CREDIT FIRST SUISSE BOSTON , Branch

e25,000,000 9.35 per cent. Fixed/Floating Rate Subordinated Bonds Due 2029 e25,000,000 7.05 per cent. Fixed/Floating Rate Subordinated Bonds Due 2029 ~12,000,000 7.15 per cent. Fixed/Floating Rate Subordinated Bonds Due 2019 H5,000,000 8.68 per cent. Fixed/Floating Rate Subordinated Bonds Due 2014 Issue Price of each Tranche: 100 per cent.

The 9.35 per cent. Fixed/Floating Rate Subordinated Bonds Due 2029 (the “Tranche A Bonds”) of Credit Suisse First Boston (the “Bank”), a Swiss bank, acting through its London branch (the “Branch”), will be issued in an aggregate principal amount of e25,000,000. The 7.05 per cent. Fixed/Floating Rate Subordinated Bonds Due 2029 (the “Tranche B Bonds”) of the Bank, acting through the Branch, will be issued in an aggregate principal amount of e25,000,000. The 7.15 per cent. Fixed/Floating Rate‘Subordinated Bonds Due 2019 (the “Tranche C Bonds”) of the Bank, acting through the Branch, will be issued in an aggregate principal amount of el2,000,000. The 8.68 per cent. Fixed/Floating Rate Subordinated Bonds Due 2014 (the “Tranche D Bonds”) of the Bank, acting through the Branch, will be issued in an aggregate principal amount of ~15,000,OOO. The Tranche A Bonds, the Tranche B Bonds, the Tranche C Bonds and the Tranche D Bonds (each a “Tranche”) are together referred to herein as the “Bonds”. Interest on the principal amount of the Tranche A Bonds, the Tranche B Bonds and the Tranche C Bonds is payable annually in arrear on 15th October and interest on the principal amount of the Tranche D Bonds is payable annually in arrear on 22nd October (each an “Interest Payment Date”) initially at the rate of 9.35 per cent. per annum in respect of the Tranche A Bonds, 7.05 per cent. per annum in respect of the Tranche B Bonds, 7.15 per cent. per annum in respect of the Tranche C Bonds and 8.68 per cent. per annum in respect of the Tranche D Bonds, and thereafter at a floating rate in respect of the period commencing on 15th October, 2004 in relation to the Tranche A Bonds, 15th October, 2014 in relation to the Tranche B Bonds, 15th October, 2006 in relation to the Tranche C Bonds and 22nd October, 2002 in relation to the Tranche D Bonds, subject to and as more fully described under “Terms and Conditions of the Tranche A Bonds - Interest”, “Terms and Conditions of the Tranche B Bonds”, “Terms and Conditions of the Tranche C Bonds” and “Terms and Conditions of the Tranche D Bonds”. Unless previously redeemed or purchased and cancelled each Tranche A Bond and each Tranche B Bond will be redeemed at its principal amount on 15th October, 2029, each Tranche C Bond will be redeemed at its principal amount on 15th October, 2019 and each Tranche D Bond will be redeemed at its principal amount on 22nd October, 2014. The Bonds of each Tranche may be redeemed at par, together with accrued interest, if any, in whole but not in part, at any time prior to 15th October, 2004 in the case of the Tranche A Bonds, 15th October, 2014 in the case of the Tranche B Bonds, 15th October, 2006 in the case of the Tranche C Bonds and 22nd October, 2002 in the case of the Tranche D Bonds and thereafter on any applicable Interest Payment Date in the event of certain changes relating to Swiss or United Kingdom taxation. See “Terms and Conditions of the Tranche A Bonds - Redemption and Purchase”, “Terms and Conditions of the Tranche B Bonds”, “Terms and Conditions of the Tranche C Bonds” and “Terms and Conditions of the Tranche D Bonds”. The Bonds are direct, subordinated and unsecured obligations of the Bank and payments of principal and interest are conditional on the Bank being solvent at the time of payment, all as more fully described in respect of each Tranche under “Terms and Conditions of the Tranche A Bonds - Status and Subordination”, “Terms and Conditions of the Tranche B Bonds”, Terms and Conditions of the Tranche C Bonds and “Terms and Conditions of the Tranche D Bonds”. Application has been made to list the Bonds of each Tranche on the Luxembourg Stock Exchange. The Bonds are offered by Credit Suisse First Boston (Europe) Limited (the “Manager”) when, as and if issued by the Bank, acting through the Branch, delivered to and accepted by the Manager and subject to its right to reject orders in whole or in part. The Bonds of each Tranche will initially be represented by a temporary global bond in bearer form (each, a “Temporary Global Bond”), without interest coupons (“Coupons”), which will be deposited with a common depositary for Morgan Guaranty Trust Company of New York, Brussels office, as operator of the Euroclear System (“Euroclear”) and Cedelbank on or about 15th October, 1999, in the case of the Tranche A Bonds, the Tranche B Bonds and the Tranche C Bonds, and on or about 22nd October, 1999 in the case of the Tranche D Bonds. Interests in each Temporary Global Bond will be exchangeable for interests in a permanent global bond in bearer form (each, a “Permanent Global Bond”), without Coupons, on or after a date that is expected to be 24th November, 1999 or, in relation to the Temporary Global Bond in respect of the Tranche D Bonds, 1st December, 1999, upon certification of non-US. beneficial ownership. Definitive Bonds in bearer form, with Coupons attached, will only be issued in the limited circumstances described herein.

Credit Suisse First Boston

Offering Circular dated 14th October, 1999 EACH PURCHASER OF THE BONDS MUST COMPLY WITH ALL APPLICABLE LAWS AND REGULATIONS IN FORCE IN ANY JURISDICTION IN WHICH IT PURCHASES, OFFERS OR SELLS THE BONDS OR POSSESSESOR DISTRIBUTES THIS OFFERING CIRCULAR AND MUST OBTAIN ANY CONSENT, APPROVAL OR PERMISSION REQUIRED BY IT FOR THE PURCHASE, OFFER OR SALE BY IT OF THE BONDS UNDER THE LAWS AND REGULATIONS IN FORCE IN ANY JURISDICTION TO WHICH IT IS SUBJECT OR IN WHICH IT MAKES SUCH PURCHASES, OFFERS OR SALES, AND NONE OF THE BANK, THE BRANCH OR THE MANAGER SHALL HAVE ANY RESPONSIBILITY THEREFOR. The Bonds have not been and will not be registered under the U.S. Securities Act of 1933, as amended, (the “Securities Act”) and are bonds in bearer form that are subject to U.S. tax law requirements. Subject to certain exceptions, the Bonds may not be offered, sold or delivered within the United States or to U.S. persons. In addition, until 40 days after the date of this Offering Circular, an offer or sale of the Bonds within the United States by any dealer (whether or not participating in the offering) may violate the registration requirements of the Securities Act. The Bonds are not being offered to the public in the United Kingdom and this document may only be issued or passed on in the United Kingdom to a person who is of a kind described in Article ll(3) of the Financial Services Act 1986 (Investment Advertisements) (Exemptions) Order 1996 (as amended) or to a person to whom it may otherwise lawfully be issued or passed on. The Bunk, having made all reasonable inquiries, confirms that this Ofering Circular; including the Injormation Statement and the Supplement to the Information Statement attached as Annex A and Annex B, respectively, and made a part hereof contains all injormation with respect to the Bank, the Branch and the Bonds that is material in the context ofthe issue and ojfering of the Bonds, that such information is true and accurate in every material respect as of the date hereof and that, to the best of the Bank’s knowledge, there are no other jticts the omission of which makes this document as a whole or any such injormation materially misleading. The Bank accepts responsibility accordingly. No person is authorised to give any information or to make any representation not contained in this Ojfering Circular (including the Information Statement and the’Supplement to the Information Statement) and any information or representation not contained herein or therein must not be relied upon as having been authorised by or on behalf of the Bank or Credit SuisseFirst Boston (Europe) Limited. The distribution of this Offering Circular and the offering of the Bonds in certain jurisdictions may be restricted by law. Persons into whosepossession this Offering Circular comes are required by the Bank and Credit SuisseFirst Boston (Europe) Limited to inform themselvesabout, and to observe, any such restrictions. In particular there are restrictions on the distribution of this O&ring Circular and the offer and sale of Bonds, in the United Kingdom and the United States. See “Subscription and Sale “. Neither the delivery of this Ofering Circular nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the ujfairs of the Bank since the date hereof or that the information herein is correct as of any date subsequent to the date as of which it is given herein. Unless otherwise specified or the context otherwise requires, references in this Ojjering Circular to “dollars “, “US. dollars “, “USD “, “ US.$” and “$‘I are to the United States dollars, rejerences to ‘Swiss f rants ” , “CHF” and “Tfr” are to the lawful currency of Switzerland and references to “euro ” and ‘%” are to the currency introduced at the start of the third stage of European economic and monetary union pursuant to the Treaty establishing the European Communities, as amended by the Treaty on European Union. See “General Injormation “for further information. In connection with this issue, Credit Suisse First Boston (Europe) Limited may over-allot or effect transactions which stabilise or maintain the market price of the Bonds at a level which might not otherwise prevail. Such stabilising, if commenced, may be discontinued at any time. Such transactions shall be carried out in accordance with all applicable laws.

INCORPORATION OF ANNEXES A AND B The Information Statement dated 20th April, 1999 and the Supplement to the Information Statement dated 10th September, 1999 contained in Annex A and Annex B, respectively to this Offering Circular form part of this Offering Circular, and this Offering Circular should be read in conjunction with such Annexes.

2 TABLE OF CONTENTS

Page Page TERMS AND CONDITIONS OF THE TRANCHE A CONSOLIDATED CAPITALISATION OF THE BANK 16 BONDS . 4 USE OF PROCEEDS .. .. 16 TERMS AND CONDITIONS OF THE TRANCHE B THE LONDON BRANCH . 17 BONDS . 12 CERTAIN TAX CONSIDERATIONS . 17 TERMS AND CONDITIONS OF THE TRANCHE C INDEPENDENT AUDITORS.. . 19 BONDS . . 13 SUBSCRIPTION AND SALE . 20 TERMS AND CONDITIONS OF THE TRANCHE D BONDS 13 GENERAL INFORMATION __ . 21 SUMMARY OF PROVISIONS RELATING TO THE ANNEX A: CREDIT SUISSE FIRST BOSTON .- BONDS WHILE REPRESENTED BY THE INFORMATION STATEMENT . 23 GLOBAL BONDS . . . . . 14 ANNEX B: SUPPLEMENT TO THE INFORMATION RATINGS . . .. . 15 STATEMENT . . B-l TERMS AND CONDITIONS OF THE TRANCHE A BONDS The jbllowing is the text of the Terms and Conditions of the Tranche A Bonds which (subject to mod$cation and savefor the italicised text) will be endorsed on each Tranche A Bond in definitive form, if issued: The e25,000,000 9.35 per cent. Fixed/Floating Rate Subordinated Bonds Due 2029 (the “Bonds”, which expression shall in these Terms and Conditions (the “Conditions”), unless the context otherwise requires, include any further bonds issued pursuant to Condition 14 and forming a single series therewith) of Credit Suisse First Boston (the “Bank”), acting through its London Branch (the “Branch”), are constituted by a second supplemental trust deed (the “Second Supplemental Trust Deed”) dated 15th October, 1999 between the Bank, acting through the Branch, and Chase Manhattan Trustees Limited (the “Trustee”) as trustee for the holders of the Bonds (the “Bondholders”), supplemental to the principal trust deed (together with the Second Supplemental Trust Deed, the “Trust Deed”) dated 1lth May, 1998. The issue of the Bonds was authorised and approved by a certificate of the Chief Financial Officer of the Credit Suisse First Boston business unit of the Bank (acting in consultation with the Chief Executive Officer of the Credit Suisse First Boston business unit of the Bank) dated 8th October, 1999. The statements in these Conditions include summaries of, and are subject to, the detailed provisions of the Trust Deed. Copies of the Trust Deed are available for inspection by Bondholders during normal business hours at the principal office for the time being of the Trustee, being at the date of issue of the Bonds at Trinity Tower, 9 Thomas More Street, London El 9YT, England, and at the specified office of each of the paying agents (the “Paying Agents”) referred to below. The Bondholders and the holders (the “Couponholders”) of the interest coupons appertaining to the Bonds (the “Coupons”, which expression shall, unless the context otherwise requires, include the talons for further interest coupons (the “Talons”)) are entitled to the benefit of, are bound by, and are deemed to have notice of, all the provisions of the Trust Deed applicable to the Bonds and the Coupons.

1. Form, Denomination and Title The Bonds are in bearer form, serially numbered, with Coupons attached on issue, in the denomination of ~100,000 each. Title to the Bonds and Coupons will pass by delivery. The Bank, the Branch, the Trustee and any Paying Agent may deem and treat the bearer of any Bond and Coupon as the absolute owner thereof (whether or not such Bond or Coupon shall be overdue and notwithstanding any notice to the contrary) for the purpose of making payment and for all other purposes.

2. Status and Subordination The Bonds and the Coupons are direct, unsecured and subordinated obligations of the Bank, conditional as described below. The rights of the Bondholders and Couponholders are subordinated to the claims of Senior Creditors (as defined below) and, accordingly, payments of principal and interest (other than upon a winding-up or dissolution (by bankruptcy or otherwise) in Switzerland of the Bank) are conditional upon the Bank being solvent at the time for payment by the Branch and no principal or interest (other than as aforesaid) shall be payable in respect of the Bonds except to the extent that the Branch could make such payment and the Bank would still be solvent immediately thereafter. For the purpose of these Conditions, the Bank shall be solvent if(i) it is able to pay its debts as they fall due and (ii) its Assets exceed its Liabilities (each as defined below) (other than its Liabilities to persons who are not Senior Creditors). For the purpose of these Conditions, “Senior Creditors” means (i) all depositors and (ii) all other creditors of the Bank except those whose claims rank or are expressedto rank pari passu with or junior to the claims of the Bondholders and Couponholders. “Assets” means the consolidated gross assets of the Bank, and “Liabilities” means the consolidated gross liabilities of the Bank, all as shown by the latest published audited consolidated balance sheet of the Bank, as adjusted for contingencies and for subsequent events, all valued in such manner as the Bank or any liquidator (as the case may be) may determine and calculated in accordance with Swiss generally accepted accounting principles (“GAAP”) or, if such audited balance sheet is prepared in accordance with U.S. GAAP, U.S. GAAl?

4 The Bonds rank pari passu among themselves. The Bonds rank prior to the claims of the holders of any subordinated obligations which rank or are expressed to rank junior to the claims of the Bondholders. Subject to applicable law, no Bondholder or Couponholder may exercise, claim or plead any right of set-off, compensation or retention in respect of any amount owed to it by the Bank, acting through the Branch, arising under or in connection with the Bonds or the Coupons and each Bondholder and Couponholder shall, by virtue of being the holder of any Bond or Coupon (as the casemay be), be deemedto have waived all such rights of set-off, compensation or retention. The subordination provisions set out above are irrevocable. The Bank may not create or permit to exist any charge or other security interest over its assetsto secure the obligations of the Bank, acting through the Branch, in respect of the Bonds. N.B. The obligations ofthe Branch in respect of the Bonds and the Coupons are conditional upon the Bank being solventjor the purpose ofthis Condition immediately before and ajter payment by the Branch. IJ this condition is not satisfied any amounts which might otherwise have been allocated in or towards payment in respect of the Bonds or the Coupons may be used to absorb losses of the Bank.

3. Interest (a) The Bonds bear interest from, and including, 15th October, 1999 (the “Issue Date”) to, but excluding, 15th October, 2004 at the rate of 9.35 per cent. per annum (the “Fixed Rate of Interest”). Thereafter the Bonds bear interest at the applicable rate determined in accordancewith paragraph (c) below (the “Floating Rate of Interest”). Interest on the Bonds is payable annually in arrear on 15th October (each an “Interest Payment Date”), commencing on 15th October, 2000. The period from, and including, the Issue Date, to, but excluding, the first Interest Payment Date thereafter and each successive period from, and including, an Interest Payment Date to, but excluding, the next succeeding Interest Payment Date (whether a Fixed Rate of Interest or a Floating Rate of Interest is payable on such date) is called an “Interest Period”. (b) Each Bond will cease to bear interest from the due date for redemption unless, upon due presentation, payment of the principal is improperly withheld or refused or default is otherwise made in respect of such payment. In either such event, interest will continue to accrue as provided in the Trust Deed. (c) The Floating Rate of Interest in respect of each Interest Period commencing on or after 15th October, 2004 will be the rate per annum (rounded if necessary to the nearest 0.00001 per cent. with 0.000005 per cent. being rounded upwards) determined by Credit Suisse Financial Products or its duly appointed successor (the “Calculation Agent”) in accordance with the following formula, provided that in no event shall the Floating Rate of Interest be greater than 7.50 per cent. per annum: 100.00 per cent. x CMSIS where “CMS ,s” means, in respect of each applicable Interest Period: (i) the semi-annual swap mid rate for Sterling swap transactions with a maturity of 15 years, expressed as a percentage, as displayed under the heading “MEAN” on Telerate page no. 42279 (or such replacement page on that service, or such other screen service, which displays the information) (the “Screen Quotation”) as at 11.00 a.m., London time, on the second London and TARGET Business Day prior to the start of the Interest Period (the “Interest Determination Date”); or (ii) if the Screen Quotation is not available, the Calculation Agent shall request each of five leading Sterling dealers, in each case selected by the Calculation Agent, (the “Reference Banks”) to provide the Calculation Agent with the bid and offered rates for the semi-annual fixed leg of a fixed-for-floating Sterling interest rate swap transaction with a term of 15 years commencing on the hrst day of the relevant Interest Period with an acknowledged dealer of good credit in the swap market, where the floating leg is equivalent to six-month sterling LIBOR on an Actual/ 365 (Fixed) day count basis, as at 11.OO a.m., London time, on the Interest Determination Date. If four or five of the Reference Banks provide the Calculation Agent with such rates, CMS, s for such Interest Period shall be the arithmetic mean of the means of such bid and offered rates supplied, as determined by the Calculation Agent, provided that the highest mean of rates

5 quoted by a Reference Bank (or, if there is more than one such highest mean, only one of such means) and the lowest mean of rates quoted by a Reference Bank (or, if there is more than one such lowest mean, only one of such means) shall be disregarded by the Calculation Agent for the purpose of determining the arithmetic mean of the means of such bid and offered rates supplied; or (iii) if on the Interest Determination Date only two or three of the Reference Banks provide the Calculation Agent with rates as provided in paragraph (ii) above, CMSis for such Interest Period shall be the arithmetic mean of the means of such bid and offered rates supplied, as determined by the Calculation Agent; or (iv) if on the Interest Determination Date only one of the Reference Banks provides the Calculation Agent with its bid and offered rates as provided in paragraph (ii) above, CMS, s for such Interest Period shall be the mean of the rates so supplied, as determined by the Calculation Agent; or (4 if on the Interest Determination Date none of the Reference Banks provides the Calculation Agent with its bid and offered rates as provided in paragraph (ii) above, CMS i5 for such Interest Period shall be the mid-market rate for the semi-annual fixed leg of a fixed-for-floating Sterling interest rate swap transaction with a term of 15 years, where the floating leg is equivalent to six-month Sterling LIBOR on an Actual/365 (Fixed) day count basis, as at 11.00 a.m., London time, on the Interest Determination Date, as determined by the Calculation Agent in its sole discretion. For the purposes of these Conditions: “London Business Day” means a day on which commercial banks and foreign exchange markets settle payments in London; “TARGET Business Day” means a day on which the TARGET System is open; and “TARGET System” means the Trans-European Automated Real-Time Gross Settlement Express Transfer (TARGET) System. (d) The Calculation Agent shall, as soon as practicable after 11.OO a.m., London time, on each Interest Determination Date, but in no event later than the third business day (as defined in Condition 5) in London thereafter, determine the euro amount payable in respect of interest on each ~100,000 principal amount of Bonds (the “Interest Amount”) for the relevant Interest Period. The Interest Amount shall be determined by applying the FIoating Rate of Interest to 6100,000 and rounding the resultant figure to the nearest cent (half a cent being rounded upwards). If interest, whether at the Fixed Rate of Interest or at the Floating Rate of Interest, is required to be calculated in respect of a period of less than a full year, it shall be calculated by applying the Fixed Rate of Interest or the Floating Rate of Interest, as the case may be, to ~100,000, multiplying such sum by the Day Count Fraction and rounding the resultant figure to the nearest cent (half a cent being rounded upwards). For the purposes of this Condition 3(d), “Day Count Fraction” means the number of days in the relevant period from, and including, the most recent Interest Payment Date or, if none, the Issue Date to, but excluding the relevant payment date divided by 360 (the number of days to be calculated on the basis of a year of 360 days with twelve 30-day months (unless (i) the relevant payment date is the 3 1st day of a month but the most recent Interest Payment Date is a day other than the 30th or 3 1st day of a month, in which case the month that includes that last day shall not be considered to be shortened to a 30-day month, or (ii) the relevant payment date is the last day of the month of February, in which case the month of February shall not be considered lengthened to a 30&y month). (e) The Calculation Agent shall cause the Floating Rate of Interest and the Interest Amount for each applicable Interest Period and the relative Interest Payment Date to be published in accordance with Condition 11 as soon as possible after their determination1but in no event later than the second Business Day in London thereafter. The Interest Amount and Interest Payment Date may subsequently be amended (or

6 appropriate alternative arrangements made by way of adjustment) without notice in the event of an extension or shortening of the Interest Period. (I) If for any reason the Calculation Agent at any time defaults in its obligation to determine the Floating Rate of Interest or calculate any Interest Amount in accordancewith paragraph (c) or (d) above, as the case may be and, in each case, paragraph (e) above, the Trustee shall determine the Floating Rate of Interest at such rate as, in its absolute discretion (having such regard as it shall think fit to the foregoing provisions of this Condition, but subject always to the maximum rate specified above), it shall deem fair and reasonable in all the circumstances or, as the case may be, the Trustee shall calculate the Interest Amount in such manner as it shall deem fair and reasonable in all the circumstances and each such determination or calculation shall be deemed to have been made by the Calculation Agent. (g) All notifications, opinions, determinations, certificates, calculations, rates and decisions given, expressed,made or obtained for the purposes of the provisions of this Condition, whether by the Reference Banks (or any of them), the Calculation Agent or the Trustee, will (in the absenceof wilful default, bad faith or manifest error) be binding on the Bank and the Branch, the Reference Banks, the Calculation Agent, the Paying Agents, the Trustee and all Bondholders and Couponholders and (in the absenceas referred to above) no liability to the Bank or the Branch, the Bondholders or the Couponholders shall attach to the Reference Banks, the Calculation Agent or the Trustee in connection with the exercise or non-exercise by them of their powers, duties and discretions under this Condition. (h) The Bank, acting through the Branch will procure that so long as any of the Bonds remains outstanding there shall at all times be a Calculation Agent for the purposes of the Bonds and the Bank, acting through the Branch, may terminate the appointment of the Calculation Agent. The Calculation Agent may not resign its duties or be removed without a successor (approved by the Trustee) having been appointed.

4. Redemption and Purchase (a) Unless previously redeemed or purchased and in each case cancelled as specified below, each Bond will be redeemed at its principal amount on 15th October, 2029 (the “Maturity Date”). (b) If the Branch satisfies the Trustee immediately prior to giving the notice referred to below that on the occasion of the next payment due (subject to Condition 2) in respect of the Bonds or the Coupons the Bank or the Branch will be required to pay additional amounts as provided in Condition 6 or to account to any taxing authority in the United Kingdom or Switzerland for any amount (other than any tax withheld or deducted from interest payable on the Bonds or the Coupons) calculated by reference to any amount payable in respect of the Bonds or the Coupons, the Branch may at its option (subject to Condition 2), having given not less than 30 nor more than 60 days’ notice to the Bondholders in accordance with Condition 11 (which notice shall be irrevocable), elect to redeem all, but not some only, of the Bonds at any time prior to 15th October, 2004 and thereafter on any Interest Payment Date at their principal amount together with accrued interest. Upon the expiry of such notice the Bank, acting through the Branch, shall be bound (subject to Condition 2) to redeem the Bonds accordingly. (c) The Bank or any of the Affiliates (as defined in the Trust Deed) may, subject to certain limitations imposed by Swiss law, at any time purchase Bonds at any price and in any manner and reissue or resell the same for the purpose of making a market in the Bonds, provided that all unmatured Coupons appertaining thereto are attached thereto or surrendered therewith. (d) All Bonds which are redeemed shall forthwith, and Bonds which are purchasedby or on behalf of the Bank or any of the Affiliates may, be cancelled (together with all relative unmatured Coupons purchased therewith) or, in the latter case only, may be reissued or resold.

5. Payments and exchange of Talons Payments in respect of principal and interest will be made in euro against surrender of Bonds or, as the case may be, Coupons at the specified office of any of the Paying Agents. Such payments will be made at the specified office of any Paying Agent by credit or transfer to a euro account (or any other account to which em-omay be credited or transferred) specified by the payee or, at the option of the payee, by a euro cheque, subject in all cases to any fiscal or other laws and regulations applicable thereto, but without prejudice to the provisions of Condition 6. Payments of interest due in respect of any Bond other than on presentation and surrender of matured Coupons shall be made only against presentation and either surrender or endorsement (as appropriate) of the relevant Bond. The names of the initial Principal Paying Agent and the other initial Paying Agent and their initial specified offices are set out below. The Branch reserves the right at any time to vary or terminate the appointment of any Paying Agent and to appoint additional or other Paying Agents, provided that it will at all times maintain (a) so long as the Bonds are listed on the Luxembourg Stock Exchange, a Paying Agent with a specified office in Luxembourg and (b) in the event of the Proposed EU Withholding Tax Directive (as defined below) being adopted in substantially the form proposed, a Paying Agent with a specified office in a city approved by the Trustee outside the European Union. Notice of any such termination or appointment and of any changes in the specified offices of the Paying Agents will be given to the Bondholders promptly by the Bank, acting through the Branch, in accordance with Condition 11. “Proposed EU Withholding Tax Directive” means the proposal presented by the European Commission to the Council of Ministers of the European Union in May 1998 to oblige member states to adopt a “withholding tax system” or an “information reporting system” in relation to interest, discounts and premia. Each Bond should be presented for payment together with all unmatured Coupons appertaining thereto relating to a Fixed Rate of Interest failing which the full amount of any such missing umnatured Coupon (or, in the case of payment not being made in full, that proportion of the full amount of such missing unmatured Coupon which the amount so paid bears to the total amount due) will be deducted from the amount due for payment. Each amount so deducted will be paid in the manner mentioned above against presentation and surrender (or, in the case of part payment only, endorsement) of the relevant missing Coupon relating to a Fixed Rate of Interest at any time before the expiry of 10 years after the Relevant Date (as defined in Condition 6) in respect of the relevant Bond (whether or not the Coupon would otherwise have become void pursuant to Condition 7), but not thereafter. Upon the due date for redemption of any Bond, all urn-naturedCoupons relating to a Floating Rate of Interest and all unmatured Talons (if any) appertaining to such Bond shall become void and no payment’or, as the case may be, exchange for further Coupons shall be made in respect thereof. A holder shall be entitled to present a Bond or Coupon for payment only on a Presentation Date and shall not, except as provided in Condition 3, be entitled to any further interest or other payment if a Presentation Date is after the due date. “Presentation Date” means a day which (subject to Condition 7): (a) is or falls after the relevant due date; and (b) is both a business day in the place of presentation and a TARGET Business Day. In this Condition, “business day” means a day on which commercial banks and foreign exchange markets are open in the relevant place of presentation. No further interest or other payment will be made as a consequenceof the day on which the relevant Bond or Coupon may actually be presented for payment under this paragraph falling after the due date for payment. On and after the Interest Payment Date on which the final Coupon comprised in any Coupon sheet matures, the Talon comprised in the Coupon sheet may be surrendered at the specified office of any Paying Agent in exchange for a further Coupon sheet (including any appropriate further Talon), subject to the provisions of Condition 7. Each Talon shall, for the purposes of these Conditions, be deemed to mature on the Interest Payment Date on which the final Coupon comprised in the relative Coupon sheet matures.

8 6. Taxation All payments of principal and interest in respect of the Bonds and the Coupons by the Branch will be made without withholding or deduction for, or on account of, any present or future taxes, duties, assessments or governmental charges of whatever nature imposed or levied by or on behalf of the United Kingdom or Switzerland or any political sub-division thereof or by any authority therein or thereof having power to tax unless the withholding or deduction of such taxes, duties, assessmentsor governmental charges is required by law. In that event, the Branch will pay such additional amounts as may be necessaryin order that the net amounts received by the Bondholders and Couponholders after such withholding or deduction shall equal the respective amounts of principal and interest which would have been receivable in respect of the Bonds or, as the case may be, Coupons in the absence of such withholding or deduction, except that no such additional amounts shall be payable with respect to any Bond or Coupon presented for payment: (a) in the United Kingdom or Switzerland; or (b) by or on behalf of a holder who (i) is able to avoid such withholding or deduction by satisfying any statutory requirements or by making a declaration of non-residence or other claim for exemption to the relevant tax authority; or (ii) is liable for such taxes, duties, assessmentsor governmental charges in respect of such Bond or Coupon by reason of his having some connection with the United Kingdom or Switzerland otherwise than merely by the holding of such Bond or Coupon; or (c) more than 30 days after the Relevant Date except to the extent that the holder thereof would have been entitled to such additional amounts on presenting the same for payment on such thirtieth day, assuming, whether or not it is in fact the case, such thirtieth day to be a Presentation Date (as defined in Condition 5). As used herein, the “Relevant Date” means, with respect to any payment, the date on which such payment first becomes due, but, if the full amount of the money payable has not been received in London by the Principal Paying Agent or the Trustee on or prior to such due date, it means the date on which, the full amount of such money having been so received, notice to that effect shall have been duly published in accordance with Condition Il. Any reference in these Conditions to principal or interest shall be deemed also to refer to any additional amounts which may be payable pursuant to this Condition or any undertakings given in addition thereto or in substitution therefor pursuant to the Trust Deed.

7. Prescription Bonds and Coupons, (which for this purpose shall not include Talons) will become void unless presented for payment within periods of 10 years and five years, respectively, from the Relevant Date (as defined in Condition 6) in respect thereof, subject to the provisions of Condition 5. There shall not be included in any Coupon sheet issued upon exchange of a Talon any Coupon the claim for payment in respect of which would be void pursuant to this Condition 7 or Condition 5.

8. Events of Default The Trustee at its discretion may, and if so requested in writing by the holders of at least 25 per cent. in principal amount of the Bonds then outstanding or if so directed by an Extraordinary Resolution (as defined below) of the Bondholders shall (subject in each case to being indemnified to its satisfaction), give notice to the Bank that the Bonds are, and they shall accordingly forthwith become, immediately due and repayable at their principal amount, together with accrued interest as provided in the Trust Deed, in any of the following events (“Events of Default”): (i) there is a default for more than 22 days in the payment of any interest due in respect of the Bonds, and so that for the purpose of this paragraph (i) a payment of interest shall be deemed to be due even if the condition set out in the second paragraph of Condition 2 is not satisfied; or (ii) any order shall be made by any competent court or other authority or resolution passedby the Bank for the dissolution or winding-up of the Bank or for the appointment of a liquidator,

9 receiver, administrator or manager of the Bank or of all or a substantial part of its assets,save for the purposes of reorganisation on terms approved in writing by the Trustee; or (iii) the Bank shall stop payment or shall be unable to, or shall admit to creditors generally its inability to, pay its debts as they fall due, or shall be adjudicated or found bankrupt or insolvent, or shall enter into any composition or other arrangements with its creditors generally. PROVIDED, in the case of any Event of Default other than those described in paragraphs (i) and (in the case of winding up or dissolution of the Bank) (ii), the Trustee shall have certified to the Bank that the Event of Default is, in its opinion, materially prejudicial to the interests of the Bondholders.

9. Enforcement (1) The Trustee may at any time, at its discretion and without notice, take such proceedings against the Bank and/or the Branch as it may think fit to enforce the provisions of the Trust Deed, the Bonds and the Coupons, but it shall not beI bound to take any such proceedings or any other action in relation to the Trust Deed, the Bonds or the Coupons unless (a) it shall have been so directed by an Extraordinary Resolution of the Bondholders or so requested in writing by the holders of at least 25 per cent. in principal amount of the Bonds then outstanding, and (b) it shall have been indemnified to its satisfaction. (2) No Bondholder or Couponholder shall be entitled to proceed directly against the Bank or the Branch unless the Trustee, having become bound so to proceed, fails so to do within a reasonable period and the failure shall be continuing.

10. Replacement of Bonds, Coupons and Talons Should any Bond, Coupon or Talon be lost, stolen, mutilated, defaced or destroyed,it may be replaced at the specified office of the Principal Paying Agent for the time being upon payment by the claimant of the expenses incurred in connection therewith and on such’ terms as to evidence and indemnity as the Bank, acting through the Branch, may reasonably require. Mutilated or defaced Bonds, Coupons or Talons must be surrendered before replacements will be issued.

11. Notices All notices to the Bondholders will be valid if published (i) in the Financial Times or if publication in the Financial Times is not practicable, in such other leading English language daily newspaperwith general circulation in Europe as the Trustee may approve and (ii) so long as the Bonds are listed on the Luxembourg Stock Exchange, in the Luxemburger Wort or any other daily newspaper of general circulation in Luxembourg approved by the Trustee. Such notices shall be deemed to have been given on the date of such publication in both relevant newspapers or, if so published more than once, on the date of the first such publication. If publication is not practicable in any such newspaper as is mentioned above, notices will be valid if given in such other manner, and shall be deemed to have been given on such date, as the Trustee shall determine. Couponholders shall be deemed for all purposes to have notice of the contents of any notice given to the Bondholders in accordance with this Condition 11.

12. Meetings of Bondholders, Modification, Waiver and Substitution The Trust Deed contains provisions for convening meetings of Bondholders to consider any matter affecting their interests, including the modification by Extraordinary Resolution of these Conditions or any of the provisions of the Trust Deed. The quorum at any such meeting for passing an Extraordinary Resolution will be one or more persons holding or representing a clear majority in principal amount of the Bonds for the time being outstanding, or at any adjourned such meeting one or more persons being or representing Bondholders whatever the principal amount of the Bonds so held or represented,except that at any meeting, the business of which includes the modification of certain of these Conditions or of certain of the provisions of the Trust Deed, the necessary quorum for passing an Extraordinary Resolution will be one or more persons holding or representing not less than three-quarters, or at any adjourned such meeting not less than one-quarter, of the principal amount of the Bonds for the time being outstanding.

10 An Extraordinary Resolution passed at any meeting of Bondholders will be binding on all Bondholders, whether or not they are present at the meeting, and on all Couponholders. The Trust Deed provides that the Trustee may agree, without the consent of the Bondholders or Couponholders, to any modification of, or to the waiver or authorisation of any breach or proposed breach of, any of these Conditions or any of the provisions of the Trust Deed which is not, in the opinion of the Trustee, materially prejudicial to the interests of the Bondholders or to any modification which is of a formal, minor or technical nature or which is made to correct a manifest error. The Trust Deed further provides that the Trustee shall not exercise its powers of modification, waiver or authorisation in contravention of any express direction given by Extraordinary Resolution of the Bondholders. The Trust Deed provides that the Bank shall not consolidate with or merge into any other Person (as defined in the Trust Deed) or convey, transfer or lease its properties and assetssubstantially as an entirety to any Person, unless the Person formed by such consolidation or into which the Bank is merged or the Person which acquires by conveyance or transfer, or which leases, the properties and assets of the Bank substantially as an entirety is a corporation (including a bank), partnership or trust (or a branch of any thereof), is validly existing under the laws of the jurisdiction of its organisation and shall expressly assume in writing the due and punctual payment of the principal of and interest on all the Bonds pursuant to the terms thereof and the performance or observance of every covenant in respect of the Bonds on the part of the Bank to be performed or observed. Upon any consolidation or merger of the Bank into any other Person or any conveyance, transfer or lease of the properties and assetsof the Bank substantially as an entirety to another Person, (i) the successor Person formed by such consolidation or into which the Bank is merged or to which such conveyance, transfer or lease is made shall succeedto, and be substituted for, and may exercise every right and power of, the Bank, as the case may be, under the Trust Deed with the same effect as if such successor Person had been named as the Bank therein, and thereafter, except in the case of a lease to another Person, the predecessor Person shall be relieved of all obligations and covenants under the Trust Deed and the Bonds and (ii) all references to Switzerland or the United Kingdom, as the case may be, in the Trust Deed and the Bonds shall be deemed to be references to the jurisdiction of incorporation or organisation of such successor Person. The Trust Deed provides that the Bank will give prompt written notice to the Trustee of any such consolidation, merger, conveyance, transfer or lease and will cause prompt notice thereof to be given to the Bondholders in accordance with Condition 11. Subject as provided in the Trust Deed, the Bank may, without the consent of the Trustee or the Bondholders, assign to another branch of the Bank outside of Switzerland the obligations of the Branch under the Trust Deed and the Bonds. Without limiting the foregoing, and subject as provided in the Trust Deed, the Trustee may agree, without the consent of the Bondholders or the Couponholders, to the substitution at any time or times of any Affiliate or any affiliate of any successor Person referred to above, as the principal debtor under the Trust Deed, the Bonds and the Coupons subject to (in the case of the substitution of any company which is an Affiliate or an affiliate of such successor Person) the irrevocable guarantee on a subordinated basis equivalent to that mentioned in Condition 2 in respect of the Trust Deed, the Bonds and the Coupons by the Bank or such successor Person. Notwithstanding the foregoing, no such guarantee will be required if the relevant Affiliate or affiliate of such successor Person has a credit rating at the time of substitution equal to or better than that of the Bank or such successor Person. In connection with the exercise by it of any of its trusts, powers or discretions (including, without limitation, any modification, waiver, authorisation or substitution), the Trustee shall have regard to the general interests of the Bondholders as a class but shall not have regard to any interests arising from circumstances particular to individual Bondholders (whatever their number) and, in particular but without limitation, shall not have regard to the consequencesof the exercise of its trusts, powers or discretions for individual Bondholders or Couponholders (whatever their number) resulting from their being for any purpose domiciled or resident in, or otherwise connected with, or subject to the jurisdiction of, any particular territory and the Trustee shall not be entitled to require, nor shall any Bondholder or Couponholder be entitled to claim, from the Bank or the Branch or any other person any indemnification or payment in respect of any tax consequence of any such exercise upon individual Bondholders or

11 Couponholders except to the extent already provided for in Condition 6 and/or any undertaking given in addition to, or in substitution for, Condition 6 pursuant to the Trust Deed. Any such modification, waiver, authorisation or substitution shall be binding on the Bondholders and the Couponholders and, unless the Trustee agrees otherwise, any such modification or substitution shall be notified to the Bondholders by the Branch as soon as practicable thereafter in accordance with Condition 11.

13. Indemnification of, and Transactions by, the Trustee The Trust Deed contains provisions for the indemnification of the Trustee and for its relief from responsibility in certain circumstances, including provisions relieving it from instituting proceedings to enforce repayment unless indemnified to its satisfaction. The Trustee is entitled to enter into business transactions with the Bank or any Affiliate without accounting for any profit resulting therefrom.

14. Further Issues The Bank is at liberty from time to time without the consent of the Bondholders or Couponholders to create and issue further bonds and/or notes either ranking pari passu in all respects (or in all respects save for the first payment of interest thereon) and so that the same shall be consolidated and form a single series with the outstanding bonds and/or notes of any series (including the Bonds) constituted by the Trust Deed or any deed supplemental thereto or upon such terms as to ranking, interest, conversion, premium, redemption and otherwise as the Bank may at the time of issue thereof determine. Any further bonds or notes forming a single series with the outstanding bonds or notes of any series (including the Bonds) constituted by the Trust Deed or any deed supplemental thereto shall, and any other further bonds or notes may (with the consent of the Trustee), be constituted by a deed supplemental to the Trust Deed. The Trust Deed contains provisions for convening a single meeting of the Bondholders and the holders of bonds or notes of other series in certain circumstances where the Trustee so decides.

15. Governing Law The Trust Deed, the Bonds and the Coupons are governed by, and shall be construed in accordance with, English law. The Bank, acting through the Branch, has in the Trust Deed irrevocably agreed for the benefit of the Bondholders and the Couponholders that the courts of England are to have jurisdiction to settle any disputes which may arise out of or in connection with the Trust Deed, the Bonds or the Coupons and that accordingly any suit, action or proceedings arising out of or in connection therewith (together referred to as “Proceedings”) may be brought in the courts of England. The Bank, acting through the Branch, has in the Trust Deed irrevocably and unconditionally waived and agreed not to raise any objection which it may have now or subsequently to the laying of the venue of any Proceedings in the courts of England and any claim that any Proceedings have been brought in an inconvenient forum and irrevocably and unconditionally agreed that a judgment in any Proceedings brought in the courts of England shall be conclusive and binding upon the Bank and the Branch and may be enforced in the courts of any other jurisdiction. Nothing in this Condition shall limit any right to take Proceedings against the Bank or the Branch in any other court of competent jurisdiction, nor shall the taking of Proceedings in one or more jurisdictions preclude the taking of Proceedings in any other jurisdiction, whether concurrently or not. The Bank has in the Trust Deed appointed its London Branch as its agent for service of process in England in respect of any Proceedings.

12 TERMS AND CONDITIONS OF THE TIUNCHE B BONDS These will be the same as the Terms and Conditions relating to the Tranche A Bonds set out on pages 4 to 12 of this Offering Circular, save that: 0) in the introductory paragraph, the words “third supplemental” and “Third Supplemental” shall be substituted for the words “second supplemental” and “Second Supplemental” where the same occur; (ii) in the introductory paragraph and in the first sentence of paragraph (a) of Condition 3, “7.05 per cent.” shall be substituted for “9.35 per cent.“; and (iii) “2014” shall be substituted in all places for “2004”.

TERMS AND CONDITIONS OF THE TBANCHE C BONDS These will be the same as the Terms and Conditions relating to the Tranche A Bonds set out on pages 4 to 12 of this Offering Circular, save that: 0) in the introductory paragraph, “~12,000,000” shall be substituted for ‘%25,000,000”; (ii) in the introductory paragraph, the words “fourth supplemental” and “Fourth Supplemental” shall be substituted for the words “second supplemental” and “Second Supplemental” where the same occur; (iii) “2019” shall be substituted in all places for “2029”, and “2006” shall be substituted in all places for “2004”; (iv) in the introductory paragraph and in the first sentence of paragraph (a) of Condition 3, “7.15 per cent.” shall be substituted for “9.35 per cent.“; w in paragraph (c) of Condition 3, “7.875 per cent.” shall be substituted for “7.50 per cent.“; and (vi) the provisions relating to Talons shall not be applicable.

TERMS AND CONDITIONS OF THE TRANCHE D BONDS These will be the same as the Terms and Conditions relating to the Tranche A Bonds set out on pages 4 to 12 of this Offering Circular, save that: (0 in the introductory paragraph, “~15,000,000” shall be substituted for “~25,000,000”; (ii) in the introductory paragraph, the words “fifth supplemental” and “Fifth Supplemental” shall be substituted for the words “second supplemental” and “Second Supplemental” where the same occur; (iii) “2014” shall be substituted in all places for “2029”, and “2002” shall be substituted in all places for “2004”; (iv) in the introductory paragraph and in the first sentence of paragraph (a) of Condition 3, “8.68 per cent.” shall be substituted in for “9.35 per cent.“; w in paragraph (c) of Condition 3, “7.75 per cent.” shall be substituted for “7.50 per cent.“; (vi) “22nd October” shall be substituted in all places for “15th October”; and (vii) the provisions relating to Talons shall not be applicable.

13 SUMMARY OF PROVISIONS RELATING TO THE BONDS WHILE REPRESENTED BY THE GLOBAL BONDS The Bonds of each Tranche will initially be represented by a Temporary Global Bond which will be deposited with a common depositary for Euroclear and Cedelbank. Interests in the Temporary Global Bond of each Tranche will be exchangeable for interests in the Permanent Global Bond for such Tranche on or after a date that is expected to be 24th November, 1999 or, in respect of the Temporary Global Bond representing the Tranche D Bonds, 1st December, 1999, upon certification of non-U.S. beneficial ownership in the form specified in the Trust Deed. Thefollowing is a summary of the provisions to be contained in the Trust Deed constituting the Bonds of each Tranche and in the Global Bonds (as defined below) of each Tranche which will apply to, and in some cases modify, the Conditions of such Bonds while such Bonds are represented by a Temporary Global Bond and/or a Permanent Global Bond (together the “Global Bonds “7. (1) The Permanent Global Bond of each Tranche will be exchangeable (free of charge to the holder) for definitive Bonds described below if(i) either Euroclear or Cedelbank is closed for business for a continuous period of 14 days (other than by reason of holiday, statutory or otherwise) or announces an intention permanently to cease business or does in fact do so and no alternative clearance system satisfactory to the Trustee is available, or (ii) the Bank, acting through the Branch, would suffer a disadvantageas a result of a change in laws or regulations (taxation or otherwise) or as a result of a change in the practice of Euroclear and/or Cedelbank which would not be suffered were the Bonds of such Tranche in definitive form and a certificate to such effect is given to the Trustee. Thereupon (in the caseof(i) above) the holder may give notice to the Trustee and the Branch and (in the case of (ii) above) the Branch may give notice to the Trustee and the Bondholders of the relevant Tranche, of the exchange of the relevant Permanent Global Bond for definitive Bonds on or after the Exchange Date (as defined below) specified in the notice. On or after the Exchange Date the holder of each Permanent Global Bond may surrender such Permanent Global Bond to or to the order of the Principal Paying Agent. In exchange for such Permanent Global Bond the Branch will deliver, or procure the delivery of, an equal aggregateprincipal amount of duly executed and authenticated definitive Bonds (having attached to them Coupons in respect of all Interest Payment Dates falling after the Exchange Date), security printed in accordance with any applicable legal and stock exchange requirements and in or substantially in the form set out in the relevant Trust Deed. On exchange in ft.111of such Permanent Global Bond, it will be cancelled and returned to the Branch or as the Branch may direct. “Exchange Date” means a day falling not less than 45 days after that on which the notice requiring exchange is given and on which banks are open for business in the city in which the specified office of the Principal Paying Agent is located and, except in the case of exchange pursuant to (i) above, in the city in which the relevant clearing system is located. (2) No payment will be made on a Temporary Global Bond unless exchange for an interest in the relevant Permanent Global Bond is improperly withheld or refused. Payments of principal and interest in respect of Bonds represented by a Global Bond will, subject as set out below, be made against presentation for endorsement and, if no further payment falls to be made in respect of the Bonds, surrender of such Global Bond to the order of the Principal Paying Agent or such other Paying Agent as shall have been notified to the Bondholders for such purposes. A record of each payment made will be endorsed on the appropriate schedule to the relevant Global Bond by or on behalf of the Principal Paying Agent, which endorsement shall be prima facie evidence that such payment has been made in respect of the Bonds. Payments of interest on a Temporary Global Bond will only be made upon certification as to non-U.S. beneficial ownership. (3) For so long as all the Bonds of a Tranche are represented by one or both of the relevant Global Bonds and such Global Bond is, or Global Bonds are, as the case may be, held on behalf of Euroclear and/or Cedelbank, notices to Bondholders of such Tranche may be given by delivery of the relevant notice to Euroclear and/or Cedelbank for communication to the relative Accountholders (as defined below) rather than by publication as required by Condition 11. Any such notice shall be deemed to have been given to the Bondholders on the seventh day after the day on which such notice is delivered to Euroclear and/or

14 Cedelbank as aforesaid. Notwithstanding the foregoing, so long as the Bonds of a Tranche are listed on the Luxembourg Stock Exchange and the rules of such exchange so require, notices will continue to be given by publication in a newspaper of general circulation in Luxembourg. (4) For so long as any of the Bonds of a Tranche is represented by a Global Bond and such Global Bond is held on behalf of Euroclear and/or Cedelbank, each person who is for the time being shown in the records of Euroclear and/or Cedelbank as the holder of a particular principal amount of such Bonds (each an “Accountholder”) (in which regard any certificate or other document issued by Euroclear or Cedelbank as to the principal amount of such Bonds standing to the account of any person shall be conclusive and binding for all purposes) shall be treated as the holder of such principal amount of such Bonds for all purposes (including for the purposes of any quorum requirements of, or the right to demand a poll at, meetings of the Bondholders of such Tranche) other than with respect to the payment of principal and interest on such principal amount of such Bonds, the right to which shall be vested, as against the Bank, acting through the Branch, and the Trustee, solely in the bearer of the relevant Global Bond in accordancewith and subject to its terms and the terms of the relevant Trust Deed. Each Accountholder must look solely to Euroclear or Cedelbank for its share of each payment made to the bearer of the relevant Global Bond. (5) Claims against the Bank, acting through the Branch, in respect of principal and interest on the Bonds represented by a Global Bond will be prescribed after 10 years (in the case of principal) and five years (in the case of interest) from the Relevant Date (as defined in Condition 6). (6) Cancellation of any Bond represented by a Global Bond and required by the Terms and Conditions of the Bonds of the relevant Tranche to be cancelled following its purchase will be effected by endorsement by or on behalf of the Principal Paying Agent of the reduction in the principal amount of the relevant Global Bond on the relevant schedule thereto.

RATINGS Ratings of the Bonds The following table sets forth the ratings assigned to the Bonds as of the date of this Offering Circular by Moody’s Investors Service, Inc. (“Moody’s”), Standard & Poor’s, a division of the McGraw-Hill Companies, Inc. (“Standard &Poor’s”), Fitch IBCA Limited (“Fitch IBCA”) and Thompson BankWatch, Inc. (“Bat&Watch”). Moody’s ...... _. ._ .. . . A2 Standard & Poor’s.. . . _. . . _. .. ._ AA- Fitch IBCA ...... _. ._ . . .. ._ AA- BankWatch ...... _ AA-

Ratings of the Bank and the Bank’s Debt The ratings assigned as of the date of this Offering Circular to the Bank’s short-term debt and long- term senior, senior subordinated and junior subordinated debt by Moody’s, Standard & Poor’s, Fitch IBCA and BankWatch are set out on page 29 of the Information Statement annexed hereto.

15 CONSOLIDATED CAPITALISATION OF THE BANK The following table sets forth, as of 30th June, 1999, (i) the consolidated capitalisation (liabilities and capital) of the Bank and (ii) the consolidated capitalisation (liabilities and capital) of the Bank, as adjusted to give effect to the issuance of the Bonds. 30th June, 1999 Actual As Adjusted(‘) USD 13~5nflions)( ‘) Due to banks ...... CHF216,335 CHF216,335 USD139,572 Due to non-bank customers . . . . 95,160 611393 95,160 61,393 Bonds and mortgage-backed bonds . 34,639 22,348 34,763 22,428 Other liabilities ...... 75,039 48,412 75,039 48,412 Total liabilities ...... 421,173 27 1,725 42 1,297 271,805 Equity capital and reserves (including minority interests) ._ .. . . 12,214 7,880 12,214 7,880 Total capitalisation ...... 433,387 279,605 433,511 279,685

(I) As adjusted to reflect the issuance of the Bonds. (2) Translation of Swiss francs into U.S. dollars has been made at the rate of CHF I .55 = USD I .OO(the 30th June, 1999 exchange rate). Such translation is provided solely for the convenience of the prospective investor. (3) As at 30th June, I999 the authorised share capital of the Bank was 2 I, I7 1,604 registered shares of nominal value CHF 100 and I5,3 16,000 bearer shares of nominal value CHFIOO, out of which 18,052, I I6 registered shares and I5,3 16,000 bearer shares were issued and fully paid-up. (4) Translation of euro into U.S. dollars has been made at the rate of El.0351 = U.S.Sl.00 (the 30th June, 1999 exchange rate). Such translation is provided solely for the convenience of the prospective investor. There has been no material change in the capitalisation of the Bank since 30th June, 1999.

USE OF PROCEEDS The net proceeds from the issuance of the Tranche A Bonds, expected to be approximately ~25,000,000, the Tranche B Bonds, expected to be approximately ~25,000,000, the Tranche C Bonds, expected to be approximately ~12,000,OOOand Tranche D Bonds, expected to be approximately ~15,000,000, will be used by the Branch for general corporate purposes, exclusively outside Switzerland.

16 THE LONDON BRANCH The Bank established a representative office in London in 1952; it became a branch in 1972. The Branch conducts an extensive banking business, concentrating primarily on wholesale and corporate banking transactions covering foreign exchange, money market, bullion and structured finance. Through such transactions, the Branch services the financial needs of its customer base in Europe as well as engages in proprietary trading.

CERTAIN TAX CONSIDERATIONS

Swiss Tax Considerations The following summary contains a description of certain aspects of the Swiss federal tax consequencesin respect of the purchase, ownership and disposition of Bonds. This summary is based on Swiss laws, regulations and the practice of the Swiss Federal Tax Administration now in effect, all of which are subject to change (possibly with retroactive effect). Prospective purchasers of the Bonds should consult their own tax advisers in determining the Swiss tax consequences to them of purchase, ownership and disposition of Bonds, including the application to their particular situation of the tax considerations discussed below.

Withholding Tax According to the present practice of the Swiss Federal Tax Administration, provided that the net proceeds from the issue of the Bonds are used by the Branch outside Switzerland, payments in respect of the Bonds by the Branch are not subject to Swiss withholding tax.

Issue or Transfer Ta There is no tax liability in Switzerland in connection with the issue and redemption of the Bonds, provided that the net proceeds from the issue of the Bonds are used by the Branch outside Switzerland. The transfer or sale of the Bonds by or on behalf of a purchaser or seller resident in Switzerland or Liechtenstein by or through a bank or another securities dealer (as defined in the Swiss Federal Stamp Tax Act) resident in Switzerland or Liechtenstein is subject to the Swiss Transfer Stamp Tax at a current rate of 0.15 per cent.

Other Taxes Under present Swiss law, a Bondholder that is a non-resident of Switzerland and that during the taxable year has not engaged in trade or business through a permanent establishment or otherwise within Switzerland and that is not subject to taxation by Switzerland for any other reason will be exempted from any Swiss Federal, cantonal or municipal income or other tax on gains on the sale of, or payments received under, the Bonds.

U.K. Income Tax Considerations The comments below are of a general nature based on current U.K. law and the U.K. Inland Revenue practice. They relate only to the position of persons that are the absolute beneficial owners of their Bonds and related interest (each, a “Beneficial Holder”) and may not apply to certain classes of persons, such as dealers. Any holder of Bonds that is in doubt as to its tax position should consult its professional advisers.

Payments on the Bonds For U.K. tax purposes, while the Bonds remain in bearer form and continue to be listed on the Luxembourg Stock Exchange or another stock exchange recognised by the U.K. Inland Revenue, payments of interest may be made without withholding or deduction for or on account of U.K. income tax where the payment of interest is made by a paying agent outside the United Kingdom and, where applicable, any other conditions imposed by regulations made under the Taxes Act (as amended by the Finance Act 1996) have been satisfied.

17 Where a person in the U.K. acts as a collecting agent, i.e. either: (i) acts as custodian of the Bonds and receives interest on the Bonds, or directs that interest on the Bonds be paid to another person, or consents to such payment; or (ii) collects or secures payment of or arranges to collect or secure payment of, or receives interest on, the Bonds for a Bondholder (except by means of clearing a cheque or arranging for the clearing of a cheque); the collecting agent will be required to withhold on account of U.K. income tax at the lower rate unless: (a) the person who is the beneficial owner of the Bonds and beneficially entitled to the interest is not resident in the U.K. and a declaration to that effect in the required form has been given to the collecting agent, or the Inland Revenue has issued a notice to the collecting agent; or (b) the relevant Bonds are held in a “recognised clearing system” and the collecting agent pays or accounts for the interest directly or indirectly to the clearing system or to a depositary for the clearing system and (in the latter case) a declaration to that effect in the required form has been given by the depositary; or (c) one of certain other exceptions to the obligation to withhold applies; and, in each case, conditions imposed by regulations may need to be satisfied for the exception to the withholding obligation to be available. In other cases,interest will be paid after deduction of U.K. income tax (currently at the lower rate of 20 per cent.). Holders in certain jurisdictions may be entitled to a refund of any U.K. income tax withheld or to make a claim for interest on the Bonds to be paid without, or subject to a reduced rate of, deduction or withholding under the provisions of an applicable double tax treaty. Interest on the Bonds constitutes U.K. source income for U.K. tax purposes and as such, may be subject to income tax by direct assessmenteven where paid without withholding. However, interest from a U.K. source received without deduction or withholding on account of U.K. tax will not be chargeableto U.K. income tax in the hands of a Beneficial Holder who is not resident for tax purposes in the United Kingdom unless such Beneficial Holder carries on a trade, profession or vocation in the United Kingdom through a U.K. branch or agency in connection with which the interest is received or to which the Bonds are attributable. There are exemptions for interest received by certain categories of agent (such as some brokers and investment managers).

C?K. corporation taxpayers In general, a Beneficial Holder which is within the charge to U.K. corporation tax will be charged to tax on all returns on and fluctuations in value of the Bonds (including those on disposal) broadly in accordance with its statutory accounting treatment. Such a Beneficial Holder will generally be charged to tax in each accounting period by reference to interest accrued in that period.

Other UK. taxpayers Taxation of chargeable gains. A disposal of Bonds by a Beneficial Holder who is not within the charge to U.K. corporation tax but who is either resident or ordinarily resident in the United Kingdom or carries on a trade, profession or vocation in the United Kingdom through a branch or agency to which the Bonds are attributable, may give rise to a chargeable gain or allowable loss for the purposes of the U.K. taxation of chargeable gains. Taxation of discount. Based on the Bank’s understanding of the Inland Revenue’s practice in this area, it is considered that the Bonds will not be treated as constituting “relevant discounted securities” for the purposes of Schedule 13 of the Finance Act 1996. Therefore, a holder who is within the scope of U.K. income tax as described above should not be liable to United Kingdom income tax on gains made on sales or other disposals (including redemption) of the Bonds.

18 UK. stamp duty and stamp duty reserve tax No U.K. stamp duty or stamp duty reserve tax is payable on the issue or transfer by delivery of a Bond or on its redemption.

Proposed EU withholding tax In May 1998, the European Commission presented to the Council of Ministers of the European Union a proposal to oblige Member States to adopt either a “withholding tax system” or an “information reporting system” in relation to interest, discounts and premiums. It is unclear whether this proposal will be adopted and if it is adopted, whether it will be adopted in its current form. The “withholding tax system” would require a paying agent established in a Member State to withhold tax at a minimum rate of 20 per cent. from any interest, discount or premium paid to an individual resident in another Member State unless such an individual presents a certificate obtained from the tax authorities of the Member State in which he is resident confirming that those authorities are aware of the payment due to that individual. The “information reporting system” would require a Member State to supply, to the other Member States, details of any payment of interest, discount or premium made by paying agents within its jurisdiction to an individual resident in another Member State. For these purposes, the term “paying agent” is widely defined and includes an agent who collects interest, discounts or premiums on behalf of an individual beneficially entitled thereto. If this proposal is adopted,it will not apply to payments of interest, discounts and premiums made before 1st January, 200 1. Bondholders who are individuals should note that, if this proposal is adopted in its current form, the provisions relating to additional amounts, referred to in respect of each Tranche in “Terms and Conditions of the Bonds - Taxation”, would not apply in respect of any withholding tax imposed as a result of the implementation of the proposal.

INDEPENDENT AUDITORS The Bank’s Annual Financial Statementsas of and for the year ended 3 1st December, 1998 have been audited by KPMG Klynveld Peat Marwick Goerdeler SA, independent public accountants, and their audit report in that capacity on the Bank’s AMUal Financial Statements is included in the Annual Report 1998 included in the Information Statement.

19 SUBSCRIPTION AND SALE The Manager has agreed with the Branch, pursuant to a subscription agreement relating to the Tranche A Bonds, the Tranche B Bonds and the Tranche C Bonds, dated 14th October, 1999 and proposes to agree with the Branch, pursuant to a subscription agreement relating to the Tranche D Bonds to be dated 21st October, 1999 (each, a “Subscription Agreement”), subject to the satisfaction of certain conditions, to subscribe and pay for the relevant Tranches of the Bonds, each at an issue price of 100.00 per cent. of the principal amount of the relevant Tranche. No Tranche of Bonds will be conditional upon the issue of any other Tranche of Bonds. The Bonds have not been and will not be registered under the U.S. Securities Act of 1933 (the “Securities Act”). The Manager has agreed that it will not offer, sell or deliver the Bonds (i) as part of their distribution at any time, or (ii) otherwise until 40 days after the later of the commencement of the offering and the date of issuance of the Bonds, within the United States or to, or for the account or benefit of, U.S. persons, and it will have sent to each dealer to which it sells the Bonds during the distribution compliance period a confirmation or other notice setting forth the restrictions on offers and sales of the Bonds within the United States or to, or for the account or benefit of, U.S. persons. In addition, until 40 days after the date of this Offering Circular, an offer or sale of the Bonds within the United States by a dealer (whether or not participating in the offering) may violate the registration requirements of the Securities Act. Terms used in this paragraph have the meanings given to them by Regulation S under the Securities Act (“Regulation S”). The Bonds are in bearer form and are subject to U.S. tax law requirements, and may not be offered sold or delivered within the United Statesor its possessionsor to a U.S. person, except in certain transactions permitted by U.S. tax regulations. Terms used in this paragraph have the meanings given to them by the U.S. Internal Revenue Code and regulations thereunder. The Bank and affiliates of the Bank may (but are not obligated to) engage in secondary market transactions for purposes of making a market in the Bonds, subject to certain limitations imposed by Swiss law. For purposes of the Securities Act, any sale of Bonds by the Bank or its affiliates in connection with such activities may be considered an issuance of such Bonds, with the result that a new 40-day restricted period might commence pursuant to Regulation S. In addition, any such sale by the Bank could be considered a new issuance of the relevant Bonds for U.S. federal income tax purposes. Accordingly, (i) neither the Bank nor any of its affiliates will sell the Bonds in connection with any such activities to a U.S. person (as defined in Regulation S under the Securities Act), and in connection with any such sale to a dealer, the Bank and its affiliates will include in the confirmation relating to such sale a notice setting forth the restrictions on offers and sales of the Bonds within the United States or to, or for the account or benefit of, U.S. persons during the restricted period (terms used in this paragraph have the meanings given to them by Regulation S); and (ii) the Bank w-111 not offer, sell or deliver, directly or indirectly, any of the Bonds within the United States, and, further, will not communicate directly or indirectly, with a prospective purchaser if either the relevant personnel of the Bank or the prospective purchaser is in the United States or its possessionsor otherwise involve the Bank’s United States branches or offices in the offer or sale of the Bonds (terms used in this paragraph have the meanings given to them by the U.S. Internal Revenue Code and regulations thereunder, including U.S. Treas. $ 1.163-5(c)(2)(i)(C)). The Manager representsand agreesthat: (i) it has not offered or sold and prior to the date six months after the date of issue of the Bonds will not offer or sell any Bonds to persons in the United Kingdom except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their businessesor otherwise in circumstances which have not resulted and will not result in an offer to the public in the United Kingdom within the meaning of the Public Offers of Securities Regulations 1995, as amended; (ii) it has complied and will comply with all applicable provisions of the Financial Services Act 1986 with respect to anything done by it in relation to the Bonds in, from or otherwise involving the United Kingdom; and (iii) it has only issued or passed on and will only issue or pass on in the United Kingdom any document received by it in connection with the issue of the Bonds to a person who is of a kind described in Article 1l(3) of the Financial Services Act 1986 (Investment

20 Advertisements) (Exemptions) Order 1996 (as amended) or is a person to whom such document may otherwise lawfully be issued or passed on.

GENERAL INFORMATION Listing Application has been made to list the Bonds on the Luxembourg Stock Exchange. Prior to such listing, a legal notice relating to the issue of the Bonds and copies of the Articles of Association of the Bank will be deposited with the Chief Registrar of the District Court of Luxembourg (Grefier en Chefdu Tribunal d’Arrondissement de et d Luxembourg) where such documents may be examined free of charge and copies obtained.

Documents Relating to the Bank and the Bonds Copies of the Articles of Association of the Bank, the latest annual consolidated and non- consolidated audited financial statements and semi-annual unaudited interim consolidated financial statementso f the Bank in accordance with Swiss GAAP, and copies of the Trust Deed constituting the Bonds of each Tranche (including the form of the Temporary Global Bond Permanent Global Bond and definitive Bonds for such Tranche) will be obtainable during the term of the relevant Bonds (during usual business hours) at the specified office of the Paying Agent in Luxembourg. The semi-annual unaudited interim non- consolidated financial statements of the Bank are not published.

No Material Adverse Change Since 3 1st December, 1998, the date of the Bank’s latest audited consolidated financial statements included herein, and except as disclosed herein, there has been no material adverse change in the financial condition or results of operations of the Bank and its subsidiaries, taken as a whole.

Litigation Other than as stated in the Information Statement annexed to this Offering Circular, the Bank is not involved in any litigation or arbitration proceedings the outcome of which may have or has had a significant effect on the financial position of the Bank.

Authorisation The issue of each Tranche of the Bonds was authorised and approved by a certificate of the Chief Financial Officer of the Credit Suisse First Boston businessuni t of the Bank (acting in consultation with the Chief Executive Officer of the Credit Suisse First Boston businessuni t of the Bank) dated 8th October, 1999. No specific resolution of the Board of Directors of the Bank was required.

Clearing Systems The Bonds have been accepted for clearance through Euroclear and Cedelbank and they have been assigned the following Common Code of each Tranche and International Securities Identification Number (ISIN): Common Code ISIN Tranche A 010273340 XSO102733408 010273340 Tranche B 010273331 XSO102733317 010273331 Tranche C 010273323 XSO102733234 010273323 Tranche D 010297893 XSO102978938 010297893

21 European Economic and Monetary Union The third stage of European economic and monetary union commenced on 1st January, 1999 when the value of the euro as against the currencies of the member states participating in the third stage was irrevocably fixed and the euro became a currency in its own right. Each euro is denominated into 100 cents and, for a transitional period of three years, into participating member currencies at the following fixed exchange rates: Austrian schilling 13.7603 Irish punt 0.787564 Belgian franc 40.3399 Italian lira 1936.27 Dutch guilder 2.20371 Luxembourg franc 40.3399 Finnish marl&a 5.94573 Portuguese escudo 200.482 French franc 6.55957 Spanish peseta 166.386 German mark 1.95583 With effect from 1st January, 2002 the participating member currencies will cease to exist.

22 ANNEX A CREDIT SUISSE FIRST BOSTON INFORMATION STATEMENT

23 [THIS PAGE IS INTENTIONALLY LEFT BLANK]

24 CREDIT SUISSE FIRST BOSTON INFORMATION STATEMENT

April 20, 1999 TABLE OF CONTENTS

PRESENTATION OF FINANCIAL AND MANAGEMENT’S DISCUSSION AND OTHER INFORMATION ...... 1 ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ...... 17 CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS ...... 2 THE BANK ...... -...... 30 OVERVIEW...... 3 MANAGEMENT ...... _... 45 RELATIONSHIP BETWEEN THE BANK REGULATION AND SUPERVISION. . ..s...... 47 5 AND CREDIT SUISSE GROUP ._...... BUSINESS CONSIDERATIONS ...... 50 CONSOLIDATED CAPITALLZATION SUMMARY OF SIGNIFICANT ...... m...... e 7 OF THE BANK DIFFERENCES BETWEEN SWISS SELECTED CONSOLIDATED FINANCIAL AND U.S. GAAP ...... a...... 50 INFORMATION ...... 8 CREDIT SUISSE FIRST BOSTON SELECTED UNAUDITED PRO FORMA ANNUAL REPORT 1998 ...... ANNEX I CONSOLIDATED FINANCIAL INFORMATION ...... _...... s...... 12 DISCUSSION OF UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION ..*...... 15 PRESENTATION OF FINANCIAL AND OTHER INFORMATION

Credit Suisse First Boston, a Swiss bank (the “Bank”), prepares its consolidated financial statements in Swiss francs. Solely for the convenience of prospective investors, this Credit Suisse First Boston Information Statement (the “Information Statement”) contains translations of certain Swiss franc amounts into U.S. dollar amounts at specified rates. Unless otherwise stated, the translations of Swiss francs into U.S. dollars contained herein (i) in the case of the unaudited pro forma consolidated income statement data for the year ended December 31, 1996 contained herein, have been made at the average of the daily exchange rates prevailing in the Swiss foreign exchange market on each day in 1996 for the purchase of U.S. dollars for Swiss francs and used by the Bank in its unaudited pro forma consolidated financial statements for the year ended December 3 1, 1996 (the “1996 Average Exchange Rate”), which was CHF 1.22 = USD 1.00; (ii) in the case of the audited consolidated income statement data for the year ended December 3 I, 1997 contained herein, have been made at the average of the daily exchange rates prevailing in the Swiss foreign exchange market on each day in 1997 for the purchase of U.S. dollars for Swiss francs and used by the Bank in its audited consolidated financial statements for the year ended December 3 1, 1997 (the “1997 Average Exchange Rate”), which was CHF 1.44 = USD 1.OO; (iii) in the case of the audited consolidated income statement data for the year ended December 3 1, I998 contained herein, have been made at the average of the daily exchange rates prevailing in the Swiss foreign exchange market on each day in 1998 for the purchase of U.S. dollars for Swiss francs and used by the Bank in its audited consolidated financial statements for the year ended December 3 1,1998 (the “1998 Average Exchange Rate”), which was CHF 1.43 = USD 1.OO; (iv) in the case of the unaudited pro forma consolidated balance sheet data as at December 3 1, 1996 contained herein, have been made at the exchange rate prevailing on December 3 1,1996 in the Swiss foreign exchange market for the purchase of U.S. dollars for Swiss francs and used by the Bank in its unaudited pro forma consolidated financial statements as of December 31, 1996 (the “December 31, 1996 Exchange Rate”), which was CHF 1.34 = USD 1.00; (v) in the case of the audited consolidated balance sheet data as at December 3 1, 1997 contained herein, have been made at the exchange rate prevailing on December 3 1, 1997 in the Swiss foreign exchange market for the purchase of U.S. dollars for Swiss francs and used by the Bank in its audited consolidated financial statements as of December 31, 1997, which was CHF 1.44 = USD 1.00 (the “December 31, 1997 Exchange Rate”); and (vi) in the case of the audited consolidated balance sheet data as at December 3 1, 1998 contained herein, and all other cases, have been made at the exchange rate prevailing on December 3 1, 1998 in the Swiss foreign exchange market for the purchase of U.S. dollars for Swiss francs, rounded to two decimal places, which was CHF 1.38 = USD 1.00 (the “December 3 1, 1998 Exchange Rate”). The exchange rate prevailing on April 19, 1999 in the Swiss foreign exchange market for the purchase of U.S. dollars for Swiss francs was CHF 1.5 1 = USD 1.OO. No representation is made that Swiss francs have been, could have been, or could be, converted into U.S. dollars at the rates indicated or at any other rate. The current organization of Credit Suisse Group is in large part the result of a reorganization (the “Reorganization”) that was effective as of January 1, 1997. Pursuant to the Reorganization, Credit Suisse Group changed its name from CS Holding and divided the principal businesses in which it operates into four distinct special&d business units grouped under two Swiss banks, Credit Suisse (formerly known as Schweizerische Volksbank) (“Credit Suisse”) and the Bank (formerly known as Schweizerische Kreditanstalt (Credit Suisse)). On December 15, 1997, Credit Suisse Group and “Winterthur” Swiss Insurance Company (“Winterthur”), a global insurance company, consummated a merger (the “Winterthur Merger”) by means of an exchange of Credit Suisse Group shares for Winterthur shares. As a result of the Winterthur Merger, Winterthur became the fifth specialized business unit of Credit Suisse Group. The Reorganization also included a restructuring of the Bank and the addition to and subtraction from it of certain businesses. The principal companies through which Credit Suisse Group conducts its investment banking activities, Credit Suisse First Boston, Inc. and its subsidiaries (“CSFB Inc.“), a U.S. holding company formerly known as CS First Boston, Inc., and Credit Suisse First Boston (International) AG (“CSFB AG”), formerly known as CS First Boston (Europe) AG, a Swiss holding company which operates through subsidiaries in Europe and the Pacific, were also transferred with their respective subsidiaries to the Bank in a series of transactions. Because the Reorganization was effective as of January 1, 1997, only limited historical consolidated financial statements or other information are available for the Bank as reorganized. Annex I to this Information Statement, the Bank’s Annual Report for 1998, contains historical audited consolidated financial statements for the Bank as of and for the years ended December 3 1, 1998 and December 3 1, 1997, comprising the first two years of the Bank’s

1 operation after the Reorganization (collectively, the “Annual Financial Statements”). This Information Statement also contains certain limited unaudited pro forma financial information for the Bank and its consolidated subsidiaries as of and for the year ended December 3 1, 1996 (prior to the Reorganization). See “Selected Unaudited Pro Forma Consolidated Financial Information” and “Discussion of Unaudited Pro Forma Consolidated Financial Information.” The historical audited financial statements for the Bank as of and for the year ended December 3 1, 1996 do not reflect the complete Reorganization, and therefore are not directly comparable to the Annual Financial Statements and are not presented herein.

The Annual Financial Statements and unaudited pro forma consolidated financial information contained herein have been prepared in accordance with Swiss accounting rules for banks (“Swiss GAAP”), which differ in certain significant respects from generally accepted accounting principles in the United States (“U.S. GAAP”). For a summary of certain significant differences between Swiss GAAP and U.S. GAAP as they relate to the Bank, see “Summary of Significant Differences between Swiss and U.S. GAAP.” Unless the context otherwise requires, as used herein, the “Bank” refers to Credit Suisse First Boston together with its consolidated subsidiaries.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

The Bank and its subsidiaries may from time to time make written or oral forward-looking statements, including in this Information Statement, in filings with Swiss regulators or the U.S. Securities and Exchange Commission (the “Commission”), in reports to shareholders and in other communications. Examples of such forward-looking statements include, but are not limited to (i) statements of plans, objectives or goals of the Bank or its management; (ii) statements of future economic performance; (iii) statements expressing the potential effect on future performance of certain contingencies and (iv) statements of assumptions underlying any such statements. Words such as “believes,” “anticipates,” “expects, ” “intends” and “plans” and similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements. The Bank does not intend to update these forward-looking statements. By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks exist that predictions, forecasts, projections and other outcomes described in forward-looking statements will not be achieved. The Bank cautions readers that a number of important factors could cause actual results to differ materially from the plans, objectives, expectations, estimates and intentions expressed in such forward-looking statements. These factors include: (i) inflation, interest rate, market and monetary fluctuations; (ii) the effects of, and changes in, fiscal, monetary, trade and tax policies; (iii) the effects of competition in the geographic and business areas in which the Bank conducts its operations; (iv) the strength of the global economy in general and the strength of the economies of the countries in which the Bank conducts operations; (v) the effects of changes in laws, regulations or accounting policies or practices; (vi) the ability to increase market share and control expenses; (vii) actions taken by regulators with respect to the Bank’s businesses and practices in one or more of the countries in which the Bank conducts operations; (viii) the timely development of and acceptance of new products and services of the Bank and the perceived overall value of these products and services by users; (ix) political and social developments, including war, civil unrest or terrorist activity; (x) acquisitions; (xi) technological changes; (xii) the possibility of foreign exchange controls, expropriation, nationalization or confiscation of assets in countries in which the Bank conducts operations; and (xiii) the Bank’s success at managing the risks involved in the foregoing. The Bank cautions that the foregoing list of important factors is not exclusive; when relying on forward-looking statements to make decisions with respect to the Bank, investors and others should carefully consider the foregoing factors and other uncertainties and events.

2 General The Bank is a Swiss bank and is one of the largest banking institutions in the world, with total consolidated assets of approximately CHF 404 billion (USD 293 billion) and total consolidated shareholder’s equity of approximately CHF 10.3 billion (USD 7.5 billion), in each case at December 31, 1998. As a leading global investment bank, the Bank provides a wide range of financial services from locations around the globe to corporate, institutional and public sector clients worldwide. The Bank was established on July 5, I856 and registered in the Commercial Register of the Canton of Zurich on April 27, 1883 for an unlimited duration under the name of Schweizerische Kreditanstalt. The Bank’s name was changed to Credit Suisse First Boston on December 1I, 1996 (by entry in the commercial register), in connection with the Reorganization. The Bank is a joint stock corporation established under Swiss law. The Bank’s registered head office is in Zurich, and it has additional executive offices and principal branches located in London, New York, Hon,0 Kong, Singapore and Tokyo. The Bank and its consolidated subsidiaries employed approximately 15,670 people at December 3 1, 1998. Credit Suisse Group, which owns 100% of the voting shares of the Bank, is now principally composed of five business units. The Bank principally consists of two of these business units, CREDIT SUISSE FIRST BOSTON (“CSFB”) and CREDIT SUISSE ASSET MANAGEMENT (“CSAM”). CSFB is engaged, directly and through affiliates, in the investment banking, equity, fixed income and derivatives and private equity investment businesses on a worldwide basis. CSAM, directly and through subsidiaries, offers asset management, mutual fund and investment advisory services to institutional investors worldwide. For a description of the three remaining Credit Suisse Group business units, see “Relationship Between the Bank and Credit Suisse Group.” The CSFB business unit has four core businesses: (i) the Investment Banking Division (“IBD”), (ii) the Fixed Income and Derivatives Division (“FID”), (iii) the Equity Division and (iv) the Private Equity Division (“PED”). IBD serves a broad range of users and suppliers of capital around the world and provides financial advisory services. FID is active in fixed income trading (including foreign exchange and precious metals trading) and derivative and risk management products. Prior to January 1, 1999, the fixed income business of FID was conducted by the Fixed Income Division and the derivatives business of FID was conducted by Credit Suisse Financial Products (“CSFP”). These two businesses were integrated into FID effective January 1, 1999 (the “FID Integration”). The Equity Division is active in equity tradin,,0 with trading partners worldwide. Through PED, CSFB and other Credit Suisse Group entities participate in privately negotiated equity investments around the world. PED’s investments are funded by Credit Suisse Group rather than by the Bank, and as a result, the Bank does not bear the risks or real& any benefits associated with the returns on such investments. However, the Bank is responsible for certain personnel expenses of, and receives certain fee-based income from, PED. See “The Bank-CSFB Business Unit-Private Equity Division.” The CSAM business unit is divided into its institutional asset management and advisory business and its mutual fund activities. The Bank is not dependent for its existence on any patents or license agreements that are of significance for the business or profitability of the Bank. The purpose of the Bank is set forth in its Articles of Association, and is described under “The Bank.” The Bank’s registered head office is located at Uetlibergstrasse 23 1, CH-8045, Zurich, Switzerland, and its telephone number is 41-1-333-5555. The London Branch is located at 5 , London El4 4QR, England, and its telephone number is 44-171-888-8888. The New York Branch is located at Eleven Madison Avenue, New York, NY 10010-3629, and its telephone number is 212-325-2000.

Recent Developments On February 15, 1999, Credit Suisse Group announced that the Bank had agreed to acquire Warburg Pincus Asset Management, Inc. (“Warburg Pincus”) for a price including an initial USD 450 million and an additional USD 200 million earn-out over three years (the “Warburg Acquisition”). Warburg Pincus, a leading U.S. asset manager with 260 employees and USD 22 billion in assetsunder management as of December 3 1,1998, will become a part of CSAM upon consummation of the transaction. The transaction is expected to close by mid- 1999, subject to the receipt of regulatory approvals, and would raise the assets under management by CSAM to over USD 230 billion. The Warburg Acquisition is an expansion of a strategic relationship, initiated in June 1998, between CSAM

3 and Warburg Pincus, and is intended to allow the two parties to combine their complementary investment strengths and product lines. The transaction will also include a 19.9% passive investment by Credit Suisse Group in the private equity activities of Warburg, Pincus & Co. On April 15,1999, Credit SuisseGroup purchasedfrom Swiss ReinsuranceCompany (“Swiss Re”) the 20% interest owned by Swiss Re in CSFP (the “CSFP Repurchase”) which, when combined with the Bank’s existing 40% direct and 40% indirect ownership of CSFP, resulted in CSPP becoming a wholly-owned subsidiary of Credit Suisse Group. With the CSFP Repurchase completed, certain businesses currently conducted by other subsidiaries of the Bank will be transferred to CSFP. Management believes that this consolidation will streamline and strengthen the Bank’s control structure, eliminate unnecessary infrastructure overlaps and facilitate the FID Integration. For a description of how the Bank funds its business, including the acquisitions described above, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Liquidity and Capital Resources-Funding and Capital Strategy.”

4 RELATIONSHIP BETWEEN THE BANK AND CREDIT SUISSE GROUP The Bank is part of Credit Suisse Group, which also includes Credit Suisse, a Swiss bank conducting Swiss domestic banking for individual and corporate clients and global private banking, and Winterthur, a global insurance company. Credit Suisse Group is among the world’s largest financial institutions and is active on six continents and in all major financial centers. Credit Suisse Group is a publicly-held corporation organized in Switzerland, and its securities are listed on the Swiss Exchange as well as on the Frankfurt and Tokyo Stock Exchanges. Other than the group of affiliated entities known as the BZ Group, Credit Suisse Group is not aware of any other shareholders that control 5% or more of Credit Suisse Group’s outstanding share capital as of December 3 1,1998. The following chart illustrates the structure of Credit Suisse Group and the placement of the Bank within it.

I 1

I ( CREDIT SUISSE FIRST BOSTON CREDIT SUISSE ‘WINTERTHUR” Swiss Insurance a Swiss Bank with international activities a Swiss Bank III Company

CREDfl’ i ASSET CREDIT PRIVATE SUfSSE / MANAGEMENT SUISSE BANKING l l global l - Swiss l global private l global I global institutional investment asset management, domestic banking insurance 1 banking mutual funds banking business and investment (individual l global fixed advisory and 1 income, corporate derivatives clients) 1 and foreign exchange 1 I l global equity ; 1 I CREDIT 1 First Boston I Directly Held I i SUISSE I Private Equity 1r-l Private Banks )

(investments ant

5 The five principal business units of Credit Suisse Group have been organized to operate separately in the market, each focused on providing a distinct set of services to customers. The current organization of Credit Suisse Group is in large part the result of the Reorganization. Pursuant to the Reorganization, Credit Suisse Group changed its name from CS Holding and divided the principal businesses in which it then operated into four distinct specialized business units grouped in two Swiss banks, Credit Suisse (formerly known as Schweizerische Volksbank) and the Bank. The Bank (formerly known as Schweizerische Kreditanstalt (Credit Suisse)) is composed of the global investment banking and trading business unit under the trade name CREDIT SUISSE FIRST BOSTON and the institutional assetmanagement business unit under the trade name CREDIT SUISSE ASSET MANAGEMENT. Credit Suisse is composed of the Swiss domestic banking business unit and the global private banking business unit under the trade names CREDIT SUISSE and CREDIT SUISSE PRIVATE BANKING, respectively. Both the Bank and Credit Suisse are banks regulated by the Swiss Federal Banking Commission, and both report to the Swiss National Bank. See “Regulation and Supervision- Regulation and Supervision of the Bank in Switzerland.” The Reorganization also included a restructuring of the Bank and the addition to and subtraction from it of certain businesses. Most of the private banking operations and all of the Swiss retail customer business of the Bank were transferred to Credit Suisse. In addition, most of the corporate and investment banking operations and institutional asset management activities that had been conducted at Schweizerische Volksbank were transferred to the Bank. The principal companies through which Credit Suisse Group conducts its investment banking activities, CSFB Inc., a U.S. holding company formerly known as CS First Boston, Inc., and CSFB AC, formerly known as CS First Boston (Europe) AC, a Swiss holding company which operates through subsidiaries in Europe and the Pacific, were transferred with their respective subsidiaries to the Bank in a series of transactions. For legal, regulatory and business reasons, it was not possible by January 1,1997 to transfer certain private banking operations of the Bank outside of Switzerland to Credit Suisse. Credit Suisse Group and the Bank expect that the transfer of such operations will be completed over time. As an ancillary component of the Reorganization, the Bank has embarked on a program in which it will determine whether to change the legal structures of its operations in each of the geographic regions in which it is active. The purposes of this program are to bring the regional holding structures, corporate organizations and business centers into line with the structure adopted in the Reorganization, to respond to recent changes in the regulatory environments in certain areas and to increase the Bank’s overall efficiency. For an example of such structural changes to be undertaken in connection with the CSFP Repurchase, see “Overview - Recent Developments.” The Bank expects to complete this program within the next few years. On December 15, 1997, Credit Suisse Group and Winterthur, a global insurance company, consummated the Winterthur Merger by means of an exchange of Credit Suisse Group’s sharesfor Winterthur shares. As a result of the Winterthur Merger, Wmterthur becamethe fifth speciahzed business unit of Credit Suisse Group. Winterthur is a global insurance group and one of the largest insurers in Europe. Winterthur is reported by industry publications to be a market leader in Switzerland, its home market, with a market share of 22%, and the sixth largest insurer in Europe. On March 3, 1999, the Bank paid a dividend of CI-IF 240 million (USD 164.4 million, based on the exchange rate prevailing on March 3, 1999 of CHF 1.46 = USD 1.OO) to its shareholder. On March 30, 1998, the Bank paid a dividend of CI-IF 850 million (USD 559 million, based on the exchange rate prevailing on March 30, 1998 of CHF 1.52 = USD 1.00) to its shareholders. A summary of dividends and net (losses)/profits per share of the Bank’s equity securities for its five most recent fiscal years is set forth below. Information for periods prior to 1997 is for the former Credit Suisse, prior to the Reorganization. Per share”’ issued (CHF) 1998 1997 1996 1995 1994 Dividend ...... *...... 7.35 27.00 o.00 25.00 25.00 Consolidated net (loss)/profit (after minority interests)‘2’ *. . . . . (3 1.28) 38.56 (79.34) 47.50 47.07 (I) Bearer sharesand registeredshares of CBF 100 nominal value each. (2) Thesefigures differ from previouslypublished information, which presentednet profit/loss for the Bank on an unconsolidated (Stammhaus) basis.

6 CONSOLIDATED CAPITALIZATION OF THE BANK The following table sets forth, as of December 3 1,1998 and December 3 1,1997, the consolidated capitahzation (liabilities and capital) of the Bank. This table should be read in conjunction with the information included under the heading “Selected Consolidated Financial Information.”

December 31,199s December 31, 1997 (in CHF (in USD (in CHF (in USD millions) millions)“’ millions) millions)‘z’ Due to banks ...... 186,722 135,306 206,600 143,472 Due to non-bank customers ...... 87,350 63,297 116,831 81,133 Bonds and mortgage-backed bonds ...... 34,877 25,273 34,997 24,303 Other liabilities...... 84,405 61,163 83,169 57,757 Total liabilities...... 393,354 285,039 441,597 306,665 Equity capital and reserves (including minority interests)‘” ...... 10,348 7,499 11,297 7,845 Total capitalization’4’ ...... 403,702 292,538 452,894 314,510

(I) Translation of Swiss francs into U.S. dollars has been made at the rate of CHF 1.38 = USD 1.00 (the December 31, 1998 Exchange Rate). Such translation is provided solely for the convenience of the prospective investor. (2) Translation of Swiss francs into U.S. dollars has been made at the rate of CHF 1.44 = USD I .OO(the December 3 1, I997 Exchange Rate). Such translation is provided solely for the convenience of the prospective investor. (3) At meetings of the Bank’s shareholders, each share is entitled to one vote. The shares of the Bank are not listed on any stock exchange. The Bank has no warrants or convertible rights on its own shares outstanding. No share capital increases occurred during 1997 or 1998 except for share capital increases of (a) CHF 1 billion, which occurred as of February 6, 1997 in connection with the Reorganization, and (b) CHF 111.5 million, which occurred as of July 3 I, 1998 in connection with the Garantia Acquisition (as defined herein). (4) The Board of Directors of the Bank is authorized at any time through March 27, 2000 to increase the share capital of the Bank in accordance with Article 3.1 of the Bank’s Articles of Association, up to a maximum of CHF 338,483,800, through the issue of a maximum of 3,884,838 registered shares, to be fully paid up, with a nominal value of CHF 100 per share. Partial increases are permitted. The Board of Directors is responsible for deciding the amount of the tranches, the issue price, the payment terms and the other terms of the shares. Once acquired, the new shares would be subject to restrictions on transferability pursuant to Article 4.5 of the Articles of Association. For further information on the share capital of the Bank, see page 68 of the Bank’s Annual Report for 1998, which is attached as Annex I hereto.

7 SELECTED CONSOLIDATED FINANCIAL INFORMATION The following consolidated financial information as of and for the years ended December 3 1, 1998 and December 3 1, 1997 has been derived from the Annual Financial Statements included in Annex I to this Information Statement. The historical audited financial statements for the Bank as of and for the year ended December 3 1,1996 do not reflect the complete Reorganization, and therefore are not directly comparable to the Annual Financial Statements and are not presented herein. The Annual Financial Statements have been prepared in accordance with Swiss GAAP, which differ in certain respects from U.S. GAAP. See “Summary of Significant Differences Between Swiss and U.S. GAAP” for a description of the principal differences between Swiss and U.S. GAAP as they relate to the Bank. There has been no material adverse change in the financial condition of the Bank since December 3 1, 1998. Since the Bank’s establishment, there have been no material interruptions in its overall business activities. Consolidated Income Statement of the Bank Year ended December 31, 1998 Year ended December 31,1997 (in CHF (in CHF (ii USD millions) millions) millions)‘z) Results from Interest Business Interest and discount income...... 14,542 10,169 13,520 9,389 Interest and dividend income from trading portfolio ...... 5,530 3,867 5,679 3,944 Interest and dividend income from financial investments . . 228 159 257 178 Interest expense...... ( 17,897) (12,515) A(17411) (12,091) Net Interest Income ...... 2,403 1,680 2,045 1,420 Results from Commission and Service Fee Activities Commission income from lending activities ...... 235 164 253 176 Commission from securities and investment transactions . . 4,928 3,446 3,729 2,590 Commission from other services ...... 9 44 30 Commission expense...... (2::) (142) (268) (186) Net Commission and Service Fee Income ...... 4,972 3,477 3,758 2,610 Net Trading Income ...... 1,603 1,121 4.76 lc3’ 3,306’3’ Other Ordinary Income Income from the sale of financial investments ...... 248 174 5oC3’ 35C3’ Income from investments in participations ...... 29 20 55 38 of which from participations valued according to the equity method...... 22 IS 31 21 of which from other non-consolidated participations. ... 7 5 24 17 Real estate income ...... 29 20 73 50 Sundry ordinary income ...... 155 108 121 84 Sundry ordinary expenses ...... (162) (113) (71) (49) Net Other Ordinary Income ...... 299 209 228’3’ 158’3’ Net Operating Income ...... 9,277 6,487 10,792 7,494 Operating Expenses Personnel expense ...... WW (4,148) W’32) (3,807) Other operating expenses...... A(2 079) (1,454) ( 1,639) (1,138) Total Operating Expenses ...... WI 1) (5,602) (7,121) (4,945) Gross Operating Prolit ...... 1,266 885 3,67 I 2,549 Depreciation and write-downs on noncurrent assets ...... (352) (246) (323) (224) Valuation adjustments, provisions and losses ...... (1,871) (1,308) (‘510) (424) Total Depreciation and Valuation Adjustments ...... W23) (1,554) (933) (648) Consolidated (loss)/profit before extraordinary items and taxes ...... (957) (669) 2,738 1,901 Taxes on (loss)/prolit before extraordinary items ...... (8’3) (56) (895) (621) Consolidated net (loss)/profit before extraordinary items and related taxes ...... (1,037) (725) 1,843 I.280 Extraordinary items, net of related taxes ...... 29 (523 (363 Consolidated net (loss)/profit ...... (9;:) (696) 1,320 917 of which minority interests ...... 24 17 106 74 Consolidated net (lo&/profit (after minority interests) ... W20) (713) 1,214 - 843

(1) Translation of Swiss francs into U.S. dollars has been made at the rate of CHP 1.43 = USD I .OO(the 1998 Average Exchange Rate). Such translation is provided solely for the convenience of the prospective investor. (2) Translation of Swiss francs into U.S. dollars has been made at the rate of CHP I .44 = USD 1.OO (the 1997 Average Exchange Rate). Such translation is provided solely for the convenience of the prospective investor. (3) These figures differ from previously published information to reflect a CHP 30 million (USD 21 million) reclassification from a deduction against net trading income to income from the sale of financial investments, in conformity with the 1998presentation.

9 Consolidated Balance Sheet of the Bank As of December 31, 199% As of December 31,1997 (in CHF (in CHF millions) millions) A.%&5 Cash ...... 1,179 854 2,049 1,423 Money market papers ...... 18,864 13,670 16,135 11,205 Due from banks ...... 139,996 101,446 143,992 99,994 of which securities lending and reverse repurchase agreements. .. 78303 56,741 103,288 71,728 Due from customem ...... 62,936 45,606 106,8 17 74,178 of which securities lending and reverse repurchase agreements . . _ 28,634 20,749 62,030 43,076 Mortgages ...... 7,246 5,25 I 7,164 4,975 Securities and precious metals trading portfolios ...... 100,964 73,162 102,385 71,101 Financial investments ...... 10,194 7,387 IO 004’3’ 6,947’3’ Non-consolidated participations...... 445 322 ‘272 189 Tangible fixed assets ...... 4,541 3,29 I 4,569 3,173 Intangible assets ...... 579 420 - - Accrued income and prepaid expenses...... 6,882 4,987 5,889 4,090 Other assets...... 49,876 36,142 53,6 I g(3) 37,235’3’ of which replacement value of derivatives ...... 46,385 I 33 612 50,946 I 35 379 TOTAL ASSETS ...... 403 702 292,538 -1- 452,894 ---314510 Total subordinated claims ...... 2,957 2,143 2,398 1,665 Total due from non-consolidated participations and qualified shareholders ...... 243 176 693 481 Liabilities and Shareholder’s equity Liabilities in respect of money market paper ...... 19,935 14,446 17,75 I 12,327 Due to banks ...... 186,722 135,306 206,600 143,472 of which securities borrowing and repurchase agreements...... 74,918 54,288 84,853 58,926 Due to customers, savings and investment deposits ...... 2,034 1,474 2,295 1,594 Due to customers, other deposits...... 85,316 61,823 114,536 79,539 of which securities borrowing and repurchase agreements...... 29,844 21,626 63,786 44,296 Bonds and mortgage-backed bonds ...... 34,877 25,273 34,997 24,303 Accrued expenses and deferred income ...... 9,237 6,693 8,23 1 5,716 Other liabilities ...... 53,453 38,734 54,188 37,63 1 of which replacement value of derivatives ...... 49,502 35,871 50,650 35,174 Valuation adjustments and provisions ...... 1,780 A 1290 A 2 999 A 2 083 Total liabilities ...... 393,354 285,039 441,597 306,665 Shareholder’s equity Reserve against general banking risks ...... 0 0 412 . 286 Share capital ...... 3,260 2,362 3,149 2,187 Capital reserves...... 5,268 3,818 4,307 2,99 1 Retained earnings ...... 1,123 814 1,030 715 Minority interests in shareholder’s equity ...... 1,693 1,227 1,079 749 Consolidated net (loss)/ profit ...... (9%) (722)“” 1,320 917 of which minority interests ...... 24 17 106 74 Total shareholder’s equity ...... 10,348 A 7 499 11297 7,845 403,702 452894 TOTAL LIABILITIES AND SHAREHOLDER’S EQWTY ..... A292 538 A ---314510 Total subordinated liabilities ...... 13,263 9,61 I 13,265 9,212 Total liabilities due to non-consolidated participations and qualified shareholders ...... 1,159 840 1,263 877 (I) Translation of Swiss francs into U.S. dollars has been made at the rate of CHF 1.38 = USD 1.OO (the December 3 I, 1998 Exchange Rate). Such translation is provided solely for the convenience of the prospective investor. (2) Translation of Swiss francs into U.S. dollars has been made at the rate of CHF 1.44 = USD 1.00 (the December 3 I, 1997 Exchange Rate). Such translation is provided solely for the convenience of the prospective investor. (3) These figures differ from previously published information to reflect a CHF 247 million (USD 172 million) reclassification from other assets to financial investments, in conformity iith the 1998 presentation. (4) This figure differs from that appearing in the Consolidated Income Statement of the Bank because the former has been calculated based upon the December 31, lW8 Exchange Rate while the latter has been calculated based upon the 1998 Average Exchange Rate.

10 Capital Adequacy:

As of December 31, 1998 As of December 31,199~ (in CHF millions, (in USD millions, (in CHF millions, (in USD millions, except percentages) except percentages)“’ except percentages) except percentages)‘2’ Tier 1 capital’3’...... _...... 9,529 6,905 10,446 7,254 Total capital’“) ...... 17,446 12,642 18,463 12,822 BIS Tier I ratioc4’ ...... 8.4% 8.4% 8.5% 8.5% BIS total capital ratio@‘...... 15.4% 15.4% 14.9% 14.9%

(I) Translation of Swiss francs into US. dollars has been made at the rate of CHF 1.38 = USD I .OO(the December 3 1, 1998 Exchange Rate). Such translation is provided solely for the convenience of the prospective investor. (2) Translation of Swiss francs into U.S. dollars has been made at the rate of CHF 1.44 = USD 1.00 (the December 3 1, 1997 Exchange Rate). Such translation is provided solely for the convenience of the prospective investor. (3) Calculated on a consolidated basis pursuant to Swiss banking law and regulations. (4) Tier 1 capital (consisting primarily of shareholder’s equity) as a percentage of the Bank’s risk-weighted assets, calculated on a consolidated basis in accordance with the recommendations (the “Basle Recommendations”) of the Basle Committee on Banking Supervision of the Bank for International Settlements (“BIS”). (5) Total capital as a percentage of the Bank’s risk-weighted assets, calculated on a consolidated basis in accordance with the Basle Recommendations.

11 SELECTED UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION

Introduction The following unaudited pro forma consolidated financial information has been prepared on the basis described in “Discussion of Unaudited Pro Forma Consolidated Financial Information.” Such information has been prepared on a pro forma basis to give effect to the Reorganization and assumes (i) in the case of the unaudited pro forma consolidated statement of operations data, that the Reorganization had occurred on January 1, 1996 and (ii) in the case of the unaudited pro forma consolidated balance sheet data, that the Reorganization and an investment by Credit Suisse Group in perpetual non-cumulative preferred stock in the amount of CHF 500 million (USD 373 million) issued by an offshore subsidiary of the Bank on March 3 1, 1997 (the “Preferred Stock Investment”) had occurred on December 3 1,1996. The unaudited pro forma consolidated financial information has been prepared in accordance with Swiss GAAP, which differ in certain respects from U.S. GAAP. See “Summary of Significant Differences Between Swiss and U.S. GAAP” for a description of the principal differences between Swiss and U.S. GAAP as they relate to the Bank. The unaudited pro forma consolidated financial information has been presented solely as a convenience to prospective investors and does not purport to represent the actual financial position of the Bank had the Reorganization occurred on December 3 1,1996, on January I,1996 or on any other date, or to project the financial position or results of the Bank at any future date or for any future period.

Unaudited Pro Forma Consolidated Income Statement Data: Year ended December 31, 1996 (unaudited pro forma)“’ CSFB Business Unit”’ CSAM Business Unitc3’ The Bank”’ (in CHF (in USD (in CHF (in USIJ,j (in CHF (in USD millions) millions)“’ millions) millions) millions) millions)“’ Net revenues...... 6,702 5,493 646 530 7,057 5,784 Total operating expenses, write-downs, provisions and losses _. . . . _...... _. 4,972 4,076 480 394 - 5 213 4,273 Net operating profit before taxes and extraordinary items@...... 1,730 1,417 166 136 1,844 1,511

(I) Figures for the CSFB and CSAM business units have been adjusted from previously published pro forma information to reflect the classification of execution, clearing and brokerage costs as an expense rather than a reduction of revenues. (2) Consists of the Credit Suisse First Boston business unit. See ‘The Bank-CSFB Business Unit.” (3) Consists of the Credit Suisse Asset Management business unit. See “The Bank-CSAM Business Unit.” (4) Translation of Swiss francs into U.S. dollars has been made at the rate of CHF 1.22 = USD 1.00 (the 1996 Average Exchange Rate). Such translation is provided solely for the convenience of the prospective investor. (5) Data for the Bank do not equal the sum of the data for the CSFB business unit and the CSAM business unit because certain private banking operations outside Switzerland remained to be transferred to Credit Suisse, and are therefore included in the Bank’s unaudited pro forma consolidated income statement data. In addition, the revenues and the related costs in connection with the rental of real estate owned by the Bank but used by Credit Suisse or other entities within Credit Suisse Group and real estate owned by Credit Suisse and used by the Bank are included in the Bank’s unaudited pro forma consolidated income statement data. See “Presentation of Financial and Other Information” and “Discussion of Unaudited Pro Forma Consolidated Financial Information.” (6) These figures have been adjusted from previously published pro forma information to reflect primarily a reclassification of certain provisions from extraordinary to ordinary. Net operating profit after taxes and extraordinary items has not been decreased as a result of this reclassification.

12 Unaudited Pro Forma Consolidated Balance Sheet of the Bank

As of December 31, 1% (unaudited pro forma) (in CHF millions) (in USD millions)“’ Assets: Cash ...... 1,535 1,145 Money market papers ...... 14,690 10,963 Due from banks ...... 128,567 95,945 of which securities lending and reverse repurchase agreements...... 81,508 60,827 Due from customers...... 125,855 93,922 of which securities lending and reverse repurchase agreements...... 85,745 63,989 Mortgages ...... 5,641 4,210 Securities and precious metals trading portfolios ...... 8 1,537 60,849 Financial investments ...... 6,487 4,84 1 Non-consolidated participations ...... 293 219 Tangible fixed assets ...... 4,939 3,686 Accrued income and prepaid expenses ...... 4,389 3,275 Other assets(*)...... 38,323 28,599

TOTAL ASSETS ...... 412,256 307,654

Liabilities and Shareholders’ Equity: ...... Liabilities in respect of money market paper ...... 11,169 8,335 Due to banks ...... 219,840 164,060 of which securities borrowing and repurchase agreements ...... 89,637 66,893 Due to customers in savings and investment deposits ...... 2,219 1,656 Due to customers, other deposits ...... 104,600 78,060 of which securities borrowing and repurchase agreements ...... 51,525 38,451 Bonds and mortgage-backed bonds ...... 18,707 13,960 Accrued expenses and deferred income ...... 6,724 5,018 Other liabilities’3”4’ ...... 37,003 27,614 Valuation adjustments and previsions(4) ...... 2,323 b 1 734 Total liabilities ...... 402,585 300,437 Shareholders’ equity: Reserves against general banking risks ...... 412 308 Share capital ...... 3,149 2,350 Capital reserveP ...... 4,307 3,214 Retained eamingsc5)...... 922 688 Minority interests in shareholders’ equity’5x6’ ...... 881 657 Total shareholders’ equity ...... 9,67 1 7,217

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY ...... 412,256 -307 654

Footnotesappear on the following page.

13 Capital Adequacy (Unaudited):

As of December 31,1!296 (unaudited pro forma) (in CHF millions, (in USD millions, except percentages) except percentages)“’ Tier I capital ...... -...... 9,454 7,204 Total capitalC7’ ...... -...... 14,485 10,810 BIS Tier 1 ratio@’ ...... _...... a 8.6% 8.6% BIS total capital ratioCg’.._...... _...... 12.9% 12.9%

( I) Translation of Swiss francs into U.S. dollars has been made at the rate of CHF 1.34 = USD 1.OO (the December 3 I,, I996 Exchange Rate). Such translation is provided solely for the convenience of the prospective investor. (2) Consists primarily of the positive replacement value (marked to market daily) of derivative instruments carried off-balance sheet. (3) Consists primarily of the negative replacement value (marked to market daily) of derivative instruments carried off-balance sheet. (4) Valuation adjustments and provisions have been increased from previously published pro forma information (and other liabilities have been correspondingly decreased) to reflect a reclassification of certain provisions from other liabilities. (5) Minority interests in shareholders’ equity have been reduced from previously published pro forma information to give effect to the purchase and retirement of certain equity securities issued by CSFB Inc. in connection with the Reorganization. Capital reserves have been correspondingly increased and retained earnings have been presented separately from capital reserves. Notwithstanding the foregoing, total shareholders’ equity remains unchanged. (6) Includes the Preferred Stock Investment. (7) Calculated on a consolidated basis pursuant to Swiss banking law and regulations. (8) Tier I capital (consisting primarily of shareholders’ equity) as a percentage of the Bank’s risk-weighted assets, calculated on a consolidated basis in accordance with the Basle Recommendations. (9) Total capital as a percentage of the Bank’s risk-weighted assets, calculated on a consolidated basis in accordance with the Basle Recommendations.

14 DISCUSSION OF UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION The unaudited pro forma consolidated financial information of the Bank is based primarily on the consolidated financial statements of the Bank and of CSFB Inc., in each case as of and for the year ended December 3 1, 1996, the consolidated balance sheet of CSFB AG as of December 3 1, 1996 and certain additional financial information derived from the financial statements of certain of the Bank’s affiliates, including Credit Suisse and Credit Suisse Group. Such financial information has been adjusted to give effect to the Reorganization and assumes (i) in the case of the unaudited pro forma consolidated income statement data, that the Reorganisation had occurred on January 1, 1996; and (ii) in the case of the unaudited pro forma consolidated balance sheet data, that the Reorganization had occurred on December 3 1,1996. Management of the Bank believes that the assumptions noted below provide a reasonable basis for the adjustments made in the preparation of the unaudited pro forma consolidated financial information. The unaudited pro forma consolidated balance sheet was prepared assumin,0 that the following transactions occurred on December 3 1, 1996. (i) The Swiss domestic retail banking business and most of the private banking business previously conducted by the Bank were transferred from the Bank to Credit Suisse (formerly Schweizerische Volksbank). The net assets relating to these businesses were effectively transferred to Credit Suisse, which prior to the Reorganisation was a subsidiary of the Bank, by means of a capital contribution in kind with a stated value of CHF 2.1 billion (USD 1.6 billion). The Bank transferred Credit Suisse to Credit Suisse Group on the same day through a distribution in kind, with a stated value equal to the book value of the Bank’s investment in Credit Suisse (after the retail and private banking businesses had been transferred) of CHF 4.9 billion (IJSD 3.7 billion). For legal, regulatory and business reasons, it was not possible by January 1, 1997 to transfer certain private banking activities of the Bank outside Switzerland to Credit Suisse. Accordingly, the Bank’s unaudited pro formaconsolidated financial information includes such activities. Credit Suisse Group and the Bank expect that the transfer of such operations will be completed over time. (ii) The Bank acquired all of the operations of CSFB Inc. and CSFB AG. Credit Suisse Group transferred its shareholdings in CSFB Inc. and CSFB AG to the Bank by means of a capital contribution in kind with an aggregate stated value of CHF 2.3 billion (USD 1.7 billion). (iii) Adjustments were made to recognise implicit intercompany balances for transactions that were previously contained wholly within the Bank as a single legal entity but that after the Reorganization became transactions with Credit Suisse. These consist primarily of short-term interbank transactions entered into by the Bank on behalf of Credit Suisse or its customers, short- to medium-term transactions arising from the placement by Credit Suisse, on behalf of its customers, of fiduciary deposits and the allocation of long-tern1 indebtedness incurred by the Bank prior to the Reorganization among the Bank and Credit Suisse (and its consolidated subsidiaries). The amounts of such short-term intercompany balances were estimated based on the balances of such transactions on January 3 1,1997. Prior to such date, the activities to which these balances relate had not yet reached levels that in management’s view would have been representative for purposes of estimating the volume of transactions that would have occurred had the Reorganization been consummated at an earlier date. (iv) Because certain transfers of real estate are subject to real estate transfer taxation in Switzerland, real estate was not transferred pursuant to the Reorganization. Instead, real estate owned by the Bank but used by Credit Suisse or other entities within the Credit Suisse Group is held for rental to such entities. (v) Appropriate eliminations and consolidation entries were made to reflect the Reoganization. (vi) An offshore subsidiary of the Bank issued CHF 50 million (USD 373 million, using the exchange rate prevailing on December 3 1, 1996 of CHF 1.34 = USD 1.oO) of its perpetual non-cumulative preferred shares to Credit Suisse Group on March 3 1,1997. The proceeds of this issuance are recorded in the unaudited pro forma consolidated balance sheet as minority interests in shareholders’ equity. The unaudited pro forma consolidated income statement data were prepared assuming that the transactions set forth above occurred on January 1, 1996 and that the revenues and expenses relating to each item on such unaudited pro forma consolidated balance sheet were attributable to the Bank for the entire year. In addition,

15 the following significant adjustments were made to the historical income statement data in order to arrive at the unaudited pro forma consolidated income statement data. (i) The revenues from the assets transferred from the Bank to Credit Suisse were deemed to follow the transferred assets. The expenses allocable to the transferred assets were determined by allocating functions and the related staff between Credit Suisse and the Bank. (ii) All of the profits from the proprietary trading activities of Credit Suisse and the Credit Suisse private banking group, which activities were transferred to the Bank in the Reorganization, were allocated to the Bank. (iii) Interest income and expense were allocated in accordance with the location of the corresponding interest-bearing assets and liabilities as a result of the Reorganization. Because each entity had its own independent asset and liability management programs in place prior to the Reoganization, the allocation of assets and liabilities among the various entities in Credit Suisse Group in the Reorganization led to the creation of different and larger interest rate, maturity and currency gap positions than had existed prior to the Reorganization. In the preparation of the pro forma consolidated financial information, asset and liability management was deemed to be central&d at the Credit Suisse Group level, and the income and expenses relating to mismatched positions were accordingly allocated to Credit Suisse Group. (iv) Expenses relating to certain services provided to the Bank pursuant to service agreements it entered into with Credit Suisse have been allocated in accordance with such service agreements. (v) The revenues and the related costs in connection with the rental of real estate owned by the Bank but used by Credit Suisse or other entities within the Credit Suisse Group were included in the Bank’s unaudited pro forma consolidated income statement data. (vi) Appropriate eliminations and consolidation entries were made to reflect the Reorganization.

16 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with, and is quali$ed in its entirety by, the information set forth under the captions “Selected Consolidated Financial Information,” “Selected Unaudited Pro Forma Consolidated Financial Information” and “Discussion of Unaudited Pro Forma Consolidated Financial Information” herein and the Annual Financial Statements included in the Bank’s Annual Report for 1998, which constitutes Annex I to this information Statement. The Annual Financial Statements have been prepared in accordance with Swiss GAAP, which di#er in certain significant respectsfrom U.S. GAAP. For a summary of certain significant differences between Swiss GAAP and U.S. GAAP as they relate to the Bank, see “Summary of Significant Differences Between Swiss GAAP and U.S. GAAP.” Financial data for the Bank and the CSFB and CSAM business units of the Bank presented below have been prepared in accordance with Swiss GAAP, modified as described below. In this section, ratios and other percentages for the CSFB business unit have been calculated based on U.S. dollar amounts, while those for the Bank and the CSAM business unit have been calculated based on Swissfranc amounts.

Overview The Bank is a Swiss bank and is one of the largest banking institutions in the world, with total consolidated assets of approximately CHF 404 billion (USD 293 billion) and total consolidated shareholder’s equity of approximately CHF 10.3 billion (USD 7.5 billion) in each case at December 3 1,1998. As a leading global investment banking enterprise, the Bank provides a wide range of financial services from locations around the globe to corporate, institutional and public sector clients worldwide. The Bank principally consists of two business units, CSFB and CSAM. CSFB is engaged, directly and through affiliates, in the investment banking, equity, fixed income and derivatives and private equity investment businesses on a worldwide basis. CSAM, directly and through subsidiaries, offers asset management, mutual fund and investment advisory services to institutional investors worldwide. In addition to the CSFB and CSAM business units, the Bank maintains a real estate business unit on behalf of Credit Suisse Group. Unlike the CSFB and CSAM business units, the real estate business unit does not engage in business activities, but rather serves as a means of tracking the revenues and related costs in connection with the rental of real estate owned by the Bank but used by Credit Suisse or other entities within Credit Suisse Group. The Bank faces intense competition from various types of firms, in all aspects of its business and throughout the world. The types of firms with which it competes include brokers and dealers in securities and commodities, investment banking firms, commercial banks, merchant banks, asset management entities and other firms offering tinancial services. Certain of the firms with which the Bank competes have greater capital and other resources than the Bank. In addition, the types of activities carried out by the Bank are subject to various risks, including defaults or moratoriums by sovereign and corporate borrowers, volatile trading markets, currency risk, national economic and political risk and fluctuations in the volume of market activity. Because of these factors, the Bank’s earnings and results of operations may be subject to wide fluctuations.

Results of OperationsThe Bank The Bank’s results of operations for 1998 were significantly affected by unprecedented economic events during the second half of the year which led to a general downturn in markets worldwide. In the third quarter of 1998, the Russian Federation experienced an economic collapse, triggering a default on certain of its sovereign debt obligations and a subsequent restructuring of those obligations. The immediate economic impact of these developments on the Bank, in common with other major financial services providers active in Russia, was severely negative. Moreover, the Russian collapse had important adverse implications for other emerging markets, primarily those in Eastern Europe and Latin America, which also negatively affected the Bank’s results. Compounding the difficult conditions in these emerging markets, and in part as a result of them, hedge funds experienced a tightening of liquidity in the second half of 1998, a situation exacerbated by the events leading to the recapitalization of Long Term Capital Portfolio, L.P. in the third quarter of 1998. The ongoing economic crisis in Asia, meanwhile, continued. The result was extreme volatility in global markets, particularly in credit-sensitive securities, in the second half of the year, and a sharp curtailment in capital markets activity in general, both of which were reflected in the Bank’s performance in this period.

17 Gross operating profit was CHF I.266 million (USD 885 million) in 1998, down from CHF 3,671 million (USD 2,549 million) in 1997, and the Bank posted a net loss for the year (excluding minority interests) of CHF 1,020 million (USD 7 13 million) as compared with a net profit of CHF 1,214 million (USD 843 million) in 1997. These results reflect a significant decline in revenues and material valuation adjustments and provisions recorded during the second half of the year, each primarily associated with the conditions prevailing in Russia. The Bank had net operating income of CHF 9,277 million (USD 6,487 million) in 1998, compared with CHF 10,792 million (USD 7,494 million) in 1997, a decrease of 14.0%. This reflects a significant rise in both net interest income (by CHF 358 million (USD 260 million) or 17.5%) and net commission and service fee income (by CHF 1,214 million (USD 867 million) or 32.3%), which were more than offset, however, by the fall in net trading income (by CHF 3,158 million (USD 2,185 million) or 66.3%). The strong results with respect to commission income were attributable to the record years posted by CSFB’s investment banking, underwriting and broking businesses and by CSAM. The poor results in trading income primarily reflect securities trading and foreign exchange trading, as CSFB realized losses on various emerging markets foreign currency denominated securities. Total operating expenses increased by CHF 890 million (USD 657 million) or 12.5%, primarily as a consequence of acquisitions carried out during the course of the year by CSFB and of an increase in headcount of over 2,000 new employees. Personnel costs rose by 8.2% on the year and accounted for approximately 51% of the increase in total operating expenses, while the remainder is attributable to other operating expenses, principally professional services, communications and equipment, business development and occupancy, which rose by 26.8%. The Bank recorded valuation adjustments, provisions and losses of CHF 1,871 million (USD 1,308 million) in 1998, more than three times the totals for 1997. This primarily reflected provisioning requirements relating to lending to sovereigns, banks and corporations in Russia and other emerging markets, and the positive replacement value of various over-the-counter derivative instruments entered into with these emerging market counterparties. Extraordinary expenses of approximately CHF 365 million (USD 255 million) were incurred in 1998 in connection with the settlement of World War II-era claims. This was offset by extraordinary income from the release of the full amount of the Bank’s reserve against general banking risks, CHF 412 million (USD 288 million). The Bank’s return on equity, calculated on the basis of consolidated net loss/profit after ordinary taxes and before extraordinary items, was -9.2% in 1998, as compared with a return of 17.1% in 1997. Calculated on the basis of consolidated net loss/profit after extraordinary items and minority interests, return on equity was -9.1% in 1998, as against 11.2% in 1997. Despite the net loss incurred for the year, the Bank maintained a strong capital position, its risk weighted capital ratio increasing from 14.9% at December 31,1997 to 15.4% at December 3 1, 1998, and its risk weighted core capital ratio (BIS Tier I) decreasing from 8.5% at the end of 1997 to 8.4% at the end of 1998.

Presentation of CSFB and CSAM Results of Operations Because substantially all of the Bank’s activities are carried out by the CSFB and CSAM business units, the following sections discuss the results of operations for these two business units individually. Prospective investors should note, however, that the Bank’s consolidated financial statements include financial data that is not reflected in the financial information of either of these business units. First, the assets, liabilities and results of operations of the real estate business unit maintained by the Bank on behalf of Credit Suisse Group are included in the Bank’s assets, liabilities and results of operations, but not in those of either the CSFB or CSAM business units. Further, there are certain assets, liabilities and results of operations that are associated with activities that are legally supported by the Bank, and are thus reflected in the Bank’s financial statements, but which are not part of the business of the CSFB or CSAM business units and accordingly are not reflected in the business unit financial information. On ‘the other hand, certain assets, liabilities and results of operations that are associated with the business of CSFB and CSAM, and are therefore reflected in the business unit financial information, are not conducted by the Bank and its consolidated subsidiaries, and accordingly are not reflected in the Bank’s financial statements. The extent to which activities of this kind give rise to differences between the aggregate assets, liabilities and results of operations of the business units and those of the Bank can be considerable, as they were in some areas in 1998. For example, the Bank’s total net operating income for 1998

18 did not include gross revenues of CHF 848 million (USD 593 million) relating to private equity activities which are part of the CSFB business unit and thus are included in the CSFB business unit’s operating results (reported under “PED and Other” below) but which are booked for fiscal purposes at the Credit Suisse Group level, nor did it include the effect of reserve usage at the Credit Suisse Group level supporting certain charge-offs made by the Bank. In addition, various costs are incurred within the Bank in support of other Credit Suisse Group activities that are not associated with CSFB or CSAM. A number of other factors also contribute to differences between financial data of the Bank and aggregate business unit data in any given year. The Bank’s Annual Report for 1998 sets forth adjustments to the business unit financial information that are necessary to reconcile the financial statements as of and for the year ended December 3 1, 1998 for CSFB, CSAM and the real estate business unit to the corresponding financial statements of the Bank. As a result, with respect to any given line item, the sum of the CSFB and CSAM business unit financial data presented below does not necessarily equal, and may differ significantly from, the totals appearing in the financial information of the Bank presented elsewhere in this Information Statement. Prospective investors should bear this in mind when reviewing the financial data for the CSFB and CSAM business units. See the Bank’s Annual Report, which constitutes Annex I to this Information Statement. Financial data presented below for the CSFB and CSAM business units have been prepared in accordance with Swiss GAAP modified in the following manner: (i) execution, clearing and brokerage costs have been classified as an expense rather than a reduction of revenues; and (ii) revenues and interest costs have been allocated to divisional results based on the Bank’s internal management reporting process.

Results of Operations-CSFB Business Unit The following table presents selected unaudited financial and statistical data for the CSFB business unit as of and for the years ended December 3 1, 1998 and December 3 1, 1997. Balance sheet data have been adjusted from that presented in Annex I hereto to include allocations made by the Bank to CSFB and CSAM relating to the assets and liabilities of the Bank’s real estate business unit. Such allocations are made to the business units based on usage of real estate by each business unit. Because the FID Integration did not take effect until January I, 1999, this section presents the results of the Fixed Income Division and CSFP as separate divisions of CSFB. Based on the Bank’s management reporting, capital markets revenues are shared among IBD, the Fixed Income Division and the Equity Division. The 1997 income statement data presented herein have been adjusted from previously published information to reflect primarily a reclassification of certain items as expenses rather than reductions of revenues, in conformity with the 1998 presentation.

19 Selected Financial and Statistical Data CSFB Business Unit (Unaudited) Income Statement Data For the Year ended December 31: 1998 1997 USD % Change (in millions except Statistical Data)“’ USD CHF USD CHF Revenues: Fixed Income ...... 1,740 2,489 3,379 4,866 (49) Equity ...... 1,425 2,038 1,212 1,745 18 CSFP ...... 1,075 1,538 1,210 1,742 (11) IBD...... 1,790 2,560 1,479 2,130 21 PED and Other ...... 683 975 (10% (157) -

Total revenues ...... _...... 6,713 9,600 7,171 10,326 (6) Operating Expenses: Personnel expense ...... _...... 3,728 5,332 3,523 5,074 6 Execution, clearing and brokerage.. . . 351 502 259 373 36 Other operating...... 1,262 1,805 1,028 1,480 23

Total operating expenses ...... 5,341 7,639 4,8 10 6,927 11

Gross operating profit...... 1,372 1,961 2,361 3,399 (42) Depreciation ...... 195 279 148 213 32 Writedowns, provisions and losses.. . . 1,095 1,566 385 555 184 Pretax income before extraordinary/exceptional items and minority interest’*’ ...... 82 116 1,828 2,63 1 (96) Income taxes ...... I59 226 621 893 29 Net (loss)/income before extraordinary/exceptional items and minority interest”‘. . . . . (77) (110) 1,207 1.738 (106) Extraordinary/exceptional items, net of tax...... (42) (61) (296) (426) 0-W Minority interest...... (35) (50) (85) (123) (59) Net (loss)/income after minority interest...... (154) (221) - 826 1,189 (119) Balance Sheet Data As of December 31: Total shareholder’s equity”’ . . . . _. . . . . 7,135 9,846 7,274 10,475 (2) Total as.set~(~)...... 290,696 401,160 3 10,353 446,908 (6)

Footnotesappear on the following page.

20 Statistical Data (Unaudited) For the Year ended December 31: 1998 1997 Change Return on average equity’2)(4’...... (1%) 18% (19%)@’ Pretax profit margin’2)5’...... 1% 25% (W$ Expense/total revenues ratio@...... 80% 67% Staff expense/total revenues ratio”‘...... 56% 49% 7%@’ Number of employees (at December 31)...... 14,126 11,863 19%

(1) Translation of Swiss francs into U.S. dollars has been made, for 1998 Income Statement and Statistical Data, at the rate of CHF I .43 = USD 1.00 (the 1998 Average Exchange Rate), for 1998 Balance Sheet Data, at the rate of CHF 1.38 = USD I .OO(the December 3 1, 1998 Exchange Rate), for 1997 Income Statement and Statistical Data, at the rate of CHF I.44 = USD 1.OO (the I997 Average Exchange Rate), and for 1997 Balance Sheet Data, at the rate of CHF I .44 = USD 1.00 (the December 3 1, 1997 Exchange Rate). Such translations are provided solely for the convenience of the prospective investor. (2) Excludes extraordinary items, minority interest, 1997 provision for certain costs relating to the BZW Acquisitions (as defined herein) and 1997 technotogy provisions related to Year 2000 and EMU implementation. (3) The shareholder’s equity and assets presented above are those portions of the Bank’s shareholder’s equity and assets dedicated to the CSFB business unit. These figures have been adjusted from those presented in Annex I hereto to include allocations made by the Bank to CSFB relating to the assets and liabilities of the Bank’s real estate business unit. The consolidated balance sheets presented herein on pages 10 and 13 are the consolidated balance sheets of the Bank. (4) Net (loss)/income before extraordinary/exceptional items divided by average shareholder’s equity. (5) Pretax income before extraordinary/exceptional items and minority interest divided by total revenues. (6) Total operating expenses divided by total revenues. (7) Personnel expense divided by total revenues. (8) 1998 figure minus 1997 figure.

21 1998 Results CSFB’s results for 1998 were heavily affected by the global economic developments described above, in particular those relating to Russia. CSFB had, in line with its business strategy, built a leading market position in Russia, the world’s twelfth largest economy in 1997. The crisis which erupted in August 1998 was characterized by a massive devaluation, a moratorium on all local currency public debt, a breakdown of the Russian banking system and a political leadership crisis. This resulted in value declines of some 95% in Russian government bonds (“GKOs”) and 85% in equities, as well as heavy provisioning by CSFB against counterparty default on loans and forward foreign exchange contracts, resulting in Russia-related pretax losses of USD 1.3 billion (CHF 1.9 billion). As a consequence, in 1998 CSFB reported a net loss of USD 154 million (CHF 221 million) after tax and minority interests. As of December 31, 1998, CSFB’s net Russian country exposure was approximately USD 1.14 billion (CHF 1.57 billion) (the portion of Russian exposure that was Ruble denominated or related to Ruble-based foreign exchange transactions being valued in U.S. dollars at the rate of RUB 20.87 = USD 1.00). This net exposure comprised loans (approximately USD 900 million), trading positions (approximately USD 165 million), forward foreign exchange contracts (approximately USD 59 million) and reverse repurchase obligations (approximately USD 14 million). A substantial portion of the net loan exposure related to loans made to Russian energy sector companies and to municipal and other government borrowers. CSFB management believes it prudent to guard against the possibility that difficult market conditions will continue in 1999. CSFB has thus implemented selective cost efficiency measures in an effort to enhance profitability while reinforcing the expansions and investments of recent years. In addition, the FID Integration, which took effect on January 1, 1999, is expected to reduce costs by facilitating back office integration of the Fixed Income Division and CSFP and to capitalize on potentially significant synergies in product and risk management. As a result of the CSFP Repurchase, CSFP became a direct or indirect wholly-owned subsidiary of Credit Suisse Group, which CSFB management believes will facilitate the FID Integration. See “Overview - Recent Developments.” In addition, CSFB has implemented several important changes designed to strengthen its risk management organization. See “The Bank - Risk and Capital Management.” CSFB’s strategic plans contemplate continued investment in its businesses through organic growth and, if appropriate, selective acquisition.

Revenues CSFB had revenues of USD 6.7 billion (CHF 9.6 billion) in 1998, representing a 6% decrease as compared with 1997 revenues. The sources of CSFB divisional revenues are primarily realized and unrea1ize.dnet trading gains, net interest income resulting from trading and lending activities, fee-based earnings from capital markets activities, commissions on customer transactions and advisory services. Excluding Russia related losses, revenues were USD 7.3 billion (CHF 10.4 billion) in 1998. Divisional revenues for the years ended December 3 1, 1998 and December 3 1, 1997 were as follows: 1998 1997 Percentage Change (USD millions) Fixed Income ...... -...... -...... 1,740 3,379 (49%) Equity ...... -...... 1,425 1,212 18% CSFP ...... e...... m...... 1,075 1,210 (11%) IBD ..,...... -...... ,...... -... 1,790 1,479 21% PED and Other ...... 683 (109) NA 6,713 7,171 6%)

22 The geographic distribution of revenues for the CSFB business unit as a whole, for the years ended December 3 1, 1998 and December 3 I, 1997, and of CSFB employees at the end of each of those years, were as follows:

1998 1997 Revenues”) Employees Revenues Employees Americas ...... _...... 44% 40% 50% 39% Europe...... _. . . . _...... _...... 47% 45% 35% 48% Asia ...... 9% 15% 15% 13%

(I) ExcludesRussia-related results. Including Russia-related losses, such percentages would be 56% for the Americas, 34% for Europe and 10% for Asia. Fixed Income Division. Revenues for the Fixed Income Division decreasedby 49% in 1998 compared to 1997. This decrease was primarily the result of the market events of the second half of 1998 described above. Excluding Russian activities in both years, division revenues decreased by 28% in 1998. Return on equity was -29% in 1998 for the division (1% excluding Russia), compared to 35% for 1997. The foreign exchange, money market and government bond areas produced strong results, comparable to or above their 1997 results. Debt capital markets, despite being affected by the difficult market conditions, showed underwriting volume and market share gains of 99% and 2%, respectively, reflecting the success of efforts to revitalise this business. Revenues in real estate financing from the Principal Transactions Group (“PTG”) remained robust in 1998, although somewhat lower than 1997. Offsetting these good results, the Emerging Markets Group (“EMG”), Leveraged Finance Group and Leveraged Funds Group experienced losses in 1998, with revenues falling considerably from 1997 levels, although EMG remained profitable outside of Russia. CSFP. Revenues for CSFP decreased by 11% in 1998 as compared to 1997, primarily as a result of the 1998 market events described above. Excluding Russian activities in both years, revenues for the division decreased by 4% in 1998 from 1997. Revenues declined across most fixed income products, including swaps and options, and asset trading and credit derivatives. CSFP had substantial exposure in Russia, and it incurred additional losses on a derivative position in Long Term Capital Portfolio, L.P. Nevertheless, CSFP’s customer-related business remained strong, increasing relative to 1997. Overall, CSFP remained profitable with return on equity of approximately 14% in 1998 (over 25% excluding Russia), compared to over 30% in 1997. Equity Division. Revenues for the Quity division increased by 18% in 1998 compared to 1997. Excluding Russian activities in both years, revenues for the division increased by 52% in 1998 over 1997. This increase was primarily a result of a strong performance in derivatives and significantly improved results in customer-driven businesses in Western Europe and the United States, which include trading, commissions and capital markets activities. These improved results were offset in part by significant losses from the Eastern European customer- driven business due to the market events of 1998 described above. Increases in revenues from the Western European customer-driven business were largely due to the BZW Acquisitions (as defined herein). See “-Acquisitions.” Return on equity for the division was 5% in 1998 (15% excluding Russia), compared to 38% in 1997. Management believes that the Equity division has made strong gains in market share in all areas since 1997, reflecting both substantial organic investments and significant acquisitions. More generally, gross equity-related revenues, including equity derivative-related revenues reported as a part of CSFP and equity capital markets revenues included in IBD, approximated USD 1,900 million (CHF 2,700 million) and USD 1,450 million (CHF 2,100 million) for the years ended December 31, 1998 and December 3 1, 1997, respectively. IBD. IBD revenues increased by 21% in 1998 compared to 1997, with mergers and acquisitions and equity capital markets revenues up by 45%. The division achieved market share gains in each of its principal product areas. Net interest income from corporate lending declined to just 7% of the total, reflecting the strategy implemented by CSFB in 1997 to reallocate capital resources from developed markets corporate lending to other businesses. As a result of this strategy, IBD’s allocated BIS capital decreased from USD 2.0 billion at the end of 1997 to USD 800 million at the end of 1998. IBD revenues, inclusive of total debt and equity capital markets revenues reflected in the Fixed Income and Equity Divisions, exceeded USD 2,200 million and USD 1,850 million for the years ended December 3 1, 1998 and December 3 1, 1997, respectively.

23 Return on equity for the division in 1998 was 7%, compared to -1% in 1997. Management believes that significant strategic initiatives ranging from acquisitions in Europe, Asia and Latin America to global hiring programs, notably in the technology area, have left IBD well positioned for 1999. PED and Other. Activity reported under “PED and Other” is primarily the result of investments and transactions within CSFB that are not associated with any particular division, as well as revenues earned by PED, which manages funds with investment commitments exceeding USD 2.9 billion globally. PED and Other revenues amounted to USD 683 million in 1998, following a loss of USD 109 million in 1997. The 1998 figure included gains associated with investments booked elsewhere in the Credit Suisse Group legal structure which are not included in the Bank’s financial results. See “- Presentation of CSFB and CSAM Results of Operations.”

Expenses CSFB’s aggregate operating expenses increased by I I % in I998 as compared to 1997. These increases were primarily the result of expenses associated with businesses acquired in 1998, as well as increased hiring in most business divisions and investment in support infrastructure. See “-Acquisitions.” In 1998, CSFB also made significant investments in personnel specializing in technology stocks and equity research. Support infrastructure costs rose as a result of the increased demands of a changing business environment and the development of a stronger internal control structure as well as the costs, in excess of provisions established in 1997, associated with Year 2000 and EMU compliance. Personnel expenses increased 6% in 1998 over 1997 levels, primarily due to a 19% increase in headcount associated with the hiring effort described above. These were partially offset by substantial decreases in per capita bonus payments in those areas that produced weaker results than in 1997. Notwithstanding these reductions, total personnel expenses did not track CSFB’s pre-bonus operating results due to the payment of larger bonuses to personnel in the many profitable business lines and a larger number of employees overall as a result of CSFB’s investment programs. Personnel expenses as a percentage of revenues (excluding Russia-related losses) for 1998 were 52%, in line with industry norms. Execution, clearing and brokerage costs increased in 1998 as compared to 1997, as a result of increased trading activity in both fixed income and equity products. Other operating expenses primarily include costs for communications and equipment, occupancy, professional services and business development. The distribution of other operating expenses for the years ended December 3 1, 1998 and December 3 1, 1997 was as follows: Other Operating Expenses 1998 1997”’ Communications and Equipment ...... 25% 28% Professional Services ...... 33% 28% occupancy ...... 17% 19% Business Development ...... _...... 0 17% 14% All Other ...... -. 8% 11%

(I) The 1997 data presentedherein have been adjustedfrom previously published information to reflect a reclassificationof certain operating expensesfrom communicationsand equipmentand businessdevelopment to occupancy,in conformity with the 1998 presentation. Other operating expenses increased in 1998, as compared to 1997, across all categories, because of increases in personnel and consultants as well as the impact of support infrastructure initiatives including Year 2000 and EMU costs and acquisition integration activity. CSFB implemented a range of expense-saving measures in the fourth quarter of 1998 designed to save as much as USD 100 million in annualized expense, while maintaining the support for key personnel and other investment programs currently in place. CSFB can give no assurance, however, that it will realize such cost savings.

Writedowns, Provisions aad Losses Writedowns, provisions and losses increased significantly in 1998, as compared to 1997, primarily as a result of credit provisions, resulting in a charge against pretax earnings of USD 1,095 million. Provisions added in 1998

24 were largely due to the effects of the economic collapse in Russia, as CSFB recorded substantial credit provisions against forward contracts, loans, reverse repurchase agreements and other assets and derivative contracts involving Russian products or Russian counterparties. At December 31, 1998, CSFB’s credit provisions related to Russia totaled approximately USD 980 million. Credit provisions in 1997 were primarily related 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. Such provisions totaled approximately USD 410 million at December 3 1, 1998, down from USD 450 million at December 3 I, 1997. Other than Russian and Asian provisions, CSFB’s loan provisions, charged against 1998 and 1997 earnings, totaled USD 86 million and USD 102 million, respectively. Also contained in write-downs, provisions and losses are various litigation provisions.

Income Taes CSFB incurred income tax expense in 1998 in excess of reported pre-tax income, and the effective rate (which is not expected to be representative of future rates) differs significantly from 1997. This reflects the fact that losses incurred by CSFB in 1998 were concentrated in tax jurisdictions with low tax rates or where net operating loss carryforwards exist while profits were realized in other, higher tax locations. It also reflects the accounting practice, consistent with Swiss GAAP, of generally avoiding the establishment of deferred tax assets.

ExtraordinatylExceptioionaI Items Extraordinary/exceptional items in 1998 primarily related to real estate write-offs (USD 50 million, net of tax) in Moscow driven by the decrease in business activity following the Russian default.

Acquisitions During 1998, in keeping with its strategy of growth through selective acquisitions, the Bank acquired certain businesses. These businesses contributed to CSFB’s results of operations for 1998, and their assets and liabilities are reflected in CSFB’s balance sheet as of December 31, 1998. BZW Acquisitions. On November 12, 1997, the Bank entered into an agreement to purchase the U.K. and continental European equities, equity capital markets and mergers and acquisitions advisory businesses of BZW from Barclays Bank plc (“Barclays”) for GBP 100 million. In addition, CSFB signed an agreement with Barclays to acquire certain of BZW’s equity, equity capital markets and mergers and acquisitions advisory businesses in Asia. The Bank completed these acquisitions in stages, primarily during the first half of 1998. Since the bulk of these acquisitions (the “BZW Acquisitions”) were not completed in 1997, they were not consolidated in CSFB’s financial statements as of December 3 1, 1997. First Pacific and First NZ Capital Acquisition. In early 1998, the Bank agreed to acquire 75% of the common stock of First Pacific Stockbrokers Limited and certain affiliates (“First Pacific”) which, when combined with its existing 25% ownership, resulted in First Pacific becoming a wholly-owned subsidiary of the Bank. First Pacific is an investment banking firm with a leadership position in the equity markets in Australia. In addition, in early 1998, the Bank acquired the common stock of First NZ Capital Group (“First NZ”), a New Zealand investment banking enterprise. Garantia Acquisition. On July 31, 1998, Credit Suisse Group and the Bank completed the acquisition (the “Garantia Acquisition”) of all of the outstanding capital stock of Banco de Investimentos Garantia S.A., a corporation organ&d under the laws of Brazil, Garantia Limited, a corporation organized under the laws of The Bahamas, and certain of their subsidiaries and affiliates (collectively, “Garantia”). The initial consideration payable by Credit Suisse Group to the sellers in the Garantia acquisition consisted of USD 200 million, plus ordinary shares of Credit Suisse Group having a fair market value of USD 475 million, which will become freely transferable over a six-year period. Furthermore, additional amounts will become payable, principally to continuing employees of Garantia, under a retention plan if Garantia meets certain performance targets during the 1998-2001 period. Garantia’s principal business activities are fixed income and equity trading, asset management and investment banking.

25 For a description of how the Bank funds its business, including the acquisitions described above, see “-Liquidity and Capital Resources-Funding and Capital Strategy.”

Net Country Exposure The following table shows, as of December 31, 1998, CSFB’s aggregate net exposure in selected countries, after the inclusion of provisions.

Net Exposure Country (in USD millions) (in CHF millions)“’ Russia’*’ ...... 1,138 1,570 Other Eastern Europe/Commonwealth of Independent States ...... 745 1,028 China and Hong Kong ...... 1,753 2,419 Indonesia, South Korea, Malaysia and Thailand ...... 2,703 3,730 Brazil ...... 1,290 1,780 Other Latin America ...... 2,053 2,833

(1) Translation of U.S. dollars into Swiss francs has beenmade at the rate of CHF 1.38 = USD 1.OO (the December3 I, 1998 ExchangeRate). Such translations are provided solely for the convenienceof the prospectiveinvestor. (2) The portion of Russianexposure that was Ruble denominatedor relatedto Ruble-basedforeign exchangetransactions was valued in U.S. dollars at the rate of RUB 20.87 = USD 1.00.

Results of Operations--CSAM Business Unit The following tables present selected unaudited financial and statistical data for the CSAM business unit as of and for the years ended December 3 1, 1998 and December 3 1,1997. The 1997 income statement data presented herein have been restated from previously published information to reflect changes in the revenue sharing for mutual fund products between CSAM, on the one hand, and the Credit Suisse and Credit Suisse Private Banking business units, on the other hand, in conformity with the 1998 presentation. The 1997 balance sheet data presented herein have been restated from previously published information to reflect a reclassification of hedging transactions for U.S. clients as advisory products, in conformity with the 1998 presentation.

26 Selected Financial and Statistical Data CSAM Business Unit (Unaudited) Income Statement Data For the Year ended December 31:

1998 1997 CHF % Change (in millions except Statistical Data)“’ CHF USD CHF USD Revenues: Management and advisory fees ...... 595 416 479 333 24.2 Net mutual fund fees ...... 206 144 185 128 11.4 Other revenues ...... 51 36 42 29 21.4 Net Operating Income...... 852 596 706 490 20.7 Operating Expenses: Personnel expenses ...... 329 230 286 199 15.0 Other operating expenses...... 257 180 214 347149 20.1 Total Operating Expenses ...... 586 410 500 Gross Operating Profit ...... 266 186 206 143 17.229. I Depreciations and write-offs on noncurrent assets. . 12 - 8 15 - 10 (20.0) Profit Before Extraordinary Items and Taxes .... 254 178 191 133 33.0 Taxes on profits before extraordinary items ...... 30 - 21 36 - 25 (I 6.7) Net Profit Before Extraordinary Items and RelatedTaxes ...... 224 157 155 108 44.5 Extraordinary items, net of related taxes ...... (1) (I) (14) (10) - Net Profit ...... - 223 =156 - 141 98 - 58.2 Assets Under Management Data As of December 31 (in billions): Total assets under management ...... 297 215 262 182 13.4 Total discretionary funds ...... 212 154 177 123 19.7 Total advisory assets ...... 85 61 85 59 1.7 Total mutual funds distributed ...... 74 54 63 44 17.5 Statistical Data For the Year ended December 31: Cost/income ratio (2)...... 70.2% 72.9% Number of employees (at December 31)...... 1,577 1,393 Pre-tax margin (3)...... 29.7% 25.1% After tax (pre-exceptional items) profit/average assets under management (in basis points) (4)...... 7.9bp 5.8bp Growth in assets under management ...... 13.4% 18.6% Growth in discretionary assets under Management ...... 19.7% 17.5% of which volume and acquisitions ...... 13.4% 6.0% of which performance ...... 6.2% 11.5%

(1) Translation of Swiss francs into U.S. dollars has been made, for 1998 Income Statement and Statistical Data, at the rate of CHF I .43 = USD I .OO(the 1998 Average Exchange Rate), for 1998 Balance Sheet Data, at the rate of CHF 1.38 = USD 1.00 (the December 3 1, 1998 Exchange Rate), for 1997 Income Statement and Statistical Data, at the rate of CHF 1.44 = USD 1.00 (the 1997 Average Exchange Rate), and for 1997 Balance Sheet Data, at the rate of CHF 1.44 = USD 1.00 (the December 3 I, 1997 Exchange Rate). Such translations are provided solely for the convenience of the prospective investor. (2) Total operating expenses divided by net operating income. (3) Net profit before exceptional items and taxes divided by net operating income. (4) Net profit before exceptional items divided by average assets under management.

27 I998 Results

CSAM’s net operating income increased by 20.7% in 1998, to CHF 852 million (USD 596 million) from CHF 706 million (USD 490 million) in 1997. The increase reflected significantly higher management and advisory fees, which rose by 24.2%, from Cl!IF 479 million (USD 333 million) in 1997 toCHF595 million (USD 416 million) in 1998, combined with an 11.4% increase in net mutual fund fees, from CHF 185 million (USD 128 million) in 1997 to CHF 206 million (USD 144 million) in 1998. Total operating expenses for CSAM rose by 17.2% in 1998 to CHF 586 million (USD 410 million). As a result of CSAM’s strong revenue performance, however, net profit before extraordinary items and taxes increased by 33.0% to CHF 254 million (USD 178 million) in 1998, up from CHF 191 million (USD 133 million) in 1997. Similarly, the business unit’s cost/income ratio fell to 70.2% in 1998 (from 72.9% in 1997), while pre-tax margin rose to 29.7% (from 25.1% in 1997). At December 3 1, 1998, CSAM’s assets under management included CHF 212 million (USD 154 million) in discretionary funds and CHF 85 million (USD 61 million) in advisory assets, yielding total discretionary assets under management (as adjusted to reflect the reclassification of hedging transactions for U.S. clients as advisory products) of CHF 297 million (USD 215 million). This represented an increase of 19.7% over the rota1 at December 3 1, 1997, 12.3% being attributable to net new business, 1.1% to acquisitions and 6.2% to market movements. Most of this increase (approximately 60% of net new business) came in equity and balanced products, areas which CSAM had targeted for growth during 1998. The growth in asset base coupled with the improvement in profitability resulted in a rise in the ratio of after tax profit to average assets under management from 5.8 basis points in 1997 to 7.9 basis points in 1998. The following table sets forth a breakdown of discretionary assets under management by asset class as of December 3 1, 1998 and December 3 1, 1997:

Discretionary Product Mix 1998 1997”’ Fixed Income ...... -...... 50% 55% Equities . . ..*...... 20% 19% Balanced ...... -.._...... -...... 21% 18% Other ...... _...... 9% 8%

(1) The 1997 data presentedherein have been restatedfrom previously published information to reflect a recIassificationof hedging transactionsfor U.S. clients as advisory products, in conformity with the 1998 presentation.

Liquidity and Capital Resources

Assets and Leverage The Bank maintains a liquid balance sheet with a majority of its 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 obligations. Levels of trading inventory and collateralised financing agreements are dependent on market conditions, volume of activity and customer needs. Accordingly, the Bank’s total assetsand financial leverage can fluctuate significantly. CSFB, as part of its investment banking and fixed income emerging market activities, also maintains a loan portfolio. In addition, as part of CSFB’s fixed income activities, trading inventories include emerging markets positions, whole loans, leveraged funds and high yield securities. Credit Suisse Group and its subsidiaries also make merchant banking investments through PED. In U.S. dollar terms, CSFB’s total assets at December 31, 1998 declined approximately 6%, as compared to December 3 1, 1997. This decline reflects the changes in risk profile adopted by CSFB during the later part of the year. 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 capita1 markets:

28 Funding and Capitul Strategy

Funding. The Bank has a broad-based worldwide funding franchise. Global short-term funding is managed by a central&d financing unit, which oversees local funding operations located in the major regional centers within CSFB. This global funding function provides coordination and control of pricing and funding tactics, while the local market presence provides for investor diversity and access to important market opportunities. The Bank aims to continually broaden its funding base by geography, investor, issuing entity and instrument type. The Bank’s funding sources include interest-bearing and non-interest-bearing deposits, commercial paper, certificates of deposit, federal funds purchased, long-term debt, capital securities and stockholders’equity. The Bank places particular emphasis on a large base of well-diversified and historically stable fiduciary deposits for its day- to-day funding needs. Notwithstanding the historical stability of the Bank’s unsecured funding sources, CSFB has a secondary source of liquidity flowing through its broker-dealer businesses. CSFB has historically been able to access significant liquidity through the secured funding markets (repurchase agreements and other collateralized arrangements), even in high-stress environments. Management believes that this secondary source of liquidity is an important means of ensuring availability of alternative funding for the purpose of meeting business plans and commercial commitments. CSFB’s liquidity (from both unsecured and secured sources) is continually monitored with the objective of ensuring that it can meet its business objectives under various high-stress scenarios. To provide alternative funding sources, the Bank, through its subsidiaries, has renewed a committed revolving 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 USD 1,495 million during 1999. As of the date hereof, there are no amounts outstanding under the facility. Cu&zl Strategy. The Bank and its subsidiaries issue long-term debt through various U.S., Euro and Global Medium-Term Notes Programs as well as syndicated and privately placed offerings around the world. To satisfy Swiss and local regulatory capital needs of its regulated subsidiaries, the Bank raises subordinated long-term borrowings. At December 3 1,1998, the Bank had long-term debt (including the current portion) of USD 24 billion, with USD 9 billion representing subordinated debt. The Bank expects to continue to access the capital markets in support of the Bank’s existing businesses,as well as any new business initiatives and the resultant capital and funding requirements. In selecting the most appropriate funding sources at any point in time, such factors as market conditions, interest 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 dependent on the short- and long-term credit ratings of the Bank and certain of its subsidiaries. The cost and availability of external funding is generally a function of these ratings. As of the date hereof, the Bank’s debt ratings are as follows: Long-Term Short-Term Senior Senior Subordiited Junior Subordinated Moody’s ...... P-l Al A2 A3 S&P ...... A-l+ AA AA- A+ Fitch IBCA Ltd...... F-l+ AA AA- A+ BankWatch ...... TBW-1 AA AA- A+ In March 1999, the Bank paid a dividend of CHF 240 million to its shareholders. In March 1998, the Bank paid a dividend of CHF 850 million 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 3 1, 1998, the Bank was in compliance with these requirements. At December 3 1,1998, the Bank had a BIS Tier 1 and total capital ratio of 8.4% and 15.4%, respectively, compared to 8.5% and 14.9%, respectively, at the end of the prior year. Beginning January 1, 1998, the Bank commenced compliance with the new BIS and EBK methodologies for computing capital ratios, which are based, in part, on value at risk computations for trading positions.

29 THE BANK

General The Bank is a Swiss bank and is one of the largest banking institutions in the world, with total consolidated assets of approximately CHF 404 billion (USD 293 billion) and total consolidated shareholder’s equity of approximately CHF 10.3 billion (USD 7.5 billion), in each case at December 31, 1998. As a leading global investment bank, the Bank provides a wide range of financial services from locations around the globe to corporate, institutional and public sector clients worldwide. The Bank was established on July 5, 1856 and registered in the Commercial Register of the Canton of Zurich on April 27, 1883 for an unlimited duration under the name of Schweizerische Kreditanstalt. The Bank’s name was changed to Credit Suisse First Boston on December 11, 1996 (by entry in the commercial register), in connection with the Reorganization. The Bank is a joint stock corporation established under Swiss law. The Bank’s registered head office is in Zurich, and it has additional executive offices and principal branches located in London, New York, Hong Kong, Singapore and Tokyo. The Bank and its consolidated subsidiaries employed approximately 15,670 people at December 31, 1998. Credit Suisse Group, which owns 100% of the voting shares of the Bank, is now principally composed of five business units. The Bank principally consists of two of these business units, CSFB and CSAM. CSFB is engaged, directly and through affiliates, in the investment banking, equity, fixed income and derivatives and private equity investment businesses on a worldwide basis. CSAM, directly and through subsidiaries, offers asset management and investment advisory services to institutional investors worldwide. For adescription of the three remaining Credit Suisse Group business units, see “Relationship Between the Bank and Credit Suisse Group.” The following chart illustrates the management structure of the Bank and its two business units.

CREDIT SUISSE FIRST BOSTON a Swiss Bank with international activities

CREDIT ASSET SUISSE MANAGEMENT

l global investment banking l global institutional asset management, mutual funds and investment advisory l global fixed income, derivatives and foreign exchange

l global equity

l private equity (investments and advisory)

30 CSFB Business Unit

Organ&ion The CSFB business unit has four core businesses: (i) IBD, (ii) FID, (iii) the Equity Division and (iv) PED. IBD serves a broad range of users and suppliers of capital around the world and provides financial advisory services. FID is active in fixed income trading (including foreign exchange and precious metals trading) and derivative and risk management products. Prior to the FID Integration, which took effect on January 1, 1999, the fixed income business of FID was conducted by the Fixed Income Division and the derivatives business of FID was conducted by CSFP. The Equity Division is active in equity trading, with trading partners worldwide. Through PED, CSFB and other Credit Suisse Group entities participate in privately-negotiated equity investments around the world.

Investment Banking Division The Investment Banking Division engages in investment bankin, 0 activities, including origination and distribution of equity and fixed income securities, advisory services regarding mergers and acquisitions and other matters and leveraged finance. IBD provides comprehensive financial advisory and capital-raising services and develops and offers innovative financings for a broad range of clients around the world. Its business is conducted through the Bank and its subsidiaries, including Credit Suisse First Boston Corporation (“CSFBC”), a broker-dealer registered under the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”), and CSFB AG and its European and Pacific subsidiaries. In the Americas, CSFB’s investment banking activities are primarily organ&d along industry, geographic and product lines. The largest group of investment bankers is based in New York. European investment banking activities are centered in London. CSFB maintains offices in selected major cities in North and South America, Europe and Asia, through which investment banking activities are conducted. In addition to continuing to strengthen its focus on corporate and institutional clients in leadin,u financial centers of the world, CSFB has emphasized the establishment of new offices in financial centers in selected emerging markets. IBD has also established and developed global industry groups with dedicated industry specialists in the areas of chemicals, consumer products, financial institutions, media, telecommunications, health care, natural resources, power, retail and technology, among others. The industry group structure facilitates the delivery of specialist information and services to industry group clients regardless of their location. IBD’s issuing clients include non-US. sovereigns, supranational and national agencies and public sector entities, and U.S. and international public and private corporations. In mid-1998, a group of over 150 investment bankers and research analysts specializing in providing investment banking services to the technology sector joined CSFB, significantly enhancing IBD’s ability to service this industry sector. Advisory. CSFB provides merger, acquisition, corporate sales, divestiture, takeover defense, restructuring and other advisory services throughout the world, including advice regarding privatizations and complex cross-border transactions and joint ventures. CSFB is one of the world’s preeminent advisors in the mergers and acquisitions area. Over the past ten years, CSFB has, based on information from Securities Data Company, been among the top four merger advisors in terms of dollar volume. In 1998, CSFB advised clients in 256 merger and acquisition transactions with a combined value of approximately USD 289 billion (CHF 399 billion), the fifth highest amount for any single advisor in the year. Equity and Fixed Income Underwriting and Distribution. CSFB engages in a broad range of underwriting and other capital-raising activities. CSFB acts as a lead manager or co-manager of public and private securities offerings, many of which are cross-border transactions. It participates in offerings of all types of fixed income securities, including commercial paper, medium-term notes, investment grade debt, subordinated debt and preferred stock. CSFB also participates in a wide range of equity offerings, including initial public offerings (“IPG’s), common stock, convertible securities, offerings pursuant to Rule 14lA under the Securities Act, private equity placements and other equity-related securities. In 1998, CSFB lead managed or co-managed 1,755 global public debt offerings (including Rule 144A offerings with registration rights) with a total value of approximately USD 417 billion (CHF 575 billion) and 186 public equity offerings with a total value of approximately USD 51 billion (CHF 70 billion). CSFB was the fifth leading global IPG manager in 1998, and the fourth leading equity offering global coordinator with approximately USD 17 billion in transactions lead managed in 1998. CSFB’s substantial

31 privatization experience includes some of the largest privatizations to date in Latin America, Asia, Europe and Russia. IBDis activities in the equity and fixed-income underwriting and distribution business are coordinated with those of the Equity Division and with FID’s new issues distribution and secondary trading businesses. Lending and corporate Finance. CSFB offers a wide range of lending and corporate finance products and services principally to large and medium-sized corporate and institutional clients. Such products include working capital and medium-term lines of credit, longer-term credit facilities, acquisition finance, syndicated finance and lease finance products, as well as deposit products. CSFB commits the capital resources and expertise to arrange and underwrite large credit facilities that are subsequently syndicated in the secondary markets. A particular emphasis is placed on providing acquisition-related loans and leveraged loans to serve CSFB’s high-yield and mergers and acquisition clients more fully. In 1998, CSFB arranged over USD 204 billion (CHF 282 billion) in syndicated financings. In connection with the pursuit of its strategic objective to increase returns on capital, the Bank has reallocated, and may continue to reallocate, a portion of the capital currently used to support its corporate lending business. See “The Bank-Risk and Capital Management.” Leveraged Finance. CSFB also seeks to serve the financing needs of non-investment grade companies and leveraged buyout firms. It structures, underwrites and distributes high-yield securities, advises on recapitalizations and provides clients with senior debt and equity financing. In 1998, CSFB managed 145 deals with a total value of approximately USD 23 billion (CHF 32 billion) of high-yield financing% Project Finance. CSFB offers lending, financial advisory and capital-raising services for projects and lease transactions in such industries as power generation, mining, pipelines, paper, steel, telecommunications, oil, gas and chemicals, and for governments and various infrastructure-related sectors. In 1998, CSFB was a lead manager or sole agent for USD 3.3 billion (CHF 4.6 billion) of public and private capital markets project financings. CSFB’s leadership in project finance is reflected in the fact that in 1998 it was named Project Finance Bond House of the Year by Project Finance International, Best Project Finance Bond Manager by Project Finance magazine and Best Project Finance Bank in Europe, Middle East and Africa by Global Finance magazine. Emerging Markets Coverage Group. Coverage for the emerging markets of Latin America, the former Soviet Union, Central and Eastern Europe, the Middle East, Africa and Asia (excluding Japan) is coordinated within the specialist Emerging Markets Coverage Group (“EMC”). EMC is responsible for maintaining and developing client relationships as well as for marketing CSFB’s advisory, financing and hedging products to clients in emerging markets and works closely with corporate finance, industry and product specialists from IBD, FID, the Equity Division and PED. The overall group consists of approximately 160 professionals. EMC maintains responsibility for CSFB’s corporate banking products (including bank lending and syndication) in connection with CSFB’s emerging markets clients. The consolidation of CSFB’s emerging markets financing skills and resources allows for coordinated delivery of services and products and assists in monitoring CSFB’s deployment of capital and establishment of credit risk limits. In this respect, EMC works closely with EMG to deliver corporate banking and related products to CSEB’s emerging markets clients. Global Lease Finance. CSFB maintains a specialist Global Lease Finance group to advise clients on all aspects of leveraged lease transactions, as well as to arrange lease debt, debt and equity defeasance and other lease-related products such as synthetic leases. The group closed 16 transactions in 1998.

Fixed Income and Derivatives The FID Integration, which took effect on January 1, 1999, combined the businesses conducted by the former Fixed Income Division and CSFP. By combining the complementary activities of these two divisions, management has sought to achieve improved client service and more efficient use of the resources of CSFB. FID now operates as one unified division handling all fixed-income cash and derivative products to assist clients in managing their assetsand liabilities. FID services over 5,000 corporate, sovereign and institutional customers worldwide, providing products in the following areas: Interest Rate Products. The Interest Rate Products business combines the government bond activities of the former Fixed Income Division of CSFB with the interest rate derivatives activities of CSFP. As part of this business, CSFB deals in most of the leading government debt markets worldwide, including U.S. Treasury securities, Japanese government bonds and most European government bonds. CSFB is a primary dealer of U.S. Treasury and

32 government agency securities and participates in US. Treasury auctions and government agency new issues. CSFB engages in secondary market sales and trading in U.S. Treasury and government agency securities as we]] as futures and options on such securities. It offers its customer base interactive electronic trading for U.S. government securities through GOVTrade Ihl. These trading activities cover the North American, European and Asian markets. CSFB also offers a wide range of interest rate-related derivative products, including interest rate swaps, caps, floors, collars, swaptions and other interest rate options in all major currencies. CSFB has a major presence in the standard interest rate derivative product markets across all the major currencies and is at the forefront of product innovation. The integration of the government bond activities of the Fixed Income Division with the interest rate derivatives activities of CSFP began early in 1998 as a precursor to the FID Integration and management believes that it has resulted in significant synergies and improved client service. The advent of the euro and the resulting liquidity available in this currency provides investors and borrowers the ability to use a significantly increased variety of interest rate products to manage their risk. Management believes that CSFB is now well positioned to offer these products. Credit Products. The Credit Products business comprises all client activities with a credit component. These activities include: Investment-grade and high-yield securities: CSFB manages and participates in a variety of securities offerings, including U.S. registered public offerings, global offerings, Eurodollar offerings, Yankee and foreign bond offerings, non-dollar denominated offerings and private placements, involving all types of fixed income securities, including those issued by U.S. and non-U.S. governments and governmental agencies, corporations, partnerships, trusts and other issuing entities. CSFB actively underwrites and trades in the secondary market a variety of securities issued by corporate clients, including investment-grade debt, high-yield and emerging markets securities. Asset-backed instruments and mortgage securities: CSFB actively underwrites, issues and trades a variety of mortgage-backed and asset-backed securities, including those issued by government-sponsored enterprises and private mortgage and asset pooling vehicles, and securities backed by auto loans, leases and other receivables. Credit derivatives: CSFB’s credit derivatives business includes swaps, options, assets and structured investments on individual rights and baskets of credit across the spectrum of credit quality. It is active in both developed and emerging markets. Under the new FID structure, Credit Products provides a platform for delivering a broad range of debt and debt-related products to meet clients’ financing needs.For example, management believes that the linkage of CSFB’s derivatives expertise with its underwriting and placement capabilities should enable FID to service arbitrage borrowers effectively. A new combined structuring group is intended to facilitate custom-tailored solutions to clients’ asset and liability management problems, and the integration of credit derivatives with asset-backed technology is designed to create new opportunities for clients in terms of capital raising and credit risk management. In 1998, CSFB rose to fifth in the World-Wide Debt league table and second in U.S. asset backed securities. In addition, CSFB introduced the first DEM-denominated European high-yield transaction with a DEM 300 million issue for a German healthcare company. Swiss Ftied Income. In Swiss Fixed Income, CSFB is the market leader in both capital markets and trading. In 1998, CSFB lead-managed 94 issues totaling more than CHF 23 billion - the strongest showing ever by a bank in the Swiss capital market, according to International Financing Review. In 1998, for the fifth consecutive year, International Financing Review named CSFB the “Swiss Franc Bond House of the Year” and designated a CHF 2 billion offering managed by CSFB for a sovereign issuer as “Swiss Franc Bond of the Year.” CSFB also helped develop a market for Swiss mortgage-backed securities in 1998 through the underwriting of eleven transactions with maturities ranging from 4 to 12 years and a total notional amount of CHF 3.4 billion. CSFB continues to be the largest dealer to domestic Swiss franc bond investors, and the dominant (X-IF-denominated bond trader in Switzerland. Commodities. FID’s Commodities group combines the Fixed Income Division’s and CSFP’s precious metals and energy businesses. Under the FID structure, CSFB is able to serve as a global market maker for precious metals, offering a full product range to its clients, while also offering risk management and investment products in both of the primary industrial commodities markets - energy (including oil, natural gas and oil products) and precious

33 metals (principally gold and, to a lesser extent, silver). Products include structured hedgings, swaps, forwards, options, loans and leases, spot trading, clearing, physical supply of products and refining capabilities. The majority of CSFB’s commodity-related derivatives business focuses on longer-term and larger-volume transactions, offering its clients liquidity that is more difficult to tind or is not available in exchange-traded products. Building on CSFB’s experience in physical gold transactions and its reputation for imaginative commodity derivatives transactions, the Commodities business is now a full-service provider of precious metals and energy products targeting defined customer segments with 24-hour coverage world wide. Global Foreign Exchange. CSFB has a global foreign exchange group with professionals located around the world that offers a full range of currency transactions, including forward and spot trading and swaps and options in all major currencies. CSFB has become a leading participant in the USD 1.5 trillion-a-day foreign exchange market, ranking among the top five non-U.S. foreign exchange trading houses in 1998, according to the Financial 7imes. CSFB also offers a full range of foreign exchange risk management and investment products. Global Foreign Exchange moves significant flows through its market-making desks and has developed close relationships with a diverse global client base. In addition, since the Reorganization, CSFB has sought to develop a distinctive identity in the market through the innovative nature and large scale of its product offerings. The FID Integration has brought the Fixed Income Division’s and CSFP’s option books together across the maturity spectrum, which is intended to strengthen CSFB’s position in the derivatives market and broaden its offerings to clients. CSFB anticipates introducing Internet delivery of most applications during 1999, which is expected to include research and advisory as well as automated trading. Emerging Markets. CSFB underwrites, invests and trades in the fixed income securities and loans of a number of sovereign and corporate issuers and obligors located in emerging market countries. CSFB has established a strong trading capability and presence in various emerging markets such as Argentina, Brazil, Chile, the Czech Republic, India, Indonesia, Korea, Malaysia, Mexico, the People’s Republic of China, Poland, Russia, South Africa, Thailand and Turkey. It trades both local market and international securities (including so-called “Brady” securities), over- the-counter currency options and forwards and other derivative and structured products based on or referenced to local market securities and loans. Supported by a unified emerging markets macro, credit and relative-value research group, FID’s Emerging Markets structuring team offers an efficient, multi-product delivery platform and advanced structuring capabilities. In addition, CSFB recently created a G20 emerging market sales group to ensure comprehensive delivery of emerging markets products to clients in G20 countries. The Russian crisis prompted CSFB to adopt a lower risk profile in the second half of 1998, which is expected to be maintained in 1999, but it did not affect CSFB’s strategy of offering a full range of emerging markets products to its clients. In July 1998 CSFB acquired Garantia, the largest investment bank in Brazil. The integration of Garantia has proceeded as planned, and has allowed CSFB to expand its global reach and attain deep local penetration in an important market. Principal Transactions Group. PTG is an integrated real estate financing and investment business that finances and acquires principal positions in a number of real estate and real estate-related products globally. The principal business activities of PTG include the origination, funding and purchase of real estate and real estate-related collateralized loans which are securitized, resold or held for investment purposes; the proprietary and secondary purchase, sale and trading for its own account of a wide range of real estate and real estate-related whole loans, mortgages, commercial mortgage-backed security products (“CMBS”) and other real estate and commercial assets and products. In 1998, despite a deterioration in fixed income credit markets, PTG securitized more than USD 13 billion in assets, an increase of 225% from the prior year. According to Commercial Mortgage Alert, for 1998, PTG ranked second in commercial real estate securitizations and third in the lead manager underwriting rankings. Consistent with other initiatives of the Bank, management has decided to reduce the risk profile of PTG during 1999. Prime Brokerage and Futures. CSFB provides brokerage services for its customers on all major futures and options exchanges worldwide. CSFB offers a wide array of execution services including tloor and electronic

34 execution, “upstairs execution” (which includes a combination of services such as research, development of trading ideas and strategies, and more individualized institutional account coverage), quantitative and technical research and relative value analysis. With a large number of new subscribers, CSFB is among the leaders in capturing the potential of electronic trading. CSFB became the first futures commodities merchant to offer full Internet electronic trading systems to institutional clients covering all major futures exchanges. CSFB also introduced a fixed income prime brokerage service, which offers customers the ability to clear, receive risk-management services, custom& reporting and get real-time transaction information electronically. Research. CSFB has a global-fixed-income research and economics group with approximately 190 professionals. With major offices in New York, London, Zurich, Singapore, Hong Kong, Sao Paul0 and Tokyo, the group provides macroeconomic analysis on developed and emerging-market countries and fundamental and technical analysis on a wide range of securities and market sectors. The group prepares daily, weekly and monthly publications on all aspects of the market, including the Treasury; corporate, mortgage, asset-backed, emerging market, high yield and foreign exchange markets, available to customers in traditional formats and through the Internet. CSFB’s fixed income research was voted third in a 1998 Institutional Investor survey of 1,600 CFOs in 1998. Money Markets. Combining the money marketFX forwards and unsecured funding functions of CSFB and CSFP within FID allows CSFB to manage its unsecured financing requirements on an integrated basis. The management of unsecured funding is pursued in a manner consistent with CSFB’s targeted liquidity profile while seeking to create longer term value based upon the Money Markets group’s view of global interest rates and economic trends. The financing is conducted through the issuance of a wide variety of products, including time deposits, CDs, commercial paper, medium-term notes and bankers acceptances. Coverage. The Coverage Group is the point of contact through which FID delivers the products and services described above to its clients. By combining the client coverage teams of both the Fixed Income Division and CSFP, CSFB has assembled a group of over 500 professionals. Management believes that with this expanded Coverage Group, clients will now more easily be able to access the range of CSFB’s technical expertise, from the simplest securities to complex derivatives strategies, and CSFB’s broad range of products and services.

Equity Division CSFB engages in a broad range of equity activities for investors around the world, including sales, trading, brokerage and market-making in U.S. and international equity and equity-related securities, options and futures. The Equity Division is composed of over 1,800 employees globally, acting on behalf of over 2,500 clients and for its own account. CSFB’s activities cover both exchange-traded and over-the-counter traded securities, including American Depositary Receipts, restricted stock, equity repurchases, block trade executions, equity derivatives and convertible securities. CSFB is continuing to expand its equities business, where it believes there are substantial opportunities for growth on a global basis, through investment in, and allocation of, resources. This expansion involves coordinated growth in personnel and expenses and capital across the equity capital markets, sales and trading, derivative and research areas. For example, in 1998, CSFB acquired Garantia, First Pacific and First NZ, establishing itself as a leading investment banking franchise in the respective markets of Brazil, Australia and New Zealand. New Issue Distribution and Secondary Trading. CSFB manages and participates in offerings of all types of equity securities, including common stock, convertible securities and other equity-related securities. CSFB participates in these offerings as underwriter or agent and sells securities in public and private offerings throughout the world. Equity distribution specialists work closely with their colleagues in IBD on new equity issues. CSFB maintained a leading position in international equity offerings in 1998, co-ordinating, among other prominent transactions, a USD 1.1 billion secondary global offering for a Greek national telecommunications operator, the first Greek company listed on the NYSE. CSFB conducts its secondary sales and trading activities both as principal and as agent on behalf of investors. CSFB has long-standing relationships with a wide range of domestic and international clients, including institutional clients such as banks, corporations, thrifts, insurance companies, pension funds, mutual funds, hedge funds, investment advisers, endowment funds, foundations, state and local governments, sovereigns and supra-national organizations. As agent, CSFB effects brokerage transactions in equity securities for such customers, thereby

35 generating commission revenues. Transactions as principal involve making markets in securities to facilitate sales to and purchases from customers, and taking long and short positions in securities in an attempt to realize investment or trading gains or to facilitate the execution of block trades on behalf of customers. These trading activities involve the North and Latin American, European and Asian markets. The BZW Acquisitions and the Garantia Acquisition in 1998 have added the UK and Brazil, respectively, to Switzerland and Eastern Europe as markets in which CSFB enjoys leading market maker status. Equity Research. CSFB produces publications and studies on national and regional economies and financial markets, portfolio strategy, technical market analysis and industry developments for investment professionals, corporations and governments. In addition, CSFB develops investment recommendations and publishes market information on a broad range of companies and industries in the United States, Europe (including Eastern Europe), Latin America and the Pacific. CSFB’s analysts and researchers employ a value-based approach to help identify companies earning returns in excess of their cost of capital, and hence likely to generate value for shareholders. In the Americas, over 100 analysts cover 70 industries and over 1,100 individual companies. In Europe, after the BZW Acquisitions, over 100 analysts cover more than 30 industries in Western Europe and six emerging European countries, providing research on approximately 800 companies. In Switzerland, eight analysts cover approximately 60 companies. In Asia, 43 analysts conduct research on nearly 20 sectors, which are among the most active industries in Asia’s emerging markets. The Garantia Acquisition adds to CSFB’s Latin American research coverage. Currently there are 150 companies under coverage in Latin America. CSFB’s 1998 acquisitions of First Pacific and First NZ give CSFB Australia and New Zealand franchises with significant research capabilities. CSFB’s equity research is available to customers both in traditional formats and electronically through First Call and the Internet. In 1998, the equity research department received professional recognition in the U.S. when the department earned 27 total places on the Institutional Investor All-America Research Team, ranking sixth overall. For the second year in a row, CSFB also received the most votes (six) in a survey for up-and-coming analysts. In Europe, the research group earned 16 places on the recently released Institutional Investor All-America Research Survey, gaining a sixth place finish. In addition. according to the Extel Survey, CSFB was ranked fourth in the U.K. and sixth for pan-European research, and was also ranked sixth for pan-European research by Institutional Investor in 1999. In the most recent Asia Money poll CSFB analysts placed eighth, showing dramatic improvement over prior years. Furthermore, CSFB’s Australian analysts have historically ranked in the top three in Asia Money’s rankings. Convertible Bonds and Derivatives. CSFB structures innovative primary- and secondary-market transactions that are designed to solve clients’ risk management problems and provide clients with financing and investment alternatives through convertible bonds and various financial derivatives, including options, equity-linked derivative products and other proprietary risk-management techniques. CSFB also conducts convertible arbitrage, international arbitrage, index arbitrage and other program-trading activities on a proprietary basis and for institutions wishing to liquidate, invest in or restructure large equity portfolios. In addition, CSFB enters into listed and over- the-counter derivatives transactions as part of its trading activities for its own account to manage its own risks and as an alternative to investment in the cash markets. RiskArbitrage. CSFB engages in the risk arbitrage business, which involves investing for CSFB’s own account in the equity securities of companies involved in publicly-announced corporate transactions. Securities Lending ana’ Borrowing. CSFB finances its equity positions primarily through stock lending, equity repo and unsecured borrowings. It also engages in dealer to dealer financing and covers proprietary and client short positions through securities borrowing/lending arrangements. CSFB participates in these globally and has an established prime brokerage business to attract more client borrowings of cash and securities.

Private Equity Division PED directs the worldwide private equity investment activities of the Credit Suisse Group of companies. PED invests through privately-negotiated transactions primarily in unlisted or illiquid equity, or equity-related securities, drawing upon the global resources of CSFB, the Credit Suisse Private Banking business unit, Credit Suisse Group, and the other business units, including their global network of industry and product professionals. PED’s management believes that the relationships and market and industry knowledge within these organizations generate significant investment opportunities for PED to provide its expertise and capital.

36 Aggregate funds invested by Credit Suisse Group for which PED was responsible at December 3 1, 1998 totaled approximately USD 345 million (CHF 476 million). In addition to Credit Suisse.Group’s capital commitment to PED, PED manages an international private equity fund (the “International Fund”) that includes significant capital commitments from Credit Suisse Group as well as third-party investors. The International Fund had a final closing in May 1998 with total commitments of USD 608 million. PED has a similar fund for investment primarily in U.S. and Canadian companies (the “U.S. Fund”) which at December 31, 1998 had closings with commitments in excess of USD 1.66 billion (CHF 2.29 billion). As of March 31, 1999, the U.S. Fund had total committed capital in excess of USD 1.85 billion. The U.S. Fund also includes significant capital commitments from Credit Suisse Group as well as third party investors. In light of the market conditions prevailing in Russia since the second half of 1998, PED has currently suspendedthe raising of a similar fund for investment primarily in Russian and Ukrainian companies. In order to continue to foster a culture that encouragesstrong employee performance, CSFB and Credit SuisseGroup have given Managing Directors at CSFB and certain senior level employees in the other business units and at Credit Suisse Group the opportunity to participate in investments made by PED through a leveraged co-investment program. Directors of CSFB may also participate in this program, but on an unleveraged basis. The investments made by PED, either directly or through a fund that it manages, will be funded by directly held subsidiaries of Credit Suisse Group and not CSFB. Accordingly, the Bank does not bear the risks or realize any benefits associated with the return on such investments. The Bank is, however, responsible for personnel expenses of PED and receives advisory or management fee income with respect to both the International Fund and the U.S. Fund. Prior to the establishment of PED, the Bank and certain of its subsidiaries as well as Credit Suisse Group and certain of its subsidiaries made private equity investments.

CSAM Business Unit CSAM, the Bank’s asset management business unit, focuses on serving institutional and mutual fund clients worldwide. CSAM operates largely as a domestic manager in the United States, Switzerland, Japan, Australia, Germany, Italy, France, Spain and Eastern Europe, and is active in the international asset management markets through London and New York. CSAM also structures and manages mutual funds which are distributed to retail and institutional customers by the Credit Suisse business unit and the Credit Suisse Private Banking business unit and by third parties in most of CSAM’s domestic markets, and which are structured as offshore and domestic registered funds. Lastly, CSAM provides investment advisory services in Switzerland and Germany to institutions who want services and advice but choose to retain discretionary authority. CSAM endeavors to provide high quality and innovative investment products to both domestic and international clients. CSAM’s business strategy includes enhancing its asset management, mutual fund and investment advisory businesses through the expansion of its existing business and by selective acquisitions. The following tables set forth certain data as of December 31, 1998 concerning the assets for which CSAM provides management or advisory services. December 31, 199% December 31,1997 (in CHF billions) (in USD billions)” (in CHF billions) (in USD biUions)‘2’ Total Assets@’ Assets under discretionary management ...... 212 154 177 123 Assets under advisory management...... - 85 - 61 85 59 Total assets ...... 297 E215 E262 Z182 Mutual funds distributed (included in total assets above) ...... 74 54 63 44 December 31,1998 December 31,1997 Asset ‘Qpe (discretionary assets only)“’ Fixed income ...... -...... 50% 55% Equity ...... -...... 20% 19% Balanced ...... 21% 18% Other ...... - 9% 8% Total . . .._...... -...... -.. E100% E100%

37 Decenlber31, 1998 December 31,1997 Client Structure (discretionary z&sets only) Domestic ...... 47% 41% Cross Border ...... 19% 18% Funds ...... - 34% - 41% Total ...... ~...... 2% 100%

(I) Translation of Swiss francs into U.S. dollars has been made at the rate of CHF 1.38 = USD 1.00 (the December 3 1, 1998 Exchange Rate). Such translation is provided solely for the convenience of the prospective investor. (2) Translation of Swiss francs into U.S. dollars has been made at the rate of CHF I A.4 = USD I .OO(the December 3 I, 1997 Exchange Rate). Such translation is provided solely for the convenience of the prospective investor. (3) The 1997 data presented herein have been restated from previously published information to reflect a reclassification of hedging transactions for U.S. clients as advisory products, in conformity with the 1998 presentation.

Institutional Asset Management and Advisory Services CSAM provides its institutional clients with discretionary asset management services through segregated or pooled accounts. CSAM offers these clients a wide array of products, including money market currency products; fixed income products in local and global markets, including special&d and emerging markets; equity products in local and global markets, also including specialized, quantitative and emerging markets; derivative’ and commodities products; balanced and asset allocation products; and quantitative indexed products. The investment policies of CSAM’s portfolio managers are generally focused on providing maximum return within the investor’s investment criteria, while maintaining a controlled risk profile and adherence to highest quality compliance and investment practices. CSAM’s advisory services include advice on specific and customized investment opportunities, new product and risk management strategies, global investment reporting and controlling services. CSAM’s institutional asset management, mutual fund and advisory services are executed on a regional and functional basis. Management of Regional Business for Domestic Clients. CSAM’s domestic market strategy reflects the fact that a large portion of retirement savings are raised in domestic markets around the world. CSAM’s funds under management in domestic markets, including mutual funds, account for over two-thirds of its total assets under management. CSAM’s most significant domestic market i&e Swiss market, and it has smaller domestic operations in the United States, Japan, Australia, Germany, France, Italy, the United Kingdom, Spain and Eastern Europe. CSAM’s business in Switzerland maintained its leading position in 1998 and enjoyed strong growth in discretionary and advisory assets. Growth resulted from strong investment performance, effective marketing and stable market share. CSAM’s London-based operation continued to demonstrate its leadership and strong perfbrmance in global fixed income and European equities. CSAM’s U.K. unit trust group exceeded GBP 1. I billion of assets under management. Additionally, during 1998 CSAM France purchased the Paris-based Groupe Cristal with FRF 8 billion assets under management to significantly strengthen its French retail and institutional business. CSAM’s U.S. business, formerly BEA, changed its name to CSAM in early 1999. During 1998, the group maintained its successful performance in high yield and maintained its highest ranking in the Frank Russell Universe for fixed income, as well as maintaining its successful record in international equity. In February 1999, CSAM announced the purchase of Warburg Pincus Asset Management, which represents an important strategic addition, providing additional U.S. equity capability, no load mutual fund distribution, an attractive high net worth business and a group of talented professionals. Following the Warburg Acquisition, the U.S. operation will have approximately USD 56 billion of assets under management. During 1998, CSAM launched a significant growth initiative in Japan to take advantage of the structural changes in that market and Credit Suisse’s historically strong position. The initiative will focus on large corporate pension funds, mid-sized corporate pension investors and retail mutual funds, and will seek to take advantage of new rules which allow Japanesebanks to sell mutual funds. CSAM to date has been one of the leaders in registering its products for sale through the new bank channel. Japaneseassets distributed through CSAM grew rapidly reaching

38 JPY 1.3 trillion by December 31”’ 1998, JPY 207 billion over the December 31”’ 1997 level. Australia, another growth market for CSAM, grew 5 1%, ending the year at AUD 6.9 billion. Growth was achieved through superior investment performance, strong marketing and the initiation of a retail marketing effort. Management of Functional Businesses. Overlying the regional structure, CSAM has identified four functions: Equity, Fixed Income, Institutional Distribution and Retail Distribution. The functions serve to coordinate a global product to ensure quality and consistency of investment process and maximize leverage of CSAM’s overall capability. The challenge for the global equity function is to take a substantial and broadly diverse array of equity asset classes around the world and support them in their domestic activities while bringing them together into a global equity product. Along these lines, CSAM has continued to develop its global product definition and has created a global research initiative to harness and coordinate the substantial resources in equity research. Global fixed income has focused on response to the EMU, specifically developing credit spread product in Europe. Global institutional marketing has focused on building a global marketing effort and capitalizing on the cross-selling of CSAM’s broad geographic capability.

Mutual Funds CSAM offers a wide range of open-ended mutual funds through its mutual fund company, Credit Suisse Asset Management Fund Holding. The funds are marketed under the Credit Suisse brand name. The approximately 170 funds are a mixture of offshore funds based in Luxembourg, domestic funds registered in Switzerland and a series of funds registered in most of the domestic markets where CSAM currently has operations. While money market funds are the largest portion of the assets under management, the funds include a broad array of domestic and international equity, fixed income and balanced asset classes. The majority of the Credit Suisse funds are distributed through the Credit Suisse business unit and the Credit Suisse Private Banking business unit. Net retail sales were USD 5.6 billion in 1998, bringing total historical retail sales to USD 54.1 billion at December 3 1, 1998. In addition, CSAM distributes funds to third parties in most of the domestic markets throughout Europe, Eastern Europe and Japan. Through the Warburg Acquisition, CSAM will also have a mutual fund capability in the U.S. CSAM expects its mutual fund activities to become an increasingly important part of its business strategy and intends to increase third party distribution outside of Switzerland. Finance, Administration and Operations The business units of the Bank have finance, administration, operations and other support departments, including controllers, credit, corporate services, information technology, legal and compliance, human resourcesand operations. These departments support the Banks diverse global businessesthrough the processing of securities, foreign exchange and commodities transactions; receipt and delivery of funds and securities; safeguardingof customers’ securities; internal financial controls, including management of global expenses, capital structure and funding; and ensuring compliance with regulatory and legal requirements. Certain of these areas also assistin the management and monitoring of the risks associated with the Banks business activities (see “-Risk and Capital Management”). Employees At December 31, 1998, the Bank had approximately 15,670 employees, of whom approximately 5,820 were in the Americas, 7,490 in Europe and 2,360 in Asia and the Pacific. CSFB employees (including both professional and nonprofessional) by core business area were approximately 2,070 in IBD (including approximately 200 in Equity Capital Markets), 3,110 in FID (including approximately 160 in the Emerging Markets Coverage Group), 1,860 in Equities, 60 in PED, and 6,970 in CSFB administration and support and 1,580 at CSAM. The Bank had approximately 13,200 employees worldwide at December 3 1, 1997 and, prior to the Reorganization, approximately 26,400 employees worldwide at December 31, 1996. The figures in this paragraph include consultants as well as employees, and aggregate the hours of part-time employees to arrive at full-time equivalents. No shares in the capital of the Bank are currently held by members of the Board of Directors, management or staff. The Bank is wholly owned by Credit Suisse Group, whose representatives were elected to the Board of Directors of the Bank pursuant to Article 707, paragraph 3 of the Swiss Code of Obligations and are not required to hold shares in the capital of tbe Bank. No member of the Board of Directors or of the management of the Bank has any interests in transactions effected by the Bank during the past or current financial year which are or were unusual in their nature or conditions

39 or significant to the business of the Bank. For information on loans by the Bank to members of the Board of Directors or management, see page 48 of the Bank’s Annual Report for 1998, which is attached as Annex I hereto. Properties The Bank and its subsidiaries occupy in excess of 4.25 million square feet in 41 countries. This includes 1.9 million square feet in New York and over 0.9 million square feet in London with owned properties in a number of locations including London and Princeton. Following the GarantiaAcquisition in Brazil, there were new premises in Sao Paul0 and Rio de Janeiro. Legal Proceedings and Regulatory Examinations The Bank is subject to comprehensive regulation and supervision under various laws governing broker-dealers, banks, investment advisors and participants in the commodities industries as well as rules and regulations of various self regulatory organizations and stock, commodities, futures and options trading exchanges around the world. The businesses of the Bank are routinely examined by regulatory authorities in the countries in which the Bank conducts its activities. A number of such regulatory examinations are ongoing at this time, including a formal, on-site examination by the Japanese Financial Supervisory Agency (“FSA”) of the Bank’s businesses in Japan. The Bank is the first non-Japanese financial institution to be examined in such a manner by the FSA since the FSA was established last year. FSA examiners have questioned certain transactions entered into by the Bank in Japan and are also inquiring into certain supervisory and other issues. Pursuant to the laws of Japan, the FSA has the power to impose a broad range of penalties and sanctions, including the suspension or revocation of some or all of the Bank’s licenses to do business in Japan. The examination is at a preliminary stage, and it is too early for management to know what the outcome of the examination will be. The Bank does not believe that the aggregate liability or other consequences resulting from regulatory examinations and pending or threatened legal proceedings against the Bank is likely to have a material adverse effect on the consolidated financial condition of the Bank.

Risk and Capital Management

General Approach The general risk management policy of Credit Suisse Group serves as the basis for the Bank’s risk management programs. The primary responsibility for risk management lies with the Bank’s senior business line managers, who 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 Bank’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. See “Overview of Risk Management” in the Bank’s Annual Report for 1998, which constitutes Annex I to this Information Statement. The Board of Directors is responsible for determining 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 ai CSFB Business Unit The policies and procedures regarding risk and capital allocation witbin CSFB are established by CSFB’s Credit Policy Committee/Capital Allocation and Risk Management Committee (“CPCKXRMC”). CPCKARMC is chaired by the Vice Chairman of the Executive Board of CSFB (the “Vice Chairman”), and its membership includes the Chief Executive Officer, the Group Risk Officer, the Chief Financial Officer (“CFO”), the Head of Strategic Risk Management, the Chief Credit Officer, the Head of Risk Measurement and Management and the heads of each division of CSFB except PED. CPCKARMC approves capital management procedures and guidelines, sets risk limits and allocates capital to the individual divisions. This allocation is an important element in setting upper limits on levels of activity in

40 the Bank’s various businesses that create counterparty and market risks. CPCKARMC also is involved with and approves business decisions that, in its view, involve greater-thannormal business risk. In response to the market turmoil of the second half of 1998, CSFB has implemented several important changes designed to strengthen its risk management organization and to provide for an integrated approach to the measurement and management of credit and market risk. These changes primarily involve the creation of new Strategic Risk Management (“SRM”) and Risk Measurement and Management (“RM&M”) groups, in addition to the existing Credit Risk Management (“CRM”) group. Strategic Risk Management. SRM is responsible for assessing the overall risk profile of CSFB on a global basis and recommending corrective action where appropriate. It acts as an independent check with respect to all risks that could have a material impact on CSFB. The Head of SRM reports directly to the Vice Chairman. Credit Risk Management. CRM is headed by the Chief Credit Officer, reporting to the Vice Chairman. 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 concentrated positions in trading inventory. Unusual risks and specific policies and procedures are reviewed and approved by CPCKARMC. CRM’s responsibilities are carried out by senior officers within the CRM function who provide dedicated coverage to each of CSFB’s major businesses, IBD, FID and the Equity Division, including the emerging markets business. Each of these CRM units is oganized 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 Officer, who in turn has been granted the full legal lending authority of CSFB. CRM also is responsible for assessing the overall loan portfolio and recommending credit provisions as appropriate. Market Risk Management. The market risk management function is led by the Head of RM&M, who reports directly to the Head of SRM and the CFO. RM&M consolidates exposures arising from all trading portfolios and geographic centers on a daily basis. CSFB uses two methodologies to measure and manage the market risks that it may undertake: the “value-at-risk” method and scenario analysis. The value-at-risk method 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 are responsible for monitoring CSFB’s market risk utilizations, exposures and risk-adjusted performance; (ii) trading management are responsible for actively managing their positions against approved risk limits; and (iii) RMdcM is responsible for monitoring exposures against approved risk limits, obtaining appropriate approval for limit excesses and ensuring that trading management bring exposures within the limits following limit excesses when appropriate. Management of Other Risks. Other business-specific risks are managed primarily through designated groups and committees within the different divisions. For example, the Investment Banking Committee reviews and approves most investment banking transactions, with a special focus on risks (such as legal and reputational risks) that are inherent in such transactions. A similar risk management program has been established for PED with the formation of an Investment Committee. Before any new activity is undertaken, the New Business Committee is required to review the proposed business, its structure and infrastructure requirements. This Committee is designed to ensure that all risks (such as operational risks) that are inherent in 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 oversight 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 to manage local oversight issues. Regional Oversight and Country Management serve as an additional line of control and concentrate on regulatory and reputational issues, supervising legal entities and supporting

41 management in its efforts to improve the control environment. This oversight function works with business and Finance, Administration and Operations executives in monitoring and enhancing CSFB’s controls. Various control committees act as a clearing house for certain control issues.

Risk Management at CSAM Business Unit The CSAM business unit, being in the discretionary asset management business, does not take on any proprietary positions. CSAM established during 1997 a global function called Product Control, which includes both control of the investment processes and risk management. Control of the investment processes deals with performance measurement, risk measurement, conformance with client guidelines and ongoing review of investment processes to ensure that the client is getting the best possible asset management product with an appropriately controlled risk level. Risk management entails the operating, regulatory and compliance risks associated with the asset management business. CSAM has formed a Global Product Control Committee which has set standards and implementation agendas for the CSAM business unit. Each regional unit will have its own Product Control Manager and committee to implement the product control program. While the Legal and Compliance Department is a participant in the Product Control function, it remains a separate global function with independent compliance officers in every location where assets are managed. Legal and Compliance is responsible for implementing regulatory requirements, ensuring adherence to customer guidelines and industry practices and making sure that employees are aware of their regulatory responsibilities.

Information Systems

General Since the Reorganization, the Bank has continued to integrate on a global basis the information systems of different businesses or entities that previously operated more independently. This integration is proceeding, and a number of temporary solutions have been implemented that are intended to assure that there will be no material shortfall in the availability of information necessary for management of the activities of the Bank. A number of longer-term improvements to the Bank’s information systems and related infrastructure for risk management and other purposes are underway for both of its business units, which are in addition to those described under “Year 2000” and “European Monetary Union” below. The information systems department of CSFB launched a Business Processing and Technology Architecture (“BPTA”) project during 1998. This project is intended to result in a clear and integrated future target for CSFB’s information systems and supporting infrastructure and to provide overall context and a framework for IT investment decisions going forward, and is expected to ensure that projects delivering the highest value are undertaken first, and to facilitate the further integration of information systems.

Year 2000 The challenge for financial institutions as the Year 2000 approaches is substantial. Many computer systems and software applications, including those used by the Bank, identify, store and process dates using only the last two digits of the year. As a result, such computer systems and software applications may fail or may provide incorrect information after December 3 I,1999 or when using dates after December 3 1, 1999. Because it is dependent upon the proper functioning of its own computer systems and software applications as well as those of the external entities with which it must interact, that inability (referred to as the “Year 2000 issue”), could have a material adverse effect on the Bank. The Bank began addressing the Year 2000 issue in 1996, and established a formal Global Program Office structure in 1997 to provide oversight and coordination of all efforts required for this project. The Bank’s’Year 2000 plan consists of five key phases-inventory, assessment, remediation, testing and implementation. As part of its assessment efforts, the Bank identified which of its systems were mission-critical, critical and non-critical, and initially focused its plans on the mission-critical and critical systems. As of December 31, 1998, the Bank had substantially completed the inventory, assessment,remediation and future date testing phases for its mission-critical and critical applications. It is the Bank’s goal to have all of its mission-critical and critical systems and infrastructure components fully compliant and implemented by June ‘1999 (i.e., fully tested systems running on fully tested supporting infrastructure in a production environment.)

42 The Bank is performing extensive tests on its applications, including three types of internal testing (regression testing, future date testing and end-to-end testing), and two types of external testing (point-to-point/bilateral testing and industry testing). Internally, both Bank-developed as well as third party mission-critical and critical products, services and interfaces will be tested. Externally, the Bank has been and will continue to participate in major securities and banking industry-sponsored testing worldwide. In 1998, the Bank participated in over 25 industry tests. It has taken a leading role in organizing these tests in the Americas, particularly through the participation of an employee who chairs one of the Securities Industry Association’s Year 2000 Committees. The Bank will also be conducting individual tests with its major counterparts, as well as participating in proxy testing, as appropriate. In addition to remediating its own systems, the Bank is addressing how the Year 2000 issue will impact its external relationships such as interfaces, trading partners, market data feeds, exchanges, customers, vendors, facilities, and other service providers. How well these entities handle the Year 2000 issue could affect the quality or integrity of the services and products they supply to the Bank, their operational capabilities and even their overall viability. The Bank is therefore conducting an extensive external compliance assessment program. As part of this effort, the Bank is attempting to ascertain (to the extent reasonably possible) that its mission-critical and critical products, services and interfaces provided by third parties will be Year 2000 compliant. The Bank is also assessing its material business partners’ preparedness for the Year 2000. This assessment includes consideration of the Year 2000 readiness of material ongoing credit relationships, operational “supply chain” relationships, and corporate service provider relationships. Companies that provide significant IT products, services and interfaces are also included in this assessment in order to evaluate their operational risk versus their technical risk. There are numerous risks associated with the Year 2000 issue. Failure of the Bank’s systems could cause the settlement of trades to fail; lead to incomplete or inaccurate accounting, recording or processing of trades; result in generation of erroneous results; or give rise to uncertainty about the Bank’s exposure to trading risks or the Bank’s need for liquidity. In addition, the Bank is dependent upon, and can be adversely affected by, failures of third parties to remediate their own Year 2000 issues. Year 2000-related failures of an external entity with which the Bank has a financial or operational relationship could result in a material financial risk for the Bank. If the Bank does not successfully address these risks, the Bank may experience business interruption or shutdown, financial loss, regulatory actions, damage to its reputation or legal liability. To address Year 2000 risks, CSFB has developed an overall Risk Management plan. The plan is being administered by a global Risk Management team composed of members from the CSFB’s Americas, Europe and Asia Pacific regions, under the leadership of the global head of Operations and Technology. The team includes front office, operations, financial control and technology representatives. The Risk Management team will produce business continuation contingency plans to be invoked in the event of Year 2000 date-related failures of core business processes, including, but not limited to, information technology system failures. These contingency plans will be developed from a business perspective, focusing on the CSFB’s most important revenue and trading streams, as well as regulatory requirements necessary to maintain business continuity. These plans will encompass:

l major revenue streams

l cross-product IT systems

l cross-product functional support areas (credit risk, market risk, legal and compliance)

l infrastructure components (voice and data networks, corporate services, utilities, etc.) by country and/or region

l external entities (trading partners, market data feeds, exchanges, customers, external service providers, correspondent banks, etc.)

l firm-wide risks (regulatory, litigation, reputational)

l smaller, non-core locations CSFB will be developing mitigation activities for all identified risks. While CSAM does not participate in the Risk Management plan, it is preparing and coordinating similar contingency activities. In addition, the Bank is concerned that an accumulation of relatively small disruptions during the period immediately surrounding the century rollover could lead to more serious breakdowns if not managed closely. A series of small issues might cascade into a more serious destabilization of the Bank’s business or technology support if these issues are not identified and resolved promptly. To address this concern, CSFB will create a global Crisis

43 Management Command Center to oversee the transition to the Year 2000. The Command Center will manage the transition with clear, detailed plans, including escalation and communication procedures. CSFB will develop decision trees to determine appropriate responses to incidents as they occur, including clear guidance on when contingency plans should be invoked. Establishing this Command Center will reduce the risk of small incidents cascading. CSAM plans to develop a similar program. The Bank’s expected target dates are for contingency plans to be completed in the second quarter of 1999 and tested/rehearsed in second and third quarters, with mitigation activities beginning in parallel in the first quarter of 1999 and continuing throughout the year. Planning for the global Crisis Management Command Center is expected to be completed in the third quarter, with implementation in the fourth quarter of 1999. The Bank currently estimates that its Year 2000 project, including costs incurred in 1997 and through the year 2000, may cost approximately USD 23 1 million (USD 217 million relating to CSFB and USD 14 million relating to CSAM). These costs include estimates for employee compensation on the project team, consultants, hardware and software purchase and lease expense, depreciation of equipment as part of the project, identifying, prioritizing, modifying or replacing systems and testing new or modified systems. Approximately USD 5 million (all of which relating to CSFB) and USD 123 million (USD 117 milliotrrelating to CSFB and USD 6 million relating to CSAM) of these Year 2000 costs were estimated by management to have been expended in 1997 and 1998, respectively. In 1997, a reserve of approximately USD 94 million.was established (USD 78 million relating to CSFB and USD 16 million relating to CSAM) to cover anticipated Year 2000 expenses for 1998 through 2000. As the Bank progresses with the Year 2000 issue, estimates of costs could change, including as a result of the failure of third parties to adequately address the Year 2000 issue. There can be no assurance that the Bank will not experience cost overruns or delays in connection with its plan for replacing or modifying systems. The Bank’s expectations about future costs are subject to uncertainties that could cause actual results to differ materially from what has been discussed above. In addition, while the Bank actively monitors and evaluates the status of its plan and believes it will be successful, there is no assurance that it will achieve such results, and targets are subject to change without notice.

European Monetary Union The final phase in the establishment of a European Monetary Union (the “EMU”), under the provisions of the Treaty signed at Maastricht in 1992, began on January 1, 1999, with the introduction of a single European currency unit (the “euro”) into the economies of eleven participating European Union countries and the European Central Bank assuming control of monetary policy for the participating countries. During a transition period of approximately three years, the national currencies of participating states will continue to be in circulation as units of the euro at exchange rates irrevocably fixed during 1998. After this transition period, the national currencies will cease to exist. The introduction of the euro presents major business opportunities for financial market participants such as the Bank. The Bank expects that the introduction of the euro will lead to greater cross-border price transparency and will have a significant impact on the markets in which the Bank operates. The Bank prepared actively for the introduction of the euro and implemented significant modifications to its information technology systems and programs in order to prepare for transition to the euro. The Bank engaged in extensive testing of the systems and processes affected by EMU and also communicated extensively with its clients and counterparties regarding the implications of EMU. The Bank considers the initial redenomination exercise that took place between January 1 and January 3,1999 successful from the perspective of its internal systems and books and records. Despite certain initial issues with the settlement of euro payments it appears that the changeover to the euro has been successful across Europe. Based upon current information, the Bank estimates that the costs associated with reviewing, amending and testing its information technology systems to prepare for EMU through the project’s completion will be approximately USD 112 million (IJSD 105 million relating to CSFB and USD 7 million relating to CSAM). Approximately USD 94 million (USD 87 million relating to CSFB and USD 7 million relating to CSAM) of these costs were estimated by management to have been expended in 1998. In 1997, a reserve of approximately USD 29 million was established (USD 28 million relating to CSFB and USD 1 million relating to CSAM) for anticipated EMU expenses.

44 MANAGEMENT The Bank is headed by Rainer E. Gut as Chairman of the Board of Directors. In addition to its Chairman, the Board of Directors is composed of seven members. This represents a significant reduction in size of the Board of Directors, from a total of 14 members, which was accomplished in conjunction with the creation of two new advisory boards for Credit Suisse Group - an International Advisory Board and an Advisory Board Switzerland. Each of the CSAM and CSFB business units has an Executive Board and a Chief Executive Officer; the business unit Executive Boards and the Chief Executive Officers report directly to the Board of Directors of the Bank. The CSAM business unit also has an Operating Committee which oversees the affairs of the business unit worldwide. The Operating Committee of CSAM reports directly to the Chief Executive Officer of CSAM, all members of the Executive Board are also members of the Operating Committee. The Bank has a CFO and there is a CFO of each business unit. A Coordination Committee, chaired by the CFO of the Bank and composed of the CFOs of each business unit (and any other members appointed by them), is charged with the coordination of non-financial matters that concern both business units or the interests of the Bank. The Board of Directors of the Bank also has Audit and Compensation Committees. The following chart illustrates the management structure of the Bank.

Phillip M. Colebatch, Allen D. Wheat, Chief Executive Officer of CSAM Chief Executive Officer of CSFB Executive Board and Operating Committee Executive Board of CSFB of CSAM

Coordination

45 Board of Directors The Board of Directors of the Bank is responsible for the overall direction, supervision and control of the business of the Bank. The Board of Directors of the Bank is composed of the following individuals:

Name Principal Occupation : Rainer E. Gut Chairman of the Board of Credit Suisse Group Chairman Dr. Peter Spalti Chairman of the Board of Winterthur Vice Chairman Dr. Thomas W. Bechtler Chairman of the Board of Zellweger-Luwa Ltd. Peter Brabeck-Letmathe Chief Executive Officer of Nestlt SA Dr. Marc-Henri Chaudet Attorney-at-Law Walter B. Kielholz Chief Executive Officer of Swiss Re Heini Lippuner Member of the Committee of the Board of Directors of Novartis AG Lukas Miihlemann Chief Executive Officer of Credit Suisse Group

Executive Boards The Executive Boards and the Chief Executive Officers of CSFB and CSAM are responsible for the overall business activities of their respective business units and seek to reconcile issues relating to the various divisions within each business unit. Each member of each Executive Board (and, in the case of CSAM, each member of the Operating Committee of CSAM) is responsible for a core business or function within his or her business unit. The current members of the Executive Board of CSFB and their primary areas of responsibility at CSFB are as follows:

Name Primary Area of Responsibility Allen D. Wheat Chairman of the Executive Board, President and Chief Executive Officer Chairman of CSFB and member of the Executive Board of Credit Suisse Group Richard E. Thomburgh Vice Chairman of the Executive Board and Member of the Executive Vice Chairman Board of Credit Suisse Group Brady W. Dougan Head of Equity Christopher A. Goekjian Co-Head of Fixed Income and Derivatives Stephen A.M. Hester Chief Financial Officer of the Bank and CSFB and Chairman of the Coordination Committee Marc Hotimsky Co-Head of Fixed Income and Derivatives David C. Mulford Chairman-International for CSFB John Nelson Chairman-Europe for CSFB Stephen E. Stonefield Chairman-Pacific for CSFB Charles G. Ward III Head of Investment Banking The current members of the Executive Board of CSAM (who are also members of the Operating Committee of CSAM) and their primary areas of responsibility at CSAM are as follows:

Name Primary Area of Responsibility Phillip M. Colebatch Chief Executive Officer and Member of the Executive Board of Credit Suisse Group Heinrich Wegmann Head of Switzerland

46 The current members of the Operating Committee of CSAM (who are not also members of the Executive Board of CSAM) and their primary areas of responsibility at CSAM are as follows: Name Primary Area of Responsibility Steen Steincke Head of Europe ex Switzerland Toshio Fukuda Head of Japan Andrew McKinnon Head of Australia Robert J. Moore Co-functional Head of Fixed Income Robert Parker C@functional Head of Institutional Distribution and Deputy Chairman, Credit Suisse Asset Management, Ltd. William W. Priest Head of Americas Diiip Rasgotra Co-functional Head of Fixed Income William P. Sterling Functional Head of Equity Timothy T. Taussig Co-functional Head of Institutional Distribution Robert Kosrovani Functional Head of Retail Distribution Edgar Weissenberger Head of Germany

Coordination Committee The Coordination Committee has representatives from CSFB and CSAM, and is chaired by Mr. Hester, as the CFO of the Bank.

Compensation The compensation of certain employees includes Credit Suisse Group stock or interests linked to Credit Suisse Group stock. The compensation of members of senior management may be based in part upon the performance of the business unit of which they are a part and the businesses for which they are responsible.

REGULATION AND SUPERVISION

Regulation and Supervision of the Bank in Switzerland The Bank operates under a banking license granted by the Swiss Federal Banking Commission pursuant to the Swiss Federal Law on Banks and Savings Banks of November 8,1934, as amended (the “Banking Law”), and its Implementing Ordinance of May 17, 1972, as amended (the “Implementing Ordinance”). In addition, the Bank holds a securities dealer license granted by the Swiss Federal Banking Commission pursuant to the Swiss Federal Act on Stock Exchanges and Securities Trading of March 24,1995. Furthermore, the Bank must comply with certain reporting and filing requirements with regard to the Swiss National Bank (the “National Bank”), in particular in connection with capital export transactions. The Swiss Federal Banking Commission, which is the highest bank supervisory authority and is independent from the National Bank, is responsible for the supervision of the Swiss banking system. Among other things, the Swiss Federal Banking Commission has the power to grant and withdraw banking and securities dealer licenses, to enforce the Banking Law and to prescribe the content and format of audit reports. In addition, under the Banking Law, a bank’s business is subject to inspection and supervision by independent auditors licensed by the Swiss Federal Banking Commission. These auditors, who are appointed by the Bank’s Board of Directors, perform a full-scope audit of the Bank’s financial statements and verify that the Bank complies with the provisions of the Banking Law and the Implementing Ordinance. The audit report is submitted to the Bank’s Board of Directors and copies are submitted to the Swiss Federal Banking Commission. In the event that the audit reveals either violations of law or other irregularities, the auditors must inform the Swiss Federal Banking Commission if the violation or irregularity is not cured within a time limit designated by the auditors, or immediately in the case of serious violations or irregularities which may jeopardize the security of creditors. Under the Banking Law, a bank must maintain an adequate relation between its capita1 resources and its total liabilities. Statements of its required and existing equity must be completed semi-annually on a consolidated basis and quarterly on an unconsolidated basis and must be submitted to the National Bank. With effect from February 1, 1995, the Implementing Ordinance was amended to bring Swiss capital requirements more in line with those imposed elsewhere, to take into account the risks attached to off-balance sheet activities and to reflect more fairly

47 the different levels of risk inherent in different levels of activity. The revised regulations take account of a number of key elements of the recommendations of the Basle Committee on Banking Supervision of the Bank for International Settlements, many of which were already, in substance, part of Swiss requirements. A bank must submit its annual statements of condition and detailed monthly interim balance sheets to the National Bank. The National Bank is a corporation the share capital of which is held by the Swiss cantons and cantonal banks, private shareholders and public authorities. It is responsible for the implementation of those’parts of the government’s monetary policy that relate to banks, particularly in the areas of foreign exchange. It publishes extensive statistical data on a monthly basis. The National Bank may demand further disclosures from banks concerning their financial condition as well as other kinds of information relevant to the regulatory oversight responsibilities of the National Bank. Like all Swiss companies with limited liability, the Bank is also required by law to have statutory auditors who are appointed by the shareholders and deliver an auditors’ report to the annual general meeting of shareholders. The statutory auditors and the auditors licensed by de Swiss Federal Banking Commission for the Bank are presently KPMG Klynveld Peat Marwick Goerdeler SA, Badenerstrasse 172,8004 Zurich, Switzerland (“KPMG”). The Bank’s accounts as of and for the years ended December 3 1, 1998 and December 3 1, 1997 were audited by KPMG. The Bank’s accounts as of and for the year ended December 31, 1996 (old Credit Suisse) were audited by Revisuisse Price Waterhouse, Stampfenbachstrasse 109, 8006 Zurich, Switzerland.

Regulation and Supervision of the Bank and the London Branch in the United Kingdom Through the London branch of the Bank (the “London Branch”), the Bank is an “authorised institution” under the UK Banking Act 1987 and is subject to the supervision of &heUK Financial Services Authority (which has replaced the Bank of England as regulator of authorised banks) with respect to the activities of the London Branch. Similarly, the Bank is also a member of the Securities and Futures Authority, under the terms of the Financial Services Act 1986 (the “Financial Services Act”), which regulates the conduct of the investment business of the London Branch. The Bank is also a Listed Money Market Institution under Section 43 of the Financial Services Act and is subject to the supervision of such activities in the United Kingdom by the Financial Services Authority. The supervisory functions of the Securities and Futures Authority will be assumed by the UK Financial Services Authority following enactment of the Financial Services and Markets Bill. This is expected to take place during the year 2000. Currently, the private banking activities of Credit Suisse in the United Kingdom are carried out by Credit Suisse Private Banking through the London Branch. These activities are also subject to supervision by the Financial Services Authority . They are regulated under the Financial Services Act in respect of the conduct of investment business by the Investment Management Regulatory Organization, whose supervisory functions are also expected to be transferred to the UK Financial Services Authority during the year 2000. It is expected that these activities will be transferred to Credit Suisse over time.

Regulation and Supervision of the Bank and the New York Branch in the United States The New York branch of the Bank (the “New York Branch”) is licensed by the Superintendent of Banks of the State of New York (the “Superintendent”) under the New York Banking Law (“NYBL”). The New York Branch is examined by the New York State Banking Department ,and is subject to banking laws and regulations applicable to a foreign bank that operates a New York branch. Under the NYBL and currently applicable regulations, the New York Branch must maintain with banks in the State of New York eligible assets (consisting of specified types of governmental obligations, U.S. dollar deposits, investment-grade commercial paper, obligations of certain international financial institutions and other specified obligations) in an amount equal to five percent of the liabilities of the New York Branch (excluding (i) liabilities to other offices and subsidiaries of the Bank that are wholly owned (except for a nominal number of directors’ shares) and (ii) liabilities of the New York Branch that are booked at its International Banking Facility), as security for the benefit of depositors and other creditors of the New York Branch. The New York Branch is currently in complian’ce with this requirement. The NYBL also empowers the Superintendent to require branches of foreign banks to maintain in New York specified assets equal to such percentage of the branches’ liabilities as the Superintendent may designate. At present, the Superintendent has set this percentage at zero percent, although specific asset maintenance requirements may be imposed upon individual branches on a case-by-case basis. No such requirement has been prescribed for the New York Branch.

48 The NYBL authorizes the Superintendent to take possession of the business and property of the New York branch of a foreign bank under circumstances similar to those that would permit the Superintendent to take possession of the business and property of a New York State-chartered bank. These circumstances include the violation of any law, operating in an unsafe or unsound manner, capital impairments and the suspension of payment of obligations, the liquidation of a foreign bank in the jurisdiction of its domicile or the existence of reason to doubt its ability to pay in full the claims of creditors. Pursuant to the NYBL, when the Superintendent takes possession of a New York branch, it succeeds to the branch’s assets and the assets of the foreign bank located in New York. In liquidating or dealing with the branch’s business after taking possession of the branch, only the claims of creditors (unaffiliated with the Bank) which arose out of transactions with the branch would be accepted by the Superintendent for payment out of these assets. After such claims are paid, the Superintendent will turn over the remaining assets, if any, to the Bank or a duly appointed liquidator or receiver of the Bank. In addition, under the International Banking Act of 1978, as amended (the “IBA”), if the Bank opens a federally licensed branch or agency in the United States, a liquidation of the New York Branch’s business would thereafter be administered by a United States Federal receiver applying United States Federal law, which provides that claims arising from transactions with any branch or agency of the Bank in the United States shall be paid out of all the properties and assets of the Bank in the United States. The New York Branch is generally subject under the NYBL to the same lending limits to a single borrower, expressed as a percentage of capital, as are applied to a New York State-chartered bank, except that for the New York Branch such limits are based on the capital on the Bank. In addition to being subject to New York State laws and regulations, the New York Branch and the Bank are also subject to Federal regulation, primarily under the IBA and the Federal Deposit Insurance Corporation Improvements Act of 1991 (which includes the Foreign Bank Supervision Enhancement Act of 1991 as Title II thereof) (“FDICIA”), and to examination by the Board of Governors of the Federal Reserve System. Under the IBA and FDICIA, all branches and agencies of foreign banks in the United States are subject to reporting and examination requirements similar to those imposed on domestic banks that are owned or controlled by United States bank holding companies, and most United States branches and agencies of foreign banks, including the New York Branch, are subject to reserve requirements on deposits and to restrictions on the payment of interest on demand deposits pursuant to regulations of the Board of Governors of the Federal Reserve System. Because the New York Branch does not engage in “retail” deposit taking, it is not required to be, and is not, a member of the Federal Deposit Insurance Corporation (the “FDIC”). Accordingly, its deposits are not insured by the FDIC. Under the IBA, prior to the effectiveness of the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 (the “IBBEA”), the Bank was restricted from opening new full service branches and establishing or acquiring subsidiary banks in states outside of its “home state” which, in the case of the Bank, is California. The IBBEA was enacted on September 29,1994 and amended certain portions of the IBA. The amendments to the IBA effected by the IBBEA permit the Bank to branch outside of its home state under certain circumstances. The IBA and FDICIA also contain certain restrictions on the Bank’s (and Credit Suisse Group’s) ability to engage in non- banking activities in the United States and require Federal Reserve Board approval for the expansion of its United States operations. FDICIA provides that state-licensed branches, such as the New York Branch, generally may not engage in any type of activity that is not permissible for Federally-licensed branches, which in turn are generally subject to the regulations pertaining to national banks. In addition, state licensed branches are subject to the same limitations with respect to loans made to a single borrower as are applicable to Federally-licensed branches. Section 202(e) of FDICIA author&s the Federal Reserve Board to terminate the activities of a United States branch of a foreign bank if it determines that the foreign bank is not subject to comprehensive supervision on a consolidated basis in its home country, or that there is reasonable cause to believe that such foreign bank, or an affiliate, has violated the law or engaged in an unsafe or unsound banking practice in the United States, and as a result continued operation of the branch would be inconsistent with the public interest and purposes of the banking laws. In addition to the New York Branch, the Bank’s presence in the United States includes, as of the date of this Information Statement, a branch in Los Angeles, an agency in Miami and representative offices in Houston, Chicago, Miami and San Francisco. All of these offices are licensed and regulated by state banking authorities in the states in which they operate. These offices must comply with the banking regulations of such states, and, like the New York Branch, are subject to Federal Regulation under the IBA and FDICIA.

49 BUSINESS CONSIDERATIONS

The Bank faces intense competition from various types of firms, in all aspects of its business and throughout the world. The types of firms with which it competes include brokers and dealers in securities and commodities, investment banking firms, commercial banks, merchant banks, asset management entities and other firms offering financial services. Certain of the firms with which the Bank competes have greater capital and other resources than the Bank. This competition affects, among other things, the Bank’s ability to attract and retain qualified employees. The principal competitive factors influencing the Bank’s business are its professional staff, its reputation in the marketplace, its existing client relationships and its mix of market capabilities. Moreover, the Bank’s ability to access capital at competitive rates (which is generally dependent on the Bank’s credit ratings) and commit capita1 are important competitive factors in relation not only to generating potentially higher sales and trading revenues, but also attracting business opportunities involving the facilitation of major transactions by clients. In addition, the Bank’s activities are subject to various risks including defaults or moratoriums by sovereign and corporate borrowers, volatile trading markets, currency risk, national economic and political risk, and fluctuations in the volume of market activity.

SUMMARY OF SIGNIFICANT DIFFERENCES BETWEEN SWISS AND U.S. GAAP Accounting principles applicable to Swiss banks are to a large extent shaped by Swiss law as embodied in the Swiss Federal Law on Banks and Savings Banks of 1934 as amended through May 1,1997, the Implementing Ordinance on Banks and Savings Banks of 1972 as amended through December 15, 1997, and the Guidelines of the Federal Banking Commission concerning the Preparation of Financial Statements as amended through October 22, 1997. The principles conform in essence to the fourth and seventh guidelines of the European Union (“EU”) and to the EU guidelines on the preparation of accounts for banking institutions. However, the Swiss accounting rules contain no provision equivalent to Article 37 of the EU guidelines on the preparation of accounts for banking institutions (undervaluation of certain types of assets or overstated provisions). The consolidated financial statements are required to provide a true and fair view of the financial position, and of the results of ,operations and cash flows, of the Bank. Such principles, however, vary from those generally accepted in the United States in the following significant respects.

Financial Statement Presentation In general, in Switzerland the presentation of financial statements for banks is specifically prescribed’ in the Swiss Federal Law on Banks and Saving Banks and the related guidelines to the accounting rules as promulgated by the Swiss Federal Banking Commission. Although the financial disclosure is detailed, it does not necessarily fully conform with U.S. GAAP for banks. In addition, minority interests, including preferred shares of subsidiaries, are included in shareholders’ equity under Swiss GAAP, and net profit (loss) includes the minority interest share thereof. Under U.S. GAAP, minority interests comprise a separate category outside of shareholders’ equity, and the minority interest in operating results is subtracted in arriving at net profit (loss). Under U.S. GAAP, certain movements in shareholders’ equity are recorded as “other comprehensive income” rather than reported directly through the income statement. Such movements include foreign currency translation adjustments, unrealized gains and losseson available for sale securities and minimum pension liability adjustments, which are reversed and recorded through the current income statement when the related assets or liabilities are realised. Under U.S. GASP, the components of comprehensive income are displayed as a primary financial statement. Under Swiss GAAP, the statement of changes in shareholders’ equity is shown as a note to the financial statements, whereas under U.S. GAAP it is a primary financial statement. Under Swiss GAAP, disclosure of earnings per share, both basic and diluted, is normally provided as part of management commentary in the annual report, whereas under U.S. GAAP earnings per share is part of the financial statements.

Parent Company Financial Statements In Switzerland, in addition to preparing consolidated financial statements, Swiss banking organizations prepare and publish financial statements on an unconsolidated basis wherein subsidiaries (“permanent holdings”) are carried

50 on the basis of historical cost less provisions for impairment in value. Income from subsidiaries is recorded on the basis of dividends declared and paid. As economically unnecessary reserves (as described below) are permitted, these financial statements do not provide a true and fair view of the financial position or operations of the Bank. Under U.S. GAAP, unconsolidated financial statements are only prepared in limited situations and the equity method of accounting is used for unconsolidated subsidiaries.

Goodwill The difference between investor cost and underlying equity in investee net assets, based on fair values at the date of the change of interest, is designated as goodwill under Swiss and U.S. GAAP. Under Swiss GAAP (since January 1, l997), goodwill arising on acquisitions of subsidiaries and associated undertakings is amortized over its estimated useful life on a straight line basis. The amortization term may not be longer than five years, unless a longer period, which cannot exceed twenty years, is justified under special circumstances. Under U.S. GAAP, goodwill is amortized through income over the period of estimated benefit up to amaximum of 40 years (generally not greater than 20 years for a financial institution). Goodwill is subject to an impairment analysis. Under some circumstances, a new parent’s basis in assets and liabilities in the books of the purchased companies, including goodwill, is “pushed down” to the subsidiary.

Provisions and Reserves for Possible Loan Losses Swiss banking organizations determine the provision for risk of loss on loans based upon estimated amounts for risk attached to each individual exposure (made on a continuous basis) plus provisions for general risks attached to loans, receivables and contingent accounts, without allocation to specific borrowers. The resulting reserve for loan losses related to individual exposures is normally shown as a valuation allowance deducted from loans, although it can also be included as part of “writedowns and provisions, ” within liabilities. The notes to the financial statements provide a reconciliation of movements of provisions, as well as the portion of the writedown, directly deducted from assets. Under U.S. GAAP, for loans evaluated individually, the reserve for loan losses is based on the present value of expected future cash flows, discounted at the individual loans’ effective interest rate or, as a practical expedient, at the individual loans’ observable market value or fair value of the collateral if the loan is collateral-dependent. For groups of similar loans evaluated on an aggregate basis, the reserve is based on a review of loss trends and current conditions. The reserve is presented as a valuation allowance deducted from loans. Under Swiss GAAP, estimated future expenses relating to Year 2000 and EMU implementation issues are provided for at the balance sheet date. Under U.S. GAAP, such expenses are recognized as incurred.-

Wade Date and Settlement Date Accounting Under Swiss GAAP, transactions entered into but not settled on the balance sheet date are required to be recorded off-balance sheet up to the settlement date. During a transitional period until December 31, 2004, transactions may be entered into the balance sheet on a trade date basis; the business being accounted for on a trade date basis must be disclosed in the notes to the financial statements. Under U.S. GAAP, banking institutions prepare financial statements using trade date accounting. Net unsettled receivables and payables from transactions are therefore recorded in the balance sheet.

Securities, Precious Metals and Derivative Financial Instruments Swiss banks identify securities as either trading or held for investment on date of purchase, differentiated by initial intent and ability to hold acquired securities. Equity and debt securities which are quoted or traded on a representative market or for which the fair value may be reliably measured and which are identified as trading are valued at fair value with unrealized gains and losses included in earnings. Equity and debt securities which are not identified as trading securities and are not intended to be held until maturity are recorded at the lower of cost or fair value. Precious metal positions identified as trading positions are recorded at the fair value at the balance

51 sheet date. Derivative financial instruments are marked to market with the resulting positive and negative replacement value shown under “other assets” and “other liabilities.” Where management has the intent and ability to hold a debt security to maturity, such securities are designated as held to maturity. Held-to-maturity debt securities are reported at amortized cost less necessary provisions when management has serious doubts about the future repayment of the principal and future interest receivables. Swiss banks report holdings of own shares or debt securities as assets along with third party securities, with gains and losses reported through the income statement. In the United States, securities, including derivative financial instruments, are classified as held-to-maturity (“HTM”) (possible for debt securities only) or available for sale (“APS”) or trading, differentiated by the initial intent and ability to hold acquired securities to maturity or to hold for market opportunities. Designations must be made at the date a security is acquired and changes in designation are rare. HTM debt securities are carried at amortized cost with provision for diminution in value which is other than temporary. Securities which are classified as trading are reported at fair value with unrealized gains and losses included in earnings. Investments not classified as trading securities nor as HTM are classified as APS. These are reported at fair value, with unrealized gains and losses excluded from earnings and reported as a separate component of shareholders’ equity. Upon sale, realized gains and losses are reported in earnings. Holdings of own shares are reported as “treasury stock” under U.S. GAAP, and shown as a deduction from stockholders’ equity. Gains and losses from sales of own shares are not reported as income.

Loan Origination Fees Under Swiss GAAP, loan origination fees are deferred and amortized on a straight line basis over the life of the respective facility as an adjustment to the loan yield. The related costs are expensed as incurred and included in operating expenses. Under U.S. GAAP, the “net” of origination fees and direct origination costs are required to be amortized on a yield to maturity basis over the life of the respective facility. Origination costs represent the direct costs incurred to originate the new loan, including time spent on evaluating the prospective borrower’s financial condition, negotiating the loan terms and other various incremental costs. The amortization of the net fees and costs is included as an adjustment to the loan yield.

Applicable Income Taxes Under both Swiss and U.S. GAAP, a current tax liability or asset is recognized for the estimated tax payable or refundable on tax returns for the current year and a deferred tax liability or asset is recognized for the estimated future tax effectsattributable to temporary differences. Temporary differences result from differences in the timing of recognition of assets, liabilities, revenue and expenses for tax and accounting purposes. Deferred tax assetsarising from loss carryforwards are generally not recognized under Swiss GAAP Under U.S. GAAP, a valuation allowance is raised against a deferred tax asset where it is more likely than not that some portion of the deferred tax asset will not be realized.

Pension Accounting and Post-Retirement Benefits Other than Pensions Neither pension accounting nor accounting for post-retirement benefits other than pensions (“OPEBs”) are specifically dealt with under Swiss banking law or Swiss GAAl? Most Swiss banks operate defined contribution plans and do not offer OPEBs. Pension expenditure for defined contribution plans is recognized using the accrual method of accounting based upon the defined contributions. Under U.S. GAAP, pension funds are classified either as defined contribution or defined benefit plans. The accounting for defined contribution plans uses the accrual method. The accounting for a defined benefit plan requires the explicit use of actuarial assumptions. Periodic pension costs comprise the net of service cost, interest cost, return on plan assets, amortization of deferred gains and losses and amortization of transition amounts. The provision for periodic pension costs is recorded in the income statement regardless of current year funding status. An asset or liability should be recognized for the differences between the accrued pension cost and the amount actually contributed to the plan. The fundamental concepts for recognizing OPEB cost are consistent with those for pension accounting.

52 Legal and Other Reserves Under Swiss law, certain categories of reserves appear in the shareholders’ equity section of the consolidated balance sheet and arise from allocations of portions of annual net income under the headings “capital reserves” and “revenue reserves.” Allocations to the “capital reserve” are required by Swiss law, which stipulates that Swiss companies must allocate at least 5% of their annual net income to a non-distributable reserve designed to cover losses and to allow for write-offs. The allocations must continue until this reserve reaches 20% of the share capital. Even after the reserve reaches the legally prescribed level, the following allocations have to be made to it until the reserve equates to 50% of share capital: (1) any premium in excess of par value resulting from an offering of shares after deduction of issuing expenses; and (2) 10% of the amounts which are distributed as a share of profits after payment of a dividend of 5%. No similar requirements exist under U.S. GAAP.

Reserve Against General Banking Risks The creation of economically unnecessary reserves is a practice which was up until a few years ago part of Swiss GAAP. The practice was encouraged to promote overall sound financial business conditions. Allocations to reserves for general bank risks are recorded using the “losses depreciation and provisions account” and are included in the balance sheet as part of other liabilities. Economically unnecessary reserves can now only be recorded in the parent company financial statements. Consolidated financial statements of Swiss banks must separately include these reserves in the “reserves against general bankin,0 risks” in the balance sheet, with the related movements included in earnings. Such reserves are not permitted under U.S. GAAP.

Extraordinary Items Under Swiss GAAP, extraordinary items include prior period adjustments and transactions or events that are not related to recurring operations as well as movements in the “reserve for general banking risks.” Under U.S. GAAP, very few items qualify as extraordinary items. Events and transactions are presumed to be ordinary and usual activity, unless the evidence clearly supports their classification as extraordinary items.

Discontinued Operations Under Swiss GAAP, the results of discontinued operations are included on a line by line basis in the income statement until the date of sale. Under U.S. GAAP, the results of operations of a disposed segment are presented separately from the results of continuing operations.

Money Market Instruments In Switzerland, all money market instruments held are separately disclosed in the balance sheet with the related income included as part of interest income. Under U.S. GAAP, money market instruments which are considered as part of the trading portfolio are included as trading account assets.

nansfers of Financial Assets Under U.S. GAAP, de-recognition of financial assets, including assets transferred or sold to special purpose vehicles, is allowed only when the owner fulfils certain defined criteria demonstrating the surrender of control of such assets. Under Swiss GAAP, no similar restrictions apply to transfers of financial assets.

53 Business Combinations Under Swiss GAAP, contingent payments made in relation to acquisitions are included as part of the purchase price of the business acquired. Under U.S. GAAP, such payments must be examined to determine whether they must be included in operating expenses.

Stock-Based Compensation Under Swiss GAAP, all stock compensation awards are recorded as liabilities using variable plan accounting, whereby changes in the market value of stock compensation obligations are recorded as compensation expense until settlement. This differs from fixed plan accounting, whereby all compensation expense for stock compensation awards is fixed as of the award measurement date. Under U.S. GAAP, stock compensation awards may be recorded using fixed or variable plan accountin,,0 depending on the conditions of the award, and such awards are generally recorded directly as equity and not as liabilities.

Netting The netting of assets and liabilities as well as income and expenses is in principle prohibited under Swiss GAAP. The two main exemptions therefrom are as follows. Receivables and payables arising from transactions of the same type with the same counterparty, with the same or earlier maturity and in the same currency and which cannot lead, either on the balance sheet date or up to the maturity of the transactions, to a counterparty risk can be netted. Also, subject to the existence of enforceable netting agreements, positive and negative replacement values of derivative financial instruments can be offset. Under U.S. GAAP, netting of assets and liabilities is sometimes permitted when a right of set-off exists. Fair value amounts for forwards, interest rate swaps, currency swaps and options with the same counterparty under a global netting agreement may be offset with the net fair value reported as an asset or liability in the balance sheet. Under similar circumstances, repurchase and resale transactions and securities loaned and borrowed transactions may be netted when certain conditions with respect to the clearing facility and banking arrangements are met.

Hedging Under Swiss GAAP dynamic hedging (involving frequent purchasesand salesof derivatives to maintain specific hedge ratio or coverage)and macro hedging (hedging on a portfolio basis) is permitted, allowing hedge accounting treatment (i.e., deferral of the hedging gains and lossesto be recognized in the same periods as the income and expensefrom the hedged items). Under U.S. GAAP, macro and dynamic hedging strategiesdo not qualify for hedge accounting treatment.

Debt Issue Costs Under Swiss GAAP, debt issue costs are expensed /as incurred. Under U.S. GAAP, costs of raising debt are deferred and amortized by periodic charges to income.

Disclosure No disclosure is required for cumulative effect of an accounting change, non-performing loans, pensions or income taxes under Swiss GAAP. Repurchase transactions under Swiss GAAP are included in “due to banks” and “due from banks” whereas under U.S. GAAP, they are separately disclosed. The disclosure for financial instruments and derivative financial instruments under Swiss GAAP is not in accordance with SFAS 105 (“Disclosure of Information about Financial Instruments with Off-Balance-Sheet Risk and Financial Instruments with Concentrations of Credit Risk”), SFAS 107 (“Disclosures about Fair Values of Financial Instruments”) and SFAS 119 (“Disclosure about Derivative Financial Instruments and Fair Value of Financial Instruments”). Under U.S. GAAP, certain disclosures are required to describe stock-based compensation plans as well as related expenses for the reported periods. No such requirement exists under Swiss GAAP.

54 ANNEX I

CREDIT SUISSE FIRST BOSTON

ANNUAL REPORT 1998

55 CREDIT SUISSE FIRST BOSTON

ANNUAL REPORT 1998 This Annual Report presents information on Credit Suisse First Boston, a wholly owned subsidiary of Credit Suisse Group. For comparisons and commentary on results of business operations, reference should also be made to the Credit Suisse Group Annual Report and supplementary Annual Reviews of the relevant Business Units. CONTENTS

GENERAL CORPORATE INFORMATION 1 Financial highlights 2 Financial information on business units 5 Credit Suisse First Boston operations 7 Board of Directors and Auditors 8 Executive Boards

CREDIT SUISSE FIRST BOSTON CONSOLIDATED FINANCIAL STATEMENTS 9 Financial review

11 Consolidated income statement

12 Consolidated balance sheet

13 Consolidated off-balance-sheet business 14 Consolidated statement of cash flows

15 Notes to consolidated financial statements 15 Risk management 25 Accounting policies 30 Foreign currency translation rates 31 Subsidiaries and associated companies 33 Changes to the scope of consolidation 34 Additional information on the consolidated income statement 37 Additional information on the consolidated balance sheet 55 Additional information on the consolidated off-balance sheet business 57 Report of the Group Auditors

CREDIT SUISSE FIRST BOSTON PARENT COMPANY FINANCIAL STATEMENTS 59 Financial review 60 Income statement 61 Balance sheet

62 Off-balance sheet business

63 Proposed appropriation of retained earnings

64 Notes to financial statements 64 Accounting and valuation policies 65 Additional information on the income statement 66 Additional information on the balance sheet 70 Auditors’ report on capital increase 71 Additional information on the balance sheet and off-balance sheet business

72 Report of the Statutory Auditors FINANCIAL HIGHLIGHTS Financial Information Legal Entity Credit Suisse First Boston

For the year ended December 31 1998 1997 CONSOLIDATED INCOME STATEMENT CHFm CHF m Net operating income 9,2n 10,792 Personnel expenses -5,932 -5,402 Other operating expenses -2,079 -1,639 Gross operating profit 1,266 3,671 Depreciation and write-downs on non-current assets -352 -323 Valuation adjustments, provisions and losses -1,871 -610 Consolidated loss/profit before extraordinary items and taxes -957 2,738 Net extraordinary items, net of related taxes 41 -523 Taxes on profit before extraordinary items -80 -895 Consolidated net loss/profit -696 1,320 of which minor@ interests 24 106 Consolidated net loss/profit (after minority interests) -1,020 1,214

As of December 31 1998 1997 CONSOLIDATED BALANCE SHEET CHFm CHF m Total assets 403,702 452,894 Due from banks’ 61,663 40,704 Due from customers’ 34,302 44,787 Due to banks’ 111,864 121,747 Due to customers’ 67,606 53,045 Shareholder’s equity 10,348 11,297 of which minorily interests3 7,n7 1, le.5

1966 1997 KEY NATIOS % % Cost/income’ 86.35 65.98 Tax rate on profit before extraordinary items 32.69 Return on equity’ -9.25 17.05 BIS tier 1 ratio 8.4 a.5 BIS total capital ratio 15.4 14.9 Equity/assets 2.66 2.49 Equity/assets net of securities lending and reverse repurchase agreements 3.49 3.92

As of December 31 STAFF NUMBERS 1668 1997 America 5,816 4,932 Europe 7,493 W39 of which Switzerland W= 1,574 Asia/Pacific 2,362 1,730 Total 15.671 13.201

Short-term debt Long-term debt

As of December 31, 1998 Senior Senior Junior CREDIT SUISSE FIRST BOSTON RATINGS Subordinated Subordinated Moody’s, New York P-l Al A2 A3 Standard & Poor’s, New York A-l+ AA AA- A+ Fitch IBCA Ltd., New York F-l+ AA AA- A+ BankWatch, New York TBW-1 AA AA- A+

1 Net of securities lending and reverse repurchase agreements. 2 Net of securities bcrrowing and repurchase agreements. 3 CHF 1,409 million represents perperual norrcumuhtive IKX)voting pefered shams held by 0edii Suisse Group as direct investments in subsidiaries of Credit Suiess First Boston.

l Operating expenses as a percentage of net operating income. ‘ Read after OrdiMly taxes arid before extramdimry items compared 10 average equity. FINANCIAL INFORMATION ON BUSINESS UNITS (BU)

BU BU BU REAL Total As of December 31, 1998 CSFB CSAM ESTATE Adjustments’ LE CSFB’ ASSEEi CHF m CHF m CHF m CHF m CHF m Cash 1,175 5 0 -1 1,179 Money market papers 18,860 0 0 4 18,864 Due from banks 138,726 871 58 341 139,996 of which securities lending and reverse repurchase agreements 78,303 0 0 0 18,303 Due from other business units 1,894 16,345 0 -18,239 0 of which secumes lending and reverse repurchase agreements 0 7,133 0 -7,133 0 Due from customers 61,522 244 14 1,156 62,936 of which securities fending and reverse repurchase agreements 28,634 0 0 0 28,634 Mortgages 7,178 0 0 68 7,246 Securities and precious metals trading portfolio 160,963 0 0 1 100,964 Financial investments 10,072 475 67 -420 10,194 Non-consolidated participations 436 11 0 -2 445 Fixed assets, including goodwill 2,328 80 2,711 1 5,120 Accrued income and prepaid expenses 6,845 113 2 -78 6,882 Other assets 49,555 271 1 49 49,876 of which replacement value of derivatives 46,347 51 0 -13 46,385 TOTAL ASSETS 399,554 18,415 2,853 -17,120 403,702

BU BU BU REAL Total As of December 31, 1998 CSFB CSAM ESTATE Adjustments’ LE CSFB’ LIABILITIES AND SHAREHOLDER’S EQUITY CHF m CHF m CHF m CHF m CHF m Liabilities in respect of money market paper 19,923 143 0 -131 19,935 Due to banks 185,335 23 21 1,343 186,722 of which secunVes borrowing and repurchase agreements 74,915 3 0 0 74,918 Due to other business units 16,313 1,854 511 -18,678 0 of which securiks bono wing and repurchase agreements 7, 133 0 0 -7,133 0 Due to customers, savings and investment deposits 180 1,854 0 0 2,034 Due to customers, other deposits 71,157 13,088 200 871 85,316 of which secun?ies borrowing and repurchase agreements 22,714 7, 130 0 0 29,844 Bonds and mortgage-backed bonds 33,374 150 1,280 73 34,877 Accrued expenses and deferred income 8,044 429 27 -83 9,237 Other liabilities 53,007 250 8 188 53,453 of which reptacement value of derivatives 49,431 41 0 -20 49,502 Valuation adjustments and provisions 1,638 115 94 -67 1,780 Total frabilities 389,771 17,996 2,141 - 16,464 3%= Reserve against general banking risks 0 0 0 0 0 Share capital 3,260 270 400 -670 3,280 Capital reserves 5,065 0 0 183 6,268 Retained earnings -84 15 309 883 1,123 Minority interests in shareholder’s equity 1,693 1 0 -1 1,693 Consolidated net loss/profit -171 223 3 -1,051 -996 of which minority interests 50 0 0 -26 24 Total shareholder’s equity 9,783 509 712 -656 10,348 TOTAL LIABILITIES AND SHAREHOLDER’S EQUlTY 399,554 18,415 2,853 -17,120 403,702

1 Adjustments represent consotiiting entries and balances relating to operations which are managed by CSFB BUS but are not legally owned by the Bank. and vice versa: _ approx. CHF -18 bn relate to the elimination of legal entity internal placements/fundings due from and to other BUS. - approx. CHF +l bn relate tc balances which are legally owned by CS/CSPB or C3G but managed by CSFB or CSAM and vice versa. 2 Ths total column has been extracted from the attached audited financial statements. The BU information and adjustments presented above are unaudited.

2 FINANCIAL INFORMATION ON BUSINESS UNITS (BU)

BU BU BU REAL Total For the year ended December 31.1998 CSFB CSAM ESTATE Adjustments’ LE CSFB’ CONSOLIDATED INCOME STATEMENT CHF m CHF m CHF m CHF m CHF m Results from Interest business Interest and discount income 14,490 205 0 -153 14,542 Interest and dividend income from trading portfolio 5,529 0 0 1 5,530 interest and dividend income from financial investments 231 2 0 -5 228 Interest expense -17,858 -166 -97 224 -17,897 Net interest income 2,382 41 -97 67 2,403 --- Results from commission and service fee activities Commission income from lending activities 271 0 0 -36 235 Commission from securities and investment transactions 3,947 873 0 108 4,928 Commission from other sewices -10 1 0 22 13 Commission expense -140 -73 0 9 -204 Net commission and service fee income 4,068 801 0 103 4,972 Net trading income 2,099--- 0 0 496 1,603 --- Other ordinary income Income from the sale of finawial investments 1,070 25 1 -848 248 income/losses from participations 30 -1 0 0 29 of which from patbpatons accounted for uwkrg the equ@ method 24 -2 0 0 22 of which from othernon~~i&at~~;~~tions 6 1 0 0 7 Real estate income/losses 3 -3 217 -188 29 Sundry ordinary income 104 39 11 1 155 Sundry ordimry expenses -166 -50 0 54 -162 Net other ordinary income 1,041 10 229 -981 299 Net operating income -852g,- 132 -1,307 9,277 ---

Operating expenses Personnel expenses -5,332 -329 0 -271 -5,932 Other operating expenses -2,307 -257 -72 557 -5079 Total operating expenses -7,838 586 -72 286 -8,011 Gross operating prtit -266 1,961 60 -1,021 1,266

CONSOLIDATED LOSS/PROFIT Gross operating profit -266 1,961 60 -1,021 1,266 Depreciation and write-dawns on noncurrent assets -279 -12 -57 4 -352 Valuation adjustments, povisions and lasses -1,566 0 0 -305 -1,871 Consolidated loss/profit before extraordinary items and taxes 116254 3 -1,330 -957 Taxes on loss/profit before extraordinary items -YET- -30 -2 178 -60 Consolidated net loss/profit before extraordinary items and related taxes -110- 224 1 -1 ,152 -1,037 Extraordinary items, net of related taxes -61- -1 2 101 41 Consolidated net loss/protit (before minority Interests) -171223 3 -1,651 -998 --- of wbkh mibon&vinterests 50 0 0 -26 24 Consolidated net loss/profit (after minority Interesk) -221- 223 3 -1,025 -1,026 ---

1 Adjustments represent consolidating entries and balawes relating to operatiins which are managed by CSFB BUS but are not legally owned by the Bank, and vice versa (e.g. other ordinary income relates primarily to pivate equity income). Additionally some revenues and expenses show in ‘BU’ results have been reclassified to allow a more accurate comparison with competitors (e.g. execution, clearing and brokerage costs are treated as an expense rather than as contra-revenue). 2 The total column has been exit-acted from the attached audited fmancal statements. The BU information and adjustments presented above are unaudiied.

3 4 CREDIT SUISSE FIRST BOSTON OPERATIONS

Introduction Credit Suisse Group is a global financial services company, providing a comprehensive range of banking and insurance products. Active on every continent and in all major financial centers, Credit Suisse Group comprises five Business Units (‘BU’), 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: global investment banking - Credit Suisse Asset Management: services for institutional and mutual fund investors worldwide - Winterthur: insurance for private and corporate customers worldwide

Credit Suisse First Boston (‘the Bank’) regulated by the Swiss Federal Banking Commission is a wholly owned subsidiary of Credit Suisse Group. The Bank is registered as a Swiss bank and, in its own right, is one of the world’s foremost banking institutions, with total consolidated assets of approximately CHF 403.7 billion and consolidated shareholder’s equity of approximately CHF 10.3 billion, in each case as of December 31, 1998.

The operations of two BU, Credit Suisse First Boston (‘CSFB’) and Credit Suisse Asset Management (‘CSAM’), comprise substantially all of the activities of the Bank. Additionally, the Bank maintains a Real Estate BU on behalf of Credit Suisse Group.

The Bank provides a wide range of financial services from locations around the globe to corporate, institutional and public sector clients worldwide. The Bank’s registered head office is in Zurich and its principal operating locations are in Hong Kong, London, New York, Singapore, Tokyo and Zurich. The Bank and its consolidated subsidiaries employ a total of approximately 15,700 people.

This Annual Report provides only limited commentary relating to the business activities of the Bank. More detailed commentary is provided, in alignment with the BU management structure of Credit Suisse Group, in the Annual Report of Credit Suisse Group and the Annual Reviews of the BU. For analytical convenience, two unaudited consolidating schedules are presented on pages 2 to 3 reconciling the 1998 results and financial position of the BUS to those of the Bank.

Businesses of the Bank CSFB is engaged, directly and through affiliates, in corporate and investment banking, trading (fixed income, equity, foreign exchange), private equity investment and derivatives business on a worldwide basis. CSAM, directly and through subsidiaries, offers asset management, mutual fund and investment advisory services to institutional investors worldwide.

CSFB’s operations are conducted through the Bank and its subsidiaries, including Credii Suisse Financial Products regulated by the UK-Financial Services Authority, Credit Suisse First Boston Corporation, a US broker-dealer regulated by the US Securities Exchange Commission, Credit Suisse First Boston (International) AG and its European and Pacific subsidiaries including Credit Suisse First Boston (Europe) Ltd.,‘regulated by the UK Securities and Futures Authority, Credit Suisse First Boston Securiiies (Japan) Ltd., regulated by the Financial Supervisory Agency in Japan, Banco de lnvestimentos Credit Suisse First Boston Garantia S.A., a leading investment bank in Brazil, regulated by the Central Bank of Brazil and the Securiiies Exchange Commission (Comissao de Valores Imobiliirios), Credit Suisse First

5 CREDIT SUISSE FIRST BOSTON OPERATIONS

Boston Australia Equities Group Ltd., regulated by the Australian Securities Commission and the Australian Stock Exchange, and other entities around the world.

During 1998 CSFB had five core businesses: (i) Corporate and Investment Banking (‘CIBD’); (ii) Fixed Income; (iii) Equities; (iv) Derivatives (through Credit Suisse Financial Products (‘CSFP’)); and (v) Private Equity (‘PED’). Since January 1, 1999 CSFB’s Fixed Income Division and CSFP have been combined into a new Division, Fixed Income and Derivatives (‘FID’). The establishment of FID is expected to produce synergies in risk management, product management, distribution, Finance, Administration & Operations and capital optimization.

CIBD provides comprehensive financial advisory and capital-raising services and develops and offers innovative financings for a broad range of clients around the world. The FID business incorporates underwriting, research, sales and trading of a whole range of instruments. These include government and corporate bonds, foreign exchange, precious metals, money markets and some less liquid assets such as loans and real estate held for trading purposes. In addition, the business provides a full range of derivative products that address the broad financing, risk management and investment needs of major companies, banks, insurers, governments and institutional investors around the world. The Equities business incorporates underwriting, research, sales and trading of equity and equity related securiiies globally as well as certain ancillary activities. PED invests primarily in unlisted or illiquid equity or equity-linked securities through which it seeks capital appreciation rather than current income. Most of the investments are held by subsidiaries of Credit Suisse Group rather than the Bank, either directly or through a fund. PED generally acquires its investments with a three-to seven-year investment horizon.

CSAM, the Bank’s asset management business unit, focuses on serving institutional and mutual fund clients worldwide. CSAM provides its institutional clients with discretionary asset management services through segregated or pooled accounts and advisory services. CSAM offers these clients a wide array of products. In addition, CSAM offers open-ended mutual funds covering a wide variety of markets and products. Its operations are conducted through the Bank and its dedicated asset management and mutual fund subsidiaries worldwide.

Additionally, the Bank owns real estate directly or indirectly. Credit Suisse or other entities within Credit Suisse Group use the bulk of these.

6 BOARD OF DIRECTORS AND AUDITORS

Board of Directors

Rainer E. Gut, Chairman ” Robert L. Genillard, Vice-Chairman lz3 Franz Albers Thomas W. Bechtler ’ Ulrich Bremi ‘23 Marc-Henri Chaudet ’ Mario A. Corti Michael Hilti ’ Klaus Jacobi a Andreas W. Keller Andreas N. Koopmann a Heini Lippuner ’ Lukas Miihlemann l2 Peter Spalti ’ Aziz D. Syriani’ Ernst Tanner

Independent Group and Statutory Auditors

KPMG Klynveld Peat Marwick Goerdeler SA, Zurich

Corporate Audit

Urs P. Hanni

’ Member of the Chairman’s Committee. ‘Member of lhe Conpensa&m Committee. ‘Member of the Audit Committee. ‘Until May !29,1998. EXECUTIVE BOARDS

Business Unit Credit Suisse First Boston

Allen D. Wheat Chairman of the Executive Board, President and Chief Executive Officer Brady W. Dougan Head of Equities Christopher A. Goekjian President and Chief Executive Officer of Credit Suisse Financial Products (since January 1, 1999 co-head of Fixed Income and Derivatives) Oswald J. Grijbel Head of Trading (until March 31, 1998; thereafter Chief Executive Officer of Credit Suisse Private Banking) Stephen A.M. Hester Chief Financial Officer of the Business Unit CSFB and the Bank Marc Hotimsky Head of Fixed Income (since January 1, 1999 co-head of Fixed Income and Derivatives) Franz von Meyenburg Deputy Chairman of Credit Suisse First Boston (Europe) Ltd. (until December 11,1998) David C. Mulford Chairman International John Nelson Chairman Europe (since January 18, 1999) Stephen E. Stonefield Chairman Asia Pacific Charles G. Ward Ill Head of Corporate and Investment Banking

Business Unit Credit Suisse Asset Management

Phillip M. Colebatch Chief Executive Officer Heinz Hofmann Functional Head of Fund Administration and Processing (until November 30, 1998) Philip K. Ryan Chief Financial Officer of the Business Unit CSAM Heinrich Wegmann Head of Switzerland

Steen Steincke Head of Europe exSwitzerland Toshio Fukuda Head of Japan (since December 31, 1998), previously Co-head of Japan Andrew McKinnon Head of Australia Robert J. Moore Co-functional Head of Fixed Income Robert Parker Co-functional Head of Institutional Distribution William W. Priest Head of United States (formerly BEA Associates, now CSAM) Dilip Rasgotra Co-functional Head of Fixed Income William P. Sterling Functional Head of Equity Timothy T. Taussig Co-functional Head of Institutional Distribution Robert Kosrovani Functional Head of Retail Distribution Edgar Weissenberger Head of Germany (since December 31, 1998), previously Co-head of Japan

8 FINANCIAL REVIEW

Results of the Credii Suisse Group BUS are more meaningful at the Credit Suisse Group level rather than in the individual legal entities. The Credit Suisse Group Annual Report presents these results. In addition, CSFB BU Management Discussion and Analysis is presented in its Annual Review.

The Bank’s 1998 results for the year reflect the impact of global market disturbances during the second half of the year. Markets were volatile with credit spreads widening and investors withdrawing from markets. Gross operating profit was CHF 1,266 million (CHF 2,405 million less than in 1997) and the Bank posted a net loss of CHF 1,020 million compared to a net profit of CHF 1,214 million in 1997 following the recording of material valuation adjustments and provisions in the second half of 1998 primarily relating to Russia.

Net operating income was down 14.0%. While net interest income and net commission and service fee income both increased by CHF 358 million (17.5%) and CHF 1,214 million (32.3%) respectively, this was more than offset by the decrease in net trading income of CHF 3,158 million (66.3%). The positive commission income was driven by CSFB BUS record year in investment banking, underwriting and broking businesses as well as by record income from the CSAM BU. The trading results were lower than last year’s primarily in securities trading and foreign exchange trading, the latter due to losses on various emerging market foreign currency denominated securities (primarily Russia).

Total operating expenses increased by CHF 890 million (12.5%) mainly due to the BZW, Garantia and First Pacific and First New Zealand acquisitions as well as the hiring of some 1,200 people organically in 1998. Costs in respect of the EURO and the Year 2000 projects also increased expenses during the year. Of the increase in total operating expenses, CHF 450 million related to personnel expenses, which increased by 8.2% from 1997 and CHF 440 million was due to other operating expenses, which increased by 26.8% from 1997.

Valuation adjustments, provisions and losses were CHF 1,871 million (206.7% higher than in 1997) due to provisioning requirements relating primarily to lending to emerging market sovereigns, banks and corporates as well as provisioning on the positive replacement value of various over the counter derivative instruments with those institutions.

Extraordinary expenses resulting from the World War II settlement of approximately CHF 365 million were offset by extraordinary income from a release of the reserve against general banking risks.

The Bank’s return on equity was - 9.2% based on result after ordinary taxes and before extraordinary items compared to 17.1% in 1997 and -9.1% based on net result after extraordinary items and minorities compared to 11.2% in 1997.

Total assets decreased by CHF 49.2 billion compared to year end 1997 due to management’s desire to reduce leverage.

Despite the loss incurred in 1998, the Bank maintained its very strong capital ratios, its capital ratios increasing from 14.9% to 15.4% and its core capital ratio (BIS Tier 1) virtually unchanged at 8.4% from 8.5%.

CSFB’s strategy is to continue to strengthen its position as one of the world’s global special bracket investment banks in all its major business lines. Strengthening market share especially in investment banking and equities, investment in better infrastructure and the continued building of a stable successful culture and workforce will be its challenges. At CSAM,

9 FINANCIAL REVIEW

continued expansion through investments in people and acquisitions remains the strategic priority.

While the Bank approaches the market environment in 1999 cautiously, the Bank aims to achieve good results while maintaining its strong capital ratios. Cost control, risk management and dealing with Year 2000 will continue to have a high priori.

10 CONSOLIDATED INCOME STATEMENT

INCOME AND EXPENSES Notes 1998 1997 Change Change FROM ORDINARY BANKING BUSINESS page CHF m CHF m CHF m % Results from interest business Interest and discount income 34 14,542 13,520 1,022 7.6 Interest and dividend income from trading portfolio 34 5,530 5,679 -149 - 2.6 Interest and dividend income from financial investments 34 228 257 -29 - 11.3 Interest expense 34 -17,897 -17,411 -486 2.8 Net interest income 34 2,403 w45 358 17.5 Results from commission and service fee activities Commission income from lending activities 34 235 253 -18 - 7.1 Commission from securities and investment transactions 34 4,928 3,729 1,199 32.2 Commission from other services 34 13 44 -31 - 70.5 Commission expense 34 -204 -268 64 - 23.9 Net commission and service fee income 34 4,972 3,758 1,214 32.3 Net trading income 34 1,603 4,761 ’ -3,158 - 66.3 Other ordinary income Income from the sale of financial investments 248 60’ 198 396.0 Income from participations 29 55 -26 - 47.3 of which from psrtic@stions accounted for using the equ$v method 22 31 -9 - 29.0 of which from other non~n~lj~tw’parficipations 7 24 -17 - 70.8 Real estate income 29 73 -44 - 60.3 Sundry ordinary income 155 121 34 28.1 Sundry ordinary expenses -162 -71 -91 128.2 Net other ordinary income 299 228 71 31.1 Net operating income 9,277 10,792 -1,515 - 14.0

Operating expenses Personnel expenses 35 -5,932 -5,482 -450 8.2 Other operating expenses 35 -2,079 -1,639 -440 26.8 Total operating expenses -8,011 -7,121 -890 12.5 Gross operating profit 1,266 3,671 -2- - 65.5

CONSOLIDATED LOSS/PROFIT Gross operating profit 1,266 3,671 -2,405 - 65.5 Depreciation and write-downs on non-current assets 35,41 -352 -323 -29 9.0 Valuation adjustments, provisions and losses 35,47 -I ,871 -610 -1.261 206.7 Consolidated loss/profit before extraordinary items and taxes -957 2,738 -3,695 - 135.0 Extraordinary income 36 461 78 383 491.0 Extraordinary expenses 36 -509 -801 292 - 36.5 Taxes on net extraordiww items 47 89 200 -111 - 55.5 Taxes on loss/profit before extraordinary items 47 -80 -895 815 - 91.1 Consolidated net loss/profit (including minority interests) -996 1,320 -2,316 - 175.5 of which mkvity interests 24 108 -82 - 77.4 Consolidated net loss/profit (excluding minority interests) -1,020 1,214 -2,234 - 184.0

’ CHF 30 million were reclassified to be consistent with the current year.

11 CONSOLIDATED BALANCE SHEET

Notes 31.12.96 31.12.97 Change Change ASSETS page CHFm CHF m CHF m % Cash 14,48 1,179 2,049 -870 - 42.5 Money market papers 37, 48 18,664 16,135 2,729 16.9 Due from banks 37, 48, 53 139,996 143,992 -3,996 - 2.8 of which securities lending and reverse repurchase agreements -303 103,288 -24,965 - 24.2 Due from customers 37,38, 48, 53 62,936 106,817 -43,881 -41.1 of which securities lending and reverse repurchase agreements 28,634 62,030 -3,396 - 53.8 Mortgages 37, 30, 48 7,246 7,164 82 1.1 Securities and precious metals trading portfolio 39. 48 169,964 102,385 -1,421 - 1.4 Financial investments 40,48 10,194 10,004 2 190 1.9 Non-consolidated participations 32, 40, 41 445 272 173 63.6 Tangible fixed assets 41 4,541 4,569 -28 - 0.6 Intangible assets 41 578 579 100.0 Accrued income and prepaid expenses 6,882 5,889 993 16.9 Other assets 53 49,876 53,618 2 -3,742 - 7.0 of which replacement value of derivatives 56 6385 50,946 -4,561 - 9.0 TOTAL ASSETS 50, 51,52 403,702 452,894 -49,192 - 10.9 Total subordinated claims 54 2957 2,398 559 233 Total due from non-consolidated panic@tions and qualified shareholders 243 693 -450 - 64.9

Notes 31.12.98 31.12.97 Change Change LlABlLlTlES AND SHAREHOLDER’S EQUITY page CHF m CHF m CHF m in % Liabilities in respect of money market paper 48 19,936 17,751 2,184 12.3 Due to banks 48 186,722 206,600 -19,878 - 9.6 of which securities borrowing and repurchase agreements 74,918 84,853 -9,935 . 11.7 Due to customers, savings and investment deposits 48 2,034 2,295 -261 - 11.4 Due to customers, other deposits 48,53 85,316 114,536 -29,220 - 25.5 of which securities borrowing and repurchase agreements 29,844 63,786 -33,942 - 532 Bonds and mortgage-backed bonds 42-46, 48, 53 34,877 34,997 -120 - 0.3 Accrued and deferred income expenses 9,237 8,231 1,006 12.2 Other liabilities 53 =A= 54,188 -735 - 1.4 of which replacement value of derivatives 56 49,502 50,650 -1,148 - 23 Valuation adjustments and provisions 47 l,f80 2,999 -1,219 - 40.6 Total liabilities 393,354 441,597 -43,243 - 10.9 Reserve against general banking risks 0 412 -412 - 100.0 Share capital 3,260 3,149 111 3.5 Capital reserves 5,268 4,307 961 22.3 Retained earnings 1,123 1,030 93 9.0 Minority interests in shareholder’s equity’ 1,693 1,079 614 56.9 Consolidated net loss/profit -996 1,320 -2,316 - 175.5 of which minority interests 24 106 -82 - 77.4 Total shareholder’s equity 49 10,346 11,297 -949 - 8.4 TOTAL UABILtTiES AND SHAREHOLDER’S EQUITY 50.52 403n2 452,894 49,192 - 10.9 Total suboroinated IiabIities 54 14263 13,265 -2 0.0 Total liabilities due to non-wnsolidatedpartmr~tions and quahfiedshareholders 1,159 1,263 -104 - 8.2

1 CHF 1,409 million repreee* perpetual non.cumulative non voting preferred shares held by Credit S&se Group a~ direct invesbnents in subsidiaries 0f Credit S&se First Boston. I Re&ssif~&on of certain -ts from other assets to financial investments amounting to CHF 247 million to be consistent with the current year.

12 CONSOLIDATED OFF-BALANCE SHEET BUSINESS

Notes 31.1298 31.12.97 Change Change CONSOLIDATED OFF-BALANCE SHEET BUSINESS page CHF m CHF m CHF m % Contingent liabiliiies 37,55 14,398 19,885 -5,487 - 27.6 Irrevocable commitments 37,55 83,252 62,786 20,466 32.6 Liabilities for calls on shares and other equity 37,55 1 4 -3 - 75.0 Confirmed credits 37,55 262 473 -211 - 44.6 Derivative financial instruments 55,56 - gross positive replacement value 118,276 90,336 27,940 30.9 - gross negative replacement value 121,209 89,059 32,150 36.1 - contract volume 6,3x&754 4,666.289 1,706,465 36.6 Fiduciary transactions 55 8,520 5,856 2,664 45.5 ‘CONSOLIDATED STATEMENT OF CASH FLOWS

1998 1997 Net Net Source Use in/outflow Source Use in/outflow CHF m CHF m CHF m CHF m CHF m CHF m Cash flows from operations 667 3,661 Consolidated net loss/profit (incl. minority interest) 996 1,320 Valuations adjustments, provisions and losses 1,87l 610 Depreciation and write-downs on non-current assets 371 323 Extraordinary expenses 95 741 Provisions for taxes 668 780 Accrued income and prepaid expenses 993 1,500 Accrued expenses and deferred income 1,096 1.507 Income from and investments in participations accounted for using the equity method of consolidation 191 31 Currency difference 182 25 Dividend payments 923 114 Cash flows from capital transactions 1,247 311 Minority interests 666 290 Share premium 892 Capital increase by Credit S&se Group 111 Release of Reserves against general banking risks 412 Transfer of subsidiary to Credit Suisse 21 Cash flows from fixed assets transactions -633 -844 Non-consolidated participations 41 46 63 Goodwill 1 597 Real estate 244 162 196 155 Other fixed assets 28 532 43 577 Mortgages on own real estate 190 274 Total cash flows from operations, capital transactions and fixed assets 1,081 3,328 Interbank business -16,806 -23,528 Due to banks 19,878 13,240 Due from benks 3,617 15,425 Money market papers 2,729 1.445 Liabilities in respect of money market paper 2,184 6,582 Customer business 13,324 27,537 Due to customers, savings and investment deposits 261 76 Due to customers, other deposits 29,410 10,150 Mortgages 82 1,523 Due from customers 43,077 18,834 Capital market business -120 16,296 Own bonds and mortgage bonds issued by the central mortgage bond institutions and the central issuing offices 3,960 4,100 19,329 3,039 Other balance sheet items 1,661 -23,113 Financial investments 215 2.694 Other assets 3,742 15,542 Other liabilities 619 17,185 Valuation adjustments and provisions 2,644 1,224 Securities and precious metal trading portfolio 1,387 mm Total cash flows from banking business -1,951 -2,814 Liquidity -670 514 Cash 870 514

14 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Risk management

1. GOAL AND DEFINITION OF RISK MANAGEMENT The majority of market and credit risk exposures of Credit Suisse First Boston (‘the Bank’) arises from activities of the Credit Suisse First Boston business unit (‘CSFB’). The other business units within the Bank do not have market and credit risk exposures material to the Bank as a whole. Therefore, the following overview of risk management describes the procedures and processes undertaken in CSFB.

Risk management is an ongoing process, which starts with the definition of CSFB’s business objectives and strategies and proceeds with the identification, assessment, management and control of all risks associated with its activities and closes the cycle with the reaffirmation or validation of objectives and strategies. To that end, the market turmoil of 1998, which adversely affected CSFB, has prompted important changes in the organ&ion of CSFB’s risk management effective January 1, 1999.

Risk Management Reorganization: Firstly, a new group, Strategic Risk Management (‘SRM’) has been formed reporting to the CEO of CSFB. SRM is responsible for assessing the overall risk profile of the Firm on a global basis and for recommending corrective action where appropriate. SRM will act as the independent “risk conscience” of the Firm in respect of all risks, which could have material economic impact on CSFB. Second, within SRM, a new department, Risk Measurement and Management (‘RMM’) has been established; it is responsible for the measurement and reporting of all credit risk and market risk data for CSFB. RMM has been formed by integrating the existing credit risk reporting and systems functions of Credit Risk Management with the market risk functions in Market Risk Management. Third, this realignment of the credit and market risk management functions has allowed the Credit Risk Management department, headed by the Firm’s Chief Credit Officer (‘CCO’) to focus more comprehensively on the credit analysis of counterparties and issuers, the setting and approval of credit limits, the approval of transactions, the assessment and management of impaired assets, and the establishment of the Firm’s policies and strategy on counterparty and country credit risk.

2. MARKET RISK Market risk may be described as the potential change in the value of a portfolio of financial instruments resulting from the movement of market rates, prices and volatiliiies. A typical transaction or position may be exposed to a number of different market risks.

CSFB devotes considerable resources to ensure that market risk is comprehensively captured and understood, accurately modeled and effectively managed. The RMM department, being independent from Trading, consolidates exposures arising from all trading portfolios and geographical centers, and calculates and reports CSFB’s global aggregate Value at Risk (‘VAR’) on a daily basis. In addition, RMM undertakes regular scenario analysis for all major portfolios.

These measurement techniques can be summa&d as follows:

- VAR is a statistical estimate of the potential loss arising from a portfolio to a predetermined level of confidence and holding period, using market movements determined from historical data.

- Scenario analysis estimates the potential loss from significant changes in market parameters. These changes are modeled on past extreme events and hypothetical scenarios.

The VAR methodology is used for day to day risk monitoring where market movements are within the 99” percentile. During periods of pronunce market disruption outside the 99* 15 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Risk management

percentile other techniques such as scenario analysis become a more useful technique in monitoring risk exposures.

Value At Risk CSFB has used a VAR methodology to model market risk since 1995. The methodology is subject to continuous review to ensure that it remains relevant to the business being conducted, captures all significant risks, is consistent across risk types and meets or exceeds regulatory and industry standards.

CSFB’s positions are consolidated giobally and the VAR is reported daily in the market risk report.

Risk Methodology CSFB’s VAR is defined as the 99th percentile greatest loss that may be expected on a portfolio over a lo-day holding period. In general, two years of underlying data are used to derive the market movements used for this calculation. These movements are recalculated on a quarterly basis and after periods of significant market turbulence. These parameters and procedures meet the quantitative and qualitative requirements prescribed by the Basle Committee on Banking Supervision and the Swiss Federal Banking Commission.

Positions are aggregated by type of risk rather than by product. For example, interest rate risk includes risk arising from money market and swap transactions, bonds, interest rate options, foreign exchange, equity and commodity options.

The VAR risk measurement methodology used by CSFB is a combination of historical simulation and variance-covariance. Under historical simulation exposures are determined by taking current positions and calculating a series of 1 O-day profit and loss movements using two years of historical data. Risk is calculated as the 99” percentile of observed losses over the period.

Where historical simulation is not used, the VAR is calculated by multiplying the risk sensitivity by a market shock (‘extreme move’) based on a 99” percentile confidence interval over a 1O- day period. It is planned to migrate completely to the historical simulation method for all divisions within CSFB.

Risk Offset In arriving at aggregate VAR it is necessary to allow offsets between different markets, currencies and risks to reflect the historical relationship between these markets and the impact of diversification.

In the historical simulation method the offset between different currencies or risk types can be taken into account by summing the 1O-day profits and losses for each of the underlyings and calculating the 99”’ percentile worst case loss over the historical period. This is a more robust approach because offset beneftis are based on actual relationships between underlyings.

Where historical simulation is not used, aggregation may be calculated using the variance- covariance method to offset risk.

Authorities and Market Risk Limits There are three main levels of risk management: - Board of Directors: Ultimately responsible for the determination of general risk policy and risk management organization and for approving the overall market risk limit as recommended to them by the Chairman’s Committee and the Credit Policy and Capital Allocation and Risk Management Committee (‘CPCXARMC’; see below). The Board of Directors meets at least 5 times a year. - Chairman’s Committee (ChC) of the Board of Directors: Responsible for reviewing the Bank’s risk exposure on a quarterly basis and establishing a CPCKARMC for CSFB, including at least five members of the Executive Board and Senior Management. The ChC meets at least 5 times a year:

16 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Risk management

- CPCKARMC: The Board of Directors and ChC have delegated certain risk management and control responsibilities to CPWCARMC. CPWCARMC is responsible for approving market risk management policies and procedures (documented in the Market Risk Manual), recommending overall market risk limits and market risk limit changes (total risk limit) to the ChC and the Board of Directors for review and approval, approving concentration limits (market value limits and sublimits, name and country limits), approving excesses within its own authority, and approving stress test and scenario analysis definitions. CPWCARMC meets on a monthly basis.

Market risk limits are structured at three levels: - an overall market risk VAR limit for CSFB as a whole, - market risk limits by divisions (e.g. Fixed Income Division, Equity Division); and - market risk limits by business cluster (e.g. Foreign Exchange). In addition, there are asset class VAR limits which are used to control exposure within a particular risk class (e.g. interest rate risk, equity risk, FX risk).

The three-level VAR limit structure described above represents the CSFB’s official limit framework. Limits at lower levels (e.g. limits by region, risk factor limits at the cluster level, trading desk, trader, loss flags, greek limits, etc.) are imposed by trading management in consultation with RMM. These limits are essentially internal risk flags, which are used to assist trading management to identify potential risk concentrations and to allocate the cluster market risk limits to individual regions and desks. RMM also provides assistance in monitoring compliance at these levels, as required.

CSFB uses various other types of limits to highlight potential risk concentrations. These include, among others: - country exposure limits; - issuer limits; and - market value limits.

Market Risk Capital Based on VAR Following a detailed review of the VAR model and the related processes and controls the Swiss Federal Banking Commission approved CSFB’s internal VAR models for use in the calculation of market risk capital requirement effective June 30, 1998.

Relationship between Daily Revenue and VAR Estimate The chart below illustrates the relationship between daily trading profti and loss and daily VAR over the course of 1998. The average daily trading revenue was CHF 14.3 million (1997: CHF 25.1 million) and the largest loss was CHF 173.6 million (1997: CHF -102.6 million) and the largest profit was CHF 137.4 million (1997: CHF 120.0 million).

17 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Risk management

The average daily VAR estimate was CHF 307.6 million (1997: CHF 201.9 million), the lowest and highest levels were CHF 206.3 million (1997: CHF 139.2 million) and CHF 382.2 million (1997: CHF 257.7 million) respectively. The frequency distribution of daily trading revenue for 1998 is illustrated below.

M Distribution of Daily Trading Revenue I

Backtesting is performed at two levels: the overall bank level and the trading book level. Results of the process at the aggregate level (see above) demonstrate no exceptions, even during the period of market volatility between August and November 1998. Comparison at an individual book level permits the review of riskmodelling techniques at the level of a specific trading unit or risk model. Results for the major trading portfolios provide useful insights into the profti and loss and VAR reporting process.

18 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Risk management

Scenario Analysis Scenario analysis is an essential component of CSFB’s market risk measurement framework. Using this technique, market risk is measured by dynamically revaluing all major portfolios with non-linear risk after moving the market data parameters. Market data parameters are changed according to a predefined set of scenarios.

Scenario analysis supplements the VAR approach, in that it can be used to view risk in cases where market conditions are disrupted. It is also particularly useful in calculating more accurately the impact of larger market movements, whereas analytical risk measures are only accurate for smaller movementsReports are produced for senior management and traders for a range of scenarios on a monthly basis. Market data scenarios include yield curve and credit spread movements, changes in recovery rates on emerging market bonds, exchange rate movements, equity index and stock price movements, gold and oil price movements and changes in volatilities and correlations.

Many of the scenarios are based on extreme macroeconomic events from the past - for example, the 1987 stock market crash and the Gulf War. There are also some scenarios that assess the impact of the events that could occur in the future, for example an anticipated fall in equity prices.

3. COUNTERPARTY AND COUNTRY CREDIT RISK Definition of Counterparty Risk The counterparty risk portion of credit risk is determined by the likelihood of such a counterparty not fulfilling its contractual obligations to the Bank and thus creating a partial or total loss. To assess the probability of default, the Bank utilizes a counterparty rating scale which approximates that used by the major public rating agencies (with AAA as the best to D as the worst), and applies this grading measure against all of its counterparties.

Credit Authority Credit authorii is delegated by the CC0 to specific individuals, depending on knowledge, experience and capability, and is reviewed periodically. Credit authorizations are separated from line functions. CPC/CARMC, chaired by the CEO, in addition to its responsibilities for market risk described above, is also responsible for maintaining credit policies and processes, evaluating country, counterparty and transaction risk issues, applying senior level oversight for the credit review process and monitoring the credit portfolio. CPCKARMC regularly reviews credit limits measuring country, geographic region and product concentrations, as well as impaired assets and recommended loan loss provisions.

19 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Risk management

Credit Analysis Methodology All counterparties are assigned a risk rating as noted above. Credit analysis is risk/reward oriented, i.e. the intensity and depth of analysis is related to the amount, duration and level of risk being entered into. Analysis consists of a quantitative and qualitative portion and strives to be forward looking, concentrating on economic trends and cash flow generating capacity. In addition, analysts make use of peer analysis, industry comparisons and other quantitative tools. Any final rating requires the consideration of qualitative factors relating to the company, its industry and management. The global introduction of a more quantitative model called CRS (Credit Rating System), which was developed by CSFP, was completed in 1998; the use of CRS has ensured that those counterparties not already rated by the primary rating agencies are rated consistently.

Credit Exposure Management Counterparty credit exposures are tracked on an on-going basis against approved credit limits to determine the continued quality and creditworthiness of the counterparty and the transaction. The frequency and depth of the review is influenced by the risks of the exposure.

Credit Provisioning For MIS reporting and business line management purposes, CSFB measures expected loss for the loan portfolio and for derivatives exposures in CSFP over a specified time horizon (depending on the product) based upon the default probabilities assigned by the credii ratings to the borrowers/counterparties. This statistical measure of expected loss is referred to as the annual credit provision, or ACP (‘ECP’ in CSFP). The purpose of the ACP is to more accurately reflect the true earnings of the loan or derivatives business by matching income with losses.

For financial reporting purposes specific credit loss provisions are established on a case-by- case basis taking into account the respective counterparty and/or transaction risk.

CREDIT RISK ARISING FROM TdADlNG POSlTlONS AND DERIVATIVE TRANSACTIONS Business in trading and derivatives in markets without margin calls (especially in the OTC area) is measured and monitored against counterparty limits on at least a daily basis. Credit risk is defined by contract as the sum of the positive replacement value and further potential exposure (safety add-on), which is based on the volatility of the underlying market factors such as interest rates or currencies.

COUNTRY RISK Country risk is defined as the risk associated with the repatriation of foreign currency exposures through restriction on monetary and capital transactions as a result of economic or political factors. All five Business Divisions, Corporate and Investment Banking (‘CIBD’), Fixed Income, Equities, CSFP and Private Equity, assume country risk in a variety of ways. The measurement of and limits on this risk, as for other riiks, are defined by senior management. For example, for trading positions, country risk is a function of the mark-to-market exposure of the position, while for loans and related facilities, country risk is a function of the amount CSFB has lent or committed to lend. The day-to-day management of country exposure is assigned to each Division in accordance with its business authorizations and limit allocations. RMM and CRM provide independent oversight to ensure that the Divisions operate within their limits.

In addition to setting country exposure limits by Division, limits also are set for each product generating a country exposure for each Division. The range of products includes: loans and related facilities, trading with counterparties, trading (inventory) positions, and securii financing trades. The frequency of monitoring these risks depends on the product and the country.

20 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Risk management

The designation of countries as G 10 and other industrialized countries or pre-industrialized and emerging market countries is reviewed on a regular basis by CPCICARMC and is submitted to the ChC for approval.

Listed below are year-end loans and credit related exposures (letters of credit, guarantees, unfunded commitments and similar instruments), and exposures (mark-to-market receivables) to trading counterparties aggregated by rating of country of risk (country of risk is the domicile of the obligor). Trading positions and reverse repurchase agreements are not included as they are marked to market on a daily basis and the related risks are managed by RMM.

COUNTRY EXPOSURE BY CSFB RATING (EXCLUSIVE OF PROVISIONS) As of December 31 Country Rating C/ass 1999 1997 CHFm % CHF m %

A&l xq959.2 73.9% 143,634.5 76.1% AA+ to AA- 29,848.6 17.9% 27,567.6 14.6% A+ to A- 1,421.5 0.6% 3,494.0 1.9% BBB+ to EBB- 3,523.s 2.1% 3,281.2 1.7% BB+ to BB- 3,769.3 2.3% 5,903.6 3.1% 0t to B- 1363.2 0.9% 4,717.7 ’ 2.5% CCC to D 3,579.a 2.2% 223.9 ’ 0.1% Total 199,46!Ll 100.0% l&922.5 100.0%

’ 1997 categories were St to CCC and CC to D.

COUNTRY RATING CtAS DE!XRlFtlON

CSFB Rating S&P/Maody’s Definition Description

iuw AJwAa.3 Substantially Risk Free Smallest degree of risk. exceptional financial condition AA+ AA AAlAa Minimal Risk Excellent financial condition AA- A+ A AIA Modest Riik Good financial condition. more susceptible to the adverse effects of changes in A- circumstances and economic condiiions BB& BBB B0EBaa Average Risk Adequate financial condition, certain protective elements are lacking EBB- B& B0 EWea Acceptable Risk Questionable financial condition, major uncertainties and ongoing exposure to adverse political BE- of ecorianic conditions leading to inadequate capacity to meet financial commitments B+ B BIB Weak Rii Poor financial condition, currents has capacity to meet financial commitments. but any adverse 8. poliiical or economic development will likeb impair capacity or willingness to meet commitments ccc ccc/caa cc PoOr Very poor financial condition, or on the verge of defauk CClCa C D DIC Impaired Payment default

21 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Risk management

4. SElTLEMENT RISK Settlement risk is the risk which is inherent in settlement systems that do not provide immediate finality or in “exchange-for-value” transactions where instructions to release or deliver funds, securities, precious metals, commodities or other assets are sent to the delivery agent and are no longer revocable with 100% certainty, while simultaneously the countervalue receipt is not definitely in hand. Settlement risk will persist until such time that the receipt has been reconciled and finality has occurred.

The Bank seeks to manage settlemeht risk through its participation in regulated clearing and depository organizations, which offer immediate finality and DVP (delivery versus payment) services. The Bank is also actively participating in the creation of new settlement systems, e.g. in the development of Continuous Linked Settlement (CLS) to eliminate settlement risk in the field of foreign exchange trading. CLS has entered the development phase during 1998 and is planned to go live in 2000. In those markets where these services do not exist, the Bank utilizes agent banks that are instructed to exchange valuefor value.

In those instances where market convention and /or products preclude a value for value exchange, the Bank manages its risk through robust confirmation and affirmation of transaction details with counterparties. In addition, it also proactively seeks to manage the timing of settlement instructions to its agents and the reconciliation of incoming payments in order to reduce the window of exposure. The Credit Department considers these factors in deciding counterparty risk limits,

5. LEGAL RISK As discussed above, credit risk is the risk that a borrower or counterparty will not be able to pay its debts or perform its obligations under a contract (e.g., because it is insolvent). Legal risk, by contrast, is the risk that a borrower or counterparty will not be required to pay its debts or perform its obligations under a contract (e.g., because the contract is unenforceable). Among other things, legal risk embraces lack of power or authority to enter into a contract, and insufficient or inappropriate documentation.

The Bank seeks to minimize legal risk by using appropriate documentation, including standard master agreements and individual trade confirmations, and by following procedures to verify that documents have been correctly signed. Where deemed appropriate, external counsel will be consulted about the power and authority of the borrowers and counterparties with which the Bank conducts business. In a more general sense, legal risk is also addressed in many other ways, such as through the continuing refinement of controls over business practices and behavior and the proactive use of the Bank’s compliance function.

6. OPERATIONAL RISK In treasury and securities trading, CSFB’s trading units are kept strictly separate from backoffice operations for the products in question, with each function reporting to a different line of management. Technical and organizational control mechanisms are designed to ensure that transactions carried out by the trading units are processed promptly, correctly and without omission.

Systems applications continue to be upgraded with a view to attaining full automation of the process from the receipt of transaction data right through to the ledger in order to ensure that all execution procedures comply with the relevant regulations and internal devices. Should technical problems arise, fall-back procedures switch in to enable operations to continue in an orderly manner.

22 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Risk management

Each individual process is regularly assessed by a dedicated Operations Risk Management function which monitor and trend key indicators in order to gauge the ongoing risk profile of each local operation. This assessment is carried out against industry standards and policies. Organizational and technical adjustments are made on an ongoing basis with due consideration given to costs and operational benefits. Changes in the operating environment and market developments are analyzed and continually factored into CSFB’s processing procedures.

Year 2000 The challenge faced by financial institutions worldwide as the Year 2000 approaches is substantial. It extends to almost every aspect of daily operations and interaction with the markets. The Bank began work on the Year 2000 issue in 1996, utilising a priority driven methodology, encompassing inventory and assessment, remediation or replacement, testing, third party risk analysis and contingency planning.

Business criiical systems have been addressed first and having identified over 600 that require remediation, 87% were completed and put back into production by December 31, 1998. Remediation of non-compliant date formats has been achieved either by expanding the date format to incorporate four-digit years or by ‘windowing’ for century determination. To mitigate third party risks, during 1998 over 2,300 customers and business partners were contacted in relation to their own Year 2000 projects, and over 550 third party vendors were contacted to assess product compliance. In addition, the Bank has participated in 30 industry tests during 1998 and is committed to taking part in 58 industry tests planned during 1999. However, with systems of such size and complexity, with multiple interfaces to and high reliance upon external systems, no-one can guarantee that there will be no adverse effects from the Year 2000 issue. As a consequence, the Bank has started a contingency planning process, which includes the formation of management teams to quickly respond to unexpected events.

The Board of Directors of the Bank and the Executive Boards of the BUS are provided with regular status reports and have given the highest priority to the Year 2000 project.

7. ASSET AND LIABILITY MANAGEMENT The Corporate Treasury Department at CSFB oversees corporate policy in regard to interest rate and foreign exchange exposure as well as a range of other important policy areas including debt maturity profile, internal and external capitalization, intercompany funding and liquidity policy. It is currently the Bank’s policy to take a neutral position on interest and F/X exposures from a corporate perspective. Trading divisions are authoriied to take such risks as part of their business strategies, within limitations set by the CPWCARMC.

CSFB’s liquidity policy focuses on the proven stability of the Bank’s unsecured funding source - its customer deposit base. Coupled with access to customer funds sourced by its affiliates, this deposit base provides CSFB with substantial sources of liquidity that are well diversified and relationship, rather than price driven. Notwithstanding the proven stability of the Bank’s unsecured funding sources, CSFB has a secondary source of liquidi within its broker/dealer business. CSFB can access significant liquidity through the secured funding markets (repurchase agreements and other collateraliied arrangements), which have proven reliable in high stress conditions. This secondary source of liquidity ensures availability of alternative funding to meet business plans and commercial commitments.

23 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Risk management

8. NOTES ON BUSINESS POLICY WITH REGARD TO THE USE OF DERIVATIVES The trading and use of derivative products generate various types of risk, notably market and credit risk, but also operational and legal risk.

The standards of disclosure concerning risk management to which this Annual Report conforms are in line with the joint recommendations issued by the International Organization of Securities Commissions (‘IOSCO’) and the Basle Committee on Banking Supervision in November 1995. They likewise comply with the Swiss Bankers Association Risk Management Guidelines for Trading and for the Use of Derivatives, which became effective on July 1, 1996. As in the 1997 financial statements, detailed financial information is given for all open derivatives positions held by the Bank as of December 31, 1998, together with information concerning credit risk. These figures,, which can be found in the additional information on consolidated off-balance-sheet business, are in compliance with the classification criteria stipulated by the Institute of International Finance and by Switzerland’s accounting rules for financial institutions. The Annual Report shows the positive replacement values, contract volumes and credit equivalents broken down by counterparty credit quality, together with the positive replacement values and credit equivalents classified according to the maturii of the relevant product (see pages 55156).

For details of CSFB’s business policy with regard to the recording, management and limitation of these risks and the manner in which this policy is implemented see the notes in the respective sections.

24 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Accounting policies

(a) Basis of accounting and consolidation Credit Suisse First Boston’s (‘the Bank’s) financial statements are prepared in accordance with the Swiss Federal Law on Banks and Saving Banks, the Implementing Ordinance on Banks and Saving Banks and the Guidelines of the Federal Banking Commission Concerning the Preparation of Financial Statements of Banks as amended through October 22, 1997 (‘Swiss GAAP for banks’) as well as the 4th and 7th EU Directives and the EU Guidelines on the preparation of accounts for banks.

These consolidated financial statements, which are based on the significant accounting policies outlined below, give a true and fair view of the financial position of the Bank and the results of its operations and its cash flows.

Swiss GAAP for banks conforms in all material aspects to the 4th and 7th EU Directives and to the EU Guidelines on the preparation of accounts for banks. However, Swiss GAAP for banks contains no provision equivalent to Article 37 of the EU Guidelines on the preparation of accounts for banks concerning undervaluation of certain types of assets. There are also minor differences, which are described in (c) below.

The consolidated financial statements comprise the financial statements of the Bank and its subsidiaries in which the Bank controls either directly or indirectly more than 50% of voting rights or through other means. The net assets of subsidiaries have been consolidated using the purchase method.

Minorii interests held by third parties (including the interests held by Credit Suisse Group, the parent company of the Bank) in the equity and in the annual profti of companies controlled by the Bank are shown as separate items. Intercompany balances and transactions are eliminated on consolidation.

The equity method of accounting is used in determining income and carrying values of companies in which the Bank has a 20% or more, but not more than 50% investment in voting stock. These investments are included in ‘non-consolidated participations’ and the Bank’s percentage interest in their profits is included in ‘income from participations’ in the consolidated income statement. Investments in companies, which are held for resale, are accounted for at cost less provisions for permanent impairment in value.

A listing of the Bank’s principal subsidiaries, equity investments and non-consolidated participations is provided in the notes to the consolidated financial statements.

(b) Foreign currency translation In the financial statements of individual companies, assets and liabilities in foreign currencies are translated into the companies’ reporting currency at the rate of exchange existing at the balance sheet date. Resulting exchange differences are included in the income statement.

For the purpose of consolidating individual financial statements, assets and liabilities and off- balance sheet items in foreign currencies are translated into Swiss Francs using rates of exchange prevailing at the balance sheet date. Revenues and expenses are translated into Swiss Francs at average rates of exchange prevailing throughout the year.

Translation differences arising on consolidation of subsidiaries and branches reporting in currencies other than Swiss Francs together with gains and losses arising on related hedges and related tax effect are taken to shareholders’ equity.

(c) Deviations from EU Guidelines The areas in which the accounting policies deviate from EU Guidelines on the Preparation of Accounts for Banks are as follows: - The classification criieria used in the consolidated balance sheet and the consolidated income statement differ from the classifiition criteria proposed by the EU Guidelines; however, all significant information is provided. 25 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Accounting policies

- The difference between the purchase price of securities and precious metal trading positions and their market value used in preparing the consolidated financial statements is not disclosed in the notes to the consolidated financial statements. - The proportion of overall income and expenditure accounted for by operations outside Switzerland is not broken down by geographical location but is provided as one amount. - No specific information is provided concerning emoluments paid to Members of the Board of Directors and to Members of the Executive Board.

(d) Recording of business All completed business is recorded in the financial statements as follows: Foreign exchange, money market and precious metal transactions are recorded on value (settlement) date. Prior to the value date, foreign exchange and precious metal transactions are recorded as off-balance-sheet business. Securiiies transactions are recorded on a trade date basis.

(e) Reporting of repurchase and reverse repurchase agreements Repurchase and reverse repurchase transactions are shown in the balance sheet as advances secured by securities or as deposits against which the Bank’s securiiies are pledged. Depending on the type of counterparty, they are shown as claims on (‘due from’) or liabilities to (‘due to’) banks or customers. Those held for funding purposes are carried in the balance sheet at the amounts at which the securities were initially acquired or sold as specified by the respective agreements, plus interest accrued to the balance sheet date. Those held for trading purposes are carried at fair value. Unrealized as well as realized gains and losses arising from the valuation of the trading portfolio are shown under ‘net trading income’ in the income statement.

(9 Securities lending and borrowing Assets and liabilities arising from securities lending and borrowing operations are recorded at fair value and, depending on the type of counterparty, shown as claims on (‘due from’) or liabilities to (‘due to’) banks or customers. Securiiies positions arising as a result of securiiies borrowing which are not used to cover short trading or securities lending positions are included as part of the securities and precious metal trading portfolios.

(g) Cash and other liquid assets, money market papers, funds due from and to banks and customers including mortgages, financial leases and liabilities Receivables and liabilities are generally accounted for at nominal value. Money market instruments held for trading are carried at their fair value. Unrealized as well as realized gains and losses arising from the valuation of the trading portfolio are shown under ‘net trading income’ in the income statement. Unearned discounts from money market papers classified as held-to-maturity are accrued over the term of the claim. A provision is made as soon as serious doubts arise as to the collectability of an asset. The necessary provision against the asset’s principal and related accrued interest is made in accordance with the principle of prudent accounting, the level of security provided and the general economic climate. lf the receivable shown in the accounts cannot be collected, a provision will be made which is set off against the corresponding assets. Endangered interest and commission income due from banks and customers is not credited to income from interest business but accounted for as a provision and credited to the income statement after its collection.

In the case of claims subject to country risk, provisions are made as soon as serious doubts arise as to the collectability of an asset. The necessary provisions against the asset’s capital value and accrued interest are made in accordance with the principle of prudent accounting, the level of security provided and the general economic climate. If the receivable shown in the accounts cannot be collected, it is wriien off against the related provision.

26 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Accounting policies

(h) Securities and precious metals trading portfolio Upon purchase, securities and precious metals are classified as either part of the trading portfolio or as financial investments. The trading portfolio consists of precious metals, tradeable securities, which are readily realizable, and securities acquired as a result of underwriting operations. Traded and OTC options are included under ‘other assets’.

The trading portfolio is carried at market values as of the balance sheet date where positions are exchange traded or traded on a representative market. All other positions are carried at fair value. Both are referred to as fair value, which is defined as the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm’s length transaction.

Unreakzed as well as realized gains and losses arising from the valuation of the trading portfolio are shown under ‘net trading income’ in the income statement. Interest and dividend income on the trading portfolio is included in ‘net interest income’ in the income statement.

(i) Financial investments Where management has the positive intent and ability to hold a debt security to maturity, securiies are designated as held-to-maturity. Held-to-maturity debt securities are reported at amortized cost less provisions necessary when management has serious doubts about the future repayment of the principal and future interest receivable. Interest income, including amortization of premiums and discount, is included in the income statement under ‘interest and dividend income from financial investments’. Profits arising from sales on debt securities designated as held-to-maturity, are deferred and amortized over the original lifetime of the security.

Financial investments not classified as held-to-maturity are classified as available-for-sale and accounted for at the lower of cost or fair value. Interest and dividend income is included in the income statement under ‘interest and dividend income from financial investments’. Proftis arising from sales of available for sale securities (not classified as held-to-maturity) are included in ‘income from the sale of financial investments’.

(i) Tangible fixed assets Real estate is valued at acquisition cost less accumulated depreciation. New buildings and refurbishments are depreciated over 67 years. No depreciation is recorded on land, however, a provision is recorded for permanent impairment in market value.

Other fixed assets such as fixtures and flings installed in rented properties, computers, furnishings and vehicles are depreciated over the estimated useful lives of the related assets which range between three and five years.

(k) Goodwill Goodwill, the excess of cost over the fair value of net assets acquired, is amortized over its estimated useful life on a straight line basis. The amot-tization term may not be longer than five years unless a longer period, which may not exceed twenty years starting from the date of the acquisition, is justified.

Prior to 1997, goodwill was charged against sharehdder’s equity upon acquisition. The theoretical effect on the consolidated balance sheet and the consolidated income statement of amortizing this goodwill over its estimated useful life is disclosed in the notes to the consolidated financial statements.

(I) Reserve against general banking risks The reserve against general banking risks represents reserves as at the balance sheet date against future banking risks. The reserve is included as tier 1 capital with related movements included in earnings. 27 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Accounting policies

(m) Derivative financial instruments Forward rate agreements, futures, swaps, options, forward contracts and other over-the-counter off-balance sheet instruments held for trading purposes are carried at their fair value and the resulting proftis and losses are included in ‘trading income’ in the income statement. The resulting replacement values are included in ‘other assets’ or ‘other liabilities’ as appropriate and are presented net by counterparty for transaction in those products where the Bank has a legal right of set off; otherwise the replacement values are presented gross by contract.

Where derivative financial instruments are used for hedging purposes, positive and negative replacement value is calculated with the difference in value to the accrued amount included in a compensation account within ‘other assets’ or ‘other liabilities’. Replacement values when the Bank is an agent for exchange traded contracts, are not disclosed, except in the exceptional cases where the accrued daily loss is not fully covered through margin payments. Replacement values where the Bank is an agent for over-the-counter contracts are calculated even when they are covered through margin payments.

Gains and losses on derivative financial instruments used to hedge items reported at cost or lower of cost or fair value are deferred and recognized in income when costs relating to the hedged item are recognized in income. In order to qualify for hedge accounting, the derivative financial instrument must meet the following conditions: the item to be hedged must expose the Bank to price or interest rate risk; it must be probable that the results of the hedge will substantially offset the price or interest change in the hedged item; and the derivative financial instrument must be designated as a hedge to the item.

Business policy with regard to the use of derivatives and risk management is further discussed in the notes to the Bank’s operations.

(n) Pension plan accounting The Bank operates a number of pension fund plans. The costs associated with defined contribution plans are recorded on an accrual accounting basis. The annual contributions and related expenses of defined benefit plans are based on actuarial advice.

(0) Income and capital taxes Taxes are charged on the current year’s profit. Deferred tax assets and liabilities are established for the expected future tax consequences of temporary differences between the carrying amounts and tax bases of assets and liabilities. In establishing the deferred tax rate used to calculate deferred tax assets, consideration is taken of the ultimate deferred tax, which will be of benefit; for deferred tax liabilities, the enacted tax rate is used. Deferred tax assets are not established for tax loss carry forwards.

(p) Changes to accounting principles - Endangered interest Starting in 1998 the set up and release of provisions for endangered interest is recorded under ‘interest income’. Prior to 1998, provisions set up for endangered interest overdue less than 90 days and the reclassification of provisions for endangered interest, which were not necessary any longer from an economic point of view, were recorded under ‘valuation adjustments, provisions and losses’. The prior year financial statements have not been restated. The impact on the 1997 consolidated income statement is not material.

- Assets held in the trading book are carried at market values as at December 31, 1998 where positions are exchange traded or traded on a representative market. All other positions are carried at fair value. Both are referred to as fair value, which is defined as the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm’s length transaction. Prior to 1998, the trading 28 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Accounting policies

portfolio was valued at market value. Assets that were not traded on a recognized stock exchange or on a representative market were carried at the lower of cost or market value. The prior year financial statements have not been restated. Impact on the 1997 consolidated balance sheet and income statement:

Valuation adjustments and provisions: CHF -69m Net trading income: CHF 69m

EVENTS SINCE THE BALANCE SHEET DATE

On February 15, 1999 Credit Suisse Group announced that CSAM will acquire Warburg Pincus Asset Management Inc., a leading U.S. asset manager with 260 employees and USD 22 billion in assets under management. The price of the asset management transaction was fixed at USD 650 million, including an initial USD 450 million and an additional USD 200 million earn-out over three years. Subject to regulatory approvals, the agreement is expected to close by mid of 1999.

29 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Foreign currency translation rates

FOREIGN CURRENCY TRANSLATION RATES applied to the consolidation of Group companies

Year end Yearly rates for balance sheet and average rates off-balance-sheet m&ions for income statement 31.1268 31.12.97 1998 1997 WN CURRENCIES CHF CHF CHF CHF 1 US dollar 1.38 1.44 1.43 1.44 1 pound sterling 2.26 2.41 2.37 2.35 1 ecu 1.61 1.60 1.61 1.62 1 Canadian dollar 0.89 1.01 0.97 1.04 1 Australian ddlar 0.84 0.94 0.60 1.07 1 Singapore dollar 0.82 0.85 0.86 0.97 1 Hong Kong dollar 0.18 0.19 0.18 0.19 100 deutschmarks 8234 m90 81.66 82.90 100 Luxembourg francs 3.96 3.90 3.95 4.02 100 French francs 24.66 24.02 24.36 24.60 100 lire 0.08 0.03 0.08 0.08 100 yen 1.21 1.11 1.10 1.19 100 pesetas 0.97 0.95 0.66 0.98

30 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Subsidiaries and associated companies

Share capital Company name Domicile Currency in 1’000 Shareholding CONSOUDATED SUBSIDIARIES Primarily engaged in investment and commercial banking Credit Suisse First Boston Corp. New York, USA USD 1 1c!0.00% ’ Credit Suisse First Boston Mortgage Capital LLC New York, USA USD 1 100.00% ’ Credit Suisse First Boston Equitech, Inc. New York, USA USD 1 loo.c0% ’ Merchant GP, Inc. New York, USA USD 1 100.00% ’ Credit Suisse First Boston Management Corp. New York, USA USD 0.1 100.00% ’ Banco de lnvestimentos Credit Suisse First Boston Garantia S.A. Sao Paula, Brazil BRL 164,034 100.00% Credit Suisse First Boston Garantia Ltd. Nassau, Bahamas USD 16,917 100.00% Credit Suisse First Boston (Singapore) Ltd. Singapore SGD 23,900 100.00% Credit Suisse First Boston (Hong Kong) Ltd. Hong Kong, China HKD 109,713 100.00% Credit Suisse First Boston Pacific Capital Markets Ltd. Sydney, Australia AUD 10,000 lOO.CQ% Credit Suisse First Boston Australia Securities Ltd. Sydney, Australia AUD 28,402 100.00% Credit Suisse First Boston Australia Limited Sydney, Australia AUD 64 100.00% Credit Suisse First Boston Securities (Japan) Ltd. Tokyo, Japan JPY 38,422,OOO 100.00% Credit Suisse First Boston (Europe) Ltd. London, United Kingdom USD 27,300 100.00% Credit Suisse First Boston Equities Ltd. London, United Kingdom GBP 15,000 100.00% Credit Suisse First Boston Canada Toronto, Canada CAD 157,312 lCQ.CUf% Credit Suisse First Boston Aktiengesellschaft Frankfurt, Germany DEM 211,073 100.00% Credit Suisse First Boston (Moscow) A/O Moscow, Russia USD 20,000 99.00% Credit Suisse First Boston (Cypus) Limited Limassol, Cyprus USD 270,000 loo.c0% Finanz AG Zurich Zurich, Switzerhnd CHF 15,000 100.00%

Primarily engaged in derivative business Credit Suisse Financial Products London, United Kingdom USD 482,325 80.00%

Finance and financial holding companies Credit Suisse First Boston, Inc. New York, USA USD 2.163 loo.c0% ’ Credit Suissa First Boston International (Guernsey) Ltd. St. Peter Port, Guernsey GBP 200 100.00% Credit Suisse First Boston (International) AG Zug, Switzerland USD 37,500 100.00% Credit Suisse First Boston (Latin America) Holdings LLC Grand Cayman, Cayman Islands USD 84,550 100.00% Credit Suisse First Boston Australia (Finance) Ltd. Melbourne, Australia AUD 10,066 100.00% Credit Suisse First Boston Finance (Guernsey) Ltd. St. Peter Port, Guernsey USD 156 100.00% Credit Suisse First Boston Finance B.V. Amsterdam, The Netherlands NLG 40 100.00% Credit Suisse First Boston Australia (Holdings) Ltd. Sydney, Australia AUD 390 100.00%

Fund management companies Credit Suisse Bond Fund Management Company SA Luxembourg CHF 300 100.00% Credit Suisse Equity Fund Management Company SA Luxembourg CHF 300 100.00% Credit Suisse Money Market Fund Management Company SA Luxembourg CHF 300 100.00% Credit Suisse Portfolio Fund Management Company SA Luxembourg CHF 300 100.00% Credit Suisse Asset Management Funds Zurich, Switzerland CHF 7,ooo 100.00%

Primarily engaged in Asset Management Credit Suisse Trust & Banking Co. Ltd. Tokyo, Japan JPY w@w@J 100.00% Credit Suisse Asset Management Ltd. London, United Kingdom GBP 19 loo.cQ% Credit Suisse Asset Management (Australia) Sydney, Australia AUD 270 loo.c0% Credit Suisse Asset Management (former BEA Asociites) New York, USA USD 6,700 100.00% Credit Suisse Asset Management (Deutschfand) GmbH Frankfurt, Germany DEM 5,m 100.00% Credit Suisse Asset Management (France) S.A. Pans, France FRF 32,000 100.00% Credit Suisse Asset Management SIM S.p.A. Milan, Italy LIT 12,060,ooo 100.00%

’ 49% voting stock held by Credit S&se Groop.

31 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Subsidiaries and associated companies

Share capital Company name Domicile Currency in 1’000 Shareholding Real estate companies S.I. Come-a-Vin (in Liquidation) Geneva, Switzerland CHF 80,000 100.00% GTN Global Properties Holding Ltd. Limassol, Cyprus USD 2 100.00%

NON-CONSOLIDATED PARTICIPATIONS Associated companies (accounted for by the equity method) Valcambi SA Balerna, Switzerland CHF 12,ooO 100.00% lnnovent Capital Ltd. Grand Cayman, Cayman Islands CHF 10,588 38.57% Premex AG Zurich, Switzerland CHF 1,500 33.33% Reinsurance Finance Consultants AG Zurich, Switzerland CHF 750 33.33%

Participations Main companies Banco General de Negocios Buenos Aires, Argentina ARG 163,000 24.06% ’ Banco Exterior Suiza SA Geneva, Switzerland CHF 115.ooo 10.00% Banco Comercial SA Montevideo, Uruguay URU 215,877 19.90% z Telekurs Holding AG Zurich, Switzerland CHF *s@J 17.40% Intersettle Swiss Corp. Zurich, Switzerland CHF 36,000 9.50% SEGA Schweiz. Effekten-Giro AG Olten, Switzerland CHF 10,ooo 18.50% SNOC Swiss Nominee Company Zurich, Switzerland CHF z@30 25.00% Euro-Clear Clearance System Ltd. London, United Kingdom GBP 2,500 6.00% NC0 Dealer Sot. Fin. Lisbon, Portugal POR 500,ooo 18.00% San Luis Financial and Investment Co. Ltd. Panama City, Panama PAN 480 12.14% North Bay Ltd. Nassau, Bahamas USD 8,~ 100.00% SWIFT La Hulpe, Belgium BEF 439,900 1.64% Swiss Euro Clearing Bank GmbH Frankfurt, Germany DEM 15,oocJ 15.00%

ANANCIAL INVESTMENTS Main companies Cancun Coral Investment Corporation Panama City, Panama USD 10 100.00% Compania Suiza Argentina de Negocios Buenos Aires, Argentina ARG 20,ooo 50.00% lsmeca Holding SA La Chaux-de-Fonds, Switzerland CHF 7WxJ 19.25%

* voting rights 12.14 O/O. 2 voting rights 27.40 %.

32 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Changes to the scope of consolidation

CHANGES TO THE SCOPE OF CONSOLIDATION DURING BUSINESS YEAR 1998 Company name Domicile Shareholding Purchases Banco de lnvestimentos Credit Suisse First Boston Garantia S.A. Sao Paulo, Brazil 100.00% Credit Suisse First Boston Garantia Limited Nassau, Bahamas 100.00% Credit Suisse First Boston (Nederland) NV (former BZW Nederland NV) Amsterdam, Netherlands 100.00% Credit Suisse First Boston So&dad de Valores y Balsa SA (former BZW, Sociedad de &lores y Balsa SA) Madrid, Spain 100.00% Credit Suisse First Boston de Zoete & Bevan Limited (former BZW De Zoete & Bevan Limited) London, United Kingdom 100.00% Credit Suisse First Boston Australia Equities Group Ltd. (former First Pacific Group Limited) Sydney, Australia 100.00% Credit Suisse First Boston Australia Administration Pty Ltd. (former First Pacific Australia Services Pty Ltd.) Sydney, Australia 100.00% Credit Suisse First Boston Australia Equities Ltd. (former First Pacific Stockbroker Ltd.) Sydney, Australia 100.00% Credit Suisse First Boston Australia Registered Traders Pty Ltd. (former First Pacific Registered Traders Ltd.) Sydney, Australia 100.00% Credit Suisse First Boston Australia Investment Services (former First Pacific Management Ltd.) Sydney, Australia 100.00% Credit Suisse First Boston Administration Pty Ltd. (former First Pacific Staff Services Pty Ltd.) Sydney, Australia 100.00% Credit Suisse First Boston NZ Investment Ltd. (former First NZ Capital Investments Ltd.) Wellington, New Zealand lCCl.OO% Credit Suisse First Boston Holdings Limited (former First NZ Capital Holdings Ltd.) Wellington, New Zealand 100.00% Credit Suisse First Boston NZ Equity Futures Limited (former First NZ Capital Futures Ltd.) Wellington, New Zealand 100.00% Credit Suisse First Boston NZ Limited (former First NZ Capital Limited) Wellington, New Zealand 100.00% Credit Suisse First Boston NZ Securities Limited (former First NZ Capital Securities Ltd.) Wellington, New Zealand loo.G0%

Sales lmmobiliare Credit0 Sviuero SA Lugano, Switzerland 100.00% Peterhof AG Zurich, Switzerland 100.00% Ore&Fijssli-Hof AG Zurich, Switzerland 100.00% AG zur Utobrijcke Zurich, Switzerland 100.00% Boden AG Zurich, Switzerland 100.00% Commerz & Verwaltungs AG Sarnen. Switzerland 100.00% Schwalbe AG Zurich, Switzerland 100.00% Credit Suisse (Luxembourg) S.A. Luxembourg 100.00%

33 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Additional information on the consolidated income statement

1998 1997 Change ANALYSIS OF INCOME CHFm CHF m CHF m NET INTEREST INCOME Interest and discount income 14,642 13,520 1,022 Interest income from claims on customers 6,859 5,094 1,765 Interest income from claims on banks 6,657 7,660 -1,003 Interest/discount income from bills of exchange and money market paper 756 566 190 Credit commissions treated as interest earnings 270 200 70 Interest and dividend income from trading portfolio 5,530 5,679 -149 Interest income 5966 5,525 -459 Dividend income 464 154 310 Interest and dividend income from financial investments 228 257 -29 Interest income 216 244 -26 Dividend income 12 13 -1 Interest expense -17,697 -17,411 -486 Interest expense on liabilities to customers -10,634 -8,204 -2,630 Interest evnse on liabilities to banks -7,063 -9,207 2,144 of which interest expensa on suhdimted tiabikties -486 -605 119 Total net interest income 2,403 2,045 356

NET COMMlSSlON AND SERVKE FEE INCOME Income from credit business 2s 250 -15 Credit commissions 235 253 -18 less commission expense 0 -3 3 Income from securities business 2,204 1,= 621 Commission income from stock exchange business and securities underwriting 2,328 1,749 579 less commission expense -124 -166 42 Income from investment business 2,525 1,= 640 Commission income from investment business and asset management 5- 1,= 620 less commission expense -75 -95 m Other commission and fee income 8 40 -32 Other commission and fee income 13 44 -31 less commission expense -5 4 -1 Total net commission and service fee income 4,972 3,758 1,214

NET TRADING INCOME (including derivatives and expenditure on brokerage/commissions) Income from securities trading 804 2.694 ’ -1,890 Loss/income from foreign exchange and banknote trading 490 473 -983 Income from precious metal trading 166 203 45 Income from trading in interest rate instruments 782 972 -190 Other income from tradina 349 419 -70 Total net trading income 1,603 4,761 -3,166

i CHF 30 million were redsdied from net trading income to other ordinary income to be consistent with the current year.

34 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Additional information on the consolidated income statement

1998 1997 Change ANALYSIS OF EXPENSES CHF m CHF m CHF m PERSONNEL EXPENSES Personnel compensation 5,301 4,943 358 Staff benefits 334 299 35 Other staff costs 297 240 57 Total personnel expenses 5,922 5,482 450

OTHER OPERATING EXPENSES Bank premises and real estate 420 288 132 Expenditure on IT, machinery, furnishings, vehicles and other equipment 189 187 2 Expense allocations from Credit Suisse Group BUlentities 442 383 59 Expense allocations to Credit S&se Group BWentities -237 -325 88 Other operating expenses 1,265 1.106 159 of which communications and advertising costs 176 146 30 of which legal and wnsultancy fees 364 265 99 of which fees and wmmissibns 64 90 -26 of which other costs 667 605 56 Total other operating expenses 2,079 1,639 440

DEPRECIATION AND WRITE-DOWNS ON NON-CURRENT ASSETS Depreciation on tangible fixed assets 336 323 13 Depreciation on intangible assets 16 0 16 Total depreciation and write-downs on non-current assets 352 323 29

VALUATION ADJMTMENTS, PROVISIONS AND LOSSES Provisions and valuation adjustments for default risks 1,595 356 1,239 Provisions and valuation adiustments for other business r&S 269 193 76 Other tosses 7 61 -54 Total valuation adjustments, provisions and losses 1,871 610 1,261

35 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Additional information on the consolidated income statement

ANALYSIS OF EKTRAORDINARY 1998 1997 Change INCOME AND EXPENSES CHF m CHF m CHF m EXTRAORDINARY INCOME Gains realized from the disposal of participations 35 20 15 Gains realized from the disposal of tangible fixed assets 0 17 -17 Other extraordinary income 426 41 385 of which release of Reserves against general banking risks 412 0 412 Total extraordinary income 451 70 383

EXTRAORDINARY EXPENSES Restructuring costs relating to E3ZW acquisition 0 332 -332 Real estate related provisions - Moscow 83 0 83 IT provision for Year 2000 and EMU events 0 220 -220 Restructuring costs relating to Credit Suisse Group reorganization 50 79 -29 Losses realized from the disposal of participations 5 0 5 Other extraordinary expenses 371 170 201 of which Wodd War II settlement 365--- 0 365 Total extraordinary expenses 509 801 -292

1998 1997 INCOME AND EKPENSES FROM Switzerland Abroad Switzerland Abroad ORDINARY BANKING BUSINESS: SWlTZERlAND AND ABROAD CHF m CHF m CHF m CHF m Net interest income 150 2,253 143 1,902 Net commissions and service fee income 585 4,387 746 3,010 Net trading income 492 1,111 354' 4,407 Net other ordinary income 220 79 152' 76 NET OPERATlNG INCOME 1,447 7,830 1,397 9,395 Operating expenses Personnel expenses 355 5,577 469 5,013 of which personnel compensation 304 4,997 395 4,548 of which staffbenetis 35 299 57 242 of which other staff costs 16 281 17 223 Other operating expenses 353 1,726 304 1,335 of which bankpremises 66 354 25 264 of which expenditure on IT, machinery, furnishings, vehicles, etc. 12 177 14 173 of which otherprrqetiy, equipment and administtative costs 275 1,195 265 898 Total operating expenses 708 7,303 773 6,348 GROSS OPERATlNG PROFlT 739 527 624 qo47 % of total 58% 42% 17% 88% Taxes 15 -24 44 651 % of total - 767% 267% 6% 94% GROSS OPERATlNG PROFIT LESS TAKES 724 551 580 2,396 % of total 57% 48% 19% 81%

’ CHF 30 million were reclassiiied to be consistent with the current year.

36 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Additional information on the consolidated balance sheet

31.12.98 31.12.97 Change MONEY MARKET PAPERS CHF m CHF m CHF m Bills of exchange and money market paper eligible for discount with central banks 18,588 7,257 11,331 of which short and medium-term federal securities 16,004 2,569 13,435 Other bills of exchange and money market paper 276 8,878 -8,602 TOTAL MONEY MARKET PAPERS 18,864 16,135 2,729

Form of securitv Secured Other by mortgage security Unsecured Total CLAIMS BALANCE SHEET CHF m CHF m CHF m CHF m Claims on banks December 31,199s 0 97,977 42,019 139,996 of which secuniies lending and reverse repurchase agreements 0 71,146 7,157 78,303 December 31, 1997 0 113,104 30,888 143,992 Lendings Claims on customers (including financial leasing) 47 35,245 27,644 62,936 of which securities lending and reverse repurchase agreements 0 26,061 2,573 28,634 Mortgages 7,246 7,246 of which residential 12 12 houses and owner-occupisd flats 10 10 ofices and business propeq 6,649 6,849 commercial and industrial propew 40 40 other property 335 335 Total lendings December 31,199s 7,293 35,245 27,644 70,182 December 31, 1997 7,196 75,018 31,767 113,981

Form of security Secured Other by mortgage security Unsecured Total CLAIMS OFF-BAIANCE SHEET BUSINESS CHF m CHF m CHF m CHF m Contingent liabilities Credit guarantees in the form of aval, guarantee and indemnity liabilities 7 5,807 1,993 7,807 Bid bonds, delivery and performance bonds, letters of indemnity, other performance-related guarantees 16 1,434 1,198 2,648 Irrevocable commitments in respect of documentary credits 1 131 2,067 2.199 Other contingent liabilities 5 85 1,654 1,744 Total contingent liabilities December 31,1998 29 7,457 6,912 14,398 December 31,1997 27 5,588 14,270 19,885 irrevocable commitments December 31,1998 2,750 40,722 39,780 83,252 December 31,1997 1 24,868 37,917 62,786 Call liabilities December 31,1998 0 0 1 1 December 31, 1997 0 0 4 4 Confirmed credits December 31,1998 0 a 262 262 December 31, 1997 0 10 463 473 Total secured claims off-balance sheet December 31,1998 2,779 48,179 45,955 97,913 business December 31, 1997 26 30,466 52,654 83,148 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Additional information on the consolidated balance sheet

LENDINGS (CLAIMS ON CUSTOMERS, MORTGAGES) BY ECONOMIC SECTOR Swiss txxrowers’ Foreign borrower$ Total lendings 31.12.98 31.12.97 31 .12.98 31.12.97 31.1298 31.12.97 Change % of total % of total CHF m CHF m CHF m CHF m CHF m CHF m CHF m 31.12.98 31.12.97 Private households 14 177 384 1,051 398 1,228 -830 0.6 1.1 Non-profit institutions 0 31 0 836 0 867 -867 0.0 0.8 Private sector enterprises (non-financial) 849 1,637 27,188 25,667 28,037 26,664 1,= 40.0 23.2 Agriculture and mining 0 0 808 959 868 959 -151 1.2 0.8 Manufacturing 482 515 6,498 10,179 6,980 10,694 -3,714 9.9 9.4 Food 0 6 663 1,113 663 1,119 -456 0.9 1.0 Beverages 0 0 132 225 732 225 -93 0.2 0.2 Tetiiles 0 0 197 410 197 410 -213 Oi? 0.4 7imber, furniture 0 0 359 614 369 614 0.5 0.5 Graphical trades 0 0 40 209 40 209 -169 0. I 0.2 Plastics, rubber, leather 4 112 380 1,402 384 1,514 -1,130 0.5 1.3 Chemicals I20 7i1 531 1,248 657 1,359 -705 0.9 7.2 Oil 17 116 814 1,391 831 1,507 -676 1.2 1.3 Metals, building installations 16 21 787 899 803 920 -117 1. I 0.8 Machinev, equipment, vehicles 312 91 2,28? 2,077 fS83 2‘ 168 425 3.7 7.9 Other wnsumer goods 0 4 208 378 208 382 -174 0.3 0.3 Other 13 54 116 213 129 267 -138 0.2 0.2 Construction 0 0 612 724 612 724 -112 0.9 0.6 Energy, environmental protection 0 0 6,971 3,442 5,971 3,442 2,529 8.5 3.0 Services 367 1,022 13,299 9,763 13,666 10,765 2,881 19.5 9.4 whoesale and retail trade 23 697 3,277 1,634 4300 2,331 969 4.7 20 Transport, hotels and catering 103 70 I, 142 1,172 1,245 1,242 3 1.8 1. 7 Other services 241 255 8,880 6,957 $121 7,212 1wQ 13.0 6.3 Public sector enterprises (non-financial) 0 0 0 1,045 0 1,045 -1,646 0.0 0.9 Financial enterprises 837 2,166 39,718 57,429 40,355 59,529 -19,174 57.4 52.2 Public authorities 5 12 1,386 3,462 1,391 3,414 -2,023 2.0 3.0 Other borrowers 0 0 1 21,294 1 21,294 -21,293 0.0 18.7 TOTAL LENDINGS 1,665 3,867 68,677 110,124 70,182 113,981 43,799 166.0 100.0 % of total 2.1 3.4 97.9 96.8 166.0 100.0

1 By customer domicile.

38 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Additional information on the consolidated balance sheet

31.12.98 31.12.97 Change SECURITIES AND PRECIOUS METALS TRADING PORTFOLIO CHF m CHF m CHFm Interest-bearing securities and loan stock rights 68,313 72,196 -3,663 of which own bonds 332 1,182 -850 of which issued by public sector entities 43,701 43,937 -5,236 Quoted on stock exchanges 40,628 40,609 19 Not quoted on stock exchanges 27,666 31,507 -3,902

Equities 30,876 28,671 2,205 of which Credit Suisse Group shares’ 2,239 1,372 867 of which units in equip funds 77 628 -551 Quoted on stock exchanges 28,361 27,166 1,195 Not quoted on stock exchanges 2,515 1,505 1,010

Precious metals 1,775 1,518 257 of which SeNing as cover for delivery wmmitments shown as liabilities 1,ns 1,518 257 TOTAL SECURlTlES AND PRECIOUS METALS TRADING PORTFOLIO 160,964 102,385 -1,421 of which securities eligible for discount with central banks 24114 28,984 -870

Material assets and liabilities included under other balance sheet positions which are valued in accordance with fair value as well as trading portfolio which are borrowed or lent out are as follows: Lending of trading portfolio’ 44,984 33.823 11.161 to banks 34,213 28,625 5,588 to customers 14 771 5,198 5,573 Borrowing of trading portfolio’ 4M= 31,063 13,800 from banks 36,099 13,643 22,455 from customen 8,7M 17,420 -8.= Positive replacement values of trading portfolio derivatives (other assets) 45,816 50,739 -4,923 Negative replacement values of trading portfolio derivatives (other liabilities) 49,384 50,603 -1.219

1 Current positions in Credit Suisse Group shares are subject to delivery commitments under derivatives as well as Securities Borrowing contracts. When these commitments are taken into account, the CSFB’s holdings of Credit Suisse Group shares are insignificant. 1 Shown in the babrce sheet as due from banks or customers. 3 Shown in the balance sheet as due to banks or customers.

39 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Additional information on the consolidated balance sheet

Book value costs Fair value’ 31.12.98 31.12.97 31.12.98 31.12.97 31.12.98 31.12.97 Change FINANCIAL INVESTMENTS’ CHF m CHF m CHF m CHF m CHF m CHF m CHF m Interest-bearing securities 6,263 6,626 -273 of which own bonds and cash bonds 58 375 - 317 of whiti issued by public sector entities 5,583 2,639 2,944 of which valued at accrual method f586 2,344 242 of which valued at lower of cost or fair value 3,667 4,182 z&z?5 4‘ 182 3,667 4,182 -515 Quoted on stock exchanges 6,064 2,872 3.182 Not quoted on stock exchanges 199 3,654 -3,455

Equities 2,618 2,436 7 2,664 2,610 2,618 2,639 183 of which qual@ing equity interests’ 260 221 39

Real estate’ 1,323 1,043 1,323 1,043 1,323 l&+3 280 TOTAL FINANCIAL INVESTMENTS 10,194 10,004 190 of which securities eligible for discount with central banks 6675 5,424 251

Borrowing of financial investments3 3,067 2,726 341 borrowed from banks 0 505 -505 borrowed from customers a067 2,iZl 846

Lending of financial investments’ 0 0 0

1 Investments which are not held for trading or participation purposes (equity participations and real estate). 2 At lees3 10% capital or voting rights. 3 Shown in the consolidated balance sheet as due to banks or customers. 4 Shown in the consdideted balance sheet as due from banks or customers. s Details only for financial investments that are valued at the lower of cost or fair value. 5 Real estate held for resale. 7 Re&seii&ion of certain assets from other assets to firxuxial investments amounting to CHF 247 million to be consistent with the current year.

31.12.98 31.12.97 Change NON-CONSOLIDATED CHF m CHF m CHF m Quoted on stock exchanges 0 0 0 Not quoted on stock exchanges 446 272 173 TOTAL NON-CONSOLIDATED PARTICIPATIONS 445 272 173

40 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Additional information on the consolidated balance sheet

Accumulated Investments/ Extraordinary deprecia- Net book Translation Income deprecia- Nel book Cd tions value difference from equity Disposals Transfers Depreciation ’ tions value FtXED ASSETS AT 31.12.97 31.12.97 31.1233 DECEMBER 31,1998 CHF m CHF m CHF m CHF m CHF m CHF m CHF m CHF m CHF m CHF m Participations accounted for using the equity method 166 0 166 -11 191 -37 0 0 0 209 Other participations 106 0 106 0 46 -4 -3 4 -5 136 Total participations 272 0 272- -11 227 -41- -3 -4 -5 445 -- Sank premises 3,349 -519 -7 2,830 138 -187 259 -43 -6 2,960 Other real estate 334 -7 327 0 24 -57 -41 -10 -2 241 Total real estate ’ 3,683 526 3,157 -31 162 -244 218 -52 -a 3,201 LeaseMd improvements 715 -302 413 -16 66 -27 3 -35 -3 401 Other ph@cal ass& 1.666 -667 999 -37 466 -1 -215 -263 -10 929 -- -- Total tangible ttxed assets 6,064 -1,495 4,569 -84 694 -272 6 -351 -21 4,541 -- Goodwill 2 0 0 0 0 597 y- 0 -16 0 579 TOTAL FtXED ASSETS 6,336 -1,495 -7 4,&41 1328 J15- 3 -371 -26 5S5 -- --

1 The bulk al real edate is used for the banking infrastructure needs of Credit S&se Group. Real estate owned by the Bank but used by Credit SuisseOT other erxtit& withinCredii &ii Group &held for rentalto such entaies. 2 Prior to January1,1997, goodwillwas C&Q& dii agabrd shareholdersq&y.’ Had goodwillbeen recaded in the consolidatedbalance sheet and depreciatedthrough the consoli&ted income statement. net loss w&d have amolntedto CHF 1.027 million. an imrease of CHF 31 miAiin (1997: consol’&ted net poft would have been CHF 36 million bwr). The figures shown fw t&l assets and sharehokier’s equity would have been CHF 45 million Kgher (1997: CHF 76 million). Since January 1. 1997, acquired g.sodwill is capitaliied and depredated OM< its estimated useful Me. 3 whereof CHF 19 million booked ki extraordinary erpemes

31.12.98 31.12.97 Change FURTHER DETAILS ON FIXED ASSETS CHF m CHF m CHF m Fire insurance value of bank premises and other real estate 3,189 3,152 37 Fire insurance value of other physical assets 1,390 1.026 364 Liabilities: future leasing instalments in connection with operational leasing 28 26 2

PLEDGED AND ASSIGNED ASSETS AND ASSETS UNDER 31.12.98 31.12.97 Change RESERVATION OF OWNERSHIP CHF m CHF m CHF m Assets pledged and assigned as collateral 52,921 48.774 4,147 Actual commitments secured 24,523 2 1,894 2,629

None of the CSFB’s assets were under reservation of ownership either in 1998 or in the previous year.

LIABILITIES IN RESPECT OF OWN PENSION FUNDS On the balance sheet date, total liabilities in respect of the CSFS’s own pension funds amounted to CHF 715 million (as of December 31, 1997: CHF 771 million).

41 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Additional information on the consolidated balance sheet

BONDS AND MORTGAGE-BACKED BONDS ISSUED BY THE CENTRAL 31.12.98 31.12.97 Change MORTGAGE BOND INSTlTUTlONS AND THE CENTRAL ISSUING OFFICE CHF m CHF m CHF m Bon& 36,442 36,562 -120 Bonds issued by the Swiss central issuing offices * 0 0 0 Bonds and mortgage-backed bonds issued by the Swiss central mortgage bond institutions 0 0 0 Subparticipation’ -1,585 -1,565 0 TOTAL 34,877 34,997 -120

1 To banks within Credii Suisse Group

BONDS AND MORTGAGE BONDS ISSUED BY CSFB (PARENT COMPANY) Redemption Coupon Year of issue Call Currency Outstanding amount date date in millions 3.1999 7.00% 1991 CHF 5.000 5.1999 6.50% 1991 CHF 5.000 9.1999 5.00% 1994 CHF 200.000 9.1999 6.75% 1991 CHF 4.000 1.2000 7.25% 1990 CHF 150.000 ’ 9.2000 4.50% 1995 CHF 25O.OciJ 10.2000 5.79% 1997 10.1999 USD 1 QQ5.964 2 6.2001 7.25% 1990 CHF 170.000 7.2001 7.00% 1991 CHF 75o.ooo’ 9.2001 6.00% 1989 9.1999 CHF 2oo.ooo’ 10.2001 5.79% 1997 USD 1,496.072 2 1.2002 7.00% 1992 CHF 100.060 2.2002 7.50% 1991 CHF 75.000’ 5.2002 6.75% 1992 CHF 5o.ooo 3.2003 3.50% 1993 CHF 75.OixJ’ 3.2003 3.50% 1993 CHF 125.000 ’ 4.2003 2.00% 1996 USD 73.501 J 9.2003 6.25% 1993 USD 2oo.ooo’ 3 11.2003 6.13% 1993 DEM 8oo.ooo’ 3 1989 CHF 159.060 ’ . 2.2004 5.00% 2.1999 4.2004 4.38% 1996 CHF 2oo.ooo 11.2004 8.50% 1994 USD 3oo.ooo’ 3 12.2004 6.13% 1994 DEM 100.000’ ’ 3.2005 5.75% 1995 CHF 225.000’ 11.2005 2.00% 1997 USD 100.000 3 11.2005 2.00% 1997 USD 200.000 3 6.2006 7.21% 1996 USD 237.500’ ’ 6.2006 6.84% 1997 USD 95.000’ ’ Perpetual 790% 1997 5.2007 USD 500.000’ s perpekfal 6.50% 1997 6.2007 FFR 750.000’1 perpetual 6.50% 1997 6.2007 FFR 5oo.ooo’ ’ 7.2007 5.25% 1995 CHF 150.000’ 7.2007 5.25% 1995 CHF 100.000’ perpetual 4.38% 1997 7.2007 CHF 497.725’ ’ 2.2006 2.00% USD 250.000’ 5.2008 6.50% 1998 USD 2oo.ooo’ 5 perpetual 8.25% 1997 7.2OOQ GBP 150.000’ ’ 5.2010 5.75% 1998 DEM 415.000’ ’ 3.2016 5.00% 1986 3.2006 CHF 2oo.ooo’ Perpetu 7.74% 1997 7.2007 USD 100.000’ perpetual 4.51% 1998 12.2029 JPY 10,oco.ooo’ ’

42 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Additional information on the consolidated balance sheet

BONDS ISSUED BY SUBSIDIARIES Redemption Coupon Year of issue Currency Outstanding amount date in millions Credit Suisse First Boston Finance (Guernsey) ltd., Guernsey 2.2000 0.00% 1990 CAD 500.000 10.2002 0.00% 1992 DEM 500.000 Credii Suisse First Boston International (Guernsey) Ltd., Guernsey 3.1999 various 1998 USD 00.000 3.1999 various 1998 USD 05.000 3.1999 5.28% 1998 USD 100.000 4.1999 various 1998 USD 29.997 7.1999 various 1998 USD 325.000 10.1999 various 1998 USD 25.000 4.2ooO 5.93% 1998 USD lO.OM) 4.2001 4.34% 1998 DEM 9.500 4.2001 4.23% 1998 DEM 2.850 8.2003 2.67% 1998 CHF 19.000 Credit Suisse First Boston Finance B. V., Amsterdam 3.1999 6.07% 1993 USD 250.000 3.1999 5.25% 1993 CHF 150.000 9.1999 6.05% 1992 USD 58.000 9.1999 6.05% 1992 USD 05.000 2.2000 7.50% 1992 NLG 350.000 6.2000 7.75% 1993 LUF 2,oOO.oOO ’ 7.2003 6.07% 1993 LUF 3,oOO.ooo ’ Undated 5.69% 1906 USD 150.000 5.2003 5.88% 1993 USD 200.000 ’ 8.2003 5.50% 1993 USD 200.000 ’ Credit Suisse First Boston (Cayman) Ltd., Cayman Islands 6.2000 variable 1997 USD 1.162 6.2000 10.00% 1997 USD 2.003 7.2000 10.00% 1997 USD 4.039 8.2000 10.00% 1997 USD 3.999 9.2000 10.00% 1997 USD 10.254 10.2000 variable 1997 USD 10.011 5.2001 variable 1998 USD 25.000 Credit Suisse First Boston Inc., New York 1.1999 5.66% 1994 USD 8.000 ’ 6.1999 9.25% 1992 USD 170.000 ’ 7.1999 5.19% 1997 USD 1.750 9.1999 5.56% 1998 USD 149.843 10.1999 6.39% 1992 USD 5.000 10.1999 7.23% 1992 USD 5.000 ’ 10.1999 5.86% 1992 USD 10.000 1.2000 5.32% 1995 USD 35.ooo 1.2000 5.32% 1996 USD 15.000 1.2000 5.36% 1997 USD 25.000 1.2000 6.00% 1994 USD 25.000 ’ 3.2000 6.15% 1993 USD 9.995 5.2000 5.60% 1995 DEM 147.000 ’ 11.2000 5.72% 1994 PTE 32.335 ’ 2.2001 5.92% 1996 DEM 136.147 ’ 3.2001 5.75% 1996 USD 5.000 ’ 4.2001 5.09% 1996 USD 2o.ooo ’ 4.2001 5.79% 1992 USD 200.000 ’ 5.2001 5.50% 1996 USD 6.500 6.2001 5.79% 1994 USD 52.000 ’

43 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Additional information on the consolidated balance sheet

Redemption Coupon Year of issue Currency Outstanding amount date in millions 8.2001 5.88% 1996 USD lO.oc0 ’ 8.2001 5.66% USD 2.000 ’ 8.2001 5.76% 1995 FFR 156.000 8.2002 6.07% 1994 USD 5.000 ’ 9.2002 7.83% 1992 USD 3.m 1.2003 6.64% 1993 USD 5.008' 2.2003 6.50% 1993 USD 5.000 ’ 2.2003 6.45% 1993 USD 85.000 4.2003 6.07% 1992 USD 7.000 4.2003 5.69% 1993 USD 20.992 ’ 2.2004 6.08% 1994 USD 15o.ooo ’ 3.2004 8.95% 1992 USD 10.696 3.2004 8.75% 1992 USD 41.903 3.2004 5.71% 1994 USD 164.788 ’ 4.2004 5.96% 1995 DEM 106.686 ’ 4.2004 9.30% 1992 USD 100.000 10.2005 5.60% 1993 USD 200.000' 11.2005 6.95% 1995 USD 4.975 ’ 5.2006 6.09% 1996 USD 264.950' 2.2007 5.98% 1995 USD 15.OcQ' 2.2007 5.95% 1995 USD 15.000 ’ 2.2007 5.98% 1995 USD 15.000 ’ 2.2007 5.95% 1995 USD 15.000 ’ 2.2013 8.50% 1993 USD 3.Oin 4.2018 7.71% 1993 USD 5.230 ’ various 6.50% various USD 6.386' various variable 1993 USD 143.286' various 1993-95 8.588 ’ various variable 1995196 USD 66.371 ’ Credit Suisse Financial Products, London 1999 various 1996-1997 CHF 78.200 1999 various 1995 1996 DEM 71.ooo 11.1999 1.25% 1994 59.500 1999 various 1998 HKD 1,210.000 1999 various 1996-1997 ITL 17,OOO.OOO 1999 various 1996-1998 JPY 60,020.760 7.1999 1.25% 1994 NLG 25.000 1999 1 .oo% 1998 PTE 2,370.OOO 1999 various 1997-1998 SEK 325.000 1999 various 1992-1998 USD 480.900 4.1999 7.75% 1992 XEU 47.Otxl ’ 2ooo various 1997-1998 DEM 41.coO 12.2ooo 3.00% 1995 FIM 25.000 11.2ooo 7.50% 1997 GBP 25.000 4.2000 10.25% 1998 GRD 1o,ooo.c0J 2000 various 1997-1998 ITL 109,ooo.ooo moo various 19951998 JPY 22,417.316 moo 0.00% Zero Coupon Notes 1994-l 998 NLG 55.890 2ooo variable Floating Rate Notes 1997-1998 PTE 6,750.OOO 2cQO various 1998 SEK 197.ooo 2ooo various 1992-1998 USD 453.045 6.2001 6.50% 1997 BEF 100.000 2001 various 19961998 DEM 100.021 2001 various 1997-1998 ITL 188,OOO.OOO 2001 1995-1998 JPY 18,816.800

44 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Additional information on the consolidated balance sheet

Redemption Coupon Year of issue Currency Outstanding amount date in millions 9.2001 0.00% Zero Coupon Notes 1998 NLG 17.650 10.2001 variable Floating Rate Notes 1998 PTE 1,500.000 2.2001 various 1998 SEK 150.000 2001 various 1995-l 998 USD 628.590 8.2001 variable Floating Rate Notes 1991 USD 108.835 ’ 5.2001 variable 1994 XEU 15.000 10.2002 variable Floating Rate Notes 1997 CHF 75.ooo ’ 2002 various 1996- 1998 DEM 70.000 12.2002 0.00% Zero Coupon Notes 1997 ITL 20,000.000 ’ 2002 various 1996-1998 JPY 88,530.OOO 2002 various 1992 LUF 3,500.000 ’ 2002 various 1996-l 998 USD 183.366 7.2002 0.00% Zero Coupon Notes 1997 XEU 10.000 8.2003 various 1998 ATS 400.000 6.2003 8.00% 1997 BEF 200.000 11.2003 0.00% Zero Coupon Notes 1995 FRF 25.ooO 2003 various 1997-1998 GBP 39.200 4.2003 0.00% 1998 GRD 14,393.OOO 2003 various 1997-1998 ITL 139,OOO.OOO 2003 various 1997-1998 JPY 14,400.OOO 3.2003 7.63% 1993 LUF 1,500.ooo ’ 2003 various 1994-1998 USD 852.656 2003 various 1998 XEU 11.950 12.2004 0.00% Zero Coupon Notes 1994 CHF 13.000 ’ 2004 variable 1997 DEM 25.000 2004 various 1996-l 997 ITL 430,ooo.ooo 2004 0.00% Zero Coupon Notes 1997-1998 ITL 105,000.000 ’ 2004 various 1995-l 998 JPY 5,500.ooo 2004 0.00% Zero Coupon Notes 1997 NOK 110.000 2004 various 1995-l 998 USD 216.200 6.2004 8.50% 1997 XEU 2.600 12.2004 0.00% 1994 XEU 10.000 ’ 6.2005 8.25% 1995 BEF 2oo.ooo ’ 9.2005 variable Floating Rate Notes 1995 DEM 46.895 ’ 12.2005 0.00% Zero Coupon Notes 1997 FRF 200.000 2005 various 1997-1998 ITL 406,ooo.ooo 2005 various 1997-1998 ITL 70,000.ooo ’ 2005 various 1996-l 998 JPY 7,200.OOO 12.2005 0.00% Zero Coupon Notes 1997 NOK 160.000 4.2005 variable Floating Rate Notes 1998 PTE 5oo.oca 2005 0.00% Zero Coupon Notes 1997 PTE 9,362.045 ’ 2005 various 1995-l 998 USD 51‘286.050 2006 variable 19961998 DEM 19.336 ’ 11.2006 0.00% Zero Coupon Notes 1997 FIM 50.000 2.2006 9.13% 1998 GBP 4.500 2006 various 1997-1998 ITL 347,980.ooo 2006 0.00% Zero Coupon Notes 1998 ITL 30,OQO.000 ’ 12.2006 5.70% 19Q6 JPY 500.000 2006 various 1995-l 998 USD 118.050 7.2006 0.00% Zero Coupon Notes 1994 USD 4o.ooo ’ 2007 various 1996-1997 CHF 120.000 2007 various 1997 DEM 70.000 5.2007 variable Floating Rate Notes 1997 DEM ao.ooo ’ 11.2007 0.00% Zero Coupon Notes 1997 FIM 5o.ooo 2007 various 1997 ITL 113,600.000

45 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Additional information on the consolidated balance sheet

Redemption Coupon Year of issue Currency Outstanding amount date in millions 2007 various 1996-1998 JPY 45,200.OOo 2007 various 1996-1998 USD 203.500 7.2007 variable Floating Rate Notes 1997 USD 4o.ooo ’ 2008 various 1998 DEM 155.ooo 2008 0.00% Zero Coupon Notes 1993-1994 MM 152.753 ’ 2008 various 1997-1998 ITL 118,000.000 2.2008 variable 1998 ITL 100,000.000 ’ 2008 various 1997-1998 JPY 3,300.OOO 2008 various 1998 PTE 2,500.OOO 2008 various 1995-1998 USD 302.961 2009 various 1997-1998 DEM 108.ooO 2009 0.00% Zero Coupon Notes 1994-1996 DEM 212.579 ’ 5.2009 variable 1997 ITL 17,OOO.cKIo 2009 various 1996-1997 JPY 3,lOO.OOO 2009 various 1997-1998 USD 18.ooO 1.2010 0.00% Zero Coupon Notes 1997 DEM 20.000 6.2010 0.00% Zero Coupon Notes 1997 DEM 59.942 ’ 10.2010 0.00% 1998 ITL 27,500.OOO 3.2010 O.OO% Zero Coupon Notes 1995 ITL 30,ooo.coo ’ 2010 various 1997-1998 USD 109.000 2011 various 1993-1998 USD 113.275 6.2012 0.00% Zero Coupon Notes 1997 DEM 35.ooo 4.2012 variable 1998 ITL 12,OoO.OOO 4.2012 8.00% 1998 ITL 20,000.cOO ’ 2012 various 1996-1998 USD 29.cQo 4.2013 variable 1998 ITL 27,500.OOO ml3 various 1998 JPY 13,600.000 12.2014 0.00% Zero Coupon Notes 1994 ITL 250,000.ooo ’ lo.2014 0.00% Zero Coupon Notes 1995 USD 29.ooo 9.2016 variable Floating Rate Notes 1998 USD 19.850 9.2017 0.00% Zero Coupon Notes 1997 DEM 15.000 5.2017 variable 1997 JPY 5,OOO.OOo 9.2017 0.00% Zero Coupon Notes 1997 PTE 1,700.cKJo 2.2018 6.00% 1998 DEM 3o.ooo ’ 2018 variable 1997-1998 ITL 74.000.000 2018 various 1998 JPY 2,100.OOO 1.2020 variable Floating Rate Notes 1996 CAD 162.496 9.2021 variable 1996 JPY 10.000.000 12.2021 0.00% Zero Coupon Notes 1995 USD 81.281 ’ lo.2022 0.00% Zero Coupon Notes 1997 DEM 40.000 2.2025 O.OO% Zero Coup Notes 1998 USD 20.000 12.2028 10.76% 1998 USD 133.407 perpetual various 1995-1998 CHF 130.000 ’ perpetual various 1998 DEM 610.000 ’ 1995 GBP 100.000 ’ PerpetlJal 10.25% 1998 KL 5o.ooo.o@3 ’ Perpetual variable perpetual variable 1993-1995 JPY m,oco.om 1 1995-1997 NLG 60,ooo.ooo ’ perpetu~ various perpetual 0.00% 1998 PTE 1,250.OoO ’ 1992-1997 USD 220.000 ’ perpet~l variable 1 Subordinated bonds. 2 Credit linked notes issued by Credit S&se First Boston Guernsey branch. 3 hued by Credit Suisse F&t Boston London branch. 4 issued by Credit Suisse First Boston Nassau branch. s lseued by Credii Suisse First Boston New York branch.

46 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Additional information on the consolidated balance sheet

ReleZ?el charges Recoveries, to consoli- Wrfie-backs endangered Net charges detsd income credited to Change interest, to consoli- statement consolidated VALUATION ADJUSTMENTS Specific Reclassift- consolidated currency dated income (extra- ikvxme AND PROVlSIONB/ Total write&wns cations’ companies differences statement ordinary) statement Total RESERVES AGAINST 31 .12.97 31.1298 GENERAL BANKING RISKS CHF m CHF m CHF m CHF m CHF m CHF m CHF m CHF m CHFm Valuation adjustments and provisions for default risks 1,081 -308 -17 0 -32 1,595 0 0 2219 Valuation adjustments and provisions for other risks 536 -185 324 -23 -m 0 0 -49 583 Provisions for restructuring 356 -269 0 0 -9 0 50 0 128 Provisions for taxes and deferred taxes 1,085 -1,266 -55 -71 181 608 = 0 0 482 Other provisions 448 363 80 -5 -10 318 20 0 488 Total wrttexiowns and provisions 3,506 -5391 332 -99 110 2321 70 -49 4,000 Lees direct chargeoffs against specific assets -507 -2220 Total wrtte-downs and provi- sions shown in balance sheet 2-9 1,780 v--- Reserves against general banking risks 412 0 0 0 0 0 -412 0 0 ---

’ CHF -55 million for deferred income tax due to BZW retention award: CHF 128 million relates to a reclassification of reserves for the,ljaui$ation of a real estate subsidiary; CHF -34 million relates to a reclassification of credit riike to trading securities; CHF 115 million relates to various reclassrflcatlons from other liabilities. CHF -28 million relates to a re&&ficetion from default risks to financial investments; CHF 186 million relates to a reclassification of trading securities to default risks. ’ CHF 617 million deviation to income statement due to deferred tax assets that are not included in the ofovisions.

47 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Additional information on the consolidated balance sheet

Sight deposits Callable Maturity Total -- MATURITY STRUCTURE OF within within over 1 to CURRENT ASSETS 3 months 3-12 months 5 years over 5 years No maturity AND BORROWED FUNDS CHF m CHF m CHF m CHF m CHF m CHF m CHF m CHF m Current assets Cash 1,179 1,179 Money market papers 0 5 15,706 3,153 0 0 18,864 Due from banks 8,761 3,117 122,525 3,851 1,619 123 - 139,996 Due from customers 6,174 993 44,687 4,929 4,164 1,989 62,936 Mortgages 0 44 776 507 4,049 1,870 7,246 Securities and precious metals trading portfolio 100,964 - 100,964 Finenciel investments 2,608 0 3,278 969 624 1,392 1,323 10,194 Total wrraot assets December 31,1998 -4,159119,686 186,972 13,409 10,456 5,374 1,323 341,379 December 31.1997 117,295 3,199 220,255 26,622 15,702 4,430 1,043 388,546 -- Borrowed funds Liabilities in respect of money market peper 0 259 11,137 1,960 6,417 162 19,935 Due to banks 54,012 860 123,856 6,798 1,131 65 - 186,722 Due to customers in savings and investment deposits 0 1,922 112 0 0 0 2,034 Due to customers, other deposits 10,422 484 59,900 11,258 2,917 335 85,316 Bonds and mortgsge-backed bonds 1,632 2,962 17,381 12,902 34,877 Total borrowed funds December 31,1998 64,434- 3,525 196,637 22,978 27,846 13,464 - 328,884 December 31,1997 57,765 6,457 242,736 32,043 25,015 12,163 - 376,179 --

CLAIMS ON AND LlABlLlTlES TO AFFlLlATED COMPANIES, 31.12.98 31.12.97 Change AND LOANS TO MEMBERS OF THE BANK’S GOVERNING BODIES CHF m CHF m CHF m Claims on affiliated companies’ 7,796 6,438 1,358 Liabilities to aftiliatad companies’ 31,866 29,648 2,218 Loans to members of CSFB’s governing bodies’ 7 0 7

1 Affiliated companies are entities which are not subsidiaries of Credit S&se First Boston but which are grouped together under unitary menegercent within the organisation of Credit Suisse Group. s Loans to members of the bank’s governing bodies’ include all claims on Members of the Board of Directors, Executive Management and the statutory auditors and on any companies controlled by thsnt. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Additional information on the consolidated balance sheet

Minority interests Total Total i 998 is98 i 998 1997 Change SHAREHOLDER’S EQUITY CHF m CHF m CHF m CHF m CHF m Beginning shareholder’s equity Share capital 3,149 3,149 3,149 0 Capital reserves 4,307 4,307 4,307 0 Retained earnings 1,030 1,030 2,627 -1,597 Minority interests in shareholder’s equity 1,185 1,185 881 304 Reserves against general banking risks 412 412 412 0 Consolidated net profit 1,214 1,214 -1,705 2,919 Total beginning shareholder’s equity as of January 1,1998/97 10,112 1,185 11,297 9,671 1,626 Other changes to/transfer from reserves -412 -412 0 -412 Capital increase Capital increase by Credit Suisse Group 111 111 0 111 Minority investments in subsidiaries 656 656 290 366 Share premium on capital increase 892 a92 0 892 Payments Dividend -850 -850 0 -850 Paid by subsidiaries to minority interests -73 -73 -114 41 Foreign currency translation differences -202 -75 -277 109 -386 Changes in scope of consolidation Transfer of subsidiary to Credit Suisse retroactively to January 1, 1997 0 0 21 -21 Consolidated net loss/profit -1,020 -1,020 1,214 -2,234 Net profit minority interests 24 24 166 -82 Total shareholder’s equity as of December 31,1998/97 8,631 1,717 10,348 11,297 -949

Share capital 3,266 3,260 3,149 111 Capital reserves 5,268 5,268 4,307 961 Retained earnings 1,123 1,123 l,O= 93 Minority interests in shareholder’s equity including net loss/profit 1,717 1,717 1,185 532 Reserves against general banking risks 0 412 -412 Consolidated net loss/profit -1,020 -1,020 1,214 -2,234

’ CHF 1,409 million (1997: CHF 792 million) represents perpetual noncumulative non voting preferred shares held by Credit Suisse Group as direct investments in subsidiaries of Credit S&se First Boston.

Total Total 1998 1997 Components of Tier 1 capital CHF m CHF m Shareholder’s equity 10,348 11,297 Dividend 1998/l 997 - 240 - 880 Deductions - 578 0 Total Tier 1 capital 9,529 10,447

49 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Additional information on the consolidated balance sheet

31.12.98 31.12.97 BREAKDOWN OF ASSETS AND LIABILITIES Switzerland Abroad Switzerland Abroad SWrrZERLAND AND ABROAD (BY LOCAllON OF ASSETS) CHF m CHFm CHF m CHF m Assets Cash 1,021 158 999 l,o- Money market papers 1,562 17,302 1.488 14,647 Due from banks 8,217 131,779 8,695 135,297 Due from customers 1,454 81,482 3,602 103,015 Mortgages 51 7,195 55 7,109 3acurities and precious metals trading portfolio 10,500 W-J 10,108 92,277 Financial investments 454 9,740 759 9,245 ’ Non-consolidated participations 113 332 102 170 Tangible fixed assets 2,686 1,= 3,389 1,180 Intangible assets 0 579 0 0 Accrued income and prepaid expenses 511 8,371 491 5,398 Other assets 6,367 43,509 8,247 45,371 ’ rowI. AsErs 32,936 370,786 38,135 414,759

Liabilities and shareholder’s equity Liabilities in respect of money market paper 429 19,506 436 17,313 Due to banks 31,609 155,113 22,756 163,844 Due to customers, savings and investment deposits 1,925 109 2,020 275 Due to customers. other deposits 26429 58,887 32,133 82,353 Bonds and mortgagebacked bonds 2,761 32,116 3,256 31,741 Accrued expenses and deferred income 865 8,372 409 7,822 Other liabilities 6,181 47,272 6.033 48,155 Valuation adjustments end provisions 241 1,= 600 2,499 Total Ii&Sties s- 322,914 67,595 374,002 Reserve against general banking risks 0 0 412 0 Shareholder’s equity (excluding minority interests pie consolidated net loss/profii) 3,558 6,093 2,951 5,635 Minority interests in shareholder’s equity 10 1,683 10 1,069 Consolidated net loss/profit 885 -1,681 329 991 of which mhority i&rests 1 23 1 105 Total sharahol&r’s equi!y 4,253 s,OS5 3,602 7,695 TOTAL UASllJTlE6 AND SHAREHOLDER’SEQUITY 74,693 329,009 71,197 381,697

’ Reclassification of certain assets from other assets to financial investments amounting to CHF 247 million to be consistent with the current year.

50 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Additional information on the consolidated balance sheet

GEOGRAPHICAL ANALYSIS OF ASSETS 31.12.98 31.12.97 Change (BY LOCATION OF ASSEfS) CHF m % of total CHF m % of total CHF m Switzerland 32,938 8.2 38,135 8.4 -5.193

EU’ 125,114 31 .o 127,274 20.1 -2,160 USA 145,255 35.9 167,533 37.0 -22,276 Canada 2,249 0.6 2,870 0.6 -621 Japan 55,848 13.8 37,369 6.3 10,479 Other industrial countries’ 7,135 1.8 9,985 2.2 -2,856 Financial centres outside industrial countries 12,069 3.0 33,077 7.3 -21.006 of which Hong Kong ?, 678 0.4 3,614 0.8 _ 1,936 Singapore 2,= 0.7 7,932 1.7 -5,299 Other’ 7,758 7.9 21,531 4.8 - 13,773 Oil-producing countries’ 4,333 1.1 5,902 1.3 -1,569 Newly industrialised countries’ 12,297 3.0 15,045 3.3 -2,746 Eastern Europe and Commonwealth of Independent States@ 4,633 1.1 12,946 2.9 -8,313 Other developing countries’ 1433 0.5 2,758 0.6 -925 Total assets outside Switzerland 370,766 91.8 414,759 91.6 -43,993

TOTAL ASSETS 463,702 100.0 452,894 100.0 -49,192

The above analysis is based on the location of asset and doss not take any collateral w hedges through structured off-balance sheet transactions into account. Market and credit risks can therefore not be judged based on the above schedule.

Countries not listed separately above in which assets amount to more than CHF 100 million:

1 Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain, Sweden, United Kingdom. 2 Australia, Liechtenstein, New Zealand, Norway, Sooth Africa. J Aruba-Curacao (Nethad. Antilles), Bahamas, Bermuda. Cayman Isfands, TrinidadrTobago. 4 Bahrain, Indonesia. Iran, Kuwait, Mexico, Saudi Arabia. s Argentina, Brazil, Chile, Colombia, Egypt, Israel, Malaysia, Philippines, South Korea, Taiwan, Thailand, Turkey. s Czech Republic, Hungary, Pohnd, Romania, Russian Federation, Turkmenistan, Ukraine. 7 China (excl. Hong Kong), India.

51 ~ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS I Additional information on the consolidated balance sheet

CHF USD Other Currencies Total CURRENCY STRUCTURE . 298. 31.12.97 31.12.98 31.12.97 31.12.98 31.12.97 31.12.98 31.12.97 OF THE BALANCE SHEET CHF m CHF m CHF m CHF m CHF m CHF m CHF m CHF m Ass&s cash 934 792 72 880 173 377 1,179 2,049 Money market papers 1,567 1,507 7,939 7,595 9,358 7,033 18,864 16,136 Due from banks 14,305 12,370 58,641 62,108 67,056 69,514 139,996 143,992 Due from customers 2,862 6,316 45,456 53,677 14,818 46,824 62,936 106,817 Mortgages 48 57 6,878 6,762 320 345 7,246 7,164 Securities and precious metals trading portfolio 12,745 21,189 41,023 39,287 47,196 41,909 160,984 102,385 Financial investments 94.8 916 3,750 3,647' 5,496 5,441 10,194 10,004 Non-consolidated participations 131 102 207 113 107 57 445 272 Tangible fixed assets 2,617 2,771 801 663 1,123 935 4,541 4,669 Intangible assets 0 0 444 0 135 0 579 0 Accrued income and prepaid expenses 808 636 1,407 2,752 4,667 2,501 6,882 5,889 Other assets 7,481 10.518 9,515 42,388= 32,880 712 49,876 53,618 TOTAL ASSETS v 57,174 176,133 220,072 183,323 175,648 403,702 452,894 ---

Liabilities and shareholder’s equity Liabilities in respect of money market paper 262 15 14= 15,304 1,328 2,432 19,935 17,751 Due to banks 32,090 20,163 72,241 83.078 82,391 103,359 186,722 206,600 Due to customers, savings and investment deposits 1,928 2,024 104 261 2 10 w34 2,295 Due to customers, other deposits 17,091 17,746 48,719 52,533 21,506 44,257 85,316 114,536 Bonds and mortgage-backed bonds 3,511 4,050 16,794 19.283 14,572 11,664 34.877 34,997 Accrued expanses and deferred income 1,011 631 4,286 4,799 3,940 2,801 9,237 8,231 Other liabilities 6283 13,469 8,363 30,223 36,807 10,496 =,- 54,188 Valuation adjustments and provisions 229 527 1,238 1,899 313 573 1,780 2,999 Tots1 liabilities’ 64,405 58,625 168,090 207380 760,859 175,592 m,s I441,597 Reserve against general banking risks -412 0 0 0 0 0 0 412 Shareholder’s equity (excluding minority interests pre consolidated net loss/profit) s= 2,851 4,703 4,743 1,= 892 9,651 8,466 Minority interests in shareholder’s equity 10 10 1,662 1,069 21 0 1,693 1,079 Consolidated net loss/profit 885 329 -1,845 817 164 174 -996 1,320 Of which miiri(y interests 1 1 86 105 -12 0 24 0% Total shareholder’s equi&’ 4,253 3,602 4,520 6,629 1,575 7,066 10,348 11,297 TOTAL watuLm= ANDsHAREHoLDa? ‘sEoum 68,658- 62,227 172,610 214,009 162,434 176,658 403,702 462,894

1 Currency breakdown excludes impact of off-balance sheet transactions. 2 Based upon functional currency of reporting unit. s Reclassiivzation of certain assets from other assets to financial investments amounting to CHF 247 million to ba consistent with the current year.

52 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Additional information on the consolidated balance sheet

FURTHER DETAILS 31.12.98 31.12.97 Change ON SELECTED BALANCE SHEET ITEMS CHF m CHF m CHF m

Financial leasing - capital goods’ 188 281 -93

Other assets Positive replacement value of derivatives W= 50,946 -4,561 of which positive replacement value of trading derivatives 45,816 50,739 -4,923 of which positive replacement value of other derivatives 569 207 362 Transitory accwals and deferrals 1,838 1,257 581 Compensation account for adjustments to carrying value having no income effect 0 76 -76 Other 1,653 1,339 = 314 Total other assets 49,876 53,618 -3,742

Other liabilities Negative replacement values of derivatives 49,502 50,650 -1,146 of which negative replacement value of trading derivatives 49,384 50,603 -1,219 of which negative replacement value of other derivatives 118 47 71 Transitory accruals and deferrals 708 1,290 -582 Compensation account for adjustments to carrying value having no income effect 196 98 98 Other 3,947 2,150 897 Total other liabilities =A= 54,188 -735

Debt securities Money market paper 19,935 17,751 2,184 Bonds and mortgage-backed bonds 34,877 34,997 -120 Total debt securities 54,812 52,748 2,064

Claims on associated companies and long-term holdings Due from banks 0 37 -37 Due from customers 0 28 -28 Total claims on associated companies and long-term holdings 0 85 -65

Liabilities in respect of associated companies and long-term holdings Due to customers 0 15 -15 Total liabilities in respect of associated companies and long-term holdings 0 15 -15

1 Shown in the balance sheet under ‘Due from customers’. 2 Reclassification of certain assets from other assets to firancial investments amounting to CHF 247 million to be consistent with the current year.

53 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Additional information on the consolidated balance sheet

FURTHER DETAllS 31.12.98 31.12.97 Change ON SELECTED BALANCE SHEET ITEMS CHF m CHF m CHF m Subordinated balance sheet items Assets subject to subordination clause Due from banks 11 12 -1 Due from customers 0 106 -106 Securities holdings 2,948 2,280 666 of which trading portfolio 2,643 1,980 663 of which financial investments 303 300 3 Total assets subject to subordination clause 2,957 2,398 659 Liabilities subject to subordination clause Due to banks 0 270 -270 Due to customers 240 313 -73 Bonds and mortgage-backed bonds 13,023 12,682 341 Total liabilities subiect to subordination clause 13,263 13,265 -2

As of December 31 STAFF NUMBERS 1998 1997 America 5,816 4,932 Europe 7,493 6,539 of which Swiherand 1,458 1,574 Asia/Pacific 2,362 1.730 Total 15,671 13,201

54 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Additional information on the consolidated off-balance sheet business

1998 1997 Change OFF-BALANCE SHEET BUSINESS CHFm CHF m CHF m Contingent liabilities Credit guarantees in the form of aval, guarantee and indemnity liabilities 10,402 14,425 -4,023 less subparticipations allocated -2,597 -4,763 2,166 Bid bonds, delivery and performance bonds, letters of indemnity, other performance-related guarantees 3,029 3,816 -787 less subparticipations allocated -379 -375 -4 Irrevocable commitments in respect of documentary credits 2,210 3,488 -1,278 less subparticipations allocated -11 -424 413 Other continaent liabilities 1,744 3,718 -1,974 Total contingent liabilities 14,398 19,885 -5,487

Irrevocable commitments 83,252 62,786 20,466

Call liabilities 1 4 -3

Confirmed credits (Acceptance credits) 262 473 -211

Fiduciary transactions Fiduciary placements with third-party institutions 19-j 3,648 -2,192 Fiduciary placements with affiliated banks 0 4 -4 Fiduciary loans with and other fiduciary transactions 7,064 5934 4,860 Total fiduciary transactions 8,520 5,856 2,664

Gross positive replacement value Credit equivalent’ Remaining life 31.12.98 Remaining life 31.12.98 < 1 year l-5 years > 5 years Total < 1 year l-5 years > 5 years Total OPEN DERIVATIVE CONTRACTS CHF bn CHF bn CHF bn CHF bn CHF bn CHF bn CHF bn CHF bn Maturity Total interest rate instruments 5.1 27.7 41.0 73.8 5.1 31.1 48.6 84.8 Total foreign exchange 20.8 6.1 2.6 29.5 28.2 10.3 6.4 44.9 Total precious metals 0.7 0.6 0.1 1.4 1.2 0.9 0.3 2.4 Total equities/indices 4.0 9.0 0.3 13.3 5.5 10.5 1.0 17.0 Total other 0.2 0.1 0.0 0.3 0.2 0.2 0.0 0.4 Total 30.8 43.5 44.0 118.3 40.2 53.0 56.3 149.5

Contract volume Replacement value’ Credit equivalent’ 31.12.98 31.12.98 31.12.98 OREN DERIVATIVE CONTRACTS’ CHF bn % CHF bn % CHF bn % Internal bank rating* AAA 444.9 10.2 6.4 15.6 9.0 12.5 AA 1.856.9 42.8 14 34.2 24.6 34.1 A 1221.0 28.2 10.1 24.7 22.2 30.8 BBB 646.3 14.8 8.5 20.8 10.7 14.8 BB or lower 173.4 4.0 1.9 4.7 5.6 7.8 Total 4,336-S 100.0 40.9 100.0 72.1 100.0

1 OTC contracts, exduding OTC option sales. 2 Using Standard & Poor’s rating structure, and taking collaterals into consideration. where applicable. 3 Taking account of legally enforceable netting agreements and after deduction of CHF 4.4 billion of assets pledged as security. 4 Potential exposures: Positive replacement values plus add-on%.

55 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Additional information on the consolidated off-balance sheet business

Contract volume’ Gross replacement values (Rv) Remaining life 31.1298 31.12.97 31.12.98 31.12.97 - - Positive Negative Positive Negative OPEN DERlVATfVE .c 1 year l-5 years > 5 years Total Total RVS Rv5 RVS RV CONTRACTS CHF bn CHF bn CHF bn CHF bn CHF bn CHF bn CHF bn CHF bn CHF bn Interest rate instruments OTC FRAs and other forward contracts 158.9 24.4 21.8 205.1 194.1 0.3 0.3 0.3 0.2 swaps 486.0 1,099.g 798.5 2J84.4 1,546.l 85.0 60.4 39.3 38.0 Options bought 174.4 143.4 108.4 426.2 266.3 8.5 5.1 Options sold 206.0 163.9 113.2 467.1 331.3 8.8 5.0 Traded Futures -153.0384.2 -537.4 0.2 417.9:-- Options 626.1 7.6 0.0 533.7 218.9 Total interest rate instruments -1,597.22,034.6 -4,673.91,042.l -73.82,973.6 69.5- 44.7 43.2 --P-P---- Foreign exchange contracts OTC Forward contracts”’ 776.4 12.8 1.7 790.9 632.1 14.8 17.0 18.8 17.2 Swaps' 60.1 111.1 69.3 240.5 212.8 9.2 11.5 9.2 10.3 Options bought 155.7 8.5 0.8 166.0 275.1 5.5 5.3 Options sold 164.9 7.1 1.8 173.8 264.3 6.1 5.6 Traded Futures -0.0 1.4 -1.6 0.2 0.4--y Options 0.3 0.0 0.0 0.3 0.1 Total foreign exchange contracts -139.51,168.8 T- 1,372.l -29.51,374.8 -TzF- 33.3 33.1 ~-~~~~~-~ Precious metal contracts OTC Forward contracts’ 13.2 4.5 1.1 18.8 25.8 0.9 1.1 1.5 2.0 Options bought 4.8 1.1 1.2 7.1 3.0 0.5 0.5 Options sold 4.0 3.1 1.1 8.2 5.5 0.9 0.7 Traded Futures -0.0 0.2 o.o- 0.2 1.9---y Options 0.4 0.0 0.0 0.4 0.0 Total precious metal contracts -8.7 22.6 3.4- 34.7 36.2- 1.4 2.0- '2.0 2.7

Equity/index contracts OTC Forward contracts 2.7 0.4 0.0 3.1 1.1 0.3 0.3 0.1 0.0 Options bought 47.2 42.8 3.1 93.1 77.4 13.0 10.1 Options sold 51.0 39.8 5.4 36.2 123.2 14.7 10.1 Traded Futures -0.7 34.3 o.o- 35.0 17.77-- Options 49.8 2.2 0.0 52.0 49.1 Total equity/index contracts -85.9189.0 8.5- 279.4 x- 13.3 15.0- 10.2 10.1 ------Other contracts OTC Forward contracts 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Options bought 0.3 1.8 0.2 2.3 1.6 0.3 0.1 Option sold 0.6 1.1 0.0 1.7 1.5 0.1 0.0 Traded Futures -0.3 8.2 -8.5 0.0 9.5:-- Options 0.0 0.1 0.0 0.1 0.6 Total other contracts -3.3 9.1 0.2- 126 13.2- 0.3 0.1- 0.1 0.0 TOTAL -- q410.1 --7$Ez-i,i2ao ii83 121.2- So.3 89.1 of w&h OTC conttzc~ volume 2,305.Z 1,670.7- 1r127.6 -q950.2----s;~m.s Replacement value teklng lnte censideretie~~enforceable~e~ -T&482- 47.8 5 48.7 ----

1 Gross vdume of purchases and sales @rcprietary and customer transactions). 2 Including outstanding spot transactions. 3 Of which up to one month: CHF 354.7 billion. 4 Crosscurrency interest rate swaps. 5 No replacement values are shown for traded derivatives (futures and traded options) subject to daily margining raquiremenls. Total positive and negative replacement values on tradsd derivatives amount to CHF 1.1 billion and CHF 1.3 billion respectively. s Positive repkement value after deduction of CHF 4.4 billion (1997: CHF 3.1 billion) of assets @?dgsd as security.

56 REPORT OF THE GROUP AUDITORS TO THE ANNUAL GENERAL MEETING OF CREDIT SUISSE FIRST BOSTON, ZURICH

As Group auditors of Credit Suisse First Boston, we have audited the consolidated financial statements (consolidated balance sheet, consolidated income statement, consolidated statement of cash flows and notes to consolidated financial statements) for the year ended December 31, 1998. The consolidated financial statements are the responsibility of the Board of Directors. Our responsibilii is to express an opinion on these consolidated financial statements based on our audit. We confirm that we meet the legal requirements concerning professional qualification and independence.

Our audit was conducted in accordance with auditing standards promulgated by the profession in Switzerland and with the International Standards on Auditing issued by the International Federation of Accountants (IFAC), which require that an audit be planned and performed to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement. We have examined, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. We have also assessed the accounting principles used, significant estimates made and the overall consolidated financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements give a true and fair view of the financial position, the results of operations and the cash flows in accordance with Swiss accounting rules for banks and comply with the requirements of Swiss law. Furthermore, the consolidated financial statements comply with the European Union accounting directives applicable for banks, taking into consideration the deviations described in the notes to the consolidated financial statements. The financial review is in accordance with the consolidated financial statements.

We recommend that the consolidated financial statements submitted to you be approved.

KPMG Klynveld Peat Marwick Goerdeler SA

Brendan R. Nelson Peter Hanimann

Chartered Accountant Certified Accountant

Auditors in Charge

Zurich, February 26, 1999

57 58 FINANCIAL REVIEW

The Parent company’s results in 1998 were positive. Net operating income was CHF 3,132 million (CHF 74 million or 2.3% less than in 1997), gross operating profit was CHF 1,579 million (CHF 359 million or 18.5% less than in 1997) and profit before extraordinary items and taxes was CHF 1,124 million (CHF 149 million or 11.7% less than in 1997). Due to lower net extraordinary charges and lower taxes, net annual profit was CHF 1,187 million an increase of CHF 164 million or 16% more than in 1997.

The balance sheet has increased slightly from CHF 195.6 billion to CHF 204.0 billion.

At the Annual General Meeting of February 26, 1999, shareholders will be asked to approve the Board of Director’s proposed appropriation of retained earnings, which includes a dividend of CHF 240 million (CHF 7.35 per bearer and registered share).

59 INCOME STATEMENT PARENT COMPANY

Change to Change to INCOME AND EXPENDITURE Notes 1998 1997 1997 1997 FROM ORDINARY BANKING BUSINESS page CHF m CHF m CHF m % Results from interest business interest and discount income 7,701 6,546 1,155 17.6 Interest and dividend income from trading portfolio 321 331 -10 - 3.0 Interest and dividend income from financial investments 225 200 25 12.5 Interest expense -7,476 -6,330 -1,146 18.1 Net interest income 771 747 24 3.2 Results from commission and service fee activities Commission income from lending activities 236 223 13 5.8 Commission from securities and investment transactions 529 456 73 16.0 Commission from other services 65 35 30 85.7 Commission expense -65 -74 -11 14.9 Net commission and service fee income 745 640 105 16.4 Net trading income 65 1,067 1,098 -31 - 2.8 Other ordinary income Income from the sale of financial investments 130 14 116 828.6 Income from participations’ 389 753 -364 - 48.3 Real estate income 5 9 -4 - 44.4 Other ordinary income 64 42 22 52.4 Other ordinary expenses -39 -97 58 - 59.8 Net other ordinary income 549 721 -172 - 23.9

Net operating income 3,132 3,206 -74 - 2.3

Operating expenses Personnel expenses -785 -746 -39 5.2 Other operating expenses -768 -522 -246 47.1 Total operating expenses -1,553 -1,268 -285 22.5

Gross operating profit 1,579 1,938 -359 -18.5

NET ANNUAL PROFIT Gross operating profit 1,579 1,938 -359 - 18.5 Depreciation and write-downs on non-current assets -365 -103 -282 254.4 Valuation adjustments, provisions and losses 65 -90 -562 472 - 84.0

Annual profit before extraordinary items and taxes 1,124 1,273 -149 -11.7 Extraordinary income 65 352 47 305 648.9 Extraordinary expenses 65 -257 -164 -93 56.7 Taxes -32 -133 101 - 75.9

Net annual profit 1,187 1,023 164 16.0

1 CHF 240 million represents dividends on 1998 profit. declared and received in early 1999 (1997: CHF 90 million).

60 BALANCE SHEET PARENT COMPANY

Change to Change to 31.1296 31.12.97 31.12.97 31.12.97 ASSETS CHF m CHF m CHF m % Cash 1,139 1,777 -639 - 36.0 Money market papers 18,664 15,297 3,367 22.0 Due from banks 64,641 72,196 -7,555 - 10.5 of which securities lending and reverse repurchase agreements 18,250 24,602 -6,352 - 25.8 Due from customers 53,516 46,872 6,644 14.2 of which securities lending and reverse repurchase agreements 20,495 12,300 8,195 666 Mortgages 7,112 836 8,276 750.7 Securities and precious metals trading portfolio 21,864 16,478 5,376 32.6 Financial investments 7,623 7,161 462 6.5 Participations 4,679 4.197 482 11.5 Tangible fixed assets 2,605 zoo9 596 29.7 Accrued income and prepaid expenses 3,026 2,356 670 28.4 Other assets 19,140 26,405 -7,265 - 27.5 TOTAL ASSETS 203,988 195,584 8,414 4.3 Total subordinated claims 667 807 74 9.2 Total due from consolidatedpartic+ations and qualifiedshareholders -225 59,243 77,982 30.4

Change to Change to Notes 31.12.98 31.12.97 31.12.97 31.12.97 LIABILITIES page CHF m CHF m CHF m in % Liabilities in respect of money market paper 13,501 13,260 241 1.8 Due to banks 88,104 80,801 7,303 9.0 of which securities borrowing and repurchase agreements 18,394 8,023 10,371 129.3 Due to customers, savings and investment deposits 2,034 2,289 -255 - 11.1 Due to customers, other deposits 55,327 46,698 8,629 18.5 of which securities borrowing and repurchase agreements 75,322 9,530 5.792 60.8 of which borrowed mortgages 4604 0 6,604 Bonds and mortgage-backed bonds 66 12,693 14,567 -1,874 - 12.9 Accrued expenses and deferred income 5=3 2,135 708 33.2 Other liabilities 19,249 26,196 -6,947 - 26.5 Valuation adjustments and provisions 67 429 829 -400 - 48.3 Total liabilities 194,180 186,775 7,405 4.0 Reserves against general banking risks 67 0 330 -330 - 100.0 Share capital 68 3360 3,149 111 3.5 General legal reserves 5,266 4,307 961 22.3 Other reserves 103 0 103 Net annual profit 1,187 1,023 164 16.0 Total shareholder’s equity 69 9,818 8,809 1,009 11.5 TOTAL LiABiLinEs AND SHL\REHOLDER’S EQurry =W= 195,584 8,414 4.3 Total subordinated liabilities 6,280 6,226 64 0.9 Total liabilities due to parficipations and quakiedshareholders 29,489 12,350 17,139 138.8

61 OFF-BALANCE SHEET BUSINESS PARENT COMPANY

Change to Change to Notes 31.12.98 31.12.97 31.12.97 31.12.97 OFF-BALANCE SHEET BUSINESS page CHF m CHF m CHF m % Contingent liabilities 17,093 22,963 -5,860 - 25.5 irrevocable commitments 77,734 59,525 18,269 30.7 Call liabilities 1 1 0 0.0 Confirmed credits 260 435 -175 - 40.2 Derivative financial instruments - gross positive replacement value 26,613 27,639 -2,026 - 7.3 - gross negative replacement value 26,589 26,179 410 1.6 - contract volume 1,6!%,688 1,363,265 295,423 21.7 Fiduciary transactions 71 1,392 775 817 79.6

62 PROPOSED APPROPRIATION OF RETAINED EARNINGS PARENT COMPANY at the disposal of the February 26,1999, Annual General Meeting

Change to 31.12% 31.12.97 1997 RETAINED EARNINGS CHF m CHF m CHF m Net annual profit 1,186.7 1,023.O 163.7 Profit carried forward from previous year 0.5 0.0 0.5 Retained earnings at the year-end 1,187.2 1,023.O 164.2

ADJUSTMENT FOR PROFIT DISTRIBUTION Transfer from the general legal reserves 0.0 0.0 0.0 Allocation to reserves Allocation to general legal reserves 7.7 69.3 -61.6 Allocation to other reserves 0.0 103.0 -103.0 Total allocation to reserves 7.7 172.3 -164.6 Dividends in respect of share capital: 1998: CHF 7.35 per bearer share with a nominal value of CHF 100 on the share capital of CHF 1,531,600,000 ranking for dividends 112.6 CHF 7.35 per registered share with a nominal value of CHF 100 on the share capital of CHF 1,728,676,600 ranking for dividends 127.1 1997: CHF 27 per bearer share with a nominal value of CHF 100 on the share capital of CHF 1,531,600,000 ranking for dividends 413.6 CHF 27 per registered share with a nominal value of CHF 100 on the share capital of CHF 1,617,160,400 ranking for dividends 436.6 Total dividends 239.7 850.2 -610.5 Dividends and allocations to reserves 247.4 1,022.5 -775.1

BALANCE TO BE CARRIED FORWARD 939.8 0.5 939.3

Bearer shares Registered shares 1888 DIVIDEND (nom. value CHF 100) (nom. value CHF 100) Dividend per Credit Suisse First Boston share after acceptance of the above proposals CHF 7.35 CHF 7.35 less 35% federal withholding tax CHF 2.55 CHF 2.55 NET DIVIDEND CHF 4.80 CHF 4.80

Payable as from February 26, 1999, by cheque or into the account of the registered shareholder, or against presentation of the coupon number 8 for holders of bearer shares.

Zurrch, February 26, 1999 For the Board of Directors Chairman: Rainer E. Gut

For the Business Units Business Unit Credit Suisse First Boston Business Unit Credit Suisse Asset Management Allen D. wheat Phillip M. Colebatch Chief Executive Officer Chief Executive Officer

Chief Financial Officer of the Bank Stephen A.M. Hester

63 NOTES TO FINANCIAL STATEMENTS Accounting and valuation policies

The parent company’s financial statements are prepared in accordance with the Swiss Federal Law on Banks and Savings Banks, the Implementing Ordinance on Banks and Saving Banks and the Guidelines of the Federal Banking Commission Concerning the Preparation of Financial Statements as amended through October 22, 1997. In general, the parent company’s financial statements are based on the same accounting and valuation principles used for the consolidated financial statements. However, unlike the consolidated financial statements, which give a ‘true and fair view’ of the financial position and the results of operations, the parent company’s financial statements may include and be influenced by undisclosed reserves. Undisclosed reserves arise from economically unnecessary write-downs on fixed assets and participations or through market related price increases, which are not reflected in the income statement. In addition, undisclosed reserves arise from recording excessive provisions and loan loss reserves or if provisions and loan reserves, which are no longer necessary, are not written back to income.

Notes on risk management For information on the Bank’s policy with regard to risk management and the use of financial derivatives, see notes to consolidated financial statements.

Year 2000 The Year 2000 issue extends to almost every aspect of the Bank’s daily operations and interaction with the markets. As a consequence, the Bank is addressing the issue on a global basis, including all branches, subsidiaries and associated companies. Further information on the Bank’s Year 2000 issue is disclosed in the notes to the consolidated financial statements (page 23).

I 64 NOTES TO FINANCIAL STATEMENTS Additional information on the parent company income statement

1998 1997 Change ANALYSIS OF INCOME CHF m CHF m CHF m NET TRADING INCOME Income from securities trading 342 256 86 Income from foreign exchange and banknote trading 402 763 -361 Income from precious metal trading 58 54 4 Income from trading in interest rate instruments 266 17 249 Other loss/income from trading -1 a -9 Total net trading income 1,067 1,090 -31

1998 1997 Change ANALYSIS OF EXPENSES CHF m CHF m CHF m VALUATlON ADJUSTMENTS, PROVISIONS AND LOSSES Provisions and valuation adjustments for default risks 89 455 -366 Provisions and valuation adjustments for other business risks 3 47 -44 Other gains/losses -2 60 -62 of which losses in credir business 10 18 -8 Total valuation adjustments, provisions and losses so 562 -472

ANALYSIS OF EXTRAORDINARY I 998 1997 Change INCOME AND EXPENSES CHF m CHF m CHF m EXTRAORDINARY INCOME Gains realized from the disposal of participations 5 10 -5 Other extraordinary income 347 37 310 of which release of Resarves against general banking risks 330 0 330 Total extraordinary income 352 47 305

EXTRAORDINARY EXPENSES Other extraordinary expenses 257 164 93 of which World War II settlement 167 0 161 Total extraordinary expenses 257 154 93

65 NOTES TO FINANCIAL STATEMENTS Additional information on the parent company balance sheet

BONDS AND MORTGAGE BONDS ISSUED BY CSFB (PARENT COMPANY) Redemption Call Currency Issue amount Subparticipation date Coupon Year of issue date in millions in millions 1.1999 7.50% 1991 CHF 100.0 'lcQ.0' 3.1999 7.00% 1991 CHF 5.0 5.1999 4.50% 1994 CHF 100.0 100.0= 5.1999 6.50% 1991 CHF 5.0 9.1999 5.00% 1994 CHF 200.0 9.1999 6.75% 1991 CHF 4.0 1.2000 7.25% 1990 CHF 150.0' 9.2ooo 4.60% 1995 CHF 250.0 10.2000 5.79% 1997 10.1999 USD 1,996.0z 6.2001 7.25% 1990 CHF 170.0 7.2001 7.00% 1991 CHF 150.0' 9.2001 6.00% 1989 9.1999 CHF 200.0' 10.2001 5.79% 1997 USD 1.496.1 2 1.2002 7.00% 1992 CHF 100.0 2.2002 7.50% 1991 CHF 200.0' 125.0 a 5.2002 6.75% 1992 CHF 60.0 3.2002 7.25% 1990 3.2ooO CHF 150.0 150.03 1.2003 7.75% 1991 CHF 100.0 100.0' 1.2003 7.25% 1992 CHF 100.0 100.0~ 2.2003 5.00% 1986 2.2000 CHF 170.0 170.0 a 3.2003 3.60% t 993 CHF 75.0' 3.2003 3.50% 1993 CHF 125.0' 4.2003 2.00% 1996 USD 73.5 9.2003 6.25% 1993 USD 200.0' 11.2003 6.13% 1993 DEM 600.0 ' 2.2004 5.00% 1989 2.1999 CHF 300.0 ' 120.0 = 4.2004 4.38% 1996 CHF 200.0 11.2004 8.50% 1994 USD 300.0 ' 12.2004 6.13% 1994 DEM 100.0' 2.2005 5.50% 1995 CHF 100.0 100.0' 1995 CHF 225.0' 3.2005 5.75% I 11.2005 3.13% 1995 CHF 300.0 300.0 3 11.2005 2.00% 1997 USD 100.0 11.2OQ6 2.00% 1999 USD 200.0 6.2006 7.21% 1996 USD 237.5' 6.2006 6.84% 1997 USD 95.0 ' 7.90% 1997 5.2007 USD 500.0 ' perpetual 6.60% 1997 6.2007 FFR 750.0' perpetual 6.50% 1997 6.2007 FFR 500.0 ' 7.2007 5.25% 1995 CHF 150.0' 7.2007 5.25% 1995 CHF loo.0 497.7 ' perpetual 4.38% 1997 7.2007 CHF 2.2008 4.50% 1996 CHF 20g.o 200.03 2.2008 2.00% 1998 USD 260.0 5.2008 6.50% 1998 USD 200.0' perpetual 8.25% 1997 7.2009 GBP 150.0' 5.2010 5.75% 1998 DEM 415.0' 3.2016 5.00% 1986 3.2006 CHF 200.0 ' perpetual 7.74% 1997 7.2007 USD 100.0' perpetual 4.51% 1998 12.2029 JPY 10,000.0'

’ Subordinated bonds. ‘Credit linked rides issued by Credit Suisse First Won Guernsey branch. ‘To banks within Credit Suisse Group.

66 NOTES TO FINANCIAL STATEMENTS Additional information on the parent company balance sheet

Registered shares (nom. value CHF 20) DETAILS OF CREDIT SUISSE GROUP SHARES Quantity Book value HELD BY CREDIT SUISSE FIRST BOSTON ’ (1 soow CHF m Securities trading portfolio Portfolio at December 31, 1997 4,749 1,073 Portfolio at December 31, 1998 6,537 1,405

I Net current positions in Credit Suisse Group shares are subject to delivery commitments under derivatives contracts. When these commitments are taken into account, the CSFE parent’s net proprietary holdings of Credit Suisse Group shares are insignificant.

PLEDGED AND ASSIGNED ASSETS AND ASSEK UNDER 31.12.98 31.12.97 Change RESERVATION OF OWNERSHIP CHF m CHF m CHF m Assets pledged and assigned as collateral 13,603 3,688 9,915 Actual commitments secured 11,850 555 11,295

LlABILITIES IN RESPECT OF OWN PENSION FUNDS On the balance sheet date, total liabilites in respect of the CSFB’s own pension funds amounted to CHF 713 million (as of December 31, 1997: CHF 757 million).

Release/ Recoveries, Charges endangered to income Write-backs interest, Net charges statement credited to VALUATION ADJUSTMENTS Specific Reclassifi- currency to income (extra- income AND PROVISONSI Total write-downs cations’ differences statement ordinary) statement Total RESERVES AGAINST 31.12.97 31.12.98 GENERAL BANKING RISKS CHF m CHF m CHF m CHF m CHF m CHF m CHF m CHF m Valuation adjustments and provisions for defautt risks 797 -261 119 -4 89 0 0 748 Valuation adjustments and provisions for other business risks 34 0 -29 -1 1 0 0 5 Valuation adjustments and provisions for restructuring 25 -81 0 0 0 56 0 0 Provisions for taxes and deferred taxes 270 -120 0 -5 36 2 0 0 181 Other provisions 108 -77 130 8 3 20 0 192 Total write-downs and provisions 1,= -539 220 -2 129 76 0 1,118 Less direct charge-offs against specifii assets 405 889 Total write-downs and provisions shown in balance sheet 828 429 ReSeNeS against general banking risks 330 0 0 0 0 -330 0 0

’ CHF 128 millii relates to a reclassification of reserves for the liquidation of Come-i-tin from bank buildings; CHF 100 million relates to various reclassifications from other liabilities. CHF -28 million relates to a reclassification from default risks to tinancial investments. ’ CHF 4 million deviation to ixome statement due to deferred tax assets that are not included in the provisions.

67 NOTES TO FINANCIAL STATEMENTS Additional information on the parent company balance sheet

1998 1997 Total Capital tanking Total Capital ranking COMPOSITION OF Quantity nominal value for dividends Quantity nominal value for dividends SHARE CAPITAL CHF CHF CHF CHF Paid-up capital Beater shares at CHF 100 Capital on January 1 15,316,OOO 1,531,600,000 15,316,OOO 1,531,600,000 Capital on December 31 15,316,OOo 1,531,600,000 1,531,600,000 15,316,OOO 1,531,600,000 1,531,600,000 Registered shares at CHF 100 Capital on January 1 16,171,604 1,617,160,400 6,171,604 617,160,400 Capital increase on February 6,1997 ro,ooo,mo ~,ooo,ooo,~ Capital increase on July 31, 1998 1,115,162 111,516,200 Capital on December 31 17,266,766 1,726,676,600 1,726,676,600 16,171,604 1,617,160,400 1,617,160,400 TOTAL SHARE CAPITAL 3,260,276,600 3,260,276,600 ~146,760,400 3,146,760,400

1998 1997 1996 Total Total Total AUTHORISED AND Quantity nominal value Quantity nominal value Quantity nominal value CONDITIONAL CAPITAL CHF CHF CHF Authorised share capital Registered shares at CHF 100 Authorised share capital on January 1 0 0 10,000,000 l.~,~,~ l,CW@XJ 1OO,OOO,oOO 2 In accordance with the decision of the Extraordinary General Meeting of December 4, 1996 1o,OOO,OOO 1 ,ooo,ooo,ooo Capital increase on February 6,1997 -1o,oOO,OOO -1 ,OOO,c9O,OOO Authorised share capital on March 27,1998 5,000,000 5oo,ooo,ooo Capital increase on July 31, 1998 -1,115,162 -111,516,206 Authorised share capital on December 31 3,@34$36 388,=%800 0 0 10,ooo,ooo 1,000,000,000 Conditional share capital on December 31 0 0 0 0 0 0

31.12.1998 31.12.1997 Total Total MAJOR SHAREHOLDERS AND Quantity nominal value Share Quantity nominal value Share GROUPS OF SHAREHOLDERS’ CHF % CHF % Beater shares at CHF 100 with voting tights Credit Suisse Group 15,316,OOO 1,531,60&ooo 100 15,314,681 1,531,488,100 99.99 Other shareholders 0 0 0 1,319 131,900 0.01 Total 15,316,OOO 1,531,600,000 100 15,316,OOO 1,,=1,600,~ 100.0

Registered shares at CHF 100 with voting tights Credit Suisse Group 17,266,766 1,726,676,600 100 16,171.293 1.617,129,300 99.99 Other shareholders 0 0 0 311 31,100 0.01 Total 17,266,766 1,72%676,600 100 16,171,604 1,617,160,400 100.0

t The Bz Group hokj 7.27 % of Credit S&se Group +tered shares and therefore indirectly exceed 6 ‘% of all vctirg rQhb of credit Suisse First Soaton. 2 Cancelled at the Extraordinay General Meeting of th.x?mber 4. 1996.

68 NOTES TO FINANCIAL STATEMENTS Additional information on the parent company balance sheet

1998 1997 Change SHAREHOLDER’S EQUITY CHF m CHF m CHF m Beginning shateholdets’ equity Share capital 3,149 3,149 0 General legal reserves 4,307 4,307 0 Other reserves 0 0 0 Reserves against general banking risks 330 330 0 Retained earnings 1,023 0 1,023 of which carned forward from previous year 0 0 0 of which net annual profit 1,023 0 1,023 Total beginning shareholder’s equity 8,809 7,786 1,023 Other changes to/transfers from tesetves -330 0 -330 Capital Increase 111 0 111 Share premium on capital increase 892 0 892 Payments Dividend -860 0 -650 Net annual profit 1,187 1,023 164 Total shareholder’s equity as of December 31 9,818 8,809 1,009 Share capital 3,260 3,149 112 General legal reserves 5,266 4,307 961 Other reserves 103 0 103 Reserves against general banking risks 0 330 -330 Retained earnings 1,187 1,023 164 of which carried forward from previous year 0 0 0 of which net annualprofit 1,187 1,023 164

69 NOTES TO FINANCIAL STATEMENTS Additional information on the parent company balance sheet and off-balance sheet business

CAPITAL INCREASE

As described on page 68 the Bank increased its share capital. The Statutory Auditors examined the capital increase in accordance with the provisions of the law and issued the following report.

Auditors’ report to the Board of Directors of Credit Suisse First Boston on capital increase As statutory auditors of Credit Suisse First Boston in accordance with Swiss law we examnied the capital increase report dated July 31, 1998, presented by yourselves.

The capital increase report is the responsibility of the Board of Directors. Our responsibility is to express an opinion on the capital increase report based on our audit. We confirm that we meet the legal requirements concerning professional qualification and independence.

Our examination was conducted in accordance with auditing standards promulgated by the profession in Switzerland and accordingly, was planned and performed to obtain reasonable assurance about whether the capital increase report is free from material misstatements. We have performed necessary procedures in order to form our opinion thereon. We believe that our examination provides a reasonable basis for our opinion. In our opinion the information provided in the capital increase report is complete and accurate and in accordance with Swiss law and the resolution of the General Meeting of Shareholders of Credit Suisse First Boston dated March 27, 1998.

KPMG Klynveld Peat Marwick Goerdeler SA

P. Hanimann A. Hausmann

Zurich, July 31, 1998

70 NOTES TO FINANCIAL STATEMENTS Additional information on the parent company balance sheet and off-balance sheet business

CIAIMS ON AND LIABILITIES TO AFFILIATED COMPANIES, 31.12.98 31.12.97 Change AND LOANS TO MEMBERS OF THE BANK’S GOVERNING BODIES CHF m CHF m CHF m Ckims on affiliated companies 6,466 6,072 414 Liabilities to affiliated companies 30,972 26,665 2,107 Loans to members of the bank’s governing bodies 7 0 7

31 .12.98 31.12.97 Change FURTHER DETAILS ON SELECTED BALANCE SHEET ITEMS CHF m CHF m CHF m Fire insurance value Real estate 2,193 1,866 327 Other fixed assets 98 148 -50

31.12.98 31.12.97 Change BREAKDOWN OF FIDUCIARY TRANSACTIONS CHF m CHF m CHF m Fiduciary placements with third-party institutions 1,339 573 766 Fiduciary placements with affiliated and associated banks 0 4 -4 Fiduciary placements and other fiduciary transactions 63 198 -145 Total fiduciary transactions 1,392 775 617

Additional Disclosures

As of December 31 1998 1997 Staff numbers Switzerland 1,439 1,425 Abroad 1,010 1,149 Total staff 2,449 2,574

As of December 31 1998 1997 Off ices Switzerland 7 8 Abroad 28 36 Total offices 35 44

71 REPORT OF THE STATUTORY AUDITORS TO THE ANNUAL GENERAL MEETING OF CREDIT SUISSE FIRST BOSTON, ZURICH

As statutory auditors of Credit Suisse First Boston, we have audited the accounting records and the financial statements (balance sheet, income statement and notes to financial statements) for the year ended December 31, 1998. The financial statements are the responsibility of the Board of Directors. Our responsibility is to express an opinion on these financial statements based on our audi. We confirm that we meet the legal requirements concerning professional qualification and independence.

Our audit was conducted in accordance with auditing standards promulgated by the profession in Switzerland, which require that an audit be planned and performed to obtain reasonable assurance about whether the financial statements are free from material misstatement. We have examined, on a test basis, evidence supporting the amounts and disclosures in the financial statements. We have also assessed the accounting principles used, significant estimates made and the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the accounting records and the financial statements and the proposed appropriation of retained earnings comply with the law and the company’s articles of association.

We recommend that the financial statements submitted to you be approved.

KPMG Klynveld Peat Marwick Goerdeler SA

Brendan R. Nelson Peter Hanimann

Chartered Accountant Certified Accountant

Auditors in Charge

Zurich, February 26, 1999

72 73 Published by Credit Suisse First Boston Financial Controlling P.O. Box 900 8070 Zurich, Switzerland Tel: (+411) 333 5555 Fax: (+411) 333 5599 http://www.csfb.com

Languages English German

74 ANNEX B SUPPLEMENT DATED 10th SEPTEMBER, 1999 TO CREDIT SUISSE FIRST BOSTON INFORMATION STATEMENT DATED 20th APRIL, 1999 Selected Interim Financial Information - Credit Suisse First Boston (the “Bank”) The Bank has published its unaudited consolidated financial statements as of and for the period ended 30th June, 1999, from which the selected interim financial information below has been derived. The results of operations of the Bank for the six months ended 30th June, 1999 are not indicative of the results that may be expected for the full financial year. See the Annual Report 1998 of the Bank at Annex I to the Information Statement for the most recent audited consolidated financial statements for the Bank and notes thereto.

B-l Unaudited Consolidated Income Statement of the Bank For the six months ended 30th June, I999 1998 % 1999 1998 % (CHF m) (CHF m) Change (USD m)(l) -(USD mf2’ - Change Results from Interest Business Interest and discount income ...... 5,441 7,999 (32) 3,752 5,441 (31) Interest and dividend income from trading portfolio 2,209 2,942 (25) 1,523 2,00 1 (24) Interest and dividend income from financial investments 147 126 101 86 18 Interest expense . . 6,391 9,570 (A:) 4,408 6,510 ...... ------(32) Net interest income . . 1,406 1,497 970 1,018 ...... - - - (6) - - - (5) Results from Commission and Service Fee Activities Commission income from lending activities . . 323 118 174 223 80 178 Commission from securities and investment transactions 2,924 2,427 20 2,017 1,651 22 Commission from other services . . . . 27 29 (7) 20 (7) Commission expense ...... 84 91 (8) :i 62 ~ - - - - (7) Net Commission and Service Fee Income 3,190 2,483 28 2,200 1,689 30 - - - - - Net Trading Income ...... 3,225 2,574 25 2,224 1,751 27 ------Other Ordinary Income Income from the sale of financial investments 173 95 82 119 65 84 Income from investments ...... 13 13 0 9 9 0 of which from participations valued according to the equity method ...... 9 9 0 6 6 0 of which from other non-consolidated participations 4 4 3 3 Real estate income ...... 5 I4 ($, 3 IO &I Sundry ordinary income...... I84 90 104 127 61 I08 Sundry ordinary expenses 305 26 1,073 210 1,069 . . . . - - - - - 18 - Net Other Ordinary Income ...... 70 I86 (62) 48 127 - - - - - (62) Net Operating Income . . 7,891 6,740 17 5,442 4,585 I9 ...... - - - - - Operating Expenses Personnel expense...... 4,383 3,657 20 3,022 2,488 21 Other operating expenses ...... 1,158 990 I7 799 673 I9 Total Operating Expenses . . 4,647 I9 3,161 21 ...... - 5,541 - - 3,821 - - Gross Operating Profit.. ~...... 2,350 2,093 I2 1,621 1,424 I4 ------Depreciation and write-downs on non-current assets 277 176 57 191 120 59 Valuation adjustments, provisions and losses ., 564 336 68 389 229 70 Total Depreciation and Valuation Adjustments 841 512 64 580 349 66 ------Consolidated Profit Before Extraordinary Items and Taxes ...... , 1,581 1,075 - 1,509 ~ - (5) 1,041 - - (3) Extraordinary income ...... 0 35 - 24 (100) Extraordinary expenses ...... 18 71 (75) 1: 48 (75) Taxes ...... 374 495 (24) 258 337 (23) Consolidated Net Profit (before minority interests) 1,117 1,050 6 714 8 - - _ - 771 - - of which minority interest ...... 37 53 (30) 26 36 (29) Consolidated Net Profit (After Minority Interests) 1,080 997 8 745 678 IO ------

Notes: (1) Translation of Swiss francs into U.S. dollars has been made at the rate of CHF I .45 = USD 1.OO (the 30th June, 1999 six-month average exchange rate). Such translation is provided solely for the convenienceof the reader. (2) Translation of Swiss francs into U.S. dollars has been made at the rate of CHF I .47 = USD I .OO(the 30th June, I998 six-month average exchange rate). Such translation is provided solely for the convenience of the reader.

B-2’ Consolidated Balance Sheet of the Bank As of As of As qf As of 30th Jtme, 3fst Dec.. 30th June, 31st Dec. 1999 I998 1999 1999 (unaudited) (audited) (unaudited) (audited) (CHF m) (CHF m} % Chunge (USD I#” (c/SD III)“’ % Change Assets Cash . __ ., 849 1,179 (28) 548 857 (36) Money market claims __ __ ., 21,811 18,864 16 14,072 13,719 Due from banks . _. __ _, ., 156,141 139,996 12 100,736 101,815 c:, of which securities lending and reverse repurchase agreements ,, 107,773 78,303 38 69,53 I 56,948 22 Due from customers . _. ._ 71,939 62,936 14 464 I2 45,772 I of which securities lending and reverse repurchase agreements . . _. 37,140 28,634 30 23796 I 20,825 15 Mortgages . __ __ ., ., 9.730 7,246 34 6,277 5,270 19 Securities and precious metals trading portfolios . ., 108,389 100,964 69,928 73,428 (5) Financial investments 7,658 10,194 4,94 I 7,414 (33) Non-consolidated participations ,, _, 747 445 68 482 324 49 Tangible fixed assets ._ ._ ., 4,789 4,54 I 3,303 (6) Goodwill ...... _ 573 579 c:, 3,090370 421 (17-J Accrued income and prepaid expenses 6,985 6,882 (1:) 28,2434,506 5,005 (10) Other assets.. ._ __ 43,776 49,876 36,273 (22) of which replacement value of derivatives 40,09 I 46,385 (14) 25,865 33,735 (23) TOTAL ASSETS . . . ._ 433,387 403,702 7 279,605 293,601 (5) Total subordinated claims 2,333 2,957 (21) 1.505 2,151 (30) Total due from non-consolidated .. .’ participations and qualified shareholders 816 243 236 526 177 198

Liabilities and Shareholder’s Equity Liabilities in respect of money market paper 18,902 19,935 (5) 12,195 14,498 (16) Due to banks . . . 216,335 186,722 16 139,572 135,797 3 of which securities borrowing and repurchase agreements . . . __ 66,898 74,9 I8 (11) 43,160 54,486 (21) Due to customers in savings and investment accounts . . . ._ 1,952 2,034 (4) 1,259 1,479 Due to customers, other . __ . 93,208 85,3 16 9 60,134 62,048 of which securities borrowing and repurchase agreements . 44,409 29,844 49 28,65 I 2 1,705 Bonds and mortgage-backed bonds 1: 1: 34,639 34,877 (1) 22,348 25,365 Accrued expenses and deferred income . . 8,05 1 9,237 (13) 5,194 6,718 (23) Other liabilities . . __ . . 45.759 53,453 (14) 29,522 38,875 (24) of which replacement value of derivatives 411234 49,502 (17) 26,603 36,001 (26) Value adjustments and provisions . . 2,327 1,780 31 1,501 1,295 16 Total liabilities ...... 421,173 393,354 7 27 1,725 286,075 (5) Shareholder’s equity: Share capital 3,260 3,260 2,103 2,371 (11) Capital reserve .. . _. 4,384 5,268 2,828 3,83 I (26) Retained earnings . . . . 1,192 1,123 6 769 817 (6) Minority interests in shareholder’s equityf3j’ 2,26 I 1,693 1,459 Consolidated net profit . . ._ . ., I,1 17 (996) 34 721 of which minority interests . ., 37 24 54 24 Total shareholder’s equity 12.2 14 10,348 18 7,880 7,526 5 TOTAL LIABILITIES AND SHAREHOLDER’S EQUITY . . _. 433.387 403,702 7 279,605 293,601 (5) Total subordinated liabilities 13,322 13,263 0 8,595 9,646 (11) Total liabilities due to non-consolidated ” participations and qualified shareholders 1,925 1,159 66 1,242 843 47

Notes: (I) Translation of Swiss francs into U.S. dollars has been made at the rate of CHF 1.55 = USD I .OO(the 30th June, 1999 exchange rate). Such translation is provided solely for the convenience of the reader. (2) Translation of Swiss francs into U.S. dollars has been made at the rate of CHF 1.375 = USD 1.00 (the 3 1st December, 1998 exchange rate). Such translation is provided solely for the convenience of the reader. Figures may differ from those appearing in the Information Statement, which used a rounded exchange rate of CHF 1.38 = USD 1.00. (3) Includes (a) USD 125 million (CHF 194 million) perpetual non-cumlative non-voting preferred shares issued by a subsidiary and sold to unaffiliated investors and (b) USD 1,025 million (CHF 1,589 million) represents perpetual non-cumulative non-voting preferred shares held by Credit Suisse Group as direct investments in subsidiaries of the Bank.

B-3 Capital Adequacy As of 31st As of 30th Decembel; June, 1999 1998 (unaudited) (audited) BIS tier 1 ratio(‘) ...... 8.4% 8.4% BIS total capital ratioc2) ._ ...... 15.1% 15.4%

Notes: (I) Tier I capital as a percentage of the Bank’s risk-weighted assets, calculated on a consolidated basis in accordance with the recommendations (the “Basle Recommendations”) of the Basle Committee on Banking Supervision of the Bank for International Settlements (“BIS”). Core capital includes (a) USD I25 million (CHF I94 million) perpetual non-cumulative non-voting preferred shares issued by a subsidiary and sold to unaffiliated investors and (b) USD 1,025 million (CHFl,589 million) perpetual non-cumulative non- voting preferred shares held by Credit Suisse Group as direct investments in subsidiaries of the Bank. (2) Total capital as a percentage of the Bank’s risk-weighted assets, calculated on a consolidated basis in accordance with the Basle Recommendations.

Consolidated Off-Balance Sheet Business of the Bank As of 30th As of’3lst As of3Oth As of 31st June, 1999 Dec., 1998 June, 1999 Dec., 1998 (unaudited) (audited) (unaudited) (audited) (CHF m) (CHF m) (7JSDm) (USD m) Contingent liabilities ...... ~ . . 14,744 14,398 9,512 10,471 Irrevocable commitments ...... 97,082 83,252 62,634 60,547 Liabilities for calls on sharesand other equity . . 1 1 I 1 Confirmed credits ...... 235 262 152 191 Fiduciary transactions . . ._ ...... 9,106 8,520 5,875 6,196

Derivative Instruments (in CHF billion) As of 30th As of 30th As of 31st As of 3lst June, 1999 June, 1999 Dec., 1998 Dec., 1998 As of 30th (unaudited) As of 31st (audited) (audited) June, 1999 Positive Dec., 1998 Positive Negative (unaudited) gmss gross (audited) gross gross Notionat replacement replacement Notional replacement replacement amount value value amount value value Interest rate products . . . 5,747.8 67. I 64.3 4,673.9 73.8 69.5 Foreign exchange products . 1,195.2 23.9 25.1 1,372.l 29.5 34.6 Preciousmetals products .. 43.2 2.5 3.3 34.1 1.4 2.0 Equity/Index - related products 366.8 16.0 18.3 279.4 13.3 15.0 Other products ...... 12.3 0.6 0.2 12.6 0.3 0.1 Total ...... 7,365.3 110.1 111.2 6,372.7 118.3 121.2

B-4 Derivative Instruments (in USD billion) As of 30th As of 30th As of 31st As of 31st June, 1999 June, 1999 Dec., I998 Dec., I998 As of 30th (unaudited) (unaudited) As of 31st (audited) (audited) June, 1999 Positive Negative Dec., 1998 Positive Negative (unaudited) gross gross (audited) gross gmss Notional replacement replacement Notional replacement replacement amount value value amount value value Interest rate products ., . . 3,708.3 43.3 41.5 3,399.2 53.7 50.5 Foreign exchange products . 771.1 15.4 16.2 997.9 21.5 25.2 Precious metals products 27.9 1.6 2.1 25.2 I.0 1.5 Equity/Index - related products 236.6 10.3 11.8 203.2 9.7 10.9 Other products . . 7.9 0.4 0.1 9.2 0.2 0.1 Total ...... 4,751X 71.0 71.7 4,634.7 86.0 88.1

Notes: (I) Translation of Swiss francs into U.S. Dollars has been made at the rate of CHF I .55 = USD I .OO(the 30th June, I999 exchangerate). Such translation is provided solely for the convenience of the reader. (2) Translation of Swiss francs into U.S. Dollars has been made at the rate of CHF 1.375 = USD 1.OO (the 3 1st December, 1998 exchange rate). Such translation is provided solely for the convenience of the reader.

Interim Results - Business Unit Discussion The following discussion and analysis of the financial results of the Credit Suisse First Boston business unit (“CSFB”) and the Credit SuisseAsset Management businessunit (“CSAM”) as of and for the period ending 30th June, 1999 represents the views of the respective managements of these businessunits. In reviewing the financial data for the CSFB and CSAM business units set forth below, prospective investors should note that financial data for the Bank appearing elsewhere herein do not equal the sum of the financial data for CSFB and CSAM. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Presentation of CSFB and CSAM Results of Operations” in the Information Statement. In this section, ratios and other percentages for CSFB have been calculated based on U.S. dollar amounts, while those for CSAM have been calculated based on Swiss franc amounts. Business unit and divisional income statement data for the six-month period ended 30th June, 1999 have been translated using the 30th June, 1999 six-month average exchange rate of CHF 1.45 = USD 1.00. Business unit and divisional balance sheet data as of 30th June, 1999 have been translated using the 30th June, 1999 exchange rate of CHF 1.55 = USD 1.00. Such translations are provided solely for the convenience of the reader. The following discussion is as of and for the period ended 30th June, 1999 only, and does not describe the impact of subsequent developments.

CSFB - Global Investment Banking In the first half of 1999, CSFB produced a strong performance in favourable market conditions. Revenuesrose 16 per cent. compared to the first half of 1998, to a record USD 5.1 billion (CHF 7.4 billion) producing a 20.5 per cent. return on equity These results were accompanied by a strengthening of CSFB’s competitive position among the world’s leading investment banks. In addition, action taken following the losses in Russia in 1998 accelerated CSFB’s risk reduction, with value-at-risk and exposure levels down in the first half of 1999 and greater emphasis placed on customer business. The growth of customer business more than replaced the revenues foregone from this shift in strategy. In strategic terms CSFB benefited from the successfU1acquisitions of 1998, with smooth business integration and better-than-expected results. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations - CSFB Business Unit Acquisitions” in the Information Statement.At the same time, CSFB maintained a continued commitment to organic investment to generate future growth. In addition, initiatives were undertaken to strengthen risk/regulatory controls and accelerate e-commerce expansion.

B-5 CSFB’s strategy since 1997 has been to strengthen its global special bracket position through targeted growth of customer business and consolidation of the more capital intensive fixed income and derivatives businessesin which CSFB remains a market leader. The importance of this strategy became even more apparent in light of CSFB’s experiences in Russia in 1998. In the first half of 1999, further progress was made in moderating value-at-risk, capital required and balance sheet utilisation, combined with robust growth in customer business. The new “Strategic Risk Management” function has helped to improve the quality of risk review and to reduce risk concentrations. ‘See“ The Bank - Risk and Capital Management” in the Information Statement. CSFB has come through a very demanding period with a significant earnings recovery underpinned by strong market share advances and further investment in the future. Stability of personnel, strategic direction and investment support this achievement. The second half is unlikely to offer such strong market conditions, but management believes that CSFB is well positioned to face its competitive challenges.

Income Statement Data(‘) CSFB Business Unit (Unaudited) For six months ended 30th June, 1999 1998 o/O 1999 1998 % (CHF m) (CHF m) Change (USD m)” (r/SD m)13’ Change Fixed income & Derivativest4’...... 3,564 3,775 (6) 2,458 2,568 (4) Equity ...... 2,450 1,411 74 1,690 960 76 Investment Banking Division ...... 1,506 1,331 13 1,038 905 15 Private Equity ...... (l::)N (E) 573988 (1::) A 991538 Other . . ._ ...... _ .. - ___ Revenue ...... 7,420 6,512 14 5,117 4,430 16 Personnel expenses . . . . _. . . ., 4,010 3,366 19 2,766 2,290 21 Other operating expenses ...... 1,200 1,128 6 827 767 8 Total Operating Expenses ...... 5,210 4,494 16 3,593 3,057 18 Gross Operating Profit...... 2,210 2,018 10 1,524 1,373 11 Depreciation and write-offs on non-current assets 219 138 59 151 94 61 of which amortisation of goodwill . . . . 32 1 - 22 0 Valuation adjustments, provisions and losses’*) . . 497 256 94 343 174 97 Profit before Extraordinary Items and Taxes . . 1,494 1,624 (8) 1,030 1,105 (7) Extraordinary income’*) ...... 0 9 - 0 6 Extraordinary expenses ...... 0 4 0 3 Taxes ...... 478 521 Cs, 330 354 (7) Net Profit ...... 1,016 1,108 (8) 700 754 (7) of which minority interests...... 2 57 (96) 1 39 (97) Net Profit (after minority interests) . . . 1,014 1,051 (4) 699 715 (2)

Notes: (1) The businessunit income statement differs from Credit Suisse Group’s legal accounts in presenting brokerage, execution and clearing expensesas part of operating expensesin common with U.S. competitors, rather than netted against revenues. (2) Translation of Swiss francs into U.S. dollars has been made at the rate of CHF I.45 = USD 1.00 (the 30th June, 1999 six-month average exchangerate). Such translation is provided solely for the convenienceof the reader. (3) Translation of Swiss francs into U.S. dollars has been made at the rate of CHF I .47 = USD I .OO(the 30th June, 1998 six-month average exchangerate). Such translation is provided solely for the convenienceof the reader. (4) Presentationdiffers from that appearing in the Information Statement to reflect the integration of the former Fixed Income Division and Credit Suisse Financial Products effective 1st January, 1999. (5) Reflects reduction relating to releaseof RGBR (reservesfor general banking risks) of CHF 58 million (USD 40 million) and CHF 82 million (USD 56 million) for the six months ended 30th June, 1999 and 30th June, 1998, respectively.

B-6 Results first half 1999 The conditions in the financial markets were good overall during the first six months of the year, although they deteriorated during the second quarter in a number of fixed income areas. Strong revenue growth (16 per cent.) over 1998’s record first-half level reflects market share gains across the board. CSFB’s quality of earnings improved, with diversification in favour of equities and investment banking and the customer segmentsof the fixed income and derivatives businesses.Precautionary credit and related reserves were high based on an increased medium-term cautionary outlook. CSFB’s business mix changed to greater client orientation reflecting a less capital-intensive, more people-intensive strategy. Consequently, average allocated equity for the first half of 1999 declined 6 per cent. compared to 1998, while the Bank maintained a strong 8.4 per cent. BIS tier 1 ratio; the pre-tax margin declined due to this greater client orientation, with employee headcount up 5 per cent. over the last 12 months. Operating expensespre-bonuses rose 9 per cent., owing to the headcount increase. Total compensation accruals rose as a result of revenue increases,business mix and competitor accruals. CSFB’s geographic balance was reflected by revenues split 39 per cent. North America, 35 per cent. Europe and 26 per cent. the rest of the world.

B-7 Balance Sheet Data CSFB Business Unit (Unaudited) As of As of As of As of 30th Juni, 31st Dee:, 30th June, 31st Dec., 1999 I998 1999 1998 (CHF m) (CHF m) ‘56Change (USD m)(l) (USD r# % Change Cash ...... 822 1,175 (30) 530 855 (38) Money market paper ...... 21,811 18,860 16 14,072 13,716 Due from banks . . . . 154,773 138,726 12 99,854 100,892 of which securities lending and reverse repurchase agreements . . . Due from other business units.. . ._ 107,7711,837 78,3031,894 38(3) 69,5301,185 56,9481,377 (2) Due from customers ...... 70,22 1 61,522 14 45,304 44,743 1 of which securities lending and reverse repurchase agreements . . . . 37,140 28,634 30 23,96 1 20,825 15 Mortgages ...... 9,658 7,178 35 6,23 1 5,220 19 Securities and precious metals trading portfolio 108,389 100,963 (2:) 69,928 73,428 (5) Financial investments . . . . . 7,343 10,072 4,737 7,325 (35) Participations ...... 754 436 73 486 317 53 Tangible fixed assets . . . . . 2,372 1,947 22 1,530 1,416 Goodwill ...... 526 535 (2) 339 389 Uh Accrued income and prepaid expenses . . 6,895 6,845 4,448 4,978 (11) Other assets...... 43,732 49,555 (I:, 28,214 36,040 (24 of which replacement value of derivatives 40,262 46,347 (13) 25,975 33,707 (23) Total Assets ...... 429,133 399,708 7 276,860 290,697 (5) Money market liabilities . . . . 18,877 19,923 (5) 12,185 14,489 (16) Due to banks ...... 215,904 185,335 16 139,293 134,789 3 of which securities borrowing and repurchase agreements . . . . . 66,894 74,915 (11) 43,157 54,484 (21) Due to other business units ...... 17,722 16,350 8 11,434 11,89: (4) Due to customers, in savings and investment deposits ...... _ . 134 180 (26) 86 131 (34) Due to customers, other ...... 77,48 1 71,157 9 49,988 51,751 (3) of which securities borrowing and repurchase agreements . . . . 36,373 22,714 60 23,466 16,519 Bonds and mortgage-backed bonds . . 33,233 33,464 (1) 21,441 24,337 (E) Accrued expenses and deferred income . 7,638 8,844 (14) 4,928 6,432 (23) Other liabilities ...... 44,715 53,007 (16) 28,848 38,55 1 (25) of which replacement value of derivatives 41,217 49,48 1 (17) 26,592 35,986 (26) Valuation adjustments and provisions . . 2,107 1,638 29 1,359 1,191 14 Capital ...... 11,312 9,810 15 7,298 7,135 2 of which minority interests...... 2,263 1,743 30 1,460 1,268 15 Total Liabilities ...... _ . . 429,133 399,708 7 276,860 290,697 (5)

Notes: (I) Translation of Swiss francs into U.S. dollars has been made at the rate of CHF I S5 = USD I .OO(the 30th June, 1999exchange rate). Such translation is provided solely for the convenienceof the reader. (2) Translation of Swiss francs into U.S. dollars has been made at the rate of CHF 1.375 = USD 1.00 (the 3 1st December, 1998 exchange rate). Such translation is provided solely for the convenienceof the reader. Figures may differ from those appearing in the Information Statement, which used a rounded exchange rate of CHF I .38 = USD I .OO.

B-8 The individual divisions performed during the first half of 1999 as follows: Equities Revenues increased 76 per cent., with ROE significantly exceeding 30 per cent. despite continued investment in personnel for further growth. CSFB’s customer businessesboosted revenues by over 100 per cent. from the previous year’s record first-half level, while derivatives and other equity businessesalso saw strong gains. Growth came from all geographic regions. Substantial gains in primary and secondary market shares and in research rankings around the world underpin this success. The positive impact of CSFB’s expanded technology industry activities particularly benefited Equities and Investment Banking.

Fixed Income & Derivatives (“FID’) In the first half of 1999, FID successfully tackled the major challenges of integrating Credit Suisse Financial Products (following the repurchase of the 20 per cent. minority stake from Swiss Reinsurance Company in April) and restructuring the division to accommodate tighter risk disciplines and capital availability. Despite reduced profit potential following this risk reduction, revenues were held at the record levels of the first half of 1998, achieving a 23 per cent. ROE. The merged activities in Interest Rate and Credit Products enjoyed substantial growth while Emerging Markets’ earnings remained comparable to the previous year’s first half. The strong performance in Latin America offset the weak results in Russia and complemented favourable results from other regions. A good recovery in Distressed Securities’ performance offset declines in Foreign Exchange and Money Markets. Real Estate Products did not contribute to profits (compared to 15 per cent. of CSFB’s total in the first half of 1998) reflecting precautionary reduction in risk concentration and increased provisioning levels. CSFB further strengthened its debt capital markets underwriting position, achieving a global ranking of fourth according to a leading industry publication.

Investment Banking (“IBD ‘7 Revenues increased 15 per cent. compared to the first half of 1998, with improved profitability despite large reductions in net interest income due to a smaller loan book and the resultant 66 per cent. reduction in capital employed since 1997 (currently below USD 1 billion). Underlying growth was robust, with M&A revenuesup 79 per cent. over the comparable 1998 period, and other investment banking product results also rising. CSFB has expanded its client coverage capacity in IBD substantially during the last 18 months. While this heavy investment implies an initial drag on profits, management believes that the resultant market share gains, complementing those of Equities, enhance CSFB’s prospects for growth and diversification of earnings.

Private Equity The investment of CSFB’s globally-managed private equity funds, totaling USD 3.6 billion, is now accelerating. The current level of revenues reflects limited harvesting of previous investments. Personnel was increased further in Europe.

B-9 ..-

Ratios/Key Performance Indicators CSFB Business Unit (Unaudited) For the six-month Deriod ended 30th June, 1999 1998 (in CHF millions except statistical data) Average allocated equity capital . . 9,910 10,567 Allocated equity capital (1st July, 1999 and 1st January: 1999) 1: . . 10,555 9,340 BIS tier 1 ratio * ...... 8.4% 8.4% Cost/income ratio ...... 73.2% 71.1% Return on averageequity capital . . 20.5% 21.0% Number of employees(30th June, 1999 and 3 lst’becember, 1998) 1: . . 14,394 14,126 Pre-tax margin ...... 20.1% 25.0% Personnelexpenses/total expenses ...... 77.0% 74.9% Personnelexpenses/total income 54.1% 51.7%

Note: * Applies to the Bank. Core capital includes (a) USD 125 million (CHF 194 million) perpetual non-cumulative non-voting preferred shares issued by a subsidiary and sold to unaffiliated investors and (b) USD 1,025 million (CHF 1,589 million) perpetual non-cumulative non-voting preferred shares held by Credit Suisse Group as direct investments in subsidiaries of the Bank.

Net County Exposure The following table shows, as of 30th June, 1999, CSFB’s aggregate net exposure in selected countries, after the inclusion of provisions. Net Exposure (in USD (In CHF Country millions) millions)(‘) Russia ._ ...... 792 1,228 Other Eastern Europe/Commonwealthof Independent States ...... 663 1,028 China and Hong Kong ...... 1,663 2,578 Indonesia, South Korea, Malaysia and Thailand ...... ~ . . 3,558 5,515 Brazil.. . . ._ . . _. . . ._ ...... 1,449 2,246 Other Latin America . . _...... 2,165 3,356

Note: (I) Translation of US dollars into Swiss francs has been made at the rate of CHF I .55 = USD I .OO(the 30th June, 1999 exchange rate). Such translations are provided solely for the convenience of the reader.

CSAM - Servicesjbr Institutional and Mutual Fund Investors Worldwide Performancewas strong with discretionary assetsunder managementgrowing 17.9 per cent. during the first six months of 1999.Revenues and net profit were CHF 462 million (USD 3 19 million) and CHF 111 million (USD 77 million), comparedto CHF 440 million (USD 303 million) and CHF 121 million (USD 83 million) for the sameperiod in 1998.Total assetsunder management,including advisory, amountedto CHF 336 billion (USD 217 billion) at 30th June, 1999, up 13 per cent. since the end of 1998. CSAM made significant progressin achieving its strategic objectives in the first half of 1999 with all five geographic units - Switzerland, Europe (excluding Switzerland), the Americas, Japan and Australia - posting increasedassets under managementand revenue.On 6th July, 1999, CSAM closed the acquisition of Warburg Pincus Asset Management (the “Warburg Acquisition”). This acquisition significantly enhances CSAM’s U.S. franchise, raising total assetsunder managementin the United Statesto USD 62.2 billion. See “Overview - Recent Developments” in the Information Statement.The results presentedherein for the first half of 1999 do not reflect the Warburg Acquisition. Other developments in the first half included the

B-10 successful launch of the alternative investment mutual fund product in the European retail market and increased penetration of the U.S. defined contribution market. Results jirst half 1999 Discretionary assets under management totalled CHF 250 billion, up 17.9 per cent. since the beginning of the year; 8.6 per cent. due to net new business and 9.3 per cent. from market appreciation. Mutual fnnds grew at 17.6 per cent., while fee income increased by only 1 per cent. owing to the shift in mutual fund revenuesto the Credit SuisseGroup ’s distribution channels. Total revenue growth of 5 per cent. was driven primarily by a higher level of assetsunder management, with advisory fees up 13.6 per cent., offset by nearly flat mutual fund fees. Operating expenseswere CHF 3 19 million (USD 220 million) versus CHF 287 million (USD 195 million) for the same period in 1998, an increase of 11.1 per cent., growing faster than revenue for the period. This increase reflected significant planned growth initiatives, investment spending on information technology and development of the European retail business.

Income Statement CSAM Business Unit (Unaudited) For the six months ended 30th June, 1999 1998 % 1999 1998 O/o Change (USD m)(l) (USD rn)(‘) Change -(CHF m) ~(CHF m) - - - - Management and advisory fees . . . 1. 328 289 13 226 197 15 Net mutual fund fees ...... 118 117 81 80 34 11 23 Other revenues ...... ~ 16 - - (5:) - - - (5:) Revenue ...... 462 440 5 318 300 6 Personnel expenses .. . . 184 167 10 127 114 11 93 82 13 Other operating expenses ...... - 135 - 120 - 13 - - - 287 11 220 196 12 Total Operating Expenses ...... - 319 - ~ - - - Gross Operating Profit...... 143 153 (7) 98 104 (6) Depreciation and write-offs on non-current assets 5. 5 0 3 3 - of which amortisation of goodwill . . . . 1 0 1 0 0 0 Valuation adjustments, provisions and losses - 0 - 0 - - - - - Profit before Extraordinary Items and Taxes 138 148 (7) 95 101 (9) Extraordinary income ...... 0 0 - 0 0 - Extraordinary expenses ...... 5 0 0 - 22 27 (19) 1: 18 Taxes ...... ------(17) Net Profit ...... 111 121 (8) 77 83 (7) 0 - 0 0 - of which minority interests.. . . - 0 - - - - - Net Profit (after minority interests) . 111 121 (8) 77 83 (7) - - ~- - ~- -

Notes: (I) Translation of Swiss francs into U.S. dollars has been made at the rate of CHF I .45 = USD I .OO(the 30th June, I999 six-month average exchange rate). Such translation is provided solely for the convenience of the reader. (2) Translation of Swiss francs into U.S. dollars has been made at the rate of CHF I .47 = USD 1.00 (the 30th June, 1998 six-month average exchange rate). Such translation is provided solely for the convenience of the reader.

B-11 Ratios/Key Performance Indicators CSAM Business Unit (Unaudited) For the six months ended 30th June. 1999 I998 fin CHF millions except statistical data) Average allocated equity capital 241 157 Allocated equity capital (1 st July, 1999 and 1st January, 1999) 1: 1: 294 170 Cost/income ratio ...... 70.1% 44.4% After-tax profit/average AUM .. . . 6.9 bp 8.5 bp Number of employees (30th June, 1999 and 3 lst’becember, 1998) 1: 1: 1,644 1,577 Pre-tax margin ...... ~...... 28.8% 33.6% Staff expenses/total expenses ...... 57.7% 58.2% Staff expenses/total income . . _...... 39.8% 38.0% Total assets under management CHF billion (30th June, 1999 and 3 1st December, 1998) ...... _ ...... 336 297 Total discretionary funds CHF billion (30th June, 1999 and 3 1st December, 1998) ...... 250 212 Total mutual funds distributed CHF billion (30th June, 1999 and 3 ;it December, 1998) 87 74 Total advisory assets CE& billfbn (3&h Jie, 1999 and3 1st December, 1998) 86 85 Growth in assetsunder management...... 13.1% 12.0% Growth in discretionary assetsunder management ...... 17.9% 13.0% of which volume ...... ~...... 8.6% 2.9% of which performance . . .. ._ . . ~. ._ . . . . 9.3% 10.1%

Year 2000 Year 2000 preparations for CSFB and CSAM are proceeding on schedule, with critical-system readiness complete for both business units and non critical systems 97 per cent. complete at CSFB and 96 per cent. complete at CSAM. Contingency and rollover weekend planning is on schedule, and intensive industry and partner testing is proceeding, with 192 tests completed and 106 more planned at CSFB, and 42 tests completed and 11 more planned at CSAM. In addition, both CSFB and CSAM have participated in numerous customer, industry group and bilateral testing initiatives to ensure as smooth a transition as possible. See “The Bank - Information Systems - Ye& 2000” in the Information Statement.

Legal Proceedings and Regulatory Examinations The Financial Supervisory Agency of Japan (the “FSA”) recently completed a formal, on-site examination of the businesses of the Bank, including certain of its subsidiaries in Japan. During the examination, the FSA examiners questioned certain derivatives and other transactions entered into by the Bank in Japan and inquired into certain supervisory and other issues. Shortly after the commencement of the FSA examination, the management of Credit Suisse Group, the Bank’s parent, became aware of rumours of misconduct by some of the Bank’s employees in connection with the response to the examination. After a preliminary review by Credit Suisse Group’s internal audit department, Credit Suisse Group promptly engaged outside counsel, Wilmer, Cutler & Pickering, to conduct a thorough and independent investigation that disclosed that several managers and other members of the Bank’s staff attempted to interfere with the FSA examination during its initial stages by concealing and/or destroying documents. The independent report emphasised that Credit Suisse Group promptly acted to discover any misconduct and to disclose any wrongdoing to the regulatory authorities in Japan. Credit Suisse Group and the Bank have accepted responsibility for remedial measures in various parts of their businessesin Japan and, having due regard to applicable law and in consultation with the FSA, Credit Suisse Group and the

B-12 Bank have taken disciplinary action against certain employees in Tokyo and London, including termination of employment. On 29th July, 1999, Credit Suisse Group and the Bank were notified of the administrative sanctions imposed by the FSA and the Financial Reconstruction Commission in Japan (“FRC”) as a result of the examination. The administrative order specifically revokes the license to do business in Japan of the Tokyo Branch of Credit SuisseFinancial Products (“CSFP”), effective on 30th November, 1999. Prior to that date, there will be a transition period commencing on 5th August, 1999 and ending on 29th November, 1999, during which the CSFP Tokyo Branch’s banking license will be restricted to activity required for the transfer or unwinding of all existing branch business in an orderly manner, and to carrying out operations incidental thereto. The FRC has confirmed that until the revocation comes into effect, no liquidator will be appointed in respect of CSFP’s Tokyo Branch. Other sanctions were imposed on the Tokyo Branch of the Bank and certain of its other subsidiaries, including the suspensionof new business in certain of the trust and private banking operations in Japan with the right to reapply to engage in such operations after one year, the suspensionof new business in certain of the securities and investment advisory operations in Japanfor one month, and the establishment at certain of these entities of additional internal control procedures and other requirements. Pursuant to the laws of Japan, the FSA and FRC have the power to refer matters to other Japaneseauthorities, including the Tokyo Public Prosecutor, and regulatory authorities in other jurisdictions have or may undertake their own inquiries into the activities that were the subject of the FSA examination. Management of the Bank does not believe that the aggregate liability or other consequencesresulting from regulatory examinations and pending or threatened legal proceedings against the Bank is likely to have a materially adverse effect on the consolidated financial condition of the Bank.

B-13 REGISTERED OFFICE OF THE ISSUER Credit Suisse First Boston, London Branch Five Cabot Square London El4 4QR

TRUSTEE PRINCIPAL PAYING AGENT Chase Manhattan Trustees Limited The Chase Manhattan Bank Trinity Tower Trinity Tower 9 Thomas More Street 9 Thomas More Street London El 9YT London El 9YT

PAYING AGENT CALCULATION AGENT Chase Manhattan Bank Luxembourg S.A. Credit Suisse Financial Products 5 Rue Plaetis One Cabot Square L-2338 Luxembourg London E 14 4QJ

LISTING AGENT Kredietbank SA Luxembourgeoise 43 Boulevard Royal L-2955 Luxembourg

AUDITORS To the Bank KPMG Klynveld Peat Marwick Goerdeler SA Badenerstrasse 172 CH-8004 Zurich

LEGAL ADVISERS To the Bank To the Manager and the Trustee Hornburger RechtsanwIilte Allen & Overy Weinbergstrasse 56158 One New Change CH-8006 Zurich London EC4M 9QQ