Janus Announces Second Quarter 2004 Results; Investment Performance Continues to Improve, Balance Sheet Significantly Stronger

Company Release - 7/22/2004 8:01 AM ET
    DENVER--(BUSINESS WIRE)--July 22, 2004--

      Firm Reports Quarterly Earnings of $0.56 per Diluted Share,
             $0.17 per Diluted Share on an Adjusted Basis

Janus Capital Group Inc. (NYSE:JNS) today reported second quarter net income of $130.2 million, or $0.56 per diluted share, compared with net income of $47.5 million, or $0.21 per diluted share, in the same quarter in 2003. This year's second quarter results include a pretax gain of $228.0 million on the sale of Janus' remaining 9% stake in DST Systems, Inc. (DST), and pretax charges related to Janus' debt restructuring ($55.5 million), the mutual fund investigation ($6.0 million) and severance ($21.6 million).

To provide a more comparable basis for evaluating Janus' operating results and financial performance over time, Janus management analyzes historical results after adjusting for certain items that are not ongoing or are non-operational in nature. The company believes that excluding these items is useful to both management and investors. (Please see reconciliation of such items on pages 7 through 9 of this release.) Excluding the previously mentioned items, second quarter 2004 adjusted net income totaled $40.5 million, or $0.17 per diluted share, compared with adjusted net income of $50.5 million, or $0.22 per diluted share, in the second quarter of 2003. Included in the second quarter 2003 earnings of $0.22 per diluted share is $0.05 per diluted share of equity earnings from DST.

Janus' investment management business reported second quarter 2004 operating income and margins of $51.8 million and 22.0%, respectively. Excluding the previously mentioned charges, operating income and margins totaled $79.4 million and 33.8%, respectively, during the second quarter 2004 compared with $76.9 million and 31.3% in the second quarter 2003.

CEO's Perspective

Janus Chairman and CEO Steve Scheid said the company made good strategic progress during the second quarter by improving fund performance, strengthening its balance sheet and streamlining its business model. He also noted that Janus continues to pursue final approval of the agreements in principle reached with regulators and that, effective July 1, the company implemented certain management fee cuts required by some of the regulators. Now that Janus has divested its non-strategic assets, reduced its debt and almost concluded the regulatory matters, Scheid said the firm can focus exclusively on its core business.

"In everything we do, we're putting investors first," Scheid said. "That's our litmus test -- whether we're introducing new products, deciding against reopening Janus Twenty Fund or making a personnel change to improve results."

Scheid said he was encouraged by recent votes of confidence the firm received from Morningstar, which upgraded its outlook on Janus, and from Moody's, which affirmed the company's credit rating. As performance continues to improve, he said Janus is looking ahead.

"We're investing for the future because we believe in Janus," Scheid said. "We're putting additional emphasis on building our institutional and broker-dealer businesses and offering new products to investors who work with financial advisers. We're also investing in our brand by introducing a new ad campaign this fall."

Scheid said the fee reductions implemented July 1 and the decline in assets through the end of the second quarter are likely to adversely affect future quarter results by approximately $0.03 per share (compared to second quarter adjusted earnings of $0.17 per diluted share). This scenario assumes that Janus' assets remain consistent at their June 30, 2004 level of $135 billion, he said.

    Recent Developments

    Debt Restructuring

On April 26, 2004, Janus completed the exchange of approximately $465.1 million of senior notes (previously maturing in 2006 and 2009) for $527.4 million of 6.119% senior notes due 2014. On May 19, the company's wholly owned subsidiary, Capital Group Partners, purchased $445.0 million of the New Senior Notes. This transaction, combined with the retirement of $84.0 million of Liquid Yield Option Notes on April 30, 2004, reduced Janus' consolidated debt to $378.2 million at June 30 from $851.8 million at March 31, 2004. As a result of these transactions, Janus recorded a second quarter non-operating charge of approximately $55.5 million, or $0.14 per diluted share.

DST Systems, Inc.

On June 16, 2004, Janus sold its remaining 7.4 million shares of common stock of DST to an unrelated third party. Janus received proceeds of $336.2 million and recorded a gain of $228.0 million, or $0.60 per diluted share.

Investment Management Performance

Janus continued to deliver improved performance in the second quarter in its primary fund family, Janus Investment Funds. Based on total returns as of June 30, 2004, approximately 70% of those funds were in the top half of their Lipper categories on a 1-year basis and approximately 57% ranked in the first quartile. In addition, for the first time in 4 1/2 years, all seven of the company's domestic growth funds -- the core of Janus' franchise -- finished in Lipper's top quartile on the same 1-year basis based on total returns. On a three-year basis, approximately 55% of the Janus Investment Funds ranked in the top half of their Lipper categories based on total returns as of June 30, 2004 -- up from 33% as of June 30, 2003.

"I'm encouraged by the strong results we've delivered and confident that by investing in our business we can continue to improve performance," said Janus President and Chief Investment Officer Gary Black. "In the months ahead, we plan to expand our research team and increase our company coverage from 1,000 stocks to 1,200."

Black also said he's optimistic that the recent appointment of Jason Yee as portfolio manager of Janus Worldwide Fund will help improve that fund's performance. Yee's top-performing Janus Global Opportunities Fund recently passed its three-year anniversary and earned an overall five-star rating from Morningstar out of 273 world stock funds based on risk-adjusted returns as of June 30, 2004. (The Overall Morningstar Rating(TM) for a fund is derived from a weighted average of the performance figures associated with its three-, five- and 10-year - if applicable - Morningstar Rating(TM) metrics.)

For the one-year period ended June 30, 2004, Janus Global Opportunities Fund outpaced its entire Lipper peer group, finishing 1st out of 320 global funds based on total returns. For the three-year period ended June 30, 2004, the fund beat 95% of its peers, ranking 11th out of 259 global funds based on total returns.

Investment Management Results -- Second Quarter 2004 vs. Second Quarter 2003

Second quarter 2004 average assets under management were $138.6 billion, compared with $143.1 billion for the comparable 2003 quarter, a decrease of 3.1%. This decrease in average assets under management and shifts in product mix resulted in a 4.2% decrease in revenue, from $245.5 million to $235.2 million.

Significant changes in expenses from the second quarter of 2003 include the following:

    --  Employee compensation and benefits increased $11.0 million
        during the current quarter. On an adjusted basis (see pages 7
        through 9), employee compensation and benefits declined $7.2
        million, primarily due to lower headcount and the final
        severance and retention bonuses paid in the second quarter of
        2003 related to the Stilwell - Janus reorganization. Incentive
        compensation increased slightly in the current quarter due to
        improved relative fund performance.

    --  Restricted stock compensation declined $1.7 million in the
        current quarter. On an adjusted basis, restricted stock
        compensation declined $5.1 million as a result of reduced
        amortization from the forfeiture of stock awards by former
        employees.

    --  Marketing and fulfillment increased primarily because of print
        and television advertising. The advertising-related increase
        of $4.5 million was offset by $2.2 million of lower
        institutional marketing and fulfillment charges in the current
        quarter.

    --  Distribution expenses declined $4.5 million, or 12.5%, as
        average assets under management distributed through the
        third-party or adviser-assisted segment declined at a higher
        rate than total assets under management.

    --  Depreciation and amortization decreased $4.5 million as past
        technology-related capital expenditures were fully depreciated
        during the second half of 2003.

    --  General, administrative and occupancy increased $6.2 million.
        Approximately $2.0 million of the increase was due to cash
        payments for certain third-party products and services
        previously acquired with soft dollars. The remaining
        difference primarily relates to increased occupancy-related
        costs from the company's new headquarters in Denver and the
        closure of a satellite office in Westport, Connecticut.

    --  Interest expense decreased $3.0 million as a result of the
        debt restructuring discussed earlier.

Investment Management Results -- Six Months Ended June 30, 2004 vs. 2003

Average assets under management for the first six months of 2004 were $143.5 billion, a 3.2% increase from the $139.0 billion for the same period last year. As a result, revenue increased from $476.7 million to $485.1 million. Operating expenses in the first six months of 2004 increased $88.5 million, from $336.3 million to $424.8 million. On an adjusted basis (see pages 7 through 9), operating expenses decreased $19.9 million from the comparable period in 2003, driven by declines in employee compensation, restricted stock compensation and depreciation.

Printing and Fulfillment Financial Results -- Second Quarter 2004

The printing and fulfillment business realized an operating loss of $3.6 million and a net loss of $2.2 million during the second quarter 2004. Compared with the first quarter 2004 results, the loss reflects a slight decline in operating margins as a result of increased operational and administrative expenses.

Stock Repurchase Authorization

A special committee of the company's board of directors agreed this week to a new authorization of up to $500.0 million to repurchase shares of Janus common stock through December 31, 2006. This new authorization replaces Janus' existing repurchase authorization, which expires July 25, 2004.

Second Quarter 2004 Earnings Call

Janus Capital Group will discuss its results during a conference call Thursday, July 22 at 11 a.m. Eastern Daylight Time. The call-in number will be 877-301-7574. (Anyone outside the U.S. or Canada should call 706-643-3623.) The slides used during the presentation will be available in the investor relations section of the Janus Capital Group Web site (www.janus.com) approximately 30 minutes prior to the call. For those unable to join the conference call at the scheduled time, an audio replay will be available on www.janus.com.

About Janus Capital Group Inc.

Based in Denver, Colorado, Janus Capital Group Inc. is a leading asset manager offering individual investors and institutional clients complementary asset management disciplines through the firm's global distribution network. Janus Capital Group consists of Janus Capital Management LLC, Enhanced Investment Technologies, LLC (INTECH), Bay Isle Financial LLC and Capital Group Partners. In addition, Janus Capital Group owns 30% of Perkins, Wolf, McDonnell and Company, LLC.

Please consider the charges, risks, expenses and investment objectives carefully before investing. For a prospectus containing this and other information, please call Janus at 1-800-525-3713 or download the file from www.janus.com. Read it carefully before you invest or send money.

Past performance is no guarantee of future results.

This press release includes statements concerning potential future events involving Janus Capital Group Inc. that could differ materially from the events that actually occur. The differences could be caused by a number of factors including those factors identified in Janus' Annual Report on Form 10-K for the year ended December 31, 2003, on file with the Securities and Exchange Commission (Commission file no. 001-15253). Many of these factors are beyond the control of the Company and its management. Any forward-looking statements contained in this release are as of the date on which such statements were made. The Company assumes no duty to update them, even if experience, unexpected events, or future changes make it clear that any projected results express or implied therein will not be realized.

For each fund with at least a three-year history, Morningstar calculates a Morningstar Rating(TM) based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a fund's monthly performance (including the effects of sales charges, loads, and redemption fees), placing more emphasis on downward variations and rewarding consistent performance. The top 10% of the funds in each category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars and the bottom 10% receive 1 star. (Each share class is counted as a fraction of one fund within this scale and rated separately, which may cause slight variations in the distribution percentages.) Janus Global Opportunities Fund was rated against the following numbers of U.S.-domiciled world stock funds over the following time period: 273 funds in the last three years. With respect to these world stock funds, Janus Global Opportunities received a Morningstar Rating(TM) of 5 stars for the three-year period as of June 30, 2004.

JANUS CAPITAL GROUP INC.
                       Non-GAAP Reconciliations
             (dollars in millions, except per share data)

Janus management analyzes historical results after adjusting for
certain items that are not ongoing or are non-operational in nature.
The company believes that excluding these items is useful to
management and investors because it provides a more comparable basis
for evaluating Janus' operating results and financial performance over
time. Internally, these adjusted results are used to evaluate the
performance of the company.

                           Three Months Ended June 30, 2004
                 -----------------------------------------------------

                                      Investment   Printing
                  Invst.   Non-GAAP   Management     and      Adjusted
                   Mgt.   Adjustments  Adjusted    Fulfllmnt.   Total
                 -------- ----------- -----------  ---------- --------
Revenues         $ 235.2  $        -       $235.2  $    23.6  $ 258.8

Operating
 expenses
 Employee
  compensation
  and benefits      70.7       (18.2)(1)     52.5        1.8     54.3
 Restricted
  stock
  compensation      18.8        (3.4)(1)     15.4          -     15.4
 Marketing and
  fulfillment        8.8           -          8.8          -      8.8
 Distribution       31.6           -         31.6          -     31.6
 Depreciation
  and
  amortization      12.3           -         12.3        2.1     14.4
 General,
  administrative
  and occupancy     35.2           -         35.2        1.0     36.2
 Cost of
  printing and
  fulfillment          -           -            -       22.3     22.3
 Provision for
  mutual fund
  investigation      6.0        (6.0)(5)        -          -        -
                  -------  ----------       ------  ---------  -------
     Total         183.4       (27.6)       155.8       27.2    183.0
                  -------  ----------       ------  ---------  -------

Operating Income
 (Loss)             51.8        27.6         79.4       (3.6)    75.8
Operating Margin    22.0%                    33.8%     -15.3%    29.3%

Other expenses
 (income)         (162.8)      172.5(2)(3)   9.7       (0.4)     9.3
Income tax
 provision
 (benefit)          82.2       (55.2)        27.0       (1.0)    26.0
                  -------  ----------       ------  ---------  -------
Net Income
 (Loss)          $ 132.4  $    (89.7)      $ 42.7  $    (2.2) $  40.5
                  =======  ==========       ======  =========  =======

Diluted Earnings
 (Loss) per
 Share           $  0.57  $    (0.39)      $ 0.18  $   (0.01) $  0.17

Average Assets
 Under
 Management
 (Billions)      $ 138.6

                           Three Months Ended March 31, 2004
                 -----------------------------------------------------

                                      Investment   Printing
                  Invst.   Non-GAAP   Management     and      Adjusted
                   Mgt.   Adjustments  Adjusted    Fulfllmnt.  Total
                 -------- ----------- -----------  ---------- --------
Revenues         $ 249.9  $        -       $249.9  $    24.5  $ 274.4

Operating expenses
 Employee
  compensation
  and benefits      60.5        (4.0)(1)     56.5        1.5     58.0
 Restricted stock
  compensation      21.5        (3.6)(1)     17.9          -     17.9
 Marketing and
  fulfillment        4.1           -          4.1          -      4.1
 Distribution       34.8           -         34.8          -     34.8
 Depreciation and
  amortization      14.0           -         14.0        1.8     15.8
 General,
  administrative
  and occupancy     33.3           -         33.3        0.8     34.1
 Cost of
  printing and
  fulfillment          -           -            -       22.8     22.8
 Restructuring and
  impairments       14.2       (14.2)(4)        -          -        -
 Provision for
  mutual fund
  investigation     59.0       (59.0)(5)        -          -        -
                  -------  ----------       ------  ---------  -------
      Total        241.4       (80.8)       160.6       26.9    187.5
                  -------  ----------       ------  ---------  -------

Operating Income
 (Loss)              8.5        80.8         89.3       (2.4)    86.9
Operating Margin     3.4%                    35.7%      -9.8%    31.7%

Other expenses
 (income)           12.3           -         12.3          -     12.3
Income tax provision
 (benefit)          14.1        17.2         31.3       (1.0)    30.3
                  -------  ----------       ------  ---------  -------
                    26.4        17.2         43.6       (1.0)    42.6
                  -------  ----------       ------  ---------  -------
Net Income
 (Loss)          $ (17.9) $     63.6       $ 45.7  $    (1.4) $  44.3
                  =======  ==========       ======  =========  =======

Diluted Earnings
 (Loss) per
 Share           $ (0.08) $     0.27       $ 0.19  $       -  $  0.19

Average Assets
 Under Management
 (Billions)      $ 148.4

See notes to non-GAAP adjustments on page 9.



                       JANUS CAPITAL GROUP INC.
                       Non-GAAP Reconciliations
                              (continued)
             (dollars in millions, except per share data)

                           Three Months Ended June 30, 2003
                 -----------------------------------------------------
                                      Investment
                  Invst.   Non-GAAP   Management              Adjusted
                   Mgt.   Adjustments  Adjusted       DST      Total
                 -------- ----------- ------------ ---------- --------

Revenues         $ 245.5  $        -       $245.5  $       -  $ 245.5

Operating expenses
 Employee
  compensation
  and benefits      59.7           -         59.7          -     59.7
 Restricted stock
  compensation      20.5           -         20.5          -     20.5
 Marketing and
  fulfillment        6.5           -          6.5          -      6.5
 Distribution       36.1                     36.1          -     36.1
 Depreciation and
  amortization      16.8           -         16.8          -     16.8
 General,
  administrative
  and occupancy     29.0           -         29.0          -     29.0
                  -------  ----------       ------  ---------  -------
      Total        168.6           -        168.6          -    168.6
                  -------  ----------       ------  ---------  -------

Operating Income    76.9           -         76.9          -     76.9
Operating Margin    31.3%                   31.3%               31.3%

Other expenses
 (income)           16.6        (3.0)(6)     13.6      (18.1)    (4.5)
Income tax
 provision
 (benefit)          24.0           -         24.0        6.9     30.9
                  -------  ----------       ------  ---------  -------
Net Income       $  36.3  $      3.0       $ 39.3  $    11.2  $  50.5
                  =======  ==========       ======  =========  =======

Diluted Earnings
 per Share       $  0.16  $     0.01       $ 0.17  $    0.05  $  0.22

Average Assets
 Under Management
 (Billions)      $ 143.1


                            Six Months Ended June 30, 2004
                 -----------------------------------------------------

                                      Investment   Printing
                  Invst.   Non-GAAP   Management      and     Adjusted
                   Mgt.   Adjustments (Adjusted)   Fulfllmnt.  Total
                 -------- ----------- ------------ ---------- --------
Revenues         $ 485.1  $        -       $485.1  $    48.1  $ 533.2

Operating expenses
 Employee
  compensation
  and benefits     131.2       (22.2)(1)    109.0        3.3    112.3
 Restricted stock
  compensation      40.3        (7.0)(1)     33.3          -     33.3
 Marketing and
  fulfillment       12.9           -         12.9          -     12.9
 Distribution       66.4           -         66.4          -     66.4
 Depreciation and
  amortization      26.3           -         26.3        3.9     30.2
 General,
  administrative
  and occupancy     68.5           -         68.5        1.8     70.3
 Cost of printing
  and fulfillment      -           -            -       45.1     45.1
 Restructuring and
  impairments       14.2       (14.2)(4)        -          -        -
 Provision for
  mutual fund
  investigation     65.0       (65.0)(5)        -          -        -
                  -------  ----------       ------  ---------  -------
      Total        424.8      (108.4)       316.4       54.1    370.5
                  -------  ----------       ------  ---------  -------

Operating Income
 (Loss)             60.3       108.4        168.7       (6.0)   162.7
Operating Margin    12.4%                   34.8%     -12.5%    30.5%

Other expenses
 (income)         (150.5)      172.5(2)(3)   22.0       (0.4)    21.6
Income tax
 provision
 (benefit)          96.3       (38.0)        58.3       (2.0)    56.3
                  -------  ----------       ------  ---------  -------
                   (54.2)      134.5         80.3       (2.4)    77.9
                  -------  ----------       ------  ---------  -------
Net Income
 (Loss)          $ 114.5  $    (26.1)      $ 88.4  $    (3.6) $  84.8
                  =======  ==========       ======  =========  =======

Diluted Earnings
 (Loss) per
 Share           $  0.50  $    (0.12)      $ 0.38  $   (0.02) $  0.36
                                  -            -          -
Average Assets
 Under Management
 (Billions)      $ 143.5


See notes to non-GAAP adjustments on page 9.



                       JANUS CAPITAL GROUP INC.
                       Non-GAAP Reconciliations
                              (continued)
             (dollars in millions, except per share data)

                             Six Months Ended June 30, 2003
                  ----------------------------------------------------
                                          Investment
                  Investment  Non-GAAP     Management        Adjusted
                  Management Adjustments   (Adjusted)   DST    Total
                  ---------- -----------   ---------- ------- --------

Revenues             $476.7       $   -       $476.7  $    -   $476.7

Operating expenses
  Employee
   compensation
   and benefits       117.6           -        117.6       -    117.6
  Restricted stock
   compensation        42.0           -         42.0       -     42.0
  Marketing and
   fulfillment         12.0           -         12.0       -     12.0
  Distribution         71.5           -         71.5       -     71.5
  Depreciation and
   amortization        34.8           -         34.8       -     34.8
  General,
   administrative
   and occupancy       58.4           -         58.4       -     58.4
                      ------       -----       ------  ------   ------
       Total          336.3           -        336.3       -    336.3
                      ------       -----       ------  ------   ------

Operating Income      140.4           -        140.4       -    140.4
Operating Margin       29.5%                   29.5%           29.5%

Other expenses
 (income)              31.1        (3.6)(6)     27.5   (35.2)    (7.7)
Income tax provision   45.0           -         45.0    13.4     58.4
                      ------       -----       ------  ------   ------
Net Income           $ 64.3       $ 3.6       $ 67.9  $ 21.8   $ 89.7
                      ======       =====       ======  ======   ======

Diluted Earnings
 per Share           $ 0.29       $0.01       $ 0.30  $ 0.09   $ 0.39

Average Assets
 Under Management
 (Billions)          $139.0


Footnotes to adjustments:

    (1) Charges related to severance payments and the acceleration of
        restricted stock as a result of the former Janus CEO and other
        employee departures.

    (2) As a result of the debt extinguishment, Janus incurred a
        second quarter non-operating charge of $55.5 million,
        primarily related to the premium paid to exchange the old
        notes for new notes given declines in interest rates.

    (3) On June 16, 2004 Janus sold its remaining 7.4 million shares
        of DST common stock to an unrelated third party. The sale
        resulted in a pretax gain of $228.0 million.

    (4) In the first quarter 2004, a write-down of intangible assets
        totaling $14.2 million was recorded associated with the
        termination notices received in the first quarter 2004 from
        certain subadvised accounts.

    (5) Charges related to the mutual fund investigation, including
        civil penalties, restoration, legal and other administrative
        costs.

    (6) Operating loss of Nelson Money Managers Plc, a UK-based
        investment management company sold in the third quarter 2003.



                       JANUS CAPITAL GROUP INC.
              UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
             (dollars in millions, except per share data)

                             Three Months Ended         Year to Date
                        ----------------------------  ----------------
                        June 30, March 31, June 30,  June 30, June 30,
                          2004     2004      2003      2004     2003
                         ------   -------   ------    ------   ------

Revenues:
  Investment management
   fees                  $187.9   $ 199.2  $ 194.0   $ 387.1  $ 375.1
  Shareowner servicing
   fees and other          47.3      50.7     51.5      98.0    101.6
  Printing and fulfillment 23.6      24.5        -      48.1        -
                         ------   -------   ------    ------   ------
    Total                 258.8     274.4    245.5     533.2    476.7
                         ------   -------   ------    ------   ------

Operating expenses:
 Employee compensation
  and benefits             72.5      62.0     59.7     134.5    117.6
 Restricted stock
  compensation             18.8      21.5     20.5      40.3     42.0
 Marketing and fulfillment  8.8       4.1      6.5      12.9     12.0
 Distribution              31.6      34.8     36.1      66.4     71.5
 Depreciation and
  amortization             14.4      15.8     16.8      30.2     34.8
 General, administrative
  and occupancy            36.2      34.1     29.0      70.3     58.4
 Cost of printing and
  fulfillment              22.3      22.8        -      45.1        -
 Restructuring and
  impairments                 -      14.2        -      14.2        -
 Provision for mutual
  fund investigation        6.0      59.0        -      65.0        -
                         ------   -------   ------    ------   ------
    Total                 210.6     268.3    168.6     478.9    336.3
                         ------   -------   ------    ------   ------

Operating Income           48.2       6.1     76.9      54.3    140.4

Equity in earnings of
 unconsolidated affiliates  1.6       1.1     18.7       2.7     35.8
Gain on disposition of
 DST common shares        228.0         -        -     228.0        -
Interest expense          (11.6)    (14.8)   (14.6)    (26.4)   (30.7)
Loss on early
 extinguishment of debt   (55.5)        -        -     (55.5)       -
Other, net                  2.9       3.2      1.2       6.1      4.2
                         ------   -------   ------    ------   ------
 Income (loss) before
  taxes and minority
  interest                213.6      (4.4)    82.2     209.2    149.7

Income tax provision       81.2      13.1     30.9      94.3     58.4
Minority interest in
 consolidated earnings      2.2       1.8      0.8       4.0      1.6
                         ------   -------   ------    ------   ------
Income (loss) from
 continuing operations    130.2     (19.3)    50.5     110.9     89.7
                         ------   -------   ------    ------   ------

Loss from discontinued
 operations - Nelson          -         -     (3.0)        -     (3.6)
                         ------   -------   ------    ------   ------

Net income (loss)        $130.2   $ (19.3) $  47.5   $ 110.9  $  86.1
                         ======   =======   ======    ======   ======

----------------------------------------------------------------------
Basic earnings (loss) per share
 Weighted average common
  shares outstanding (in
  millions)               232.2     230.4    228.9     231.3    226.4
 Income (loss) from
  continuing operations  $ 0.56   $ (0.08) $  0.22   $  0.48  $  0.39
 Loss from discontinuing
  operations                  -         -    (0.01)        -    (0.01)
                         ------   -------   ------    ------   ------
  Net income (loss)      $ 0.56   $ (0.08) $  0.21   $  0.48  $  0.38
                         ------   -------   ------    ------   ------

Diluted earnings (loss) per share
 Weighted average
  diluted common shares
  outstanding (in
  millions)               234.0     232.4    230.7     233.1    228.0
 Income (loss) from
  continuing operations  $ 0.56   $ (0.08) $  0.22   $  0.48  $  0.39
 Loss from discontinuing
  operations                  -         -    (0.01)        -    (0.01)
                         ------   -------   ------    ------   ------
  Net income (loss)      $ 0.56   $ (0.08) $  0.21   $  0.48  $  0.38
                         ------   -------   ------    ------   ------
----------------------------------------------------------------------



                       JANUS CAPITAL GROUP INC.
            UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
                         (dollars in millions)

                                              June 30,    December 31,
                                                2004          2003
                                              ---------    ----------
 Assets
  Cash and cash equivalents                   $ 1,100.6    $  1,222.8
  Other current assets                            279.2         243.4
  Investments and other assets                     85.7         386.2
  Property and equipment, net                      66.6          58.7
  Intangibles and goodwill, net                 2,415.0       2,421.1
                                              ---------    ----------
   Total Assets                               $ 3,947.1    $  4,332.2
                                              =========    ==========

 Liabilities and Stockholders' Equity
  Debt                                        $   378.2    $    852.6
  Other liabilities                               403.6         254.1
  Deferred income taxes                           490.1         564.3
  Stockholders' equity                          2,675.2       2,661.2
                                              ---------    ----------
   Total Liabilities and Stockholders' Equity $ 3,947.1    $  4,332.2
                                              =========    ==========



                   UNAUDITED CONDENSED CONSOLIDATED
                         CASH FLOW INFORMATION
                         (dollars in millions)

                              Three Months Ended      Six Months Ended
                         --------------------------- -----------------
Cash provided by         June 30, March 31, June 30, June 30, June 30,
 (used in)                 2004      2004     2003     2004     2003
                         -------- --------- -------- -------- --------
  Operating activities   $  45.0     $78.3   $ 19.3  $ 123.3   $ 58.6
  Investing activities     315.4     (20.7)   (94.2)   294.7   (140.8)
  Financing activities    (538.3)     (1.9)    (6.3)  (540.2)   (16.4)
                         -------- --------- -------- -------- --------
Net change during period $(177.9)    $55.7   $(81.2) $(122.2)  $(98.6)
                         ======== ========= ======== ======== ========



                  ASSETS UNDER MANAGEMENT BY MANAGER
                         (dollars in billions)

                      June 30,        March 31,         June 30,
                        2004      %     2004       %     2003      %
                      -------- ------ --------- ------ -------- ------
 Janus Capital
  Management LLC       $108.4   80.1%   $120.4   83.1%  $132.7   88.6%
 Bay Isle Financial
  LLC                     1.2    0.9%      1.2    0.8%     1.1    0.7%
 Enhanced Investment
  Technologies, LLC      17.5   12.9%     15.5   10.7%    10.5    7.0%
 Perkins, Wolf,
  McDonnell and
  Company                 8.3    6.1%      7.9    5.4%     5.5    3.7%
                      -------- ------ --------- ------ -------- ------
  Total assets         $135.4  100.0%   $145.0  100.0%  $149.8  100.0%
                      ======== ====== ========= ====== ======== ======



                       JANUS CAPITAL GROUP INC.
                 ASSET FLOWS BY INVESTMENT DISCIPLINE
                         (dollars in billions)

                                  Three Months Ended Six Months Ended
                                       June 30,          June 30,
                                  ------------------ -----------------
                                    2004      2003     2004     2003
                                   --------  -------  -------  -------
 Growth Equity
 ---------------------------------
 Beginning of period assets       $   80.8  $  75.6  $  84.9  $  81.5
  Sales                                1.9      7.1      4.5     12.4
  Redemptions                         (8.9)    (9.3)   (17.8)   (17.4)
                                   --------  -------  -------  -------
  Net sales (redemptions)             (7.0)    (2.2)   (13.3)    (5.0)
  Market appreciation (depreciation)     -     11.3      2.2      8.2
                                   --------  -------  -------  -------
 End of period assets             $   73.8  $  84.7  $  73.8  $  84.7
                                   ========  =======  =======  =======

 Mathematical / Quantitative
 ---------------------------------
 Beginning of period assets       $   15.5  $   8.1  $  14.3  $   7.3
  Sales                                2.0      1.4      3.3      2.3
  Redemptions                         (0.6)    (0.1)    (1.4)    (0.2)
                                   --------  -------  -------  -------
  Net sales (redemptions)              1.4      1.3      1.9      2.1
  Market appreciation (depreciation)   0.6      1.1      1.3      1.1
                                   --------  -------  -------  -------
 End of period assets             $   17.5  $  10.5  $  17.5  $  10.5
                                   ========  =======  =======  =======

 Fixed Income
 ---------------------------------
 Beginning of period assets       $    6.7  $   7.8  $   7.3  $   6.8
  Sales                                0.3      1.8      0.9      3.4
  Redemptions                         (0.8)    (1.0)    (1.8)    (1.8)
                                   --------  -------  -------  -------
  Net sales (redemptions)             (0.5)     0.8     (0.9)     1.6
  Market appreciation (depreciation)  (0.2)     0.3     (0.4)     0.5
                                   --------  -------  -------  -------
 End of period assets             $    6.0  $   8.9  $   6.0  $   8.9
                                   ========  =======  =======  =======

 Core / Blend
 ---------------------------------
 Beginning of period assets       $   19.9  $  18.3  $  20.8  $  18.9
  Sales                                0.6      1.4      1.3      2.4
  Redemptions                         (2.7)    (1.0)    (4.9)    (2.3)
                                   --------  -------  -------  -------
  Net sales (redemptions)             (2.1)     0.4     (3.6)     0.1
  Market appreciation (depreciation)  (0.1)     1.9      0.5      1.6
                                   --------  -------  -------  -------
 End of period assets             $   17.7  $  20.6  $  17.7  $  20.6
                                   ========  =======  =======  =======

 Value
 ---------------------------------
 Beginning of period assets       $    9.1  $   6.0  $   8.4  $   6.4
  Sales                                0.8      0.5      1.8      1.0
  Redemptions                         (0.6)    (0.6)    (1.6)    (1.1)
                                   --------  -------  -------  -------
  Net sales (redemptions)              0.2     (0.1)     0.2     (0.1)
  Market appreciation (depreciation)     -      0.9      0.7      0.5
                                   --------  -------  -------  -------
 End of period assets             $    9.3  $   6.8  $   9.3  $   6.8
                                   ========  =======  =======  =======

 Money Market
 ---------------------------------
 Beginning of period assets       $   13.0  $  16.9  $  15.8  $  17.5
  Sales                               21.5     39.8     47.7    110.0
  Redemptions                        (23.4)   (38.4)   (52.4)  (109.2)
                                   --------  -------  -------  -------
  Net sales (redemptions)             (1.9)     1.4     (4.7)     0.8
  Market appreciation                    -        -        -        -
                                   --------  -------  -------  -------
 End of period assets             $   11.1  $  18.3  $  11.1  $  18.3
                                   ========  =======  =======  =======

 Complex-Wide
 ---------------------------------
 Beginning of period assets       $  145.0  $ 132.7  $ 151.5  $ 138.4
  Sales                               27.1     52.0     59.5    131.5
  Redemptions                        (37.0)   (50.4)   (79.9)  (132.0)
                                   --------  -------  -------  -------
  Net sales (redemptions)             (9.9)     1.6    (20.4)    (0.5)
  Market appreciation (depreciation)   0.3     15.5      4.3     11.9
                                   --------  -------  -------  -------
 End of period assets             $  135.4  $ 149.8  $ 135.4  $ 149.8
                                   ========  =======  =======  =======



Exhibit 1
Janus Investment Funds                          (a) Lipper Rankings
                                                        Based
                                                on Total Returns as of
                                                        6/30/04
                                               -----------------------
                                                 1-Year      3-Year
                                               ----------  -----------
                                                 Rank /      Rank /
                        Lipper Category        Total Funds Total Funds
                        ---------------------- ----------- -----------
Growth Funds
----------------------- ---------------------- ----------- -----------
Janus Enterprise Fund   Mid-Cap Growth Funds    92 / 494    256 / 396
Janus Fund              Large-Cap Growth Funds  62 / 612    340 / 507
Janus Mercury Fund      Large-Cap Growth Funds 107 / 612    346 / 507
Janus Olympus Fund      Large-Cap Growth Funds  61 / 612    204 / 507
Janus Orion Fund        Multi-Cap Growth Funds  43 / 434     22 / 342
Janus Twenty Fund(a)    Large-Cap Growth Funds  38 / 612    119 / 507
Janus Venture Fund(a)   Small-Cap Growth Funds  46 / 520    110 / 422
----------------------- ---------------------- ----------- -----------
Core Funds
----------------------- ---------------------- ----------- -----------
Janus Balanced Fund     Balanced Funds         401 / 527    156 / 435
Janus Core Equity Fund  Large-Cap Core Funds   103 / 979    102 / 803
Janus Growth and Income Large-Cap Core Funds
 Fund                                          403 / 979    377 / 803
Janus Risk-Managed      Multi-Cap Core Funds
 Stock Fund                                     67 / 618            -
Janus Special Equity    Multi-Cap Core Funds
 Fund                                           14 / 618     90 / 475
----------------------- ---------------------- ----------- -----------
Income Funds
----------------------- ---------------------- ----------- -----------
Janus Federal Tax-      General Muni Debt
 Exempt Fund             Funds                 294 / 295    147 / 267
Janus Flexible Income   Intermediate Inv Grade
 Fund                    Debt Funds            194 / 442     39 / 343
Janus High-Yield Fund   High Current Yield
                         Funds                 340 / 417    193 / 340
Janus Short-Term Bond   Short Investment Grade
 Fund                    Debt Funds             11 / 170     53 / 119
----------------------- ---------------------- ----------- -----------
International/Global
 Funds
----------------------- ---------------------- ----------- -----------
Janus Global Life       Health/Biotechnology
 Sciences Fund           Funds                  29 / 194     77 / 150
Janus Global            Global Funds
 Opportunities Fund                              1 / 320     11 / 259
Janus Global Technology Science & Technology
 Fund                    Funds                 174 / 313    150 / 272
Janus Overseas Fund     International Funds    477 / 844    582 / 690
Janus Worldwide Fund(1) Global Funds           311 / 320    254 / 259
----------------------- ---------------------- ----------- -----------
Value Funds
----------------------- ---------------------- ----------- -----------
Janus Mid Cap Value     MidCap Value Funds
 Fund  - Inv(2)                                 52 / 197     34 / 134
Janus Small Cap Value   SmallCap Value Funds
 Fund - Inv.(a)(2)(3)                          150 / 225    136 / 160
----------------------- ---------------------- ----------- -----------


Janus Investment Funds                          (a) Lipper Rankings
                                                        Based
                                               on Total Returns as of
                                                       6/30/04
                                              ------------------------
                                                  5-Year   10-Year
                                               ---------- -----------
                                                 Rank /     Rank /
                        Lipper Category        Total Funds Total Funds
                        ----------------------------------------------
Growth Funds
----------------------- ----------------------------------------------
Janus Enterprise Fund   Mid-Cap Growth Funds    232 / 259     55 / 94
Janus Fund              Large-Cap Growth Funds  206 / 355    42 / 111
Janus Mercury Fund      Large-Cap Growth Funds  184 / 355     2 / 111
Janus Olympus Fund      Large-Cap Growth Funds  122 / 355           -
Janus Orion Fund        Multi-Cap Growth Funds          -           -
Janus Twenty Fund(a)    Large-Cap Growth Funds  249 / 355     3 / 111
Janus Venture Fund(a)   Small-Cap Growth Funds  178 / 283     33 / 77
----------------------- ----------------------------------------------
Core Funds
----------------------- ----------------------------------------------
Janus Balanced Fund     Balanced Funds          130 / 363    12 / 136
Janus Core Equity Fund  Large-Cap Core Funds     58 / 603           -
Janus Growth and Income Large-Cap Core Funds
 Fund                                            84 / 603     6 / 211
Janus Risk-Managed      Multi-Cap Core Funds
 Stock Fund                                             -           -
Janus Special Equity    Multi-Cap Core Funds
 Fund                                                   -           -
----------------------- ----------------------------------------------
Income Funds
----------------------- ----------------------------------------------
Janus Federal Tax-      General Muni Debt
 Exempt Fund             Funds                  184 / 231    87 / 124
Janus Flexible Income   Intermediate Inv Grade
 Fund                    Debt Funds             160 / 255    10 / 114
Janus High-Yield Fund   High Current Yield
                         Funds                   46 / 269           -
Janus Short-Term Bond   Short Investment Grade
 Fund                    Debt Funds               36 / 97     18 / 49
----------------------- ----------------------------------------------
International/Global
 Funds
----------------------- ----------------------------------------------
Janus Global Life       Health/Biotechnology
 Sciences Fund           Funds                    29 / 56           -
Janus Global            Global Funds
 Opportunities Fund                                     -           -
Janus Global Technology Science & Technology
 Fund                    Funds                   50 / 102           -
Janus Overseas Fund     International Funds     159 / 509     7 / 140
Janus Worldwide Fund(1) Global Funds            146 / 182     19 / 50
----------------------- ----------------------------------------------
Value Funds
----------------------- ----------------------------------------------
Janus Mid Cap Value     MidCap Value Funds
 Fund  - Inv(2)                                    7 / 91           -
Janus Small Cap Value   SmallCap Value Funds
 Fund - Inv.(a)(2)(3)                            57 / 124           -
----------------------- ----------------------------------------------


                                  Percent of Retail Funds per Lipper
                                    Quartile Based on Total Returns
                                 -------------------------------------
                                  1-Year    3-Year    5-Year   10-Year
  --------------------------------------------------------------------
  1st Quartile                      56.6%      27.3%    21.0%    50.0%
  2nd Quartile                      13.0       27.3     31.6     33.3
  3rd Quartile                      13.0       31.8     31.6     16.7
  4th Quartile                      17.4       13.6     15.8      0.0
  --------------------------------------------------------------------


Past performance is no guarantee of future results.
Janus Retail Mutual Funds includes 23 Janus Investment Funds. Excludes
Janus Adviser Series and Janus Aspen Series, Janus World Funds Plc,
Sub-advised, Money Market Funds, International Equity Fund and Focused
Value Fund.

Lipper Inc. -- A Reuters Company, is a nationally recognized
organization that ranks the performance of mutual funds within a
universe of funds that have similar investment objectives. Rankings
are historical with capital gains and dividends reinvested.

(1) Effective July 1, 2004, Jason Yee has been appointed portfolio
    manager of the Janus Worldwide portfolios, replacing Laurence
    Chang.

(2) Rating is for the investor share class only; other classes may
    have different performance characteristics.

(3) On 2/27/04, Todd Perkins joined Bob Perkins and Tom Perkins as a
    co-portfolio manager of Janus Small Cap Value Fund.

(a) Closed to new investors.



 Exhibit 2
 Average Annual Total Returns(1 )(%)
                                                 Ending June 30,2004
 Janus Retail Funds             One    Three   Five   Ten    Since
                                Year   Years   Years  Years  Inception
 Growth & Core (Inception Date)
 Janus Fund (2/70)              20.34   (6.30) (5.44)  9.37     14.26
 Janus Twenty Fund(2) (4/85)    22.04   (2.89) (6.96) 12.79     13.32
 Janus Olympus Fund (12/95)     20.35   (4.46) (3.88)     -     11.51
 Janus Orion Fund(3)(11) (6/00) 28.83    4.25      -      -    (10.21)
 Janus Mercury Fund (5/93)      19.09   (6.42) (5.01) 12.84     13.13
 Janus Enterprise Fund (9/92)   27.23   (4.32) (5.36)  9.25     10.88
 Janus Venture Fund(2)(3)(5)
  (4/85)                        35.30    2.68   1.50  11.27     13.63
 Janus Growth and Income Fund
  (5/91)                        17.04   (2.54) (0.37) 13.83     13.49
 Janus Special Equity Fund(11)
  (2/00)                        30.15    3.16      -      -      3.26
 Janus Core Equity Fund (6/96)  19.60   (0.18)  0.17      -     12.35
 Janus Balanced Fund (9/92)      9.48    2.32   2.41  11.43     11.54

 International & Global
  (Inception Date)
 Janus Worldwide Fund(4)(11)(18)
  (5/91)                        12.65   (7.38) (3.66)  8.74     11.00
 Janus Overseas Fund(4)(11)
  (5/94)                        27.36   (2.02)  1.63  10.27      9.88
 Janus Global Technology
  Fund(4)(11) (12/98)           23.44  (10.38) (7.45)     -      1.26
 Janus Global Life Sciences
  Fund(4) (12/98)               25.51   (1.00)  8.25      -     10.53
 Janus Global Opportunities
  Fund(4)(5)(17) (6/01)         40.23   10.78      -      -     10.77
 Janus International Equity
  Fund(11)(14)(15)(16)(19)
  (7/90)                        27.69    3.98  (0.19)  4.92      5.59

 Value (Inception Date)
 Janus Focused Value
  Fund(14)(15)(20) (3/90)       20.69    7.76   8.24  14.46     13.31
 Janus Mid Cap Value Fund -
  Investor Shares(12) (8/98)    32.98   10.71  15.65      -     19.15
 Janus Mid Cap Value Fund -
  Institutional Shares(2)(12)
  (8/98)                        33.28   10.91  15.78      -     19.26
 Janus Small Cap Value Fund -
  Investor Shares(2)(13) (10/87)30.37    8.33  13.07  16.75     14.91
 Janus Small Cap Value Fund -
  Institutional Shares(2)(13)
                         (10/87)30.73    8.65  13.38  17.02     15.07

 Risk-Managed (Inception Date)
 Janus Risk-Managed Stock
  Fund(4) (2/03)                25.11       -      -      -     29.71

 Fixed-Income (Inception Date)
 Janus Flexible Income
  Fund(6)(9)(10) (7/87)          0.16    6.72   5.83   7.49      7.99
 Janus High-Yield
  Fund(4)(6)(9)(10) (12/95)      7.57    7.36   5.72      -      8.28
 Janus Short-Term Bond
  Fund(6)(7)(9) (9/92)           1.81    3.61   4.99   5.38      5.06
 Janus Federal Tax-Exempt
  Fund(6)(7)(8)(9) (5/93)       (1.91)   4.26   4.04   5.10      4.66

 Money Market (Inception Date)
 Janus Money Market Fund(21)
  (2/95)                         0.59    1.25   2.93      -      3.97
 Money Market Fund Current 7-Day Yield and 7-Day Yield without
  waivers as of June 30, 2004 were 0.71% and 0.55%, respectively.
 Janus Government Money Market
  Fund(21) (2/95)                0.52    1.19   2.86      -      3.88
 Janus Government Money Market Fund Current 7-Day Yield and 7-Day
  Yield without waivers as of June 30, 2004 were 0.62% and 0.52%,
  respectively.

Data presented reflects past performance, which is no guarantee of
future results. Investment results and principal value will fluctuate
so that shares, when redeemed, may be worth more or less than their
original cost. Due to market volatility, current performance may be
higher or lower than the performance shown. Call 800-525-1068 or visit
janus.com for current month end performance.

An investment in the Money Market Fund is not insured or guaranteed by
the Federal Deposit Insurance Corporation or any other government
agency. Although the Fund seeks to preserve the value of your
investment at $1.00 per share, it is possible to lose money by
investing in the Fund. The yield more closely reflects the current
earnings of the Money Market Fund than the total return.

Total return includes reinvestment of dividends and capital gains.

A fund's performance may be affected by risks that include those
associated with non-diversification, investments in foreign
securities, non-investment grade debt securities, undervalued
companies, or companies with a relatively small market capitalization.
Please see a Janus prospectus for more detailed information.

Due to recent market volatility, certain funds may have an increased
position in cash for temporary defensive purposes.

All performance figures shown in this report are net of management
fees.

(1) All figures unaudited.

(2) Closed to new investors.

(3) This Fund has been significantly impacted, either positively or
    negatively, by investing in initial public offerings (IPOs).

(4) A 2% redemption fee may be imposed on shares held for 3 months or
    less.

(5) Returns have sustained significant gains and losses due to market
    volatility in the consumer discretionary sector.

(6) Bond funds have the same interest rate, inflation, and credit
    risks that are associated with the underlying bonds owned by the
    fund. Unlike owning individual bonds, there are ongoing fees and
    expenses associated with owning shares of bonds funds. The return
    of principal is not guaranteed due to net asset value fluctuation
    that is caused by changes in the price of specific bonds held in
    the fund and selling of bonds within the fund by the portfolio
    manager.

(7) Adviser has agreed to waive a portion of the Fund's expenses.
    Without such waivers, Janus Federal Tax-Exempt Fund and Janus
    Short-Term Bond Fund's yields would have been 2.62% and 1.93%,
    respectively and total returns would have been lower.

(8) Income may be subject to state or local taxes and to a limited
    extent certain federal tax. Capital gains are subject to federal,
    state and local taxes.

(9) As of June 30, 2004, 30-day SEC Yield was 2.94% on Janus Federal
    Tax-Exempt Fund, 4.03% on Janus Flexible Income Fund, 6.72% on
    Janus High-Yield Fund and 2.30% on Janus Short-Term Bond Fund.

(10) Adviser has agreed to waive a portion of the Fund's expenses if
     they exceed the designated cap. If during the periods shown, the
     Fund's actual expenses exceeded the cap, its total return would
     have been lower. There were no waivers in effect for the most
     recent period presented.

(11) This Fund may have significant exposure to emerging markets which
     may lead to greater price volatility.

(12) Returns shown for Janus Mid Cap Value Fund prior to 4/21/03 are
     those of Berger Mid Cap Value Fund.

(13) Returns shown for Janus Small Cap Value Fund prior to 4/21/03 are
     those of Berger Small Cap Value Fund.

(14) Returns shown for Focused Value Fund and International Equity
     Fund for periods prior to 10/13/03 are derived from the
     historical performance of Class A Shares of Vontobel US Value
     Fund and Vontobel International Equity Fund, respectively.
     Returns are restated to reflect the higher expected fees and
     expenses of Focused Value Fund and International Equity Fund.
     Janus Capital has contractually agreed to waive each Fund's total
     operating expenses to the levels indicated in the prospectus
     until at least September 30, 2005.

(15) Vontobel Asset Management, Inc. is the subadviser to the Focused
     Value and International Equity Funds.

(16) Since inception returns reflect Vontobel International Equity
     Fund's performance from 7/6/90, when Vontobel Asset Management,
     Inc. became the Fund's investment adviser. Previous periods
     during which the Fund was advised by other investment advisers
     are not shown.

(17) Returns have sustained significant gains and losses due to market
     volatility in the industrials sector.

(18) Effective July 1, 2004, Jason Yee has been appointed Portfolio
     Manager of Janus Worldwide Fund and Laurence Chang will no longer
     be the Portfolio Manager.

(19) Effective 5/1/04, this fund's redemption fee, that may be imposed
     on shares held for 3 months or less, changed from 1% to 2% on
     shares purchased on or after that date.

(20) Effective July 6, 2004, Janus US Value Fund changed its name to
     Janus Focused Value Fund and eliminated its policy to invest,
     under normal circumstances, at least 80% of its net assets in
     securities of U.S. companies and will instead adopt a policy to
     invest, under normal circumstances, at least 65% of its net
     assets in securities of U.S. companies, as defined in the
     prospectus.

(21) Adviser has agreed to waive a portion of the fund's expenses.
     Without such waivers total return would have been lower.

Funds distributed by Janus Distributors LLC (7/04)

    CONTACT: Janus Capital Group Inc.
             Steve Belgrad, 303-394-7706 (Investor Relations)
              or
             Blair Johnson, 720-210-1439 (Media)
              or
             Shelley Peterson, 303-316-5625 (Media)

    SOURCE: Janus Capital Group Inc.