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Exhibit 99.1
FOR IMMEDIATE RELEASE
Media Contact: Investor Contact:
Catherine M. Conroy Kevin Zuccala
212-892-3275 212-892-4693
DLJ SECOND QUARTER NET $162.2 MILLION, OR $1.15 PER SHARE
SIX-MONTH NET A RECORD $407.4 MILLION, OR $2.87 PER SHARE
NEW YORK, NY, JULY 19, 2000 - Donaldson, Lufkin & Jenrette, Inc. (NYSE:
DLJ) today reported second quarter net income of $162.2 million, or $1.15 per
diluted share, compared to the $165.7 million, or $1.14 per diluted share,
reported for the second quarter of 1999. For the six-month period ended June 30,
2000, DLJ's net income was a record $407.4 million, or $2.87 per diluted share,
42 percent and 44 percent greater respectively than results for the comparable
six-month period in 1999.
DLJ's total revenues for the second quarter of 2000 were $2.4 billion,
31 percent greater than the $1.8 billion in the second quarter of 1999.
Second-quarter net revenues, or total revenues minus interest expense, rose 9
percent to $1.6 billion. Return on average common equity was 16.5 percent for
the second quarter of 2000 and 21.3 percent for the first six months of 2000. At
June 30, 2000, book value per common share was $30.50.
Mr. Joe L. Roby, President and Chief Executive Officer of Donaldson,
Lufkin & Jenrette, Inc., said, "Given the industrywide weakness in new issue
underwriting, particularly high-yield, we are pleased with DLJ's second quarter
results. This was the third strongest quarter ever in DLJ's 40-year history and
it highlights both the diversity of our revenue sources and our ability to serve
clients' needs in even the most volatile market environments."
He continued, "DLJ's Financial Services Group led the firm in revenues
and pretax profits during the second quarter of this year and generated net
revenues of $567.2 million. Thanks to a strong performance by our Pershing
Division, the group's pretax income
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increased approximately 30 percent to $108.6 million. Within our Banking Group,
DLJ's mergers and acquisitions practice and our merchant banking and private
equity businesses accounted for the majority of the quarter's 55 percent rise in
fee income to $514.8 million, which more than offset the second quarter's 53
percent decline in underwriting income."
SECOND QUARTER HIGHLIGHTS
FINANCIAL SERVICES GROUP PRETAX UP 30 PERCENT: Earning pretax income of
$108.6 million, an increase of 30 percent over the comparable quarter a year
ago, DLJ's Financial Services Group - which represents DLJ's retail-related
businesses - led the firm in profitability for the second quarter of 2000. The
group, which consists of DLJ's Pershing correspondent clearing businesses, DLJ's
450-broker Investment Services Group, its $30 billion Asset Management Group and
its DLJdirect and iNautix units, also saw its net revenues increase 30 percent
in the second quarter of 2000 to $567.2 million.
As of June 30, 2000, financial intermediaries around the world
maintained more than three million individual accounts aggregating nearly $416
billion at Pershing. Revenues earned by DLJdirect, DLJ's online brokerage
service, increased 40 percent to $84 million for the second quarter of 2000.
DLJdirect recorded a net loss of $6.6 million this quarter, largely as a result
of costs related to its international expansion.
M&A AND PRIVATE EQUITY FEES DRIVE BANKING GROUP: DLJ's Banking Group
reported pretax income of $96.4 million for the second quarter of 2000. The
Banking Group accounted for the majority of the $515 million of fee income
earned during the quarter and derived primarily from the firm's role in merger
and acquisition assignments. Fee income from these assignments increased 34
percent over both the comparable quarter a year ago and the first quarter of
2000. Fee income attributable to DLJ's role in raising private equity funds for
independent fund managers and acting as an agent in private equity placements
almost doubled during the second quarter.
GLOBAL EQUITIES GROUP PRETAX DOUBLES AS EUROPEAN BUSINESS EXPANDS:
DLJ's Global Equities Group reported pretax income of $49.1 million during the
quarter, almost twice the $24.8 million reported for the comparable quarter a
year ago. A significant portion of this increase results from sharply increased
revenues generated by the firm's new international equities business.
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FIXED INCOME GROUP POSTS $30 MILLION PRETAX: Pretax income generated by
DLJ's Fixed Income Group declined to $30 million during the second quarter of
2000, as higher interest rates impacted DLJ's high-yield and other underwriting
businesses and overall secondary trading revenues. Industrywide, the volume of
new issues of U.S. high-yield bonds fell to $8 billion in the second quarter of
2000 from $31.4 billion during the second quarter of 1999 and $16.8 billion
during the first quarter of 2000. At June 30, 2000, DLJ had a 16 percent market
share as an underwriter of new U.S. issues of high-yield bonds and a 15 percent
share of the global high-yield underwriting market.
INTERNATIONAL REVENUES INCREASE 39 PERCENT: As a direct result of DLJ's
ongoing international expansion, revenues from non-U.S. business activities
increased by 39 percent year over year during the second quarter to $312
million. The major contributors to this increase were DLJ's international
equities and international investment banking businesses.
SIX-MONTH SUMMARY
For the first six months of 2000, DLJ earned record net income of
$407.4 million, or $2.87 per diluted share, up 42 percent and 44 percent
respectively from the comparable six-month period in 1999.
Two of DLJ's four major business groups - Financial Services and Global
Equities - reported record pretax profits for the first six months of the year.
DLJ's Financial Services Group earned record pretax profits of $279 million, 60
percent higher than during the first half of 1999, while DLJ's Global Equities
Group saw its pretax income nearly triple, rising to a record $143 million.
DLJ's Banking Group enjoyed its second best six-month performance as its pretax
profits increased 23 percent to $251 million.
Total revenues for the first half of 2000 grew 47 percent to a record
$4.9 billion and net revenues rose 34 percent to $3.4 billion, as DLJ achieved
record levels in most revenue categories. Three of DLJ's four major business
groups - Banking, Financial Services and Global Equities - reported record net
revenues for the first six months of the year. Six-month net revenues generated
by DLJ's international business activities increased 91 percent to $697 million.
Donaldson, Lufkin & Jenrette is a leading integrated investment and
merchant bank serving institutional, corporate, government and individual
clients. DLJ's businesses include
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securities underwriting; sales and trading; investment and merchant banking;
financial advisory services; investment research; venture capital; correspondent
brokerage services; online, interactive brokerage services; and asset
management. Founded in 1959 and headquartered in New York City, DLJ employs
approximately 11,300 people worldwide and maintains offices in 13 cities in the
United States and 16 cities in Europe, Latin America and Asia. The company has
two classes of common stock trading on the New York Stock Exchange. Shares
trading under the ticker symbol "DLJ" represent Donaldson, Lufkin & Jenrette,
Inc. Shares trading under the ticker symbol "DIR" track the performance of
DLJdirect, its online brokerage business. For more information on Donaldson,
Lufkin & Jenrette, refer to the company's World Wide Web site at www.DLJ.com.
The firm's world headquarters are located at 277 Park Avenue, New York,
NY 10172; telephone number (212) 892-3000.
FINANCIAL TABLES FOLLOW
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DONALDSON, LUFKIN & JENRETTE, INC. AND SUBSIDIARIES
Consolidated Summary of Operations (Unaudited)
(in thousands, except % and per share amounts)
<TABLE>
<CAPTION>
-----------------------------------------------------------------
QUARTERS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
2000 1999 2000 1999
-----------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues:
Commissions $ 369,483 $ 291,112 $ 841,502 $ 572,104
Underwritings 191,271 409,454 441,896 666,368
Fees 514,811 332,673 936,798 619,748
Interest-net 1,027,184 499,902 1,840,846 976,563
Principal transactions-net:
Trading 214,252 218,418 599,008 392,463
Investment 19,470 25,155 149,359 28,179
Other 38,881 33,802 58,935 48,541
------------ ----------- ----------- -----------
Total revenues 2,375,352 1,810,516 4,868,344 3,303,966
------------ ----------- ----------- -----------
Costs and expenses:
Compensation and benefits 848,261 800,009 1,914,323 1,435,723
Interest 822,727 380,651 1,426,817 736,604
Brokerage, clearing, exchange
fees, and other 88,896 76,326 192,693 147,547
Occupancy and related costs 52,996 43,032 101,890 84,120
Communications and technology 126,802 102,054 250,288 193,037
Other operating expenses 178,170 149,444 335,633 250,935
------------ ----------- ----------- -----------
Total costs and expenses 2,117,852 1,551,516 4,221,644 2,847,966
------------ ----------- ----------- -----------
Income before provision for
income taxes 257,500 259,000 646,700 456,000
------------ ----------- ----------- -----------
Provision for income taxes 95,300 93,350 239,300 168,700
------------ ----------- ----------- -----------
Net income 162,200 165,650 407,400 287,300
Dividends on preferred stock 5,289 5,289 10,578 10,578
------------ ----------- ----------- -----------
Earnings applicable to common shares $ 156,911 $ 160,361 $ 396,822 $ 276,722
============ =========== =========== ===========
EARNINGS APPLICABLE TO COMMON SHARES (1)
DLJ $ 158,096 $ 160,312 $ 395,570 $ 276,673
=========== =========== =========== ===========
DLJdirect $ (1,185) $ 49 $ 1,252 $ 49
=========== =========== =========== ===========
EARNINGS PER SHARE (2):
DLJ
Basic $ 1.24 $ 1.28 $ 3.10 $ 2.22
Diluted $ 1.15 $ 1.14 $ 2.87 $ 1.99
=========== =========== =========== ===========
DLJdirect
Basic $ (0.06) $ 0.00 $ 0.07 $ 0.00
Diluted $ (0.06) $ 0.00 $ 0.07 $ 0.00
=========== =========== =========== ===========
WEIGHTED AVERAGE COMMON SHARES (2):
DLJ
Basic 127,826 125,567 127,418 124,783
Diluted 137,267 140,400 137,836 139,313
=========== =========== =========== ===========
DLJdirect
Basic 18,400 18,400 18,400 18,400
Diluted 18,400 20,423 18,401 20,423
=========== =========== =========== ===========
DLJdirect
Net income (loss) (included in consolidated
earnings applicable to common shares) $ (6,621) $ 5,076 $ 6,993 $ 12,249
=========== =========== =========== ===========
</TABLE>
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DONALDSON, LUFKIN & JENRETTE, INC. AND SUBSIDIARIES
CONSOLIDATED SUMMARY OF OPERATIONS (UNAUDITED)
(in thousands, except % and per share amounts)
<TABLE>
<CAPTION>
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QUARTERS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
2000 1999 2000 1999
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<S> <C> <C> <C> <C>
DLJ INC.
NET REVENUES BY OPERATING GROUP:
Banking $ 461,632 $ 474,552 $ 1,009,667 $ 797,033
Fixed Income 163,820 317,455 409,000 526,887
Equities 359,131 251,926 809,123 465,334
Financial Services 567,248 437,123 1,242,714 843,363
Elimination and other 794 (51,191) (28,977) (65,255)
----------- ----------- ----------- -----------
Total Net Revenues $ 1,552,625 $ 1,429,865 $ 3,441,527 $ 2,567,362
=========== =========== =========== ===========
DLJ INC.
INCOME BEFORE INCOME TAXES BY
OPERATING GROUP:
Banking $ 96,435 $ 126,008 $ 250,842 $ 204,313
Fixed Income 30,055 110,823 111,034 173,629
Equities 49,100 24,754 143,153 49,474
Financial Services 108,558 83,769 279,069 174,429
Elimination and other (26,648) (86,354) (137,398) (145,845)
----------- ----------- ----------- -----------
Total Income before Income Taxes $ 257,500 $ 259,000 $ 646,700 $ 456,000
=========== =========== =========== ===========
NET REVENUES BY GEOGRAPHIC LOCATION:
Domestic $ 1,240,581 $ 1,204,886 $ 2,744,181 $ 2,201,423
International 312,044 224,979 697,346 365,939
----------- ----------- ----------- -----------
Total Net Revenues $ 1,552,625 $ 1,429,865 $ 3,441,527 $ 2,567,362
=========== =========== =========== ===========
DLJ INC.
BALANCE SHEET DATA AT END OF PERIOD:
Long-term borrowings (4) $ 7,400,000 $ 4,500,000
Redeemable trust securities $ 200,000 $ 200,000
Total stockholders' equity (2) $ 4,300,000 $ 3,600,000
Book value per common share
outstanding
DLJ common stock $ 30.50 $ 25.19
Common shares and RSUs outstanding
at end of period
DLJ common stock 127,857 126,820
DLJdirect common stock 18,400 18,400
DLJ INC.
OTHER FINANCIAL DATA AT END OF PERIOD:
Ratio of long-term borrowings to total
capitalization (5) 59.3% 53.1%
Return on average common stockholders'
equity (6) 16.5% 22.2% 21.3% 20.1%
</TABLE>
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DONALDSON, LUFKIN & JENRETTE, INC. AND SUBSIDIARIES
CONSOLIDATED SUMMARY OF OPERATIONS (UNAUDITED)
(in thousands, except % and per share amounts)
(1) DLJdirect Common Stock tracks the separate performance of the Company's
existing online discount brokerage and related investment services
business ("Tracking Stock"). Prior to issuing DLJdirect Common Stock, the
Company's existing Common Stock was designated as DLJ Common Stock and
reflects the performance of the Company's primary businesses, i.e.,
Banking, Fixed Income, Equities and Financial Services, plus a 100%
interest in DLJdirect. These operations are referred to as DLJ. On May 28,
1999, ("the closing date"), the Company issued in an initial public
offering, 18.4 million shares of DLJdirect Common Stock. The shares of
DLJdirect Common Stock have no voting rights, except in certain limited
circumstances.
Earnings applicable to common shares for DLJ includes a 100% retained
interest in DLJdirect for periods prior to the closing date and 82.1% for
subsequent periods. Quarterly results reported by DLJ prior to the closing
date were not affected by the issuance of the tracking stock.
(2) Earnings per common share amounts for periods after the closing date have
been calculated using the two class method. The two class method is an
earnings allocation formula that determines the earnings per share for
each class of common stock according to participation rights in
undistributed earnings.
For DLJ, basic earnings per common share represents earnings applicable to
common shares (including its retained interest in DLJdirect) divided by
the weighted average actual common shares outstanding, i.e., excluding the
effect of potentially dilutive securities. Diluted earnings per common
share include the dilutive effects of the Restricted Stock Unit Plan and
the dilutive effect of options calculated under the treasury stock method.
For DLJdirect, basic earnings per share is calculated by dividing earnings
applicable to tracking stock by the weighted average actual common shares
outstanding. Diluted earnings per common share include the dilutive effect
of options calculated under the treasury stock method. DLJ's retained
interest excludes the effect of the 10 million shares of common stock that
have been reserved for issuance under the DLJdirect Stock Option Plan.
Earnings per share for DLJdirect for periods prior to the closing date are
not presented as such amounts are not meaningful.
(3) Interest-net is net of interest expense to finance U.S. Government, agency
and mortgage-backed securities of $1,081.9 million, $789.6 million,
$2,052.1 million and $1,494.9 million, respectively.
(4) In April 2000, the Company submitted an Offering Circular with the London
Stock Exchange which enables it to issue up to 1.0 billion Euro
Medium-Term Notes. During the quarter, the Company issued $890.4 million
medium-term notes with various maturity dates through 2005 from this
program. In addition, the Company issued $354.0 million medium-term notes
with various maturity dates through 2002.
(5) Long-term borrowings and total capitalization (the sum of long-term
borrowings, preferred stock, and stockholders' equity) exclude current
maturities (one year or less) of long-term borrowings.
(6) Return on average common stockholders' equity is calculated on an
annualized basis for periods of less than one full year using a monthly
average and is based on earnings applicable to common shares.
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