CHICAGO, Feb. 15, 2012 /PRNewswire/ -- Morningstar, Inc.
(NASDAQ: MORN), a leading provider of independent investment
research, today announced its fourth-quarter and full-year 2011
financial results. The company reported consolidated revenue of
$158.6 million in the fourth quarter
of 2011, a 4.9% increase from $151.2
million in the fourth quarter of 2010. Consolidated
operating income was $34.1 million in
the fourth quarter of 2011, an increase of 5.7% compared with
$32.3 million in the same period a
year ago. Net income was $28.0
million, or 55 cents per
diluted share, in the fourth quarter of 2011, compared with
$23.5 million, or 46 cents per diluted share, in the fourth quarter
of 2010.
Excluding acquisitions and the effect of foreign currency
translations, revenue rose 4.6% in the fourth quarter of 2011.
Revenue excluding acquisitions and foreign currency translations
(organic revenue) is a non-GAAP measure; the accompanying financial
tables contain a reconciliation to consolidated revenue.
For the year ended Dec. 31, 2011,
revenue was $631.4 million, an
increase of 13.7% compared with $555.4
million in 2010. Revenue for the year included $15.3 million from acquisitions completed in 2010
and $10.1 million from foreign
currency translations. Excluding acquisitions and foreign currency
translations, revenue rose 9.1%. Consolidated operating income
increased 14.3% to $138.4 million,
compared with $121.1 million in 2010.
Net income was $98.4 million, or
$1.92 per diluted share, compared
with $86.4 million, or $1.70 per diluted share, in 2010.
Joe Mansueto, chairman and chief
executive officer of Morningstar, said, "We made solid progress in
2011. Our total revenue surpassed the $600
million mark, and organic revenue rose 9%, despite continued
market volatility. Morningstar Direct and Investment Consulting
were the main drivers of organic growth for the year. Operating
margin was flat year over year, partly because of higher salaries
and other compensation-related expense."
He added, "Revenue was down slightly in the fourth quarter on a
sequential basis, mainly because of a slowdown in the market and a
weaker new-issue pipeline for commercial mortgage-backed
securities. We're more encouraged by market conditions, though, as
we enter 2012."
Mansueto outlined some of the company's key accomplishments and
challenges in 2011:
Accomplishments:
- The highlight of the year was the launch of our new
forward-looking Analyst Rating for funds and Global Fund Reports.
The new ratings—Gold, Silver, Bronze, Neutral, and Negative—are
based on a rigorous qualitative research framework developed by our
global fund analyst team.
- Morningstar Direct, our research platform for institutions, had
another record year with a 29% increase in net new seats sold
globally, bringing our total to 6,144.
- We rated 32% of all new-issue commercial mortgage-backed
securities (CMBS) transactions in 2011. We slightly increased our
market share, but the meaningful news is we were the number three
player in terms of transactions rated. We also announced a
surveillance service for residential mortgage-backed securities
(RMBS).
- We made good progress consolidating our Investment Management
businesses into one global division. We established a global
investment capability team, providing the foundation to realize our
vision of global capabilities and local delivery.
- Quality continues to be a key area of focus. We significantly
strengthened the quality of our European data. We're now supplying
daily fund pricing data to the Financial Times, and we've
also been appointed by the Investment Management Association (IMA)
in the UK to monitor investment funds classified to IMA
sectors.
- Three fund companies launched 18 new ETFs based on the
Morningstar Indexes. The iShares High Dividend Equity ETF, which is
linked to the Morningstar Dividend Yield Focus Index, gathered more
assets than any other U.S. ETF launched in 2011.
- We were named one of the "100 Best Companies to Work For" by
FORTUNE Magazine. Making Morningstar a great place to work is a
priority for all of our leaders, and it's gratifying to receive
this recognition.
Challenges:
- Although the market was slightly positive for the year, it was
also volatile, which creates uncertainty and slows purchasing
decisions across our three key audiences: individual investors,
advisors, and institutions. Global economic issues, as well as
record low interest rates in the United
States, affected our clients' profits. Several variable
annuity firms exited the market. All of these factors created
headwinds for our business.
- Managed retirement assets rose slightly, but we still have work
to do in this area to increase our penetration rate among eligible
plan participants.
- Individual investors continue to be cautious about their
investment research spending. Our U.S. Premium Membership
subscriptions were 6% lower this year. That said, we have a large
audience of engaged investors, and time spent on Morningstar.com
per visit is the highest among investing sites.
- Although our European operations had strong revenue growth,
revenue in our Australian business declined, mainly because of a
difficult business environment for investment consulting as well as
advertising sales.
International Operations: Revenue from international operations
was $46.5 million in the fourth
quarter of 2011, an increase of 4.6% from the same period a year
ago. Foreign currency translations had a slightly favorable effect.
Excluding acquisitions and foreign currency translations,
international revenue rose 4.2%.
For the full year, international revenue increased $27.8 million, or 17.7%, including $5.6 million from acquisitions and $10.1 million from foreign currency translations.
Excluding acquisitions and foreign currency translations,
international revenue improved 7.7%. International revenue
excluding acquisitions and foreign currency translations is a
non-GAAP measure; the accompanying financial tables contain a
reconciliation to international revenue.
Operating Income: Consolidated operating income was
$34.1 million in the fourth quarter
of 2011, a 5.7% increase from the same period in 2010. Operating
expense rose $5.6 million, or 4.7%,
in the fourth quarter of 2011. The company completed seven
acquisitions in 2010. Because of the timing of these acquisitions,
results for both periods in 2011 include operating expense that did
not exist in the same periods in 2010.
The largest factor behind the operating expense increase was
salary expense, which rose $5.7
million, or 12%, in the fourth quarter of 2011, reflecting
salary increases made in July 2011
and additional headcount. In addition, higher sales commissions,
rent, and professional fees contributed approximately $4 million to the operating expense increase.
These increases were partially offset because the company
capitalized $2.7 million of operating
expense in the quarter for software development within several
businesses compared with $0.8 million
in the fourth quarter of 2010. In addition, operating expense in
the fourth quarter of 2010 included $2.0
million related to a previously announced separation
agreement between Morningstar and the former head of Morningstar
Associates. This expense did not recur in 2011. In addition, bonus
expense declined $0.7 million in the
fourth quarter of 2011 compared with the prior-year period.
Morningstar had approximately 3,465 employees worldwide as of
Dec. 31, 2011, compared with 3,225 as
of Dec. 31, 2010. Headcount grew year
over year mainly because of continued hiring in the company's
development centers in China and
India as well as in the United States.
Operating margin was 21.5% in the fourth quarter of 2011,
compared with 21.4% in the same period in 2010. In 2011, operating
margin was 21.9%, compared with 21.8% in 2010. The relatively flat
margin in both periods, compared with the prior-year periods,
mainly reflects higher salaries and other compensation-related
expense as a percentage of revenue offset by higher capitalized
operating expense for software development as a percentage of
revenue. Capitalized operating expense contributed 1.2 percentage
points to the margin improvement in the fourth quarter and 0.7
percentage points in the full year.
Effective Tax Rate: Morningstar's effective tax rate in
the fourth quarter of 2011 was 22.4%, a decrease of 6.6 percentage
points compared with 29.0% for the fourth quarter of 2010. The
fourth-quarter 2011 effective tax rate was positively affected by
higher estimated tax credits and incentives, effects of tax audit
settlements, and the recognition of certain deferred income tax
benefits.
In 2011, the company's effective tax rate was 30.7%, a decrease
of 2.4 percentage points compared with 33.1% for 2010. The decrease
primarily reflects the positive effect of higher estimated tax
credits and incentives (some of which relate to prior years),
effects of tax audit settlements, and the recognition of certain
deferred income tax benefits. Additionally, in 2010, the use of
foreign net operating losses that had previously been subject to a
valuation allowance reduced the effective tax rate. This benefit
did not recur in 2011.
Free Cash Flow: Morningstar generated free cash flow of
$50.0 million in the fourth quarter
of 2011, reflecting cash provided by operating activities of
$58.6 million and $8.6 million of capital expenditures. Free cash
flow improved by $13.8 million
compared with the fourth quarter of 2010 as cash provided by
operating activities was up $15.4
million and capital expenditures rose $1.6 million.
In 2011, Morningstar generated free cash flow of $141.7 million, reflecting cash provided by
operating activities of $165.0
million and capital expenditures of $23.3 million. Cash provided by operating
activities in 2011 rose $41.6
million, primarily reflecting the positive effect of changes
in operating assets and liabilities and higher net income (adjusted
for non-cash items), partially offset by a $16.1 million increase in bonuses paid in the
first quarter of 2011.
Free cash flow is a non-GAAP measure; the accompanying financial
tables contain a reconciliation to cash provided by operating
activities. Morningstar defines free cash flow as cash provided by
or used for operating activities less capital expenditures.
As of Dec. 31, 2011, Morningstar
had cash, cash equivalents, and investments of $470.2 million, compared with $365.4 million as of Dec.
31, 2010. Morningstar expects to make annual bonus payments
of approximately $43 million in the
first quarter of 2012, compared with $37.5
million in the first quarter of 2011. In 2011, the company
used $40.7 million of cash for its
stock repurchase program. Of the $300
million authorized under the program, Morningstar has
purchased 798,337 shares for $44.5
million as of Dec. 31,
2011.
Business Segment Performance
Investment Information Segment: The largest products and
services in this segment based on revenue are Morningstar® Licensed
Data; Morningstar® Advisor Workstation(SM) (including Morningstar Office); Morningstar.com®, including
Premium Memberships and Internet advertising sales; and Morningstar
Direct(SM).
- Revenue was $126.6 million in the
fourth quarter of 2011, up 5.2% from $120.4
million in the fourth quarter of 2010.
- Acquisitions contributed revenue of $0.3
million in the fourth quarter of 2011.
- Morningstar Direct, Integrated Web Tools, and Licensed Data
were the major contributors to organic revenue growth. Licenses for
Morningstar Direct rose 28.7% to 6,144. Premium Membership
subscriptions for Morningstar.com fell 5.6% to 130,354. Principia
subscriptions were down 4.3% to 31,270, and Advisor Workstation
licenses rose slightly to 160,287.
- Operating income was $30.7
million in the fourth quarter of 2011, compared with
$31.6 million in the same period in
2010. Operating expense in this segment rose $7.2 million, or 8.1%, primarily because of
higher salaries and, to a lesser extent, higher bonus and
commission expense.
- Operating margin was 24.2% in the fourth quarter of 2011 versus
26.3% in the prior-year period. The margin decline primarily
reflects higher salaries and, to a lesser extent, bonus expense as
a percentage of revenue. Acquisitions did not significantly affect
this segment's operating margin.
Investment Management Segment: The largest products in this
segment based on revenue are Investment Consulting; Retirement
Solutions, including Advice by Ibbotson® and Morningstar®
Retirement Manager(SM); and Morningstar® Managed
Portfolios(SM).
- Revenue was $32.0 million in the
fourth quarter of 2011, a 3.8% increase from $30.8 million in the same period in 2010. The
revenue increase was smaller than the growth in average assets
because assets as of Dec. 31, 2011
(described below) include additional assets for existing
fund-of-funds programs for which Morningstar now receives
asset-based fees versus flat fees.
- Retirement Solutions, Morningstar Managed Portfolios, and
Investment Consulting all made positive contributions to revenue
growth.
- Assets under advisement and management for Investment
Consulting were $140.4 billion as of
Dec. 31, 2011, compared with
$111.4 billion as of Dec. 31, 2010. More than 75% of the increase
reflects additional assets for existing fund-of-funds programs for
which Morningstar now receives asset-based fees. The rest of the
increase reflects net client flows and market performance. Assets
under management and advisement for Retirement Solutions were
$37.4 billion as of Dec. 31, 2011, versus $35.1 billion as of Dec.
31, 2010. Assets under management for Morningstar Managed
Portfolios were $3.0 billion as of
Dec. 31, 2011, compared with
$2.7 billion as of Dec. 31, 2010.
- Operating income was $16.1
million in the fourth quarter of 2011, an increase of 2.4%
compared with the fourth quarter of 2010. Operating expense in the
segment was $15.9 million, an
increase of $0.8 million compared
with the fourth quarter of 2010. Higher non-U.S. operating expense
as well as higher professional fees in the United States were partially offset by
lower bonus expense. In addition, the company's 2010 results
included $2.0 million related to a
previously announced separation agreement between Morningstar and
the former head of Morningstar Associates.
- Operating margin was 50.2% in the fourth quarter of 2011 versus
50.9% in the prior-year period, because of higher expense outside
the United States and, to a lesser
extent, higher professional fees as a percentage of revenue. These
increases were partially offset by lower bonus expense as a
percentage of revenue. In addition, the separation agreement had a
negative effect on the 2010 margin.
Intangible Amortization and Corporate Depreciation Expense:
Morningstar does not allocate expense for intangible
amortization or corporate depreciation to its operating segments.
Intangible amortization, which represents the majority of expense
in this category, was $7.2 million in
the fourth quarter of 2011, a slight decrease of $0.1 million compared with the same period in
2010. Corporate depreciation expense was $1.9 million in the fourth quarter, essentially
unchanged from the prior-year period.
Corporate Unallocated: This category includes costs
related to corporate functions, including general management,
information technology used to support corporate systems, legal,
finance, human resources, marketing, and corporate communications.
It also includes capitalization of internal product development
costs. Costs in this category were $3.5
million in the quarter, a decrease of $2.4 million, or 40.3%, because the company
capitalized $2.7 million of operating
expense. In the fourth quarter of 2010, the company capitalized
$0.8 million of operating expense for
software development. Lower bonus expense in the fourth quarter of
2011 also contributed to the decrease, but to a lesser extent.
Annual Meeting
Investors are invited to attend Morningstar's annual meeting at
9 a.m. on Tuesday, May 15, 2012, at the Chicago Botanic
Garden, Alsdorf Auditorium, 1000 Lake Cook Road, Glencoe, Illinois. If you are interested in
attending, please send an email to investors@morningstar.com.
About Morningstar, Inc.
Morningstar, Inc. is a leading provider of independent
investment research in North
America, Europe,
Australia, and Asia. The company offers an extensive line of
products and services for individuals, financial advisors, and
institutions. Morningstar provides data on approximately 375,000
investment offerings, including stocks, mutual funds, and similar
vehicles, along with real-time global market data on more than 8
million equities, indexes, futures, options, commodities, and
precious metals, in addition to foreign exchange and Treasury
markets. Morningstar also offers investment management services
through its registered investment advisor subsidiaries and has more
than $180 billion in assets under
advisement and management as of Dec. 31,
2011. The company has operations in 27 countries.
Caution Concerning Forward-Looking Statements
This press release contains forward-looking statements as that
term is used in the Private Securities Litigation Reform Act of
1995. These statements are based on our current expectations about
future events or future financial performance. Forward-looking
statements by their nature address matters that are, to different
degrees, uncertain, and often contain words such as "may," "could,"
"expect," "intend," "plan," "seek," "anticipate," "believe,"
"estimate," "predict," "potential," or "continue." These statements
involve known and unknown risks and uncertainties that may cause
the events we discuss not to occur or to differ significantly from
what we expect. For us, these risks and uncertainties include,
among others, general industry conditions and competition,
including ongoing economic weakness and uncertainty; the effect of
market volatility on revenue from asset-based fees; damage to our
reputation resulting from claims made about possible conflicts of
interest; liability for any losses that result from an actual or
claimed breach of our fiduciary duties; the increasing
concentration of data and development work carried out at our
offshore facilities in China and
India; failing to differentiate
our products and continuously create innovative, proprietary
research tools; failing to successfully integrate acquisitions;
challenges faced by our non-U.S. operations; and a prolonged outage
of our database and network facilities. A more complete description
of these risks and uncertainties can be found in our other filings
with the Securities and Exchange Commission (SEC), including our
Annual Report on Form 10-K for the year ended December 31, 2010. If any of these risks and
uncertainties materialize, our actual future results may vary
significantly from what we expect. We do not undertake to update
our forward-looking statements as a result of new information or
future events.
Non-GAAP Financial Measures
To supplement Morningstar's consolidated financial statements
presented in accordance with U.S. Generally Accepted Accounting
Principles (GAAP), Morningstar uses the following measures
considered as non-GAAP by the Securities and Exchange Commission:
free cash flow, consolidated revenue excluding acquisitions
and foreign currency translations (organic revenue), and
international revenue excluding acquisitions and foreign currency
translations. These non-GAAP measures may not be comparable to
similarly titled measures reported by other companies.
Morningstar presents free cash flow solely as supplemental
disclosure to help investors better understand how much cash is
available after Morningstar spends money to operate its business.
Morningstar uses free cash flow to evaluate its business. Free cash
flow should not be considered an alternative to any measure
required to be reported under GAAP (such as cash provided by (used
for) operating, investing, and financing activities). For more
information on free cash flow, please see the reconciliation from
cash provided by operating activities to free cash flow included in
the accompanying financial tables. Morningstar presents
consolidated revenue excluding acquisitions and foreign currency
translations (organic revenue) and international revenue excluding
acquisitions and foreign currency translations because the company
believes these non-GAAP measures help investors better compare
period-to-period results. For more information, please see the
reconciliation provided in the accompanying financial tables.
All dollar and percentage comparisons, which are often
accompanied by words such as "increase," "decrease," "grew,"
"declined," or "was similar" refer to a comparison with the same
period in the previous year unless otherwise stated.
Contacts:
Media: Margaret Kirch Cohen,
312-696-6383 or margaret.cohen@morningstar.com
Investors may submit questions to investors@morningstar.com or by
fax to 312-696-6009.
©2012 Morningstar, Inc. All Rights Reserved.
MORN-E
Morningstar, Inc. and
Subsidiaries
|
|
Unaudited Condensed Consolidated
Statements of Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended December
31
|
|
Year ended December
31
|
|
(in thousands, except per share
amounts)
|
|
2011
|
|
2010
|
|
change
|
|
2011
|
|
2010
|
|
change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$ 158,571
|
|
$ 151,153
|
|
4.9%
|
|
$ 631,400
|
|
$ 555,351
|
|
13.7%
|
|
Operating expense(1):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold
|
|
48,203
|
|
42,301
|
|
14.0%
|
|
182,132
|
|
157,068
|
|
16.0%
|
|
|
Development
|
|
14,006
|
|
13,753
|
|
1.8%
|
|
53,157
|
|
49,244
|
|
7.9%
|
|
|
Sales and marketing
|
|
26,197
|
|
25,596
|
|
2.3%
|
|
106,699
|
|
95,473
|
|
11.8%
|
|
|
General and
administrative
|
|
24,829
|
|
25,632
|
|
(3.1%)
|
|
108,084
|
|
92,843
|
|
16.4%
|
|
|
Depreciation and
amortization
|
|
11,201
|
|
11,582
|
|
(3.3%)
|
|
42,913
|
|
39,664
|
|
8.2%
|
|
|
Total operating
expense
|
|
124,436
|
|
118,864
|
|
4.7%
|
|
492,985
|
|
434,292
|
|
13.5%
|
|
Operating income
|
|
34,135
|
|
32,289
|
|
5.7%
|
|
138,415
|
|
121,059
|
|
14.3%
|
|
Operating margin
|
|
21.5%
|
|
21.4%
|
|
0.1pp
|
|
21.9%
|
|
21.8%
|
|
0.1pp
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-operating income (expense),
net:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income, net
|
|
1,219
|
|
745
|
|
63.6%
|
|
2,361
|
|
2,437
|
|
(3.1%)
|
|
|
Other income (expense),
net
|
|
286
|
|
(61)
|
|
NMF
|
|
(652)
|
|
4,295
|
|
NMF
|
|
|
Non-operating
income, net
|
|
1,505
|
|
684
|
|
120.0%
|
|
1,709
|
|
6,732
|
|
(74.6%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes and
equity in net income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of unconsolidated
entities
|
|
35,640
|
|
32,973
|
|
8.1%
|
|
140,124
|
|
127,791
|
|
9.7%
|
|
Income tax expense
|
|
8,073
|
|
9,619
|
|
(16.1%)
|
|
43,658
|
|
42,756
|
|
2.1%
|
|
Equity in net income of
unconsolidated entities
|
|
451
|
|
246
|
|
83.3%
|
|
1,848
|
|
1,422
|
|
30.0%
|
|
Consolidated net
income
|
|
28,018
|
|
23,600
|
|
18.7%
|
|
98,314
|
|
86,457
|
|
13.7%
|
|
Net (income) loss attributable
to noncontrolling interests
|
|
(63)
|
|
(97)
|
|
(35.1%)
|
|
43
|
|
(87)
|
|
NMF
|
|
Net income attributable to
Morningstar, Inc.
|
|
$ 27,955
|
|
$ 23,503
|
|
18.9%
|
|
$ 98,357
|
|
$ 86,370
|
|
13.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share
attributable to Morningstar, Inc.:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
0.56
|
|
$
0.47
|
|
19.1%
|
|
$
1.96
|
|
$
1.75
|
|
12.0%
|
|
|
Diluted
|
|
$
0.55
|
|
$
0.46
|
|
19.6%
|
|
$
1.92
|
|
$
1.70
|
|
12.9%
|
|
Weighted average common shares
outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
49,883
|
|
49,523
|
|
|
|
50,032
|
|
49,249
|
|
|
|
|
Diluted
|
|
50,732
|
|
50,761
|
|
|
|
50,988
|
|
50,555
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended December
31
|
|
Year ended December
31
|
|
|
|
|
2011
|
|
2010
|
|
|
|
2011
|
|
2010
|
|
|
|
(1) Includes stock-based
compensation expense of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold
|
|
$ 1,082
|
|
$
891
|
|
|
|
$ 4,150
|
|
$ 3,473
|
|
|
|
|
Development
|
|
498
|
|
481
|
|
|
|
2,086
|
|
1,840
|
|
|
|
|
Sales and marketing
|
|
479
|
|
428
|
|
|
|
1,871
|
|
1,786
|
|
|
|
|
General and
administrative
|
|
1,801
|
|
1,656
|
|
|
|
7,196
|
|
6,694
|
|
|
|
|
Total stock-based
compensation expense
|
|
$ 3,860
|
|
$ 3,456
|
|
|
|
$ 15,303
|
|
$ 13,793
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NMF — Not meaningful, pp —
percentage points
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Morningstar, Inc. and
Subsidiaries
|
|
Operating Expense as a
Percentage of Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended December
31
|
|
Year ended December
31
|
|
|
|
|
2011
|
|
2010
|
|
change
|
|
2011
|
|
2010
|
|
change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
100.0%
|
|
100.0%
|
|
-
|
|
100.0%
|
|
100.0%
|
|
-
|
|
Operating expense(1):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold
|
|
30.4%
|
|
28.0%
|
|
2.4pp
|
|
28.8%
|
|
28.3%
|
|
0.5pp
|
|
|
Development
|
|
8.8%
|
|
9.1%
|
|
(0.3)pp
|
|
8.4%
|
|
8.9%
|
|
(0.5)pp
|
|
|
Sales and marketing
|
|
16.5%
|
|
16.9%
|
|
(0.4)pp
|
|
16.9%
|
|
17.2%
|
|
(0.3)pp
|
|
|
General and
administrative
|
|
15.7%
|
|
17.0%
|
|
(1.3)pp
|
|
17.1%
|
|
16.7%
|
|
0.4pp
|
|
|
Depreciation and
amortization
|
|
7.1%
|
|
7.7%
|
|
(0.6)pp
|
|
6.8%
|
|
7.1%
|
|
(0.3)pp
|
|
|
Total operating
expense(2)
|
|
78.5%
|
|
78.6%
|
|
(0.1)pp
|
|
78.1%
|
|
78.2%
|
|
(0.1)pp
|
|
Operating margin
|
|
21.5%
|
|
21.4%
|
|
0.1pp
|
|
21.9%
|
|
21.8%
|
|
0.1pp
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended December
31
|
|
Year ended December
31
|
|
|
|
|
2011
|
|
2010
|
|
change
|
|
2011
|
|
2010
|
|
change
|
|
(1) Includes stock-based
compensation expense of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold
|
|
0.7%
|
|
0.6%
|
|
0.1pp
|
|
0.7%
|
|
0.6%
|
|
0.1pp
|
|
|
Development
|
|
0.3%
|
|
0.3%
|
|
-
|
|
0.3%
|
|
0.3%
|
|
-
|
|
|
Sales and marketing
|
|
0.3%
|
|
0.3%
|
|
-
|
|
0.3%
|
|
0.3%
|
|
-
|
|
|
General and
administrative
|
|
1.1%
|
|
1.1%
|
|
-
|
|
1.1%
|
|
1.2%
|
|
(0.1)pp
|
|
|
Total stock-based
compensation expense(2)
|
|
2.4%
|
|
2.3%
|
|
0.1pp
|
|
2.4%
|
|
2.5%
|
|
(0.1)pp
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2) Sum of percentages may not
equal total because of rounding.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Morningstar, Inc. and
Subsidiaries
|
|
Unaudited Condensed Consolidated
Statements of Cash Flows
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended December
31
|
|
Year ended December
31
|
|
($000)
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
activities
|
|
|
|
|
|
|
|
|
|
Consolidated net
income
|
|
$ 28,018
|
|
$ 23,600
|
|
$ 98,314
|
|
$ 86,457
|
|
Adjustments to reconcile
consolidated net income to net cash
|
|
|
|
|
|
|
|
|
|
flows from operating
activities:
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
11,201
|
|
11,582
|
|
42,913
|
|
39,664
|
|
|
Deferred income tax (benefit)
expense
|
|
(2,877)
|
|
(1,558)
|
|
(4,436)
|
|
211
|
|
|
Stock-based compensation
expense
|
|
3,860
|
|
3,456
|
|
15,303
|
|
13,793
|
|
|
Equity in net income of
unconsolidated entities
|
|
(451)
|
|
(246)
|
|
(1,848)
|
|
(1,422)
|
|
|
Excess tax benefits from
stock-option exercises
|
|
|
|
|
|
|
|
|
|
|
and vesting of restricted
stock units
|
|
(1,904)
|
|
(2,418)
|
|
(9,525)
|
|
(7,507)
|
|
|
Holding gain upon acquisition of
additional
|
|
|
|
|
|
|
|
|
|
|
ownership of equity method
investments
|
|
-
|
|
509
|
|
-
|
|
(4,564)
|
|
|
Other, net
|
|
(854)
|
|
(654)
|
|
1,829
|
|
323
|
|
Changes in operating assets and
liabilities, net of
|
|
|
|
|
|
|
|
|
|
effects of
acquisitions:
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
(3,455)
|
|
(16,398)
|
|
(3,858)
|
|
(23,652)
|
|
|
Other assets
|
|
732
|
|
167
|
|
2,728
|
|
(2,341)
|
|
|
Accounts payable and accrued
liabilities
|
|
454
|
|
(2,784)
|
|
(4,821)
|
|
(759)
|
|
|
Accrued compensation
|
|
13,418
|
|
14,436
|
|
10,176
|
|
12,166
|
|
|
Deferred revenue
|
|
8,960
|
|
7,690
|
|
9,578
|
|
5,752
|
|
|
Income taxes -
current
|
|
1,309
|
|
4,260
|
|
10,751
|
|
4,569
|
|
|
Deferred rent
|
|
(46)
|
|
922
|
|
(1,030)
|
|
1,364
|
|
|
Other liabilities
|
|
295
|
|
746
|
|
(1,098)
|
|
(638)
|
|
|
Cash provided by operating activities
|
|
58,660
|
|
43,310
|
|
164,976
|
|
123,416
|
|
Investing
activities
|
|
|
|
|
|
|
|
|
|
Purchases of
investments
|
|
(38,495)
|
|
(58,240)
|
|
(320,193)
|
|
(186,283)
|
|
Proceeds from maturities and
sales of investments
|
|
29,447
|
|
37,732
|
|
234,868
|
|
214,929
|
|
Capital expenditures
|
|
(8,633)
|
|
(7,070)
|
|
(23,322)
|
|
(14,771)
|
|
Acquisitions, net of cash
acquired
|
|
-
|
|
(13,627)
|
|
300
|
|
(102,324)
|
|
Other, net
|
|
(3,295)
|
|
(330)
|
|
(2,420)
|
|
500
|
|
|
Cash
used for investing activities
|
|
(20,976)
|
|
(41,535)
|
|
(110,767)
|
|
(87,949)
|
|
Financing
activities
|
|
|
|
|
|
|
|
|
|
Proceeds from stock-option
exercises, net
|
|
2,072
|
|
4,013
|
|
8,702
|
|
9,220
|
|
Excess tax benefits from
stock-option exercises
|
|
|
|
|
|
|
|
|
|
and vesting of restricted
stock units
|
|
1,904
|
|
2,418
|
|
9,525
|
|
7,507
|
|
Common shares
repurchased
|
|
(12,146)
|
|
(3,785)
|
|
(40,672)
|
|
(3,785)
|
|
Dividends paid
|
|
(2,502)
|
|
-
|
|
(10,041)
|
|
-
|
|
Other, net
|
|
253
|
|
112
|
|
(110)
|
|
(417)
|
|
|
Cash
provided by (used for) financing activities
|
|
(10,419)
|
|
2,758
|
|
(32,596)
|
|
12,525
|
|
Effect of exchange rate changes
on cash and cash equivalents
|
|
(1,098)
|
|
(229)
|
|
(1,352)
|
|
1,688
|
|
Net increase in cash and cash
equivalents
|
|
26,167
|
|
4,304
|
|
20,261
|
|
49,680
|
|
Cash and cash
equivalents—Beginning of period
|
|
174,270
|
|
175,872
|
|
180,176
|
|
130,496
|
|
Cash and cash equivalents—End of
period
|
|
$ 200,437
|
|
$ 180,176
|
|
$ 200,437
|
|
$ 180,176
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation from cash
provided by operating activities to free cash flow (a non-GAAP
measure):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended December
31
|
|
Year ended December
31
|
|
($000)
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash provided by operating
activities
|
|
$ 58,660
|
|
$ 43,310
|
|
$ 164,976
|
|
$ 123,416
|
|
Less: Capital
expenditures
|
|
(8,633)
|
|
(7,070)
|
|
(23,322)
|
|
(14,771)
|
|
Free cash flow
|
|
$ 50,027
|
|
$ 36,240
|
|
$ 141,654
|
|
$ 108,645
|
|
|
|
|
|
|
|
|
|
|
|
Morningstar, Inc. and
Subsidiaries
|
|
Unaudited Condensed Consolidated
Balance Sheets
|
|
|
|
|
|
|
|
|
|
|
|
December
31
|
|
December
31
|
|
($000)
|
|
2011
|
|
2010
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
200,437
|
|
$
180,176
|
|
|
Investments
|
|
269,755
|
|
185,240
|
|
|
Accounts receivable,
net
|
|
113,312
|
|
110,891
|
|
|
Deferred tax asset,
net
|
|
5,104
|
|
2,860
|
|
|
Income tax receivable,
net
|
|
7,445
|
|
10,459
|
|
|
Other
|
|
15,980
|
|
17,654
|
|
|
Total current assets
|
|
612,033
|
|
507,280
|
|
|
|
|
|
|
|
|
Property, equipment, and
capitalized software, net
|
|
68,196
|
|
62,105
|
|
Investments in unconsolidated
entities
|
|
27,642
|
|
24,262
|
|
Goodwill
|
|
318,492
|
|
317,661
|
|
Intangible assets,
net
|
|
139,809
|
|
169,023
|
|
Other assets
|
|
5,912
|
|
5,971
|
|
|
Total assets
|
|
$
1,172,084
|
|
$
1,086,302
|
|
|
|
|
|
|
|
|
Liabilities and
equity
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
Accounts payable and accrued
liabilities
|
|
$
41,403
|
|
$
42,680
|
|
|
Accrued compensation
|
|
73,124
|
|
62,404
|
|
|
Deferred revenue
|
|
155,494
|
|
146,267
|
|
|
Other
|
|
612
|
|
1,373
|
|
|
Total current liabilities
|
|
270,633
|
|
252,724
|
|
|
|
|
|
|
|
|
Accrued compensation
|
|
5,724
|
|
4,965
|
|
Deferred tax liability,
net
|
|
15,940
|
|
19,975
|
|
Other long-term
liabilities
|
|
22,771
|
|
27,213
|
|
|
Total liabilities
|
|
315,068
|
|
304,877
|
|
|
Total equity
|
|
857,016
|
|
781,425
|
|
|
Total liabilities and
equity
|
|
$
1,172,084
|
|
$
1,086,302
|
|
|
|
|
|
|
|
Morningstar, Inc. and
Subsidiaries
|
|
Segment
Information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended December
31
|
|
Year ended December
31
|
|
($000)
|
|
2011
|
|
2010
|
|
change
|
|
2011
|
|
2010
|
|
change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment
Information
|
|
$ 126,590
|
|
$ 120,357
|
|
5.2%
|
|
$ 500,909
|
|
$ 444,957
|
|
12.6%
|
|
|
Investment Management
|
|
31,981
|
|
30,796
|
|
3.8%
|
|
130,491
|
|
110,394
|
|
18.2%
|
|
|
Consolidated revenue
|
|
$ 158,571
|
|
$ 151,153
|
|
4.9%
|
|
$ 631,400
|
|
$ 555,351
|
|
13.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue—U.S.
|
|
$ 112,075
|
|
$ 106,686
|
|
5.1%
|
|
$ 446,470
|
|
$ 398,215
|
|
12.1%
|
|
|
Revenue—International
|
|
$ 46,496
|
|
$ 44,467
|
|
4.6%
|
|
$ 184,930
|
|
$ 157,136
|
|
17.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue—U.S. (percentage of
consolidated revenue)
|
70.7%
|
|
70.6%
|
|
0.1pp
|
|
70.7%
|
|
71.7%
|
|
(1.0)pp
|
|
|
Revenue—International
(percentage of consolidated revenue)
|
29.3%
|
|
29.4%
|
|
(0.1)pp
|
|
29.3%
|
|
28.3%
|
|
1.0pp
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment
Information
|
|
$ 30,684
|
|
$ 31,641
|
|
(3.0%)
|
|
$ 131,514
|
|
$ 127,740
|
|
3.0%
|
|
|
Investment Management
|
|
16,050
|
|
15,679
|
|
2.4%
|
|
69,649
|
|
56,816
|
|
22.6%
|
|
|
Intangible amortization and
corporate depreciation expense
|
(9,094)
|
|
(9,164)
|
|
(0.8%)
|
|
(34,659)
|
|
(32,094)
|
|
8.0%
|
|
|
Corporate unallocated
|
|
(3,505)
|
|
(5,867)
|
|
(40.3%)
|
|
(28,089)
|
|
(31,403)
|
|
(10.6%)
|
|
|
Consolidated operating
income
|
|
$ 34,135
|
|
$ 32,289
|
|
5.7%
|
|
$ 138,415
|
|
$ 121,059
|
|
14.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
margin(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment
Information
|
|
24.2%
|
|
26.3%
|
|
(2.1)pp
|
|
26.3%
|
|
28.7%
|
|
(2.4)pp
|
|
|
Investment Management
|
|
50.2%
|
|
50.9%
|
|
(0.7)pp
|
|
53.4%
|
|
51.5%
|
|
1.9pp
|
|
|
Consolidated operating
margin
|
|
21.5%
|
|
21.4%
|
|
0.1pp
|
|
21.9%
|
|
21.8%
|
|
0.1pp
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes stock-based
compensation expense allocated to each segment.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Top Five Products
(Segment)
|
|
Revenue
|
|
%
of
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
2011
|
|
($000)
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
Licensed Data (Investment
Information)
|
|
$ 106,732
|
|
16.9%
|
|
|
|
|
|
|
|
|
|
Investment Consulting
(Investment Management)
|
78,574
|
|
12.4%
|
|
|
|
|
|
|
|
|
|
Morningstar Advisor Workstation
(Investment Information)
|
77,459
|
|
12.3%
|
|
|
|
|
|
|
|
|
|
Morningstar.com (Investment
Information)
|
|
54,169
|
|
8.6%
|
|
|
|
|
|
|
|
|
|
Morningtar Direct (Investment
Information)
|
|
52,481
|
|
8.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Top Five Products
(Segment)
|
|
Revenue
|
|
%
of
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
2010
|
|
($000)
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
Licensed Data (Investment
Information)
|
|
$ 98,186
|
|
17.7%
|
|
|
|
|
|
|
|
|
|
Morningstar Advisor Workstation
(Investment Information)
|
69,321
|
|
12.5%
|
|
|
|
|
|
|
|
|
|
Investment Consulting
(Investment Management)
|
66,264
|
|
11.9%
|
|
|
|
|
|
|
|
|
|
Morningstar.com (Investment
Information)
|
|
49,673
|
|
8.9%
|
|
|
|
|
|
|
|
|
|
Morningtar Direct (Investment
Information)
|
|
38,069
|
|
6.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Morningstar, Inc. and
Subsidiaries
|
|
Supplemental Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31
|
|
|
|
|
|
|
|
2011
|
|
2010
|
|
%
change
|
|
Our employees
|
|
|
|
|
|
|
|
|
|
Worldwide headcount
(approximate)
|
|
|
|
3,465
|
|
3,225
|
|
7.4%
|
|
Number of worldwide equity and
credit analysts (approximate)
|
|
|
|
165
|
|
145
|
(1)
|
13.8%
|
|
Number of worldwide fund
analysts (approximate)
|
|
|
|
95
|
|
95
|
|
0.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Our business
|
|
|
|
|
|
|
|
|
|
Investment
Information
|
|
|
|
|
|
|
|
|
|
Morningstar.com Premium
Membership subscriptions (U.S.)
|
|
|
|
130,354
|
|
138,149
|
(2)
|
(5.6%)
|
|
Registered users for
Morningstar.com (U.S.)
|
|
|
|
6,891,458
|
|
6,300,033
|
|
9.4%
|
|
U.S. Advisor Workstation and
Morningstar Office licenses
|
|
|
|
160,287
|
|
157,395
|
(3)
|
1.8%
|
|
Principia
subscriptions
|
|
|
|
31,270
|
|
32,681
|
|
(4.3%)
|
|
Morningstar Direct
licenses
|
|
|
|
6,144
|
|
4,773
|
|
28.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment Management
|
|
|
|
|
|
|
|
|
|
Assets under advisement and
management
|
|
|
|
|
|
|
|
|
|
|
Investment Consulting
|
|
|
|
$140.4 bil
|
|
$111.4 bil
|
(5)
|
26.0%
|
|
|
Retirement
Solutions(4)
|
|
|
|
$37.4 bil
|
|
$35.1 bil
|
|
6.6%
|
|
|
Morningstar Managed
Portfolios
|
|
|
|
$3.0 bil
|
|
$2.7 bil
|
|
11.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Revised to include
structured credit analysts
|
|
(2) Revised
|
|
(3) Revised to include licenses
from the Annuity Intelligence business
|
|
(4) Revised to include Plan
Sponsor Advice
|
|
(5) Revised; in addition,
Ibbotson Australia is now included in the total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended December
31
|
|
Year ended December
31
|
|
($000)
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
|
Effective tax
rate
|
|
|
|
|
|
|
|
|
|
Income before income taxes and
equity in net income of
|
|
|
|
|
|
|
|
|
|
|
unconsolidated
entities
|
|
$
35,640
|
|
$
32,973
|
|
$
140,124
|
|
$
127,791
|
|
Equity in net income of
unconsolidated entities
|
|
451
|
|
246
|
|
1,848
|
|
1,422
|
|
Net (income) loss attributable
to noncontrolling interests
|
|
(63)
|
|
(97)
|
|
43
|
|
(87)
|
|
|
Total
|
|
$
36,028
|
|
$
33,122
|
|
$
142,015
|
|
$
129,126
|
|
Income tax expense
|
|
$
8,073
|
|
$
9,619
|
|
$
43,658
|
|
$
42,756
|
|
Effective tax rate
|
|
22.4%
|
|
29.0%
|
|
30.7%
|
|
33.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
Morningstar, Inc. and
Subsidiaries
|
|
Reconciliations of Non-GAAP
Measures with the Nearest Comparable GAAP Measures
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Morningstar includes an acquired
operation as part of revenue and expense from acquisitions for 12
months after the acquisition is completed. Operating expense
related to acquisitions also includes amortization of intangible
assets, professional fees, and expense related to vacant office
space incurred as part of the acquisition process. It's
important to note that it's
difficult to precisely quantify the amount of operating expense
from acquisitions. Morningstar doesn't always maintain acquired
operations as stand-alone businesses, and the
company often integrates administrative or other functions with
existing operations.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation from consolidated
revenue to revenue excluding acquisitions and foreign currency
translations (organic revenue):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended December
31
|
|
Year ended December
31
|
|
($000)
|
|
2011
|
|
2010
|
|
%
change
|
|
2011
|
|
2010
|
|
%
change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated revenue
|
|
$ 158,571
|
|
$ 151,153
|
|
4.9%
|
|
$ 631,400
|
|
$ 555,351
|
|
13.7%
|
|
Less: acquisitions
|
|
(306)
|
|
-
|
|
NMF
|
|
(15,326)
|
|
-
|
|
NMF
|
|
Favorable impact of foreign
currency translations
|
|
(180)
|
|
-
|
|
NMF
|
|
(10,116)
|
|
-
|
|
NMF
|
|
Revenue excluding acquisitions
and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
foreign currency
translations
|
|
$ 158,085
|
|
$ 151,153
|
|
4.6%
|
|
$ 605,958
|
|
$ 555,351
|
|
9.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation from
international revenue to international revenue excluding
acquisitions and foreign currency translations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended December
31
|
|
Year ended December
31
|
|
($000)
|
|
2011
|
|
2010
|
|
%
change
|
|
2011
|
|
2010
|
|
%
change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International revenue
|
|
$ 46,496
|
|
$ 44,467
|
|
4.6%
|
|
$ 184,930
|
|
$ 157,136
|
|
17.7%
|
|
Less: acquisitions
|
|
-
|
|
-
|
|
-
|
|
(5,561)
|
|
-
|
|
NMF
|
|
Favorable impact of foreign
currency translations
|
|
(180)
|
|
-
|
|
NMF
|
|
(10,116)
|
|
-
|
|
NMF
|
|
International revenue excluding
acquisitions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and foreign currency
translations
|
|
$ 46,316
|
|
$ 44,467
|
|
4.2%
|
|
$ 169,253
|
|
$ 157,136
|
|
7.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table summarizes
the change in operating expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended December
31
|
|
Year ended December
31
|
|
($000)
|
|
2011
|
|
2010
|
|
$
change
|
|
2011
|
|
2010
|
|
$
change
|
|
Total operating
expense
|
|
$ 124,436
|
|
$ 118,864
|
|
$ 5,572
|
|
$ 492,985
|
|
$ 434,292
|
|
$ 58,693
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisitions
|
|
|
|
|
|
$
137
|
|
|
|
|
|
$ 13,411
|
|
|
Unfavorable impact of foreign
currency translations
|
|
|
|
|
|
335
|
|
|
|
|
|
9,462
|
|
|
All other changes in operating
expense
|
|
|
|
|
|
5,100
|
|
|
|
|
|
35,820
|
|
|
Total
|
|
|
|
|
|
$ 5,572
|
|
|
|
|
|
$ 58,693
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The table below shows the period
in which Morningstar included each acquired operation in revenue
and expense from acquisitions:
|
|
|
|
|
|
|
|
|
|
Acquisition
|
|
|
|
Date of acquisition
|
|
2011 revenue and expense from
acquisitions
|
|
Footnoted business of Financial
Fineprint Inc.
|
|
|
|
February 1, 2010
|
|
January 1 through January 31,
2011
|
|
Aegis Equities
Research
|
|
|
|
April 1, 2010
|
|
January 1 through March 31,
2011
|
|
Old Broad Street Research
Ltd.
|
|
|
|
April 12, 2010
|
|
January 1 through April 11,
2011
|
|
Realpoint, LLC
|
|
|
|
May 3, 2010
|
|
January 1 through May 2,
2011
|
|
Morningstar Danmark
A/S
|
|
|
|
July 1, 2010
|
|
January 1 through June 30,
2011
|
|
Seeds Group
|
|
|
|
July 1, 2010
|
|
January 1 through June 30,
2011
|
|
Annuity intelligence business of
Advanced Sales and Marketing Corporation
|
|
|
|
November 1, 2010
|
|
January 1 through October 31,
2011
|
|
|
|
|
|
|
|
|
SOURCE Morningstar, Inc.