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GLOBAL INVESTMENT
BANK
1997 ANNUAL R E V I E W
Credit Suisse Group (“CSG”) is one of the leading global
financial services companies, providing a comprehensive
range of banking and insurance products. It is active on
six continents and in the world’s major financial centers.
Credit Suisse Group comprises five business units — four
banking units and one insurance provider — each geared to
the requirements of specific customer groups and markets:
Credit Suisse
Corporate and individual customers in Switzerland
Credit Suisse Private Banking
Services for private investors in Switzerland
and internationally
Credit Suisse First Boston
Worldwide investment banking
Credit Suisse Asset Management
Services for institutional investors worldwide
Winterthur
Worldwide insurance business
Credit Suisse First Boston (“CSFB”) is a leading global
investment banking firm, providing comprehensive
financial advisory, capital raising, sales and trading, and
financial products for users and suppliers of capital
around the world. It operates in over 50 offices across
more than 30 countries and six continents and has over
12,000 employees.
Credit Suisse First Boston is one of the world’s
largest securities firms in terms of financial resources,
with approximately $7.1 billion in revenues in 1997 and
$7.3 billion in equity and $310 billion in assets as of
December 31, 1997.
Credit Suisse First Boston is organized around the
following five major operating divisions:
Corporate and Investment Banking
Fixed Income
E q u i t y
Credit Suisse Financial Products
Private Equity
1 Chief Executive’s Letter
4 Fact Sheet
6 Deals of the Year
8 Corporate and Investment Banking
1 6 Fixed Inco m e2 0 Equity
2 4 Credit Suisse Financial Products
2 8 Private Equity
3 0 Support Services
3 4 Credit Suisse Group
3 6 Board of Directors
3 7 Executive Board
3 8 Managing Directors
4 0 Financial Statements
4 7 O ffice Locations
1
1997 was an extraordinary year for Credit Suisse First
Boston. The year began with the Firm’s major restructuring
(from three constituent parts) and ended with the impor-
tant BZW acquisition in Europe and Asia. Despite the
intense effort required to absorb these changes, CSFB
produced $1.2 billion of net income, before extraordinary
and exceptional items, and the fastest organic growth rate
of major firms in the investment banking industry, with rev-
enues exceeding $7 billion for the first time.
C S F B ’s strategy is to build exceptional shareholder
value by exploiting attractive global growth trends in the
industry while strengthening our position as one of the
w o r l d ’s leading investment banks. 1997 was a year that
demonstrated well the fruits of this strategy and the
impact of the industry trends that shape it.
Intense concentration in the financial services indus-
t r y, long predicted, is now advancing fast. The process is
producing what many observers have anticipated – a small
group of global institutions emerging preeminent.
Alongside this structural development is continued evi-
dence of the powerful global growth trends underpinning
the industry, dampened in part by market cyclicality and
intense competition.
CSFB faces this environment with considerable
strengths. Among the leading group of global investment
banks, CSFB possesses a unique international culture and
spread of operations and management, particularly
transatlantic, where our business is broadly balanced.
CSFB also continues to foster powerful entrepreneurial
drive and creativity. These distinguishing characteristics
were illustrated well during 1997.
The 30% organic revenue growth rate recorded by
CSFB was broadly based, but showcased particularly the
strengths of key businesses all new to the Firm within the
last eight years. These included our world-leading deriva-
tives business, Credit Suisse Financial Products, which
has grown revenues 26% compounded since the first full
year of operation. Other businesses, less than five years
old, grew spectacularly during 1997 including our Fixed
Income businesses in the emerging markets and in real
estate-related activity, in particular, the Principal
Transactions Group. Within the Equity division very strong
growth was also recorded in Eastern Europe, where CSFB
has been a pioneer. Supporting these particular growth
areas were strong results from more traditional business-
es. CSFB’s Investment Banking revenues increased 26%
from 1996 levels, while customer revenues in Equity out-
side the emerging markets rose 41%. The groups
particularly strengthened by CSFB’s restructuring also
showed tremendous progress with foreign exchange and
money markets achieving growth rates exceeding 69%.
CHIEF EXECUTIVE’S LETTER
We estimate that two of CSFB’s principal divisions
(Fixed Income and CSFP) rank 1 or 2 in the world by
revenues while two others (Corporate and Investment
Banking and Equity) rank among the top 5. With respect
to profitability, CSFB’s 18% return on equity in 1997
compares well with those banks that combine corporate
and investment banking. Particularly pleasing was the
30% ROE achieved, excluding the corporate loan book.
This represents an industry leading level of profitability and
underlines the importance of our strategic shift of capital
away from lending and into other activities. Cost and
productivity measures such as pretax profit margins, 26%,
and compensation/revenues, 49%, remained in line with
other industry leaders.
Although we had a very successful 1997, CSFB is
very conscious of the need to strengthen its competitive
position as the industry changes. In executing our strategy
of capitalizing on growth trends and strengthening the
Firm, CSFB is engaged in several major, multi-year invest-
ment programs. While increasing our cost base near- t e r m ,
these programs are essential to capturing excellent long-
term value for our shareholders. We continue to make
investments to position us well to serve our clients’
increasingly global needs. One such investment which fits
our strategy perfectly was C S F B ’s acquisition of BZW’s
European and selected Asian equity, equity capital mar-
kets and mergers and acquisitions advisory businesses.
This has given CSFB the unique leverage of a third home
market (the U.K.) to complement our global activities.
We are also making substantial investments in the organic
growth of our Equity, Investment Banking, Fixed Income,
and Private Equity businesses. Additionally, a crucial
requirement of the industry trends toward growth, global-
ization and more sophisticated risk management is
investment in our infrastructure and control environment.
Such investment needs are exacerbated by ineff i c i e n c i e s
identified by the Firm’s restructuring and by integrating
B Z W, and major external challenges such as Year 2000
and EMU. CSFB is aggressively responding to these
needs and has taken prudent advantage of 1997’s prof-
itability to make some exceptional provisions to cover the
integration of BZW and some of these one-off Information
Technology costs.
This Annual Review seeks to describe in more detail
C S F B ’s global and product strengths and the strategies
driving our business forward. Most importantly, this Review
reflects the lifeblood of our business – our client relation-
ships. Whether it be in mature or emerging markets, or
with investors or users of capital and advice, our service
to clients comes first. Our capital strength and expertise
as principal increasingly link with our client businesses to
ensure we can provide differentiated service.
Chief Executive of Credit Suisse Private Banking.
Their commitment to excellence and their contributions to
the delicate task of integrating our structures and cultures
have left a lasting mark.
While 1998 has begun well, we are conscious that
not every year will enjoy the market conditions that assist-
ed our growth in 1997. Nevertheless, we look to the
future with confidence and in the knowledge that CSFB’s
strengths continue to build and can be expected to off e r
our clients the consistency and excellence they expect in
the future.
Allen D. Wheat
Chairman of the Executive Board
and Chief Executive Off i c e r
3Neither our 1997 performance nor our future ambi-
tions would be imaginable without the enormous energy,
c r e a t i v i t y, and dedication of our people. Size is important
in the global financial services industry, and we obviously
have size; intelligence is even more important, and I
believe our record of client service and notable transac-
tions demonstrate our resources of thoughtfulness and
imagination. I congratulate our staff worldwide for their
a c h i e v e m e n t .
Two people deserve special mention. Beginning
with the announced restructuring in mid-1996, Hans-
Ulrich Doerig played a crucial role in bringing together the
new CSFB into one global organization. During 1997,
he served with distinction as Chairman of CSFB before
moving on to become Vice Chairman and Chief Risk
O fficer of Credit Suisse Group. Oswald Grubel served as
head of trading until his appointment in March 1998 as
F i n a n c i a l
Resources
Among
the Best
in the
I n d u s t r yPRO FORMA
DOLLARS IN MILLIONS (UNAUDITED) 1 9 9 7 1 9 9 6 % CHANGE
For the year
Revenues $ 7,128 $ 5,493 30%
Operating expenses $ 4,762 $ 3,675 30%
Gross operating profit $ 2,366 $ 1,818 30%
Pretax income (1) $ 1,828 $ 1,417 29%
Net income (1) $ 1,207 n/a n/a
At year end
Total shareholders’ equity (2) $ 7,274 $ 6,551 11%
Total assets $ 310,353 $ 304,346 2%
Selected ratios
Return on average equity (1) 18% n/a n/a
Pretax profit margin (1) 26% 26% —
Expense/revenues 67% 67% —
Staff expense/total revenues 49% 49% —
Tier 1 BIS-based capital ratio (3) 8.5% n/a n/a
Total BIS-based capital ratio (3) 14.9% n/a n/a
Employees 11,863 10,881 9%
( 1 ) Excludes extraordinary/exceptional items, and minority interest.
( 2 ) Shareholders’ equity at January 1, 1997, includes the pro forma effect of CHF 500 preferred stock issuance which occurred on March 31, 1997.
( 3 ) These ratios apply to the Bank.
THE GREATER THE RESOURCES, THE GREATER THE POSSIBILITIES
Asian Region Vice Chairman, Alan Smith near CSFB’s o ffice in Hong Kong with May Koon, director, head Asian Equity Sales.
#1#1#1#1#1#2#1#2#1
A Leader in Innovation1997 Deal of the Year Awards Institutional Investor
NUMBER OFF I R M DEALS OF THE YEAR
Credit Suisse First Boston 10
Goldman Sachs 10
Merrill Lynch 10
Morgan Stanley Dean Witter Discover 9
J.P. Morgan 8
Top Ti e r
C a p i t a l
R a i s i n g
C r e d e n t i a l s
Sources:
( 1 ) Securities Data Company.
( 2 ) Investment Dealers’ Digest.
( 3 ) C S F B .
( 4 ) E u r o m o n e y.
( 5 ) B o n d w a r e .
5
Daniela Iten and Daniel Gut, Swiss fixed income capital markets.
#1
Number one in global privatizations.( 1 )
Number one coordinator of global offerings.( 5 )
Number one European IPO house.( 5 )
Number one in capital markets project finance dollar volume.( 3 )
Number one in Swiss capital markets every year since 1991.( 3 )
Number two in private placements.( 2 )
Number one in quantity of Latin American debt issued from 1990-1997.( 1 )
Number two in Deutsche Mark market share.( 1 )
Number one in Central and Eastern European equity research.( 4 )
Pioneered in European high yield dollar volume.( 3 )
Credit Suisse First Boston has been judged a leader in
client service by a wide range of financial press covering
our businesses. Based on current returns, below is a list
of the Deals of the Year and other awards won by the
Firm for financing and advisory work worldwide. The Firm
won 61 awards this year, up from 40 in 1996.
DEALS OF THE YEAR
T R A N S A C T I O N AWA R D P U B L I C AT I O N
A.K. Steel Project Finance Deal of the Year Corporate Finance
Boeing/McDonnell Douglas M&A Deal of the Year Institutional Investor
BVG Rail Deal of the Year Asset Finance International
CalEnergy Project Finance Deal of the Year Institutional Investor
Ciba Specialty Chemicals Best Non-Privatization Equity Issue of the Year International Equity Review
Ciba Specialty Chemicals/Novartis Demerger of the Year Corporate Finance
Ciba’s Exec Stock Options Best Derivatives Deal of the Year Global Finance
Continental Airlines North America Airline Financing Deal of the Year AirFinance Journal
Credit Suisse Group/Winterthur International Deal of the Year Institutional Investor
ENI European Equity Issue of the Year International Financing Review
First Union/CoreStates Financial Breakthrough Deal Mega-Mergers Investment Dealers’ Digest
Impress Metal Packaging Buyouts Deal of the Year Corporate Finance
Ispat International Equity Deal of the Year Corporate Finance
J. C. Penney Corporate Finance Deal of the Year Institutional Investor
Jorf Lasfar Power Deal of the Year Project Finance
La Oroya Metallurgical Honorable Mention: Privatization LatinFinance
MATÁV East Europe IPO Emerging Markets Investor
International Deal of the Year Institutional Investor
Best Eastern European Equity Issue of the Year International Equity Review
EEMEA Equity Issue of the Year International Financing Review
East European Deal of the Year World Equity
Osprey Maritime Ship Financing Deal of the Year IFR Transport Finance
People’s Republic of China Best Asian Bond Issue Euroweek Asia
Best Sovereign/Public Sector Asian Bond Issue Euroweek Asia
Best Eurobond Finance Asia
Petrozuata Finance Project Finance Deal of the Year Corporate Finance
Latin Project Bond Emerging Markets Investor
Project Finance Deal of the Year Institutional Investor
7T R A N S A C T I O N AWA R D P U B L I C AT I O N
Petrozuata Finance (continued) Americas Project Finance Loan of the Year International Financing Review
Project Finance Deal of the Year LatinFinance
Deal of the Year Project Finance
Pharmacia Biotech/Amersham M&A Deal of the Year Corporate Finance
PT Pindo Deli Pulp & Paper Mills Best Offering for a Corporate Issuer Finance Asia
High Yield Bond Deal of the Year Asiamoney
Best Asian Bond Issue Euroweek Asia
Best Asian High Yield Bond Euroweek Asia
Best Corporate Asian Bond Issue Euroweek Asia
International Deal of the Year Institutional Investor
Asian Bond of the Year International Financing Review
Pycsa Panama Deal of the Year Project Finance
Raytheon/Hughes Aircraft Most Noteworthy Mergers Global Finance
M&A Deal of the Year Institutional Investor
Republic of Italy Swiss Francs Euroweek
Swiss Franc Bond of the Year International Financing Review
Southern Peru Copper Honorable Mention: Structured Trade Finance LatinFinance
Deal of the Year Project Finance
SR Earthquake Fund International Deal of the Year Institutional Investor
Team Rental/Budget Rent a Car M&A Deal of the Year Corporate Finance
Telstra Best IPO of the Year Finance Asia
Best Australian Equity IPO of the Year International Equity Review
Yapi Kredi Bank Asi Best Turkish Equity Issue of the Year International Equity Review
YPF/Andina M&A Deal of the Year Institutional Investor
E N T I T Y AWA R D P U B L I C AT I O N
Credit Suisse Financial Products Credit Derivatives House of the Year International Financing Review
Best Foreign Dealer of the Year Swaps Monitor
Derivatives House of the Year World Equity
Credit Suisse First Boston Best Lead Manager of Asian Bonds Euroweek Asia
Best Bank in Corporate Finance Global Finance
Global Winner in Project Finance Global Finance
Project Finance House of the Year International Financing Review
Swiss Franc Bond House of the Year International Financing Review
Bond House of the Year Americas Project Finance Int’l Yearbook
C O R P O R ATE AND INVESTMENT B A N K I N G
The Corporate and Investment Banking Division had a
stellar year in 1997. We executed a record number of
landmark transactions for valued clients. We also
increased our geographic and industry coverage and
enhanced our product line — all key elements in our strat-
e g y. As a result, CSFB continues to be one of only a
handful of truly global investment banks. The globalization
of the entire financial services industry is proceeding
r a p i d l y, and for a very simple reason: investment banks
need to be global because our clients are global. Our sig-
nificant presence in the U.S., Europe, Asia, and in
emerging markets everywhere puts us at the leading edge
of the globalization trend in each of our major product areas.
In 1997 CSFB announced the acquisition of the
European and selected Asian equity, equity capital mar-
kets and mergers and acquisitions advisory businesses of
Charles G. Ward III
Managing Director
Corporate and
Investment Banking
Full Service Product Offerings
Acquisi tion Finance
Asset Finance
Corporate Lending and Syndicated Finance
Corporate Sales and Divestitures
Debt, Equity and Convertible Underwriting
Equity Derivatives
Generic and Structured Trade Finance
Joint Ve n t u r e s
L e a s i n g
Leveraged Buyouts
Leveraged Finance
Mergers and Acquisitions
Preferred Stock
Private Placements
P r i v a t i z a t i o n s
Project Finance
R e s t r u c t u r i n g s
Share Repurchase Programs
Takeover Defense
(Dollars in Millions) 1 9 9 7 1996 % CHANGE
Revenue $1,479 $1,368 8%
Employees 2,034 2,102 (3%)
Average BIS Capital $2,841 n/a n/a
60+Deals of the Year
in 1997 (1)
Focused Industry Expertise
A u t o m o t i v e
Capital Goods
C h e m i c a l s
Consumer Products
Depository Institutions
E n e r g y
Health Care
I n s u r a n c e
Lodging & Gaming
Media
Metals & Mining
P a p e r, Packaging
& Forest Products
P o w e r
Real Estate
R e t a i l
Te c h n o l o g y
Te l e c o m m u n i c a t i o n s
Tr a n s p o r t a t i o n
( 1 ) See listing on pages 6 and 7.
9
BZW from Barclays. These businesses have established
market-leading positions in a number of key areas. The
acquisition adds 250 bankers and capital markets profes-
sionals to our European and Asian Investment Banking
operations and bolsters our M&A and Equity positions in
these areas. It also adds a third home market, the U.K.,
to our original home markets of the U.S. and Switzerland.
Mergers & Acquisitions
CSFB completed $172 billion worth of transactions, rank-
ing us among the handful of leading advisors in the world.
Our M&A team executed more than 55 transactions in
excess of $1 billion. These transactions bore our trade-
marks of creativity, strategic perspective, flawless
execution, and strong financing support. CSFB’s global
presence is a particularly strategic advantage for clients as
cross-border M&A activity increases.
CSFB has a strong M&A franchise in markets
around the world, as our M&A highlights list demon-
strates. We were particularly proud of our defense of
Thyssen AG against a hostile offer launched by Fried
Krupp AG Hoesch-Krupp, which later resulted in a friendly
merger announcement valued at $10.5 billion. I n s t i t u t i o n a l
CSFB advised French insurance company Assurances Générales de France (AGF)
on two transactions that illustrate the dramatic opening of the European M&A market.
First, we advised AGF when it acted as white knight for French holding company Wo r m s
& Cie, which had rejected a rare unsolicited offer from another French company. In the
midst of negotiations to acquire Worms for $6 billion, AGF itself received a $9.3 billion
hostile offer from Italian insurer Assicurazioni Generali SpA. CSFB’s efforts as defense
advisor on the largest takeover battle in French history helped AGF to reach an agree-
ment to be acquired by Germany’s Allianz AG and forced the withdrawal of Generali’s
o ff e r. The Allianz/AGF deal, valued at $10.4 billion, creates Europe’s largest insurer.
Largest
Takeover
Battle
in French
H i s t o r y
CREDIT SUISSE FIRST BOSTON CLIENT DESCRIPTION OF TRANSACTION A P P R O X I M ATE DOLLAR VA L U E
CoreStates Financial Corp Sale of Company to First Union Corporation* $ 16,600,000,000
Thyssen AG Acquisition offer from Fried Krupp AG Hoesch-Krupp 10,500,000,000(offer withdrawn)
Assurances Générales de France SA Sale of Company to Allianz AG* 10,400,000,000
Raytheon Company Acquisition of Hughes Aircraft Company from 9,500,000,000Hughes Electronics Corporation and General Motors Corporation
U.S. Bancorp Sale of Company to First Bank System, Inc. 9,086,000,000
Ashland Inc. Joint venture with USX-Marathon Group of their oil refining, 7,000,000,000marketing and transportation operations
Assurances Générales de France SA Acquisition, with SOMEAL SA, of Worms et Cie. 6,100,000,000
Tyco International Ltd. Acquisition of ADT Limited 5,600,000,000
W. R. Grace & Co. Merger of its Cryovac subsidiary with 5,000,000,000Sealed Air Corporation*
Nordbanken AB Merger with Merita Oy* 4,300,000,000
DQE, Inc. Sale of Company to Allegheny Power System, Inc.* 4,200,000,000
Occidental Petroleum Corporation Divestiture of MidCon Corp. subsidiary to KN Energy, Inc. 4,000,000,000
CVS Corporation Acquisition of Revco D.S., Inc. 3,970,000,000
The State Government of Victoria, Divestiture of Loy Yang Power to a consortium 3,800,000,000Australia led by CMS Energy Corp.
U.S. Department of Energy Divestiture of Elk Hills Naval Petroleum Reserve to 3,650,000,000Occidental Petroleum Corporation
First Union Corporation Acquisition of Signet Banking Corporation 3,300,000,000
Falcon Drilling Company, Inc. Merger with Reading & Bates Corporation to form 3,100,000,000R&B Falcon Corporation
Deposit Guaranty Corp. Sale of Company to First American Corporation* 2,700,000,000
American Radio Systems Corp. Sale of its radio broadcasting operations to 2,600,000,000CBS Corporation*
Abitibi-Price Inc. Merger with Stone-Consolidated Corporation 2,300,000,000
Wachovia Corporation Acquisition of Central Fidelity Banks, Inc. 2,300,000,000
The State Government of Victoria, Divestiture of PowerNet Victoria to GPU International, Inc. 2,000,000,000Australia
Team Rental Group, Inc. Acquisition of Budget Rent a Car Corporation 2,000,000,000to form Budget Group, Inc.
Swiss Reinsurance Company Acquisition of Société Anonyme Française de Réassurances 1,780,000,000(SAFR) and subsequent sale to Partner Reinsurance Company
Living Centers of America, Inc. Recapitalization with Apollo Management, L.P., and 1,668,000,000subsequent merger with GranCare, Inc.
Coca-Cola Enterprises Inc. Fairness opinion with respect to the acquisition of Coca-Cola 1,660,000,000Beverages Ltd. of Canada and The Coca-Cola Bottling Co. of New York
The Walt Disney Company Divestiture of four daily newspapers to Knight-Ridder, Inc. 1,650,000,000
CalEnergy Company, Inc. Repurchase of Peter Kiewit Sons’, Inc., 26% interest in 1,600,000,000the company and certain project interests
Province of Buenos Aires Privatization of ESEBA 1,368,000,000
NationsBank Corporation Acquisition of Montgomery Securities 1,200,000,000
Prime Service, Inc. Sale of Company to Atlas Copco AB 1,170,000,000
Viacom Inc. Divestiture of Viacom Radio Group to Evergreen Media Corporation 1,075,000,000
Greenfield Industries Inc. Sale of Company to Kennametal Inc. 1,000,000,000
Texaco Inc. Joint venture with Shell Oil Company and Saudi Aramco of their Not DisclosedEast Coast and Gulf Coast refining and marketing operations*
Texaco Inc. Joint venture with Shell Oil Company of their midwestern and Not Disclosedwestern refining and marketing operations
*Pending at 3/15/98.
Mergers and Acquisitions
H i g h l i g h t s
11
I n v e s t o r magazine named our representation of Raytheon
in its $9.5 billion acquisition of Hughes Aircraft an M&A
Deal of the Ye a r.
We represented Boeing in its $16.3 billion acquisi-
tion of McDonnell Douglas, the largest transaction ever in
the aerospace industry, and one of the largest domestic
acquisitions in U.S. history.
We also represented CoreStates Financial Corp. in
its $16.6 billion acquisition by First Union Corp., which
will create the fifth largest bank in the U.S., and repre-
sents the largest M&A transaction ever in the U.S.
banking industry. Also in the banking industry, CSFB rep-
resented Nordbanken AB in its $4.3 billion merger with
Merita Oy, the first cross-border bank merger in Europe,
creating the largest Nordic bank.
Equity Underwriting
CSFB continues to be a global force in equity underwrit-
ings, benefiting from our extensive local presence in
countries around the world. CSFB is the outright leader
In order to finance a large share repurchase, CalEnergy approached CSFB to
advise on financing options. The situation was complicated by the Asian market
crisis, since CalEnergy has significant holdings in the region. CSFB was able
to fully finance the share acquisition and the purchase of various project interests
through a $723 million global common stock offering, a $400 million revolving
credit facility, and a $350 million senior notes offering totaling $3.1 billion
— accomplishing an increase in the client’s stock price of 20% during the refi-
nancing/marketing period. In awarding the transaction one of its Project Finance
Deal of the Year citations, Institutional Investor noted that it was “the largest,
most successful offering to date by an independent power producer. ”
in global equity coordination and, complementing our lead-
ing position in U.S. IPOs, we became the number one
European house of 1997. We pride ourselves on providing
outstanding execution for clients. For example, our global
marketing strategy for the $535 million Petrobras
Preferred Shares offering was so successful that the
o ffering size was increased by nearly 40%. This story was
repeated many times for the more than 60 offerings we
lead-managed in 1997.
We are also the leading firm for IPOs in which our
clients spin off 100% of their ownership in subsidiary
companies. We believe we’ve earned this position through
our ingenuity in creating structures that best serve our
clients. As an example, CSFB’s management of the spin-
o ff of Ciba Specialty Chemicals Holding Inc. from its
parent Novartis was accomplished through a structure that
never before has been undertaken.
CSFB has also built an unparalleled record in
privatizations harnessing our strategic advisory capabilities
with our global distribution strength to deliver superior
results. (see box pages 14-15).
S t r o n g
U n d e r w r i t i n g
Support
Despite Vo l a t i l e
M a r k e t s
CSFB lead-managed the largest IPO of 1997 and the largest privatization in Australian
h i s t o r y. Based on CSFB’s strong presence in the Australian market and our outstanding
performance divesting the State of Vi c t o r i a ’s energy operations, CSFB was mandated by
The Commonwealth to act as joint global coordinator of a $10 billion IPO for Telstra,
the Australian state-owned telecommunications company. The highly successful off e r i n g
represented an important component of Australia’s continuing privatization strategy.
Largest
IPO
of 1997
Project Finance
We believe we have the premier project finance franchise
in the world. CSFB has been active in Project Finance for
25 years and has been in the vanguard of developing the
capital markets to finance projects. We are among a few
in offering a complete range of products to project finance
clients including advisory, equity and debt capital markets
and lending alternatives — an important benefit brought
by the consolidation of the former Credit Suisse with
the former CS First Boston.
Debt Underwriting and Corporate Lending
CSFB has been a global leader in debt for over a decade.
C S F B ’s debt capabilities offer an array of financing oppor-
tunities for clients ranging from investment grade to
non-investment grade public offerings, private placements
Petrozuata is the first strategic association in Ve n e z u e l a
formed to develop the country’s vast extra heavy oil
reserves. It is a joint venture between Conoco Inc. and
Maraven S.A., a wholly-owned subsidiary of the state-
owned oil company of Venezuela. CSFB lead-managed a
$1 billion bond financing and also acted as lead arranger
and administrative agent of a $450 million bank facility for
the project. The transaction was named Project Finance
Deal of the Year by six periodicals including I n s t i t u t i o n a l
I n v e s t o r, Corporate Finance and Project Finance.
L a r g e s t
L a t i n
A m e r i c a n
P r o j e c t
F i n a n c i n g
CSFB has played a leading role in the development, commencing in 1997, of a
non-dollar high-yield market. CSFB lead-managed the first ever sterling denominated high
yield offering for Castle Transmission International, a company formed by the television
and radio transmission tower businesses of the British Broadcasting Corporation. Having
already provided bank financing for the closing of the buyout, CSFB underwrote
£125 million of 9% senior notes which were ultimately sold to a broad cross-section of
European institutional investors in a syndication that was several times oversubscribed.
First Sterling Denominated
High Yield Off e r i n g
Adebayo Ogunlesi (middle) and Charles Chigas (standing) of project
finance with Francisco Bustillos, Corporate Finance Manager,
Petróleos de Venezuela S.A. (left) and Theodore Helms, International
Finance Manager, PDV America, Inc. (right).
13
of debt, asset-backed and lease financings, corporate
lending and acquisition finance. During the period 1990—
1997, CSFB ranked second in U.S. Corporate issues, and
third in Euro and global U.S. $ issues. Reflecting our truly
global presence, we are currently second in Emerging
Market issues.
Lending is a major differentiating advantage of
CSFB. As a result of the consolidation of the former
Credit Suisse with the former CS First Boston, we are
now able to commit the Firm’s capital towards large, lever-
aged financings in a short amount of time. During the last
decade, CSFB ranked second in “event deals” — bonds
over $750 million that are issued in conjunction with an
acquisition or other major corporate event. When J. C.
Penney launched an offer for Eckerd Corporation, CSFB
extended $3 billion of acquisition financing overnight.
CSFB subsequently lead-managed the $2.5 billion bond
o ffering, which represented the largest investment grade
o ffering of 1997.
CSFB lead-managed 46 High Yield offerings total-
ing $7.4 billion in 1997. CSFB has been in the forefront
of developing the market for high yield issuers in Europe.
We lead-managed the first ever Sterling High Yi e l d
Eurobond — £125 million for Castle Tr a n s m i s s i o n
International. We have also been active in the Asian mar-
ket and underwrote the $750 million offering for PT Pindo
Deli. In the U.S., CSFB has a diverse High Yield client
base that reflects our extensive industry expertise. Several
o fferings were noteworthy including our $300 million
underwriting for Fairchild Semiconductor and our $450
million offering for Winstar Communications.
During 1997 we established a Global Lease Finance
Group to advise clients on all aspects of big-
ticket tax leveraged lease transactions, as well as for the
arrangement of lease debt, debt and equity defeasance,
and other lease-related products such as synthetic leases.
We completed more than 20 lease finance transactions
in 1997.
Our Mission is Client Service
C S F B ’s goal is to offer a broad array of integrated finan-
cial solutions so that clients can attain their strategic
objectives. To this end, we have assembled many of the
w o r l d ’s preeminent product experts in M&A, Equity, and
When Team Rental Group acquired Budget Rent a Car, we advised on the acquisition,
handled the global common stock offering, and arranged seven separate but related
pieces of debt financing. CSFB provided $2 billion in new capital, a $225 million bridge
loan commitment, and managed a $186 million common stock offering. The Firm acted
as sole placement agent for $125 million in convertible subordinated notes, $165 million
in guaranteed senior notes, and $500 million in asset-backed notes. CSFB was also
sole agent for $900 million in asset-backed commercial paper, a $900 million secured
revolving liquidity facility, and a $300 million senior secured revolving credit facility. Finally,
CSFB provided $200 million in letters of credit. This integrated support made possible
Team Rental Group’s successful bid against significantly larger potential buyers and
earned Corporate Finance m a g a z i n e ’s M&A Deal of the Year award.
Premier Coordinator
of Complex
Global Tr a n s a c t i o n s
“Privatization can be a policy tool of immense power,” said
David Mulford, Chairman International for CSFB, “and pre-
cisely for that reason a government which wishes to
employ it must choose an advisor or global coordinator
with the greatest care. At Credit Suisse First Boston, we
have built a reputation in the field because we understand
two absolutely fundamental facts.
“First, to be judged a success, any privatization must
make sense in both financial and political terms. The
appropriate pricing of the asset has enormous political
implications: price it too low, and the government will
Privatization
and Advisory to
Governments
appear to have given away a national resource; price it too
high, and the performance after sale may be sluggish and
create a major financial and political disappointment. It is
an intricate process with dozens of delicate decisions.
“Second, the asset must be restructured for privati-
zation—to operate not as a government agency but as a
profitable private corporation. We’ve had wide experience
repositioning assets for a successful IPO or for sale to a
strategic investor.
“When it comes to a very large privatization, govern-
ments naturally want to entrust the responsibility to
In the past 12 months CSFB has built on its
unparalleled record in privatization equity off e r i n g s .
Completing the transactions required significant
resource commitment, local expertise, capital
strength and global distribution capability. It’s what
you would expect from the world’s first truly global
investment banking firm.
Debt. In order to be more available and more in tune with
clients’ needs, we have placed these investment banking
specialists on six continents and in the major financial
centers throughout the world. Few firms offer the range of
investment banking and lending products that CSFB off e r s
with the same global reach. Few offer the capital base
that we have.
C S F B ’s ability to manage highly complex, multi-
product, global transactions is our greatest strength. We
place a great emphasis on developing highly skilled
bankers who can engineer financial structures that enable
our clients to take advantage of the best market opportu-
nities available throughout the world. Our Team Rental
Group deal is a prime example of how well CSFB pulls
together resources in a multitude of product areas and
diverse markets to serve the interests of our clients. We
plan to continue to aggressively augment our base of
highly skilled experts so that we can continue to deliver a
high level of service to clients around the globe.
15
SELECTED 1 9 9 7 US DOLLARS
P R I VAT I Z ATIONS* IN MILLIONS
Telstra Corporation Ltd. Australia $ 9,997 Largest IPO of 1997. Privatized 33% of the company’s stock.
ENI S.p.A. Italy $ 7,795 Third stock offering in 18 months, totaling $18 billion and decreasing the government’s ownership to 51%.
Nordbanken Holding AB Sweden $ 1,046 Largest equity offering in banking sector in Scandinavia ever.
MATÁV Rt. Hungary $ 1,013 Sold 26% of the company in an IPO that was the largest ever offering from the region. First in the region to be NYSE listed.
Petroleo Brasileiro S.A. Brazil $ 535 The first bookbuilding transaction the Brazilian government has ever undertaken; the second largest Brazilian issue ever.
Telecom Italia Italy $ 14,000 The largest European privatization to date comprising $10.933 billion of equity, making this the largest European secondary equity offering ever. An additional $3 billion was a sale to strategic investors, totaling $14 billion.
* CSFB was joint global coordinator for each except for Telecom Italia, which was completed in 1997 by a group from BZW prior to its joining CSFB, and Petrobras, for which CSFB was sole global coordinator.
seasoned professionals who have done the largest and
most challenging deals in the world. We handled the IPO
of Te l s t r a , the Australian telecommunications giant, at
$9.997 billion, the largest of the year, as well as the
largest privatization and public offering in Australian history.
“Governments also want experience in privatizations
with far-reaching economic implications. We did all three
stock offerings of ENI, the Italian state-owned oil compa-
ny; the most recent offering in 1997 won I n t e r n a t i o n a l
Financing Review’s award for European Equity Issue of
the Ye a r. The Italian government raised almost $18 billion
in eighteen months and in the process transformed the
Italian equities market. Regulatory officials there had to
modernize the entire system of retail sales to facilitate
purchases by individual investors. In late 1997, we com-
pleted strategic advisory for the Hungarian government
and the subsequent initial public offering for telecommuni-
cations company MAT Á V. MATÁV became the first Central
European company to be listed on the NYSE and 92% of
the institutional investor base was international.”
1997 was a landmark year for the Fixed Income division.
Our revenue of $3,379 million, a 43% increase from
1996, positions us as one of the most profitable fixed
income divisions in the world. Our success in 1997 stems
from several basic strengths: our diversified business,
which makes possible a substantial appetite for risk; our
balance sheet strength; our premier skills in structuring;
and our global coverage and organization by business
l i n e s .
The biggest growth in earnings came from two rela-
tively new business groups, Emerging Markets Group and
Principal Transactions Group. In addition, our reconfigured
Foreign Exchange business had an excellent year and is
considered among the top handful of Foreign Exchange
businesses in the world.
Government and Corporate
Fixed Income Securities
Global Foreign Exchange
Emerging Markets
New Issues Underwriting
Asset Backed Securities
Leveraged Finance
Mortgage Securities
Real Estate Finance
Money Markets
Bank Notes
Precious Metals
Fixed Income Research
Marc Hotimsky
Managing Director
Fixed Income
(Dollars in Millions) 1 9 9 7 1 9 9 6 % CHANGE
Revenue $ 3,379 $2,356 43%
Employees 1,760 1,535 15%
Average BIS Capital $ 2,441 n/a n/a
Trading Presence
Across Developed
Countries and
Emerging Markets
28markets
FIXED INCOME
17
PT Pindo Deli Pulp and Paper Mills is one of the largest
vertically integrated pulp and paper manufacturers in
Indonesia. To pay down existing bank debt and extend the
c o m p a n y ’s debt maturity profile, Pindo Deli asked CSFB
to organize a $400 million issue of senior notes. After an
extensive roadshow on three continents, overwhelming
demand enabled the company to increase the deal size to
$750 million. Roughly 100 separate institutional investor
portfolios participated in the offering, significantly expand-
ing the company’s investor base.
Our Emerging Markets Group has experienced
remarkable growth in the last several years. As recently as
1992, our only emerging market presence was in Russia.
To d a y, we participate in 28 geographic markets worldwide,
with a physical presence in 15 centers, in particular,
M o s c o w, Wa r s a w, Sao Paulo, Seoul, Shanghai and Cairo.
That presence is especially effective, I am convinced,
because of our heavy reliance upon local professionals
thoroughly familiar with the markets and business culture
they cover. We believe it to be one of the most successful
businesses of its kind in operation today, and we expect
its expansion to continue.
Among award-winning accomplishments in Emerging
Markets last year, I would cite the Group’s financing trans-
actions for Pindo Deli Finance in Indonesia ($750 million
multi-tranche, awarded Asian Bond of the Year by I F R) ,
the Russian Federation seven-year DM 2 billion Eurobond
issue, the $500 million, three-year issue for the City of
Moscow and the RUR 700 billion one- and one half-year
issues for the Republic of Ta r t a r s t a n .
We have also seen significant contributions from the
Principal Transactions Group, which provides creative
solutions for complex real estate transactions. PTG com-
pleted more than $12 billion in U.S. real estate financings
in 18 months, ranking PTG as the leading U.S. real
estate investment banking group. In 1997, PTG success-
fully securitized over $4 billion of commercial mortgage
securities. PTG targets untapped niches where there is a
significant shortage of capital for deals due to past prob-
lems, deals that require analytic complexity, deals that are
d i fficult to understand or deals that are out of favor. This
highly profitable group is expanding its global presence.
Largest Asian
High Yield Off e r i n g
Trading floor, Hong Kong, as viewed through an aquarium.
The words come from Institutional Investor’s description of the $2.5 billion bond financing
CSFB arranged for J. C. Penney, to refinance its acquisition of the Eckerd drugstore
chain (on which the Firm also advised). In spite of adverse market concerns prompted by
a Federal Reserve Board rate increase, the offering was oversubscribed by 1.5 times
after a five day roadshow. Other big issuers immediately found the confidence to go to
market. As J. C. Penney’s treasurer noted, “The deal helped change the tone in the
market from night to day. ”
“Sale of
the
S e a s o n ”
In 1997 PTG purchased a $625 million Swedish property
portfolio, just over $1 billion in U.K. properties, and has
funded more than $500 million in mortgage bond financ-
ings in Latin America. PTG has established a vehicle for
purchasing distressed real estate portfolios in Japan and
is co-sponsoring a company for real estate investments in
the former Soviet Union and East and Central Europe with
the Zell Group.
1997 was a year of great structural change for
CSFB and nowhere in Fixed Income was this more appar-
ent than Foreign Exchange. In 1997 we retooled the FX
operations of the former Credit Suisse and the former
CS First Boston into a single business. Our first task was
to reduce the number of trading operations previously run
by the group and focus on five key international centers.
At the same time, we globalized management and linked
the trading centers to capture information and take advan-
tage of economies of scale in spot trading and market
making. This strategy was aligned with a strong research
and risk management focus that aims at offering clients
value in a variety of markets. In the future, growth
in Foreign Exchange will be led by product innovation,
expansion in emerging currency, and the provision of
a seamless link between FX and all products of the Firm
including Equities and Investment Banking.
Our Debt Capital Markets Group and corporate
secondary trading business saw its share of the $1,778
billion in worldwide bond issuance. In particular, we contin-
ued our efforts to develop and structure creative bond
financings for which we have become well known. This is
exemplified by our offering for J. C. Penney, which was
cited by Institutional Investor as one of 1997’s five “Most
Noteworthy” Deals of the Ye a r.
S e p a r a t e l y, our historical leadership in structured
financings was highlighted by the Triangle Funding Limited
deal, a $5 billion collateralized loan obligation for CSFB’s
loan portfolio. We have continued to expand our high yield
underwriting presence by providing a leadership role in
developing the local currency European high yield market,
as well as increasing our new issue underwriting volumes
globally by 84% over 1996.
In the Swiss capital markets, once again by a very
wide margin, CSFB was the leading institution. This is the
seventh straight year we have held this position.
Three individual parts of CSFB—the London fixed income unit, the banking unit at
CSFB (London), and Credit Suisse Financial Products—combined to create a
$1 billion financing for the Region of Sicily. It was the largest capital markets financing
ever undertaken for a local authority outside North America, and the market’s largest
unrated transaction of 1997. Subsequent to this transaction, the rates achievable by
Italian regions in general improved significantly from their historic levels.
First International
Financing for
Local Authority
CSFB has maintained a presence in Russia for five years, one that now numbers
over 300 people, and is one of the largest foreign bank primary dealers of government
bonds. The Firm completed a $1.2 billion offering for the Russian Federation in the
DM market, the largest in this market by a transition economy. CSFB also lead-managed
a RUR 700 billion bond issue for the Republic of Tartarstan. This was the first Rouble
public bond issue listed and traded on MICEX by a Russian Republic.
Landmark
Russian
Bond
O ff e r i n g s
19
Two eventful transactions were for the Republic of Italy
for SFr. 1,000 million (voted SFr deal of the year by IFR)
and the Citibank Credit Card Master Trust, the first fixed
rate Swiss Franc credit card deal, of SFr 1,064 million.
Our global government bond business has a pres-
ence in most of the leading government debt markets
worldwide. We have sustained our select position as one
of the few firms that provide investors with twenty-four
hour trading in the liquid and global market for govern-
ment bonds and related products. The group is organized
and managed on a global basis, with a fully dedicated
sales force that combines research, execution capabilities,
and ideas to serve investors worldwide.
CSFB has for some time been a leader in electronic
trading, which represents the future in marketing com-
moditized products to customers. We have continued to
expand our current family of electronic products, which
include GovTr a d eS M and CPTr a d eS M, and to encompass
International RepoTr a d eS M, currently doing $3 billion of
transactions per day. We have also introduced a family of
Prime products to execute and clear multi-product trans-
actions, and we are the founding partner of Tr a d e We bS M,
The Principal Transactions Group successfully launched and priced $1.4 billion in
commercial mortgage pass-through certificates—the second largest single commercial
mortgage-backed securities transaction ever. PTG originated all of the approximately
165 commercial mortgage-backed whole loans in the transaction. The senior bonds were
rated AAA by all three major rating agencies. During the initial offering, CSFB sold
the transaction at new issue pricing, and set new market levels for the single-B and
unrated tranches of this transaction.
Major Commercial Mortgage-Backed
Securities Tr a n s a c t i o n
Two eventful transactions were for the Republic of Italy
for SFr 1,000 million (voted SFr deal of the year by I FR)
and the Citibank Credit Card Master Trust, the first fixed
rate Swiss Franc credit card deal, of SFr 1,064 million.
Our global government bond business has a pres-
ence in most of the leading government debt markets
worldwide. We have sustained our select position as one
of the few firms that provide investors with twenty-four
hour trading in the liquid and global market for govern-
ment bonds and related products. The group is organized
and managed on a global basis, with a fully dedicated
sales force that combines research, execution capabilities,
and ideas to serve investors worldwide.
CSFB has for some time been a leader in electronic
trading, which represents the future in marketing com-
moditized products to customers. We have continued to
expand our current family of electronic products, which
include GovTr a d eS M and CPTr a d eS M, and to encompass
International RepoTr a d eS M, currently doing $3 billion of
transactions per day. We have also introduced a family of
Prime products to execute and clear multi-product trans-
actions, and we are the founding partner of Tr a d e We bS M,
which allows customers to transact in cash U.S. govern-
ment securities with multiple dealers.
During 1997, we brought all fixed income research
into a single unit under one global head. Our research
already enjoys a strong reputation, and this change
improves further the service we provide to our customers
and to our own trading desks. The economists (who serve
the entire Firm) were brought under the same manage-
ment structure, enhancing our ability to link global macro
themes with profitable trade recommendations. Among
many achievements in 1997, our researchers laid the
groundwork for the structural changes (towards credit and
duration plays) now being implemented in both our sales
and trading operations ahead of EMU.
The future is always full of uncertainties and new
challenges. The reshaping of the European financial mar-
ket, the expansion of activities in emerging countries, and
the explosion of high yield issuances worldwide are clear
challenges in 1998 and beyond for all global players.
I believe the broad base of our business, its global scope
and capital support give us the strength and the edge to
maintain and even expand our leadership and position in
the Fixed Income markets for many years to come.
E Q U I T Y
Brady W. Dougan
Managing Director
E q u i t y
R e s e a r c h
S a l e s
Tr a d i n g
U n d e r w r i t i n g
Equity Finance/Prime Brokerage
C o n v e r t i b l e s / Wa r r a n t s
D e r i v a t i v e s
Proprietary Tr a d i n g
Private Corporate Equity
Credit Suisse First Boston continued to demonstrate in a
highly profitable 1997 that it belongs among the elite
equity firms to merit the title global super-bulge bracket.
The global footprint of our division—now more than
1,000 people strong worldwide—is extensive. We are
alone in having three major home markets—the U.S., the
U.K., and Switzerland. We have more than 200 traders
spanning the developed markets, the emerging markets,
and cash and derivative products. They trade 5,000
stocks globally, providing liquidity for customers, but also
developing and executing proprietary ideas for CSFB’s
own account.
We have a sales force in excess of 300 people talk-
ing to 2,000 institutional clients globally about research,
secondary ideas and primary issues. The breadth of our
distribution available to our global account base, com-
posed of institutional and individual investors, is extensive.
(Dollars in Millions) 1 9 9 7 1 9 9 6 % CHANGE
Revenue $1,212 $ 834 45%
Employees 1,089 804 35%
Average BIS Capital $ 462 n/a n/a
European
IPO
House(2)
#1Coordinator of
Globally
Distributed
Equity Issues
in 1997(1)
( 1 ) Securities Data Company.
( 2 ) B o n d w a r e .
21
In 1997 CSFB announced the acquisition of the
European and selected Asian equity, equity capital
markets and mergers and acquisitions advisory
businesses of BZW from Barclays. These businesses
have established market-leading positions in a
number of key areas. BZW M&A/Advisory has
advised on $58.5 billion worth of transactions since
1992. The Equity Capital Markets unit has acted as
bookrunner or global coordinator to $19.2 billion of
equity transactions globally during the same period.
These primary divisions are supported by a
secondary division widely acknowledged as one
of the market leaders in equity sales, trading, and
research, with a presence in all principal financial
centers worldwide, as well as a highly skilled
derivatives group producing tailored products for
clients globally.
With this acquisition, CSFB now ranks second
in U.K. equity trading and fifth in European equity
research, up from twentieth.
Major Acquisition
Enhances
Equity & Advisory
C a p a b i l i t i e s
CSFB underscored its commitment to equity
research in the last two years, increasing the size of its
analytical staff and its companies under coverage globally
from 1,500 to 4,000. We have significantly expanded our
coverage in areas such as healthcare, technology, busi-
ness and educational services, real estate and lodging,
natural resources, and Canadian research, while remaining
extremely active in the industrial sector. Our EVA™ p e r-
spective has provided a dynamic framework for equity
research and in the process has become the industry
synonym for the most effective methodology. For the third
consecutive year our focus list of 32 companies outper-
formed the total return of the S&P 500; our three-year
edge over the S&P was 162% to 125%.
We have organized three functions—trading, sales,
and research—across business lines around the world for
optimum effectiveness and mutual reinforcement. More-
o v e r, in all these areas we have maintained the continuity
of key personnel that is the hallmark of a global leader.
CSFB underscored its commitment to equity
research in the last two years, increasing the size of its
analytical staff and its companies under coverage globally
from 1,500 to 4,000. We have significantly expanded our
coverage in areas such as health care, technology, busi-
ness and educational services, real estate and lodging,
natural resources, and Canadian research, while remaining
extremely active in the industrial sector. Our EVA™ p e r-
spective has provided a dynamic framework for equity
research and in the process has become the industry
synonym for the most effective methodology. For the third
consecutive year our focus list of 32 companies outper-
formed the total return of the S&P 500; our three-year
edge over the S&P was 162% to 125%.
We have organized three functions—trading, sales,
and research—across business lines around the world for
optimum effectiveness and mutual reinforcement. More-
o v e r, in all these areas we have maintained the continuity
of key personnel that is the hallmark of a global leader.
These combined strengths have made us the fourth
leading global IPO firm, and the outright global coordinator
leader with more than $39 billion in transactions lead-
managed in 1997 as well as the number one European
IPO House. No institution has executed more secondary
IPOs in the last four years than CSFB, as our clients
employ the equity markets (rather than the M&A markets)
to sell their positions in companies. We are also a leader
in the convertible and synthetic new issue markets.
We have become the preeminent lead manager in
privatizations, as demonstrated most recently by the
Dollar Thrifty Automotive Group’s search for a large fleet financing led to a complex
equity/debt transaction that totaled $2.8 billion. In addition CSFB sold Chrysler’s
ownership in Dollar Thrifty, executing an initial public offering of $484 million in common
stock and completing an unusually complicated and innovative structure including
medium-term notes, commercial paper, and liquidity and revolving credit facilities in only
three months.
First 100% IPO of
Rental Car Company
On behalf of Zell Chilmark Partners, CSFB concluded a marketed offering of
15.6 million shares of common stock of the CVS Corporation, one of the leading chain
drugstores in the U.S. The offering, which was confined to a three-day period, was
more than four times oversubscribed. The stock price rose from $51.58 to $54.00
during the period, and resulted in proceeds of $855.5 million for CVS.
E x p e r t
E x e c u t i o n o f
M a r k e t e d
O ff e r i n g
R a i s e s
Stock Price
Ciba Specialty Chemicals Holding Inc. was distributed to shareholders of its parent,
Novartis. The underlying structure of this $5.5 billion transaction—incorporating the
simultaneous par value rights issue, global offering, rights recycling, and hard under-
writing—had never before been undertaken. The deal created the world’s leading
specialty chemicals company and earned a Corporate Finance magazine award as
Demerger of the Ye a r.
E u r o p e ’s
L a r g e s t
S p i n - O ff
CSFB lead-managed the $535 million global offering of preferred shares for
Petrobras, the huge Brazilian integrated oil and gas company. A strong marketing eff o r t
increased the original offering size from 1.35 billion to 2.0 billion shares and broadened
P e t r o b r a s ’s base of international shareholders, in particular, dedicated oil and gas
investors and large U.S. investors.
G l o b a l
M a r k e t i n g
I n c r e a s e s
Tr a n s a c t i o n
S i z e
23
enormous transactions for Telstra and the 1997 phase
of ENI, both described on page 15. CSFB managed the
$723 million common stock offering for the CalEnergy
refinancing, described on page 11, and the $484 million
IPO for Dollar Thrifty Automotive Group—the first 100%
initial public offering of a rental car company. We also
managed the CVS share offering of $855 million and the
M ATÁV privatization IPO at $1,013 million for the govern-
ment of Hungary.
Our strength and market coverage was broadened
by our acquisition of the European and selected Asian
e q u i t y, equity capital markets and mergers and acquisi-
tions advisory businesses of BZW from Barclays
(discussed on page 21), and through the opening of a full
service Canadian equity operation in mid-1997. Similarly,
our joint equity distribution alliance with Charles Schwab
a ffords our client equity issuers with access to an exten-
sive national network of active retail customers, comple-
menting our leading private client services group that
covers over 2,000 sophisticated individual investors and
small institutions.
Our relationship with Credit Suisse Financial
Products has been especially fruitful in the area of equity
derivatives. This business combines CSFP’s balance sheet
and OTC structuring capability with CSFB’s command of
equity derivatives and distribution expertise. The global
integration of all these capabilities is unmatched by any of
our competitors.
The global super-bulge bracket of equity firms is
rapidly taking shape. It will be small and enormously
powerful, with worldwide coverage, research that sets the
standard for excellence and leadership in every product
c a t e g o r y. CSFB already has a solid claim on membership.
It is not a claim we intend to relinquish.
Credit Suisse First Boston acted as joint global coordinator in the largest equity
o ffering from Central Europe by raising $1,013 million in the privatization IPO of MAT Á V,
H u n g a r y ’s main telecommunications services provider. The transaction was completed
within the original price range and in full size, despite a 22% decline in the Hungarian
stock market in the four days ahead of pricing and a 13% decline on the day of
pricing. I F R magazine awarded the MATÁV deal an Equity Issue of the Year for East
Europe/Middle East/Africa.
First Central
European Company
Listed on NYSE
Christopher Goekjian
Managing Director
Chief Executive Off i c e r
Credit Suisse
Financial Products
Interest Rate ProductsSwaps and options in over 30 currencies
Equity ProductsIndex, basket and single stockswaps and options
Foreign Exchange ProductsLonger term swaps and other FX risk management products
Commodity ProductsLonger term swaps and opt ions on precious metals, oil and other energy
Asset Trading and CreditD e r i v a t i v e sIncluding assets and derivativesfrom emerging and developedm a r k e t s
1997 proved to be another record year for Credit Suisse
Financial Products. Net trading revenue for the year was
U . S. $1,167 million, a 23% increase over 1996, resulting
from increased client and proprietary activities. Global
market conditions were benign until the fourth quarter
when the Asian crisis broke. CSFP continued to be at the
forefront of the derivatives industry, and used its leader-
ship in credit derivatives to develop and then make publicly
available an analytical framework for measuring and man-
aging credit risk, CR E D I TRI S K+.
During 1997 interest rate derivatives continued to
be the largest contributor to trading revenues. This area
continued to grow due to higher turnover and proprietary
trading profits in the vanilla products. European swap
markets were very active, ahead of EMU, and an increas-
ing number of CSFP’s clients intensified their interest risk
(Dollars in Millions) 1 9 9 7 1 9 9 6 % CHANGE
Revenue $1,167 $ 950 23%
Employees (front office) 281 241 17%
Average BIS Capital $ 885 n/a n/a
#1 #1Equity
Derivatives(1)
Credit
Derivatives(2)
CREDIT SUISSEF I N A N C I A LP R O D U C T S
( 1 ) World Equity voted CSFP
“Derivatives House of the Year”
in January 1998.
( 2 ) IFR voted CSFP “Credit
Derivatives House of the Year”
in December 1997.
25
management activities. In Japan, the continuing low Ye n
interest rate environment enabled CSFP to execute many
innovative yield enhancement structures. The generally low
level of G7 interest rates has led to increased investor
interest in less developed swap markets such as the
South African Rand where CSFP has developed a domi-
nant presence in the market.
In the first half of the year, the equity business built
on the successes of 1996 and showed very strong
results, which was somewhat offset by a more diff i c u l t
second half. There is clearly a growing equity culture in
Europe which has led to a strong demand for equity-linked
retail products, such as capital protected notes. CSFP
continued to be one of the major providers of these prod-
ucts during 1997. Recurring fears of a potential equity
market correction led to healthy client hedging business,
especially in Europe and the U.S. In Japan several of our
clients hedged their core equity holdings. 1997 again saw
a number of very successful Corporate Finance-type
equity derivative deals that were executed in close cooper-
ation with the Equity Capital Markets group, such as the
Leveraged Executive Asset Plan (“LEAP”) for Ciba
Specialty Chemicals which accompanied the company’s
initial public offering. Additionally, CSFP significantly
In early 1997 many European investors sought access to the exceptional returns
available in the global equity markets without exposing themselves to the downside risks
of equity investing. To meet this objective, together with Credit Suisse First Boston, we
structured and executed several “synthetic” convertible bonds that provide the upside of
equity with the principal protection of a bond. The synthetic convertibles were issued by
European and U.S. corporates, including Nestlé, ABB and Texaco. These issuers immedi-
ately hedged out the equity component of the bonds via an OTC equity component; the
corporates obtained funding at rates substantially below market cost, while investors
gained access to high-quality equity investments that match their desired exposure profile.
“CSFP has been at
the forefront of the
booming synthetic
convertible business…
it goes from strength
to strength.”*
* I F R’s World Equ ity
J a n u a r y, 1998
increased its activity of providing clients with derivative
structures that facilitate share repurchases, divestitures
and acquisitions.
In foreign exchange derivatives, 1997 marked the
continuation of trends established at the end of 1996, as
the USD appreciated roughly 11.5% versus core
European currencies and 13% versus the Japanese Ye n .
These moves were matched by the resurgence of implied
volatilities in the USD currency pairs. The opposite was
true for European crosses where, in anticipation of the
single European currency to be implemented in 1999,
EMS currency volatilities fell to all-time lows. CSFP’s
close working relationship with the Global Foreign
Exchange Group enabled it to provide its clients with a full
array of FX products. In this environment, CSFP focused
on creating interesting investment opportunities and
attractive long-dated hedging strategies.
C S F P ’s commodities business continued to improve,
and as gold continued its long-term decline, many produc-
ers looked to hedge their production. CSFP developed
a number of long-dated hedging products to aid gold
producers and, consequently, significantly increased its
client activity during 1997.
Credit derivative trading and risk management was a
major focus in 1997. The start of the year saw the inte-
gration of the Fixed Income Division’s Asset Tr a d i n g
business with CSFP’s credit derivatives business. In trad-
ing, CSFP now turns over in excess of U.S.$2 billion
notional a month in credit derivatives, making it one of the
two dominant firms in this segment of the derivatives mar-
ket. Expertise gained in this market helped the Group to
arrange the largest CBO/CLO of 1997 — CSFB’s
U.S.$5 billion Triangle transaction. In risk management,
CSFP has developed an analytical model to help manage
its credit exposure. The model’s use has subsequently
been extended on a Group-wide basis and was released
to the public as CR E D I TRI S K+ in October. The principles
behind CR E D I TRI S K+ have been endorsed by Moody’s
Investor Services, Standard and Poors, IBCA, JBRI and
three of the major accounting firms. CR E D I TRI S K+ r e p r e-
sents a significant contribution to the ongoing debate on
the subject.
CR E D I TRI S K+
In October 1997, we released our internal credit risk management framework,
CR E D I TRI S K+, to the public, after extensive internal testing and use. We wanted to pro-
mote discussion about the assessment and management of credit default risk within
a portfolio of different credits. At the same time, we sought to encourage regulators to
consider a more flexible, model-based approach to the calculation of regulatory capital
for credit default risk. CR E D I TRI S K+ received a warm reception from regulators, manage-
ment consultants, accountancy firms, and major academics and generated interest from
all sectors of the financial world, with up to 3,000 hits a week on our website. Wi t h
growing investor interest in what had previously been thought to be an unmanageable
risk, we fully expect to be at the forefront of the debate on the regulatory treatment
of credit derivatives during 1998.
increased its activity of providing clients with derivative
structures that facilitate share repurchases, divestitures
and acquisitions.
In foreign exchange derivatives, 1997 marked the
continuation of trends established at the end of 1996, as
the U.S.$ appreciated roughly 11.5% versus core
European currencies and 13% versus the Japanese Ye n .
These moves were matched by the resurgence of implied
volatilities in the U.S.$ currency pairs. The opposite was
true for European crosses where, in anticipation of the
single European currency to be implemented in 1999,
EMS currency volatilities fell to all-time lows. CSFP’s
close working relationship with the Global Foreign
Exchange Group enabled it to provide its clients with a full
array of FX products. In this environment, CSFP focused
on creating interesting investment opportunities and
attractive long-dated hedging strategies.
C S F P ’s commodities business continued to improve,
and as gold continued its long-term decline, many produc-
ers looked to hedge their production. CSFP developed
a number of long-dated hedging products to aid gold
producers and, consequently, significantly increased its
client activity during 1997.
Credit derivative trading and risk management was a
major focus in 1997. The start of the year saw the inte-
gration of the Fixed Income Division’s Asset Tr a d i n g
business with CSFP’s credit derivatives business. In trad-
ing, CSFP now turns over in excess of U.S. $2 billion
notional a month in credit derivatives, making it one of the
two dominant firms in this segment of the derivatives mar-
ket. Expertise gained in this market helped the Group to
arrange the largest CBO/CLO of 1997 — CSFB’s
U.S. $5 billion Triangle transaction. In risk management,
CSFP has developed an analytical model to help manage
its credit exposure. The model’s use has subsequently
been extended on a Group-wide basis and was released
to the public as CR E D I TRI S K+ in October. The principles
behind CR E D I TRI S K+ have been endorsed by Moody’s
Investor Services, Standard and Poors, IBCA, JBRI and
three of the major accounting firms. CR E D I TRI S K+ r e p r e-
sents a significant contribution to the ongoing debate on
the subject.
27In April 1997 CSFP opened a Tokyo branch,
making it the first bank specializing in risk management
products to open a branch in Japan. The branch will allow
CSFP to provide better service to the Group’s clients in
the Japanese market. This was followed in July by the
opening of the Hong Kong representative office.
Overall, 1997 represented another record year for
CSFP and the company’s position in the industry was
recognized by a number of awards. I n t e r n a t i o n a l
Financing Review acclaimed CSFP Credit Derivatives
House of the Ye a r, and the company also was awarded
Derivatives House of the Year by World Equity and
Best Foreign Dealer by Swaps Monitor. The successes of
1997 against a background of sometimes difficult market
conditions show the strength in depth of CSFP’s trading,
marketing and support functions, all of which are put at
the disposal of CSFB’s global client base.
Credit Suisse Financial Products
Relationship between Daily Revenue
and VAR Estimate
Specialists in
Risk Management
P R I VATE EQUITY
Generating Superior Returns
Experienced investors
Signi ficant commitments of capital
Institutional priority
Compelling incentive systems
Integrated origination eff o r t
Independent execution and commitment process
David A. DeNunzio
Managing Director
Chief Executive Off i c e r
Private Equity
1997 was a year of significant accomplishment for Private
E q u i t y. We redefined our business on a global basis and
added significantly to our staff. At the same time, we
harvested several investments at attractive rates of return,
while investing over $130 million in new situations.
We now have three investment pools to address
global private equity opportunities sourced by CSFB,
Credit Suisse, and Credit Suisse Group. Representing
approximately $1.5 billion in assets under management,
they are focused on the U.S. and Canada, Russia and the
Ukraine, and the rest of the world (“International”). These
funds, when fully subscribed, will aggregate a significant
commitment of CSG capital with that of outside investors
to make direct investments in growth opportunities,
corporate partnerships, recapitalizations, buyouts, and
other types of private equity investments.
1 9 9 7 1 9 9 6 % CHANGE
Employees 43 16 169%
A Global Network
of Professionals
Creates the
Transaction
Opportunities for
Private Equity
29
Our professionals, based in the regional centers of
London, New York, Moscow, and Hong Kong, respond
to the flow of opportunities seen by the global network of
corporate and investment bankers, private bankers and
equity research analysts, among other CSG personnel.
1997 saw increased activity, both among multinational
corporations focusing more intently on core businesses
and among owner-managers who may lack a financial
partner—especially one with industry expertise.
As a separate core division of the Firm, we benefit
from the deal flow of CSFB, but we are afforded indepen-
dent governance and investment decision making by
Credit Suisse Group. Our Division is chaired by Jack
H e n n e s s y, who is also a member of the CSG board and
was formerly CEO of CS First Boston.
One significant investment came with Cable Plus,
a leading provider of integrated private cable, local and
long distance telecommunications services and Internet
access to residential apartment communities in the United
States. Cable Plus’s primary shareholder is Eagle River,
LLC, the investment vehicle of Craig O. McCaw. The
investment enabled the company to aggressively pursue
capital expenditures and acquisition opportunities, and to
partner with a strong financial player. CSFB’s Media and
Telecommunications Group had a long relationship with
Cable Plus and introduced Private Equity when the com-
pany needed expansion capital. Private Equity made a
minority investment in 1997 by purchasing newly issued
preferred stock, assuming a seat on the Board of
Directors as part of the transaction.
Alec D’Janoeff and Heidi Rauber of Private Equity review businessplans with Alfonso Durán Pich, Managing Director of Frida.
Early in 1997 Credit Suisse First Boston International
Equity Partners, L.P. purchased 97.6% of Frida
Alimentaria, S.A., Spain’s leading manufacturer and dis-
tributor of frozen dough, which supplies premium pastry
and bread to patisseries and bakers throughout the coun-
t r y. The investment was accompanied by approximately
$27 million of bank credit provided by Credit Suisse First
Boston. Frida was especially attractive because of its
sophisticated management team, strong marketing and
financial practices, and well-articulated strategy.
Management purchased the remaining 2.4% of the
company and, under an incentive plan put in place with
the investment, may increase ownership in the company
if Frida performs well—which it continued to do
throughout 1997.
Private Equity Invests
in Leading
Spanish Company
S U P P O R TS E R V I C E S
Stephen A. M. Hester
Managing Director
Chief Financial Off i c e r
The support departments at CSFB face unique chal-
lenges. The success of our response will, more than ever
before, affect the Firm’s future. Our challenges are driven
by the intensity and complexity of changing business
needs—to support and control growth, raise productivity,
and modernize and integrate our infrastructure.
Today we are facing a formidable set of problems,
nearly all related to the pace of change in our industry.
They include the emergence of the EMU, the widely
publicized adjustments associated with the year 2000,
even broader adaptations to changing technology, the
development of an appropriate and secure corporate data
warehouse, the establishment of global compliance stan-
dards, and the improved management of our assets in a
productive and innovative fashion. In addition, the acquisi-
1 9 9 7 1 9 9 6 % CHANGE
Employees 6,656 6,183 8%
Employees
Support the
Firm’s Growth and
Global Reach
31
tion of the BZW businesses means that our operations
arm in London must adapt to handle the integration of the
substantial volume of BZW equity business. On page 33
are thoughts by some of my colleagues on managing this
change. On page 45 the importance of the work of our
market and credit risk management departments is set out
in more detail.
CSFB has generated record business volumes for
several consecutive years. But more than volume, the
Firm has added value through greater sophistication, com-
plexity and geographic reach. This has resulted in far
greater demands placed upon our Information Te c h n o l o g y
and operations areas (processing more transactions),
and upon the various reporting and monitoring functions
which examine risk, finance, tax, compliance, and other
regulatory issues.
Market Risk
M a n a g e m e n t
Corporate Services
O p e r a t i o n s
Legal and
C o m p l i a n c e
F i n a n c e
R e g i o n a l
O v e r s i g h t
Credit
Risk Management
Tr e a s u r y, Tax
and Insurance
Internal Audit
Human Resources
New Business and
Strategic Planning
I n f o r m a t i o n
Te c h n o l o g y
M o r e o v e r, the consolidation of the former Credit
Suisse and the former CS First Boston in 1997 meant
that our structural complexity sharply increased in terms of
product, geography, and regulatory environment. In other
words, our global scope is an enhanced business advan-
tage carrying enhanced support responsibilities. Complex
global structuring issues require additional attention from
our tax and legal professionals. Finance and risk functions
now measure and monitor activity and help allocate
resources in an even larger arena. Tr e a s u r y ’s funding
responsibilities are that much more complicated.
To say that our institution is heavily dependent upon
advanced—and constantly advancing—technology is
something of an understatement. We must be able to
communicate with one another, as well as with our clients
and our suppliers, and to process, store, retrieve, and
convert information, everywhere in the world, any time of
day or night, through any local hardware and software
system, smoothly and instantly, while at the same time
preserving the secrecy of confidential information and
ensuring data protection. Like all the other support func-
tions, this is a capability without which the numerous
award-winning transactions that fill this Review would be
u n t h i n k a b l e .
When building a support system to meet these
needs, it is not enough to establish a single, massively
e ffective monolith. A global investment bank has a wide
variety of needs by business and location. Support must
be tailored to meet the requirements of different units and
d i fferent cultures; it must be stable enough to stand up to
mounting demands and flexible enough to adapt to a
swiftly changing environment. All of this requires an
ongoing program of evaluating the effectiveness of our
service delivery and the examination of alternatives that
will improve that delivery—such as outsourcing in the
processing area.
There are numerous requirements for keeping the
support capability at peak eff i c i e n c y. None is more impor-
tant than the people who make the systems work. Our
management team is stretched but rising to the challenge.
In the support areas, as much as the rest of the Firm,
CSFB presents uniquely absorbing and rewarding profes-
sional challenges.
33
“The support departments face unique challenges. The success of our response to
these will more than ever before affect the Firm’s future. Our challenges are driven by
the intensity and complexity of changing business needs—to support and control growth,
raise productivity and modernize and integrate our infrastructure.”
Stephen A. M. Hester, Chief Financial Off i c e r
“If you don’t like change, then you don’t work in technology. Layer onto that the complexities
and demands of a global investment bank, a business growing by acquisition, the constantly
evolving mix of applications, the challenges of the ‘Year 2000’ problem, the preparation
for EMU compliance...and you have the world’s best technology job. In 1997 alone we
completed the global rollout of voice mail, improved our global e-mail systems, implemented
Windows NT in our front office, and handled more transaction volume, from more locations,
than ever before.” Frank J. Fanzilli, Jr. , Chief Information Off i c e r
“From a legal and compliance standpoint, being a truly global investment bank that
is also an acknowledged leader in the emerging markets, gives us the opportunity to
shape global standards for many documentation and compliance practices. These are
standards that tend to spread ‘best practices’ around the world. The benefits to investors
are better documentation and disclosure. The benefit to issuers is greater access to
investors around the world.”
Stephen R. Greene, General Counsel
“The Firm more than doubled its size in 1997 through merger and acquisition. This
presented significant challenges to Human Resources to create a global data base,
integrate multiple compensation and titling systems, and harmonize benefits so that our
employees throughout the world are assured of the Firm’s commitment to them and
their careers at CSFB.”
David C. O’Leary, Head of Human Resources
“From a facilities standpoint, in the last 18 months we have relocated over 4,000
people into a completely renovated building in New York City. 1998 will be more of the
same, with major moves underway in Tokyo, Moscow, and London. The number of
people we have already moved in London in 1998 is more than the size of our entire
work force just a few years ago.”
Luther L. Te r r y, Jr. , Head of Corporate Services
T h e
M a n a g e m e n t
of Change:
S o m e
P e r s p e c t i v e s
CREDIT SUISSE G R O U P
Credit Suisse Group is the parent organization of Credit
Suisse First Boston. Its widespread activities are linked
by the strategy of capturing global leadership in the two
dominant trends emerging in the world’s financial services
market—asset gathering and securitization or disinterme-
d i a t i o n .
CSG operates a decentralized management structure
based on five business units, each geared to the require-
ments of specific customer groups and markets:
Credit Suisse is a leading bank in Swiss domestic
business, serving corporate and individual clients through
a multichannel strategy and an efficient branch network
covering all major locations.
Credit Suisse Private Banking is one of the world’s
leading private banking operations. It has a strong market
presence in Switzerland and around the globe and off e r s
comprehensive investment advisory service and solutions
tailored to the needs of private clients.
CSFB is a leading global investment banking firm,
providing comprehensive advisory, capital raising, sales
and trading, and financial products for users and suppliers
of capital around the world.
The worldwide activities of Credit Suisse Asset
Management are focused on the needs and requirements
of institutional investors.
The Winterthur Group is one of the leading insurance
companies in Europe and one of the largest international
insurance groups operating worldwide. It offers private and
corporate customers tailor-made insurance and pension
solutions at the local and international levels.
The Credit Suisse Group is an institution unique
in today’s global financial markets. Its five core businesses
give a combination of strength and depth. While head-
quartered in Zurich, CSG’s international presence provides
thorough market coverage, from major centers to emerg-
ing markets.
“Credit Suisse Group has a unique position in the
international financial services market as one of the
few truly global providers of integrated banking and insur-
ance services. Our market-driven structure promotes
maximum customer focus, entrepreneurial initiative and
a c c o u n t a b i l i t y, and the creation of high shareholder value.”
Lukas Mühlemann
Chief Executive Officer
of Credit Suisse Group
Services
for institutional
investors
w o r l d w i d e
Corporate and
individual
customers in
S w i t z e r l a n d
“Taking financial risks and managing these risks proactively in a balanced
framework is our core task and responsibility. Credit Suisse Group is uniquely
structured to deal with risk issues, as each of the five business units focuses
and specializes in different markets, products, and locations and therefore in
various risk classes. We are increasingly embedding risk management,
performance measurement, and dynamic capital allocation in a comprehensive
integrated framework with common denominators.”
Hans-Ulrich Doerig
Vice Chairman and Chief Risk Off i c e r
Credit Suisse Group
Services for
private investors
in Switzerland
and internationally
Worldwide
investment
b a n k i n g
Worldwide
insurance business
35
BOARD OF DIRECTORS( 1 )
Rainer E. Gut (2)(3)
Chairman of the Board
Chairman of the Board of Credit Suisse Group
Robert L. Genillard (2)(3)(4)
Vice Chairman of the Board
Vice Chairman of the Supervisory Board of
TBG Holdings, n.v.
Franz Albers
Partner, Albers & Co.
Thomas W. Bechtler (2)
Chairman of the Board of Zellweger Luwa Ltd.
Ulrich Bremi (2)(3)(4)
Chairman of the Board of Swiss Reinsurance Company
Marc-Henri Chaudet (2)
Attorney-at-Law
Mario A. Corti
Executive Vice President of Nestlé S.A.
Michael Hilti (4)
Chairman of the Board of Hilti Corporation
Klaus Jacobi (4)
Former Secretary of State of Switzerland
Andreas W. Keller
Chairman of the Board and Chief Executive Officer
of Edward Keller Ltd. and
Edward Keller Holding Ltd.
Andreas N. Koopmann (4)
Chief Executive Officer of Bobst SA
Heini Lippuner (2)
Member of the Board of Novartis AG
Lukas Mühlemann (2)(3)
Chief Executive Officer of Credit Suisse Group
Peter Spälti (2)
Chairman of the Board of the Winterthur Insurance
Aziz D. Syriani (5)
President and Chief Executive Officer
of the Olayan Group
Ernst Tanner
Chairman and Chief Executive Officer of
Lindt & Sprüngli
(1) Refers to the Board of Directors for the legal entity, Credit Suisse First
Boston, a Swiss bank containing the activities of the global investment bank
and the asset management business units.
(2) Member of the Chairman’s Committee.
(3) Member of the Compensation Committee.
(4) Member of the Audit Committee.
(5) Until May 29, 1998.
37
Brady W. DouganManaging Director
Equity
David C. MulfordManaging Director
Vice Chairman of
Credit Suisse
First Boston, Inc.
Chairman International
Allen D. WheatChairman of the Executive
Board and
Chief Executive Officer
Christopher GoekjianManaging Director
Chief Executive Officer
of Credit Suisse
Financial Products
Stephen A. M. HesterManaging Director
Chief Financial Officer
Marc HotimskyManaging Director
Fixed Income
Stephen E. StonefieldManaging Director
Chairman of Pacific Region
of Credit Suisse First Boston
Franz von MeyenburgManaging Director
Deputy Chairman,
Europe
Charles G. Ward IIIManaging Director
Corporate and
Investment Banking
EXECUTIVE BOARD
MANAGING DIRECTORS
Osmar Abib Jr.Nayla AbousleimanJohn K. Adams Jr.William V. AdamskiAndrew AdcockMark A. AdleyJon M. AfrickZubaid AhmadJohannes AlbeckKristin M. AllenThomas AmstutzDavid L. AndersonRussell L. AppelRome G. ArnoldRichard W. AtterburyLiza BaileyAlessandro BaldinThomas K. BarberRebecca B. Barfield-
JohnsonJanos BarthaDavid C. BasileWilliam R. Battey Jr.W. David BauerAllan J. BaumOmar BayoumiJoseph BeckerJeremy J. BennettWalter BerchtoldBenjamin R. BloomstoneTimothy D. BockHarold W. BogleJulia BondRichard H. BottJonathan D. BramKevin BrauNicholas BrigstockeJohn BrydsonPaul D. BuckleyErnst A. BuetlerPhilippe M. BuhannicJeffrey H. BunzelJohn G. BurkeMartin P. CaffreyCarlo M. CalabriaJorge A. CalderonPaul CalelloElaine C. CampbellLloyd E. CampbellJoseph D. Carrabino Jr.Christopher CarterChristopher R. CarterEnrique CastilloChristopher ChambersJean-Christian Cheysson
Trevor ChiddicksCharles W. ChigasMarkus ChristenAndrew ChristieJohn C. ChrystalJames F. ClarkMichael W. ClarkBenjamin H. CohenRobert A. CohenGeorge W. ColemanPatrick D. ColemanJoseph A. ConeenyJohn E. ConlinDavid M. ConnorsThomas A. ConnorsBrian M. CookAdrian R. T. CooperJohn F. CozziJulie CraddockDavid C. CrisantiErnesto CruzW. Robert DahlRichard B. D’AlbertStewart W. DaumanJonathan R. Davie (1) (5)
Eric De CandiaAdam De Courcy LingGilles De DumastAdam de JongSimon de ZoeteJames D. DeasyFrank J. DeCongelioDavid A. DeNunzioDonald J. DevineKatherine E. DietzeJack J. DiMaio Jr.Alec D’JanoeffCharles B. EdelsteinWilliam J. EganJ. Anthony EhingerAmir A. EilonPaul N. ElliottRusty ElvidgeThomas K. EmmonsD. Wilson ErvinMarcus A. L. EverardBertrand F. FaconFrank J. Fanzilli Jr.Michael A. FederMark L. FinermanRobert FinneyH. Andrew FisherJeremy P. FletcherSimon J. FordJean-Marc Forneri
Craig H. FosterPeter A. FowlerJonathan R. D. FoxMichael P. FriezoAnthony FryKeizo FujitakeHideki FukuiJoseph D. GallagherJohn L. GarciaRichard GillingwaterPaul M. GimsonJames T. Glerum Jr.Joel GlodowskiIrvin J. GoldmanAndrew GordonNicholas Gordon-SmithFrank J. GovernaliLaurence S. GrafsteinMarc D. GranetzStephen R. GreeneMichael D. GreenspanSteven S. GreenwaldCharles Peter GreuterJonathan P. GrussingSanjeev GuptaRalph E. GuyotBalz HaeusermannMichael G. Hajialexandrou(5)
Geoffrey P. HallGordon T. HallLawrence A. HamdanDavid HanMatthew C. HarrisJohn S. HarrisonNeil A. S. HarveyThomas E. HassenJames P. HealyColin H. Hely-HutchinsonWallace C. HendersonStefan HilberMichael HintzeF. Perkins Hixon Jr.James B. HoesleyPaul R. HoferRichard C. Holbrooke (1)
Mark A. HolmesAlan E. HowardAlan H. HowardGina HubbellHarry E. HuerzelerMarco M. IllyBrian C. ImrieAndrew K. IpkendanzAlfred G. JacksonMoez A. Jamal
Robert A. JeffeIan S. JenkinsDaniel J. JohnsonGrant C. JohnsonJ. Leslie K. JohnstonFrancois JourdainHartmuth JungGiles B. KeatingAndreas I. Keller
SarmientoTony KellyPatrick T. KennedyMark W. KennelleyRichard A. Kersley (5)
Susan KilsbyCharles Kirwan-TaylorFritz T. KleinAlexander M. KnasterSteven KochKenneth J. KornblauJ. Steven KrausJames E. KreitmanRobert S. KricheffPaul KuoRaymond S. KuramotoAdam S. KurzerMark B. LandisBruno R. LangFrancois C. Langlade-
DemoyenKarim LariSharon LarmourStephen M. LazarusJames H. Leigh-PembertonRobert J. LevittBarry LewisD. Scott LindsayBruce W. LingSamuel G. LissC. Robert Lister(5)
Gerald M. LodgeStephen T. LongAnn F. LopezChristian LubiczRobin R. MacdonaldAlfredo MagriFrancois J. MaisonrougeG. David M. Maletta IIGuillaume A. MalleJohn S. MarlattMark S. MaronIan MarshJeremy MarshallChristopher G. MartinMichael E. Martin
Osmar Abib Jr.Nayla AbousleimanJohn K. Adams Jr.William V. AdamskiAndrew AdcockMark A. AdleyJon M. AfrickZubaid AhmadJohannes AlbeckKristin M. AllenThomas AmstutzDavid L. AndersonRussell L. AppelRome G. ArnoldRichard W. AtterburyLiza BaileyAlessandro BaldinThomas K. BarberRebecca B. Barfield-
JohnsonJanos BarthaDavid C. BasileWilliam R. Battey Jr.W. David BauerAllan J. BaumOmar BayoumiJoseph BeckerJeremy J. BennettWalter BerchtoldBenjamin R. BloomstoneTimothy D. BockHarold W. BogleJulia BondRichard H. BottJonathan D. BramKevin BrauNicholas BrigstockeJohn BrydsonPaul D. BuckleyErnst A. BuetlerPhilippe M. BuhannicJeffrey H. BunzelJohn G. BurkeMartin P. CaffreyCarlo M. CalabriaJorge A. CalderonPaul CalelloElaine C. CampbellLloyd E. CampbellJoseph D. Carrabino Jr.Christopher CarterChristopher R. CarterEnrique CastilloChristopher ChambersJean-Christian CheyssonTrevor Chiddicks
Charles W. ChigasMarkus ChristenAndrew ChristieJohn C. ChrystalJames F. ClarkMichael W. ClarkBenjamin H. CohenRobert A. CohenGeorge W. ColemanPatrick D. ColemanJoseph A. ConeenyJohn E. ConlinDavid M. ConnorsThomas A. ConnorsBrian M. CookAdrian R. T. CooperJohn F. CozziJulie CraddockDavid C. CrisantiErnesto CruzW. Robert DahlRichard B. D’AlbertStewart W. DaumanEric De CandiaAdam de Courcy LingGilles de DumastAdam de JongSimon de ZoeteJames D. DeasyFrank J. DeCongelioDavid A. DeNunzioDonald J. DevineKatherine E. DietzeJack J. DiMaio Jr.Alec D’JanoeffCharles B. EdelsteinWilliam J. EganJ. Anthony EhingerAmir A. EilonPaul N. ElliottRusty ElvidgeThomas K. EmmonsD. Wilson ErvinMarcus A. L. EverardBertrand F. FaconFrank J. Fanzilli Jr.Michael A. FederMark L. FinermanRobert FinneyH. Andrew FisherJeremy P. FletcherSimon J. FordJean-Marc ForneriCraig H. FosterPeter A. FowlerJonathan R. D. Fox
Michael P. FriezoAnthony FryKeizo FujitakeHideki FukuiJoseph D. GallagherJohn L. GarciaRichard GillingwaterPaul M. GimsonJames T. Glerum Jr.Joel GlodowskiIrvin J. GoldmanAndrew GordonNicholas Gordon-SmithFrank J. GovernaliLaurence S. GrafsteinMarc D. GranetzStephen R. GreeneMichael D. GreenspanSteven S. GreenwaldCharles Peter GreuterJonathan P. GrussingSanjeev GuptaRalph E. GuyotBalz HaeusermannMichael G. Hajialexandrou(1)
Geoffrey P. HallGordon T. HallLawrence A. HamdanDavid HanMatthew C. HarrisJohn S. HarrisonNeil A. S. HarveyThomas E. HassenJames P. HealyColin H. Hely-HutchinsonWallace C. HendersonStefan HilberMichael HintzeF. Perkins Hixon Jr.James B. HoesleyPaul R. HoferMark A. HolmesAlan E. HowardAlan H. HowardGina HubbellHarry E. HuerzelerMarco M. IllyBrian C. ImrieAndrew K. IpkendanzAlfred G. JacksonMoez A. JamalRobert A. JeffeIan S. JenkinsDaniel J. JohnsonGrant C. JohnsonJ. Leslie K. Johnston
Francois JourdainHartmuth JungGiles B. KeatingAndreas I. Keller
SarmientoTony KellyPatrick T. KennedyMark W. KennelleyRichard A. Kersley (1)
Susan KilsbyCharles Kirwan-TaylorFritz T. KleinAlexander M. KnasterSteven KochKenneth J. KornblauJ. Steven KrausJames E. KreitmanRobert S. KricheffPaul KuoRaymond S. KuramotoAdam S. KurzerMark B. LandisBruno R. LangFrancois C. Langlade-
DemoyenKarim LariSharon LarmourStephen M. LazarusJames H. Leigh-PembertonRobert J. LevittBarry LewisD. Scott LindsayBruce W. LingSamuel G. LissC. Robert Lister (1)
Gerald M. LodgeStephen T. LongAnn F. LopezChristian LubiczRobin R. MacdonaldAlfredo MagriFrancois J. MaisonrougeG. David M. Maletta IIGuillaume A. MalleJohn S. MarlattMark S. MaronIan MarshJeremy MarshallChristopher G. MartinMichael E. MartinDavid J. MatlinPeter R. MattMichael J. MauboussinDavid A. MayesJohn M. McAvoyClaire McCarthy
39
David J. MatlinPeter R. MattMichael J. MauboussinDavid A. MayesJohn M. McAvoyClaire McCarthyWilliam G. McDonaldMichael J. McGheeJohn E. McGintyJoseph T. McLaughlinPatricia J. McLaughlinJeremy MeadSimon MeadowsRichard MeddingsEthan B. MeisterDonald MeltzerEric MeyerJames W. MeyerTrygve MikkelsenKen Miller(2)
Rodney M. MillerJuergen MoessnerStephan C. MonthThomas John MooreKevin J. MorleyNeil MoskowitzRichard H. Moulder (5)
Robert S. MurleyGordon MurrayStefano NatellaMartin J. NewsonAlasdair A. J. NortonRobert C. O’BrienTetsuo OchiAdebayo O. OgunlesiTimothy P. O’HaraMasahiro OhshiroDavid C. O’LearyThomas F. O’MaraSusumu OmoriYoshinori OnakaCarlos OnisEoin F. O’SheaJ. Craig OxmanLuc P. PajotGunnar T. PalmRichard P. PalmieriVincent N. ParkinMark R. PattersonDavid J. Pierce-JonesHarry C. PinsonWilliam S. PitofskySteven M. Plag (5)
Jonathan PlutzikMichele Porro
Malcolm K. PriceTrevor C. PriceSimon E. Prior-PalmerCraig A. PuffenbergerZhi Zhong QiuKathryn M. QuigleyAndrew ReicherThomas ReidPhilip RemnantThomas G. RiceGordon A. RichJohn A. RichardsNick RileyWilliam M. RobertsFelix E. A. RobynsCarolynn H. RockafellowHartley RogersJohn J. RomanelliJonathan K. RounerKevin R. RushPaolo A. RushingDavid RussellOlivier SachsJeffrey J. SalzmanEdward J. SantoroGuglielmo Sartori
Di BorgoriccoNoriaki SasakiSadeq SayeedAnne C. SchaumburgPaul G. ScheufeleMichael SchmertzlerPeter H. SchmukiMaurits SchoutenScott W. SeatonPhilip W. Seefried Jr.Mark SeligmanMartin SennWilliam C. SharpstoneLawrence A. ShelleyAlan R. SheriffHyun Joe ShinGeoffrey T. SmailesJoergen SmebyAlan H. Smith (3)
Frederick M. R. SmithScott T. SmithStephen M. SparkesDavid SpaughtonRichard G. SpiroHansruedi StadlerMarc H. SteglitzThomas F. SternfieldRobert B. StevensAndrew D. Stone
Charles G. StonehillAnthony Stranger-JonesMarc TabahJean-Guy TalbotYoshinori TanakaMichael TarrantMasahito TatsumiAndrew R. TaussigGregory J. Terry (4)
Luther L. Terry Jr.Peter ThomasRobert L. Thornton Jr.Earnswell T. TiuTheresia TolxdorffTakatoshi ToyodaPaul TregidgoAlexandre TrevezaHans-Joerg TurtschiRobert D. Tyrwhitt-DrakeShigeru UedaScott J. UlmJ. Tijo Van MarlePhilip S. VasanMatty VengerikDavid P. WalkerThaddeus J. WalkowiczJohn J. WalshAlastair J.M. WaltonTodd E. WarnockPhilip N. WeingordNorman S. WeinsteinBenjamin C. WestonDavid P. WheelerMarc A. White Jr.Alex WidmerMichael WilliamsonJonathan J. WilmotLewis H. WirshbaNicholas R. WoolnoughJohn A. WrightNicholas H. WrightJohn M. WylieKenkichi YagiShinji YamadaAtsuyoshi YoshidaLouis G. Zachary Jr.John ZafiriouGail S. ZauderKaren E. Zimmerman
Managing Director—Senior Advisors
Anthony L. BrookeJohn R. CampbellJohn D. David-Jones (5)
Jaime de Marichalar Saenz de Tejada
Richard B. duBuscCarlos Alberto FredericoCharles B. GatesHans-Joachim HeunJoseph F. HuberPhilip M. HuyckThomas W. KeaveneyHans Albert KellerWilliam J. KimmelClaus G. LabesArturo C. F. MathieuDavid C. McCutcheonJack D. McSpadden Jr.Andrea A. MoranteDouglas L. PaulDiana W. ReidChristian E. RohrbachMartin RommLynda RouseMaximilian SorgNeal M. SossAlfred SyzCharles W. ThomasStephen M. UnfriedPote P. VidetGeorge B. WeiksnerBalz M. WielandWilliam M. Wigder
(1) Vice Chairman of
Credit Suisse First Boston
(2) Vice Chairman of
Credit Suisse First Boston
Corporation
(3) Vice Chairman of
the Pacific Region of
Credit Suisse First Boston
(4) Vice Chairman of
the Asia/Pacific Region of
Credit Suisse First Boston
(5) Subject to the completion
of the purchase of certain
BZW businesses from
Barclays expected on or
about April 30, 1998.
Jonathan R. Davie (1)
Managing DirectorVice ChairmanCredit Suisse First Boston
Richard C. HolbrookeManaging DirectorVice ChairmanCredit Suisse First BostonCorporation
Ken MillerManaging DirectorVice ChairmanCredit Suisse First BostonCorporation
Anthony L. BrookeJohn R. CampbellJohn D. David-Jones (1)
Jaime de Marichalar Saenz de Tejada
Richard B. duBuscCarlos Alberto FredericoCharles B. GatesHans-Joachim HeunJoseph F. HuberPhilip M. HuyckThomas W. KeaveneyHans Albert KellerWilliam J. KimmelClaus G. LabesArturo C. F. MathieuDavid C. McCutcheon
Jack D. McSpadden Jr.Andrea A. MoranteDouglas L. PaulDiana W. ReidChristian E. RohrbachMartin RommLynda RouseMaximilian SorgNeal M. SossAlfred SyzStephen M. UnfriedPote P. VidetGeorge B. WeiksnerBalz M. WielandWilliam M. Wigder
Managing Director—Senior AdvisorsVice Chairmen
Alan H. SmithManaging DirectorVice Chairmanof the Pacific Region ofCredit Suisse First Boston
Gregory J. TerryManaging DirectorVice Chairmanof the Pacific Region ofCredit Suisse First Boston
(1) Subject to the completion of the purchase of certain BZW businesses from Barclays expected on or about April 30, 1998.
William G. McDonaldMichael J. McGheeJohn E. McGintyJoseph T. McLaughlinPatricia J. McLaughlinJeremy MeadSimon MeadowsRichard MeddingsEthan B. MeisterDonald MeltzerEric MeyerJames W. MeyerTrygve MikkelsenRodney M. MillerJuergen MoessnerStephan C. MonthThomas John MooreKevin J. MorleyNeil MoskowitzRichard H. Moulder (1)
Robert S. MurleyGordon S. MurrayStefano NatellaMartin J. NewsonAlasdair A. J. NortonRobert C. O’BrienTetsuo OchiAdebayo O. OgunlesiTimothy P. O’HaraMasahiro OhshiroDavid C. O’LearyThomas F. O’MaraSusumu OmoriYoshinori OnakaCarlos OnisEoin F. O’SheaJ. Craig OxmanLuc P. Pajot
Gunnar T. PalmRichard P. PalmieriVincent N. ParkinMark R. PattersonDavid J. Pierce-JonesHarry C. PinsonWilliam S. PitofskySteven M. Plag (1)
Jonathan PlutzikMichele PorroMalcolm K. PriceTrevor C. PriceSimon E. Prior-PalmerCraig A. PuffenbergerZhi Zhong QiuKathryn M. QuigleyAndrew ReicherThomas ReidPhilip RemnantThomas G. RiceGordon A. RichJohn A. RichardsNick RileyWilliam M. RobertsFelix E. A. RobynsCarolynn H. RockafellowHartley RogersJohn J. RomanelliJonathan K. RounerKevin R. RushPaolo A. RushingDavid RussellOlivier SachsJeffrey J. SalzmanEdward J. SantoroGuglielmo Sartori
Di BorgoriccoNoriaki Sasaki
Sadeq SayeedAnne C. SchaumburgPaul G. ScheufeleMichael SchmertzlerPeter H. SchmukiMaurits SchoutenScott W. SeatonPhilip W. Seefried Jr.Mark SeligmanMartin SennWilliam C. SharpstoneLawrence A. ShelleyAlan R. SheriffHyun Joe ShinGeoffrey T. SmailesJoergen SmebyFrederick M. R. SmithScott T. SmithStephen M. SparkesDavid SpaughtonRichard G. SpiroHansruedi StadlerMarc H. SteglitzThomas F. SternfieldRobert B. StevensAndrew D. StoneCharles G. StonehillAnthony Stranger-JonesMarc TabahJean-Guy TalbotYoshinori TanakaMichael TarrantMasahito TatsumiAndrew R. TaussigLuther L. Terry Jr.Peter ThomasRobert L. Thornton Jr.Earnswell T. Tiu
Theresia TolxdorffTakatoshi ToyodaPaul TregidgoAlexandre TrevezaHans-Joerg TurtschiRobert D. Tyrwhitt-DrakeShigeru UedaScott J. UlmJ. Tijo Van MarlePhilip S. VasanMatty VengerikDavid P. WalkerThaddeus J. WalkowiczJohn J. WalshAlastair J.M. WaltonTodd E. WarnockPhilip N. WeingordNorman S. WeinsteinBenjamin C. WestonDavid P. WheelerMarc A. White Jr.Alex WidmerMichael WilliamsonJonathan J. WilmotLewis H. WirshbaNicholas R. WoolnoughJohn A. WrightNicholas H. WrightJohn M. WylieKenkichi YagiShinji YamadaAtsuyoshi YoshidaLouis G. Zachary Jr.John ZafiriouGail S. ZauderKaren E. Zimmerman
FINANCIAL STAT E M E N T S
Income Statements of the Business Unit ( 1 )
Year Ended December 31, 1997
and Pro Forma Year Ended December 31, 1996
PRO FORMA P E R C E N T
DOLLARS IN MILLIONS (UNAUDITED) 1 9 9 7 1 9 9 6 C H A N G E
Revenues
Fixed Income $ 3,379 $ 2,356 43%
Equity 1,212 834 45%
CSFP 1,167 950 23%
CIBD 1,479 1,368 8%
Other (109) (15) n/a
Total 7,128 5,493 30%
Expenses
Personnel expense 3,497 2,676 31%
Execution, clearing, and brokerage 259 186 39%
Other operating 1,006 813 24%
Total 4,762 3,675 30%
Gross profit 2,366 1,818 30%
Depreciation 148 143 3%
Write-downs, provisions, and losses 390 258 51%
Pretax income before extraordinary/exceptional
items and minority interest 1,828 1,417 29%
Income taxes 621 n/a
Net income before extraordinary/exceptional
items and minority interest $ 1,207 n/a
Extraordinary/exceptional items, net (296) n/a
Minority interest (85) n/a
Net income after minority interest $ 826 n/a
(1) The income statements are for the Credit Suisse First Boston global investment banking business unit.
They are based on Swiss accounting rules for banks as modified for revenue presentation and the
treatment of execution, clearing, and brokerage costs as an expense rather than as contra-revenue.
Extraordinary/exceptional items, net include the BZW restructuring charge of $165 million and a
$102 million technology charge for year 2000 and EMU work.
41
Balance Sheets of the Business Unit ( 1 )
PRO FORMA
DECEMBER 3 1 , JANUARY 1, P E R C E N T
DOLLARS IN MILLIONS (UNAUDITED) 1 9 9 7 1 9 9 7 ( 2 ) C H A N G E
AssetsCash $ 1,403 $ 1,144 23%
Money market papers 11,194 10,963 2%
Due from banks 96,077 95,946 0%
of which securities lending and
reverse repurchase agreements 71,728 60,827 18%
Due from other business units 4,120 0 n/a
Due from customers 72,217 93,515 (23%)
of which securities lending and
reverse repurchase agreements 43,076 63,989 (33%)
Mortgages 4,970 4,156 20%
Securities and precious metals trading portfolios 71,101 60,841 17%
Financial investments 6,488 4,527 43%
Non-consolidated participations 182 211 (14%)
Fixed assets 1,276 1,090 17%
Accrued income and prepaid expenses 4,040 3,275 23%
Other assets 37,285 28,678 30%
Total Assets $ 310,353 $ 304,346 2%
Liabilities and Shareholders’ EquityLiabilities in respect of money market paper $ 12,305 $ 8,335 48%
Due to banks 127,113 160,749 (21%)
of which securities borrowing and
repurchase agreements 58,901 66,893 (12%)
Due to other business units 27,553 10,846 154%
Due to customers, in savings and
investment deposits 322 299 8%
Due to customers, other 67,621 71,237 (5%)
of which securities borrowing and
repurchase agreements 39,442 38,451 3%
Bonds and mortgage-backed bonds 23,299 12,803 82%
Accrued expenses and deferred income 5,573 5,018 11%
Other liabilities 37,413 26,969 39%
Valuation adjustments 1,880 1,539 22%
Total liabilities 303,079 297,795 2%
Total shareholders’ equity 7,274 6,551 11%
Total Liabilities and Shareholders’ Equity $ 310,353 $ 304,346 2%
(1) The above balance sheets are based on Swiss accounting rules for banks. They include allocations from
the real estate units within Credit Suisse Group.
(2) Shareholders’ equity at January 1, 1997, includes the pro forma effect of CHF500 million preferred stock
issuance which occurred on March 31, 1997.
M a n a g e m e n t ’s Discussion and Analysis
of Financial Condition and Results of Operations
I N T R O D U C T I O N
Credit Suisse First Boston (“CSFB”) is a global investment
banking enterprise with principal activities in trading secu-
rities, derivative products and other financial assets as well
as capital markets, advisory services and corporate lend-
ing. CSFB is the investment banking business unit of
Credit Suisse Group (“CSG”) (formerly CS Holding).
It commenced operations in its current form on January 1,
1997 following the restructuring of CSG. CSFB’s compo-
nent parts were not managed or reported as a single
entity prior to 1997 and the restructuring involved complex
customer business, and balance sheet reallocations of
C S G ’s entities.
Credit Suisse First Boston (the “Bank”), a Swiss
bank and a subsidiary of CSG, is the new name of the
Swiss bank formerly known as Credit Suisse. The
Bank contains the activities of the CSFB and Asset
Management business units of CSG. Shown herein is
financial data for the CSFB business unit which consti-
tutes almost 99% of the assets of the Bank as of
December 31, 1997. More detailed information on the
Bank and related unqualified audit opinion is contained in
the Annual Reports of CSG and the Bank, respectively.
There continue to be significant flows of business
and service among the entities of CSG.
Because of the complexities of the changes
described above, only limited pro forma income statement
data was published for individual business units for 1996
and no prior historical data was compiled. However, full
consolidated financial statements of CSG have been pub-
lished. Additionally, CSFB’s opening pro forma balance
sheet as at January 1, 1997, is presented herein without
a prior period comparison.
C S F B ’s activities are subject to various risks includ-
ing volatile trading markets and fluctuations in the volume
of market activity. CSFB’s results may also be impacted
by competitive factors. Consequently, CSFB’s earnings
may be subject to wide fluctuations. While the reporting
currency of the Bank is the Swiss Franc, CSFB primarily
manages its businesses based on a U.S. dollar functional
currency as presented herein and as prescribed by its
earnings and asset mix.
CSFB’s strategic plans contemplate further invest-
ments in its businesses through organic growth and selective
acquisition.
R E S U LTS OF OPERAT I O N S
C S F B ’s revenues for the year ended 1997 were $7.1 bil-
lion, 30% higher than pro forma 1996 revenues.
Revenues in 1997 increased over pro forma 1996 in each
of CSFB’s operating divisions. The sources of these divi-
sional revenues are primarily realized and unrealized net
trading gains, net interest income resulting from trading
and lending activities, and fee-based earnings from capital
markets activities, commissions on customer transactions
and advisory services. Divisional revenues are based on
Swiss accounting rules for banks as modified for revenue
presentation, the classification of execution, clearing and
brokerage costs as an expense as opposed to a contra
revenue, and CSFB’s internal management reporting
process in which revenues, including capital markets rev-
enues and interest costs, are allocated to divisional
results. Capital markets revenues are shared among
CIBD, Fixed Income and Equity. Divisional revenues for
the year ended December 31, 1997, and pro forma year
ended December 31, 1996, are as follows:
PRO FORMA P E R C E N T
($ MILLIONS) 1 9 9 7 1 9 9 6 I N C R E A S E
Fixed Income $ 3 , 3 7 9 $2 , 3 5 6 4 3 %
E q u i t y 1 , 2 1 2 8 3 4 4 5 %
C S F P 1 , 1 6 7 9 5 0 2 3 %
C I B D 1 , 4 7 9 1 , 3 6 8 8 %
O t h e r ( 1 0 9 ) ( 1 5 ) n / a
$ 7 , 1 2 8 $ 5 , 4 9 3 3 0 %
The geographic distribution of revenues and employees for
the year ended December 31, 1997, is as follows:
43Fixed Income
Revenues for the Fixed Income division increased in 1997
when compared to pro forma 1996, with ROE exceeding
30% in 1997, primarily due to significantly improved
results across most of the substantive product lines of the
division. Particularly good performance occurred in the
Principal Transactions Group (PTG) and the Emerging
Markets Group (EMG). Fixed Income revenues also
increased from improved results from trading high yield
corporate securities, global foreign exchange, and money
markets, offset, in part, by declines in trading govern-
ments and Swiss fixed income securities.
PTG purchases and originates whole loans and pro-
vides a full range of real estate-related advisory services.
In 1997 revenues increased primarily from asset securiti-
zations, increased net interest on a larger average loan
portfolio, and sales of real estate properties.
EMG underwrites and trades in fixed income securi-
ties and foreign exchange of a number of emerging
markets countries. In 1997 revenues increased primarily
from interest earned on a larger average trading portfolio
and improved trading results. These results were tem-
pered, in the fourth quarter of 1997, as a result of the
Asian economic crisis; however, notwithstanding these
events, revenues remained positive for the fourth quarter.
E q u i t y
Revenues for the Equity division increased in 1997 when
compared to pro forma 1996, with ROE exceeding 30%
in 1997, primarily as a result of significantly improved
results in customer-driven businesses, which include trad-
ing, commissions, and capital markets activities. These
revenues were particularly strong in the Eastern European
business, in Switzerland, and in the U.S. businesses.
Results also improved in the trading of convertibles and
risk arbitrage activities.
Equity revenues, inclusive of derivative-related
revenues included in CSFP and equity capital markets
included in CIBD, exceeded $1,450 million for the year
ended December 31, 1997.
C S F P
Revenues for CSFP increased in 1997 when compared to
pro forma 1996, with ROE exceeding 30% in 1997, pri-
marily as a result of improved results in the swaps and
options, commodities and asset trading, and credit deriva-
tives businesses, offset, in part, by declines in OTC equity
derivatives and foreign exchange derivatives; however,
both of these businesses produced positive revenues
in 1997.
C I B D
Although CIBD revenues as a whole increased only 8%
in 1997 as compared to pro forma 1996, investment
banking-generated revenues increased by 26%. These
increases were driven by improved results in equity and
fixed income capital markets activities as well as merger
and acquisition advisory.
The increases in investment banking revenues were
o ffset, in part, by declines in revenues from corporate
lending activities. These declines occurred principally as a
result of CSFB’s strategy, implemented in 1997, to reallo-
cate capital resources from corporate lending to other
businesses. During the fourth quarter of 1997, CSFB
completed a $5 billion securitization as part of this strategy.
CIBD revenues, inclusive of total debt and equity
capital markets revenues reflected in Fixed Income and
E q u i t y, exceeded $1,850 million for the year ended
December 31, 1997.
O t h e r
Losses in the Other division are primarily the result of
investments and transactions managed at the corporate
level, offset, in part, by revenues earned by the Private
Equity division. 1997 was a building year for the Private
Equity division, successfully hiring key people and closing
a large international fund.
Expenses
C S F B ’s aggregate expenses increased in 1997 as com-
pared to pro forma 1996, largely due to enhanced
profitability and growth. Staff costs increased primarily due
to increases in incentive performance compensation and
related payroll taxes, increases in the number of employ-
ees and contractors, and salary increases. These costs
remain in line with industry norms at 49% of revenues.
Execution, clearing, and brokerage increased in
1997 as compared to 1996, as a result of increased trad-
ing activity.
Other operating expenses primarily include costs for
technology and communication, occupancy, professional
services, and business development. The distribution of
other operating expenses for the year ended December
31, 1997, is as follows:
Other operating expenses increased in 1997 when
compared to pro forma 1996, primarily as a result of
increased professional services, communications and busi-
ness development costs associated with higher levels of
business in 1997. In addition, costs increased in 1997
due to investment fund placement fees incurred in 1997
associated with CSFB’s Private Equity activities, occupan-
cy costs associated with CSFB’s new facilities in New
York, and increased fees charged by CSG with respect to
certain infrastructure costs that relate to CSG and its sub-
s i d i a r i e s .
Write-Downs, Provisions, and Losses
Write-downs, provisions, and losses increased in 1997, as
compared to 1996, primarily as a result of credit provi-
sions. Credit provisions increased primarily due to the
adverse effect on loans outstanding in Asia resulting from
the economic crisis that occurred in that region in the
fourth quarter of 1997. CSFB’s credit provisions related
to Asia totaled approximately $450 million at December
31, 1997, which includes a precautionary provision of
$150 million charged to earnings at end-1997.
Approximately 90% of the overall provisions were estab-
lished for lending activities with the balance established
for counterparty risk of trading activities. Other than the
special Asia provision, CSFB’s loan provisions, charged
against 1997 earnings, totaled $102 million, representing
the expected loss amount (ACP) calculated by the credit-
plus-risk-management approach. Also contained in
write-downs, provisions, and losses are various litigation
provisions, including those related to the NASDAQ settle-
ment, which generally affected most firms in the securities
industry that participate in the OTC equity market making
business in the U.S.
Income Ta x e s
C S F B ’s effective income tax rate, excluding extraordi-
nary/exceptional items, was approximately 34% for the
year ended December 31, 1997. This rate represents a
blended rate of the various tax jurisdictions in which CSFB
o p e r a t e s .
Extraordinary/Exceptional Items
Extraordinary/exceptional items in 1997 primarily included
costs related to the acquisition of BZW ($165 million, net
of tax) and an IT provision for year 2000 compliance and
EMU conversion costs ($102 million, net of tax).
Extraordinary items also reflect additional costs associated
with the 1996 restructuring, offset, in part, by gains on
the sale of certain investments.
BZW Acquisitions
On November 12, 1997 CSFB entered into an agreement
to purchase the U.K. and Continental European equities,
equity capital markets, and mergers and acquisitions,
advisory businesses of BZW for GBP 100 million. These
businesses employed approximately 1,000 people (exclud-
ing temporary staff) as of December 31, 1997. Most of
the acquisition is being effected by means of asset pur-
chases, although entities are being purchased in the
Netherlands, Spain, and the U.K.
CSFB completed the acquisition of the U.K. and
Continental European mergers and acquisitions, advisory,
and equity capital markets businesses on December 31,
1997. CSFB also completed the acquisition of the
Continental European equity sales, trading and research
business, in stages, on January 30 and February 27,
1998. In addition, CSFB assumed management of the
U.K. equity sales, trading and research business under a
management services agreement with Barclays. This
arrangement, which covers front office personnel, will
operate until formal completion of the sales of those busi-
nesses to CSFB, which is scheduled to occur during the
first half of 1998. This formal completion is contingent
upon the fulfillment of certain conditions during this period.
In addition, CSFB has signed an agreement with
Barclays to acquire certain of BZW’s equity, equity capital
markets and mergers, and acquisitions advisory business-
es in Asia. Under the terms of the transaction, CSFB
acquired or will acquire certain Investment Banking, Equity
Capital Markets and Equity personnel in Hong Kong;
B Z W ’s 70% interest in an Equity joint venture in
Singapore; BZW’s Equity business in Taiwan; stock
exchange seats in Singapore, Hong Kong and Shanghai;
and additional personnel from Malaysia and Indonesia.
This acquisition is conditional upon CSFB obtaining all
requisite regulatory consents and approvals.
As a result of the timing described above, the bulk
of the acquisition was not completed in 1997, therefore it
has not been consolidated in CSFB’s financial statements
as of December 31, 1997. However, as management fully
expects that the acquisition of the remaining businesses
will formally be completed in 1998, a net of tax provision
of $165 million has been reflected in the financial state-
ments for BZW acquisition costs.
First Pacific Acquisition
In early 1998 CSFB agreed to acquire 75% of the com-
mon stock of First Pacific, which is an investment banking
firm with a leadership position in the equity markets in
Australia. The acquisition is subject to certain conditions,
including the receipt of regulatory approvals.
IT Provision
The IT charge, net of tax, of $102 million primarily repre-
sents a technology-related provision for anticipated year
2000 compliance and EMU conversion costs. These costs
include estimates for employee compensation, consul-
tants, hardware, and software.
LIQUIDITY AND CAPITAL RESOURCES
Assets and Leverage
CSFB maintains a liquid balance sheet with a majority of
the Firm’s assets consisting of marketable securities
inventories and other trading positions and collateralized
financing agreements. Collateralized financing agreements
consist of resale agreements and securities lending
predominantly secured by government and corporate
45
obligations. Levels of trading inventory and collateralized
financing agreements are dependent on market condi-
tions, volume of activity, and customer needs. Accordingly,
C S F B ’s total assets and financial leverage can fluctuate
s i g n i f i c a n t l y.
CSFB, as part of its corporate and investment bank-
ing activities, also maintains a loan portfolio. In addition,
as part of CSFB’s fixed income activities, trading invento-
ries include emerging markets positions, whole loans, and
high yield securities. CSG and its subsidiaries also make
merchant banking investments through CSFB’s Private
Equity division.
In U.S. dollar terms, total assets did not change
significantly at December 31, 1997, as compared to
pro forma January 1, 1997. CSFB’s ability to support
increases in total assets is a function of its ability to obtain
short-term secured and unsecured funding and access
long-term capital markets.
Funding and Capital Strategy
The Bank has a broad-based worldwide funding franchise.
Global funding is managed by a centralized financing unit,
which oversees local funding operations, including those
of CSFB. This global funding function provides coordina-
tion and control of pricing and funding strategies, while
the local market presence provides for investor diversity
and access to unique market opportunities. The Bank
aims to continually broaden its funding base by geography,
i n v e s t o r, issuing entity, and instrument type.
The Bank’s funding sources include interest-bearing
and non interest-bearing deposits, commercial paper, cer-
tificates of deposit, federal funds purchased, long-term
debt, capital securities, and shareholders’ equity. The
Bank places particular emphasis on a large base of well-
diversified and stable fiduciary deposits for its day-to-day
funding needs. Another important source of day-to-day
funding is repurchase agreements, primarily involving U.S.
government and agency securities.
To provide alternative funding sources, the Bank,
through its subsidiaries, has renewed a committed revolv-
ing credit facility with various banks that, if drawn upon,
would bear interest at short-term rates. The facility is
for general corporate purposes. This facility provides for
borrowings up to $1.575 billion during 1998. As of the
date hereof, there are no amounts outstanding under the
f a c i l i t y.
The Bank and its subsidiaries issue long-term debt
through various U.S. and Euro Medium-Term Note
Programs as well as syndicated and privately placed off e r-
ings around the world. To satisfy Swiss and local
regulatory capital needs of its regulated subsidiaries, the
Bank raises subordinated long-term borrowings. In 1997,
to provide sufficient regulatory capital resources required
to implement its strategic objectives, the Bank issued
approximately $1.7 billion of perpetual junior subordinated
debt. At December 31, 1997, the Bank had long-term
debt (including the current portion) of $24.3 billion, with
$8.8 billion representing subordinated debt. The Bank
expects to continue to access the capital markets in sup-
port of the Bank’s existing businesses, as well as any new
business initiatives and the resultant capital and funding
r e q u i r e m e n t s .
In selecting the most appropriate funding sources at
any point in time, such factors as market conditions, inter-
est rate levels, liquidity needs, and maturity profile
objectives are considered. Further, in order to manage
interest rate, currency, and other risks associated with the
above borrowings, the Bank has entered into various
derivative transactions.
The Bank’s access to external financing is depen-
dent on the short- and long-term credit ratings of the
Bank and certain of its subsidiaries. The cost and avail-
ability of external funding is generally a function of the
ratings. As of the date hereof, the Bank’s debt ratings
were as follows:
LONG-TERM
SENIOR JUNIOR
SHORT-TERM SENIOR SUBORDINATED SUBORDINATED
M o o d y ’s P - 1 A a 3 A 1 A 2
S & P A - 1 + A A A A - A +
Fitch IBCA Ltd. F - 1 + A A A A - A +
B a n k Wa t c h * T B W- 1 A A A A A + A A
*As of February 10, 1998, BankWatch placed the Bank’s long-term
debt ratings under review for possible downgrade.
On March 30, 1998, the Bank paid a dividend of
850 million Swiss Francs to its shareholders.
The Bank and its subsidiaries are subject to various
capital requirements imposed by various regulatory bodies
around the world, including the Swiss Banking
Commission. At December 31, 1997, the Bank was in
compliance with these requirements. At December 31,
1997, the Bank had a BIS Tier 1 and total capital ratio of
8.5% and 14.9%, respectively. Beginning January 1,
1998, the Bank will comply with the new BIS and EBK
methodologies for computing capital ratios, which are
based, in part, on value at risk computations for trading
p o s i t i o n s .
Risk Management
The general risk management policy of CSG serves as the
basis for the Bank’s risk management programs. The pri-
mary responsibility for risk management lies with the
B a n k ’s (as well as CSFB’s) senior business line man-
agers. They are held accountable for all risks associated
with their businesses, including counterparty risk, market
risk, liquidity risk, legal risk, and operating risk, and are
responsible for supplementing the Firm’s independent
controls by maintaining adequate internal control systems.
The risk management programs are designed to ensure
that there are sufficient independent controls to monitor
all risks properly.
The Board of Directors is responsible for determin-
ing the general risk policy and risk management strategy
of the Bank. The Chairman’s Committee of the Board of
Directors approves the overall market risk ceiling, reviews
the Bank’s risk exposure on a quarterly basis, and
approves country limits and other risk ceilings.
Risk Management at CSFB
The policies and procedures regarding risk and capital
allocation within CSFB are established by CSFB’s Capital
Allocation and Risk Management Committee (“CARMC”).
CARMC is chaired by a senior member of Credit Risk
Management and includes the Chief Executive Off i c e r,
the Global Chief Risk Off i c e r, the Chief Financial Off i c e r,
the Head of Market Risk Management, the Chief Credit
O ff i c e r, and the heads of the various business divisions
of CSFB.
CARMC approves capital management procedures,
guidelines, and risk limits, and allocates capital to the indi-
vidual divisions. This allocation is an important element in
setting upper limits on levels of activity in CSFB’s various
businesses that create counterparty and market risks.
CARMC also is involved with and approves business deci-
sions that, in its view, involve greater than normal
business risk.
C A R M C ’s policies are implemented by CSFB’s
Credit Risk Management (“CRM”) and Market Risk
Management (“MRM”) functions.
Credit Risk Management
CRM is headed by the Chief Credit Officer who reports to
the CEO. CRM is responsible for approving all credit risk
assumed by CSFB. This includes loans and loan related
credit risk, counterparty credit risk, and country risk. In
addition, CRM has oversight responsibility for concentrat-
ed positions in trading inventory. Unusual risks and
specific policies and procedures are reviewed and
approved by the Credit Policy Committee, which is chaired
by the Chief Credit Off i c e r.
C R M ’s responsibilities are carried out by senior off i-
cers within the Credit Risk Management function who are
aligned with each of CSFB’s major businesses. Each of
these CRM Units is organized along regional lines, and in
some cases further stratified along industry or other lines
of specialty, for example leveraged and project finance.
Every credit is rated by CRM staff, and approval
authorities are granted relative to staff experience, rating
of the counterparty, and size and tenor of the transaction.
These authorities are delegated by the Chief Credit
O ff i c e r, who in turn has been granted the full legal lending
authority of CSFB. CRM also is responsible for assessing
the overall credit portfolio and recommending credit provi-
sions as appropriate.
Market Risk Management
The MRM function is led by the Head of Market Risk
Management, who reports directly to the CFO. The inde-
pendent Market Risk Management department
consolidates exposures arising from all trading portfolios
and geographical centers on a daily basis. The Bank uses
two methodologies to measure and manage the market
risks that the Bank may undertake: the “value-at-risk”
concept and scenario analysis. The value-at-risk measures
the 99th percentile greatest loss that may be expected on
the portfolio over a ten-day holding period using market
movements determined from historical data. The scenario
analysis method estimates the potential loss arising from
the portfolio after moving market parameters. These
movements are derived from past extreme events and
hypothetical scenarios.
Market risk is managed and controlled at three
levels: (i) senior management is responsible for monitoring
the Bank’s market risk utilizations, exposures, and risk-
adjusted performance, (ii) trading management is
responsible for actively managing its positions against
approved risk limits, and (iii) MRM is responsible for moni-
toring exposures against approved risk limits, obtaining
appropriate approval for limit excesses, and ensuring that
trading management reduces exposures to within limits
following limit excesses when appropriate.
Management of Other Risks
Other business-specific risks are managed primarily
through designated groups and committees within the dif-
ferent divisions. For example, the Investment Banking
Committee reviews and approves most investment banking
transactions, with a special focus on risk (such as legal
and reputational risks) that are inherent to such transac-
tions. A similar risk management program has been
established for the Private Equity division with the forma-
tion of an Investment Committee. Before any new activity
is undertaken, the New Business Committee reviews the
proposed business and its structure and infrastructure
requirements. This Committee is designed to ensure that
all risks (such as operational risks) that are inherent to
such a venture are identified and addressed appropriately.
This Committee is composed of the senior managers
responsible for the Finance, Administration and
Operations functions of CSFB.
To supplement its control environment, CSFB has an
oversight function that is structured regionally and is
designed to complement CSFB’s functional organization.
The oversight function consists of (i) selected Executive
Board members who have overall responsibility for over-
sight in their respective regions, (ii) regional oversight
managers who assist the Executive Board members with
this responsibility, and (iii) a country manager in each
country who manages local oversight issues. Regional
Oversight and Country Management serve as an additional
line of control and concentrate on regulatory and reputa-
tional issues, supervising legal entities and supporting
management in its efforts to improve the control environ-
ment. This oversight function works with business and
Finance, Administration and Operations executives in
monitoring and enhancing CSFB’s controls. Various con-
trol committees act as a clearing house for certain control
i s s u e s .
Additional disclosure on the Bank’s risk manage-
ment practices is contained in the Bank’s Annual Report.
47
The Americas
OFFICE LOCAT I O N S
AtlantaGeorgia Pacific Center133 Peachtree Street N.E.40th FloorAtlanta, GA 30303-1841U.S.A.Voice 1 404 656 9500Fax 1 404 522 3043
Boston100 Federal Street30th FloorBoston, MA 02110-1802U.S.A.Voice 1 617 556 5500
Buenos AiresEsmeralda 130 - Piso 221035 Buenos AiresArgentinaVoice 54 1 394 3100Fax 54 1 325 4717
ChicagoAT&T Corporate Center227 West Monroe StreetChicago, IL 60606-5016U.S.A.Voice 1 312 750 3000
Houston600 Travis StreetSuite 3030Houston, TX 77002-3003U.S.A.Voice 1 713 220 6700Fax 1 713 236 9222
Los AngelesWells Fargo Tower333 South Grand AvenueSuite 2200Los Angeles, CA 90071-1526U.S.A.Voice 1 213 253 2000
633 West Fifth Street64th FloorLos Angeles, CA 90071U.S.A.Voice 1 213 955 8200Fax 1 213 955 8245
MexicoCampos Eliseos #345, Piso 9Edificio OmegaCol. Chapultepec Polanco11560 Mexico, D.F.MexicoVoice 52 5 202 60 00Fax 52 5 202 66 00
Montreal1250 Rene-Levesque
Boulevard WestSuite 3935Montreal H3B 4W8CanadaVoice 1 514 933 8774Fax 1 514 933 7699
NassauScotiabank BuildingRawson SquareP.O. Box N-4928Nassau BahamasVoice 1 242 356 8100Fax 1 242 326 6589
New YorkEleven Madison AvenueNew York, NY 10010-3629U.S.A.Voice 1 212 325 2000
CSFP Capital Inc.Voice 1 212 325 2000Fax 1 212 325 8042
Palo Alto1510 Page Mill RoadSuite 2Palo Alto, CA 94304-1135U.S.A.Voice 1 650 846 6600Fax 1 650 846 6660
Philadelphia11 Penn Center26th FloorPhiladelphia, PA 19103-2929U.S.A.Voice 1 215 851 1000Fax 1 215 851 0352
Portland85 Exchange StreetSuite 201Portland, ME 04101U.S.A.Voice 1 207 780 6210Fax 1 207 780 6735
San Francisco201 Spear Street17th and 18th FloorsSan Francisco, CA 94105U.S.A.Voice 1 415 836 7600Fax 1 415 836 7751
SantiagoAv. Andres Bello 277721st Floor, Office 2101Santiago – Las Condes ChileVoice 56 2 203 3190Fax 56 2 203 3196
Sao PauloAv. Presidente Juscelino
Kubitschek, 506th Floor04543-011 Sao Paulo, SPBrazilVoice 55 11 3048 2900
TorontoCredit Suisse Centre525 University AvenueToronto, Ontario M5G 2K6CanadaVoice 1 416 351 3500Fax 1 416 351 3630
Africa, Europe
and Middle East
Luxembourg56 Grand RueB.P. 40L-2010 LuxembourgLuxembourgVoice 352 46 00 111Fax 352 47 55 41
MadridPaseo De Recoletos17-Planta 128004 MadridSpainVoice 34 1 532 03 03Fax 34 1 532 35 60
MilanVia Bigli 2120121 MilanoItalyVoice 39 2 7702 1Fax 39 2 7702 2200
Via Turati 920121 MilanoItalyVoice 39 2 6374 1Fax 39 2 6596 489
Moscow5 Nikitsky Pereulok(Formerly Belinski Street)Moscow 103 009RussiaVoice 7 501 967 8200Fax 7 501 967 8210
CSFPVoice 7 501 967 8787/8727Fax 7 501 967 8722
Paris21 boulevard de la MadeleineF-75038 ParisCedex 01FranceVoice 33 1 40 76 8888Fax 33 1 42 56 1082
PragueStaromestske Nam. 15110 00 Prague 1Czech RepublicVoice 420 2 248 10937Fax 420 2 248 10996
AmsterdamJohannes Vermeerstraat 91071 DK AmsterdamThe NetherlandsVoice 31 20 575 4444Fax 31 20 575 4455
(Nederland) NVAtriumStrawinskylaan 30531077 ZX AmsterdamThe NetherlandsVoice 31 20 5045 145Fax 31 20 5045 199
BrusselsS.A. Stephanie SquareBusiness Centre N.V.Avenue Louise 65Box 111050 BrusselsBelgiumVoice 32 2535 7854Fax 32 2535 7700
BudapestNagy Jeno U.12H-1126 BudapestHungaryVoice 36 1 202 2188Fax 36 1 201 9196
Cairo32 Haroon StreetP.O. Box 224DokkiCairo EgyptVoice 20 2 349 9760Fax 20 2 361 5136
FrankfurtMesseTurm60308 Frankfurt am MainGermanyVoice 49 69 75 38 0Fax 49 69 75 38 2444
Geneva59 Route De ChancyCH-1213 Petit-LancySwitzerlandVoice 41 22 394 70 00Fax 41 22 792 40 72
GuernseyHelvetia CourtSouth EsplanadeP.O. Box 589St Peter Port, Guernsey
GY1 6LUVoice 44 1481 724 574Fax 44 1481 711 940
HelsinkiEtelaranta 144th FloorFIN-00130 HelsinkiFinlandVoice 358 9 622 2882Fax 358 9 622 1535
JohannesburgSandton City Office Tower9th Floor5th Street, Corner Rivonia Rd2196 SandownRepublic of South AfricaVoice 27 11 884 67 41Fax 27 11 884 71 21
Kiev34 Chervonoarmiyska Street252004 KievUkraineVoice 380 44 247 5787Fax 380 44 247 5790
Limassol199 Christodoulou
Hadjipavolou AvenueP.O. Box 75303316 LimassolCyprusVoice 357 534 12 44Fax 357 581 74 24
LondonOne Cabot SquareLondon E14 4QJUnited KingdomVoice 44 171 888 8888Fax 44 171 888 1600
CSFPVoice 44 171 888 2000Fax 44 171 888 1600
Tashkent1 Turab Tula Street700003 TashkentRepublic of UzbekistanVoice 7 3712 40 6166Fax 7 3712 40 6177
TehranNo. 309, First FloorShahid Vahid Dastjerdi Ave.Between Africa And Vali AsrIR-19686 TehranIranVoice 98 21 878 7655Fax 98 21 878 5215
ViennaPalais CorsoMahlerstrasse 12-51010 ViennaAustriaVoice 43 1 512 3023Fax 43 1 512 302323
WarsawFIM Tower, XIII FloorAl Jerozolimskie 8102-001 WarsawPolandVoice 48 22 695 0050Fax 48 22 695 0055
ZugBahnhofstrasse 17P.O. Box 234CH-6301 ZugSwitzerlandVoice 41 41 727 97 00Fax 41 41 727 97 10
ZurichUetlibergstrasse 231P.O. Box 900CH-8070 ZurichSwitzerlandVoice 41 1 333 55 55Fax 41 1 333 55 99
CSFPUetlibergstrasse 231Postfach 700 (FPL2)8070 ZurichVoice 41 1 332 6400Fax 41 1 332 6404
49
OsakaYodokodai-2 Building, 6th Floor4-2-15 Bakuro-MachiChuo-KuOsaka 541JapanVoice 81 6 243 0789Fax 81 6 243 0079
SeoulHanwha Building13th Floor111-5 Sokong-Dong, Chung-KuSeoul 100-070KoreaVoice 82 2 3707 3700Fax 82 2 3707 3881
Shanghai17th Floor, South TowerStock Exchange Building528 Pudong South RoadPudong, ShanghaiPeople’s Republic of ChinaVoice 86 21 6881 8418Fax 86 21 6881 8417
Singapore80 Raffles Place #49-01UOB Plaza 1Singapore 048624Voice 65 538 6322Fax 65 531 2708
6 Shenton Way#11-08 DBS Tower 2Singapore 068809Voice 65 226 5088Fax 65 420 4868
SydneyGateway Level 311 Macquarie PlaceSydney, New South Wales
2000AustraliaVoice 61 2 9394 4400Fax 61 2 9394 4382
CSFPVoice 61 2 9394 4515Fax 61 2 9394 4388
Taipei14th Floor205 Tun Hwa North Road Taipei TaiwanVoice 886 2 2713 5559Fax 886 2 2717 0803
TokyoShiroyama Hills26th Floor4-3-1 ToranomonMinato-KuTokyo 105JapanVoice 81 3 5404 9000Fax 81 3 5404 9800
CSFP27th FloorVoice 81 3 5403 4000Fax 81 3 5403 4077/4088
CS Tower1-11-30 AkasakaMinato-KuTokyo 107JapanVoice 81 3 3589 3636Fax 81 3 3224 4040
WellingtonCaltex Tower282-292 Lambton QuayLevel 10Wellington New ZealandVoice 64 4 474 4400Fax 64 4 474 4051
A s i a / P a c i f i cAucklandCoopers & Lybrand Tower23-29 Albert StreetLevel 20Auckland New ZealandVoice 64 9 302 5500Fax 64 9 302 5580
BangkokAbdulrahim Place, 14th Floor990 Rama IV RoadSilom, BangrakBangkok 10500ThailandVoice 66 2 636 1546Fax 66 2 636 1553
BeijingSilver Tower31st Floor2 Dong San Huan Bei RoadBeijing 100027People’s Republic of ChinaVoice 86 10 6410 6611Fax 86 10 6410 6133
Hong KongThree Exchange Square22nd Floor, GPO Box 5688 Connaught Place CentralHong Kong Voice 852 2101 6000Fax 852 2101 7990
CSFP13th FloorVoice 852 2101 6000Fax 852 2101 7792
JakartaDanamon Aetna Life Building24th FloorJalan Jenderal
Sudirman Kav.45Jakarta 12930IndonesiaVoice 62 21 577 0762Fax 62 21 577 0761
Kuala LumpurMenara Keck SengSuite 27-02, 27th Floor203 Jalan Bukit Bintang55100 Kuala LumpurMalaysiaVoice 60 3 242 5199Fax 60 3 241 6199
LabuanMain Office TowerLevel 10 (B)Financial Park Labuan87000 Labuan F.T.MalaysiaVoice 60 87 425 381Fax 60 87 425 384
ManilaSGV I Building14th Floor6760 Ayala Avenue1226 Makati CityPhilippinesVoice 63 2 894 8101Fax 63 2 891 0543
Melbourne101 Collins Street27th FloorMelbourne, Victoria 3000AustraliaVoice 61 3 9280 1666Fax 61 3 9280 1890
Mumbai (FormerlyBombay)35/39 Free Press House3rd Floor215 Free Press Journal MargNariman PointMumbai 400 021IndiaVoice 91 22 284 6888Fax 91 22 285 1949
The terms “Credit Suisse First Boston,” “CSFB,” “CSFP,” “Firm,” “we,” and “our” in this Annual Review typically refer to the business unit (versus the legal entity, which has the same name but also includes Credit Suisse Asset Management and certain real estate assets and which isreferred to herein as the “Bank”).
This Annual Review was prepared by the Corporate Communications Department of Credit Suisse First Boston and includes the most currentinformation through April 1, 1998. Additional copies and/or additional information can be obtained on the Internet at www.csfb.com or throughCorporate Communications in New York, London, or Hong Kong.
Design: RDA Design, NYC© Copyright 1998, Credit Suisse First Boston Photography: Shonna Va l e s k aIssued in the United Kingdom by Credit Suisse First Boston (Europe) Ltd: regulated by SFA. Printed on recycled paper
Uetlibergstrasse 231
P.O. Box 900
CH-8070 Zurich
Switzerland
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London E14 4QJ
United Kingdom
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New York, NY 10010-3629
USA