1999 ANNUAL REVIEW

HELPING clientsCAPITALIZE ON CHANGE

Businesses today must adapt to a whole new kind of change. Not simply

faster or on a larger scale, but change that transforms entire industries.

Change that presents enormous opportunity for those who capitalize on it –

and equally great risk for those who don’t. This puts a premium on business

leaders who are both decisive enough to act and flexible enough to change

direction. And it calls for a different kind of investment bank.

At Credit Suisse First Boston, we’re specialists in change. We understand

it, we’ve lived through it, and we’ve made a name in trading and fast-moving

industries where change is the daily norm. Most importantly, we help clients

capitalize on change to seize opportunity.

We value ideas over process, creativity over bureaucracy. We work harder

for clients to ensure flexibility and consistent execution. And we are truly

global, deploying our capital base, global perspective and clout to offer a

full range of products, services and capabilities to clients worldwide.

AGENTS OF

change

M A R K E T V O L A T I L I T Y : Daily price

moves of 5% are no longer just common — they are

expected. The market rewards those who have the

ability to anticipate change and capitalize on this new

volatility. CSFB has built depth and diversity into its

global sales and trading operations to provide clients

with timely insight into and execution in the world’s

hottest markets and products. In addition, whether

our clients choose to reduce or increase exposures

to these volatile markets, our broad product diversifi-

cation will provide innovative, tailor-made derivatives

and structured products to assist clients in achieving

their desired risk profile.

D E R E G U L A T I O N : The rules

governing the competitive landscape continue to

shift. Government-protected monopolies are being

dismantled and privatized, throwing entire industries

into competitive turmoil. In many sectors, deregulation

provides business opportunities that did not exist

years ago. CSFB identifies those trends. We stay

ahead of the curve; we see where opportunities lie

and where challenges need to be met.

T H E T E C H N O L O G YR E V O L U T I O N : Dramatic technological

innovations have redefined the way the world does

business — it’s faster, more mobile and more complex

than ever. The challenge is to leverage the unprece-

dented opportunities created by technology to help our

clients maintain and improve their competitive position

in an ever-changing global economy. CSFB is a leader in

using technology to benefit our clients — PrimeTradeSM,

PrimeDebtSM, RESEARCHVIEWSM and TradeWeb® give

our clients electronic trading tools for the major mar-

kets, and IPOs@csfb.com is just one example of how

CSFB leverages the Internet to communicate about our

business. Advanced applications such as these, cou-

pled with a robust, secure infrastructure, allow us to do

business with any of our clients from any of our loca-

tions, virtually 24 hours a day, affording CSFB the

competitive edge to respond to its clients’ global needs.

G L O B A L I Z A T I O N : The world is becom-

ing decidedly smaller. Once-distant competitors are

now able to invade each other’s space more readily

than ever before, presenting business challenges and

investment opportunities. CSFB’s global platform

enables the Firm to bring an unmatched global

perspective to clients in every corner of the globe.

T H E E U R O : The launch of the euro was the

most important financial event on the Continent in

decades. This monumental change created a large

foreign-exchange market for the new currency, a

large European market for government bonds and

huge fungible capital markets for companies.

Drawing on the collective insights of its extensive

European infrastructure and its global foreign-

exchange expertise, CSFB was the first to buck the

trend of euphoria about the euro, alerting its clients

to the likely downtrend of the currency in January.

This prediction proved to be accurate — and further

enhanced CSFB’s reputation as the most European of

the large global investment banks.

T H E U N R E L E N T I N G P A C EO F C O N S O L I D A T I O N : Global

mergers and acquisitions activity continues to redefine

virtually every industry. Transactions previously thought

improbable suddenly seem possible. Even the largest

multinational corporations may face the challenge of

“buy or be bought.” In a competitive environment in

which change is the only constant, CSFB partners with

its clients to help them seize opportunities and stay

one step ahead of the competition.

OUR PROMISE IS SIMPLE: we help clients LEVERAGE CHANGE TO MOVE THEIR BUSINESSES FORWARD.

WE SEE CHANGE AS THEIR OPPORTUNITY.

2 3

F R A N C H I S E A N D C U LT U R E

CSFB’s culture and franchise remains distinctive among the

world’s leading investment banks for its internationalism,

breadth and openness to change — all key attributes for

success in the “new economy.” At the same time, the

renaissance of the Firm’s market positions has been accom-

panied by strong improvements in unifying culture and

improving cohesion and staff retention. Management is

committed to building on this progress.

The sanctions imposed on CSFP in Japan, while unfair in

our judgment, serve to highlight the legal, regulatory and

operational risks of our industry and the absolute requirement

for a strong control environment and exemplary employee

behavior. CSFB expects to deliver on these standards as well.

The achievements of 1999 were based on the trust and

confidence of our clients with whom we are gratified to work

in record numbers around the world. They also depend on the

loyalty, dedication, energy, talent and creativity of our 15,000

employees globally. I would like to thank them too. Together,

whether in infrastructure and technology, trading, sales,

research or corporate finance, they served this Firm well.

I am also pleased to report a management change we

announced in March 2000, unifying the leadership of the

Investment Banking and Equities Divisions under Brady

Dougan and Chuck Ward, and Chuck is assuming the role of

President of our Firm. In addition, we added two new mem-

bers, Paul Calello and Christopher Carter, to our Executive

Board. I am confident this will help accelerate the progress of

these businesses, where alignment is increasingly important.

O U T L O O K 2 0 0 0

In 2000, CSFB’s goals are demanding yet straightforward:

to help our clients capitalize on change, to invest in our own

business and to realize the rewards of that investment in

improved market shares, infrastructure effectiveness and

shareholder value. We face 2000 recognizing the volatility

and challenges of our industry, but with confidence in

CSFB’s continued progress.

Allen D. Wheat

Chairman of the Executive Board

and Chief Executive Officer

The dawn of a new millennium offers great perspective on

the trends shaping our world. Spearheaded by the Internet

revolution, businesses, markets and the world economy in

general are changing and adapting at unprecedented speed.

The Investment Banking industry sits at the apex of this

transformation. Our mission and function at CSFB is to help

direct, intermediate and facilitate flows of capital and to

advise our clients on restructuring and adapting their indus-

tries to take advantage of change.

CSFB is positioned at the forefront of our industry, har-

nessing change for clients and in our own activities. In just

over 18 months, we have become the global leader in advis-

ing the diverse technology industry on its dramatic evolution.

In other industries our teams are also prominent in helping

investors, governments and companies alike to capitalize on

change in their own areas.

To meet these challenges, CSFB has transformed itself

over the last three years with tremendous growth in market

shares, business diversity, reach and financial substance.

1999 itself was a year of outstanding achievement and

robust financial results at CSFB. Across many products and

geographies our client service earned increases in market

share for the third successive year, cementing CSFB as the

“momentum” firm among the world’s investment banking

leaders. The investments of 1997/8 are paying off hand-

somely and we have continued to invest in building client

capabilities, modernizing infrastructure and positioning

advantageously for E-commerce — and thereby for greater

shareholder value for the future.

B U S I N E S S R E S U LT S

1999 Revenues and Net Income reached records of $9.8 bil-

lion and $1.26 billion, respectively — especially pleasing given

the loss in 1998 triggered primarily by the Russian default.

Activity and profit were more broadly based than ever

before. Yet the Firm’s risk profile declined as planned, and

capital ratios for the Bank strengthened still further (BIS Tier 1

— 9.9% at December 31).

All divisions enjoyed improved results. Most notable was

the Equities Division, which, for the first time, became CSFB’s

largest profit contributor on the strength of nearly doubled rev-

enues. All businesses and market shares improved strongly,

further enhancing CSFB’s global “bulge bracket” positioning.

In tandem with the Equities’ advances, Investment

Banking also grew market shares and revenues. Outstanding

results in the Technology practice vindicated the expansion

initiated in 1998 and strong growth in Europe (actual and in

prospect) underscores the value of our acquisition of BZW

and other investments made in 1997/8.

Fixed Income & Derivatives (“FID”) produced a strong

earnings recovery on a revenue gain of 63%. This was driven

by customer flows, most notably in Credit products, and by

outstanding contributions from the restructured Emerging

Markets businesses. This included Garantia in Latin America

(acquired in 1998), which contributed impressively. FID

return on equity was held back by provisioning in the real

estate area, where risk is being substantially reduced.

CHIEF

EXECUTIVE’S

letter

CSFB IS POSITIONED ATTHE FOREFRONT OF OURINDUSTRY, HARNESSINGCHANGE FOR CLIENTS ANDIN OUR OWN ACTIVITIES.

4 5

PERCENTDOLLARS IN MILLIONS (UNAUDITED) 1999 1998 CHANGE

For the year

Revenues $ 9,753 $ 6,713 45%

Operating expenses $ 7,190 $ 5,341 35%

Gross profit $ 2,563 $ 1,372 87%

Net income (loss) (1) $ 1,262 $ (77) na

At year-end

Total shareholder’s equity $ 7,795 $ 7,135 9%

Total assets $ 275,224 $ 290,696 -5%

Selected ratios

Return on average equity (1) 19% -1%

Pretax profit margin (1) 18% 1%

Expense/revenues 74% 80%

Staff expense/revenues 55% 56%

Tier 1 BIS-based capital ratio (2) 9.9% 8.4%

Total BIS-based capital ratio (2) 17.9% 15.4%

Employees 15,185 14,126 7%

(1) Excludes extraordinary/exceptional items and minority interests.(2) These ratios apply to the Bank.

IMPORTANT

ADVANCES IN

MARKET SHARE

1999 CHANGE VS. 1998

CSFB CSFB CSFB CSFBRANK SHARE RANK SHARE

Global Debt 4 7.2% +1 -0.1%

Global Equity (1) 5 7.0% +3 +2.4%

Global M&A (2) 4 15.4% +1 -0.6%

US Secondary Equity Listed 6 5.8% 0 +1.1%

Equity Research

North America 5 40(3) +1 +13

Europe 4 26(3) +2 +10

(1) Includes equity-linked securities.(2) Based on announced transactions.(3) Number of ranked analysts. Europe reflects latest (February 2000) ranking versus prior year.

Sources: Securities Data Company, McLagan, Institutional Investor

FINANCIAL

HIGHLIGHTS

highlightsOF 1999

A LEADER IN

innovation

BEST BANK OF THE LAST 25 YEARSInternational Financing Review

BEST BOND HOUSE OF THE LAST 25 YEARSInternational Financing Review

EASTERN EUROPE, MIDDLE EAST, AND AFRICABOND HOUSE OF THE YEAR

International Financing Review

BEST PROJECT FINANCE BOND MANAGERProject Finance

PEERS’ POLL: BEST LEAD MANAGER OF EMERGING MARKET BONDS

Euroweek

AMERICAS SECURITIZATION HOUSE OF THE YEAR

International Financing Review

M&A INVESTMENT BANK OF THE YEARMergers & Acquisitions: The Dealmaker’s Journal

INVESTMENT BANK OF THE DECADECentral European

US TECHNOLOGY HOUSE OF THE YEARECM (an IFR publication)

BEST UNDERWRITER OF ASSET-BACKEDSECURITIES

Euromoney

BEST REGIONAL BANK IN EUROPE FORRESEARCH

Global Finance

EQUITY HOUSE OF THE YEAR – JOINT WINNERInsto

EUROPEAN EQUITY HOUSE OF THE YEARInternational Financing Review and ECM

EQUITY HOUSE OF THE DECADECentral European

6 7

TRANSACTION AWARD PUBLICATION

Agora Best East Europe IPO Emerging Markets Investor

Corporate Finance Institutional Investor

IPO Deal of the Year Central European

Al Taweelah A2 Middle East Power and Water Deal of the Year Project Finance

Power Deal of the Year, Europe/Africa/Middle East Project Finance International

ASARCO/Grupo México Mergers & Acquisitions Institutional Investor

AT&T/MediaOne Breakthrough Deal – Telecoms Investment Dealers’ Digest

Deal of the Year: Mergers & Acquisitions Investment Dealers’ Digest

Mergers & Acquisitions Institutional Investor

Banco Hipotecario Best Privatization IPO Euromoney

Public Equity – Editor’s Choice Award Latin Finance

Calpine Best US Project Finance Deal Euromoney

Deal of the Year: Project Finance Investment Dealers’ Digest

North America Power Deal of the Year Project Finance

Commerce One Deal of the Year: E-commerce Investment Dealers’ Digest

Compañía Mega Latin America Oil and Gas Deal of the Year Project Finance

Project Finance Institutional Investor

Project Finance – Editor’s Choice Award Latin Finance

Conoco Deal of the Year, Bonds Euromoney

Highly Commended – Bond by a North American Issuer Corporate Finance

Dabhol Power Asia-Pacific Project Finance Loan International Financing Review

Asia Power Deal of the Year Project Finance

Asian Project Finance Deal IFR Asia

Best Project Finance Deal Finance Asia

Best Project Finance Deal, Asia Global Finance

Project Finance Institutional Investor

Winner, Project Finance Corporate Finance

DaimlerChrysler Deal of the Year, Bonds Euromoney

Edison Mission Energy Best Project Finance Deal, Europe Global Finance

Project Finance Institutional Investor

Esat Telecom Best High Yield Bond Issue euro

Fannie Mae Deal of the Decade Euroweek

Federated/Fingerhut Breakthrough Deal – E-commerce Investment Dealers’ Digest

Firstar Corporation/ Best US M&A Deal EuromoneyMercantile Bancorporation

Freddie Mac Deal of the Year – Agencies Euroweek

Freeserve Corporate Finance Institutional Investor

One of Eight Deals of the Year The Treasurer

GMAC CARAT 1999-2 Breakthrough Deal – Structured Finance Investment Dealers’ Digest

GMAC Swift Trust Deal of the Year – Swiss Francs Euroweek

Swiss Franc Bond International Financing Review

Hoechst/Celanese Highly Commended – Demerger Corporate Finance

Husky Terra Nova North America Oil and Gas Deal of the Year Project Finance

Jazztel Telecommunicaciones Corporate Finance Institutional Investor

J.C. Penney/Genovese Mid-Market Deal of the Year Mergers & Acquisitions

Korea Electric Power Company Best Privatization Deal Global Finance

Lebanese Republic Best Mid-East Sovereign Issue Emerging Markets Investor

Pasminco/Savage M&A Deal of the Year Insto

People’s Republic of China Asia-Pacific Bond International Financing Review

Asian Bond Deal IFR Asia

Pepsi Bottling Highly Commended – Bond by a North American Issuer Corporate Finance

PLDT/Smart/NTT Best M&A Deal Finance Asia

Port Arthur Industrial Deal of the Year, Americas Project Finance International

Republic of Brazil Breakthrough Deal – Emerging Markets Investment Dealers’ Digest

Republic of Croatia Sovereign Issue Institutional Investor

Republic of Slovakia Best Central Europe Sovereign Issue Emerging Markets Investor

Euro-denominated Eurobond Debt Deal of the Year Central European

Republic of Slovenia Euro-denominated Sovereign Eurobond Runner-up Central European

Republic of South Africa Eastern Europe, Middle East, and Africa Bond International Financing Review

STMicroelectronics European Secondary Offering ECM (an IFR publication)

TD Waterhouse Best US Financial Services IPO Euromoney

Telstra Asia-Pacific Secondary Offering ECM (an IFR publication)

Australia Equity Deal IFR Asia

TotalFina/Elf Aquitaine Best Merger euro

Breakthrough Deal – Mergers & Acquisitions Investment Dealers’ Digest

Deal of the Year: Energy Investment Dealers’ Digest

Highly Commended, M&A (Takeover) Corporate Finance

Mergers & Acquisitions Institutional Investor

United Kingdom Deal of the Decade Euroweek

YPF/Repsol Best Mergers & Acquisitions Deal, Latin America Global Finance

Breakthrough Deal – Energy Investment Dealers’ Digest

Deal of the Year, Mergers & Acquisitions Euromoney

Mergers & Acquisitions Institutional Investor

Mergers & Acquisitions Deal of the Year Latin Finance

Mergers & Acquisitions – Editor’s Choice Award Latin Finance

Winner, M&A (Takeover) Corporate Finance

HOUSE AWARDS ENTITY

(See additional House Awards listed on page 5) AWARD PUBLICATION

Credit Suisse First Boston Best Bank in M&A in Asia for Utilities and Energy Global Finance

Best Bank in M&A in Europe for Food, Beverage Global Financeand Consumer Products

Best Bank in M&A in Europe for Leisure Global Financeand Property Companies

Best Bank in M&A in Europe for Technology, Global FinanceElectronics, and Defense

Best Bank in M&A in Europe for Transportation Global Financeand Automotives

Best Bank in M&A in North America for Food, Global FinanceBeverage, and Consumer Products

Best Bank in M&A in North America for Global FinanceMetals and Mining

Best Bank in M&A in North America for Global FinanceTransportation and Automotives

Best Bank in Project Finance in Emerging Asia Global Finance

Best Foreign Securities Firm in the U.S. Euromoney

Best Project Finance Bond Manager Project Finance

Best Regional Bank in Europe for Equity Origination Global Finance

Best Securities Firm in New Zealand Euromoney

M&A House of the Year Insto

Peers’ Poll: Best Lead Manager of Bonds for Eastern EuroweekEuropean Borrowers

Peers’ Poll: Best Lead Manager of Bonds for EuroweekLatin American Borrowers

Top House – Exotic Currency Products Risk

Top House – Exotic Equity Products Risk

Top House – Exotic Interest Rate Products Risk

1999DEALS OF THE YEAR

Hoechst sought to refocus the company toward life sciences

and engaged CSFB to help it demerge certain of its industrial

chemicals businesses into a newly formed, publicly traded

company, Celanese. The scope of the assets to be demerged

had to balance the needs of Celanese — to achieve critical

mass and a sound capital structure — while achieving the

divestiture objectives of Hoechst. Celanese represents the

first large-scale transaction under new German laws enabling

demergers on a tax-efficient basis. In order to ensure a

proper launch for the company in the capital markets, CSFB

designed a special redistribution mechanism to facilitate and

accelerate the natural redistribution of shares to a new share-

holder base. The unique nature of the transaction highlights

CSFB’s ability to structure complex and creative solutions for

clients seeking to reposition their companies through corpo-

rate restructurings.

9

Full Service Product OfferingsAcquisition FinanceAsset FinanceCorporate Lending and

Syndicated FinanceEquity and Convertible Securities

UnderwritingGeneral Financial AdvisoryHigh Yield UnderwritingInvestment Grade Debt and Preferred

Stock Underwriting Lease FinanceLeveraged FinanceMergers and Acquisitions

Acquisition AdvisoryCorporate Sales and DivestituresJoint VenturesLeveraged BuyoutsRestructuringsTakeover Defense Advisory

Private PlacementsPrivatizationsProject FinanceShare Repurchase Programs Supply Chain Finance

Focused Industry ExpertiseAutomotiveCapital Goods ChemicalsConsumer ProductsDepository InstitutionsEnergyFinancial SponsorsGaming Health CareInsuranceLogistics and TransportationMedia and TelecommunicationsMetals and MiningPaper, Packaging and Forest ProductsPowerReal EstateRetailTechnology

AGENTS OFCHANGE ININVESTMENT BANKING

(Dollars in Millions) 1999 1998 % CHANGE

Revenue $ 2,189 $ 1,791 22%

Employees 2,468 2,373 4%

Average BIS Capital $ 825 $ 1,100 -25%

Charles G. Ward IIIHead of Investment Banking*

The professionals in the Investment Banking Division

demonstrate our Firm’s steadfast commitment to helping our

clients succeed in a business environment in which change is

the only constant.

In 1999, trends such as globalization, deregulation and

consolidation, coupled with seismic leaps on the Internet and

in information technology, often shortened the decision-mak-

ing process to weeks, rather than months or years. Both

threats and opportunities abounded in the business climate,

making strategizing all the more difficult in this era of new

possibilities.

Our Investment Banking professionals help our clients

capitalize on change. We help them view change as a means

to an end — and help them to be proactive, rather than reac-

tive. The risks are significant, but the possibilities are

enormous. As one client recently told us, “Either you cause

change or you become a victim of it.”

We believe the dramatic shifts in science, technology,

demographics, geopolitical conditions and the global econ-

omy are just beginning to be felt. The world continues to get

smaller, with factors such as declining trade barriers and

E-commerce enabling businesses to reach every corner of

the world more quickly and more efficiently.

We have structured the Investment Banking Division to

maximize CSFB’s ability to provide strategic advice and capi-

tal-raising services to our clients throughout the world. We

bring the capabilities of a truly global investment bank to bear

for each and every one of our clients. Our professionals are

inventive, dynamic and thoughtful, with demonstrated expert-

ise across the spectrum of industries and financial products.

In terms of results, the Investment Banking Division

enjoyed its best year ever. We had record revenues and sig-

nificant market share gains. First and foremost, we thank our

clients for the ongoing trust they have placed in us. As a

firm, we have made a number of significant investments that

have bolstered the performance of the Investment Banking

Division, and we believe the division is well positioned to

more deeply understand our clients and to help them capital-

ize on change.

M E R G E R S & A C Q U I S I T I O N S

In each of the past five years, the volume of M&A activity has

T H E D E M E R G E R O F C E L A N E S EF R O M H O E C H S T

* As of March 2000 — President and Co-Head of Investment Banking and Equities

10 11

CREDIT SUISSE FIRST BOSTON CLIENT DESCRIPTION OF TRANSACTION APPROXIMATE DOLLAR VALUE

AT&T Corporation Agreed to acquire MediaOne Group, Inc.* $63,100,000,000

TotalFina Exchange offer for Elf Aquitaine* $54,000,000,000

Hutchison Whampoa Limited Advice with respect to the sale of 44.8% interest $35,000,000,000in Orange PLC to Mannesmann AG

Ascend Communications Merger with Lucent Technologies, Inc. $24,000,000,000

YPF SA Sale of Company to Repsol SA $20,000,000,000

INA - Istituto Nazionale delle Agreed to be acquired by Assicurazioni Generali SpA* $12,580,000,000Assicurazioni SpA

Union Carbide Corporation Agreed to merge with The Dow Chemical Company* $11,900,000,000

Firstar Corporation Acquisition of Mercantile Bancorporation Inc. $10,600,000,000

AT&T Corporation Advice with respect to cable system swap with Comcast Corporation* $9,100,000,000

Teton Acquisition Corp. Agreed to acquire MidAmerican Energy Holdings Co.* $9,000,000,000

Whittman-Hart Inc. Agreed to merge with USWeb Corporation $7,932,600,000

E.I. du Pont de Nemours and Company Acquisition of remaining 80% of Pioneer Hi-Bred International, Inc. $7,700,000,000

Cerent Corporation Acquisition by Cisco Systems, Inc. $7,500,000,000

Coca-Cola Beverages Plc and Merger between Coca-Cola Beverages Plc and Hellenic $6,900,000,000Hellenic Bottling Company Bottling Company*

Case Corporation Sale of Company to New Holland N.V. $6,236,300,000

Alcoa Inc. Agreed to acquire Reynolds Metals Company* $6,000,000,000

AT&T Corporation Advice with respect to investment in AT&T and acquisition of 29.9% $5,000,000,000stake in Telewest Communications plc by Microsoft Corporation*

Siara Systems Agreed to merge with Redback Networks Inc.* $4,300,000,000

Tenneco, Inc. Spin-off of Pactiv Corporation (formally Tenneco Packaging Inc.) $4,200,000,000

J.C. Penney Company, Inc. Sale of private label credit card and accounts receivable $4,000,000,000portfolio to GE Capital

Platinum Technology Acquisition by Computer Associates International Inc. $3,600,000,000

Nortel Networks Agreed to acquire Qtera Corporation* $3,250,000,000

Flextech PLC Agreed in principle to merge with Telewest Communications plc* $3,200,000,000

Enron Corp. Agreed to divest Portland General Electric to Sierra Pacific Resources* $3,100,000,000

Hoechst AG Advice with respect to demerger of Celanese AG $2,800,000,000

Quebecor Printing Inc. Acquisition of World Color Press, Inc. $2,700,000,000

ASARCO Incorporated Sale of Company to Grupo México, S.A. de C.V. $2,610,000,000

Stratec Holdings AG and Synthes Merger between Stratec Holdings AG and Synthes $2,500,000,000

Bayer AG Agreed to acquire the global polyols business and an equity interest $2,450,000,000in the Propylene Oxide capacity of Lyondell Petrochemical*

Pathé S.A. Merger with Vivendi S.A. $2,431,000,000

EarthLink Network, Inc. Agreed to merge with MindSpring Enterprises, Inc.* $2,430,000,000

British Steel plc Merger with Koninklijke Hoogovens NV $2,300,000,000

Telephone and Data Systems, Inc. Agreed to sell 82% stake in Aerial Communications, Inc. to $2,200,000,000VoiceStream Wireless Corp.*

Wang Global Acquisition by Getronics NV $2,200,000,000

The General Electric Company, p.l.c. Acquisition of RELTEC Corporation $2,101,800,000

Nortel Networks Agreed to acquire Clarify, Inc.* $2,100,000,000

Commerce One Strategic alliance with General Motors* $2,000,000,000

* Pending as of 3/10/00

MERGERS AND ACQUISITIONS

highlights

broken the prior year’s record. In 1999, global M&A activity

exceeded the $3 trillion mark for the first time. Clearly, the

unrelenting pace of M&A activity — be it a multibillion-dollar

merger or the divestiture of a non-core unit — has become a

fundamental tenet of successful business strategy.

This unprecedented pace of consolidation has changed

the paradigm in many industries. Successful companies must

be nimble in the face of major strategically driven industry

consolidations. Virtually every industry has been affected by

consolidation — from media conglomerates and financial

institutions to chemical companies and utilities — and thus

the competitive environment is in a constant state of flux.

Our M&A Group is consistently at the vanguard of M&A

activity. In recognition of that fact, Mergers & Acquisitions

named CSFB as investment bank of the year and Global

Finance named Credit Suisse First Boston as the most hon-

ored investment bank in the publication’s 1999 M&A survey.

Global Finance lauded CSFB for the Firm’s “innovative solu-

tions and superior service for their clients.”

In 1999, we provided strategic advice on a record num-

ber of transactions for the Firm. More importantly, we were

involved in transactions that defined many of our clients’

strategic direction.

M&A activity boomed in Europe last year, as the combined

forces of a common currency, stronger shareholder pressure,

high stock valuations, and increasing deregulation and compe-

tition drove heightened activity. European companies, through

unprecedented cross-border consolidation, are building

dynamic corporate entities with sustainable global presence.

Even unsolicited bids became more prevalent in countries

where they were historically uncommon. Among the most

prominent unsolicited transactions was TotalFina’s successful

$54 billion offer for Elf Aquitaine, the largest offer ever in

France. CSFB acted as principal advisor to TotalFina, which

emerged victorious and thus became the world’s fourth-

largest oil and gas company. As Investment Dealers’ Digest

noted in naming the transaction its Energy Deal of the Year,

“no other deal in 1999 provided as clear a microcosm of the

transformation taking place in the rapidly consolidating inter-

national energy market.” The transaction again demonstrated

TotalFina’s role as one of the industry’s leading consolida-

tors, with Total having acquired Petrofina earlier in the year

(on which CSFB also advised).

In Latin America, also in the midst of oil and gas consol-

idation, we advised YPF on the Argentine government’s sale

of its 14.99% interest to Repsol SA and later on Repsol’s

The challenge at AT&T was clear: to transform the company from its traditional base as

a long-distance provider into a dynamic telecommunications company offering the gamut

of services through voice, data, wireless and cable-television transmission. Credit Suisse

First Boston has been advising AT&T since the company first embarked on this strategy.

It began in 1998 with the $11.3 billion acquisition of Teleport Communications Group,

through which AT&T acquired direct connections to the biggest corporate customers in

the Baby Bells’ territories. Later that year, AT&T acquired Tele-Communications Inc. in a

$70 billion transaction that boldly signaled a new direction: to transform the telecom-

munications industry through the convergence of telephone, video and data

transmission. The combination gave AT&T direct access into consumers’ homes with

the potential of reaching nearly one-third of all US households. Then in 1999, in an

authoritative follow-up, AT&T moved to acquire MediaOne, another leading cable

provider, for $63.1 billion in a transaction that ranks as the largest successful unso-

licited offer in the US, with AT&T topping an offer for MediaOne from Comcast. In a

separate but related transaction, AT&T and Microsoft have agreed to a partnership in

which Microsoft will make a $5 billion equity investment in AT&T. Investment Dealers’

Digest named the MediaOne acquisition transaction as its M&A Deal of the Year, noting

that it “signified the foresight, financial innovation and complexity required in order to

bring about industry transformation these days.”

T H E T R A N S F O R M A T I O N O F A T & T

In 1999, the technology sector moved at warp speed. The pace of activity in the sector

required an investment bank capable of assessing the full range of options — with the

experience and judgment to find the right answers. CSFB’s Technology Group brings

unparalleled experience to the tech sector. Time and again, it has been chosen to lead

manage and advise on many of the most significant deals in the industry.

As a result, CSFB made history in technology in 1999. Some of our tech-related high-

lights included:

· The largest technology follow-on common stock offering in history ($2.5 billion

ST Microelectronics)

· The largest Internet IPO in history ($1.0 billion TD Waterhouse Group)

· The largest European Internet IPO in history ($416.6 million Freeserve)

· The best first-day performance for an IPO (VA Linux, up 698%)

· The best performing IPO of the year (Commerce One, up 2,707%)

· The largest technology deal ever completed ($24.0 billion Lucent/Ascend)

· The largest sale of a private communication equipment company in history ($7.5 billion

Cerent/Cisco)

· The largest IT Services M&A deal in history ($7.9 billion Whittman-Hart/USWeb)

· The then-largest software M&A deal in history ($3.6 billion Platinum/Computer Associates)

· The largest software debt financing in history ($4.5 billion Computer Associates)

· The largest equity private placement for a start-up technology company in history

($500 million Zhone)

The Firm’s technology expertise spanned the globe. In addition to the above-refer-

enced Freeserve IPO, we led the IPOs of QXL.com, a UK-based online auction site, and

of Miracle Holding AG, a Swiss software company that was the fifth IPO on the SWX

New Market. We led the IPO of Freenet, a Germany-based Internet service provider on

the Neuer Markt. And we managed the IPO of El Sitio, a leading Argentina-based Inter-

net network targeting Spanish and Portuguese speakers in Latin America and the US.

L E A D I N G A D V I S O R T O T E C H N O L O G Y C O M P A N I E S

1312

subsequent acquisition of the rest of the company; the trans-

actions totaled $20 billion.

In Australia, the State Government of Victoria completed

the final stage of its $21.5 billion privatization of its electricity

assets. CSFB advised the government throughout the reform

and privatization process in what has been widely recognized

as not only one of the largest but also one of the most inno-

vative and successful privatization programs globally.

The activity in the US M&A market showed no sign of

abating. Five of the 10 largest M&A deals of all time occurred

in 1999, and four of those five involved a US company. CSFB

advised on many precedent-setting deals in the US. We

counseled AT&T on its pending acquisition of MediaOne (see

box). We advised Ascend Communications on its $24 billion

merger with Lucent — at the time the largest technology

M&A deal in history. Union Carbide, advised by CSFB, agreed

to an $11.9 billion merger with Dow Chemical to create the

world’s second-largest chemical company.

E Q U I T Y U N D E R W R I T I N G

In a year of record equity issuance, CSFB moved into the top

echelon of equity houses, with significant gains in market

share. The Firm’s investments in a number of areas —

namely the addition of the Technology Group, the BZW acqui-

sition, and a significant commitment to sales, trading and

equity research — combined to bring dramatic market share

gains. As such, CSFB played a prominent role in many of the

year’s most significant transactions, from technology IPOs to

privatizations to insurance company demutualizations.

Our Technology Group truly acted as agents of change

(see box) by lead managing IPOs for 54 technology compa-

nies worldwide, more than any other firm, which included the

year’s best performing IPO, Commerce One. CSFB’s per-

formance in this sector enabled technology clients across the

globe to tap the capital markets for much-needed financing,

often allowing small companies to quickly emerge from

embryonic stages with a powerful acquisition currency.

CSFB also demonstrated a commitment to issuance in

burgeoning markets, such as the Nouveau Marché in France,

the SWX New Market in Switzerland and Germany’s Neuer

Markt. We also helped companies tap new sources of investors.

For example, we led the $742 million privatization IPO of Qatar

Telecom, the largest-ever equity offering from the Gulf region,

which represented the first time foreign investors could pur-

chase shares on the Doha Securities Market.

As with Qatar Telecom, countries around the world con-

tinue to transition government-owned businesses to the private

sector. CSFB has an unmatched record in privatizations by

both helping governments shed these assets and assisting the

newly public companies with their capital structures.

In 1999, we led the largest privatization equity offering

by serving as joint global coordinator on the 2.13 billion-

share offering of Telstra Corporation Limited, the largest

company in Australia, on behalf of the Commonwealth of

Australia. We also handled the $1.3 billion secondary offer-

ing for OTE, the Greek telecommunications company. And

we served as joint global coordinator for the $185 million

privatization offering for the Government of India’s shares in

Videsh Sanchar Nigam Limited, the provider of international

telecommunications services in India, which was priced at a

significant premium to the market despite volatile conditions.

The Firm also assisted many noteworthy private companies

in their public market debuts. CSFB acted as joint global

coordinator and sole bookrunner on the $2 billion IPO of Banca

Monte dei Paschi di Siena, the oldest bank in the world. CSFB

served as lead manager for the IPO of Agora SA, publisher of

Poland’s leading newspaper, the first sizable non-privatization

IPO from Central and Eastern Europe since July 1998. We led

the $496 million privatization IPO of Banco Hipotecario,

Argentina’s leading residential mortgage bank, which was the

first equity offering by a Latin American issuer since the global

market turmoil of mid-1998. CSFB acted as sole global coordi-

nator and bookrunner for the $608 million IPO of Geberit AG,

The insurance industry is in the midst of transformation, with many of the world’s largest insurers moving away from their

“mutual” ownership structures to public ownership. Over the last few years, CSFB has demonstrated continuing leadership

in this global demutualization revolution.

In 1999, the Firm handled numerous demutualization assignments. We acted as joint global coordinator, joint US

bookrunner and joint international bookrunner on Manulife Financial Corporation’s IPO. The $1.7 billion IPO of Manulife, a

Canadian insurer, is a significant milestone in that the offering ranks as the largest equity offering in Canadian history and

as the largest North American demutualization IPO to date.

Last year, MetLife’s Board of Directors approved its demutualization plan. With more than 11 million eligible policy-

holders, MetLife has become the largest mutual to date to formally approve such a restructuring. The IPO, scheduled for

early 2000, would make MetLife’s equity the most widely held stock in the US. CSFB has been acting as joint financial

advisor to MetLife.

Also last year, we served as joint lead manager on the $195 million demutualization IPO of Tower Corporation, the

largest New Zealand-owned financial services group. With the completion of the Tower IPO, CSFB has been involved in five

of the six demutualizations completed or announced in the Pacific region.

These achievements, coupled with our historical demutualization work for AMP (largest Australian life insurer), Norwich

Union (first UK demutualization IPO), National Mutual (Australian life insurer) and John Hancock, and the pending demutu-

alizations for NRMA (largest Australian property and casualty insurer) and Insular Life (Philippines’ largest mutual insurer),

all demonstrate CSFB’s leading role in the demutualization revolution worldwide.

D R I V I N G T H E D E M U T U A L I Z A T I O N R E V O L U T I O N

1514

which represents Switzerland’s largest non-privatization IPO

ever. And we served as joint global coordinator and bookrunner

of the $1.0 billion IPO of TD Waterhouse Group, the second

largest online/discount broker in the world. The offering repre-

sents the largest Internet-related IPO ever.

CSFB also continued its tradition of developing innova-

tive security structures to help our clients raise capital. We

acted as lead manager on two offerings for Calpine

Corporation (see box), one of the largest and fastest growing

companies within the independent power generation sector:

8.28 million shares of common stock for $383.5 million in

proceeds and $276 million of convertible trust preferred stock

(HIGH TIDES). The convertible trust preferred transaction,

executed in difficult market conditions, achieved Calpine’s

objective of broadening its investor universe.

D E B T U N D E R W R I T I N G A N D

C O R P O R A T E L E N D I N G

Leadership in debt products remains a mainstay of the Credit

Suisse First Boston franchise. Over the years, the Firm has

repeatedly demonstrated leadership through innovative struc-

tures and by helping borrowers adapt to market conditions.

Last year, CSFB led a number of landmark bond issues

that helped to set the strategic direction of our clients. For

example, we acted as joint lead manager for $4.5 billion in

three-, five- and ten-year global notes for DaimlerChrysler,

which represented the seventh-largest investment grade issue

ever and the largest lead-managed corporate bond offering in

CSFB’s history. The transaction marked DaimlerChrysler’s

first-ever global bond offering.

The Firm served as joint lead manager and joint

bookrunner for Conoco’s $4 billion issue of senior unsecured

notes, the largest-ever energy bond offering. The transaction

marked Conoco’s return to the public debt markets as an inde-

pendent company. Conoco, the fifth-largest US oil company,

used the proceeds to repay debt owed to DuPont as part of

Conoco’s separation from its parent. We also served as sole

bookrunner and joint lead manager for $1 billion of 30-year

senior notes and joint lead manager on $2.3 billion in five- and

ten-year senior notes for Pepsi Bottling Group as part of a

series of transactions that made it independent of its parent,

PepsiCo.

Last year, the Firm executed the largest individual

tranche issue in the history of the bond markets. We served

as joint lead manager and joint bookrunner on Freddie Mac’s

$6 billion of ten-year reference notes. CSFB advised Freddie

Mac to incorporate new marketing tactics and deal-manage-

ment practices that proved to be a leading component in the

global offering’s success; this resulted in a record-sized

order book of $8.5 billion.

We helped our clients tap new sources of capital in the

burgeoning euro market. CSFB launched the first-ever euro-

denominated asset-backed security when it led a €750

million credit-card securitization on behalf of MBNA. We

acted as joint lead manager for €1 billion of Eurobonds for

Ford Motor Credit and on €1.25 billion of Eurobonds for

Royal KPN. We also led a host of euro issues for sovereign

issuers, including: €400 million for the Republic of Slovenia,

€800 million for the Republic of Brazil, €150 million for the

Republic of Latvia, €300 million for the Lebanese Republic,

€300 million for the Republic of Croatia, €500 million for

the Republic of South Africa, and others.

The Firm was active in other denominations in Europe as

well. For GMAC, CSFB led a CHF1 billion ABS issue, GMAC’s

first Swiss franc ABS issuance. We served as joint lead man-

ager and joint bookrunner on a $1 billion Eurobond for Roche

Holdings in the year’s largest corporate Eurodollar issue.

Our leadership role continued in the European high yield

market. We led a highly successful issue for Turkcell, a Turkish

cellular phone company. Emboldened by more than $2 billion

in demand, CSFB increased the offering size from $200 mil-

lion to $400 million. CSFB led a two-tranche €110 million and

$100 million senior-notes offering for Jazztel, a developmental

Spanish telecom company. The offering represented the first-

ever Spanish high yield offering, as well as the first high yield

deal to comprise a larger euro tranche than the dollar tranche.

CSFB also led £100 million of senior notes for Doncasters plc

of the UK and €175 million in senior notes for Esat Telecom

Group plc of Ireland, which won euro’s award for best high

yield issue. We also brought Weight Watchers International to

Credit Suisse First Boston committed the Firm’s full resources on behalf of

Express Scripts, helping the company execute a growth strategy that made it

the largest independent pharmacy benefit management company. We first

assisted Express Scripts on a number of significant transactions related to its

acquisition of Diversified Pharmaceutical Services. CSFB initiated the acquisition

of Diversified Pharmaceutical Services from SmithKline Beecham for $700 million

in cash and served as Express Scripts’ financial advisor. To accomplish the

acquisition, CSFB acted as lead arranger on a $1.05 billion senior secured

credit facility and a $150 million senior subordinated bridge credit facility. CSFB

also acted as lead manager for additional capital raising in the form of a $316

million common stock offering — one of the largest issues completed in the

health care services sector in 1999. CSFB also lead managed $250 million in

senior notes, the demand for which enabled the offering to be increased from

$200 million to $250 million. Finally, CSFB was also advisor to the company on

its sale of YourPharmacy.com and its strategic alliance with PlanetRx.com. Our

work for Express Scripts helped the company navigate the changing pharma-

ceutical landscape and meet market challenges.

P R E S C R I P T I O N F O R G R O W T H :

E X P R E S S S C R I P T S

CSFB has played an integral role in the growth of Calpine, a leading

independent power company, since leading the company’s IPO in 1996.

Calpine has one of the largest electric power development programs in

the US, with more than 12,600 megawatts of capacity in operation,

under construction or in announced development in 16 states. Last year,

CSFB helped Calpine meet its significant capital needs to finance its

growth through a series of successful transactions. In addition to serv-

ing as strategic advisor, CSFB led a $95 million acquisition bridge

facility, a $214 million common stock offering, $600 million in senior

notes, a $383 million common stock offering, a $276 million convertible

preferred offering, and a $1 billion revolving construction credit facility.

The last serves as the primary vehicle for financing Calpine’s future

development projects, will produce significant savings versus “one-off”

financings and ranks as the largest “greenfield” development financing

to date. Investment Dealers’ Digest and Euromoney each named the

transaction as their Project Finance Deal of the Year. CSFB’s commit-

ment to financing Calpine helped position the company for success in

both executing its business plan and delivering returns for investors.

Over the course of the year, in the midst of aggressive capital raising,

Calpine’s stock price rose over 400 percent.

1716

the European high yield market when we led a two-tranche

€100 million and $150 million issue.

In the US high yield market, we led a $450 million senior-

notes offering for AK Steel, the most profitable integrated

steel maker in the US. The transaction, which marked the

sixth transaction CSFB lead managed for AK Steel since

1994, enabled the company to reap significant savings over

its outstanding notes, which were redeemed.

The Firm’s strong capital base enables CSFB to quickly

commit resources to support our clients’ transactions. For

example, we acted as sole arranger and administrative agent on

a fully underwritten $4.5 billion senior credit facility to finance

Computer Associates’ acquisition of Platinum Technology.

CSFB also served as Platinum’s financial advisor in what

ranked as the largest software M&A transaction. CSFB served

as syndication agent, joint lead arranger and joint book man-

ager on a fully underwritten $5 billion senior credit facility for

Metropolitan Life Insurance Company to support its acquisition

of GenAmerica Corp. CSFB also acted as financial advisor to

MetLife. CSFB led a $2.4 billion senior credit facility for New

Holland N.V. to finance its acquisition of Case Corp. (CSFB

also served as Case’s financial advisor); the combined com-

pany ranks as one of the world’s largest agricultural equipment

makers. And a series of transactions we executed on behalf of

Express Scripts helped that company become the largest inde-

pendent pharmacy benefit management company (see box). All

told, we arranged more than $96 billion in syndicated loans in

1999 and posted significant market share gains.

P R O J E C T F I N A N C E

CSFB remains a preeminent investment bank in the area of

project finance. Our track record of developing unique trans-

action structures and opening new markets, coupled with our

proven ability to raise capital from a wide variety of sources,

is unparalleled. In ever-changing global markets, CSFB

brings a consistent record of achievement.

This past year, we opened the Latin American project-

finance debt market for the first time since the Asian financial

crisis. We acted as sole placement agent for secured fixed-

rate notes, lead arranger on floating-rate notes and sole

ratings advisor on a $472 million financing package for

Argentina-based Compañía Mega. With CSFB’s advice, guid-

ance and placement power, this petrochemical project

achieved investment-grade ratings and 15-year financing.

In Asia, our team acted as lead arranger for a $1.4 bil-

lion financing for Phase II of Enron’s Dabhol Power Project.

The financing was the largest emerging-market project

financing completed in 1999 and garnered numerous deal of

the year awards.

CSFB ranks as the top capital raiser for independent

power-generating companies. In 1999, we executed a host

of financings to help these growth companies enhance their

competitive positions in an industry in which deregulation is

dramatically reshaping the playing field. We provided myriad

services for Edison Mission Energy, one of the world’s

largest independent power companies. To help finance its

acquisition of a generating station in Pennsylvania, CSFB

acted as lead arranger on a $1.1 billion bank facility and lead

manager for $600 million in senior notes. In the UK, we

acted as lead arranger of a £1.2 billion bank facility to

finance the Edison Mission acquisition of two power-genera-

tion stations. In New Zealand, we served as lead arranger

and placement agent on a $400 million combination bank

financing and retail preference share issue to finance Edison

Mission Energy’s acquisition of a 40% interest in Contact

Energy. We similarly helped Calpine improve its competitive

position (see box).

Finally, CSFB closed its $2.7 billion Institutional Project

Finance Program. This program offers clients a competitive

advantage in financing projects by increasing execution

speed and thereby reducing execution risk relative to what

might be encountered in the public capital markets or the

bank syndication market. In doing so, it stands as a major

advancement in project financing.

THE FIRM’S STRONG CAPITAL BASE ENABLESCSFB TO QUICKLY COMMIT RESOURCES TOSUPPORT OUR CLIENTS’TRANSACTIONS. ALL TOLD, WE ARRANGEDMORE THAN $96 BILLIONIN SYNDICATED LOANS IN 1999 AND POSTED SIGNIFICANT MARKETSHARE GAINS.

F U E L T O G R O W : C A L P I N E

DaimlerChrysler North America Holding Corporation’s $4.5

billion inaugural global bond offering, for which CSFB acted

as joint lead manager and joint bookrunner, represented the

largest lead-managed corporate bond deal in CSFB’s storied

history, and the second largest in the marketplace overall.

Quality of execution was critically important as Daimler-

Chrysler, one of the world’s premier borrowers, set its initial

debt benchmarks. The task was complicated by the volatile

market conditions caused by expectations of higher interest

rates triggered by the Federal Reserve. CSFB overcame these

challenges with a highly successful transaction, which

allowed DaimlerChrysler to increase the size from $3 billion

to $4.5 billion while simultaneously improving pricing

throughout the road show and offering period. CSFB helped

to generate $9.0 billion in total demand and an orderly after-

market performance.

Recognized as Debt Deal of the Year by Euromoney, the

offering set another milestone as CSFB became the first lead

manager to recognize the growing relevance of non-Treasury

benchmarks in this era of US Government budget surpluses.

We offered price guidance to investors as a spread to another

corporate bond. This innovation reduced risk for Daimler-

Chrysler by eliminating the basis volatility between Treasuries

and corporates and between the when-issued and current

Treasury securities.

Underwriting, Sales, Trading and Research in:Government SecuritiesCorporate SecuritiesEmerging Markets SecuritiesHigh Yield Securities Mortgage and Asset-Backed

SecuritiesForeign ExchangeMoney MarketsInterest Rate DerivativesCredit DerivativesFund Linked DerivativesListed DerivativesReal Estate ProductsPrecious Metals and Energy ProductsPrime Brokerage

HELPING CLIENTSWITH CHANGINGMARKETS INFIXED INCOME AND DERIVATIVES

(Dollars in Millions) 1999 1998 % CHANGE

Revenue $ 4,221 $ 2,586 63%

Employees 2,011 2,130 -6%

Average BIS Capital $ 3,935 $ 4,457 -12%

Christopher GoekjianHead of Fixed Income and Derivatives

Three major events sent ripples throughout the global

fixed income markets in 1999, intensifying the pressures on

companies to react quickly and creating an unprecedented

level of need for timely research and information: the advent

of the euro, the technology boom and the resurgence of the

emerging markets.

CSFB has recognized for some time that the Internet

and the abolition of 11 distinct European currency markets

would present established financial institutions with the need

to shed outdated assumptions, products and ways of doing

business. Anticipating change rather than reacting to it, we

have built flexible, forward-looking systems, products and

services adaptable to a broad array of potential market out-

comes and client needs.

Effective January 1, 1999, we combined CSFB’s fixed

income securities activities with Credit Suisse Financial

Products’ fixed income derivatives operations to make our

fixed income services more seamless and efficient. Our abil-

ity to act as one firm, our pioneering efforts in electronic

trading, our very strong presence in Europe, our historical

expertise in the emerging markets and our increased invest-

ment in research all contributed to the Firm’s ability to trans-

form these sweeping changes into opportunities for our

clients. The success of our Debt Capital Markets efforts is

reflected in our number four ranking in both the US and

worldwide league tables.

T H E E U R O

While some in the financial services industry lamented the

elimination of single-country niche foreign-exchange markets

in Europe, CSFB embraced the change, recognizing that the

merging of 11 currencies into one would be far more than a

simplification of the foreign-exchange world; it would consol-

idate the economic power of 250 million people into a whole

far greater than the sum of its parts.

The launch of the euro created a large foreign-exchange

market for the new currency, a large European market for

government bonds and huge fungible capital markets for

companies. As one of the most European of the large global

investment banks, CSFB was particularly well positioned to

leverage its strong European infrastructure to the benefit of

its clients around the world.

19

D A I M L E R C H R Y S L E R :C S F B ’ S L A R G E S T- E V E R C O R P O R A T E B O N D D E A L

The advent of the euro in 1999 led to significant growth in

international issuance from the European regional banking

sector. A number of domestically focused banks were

anxious to establish their credentials in the euro market

and broaden their investor bases. Many obtained credit

ratings, set up EMTN programs and launched debut euro

issues targeted at the non-domestic market. CSFB was at

the forefront of these developments.

In 1999, CSFB acted as rating advisor and lead man-

ager for the debut international euro issue from Austrian

regional Landesbank Landeshypothekenbank Tirol (“Hypo-

Tirol”). Hypo-Tirol’s objectives were to expand its investor

base without compromising the levels of funding achiev-

able within its domestic market. As a result of its excellent

credit credentials and the quality of CSFB’s rating advice,

Hypo-Tirol obtained a AA+ rating from S&P. The €200 million

Eurobond, three-year FRN issue was priced competitively

against domestic levels and was widely distributed to money

market funds and institutional investors throughout

Europe. Hypo-Tirol has now established a solid foothold

and strong momentum in the broader European market.

This €500 million Slovakia Eurobond

7.50% five-year issue was one of

the landmark deals from Central

Europe in 1999, and reintroduced

the Slovak Republic (Ba1/BB+/BB+)

to the international investor and

political community. Following the

democratic outcome of presidential

elections just prior to investor road

shows, the deal had great mo-

mentum, was priced aggressively

and has performed exceptionally

well in the aftermarket.

In addition to garnering attrac-

tively sourced funds for the Republic,

the transaction also furthered Slovak

financial and political rehabilitation,

thus reinforcing the EU decision at

the Helsinki conference to include

the Republic among the countries on

the fast track to EU accession.

20 21

At the same time, CSFB saw that the long-term suc-

cess of the euro market required the currency to weaken

initially for cyclical reasons. CSFB was one of the few firms

to alert its clients to the likely downtrend of the currency prior

to its launch.

Despite its growth, the European government bond mar-

ket was tiered between its high and low credits, and only three

countries offered real liquidity. The swap market lacked the

same tiering, but suffered from pre-Y2K liquidity dislocations,

which resulted in all-time-high spreads. Having integrated its

swap and bond trading desks helped CSFB maintain liquidity

for its clients when trading volume fell precipitously.

The euro eclipsed the dollar market as the largest inter-

national capital market by allowing a huge pool of investors in

Europe to look beyond their borders without incurring a cur-

rency risk. CSFB lead managed several euro offerings for

marquee companies such as Ford, Philip Morris and MBNA,

and emerging-markets borrowers such as South Africa,

Brazil and Kepco.

The concept of a market without borders was not limited to

European investors. The globalization of markets was a theme

that extended to other currencies, and CSFB spearheaded

global bond offerings by leading issues for companies such as

DuPont, Conoco and, the ultimate global corporation, Daimler-

Chrysler. The lack of currency diversification and the end of

pre-EMU convergence trades enticed investors to seek higher

yields through credit diversification. The technology boom

helped supply it by introducing uncertainty across all companies

— not just technology companies — increasing the volatility of

earnings and hence default risk. This in turn forced credit

spreads higher across the board for corporate bonds. Against

this background, a global credit market emerged, particularly in

Europe, where none had previously existed. The European mar-

ket saw the expansion of the embryonic high yield market.

CSFB obtained a prominent position in this new market by lead-

ing bond issues for companies such as Esat Telecom, Turkcell

and Jazztel. CSFB took a leading role in this changing market-

place, placing fifth in both the international debt and emerging

markets league tables. At the same time, the Firm maintained

its dominant positions in some of the markets that were not

affected by these changes, such as Switzerland, where CSFB

again ranked first in underwriting debt issues.

T H E T E C H N O L O G Y B O O M

In addition to increasing volatility and credit spreads, and

contributing to the creation of a broader, deeper European

debt market, the technology boom also increased the need

for our clients to receive good information flow. To meet this

need, CSFB made a number of changes in 1999.

We stepped up our investment in research capabilities to

address the demands of a rapidly changing environment. Our

greatest emphasis was in High Yield. Additionally, we built a

Global Credit Strategy group to provide credit portfolio

strategies as well as analysis and forecasts of swap and

generic credit spread movements across both high-yield and

high-grade names. The FID research department now com-

prises more than 150 professionals. They work very closely

with the coverage groups to offer our clients dedicated

resources delivered in the format they want, from direct

interaction to a faster publication rate to improved web site

delivery.

While some other industry players have resisted online

trading, viewing it as a threat to their traditional offline sales

franchises, CSFB has opted to accelerate the trend for

clients who wish to capture the efficiency and speed of the

Internet. CSFB has been at the leading edge of electronic

trading since launching its PrimeTradeSM family of products in

1998. Recognizing that different clients need different tools,

CSFB has developed a broad array of electronic-trading

products and services that improve speed of execution,

reduce the number of fails, increase liquidity, add price trans-

parency and lower costs. These are grouped into two

categories, trading products and clearing products.

Trading products

· PrimeTrade: The PrimeTradeSM family of products is a

proprietary system for institutional clients that offers

instantaneous transactions and straight-through processing

with CSFB. Launched in 1998, PrimeTradeSM first offered

futures in a variety of markets, including DTB, EUREX,

TIFFE and GLOBEX. Global Foreign Exchange was added

to the platform in 1999. PrimeDebtSM, a comprehensive

electronic medium for the distribution of new-issue securi-

ties that provides issuers with an online platform for the

marketing and execution of debt offerings, was added in

K E E P I N G T H E S L O V A K R E P U B L I C

O N T H E F A S T T R A C K

D E B U T I N T E R N A T I O N A L I S S U E F O R

L A N D E S H Y P O T H E K E N B A N K T I R O L

As part of its spin-off, Conoco needed to raise $4.8 billion to repay DuPont. Conoco senior management used a large

benchmark global bond offering to convey Conoco’s strategy to the widest possible fixed income investor universe, estab-

lishing Conoco as a preeminent credit and oil company.

The deal, which was joint lead managed by CSFB, came to market during the worst cyclical lows for commodity prices

in several years, when investors were turning bearish on energy credits. Conoco benefited from a positive interest rate

environment and was able to capture historically attractive Treasury rates. The company’s marketing strategy, timing and solid

business plan resulted in the deal, which was five times oversubscribed, being upsized to $4 billion from an initial $3 billion,

priced at 3–12 basis points through the initial price talk and placed with some 300 investors internationally.

The Conoco transaction was the largest energy bond ever executed, and became the benchmark for the energy sector

and the market in general.

KPN, the leading Dutch telecommunications com-

pany, launched a highly successful 1.25 billion

Eurobond five-year transaction through joint

bookrunner CSFB. KPN was eager to diversify its

funding base away from the Netherlands, which had

accounted for much of its historical funding base

through the domestic bank and capital markets. A

widely distributed transaction was a prerequisite.

KPN conducted a European road show in

Zurich, Paris, Milan and London, which helped to

introduce the KPN credit to many potential first-

time buyers and build transaction momentum

amid heavy competing supply and volatile new-

issue conditions.

The issue was priced at 35 bps over the BTAN,

and has been a strong performer in the secondary

market despite deterioration in the telecom sector.

Diversification was achieved as only 7% of the

bonds were placed in the Netherlands. German,

Swiss, French and UK investors accounted for

85% of the transaction.

22 23

December 1999. CSFB expects to expand the PrimeTradeSM

platform in 2000 to include commercial paper, government

bonds and investment-grade corporate bonds.

· TradeWeb: CSFB is a founding member of TradeWeb®,

which allows our clients to be in touch, and trade, with sev-

eral dealers. The system has made substantial inroads in

the US Treasury market, where it has gained a significant

market share.

· BrokerTec: CSFB was one of the founding members of

BrokerTec, which acts as an electronic marketplace for pro-

fessional dealers.

Clearing products

In parallel to the actual trading systems, CSFB has developed

a number of clearing systems that allow clients to confirm

their trades, reconcile automatically and export records to

their back-office system. The PrimeTradeSM platform offers a

clearing function called PrimeClearSM for futures, while FX

PrimeBrokerage allows our clients to concentrate their clear-

ing with CSFB while retaining the capacity to execute the

trades at different banks. Custom-made reporting is available

to meet the diverse needs of our clients.

Without question, these E-commerce developments have

brought our clients many benefits. However, CSFB recognizes

that in many cases, technology is not a substitute for the tradi-

tional way we have provided research and execution. Rather,

technology is viewed as a complement to the traditional service

provided by our research teams and sales forces.

Our continued efforts to provide high-quality, integrated,

personal service were enhanced by the merger of CSFB and

CSFP earlier in 1999. In addition, we are emphasizing close

cooperation between our Equity Research and our Fixed

Income Research departments, offering clients the ability to

talk across all asset classes through fewer strategic contacts.

T H E E M E R G I N G M A R K E T S R E V I V A L

CSFB has traditionally had a strong position in the emerging

markets, and despite the Russian bond default of 1998, the

Firm maintained its emerging-markets presence, continuing

to meet its clients’ needs even as other financial institutions

retreated.

But the rapid turnaround in Asia, Latin America, and

Central and Eastern Europe rewarded those with staying

power as investors returned to these markets in force.

The Asian markets, which were the first to deteriorate in

1997, were also the first to rebound strongly. The Indonesian

rupiah, which had traded at 15,000 to the dollar, surged

back to 7,000. Korea, which had been on the verge of bank-

ruptcy, saw its sovereign bonds trading at only 160 basis

points above US Treasuries by year-end 1999.

Russia surprised the world by bouncing back from the

1998 disaster. 1999 was Russia’s first year of GDP growth

since the fall of Communism. Bolstered by rising oil prices,

improved tax collections and a ferociously disciplined central

bank, Russian debt, which had once been worth a few cents

on the dollar after the default, was trading at 70 cents by the

beginning of 2000.

Although Brazil stopped pegging the real to the dollar,

inflation did not ensue and the currency has stabilized.

All these positive developments reestablished confi-

dence. CSFB was instrumental in generating renewed

investor interest in the emerging markets and helping our

clients reenter them. This effort was facilitated by the cre-

ation of the Emerging Market Sales Group structure, which

specializes in emerging-markets assets; it was established in

1999 to bring emerging-markets products to our clients

more effectively. The 1998 acquisition of Garantia in Brazil,

as well as our strong physical presence in Russia, Turkey and

many other emerging-market nations, helped us deliver

timely research and efficient execution to our clients around

the world at a critical, transitional time.

On the underwriting side, CSFB was active in bringing

emerging-markets issuers to the public debt market, both in

the euro and other currencies. The Firm ranked first in the

league tables for sovereign issues in Central and Eastern

Europe, the Middle East and Africa, leading transactions for

issuers such as South Africa, Slovakia, Qatar and Lebanon. In

Latin America, CSFB led Brazil’s debut and follow-on euro

issues. In Asia, we spearheaded transactions for issuers such

as Kepco and Petronas.

T H E Y E A R 2 0 0 0

Looking ahead, we believe the fixed income markets will

become ever more global, efficient, transparent and technol-

ogy driven. CSFB remains committed to driving that change

and staying ahead of the curve to help customers capture

opportunity wherever in the world it exists.

C O N O C O : L A R G E S T- E V E R E N E R G Y B O N D I S S U E

K P N E X P A N D S B E Y O N D T H E N E T H E R L A N D S

25

ResearchSalesTradingNew-Issue UnderwritingStock Loan/Prime BrokerageConvertibles/WarrantsListed/OTC DerivativesProgram TradingIndex ArbitrageRisk Arbitrage

SURGING TOTHE TOP INEQUITY

(Dollars in Millions) 1999 1998 % CHANGE

Revenue $ 3,212 $ 1,655 94%

Employees 1,692 1,649 3%

Average BIS Capital $ 775 $ 1,018 -24%

Brady W. DouganHead of Equities*

No area within CSFB knows change better than the

Equity Division. In three short years, we have transformed

into one of the leading equities businesses in the world. We

have established momentum that focuses on quality, not just

quantity. Today, having outpaced our competitors in numer-

ous equity categories, CSFB is challenging its global, “bulge

bracket” competitors for the top slot in this business.

1999’s record-year performance reflects our clients’ affir-

mation of our work on several fronts. We have consistently

diversified into new markets and products to meet our clients’

divergent needs. Our insights into the impact of technology and

the Internet on the future of the markets are proving right. Our

commitment to maintain and build in markets which others

abandon has positioned us, and our clients, to take advantage

of the market’s cyclical nature. Ultimately, we believe that our

unique blend of global reach, technological innovation and

product diversification makes CSFB a superior catalyst for

change in this “new economy,” where adaptability has become

a prerequisite for success.

G L O B A L R E A C H

Whether driven by technological, political or economic rea-

sons, change has been a consistent theme in the equity

markets. In 1999, our global strategic platform, critical mass

and indigenous insight into local economies enabled us to

assist our clients in capitalizing on change and achieving

market-leader positions.

With a broad global footprint and unique international

flavor, CSFB is alone in the industry in having three major

“home” markets: the US, the UK and Switzerland, two of

which are in the critical and rapidly evolving landscape of

Europe. In addition, our market leadership positions in Latin

America, Eastern Europe, Asia and Australia/New Zealand

give CSFB exceptional strength on virtually every continent

and in every major market, established or emerging. We now

have more than 1,600 equity professionals worldwide, with

300 analysts covering 2,700 companies, 400 salespeople

covering 5,500 institutional accounts, and 250 traders trad-

ing over 10,000 stocks. CSFB executes more products in

more markets for our customers than ever before.

To further broaden our global reach and ability to execute

cross-border activity on our clients’ behalf, we are committed

to continuing growth and investment through both organic

expansion and successful integration of acquired franchises.

We have shown an unparalleled ability to acquire and success-

fully integrate businesses and large groups of people,

The Equity team lead managed Phone.com’s initial public

offering in June, one of the best performing IPOs worldwide in

1999. Phone.com serves as a case study for the multiple

product solutions CSFB can provide to our clients in a rapidly

emerging market. Phone.com is a new company that enables

consumers around the world to surf the Web from their mobile

phones through their traditional telephone service providers.

In 1998, CSFB’s Technology Group invested a little less than

$1 million in Phone.com as a small venture capital stake. This

year our relationship grew to include a $60 million private

placement in March, the $74 million IPO in June, a $400 mil-

lion buy-side assignment of a European competitor in

October, and a $1 billion secondary offering in November.

O N E O F T H E B E S T P E R F O R M I N GI P O S W O R L D W I D E

* As of March 2000 — Co-Head of Investment Banking and Equities

Equity Finance partnered with

Tremont Advisers, Inc. to achieve

one of its biggest successes of last

year. The CSFB/Tremont Hedge

Fund Index is a product that fulfills

clients’ needs by establishing a

standard for tracking and comparing

hedge fund performance against

other major asset classes, like the

S&P 500, on a global basis. The joint

venture was created to construct a

series of premier benchmarks for

the hedge fund industry and to

launch a line of investable index

products tied to the CSFB/Tremont

Hedge Fund Indices. The investable

index products, the first ever in the

hedge fund industry, will be avail-

able to clients in 2000.

CSFB acted as co-lead-manager of Hyundai Motor Co.’s $500 million global

depositary receipts offering. Coming one day after the Daewoo Group

announced its plan to ask foreign creditors to postpone interest and principal

payments on $6 billion of debt, the transaction overcame the obstacles of sell-

ing $500 million of GDRs to a wary foreign investor pool. Despite extremely

volatile and declining market conditions in South Korea, the Equity team was

able to meet Hyundai's needs and market the largest single overseas GDR sale

by a private company in South Korea.

2726

developing a momentum with each move that adds incremental

value for our business and our clients. By the end of the first

quarter of 2000, we intend to have closed on the acquisition of

the Japanese Equities Division of Schroders, filling a hole in

our coverage of global markets.

T E C H N O L O G Y

There is no question that 1999 was the year that technology

drove the market. Fortunately, our foresight to establish a

dominant position in the technology sector in 1998 paid

handsome dividends, raising CSFB’s position in the rankings

in the IPO league tables for the full year. The performance of

our Technology Group, which consists of top-ranked invest-

ment-banking and research professionals, is complemented

by our strength in sales distribution and secondary trading

support.

Our team lead managed 54 IPOs in 1999, more than any

other firm. Even more important than the quantity of our IPOs

was their quality — CSFB ranked number one in aftermarket

performance for IPOs and follow-ons, which were trading

higher by an average of 250% by year-end. Secondary mar-

ket trading climbed commensurately with our primary market

activity, as CSFB rose four places in the secondary OTC

league tables, to sixth overall.

We believe our technology momentum and that of the

technology sector globally have only just begun. Accordingly,

we have grown our technology team to more than 250 pro-

fessionals worldwide, and we will continue to invest in the

franchise.

T E C H N O L O G Y P R O D U C T S

Our commitment to technology took client communications

to a new level. We understand that instantaneous informa-

tion and execution is paramount to our ability to help our

clients capitalize in this fast-moving, increasingly volatile

market. Throughout 1999 and into 2000, we have been

rolling out electronic connectivity services to provide instan-

taneous information, execution and confirmation to our

clients, including:

· CSFB LIVE: CSFB’s web-based interface, which will deliver

RESEARCHVIEWSM and DEALERVIEWSM to our clients

through browsers.

· RESEARCHVIEWSM: All-in-one customizable research

application offering one-stop shopping for analyst reports,

summaries of morning meeting notes, and quick access to

company profiles.

· DEALERVIEWSM: Provides automated order submission,

execution and confirmation to clients through web browsers.

· Point-to-Point Communications: Directly reaches clients

through dedicated leased lines and state-of-the-art protocols

(such as FIX) to access ECNs and clients for order indications

of interests, submission, executions and confirmations.

Additionally, with electronic execution links to all major world

markets, we optimize our straight-through processing.

P R O D U C T D I V E R S I F I C A T I O N / I N N O V A T I O N

CSFB continues to actively enhance our research products,

not only by adding senior personnel to provide wider sector,

industry and geographical coverage, but also by infusing our

research with a cutting-edge technological focus. While main-

taining broad market coverage, we continue to be particularly

focused on high-growth, dynamic industries such as technol-

ogy, E-commerce, telecommunications and health care,

where change and opportunity are greatest.

Our well-respected Value-Based Analysis (“VBA”)

approach forces our analysts to understand and quantify what

is creating the underlying value in industries and businesses.

It is also a metric, which allows us to better understand, pre-

dict and explain the valuation of “new-economy” businesses.

We believe that our research will continue to predict market

changes in 2000 for our clients, as it did in 1999.

The breadth of our financial product offerings is second

to none. Our Equity Derivatives and Convertibles Unit (“EDCU”),

In October, the Equity team completed the second global offering of 2.13 billion shares of Telstra

Corporation Limited, the largest company in Australia. This privatization secondary offering of 16.6%

of the company raised $10.4 billion for the Commonwealth of Australia. As with the IPO, the Equity

team acted as joint global coordinator of the offering. Over the past three years, CSFB has played a

critical role in the overall privatization process that began in 1996 when the Firm completed a scoping

study regarding Telstra’s privatization, and consequently acted as joint global coordinator in the Telstra

IPO in November 1997. Telstra 2, the largest equity offering in Australia’s history and the largest pri-

vatization equity offering completed globally in 1999, was successfully executed despite extremely

volatile market conditions. Demand of approximately 1.5 times the offer of 2.13 billion shares was

generated from investors worldwide, resulting in the offer being priced for institutional investors at

a 0.3% premium to the last trade price in Australia — a considerable achievement in the face of

falling stock markets. This transaction represents a continuation of CSFB’s commitment to the Telstra

privatization process for the Commonwealth of Australia and demonstrates our ability to execute

successfully consecutive privatizations for governments worldwide.

L A R G E S T E Q U I T Y O F F E R I N G I N A U S T R A L I A’ S H I S T O R Y

L E A D E R I N

V O L A T I L E A S I A N M A R K E T S

F I R S T H E D G EF U N D I N D I C E S

2928

which has long been considered premier in the industry, is

managed by some of the pioneers in the derivatives busi-

ness. We have combined the management of our derivatives

business across the equity class, and have brought a new

level of service to our customers that is both seamless and

efficient.

EDCU has consistently demonstrated creativity and flex-

ibility, which was recognized by the industry: CSFB earned

accolades from Risk magazine, including the “Top House”

Global Derivatives Award and first place in Exotic Equity

Products. In 1999, we increased our emphasis on customer

businesses within EDCU through heavy investments in equity

finance, security lending and prime brokerage as well as in

convertible primary issuance and secondary trading.

Additionally, across all our products in the equity class, we

stand ready to put our substantial capital behind our clients.

EDCU made investments in program trading this past

year and this, together with improvements in our execution

capability, has ensured a strong foothold in the market. In

1999, we launched The Credit Suisse First Boston

Technology Index on the AMEX. AMEX options provided

investors with a new tool to trade the technology sector, cre-

ating opportunities for profit or hedging against risk. Unlike

other indices, the CSFB Technology Index weightings strike

a balance between market capitalization and equal-dollar

weighting to better reflect how technology funds invest. The

successful launch of the Index was attributed to cooperation

between Program Trading and CSFB Technology Group.

M E D I A A C C L A I M

Our success in 1999 did not go unnoticed by the media. On

December 11, 1999, Barron’s noted that CSFB’s Equity

team had executed more lead-managed IPOs than any other

firm in 1999 with 54 deals cited — ahead of Morgan Stanley

Dean Witter (number two) and Goldman Sachs (number

five). By year-end, following CSFB’s role as lead manager in

VA Linux’s IPO, which broke a US record for price apprecia-

tion on the first day, CSFB ranked first under Barron’s

criteria in both number of lead-managed IPOs and after-

market performance.

The European press also took note of the fact that

CSFB’s Equity team lead managed 33 equity offerings —

including 19 IPOs — for European clients in 12 countries and

17 sectors, raising the equivalent of over $10 billion. Our

clients relied on our advice for timing, investor demand and

valuation for capital offered. We consistently provided them

with accurate market analysis that generated superior returns.

International Financing Review named CSFB European

Equity House of the Year. In Euroweek/International Equity

Review’s poll of market professionals, CSFB was voted Most

Impressive Lead Manager of European Equity Issues. CSFB

also won the Global Finance award for Best Equity

Origination. 1999 represented the first time that one firm —

CSFB — won the three European equity awards from IFR,

Euroweek and Global Finance in the same year.

Euro magazine ranked CSFB as the number one Equity

House for the performance of its issues on the Neuer Markt

in Frankfurt. Despite a 21% correction in the fall of 1999,

the after-market performance of CSFB’s lead-managed IPOs

were up by an average167%.

S U M M A R Y

Beginning in 1997, CSFB established a three-year plan to

build CSFB’s Equity Division into a world-class operation.

Through a number of strategic investments in acquired fran-

chises and our own organic growth, we have successfully

built a full-service, truly global operation that will challenge our

“bulge bracket” competitors. During 1999, we established

significant forward movement in market share and league

table rankings. Our current 2000 performance is on pace to

surpass our all-time record profitability in 1999. We have

gained momentum by delivering superior client service that

will carry our clients, and ourselves, through the face of

change and into the new millennium.

In a successful European equity deal in 1999, CSFB acted as

joint global coordinator and sole US bookrunner on a $417

million IPO for Freeserve PLC. Freeserve has rapidly estab-

lished itself as the UK’s largest Internet service provider and

one of the leading Internet portals. The offering was oversub-

scribed by a factor of more than 30 times, as nearly 1,000

institutional investors applied for the stock worldwide, and

more than 50,000 individuals applied in the UK. Total demand

for the deal exceeded $13 billion. The IPO of Freeserve was a

significant milestone for the European equity market and for

CSFB: Europe’s largest-ever Internet IPO and the first time the

London Stock Exchange has agreed to list a company without

a three-year track record. The Freeserve IPO is now regarded

as the founding father of Internet issuance in Europe.

T H E F O U N D I N G F A T H E R O F

E U R O P E A N I N T E R N E TI S S U A N C E

Change in Europe in 1999 was not confined to the rapidly evolving

technology arena. In 1999, CSFB’s Equity team led two landmark deals

which were germane to the creation of Aventis, one of the world’s

largest life sciences groups. In order to prepare for their merger to

create Aventis, Rhône-Poulenc S.A. of France and Hoechst of Germany

decided to divest their chemicals operations. Rhône-Poulenc man-

dated CSFB to divest its remaining 67.3% stake in Rhodia, which the

Equity team successfully executed through a €1.2 billion secondary

equity offering of Rhodia shares and a €1.0 billion exchangeable bond

offering for Rhône-Poulenc, exchangeable into Rhodia shares. CSFB

was joint bookrunning lead manager for both offerings. CSFB was also

appointed Hoechst’s sole advisor in the demerger of its Celanese

chemicals unit.

C R E A T I N G A G L O B A L L E A D E R I N L I F E S C I E N C E S

Also noteworthy were our recent IPOs for Symyx Technologies, the pioneer of combinatorial materials science, and Caliper

Technologies, renowned for revolutionary advances in pharmaceutical laboratory technology. Together with the earlier

successful radio broadcasting IPOs for Entercom and Radio One, these issues share the distinction of being among the

top-ten best-performing non-technology IPOs of the year.

A M O N G T H E T E N B E S T N O N - T E C H N O L O G Y I P O S

31

Generating Superior ReturnsExperienced Global InvestorsSignificant Commitments

of CapitalCompelling Incentive SystemsIntegrated Origination EffortIndependent Execution and

Commitment Process

EXPANDINGRAPIDLY INPRIVATEEQUITY

(Dollars in Billions) 1999 1998 % CHANGE

Employees 67 63 6%

Assets under Management $ 3.6 $ 2.5 44%

David A. DeNunzioHead of Private Equity

I N V E S T E D C A P I T A L B Y I N D U S T R Y

Technology 4.0 %

Chemicals 0.36%

Consumer Goods 15.02%

18.64% Manufacturing

1.46% Retail/Real Estate

Finance 6.46%

Other 7.33%

Distribution 1.33%

Travel & Leisure 1.37%

Media 1.38% Transportation 5.77%

17.60% Telecom/Cable

8.51% Insurance

6.68% Supermarkets

4.09% Food Products

witnessed the continued rapid expansion of

CSFB Private Equity. At year-end, Private Equity had com-

bined committed capital of over $3.6 billion in its US and

International Funds, compared with $2.5 billion in 1998.

Several significant transactions were closed, and nine invest-

ments in Private Equity’s portfolios were sold at overall

attractive rates of return. In addition, a number of experi-

enced investment professionals joined Private Equity to help

guide the expansion of our investment activities.

Private Equity continues to build upon CSFB’s long and

successful history as a private equity investor. Much of our

exceptional deal flow is produced by the global network of

investment bankers, private bankers and equity research

analysts, among other Credit Suisse Group (“CSG”) per-

sonnel. And while the majority of Private Equity’s capital

comes from outside investors, CSG has also made a signifi-

cant capital commitment. While enjoying these benefits of

affiliation with the Firm, as a separate core division, Private

Equity maintains independent investment decision-making

and governance processes.

Private Equity operates globally with investment profes-

sionals located in New York, London, Hong Kong, São Paulo

and Moscow. Private Equity’s investing activities include cor-

porate partnerships, recapitalizations, buyouts, growth capital

and other types of private equity investments where superior

returns can be achieved. Private Equity is also growing its

participation in emerging technology sectors.

In the US in 1999, Private Equity co-led a $900 million

commitment to Winstar Communications and made a $57

million commitment to Nortrax, Inc., a corporate partnership

with John Deere Construction Equipment Company, that will

assist Deere in the consolidation and management of its

construction equipment dealers. In addition, the sale of J.L.

French Automotive Castings, Inc. was successfully com-

pleted, producing an IRR in excess of 50%.

Internationally, Private Equity invested in Belcom

Holding AG, Switzerland’s leading operator of private radio

and television stations, as well as making several follow-on

investments. In Brazil, we made two significant investments. The

first was a $30 million investment in the recapitalization of Globo

Cabo S.A., the largest cable operator in Brazil. The second was

an investment in UOL, the largest Internet service provider in

Brazil and the largest portal in Latin America.

Conditions in the global M&A and public equity markets

augur well for achieving high returns through private equity

investing in the new millennium. The US continues to per-

form well, Europe is rapidly restructuring, and Asia and Latin

America are generally recovering from their economic set-

backs. These factors are producing a wide variety of

attractive private equity opportunities as businesses around

the world continue to need capital to pursue their strategic

objectives. Private Equity, with its strong combination of

human and financial capital, is well positioned to benefit from

this environment.

1999

P R I V A T E E Q U I T Y T R A N S A C T I O N T Y P E S

• Build-outs/Growth Capital

• LBOs/Build-ups/Recapitalizations

• Corporate Partnerships

• Market Insensitive Investments

• Transitional Equity Investments

33

Credit Risk ManagementRegional OversightStrategic Risk Management/

Risk Measurement & Management E-commerce

MAINTAINING CONTROL THROUGHRISK MANAGEMENT

Richard E. ThornburghVice Chairman of the Executive Board

Vast technological advances in the 1990s allowed the

financial services industry to make great strides in risk man-

agement. CSFB has led its peers in developing value at risk

and credit risk methodologies through our derivatives activi-

ties. During the past year, CSFB has built the infrastructure

to bring all of its trading activities onto a unified historical

simulation model, enabling it to measure and use its risk cap-

ital more efficiently.

CSFB readjusted and dramatically improved its risk pro-

file in 1999. Among other measures, regulatory capital

deployed in the business was reduced by 10%, trading book

value at risk was reduced by 26%, and emerging-market risk

(as measured by country usage) was reduced by 19%.

We look forward to continuing to establish more efficient

controls and to better deploy CSFB’s capital.

CSFB’s senior business line managers are accountable

for all risks associated with their businesses by maintaining

adequate internal controls. Each division takes steps to man-

age counterparty, market, liquidity, legal and operating risk.

An overall monitoring system ensures there are sufficient

independent controls to manage all risks.

Policy and procedure are established by CSFB’s overarch-

ing Credit Policy Committee/Capital Allocation and Risk

Management Committee. Chaired by the Vice Chairman, the

Committee also includes the Chief Executive Officer, the

Chief Financial Officer, the Treasurer, the Chief Credit Officer,

the heads of Strategic Risk Management, Risk Measurement

& Management and of the various business divisions of

CSFB, as well as the Chief Risk Officer of CSG.

The committee approves all of CSFB’s capital manage-

ment procedures, guidelines and risk limits, and allocates

capital to individual divisions. The committee approves any

business decision involving greater than normal risk.

In response to the global market turmoil of 1998, CSFB

created its Strategic Risk Management function to systemat-

ically assess the overall risk profile of CSFB on a global basis

and takes corrective action when necessary. It is the inde-

pendent “risk conscience” of the Firm with regard to risks

that could have a significant economic impact on CSFB.

The Credit Risk Management Group oversees all credit

risk assumed by the Firm, including loans and loan-related

credit risk, counterparty credit, country risk and trading inven-

tory concentrations. The Credit Policy Committee reviews

and approves all unusual risks and manages specific policies

and procedures. The Credit Risk Management (“CRM”)

department assesses CSFB’s overall credit portfolio and rec-

ommends credit provisions. Officers are aligned with each of

CSFB’s major business areas, along regional lines, and, in

some cases, industry or specialty lines.

CSFB’s market risk management function is monitored by

the independent Risk Measurement & Management (“RMM”)

department. Exposures arising from all trading portfolios and

geographical centers are aggregated on a daily basis.

Two means of measuring and managing the market

risks the Bank is considering undertaking are employed —

the “value-at-risk” concept and the scenario analysis method:

· The value-at-risk measures the 99th percentile greatest

loss that may be expected on the portfolio over a ten-day

holding period using market movements determined from

historical data.

· The scenario analysis method estimates the potential loss

arising from the portfolio after moving market parameters.

These movements are based on past extreme events and

hypothetical scenarios.

Market risk is managed and controlled at three levels.

Senior management monitors the Firm’s market risk utiliza-

tions, exposures and risk-adjusted performance; trading

management actively manages its positions against approved

risk limits; and RMM monitors exposures against approved

risk limits, approves limit excesses and ensures that trading

management reduces exposures to within limits.

Business-specific risks are managed through desig-

nated groups and committees within the specific divisions.

The Investment Banking Committee reviews and approves

most of the investment banking transactions, with a special

focus on risk (e.g., legal risks) inherent in such transactions.

Before new activity is undertaken, the New Business

Committee reviews the proposed business and its structure

and infrastructure requirements. To enhance its controls,

CSFB developed a regionally structured oversight function to

complement its functional organization.

Just 18 months ago, the Corporate Communications department was

totally revamped. The department works hand in hand with Research

and Bankers to deliver the right image for the Firm and its clients’ busi-

nesses. Since September 1998, a full 58% of the department’s staff

have joined the Firm, generating 400% and 600% increases in press

mentions and television appearances, respectively.

CSFB’s IT teams dramatically

accelerated the Firm’s “E”

readiness in 1999, with a new

state-of-the-art web site, an

online customer trading inter-

face in Fixed Income and

Equities, and a host of other

initiatives. 2000 will be even

more active.

35

Corporate ServicesFinancial Control and Product ControlHuman ResourcesInformation TechnologyLegal and ComplianceNew Business and Strategic PlanningOperationsTreasury/Tax

ENABLING CHANGETHROUGH OURSUPPORTSERVICES

The importance of CSFB’s Support Division in helping the

Firm take advantage of change has never been greater.

Helping clients capture opportunities and advancing the Firm’s

capabilities requires cutting-edge technology, high-volume

complex processing, and sophisticated risk management and

other controls.

Structurally for the Support Division, 1999 was important

in consolidating earlier acquisitions and integrating CSFP. The

enormous project challenge of Y2K was flawlessly executed;

but of greater strategic significance, we designed and

started implementing the BPTA program (Business Process

and Technology Architecture). This three-year program,

which encompasses multiple projects, will completely over-

haul CSFB’s core information and transaction-processing

engine, upgrading to state-of-the-art “plug and play” archi-

tecture. The resulting benefits to efficiency, service and

control will allow substantial reengineering of costs and

processes in most of the Support Division.

P R O F E S S I O N A L I Z I N GT H E F I R M ’ S C O M M U N I C A T I O N S

At the same time, the Support Division has worked

intensively in upgrading many other parts of CSFB’s infra-

structure, improving controls and paving the way for

continued growth.

The Firm’s financial systems and departments are

upgrading radically, employing a new global general ledger,

revised P&L process, and much more effective, sophisti-

cated analysis and controls.

We continue to modernize our physical infrastructure.

$466 million of capital expenditure on technology and

upgraded premises included completion of office expansion

in London, where over 5,000 of our people are now based.

And the record business volumes have meant a constant

“lights on” challenge for Operations and IT staff, as shown in

the following graphs.

The “E-commerce” revolution is touching us all, whether

through rapid development of new client interfaces or the

expansion of internal web-based communication that has

Stephen A. M. HesterChief Financial Officer

W E B L E A D E R S H I P I N T H E

“ N E W E C O N O M Y ”

The project required 913 person-years of effort

across the Firm’s 1,584 business applications.

Significant system upgrades were also

accomplished and new standards set for complex

project management which have positioned the

use of Technology@CSFB for the next millennium.

36 37

transformed interaction within CSFB’s global, functional

organization. CSFB will be at the forefront of “web” usage,

for clients and in our internal processes.

Just as important is our enhancement of “human capital.”

Throughout the Firm an intensified program of recruitment,

development and enhancement of people processes is under

way, led by Human Resources in partnership with the divisions.

We are also advancing development and training in other areas,

such as Compliance and Legal/Regulatory change.

The pace of change will not let up in 2000. We expect to

intensify our accelerated investment in E-commerce capabili-

ties and BPTA. We expect continued growth, more service

demands, and better and more sophisticated control standards

— all in tandem with a special focus on improving productivity.

Record business volumes have been supported with sharply

higher productivity.

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Our business gains crucial competitive advantage from fast,

efficient and global communication.

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Credit Suisse Group is the parent organization of Credit

Suisse First Boston. Its widespread activities are linked by

the strategy of capturing global leadership in the two dom-

inant trends emerging in the world’s financial services

market: asset gathering/asset management and financial

intermediation.

Credit Suisse Group operates a decentralized manage-

ment structure based on six business units, each geared to

the requirements of specific customer groups and markets:

Credit Suisse Private Banking is one of the world’s

largest private banks and has a strong presence in both the

Swiss and International markets. It specializes in providing

personal investment counseling and professional asset man-

agement for a sophisticated international clientele.

Credit Suisse is a leading bank in Swiss domestic busi-

ness, serving corporate and individual clients through a

multichannel strategy and an efficient branch network covering

all major locations. It is among the leaders in Internet banking.

The ‘Personal Financial Services Europe’ initiative tar-

gets affluent private clients in selected European markets,

offering a wide range of Credit Suisse Group and third-party

products, personalized advice and Internet content, and

seamless service through a combination of traditional and

electronic channels.

Winterthur Group is one of the leading insurance com-

panies in Europe and one of the largest international

insurance groups operating worldwide. It offers private and

corporate customers tailor-made insurance and pension solu-

tions at local and international levels.

Credit Suisse First Boston is a leading global investment

banking firm, providing comprehensive advisory, capital rais-

ing, investment, sales and trading, and financial products for

users and suppliers of capital around the world.

The worldwide activities of Credit Suisse Asset

Management are focused on the requirements of institutional

and mutual fund investors.

Credit Suisse Group is an institution well positioned in

today’s global financial markets. Its six core businesses give

a combination of strength and depth. While Credit Suisse

Group is headquartered in Zurich, it has an international

presence providing thorough market coverage, from major

centers to emerging markets.

CREDIT SUISSE

group

Services for institutionaland mutual fundinvestors worldwide

Corporate and individual customers in Switzerland

Services for private investors in Switzerlandand abroad

Global investment banking

Insurance for private and corporate customers worldwide

In response to the fast-moving demands of institutional clients, the

Operations Department developed its “Platinum Customer Service”

package. In only six months, the service has significantly improved

our support ranking among our largest customers. This tailored

effort highlights the essential front- and back-office teamwork

needed to differentiate CSFB with clients in the new century.

“ P L AT I N U M ” S E R V I C E T O C L I E N T SC S F B S U C C E S S F U L LY R E S O L V E D

T H E Y 2 K I S S U E

Financial services for affluent customers inEurope

PERSONAL FINANCIALSERVICES EUROPE

PRIVATE BANKING

FINANCIAL SERVICES

INVESTMENT BANKING

ASSET MANAGEMENT

38 39

Rainer E. Gut (2)

Chairman of the Board

Peter Spälti (2)

Vice Chairman of the Board

Thomas W. Bechtler (3)

Chairman of the Board of Zellweger Luwa

Peter Brabeck-Letmathe (2)

Chief Executive Officer of Nestlé S.A.

Marc-Henri Chaudet (3)

Lawyer

Walter B. Kielholz (3)

Chief Executive Officer of Swiss Re

Heini Lippuner (3)

Member of the Board of Novartis AG

Lukas Mühlemann (2)

Chief Executive Officer of Credit Suisse Group

Brady W. DouganCo-Head of Investment Banking and Equities

David C. MulfordChairman — International

Christopher Carter**Head of Equity CapitalMarkets and EuropeanInvestment Banking

Paul Calello**Head of Equity Derivativesand Convertibles

Christopher GoekjianHead of Fixed Income& Derivatives

Joseph T. McLaughlinExecutive Vice PresidentLegal and Regulatory AffairsEx-Officio Member

John F. NelsonChairman — Europe

Richard E. Thornburgh*Vice Chairman of theExecutive Board

Allen D. Wheat*Chairman of the Executive Board and Chief Executive Officer

Charles G. Ward IIIPresident and Co-Head of Investment Banking and Equities

Stephen A. M. HesterChief Financial Officer

Stephen E. StonefieldChairman — Pacific

EXECUTIVE

boardBOARD OF

directors

(1) Refers to the Board of Directors for the legal entityCredit Suisse First Boston, a Swiss bank containingthe activities of the global investment bank and theasset management business units.

(2) Member of Compensation Committee.(3) Member of Audit Committee.

* Member Credit Suisse Group Executive Board

** Joined Executive Board — March 2000

Michael L. MayoJohn M. McAvoyClaire M. McCarthyMichael J. McGheeJohn E. McGintyJonathan F. McHardyJoseph T. McLaughlinPatricia J. McLaughlinJeremy S. MeadSharon M. MeadowsSimon L. MeadowsMarcelo MedeirosDonald MeltzerSimon J. MenneerEric MeyerPeter S. MilhauptRodney M. MillerBen E. MingayRobert W. MitchellRobin MitraJun MiyazakiJuergen MoessnerPhilip J. MoineauKevin J. MorleyHarold D. MoseleyNeil MoskowitzChristopher C. MothersillRichard H. MoulderPeter J. MurrayStefano NatellaMartin J. NewsonRobert C. O’BrienMarc A. OdendallAdebayo O. OgunlesiTimothy P. O’HaraMasahiro OhshiroDavid C. O’LearyWayne C. OlsonThomas F. O’MaraSusumu OmoriYoshinori OnakaCarlos OnisEoin F. O’SheaDaniel OtthJohn S. OwenJ. Craig OxmanPhillip Z. PaceLuc P. PajotGunnar T. PalmRichard P. PalmieriVincent N. ParkinJames P. ParmeleeMark J. PattinsonRicardo PauloSarah J. PearsonAnthony M. PescoJake C. PetersSilvio PiffarettiCarlos Pinheiro, Jr.Harry C. PinsonSteven M. PlagKenneth E. PlagemanJonathan PlutzikDavid A. PopowitzChristian W. PorathFernando PradoJoseph M. PrendergastMalcolm K. Price

Trevor C. PriceSimon E. Prior-PalmerCraig A. PuffenbergerZhi Zhong QiuFrank P. QuattroneKathryn M. QuigleyD. Neil RadeyRussell T. RayDiego RecaldeThomas ReidDaniel P. ReingoldNorbert ReisPhilip J. RemnantThomas G. RiceGordon A. RichMelanie J. RichmondGregory P. RichterNick C. RileyNancy A. RochfordCarolynn H. RockafellowG. Davide RodriguesLuis Alberto RodriguesAntonio Rodriguez-PinaMatthew S. RoeserHartley R. RogersH. Elliott Rogers, Jr.Clayton J. Rohrbach IIIJohn J. RomanelliMark A. RosenJonathan K. RounerKevin R. RushPaolo A. RushingDavid RussellFernando RussoOlivier SachsJeffrey J. SalzmanThomas J. SandsEdward J. SantoroPierre O. SarkozyGuglielmo Sartori di

BorgoriccoNoriaki SasakiAnne C. SchaumburgPaul G. ScheufeleMichael SchmertzlerJohn E. SchmidtPeter H. SchmukiMaurits SchoutenGeorge A. Schreiber, Jr.Steven R. SchuhScott W. SeatonPhilip W. Seefried, Jr.Steven E. SeltzerMartin SennDavid J. ShannonWilliam C. SharpstoneAlan R. SheriffFrederick E. SherrillHyun Joe ShinEraj ShirvaniAndrew ShoresMason C. SleeperRobert S. SloanGeoffrey T. SmailesJörgen SmebyFrederick M. R. SmithStuart F. SmithElon D. Spar

David SpaughtonLawrence D. SperlingHansruedi StadlerDavid R. StephenRobert B. StevensRobert T. StewartCharles G. StonehillKevin StuddStephan SturmDavid A. SwainGT SweeneyPaul T. SweeneyMarc TabahMavis B. TaintorJoshua B. TanzerMasahito TatsumiAndrew R. TaussigColin A. TaylorLuther L. Terry, Jr.Sudip V. ThakorPeter ThomasDavid J. ThompsonEarnswell T. TiuEthan M. TopperPaul TregidgoBill R. TrotterDavid D. TrudeBruce A. TuckmanHans-Joerg TurtschiJohn J. TwomeyScott J. UlmAndrew S. UmbersRichard A. VaccariEric M. VarvelPhilip S. VasanMatty VengerikJoachim von SchorlemerJames H. VosChristopher E. VroomDavid M. WahDavid P. WalkerThaddeus J. WalkowiczJohn J. WalshAlastair J. M. WaltonTodd E. WarnockPaul J. WeinsteinBenjamin C. WestonDavid P. WheelerR. Alicia WhitakerMarc A. White, Jr.Robert S. WiesenthalBrendan WilliamsRobert L. WilloughbyJonathan J. WilmotKent WilsonRichard K. WincklesLewis H. WirshbaMark WolfenbergerRaymond S. WoodRoger WrightGary H. YablonSteven M. YanezLouis G. Zachary, Jr.John ZafiriouGail S. ZauderIvy L. Zelman

Managing Director — Senior AdvisorsJohannes AlbeckJuerg BrandNicholas O. BrigstockeSir Alan BuddDiana W. ChazaudJohn D. David-JonesJaime de Marichalar Saenz

de TejadaRichard B. duBuscMichael M. FortierCharles B. GatesGeoffrey P. HallGordon T. HallJohn S. HarrisonWilliam W. HigginsJoseph F. HuberThomas W. KeaveneyHans Albert KellerWilliam J. KimmelWilliam P. MelchionniHamish Leslie MelvilleThomas John MooreAndrea A. MoranteGordon S. MurrayWilliam S. PitofskyMartin RommNeal M. SossMarc H. SteglitzJ. Tijo Van MarleClark R. Van NostrandPote P. VidetWilliam M. WigderJohn C. Wilson

Vice ChairmenRichard H. BottJonathan R. DavieSimon M. de Zoete* Steven KochKen MillerRobert S. MurleyMark R. PattersonDouglas L. PaulDidier M. Pineau-ValencienneMark D. Seligman*Alan H. SmithGeorge B. Weiksner

4140

MANAGING

directorsOsama S. AbbasiOsmar Abib, Jr.Harry AdamopoulosJohn K. Adams, Jr.Mark A. AdleyJon M. AfrickNasser A. AhmadKristin M. AllenGuilherme AmaralJames L. AmineDavid L. AndersonMark C. AndersonNicholas AndrewsRome G. ArnoldLiza BaileyMichael G. BakerRobert F. BakerAlessandro BaldinMarcelo BarbaraThomas K. BarberKeven A. BarnumChuck BarraquiasJanos BarthaDavid C. BasileWilliam R. Battey, Jr.W. David BauerAllan J. BaumTed W. BaxterJoseph S. BeckerAndrew S. BenjaminJeremy J. BennettDonald R. BensonWalter BerchtoldPeter B. BlantonBenjamin R. BloomstoneJeffrey F. BlumTimothy D. BockHarold W. BogleJulia BondWillem G. BoschGeorge F. BoutrosWilliam BradyLester R. BrafmanJonathan D. BramDavid M. BrodskyH. Andrew Brownfield IIIJohn BrydsonEdison C. BuchananPaul D. BuckleyPhilippe M. BuhannicJeffrey H. BunzelJohn G. BurkeMarc A. CabiMartin P. CaffreyCarlo M. CalabriaElaine C. CampbellLloyd E. CampbellRichard B. CareyRichard CarlWayne F. CarrChristopher R. CarterCarlos Eduardo CastanhoAndrew J. CattleJohn G. Chachas

Christopher M. ChambersCharlie ChanLap Y. ChanPierre A. ChaoRichard J. CharKaukab N. ChaudhryJean-Christian CheyssonAndrew ChristieJohn C. ChrystalJames F. ClarkMichael W. ClarkDavid H. ClaytonBenjamin H. CohenRobert A. CohenGeorge W. ColemanPatrick D. ColemanJoseph A. ConeenyDavid M. ConnorsThomas A. ConnorsBrian M. CookAdrian R. T. CooperEldad CoppensOmar Martin CordesBertrand X. CothierJulie CraddockErnesto CruzDana J. CuffeRobert A. Curley, Jr.David R. CurtisTerrence E. CuskleyAdam de Courcy LingGilles de DumastAdam de JongJean de SkowronskiJames D. DeasyFrank J. DeCongelioDavid A. DeNunzioJean-Manuel P. DersyDonald J. DevineEdward W. DevineKatherine E. DietzeJack J. DiMaio, Jr.Alec D’JanoeffNichola H. DobinsonJoseph M. DonovanGreg L. DowlingJean-Francois DreyfusCharles B. EdelsteinJ. Anthony EhingerGeorg EhrenspergerRussell ElvidgeKevin W. EnglishD. Wilson ErvinMarcus A. L. EverardBertrand F. FaconMagnus FalkFrank J. Fanzilli, Jr.Michael A. FederMark L. FinermanRobert N. FinneyDavid C. FisherH. Andrew FisherJohn L. FlemingJeremy P. Fletcher

Steven R. FolandSimon J. FordJean-Marc ForneriPeter A. FowlerJonathan R. D. FoxMichael P. FriezoAnthony M. FryYukio FukudaTreacy B. GaffneyRichard W. GallantEdward P. GardenSeth D. GarrettChristian GellSurojit GhoshRichard GillingwaterPaul M. GimsonJames T. Glerum, Jr.Joel GlodowskiIrvin J. GoldmanRobert F. GoldrichAndrew D. GordonNicholas Gordon-SmithMarc D. GranetzMichael D. GreenspanSteven S. GreenwaldJonathan P. GrussingSanjeev GuptaMartin GutMichael G. HajialexandrouLawrence A. HamdanDavid HanMatthew C. HarrisNeil A. S. HarveyThomas E. HassenEdward R. HatfieldRandy L. HazeltonJames P. HealyGerhard HeinrichColin H. Hely-HutchinsonWallace C. HendersonAlan G. HighetEric HimeHerman C. HintzenF. Perkins Hixon, Jr.John C. HodgeJames B. HoesleyMark A. HolmesGeorge R. HornigMarc HotimskyAlan E. HowardKevin W. HudsonKeith HumfressPeter M. HydePer O. HylandHarris Hyman IVMarco M. IllyBrian C. ImrieRichard H. IversAlfred G. JacksonRobert JainMoez A. JamalJohn B. JardineRobert A. JeffeIan S. Jenkins

Grant C. JohnsonDaniel J. JohnsonJ. Leslie K. JohnstonWesley M. JonesFrançois JourdainPhilip KayFrançois KayatGiles B. KeatingAndreas I. Keller SarmientoPatrick T. KennedyRichard A. KersleySusan S. KilsbyThomas KirkpatrickJohn V. KirnanCharles P. Kirwan-TaylorFritz T. KleinM. Kristin KleinRobert A. KlugmanCary A. KochmanJ. Steven KrausJames E. KreitmanRobert S. KricheffPaul KuoRaymond S. KuramotoAdam S. KurzerMichael K. KwatinetzMark B. LandisKarim LariStephen M. LazarusKarsten le BlancBryce W. LeeJohn LeeSung Jin LeeJames H. Leigh-PembertonCameron LesterRobert J. LevittBrett M. LevyBarry LewisD. Scott LindsayBruce W. LingSamuel G. LissGerald M. LodgeStephen T. LongDavid J. LooAnn F. LopezFrank H. LópezChristian LubiczRobin R. MacdonaldGeorge M. MaddisonFrançois J. MaisonrougeG. David M. Maletta IIGuillaume A. MalleCarmen MarinoMark S. MaronIan MarshJeremy MarshallChristopher G. MartinKeith T. MartinMichael E. MartinDavid R. MathersDavid J. MatlinPeter R. MattMichael J. MauboussinDavid A. Mayes

* Deputy Chairman, Credit Suisse First Boston (Europe)

42

43

PERCENT

DOLLARS IN MILLIONS (UNAUDITED) 1999 1998 CHANGE

Revenues

Fixed Income and Derivatives $ 4,221 $ 2,586 63%

Equity 3,212 1,655 94%

IBD 2,189 1,791 22%

PED and Other 131 681 na

Total 9,753 6,713 45%

Expenses

Personnel expense 5,368 3,728 44%

Execution, clearing and brokerage 293 351 -17%

Other operating 1,529 1,262 21%

Total 7,190 5,341 35%

Gross profit 2,563 1,372 87%

Depreciation and amortization 295 195 51%

Write-downs, provisions and losses 527 1,095 -52%

Pretax income before extraordinary/exceptional

items and minority interest 1,741 82 2023%

Income taxes 479 159 201%

Net income (loss) before extraordinary/exceptional

items and minority interest $ 1,262 $ (77) na

Extraordinary/exceptional items, net — (42) na

Minority interest — (35) na

Net income (loss) after minority interest $ 1,262 $ (154) na

(1) The income statements are for the Credit Suisse First Boston global investment banking business unit. They are based on Swiss accounting rules for banks as modified for revenue presentation and the treatment of execution, clearing and brokerage costs as an expense rather than as contra-revenue.

(2) Certain 1998 amounts have been reclassified to conform to the 1999 presentation.

financialSTATEMENTS

INCOME STATEMENTS

OF THE

BUSINESS UNIT

Year Ended

December 31, 1999

and Year Ended

December 31, 1998

BALANCE SHEETS

OF THE

BUSINESS UNIT

PERCENT

DOLLARS IN MILLIONS (UNAUDITED) DEC 31,1999 DEC 31,1998 CHANGE

Assets

Cash $ 727 $ 855 -15%

Money market papers 14,327 13,716 4%

Due from banks 105,782 100,892 5%

of which securities lending and

reverse repurchase agreements 84,114 56,948 48%

Due from other business units 1,551 1,377 13%

Due from customers 33,877 44,743 -24%

of which securities lending and

reverse repurchase agreements 14,884 20,825 -29%

Mortgages 4,601 5,220 -12%

Securities and precious metals trading portfolios 76,874 73,428 5%

Financial investments 3,976 7,325 -46%

Non-consolidated participations 640 317 102%

Fixed assets 1,574 1,416 11%

Accrued income and prepaid expenses 3,644 4,978 -27%

Other assets 27,651 36,429 -24%

of which replacement value of derivatives 24,665 33,707 -27%

Total Assets $ 275,224 $ 290,696 -5%

Liabilities and Shareholder’s Equity

Liabilities in respect of money paper $ 18,848 $ 14,489 30%

Due to banks 139,434 134,788 3%

of which securities borrowing and

repurchase agreements 42,024 54,484 -23%

Due to other business units 5,968 11,891 -50%

Due to customers, in savings and investment deposits 69 131 -47%

Due to customers, other deposits 43,526 51,751 -16%

of which securities borrowing and

repurchase agreements 19,624 16,519 19%

Bonds and mortgage-backed bonds 21,577 24,337 -11%

Accrued expenses and deferred income 6,515 6,432 1%

Other liabilities 30,013 38,551 -22%

of which replacement value of derivatives 25,436 35,986 -29%

Valuation adjustments 1,479 1,191 24%

Total liabilities 267,429 283,561 -6%

Total shareholder’s equity 7,795 7,135 9%

Total Liabilities and Shareholder’s Equity $ 275,224 $ 290,696 -5%

(1) The above balance sheets are based on Swiss accounting rules for banks. They include allocations fromthe real estate units within Credit Suisse Group.

(2) Based on the changes of accounting principles, the accounting for securities lending and borrowing trans-actions has been changed in 1999. Using the revised accounting rules, the 1998 total balance sheetwould have been reduced by $6.1 million.

44 45

markets revenues and interest costs, are allocated to divi-sional results. Capital markets revenues and related costsare shared among IBD, FID and Equity, respectively.

Divisional revenues for the years ended December 31,1999 and 1998 are as follows:

($ MILLIONS) 1999 1998 %

CHANGE

FID $ 4,221 $ 2,586 63%

Equity 3,212 1,655 94%

IBD 2,189 1,791 22%

PED and Other 131 681 na

$ 9,753 $ 6,713 45%

The geographic distribution of revenues and employees forthe years ended December 31, 1999 and 1998 are as follows:

1999

1998

(1) Excludes Russia-related losses, which distort the European data.

Employees

37% North America

18% Latin America/Asia

45% Europe

Revenues (1)

42% North America

10% Latin America/Asia

48% Europe

Employees

38% North America

17% Latin America/Asia

45% Europe

Revenues

42% North America

23% Latin America/Asia

35% Europe

Fixed Income and Derivat ives

Revenues for the FID Division increased significantly in 1999when compared with 1998. ROE was 16% in 1999 versuslosses in 1998.

The increase in revenues in 1999 over 1998 was largelydue to more normal trading in those areas most affected by1998 market difficulties together with pleasing growth in thecustomer-oriented Credit Products activities. As discussedabove, substantial revenues were achieved in 1999 fromemerging-markets activities based on a restructured busi-ness model and sharply lower risk profile. Latin America wasparticularly strong thanks to an excellent contribution fromGarantia, which CSFB acquired in 1998. Other credit-sensi-tive areas that were negatively impacted by 1998 marketconditions, such as Credit Products, Distressed Trading andLeveraged Funds, also achieved significantly improvedresults in 1999.

Improved results were also achieved in 1999 in InterestRate Products, Swiss Fixed Income and Commodities.

CSFB reported losses in 1999 in its Real Estate ProductGroup (“REPG”). In 1998, REPG generated substantial rev-enues, particularly from asset securitizations. The market forreal estate-related asset securitizations slowed at the end of1998. Moreover, CSFB restructured this business in 1999with a view toward substantially reducing its risk concentra-tions. This preemptive provisioning, together with creditevents specific to REPG’s asset portfolio, caused losses to berecognized in 1999. In executing this plan, CSFB has alreadyreduced its economic capital deployed in REPG by 28%.

In addition, reduced revenues were recognized in moneymarkets and foreign-exchange trading in 1999 versus 1998.

Equity

Reflecting continued strong market share growth in all areasfrom both the organic investment and acquisition since1997, revenues for the Equity Division increased 94% in1999 over 1998. Substantial increases were recognized inrevenues from customer-driven businesses across all geo-graphic locations. The star performer was the NorthAmerican business and, in terms of industry, technology.

Equity derivatives continued its outstanding performanceas revenues increased over 1998 levels, particularly in con-vertibles and Swiss products.

ROE for the Equity Division significantly exceeded 30%in 1999.

Equity revenues, inclusive of the part of capital marketsrevenues reported in IBD, exceeded $3,700 million and$1,900 million for the years ended December 31, 1999 and1998, respectively.

I N T R O D U C T I O N

Credit Suisse First Boston (“CSFB”) is a global investmentbanking firm with principal activities in client financing andadvisory services, sales and trading of securities, foreignexchange and derivative products, and other financial assets.CSFB is a business unit of Credit Suisse Group (“CSG”).

CSFB operates primarily within the legal entity CreditSuisse First Boston (the “Bank”), a Swiss bank and a sub-sidiary of CSG. The Bank also contains the activities of theCredit Suisse Asset Management business unit of CSG.Shown herein is financial data for the CSFB business unit,which constitutes substantially all of the assets and liabilitiesof the Bank as of December 31, 1999 and 1998, respec-tively. The results of the CSFB business unit also reflectcertain transactions recorded within CSG subsidiaries otherthan the Bank. More detailed financial information on theBank and related unqualified audit opinion is contained in theAnnual Report of the Bank.

There continue to be significant flows of business andservices among the entities of CSG.

CSFB’s activities are subject to various risks includingfluctuations in trading markets, currency risk, national eco-nomic and political risk and in the volume of market activity.CSFB’s results may also be impacted by competitive factors.Consequently, CSFB’s earnings may be subject to wide fluc-tuations. While the legal reporting currency of the Bank isthe Swiss franc, CSFB primarily manages its businessesbased on a US dollar functional currency, as presentedherein, and consistent with its earnings and asset mix.

CSFB’s strategic plans contemplate continued invest-ment in its businesses through organic growth and, ifappropriate, selective acquisition.

M A R K E T E N V I R O N M E N T

CSFB’s 1999 results were impacted by a variety of marketconditions. Equity markets, including new issues, were gen-erally robust throughout 1999, notwithstanding volatilitycaused by inflation fears and higher short-term rates. Levelsof mergers and acquisitions activity increased in 1999, bothin volume and number of deals, over 1998 levels.

The market environment for CSFB’s fixed income prod-ucts was strong in the first third of 1999 but slowedconsiderably thereafter as interest rates rose. Real estateand related product markets did not recover to first-half1998 conditions.

Also, in July 1999, the Financial Supervisory Agency ofJapan (“FSA”) concluded their examination of CSFB’sJapanese activities and issued sanctions against certain of

CSFB’s legal entities in Japan. These sanctions held backactivity in Japan during the year.

CSFB’s 1998 results were heavily impacted byunprecedented economic events that led to a general down-turn in markets overall. In the third quarter of 1998, Russiaexperienced an economic collapse leading to the default onand a restructuring of its sovereign debt obligations. TheRussia collapse adversely impacted other emerging markets.

In addition to negatively impacting emerging markets,these events — in combination with the liquidity tighteningon hedge funds — caused unprecedented volatility in globalmarkets and credit-sensitive securities in the second half of1998. Also, capital markets activity was substantially cur-tailed during much of this period.

As a result, the strong markets that persisted through-out 1997 and the first half of 1998 turned downward in thesecond half of 1998. This downturn adversely impactedCSFB’s trading businesses — primarily its Fixed Income andDerivatives and Equity Divisions.

Commencing January 1, 1999, CSFB integrated itsFixed Income and CSFP divisions into one — Fixed Incomeand Derivatives (“FID”). This integration produced synergiesin product and risk management. In 1999, CSG repurchasedthe 20% minority interest in CSFP held by Swiss Re, whichresulted in CSFP becoming a wholly owned subsidiary ofCSG. This also facilitated the integration of FID. The resultsdiscussed herein are based on the new organization of theFixed Income and Derivatives Division showing its effect, ona pro forma basis, on 1998 results.

R E S U LT S O F O P E R A T I O N S

CSFB’s revenues for 1999 were $9.8 billion, 45% higher than1998 revenues of $6.7 billion. Revenues for 1999 increasedover 1998 in the Fixed Income and Derivatives, Equity andInvestment Banking Divisions. These increases were partiallyoffset by a decrease in Private Equity Division and Other rev-enues, which, in 1998, primarily resulted from a gain from thesale of a strategic investment.

The source of these divisional revenues are primarilyrealized and unrealized net trading gains, net interest incomeresulting from trading and lending activities, fee-based earn-ings from capital markets activities, and commissions oncustomer transactions and advisory services. Divisional rev-enues are based on Swiss accounting rules for banks asmodified for revenue presentation, by the classification ofexecution, clearing and brokerage costs as an expense asopposed to a contra-revenue, and CSFB’s internal manage-ment reporting process in which revenues, including capital

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

46 47

25% ownership, resulted in First Pacific becoming a whollyowned subsidiary of the Bank. First Pacific is an investmentbanking firm with a leadership position in the equity marketsin Australia. In addition, in early 1998, CSFB acquired thecommon stock of First NZ Capital, a New Zealand invest-ment banking enterprise.

Garantia Acquisition

On July 31, 1998, CSG and the Bank completed the acquisi-tion of all of the outstanding capital stock of Banco deInvestimentos Garantia S.A., Garantia Limited, and certain oftheir subsidiaries and affiliates (collectively, “Garantia”) (suchtransaction, the “Garantia Acquisition”). The initial considera-tion payable by CSG to the Sellers in the Garantia Acquisitionconsisted of (i) $200 million and (ii) ordinary shares of CSGhaving a fair market value of $475 million, which becomefreely transferable over a six-year period. Furthermore, addi-tional amounts will become payable, principally to continuingemployees of Garantia, under a retention plan if Garantiameets certain performance targets during the 1998-2001period. At year-end 1999, the Bank recognized additionalgoodwill of $315 million, pursuant to the retention plan, result-ing from Garantia’s strong earnings since acquisition.Garantia’s principal business activities are fixed income andequity trading, asset management and investment banking.

Long-Term Capital Portfolio, L.P. Recapitalization

On September 28, 1998, CSFB agreed to participate with aconsortium of commercial banks and investment firms in arecapitalization of Long-Term Capital Portfolio, L.P. (“LTC”),a troubled private investment fund managed by Long TermCapital Management, L.P. Under the plan, consortium mem-bers provided approximately $3.6 billion in the aggregate innew equity capital to LTC. The Bank invested, directly andthrough an affiliate, $300 million to LTC in return for equity.CSFB engaged in transactions with LTC prior to the recapi-talization, the majority of which were collateralized with USTreasury securities or other collateral. The net asset valueattributable to this investment, which is carried at lower ofcost or market, has appreciated since the date of purchaseand capital redemptions have reduced the outstandinginvestment to $29 million at December 31, 1999.

L I Q U I D I T Y A N D C A P I T A L R E S O U R C E S

Assets and Leverage

CSFB maintains a liquid balance sheet with a majority of theFirm’s assets consisting of marketable securities inventoriesand other trading positions and collateralized financing

lion, respectively (representing the expected loss amount(“ACP”) calculated by the credit-plus-risk-managementapproach). The ACP increased in 1999 giving effect toCSFB’s increased conservatism toward risk in its REPG busi-ness. Also contained in write-downs, provisions and lossesare various litigation provisions as well as amounts relating toother credit-sensitive trading operations.

Additional information on write-downs, provisions andlosses, and related exposures is contained in the Bank’s andCSG’s annual reports.

Income Taxes

CSFB’s effective tax rate in 1999 was approximately 28%.CSFB’s significant geographic diversification results in widelydispersed income tax expense on earnings. Consequently,this rate represents a blended tax rate of the various jurisdic-tions in which CSFB operates.

CSFB incurred income tax in 1998 in excess of reportedpretax income. The effective rate differs significantly from1999 as a result of losses that were concentrated in tax juris-dictions with low tax rates or where net operating losscarryforwards exist while profits were made in other higher taxlocations. In addition, the accounting practice of generallyavoiding the establishment of deferred tax assets contributedto this effect.

Extraordinary/Exceptional i tems

Extraordinary/Exceptional items in 1998 primarily relate toreal estate write-offs (of $50 million, net of tax) in Moscowdriven by the reduced level of business activity following theRussian default.

Acquisi t ions and Investments

Recent Developments

On February 8, 2000, CSFB announced that it agreed toacquire the Japanese Equities division of Schroders. Thetransaction is expected to be completed in March 2000. Thekey employees of the acquired business have agreed to joinCSFB, subject to completion. The acquired businessemploys over 100 people, largely in Tokyo, with related sep-arate teams in London, Zurich and New York.

This transaction is expected to facilitate the growth ofCSFB’s Japanese equities business.

First Pacific and First NZ Capital Acquisition

In early 1998, CSFB agreed to acquire 75% of the commonstock of First Pacific, Stockbrokers Limited and certain affil-iates (“First Pacific”), which, when combined with its existing

I B D

IBD revenues increased 22% in 1999 over 1998 (42%increase in M&A, Debt and Equity Capital Markets rev-enues), and market share gains were achieved reflectingCSFB’s ongoing investment in this division. Net interestincome from lending declined to just 5% of the total, reflect-ing the successful deployment of capital out of that business(capital employed in lending has been reduced by 66% since1997 and has now reached the target range below $1 billion).

IBD revenues, inclusive of gross debt and equity capitalmarkets revenues, exceeded $2,800 million and $2,200 mil-lion for the years ended December 31, 1999 and 1998,respectively.

PED and Other

Revenues reported in the PED and Other division are primar-ily the result of investments managed at the corporate level,as well as revenues earned by the Private Equity Division,which manages funds with investment commitments exceed-ing $3.6 billion, globally.

Expenses

CSFB’s aggregate expenses increased in 1999 over 1998,reflecting strong business volumes and a continuing highlevel of investment in the business, the fruits of which areshown in the Firm’s continuing market share advances. Theseincreases are primarily the result of higher incentive compen-sation, increased hiring in most business divisions andcontinued investment in support infrastructure. In mid-1998,CSFB also made significant investments in personnel includ-ing the acquisition of Garantia and a group specializing intechnology banking and equity research. The full-year effectof this investment is reflected in the 1999 expense base.Support infrastructure costs in 1999 increased as a result ofthe increased demands of a changing business environmenton CSFB’s internal control structure, particularly in light ofCSFB’s wide geographic diversification and business mix.

Staff costs increased 44%, primarily as a result ofincreased incentive bonus awards and related payroll taxesassociated with improved profitability. In addition, staff costsincreased due to the 7% increase in headcount associatedwith the previously mentioned initiatives as well as fromsalary increases. Staff costs as a percent of revenues for1999 were 55%, in line with industry norms.

Execution, clearing and brokerage expense decreasedin 1999 when compared with 1998, primarily due todecreased costs associated with emerging-markets activity.

Other operating expenses primarily include costs forcommunications and equipment, occupancy, professional

services and business development. The distribution of otheroperating expenses for the years ended December 31, 1999and 1998 are as follows:

Other Operat ing Expenses 1999

Other Operat ing Expenses 1998

Other operating expenses increased in 1999 over 1998across all categories due to increases in headcount and con-sultants, CSFB’s expansion of its premises in London as wellas the impact of support infrastructure initiatives.

Write-downs, provisions and losses

Write-downs, provisions and losses decreased in 1999 over1998, primarily as a result of credit provisions reflected in1998, which were largely due to the economic collapse ofRussia. Specifically, 1998 credit provisions were madeagainst forward contracts, loans, reverse repurchase agree-ments, and other assets and derivative contracts involvingRussian products and/or Russian counterparties. AtDecember 31, 1999 and 1998, CSFB’s credit provisionsrelated to Russia totaled approximately $790 million and$980 million, respectively. The decrease in these provisionsin 1999 was primarily due to write-offs against specificassets.

CSFB also has substantial credit provisions related toloans outstanding in Asia resulting from the economic crisisthat occurred in that region in the fourth quarter of 1997.CSFB’s credit provisions related to Asia totaled approxi-mately $410 million at December 31, 1999 and 1998,respectively.

Other than Russian and Asian provisions, CSFB chargedagainst 1999 and 1998 earnings $221 million and $86 mil-

17% BusinessDevelopment

33% ProfessionalServices

25%Communicationsand Equipment

17% Occupancy

8% All Other

16% BusinessDevelopment

31% ProfessionalServices

21%Communicationsand Equipment

15% All Other

17% Occupancy

48 49

agement, Credit Risk Management, and Risk Measurement & Management are discussed herein on page 33.

Management of Other Risks

Other business-specific risks are managed primarily throughdesignated groups and committees within the different divi-sions. These committees include groups that will addressInvestment Banking and Private Equity transactions and newbusiness initiatives. In addition, to supplement its controlenvironment, CSFB has an oversight function that is struc-tured regionally and is designed to complement CSFB’sfunctional organization. The oversight functions consists of (i)selected Executive Board members who have overall respon-sibility for oversight in their respective regions, (ii) regionaloversight managers who assist the Executive Board mem-bers with this responsibility, and (iii) a country manager ineach country who manages local oversight issues. RegionalOversight and Country Management serve as an additionalline of control and concentrate on regulatory and reputationalissues, supervise legal entities and support management inefforts to improve the control environment. This oversightfunction works with business and Finance, Administrationand Operations executives in monitoring and enhancingCSFB’s controls. Various control committees act as clearing-houses for certain control issues. The Legal and Compliancedepartment advises CSFB on how to conduct its businessesand other activities in compliance with applicable laws, rulesand regulations and assists in setting compliance policies andethical standards.

Additional disclosure on CSFB’s risk management prac-tices is contained in the Bank’s Annual Report.

In March 2000, the Bank intends to pay a dividend to itsshareholder. In March 1999, the Bank paid a dividend of 240million Swiss francs to its shareholder.

The Bank and its subsidiaries are subject to various cap-ital requirements imposed by various regulatory bodiesaround the world, including the Swiss Banking Commission.At December 31, 1999, the Bank was in compliance withthese requirements. At December 31, 1999, the Bank had aBIS Tier 1 and total capital ratio of 9.9% and 17.9%,respectively, compared with 8.4% and 15.4% at the end ofthe prior year.

Risk Management

General Approach

The general risk management policy of CSG serves as thebasis for CSFB’s risk management programs. The primaryresponsibility for risk management lies with CSFB’s seniorbusiness line managers. They are held accountable for allrisks associated with their businesses, including credit risk,market risk, liquidity risk, legal risk, reputational risk andoperating risk, and are responsible for supplementingCSFB’s independent controls by maintaining adequate inter-nal control systems. The risk management programs aredesigned to ensure that there are sufficient independentcontrols to monitor all risks properly.

The CSG Board of Directors is responsible for determin-ing the general risk policy and risk management strategy ofCSFB. The Chairman’s Committee of the Board of Directorsapproves the overall market risk ceiling, reviews risk expo-sure on a quarterly basis, and approves country limits andother risk ceilings. CSFB’s approach to Strategic Risk Man-

agreements. Collateralized financing agreements consist ofresale agreements and securities lending predominantlysecured by government and corporate obligations. Levels oftrading inventory and collateralized financing agreements aredependent on market conditions, volume of activity and cus-tomer needs. Accordingly, CSFB’s total assets and financialleverage can fluctuate significantly.

CSFB, as part of its investment banking and fixedincome emerging-market activities, also maintains a loanportfolio. In addition, as part of CSFB’s fixed income activi-ties, trading inventories include emerging-markets positions,whole loans, leveraged funds and high-yield securities. CSGand its subsidiaries also make merchant banking investmentsthrough CSFB’s Private Equity Division.

In US dollar terms, total assets at December 31, 1999declined moderately when compared with total assets atDecember 31, 1998. CSFB’s ability to support increases intotal assets is a function of its ability to obtain short-termsecured and unsecured funding and access long-term capitalmarkets.

F U N D I N G A N D C A P I T A L S T R A T E G Y

Funding

The Bank has a broad-based worldwide funding franchise.Global short-term funding is managed by a centralizedfinancing unit, which oversees local funding operations. Thisglobal funding function provides coordination and control ofpricing and funding tactics, while the local market presenceprovides for investor diversity and access to unique marketopportunities. The Bank aims to continually broaden its funding base by geography, investor, issuing entity andinstrument type.

The Bank’s funding sources include interest-bearingand non-interest-bearing deposits, commercial paper, certifi-cates of deposit, federal funds purchased, medium-termnotes, long-term debt, capital securities and shareholder’sequity. The Bank places particular emphasis on a large baseof well-diversified and historically stable fiduciary deposits forits day-to-day funding needs. Notwithstanding the historicstability of the Bank’s unsecured funding sources, CSFB hasa secondary source of liquidity flowing through itsbroker/dealer businesses. CSFB can access significant liq-uidity through the secured funding markets (repurchaseagreements and other collateralized arrangements), whichhave proven reliable in high-stress environments. This sec-ondary source of liquidity is an important means of ensuringavailability of alternative funding for the purpose of meetingbusiness plans and commercial commitments.

Finally, CSFB’s liquidity (i.e., unsecured and securedsources) is continually monitored to ensure that the Firm canmeet its business objectives through various high-stress sce-narios.

To provide alternative forms of liquidity, the Bank,through its subsidiaries, has renewed a committed revolvingcredit facility with various banks that, if drawn upon, wouldbear interest at short-term rates. The facility is for generalcorporate purposes. This facility provides for borrowings upto $1.5 billion during 2000. As of the date hereof, therewere no amounts outstanding under the facility.

Capital Strategy

The Bank and its subsidiaries issue long-term debt throughvarious US and Euro Medium-Term Note Programs as wellas syndicated and privately placed offerings around theworld. To satisfy Swiss and local regulatory capital needs ofits regulated subsidiaries, the Bank raises subordinated long-term borrowings. At December 31, 1999, the Bank hadlong-term debt (including the current portion) of $22 billion,with $9 billion representing subordinated debt. The Bankexpects to continue to access the capital markets in supportof the Bank’s existing businesses, as well as any new busi-ness initiatives and the resultant capital and fundingrequirements.

During 1999, CSFB issued $125 million of perpetualpreferred securities, qualifying as conventional Tier 1 capitaland solo Upper Tier 2 capital. CSFB is the first Swiss bank toissue such a security qualifying as Tier 1 capital.

In selecting the most appropriate funding sources at anypoint in time, such factors as market conditions, interest ratelevels, liquidity needs and maturity profile objectives are con-sidered. Further, in order to manage interest rate, currencyand other risks associated with the above borrowings, theBank has entered into various derivative transactions.

The Bank’s access to external financing is dependent onthe short- and long-term credit ratings of the Bank and cer-tain of its subsidiaries. The cost and availability of externalfunding is generally a function of the ratings. As of the datehereof, the Bank’s debt ratings were as follows:

LONG-TERM

SENIOR JUNIOR

SHORT-TERM SENIOR SUBORDINATED SUBORDINATED

Moody’s P-1 A1 A2 A3

S&P A-1+ AA AA- A+

Fitch IBCA Ltd. F-1+ AA AA- A+

BankWatch TBW-1 AA AA- A+

51

AtlantaGeorgia Pacific Center133 Peachtree Street N.E.40th FloorAtlanta, GA 30303-1841USAVoice 1 404 656 9500Fax 1 404 522 3043

BaltimoreFirst Union Signet Tower7 St. Paul Street, Suite 5Baltimore, MD 21202USAVoice 1 410 223 3000Fax 1 410 223 3105

Boston100 Federal Street30th FloorBoston, MA 02110-1802USAVoice 1 617 556 5500Fax 1 617 542 1814

One Boston Place30th FloorBoston, MA 02108USAVoice 1 617 854 7100Fax 1 617 854 7160

Buenos Aires Esmeralda 130, Piso 221035 Buenos AiresArgentinaVoice 54 11 4394 3100Fax 54 11 4325 4717

ChicagoAT&T Corporate Center227 West Monroe StreetChicago, IL 60606-5016USAVoice 1 312 750 3000

Houston600 Travis StreetSuite 3030Houston, TX 77002-3003USAVoice 1 713 220 6700Fax 1 713 236 9222

Los Angeles10880 Wilshire Blvd21st FloorLos Angeles, CA 90024USAVoice 1 310 481 2600Fax 1 310 481 2800

MexicoCampos Eliseos #345, Piso 9Edificio OmegaCol. Chapultepec Polanco11560 Mexico, D.F.MexicoVoice 52 5 283 89 00Fax 52 5 283 89 30

Montreal1250 Rene-LevesqueBlvd West, Suite 3935Montreal H3B 4W8CanadaVoice 1 514 933 8774Fax 1 514 933 7699

NassauBahamas Financial Centre4th FloorCharlotte & Shirley StreetP.O. Box N-4928Nassau, BahamasVoice 1 242 356 8100Fax 1 242 326 6589

New YorkEleven Madison AvenueNew York, NY 10010-3629USAVoice 1 212 325 2000

Palo Alto2400 Hanover StreetPalo Alto, CA 94304USAVoice 1 650 614 5000Fax 1 650 614 5030

1510 Page Mill RoadSuite 2Palo Alto, CA 94304-1135USAVoice 1 650 614 1600Fax 1 650 614 1601

Philadelphia11 Penn Center26th FloorPhiladelphia, PA 19103-2929USAVoice 1 215 851 1000Fax 1 215 851-0352

San Francisco201 Spear StreetSan Francisco, CA 94105-1637USAVoice 1 415 836 7600Fax 1 415 836 7751

São PauloAvenida Brigadeiro FariaLima, 306401451-000 São Paulo, SPBrazilVoice 55 11 3841 6000Fax 55 11 3841 6900

TorontoOne First Canadian PlaceSuite 3000, P.O. Box 301Toronto, Ontario M5X 1C9CanadaVoice 1 416 352 4500Fax 1 416 352 4680

OFFICE LOCATIONS

THE americas

50

AmsterdamHonthorststraat 191071 DC AmsterdamThe NetherlandsVoice 31 20 5754 890Fax 31 20 5754 860

BudapestNagy Jeno U.12H-1126 BudapestHungaryVoice 36 1 202 2188Fax 36 1 201 9196

Cairo32 Haroon StreetP.O. Box 224DokkiCairoEgyptVoice 20 2 331 8800Fax 20 2 331 8880

FrankfurtMesse Turm60308 Frankfurt am MainGermanyVoice 49 69 75 38 0Fax 49 69 75 38 2444

Geneva59 Route De ChancyP.O. Box 900CH-1211 Geneva 70SwitzerlandVoice 41 22 394 70 00Fax 41 22 792 47 32

GuernseyHarbour House4th FloorSouth EsplanadeSt. Peter Port, Guernsey,Channel Islands GY1 1APVoice 44 1481 713 997Fax 44 1481 714 111

IstanbulBuyukdere CaddesiAli Kaya SokakPolat Plaza B Blok,No. 4 Kat 1380840 Levent, IstanbulTurkeyVoice 90 212 278 2500Fax 90 212 281 6444

JohannesburgSandton City Office Tower9th Floor5th Street, Corner Rivonia Rd2196 SandownRepublic of South AfricaVoice 27 11 884 67 41Fax 27 11 884 71 21

Kiev34 Chervonoarmiyska Street252004 KievUkraineVoice 380 44 247 1900Fax 380 44 247 5790

Limassol199 ChristodoulouHadjipavolou AvenueP.O. Box 575303316 LimassolCyprusVoice 357 534 12 44Fax 357 581 74 24

LondonOne Cabot SquareLondon E14 4QJUnited KingdomVoice 44 20 7888 8888Fax 44 20 7888 1600

LuganoVia Canova 15P.O. Box 2836CH-6900 LuganoSwitzerlandVoice 41 91 802 64 82Fax 41 91 921 00 67

MadridOrtega Y. Gasset 22-2428006 MadridSpainVoice 34 91 423 1600Fax 34 91 423 1638

MilanVia Turati 920121 MilanoItalyVoice 39 02 7702 1Fax 39 02 7702 2216

Moscow5 Nikitsky Pereulok(Formerly Belinski Street)Moscow 103 009RussiaVoice 7 501 967 8200Fax 7 501 967 8210

Paris21 Boulevard de la Madeleine75038 ParisCedex 01FranceVoice 33 1 40 76 8888Fax 33 1 42 56 1082

PragueStaromestske Nam. 15110 00 Prague 1Czech RebublicVoice 420 2 210 83111Fax 420 2 210 83222

Tashkent1 Turab Tula Street700003 TashkentRepublic of UzbekistanVoice 998 71 120 6166Fax 998 71 120 6177

ViennaPalais CorsoMahlerstrasse 12-51010 ViennaAustriaVoice 43 1 512 3023Fax 43 1 512 302323

WarsawFIM Tower, XIII FloorAl Jerozolimskie 8102-001 WarsawPolandVoice 48 22 695 0050Fax 48 22 695 0055

ZugBahnhofstrasse 17P.O. Box 234CH-6301 ZugSwitzerlandVoice 41 41 727 97 00Fax 41 41 727 97 10

ZurichUetlibergstrasse 231P.O. Box 900CH-8070 ZurichSwitzerlandVoice 41 1 333 55 55Fax 41 1 333 55 99

africa, europeAND middle east

52

AucklandThe ANZ Centre23-29 Albert StreetLevel 20AucklandNew ZealandVoice 64 9 302 5500Fax 64 9 302 5580

BangkokAbdulrahim Place, 14th Floor990 Rama IV RoadSilom, BangrakBangkok 10500ThailandVoice 66 2 636 1546Fax 66 2 636 1553

BeijingSilver Tower31st Floor2 Dong San Huan Bei RoadBeijing 100027People’s Republic of ChinaVoice 86 10 6410 6611Fax 86 10 6410 6133

Hong KongThree Exchange Square22nd Floor8 Connaught Place, CentralHong KongVoice 852 2101 6000Fax 852 2101 7990

JakartaDanamon Aetna Life Building24th FloorJalan Jenderal

Sudirman Kav, 45Jakarta 12930IndonesiaVoice 62 21 577 0762Fax 62 21 577 0761

Kuala LumpurMenara Keck SengSuite 27-02, 27th Floor203 Jalan Bukit Bintang55100 Kuala LumpurMalaysiaVoice 60 3 242 5199Fax 60 3 241 6199

LabuanMain Office TowerLevel 10 (B)Financial Park Labuan87000 Labuan F.T.MalaysiaVoice 60 87 425 381Fax 60 87 425 384

ManilaThe Enterprise Center18th Floor, Tower 2, Ayala Ave.Corner Paseo de RoxasMakati CityPhilippinesVoice 63 2 886 5670Fax 63 2 886 5947

Melbourne101 Collins Street27th FloorMelbourne, Victoria 3000AustraliaVoice 61 3 9280 1666Fax 61 3 9280 1890

Mumbai(Formerly Bombay)35/39 Free Press House, 3rd Floor215 Free Press Journal, MargNariman PointMumbai 400 021IndiaVoice 91 22 284 6888Fax 91 22 285 1949

SeoulHanwha Building13th Floor111-5 Sokong-Dong,Chung-KuSeoul 100-070KoreaVoice 82 2 3707 3700Fax 82 2 3707 3881

Shanghai17th Floor, South TowerStock Exchange Building528 Pudong South RoadPudong, ShanghaiPeople’s Republic of ChinaVoice 86 21 6881 8418Fax 86 21 6881 8417

SingaporeOne Raffles Link#03-01 Singapore 039393Voice 65 212 2000Fax 65 212 4868

SydneyGateway Level 311 Macquarie PlaceSydney,New South Wales 2000AustraliaVoice 61 2 8205 4400Fax 61 2 8205 4676

Taipei6th Floor, Union Enterprise PlazaNo. 109, Section 3Min-Sheng East Road,Taipei, TaiwanVoice 886 2 2715 6388Fax 886 2 2718 8934

TokyoShiroyama Hills26th Floor4-3-1 ToranomonMinato-Ku, Tokyo 105-6002JapanVoice 81 3 5404 9000Fax 81 3 5404 9800

WellingtonCaltex Tower282-292 Lambton Quay10th FloorWellingtonNew ZealandVoice 64 4 474 4400Fax 64 4 474 4051

asia/pacific

Credit Suisse Group (CSG) is a global financial services com-

pany, providing a comprehensive range of banking and

insurance products. Active on every continent and in all major

financial centers, Credit Suisse Group comprises six busi-

ness units, each geared to the requirements of specific

customer groups and markets:

PRIVATE BANKING

Credit Suisse Private Banking

Services for private investors in Switzerland and abroad

FINANCIAL SERVICES

Credit Suisse

Corporate and individual customers in Switzerland

Personal Financial Services Europe

Financial services for affluent customers in Europe

Winterthur

Insurance for private and corporate customers worldwide

INVESTMENT BANKING

Credit Suisse First Boston

Global investment banking

ASSET MANAGEMENT

Credit Suisse Asset Management

Services for institutional and mutual fund investors worldwide

Credit Suisse First Boston (CSFB) is a leading global invest-

ment banking firm, providing comprehensive financial

advisory, capital raising, sales and trading, and financial

products for wholesale users and suppliers of capital around

the world. It operates in 56 offices across more than 37

countries and six continents and has over 15,000 staff.

Credit Suisse First Boston is one of the world’s largest

securities firms in terms of financial resources, with approxi-

mately $9.8 billion in revenues in 1999 and $7.8 billion in

equity and $275 billion in assets as of December 31, 1999.

Credit Suisse First Boston is organized around the fol-

lowing four major operating divisions:

Investment Banking

Fixed Income and Derivatives

Equity

Private Equity

The terms “Credit Suisse First Boston,” “CSFB,” “CSFP,” “Firm,” “we” and “our” in this Annual Review typically refer to the business unit (versusthe legal entity, which has the same name but also includes Credit Suisse Asset Management and certain real estate assets and which isreferred to herein as the “Bank”).

This Annual Review was prepared by the Corporate Communications Department of Credit Suisse First Boston and includes the most currentinformation through April 1, 2000. Additional copies and/or additional information can be obtained on the Internet at www.csfb.com or throughCorporate Communications in New York, London or Hong Kong.

© Copyright 2000, Credit Suisse First Boston Design: Russell Design Associates, NYCIssued in the United Kingdom by Printed on recycled paperCredit Suisse First Boston (Europe) Ltd: regulated by SFA.

Uetlibergstrasse 231P.O. Box 900CH-8070 ZurichSwitzerland

One Cabot SquareLondon E14 4QJUnited Kingdom

Eleven Madison AvenueNew York, NY 10010-3629USA

www.csfb.com