Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2015 | Oct. 23, 2015 | |
Document and Entity Information Abstract | ||
Entity Registrant Name | MORNINGSTAR, INC. | |
Entity Central Index Key | 1,289,419 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2015 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 44,216,841 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Revenue | $ 195.3 | $ 193.1 | $ 587.2 | $ 563.7 |
Operating expense: | ||||
Cost of revenue | 83.4 | 80 | 245.2 | 237.4 |
Sales and marketing | 23.3 | 26.8 | 73.8 | 83.1 |
General and administrative | 26 | 26.4 | 79.9 | 82.9 |
Depreciation and amortization | 16.4 | 14.6 | 47.8 | 40.3 |
Litigation settlement | 0 | 0 | 0 | (61) |
Total operating expense | 149.1 | 147.8 | 446.7 | 504.7 |
Operating income (loss) | 46.2 | 45.3 | 140.5 | 59 |
Non-operating income (expense): | ||||
Interest income (expense), net | 0.2 | 0.5 | 0.5 | 1.7 |
Gain on sale of investments, reclassified from other comprehensive income | 0 | 0.2 | 0.4 | 0.5 |
Holding gain upon acquisition of additional ownership of equity and cost method investments | 0 | 0 | 0 | 5.2 |
Other income (expense), net | 1.2 | (1) | 0.8 | (0.9) |
Non-operating income (expense), net | 1.4 | (0.3) | 1.7 | 6.5 |
Income (loss) before income taxes and equity in net income of unconsolidated entities | 47.6 | 45 | 142.2 | 65.5 |
Equity in net income of unconsolidated entities | 0.5 | 0.3 | 1.5 | 1.4 |
Income tax expense (benefit) | 14.6 | 15.1 | 48.2 | 20.2 |
Consolidated net income (loss) | 33.5 | 30.2 | 95.5 | 46.7 |
Net (income) loss attributable to the noncontrolling interest | 0 | 0 | (0.2) | 0.1 |
Net income (loss) attributable to Morningstar, Inc. | $ 33.5 | $ 30.2 | $ 95.3 | $ 46.8 |
Net income (loss) per share attributable to: | ||||
Basic (in dollars per share) | $ 0.76 | $ 0.67 | $ 2.15 | $ 1.04 |
Diluted (in dollars per share) | 0.76 | 0.67 | 2.15 | 1.04 |
Dividends declared per common share (in dollars per share) | 0.19 | 0.17 | 0.57 | 0.51 |
Dividends paid per common share (in dollars per share) | $ 0.19 | $ 0.17 | $ 0.57 | $ 0.51 |
Weighted average shares outstanding: | ||||
Basic (in shares) | 44.2 | 44.7 | 44.3 | 44.8 |
Diluted (in shares) | 44.3 | 44.9 | 44.4 | 45 |
Condensed Consolidated Stateme3
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Consolidated net income | $ 33.5 | $ 30.2 | $ 95.5 | $ 46.7 |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustment | (12.8) | (18.8) | (23.8) | (13.5) |
Unrealized gains (losses) on securities, net of tax: | ||||
Unrealized holding gains (losses) arising during period | (0.8) | (0.3) | (1.3) | 0.2 |
Reclassification gains included in net income | (0.5) | (0.1) | (0.2) | (0.3) |
Other comprehensive loss | (14.1) | (19.2) | (25.3) | (13.6) |
Comprehensive income | 19.4 | 11 | 70.2 | 33.1 |
Comprehensive (income) loss attributable to noncontrolling interest | (0.2) | 0.1 | (0.4) | 0.1 |
Comprehensive income attributable to Morningstar, Inc. | $ 19.2 | $ 11.1 | $ 69.8 | $ 33.2 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 223.7 | $ 185.2 |
Investments | 39.3 | 39.4 |
Accounts receivable, less allowance of $2.1 and $1.5, respectively | 124.1 | 136.7 |
Deferred tax asset, net | 10.5 | 9 |
Income tax receivable, net | 0 | 6.9 |
Other | 22.5 | 22.6 |
Total current assets | 420.1 | 399.8 |
Property, equipment, and capitalized software, less accumulated depreciation and amortization of $160.1 and $132.9, respectively | 124.3 | 117.6 |
Investments in unconsolidated entities | 35.4 | 28.8 |
Goodwill | 359.9 | 370.1 |
Intangible assets, net | 77.1 | 95.9 |
Other assets | 6.8 | 7.1 |
Total assets | 1,023.6 | 1,019.3 |
Current liabilities: | ||
Accounts payable and accrued liabilities | 34.4 | 34.3 |
Accrued compensation | 68 | 80.5 |
Income tax payable | 12 | 0 |
Deferred revenue | 155.1 | 146 |
Short-term debt | 0 | 30 |
Other | 3.5 | 3 |
Total current liabilities | 273 | 293.8 |
Accrued compensation | 8.5 | 7.9 |
Deferred tax liability, net | 24.8 | 26 |
Deferred rent | 26.2 | 26.4 |
Other long-term liabilities | 11 | 10.8 |
Total liabilities | 343.5 | 364.9 |
Morningstar, Inc. shareholders' equity: | ||
Common stock, no par value, 200,000,000 shares authorized, of which 44,225,177 and 44,345,763 shares were outstanding as of September 30, 2015 and December 31, 2014, respectively | 0 | 0 |
Treasury stock at cost, 8,635,779 and 8,257,214 shares as of September 30, 2015 and December 31, 2014, respectively | (553) | (524.3) |
Additional paid-in capital | 571.7 | 561.1 |
Retained earnings | 711.4 | 641.5 |
Accumulated other comprehensive income (loss): | ||
Currency translation adjustment | (49.1) | (25.1) |
Unrealized gain on available-for-sale securities | (1.2) | 0.3 |
Total accumulated other comprehensive income (loss) | (50.3) | (24.8) |
Total Morningstar, Inc. shareholders' equity | 679.8 | 653.5 |
Noncontrolling interest | 0.3 | 0.9 |
Total equity | 680.1 | 654.4 |
Total liabilities and equity | $ 1,023.6 | $ 1,019.3 |
Condensed Consolidated Balance5
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts receivable | $ 2.1 | $ 1.5 |
Accumulated depreciation and amortization | $ 160.1 | $ 132.9 |
Common Stock, No Par Value | $ 0 | $ 0 |
Common Stock, Shares Authorized | 200,000,000 | 200,000,000 |
Common Stock, Shares, Outstanding | 44,225,177 | 44,345,763 |
Treasury Stock, Shares | 8,635,779 | 8,257,214 |
Condensed Consolidated Stateme6
Condensed Consolidated Statement of Equity - 9 months ended Sep. 30, 2015 - USD ($) $ in Millions | Total | Common Stock | Treasury Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Non Controlling Interests |
Balance at Dec. 31, 2014 | $ 654.4 | $ 0 | $ (524.3) | $ 561.1 | $ 641.5 | $ (24.8) | $ 0.9 |
Balance (in shares) at Dec. 31, 2014 | 44,345,763 | 44,345,763 | |||||
Increase (Decrease) in Stockholders' Equity | |||||||
Net income | $ 95.5 | 95.3 | 0.2 | ||||
Other comprehensive loss: | |||||||
Unrealized gain on available-for-sale investments, net of income tax of $0.5 | (1.3) | (1.3) | 0 | ||||
Reclassification of adjustments for gains included in net income, net of income tax of $0.1 | (0.2) | (0.2) | 0 | ||||
Foreign currency translation adjustment, net | (23.8) | (24) | 0.2 | ||||
Other comprehensive loss | (25.3) | (25.5) | 0.2 | ||||
Issuance of common stock related to stock-option exercises and vesting of restricted stock units, net | (1.2) | $ 0 | 1.4 | (2.6) | |||
Issuance of common stock related to stock-option exercises and vesting of restricted stock units, net (in shares) | 275,845 | ||||||
Adjustments to Additional Paid in Capital, Share-based Compensation, Requisite Service Period Recognition | |||||||
Stock-based compensation - restricted stock units | 13.5 | 13.5 | |||||
Excess tax benefit derived from stock-option exercises and vesting of restricted stock units | 2.1 | 2.1 | |||||
Common share repurchased | (30.1) | (30.1) | |||||
Common share repurchased (in shares) | (396,431) | ||||||
Dividends declared - common shares outstanding | (25.3) | (25.3) | |||||
Dividends declared — restricted stock units | (0.1) | 0 | (0.1) | ||||
Purchase of remaining interest in majority-owned investment | (3.4) | $ 0 | 0 | (2.4) | 0 | 0 | (1) |
Balance at Sep. 30, 2015 | $ 680.1 | $ 0 | $ (553) | $ 571.7 | $ 711.4 | $ (50.3) | $ 0.3 |
Balance (in shares) at Sep. 30, 2015 | 44,225,177 | 44,225,177 |
Condensed Consolidated Stateme7
Condensed Consolidated Statement of Equity (Parenthetical) $ in Millions | 9 Months Ended |
Sep. 30, 2015USD ($) | |
Statement of Stockholders' Equity [Abstract] | |
Other Comprehensive Income (Loss), Unrealized Holding Gain (Loss) on Securities Arising During Period, Tax | $ 0.5 |
Other Comprehensive Income (Loss), Reclassification Adjustment for Sale of Securities Included in Net Income, Tax | $ 0.1 |
Condensed Consolidated Stateme8
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Operating activities | ||
Consolidated net income | $ 95.5 | $ 46.7 |
Adjustments to reconcile consolidated net income to net cash flows from operating activities: | ||
Depreciation and amortization | 47.8 | 40.3 |
Deferred income taxes | (2.7) | (5.4) |
Stock-based compensation expense | 13.5 | 13.3 |
Provision for (recoveries of) bad debts | 0.6 | 0.3 |
Equity in net income of unconsolidated entities | (1.5) | (1.4) |
Excess tax benefits from stock-option exercises and vesting of restricted stock units | (2.1) | (2.9) |
Holding gain upon acquisition of additional ownership of equity and cost method investments | 0 | (5.2) |
Other, net | (0.5) | 0.2 |
Changes in operating assets and liabilities, net of effects of acquisitions: | ||
Accounts receivable | 9 | (12.6) |
Other assets | (1.1) | (3.3) |
Accounts payable and accrued liabilities | 1.3 | (1.2) |
Accrued compensation | (7.3) | 3.4 |
Income taxes- current | 20.5 | 3.5 |
Deferred revenue | 13.1 | 0.5 |
Other liabilities | 0.4 | (0.9) |
Cash provided by operating activities | 186.5 | 75.3 |
Investing activities | ||
Purchases of investments | (28.3) | (10.6) |
Proceeds from maturities and sales of investments | 24.8 | 103.1 |
Capital expenditures | (39.9) | (42.8) |
Acquisitions, net of cash acquired | (3.4) | (64.4) |
Other, net | (6.5) | 0.2 |
Cash used for investing activities | (53.3) | (14.5) |
Financing activities | ||
Common shares repurchased | (30.1) | (42.1) |
Dividends paid | (25.3) | (22.9) |
Proceeds from short-term debt | 15 | 30 |
Repayment of short-term debt | (45) | 0 |
Proceeds from stock-option exercises, net | 3.7 | 3.8 |
Employee taxes withheld for restricted stock units | (4.9) | (5.1) |
Excess tax benefits from stock-option exercises and vesting of restricted stock units | 2.1 | 2.9 |
Other, net | 0.1 | 0 |
Cash used for financing activities | (84.4) | (33.4) |
Effect of exchange rate changes on cash and cash equivalents | (10.3) | (6.3) |
Net increase (decrease) in cash and cash equivalents | 38.5 | 21.1 |
Cash and cash equivalents-beginning of period | 185.2 | 168.2 |
Cash and cash equivalents-end of period | 223.7 | 189.3 |
Supplemental disclosure of cash flow information: | ||
Cash paid for income taxes | 27.3 | 22 |
Supplemental information of non-cash investing and financing activities: | ||
Unrealized gain (loss) on available-for-sale investments | (2.2) | (0.3) |
Equipment obtained under long-term financing arrangement | $ 1.3 | $ 0 |
Basis of Presentation of Interi
Basis of Presentation of Interim Financial Information | 9 Months Ended |
Sep. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation of Interim Financial Information | Basis of Presentation of Interim Financial Information The accompanying condensed consolidated financial statements of Morningstar, Inc. and subsidiaries (Morningstar, we, our, the company) have been prepared to conform to the rules and regulations of the Securities and Exchange Commission (SEC). The preparation of financial statements in conformity with accounting principles generally accepted in the United States (U.S. GAAP) requires management to make estimates and assumptions that affect the reported amount of assets, liabilities, revenue, and expenses. Actual results could differ from those estimates. In the opinion of management, the statements reflect all adjustments, which are of a normal recurring nature, necessary to present fairly our financial position, results of operations, equity, and cash flows. These financial statements and notes are unaudited and should be read in conjunction with our Audited Consolidated Financial Statements and Notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2014 , filed with the SEC on February 27, 2015 . The acronyms that appear in the Notes to our Unaudited Condensed Consolidated Financial Statements refer to the following: ASC: Accounting Standards Codification ASU: Accounting Standards Update FASB: Financial Accounting Standards Board |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies We discuss our significant accounting policies in Note 3 of our Audited Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2014 , filed with the SEC on February 27, 2015 . On May 28, 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers , which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The new standard is effective for us on January 1, 2018. The standard permits the use of either the retrospective or cumulative effect transition method. We are evaluating the effect that ASU No. 2014-09 will have on our consolidated financial statements and related disclosures. We have not yet selected a transition method nor have we determined the effect of the standard on our ongoing financial reporting. |
Credit Arrangements (Notes)
Credit Arrangements (Notes) | 9 Months Ended |
Sep. 30, 2015 | |
Debt Disclosure [Abstract] | |
Credit Arrangements | Credit Arrangements In July 2015, we renewed our $75.0 million , single-bank revolving credit facility. On July 20, 2015, we repaid the outstanding principal balance of $35.0 million , leaving full availability of the facility as of September 30, 2015 . |
Acquisitions, Goodwill and Othe
Acquisitions, Goodwill and Other Intangible Assets | 9 Months Ended |
Sep. 30, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets Goodwill The following table shows the changes in our goodwill balances from December 31, 2014 to September 30, 2015 : (in millions) Balance as of December 31, 2014 $ 370.1 Foreign currency translation (10.2 ) Balance as of September 30, 2015 $ 359.9 We did not record any impairment losses in the first nine months of 2015 or 2014 . We perform our annual impairment reviews in the fourth quarter. Intangible Assets The following table summarizes our intangible assets: As of September 30, 2015 As of December 31, 2014 (in millions) Gross Accumulated Amortization Net Weighted Average Useful Life (years) Gross Accumulated Amortization Net Weighted Average Useful Life (years) Intellectual property $ 28.1 $ (26.0 ) $ 2.1 9 $ 29.0 $ (25.0 ) $ 4.0 9 Customer-related assets 137.7 (90.0 ) 47.7 12 141.5 (83.6 ) 57.9 12 Supplier relationships 0.2 (0.1 ) 0.1 20 0.2 (0.1 ) 0.1 20 Technology-based assets 87.6 (62.4 ) 25.2 8 88.8 (57.4 ) 31.4 8 Non-competition agreement 4.2 (2.2 ) 2.0 5 4.4 (1.9 ) 2.5 5 Total intangible assets $ 257.8 $ (180.7 ) $ 77.1 10 $ 263.9 $ (168.0 ) $ 95.9 10 The following table summarizes our amortization expense related to intangible assets: Three months ended September 30 Nine months ended September 30 (in millions) 2015 2014 2015 2014 Amortization expense $ 5.5 $ 6.0 $ 16.4 $ 16.6 We amortize intangible assets using the straight-line method over their expected economic useful lives. We expect intangible amortization expense for the remainder of 2015 and subsequent years as follows: (in millions) Remainder of 2015 (from October 1 through December 31) $ 5.4 2016 17.3 2017 12.3 2018 10.2 2019 7.8 Thereafter 24.1 Our estimates of future amortization expense for intangible assets may be affected by acquisitions, divestitures, changes in the estimated average useful life, and currency translations. |
Income Per Share
Income Per Share | 9 Months Ended |
Sep. 30, 2015 | |
Earnings Per Share [Abstract] | |
Income Per Share | Income Per Share The following table shows how we reconcile our net income and the number of shares used in computing basic and diluted net income per share: Three months ended September 30 Nine months ended September 30 (in millions, except per share amounts) 2015 2014 2015 2014 Basic net income per share attributable to Morningstar, Inc.: Net income attributable to Morningstar, Inc.: $ 33.5 $ 30.2 $ 95.3 $ 46.8 Less: Distributed earnings available to participating securities — — — — Less: Undistributed earnings available to participating securities — — — — Numerator for basic net income per share — undistributed and distributed earnings available to common shareholders $ 33.5 $ 30.2 $ 95.3 $ 46.8 Weighted average common shares outstanding 44.2 44.7 44.3 44.8 Basic net income per share attributable to Morningstar, Inc. $ 0.76 $ 0.67 $ 2.15 $ 1.04 Diluted net income per share attributable to Morningstar, Inc.: Numerator for basic net income per share — undistributed and distributed earnings available to common shareholders $ 33.5 $ 30.2 $ 95.3 $ 46.8 Add: Undistributed earnings allocated to participating securities — — — — Less: Undistributed earnings reallocated to participating securities — — — — Numerator for diluted net income per share — undistributed and distributed earnings available to common shareholders $ 33.5 $ 30.2 $ 95.3 $ 46.8 Weighted average common shares outstanding 44.2 44.7 44.3 44.8 Net effect of dilutive stock options, restricted stock units, and performance share awards 0.1 0.2 0.1 0.2 Weighted average common shares outstanding for computing diluted income per share 44.3 44.9 44.4 45.0 Diluted net income per share attributable to Morningstar, Inc. $ 0.76 $ 0.67 $ 2.15 $ 1.04 The following table shows the number of restricted stock units and performance share awards excluded from our calculation of diluted earnings per share because their inclusion would have been anti-dilutive: Three months ended September 30 Nine months ended September 30 (in thousands) 2015 2014 2015 2014 Weighted average restricted stock units 45 83 41 34 Weighted average performance share awards 5 9 7 7 Total 50 92 48 41 Stock options and restricted stock could be included in the calculation in the future. |
Segment and Geographical Area I
Segment and Geographical Area Information | 9 Months Ended |
Sep. 30, 2015 | |
Segment Reporting [Abstract] | |
Segment and Geographical Area Information | Segment and Geographical Area Information Segment Information We report our results in a single reportable segment, which reflects how our chief operating decision maker allocates resources and evaluates our financial results. Because we have one reportable segment, all required financial segment information can be found directly in the Unaudited Condensed Consolidated Financial Statements. The accounting policies for our single reportable segment are the same as those described in “Note 3. Summary of Significant Accounting Policies” included in our Annual Report on Form 10-K for the year ended December 31, 2014 . We evaluate the performance of our reporting segment based on revenue and operating income. Geographical Area Information The tables below summarize our revenue and long-lived assets by geographical area: External revenue by geographical area Three months ended September 30 Nine months ended September 30 (in millions) 2015 2014 2015 2014 United States $ 145.2 $ 141.3 $ 437.3 $ 407.7 United Kingdom 15.6 15.1 46.4 46.1 Continental Europe 14.7 15.6 43.4 47.1 Australia 7.5 8.9 23.2 26.3 Canada 6.6 7.4 20.6 22.6 Asia 4.6 3.9 13.4 11.5 Other 1.1 0.9 2.9 2.4 Total International 50.1 51.8 149.9 156.0 Consolidated revenue $ 195.3 $ 193.1 $ 587.2 $ 563.7 Long-lived assets by geographical area As of September 30 As of December 31 (in millions) 2015 2014 United States $ 106.5 $ 98.1 United Kingdom 8.6 8.1 Continental Europe 2.1 2.1 Australia 0.9 0.8 Canada 0.7 0.9 Asia 5.4 7.5 Other 0.1 0.1 Total International 17.8 19.5 Consolidated property, equipment, and capitalized software, net $ 124.3 $ 117.6 |
Investments and Fair Value Meas
Investments and Fair Value Measurements | 9 Months Ended |
Sep. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Investments and Fair Value Measurements | Investments and Fair Value Measurements We account for our investments in accordance with FASB ASC 320, Investments—Debt and Equity Securities. We classify our investments into three categories: available-for-sale, held-to-maturity, and trading securities. Our investment portfolio consists of stocks, bonds, options, mutual funds, money market funds, or exchange-traded products that replicate the model portfolios and strategies created by Morningstar. These investment accounts may also include exchange-traded products where Morningstar is an index provider. We classify our investment portfolio as shown below: As of September 30 As of December 31 (in millions) 2015 2014 Available-for-sale $ 16.8 $ 13.2 Held-to-maturity 13.9 17.9 Trading securities 8.6 8.3 Total $ 39.3 $ 39.4 The following table shows the cost, unrealized gains (losses), and fair value of investments classified as available-for-sale and held-to-maturity: As of September 30, 2015 As of December 31, 2014 (in millions) Cost Unrealized Gain Unrealized Loss Fair Value Cost Unrealized Gain Unrealized Loss Fair Value Available-for-sale: Equity securities and exchange-traded funds $ 17.2 $ 0.1 $ (1.7 ) $ 15.6 $ 11.4 $ 0.8 $ (0.3 ) $ 11.9 Mutual funds 1.2 0.1 (0.1 ) 1.2 1.2 0.2 (0.1 ) 1.3 Total $ 18.4 $ 0.2 $ (1.8 ) $ 16.8 $ 12.6 $ 1.0 $ (0.4 ) $ 13.2 Held-to-maturity: Certificates of deposit $ 13.9 $ — $ — $ 13.9 $ 17.9 $ — $ — $ 17.9 As of September 30, 2015 and December 31, 2014 , investments with unrealized losses for greater than a 12-month period were not material to the Condensed Consolidated Balance Sheets and were not deemed to have other than temporary declines in value. The table below shows the cost and fair value of investments classified as available-for-sale and held-to-maturity based on their contractual maturities as of September 30, 2015 and December 31, 2014 . The expected maturities of certain fixed-income securities may differ from their contractual maturities because some of these holdings have call features that allow the issuers the right to prepay obligations without penalties. As of September 30, 2015 As of December 31, 2014 (in millions) Cost Fair Value Cost Fair Value Available-for-sale: Equity securities, exchange-traded funds, and mutual funds $ 18.4 $ 16.8 $ 12.6 $ 13.2 Total $ 18.4 $ 16.8 $ 12.6 $ 13.2 Held-to-maturity: Due in one year or less $ 13.9 $ 13.9 $ 17.9 $ 17.9 Total $ 13.9 $ 13.9 $ 17.9 $ 17.9 As of September 30, 2015 and December 31, 2014 , held-to-maturity investments included a $1.5 million certificate of deposit held primarily as collateral against bank guarantees for our office leases, primarily in Australia. The following table shows the realized gains and losses arising from sales of our investments classified as available-for-sale recorded in our Condensed Consolidated Statements of Operations: Three months ended September 30 Nine months ended September 30 (in millions) 2015 2014 2015 2014 Realized gains $ 0.1 $ 0.2 $ 1.0 $ 0.7 Realized losses (0.1 ) — (0.6 ) (0.2 ) Realized gains, net $ — $ 0.2 $ 0.4 $ 0.5 We determine realized gains and losses using the specific identification method. The following table shows the net unrealized losses on trading securities as recorded in our Condensed Consolidated Statements of Operations: Three months ended September 30 Nine months ended September 30 (in millions) 2015 2014 2015 2014 Unrealized losses, net $ (0.7 ) $ (0.3 ) $ (1.0 ) $ (0.1 ) The table below shows the fair value of our assets subject to fair value measurements that are measured at fair value on a recurring basis using the fair value hierarchy and the necessary disclosures under FASB ASC 820, Fair Value Measurement : Fair Value Fair Value Measurements as of September 30, 2015 as of Using Fair Value Hierarchy (in millions) September 30, 2015 Level 1 Level 2 Level 3 Available-for-sale investments: Equity securities and exchange-traded funds $ 15.6 $ 15.6 $ — $ — Mutual funds 1.2 1.2 — — Trading securities 8.6 8.6 — — Cash equivalents 0.4 0.4 — — Total $ 25.8 $ 25.8 $ — $ — Fair Value Fair Value Measurements as of December 31, 2014 as of Using Fair Value Hierarchy (in millions) December 31, 2014 Level 1 Level 2 Level 3 Available-for-sale investments: Equity securities and exchange-traded funds $ 11.9 $ 11.9 $ — $ — Mutual funds 1.3 1.3 — — Trading securities 8.3 8.3 — — Cash equivalents 0.5 0.5 — — Total $ 22.0 $ 22.0 $ — $ — Level 1: Valuations based on quoted prices in active markets for identical assets or liabilities that we have the ability to access. Level 2: Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly. Level 3: Valuations based on inputs that are unobservable and significant to the overall fair value measurement. Based on our analysis of the nature and risks of our investments in equity securities and mutual funds, we have determined that presenting each of these investment categories in the aggregate is appropriate. We measure the fair value of money market funds, mutual funds, equity securities, and exchange-traded funds based on quoted prices in active markets for identical assets or liabilities. We did not hold any securities categorized as Level 2 or Level 3 as of September 30, 2015 and December 31, 2014 . |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation Stock-Based Compensation Plans Our shareholders approved the Morningstar 2011 Stock Incentive Plan (the 2011 Plan) on May 17, 2011. As of that date, we stopped granting awards under the Morningstar 2004 Stock Incentive Plan (the 2004 Plan). The 2004 Plan amended and restated the Morningstar 1993 Stock Option Plan, the Morningstar 2000 Stock Option Plan, and the Morningstar 2001 Stock Option Plan. The 2011 Plan provides for a variety of stock-based awards, including, among other things, stock options, performance share awards, restricted stock units, and restricted stock. We granted stock options, restricted stock units, and restricted stock under the 2004 Plan. All of our employees and our non-employee directors are eligible for awards under the 2011 Plan. Grants awarded under the 2011 Plan or the 2004 Plan that are forfeited, canceled, settled, or otherwise terminated without a distribution of shares, or shares withheld by us in connection with the exercise of options, will be available for awards under the 2011 Plan. Any shares subject to awards under the 2011 Plan, but not under the 2004 Plan, that are withheld by us in connection with the payment of any required income tax withholding will be available for awards under the 2011 Plan. Accounting for Stock-Based Compensation Awards The following table summarizes the stock-based compensation expense included in each of our operating expense categories: Three months ended September 30 Nine months ended September 30 (in millions) 2015 2014 2015 2014 Cost of revenue $ 2.1 $ 2.2 $ 6.2 $ 5.9 Sales and marketing 0.6 0.6 1.7 1.6 General and administrative 1.9 2.2 5.6 5.8 Total stock-based compensation expense $ 4.6 $ 5.0 $ 13.5 $ 13.3 The following table summarizes the amount of unrecognized stock-based compensation expense as of September 30, 2015 and the expected number of months over which the expense will be recognized: Unrecognized stock-based compensation expense (in millions) Expected amortization period (months) Restricted stock units $ 33.8 32 Performance share awards 3.2 26 Total unrecognized stock-based compensation expense $ 37.0 32 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Effective Tax Rate The following table shows our effective tax rate for the three and nine months ended September 30, 2015 and September 30, 2014 : Three months ended September 30 Nine months ended September 30 (in millions) 2015 2014 2015 2014 Income before income taxes and equity in net income of unconsolidated entities $ 47.6 $ 45.0 $ 142.2 $ 65.5 Equity in net income of unconsolidated entities 0.5 0.3 1.5 1.4 Net (income) loss attributable to the noncontrolling interest — — (0.2 ) 0.1 Total $ 48.1 $ 45.3 $ 143.5 $ 67.0 Income tax expense $ 14.6 $ 15.1 $ 48.2 $ 20.2 Effective tax rate 30.4 % 33.4 % 33.6 % 30.1 % Our effective tax rate in the third quarter of 2015 was 30.4% , a decrease of 3.0 percentage points compared with 33.4% in the prior-year period. During the third quarter of 2015, we recognized additional tax benefits for credits and incentives. We also recognized a deferred tax asset for net operating losses for certain of our foreign operations that we expect will be utilized over time based upon recent financial performance and forecasted taxable income. Both of these items reduced our effective tax rate in the third quarter of 2015. Our effective tax rate for the first nine months of 2015 was 33.6% , which was higher than the 30.1% rate for the comparable period a year ago because of the non-taxable gain of $5.2 million recorded in connection with purchasing the remaining ownership interest in HelloWallet. Unrecognized Tax Benefits The table below provides information concerning our gross unrecognized tax benefits as of September 30, 2015 and December 31, 2014 , as well as the effect these gross unrecognized tax benefits would have on our income tax expense, if they were recognized. As of September 30 As of December 31 (in millions) 2015 2014 Gross unrecognized tax benefits $ 14.2 $ 11.9 Gross unrecognized tax benefits that would affect income tax expense $ 12.1 $ 11.9 Decrease in income tax expense upon recognition of gross unrecognized tax benefits $ 10.9 $ 10.6 Our Condensed Consolidated Balance Sheets include the following liabilities for unrecognized tax benefits. These amounts include interest and penalties, less any associated tax benefits. As of September 30 As of December 31 Liabilities for Unrecognized Tax Benefits (in millions) 2015 2014 Current liability $ 5.8 $ 5.1 Non-current liability 6.1 6.6 Total liability for unrecognized tax benefits $ 11.9 $ 11.7 We conduct business globally and, as a result, we file income tax returns in U.S. federal, state, local, and foreign jurisdictions. We are currently under audit by federal and various state and local tax authorities in the United States, as well as tax authorities in certain non-U.S. jurisdictions. It is possible, though not likely, that the examination phase of some of these audits will conclude in 2015 . It is not possible to estimate the effect of current audits on previously recorded unrecognized tax benefits. We have not provided federal and state income taxes on accumulated undistributed earnings of certain foreign subsidiaries because these earnings have been permanently reinvested. Approximately 65% of our cash, cash equivalents, and investments balance as of September 30, 2015 was held by our operations outside of the United States. We believe that our cash balances and investments in the United States, along with cash generated from our U.S. operations, will be sufficient to meet our U.S. operating and cash needs for the foreseeable future, without requiring us to repatriate earnings from these foreign subsidiaries. It is not practical to determine the amount of the unrecognized deferred tax liability related to the undistributed earnings. Certain of our non-U.S. operations have incurred net operating losses (NOLs) which may become deductible to the extent these operations become profitable. For each of our operations, we evaluate whether it is more likely than not that the tax benefits related to NOLs will be realized. As part of this evaluation, we consider evidence such as tax planning strategies, historical operating results, forecasted taxable income, and recent financial performance. In the year that certain non-U.S. operations record a loss, we do not recognize a corresponding tax benefit, thus increasing our effective tax rate. Upon determining that it is more likely than not that the NOLs will be realized, we reduce the tax valuation allowances related to these NOLs, which results in a reduction to our income tax expense and our effective tax rate in the period. |
Contingencies
Contingencies | 9 Months Ended |
Sep. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Contingencies We are involved in legal proceedings and litigation that have arisen in the normal course of our business. Although the outcome of a particular proceeding can never be predicted, we do not believe the result of any of these matters will have a material adverse effect on our business, operating results, or financial position. |
Share Repurchase Program
Share Repurchase Program | 9 Months Ended |
Sep. 30, 2015 | |
Equity [Abstract] | |
Share Repurchase Program | Share Repurchase Program We have an ongoing authorization, originally approved by our board of directors in September 2010, and subsequently amended, to repurchase up to $700.0 million in shares of our outstanding common stock. The authorization expires on December 31, 2015. We may repurchase shares from time to time at prevailing market prices on the open market or in private transactions in amounts that we deem appropriate. As of September 30, 2015 , we had repurchased a total of 8,538,441 shares for $556.6 million under this authorization, leaving approximately $143.4 million available for future repurchases. |
Summary of Significant Accoun20
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
Segment Reporting Policy | We report our results in a single reportable segment, which reflects how our chief operating decision maker allocates resources and evaluates our financial results. Because we have one reportable segment, all required financial segment information can be found directly in the Unaudited Condensed Consolidated Financial Statements. The accounting policies for our single reportable segment are the same as those described in “Note 3. Summary of Significant Accounting Policies” included in our Annual Report on Form 10-K for the year ended December 31, 2014 . We evaluate the performance of our reporting segment based on revenue and operating income. |
Investments- Debt and Equity Securities Policy | We account for our investments in accordance with FASB ASC 320, Investments—Debt and Equity Securities. We classify our investments into three categories: available-for-sale, held-to-maturity, and trading securities. Our investment portfolio consists of stocks, bonds, options, mutual funds, money market funds, or exchange-traded products that replicate the model portfolios and strategies created by Morningstar. These investment accounts may also include exchange-traded products where Morningstar is an index provider. We classify our investment portfolio as shown below: |
Acquisitions, Goodwill and Ot21
Acquisitions, Goodwill and Other Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The following table shows the changes in our goodwill balances from December 31, 2014 to September 30, 2015 : (in millions) Balance as of December 31, 2014 $ 370.1 Foreign currency translation (10.2 ) Balance as of September 30, 2015 $ 359.9 |
Schedule of Intangible Assets | The following table summarizes our intangible assets: As of September 30, 2015 As of December 31, 2014 (in millions) Gross Accumulated Amortization Net Weighted Average Useful Life (years) Gross Accumulated Amortization Net Weighted Average Useful Life (years) Intellectual property $ 28.1 $ (26.0 ) $ 2.1 9 $ 29.0 $ (25.0 ) $ 4.0 9 Customer-related assets 137.7 (90.0 ) 47.7 12 141.5 (83.6 ) 57.9 12 Supplier relationships 0.2 (0.1 ) 0.1 20 0.2 (0.1 ) 0.1 20 Technology-based assets 87.6 (62.4 ) 25.2 8 88.8 (57.4 ) 31.4 8 Non-competition agreement 4.2 (2.2 ) 2.0 5 4.4 (1.9 ) 2.5 5 Total intangible assets $ 257.8 $ (180.7 ) $ 77.1 10 $ 263.9 $ (168.0 ) $ 95.9 10 |
Schedule of Intangible Asset, Amortization Expense | The following table summarizes our amortization expense related to intangible assets: Three months ended September 30 Nine months ended September 30 (in millions) 2015 2014 2015 2014 Amortization expense $ 5.5 $ 6.0 $ 16.4 $ 16.6 |
Schedule of Expected Amortization Expense | We expect intangible amortization expense for the remainder of 2015 and subsequent years as follows: (in millions) Remainder of 2015 (from October 1 through December 31) $ 5.4 2016 17.3 2017 12.3 2018 10.2 2019 7.8 Thereafter 24.1 Our estimates of future amortization expense for intangible assets may be affected by acquisitions, divestitures, changes in the estimated average useful life, and currency translations. |
Income Per Share (Tables)
Income Per Share (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block] | The following table shows the number of restricted stock units and performance share awards excluded from our calculation of diluted earnings per share because their inclusion would have been anti-dilutive: Three months ended September 30 Nine months ended September 30 (in thousands) 2015 2014 2015 2014 Weighted average restricted stock units 45 83 41 34 Weighted average performance share awards 5 9 7 7 Total 50 92 48 41 Stock options and restricted stock could be included in the calculation in the future. |
Schedule of Earnings Per Share, Basic and Diluted | The following table shows how we reconcile our net income and the number of shares used in computing basic and diluted net income per share: Three months ended September 30 Nine months ended September 30 (in millions, except per share amounts) 2015 2014 2015 2014 Basic net income per share attributable to Morningstar, Inc.: Net income attributable to Morningstar, Inc.: $ 33.5 $ 30.2 $ 95.3 $ 46.8 Less: Distributed earnings available to participating securities — — — — Less: Undistributed earnings available to participating securities — — — — Numerator for basic net income per share — undistributed and distributed earnings available to common shareholders $ 33.5 $ 30.2 $ 95.3 $ 46.8 Weighted average common shares outstanding 44.2 44.7 44.3 44.8 Basic net income per share attributable to Morningstar, Inc. $ 0.76 $ 0.67 $ 2.15 $ 1.04 Diluted net income per share attributable to Morningstar, Inc.: Numerator for basic net income per share — undistributed and distributed earnings available to common shareholders $ 33.5 $ 30.2 $ 95.3 $ 46.8 Add: Undistributed earnings allocated to participating securities — — — — Less: Undistributed earnings reallocated to participating securities — — — — Numerator for diluted net income per share — undistributed and distributed earnings available to common shareholders $ 33.5 $ 30.2 $ 95.3 $ 46.8 Weighted average common shares outstanding 44.2 44.7 44.3 44.8 Net effect of dilutive stock options, restricted stock units, and performance share awards 0.1 0.2 0.1 0.2 Weighted average common shares outstanding for computing diluted income per share 44.3 44.9 44.4 45.0 Diluted net income per share attributable to Morningstar, Inc. $ 0.76 $ 0.67 $ 2.15 $ 1.04 |
Segment and Geographical Area23
Segment and Geographical Area Information (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Revenue from External Customer [Line Items] | |
Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas [Table Text Block] | The tables below summarize our revenue and long-lived assets by geographical area: External revenue by geographical area Three months ended September 30 Nine months ended September 30 (in millions) 2015 2014 2015 2014 United States $ 145.2 $ 141.3 $ 437.3 $ 407.7 United Kingdom 15.6 15.1 46.4 46.1 Continental Europe 14.7 15.6 43.4 47.1 Australia 7.5 8.9 23.2 26.3 Canada 6.6 7.4 20.6 22.6 Asia 4.6 3.9 13.4 11.5 Other 1.1 0.9 2.9 2.4 Total International 50.1 51.8 149.9 156.0 Consolidated revenue $ 195.3 $ 193.1 $ 587.2 $ 563.7 Long-lived assets by geographical area As of September 30 As of December 31 (in millions) 2015 2014 United States $ 106.5 $ 98.1 United Kingdom 8.6 8.1 Continental Europe 2.1 2.1 Australia 0.9 0.8 Canada 0.7 0.9 Asia 5.4 7.5 Other 0.1 0.1 Total International 17.8 19.5 Consolidated property, equipment, and capitalized software, net $ 124.3 $ 117.6 |
Investments and Fair Value Me24
Investments and Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Schedule of Investments | We classify our investment portfolio as shown below: As of September 30 As of December 31 (in millions) 2015 2014 Available-for-sale $ 16.8 $ 13.2 Held-to-maturity 13.9 17.9 Trading securities 8.6 8.3 Total $ 39.3 $ 39.4 |
Unrealized Gain (Loss) on Investments | The following table shows the cost, unrealized gains (losses), and fair value of investments classified as available-for-sale and held-to-maturity: As of September 30, 2015 As of December 31, 2014 (in millions) Cost Unrealized Gain Unrealized Loss Fair Value Cost Unrealized Gain Unrealized Loss Fair Value Available-for-sale: Equity securities and exchange-traded funds $ 17.2 $ 0.1 $ (1.7 ) $ 15.6 $ 11.4 $ 0.8 $ (0.3 ) $ 11.9 Mutual funds 1.2 0.1 (0.1 ) 1.2 1.2 0.2 (0.1 ) 1.3 Total $ 18.4 $ 0.2 $ (1.8 ) $ 16.8 $ 12.6 $ 1.0 $ (0.4 ) $ 13.2 Held-to-maturity: Certificates of deposit $ 13.9 $ — $ — $ 13.9 $ 17.9 $ — $ — $ 17.9 |
Investments Classified by Contractual Maturity Date | The expected maturities of certain fixed-income securities may differ from their contractual maturities because some of these holdings have call features that allow the issuers the right to prepay obligations without penalties. As of September 30, 2015 As of December 31, 2014 (in millions) Cost Fair Value Cost Fair Value Available-for-sale: Equity securities, exchange-traded funds, and mutual funds $ 18.4 $ 16.8 $ 12.6 $ 13.2 Total $ 18.4 $ 16.8 $ 12.6 $ 13.2 Held-to-maturity: Due in one year or less $ 13.9 $ 13.9 $ 17.9 $ 17.9 Total $ 13.9 $ 13.9 $ 17.9 $ 17.9 |
Schedule of Realized Gain (Loss) on Available-For-Sale Securities | The following table shows the realized gains and losses arising from sales of our investments classified as available-for-sale recorded in our Condensed Consolidated Statements of Operations: Three months ended September 30 Nine months ended September 30 (in millions) 2015 2014 2015 2014 Realized gains $ 0.1 $ 0.2 $ 1.0 $ 0.7 Realized losses (0.1 ) — (0.6 ) (0.2 ) Realized gains, net $ — $ 0.2 $ 0.4 $ 0.5 |
Unrealized Gain (Loss) On Trading Securities | The following table shows the net unrealized losses on trading securities as recorded in our Condensed Consolidated Statements of Operations: Three months ended September 30 Nine months ended September 30 (in millions) 2015 2014 2015 2014 Unrealized losses, net $ (0.7 ) $ (0.3 ) $ (1.0 ) $ (0.1 ) |
Fair Value, Assets Measured on Recurring Basis | The table below shows the fair value of our assets subject to fair value measurements that are measured at fair value on a recurring basis using the fair value hierarchy and the necessary disclosures under FASB ASC 820, Fair Value Measurement : Fair Value Fair Value Measurements as of September 30, 2015 as of Using Fair Value Hierarchy (in millions) September 30, 2015 Level 1 Level 2 Level 3 Available-for-sale investments: Equity securities and exchange-traded funds $ 15.6 $ 15.6 $ — $ — Mutual funds 1.2 1.2 — — Trading securities 8.6 8.6 — — Cash equivalents 0.4 0.4 — — Total $ 25.8 $ 25.8 $ — $ — Fair Value Fair Value Measurements as of December 31, 2014 as of Using Fair Value Hierarchy (in millions) December 31, 2014 Level 1 Level 2 Level 3 Available-for-sale investments: Equity securities and exchange-traded funds $ 11.9 $ 11.9 $ — $ — Mutual funds 1.3 1.3 — — Trading securities 8.3 8.3 — — Cash equivalents 0.5 0.5 — — Total $ 22.0 $ 22.0 $ — $ — |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule Of Compensation Cost By Expense Category | The following table summarizes the stock-based compensation expense included in each of our operating expense categories: Three months ended September 30 Nine months ended September 30 (in millions) 2015 2014 2015 2014 Cost of revenue $ 2.1 $ 2.2 $ 6.2 $ 5.9 Sales and marketing 0.6 0.6 1.7 1.6 General and administrative 1.9 2.2 5.6 5.8 Total stock-based compensation expense $ 4.6 $ 5.0 $ 13.5 $ 13.3 |
Schedule of Unrecognized Stock-Based Compensation Expense | The following table summarizes the amount of unrecognized stock-based compensation expense as of September 30, 2015 and the expected number of months over which the expense will be recognized: Unrecognized stock-based compensation expense (in millions) Expected amortization period (months) Restricted stock units $ 33.8 32 Performance share awards 3.2 26 Total unrecognized stock-based compensation expense $ 37.0 32 |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Income Tax Disclosure [Abstract] | |
Schedule of Effective Income Tax Rate Reconciliation | The following table shows our effective tax rate for the three and nine months ended September 30, 2015 and September 30, 2014 : Three months ended September 30 Nine months ended September 30 (in millions) 2015 2014 2015 2014 Income before income taxes and equity in net income of unconsolidated entities $ 47.6 $ 45.0 $ 142.2 $ 65.5 Equity in net income of unconsolidated entities 0.5 0.3 1.5 1.4 Net (income) loss attributable to the noncontrolling interest — — (0.2 ) 0.1 Total $ 48.1 $ 45.3 $ 143.5 $ 67.0 Income tax expense $ 14.6 $ 15.1 $ 48.2 $ 20.2 Effective tax rate 30.4 % 33.4 % 33.6 % 30.1 % |
Schedule of Gross Unrecognized Tax Benefits | The table below provides information concerning our gross unrecognized tax benefits as of September 30, 2015 and December 31, 2014 , as well as the effect these gross unrecognized tax benefits would have on our income tax expense, if they were recognized. As of September 30 As of December 31 (in millions) 2015 2014 Gross unrecognized tax benefits $ 14.2 $ 11.9 Gross unrecognized tax benefits that would affect income tax expense $ 12.1 $ 11.9 Decrease in income tax expense upon recognition of gross unrecognized tax benefits $ 10.9 $ 10.6 |
Schedule of Liabilities for Unrecognized Tax Benefits | Our Condensed Consolidated Balance Sheets include the following liabilities for unrecognized tax benefits. These amounts include interest and penalties, less any associated tax benefits. As of September 30 As of December 31 Liabilities for Unrecognized Tax Benefits (in millions) 2015 2014 Current liability $ 5.8 $ 5.1 Non-current liability 6.1 6.6 Total liability for unrecognized tax benefits $ 11.9 $ 11.7 |
Credit Arrangements (Details)
Credit Arrangements (Details) - Revolving Credit Facility [Member] - USD ($) $ in Millions | Jul. 20, 2015 | Jul. 09, 2015 |
Line of Credit Facility [Line Items] | ||
Line of credit | $ 75 | |
Principal balance of credit facility repaid | $ 35 |
Acquisitions, Goodwill and Ot28
Acquisitions, Goodwill and Other Intangible Assets (Schedule of Goodwill) (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Goodwill, Impairment Loss | $ 0 | $ 0 |
Goodwill [Roll Forward] | ||
Goodwill, Beginning Balance | 370.1 | |
Foreign currency translation | (10.2) | |
Goodwill, Ending Balance | $ 359.9 |
Acquisitions, Goodwill and Ot29
Acquisitions, Goodwill and Other Intangible Assets (Schedule of Intangible Assets) (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2015 | Dec. 31, 2014 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross | $ 257.8 | $ 263.9 |
Accumulated Amortization | (180.7) | (168) |
Intangible assets, Net | $ 77.1 | $ 95.9 |
Weighted-Average Useful Life (years) | 10 years | 10 years |
Intellectual Property [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | $ 28.1 | $ 29 |
Accumulated Amortization | (26) | (25) |
Intangible assets, Net | $ 2.1 | $ 4 |
Weighted-Average Useful Life (years) | 9 years | 9 years |
Customer Related Assets [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | $ 137.7 | $ 141.5 |
Accumulated Amortization | (90) | (83.6) |
Intangible assets, Net | $ 47.7 | $ 57.9 |
Weighted-Average Useful Life (years) | 12 years | 12 years |
Supplier Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | $ 0.2 | $ 0.2 |
Accumulated Amortization | (0.1) | (0.1) |
Intangible assets, Net | $ 0.1 | $ 0.1 |
Weighted-Average Useful Life (years) | 20 years | 20 years |
Technology-Based Assets [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | $ 87.6 | $ 88.8 |
Accumulated Amortization | (62.4) | (57.4) |
Intangible assets, Net | $ 25.2 | $ 31.4 |
Weighted-Average Useful Life (years) | 8 years | 8 years |
Non-competition Agreement [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | $ 4.2 | $ 4.4 |
Accumulated Amortization | (2.2) | (1.9) |
Intangible assets, Net | $ 2 | $ 2.5 |
Weighted-Average Useful Life (years) | 5 years | 5 years |
Acquisitions, Goodwill and Ot30
Acquisitions, Goodwill and Other Intangible Assets (Amortization Expense) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization expense | $ 5.5 | $ 6 | $ 16.4 | $ 16.6 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||||
2,015 | 5.4 | 5.4 | ||
2,016 | 17.3 | 17.3 | ||
2,017 | 12.3 | 12.3 | ||
2,018 | 10.2 | 10.2 | ||
2,019 | 7.8 | 7.8 | ||
Thereafter | $ 24.1 | $ 24.1 |
Income Per Share (Details)
Income Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 50 | 92 | 48 | 41 |
Earnings Per Share, Basic [Abstract] | ||||
Net income attributable to Morningstar, Inc. | $ 33.5 | $ 30.2 | $ 95.3 | $ 46.8 |
Less: Distributed Earnings Available to Participating Securities | 0 | 0 | 0 | 0 |
Undistributed Earnings (Loss) Allocated to Participating Securities, Basic | 0 | 0 | 0 | 0 |
Numerator for basic net income per share - undistributed and distributed earnings available to common shareholders | $ 33.5 | $ 30.2 | $ 95.3 | $ 46.8 |
Weighted average common shares outstanding | 44,200 | 44,700 | 44,300 | 44,800 |
Basic net income per share attributable to Morningstar, Inc. | $ 0.76 | $ 0.67 | $ 2.15 | $ 1.04 |
Earnings Per Share, Diluted [Abstract] | ||||
Numerator for basic net income per share - undistributed and distributed earnings available to common shareholders | $ 33.5 | $ 30.2 | $ 95.3 | $ 46.8 |
Add: Undistributed Earnings Allocated To Participating Securities | 0 | 0 | 0 | 0 |
Less: Undistributed Earnings Reallocated to Participating Securities | 0 | 0 | 0 | 0 |
Numerator for diluted net income per share - undistributed and distributed earnings available to common shareholders | $ 33.5 | $ 30.2 | $ 95.3 | $ 46.8 |
Weighted average common shares outstanding | 44,200 | 44,700 | 44,300 | 44,800 |
Net effect of dilutive stock options and restricted stock units | 100 | 200 | 100 | 200 |
Weighted average common shares outstanding for computing diluted income per share | 44,300 | 44,900 | 44,400 | 45,000 |
Diluted net income per share attributable to Morningstar, Inc. | $ 0.76 | $ 0.67 | $ 2.15 | $ 1.04 |
Restricted Stock Units (RSUs) [Member] | ||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 45 | 83 | 41 | 34 |
Performance Shares [Member] | ||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 5 | 9 | 7 | 7 |
Segment and Geographical Area32
Segment and Geographical Area Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Segment Reporting Information, Operating Income (Loss) [Abstract] | ||||
External revenue | $ 195.3 | $ 193.1 | $ 587.2 | $ 563.7 |
U.S. [Member] | ||||
Segment Reporting Information, Operating Income (Loss) [Abstract] | ||||
External revenue | 145.2 | 141.3 | 437.3 | 407.7 |
Non-U.S. [Member] | ||||
Segment Reporting Information, Operating Income (Loss) [Abstract] | ||||
External revenue | $ 50.1 | $ 51.8 | $ 149.9 | $ 156 |
Segment and Geographical Area33
Segment and Geographical Area Information (External Revenue and Long-Lived Assets) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
External revenue | $ 195.3 | $ 193.1 | $ 587.2 | $ 563.7 | |
Long-lived assets | 124.3 | 124.3 | $ 117.6 | ||
United States | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
External revenue | 145.2 | 141.3 | 437.3 | 407.7 | |
Long-lived assets | 106.5 | 106.5 | 98.1 | ||
Total International | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
External revenue | 50.1 | 51.8 | 149.9 | 156 | |
Long-lived assets | 17.8 | 17.8 | 19.5 | ||
United Kingdom | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
External revenue | 15.6 | 15.1 | 46.4 | 46.1 | |
Long-lived assets | 8.6 | 8.6 | 8.1 | ||
Continental Europe | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
External revenue | 14.7 | 15.6 | 43.4 | 47.1 | |
Long-lived assets | 2.1 | 2.1 | 2.1 | ||
Australia | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
External revenue | 7.5 | 8.9 | 23.2 | 26.3 | |
Long-lived assets | 0.9 | 0.9 | 0.8 | ||
Canada | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
External revenue | 6.6 | 7.4 | 20.6 | 22.6 | |
Long-lived assets | 0.7 | 0.7 | 0.9 | ||
Asia | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
External revenue | 4.6 | 3.9 | 13.4 | 11.5 | |
Long-lived assets | 5.4 | 5.4 | 7.5 | ||
Other | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
External revenue | 1.1 | $ 0.9 | 2.9 | $ 2.4 | |
Long-lived assets | $ 0.1 | $ 0.1 | $ 0.1 |
Investments and Fair Value Me34
Investments and Fair Value Measurements (Classification of Securities) (Details) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
Fair Value Disclosures [Abstract] | ||
Available-for-sale | $ 16.8 | $ 13.2 |
Held-to-maturity | 13.9 | 17.9 |
Trading securities | 8.6 | 8.3 |
Total | $ 39.3 | $ 39.4 |
Investments and Fair Value Me35
Investments and Fair Value Measurements (Gains (Losses) on Investments) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Available-for-sale: | |||||
Available-for-sale securities, Cost | $ 18.4 | $ 18.4 | $ 12.6 | ||
Available-for-sale Securities, Unrealized Gain | 0.2 | 0.2 | 1 | ||
Available-for-sale Securities, Unrealized Loss | (1.8) | (1.8) | (0.4) | ||
Available-for-sale securities, Fair Value | 16.8 | 16.8 | 13.2 | ||
Held-to-maturity: | |||||
Held-to-maturity securities, Cost | 13.9 | 13.9 | 17.9 | ||
Held-to-maturity Securities, Unrecognized Gain | 0 | 0 | 0 | ||
Held-to-maturity Securities, Unrecognized Loss | 0 | 0 | 0 | ||
Held-to-maturity | 13.9 | 13.9 | 17.9 | ||
Available-for-sale Securities, Gross Realized Gain (Loss) [Abstract] | |||||
Available-for-sale securities, realized gains | 0.1 | $ 0.2 | 1 | $ 0.7 | |
Available-for-sale securities, realized losses | (0.1) | 0 | (0.6) | (0.2) | |
Available-for-sale securities, realized gains (losses), net | 0 | $ 0.2 | 0.4 | $ 0.5 | |
Equity Securities and Exchange-traded Funds [Member] | |||||
Available-for-sale: | |||||
Available-for-sale securities, Cost | 17.2 | 17.2 | 11.4 | ||
Available-for-sale Securities, Unrealized Gain | 0.1 | 0.1 | 0.8 | ||
Available-for-sale Securities, Unrealized Loss | (1.7) | (1.7) | (0.3) | ||
Available-for-sale securities, Fair Value | 15.6 | 15.6 | 11.9 | ||
Mutual Funds [Member] | |||||
Available-for-sale: | |||||
Available-for-sale securities, Cost | 1.2 | 1.2 | 1.2 | ||
Available-for-sale Securities, Unrealized Gain | 0.1 | 0.1 | 0.2 | ||
Available-for-sale Securities, Unrealized Loss | (0.1) | (0.1) | (0.1) | ||
Available-for-sale securities, Fair Value | $ 1.2 | $ 1.2 | $ 1.3 |
Investments and Fair Value Me36
Investments and Fair Value Measurements (Cost and Fair Value of Investments Classified by Maturity) (Details) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
Available-for-sale Securities, Debt Maturities [Abstract] | ||
Available-for-sale securities, Equity securities, exchange-traded funds, and mutual funds, Cost | $ 18.4 | $ 12.6 |
Available-for-sale securities, Equity securities, exchange-traded funds, and mutual funds, Fair Value | 16.8 | 13.2 |
Available-for-sale securities, Cost | 18.4 | 12.6 |
Available-for-sale securities, Fair Value | 16.8 | 13.2 |
Held-to-maturity Securities, Debt Maturities [Abstract] | ||
Held-to-maturity securities, Due in one year or less, Cost | 13.9 | 17.9 |
Held-to-maturity securities, Due within one year or less, Fair Value | 13.9 | 17.9 |
Held-to-maturity securities, Cost | 13.9 | 17.9 |
Held-to-maturity securities, Fair Value | 13.9 | 17.9 |
Certificate of deposit held as collateral against Australia office lease | $ 1.5 | $ 1.5 |
Investments and Fair Value Me37
Investments and Fair Value Measurements (Unrealized Gains on Trading Securities) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Fair Value Disclosures [Abstract] | ||||
Unrealized gains (losses), net | $ (0.7) | $ (0.3) | $ (1) | $ (0.1) |
Investments and Fair Value Me38
Investments and Fair Value Measurements (Fair Value of Assets) (Details) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Trading securities, fair value | $ 8.6 | $ 8.3 |
Fair Value, Measurements, Recurring [Member] | Estimate of Fair Value Measurement [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Trading securities, fair value | 8.6 | 8.3 |
Cash equivalents, fair value | 0.4 | 0.5 |
Total investments, fair value | 25.8 | 22 |
Fair Value, Measurements, Recurring [Member] | Equity Securities and Exchange-traded Funds [Member] | Estimate of Fair Value Measurement [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities, fair value | 15.6 | 11.9 |
Fair Value, Measurements, Recurring [Member] | Mutual Funds [Member] | Estimate of Fair Value Measurement [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities, fair value | 1.2 | 1.3 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Trading securities, fair value | 8.6 | 8.3 |
Cash equivalents, fair value | 0.4 | 0.5 |
Total investments, fair value | 25.8 | 22 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | Equity Securities and Exchange-traded Funds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities, fair value | 15.6 | 11.9 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | Mutual Funds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities, fair value | 1.2 | 1.3 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Trading securities, fair value | 0 | 0 |
Cash equivalents, fair value | 0 | 0 |
Total investments, fair value | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Equity Securities and Exchange-traded Funds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities, fair value | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Mutual Funds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities, fair value | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Trading securities, fair value | 0 | 0 |
Cash equivalents, fair value | 0 | 0 |
Total investments, fair value | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | Equity Securities and Exchange-traded Funds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities, fair value | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | Mutual Funds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities, fair value | $ 0 | $ 0 |
Investments and Fair Value Me39
Investments and Fair Value Measurements - Narrative (Details) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
Fair Value Disclosures [Abstract] | ||
Certificate of deposit held as collateral against Australia office lease | $ 1.5 | $ 1.5 |
Stock-Based Compensation (Alloc
Stock-Based Compensation (Allocation of Stock-Based Compensation Costs by Plan) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Allocated Share-based Compensation Expense | $ 4.6 | $ 5 | $ 13.5 | $ 13.3 |
Cost of Revenue [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Allocated Share-based Compensation Expense | 2.1 | 2.2 | 6.2 | 5.9 |
Selling and Marketing Expense [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Allocated Share-based Compensation Expense | 0.6 | 0.6 | 1.7 | 1.6 |
General and Administrative Expense [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Allocated Share-based Compensation Expense | $ 1.9 | $ 2.2 | $ 5.6 | $ 5.8 |
Stock-Based Compensation (Sched
Stock-Based Compensation (Schedule of Unrecognized Stock-based Compensation Expense) (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2015USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized stock-based compensation expense | $ 37 |
Expected amortization period (months) | 32 years |
Restricted Stock Units (RSUs) [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized stock-based compensation expense | $ 33.8 |
Expected amortization period (months) | 32 years |
Performance Shares [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized stock-based compensation expense | $ 3.2 |
Expected amortization period (months) | 26 years |
Income Taxes (Income Tax Reconc
Income Taxes (Income Tax Reconciliation and Unrecognized Tax Benefits) (Details) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Dec. 31, 2014USD ($) | |
Effective Income Tax Rate Reconciliation, Amount [Abstract] | |||||
Income before income taxes and equity in net income of unconsolidated entities | $ 47.6 | $ 45 | $ 142.2 | $ 65.5 | |
Equity in net income of unconsolidated entities | 0.5 | 0.3 | 1.5 | 1.4 | |
Net (income) loss attributable to the noncontrolling interest | 0 | 0 | (0.2) | 0.1 | |
Total | 48.1 | 45.3 | 143.5 | 67 | |
Income tax expense (benefit) | $ 14.6 | $ 15.1 | $ 48.2 | $ 20.2 | |
Effective income tax rate | 0.00% | 0.00% | 0.00% | 0.00% | |
Effective income tax rate reconciliation, change in percentage points compared with prior year period | (3) | ||||
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued [Abstract] | |||||
Current liabilities | $ 5.8 | $ 5.8 | $ 5.1 | ||
Non-current liabilities | 6.1 | 6.1 | 6.6 | ||
Total liability for unrecognized tax benefits | $ 11.9 | $ 11.9 | $ 11.7 | ||
Concentration Risk [Line Items] | |||||
Non-taxable gain recorded | $ 5.2 | ||||
Geographic Concentration Risk [Member] | Cash, Cash Equivalents and Investments [Member] | Non-U.S. [Member] | |||||
Concentration Risk [Line Items] | |||||
Percentage of cash, cash equivalents and investments held by operations outside of US | 65.00% |
Income Taxes (Income Tax Contin
Income Taxes (Income Tax Contingency) (Details) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
Income Tax Disclosure [Abstract] | ||
Gross unrecognized tax benefits | $ 14.2 | $ 11.9 |
Gross unrecognized tax benefits which would affect income tax expense | 12.1 | 11.9 |
Decrease in income tax expense upon recognition of gross unrecognized tax benefits | $ 10.9 | $ 10.6 |
Share Repurchase Program (Detai
Share Repurchase Program (Details) | Sep. 30, 2015USD ($)shares |
Equity [Abstract] | |
Share repurchase program, authorized amount | $ 700,000,000 |
Shares repurchased, program life to date, shares | shares | 8,538,441 |
Shares repurchased, program life to date, value | $ 556,600,000 |
Stock Repurchase Program, Remaining Authorized Repurchase Amount | $ 143,400,000 |