Janus Announces Fourth Quarter and Year-End 2004 Results

Company Release - 1/26/2005 8:00 AM ET

DENVER--(BUSINESS WIRE)--Jan. 26, 2005--Janus Capital Group Inc. (NYSE:JNS):

    --  Fourth Quarter GAAP Earnings of $0.08 per Diluted Share; $0.73
        per Diluted Share for 2004

    --  Adjusted Fourth Quarter Earnings of $0.13 per Diluted Share;
        $0.59 per Diluted Share for 2004

    --  Early Adoption of Stock Option Accounting Standard Reduced
        2004 Earnings by $.06 per Diluted Share

    --  Seventy-five Percent of Janus-managed Equity Funds End Year In
        Top Two Lipper Quartiles Over 1- and 3-Year Periods

Janus Capital Group Inc. (NYSE:JNS) today reported fourth quarter 2004 GAAP net income of $18.2 million, or $0.08 per diluted share, compared with net income of $811.7 million, or $3.51 per diluted share, in the fourth quarter 2003. For the full year 2004, GAAP net income totaled $169.5 million, or $0.73 per diluted share, compared to $942.7 million, or $4.11 per diluted share, in 2003. To reflect the early adoption of the new stock option accounting standard (SFAS 123R), Janus restated prior years' financial statements. This reduced fourth quarter 2004 and 2003 earnings each by $0.01 per diluted share and full year 2004 and 2003 earnings by $0.06 and $0.03 per diluted share, respectively.

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. Excluding these items, fourth quarter adjusted net income totaled $28.8 million, or $0.13 per diluted share, compared with $53.3 million, or $0.23 per diluted share, in the fourth quarter of 2003. (Fourth quarter 2003 earnings per share includes $0.03 per share of equity earnings from Janus' former investment in DST.) Net income on an adjusted basis for the full year 2004 was $137.0 million, or $0.59 per diluted share, in 2004 compared with $199.4 million, or $0.87 per diluted share, in 2003.

The fourth quarter 2004 adjusted numbers exclude a $15.0 million charge for the early vesting of stock awards (see further discussion below) and a $2.2 million facility closure charge. Adjusted numbers for the fourth quarter 2003 exclude a gain from the DST Systems, Inc. (DST) transaction of $807.7 million and charges of $73.8 million related to the mutual fund investigation and the write-down of certain intangible assets. 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 7 and 8 of this release.)

CEO Perspective

"Our two most important priorities in 2004 were delivering strong fund performance and stabilizing assets under management," said Chairman and CEO Steve Scheid. "Gary and I are pleased with the significant progress the firm has made on the performance front, as well as the improving trend in our flows."

Long-term redemptions stabilized in the second half of 2004 to the lowest level in six years. In December, for the third consecutive month, gross sales of Janus' long-term products (not including INTECH and money markets) improved.

"We took several deliberate steps in 2004 to turn the tide on net flows," Scheid said. "We invested in our brand advertising, expanded our distribution efforts by adding seasoned sales professionals and, most importantly, delivered very strong fund performance. I'm confident that these measures will improve our net flows in 2005."

Scheid noted that in the fourth quarter 2004, Janus continued its previously announced $500 million share repurchase plan by repurchasing 2.6 million common shares at an aggregate purchase price of $42.1 million. A total of 5.6 million common shares were purchased in the open market during 2004 at an aggregate purchase price of $83.7 million.

New Compensation Agreements and Ownership Guidelines

During the fourth quarter, Janus took measures to further align the firm's portfolio managers and executives with fundholders and stockholders. The measures include:

    --  Adoption of a New Portfolio Manager Compensation Plan --
        Effective January 1, 2005, Janus' 21 Denver-based portfolio
        managers agreed to a new compensation plan that is tied to 1-
        and 3-year fund performance, with greater emphasis on 3-year
        results. Additionally, a significant portion of the portfolio
        managers' variable compensation will be earned and paid in a
        combination of Janus equity grants and Janus mutual funds.
        Finally, in consideration of the portfolio managers' early
        adoption of the new compensation plan to replace prior
        contractual arrangements, the 2004 annual long-term incentive
        award to portfolio managers, which was scheduled to be granted
        in early 2005, was awarded in vested Janus common stock on
        December 31, 2004. A charge of $15.0 million was recorded in
        the fourth quarter 2004 for this accelerated vesting.

    --  Development of Stock and Mutual Fund Ownership Guidelines --
        Effective January 1, 2005, Janus instituted JNS stock and
        Janus mutual fund ownership guidelines for all executives,
        vice presidents, portfolio managers and analysts. The
        guidelines require that a certain level of compensation be
        held in JNS stock and Janus mutual fund shares.

"These initiatives further align Janus' executives and portfolio managers with our fund and stockholders," said President and Chief Investment Officer Gary Black. "Most importantly, the Board, Steve and I are pleased to have the new portfolio manager agreements in place and completed ahead of schedule. This development sends a strong message to our fundholders and clients that our investment team is stable, properly aligned and squarely focused on what matters most, delivering consistently strong fund performance."

Investment Management Performance

"Led by outstanding performers across a wide variety of investment disciplines, Janus continued delivering strong returns in 2004," said Black.

Specific standouts included Janus Twenty Fund and Janus Contrarian Fund. Janus Twenty Fund finished the year as the top performing large-cap growth fund out of 652 funds in its Lipper category, and in the top 6% of large-cap growth funds (32 out of 538 funds) for the three-year period based on total returns. In Lipper's multi-cap core universe, Janus Contrarian Fund finished the year ranked fourth out of 722 funds for the one-year period and in the top 3% (12 out of 514 funds) for the three-year period based on total returns. Other Janus funds that were in their top Lipper quartile for the 1- and 3-year periods ending December 31, 2004 were: Janus Core Equity Fund, Janus Growth and Income Fund, Janus Mercury Fund, Janus Orion Fund and Janus Venture Fund.

Performance of Janus Investment Fund (JIF), the company's primary fund family, remained strong in the fourth quarter of 2004. As of December 31, 2004, more than 60% of those funds were in the top half of their Lipper categories on a 1-year, total-return basis. Additionally, more than 68% of the JIF funds were in the top half of their Lipper categories on a 3-year, total-return basis at the end of December. Lastly, 75% of all Denver-based JIF equity funds were in the top two quartiles over both the 1- and 3-year periods.

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

Investment Management Financial Results - Fourth Quarter 2004 vs. Fourth Quarter 2003

Average assets under management in the fourth quarter 2004 totaled $134.9 billion compared with $149.2 billion for the comparable 2003 quarter, a decrease of 9.6%. This decrease, combined with $5.8 million in settlement-related management fee reductions that began July 1, 2004, caused total revenues to decline 12.9%, from $254.2 million to $221.5 million. After excluding the items discussed on pages 7 and 8 of this release, operating expenses increased $12.2 million due to increases in employee compensation, television and print advertising, and general and administrative expenses, offset by declines in distribution expenses and depreciation. On an adjusted basis, fourth quarter 2004 operating income and margins totaled $49.1 million and 22.2%, respectively, compared with $94.0 million and 37.0%, respectively, in the fourth quarter 2003.

Investment Management Financial Results - 2004 vs. 2003

Average assets under management for 2004 were $137.8 billion, a 4.4% decrease from average assets last year of $144.1 billion. The lower assets under management and the July 1, 2004 settlement-mandated decrease in management fees resulted in a 6.6% decline in total revenue, from $987.5 million to $921.8 million, while adjusted operating expenses decreased $15.7 million, or 2.3%, driven principally by declines in distribution expenses and depreciation. For the full year 2004, adjusted operating income was $266.8 million and adjusted operating margins were 28.9% compared with 2003 adjusted operating income of $316.8 million and adjusted operating margins of 32.1%.

Printing and Fulfillment Financial Results

On an adjusted basis, the printing and fulfillment business realized losses of $3.5 million in the fourth quarter and $9.5 million for the full year 2004. During the fourth quarter of 2004, the business was restructured to be more competitive, which included the closure of one non-critical facility. A charge of $2.2 million was recorded during the quarter related to this closure.

Fourth Quarter 2004 Earnings Call

Janus Capital Group will discuss its results during a conference call Wednesday, January 26 at 10:00 a.m. Eastern Standard 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 one hour 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 (1/05).

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

                            Three Months Ended         Year Ended
                        --------------------------- -----------------
                        Dec. 31, Sept. 30, Dec. 31, Dec. 31, Dec. 31,
                          2004     2004      2003     2004     2003
                        -------- --------- -------- -------- --------
Revenues:
 Investment management
  fees                  $176.5   $170.2    $203.4   $733.8   $781.5
 Shareowner servicing
  fees and other          45.0     45.0      50.8    188.0    206.0
 Printing and
  fulfillment             18.3     22.6       7.2     89.0      7.2
                       -------  -------   -------  -------  -------
    Total                239.8    237.8     261.4  1,010.8    994.7
                       -------  -------   -------  -------  -------

Operating expenses:
 Employee compensation
  and benefits            62.8     57.9      53.0    255.2    227.3
 Stock based
  compensation            37.2     22.1      20.1    110.8     90.2
 Marketing and
  fulfillment              9.2      6.5       4.7     28.6     21.3
 Distribution             29.5     29.2      35.4    125.1    143.4
 Depreciation and
  amortization            13.1     13.3      16.3     56.6     67.6
 General, administrative
  and occupancy           40.3     32.8      31.4    143.4    121.6
 Cost of printing and
  fulfillment             19.7     22.8       6.5     87.6      6.5
 Restructuring and
  impairments              2.2     10.2       9.3     26.6     11.9
 Provision for mutual
  fund investigation         -        -      62.8     65.0     71.8
                       -------  -------   -------  -------  -------
    Total                214.0    194.8     239.5    898.9    761.6
                       -------  -------   -------  -------  -------

Operating Income          25.8     43.0      21.9    111.9    233.1

Equity in earnings of
 unconsolidated
 affiliates                1.8      1.6      12.5      6.1     67.8
Gain on disposition of
 DST common shares           -        -     631.3    228.0    631.3
Interest expense          (7.2)    (4.8)    (15.0)   (38.4)   (60.5)
Loss on early
 extinguishment
 of debt                     -        -         -    (55.5)       -
Other, net                 8.6      4.9       4.1     19.6     11.4
                       -------  -------   -------  -------  -------
  Income before taxes
   and minority
   interest               29.0     44.7     654.8    271.7    883.1

Income tax provision
 (benefit)                 7.7     (5.5)   (156.7)    92.2    (69.7)
Minority interest in
 consolidated earnings     3.1      2.9       1.5     10.0      4.2
                       -------  -------   -------  -------  -------
Income from continuing
 operations               18.2     47.3     810.0    169.5    948.6
                       -------  -------   -------  -------  -------

Loss from operations of
 Nelson                      -        -         -        -     (3.7)
Gain (loss) on disposal
 of Nelson                   -        -       1.7        -     (2.2)
                       -------  -------   -------  -------  -------
  Gain (loss) from
   discontinued
   operations                -        -       1.7        -     (5.9)
                       -------  -------   -------  -------  -------

Net income               $18.2    $47.3    $811.7   $169.5   $942.7
                       =======  =======   =======  =======  =======


Basic earnings per share
 Weighted average
  common shares
  outstanding (in
  millions)              228.7    231.8     229.3    230.8    227.8
 Income from continuing
  operations             $0.08    $0.20     $3.53    $0.73    $4.17
 Income (loss) from
  discontinuing
  operations                 -        -      0.01        -    (0.03)
                       -------  -------   -------  -------  -------
    Net income           $0.08    $0.20     $3.54    $0.73    $4.14
                       -------  -------   -------  -------  -------

Diluted earnings per share
 Weighted average
  diluted common
  shares outstanding
  (in millions)          229.9    233.0     231.0    231.8    229.5
 Income from continuing
  operations             $0.08    $0.20     $3.50    $0.73    $4.14
 Income (loss) from
  discontinuing
  operations                 -        -      0.01        -    (0.03)
                       -------  -------   -------  -------  -------
    Net income           $0.08    $0.20     $3.51    $0.73    $4.11
                       -------  -------   -------  -------  -------
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 December 31, 2004
           -----------------------------------------------------------
                           Invest-                   Printing
           Invest-  Non-    ment    Printing  Non-     and
            ment    GAAP   Manage-    and     GAAP   Fulfill-
           Manage- Adjust-  ment    Fulfill- Adjust-   ment   Adjusted
            ment    ments  Adjusted   ment    ments  Adjusted   Total
           ------- ------- -------- -------- ------- -------- --------
Revenues   $221.5      $-   $221.5    $18.3      $-    $18.3   $239.8

Operating
 expenses   187.4  (15.0)(11) 172.4    24.4       -     24.4    196.8
Restructuring
 and
 impairments    -       -         -     2.2    (2.2)       -        -
           ------  ------    ------  ------  ------   ------   ------
   Total    187.4   (15.0)    172.4    26.6    (2.2)    24.4    196.8
           ------  ------    ------  ------  ------   ------   ------

Operating
 Income
 (Loss)      34.1    15.0      49.1    (8.3)    2.2     (6.1)    43.0
Operating
 Margin      15.4%             22.2%  -45.4%           -33.3%    17.9%

Other
 expenses
 (income)       -       -         -    (0.1)      -     (0.1)    (0.1)
Income tax
 provision
 (benefit)   11.1     5.7(4)   16.8    (3.4)    0.9     (2.5)    14.3
           ------  ------    ------  ------  ------   ------   ------
Net Income
 (Loss)     $23.0    $9.3     $32.3   $(4.8)   $1.3    $(3.5)   $28.8
           ======  ======    ======  ======  ======   ======   ======
Diluted
 Earnings
 (Loss) per
 Share      $0.10   $0.04     $0.14  $(0.02)  $0.01   $(0.01)   $0.13

Average
 Assets
 Under
 Management
 (Billions) $134.9


             Three Months Ended September 30, 2004
           ------------------------------------------
                           Invest-
           Invest-  Non-    ment    Printing
            ment    GAAP   Manage-    and
           Manage- Adjust-  ment    Fulfill- Adjusted
            ment    ments  Adjusted   ment     Total
           ------- ------- -------- -------- --------
Revenues    $215.2      $-   $215.2    $22.6   $237.8

Operating
 expenses    157.7  (2.6)(1)  155.1     26.9    182.0
Restructuring
 and
 impairments  10.2 (10.2)(2,3)    -        -        -
            ------  ------   ------   ------   ------
   Total     167.9   (12.8)   155.1     26.9    182.0
            ------  ------   ------   ------   ------

Operating
 Income
 (Loss)       47.3    12.8     60.1     (4.3)    55.8
Operating
 Margin       22.0%            27.9%   -19.0%    23.5%

Other
 expenses
 (income)      1.4     2.5(4)   3.9     (0.2)     3.7
Income tax
 provision
 (benefit)    (3.8)   27.3(4)  23.5     (1.7)    21.8
            ------  ------   ------   ------   ------
Net Income
 (Loss)      $49.7  $(17.0)   $32.7    $(2.4)   $30.3
            ======  ======   ======   ======   ======

Diluted
 Earnings
 (Loss) per
 Share       $0.21  $(0.07)    $0.14  $(0.01)    $0.13

Average
 Assets
 Under
 Management
 (Billions) $129.2


                       Three Months Ended December 31, 2003
           -----------------------------------------------------------
                           Invest-
           Invest-  Non-    ment    Printing          Non-
            ment    GAAP   Manage-    and             GAAP
           Manage- Adjust-  ment    Fulfill-         Adjust-  Adjusted
            ment    ments  Adjusted   ment     DST    ments     Total
           ------- ------- -------- -------- ------- -------- --------
Revenues   $254.2      $-   $254.2     $7.2      $-       $-   $261.4

Operating
 expenses   160.2       -    160.2      7.2       -        -    167.4
Restructuring
 and
 impairments  9.3   (9.3)(5)     -        -       -        -        -
Provision for
 mutual fund
 invest-
 igation     62.8  (62.8)(9)     -        -       -        -        -
           ------  ------   ------   ------  ------   ------   ------
   Total    232.3   (72.1)   160.2      7.2       -        -    167.4
           ------  ------   ------   ------  ------   ------   ------

Operating
 Income      21.9    72.1     94.0        -       -        -     94.0
Operating
 Margin       8.6%            37.0%                              36.0%

Other
 expenses
 (income)     9.2   1.7(10)   10.9        -   (11.0)       -     (0.1)
Gain on DST
 exchange       -       -        -        -  (631.3)   631.3        -
Income tax
 provision   15.5   21.1(4)   36.6        -  (172.2)   176.4     40.8
           ------  ------   ------   ------  ------   ------   ------
Net Income
 (Loss)     $(2.8)  $49.3    $46.5       $-  $814.5  $(807.7)   $53.3
           ======  ======   ======   ======  ======   ======   ======

Diluted
 Earnings
 (Loss) per
 Share     $(0.01)  $0.21    $0.20       $-   $3.53   $(3.50)   $0.23

Average
 Assets
 Under
 Management
 (Billions) $149.2

See notes to non-GAAP adjustments on page 8.
JANUS CAPITAL GROUP INC.
                 Non-GAAP Reconciliations (continued)
             (dollars in millions, except per share data)

                        Year Ended December 31, 2004
           -----------------------------------------------------------
                           Invest-                   Printing
           Invest-  Non-    ment    Printing  Non-     and
            ment    GAAP   Manage-    and     GAAP   Fulfill-
           Manage- Adjust-  ment    Fulfill- Adjust-   ment   Adjusted
            ment    ments  Adjusted   ment    ments  Adjusted   Total
           ------- ------- -------- -------- ------- -------- --------
Revenues   $921.8      $-   $921.8    $89.0      $-    $89.0 $1,010.8

Operating
 expenses   701.8(46.8)(1,11)655.0    105.5       -    105.5    760.5
Restructuring
 and
 impairments 24.4 (24.4)(2,3,8)  -      2.2    (2.2)       -        -
Provision for
 mutual fund
 invest-
 igation     65.0   (65.0)(9)    -        -       -        -        -
           ------  ------   ------   ------  ------   ------   ------
   Total    791.2  (136.2)   655.0    107.7    (2.2)   105.5    760.5
           ------  ------   ------   ------  ------   ------   ------

Operating
 Income
 (Loss)     130.6   136.2    266.8    (18.7)    2.2    (16.5)   250.3
Operating
 Margin      14.2%            28.9%   -21.0%           -18.5%    24.8%

Other
 expenses
 (income)  (149.1)175.0(4,6,7)25.9     (0.7)      -     (0.7)    25.2
Income tax
 provision
 (benefit)   99.4   (5.0)(4)  94.4     (7.2)    0.9     (6.3)    88.1
           ------  ------   ------   ------  ------   ------   ------

Net Income
 (Loss)    $180.3  $(33.8)  $146.5   $(10.8)   $1.3    $(9.5)  $137.0
           ======  ======   ======   ======  ======   ======   ======

Diluted
 Earnings
 (Loss) per
 Share      $0.78  $(0.15)   $0.63   $(0.05)   $0.01  $(0.04)   $0.59

Average
 Assets
 Under
 Management
 (Billions) $137.8


                          Year Ended December 31, 2003
           -----------------------------------------------------------
                           Invest-
           Invest-  Non-    ment    Printing          Non-
            ment    GAAP   Manage-    and             GAAP
           Manage- Adjust-  ment    Fulfill-         Adjust-  Adjusted
            ment    ments  Adjusted   ment     DST    ments     Total
           ------- ------- -------- -------- ------- -------- --------
Revenues   $987.5      $-   $987.5     $7.2      $-       $-   $994.7

Operating
 expenses   670.7       -    670.7      7.2       -        -    677.9
Restructuring
 and
 impairments 11.9  (11.9)(5)     -        -       -        -        -
Provision for
 mutual fund
 invest-
 igation     71.8  (71.8)(9)     -        -       -        -        -

   Total    754.4   (83.7)   670.7      7.2       -        -    677.9
           ------  ------   ------   ------  ------   ------   ------

Operating
 Income     233.1    83.7    316.8        -       -        -    316.8
Operating
 Margin      23.6%            32.1%     0.0%                     31.8%

Other
 expenses
 (income)    55.9  (6.2)(10)  49.7        -   (64.5)       -    (14.8)
Gain on DST
 exchange       -       -        -        -  (631.3)   631.3        -
Income tax
 provision   82.1   25.5(4)  107.6        -  (151.8)   176.4    132.2
           ------  ------   ------   ------  ------   ------   ------
Net
 Income     $95.1   $64.4   $159.5       $-  $847.6  $(807.7)  $199.4
           ======  ======   ======   ======  ======   ======   ======

Diluted
 Earnings
 per Share  $0.42   $0.28    $0.70       $-   $3.69   $(3.52)   $0.87

Average
 Assets
 Under
 Management
 (Billions) $144.1


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 ($8.2 million) 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. In 2004, additional
    charges of $25.0 million were recorded due to the reversal of tax
    contingencies and related accrued expenses.

(5) In 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
    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 2004, a write-down of intangible assets totaling $14.2 million
    was recorded associated with the termination notices received 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.

(11) Equity award granted on a vested basis in 2004.
JANUS CAPITAL GROUP INC.
            UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
                         (dollars in millions)

                                            December 31,  December 31,
                                               2004          2003
                                            ------------  ------------
Assets
 Cash and cash equivalents                    $535.6      $1,222.8
 Other current assets                          536.3         243.4
 Investments and other assets                  234.3         386.2
 Property and equipment, net                    62.0          58.7
 Intangibles and goodwill, net               2,399.4       2,421.1
                                             -------       -------
   Total Assets                             $3,767.6      $4,332.2
                                             =======       =======

Liabilities and Stockholders' Equity
 Debt                                         $377.5        $852.6
 Other liabilities                             219.8         316.5
 Deferred income taxes                         435.8         484.8
 Stockholders' equity                        2,734.5       2,678.3
                                             -------       -------
   Total Liabilities and Stockholders'
    Equity                                  $3,767.6      $4,332.2
                                             =======       =======
                   UNAUDITED CONDENSED CONSOLIDATED
                         CASH FLOW INFORMATION
                         (dollars in millions)

                           Three Months Ended           Year Ended
                       ---------------------------  -----------------
                       Dec. 31, Sept. 30, Dec. 31,  Dec. 31, Dec. 31,
Cash provided by         2004     2004      2003      2004     2003
(used in)              -------- --------- --------  -------- --------

 Operating activities   $44.3  $(178.0)    $92.0    $(10.4)  $260.2
 Investing activities  (327.9)    (4.1)  1,007.9     (37.3)   837.1
 Financing activities   (45.4)   (53.9)     (0.2)   (639.5)   (27.0)
                      -------  -------   -------   -------  -------
Net change during
 period               $(329.0) $(236.0) $1,099.7   $(687.2)$1,070.3
                      =======  =======   =======   =======  =======
                  ASSETS UNDER MANAGEMENT BY MANAGER
                         (dollars in billions)

                     December 31,    September 30,    December 31,
                        2004      %     2004       %     2003      %
                     ----------- --- ------------ --- ----------- ---
Janus Capital
 Management LLC        $103.2   74.2%  $101.1    77.6%  $128.8   85.0%
Bay Isle Financial
 LLC                      0.5    0.4%     0.6     0.5%     1.2    0.8%
Enhanced Investment
 Technologies, LLC       25.8   18.6%    20.1    15.4%    14.3    9.4%
Perkins, Wolf,
 McDonnell and Company    9.5    6.8%     8.4     6.5%     7.2    4.8%
                        -----  -----    -----   -----    -----  -----
  Total assets         $139.0  100.0%  $130.2   100.0%  $151.5  100.0%
                        =====  =====    =====   =====    =====  =====
JANUS CAPITAL GROUP INC.
                 ASSET FLOWS BY INVESTMENT DISCIPLINE
                         (dollars in billions)

                              Three Months Ended        Year Ended
                                 December 31,          December 31,
                              ------------------       ------------
                               2004       2003        2004       2003
                               ----       ----        ----       ----
Growth Equity
-------------
Beginning of period assets    $66.7      $83.6       $84.9      $81.5
 Dispositions                     -       (1.5)          -       (1.5)
 Sales                          1.3        2.9         6.8       20.5
 Redemptions                   (6.8)     (10.0)      (29.5)     (36.8)
                              -----      -----       -----      -----
 Net redemptions               (5.6)      (7.1)      (22.8)     (16.3)
 Market appreciation
  (depreciation)                7.9        9.9         6.9       21.2
                              -----      -----       -----      -----
End of period assets          $69.0      $84.9       $69.0      $84.9
                              =====      =====       =====      =====

Mathematical/Quantitative
-------------------------
Beginning of period assets    $20.1      $11.1       $14.3       $7.3
 Sales                          4.1        2.0        10.4        5.3
 Redemptions                   (0.2)      (0.2)       (1.8)      (0.9)
                              -----      -----       -----      -----
 Net sales                      3.9        1.8         8.6        4.4
 Market appreciation
  (depreciation)                1.8        1.4         2.9        2.6
                              -----      -----       -----      -----
End of period assets          $25.8      $14.3       $25.8      $14.3
                              =====      =====       =====      =====

Fixed Income
------------
Beginning of period assets     $5.8       $8.0        $7.3       $6.8
 Sales                          0.6        0.5         1.8        4.8
 Redemptions                   (0.5)      (1.4)       (3.0)      (5.1)
                              -----      -----       -----      -----
 Net sales (redemptions)        0.1       (0.9)       (1.2)      (0.3)
 Market appreciation
  (depreciation)                0.2        0.2         0.1        0.8
                              -----      -----       -----      -----
End of period assets           $6.2       $7.3        $6.2       $7.3
                              =====      =====       =====      =====

Core/Blend
----------
Beginning of period assets    $16.8      $20.5       $20.8      $18.9
 Sales                          0.6        0.7         2.4        4.2
 Redemptions                   (1.8)      (2.4)       (7.9)      (6.4)
                              -----      -----       -----      -----
 Net redemptions               (1.1)      (1.7)       (5.5)      (2.2)
 Market appreciation
  (depreciation)                1.7        2.0         2.1        4.1
                              -----      -----       -----      -----
End of period assets          $17.4      $20.8       $17.4      $20.8
                              =====      =====       =====      =====

Value
-----
Beginning of period assets     $8.9       $7.3        $8.4       $6.4
 Dispositions                     -          -        (0.6)         -
 Sales                          0.8        0.8         3.3        2.4
 Redemptions                   (0.7)      (0.8)       (2.9)      (2.4)
                              -----      -----       -----      -----
 Net sales                      0.1          -         0.4          -
 Market appreciation            0.8        1.1         1.6        2.0
                              -----      -----       -----      -----
End of period assets           $9.8       $8.4        $9.8       $8.4
                              =====      =====       =====      =====

Money Market
------------
Beginning of period assets    $11.8      $16.0       $15.8      $17.5
 Sales                         19.5       30.2        87.4      171.4
 Redemptions                  (20.5)     (30.4)      (92.3)    (173.1)
                              -----      -----       -----      -----
 Net sales (redemptions)       (1.0)      (0.2)       (4.9)      (1.7)
 Market appreciation              -          -           -          -
                              -----      -----       -----      -----
End of period assets          $10.8      $15.8       $10.8      $15.8
                              =====      =====       =====      =====

Complex-Wide
------------
Beginning of period assets   $130.2     $146.5      $151.5     $138.4
 Dispositions                     -       (1.5)       (0.6)      (1.5)
 Sales                         27.1       37.1       112.0      208.6
 Redemptions                  (30.6)     (45.2)     (137.5)    (224.7)
                              -----      -----       -----      -----
 Net redemptions               (3.5)      (8.1)      (25.5)     (16.1)
 Market appreciation
  (depreciation)               12.3       14.6        13.7       30.7
                              -----      -----       -----      -----
End of period assets         $139.0     $151.5      $139.0     $151.5
                              =====      =====       =====      =====

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 Fund                 Lipper Rankings Based
                                 on Total Returns as of 12/31/04
                           -------------------------------------------
                                  1-Year                3-Year
                           --------------------- ---------------------
                                        Rank /                Rank /
               Lipper      Percentile   Total    Percentile   Total
                Category    Rank (%)    Funds     Rank (%)    Funds
               ---------- ---------------------- ---------------------
Growth Funds
----------------------------------------------------------------------
Janus          Mid-Cap
 Enterprise     Growth
 Fund           Funds              6   29 / 529         30  124 / 425
Janus Fund     Large-Cap
                Growth
                Funds             75  489 / 652         37  197 / 538
Janus Mercury  Large-Cap
 Fund           Growth
                Funds             16  103 / 652         22  117 / 538
Janus Olympus  Multi-Cap
 Fund           Growth
                Funds             68  283 / 418         60  205 / 343
Janus Orion    Multi-Cap
 Fund           Growth
                Funds             20   80 / 418         17   56 / 343
Janus Twenty   Large-Cap
 Fund(1)        Growth
                Funds              1    1 / 652          6   32 / 538
Janus Venture  Small-Cap
 Fund(1)        Growth
                Funds             11   56 / 515         12   49 / 427
----------------------------------------------------------------------
Core Funds
----------------------------------------------------------------------
Janus Balanced Balanced
 Fund           Funds             38  215 / 576         39  173 / 446
Janus Core     Large-Cap
 Equity Fund    Core Funds         3   20 / 925          7   49 / 788
Janus Growth   Large-Cap
 and Income     Core Funds
 Fund                             11   94 / 925         25  191 / 788
Janus Risk-    Multi-Cap
 Managed Stock  Core Funds
 Fund                              5   32 / 722          -          -
Janus          Multi-Cap
 Contrarian     Core Funds
 Fund                              1    4 / 722          3   12 / 514
----------------------------------------------------------------------
Income Funds
----------------------------------------------------------------------
Janus Federal  General Muni
 Tax-Exempt     Debt Funds
 Fund                             88  261 / 297         64  171 / 269
Janus Flexible Intermediate
 Income Fund    Inv Grade
                Debt Funds        56  256 / 460         11   39 / 379
Janus High-    High Current
 Yield Fund     Yield Funds       60  248 / 416         71  246 / 346
Janus Short-   Short
 Term Bond      Investment
 Fund           Grade Debt
                Funds             16   31 / 195         36   46 / 127
----------------------------------------------------------------------
International/Global Funds
----------------------------------------------------------------------
Janus Global   Health/
 Life Sciences Bio-
 Fund          technology
               Funds              10   18 / 195         49   77 / 159
Janus Global   Global Funds
 Opportunities
 Fund                             37  115 / 317         18   45 / 250
Janus Global   Science &
 Technology     Technology
 Fund           Funds             62  189 / 305         61  170 / 279
Janus Overseas Inter-
 Fund           national
                Funds             42  357 / 854         75  527 / 703
Janus          Global Funds
 Worldwide
 Fund                             97  308 / 317         99  246 / 250
----------------------------------------------------------------------
Value Funds
----------------------------------------------------------------------
Janus Mid Cap  Mid-Cap
 Value Fund  -  Value Funds
 Inv(2)                           58  136 / 234         40   71 / 177
Janus Small    Small-Cap
 Cap Value      Core Funds
 Fund -
 Inv.(1,2)                        88  490 / 556         76  338 / 448
----------------------------------------------------------------------

Janus Investment Fund                 Lipper Rankings Based
                                 on Total Returns as of 12/31/04
                           -------------------------------------------
                                  5-Year                10-Year
                           --------------------- ---------------------
                                        Rank /                Rank /
               Lipper      Percentile   Total    Percentile   Total
                Category    Rank (%)    Funds     Rank (%)    Funds
               ---------- ---------------------- ---------------------
Growth Funds
----------------------------------------------------------------------
Janus          Mid-Cap
 Enterprise     Growth
 Fund           Funds             93  262 / 282         68   74 / 109
Janus Fund     Large-Cap
                Growth
                Funds             59  246 / 418         37   49 / 133
Janus Mercury  Large-Cap
 Fund           Growth
                Funds             78  326 / 418          6    8 / 133
Janus Olympus  Multi-Cap
 Fund           Growth
                Funds             75  168 / 223          -          -
Janus Orion    Multi-Cap
 Fund           Growth
                Funds              -          -          -          -
Janus Twenty   Large-Cap
 Fund(1)        Growth
                Funds             78  323 / 418          1    1 / 133
Janus Venture  Small-Cap
 Fund(1)        Growth
                Funds             83  257 / 310         33    28 / 85
----------------------------------------------------------------------
Core Funds
----------------------------------------------------------------------
Janus Balanced Balanced
 Fund           Funds             57  208 / 368          8   12 / 162
Janus Core     Large-Cap
 Equity Fund    Core Funds        24  141 / 605          -          -
Janus Growth   Large-Cap
 and Income     Core Funds
 Fund                             56  335 / 605          3    6 / 221
Janus Risk-    Multi-Cap
 Managed Stock  Core Funds
 Fund                              -          -          -          -
Janus          Multi-Cap
 Contrarian     Core Funds
 Fund                              -          -          -          -
----------------------------------------------------------------------
Income Funds
----------------------------------------------------------------------
Janus Federal  General Muni
 Tax-Exempt     Debt Funds
 Fund                             84  197 / 234         73  101 / 139
Janus Flexible Intermediate
 Income Fund    Inv Grade
                Debt Funds        65  173 / 266          9   11 / 132
Janus High-    High Current
 Yield Fund     Yield Funds       22   59 / 275          -          -
Janus Short-   Short
 Term Bond      Investment
 Fund           Grade Debt
                Funds             40    40 / 99         38    21 / 55
----------------------------------------------------------------------
International/Global Funds
----------------------------------------------------------------------
Janus Global   Health/
 Life Sciences  Bio-
 Fund           technology
                Funds             79    56 / 70          -          -
Janus Global   Global Funds
 Opportunities
 Fund                              -          -          -          -
Janus Global   Science &
 Technology     Technology
 Fund           Funds             64   84 / 131          -          -
Janus Overseas Inter-
 Fund           national
                Funds             72  367 / 513          5    7 / 163
Janus          Global Funds
 Worldwide
 Fund                             93  165 / 178         43    24 / 56
----------------------------------------------------------------------
Value Funds
----------------------------------------------------------------------
Janus Mid Cap  Mid-Cap
 Value Fund  -  Value Funds
 Inv(2)                           20   21 / 108          -          -
Janus Small    Small-Cap
 Cap Value      Core Funds
 Fund -
 Inv.(1,2)                        27   83 / 318          -          -
----------------------------------------------------------------------

                             Percent of JIF Funds per Lipper Quartile
                                       based on Total Returns
                             -----------------------------------------
                              1-Year     3-Year     5-Year   10-Year
----------------------------------------------------------------------
1st Quartile                     47.8%       40.9%    15.8%      50.0%
2nd Quartile                     13.1        27.3     10.5       33.3
3rd Quartile                     26.1        22.7     36.9       16.7
4th Quartile                     13.0         9.1     36.8        0.0
----------------------------------------------------------------------

Past performance 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.

Funds not ranked by Lipper are not included in percentages disclosed on pages 1 and 2. Rankings exclude money market funds.

1. Closed to new investors.

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

Janus Investment Fund     Average Annual Total Returns (%) for
                               Periods Ended 12/31/04(1)
                          --------------------------------------------
                                                                Life
                    Inception                                    of
Fund                  Date    1 Year  3 Year  5 Year  10 Year   Fund
                    --------- ------  ------  ------  -------   ----
Growth Funds
----------------------------------------------------------------------
Janus Fund            2/70      4.69   (0.04)  (8.88)    9.32  14.11
Janus Twenty
 Fund(2,7)            4/85     23.89    5.66  (10.81)   13.81  13.68
Janus Mercury Fund    5/93     10.77    1.28  (10.84)   11.86  13.23
Janus Olympus Fund   12/95      8.74    0.92  (11.35)      --  11.44
Janus Enterprise
 Fund                 9/92     20.69    5.54  (13.27)    8.65  11.31
Janus Venture
 Fund(2,3)            4/85     17.56   10.03   (8.65)   11.25  13.90
Janus Orion Fund(4)   6/00     14.90    5.09      --       --  (7.73)
----------------------------------------------------------------------
Core Funds
----------------------------------------------------------------------
Janus Growth and
 Income Fund          5/91     11.89    3.06   (3.65)   14.63  13.69
Janus Balanced Fund   9/92      8.71    4.93    1.43    12.01  11.60
Janus Contrarian
 Fund(4)              2/00     22.61   12.76      --       --   6.61
Janus Core Equity
 Fund                 6/96     13.77    4.76   (1.27)      --  11.76
Janus Risk-Managed
 Stock Fund(5,6)      2/03     17.68     --       --       --  26.90
----------------------------------------------------------------------
International/Global Funds
----------------------------------------------------------------------
Janus Worldwide
 Fund(5)              5/91      5.54   (1.01)  (9.06)    9.10  11.29
Janus Overseas
 Fund(4,5)            5/94     18.58    7.27   (5.02)   11.99  11.25
Janus Global Life
 Sciences Fund(5)    12/98     14.95    0.79    2.26       --  10.30
Janus Global
 Technology
 Fund(3,4,5)         12/98      1.23   (4.18) (18.92)      --   1.47
Janus Global
 Opportunities
 Fund(5)              6/01     15.33   10.31      --       --  10.96
----------------------------------------------------------------------
Value Funds
----------------------------------------------------------------------
Janus Small Cap Value
 Fund - Inv.(2,8)    10/87     13.57    9.46   14.83    17.47  14.90
Janus Mid Cap Value
 Fund  - Inv.(12)     8/98     18.36   12.75   17.08       --  19.13
----------------------------------------------------------------------
Income Funds
----------------------------------------------------------------------
Janus Flexible Income
 Fund(9,10,11)        7/87      3.82    6.68    6.43     7.97   8.01
Janus High-Yield
 Fund(5,9,10,11)     12/95      9.42    9.20    6.90       --   8.75
Janus Short-Term
 Bond Fund(9,10,13)   9/92      1.96    3.14    4.78     5.42   4.95
Janus Federal Tax-
 Exempt
 Fund(9,10,13,14)     5/93      2.49    5.17    5.50     5.69   4.80
----------------------------------------------------------------------

Notes:
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.  This Fund may have significant exposure to emerging markets which
    may lead to greater price volatility.
5.  A 2% redemption fee may be imposed on shares held for 3 months or
    less.
6.  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.
7.  Returns have sustained significant gains and losses due to market
    volatility in the consumer discretionary sector.
8.  Returns shown for Janus Small Cap Value Fund prior to April 21,
    2003 are those of Berger Small Cap Value Fund.
9.  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.
10. As of December 31, 2004, 30-day SEC Yield was 2.85% on Janus
    Federal Tax-Exempt Fund, 3.85% on Janus Flexible Income Fund,
    5.57% on Janus High-Yield Fund and 2.801% on Janus Short-Term Bond
    Fund.
11. 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.
12. Returns shown for Janus Mid Cap Value Fund prior to April 21, 2003
    are those of Berger Mid Cap Value Fund.
13. 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 2.46%
    and 2.40%, respectively and total returns would have been lower.
14. 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.
15. 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 1-800-525-3713 or visit janus.com for current month end
    performance.

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.
    CONTACT: Janus Capital Group Inc.
             Investor Relations Contacts:
             Steve Belgrad, 303-394-770
             Tamar Gerber, 303-336-4092
             Media Contacts:
             Jane Ingalls, 303-394-7311
             Shelley Peterson, 303-316-5625

    SOURCE: Janus Capital Group Inc.