** **

**UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549**

**FORM 10-Q**

**x****QUARTERLY REPORT PURSUANT TOSECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934**

For the quarterly period ended **June 30,2007**

OR

**o****TRANSITION REPORT PURSUANT TOSECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934**

for the transition period from                 to               

Commission File Number **001-15253**

**Janus Capital Group Inc.**(Exact name of registrant as specified in its charter)

| **Delaware**                              |   | **43-1804048**       |
|-------------------------------------------|--------|----------------------|
| (State or other  jurisdiction of          |   | (I.R.S. Employer     |
| incorporation or  organization)           |   | Identification  No.) |
|                                      |   |                 |
| **151  Detroit Street, Denver, Colorado** |   | **80206**            |
| (Address of  principal executive offices) |   | (Zip Code)           |

 

**(303)333-3863**(Registrant’s telephone number, including area code)

**Notapplicable**(Former name, former address and former fiscal year, ifchanged since last report)

Indicate by checkmark whether the registrant (1) has filed all reports required to be filed bySection 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding12 months (or for such shorter period that the Company was required to filesuch reports), and (2) has been subject to the filing requirements for at leastthe past 90 days.    Yes x    No o

Indicate by check mark whether the registrant is alarge accelerated filer, an accelerated filer, or a non-accelerated filer.  See definition of “accelerated filer andlarge accelerated filer” in Rule 12b-2 of the Exchange Act.

| Large Accelerated Filer x |   | Accelerated  Filer o |   | Non-Accelerated Filer o |
|---------------------------|--------|----------------------|--------|-------------------------|

 

Indicate by check mark whether the registrant is ashell company (as defined in Rule 12b-2 of the Exchange Act).    Yes o    No x

As of July 24, 2007, there were 175,375,430 shares ofthe Company’s common stock, $.01 par value per share, issued and outstanding.

 

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**PART I -FINANCIAL INFORMATION**

**Item1.  Financial Statements**

**JANUS CAPITAL GROUP INC.**

**CONSOLIDATEDBALANCE SHEETS (UNAUDITED)(Dollars in Millions)**
| ** **                                                                                   | ** ** | **June 30,** | ** **    | **December 31,** | ** ** |
|----------------------------------------------------------------------------------------------|------------|-------------------|---------------|-----------------------|------------|
| ** **                                                                                   | ** ** | **2007**          | ** **    | **2006**              | ** ** |
| **ASSETS**                                                                                   |       |              |          |                  |       |
| **Current assets:**                                                                          |       |              |          |                  |       |
| Cash and cash  equivalents                                                                   |       | $                 | 742.1         |                  | $          | 559.7 |   |
| Marketable  securities                                                                       |       | 117.5             |          | 173.1                 |       |
| Accounts  receivable                                                                         |       | 150.9             |          | 141.6                 |       |
| Income taxes  receivable                                                                     |       | —            |          | 5.4                   |       |
| Other current  assets                                                                        |       | 48.6              |          | 45.3                  |       |
| Total current  assets                                                                        |       | 1,059.1           |          | 925.1                 |       |
|                                                                                         |       |              |          |                  |       |
| Other assets                                                                                 |       | 118.9             |          | 99.4                  |       |
| Property and equipment  (net of accumulated depreciation of $141.9 and $150.9, respectively) |       | 57.2              |          | 60.3                  |       |
| Intangibles, net                                                                             |       | 1,327.3           |          | 1,304.8               |       |
| Goodwill                                                                                     |       | 1,197.5           |          | 1,148.3               |       |
|                                                                                         |       |              |          |                  |       |
| Total assets                                                                                 |       | $                 |  3,760.0 |                  | $          | 3,537.9 |   |
|                                                                                         |       |              |          |                  |       |
| ** LIABILITIES AND STOCKHOLDERS’ EQUITY**                                          |       |              |          |                  |       |
|                                                                                         |       |              |          |                  |       |
| **Current liabilities:**                                                                     |       |              |          |                  |       |
| Accounts payable                                                                             |       | $                 | 6.0           |                  | $          | 3.1 |   |
| Accrued  compensation and benefits                                                           |       | 80.5              |          | 105.6                 |       |
| Income taxes  payable                                                                        |       | 2.3               |          | —                |       |
| Other accrued  liabilities                                                                   |       | 72.2              |          | 76.9                  |       |
| Total current  liabilities                                                                   |       | 161.0             |          | 185.6                 |       |
|                                                                                         |       |              |          |                  |       |
| **Other liabilities:**                                                                       |       |              |          |                  |       |
| Long-term debt                                                                               |       | 1,127.6           |          | 537.2                 |       |
| Deferred income  taxes                                                                       |       | 408.9             |          | 399.3                 |       |
| Other  liabilities                                                                           |       | 62.4              |          | 91.6                  |       |
| Total  liabilities                                                                           |       | 1,759.9           |          | 1,213.7               |       |
|                                                                                         |       |              |          |                  |       |
| Commitments and  contingencies                                                               |       |              |          |                  |       |
|                                                                                         |       |              |          |                  |       |
|  Minority interest in consolidated subsidiary                                           |       | 6.3               |          | 17.8                  |       |
|                                                                                         |       |              |          |                  |       |
| **STOCKHOLDERS’ EQUITY**                                                                |       |              |          |                  |       |
|                                                                                         |       |              |          |                  |       |
| Preferred stock                                                                              |       | —            |          | —                |       |
| Common stock                                                                                 |       | 1.8               |          | 1.9                   |       |
| Retained earnings *                                                                          |       | 1,975.8           |          | 2,293.4               |       |
| Accumulated other  comprehensive income                                                      |       | 16.2              |          | 11.1                  |       |
| Total  stockholders’ equity                                                             |       | 1,993.8           |          | 2,306.4               |       |
|                                                                                         |       |              |          |                  |       |
| Total liabilities and stockholders’ equity                                              |       | $                 |  3,760.0 |                  | $          | 3,537.9 |   |

 

* Retained earningsincludes a cumulative-effect adjustment of $29.9 million for the adoption ofFIN 48.  See Note 4.

The accompanying notesare an integral part of these consolidated financial statements.

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**JANUS CAPITAL GROUP INC.**

**CONSOLIDATEDSTATEMENTS OF INCOME (UNAUDITED)(Dollars in Millions, Except Per Share Data)**
| ** **                                                  | ** ** | **Three months ended** | ** ** | **Six months ended** | ** ** |
|-------------------------------------------------------------|------------|----------------------------------|------------|--------------------------------|------------|
| ** **                                                  | ** ** | **June 30,**                | ** ** | **June 30,**              | ** ** |
| ** **                                                  | ** ** | **2007**                         | ** ** | **2006**                       | ** ** | **2007** | ** ** | **2006** | ** ** |
| **Revenues:**                                               |       |                             |       |                           |       |   |   |   |   |
| Investment management fees                                  |       | $                                | 220.6      |                           | $          | 187.0 |   | $ | 421.5 |   | $ | 372.6 |   |
| Performance fees                                            |       | 3.8                              |       | 4.3                            |       | 6.3 |   | 8.5 |   |
| Shareowner servicing fees and other                         |       | 48.6                             |       | 41.8                           |       | 93.1 |   | 84.5 |   |
| Printing and fulfillment                                    |       | 21.9                             |       | 21.5                           |       | 45.4 |   | 45.1 |   |
| Total                                                       |       | 294.9                            |       | 254.6                          |       | 566.3 |   | 510.7 |   |
|                                                        |       |                             |       |                           |       |   |   |   |   |
| **Operating  Expenses:**                                    |       |                             |       |                           |       |   |   |   |   |
| Employee compensation and benefits                          |       | 88.6                             |       | 79.4                           |       | 177.7 |   | 164.2 |   |
| Long-term incentive compensation                            |       | 17.1                             |       | 23.1                           |       | 35.9 |   | 45.1 |   |
| Marketing and advertising                                   |       | 5.0                              |       | 7.7                            |       | 10.1 |   | 13.1 |   |
| Distribution                                                |       | 34.5                             |       | 27.2                           |       | 65.1 |   | 54.0 |   |
| Depreciation and amortization                               |       | 10.7                             |       | 10.2                           |       | 19.9 |   | 20.5 |   |
| General, administrative and occupancy                       |       | 27.7                             |       | 32.2                           |       | 58.8 |   | 66.5 |   |
| Cost of printing and fulfillment                            |       | 22.4                             |       | 21.6                           |       | 45.8 |   | 44.9 |   |
| Restructuring and impairments                               |       | —                           |       | —                         |       | 0.4 |   | — |   |
| Mutual fund investigation recoveries                        |       | (0.3                             | )          | —                         |       | (0.8 | ) | (10.0 | ) |
| Total                                                       |       | 205.7                            |       | 201.4                          |       | 412.9 |   | 398.3 |   |
|                                                        |       |                             |       |                           |       |   |   |   |   |
| **Operating  Income**                                       |       | 89.2                             |       | 53.2                           |       | 153.4 |   | 112.4 |   |
|                                                        |       |                             |       |                           |       |   |   |   |   |
| Interest expense                                            |       | (11.5                            | )          | (7.2                           | )          | (21.0 | ) | (14.2 | ) |
| Other income,  net                                          |       | 5.6                              |       | 7.8                            |       | 12.7 |   | 16.8 |   |
| Income before  taxes, equity earnings and minority interest |       | 83.3                             |       | 53.8                           |       | 145.1 |   | 115.0 |   |
| Income tax  provision                                       |       | (31.1                            | )          | (19.5                          | )          | (52.9 | ) | (41.7 | ) |
| Equity in  earnings of unconsolidated affiliate             |       | 1.7                              |       | 2.0                            |       | 3.4 |   | 3.7 |   |
| Minority  interest in consolidated earnings                 |       | (5.1                             | )          | (5.2                           | )          | (11.2 | ) | (10.6 | ) |
|                                                        |       |                             |       |                           |       |   |   |   |   |
| **Net  Income**                                             |       | $                                | 48.8       |                           | $          | 31.1 |   | $ | 84.4 |   | $ | 66.4 |   |
|                                                        |       |                             |       |                           |       |   |   |   |   |
| **Earnings  per Share:**                                    |       |                             |       |                           |       |   |   |   |   |
| Basic                                                       |       | $                                | 0.27       |                           | $          | 0.15 |   | $ | 0.46 |   | $ | 0.32 |   |
| Diluted                                                     |       | $                                | 0.27       |                           | $          | 0.15 |   | $ | 0.45 |   | $ | 0.32 |   |

 

The accompanyingnotes are an integral part of these consolidated financial statements.

2

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**JANUSCAPITAL GROUP INC.**

**CONSOLIDATED STATEMENTSOF CASH FLOWS (UNAUDITED)(Dollars in Millions)**
| ** **                                                   | ** ** | **Six months ended** | ** **        |
|--------------------------------------------------------------|------------|--------------------------------|-------------------|
| ** **                                                   | ** ** | **June 30,**              | ** **        |
| ** **                                                   | ** ** | **2007**                       | ** **        | **2006** | ** ** |
| **CASH  FLOWS PROVIDED BY (USED FOR):**                      |       |                           |              |   |   |
| **Operating  Activities:**                                   |       |                           |              |   |   |
| Net income                                                   |       | $                              | 84.4              |   | $ | 66.4 |   |
| Adjustments to net income:                                   |       |                           |              |   |   |
| Depreciation and amortization                                |       | 22.7                           |              | 24.1 |   |
| Deferred income taxes                                        |       | 25.3                           |              | (0.5 | ) |
| Minority interest in consolidated earnings                   |       | 11.2                           |              | 10.6 |   |
| Amortization of stock-based compensation                     |       | 24.7                           |              | 40.5 |   |
| Realized gain on the sale of investments                     |       | (0.4                           | )                 | (4.1 | ) |
| Payment of deferred commissions, net                         |       | (21.3                          | )                 | 1.9 |   |
| Other, net                                                   |       | (3.2                           | )                 | 0.4 |   |
| Changes in working capital items:                            |       |                           |              |   |   |
| Accounts receivable                                          |       | (9.3                           | )                 | 15.9 |   |
| Other current assets                                         |       | 1.1                            |              | 2.2 |   |
| Accounts payable and accrued compensation payable            |       | (22.2                          | )                 | (24.6 | ) |
| Other accrued liabilities                                    |       | (3.2                           | )                 | 14.0 |   |
| Net operating                                                |       | 109.8                          |              | 146.8 |   |
|                                                         |       |                           |              |   |   |
| **Investing  Activities:**                                   |       |                           |              |   |   |
| Purchase of property and equipment                           |       | (10.7                          | )                 | (7.9 | ) |
| Acquisitions of INTECH                                       |       | (81.0                          | )                 | (90.0 | ) |
| Purchase of marketable securities                            |       | (61.0                          | )                 | (55.3 | ) |
| Proceeds from sales and maturities of marketable  securities |       | 117.8                          |              | 35.4 |   |
| Net investing                                                |       | (34.9                          | )                 | (117.8 | ) |
|                                                         |       |                           |              |   |   |
| **Financing  Activities:**                                   |       |                           |              |   |   |
| Proceeds from issuance of long-term debt                     |       | 748.4                          |              | — |   |
| Debt issuance costs                                          |       | (6.9                           | )                 | — |   |
| Repayment of long-term debt                                  |       | (158.1                         | )                 | — |   |
| Proceeds from stock plans                                    |       | 41.4                           |              | 30.4 |   |
| Excess tax benefit from equity-based compensation            |       | 4.2                            |              | 4.0 |   |
| Repurchase of common stock                                   |       | (491.7                         | )                 | (250.3 | ) |
| Distributions to minority interest                           |       | (22.6                          | )                 | (19.5 | ) |
| Dividends paid to shareholders                               |       | (7.2                           | )                 | (8.3 | ) |
| Net financing                                                |       | 107.5                          |              | (243.7 | ) |
|                                                         |       |                           |              |   |   |
| **Cash  and Cash Equivalents:**                              |       |                           |              |   |   |
| Net increase (decrease)                                      |       | 182.4                          |              | (214.7 | ) |
| At beginning of period                                       |       | 559.7                          |              | 552.6 |   |
| At end of period                                             |       | $                              |   742.1 |   | $ |   337.9 |   |
|                                                         |       |                           |              |   |   |
| **Supplemental  Cash Flow Information:**                     |       |                           |              |   |   |
| Cash paid for interest                                       |       | $                              | 19.5              |   | $ | 13.7 |   |
| Cash paid for  income taxes                                  |       | $                              | 18.3              |   | $ | 19.5 |   |

 

The accompanyingnotes are an integral part of these consolidated financial statements.

3

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**JANUS CAPITAL GROUP INC.**

**CONSOLIDATEDSTATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (UNAUDITED)(Amounts in Millions, Except Per Share)**
| ** **                                                                   | ** ** | ** ** | ** ** | ** ** | ** ** | ** **   | ** ** | **Accumulated**   | ** ** | ** **             | ** ** |
|------------------------------------------------------------------------------|------------|------------|------------|------------|------------|--------------|------------|-------------------|------------|------------------------|------------|
| ** **                                                                   | ** ** | ** ** | ** ** | ** ** | ** ** | ** **   | ** ** | **Other**         | ** ** | **Total**              | ** ** |
| ** **                                                                   | ** ** | ** ** | ** ** | **Common** | ** ** | **Retained** | ** ** | **Comprehensive** | ** ** | **Stockholders’** | ** ** |
| ** **                                                                   | ** ** | **Shares** | ** ** | **Stock**  | ** ** | **Earnings** | ** ** | **Income**        | ** ** | **Equity**             | ** ** |
| **Balance  at December 31, 2005**                                            |       | 216.0      |       | $          | 2.2        |         | $          | 2,569.3           |       | $                      | 9.7        |   | $ | 2,581.2 |   |
|                                                                         |       |       |       |       |       |         |       |              |       |                   |       |
| Net income                                                                   |       |       |       |       |       | 133.6        |       |              |       | 133.6                  |       |
| Net unrealized  gains on marketable securities                               |       |       |       |       |       |         |       | 15.4              |       | 15.4                   |       |
| Net loss on cash  flow hedge                                                 |       |       |       |       |       |         |       | (2.4              | )          | (2.4                   | )          |
| Reclassification  for gains included in net income                           |       |       |       |       |       |         |       | (6.5              | )          | (6.5                   | )          |
| Foreign currency  translation adjustment                                     |       |       |       |       |       |         |       | (5.1              | )          | (5.1                   | )          |
| *Comprehensive income*                                                       |       |       |       |       |       |         |       |              |       | 135.0                  |       |
| Amortization of  stock-based compensation                                    |       |       |       |       |       | 72.4         |       |              |       | 72.4                   |       |
| Issuance and  forfeitures of restricted stock awards                         |       | 0.3        |       |       |       |         |       |              |       | —                 |       |
| Stock option  exercises                                                      |       | 3.1        |       |       |       | 42.1         |       |              |       | 42.1                   |       |
| Common stock  repurchased                                                    |       | (25.9      | )          | (0.3       | )          | (516.1       | )          |              |       | (516.4                 | )          |
| Change of  interest in subsidiary                                            |       |       |       |       |       | 0.4          |       |              |       | 0.4                    |       |
| Common stock  dividends ($0.04 per share)                                    |       |       |       |       |       | (8.3         | )          |              |       | (8.3                   | )          |
| **Balance  at December 31, 2006**                                            |       | 193.5      |       | 1.9        |       | 2,293.4      |       | 11.1              |       | 2,306.4                |       |
| ** **                                                                   |       |       |       |       |       |         |       |              |       |                   |       |
| Cumulative-effect  adjustment for the adoption of a new accounting principle |       |       |       |       |       | 29.9         |       |              |       | 29.9                   |       |
| Net income                                                                   |       |       |       |       |       | 84.4         |       |              |       | 84.4                   |       |
| Net unrealized  gains on marketable securities                               |       |       |       |       |       |         |       | 5.0               |       | 5.0                    |       |
| Reclassification  for gains included in net income                           |       |       |       |       |       |         |       | (0.2              | )          | (0.2                   | )          |
| Foreign currency  translation adjustment                                     |       |       |       |       |       |         |       | 0.3               |       | 0.3                    |       |
| *Comprehensive income*                                                       |       |       |       |       |       |         |       |              |       | 89.5                   |       |
| Amortization of  stock-based compensation                                    |       |       |       |       |       | 24.7         |       |              |       | 24.7                   |       |
| Issuance and  forfeitures of restricted stock awards                         |       | 0.9        |       |       |       | —       |       |              |       | —                 |       |
| Tax impact of  stock-based compensation                                      |       |       |       |       |       | 0.8          |       |              |       | 0.8                    |       |
| Stock option  exercises                                                      |       | 2.4        |       |       |       | 41.4         |       |              |       | 41.4                   |       |
| Common stock  repurchased                                                    |       | (20.5      | )          | (0.1       | )          | (491.6       | )          |              |       | (491.7                 | )          |
| Common stock  dividends ($0.04 per share)                                    |       |       |       |       |       | (7.2         | )          |              |       | (7.2                   | )          |
| **Balance at June 30, 2007**                                                 |       | 176.3      |       | $          | 1.8        |         | $          | 1,975.8           |       | $                      | 16.2       |   | $ | 1,993.8 |   |

 

The accompanyingnotes are an integral part of these consolidated financial statements.

4

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**JANUSCAPITAL GROUP INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

***(Unaudited)***

**Note 1 — Basis of Presentation**

Inthe opinion of Janus Capital Group Inc. (“Janus” or the “Company”) management,the accompanying unaudited interim consolidated financial statements containall adjustments necessary to fairly present the financial position, results ofoperations and cash flows of the Company in accordance with accountingprinciples generally accepted in the United States of America (“GAAP”).  Such interim financial statements have beenprepared in accordance with the instructions to Form 10-Q pursuant to the rulesand regulations of the Securities and Exchange Commission (“SEC”).  Certain information and footnote disclosuresnormally included in financial statements prepared in accordance with GAAP havebeen condensed or omitted pursuant to such rules and regulations.  These consolidated financial statementsshould be read in conjunction with the Company’s Annual Report on Form 10-Kfor the year ended December 31, 2006.

The accompanyingconsolidated financial statements have been prepared on a consistent basis withthe accounting policies described in Note 2 to the consolidated financialstatements that are presented in the Company’s Annual Report on Form 10-K for theyear ended December 31, 2006, except as discussed in Note 4.

**Note 2 — Earnings Per Share**

Basic earnings per commonshare is calculated by dividing net income by the weighted average number ofcommon shares outstanding during the period. Diluted earnings per common share adjusts the weighted average sharesoutstanding by the dilutive impact of shares underlying stock options andunvested restricted stock awards.  Thefollowing is a summary of the earnings per share calculation *(in millions, except per share data)*:
| ** **                                                                                      | ** ** | **Three months ended** | ** **       | **Six months ended** | ** ** |
|-------------------------------------------------------------------------------------------------|------------|----------------------------------|------------------|--------------------------------|------------|
| ** **                                                                                      | ** ** | **June 30,**                | ** **       | **June 30,**              | ** ** |
| ** **                                                                                      | ** ** | **2007**                         | ** **       | **2006**                       | ** ** | **2007** | ** ** | **2006** | ** ** |
| Net income                                                                                      |       | $                                |   48.8 |                           | $          |   31.1 |   | $ |   84.4 |   | $ |   66.4 |   |
|                                                                                            |       |                             |             |                           |       |   |   |   |   |
| Weighted average  common shares outstanding                                                     |       | 180.1                            |             | 205.3                          |       | 183.7 |   | 207.6 |   |
| Dilutive effect of  stock options and unvested restricted stock using the treasury stock method |       | 2.3                              |             | 1.1                            |       | 1.8 |   | 1.2 |   |
| Weighted average  diluted common shares outstanding                                             |       | 182.4                            |             | 206.4                          |       | 185.5 |   | 208.8 |   |
| Basic earnings  per share                                                                       |       | $                                |   0.27 |                           | $          |   0.15 |   | $ | 0.46 |   | $ |   0.32 |   |
| Diluted earnings per  share                                                                     |       | $                                |   0.27 |                           | $          |   0.15 |   | $ |   0.45 |   | $ |   0.32 |   |

 

The following stockoptions and unvested restricted stock are anti-dilutive and have not beenincluded in the weighted average diluted shares outstanding calculation:
| ** **                 | ** ** | **Three months ended** | ** ** | **Six months ended** | ** ** |
|----------------------------|------------|----------------------------------|------------|--------------------------------|------------|
| ** **                 | ** ** | **June 30,**                | ** ** | **June 30,**              | ** ** |
| ** **                 | ** ** | **2007**                         | ** ** | **2006**                       | ** ** | **2007** | ** ** | **2006** | ** ** |
| Stock options              |       | 4.8                              |       | 6.7                            |       | 5.5 |   | 5.7 |   |
| Unvested restricted  stock |       | —                           |       | 1.1                            |       | — |   | 1.4 |   |

 

**Note 3 — Acquisition**

On March 30, 2007, Janusincreased its ownership of Enhanced Investment Technologies, LLC (“INTECH”) toapproximately 86.5% with the purchase of an additional 4% ownership interest inINTECH for $81.0 million in cash.  Thepro forma results of operations have not been presented as they would not havebeen materially different from reported amounts.

5

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The purchase priceallocation resulted in the recognition of $31.7 million of intangible assetsand $49.3 million of goodwill. Intangible assets acquired represent customer relationships which areamortized over 12 years.

**Note 4 — Adoption of NewAccounting Principle**

Janus adopted theprovisions of Financial Accounting Standards Board Interpretation No. 48, “Accountingfor Uncertainty in Income Taxes” (“FIN 48”), on January 1, 2007, which setsforth a specific recognition threshold and measurement method for the financialstatement recognition and measurement of a tax position taken or expected to betaken on a tax return.  As a result ofthe implementation of FIN 48, Janus reduced its tax contingencies liability by$29.3 million, which had previously been accounted for under the provisions ofStatement of Financial Accounting Standard No. 5, “Accounting for Contingencies”.  The reduction in the liability and therelated change in deferred taxes were accounted for as an increase to retainedearnings on January 1, 2007.  The taxcontingencies liability has been recorded in other long-term liabilities. Areconciliation of the beginning and ending liability is as follows *(in millions)*:

| Balance at January 1, 2007               |   | $     |   59.5 |   |
|------------------------------------------|--------|-------|------------------|--------|
| Cumulative  effect of adoption of FIN 48 |   | (29.3 | )                |
| Accrued interest  for the current period |   | 1.0   |             |
| Balance at June 30,  2007                |   | $     |   31.2 |   |

 

A deferred tax asset of$11.2 million has been recorded associated with the tax contingenciesliability.  If the tax contingenciesliability and related deferred tax asset are reversed in future periods, theeffective tax rate would be favorably impacted by $20.0 million.

Tax returns filed inprevious years are subject to audit by various federal, state and internationaltaxing authorities and as a result of such audits, additional tax assessmentsmay be proposed.  As of June 30, 2007,the majority of tax years from 1996 and forward remain subject to audit.  Based on information currently available,Janus management does not anticipate any material changes in the liabilitywithin the next twelve months.

Taxing authoritiesgenerally charge interest and penalties in the event that a tax position takenis subsequently reversed upon examination. Janus has accrued interest on its uncertain tax provisions based on therates specified by the applicable taxing authorities and has recorded theinterest as a component of the tax provision. At June 30, 2007, $9.3 million of accrued interest is included in theliability for tax contingencies.  Anypotential penalties associated with a tax contingency will also be included asa component of the tax provision in the period in which the assessment of apenalty becomes likely.  Janus does notbelieve that it is subject to any penalties related to its tax contingenciesand therefore, has not accrued a liability for tax penalties.

In the event of anoverpayment of income taxes, taxing authorities generally pay interest from thedate of the overpayment through the date on which an amended return isfiled.  Janus records interest incomefrom taxing authorities as a component of the tax provision.

**Note 5 — Long-Term Debt**

On June 14, 2007, Janusissued $300.0 million of 6.250% Senior Notes due June 15, 2012, and $450.0million of 6.700% Senior Notes due June 15, 2017 (collectively the “2007 seniornotes”).  Interest will be paidsemiannually on June 15 and December 15 of each year, beginning December 15,2007.   The proceeds from the June 14,2007 issuances were $748.4 million.  OnJune 26, 2007, approximately $160.0 million of the total proceeds were used torepay the 7.875% Senior Notes due 2032 plus accrued and unpaid interest as ofthe redemption date.  The remainingproceeds may be used for possible future acquisitions, the repurchase of Janus’common stock, and/or general corporate purposes.

If the Companyexperiences a change of control and the 2007 senior notes are rated belowinvestment grade by Standard & Poor’s Rating Service (“S&P”) or Moody’sInvestors Service, Inc. (“Moody’s”), the Company must 

6

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offer to repurchase allof the 2007 senior notes at a price equal to 101% of the principal amount plusaccrued and unpaid interest to the repurchase date.

The terms of the 2007senior notes also include an interest rate adjustment covenant that providesthat the interest rate payable on 2007 senior notes will increase by 25 basispoints for each level that the Company’s debt rating is decreased by Moody’sfrom its existing rating of Baa3 or by S&P from its existing rating ofBBB-, up to a maximum increase of 200 basis points.  If at any time after the interest on the newnotes has been adjusted upward, either Moody’s or S&P increases its ratingon the new notes, then for each level of such increase in the rating theinterest payable on the new notes will be decreased by 25 basis points, but inno event to a rate less than the interest rate payable on the date of theirissuance.  The interest rate adjustmentcovenant will permanently terminate  ifthe new notes become rated Baa2 by Moody’s and BBB by S&P (or higher), witha stable or positive outlook regardless of any subsequent decrease in theratings by either or both rating agencies.

In addition, Janusentered into supplemental indentures to add the same interest rate adjustmentcovenant to the terms of all of its outstanding 5.875% Senior Notes dueSeptember 15, 2011, 6.119% Senior Notes due April 15, 2014, and 7.750% SeniorNotes due June 15, 2009.

**Note 6 — Long-Term IncentiveCompensation**

Janus generally grantsannual long-term incentive awards in February of each year.  The February 2007 grant totaled $61.0 millionand consisted of $21.7 million of restricted stock (0.9 million shares at$21.01 per share), $12.8 million of stock options and $26.5 of mutual fundunits and will be recognized over a four year period, subject to acceleratedvesting if certain financial performance criteria are achieved.

A total of 1.8 millionoptions with a grant date fair value of $7.02 per option were awarded as partof the 2007 annual grant.  The grant datefair value of stock options was determined using the Black-Scholes model withthe following assumptions: expected volatility of 28%, dividend yield of 0.22%,risk-free interest rate of 4.86% and an expected life of five years.

**Note 7 — Other Income, Net**

The components of otherincome represent investment income and investment gains, net of losses, asfollows *(in millions)*:

|                       | ** ** | **Three months ended** | ** ** | **Six months ended** | ** ** |
|-----------------------|------------|----------------------------------|------------|--------------------------------|------------|
| ** **            | ** ** | **June 30,**                | ** ** | **June 30,**              | ** ** |
| ** **            | ** ** | **2007**                         | ** ** | **2006**                       | ** ** | **2007** | ** ** | **2006** | ** ** |
| Gains, net of  losses |       | $                                |  0.4  |                           | $          | 2.0 |   | $ | 1.2 |   | $ | 4.5 |   |
| Dividend income       |       | 2.9                              |       | 2.4                            |       | 5.9 |   | 5.4 |   |
| Interest income       |       | 2.3                              |       | 3.4                            |       | 5.6 |   | 6.9 |   |
| Total                 |       | $                                |  5.6  |                           | $          |  7.8 |   | $ |  12.7 |   | $ |  16.8 |   |

 

7

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**Note 8 — Segment Information**

Reportable segments areidentified by management based on Janus’ organizational structure and thebusiness activities from which it earns revenue.  Janus has determined that it has two primarylines of business: investment management and printing and fulfillment.  The following is a summary of financial information concerning the segments*(in millions)*:

|                   | ** ** | **Three months ended June 30,** | ** ** |
|-------------------|------------|-----------------------------------------------------|------------|
| ** **        | ** ** | **Investment**                                      | ** ** | **Printing and** | ** ** | ** ** | ** ** |
| ** **        | ** ** | **Management**                                      | ** ** | **Fulfillment** | ** ** | **Consolidated** | ** ** |
| **2007:**         | ** ** | ** **                                          | ** ** | ** ** | ** ** | ** ** | ** ** |
| Revenues          |       | $                                                   | 273.0      |   | $ | 21.9 |   | $ | 294.9 |   |
| Net income (loss) |       | $                                                   | 51.6       |   | $ | (2.8 | ) | $ | 48.8 |   |
|              |       |                                                |       |   |   |   |   |
| **2006:**         | ** ** | ** **                                          | ** ** | ** ** | ** ** | ** ** | ** ** |
| Revenues          |       | $                                                   | 233.1      |   | $ | 21.5 |   | $ | 254.6 |   |
| Net income (loss) |       | $                                                   | 33.2       |   | $ | (2.1 | ) | $ | 31.1 |   |

 

|                    | ** ** | **Six months ended June 30,** | ** ** |
|--------------------|------------|-------------------------------|------------|
| ** **         | ** ** | **Investment**                | ** ** | **Printing and** | ** ** | ** ** | ** ** |
| ** **         | ** ** | **Management**                | ** ** | **Fulfillment** | ** ** | **Consolidated** | ** ** |
| **2007:**          | ** ** | ** **                    | ** ** | ** ** | ** ** | ** ** | ** ** |
| Revenues           |       | $                             | 520.9      |   | $ | 45.4 |   | $ | 566.3 |   |
| Net income (loss)  |       | $                             | 89.6       |   | $ | (5.2 | ) | $ | 84.4 |   |
|               |       |                          |       |   |   |   |   |
| **2006:**          | ** ** | ** **                    | ** ** | ** ** | ** ** | ** ** | ** ** |
| Revenues           |       | $                             | 465.6      |   | $ | 45.1 |   | $ | 510.7 |   |
| Net income  (loss) |       | $                             | 70.5       |   | $ | (4.1 | ) | $ | 66.4 |   |

 

**Note 9 — Legal Proceedings**

Janusis subject to various legal proceedings arising from normal businessoperations.  Although there can be noassurances, based on information currently available, management believes thatit is probable that the ultimate outcome of each of the actions will not have amaterial adverse effect on the consolidated financial condition of Janus.  However, an adverse outcome in any of theactions could have a material adverse effect on the financial results of theCompany in the period in which it is recorded. Due to the resolution of certain matters, the Company releasedlitigation reserves of $6.3 million during the second quarter 2007.  As of June 30, 2007, Janus has no litigationreserves as management believes that the remaining claims made in the civilactions described below have little or no merit and intends to defend againstthem.

***Market Timing Litigation***

Followingthe market timing investigations by the New York Attorney General (“NYAG”) andthe SEC, Janus and certain affiliates were named as defendants in aconsolidated lawsuit in the U.S. District Court in Baltimore, Maryland (*Case Number MDL No. 1586, 04-MD-15863*).  Five amended complaints were filed in thesecoordinated proceedings, including: (i) claims by a putative class of Janusfund investors asserting claims on behalf of the investor class (*Marini, et al. v. Janus Investment Fund, et al., U.S. District Court,District of Maryland, Case No. 04-CV-00497*);  (ii) derivative claims by investors in theJanus funds ostensibly on behalf of the Janus funds (*Steinberg etal. v. Janus Capital Management, LLC et al., U.S. District Court, District ofMaryland, Case No. 04-CV-00518*); (iii) claims on behalf ofparticipants in the Janus 401(k) plan (*Wangberger v. JanusCapital Group Inc., 401(k) Advisory Committee, et al., U.S. District Court,District of Maryland, Case No. JFM-05-2711*); (iv) claims brought onbehalf of shareholders of Janus on a derivative basis against Janus’ Board ofDirectors (*Chasen v. Whiston, et al., U.S. District Court,District of Maryland, Case No. 04-MD-00855*); and (v) claims by aputative class of Janus shareholders asserting claims on behalf of theshareholders (*Wiggins, et al. v. Janus Capital Group Inc.,et al.*, *U.S. District Court,District of Maryland, Case No. 04-CV-00818).*

8

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InAugust 2005, the U.S. District Court entered orders dismissing most of theclaims asserted against the Company and its affiliates by fund investors in the*Marini* and *Steinberg*cases described above, except certain claims under Section 10(b) of theSecurities Exchange Act of 1934 and under Section 36(b) of the InvestmentCompany Act of 1940.  The U.S. DistrictCourt also entered an order dismissing all claims in the *Wiggins*lawsuit.  Plaintiffs have appealed thatdismissal.  In August 2006, the U.S.District Court in the *Wangberger*401(k) plan class action dismissed the action with prejudice, and the plaintiffappealed the dismissal to the U.S. Court of Appeals for the FourthCircuit.  Finally, the U.S. DistrictCourt also dismissed the *Chasen* lawsuitagainst Janus’ Board of Directors without leave to amend ruling that theplaintiff had failed to make a pre-suit demand on the Board of Directors asrequired by applicable state law. The time to appeal from this dismissal hasexpired.  As a result of the aboveevents, the Company and Janus Capital Management, LLC (“JCM”) are the remainingdefendants, in some capacity, in one or more of the actions described in thepreceding paragraph.

Aspreviously disclosed, the Auditor of the State of West Virginia, in hiscapacity as securities commissioner, initiated administrative proceedingsagainst many of the defendants in the market timing cases (including Janus) andseeks disgorgement and other monetary relief based on similar market timingallegations (*In the Matter of Janus Capital Group Inc. etal., Before the Securities Commissioner, State of West Virginia, Summary OrderNo. 05-1320*).  In September2006, Janus filed its answer to the Auditor’s summary order institutingproceedings, and requested a hearing.  Ahearing was held in June 2007, during which the parties were ordered to submita scheduling order.  In addition to arecently filed Motion to Discharge Order to Show Cause, Janus continues tochallenge the statutory authority of the Auditor to bring such an action.

***Excessive Fee Litigation***

JCMwas a defendant in a consolidated lawsuit challenging the investment advisoryfees charged by JCM to certain funds managed by JCM *(WalterSins, et al. v. Janus Capital Management, LLC, U.S. District Court, District ofColorado, Case No. 04-CV-01647-WDM-MEH; Michael Fleisher*, *et al. v. Janus Capital Management LLC, 04-CV-02395-MSK-CBS)*(collectively,“Excessive Fee Litigation”*)*.  TheExcessive Fee Litigation was filed by fund investors asserting breach offiduciary duty under Section 36(b) of the Investment Company Act of 1940.  The parties entered into a Stipulation ofDismissal and the Court dismissed the matter in May 2007.

***IPO Antitrust Litigation***

In 2001, a Janussubsidiary was named as a defendant in a class action suit filed in the U.S.District Court for the Southern District of New York.  *(Pfeiffer v. Credit SuisseFirst Boston, U.S. District Court, Southern District of New York, Case No.01-CV-2014)*.  The suit allegesthat certain underwriting firms and institutional investors violated antitrustlaws in connection with initial public offerings.**TheU.S. District Court dismissed the plaintiff’s antitrust claims in November2003.  In September 2005, the U.S. Courtof Appeals for the Second Circuit vacated the U.S. District Court’s decision todismiss the claims and remanded the case for further proceedings.  In March 2006, the defendants, including theJanus subsidiary, filed a *Petition for a Writ ofCertiorari*with the U.S. Supreme Court to review the U.S. Court ofAppeal’s decision.  The U.S. SupremeCourt granted the *Petition for a Writ of Certiorari*andheard arguments on the matter in March 2007. In June 2007, the U.S. Supreme Court ruled in favor of the defendants,including the Janus subsidiary, holding that “the securities law implicitlyprecludes the application of the antitrust laws to the conduct alleged in thiscase.”

9

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**Item 2.**                          Management’sDiscussion and Analysis of Financial Condition and Results of Operations

**FORWARD-LOOKINGSTATEMENTS**

*This Quarterly Report on Form10-Q contains “forward-looking statements” within the meaning of the PrivateSecurities Litigation Reform Act of 1995. In addition, Janus Capital Group Inc. (“Janus” or the “Company”) maymake other written and oral communications from time to time that contain suchstatements.  Forward-looking statementsinclude statements as to industry trends and future expectations of the Companyand other matters that do not relate strictly to historical facts and are basedon certain assumptions by management. These statements are often identified by the use of words such as “may,”“will,” “expect,” “believe,” “anticipate,” “intend,” “could,” “should,” “estimate”or “continue,” and similar expressions or variations.  These statements are based on the beliefs andassumptions of the management of the Company based on information currentlyavailable to management.  Such forward-lookingstatements are subject to risks, uncertainties and other factors that couldcause actual results to differ materially from future results expressed orimplied by such forward-looking statements. Important factors that could causeactual results to differ materially from the forward-looking statementsinclude, among others, the risks described in our filings with the Securitiesand Exchange Commission, including those in Part I, Item 1A, Risk Factors, andelsewhere in Janus’ Annual Report on Form 10-K for the year ended December 31,2006, and in Part II, Item 1A, Risk Factors, in this Form 10-Q .  Janus cautions readers to carefully considersuch factors.  Furthermore, suchforward-looking statements speak only as of the date on which such statementsare made.  Janus undertakes no obligationto update any forward-looking statements to reflect events or circumstancesafter the date of such statements.*

**AVAILABLEINFORMATION**

Copies of Janus’ filingswith the Securities and Exchange Commission (“SEC”) can be obtained from theSEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549.  Information can be obtained about theoperation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.  The SEC also maintains an Internet site thatcontains reports, proxy and information statements, and other informationregarding issuers that file electronically with the SEC at http://www.sec.gov.

Janus makes availablefree of charge its annual reports on Form 10-K, quarterly reports on Form 10-Qand current reports on Form 8-K and amendments thereto as soon as reasonablypractical after such filing has been made with the SEC.  Reports may be obtained through the InvestorRelations section of Janus’ website (http://ir.janus.com) or by contactingJanus at (303) 691-3905.  Thecontents of Janus’ website are not incorporated herein for any purpose.

Janus’ Officer Code ofEthics for Principal Executive Officer and Senior Financial Officers (includingits chief executive officer, chief financial officer and controller) (the “OfficerCode”); Corporate Code of Business Conduct and Ethics for all employees;corporate governance guidelines; and the charters of key committees of theboard of directors (including the Audit, Compensation, and Nominating andCorporate Governance committees) are available on its website(http://ir.janus.com/governance.cfm), and printed copies are available to anyshareholder upon request by calling Janus at (303) 691-3905.  Any futureamendments to or waivers of the Officer Code will be posted to the Januswebsite.

**RESULTSOF OPERATIONS**

**Overview**

Janus derivessubstantially all of its revenue and net income from its Investment Managementsegment, which provides investment management and administrative services tomutual funds, separate accounts and institutional clients in both domestic andinternational markets.  Janus providesinvestment advisory services through its primary subsidiaries, Janus CapitalManagement LLC (“JCM” or “Janus ex-INTECH”) and Enhanced Investment Technologies,LLC (“INTECH”).  The Company also owns aprinting and fulfillment business (the “Printing and Fulfillment segment”),which does not contribute significantly to revenue or net income.

10

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Revenues are generallybased upon a percentage of the market value of assets under management and arecalculated as a percentage of the daily average asset balance in accordancewith contractual agreements with the Company’s mutual funds, separate accountsand subadvised relationships (collectively referred to herein as “products” or “investmentproducts”).  Certain investment productsare also subject to performance fees which vary based on their relativeperformance as compared to the benchmark index and the level of assets subjectto such fees.  Assets under managementprimarily consist of domestic and international equity and debtsecurities.  Accordingly, fluctuations inthe financial markets, relative investment performance, sales and redemptionsof investment products, and changes in the composition of assets undermanagement are all factors that have a direct effect on Janus’ operatingresults.

Highlights for thecurrent quarter include:

·                  Asof June 30, 2007, approximately 82%, 77% and 67% of the funds in the Company’sprimary fund family, Janus Investment Fund (“JIF”), were in the top half oftheir Lipper categories on a one-, three- and five-year total return basis,respectively.

·                  Janusex-INTECH achieved positive quarterly flows for the first time since secondquarter 2001.

·                  Netincome of $48.8 million, or $0.27 per diluted share.

·                  A$750.0 million debt offering was completed on June 14, 2007.

·                  Repurchased10.4 million shares of common stock at a total price of $276.5 million.

**INVESTMENT MANAGEMENT SEGMENT**

**Assets Under Management and Flows**
| ** **                       | ** ** | **Three months ended June 30,** | ** ** | **Six months ended June 30,** | ** ** |
|----------------------------------|------------|-----------------------------------------------------|------------|---------------------------------------------------|------------|
| ** **                       | ** ** | **2007**                                            | ** ** | **2006**                                          | ** ** | **2007** | ** ** | **2006** | ** ** |
| ** **                       | ** ** | **(in billions)**                              | ** ** | **(in billions)**                            | ** ** |
|                             |       |                                                |       |                                              |       |   |   |   |   |
| Beginning of  period assets      |       | $                                                   | 176.2      |                                              | $          | 158.1 |   | $ | 167.7 |   | $ | 148.5 |   |
| Long-term sales                  |       |                                                |       |                                              |       |   |   |   |   |
| Janus ex-INTECH                  |       | 8.1                                                 |       | 4.9                                               |       | 15.2 |   | 10.5 |   |
| INTECH                           |       | 4.5                                                 |       | 3.7                                               |       | 9.5 |   | 9.4 |   |
| Long-term redemptions            |       |                                                |       |                                              |       |   |   |   |   |
| Janus ex-INTECH                  |       | (6.6                                                | )          | (7.9                                              | )          | (13.7 | ) | (14.0 | ) |
| INTECH                           |       | (3.2                                                | )          | (1.1                                              | )          | (5.1 | ) | (2.8 | ) |
| Long-term net flows *            |       |                                                |       |                                              |       |   |   |   |   |
| Janus ex-INTECH                  |       | 1.5                                                 |       | (3.0                                              | )          | 1.5 |   | (3.5 | ) |
| INTECH                           |       | 1.3                                                 |       | 2.6                                               |       | 4.4 |   | 6.6 |   |
| Total long-term net flows        |       | 2.8                                                 |       | (0.4                                              | )          | 5.9 |   | 3.1 |   |
| Net money market flows           |       | 1.3                                                 |       | 1.2                                               |       | 2.8 |   | 0.4 |   |
| Market / fund performance        |       | 10.3                                                |       | (5.5                                              | )          | 14.2 |   | 1.4 |   |
| End of period  assets            |       | $                                                   | 190.6      |                                              | $          | 153.4 |   | $ | 190.6 |   | $ | 153.4 |   |
|                             |       |                                                |       |                                              |       |   |   |   |   |
| Average assets under  management |       | $                                                   | 188.2      |                                              | $          | 154.0 |   | $ | 180.2 |   | $ | 154.2 |   |

----

*                    Excludesmoney market flows.  Sales andredemptions of money market funds are presented net on a separate line due tothe short-term nature of the investments.

Average assets undermanagement increased 22.2% and 16.9% for the three- and six-month periods endedJune 30, 2007, respectively, as compared to the same periods in 2006.  The increase in average assets undermanagement is a result of market appreciation/fund performance and positive long-termnet flows.

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**Results of Operations **
| ** **                                                  | ** ** | **Three months ended June 30,** | ** ** | **Six months ended June 30 ** | ** ** |
|-------------------------------------------------------------|------------|-----------------------------------------------------|------------|--------------------------------------------------------|------------|
| ** **                                                  | ** ** | **2007**                                            | ** ** | **2006**                                               | ** ** | **2007** | ** ** | **2006** | ** ** |
| ** **                                                  | ** ** | **(in millions)**                              | ** ** | **(in millions)**                                 | ** ** |
| **Revenues:**                                               |       |                                                |       |                                                   |       |   |   |   |   |
| Investment management fees                                  |       | $                                                   | 220.6      |                                                   | $          | 187.0 |   | $ | 421.5 |   | $ | 372.6 |   |
| Performance fees                                            |       | 3.8                                                 |       | 4.3                                                    |       | 6.3 |   | 8.5 |   |
| Shareowner servicing fees and other                         |       | 48.6                                                |       | 41.8                                                   |       | 93.1 |   | 84.5 |   |
| Total                                                       |       | 273.0                                               |       | 233.1                                                  |       | 520.9 |   | 465.6 |   |
|                                                        |       |                                                |       |                                                   |       |   |   |   |   |
| **Operating  Expenses:**                                    |       |                                                |       |                                                   |       |   |   |   |   |
| Employee compensation and benefits                          |       | 86.8                                                |       | 78.2                                                   |       | 174.2 |   | 161.6 |   |
| Long-term incentive compensation                            |       | 17.0                                                |       | 23.0                                                   |       | 35.7 |   | 45.0 |   |
| Marketing and advertising                                   |       | 5.0                                                 |       | 7.7                                                    |       | 10.1 |   | 13.1 |   |
| Distribution                                                |       | 34.5                                                |       | 27.2                                                   |       | 65.1 |   | 54.0 |   |
| Depreciation and amortization                               |       | 8.7                                                 |       | 8.3                                                    |       | 15.8 |   | 16.6 |   |
| General, administrative and occupancy                       |       | 26.9                                                |       | 31.4                                                   |       | 57.1 |   | 65.1 |   |
| Restructuring and impairments                               |       | —                                              |       | —                                                 |       | 0.4 |   | — |   |
| Mutual fund investigation recoveries                        |       | (0.3                                                | )          | —                                                 |       | (0.8 | ) | (10.0 | ) |
| Total                                                       |       | 178.6                                               |       | 175.8                                                  |       | 357.6 |   | 345.4 |   |
|                                                        |       |                                                |       |                                                   |       |   |   |   |   |
| **Operating  Income**                                       |       | 94.4                                                |       | 57.3                                                   |       | 163.3 |   | 120.2 |   |
| ** **                                                  |       |                                                |       |                                                   |       |   |   |   |   |
| Operating margin                                            |       | 34.6                                                | %          | 24.6                                                   | %          | 31.3 | % | 25.8 | % |
|                                                        |       |                                                |       |                                                   |       |   |   |   |   |
| Interest expense                                            |       | (11.5                                               | )          | (7.2                                                   | )          | (21.0 | ) | (14.2 | ) |
| Other income,  net                                          |       | 5.0                                                 |       | 7.2                                                    |       | 11.4 |   | 15.7 |   |
| Income before  taxes, equity earnings and minority interest |       | 87.9                                                |       | 57.3                                                   |       | 153.7 |   | 121.7 |   |
| Income tax  provision                                       |       | (32.9                                               | )          | (20.9                                                  | )          | (56.3 | ) | (44.3 | ) |
| Equity in  earnings of unconsolidated affiliate             |       | 1.7                                                 |       | 2.0                                                    |       | 3.4 |   | 3.7 |   |
| Minority  interest in consolidated earnings                 |       | (5.1                                                | )          | (5.2                                                   | )          | (11.2 | ) | (10.6 | ) |
|                                                        |       |                                                |       |                                                   |       |   |   |   |   |
| **Net Income**                                              |       | $                                                   | 51.6       |                                                   | $          | 33.2 |   | $ | 89.6 |   | $ | 70.5 |   |

 

##### **ThreeMonths Ended June 30, 2007, Compared with Three Months Ended June 30, 2006**

***Revenues***

Investment managementfees increased $33.6 million, or 18.0%, as a result of the increase in averageassets under management partially offset by a higher proportion of loweryielding INTECH products.

Performance fees havehistorically been earned on certain INTECH institutional accounts.  The decline in performance fee revenue wasprimarily the result of relative underperformance of certain INTECH accountspartially offset by the conversion of certain mutual funds to a performance feestructure in the first quarter 2007.

Shareowner servicing feesand other revenue improved over the comparable prior year period primarily as aresult of an increase in transfer agent fees which are based on average JIFassets under management, excluding money market assets.  Average JIF assets increased 16.3% oversecond quarter 2006.

***Expenses***

Employee compensation andbenefits increased from the same period last year, principally due to higherbase salaries, companywide bonus accrual and commissions.  Base salaries increased $2.4 million fromannual merit raises and growth in the number of employees. The annualcompanywide bonus accrual increased $4.4 million as a result of an increase inheadcount and anticipated 2007 revenue growth and improvements in operatingresults.  Investment management incentivecompensation was down slightly as a result of a new investment teamcompensation plan implemented in the first quarter 2007. The new plan continuesto be linked to individual long-term performance, but also ties the aggregatelevel of compensation to investment management fee revenue.  As management fee revenue increases,investment management compensation is expected to increase as well.

12

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Long-term incentivecompensation declined quarter-to-quarter due to the final vesting of the 2002restricted stock grant in the first quarter 2007, partially offset by anincrease related to the 2007 annual grant awarded in February and a $2.5million charge for departure-related accelerated vesting of long-term incentiveawards.

Distribution expenseincreased $7.3 million or 26.8%, primarily as a result of the growth in assetsunder management subject to third-party concessions.  Distribution fees are calculated based on acontractual percentage of the market value of assets under managementdistributed through third-party intermediaries.

General, administrativeand occupancy expense decreased $4.5 million primarily due to the release of$6.3 million of legal reserves.

Interest expense for thethree months ended June 30, 2007, increased $4.3 million as a result of anincrease in outstanding debt from $375.7 million as of June 30, 2006 to$1,127.6 million as of June 30, 2007.

Other income decreased$2.2 million as a result of lower realized gains from sales of investments andlower interest income due to a decline in the average cash balance quarter overquarter.

##### **SixMonths Ended June 30, 2007, Compared with Six Months Ended June 30, 2006**

***Revenues***

Investment managementfees increased $48.9 million, or 13.1%, as a result of a 16.9% increase inaverage assets under management partially offset by a higher proportion oflower yielding INTECH products.

Performance fees declined$2.2 million as a result of the relative underperformance of certain INTECHaccounts, partially offset by mutual fund performance fees of $2.3 million.

Shareowner servicing feesand other revenue increased $8.6 million, or 10.2%, primarily as a result ofhigher transfer agent fees driven by an 11.5% growth in JIF average assetsunder management.

***Expenses***

Employee compensation andbenefits increased $12.6 million due to higher base salaries, companywide bonusaccrual and commissions.  Commissionsincreased $2.1 million as a result of higher fund sales.

Long-term incentivecompensation decreased $9.3 million as a result of the final vesting of the2002 restricted stock grant, partially offset by an increase related to the2007 annual grant and departure-related acceleration of awards.  Grants made during the six months ended June30, 2007, totaled $63.7 million and will be recognized over a weighted averageperiod of 4.0 years, assuming no acceleration of vesting.  These awards are subject to acceleratedvesting if certain performance criteria are achieved.

Marketing and advertisingexpenses were down $3.0 million in the current period primarily as a resulthigher fund proxy costs in the comparable prior year period.  Janus anticipates that full year 2007marketing and advertising costs will be $7.0 to $10.0 million higher thanfull year 2006 as the Company focuses additional spending on the promotion andawareness of the Janus brand.

Distribution expenseincreased $11.1 million as a result of the growth in assets under managementsubject to third-party concessions.

General, administrativeand occupancy expense decreased $8.0 million primarily due to the release of$6.3 million of legal reserves.

The decrease in otherincome is primarily attributable to a prior period gain of $4.5 million on thesale of certain investments in advised funds as compared to a current year gainof $1.2 million.

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**PRINTING AND FULFILLMENT SEGMENT**

**Business Overview**

Rapid Solutions Group (“RSG”),the operating business of the Printing and Fulfillment segment, providesclients with digital and offset printing and fulfillment services.  The digital operation focuses on providingclients with communication solutions using leading-edge print-on-demandtechnology and software applications that support the process of improving theeffectiveness of customer communication through personalization andcustomization. * *Theoffset printing operations provide customers with full-service graphics anddesign solutions through prepress services and high-speed, high-quality offsetprinting, including direct marketing packages, brochures, preprinted base stockand collateral pieces.

**Results of Operations**
| ** **                                    | ** ** | **Three months ended June 30,** | ** ** | **Six months ended June 30,** | ** ** |
|-----------------------------------------------|------------|-----------------------------------------------------|------------|---------------------------------------------------|------------|
| ** **                                    | ** ** | **2007**                                            | ** ** | **2006**                                          | ** ** | **2007** | ** ** | **2006** | ** ** |
| ** **                                    | ** ** | **(in millions)**                              | ** ** | **(in millions)**                            | ** ** |
| ** **                                    |       |                                                |       |                                              |       |   |   |   |   |
| Printing and  fulfillment revenue             |       | $                                                   | 16.9       |                                              | $          | 17.3 |   | $ | 34.5 |   | $ | 36.1 |   |
| Out-of-pocket  reimbursements                 |       | 5.0                                                 |       | 4.2                                               |       | 10.9 |   | 9.0 |   |
| Total revenue                                 |       | 21.9                                                |       | 21.5                                              |       | 45.4 |   | 45.1 |   |
|                                          |       |                                                |       |                                              |       |   |   |   |   |
| Cost of printing  and fulfillment             |       | 17.4                                                |       | 17.4                                              |       | 34.9 |   | 35.9 |   |
| Out-of-pocket  expenses                       |       | 5.0                                                 |       | 4.2                                               |       | 10.9 |   | 9.0 |   |
| Selling, general  and administrative expenses |       | 2.7                                                 |       | 2.1                                               |       | 5.4 |   | 4.1 |   |
| Depreciation and  amortization                |       | 2.0                                                 |       | 1.9                                               |       | 4.1 |   | 3.9 |   |
| **Operating  loss**                           |       | (5.2                                                | )          | (4.1                                              | )          | (9.9 | ) | (7.8 | ) |
| Operating margin                              |       | -24                                                 | %          | -19                                               | %          | -22 | % | -17 | % |
|                                          |       |                                                |       |                                              |       |   |   |   |   |
| Other income,  net                            |       | 0.6                                                 |       | 0.6                                               |       | 1.3 |   | 1.1 |   |
| Tax benefit                                   |       | 1.8                                                 |       | 1.4                                               |       | 3.4 |   | 2.6 |   |
| **Net loss**                                  |       | $                                                   | (2.8       | )                                                 | $          | (2.1 | ) | $ | (5.2 | ) | $ | (4.1 | ) |

 

Print volumes and revenuefrom fulfillment, digital printing and offset printing were down from the prioryear.  Operating expenses increased andmargins declined as a result of higher general and administrative costs.  Out-of-pocket reimbursements representpostage and mailing expenses incurred by RSG on behalf of its customers andgenerally vary from period to period.

**LIQUIDITYAND CAPITAL RESOURCES**

**CashFlows**

A summary ofconsolidated cash flow data for the six-month periods ended June 30, 2007 and2006 is as follows *(in millions)*:

|                                          | ** ** | **2007** | ** **  | **2006** | ** ** |
|------------------------------------------|------------|----------|-------------|----------|------------|
| Cash flows  provided by (used for):      |       |     |        |     |       |
| Operating activities                     |       | $        |  109.8 |     | $          |  146.8 |   |
| Investing activities                     |       | (34.9    | )           | (117.8   | )          |
| Financing activities                     |       | 107.5    |        | (243.7   | )          |
| Net change in  cash and cash equivalents |       | 182.4    |        | (214.7   | )          |
| Balance  beginning of period             |       | 559.7    |        | 552.6    |       |
| Balance end of period                    |       | $        |  742.1 |     | $          |  337.9 |   |

 

Janus’ cash flow fromoperations historically has been positive and sufficient to fund ordinaryoperations and capital requirements. Cash provided by operating activities for the six months ended June 30,2007, was down 

14

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from the cash provided byoperating activities for the prior year period as a result of changes inworking capital items, which can vary from period to period based on the timingof cash receipts and payments.

Cash used for investingactivities for the six months ended June 30, 2007, includes $81.0 million forthe purchase of an additional 4% interest in INTECH and $56.8 million ofproceeds from the net sale of investments. Cash provided by investing activities for the comparable prior yearperiod primarily represents an acquisition of a 5% interest in INTECH and thenet purchase of investments.

Cash provided byfinancing activities for the six months ended June 30, 2007, includes $748.4million of proceeds from the issuance of long-term debt, offset by the debtrepayment of $158.1 million and stock buybacks of $491.7 million.  Cash used for financing activities for thecomparable prior year primarily represents stock buybacks of $250.3 million.

**Other Sources of Liquidity**

*Credit Facility*

On June 1, 2007, theCompany and the syndicate of banks amended the existing $200 million Three-YearCompetitive Advance and Revolving Credit Facility Agreement (the “CreditFacility”).  Under the amended CreditFacility, the bank syndicate’s commitment has been increased to $350 millionand the maturity date has been extended from October 19, 2008 to June 1,2012.  The Credit Facility contains anumber of financial covenants including a specified financing leverage ratioand interest coverage ratio.  At June 30,2007, there were no borrowings under the Credit Facility.

*Shelf Registration*

In June 2007, the Companyfiled a new Shelf Registration Statement (“Shelf Registration”) on Form S-3that registered an indeterminate amount of Janus’ common stock, preferred stockand debt securities.  This ShelfRegistration was effective immediately upon filing under new Securities andExchange Commission regulations permitting “well-known seasoned issuers” toregister an unlimited amount of securities to be issued from time to time atindeterminate prices.  The ShelfRegistration replaces the $325 million remaining under Janus’ previous shelfregistration.  The issuances of debtdescribed below were issued under the Shelf Registration.

*Debt*

On June 14, 2007, Janusissued $300.0 million of 6.250% Senior Notes due June 15, 2012, and $450.0million of 6.700% Senior Notes due June 15, 2017 (collectively the “2007 seniornotes”).  Interest will be paidsemiannually on June 15 and December 15 of each year, beginning December 15,2007.   The proceeds from the June 14,2007 issuances were $748.4 million.  OnJune 26, 2007, approximately $160.0 million of the total proceeds were used torepay the 7.875% Senior Notes due 2032 plus accrued and unpaid interest as ofthe redemption date.  The remainingproceeds may be used for possible future acquisitions, the repurchase of Janus’common stock, and/or general corporate purposes.

If the Companyexperiences a change of control and the 2007 senior notes are rated belowinvestment grade by Standard & Poor’s Rating Service (“S&P”) or Moody’sInvestors Service, Inc. (“Moody’s”), the Company must offer to repurchase allof the 2007 senior notes at a price equal to 101% of the principal amount plusaccrued and unpaid interest to the repurchase date.

The terms of the 2007senior notes also include an interest rate adjustment covenant that providesthat the interest rate payable on 2007 senior notes will increase by 25 basispoints for each level that the Company’s debt rating is decreased by Moody’sfrom its existing rating of Baa3 or by S&P from its existing rating ofBBB-, up to a maximum increase of 200 basis points.  If at any time after the interest on the newnotes has been adjusted upward, either Moody’s or S&P increases its ratingon the new notes, then for each level of such increase in the rating theinterest payable on the new notes will be decreased by 25 basis points, but inno event to a rate less than the interest rate payable on the date of theirissuance.  The interest rate adjustmentcovenant will permanently terminate  ifthe new notes become rated Baa2 by Moody’s and BBB by S&P (or higher), witha stable or positive outlook regardless of any subsequent decrease in theratings by either or both rating agencies.

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In addition, Janusentered into supplemental indentures to add the same interest rate adjustmentcovenant to the terms of all of its outstanding 5.875% Senior Notes dueSeptember 15, 2011, 6.119% Senior Notes due April 15, 2014, and 7.750% SeniorNotes due June 15, 2009.

Annual interest expense isexpected to increase approximately $36.6 million from the issuance of debt onJune 14, 2007 and the debt repayment on June 26, 2007.

*INTECH Put/Call Rights*

Each fiscal yearbeginning in 2008 and terminating in 2012, each of the two INTECH foundingmembers has the option to require Janus to purchase up to approximately 25% oftheir current holdings of INTECH shares (“Annual Option Shares”) at the fair marketvalue on the date of exercise based on a valuation by an independent investmentbank.  As of June 30, 2007, each of thetwo founders owns approximately 6% of INTECH. In the event that either INTECH founder does not fully exercise hisannual voluntary sale option in a given year, Janus has the option to requirethe INTECH founder to sell the remaining balance of the Annual Option Shares atfair market value on the date of exercise.

In addition, thefounders can require Janus to purchase their INTECH interests when the founder’semployment is terminated.  The purchaseprice of the departing founder’s INTECH interests will be based on the fairmarket value on the date of exercise based on a valuation by an independentinvestment bank.  Each founder is entitledto retain approximately twenty percent of his current INTECH shares afteremployment until his death unless he is terminated for cause or leavesvoluntarily while not in good standing . An INTECH founder will be deemed to be in good standing if hevoluntarily leaves on or after January 1, 2009, after providing 12 months’prior notice and provided he cooperates with the transition.

**Item 3.**                          Quantitativeand Qualitative Disclosures About Market Risk

TheCompany has had no significant changes in its exposure to market risks fromthat previously reported in the Company’s Annual Report on Form 10-K for theyear ended December 31, 2006 other than the potential change in interest rateson the Company’s debt in the event of a change in credit ratings by Moody’s orS&P.  See discussion of debt in Part1, Item 2 - Liquidity and Capital Resources.

**Item 4.**                          Controlsand Procedures

Janus’ managementevaluated the effectiveness of the design and operation of its disclosurecontrols and procedures (as such term is defined in Rules 13a-15(e) and15d-15(e) under the Exchange Act) as of June 30, 2007.  Disclosure controls and procedures are thecontrols and other procedures that the Company designed to ensure that itrecords, processes, summarizes and reports in a timely manner the informationit must disclose in reports that it files with or submits to the SEC.  Gary Black, Chief Executive Officer, andGregory Frost, Senior Vice President and Chief Financial Officer, reviewed andparticipated in this evaluation.  Based onthis evaluation, Messrs. Black and Frost concluded that as of the date of theirevaluation, Janus’ disclosure controls and procedures were effective.

There has been no changein Janus’ internal controls over financial reporting (as such term is defined inRules 13a-15(e) and 15d-15(e) under the Exchange Act) during the three monthsended June 30, 2007, that has materially affected, or is reasonably likely tomaterially affect, Janus’ internal controls over financial reporting.

 

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**PART II —OTHER INFORMATION**

**Item 1.**                          LegalProceedings

See Part I, Item 1.Financial Statements, Note 9 — Legal Proceedings.

**Item 1A.**                 Risk Factors

TheCompany has had no significant changes in its risk factors from thosepreviously reported in the Company’s Annual Report on Form 10-K for the yearended December 31, 2006 other than those listed below:

*Janus’ results are dependent on its ability toattract and retain key personnel.*

The investmentmanagement business is highly dependent on the ability to attract, retain andmotivate highly skilled, and often highly specialized, technical, executive,sales and management personnel.  Themarket for investment and sales professionals is extremely competitive and isincreasingly characterized by the frequent movement of portfolio managers,analysts and salespersons among different firms.  Any cost reduction initiative, changesto management structure, shifts in corporate culture, changes to corporategovernance authority, or adjustments orreductions to compensation (including, but not limited to, theimplementation of the new portfolio managers’ compensation program that is tiedto the Company’s revenue) could result in legal claims and could impact Janus’ability to retain key personnel.  IfJanus is unable to retain key personnel, it could have an adverse effect onJanus’ results of operations and financial condition.  Additionally, portfolio managers andsalespersons often maintain relationships with their clients.  As such, the departure of a portfolio manageror salesperson may cause the loss of clients, which could have an adverseeffect on Janus’ results of operations and financial condition.

*Janus’substantial indebtedness could adversely affect its financial condition andresults of operations.*

As a result of thesuccessful completion of the $750 million debt offering in June 2007, Janus hasa significant amount of indebtedness which could limit our ability to obtainadditional financing for working capital, capital expenditures, stockrepurchases, acquisitions, debt service requirements or other purposes.  It may also increase Janus’ vulnerability toadverse economic, market and industry conditions, limit Janus’ flexibility inplanning for, or reacting to, changes in business operations or to the assetmanagement industry overall, and place Janus at a disadvantage in relation tocompetitors that have lower debt levels. Any or all of the above events and/or factors could have an adverseeffect on results of operations and financial condition.

**Item 2.**                          UnregisteredSales of Equity Securities and Use of Proceeds

On January 23, 2007, Janus’ Board ofDirectors authorized the repurchase of up to an additional $500million of Janus common stock with no expiration date, to take effect when theprior authorization was fully utilized, which occurred on February 27,2007.   On July 24, 2007, Janus’Board of Directors authorized another $500 million stock repurchase program totake effect when the current authorization is utilized.  During the first six months of 2007, Janusrepurchased 19.8 million shares at an aggregate cost of $476.7 million underthe current and previous authorizations. The Company cautions that there are no assurances that any futurerepurchases will actually occur.

In addition to thisprogram, for the six months ended June 30, 2007, Janus repurchased 710,154shares from employees as a part of a share withholding program (establishedunder Rule 10b5-1 of the Securities Exchange Act of 1934) to satisfy employees’income tax liabilities attributable to the vesting of restricted stock awards,and 178 shares were surrendered to Janus related to the exercise of stockoptions.

17

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| **Period** | ** ** | **(a) Total  Number of  Shares (or  Units)  Purchased** | ** ** | **(b) Average Price  Paid Per Share  (or Unit)** | ** ** | **(c) Total Number of  Shares (or Units)  Purchased as Part  of Publicly Announced  Plans or Programs** | ** **     | **(d) Maximum Number  (or Approximate Dollar  Value) of Shares (or Units)  that May Yet Be Purchased  Under the Plans or  Programs (End of Month)** | ** ** |
|------------|------------|------------------------------------------------------------------------|------------|---------------------------------------------------------------------------|------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|
| January    |       | 2,195,910                                                              |       | $                                                                         | 21.06      |                                                                                                                                                           | 2,098,186      |                                                                                                                                                                                                                                          | $          | 587 million |   |
| February   |       | 4,944,512                                                              |       | $                                                                         | 21.71      |                                                                                                                                                           | 4,761,600      |                                                                                                                                                                                                                                          | $          | 483 million |   |
| March      |       | 2,970,268                                                              |       | $                                                                         | 20.48      |                                                                                                                                                           | 2,575,500      |                                                                                                                                                                                                                                          | $          | 431 million |   |
| April      |       | 1,590,557                                                              |       | $                                                                         | 23.60      |                                                                                                                                                           | 1,590,557      |                                                                                                                                                                                                                                          | $          | 393 million |   |
| May        |       | 3,814,728                                                              |       | $                                                                         | 26.10      |                                                                                                                                                           | 3,779,800      |                                                                                                                                                                                                                                          | $          | 294 million |   |
| June       |       | 5,024,181                                                              |       | $                                                                         | 27.91      |                                                                                                                                                           | 5,024,181      |                                                                                                                                                                                                                                          | $          | 154 million |   |
| **Total**  | ** ** | **20,540,156**                                                         | ** ** | **$**                                                                     | **23.94**  | ** **                                                                                                                                                     | **19,829,824** | ** **                                                                                                                                                                                                                                    | ** ** | ** ** |

 

**Item 4.**                          Submissionof Matters to a Vote of Security Holders

The Annual Meetingof Stockholders of Janus Capital Group Inc. was held in Denver, Colorado, onMay 1, 2007.  At that meeting, the stockholdersconsidered and acted upon the following proposals:

*Proposal 1. The Election of Directors.*  By the vote reflected below, the stockholderselected the following individuals as directors for three-year terms:

| Director           | ** ** | **For**     | ** ** | **Against** | ** ** | **Abstain** | ** ** |
|--------------------|------------|-------------|------------|-------------|------------|-------------|------------|
| G. Andrew Cox      |       | 155,023,339 |       | 11,771,832  |       | 2,343,827   |       |
| Deborah R.  Gatzek |       | 159,346,035 |       | 8,617,440   |       | 1,175,523   |       |
| Robert T. Parry    |       | 160,538,699 |       | 7,417,078   |       | 1,183,221   |       |
| Jock Patton        |       | 160,498,184 |       | 7,438,822   |       | 1,201,992   |       |

 

*Proposal 2.*  *Ratification of Independent Auditors. *The stockholders voted to ratifythe appointment of Deloitte & Touche LLP as independent auditors.

This proposal is fully described in the ProxyStatement.  Voting was as follows:

|            | ** ** | **For**     | ** ** | **Against** | ** ** | **Abstain** | ** ** |
|------------|------------|-------------|------------|-------------|------------|-------------|------------|
| Proposal 2 |       | 165,662,749 |       | 2,179,226   |       | 1,297,023   |       |

** **

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**Item 6. Exhibits**
| 10.1   |   | Summary of Janus Capital Group Inc. Outside Director  Compensation Program                                                                                                                                      |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                            |
| 31.1   |   | Certification of Gary D. Black, Chief Executive  Officer of Registrant                                                                                                                                          |
|   |   |                                                                                                                                                                                                            |
| 31.2   |   | Certification of Gregory A. Frost, Senior Vice  President and Chief Financial Officer of Registrant                                                                                                             |
|   |   |                                                                                                                                                                                                            |
| 32.1   |   | Certification of Gary D. Black, Chief Executive  Officer of Registrant, pursuant to 18 U.S.C. Section 1350, as adopted  pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                               |
|   |   |                                                                                                                                                                                                            |
| 32.2   |   | Certification of Gregory A. Frost, Senior Vice  President and Chief Financial Officer of Registrant, pursuant to 18 U.S.C.  Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of  2002 |
|   |   |                                                                                                                                                                                                            |
| 99.1   |   | Lipper Rankings                                                                                                                                                                                                 |

 

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**SIGNATURES**

Pursuantto the requirements of the Securities Exchange Act of 1934, the registrant hasduly caused this report to be signed on its behalf by the undersigned thereuntoduly authorized.

Date:July 30, 2007

| Janus Capital Group Inc.                                                                             |   |
|------------------------------------------------------------------------------------------------------|--------|
|                                                                                                 |   |
| /s/ Gary D. Black                                                                                    |   |
| Gary D. Black,  Chief Executive Officer                                                              |   |
|                                                                                                 |   |
|                                                                                                 |   |
| /s/ Gregory A. Frost                                                                                 |   |
| Gregory A. Frost,  Senior Vice President and  Chief Financial Officer  (Principal Financial Officer) |   |
|                                                                                                 |   |
|                                                                                                 |   |
| /s/ Robert W. Blakley                                                                                |   |
| Robert W. Blakley  Vice President and Controller  (Principal Accounting Officer)                     |   |

 

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**JANUS CAPITAL GROUP INC.INDEX TO EXHIBITS**
| Exhibit No. | ** ** | **Document**                                                                                                                                                                                                    | ** ** | **Regulation S-K  Item 601 (b)  Exhibit No.** |
|-------------|------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|-----------------------------------------------|
| 10.1        |       | Summary of Janus Capital Group Inc. Outside Director  Compensation Program                                                                                                                                      |       | 10                                            |
|        |       |                                                                                                                                                                                                            |       |                                          |
| 31.1        |       | Certification of Gary D. Black, Chief Executive  Officer of Registrant                                                                                                                                          |       | 31                                            |
|        |       |                                                                                                                                                                                                            |       |                                          |
| 31.2        |       | Certification of Gregory A. Frost, Senior Vice  President and Chief Financial Officer of Registrant                                                                                                             |       | 31                                            |
|        |       |                                                                                                                                                                                                            |       |                                          |
| 32.1        |       | Certification of Gary D. Black, Chief Executive  Officer of Registrant, pursuant to 18 U.S.C. Section 1350, as adopted  pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                               |       | 32                                            |
|        |       |                                                                                                                                                                                                            |       |                                          |
| 32.2        |       | Certification of Gregory A. Frost, Senior Vice  President and Chief Financial Officer of Registrant, pursuant to 18 U.S.C.  Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of  2002 |       | 32                                            |
|        |       |                                                                                                                                                                                                            |       |                                          |
| 99.1        |       | Lipper Rankings                                                                                                                                                                                                 |       | 99                                            |

 

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