New York Stock Exchange                   

Securities
registered pursuant to Section 12(g) of the Act:None

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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 / /

Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of
registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K: /x/

All
of the outstanding shares of voting common stock of the Registrant, $0.10 par value, are held by Credit Suisse First Boston, Inc., an indirect wholly-owned subsidiary of
Credit Suisse Group.

Documents Incorporated by Reference: None

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EXPLANATORY
NOTE: This Amendment No. 2 to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2000 (the
"Form 10-K") is filed solely to amend the information required by Items 7, 14(a)(1), 14(a)(2) and 14(a)(3) to include earnings/(loss) applicable to common shares and per common
share of the Registrant on a consolidated basis and to delete earnings/(loss) applicable to shares of CSFBdirectCommon Stock and per share of
CSFBdirectCommon Stock, as more fully described below. The amounts of earnings/(loss) applicable to shares of CSFB (USA) Common Stock and shares of
CSFBdirectCommon Stock and per share of CSFB (USA) Common Stock and per share of CSFBdirectCommon
Stock have not changed and are not being amended.

Item
7, Selected Consolidated Financial Data of the Registrant and its Subsidiaries, is amended to include earnings/(loss) applicable to common shares and per share of the Registrant
on a consolidated basis. Item 7, Selected Combined Financial Information of CSFBdirect, is amended to delete earnings/(loss) applicable to shares of
CSFBdirectCommon Stock and per share of CSFBdirectCommon Stock. Item 7, Management's Discussion and
Analysis of Financial Condition and Results of Operations for CSFBdirect, is amended to delete the last sentence in "Results of
OperationsYear Ended December 31, 2000 Compared to Year Ended December 31, 1999" and to delete the last sentence in "Results of OperationsYear
Ended December 31, 1999 Compared to Year Ended December 31, 1998", in each case relating to earnings/(loss) applicable to shares of CSFBdirectCommon Stock and per share of CSFBdirectCommon Stock.

Item
14(a)(1), Consolidated Financial Statements of the Registrant and Subsidiaries, and Item 14(a)(2), Condensed Financial Statements of Registrant (Parent Company Only), are amended
to include earnings/(loss) applicable to common shares and per share of the Registrant on a consolidated basis. Item 14(a)(1), Combined Financial Statements of
CSFBdirect, is amended to delete earnings/(loss) applicable to shares of CSFBdirectCommon Stock and per
share of CSFBdirectCommon Stock. Item 14(a)(3), Exhibit 11.1, Statement re: computation of basic earnings per share, and Exhibit 11.2,
Statement re: computation of diluted earnings per share, are amended to include the computation of earnings/(loss) applicable to common shares and per share of the Registrant on a consolidated basis.

On
August 21, 2001, Credit Suisse First Boston, Inc, completed a tender offer for the 18,400,000 shares of CSFBdireetCommon
Stock owned by the public for USD 6 per share in cash, or a total of approximately USD 110 million, and the Registrant subsequently effected a short-form merger to acquire the
untendered shares and has deregistered and delisted the shares of CSFBdirectCommon Stock from the New York Stock Exchange.

The
Registrant hereby amends Items 7, 14(a)(1), 14(a)(2) and 14(a)(3) to the Form 10-K in their entirety and replaces such Items with the following:

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Item 7: Management's Discussion and Analysis of Financial Condition and Results of Operation

SELECTED CONSOLIDATED FINANCIAL DATA(1)  Credit Suisse First Boston (USA), Inc. and Subsidiaries

|                                                                        |                                                          | Years Ended December 31,
|----------------------------------------------------------------------- | -------------------------------------------------------- | ------------------------
|
|
|Statement of Operations Data:                                           |                                                          |                         
|Revenues                                                                |                                                          |                         
|                                                                        | Commissions                                              |                         
|                                                                        | Underwritings                                            |                         
|                                                                        | Fees                                                     |                         
|                                                                        | Interest, net(2)                                         |                         
|                                                                        | Principal transactions-net:                              |                         
|                                                                        |                                                          | Trading                 
|                                                                        |                                                          | Investment              
|                                                                        |                                                          | Other                   
|                                                                        |                                                          |                         
|                                                                        |                                                          |                         
|                                                                        |                                                          |                         
|Expenses                                                                |                                                          |                         
|                                                                        | Compensation and benefits                                |                         
|                                                                        | Communications and technology                            |                         
|                                                                        | Brokerage, clearing, exchange fees and other             |                         
|                                                                        | Occupancy and related costs                              |                         
|                                                                        | Professional fees                                        |                         
|                                                                        | Restructuring and other merger-related costs             |                         
|                                                                        | Other operating expenses                                 |                         
|                                                                        |                                                          |                         
|                                                                        |                                                          |                         
|                                                                        |                                                          |                         
|Income (loss) before provision for income taxes and extraordinary items |                                                          |                         
|Provision (benefit) for income taxes                                    |                                                          |                         
|                                                                        |                                                          |                         
|Income (loss) before extraordinary items                                |                                                          |                         
|                                                                        | Loss on early extinguishment of debt, net of tax benefit |                         
|                                                                        |                                                          |                         
|Net income (loss)                                                       |                                                          | $                       
|                                                                        |                                                          |                         
|Dividends on preferred stock                                            |                                                          | $                       
|                                                                        |                                                          |                         
|Earnings (loss) applicable to common shares                             |                                                          | $                       
|                                                                        |                                                          |                         
|Earnings (loss) applicable to common shares(3):                         |                                                          |                         
|                                                                        | CSFB (USA), Inc.(3)                                      |                         
|                                                                        |                                                          |                         
|                                                                        | CSFB (USA) Common Stock                                  |                         
|                                                                        |                                                          |                         
|                                                                        | CSFBdirectCommon Stock(4)                                |                         
|                                                                        |                                                          |                         
|Earnings per Common Share:                                              |                                                          |                         
|                                                                        | CSFB (USA), Inc.(3)                                      |                         
|                                                                        |                                                          | Basic and Diluted       
|                                                                        |                                                          |                         
|                                                                        | CSFB (USA) Common Stock(3)                               |                         
|                                                                        |                                                          | Basic and Diluted       
|                                                                        |                                                          |                         
|                                                                        | CSFBdirectCommon Stock(4)                                |                         
|                                                                        |                                                          | Basic                   
|                                                                        |                                                          |                         
|                                                                        |                                                          | Diluted                 
|                                                                        |                                                          |                         
|Weighted average common shares outstanding(3):                          |                                                          |                         
|                                                                        | CSFB (USA), Inc.(3)                                      |                         
|                                                                        |                                                          | Basic and Diluted       
|                                                                        |                                                          |                         
|                                                                        | CSFB (USA) Common Stock                                  |                         
|                                                                        |                                                          | Basic and Diluted       
|                                                                        |                                                          |                         
|                                                                        | CSFBdirectCommon Stock (in thousands) (4)                |                         
|                                                                        |                                                          | Basic                   
|                                                                        |                                                          |                         
|                                                                        |                                                          | Diluted                 
|                                                                        |                                                          |                         

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|                                                                                 |  | As of December 31, |          
|-------------------------------------------------------------------------------- |  | ------------------ | ---------
|
|
|Statement of Financial Condition Data:                                           |  |                    |          
|Securities purchased under agreements to resell and securities borrowed          |  | $                  | 117,372.4
|Total assets                                                                     |  |                    | 213,277.3
|Securities sold under agreements to repurchase and securities loaned             |  |                    | 106,661.5
|Long-term borrowings                                                             |  |                    | 11,257.5 
|Redeemable trust securities                                                      |  |                    | 200.0    
|Stockholders' equity                                                             |  |                    | 6,506.0  
|Other Financial Data:                                                            |  |                    |          
|Ratio of net assets to stockholders' equity(5)                                   |  |                    | 14.7     
|Ratio of long-term borrowings to total capitalization(6)                         |  |                    | 0.59     
|Return on average equity(7)                                                      |  |                    | (26.3    
|Ratio of earnings to fixed charges(8)(9)                                         |  |                    | 0.82     
|Ratio of earnings to combined fixed charges and preferred stock dividends(8)(10) |  |                    | 0.81     

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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. We refer you to "Recent Developments" in this section.

All
references to 2000, 1999 and 1998 refer to our fiscal year ended, or the date, as the context requires, December 31, 2000, December 31, 1999 and December 31,
1998, respectively.

When
we use the terms "we" and "our", we mean, after the Acquisition, Credit Suisse First Boston (USA), Inc., a Delaware corporation, and its consolidated subsidiaries and,
prior to the Acquisition, DLJ, a Delaware corporation, and its consolidated subsidiaries.

We
have made in this Annual Report on Form 10-K, and from time to time may otherwise make in our public filings, press releases and discussions with our management,
forward-looking statements concerning our operations, economic performance and financial condition, as well as our strategic objectives, including, without limitation, global expansion. 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:



We
have included statements that may constitute "forward-looking statements" within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
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. These statements

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relate to our future plans and objectives, among other things. By identifying these statements for you in this manner, we are alerting you to the possibility that our actual results may differ,
possibly materially, from the results indicated in these forward-looking statements.

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

Market
and economic conditions were strong in the first half of 2000, leading to increased mergers and acquisitions and equity capital markets activity. Investor demand for technology
stocks was strong in the early part of the year, but the gains have declined markedly since April 2000. The economy slowed in the second half of the year and interest rates rose in the United
States in response to inflationary pressures, including rising energy prices. The economic slowdown in the United States led to market uncertainty, a decline in major stock indices and a decline in
capital markets transactions, particularly in the technology sector. By the end of the year, many of the key market indices around the world had declined compared to 1999. By the end of the year, the
Dow Jones and NASDAQ had fallen 6.2% and 39.3%, respectively, from the levels at the beginning of the year. The end of strong technology gains, the increase in fuel prices and indications of weakness
in the U.S. economy all contributed to falling markets. Despite the volatility of the markets, global equity primary issuances increased both in volume and dollar terms compared to 1999.

U.S.
merger volume of announced transactions rose 16.5% in 2000. Mergers and acquisitions activity in the traditional industries was strong. The pace of transactions slowed as the
year progressed. Transaction volume in the fourth quarter of 2000 was 33% lower than the fourth quarter of 1999.

The
fixed income markets faced difficulties in 2000, reflecting several adverse factors including rising interest rates, the widening of credit spreads and a decline in new debt
issues and secondary market activity. The high-yield securities market had its worst year since 1990 as a result of slowing corporate earnings, a rise in defaults and high debt levels.
Issuances of high-yield securities fell sharply compared to 1999. U.S. corporate debt stood at near record levels. In 2000, companies began defaulting on bond interest payments at the
fastest pace in a decade, raising fears about investment-grade debt.

To
date in 2001, this adverse operating environment in the financial markets, particularly in mergers and acquisitions and equity capital markets, has continued.

RECENT DEVELOPMENTS

Acquisition by Credit Suisse Group

On November 3, 2000, pursuant to an agreement dated as of August 30, 2000 between Credit Suisse Group and DLJ, Credit Suisse Group, through an
acquisition subsidiary, acquired all of the outstanding shares of voting common stock of DLJ from its shareholders at a price of $90 per share. In connection with the Acquisition, DLJ changed its name
to Credit Suisse First Boston (USA), Inc.

Transfer of CSFB Corp. from CSFBI

On November 3, 2000, in conjunction with the closing of the Acquisition, our parent, CSFBI transferred all of the outstanding shares of CSFB Corp., a
U.S. registered broker-dealer that was a

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direct wholly-owned subsidiary of CSFBI, to us in exchange for our newly issued shares. This was the final step in a series of transfers that was initiated by Credit Suisse Group and us on
October 6, 2000 with a view to integrating our respective businesses. In connection with these transfers, CSFB Corp. and certain of its affiliates made an aggregate cash payment of
approximately $4.5 billion to us and our subsidiaries in exchange for certain proprietary fixed income and equity portfolios maintained by us and certain of our subsidiaries. In connection with
these transfers, CSFB Corp. became our direct wholly-owned subsidiary. In addition to the foregoing transactions, we have transferred, and expect in the future to transfer, certain entities and
financial assets and liabilities, including certain non-U.S. business and operations, to Credit Suisse Group-related entities. The results of operations for the year ended
December 31, 2000 represent the results of operations of only DLJ for the period from January 1, 2000 to November 2, 2000 and the results of operations of both DLJ and CSFB Corp.
for the period from November 3, 2000 to December 31, 2000. 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. See Note 2 to the consolidated financial statements incorporated by reference in Part II, Item 8 of this Annual Report on
Form 10-K.

In
addition, to facilitate the integration of our asset management businesses and those of Credit Suisse Group, DLJAM, previously our indirect wholly-owned subsidiary, became an
indirect wholly-owned subsidiary of CSFBI through a series of share dividends and contributions. The business of DLJAM will be combined with the business of Credit Suisse Asset Management.

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

RESULTS OF OPERATIONS

The transfer of CSFB Corp. to us had a significant effect on our statement of financial condition. Although the net assets transferred were approximately
$2.5 billion, incremental assets transferred to us amounted to approximately $143.4 billion. As a result, inclusion of results of CSFB Corp. from November 3, 2000 through
December 31, 2000 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.

We
incurred an after tax loss of approximately $1.1 billion for the year. This loss results to a large extent from restructuring charges and other non-recurring
expenses associated with the Acquisition as well as other related integration costs. We also experienced a decline in business activity beginning in September 2000 due to the uncertainties and
our focus on integration efforts in connection with the Acquisition as well as slower market conditions in the fourth quarter of 2000.

Restructuring and Other Merger-Related Costs

In connection with the Acquisition, during the fourth quarter of 2000, we incurred pre-tax restructuring charges of $842 million and other
merger-related charges of $262 million. Restructuring costs include costs to terminate certain employees, exit certain businesses and activities, and abandon or sell for salvage certain
leasehold improvements, capitalized software and equipment. As a result of these exit activities, we and other subsidiaries of CSFBI will incur certain costs and employee termination benefit payments
that have no future economic benefit and that are not associated with generating future revenue. None of the amounts included in the restructuring charges represent operating losses or income. As of
December 31, 2000, restructuring costs of $367 million have been paid. All components of these restructuring costs will be funded from working capital and will not

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require any incremental funding source. The following is a summary of the major components of the restructuring and merger-related costs:

|                            |  | Restructuring
Costs |     | Merger-Related
Costs |   | Total
|--------------------------- |  | ------------------- | --- | -------------------- | - | -----
|
|Compensation and benefits   |  | $                   | 658 |                      | $ | 244  
|Occupancy and related costs |  |                     | 85  |                      |   |     
|Technology costs            |  |                     | 74  |                      |   |     
|Professional fees and other |  |                     | 25  |                      |   | 18   
|                            |  |                     |     |                      |   |      
|                            |  | $                   | 842 |                      | $ | 262  
|                            |  |                     |     |                      |   |      

In
connection with the Acquisition, a retention plan was put in place for certain of our employees. The retention plan provides for grants of Credit Suisse Group shares for future
services and forgiveness of certain employee loans. The Credit Suisse Group shares granted for future services and forgiveness of certain employee loans generally vest over a three-year
period. The total expense associated with these items is approximately $1.3 billion, $1.2 billion for the grant of Credit Suisse Group shares and approximately $100 million for
forgiveness of employee loans. This $1.3 billion will be expensed over the vesting period beginning as of November 3, 2000. Approximately $100 million of such expense has been
recorded as merger-related costs for the year ended December 31, 2000.

Year Ended December 31, 2000 Compared to Year Ended December 31, 1999

Our results of operations for the year ended December 31, 2000 include the results of operations of CSFB Corp. from November 3, 2000 through
December 31, 2000. Therefore, our financial statements may not be fully comparable with prior periods. In addition, the restructuring and merger-related costs discussed above have significantly
impacted our results of operations for the year ended December 31, 2000. Due to the uncertainties caused by the announcement of the Acquisition in August 2000, we experienced a
significant negative impact on our business. Following the Acquisition, we have incurred, and expect in the future to incur, certain duplicative administrative costs and expenses in connection with
our integration efforts.

For
2000, net revenues increased $513.6 million, or 9.2% to $6.1 billion. During 2000, net revenues increased primarily as a result of increases in fees, commissions and
interest, and the inclusion of revenues from CSFB Corp. from November 3, 2000 through December 31, 2000. These increases were offset in part by decreases in underwritings, trading and
investment gains, particularly during the fourth quarter. 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 for 1998 and 1999 have been restated to conform to the current method of managing our business. Equity Division net revenues from external
sources increased $397.7 million or 40.1% to $1.4 billion primarily as a result of increased commissions and trading revenues, both domestically and internationally. Investment Banking
Division net revenues from external sources increased $59.1 million or 3.1% to $2.0 billion primarily due to the inclusion of CSFB Corp. revenues from November 3, 2000 through
December 31, 2000. Fixed Income Division net revenues decreased $502.3 million or 69.3% to $222.9 million, principally as a result of slowdowns in the high-yield and
mortgage-backed securities areas. Financial Services Division net revenues increased $391.4 million or 28.4% to $1.8 billion primarily as a result of increased brokerage and
correspondent clearance commission revenues and fee income in our correspondent and online brokerage businesses. For more information on segment data, we refer you to Note 20 to the
consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.

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Commission revenues increased $266.7 million or 22.2% to $1.5 billion. The expansion of international equities trading prior to the Acquisition and increases in our
correspondent and online brokerage businesses accounted for more than half the increase. The remainder of the increase was due to the inclusion of commission revenues from CSFB Corp. from
November 3, 2000 through December 31, 2000.

Underwriting
revenues decreased $286.5 million or 23.0% to $959.9 million as a result of the slowdown in underwriting activity in the two months prior to the
Acquisition, as well as a decline in market activity in the fourth quarter, particularly in initial public offerings.

Fee
revenues increased $466.5 million or 28.9% to $2.1 billion, primarily in our correspondent and online brokerage businesses, due to customer demand for a variety of
portfolio advisory and technology services. These revenues were offset in part by the decline in mergers and acquisitions fees prior to the Acquisition. Mergers and acquisitions fees increased in
November and December 2000 as a result of increased activity in the combined entity.

Interest,
net of interest expense, increased $179.2 million or 30.6% to $764.3 million. The increase was primarily due to higher rates on increased fixed income
positions as a result of the inclusion of CSFB Corp. from November 3, 2000 through December 31, 2000.

Principal
transactions-net, trading revenues decreased $84.8 million or 11.8% to $633.8 million primarily as a result of the difficult fixed income markets,
particularly for high-yield securities, and declining equity markets during the second half of the year.

Principal
transactions-net, investment revenues decreased $12.7 million or 11.8% to $94.6 million primarily as a result of gains on our venture capital
investments declining by $33.3 million. Gains on other private equity investments increased by $20.6 million from 1999.

Total
expenses for 2000 increased approximately $3.0 billion or 64.9% to $7.6 billion primarily due to the restructuring and merger-related costs of $1.1 billion
recorded in the fourth quarter of 2000, expenses related to growth in the correspondent and online brokerage businesses and the inclusion of CSFB Corp. from November 3, 2000 through
December 31, 2000.

Compensation
and benefits increased $1.1 billion or 37% to $4.3 billion. Base compensation, including benefits and payroll taxes, increased by 56.5%. Incentive and
production-related compensation increased by 29.6% in 2000. The increases were primarily due to the inclusion of CSFB Corp. from November 3, 2000 through December 31, 2000. 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. From time to time to attract new employees or to retain existing employees in a competitive environment, we guarantee certain minimum compensation levels. For these reasons and as a
result of the Acquisition, we provided greater bonus guarantees for 2001 than in prior fiscal years. Consistent with industry practice, certain of these guarantees are multi-year and extend into
fiscal years beyond 2001.

Communications
and technology expenses increased by $120.2 million to $565.4 million due to expansion of our international operations, implementation and development of
new systems and overhaul of the online customer trading and information systems for our correspondent brokerage network. Brokerage, clearing, exchange fees and other expenses increased
$63.2 million to $377.0 million due to increased trading volume and transaction fee payments. Occupancy and related costs increased $76.6 million to $255.5 million
primarily as a result of new office space needed to accommodate our domestic growth. Despite our integration efforts following the Acquisition, we incurred duplicate costs for technology,
communications and occupancy in November and December 2000. Professional fees not related to the Acquisition increased $136.6 million primarily as a result of the inclusion of CSFB Corp.
from November 3, 2000 through December 31, 2000. All other operating expenses increased $339.6 million to $740.2 million, which resulted principally from increases

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in litigation accruals in the fourth quarter of 2000. Also included in other operating expenses are travel and entertainment and printing and stationery expenses which increased due to an overall
increase in the level of business activity and increases in advertising and rebranding expense of approximately $4.0 million incurred by
CSFBdirect.

Equity
Division pre-tax income decreased $97.0 million or 119.3% to a pre-tax loss of $15.7 million due to decreases in underwritings and fees.
Investment Banking Division pre-tax income decreased $452.0 million or 96.6% to $15.9 million as a result of decreased underwritings and fees related to mergers and
acquisitions activity. Fixed Income Division pre-tax income decreased $601.0 million or 218.8% to a pre-tax loss of $326.3 million as a result of decreased
trading gains and decreased underwriting revenues in all areas. Financial Services Division pre-tax income increased $87.9 million or 29.1% to $389.6 million as a result of
increased commissions and fees related to its correspondent and online brokerage businesses, offset by increased technology costs.

Our
income tax provision (benefit) for 2000 and 1999 was ($458.1) million and $352.8 million, a 30.1% and 37.0% effective tax rate, respectively.

Net
loss for 2000 was $1.1 billion as compared with net income of $600.7 million in 1999.

Year Ended December 31, 1999 Compared to Year Ended December 31, 1998

For 1999, total net revenues increased $1.6 billion or 40.6% to $5.6 billion. During 1999, net revenues increased primarily as a result of
increases in commissions, underwritings, fees and trading, offset by decreases in interest income and investment gains. 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 for 1998 and 1999 have been restated to conform to the current method of
managing our business. Equity Division net revenues increased $325.6 million or 49.0% to $990.7 million, primarily as a result of increased commissions, underwriting and trading
revenues, both domestically and internationally. Investment Banking Division net revenues from external sources increased $416.3 million or 28.0% to $1.9 billion, primarily as a result
of increased underwriting revenues and fee income related to mergers and acquisitions activity. Fixed Income Division net revenues increased $259.6 million or 55.8% to $725.2 million,
principally as a result of increased trading gains in the high-yield and mortgage-backed securities areas, offset by reduced underwriting revenues in these areas. Financial Services
Division net revenues increased $388.9 million or 39.4% to $1.4 billion, primarily as a result of increased brokerage and correspondent clearance commission revenues and fee income in
our correspondent and online brokerage businesses. For more information on segment data, we refer you to Note 20 to the consolidated financial statements included in Part II,
Item 8 of this Annual Report on Form 10-K.

Commission
revenues increased $346.0 million or 40.5% to $1.2 billion due to increased business in virtually all areas. Share volumes on the New York Stock Exchange and
NASDAQ averaged a combined record 1.8 billion shares per day for 1999 compared to approximately 1.4 billion shares per day for 1998. Commissions generated internationally, primarily in
London and Hong Kong equities, increased 410.0% over 1998. Our correspondent and online brokerage businesses added over 1.0 million client accounts in 1999, and related customer assets
increased by approximately $140.8 billion.

Underwriting
revenues increased $202.9 million or 20.3% to $1.2 billion, primarily as a result of increases in underwriting of domestic equities, offset by a decline in
new issuances of high-yield and mortgage-backed securities.

Fee
revenues increased $420.2 million or 35.6% to $1.6 billion. These results reflected primarily our continuing market share growth in global mergers and acquisitions
advisory transactions. Fee income in our correspondent and online brokerage businesses increased due to customer demand for a

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variety of portfolio advisory and technology services. In addition, fees related to asset management increased as assets under management grew from $17.6 billion to approximately
$28.0 billion.

Interest,
net of interest expense, decreased $148.2 million or 20.2% to $585.1 million. The decrease resulted primarily from the elimination of interest related to
emerging markets proprietary trading. (We ceased certain of our proprietary trading in emerging markets in the third quarter of 1998.) If the impact of our proprietary trading activities in emerging
markets during 1998 were excluded, net interest income would have increased 22.8%. In most other areas there were increases in balances of lending activity, which were offset by slight reductions in
interest rates charged.

Principal
transactions-net, trading revenues increased $777.2 million or 1,326.3% to $718.6 million primarily as a result of gains in fixed income and
equities trading, and the elimination in 1999 of trading losses in the emerging markets, high-yield and mortgage-backed securities areas.

Principal
transactions-net, investment revenues decreased $18.7 million or 14.8% to $107.3 million primarily as a result of a decrease in realized gains on
other private equity investments sold, offset by gains on our venture capital investments of $68.8 million.

Total
costs and expenses for 1999 increased $1.3 billion or 39.4% to $4.6 billion primarily due to growth in the correspondent and online brokerage businesses as well as
our international expansion in Europe and Hong Kong.

Compensation
and benefits increased $873.7 million or 39.2% to $3.1 billion. Incentive and production-related compensation increased by 45.6% in 1999. Base compensation,
including benefits and payroll taxes, increased by 24.5% primarily due to our significant international expansion. Full-time worldwide personnel increased by 1,741 employees or 20.6% to
10,206 at the end of 1999. Non-U.S. personnel increased 30.8% to 1,700 employees at the end of 1999.

Communications
and technology expenses increased by $130.6 million to $445.2 million due to expansion of our international operations, implementation and development of
new systems, consulting fees related to the year 2000 project and overhaul of the online customer trading and information system for our correspondent brokerage network. Brokerage, clearing, exchange
fees and other expenses increased $55.2 million to $313.8 million due to increased trading volume and transaction fee payments. Occupancy and related costs increased $35.1 million
to $178.9 million, primarily as a result of new office space needed to accommodate our domestic growth and international expansion. Professional fees increased $47.5 million to
$158.7 million. All other operating expenses increased $109.9 million to $400.6 million. This included travel and entertainment, advertising, and printing and stationery expenses
which increased $65.4 million primarily due to an overall increase in the level of business activity, and advertising expense of approximately $38.0 million by
CSFBdirectfor the development and implementation of a new advertising campaign.

Equity
Division pre-tax income increased $34.8 million or 74.8% to $81.3 million, due to increases in commissions, underwritings, fees and trading gains.
Investment Banking Division pre-tax income increased $54.7 million or 13.2% to $467.9 million as a result of increased underwritings and fees related
to mergers and acquisitions activity. Fixed Income Division pre-tax income increased $138.8 million or 102.1% to $274.7 million as a result of increased trading gains offset
by decreased underwriting revenues in the high-yield securities and real estate finance areas. Financial Services Division pre-tax income increased $106.9 million or
54.9% to $301.7 million as a result of increased commissions and fees related to its correspondent and online brokerage businesses, offset by increased advertising and technology costs.

Our
income tax provision for 1999 and 1998 was $352.8 million and $229.7 million, a 37.0% and 38.3% effective tax rate, respectively.

Net
income for 1999 increased $229.9 million or 62.0% to $600.7 million.

10

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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 vary significantly from period to period. At December 31, 2000 and 1999, our total assets were $213.3 billion and
$109.0 billion, respectively. The increase in total assets was primarily a result of the transfer of CSFB Corp. to us. Total assets prior to the transfer were approximately
$143.4 billion.

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 unsecured. There were no borrowings outstanding under this
agreement at December 31, 2000.

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.

In
November 2000, in connection with the Acquisition, we loaned $3.1 billion to our parent, CSFBI. The loan matures on November 1, 2001 and bears interest at a
market rate based on LIBOR.

In
October 2000, in anticipation of the transfer of CSFB Corp. to us, we retired $225.0 million of 9.58% Subordinated Exchange Notes due 2003 for a total consideration
of $245.4 million, which includes accrued interest and a premium.

In
April 2000, we established a Euro Medium-Term Note program that enables us to issue up to $1.0 billion of notes. During 2000, we issued
$890.5 million medium-term notes with various maturity dates though 2005 under this program.

In
February 2000, we filed a shelf registration statement with the SEC that enables us to issue up to $3.1 billion of senior debt, subordinated debt securities,
preferred stock and warrants to purchase debt securities, preferred stock or other equity securities. In 2000, we issued $869.0 million medium-term notes with various maturity dates
through 2007 and $500.0 million of 8% senior notes with various maturity dates through 2005 under the shelf registration statement.

During
2000, $340.0 million of medium-term notes with various maturity dates through 2005 were issued under a $2.0 billion shelf registration statement
established in 1999.

In
addition, commercial paper outstanding under our $2.0 billion commercial paper program was $1.2 billion at December 31, 2000 and 1999.

11

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Subsequent to the Acquisition, our credit ratings of our long-term debt and commercial paper were upgraded. At December 31, 2000 such ratings 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 of 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 December 31, 2000, DLJSC and CSFB Corp. had aggregate regulatory net capital, after adjustments required by Rule 15c3-1 of approximately
$1.6 billion and $1.2 billion, respectively, which exceeded minimum net capital requirements by $1.4 billion and $1.2 billion, respectively. DLJSC exceeded the net capital
required by its most restrictive debt covenants by $892.9 million. We refer you to Note 11 to the consolidated financial statements included in Part II, Item 8 of this Annual
Report on Form 10-K.

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
December 31, 2000, 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. to us had a significant effect on our statement of financial condition. Although the net assets transferred were approximately $2.5 billion,
incremental assets transferred to us amounted to approximately $143.4 billion. As a result, inclusion of results of CSFB Corp. from November 3, 2000 through December 31, 2000 had
a significant effect on our financial statements, increasing virtually all revenue, expense and statement of financial condition line items.

Years Ended December 31, 2000, 1999 and 1998

At December 31, 2000, 1999 and 1998, cash and cash equivalents totaled $2.7 billion, $2.0 billion and $1.0 billion, respectively,
an increase of $0.7 billion, $1.0 billion and $0.8 billion, respectively.

Cash
used in operating activities totaled $28.0 billion, $11.9 billion and $2.4 billion in 2000, 1999 and 1998, respectively. In 2000, there were increases in
assets including securities borrowed of

12

---

$47.0 billion, financial instruments owned of $30.6 billion and receivables from brokers, dealers and others of $4.0 billion. These increases were partially offset by increases in
securities loaned of $24.1 billion, financial instruments sold not yet purchased of $19.7 billion, and payables to brokers, dealers and other of $9.4 billion. In 1999, there were
increases in assets including financial instruments owned of $14.8 billion, securities borrowed of $6.4 billion and receivables from customers of $2.9 billion. These increases
were partially offset by increases in liabilities including payables to customers of $1.6 billion, securities loaned of $4.2 billion and financial instruments sold not yet purchased of
$4.0 billion. In 1998, there were increases in assets including securities borrowed of $3.4 billion, receivables from customers of $1.7 billion, and a decrease in financial
instruments sold not yet purchased of $1.5 billion. An increase in payables to customers of $1.8 billion and a decrease in financial instruments owned of $3.3 billion offset these
changes.

In
2000, 1999 and 1998, net cash used in investing activities was $1.0 billion, $1.0 billion and $0.3 billion, respectively. In November 2000, in
connection with the Acquisition, we loaned $3.1 billion to our parent, CSFBI. In addition, the transfer of CSFB Corp. to us increased our equity by $2.5 billion. In 1999 and 1998, cash
used in investing activities consisted primarily of purchases to expand our domestic and
international operations and net purchases of long-term corporate development private equity investments.

In
2000, 1999 and 1998, net cash provided by financing activities totaled $29.8 billion, $14.2 billion and $3.5 billion, respectively, of which
$23.5 billion, $12.1 billion and $1.7 billion was provided by short-term financings (principally repurchase agreements), respectively. In 2000, we issued
$1.6 billion of medium-term notes and $0.5 billion of senior notes. In addition, $4.2 billion of subordinated loan agreements was added with the transfer of CSFB Corp.
to us. During 1999, we received net proceeds from the issuance of CSFBdirectCommon Stock of $346.6 million. Additionally, issuing senior notes
provided $649.6 million, and $1.2 billion was provided by issuing medium-term notes. In 1998, cash of $325.0 million was used to repay the subordinated revolving
credit agreement while $893.6 million was provided by issuing senior notes, $349.3 million was provided by issuing medium-term notes, $450.0 million was provided by
issuing senior secured floating rate notes, $300.0 million was provided from the sale of our common stock to our then parent companies, AXA Financial Inc. and AXA, S.A., and
$175.0 million was provided by issuing Series B Fixed/Adjustable Rate Cumulative Preferred Stock.

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
expenditure through at least the end of 2001.

DERIVATIVE FINANCIAL INSTRUMENTS

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

Options

The majority of our options are written options. We write option contracts specifically designed to meet customers' needs. Most of the options do not expose us
to credit risk, except for options entered into on a proprietary bases for hedging purposes, since we, not our counterparty, are obligated to perform. At the beginning of the contract period, we
receive a cash premium. During the contract period, we bear the risk of unfavorable changes in the value of the financial instruments underlying the options ("market risk"). To cover this market risk,
we purchase or sell cash or derivative financial

13

---

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.

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

Forwards and Futures

We enter into forward purchases and sales contracts for mortgage-backed securities and foreign currencies. In addition, we enter into futures contracts on
equity-based indices, foreign currencies and other financial instruments as well as options on futures contracts. Forward and futures contracts are treated as off-balance sheet items.
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, we are exposed to credit risk. To monitor this credit risk, we limit transactions with specific
counterparties, review credit limits and adhere to internally established credit extension policies. For futures contracts and options on futures contracts, the change in the market value is settled
with the exchanges in cash each day. As a result, the credit risk with the futures exchanges is limited to the net positive change in the market value for a single day.

Swaps

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

Quantitative Disclosures for Trading Derivatives

The notional or contract amounts indicate the extent of our involvement in the derivatives instruments noted above. They do not measure our exposure to market
or credit risk and do not represent the future cash requirements of such contracts. The notional (contract) amounts for derivatives outstanding at December 31, 2000 and 1999 were as follows:

2000

1999(In billions)Options written

$
39.2

$
15.1Options purchased

$
35.7

$
7.4Forward contracts purchased

$
83.0

$
35.6Forward contracts sold

$
83.4

$
41.1Futures contracts purchased

$
6.1

$
2.9Futures contracts sold

$
65.7

$
4.3Swaps

$
46.2

$
24.5


14

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The
increase in the balances related to forward contracts, futures contracts sold and swap activity is attributable to the inclusion of CSFB Corp. at December 31, 2000.

The
fair values of derivatives outstanding at December 31, 2000 and 1999 were as follows:

2000

1999Assets

Liabilities

Assets

Liabilities(In millions)Options

$
1,143.0

$
2,122.7

$
519.9

$
1,002.6Forward contracts

$
727.4

$
719.2

$
327.1

$
247.3Futures contracts

$
180.0

$
15.5

$
3.5

$
9.8Swaps

$
943.7

$
868.1

$
256.9

$
240.2


The
average fair values of derivatives for 2000 and 1999 were as follows:

2000

1999Assets

Liabilities

Assets

Liabilities(In millions)Options

$
1,042.8

$
1,595.9

$
169.5

$
444.8Forward contracts

$
931.4

$
911.2

$
329.0

$
312.6Futures contracts

$
139.7

$
57.5

$
10.3

$
7.4Swaps

$
435.4

$
428.0

$
253.3

$
94.3


The
majority of our derivatives are short-term in duration. At December 31, 2000, the total notional value of derivatives was $359.3 billion, of which
$274.5 billion expire in less than one year.

Non-trading Derivatives

We also enter into interest rate swaps to modify the characteristics of periodic interest payments associated with some of our long-term debt
obligations. At December 31, 2000 and 1999, the notional amount of these interest rate swaps was $4.2 billion and $3.3 billion, respectively.

PRIVATE EQUITY AND BRIDGE LENDING 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 December 31, 2000, we had investments of $0.8 billion and had commitments to invest up to an
additional $1.6 billion. At December 31, 2000, we had bridge loans of $1.7 million outstanding in connection with our private equity and financial advisory businesses.

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 December 31, 2000, we had long positions of high-yield debt, mortgage whole loans, senior bank and foreign sovereign debt, and other non-investment-grade debt of
approximately $1.1 billion, $6.9 billion, $929.4 million and $990.5 million, respectively, and short positions of approximately $536.8 million, $1.0 million,
$0.8 million and $238.1 million, respectively. At December 31, 1999, we had long positions of high-yield debt, mortgage whole loans, senior bank and foreign sovereign debt,

15

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and other non-investment-grade debt of approximately $840.5 million, $1.8 billion, $1.8 billion and $921.8 million, respectively, and short positions of approximately
$421.8 million, $37.0 million, $22,000 and $2.6 million, respectively. Timing of the securitization of our mortgage whole loan inventory will impact the size of our positions at
any given time.

ACCOUNTING DEVELOPMENTS

In September 2000, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 140, "Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilitiesa replacement of FASB Statement No. 125," which revises the standards for accounting for securitizations and other
transfers of financial assets and collateral. In addition,
specific implementation guidelines have been established to further distinguish transfers of financial assets that are sales from transfers that are secured borrowings. This statement is effective for
transfers occurring after March 31, 2001 and for disclosures relating to securitization transactions and collateral for fiscal years ended after December 15, 2000. We adopted the
provisions of this statement as of December 31, 2000. We believe that the adoption of this statement will not have a significant impact on our earnings, liquidity or capital resources. The
actual assessment of the impact on our results of operations and financial condition will be based on transactions occurring after March 31, 2001. We refer you to Note 8 to the
consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.

In
June 1998, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging
Activities," as amended by Statement of Financial Accounting Standards No. 137, "Accounting for Derivative Instruments and Hedging ActivitiesDeferral of the Effective Date of FASB
Statement No. 133an amendment of FASB Statement No. 133" and Statement of Financial Accounting Standards No. 138, "Accounting for Certain Derivative Instruments and
Certain Hedging Activities." These statements establish new accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for
hedging activities. These statements require that an entity recognize all derivatives as either assets or liabilities in the statement of financial condition at fair value. The accounting for changes
in the fair value of a derivative instrument depends on its intended use and the resulting designation. We adopted the provisions of these statements on January 1, 2001, the first day of our
2001 fiscal year. We expect that the adoption of these statements will increase the volatility of reported results and other comprehensive income. In general, the amount of volatility will vary with
the level of derivative activities and market conditions during any period. We do not, however, expect a material impact on our results of operations or financial condition as a result of adopting
these statements. We refer you to Note 12 to the consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.

16

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SELECTED COMBINED FINANCIAL INFORMATION(1)    CSFBdirect

|                                                                                             |                                              | Years Ended December 31,
|-------------------------------------------------------------------------------------------- | -------------------------------------------- | ------------------------
|
|
|Statement of Operations Data:                                                                |                                              |                         
|Revenues:                                                                                    |                                              |                         
|                                                                                             | Commissions                                  |                         
|                                                                                             | Underwritings                                |                         
|                                                                                             | Fees                                         |                         
|                                                                                             | Interest(2)                                  |                         
|                                                                                             |                                              |                         
|                                                                                             |                                              | Total net revenues      
|                                                                                             |                                              |                         
|Costs and expenses:                                                                          |                                              |                         
|                                                                                             | Compensation and benefits                    |                         
|                                                                                             | Brokerage, clearing, exchange and other fees |                         
|                                                                                             | Advertising                                  |                         
|                                                                                             | Occupancy and related costs                  |                         
|                                                                                             | Communications and technology                |                         
|                                                                                             | Merger-related costs                         |                         
|                                                                                             | Other operating expenses                     |                         
|                                                                                             |                                              |                         
|                                                                                             |                                              | Total costs and expenses
|                                                                                             |                                              |                         
|Income (loss) before income tax provision (benefit) and equity in net loss of joint ventures |                                              |                         
|                                                                                             |                                              |                         
|Income tax provision (benefit)                                                               |                                              |                         
|Equity in net loss of joint ventures                                                         |                                              |                         
|                                                                                             |                                              |                         
|Net income (loss)                                                                            |                                              | $                       
|                                                                                             |                                              |                         

|                                       |                           | As of December 31,
|-------------------------------------- | ------------------------- | ------------------
|
|
|Statement of Financial Condition Data: |                           |                   
|                                       | Cash and cash equivalents |                   
|                                       | Total assets              |                   
|                                       | Long-term liabilities     |                   
|                                       | Total allocated equity    |                   

17

---

|                                             |  | As of and for the Years Ended December 31,
|-------------------------------------------- |  | ------------------------------------------
|
|
|Other Data:                                  |  |                                           
|Total trades                                 |  |                                           
|Average trades per day                       |  |                                           
|Total customer assets                        |  | $                                         
|Total accounts                               |  |                                           
|Total active accounts(3)                     |  |                                           
|Total employees                              |  |                                           
|Total technology employees                   |  |                                           
|Other DataUnconsolidated Joint Ventures(4): |  |                                           
|Total trades                                 |  |                                           
|Average trades per day(5)                    |  |                                           
|Total customer assets                        |  | $                                         
|Total accounts                               |  |                                           
|Total active accounts(3)                     |  |                                           
|Total employees                              |  |                                           
|Total technology employees                   |  |                                           

---



18

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
CSFBdirect

CSFBdirect(formerly DLJdirect) represents a combination of the
assets and liabilities of our online discount brokerage and related investment services business, rather than a separately incorporated entity. All prior references to
DLJdirecthave been changed to CSFBdirect. 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% for all subsequent periods. The
18.4 million shares of CSFBdirectCommon Stock represent the 17.9% owned by the public.

The
following analysis of the results of operations and financial condition of CSFBdirectshould be read in conjunction with the
combined financial statements and the related notes thereto, and with our consolidated financial statements and related notes included in Part II, Item 8 of this Annual Report on
Form 10-K.

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

We 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, we changed the name of DLJdirectto CSFBdirect.
Costs incurred as a result of the name change are included in merger-related costs in the combined statements of operations.

On
March 14, 2001, we announced the closing of CSFBdirect's Parsippany, New Jersey call center and staff reductions of 150, or
10% of U.S. employees for CSFBdirect, as part of its cost-containment initiatives.
CSFBdirectwill take a one-time pre-tax charge of approximately $9 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, we announced our intention to acquire for $4.00 per share the 18,400,000 shares of CSFBdirectCommon Stock
owned by the public. We refer you to "Recent Developments" included in Part I, Item 1 of this Annual Report on Form 10-K.

19

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RESULTS OF OPERATIONS

Year Ended December 31, 2000 Compared to Year Ended December 31, 1999

CSFBdirect's total net revenues increased $118.7 million or 49.9% to $356.8 million. This
increase was due primarily to an increase in active accounts of 39.9% and in customer trading volume of 35.5%. Active accounts are those accounts with at least one trade during the year or with a
balance at the end of the year.

Commission
revenues increased $50.7 million or 35.5% to $193.5 million. The increase was due primarily to significant increases in customer trading volume. Average
trades per day increased 33.9% to 30,400
for the year ended December 31, 2000 from 22,700 (based upon annualized UK trades) in 1999. Commission revenues represented 54.2% and 60.0% of total revenues for 2000 and 1999, respectively.

Underwriting
revenues decreased $2.2 million or 24.4% to $6.8 million. This decrease was due primarily to the slowdown in underwriting activity as well as a decline in
market activity. Underwriting revenues represented 1.9% and 3.8% of total net revenues for 2000 and 1999, respectively.

Fee
revenues increased $36.4 million or 76.2% to $84.2 million. Fees for technology development increased $26.8 million or 112.1% to $50.7 million,
primarily due to increased demand for Internet-based technology applications. Payments for routing orders increased $3.2 million or 22.5% to $17.4 million, due primarily to significant
increases in customer trading volume, offset in part by a decline in the amount of revenue per trade that CSFBdirectreceives for routing orders.
Revenue from money market fund distribution fees increased $5.0 million or 82.0% to $11.1 million due to an increase in customer money market fund balances of $687.9 million or
50.0% to $2.1 billion. Fee revenues represented 23.6% and 20.1% of total net revenues for 2000 and 1999, respectively.

Interest,
net of interest expense, increased $33.8 million or 87.8% to $72.3 million. This increase was due primarily to interest earned on the net proceeds allocated to
CSFBdirectfrom the issuance of CSFBdirectCommon Stock and to increases in margin debits, offset in
part by decreases in free credits and short sale balances. Margin debits increased $288.5 million or 22.9% to $1.5 billion. Free credits decreased $64.5 million or 9.0% to
$649.5 million and short sale balances decreased $41.6 million or 40.2% to $61.8 million. Interest, net of interest expense, represented 20.3% and 16.2% of total net revenues for
2000 and 1999, respectively.

Total
costs and expenses for 2000 increased $137.5 million or 62.5% to $357.5 million.

Compensation
and benefits increased $63.1 million or 103.4% to $124.1 million. This increase was due primarily to growth in the number of employees from 865 to 1,692.
These additional employees were added primarily in CSFBdirect's investor services area to accommodate increased customer activity and in
CSFBdirect's technology group both in the United States and in India to develop new products.

Brokerage,
clearing, exchange and other fees increased $14.1 million or 36.0% to $53.3 million primarily due to significant increases in customer trading volume, offset
in part by lower clearing fees per trade resulting from reduced clearing rates.

Advertising
costs decreased $2.6 million or 4.1% to $60.3 million due primarily to the decision to reduce advertising expenditures in the second half of 2000 as the
utility of those expenditures decreased as market activity and account openings decreased significantly.

Occupancy
and related costs increased $11.6 million or 290.0% to $15.6 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 relocation of CSFBdirect's
headquarters.

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Communications and technology costs increased $19.0 million or 75.4% to $44.2 million due primarily to improvements in and expansion of technology infrastructure and
increases in facilities and staff.

Rebranding
costs of $6.6 million were incurred because of the name change to CSFBdirectas a result of the Acquisition.

Other
operating expenses increased $25.7 million or 92.4% to $53.5 million. Professional fees increased $11.4 million or 122.6% to $20.7 million primarily
due to continuing staffing expansion in all areas and the development of international operations. Miscellaneous expenses increased $11.9 million or 135.2% to $20.7 million, consisting
primarily of accruals for bad debt expense, travel and entertainment, information services, customer service related expenses, employee registration fees and expenses for new account credit checks.

Income
before income tax provision (benefit) and equity in net loss of joint ventures decreased $18.8 million to a loss of $752,000 for 2000. The provision for income taxes for
2000 and 1999 was $183,000 and $7.9 million, representing a (24.3%) and 43.8% effective tax rate, respectively.

CSFBdirecthas a 50% interest in foreign-based joint ventures in Japan, Hong Kong and the Middle East. For 2000 and 1999,
CSFBdirect's share of the equity in the net loss of these joint ventures was $7.0 million and $3.2 million, respectively.

CSFBdirectreported a net loss of $7.9 million for 2000 as compared with net income of $6.9 million for 1999.

Year Ended December 31, 1999 Compared to Year Ended December 31, 1998

CSFBdirect's total net revenue increased $120.2 million or 102.0% to $238.1 million. This
increase was largely due to an increase in active accounts of 58.6% and in customer trading volume of 97.1%.

Commission
revenue increased $64.1 million or 81.4% to $142.8 million. This increase was due primarily to significant increases in customer trading volume. Average
trades per day increased 99.1% to 22,700 (based upon annualized UK trades) for the year ended December 31, 1999 from 11,400 in 1998. Commission revenues represented 60.0% and 66.8% of total net
revenues for 1999 and 1998, respectively.

Underwriting
revenues earned in connection with public offerings for 1999 were $9.0 million compared with a negligible amount in 1998. Underwriting revenues represented 3.8% of
total net revenues for 1999.

Fee
revenues increased $22.3 million or 87.5% to $47.8 million. Fees for technology development increased $10.5 million or 78.4% to $23.9 million primarily
due to increased demand for Internet-based technology applications. Payments for routing orders increased $5.3 million or 59.6% to $14.2 million due primarily to significant increases in
customer trading volume, offset in part by a decline in the amount of revenue per trade that CSFBdirectreceives for routing orders. Revenue from money
market fund distribution fees increased $2.9 million or 90.6% to $6.1 million due to an increase in customer money market fund balances of $610.3 million or 79.6% to
$1.4 billion. Fee revenues represented 20.1% and 21.6% of total net revenues for 1999 and 1998, respectively.

Interest,
net of interest expense, increased $24.8 million or 181.0% to $38.5 million. This increase was due primarily to interest earned on the net proceeds allocated
to CSFBdirectfrom the issuance of CSFBdirectCommon Stock and to increases in margin debits, free
credits and short sale balances. Margin debits increased $790.2 million or 168.2% to $1.3 billion. Free credits increased $317.3 million or 80.0% to $714.1 million and
short sale balances increased $65.9 million or 175.7% to $103.4 million. Interest, net of interest expense, represented 16.2% and 11.6% of total net revenues for 1999 and 1998,
respectively.

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Total costs and expenses for 1999 increased $104.6 million or 90.6% to $220.0 million.

Compensation
and benefits increased $32.7 million or 115.5% to $61.0 million due primarily to growth in the number of employees from 374 to 865. These additional
employees were added primarily in CSFBdirect's investor services area to accommodate increased customer activity and in
CSFBdirect's technology group to develop new products, including MarketSpeed, CSFBdirect's
proprietary software which permits its customers to access CSFBdirect's online services faster than other major internet brokers.

Brokerage,
clearing, exchange and other fees increased $10.8 million or 38.0% to $39.2 million primarily due to significant increases in customer trading volume, offset
in part by lower clearing fees per trade resulting from reduced clearing rates.

Advertising
costs increased $37.8 million or 150.6% to $62.9 million due primarily to the development and implementation of a new branding and advertising campaign.

Occupancy
and related costs increased $2.4 million or 150.0% to $4.0 million due primarily to the opening of an investor services facility in Charlotte, North Carolina
and to the relocation of CSFBdirect's headquarters.

Communications
and technology costs increased $10.3 million or 69.1% to $25.2 million due primarily to improvements in and expansion of technology infrastructure and
increases in facilities and staff.

Other
operating expenses increased $9.1 million or 48.7% to $27.8 million. Professional fees increased $6.9 million or 287.5% to $9.3 million primarily due
to continuing staffing expansion in all areas and the development of international operations. Miscellaneous expenses decreased $1.7 million or 16.2% to $8.8 million.

Income
before income tax provision (benefit) and equity in net loss of joint ventures increased $15.5 million to $18.0 million for 1999 from $2.5 million for
1998. The provision for income taxes for 1999 and 1998 was $7.9 million and $1.0 million, representing a 43.8% and 40.9% effective tax rate, respectively.

CSFBdirecthas a 50% interest in a foreign-based joint venture with a Japanese bank. This joint venture began trading in
June 1999. For 1999, CSFBdirect's share of the equity in the net loss of this joint venture was $3.2 million.

Net
income increased $5.4 million or 374.8% to $6.9 million for 1999 from $1.5 million for 1998.

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 $110.7 million for the year ended December 31, 2000 and
$44.2 million for the year ended December 31, 1999. These fixed assets were comprised primarily of computers and related systems, furniture and leasehold improvements.
CSFBdirectgenerally leases its fixed assets and therefore does not incur significant capital expenditures.

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 December 31, 2000, CSFBdirecthad
approximately $188.7 million invested in money market accounts and short-term investments. We intend to fund CSFBdirect's liquidity
needs in the ordinary course of business.

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However, significant expenditures will be funded on a case-by-case basis as determined by our Board of Directors. Our Board of Directors will determine, in its sole discretion,
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. Our Board of Directors will make
such a determination in the exercise of its business judgment at the time of such transfer, or the first of such type of transfer, based upon all relevant circumstances.

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

Cash
used in operating activities totaled $7.4 million in 2000, and cash provided by operations was $28.8 million and $2.0 million in 1999 and 1998, respectively.
The changes were primarily due to increases in transaction volume related to growth in the online brokerage operations. In 2000, there were increased assets, including increases in receivables from
brokers, dealers and other, net of
$9.4 million and other assets of $4.7 million. This increase was offset by an increase in payables to parent and affiliates, net of $12.5 million and a decrease in accounts
payable and accrued expenses of $7.4 million. In 1999, there were increased assets including receivables from brokers, dealers and other of $17.1 million. These increases were offset by
increases in payables to parent and affiliates, net of $9.4 million and accounts payable and accrued expenses of $31.5 million. In 1998, receivables from brokers, dealers and others
increased $1.2 million. This increase in assets was offset by increases in operating liabilities including payables to parent and affiliates, net of $2.2 million.

Cash
used in investing activities totaled $88.1 million and $20.3 million in 2000 and 1999, respectively, and cash provided by investing activities was
$1.2 million in 1998. For the year ended December 31, 2000, CSFBdirectinvested $39.3 million in short-term investments
and invested and advanced $42.9 million in connection with acquisitions of 50% interests in several foreign joint ventures. In 1999, CSFBdirectinvested $7.8 million in short-term investments and $12.4 million in exchange for a 50% interest in a joint venture with a Japanese bank. Net proceeds from the sale of office
facilities amounted to $1.2 million for the year ended December 31, 1998.

Net
cash provided by financing activities totaled $201.8 million and $14.5 million in 1999 and 1998, respectively. In 1999 and 1998, we contributed $1.0 million
and $14.5 million, respectively, of capital to CSFBdirect. In 1999, CSFBdirectreceived net
proceeds of $233.9 million from our issuance of CSFBdirectCommon Stock. Prior to the offering,
CSFBdirectpaid $33.1 million as a dividend to an affiliate. We believe that the net proceeds, together with
CSFBdirect's current cash, cash equivalents and cash generated from operations will be sufficient to meet its expected cash needs for working capital
and capital expenditures through at least the end of 2001.

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QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

Item 7A: Quantitative and Qualitative Disclosures about Market Risk

GENERAL

The general risk management policy of Credit Suisse First Boston for the CSFB business unit serves as the basis for our and CSFB's risk management. We are part
of the Credit Suisse First Boston business unit, which we call CSFB, and our risks are managed as part of the global CSFB business unit. The CSFB risk management process is designed to ensure that
there are sufficient independent controls to measure, monitor and control risks in accordance with CSFB's control strategy and in consideration of industry best practices. The primary responsibility
for risk management lies with CSFB's senior business line managers. They are held accountable for all risks associated with their businesses, including counterparty risk, market risk, liquidity risk,
legal risk, operating risk and reputational risk.

CSFB
believes that it has effective procedures for measuring and managing the risks associated with its business activities. CSFB cannot completely accurately predict these risks and
CSFB's risk management cannot fully protect against all types of risks. Unforeseen market developments or unexpected movements or disruption in one of more markets can result in losses due to such
events as adverse changes in inventory values, a decrease in liquidity of trading positions, greater earnings volatility or increased credit risk exposure. Such losses could have a material adverse
effect on our and CSFB's results of operations and financial condition.

Risk
management is an ongoing process. The process begins with the determination of CSFB's business objectives and strategies and proceeds with the identification, assessment,
management and control of the risks associated with its activities and the reaffirmation or reconsideration of objectives and strategies.

RISK MANAGEMENT AT CSFB

Risk Management

The Board of Directors of Credit Suisse First Boston is ultimately responsible for the determination of general risk policy and risk management organization
and for approving the overall market risk limit as recommended by the Credit Policy Committee/Capital Allocation and Risk Management Committee, or CPC/CARMC. CPC/CARMC establishes the policies and
procedures regarding risk and capital allocation within CSFB. CPC/CARMC is responsible for approving market risk management policies and procedures, risk concentration limits, risks outside these
limits within its authority and stress test and scenario analysis definitions. CPC/CARMC is also responsible for recommending overall market risk limits and market risk limit changes (total limit) to
the Board of Directors for review and approval.

Strategic
Risk Management, or SRM, is part of the independent risk oversight function of CSFB and is responsible for assessing the overall risk profile of CSFB on a global basis and
recommending corrective action where appropriate. SRM acts as the "risk conscience" of CSFB with respect to all risks that could have a material economic effect.

Risk
Measurement and Management, or RMM, is responsible for the measurement and reporting of all credit risk and market risk data for CSFB. RMM consolidates exposures arising from all
trading

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portfolios and geographic centers on a daily basis. CSFB uses two main methodologies to measure and manage the market risks that it may undertake: the "value-at-risk", or VAR,
method and scenario analysis. In addition, RMM uses various models to measure "gap" risk and economic capital for certain complex activities and to estimate the effect of more severe market movements.

Credit
Risk Management, or CRM, is responsible for approving all credit risk assumed by CSFB. This includes loans and loan-related credit risk, counterparty credit risk
and country risk. In addition, CRM has oversight responsibility for concentrated positions in trading inventory. Unusual risks and specific policies and procedures are reviewed and approved by
CPC/CARMC.

CRM's
responsibilities are carried out by senior officers within the CRM function who provide dedicated coverage to each of CSFB's major businesses. Each of these CRM units is
organized along regional lines, and in some cases further organized along industry or other lines of specialty, for example, leveraged and project finance.

Other
business-specific risks are managed primarily through designated groups and committees within the different operating divisions. Before any new activity is undertaken, the New
Business Committee is required to review the proposed business, its structure and infrastructure requirements and ensure that all risks are identified and addressed appropriately. This Committee is
composed of the senior managers responsible for the Finance, Administration and Operations functions of CSFB.

To
supplement its control environment, CSFB has an oversight function with (a) selected Executive Board members who have overall responsibility for oversight in their
respective regions, (b) regional oversight managers who assist the Executive Board members with this responsibility and (c) a country manager in each country to manage local oversight
issues. Regional Oversight and Country Management serves as an additional line of control and concentrates on regulatory and reputational issues, supervising legal entities and supporting management
in its efforts to improve the control environment.

The
Corporate Treasury Department of CSFB is responsible for managing CSFB's liquidity risk.

Market Risk

Market risk can be described as the potential change in the value of a portfolio of financial instruments resulting from the movement of market rates and
prices. A typical transaction or position may be exposed to a number of different market risks. Types of market risk include interest rate, foreign currency exchange rate, equity risk and commodity
price risk. Interest rate risk can arise from changes such as changes in the level, slope and curvature of the yield curve; changes in the implied volatility of interest rate derivatives; changes in
the rate of mortgage prepayments; and changes in credit spreads. Foreign currency exchange rate risk can arise from changes such as those in spot prices and the implied volatility of currency
derivatives. Equity risk can arise from changes such as changes in the price of individual equity securities and equity indices, changes in the implied volatility of equity derivatives and dividend
risk. We do not have material commodity price risk.

CSFB
devotes considerable resources in its effort to ensure that market risk is comprehensively captured, accurately modeled and effectively managed and reported. RMM consolidates
exposures arising from all trading portfolios in all geographical centers and calculates and reports CSFB's global aggregate risk exposure on a daily basis. To achieve this, RMM uses a number of
complementary risk measurement techniques. The two principal techniques are value-at-risk and scenario analysis. VAR is a statistical estimate of the potential loss arising
from a portfolio using a predetermined confidence level and holding period and market movements determined from historical data. Scenario analysis estimates
the potential loss from significant changes in market parameters that are modeled on past extreme events and hypothetical scenarios.

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Value at Risk

CSFB has used a VAR methodology to model market risk since 1995. The methodology is subject to continuous review in an effort to ensure that it remains
relevant to the business being conducted, captures all significant risks, is consistent across risk types and meets or exceeds regulatory and industry standards. There is no uniform industry
methodology for estimating VAR. The CSFB VAR methodology uses assumptions and estimates that CSFB believes are reasonable, but different assumptions or estimates could result in different estimates of
VAR.

CSFB's
VAR is defined as the 99th percentile greatest loss that may be expected in a portfolio over a 10-day holding period. In general, a rolling two years of historical
data are used to derive the market movements used for this calculation. These movements are recalculated on a quarterly basis and after periods of significant market turbulence. CSFB determines market
risk exposures by taking current positions and calculating a series of profit and loss movements over a predetermined holding period of 10 days using two years of historical data. Risk is
calculated as the 99th percentile of observed losses over the holding period. These parameters and procedures currently meet the quantitative and qualitative requirements prescribed by
the Basel Committee on Banking Supervision, the Swiss Federal Banking Commission and other leading banking regulators.

VAR
as a risk measure quantifies the loss on a portfolio under normal market conditions and is not intended to measure risk associated with unusually severe market moves. The VAR
methodology also assumes that past data can be used to predict future events. VAR calculated for a 10-day period does not fully capture the market risk of trading positions that cannot be
liquidated or hedged within 10 days. During periods of pronounced market disruption outside the 99th percentile, other techniques such as scenario analysis become more important
tools than VAR for monitoring risk exposures.

The
VAR data below shows the market risk exposures of our trading positions at December 31, 1999, November 2, 2000 (the last day before we were acquired by Credit Suisse
Group), November 3, 2000 (the date we were acquired by Credit Suisse Group and CSFB Corp. became our subsidiary) and December 31, 2000. Due to the benefit of diversification, our VAR is
less than the sum of the individual components.

|         |                                | Pre-Acquisition |   | Post-Acquisition
|-------- | ------------------------------ | --------------- | - | ----------------
|
|
|Trading: |                                |                 |   |                 
|         | Interest rate risk             |                 | $ | 60.1            
|         | Equity risk                    |                 |   | 71.5            
|         | Foreign currency exchange risk |                 |   | 0.8             
|         | Total                          |                 |   | 128.3           

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The
two histograms below show daily trading revenue for the year ended December 31, 2000 for substantially all of our trading activities. The first shows our daily trading
revenues from January 1, 2000 to November 2, 2000 (the day before we were acquired by Credit Suisse Group). The second histogram shows our daily trading revenues from November 3,
2000 (the day we were acquired by Credit Suisse Group and CSFB Corp. became our subsidiary) to December 31, 2000.

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Non-Trading Market Risk

We have equity risk on our non-trading financial instruments portfolio, which is comprised of our private equity and merchant banking investments. We do not
have material interest rate, foreign exchange or commodity price risks on our non-trading portfolio. We measure equity risk on our private equity and merchant banking investments using a sensitivity
analysis that estimates the potential decline in the recorded value of the investments resulting from a 10% decline in the equity markets of G-21 countries and a 20% decline in the equity markets of
non-G-21 countries. Different assumptions could produce materially different estimates of market risk. As of December 31, 2000, our non-trading market risk was approximately $97 million.

DLJ
included its private equity and merchant banking investments portfolio in its trading portfolio, and the related equity price risk was measured using VAR. Following the
Acquisition, to conform to CSFB's risk management policies, our private equity and merchant banking investments portfolio market risk is managed as part of CSFB's non-trading portfolio or "banking
book." We have measured market risk on DLJ's private equity and merchant banking investments portfolio as of December 31,

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1999, using the sensitivity analysis described above, and the non-trading market risk was approximately $143 million.

These
non-trading market risk estimates measure the potential decline in the recorded value of the private equity and merchant banking investments. Actual losses would be mitigated by
any unrealized gains not reflected in the recorded value of these investments.

Market Risk Limit

Market risk limits are structured at three levels: an overall market risk VAR limit for CSFB as a whole; market risk limits by business division
(e.g.,Fixed Income Division); and market risk limits by business line within a business division (e.g.,Foreign Exchange). Asset class VAR limits are used to control exposure within a particular risk type.

Market
risk is managed and controlled at three levels. Senior management is responsible for monitoring CSFB's market risk utilizations, exposures and risk-adjusted
performance. Trading management is responsible for actively managing positions against approved risk limits. RMM is responsible for monitoring exposures against approved risk limits, obtaining
appropriate sign-off for limit excesses and seeking to ensure that trading management bring exposures within the limits following limit excesses when appropriate.

Additional
market risk limits (including limits by region or risk type) are imposed by trading management in consultation with RMM. These limits are essentially internal risk flags,
which are used to assist trading management to identify potential risk concentrations. RMM monitors and reports compliance with the official limit framework and also provides assistance in an effort
to ensure compliance with lower level risk flags, as required. CSFB uses various other types of limits to highlight potential risk concentrations. These include, among others, country exposure limits,
issuer limits and market value limits.

Scenario Analysis

Scenario analysis examines the potential effects of changes in market conditions, corresponding to exceptional but plausible events, on the financial condition
of CSFB. The results of the analysis are used to manage exposures on a firm-wide basis, as well as at the portfolio level. Scenario analysis involves the revaluation of CSFB's major
portfolios to arrive at a measure of the profit or loss the firm may suffer under a particular scenario. Scenarios are applied to all major markets in which CSFB operates.

Global
scenarios are used to capture the risk of severe disruption to all major markets and are related to historic events such as the crisis in the 1987 equity markets, the 1990 U.S.
real estate market and the 1994 bond markets and the 1998 credit crisis. Business level scenarios are used to capture portfolio-specific risks by employing scenarios based on non-parallel
yield curve shifts, changes in correlations and other pricing assumptions and scenarios incorporating hedging assumptions through time. Reports are produced for senior management and traders for a
range of scenarios on at least a monthly basis.

Credit Risk

The counterparty risk portion of credit risk arises from the probability that a counterparty will not perform its contractual obligations to CSFB, resulting in
a partial or total loss. To assess the probability of counterparty default, CSFB utilizes a counterparty rating scale which approximates that used by the major public rating agencies (with AAA as the
best credit rating to D as the worst) and applies this credit rating measure against all of its counterparties. CSFB takes an active approach to rating

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counterparties and, as a result, from time to time internal ratings may deviate from those assigned by public rating agencies.

Credit Authority

Credit authority is delegated by the Chief Credit Officer to specific senior personnel within CRM and is reviewed periodically. Credit risk approval authority
is separated from line functions. CPC/CARMC is responsible for maintaining credit policies and processes, evaluating country, counterparty and transaction risk issues, applying senior level oversight
for the credit review process and seeking to ensure global consistency and quality of the credit portfolio. CPC/CARMC regularly reviews credit limits measuring country, geographic region and product
concentrations, as well as impaired assets and recommended loan loss provisions.

Credit Analysis Methodology

All counterparties are assigned a credit rating as noted above. The intensity and depth of analysis is related to the amount, duration and level of risk being
proposed together with the credit quality of the counterparty or issuer in question. Analysis is both quantitative and qualitative. Analysis is also forward looking, concentrating on economic trends
and financial fundamentals. In addition, analysts make use of peer analysis, industry comparisons and other quantitative tools. Any final rating requires the consideration of qualitative factors
relating to the company, its industry and management. The Credit Rating System, an internally developed quantitative model, is an integral component of CSFB's internal rating process and is also a key
tool in ensuring the global consistency of ratings, particularly for counterparties that are not rated by external agencies.

In
addition, all counterparty ratings are subject to the rating of the country in which they are domiciled. Analysis of key sovereign and economic issues for all jurisdictions is
undertaken and these are considered when assigning the rating and risk profile for individual counterparties.

Credit Exposure Management

Counterparty credit exposures are monitored by Credit Exposure Management, or CEM, a function within CRM, on an on-going basis against approved
credit limits to determine the continued quality and creditworthiness of the counterparty and the transaction. The frequency and depth of the reviews are dictated by the associated risks of the
exposures. CEM manages exposures based on a mark-to-market and potential exposure basis and has implemented a regular reporting cycle with early warning indicators in an effort
to ensure that large exposures and potential problems are highlighted as early as possible. CEM actively manages and minimizes exposures that exceed CSFB's credit risk profile.

Credit Provisioning

For business line management and reporting purposes, CSFB measures expected loss for the loan portfolio and for derivatives exposures over a specified time
horizon (depending on the product) based upon the default probabilities assigned by the credit ratings to the borrowers/counterparties. This statistical measure of expected loss is referred to as the
annual credit provision, or ACP. The purpose of the ACP is to reflect more accurately the true earnings of the loan or derivatives business by matching income with expected credit losses. For
financial reporting purposes, specific credit loss provisions are established on a case-by-case basis taking into account the respective counterparty and/or transaction risk.

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Credit Risk Arising from Trading Positions and Derivative Transactions

Credit risk associated with CSFB's trading and derivatives business is measured against counterparty limits on at least a daily basis. Credit risk is defined
in terms of mark-to-market replacement value and potential exposure to maturity, which is based on volatility of the underlying market factors such as interest and foreign
exchange rates. VAR analysis is conducted to estimate the potential effect of market volatility on the size of CSFB's counterparty credit exposures.

On
a case-by-case basis, CSFB mitigates credit risk associated with its trading and derivatives business by taking collateral (normally consisting of cash
and/or treasury instruments issued by G7 sovereigns) from counterparties. Typically, counterparties have two days to meet collateral (margin) calls and during this period CSFB has potential credit
risk that the collateral will not be delivered, and mark-to-market exposure remains positive ("call period risk"). In the case of lower-rated counterparties, additional
collateral may also be taken to cover potential call period risk. Collateral is managed and monitored by
the Collateral Management Unit, a team of specialists independent of CRM and business line management.

Country Risk

Country risk is the risk of a substantial, systemic loss of value in the financial assets of a country or group of countries, which may be caused by
dislocations in the credit, equity or currency markets. CSFB's four major operating divisions all assume country risk in a variety of ways. CPC/CARMC is responsible for setting of limits for this risk
based on recommendations of CRM, SRM and CSFB's economists. In 1999, CSFB re-evaluated country risk limits for emerging markets, including extensive scenario testing, and CSFB's risk
exposure to emerging markets countries was significantly reduced.

The
measurement of exposures against country limits is undertaken by RMM. For trading positions, country risk is a function of the mark-to-market exposure of
the position, while for loans and related facilities, country risk is a function of the amount that CSFB has lent or committed to lend. The day-to-day management of country
exposure is assigned to each of the core businesses in accordance with its business authorizations and limit allocations. RMM and CRM provide independent oversight in an effort to ensure that the core
businesses operate within their limits. CRM has the responsibility for periodically adjusting these limits to reflect changing credit fundamentals and business volumes. CPC/CARMC regularly reviews the
status and creditworthiness of countries and adjusts country risk limits accordingly.

Settlement Risk

Settlement risk arises whenever the settlement of a transaction results in timing differences between the disbursement of cash or securities and the receipt of
value from the counterparty. This risk arises whenever transactions settle on a "free of payment" basis and is especially relevant when operating across time zones.

CSFB
seeks to minimize and manage settlement risk through its participation in regulated clearing and depository organizations, which offer delivery versus payment services. CSFB is
also actively participating in the creation of new settlement systems. One such system is Continuous Linked Settlement, or CLS, which aims to eliminate settlement risk in the field of foreign exchange
trading. CLS is scheduled to be available in late 2001. In those markets in which these services do not exist, CSFB utilizes where possible agent banks that are instructed to exchange value for value.

In
those instances where market convention and/or products preclude a value-for-value exchange, CSFB seeks to manage its risk through confirmation and
affirmation of transaction details with counterparties. In addition, it also actively manages the timing of settlement instructions to its agents

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and the reconciliation of incoming payments in order to reduce the window of exposure. CRM considers these factors in deciding counterparty risk limits.

Legal Risk

CSFB faces significant legal risks in its businesses. Legal risks in the investment banking business include, among other things, disputes over the terms of
trades and other transactions in which CSFB acts as principal; securities law disclosure and other liability in connection with transactions pursuant to which CSFB acts as underwriter, placement agent
or financial adviser; the unenforceability or inadequacy of the documentation for some of the transactions in which CSFB participates; investment suitability concerns; compliance with the laws and
regulations (including change in laws or regulations) of the many countries in which CSFB does business; and disputes with its employees. Some of these transactions or disputes result in potential or
actual litigation and arbitration that CSFB must incur legal expenses to defend.

The
investment banking business is subject to extensive regulation by governmental and self-regulatory organizations around the world. A failure to comply with these
regulations could result in regulatory investigations, fines, restrictions on some of CSFB's business activities or other sanctions. CSFB seeks to minimize legal risk through the adoption of
compliance and other policies and procedures, continuing to refine controls over business practices and behavior, extensive employee training sessions, the use of appropriate legal documentation, and
the involvement of the Legal and Compliance Department and outside legal counsel.

Operational Risk

Operational risk is the risk of adverse impact to CSFB's business as a consequence of conducting it in an improper or inadequate manner and may result from
external factors. Credit Suisse Group uses a group-wide framework to monitor and control such risks. CSFB is required to operate within this framework. CSFB has longstanding resources in
place to deal with the many aspects of operational risk control, for example a substantial legal and compliance department, an independent audit function, and many other functions to address specific
operational risk issues. CSFB has also established a central Operational Risk Management team, together with specialist teams in key support departments such as the Operations Department. The central
team reports to the head of RMM. The functional departments take responsibility for their own operational risks. Regular communication takes place between these functions to achieve a common
understanding of priorities and to develop reporting processes and other initiatives. Defining and striving for best practice in operational risk management methodology and techniques was a major
focus during 2000.

Operational
risk is mitigated through effective and comprehensive staff training, policies, procedures and a system of internal controls. Such controls start with full segregation of
duties, but also include risk management information and computer systems, communication networks and fraud detection. Trading units, for example, are kept strictly separate from
back-office operations, with each area reporting to a different line of management. Independent pricing controls are in place and technical and organizational control mechanisms are
designed in an effort to ensure that transactions are processed promptly and correctly. Development of specific operational risk management tools has begun with the consolidated capture and reporting
of wide-ranging risk indicators to senior management. Statistical and qualitative analyses will show the relevance and usefulness of individual indicators as early warning signals. This
reporting tool will provide senior management with a better overview of operational risks. Work on improving this reporting framework and evaluating, developing and implementing others will continue
through 2001.

31

---

Reputational Risk

CSFB's policy is to avoid any action or transaction that has a potentially unacceptable level of risk to CSFB's reputation. Senior business managers are
primarily responsible for the effect on CSFB's reputation of all the business that they conduct. If a transaction has any characteristics that might impair CSFB's reputation, the transaction must be
put through a reputational risk review procedure before CSFB makes a commitment to the client or the transaction. This procedure includes approval from senior members of Regional Oversight and
specific senior business managers. In addition, CSFB has an extensive system of functional controls, housed within the Legal and Compliance Department, CRM, New Business and Product and Financial
Control, that highlight potential reputational risk issues.

Liquidity Risk

Our liquidity risk is managed as a part of CSFB's global liquidity policy. CSFB's liquidity policy focuses on the proven stability of its unsecured funding
sources, which include CSFB-sourced deposits as well as access to customer funds sourced by affiliates. The deposit base provides CSFB with substantial sources of liquidity that are well
diversified and driven by customer relationships rather than price. These deposits could be used to provide funds to us if required and if provided by CSFB. We regularly access the capital markets
through our commercial paper program, medium-term note programs and issues of senior debt and other securities. Additionally, we maintain a $2.8 billion revolving credit facility
with various banks, of which $2.4 billion is unsecured. CSFBI, our parent, also has in place a $1.495 billion revolving credit facility with various banks, which could be used to provide
funds to us if required and if provided by CSFBI. CSFB and we also have access to additional liquidity through our respective subsidiary broker-dealers, which have the capacity to increase their
funding through the secured funding markets (repurchase agreements and other collateralized arrangements). These secured funding markets have proven reliable in high stress conditions. This secondary
source of liquidity is potentially
available as alternative funding to meet business plans and commercial commitments. CSFB regularly stress tests its liquidity using scenarios designed to represent highly adverse conditions.

32

---



INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE  ITEMS 14(a)(1) AND 14(a)(2)

|CONSOLIDATED FINANCIAL STATEMENTS                                             |                                                            | Page
|----------------------------------------------------------------------------- | ---------------------------------------------------------- | ----
|Credit Suisse First Boston (USA), Inc. and Subsidiaries                       |                                                            |     
|                                                                              | Independent Auditors' Report                               |     
|                                                                              | Consolidated Statements of Financial Condition             |     
|                                                                              | Consolidated Statements of Operations                      |     
|                                                                              | Consolidated Statements of Changes in Stockholders' Equity |     
|                                                                              | Consolidated Statements of Cash Flows                      |     
|                                                                              | Notes to Consolidated Financial Statements                 |     
|FINANCIAL STATEMENT SCHEDULE                                                  |                                                            |     
|Schedule ICondensed Financial Statements of Registrant (Parent Company Only) |                                                            |     
|                                                                              | Condensed Statements of Financial Condition                |     
|                                                                              | Condensed Statements of Operations                         |     
|                                                                              | Condensed Statements of Cash Flows                         |     
|                                                                              | Notes to Condensed Financial Statements                    |     
|COMBINED FINANCIAL STATEMENTS                                                 |                                                            |     
|CSFBdirect                                                                    |                                                            |     
|                                                                              | Independent Auditors' Report                               |     
|                                                                              | Combined Statements of Financial Condition                 |     
|                                                                              | Combined Statements of Operations                          |     
|                                                                              | Combined Statements of Changes in Allocated Equity         |     
|                                                                              | Combined Statements of Cash Flows                          |     
|                                                                              | Notes to Combined Financial Statements                     |     

F1

---

INDEPENDENT AUDITORS' REPORT

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

We
have audited the accompanying consolidated statements of financial condition of Credit Suisse First Boston (USA), Inc. and subsidiaries as of December 31, 2000 and 1999, and the
related consolidated statements of operations, changes in stockholders' equity, and cash flows for each of the years in the three-year period ended December 31, 2000, and the
related financial statement schedule. These consolidated financial statements and related financial statement schedule are the responsibility of the Company's management. Our responsibility is to
express an opinion on these consolidated financial statements and related financial statement schedule based on our audits.

We
conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits to obtain reasonable
assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the
consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated
financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In
our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Credit Suisse First Boston (USA), Inc. and
subsidiaries as of December 31, 2000 and 1999, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31,
2000, in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the related financial statement schedule, when considered in relation to the
consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

/s/
KPMG LLP
New York, New York

February 8,
2001,
except as to Notes 21 and 22, which are as of March 26, 2001

F2

---



CREDIT SUISSE FIRST BOSTON (USA), INC. AND SUBSIDIARIES  (Formerly Donaldson, Lufkin & Jenrette, Inc. and Subsidiaries)    Consolidated Statements of Financial Condition    (In
thousands, except share and per share data)    ASSETS

|                                                                                                                    |                                                                                         | December 31,
2000 |             | December 31,
1999
|------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------- | ----------------- | ----------- | -----------------
|Cash and cash equivalents                                                                                           |                                                                                         | $                 | 2,758,390   |                  
|Cash and securities segregated for regulatory purposes or deposited with clearing organizations                     |                                                                                         |                   | 4,968,705   |                  
|Collateralized short-term agreements:                                                                               |                                                                                         |                   |             |                  
|                                                                                                                    | Securities purchased under agreements to resell                                         |                   |             | 40,067,879       
|                                                                                                                    | Securities borrowed                                                                     |                   |             | 77,304,516       
|Receivables:                                                                                                        |                                                                                         |                   |             |                  
|                                                                                                                    | Customers                                                                               |                   |             | 10,096,211       
|                                                                                                                    | Brokers, dealers and other                                                              |                   |             | 9,939,024        
|Note receivable from parent                                                                                         |                                                                                         |                   | 3,100,000   |                  
|Financial instruments owned, at value:                                                                              |                                                                                         |                   |             |                  
|                                                                                                                    | U.S. government and agencies (includes securities pledged as collateral of $14,272,177) |                   |             | 20,784,979       
|                                                                                                                    | Corporate debt (includes securities pledged as collateral of $6,074,305)                |                   |             | 13,146,716       
|                                                                                                                    | Foreign sovereign debt                                                                  |                   |             | 571,029          
|                                                                                                                    | Mortgage whole loans (includes securities pledged as collateral of $4,136,383)          |                   |             | 6,870,172        
|                                                                                                                    | Equities (includes securities pledged as collateral of $9,325,965)                      |                   |             | 15,332,579       
|                                                                                                                    | Other                                                                                   |                   |             | 1,851,167        
|                                                                                                                    | Long-term corporate development investments                                             |                   |             | 1,031,339        
|Federal income taxes receivable                                                                                     |                                                                                         |                   | 489,790     |                  
|Net deferred tax asset                                                                                              |                                                                                         |                   | 1,820,857   |                  
|Office facilities at cost (net of accumulated depreciation and amortization of $723,365 and $364,006, respectively) |                                                                                         |                   | 990,653     |                  
|Other assets and deferred amounts                                                                                   |                                                                                         |                   | 1,840,476   |                  
|Goodwill                                                                                                            |                                                                                         |                   | 312,770     |                  
|                                                                                                                    |                                                                                         |                   |             |                  
|Total Assets                                                                                                        |                                                                                         | $                 | 213,277,252 |                  
|                                                                                                                    |                                                                                         |                   |             |                  

See
accompanying notes to consolidated financial statements.

F3

---



CREDIT SUISSE FIRST BOSTON (USA), INC. AND SUBSIDIARIES  (Formerly Donaldson, Lufkin & Jenrette, Inc. and Subsidiaries)    Consolidated Statements of Financial Condition    (In
thousands, except share and per share data)    LIABILITIES AND STOCKHOLDERS' EQUITY

|                                                                                                                       |                                                | December 31,
2000                                                                                                                                                                          |                            | December 31,
1999 |        
|---------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | -------------------------- | ----------------- | -------
|Commercial paper and short-term borrowings                                                                             |                                                | $                                                                                                                                                                                          | 20,818,494                 |                   | $      
|Collateralized short-term financings:                                                                                  |                                                |                                                                                                                                                                                            |                            |                   |        
|                                                                                                                       | Securities sold under agreements to repurchase |                                                                                                                                                                                            |                            | 71,063,703        |        
|                                                                                                                       | Securities loaned                              |                                                                                                                                                                                            |                            | 35,597,774        |        
|Payables:                                                                                                              |                                                |                                                                                                                                                                                            |                            |                   |        
|                                                                                                                       | Customers                                      |                                                                                                                                                                                            |                            | 12,118,763        |        
|                                                                                                                       | Brokers, dealers and other                     |                                                                                                                                                                                            |                            | 14,213,823        |        
|Financial instruments sold not yet purchased, at value:                                                                |                                                |                                                                                                                                                                                            |                            |                   |        
|                                                                                                                       | U.S. government and agencies                   |                                                                                                                                                                                            |                            | 22,144,902        |        
|                                                                                                                       | Corporate debt                                 |                                                                                                                                                                                            |                            | 4,115,817         |        
|                                                                                                                       | Equities                                       |                                                                                                                                                                                            |                            | 3,421,407         |        
|                                                                                                                       | Other                                          |                                                                                                                                                                                            |                            | 2,933,913         |        
|Accounts payable and accrued expenses                                                                                  |                                                |                                                                                                                                                                                            | 7,488,068                  |                   |        
|Other liabilities                                                                                                      |                                                |                                                                                                                                                                                            | 1,397,101                  |                   |        
|Long-term borrowings                                                                                                   |                                                |                                                                                                                                                                                            | 11,257,516                 |                   |        
|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; 84,250,000 notional shares in respect of CSFB (USA)'s
retained interest) |                            |                   | 1,840  
|Paid-in capital                                                                                                        |                                                |                                                                                                                                                                                            | 5,072,215                  |                   |        
|Retained earnings                                                                                                      |                                                |                                                                                                                                                                                            | 1,064,413                  |                   |        
|Accumulated other comprehensive income (loss)                                                                          |                                                |                                                                                                                                                                                            | (7,497                     | )                 |        
|Employee deferred compensation stock trust                                                                             |                                                |                                                                                                                                                                                            |                           |                   |        
|Common stock issued to employee deferred compensation trust                                                            |                                                |                                                                                                                                                                                            |                           |                   |        
|                                                                                                                       |                                                |                                                                                                                                                                                            |                            |                   |        
|                                                                                                                       |                                                |                                                                                                                                                                                            | Total stockholders' equity |                   |        
|                                                                                                                       |                                                |                                                                                                                                                                                            |                            |                   |        
|Total Liabilities and Stockholders' Equity                                                                             |                                                | $                                                                                                                                                                                          | 213,277,252                |                   | $      
|                                                                                                                       |                                                |                                                                                                                                                                                            |                            |                   |        

See
accompanying notes to consolidated financial statements.

F4

---



CREDIT SUISSE FIRST BOSTON (USA), INC. AND SUBSIDIARIES  (Formerly Donaldson, Lufkin & Jenrette, Inc. and Subsidiaries)    Consolidated Statements of Operations    (In thousands,
except share and per share data)

|                                                                                  |                                                                                          | Years Ended December 31, |                   
|--------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------- | ------------------------ | ------------------
|
|Revenues:                                                                         |                                                                                          |                          |                   
|                                                                                  | Commissions                                                                              |                          | $                 
|                                                                                  | Underwritings                                                                            |                          |                   
|                                                                                  | Fees                                                                                     |                          |                   
|                                                                                  | Interest, net of interest expense of $8,161,465, $4,839,810 and $4,501,242, respectively |                          |                   
|                                                                                  | Principal transactions-net:                                                              |                          |                   
|                                                                                  |                                                                                          | Trading                  |                   
|                                                                                  |                                                                                          | Investment               |                   
|                                                                                  | Other                                                                                    |                          |                   
|                                                                                  |                                                                                          |                          |                   
|                                                                                  |                                                                                          |                          | Total net revenues
|                                                                                  |                                                                                          |                          |                   
|Expenses:                                                                         |                                                                                          |                          |                   
|                                                                                  | Compensation and benefits                                                                |                          |                   
|                                                                                  | Communications and technology                                                            |                          |                   
|                                                                                  | Brokerage, clearing, exchange fees and other                                             |                          |                   
|                                                                                  | Occupancy and related costs                                                              |                          |                   
|                                                                                  | Professional fees                                                                        |                          |                   
|                                                                                  | Restructuring and other merger-related costs                                             |                          |                   
|                                                                                  | Other operating expenses                                                                 |                          |                   
|                                                                                  |                                                                                          |                          |                   
|                                                                                  |                                                                                          |                          | Total expenses    
|                                                                                  |                                                                                          |                          |                   
|Income (loss) before provision (benefit) for income taxes and extraordinary items |                                                                                          |                          | (1,522,164        
|                                                                                  |                                                                                          |                          |                   
|Provision (benefit) for income taxes                                              |                                                                                          |                          | (458,074          
|                                                                                  |                                                                                          |                          |                   
|Income (loss) before extraordinary items                                          |                                                                                          |                          | (1,064,090        
|Loss on early extinguishment of debt, net of tax benefit of ($5,047)              |                                                                                          |                          | (11,722           
|                                                                                  |                                                                                          |                          |                   
|Net income (loss)                                                                 |                                                                                          | $                        | (1,075,812        
|                                                                                  |                                                                                          |                          |                   
|Dividends on preferred stock                                                      |                                                                                          | $                        | 21,155            
|                                                                                  |                                                                                          |                          |                   
|Earnings (loss) applicable to common shares                                       |                                                                                          | $                        | (1,096,967        
|                                                                                  |                                                                                          |                          |                   

See
accompanying notes to consolidated financial statements.

F5

---

CREDIT SUISSE FIRST BOSTON (USA), INC. AND SUBSIDIARIES  (Formerly Donaldson, Lufkin & Jenrette, Inc. and Subsidiaries)    Consolidated Statements of Operations (Continued)    (In
thousands, except share and per share data)

|                                             |                                     | Years Ended December 31,               
|-------------------------------------------- | ----------------------------------- | ---------------------------------------
|
|Earnings (loss) applicable to common shares: |                                     |                                        
|                                             | CSFB (USA), Inc.:                   |                                        
|                                             |                                     | Income (loss) before extraordinary item
|                                             |                                     | Extraordinary loss, net of tax         
|                                             |                                     |                                        
|                                             |                                     | Net income (loss)                      
|                                             |                                     |                                        
|                                             | CSFB (USA):                         |                                        
|                                             |                                     | Income (loss) before extraordinary item
|                                             |                                     | Extraordinary loss, net of tax         
|                                             |                                     |                                        
|                                             |                                     | Net income (loss)                      
|                                             |                                     |                                        
|                                             | CSFBdirect                          |                                        
|                                             |                                     |                                        
|Earnings (loss) per common share:            |                                     |                                        
|                                             | CSFB (USA), Inc.Basic and Diluted: |                                        
|                                             |                                     | Income (loss) before extraordinary item
|                                             |                                     | Extraordinary loss, net of tax         
|                                             |                                     |                                        
|                                             |                                     | Net income (loss)                      
|                                             |                                     |                                        
|                                             | CSFB (USA)Basic and Diluted:       |                                        
|                                             |                                     | Income (loss) before extraordinary item
|                                             |                                     | Extraordinary loss, net of tax         
|                                             |                                     |                                        
|                                             |                                     | Net income (loss)                      
|                                             |                                     |                                        
|                                             | CSFBdirect                          |                                        
|                                             |                                     | Basic                                  
|                                             |                                     | Diluted                                
|                                             |                                     |                                        
|Weighted average common shares:              |                                     |                                        
|                                             | CSFB (USA), Inc.                    |                                        
|                                             |                                     | Basic and Diluted                      
|                                             |                                     |                                        
|                                             | CSFB (USA)                          |                                        
|                                             |                                     | Basic and Diluted                      
|                                             |                                     |                                        
|                                             | CSFBdirect                          |                                        
|                                             |                                     | Basic                                  
|                                             |                                     | Diluted                                
|                                             |                                     |                                        

---



See
accompanying notes to consolidated financial statements.

F6

---



CREDIT SUISSE FIRST BOSTON (USA), INC. AND SUBSIDIARIES  (Formerly Donaldson, Lufkin & Jenrette, Inc. and Subsidiaries)        Consolidated Statements of Changes
in Stockholders' Equity        For the Years Ended December 31, 2000, 1999 and 1998  (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, 1997                                 |                                             | $               | 200,000 |                         | $ |                       |   | $               |      |                   | $ | 519,366                                       |   | $     | 1,338,220 
|Net income                                                    |                                             |                 |        |                         |   |                       |   |                 |      |                   |   |                                              |   |       | 370,800   
|Translation adjustment                                        |                                             |                 |        |                         |   |                       |   |                 |      |                   |   |                                              |   |       |          
|                                                              | Total comprehensive income                  |                 |         |                         |   |                        |   |                 |       |                   |   |                                               |   |       |           
|Dividends:                                                    |                                             |                 |         |                         |   |                        |   |                 |       |                   |   |                                               |   |       |           
|                                                              | CSFB (USA) Common Stock ($62,500 per share) |                 |         |                        |   |                        |  |                 |       |                  |   |                                               |  |       |           
|                                                              | Preferred stock ($2.84 per share)           |                 |         |                        |   |                        |  |                 |       |                  |   |                                               |  |       |           
|Issuance of Series B Preferred Stock                          |                                             |                 | 175,000 |                         |   |                       |   |                 |      |                   |   |                                              |   |       |          
|Sale of common stock to AXA Financial and AXA, S.A.           |                                             |                 |        |                         |   |                       |   |                 |      |                   |   | 300,000                                       |   |       |          
|Exercise of stock options                                     |                                             |                 |        |                         |   |                       |   |                 |      |                   |   | 22,500                                        |   |       |          
|Tax benefit on exercise of stock options                      |                                             |                 |        |                         |   |                       |   |                 |      |                   |   | 15,488                                        |   |       |          
|Conversion of restricted stock units                          |                                             |                 |        |                         |   |                       |   |                 |      |                   |   | 25,428                                        |   |       |          
|Tax benefit on distribution of employee stock trust           |                                             |                 |        |                         |   |                       |   |                 |      |                   |   | 8,898                                         |   |       |          
|                                                              |                                             |                 |         |                         |   |                        |   |                 |       |                   |   |                                               |   |       |           
|Balances at December 31, 1998                                 |                                             |                 | 375,000 |                         |   |                       |   |                 |      |                   |   | 891,680                                       |   |       | 1,657,710 
|Net income                                                    |                                             |                 |        |                         |   |                       |   |                 |      |                   |   |                                              |   |       | 600,700   
|Translation adjustment                                        |                                             |                 |        |                         |   |                       |   |                 |      |                   |   |                                              |   |       |          
|                                                              | Total comprehensive income                  |                 |         |                         |   |                        |   |                 |       |                   |   |                                               |   |       |           
|Net proceeds from issuance of CSFBdirectCommon Stock          |                                             |                 |        |                         |   |                       |   |                 | 1,840 |                   |   | 344,751                                       |   |       |          
|Dividends:                                                    |                                             |                 |         |                         |   |                        |   |                 |       |                   |   |                                               |   |       |           
|                                                              | CSFB (USA) Common Stock ($62,500 per share) |                 |         |                        |   |                        |  |                 |       |                  |   |                                               |  |       |           
|                                                              | Preferred stock ($2.82 per share)           |                 |         |                        |   |                        |  |                 |       |                  |   |                                               |  |       |           
|Exercise of stock options                                     |                                             |                 |        |                         |   |                       |   |                 |      |                   |   | 35,443                                        |   |       |          
|Tax benefit on exercise of stock options                      |                                             |                 |        |                         |   |                       |   |                 |      |                   |   | 37,652                                        |   |       |          
|Conversion of restricted stock units                          |                                             |                 |        |                         |   |                       |   |                 |      |                   |   | 13,014                                        |   |       |          
|                                                              |                                             |                 |         |                         |   |                        |   |                 |       |                   |   |                                               |   |       |           
|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 
|                                                              |                                             |                 |         |                         |   |                        |   |                 |       |                   |   |                                               |   |       |           

See accompanying notes to consolidated financial statements.

F7

---



CREDIT SUISSE FIRST BOSTON (USA), INC. AND SUBSIDIARIES  (Formerly Donaldson, Lufkin & Jenrette, Inc. and Subsidiaries)    Consolidated Statements of Cash Flows    For the Years
Ended December 31, 2000, 1999 and 1998

|                                      |                                                                                      | 2000                                                                                            |             | 1999       |             | 1998        |        
|------------------------------------- | ------------------------------------------------------------------------------------ | ----------------------------------------------------------------------------------------------- | ----------- | ---------- | ----------- | ----------- | -------
|
|Cash flows from operating activities: |                                                                                      |                                                                                                 |             |            |             |             |        
|                                      | Net income (loss)                                                                    |                                                                                                 | $           | (1,075,812 | )           | $           | 600,700
|                                      | Adjustments to reconcile net income (loss) to net cash used in operating activities: |                                                                                                 |             |            |             |             |        
|                                      |                                                                                      | Extraordinary loss on early extinguishment of debt                                              |             |            | 16,769      |             |        
|                                      |                                                                                      | Depreciation and amortization                                                                   |             |            | 159,935     |             |        
|                                      |                                                                                      | CSG Share Plan activity                                                                         |             |            | 298,648     |             |        
|                                      |                                                                                      | Shares tendered to employee trust                                                               |             |            | 122,724     |             |        
|                                      |                                                                                      | Deferred taxes                                                                                  |             |            | (496,449    | )           |        
|                                      |                                                                                      | Decrease (increase) in unrealized appreciation of long-term corporate development investments   |             |            | 17,953      |             |        
|                                      |                                                                                      | Foreign currency translation adjustment                                                         |             |            | (9,541      | )           |        
|                                      | (Increase) decrease in operating assets:                                             |                                                                                                 |             |            |             |             |        
|                                      |                                                                                      | Cash and securities segregated for regulatory purposes or deposited with clearing organizations |             |            | (4,772,456  | )           |        
|                                      |                                                                                      | Securities purchased under agreements to resell                                                 |             |            | (2,878,242  | )           |        
|                                      |                                                                                      | Securities borrowed                                                                             |             |            | (46,955,907 | )           |        
|                                      |                                                                                      | Receivables from customers                                                                      |             |            | (1,424,764  | )           |        
|                                      |                                                                                      | Receivables from brokers, dealers and other                                                     |             |            | (3,960,959  | )           |        
|                                      |                                                                                      | Financial instruments owned, at value                                                           |             |            | (30,574,222 | )           |        
|                                      |                                                                                      | Federal income taxes receivable                                                                 |             |            | (71,791     | )           |        
|                                      |                                                                                      | Net deferred tax asset                                                                          |             |            | (703,019    | )           |        
|                                      |                                                                                      | Other assets and deferred amounts                                                               |             |            | (215,977    | )           |        
|                                      | Increase (decrease) in operating liabilities:                                        |                                                                                                 |             |            |             |             |        
|                                      |                                                                                      | Securities sold under agreements to repurchase                                                  |             |            | 2,878,242   |             |        
|                                      |                                                                                      | Securities loaned                                                                               |             |            | 24,056,015  |             |        
|                                      |                                                                                      | Payables to customers                                                                           |             |            | 4,325,906   |             |        
|                                      |                                                                                      | Payables to brokers, dealers and other                                                          |             |            | 9,433,192   |             |        
|                                      |                                                                                      | Financial instruments sold not yet purchased, at value                                          |             |            | 19,672,511  |             |        
|                                      |                                                                                      | Accounts payable and accrued expenses                                                           |             |            | 4,192,620   |             |        
|                                      |                                                                                      | Other liabilities                                                                               |             |            | (11,844     | )           |        
|                                      |                                                                                      |                                                                                                 |             |            |             |             |        
|Net cash used in operating activities |                                                                                      | $                                                                                               | (27,976,468 | )          | $           | (11,864,263 | )      
|                                      |                                                                                      |                                                                                                 |             |            |             |             |        

See
accompanying notes to consolidated financial statements.

F8

---



|                                                                     |                                    | 2000                                                     |                                         | 1999      |             | 1998       |  
|-------------------------------------------------------------------- | ---------------------------------- | -------------------------------------------------------- | --------------------------------------- | --------- | ----------- | ---------- | -
|
|Cash flows from investing activities:                                |                                    |                                                          |                                         |           |             |            |  
|                                                                     | Net (payments for) proceeds from:  |                                                          |                                         |           |             |            |  
|                                                                     |                                    | Note receivable from parent                              |                                         | $         | (3,100,000  | )          | $
|                                                                     |                                    | Transfer of CSFB Corp. from parent                       |                                         |           | 2,537,976   |            |  
|                                                                     |                                    | Acquisition of goodwill, net                             |                                         |           | (262,454    | )          |  
|                                                                     |                                    | Purchases of long-term corporate development investments |                                         |           | (393,592    | )          |  
|                                                                     |                                    | Sales of long-term corporate development investments     |                                         |           | 776,969     |            |  
|                                                                     |                                    | Office facilities                                        |                                         |           | (560,135    | )          |  
|                                                                     |                                    | Other assets                                             |                                         |           | (42,718     | )          |  
|                                                                     |                                    |                                                          |                                         |           |             |            |  
|Net cash used in investing activities                                |                                    |                                                          | (1,043,954                              | )         |             | (1,386,813 | )
|                                                                     |                                    |                                                          |                                         |           |             |            |  
|Cash flows from financing activities:                                |                                    |                                                          |                                         |           |             |            |  
|                                                                     | Net proceeds from (payments for):  |                                                          |                                         |           |             |            |  
|                                                                     |                                    | Short-term financings                                    |                                         |           | 23,519,877  |            |  
|                                                                     |                                    | Issuance (repayments) of:                                |                                         |           |             |            |  
|                                                                     |                                    |                                                          | CSFBdirectCommon Stock                  |           |             |           |  
|                                                                     |                                    |                                                          | Senior notes                            |           |             | 503,781    |  
|                                                                     |                                    |                                                          | Senior secured floating rate notes      |           |             | (295,692   | )
|                                                                     |                                    |                                                          | Subordinated exchange notes             |           |             | (241,769   | )
|                                                                     |                                    |                                                          | Subordinated revolving credit agreement |           |             |           |  
|                                                                     |                                    |                                                          | Subordinated loan agreements            |           |             | 4,150,000  |  
|                                                                     |                                    |                                                          | Global floating rate notes              |           |             | 746        |  
|                                                                     |                                    |                                                          | Medium-term notes                       |           |             | 1,643,652  |  
|                                                                     |                                    |                                                          | Structured notes                        |           |             | 168,889    |  
|                                                                     |                                    |                                                          | Other long-term debt                    |           |             | 2,050      |  
|                                                                     |                                    | Cash dividends                                           |                                         |           | (37,120     | )          |  
|                                                                     |                                    | Dividend of DLJAM to parent                              |                                         |           | (28,473     | )          |  
|                                                                     |                                    | Sale of common stock to AXA Financial and AXA, S.A.      |                                         |           |            |            |  
|                                                                     |                                    | Issuance of Series B preferred stock                     |                                         |           |            |            |  
|                                                                     |                                    | Exercise of stock options                                |                                         |           | 372,328     |            |  
|                                                                     |                                    |                                                          |                                         |           |             |            |  
|Net cash provided by financing activities                            |                                    |                                                          | 29,758,269                              |           |             | 14,222,366 |  
|                                                                     |                                    |                                                          |                                         |           |             |            |  
|Increase in cash and cash equivalents                                |                                    |                                                          | 737,847                                 |           |             | 971,290    |  
|Cash and cash equivalents at beginning of period                     |                                    |                                                          | 2,020,543                               |           |             | 1,049,253  |  
|                                                                     |                                    |                                                          |                                         |           |             |            |  
|Cash and cash equivalents at end of period                           |                                    | $                                                        | 2,758,390                               |           | $           | 2,020,543  |  
|                                                                     |                                    |                                                          |                                         |           |             |            |  
|Supplemental Statement of Cash Flows Information                     |                                    |                                                          |                                         |           |             |            |  
|Supplemental schedule of noncash investing and financing activities: |                                    |                                                          |                                         |           |             |            |  
|                                                                     | Transfer of CSFB Corp. from parent |                                                          |                                         |           |             |            |  
|                                                                     |                                    | Fair value of assets acquired                            |                                         | $         | 168,386,550 |            |  
|                                                                     |                                    | Less: liabilities assumed                                |                                         |           | 165,848,574 |            |  
|                                                                     |                                    |                                                          |                                         |           |             |            |  
|                                                                     | Transfer of CSFB Corp. from parent |                                                          | $                                       | 2,537,976 |             |            |  
|                                                                     |                                    |                                                          |                                         |           |             |            |  

See accompanying notes to consolidated financial statements.

F9

---



CREDIT SUISSE FIRST BOSTON (USA), INC. AND SUBSIDIARIES  (Formerly Donaldson, Lufkin & Jenrette, Inc. and Subsidiaries)        Notes to Consolidated Financial
Statements        December 31, 2000

1.  Merger and Organization

On August 30, 2000, Credit Suisse Group ("CSG"), a corporation organized under the laws of Switzerland, agreed to acquire Donaldson, Lufkin &
Jenrette, Inc. and subsidiaries ("DLJ, Inc.") (the "Acquisition"). Pursuant to a tender offer, a CSG subsidiary purchased all the outstanding shares of DLJ, Inc.'s common stock of
the series designated Donaldson, Lufkin & Jenrette, Inc.DLJ Common Stock for a purchase price of $90 per share. After the shares were tendered, the shares held by AXA, S.A.,
DLJ, Inc.'s ultimate parent at the time, and certain affiliates of AXA, were purchased by the CSG subsidiary. On November 3, 2000 (the "closing date"), DLJ, Inc. became an
indirect wholly-owned subsidiary of CSG. Any unexercised or unvested stock options of the Company as of the closing date were converted into CSG stock options. The Acquisition did not have an effect
on the outstanding shares of CSFBdirecttracking stock, the series formerly designated Donaldson, Lufkin &
JenretteDLJdirectCommon Stock. After the Acquisition, DLJ, Inc. and DLJdirectchanged their names to Credit Suisse First Boston (USA), Inc. and CSFBdirect, respectively. All references in these financial
statements to DLJ, Inc. and DLJdirecthave been changed to CSFB (USA) and CSFBdirect,
respectively. CSFB (USA) and subsidiaries are herein referred to as the Company.

CSG
accounted for the Acquisition using the purchase method of accounting. However, since the Company has significant preferred stock and public debt outstanding, no adjustments of
the historical carrying values of the Company's assets and liabilities to reflect the Acquisition were recorded in the Company's historical 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
connection with the Acquisition, a retention plan has been put in place for certain of the Company's employees. The retention plan provides for grants of CSG shares for future
services and forgiveness of certain employee loans. The CSG shares granted for future services and forgiveness of loans generally vest over a three-year period. The total expense
associated with these items is $1.3 billion, which is being expensed over the vesting period which began as of the closing date. Approximately $100 million has been recorded in the
accompanying consolidated statement of operations related to retention awards for the year ended December 31, 2000.

2.  Transfer of Credit Suisse First Boston Corporation to the Company

On
November 3, 2000, in conjunction with the closing of the Acquisition, the Company's immediate parent, Credit Suisse First Boston, Inc. ("CSFBI" or the "parent"),
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. This was the final step in a series of transfers (collectively, the "Transfer") that was initiated by CSG and the Company on October 6, 2000
with a view to integrating their respective businesses. In connection with the Transfer, CSFB Corp. and certain of its affiliates made an aggregate
cash payment approximating $4.5 billion to the Company and its subsidiaries in exchange for the fair market value of financial instruments. In addition to the foregoing transaction, the Company
has transferred and will continue to transfer certain financial assets and liabilities to CSG-related entities. The consideration received and to be received for such transactions was and will be the
fair market value of the financial assets and liabilities at, and on, the date of transfer. As a

F10

---

result of the Transfer, CSFB Corp. became a direct wholly-owned subsidiary of the Company. Since the transfer of CSFB Corp. was between entities under common control, it has been accounted for at
historical cost in the accompanying consolidated financial statements. Accordingly, operating results of CSFB Corp. have been included in the Company's consolidated financial statements from the date
of the Transfer.

The
following unaudited pro forma consolidated and condensed results of operations are presented as if the transfer of CSFB Corp. had occurred at the beginning of each of the years
ended December 31, 2000 and 1999. These pro forma results are not necessarily indicative of what the actual combined results of operations might have been if this transfer had been effective at
the beginning of the periods presented.

Years Ended December 31,Pro Forma (Unaudited)2000

1999(In millions)Net revenues

$
9,686

$
8,403Net income (loss)

$
(787
)
$
617


3.  Summary of Significant Accounting Policies

The consolidated financial statements include Credit Suisse First Boston (USA), Inc. (formerly Donaldson, Lufkin & Jenrette, Inc.) and its
subsidiaries. All significant intercompany balances and transactions have been eliminated. Prior to the Acquisition by CSG as described in Note 1, the Company was a majority-owned subsidiary of
AXA Financial Inc. ("AXA Financial") and its subsidiaries.

The
Company is a leading, integrated investment and merchant bank serving institutional, corporate, government and individual clients. The Company's businesses include securities
underwriting; sales and trading; investment and merchant banking; financial advisory services; investment research; venture capital; correspondent brokerage services; online, interactive brokerage
services; and derivatives and risk management products.

To
prepare 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.

Substantially
all of the Company's financial assets and liabilities, as well as financial instruments with off-balance sheet risk, are carried at market or fair values or
are carried at amounts that approximate fair value because of their short-term nature, except for mortgage whole loans and senior bank debt, which are carried at the lower of cost or
market. Fair value is estimated at a specific point in time, based on relevant market information or the value of the underlying financial instrument. These estimates do not generally reflect any
premium or discount that could result from offering for sale at one time the Company's entire holdings of a particular financial instrument.

F11

---

Cash equivalents include all demand deposits held in banks and certain highly liquid investments with maturities of 90 days or less, other than those held for sale in the
ordinary course of business.

Securities
sold under agreements to repurchase ("repurchase agreements") and securities purchased under agreements to resell ("resale agreements") are treated as financing
arrangements and are carried at contract amounts that reflect the amounts at which the securities will be subsequently repurchased or resold. Interest on such contract amounts is accrued and is
included in the accompanying consolidated statements of financial condition in receivables from and payables to brokers, dealers and other. Certain repurchase and resale agreements are considered
operating activities for the purposes of the consolidated statements of cash flows. The Company takes possession of the assets purchased under resale agreements and obtains additional collateral when
the market value falls below the contract value. Repurchase and resale agreements are presented net in the consolidated statements of financial condition, if they are with the same counterparty, have
the same maturity date, settle through the same clearing bank, and are subject to master netting agreements.

Securities
borrowed and securities loaned are financing arrangements that are recorded at the amount of cash collateral advanced or received. For securities borrowed, the Company
deposits cash, letters of credit or other collateral with the lender. For securities loaned, the Company receives collateral in cash or other collateral that exceeds the market value of securities
loaned. The Company monitors the market value of securities borrowed and loaned daily and obtains or refunds additional collateral, as necessary.

Investment
banking underwriting revenues and fees, net of syndicate expenses, arising from securities offerings in which the Company acts as an underwriter or agent, are recorded in
underwritings in the consolidated statements of operations. Investment banking revenues from fees earned for providing merger and acquisition and other advisory services are recorded in fees in the
consolidated statements of operations. Investment banking underwriting fees are recorded at the time the underwriting is substantially completed. Commissions are recorded in the consolidated
statements of operations on a settlement date basis and, if significant, adjustments are made to a trade date basis.

Principal
securities transactions are generally recorded on a trade date basis. Trading and investment inventories, including securities not readily marketable and retained interests
from securitizing financial assets, are valued at market, except for a portfolio of mortgage whole loans and senior bank debt, which is based on quoted market prices or estimated fair value as
determined by management through the use of price quotes from brokers or dealers, discounted expected cash flows, or model pricing. Unrealized gains and losses on trading in investment inventories,
retained interests from securitizations, futures, forwards, interest rate swaps and option contracts are reflected in principal transactions-net, in the consolidated statements of
operations. Customer securities and commodities transactions are recorded on a settlement date basis with related commission income and expenses reported on a trade date basis.

Receivables
from and payables to customers include amounts due on cash and margin transactions. For receivables, securities owned by customers are held as collateral totaling
$40.5 billion. Such collateral is not reflected in the consolidated financial statements.

F12

---

U.S. government and agency securities, mortgage-backed securities, options, forward and futures transactions and certain other debt and equity securities are recorded in the
consolidated financial statements on a trade date basis. All other securities are recorded on a settlement date basis and, if significant, adjustments are made to a trade date basis.

Other
than long-term corporate development investments and certain non-investment grade holdings, which are recorded at estimated fair value, and mortgage
whole loans and senior bank debt, which are carried at lower of cost or market, financial instruments owned are carried at market value. Changes in unrealized appreciation (depreciation) arising from
fluctuations in market or fair value or upon realization of security positions are reflected in principal transactions-net, trading revenues, in the consolidated statements of operations.

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; therefore, these investments are carried at estimated fair value. The cost of these investments was
$1.0 billion at year-end 2000 and $1.4 billion at year-end 1999. In 2000, net unrealized appreciation of long-term corporate development investments
decreased $17.9 million. In 1999 and 1998, the increase in net unrealized appreciation amounted to $71.5 million and $8.9 million, respectively. Changes in net unrealized
appreciation arising from changes in fair value or upon realization are reflected in principal transactions-net, investment revenues in the consolidated statements of operations.

Office
facilities are carried at cost and are depreciated on a straight-line basis over the estimated useful life of the related assets, ranging from three to eight years.
Leasehold improvements are amortized over the lesser of the useful life of the improvement or term of the lease. Exchange memberships owned by the Company are included in other assets in the
consolidated statements of financial condition and are carried at cost.

Goodwill
consists primarily of historical amounts related to CSFB Corp. that arose prior to its transfer to the Company by CSFBI. The goodwill is being amortized over a
20-year life through 2015 at a current annual rate of approximately $26.5 million.

Changes
in unrealized gains and losses, as well as realized gains and losses on all derivative instruments (options, forward and futures contracts and swaps), are included in
principal transactions-net, trading revenues, in the consolidated statements of operations. Related offsetting amounts are included in receivables from or payables to brokers, dealers and
other in the consolidated statements of financial condition. Fair value of certain written options includes any deferred unamortized premiums. Such premiums are recognized over the life of the option
contracts on a straight-line basis or are recognized through the change in the fair value of the option in principal transactions-net, trading revenues in the consolidated
statements of operations. Swap transactions entered into for non-trading purposes to modify the interest rate and currency exposure associated with certain long-term debt
issued by the Company are accounted for on an accrual basis. Under the accrual basis, the net amount to be received or paid is accrued as part of interest expense in the consolidated statements of
operations. Cash flows from derivative instruments are included as operating activities in the consolidated statements of cash flows.

F13

---

Assets and liabilities of foreign subsidiaries denominated in foreign currencies are translated at exchange rates prevailing at the date of the consolidated statements of financial
condition. Revenues and expenses are translated at average exchange rates during the period. Gains and losses from translating foreign currency financial statements into U.S. dollars are included as
accumulated other comprehensive income (loss) in stockholders' equity. Gains and losses from foreign currency transactions are included in the consolidated statements of operations.

Prior
to the Acquisition described in Note 1, the Company filed its own U.S. consolidated federal income tax return. After the Acquisition, the Company will be included in a
consolidated federal income tax return and unitary state and local income tax returns filed by the parent. The parent allocates federal, state and local income taxes to its subsidiaries on a separate
return basis.

The
Company accounts for stock-based compensation related to equity-based awards in shares or stock options in accordance with APB Opinion No. 25, "Accounting for Stock Issued
to Employees." Basic and diluted earnings per common share amounts for both classes of the Company's stock are calculated by dividing earnings applicable to common shares (net income less preferred
dividends) by the weighted average common shares outstanding. Basic earnings per share excludes the dilutive effects of stock options, non-vested restricted stock units and convertible
debt. Diluted earnings per share reflect all potentially dilutive securities. Subsequent to the Acquisition by CSG of all of the CSFB (USA) Common Stock, existing shares were canceled and the Company
issued 1,000 shares of common stock to its parent. 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.

In
accordance with SFAS No. 123, "Accounting for Stock-Based Compensation," the Company provides pro forma net income and pro forma earnings per share disclosures for employee
stock option grants as if the fair-value-based method had been applied.

Certain
reclassifications have been made to prior year consolidated financial statements to conform to the 2000 presentation.

4.  Restructuring and Other Merger-Related Costs

Restructuring and other merger-related costs included in the accompanying consolidated statements of operations for the year ended December 31, 2000 are
as follows:

Restructuring
Costs

Merger-Related
Costs

Total(In millions)Compensation and benefits

$
658

$
244

$
902Occupancy and related costs


85





85Technology costs


74





74Professional fees and other


25


18


43$
842

$
262

$
1,104


F14

---

In
connection with the Acquisition, CSFBI established an exit plan (the "Plan") to mandate the major actions to be taken to exit certain businesses and activities, terminate certain
employees, and abandon or sell for salvage certain leasehold improvements, capitalized software and equipment. The exit activities undertaken pursuant to the Plan resulted in the Company and other
subsidiaries of CSFBI incurring certain restructuring and merger-related costs and employee termination benefit payments that have no future economic benefit and that are not associated with
generating future revenue. The implementation of these restructuring initiatives also caused certain related premises and equipment assets to become redundant. All of these amounts were determined in
accordance with the guidelines included in Emerging Issues Task Force 94-3, "Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including
Certain Costs Incurred in a Restructuring)" and SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long Lived Assets to be Disposed Of." These are costs that
are not associated with future revenues and are either incremental or contractual with no economic benefit. None of the amounts included in the restructuring costs represent operating losses or
income. As of December 31, 2000, restructuring costs of $367 million have been paid. All components of these restructuring costs will be funded from working capital and will not require
any incremental funding source. It is expected that the Plan will be fully executed by December 2001.

Merger-related
costs include one-time transactions costs of $100 million related to retention awards as described in Note 1 and $123 million of
compensation cost related to the tendering of shares of the Company's common stock included in the employee trust described in Note 16. The direct and incremental costs of closing the merger
are also included in merger-related costs and primarily reflect legal fees.

5.  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., Investment Banking, Fixed Income, Equity 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% for subsequent periods.

F15

---

6.  Related Party Transactions

Prior to the Acquisition, the Company provided brokerage services including clearance, investment banking and related activities for AXA Financial and certain
of its affiliates. The amounts related to such activities are not significant.

For
the years ended December 31, 2000, 1999 and 1998 dividends on common stock paid or accrued to AXA Financial were $11.1 million, $22.2 million and
$21.7 million, respectively.

In
the normal course of business, CSFB Corp. enters into transactions with affiliated companies. Total assets and total liabilities at December 31, 2000 include
$5.6 billion and $47.7 billion, respectively, resulting from these transactions. Revenues and expenses for the year ended December 31, 2000 include $57.5 million and
$369.8 million, respectively, resulting from these transactions. Included in these
transactions are revenues and expenses resulting from various securities trading, investment banking and financing activities with certain affiliates, as well as fees for administrative services
performed by CSFB Corp. under the terms of a management fee arrangement. Such fees are treated as a reduction of expenses in the consolidated statement of operations.

Pursuant
to an agreement, CSFB Corp. paid at cost, without recourse, to the parent for the right, title and interest in certain assets aggregating $411.6 million at
December 31, 2000.

The
Credit Suisse Group Share Plan (the "Plan") provides for equity based awards to the Company's employees based on Credit Suisse Group registered shares. Pursuant to the Plan,
employees of the Company may be granted, as compensation, stock or other equity based awards. The provisions of the Plan include a provision to deliver Credit Suisse Group registered shares to the
employees as consideration for services performed. To the extent that the parent does not require reimbursement from the Company for these awards, amounts are recorded as paid-in capital.
Amounts contributed by the parent relating to compensation expense for 2000 were $298.6 million. In addition, approximately $173.0 million as of December 31, 2000 related to these
plans remained to be expensed in future periods.

In
conjunction with the Acquisition, CSFBI obtained a $3.1 billion loan from the Company that matures on November 1, 2001 and bears interest at a market rate based on
LIBOR.

7.  Cash and Securities Segregated Under Federal and Other Regulations

In compliance with the Commodities Exchange Act, the Company segregates funds deposited by customers and funds accruing to customers as a result of trades or
contracts. As of December 31, 2000 and 1999, cash and securities aggregating $985.1 million and $122.0 million, respectively, were segregated or secured in separate accounts on
behalf of customers.

In
addition, U.S. Treasury securities with a market value of $3.9 billion as of December 31, 2000 were segregated in a special reserve bank account to benefit customers
as required by Rule 15c3-3 of the Securities and Exchange Commission.

8.  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

F16

---

Liabilities" ("SFAS 140"), a replacement of Statement of Financial Accounting Standard No. 125, "Accounting for Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities" ("SFAS 125"). As of December 31, 2000, the fair market value of assets that the Company has pledged to counterparties was $165.6 billion. These assets consist
primarily of trading securities where the counterparty has the right to re-pledge or sell the security. The Company has also received similar assets as collateral where they have the right
to re-pledge or sell the assets. As of December 31, 2000, the fair market value of the assets received was $155.5 billion. The Company routinely re-pledges or
lends these assets to third parties.

The
remaining 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 is currently evaluating the specific
impact of the remaining provisions of SFAS 140 to be adopted as of March 31, 2001.

Management
believes 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
actual assessment of the impact on the Company's results of operations and financial position will be based on transactions occurring after March 31, 2001, in accordance with SFAS 140.

The
Company enters into various transactions whereby commercial and residential mortgages are sold to qualifying trust or special purpose trusts and securitized. Beneficial interests
in those trusts are sold to investors. At December 31, 2000, the Company did not retain any interest in the securitized assets. The investors and the securitization trusts have no recourse to
the Company's other assets for failure of debtors to pay when due.

During
2000 the Company sold $6.0 billion in residential mortgages and $2.4 billion in commercial mortgage receivables in securtization transactions. Net gains and
losses recognized on these transactions were negligible as the transactions are typically fully hedged.

During
the year the Company had retained interests in securitizations. The value of the retained interests were subject to credit, prepayment and interest rate risks on the
transferred loans. The Company estimates fair value based upon the following assumptions:

|                                               |  | Commercial
Mortgage Loans |  | Residential
Mortgage Loans
|---------------------------------------------- |  | ------------------------- |  | --------------------------
|Weighted-average life (in years)               |  | 2.2 to 2.6                |  | 3.9 to 11.75              
|Prepayment Speed Assumption                    |  | N/A                       |  | 175 to 250 PSA            
|Floating Interest Rate/Cash Flow Discount Rate |  | Libor+/-Speed             |  | 12.12%                    
|Expected credit losses                         |  | 0%                        |  | 0%                        

Expected
credit losses are assumed to be zero as generally the underlying mortgages are secured by real property.

F17

---

9.  Borrowings

Short-term borrowings are generally demand obligations with interest approximating Federal funds rates. 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 December 31, 2000 and 1999, there were no
borrowings secured by Company-owned securities.

Short-term
borrowings and repurchase agreements:

|                                             |  | December 31, |        | Weighted Average
Interest Rates December 31, |  
|-------------------------------------------- |  | ------------ | ------ | -------------------------------------------- | -
|
|
|Securities sold under repurchase agreements  |  | $            | 71,064 |                                              | $
|Bank loans                                   |  | $            | 19,621 |                                              | $
|Borrowings from other financial institutions |  | $            | 1,197  |                                              | $

The
Company has established a $2.0 billion commercial paper program. Obligations issued under this program are exempt from registration under Section 3(a)(3) of the
Securities Act of 1933, as amended (the "Securities Act"). At December 31, 2000, $1.2 billion of commercial paper was outstanding under this program.

Long-term
borrowings:

|                                                                  |                                                      | December 31,
|----------------------------------------------------------------- | ---------------------------------------------------- | ------------
|
|
|Senior notes 5.875%-8.00%, due various dates through 2008         |                                                      | $           
|Medium-term notes 0.62%-7.60%, due various dates through 2016     |                                                      |             
|Senior secured floating rate notes, due 2005                      |                                                      |             
|Global floating rate notes, due 2002                              |                                                      |             
|Subordinated exchange notes, 9.58% due 2003                       |                                                      |             
|Structured borrowings, 6.63%-7.41% due various dates through 2007 |                                                      |             
|Other                                                             |                                                      |             
|                                                                  |                                                      |             
|                                                                  | Subtotal long-term borrowings                        |             
|                                                                  |                                                      |             
|Subordinated Loan Agreements with the Parent:                     |                                                      |             
|                                                                  | Revolving Subordinated Loan Agreements due 2003-2008 |             
|                                                                  | Equity Subordination Agreements due 2005-2008        |             
|                                                                  |                                                      |             
|                                                                  | Subtotal subordinated loan agreements with parent    |             
|                                                                  | Total long-term borrowings                           |             
|                                                                  |                                                      |             
|Current maturities of long-term borrowings                        |                                                      | $           
|                                                                  |                                                      |             

F18

---

The subordinated loan agreements with the parent 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 December 31, 2000 for these borrowings was 7.13%. The fair value of these borrowings approximates the amounts reflected in the consolidated statements of
financial condition.

For
the years ended December 31, 2000, 1999, and 1998, interest paid on all borrowings and financing arrangements was $8.4 billion, $4.6 billion, and
$4.6 billion, respectively. Interest paid on repurchase agreements was $6.2 billion, $3.1 billion and $3.0 billion, for the years ended December 31, 2000, 1999 and
1998, respectively. At December 31, 2000, the Company had entered into interest rate and currency swaps on $4.2 billion of its senior and medium-term notes. Scheduled
maturities of all long-term borrowings are as follows:

December 31,2000

1999(In thousands)2000

$


$
465,9632001


1,485,217


1,033,2392002


1,463,806


1,216,5912003


1,522,929


374,5312004


256,080


272,8392005


3,121,667


793,8242006-2016


3,407,817


1,152,103Total

$
11,257,516

$
5,309,090


2000 Financings:

Included in medium-term notes is a foreign exchange transaction gain of $14.3 million, which is offset by a loss of $14.3 million
included in payable to brokers, dealers and other.

In
anticipation of the transfer of CSFB Corp., the Company retired $225.0 million of 9.58% Subordinated Exchange Notes for a total consideration of $245.4 million, which
includes accrued interest and a premium. As a result of the early redemption of this debt, the Company recorded an after tax loss of $11.7 million as an extraordinary item.

In
April, the Company established a Euro Medium-Term Note program which enables it to issue up to $1.0 billion of notes. During 2000, the Company issued
$890.5 million medium-term notes with various maturity dates through 2005 from this program.

In
February, the Company filed a shelf registration statement with the Securities and Exchange Commission which enables the Company to issue up to $3.1 billion of senior debt,
subordinated debt securities, preferred stock and warrants. In 2000, the Company issued $869.0 million medium-term notes with various maturity dates through 2007 and
$500.0 million of 8% senior notes with various maturity dates through 2005 under this shelf registration statement.

During
2000, $340.0 million of medium-term notes with various maturity dates through 2005 were issued under a $2.0 billion shelf registration statement
established in 1999.

F19

---

At December 31, 2000 no borrowings were outstanding under the Company's $2.8 billion (as amended) credit facility with banks, of which $2.38 billion may be
borrowed on an unsecured basis.

1999 Financings:

The Company established a $2.0 billion shelf registration statement of debt securities or preferred stock. During 1999, the Company issued
$650.0 million 5.875% Senior Notes due 2002 and $970.2 million of Medium-Term Notes with interest rates ranging from 4.995% to 7.42% that mature at various dates through
2008.

The
Company issued $315.0 million of medium-term notes with interest rates ranging from 5.0% to 7.07% that mature at various dates through 2004 from the
$1.0 billion shelf established in 1997.

The
Company purchased $159.0 million of its Senior Secured Floating Rate Notes.

During
1999, the Company amended its $2.8 billion revolving credit facility to reduce the aggregate commitment of banks thereunder to $2.5 billion, of which
$1.9 billion may be borrowed on an unsecured basis. At December 31, 1999, no borrowings were outstanding under this facility.

10.  Income Taxes

Income taxes (benefits) included in the consolidated statements of operations include the following:

December 31, 2000

December 31, 1999

December 31, 1998(In thousands)Current:U.S. Federal

$
18,104

$
398,501

$
128,980Foreign


5,216


4,844


45,701State and local


10,008


81,201


27,076Total current


33,328


484,546


201,757Deferred:U.S. Federal


(589,755
)

(110,095
)

19,019State and local


93,306


(21,651
)

8,924Total deferred


(496,449
)

(131,746
)

27,943Total provision (benefit) for income taxes

$
(463,121
)
$
352,800

$
229,700


The
provision (benefit) for income taxes includes a benefit of approximately $5.05 million, from the early extinguishment of debt, which is shown as an extraordinary item in
the consolidated statement of operations for the year ended December 31, 2000.

F20

---

The following summarizes the difference between the "expected" tax provision (benefit), which is computed by applying the statutory tax rate to income before provision (benefit), for
income taxes and the effective provision (benefit), for income taxes which is computed by using the effective tax rate:

|                                                                 |  | 2000 |          | 1999 |      | 1998 |  
|---------------------------------------------------------------- |  | ---- | -------- | ---- | ---- | ---- | -
|
|
|Computed "expected" tax provision (benefit)                      |  | $    | (538,627 | )    | 35.0 | %    | $
|Non-taxable income and expense items                             |  |      | 8,352    |      | (0.5 | )    |  
|State and local taxes, net of related federal income tax benefit |  |      | 67,154   |      | (4.4 | )    |  
|                                                                 |  |      |          |      |      |      |  
|Provision (benefit) for income taxes                             |  | $    | (463,121 | )    | 30.1 | %    | $
|                                                                 |  |      |          |      |      |      |  

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

2000

1999(In thousands)Deferred tax assets:Inventory

$
55,269

$
2,429Investments


237,093


26,740Other liabilities and accrued expenses


1,296,069


662,638Office facilities


11,190


6,384Net operating loss carryforward


373,102


State and local taxes


82,276


Valuation allowance for state and local taxes


(82,276
)

Deferred tax liabilities:Inventory


(39,721
)

Investments


(74,554
)

(50,478
)Office facilities


(33,609
)

(26,313
)Other


(3,982
)

(11
)Net deferred tax asset

$
1,820,857

$
621,389


Management
has determined that the realization of the recognized net deferred tax asset of $1.8 billion at December 31, 2000 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. Further, due to uncertainty concerning the Company's ability to
generate the necessary amount and mix of state and local taxable income in future periods, the Company has established a valuation allowance against these future benefits in the amount of
$82 million at December 31, 2000.

F21

---

The Company has federal net operating loss carryforwards which, if unutilized, will expire in 2019 and 2020.

In
2000, 1999 and 1998, respectively, the Company paid $100.0 million, $273.8 million and $101.3 million in Federal income taxes, including $5.1 million
and $4.1 million in 2000 and 1998, respectively, of Federal income tax equivalents, to AXA Financial. The U.S. Federal income tax benefit allocated from the parent company amounted to
$0.5 million at December 31, 2000.

11.  Net Capital

The Company's principal wholly-owned subsidiaries, Donaldson, Lufkin & Jenrette Securities Corporation ("DLJSC") and CSFB Corp., are registered
broker-dealers, registered futures commission merchants and member firms of The New York Stock Exchange, Inc. (the "NYSE"). Accordingly, individually they are subject to the minimum net capital
requirements of the Securities and Exchange Commission, NYSE and the Commodities Futures Trading Commission. 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 December 31, 2000 DLJSC's and CSFB Corp.'s net capital of approximately $1.6 billion and
$1.2 billion, respectively, were 17.7 percent and 40.4 percent, respectively, of aggregate debit balances and in excess of the minimum requirement by approximately
$1.4 billion and $1.2 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 United Kingdom 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 December 31, 2000, the Company and its broker-dealer subsidiaries complied with all applicable regulatory capital adequacy requirements.

12.  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 currency swaps to modify the characteristics of periodic interest
payments and foreign currency exposure associated with some of its long-term debt obligations.

F22

---



The Company writes option contracts specifically designed to meet customers' needs. Most of the options do not expose the Company to credit risk since the
Company, not its counterparty, is obligated to perform. At the beginning of the contract period, the Company receives a cash premium. During the contract period, the Company bears the risk of
unfavorable changes in the value of the financial instruments underlying the options ("market risk"). To manage this market risk, the Company purchases or sells cash or derivative financial
instruments on a proprietary basis. Such purchases and sales may include debt and equity securities, forward and futures contracts and options. The counterparties to these purchases and sales are
reviewed to determine whether they are creditworthy. Future cash requirements for options written equal the fair value of the options.

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



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. Forward and futures contracts are treated as
off-balance sheet items. 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.



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.



The notional or contract amounts indicate the extent of the Company's involvement in the derivative instruments noted above. They do not measure the Company's
exposure to market or credit

F23

---

risk and do not represent the future cash requirements of such contracts. The notional (contract) amounts for derivatives outstanding at December 31, 2000 and 1999 are as follows:

2000

1999(In billions)Options written

$
39.2

$
15.1Options purchased

$
35.7

$
7.4Forward contracts purchased

$
83.0

$
35.6Forward contracts sold

$
83.4

$
41.1Futures contracts purchased

$
6.1

$
2.9Futures contracts sold

$
65.7

$
4.3Swaps

$
46.2

$
24.5


The
fair values of derivatives outstanding at December 31, 2000 and 1999 are as follows:

2000

1999Assets

Liabilities

Assets

Liabilities(In millions)Options

$
1,143.0

$
2,122.7

$
519.9

$
1,002.6Forward contracts

$
727.4

$
719.2

$
327.1

$
247.3Futures contracts

$
180.0

$
15.5

$
3.5

$
9.8Swaps

$
943.7

$
868.1

$
256.9

$
240.2


The
average fair values of derivatives for 2000 and 1999 are as follows:

2000

1999Assets

Liabilities

Assets

Liabilities(In millions)Options

$
1,042.8

$
1,595.9

$
169.5

$
444.8Forward contracts

$
931.4

$
911.2

$
329.0

$
312.6Futures contracts

$
139.7

$
57.5

$
10.3

$
7.4Swaps

$
435.4

$
428.0

$
253.3

$
94.3


The
majority of the Company's derivatives are short-term in duration. At December 31, 2000, the notional or contract amounts of derivatives expiring
in future years based on contractual expiration are as follows:

|                            |                  | Less than
One Year |      | One to Three
Years |   | Three to Five
Years |      | Greater than
Five Years |      | Total |  
|--------------------------- | ---------------- | ------------------ | ---- | ------------------ | - | ------------------- | ---- | ----------------------- | ---- | ----- | -
|
|Options written             |                  | $                  | 24.3 |                    | $ | 6.1                 |      | $                       | 5.6  |       | $
|Options purchased           |                  |                    | 18.2 |                    |   | 6.3                 |      |                         | 7.0  |       |  
|Forward contracts purchased |                  |                    | 82.3 |                    |   | 0.7                 |      |                         |     |       |  
|Forward contracts sold      |                  |                    | 82.7 |                    |   | 0.6                 |      |                         | 0.1  |       |  
|Futures contracts purchased |                  |                    | 4.3  |                    |   | 1.0                 |      |                         | 0.8  |       |  
|Futures contracts sold      |                  |                    | 52.9 |                    |   | 10.6                |      |                         | 2.2  |       |  
|Swaps                       |                  |                    | 9.8  |                    |   | 8.7                 |      |                         | 13.2 |       |  
|                            |                  |                    |      |                    |   |                     |      |                         |      |       |  
|                            | Total            |                    | $    | 274.5              |   | $                   | 34.0 |                         | $    | 28.9  |  
|                            |                  |                    |      |                    |   |                     |      |                         |      |       |  
|                            | Percent of total |                    |      | 76.4               | % |                     | 9.5  | %                       |      | 8.0   | %
|                            |                  |                    |      |                    |   |                     |      |                         |      |       |  

F24

---





The Company also enters into interest rate and foreign currency swaps to modify the characteristics of periodic interest payments and foreign currency exposure
associated with some of its long-term debt obligations. At December 31, 2000 and 1999, the notional amount of these interest rate swaps was $4.2 billion and
$3.3 billion, respectively.



In June 1998, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standard ("SFAS") No. 133, Accounting for Derivative Instruments and
Hedging Activities, which, as amended by SFAS No. 137 and SFAS No. 138, is required to be
adopted for financial statements as of January 1, 2001.

The
standard establishes new accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging
activities. It does not change the accounting for derivative instruments held or issued for trading purposes. All derivatives are required to be recognized as assets or liabilities in the statement of
financial condition at fair value. The recognition of the changes in fair value in a derivative instrument depends upon the intended use and designation of the derivative instrument. If certain
conditions are met, entities may elect to designate a derivative instrument as a hedge of exposures to changes in fair values, cash flows, or a net investment in a foreign subsidiary. If the hedged
exposure is a fair value exposure, the gain or loss on the derivative instrument is recognized in current earnings together with the offsetting loss or gain on the hedged item attributable to the risk
being hedged. If the hedged exposure is a cash flow exposure, the effective portion of the gain or loss on the derivative instrument is reported initially in other comprehensive income (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 expects that the adoption of SFAS 133 will increase the volatility of US GAAP earnings and other comprehensive income. In general, the amount of volatility will
vary with the level of derivative activities and market conditions during any period. However, the Company does not foresee a material impact on its financial position or results from operations as a
result of adopting SFAS 133.

13.  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

F25

---

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.

14.  Concentrations of Credit Risk

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

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

F26

---

15.  Trust Securities

In 1996, the Company and its wholly-owned trust, DLJ Capital Trust I (the "Trust"), completed an offering of $200.0 million of the Trust's 8.42%
mandatorily redeemable trust securities. The Trust exists for the sole purpose of issuing trust securities and common securities and investing the proceeds in an equivalent amount of Junior
Subordinated Debentures of the Company. At December 31, 2000 and 1999, the only assets of the Trust were $200.0 million of 8.42% Junior Subordinated Debentures of the Company due 2046.
The Junior Subordinated Debentures are redeemable by the Company, in whole or in part, on or after August 31, 2001. The Trust must also redeem its trust securities having an aggregate
liquidation amount equal to the aggregate principal amount of Junior Subordinated Debentures being redeemed.

To
the extent the Company has made principal and interest payments on the Junior Subordinated Debentures, the Company guarantees payment to the holders of the trust securities issued
by the Trust. The Company has issued a full and unconditional guarantee of the Trust's obligations under the trust securities of the Trust.

16.  Stockholders' Equity

In
connection with the Transfer, the Company issued shares of its common stock to CSFBI in exchange for all of the outstanding shares of capital stock of CSFB Corp. The newly issued
shares were contributed to Diamond Restructuring Corp. ("DRC"), an indirect subsidiary of CSG. On November 3, 2000, DRC was merged into the Company with the Company continuing as the surviving
corporation. In connection with the above, each share of the Company's common stock owned by DRC was canceled, and each share of DRC Common Stock was converted and exchanged for one share of CSFB
(USA) Common Stock, par value $0.10 per share. The capital stock of DRC prior to the merger consisted of 1,000 shares held by a subsidiary of CSFBI. This subsidiary was merged with CSFBI, with CSFBI
continuing as the surviving corporation. As a result, CSFBI holds all 1,000 shares of CSFB (USA) Common Stock. As a result of this change in capital structure, all share and per share amounts have
been adjusted retroactively to reflect this change.

In
November 2000 the Company transferred DLJ Asset Management Group ("DLJAMG") to CSFBI in the form of a dividend. The dividend was based on the net equity of the transferred
business on the closing date. The gross assets and liabilities of DLJAMG were not significant.

In
1999, the Company issued, in an initial public offering, 18.4 million shares of Tracking Stock. The shares of Tracking Stock have no voting rights, except in certain limited
circumstances. Net proceeds from the offering amounted to $346.6 million.

In
July 1998, the Emerging Issues Task Force ("EITF") reached a consensus on EITF Issue 97-14, "Accounting for Deferred Compensation Arrangements Where Amounts
Earned are Held in a Rabbi Trust and Invested" ("EITF 97-14"). Under EITF 97-14, assets of the trust ("employee trust") should be consolidated with those of the employer and
the value of the employer's stock held in the employee trust should be classified in stockholders' equity in a manner similar to Treasury Stock. The Company adopted EITF 97-14 as of
September 30, 1998. In connection with the acquisition described in Note 1, 1.6 million shares of the Company's stock held in the employee trust were tendered. As a result, the
Company incurred a merger-related expense of approximately $123 million representing the difference between the employee trust's original cost basis and the tender price.

F27

---

The Company has issued 4.0 million shares of Fixed/Adjustable Rate Cumulative Preferred Stock, Series A, with a liquidation preference of $50.00 per share
($200.0 million aggregate liquidation value). Dividends on the preferred stock are cumulative and payable quarterly at 5.94% per annum through
November 30, 2001. Thereafter, the dividend rate will be adjusted, based on various indices, to be at least 6.44% but less than 12.44%. The preferred stock is redeemable, in whole or in part,
at the option of the Company, on or after November 30, 2001. At December 31, 2000 and 1999, 4.0 million shares of such preferred stock were authorized, issued and outstanding.

The
Company has also issued 3.5 million shares of Fixed/Adjustable Rate Cumulative Preferred Stock, Series B, with a liquidation preference of $50.00 per share
($175.0 million aggregate liquidation value). Dividends on the preferred stock are cumulative and payable quarterly at 5.30% per annum through January 2003, subject to adjustment in
later years. The preferred stock is redeemable, in whole or in part, at the option of the Company, on or after January 15, 2003. At December 31, 2000 and 1999, 3.5 million shares
of such preferred stock were authorized, issued and outstanding.

17.  Earnings Per Share

As a result of the Acquisition, CSG and its subsidiaries 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) (the "Shares"). Subsequent to the Acquisition by
CSG of all of the CSFB (USA) Common Stock of the Company, existing shares were canceled and the Company issued 1,000 shares of common stock to its parent. 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. Earnings per share for CSFBdirectfor periods prior to the closing date of the initial public offering of the Tracking Stock are
not presented.

For
CSFB (USA), Inc., consolidated earnings per share are calculated by dividing earnings applicable to consolidated common shares outstanding by the weighted average amount of the
consolidated common shares outstanding, as adjusted for the change in the capital structure of CSFB (USA), Inc. described above. Basic and diluted earnings per share are the same for all periods
presented.

F28

---

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

|                                                                    |                        | December 31, 2000 |            | December 31, 1999 |            | December 31, 1998
|------------------------------------------------------------------- | ---------------------- | ----------------- | ---------- | ----------------- | ---------- | -----------------
|
|
|CSFB (USA), Inc.                                                    |                        |                   |            |                   |            |                  
|Basic Earnings (loss) applicable to Common Shares                   |                        | $                 | (1,096,967 | )                 | 1,000      |                  
|Effect of Dilutive Securities                                       |                        |                   |           |                   |           |                  
|                                                                    |                        |                   |            |                   |            |                  
|Diluted Earnings (loss) applicable to Common Shares                 |                        | $                 | (1,096,967 | )                 | 1,000      |                  
|                                                                    |                        |                   |            |                   |            |                  
|CSFB (USA) Common Stock                                             |                        |                   |            |                   |            |                  
|Basic Earnings applicable to Common Shares                          |                        | $                 | (1,095,548 | )                 | 1,000      |                  
|Effect of Dilutive Securities:                                      |                        |                   |            |                   |            |                  
|                                                                    | Restricted stock units |                   |            |                  |            |                 
|                                                                    | Stock options          |                   |            |                  |            |                 
|                                                                    |                        |                   |            |                   |            |                  
|Diluted Earnings applicable to Common Shares                        |                        | $                 | (1,095,548 | )                 | 1,000      |                  
|                                                                    |                        |                   |            |                   |            |                  
|CSFBdirectCommon Stock                                              |                        |                   |            |                   |            |                  
|Basic Earnings (loss) applicable to Common Shares-Basic and Diluted |                        | $                 | (1,419     | )                 | 18,400,000 |                  
|Effect of Dilutive Securities:                                      |                        |                   |            |                   |            |                  
|                                                                    | Stock options          |                   |            |                  |            |                 
|                                                                    |                        |                   |            |                   |            |                  
|Diluted Earnings (loss) applicable to Common Shares                 |                        | $                 | (1,419     | )                 | 18,400,000 |                  
|                                                                    |                        |                   |            |                   |            |                  

18. Employee Compensation and Benefit Plans

1996 Incentive Compensation Plan

Awards under the 1996 Incentive Compensation Plan (the "Incentive Plan") were determined by the Compensation and Management Committee of the Board of Directors
(the "Compensation Committee"). The Incentive Plan creates short-term and long-term award pools for key employees of the Company. Short-term award pools are for a
performance period up to two years and are based on 10% of pre-tax earnings, as defined. Long-term award pools are for a performance period of three to ten years and are based
on a percentage of pre-tax earnings that varies with the Company's average return on common equity during the performance period. Each unit granted under the Plan is equal to a percentage
interest in the long-term award pool. The units vest at the rate of 331/3% per year during the performance period. For the years ended December 31, 2000, 1999 and
1998, the amount charged to expense was $235.9 million, $266.4 million and $165.5 million, respectively.

1995 Restricted Stock Unit Plan

In 1995, the Company adopted the 1995 Restricted Stock Unit Plan (the "RSU Plan"). Each RSU granted under the RSU Plan represents the right to receive a share
of common stock under certain

F29

---

circumstances. These RSUs vested annually in specified proportions from February 1997 through February 2000. Under the Plan, 10,358,294 units, 41 units restated to give effect to the
Recapitalization (defined below), were granted. All RSUs were converted to common stock prior to the Acquisition described in Note 1.

Stock Option Plans

In 1995, the Company adopted the 1995 and 1996 Stock Option Plans. Under the 1995 Stock Option Plan (the "1995 Plan"), options were granted to certain
employees to purchase an aggregate of 18,337,356 shares of common stock (the maximum allowable under the 1995 Plan) with an exercise price of $13.50. The options vested in equal installments in
February 1997 and February 1998, and were exercisable for up to ten years from the date of the grant. Under the 1996 Stock Option Plan (the "1996 Plan") options were available to
purchase a maximum of 17,579,702 shares of common stock, exclusive of forfeitures from the 1995 Plan. The options were exercisable for up to ten years from the date of grant, vested in four equal
annual installments starting one year after the date of grant. In 1996, the Company adopted the Non-Employee Directors Stock Plan (the "Stock Plan") to provide equity compensation to the
Company's non-employee directors. Under the Stock Plan, stock options are granted at a price equal to the fair value of the stock at the date of grant. The options were exercisable for up
to ten years from the date of grant and vested in four equal annual installments starting one year from the date of grant.

The
above information is presented based upon the shares available prior to the recapitalization of the Company following the Acquisition described in Note 1, in which existing
shares of voting common stock were canceled and 1,000 shares of voting common stock were issued by the Company to its parent, CSFBI (the "Recapitalization"). Giving effect to the Recapitalization,
there were 73 options available for grant with an exercise price of $3.4 million per share under the 1995 Plan and 70 options available for grant under the 1996 Plan. All options granted under
the plans described above were either exercised or converted to CSG options in connection with the Acquisition described in Note 1.

Under
the Stock Plan, 200,000 shares were issuable (one share restated to give effect to the Recapitalization). Any shares issued under the Stock Plan reduced the number of shares
issuable under the 1996 Plan. All options granted under the plans described above were either exercised or converted to CSG options in connection with the Acquisition described in Note 1.

In
May 1999, with the issuance of the Tracking Stock, the Company adopted the 1999 DLJdirectIncentive
Compensation Plan (the "CSFBdirectIncentive Plan"). The Compensation Committee determines awards under the
CSFBdirectIncentive Plan. Under this plan, stock options on
CSFBdirectstock are granted at a price equal to the fair value of the stock at the date of grant. The options are exercisable for up to
ten years from the date of grant and vest in four equal annual installments starting one year from the date of grant. Under the
CSFBdirectIncentive Plan, 10,000,000 shares are issuable.

F30

---

The following summarizes the historical stock option activity for all plans:

|                                   |  | Options     |   | Weighted Average
Exercise Price
|---------------------------------- |  | ----------- | - | -------------------------------
|CSFB (USA) Common Stock:           |  |             |   |                                
|Outstanding at December 31, 1997   |  | 28,262,096  |   | $                              
|                                   |  |             |   |                                
|Granted                            |  | 1,508,489   |   | $                              
|Forfeited                          |  | (60,000     | ) | $                              
|Exercised                          |  | (1,458,366  | ) | $                              
|                                   |  |             |   |                                
|Outstanding at December 31, 1998   |  | 28,252,219  |   | $                              
|                                   |  |             |   |                                
|Granted                            |  | 4,788,175   |   | $                              
|Forfeited                          |  | (78,500     | ) | $                              
|Exercised                          |  | (2,196,153  | ) | $                              
|                                   |  |             |   |                                
|Outstanding at December 31, 1999   |  | 30,765,741  |   | $                              
|                                   |  |             |   |                                
|Granted                            |  | 4,075,458   |   | $                              
|Forfeited                          |  | (704,144    | ) | $                              
|Exercised                          |  | (19,041,800 | ) | $                              
|Converted to options on CSG shares |  | (15,095,255 | ) | $                              
|                                   |  |             |   |                                
|Outstanding at December 31, 2000   |  |            |   | $                              
|                                   |  |             |   |                                

The
above information is based on shares outstanding prior to the Recapitalization, which is deemed more meaningful. Giving effect to the Recapitalization, the restated historical
stock option activity is as follows: There were 113 options outstanding at December 31, 1997 with a weighted average exercise price of $4.4 million per share. During 1998 there were six
options granted with a weighted average exercise price per share of $9.6 million, less than one forfeited with a weighted average exercise price of $4.3 million per share, and six
options exercised at a weighted average exercise price of $3.7 million per share. The total outstanding at December 31, 1998 was 113 options with a weighted average exercise price of
$4.8 million per share.

During
1999, 19 options were granted with a weighted average exercise price of $11.3 million per share, less than one option forfeited with a weighted average exercise price of
$8.7 million per share, and nine options exercised at a weighted average exercise price of $4.0 million per share. The total number of options outstanding at December 31, 1999 was
123 with a weighted average exercise price of $5.8 million.

During
2000, 18 options were granted at a weighted average exercise price of $11.6 million per share, four forfeited with a weighted average exercise price of
$10.4 million per share, 76 options exercised at a weighted average exercise price of $4.8 million per share and 60 options that were converted to options on CSG shares at a weighted
average exercise price of $22.5 million per share.

At
December 31, 1998, there were 21,378,671 options on an historical basis (86 options restated to give effect to the Recapitalization) on CSFB (USA) Common Stock exercisable
at historical prices ranging from $13.50 to $38.00 ($3.4 million to $9.5 million restated to give effect to the Recapitalization). The weighted average exercise price of these options
was $15.05 ($3.8 million restated to give effect to the Recapitalization). At December 31, 1999, 20,568,365 historical options (82 shares restated to give effect to the Recapitalization)
on CSFB (USA) Common Stock were exercisable

F31

---

at historical prices ranging from $13.50 to $52.99 ($3.4 million to $13.2 million restated to give effect to the Recapitalization). The weighted average exercise price of such options
was $16.62 ($4.2 million restated to give effect to the Recapitalization). At December 31, 2000, there were no CSFB (USA) options outstanding since any remaining options at the date of
the Acquisition were converted to options on CSG shares at the fair value as defined in the merger agreement with CSG.

CSFBdirectCommon Stock:Outstanding at December 31, 1998



$
Granted

6,303,550

$
19.76Forfeited

(106,500
)
$
20.00Exercised




Outstanding at December 31, 1999

6,197,050

$
19.76CSFBdirectCommon Stock:Granted

3,975,850

$
8.59Forfeited

(425,329
)
$
16.20Exercised




Outstanding at December 31, 2000

9,747,571

$
15.37


The
following additional information applies to CSFBdirectCommon Stock:

|                        |  | Exercise Prices |             | Number Outstanding |           | Weighted Average
Exercise Price |   | Weighted Average
Remaining Life (Years)
|----------------------- |  | --------------- | ----------- | ------------------ | --------- | ------------------------------- | - | ---------------------------------------
|CSFBdirectCommon Stock: |  | $               | 5.06-7.94   |                    | 1,131,125 |                                 | $ | 5.92                                   
|                        |  | $               | 7.95-11.00  |                    | 2,718,279 |                                 |   | 15.60                                  
|                        |  | $               | 11.01-14.13 |                    | 193,750   |                                 |   | 14.09                                  
|                        |  | $               | 14.14-20.00 |                    | 5,704,417 |                                 |   | 20.00                                  
|                        |  |                 |             |                    |           |                                 |   |                                        
|Total                   |  |                 |             |                    | 9,747,571 |                                 | $ | 15.37                                  
|                        |  |                 |             |                    |           |                                 |   |                                        

At
December 31, 1999, no options on CSFBdirectcommon stock were excercisable. At December 31, 2000, 2,061,049 options on
CSFBdirectCommon Stock were exercisable at prices ranging from $9.56-$20.00. The weighted average exercise price of such options was
$16.89.

The
Company accounts for its stock option plans in accordance with APB Opinion No. 25 and, accordingly, does not recognize any compensation cost associated with such plans in
the consolidated financial statements. If the Company had calculated compensation cost under SFAS No. 123 (based on

F32

---

the fair value of options at the grant date), the Company would have reported the following net earnings applicable to common shares and earnings per common share:

|                                                |  |             |  | CSFB (USA), Inc. |            | CSFB (USA) |   | CSFBdirect | 
|----------------------------------------------- |  | ----------- |  | ---------------- | ---------- | ---------- | - | ---------- | 
|
|
|Net earnings (loss) applicable to common shares |  | As reported |  | $                | (1,096,967 | )          | $ | 579,520    | 
|                                                |  | Pro forma   |  | $                | (1,160,175 | )          | $ | 539,738    | 
|Basic earnings (loss) per common share          |  | As reported |  | $                | (1,096,967 | )          | $ | 579,520    | 
|                                                |  | Pro forma   |  | $                | (1,160,175 | )          | $ | 539,738    | 
|Diluted earnings (loss) per common share        |  | As reported |  | $                | (1,096,967 | )          | $ | 579,520    | 
|                                                |  | Pro forma   |  | $                | (1,160,175 | )          | $ | 539,738    | 

For the purpose of computing the pro forma amounts indicated above, the fair value of each option on the date of grant is estimated using the
Black-Scholes option-pricing model. The weighted average assumptions used in the model are as follows:

|                                                              |  | CSFB (USA) |           | CSFBdirect |  
|------------------------------------------------------------- |  | ---------- | --------- | ---------- | -
|
|Expected dividend yield                                       |  |            | 0.54      | %          |  
|Expected stock volatility                                     |  |            | 36        | %          |  
|Risk-free interest rates                                      |  |            | 6.68      | %          |  
|Expected life (in years)                                      |  |            | 5         |            |  
|Fair value per share of options (historical)                  |  | $          | 18.78     |            | $
|Fair value per share-
Restated effect of the Recapitalization |  | $          | 4,695,000 |            | $

All
computations of basic and diluted earnings per share for the CSFB (USA) Common Stock have been adjusted retroactively for all periods presented to reflect the
Recapitalization. Basic and diluted earnings per share are the same for all periods presented.

Other Plans

The Company merged its defined contribution employee benefit plan into CSFBI's plan ("401K Plan") in December 2000, which covers the Company's domestic
full-time and part-time employees. Company contributions to this plan are made in accordance with the underlying 401K Plan documents and were $8.7 million,
$10.4 million and $9.6 million for 2000, 1999 and 1998, respectively.

Key
employees participate in the Credit Suisse Group International Share Plan, which primarily provides for the grant or sale of equity based awards based on, and ultimately settled
with, shares of Credit Suisse Group. Such awards consist of incentive awards granted as part of annual compensation or retention awards that are considered compensation in future periods.

CSFB
Corp. together with certain of its affiliates participates in a non-contributory defined benefit pension plan ("Qualified Plan"). In addition, CSFB Corp. together
with certain of its affiliates participates in a non-contributory, non-qualified, unfunded plan ("Supplemental Plan"), which is designed to provide benefits to plan
participants whose benefits under the Qualified Plan may be limited by tax regulations. Benefits under these pension plans are based on years of service and employees' compensation. Contributions to
the Qualified Plan are made to the extent that such amounts are deductible for federal income tax purposes.

F33

---

CSFB Corp., with certain of its affiliates, provides certain unfunded health care benefits for retired employees. Employees hired by CSFB Corp. prior to July 1, 1998 become
eligible for these benefits if they meet minimum age and service requirements and are eligible for retirement benefits. CSFB Corp. has the right to modify or terminate these benefits. At
December 31, 2000, the aggregate accumulated postretirement benefit obligation was $37.2 million.

The
following table sets forth the funded status related to CSFB Corp. for the period November 3, through December 31, 2000, for the Qualified and Other Plans:

Qualified

OtherChange in Benefit ObligationBenefit obligation acquired at beginning of period

$
342,035

$
52,773Service cost


3,347


273Interest cost


3,783


609Expected plan participants contributions





18Benefits paid


(904
)

(381
)Benefit obligation at end of period

$
348,261

$
53,292Change in Plan AssetsFair value of assets at beginning of period

$
389,342

$
Actual return on plan assets


(23,008
)

Employer contributions





38Benefits paid


(904
)

(38
)Fair value of assets at end of period

$
365,430

$
Funded StatusFunded status

$
17,169

$
(53,292
)Unrecognized net actuarial (gain)/loss


27,966


Prepaid/(accrued) benefit cost

$
45,135

$
(53,292
)Weighted Average AssumptionsDiscount rate


7.50
%

7.50
%Expected rate of return on plan assets


9.00
%

N/ARate of compensation increase


5.50
%

5.50
%Components of Net Periodic Benefit CostService cost

$
3,347


273Interest cost


3,783


609Expected return on plan assets


(4,958
)

Net periodic benefit cost

$
2,172

$
882


The
assumptions used in determining the accumulated postretirement benefit obligation and net periodic postretirement cost for 2000 were a discount rate of 7.50%, and
health care trend rates ranging from 6.50% in 2001 for employees under age 65 and 6.10% in 2001 for employees who are age 65 and above to 5.25% in 2003 for both groups. The weighted average
compensation increase was 5.50% for the year ended December 31, 2000. CSFB Corp. has elected to amortize the transition obligation (the cumulative actuarial present value of postretirement
benefits at the point of adoption) over a 20-year period.

F34

---

Assumed health care cost trend rates have a significant effect on the amounts reported for the health care benefits. A one-percentage point change in assumed health care
cost trend rates would have the following effects:

1% Increase

1% DecreaseEffect on benefit obligation

$
5,544

$
(4,886
)Effect on total of service and interest costs


596


(596
)


Certain
key employees of the Company also participate in the following deferred compensation arrangements: equity investments in selected merchant banking activities of the Company
funded by deferred compensation and leverage provided by the Company; non-qualified deferred compensation plans that include managed investments; and other non-qualified plans
that are funded by the Company with insurance contracts. The plans' investments, including the leverage factor, and the amounts accrued by the Company under the plans are both included in the
consolidated statements of financial condition. These employee-related assets amounted to $952.2 million and $937.0 million, respectively, at December 31, 2000 and 1999 and are
included in other assets and deferred amounts in the consolidated statement of financial condition. Related liabilities for deferred compensation amounted to $585.9 million and
$492.2 million, respectively, at December 31, 2000 and 1999 and are included in other liabilities in the consolidated statement of financial condition. Gains and losses on these assets
and liabilities are recorded in compensation expense and other income.

19. Leases, Commitments and Contingent Liabilities

The
Company leases office space and equipment under cancelable and non-cancelable lease agreements that expire on various dates through 2021. Rent expense for office space
and equipment with lease terms in excess of one year was $228.6 million, $157.7 million and $115.6 million for the years ended December 31, 2000, 1999, and 1998,
respectively. Sublease revenue was $0.1 million for each of the years ended December 31, 2000, 1999 and 1998, respectively.

At
December 31, 2000, non-cancelable leases in excess of one year, excluding sublease revenue, escalation and renewal options had the following minimum lease
commitments:

Period

(In thousands)2001

$
235,8582002


230,6352003


231,1062004


201,1572005


198,0782006-2021


2,155,081Total

$
3,251,915


In
February 2001 the Company assigned its interest in substantially all leases of its former headquarters and recorded approximately $163 million as pre-tax
income in such month.

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 December 31, 2000 will have no material effect on the consolidated financial statements.

F35

---

The Company has issued letters of credit for which it is contingently liable for $1.0 billion and $367.5 million at December 31, 2000 and 1999, 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
December 31, 2000, unfunded senior bank loan commitments outstanding were $334.7 million.

At
December 31, 2000, the Company has commitments of approximately $1.6 billion to invest on a side-by-side basis with merchant banking
partnerships.

20. Industry Segment and Geographic Data

The
Company operates and manages its businesses through four operating segments: Investment Banking, Equity, 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 of the Company by CSG, the Company changed its method of allocation of underwriting revenues and related expenses to operating segments to conform
to the CSFB methodology. Accordingly, segment data for 1998 and 1999 have 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 restructuring and other merger-related costs to its
segments since none of these costs represent normal operating costs. Instead, restructuring and other merger-related costs are

F36

---

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.

|                                   |  | IBD |         | Equity |   | FID      |   | Financial
Services |           | Elimination
& Other |   | Total    | 
|---------------------------------- |  | --- | ------- | ------ | - | -------- | - | ------------------ | --------- | ------------------- | - | -------- | 
|
|December 31, 2000:                 |  |     |         |        |   |          |   |                    |           |                     |   |          | 
|Net revenues from external sources |  | $   | 1,961.0 |        | $ | 1,388.4  |   | $                  | 222.9     |                     | $ | 1,768.5  | 
|                                   |  |     |         |        |   |          |   |                    |           |                     |   |          | 
|Net intersegment revenues          |  |     |        |        |   | (0.1     | ) |                    | (0.1      | )                   |   | 39.7     | 
|                                   |  |     |         |        |   |          |   |                    |           |                     |   |          | 
|Depreciation and amortization      |  |     | 26.1    |        |   | 23.1     |   |                    | 20.6      |                     |   | 57.6     | 
|                                   |  |     |         |        |   |          |   |                    |           |                     |   |          | 
|Net interest revenue               |  |     | (42.6   | )      |   | (6.2     | ) |                    | 192.3     |                     |   | 405.3    | 
|                                   |  |     |         |        |   |          |   |                    |           |                     |   |          | 
|Income (loss) before income taxes  |  | $   | 15.9    |        | $ | (15.7    | ) | $                  | (326.3    | )                   | $ | 389.6    | 
|                                   |  |     |         |        |   |          |   |                    |           |                     |   |          | 
|Segment assets                     |  | $   | 1,832.2 |        | $ | 52,548.2 |   | $                  | 130,723.2 |                     | $ | 22,347.1 | 
|                                   |  |     |         |        |   |          |   |                    |           |                     |   |          | 
|Expenditures for long-lived assets |  | $   | 64.7    |        | $ | 44.4     |   | $                  | 26.6      |                     | $ | 184.0    | 
|                                   |  |     |         |        |   |          |   |                    |           |                     |   |          | 
|December 31, 1999:                 |  |     |         |        |   |          |   |                    |           |                     |   |          | 
|Net revenues from external sources |  | $   | 1,901.9 |        | $ | 990.7    |   | $                  | 725.2     |                     | $ | 1,377.1  | 
|                                   |  |     |         |        |   |          |   |                    |           |                     |   |          | 
|Net intersegment revenues          |  |     |        |        |   | (8.8     | ) |                    |          |                     |   | 121.9    | 
|                                   |  |     |         |        |   |          |   |                    |           |                     |   |          | 
|Depreciation and amortization      |  |     | 18.5    |        |   | 16.7     |   |                    | 15.2      |                     |   | 42.6     | 
|                                   |  |     |         |        |   |          |   |                    |           |                     |   |          | 
|Net interest revenue               |  |     | (0.6    | )      |   | 12.9     |   |                    | 161.7     |                     |   | 284.3    | 
|                                   |  |     |         |        |   |          |   |                    |           |                     |   |          | 
|Income (loss) before income taxes  |  | $   | 467.9   |        | $ | 81.3     |   | $                  | 274.7     |                     | $ | 301.7    | 
|                                   |  |     |         |        |   |          |   |                    |           |                     |   |          | 
|Segment assets                     |  | $   | 2,273.2 |        | $ | 5,325.5  |   | $                  | 74,884.7  |                     | $ | 30,586.4 | 
|                                   |  |     |         |        |   |          |   |                    |           |                     |   |          | 
|Expenditures for long-lived assets |  | $   | 23.8    |        | $ | 39.8     |   | $                  | 15.6      |                     | $ | 113.5    | 
|                                   |  |     |         |        |   |          |   |                    |           |                     |   |          | 
|December 31, 1998:                 |  |     |         |        |   |          |   |                    |           |                     |   |          | 
|Net revenues from external sources |  | $   | 1,485.6 |        | $ | 665.1    |   | $                  | 465.6     |                     | $ | 988.2    | 
|                                   |  |     |         |        |   |          |   |                    |           |                     |   |          | 
|Net intersegment revenues          |  |     |        |        |   | (4.8     | ) |                    | 0.9       |                     |   | 54.2     | 
|                                   |  |     |         |        |   |          |   |                    |           |                     |   |          | 
|Depreciation and amortization      |  |     | 16.3    |        |   | 12.1     |   |                    | 15.2      |                     |   | 31.8     | 
|                                   |  |     |         |        |   |          |   |                    |           |                     |   |          | 
|Net interest revenue               |  |     | (1.2    | )      |   | 17.6     |   |                    | 120.5     |                     |   | 215.2    | 
|                                   |  |     |         |        |   |          |   |                    |           |                     |   |          | 
|Income before income taxes         |  | $   | 413.2   |        | $ | 46.5     |   | $                  | 135.9     |                     | $ | 194.8    | 
|                                   |  |     |         |        |   |          |   |                    |           |                     |   |          | 
|Segment assets                     |  | $   | 1,132.0 |        | $ | 2,694.9  |   | $                  | 45,683.7  |                     | $ | 19,925.0 | 
|                                   |  |     |         |        |   |          |   |                    |           |                     |   |          | 
|Expenditures for long lived assets |  | $   | 36.4    |        | $ | 18.9     |   | $                  | 8.0       |                     | $ | 77.3     | 
|                                   |  |     |         |        |   |          |   |                    |           |                     |   |          | 

F37

---

The following is a reconciliation of the Company's reported income (loss) before provision (benefit) for income taxes to the Company's
consolidated totals:

|                                                           |                                           | December 31,                                                    |  
|---------------------------------------------------------- | ----------------------------------------- | --------------------------------------------------------------- | -
|
|
|Revenues:                                                  |                                           |                                                                 |  
|                                                           | Total net revenues for reported segments  |                                                                 | $
|                                                           | All other revenues                        |                                                                 |  
|                                                           | Consolidation/elimination (1)             |                                                                 |  
|                                                           |                                           |                                                                 |  
|                                                           |                                           | Total consolidated net revenues                                 |  
|                                                           |                                           |                                                                 |  
|Income (loss) before provision (benefit) for income taxes: |                                           |                                                                 |  
|                                                           | Total income (loss) for reported segments |                                                                 | $
|                                                           | All other income (losses)                 |                                                                 |  
|                                                           | Consolidation/elimination (1)             |                                                                 |  
|                                                           |                                           |                                                                 |  
|                                                           |                                           | Total income (loss) before provision (benefit) for income taxes |  
|                                                           |                                           |                                                                 |  

|                |                                    | December 31,        
|--------------- | ---------------------------------- | --------------------
|
|
|Segment assets: |                                    |                     
|                | Total assets for reported segments |                     
|                | All other assets                   |                     
|                | Consolidation/elimination (1)      |                     
|                |                                    |                     
|                |                                    | Total segment assets
|                |                                    |                     

---

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
following are net revenues by geographic region:

|              |       | December 31,
|------------- | ----- | ------------
|
|
|United States |       | $           
|Foreign       |       |             
|              |       |             
|              | Total |             
|              |       |             

F38

---

The following are long-lived assets by geographic region:

December 31,2000

1999

1998(In millions)United States

$
1,140.8

$
463.7

$
384.7Foreign


184.8


170.3


128.0Total

$
1,325.6

$
634.0

$
512.7


21. Legal Proceedings

The Company is involved in a number of judicial, regulatory and arbitration proceedings (including those described below and actions that have been separately
described in previous filings) concerning matters arising in connection with the conduct of its businesses. Some of the actions have been brought on behalf of various classes of claimants and seek
damages of material and indeterminate amounts. The Company believes, based on currently available information and advice of counsel, that the results of such proceedings, in the aggregate, will not
have a material adverse effect on its financial condition, but might be material to operating results for any particular period, depending, in part, upon the operating results for such period.

In
October 1995, DLJSC was named as a defendant in a purported class action filed in a Texas State Court on behalf of the holders of $550 million principal amount of
subordinated redeemable discount debentures of National Gypsum Corporation ("NGC") canceled in connection with a Chapter 11 plan of reorganization for NGC consummated in July 1993. The
State Court named plaintiff also filed an
adversary proceeding in the U.S. Bankruptcy Court for the Northern District of Texas seeking a declaratory judgment that the confirmed NGC plan of reorganization does not bar the class action claims.
The two actions arise out of DLJSC's activities as financial advisor to NGC in the course of NGC's Chapter 11 reorganization proceedings. Subsequent to the consummation of NGC's plan of
reorganization, NGC's shares traded for values substantially in excess of, and in 1995 NGC was acquired for a value substantially in excess of, the values upon which NGC's plan of reorganization was
based.  The class action complaint alleges that the plan of reorganization submitted by NGC was based upon projections by NGC and DLJSC which intentionally understated forecasts, and
provided misleading and incorrect information to hide NGC's true value and that defendants breached their fiduciary duties by, among other things, providing false, misleading or incomplete information
to deliberately understate the value of NGC. The class action complaint seeks compensatory and punitive damages purportedly sustained by the class. On October 10, 1997 DLJSC and others were
named as defendants in a new adversary proceeding in the Bankruptcy Court brought by the NGC Settlement Trust, an entity created by the NGC plan of reorganization to deal with asbestos-related claims.
The Trust's allegations are substantially similar to the claims in the State Court action. On January 21, 1998, the Bankruptcy Court ruled that the State Court plaintiff's claims were not
barred by the NGC plan of reorganization insofar as they alleged nondisclosure of certain cost reductions announced by NGC in October 1993. DLJSC appealed the Bankruptcy Court's ruling to the
U.S. District Court for the Northern District of Texas ("Federal District Court"), and on October 3, 2000, the Federal District Court partially reversed the Bankruptcy Court's ruling. Like the
Bankruptcy Court, the Federal District Court held that the claims of the State Court plaintiff and the NGC Settlement Trust are not absolutely barred by the NGC plan of reorganization. Contrary to the
Bankruptcy Court's ruling, the Federal

F39

---

District Court held that the plan of reorganization requires that plaintiffs (i) pay the attorneys' fees and costs of defendants in the event that plaintiffs' claims are unsuccessful, and
(ii) provide appropriate proof of plaintiffs' ability to pay such fees and costs. The State Court plaintiff and the NGC Settlement Trust have appealed the Federal District Court's judgment to
the U.S. Court of Appeals for the Fifth Circuit. Meanwhile, on May 7, 1998, DLJSC and others were named as defendants in a second action in a Texas State Court brought by the NGC Settlement
Trust. The allegations of this second Texas State Court action are substantially similar to those of the earlier class action pending in State Court. In an amended order dated January 5, 1999,
the State Court granted the class action plaintiff's motion for class certification. In an order dated March 1, 1999, the State Court granted motions for summary judgment filed by DLJSC and the
other defendants in both State Court actions. The plaintiffs have appealed. DLJSC intends to defend itself vigorously against all of the allegations contained in the complaints.

In
November 1998, three purported class actions (Gillet v. Goldman, Sachs & Co. et al., Prager v. Goldman, Sachs & Co. et
al., andHolzman v. Goldman, Sachs & Co. et al.) were filed in the U.S. District Court for the Southern District of New
York against more than 25 underwriters of initial public offering securities, including CSFB Corp. and DLJSC. The complaints allege that the defendants conspired to fix the "fee" paid for underwriting
initial public offering securities by setting the underwriters' discount or "spread" at 7%, in violation of the federal antitrust laws. The complaints seek treble damages in an unspecified amount and
injunctive relief as well as attorney's fees and costs. On March 15, 1999, the plaintiffs filed a Consolidated Amended Complaint captionedIn re Public Offering Fee
Antitrust Litigation, and the defendants thereafter moved to dismiss the complaint on several grounds. On September 7, 2000, the defendants filed their memorandum in
opposition to plaintiffs' motion for leave to file a consolidated second amended complaint. On or about August 3, 2000, an
action styledCHS Electronics, Inc. v. Credit Suisse First Boston Corp., et al., was filed in the U.S. District Court for the Southern District
of Florida against 18 securities firms or their parent companies, including the Company. The complaint in theCHS Electronicsaction, in which an
alleged issuer company asserts claims on behalf of a purported class, makes allegations that are substantially similar to the allegations of the proposed consolidated second amended complaint in In re Public Offering Fee
Antitrust Litigation. On December 20, 2000, the court granted the parties' stipulated transfer of the CHS Electronicsaction to the U.S. District Court for the Southern
District of New York for consolidation withIn re Public
Offering Fee Antitrust Litigation.On or about October 13, 2000, an action styledWeinman, as Trustee of Western Pacific Airlines v. Salomon
Smith Barney Inc., et al., was filed in the U.S. District Court for the Southern District of New York against 12 securities firms, including CSFB Corp. The complaint in Western Pacific makes allegations that are substantially similar to those in the proposed consolidated second amended complaint in In re Public Offering Fee Antitrust Litigationand to the complaint inCHS Electronics. On
January 12, 2001, the court entered a pretrial order inIn re Public Offering Fee Antitrust Litigationpursuant to which the CHS ElectronicsandWestern Pacificactions were consolidated with that action and the defendants in the
consolidated action were relieved of any obligation to answer or respond to any complaints until further order of the court. On February 9, 2001, the court granted the defendants' motion to
dismiss the consolidated amended complaint inIn re Public Offering Fee Antitrust Litigationwithout leave to replead and denied the plaintiffs' motion
for leave to file a second amended complaint. The plaintiffs have filed a notice of appeal in that action. On February 16, 2001, an action styledBraun v.
Goldman, Sachs & Co., et al.was filed in the U.S. District Court for the Southern District of New York against 25 underwriters of initial

F40

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public offering securities, including CSFB Corp. and DLJ. The complaint is virtually identical to the complaint inIn re Public Offering Fee Antitrust
Litigationdismissed by the court on February 9, 2001. On March 8, 2001, an action styledMDCM Holdings, Inc. f/k/a/
Mortgage.Com, Inc., by Lewis B. Freeman, Assignee for the Benefit of Creditors v. CSFBC, et al.was filed in the U.S. District Court for the Southern District of New
York against 20 securities firms, including CSFB Corp. and DLJSC. The complaint is substantially similar to the complaints filed on behalf of issuers inWeinman, Western
PacificandCHS Electronics. The Company's entities intend to defend themselves vigorously against all of the allegations
contained in the complaints.

Separately,
in 1999 the U.S. Department of Justice issued a Civil Investigative Demand to several investment banking firms, including DLJSC, seeking documents and information relating
to alleged price fixing with respect to underwriting spreads in initial public offerings. The government has not made any charges against DLJSC or, to its knowledge, the other investment banking
firms. DLJSC has cooperated with the Justice Department in providing the requested information.

On
or about January 31, 2000, AmeriServe Food Distribution, Inc. ("AmeriServe"), its parent company, Nebco Evans Holding Company, and related corporations filed
Chapter 11 petitions in the U.S. Bankruptcy Court for the District of Delaware. Since then, the Bankruptcy Court has confirmed a liquidating plan, and the plan has been consummated. Pursuant to
the plan, substantially all the assets of AmeriServe were sold and a "Post-Confirmation Estate" has been created. The Post-Confirmation Estate is authorized to assert a wide
assortment of claims against various parties for the benefit of various creditors. On or about December 8, 1999, DLJ Bridge Finance, Inc., a wholly-owned subsidiary of the Company,
through a subsidiary, made a $100 million secured loan to AmeriServe. The loan
subsequently was transferred to DLJ Capital Funding, also a subsidiary of the Company which has filed a claim with respect to the loan in the Bankruptcy Court proceeding. Pursuant to the plan, funds
for payment of this claim have been escrowed pending allowance of the claim by the Bankruptcy Court.

On
or about November 28, 2000, following discovery from the Company and certain affiliates concerning their relationships with AmeriServe and related companies, holders of
certain AmeriServe secured notes issued on or about October 1, 1999, commenced an adversary proceeding in the Bankruptcy Court, seeking under the Bankruptcy Code to subordinate DLJ Capital
Funding's claim to the secured noteholders' claims. DLJ Capital Funding intends to defend itself vigorously against all of the allegations contained in the complaint.

On
December 14, 2000, Morgens Waterfall Holdings, LLC ("Morgens") filed a complaint in the U.S. District Court for the Southern District of New York against DLJSC, DLJ Merchant
Banking, Inc., DLJ Merchant Banking Partners, L.P., DLJ Merchant Banking Partners II, L.P., and certain officers, directors and other individuals and entities. The complaint asserts common law
and federal securities law claims arising out of alleged misrepresentations and omissions relating to Morgens' purchases of the secured AmeriServe notes issued on or about October 1, 1999. The
complaint seeks, among other things, compensatory and punitive damages, as well as rescission and declaratory relief. On January 24, 2001, Morgens and certain affiliated entities filed an
amended complaint asserting substantially similar claims. On February 1, 2001, the District Court dismissed the amended complaint for failure to meet certain pleading standards with leave to
replead within 20 days. On February 20, 2001, Morgens filed a second amended complaint, which omits certain previously asserted claims but is similar in substance to Morgens' first
amended complaint. DLJSC and the other

F41

---

defendants intend to defend themselves vigorously against all of the allegations contained in the second amended complaint.

On
December 27, 2000, GSC Recovery, Inc., ("GSC") filed a complaint in the Superior Court of New Jersey, Law Division, Morris County, against DLJSC, DLJ Merchant
Banking, Inc., DLJ Merchant Banking Partners, L.P., DLJ Merchant Banking Partners II, L.P., and certain officers, directors, and other individuals and entities seeking compensatory and punitive
damages. The complaint arises out of alleged misrepresentations and omissions relating to GSC's purchases of certain unsecured AmeriServe notes issued in 1997 and 1998. DLJSC and the other defendants
intend to defend themselves vigorously against all of the allegations contained in the complaint.

On
January 30, 2001, Conseco Capital Management, Inc. ("Conseco") and certain affiliated entities filed a complaint in the U.S. District Court for the Southern District
of New York against DLJSC, DLJ Merchant Banking, Inc., DLJ Merchant Banking Partners, L.P., DLJ Merchant Banking Partners II, L.P., and certain officers, directors and other individuals and
entities. The complaint asserts common law and federal securities law claims arising out of alleged misrepresentations and omissions relating to Conseco's purchases of the secured AmeriServe notes
issued on or about October 1, 1999. The
allegations of the complaint are similar in substance to the amended complaint filed by Morgens. DLJSC and the other defendants intend to defend themselves vigorously against all of the allegations
contained in the complaint.

Between
September 1995 and October 1998, DLJSC was named as a defendant in six separate actions filed by institutional investors who invested and lost approximately
$300 million in three hedge funds (the "Funds") managed by David Askin ("Askin"). The Funds filed for bankruptcy in April 1994. All six complaints have been consolidated for discovery
purposes and are currently pending in the U. S. District Court for the Southern District of New York. The defendants are Askin, Askin Capital Management ("ACM", Askin's management company), and two
securities dealers (including DLJSC) that sold collateralized mortgage obligations to the Funds. The only claim against DLJSC that has survived a motion to dismiss is aiding and abetting common law
fraud. The complaints allege that DLJSC aided and abetted an alleged fraud of the investors by Askin and ACM by selling securities that were inconsistent with the Funds' investment objectives and by
providing inaccurate monthly mark-to-market prices for securities purchased by the Funds. The actions seek joint and several recovery of rescissionary, compensatory, and
punitive damages. On February 5, 2001, the court denied DLJSC's motion for summary judgment. DLJSC intends to defend itself vigorously against all of the allegations contained in the
complaints.

In
August 1997, DLJSC was named as a defendant in another action arising out of the bankruptcy of the Funds. This action was brought by the "Litigation Advisory Board," an
entity created by the Funds' plan of liquidation to pursue all unresolved claims held by the Funds. The action is currently pending in the U. S. District Court for the Southern District of New York.
The only claims against DLJSC that have survived a motion to dismiss are for breach of contract. Generally, the lawsuit alleges that the Funds were damaged when DLJSC issued allegedly improper margin
calls and liquidated the Funds' reverse repurchase positions at less than fair market value. The complaint alleges that the Funds' investors lost over $400 million in equity, but does not
specify the amount of damages that the Funds themselves claim to have suffered as a result of the allegations made in this complaint. DLJSC intends to defend itself vigorously against all of the
allegations contained in the complaint.

F42

---

Beginning on September 6, 2000, DLJSC, Donaldson, Lufkin & Jenrette International ("DLJI") and certain other individuals and entities were named as defendants in six
putative class actions filed in the U.S. District Court for the Southern District of New York on behalf of a purported class of persons who purchased or acquired American Depository Shares ("ADS") of
Independent Energy Holdings PLC ("Independent Energy") in Independent Energy's secondary offering of $200 million of ADS in March 2000. In early September 2000, shortly before
this action was filed, receivers were appointed for Independent Energy in the United Kingdom. The complaints, which are substantially the same, allege violations of the federal securities laws against
DLJSC, as one of the underwriters of the ADS, and DLJI, as a financial advisor to Independent Energy that sold shares in connection with the secondary offering, arising out of alleged
misrepresentations and omissions contained in the registration statement and prospectus for the secondary offering of ADS. The complaints seek, among other things, compensatory damages, rescission,
and equitable and/or injunctive relief. On December 15, 2000, the complaints pending in the Southern District were consolidated and lead plaintiffs and lead counsel
were appointed. A consolidated complaint was filed on February 16, 2001, and an amended consolidated complaint is expected to be filed by March 30, 2001. The Company's entities intend to
defend themselves vigorously against all of the allegations contained in the complaints.

Beginning
in September 2000, the Company, its directors and certain other entities were named as defendants in four putative class actions filed in the Court of Chancery, State
of Delaware, New Castle County, on behalf of a purported class of public shareholders of CSFBdirectcommon stock. Each of the complaints, which are
substantially the same, alleges that the then proposed acquisition of DLJ by the Credit Suisse Group (the "CSG Transaction") was unfair to the holders of
CSFBdirectcommon stock in that the value of such CSFBdirectshares was not being maximized in the CSG
Transaction. The complaints further allege that the Company's directors breached their fiduciary duties to CSFBdirectshareholders by approving the CSG
Transaction, and that the Company's directors had personal financial interests that created a conflict of interest for them because they allegedly owned more CSFB (USA) common shares in terms of value
than they owned CSFBdirectshares. The complaints seek, among other relief, damages in an unspecified amount. On or about October 11, 2000, an
amended complaint was filed in one of these actions which adds allegations that the completion of the CSG Transaction would adversely affect the
CSFBdirectshares, and that the holders of CSFBdirectshares have a contractual right to a separate vote
on the CSG Transaction as well as a contractual right to have their shares purchased if CSFB (USA) voting common shares are being purchased. As additional relief, the amended complaint seeks, among
other things, an order requiring a class vote on the CSG Transaction. At a conference on October 12, 2000, the Court denied a motion by plaintiffs to schedule a preliminary injunction
hearing on the allegations of the amended complaint. The Company intends to defend itself vigorously against all of the allegations contained in the complaints. In September 2000, the Company,
its directors and Credit Suisse Group, along with certain other entities, were named as defendants in a putative class action commenced in the U.S. District Court for the Southern District of New York
brought on behalf of a purported class of public shareholders of CSFBdirect. The complaint alleges, among other things, that certain statements in the
1999 prospectus issued in connection with the initial public offering of CSFBdirectshares were allegedly false and misleading in their description of
the rights attributable to the CSFBdirectshares; that the tender offer materials disseminated in connection with the CSG Transaction are false and
misleading in allegedly failing to describe certain rights to the CSFBdirectshares in connection with the CSG Transaction, among other things; and that
these alleged misstatements constitute violations of the federal securities

F43

---

laws. The complaint further alleges that defendants violated their fiduciary duties under state law by failing to provide for the purchase of CSFBdirectshares as part of the CSG Transaction. The complaint seeks, among other things, an award of rescission or damages in an unspecified amount, a declaration that defendants have violated the federal
securities laws and their state law fiduciary duties, and unspecified corrective disclosures. On January 4, 2001, the court appointed lead counsel and lead plaintiffs. On February 23,
2001, the defendants moved to dismiss the complaint. The Company and Credit Suisse Group intend to defend themselves vigorously against all of the allegations contained in the complaint.

CSFB
Corp. as well as, to the Company's knowledge, at least five other investment banks, are being investigated by one or more governmental authorities or self-regulatory
organizations in connection with their practices as to the allocation of shares in initial public offering ("IPOs") in which such investment
banks were a lead or co-managing underwriter, and subsequent securities transactions and commissions paid by certain customers that had received such allocations. In CSFB Corp.'s case, the
inquiries have focused on the allocation practices with respect to two IPOs in 1999 and 2000, including the IPO of shares of VA Linux Systems, Inc. IPO. 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.

Beginning
in January and continuing into March, 2001, CSFB Corp. was named as a defendant in 17 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 the registration statement and prospectus for the IPO of
shares of VA Linux Systems, Inc. These lawsuits contain nearly identical allegations that the registration statement and prospectus either omitted or misrepresented material information about
commissions paid to CSFB Corp. by certain customers that received allocations of shares in such offering in connection with subsequent securities transactions with such customers. CSFB Corp. intends
to defend itself vigorously against all of the claims asserted in the complaints.

In
March 2001, CSFB Corp. and six other investment banks were named as defendants in a putative class action filed with the U.S. District Court for the Southern District of New York,
alleging 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 lawsuit alleges 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 aftermarket 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 the complaint.

On
March 26, 2001, the Company, its directors and certain affiliated entities were named as defendants in six putative class actions filed in the Court of Chancery, State of
Delaware, New Castle County, on behalf of a putative class of public shareholders of CSFBdirectCommon Stock. Each of the

F44

---

complaints, which are substantially the same, alleges that the Company's proposed offer to acquire all of the publicly owned CSFBdirectCommon Stock is
unfair to the holders of CSFBdirectCommon Stock because the proposed purchase price of $4.00 per share does not reflect the "true" value of
CSFBdirectCommon Stock. The complaints further allege that the Company's directors breached their fiduciary duties to the
CSFBdirectpublic shareholders, and that the Company's directors have relationships and duties that create a conflict of interest for them so that they
allegedly could not be expected to protect the interests of the CSFBdirectpublic shareholders. The complaints seek, among other relief, temporary
and permanent injunctions against the completion of the proposed offer and damages in an unspecified amount. The Company intends to defend itself vigorously against all of the suits.

22. Subsequent Event

On March 26, 2001, the Company announced its intention to acquire for $4.00 per share the 18,400,000 shares of its
CSFBdirectCommon Stock owned by the public. The proposed transaction is subject to the approval of the Company's board of directors and the negotiation
and execution of definitive documentation.

F45

---

23. Quarterly Data (Unaudited)

|               |            |   |           |           |   |            |            |   |            |            |   | CSFBdirectCommon Shares**
Earnings Per Share |           
|-------------- | ---------- | - | --------- | --------- | - | ---------- | ---------- | - | ---------- | ---------- | - | -------------------------------------------- | ----------
|
|
|
|2000:          |            |   |           |           |   |            |            |   |            |            |   |                                              |           
|First quarter  |            | $ | 1,888,902 |           | $ | 389,200    |            | $ | 245,200    |            | $ | 239,911                                      |           
|Second quarter |            |   | 1,552,625 |           |   | 257,500    |            |   | 162,200    |            |   | 156,911                                      |           
|Third quarter  |            |   | 1,347,368 |           |   | 79,000     |            |   | 49,800     |            |   | 44,511                                       |           
|Fourth quarter |            |   | 1,280,169 |           |   | (2,247,864 | )          |   | (1,533,012 | )          |   | (1,538,300                                   | )         
|               |            |   |           |           |   |            |            |   |            |            |   |                                              |           
|               | Total year |   | $         | 6,069,064 |   | $          | (1,522,164 | ) | $          | (1,075,812 | ) | $                                            | (1,096,967
|               |            |   |           |           |   |            |            |   |            |            |   |                                              |           
|1999:          |            |   |           |           |   |            |            |   |            |            |   |                                              |           
|First quarter  |            | $ | 1,137,497 |           | $ | 197,000    |            | $ | 121,650    |            | $ | 116,361                                      |           
|Second quarter |            |   | 1,429,865 |           |   | 259,000    |            |   | 165,650    |            |   | 160,361                                      |           
|Third quarter  |            |   | 1,328,675 |           |   | 194,000    |            |   | 122,200    |            |   | 116,911                                      |           
|Fourth quarter |            |   | 1,659,987 |           |   | 303,500    |            |   | 191,200    |            |   | 185,887                                      |           
|               |            |   |           |           |   |            |            |   |            |            |   |                                              |           
|               | Total year |   | $         | 5,556,024 |   | $          | 953,500    |   | $          | 600,700    |   | $                                            | 579,520   
|               |            |   |           |           |   |            |            |   |            |            |   |                                              |           

---



F46

---



SCHEDULE I    CREDIT SUISSE FIRST BOSTON (USA), INC.  (Formerly Donaldson, Lufkin & Jenrette, Inc.)  (Parent Company)    Condensed Statements of Financial Condition
 (In thousands, except share and per share data)

|                                                                 |                                                             | December 31,                                                                                                                                                                               |           
|---------------------------------------------------------------- | ----------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ----------
|
|ASSETS                                                           |                                                            
|Cash and cash equivalents                                        |                                                             | $                                                                                                                                                                                          | 57,210    
|Receivables from brokers, dealers and other                      |                                                             |                                                                                                                                                                                            | 87,491    
|Long-term corporate development investments                      |                                                             |                                                                                                                                                                                            | 41,337    
|Note receivable from parent                                      |                                                             |                                                                                                                                                                                            | 3,100,000 
|Receivables from subsidiaries                                    |                                                             |                                                                                                                                                                                            | 6,652,670 
|Investment in subsidiaries, at equity                            |                                                             |                                                                                                                                                                                            | 6,386,619 
|Net federal deferred tax assets                                  |                                                             |                                                                                                                                                                                            | 1,114,589 
|Federal income taxes receivable                                  |                                                             |                                                                                                                                                                                            | 489,790   
|Other assets and deferred amounts                                |                                                             |                                                                                                                                                                                            | 808,388   
|                                                                 |                                                             |                                                                                                                                                                                            |           
|Total Assets                                                     |                                                             | $                                                                                                                                                                                          | 18,738,094
|                                                                 |                                                             |                                                                                                                                                                                            |           
|LIABILITIES AND STOCKHOLDERS' EQUITY                             |                                                            
|Short-term borrowings                                            |                                                             | $                                                                                                                                                                                          | 1,166,002 
|Accounts payable and accrued expenses                            |                                                             |                                                                                                                                                                                            | 2,516,212 
|Other liabilities                                                |                                                             |                                                                                                                                                                                            | 1,576,169 
|8.42% Junior subordinated debentures, held by a subsidiary trust |                                                             |                                                                                                                                                                                            | 206,224   
|Other long-term borrowings                                       |                                                             |                                                                                                                                                                                            | 6,767,516 
|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)                                                                             |           
|                                                                 |                                                             | Series B Preferred Stock, at $50.00 per share liquidation preference (3,500,000 shares issued and outstanding)                                                                             |           
|                                                                 | Common stock, 1,500,000,000 shares authorized:              |                                                                                                                                                                                            |           
|                                                                 |                                                             | CSFB (USA) Inc. 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; 84,250,000 notional shares in respect of CSFB (USA)'s
retained interest) |           
|                                                                 | Paid-in capital                                             |                                                                                                                                                                                            |           
|                                                                 | Retained earnings                                           |                                                                                                                                                                                            |           
|                                                                 | Accumulated other comprehensive income (loss)               |                                                                                                                                                                                            |           
|                                                                 | Employee deferred compensation stock trust                  |                                                                                                                                                                                            |           
|                                                                 | Common stock issued to employee deferred compensation trust |                                                                                                                                                                                            |           
|                                                                 |                                                             |                                                                                                                                                                                            |           
|                                                                 |                                                             | Total stockholders' equity                                                                                                                                                                 |           
|                                                                 |                                                             |                                                                                                                                                                                            |           
|Total Liabilities and Stockholders' Equity                       |                                                             | $                                                                                                                                                                                          | 18,738,094
|                                                                 |                                                             |                                                                                                                                                                                            |           

See accompanying notes to condensed financial statements.

F47

---



CREDIT SUISSE FIRST BOSTON (USA), INC.  (Formerly Donaldson, Lufkin & Jenrette, Inc.)        (Parent Company)        Condensed Statements of Operations
    (In thousands, except share and per share data)

|                                                                                                                   |                             | Years Ended December 31, |                         
|------------------------------------------------------------------------------------------------------------------ | --------------------------- | ------------------------ | ------------------------
|
|Revenues:                                                                                                          |                             |                          |                         
|                                                                                                                   | Dividends from affiliates   |                          | $                       
|                                                                                                                   | Interest from affiliates    |                          |                         
|                                                                                                                   | Allocations from affiliates |                          |                         
|                                                                                                                   | Other                       |                          |                         
|                                                                                                                   |                             |                          |                         
|                                                                                                                   |                             |                          | Total revenues          
|                                                                                                                   |                             |                          |                         
|                                                                                                                   | Interest expense            |                          |                         
|                                                                                                                   |                             |                          |                         
|                                                                                                                   |                             |                          | Net revenues            
|                                                                                                                   |                             |                          |                         
|Costs and Expenses:                                                                                                |                             |                          |                         
|                                                                                                                   | Compensation and benefits   |                          |                         
|                                                                                                                   | Restructuring costs         |                          |                         
|                                                                                                                   | Operating expenses          |                          |                         
|                                                                                                                   |                             |                          |                         
|                                                                                                                   |                             |                          | Total costs and expenses
|                                                                                                                   |                             |                          |                         
|Income (loss) before income tax benefit, equity in undistributed net income of subsidiaries and extraordinary item |                             |                          | (279,991                
|                                                                                                                   |                             |                          |                         
|Income tax benefit                                                                                                 |                             |                          | 396,511                 
|                                                                                                                   |                             |                          |                         
|Income (loss) before equity in undistributed net income (loss) of subsidiaries and extraordinary item              |                             |                          | 116,520                 
|                                                                                                                   |                             |                          |                         
|Equity in undistributed net income (loss) of subsidiaries                                                          |                             |                          | (1,180,610              
|                                                                                                                   |                             |                          |                         
|Income (loss) before extraordinary item                                                                            |                             |                          | (1,064,090              
|                                                                                                                   |                             |                          |                         
|Loss on early extinguishment of debt, net of tax benefit of ($5,047)                                               |                             |                          | (11,722                 
|                                                                                                                   |                             |                          |                         
|Net income (loss)                                                                                                  |                             | $                        | (1,075,812              
|                                                                                                                   |                             |                          |                         
|Dividends on preferred stock                                                                                       |                             | $                        | 21,155                  
|                                                                                                                   |                             |                          |                         
|Earnings (loss) applicable to common shares                                                                        |                             | $                        | (1,096,967              
|                                                                                                                   |                             |                          |                         

See
accompanying notes to condensed financial statements.

F48

---

CREDIT SUISSE FIRST BOSTON (USA), INC.  (Formerly Donaldson, Lufkin & Jenrette, Inc.)        (Parent Company)        Condensed Statements of Operations
    (In thousands, except share and per share data)

|                                             |                                     | Years Ended December 31,               
|-------------------------------------------- | ----------------------------------- | ---------------------------------------
|
|Earnings (loss) applicable to common shares: |                                     |                                        
|                                             | CSFB (USA), Inc.:                   |                                        
|                                             |                                     | Income (loss) before extraordinary item
|                                             |                                     | Extraordinary loss, net of tax         
|                                             |                                     |                                        
|                                             |                                     | Net income (loss)                      
|                                             |                                     |                                        
|                                             | CSFB (USA):                         |                                        
|                                             |                                     | Income (loss) before extraordinary item
|                                             |                                     | Extraordinary loss, net of tax         
|                                             |                                     |                                        
|                                             |                                     | Net income (loss)                      
|                                             |                                     |                                        
|                                             | CSFBdirect                          |                                        
|                                             |                                     |                                        
|Earnings (loss) per common share:            |                                     |                                        
|                                             | CSFB (USA), Inc.Basic and Diluted: |                                        
|                                             |                                     | Income (loss) before extraordinary item
|                                             |                                     | Extraordinary loss, net of tax         
|                                             |                                     |                                        
|                                             |                                     | Net income (loss)                      
|                                             |                                     |                                        
|                                             | CSFB (USA)Basic and Diluted:       |                                        
|                                             |                                     | Income (loss) before extraordinary item
|                                             |                                     | Extraordinary loss, net of tax         
|                                             |                                     |                                        
|                                             |                                     | Net income (loss)                      
|                                             |                                     |                                        
|                                             | CSFBdirect***                       |                                        
|                                             |                                     | Basic                                  
|                                             |                                     |                                        
|                                             |                                     | Diluted                                
|                                             |                                     |                                        
|Weighted average common shares outstanding:  |                                     |                                        
|                                             | CSFB (USA), Inc.                    |                                        
|                                             |                                     | Basic and Diluted                      
|                                             |                                     |                                        
|                                             | CSFB (USA)                          |                                        
|                                             |                                     | Basic and Diluted                      
|                                             |                                     |                                        
|                                             | CSFBdirect                          |                                        
|                                             |                                     | Basic                                  
|                                             |                                     |                                        
|                                             |                                     | Diluted                                
|                                             |                                     |                                        

---

See
accompanying notes to condensed financial statements.

F49

---



CREDIT SUISSE FIRST BOSTON (USA), INC.  (Formerly Donaldson, Lufkin & Jenrette, Inc.)  (Parent Company)    Condensed Statements of Cash Flows    (In thousands)

|                                                    |                                       | Years Ended December 31,           |                                                    
|--------------------------------------------------- | ------------------------------------- | ---------------------------------- | ---------------------------------------------------
|
|Net cash (used in) provided by operating activities |                                       | $                                  | (1,530,266                                         
|                                                    |                                       |                                    |                                                    
|Cash flows from investing activities:               |                                       |                                    |                                                    
|                                                    | Net proceeds from (payments for):     |                                    |                                                    
|                                                    |                                       | Note receivable from parent        |                                                    
|                                                    |                                       | Transfer of CSFB Corp. from parent |                                                    
|                                                    |                                       | Dividends from affiliates          |                                                    
|                                                    |                                       | Investment in subsidiaries         |                                                    
|                                                    |                                       | Allocated equity to CSFBdirect     |                                                    
|                                                    |                                       | Other assets                       |                                                    
|                                                    |                                       |                                    |                                                    
|                                                    | Net cash used in investing activities |                                    |                                                    
|                                                    |                                       |                                    |                                                    
|                                                    | Cash flows from financing activities: |                                    |                                                    
|                                                    |                                       | Net proceeds from (payments for):  |                                                    
|                                                    |                                       |                                    | Short-term financings                              
|                                                    |                                       |                                    | Issuance of:                                       
|                                                    |                                       |                                    |                                                    
|                                                    |                                       |                                    |                                                    
|                                                    |                                       |                                    |                                                    
|                                                    |                                       |                                    |                                                    
|                                                    |                                       |                                    |                                                    
|                                                    |                                       |                                    |                                                    
|                                                    |                                       |                                    | Subordinated loan from subsidiaries                
|                                                    |                                       |                                    | Dividends paid                                     
|                                                    |                                       |                                    | Dividend of DLJAMG to parent                       
|                                                    |                                       |                                    | Sale of common stock to AXA Financial and AXA, S.A.
|                                                    |                                       |                                    | Exercise of stock options                          
|                                                    |                                       |                                    | Receivables from subsidiaries                      
|                                                    |                                       |                                    |                                                    
|Net cash provided by financing activities           |                                       |                                    | 2,165,976                                          
|                                                    |                                       |                                    |                                                    
|Increase (decrease) in cash and cash equivalents    |                                       |                                    | (890,430                                           
|                                                    |                                       |                                    |                                                    
|Cash and cash equivalents at beginning of year      |                                       |                                    | 947,640                                            
|                                                    |                                       |                                    |                                                    
|Cash and cash equivalents at end of year            |                                       | $                                  | 57,210                                             
|                                                    |                                       |                                    |                                                    

See
accompanying notes to condensed financial statements.

F50

---



CREDIT SUISSE FIRST BOSTON (USA), INC.  (Formerly Donaldson, Lufkin & Jenrette, Inc.)  (Parent Company)        Notes to Condensed Financial Statements        December 31, 2000

1.  Basis of Presentation

The condensed financial statements of CSFB (USA) Inc. (formerly Donaldson, Lufkin & Jenrette, Inc.) ("Parent Company") should be read in
conjunction with the consolidated financial statements of CSFB (USA) Inc. and subsidiaries (the "Company") and the notes thereto. Investments in subsidiaries are accounted for under the equity
method.

2.  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., Investment Banking, Fixed Income, Equity 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 CSFBdirectare 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) include a 100% interest in CSFBdirectfor periods prior to the closing date of the initial public offering of the Tracking Stock, and 82.1% for subsequent periods.

3.  Related Party Transactions

Receivables from subsidiaries include $1.2 billion and $0.8 billion loaned under master note agreements at December 31, 2000 and 1999,
respectively. Substantially all receivables from subsidiaries provide for interest based on federal funds rates.

The
amount of cash dividends paid to the Parent Company by its consolidated subsidiaries amounted to $508.5 million and $205.1 million for the years ended
December 31, 2000 and 1998, respectively. There were no cash dividends paid to the Parent Company by its consolidated subsidiaries in 1999. There are no restrictions on the payment of
dividends, except for those stipulated in certain debt agreements and in those applicable to brokers and dealers which provide for certain minimum amounts of capital to be maintained to satisfy
regulatory requirements in the Company's domestic and foreign broker-dealer subsidiaries. Under certain circumstances, the amount of excess capital that can be withdrawn is limited. The regulatory
requirements are designed to measure the general financial integrity and liquidity of broker-dealers and provide minimum acceptable net capital levels to satisfy commitments to
customers. Unless an adequate level of capital is maintained, regulated broker-dealer subsidiaries would be prohibited from paying dividends to the Parent Company.

F51

---

4.  Long-term Borrowings

The Parent Company finances certain of its activities through long-term borrowing arrangements. At December 31, 2000 there were current
maturities of long-term borrowings of $1.4 billion. Long-term borrowings consist of the following:

|                                                                |                                  | December 31,
|--------------------------------------------------------------- | -------------------------------- | ------------
|
|
|Senior notes, 5.875%  8.00% due various dates through 2008     |                                  | $           
|Medium-term notes, 0.62%  7.60% due various dates through 2016 |                                  |             
|Subordinated exchange notes, 9.58% due 2003                     |                                  |             
|Global floating rate notes, due 2002                            |                                  |             
|                                                                |                                  |             
|                                                                | Total other long-term borrowings |             
|                                                                |                                  |             

For
a detailed description of the Parent Company's long-term borrowings, see Note 9 of the Notes to Consolidated Financial Statements of CSFB (USA) and
subsidiaries.

Scheduled
maturities of long-term borrowings are as follows:

December 31,2000

1999(In thousands)2000

$


$
459,7632001


1,428,500


1,013,6292002


1,454,257


1,216,5912003


991,077


374,5312004


129,861


129,5892005


1,547,860


498,1322006-2016


1,215,961


1,152,102$
6,767,516

$
4,844,337


At
December 31, 2000 no borrowings were outstanding under the Parent Company's $2.8 billion (as amended) credit facility with banks, of which $2.38 billion may be
borrowed on an unsecured basis.

5.  Income Taxes

Certain
of the Parent Company's subsidiaries record income taxes as if each subsidiary files a separate income tax return. The tax rates used in the computation for such subsidiaries
are generally higher than the Company's overall consolidated effective tax rate. The income tax benefit recorded by the Parent Company results from the Company's overall lower consolidated effective
tax rate and the ability of the Parent Company to utilize tax attributes related to its subsidiaries and affiliates.

F52

---

6.  Contingent Liabilities

From
time to time the Parent Company issues guarantees of the obligations of certain subsidiaries. The amounts of such items in the aggregate are not considered excessive in relation
to the normal operating levels of the Company and management does not anticipate, as of December 31, 2000, losses as a result of these guarantees.

7.  Earnings Per Share

As
a result of the Acquisition, CSG and its subsidiaries 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) (the "Shares"). Subsequent to the Acquisition by CSG of all of the CSFB
(USA) Common Stock of the Company, existing shares were cancelled and the Company issued 1,000 shares of common stock to its Parent. 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 Transaction 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. Earnings per share for CSFBdirectfor periods prior to the closing date of the initial public offering of the Tracking Stock, are
not presented as such amounts are not meaningful.

For
CSFB (USA), Inc., consolidated earnings per share are calculated by dividing earnings applicable to consolidated common shares outstanding by the weighted average amount of the
consolidated common shares outstanding, as adjusted for the change in the capital structure of CSFB (USA), Inc. described above. Basic and diluted earnings per share are the same for all periods
presented.

8.  Subsequent Event

On March 26, 2001, the Company announced its intention to acquire for $4.00 per share the 18,400,000 shares of its
CSFBdirectCommon Stock owned by the public. The proposed transaction is subject to the approval of the Company's board of directors and the negotiation
and execution of definitive documentation.

F53

---



INDEPENDENT AUDITORS' REPORT

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

We
have audited the accompanying combined statements of financial condition of CSFBdirect(a combination of certain assets and
liabilities of Credit Suisse First Boston (USA), Inc., as described in note 1) as of December 31, 2000 and 1999, and the related combined statements of operations, changes in
allocated equity, and cash flows for each of the years in the three-year period ended December 31, 2000. These combined financial statements are the responsibility of Credit Suisse
First Boston (USA), Inc.'s management. Our responsibility is to express an opinion on these combined financial statements based on our audits.

We
conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the combined financial statements are free of material misstatement. An audit includes, examining, on a test basis, evidence supporting the amounts and disclosures
in the combined financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis for our opinion.

We
have audited the consolidated financial statements of Credit Suisse First Boston (USA), Inc. and subsidiaries as of December 31, 2000 and 1999, and for each of the
years in the three-year period ended December 31, 2000, and have issued our report dated February 8, 2001, except as to Notes 21 and 22 which are as of March 26, 2001.
The combined financial statements of CSFBdirectshould be read in conjunction with the consolidated financial statements of Credit Suisse First Boston
(USA), Inc. and subsidiaries.

In
our opinion, the combined financial statements referred to above present fairly, in all material respects, the financial position of
CSFBdirectas of December 31, 2000 and 1999, and the results of their operations and their cash flows for each of the years in the
three-year period ended December 31, 2000, in conformity with accounting principles generally accepted in the United States of America.

/s/
KPMG LLP
New York, New York
February 8, 2001,
except as to Note 12, which is as of March 26, 2001

F54

---



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

|                                                                                                             |                                                               | December 31,
2000 |                        | December 31,
1999
|------------------------------------------------------------------------------------------------------------ | ------------------------------------------------------------- | ----------------- | ---------------------- | -----------------
|ASSETS                                                                                                      
|Cash and cash equivalents                                                                                    |                                                               | $                 | 141,560                |                  
|Short-term investments                                                                                       |                                                               |                   | 47,158                 |                  
|Deposit with affiliated clearing broker                                                                      |                                                               |                   | 447                    |                  
|Receivables from brokers, dealers and others, net                                                            |                                                               |                   | 28,415                 |                  
|Financial instruments owned, at market value                                                                 |                                                               |                   | 378                    |                  
|Office facilities, at cost (net of accumulated depreciation and amortization of $753 and $470, respectively) |                                                               |                   | 827                    |                  
|Investment in and advances to joint ventures                                                                 |                                                               |                   | 46,944                 |                  
|Long-term corporate development investments                                                                  |                                                               |                   | 5,522                  |                  
|Prepaid expenses and other assets                                                                            |                                                               |                   | 5,287                  |                  
|                                                                                                             |                                                               |                   |                        |                  
|                                                                                                             |                                                               |                   | Total Assets           |                  
|                                                                                                             |                                                               |                   |                        |                  
|LIABILITIES AND ALLOCATED EQUITY                                                                            
|Liabilities:                                                                                                 |                                                               |                   |                        |                  
|                                                                                                             | Payables to parent and affiliates, net                        |                   | $                      | 26,411           
|                                                                                                             | Financial instruments sold not yet purchased, at market value |                   |                        | 115              
|                                                                                                             | Accounts payable and accrued expenses                         |                   |                        | 26,722           
|                                                                                                             |                                                               |                   |                        |                  
|                                                                                                             |                                                               |                   | Total liabilities      |                  
|                                                                                                             |                                                               |                   |                        |                  
|Commitments and contingencies                                                                                |                                                               |                   |                        |                  
|Allocated equity                                                                                             |                                                               |                   | 222,732                |                  
|Accumulated other comprehensive income                                                                       |                                                               |                   | 558                    |                  
|                                                                                                             |                                                               |                   |                        |                  
|                                                                                                             |                                                               |                   | Total allocated equity |                  
|                                                                                                             |                                                               |                   |                        |                  
|Total Liabilities and Allocated Equity                                                                       |                                                               | $                 | 276,538                |                  
|                                                                                                             |                                                               |                   |                        |                  

See
accompanying notes to combined financial statements.

F55

---



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

|                                                                                            |                                                                      | Years Ended December 31,
|------------------------------------------------------------------------------------------- | -------------------------------------------------------------------- | ------------------------
|
|Revenues:                                                                                   |                                                                      |                         
|                                                                                            | Commissions                                                          |                         
|                                                                                            | Underwritings                                                        |                         
|                                                                                            | Fees                                                                 |                         
|                                                                                            | Interest, net of interest expense of $1,555 and $1,061, respectively |                         
|                                                                                            |                                                                      |                         
|                                                                                            |                                                                      |                         
|                                                                                            |                                                                      |                         
|Costs and expenses:                                                                         |                                                                      |                         
|                                                                                            | Compensation and benefits                                            |                         
|                                                                                            | Brokerage, clearing, exchange and other fees                         |                         
|                                                                                            | Advertising                                                          |                         
|                                                                                            | Occupancy and related costs                                          |                         
|                                                                                            | Communications and technology                                        |                         
|                                                                                            | Merger related costs                                                 |                         
|                                                                                            | Other operating expenses                                             |                         
|                                                                                            |                                                                      |                         
|                                                                                            |                                                                      |                         
|                                                                                            |                                                                      |                         
|Income (loss) before income tax provision (benefit) and equity in net loss of joint venture |                                                                      |                         
|                                                                                            |                                                                      |                         
|Income tax provision                                                                        |                                                                      |                         
|Equity in net loss of joint ventures                                                        |                                                                      |                         
|                                                                                            |                                                                      |                         
|Net income (loss)                                                                           |                                                                      | $                       
|                                                                                            |                                                                      |                         

See
accompanying notes to combined financial statements.

F56

---



CSFBdirect(Formerly DLJdirect)(a combination of certain assets and liabilities as
described in note 1)  Combined Statements of Changes in Allocated Equity    For the Years Ended December 31, 2000, 1999, and 1998    (In thousands)

|                                                         |                            | Allocated Equity |         | Accumulated
Other
Comprehensive
Income |   | Total
Allocated Equity |  
|-------------------------------------------------------- | -------------------------- | ---------------- | ------- | -------------------------------------- | - | ---------------------- | -
|                                                         |                            |                  |         |                                        |   |                        |  
|Balances at December 31, 1997                            |                            | $                | 5,964   |                                        | $ |                       |  
|Net income                                               |                            |                  | 1,460   |                                        |   |                       |  
|Capital contributions from CSFB (USA), Inc.              |                            |                  | 14,500  |                                        |   |                       |  
|                                                         |                            |                  |         |                                        |   |                        |  
|Balances at December 31, 1998                            |                            |                  | 21,924  |                                        |   |                       |  
|Net income                                               |                            |                  | 6,932   |                                        |   |                       |  
|Translation adjustmentnet of taxes                      |                            |                  |        |                                        |   | 1,130                  |  
|                                                         | Total comprehensive income |                  |         |                                       |   |                        | 
|Capital contribution from CSFB (USA), Inc.               |                            |                  | 1,000   |                                        |   |                       |  
|Allocated equity from issuance of CSFBdirectCommon Stock |                            |                  | 233,945 |                                        |   |                       |  
|Dividend paid to CSFB (USA), Inc.                        |                            |                  | (33,139 | )                                      |   |                       |  
|                                                         |                            |                  |         |                                        |   |                        |  
|Balances at December 31, 1999                            |                            |                  | 230,662 |                                        |   | 1,130                  |  
|Net loss                                                 |                            |                  | (7,930  | )                                      |   |                       |  
|Translation adjustmentnet of taxes                      |                            |                  |        |                                        |   | (572                   | )
|                                                         | Total comprehensive income |                  |         |                                       |   |                        | 
|                                                         |                            |                  |         |                                        |   |                        |  
|Balances at December 31, 2000                            |                            | $                | 222,732 |                                        | $ | 558                    |  
|                                                         |                            |                  |         |                                        |   |                        |  

See
accompanying notes to combined financial statements.

F57

---



CSFBdirect(Formerly DLJdirect)(a combination of certain assets and liabilities as
described in note 1)    Combined Statements of Cash Flows    For the Years Ended December 31, 2000, 1999 and 1998  (In thousands)

|                                                                                                   |                                                                       | 2000              |         | 1999    |        | 1998    |        
|-------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------- | ----------------- | ------- | ------- | ------ | ------- | -------
|Cash flows from operating activities:                                                              |                                                                       |                   |         |         |        |         |        
|                                                                                                   |                                                                       | Net income (loss) |         | $       | (7,930 | )       | $      
|Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities: |                                                                       |                   |         |         |        |         |        
|                                                                                                   | Unrealized depreciation of long-term corporate development investment |                   |         | (28     | )      |         |       
|                                                                                                   | Depreciation and amortization                                         |                   |         | 311     |        |         | 186    
|                                                                                                   | Deferred taxes                                                        |                   |         | 1,646   |        |         | (2,721 
|                                                                                                   | Equity in net loss of joint ventures                                  |                   |         | 6,995   |        |         | 3,215  
|(Increase) decrease in operating assets:                                                           |                                                                       |                   |         |         |        |         |        
|                                                                                                   | Deposit with affiliated clearing broker                               |                   |         | (118    | )      |         | (79    
|                                                                                                   | Receivables from brokers, dealers and other, net                      |                   |         | (9,400  | )      |         | (17,128
|                                                                                                   | Financial instruments owned, at market value                          |                   |         | 632     |        |         | (968   
|                                                                                                   | Prepaid expenses and other assets                                     |                   |         | (4,718  | )      |         | (1,479 
|Increase (decrease) in operating liabilities:                                                      |                                                                       |                   |         |         |        |         |        
|                                                                                                   | Payables to parent and affiliates, net                                |                   |         | 12,463  |        |         | 9,397  
|                                                                                                   | Financial instruments sold, not yet purchased, at market value        |                   |         | 89      |        |         | 2      
|                                                                                                   | Accounts payable and accrued expenses                                 |                   |         | (7,352  | )      |         | 31,482 
|                                                                                                   |                                                                       |                   |         |         |        |         |        
|                                                                                                   | Net cash provided by (used in) operating activities                   |                   |         | (7,410  | )      |         | 28,839 
|                                                                                                   |                                                                       |                   |         |         |        |         |        
|Cash flows from investing activities:                                                              |                                                                       |                   |         |         |        |         |        
|Net proceeds from (payments for):                                                                  |                                                                       |                   |         |         |        |         |        
|                                                                                                   | Purchase of long-term corporate development investments               |                   |         | (4,764  | )      |         |       
|                                                                                                   | Purchase of office facilities                                         |                   |         | (1,046  | )      |         |       
|                                                                                                   | Sale of office facilities                                             |                   |         |        |        |         |       
|                                                                                                   | Investment in and advances to joint ventures                          |                   |         | (42,930 | )      |         | (12,431
|                                                                                                   | Short-term investments                                                |                   |         | (39,310 | )      |         | (7,848 
|                                                                                                   |                                                                       |                   |         |         |        |         |        
|Net cash provided by (used in) investing activities                                                |                                                                       |                   | (88,050 | )       |        | (20,279 | )      
|                                                                                                   |                                                                       |                   |         |         |        |         |        
|Cash flows from financing activities:                                                              |                                                                       |                   |         |         |        |         |        
|Net proceeds from (payments for):                                                                  |                                                                       |                   |         |         |        |         |        
|                                                                                                   | Capital contributions from CSFB (USA), Inc.                           |                   |         |        |        |         | 1,000  
|                                                                                                   | Allocated equity from issuance of CSFBdirectCommon Stock              |                   |         |        |        |         | 233,945
|                                                                                                   | Dividend paid to CSFB (USA), Inc.                                     |                   |         |        |        |         | (33,139
|                                                                                                   |                                                                       |                   |         |         |        |         |        
|Net cash provided by financing activities                                                          |                                                                       |                   |        |         |        | 201,806 |        
|                                                                                                   |                                                                       |                   |         |         |        |         |        
|Increase (decrease) in cash and cash equivalents                                                   |                                                                       |                   | (95,460 | )       |        | 210,366 |        
|Cash and cash equivalents at beginning of period                                                   |                                                                       |                   | 237,020 |         |        | 26,654  |        
|                                                                                                   |                                                                       |                   |         |         |        |         |        
|Cash and cash equivalents at end of period                                                         |                                                                       | $                 | 141,560 |         | $      | 237,020 |        
|                                                                                                   |                                                                       |                   |         |         |        |         |        

See
accompanying notes to combined financial statements

F58

---



CSFBdirect(Formerly DLJdirect)(a combination of certain assets
and liabilities as described in note 1)    Notes to Combined Financial Statements        December 31, 2000

1. Basis of Presentation

CSFBdirect(formerly DLJdirect) represents a combination of the
assets and liabilities of the online discount brokerage and related investment services business of Credit Suisse First Boston (USA), Inc. (formerly Donaldson, Lufkin &
Jenrette, Inc. and subsidiaries) ("CSFB (USA), Inc."), rather than a separately incorporated entity. All prior references to Donaldson, Lufkin & Jenrette, Inc. and
DLJdirecthave been changed to CSFB (USA), Inc. and CSFBdirect, respectively. 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 will not have an effect on the outstanding shares of CSFBdirectCommon Stock.

Effective
January 15, 2001, DLJdirectInc. changed its name to
CSFBdirectInc. Costs incurred as a result of the name change are included in merger-related costs in the combined statements of operations.

CSFBdirectCommon Stock tracks the separate performance of these businesses for periods subsequent to the date of the offering. On
May 28, 1999, CSFB (USA), Inc. issued in an initial public offering 18.4 million shares of CSFBdirectCommon Stock. The shares of
CSFBdirectCommon Stock have no voting rights, except in certain limited circumstances, and holders of
CSFBdirectCommon 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, i.e., Investment Banking,
Fixed Income, Equity and Financial Services, 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) has a retained interest of 82.1% in CSFBdirectrepresented by 84.3 million notional shares. The
18.4 million shares of CSFBdirectCommon Stock reflect the 17.9% owned by the public. Prior to the offering, CSFB (USA) had a 100% interest in
the earnings of CSFBdirect.

The
CSFBdirectCommon 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
CSFBdirectCommon 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.

F59

---

2. Summary of Significant Accounting Policies

To prepare combined financial statements in conformity with generally accepted accounting principles, 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 reclassifications have
been made to prior year combined financial statements to conform to the 2000 presentation.

Substantially
all of the financial assets and liabilities allocated to CSFBdirect, including short-term investments, are
carried at fair value or are carried at amounts which approximate fair value because of their short-term nature. Fair value is estimated at a specific point in time, based on relevant
market information.

Cash
equivalents include all demand deposits held in banks and certain highly liquid investments with maturities of 90 days or less.

Securities
transactions, commission revenue, and brokerage, clearing and exchange fees are recorded on a settlement date basis and, if significant, adjustments are made to a trade
date basis. Receivables from brokers, dealers and other, net in the accompanying combined statements of financial condition primarily consists of revenues earned from customer transactions, net of an
estimated allowance for doubtful accounts.

Long-term
corporate development investments represent CSFBdirect'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; therefore, these investments, are carried at estimated fair
value. The cost of these investments was $5.5 million at December 31, 2000. In 2000, the decrease in net unrealized depreciation amounted to $28,000. Changes in net unrealized
depreciation arising from changes in fair value or upon realization are reflected in other revenues in the accompanying combined statements of operations.

Office
facilities are carried at cost and are depreciated on a straight-line basis over the estimated useful life of the related assets, ranging from three to eight years.
Leasehold improvements are amortized over the lesser of the useful life of the improvement or the term of the lease.

Advertising
costs are expensed as incurred.

Investment
in joint ventures is accounted for by the equity method.

Assets
and liabilities of foreign joint ventures denominated in foreign currencies are translated at exchange rates prevailing at the date of the combined statements of financial
condition. Revenues and expenses are translated at average exchange rates during the period. Gains and losses from translating foreign currency financial statements into U.S. dollars (net of taxes)
are included as a separate component of allocated equity.

CSFB
(USA), Inc. allocates certain general administrative and facilities expenses to CSFBdirectusing a proportional cost
methodology based on the relative number of employees and square foot usage of CSFBdirector on actual costs incurred.

F60

---

CSFBdirectaccounts for stock-based compensation related to stock options in accordance with APB Opinion No. 25, "Accounting for
Stock Issued to Employees," and, accordingly, does not recognize any compensation cost associated with such plans in the combined financial statements. In accordance with SFAS No. 123,
"Accounting for Stock-Based Compensation," CSFBdirectprovides pro forma net income
and pro forma earnings per share disclosures for employee stock option grants as if the fair-value-based method had been applied.

Basic
and diluted earnings per common share amounts are calculated by dividing earnings applicable to common shares by the weighted average common shares outstanding. Basic earnings
per share excludes the dilutive effects of stock options. Diluted earnings per share reflects all potentially dilutive securities.

Pursuant
to SFAS No. 131, "Disclosures about Segments of an Enterprise and Related Information," CSFBdirectoperates in one
reportable segment as a provider of online discount brokerage services. CSFBdirect's involvement in foreign operations is not significant.

3. Investment in Foreign Joint Ventures

CSFBdirecthas a 50% interest in foreign-based joint ventures in Japan
(DLJdirectSFG Securities Inc.), Hong Kong (Hutchison CSFBdirectHoldings Limited) and the Middle
East (CSFBdirect-eUnion). CSFBdirectaccounts for these investments on the equity method.
DLJdirectSFG Securities Inc., Hutchison CSFBdirectHoldings Limited and
CSFBdirect-eUnion are referred to as the "Joint Venture Entities."

Summarized
financial information for the Joint Venture Entities for the years ended December 31, 2000 and 1999 are as follows:

|                                                      |  | 2000 |         | 1999 |  
|----------------------------------------------------- |  | ---- | ------- | ---- | -
|
|Total assets                                          |  | $    | 742,827 |      | $
|                                                      |  |      |         |      |  
|Total liabilities                                     |  | $    | 698,252 |      | $
|                                                      |  |      |         |      |  
|Loss before income tax benefit                        |  | $    | (21,524 | )    | $
|                                                      |  |      |         |      |  
|Net loss (CSFBdirectshare, net of income tax benefit) |  | $    | (6,995  | )    | $
|                                                      |  |      |         |      |  

CSFBdirect's unconsolidated joint ventures in the Middle East and Hong Kong began trading in April 2000, and subsequent to
December 31, 2000, respectively. The financial information presented above for the year ended 1999 represents only the operations of DLJdirectSFG Securities which commenced operations in April 1999.

F61

---

4. Related Party Transactions

CSFBdirecttransacts business with a group of companies affiliated through common majority ownership with CSFB
(USA), Inc. ("affiliates"), 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.

Pursuant
to clearing agreements between CSFBdirectand affiliates all securities transactions of
CSFBdirectare cleared on a fully disclosed basis through an affiliate which amounts are included in brokerage, clearing, exchange and other fees in the
accompanying combined statements of operations. In connection with such transactions, CSFBdirecthad $447,000 and $329,000 on deposit with CSFB
(USA), Inc. at December 31, 2000 and 1999, respectively.

The
following summarizes the income/expense components generated from transactions with affiliates for the years ended December 31, 2000, 1999 and 1998.

|                                             |  | December 31,
|-------------------------------------------- |  | ------------
|
|
|Fee income                                   |  | $           
|Interest income                              |  |             
|Brokerage, clearing, exchange and other fees |  |             

Fee
income includes amounts received from affiliates for order flow and technology development. Interest income includes amounts received by
CSFBdirectfrom affiliates for interest earned on CSFBdirect's customers' balances.

On
December 29, 2000, CSFBdirectreceived a $18.8 million note receivable from
DLJdirectSFG Securities Inc., a 50% owned joint venture in Japan. The note bears interest at 1.42% and matures on March 30, 2001.

For
the year ended December 31, 1998, other operating expenses included $5.2 million for a license agreement with an affiliate. The affiliate has licensed certain
trademarks, service marks, trade names and other proprietary rights to various words, slogans, symbols and logos to CSFBdirectfor use in its provision
of financial services and sale or other distribution of related financial goods. In March 1999, CSFBdirectentered into a new license agreement
and an amended clearing agreement. The amounts paid by CSFBdirectunder the clearing agreement include payments in respect of the license fee for the
use of the trademarks. If such agreements were entered into in prior years under these conditions, management believes that there would have been no material effect upon the total costs and expenses
of CSFBdirect.

Employees
of CSFBdirectparticipate in CSFB (USA), Inc.'s defined contribution employee benefit plans. Certain key employees of
CSFBdirectparticipate in stock options, long-term incentive compensation and restricted stock unit employee benefit plans and various
deferred compensation arrangements, as well as other non-qualified plans which are funded by insurance contracts. Expenses associated with these compensation arrangements are reflected in
CSFBdirect's combined statements of operations.

F62

---

5. Income Taxes

CSFBdirectis part of a group that files consolidated Federal income tax returns.
CSFBdirectrecords the settlement of all current and deferred income taxes in the intercompany account with CSFB (USA), Inc. under a tax sharing
arrangement. Taxes are provided as if CSFBdirectfiled a separate return. Income tax provision (benefit) included in the combined statements of
operations is as follows:

December 31,2000

1999

1998(In thousands)Current:U.S. Federal

$
(725
)
$
7,083

$
1,022State and local


(490
)

2,868


261Total current


(1,215
)

9,951


1,283Deferred:U.S. Federal


202


(1,602
)

(236
)State and local


1,196


(456
)

(39
)Total deferred


1,398


(2,058
)

(275
)Total income tax provision

$
183

$
7,893

$
1,008


The
following summarizes the difference between the "expected" tax provision, which is computed by applying the statutory tax rate to income before income tax provision (benefit), and
the effective income tax provision, which is computed by using the effective tax rate.

|                                                                 |  | 2000 |      | 1999 |       | 1998 |  
|---------------------------------------------------------------- |  | ---- | ---- | ---- | ----- | ---- | -
|
|
|Computed "expected" tax provision (benefit)                      |  | $    | (263 | )    | 35.0  | %    | $
|State and local taxes, net of related Federal income tax benefit |  |      | 459  |      | (61.1 | )    |  
|Non-taxable expense items                                        |  |      | (13  | )    | 1.8   |      |  
|                                                                 |  |      |      |      |       |      |  
|Income tax provision (benefit)                                   |  | $    | 183  |      | (24.3 | )%   | $
|                                                                 |  |      |      |      |       |      |  

The
tax effects of temporary differences that give rise to deferred tax assets, which are settled through the intercompany account with CSFB (USA), Inc. at December 31,
2000 are as follows:

2000

1999(In thousands)Deferred tax assets:Deferred compensation and other

$
1,439

$
2,837


F63

---

Management
has determined that the realization of the recognized net deferred tax asset of $1.4 million at December 31, 2000 is more likely than not, based on
anticipated future taxable income. CSFBdirectalso has planning strategies available, which may enhance its ability to utilize these tax benefits. As a
result, at December 31, 2000 a valuation allowance has not been recorded against deferred tax assets. However, if estimates of future taxable income are reduced, the amount of the deferred tax
assets considered realizable could also be reduced.

6. Net Capital

CSFBdirectincludes CSFBdirectInc., a registered
broker-dealer and a member of the National Association of Securities Dealers, Inc. ("NASD"). CSFBdirectInc. (formerly
DLJdirectInc.) is subject to the minimum net capital requirements of the Securities and Exchange Commission and the NASD. As such, it is subject
to the NASD's net capital rule, which conforms to the Uniform Net Capital Rule pursuant to Rule 15c3-1 of the Securities Exchange Act of 1934. As a broker-dealer that 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 December 31, 2000,
CSFBdirectInc.'s net capital of $17.9 million was in excess of the minimum requirement by $17.6 million.

CSFBdirect's London-based broker-dealer affiliate, DLJdirectLtd., is subject to
the requirements of the Securities and Futures Authority, a self-regulatory organization established pursuant to the United Kingdom Financial Services Act of 1986. At December 31,
2000, CSFBdirectcomplied with all applicable regulatory capital adequacy requirements.

7.  Concentrations of Credit Risk

In
the normal course of business, CSFBdirect's affiliated clearing broker makes loans to
CSFBdirect's customers collateralized by customer securities. The affiliated clearing broker extends credit for the customer margin accounts of
CSFBdirect. In permitting the customers to purchase securities on margin, CSFBdirectis exposed to the
risk of a market decline that could reduce the value of the collateral held to below the customers' indebtedness before the collateral can be sold, which could result in losses to
CSFBdirect. CSFBdirectseeks to control the risk associated with its customer activities by making
credit inquiries when establishing customer relationships and by monitoring customer trading activity.

Credit
risk is the amount of accounting loss CSFBdirectwould incur if a customer failed to perform its obligations under contractual
terms. Substantially all of the clearing and depository operations for CSFBdirectare performed by its affiliated clearing broker pursuant to a
clearance agreement. The affiliated clearing broker reviews as considered necessary, the creditworthiness of the customers with which CSFBdirectconducts business. CSFBdirect's exposure to credit risk associated with the nonperformance by customers in fulfilling their contractual obligations
pursuant to securities transactions can be directly affected by volatile securities markets, credit markets and regulatory changes.

F64

---

8.  Employee Compensation and Benefit Plans

1999 Incentive Compensation PlanCSFBdirectCommon
Stock

Awards
under the 1999 Incentive Compensation Plan (the "Plan") are determined by the Compensation and Management Committee of the Board of Directors of CSFB (USA), Inc. Under
the Plan, stock options on CSFBdirectstock are granted at a price equal to the fair value of the stock at the date of grant. The options are
exercisable for up to 10 years from the date of grant and vest in four equal annual installments starting one year from the date of grant. Under the Plan, 10,000,000 shares are issuable.

The
following summarizes the stock option activity:

Options

Weighted Average
Exercise PriceOutstanding at December 31, 1998



$
Granted

6,303,550

$
19.76Forfeited

(106,500
)
$
20.00Exercised




Outstanding at December 31, 1999

6,197,050

$
19.76Granted

3,975,850

$
8.59Forfeited

(425,329
)

16.20Exercised




Outstanding at December 31, 2000

9,747,571

$
15.37


The
following summarizes information related to stock options outstanding at December 31, 2000:

Exercise Prices

Number Outstanding

Weighted Average
Exercise Price

Weighted Average Remaining
Life (Years)$ 5.06 7.94

1,131,125

$
5.92

9.7$ 7.9511.00

2,718,279


15.60

9.3$11.0114.13

193,750


14.09

8.8$14.1420.00

5,704,417


20.00

8.4Total

9,747,571

$
15.37

8.8


At
December 31, 2000, there were approximately 2,061,049 options exercisable at prices ranging from $9.56 to $20.00. The weighted average exercise price of these options was
$16.89. At December 31, 1999, there were no options on CSFBdirectCommon Stock exercisable.

CSFBdirectaccounts for its stock option plans in accordance with APB Opinion No. 25 and, accordingly, does not recognize any
compensation cost associated with such plans in the combined financial statements. If CSFBdirecthad calculated compensation cost under SFAS
No. 123 (based on

F65

---

the fair value of options at the grant date), CSFBdirectwould have reported the following net income (loss) for the period the
CSFBdirectCommon Stock was outstanding:

2000

1999(in thousands)Net income (loss)

As reported

$
(7,930
)
$
6,932Pro forma

$
(21,407
)
$
1,490


The
fair value of each option is estimated on the date of grant using the Black-Scholes option-pricing model. For options granted during 2000 and 1999
CSFBdirectused the following weighted average assumptions, respectively: expected volatility of 62% and 45%, risk-free interest rates of
5.92% and 5.69%, and an expected life of five years for all grants. The weighted average fair value per share of options granted during 2000 and 1999 was $5.04 and $9.30, respectively.

9.  Leases, Commitments

CSFBdirectprimarily obtains its office space and equipment under cancelable and non-cancelable operating lease agreements
through an affiliate. Such operating leases expire on various dates through 2019. Expenses related to leased premises, equipment and technology for the years ended December 31, 2000, 1999 and
1998 was $15.8 million, $4.9 million and $3.0 million, respectively.

At
December 31, 2000, non-cancelable operating leases in excess of one year, excluding escalation and renewal options, had the following minimum lease commitments:

Period

(In thousands)2001

$
37,6022002


37,1672003


33,9812004


31,1902005


25,5852006-2019


85,904Total

$
251,429


In
the normal course of business, CSFBdirectenters into marketing and promotional agreements that focus on brand awareness. In
connection with these agreements, at December 31, 2000, CSFBdirecthad non-cancelable commitments in excess of one year of
approximately $20 million.

10.  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

F66

---

material adverse effect on the combined financial condition or combined results of operations of CSFBdirect.

11.  Subsequent Events

On March 14, 2001, CSFBdirectannounced that it will close its Parsippany, New Jersey call center as a
measure to reduce expenses by consolidating customer service at its other locations. CSFBdirectwill take a one-time quarterly
pre-tax charge of approximately $9.0 million (unaudited) 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), Inc. announced its intention to acquire for $4.00 per share the 18,400,000 shares of its
CSFBdirectCommon Stock owned by the public. The proposed transaction is subject to the approval of CSFB (USA), Inc's board of directors and the
negotiation and execution of definitive documentation.

12.  Quarterly Data (Unaudited)

|      |                | Total Net
Revenues |            | Income
(Loss) Before
Income Tax
Provision
And Equity in
Net Loss Of
Joint Venture |   | Net
Income
(Loss) |        
|----- | -------------- | ------------------ | ---------- | --------------------------------------------------------------------------------- | - | ----------------- | -------
|
|2000: |                |                    |            |                                                                                   |   |                   |        
|      | First quarter  |                    | $          | 114,213                                                                           |   | $                 | 25,469 
|      | Second quarter |                    |            | 83,614                                                                            |   |                   | (7,917 
|      | Third quarter  |                    |            | 78,978                                                                            |   |                   | (3,104 
|      | Fourth quarter |                    |            | 79,991                                                                            |   |                   | (15,200
|      |                |                    |            |                                                                                   |   |                   |        
|      |                |                    | Total year |                                                                                   | $ | 356,796           |        
|      |                |                    |            |                                                                                   |   |                   |        
|1999: |                |                    |            |                                                                                   |   |                   |        
|      | First quarter  |                    | $          | 47,202                                                                            |   | $                 | 11,261 
|      | Second quarter |                    |            | 59,674                                                                            |   |                   | 11,241 
|      | Third quarter  |                    |            | 54,881                                                                            |   |                   | (3,728 
|      | Fourth quarter |                    |            | 76,314                                                                            |   |                   | (734   
|      |                |                    |            |                                                                                   |   |                   |        
|      |                |                    | Total year |                                                                                   | $ | 238,071           |        
|      |                |                    |            |                                                                                   |   |                   |        

F67

---

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this amendment to be signed
on its behalf by the undersigned, hereunto duly authorized, on the 2nd day of October, 2001.

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

Pursuant to the requirements of the Securities Exchange Act of 1934, this amendment has been signed below by the following persons on behalf of the registrant
and in the capacities and on the dates indicated.

|Name                                           |  | Title                                                                              |  | Date           
|---------------------------------------------- |  | ---------------------------------------------------------------------------------- |  | ---------------
|/s/ANTHONY F. DADDINO*Anthony F. Daddino       |  | Director, Chief Financial and Administrative Officer (Principal Financial Officer) |  | October 2, 2001
|/s/DAVID C. FISHERDavid C. Fisher              |  | Chief Accounting Officer (Principal Accounting Officer)                            |  | October 2, 2001
|/s/ROBERT M. BAYLIS*Robert M. Baylis           |  | Director                                                                           |  | October 2, 2001
|/s/BRADY W. DOUGAN*Brady W. Dougan             |  | Director, Division HeadSecurities                                                 |  | October 2, 2001
|/s/CAROL B. EINIGER*Carol B. Einiger           |  | Director                                                                           |  | October 2, 2001
|/s/GATES H. HAWN*Gates H. Hawn                 |  | Director, Division HeadFinancial Services                                         |  | October 2, 2001
|/s/HAMILTON E. JAMES*Hamilton E. James         |  | Director, Division Co-HeadInvestment Banking                                      |  | October 2, 2001
|/s/PHILIP K. RYAN*Philip K. Ryan               |  | Director                                                                           |  | October 2, 2001
|/s/RICHARD E. THORNBURGH*Richard E. Thornburgh |  | Director, Division HeadFinance, Administration and Operations                     |  | October 2, 2001

---

|/s/MAYNARD J. TOLL, JR.*Maynard J. Toll, Jr. |  | Director                                      |  | October 2, 2001
|-------------------------------------------- |  | --------------------------------------------- |  | ---------------
|/s/CHARLES G. WARD III*Charles G. Ward III   |  | Director, Division Co-HeadInvestment Banking |  | October 2, 2001

|*By: |  | /s/DAVID C. FISHERDavid C. Fisher
Attorney-in-fact |  |  |  | 
|---- |  | -------------------------------------------------- |  |  |  | 

---



INDEX TO EXHIBITS

|Exhibit No. |  | Description                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2.1         |  | Agreement and Plan of Merger, dated as of August 30, 2000, among Credit Suisse Group, Diamond Acquisition Corp. and the Registrant, as amended (incorporated by reference to Exhibit (d)(1) to the Tender Offer Statement on Schedule TO filed by Credit
Suisse Group and the Diamond Acquisition Corp. in relation to the Registrant on September 8, 2000 and Exhibit (d)(5) to Amendment No. 2 to such Tender Offer Statement on Schedule TO/A filed by Credit Suisse Group and the Diamond Acquisition Corp. in
relation to the Registrant on October 6, 2000).
|2.2         |  | Stock Purchase Agreement, dated as of August 30, 2000, among Credit Suisse Group and the AXA entities named therein, as amended (incorporated by reference to Exhibit (d)(2) to the Tender Offer Statement on Schedule TO filed by Credit Suisse Group and
the Diamond Acquisition Corp. in relation to the Registrant on September 8, 2000 and Exhibit (d)(6) to Amendment No. 2 to such Tender Offer Statement on Schedule TO/A filed by Credit Suisse Group and the Diamond Acquisition Corp. in relation to the
Registrant on October 6, 2000).               
|3.1         |  | Amended and Restated Certificate of Incorporation of Registrant.*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|3.2         |  | By-laws of the Registrant (Incorporated by reference to the corresponding exhibit to the Registrant's Registration Statement on Form S-1, File No. 33-96276).                                                                                                                                                                                                                                                                                                                                                                                                     
|4.1         |  | Certificate of Designation of the Registrant's Fixed/Adjustable Rate Cumulative Preferred Stock, Series A (Incorporated by reference to Exhibit 4.3 to the Registrant's Registration Statement on Form S-3, File No. 33-80771).                                                                                                                                                                                                                                                                                                                                   
|4.2         |  | Certificate of Designation of the Registrant's Fixed/Adjustable Rate Cumulative Preferred Stock, Series B (Incorporated herein by reference to Exhibit 99.1 to the Registrant's Form 8-K, dated January 8, 1998; Item 5).                                                                                                                                                                                                                                                                                                                                         
|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.                                                                                                                                                                                                                                      
|10.1        |  | Donaldson, Lufkin & Jenrette, Inc. 1995 Stock Option Plan (Incorporated by reference to Exhibit 10.7 to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1995).                                                                                                                                                                                                                                                                                                                                                                
|10.2        |  | Donaldson, Lufkin & Jenrette, Inc. 1996 Stock Option Plan (Incorporated by reference to Annex A of the Registrant's Proxy Statement on Schedule 14A filed on March 22, 1996 and furnished to shareholders in connection with the solicitation of
proxies for the Registrant's annual meeting of shareholders held on April 30, 1996).                                                                                                                                                                                                                            
|10.3        |  | 1996 Non-Employee Directors Stock Plan (Incorporated by reference to Annex A of the Registrant's Proxy Statement on Schedule 14A filed on March 11, 1997 and furnished to shareholders in connection with solicitation of proxies for the Registrant's
annual meeting of shareholders held on April 16, 1997).                                                                                                                                                                                                                                                   

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|10.4  |  | Donaldson, Lufkin & Jenrette, Inc. 1996 Incentive Compensation Plan (Incorporated by reference to Annex B of the Registrant's Proxy Statement on Schedule 14A filed on March 22, 1996 and furnished to shareholders in connection with the
solicitation of proxies for the Registrant's annual meeting of shareholders held on April 30, 1996).
|----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.5  |  | Credit Suisse Group Management Performance Plan (GMPP) International.*                                                                                                                                                                                                                                                                         
|10.6  |  | Credit Suisse Group International Share Plan.**                                                                                                                                                                                                                                                                                                
|10.7  |  | Form of 1997-1999 Incentive Compensation Unit Agreement.*                                                                                                                                                                                                                                                                                      
|10.8  |  | Form of Split Dollar Insurance Agreement.*                                                                                                                                                                                                                                                                                                     
|10.9  |  | Deferred Compensation Agreement, dated December 30, 1983, between John S. Chalsty and the Registrant (Incorporated by reference to Exhibit 10.11 to the Registrant's Registration Statement on Form S-1, File No. 33-96276).                                                                                                                   
|10.10 |  | Deferred Compensation Agreement, dated December 30, 1983, between Anthony F. Daddino and the Registrant (Incorporated by reference to Exhibit 10.12 to the Registrant's Registration Statement on Form S-1, File No. 33-96276).                                                                                                                
|10.11 |  | Deferred Compensation Agreement, dated December 30, 1983, between Joe L. Roby and the Registrant (Incorporated by reference to Exhibit 10.17 to the Registrant's Registration Statement on Form S-1, File No. 33-96276).                                                                                                                       
|10.12 |  | 1995 Stock Option Plan Agreement, dated October 24, 1995, between Anthony F. Daddino and the Registrant (Incorporated by reference to Exhibit 10.62 of the Registrant's annual report on Form 10-K for the fiscal year ended December 31,
1995).                                                                                               
|10.13 |  | Employment Agreement, dated August 30, 2000, between Credit Suisse First Boston Corporation and Joe L. Roby (Incorporated by reference to exhibit (e) (4) to the Registrant's Schedule 14D-9 filed on September 8, 2000).                                                                                                                      
|10.14 |  | Employment Agreement, dated August 30, 2000, between Credit Suisse First Boston Corporation and Hamilton E. James (Incorporated by reference to exhibit (e) (5) to the Registrant's Schedule 14D-9 filed on September 8, 2000).                                                                                                                
|10.15 |  | Guarantee Agreement, dated October 31, 2000, between the Registrant and Anthony F. Daddino.*                                                                                                                                                                                                                                                   
|10.16 |  | Guarantee Agreement, dated October 30, 2000, between the Registrant and Gates H. Hawn.*                                                                                                                                                                                                                                                        
|10.17 |  | Insurance Agreement, dated October 31, 1995, between the Registrant and Winthrop Trust Company, as Trustee and Owner of the Anthony F. Daddino Insurance Trust dated August 25, 1995. (Incorporated by reference to Exhibit 10.80 to the Registrant's
Annual Report on Form 10-K for the fiscal year ended December 31, 1995).                  
|10.18 |  | Insurance Agreement, dated January 4, 1996, between the Registrant and Dan Curtis Roby, as Trustee and Owner of the Roby 1995 Insurance Trust dated November 27, 1995 (Incorporated by reference to Exhibit 10.84 to the Registrant's Quarterly Report on
Form 10-Q for the period ended June 30, 1996).                                        
|10.19 |  | Insurance Agreement, dated August 27, 1992, between the Registrant and Thomas E. Siegler, as Trustee and Owner of the 1992 Chalsty Insurance Trust dated August 25, 1992 (Incorporated by reference to Exhibit 10.20 to the Registrant's Registration
Statement on Form S-1, File No. 33-96276).                                                

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|10.20 |  | Amendment, dated August 28, 1992, to the Insurance Agreement, dated August 27, 1992, between the Registrant and Michael Cappiccille, as Trustee and Owner of the 1992 Chalsty Insurance Trust dated August 25, 1992 (Incorporated by reference to Exhibit
10.21 to the Registrant's Registration Statement on Form S-1, File No. 33-96276).               
|----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.21 |  | Letter Agreement, dated August 25, 1995, between the Registrant and ACMC, Inc. regarding certain state and local tax sharing arrangements (Incorporated by reference to Exhibit 10.19 to the Registrant's Registration Statement on Form S-1, File
No. 33-96276).                                                                                         
|10.22 |  | Federal Tax Sharing Agreement, dated October 11, 1995, between the Registrant and The Equitable Companies, regarding certain federal tax sharing arrangements (Incorporated by reference to Exhibit 10.22 to the Registrant's Registration Statement on
Form S-1, File No. 33-96276).                                                                     
|10.23 |  | Agreement of Lease, dated October 24, 1996, between 99 Bishopsgate Limited, Landlord, and DLJ International Limited, Tenant and the Registrant, Tenant's Guarantor, on 99 Bishopsgate London, EC2, United Kingdom (Incorporated by reference to Exhibit
10.23 to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1996).
|10.24 |  | Sublease Agreement, dated December 31, 2000, between The Chase Manhattan Bank and the Registrant, Subtenant, on 277 Park Avenue, New York, New York.*                                                                                                                                                                                                     
|10.25 |  | Agreement of Lease, dated November 10, 1995, between Broadpine Realty Holding Company, Inc. and the Registrant, Tenant, on 120 Broadway, New York, New York (Incorporated by reference to Exhibit to the Registrant's Annual Report on Form 10-K for the
fiscal year ended December 31, 1995).                                                            
|10.26 |  | Agreement of Lease, dated June 3, 1998, between USF Nominees Limited, Landlord, DLJ UK Properties Limited, Tenant, on 111 Old Broad Street, London and the Registrant, Surety (Incorporated herein by reference to Exhibit 10.92 of the Registrant's
quarterly report on Form 10-Q for the period ended June 30, 1998).                                   
|10.27 |  | Sublease Agreement, dated June 16, 1998, between Furman Selz, LLC, Sublandlord and the Registrant, Subtenant, on 280 Park Avenue, New York, New York (Incorporated herein by reference to Exhibit 10.93 of the Registrant's quarterly report on Form 10-Q
for the period ended June 30, 1998).                                                            
|10.28 |  | Agreement of Lease, dated July 28, 1995, between Metropolitan Life Insurance Company and the Registrant, Tenant, on Eleven Madison Avenue, New York, New York.*                                                                                                                                                                                           
|10.29 |  | Amendment of Lease, dated May 17, 1996, between Metropolitan Life Insurance Company and the Registrant, Tenant, on Eleven Madison Avenue, New York, New York.*                                                                                                                                                                                            
|10.30 |  | Agreement of Lease, dated September 10, 1997, between Metropolitan Life Insurance Company and the Registrant, Tenant, on Eleven Madison Avenue, New York, New York.*                                                                                                                                                                                      
|10.31 |  | Modification of Lease, dated February 5, 1998, between Metropolitan Life Insurance Company and the Registrant, Tenant, on Eleven Madison Avenue, New York, New York.*                                                                                                                                                                                     
|10.32 |  | Second Modification of Lease, dated June 12, 2000, between Metropolitan Life Insurance Company and the Registrant, Tenant, on Eleven Madison Avenue, New York, New York.*                                                                                                                                                                                 
|10.33 |  | Third Modification of Lease, dated September 18, 2000, between Metropolitan Life Insurance Company and the Registrant, Tenant, on Eleven Madison Avenue, New York, New York.*                                                                                                                                                                             

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|10.34 |  | Fourth Modification of Lease, dated November 13, 2000, between Metropolitan Life Insurance Company and the Registrant, Tenant, on Eleven Madison Avenue, New York, New York.*                      
|----- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.35 |  | Agreement of Sublease, dated August 31, 1999 between GFT Apparel Corp. and the Registrant, Subtenant, on Eleven Madison Avenue, New York, New York.*                                               
|10.36 |  | Agreement of Lease, dated November 13, 2000, between Metropolitan Life Insurance Company and the Registrant, Tenant, on Eleven Madison Avenue, New York, New York.*                                
|10.37 |  | Agreement of Lease, dated February 22, 2001, between Metropolitan Life Insurance Company and the Registrant, Tenant, on One Madison Avenue, New York, New York.*                                   
|10.38 |  | Agreement of Sublease, dated February 22, 2001, between Metropolitan Life Insurance Company and the Registrant, Landlord, on One Madison Avenue, New York, New York.*                              
|10.39 |  | Agreement of Lease, dated December 31, 1998, between The Port Authority of New York and New Jersey and the Registrant, Tenant, on 5 World Trade Center, New York, New York.*                       
|10.40 |  | First Supplement of Lease, dated August 15, 2000, between the Port Authority of New York and New Jersey and the Registrant, Tenant, on 5 World Trade Center, New York, New York.*                  
|10.41 |  | Agreement of Lease, dated July 1, 1987, between Grove Street Associates of Jersey City Limited Partnership and the Registrant, Tenant, on One Pershing Plaza, Jersey City, New Jersey.*            
|10.42 |  | First Amendment of Lease, dated July 1, 1987, between Grove Street Associates of Jersey City Limited Partnership and the Registrant, Tenant, on One Pershing Plaza, Jersey City, New Jersey.*      
|10.43 |  | Second Amendment of Lease, dated March 12, 1992, between Grove Street Associates of Jersey City Limited Partnership and the Registrant, Tenant, on One Pershing Plaza, Jersey City, New Jersey.*   
|10.44 |  | Third Amendment of Lease, dated December 27, 1992, between Grove Street Associates of Jersey City Limited Partnership and the Registrant, Tenant, on One Pershing Plaza, Jersey City, New Jersey.* 
|10.45 |  | Fourth Amendment of Lease, dated December 23, 1993, between Grove Street Associates of Jersey City Limited Partnership and the Registrant, Tenant, on One Pershing Plaza, Jersey City, New Jersey.*
|10.46 |  | Fifth Amendment of Lease, dated May 1, 1994, between Grove Street Associates of Jersey City Limited Partnership and the Registrant, Tenant, on One Pershing Plaza, Jersey City, New Jersey.*       
|10.47 |  | Sixth Amendment of Lease, dated March 9, 1995, between Grove Street Associates of Jersey City Limited Partnership and the Registrant, Tenant, on One Pershing Plaza, Jersey City, New Jersey.*     
|10.48 |  | Seventh Amendment of Lease, dated June 16, 1995, between Grove Street Associates of Jersey City Limited Partnership and the Registrant, Tenant, on One Pershing Plaza, Jersey City, New Jersey.*   

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|10.49 |  | Eight Amendment of Lease, dated April 4, 1996, between Grove Street Associates of Jersey City Limited Partnership and the Registrant, Tenant, on One Pershing Plaza, Jersey City, New Jersey.*                       
|----- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.50 |  | Ninth Amendment of Lease, dated April 4, 1996, between Grove Street Associates of Jersey City Limited Partnership and the Registrant, Tenant, on One Pershing Plaza, Jersey City, New Jersey.*                       
|10.51 |  | Tenth Amendment of Lease, dated December 31, 1996, between Grove Street Associates of Jersey City Limited Partnership and the Registrant, Tenant, on One Pershing Plaza, Jersey City, New Jersey.*                   
|10.52 |  | Eleventh Amendment of Lease, dated February 7, 1997, between Grove Street Associates of Jersey City Limited Partnership and the Registrant, Tenant, on One Pershing Plaza, Jersey City, New Jersey.*                 
|10.53 |  | Twelfth Amendment of Lease, dated August 18, 1997, between Grove Street Associates of Jersey City Limited Partnership and the Registrant, Tenant, on One Pershing Plaza, Jersey City, New Jersey.*                   
|10.54 |  | Thirteenth Amendment of Lease, dated January 12, 1998, between Grove Street Associates of Jersey City Limited Partnership and the Registrant, Tenant, on One Pershing Plaza, Jersey City, New Jersey.*               
|10.55 |  | Fourteenth Amendment of Lease, dated December 28, 1998, between Grove Street Associates of Jersey City Limited Partnership and the Registrant, Tenant, on One Pershing Plaza, Jersey City, New Jersey.*              
|10.56 |  | Fifteenth Amendment of Lease, dated June 16, 1999, between Grove Street Associates of Jersey City Limited Partnership and the Registrant, Tenant, on One Pershing Plaza, Jersey City, New Jersey.*                   
|10.57 |  | Sixteenth Amendment of Lease, dated March 31, 2000, between Grove Street Associates of Jersey City Limited Partnership and the Registrant, Tenant, on One Pershing Plaza, Jersey City, New Jersey.*                  
|10.58 |  | Agreement of Lease, dated April 12, 1999, between Cal-Harbor II and III Urban Renewal Associates L.P., Landlord, and the Registrant, Tenant, on the Harborside Financial Center, Jersey City, New Jersey.*           
|10.59 |  | First Amendment of Lease, dated September 30, 1999, between Cal-Harbor II and III Urban Renewal Associates L.P., Landlord, and the Registrant, Tenant, on the Harborside Financial Center, Jersey City, New Jersey.* 
|10.60 |  | Second Amendment of Lease, dated September 30, 1999, between Cal-Harbor II and III Urban Renewal Associates L.P., Landlord, and the Registrant, Tenant, on the Harborside Financial Center, Jersey City, New Jersey.*
|10.61 |  | Third Amendment of Lease, dated December 15, 1999, between Cal-Harbor II and III Urban Renewal Associates L.P., Landlord, and the Registrant, Tenant, on the Harborside Financial Center, Jersey City, New Jersey.*  
|10.62 |  | Fourth Amendment of Lease, dated March 29, 2000, between Cal-Harbor II and III Urban Renewal Associates L.P., Landlord, and the Registrant, Tenant, on the Harborside Financial Center, Jersey City, New Jersey.*    

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|10.63 |  | Agreement of Lease, dated August 15, 2000, between TM Park Avenue Associates and the Registrant, Tenant, on 315 Park Avenue South, New York, New York.*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|----- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.64 |  | Credit Agreement, dated May 30, 1997, among the Registrant, Donaldson, Lufkin & Jenrette Securities Corporation and DLJ Mortgage Capital, Inc., as borrowers, a syndicate of banks named therein, Chase Securities Inc., as arranger, The Chase
Manhattan Bank and Donaldson, Lufkin & Jenrette Securities Corporation, as syndication agents, The Bank of New York, as administrative agent, DLJMC, as collateral agent and payment agent, The First National Bank of Chicago, as documentation agent,
 and DLJSC, as collateral agent and payment agent.*                                                                                                                                                                  
|10.65 |  | First Amended and Restated Credit Agreement, dated May 29, 1998, among the Registrant, Donaldson, Lufkin & Jenrette Securities Corporation and DLJ Mortgage Capital, Inc., as borrowers, a syndicate of banks named therein, Chase Securities Inc., as
arranger, The Chase Manhattan Bank and Donaldson, Lufkin & Jenrette Securities Corporation, as syndication agents, The Bank of New York, as administrative agent, DLJMC, as collateral agent and payment agent, The First National Bank of Chicago, as
documentation agent, and DLJSC, as collateral agent and payment agent (Incorporated herein by reference to Exhibit 10.91 of the Registrant's quarterly report on Form 10-Q for the period ended June 30, 1998).
|10.66 |  | Second Amended and Restated Credit Agreement, dated May 28, 1999, among the Registrant, Donaldson, Lufkin & Jenrette Securities Corporation and DLJ Mortgage Capital, Inc., as borrowers, a syndicate of banks named therein, Chase Securities Inc.,
as arranger, The Chase Manhattan Bank and Donaldson, Lufkin & Jenrette Securities Corporation, as syndication agents, The Bank of New York, as administrative agent, DLJMC, as collateral agent and payment agent, The First National Bank of Chicago,
as documentation agent, and DLJSC, as collateral agent and payment agent (Incorporated by reference to Exhibit 10.95 to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1999).
|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.*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|21.1  |  | Subsidiaries of the Registrant.*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|23.1  |  | Consent of KPMG LLP.*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|24.1  |  | Power of Attorney.*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

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