Janus Capital (JNS) 8-K Acquisition or disposition of assets

Exhibit 99.1

JANUS CAPITAL GROUP INC.

PRO FORMA CONSOLIDATED BALANCE SHEET (UNAUDITED)
AT SEPTEMBER 30, 2003
(Dollars in Millions)

						DST			Pro Forma
			Janus Capital			(Equity Method			Adjustments		Pro Forma
			Group Inc. *			Investment)			(Note 3)		Combined
ASSETS
Current assets:
	Cash and cash equivalents		$	123.1		$	—		$	999.0	$	1,122.1
	Accounts receivable			112.8			—			—		112.8
	Investments in advised funds			84.2			—			—		84.2
	Other current assets			39.8			—			—		39.8
	Assets of Nelson (discontinued operation)			41.9			—			—		41.9
		Total current assets		401.8			—			999.0		1,400.8
Investments and other assets				602.1			(524.1	)		279.1		357.1
Property and equipment				51.3			—			—		51.3
Intangibles, net				1,324.3			—			—		1,324.3
Goodwill				1,150.5			(143.2	)		115.0		1,122.3
Total assets			$	3,530.0		$	(667.3	)	$	1,393.1	$	4,255.8
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
	Accounts payable		$	6.9		$	—		$	—	$	6.9
	Accrued compensation and benefits			41.1			—			—		41.1
	Current portion of long-term debt			83.5			—			—		83.5
	Income taxes payable			10.0			—			—		10.0
	Other accrued liabilities			70.4			—			—		70.4
	Liabilities of Nelson (discontinued operation)			8.0			—			—		8.0
		Total current liabilities		219.9			—			—		219.9
Other liabilities:
	Long-term debt			769.9			—			—		769.9
	Deferred income taxes			737.3			(254.0	)		106.1		589.4
	Other liabilities			33.6			—			—		33.6
		Total liabilities		1,760.7			(254.0	)		106.1		1,612.8
Commitments and contingencies
Minority interest in consolidated subsidiaries				2.8			—			—		2.8
STOCKHOLDERS’ EQUITY
Preferred stock				—			—			—		—
Common stock				2.4			—			—		2.4
Additional paid-in capital				271.2			—			—		271.2
Retained earnings				1,630.0			(352.3	)		1,238.7		2,516.4
Unamortized restricted stock compensation				(202.1	)		—			—		(202.1	)
Accumulated other comprehensive income				65.0			(61.0	)		48.3		52.3
		Total stockholders’ equity		1,766.5			(413.3	)		1,287.0		2,640.2
			$	3,530.0		$	(667.3	)	$	1,393.1	$	4,255.8

* As reported in the September 30, 2003 10-Q filing.

The accompanying notes are an integral part of these pro forma consolidated financial statements.

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JANUS CAPITAL GROUP INC.

PRO FORMA STATEMENTS OF INCOME (UNAUDITED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003
(Dollars in Millions, Except Per Share Date)

							DST
				Janus Capital			(Equity Method			Pro Forma
				Group Inc. *			Investment)			Combined
Revenues:
	Investment management fees			$	578.1		$	—		$	578.1
	Shareowner servicing fees and other				155.2			—			155.2
			Total		733.3			—			733.3
Operating expenses:
	Employee compensation and benefits				174.3			—			174.3
	Restricted stock compensation				60.6			—			60.6
	Marketing and distribution				124.6			—			124.6
	Depreciation and amortization				51.3			—			51.3
	General, administrative and occupancy				90.2			—			90.2
	Severance, facility closing, and other costs				2.6			—			2.6
	Provision for mutual fund investigation				9.0			—			9.0
			Total		512.6			—			512.6
Operating income					220.7			—			220.7
Equity in earnings of unconsolidated affiliates					55.3			(53.5	)		1.8
Interest expense					(45.5	)		—			(45.5	)
Other, net					7.3			—			7.3
Income before taxes and minority interest					237.8			(53.5	)		184.3
Income tax provision					90.5			(20.4	)		70.1
Minority interest in consolidated earnings					2.7			—			2.7
Income from continuing operations				$	144.6		$	(33.1	)	$	111.5
Earnings per share from continuing operations:
		Basic		$	0.63		$	(0.14	)	$	0.49
		Diluted		$	0.63		$	(0.14	)	$	0.49
Weighted average common shares:
		Basic			227.3
		Diluted			229.2

* As reported in the September 30, 2003 10-Q filing.

The accompanying notes are an integral part of these pro forma consolidated financial statements.

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JANUS CAPITAL GROUP INC.

PRO FORMA STATEMENTS OF INCOME (UNAUDITED)
FOR THE YEAR ENDED DECEMBER 31, 2002
(Dollars in Millions, Except Per Share Date)

							DST
				Janus Capital			(Equity Method			Pro Forma
				Group Inc. *			Investment)			Combined
Revenues:
	Investment management fees			$	917.7		$	—		$	917.7
	Shareowner servicing fees and other				205.5			—			205.5
			Total		1,123.2			—			1,123.2
Operating Expenses:
	Employee compensation and benefits				241.6			—			241.6
	Restricted stock compensation				99.2			—			99.2
	Marketing and distribution				216.2			—			216.2
	Depreciation and amortization				71.0			—			71.0
	General, administrative and occupancy				126.8			—			126.8
	Severance, facility closing, and other costs				59.4			—			59.4
			Total		814.2			—			814.2
Operating Income					309.0			—			309.0
Equity in earnings of unconsolidated affiliates					69.1			(69.1	)		—
Interest expense					(57.5	)		—			(57.5	)
Other, net					8.7			—			8.7
Income before taxes and minority interest					329.3			(69.1	)		260.2
Income tax provision					231.8			(118.8	)		113.0
Minority interest in consolidated earnings					3.0			—			3.0
Income (loss) from continuing operations				$	94.5		$	49.7		$	144.2
Earnings (loss) per share from continuing operations:
		Basic		$	0.42		$	0.22		$	0.64
		Diluted		$	0.42		$	0.22		$	0.64
Weighted average common shares:
		Basic			222.4
		Diluted			224.2

* Historical amounts are based on the 2002 10-K, restated for the disposition of Nelson Money Manager as a discontinued operation.

The accompanying notes are an integral part of these pro forma consolidated financial statements.

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NOTES TO UNAUDITED PRO FORMA COMBINED
CONSOLIDATED FINANCIAL INFORMATION

Note 1 — Exchange Transaction

On December 1, 2003, Janus Capital Group Inc. (“Janus”) completed a transaction with DST Systems, Inc. (“DST”) to exchange 32.3 million common shares of DST for all of the outstanding stock of a DST subsidiary, referred to as JCG Partners. JCG Partners owns a commercial printing and graphics design business worth approximately $115.0 million and approximately $999.0 million in cash. The transaction was structured to qualify as a tax-free exchange under Section 355 of the Internal Revenue Code.

Prior to the completion of the transaction, Janus owned 39.7 million common shares of DST, which were accounted for using the equity method. After the transaction, Janus owns 7.4 million shares of DST, or approximately 9%, and will no longer account for its interest in DST as an equity method investment. As part of the transaction Janus gave DST proxy voting rights with respect to these remaining shares.

Note 2 — Basis of Presentation

The unaudited pro forma combined consolidated balance sheet at September 30, 2003 and the statements of income for the year ended December 31, 2002 and the nine month period ended September 30, 2003 (collectively “Financial Statements”) have been prepared based on actual historical results in accordance with accounting principles generally accepted in the United States of America. Janus and DST amounts presented are based on actual historical financial statements as if the disposition of Janus’ investment in DST occurred at the beginning of the period presented. The unaudited pro forma Financial Statements have been prepared consistent with the accounting policies described in Note 2 to the consolidated financial statements that are presented in Janus’ Annual Report on Form 10-K for the year ended December 31, 2002.

Note 3 — Pro Forma Adjustments — DST Disposition

The pro forma adjustments are necessary to account for the consideration received and record the fair value of the remaining 7.4 million DST common shares. The fair value of JCG Partners has been recorded as a component of goodwill as the financial statements of the company were not available at the time of this filing. The remaining investment in DST has been recorded in accordance with Statement of Financial Accounting Standards No. 115 “Accounting for Certain Investments in Debt and Equity Securities”, assuming the shares were classified as available-for-sale. The following is a summary of the DST investment at September 30, 2003 (in millions):

Cost basis	$	124.7
Gross unrealized gains		154.4
Total	$	279.1

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