FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. In addition, Janus Capital Group Inc. (collectively, "Janus" or the "Company") may make other written and oral communications from time to time that contain such statements. Forward-looking statements include statements as to industry trends and future expectations of the Company and other matters that do not relate strictly to historical facts and are based on certain assumptions by management. These statements are often identified by the use of words such as "may," "will," "expect," "believe," "anticipate," "intend," "could," "should," "estimate" or "continue," and similar expressions or variations. These statements are based on the beliefs and assumptions of the Company management based on information currently available to management. Such forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Important factors that could cause actual results to differ materially from the forward-looking statements include, among others, the risks described in the Company's filings with the Securities and Exchange Commission, including those in Part I, Item 1A, Risk Factors, and elsewhere in Janus' Annual Report on Form 10-K for the year ended December 31, 2007 and in Part II, Item 1A, Risk Factors, in this Form 10-Q. Janus cautions readers to carefully consider such factors. Furthermore, such forward-looking statements speak only as of the date on which such statements are made. Except as required by applicable law, Janus undertakes no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements.

AVAILABLE INFORMATION

Copies of Janus Capital Group Inc.'s (collectively, "Janus" or the "Company") filings with the Securities and Exchange Commission ("SEC") can be obtained from the SEC's Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Information can be obtained about the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at http://www.sec.gov.

Janus makes available free of charge its annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K and amendments thereto as soon as reasonably practical after such filing has been made with the SEC. Reports may be obtained through the Investor Relations section of Janus' website (http://ir.janus.com) or by contacting Janus at (888) 834-2536. The contents of Janus' website are not incorporated herein for any purpose.

Janus' Officer Code of Ethics for Principal Executive Officer and Senior Financial Officers (including its chief executive officer, chief financial officer and controller) (the "Officer Code"); Corporate Code of Business Conduct and Ethics for all employees; corporate governance guidelines; and the charters of key committees of the Board of Directors (including the Audit, Compensation, Nominating and Corporate Governance, and Planning and Strategy committees) are available on its website (http://ir.janus.com/governance.cfm), and printed copies are available to any shareholder upon request by calling Janus at (888) 834-2536. Any future amendments to or waivers of the Officer Code will be posted to the Investor Relations section of Janus' website.

RESULTS OF OPERATIONS

Overview

Janus provides investment management and administrative services to mutual funds, separate accounts and institutional clients in both domestic and international markets through its primary subsidiaries, Janus Capital Management LLC ("Janus ex-INTECH") and Enhanced Investment Technologies, LLC ("INTECH").

Revenues are generally based upon a percentage of the market value of assets under management and are calculated as a percentage of the daily average asset balance in accordance with contractual agreements with the Company's mutual funds, separate accounts and subadvised relationships (collectively referred to herein as "investment products"). Certain investment products are also subject to performance fees that vary based on their relative performance as compared to a benchmark index and the level of assets subject to such fees. Assets under management primarily consist of domestic and international equity and debt securities. Accordingly, fluctuations in the financial markets, relative investment performance, sales and redemptions of investment products, and changes in the composition of assets under management are all factors that have a direct effect on Janus' operating results.

INVESTMENT MANAGEMENT OPERATIONS (CONTINUING OPERATIONS)

Recent Developments

Global markets declined 20% to 30% through September 30, 2008 and 20% from the end of the third quarter 2008. The continuing deterioration in market conditions and Janus' assets under management will place pressure on the company's operating margin and results in the fourth quarter 2008 and into 2009. If the current market conditions persist or further deteriorate, Janus' assets under management, revenues, operating margin, net income and liquidity will be materially impacted.

To align the Company's cost structure with the current level of assets under management and revenues, Janus anticipates reducing 2009 fixed and discretionary costs by approximately $40 million to $45 million. The cost savings are expected to be achieved through an approximate 9% workforce reduction, yielding $15 million of annualized savings, and cutting general and administrative expenses by approximately $25 million to $30 million. In connection with the workforce reduction, Janus will incur a severance charge of approximately $7 million during the fourth quarter 2008. In addition, variable compensation and distribution expenses are expected to fluctuate with assets under management and revenues.

Third Quarter 2008 Summary

† Relative long-term investment performance remained strong despite short-term underperformance, with approximately 65%, 75% and 83% of Janus' mutual funds in the top half of their Lipper categories on a one-, three- and five-year total return basis, respectively, as of September 30, 2008.

† INTECH's long-term performance remained strong, with 83%, 56%, 100% and 100% of product strategies with at least a one-, three-, five- and ten-year performance track record, respectively; outperforming their respective benchmarks during each of those periods ended September 30, 2008.

†          Operating margin was 33.9%.

†          Net income from continuing operations was $26.0 million, or $0.16 per
diluted share.

†          Repurchased 3.0 million shares of Janus common stock at a total price
of $71.9 million.

Assets Under Management and Flows



                                       Three months ended September 30,        Nine months ended September 30,
                                           2008                2007               2008                2007
                                                 (in billions)                          (in billions)

Beginning of period assets                    $ 191.8             $ 190.6            $ 206.7             $ 167.7
Long-term sales
Janus ex-INTECH                                   8.5                 9.2               29.7                24.4
INTECH                                            6.2                 2.0               10.5                11.5
Long-term redemptions
Janus ex-INTECH                                  (9.8 )              (6.3 )            (26.6 )             (20.0 )
INTECH                                           (6.0 )              (4.2 )            (11.2 )              (9.4 )
Long-term net flows *
Janus ex-INTECH                                  (1.3 )               2.9                3.1                 4.4
INTECH                                            0.2                (2.2 )             (0.7 )               2.1
Total long-term net flows                        (1.1 )               0.7                2.4                 6.5
Net money market flows                           (4.0 )               8.1               (5.0 )              10.9
Market / fund performance                       (26.2 )               8.6              (43.6 )              22.9
End of period assets                          $ 160.5             $ 208.0            $ 160.5             $ 208.0

Average assets under management
Janus ex-INTECH                               $ 112.2             $ 112.0            $ 116.6             $ 106.5
INTECH                                           59.5                68.8               62.5                67.6
Money Market                                     11.0                12.7               11.7                10.5
Total                                         $ 182.7             $ 193.5            $ 190.8             $ 184.6

Janus ex-INTECH long-term net flows declined by $4.2 billion and $1.3 billion for the three- and nine-month periods ended September 30, 2008, respectively, largely from increased redemptions as a result of adverse market conditions. Average assets under management for Janus ex-INTECH were comparable for the three months ended September 30, 2008 and 2007, and increased for the nine months ended September 30, 2008 as compared to the same period in the prior year. The increase in year-to-date Janus ex-INTECH average assets under management was largely driven by positive long-term net flows.

INTECH long-term net flows increased $2.4 billion for the three-month period ended September 30, 2008, as compared to the same period in 2007 primarily as a result of an additional funding from one large institutional client. Year over year, INTECH long-term net flows declined $2.8 billion from the relative underperformance of certain key investment strategies in early 2008 and most of 2007 and clients reallocating assets from INTECH to other investment strategies. INTECH average assets under management decreased for the three- and nine-month periods ended September 30, 2008 as compared to the same periods in the prior year. The decline is primarily attributable to challenging market conditions. The recent deterioration in market conditions occurred late in the third quarter 2008 and accordingly, did not have a significant impact on average assets under management for the nine months ended September 30, 2008.

Results of Investment Management Operations

Three Months Ended September 30, 2008, Compared with Three Months Ended September 30, 2007

Revenues

Investment management fees decreased $9.6 million, or 4.2%, primarily as a result of the 5.6% decrease in average assets under management.

Performance fee revenue is derived from certain mutual funds and separate accounts. The $3.7 million increase in performance fee revenue was principally due to higher fees earned on INTECH separate accounts as a result of improved recent relative investment performance.

Shareowner servicing fees and other revenue declined $3.3 million, or 6.5%, over the comparable prior year period primarily as a result of a decrease in transfer agent fees. Transfer agent fees are based on average assets under management in Janus' retail fund series (Janus Investment Fund), excluding money market assets, which decreased 8.8% over the comparable prior period.

Expenses

Employee compensation and benefits decreased $9.9 million, or 10.9%, due to lower investment team compensation and sales commissions. Investment team compensation decreased as a result of a decline in short-term relative investment performance and lower revenue. The investment team compensation plan is linked to individual investment performance, but also ties the aggregate level of compensation to revenue. Sales commissions decreased $3.8 million due to lower sales.

Long-term incentive compensation decreased quarter over quarter primarily as a result of a decline in the performance-based acceleration of previous awards based on expected 2008 financial performance, partially offset by an increase related to the 2008 annual grant awarded in February.

Net investment losses of $32.3 million for the three months ended September 30, 2008, include a $21.0 million impairment charge on structured investment vehicle ("SIV") securities caused by a general deterioration in overall market conditions, particularly in financial institution-related debt held within the vehicle, and the SIV custodian's establishment of a reserve for litigation and operating expenses. Investment losses for the quarter also include $11.3 million of mark-to-market adjustments on consolidated investment products. Mutual funds and separate accounts in which Janus owns a majority interest are consolidated, with changes in market value reported in current period earnings.

Minority interest in consolidated earnings consists primarily of INTECH earnings which declined as a result of lower average assets under management in the relevant investment products, offset by higher performance fees earned on separate accounts.

Nine Months Ended September 30, 2008, Compared with Nine Months Ended September 30, 2007

Revenues

Investment management fees increased $34.2 million, or 5.3%, primarily as a result of the 3.3% increase in average assets under management. Revenue increased at a slightly higher rate than average assets under management as a result of increased average assets in higher yielding Janus ex-INTECH products.

Despite the recent investment underperformance on certain investment products, performance fee revenue increased as a result of improved long-term relative investment performance as of September 30, 2008, as compared to the same period in 2007.

Shareowner servicing fees and other revenue increased $6.5 million, or 4.5%, from higher distribution fees and transfer agent fees. Distribution fees are earned from the sale of Janus Adviser Series ("JAD") C shares. Such fees increased as a result of higher sales of JAD C shares. Transfer agent fees were driven by an increase in Janus Investment Fund average assets under management.

Expenses

Employee compensation and benefits was consistent with the comparable prior year period as a result of a decline in investment team compensation and commissions, offset by an increase in the average number of employees.

Long-term incentive compensation decreased $14.2 million, or 28.7%, primarily as a result of a decline in the performance-based acceleration of previous awards based on expected 2008 financial performance, partially offset by an increase related to the 2008 annual grant awarded in February. Grants made during the nine months ended September 30, 2008, totaled $83.9 million and will be recognized ratably over a three-year period. These awards are not subject to accelerated vesting.

In addition to these awards, retention awards were granted to certain Janus investment team members and INTECH employees to facilitate succession planning and incentivize key personnel to remain with the Company. The Janus retention grant totaled $21.0 million and will be recognized ratably over a four-year period. The INTECH retention grant totaled $10.0 million and will be recognized ratably over a ten-year period. These awards are not subject to accelerated vesting.

Marketing and advertising expenses increased $7.9 million, or 47.6%, from sponsorships and higher print advertising associated with the promotion of the Janus brand.

Distribution expense increased $10.5 million, or 10.4%, from a similar increase in assets under management subject to third-party concessions. Distribution fees are calculated based on a contractual percentage of the market value of assets under management distributed through third-party intermediaries and are primarily related to Janus ex-INTECH investment products.

Depreciation and amortization expense increased $6.0 million, or 24.3%, primarily as a result of the amortization of deferred commissions from higher sales of JAD C shares and the amortization of intangibles related to the March 2008 acquisition of an additional 3% interest in INTECH.

General, administrative and occupancy expense increased $17.0 million, or 18.9%, from higher legal and other professional services costs associated with ongoing litigation and rent related to international expansion. The comparable prior year period includes the release of $6.3 million of legal reserves.

Janus performs its annual impairment tests of goodwill and unamortized intangible assets during the fourth quarter of each year. If assets under management continue to decline, Janus may recognize an impairment charge associated with its goodwill and intangible assets.

Interest expense increased $16.7 million, or 41.9%, from the issuance of additional debt in June 2007. All of Janus' outstanding debt includes an interest rate adjustment covenant that provides that the interest rate payable will increase by 25 basis points for each level that the Company's debt rating is decreased by Moody's from its existing rating of Baa3 or by S&P from its existing rating of BBB-, up to a maximum increase of 200 basis points. In the event Janus' assets under management continue to decline, Janus' debt ratings may be downgraded and interest expense will increase.

Net investment losses of $38.8 million for the nine months ended September 30, 2008 include a $21.0 million impairment charge on SIV securities and $19.4 million of mark-to-market losses on consolidated investment products, net of $1.6 million of realized gains.

The decrease in minority interest is largely the result of a decline in INTECH earnings associated with lower average assets under management in the relevant investment products, offset by higher performance fees earned on separate accounts.

The income tax provision for the nine months ended September 30, 2008, includes a $10.8 million tax benefit as a result of applying a lower tax rate to deferred tax assets and liabilities expected to be realized or settled on or after January 1, 2009. Janus' tax rate will decrease by approximately 1% from the current rate effective January 1, 2009 as a result of a legislative change in Colorado state taxes enacted during the second quarter 2008.

DISCONTINUED OPERATIONS

During the second quarter 2008, Janus disposed of its Printing and Fulfillment operations for $14.5 million. The liquidation of the remaining assets is not expected to have a material impact on Janus' operating results in future periods.