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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

Commission File Number: 1-6862

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

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

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

        Indicated by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes o    No ý

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

CREDIT SUISSE FIRST BOSTON (USA), INC.

Quarterly Report on Form 10-Q for the Quarter Ended September 30, 2003

AVAILABLE INFORMATION

        We file annual, quarterly and current reports and other information with the Securities and Exchange Commission, or SEC. Our SEC filings are available to the public over the internet on the SEC's website at www.sec.gov. You may also view our annual, quarterly and current reports on our website at www.csfb.com as soon as is reasonably practicable after the report is electronically filed with, or furnished to, the SEC. The information on our website is not incorporated by reference into this Quarterly Report.

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PART I
FINANCIAL INFORMATION
ITEM 1: Financial Statements

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

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

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

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

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

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

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CREDIT SUISSE FIRST BOSTON (USA), INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Changes in Stockholders' Equity
(Unaudited)
For the Nine Months Ended September 30, 2003 and September 30, 2002
(In millions)

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

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

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

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

Notes to Condensed Consolidated Financial Statements (Unaudited)

September 30, 2003

1.    Summary of Significant Accounting Policies

The Company

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

Basis of Presentation

        The condensed consolidated financial statements include Credit Suisse First Boston (USA), Inc. and its subsidiaries. All significant intercompany balances and transactions have been eliminated. The Company is a wholly owned subsidiary of Credit Suisse First Boston, Inc. ("CSFBI") and was acquired on November 3, 2000 (the "Acquisition"). No adjustments of the historical carrying values of the Company's assets and liabilities to reflect the Acquisition were recorded in the Company's historical consolidated financial statements. Accordingly, although the Acquisition gave rise to goodwill, none of this goodwill was "pushed down" to the Company. For further discussion of the Acquisition, see the Company's Annual Report on Form 10-K for the year ended December 31, 2002.

        Certain financial information that is normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States but not required for interim reporting purposes has been condensed or omitted. These condensed consolidated financial statements reflect, in the opinion of management, all adjustments (consisting of normal, recurring accruals) that are necessary for a fair presentation of the condensed consolidated statements of financial condition and income for the interim periods presented.

        The results of operations for interim periods are not necessarily indicative of results for the entire year. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2002.

        To prepare condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States, management must estimate certain amounts that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities and reported amounts of revenues and expenses. Actual results could differ materially from those estimates. For a description of the Company's significant accounting policies, see Note 1 of the consolidated financial statements in Part II, Item 8 in the Company's Annual Report on Form 10-K for the year ended December 31, 2002.

        Certain reclassifications have been made to prior year condensed consolidated financial statements to conform to the 2003 presentation.

New Accounting Pronouncements

        The Financial Accounting Standards Board ("FASB") issued FASB Interpretation ("FIN") No. 46, "Consolidation of Variable Interest Entities," an Interpretation of Accounting Research Bulletin

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No. 51, "Consolidated Financial Statements" ("FIN 46"), in January 2003. FIN 46 requires a company to consolidate a variable interest entity ("VIE") if the company is the primary beneficiary, defined as the entity with the majority of the expected losses or expected residual returns, or both. The guidance in FIN 46 is applicable for many special purpose entities and any other entity not explicitly excluded from the scope that does not meet the criteria set out in FIN 46 for determining whether analysis based on a majority of voting equity is appropriate. Generally, FIN 46 does not require consolidation of qualifying special purpose entities ("QSPEs") that meet the requirements of Statement of Financial Accounting Standards ("SFAS") No. 140, "Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities" ("SFAS 140"). In October 2003, the FASB deferred the effective date for applying FIN 46 to VIEs created before February 1, 2003 to fiscal periods ending after December 15, 2003. See Note 6 for more information.

        In April 2003, the FASB issued SFAS No. 149, "Amendment of Statement 133 on Derivative Instruments and Hedging Activities" ("SFAS 149"), which amends and clarifies accounting and reporting for derivative instruments and hedging activities under SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities" ("SFAS 133") and requires derivatives that contain a financing component to be disclosed in the statement of cash flows. The statement is effective for contracts entered into or modified after June 30, 2003. The adoption of SFAS 149 did not have a material impact on the Company's financial position, results of operations or cash flows.

        In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity" ("SFAS 150"). SFAS 150 establishes standards for an issuer's classification of certain financial instruments that have both liability and equity characteristics and imposes additional disclosure requirements. SFAS 150 applies to financial instruments entered into or modified after May 31, 2003 and is effective for fiscal periods beginning after June 15, 2003. The adoption of SFAS 150 did not have a material impact on the Company's financial position, results of operations or cash flows.

Recent Developments

        On May 1, 2003, the Company sold its Pershing unit, which was part of the Financial Services segment, to The Bank of New York Company, Inc., and reported a pre-tax gain of approximately $1.3 billion and an after-tax gain of $852 million in the second quarter of 2003. The Company presented the assets and liabilities of its Pershing unit as "Assets held for sale" and "Liabilities held for sale" as of December 31, 2002 in the condensed consolidated statements of financial condition. The operating results of the Pershing unit, including the gain on the sale, have been presented as "Discontinued Operations" for all periods presented in the condensed consolidated statements of income. See Note 3 for more information.

        On March 20, 2003, the Company's immediate parent company, CSFBI, transferred Credit Suisse First Boston Management Corporation to the Company as a capital contribution, and the company was subsequently converted to the Delaware limited liability company Credit Suisse First Boston Management LLC ("Management LLC"). Management LLC engages in derivatives transactions and holds a portfolio of private equity, distressed assets and real estate investments. The derivatives transactions entered into by Management LLC have historically been designed to hedge certain trading and other positions held by Credit Suisse First Boston LLC ("CSFB LLC"), the Company's principal

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wholly owned subsidiary. The transfer of Management LLC has been accounted for at historical cost in a manner similar to pooling-of-interest accounting because Management LLC and the Company were under the common control of CSFBI at the time of the transfer. The Company has restated financial information for all periods presented to reflect the results of operations and financial position of Management LLC as if the Company had acquired it on November 3, 2000, the date that the Company was acquired by CSFBI.

2.    Stock-Based Compensation

        The stock plan (the "Plan") of Credit Suisse Group ("CSG"), the Company's ultimate parent, provide for stock options or other equity-based awards, including CSG shares, to the Company's employees as compensation for services performed. CSFBI purchases the shares on behalf of the Company but does not require reimbursement. Amounts contributed by CSFBI relating to compensation were $250 million and $461 million, net of taxes, for the nine months ended September 30, 2003 and 2002, respectively, and are considered a capital contribution to the Company and credited to paid-in-capital.

        During August 2003, the Company adopted the fair value recognition provisions of SFAS No. 123, "Accounting for Stock-Based Compensation" ("SFAS 123"), as amended by SFAS No. 148, "Accounting for Stock-Based Compensation—Transition and Disclosure," using the prospective method. Under the prospective method, compensation expense is recognized for all stock options and restricted stock granted for services provided after January 1, 2003 as the options and stock vest. Option awards granted for services provided before January 1, 2003, if not subsequently modified, will continue to be accounted for under the recognition and measurement provisions of Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees," and no compensation expense has been or will be recognized for those option awards, which had no intrinsic value on the date of grant. Restricted stock awards granted in or before January 2003 for services provided in prior years (including those granted in January 2003 for services provided in 2002) were expensed in full during the year the services were provided because the restricted stock awards were fully vested at the time they were granted.

        In the third quarter of 2003, the Company introduced three-year vesting for all stock option and restricted stock awards, in line with investment banking industry practice. The imposition of three-year vesting is intended to improve employee retention and long-term performance.

        With the adoption of SFAS 123 and the change in vesting of stock option and restricted stock awards, the Company will expense stock option and restricted stock awards as they vest over the three-year service period, beginning with the grants expected in January 2004. Accordingly, compensation expense will be recognized over the service period based on the fair value of the stock option or restricted stock awards at the grant date. As a result of the change in vesting, the Company's accrued compensation expense of $85 million recorded in the first half of 2003 related to restricted stock awards expected to be granted in January 2004 was reversed, and compensation expense during the third quarter was significantly reduced compared to prior periods. The reversal of the first half accrual was more than offset by an incentive compensation accrual.

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        On September 9, 2003, CSG completed its option reduction program, which entitled employees to exchange on a value-for-value basis certain existing options for new options or restricted stock. In accordance with SFAS 123, the Company did not recognize any compensation expense as a result of that exchange.

        If the Company had applied the fair-value based method under SFAS 123 to all equity-based awards in each period, net income would have decreased for the three and nine months ended September 30, 2003 and 2002 due to the fair valuation of stock options granted. The following table reflects this pro forma effect:

(1)

Compensation expense for the three and nine months ended September 30, 2003 reflected the change in vesting discussed above.

3.    Discontinued Operations

        In accordance with SFAS No. 144, "Accounting for Impairment or Disposal of Long-Lived Assets," the Company presented the assets and liabilities of its Pershing unit as of December 31, 2002 as "Assets held for sale" and "Liabilities held for sale" in the condensed consolidated statements of financial condition. At December 31, 2002, "Assets held for sale" were $11.5 billion and "Liabilities held for sale" were $10.9 billion. The operating results of the Pershing unit, including the gain on the sale, for all periods presented are presented as "Discontinued operations" in the condensed consolidated statements of income.

        The following table summarizes the results of operations of Pershing, excluding the gain on the sale, for the three and nine months ended September 30, 2003 and 2002:

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4.    Merger-Related Costs

        Merger-related costs represent retention awards related to the Acquisition, which are being expensed over a vesting period of generally three years. The Company expects to charge $5 million against earnings in the remaining three months of 2003 and $11 million against earnings in 2004 related to the remaining retention awards.

5.    Related Party Transactions

        CSG, through CSFBI, owns all of the Company's outstanding voting common stock. The Company is involved in significant financing and other transactions, and has significant related party balances, with Credit Suisse First Boston, a Swiss bank subsidiary of CSG and an indirect parent of the Company, and certain of its subsidiaries and affiliates. The Company generally enters into these transactions in the ordinary course of business and believes that these transactions are generally on market terms that could be obtained from unrelated third parties.

        The following table sets forth related party assets and liabilities as of September 30, 2003 and December 31, 2002. The Company has presented the assets and liabilities of Pershing as of December 31, 2002 as "Assets held for sale" and "Liabilities held for sale" in the condensed consolidated statements of financial condition and has excluded from the table below transactions between Pershing, which was sold in the second quarter of 2003, and any CSG affiliate, including the Company.

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        Included in the condensed consolidated statements of income are revenues and expenses resulting from various securities trading, investment banking and financing activities with certain affiliates, as well as fees for administrative services performed by the Company under the terms of various service agreements. Service fees earned are treated as a reduction of other operating expenses in the condensed consolidated statements of income.

        The following table sets forth the Company's related party revenues and expenses, excluding transactions with Pershing, for the three and nine months ended September 30, 2003 and 2002:

        The following table sets forth revenues and expenses of Pershing with respect to related party transactions with the Company for the three and nine months ended September 30, 2003 and 2002. The operating results of Pershing for these periods are presented as "Discontinued operations" in the condensed consolidated statements of income.

        For the three and nine months ended September 30, 2003, Pershing had no revenues from CSG, its subsidiaries and affiliates outside the Company. For the three and nine months ended September 30, 2002, Pershing had revenues of $8 million and $18 million, respectively, from CSG, its subsidiaries and affiliates outside the Company. For the three and nine months ended September 30, 2003 and 2002, Pershing had no expenses with respect to related party transactions with CSG, its subsidiaries and affiliates outside the Company.

        The Company sold at cost, without recourse, to CSFBI, the right, title and interest in certain assets with an aggregate value of $306 million and $342 million as of September 30, 2003 and December 31, 2002, respectively.

        As of June 30, 2003, the management of certain private equity funds with approximately $4.1 billion of committed capital was transferred to the Company's private equity business from the

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Company's affiliate, Credit Suisse Asset Management. During the three months ended September 30, 2003, Credit Suisse Asset Management reimbursed the private equity business for all costs and expenses incurred by the Company in connection with managing the funds.

        Certain of the Company's directors, officers and employees and those of the Company's affiliates and their subsidiaries maintain margin accounts with CSFB LLC and other affiliated broker-dealers in the ordinary course of business. In addition, certain of such directors, officers and employees had investments or commitments to invest in various private equity funds sponsored by the Company, pursuant to which the Company has made loans to such directors, officers and employees, to the extent permitted by law. CSFB LLC and other affiliated broker-dealers, from time to time and in the ordinary course of business, enter into, as principal, transactions involving the purchase or sale of securities from or to such directors, officers and employees and members of their immediate families.

        The Company is included in a consolidated federal income tax return and combined New York State and New York City income tax returns filed by CSFBI. CSFBI allocates federal, state and local income taxes to its subsidiaries on a separate return basis. Any resulting liability is paid currently to CSFBI. Any credits for losses are paid by CSFBI to the Company to the extent that such credits are for tax benefits that have been used in the consolidated federal or combined state and local income tax return. CSFBI allocated to the Company a current income tax provision of $12 million and $1 million and a deferred income tax provision of $56 million and a deferred income tax benefit of $130 million for the three months ended September 30, 2003 and 2002, respectively, related to continuing operations. CSFBI allocated to the Company a current income tax benefit of $1 million and $15 million and a deferred income tax provision of $130 million and $157 million for the nine months ended September 30, 2003 and 2002, respectively, related to continuing operations.

6. Transfers and Servicing of Financial Assets

        As of September 30, 2003 and December 31, 2002, the fair market value of assets that the Company pledged to counterparties was $160.8 billion and $147.0 billion, respectively, of which $55.2 billion and $49.7 billion, respectively, are included in financial instruments owned in the condensed consolidated statements of financial condition.

        The Company has also received similar assets as collateral which the Company has the right to re-pledge or sell. The Company routinely re-pledges or lends these assets to third parties. As of September 30, 2003 and December 31, 2002, the fair market value of the assets pledged to the Company was $151.0 billion and $140.3 billion, respectively.

Securitization Activities

        The Company originates and purchases commercial mortgages and purchases residential mortgages for the purpose of securitization. The Company transfers these mortgage loans to QSPEs. These QSPEs issue securities that are backed by the assets transferred to the QSPEs and pay a return based on the returns on those assets. Investors in these mortgage-backed securities typically have recourse to the assets in the QSPE. The investors and the QSPEs have no recourse to the Company's assets. CSFB LLC is an underwriter of, and makes a market in, these securities.

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        The Company purchases loans and other debt obligations from clients for the purpose of securitization. The loans and other debt obligations are transferred by the Company directly, or indirectly through affiliates, to QSPEs or other VIEs that issue collateralized debt obligations ("CDOs"). CSFB LLC structures, underwrites and makes a market in these CDOs.

        The Company may retain interests in these securitized assets in connection with its underwriting and market-making activities. The Company's exposure in its securitization activities is limited to its retained interests. Retained interests in securitized financial assets are included at fair value in financial instruments owned in the condensed consolidated statements of financial condition. Any changes in the fair value of these retained interests are recognized in the condensed consolidated statements of income. The fair values of retained interests are determined using present value of estimated future cash flows valuation techniques that incorporate assumptions that market participants customarily use in their estimates of values.

        The following table presents the proceeds and gain or loss related to the securitization of commercial mortgage loans, residential mortgage loans and CDOs for the nine months ended September 30, 2003 and 2002:

(1)

Includes the effects of hedging, underwriting and retained interest gains and losses and excludes all gains or losses, including net interest revenues, on assets prior to securitization. The net revenues earned while holding the residential mortgage loans prior to securitization significantly exceeded the amount of the losses from securitization.

        Key economic assumptions used in measuring the fair value of the retained interests at the date of securitization resulting from securitizations completed during the nine months ended September 30, 2003 were as follows:

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        The following table sets forth the fair value of retained interests from securitizations not consolidated as of September 30, 2003, key economic assumptions used to determine the fair value and the sensitivity of the fair value to immediate adverse changes in those assumptions:

(1)

To deter prepayment, commercial mortgage loans typically have prepayment protection in the form of prepayment lockouts and yield maintenances.

(2)

CDO deals are generally structured to be protected from prepayment risk.

(3)

PSA is an industry standard prepayment speed metric used for projecting prepayments over the life of a residential mortgage loan. PSA utilizes the Constant Prepayment Rate ("CPR") assumptions. A 100% prepayment assumption assumes a prepayment rate of 0.2% per annum of the outstanding principal balance of mortgage loans in the first month. This increases by 0.2% thereafter during the term of the mortgage loan, leveling off to a constant prepayment rate of 6.0% per annum beginning in the thirtieth month and each month thereafter during the term of the mortgage loan. 100 PSA equals 6 CPR.

(4)

The rate is based on the weighted average yield on the retained interest.

(5)

Expected credit losses are not expected to be significant because substantially all beneficial interests retained represent investment-grade interests.

(6)

The impact of adverse changes in credit spreads was calculated based on the non-investment grade retained interests because the expected credit losses on investment-grade retained interests were not considered material.

        These sensitivities are hypothetical and do not reflect the benefits of hedging activities and therefore should be used with caution. Changes in fair value based on a 10% or 20% variation in assumptions generally cannot be extrapolated because the relationship of the change in assumption to the change in fair value may not be linear. Also, the effect of a variation in a particular assumption on the fair value of the retained interests is calculated without changing any other assumption. In practice,

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changes in one assumption may result in changes in other assumptions (for example, increases in market interest rates may result in lower prepayments and increased credit losses), which may magnify or counteract the sensitivities.

Variable Interest Entities

        Pursuant to FIN 46, the Company is consolidating VIEs created after January 31, 2003 for which it is the primary beneficiary, defined as the entity that will absorb a majority of expected losses, receive a majority of the expected residual returns, or both. In October 2003, the FASB deferred the effective date for applying FIN 46 to VIEs created before February 1, 2003 to fiscal periods ending after December 15, 2003. Accordingly, the Company expects to consolidate VIEs created before February 1, 2003 for which it is the primary beneficiary in the fourth quarter of 2003.

        The Company has variable interests in several CDO VIEs. As described under "—Securitization Activities," in the normal course of its business, the Company purchases loans and other debt obligations from and on behalf of clients for the purpose of securitization. These assets are sold to and warehoused by affiliates and, at the end of a warehousing period, the assets are sold to QSPEs or VIEs for securitization. In connection with its underwriting and market-making activities, the Company may retain interests in the CDO VIEs. The CDO entities may have actively managed ("open") portfolios or static or unmanaged ("closed") portfolios.

        The open CDO entities are managed by collateral managers and do not qualify for QSPE status. The Company has consolidated open CDO VIEs created after January 31, 2003 for which it is the primary beneficiary. As of September 30, 2003, the Company recorded $1.2 billion, the carrying amount of the assets of these CDO VIEs, in financial instruments owned and $1.0 billion, the carrying amount of the liabilities of these CDO VIEs, in other liabilities. The Company's maximum exposure to loss was $236 million, which was the amount of its retained interests as of September 30, 2003. This amount was eliminated in consolidation. The Company expects to consolidate, in the fourth quarter of 2003, those open CDO VIEs created prior to February 1, 2003 for which it is the primary beneficiary. The carrying amount of the assets of these CDO VIEs that would be included in financial instruments owned was $753 million as of September 30, 2003. The Company's maximum exposure to loss was $8 million, which was the amount of its retained interests as of September 30, 2003, carried at fair value in financial instruments owned. This amount would be eliminated in consolidation. The beneficial interests of these consolidated CDO VIEs are payable solely from the cash flows of the related collateral, and the creditors of these VIEs do not have recourse to the Company in the event of default.

        The Company also retains significant debt and equity interests in open CDO VIEs that are not consolidated because the Company is not the primary beneficiary. The total assets in these CDO VIEs as of September 30, 2003 were $2.0 billion. The Company's maximum exposure to loss as of September 30, 2003 was $36 million, which was the amount of its retained interests, carried at fair value in financial instruments owned.

        In addition, the Company retains small, minority debt and equity interests in open CDO VIEs. These CDO VIEs are also not consolidated because the Company is not the primary beneficiary. The Company's maximum exposure to loss in those VIEs as of September 30, 2003 was $134 million, which was the amount of its retained interests, carried at fair value in financial instruments owned.

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        The closed CDO transactions are structured to use QSPEs, which are not consolidated in the Company's financial statements. The Company's maximum exposure to loss as of September 30, 2003 was $57 million, which was the amount of its retained interests, carried at fair value in financial instruments owned.

        The Company is still evaluating the impact of FIN 46, and it may be required to consolidate other entities with which it is involved in the normal course of business that may be deemed to be VIEs for which the Company is the primary beneficiary.

7. Borrowings

        Short-term borrowings are generally demand obligations with interest approximating the federal funds rate, LIBOR or other money market indices. Such borrowings are generally used to facilitate the securities settlement process, to finance securities inventories and to finance securities purchased by customers on margin. As of September 30, 2003 and December 31, 2002, there were no short-term borrowings secured by Company-owned securities.

        The Company has two commercial paper programs exempt from registration under the Securities Act of 1933 that allow the Company to issue up to $7.0 billion in commercial paper. As of September 30, 2003 and December 31, 2002, $873 million and $2.1 billion, respectively, of commercial paper was outstanding under these programs.

        In April 2002, the Company filed with the SEC a shelf registration statement that allows the Company to issue from time to time up to $10.0 billion of senior and subordinated debt securities, and warrants to purchase such securities. Under that shelf registration statement, the Company had, at November 7, 2003, approximately $4.5 billion available for issuance.

        The following table sets forth the Company's long-term borrowings as of September 30, 2003 and December 31, 2002:

        For the nine months ended September 30, 2003 and 2002, interest paid on all borrowings and financing arrangements was $3.6 billion and $3.4 billion, respectively. As of September 30, 2003 and December 31, 2002, long-term borrowings included unrealized appreciation of approximately $1.1 billion and $1.2 billion, respectively, associated with fair value hedges under SFAS 133. As of September 30, 2003 and December 31, 2002, the Company had entered into interest rate and currency swaps on $15.6 billion and $15.0 billion, respectively, of the Company's long-term borrowings for

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hedging purposes. Substantially all of these swaps qualified as fair value hedges under SFAS 133. See Note 11 for more information.

        The Company maintains a 364-day $1.0 billion committed revolving credit facility with a syndicate of banks available to the Company as borrower. This facility, which is guaranteed by CSG, extends through May 2004. The Company's principal wholly owned broker-dealer subsidiary, CSFB LLC, maintains a 364-day $200 million committed secured revolving credit facility, extending through August 2004, with an unaffiliated bank. The secured facility requires CSFB LLC to pledge unencumbered marketable securities if the facility is drawn upon. Borrowings under each facility would bear interest at short-term rates related to either the federal funds rate or LIBOR and can be used for general corporate purposes. Both facilities contain customary covenants that the Company believes will not impair its ability to obtain funding. As of September 30, 2003, no borrowings were outstanding under either facility.

2003 Financings:

        In the nine months ended September 30, 2003, the Company issued $1.2 billion in medium-term notes, $1.0 billion of 5.5% notes due 2013 and $300 million of 6.125% notes due 2011 under its $10.0 billion shelf registration statement and $1.5 billion in medium-term notes under a $5.0 billion Euromarket program established in July 2001.

        During the nine months ended September 30, 2003, the Company repaid approximately $3.1 billion of medium-term notes and $23 million of structured notes.

8. Private Equity and Other Long-Term Investments

        Private equity and other long-term investments include direct investments and investments in investment vehicles that are generally structured as limited partnerships that in turn make private equity and related investments in various portfolio companies and funds. The Company categorizes its private equity investments and other long-term investments into two categories, public securities and private securities. Private securities are further classified as CSFB-managed funds, direct investments or third-party managed funds. These investments generally have no readily available market or may be otherwise restricted as to resale under the Securities Act of 1933; therefore, these investments are carried at estimated fair value.

        The Company's subsidiaries, generally acting as managing general partner, manage many private equity partnerships (the "Funds"). When the investment performance on CSFB-managed Funds exceeds specific thresholds, the Company and certain other general partners (the "GPs") may be entitled to receive a carried interest distribution. Carried interest distributions are based on the cumulative investment performance of each Fund at the time the distribution is made. As a result, the Company, in its capacity as a GP (or general partner or managing member of a GP), may be obligated to return to investors in the Funds all or a portion of the carried interest distributions received by the GPs if the GPs have received excess carried interest payments over the life of the Funds under the governing documents of the Funds. The amount of such contingent obligation is based upon the performance of the Funds but cannot exceed the amount received by the GPs. As of September 30, 2003 and December 31, 2002, the maximum amount of such contingent obligations was $228 million

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and $155 million, respectively, assuming the Funds' remaining investments were worthless. Assuming the Funds' remaining investments were sold at their current carrying values as of September 30, 2003 and December 31, 2002, the contingent obligations would have been $11 million and $31 million, respectively.

        In addition, pursuant to certain contractual arrangements, the Company is obligated to make cash payments to certain investors in certain Funds if specified performance thresholds are not met by such Funds. As of September 30, 2003 and December 31, 2002, the maximum amount of such contingent obligations was $44 million and $37 million, respectively, assuming the Funds' remaining investments were worthless. Assuming the Funds' remaining investments were sold at their current carrying values at both September 30, 2003 and December 31, 2002, the contingent obligations would have been $1 million.

        As of both September 30, 2003 and December 31, 2002, the Company had investments in private equity and other long-term investments of $1.0 billion and had commitments to invest up to an additional $1.4 billion and $1.7 billion as of September 30, 2003 and December 31, 2002, respectively. Changes in net unrealized appreciation/depreciation arising from changes in fair value and the gain or loss realized upon sale are reflected in principal transactions-net in the condensed consolidated statements of income.

9. Net Capital

        The Company's principal wholly owned subsidiary, CSFB LLC, is a registered broker-dealer, registered futures commission merchant and member firm of the New York Stock Exchange Inc. ("NYSE"). As such, it is subject to the NYSE's net capital rule, which conforms to the uniform net capital rule pursuant to Rule 15c3-1 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Under the alternative method permitted by this rule, the required net capital may not be less than two percent of aggregate debit balances arising from customer transactions or four percent of segregated funds, whichever is greater. If a member firm's net capital is less than four percent of aggregate debit balances, the NYSE may require the firm to reduce its business. If a member firm's net capital is less than five percent of aggregate debit balances, the NYSE may prevent the firm from expanding its business and declaring cash dividends. As of September 30, 2003, CSFB LLC's net capital of approximately $2.6 billion was 35% of aggregate debit balances and in excess of the minimum requirement by approximately $2.5 billion. The Company's over-the-counter ("OTC") derivatives dealer subsidiary, Credit Suisse First Boston Capital LLC, is also subject to the uniform net capital rule, but calculates its net capital requirements under Appendix F of Rule 15c3-1.

        Certain other subsidiaries are subject to capital adequacy requirements. As of September 30, 2003, the Company and its subsidiaries complied with all applicable regulatory capital adequacy requirements.

10. Cash and Securities Segregated Under Federal and Other Regulations

        In compliance with the Commodity Exchange Act, CSFB LLC segregates funds deposited by customers and funds accruing to customers as a result of trades or contracts. As of September 30, 2003 and December 31, 2002, cash and securities aggregating $2.9 billion and $1.8 billion, respectively, were segregated or secured by CSFB LLC in separate accounts exclusively for the benefit of customers.

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        In accordance with the SEC's no-action letter dated November 3, 1998, CSFB LLC computed a reserve requirement for the proprietary accounts of introducing broker-dealers. As of September 30, 2003 and December 31, 2002, CSFB LLC segregated securities aggregating $162 million and $41 million, respectively, on behalf of introducing broker-dealers. As of December 31, 2002, Pershing LLC, which was sold in connection with the Pershing sale, segregated $283 million on behalf of introducing broker-dealers.

        In addition, CSFB LLC segregated U.S. Treasury securities with a market value of $4.6 billion and $2.3 billion as of September 30, 2003 and December 31, 2002, respectively, in a special reserve bank account exclusively for the benefit of customers as required by Rule 15c3-3 of the Exchange Act. Pershing LLC segregated $2.8 billion in a special reserve account exclusively for the benefit of customers as of December 31, 2002.

11. Derivatives Contracts

        The Company uses derivatives contracts for trading and hedging purposes and to meet client needs. These derivatives include options, forwards, futures and swaps.

Non-trading Derivatives

        The Company manages its interest rate exposure on its fixed-rate debt by using interest rate swaps. These swaps are considered hedging instruments and qualify as fair value hedges under SFAS 133. For qualifying fair value hedges, the changes in fair value of both the hedging instrument and the underlying debt are included in other revenues in the condensed consolidated statements of income.

        The effectiveness of a qualifying hedging relationship is evaluated using quantitative measures of correlation. If a hedge relationship is not found to be highly effective, the hedge relationship no longer qualifies for hedge accounting under SFAS 133. As such, any subsequent gains or losses attributable to the hedged item cease to be recognized, while the subsequent changes in the derivative instrument's fair value are recognized in earnings, in each reporting period. In addition, the fair value adjustment of the debt due to hedge accounting is amortized over the remaining life of the debt as a yield adjustment.

        The gains and losses related to the ineffective component of the fair value hedges were not material for the nine months ended September 30, 2003 and 2002.

        Other derivatives used for hedging purposes that do not qualify as hedges under SFAS 133 are carried at fair value with changes in value included in principal transactions-net in the condensed consolidated statements of income. For the nine months ended September 30, 2003 and 2002, the Company recognized a pre-tax gain of $3 million and a pre-tax loss of $7 million, respectively, for these derivatives.

Trading Derivatives

        The Company enters into various transactions using derivatives for trading purposes, to hedge trading exposures or to provide products to its clients. These derivatives include options, forwards, futures and swaps.

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Options

        The Company writes option contracts specifically designed to meet customer needs, for trading purposes or for hedging purposes. The options do not expose the Company to credit risk because the Company, not its counterparty, is obligated to perform. At the beginning of the contract period, the Company receives a cash premium. During the contract period, the Company bears the risk of unfavorable changes in the value of the financial instruments underlying the options. To manage this market risk, the Company purchases or sells cash or derivative financial instruments on a proprietary basis. Such purchases and sales may include debt and equity securities, forward and futures contracts, swaps and options.

        The Company also purchases options to meet customer needs, for trading purposes or for hedging purposes. With purchased options, the Company gets the right, for a fee, to buy or sell the underlying instrument at a fixed price on or before a specified date. The underlying instruments for these options include fixed income securities, equities, foreign currencies and interest rate instruments or indices. The counterparties to these option contracts are reviewed to determine whether they are creditworthy.

Forwards

        The Company enters into forward purchases and sales contracts for mortgage-backed securities, foreign currencies and commitments to buy or sell residential mortgages. In addition, the Company enters into futures contracts on equity-based indices and other financial instruments, as well as options on futures contracts.

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

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

Swaps

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

        Trading derivative contracts are carried at fair value with changes in unrealized gains and losses and realized gains and losses included in principal transactions-net in the condensed consolidated statements of income.

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Quantitative Disclosures for All Derivatives

        The fair values of all derivatives contracts outstanding as of September 30, 2003 and December 31, 2002 were as follows:

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

12. Commitments

        The following table sets forth certain of the Company's long-term commitments, including the current portion, as of September 30, 2003:

(1)

In the ordinary course of business, the Company maintains certain standby repurchase agreement facilities that commit the Company to enter into resale agreements with customers at current market rates.

(2)

Excludes sublease revenue of $499 million.

(3)

Represents commitments to invest in various partnerships that make private equity and related investments in various portfolio companies or other private equity funds.

        The Company obtained letters of credit of $192 million and $543 million as of September 30, 2003 and December 31, 2002, respectively, in order to satisfy counterparty collateral requirements.

        In addition, as of September 30, 2003 the Company had certain commitments that expire within one year, including commitments to enter into resale agreements of $7.3 billion.

        The Company has contractual obligations related to certain information technology and mainframe systems. As of September 30, 2003, these obligations were not significant. The Company had no capital lease obligations as of September 30, 2003. For certain of the Company's additional commitments, see Notes 7, 8 and 13.

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13. Guarantees

        In the ordinary course of business, the Company enters into guarantee contracts as guarantor. FIN No. 45, "Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others" ("FIN 45") requires disclosure by a guarantor of its maximum potential payment obligations under certain of its guarantees to the extent that it is possible to estimate them. FIN 45 also requires a guarantor to recognize, at the inception of a guarantee, a liability for the fair value of the obligations undertaken in issuing such guarantee, including its ongoing obligation to stand ready to perform over the term of the guarantee in the event that certain events or conditions occur. With certain exceptions, these recognition requirements apply to any new guarantees entered into, or current guarantees that are modified, after December 31, 2002.

        The guarantees covered by FIN 45 may require the Company to make payments to the guaranteed party based on changes related to an asset, a liability or an equity security of the guaranteed party. The Company may also be contingently required to make payments to the guaranteed party based on another entity's failure to perform under an agreement, or the Company may have an indirect guarantee of the indebtedness of others, even though the payment to the guaranteed party may not be based on changes related to an asset, liability or equity security of the guaranteed party.

        In addition, FIN 45 covers certain indemnification agreements that contingently require the Company to make payments to the indemnified party based on changes related to an asset, liability or equity security of the indemnified party, such as an adverse judgment in a lawsuit or the imposition of additional taxes due to either a change in the tax law or an adverse interpretation of the tax law.

        The following table sets forth the maximum quantifiable contingent liability associated with guarantees covered by FIN 45 as of September 30, 2003 by maturity:

Performance Guarantees

        In the ordinary course of business, the Company enters into contracts that would require it, as the guarantor, to make payments to the guaranteed party based on a third party's failure to perform under an agreement. As of September 30, 2003, the Company had a maximum contingent liability of $131 million under performance guarantees.

Market Value Guarantees

        In the ordinary course of business, the Company enters into OTC contracts that contingently require it, as the guarantor, to make payments based on changes in an underlying financial instrument.

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Included in this category are certain written OTC put option contracts, pursuant to which the counterparty can potentially force the Company to acquire the underlying financial instrument or require the Company to make a cash payment in an amount equal to the decline in value of the financial instrument underlying the OTC put option. Also included in this category are credit derivatives that may subject the Company to credit spread or issuer default risk because the change in credit spreads or the credit quality of the underlying financial instrument may obligate the Company to make a payment. The Company seeks to manage these OTC derivatives exposures by engaging in various hedging strategies to reduce its exposure, such as purchasing an option to sell the related financial instrument or entering into other offsetting derivatives contracts.

        FIN 45 does not require disclosures about derivatives if they can be cash settled and the Company has no basis to conclude that it is probable that the counterparties held the underlying instruments related to the derivative at the inception of the contract. Derivatives meeting both of these criteria are not disclosed in the table above.

        As of September 30, 2003, the Company recorded $403 million in market value guarantees. These guarantees are reflected as derivatives contracts in the condensed consolidated statements of financial condition. See Note 11 for more information on derivatives. The maximum gross contingent liability, excluding any potential offset from hedging activities of these contracts, is $8.0 billion, of which $5.4 billion is with CSG affiliates, and represents the obligation of the Company in the event that all the underlying securities are worthless, the likelihood of which the Company believes is remote.

Related Party Guarantees

        For purposes of FIN 45, related party guarantees refer to any guarantees issued by the Company for obligations of any company ("affiliates") controlled by CSG, the Company's ultimate parent, unless it is one of the Company's consolidated subsidiaries. Guarantees issued by the Company for the obligations of its consolidated subsidiaries are excluded because they do not create any incremental liability.

        The Company issues guarantees to customers with respect to certain obligations of its affiliates in the ordinary course of business, including, but not limited to, certain derivatives transactions. Failure to perform by an affiliate would require the Company to perform under the guarantee. The maximum contingent liability of future payments of guarantees issued to counterparties of affiliates as of September 30, 2003 was $1.4 billion. While the maximum contingent liability represents possible future payments under the guarantees, the Company believes that the likelihood of nonperformance by these affiliates is remote. Excluded from the maximum contingent liability above are certain guarantees for which an estimate cannot be made because the exposure is unlimited and therefore impossible to estimate.

Guarantees Related to Private Equity Carried Interest

        Under certain circumstances, the Company has provided investors in private equity funds sponsored by the Company guarantees of potential obligations of certain GPs to return amounts previously paid as carried interest to those GPs. To manage its exposure, the Company generally withholds a portion of carried interest distributions to cover any repayment obligations. As of

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September 30, 2003, the Company had a maximum contingent liability of $228 million related to such arrangements, assuming the funds' remaining investments were worthless, and of $11 million, assuming the funds' remaining investments were sold at their current carrying values; the amounts of such guarantees are included in the contingent obligations disclosed in Note 8.

Guarantees of Collection of Prepayment Penalties

        As part of the Company's residential mortgage securitization activities, the Company at times guarantees the collection by the servicer of prepayment penalties. As of September 30, 2003, the Company's maximum exposure, assuming all of the underlying borrowers prepaid the loans and no prepayment penalties were collected by the servicer, was $334 million.

Other Guarantees

        The Company has certain guarantees for which its maximum contingent liability cannot be quantified. These guarantees are not reflected in the table above and are discussed below.

Indemnifications issued in connection with asset sales

        In connection with sales of certain assets or businesses, the Company has provided purchasers customary indemnification provisions based on changes in an underlying asset or liability relating to the assets sold. These indemnification provisions are negotiated with the purchaser of the assets or businesses and vary in their scope and duration. These indemnification provisions generally shift the risk of certain unquantifiable and unknowable loss contingencies (e.g., relating to litigation, tax and intellectual property matters) from the purchaser to the seller, as known or quantifiable loss contingencies generally are reflected in the value of the assets or businesses being sold. The Company has determined that it is not possible to make an estimate of the maximum amount that the Company could be obligated to pay under these indemnification provisions. To date, the Company's actual payments arising from these indemnification provisions have been in connection with litigation matters and have not been material.

Tax gross-up arrangements

        The Company provides indemnifications to certain counterparties in connection with its normal operating activities. The Company has determined that it is not possible to make an estimate of the maximum amount it could be obligated to pay. As a normal part of issuing its own securities, the Company typically agrees to reimburse holders for additional tax withholding charges or assessments resulting from changes in applicable tax laws or the interpretation of those laws. Securities that include these agreements to pay additional amounts generally also include a related redemption or call provision if the obligation to pay the additional amounts results from a change in law or its interpretation and the obligation cannot be avoided by the issuer taking reasonable steps to avoid the payment of additional amounts. Since such potential obligations are dependent on future changes in tax laws, the related liabilities the Company may incur as a result of such changes cannot be reasonably estimated. In light of the related call provisions typically included, the Company does not expect any potential liabilities in respect of tax gross-ups to be material.

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Exchange and clearinghouse memberships

        The Company is a member of numerous securities exchanges and clearinghouses, and may, as a result of its membership arrangements, be required to perform if another member defaults. The Company has determined that it is not possible to estimate the maximum amount of these obligations and believes that any potential requirement to make payments under these arrangements is remote.

14. Industry Segment and Geographic Data

        The Company operates and manages its businesses through two operating segments: the Institutional Securities segment, consisting of the Investment Banking, Equity and Fixed Income divisions, and the Financial Services segment.

        The Company's segments are managed based on types of products and services offered and their related client bases. The Company evaluates the performance of its segments based primarily on income (loss) before income taxes and discontinued operations.

        In the Institutional Securities segment:

•

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



•

the Equity division engages in sales and trading in equity and equity-related products, including listed and OTC derivatives and risk management products, securities lending and borrowing and prime brokerage; and



•

the Fixed Income division is active in underwriting, trading, prime brokerage and distributing fixed-income financial instruments and offers derivatives and risk management products.

        The Financial Services segment provides investment advisory services to high-net-worth individuals and the financial intermediaries that represent them. The range of services includes single-stock brokerage, hedging and sales of restricted securities and investment management products, such as third-party managed accounts and alternative investments. The presentation of Pershing results, including the gain on the sale in the second quarter of 2003, as "Discontinued operations" for all periods presented resulted in a material decrease in the Financial Services segment's revenues as the Pershing business contributed materially to the net revenues of the Financial Services segment.

        The Company allocates to its segments a pro rata share of certain centrally managed costs, such as leased facilities and equipment costs, employee benefits and certain general overhead expenses based upon specified amounts, usage criteria or agreed rates, and allocates interest expense based upon the type of asset. The segmental allocation of some costs, such as incentive bonuses, has been estimated.

        The Company has not allocated merger-related and certain other costs and charges to its segments because none of these costs represents normal operating costs. Instead, these costs are in the Elimination & Other category in the table below. The Company's results from the legacy private equity and distressed businesses are also included in the Elimination & Other category in the table below. All

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other accounting policies of the segments are the same as those described in the summary of significant accounting policies in the Company's Annual Report on Form 10-K for the year ended December 31, 2002.

        The following table sets forth the net revenues excluding net interest, net interest revenue (expense), total net revenues, total expenses and income (loss) from continuing operations before provision (benefit) for income taxes and discontinued operations of the Company's segments and reconciles the Company's segment totals to the Company's condensed consolidated results.