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New York, NY – Donaldson, Lukfin & Jenrette, Inc. (NYSE: DLJ) said today that its net
income for the fourth quarter of 1999 and for the full year were the strongest-ever in
the firm’s forty-year history. Fourth quarter net income was a record $191.2 million, or
$1.35 per diluted share, nearly tripling the $68.7 million, or $0.47 per diluted share,
reported for the comparable quarter of 1998. For the full year, DLJ earned a record
$600.7 million, or $4.18 per diluted share, 62 percent more than the $370.8 million,
or $2.65 per diluted share, reported for 1998.
Return on average equity for the fourth quarter of 1999 increased to 21.9 percent.
For the full year, return on average equity was 19.1 percent. At December 31, 1999, book
value per common share was $27.46, or 34 percent greater than at the end of 1998.
Fourth Quarter Highlights
DLJ’s total revenues for the fourth quarter of 1999 increased 66 percent to a
record $2.1 billion, as the firm posted record levels of commissions and fee income
that complimented strong gains in dealer and trading revenues and underwriting income.
Fee income increased 81 percent, commissions rose 57 percent and underwriting income
was 20 percent higher than during the fourth quarter a year ago. Net revenues, or
total revenues minus interest expense, rose 73 percent to a record $1.7 billion.
Full Year Highlights: Strong Gains In M&A, High Yields And IPOs
DLJ’s total revenues for 1999 rose 32 percent to a record $7.1 billion, and net revenues
rose 41 percent to $5.6 billion, as the firm significantly expanded its market share in
major components of its investment banking businesses. DLJ’s market share in mergers and
acquisitions increased dramatically. The firm’s share of completed merger and acquisition
assignments rose from 4.9 percent to 13.9 percent to rank the firm sixth on a global basis.
As measured by completed U.S. assignments, the firm’s market share increased from 7.2
percent to 19.5 percent to rank DLJ in fourth place. Consequently, fee income earned
by DLJ’s global Mergers & Acquisitions Group increased 79 percent from 1998’s then-record
levels to a record $883 million in 1999.
For the seventh year in a row, DLJ was the number-one-ranked underwriter of high-yield bonds. Most
importantly, despite an industrywide slowdown in high-yield new issuance, DLJ increased its market
share as a lead underwriter. In 1999, DLJ was the lead manager of $17.5 billion of high-yield bonds
and accounted for 18.3 percent of the dollar volume of all new issues, up from 15.4 percent in 1998.
As a lead manager of initial public offerings, DLJ rose from eighth place in 1998 to fifth in 1999,
increasing its market share by 70 percent from 3.3 percent in 1998 to 5.6 percent in 1999.
Commissions increased 41 percent to a record $1.2 billion in 1999, reflecting the strength of the firm’s
global institutional equities businesses as well as the cumulative impact of its Pershing correspondent
clearing business, along with its 425-broker high-net-worth group and its online broker, DLJdirect.
DLJ’s 30-year-old-venture capital unit, the Sprout Group, accounted for the majority of the year’s
investment gains. Sprout’s investment record, particularly in the technology and internet-related sectors,
generated record portfolio gains and distributions in 1999.
In a joint statement, Joe L. Roby, Chief Executive Officer of Donaldson, Lufkin & Jenrette, Inc., and
John S. Chalsty, DLJ’s Chairman, said, “DLJ developed tremendous momentum in 1999. While favorable market
conditions helped the securities industry overall, DLJ achieved significant market share gains and record
profits that underscore the inherent balance of our business mix. We finished the year with outstanding
fourth quarter results that propelled DLJ to its strongest year ever. Virtually all of our businesses
enjoyed record results in 1999.”
They noted, “Our international businesses also continued to grow in 1999. Net revenues from DLJ’s
international activities doubled to a record $782.2 million this year. We opened new offices in Germany,
Taiwan, Singapore and South Korea during the year, and the number of DLJers employed outside of the
United States increased from 1,400 to 1,700.”
DLJdirect 1999 Earnings Increase Fivefold To $6.9 Million; Revenues Double
DLJdirect (NYSE: DIR), Donaldson, Lufkin & Jenrette’s online brokerage service, reported a
102 percent increase in net revenues to a record $238.1 million for the year ended December 31, 1999,
versus $117.9 million for the year ended December 31, 1998. Net income for the year ended December 31, 1999
grew fivefold to $6.9 million or $0.07 per share (pro forma diluted), from $1.5
million or $0.01 per share (pro forma diluted), for the same period in 1998.
DLJdirect set new records for the fourth quarter of 1999.
Quarterly net revenues more than doubled to a record $76.3 million, compared to $35.4 million
reported for the comparable period one year ago, and $54.9 million reported for the third quarter of 1999.
DLJdirect reported a net loss of $2.0 million, or $0.02 per
share (diluted), for the quarter ended December 31, 1999. This compared
with net income of $1.8 million, or $0.02 per share (pro forma diluted),
for the fourth quarter of 1998, and a net loss of $3.3 million,
or $0.03 per share (diluted), for the third quarter of 1999. Highlighting
the growth of the business and the magnitude of increased marketing
initiatives, pre-marketing income, before taxes and equity in the
net loss of a joint venture, reached a quarterly record of $24.7
million, versus $8.2 million for the fourth quarter of 1998 and
$14.4 million for the third quarter of 1999.
About Donaldson, Lufkin & Jenrette
Donaldson, Lufkin & Jenrette is a leading integrated investment
and merchant bank serving institutional, corporate, government and
individual clients. DLJ’s businesses include securities underwriting;
sales and trading; investment and merchant banking; financial advisory
services; investment research; venture capital; correspondent brokerage
services; online, interactive brokerage services; and asset management.
Founded in 1959 and headquartered in New York City, DLJ employs
approximately 10,200 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 worldwide web site at http://www.DLJ.com. The firm’s
world headquarters are located at 277 Park Avenue, New York, NY
10172; telephone number 212-892-3000.
4Q 1999 Report (PDF format)
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