Exhibit 99.1
CREDIT SUISSE FIRST BOSTON (USA), INC. AND SUBSIDIARIES
Unaudited Pro Forma Condensed Consolidated Statement of Financial Condition
As of December 31, 2002
(In millions)
| | Historical | Pro Forma Adjustments | Pro Forma | |||||||
|---|---|---|---|---|---|---|---|---|---|---|
| ASSETS | ||||||||||
| Cash and cash equivalents | $ | 477 | $ | 2,480 | (a) | $ | 4,374 | |||
| 900 | (d) | |||||||||
| 517 | (f) | |||||||||
| Collateralized short-term financings: | ||||||||||
| Securities purchased under agreements to resell | 51,996 | 51,996 | ||||||||
| Securities borrowed | 71,296 | 71,296 | ||||||||
| Receivables: | ||||||||||
| Customers | 829 | 829 | ||||||||
| Brokers, dealers and other | 7,012 | (480 | )(a) | 5,115 | ||||||
| (900 | )(d) | |||||||||
| (517 | )(f) | |||||||||
| Financial instruments owned: | ||||||||||
| U.S. government and agencies | 31,891 | 31,891 | ||||||||
| Corporate debt | 12,121 | 12,121 | ||||||||
| Mortgage whole loans | 9,465 | 9,465 | ||||||||
| Equities | 9,706 | 9,706 | ||||||||
| Commercial paper | 619 | 619 | ||||||||
| Private equity and other long-term investments | 873 | 873 | ||||||||
| Derivatives contracts | 3,675 | 3,675 | ||||||||
| Other | 3,211 | 3,211 | ||||||||
| Net deferred tax asset | 1,585 | 1,585 | ||||||||
| Office facilities at cost, net of accumulated depreciation and amortization | 482 | 482 | ||||||||
| Goodwill and other intangible assets | 329 | 329 | ||||||||
| Loans receivable from parent and affiliates | 17,173 | 17,173 | ||||||||
| Other assets and deferred amounts | 2,098 | 2,098 | ||||||||
| Assets held for sale | 11,547 | (11,547 | )(c) | — | ||||||
| Total Assets | $ | 236,385 | $ | (9,547 | ) | $ | 226,838 | |||
See accompanying notes.
CREDIT SUISSE FIRST BOSTON (USA), INC. AND SUBSIDIARIES
Unaudited Pro Forma Condensed Consolidated Statement of Financial Condition
As of December 31, 2002
(In millions, except per share data)
| | Historical | Pro Forma Adjustments | Pro Forma | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||
| Commercial paper and short-term borrowings | $ | 11,933 | $ | 11,933 | ||||||||
| Collateralized short-term financings: | ||||||||||||
| Securities sold under agreements to repurchase | 107,898 | 107,898 | ||||||||||
| Securities loaned | 24,178 | 24,178 | ||||||||||
| Payables: | ||||||||||||
| Customers | 2,912 | 2,912 | ||||||||||
| Brokers, dealers and other | 8,692 | 8,692 | ||||||||||
| Financial instruments sold not yet purchased: | ||||||||||||
| U.S. government and agencies | 22,706 | 22,706 | ||||||||||
| Corporate debt | 3,315 | 3,315 | ||||||||||
| Equities | 3,240 | 3,240 | ||||||||||
| Derivatives contracts | 2,178 | 2,178 | ||||||||||
| Other | 335 | 335 | ||||||||||
| Obligation to return securities received as collateral | 896 | 896 | ||||||||||
| Accounts payable and accrued expenses | 3,194 | 543 | (b) | 3,737 | ||||||||
| Other liabilities | 3,150 | 3,150 | ||||||||||
| Long-term borrowings | 23,094 | 23,094 | ||||||||||
| Liabilities held for sale | 10,947 | (10,947 | )(c) | — | ||||||||
| Total liabilities | 228,668 | (10,404 | ) | 218,264 | ||||||||
| Stockholders' Equity: | ||||||||||||
| Preferred stock, 50,000,000 shares authorized: | ||||||||||||
| Series B Preferred Stock, at $50.00 per share liquidation preference (88,500 shares issued and outstanding) | 4 | 4 | ||||||||||
| Common Stock ($0.10 par value; 50,000 shares authorized; 1,100 shares issued and outstanding) | — | — | ||||||||||
| Paid-in capital | 6,717 | 6,717 | ||||||||||
| Retained earnings | 1,152 | 857 | (b) | 2,009 | ||||||||
| Accumulated other comprehensive loss | (156 | ) | (156 | ) | ||||||||
| Total stockholders' equity | 7,717 | 857 | 8,574 | |||||||||
| Total Liabilities and Stockholders' Equity | $ | 236,385 | $ | (9,547 | ) | $ | 226,838 | |||||
See accompanying notes.
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CREDIT SUISSE FIRST BOSTON (USA), INC. AND SUBSIDIARIES
Unaudited Pro Forma Condensed Consolidated Statement of Operations
Year Ended December 31, 2002
(In millions)
| | Historical | Pro Forma Adjustments | Pro Forma | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenues: | |||||||||||
| Principal transactions-net | $ | (467 | ) | $ | (467 | ) | |||||
| Investment banking and advisory | 2,438 | 2,438 | |||||||||
| Commissions | 1,205 | 1,205 | |||||||||
| Interest and dividends, net of interest expense | 2,028 | 86 | (e) | 2,114 | |||||||
| Other | 535 | 535 | |||||||||
| Total net revenues | 5,739 | 86 | 5,825 | ||||||||
| Expenses: | |||||||||||
| Employee compensation and benefits | 3,045 | 3,045 | |||||||||
| Occupancy and equipment rental | 445 | 445 | |||||||||
| Brokerage, clearing and exchange fees | 264 | 264 | |||||||||
| Communications | 194 | 194 | |||||||||
| Professional fees | 225 | 225 | |||||||||
| Merger-related costs | 338 | 338 | |||||||||
| Other operating expenses | 919 | 919 | |||||||||
| Total expenses | 5,430 | — | 5,430 | ||||||||
| Income (loss) from continuing operations before provision (benefit) for income taxes, extraordinary items and cumulative effect of a change in accounting principle | 309 | 86 | 395 | ||||||||
| Income tax provision (benefit) | 137 | 30 | (e) | 167 | |||||||
| Income (loss) from continuing operations before extraordinary items and cumulative effect of a change in accounting principle | $ | 172 | $ | 56 | $ | 228 | |||||
See accompanying notes.
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CREDIT SUISSE FIRST BOSTON (USA), INC. AND SUBSIDIARIES
Notes to Unaudited Pro Forma Condensed Consolidated Statement of Financial Condition
and Unaudited Pro Forma Condensed Consolidated Statement of Operations
Credit Suisse First Boston (USA), Inc. and subsidiaries (the "Company") has entered into a definitive agreement (the "Agreement") to sell the Pershing unit, a global leader in financial services outsourcing solutions and investment-related products ("Pershing"), to The Bank of New York Company, Inc. for $2 billion in cash, the repayment of a $480 million subordinated loan and a contingent payment of up to $50 million based on future performance. The transaction is expected to close in the first half of the year, subject to regulatory approvals and other conditions.
The assets and liabilities of Pershing as of December 31, 2002 have been presented as "Assets held for sale" and "Liabilities held for sale," respectively, in the unaudited pro forma condensed consolidated statement of financial condition. The results of operations for Pershing for the year ended December 31, 2002 are not included in the unaudited pro forma condensed consolidated statement of operations, which presents our results from continuing operations. The unaudited pro forma financial information should be read together with our audited consolidated financial statements and other information included in our Annual Report on Form 10-K for the year ended December 31, 2002 filed with the Securities and Exchange Commission. The results of operations for Pershing for all periods have been presented as "Discontinued operations" in the consolidated statements of operations included as part of such audited consolidated financial statements.
The unaudited pro forma condensed consolidated statement of financial condition of the Company as of December 31, 2002 presents the consolidated financial condition of the Company as though the disposition of Pershing had occurred on December 31, 2002. The unaudited pro forma condensed consolidated statement of operations of the Company for year ended December 31, 2002 presents the results of operations of the Company as though the disposition of Pershing had occurred on January 1, 2002. The following unaudited pro forma adjustments are based on available information and on assumptions which management believes are reasonable. The unaudited pro forma financial information is presented for illustrative purposes only and does not purport to represent what the Company's financial condition and results of operations actually would have been had the disposition of Pershing been completed on the dates indicated or to project the Company's financial position or results of operations for any future date or period. The unaudited pro forma financial information does not give effect to any events or adjustments other than those described in the notes.
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No pro forma adjustments have been made to the unaudited pro forma condensed consolidated financial statements to reflect securities clearing, execution and related service arrangements that will be entered into in connection with the disposition. These arrangements are to be on terms that are substantially similar to the current arrangements between the Company and Pershing and would therefore not be expected to have a material impact on the unaudited pro forma condensed consolidated statement of operations of the Company for the year ended December 31, 2002.
The deferred tax impact of our pro forma adjustments was not material and therefore no pro forma adjustments were made to the unaudited pro forma condensed consolidated statement of financial condition.
The unaudited pro forma condensed consolidated statement of operations does not include the estimated pre-tax gain of $1,400 million, estimated selling expenses of $51 million and estimated income taxes of $492 million from the disposition as the disposition is a material nonrecurring event. The gain is expected to be reflected in the consolidated statement of operations of the Company for the fiscal year ended December 31, 2003.
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