EXHIBIT 99.1
[JANUS LOGO]
JANUS CONTACTS: January 30, 2003
Jane Ingalls, 303-394-7311
Shelley Peterson, 303-316-5625
JANUS CAPITAL GROUP ANNOUNCES FOURTH QUARTER
AND YEAR-END 2002 EARNINGS
NEW MANAGEMENT TEAM BROADENS PRODUCT LINEUP, CUTS FOURTH-QUARTER COSTS
TWO-THIRDS OF THE COMPANY'S MUTUAL FUND ASSETS RANKED IN
LIPPER'S FIRST OR SECOND QUARTILE FOR 2002
DENVER - Janus Capital Group Inc. (NYSE: JNS) today reported net income of $45.0
million, or $0.18 per diluted share, during the fourth quarter 2002 compared
with net income of $73.7 million, or $0.32 per diluted share, in the fourth
quarter 2001. For the full year 2002, Janus' net income was $84.7 million, or
$0.31 per diluted share, compared with $302.3 million, or $1.31 per diluted
share, for the same period in 2001.
The company's 2002 earnings reflect decreased average assets under management as
well as the effects of significant non-recurring items reported in the third
quarter 2002. (See the attached table.) Excluding these non-recurring items, net
income for 2002 totaled $244.0 million, or $1.02 per diluted share, compared
with $390.9 million, or $1.70 per diluted share in 2001.
Janus reported ongoing operating margins (excluding non-recurring items) of
31.0% in the fourth quarter 2002 and 32.2% for the full year 2002, compared with
38.9% in the fourth quarter 2001 and 39.4% for the full year 2001.
"Today's financial results reflect the challenging environment for
growth-oriented investment managers, but I'm confident that we're taking the
necessary steps to ensure that Janus is well positioned for future growth," said
Chief Executive Officer Mark Whiston. "Since we merged Janus and Stilwell, we've
made remarkable progress in a very short time."
Earlier this month, Janus introduced seven new value funds and risk-managed
equity products to complement its growth-oriented lineup.
"Broadening our product offerings is an important step toward improving our
top-line growth," Whiston said. "We're also focused on controlling costs to
manage our business as efficiently as possible."
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Janus expects to start realizing $40 million in annual merger-related cost
savings later this year.
Whiston said he's encouraged that 67% of the company's mutual fund assets were
ranked in Lipper's top two quartiles for the one-year period in 2002; that's up
from 40% for the same period in 2001. In addition, 49% of the company's mutual
funds that are eligible for Morningstar Ratings(TM) currently boast four- or
five-star overall ratings, as of December 31, 2002. *
"Nothing is more important to me than improving performance, and we saw signs
last year that the steps we're taking to that end are paying off," Whiston said.
"Our improved relative performance and the results from our more conservative
products were bright spots in 2002.
"Our focus in 2003 will be to continue improving performance, while leveraging
Janus' global distribution network and managing our expenses," Whiston said.
FOURTH QUARTER 2002 VS. FOURTH QUARTER 2001
Janus Capital Group ended the year reporting assets under management of $138
billion, compared with $140 billion as of September 30, 2002 and $193 billion as
of December 31, 2001. Assets under management include assets from Janus'
investment management subsidiaries: Janus Capital Management LLC; Berger
Financial Group LLC, which owns Enhanced Investment Technologies, LLC (INTECH)
and Bay Isle Financial LLC; and Nelson Money Managers plc. The total also
includes the small- and mid-cap value assets that Perkins, Wolf, McDonnell and
Company manages for Berger retail and institutional shareholders. The slight
decrease in assets during the quarter reflected market appreciation of $3
billion offset by net redemptions of $5 billion.
Average assets under management in the fourth quarter 2002 were $143 billion, a
23% decline from the same period in 2001. This lower level of average assets
under management caused the company's revenues to drop 26% - to $248.3 million -
from $334.1 million in the fourth quarter of 2001.
Ongoing operating expenses decreased 16% in the fourth quarter 2002, from $204.2
million in the fourth quarter 2001 (excluding $42.4 million of non-recurring
charges) to $171.3 million. This decrease is a result of the following key
items:
o Employee compensation in the fourth quarter was lower than the prior year's
fourth quarter, primarily due to a decline in both asset-based incentive
compensation as well as companywide incentive-based compensation. Janus
reversed a portion of its annual incentive bonus accrual, resulting in
approximately $6 million in pretax savings.
o Marketing and distribution costs declined in the fourth quarter 2002 due to
decreased assets under management distributed through the third party or
adviser-assisted segment, combined with lower marketing and promotion.
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o Depreciation and amortization decreased from the prior year due to lower
amortization associated with goodwill and intangible assets pursuant to the
new accounting guidelines set forth in Statement of Financial Accounting
Standards No. 142 "Goodwill and Intangible Assets" (FAS 142).
Offsetting these decreases, however, was an increase in restricted stock
compensation of $20.1 million, reflecting the 2002 equity grants.
Equity earnings from DST Systems, Inc. (DST) declined $2.4 million quarter over
quarter, from $17.4 million to $15.0 million.
Interest expense increased $3.7 million quarter over quarter, primarily as a
result of interest on Janus' various senior debt offerings.
FULL YEAR 2002 VS. FULL YEAR 2001
During the year ended December 31, 2002, assets under management decreased $54
billion - from $192 billion to $138 billion. This decline reflected market
depreciation of $42 billion, net outflows of $18 billion and increased assets of
$6 billion from Berger's acquisition of INTECH. Average assets under management
in 2002 declined 23% to $164 billion from $214 billion in 2001. These lower
average assets under management led to a 26% decrease in annual revenue - from
$1.5 billion to $1.1 billion.
Excluding non-recurring charges of $69.4 million in 2002 and $82.7 million in
2001, operating expenses decreased 18%, or $166.3 million - from $942.6 million
to $776.3 million. All significant cost components declined from the prior year
period, with the exception of restricted stock compensation, which increased
$60.8 million. This reflects the equity granted to Janus employees in April 2002
and the change to a five-year pro rata vesting for all equity that had been
granted to Janus employees (an approximate $26 million impact).
Equity earnings from DST declined to $69.1 million from $75.4 million in 2001.
Interest expense increased $23.0 million as a result of debt offerings in April
and November of 2001.
FOURTH-QUARTER AND 2002 YEAR-END EARNINGS CALL
Janus Capital Group will present its fourth quarter and 2002 year-end financial
results during a conference call January 30 at 11 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 on the Janus Capital Group Web site (www.janus.com) beginning January
30. For those unable to join the conference call at the scheduled time, a replay
will be available on www.janus.com.
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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, Berger Financial
Group LLC, Enhanced Investment Technologies, LLC (INTECH) and Bay Isle Financial
LLC. Janus Capital Group owns approximately 33% of DST Systems, Inc. (NYSE: DST)
and 81% of Nelson Money Managers plc. As previously announced, Janus Capital
Group has agreed to take a 30% ownership stake in Perkins, Wolf, McDonnell and
Company's investment advisory business.
###
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, 2001 on file with the Securities and Exchange Commission
(Commission file no. 001-15253). Janus will not update any forward-looking
statement made in this press release to reflect future events or developments.
Page 4
JANUS CAPITAL GROUP INC.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
(DOLLARS IN MILLIONS, EXCEPT
PER SHARE DATA)
<Table>
<Caption>
THREE MONTHS YEAR ENDED
ENDED DECEMBER 31, DECEMBER 31,
-------------------------- ---------------------------
2002 2001 2002 2001
---------- ---------- ---------- ----------
REVENUES:
Investment management fees $ 200.2 $ 273.2 $ 939.3 $ 1,275.2
Shareowner servicing fees 34.7 45.0 149.8 216.6
Other 13.4 15.9 55.7 63.9
---------- ---------- ---------- ----------
Total 248.3 334.1 1,144.8 1,555.7
---------- ---------- ---------- ----------
OPERATING EXPENSES:
Employee compensation and benefits 48.7 60.8 253.5 294.3
Restricted stock compensation 24.5 4.4 99.2 38.4
Marketing and distribution 44.8 67.5 217.7 321.0
Depreciation and amortization 18.2 38.6 72.3 130.6
General, administrative and occupancy 35.1 32.9 133.6 158.3
Severance, facility closing and other costs -- 42.4 69.4 82.7
---------- ---------- ---------- ----------
Total 171.3 246.6 845.7 1,025.3
---------- ---------- ---------- ----------
OPERATING INCOME 77.0 87.5 299.1 530.4
Equity in earnings of unconsolidated affiliates 15.0 17.4 69.1 75.4
Interest expense (16.7) (13.0) (57.8) (34.8)
Gain on sale of DST common stock -- 28.8 -- 28.8
Other, net 1.7 2.1 9.1 20.2
---------- ---------- ---------- ----------
Income before taxes and minority interest 77.0 122.8 319.5 620.0
Income tax provision 30.4 47.0 231.8 217.7
Minority interest in consolidated earnings 1.6 2.1 3.0 100.0
---------- ---------- ---------- ----------
NET INCOME $ 45.0 $ 73.7 $ 84.7 $ 302.3
========== ========== ========== ==========
PER SHARE DATA:
Weighted average Common shares outstanding (in
thousands) 222,491 221,511 222,380 220,154
---------- ---------- ---------- ----------
BASIC Earnings (Loss) per share $ 0.20 $ 0.33 $ 0.38 $ 1.37
========== ========== ========== ==========
Weighted average Diluted Common shares outstanding
(in thousands) 223,822 223,812 224,148 224,424
---------- ---------- ---------- ----------
DILUTED Earnings (Loss) per share $ 0.18 $ 0.32 $ 0.31 $ 1.31
========== ========== ========== ==========
</Table>
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JANUS CAPITAL GROUP INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(DOLLARS IN MILLIONS)
<Table>
<Caption>
DECEMBER 31,
2002 2001
-------- --------
ASSETS
Cash and cash equivalents $ 160.6 $ 236.7
Other current assets 185.0 241.4
Investments held for operating purposes 481.0 508.7
Property and equipment, net 71.5 92.9
Intangibles, goodwill and other, net 2,423.6 2,312.2
-------- --------
TOTAL ASSETS $3,321.7 $3,391.9
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Long-term debt $ 856.0 $1,094.2
Other liabilities 225.1 230.9
Deferred income taxes 729.1 680.3
Minority interest in consolidated subsidiaries 3.5 23.3
Stockholders' equity 1,508.0 1,363.2
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $3,321.7 $3,391.9
======== ========
</Table>
UNAUDITED CONDENSED CONSOLIDATED CASH FLOW INFORMATION
(DOLLARS IN MILLIONS)
<Table>
<Caption>
YEAR ENDED DECEMBER 31,
2002 2001
---------- ----------
Cash provided by operating activities $ 283.0 $ 501.2
Cash used in investing activities (70.1) (1,616.2)
Cash provided by (used in) financing activities (289.0) 987.4
---------- ----------
NET DECREASE DURING THE YEAR $ (76.1) $ (127.6)
========== ==========
</Table>
AVERAGE MANAGED ASSETS BY DISTRIBUTION SEGMENT
(DOLLARS IN BILLIONS)
<Table>
<Caption>
THREE MONTHS ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
2002 2001 2002 2001
-------- -------- -------- --------
TPA/Adviser-assisted $ 75.5 $ 97.6 $ 85.5 $ 108.0
Direct no-load 36.0 54.7 44.0 64.5
Offshore/International 5.8 5.6 5.8 5.9
Private/Subadvised 25.9 28.4 29.2 35.7
-------- -------- -------- --------
Total average assets $ 143.2 $ 186.3 $ 164.5 $ 214.1
======== ======== ======== ========
</Table>
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ASSET FLOWS BY INVESTMENT DISCIPLINE
(DOLLARS IN BILLIONS)
<Table>
<Caption>
THREE MONTHS ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
2002 2001 2002 2001
-------- -------- -------- --------
Growth Equity
Beginning of period assets $ 93.8 $ 134.6 $ 150.3 $ 226.1
Acquisitions -- -- -- --
Sales 7.7 10.8 35.5 46.2
Redemptions (14.1) (12.9) (57.6) (61.1)
-------- -------- -------- --------
Net sales (redemptions) (6.4) (2.1) (22.1) (14.9)
Market appreciation (depreciation) 2.6 17.8 (38.2) (60.9)
-------- -------- -------- --------
End of period assets $ 90.0 $ 150.3 $ 90.0 $ 150.3
======== ======== ======== ========
Mathematical / Quantitative
Beginning of period assets $ 5.8 $ -- $ -- $ --
Acquisitions -- -- 6.0 --
Sales 1.3 -- 2.7 --
Redemptions (0.1) -- (0.3) --
-------- -------- -------- --------
Net sales (redemptions) 1.2 -- 2.4 --
Market appreciation (depreciation) 0.3 -- (1.1) --
-------- -------- -------- --------
End of period assets $ 7.3 $ -- $ 7.3 $ --
======== ======== ======== ========
Fixed Income
Beginning of period assets $ 4.8 $ 3.1 $ 3.5 $ 2.1
Acquisitions -- -- -- --
Sales 1.3 0.8 4.1 2.7
Redemptions (0.8) (0.5) (2.3) (1.4)
-------- -------- -------- --------
Net sales (redemptions) 0.5 0.3 1.8 1.3
Market appreciation (depreciation) 0.2 0.1 0.2 0.1
-------- -------- -------- --------
End of period assets $ 5.5 $ 3.5 $ 5.5 $ 3.5
======== ======== ======== ========
Core / Blend
Beginning of period assets $ 9.7 $ 9.6 $ 10.5 $ 10.3
Acquisitions -- -- -- --
Sales 0.6 1.0 3.2 3.5
Redemptions (0.6) (0.6) (2.9) (2.6)
-------- -------- -------- --------
Net sales (redemptions) -- 0.4 0.3 0.9
Market appreciation (depreciation) 0.2 0.5 (0.9) (0.7)
-------- -------- -------- --------
End of period assets $ 9.9 $ 10.5 $ 9.9 $ 10.5
======== ======== ======== ========
Value
Beginning of period assets $ 7.7 $ 6.5 $ 9.1 $ 7.2
Acquisitions -- 1.1 -- 1.1
Sales 0.8 0.7 5.0 3.5
Redemptions (0.6) (0.6) (3.4) (2.7)
-------- -------- -------- --------
Net sales (redemptions) 0.2 0.1 1.6 0.8
Market appreciation (depreciation) 0.3 1.4 (2.5) --
-------- -------- -------- --------
End of period assets $ 8.2 $ 9.1 $ 8.2 $ 9.1
======== ======== ======== ========
Money Market
Beginning of period assets $ 18.0 $ 17.4 $ 19.1 $ 12.4
Acquisitions -- -- -- --
Sales 60.2 73.9 315.9 170.9
Redemptions (60.7) (72.2) (318.1) (164.5)
-------- -------- -------- --------
Net sales (redemptions) (0.5) 1.7 (2.2) 6.4
Market appreciation (depreciation) -- -- 0.6 0.3
-------- -------- -------- --------
End of period assets $ 17.5 $ 19.1 $ 17.5 $ 19.1
======== ======== ======== ========
Complex-Wide
Beginning of period assets $ 139.8 $ 171.2 $ 192.5 $ 258.1
Acquisitions -- 1.1 6.0 1.1
Sales 71.9 87.2 366.4 226.8
Redemptions (76.9) (86.8) (384.6) (232.3)
-------- -------- -------- --------
Net sales (redemptions) (5.0) 0.4 (18.2) (5.5)
Market appreciation (depreciation) 3.6 19.8 (41.9) (61.2)
-------- -------- -------- --------
End of period assets $ 138.4 $ 192.5 $ 138.4 $ 192.5
======== ======== ======== ========
</Table>
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NET INCOME AND DILUTED EARNINGS PER SHARE, EXCLUDING NON-RECURRING ITEMS
($ IN MILLIONS, EXCEPT PER SHARE DATA)
<Table>
<Caption>
Fourth Quarter Year Ended
2002 2001 2002 2001
---------- ---------- ---------- ----------
REPORTED NET INCOME (GAAP BASIS) $ 45.0 $ 73.7 $ 84.7 $ 302.3
Facility closures and other reorganization charges (1) -- 16.3 33.1 38.3
Deferred income taxes for DST investment (2) -- -- 107.8 --
Investment impairments (3) -- -- 18.4 --
DST net gains on non-recurring items (4) -- (0.5) -- (8.2)
Gain on sale of DST common stock (5) -- (15.9) -- (15.9)
Janus shareowner proxy costs (6) -- 10.4 -- 10.4
Charge in connection with purchase of Janus shares (7) -- -- -- 64.0
---------- ---------- ---------- ----------
NET INCOME, EXCLUDING NON-RECURRING ITEMS $ 45.0 $ 84.0 $ 244.0 $ 390.9
---------- ---------- ---------- ----------
Dilutive securities at subsidiaries and affiliates (4.0) (1.3) (16.0) (8.8)
---------- ---------- ---------- ----------
NET INCOME FOR DILUTIVE COMPUTATION, EXCLUDING
NON-RECURRING ITEMS $ 41.0 $ 82.7 $ 228.0 $ 382.1
========== ========== ========== ==========
Weighted average Diluted Common shares outstanding
(in thousands) 223,822 223,812 224,148 224,424
---------- ---------- ---------- ----------
DILUTED EARNINGS PER SHARE, EXCLUDING NON-
RECURRING ITEMS $ 0.18 $ 0.37 $ 1.02 $ 1.70
========== ========== ========== ==========
ONGOING OPERATING MARGINS 31.0% 38.9% 32.9% 39.4%
========== ========== ========== ==========
</Table>
FOOTNOTES FOR THE TABLE SHOWING NON-RECURRING ITEMS
(1) Facility closures and other reorganization charges - In 2001, Janus
recorded approximately $48.5 million ($38.3 million, after-tax) in
severance, facility closing and related costs. In 2002, Janus announced
that operations would be merged into a unified organization. The new
organization was created by merging Janus Capital Corporation into Stilwell
Financial Inc., its former parent company. In connection with this
reorganization, the company recorded approximately $46.1 million ($28.7
million, after-tax) in charges associated with severance, facility closing
and other costs. In addition, with the formation of Janus Capital
Management LLC in 2002 $4.4 million (after-tax) of legal, accounting and
other professional expenses were recorded.
(2) Deferred income taxes for DST investment - In the third quarter of 2002,
Janus announced the decision to consider strategic alternatives for the
disposition of its investment in DST Systems, Inc. (NYSE: DST). The company
historically provided deferred income taxes on its proportionate share of
DST earnings utilizing the dividends received deduction, which excluded 80%
of its DST earnings from taxation. Because transactions are being
considered that could result in the Janus' investment in DST being taxable
at the full federal and applicable state tax, a non-cash charge of $107.8
million was recorded to deferred income taxes.
(3) Investment impairments - Janus recorded approximately $23.3 million ($18.4
million, after-tax) in impairments associated with investments in Nelson
Money Managers Plc, Village Ventures, Inc. and other. The impairments
reflect management's determination that the realization of the investments
in the current circumstances was lower than the carrying amounts.
(4) DST net gains on non-recurring items - Janus recorded $8.9 million ($8.2
million after-tax) in equity earnings of DST representing Janus'
proportionate share of DST non-recurring gains in connection with the sale
of DST's portfolio accounting business and sales of marketable securities
during second quarter 2001.
(5) Gain on sale of DST common stock - Janus recorded a one-time gain of $28.8
million ($15.9 million, after-tax) from the disposition of 839,000 shares
of DST common stock.
(6) Shareowner proxy costs for the Janus group of funds - Costs were incurred
($10.4 million, after-tax) to conduct a proxy vote for each of the Janus
funds to obtain, among other things, shareholder approval of new advisory
agreements with Janus, the terms of which were in all material respects the
same as the then current advisory agreements with Janus. See additional
information in the company's Form 10-Q for the three months ended September
30, 2001.
(7) Charge in connection with purchase of Janus shares - Janus recorded a
one-time non-cash increase to minority interest of approximately $64
million in connection with its commitment to purchase 609,950 shares of
Janus Capital Corporation common stock. The contractual price paid was
computed using the results from Janus' record year in 2000. Based on the
decline in Janus' earnings from 2000, accounting guidelines require an
evaluation of whether the contractual price of the purchase commitment
exceeded current market value. After consultation with third party
valuation professionals, Janus recorded this charge as an increase to
minority interest at September 30, 2001.
Page 8
INVESTMENT PERFORMANCE FOOTNOTES
* Lipper performance percentages include funds with a minimum track record of
one year. Funds included are 22 Janus Investment funds, 11 Janus Adviser funds,
12 Janus Aspen funds, and 2 Berger Value funds. Excludes multiple share classes,
sub-advised funds, money markets, and all other Berger funds. Funds are ranked
within their corresponding Lipper classification for the specified time period.
Percent of assets is calculated by totaling each fund's assets by the
corresponding quartile and dividing by the total assets of funds represented as
of December 31, 2002. Funds assets for the first quartile are $24.1 billion,
funds assets for the second quartile are $33.3 billion, funds assets for the
third quartile are $3.3 billion, funds assets for the fourth quartile are $25.1
billion and funds total assets are $85.9 billion.
In connection with the reorganization of Berger Financial Group LLC, the adviser
to the Berger Value Funds, into Janus Capital Group Inc., the Independent
Trustees of the Berger Value Funds approved appointment of Janus Capital
Management LLC as investment adviser to the Berger Value Funds and the
reorganization of these funds into the Janus fund family, pending shareholder
approval in March 2003. Until such shareholder vote, Janus Distributors LLC is
providing this material to you pursuant to their marketing agreement with Berger
Distributors LLC.
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 and are based on total
return with capital gains and dividends reinvested. Some funds may have
experienced poor or negative short-term performance.
Lipper Rankings as of 12/31/02
JANUS INVESTMENT FUND
<Table>
<Caption>
Lipper Category 1-Year Ranking 5-Year Ranking 10-Yr Ranking
Domestic Equity Funds
Janus Fund(1) LargeCap Growth Funds 233/661 94/315 28/92
Janus Fund 2**(1) MultiCap Growth Funds 257/401 -- --
Janus Core Equity Fund LargeCap Core Funds 83/933 5/489 --
Janus Enterprise Fund MultiCap Growth Funds 179/401 90/165 30/50
Janus Mercury Fund LargeCap Growth Funds 330/661 8/315 --
Janus Olympus Fund LargeCap Growth Funds 267/661 6/315 --
Janus Orion Fund MultiCap Core Funds 213/401 -- --
Janus Special Situations Fund**(2) MultiCap Core Funds 418/470 106/187 --
Janus Strategic Value Fund(2) MultiCap Value Funds 380/476 -- --
Janus Twenty Fund** LargeCap Growth Funds 97/661 30/315 12/92
Janus Venture Fund** SmallCap Growth Funds 155/441 57/218 21/48
International/Global Equity Funds
Janus Global Life Sciences Fund Health/Biotechnology Funds 114/186 -- --
Janus Global Technology Fund Science & Technology Funds 132/370 -- --
Janus Global Value Fund Global Funds 62/309 -- --
Janus Overseas Fund** International Funds 736/808 78/435 --
Janus Worldwide Fund Global Funds 256/309 65/153 7/28
Combination Funds
Janus Balanced Fund Balanced Funds 35/506 6/328 3/86
Janus Growth and Income Fund LargeCap Core Funds 241/933 19/489 5/154
Income Funds
Janus Federal Tax-Exempt Fund General Muni Debt Funds 74/287 124/204 --
Janus Flexible Income Fund General Bond Funds 2/37 5/21 1/6
Janus High-Yield Fund High Current Yield Funds 49/380 8/188 --
Janus Short-Term Bond Fund Short Investment-Grade 91/123 54/91 18/33
Debt Funds
</Table>
Lipper Rankings as of 12/31/02
JANUS ASPEN SERIES - INSTITUTIONAL SHARES
<Table>
<Caption>
Lipper Category 1-Year Ranking 5-Year Ranking
Domestic Equity Funds
Aggressive Growth Portfolio VA MultiCap Growth Funds 31/83 19/38
Capital Appreciation Portfolio VA LargeCap Growth Funds 3/135 1/64
Core Equity Portfolio VA LargeCap Core Funds 18/197 1/99
Growth Portfolio VA LargeCap Growth Funds 30/135 27/64
Strategic Value Portfolio VA MultiCap Growth Funds 78/91 --
International/Global Equity Funds
Global Life Sciences Portfolio VA Specialty/Misc. 50/116 --
Global Technology Portfolio VA Specialty/Misc. 82/116 --
International Growth Portfolio VA International Funds 157/169 18/98
Worldwide Growth Portfolio VA Global Funds 66/71 13/33
Combination Funds
Balanced Portfolio VA Balanced Funds 13/70 1/47
Growth and Income Portfolio VA LargeCap Growth Funds 54/197 --
Income Fund
Flexible Income Portfolio VA General Bond Funds 6/40 3/24
</Table>
Page 9
Lipper Rankings as of 12/31/02
JANUS ADVISER SERIES - I SHARES
<Table>
<Caption>
Lipper Category 1-Year Ranking 5-Year Ranking
Domestic Equity Funds
Aggressive Growth Fund MultiCap Growth Funds 165/401 91/165
Capital Appreciation Fund LargeCap Growth Funds 7/661 2/315
Core Equity Fund LargeCap Core Funds 77/933 2/489
Growth Fund LargeCap Growth Funds 191/661 70/315
Strategic Value Fund Mid-Cap Core Funds 233/274 --
International/Global Equity Funds
International Value Fund(3) Global Funds 90/309 --
International Fund International Funds 760/808 64/435
Worldwide Fund Global Funds 255/309 35/153
Combination Funds
Balanced Fund Balanced Funds 36/506 3/328
Growth and Income Fund LargeCap Core Funds 134/933 --
Income Funds
Flexible Income Fund General Bond Funds 6/37 2/21
</Table>
Lipper Rankings as of 12/31/02
BERGER FUNDS - INVESTOR SHARES
<Table>
<Caption>
Lipper Category 1-Year Ranking 5-Year Ranking
Domestic Equity Funds
Berger Mid Cap Value Fund Mid-Cap Value Funds 111/208 --
Berger Small Cap Value Fund Small-Cap Value Funds 192/246 6/109
</Table>
** Closed to new investors.
(1) On February 28, 2003, Janus Fund 2 will merge into Janus Fund.
(2) On February 28, 2003, Janus Special Situations Fund will merge into Janus
Strategic Value Fund and the fund name will change to Janus Special Equity Fund.
(3) On 12/31/02, Janus Adviser Global Value Fund changed its name to Janus
Adviser International Value Fund.
For each fund with at least a three-year history, Morningstar calculates a
Morningstar Rating(TM) based on a Morningstar Risk-Adjusted Return measure that
accounts for variation in a fund's monthly performance (including the effects of
sales charges, loads, and redemption fees), placing more emphasis on downward
variations and rewarding consistent performance. The top 10% of the funds in
each category receive 5 stars, the next 22.5% receive 4 stars, the next 35%
receive 3 stars, the next 22.5% receive 2 stars and the bottom 10% receive 1
star. (Each share class is counted as a fraction of one fund within the scale
and rated separately, which may cause slight variations in the distribution
percentages.) The Overall Morningstar Rating(TM) for a fund is derived from a
weighted average of the performance figures associated with its three-, five-
and ten-year (if applicable) Morningstar Rating(TM) metrics.
Ratings are for Janus Investment Fund as of December 31, 2002. Janus Fund was
rated against the following numbers of U.S.-domiciled Large Growth funds over
the following time periods: 802 funds in the last three years, 545 funds in the
last five years and 167 funds in the last ten years. With respect to these Large
Growth funds, Janus Fund received a Morningstar Rating(TM) of 3 stars for the
three-, five- and ten-year periods. Janus Core Equity Fund was rated against the
following numbers of U.S.-domiciled Large Blend funds over the following time
periods: 986 funds in the last three years and 667 funds in the last five years.
With respect to these Large Blend funds, Janus Core Equity Fund received a
Morningstar Rating(TM) of 4 stars and 5 stars for the three- and five-year
periods, respectively. Janus Enterprise Fund was rated against the following
numbers of U.S.-domiciled Mid-Cap Growth funds over the following time periods:
501 funds in the last three years, 342 funds in the last five years and 91 funds
in the last ten years. With respect to these Mid-Cap Growth funds, Janus
Enterprise Fund received a Morningstar Rating(TM) of 2 stars for the three-,
five- and ten-year periods. Janus Mercury Fund was rated against the following
numbers of U.S.-domiciled Large Growth funds over the following time periods:
802 funds in the last three years and 545 funds in the last five years. With
respect to these Large Growth funds, Janus Mercury Fund received a Morningstar
Rating(TM) of 2 stars and 4 stars for the three- and five-year periods,
respectively. Janus Olympus Fund was rated against the following numbers of
U.S.-domiciled Large Growth funds over the following time periods: 802 funds in
the last three years and 545 funds in the last five years. With respect to these
Large Growth funds, Janus Olympus Fund received a Morningstar Rating(TM) of 2
stars and 4 stars for the three- and five-year periods, respectively. Janus
Special Situations Fund was rated against the following numbers of
U.S.-domiciled Mid-Cap Blend funds over the following time periods: 167 funds in
the last three years and 105 funds in the last five years. With respect to these
Mid-Cap Blend funds, Janus Special Situations Fund received a Morningstar
Rating(TM) of 1 star for the three- and five-year periods. Janus Twenty Fund was
rated against the following numbers of U.S.-domiciled Large Growth funds over
the following time periods: 802 funds in the last three years, 545 funds in the
last five years and 167 funds in the last ten years. With respect to these Large
Growth funds, Janus Twenty Fund received a Morningstar Rating(TM) of 2 stars, 3
stars and 3 stars for the three-, five- and ten-year periods, respectively.
Janus Venture Fund was rated against the following numbers of U.S.-domiciled
Small Growth funds over the following time periods: 433 funds in the last three
years, 295 funds in the last five years and 65 funds in the last ten years. With
respect to these Small Growth funds, Janus Venture Fund received a Morningstar
Rating(TM) of 1 star, 2 stars and 2 stars for the three-, five- and ten-year
periods, respectively. Janus Global Life Sciences Fund was rated against the
following number of U.S.-domiciled Specialty-Health funds over the following
time period: 75 funds in the last three years. With respect to these
Specialty-Health funds, Janus Global Life Sciences Fund received a Morningstar
Rating(TM) of 2 stars for the three-year period. Janus Global Technology Fund
was rated against the following number of U.S.-domiciled Specialty-Technology
funds over the following time period: 154 funds in the last three years. With
respect to these Specialty-Technology funds, Janus Global Technology Fund
received a Morningstar Rating(TM) of 4 stars for the three-year period. Janus
Overseas Fund was rated against the following numbers of U.S.-domiciled Foreign
Stock funds over the following time periods: 664 funds in the last three years
and 491 funds in the last five years. With respect to these Foreign Stock funds,
Janus Overseas Fund received a Morningstar Rating(TM) of 2 stars and 3 stars for
the three- and five-year periods, respectively. Janus Worldwide Fund was rated
against the following numbers of U.S.-domiciled World Stock funds over the
following time periods: 255 funds in the last three years, 191 funds in the last
five years and 39 funds in the last ten years. With respect to these World Stock
funds, Janus Worldwide Fund received a Morningstar Rating(TM) of 2 stars, 3
stars and 4 stars for the three-, five- and ten-year periods, respectively.
Janus Balanced Fund was rated against the following numbers of U.S.-domiciled
Domestic Hybrid funds over the following time periods: 721 funds in the last
three years, 551 funds in the last five years and 139 funds in the last ten
years. With respect to these Domestic Hybrid funds, Janus Balanced Fund received
a Morningstar Rating(TM) of 3 stars, 5 stars and 5 stars for the three-,
five-year and ten-year periods, respectively. Janus Growth and Income Fund was
rated against the following numbers of U.S.-domiciled Large Growth funds over
the following time periods: 802 funds in the last three years, 545 funds in the
last five years and 167 funds in the last ten years. With respect to these Large
Growth funds, Janus Growth and Income Fund received a Morningstar Rating(TM) of
4 stars, 5 stars and 5 stars for the three-, five- and ten-year periods,
respectively. Janus Federal Tax-Exempt Fund was rated against the following
numbers of U.S.-domiciled Muni National Long funds over the following time
periods: 305 funds in the last three years and 255 funds in the last five years.
With respect to these Muni National Long funds, Janus Federal Tax-Exempt Fund
received a Morningstar Rating(TM) of 3 stars for the three- and five-year
periods. Janus Flexible Income Fund was rated against the following numbers of
U.S.-domiciled Multisector Bond funds over the following time periods: 159 funds
in the last three years, 117 funds in the last five years and 34 funds in the
last ten years. With respect to these Multisector Bond funds, Janus Flexible
Income Fund
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received a Morningstar Rating(TM) of 4 stars, 4 stars and 5 stars for the
three-, five- and ten-year periods, respectively. Janus High-Yield Fund was
rated against the following numbers of U.S.-domiciled High-Yield Bond funds over
the following time periods: 292 funds in the last three years and 188 funds in
the last five years. With respect to these High-Yield Bond funds, Janus
High-Yield Fund received a Morningstar Rating(TM) of 5 stars for the three- and
five-year periods. Janus Short-Term Bond Fund was rated against the following
numbers of U.S.-domiciled Short-Term Bond funds over the following time periods:
192 funds in the last three years, 160 funds in the last five years and 65 funds
in the last ten years. With respect to these Short-Term Bond funds, Janus
Short-Term Bond Fund received a Morningstar Rating(TM) of 2 stars, 3 stars and 3
stars for the three-, five- and ten-year periods, respectively.
Ratings are for Janus Aspen Series Institutional share class as of December 31,
2002. Janus Aspen Aggressive Growth Portfolio was rated against the following
numbers of U.S.-domiciled Mid-Cap Growth funds over the following time periods:
501 funds in the last three years and 342 funds in the last five years. With
respect to these Mid-Cap Growth funds, Janus Aspen Aggressive Growth Portfolio
received a Morningstar Rating(TM) of 2 stars for the three- and five-year
periods. Janus Aspen Capital Appreciation Portfolio was rated against the
following numbers of U.S.-domiciled Large Growth funds over the following time
periods: 802 funds in the last three years and 545 funds in the last five years.
With respect to these Large Growth funds, Janus Aspen Capital Appreciation
Portfolio received a Morningstar Rating(TM) of 4 stars and 5 stars for the
three- and five-year periods, respectively. Janus Aspen Core Equity Portfolio
was rated against the following numbers of U.S.-domiciled Large Blend funds over
the following time periods: 986 funds in the last three years and 667 funds in
the last five years. With respect to these Large Blend funds, Janus Aspen Core
Equity Portfolio received a Morningstar Rating(TM) of 4 stars and 5 stars for
the three- and five-year periods, respectively. Janus Aspen Growth Portfolio was
rated against the following numbers of U.S.-domiciled Large Growth funds over
the following time periods: 802 funds in the last three years and 545 funds in
the last five years. With respect to these Large Growth funds, Janus Aspen
Growth Portfolio received a Morningstar Rating(TM) of 3 stars for the three- and
five-year periods. Janus Aspen International Growth Portfolio was rated against
the following numbers of U.S.-domiciled Foreign Stock funds over the following
time periods: 664 funds in the last three years and 491 funds in the last five
years. With respect to these Foreign Stock funds, Janus Aspen International
Growth Portfolio received a Morningstar Rating(TM) of 2 stars and 3 stars for
the three- and five-year periods, respectively. Janus Aspen Worldwide Growth
Portfolio was rated against the following numbers of U.S.-domiciled World Stock
funds over the following time periods: 255 funds in the last three years and 191
funds in the last five years. With respect to these World Stock funds, Janus
Aspen Worldwide Growth Portfolio received a Morningstar Rating(TM) of 2 stars
and 3 stars for the three- and five-year periods, respectively. Janus Aspen
Balanced Portfolio was rated against the following numbers of U.S.-domiciled
Domestic Hybrid funds over the following time periods: 721 funds in the last
three years and 551 funds in the last five years. With respect to these Domestic
Hybrid funds, Janus Aspen Balanced Portfolio received a Morningstar Rating(TM)
of 3 stars and 5 stars for the three- and five-year periods, respectively. Janus
Aspen Growth and Income Portfolio was rated against the following number of
U.S.-domiciled Large Growth funds over the following time period: 802 funds the
last three years. With respect to these Large Growth funds, Janus Aspen Growth
and Income Portfolio received a Morningstar Rating(TM) of 4 stars for the
three-year period. Janus Aspen Flexible Income Portfolio was rated against the
following numbers of U.S.-domiciled Multisector Bond funds over the following
time periods: 159 funds in the last three years and 117 funds in the last five
years. With respect to these Multisector Bond funds, Janus Aspen Flexible Income
Portfolio received a Morningstar Rating(TM) of 5 stars for the three- and
five-year periods. Ratings are for the Institutional share class only; other
classes may have different performance characteristics.
Ratings are for Janus Adviser Series Class I shares as of December 31, 2002.
Janus Adviser Aggressive Growth Fund was rated against the following numbers of
U.S.-domiciled Mid-Cap Growth funds over the following time periods: 501 funds
in the last three years and 342 funds in the last five years. With respect to
these Mid-Cap Growth funds, Janus Adviser Aggressive Growth Fund received a
Morningstar Rating(TM) of 2 stars for the three and five-year periods. Janus
Adviser Capital Appreciation Fund was rated against the following number of
U.S.-domiciled Large Growth funds over the following time periods: 802 funds in
the last three years and 545 funds in the last five years. With respect to these
Large Growth funds, Janus Adviser Capital Appreciation Fund received a
Morningstar Rating(TM) of 4 and 5 stars for the three- and five-year periods,
respectively. Janus Adviser Core Equity Fund was rated against the following
numbers of U.S.-domiciled Large Blend funds over the following time periods: 986
funds in the last three years and 667 funds in the last five years. With respect
to these Large Blend funds, Janus Adviser Core Equity Fund received a
Morningstar Rating(TM) of 4 stars and 5 stars for the three- and five-year
periods, respectively. Janus Adviser Growth Fund was rated against the following
numbers of U.S.-domiciled Large Growth funds over the following time periods:
802 funds in the last three years and 545 funds in the past five years. With
respect to these Large Growth funds, Janus Adviser Growth Fund received a
Morningstar Rating(TM) of 3 stars and 4 stars for the three- and five-year
periods, respectively. Janus Adviser International Fund was rated against the
following numbers of U.S.-domiciled Foreign Stock funds over the following time
periods: 664 funds in the last three years and 491 funds in the last five years.
With respect to these Foreign Stock funds, Janus Adviser International Fund
received a Morningstar Rating(TM) of 2 stars and 4 stars for the three and
five-year periods, respectively. Janus Adviser Worldwide Fund was rated against
the following numbers of U.S.-domiciled World Stock funds over the following
time periods: 255 funds in the last three years and 191 funds in the last five
years. With respect to these World Stock funds, Janus Adviser Worldwide Fund
received a Morningstar Rating(TM) of 2 stars and 3 stars for the three and
five-year periods, respectively. Janus Adviser Balanced Fund was rated against
the following numbers of U.S.-domiciled Domestic Hybrid funds over the following
time periods: 721 funds in the last three years and 551 funds in the last five
years. With respect to these Domestic Hybrid funds, Janus Adviser Balanced Fund
received a Morningstar Rating(TM) of 3 stars and 5 stars for the three- and
five-year periods, respectively. Janus Adviser Growth and Income Fund was rated
against the following number of U.S.-domiciled Large Growth funds over the
following time period: 802 funds the last three years. With respect to these
Large Growth funds, Janus Adviser Growth and Income Fund received a Morningstar
Rating(TM) of 4 stars for the three-year period. Janus Adviser Flexible Income
Fund was rated against the following numbers of U.S.-domiciled Multisector Bond
funds over the following time periods: 159 funds in the last three years and 117
funds in the last five years. With respect to these Multisector
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Bond funds, Janus Adviser Flexible Income Fund received a Morningstar Rating(TM)
of 5 stars for the three and five-year periods. Ratings are for the I share
class only; other classes may have different performance characteristics.
Ratings are for Berger Funds Investor shares as of December 31, 2002. Berger Mid
Cap Value Fun was rated against the following numbers of U.S.-domiciled Domestic
Mid Cap Value funds over the following time periods: 181 funds the last three
years. With respect to these Domestic Mid Cap Value funds, Berger Mid Cap Value
Fund received a Morningstar Rating(TM) of 4 stars for the three-year periods.
Berger Small Cap Value Fund was rated against the following number of
U.S.-domiciled Small Value funds over the following time period: 191 funds the
last three years. With respect to these Small Value funds, Berger Small Cap
Value Fund received a Morningstar Rating(TM) of 4 stars for the three-year
period. Ratings are for the Investor share class only; other classes may have
different performance characteristics.
Morningstar does not yet rate many of our newer funds because of their shorter
track record.
Past performance is no guarantee of future results and investment results and
principal value will fluctuate so that shares, when redeemed, may be worth more
or less than their original cost. Total return includes reinvestment of
dividends and capital gains.
For a Berger Value Funds prospectus please visit berger.com. For a Janus funds
prospectus please call Janus at 800-525-3713 or download the file from
janus.com. The prospectus contains more information, including charges, risks
and expenses. Read it carefully before you invest or send money.
Janus funds are distributed by Janus Distributors LLC. Berger Value Funds are
distributed by Berger Distributors LLC. (1/03)
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