Exhibit 99.1
October 26, 2005
JANUS ANNOUNCES THIRD QUARTER 2005 FINANCIAL RESULTS
Third quarter GAAP earnings of $0.15 per diluted share and
adjusted earnings of $0.14 per diluted share
Long-term net inflows of $1.7 billion for quarter; highest level in five years
Strong investment performance continues
Board announces CEO succession plan
DENVER –Janus Capital Group Inc. (NYSE: JNS) today reported third quarter GAAP net income of $31.7 million, or $0.15 per diluted share, compared with GAAP net income of $25.7 million, or $0.12 per diluted share, in the second quarter 2005.
To provide a more comparable basis for evaluating Janus’ operating results and financial performance over time, Janus management analyzes results after adjusting for certain items that are neither ongoing nor operational in nature. (Please refer to the reconciliation of GAAP to adjusted financials on pages 10 and 11.)
Excluding these items, third quarter 2005 adjusted net income was $31.0 million, or $0.14 per diluted share, compared with $24.7 million, or $0.11 per diluted share, in the second quarter 2005.
Investment Management operating margins on a GAAP basis for the third quarter 2005 were 22.7% compared with 21.0% in the second quarter 2005. On an adjusted basis, Investment Management operating margins for the third quarter 2005 were 25.8% compared with 23.0% in the second quarter 2005. Janus expects its 2006 operating expenses to be $20 million to $25 million lower due to expense-reduction efforts during the third quarter 2005.
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Flows and Assets Under Management
Average assets under management in the third quarter were $135.0 billion versus $129.3 billion in the second quarter 2005, a 4.4% increase. At September 30, 2005, assets under management totaled $139.4 billion compared with $130.3 billion at June 30, 2005. The higher assets in the third quarter reflect long-term net inflows of $1.7 billion, money market net inflows of $0.4 billion and market appreciation of $7.0 billion. This quarter’s long-term net inflows of $1.7 billion represent Janus’ highest level in five years and the company’s first quarter with positive flows since the second quarter 2003.
Janus’ INTECH subsidiary continued to deliver strong performance in the mathematical discipline, with record net sales of $5.1 billion in the third quarter compared with $3.8 billion in the second quarter. INTECH assets under management at September 30, 2005 were $38.2 billion compared with $31.7 billion at the end of the second quarter of this year. Janus’ third-quarter long-term net outflows of $3.4 billion improved by $0.5 billion from the second quarter, excluding INTECH and the previously announced ING redemption of $2.0 billion. Janus’ net flows now have improved for five of the last six quarters.
“This was our best quarter of flows in five years,” said CEO Steve Scheid. “Our positive flows – combined with strong market conditions during the quarter – led to improvements in our earnings per share and operating margins. These results reflect significant strides in our financial performance.”
A breakdown of flows by channel can be found on page 12 and details on flows by discipline can be found on page 13.
CEO Succession
The board of directors of Janus Capital Group announced today that President and Chief Investment Officer Gary Black will become chief executive officer on January 3, 2006. Black, who will be CEO and CIO, will succeed Chairman and CEO Steve Scheid. Scheid will remain chairman of the board.
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Paul Balser, the board’s lead independent director, said it’s the right time to make the transition because Janus is a stronger and more stable company.
“The board owes Steve Scheid a huge debt of gratitude,” Balser said. “We asked Steve to be Janus’ CEO and he did exactly what we needed him to do: resolve the regulatory issues, stabilize Janus, strengthen the management team and position the firm for growth. Now it’s time for Gary to build on that foundation.”
Balser called the succession plan “a natural evolution of a productive partnership.”
“Steve and Gary made every key decision together and they’ve put all the right pieces in place for Janus to deliver shareholder value,” Balser said.
Scheid said he and the board believe Janus needs a seasoned investment professional back in the driver’s seat. “Given our research heritage and investment-focused culture, Gary has the ideal background to lead Janus,” Scheid said. “Gary’s vision, intelligence and passion for our business make him the right person for the job.“
Black, 45, joined Janus April 26, 2004 as president and chief investment officer after serving as CIO for Goldman Sachs Asset Management’s Global Equities business. Before working at Goldman, Black was a number-one-rated analyst onInstitutional Investormagazine’s “All-America Research Team” for six consecutive years while at Alliance Bernstein.
“I appreciate the board’s vote of confidence,” said Black. “As we move forward, the management team and I will stay focused on three priorities: delivering consistently strong performance, improving our flows and expanding our presence in the institutional and intermediary markets. We also remain committed to returning excess capital to our shareholders by continuing to repurchase shares.”
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Investment Management
Investment Management performance remained strong in the third quarter. As of September 30, 2005, approximately 65% of the funds in the company’s primary retail fund family, Janus Investment Fund (JIF), were in the top half of their Lipper categories on a one-year total return basis. More than 59% of the JIF funds were in the top half of their Lipper categories on a three-year total return basis. (Detailed Lipper rankings and performance data for all JIF funds are on page 14.)
Key highlights of investment performance as of quarter-end included:
| | • | | 88% and 63% of Janus-managed JIF equity funds are in the top half of their Lipper categories on a one-year and three-year total-return basis, respectively. |
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| | • | | 90% of JIF funds rank in the top half of their Lipper categories on a total return basis since portfolio manager inception. |
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| | • | | Seven Janus products rank in the top 2% of their respective Lipper categories on a one-year total-return basis: Janus Twenty; Janus Adviser Forty; Janus Orion; Janus Growth and Income; Janus Contrarian; Janus Core Equity; and Janus Overseas. |
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| | • | | The Wall Street Journalcited eight Janus products as “Category Kings” in its Mutual Funds Quarterly Review for the third quarter 2005. |
Black said he’s encouraged that the marketplace is noticing the good investment returns the company’s been delivering.
“Perception has lagged reality for some time, so it’s good to see that our strong, consistent performance is translating into better flows,” Black said.
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Financial Discussion – Third Quarter 2005 vs. Second Quarter 2005
Financial Highlights
(dollars in millions, except per share data or as noted)
| | | | | | | | | | | | | | | | | |
| | | GAAP Results | | | Adjusted Results | |
| | | Three Months Ended | | | Three Months Ended | |
| | | September 30, | | | June 30, | | | September 30, | | | June 30, | |
| | | 2005 | | | 2005 | | | 2005 | | | 2005 | |
Investment Management Segment | | | | | | | | | | | | | | | | |
| Average Assets($ bn) | | $ | 135.0 | | | $ | 129.3 | | | $ | 135.0 | | | $ | 129.3 | |
| Ending AUM ($ bn) | | $ | 139.4 | | | $ | 130.3 | | | $ | 139.4 | | | $ | 130.3 | |
| Revenues | | $ | 218.4 | | | $ | 208.7 | | | $ | 218.4 | | | $ | 208.7 | |
| Operating Expenses | | $ | 168.9 | | | $ | 164.8 | | | $ | 162.0 | | | $ | 160.6 | |
| Operating Income | | $ | 49.5 | | | $ | 43.9 | | | $ | 56.4 | | | $ | 48.1 | |
| Operating Margin | | | 22.7 | % | | | 21.0 | % | | | 25.8 | % | | | 23.0 | % |
| | | | | | | | | | | | | | | | | |
| Consolidated Net Income | | $ | 31.7 | | | $ | 25.7 | | | $ | 31.0 | | | $ | 24.7 | |
| Diluted Earnings Per Share | | $ | 0.15 | | | $ | 0.12 | | | $ | 0.14 | | | $ | 0.11 | |
| Common Stock Repurchases (shares mm) | | | 7.1 | | | | 3.8 | | | | 7.1 | | | | 3.8 | |
| Shares Repurchased | | $ | 101.9 | | | $ | 55.3 | | | $ | 101.9 | | | $ | 55.3 | |
Adjusted Investment Management Segment
Third quarter 2005 adjusted operating margins improved to 25.8% from 23.0% in the second quarter, reflecting increased revenues of $9.7 million and a slight rise in adjusted operating expenses. Third quarter revenues increased to $218.4 million from $208.7 million in the previous quarter based on the higher average assets under management this quarter. The $1.4 million increase in adjusted operating expenses was driven by higher compensation costs offset by lower advertising expenses as Janus shifted its advertising focus from mass market television to select print publications. The increase in employee compensation was caused by higher investment-performance-driven incentive compensation. During the third quarter, Janus implemented certain expense-reduction efforts that are expected to reduce operating expenses by $20 million to $25 million in 2006, net of continued investments in the business.
Printing and Fulfillment Segment
Janus’ Printing and Fulfillment business, Rapid Solutions Group, had an operating loss of $4.7 million in the third quarter 2005 compared with a $4.1 million loss in the second quarter of 2005. As with the second quarter, the current quarter loss was primarily driven by expected lower seasonal volumes.
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Capital and Liquidity
At September 30, 2005, Janus had stockholders’ equity of $2.6 billion, cash and investments of $849.3 million and $376.6 million of debt outstanding. As part of the company’s active management of its capital and liquidity position, Janus repurchased 7.1 million shares of its common shares in the third quarter at an average price of $14.42 per share, for a total of $101.9 million. Since July 2004, when the Board of Directors authorized the current $500 million share repurchase plan, Janus has repurchased 23.5 million shares totaling $340.9 million, reducing outstanding shares by 9%.
Third Quarter 2005 Earnings Call Information
Janus Capital Group will discuss its results during a conference call on Wednesday, October 26th at 10 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 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/ir.
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), and Capital Group Partners, Inc. In addition, Janus Capital Group owns 30% of Perkins, Wolf, McDonnell and Company, LLC.
| | | |
Investor Relations Contact: | | Media Contacts: |
| Steve Belgrad, 303-394-7706 | | Shelley Peterson, 303-316-5625 |
| | | Blair Johnson, 720-210-1439 |
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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. Rankings referenced exclude money markets.
Funds distributed by Janus Distributors LLC (10/05).
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’ Annual Report on Form 10-K for the year ended December 31, 2004, on file with the Securities and Exchange Commission (Commission file no. 001-15253), including those that appear under headings such as “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” 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 expressed or implied therein will not be realized.
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JANUS CAPITAL GROUP INC.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
GAAP BASIS
(dollars in millions, except per share data)
| | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended | |
| | | September 30, | | | June 30, | | | March 31, | | | December 31, | | | September 30, | |
| | | 2005 | | | 2005 | | | 2005 | | | 2004 | | | 2004 | |
Investment Management Revenues: | | | | | | | | | | | | | | | | | | | | |
| Investment management fees | | $ | 176.2 | | | $ | 167.3 | | | $ | 173.1 | | | $ | 176.5 | | | $ | 170.2 | |
| Shareowner servicing fees and other | | | 42.2 | | | | 41.4 | | | | 42.9 | | | | 45.0 | | | | 45.0 | |
| | | | | | | | | | | | | | | | |
| Total | | | 218.4 | | | | 208.7 | | | | 216.0 | | | | 221.5 | | | | 215.2 | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
Investment Management Operating Expenses: | | | | | | | | | | | | | | | | | | | | |
| Employee compensation and benefits | | | 80.1 | | | | 69.4 | | | | 71.3 | | | | 61.4 | | | | 56.7 | |
| Long-term incentive compensation | | | 18.1 | | | | 18.5 | | | | 19.0 | | | | 37.1 | | | | 22.0 | |
| Marketing and fulfillment | | | 5.4 | | | | 9.0 | | | | 9.7 | | | | 9.2 | | | | 6.5 | |
| Distribution | | | 25.5 | | | | 25.9 | | | | 27.1 | | | | 29.5 | | | | 29.2 | |
| Depreciation and amortization | | | 8.4 | | | | 9.4 | | | | 10.2 | | | | 11.1 | | | | 11.5 | |
| General, administrative and occupancy | | | 31.4 | | | | 38.6 | | | | 32.1 | | | | 39.1 | | | | 31.8 | |
| Restructuring and impairments | | | — | | | | — | | | | 5.5 | | | | — | | | | 10.2 | |
| Provision for mutual fund investigation, net of recoveries | | | — | | | | (6.0 | ) | | | (3.3 | ) | | | — | | | | — | |
| | | | | | | | | | | | | | | | |
| Total | | | 168.9 | | | | 164.8 | | | | 171.6 | | | | 187.4 | | | | 167.9 | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
Investment Management Operating Income | | | 49.5 | | | | 43.9 | | | | 44.4 | | | | 34.1 | | | | 47.3 | |
| | | | | | | | | | | | | | | | | | | | | |
Printing and Fulfillment Segment: | | | | | | | | | | | | | | | | | | | | |
| Revenue | | | 19.1 | | | | 20.6 | | | | 23.0 | | | | 18.3 | | | | 22.6 | |
| Operating expenses | | | 21.9 | | | | 22.8 | | | | 24.2 | | | | 24.7 | | | | 25.0 | |
| Intangibles amortization | | | 1.9 | | | | 1.9 | | | | 1.9 | | | | 1.9 | | | | 1.9 | |
| | | | | | | | | | | | | | | | |
Printing and Fulfillment Operating Loss | | | (4.7 | ) | | | (4.1 | ) | | | (3.1 | ) | | | (8.3 | ) | | | (4.3 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| Interest expense | | | (7.2 | ) | | | (7.2 | ) | | | (7.2 | ) | | | (7.2 | ) | | | (4.8 | ) |
| Other, net | | | 7.9 | | | | 11.4 | | | | 9.3 | | | | 8.6 | | | | 4.9 | |
| Income tax benefit (provision) | | | (10.5 | ) | | | (15.7 | ) | | | (21.4 | ) | | | (7.7 | ) | | | 5.5 | |
| Equity in earnings of unconsolidated affiliate | | | 1.9 | | | | 1.7 | | | | 1.7 | | | | 1.8 | | | | 1.6 | |
| Minority interest in consolidated earnings | | | (5.2 | ) | | | (4.3 | ) | | | (4.1 | ) | | | (3.1 | ) | | | (2.9 | ) |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
Net Income | | $ | 31.7 | | | $ | 25.7 | | | $ | 19.6 | | | $ | 18.2 | | | $ | 47.3 | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
Basic Earnings per Share | | | | | | | | | | | | | | | | | | | | |
Weighted average shares outstanding (in millions) | | | 216.2 | | | | 221.0 | | | | 226.0 | | | | 228.7 | | | | 231.8 | |
| Basic earnings per share | | $ | 0.15 | | | $ | 0.12 | | | $ | 0.09 | | | $ | 0.08 | | | $ | 0.20 | |
| | | | | | | | | | | | | | | | | | | | | |
Diluted Earnings per Share | | | | | | | | | | | | | | | | | | | | |
Weighted average shares outstanding (in millions) | | | 217.2 | | | | 221.8 | | | | 227.1 | | | | 229.9 | | | | 233.0 | |
| Diluted earnings per share | | $ | 0.15 | | | $ | 0.12 | | | $ | 0.09 | | | $ | 0.08 | | | $ | 0.20 | |
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JANUS CAPITAL GROUP INC.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
NON-GAAP ADJUSTED BASIS
(dollars in millions, except per share data)
| | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended | |
| | | September 30, | | | June 30, | | | March 31, | | | December 31, | | | September 30, | |
| | | 2005 | | | 2005 | | | 2005 | | | 2004 | | | 2004 | |
Investment Management Revenues: | | | | | | | | | | | | | | | | | | | | |
| Investment management fees | | $ | 176.2 | | | $ | 167.3 | | | $ | 173.1 | | | $ | 176.5 | | | $ | 170.2 | |
| Shareowner servicing fees and other | | | 42.2 | | | | 41.4 | | | | 42.9 | | | | 45.0 | | | | 45.0 | |
| | | | | | | | | | | | | | | | |
| Total | | | 218.4 | | | | 208.7 | | | | 216.0 | | | | 221.5 | | | | 215.2 | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
Investment Management Operating Expenses: | | | | | | | | | | | | | | | | | | | | |
| Employee compensation and benefits | | | 73.5 | | | | 66.2 | | | | 71.3 | | | | 61.4 | | | | 54.1 | |
| Long-term incentive compensation | | | 17.8 | | | | 18.5 | | | | 19.0 | | | | 22.1 | | | | 22.0 | |
| Marketing and fulfillment | | | 5.4 | | | | 9.0 | | | | 9.7 | | | | 9.2 | | | | 6.5 | |
| Distribution | | | 25.5 | | | | 25.9 | | | | 27.1 | | | | 29.5 | | | | 29.2 | |
| Depreciation and amortization | | | 8.4 | | | | 9.4 | | | | 10.2 | | | | 11.1 | | | | 11.5 | |
| General, administrative and occupancy | | | 31.4 | | | | 31.6 | | | | 32.1 | | | | 39.1 | | | | 31.8 | |
| | | | | | | | | | | | | | | | |
| Total | | | 162.0 | | | | 160.6 | | | | 169.4 | | | | 172.4 | | | | 155.1 | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
Investment Management Operating Income | | | 56.4 | | | | 48.1 | | | | 46.6 | | | | 49.1 | | | | 60.1 | |
| | | | | | | | | | | | | | | | | | | | | |
Printing and Fulfillment Segment: | | | | | | | | | | | | | | | | | | | | |
| Revenue | | | 19.1 | | | | 20.6 | | | | 23.0 | | | | 18.3 | | | | 22.6 | |
| Operating expenses | | | 21.9 | | | | 22.8 | | | | 24.2 | | | | 22.5 | | | | 25.0 | |
| Intangibles amortization | | | 1.9 | | | | 1.9 | | | | 1.9 | | | | 1.9 | | | | 1.9 | |
| | | | | | | | | | | | | | | | |
Printing and Fulfillment Operating Loss | | | (4.7 | ) | | | (4.1 | ) | | | (3.1 | ) | | | (6.1 | ) | | | (4.3 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| Interest expense | | | (7.2 | ) | | | (7.2 | ) | | | (7.2 | ) | | | (7.2 | ) | | | (7.3 | ) |
| Other, net | | | 7.9 | | | | 5.6 | | | | 5.2 | | | | 8.6 | | | | 4.9 | |
| Income tax provision | | | (18.1 | ) | | | (15.1 | ) | | | (15.0 | ) | | | (14.3 | ) | | | (21.8 | ) |
| Equity in earnings of unconsolidated affiliate | | | 1.9 | | | | 1.7 | | | | 1.7 | | | | 1.8 | | | | 1.6 | |
| Minority interest in consolidated earnings | | | (5.2 | ) | | | (4.3 | ) | | | (4.1 | ) | | | (3.1 | ) | | | (2.9 | ) |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
Net Income | | $ | 31.0 | | | $ | 24.7 | | | $ | 24.1 | | | $ | 28.8 | | | $ | 30.3 | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
Basic Earnings per Share | | | | | | | | | | | | | | | | | | | | |
Weighted average shares outstanding (in millions) | | | 216.2 | | | | 221.0 | | | | 226.0 | | | | 228.7 | | | | 231.8 | |
| Basic earnings per share | | $ | 0.14 | | | $ | 0.11 | | | $ | 0.11 | | | $ | 0.13 | | | $ | 0.13 | |
| | | | | | | | | | | | | | | | | | | | | |
Diluted Earnings per Share | | | | | | | | | | | | | | | | | | | | |
Weighted average shares outstanding (in millions) | | | 217.2 | | | | 221.8 | | | | 227.1 | | | | 229.9 | | | | 233.0 | |
| Diluted earnings per share | | $ | 0.14 | | | $ | 0.11 | | | $ | 0.11 | | | $ | 0.13 | | | $ | 0.13 | |
See reconciliation of non-GAAP adjustments on pages 10 and 11.
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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. Only those line items impacted by adjustments are presented individually.
| | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended September 30, 2005 | |
| | | | | | | | | | | Investment | | | | | | | |
| | | Investment | | | Non-GAAP | | | Management | | | Printing and | | | Adjusted | |
| | | Management | | | Adjustments | | | Adjusted | | | Fulfillment | | | Total | |
| Revenues | | $ | 218.4 | | | $ | — | | | $ | 218.4 | | | $ | 19.1 | | | $ | 237.5 | |
| | | | | | | | | | | | | | | | | | | | | |
| Employee compensation and benefits | | | 80.1 | | | | (6.6 | )1 | | | 73.5 | | | | 1.4 | | | | 74.9 | |
| Long-term incentive compensation | | | 18.1 | | | | (0.3 | )1 | | | 17.8 | | | | 0.1 | | | | 17.9 | |
| Operating expenses | | | 70.7 | | | | — | | | | 70.7 | | | | 22.3 | | | | 93.0 | |
| | | | | | | | | | | | | | | | |
| Total | | | 168.9 | | | | (6.9 | ) | | | 162.0 | | | | 23.8 | | | | 185.8 | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
Operating Income (Loss) | | | 49.5 | | | | 6.9 | | | | 56.4 | | | | (4.7 | ) | | | 51.7 | |
Operating Margin | | | 22.7 | % | | | | | | | 25.8 | % | | | -24.6 | % | | | 21.8 | % |
| | | | | | | | | | | | | | | | | | | | | |
| Other income (expense) | | | (3.0 | ) | | | — | | | | (3.0 | ) | | | 0.4 | | | | (2.6 | ) |
| Income tax benefit (provision) | | | (12.1 | ) | | | (7.6 | )2 | | | (19.7 | ) | | | 1.6 | | | | (18.1 | ) |
| | | | | | | | | | | | | | | | |
Net Income (Loss) | | $ | 34.4 | | | $ | (0.7 | ) | | $ | 33.7 | | | $ | (2.7 | ) | | $ | 31.0 | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
Diluted Earnings (Loss) per Share | | $ | 0.16 | | | $ | — | | | $ | 0.16 | | | $ | (0.01 | ) | | $ | 0.14 | |
| | | | | | | | | | | | | | | | | | | | | |
Average Assets Under Management (Billions) | | $ | 135.0 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended June 30, 2005 | |
| | | | | | | | | | | Investment | | | | | | | |
| | | Investment | | | Non-GAAP | | | Management | | | Printing and | | | Adjusted | |
| | | Management | | | Adjustments | | | Adjusted | | | Fulfillment | | | Total | |
| Revenues | | $ | 208.7 | | | $ | — | | | $ | 208.7 | | | $ | 20.6 | | | $ | 229.3 | |
| | | | | | | | | | | | | | | | | | | | | |
| Operating expenses | | | 62.8 | | | | — | | | | 62.8 | | | | 24.7 | | | | 87.5 | |
| Employee compensation and benefits | | | 69.4 | | | | (3.2 | )3 | | | 66.2 | | | | — | | | | 66.2 | |
| General, administrative and occupancy | | | 38.6 | | | | (7.0 | )4 | | | 31.6 | | | | — | | | | 31.6 | |
| Provision for mutual fund investigation, net of recoveries | | | (6.0 | ) | | | 6.0 | 5 | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | |
| Total | | | 164.8 | | | | (4.2 | ) | | | 160.6 | | | | 24.7 | | | | 185.3 | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
Operating Income (Loss) | | | 43.9 | | | | 4.2 | | | | 48.1 | | | | (4.1 | ) | | | 44.0 | |
Operating Margin | | | 21.0 | % | | | | | | | 23.0 | % | | | -19.9 | % | | | 19.2 | % |
| | | | | | | | | | | | | | | | | | | | | |
| Interest expense | | | (7.2 | ) | | | — | | | | (7.2 | ) | | | — | | | | (7.2 | ) |
| Other income (expense) | | | 11.1 | | | | (5.8 | )6 | | | 5.3 | | | | 0.3 | | | | 5.6 | |
| Income tax benefit (provision) | | | (17.1 | ) | | | 0.6 | 7 | | | (16.5 | ) | | | 1.4 | | | | (15.1 | ) |
| Equity earnings in unconsolidated affiliate | | | 1.7 | | | | — | | | | 1.7 | | | | — | | | | 1.7 | |
| Minority interest in consolidated earnings | | | (4.3 | ) | | | — | | | | (4.3 | ) | | | — | | | | (4.3 | ) |
| | | | | | | | | | | | | | | | |
Net Income (Loss) | | $ | 28.1 | | | $ | (1.0 | ) | | $ | 27.1 | | | $ | (2.4 | ) | | $ | 24.7 | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
Diluted Earnings (Loss) per Share | | $ | 0.13 | | | $ | — | | | $ | 0.12 | | | $ | (0.01 | ) | | $ | 0.11 | |
| | | | | | | | | | | | | | | | | | | | | |
Average Assets Under Management (Billions) | | $ | 129.3 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended March 31, 2005 | |
| | | | | | | | | | | Investment | | | | | | | |
| | | Investment | | | Non-GAAP | | | Management | | | Printing and | | | Adjusted | |
| | | Management | | | Adjustments | | | Adjusted | | | Fulfillment | | | Total | |
| Revenues | | $ | 216.0 | | | $ | — | | | $ | 216.0 | | | $ | 23.0 | | | $ | 239.0 | |
| | | | | | | | | | | | | | | | | | | | | |
| Operating expenses | | | 169.4 | | | | — | | | | 169.4 | | | | 26.1 | | | | 195.5 | |
| Restructuring and impairments | | | 5.5 | | | | (5.5 | )8 | | | — | | | | — | | | | — | |
| Provision for mutual fund investigation | | | (3.3 | ) | | | 3.3 | 5 | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | |
| Total | | | 171.6 | | | | (2.2 | ) | | | 169.4 | | | | 26.1 | | | | 195.5 | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
Operating Income (Loss) | | | 44.4 | | | | 2.2 | | | | 46.6 | | | | (3.1 | ) | | | 43.5 | |
Operating Margin | | | 20.6 | % | | | | | | | 21.6 | % | | | -13.5 | % | | | 18.2 | % |
| | | | | | | | | | | | | | | | | | | | | |
| Interest expense | | | (7.2 | ) | | | — | | | | (7.2 | ) | | | — | | | | (7.2 | ) |
| Other income (expense) | | | 9.0 | | | | (4.1 | )6 | | | 4.9 | | | | 0.3 | | | | 5.2 | |
| Income tax benefit (provision) | | | (22.4 | ) | | | 6.4 | 7 | | | (16.0 | ) | | | 1.0 | | | | (15.0 | ) |
| Equity earnings in unconsolidated affiliate | | | 1.7 | | | | — | | | | 1.7 | | | | — | | | | 1.7 | |
| Minority interest in consolidated earnings | | | (4.1 | ) | | | — | | | | (4.1 | ) | | | — | | | | (4.1 | ) |
| | | | | | | | | | | | | | | | |
Net Income (Loss) | | $ | 21.4 | | | $ | 4.5 | | | $ | 25.9 | | | $ | (1.8 | ) | | $ | 24.1 | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
Diluted Earnings (Loss) per Share | | $ | 0.09 | | | $ | 0.02 | | | $ | 0.11 | | | $ | (0.01 | ) | | $ | 0.11 | |
| | | | | | | | | | | | | | | | | | | | | |
Average Assets Under Management (Billions) | | $ | 133.8 | | | | | | | | | | | | | | | | | |
See notes to non-GAAP adjustments on the following page.
10
JANUS CAPITAL GROUP INC.
NON-GAAP RECONCILIATIONS (CONTINUED)
(dollars in millions, except per share data)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended December 31, 2004 | |
| | | | | | | | | | | Investment | | | | | | | | | | | Printing and | | | | |
| | | Investment | | | Non-GAAP | | | Management | | | Printing and | | | Non-GAAP | | | Fulfillment | | | Adjusted | |
| | | Management | | | Adjustments | | | Adjusted | | | Fulfillment | | | Adjustments | | | Adjusted | | | Total | |
| Revenues | | $ | 221.5 | | | $ | — | | | $ | 221.5 | | | $ | 18.3 | | | $ | — | | | $ | 18.3 | | | $ | 239.8 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Operating expenses | | | 150.3 | | | | — | | | | 150.3 | | | | 24.4 | | | | — | | | | 24.4 | | | | 174.7 | |
| Long-term incentive compensation | | | 37.1 | | | | (15.0 | )9 | | | 22.1 | | | | — | | | | — | | | | — | | | | 22.1 | |
| Restructuring and impairments | | | — | | | | — | | | | — | | | | 2.2 | | | | (2.2 | )12 | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | |
| 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 income (expense) | | | — | | | | — | | | | — | | | | 0.1 | | | | — | | | | 0.1 | | | | 0.1 | |
| Income tax benefit (provision) | | | (11.1 | ) | | | (5.7 | )7 | | | (16.8 | ) | | | 3.4 | | | | (0.9 | )7 | | | 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 | | | | | | | |
| | | | | | | | | | | Investment | | | | | | | | | | | | | |
| | | Investment | | | Non-GAAP | | | Management | | | Printing and | | | Adjusted | | | | | | | |
| | | Management | | | Adjustments | | | Adjusted | | | Fulfillment | | | Total | | | | | | | |
| Revenues | | $ | 215.2 | | | $ | — | | | $ | 215.2 | | | $ | 22.6 | | | $ | 237.8 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Operating expenses | | | 101.0 | | | | — | | | | 101.0 | | | | 26.9 | | | | 127.9 | | | | | | | | | |
| Employee compensation and benefits | | | 56.7 | | | | (2.6 | )10 | | | 54.1 | | | | — | | | | 54.1 | | | | | | | | | |
| Restructuring and impairments | | | 10.2 | | | | (10.2 | )11 | | | — | | | | — | | | | — | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
| 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 | % | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest expense | | | (4.8 | ) | | | (2.5 | )7 | | | (7.3 | ) | | | — | | | | (7.3 | ) | | | | | | | | |
| Other income (expense) | | | 4.7 | | | | — | | | | 4.7 | | | | 0.2 | | | | 4.9 | | | | | | | | | |
| Income tax benefit (provision) | | | 3.8 | | | | (27.3 | )7 | | | (23.5 | ) | | | 1.7 | | | | (21.8 | ) | | | | | | | | |
| Equity earnings in unconsolidated affiliates | | | 1.6 | | | | — | | | | 1.6 | | | | — | | | | 1.6 | | | | | | | | | |
| Minority interest in consolidated earnings | | | (2.9 | ) | | | — | | | | (2.9 | ) | | | — | | | | (2.9 | ) | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
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 | | | | | | | | | | | | | | | | | | | | | | | | | |
Notes to non-GAAP adjustments:
| (1) | | Severance charge related to the departure of the Principal Operating Officer and other administrative personnel. |
| |
| (2) | | Includes tax effect of adjustments and $5.0 million for the reversal of a tax contingency. |
| |
| (3) | | Severance charge related to the departure of the CFO. |
| |
| (4) | | Accrual related to the possible resolution of certain legal-related matters. |
| |
| (5) | | Insurance recoveries of $6.0 million in Q1 2005 and $8.4 million in Q2 2005 for costs incurred related to the mutual fund investigation, net of Q1 2005 and Q2 2005 ongoing legal fees, respectively. |
| |
| (6) | | Realized gain on the sale of investments. In the first and second quarters, the Company reduced its seed capital investments by $22.8 million and $26.0 million, respectively. This reduction in seed capital produced after-tax gains of $2.5 million and $3.6 million in Q1 2005 and Q2 2005, respectively. Included in Q3 2005 is $1.9 million of investment gains which are considered a component of normal investing activity and therefore have not been adjusted. |
| |
| (7) | | Includes tax effect of adjustments. Q3 2004 includes the reversal of a $22.5 million tax contingency and related accrued interest of $2.5 million. |
| |
| (8) | | Charges related to the closure of a Bay Isle Financial LLC facility in Oakland, California, severance of a Bay Isle portfolio manager and impairment of intangibles associated with the loss of institutional accounts. |
| |
| (9) | | Equity awards granted on a vested basis in 2004. |
| |
| (10) | | Charges related to severance payments and the accelerated vesting of restricted stock as a result of executive level departures. |
| |
| (11) | | Charge of $8.2 million related to the closure of Janus’ Austin, Texas facility in 2001 and the pretax loss of $2.0 million from the sale of Bay Isle Financial LLC’s Private Client Asset Management Division. |
| |
| (12) | | Charges related to the closure of a non-strategic facility. |
11
JANUS CAPITAL GROUP INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in millions)
| | | | | | | | | |
| | | September 30, | | | December 31, | |
| | | 2005 | | | 2004 | |
Assets | | | | | | | | |
| Cash and cash equivalents | | $ | 526.0 | | | $ | 527.1 | |
| Investments | | | 323.3 | | | | 434.7 | |
| Other assets | | | 257.6 | | | | 344.4 | |
| Property and equipment, net | | | 63.2 | | | | 62.0 | |
| Intangibles and goodwill, net | | | 2,411.6 | | | | 2,399.4 | |
| | | | | | | |
Total Assets | | $ | 3,581.7 | | | $ | 3,767.6 | |
| | | | | | | |
| | | | | | | | | |
Liabilities and Stockholders’ Equity | | | | | | | | |
| Debt | | $ | 376.6 | | | $ | 377.5 | |
| Other liabilities | | | 207.2 | | | | 219.8 | |
| Deferred income taxes | | | 415.7 | | | | 435.8 | |
| Stockholders’ equity | | | 2,582.2 | | | | 2,734.5 | |
| | | | | | | |
Total Liabilities and Stockholders’ Equity | | $ | 3,581.7 | | | $ | 3,767.6 | |
| | | | | | | |
UNAUDITED CONDENSED CONSOLIDATED
CASH FLOW INFORMATION
(dollars in millions)
| | | | | | | | | | | | | |
| | | Three Months Ended | |
| | | September 30, | | | June 30, | | | September 30, | |
| Cash provided by (used in) | | 2005 | | | 2005 | | | 2004 | |
| Operating activities | | $ | 58.5 | | | $ | 100.1 | | | $ | (178.0 | ) |
| Investing activities | | | 2.8 | | | | 83.4 | | | | (4.1 | ) |
| Financing activities | | | (111.2 | ) | | | (62.4 | ) | | | (53.9 | ) |
| | | | | | | | | | |
Net change during period | | $ | (49.9 | ) | | $ | 121.1 | | | $ | (236.0 | ) |
| | | | | | | | | | |
ASSETS BY CHANNEL
(dollars in billions)
| | | | | | | | | | | | | |
| | | | | | | Net Flows for the
Three Months Ended | |
| | | September 30, | | | September 30, | | | June 30, | |
| | | 2005 | | | 2005 | | | 2005 | |
| Retail | | $ | 45.5 | | | $ | (1.0 | ) | | $ | (1.1 | ) |
| Global Advisors (excluding ING) | | | 51.6 | | | | (1.0 | ) | | | (2.2 | ) |
| Institutional | | | 42.3 | | | | 3.7 | | | | 3.2 | |
| | | | | | | | | | |
Total | | $ | 139.4 | | | $ | 1.7 | | | $ | (0.1 | ) |
| | | | | | | | | | |
Note: Flows exclude institutional money market
12
JANUS CAPITAL GROUP INC.
ASSETS & FLOWS BY INVESTMENT DISCIPLINE
(dollars in billions)
| | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended | |
| | | September 30, | | | December 31, | | | March 31, | | | June 30, | | | September 30, | |
| | | 2004 | | | 2004 | | | 2005 | | | 2005 | | | 2005 | |
Growth/Blend | | | | | | | | | | | | | | | | | | | | |
| Beginning of period assets | | $ | 74.3 | | | $ | 68.2 | | | $ | 71.4 | | | $ | 66.3 | | | $ | 64.7 | |
| Sales | | | 1.1 | | | | 1.5 | | | | 2.2 | | | | 1.6 | | | | 1.9 | |
| Redemptions | | | 4.4 | | | | 6.0 | | | | 4.8 | | | | 5.2 | | | | 4.1 | |
| | | | | | | | | | | | | | | | |
| Net flows | | | (3.3 | ) | | | (4.6 | ) | | | (2.6 | ) | | | (3.7 | ) | | | (2.2 | ) |
| Market | | | (2.8 | ) | | | 7.9 | | | | (2.5 | ) | | | 2.0 | | | | 4.2 | |
| | | | | | | | | | | | | | | | |
| End of period assets | | $ | 68.2 | | | $ | 71.4 | | | $ | 66.3 | | | $ | 64.7 | | | $ | 66.7 | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
Global/International | | | | | | | | | | | | | | | | | | | | |
| Beginning of period assets | | $ | 16.9 | | | $ | 15.1 | | | $ | 14.6 | | | $ | 13.4 | | | $ | 11.5 | |
| Sales | | | 0.3 | | | | 0.3 | | | | 0.4 | | | | 0.3 | | | | 0.3 | |
| Redemptions | | | 1.8 | | | | 2.4 | | | | 1.5 | | | | 1.9 | | | | 1.1 | |
| | | | | | | | | | | | | | | | |
| Net flows | | | (1.6 | ) | | | (2.2 | ) | | | (1.2 | ) | | | (1.7 | ) | | | (0.8 | ) |
| Market | | | (0.2 | ) | | | 1.8 | | | | — | | | | (0.2 | ) | | | 1.1 | |
| | | | | | | | | | | | | | | | |
| End of period assets | | $ | 15.1 | | | $ | 14.6 | | | $ | 13.4 | | | $ | 11.5 | | | $ | 11.7 | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
Mathematical/Quantitative | | | | | | | | | | | | | | | | | | | | |
| Beginning of period assets | | $ | 17.5 | | | $ | 20.1 | | | $ | 25.8 | | | $ | 27.6 | | | $ | 31.7 | |
| Sales | | | 3.0 | | | | 4.1 | | | | 2.4 | | | | 4.0 | | | | 5.5 | |
| Redemptions | | | 0.2 | | | | 0.2 | | | | 0.4 | | | | 0.3 | | | | 0.4 | |
| | | | | | | | | | | | | | | | |
| Net flows | | | 2.8 | | | | 3.9 | | | | 2.0 | | | | 3.8 | | | | 5.1 | |
| Market | | | (0.1 | ) | | | 1.8 | | | | (0.3 | ) | | | 0.4 | | | | 1.4 | |
| | | | | | | | | | | | | | | | |
| End of period assets | | $ | 20.1 | | | $ | 25.8 | | | $ | 27.6 | | | $ | 31.7 | | | $ | 38.2 | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
Fixed Income | | | | | | | | | | | | | | | | | | | | |
| Beginning of period assets | | $ | 6.0 | | | $ | 5.9 | | | $ | 6.2 | | | $ | 5.9 | | | $ | 5.7 | |
| Sales | | | 0.3 | | | | 0.7 | | | | 0.4 | | | | 0.3 | | | | 0.2 | |
| Redemptions | | | 0.5 | | | | 0.6 | | | | 0.5 | | | | 0.4 | | | | 0.5 | |
| | | | | | | | | | | | | | | | |
| Net flows | | | (0.2 | ) | | | 0.1 | | | | (0.2 | ) | | | (0.2 | ) | | | (0.2 | ) |
| Market | | | 0.1 | | | | 0.3 | | | | (0.1 | ) | | | 0.1 | | | | (0.1 | ) |
| | | | | | | | | | | | | | | | |
| End of period assets | | $ | 5.9 | | | $ | 6.2 | | | $ | 5.9 | | | $ | 5.7 | | | $ | 5.4 | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
Value | | | | | | | | | | | | | | | | | | | | |
| Beginning of period assets | | $ | 9.6 | | | $ | 9.1 | | | $ | 10.2 | | | $ | 10.2 | | | $ | 10.0 | |
Dispositions | | | (0.6 | ) | | | — | | | | — | | | | (0.2 | ) | | | — | |
| Sales | | | 0.8 | | | | 1.0 | | | | 1.0 | | | | 0.7 | | | | 0.7 | |
| Redemptions | | | 0.6 | | | | 0.8 | | | | 1.0 | | | | 1.1 | | | | 0.8 | |
| | | | | | | | | | | | | | | | |
| Net flows | | | 0.2 | | | | 0.1 | | | | 0.1 | | | | (0.4 | ) | | | (0.1 | ) |
| Market | | | — | | | | 0.8 | | | | — | | | | 0.4 | | | | 0.5 | |
| | | | | | | | | | | | | | | | |
| End of period assets | | $ | 9.1 | | | $ | 10.2 | | | $ | 10.2 | | | $ | 10.0 | | | $ | 10.4 | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
Money Market | | | | | | | | | | | | | | | | | | | | |
| Beginning of period assets | | $ | 11.1 | | | $ | 11.8 | | | $ | 10.8 | | | $ | 8.5 | | | $ | 6.7 | |
| Sales | | | 20.0 | | | | 19.5 | | | | 12.3 | | | | 9.2 | | | | 8.1 | |
| Redemptions | | | 19.4 | | | | 20.5 | | | | 14.6 | | | | 11.0 | | | | 7.7 | |
| | | | | | | | | | | | | | | | |
| Net flows | | | 0.6 | | | | (1.0 | ) | | | (2.3 | ) | | | (1.8 | ) | | | 0.4 | |
| Market | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | |
| End of period assets | | $ | 11.8 | | | $ | 10.8 | | | $ | 8.5 | | | $ | 6.7 | | | $ | 7.0 | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
Total | | | | | | | | | | | | | | | | | | | | |
Beginning of period assets | | $ | 135.4 | | | $ | 130.2 | | | $ | 139.0 | | | $ | 131.8 | | | $ | 130.3 | |
Dispositions | | | (0.6 | ) | | | — | | | | — | | | | (0.2 | ) | | | — | |
Sales | | | 25.5 | | | | 27.1 | | | | 18.6 | | | | 16.3 | | | | 16.6 | |
Redemptions | | | 27.1 | | | | 30.6 | | | | 22.8 | | | | 20.2 | | | | 14.5 | |
| | | | | | | | | | | | | | | | |
Net flows | | | (1.6 | ) | | | (3.5 | ) | | | (4.2 | ) | | | (3.9 | ) | | | 2.1 | |
Market | | | (3.0 | ) | | | 12.3 | | | | (3.0 | ) | | | 2.6 | | | | 7.0 | |
| | | | | | | | | | | | | | | | |
End of period assets | | $ | 130.2 | | | $ | 139.0 | | | $ | 131.8 | | | $ | 130.3 | | | $ | 139.4 | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
Total Excluding Money Markets | | | | | | | | | | | | | | | | | | | | |
Beginning of period assets | | $ | 124.3 | | | $ | 118.4 | | | $ | 128.2 | | | $ | 123.3 | | | $ | 123.6 | |
Dispositions | | | (0.6 | ) | | | — | | | | — | | | | (0.2 | ) | | | — | |
Sales | | | 5.5 | | | | 7.5 | | | | 6.3 | | | | 6.9 | | | | 8.5 | |
Redemptions | | | 7.7 | | | | 10.1 | | | | 8.2 | | | | 9.0 | | | | 6.8 | |
| | | | | | | | | | | | | | | | |
Net flows | | | (2.2 | ) | | | (2.6 | ) | | | (1.9 | ) | | | (2.1 | ) | | | 1.7 | |
Market | | | (3.0 | ) | | | 12.3 | | | | (3.0 | ) | | | 2.6 | | | | 7.0 | |
| | | | | | | | | | | | | | | | |
End of period assets | | $ | 118.4 | | | $ | 128.2 | | | $ | 123.3 | | | $ | 123.6 | | | $ | 132.4 | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| Total Excluding Mathematical/Quantitative & Money Markets | | | | | | | | | | | | | | | | |
Beginning of period assets | | $ | 106.8 | | | $ | 98.3 | | | $ | 102.4 | | | $ | 95.7 | | | $ | 91.9 | |
Dispositions | | | (0.6 | ) | | | — | | | | — | | | | (0.2 | ) | | | — | |
Sales | | | 2.5 | | | | 3.4 | | | | 3.9 | | | | 2.8 | | | | 3.1 | |
Redemptions | | | 7.5 | | | | 9.9 | | | | 7.8 | | | | 8.7 | | | | 6.4 | |
| | | | | | | | | | | | | | | | |
Net flows | | | (5.0 | ) | | | (6.5 | ) | | | (3.9 | ) | | | (5.9 | ) | | | (3.4 | ) |
Market | | | (2.9 | ) | | | 10.6 | | | | (2.7 | ) | | | 2.2 | | | | 5.7 | |
| | | | | | | | | | | | | | | | |
End of period assets | | $ | 98.3 | | | $ | 102.4 | | | $ | 95.7 | | | $ | 91.9 | | | $ | 94.2 | |
| | | | | | | | | | | | | | | | |
Each line has been rounded on the schedule individually to increase the accuracy of the amounts presented. Therefore totals and subtotals may not foot.
13
Janus Investment Fund
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | Lipper Rankings Based |
| | | | | | | on Total Returns as of 9/30/05 |
| | | | | | | 1-Year | | 3-Year | | 5-Year | | 10-Year | | Since PM Inception |
| | | | | | | Percentile | | Rank / | | Percentile | | Rank / | | Percentile | | Rank / | | Percentile | | Rank / | | Percentile | | Rank / |
| | | PM Inception | | Lipper Category | | Rank (%) | | Total Funds | | Rank (%) | | Total Funds | | Rank (%) | | Total Funds | | Rank (%) | | Total Funds | | Rank (%) | | Total Funds |
Growth Funds | | | | | | | | | | | | | | | | | | | | | | | | |
| |
| Janus Enterprise Fund | | Jan-02 | | Mid-Cap Growth Funds | | 27 | | 144 / 541 | | 23 | | 101 / 441 | | 88 | | 281 / 320 | | 61 | | 73 / 120 | | 16 | | 63 / 406 |
| |
| Janus Fund | | Dec-99 | | Large-Cap Growth Funds | | 47 | | 315 / 678 | | 56 | | 321 / 577 | | 66 | | 297 / 453 | | 40 | | 59 / 147 | | 62 | | 250 / 404 |
| |
| Janus Mercury Fund | | Feb-03 | | Large-Cap Growth Funds | | 19 | | 124 / 678 | | 12 | | 67 / 577 | | 73 | | 329 / 453 | | 11 | | 15 / 147 | | 13 | | 73 / 602 |
| |
| Janus Olympus Fund | | Aug-97 | | Multi-Cap Growth Funds | | 28 | | 114 / 414 | | 63 | | 225 / 358 | | 71 | | 180 / 255 | | — | | — | | 14 | | 18 / 134 |
| |
| Janus Orion Fund | | Jun-00 | | Multi-Cap Growth Funds | | 2 | | 6 / 414 | | 9 | | 29 / 358 | | 30 | | 75 / 255 | | — | | — | | 34 | | 79 / 236 |
| |
Janus Twenty Fund(1) | | Aug-97 | | Large-Cap Growth Funds | | 2 | | 11 / 678 | | 3 | | 14 / 577 | | 51 | | 228 / 453 | | 2 | | 2 / 147 | | 3 | | 7 / 234 |
| |
Janus Venture Fund(1) | | Jan-01 | | Small-Cap Growth Funds | | 35 | | 178 / 522 | | 19 | | 79 / 436 | | 59 | | 193 / 327 | | 43 | | 40 / 93 | | 27 | | 95 / 355 |
| |
Core Funds | | | | | | | | | | | | | | | | | | | | | | | | |
| |
| Janus Balanced Fund | | Apr-05 | | Balanced Funds | | 38 | | 236 / 629 | | 84 | | 386 / 461 | | 49 | | 177 / 366 | | 6 | | 10 / 169 | | ‡ | | |
| |
| Janus Core Equity Fund | | Apr-05 | | Large-Cap Core Funds | | 1 | | 7 / 881 | | 8 | | 58 / 765 | | 11 | | 64 / 603 | | — | | — | | ‡ | | |
| |
| Janus Growth and Income Fund | | Dec-03 | | Large-Cap Core Funds | | 1 | | 2 / 881 | | 12 | | 86 / 765 | | 39 | | 233 / 603 | | 2 | | 4 / 221 | | 2 | | 9 / 840 |
| |
| Janus Risk-Managed Stock Fund | | Feb-03 | | Multi-Cap Core Funds | | 17 | | 121 / 752 | | — | | — | | — | | — | | — | | — | | 20 | | 117 / 604 |
| |
| Janus Contrarian Fund | | Feb-00 | | Multi-Cap Core Funds | | 1 | | 3 / 752 | | 1 | | 2 / 567 | | 11 | | 40 / 396 | | — | | — | | 13 | | 44 / 338 |
| |
Income Funds | | | | | | | | | | | | | | | | | | | | | | | | |
| |
| Janus Federal Tax-Exempt Fund | | Feb-05 | | General Muni Debt Funds | | 66 | | 176 / 268 | | 88 | | 223 / 254 | | 78 | | 173 / 221 | | 70 | | 101 / 145 | | ‡ | | |
| |
| Janus Flexible Bond Fund | | Dec-91 | | Intermediate Inv Grade Debt Funds | | 60 | | 275 / 458 | | 37 | | 146 / 396 | | 41 | | 118 / 290 | | 10 | | 13 / 138 | | 4 | | 2 / 55 |
| |
| Janus High-Yield Fund | | Dec-03 | | High Current Yield Funds | | 61 | | 258 / 424 | | 93 | | 337 / 362 | | 49 | | 145 / 297 | | — | | — | | 50 | | 201 / 409 |
| |
| Janus Short-Term Bond Fund | | Jun-03 | | Short Investment Grade Debt Funds | | 71 | | 155 / 218 | | 15 | | 23 / 160 | | 49 | | 54 / 111 | | 20 | | 12 / 62 | | 19 | | 35 / 188 |
| |
International/Global Funds | | | | | | | | | | | | | | | | | | | | | | | | |
| |
| Janus Global Life Sciences Fund | | Dec-98 | | Health/Biotechnology Funds | | 24 | | 42 / 179 | | 46 | | 73 / 161 | | 65 | | 64 / 98 | | — | | — | | 33 | | 16 / 48 |
| |
| Janus Global Opportunities Fund | | Jun-01 | | Global Funds | | 91 | | 298 / 328 | | 65 | | 182 / 283 | | — | | — | | — | | — | | 15 | | 34 / 231 |
| |
| Janus Global Technology Fund | | Dec-98 | | Science & Technology Funds | | 29 | | 83 / 288 | | 91 | | 241 / 265 | | 54 | | 113 / 210 | | — | | — | | 22 | | 17 / 79 |
| |
| Janus Overseas Fund | | Jun-03 | | International Funds | | 1 | | 3 / 871 | | 14 | | 100 / 736 | | 68 | | 361 / 534 | | 4 | | 7 / 191 | | 5 | | 38 / 788 |
| |
| Janus Worldwide Fund | | Jun-04 | | Global Funds | | 88 | | 288 / 328 | | 98 | | 276 / 283 | | 95 | | 196 / 207 | | 52 | | 38 / 73 | | 87 | | 282 / 325 |
| |
Value Funds | | | | | | | | | | | | | | | | | | | | | | | | |
| |
Janus Mid Cap Value Fund — Inv(2) | | Aug-98 | | Mid-Cap Value Funds | | 64 | | 157 / 247 | | 35 | | 68 / 195 | | 11 | | 11 / 102 | | — | | — | | 4 | | 3 / 79 |
| |
Janus Small Cap Value Fund — Inv.(1,2) | | Feb-97 | | Small-Cap Core Funds | | 79 | | 477 / 604 | | 70 | | 340 / 488 | | 21 | | 69 / 341 | | — | | — | | 12 | | 17 / 153 |
| |
| | | | | | | | | | | | | | | | | | | | | |
| | | Percent of JIF Funds per Lipper Quartile based on Total Returns |
| | | 1-Year | | 3-Year | | 5-Year | | 10-Year | | Since PM Inception |
| |
| 1st Quartile | | | 39.1 | % | | | 45.5 | % | | | 19.0 | % | | | 58.3 | % | | | 70.0 | % |
| |
| 2nd Quartile | | | 26.1 | | | | 13.6 | | | | 28.6 | | | | 16.7 | | | | 20.0 | |
| |
| 3rd Quartile | | | 21.8 | | | | 18.2 | | | | 38.1 | | | | 25.0 | | | | 5.0 | |
| |
| 4th Quartile | | | 13.0 | | | | 22.7 | | | | 14.3 | | | | 0.0 | | | | 5.0 | |
| |
Janus Adviser Funds — I Shares
| | | | | | | | | | | | | | | | | | | | | | | | | |
Growth Funds | | | | | | | | | | | | | | | | | | | | | | | | |
| |
Janus Adviser Forty(3) | | Aug-97 | | Large-Cap Growth Funds | | 1 | | 2 / 678 | | 13 | | 72 / 577 | | 10 | | 41 / 453 | | — | | — | | 1 | | 1 / 234 |
| |
Lipper Inc. — A Reuters Company, is a nationally recognized organization that ranks the performance of mutual funds within a universe of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested.
| | |
| 1. | | Closed to new investors. |
| |
| 2. | | Ranking is for the investor share class only; other classes may have different performance characteristics. |
| |
| 3. | | Ranking is for I- share class only; other classes may have different performance characteristics. |
14
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 1-800-975-9932 or visit www.janus.com for performance current to the most recent month-end.
See notes to performance on the following page.
Janus Investment Fund (“JIF”)
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | Average Annual Total Returns (%) for Periods Ended 9/30/05(1) |
| | | Inception | | | | | | | | | | | | | | | | | | Life of |
| | | Date | | 1 Year | | 3 Year | | 5 Year | | 10 Year | | Fund |
Growth Funds | | | | | | | | | | | | | | | | | | | | | | | | |
| |
| Janus Fund | | | 2/70 | | | | 12.54 | | | | 12.83 | | | | (9.16 | ) | | | 7.09 | | | | 13.87 | |
| |
Janus Twenty Fund(2,3) | | | 4/85 | | | | 21.91 | | | | 20.03 | | | | (7.63 | ) | | | 11.26 | | | | 13.57 | |
| |
| Janus Mercury Fund | | | 5/93 | | | | 16.23 | | | | 16.75 | | | | (9.79 | ) | | | 9.07 | | | | 12.66 | |
| |
| Janus Olympus Fund | | | 12/95 | | | | 20.36 | | | | 16.47 | | | | (10.19 | ) | | | — | | | | 11.41 | |
| |
| Janus Enterprise Fund | | | 9/92 | | | | 23.57 | | | | 21.88 | | | | (12.29 | ) | | | 7.34 | | | | 11.25 | |
| |
Janus Venture Fund(2,4) | | | 4/85 | | | | 20.65 | | | | 24.74 | | | | (3.68 | ) | | | 8.50 | | | | 13.42 | |
| |
Janus Orion Fund(5) | | | 6/00 | | | | 29.33 | | | | 25.42 | | | | (3.48 | ) | | | — | | | | (3.95 | ) |
| |
Core Funds | | | | | | | | | | | | | | | | | | | | | | | | |
| |
| Janus Growth and Income Fund | | | 5/91 | | | | 24.40 | | | | 17.39 | | | | (1.77 | ) | | | 12.59 | | | | 13.71 | |
| |
| Janus Balanced Fund | | | 9/92 | | | | 10.62 | | | | 9.51 | | | | 2.16 | | | | 10.52 | | | | 11.24 | |
| |
Janus Contrarian Fund(5) | | | 2/00 | | | | 34.77 | | | | 29.88 | | | | 7.00 | | | | — | | | | 8.11 | |
| |
| Janus Core Equity Fund | | | 6/96 | | | | 23.78 | | | | 17.93 | | | | 1.39 | | | | — | | | | 13.00 | |
| |
Janus Risk-Managed Stock Fund(6,7) | | | 2/03 | | | | 18.48 | | | | — | | | | — | | | | — | | | | 22.11 | |
| |
International/Global Funds | | | | | | | | | | | | | | | | | | | | | | | | |
| |
Janus Worldwide Fund(6) | | | 5/91 | | | | 13.86 | | | | 11.50 | | | | (8.03 | ) | | | 7.70 | | | | 10.83 | |
| |
Janus Overseas Fund(5,6) | | | 5/94 | | | | 41.76 | | | | 27.09 | | | | (0.15 | ) | | | 12.39 | | | | 12.36 | |
| |
Janus Global Life Sciences Fund(3,6) | | | 12/98 | | | | 19.64 | | | | 15.83 | | | | (2.75 | ) | | | — | | | | 10.72 | |
| |
Janus Global Technology Fund(4,5,6,8) | | | 12/98 | | | | 21.23 | | | | 17.87 | | | | (17.96 | ) | | | — | | | | 2.09 | |
| |
Janus Global Opportunities Fund(6) | | | 6/01 | | | | 13.12 | | | | 18.55 | | | | — | | | | — | | | | 9.13 | |
| |
Value Funds | | | | | | | | | | | | | | | | | | | | | | | | |
| |
Janus Small Cap Value Fund — Inv.(2,9) | | | 10/87 | | | | 15.78 | | | | 21.65 | | | | 13.37 | | | | 15.78 | | | | 14.69 | |
| |
Janus Mid Cap Value Fund — Inv.(10) | | | 8/98 | | | | 18.72 | | | | 24.11 | | | | 15.51 | | | | — | | | | 18.21 | |
| |
Income Funds | | | | | | | | | | | | | | | | | | | | | | | | |
| |
Janus Flexible Income Fund(11,12,13) | | | 7/87 | | | | 2.26 | | | | 4.18 | | | | 6.22 | | | | 6.66 | | | | 7.74 | |
| |
Janus High-Yield Fund(6,11,12,13) | | | 12/95 | | | | 5.35 | | | | 10.14 | | | | 6.25 | | | | 8.24 | | | | 8.24 | |
| |
Janus Short-Term Bond Fund(11,12,14) | | | 9/92 | | | | 0.96 | | | | 2.81 | | | | 3.96 | | | | 5.02 | | | | 4.75 | |
| |
Janus Federal Tax-Exempt Fund(11,12,14,15) | | | 5/93 | | | | 2.97 | | | | 2.48 | | | | 4.86 | | | | 4.83 | | | | 4.67 | |
| |
Janus Adviser Funds — I Shares
| | | | | | | | | | | | | | | | | | | | | | | | | |
Growth Funds | | | | | | | | | | | | | | | | | | | | | | | | |
| |
Janus Adviser Forty(3,16) | | | 5/97 | | | | 26.52 | | | | 16.62 | | | | (2.64 | ) | | | — | | | | 13.31 | |
| |
15
Total return includes reinvestment of dividends and capital gains.
| | |
| (1) | | All figures unaudited. |
| |
| (2) | | Closed to new investors. |
| |
| (3) | | Returns have sustained significant gains and losses due to market volatility in the healthcare sector. |
| |
| (4) | | This Fund has been significantly impacted, either positively or negatively, by investing in initial public offerings (IPOs). |
| |
| (5) | | This Fund may have significant exposure to emerging markets which may lead to greater price volatility. |
| |
| (6) | | A 2% redemption fee may be imposed on shares held for 3 months or less. Performance shown does not reflect this redemption fee and, if reflected, performance would have been lower. |
| |
| (7) | | 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. |
| |
| (8) | | Returns have sustained significant gains due to market volatility in the information technology sector. |
| |
| (9) | | Returns shown for Janus Small Cap Value Fund prior to April 21, 2003 are those of Berger Small Cap Value Fund. |
| |
| (10) | | Returns shown for Janus Mid Cap Value Fund prior to April 21, 2003 are those of Berger Mid Cap Value Fund. |
| |
| (11) | | 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. |
| |
| (12) | | As of September 30, 2005, the 30-day SEC Yield was 3.83% on Janus Federal Tax-Exempt Fund, 3.93% on Janus Flexible Income Fund, 6.36% on Janus High-Yield Fund and 3.51% on Janus Short-Term Bond Fund. |
| |
| (13) | | 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. |
| |
| (14) | | 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 as of September 30, 2005 would have been 3.25% and 3.74%, respectively and total returns would have been lower. |
| |
| (15) | | 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. |
| |
| (16) | | Janus Adviser Forty commenced operations on 8/1/00, after the reorganization of the Retirement Shares of Janus Aspen Series into the Funds. The returns for the reorganized Funds reflect the performance of the Retirement Shares of Janus Aspen Series prior to the reorganization. |
Differences between compared investments may include objectives, sales and management fees, liquidity, volatility, tax features and other features, which may result in differences in 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.
16
