Janus Capital Group Inc. Announces Third Quarter 2012 Results

Janus Capital Group Inc. (“JCG”) (NYSE: JNS) today reported third quarter net income of $25.1 million, or $0.14 per diluted share, compared with second quarter 2012 net income of $23.4 million, or $0.13 per diluted share and net income of $27.4 million, or $0.15 per diluted share, in the third quarter 2011. Third quarter 2012 net income included an intangible asset impairment charge of $0.01 per share related to the redemption of a sub-advised account. Third quarter 2011 net income included a net charge of $0.06 per share primarily related to mark-to-market losses on investments.

Flows and Assets Under Management

Average assets under management during the third quarter 2012 were $155.5 billion compared with $155.0 billion during the second quarter 2012 and $155.9 billion during the third quarter 2011.

At September 30, 2012, JCG’s total assets under management were $158.2 billion compared with $152.4 billion at June 30, 2012 and $141.0 billion at September 30, 2011.

The increase in complex-wide assets during the third quarter 2012 primarily reflects net market appreciation of $7.8 billion offset by long-term net outflows of $2.0 billion. Fixed income and mathematical equity long-term net inflows totaled $1.0 billion and $0.3 billion, respectively, while fundamental equity long-term net outflows totaled $3.3 billion.

Investment Performance

As of September 30, 2012, 42% of complex-wide mutual funds have a 4- or 5-star Overall Morningstar Rating ^TM. ¹

As of September 30, 2012, 38%, 26% and 49% of fundamental equity mutual funds ranked in the top half of their Lipper categories on a one-, three- and five-year total return basis, respectively. ²

Fixed income mutual funds continue to generate strong long-term relative investment performance with 54%, 75% and 100% of mutual fund assets ranked in the top half of their Lipper categories on a one-, three- and five-year total return basis as of September 30, 2012. ³

Mathematical equity relative investment performance has improved, with 82%, 93% and 75% of strategies surpassing their respective benchmarks, net of fees, over the one-, three- and five-year periods, respectively, as of September 30, 2012. ⁴

Financial Discussion

	Financial Highlights
	(dollars in millions, except per share data or as noted)
								Three Months Ended
								September 30,			June 30,			September 30,
								2012			2012			2011
	Average Assets ( in billions)							$ 155.5			$ 155.0			$ 155.9
	Ending AUM ( in billions)							$ 158.2			$ 152.4			$ 141.0
	Revenues							$ 209.0			$ 206.0			$ 236.9
	Operating Expenses							$ 161.1			$ 153.9			$ 162.7
	Operating Income							$ 47.9			$ 52.1			$ 74.2
	Operating Margin							22.9%			25.3%			31.3%
	Net Income							$ 25.1			$ 23.4			$ 27.4
	Diluted Earnings per Share							$ 0.14			$ 0.13			$ 0.15

Third quarter 2012 revenues of $209.0 million increased slightly from second quarter 2012, primarily due to higher average assets under management driven by market appreciation. Third quarter 2012 operating expenses of $161.1 million increased $7.2 million, or 4.7% from second quarter 2012, primarily from higher variable compensation expenses and long-term incentive compensation. Additionally, the third quarter 2012 included an intangible asset impairment of $2.5 million related to the redemption of a sub-advised account.

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