CSFBdirect Reports Full Year Results.Business Editors JERSEY CITY, N.J.--(BUSINESS WIRE)--Feb. 8, 2001 -- Revenues Increase by 50 Percent - Worldwide Trades Grow by 60 Percent - Worldwide Active Accounts up 50 Percent-- CSFBdirect, (NYSE NYSE See: New York Stock Exchange : DIR), formerly DLJdirect, the online brokerage BROKERAGE, contracts. The trade or occupation of a broker; the commissions paid to a broker for his services. service of Credit Suisse First Boston Credit Suisse First Boston was originally the trading name of the Financière Crédit Suisse-First Boston, a London-based 50-50 investment banking joint venture formed in 1978 between the First Boston Corporation and Credit Suisse. , reported a 50 percent increase in total revenues to $358.4 million for the year ended December December: see month. 31, 2000 and a net loss from operations of $3.8 million or $0.04 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, compared to total revenues of $239.1 million and operating net income of $6.9 million or $.07 per diluted share in 1999. For the quarter ending December 31, 2000, the business incurred a net loss from operations of $6.7 million or $0.06 per diluted share on revenues of $80.4 million, compared to an operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. of $2.0 million or $0.02 per diluted share on revenues of $76.7 million for the same period in 1999. CSFBdirect's full year and fourth quarter operating results for 2000 exclude $4.1 million of after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. expenses related to the adoption of its new name. Including rebranding Rebranding is the process by which a product or service developed with one brand or company or product line affiliation is marketed or distributed with a different identity. expense items, the reported net loss was $7.9 million or $0.08 per diluted share for the year and $10.8 million, or $0.10 per diluted share for the fourth quarter 2000. CSFBdirect will be reimbursed for rebranding expenses by Credit Suisse First Boston (USA), Inc. in the form of capital contributions. Firm Highlights "CSFBdirect completed another year of notable accomplishments in one of the most volatile With regard to computer memory, it means "temporary" and not "highly changeable," which is the usual meaning of the word. See volatile memory. 1. (programming) volatile - volatile variable. 2. (storage) volatile - See non-volatile storage. markets in history," said Blake Darcy darcy A unit used to measure the permeability of porous substances such as soil. One darcy is equal to the passage of 1 cubic centimeter of fluid having a viscosity of 1 centipoise for 1 second under the pressure of 1 atmosphere through a medium having a , Chief Executive Officer of CSFBdirect. "We processed record trading volumes Trading volume The number of shares transacted every day. As there is a seller for every buyer, one can think of the trading volume as half of the number of shares transacted. That is, if A sells 100 shares to B, the volume is 100 shares. -- 60 percent higher than last year -- launched new products and services, including managed accounts, Asset Allocator al·lo·cate tr.v. al·lo·cat·ed, al·lo·cat·ing, al·lo·cates 1. To set apart for a special purpose; designate: allocate a room to be used for storage. 2. (TM) and streaming Level II quotes; provided our investors entree to the world of institutional research conferences via Webcast of Credit Suisse The Credit Suisse Group (SWX:CSGN, NYSE: CS) is a financial services company, headquartered in Zürich, Switzerland. It is the second-largest Swiss bank, behind UBS AG. First Boston's Technology Conference; opened our first branch office in Boca Raton Boca Raton (bō`kə rətōn`), city (1990 pop. 61,492), Palm Beach co., SE Fla., on the Atlantic; inc. 1925. Boca Raton is a popular resort and retirement community that experienced significant industrial development in the 1970s and 80s. ; and expanded our institutional focus to include the Registered Investment Advisor Registered Investment Advisor (RIA) is a designation obtainable in the United States by an individual who has registered with the U.S. Securities and Exchange Commission or state regulatory agency (where the primary business is situated or multiple States in some cases) in community complementing our offering of self-directed self-di·rect·ed adj. Directed or guided by oneself, especially as an independent agent: the self-directed study of a language. self brokerage services to 401k plan administrators. Internationally, we launched the CSFBdirect service in the Middle East and Hong Kong Hong Kong (hŏng kŏng), Mandarin Xianggang, special administrative region of China, formerly a British crown colony (2005 est. pop. 6,899,000), land area 422 sq mi (1,092 sq km), adjacent to Guangdong prov. via joint ventures with strong, respected partners. Despite the year's market turbulence turbulence, state of violent or agitated behavior in a fluid. Turbulent behavior is characteristic of systems of large numbers of particles, and its unpredictability and randomness has long thwarted attempts to fully understand it, even with such powerful tools as , we generated operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. of $66.1 million before taxes and marketing expenses." Darcy added that iNautix iNautix is an affiliate of the The Bank of New York Mellon, a leading financial services provider. We provide software development services for the Company's subsidiaries, including The Bank of New York and Pershing LLC, a leading securities clearing firm. Technologies, CSFBdirect's technology group, achieved several milestones this year -- revenues doubled, a major software development operation was established in Chennai Chennai (chĕn`nī), formerly Madras (mədrăs`, mədräs`), city (1991 pop. 5,421,985), capital of Tamil Nadu state, SE India, on the Bay of Bengal. , India India, officially Republic of India, republic (2005 est pop. 1,080,264,000), 1,261,810 sq mi (3,268,090 sq km), S Asia. The second most populous country in the world, it is also sometimes called Bharat, its ancient name. India's land frontier (c. , and iNautix was awarded the prestigious CMM (Capability Maturity Model) A process developed by SEI in 1986 to help improve, over time, the application of an organization's supporting software technologies. Level 2 certification from the Software Engineering Institute (SEI) of Carnegie Carnegie (kärnĕg`ē, kär`nəgē), borough (1990 pop. 9,278), Allegheny co., SW Pa., an industrial suburb of Pittsburgh; inc. 1894. A steel town, it has coal mines and plants that make chemicals and electrical equipment. Mellon. iNautix is now one of the few U.S. e-developers with this notable distinction. Glenn Tongue tongue, muscular organ occupying the floor of the mouth in vertebrates. In some animals, such as lizards, anteaters, and frogs, it serves a food-gathering function. In humans, the tongue functions principally in chewing, swallowing, and speaking. , President of CSFBdirect, noted, "To ensure continued quality execution and customer service, we completed installation of fully redundant Repetitive. See redundancy. processing and call centers, opened a new customer service call center in Sandy Sandy Little Orphan Annie’s dog. [Comics: “Little Orphan Annie” in Horn, 459] See : Dogs Sandy told endless tales as she and Boss traveled. [Am. Lit. City, Utah, and were first to establish entirely paperless account application and transfer centers. CSFBdirect continued to win accolades for outstanding service and maintained its #1 ranking as manager/co-manager of IPO (Initial Public Offering) The first time a company offers shares of stock to the public. While not a computer term per se, many founders, employees and insiders of computer companies have found this acronym more exciting than any tech term they ever heard. underwritings among online brokerage companies for the second year in a row. Further, we renamed the company, highlighting our association with Credit Suisse First Boston, a global powerhouse A fourth-generation language from Cognos that was introduced in the late 1970s for midrange computers. It supports both character-oriented, terminal-based applications as well as Windows clients. Applications developed under PowerHouse can be imported into Cognos' Axiant client/server environment. , which enables us to broaden product offerings to our sophisticated, self-directed investors." Full Year Results CSFBdirect continued to post strong increases to major industry metrics metrics Managed care A popular term for standards by which the quality of a product, service, or outcome of a particular form of Pt management is evaluated. See TQM. . Total worldwide trades reached 9.3 million -- 60 percent over last year -- while total worldwide customer accounts grew 36 percent to nearly 1.1 million and active customer accounts increased 50 percent to 520,000. Revenues for the twelve months ending December 31, 2000 reached $358.4 million, 50 percent higher than in 1999. Commissions grew by 35 percent to $193.5 million while interest revenues of $73.8 million were 87 percent higher than last year. Fees increased by 76 percent to $84.2 million as iNautix continued to generate record revenues -- more than 100 percent over last year to $50.7 million. iNautix designs, develops, and hosts global e-commerce e-commerce, commerce conducted over the Internet, most often via the World Wide Web. E-commerce can apply to purchases made through the Web or to business-to-business activities such as inventory transfers. solutions; its products are now being used by more than 300 financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. firms. Underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. revenues decreased by 24 percent to $6.8 million attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to a slow-down of new offerings during the third and fourth quarters of 2000. Net of rebranding expenses, operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. increased 59 percent over last year to $353 million largely attributable to higher employee-related expenses reflecting increased headcount head count or head·count n. 1. The act of counting people in a particular group. 2. The number of people counted in this way. Noun 1. . Higher trading volumes resulted in increased brokerage and clearing expenses; call and technology center expansion contributed to higher occupancy Gaining or having physical possession of real property subject to, or in the absence of, legal right or title. In a fire insurance policy, for example, the term occupancy as well as communications and technology expenses; and other expenses grew commensurate com·men·su·rate adj. 1. Of the same size, extent, or duration as another. 2. Corresponding in size or degree; proportionate: a salary commensurate with my performance. 3. with the expansion of the business. Continued expansion and investment in growing international operations Internal Operations (I.O., IO or I/O) is a fictional American Intelligence Agency in Wildstorm comics. It was originally called International Operations. I.O. first appeared in WildC.A.T.S. volume 1 #1 (August, 1992) and was created by Brandon Choi and Jim Lee. contributed to higher losses sustained by our joint ventures in Japan, the Middle East and Hong Kong as the combined net losses posted by joint venture operations totaled $7.0 million compared to $3.2 million last year. International Results The international component of CSFBdirect's business experienced significant growth during the year. DLJdirect SFG SFG StanCorp Financial Group SFG San Francisco Giants (baseball team) SFG Special Forces Group SFG Sum Frequency Generation SFG Square Foot Gardening SFG Symmetrical Field Geometry (JBL speaker technology) , our Japanese Japanese (jăp'ənēz`), language of uncertain origin that is spoken by more than 125 million people, most of whom live in Japan. There are also many speakers of Japanese in the Ryukyu Islands, Korea, Taiwan, parts of the United States, and joint venture, reported its fifth consecutive quarter of record revenues. Active customer accounts grew nearly four-fold Adj. 1. four-fold - having four units or components; "quadruple rhythm has four beats per measure"; "quadruplex wire" quadruple, quadruplex, quadruplicate, fourfold and average daily trades were ten times that of last year. DLJdirect SFG Securities processed nearly 8,200 trades per day for the fourth quarter, up 21 percent over the third quarter 2000. Active customer accounts numbered 54,000 with average assets per account of $50,000. The company is rated number one by Gomez Gomez or Gómez is a common Spanish surname. The Portuguese spelling is Gomes, while in Catalan it is rendered as Gomis. People
KPMG Kaiser Permanente Medical Group KPMG Keiner Prüft Mehr Genau (German) KPMG Kommen Prüfen Meckern Gehen and others. "We are especially proud of DLJdirect SFG's performance," said Darcy. "We have every expectation that Hutchison Hutchison may refer to: People with the surname Hutchison:
DLJdirect Ltd., the fourth largest broker in the UK by number of accounts and online trades, also reported impressive growth in 2000. Both active customer accounts and average daily trades increased more than six-fold Adj. 1. six-fold - having six units or components sextuple, sixfold multiple - having or involving or consisting of more than one part or entity or individual; "multiple birth"; "multiple ownership"; "made multiple copies of the speech"; "his multiple over last year. DLJdirect Ltd. was rated the number one online brokerage Web site for ease of use by Gomez, and the number one online broker by Find.co.uk and the Good Web Guide to Money 2000. Additionally, CSFBdirect, which supports DLJdirect Ltd.'s customers investing in U.S. equities, was voted Best Overseas Sharedealing Service in the UK by Shares Magazine. In the Middle East, our joint venture, CSFBdirect-eUnion, received the "Best Financial Services Site" award at the Visa/Arabian Business.com Business.com is a business-related Internet search engine and web directory. Business.com, Inc. is based in Santa Monica, California. It was founded in 1999 by Jake Winebaum (previously chairman of the Walt Disney Internet Group) and Sky Dayton (founder of Earthlink). Awards in Dubai Dubai (d  bī`), sheikhdom (1995 pop. 674,101), c.1,500 sq mi (3,890 sq km), part of the federation of seven United Arab Emirates, SE Arabia, on the Persian Gulf. . Panel members included IT professionals
from Compaq, IBM (International Business Machines Corporation, Armonk, NY, www.ibm.com) The world's largest computer company. IBM's product lines include the S/390 mainframes (zSeries), AS/400 midrange business systems (iSeries), RS/6000 workstations and servers (pSeries), Intel-based servers (xSeries) , Microsoft, and Oracle.Fourth Quarter Results Total revenues reached $80.4 million, 5 percent higher than $76.7 million posted a year ago, as lower commission revenues were more than offset by higher fees and interest revenues. Fees of $26.0 million represented a quarterly record for the business primarily due to iNautix posting its ninth consecutive quarter of record revenue generation. Pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta loss from operations of $8.6 million, compared to a net operating loss of $734,000 in 1999, was primarily as a result of higher employee-related expenses. Credit Suisse First Boston (USA), Inc. Financial Reporting Credit Suisse First Boston (USA), Inc. plans to release its fiscal 2000 earnings together with its ultimate parent, Credit Suisse Group, on or around March 13, 2001. The Company expects to post a substantial after-tax loss for the year. This loss results, to a large extent, from restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. and other non-recurring expenses associated with the acquisition of the Company by Credit Suisse Group on November November: see month. 3, 2000 as well as other related integration costs. The Company experienced a decline in business activity beginning in September September: see month. due to integration efforts and slower market and other conditions during the fourth quarter 2000. The Company is a part of the Credit Suisse First Boston business unit of Credit Suisse Group, but its results do not reflect the overall performance of the entire business unit or that of Credit Suisse Group. About CSFBdirect CSFBdirect is one of the world's premier online brokerage firms offering a diversified diversified (di·verˑ·s range of investment products and services to sophisticated, self-directed investors. As of December 31, 2000, CSFBdirect had over one million worldwide customer accounts representing nearly $23 billion in assets. CSFBdirect has received numerous honors over the past year, including number one for "Transaction Performance and Transaction Success Rate" in November 2000 by Keynote Systems Keynote Systems, Inc. provides measurement and monitoring, service level and customer experience management services to customers to improve e-business performance by reducing costs, improving customer satisfaction and increasing profitability. , Inc.; "Best for Site Reliability" in August 2000 by TheStreet.com's Online Broker Survey; "Top Online Broker" by the 2000 Reader's Choice Awards, Worth magazine; "Best of the Web" in August 2000 by Forbes Forbes , B(ertie) C(harles) 1880-1954. American publisher and businessman who founded and edited (1916-1954) Forbes magazine. His son Malcolm Stevenson Forbes .com; "Best Bet, Feature Rich" in May 2000 by PC World magazine; and a "4-Star Rating" in Spring 2000 by Barron's magazine Barron's magazine is an American weekly newspaper covering U.S. financial information, market developments, and relevant statistics. Each issue provides a wrap-up of the previous week's market activity, news reports, and an outlook on the week to come. . Headquartered in Jersey City, NJ with offices in Parsippany, NJ, Charlotte, NC, Delray Beach Delray Beach, resort city (1990 pop. 47,181), Palm Beach co., SE Fla., on the Atlantic coast; settled 1895, inc. 1911. Mostly residential, Delray Beach is also the trade center for a citrus-fruit and vegetable-growing region. , FL, Sandy City, UT, London London, city, Canada London, city (1991 pop. 303,165), SE Ont., Canada, on the Thames River. The site was chosen in 1792 by Governor Simcoe to be the capital of Upper Canada, but York was made capital instead. London was settled in 1826. , Tokyo Tokyo (tō`kēō), city (1990 pop. 8,163,573), capital of Japan and of Tokyo prefecture, E central Honshu, at the head of Tokyo Bay. , Hong Kong, and Dubai, CSFBdirect employs more than 1,800 people. CSFBdirect trades on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. under the ticker symbol Ticker Symbol An arrangement of characters (usually letters) representing a particular security listed on an exchange or otherwise traded publicly. When a company issues securities to the public marketplace, it selects an available ticker symbol for its securities which investors "DIR" as a tracking stock of Credit Suisse First Boston (USA), Inc. For more information on CSFBdirect, visit the company's Web site at www.CSFBdirect.com. About Credit Suisse First Boston Credit Suisse First Boston (CSFB CSFB Credit Suisse First Boston CSFB Cyclically Shifted Filter Bank ) is a leading global investment banking firm serving institutional, corporate, government and individual clients. CSFB's businesses include securities underwriting, sales and trading, investment and merchant banking, financial advisory services advisory services advisory services provided to the public, in their capacity as owners and managers of animals, are an important part of veterinary science. They may be provided by government bureaux, by commercial companies who deal in pharmaceuticals or animals or animal , investment research, venture capital, correspondent A bank, Securities firm, or other financial institution that regularly renders services for another in an area or market to which the other party lacks direct access. A bank that functions as an agent for another bank and carries a deposit balance for a bank in another city. brokerage services and online brokerage services. It operates in over 76 locations across more than 37 countries and 6 continents, and has some 28,000 staff worldwide. The Firm is a business unit of the Zurich based Credit Suisse Group, a leading global financial services company.
CSFBdirect
Combined Summary of Operations (Unaudited) - See note 2
(in thousands, except per share data and financial ratios)
---------------------------------------------
Quarter Ended Years Ended
December 31, December 31,
2000 1999 2000 1999
---------------------------------------------
Revenues:
Commissions $ 36,197 $ 44,380 $ 193,490 $ 142,805
Underwritings 572 3,519 6,821 8,987
Fees 25,977 14,957 84,169 47,811
Interest 17,638 13,817 73,871 39,529
--------- -------- --------- ---------
Total revenues 80,384 76,673 358,351 239,132
--------- -------- --------- ---------
Costs and expenses:
Compensation and
benefits 35,795 19,640 124,119 60,991
Interest 393 359 1,555 1,061
Brokerage, clearing,
exchange fees, and
other 10,811 12,267 53,329 39,206
Advertising 13,075 25,452 60,260 62,913
Occupancy and related
costs 5,994 1,493 15,554 3,988
Communications and
technology 10,197 8,412 44,124 25,169
Rebranding costs (1) 6,600 - 6,600 -
Other operating
expenses 12,719 9,784 53,562 27,764
--------- -------- --------- ---------
Total costs and
expenses 95,584 77,407 359,103 221,092
--------- -------- --------- ---------
Income (loss) before
income tax provision
(benefit) and equity in
net loss of joint
ventures (15,200) (734) (752) 18,040
--------- -------- --------- ---------
Income tax provision
(benefit) (5,842) 86 183 7,893
Equity in net loss of
joint ventures (3) (1,403) (1,167) (6,995) (3,215)
--------- -------- --------- ---------
Net income (loss) $ (10,761) $ (1,987) $ (7,930) $ 6,932
========= ======== ========= =========
Earnings (loss) per
share (4):
Basic $ (0.10) $ (0.02) $ (0.08) $ 0.07
Diluted $ (0.10) $ (0.02) $ (0.08) $ 0.07
========= ======== ========= =========
Weighted average notional
and outstanding shares:
Basic 102,650 102,650 102,650 102,650
Diluted 102,650 102,650 102,650 102,660
========= ======== ========= =========
Earnings attributable to:
CSFB (USA) Retained
Interest $ (8,835) $ (1,631) $ (6,511) $ 7,835
CSFBdirect Tracking
Stock (2) (1,926) (356) (1,419) (903)
========= ======== ========= =========
Tracking Stock earnings
per share (4):
Basic $ (0.10) $ (0.02) $ (0.08) $ (0.05)
Diluted $ (0.10) $ (0.02) $ (0.08) $ (0.05)
========= ======== ========= =========
Tracking Stock weighted
average common shares:
Basic 18,400 18,400 18,400 18,400
Diluted 18,400 18,400 18,400 18,400
========= ======== ========= =========
CSFBdirect
Combined Summary of Operations (Unaudited) - See note 2
(in thousands, except per share data and financial ratios)
--------------------------------------------
Years Ended
December 31, 2000 vs. 1999
2000 1999 $ %
--------------------------------------------
Revenues:
Commissions $ 193,490 $142,805 $ 50,685 35.5%
Underwritings 6,821 8,987 (2,166) (24.1)%
Fees 84,169 47,811 36,358 76.0%
Interest 73,871 39,529 34,342 86.9%
--------- -------- --------- -------
Total revenues 358,351 239,132 119,219 49.9%
--------- -------- --------- -------
Costs and expenses:
Compensation and
benefits 124,119 60,991 63,128 103.5%
Interest 1,555 1,061 494 46.6%
Brokerage, clearing,
exchange fees, and
other 53,329 39,206 14,123 36.0%
Advertising 60,260 62,913 2,653 (4.2)%
Occupancy and related
costs 15,554 3,988 11,566 290.0%
Communications and
technology 44,124 25,169 18,955 75.3%
Rebranding costs (1) 6,600 - 6,600 NM
Other operating
expenses 53,562 27,764 25,798 92.9%
--------- -------- --------- -------
Total costs and
expenses 359,103 221,092 138,011 62.4%
--------- -------- --------- -------
Income before income tax
provision and equity in
net loss of joint
ventures (752) 18,040 (18,792) (104.2)%
--------- -------- --------- -------
Income tax provision 183 7,893 (7,710) (97.7)%
Equity in net loss of
joint ventures (3) (6,995) (3,215) (3,780) (117.6)%
--------- -------- --------- -------
Net income $ (7,930) $ 6,932 $ (14,862) (214.4)%
========= ======== ========= =======
Earnings per share (4):
Basic $ (0.08) $ 0.07 $ (0.15) (214.3)%
Diluted $ (0.08) $ 0.07 $ (0.15) (214.3)%
========= ======== ========= =======
Weighted average notional
and outstanding shares:
Basic 102,650 102,650 0 0.0%
Diluted 102,650 102,660 10 0.0%
========= ======== ========= =======
Earnings attributable to:
CSFB (USA) Retained
Interest $ (6,511) $ 7,835 $ (14,346) (183.1)%
CSFBdirect Tracking
Stock (2) (1,419) (903) (516) 57.1%
========= ======== ========= =======
Tracking Stock earnings
per share (4):
Basic $ (0.08) $ (0.05) $ (0.03) (60.0)%
Diluted $ (0.08) $ (0.05) $ (0.03) (60.0)%
========= ======== ========= =======
Tracking Stock weighted
average common shares:
Basic 18,400 18,400 0 0.0%
Diluted 18,400 18,400 0 0.0%
========= ======== ========= =======
CSFBdirect
Combined Summary of Operations (Unaudited) - See note 2
(1) Credit Suisse First Boston (USA), Inc. (formerly Donaldson, Lufkin
& Jenrette, Inc.) and Subsidiaries, ("CSFB (USA), Inc.") became an
indirect wholly owned subsidiary of Credit Suisse Group, a
corporation organized under the laws of Switzerland, as a result
of a merger which was completed on November 3, 2000. The merger
did not have an effect on the outstanding shares of DLJdirect
common stock. Effective January 15, 2001, DLJdirect changed its
name to CSFBdirect. All references to DLJdirect have been changed
to CSFBdirect. Costs incurred as a result of the name change are
included in rebranding costs in the combined summary of
operations.
(2) CSFBdirect represents a combination of the assets and liabilities
of CSFB (USA), Inc.'s existing online discount brokerage and
related investment services, rather than a separately incorporated
entity. CSFBdirect Common Stock tracks the separate performance of
these businesses for periods subsequent to the date of the
offering ("Tracking Stock"). On May 28, 1999, CSFB (USA), Inc.
issued in an initial public offering, 18.4 million shares of
CSFBdirect Common Stock. The shares of CSFBdirect Common Stock
have no voting rights, except in certain limited circumstances.
Even though CSFB (USA), Inc. has allocated certain assets,
liabilities, revenues, expenses and cash flows to CSFBdirect, that
allocation will not change the legal title to any assets or
responsibility for any liabilities. Holders of Tracking Stock are
common stockholders of CSFB (USA), Inc. and are subject to all the
risks associated with an investment in CSFB (USA), Inc.
Prior to the offering, CSFB (USA), Inc. designated its existing
common stock as CSFB (USA), Common Stock which represents the
performance of CSFB (USA), Inc.'s primary businesses plus a
retained interest in CSFBdirect. All of CSFB (USA), Inc.'s
businesses other than those included in CSFBdirect, plus its
retained interest in CSFBdirect, are referred to as CSFB (USA). As
a result of the offering, CSFB (USA) has a retained interest of
82.1% in CSFBdirect represented by 84.3 million notional shares.
The 18.4 million shares of CSFBdirect Tracking Stock reflects the
17.9% owned by the public. Prior to the offering CSFB (USA) had a
100% interest in the earnings of CSFBdirect.
(3) CSFBdirect has a 50% interest in joint ventures in Japan, Hong
Kong and the Middle East which amounts are included in equity from
net loss of joint ventures in the combined statement of
operations.
(4) Earnings per share amounts have been calculated by dividing net
income by the weighted average notional and outstanding tracking
shares. The notional shares represent CSFB (USA)'s 82.1% retained
interest in CSFBdirect. Prior to the offering, CSFB (USA) had a
100% interest in the earnings of CSFBdirect.
Tracking Stock earnings per common share amounts have been
calculated by dividing earnings applicable to common shares by the
weighted average actual common shares outstanding.
CSFBdirect
Combined Financial Data (Unaudited) - See note 2
(in thousands, except per share data)
----------------------------------------------------
4q00 3q00 2q00 1q00 4q99
----------------------------------------------------
Revenues:
Commissions $ 36,197 $ 37,212 $ 45,542 $ 74,539 $ 44,380
Underwritings 572 1,567 1,594 3,088 3,519
Fees 25,977 21,774 17,711 18,707 14,957
Interest 17,638 18,697 19,142 18,394 13,817
--------- ---------- --------- --------- --------
Total
revenues 80,384 79,250 83,989 114,728 76,673
--------- ---------- --------- --------- --------
Interest expense 393 272 375 515 359
--------- ---------- --------- --------- --------
Net revenues 79,991 78,978 83,614 114,213 76,314
--------- ---------- --------- --------- --------
Non-interest
expenses:
Compensation
and benefits 35,795 34,107 27,046 27,171 19,640
Brokerage,
clearing,
exchange
fees, and
other 10,811 11,063 12,855 18,600 12,267
Advertising 13,075 9,125 19,990 18,070 25,452
Occupancy and
related costs 5,994 4,026 3,144 2,390 1,493
Communications
and technology 10,197 12,383 11,443 10,101 8,412
Rebranding
costs (1) 6,600 - - - -
Other
operating
expenses 12,719 11,378 17,053 12,412 9,784
--------- ---------- --------- --------- --------
Total
non-interest
expenses 95,191 82,082 91,531 88,744 77,048
--------- ---------- --------- --------- --------
Income (loss)
before income
tax provision
(benefit) and
equity in net
joint ventures (15,200) (3,104) (7,917) 25,469 (734)
--------- ---------- --------- --------- --------
Income tax
provision
(benefit) (5,842) (1,272) (3,353) 10,650 86
Equity in net
loss of joint
ventures (3) (1,403) (2,330) (2,057) (1,205) (1,167)
--------- ---------- --------- --------- --------
Net income
(loss) $ (10,761) $ (4,162) $ (6,621) $ 13,614 $ (1,987)
========= ========= ========= ========= ========
Earnings (loss)
per share (4):
Basic $ (0.10) $ (0.04) $ (0.06) $ 0.13 $ (0.02)
Diluted $ (0.10) $ (0.04) $ (0.06) $ 0.13 $ (0.02)
========= ========= ========= ========= ========
Weighted average
notional and
outstanding
shares:
Basic 102,650 102,650 102,650 102,650 102,650
Diluted 102,650 102,650 102,650 102,732 102,650
========= ========= ========= ========= ========
Earnings
attributable to:
CSFB (USA)
Retained
Interest $ (8,835) $ (3,417) $ (5,436) $ 11,177 $ (1,631)
CSFBdirect
Tracking
Stock (2) (1,926) (745) (1,185) 2,437 (356)
========= ========= ========= ========= ========
Tracking Stock
earnings per
share (4):
Basic $ (0.10)$ (0.04) $ (0.06) $ 0.13 $ (0.02)
Diluted $ (0.10)$ (0.04) $ (0.06) $ 0.13 $ (0.02)
========= ========= ========= ========= ========
Tracking Stock
weighted
average common
shares:
Basic 18,400 18,400 18,400 18,400 18,400
Diluted 18,400 18,400 18,400 18,482 18,400
========= ========= ========= ========= ========
CSFBdirect
Combined Financial Data (Unaudited) - See note 2
(Dollars in thousands, except per share data and financial ratios)
---------------------------------
Years Ended
December 31,
2000 1999
---------------------------------
Other financial data:
Net revenues $ 356,796 $ 238,071
----------- ------------
Net interest revenues $ 72,316 $ 38,468
----------- ------------
Compensation and
benefits as a %
of net revenues 34.8% 25.6%
----------- ------------
Compensation and
benefits as a %
of pre-tax
income before
compensation &
benefits 100.6% 77.2%
----------- ------------
Non-compensation
expenses as a %
of net revenues 65.4% 66.8%
----------- ------------
Income (loss)
before provision
for income taxes
and equity in
net loss of
joint ventures
as a % of net
revenues (0.2)% 7.6%
----------- ------------
Net income (loss)
as a % of net
revenues (2.2)% 2.9%
----------- ------------
Tracking Stock
shares
outstanding at
end of period 18,400,000 18,400,000
----------- ------------
-----------------------------------------------------
4q00 3q00 2q00 1q00 4q99
-----------------------------------------------------
Other financial data:
Net revenues $ 79,991 $ 78,978 $ 83,614 $ 114,213 $ 76,314
--------- ---------- ---------- ---------- ----------
Net interest
revenues $ 17,245 $ 18,425 $ 18,767 $ 17,879 $ 13,458
--------- ---------- ---------- ---------- ----------
Compensation and
benefits as a %
of net revenues 44.7% 43.2% 32.3% 23.8% 25.7%
--------- ---------- ---------- ---------- ----------
Compensation and
benefits as a %
of pre-tax
income before
compensation &
benefits 173.8% 110.0% 141.4% 51.6% 103.9%
--------- ---------- ---------- ---------- ----------
Non-compensation
expenses as a %
of net revenues 74.3% 60.7% 77.1% 53.9% 75.2%
--------- ---------- ---------- ---------- ----------
Income (loss)
before provision
for income taxes
and equity in
net loss of
joint ventures
as a % of net
revenues (19.0)% (3.9)% (9.5)% 22.2% (1.0)%
--------- ---------- ---------- ---------- ----------
Net income (loss)
as a % of net
revenues (13.5)% (5.3)% (7.9)% 11.9% (2.6)%
--------- ---------- ---------- ---------- ----------
Tracking Stock
shares
outstanding at
end of period 18,400,000 18,400,000 18,400,000 18,400,000 18,400,000
--------- ---------- ---------- ---------- ----------
CSFBdirect
Combined Other Data (Unaudited) - See note 2
---------------------
Years Ended
December 31,
2000 1999
---------------------
Total trades
United States 7,415,000 5,635,000
United Kingdom 264,000 32,000
Japan 1,607,000 147,000
--------- ---------
Total 9,286,000 5,814,000
--------- ---------
Average trades
per day
United States 29,400 22,400
United Kingdom 1,000 100
Japan 6,400 600
--------- ---------
Total 36,800 23,100
--------- ---------
Total accounts
United States 952,000 752,000
United Kingdom 48,000 14,000
Japan 84,000 29,000
--------- ---------
Total 1,084,000 795,000
--------- ---------
Total active
accounts (A)
United States 441,000 329,000
United Kingdom 25,000 4,000
Japan 54,000 14,000
--------- ---------
Total 520,000 347,000
--------- ---------
Acquisition cost
per new active
account
United
States (B) $ 409 478
United Kingdom 372 811
Japan 224 329
--------- ---------
Average $ 366 473
--------- ---------
Total customer
assets
(in millions)
United States $ 19,800 20,300
United Kingdom 300 100
Japan 2,700 1,300
--------- ---------
Total $ 22,800 21,700
--------- ---------
Assets per
active account
United States $ 45,000 $ 62,000
United Kingdom 12,000 25,000
Japan 50,000 93,000
--------- ---------
Average $ 44,000 $ 63,000
--------- ---------
Total employees
United States 1,426 853
United Kingdom 82 12
Japan 107 46
India 184 -
Hong Kong 59 -
Other 13 -
--------- ---------
Total 1,871 911
--------- ---------
Technology
employees
United States 436 215
United Kingdom 16 -
Japan 13 4
India 184 -
Hong Kong 7 -
Other - -
--------- ---------
Total 656 219
--------- ---------
-----------------------------------------------------
4q00 3q00 2q00 1q00 4q99
-----------------------------------------------------
Total trades
United States 1,391,000 1,445,000 1,798,000 2,781,000 1,778,000
United Kingdom 48,000 52,000 68,000 96,000 31,000
Japan 511,000 428,000 378,000 290,000 137,000
--------- --------- --------- --------- ---------
Total 1,950,000 1,925,000 2,244,000 3,167,000 1,946,000
--------- --------- --------- --------- ---------
Average trades
per day
United States 22,100 22,900 28,500 44,100 27,800
United Kingdom 800 800 1,100 1,500 500(a)
Japan 8,200 6,800 6,300 4,700 2,200
--------- --------- --------- --------- ---------
Total 31,100 30,500 35,900 50,300 30,500
--------- --------- --------- --------- ---------
Total accounts
United States 952,000 923,000 893,000 853,000 752,000
United Kingdom 48,000 44,000 40,000 32,000 14,000
Japan 84,000 74,000 59,000 45,000 29,000
--------- --------- --------- --------- ---------
Total 1,084,000 1,041,000 992,000 930,000 795,000
--------- --------- --------- --------- ---------
Total active
accounts (A)
United States 441,000 426,000 412,000 389,000 329,000
United Kingdom 25,000 22,000 19,000 13,000 4,000
Japan 54,000 46,000 37,000 27,000 14,000
--------- --------- --------- --------- ---------
Total 520,000 494,000 468,000 429,000 347,000
--------- --------- --------- --------- ---------
Acquisition cost
per new active
account
United
States (B) $ 731 383 $ 635 $ 241 $ 757
United Kingdom 446 581 389 266 482
Japan 84 343 317 155 159
--------- --------- --------- --------- ---------
Average $ 508 390 $ 529 $ 231 $ 610
--------- --------- --------- --------- ---------
Total customer
assets
(in millions)
United States $ 19,800 24,400 $ 24,600 $ 27,000 $ 20,300
United Kingdom 300 200 200 200 100
Japan 2,700 3,000 2,700 2,200 1,300
--------- --------- --------- --------- ---------
Total $ 22,800 27,600 $ 27,500 $ 29,400 $ 21,700
--------- --------- --------- --------- ---------
Assets per
active account
United States $ 45,000 $ 57,000 $ 60,000 $ 69,000 $ 62,000
United Kingdom 12,000 9,000 11,000 15,000 25,000
Japan 50,000 65,000 73,000 81,000 93,000
--------- --------- --------- --------- ---------
Average $ 44,000 $ 56,000 $ 59,000 $ 69,000 $ 63,000
--------- --------- --------- --------- ---------
Total employees
United States 1,426 1,486 1,350 1,019 853
United Kingdom 82 65 50 21 12
Japan 107 103 86 66 46
India 184 161 53
Hong Kong 59 46 10
Other 13 8 7
--------- --------- --------- --------- ---------
Total 1,871 1,869 1,556 1,106 911
--------- --------- --------- --------- ---------
Technology
employees
United States 436 443 378 294 215
United Kingdom 16 7 1
Japan 13 10 6 5 4
India 184 157 53
Hong Kong 7 7 1
Other
--------- --------- --------- --------- ---------
Total 656 624 439 299 219
--------- --------- --------- --------- ---------
Data includes 100% of the activities of DLJdirect SFG Securities Inc.,
CSFBdirect-eUnion, and Hutchison CSFBdirect Holdings Limited.
(A) Active accounts consist of those accounts at the end of the
related period with at least one trade in the last twelve months
or with a balance at period end.
(B) Based upon gross number of active accounts added during the
period.
(a) based upon actual trade days from commencement of operations.
CSFBdirect
Combined Financial Data (Unaudited) - See note 2
(in thousands, except per share data and financial ratios)
----------------------------------------------------
4q00 4q00
vs. vs.
4q00 3q00 4q99 3q00 4q99
----------------------------------------------------
Revenues:
Commissions $ 36,197 $ 37,212 $ 44,380 (2.7)% (18.4)%
Underwritings 572 1,567 3,519 (63.5)% (83.7)%
Fees 25,977 21,774 14,957 19.3% 73.7%
Interest 17,638 18,697 13,817 (5.7)% 27.7%
--------- --------- --------- ------ ------
Total
revenues 80,384 79,250 76,673 1.4% 4.8%
--------- --------- --------- ------ ------
Interest expense 393 272 359 44.5% 9.5%
--------- --------- --------- ------ ------
Net revenues 79,991 78,978 76,314 1.3% 4.8%
--------- --------- --------- ------ ------
Non-interest
expenses:
Compensation
and benefits 35,795 34,107 19,640 4.9% 82.3%
Brokerage,
clearing,
exchange
fees, and
other 10,811 11,063 12,267 (2.3)% (11.9)%
Advertising 13,075 9,125 25,452 4.3% (48.6)%
Occupancy and
related costs 5,994 4,026 1,493 48.9% 301.5%
Communications
and
technology 10,197 12,383 8,412 (17.7)% 21.2%
Rebranding
cost (1) 6,600 - - NM NM
Other
operating
expenses 12,719 11,378 9,784 11.8% 30.0%
--------- --------- --------- ------ ------
Total
non-
interest
expenses 95,191 82,082 77,048 16.0% 23.5%
--------- --------- --------- ------ ------
Income (loss)
before income
tax provision
(benefit) and
equity in net
loss of joint
ventures (15,200) (3,104) (734) NM NM
--------- --------- --------- ------ ------
Income tax
provision
(benefit) (5,842) (1,272) 86 NM NM
Equity in net
loss of joint
ventures (3) (1,403) (2,330) (1,167) 39.8% (20.2)%
--------- --------- --------- ------ ------
Net income
(loss) $ (10,761) $ (4,162) $ (1,987) NM NM
========= ========= ========= ====== ======
Earnings (loss)
per share (4):
Basic $ (0.10) $ (0.04) $ (0.02) NM NM
Diluted $ (0.10) $ (0.04) $ (0.02) NM NM
========= ========= ========= ====== ======
Weighted average
notional and
outstanding
shares:
Basic 102,650 102,650 102,650 0.0% 0.0%
Diluted 102,650 102,650 102,650 0.0% 0.0%
========= ========= ========= ====== ======
Earnings
attributable to:
CSFB (USA)
Retained
Interest $ (8,835) $ (3,417) $ (1,631) NM NM
CSFBdirect
Tracking
Stock (2) (1,926) (745) (356) NM NM
========= ========= ========= ====== ======
Tracking Stock
earnings per
share (4):
Basic $ (0.10) $ (0.04) $ (0.02) NM NM
Diluted $ (0.10) $ (0.04) $ (0.02) NM NM
========= ========= ========= ====== ======
Weighted average
common shares
- Tracking
Stock:
Basic 18,400 18,400 18,400 0.0% 0.0%
Diluted 18,400 18,400 18,400 0.0% 0.0%
========= ========= ========= ====== ======
CSFBdirect
Combined Revenues and Expenses as a Percentage of Net Revenues
(Unaudited) - See note 2
------------------------------------
4q00 3q00 2q00 1q00 4q99
------------------------------------
Revenues:
Commissions 45.3% 47.1% 54.5% 65.3% 58.2%
Underwritings 0.7% 2.0% 1.9% 2.7% 4.6%
Fees 32.5% 27.6% 21.2% 16.4% 19.6%
Interest 22.0% 23.7% 22.9% 16.1% 18.1%
------ ------ ------ ------ ------
Total revenues 100.5% 100.3% 100.4% 100.5% 100.5%
------ ------ ------ ------ ------
Interest expense 0.5% 0.3% 0.4% 0.5% 0.5%
------ ------ ------ ------ ------
Net revenues 100.0% 100.0% 100.0% 100.0% 100.0%
------ ------ ------ ------ ------
Non-interest expenses:
Compensation and benefits 44.7% 43.2% 32.3% 23.8% 25.7%
Brokerage, clearing, exchange
fees, and other 13.5% 14.0% 15.4% 16.3% 16.1%
Advertising 16.3% 11.5% 23.9% 15.8% 33.4%
Occupancy and related costs 7.5% 5.1% 3.8% 2.1% 2.0%
Communications and technology 12.7% 15.7% 13.7% 8.8% 11.0%
Rebranding costs (1) 8.3% 0.0% 0.0% 0.0% 0.0%
Other operating expenses 15.9% 14.4% 20.4% 10.9% 12.8%
------ ------ ------ ------ ------
Total non-interest expenses 119.0% 103.9% 109.5% 77.7% 101.0%
------ ------ ------ ------ ------
Income (loss) before income tax
provision (benefit) and equity
in net loss of joint ventures (19.0)% (3.9)% (9.5)% 22.3% (1.0)%
------ ------ ------ ------ ------
Income tax provision (benefit) (7.3)% (1.6)% (4.0)% 9.3% 0.1%
Equity in net loss of joint
ventures (3) (1.8)% (3.0)% (2.5)% (1.1)% (1.5)%
------ ------ ------ ------ ------
Net income (loss) (13.5)% (5.3)% (7.9)% 11.9% (2.6)%
===== ===== ===== ===== ======
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