UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

Commission file number 001-15253

Janus Capital Group Inc.

(Exact name of registrant as specified in its charter)

Registrant’s telephone number, including area code

(303) 333-3863

Securities registered pursuant to Section 12 (b) of the Act:

Securities registered pursuant to Section 12 (g) of the Act:

None

Indicate by check mark whether the Company (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes þ         No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.    þ

Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2).    Yes þ         No o

The Company’s common stock is listed on the New York Stock Exchange under the symbol “JNS”. As of March 4, 2005, 230,947,702 shares of common stock were outstanding. On such date, the aggregate market value of the voting and non-voting common stock held by non-affiliates of the Company was $3,438,811,282 (based on the closing price of the common stock on New York Stock Exchange on March 4, 2005).

DOCUMENTS INCORPORATED BY REFERENCE:

Portions of the following documents are incorporated herein by reference into Part of the Form 10-K as indicated:

JANUS CAPITAL GROUP INC.

2004 FORM 10-K ANNUAL REPORT

TABLE OF CONTENTS

PART I

Forward-Looking Statements

This Annual Report on Form 10-K contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. In addition, Janus Capital Group Inc. (“Janus” or the “Company”) may make other written and oral communications from time to time (including, without limitation, in the Company’s 2004 Annual Report to Stockholders) 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,” “estimate” or “continue,” and similar expressions or variations. These statements are based on the beliefs and assumptions of the management of the Company 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 Part  I, Item 1, Business, under “Risk Factors,” and elsewhere in this report. 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. Janus undertakes no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements.

BUSINESS AND DISTRIBUTION STRATEGY

Overview

Janus Capital Group Inc. and its consolidated subsidiaries (collectively, “Janus” or the “Company”) sponsor, market and provide investment advisory, distribution and administrative services to mutual funds and separate accounts in both domestic and international markets (the “Investment Management segment”). The Company also owns a printing and fulfillment business (the “Printing and Fulfillment segment”), acquired on December 1, 2003, as part of an exchange transaction with DST Systems, Inc. (“DST”). See additional information in Part II, Item 8, Financial Statements and Supplementary Data, Note 6 — DST Exchange Transaction, of this Form 10-K.

Janus’ significant subsidiaries and equity method investments at December 31, 2004, include:

The majority of Janus’ revenues are dependent on its Investment Management segment. Revenues are driven by the total value and composition of assets under management. Managed assets primarily consist of domestic and international equity and debt securities. Accordingly, fluctuations in the financial markets, relative investment

performance, net flows and changes in the composition of assets under management are all factors that have a direct effect on the Company’s operating results.

Janus organizes and manages its Investment Management segment by investment discipline and distribution channel. As of December 31, 2004, the Company’s assets under management totaled $139.0 billion across multiple investment disciplines, including growth equity ($69.0 billion), core/blend ($17.4 billion), mathematical/quantitative ($25.8 billion), fixed income ($6.2 billion), value ($9.8 billion) and money market ($10.8 billion). The Company’s primary objective is to generate strong and consistent investment performance in all disciplines. Success is measured by long-term investment performance relative to competing investment advisors. For the one- and three-year periods ended December 31, 2004, approximately 60% and 68%, respectively, of the JIF funds (the Company’s primary fund family) were ranked in the top two Lipper Analytics quartiles based upon total returns, compared to 55% and 38% for the one- and three-year periods, respectively, as of December 31, 2003.

The Company’s assets under management at December 31, 2004, of $139.0 billion are composed of assets in each of Janus’ three distribution channels, consisting of Retail ($47.5 billion), Global Advisors ($55.7 billion), and Janus Institutional Asset Management ($35.8 billion). Janus’ objective is to maintain cost-effective distribution in channels that provide the greatest opportunity for client sales and asset retention. The success of the Company’s distribution is measured by long-term net flows, defined as gross sales less redemptions, excluding the impact of money market flows. In 2004, Janus’ long-term net outflows totaled approximately $20.6 billion.

Investment Discipline

The Company considers itself a leader in fundamental investment research, beginning with the launch of the Janus Fund more than 35 years ago. JCM offers growth equity, core and international equity funds, as well as balanced, specialty fixed-income and money market funds, utilizing intensive company research and a rigorous portfolio management methodology.

During the 2002-2003 time frame, Janus expanded its discipline offerings through acquisitions and investments to include mathematical/quantitative (INTECH) and value (PWM). INTECH, founded in 1987, seeks to outperform various indices by using a mathematical process that seeks to capitalize on market volatility while controlling overall risk relative to the index. Mathematical/quantitative assets grew more than 80% in 2004, ending the year at $25.8 billion. The Company’s value discipline is managed primarily by PWM.

Prior to opening a new fund, Janus carefully evaluates whether the fund meets its clients’ needs, whether the Company can manage the fund to deliver consistently strong investment performance, and whether the investment process employed is aligned with Janus’ overall research-oriented investment philosophy. In the first quarter of 2005, Janus introduced two new funds to the market; a small-midcap fund (Janus Triton Fund) and a “best-ideas” research fund (The Janus Research Fund).

Distribution Channels

Janus offers investment advisory services to individual and institutional investors primarily through the various Janus mutual fund products as well as through separately managed and institutional accounts. In 2004, Janus’ sales organization capabilities were segmented into three broad distribution channels (Retail, Global Advisors and Janus Institutional Asset Management) in order to provide the appropriate client solutions and support. The Company made significant investments in these channels in 2004, and is committed in the future to position Janus in these or other channels where the Company is underpenetrated compared to the net flow opportunity.

Retail Channel

The Retail channel comprised 34% of assets under management as of December 31, 2004. These assets are distributed to self-directed individual investors who access Janus on both a direct basis as well as through supermarket platforms. These investors are primarily served through Janus’ original fund family, JIF. The Retail channel is reviewing its approach to customer service with the goal of generating leads and sales prospects.

Another important component of the Retail channel’s strategy is the strengthening of the brand through both print and television advertising campaigns. Janus’ ongoing advertising campaign is attempting to re-establish the Janus name in the marketplace and underscore Janus’ research-driven investment process, which the Company views as a competitive advantage. A tracking study conducted in the fall of 2004 shows that Janus continues to be one of America’s most well-known money managers.

Global Advisors Channel

The Global Advisors channel is organized to provide solutions for the advice-driven market, whether that advice comes from an asset manager, bank/trust, broker-dealer, independent planner, third-party administrator, insurance agent or sub-advisory relationship. It is building an integrated distribution platform to manage its $55.7 billion in assets, which constitute 40% of Janus’ total assets under management as of December 31, 2004. Janus has realigned the Global Advisors channel to focus resources on distributor needs rather than product/performance-driven sales and is targeting product platforms that tend to have high asset retention rates in order to enhance long-term returns and margin. Products are sold in this channel utilizing Janus’ JAS and JAD investment classes in particular. JAD offers multiple share classes (including A & R shares launched in September 2004) and is sold exclusively through financial intermediaries and retirement plans. The Global Advisors channel also seeks to distribute mutual funds and separate accounts through offshore relationships with international distributors.

Janus Institutional Asset Management Channel

The Janus Institutional Asset Management channel targets endowment/foundation, corporate and Taft-Hartley business. It consisted of $35.8 billion in assets as of December 31, 2004, representing 26% of total assets under management. The channel focuses on distribution through both consulting relationships and on a direct basis, with 75% of the assets in separately managed accounts and 25% in the institutional money market area. While the current separate account asset base is weighted heavily towards INTECH, the Company has also positioned several products within the Janus growth equity and core/blend disciplines that Janus believes are attractive to the institutional marketplace.

Investment Performance

The success of Janus’ Investment Management segment is dependent upon its ability to deliver strong and consistent investment performance across its various investment disciplines. For the one- and three-year periods ended December 31, 2004, approximately 60% and 68%, respectively, of the JIF funds (the Company’s primary

fund family) were ranked in the top two Lipper Analytics quartiles based upon total returns, compared to 55% and 38%, respectively, for the one- and three-year periods, ended December 31, 2003. In addition, half of the JIF funds carried a 4 or a 5 overall Morningstar Rating^tm, based on risk adjusted returns as of December 31, 2004. (See Exhibit 99.2 for complete Lipper and Morningstar rankings)

Janus’ investment teams are led by its Chief Investment Officer who is charged with driving investment performance across all disciplines and subsidiaries while maintaining a disciplined investment approach. Janus’ investment teams seek to identify strong businesses with sustainable competitive advantages and improving returns on capital that sell at a discount to what the teams believe they are worth. Janus believes its depth of research, its willingness to focus on investments where Janus has a research edge, and its commitment to delivering superior, long-term results for its clients are what differentiates Janus from its competitors.

The following graphs present the percentage of JIF funds in the top two Lipper Analytics quartiles based upon total returns on a one- and three-year basis (see Exhibit 99.2 for complete Lipper rankings, data presented reflects past performance which is no guarantee of future results):

Many of the funds managed by Janus have established impressive track records. Standouts include the Janus Twenty Fund, Janus Contrarian Fund, Janus Mercury Fund, Janus Orion Fund, Janus Enterprise Fund, Janus Core Equity Fund, Janus Growth and Income Fund, and Janus Venture Fund, which were in their top Lipper Analytics quartiles for the one- and three-year time periods ended December 31, 2004. The Janus Twenty Fund finished 2004 as the top-performing large-cap growth fund in the United States out of 652 funds in its Lipper Analytics category.

Since 2000, JCM has actively worked on increasing the number of research analysts and the number of stocks it covers. JCM now covers over 960 domestic and international stocks versus coverage of 500 stocks at the end of 2000.

As of January 1, 2005, 100% of Janus’ Denver-based portfolio managers have agreed to be compensated on a new plan that pays them based on longer term investment performance and consistency. In addition, the new plan ties long-term incentives to investment performance by embedding those incentives within the compensation plan. The new plan also provides for some degree of compensation reductions in the event of significant market deterioration.

COMPETITION

The investment management industry is relatively mature and saturated with competitors that provide services similar to Janus and often have undifferentiated capabilities. As such, Janus generally encounters significant competition in most areas of its business. Janus competes with mutual fund advisors, brokerage and investment banking firms, insurance companies, banks and other financial institutions, many of which are larger, have proprietary access to distribution, have a broader range of product choices and investment capabilities, and have greater capital resources. Janus’ ability to successfully compete in this market is based on its ability to achieve consistently strong investment performance; to maintain its current distribution relationships and to continue to

build new ones; to develop products with pricing that aligns well with its distribution channels and are attractive to underlying clients and investors; to offer multiple investment choices; to provide effective shareowner servicing; to retain and grow the confidence of its clients; and to develop and leverage its brand. Additionally, Janus’ ability to successfully compete with other investment management companies is highly dependent on its reputation and its relationship with clients. Janus’ involvement in the market timing investigation may have damaged its reputation with existing and possible future clients. Companies that were not implicated in the mutual fund investigation may have an advantage over Janus in their ability to attract new investments.

Competition in the mutual fund industry continues to increase as a result of greater flexibility afforded to banks and other financial institutions to sponsor mutual funds and distribute mutual fund shares, and as a result of consolidation and acquisition activity within the industry. Furthermore, the marketplace for investment products is rapidly changing; investors are becoming more sophisticated; the demand for and access to investment advice and information are becoming more widespread; and more investors are demanding investment vehicles that are customized to their personal situations. The extent of any adverse impact on mutual fund demand due to the increasing availability of alternative product types, such as hedge funds, exchange traded funds and separate accounts, is uncertain.

REGULATION

The investment management industry is subject to extensive federal and state laws and regulations intended to benefit or protect the shareholders of funds managed by Janus and advisory clients of Janus. These laws and regulations generally grant supervisory agencies broad administrative powers, including the power to limit or restrict the conduct of Janus’ business for failure to comply with the laws and regulations. Possible consequences or sanctions for such failure to comply include, but are not limited to, voiding of investment advisory and subadvisory agreements; the suspension of individual employees; limitations on engaging in certain lines of business for specified periods of time; and/or revocation of registrations, disgorgement of profits, censures and fines.

The Securities and Exchange Commission (“SEC”) is the federal agency generally responsible for administering the federal securities laws. Certain subsidiaries of Janus are registered investment advisors under the Investment Advisers Act of 1940 (the “Investment Advisers Act”) and, as such, are supervised by the SEC. The Investment Advisers Act requires registered investment advisors to comply with numerous obligations, including record-keeping requirements, operational procedures and disclosure obligations. Certain subsidiaries of Janus are also registered with regulatory authorities in various states, and thus are subject to the oversight and regulation of such states’ regulatory agencies.

Through its subsidiaries, Janus acts as advisor or subadvisor to both proprietary and non-proprietary mutual funds, which are registered with the SEC pursuant to the Investment Company 1940 Act, as amended (the “1940 Act”). Janus subsidiaries also serve as advisor or subadvisor to separately managed accounts and commingled accounts that are not required to register under the 1940 Act. Janus subsidiaries are governed by the Investment Advisers Act with respect to their advisory and subadvisory services. As an advisor or subadvisor to a registered investment company, Janus must comply with the requirements of the 1940 Act and related regulations. In addition, the advisor or subadvisor to a registered investment company generally has obligations with respect to the qualification of the registered investment company under the Internal Revenue Code of 1986, as amended (the “Code”).

Janus’ broker-dealer subsidiary is registered with the SEC under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and is a member firm of the National Association of Securities Dealers (the “NASD”), the securities industry’s self-regulatory organization. The NASD has established conduct rules for all securities transactions among broker-dealers and private investors, trading rules for the over-the-counter markets and operational rules for its member firms. The NASD conducts examinations of member firms, investigates possible violations of the federal securities laws and its own rules, and conducts disciplinary proceedings involving member firms and associated individuals. The NASD administers qualification testing for all securities principals and registered representatives.

Registered broker-dealers and members of the NASD are subject to net capital requirements, including those of various federal and state regulatory agencies. The net capital of Janus’ broker-dealer has consistently met or exceeded all minimum requirements. Many of the non-U.S. securities exchanges and regulatory authorities also have imposed rules (and others may impose rules) relating to capital requirements applicable to Janus’ foreign subsidiaries. These rules, which specify minimum capital requirements, are designed to measure general financial integrity and liquidity, and require that a minimum amount of assets be kept in relatively liquid form.

Janus’ broker-dealer is also subject to regulation under state law in some states. The federal securities laws prohibit states from imposing substantive requirements on broker-dealers that exceed those under federal law. This does not preclude the states from imposing registration requirements on broker-dealers that operate within their jurisdiction or from sanctioning these broker-dealers and their employees for engaging in misconduct.

Janus subsidiaries are also subject to the Employee Retirement Income Security Act of 1974 (“ERISA”) and related regulations to the extent they are considered “fiduciaries” under ERISA with respect to some of their clients. ERISA, related provisions of the Code, and regulations issued by the Department of Labor impose duties on persons who are fiduciaries under ERISA, and prohibit some transactions involving the assets of each ERISA plan which is a client of a Janus subsidiary, as well as some transactions by the fiduciaries (and several other related parties) to such plans.

Certain Janus subsidiaries are authorized to conduct investment business in international markets and are subject to foreign regulation. Globally, Janus is subject to the regulatory supervision and requirements of various agencies, including the Financial Services Authority in the United Kingdom, the Central Bank of Ireland, the Irish Financial Services Regulatory Authority, the Securities and Futures Commission of Hong Kong, the Financial Services Agency of Japan, and the Ontario and Alberta Securities Commission. These regulatory agencies have broad supervisory and disciplinary powers, including, among others, the power to temporarily or permanently revoke the authorization to carry on regulated business, the suspension of registered employees, censures and fines for both regulated businesses and their registered employees.

In connection with regulatory settlements reached in August 2004 with the Attorneys General of Colorado and New York, the Colorado Division of Securities and the SEC related to the market timing investigation (see Item 3), the following key obligations were imposed on Janus, among others:

RISK FACTORS

To the extent that Janus’ reputation was damaged in recent years as a result of inconsistent fund performance, being involved in the market timing investigation, or other regulatory inquiries and related litigation, net outflows may continue.

Janus’ inconsistent fund performance in recent years and its involvement in the market timing investigation and the related settlements and litigation (see Item 3) may have damaged its reputation with existing and future clients. Janus’ ability to generate positive net flows will partially depend on investor confidence. If Janus does not succeed in its efforts to restore or maintain investor confidence, net outflows may continue which may result in a decline in revenue and profitability.

Increased compliance and governance requirements imposed by the settlement agreements had a material effect on Janus, and the settlement requirements as well as changes in the regulatory environment, may continue to have a material effect on Janus in the future.

As a result of the regulatory settlements that Janus entered into in connection with the market timing investigations, regulators have imposed additional compliance and governance requirements on Janus. These requirements have increased Janus’ cost of doing business and may result in additional future operating expenses.

The regulatory environment in which Janus operates has changed and may continue to change. Janus may be adversely affected as a result of new or revised legislation or regulations or by changes in the interpretation or enforcement of existing laws and regulations. Compliance with these and other new reporting and operational requirements and regulations may increase the cost of operating mutual funds and related products.

The outcomes of civil lawsuits brought against Janus may have a material adverse effect on the business, financial condition and results of operations.

Janus, the Janus board of directors, certain of the Janus funds, the Janus fund’s trustees and certain (past and present) officers of Janus are named as defendants in coordinated proceedings in the U.S. District Court for the District of Maryland that involve allegations stemming from the market timing investigations. A separate action has been filed challenging the investment advisory fees charged by Janus to certain funds managed by Janus. These lawsuits, most of which are pleaded as class actions, seek unspecified compensatory and punitive damages. Although discovery has recently commenced, the consolidated case is in a preliminary stage, and, as a result, Janus is unable to determine the total potential effect that they may have on Janus’ results of operations, financial position and cash flows, or to estimate the range of potential losses that would be incurred if the plaintiffs in any of these actions were to prevail. Any settlement or judgment on the merits of these actions could have a material adverse effect on Janus’ liquidity, results of operations and financial condition.

Any decrease in assets under management would adversely affect Janus’ revenues and profits.

Almost all of Janus’ revenues are largely dependent on the total value and composition of assets under management. Any decrease in the value or amount of assets under management would cause a decline in revenues and operating results. Assets under management may decline for various reasons, many of which are not under Janus’ control. For any period in which revenues decline, profits and profit margins may decline by a greater proportion because certain expenses are fixed.

Other factors that could decrease assets under management (and, therefore, revenues) include the following:

Janus’ business is dependent on investment advisory agreements that are subject to termination, non-renewal or reductions in fees.

Most of Janus’ revenues are derived pursuant to investment advisory agreements with mutual funds and other separate and private accounts. The termination of, or failure to renew, one or more of these agreements or the reduction of the fee rates applicable to such agreements, could have a material adverse effect on revenues and profits. With respect to investment advisory agreements with mutual funds, these agreements may be terminated by either party with notice, or terminated in the event of an “assignment” (as defined in the 1940 Act), and must be approved and renewed annually by the independent members of each fund’s board of directors or trustees, or its shareowners, as required by law. In addition, the board of directors or trustees of certain funds and separate and private accounts generally may terminate these investment advisory agreements upon written notice for any reason and without penalty.

Janus’ inability to access clients through third-party distribution channels would have a material adverse effect on Janus’ financial condition, results of operations and business prospects.

Janus’ ability to market its mutual funds, subadvisory services and investment services is partly dependent on access to the client base of insurance companies, defined contribution plan administrators, securities firms, brokers, banks and other distribution channels. These companies generally offer their clients various investment products in addition to, and in competition with, Janus. Further, the private account business uses referrals from financial planners, professional investment advisors and other professionals. Janus cannot be certain that it will continue to have access to these third-party distribution channels or have an opportunity to offer some or all of its products through these channels. The inability to access clients through third-party distribution channels could have a material adverse effect on Janus’ ability to maintain or increase assets under management, its financial condition, results of operations or business prospects.

To increase its client base and assets under management, Janus is committing significant resources to expand its Global Advisors and Janus Institutional Asset Management channels. If Janus is unable to successfully compete in these channels, it could have a material adverse effect on Janus’ results of operations and financial condition.

If the Internal Revenue Service (“IRS”) were to successfully contend that the exchange transaction with DST did not qualify as a tax-free reorganization, Janus would face a significant tax liability.

On December 1, 2003, Janus exchanged 32.3 million common shares of DST for 100% of the shares of CGP (the “DST exchange transaction”). The transaction was implemented in reliance on opinions from Janus’ tax advisors that, although the matter is not free from doubt, the transaction should qualify as a tax-free exchange under Section 355 of the Code. See Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, Long-Term Liquidity and Capital Requirements, Other Sources of Liquidity.

The tax opinions received by Janus are not in any manner binding upon the IRS. In early 2003, representatives of Janus and DST engaged in preliminary discussions with representatives of the IRS National Office with respect to whether the IRS believed it would be likely to issue a private letter ruling on the DST exchange transaction if a request for such a private letter ruling were to be filed. Such discussions with the IRS included the initial information about the transaction with a limited set of facts. The representatives of the IRS indicated that it would be unlikely that the IRS would issue a private letter ruling on a transaction involving the exchange of a company having cash assets that represented such a high percentage of total asset value, as was the case with

respect to CGP. Following such preliminary discussions, neither DST nor Janus proceeded with a submission of a request for a private letter ruling or a submission of the information regarding the DST exchange transaction that ordinarily would be submitted with such a request. Instead, Janus and DST proceeded with the DST exchange transaction relying on the tax opinions of their respective tax advisors.

If the IRS were to successfully challenge the tax-free treatment of the DST exchange transaction, Janus would be deemed to have a taxable gain of up to $1.1 billion as of December 1, 2003, the effective date of the DST exchange transaction, resulting in an additional tax liability of up to $430 million. Janus would also be required to pay interest on such tax liability through the date of the tax payment. Such payment would have a material adverse effect on Janus’ liquidity, results of operations and financial condition.

If Janus is unable to attract and retain key personnel, it could have a material adverse effect on the Company’s future success.

The investment management business is highly dependent on the ability to attract, retain and motivate highly skilled, and often highly specialized, technical, executive and management personnel. The market for investment managers is extremely competitive and is increasingly characterized by the frequent movement of investment managers among different firms. In the past two years, Janus has experienced a greater level of turnover than its historically low levels. If such turnover continues and Janus is unable to replace key personnel with highly qualified individuals, it could have an adverse effect on Janus’ results of operations and financial condition. Additionally, the departure of an investment manager may also cause the loss of clients, as individual investment managers often maintain a strong, personal relationship with their clients, which could have an adverse effect on Janus’ results of operations and financial condition.

Janus’ business is vulnerable to failures in support systems and customer service functions that could lead to loss of customers or claims against Janus.

The ability to consistently and reliably obtain securities pricing information, process shareowner transactions and provide reports and other customer service to the shareowners of funds managed by Janus is essential to Janus’ operations. Any delays or inaccuracies in obtaining pricing information, processing shareowner transactions or providing reports, and any inadequacies in other customer service could alienate customers and potentially give rise to claims against Janus. Janus’ customer service capabilities, as well as Janus’ ability to obtain prompt and accurate securities pricing information and to process shareowner transactions and reports, is highly dependent on communications and information systems and on third-party vendors.

Although Janus has established disaster recovery plans, these systems could suffer failures or interruptions due to various natural or man-made causes, and the backup procedures and capabilities may not be adequate to avoid extended interruptions. Additionally, Janus places significant reliance on its automated customer service systems, thereby increasing the related risks if such systems were to fail. A failure of these systems could have an adverse effect on Janus’ results of operations and financial condition.

Anti-takeover provisions of Janus’ governing documents and the rights plan could delay or prevent a change in control of the Company.

Provisions of Janus’ certificate of incorporation, bylaws and shareholders’ rights plan might have the effect of discouraging or delaying certain transactions involving an actual or potential change in control of Janus. For example, Janus’ certificate of incorporation and bylaws authorize blank series preferred stock, require a supermajority stockholder vote for approval of certain types of business combinations, establish a staggered board of directors and impose certain procedural and other requirements for some corporate actions. The shareholders’ rights plan could significantly dilute the interest in Janus of persons seeking to acquire control without prior approval of Janus’ Board of Directors.

Janus has material goodwill and intangible assets, which are subject to potential impairment.

Intangible assets and goodwill totaled $2.4 billion at December 31, 2004. Goodwill and intangible assets require significant management estimates and judgment, including the valuation and life determination in connection

with the initial purchase price allocation and the ongoing evaluation for impairment. Any impairment of goodwill and intangibles could have a material adverse effect on Janus’ results of operations. For additional information see Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, Critical Accounting Policies and Estimates.

The Printing and Fulfillment segment operates in a highly competitive industry.

RSG operates in a highly competitive industry. Competitive factors include not only the speed and accuracy with which RSG can meet customer needs, but also the price and quality of such services. Many of RSG’s competitors have an advantage in the fact that they are larger, have greater resources and offer a wider range of services. If RSG is unsuccessful in this market, it may not be able to retain current clients or grow the business through the addition of new clients, which could have an adverse effect on Janus’ results of operations and financial condition.

EMPLOYEES

As of December 31, 2004, Janus had approximately 1,000 full-time employees in the Investment Management segment and approximately 465 full-time employees in the Printing and Fulfillment segment. No Janus employees are represented by a labor union.

AVAILABLE INFORMATION

Copies of Janus’ filings with the SEC can be obtained from the SEC’s Public Reference Room at 450 Fifth Street, N.W., 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 (303) 691-3905. 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 and Nominating and Corporate Governance committees) are available on its website (www.Janus.com), and printed copies are available to any shareholder upon request by calling Janus at 303-691-3905. Any future amendments to or waivers of the Officer Code will be posted to the Janus website.

ADDITIONAL FINANCIAL INFORMATION

See additional financial information on segments and geographical areas in Part II, Item 8, Financial Statements and Supplementary Data, Note 20 — Segment and Geographic Information, of this Form 10-K.

Janus’ headquarters are located in Denver, Colorado. Janus’ Investment Management segment leases office space from non-affiliated companies for administrative, investment and shareowner servicing operations in Denver, Colorado; New York, New York; Oakland, California; Princeton, New Jersey; Palm Beach Gardens, Florida; the United Kingdom; Hong Kong; Tokyo; and Milan.

The Printing and Fulfillment segment leases office space and equipment from non-affiliated companies for administrative, warehousing and production operations in Melville, New York; Kansas City, Missouri; Chicago, Illinois; and Sacramento, California.

In the opinion of management, the space and equipment owned or leased by the Company are adequate for existing operating needs.

Market Timing Investigation — Regulatory Settlements and Litigation

In September 2003, the SEC and the Office of the New York State Attorney General (“NYAG”) publicly announced that they were investigating trading practices in the mutual fund industry. The investigations were prompted by the NYAG’s settlement with a hedge fund, Canary Capital, which allegedly engaged in irregular trading practices with certain mutual fund companies. While Janus was not named as a defendant in the NYAG complaint against the hedge fund, Janus was mentioned in the complaint as having allowed Canary Capital to “market time” certain Janus funds. Market timing is an investment technique involving frequent short-term trading of mutual fund shares that is designed to exploit market movements or inefficiencies in the way mutual fund companies price their shares. The NYAG complaint against Canary Capital alleged that this practice is in contradiction to policies stated in the prospectuses for certain Janus funds.

In August 2004, Janus reached final settlements with the Attorneys General of Colorado and New York, the Colorado Division of Securities and the SEC. Pursuant to these settlement agreements, Janus consented to the entry of a cease and desist order by the SEC, as well as consent orders or assurances of discontinuance by the New York and Colorado state authorities. In accordance with the agreements, Janus paid $50.0 million in restoration to compensate investors for the adverse effects of frequent trading and $50.0 million in civil penalties. In addition, as part of its required undertakings in the settlements, Janus reduced its management fee charged to most of its mutual funds, effective July 1, 2004. The reduction led to reduced management fee revenue in the amount of $11.7 million over the last half of 2004. Certain other undertakings required in the settlements may result in increased general and administrative expenses in future periods, although the significance of such expenses cannot be determined at this time. Janus also paid $1.2 million to the Colorado Attorney General to be used for investor education and to reimburse that office for the costs of their investigation. As discussed above, the Company has agreed to pay $50 million in “restitution or disgorgement” to funds and/or fund investors as part of its settlement with the SEC and other regulatory agencies. The Company believes that this amount is sufficient to compensate affected funds and/or fund investors for any losses attributable to discretionary frequent trading, although there can be no assurance that this amount will be available or adequate to satisfy any liability arising out of the civil actions in whole or in part.

The 2004 charge for the mutual fund investigation of $65.0 million includes $55.7 million of previously unaccrued civil penalties and restoration costs and $9.3 million of legal fees and other administrative expenses related to the investigation. The 2003 charge of $71.8 million includes $45.5 million for estimated civil penalties and restitution costs, and $26.3 million for legal fees, shareholder communications and other administrative expenses related to the investigation. Certain expenses related to these issues may be recoverable from Janus’ insurance carriers, but Janus is unable to assess any possible insurance reimbursement at this time.

Subsequent to the initiation of the investigations by the NYAG and the SEC, more than 60 civil lawsuits were filed in various state and federal courts against Janus, and related entities and individuals, based on allegations similar to those contained in the NYAG complaint against Canary Capital. In general, these lawsuits allege that Janus allowed certain hedge funds and other investors to engage in market timing trades in Janus funds. Such lawsuits assert a variety of theories for recovery, including, but not limited to, alleged violations of the federal securities laws, other federal statutes (including ERISA and RICO), and various common law doctrines.

Almost all of the market timing lawsuits filed against Janus that were filed in, or removed to, federal court have been finally or conditionally transferred to the U.S. District Court in Baltimore, Maryland, for coordinated proceedings (Case Number MDL No. 1586, 04-MD-15863, U.S. District Court for the District of Maryland). On September 29, 2004, five consolidated amended complaints were filed in that court. These complaints are the operative complaints in the coordinated proceedings and, as a practical matter, supersede the previously filed complaints. The five complaints include (i) claims by a putative class of Janus fund investors asserting claims on behalf of the investor class, (ii) derivative claims by investors in the Janus funds ostensibly on behalf of the Janus

funds, (iii) claims on behalf of participants in the Janus 401(k) plan, (iv) claims brought on behalf of shareholders of Janus Capital Group Inc. on a derivative basis against the Board of Directors of Janus Capital Group Inc., and (v) claims by a putative class of shareholders of Janus Capital Group Inc. asserting claims on behalf of the shareholders. Each of the five complaints names Janus Capital Group Inc. and/or Janus Capital Management LLC as a defendant. In addition, the following are named as defendants in one or more of the actions: Janus Investment Fund, Janus Aspen Series, Janus Adviser Series, Janus Distributors LLC, INTECH, Bay Isle, PWM, the Advisory Committee of the Janus 401(k) plan, and the current or former directors of Janus Capital Group Inc.

One market timing lawsuit, based on allegations that Janus failed adequately to implement fair value pricing was remanded to the Illinois state circuit court for Madison County, Illinois, and is not currently subject to federal transfer procedures. Janus has appealed the decision to the Seventh Circuit Court of Appeals. In early 2005, another lawsuit was filed in the State of Kansas alleging violations under Kansas law based on Janus’ involvement in the market timing allegations (Allison v. Janus, et al. 05CV00873).

Excessive Fee Litigation

Three lawsuits were filed in April 2004 against Janus and related entities challenging the investment advisory fees charged by Janus to certain funds managed by Janus. These actions were filed by fund investors in federal courts in the Western District of Missouri (Fleisher, et al. v. Janus Capital Management, LLC, et al., Case Number 04-4062-SOW) and the Southern District of Illinois (Sins, et al. v. Janus Capital Management, LLC, et al., Case Number 04-WM-1647), and in state court in Madison County, Illinois (Dressel, et al. v. Janus Capital Corporation, Case Number 04-00303-DRH). Fleisher and Sins asserted breach of fiduciary duty under Section 36(b) of the Investment Company Act, and Dressel asserted a claim for breach of contract. The Dressel action has been voluntarily dismissed by the plaintiff, and the Fleisher and Sins actions have been consolidated and transferred to the U.S. District Court for the District of Colorado. Discovery is required to be completed by November 2005. The plaintiffs in the consolidated case seek declaratory and injunctive relief and an unspecified amount of damages. At this early stage of the litigation, it is not possible to estimate the expense or exposure, if any, that they may represent.

Class Action Claims Litigation

On January 11, 2005, Janus and related entities were named as defendants in a class action complaint relating to the submission of claims as class members under numerous class actions. Davis v. Bailey, et al. (Case Number 05-MK-42) was filed in the U.S. District Court for the District of Colorado. The Davis action was filed on behalf of fund investors and alleges that Janus failed to make appropriate filings to ensure that the Janus mutual funds participated in various class action settlements, and that Janus and others thereby breached fiduciary duties owed to mutual fund shareholders. The action asserts claims under Sections 36(a) and (b), and 47(b) of the Investment Company Act and for breach of fiduciary duty.

Management believes that the claims made in the civil actions described above (market timing litigation, excessive fee litigation and the class action claims litigation) have little or no merit and intends to defend against them. Although there can be no assurances, at this time management believes, based on information currently available, that it is not probable that the ultimate outcome of each of the actions will have a material adverse effect on the consolidated financial condition of the Company, although they might be material to the operating results for a particular period depending, in part, upon operating results for that period.

Other Matters

In addition to the matters described above, in the normal course of business, the Company has been named, from time to time, as a defendant or respondent in various legal actions, including arbitrations, class actions and other litigation, arising in connection with its business activities. Certain of these legal actions include claims for substantial compensatory and/or punitive damages or claims for indeterminate amounts of damages. In view of the inherent difficulty of predicting the outcome of such matters, particularly in cases in which claimants seek

substantial or indeterminate damages, the Company cannot predict with certainty the eventual loss or range of loss related to such matters.

No matters were submitted to a vote of security holders during the three-month period ended December 31, 2004.

PART II

Janus’ common stock is traded on the New York Stock Exchange (“NYSE”) (symbol: JNS). The following table sets forth the high and low sale and closing prices as reported on the NYSE composite tape for each completed quarter since January 1, 2003.

On March 4, 2005, there were approximately 4,208 holders of record of Janus’ outstanding common stock.

Janus declared an annual $0.04 per share dividend in the second quarter of 2004, 2003 and 2002. Janus anticipates paying an annual $0.04 per share dividend in 2005. The payment of cash dividends is within the discretion of Janus’ Board of Directors and will depend on many other factors, including, but not limited to, Janus’ results of operations, financial condition, capital requirements, restrictions imposed by financing arrangements, general business conditions and legal requirements.

On July 20, 2004, the Janus Board of Directors agreed to a new authorization of up to $500 million to repurchase shares of Janus common stock from the open market through December 31, 2006. The previous authorization, which provided for the repurchase of up to 17.8 million shares, expired on July 25, 2004.

For the year ended December 31, 2004, Janus repurchased 986,484 shares as part of a share withholding program (established under Rule 10b5-1 of the Exchange Act) to satisfy employees’ income tax liabilities attributable to the vesting of restricted stock awards. These repurchases were made directly from Janus employees.

In January and February 2005, Janus repurchased an additional 4.3 million shares at a total price of $61.9 million. The Company cautions that there are no assurances that any future repurchases will actually occur.

The selected financial data below should be read in conjunction with Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, of this Form 10-K and the consolidated financial statements and the related notes thereto, and Part II, Item 8, Financial Statements and Supplementary Data, of this Form 10-K. The amounts shown have been restated to reflect the fair value of stock options associated with
the adoption of Statement of Financial Accounting Standards No. 123R, “Share-Based Payment” (“SFAS No. 123R”).

OVERVIEW OF OPERATING RESULTS

Business

Janus’ revenue is principally derived from providing investment advisory services to individual and institutional investors, primarily through a diverse set of U.S. and international stock, bond and money market mutual funds and other investment products. Revenue is largely dependent on the total value and composition of assets under management, which include domestic and international equity and debt securities. Accordingly, fluctuations in the financial markets and in the composition of assets under management directly affect revenue and operating results. A smaller portion of Janus’ revenue arises from digital and offset printing and fulfillment services.

Total assets under management ended the year at $139.0 billion, including $128.2 billion in equity and bond mutual funds and $10.8 billion in money market funds. Positive equity market returns in 2004 resulted in market appreciation of $13.7 billion, which was offset by net outflows of $25.5 billion ($20.6 billion net long-term outflows), primarily concentrated in Janus’ growth equity products. Although 2004 net outflows increased as compared to 2003, more than 80% of the total occurred during the first half of 2004. During the second half of the year, the following positive trends emerged:

During the second half of 2004, Janus renewed its investment in brand advertising and expanded its sales efforts by realigning its distribution channels and adding experienced sales professionals. Janus believes that these measures, combined with continued strong investment performance, should improve its gross sales and net flows in future years.

2004 Overview — A Year of Rebuilding

During 2004, after two very challenging years, Janus resolved its regulatory issues and made significant progress on its strategic priorities, as follows:

2005 Initiatives

The focus for Janus in 2005 includes:

INVESTMENT MANAGEMENT SEGMENT

Assets Under Management and Flows

The following table and graph present the components of the change in Janus’ annual and quarterly assets under management in 2004 and 2003 (in billions):

Quarterly Flows (Long-Term Assets,

Non-Money Market)

2004

Janus’ assets under management totaled $139.0 billion at December 31, 2004, a decrease of $12.5 billion, or 8.3%, in comparison to $151.5 billion at the end of 2003. Positive equity market returns in 2004 resulted in market appreciation of $13.7 billion, which was offset by net outflows of $25.5 billion and $0.6 billion from the disposition of Bay Isle’s Private Client Asset Management division.

As previously mentioned, the first half of 2004 was an especially challenging time for gross sales, principally due to the uncertainty surrounding the market timing investigation (see Item 3). Year over year, long-term gross sales (excluding money market funds) declined 34%.

When Janus announced its regulatory settlement in April 2004, two important developments followed: a two-year trend of redemptions began to stabilize and sales moderately increased. Compared to the first half of 2004, gross redemptions in the second half of the year fell to their lowest level in six years and gross sales of long-term products (excluding money market funds) increased 11%. These improving trends led to $4.8 billion of long-term net outflows in the second half of 2004 compared to $15.8 billion during the first half of the year. Management often is not able to determine the specific reasons why shareholders redeem or invest with Janus; however these improving trends may have been a result of improving investment performance, the regulatory settlement or increased brand advertising.

INTECH delivered another strong year in 2004 in terms of investment performance and net flows. Assets in the mathematical/quantitative discipline, managed by INTECH, increased 80% from $14.3 billion at December 31, 2003, to $25.8 billion at December 31, 2004, as a result of $8.6 billion of net sales and $2.9 billion of market appreciation.

2003

Janus’ assets under management totaled $151.5 billion at December 31, 2003, an increase of $13.1 billion, or 9.5%, as compared to assets under management of $138.4 billion at the end of 2002. Strong equity market returns resulted in market appreciation of $30.7 billion, which was partially offset by $16.1 billion of net outflows and $1.5 billion from the disposition of a small money manager in the United Kingdom.

During 2003, Janus experienced an increase in the net outflows of long-term assets (excluding money market funds), subsequent to the announcement of the market timing investigation in September 2003. During the first

nine months of 2003, Janus experienced net outflows of long-term assets of $6.4 billion compared with $7.9 billion during the fourth quarter of 2003.

Of the total net outflows during 2003, $16.3 billion came from Janus’ growth equity products. These outflows were offset slightly by $4.4 billion of net inflows into Janus’ mathematical/quantitative discipline.

Revenue and Expenses

Revenue is largely dependent on the total value and composition of assets under management, which include domestic and international equity and debt securities. Assets under management are affected by new money investments or redemptions and by market appreciation or depreciation. Factors that affect the level of net fund sales or redemptions include competitive fund performance, marketing efforts, reputation, and introduction and market reception of new products. Market appreciation and depreciation reflect fluctuations in investment values. Investment management fees and shareholder servicing fees 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, subadvised relationship and separate accounts. The following graph depicts the direct relationship between average assets under management and investment management revenue:

Janus’ operating expense structure is composed of variable costs, which tend to fluctuate directly with average assets under management and revenue, and fixed costs, which generally do not vary with assets under management. Examples of variable costs include incentive compensation for portfolio management and sales personnel, the companywide bonus plans and third-party distribution costs. Fixed expenses comprise primarily of base salaries; stock-based compensation; marketing and fulfillment; depreciation and amortization; and general, administrative and occupancy costs.

Investment Management Results

2004 Compared to 2003

Average assets under management in 2004 decreased 4.4% to $137.8 billion from $144.1 billion in 2003. Investment management revenue decreased 6.1% to $733.8 million, consistent with the decrease in average assets under management and the July 1, 2004, settlement-mandated reduction in management fees, which totaled $11.7 million over the last half of 2004.

Shareowner servicing fees and other revenue declined $18.0 million to $188.0 million, due primarily to decreases in money market administration fees and transfer agent servicing fees. Money market administration fees, which are calculated based on average assets under management in Janus’ money market funds, declined $8.0 million, or 30.6%, as a direct result of a similar decline in average money market assets under management. Transfer agent fees, which are calculated based on average JIF assets under management, declined $10.5 million, or 7.1%, due to the same percentage decrease in average JIF assets.

Employee compensation and benefits increased $22.5 million, primarily due to severance charges and increased fund performance-based incentive compensation. Severance in 2004 increased $16.1 million as a result of the resignation or retirement of several senior executives and a portfolio manager. Based on contracts entered into in prior years, compensation for investment personnel generally was based on the level of assets they managed combined with their relative fund performance. Improved relative investment performance, offset by a decline in asset-based compensation, resulted in a net increase of $12.5 million in comparison to last year. The increase in performance-based compensation was offset by a decline in the annual companywide discretionary bonus plan of $4.3 million.

Effective January 1, 2005, Janus’ 21 Denver-based portfolio managers agreed to a new compensation plan that is tied to one- and three-year fund performance, with greater emphasis on three-year results. Additionally, a significant portion of the portfolio managers’ variable compensation will be earned and paid in a combination of Janus equity grants and Janus mutual funds, which will vest in future years.

In consideration of the portfolio managers’ early adoption of the new compensation plan to replace prior contractual arrangements, the 2004 annual long-term incentive award to portfolio managers, which was scheduled to be granted in early 2005, was awarded in vested Janus common stock on December 31, 2004. A charge of $15.0 million was recorded in the fourth quarter 2004 for this accelerated vesting. This, combined with the contractual-based acceleration of vesting related to the resignation and retirement of several senior executives and a portfolio manager in 2004, led to the $20.4 million increase of stock-based compensation. In 2004, Janus adopted SFAS No. 123R and elected to restate its financial statements to present the historical fair value of stock options. Accordingly, the financial results include stock option expense of $20.8 million, $11.5 million and $12.0 million for 2004, 2003 and 2002, respectively.

Marketing expense increased $7.3 million from the new television and print advertising campaign launched during the second half of 2004, designed to re-establish the Janus brand in the marketplace. In 2005, to continue building on the Janus brand and reinforcing Janus’ research expertise, management intends to increase brand advertising to approximately $23.0 million, an increase of $10.0 million over 2004.

Distribution expense decreased 12.8%, or $18.3 million, as a result of a 16.3% decline 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 expense decreased $18.7 million from significant technology-related capital assets becoming fully depreciated during the second half of 2003 and a decline in the amortization of deferred commissions of approximately $7.1 million from lower sales of B shares in Europe and Asia. Janus generally amortizes commissions paid to financial intermediaries related to the sale of certain mutual fund shares (primarily Janus World Fund B Shares) over four years.

General and administrative expenses increased $18.0 million compared to the prior year, primarily due to 2004 cash payments for certain third-party products and services previously acquired with soft dollars; increased occupancy-related costs from the company’s new headquarters in Denver; and higher corporate insurance, internal audit services and legal costs.

Restructuring and impairments increased $12.5 million due to a $14.2 million write-down of intangible assets associated with termination notices received from certain subadvised accounts combined with an $8.2 million occupancy-related charge related to vacant space in Austin, Texas. In 2003, Janus recorded intangible asset write-downs of $9.3 million from the termination of certain subadvised accounts. See Part II, Item 8, Note 10 for a summary of all restructuring accruals.

In August 2004, Janus reached final settlements with the Attorneys General of Colorado and New York, the Colorado Division of Securities and the SEC. In conjunction with the settlements, Janus recorded charges of $65.0 million in 2004 and $71.8 million in 2003 for civil penalties, restoration costs, legal and other administrative expenses related to the investigation. As a requirement of the settlement with the SEC, Janus has hired an Independent Distribution Consultant to oversee the disbursement of restitution to Janus fund shareholders.

Through two separate transactions in 2003 and 2004, Janus disposed of its 33% ownership interest in DST. On December 1, 2003, Janus exchanged 32.3 million common shares of DST for 100% of the stock of CGP, a corporation that includes a printing and graphics design business with a value of $115.0 million, and $999.3 million in cash. This transaction resulted in a $631.3 million gain and the reversal of previously recorded deferred income taxes of $176.4 million (see Other Liquidity Issues discussion). On June 16, 2004, Janus sold its remaining 7.4 million shares of DST common stock to an unrelated third party. The sale resulted in a gain of $228.0 million. The Company received cash proceeds of $336.2 million, or $208.0 million net of income taxes.

Interest expense declined $22.1 million from the debt restructuring completed in the second quarter 2004. In April 2004, Janus issued $527.4 million of 6.119% Senior Notes (“6.119% Notes”) due April 15, 2014, in exchange for $465.1 million of Senior Notes (compose $286.9 million of the 7.000% Senior Notes due 2006 and $178.0 million of the 7.750% Senior Notes due 2009). During May 2004, Janus’ wholly-owned subsidiary, CGP, exercised its right to repurchase $445.0 million of the 6.119% Notes. This, combined with the April 30, 2004, repurchase of $84.0 million of Liquid Yield Option Notes, reduced Janus’ consolidated debt to approximately $377.9 million, and is expected to reduce annual interest expense by approximately $30.0 million. As a result of the debt extinguishment, Janus incurred a non-operating charge of $55.5 million primarily related to the premium paid to exchange the old notes for new notes given declines in interest rates.

Janus’ effective tax rate in 2004 was slightly below the combined federal and state rates due to a reduction of tax expense related to the reversal of a $22.5 million tax contingency, partially offset by the civil penalty recorded as part of the regulatory settlement for which Janus does not receive a tax deduction.

2003 Compared to 2002

Average assets under management in 2003 declined 11.5% to $144.1 billion from $162.8 billion in 2002. Investment management and shareowner servicing fees decreased 12.1% to $987.5 million from $1,123.2 million in 2002, reflecting the decline in average assets under management.

Employee compensation and benefits decreased $14.8 million, or 6.1%. Because of employee reductions which reduced average headcount by approximately 300 employees year over year, base salaries and benefits declined $14.8 million. Incentive compensation, which tends to vary with average assets and includes annual firmwide bonuses and payments made to portfolio management and sales professionals, declined $12.4 million due to the reduction in average assets under management, reduced headcount and fewer relative fund performance targets achieved. These declines were partially offset by $12.9 million of retention bonuses and severance charges incurred in 2003. Final retention bonuses were paid to certain Stilwell Financial Inc. (“Stilwell”) and Berger Financial Group LLC (“Berger”) employees as part of the Reorganization (as defined in Part II, Item 8, Financial Statements and Supplementary Data, Note 10 — Restructuring and Asset Impairment Charges) for successfully transitioning responsibilities to Janus management, while severance costs were related to employee reductions at JCM.

Stock-based compensation decreased $21.0 million to $90.2 million due to a $26.0 million third quarter 2002 charge related to a change in vesting schedule for restricted stock awards from a seven-year cliff vest to a five-year pro rata schedule.

Marketing and fulfillment expense fell 49.3% resulting from a decline in advertising expenditures of $8.5 million.

Distribution expense fell 17.7%, or $30.8 million, from the decline in assets under management distributed through third-party intermediaries.

General, administrative and occupancy expenses declined $5.4 million, or 4.3%, due to the reduction in headcount and facility closures, offset by increases in corporate insurance rates.

PRINTING AND FULFILLMENT SEGMENT

The operating business of CGP, RSG, provides clients with digital and offset printing and fulfillment services. The digital operation focuses on providing clients with communication solutions using leading-edge print-on-demand technology and software applications that support the process of improving the effectiveness of customer

communication through personalization and customization. The offset printing operations provide customers with full-service graphic and design solutions through prepress services and high-speed, high-quality offset printing, including direct marketing packages, brochures, preprinted base stock and collateral pieces.

Results of Operations

Included within cost of printing and fulfillment are those expenses that are directly related to production, including salaries, materials, rent on production facilities, lease payments for equipment and depreciation on owned production equipment. Also included are reimbursable expenses incurred by RSG on behalf of its customers. This expense and the corresponding reimbursement are reported on a gross basis as revenue and a component of cost of printing and fulfillment.

Prior to Janus’ acquisition of RSG at the end of 2003, RSG’s operations were included within a division of DST. During 2004, RSG successfully established its operations and management team as a stand-alone Janus subsidiary. Through the process of evaluating its operating structure in 2004, RSG decided to close one non-strategic facility, resulting in a $2.2 million charge in 2004. The closure of this facility combined with the investment of $16.6 million in new digital print technology and custom software development should improve RSG’s competitive position in the printing and fulfillment industry.

A key part of RSG’s competitive strategy is to differentiate its services by providing customized services and software to its clients. This strategy has resulted in strong customer relationships, as evidenced by the fact that no significant clients were lost during 2004. Additionally, RSG has managed to grow its client base in 2004 by further penetrating new industries, including the healthcare industry.

LIQUIDITY AND CAPITAL RESOURCES

Cash Flows

A summary of cash flow data for the years ended December 31, is as follows (in millions):

2004 Cash Flows

Janus’ cash flow from operations historically has been positive and sufficient to fund ordinary operations and capital expenditures. The decline in 2004 was driven by payments related to the regulatory settlement and an income tax payment related to the sale of 7.4 million shares of DST in 2004.

Net cash used for investing activities in 2004 includes $307.8 million of investments in various debt securities, offset by proceeds of $336.2 million received from the sale of DST common shares.

Cash used for financing activities in 2004 includes the repayment of $529.0 million of long-term debt and common stock repurchases of $99.7 million.

2003 Cash Flows

Janus generated $260.2 million of cash flows from operations in 2003 compared to $280.7 million in 2002. This decline of $20.5 million was attributable to the decrease in operating income, partially offset by changes in working capital items, which vary from year to year based on the timing of payments.

Cash provided by investing activities of $837.1 million in 2003 related to proceeds earned from the disposition of DST common shares of $990.2 million, offset by investments in advised funds, the acquisition of the Berger minority interest, the exercise of a call option to purchase an additional 27.5% of INTECH and the acquisition of a 30% ownership interest in PWM. In addition to the investing activities mentioned above, capital expenditures in 2003 increased to $23.9 million from $16.0 million in 2002 primarily related to the planned relocation of the Company’s headquarters in Denver, Colorado, in 2004.

Cash used in financing activities totaled $27.0 million in 2003 compared to $287.2 million in 2002. The decline is related to the net retirement in 2002 of $258.8 million of long-term debt through the repayment of the convertible notes and the issuance of Senior Notes.

Short-Term Liquidity and Capital Requirements

Janus believes cash from operations should be sufficient to satisfy its short-term operating and capital requirements. Expected short-term uses of cash include ongoing common stock repurchases, capital expenditures, income tax payments and interest payments on outstanding debt.

2002 and 2001 Restructurings

During 2002 and 2001 Janus completed two restructurings that included the reduction of headcount and closure of facilities. With the exception of long-term lease liabilities associated with the closure of facilities, all remaining liabilities associated with these restructurings were paid by the second quarter 2003. Net of payments Janus expects to receive from unrelated third parties who have subleased a portion of the vacant space, Janus expects to pay $2.9 million within the next 12 months and $10.2 million thereafter to complete its obligation related to such facilities.

Common Stock Repurchase Program

On July 20, 2004, the Janus Board of Directors authorized the expenditure of up to $500 million to repurchase shares of Janus common stock. The stock repurchase program expires December 31, 2006. During 2004, the Company spent $83.6 million under this authorization on Janus common stock repurchases. In January and February 2005, Janus repurchased an additional 4.3 million shares at a total price of $61.9 million.

Long-Term Liquidity and Capital Requirements

Expected long-term commitments at December 31, 2004, include the following (in millions):

The information presented above does not include operating obligations that are of a normal, recurring nature or capital expenditures that will be committed to in the normal course of business. Janus expects to fund these obligations from future cash flow generated from normal operations.

Operating lease obligations are presented net of estimated sublease income of $21.3 million.

Janus has the right to purchase an additional 14% ownership in PWM each year beginning in 2005 at a price equal to the fair market value on each respective call date. The above schedule does not include any estimated payments related to these call rights as Janus is not obligated to exercise its call and the price is unknown at this time.

Under certain situations involving the departure of the minority owners of INTECH, such owners have the right to put their shares of INTECH at fair market value and Janus has the right to call those shares at fair market value, if minority owners do not exercise their put right. In certain circumstances, Janus may purchase such minority interest using shares of Janus common stock. Based on the recent growth of INTECH, the minority interest of INTECH would likely be worth in excess of $100 million if Janus were required to repurchase those shares today. The long-term commitments schedule above does not include any estimate for the purchase of the INTECH minority due to the uncertain nature of this possible obligation.

Other Liquidity Issues

DST Exchange Transaction

On December 1, 2003, Janus exchanged 32.3 million common shares of DST for 100% of the stock of CGP, a corporation that includes a printing and graphics design business with a value of $115.0 million, and $999.3 million in cash. The share disposition resulted in a $631.3 million gain and the reversal of previously recorded deferred income taxes of $176.4 million, as the transaction was implemented in reliance on opinions from Janus’ tax advisors that, although the matter is not free from doubt, the transaction should qualify as a tax-free exchange under Section 355 of the Code. No advance ruling on the transaction was obtained from the IRS. These opinions were based on certain representations made by Janus, CGP and DST, including representations by Janus and CGP that it was the intention of CGP that the cash (approximately $1 billion) would be used in the manner described below. Furthermore, for purposes of such tax opinions, Janus and CGP represented that, for a period of at least three years, CGP would not distribute or loan to Janus or any Janus affiliate any of CGP’s cash, any assets acquired with such cash, or any earnings from such cash or assets. The tax opinions received by Janus and DST are not in any manner binding upon the IRS. Based on the representations made to its tax advisors, the following are possible future uses of the CGP funds and actions taken as of December 31, 2004:

Other Sources of Liquidity

Credit Facility

On October 20, 2004, the Company entered into a $200 million 364-Day Competitive Advance and Revolving Credit Facility Agreement (the “Facility”) with a syndicate of banks. The facility contains a number of financial covenants such as a specified financing leverage, minimum net worth, earnings and fixed charge coverage. Janus was in compliance with all covenants at December 31, 2004.

Shelf Registration

The Company has effective a Shelf Registration Statement with the SEC (“Shelf Registration”), under which Janus could issue up to $800 million in aggregate issue price of Janus’ common stock, preferred stock and debt securities. In July 2002, Janus issued $200 million of Senior Notes under the Shelf Registration. At December 31, 2004, $600 million of securities were available for issuance under the Shelf Registration, subject to the covenant limitations pursuant to the Facility.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Janus’ consolidated financial statements and accompanying notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods.

Janus continually evaluates the accounting policies and estimates used to prepare the consolidated financial statements. In general, management’s estimates are based on historical experience, information from third-party professionals and various other assumptions that are believed to be reasonable under current facts and circumstances. Actual results could differ from those estimates made by management. Janus’ critical accounting policies and estimates include accounting for income taxes, accounting for intangible assets and goodwill, and equity compensation.

Accounting for Income Taxes

Significant management judgment is required in developing Janus’ provision for income taxes, including the valuation allowances that might be required against deferred tax assets and the evaluation of various income tax contingencies.

Valuation Allowance

Janus has not recorded a valuation allowance on its deferred tax assets as of December 31, 2004, based on management’s belief that operating income and capital gains will, more likely than not, be sufficient to realize the benefit of these assets over time. In the event that actual results differ from these estimates, or if Janus’ historical trend of positive operating income changes, Janus may be required to record a valuation allowance on deferred tax assets, which could have a material adverse effect on Janus’ consolidated financial condition and results of operations.

Income Tax Contingencies

At December 31, 2004, Janus has an accrued liability of $58.1 million related to tax contingencies for issues raised by various taxing authorities. At any one time, tax returns filed in previous years are subject to audit by various taxing authorities. As a result of these audits and negotiations, additional tax assessments may be proposed.

DST Exchange Transaction

In 2003, Janus disposed of 32.3 million shares of DST, which resulted in a $631.3 million gain and the reversal of previously recorded deferred income taxes of $176.4 million. The reversal of income taxes occurred as the transaction was implemented in reliance on opinions from Janus’ tax advisors that, although the matter is not free from doubt, the transaction should qualify as a tax-free exchange under Section 355 of the Code. Additional deferred income taxes were not provided for the transaction because the Company believes it will ultimately realize its investment in CGP in a tax-free manner. If the IRS were to successfully challenge the tax-free treatment of the transaction, Janus would be deemed to have a taxable gain of up to $1.1 billion, resulting in an additional tax liability of up to $430.0 million.

Accounting for Intangible Assets and Goodwill

Intangibles assets and goodwill comprise $2,399.4 million, or 63.8%, of total assets at December 31, 2004. Goodwill and intangible assets require significant management estimates and judgment, including the valuation and life determination in connection with the initial purchase price allocation and the ongoing evaluation for impairment.

In connection with the purchase price allocation of acquisitions, Janus will rely on in-house financial expertise or utilize a third-party expert, if considered necessary. Valuations generally rely on management’s estimates and judgments as to growth rates and operating margins over a range of possible assumptions for various products, distribution channels and business strategies.

In addition, SFAS No. 142 “Goodwill and Other Intangible Assets,” requires that goodwill and indefinite-lived intangibles be tested at least annually for impairment. Goodwill is tested by comparing the fair value of the “reporting unit” associated with the goodwill to the reporting unit’s recorded value. If the fair value of the reporting unit is less than its recorded value, it would generally indicate an impairment of goodwill. Indefinite-lived intangible assets are tested for impairment annually by comparing its fair value to the carrying amount of the asset.

To complete the annual test for potential impairment of intangible assets and goodwill, Janus considers the following: performance compared to peers; significant changes in the underlying business and products of the reporting units; material and ongoing negative industry or economic trends; and/or other factors specific to each asset or reporting unit. Due to the significance of the identified intangible assets and goodwill to Janus’ consolidated balance sheet, any impairment charge could have a material adverse effect on the Company’s financial condition and results of operations. At December 31, 2004, the majority of Janus’ goodwill and intangibles related to the purchase of 16% of JCM from minority shareholders in 2001. The goodwill and indefinite-lived intangibles created by the minority JCM purchases are not highly sensitive to impairment as the annual impairment test for goodwill compares the total fair value of the reporting unit to the net book value of the reporting unit and the total fair value of the intangibles to the carrying value of the intangibles. However, indefinite-lived intangibles include mutual fund advisory contracts, which would be subject to impairment if the mutual fund contract were terminated or not renewed.

In accordance with the annual testing requirement of SFAS No. 142, Janus tested indefinite-lived intangibles and goodwill for potential impairment as of October 1, 2004, and no impairment charge was required. In connection with the disposition of Nelson Money Managers Plc, a U.K.-based investment management company, Janus recorded goodwill impairments in 2003 and 2002.

Definite-lived intangible assets are tested only when there are indications of impairment. As each subadvised contact has a specific allocation of value, the loss of such contract will cause an impairment charge. In 2004 and 2003, Janus recorded impairments of $14.2 million and $9.3 million, respectively, associated with the termination of certain subadvised contracts.

Equity Compensation

Janus uses the Black-Scholes option pricing model to estimate the fair value of stock options for recording compensation expense. The Black-Scholes model requires management to estimate certain variables, some of

which may not be supported by historical activity because of Janus’ short history as a publicly traded company. Such estimates include the estimated lives of options from grant date to exercise date, the volatility of the underlying shares and estimated future dividend rates. The two most significant estimates in the Black-Scholes model are volatility and expected life. An increase in the volatility rate increases the value of stock options and a decrease causes a decline in value. Janus estimated expected volatility using an average of Janus’ historical volatility and industry and market averages, as appropriate. For expected lives, an increase in the expected life of an option increases its value. Janus factored in employee termination rates combined with vesting periods to determine the average expected life used in the model.

The following information, together with information included in other parts of this Management’s Discussion and Analysis of Financial Condition and Results of Operations, describes the key aspects of certain financial instruments that have market risk to Janus.

Investment Management Fees

Janus’ revenues are largely derived pursuant to investment advisory agreements with mutual funds and other separate and private accounts, and are dependent on the total value and composition of assets under management. Accordingly, assets under management are affected by new money investment or redemptions and fluctuations in the financial markets. Factors that impact the level of net fund sales or redemptions include competitive fund performance, marketing efforts, reputation, and introduction and market reception of new products as well as the overall economy and financial market condition and performance. Market appreciation and depreciation reflect fluctuations in investment values. The graph in Item 7, Management Discussion and Analysis of Financial Condition and Results of Operations — Investment Management Segment presents the direct relationship between revenue and average assets under management.

Available-for-Sale Investment

Janus invests a portion of the revenues earned from providing investment advisory services in certain Janus funds. These investments are carried in Janus’ consolidated financial statements at fair market value and are subject to market fluctuations and the performance of the underlying fund.

Held-to-Maturity Investments

At December 31, 2004, Janus’ investments totaled $289.2 million in U.S. government and agency debt and $18.6 million in highly rated corporate debt. Held-to-maturity securities are stated at cost with corresponding premiums or discounts amortized over the life of the investment to other income. These investments are subject to a decline or impairment in value if interest rates increase or if a corporate issuer defaults on payment at maturity. Janus does not consider these risks to be significant as it intends to hold the securities to maturity and the majority of these securities are invested in government guaranteed debt or highly rated corporate debt.

Foreign Exchange Sensitivity

Janus has subsidiaries in the United Kingdom and Hong Kong. With respect to these investments, matters arise as to financial accounting and reporting for foreign currency transactions and for translating foreign currency financial statements into U.S. dollars. The exposure to foreign currency fluctuations is not material as the majority of the revenue earned by international subsidiaries is denominated in U.S. dollars.

Interest Rate Risk

All of Janus’ outstanding debt has fixed interest rate terms. Therefore, Janus is not exposed to interest rate risk for its interest payments.

Index to Financial Statements

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

Janus Capital Group Inc.

We have audited the accompanying consolidated balance sheets of Janus Capital Group Inc. and subsidiaries (the “Company”) as of December 31, 2004 and 2003, and the related consolidated statements of income, changes in stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2004. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We did not audit the financial statements of DST Systems, Inc. (“DST”), an equity method investment of the Company for the year ended December 31, 2002. The Company’s equity in earnings of DST constitutes 22% of income before taxes and minority interest for the year ended December 31, 2002. The financial statements of DST were audited by other auditors whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for DST for 2002, is based solely on the report of such other auditors.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits and the report of other auditors provide a reasonable basis for our opinion.

In our opinion, based on our audits and the report of other auditors, such consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2004 and 2003, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2004, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of the Company’s internal control over financial reporting as of December 31, 2004, based on the criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 14, 2005 expressed an unqualified opinion on management’s assessment of the effectiveness of the Company’s internal control over financial reporting and an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

As discussed in Note 2, the Company has restated the consolidated financial statements to reflect the adoption of Statement of Financial Accounting Standard No. 123R, “Share-Based Payment” in 2004.

/s/ Deloitte & Touche LLP

Denver, CO

March 14, 2005

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

Janus Capital Group Inc.

We have audited management’s assessment, included in the accompanying Management’s Report on Internal Control Over Financial Reporting, that Janus Capital Group Inc. and subsidiaries (the “Company”) maintained effective internal control over financial reporting as of December 31, 2004, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express an opinion on management’s assessment and an opinion on the effectiveness of the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, evaluating management’s assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed by, or under the supervision of, the company’s principal executive and principal financial officers, or persons performing similar functions, and effected by the company’s board of directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, management’s assessment that the Company maintained effective internal control over financial reporting as of December 31, 2004, is fairly stated, in all material respects, based on the criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2004, based on the criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the accompanying consolidated balance sheets of the Company as of December 31, 2004 and 2003, and the related consolidated statements of income, changes in stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2004 and our report dated March 14, 2005 expressed an unqualified opinion on those financial statements and includes an explanatory paragraph relating to the restatement of the consolidated financial statements to reflect the adoption of Statement of Financial Accounting Standards No. 123R, Share-Based Payments as discussed in Notes 2 and 14.

/s/ Deloitte & Touche LLP

Denver, CO

March 14, 2005

MANAGEMENT REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Janus Capital Group Inc. (“Janus”) management is responsible for establishing and maintaining adequate internal control over Janus’ financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Janus’ internal control system was designed to provide reasonable assurance to Janus’ management and board of directors regarding the preparation and fair presentation of published financial statements. There are inherent limitations in the effectiveness of any internal control, including the possibility of human error and the circumvention or overriding of controls. Accordingly, even effective internal controls can provide only reasonable assurances with respect to financial statement preparation. Further, because of changes in conditions, the effectiveness of internal controls may vary over time.

Janus has assessed the effectiveness of Janus’ internal controls over financial reporting as of December 31, 2004. In making this assessment, Janus used the criteria set forth in the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control — Integrated Framework.

Based on the assessment using those criteria, Janus believes that, as of December 31, 2004, internal control over financial reporting is effective.

Janus’ independent registered public accounting firm audited the financial statements included in the Annual Report on Form 10-K and have issued an audit report on management’s assessment of Janus’ internal control over financial reporting. This report appears on page 32 of this Annual Report on Form 10-K.

March 14, 2005

JANUS CAPITAL GROUP INC.

CONSOLIDATED BALANCE SHEETS

(Dollars in millions, except per share data)

The accompanying notes are an integral part of these consolidated financial statements.

JANUS CAPITAL GROUP INC.

CONSOLIDATED STATEMENTS OF INCOME

(Dollars in millions, except per share data)

The accompanying notes are an integral part of these consolidated financial statements.

JANUS CAPITAL GROUP INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in millions)

The accompanying notes are an integral part of these consolidated financial statements.

JANUS CAPITAL GROUP INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(Amount in millions, except per share)