Janus Announces Third Quarter 2004 Results; Investment Performance Improves for the Fifth Consecutive Quarter

Company Release - 10/21/2004 8:00 AM ET
    DENVER--(BUSINESS WIRE)--Oct. 21, 2004--

      Firm Reports Quarterly Earnings of $0.22 per Diluted Share,
             $0.15 per Diluted Share on an Adjusted Basis

Janus Capital Group Inc. (NYSE: JNS) today reported third quarter 2004 GAAP net income of $51.3 million, or $0.22 per diluted share, compared with net income of $50.9 million, or $0.22 per diluted share, in the third quarter of 2003.

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 neither ongoing nor operational in nature. The company believes that excluding these items benefits both management and investors as it facilitates more useful period-to-period comparisons of the company's operations. (Please see reconciliation of such items on pages 8 and 9 of this release.) The third quarter 2004 adjusted numbers exclude: i) the benefit of $25.0 million of income tax-related credits; ii) an $8.2 million facility charge; and iii) an after-tax loss of $3.6 million from the sale of Bay Isle Financial LLC's Private Client Asset Management division. The third quarter 2003 was affected by $9.0 million of costs from the mutual fund investigation and $2.6 million of corporate reorganization costs.

Excluding the previously mentioned items, third quarter 2004 adjusted net income totaled $34.3 million, or $0.15 per diluted share, compared with third quarter 2003 adjusted net income of $62.4 million, or $0.27 per diluted share. (The 2003 figure includes $0.05 per share of equity earnings from Janus' former investment in DST Systems, Inc.)

Janus' investment management business reported third quarter 2004 operating income of $53.5 million and operating margins of 24.9%, compared with operating income of $80.3 million and operating margins of 31.3% in the third quarter 2003. Third quarter 2004 adjusted operating income and margins totaled $66.3 million and 30.8%, respectively, compared with $91.9 million and 35.8%, respectively, in the third quarter 2003. The decline in operating results was primarily due to lower average assets under management and the previously disclosed reduction of management fees that became effective July 1, 2004.

Comparing the first nine months of 2004 with the same period last year, the investment management segment reported improved adjusted operating income and margins despite lower revenues. Janus achieved those improvements while increasing compliance-related expenditures and eliminating the use of soft dollars for third-party research and services.

CEO's Perspective

As the end of the year approaches, Janus is entering a new era, said Chairman and CEO Steve Scheid.

"We're setting the tone at the top," Scheid said, "by instituting a series of corporate governance measures and strengthening our internal controls. At the same time, we're moving from a time of transition to one of proactive execution. As we build our business, we're shifting from defense to offense - while always making fundholders' interests our top priority."

During the last few months, Janus has put a new management team in place, finalized its regulatory settlement and strengthened its balance sheet. As the company's mutual fund performance continues to improve, Janus is focused on translating that momentum into new sales.

"Our new TV ads are reminding investors that Janus goes to great lengths to find promising companies others may have missed - and that we build portfolios in a highly disciplined manner," Scheid said. "We've also realigned our sales organization and hired two senior executives with a combined 37 years of industry experience to lead our growth initiatives in the institutional and intermediary markets."

Scheid said Dominic Martellaro, the new senior vice president and managing director of Janus Global Intermediary Distribution, has broadened the company's broker-dealer reach by adding nine new external sales professionals in the U.S. since August. Janus now has a total of 40 sales professionals in the field, including 16 outside the U.S. As the intermediary business gains traction, Scheid said Janus will continue to invest in it to make sure the company's sales team has the tools and products to meet clients' needs. To boost intermediary sales, Janus has introduced A and R shares and streamlined its intermediary channel structure to further leverage the company's strong relations in the defined contributions and subadvised markets.

In addition, Scheid said John Zimmerman, the new senior vice president and managing director of Janus Institutional Asset Management, has developed a business model that offers institutional clients and consultants several benefits. They include portfolios designed to meet style-specific mandates, increased transparency in the company's investment process and greater access to Janus investment professionals. Janus, which manages more than $30 billion in assets for institutional clients, offers a broad array of products, including a successful line of mathematical, risk-managed portfolios managed by its INTECH subsidiary.

Investment Management Performance

The performance of the company's primary fund family, Janus Investment Funds (JIF), continued to improve in the third quarter. In fact, this is the fifth consecutive quarter that those funds' 1-year performance has improved based on total returns and the percentage of funds finishing in the top half of their Lipper categories.

Based on total returns at the end of September 2004, approximately 74% of those funds were in the top half of their Lipper categories on a 1-year basis, and more than 68% were in the top half of their Lipper categories on a 3-year basis based on total returns. Those figures are up significantly from the end of September 2003, when 45% of JIF funds finished in the top half of their Lipper categories on a 1-year basis, and 29% were in the top half on a 3-year basis.

"The real driver behind our steadily improving performance is our emphasis on fundamental research and bottom-up stock picking," said Janus President and Chief Investment Officer Gary Black.

For the second consecutive quarter, all seven JIF growth funds were in the top two quartiles on a 1-year basis and approximately 86% were again in the top two quartiles on a 3-year basis based on total returns.

One of those growth funds, the $9 billion Janus Twenty Fund, has performed particularly well during the last three years. For the 1-year period ended September 30, 2004, the Janus Twenty Fund outperformed its entire Lipper peer group, finishing 1st out of 631 large-cap growth funds based on total returns. For the 3-year period ended September 30, 2004, Janus Twenty Fund beat 88% of its peers, ranking 59th out of 513 large-cap growth funds based on total returns. For the same 5-year period, Janus Twenty Fund finished 259th out of 371 large-cap growth funds based on total returns. For the same 10-year period, Janus Twenty Fund finished 1st out of 116 large-cap growth funds based on total returns. (Janus Twenty Fund is closed to new investors.)

Exhibit 1 provides detailed Lipper rankings for the JIF funds. Exhibit 2 provides performance data for the JIF Funds.

    Recent Developments

    Stock Repurchases

On July 20, 2004, the Janus Board of Directors agreed to a new authorization of up to $500 million to repurchase shares of Janus common stock through December 31, 2006. Under this authorization, Janus repurchased 3.0 million common shares at an aggregate purchase price of $41.6 million during the third quarter 2004.

Tax Contingencies

Janus periodically reassesses the probability of loss related to historical tax contingencies based on the latest information available. As a result of the favorable resolution of various audits and negotiations with taxing authorities, Janus reversed $25.0 million of previously recorded income taxes and related accrued expenses during the third quarter 2004.

Facility Charge

During 2001, Janus closed its call center in Austin, Texas. During the current quarter, a reassessment of the market conditions in Austin resulted in a decrease of the projected future sublease income that Janus may receive through the end of its lease term. This change in assumptions resulted in a charge of $8.2 million in the current quarter.

Bay Isle Financial

On September 14, 2004, Janus completed the sale of Bay Isle's Private Client Asset Management division for $8.0 million. The division managed $0.6 billion of assets at the date of disposition. The transaction resulted in a pretax loss of $2.0 million, primarily due to the write-off of goodwill and intangible assets assigned to the division. Janus will retain Bay Isle's asset-management business, which includes institutional and REIT products managed by the Bay Isle investment team.

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

Average assets under management in the third quarter 2004 totaled $129.2 billion compared with $149.2 billion for the comparable 2003 quarter, a decrease of 13.4%. This decrease - and $5.9 million in settlement-related management fee reductions that began July 1, 2004 - caused total revenues to decline 16.1 %, from $256.6 million to $215.2 million.

Significant expense items from the third quarter 2003 include the following:

    --  Employee compensation and benefits remained comparable with
        the same period last year. The improvement of relative fund
        performance increased incentive compensation approximately
        $4.8 million during the current quarter. This increase was
        offset by declines in asset-based incentive compensation and
        the companywide discretionary bonus plan.

    --  Restricted stock compensation declined $2.8 million in the
        current quarter due to reduced amortization from the
        forfeiture of stock awards.

    --  Marketing and fulfillment increased $1.9 million as a result
        of the introduction of a new print and television campaign in
        early September.

    --  Distribution expenses declined $7.3 million, or 20.0%, as
        average assets under management subject to third-party
        concessions declined 21%.

    --  Depreciation and amortization decreased $5.0 million due to a
        decline in depreciation of $2.7 million as significant
        technology-related capital expenditures became fully
        depreciated at the end of 2003. In addition, amortization of
        deferred commissions decreased by $2.3 million, reflecting a
        decline in Janus World Fund Class B Share sales.

    --  Interest expense decreased $10.0 million primarily from the
        retirement of debt in the second quarter 2004.

Investment Management Results - Nine Months Ended September 30, 2004 vs. 2003

Average assets under management for the first nine months of 2004 were $138.7 billion, a 2.6% decrease from the same period last year. The lower assets under management and the July 1, 2004 decrease in management fees resulted in a 4.5% decline in total revenue, from $733.3 million to $700.3 million, while operating expenses increased $73.9 million due primarily to costs associated with the mutual fund investigation and settlement. On an adjusted basis, operating expenses in the first nine months of 2004 decreased $35.7 million, driven by declines in employee compensation, restricted stock compensation, distribution expenses and depreciation.

    Printing and Fulfillment Financial Results - Third Quarter 2004

The printing and fulfillment business realized an operating loss of $4.2 million and a net loss of $2.4 million during the third quarter 2004. The loss reflects the normal seasonal decline in revenues and lower-than-expected production from the offset printing business.

Third Quarter 2004 Earnings Call

Janus Capital Group will discuss its results during a conference call Thursday, October 21 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.

Data presented reflects past performance, which is no guarantee of future results.

Funds distributed by Janus Distributors LLC (10/04).

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' Registration Statement on Form S-4/A filed on September 20, 2004 and in our 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.

Janus World Funds Plc is a UCITS established under Irish law; it is not available to US or UK persons. Issued by Janus International Limited, authorized and regulated by the Financial Services Authority and in Hong Kong by Janus International (Asia) Limited.

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

                          Three Months Ended          Year to Date
                      ---------------------------  -------------------
                      Sept. 30, June 30, Sept. 30, Sept. 30, Sept. 30,
                         2004      2004     2003      2004       2003
                      --------  -------- --------  --------  ---------

Revenues:
  Investment
   management fees     $170.2    $187.9   $203.0    $557.3     $578.1
  Shareowner servicing
   fees and other        45.0      47.3     53.6     143.0      155.2
  Printing and
   fulfillment           22.6      23.6        -      70.7          -
                      --------  -------- --------  --------  ---------
  Total                 237.8     258.8    256.6     771.0      733.3
                      --------  -------- --------  --------  ---------

Operating expenses:
 Employee compensation
  and benefits           57.9      72.5     56.7     192.4      174.3
 Restricted stock
  compensation           15.8      18.8     18.6      56.1       60.6
 Marketing and
  fulfillment             6.5       8.8      4.6      19.4       16.6
 Distribution            29.2      31.6     36.5      95.6      108.0
 Depreciation and
  amortization           13.3      14.4     16.5      43.5       51.3
 General,
  administrative and
  occupancy              32.8      36.2     31.8     103.1       90.2
 Cost of printing and
  fulfillment            22.8      22.3        -      67.9          -
 Restructuring and
  impairments            10.2         -      2.6      24.4        2.6
 Provision for mutual
  fund investigation        -       6.0      9.0      65.0        9.0
                      --------  -------- --------  --------  ---------
   Total                188.5     210.6    176.3     667.4      512.6
                      --------  -------- --------  --------  ---------

Operating Income         49.3      48.2     80.3     103.6      220.7

Equity in earnings of
 unconsolidated
 affiliates               1.6       1.6     19.5       4.3       55.3
Gain on disposition of
 DST common shares          -     228.0        -     228.0          -
Interest expense         (4.8)    (11.6)   (14.8)    (31.2)     (45.5)
Loss on early
 extinguishment of
 debt                       -     (55.5)       -     (55.5)         -
Other, net                4.9       2.9      3.1      11.0        7.3
                      --------  -------- --------  --------  ---------
 Income before taxes
  and minority
  interest               51.0     213.6     88.1     260.2      237.8

Income tax provision
 (benefit)               (3.2)     81.2     32.1      91.1       90.5
Minority interest in
 consolidated earnings    2.9       2.2      1.1       6.9        2.7
                      --------  -------- --------  --------  ---------
   Income from
    continuing
    operations           51.3     130.2     54.9     162.2      144.6
                      --------  -------- --------  --------  ---------

Loss from operations
 of Nelson                  -         -     (0.1)        -       (3.7)
Loss on disposal of
 Nelson (net of tax
 benefit of $1.5)           -         -     (3.9)        -       (3.9)
                      --------  -------- --------  --------  ---------
   Loss from
    discontinued
    operations -
    Nelson                  -         -     (4.0)        -       (7.6)
                      --------  -------- --------  --------  ---------

Net income              $51.3    $130.2    $50.9    $162.2     $137.0
                      ========  ======== ========  ========  =========

-------------------------------------------------- --------- ---------
Basic earnings per
 share
 Weighted average
  common shares
  outstanding (in
  millions)             231.8     232.2    229.2     231.5      227.3
 Income from
  continuing
  operations            $0.22     $0.56    $0.24     $0.70      $0.63
 Loss from
  discontinuing
  operations                -         -    (0.02)        -      (0.03)
                      --------  -------- --------  --------  ---------
  Net income            $0.22     $0.56    $0.22     $0.70      $0.60
                      --------  -------- --------  --------  ---------

Diluted earnings per
 share
 Weighted average
  diluted common
  shares outstanding
  (in millions)         233.0     234.0    231.7     233.0      229.2
 Income from
  continuing
  operations            $0.22     $0.56    $0.24     $0.70      $0.63
 Loss from
  discontinuing
  operations                -         -    (0.02)        -      (0.03)
                      --------  -------- --------  --------  ---------
  Net income            $0.22     $0.56    $0.22     $0.70      $0.60
                      --------  -------- --------  --------  ---------
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 September 30, 2004
                ------------------------------------------------------

                             Non-      Investment  Printing
                Investment   GAAP      Management    and      Adjusted
                Management Adjustments Adjusted   Fulfillment  Total
                ---------- ----------- ---------  ----------- --------
Revenues          $215.2       $-        $215.2        $22.6   $237.8

Operating
 expenses          151.5     (2.6)(1)     148.9         26.8    175.7
Restructuring
 and
 impairments        10.2    (10.2)(2,3)       -            -        -
                ---------  -------     ---------  ----------- --------
      Total        161.7    (12.8)        148.9         26.8    175.7
                ---------  -------     ---------  ----------- --------

Operating
 Income (Loss)      53.5     12.8          66.3         (4.2)    62.1
Operating
 Margin             24.9%                  30.8%       -18.6%    26.1%

Other expenses
 (income)            1.4      2.5 (4)       3.9         (0.2)     3.7
Income tax
 provision
 (benefit)          (1.6)    27.3 (4)      25.7         (1.6)    24.1
                ---------  -------     ---------  ----------- --------
Net Income
 (Loss)            $53.7   $(17.0)        $36.7        $(2.4)   $34.3
                =========  =======     =========  =========== ========

Diluted
 Earnings
 (Loss) per
 Share             $0.23   $(0.07)        $0.16       $(0.01)   $0.15

Average Assets
 Under
 Management
 (Billions)       $129.2

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

                             Non-      Investment  Printing
                Investment   GAAP      Management    and      Adjusted
                Management Adjustments Adjusted   Fulfillment  Total
                ---------- ----------- ---------  ----------- --------
Revenues          $235.2       $-        $235.2        $23.6   $258.8

Operating
 expenses          177.4    (21.6)(1)     155.8         27.2    183.0
Provision for
 mutual fund
 investigation       6.0     (6.0)(9)         -            -        -
                ---------  -------     ---------  ----------- --------
       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 (6,7)     9.7         (0.4)     9.3
Income tax
 provision
 (benefit)          82.2    (55.2)(4)      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 September 30, 2003
                ------------------------------------------------------

                             Non-      Investment
                Investment   GAAP      Management             Adjusted
                Management Adjustments Adjusted       DST      Total
                ---------- ----------- ---------  ----------- --------

Revenues          $256.6       $-        $256.6           $-   $256.6

Operating
 expenses          164.7        -         164.7            -    164.7
Restructuring
 and
 impairments         2.6     (2.6)(5)         -            -        -
Provision for
 mutual fund
 investigation       9.0     (9.0)(9)         -            -        -
                ---------  -------     ---------  ----------- --------
       Total       176.3    (11.6)        164.7            -    164.7
                ---------  -------     ---------  ----------- --------

Operating
 Income             80.3     11.6          91.9            -     91.9
Operating
 Margin             31.3%                  35.8%                 35.8%

Other expenses
 (income)           15.6     (4.3)(10)     11.3        (18.3)    (7.0)
Income tax
 provision          25.1      4.4 (4)      29.5          7.0     36.5
                ---------  -------     ---------  ----------- --------
Net Income         $39.6    $11.5         $51.1        $11.3    $62.4
                =========  =======     =========  =========== ========

Diluted
 Earnings per
 Share             $0.17    $0.05         $0.22        $0.05    $0.27

Average Assets
 Under
 Management
 (Billions)       $149.2

See notes to non-GAAP adjustments on page 9.
JANUS CAPITAL GROUP INC.
                 Non-GAAP Reconciliations (continued)
             (dollars in millions, except per share data)

                       Nine Months Ended September 30, 2004
            ----------------------------------------------------------
                                       Investment  Printing
            Investment   Non-GAAP      Management     and     Adjusted
            Management  Adjustments     Adjusted  Fulfillment  Total
            ----------- -----------    ---------- ----------- --------
Revenues       $700.3           $-        $700.3       $70.7   $771.0

Operating
 expenses       497.1        (31.8)(1)     465.3        80.9    546.2
Restruc-
turing
and                                (2,
impair-                             3,
 ments           24.4        (24.4) 8)         -           -        -
Provision
for
mutual
fund
invest-
 igation         65.0        (65.0)(9)         -           -        -
            ----------  -----------    ---------- ----------- --------
 Total          586.5       (121.2)        465.3        80.9    546.2
            ----------  -----------    ---------- ----------- --------

Operating
 Income
 (Loss)         113.8        121.2         235.0       (10.2)   224.8
Operating
 Margin          16.3%                      33.6%      -14.4%    29.2%

Other                              (4,
 expenses                           6,
 (income)      (149.1)       175.0  7)      25.9        (0.6)    25.3
Income tax
 provision
 (benefit)       94.7        (10.7)(4)      84.0        (3.6)    80.4
            ----------  -----------    ---------- ----------- --------
Net
 Income
 (Loss)        $168.2       $(43.1)       $125.1       $(6.0)  $119.1
            ==========  ===========    ========== =========== ========

Diluted
Earnings
(Loss)
per
 Share          $0.72       $(0.18)        $0.54      $(0.03)   $0.51

Average
Assets
Under
Management
(Billions)     $138.7

                       Nine Months Ended September 30, 2003
            ----------------------------------------------------------
                                       Investment
            Investment   Non-GAAP      Management             Adjusted
            Management  Adjustments     Adjusted      DST      Total
            ----------- -----------    ---------- ----------- --------

Revenues       $733.3           $-        $733.3          $-   $733.3

Operating
 expenses       501.0            -         501.0           -    501.0
Restruc-
turing
and
 impair-
 ments            2.6         (2.6)(5)         -           -        -
Provision
for
mutual
fund
invest-
 igation          9.0         (9.0)(9)         -           -        -
            ----------  -----------    ---------- ----------- --------
 Total          512.6        (11.6)        501.0           -    501.0
            ----------  -----------    ---------- ----------- --------

Operating
 Income         220.7         11.6         232.3           -    232.3
Operating
 Margin          30.1%                      31.7%                31.7%

Other
 expenses
 (income)        46.7         (7.9)(10)     38.8       (53.5)   (14.7)
Income
tax
provision        70.1          4.4 (4)      74.5        20.4     94.9
            ----------  -----------    ---------- ----------- --------
Net
 Income        $103.9        $15.1        $119.0       $33.1   $152.1
            ==========  ===========    ========== =========== ========

Diluted
Earnings
per
 Share          $0.45        $0.06         $0.51       $0.15    $0.66

Average
Assets
Under
Management
(Billions)     $142.4

Footnotes to adjustments:

(1) Charges related to severance payments and the acceleration of
    restricted stock as a result of several executive level
    departures.

(2) Charge ($8.2M) related to Janus' Austin, Texas facility closed
    during 2001.

(3) The sale of Bay Isle's Private Client Asset Management division
    resulted in a pretax loss of $2.0 million.

(4) Includes the tax effect of adjustments, plus the reversal of $25.0
    million of tax contingencies and related accrued expenses in the
    third quarter 2004.

(5) In the third quarter of 2003, the final estimate of the costs
    necessary to shut down the Berger and Stilwell offices and receive
    shareholder approval to merge the Berger Growth Funds with the
    comparable Janus funds was recorded, resulting in an additional
    charge of $2.6 million.

(6) 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.

(7) 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.

(8) 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.

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

(10) Operating loss of Nelson Money Managers Plc, a UK-based
     investment management company sold in the third quarter 2003.
JANUS CAPITAL GROUP INC.
           UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
                        (dollars in millions)

                                         September 30,  December 31,
                                             2004           2003
                                        --------------- -------------
Assets
 Cash and cash equivalents                      $864.6      $1,222.8
 Other current assets                            253.1         243.4
 Investments and other assets                     84.5         386.2
 Property and equipment, net                      67.8          58.7
 Intangibles and goodwill, net                 2,402.9       2,421.1
                                        --------------- -------------
    Total Assets                              $3,672.9      $4,332.2
                                        =============== =============

Liabilities and Stockholders' Equity
 Debt                                           $377.9        $852.6
 Other liabilities                               156.7         254.1
 Deferred income taxes                           444.8         564.3
 Stockholders' equity                          2,693.5       2,661.2
                                        --------------- -------------
    Total Liabilities and Stockholders'
     Equity                                   $3,672.9      $4,332.2
                                        =============== =============
                   UNAUDITED CONDENSED CONSOLIDATED
                        CASH FLOW INFORMATION
                        (dollars in millions)

                          Three Months Ended        Nine Months Ended
                      ---------------------------  -------------------
                      Sept. 30, June 30, Sept. 30, Sept. 30, Sept. 30,
Cash provided by        2004      2004     2003      2004       2003
 (used in)            --------  -------- --------  --------  ---------

  Operating
   activities         $(178.0)    $45.0   $109.6    $(54.7)    $168.2
  Investing
   activities            (4.1)    315.4    (30.0)    290.6     (170.8)
  Financing
   activities           (53.9)   (538.3)   (10.4)   (594.1)     (26.8)
                      --------  -------- --------  --------  ---------
Net change during
 period               $(236.0)  $(177.9)   $69.2   $(358.2)    $(29.4)
                      ========  ======== ========  ========  =========
  ASSETS UNDER MANAGEMENT BY MANAGER
 (dollars in billions)

                       Sept. 30,       June 30,        Sept. 30,
                         2004      %     2004      %     2003     %
                        -------- ------ -------- ------ ------- ------
Janus Capital Management
 LLC                     $101.1   77.6%  $108.4   80.1% $128.2   87.5%
Bay Isle Financial LLC      0.6    0.5%     1.2    0.9%    1.2    0.8%
Enhanced Investment
 Technologies, LLC         20.1   15.4%    17.5   12.9%   11.1    7.6%
Perkins, Wolf, McDonnell
 and Company                8.4    6.5%     8.3    6.1%    6.0    4.1%
                        -------- ------ -------- ------ ------- ------
  Total assets           $130.2  100.0%  $135.4  100.0% $146.5  100.0%
                        ======== ====== ======== ====== ======= ======
JANUS CAPITAL GROUP INC.
                ASSET FLOWS BY INVESTMENT DISCIPLINE
                        (dollars in billions)

                              Three Months Ended    Nine Months Ended
                                September 30,         September 30,
                              ------------------    -----------------
                               2004      2003        2004      2003
                              --------  --------    --------  -------
Growth Equity
------------------------------
Beginning of period assets      $73.8     $84.7       $84.9    $81.5
 Sales                            1.0       5.2         5.5     17.6
 Redemptions                     (5.1)     (9.4)      (22.9)   (26.8)
                              --------  --------    --------  -------
 Net redemptions                 (4.1)     (4.2)      (17.4)    (9.2)
 Market appreciation
  (depreciation)                 (3.0)      3.1        (0.8)    11.3
                              --------  --------    --------  -------
End of period assets            $66.7     $83.6       $66.7    $83.6
                              ========  ========    ========  =======

Mathematical / Quantitative
------------------------------
Beginning of period assets      $17.5     $10.5       $14.3     $7.3
 Sales                            3.0       1.0         6.3      3.3
 Redemptions                     (0.2)     (0.5)       (1.6)    (0.6)
                              --------  --------    --------  -------
 Net sales                        2.8       0.5         4.7      2.7
 Market appreciation
  (depreciation)                 (0.1)      0.1         1.1      1.1
                              --------  --------    --------  -------
End of period assets            $20.1     $11.1       $20.1    $11.1
                              ========  ========    ========  =======

Fixed Income
------------------------------
Beginning of period assets       $6.0      $8.9        $7.3     $6.8
 Sales                            0.3       0.9         1.2      4.3
 Redemptions                     (0.6)     (1.9)       (2.4)    (3.7)
                              --------  --------    --------  -------
 Net sales (redemptions)         (0.3)     (1.0)       (1.2)     0.6
 Market appreciation
  (depreciation)                  0.2       0.1        (0.3)     0.6
                              --------  --------    --------  -------
End of period assets             $5.8      $8.0        $5.8     $8.0
                              ========  ========    ========  =======

Core / Blend
------------------------------
Beginning of period assets      $17.7     $20.6       $20.8    $18.9
 Sales                            0.4       1.1         1.7      3.5
 Redemptions                     (1.1)     (1.7)       (6.0)    (4.0)
                              --------  --------    --------  -------
 Net redemptions                 (0.7)     (0.6)       (4.3)    (0.5)
 Market appreciation
  (depreciation)                 (0.2)      0.5         0.3      2.1
                              --------  --------    --------  -------
End of period assets            $16.8     $20.5       $16.8    $20.5
                              ========  ========    ========  =======

Value
------------------------------
Beginning of period assets       $9.3      $6.8        $8.4     $6.4
 Dispositions                    (0.6)        -        (0.6)       -
 Sales                            0.7       0.6         2.5      1.6
 Redemptions                     (0.7)     (0.5)       (2.3)    (1.6)
                              --------  --------    --------  -------
 Net sales                          -       0.1         0.2        -
 Market appreciation              0.2       0.4         0.9      0.9
                              --------  --------    --------  -------
End of period assets             $8.9      $7.3        $8.9     $7.3
                              ========  ========    ========  =======

Money Market
------------------------------
Beginning of period assets      $11.1     $18.3       $15.8    $17.5
 Sales                           20.0      31.2        67.8    141.2
 Redemptions                    (19.4)    (33.5)      (71.8)  (142.7)
                              --------  --------    --------  -------
 Net sales (redemptions)          0.6      (2.3)       (4.0)    (1.5)
 Market appreciation                -         -           -        -
                              --------  --------    --------  -------
End of period assets            $11.8     $16.0       $11.8    $16.0
                              ========  ========    ========  =======

Complex-Wide
------------------------------
Beginning of period assets     $135.4    $149.8      $151.5   $138.4
 Dispositions                    (0.6)        -        (0.6)       -
 Sales                           25.5      40.0        85.0    171.5
 Redemptions                    (27.1)    (47.5)     (107.0)  (179.4)
                              --------  --------    --------  -------
 Net redemptions                 (1.6)     (7.5)      (22.0)    (7.9)
 Market appreciation
  (depreciation)                 (3.0)      4.2         1.3     16.0
                              --------  --------    --------  -------
End of period assets           $130.2    $146.5      $130.2   $146.5
                              ========  ========    ========  =======

Each line has been rounded on the schedule individually to increase
 the accuracy of the amounts presented. Therefore totals and
 subtotals may not foot.
Janus Investment Funds                 Lipper Rankings Based
                                   on Total Returns as of 9/30/04
                             -----------------------------------------
                                   1-Year               3-Year
                             ------------------- ---------------------
                             Percentile  Rank /  Percentile   Rank /
               Lipper          Rank (%)  Total     Rank (%)   Total
                Category                  Funds                Funds
               -----------   ------------------- ---------- ----------
Growth Funds
--------------
Janus
Enterprise     Mid-Cap
 Fund          Growth Funds         11   53/505         47    190/408
Janus Fund     Large-Cap
               Growth Funds         42  262/631         38    191/513
Janus
Mercury        Large-Cap
 Fund          Growth Funds         12   71/631         44    223/513
Janus
Olympus        Multi-Cap
 Fund          Growth Funds         48  203/429         53    185/349
Janus Orion    Multi-Cap
 Fund          Growth Funds          7   28/429         10     34/349
Janus Twenty   Large-Cap
 Fund(a)       Growth Funds          1    1/631         12     59/513
Janus Venture  Small-Cap
 Fund(a)       Growth Funds         26  130/518         17     69/420
----------------------------------------------------------------------
Core Funds
--------------
Janus Balanced Balanced
 Fund          Funds                53  286/545         47    211/448
Janus Core     Large-Cap
 Equity Fund   Core Funds            5   46/953         10     73/794
Janus Growth
and Income     Large-Cap
 Fund          Core Funds           40  380/953         47    370/794
Janus Risk-
Managed        Multi-Cap
 Stock Fund    Core Funds            2   13/684          -          -
Janus
Contrarian     Multi-Cap
 Fund(1)       Core Funds            6   39/684          3     13/501
----------------------------------------------------------------------
Income Funds
--------------
Janus Federal
Tax-Exempt     General Muni
 Fund          Debt Funds           97  291/299         67    176/265
Janus Flexible Intermediate
 Income Fund   Inv Grade
               Debt Funds           47  207/444         10     32/348
Janus High-    High Current
Yield Fund     Yield Funds          65  270/420         68    236/350
Janus Short-   Short
Term Bond      Investment
 Fund           Grade
               Debt Funds            6   10/191         25     32/128
----------------------------------------------------------------------
International/
Global Funds
--------------
Janus Global   Health/
Life Sciences  Biotechnology
 Fund          Funds                 7   12/194         53     80/152
Janus Global
 Opportunities
 Fund          Global Funds         35  107/313         10     23/250
Janus Global   Science &
 Technology    Technology
 Fund          Funds                72  222/311         63    175/277
Janus Overseas International
 Fund          Funds                64  539/846         64    445/704
Janus
 Worldwide
 Fund          Global Funds         98  305/313         97    243/250
----------------------------------------------------------------------
Value Funds
--------------
Janus Mid Cap
Value Fund     Mid-Cap
- Inv(2)       Value Funds          31   66/212         16     23/149
Janus Small
 Cap Value
 Fund -        Small-Cap
 Inv.(a)(2)    Core Funds           46  245/541         37    157/434
----------------------------------------------------------------------


Janus Investment Funds                Lipper Rankings Based
                                  on Total Returns as of 9/30/04
                            ------------------------------------------
                                   5-Year               10-Year
                            --------------------- --------------------
                            Percentile   Rank /   Percentile  Rank /
               Lipper         Rank (%)   Total      Rank (%)  Total
                Category                  Funds                Funds
               ------------ ---------- ---------- ---------- ---------
Growth Funds
--------------
Janus
Enterprise     Mid-Cap
 Fund          Growth Funds        93  237 / 255         57   56 / 98
Janus Fund     Large-Cap
               Growth Funds        63  233 / 371         36  42 / 116
Janus
Mercury        Large-Cap
 Fund          Growth Funds        63  233 / 371          6   6 / 116
Janus
Olympus        Multi-Cap
 Fund          Growth Funds        62  127 / 207          -         -
Janus Orion    Multi-Cap
 Fund          Growth Funds         -          -          -         -
Janus Twenty   Large-Cap
 Fund(a)       Growth Funds        70  259 / 371          1   1 / 116
Janus Venture  Small-Cap
 Fund(a)       Growth Funds        64  178 / 280         39   31 / 80
----------------------------------------------------------------------
Core Funds
--------------
Janus Balanced Balanced
 Fund          Funds               38  138 / 366          8  11 / 149
Janus Core     Large-Cap
 Equity Fund   Core Funds          13   77 / 607          -         -
Janus Growth
and Income     Large-Cap
 Fund          Core Funds          31  183 / 607          4   7 / 217
Janus Risk-
Managed        Multi-Cap
 Stock Fund    Core Funds           -          -          -         -
Janus
Contrarian     Multi-Cap
 Fund(1)       Core Funds           -          -          -         -
----------------------------------------------------------------------
Income Funds
--------------
Janus Federal
Tax-Exempt     General Muni
 Fund          Debt Funds          84  193 / 230         72  92 / 128
Janus Flexible Intermediate
 Income Fund   Inv Grade
               Debt Funds          54  138 / 258         12  13 / 113
Janus High-    High Current
Yield Fund     Yield Funds         14   37 / 276          -         -
Janus Short-   Short
Term Bond      Investment
 Fund          Grade
               Debt Funds          35    34 / 98         33   18 / 54
----------------------------------------------------------------------
International/
Global Funds
--------------
Janus Global   Health/
Life Sciences  Biotechnology
 Fund          Funds               62    40 / 64          -         -
Janus Global
 Opportunities
 Fund          Global Funds         -          -          -         -
Janus Global   Science &
 Technology    Technology
 Fund          Funds               54   61 / 114          -         -
Janus Overseas International
 Fund          Funds               32  158 / 501          4   5 / 151
Janus
 Worldwide
 Fund          Global Funds        85  151 / 178         37   21 / 56
----------------------------------------------------------------------
Value Funds
--------------
Janus Mid Cap
Value Fund     Mid-Cap
- Inv(2)       Value Funds          3    3 / 100          -         -
Janus Small
 Cap Value
 Fund -        Small-Cap
 Inv.(a)(2)    Core Funds          24   72 / 309          -         -
----------------------------------------------------------------------
                     Percent of Retail Funds per Lipper Quartile
                                based on Total Returns
                     -------------------------------------------
                      1-Year      3-Year      5-Year    10-Year
                     -------------------------------------------
1st Quartile             39.1%       40.9%      21.1%      50.0%
2nd Quartile             34.8        27.3       21.1       33.3
3rd Quartile             17.4        27.3       42.1       16.7
4th Quartile              8.7         4.5       15.8        0.0
----------------------------------------------------------------

Data presented reflects past performance, which is no guarantee of
future results.

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.

Some funds may have experienced poor or negative short-term
performance. Call 1-800-525-3713 for current month end performance.

Funds not ranked by Lipper are not included in percentages disclosed
on page 2.

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.

A fund's performance for very short time periods may not be indicative
of future performance.

1. Effective September 30, 2004, Janus Special Equity Fund changed its
   name to Janus Contrarian Fund.

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

(a) Closed to new investors.
 Exhibit 2
 Janus Investment Funds             Average Annual Total Returns(%)(1)
                                     PERIODS ENDING September 30, 2004
                                ONE    THREE  FIVE   TEN     SINCE
                                YEAR   YEARS  YEARS  YEARS  INCEPTION
Growth & Core (Inception Date)
Janus Fund (2/70)               7.57    1.01  (6.52)  8.29    13.91
Janus Twenty Fund(2) (4/85)    20.99    4.58  (7.11) 12.21    13.16
Janus Olympus Fund (12/95)      9.91    3.56  (5.68)     -    10.44
Janus Orion Fund(11) (6/00)    19.08    8.61      -      -   (10.44)
Janus Mercury Fund (5/93)      11.58    0.56  (6.52) 10.80    12.36
Janus Enterprise
 Fund(3) (9/92)                16.96    5.27  (7.56)  7.62    10.28
Janus Venture
 Fund(2,3) (4/85)              13.96   11.92  (0.50)  9.50    13.06
Janus Growth and
 Income Fund (5/91)            11.54    2.14  (0.97) 13.01    12.95
Janus Contrarian Fund (2/00)   19.23   12.15      -      -     3.04
Janus Core Equity Fund (6/96)  16.26    4.69   1.03      -    11.76
Janus Balanced Fund (9/92)      9.16    4.45   3.13  11.34    11.29

International & Global
 (Inception Date)
Janus Worldwide
 Fund(4,11) (5/91)              7.08   (0.60) (4.54)  7.86    10.61
Janus Overseas
 Fund(3,4,11) (5/94)           17.76    6.73   1.21  10.24     9.88
Janus Global Technology
 Fund(3,4,11) (12/98)          (2.01)  (0.04)(11.94)     -    (0.92)
Janus Global Life
 Sciences Fund(4) (12/98)      16.00    0.18   6.27      -     9.23
Janus Global Opportunities
  Fund(4,5) (6/01)             17.03   11.98      -      -     7.93
Janus International
 Equity Fund
  (4,11,14,15,16) (7/90)       23.14   11.18  (0.51)  4.51     5.68

Value (Inception Date)
Janus Focused Value
 Fund(14,15) (3/90)            11.01    8.77  11.39  14.01    12.88
Janus Mid Cap Value Fund -
 Investor Shares(12) (8/98)    23.71   16.44  17.83      -    18.12
Janus Mid Cap Value Fund -
 Institutional Shares
 (2,12) (8/98)                 23.93   16.67  17.96      -    18.24
Janus Small Cap Value Fund -
 Investor Shares(2,13) (10/87) 20.91   14.87  14.33  15.85    14.63
Janus Small Cap Value Fund -
 Institutional Shares
  (2,13) (10/87)               21.18   15.22  14.64  16.12    14.79

Risk-Managed (Inception Date)
Janus Risk-Managed
 Stock Fund(4,18) (2/03)       21.14       -      -      -    24.46

Fixed-Income (Inception Date)
Janus Flexible Income
 Fund(6,9,10) (7/87)            3.36    6.46   6.57   7.73     8.07
Janus High-Yield
 Fund(4,6,9,10) (12/95)        10.61    9.86   7.07      -     8.58
Janus Short-Term Bond
 Fund(6,7,9) (9/92)             2.61    3.35   5.04   5.38     5.07
Janus Federal Tax-Exempt
 Fund(6,7,8,9) (5/93)           1.94    4.38   4.94   5.34     4.82

Money Market (Inception Date)
Janus Money Market
 Fund(17) (2/95)                0.69    1.06   2.74      -     3.89

Money Market Fund Current 7-Day Yield and 7-Day Yield without waivers
as of September 30, 2004 were 1.28% and 1.18%, respectively.

Janus Government Money
 Market Fund(17 )(2/95)         0.62    1.00   2.66      -     3.80

Janus Government Money Market Fund Current 7-Day Yield and 7-Day Yield
without waivers as of September 30, 2004 were 1.21% and 1.11%,
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 1-800-525-1068 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.

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) Janus Capital has contractually agreed to waive Janus Short-Term
    Bond Fund and Janus Federal Tax-Exempt Fund's total operating
    expenses to the levels indicated in the prospectus until at least
    March 1, 2006. Without such waivers, Janus Short-Term Bond Fund
    and Janus Federal Tax-Exempt Fund's yield would have been 1.67%
    and 2.18%, 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 September 30, 2004, 30-day SEC Yield was 2.62% on Janus
    Federal Tax-Exempt Fund, 3.53% on Janus Flexible Income Fund,
    5.73% on Janus High-Yield Fund and 2.02% 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 April 21,
    2003 are those of Berger Mid Cap Value Fund.

(13) Returns shown for Janus Small Cap Value Fund prior to April 21,
    2003 are those of Berger Small Cap Value Fund.

(14) Returns shown for Focused Value Fund and International Equity
    Fund for periods prior to October 13, 2003 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 July 6, 1990, 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) Janus Capital has contractually agreed to reduce the Fund's total
    operation expenses to the levels indicated in the prospectus until
    at least March 1, 2006. Without such waivers total return would
    have been lower.

(18) The voluntary waiver of the Fund's management fee terminated on
    June 25, 2004. Without such waivers total returns from inception
    to June 24, 2004 would have been lower.

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

    SOURCE: Janus Capital Group Inc.