Exhibit 99.1
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STILWELL FINANCIAL INC.
INTRODUCTORY COMMENTS TO UNAUDITED PRO FORMA FINANCIAL
INFORMATION
The accompanying unaudited pro forma consolidated condensed balance
sheet gives effect to (a) completion of the offering of senior notes by Stilwell
Financial Inc. ("Stilwell" or the "Company") and Stilwell's receipt of net
proceeds of approximately $396.1 million, after deducting a discount at
issuance, the underwriters' discount and certain offering expenses and (b)
Stilwell's purchase of a total of 609,950 shares of Janus common stock from Mr.
Bailey and one other minority stockholder of Janus at an aggregate purchase
price of approximately $613 million, as if these transactions occurred on
September 30, 2001.
The accompanying unaudited pro forma consolidated condensed statements
of income for the year ended December 31, 2000 and the nine months ended
September 30, 2001 give effect to (a) completion of the offering of the senior
notes on November 6, 2001 and Stilwell's receipt of net proceeds of
approximately $396.1 million, after deducting a discount at issuance, the
underwriters' discount and certain offering expenses, (b) the Janus purchase on
September 4, 2001 of approximately 139,000 shares of its common stock from Janus
employees at a cost of $139.8 million, (c) Stilwell's purchase on November 9,
2001 of a total of 609,950 shares of Janus common stock from Mr. Bailey and one
other minority stockholder of Janus at an aggregate purchase price of
approximately $613 million using the proceeds from the offering of the senior
notes,(d) Stilwell's purchase on March 16, 2001 of 199,042 shares of Janus
common stock for approximately $200 million from certain minority stockholders
of Janus, other than Mr. Bailey, who exercised their put rights under their
stock purchase agreements, (e) completion of a zero-coupon convertible debt
("zero-coupon securities") offering on April 30, 2001 and the receipt of
net proceeds of approximately $673.6 million, after deducting the
initial purchaser's discount and certain offering expenses, and (f) Stilwell's
purchase in April and May, 2001 of a total of 603,000 shares of Janus common
stock at an aggregate purchase price of approximately $606 million from Mr.
Bailey and one other minority stockholder, as if all of these transactions
occurred on January 1, 2000.
Stilwell adopted the provisions of Statement of Accounting Standards
No. 141, "Business Combinations" ("FAS141") and Statement of Accounting
Standards No. 142, "Goodwill and Other Intangible Assets" ("FAS 142") for
acquisitions occurring on or after July 1, 2001. With respect to acquisitions
occurring prior to July 1, 2001, FAS 141 and FAS 142 will be adopted on January
1, 2002 as required by the new rules. FAS 141 requires the purchase method of
accounting and FAS 142 provides that goodwill and intangible assets with
indefinite lives will no longer be amortized. As a result, with respect to
acquisitions occurring prior to July 1, 2001, all goodwill and intangible assets
are amortized over their respective lives, assumed to be a period of 20 years
for these pro forma financial statements. With respect to acquisitions occurring
on or after July 1, 2001, goodwill will not be amortized and those intangible
assets with determinate lives will be amortized over their respective lives,
assumed to be a period of 20 years for these pro forma financial statements. In
these unaudited pro forma financial statements, Stilwell refers to the
transactions described in (b) and (c) in the paragraph immediately above,
collectively, as the "post July 1, 2001 acquisitions" and Stilwell refers to the
transactions described in (d) and (f) in the paragraph immediately above,
collectively, as the "initial acquisitions."
For purposes of these pro forma financial statements, Stilwell has
applied FAS 141 and FAS 142 to acquisitions occurring after July 1, 2001, as if
such transactions occurred on January 1, 2000. As such, these pro forma
financial statements have been prepared on the assumption that FAS 141
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and FAS 142 apply only to the post July 1, 2001 acquisitions. With respect to
the initial acquisitions, Stilwell has applied generally accepted accounting
principles that require the amortization of goodwill and intangible assets over
their respective lives, assumed to be a period of 20 years for these pro forma
financial statements.
Based on initial estimates, the purchase price relating to the post
July 1, 2001 acquisitions exceeded the fair value of the net tangible assets
acquired in such transactions by approximately $671.6 million, of which
approximately $335.8 million was recorded as goodwill, $167.9 million as
indefinite lived intangible assets and $167.9 million as intangible assets
subject to amortization. Based on initial estimates, the purchase price relating
to the initial acquisitions exceeded the fair value of the net tangible assets
acquired in such transactions by approximately $796.0 million, of which
approximately $398.0 million was recorded as goodwill and $398.0 million as
intangible assets. Stilwell has engaged an independent valuation professional to
determine the actual allocation of the aggregate purchase price relating to such
transactions. Such independent valuation may affect the initial estimates of
intangible assets and goodwill, if any, to be amortized, as well as the periods
over which such intangible assets will be amortized.
These unaudited pro forma financial statements are presented for
illustrative purposes only and are not necessarily indicative of the operating
results or financial position that would have occurred had the acquisitions of
the shares described above been consummated on the dates indicated, and such pro
forma financial statements are not necessarily indicative of Stilwell's future
operating results or financial position.
The pro forma financial information is based upon and should be read in
conjunction with the historical consolidated financial information that is
presented in the audited consolidated financial statements and related notes
included in Stilwell's annual report on Form 10-K for the fiscal year ended
December 31, 2000 and the historical consolidated condensed financial
information that is presented in Stilwell's quarterly report on Form 10-Q for
the three and nine months ended September 30, 2001, both of which are on file
with the SEC.
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