UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 19, 2021
MORNINGSTAR, INC.
(Exact name of registrant as specified in its charter)
Illinois | 000-51280 | 36-3297908 |
(State or other | (Commission | (I.R.S. Employer |
jurisdiction | File Number) | Identification No.) |
of incorporation) |
22 West Washington Street | |
Chicago, Illinois | 60602 |
(Address of principal executive offices) | (Zip Code) |
(312) 696-6000
(Registrant’s telephone number, including
area code)
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class | Trading Symbol | Name of Each Exchange on Which Registered |
Common stock, no par value | MORN | The Nasdaq Stock Market LLC |
Item 7.01. Regulation FD Disclosure.
On March 19, 2021, Morningstar, Inc. (the “Company”) published an Investor Presentation on its investor relations website at https://shareholders.morningstar.com/investor-relations/financials/financial-summary/. The presentation is included as Exhibit 99.1 to this Form 8-K.
Non-GAAP Financial Measures
The presentation includes the following measures considered as non-GAAP by the Securities and Exchange Commission:
· | consolidated revenue, excluding acquisitions, divestitures, adoption of new accounting standards, and the effect of foreign currency translations (organic revenue), |
· | consolidated operating income, excluding intangible amortization expense and all mergers and acquisitions (M&A)-related expenses (including M&A-related earn-outs) (adjusted operating income), |
· | cash provided by or used for operating activities less capital expenditures (free cash flow). |
These non-GAAP measures may not be comparable to similarly titled measures reported by other companies.
Morningstar presents organic revenue because the Company believes this non-GAAP measure helps investors better compare period-over-period results. We exclude revenue from acquired businesses from our organic revenue growth calculation for a period of 12 months after we complete the acquisition. For divestitures, we exclude revenue in the prior period for which there is no comparable revenue in the current period. In the third quarter of 2019, Morningstar Credit Ratings combined with DBRS to form DBRS Morningstar. In the third quarter of 2020, Morningstar completed its acquisition of Sustainalytics. The total revenue contribution is excluded from organic revenue growth for DBRS Morningstar the first six months of 2020 and for Sustainalytics for the last six months of 2020.
In addition, Morningstar presents free cash flow solely as supplemental disclosure to help investors better understand how much cash is available after making capital expenditures. Morningstar's management team 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).
Caution Concerning Forward-Looking Statements
This current report on Form 8-K 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,” “prospects,” 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,
• | failing to maintain and protect our brand, independence, and reputation; |
• | liability for any losses that result from an actual or claimed breach of our fiduciary duties or failure to comply with applicable securities laws; |
• | liability related to cybersecurity and the protection of confidential information, including personal information about individuals; |
• | compliance failures, regulatory action, or changes in laws applicable to our credit ratings operations, investment advisory, ESG and index businesses; |
• | prolonged volatility or downturns affecting the financial sector, global financial markets, and global economy and its effect on our revenue from asset-based fees and credit ratings business; |
• | the impact of the current COVID-19 pandemic on our business, financial condition, and results of operations; |
• | inadequacy of our operational risk management and business continuity programs in the event of a material disruptive event; |
• | failing to respond to technological change, keep pace with new technology developments, or adopt a successful technology strategy; |
• | failing to differentiate our products and services and continuously create innovative, proprietary and insightful financial technology solutions; |
• | liability relating to the information and data we collect, store, use, create and distribute or the reports that we publish or are produced by our software products; |
• | trends in the financial services industry, including fee compression within the asset and wealth management sectors and increased industry consolidation; |
• | an outage of our database, technology-based products and services, or network facilities or the movement of parts of our technology and data infrastructure to the public cloud and other outsourced providers; |
• | the failure of acquisitions and other investments to be efficiently integrated and produce the results we anticipate; |
• | the failure to recruit, develop, and retain qualified employees; |
• | challenges faced by our non-U.S. operations, including the concentration of data and development work at our offshore facilities in China and India; |
• | our indebtedness could adversely affect our cash flows and financial flexibility; and |
• | the failure to protect our intellectual property rights or claims of intellectual property infringement against us. |
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits:
Exhibit No. | Description | |
99.1 | Investor Presentation published on March 19, 2021. | |
104 | The Cover page from this Current Report on Form 8-K formatted in Inline XBRL (included as Exhibit 101). |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
MORNINGSTAR, INC. | ||
Date: March 19, 2021 | By: | /s/ Jason Dubinsky |
Jason Dubinsky | ||
Chief Financial Officer |