Exhibit 99.1
FOR IMMEDIATE RELEASE
MEDIA CONTACT: INVESTOR CONTACT:
Catherine M. Conroy Kevin Zuccala
212-892-3275 212-892-4693
DLJ POSTS STRONGEST QUARTER EVER
FIRST QUARTER NET DOUBLES TO $245 MILLION, OR $1.72 PER SHARE
NEW YORK, NY - APRIL 19, 2000 - Donaldson, Lufkin & Jenrette, Inc.
(NYSE: DLJ) today reported the strongest quarterly earnings ever in the history
of the 40-year-old investment bank.
DLJ said today that its net income for the first quarter of 2000 was a
record $245.2 million, or $1.72 per diluted share. These results were more than
double the $121.7 million, or $0.84 per diluted share, reported for the first
quarter of 1999, and were 28 percent greater than the previous quarterly record
of $191.2 million reported for the fourth quarter of 1999. DLJ's return on
average equity for the first quarter of 2000 was 26.4 percent and book value per
common share at March 31, 2000 was $29.35.
In a joint statement, Joe L. Roby, President and Chief Executive
Officer of Donaldson, Lufkin & Jenrette, Inc., and John S. Chalsty, DLJ's
Chairman, said, "This was a blockbuster quarter for DLJ! Revenue growth was
impressive across the board and margins and returns improved substantially. All
of our major business units had operating results well ahead of last year's
first quarter, and significant progress was made in the development of our
international businesses. While DLJ's international businesses were not
profitable in the aggregate, important strides toward profitability were made in
the first quarter. Our new international equity business achieved profitability
after only five quarters of operations."
DLJ was once again the world's number-one-ranked underwriter of
high-yield bonds with a market share of 19.2 percent.
FIRST QUARTER REVENUE SUMMARY
DLJ's total revenues for the first quarter of 2000 increased 67 percent
to $2.5 billion. Net revenues, or total revenues minus interest expense, rose 66
percent to $1.9 billion. Commission revenues increased 68 percent to $472.0
million, while underwriting income declined 2 percent to $250.6 million. Fee
income increased 47 percent to $422.0 million, and trading gains more than
doubled, rising 121 percent to $384.8 million. Investment gains from DLJ's
merchant banking and venture capital businesses increased dramatically to $129.9
million for the first quarter of this year.
FIRST QUARTER HIGHLIGHTS
STRONG WORLDWIDE EQUITY VOLUME BOOSTS DLJ'S CLEARING, ONLINE, RETAIL
AND INSTITUTIONAL EQUITY BUSINESSES: DLJ's Financial Services Group, which
encompasses its Pershing correspondent clearing business, as well as its online
and traditional brokerage and asset management businesses, led the firm in
profitability for the first quarter of 2000. The Financial Services Group
generated net revenues of $675.5 million, an increase of 66 percent versus the
comparable quarter a year ago, and earned record pretax profits of $170.5
million - 88 percent greater than in the first quarter of 1999. Included in this
record performance are results for DLJdirect, which turned in the strongest
quarter ever in its 12-year history and earned pretax profits of $25.5 million
on net revenues of $114.2 million. DLJ's Pershing correspondent clearing
business generated net revenues of $367.2 million in the first quarter. As of
March 31, 2000, Pershing maintained 3.4 million individual investment accounts
holding $466 billion of assets for its 650 correspondent customers. Net revenues
earned by DLJ's Investment Services Group, a worldwide network of 440 investment
professionals, who serve the needs of high-net-worth individual investors,
increased 67 percent to $158.5 million.
Benefiting from similar trends in worldwide equity volume, DLJ's Global
Institutional Equities Group doubled its net revenues to $450.0 million and saw
its first-quarter pretax profits increase nearly threefold to $94.1 million. Net
revenues generated by the group's U.S. institutional equities business rose 65
percent to $280.3 million. Revenues generated by its new International Equities
business grew more than threefold to $112.1 million; after operating for only
five quarters, this new business attained profitability for the first time in
the first quarter of 2000. DLJ's International Equities department employs more
2
than 300 individuals around the world, who provide institutional investors with
research, sales and trading services in non-U.S. equities.
STRONG M&A FEES AND SURGING INVESTMENT GAINS DRIVE DLJ'S BANKING GROUP:
DLJ's Banking Group generated net revenues of $548.0 million during the first
quarter of 2000, approximately 70 percent more than for the comparable quarter a
year ago. The group's pretax profits nearly doubled, rising to $154.4 million.
The firm's global mergers and acquisitions practice was a major contributor to
the group's fee income, which rose 45 percent over the first quarter a year ago.
In initial public offerings, DLJ lead managed its largest initial
public offering ever during the first quarter of 2000: a EURO1.7 billion (euro)
IPO for e.Biscom S.p.A, a provider of broadband telecommunications and internet
services in Italy. The offering was the first IPO of the year in Italy and the
largest non-privatization ever of an Italian company.
DLJ reported net investment gains of approximately $130 million during
the first quarter of 2000. Both of the Banking Group's investment businesses -
its $10 billion family of Merchant Banking partnerships and its $2 billion
Sprout Group of venture capital funds - realized significant investment gains in
the quarter. DLJ's Merchant Banking funds accounted for approximately two-thirds
of the quarter's investment gains. The technology-weighted portfolios of the
Sprout Group continued to benefit from initial public offerings by technology
companies in which Sprout has invested.
STRONG TRADING GAINS OFFSET INDUSTRYWIDE DECLINE IN HIGH-YIELD
UNDERWRITING: Revenues from dealer and trading gains increased by more than 120
percent to a record $384.8 million for the first quarter, as DLJ's global
trading desks benefited from the ongoing strong volume in the world's equity
markets and traded adroitly in the fixed-income markets. DLJ's High Yield
Department, enjoying the benefits of a three-year program to diversify its
revenues and broaden its business mix, almost doubled its revenues during the
first quarter and tripled its pretax profits. It was the most significant
contributor to the results of DLJ's Fixed Income Group, which generated net
revenues of $245.2 million and earned pretax profits of $81.0 million, 29
percent more than during the comparable quarter a year ago.
For the first quarter of 2000, DLJ reported underwriting revenues of
$250.6 million, approximately $6 million less than the first quarter of 1999.
Solid results in equity and equity-related underwriting were offset by the low
level of activity in the new issue market
3
for high-yield bonds. DLJ was once again the world's number-one-ranked
underwriter of high-yield bonds with a market share of 19.2 percent.
INTERNATIONAL REVENUES UP 173 PERCENT AS INVESTMENT SPENDING DECLINES:
Net Revenues from DLJ's various non-U.S. businesses almost tripled rising from
$141.0 million for the first quarter of 1999 to $385.3 million during the first
quarter of 2000. The largest gains were achieved by DLJ's new International
Equities unit - a business that began operating only five quarters ago - and
that attained profitability for the first time during the first quarter.
Revenues generated by DLJ's international banking business more than doubled.
International revenues generated within the Financial Services Group increased
by 96 percent, as a result of strong performances by the London office of the
firm's Investment Services Group and by Pershing Ltd., which is the leading
provider of clearing services to European financial services organizations
Donaldson, Lufkin & Jenrette is a leading integrated investment and
merchant bank serving institutional, corporate, government and individual
clients. DLJ's businesses include securities underwriting; sales and trading;
investment and merchant banking; financial advisory services; investment
research; venture capital; correspondent brokerage services; online, interactive
brokerage services; and asset management. Founded in 1959 and headquartered in
New York City, DLJ employs approximately 10,600 people worldwide and maintains
offices in 13 cities in the United States and 16 cities in Europe, Latin America
and Asia. The company has two classes of common stock trading on the New York
Stock Exchange. Shares trading under the ticker symbol "DLJ" represent
Donaldson, Lufkin & Jenrette, Inc. Shares trading under the ticker symbol "DIR"
track the performance of DLJdirect, its online brokerage business. For more
information on Donaldson, Lufkin & Jenrette, refer to the company's world wide
web site at www.dlj.com. The firm's world headquarters are located at 277 Park
Avenue, New York, NY 10172; telephone number (212) 892-3000.
Tables Follow
DONALDSON, LUFKIN & JENRETTE, INC. AND SUBSIDIARIES
CONSOLIDATED SUMMARY OF OPERATIONS (UNAUDITED)
(in thousands, except % and per share amounts)
--------------------------------------------------
QUARTER ENDED
MARCH 31, 2000 VS. 1999
2000 1999 $ %
--------------------------------------------------
Revenues:
Commissions $ 472,019 $ 280,992 $ 191,027 68.0%
Underwritings 250,625 256,914 (6,289) (2.4)%
Fees 421,987 287,075 134,912 47.0%
Interest-net 813,662 476,661 337,001 70.7%
Principal transactions-net:
Trading 384,756 174,045 210,711 121.1%
Investment 129,889 3,024 126,865 N/M
Other 20,054 14,739 5,315 36.1 %
---------- ---------- ---------- ----------
Total revenues 2,492,992 1,493,450 999,542 66.9%
---------- ---------- ---------- ----------
Costs and expenses:
Compensation and benefits 1,066,062 635,714 430,348 67.7%
Interest 604,090 355,953 248,137 69.7%
Brokerage, clearing, exchange
fees, and other 103,797 71,221 32,576 45.7%
Occupancy and related costs 48,894 41,088 7,806 19.0%
Communications and technology 123,486 90,983 32,503 35.7%
Other operating expenses 157,463 101,491 55,972 55.1%
---------- ---------- ---------- ----------
Total costs and expenses 2,103,792 1,296,450 807,342 62.3%
---------- ---------- ---------- ----------
Income before provision for
income taxes 389,200 197,000 192,200 97.6%
---------- ---------- ---------- ----------
Provision for income taxes 144,000 75,350 68,650 91.1%
---------- ---------- ---------- ----------
Net income 245,200 121,650 123,550 101.6%
Dividends on preferred stock 5,289 5,289 0 0.0%
---------- ---------- ---------- ----------
Earnings applicable to common shares $ 239,911 $ 116,361 $ 123,550 106.2%
========== ========== ========== ==========
EARNINGS APPLICABLE TO COMMON SHARES (1)
DLJ $ 237,474 $ 116,361 $ 121,113 104.1%
========== ========== ========== ==========
DLJdirect $ 2,437
==========
EARNINGS PER SHARE (2):
DLJ
Basic $ 1.87 $ 0.94 $ 0.93 98.9%
Diluted $ 1.72 $ 0.84 $ 0.88 104.8%
========== ========== ========== ==========
DLJdirect
Basic $ 0.13
Diluted $ 0.13
==========
WEIGHTED AVERAGE COMMON SHARES (2):
DLJ
Basic 127,008 123,995 3,013 2.4%
Diluted 138,466 137,850 616 0.4%
========== ========== ========== ==========
DLJdirect
Basic 18,400
Diluted 18,482
==========
DLJdirect
Net income (included in consolidated
earnings applicable to common shares) $ 13,614
==========
5
DONALDSON, LUFKIN & JENRETTE, INC. AND SUBSIDIARIES
CONSOLIDATED SUMMARY OF OPERATIONS (UNAUDITED)
(in thousands, except % and per share amounts)
-------------------------------------------------------
QUARTER ENDED
MARCH 31, 2000 VS. 1999
2000 1999 $ %
-------------------------------------------------------
DLJ INC.
NET REVENUES BY OPERATING GROUP:
Banking $ 548,035 $ 322,481 $ 225,554 69.9%
Fixed Income 245,180 209,432 35,748 17.1%
Equities 449,992 213,408 236,584 110.9%
Financial Services 675,466 406,240 269,226 66.3%
Elimination and other (29,771) (14,064) (15,707) (111.7)%
----------- ----------- ----------- ----------
Total Net Revenues $ 1,888,902 $ 1,137,497 $ 751,405 66.1%
=========== =========== =========== ==========
DLJ INC.
INCOME BEFORE INCOME TAXES BY
OPERATING GROUP:
Banking $ 154,407 $ 78,305 $ 76,102 97.2%
Fixed Income 80,979 62,806 18,173 28.9%
Equities 94,053 24,720 69,333 280.5%
Financial Services 170,511 90,660 79,851 88.1%
Elimination and other (110,750) (59,491) (51,259) (86.2)%
----------- ----------- ----------- ----------
Total Income before Income Taxes $ 389,200 $ 197,000 $ 192,200 97.6%
=========== =========== =========== ==========
NET REVENUES BY GEOGRAPHIC LOCATION:
Domestic $ 1,503,600 $ 996,537 $ 507,063 50.9%
International 385,302 140,960 244,342 173.3%
----------- ----------- ----------- ----------
Total Net Revenues $ 1,888,902 $ 1,137,497 $ 751,405 66.1%
=========== =========== =========== ==========
DLJ INC.
BALANCE SHEET DATA AT END OF PERIOD:
Long-term borrowings (4) $ 6,130,676 $ 4,244,665 $ 1,886,011 44.4%
Redeemable trust securities $ 200,000 $ 200,000 $ 0 0.0%
Total stockholders' equity (2) $ 4,160,904 $ 3,069,124 $ 1,091,780 35.6%
Book value per common share
outstanding
DLJ common stock $ 29.35 $ 21.45 $ 7.90 36.8%
Common shares and RSUs outstanding
at end of period
DLJ common stock 127,496 125,612 1,884 1.5%
DLJdirect common stock 18,400 18,400 N/A
DLJ INC.
OTHER FINANCIAL DATA AT END OF PERIOD:
Ratio of long-term borrowings to total
capitalization (5) 54.4% 55.8%
Return on average common stockholders'
equity (6) 26.4% 17.8%
6
DONALDSON, LUFKIN & JENRETTE, INC. AND SUBSIDIARIES
CONSOLIDATED SUMMARY OF OPERATIONS (UNAUDITED)
(in thousands, except % and per share amounts)
(1) DLJdirect Common Stock tracks the separate performance of the Company's
existing online discount brokerage and related investment services
business ("Tracking Stock"). Prior to issuing DLJdirect Common Stock, the
Company's existing Common Stock was designated as DLJ Common Stock and
reflects the performance of the Company's primary businesses, i.e.,
Banking, Fixed Income, Equities and Financial Services, plus a 100%
interest in DLJdirect. These operations are referred to as DLJ. On May 28,
1999, ("the closing date"), the Company issued in an initial public
offering, 18.4 million shares of DLJdirect Common Stock. The shares of
DLJdirect Common Stock have no voting rights, except in certain limited
circumstances.
Earnings applicable to common shares for DLJ includes a 100% retained
interest in DLJdirect for periods prior to the closing date and 82.1% for
subsequent periods. Quarterly results reported by DLJ prior to the closing
date were not affected by the issuance of the tracking stock.
(2) Earnings per common share amounts for periods after the closing date have
been calculated using the two class method. The two class method is an
earnings allocation formula that determines the earnings per share for
each class of common stock according to participation rights in
undistributed earnings.
For DLJ, basic earnings per common share represents earnings applicable to
common shares (including its retained interest in DLJdirect) divided by
the weighted average actual common shares outstanding, i.e., excluding the
effect of potentially dilutive securities. Diluted earnings per common
share include the dilutive effects of the Restricted Stock Unit Plan and
the dilutive effect of options calculated under the treasury stock method.
For DLJdirect, basic earnings per share is calculated by dividing earnings
applicable to tracking stock by the weighted average actual common shares
outstanding. Diluted earnings per common share include the dilutive effect
of options calculated under the treasury stock method. DLJ's retained
interest excludes the effect of the 10 million shares of common stock that
have been reserved for issuance under the DLJdirect Stock Option Plan.
Earnings per share for DLJdirect for periods prior to the closing date are
not presented as such amounts are not meaningful.
(3) Interest-net is net of interest expense to finance U.S. Government, agency
and mortgage-backed securities of $970.3 million and $705.3 million,
respectively.
(4) During the first quarter of 2000, the Company issued $500.0 million of
8.0% Senior Notes that mature in 2005 and an aggregate of $485.0 million
medium-term notes with various maturity dates through 2007.
(5) Long-term borrowings and total capitalization (the sum of long-term
borrowings, preferred stock, and stockholders' equity) exclude current
maturities (one year or less) of long-term borrowings.
(6) Return on average common stockholders' equity is calculated on an
annualized basis for periods of less than one full year using a monthly
average and is based on earnings applicable to common shares.
7