2012 SUMMARY

JCG finished 2012 with assets under management of $156.8 billion, an increase of 5.8% from 2011, as a result of market appreciation offset by long-term net outflows. Long-term net outflows of $12.0 billion in 2012 were driven by net outflows in JCG's fundamental and mathematical equity strategies as a result of performance challenges and investor preference for fixed income and passive equity strategies.

One-year investment performance for fundamental equity has improved year-over-year while three- and five-year performance metrics have declined. Five-year investment performance remained strong for fixed income strategies and investment performance in JCG's mathematical equity strategies continued to be strong.

Net income attributable to JCG for 2012 totaled $102.3 million, or $0.55 per diluted share, compared with net income of $142.9 million, or $0.78 per diluted share, for 2011.

During 2012, JCG made significant progress on a number of strategic priorities, including:

º •
º Further diversification of the business through continued build-out of the fixed income business, with more than $25 billion of fixed income assets under management at the end of 2012, an increase of 28% from 2011.

º •
º Strategic expansion of distribution capabilities through the build-out of JCG's institutional and international channels, including the strategic alliance with The Dai-ichi Life Insurance Company, Limited ("Dai-ichi Life") that JCG entered into in August 2012.

º •
º Expansion of product offerings with the launch of an alternative products platform and the launch of approximately $58 million of U.S. and non-U.S. products across the equity, fixed income and alternative disciplines.

Looking forward to 2013, JCG is focused on delivering strong long-term investment performance and controlling expenses while continuing to invest in the business for long-term growth as the Company seeks to become more diversified and to continue to increase its global presence.

Investment and Strategic Cooperation Agreement with Dai-ichi Life

On August 10, 2012, JCG entered into an Investment and Strategic Cooperation Agreement (the "Agreement") with Dai-ichi Life. Pursuant to the terms of the Agreement, Dai-ichi Life may acquire up to 20% of JCG's issued and outstanding common stock no later than the first anniversary of the Agreement. As of February 20, 2013, Dai-ichi Life has acquired 19.6% of JCG's common stock through open market purchases.

In conjunction with the Agreement, JCG issued options that allow Dai-ichi Life to purchase up to 14.0 million shares of JCG's common stock for a purchase price of $10.25 per share. The options were sold to Dai-ichi Life at agreed upon fair value for cash consideration of $4.9 million. As of February 20, 2013, the outstanding options are not exercisable as such exercise would result in Dai-ichi Life's ownership exceeding the 20% threshold. The options expire on the first anniversary of the Agreement.

In accordance with the terms of the Agreement, Dai-ichi Life committed to invest a minimum of $2.0 billion in investment products managed by JCG's subsidiaries, including $120 million for JCG's seed accounts. The $2.0 billion commitment is expected to be invested in full by the end of 2013. Additionally, on January 22, 2013, a representative of Dai-ichi Life was appointed to the JCG Board of Directors.

INVESTMENT PERFORMANCE

Investment products are generally evaluated based on their investment
performance relative to other investment products with similar disciplines and
strategies or benchmark indices. The following table is a summary of investment
performance as of December 31, 2012:

                                                     Percentage of Mutual
                                                          Fund Assets
                                                    Outperforming Majority
                                                     of Lipper/Morningstar
                                                           Peers (1)
                                                1-Year     3-Year      5-Year
        Complex-wide mutual fund assets
        Lipper                                       66 %       27 %         54 %
        Morningstar                                  66 %       27 %         55 %
        Fundamental equity mutual fund assets
        Lipper                                       69 %       20 %         47 %
        Morningstar                                  68 %       20 %         48 %
        Fixed income mutual fund assets

Percentage of Strategies Outperforming Respective Benchmarks (2) 1-Year 3-Year 5-Year Mathematical equity strategies 63 % 87 % 67 %

º (1)
º References Lipper/Morningstar relative performance on an asset-weighted basis.

º (2)
º References relative performance, net of fees.

ASSETS UNDER MANAGEMENT

Valuation

The value of assets under management is derived from the cash and investment securities underlying JCG's investment products. Investment security values are determined using unadjusted or adjusted quoted market prices and independent third-party price quotes in active markets. JCG uses adjusted market prices to value certain international equity securities in order to adjust for stale pricing that may occur between the close of certain foreign exchanges and the NYSE. Security prices are adjusted based upon historical impacts for similar post close activity. For fixed income securities with maturities of 60 days or less, the amortized cost method is used to determine the value. Securities for which market prices are not readily available or are considered unreliable are internally valued using appropriate methodologies for each security type or by engaging third-party specialists. The value of the vast majority of the equity securities underlying JCG's investment products is derived from readily available and reliable market price quotations while the value of a majority of the fixed income securities is derived from evaluated pricing from independent third-party providers.

The pricing policies for mutual funds advised by JCG's subsidiaries (the "Funds") are established by the Funds' Independent Board of Trustees and are designed to test and validate fair value measurements. Responsibility for pricing securities held within separate and subadvised accounts may be delegated by the separate or subadvised clients to JCG or another party. JCG validates pricing received from third-party providers by comparing pricing between primary and secondary vendors. Any discrepancies are identified and resolved.

JCG performs a number of procedures to validate the pricing received from third-party providers. For actively traded equity securities, prices are received daily from both a primary and secondary vendor. For fixed income securities, prices are received daily from a primary vendor and weekly from a secondary vendor. Prices from the primary and secondary vendors are compared to identify any discrepancies. In the event of a discrepancy, a price challenge may be issued to both vendors. Securities with significant price changes require additional research, which may include a review of all news pertaining to the issue and issuer and any corporate actions. All fixed income prices are reviewed by JCG's fixed income trading desk in order to incorporate market activity information available to JCG's traders. In the event the traders have received price indications from market makers for a particular issue, this information is transmitted to the pricing vendors.

All pricing vendors are subject to an annual on-site due diligence review that includes a detailed discussion about the methodologies used, particularly for evaluated prices, and any changes to the methodologies.

JCG is generally not the pricing agent for securities held within separate and subadvised accounts. However, JCG does perform a daily reconciliation between the pricing performed by the pricing agent and the pricing applied based on JCG's procedures. Any pricing discrepancies noted are sent back to the pricing agent for resolution.

Assets Under Management and Flows

Total Company assets under management increased $8.6 billion, or 5.8%, from 2011, as a result of net market appreciation of $20.6 billion offset by long-term net outflows of $12.0 billion. Long-term net flows represent total Company net sales and redemptions, excluding money market assets.

Fundamental equity long-term net outflows were $10.4 billion in 2012 compared with $12.1 billion in 2011. The decrease in net outflows was primarily driven by improved performance in fundamental equity and lower redemptions within active equity strategies.

JCG continued to make progress toward building out its fixed income business, with positive long-term net inflows of $4.0 billion in 2012 compared to $4.9 billion in 2011.

Mathematical equity long-term net outflows were $5.6 billion in 2012 compared with $5.0 billion in 2011. The increase in net outflows was primarily driven by an increase in redemptions in 2012.

The following table presents the components of JCG's assets under management (in billions):

                                                 Year Ended December 31,
                                                2012        2011      2010
            Beginning of period assets         $  148.2    $ 169.5   $ 159.7
            Long-term sales
            Fundamental equity                     17.5       20.8      26.1
            Fixed income                           11.6       10.7       8.5
            Mathematical equity (1)                 4.9        4.5       4.4
            Long-term redemptions
            Fundamental equity                    (27.9 )    (32.9 )   (30.4 )
            Fixed income                           (7.6 )     (5.8 )    (4.5 )
            Mathematical equity (1)               (10.5 )     (9.5 )   (14.9 )

            Long-term net flows (2)
            Fundamental equity                    (10.4 )    (12.1 )    (4.3 )
            Fixed income                            4.0        4.9       4.0
            Mathematical equity                    (5.6 )     (5.0 )   (10.5 )

            Total long-term net flows             (12.0 )    (12.2 )   (10.8 )
            Net money market flows                    -          -      (0.2 )
            Market/fund performance                20.6       (9.1 )    20.8

            End of period assets               $  156.8    $ 148.2   $ 169.5

            Average assets under management
            Fundamental equity                 $   90.4    $ 100.6   $ 102.1
            Fixed income                           23.9       17.6      12.9
            Mathematical equity                    40.6       42.6      44.1
            Money market                            1.4        1.5       1.6

            Total                              $  156.3    $ 162.3   $ 160.7

º (1)
º 2011 gross sales and redemptions exclude the transfer of $1.1 billion within mathematical equity strategies in the first quarter 2011.

º (2)
º Excludes money market flows. Money market sales and redemptions are presented net on a separate line due to the short-term nature of the investments.

Assets and Flows by Investment Discipline

JCG, through its subsidiaries, offers investment products based on a diversified set of investment disciplines. Janus offers growth and core equity, global and international equity, as well as balanced, fixed income and retail money market investment products. INTECH offers mathematical-based

investment products and Perkins offers value-disciplined investment products. Assets and flows by investment discipline are as follows (in billions):

                                              Year ended December 31,
                                             2012        2011      2010
              Growth/Core
              Beginning of period assets    $   49.7    $  60.9   $  60.9
              Sales                              9.9       10.7      12.4
              Redemptions                      (14.8 )    (18.7 )   (18.6 )

              Net redemptions                   (4.9 )     (8.0 )    (6.2 )
              Market/fund performance            9.0       (3.2 )     6.2

              End of period assets          $   53.8    $  49.7   $  60.9

              Global/International
              Beginning of period assets    $   18.4    $  27.9   $  23.8
              Sales                              3.6        4.8       6.0
              Redemptions                       (6.4 )     (7.7 )    (6.3 )

              Net redemptions                   (2.8 )     (2.9 )    (0.3 )
              Market/fund performance            2.3       (6.6 )     4.4

              End of period assets          $   17.9    $  18.4   $  27.9

              Mathematical Equity (1)
              Beginning of period assets    $   39.9    $  44.1   $  48.0
              Sales                              4.9        4.5       4.4
              Redemptions                      (10.5 )     (9.5 )   (14.9 )

              Net redemptions                   (5.6 )     (5.0 )   (10.5 )
              Market/fund performance            5.9        0.8       6.6

              End of period assets          $   40.2    $  39.9   $  44.1

              Fixed Income
              Beginning of period assets    $   20.6    $  15.3   $  10.3
              Sales                             11.6       10.7       8.5
              Redemptions                       (7.6 )     (5.8 )    (4.5 )

              Net sales                          4.0        4.9       4.0
              Market/fund performance            1.8        0.4       1.0

              End of period assets          $   26.4    $  20.6   $  15.3

              Value
              Beginning of period assets    $   18.1    $  19.8   $  15.0
              Sales                              4.0        5.3       7.7
              Redemptions                       (6.7 )     (6.5 )    (5.5 )

              Net sales (redemptions)           (2.7 )     (1.2 )     2.2
              Market/fund performance            1.6       (0.5 )     2.6

              End of period assets          $   17.0    $  18.1   $  19.8

                                               Year ended December 31,
                                             2012         2011       2010
              Money Market
              Beginning of period assets    $    1.5     $    1.5   $  1.7
              Sales                              0.8          1.0      0.8
              Redemptions                       (0.8 )       (1.0 )   (1.0 )

              Net redemptions                      -            -     (0.2 )
              Market/fund performance              -            -        -

              End of period assets          $    1.5     $    1.5   $  1.5

º (1)
º 2011 gross sales and redemptions exclude the transfer of $1.1 billion within mathematical equity strategies in the first quarter 2011.

Revenues

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. Certain mutual funds and separate accounts are also subject to performance fees, which vary based on a product's relative performance as compared to an established benchmark index over a specified period of time 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 domestic and international 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 JCG's operating results. The following graph depicts the direct relationship between average assets under management and investment management revenues:

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RESULTS OF OPERATIONS

2012 Compared to 2011

Revenues

Investment Management Fees

Investment management fees decreased $62.0 million, or 7.3%, primarily as a result of a 3.7% decrease in average assets under management driven by long-term net outflows, partially offset by favorable market conditions. Revenue decreased at a higher rate than average assets primarily due to a product mix shift toward lower yielding fixed income products.

Performance Fees

Performance fee revenue is derived from certain mutual funds and separate accounts. Negative performance fees increased $63.7 million primarily due to the timing of additional mutual funds becoming subject to performance fees and underperformance of mutual fund assets against their benchmarks. Negative mutual fund performance fees were partially offset by positive performance fees on separate account assets. Separate account performance fees included a $6.7 million non-recurring fee from an existing client that switched from a performance-based fee to a fixed-based fee in December 2012.

At December 31, 2012, $54.0 billion and $9.7 billion of mutual fund and private account assets, respectively, were subject to performance fees. As approved by mutual fund shareholders in 2010, six additional mutual funds became subject to performance fees in 2011, with the first fee adjustment for the impacted funds calculated at various points during 2011. The first quarter 2012 represented the first quarter in which all mutual fund assets subject to performance fees were subject to such fees for an entire quarter.

Expenses

Employee Compensation and Benefits

Employee compensation and benefits decreased $20.4 million, or 6.9%, primarily due to lower investment team incentive compensation as a result of lower profits. The investment team incentive compensation plan is designed to link variable compensation to operating income.

Long-Term Incentive Compensation

Long-term incentive compensation increased $3.7 million, or 5.9%, due to $13.6 million of expense from new awards granted during 2012 and a $3.2 million mark-to-market adjustment for changes in fair value of mutual fund share awards. These increases were partially offset by a decrease of $6.9 million in Perkins senior profits interests awards expense. The Perkins senior profits interests awards have a formula-driven terminal value based on revenue and relative investment performance of products subadvised by Perkins. Additionally, long-term incentive compensation decreased $6.5 million from the vesting of awards granted in previous years.

Long-term incentive awards granted during 2012 totaled $59.1 million and will generally be recognized ratably over a four-year period. Future long-term incentive amortization will also be impacted by the 2013 annual grant totaling $47.6 million, which will generally be recognized ratably over a four-year period.

Marketing and Advertising

Marketing and advertising declined $4.4 million, or 15.7%, primarily due to lower brand positioning and advertising expenses.

Distribution

Distribution expense declined $14.9 million, or 10.5%, as a result of a similar decrease 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.

Depreciation and Amortization

Depreciation and amortization increased $5.2 million, or 15.6%, primarily due to $7.7 million of intangible asset impairment charges from the loss of JCG subadvised relationships. JCG recognizes an impairment charge equal to the unamortized value of the associated intangible asset when notification of termination is received.

Interest Expense and Loss on Early Extinguishment of Debt

Interest expense declined $6.0 million, or 11.8%, primarily as a result of the retirement of the $92.2 million principal amount of outstanding debt in the third quarter 2011 and the first quarter 2012 debt tender in which $59.4 million aggregate principal amount of the Company's outstanding 2014 and 2017 Senior Notes were repurchased with cash on hand. JCG recognized a $7.2 million loss on early extinguishment of debt related to the repurchase of these notes.

Investment Gains (Losses), Net

Net investment gains totaling $11.1 million for 2012 include $17.3 million of mark-to-market gains on seed capital classified as trading securities, $9.9 million of mark-to-market gains related to the economic hedging of mutual fund share awards and deferred compensation plans and $2.0 million of gains on noncontrolling interests in consolidated investment products. Effective January 2013, JCG discontinued the practice of economically hedging mutual fund share awards. JCG's corresponding investments are no longer made on a one-for-one basis.

The investment gains were partially offset by $12.5 million of losses generated by the Company's seed capital economic hedging strategy. The hedging strategy utilizes futures contracts to mitigate a portion of the earnings volatility created by the mark-to-market accounting of seed capital investments. JCG may modify or discontinue this hedging strategy at any time. JCG also recognized $6.1 million of investment losses generated by put spread option contracts that were purchased by the Company in the fourth quarter 2011 to mitigate potential negative impacts on 2012 profitability in the event of a market downturn. The put spread option contracts expired on December 31, 2012.

Income Tax Provision

JCG's income tax provision for 2012 includes the reversal of $2.8 million of income tax contingency reserves as a result of the expiration of statutes of limitations and audit settlements, creating a net tax benefit of $1.8 million. The 2012 income tax provision also includes tax expense of $4.3 million related to expiration and vesting of certain equity-based compensation awards.

2011 Compared to 2010

Revenues

Performance Fees

Performance fee revenue is derived from certain mutual funds and separate accounts. The transition from positive performance fee revenue of $32.6 million in 2010 to negative performance fee revenue of $(11.7) million in 2011 was primarily due to negative performance fees incurred on certain mutual funds in 2011. These negative mutual fund performance fees were driven by underperformance compared to the mutual funds' respective benchmarks.

Expenses

Employee Compensation and Benefits

Employee compensation and benefits decreased $19.6 million, or 6.2%, principally due to lower investment team incentive compensation as a result of lower profits and a change in the compensation plan. Effective July 1, 2011, JCG adopted a new investment team incentive compensation plan designed to link variable compensation to operating income. The previous investment team incentive compensation plan was linked to individual long-term investment performance and also tied the aggregate level of compensation to revenue.

Long-Term Incentive Compensation

Long-term incentive compensation decreased $20.1 million, or 24.2%, primarily due to a decline of $19.0 million from the vesting of awards granted in previous years and a decrease of $12.6 million in Perkins senior profits interests awards expense, which was driven by a decline in investment performance in 2011. The decrease in long-term incentive compensation was partially offset by $13.0 million of expense from new awards granted in 2011.

Marketing and Advertising

Marketing and advertising decreased $7.8 million, or 21.8%, primarily due to $9.1 million of fund proxy costs included in the prior year for the election of the mutual fund trustees for JCG's domestic mutual funds.

Depreciation and Amortization

Depreciation and amortization expense decreased $5.8 million, or 14.8%, primarily as a result of lower amortization of deferred commissions from a decline in sales of certain mutual fund shares.

General, Administrative and Occupancy

General, administrative and occupancy expense decreased $12.3 million, or 10.1%, primarily as a result of $13.6 million of client reimbursements related to two significant fund administrative errors during the third quarter 2010. The errors were unrelated and involved delayed security trades in client portfolios. The securities underlying both trades appreciated in value between the time that the trades should have occurred and the time the trades were executed. The $13.6 million incurred in the third quarter 2010 represented the amount necessary to make clients whole by paying the increased costs of trades due to appreciation in value of the applicable securities. During the fourth quarter 2010, JCG received insurance recoveries relating to the fund administrative errors totaling $6.5 million, resulting in a full year 2010 net impact of $7.1 million.

Interest Expense and Loss on Early Extinguishment of Debt

Interest expense declined $12.2 million, or 19.3%, primarily as a result of the retirement of $120.9 million of outstanding debt in the first quarter 2011 and a 25 basis point decrease in the interest rates payable on all of JCG's senior notes, excluding the 3.250% Convertible Senior Notes ("Convertible Senior Notes"), as a result of Standard & Poor's ("S&P") Rating Service increasing JCG's credit rating to BBB- on January 10, 2011. During the fourth quarter 2010, JCG exercised its call right on the $120.9 million carrying value of the 6.250% Senior Notes and retired the notes in January 2011. Under the terms of the call, JCG was required to pay the present value of the interest that would have been paid if the debt remained outstanding through maturity. As a result, JCG recognized a $9.9 million loss on early extinguishment of debt in the first quarter 2011.

Investment Gains (Losses), Net

Net investment losses totaling $21.9 million for the year ended December 31, 2011, primarily include $13.0 million of mark-to-market losses on seed capital . . .