MORNINGSTAR, INC., 10-K filed on 3/1/2017
Annual Report
Document and Entity Information Document (USD $)
12 Months Ended
Dec. 31, 2016
Feb. 17, 2017
Jun. 30, 2016
Document and Entity Information Abstract
 
 
 
Entity Registrant Name
MORNINGSTAR, INC. 
 
 
Entity Central Index Key
0001289419 
 
 
Current Fiscal Year End Date
--12-31 
 
 
Entity Filer Category
Large Accelerated Filer 
 
 
Document Type
10-K 
 
 
Document Period End Date
Dec. 31, 2016 
 
 
Document Fiscal Year Focus
2016 
 
 
Document Fiscal Period Focus
FY 
 
 
Amendment Flag
false 
 
 
Entity Common Stock, Shares Outstanding
 
42,930,200 
 
Entity Well-known Seasoned Issuer
Yes 
 
 
Entity Voluntary Filers
No 
 
 
Entity Current Reporting Status
Yes 
 
 
Entity Public Float
 
 
$ 1,466,028,352 
Condensed Consolidated Statements of Income (USD $)
In Millions, except Per Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Revenue
$ 798.6 
$ 788.8 
$ 760.1 
Operating expense:
 
 
 
Cost of revenue
344.3 
330.1 
318.6 
Sales and marketing
97.6 
96.6 
111.1 
General and administrative
105.2 
107.1 
108.9 
Depreciation and amortization
70.7 
64.4 
54.9 
Litigation Settlement
0 
0 
61.0 
Total operating expense
617.8 
598.2 
654.5 
Operating income
180.8 
190.6 
105.6 
Non-operating income:
 
 
 
Interest income, net
0.3 
1.3 
2.1 
Gain on sale of investments, reclassified from other comprehensive income
0.6 
0.6 
1.0 
Holding gain upon acquisition of additional ownership of equity-method investments
(37.1)
0 
(5.2)
Other income, net
6.1 
1.2 
0.1 
Non-operating income, net
44.1 
3.1 
8.4 
Income before income taxes and equity in net income (loss) of unconsolidated entities
224.9 
193.7 
114.0 
Income tax expense
63.7 
62.7 
35.7 
Equity in net income (loss) of unconsolidated entities
(0.2)
1.8 
0 
Consolidated net income
161.0 
132.8 
78.3 
Net income attributable to the noncontrolling interest
0 
(0.2)
0 
Net income attributable to Morningstar, Inc.
$ 161.0 
$ 132.6 
$ 78.3 
Net income per share attributable to Morningstar, Inc.:
 
 
 
Basic net income per share attributable to Morningstar, Inc. (in dollars per share)
$ 3.74 
$ 3.00 
$ 1.75 
Diluted net income per share attributable to Morningstar, Inc. (in dollars per share)
$ 3.72 
$ 3.00 
$ 1.74 
Dividends per common share:
 
 
 
Dividends declared per common share
$ 0.89 
$ 0.79 
$ 0.70 
Dividends paid per common share
$ 0.88 
$ 0.76 
$ 0.68 
Weighted average shares outstanding:
 
 
 
Basic (in shares)
43.0 
44.2 
44.7 
Diluted (in shares)
43.3 
44.3 
44.9 
Consolidated Consolidated Statements of Comprehensive Income (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Consolidated net income
$ 161.0 
$ 132.8 
$ 78.3 
Other comprehensive income (loss), net of tax:
 
 
 
Foreign currency translation adjustment
(27.8)
(28.2)
(29.8)
Unrealized gains (losses) on securities:
 
 
 
Unrealized holding gains (losses) arising during period
3.3 
(1.0)
0.4 
Reclassification of gains included in net income
(2.4)
(0.4)
(0.6)
Other comprehensive loss
(26.9)
(29.6)
(30.0)
Comprehensive income
134.1 
103.2 
48.3 
Comprehensive (income) loss attributable to noncontrolling interest
0 
(0.4)
0.1 
Comprehensive income attributable to Morningstar, Inc.
$ 134.1 
$ 102.8 
$ 48.4 
Condensed Consolidated Balance Sheets (USD $)
In Millions, unless otherwise specified
Dec. 31, 2016
Dec. 31, 2015
Current assets:
 
 
Cash and cash equivalents
$ 259.1 
$ 207.1 
Investments
44.9 
41.5 
Accounts receivable, less allowance of $2.1 and $1.8, respectively
145.8 
139.3 
Other
22.2 
22.0 
Total current assets
472.0 
409.9 
Property, equipment, and capitalized software, net
152.1 
134.5 
Investments in unconsolidated entities
40.3 
35.6 
Goodwill
556.8 
364.2 
Intangible assets, net
120.9 
74.2 
Other assets
8.8 
10.6 
Total assets
1,350.9 
1,029.0 
Current liabilities:
 
 
Accounts payable and accrued liabilities
44.6 
39.2 
Accrued compensation
71.7 
80.9 
Deferred revenue
165.4 
140.7 
Short-term debt
0 
35.0 
Other current liabilities
13.2 
8.6 
Total current liabilities
294.9 
304.4 
Accrued compensation
10.3 
8.9 
Deferred tax liability, net
38.2 
19.8 
Long-term debt
250.0 
0 
Deferred rent
24.8 
25.4 
Other long-term liabilities
35.9 
29.9 
Total liabilities
654.1 
388.4 
Morningstar, Inc. shareholders’ equity:
 
 
Common stock, no par value, 200,000,000 shares authorized, of which 42,932,994 and 43,403,076 shares were outstanding as of December 31, 2016 and December 31, 2015, respectively
0 
0 
Treasury stock at cost, 10,106,249 and 9,478,449 shares as of December 31, 2016 and December 31, 2015, respectively
(667.9)
(619.8)
Additional paid-in capital
584.0 
575.5 
Retained earnings
861.9 
739.2 
Accumulated other comprehensive loss:
 
 
Currency translation adjustment
(81.3)
(53.5)
Unrealized loss on available-for-sale investments
(0.2)
(1.1)
Total accumulated other comprehensive loss
(81.5)
(54.6)
Total Morningstar, Inc. shareholders’ equity
696.5 
640.3 
Noncontrolling interest
0.3 
0.3 
Total equity
696.8 
640.6 
Total liabilities and equity
$ 1,350.9 
$ 1,029.0 
Consolidated Balance Sheets (Parenthetical) (USD $)
In Millions, except Share data, unless otherwise specified
Dec. 31, 2016
Dec. 31, 2015
Statement of Financial Position [Abstract]
 
 
Allowance for doubtful accounts
$ 2.1 
$ 1.8 
Common stock, no par value
$ 0 
$ 0 
Common stock, shares authorized
200,000,000 
200,000,000 
Common stock, shares outstanding
42,932,994 
43,403,076 
Treasury stock, shares
10,106,249 
9,478,449 
Condensed Consolidated Statement of Equity (USD $)
In Millions, except Share data, unless otherwise specified
Total
Common Stock
Treasury Stock
Additional Paid-In Capital
Retained Earnings
Accumulated Other Comprehensive Income (Loss)
Non Controlling Interests
Balance at Dec. 31, 2013
$ 691.3 
 
$ (449.0)
$ 539.6 
$ 594.6 
$ 5.1 
$ 1.0 
Balance (in shares) at Dec. 31, 2013
 
44,967,423 
 
 
 
 
 
Increase (Decrease) in Stockholders' Equity
 
 
 
 
 
 
 
Net income
78.3 
 
 
 
78.3 
 
0 
Other Comprehensive Income (loss)
 
 
 
 
 
 
 
Unrealized gain on available-for-sale investments, net of income tax
0.4 
 
 
 
 
0.4 
 
Reclassification of adjustments for gains included in net income, net of income tax
(0.6)
 
 
 
 
(0.6)
 
Foreign currency translation adjustment, net
(29.8)
 
 
 
 
(29.7)
(0.1)
Other comprehensive loss
(30.0)
 
 
 
 
(29.9)
(0.1)
Issuance of common stock related to stock-option exercises and vesting of restricted stock units, net
0.8 
 
1.4 
(0.6)
 
 
 
Issuance of common stock related to stock-option exercises and vesting of restricted stock units, net (in shares)
 
452,344 
 
 
 
 
 
Adjustments to Additional Paid in Capital, Share-based Compensation, Requisite Service Period Recognition [Abstract]
 
 
 
 
 
 
 
Stock-based compensation — restricted stock units
16.3 
 
 
16.3 
 
 
 
Stock-based compensation — restricted stock
0.4 
 
 
0.4 
 
 
 
Stock-based compensation — performance share awards
0.5 
 
 
0.5 
 
 
 
Stock-based compensation — stock-options
0.4 
 
 
0.4 
 
 
 
Excess tax benefit derived from stock-option exercises and vesting of restricted stock units
4.4 
 
 
4.4 
 
 
 
Dividends declared — common shares outstanding
(31.2)
 
 
 
(31.2)
 
 
Dividends declared — restricted stock units
(0.1)
 
 
0.1 
(0.2)
 
 
Common share repurchased
(76.7)
 
(76.7)
 
 
 
 
Common share repurchased (in shares)
 
(1,074,004)
 
 
 
 
 
Balance at Dec. 31, 2014
654.4 
 
(524.3)
561.1 
641.5 
(24.8)
0.9 
Balance (in shares) at Dec. 31, 2014
 
44,345,763 
 
 
 
 
 
Increase (Decrease) in Stockholders' Equity
 
 
 
 
 
 
 
Net income
132.8 
 
 
 
132.6 
 
0.2 
Other Comprehensive Income (loss)
 
 
 
 
 
 
 
Unrealized gain on available-for-sale investments, net of income tax
(1.0)
 
 
 
 
(1.0)
 
Reclassification of adjustments for gains included in net income, net of income tax
(0.4)
 
 
 
 
(0.4)
 
Foreign currency translation adjustment, net
(28.2)
 
 
 
 
(28.4)
0.2 
Other comprehensive loss
(29.6)
 
 
 
 
(29.8)
0.2 
Issuance of common stock related to stock-option exercises and vesting of restricted stock units, net
(1.7)
 
1.5 
(3.2)
 
 
 
Issuance of common stock related to stock-option exercises and vesting of restricted stock units, net (in shares)
 
298,435 
 
 
 
 
 
Adjustments to Additional Paid in Capital, Share-based Compensation, Requisite Service Period Recognition [Abstract]
 
 
 
 
 
 
 
Stock-based compensation — restricted stock units
16.1 
 
 
16.1 
 
 
 
Stock-based compensation — restricted stock
0.1 
 
 
0.1 
 
 
 
Stock-based compensation — performance share awards
1.0 
 
 
1.0 
 
 
 
Stock-based compensation — stock-options
0.2 
 
 
0.2 
 
 
 
Excess tax benefit derived from stock-option exercises and vesting of restricted stock units
2.6 
 
 
2.6 
 
 
 
Dividends declared — common shares outstanding
(34.8)
 
 
 
(34.8)
 
 
Dividends declared — restricted stock units
(0.1)
 
 
0 
(0.1)
 
 
Purchase of remaining interest in majority-owned investment
(3.4)
 
 
(2.4)
 
 
(1.0)
Common share repurchased
(97.0)
 
(97.0)
 
 
 
 
Common share repurchased (in shares)
 
(1,241,122)
 
 
 
 
 
Balance at Dec. 31, 2015
640.6 
0 
(619.8)
575.5 
739.2 
(54.6)
0.3 
Balance (in shares) at Dec. 31, 2015
43,403,076 
43,403,076 
 
 
 
 
 
Increase (Decrease) in Stockholders' Equity
 
 
 
 
 
 
 
Net income
161.0 
 
 
 
161.0 
 
0 
Other Comprehensive Income (loss)
 
 
 
 
 
 
 
Unrealized gain on available-for-sale investments, net of income tax
3.3 
 
 
 
 
3.3 
 
Reclassification of adjustments for gains included in net income, net of income tax
(2.4)
 
 
 
 
(2.4)
 
Foreign currency translation adjustment, net
(27.8)
 
 
 
 
(27.8)
0 
Other comprehensive loss
(26.9)
 
 
 
 
(26.9)
0 
Issuance of common stock related to stock-option exercises and vesting of restricted stock units, net
(4.6)
 
1.4 
(6.0)
 
 
 
Issuance of common stock related to stock-option exercises and vesting of restricted stock units, net (in shares)
 
174,911 
 
 
 
 
 
Adjustments to Additional Paid in Capital, Share-based Compensation, Requisite Service Period Recognition [Abstract]
 
 
 
 
 
 
 
Stock-based compensation — restricted stock units
14.6 
 
 
14.6 
 
 
 
Stock-based compensation — performance share awards
(0.1)
 
 
(0.1)
 
 
 
Dividends declared — common shares outstanding
(38.3)
 
 
 
(38.3)
 
 
Common share repurchased
(49.5)
 
(49.5)
 
 
 
 
Common share repurchased (in shares)
 
(644,993)
 
 
 
 
 
Balance at Dec. 31, 2016
$ 696.8 
$ 0 
$ (667.9)
$ 584.0 
$ 861.9 
$ (81.5)
$ 0.3 
Balance (in shares) at Dec. 31, 2016
42,932,994 
42,932,994 
 
 
 
 
 
Condensed Consolidated Statement of Equity (Parenthetical) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Statement of Stockholders' Equity [Abstract]
 
 
 
Other Comprehensive Income (Loss), Unrealized Holding Gain (Loss) on Securities Arising During Period, Tax
$ 1.3 
$ 0.4 
$ 0.2 
Other Comprehensive Income (Loss), Reclassification Adjustment for Sale of Securities Included in Net Income, Tax
$ 1.8 
$ 0.1 
$ 0.4 
Condensed Consolidated Statements of Cash Flows (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Operating activities
 
 
 
Consolidated net income
$ 161.0 
$ 132.8 
$ 78.3 
Adjustments to reconcile consolidated net income to net cash flows from operating activities:
 
 
 
Depreciation and amortization
70.7 
64.4 
54.9 
Deferred income taxes
4.7 
2.9 
3.0 
Stock-based compensation expense
14.5 
17.4 
17.6 
Provision for bad debt
1.3 
0.5 
0.5 
Equity in net (income) loss of unconsolidated entities
0.2 
(1.8)
0 
Gain on sale of cost-method investment
0 
0 
(0.4)
Holding gain upon acquisition of additional ownership of equity-method investments
(37.1)
0 
(5.2)
Other, net
(6.8)
(1.1)
(0.7)
Changes in operating assets and liabilities, net of effects of acquisitions:
 
 
 
Accounts receivable
(0.1)
(6.9)
(25.9)
Other assets
1.1 
0.7 
(5.3)
Accounts payable and accrued liabilities
3.4 
4.7 
(2.0)
Accrued compensation
(8.8)
7.0 
19.5 
Income taxes—current
1.0 
10.1 
2.3 
Deferred revenue
6.7 
10.6 
(1.7)
Deferred rent
(2.9)
(0.3)
3.0 
Other liabilities
4.8 
0.5 
(1.3)
Cash provided by operating activities
213.7 
241.5 
136.6 
Investing activities
 
 
 
Purchases of investments
(32.0)
(34.7)
(20.4)
Proceeds from maturities and sales of investments
28.6 
30.0 
111.6 
Capital expenditures
(62.8)
(57.3)
(58.3)
Acquisitions, net of cash acquired
(191.6)
(11.1)
(64.4)
Purchases of equity- and cost-method investments
(16.5)
(6.2)
0 
Other, net
0.1 
(0.2)
0.3 
Cash used for investing activities
(274.2)
(79.5)
(31.2)
Financing activities
 
 
 
Common shares repurchased
(48.8)
(97.0)
(76.7)
Dividends paid
(37.9)
(33.7)
(30.5)
Proceeds from short-term debt
40.0 
50.0 
30.0 
Repayment of short-term debt
(15.0)
(45.0)
0 
Proceeds from long-term debt
190.0 
0 
0 
Proceeds from stock-option exercises
0.4 
3.9 
6.6 
Employee taxes withheld for restricted stock units
(5.0)
(5.6)
(5.8)
Other, net
0 
(0.1)
0.3 
Cash provided by (used for) financing activities
123.7 
(127.5)
(76.1)
Effect of exchange rate changes on cash and cash equivalents
(11.2)
(12.6)
(12.3)
Net increase in cash and cash equivalents
52.0 
21.9 
17.0 
Cash and cash equivalents—beginning of period
207.1 
185.2 
168.2 
Cash and cash equivalents—end of period
259.1 
207.1 
185.2 
Supplemental disclosure of cash flow information:
 
 
 
Cash paid for income taxes
58.0 
50.1 
30.4 
Cash paid for interest
1.2 
0.4 
0.3 
Supplemental information of non-cash investing and financing activities:
 
 
 
Unrealized gain (loss) on available-for-sale investments
1.2 
(2.0)
(0.4)
Software obtained under long-term financing arrangement
$ 9.0 
$ 5.3 
$ 0 
Description of Business
Description of Business
Description of Business
 
Morningstar, Inc. and its subsidiaries (Morningstar, we, our, the company), provides independent investment research for investors around the world. We offer an extensive line of products and services for financial advisors, asset managers, retirement plan providers and sponsors, and individual investors. We have operations in 27 countries.
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies

The acronyms that appear in these Notes to our Consolidated Financial Statements refer to the following:
ASC
Accounting Standards Codification
ASU
Accounting Standards Update
EITF
Emerging Issues Task Force
FASB
Financial Accounting Standards Board
SEC
Securities and Exchange Commission


Principles of Consolidation. We conduct our business operations through wholly owned or majority-owned operating subsidiaries. The accompanying consolidated financial statements include the accounts of Morningstar, Inc. and our subsidiaries. We consolidate assets, liabilities, and results of operations of subsidiaries in which we have a controlling interest and eliminate all significant intercompany accounts and transactions.

We account and report the noncontrolling (minority) interest in our Consolidated Financial Statements in accordance with FASB ASC 810, Consolidation. A noncontrolling interest is the portion of equity (net assets) in a subsidiary not attributable, directly or indirectly, to the parent company. We report the noncontrolling interest in our Consolidated Balance Sheet within equity separate from the shareholders' equity attributable to Morningstar, Inc. In addition, we present the net income (loss) and comprehensive income (loss) attributable to Morningstar, Inc.'s shareholders and the noncontrolling interest in our Consolidated Statements of Income, Consolidated Statements of Comprehensive Income, and Consolidated Statements of Equity.

We account for investments in entities in which we exercise significant influence, but do not control, using the equity method.

As part of our investment management operations, we manage certain funds outside of the United States that are considered variable interest entities. For the majority of these variable interest entities, we do not have a variable interest in them. In cases where we do have a variable interest, we are not the primary beneficiary. Accordingly, we do not consolidate any of these variable interest entities.

Use of Estimates. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses during the reporting period. Actual results may differ from these estimates.

Reclassifications. Certain amounts reported in prior years have been reclassified to conform to the current year presentation.

Cash and Cash Equivalents. Cash and cash equivalents consists of cash and investments with original maturities of three months or less. We state them at cost, which approximates fair value. We state the portion of our cash equivalents that are invested in money market funds at fair value, as these funds are actively traded and have quoted market prices.

Investments. We account for our investments in accordance with FASB ASC 320, Investments—Debt and Equity Securities. We classify our investments into three categories: held-to-maturity, trading, and available-for-sale.

•
Held-to-maturity: We classify certain investments, primarily certificates of deposit, as held-to-maturity securities, based on our intent and ability to hold these securities to maturity. We record held-to-maturity investments at amortized cost in our Consolidated Balance Sheets.

•
Trading: We classify certain other investments, primarily equity securities, as trading securities as these relate mainly to investments tracking the strategies of our newsletter portfolios. We include realized and unrealized gains and losses associated with these investments as a component of our operating income in our Consolidated Statements of Income. We record these securities at their fair value in our Consolidated Balance Sheets.

•
Available-for-sale: Investments not considered held-to-maturity or trading securities are classified as available-for-sale securities. Available-for-sale securities primarily consist of equity securities, exchange-traded funds, and mutual funds. We report unrealized gains and losses for available-for-sale securities as other comprehensive income (loss), net of related income taxes. We record these securities at their fair value in our Consolidated Balance Sheets.

Fair Value Measurements. We follow FASB ASC 820, Fair Value Measurements. FASB ASC 820 defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. Under FASB ASC 820, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. The standard applies whenever other standards require (or permit) assets or liabilities to be measured at fair value. The standard does not expand the use of fair value in any new circumstances and does not require any new fair value measurements.

FASB ASC 820 uses a fair value hierarchy based on three broad levels of valuation inputs:

•
Level 1: Valuations based on quoted prices in active markets for identical assets or liabilities that the company has 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.

We provide additional information about our cash equivalents and investments that are subject to valuation under FASB ASC 820 in Note 6.

Concentration of Credit Risk. No single customer is large enough to pose a significant credit risk to our operations or financial condition. For the years ended December 31, 2016, 2015, and 2014, no single customer represented 5% or more of our consolidated revenue. If receivables from our customers become delinquent, we begin a collections process. We maintain an allowance for doubtful accounts based on our estimate of the probable losses of accounts receivable.

Property, Equipment, and Depreciation. We state property and equipment at historical cost, net of accumulated depreciation. We depreciate property and equipment primarily using the straight-line method based on the useful life of the asset, which generally is three years. We amortize leasehold improvements over the lease term or their useful lives, whichever is shorter.

Computer Software and Internal Product Development Costs. We capitalize certain costs in accordance with FASB ASC 350-40, Internal-Use Software, FASB ASC 350-50, Website Development Costs, and FASB ASC 985, Software. Internal product development costs mainly consist of employee costs for developing new web-based products and certain major enhancements of existing products. We amortize these costs on a straight-line basis over the estimated economic life, which is generally three to five years. We include capitalized software development costs related to projects that have not been placed into service in our construction in progress balance.

The table below summarizes our depreciation expense related to internally developed software for the past three years:
(in millions)
 
2016

 
2015

 
2014

Internally developed software depreciation expense
 
$
20.0

 
$
13.0

 
$
5.9



The table below summarizes our capitalized software development costs for the past three years:
(in millions)
 
2016

 
2015

 
2014

Capitalized software development costs
 
$
28.2

 
$
21.8

 
$
18.8



Business Combinations. When we make acquisitions, we allocate the purchase price to the assets acquired, liabilities assumed, and goodwill. We follow FASB ASC 805, Business Combinations. We recognize and measure the fair value of the acquired operation as a whole, as well as the assets acquired and liabilities assumed, at their full fair values as of the date we obtain control, regardless of the percentage ownership in the acquired operation or how the acquisition was achieved. We expense direct costs related to the business combination, such as advisory, accounting, legal, valuation, and other professional fees, as incurred. We recognize restructuring costs, including severance and relocation for employees of the acquired entity, as post-combination expenses unless the target entity meets the criteria of FASB ASC 420, Exit or Disposal Cost Obligations, on the acquisition date.

As part of the purchase price allocation, we follow the requirements of FASB ASC 740, Income Taxes. This includes establishing deferred tax assets or liabilities reflecting the difference between the values assigned for financial statement purposes and income tax purposes. In certain acquisitions, the goodwill resulting from the purchase price allocation may not be deductible for income tax purposes. FASB ASC 740 prohibits recognition of a deferred tax asset or liability for temporary differences in goodwill if goodwill is not amortizable and deductible for tax purposes.

Goodwill. Changes in the carrying amount of our recorded goodwill are mainly the result of business acquisitions, divestitures, and the effect of foreign currency translations. In accordance with FASB ASC 350, Intangibles—Goodwill and Other, we do not amortize goodwill; instead, goodwill is subject to an impairment test annually, or whenever indicators of impairment exist. An impairment would occur if the carrying amount of a reporting unit exceeded the fair value of that reporting unit. We performed annual impairment reviews in the fourth quarter of 2016, 2015, and 2014. We did not record any impairment losses in 2016, 2015, or 2014.

Intangible Assets. We amortize intangible assets using the straight-line method over their estimated useful lives, which range from one to 25 years. We have no intangible assets with indefinite useful lives. In accordance with FASB ASC 360-10-35, Subsequent Measurement—Impairment or Disposal of Long-Lived Assets, we review intangible assets for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. If the value of future undiscounted cash flows is less than the carrying amount of an asset group, we record an impairment loss based on the excess of the carrying amount over the fair value of the asset group. We did not record any impairment losses in 2016, 2015, or 2014.

Revenue Recognition. We recognize revenue in accordance with SEC SAB Topic 13, Revenue Recognition, ASC 605-25, Revenue Recognition: Multiple Element Arrangements, and ASC 985-605, Software: Revenue Recognition.

We recognize revenue when all of the following conditions are met:

•
There is persuasive evidence of an arrangement, as evidenced by a signed contract;
•
Delivery of our products and services has taken place. If arrangements include an acceptance provision, we generally begin recognizing revenue when we receive customer acceptance;
•
The amount of fees to be paid by the customer is fixed or determinable; and
•
The collectibility of the fees is reasonably assured.

We generate revenue through sales of Morningstar Data, Morningstar Advisor Workstation (including Morningstar Office), Morningstar Direct, Morningstar Research, Premium Membership subscriptions for Morningstar.com, our structured credit ratings offerings, and a variety of other investment-related products and services. We generally structure the revenue agreements for these offerings as licenses or subscriptions. We recognize revenue from licenses and subscription sales ratably as we deliver the product or service and over the service obligation period defined by the terms of the customer contract. For new-issue ratings and analysis for commercial mortgage-backed securities (CMBS), we charge asset-based fees that are paid by the issuer on the rated balance of the transaction and recognize the revenue immediately upon issuance.

We also generate revenue from Internet advertising, primarily from “impression-based” contracts. For advertisers who use our cost-per-impression pricing, we charge fees each time we display their ads on our site.

Our Investment Management business includes a broad range of services. Pricing for consulting services is based on the scope of work and the level of service provided, and includes asset-based fees for work we perform that involves investment management or acting as a subadvisor to investment portfolios. In arrangements that involve asset-based fees, we generally invoice clients quarterly in arrears based on average assets for the quarter. We recognize asset-based fees once the fees are fixed and determinable assuming all other revenue recognition criteria are met.

Our Workplace Solutions offerings help retirement plan participants plan and invest for retirement. We offer these services both through retirement plan providers (typically third-party asset management companies that provide administrative and record-keeping services) and directly to plan sponsors (employers that offer retirement plans to their employees). For our Workplace Solutions offerings, we provide both a hosted solution as well as proprietary installed software advice solution. Clients can integrate the installed customized software into their existing systems to help investors accumulate wealth, transition into retirement, and manage income during retirement.

The revenue arrangements for Workplace Solutions generally extend over multiple years. Our contracts may include one-time setup fees, implementation fees, technology licensing and maintenance fees, asset-based fees for managed retirement accounts, fixed and variable fees for advice and guidance, or a combination of these fee structures. Upon customer acceptance, we recognize revenue ratably over the term of the agreement. We recognize asset-based fees and variable fees in excess of any minimum once the value is fixed and determinable.

Some of our revenue arrangements combine multiple products and services. These products and services may be provided at different points in time or over different time periods within the same arrangement. We allocate fees to the separate deliverables based on the deliverables’ relative selling price, which is generally based on the price we charge when the same deliverable is sold separately.

We record taxes imposed on revenue-producing transactions (such as sales, use, value-added, and some excise taxes) on a net basis; therefore, we exclude such taxes from revenue in our Consolidated Statements of Income.

Deferred revenue represents the portion of licenses or subscriptions billed or collected in advance of the service being provided which we expect to recognize as revenue in future periods. Certain arrangements may have cancellation or refund provisions. If we make a refund, it typically reflects the amount collected from a customer for which we have not yet provided services. The refund therefore results in a reduction of deferred revenue.

Sales Commissions. Through December 31, 2013, we paid sales commissions based on a formula driven by the total contract value of sales opportunities closed, with any subsequent adjustments (such as clawbacks for contract cancellations) reflected in future commission payouts. We considered the corresponding commission expense an incremental direct acquisition cost and treated it as a deferred charge, which we expensed over the term of the underlying sales contracts.

In the first quarter of 2014, we modified our sales incentive plan. The revised plan is based on a combination of net new sales and specific business objectives not solely tied to revenue growth. Because of this new structure and the discretion involved in determining the related incentives, we started expensing sales commissions as incurred instead of amortizing them over the contract terms.
However, we continued to amortize the deferred charge capitalized in connection with sales commissions paid in 2013 and previous periods as part of the previous incentive plan. This amortization added $0.6 million, $3.5 million, and $9.8 million of sales commission cost in 2016, 2015, and 2014, respectively.
Advertising Costs. Advertising costs include expenses incurred for various print and Internet ads, search engine fees, and direct mail campaigns. We expense advertising costs as incurred. The table below summarizes our advertising expense for the past three years:
(in millions)
 
2016

 
2015

 
2014

Advertising expense
 
$
7.6

 
$
8.3

 
$
7.5



Stock-Based Compensation Expense. We account for our stock-based compensation expense in accordance with FASB ASC 718, Compensation—Stock Compensation. Our stock-based compensation expense reflects grants of restricted stock units, restricted stock, performance share awards, and stock options. We measure the fair value of our restricted stock units, restricted stock, and performance share awards on the date of grant based on the closing market price of Morningstar's common stock on the day prior to grant. For stock options, we estimate the fair value of our stock options on the date of grant using a Black-Scholes option-pricing model. We amortize the fair values to stock-based compensation expense, net of estimated forfeitures, ratably over the vesting period.

We estimate expected forfeitures of all employee stock-based awards and recognize compensation cost only for those awards expected to vest. We determine forfeiture rates based on historical experience and adjust the estimated forfeitures to actual forfeiture experience as needed.

Liability for Sabbatical Leave. In some of our operations, we offer employees a sabbatical leave. Although the sabbatical policy varies by region, Morningstar's full-time employees are generally eligible for six weeks of paid time off after four years of continuous service. We account for our sabbatical liability in accordance with FASB ASC 710-10-25, Compensated Absences. We record a liability for employees' sabbatical benefits over the period employees earn the right for sabbatical leave and include this liability in Accrued Compensation in our Consolidated Balance Sheet.

Income Taxes. We record deferred income taxes for the temporary differences between the carrying amount of assets and liabilities for financial statement purposes and tax purposes in accordance with FASB ASC 740, Income Taxes. FASB ASC 740 prescribes the minimum recognition threshold a tax position is required to meet before being recognized in the financial statements. It also provides guidance on derecognition, measurement, classification, interest and penalties, accounting in interim periods, and disclosure for uncertain tax positions.

We recognize interest and penalties related to unrecognized tax benefits as part of income tax expense in our Consolidated Statements of Income. We classify liabilities related to unrecognized tax benefits as either current or long-term liabilities in our Consolidated Balance Sheet, depending on when we expect to make payment.


Credit Arrangements
Credit Arrangements
Credit Arrangements

In November 2016, we amended and restated our credit agreement, which now provides us with a three-year credit facility with a borrowing capacity of up to $300.0 million. The credit agreement also provides for issuance of up to $25.0 million of letters of credit under the revolving credit facility.

The interest rate applicable to any loan under the credit agreement is, at our option, either: (i) the applicable London interbank offered rate (LIBOR) plus an applicable margin for such loans, which ranges between 1.00% and 1.75%, based on our consolidated leverage ratio or (ii) the lender's base rate plus the applicable margin for such loans, which ranges between 2.00% and 2.75%, based on our consolidated leverage ratio.

The credit agreement also contains financial covenants under which we: (i) may not exceed a maximum consolidated leverage ratio of 3.00 to 1.00 and (ii) are required to maintain a minimum consolidated interest coverage ratio of not less than 3.00 to 1.00. We were in compliance with the financial covenants as of December 31, 2016.

We had an outstanding principal balance of $250.0 million at a one-month LIBOR interest rate plus 100 basis points as of December 31, 2016, leaving borrowing availability of $50.0 million.
Income Per Share
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 income per share:

(in millions, except per share amounts)
 
2016

 
2015

 
2014

 
 
 
 
 
 
 
Basic net income per share attributable to Morningstar, Inc.:
 
 
 
 
 
 
Net income attributable to Morningstar, Inc.
 
$
161.0

 
$
132.6

 
$
78.3

 
 
 
 
 
 
 
Weighted average common shares outstanding
 
43.0

 
44.2

 
44.7

 
 
 
 
 
 
 
Basic net income per share attributable to Morningstar, Inc.
 
$
3.74

 
$
3.00

 
$
1.75

 
 
 
 
 
 
 
Diluted net income per share attributable to Morningstar, Inc.:
 
 
 
 
 
 
Net income attributable to Morningstar, Inc.
 
$
161.0

 
$
132.6

 
$
78.3

 
 


 


 
 
Weighted average common shares outstanding
 
43.0

 
44.2

 
44.7

Net effect of dilutive stock options and restricted stock units
 
0.3

 
0.1

 
0.2

Weighted average common shares outstanding for computing diluted income per share
 
43.3

 
44.3

 
44.9

 
 


 


 
 
Diluted net income per share attributable to Morningstar, Inc.
 
$
3.72

 
$
3.00

 
$
1.74

 
 
 
 
 
 
 

The following table shows the number of weighted average restricted stock units and performance share awards excluded from our calculation of diluted earnings per share because their inclusion would have been anti-dilutive:
(in thousands)
 
2016

 
2015

 
2014

Weighted average restricted stock units
 
13

 
38

 
47

Weighted average performance share awards
 
—

 
4

 
6

Total
 
13

 
42

 
53




Segment and Geographical Area Information
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 a single reportable segment, all required financial segment information can be found directly in the Consolidated Financial Statements.

The accounting policies for our reportable segment are the same as those described in Note 2. 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
 
 
 
 
 
 
 
 
Year ended December 31
(in millions)
 
2016

 
2015

 
2014

United States
 
$
590.5

 
$
585.1

 
$
550.8

 
 
 
 
 
 
 
United Kingdom
 
61.1

 
64.2

 
61.8

Continental Europe
 
62.6

 
58.8

 
62.7

Australia
 
32.2

 
30.5

 
35.0

Canada
 
28.2

 
27.9

 
30.8

Asia
 
20.0

 
18.5

 
15.8

Other
 
4.0

 
3.8

 
3.2

Total International
 
208.1

 
203.7

 
209.3

 
 
 
 
 
 
 
Consolidated revenue
 
$
798.6

 
$
788.8

 
$
760.1


Long-lived assets by geographical area
 
 
 
 
 
 
As of December 31
(in millions)
 
2016

 
2015

United States
 
$
139.1

 
$
116.9

 
 
 
 
 
United Kingdom
 
6.6

 
8.6

Continental Europe
 
1.9

 
2.2

Australia
 
0.6

 
0.9

Canada
 
0.4

 
0.7

Asia
 
3.4

 
5.2

Other
 
0.1

 
—

Total International
 
13.0

 
17.6

 
 
 
 
 
Consolidated property, equipment, and capitalized software, net
 
$
152.1

 
$
134.5

Investments and Fair Value Measurements
Investments and Fair Value Measurements
Investments and Fair Value Measurements
 
We classify our investments into three categories: available-for-sale, held-to-maturity, and trading. 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 December 31
 
 
(in millions)
 
2016

 
2015

Available-for-sale
 
$
27.7

 
$
17.3

Held-to-maturity
 
15.7

 
15.3

Trading securities
 
1.5

 
8.9

Total
 
$
44.9

 
$
41.5


 
The following table shows the cost, unrealized gains (losses), and fair values related to investments classified as available-for-sale and held-to-maturity:
 
 
 
As of December 31, 2016
 
As of December 31, 2015
(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
 
$
25.6

 
$
1.3

 
$
(1.5
)
 
$
25.4

 
$
17.4

 
$
0.3

 
$
(1.6
)
 
$
16.1

Mutual funds
 
2.2

 
0.1

 
—

 
2.3

 
1.3

 
—

 
(0.1
)
 
1.2

Total
 
$
27.8

 
$
1.4

 
$
(1.5
)
 
$
27.7

 
$
18.7

 
$
0.3

 
$
(1.7
)
 
$
17.3

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Held-to-maturity:
 
 
 
 
 
 
 
 
 
 

 
 

 
 

 
 

Certificates of deposit
 
$
13.8

 
$
—

 
$
—

 
$
13.8

 
$
15.3

 
$
—

 
$
—

 
$
15.3

Convertible note
 
1.9

 
—

 
—

 
1.9

 
—

 
—

 
—

 
—

Total
 
$
15.7

 
$
—

 
$
—

 
$
15.7

 
$
15.3

 
$
—

 
$
—

 
$
15.3


 
As of December 31, 2016 and December 31, 2015, investments with unrealized losses for greater than a 12-month period were not material to the 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 December 31, 2016 and December 31, 2015.

 
 
As of December 31, 2016
 
As of December 31, 2015
(in millions)
 
Cost

 
Fair Value

 
Cost

 
Fair Value

Available-for-sale:
 
 

 
 

 
 

 
 

Equity securities, exchange-traded funds, and mutual funds
 
$
27.8

 
$
27.7

 
$
18.7

 
$
17.3

Total
 
$
27.8

 
$
27.7

 
$
18.7

 
$
17.3

 
 
 
 
 
 
 
 
 
Held-to-maturity:
 
 

 
 

 
 

 
 

Due in one year or less
 
$
13.8

 
$
13.8

 
$
15.3

 
$
15.3

Due in one to three years
 
1.9

 
1.9

 
—

 
—

Total
 
$
15.7

 
$
15.7

 
$
15.3

 
$
15.3



The following table shows the realized gains and losses arising from sales of our investments classified as available-for-sale recorded in our Consolidated Statements of Income: 
(in millions)
 
2016

 
2015

 
2014

Realized gains
 
$
1.6

 
$
1.3

 
$
1.5

Realized losses
 
(1.0
)
 
(0.7
)
 
(0.5
)
Realized gains, net
 
$
0.6

 
$
0.6

 
$
1.0


 
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 Consolidated Statements of Income:
 
(in millions)
 
2016

 
2015

 
2014

Unrealized losses, net
 
$
—

 
$
(0.8
)
 
$
(0.2
)


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 a fair value hierarchy:
 
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.

 
 
Fair Value
 
Fair Value Measurements as of December 31, 2016
 
 
as of
 
Using Fair Value Hierarchy
(in millions)
 
December 31, 2016
 
Level 1

 
Level 2

 
Level 3

Available-for-sale investments
 
 

 
 

 
 

 
 

Equity securities and exchange-traded funds
 
$
25.4

 
$
25.4

 
$
—

 
$
—

Mutual funds
 
2.3

 
2.3

 
—

 
—

Trading securities
 
1.5

 
1.5

 
—

 
—

Cash equivalents
 
0.2

 
0.2

 
—

 
—

Total
 
$
29.4

 
$
29.4

 
$
—

 
$
—

 
 
 
Fair Value
 
Fair Value Measurements as of December 31, 2015
 
 
as of
 
Using Fair Value Hierarchy
(in millions)
 
December 31, 2015
 
Level 1

 
Level 2

 
Level 3

Available-for-sale investments
 
 

 
 

 
 

 
 

Equity securities and exchange-traded funds
 
$
16.1

 
$
16.1

 
$
—

 
$
—

Mutual funds
 
1.2

 
1.2

 
—

 
—

Trading securities
 
8.9

 
8.9

 
—

 
—

Cash equivalents
 
0.2

 
0.2

 
—

 
—

Total
 
$
26.4

 
$
26.4

 
$
—

 
$
—


 
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 December 31, 2016 and December 31, 2015.
Acquisitions, Goodwill, and Other Intangible Assets
Acquisitions, Goodwill, and Other Intangible Assets
Acquisitions, Goodwill, and Other Intangible Assets
 
2016 Acquisitions

Increased Ownership Interest in PitchBook Data, Inc. (PitchBook)

In December 2016, we acquired an additional 78% interest in PitchBook Data, Inc. (PitchBook), increasing our ownership to 100% from 22%. PitchBook delivers data, research, and technology covering the private capital markets, including venture capital, private equity, and mergers and acquisitions. We began consolidating the financial results of this acquisition in our Consolidated Financial Statements on December 1, 2016. PitchBook contributed $4.1 million of revenue and $7.5 million of operating expense during the one-month period that PitchBook was included in our consolidated results for 2016.

PitchBook's total preliminary estimated fair value of $235.1 million includes $188.2 million in cash paid to acquire the remaining 78% interest in PitchBook as well as a $46.9 million fair value related to our previous 22% ownership interest. The book value of this ownership immediately prior to the acquisition date was $9.8 million, and we recorded a preliminary non-cash holding gain of $37.1 million for the difference between the fair value and the book value of our previously held investment. We used the income approach and a discounted cash flow analysis of PitchBook’s projected revenue, operating expense, and other amounts to arrive at the estimated fair value. The gain is classified as "Holding gain upon acquisition of additional ownership of equity-method investments" in our Consolidated Statement of Income for the year ended December 31, 2016.

The transaction has been accounted for using the acquisition method of accounting, which requires that assets acquired and liabilities assumed be recognized at their fair values as of the acquisition date. The values assigned to the assets acquired and liabilities assumed are based on preliminary estimates of fair value available as of the date of this Annual Report on Form 10-K, and may be adjusted during the measurement period of up to 12 months from the date of acquisition as further information becomes available. Any changes in the fair values of the assets acquired and liabilities assumed during the measurement period may result in adjustments to goodwill. As of December 31, 2016, the primary areas that are not yet finalized due to information that may become available subsequently and may result in changes in the values assigned to various assets and liabilities, include the fair values of acquired intangible assets and related deferred tax liabilities, assumed deferred revenue, as well as assumed tax assets and liabilities.



The following table summarizes our preliminary allocation of the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition, all of which are preliminary pending completion of the final valuation:
 
 
(in millions)

Cash and cash equivalents
 
$
12.4

Accounts receivable
 
10.8

Other current and non-current assets
 
3.5

Intangible assets
 
60.7

Goodwill
 
193.6

Deferred revenue
 
(22.4
)
Deferred tax liability, net
 
(12.8
)
Other current and non-current liabilities
 
(10.7
)
Total fair value of PitchBook
 
$
235.1



Accounts receivable acquired were recorded at gross contractual amounts receivable, which approximates fair value. We expect to collect substantially all of the gross contractual amounts receivable within a reasonable period of time after the acquisition date.

The preliminary allocation includes $60.7 million of acquired intangible assets, as follows:
 
 
(in millions)

 
Weighted Average Useful Life (years)
Customer-related assets
 
$
17.1

 
10
Technology-based assets
 
40.8

 
5
Intellectual property (trademarks and trade names)
 
2.8

 
4
Total intangible assets
 
$
60.7

 
6


We recognized a preliminary net deferred tax liability of $12.8 million mainly because the amortization expense related to certain intangible assets is not deductible for income tax purposes.

Preliminary goodwill of $193.6 million represents the excess over the fair value of the net tangible and intangible assets acquired with this acquisition. We paid this premium for a number of reasons, including the opportunity to offer comprehensive data coverage across the full life cycle of private market transactions. The preliminary goodwill is not deductible for income tax purposes.

Unaudited Pro Forma Information for PitchBook Acquisition

The following unaudited pro forma information presents a summary of our Consolidated Statements of Income for the years ended December 31, 2016 and 2015 as if we had completed the PitchBook acquisition as of January 1, 2015.

This unaudited pro forma information is presented for illustrative purposes and is not intended to represent or be indicative of the actual results of operations of the combined company that would have been achieved had the acquisition occurred at the beginning of the earliest period presented, nor is it intended to represent or be indicative of future results of operations.

In calculating the pro forma information below, we included an estimate of amortization expense related to the intangible assets acquired, stock-based compensation expense related to the PitchBook bonus plan (see Note 11 for additional information), and interest expense incurred on the long-term debt. The 2016 pro forma net income excludes the $37.1 million non-cash holding gain generated in connection with the transaction.
Unaudited Pro Forma Financial Information (in millions)
 
2016

 
2015

Revenue
 
$
834.1

 
$
813.3

Operating income
 
$
157.7

 
$
170.0

Net income
 
$
105.5

 
$
117.1

 
 
 
 
 
Basic net income per share attributable to Morningstar, Inc.
 
$
2.45

 
$
2.65

Diluted net income per share attributable to Morningstar, Inc.
 
$
2.44

 
$
2.65



RequiSight, LLC (RightPond)

On March 31, 2016, we acquired RequiSight, LLC, which does business as RightPond, a provider of business intelligence data and analytics on defined contribution and defined benefit plans for financial services firms. We began consolidating the financial results of RightPond in our Consolidated Financial Statements on March 31, 2016.

InvestSoft Technology, Inc. (InvestSoft)

On May 31, 2016, we acquired InvestSoft Technology, Inc. (InvestSoft), a provider of fixed-income analytics. We began consolidating the financial results of InvestSoft in our Consolidated Financial Statements on May 31, 2016.

2015 Acquisitions

Increased Ownership Interest in Ibbotson Associates Japan K.K. (IAJ)

In July 2015, we acquired an additional 28.9% interest in Ibbotson Associates Japan K.K. (IAJ), increasing our ownership to 100% from 71.1%. Because we previously owned more than 50% of the company, IAJ's financial results were consolidated in our Consolidated Financial Statements prior to acquiring the remaining interest.

Total Rebalance Expert (tRx)

In November 2015, we acquired Total Rebalance Expert (tRx), an automated, tax-efficient investment portfolio rebalancing platform for financial advisors. tRx streamlines the rebalancing process for advisors and automates the complexities involved in rebalancing and managing portfolios. We began consolidating the financial results of tRx in our Consolidated Financial Statements on November 2, 2015.

2014 Acquisitions

Increased Ownership Interest in HelloWallet Holdings, Inc.

In June 2014, we acquired an additional 81.3% interest in HelloWallet Holdings, Inc. (HelloWallet), increasing our ownership to 100% from 18.7%. HelloWallet combines behavioral economics and the psychology of decision-making with sophisticated technology to provide personalized, unbiased financial guidance to U.S. workers and their families through their employer benefit plans. We began consolidating the financial results of this acquisition in our Consolidated Financial Statements on June 3, 2014.

HelloWallet's total estimated fair value of $54.0 million includes $40.5 million in cash paid to acquire the remaining 81.3% interest in HelloWallet and pay off HelloWallet's indebtedness as well as $13.5 million related to the 18.7% of HelloWallet we previously held. We recorded a non-cash holding gain of $5.2 million for the difference between the fair value and the book value of our previously held investment. The gain is classified as "Holding gain upon acquisition of additional ownership of equity-method investments" in our Consolidated Statement of Income for the year ended December 31, 2014.

The following table summarizes our allocation of the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition:
 
 
(in millions)

Cash and cash equivalents
 
$
3.7

Accounts receivable and other current assets
 
0.2

Other current and non-current assets
 
0.3

Deferred tax asset
 
8.6

Intangible assets
 
9.5

Goodwill
 
39.2

Deferred revenue
 
(2.9
)
Deferred tax liability
 
(3.6
)
Other current and non-current liabilities
 
(1.0
)
Total fair value of HelloWallet
 
$
54.0



The allocation includes $9.5 million of acquired intangible assets, as follows:
 
 
(in millions)

 
Weighted Average Useful Life (years)
Technology-based assets
 
$
6.7

 
5
Intellectual property (trademarks and trade names)
 
0.2

 
3
Non-competition agreement
 
2.6

 
5
Total intangible assets
 
$
9.5

 
5


We recognized a deferred tax liability of $3.6 million mainly because the amortization expense related to certain intangible assets is not deductible for income tax purposes.

We recognized a deferred tax asset of $8.6 million mainly because of net operating losses of HelloWallet which will become available to Morningstar.

Goodwill of $39.2 million represents the premium over the fair value of the net tangible and intangible assets acquired. We paid this premium for a number of reasons, including the opportunity to bring together HelloWallet's comprehensive financial wellness expertise with Morningstar's independent, research-based retirement advice to create a holistic retirement savings and advice offering.

ByAllAccounts, Inc.

In April 2014, we acquired ByAllAccounts, Inc. (ByAllAccounts), a provider of innovative data aggregation technology for financial applications for $27.9 million in cash. ByAllAccounts uses a knowledge-based process, including patented artificial intelligence technology, to collect, consolidate, and enrich financial account data and deliver it to virtually any platform. We began including the financial results of this acquisition in our Consolidated Financial Statements on April 1, 2014.

The following table summarizes our allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed at the date of the acquisition:
 
 
(in millions)

Cash and cash equivalents
 
$
0.3

Accounts receivable and other current assets
 
0.1

Deferred tax asset
 
4.0

Other current and non-current assets
 
0.3

Intangible assets
 
8.7

Goodwill
 
18.5

Deferred revenue
 
(0.1
)
Deferred tax liability
 
(3.3
)
Other current and non-current liabilities
 
(0.6
)
Total purchase price
 
$
27.9



The allocation includes $8.7 million of acquired intangible assets, as follows:

 
 
(in millions)

 
Weighted Average Useful Life (years)
Customer-related assets
 
$
5.5

 
24
Technology-based assets
 
3.0

 
4.5
Intellectual property (trademarks and trade names)
 
0.1

 
1
Non-competition agreement
 
0.1

 
3
Total intangible assets
 
$
8.7

 
19


We recognized a deferred tax liability of $3.3 million mainly because the amortization expense related to certain intangible assets is not deductible for income tax purposes.

We recognized a deferred tax asset of $4.0 million mainly because of net operating losses of ByAllAccounts which will become available to Morningstar.

Goodwill of $18.5 million represents the premium we paid over the fair value of the acquired net tangible and intangible assets. We paid this premium for a number of reasons, including the opportunity to integrate the service into our offerings as well as expand and develop ByAllAccounts' third-party distribution relationships.

Goodwill
 
The following table shows the changes in our goodwill balances from January 1, 2015 to December 31, 2016:
 
 
 
(in millions)

Balance as of January 1, 2015
 
$
370.1

Other, primarily foreign currency translation
 
(5.9
)
Balance as of December 31, 2015
 
$
364.2

Acquisition of PitchBook
 
193.6

Other acquisitions and foreign currency translation
 
(1.0
)
Balance as of December 31, 2016
 
$
556.8



We did not record any impairment losses in 2016, 2015, or 2014, as the estimated fair values of our reporting unit exceeded its carrying value. We perform our annual impairment testing during the fourth quarter of each year.

Intangible Assets

The following table summarizes our intangible assets: 
 
 
As of December 31, 2016
 
As of December 31, 2015
(in millions)
 
Gross

 
Accumulated
Amortization

 
Net

 
Weighted
Average
Useful  Life
(years)
 
Gross

 
Accumulated
Amortization

 
Net

 
Weighted
Average
Useful  Life
(years)
Intellectual property
 
$
30.9

 
$
(27.4
)
 
$
3.5

 
9
 
$
28.3

 
$
(26.7
)
 
$
1.6

 
9
Customer-related assets
 
152.0

 
(97.7
)
 
54.3

 
12
 
137.5

 
(92.3
)
 
45.2

 
12
Supplier relationships
 
0.2

 
(0.1
)
 
0.1

 
20
 
0.2

 
(0.1
)
 
0.1

 
20
Technology-based assets
 
133.2

 
(72.1
)
 
61.1

 
7
 
89.5

 
(64.4
)
 
25.1

 
8
Non-competition agreements
 
5.0

 
(3.1
)
 
1.9

 
5
 
4.6

 
(2.4
)
 
2.2

 
5
Total intangible assets
 
$
321.3

 
$
(200.4
)
 
$
120.9

 
10
 
$
260.1

 
$
(185.9
)
 
$
74.2

 
10

 
The following table summarizes our amortization expense related to intangible assets:
(in millions)
 
2016

 
2015

 
2014

Amortization expense
 
$
19.4

 
$
22.0

 
$
22.3


 
We did not record any impairment losses involving intangible assets in 2016, 2015, or 2014.

We amortize intangible assets using the straight-line method over their expected economic useful lives.

Based on acquisitions and divestitures completed through December 31, 2016, we expect intangible amortization expense for 2017 and subsequent years to be as follows:
 
 
(in millions)

2017
 
$
24.4

2018
 
22.3

2019
 
19.8

2020
 
16.1

2021
 
12.8

Thereafter
 
25.5


 
Our estimates of future amortization expense for intangible assets may be affected by additional acquisitions, divestitures, changes in the estimated average useful life, and foreign currency translation.
Investments in Unconsolidated Entities
Investments in Unconsolidated Entities
Investments in Unconsolidated Entities
 
Our investments in unconsolidated entities consist primarily of the following:
 
 
 
As of December 31
 
 
(in millions)
 
2016

 
2015

Investment in MJKK
 
$
25.1

 
$
24.3

Other-equity method investments
 
13.5

 
3.7

Investments accounted for using the cost method
 
1.7

 
7.6

Total investments in unconsolidated entities
 
$
40.3

 
$
35.6


 
Morningstar Japan K.K. Morningstar Japan K.K. (MJKK) develops and markets products and services customized for the Japanese market. MJKK’s shares are traded on the Tokyo Stock Exchange under the ticker 47650. We account for our investment in MJKK using the equity method. The following table summarizes our ownership percentage in MJKK and the market value of this investment based on MJKK’s publicly quoted share price: 
 
 
As of December 31
 
 
 
 
2016

 
2015

Morningstar’s approximate ownership of MJKK
 
34
%
 
34
%
Approximate market value of Morningstar’s ownership in MJKK:
 
 

 
 

Japanese yen (¥ in millions)
 
¥
8,558.2

 
¥
8,200.5

Equivalent U.S. dollars ($ in millions)
 
$
73.2

 
$
68.1



Other Equity Method Investments. As of December 31, 2016 and 2015, other equity method investments consist of our investment in Inquiry Financial Europe AB (Inquiry Financial) and YCharts, Inc. (YCharts). Inquiry Financial is a provider of sell-side consensus estimate data. Our ownership interest in Inquiry Financial was approximately 34% as of December 31, 2016 and 2015. YCharts is a technology company that provides stock research and analysis. Our ownership interest in YCharts was approximately 22% as of December 31, 2016 and 2015.

As of December 31, 2016, other equity method investments also includes our investment in Ellevate Financial, Inc. (Ellevest) and United Income, Inc. (United Income). In March 2016, we acquired a minority equity stake in Ellevest. Previously, Ellevest was accounted for as a cost-method investment. Ellevest provides an engaging investing experience to help women meet their financial goals. Our ownership interest in Ellevest was approximately 22% as of December 31, 2016. In June 2016, we acquired a minority equity stake in United Income, which helps investors transition to retirement and manage their retirement income. Our ownership interest in United Income was approximately 38% as of December 31, 2016.

As of December 31, 2015, our cost-method investments also included a minority investment in PitchBook Data, Inc.(PitchBook). In December 2016, we purchased the remaining ownership interest in PitchBook. See Note 7 for additional information concerning our acquisition of PitchBook.

During 2014, we recorded an impairment loss of $1.7 million on our investment in an unconsolidated entity. We did not record any impairment losses on these investments in 2016 or 2015.
 
Property, Equipment, and Capitalized Software
Property, Equipment, and Capitalized Software
Property, Equipment, and Capitalized Software

The following table shows our property, equipment, and capitalized software summarized by major category:

 
 
As of December 31
 
 
(in millions)
 
2016

 
2015

Computer equipment
 
$
70.1

 
$
60.3

Capitalized software
 
189.8

 
144.0

Furniture and fixtures
 
26.0

 
24.3

Leasehold improvements
 
69.0

 
61.9

Telephone equipment
 
2.1

 
2.1

Construction in progress
 
9.9

 
11.7

Property, equipment, and capitalized software, at cost
 
366.9

 
304.3

Less accumulated depreciation
 
(214.8
)
 
(169.8
)
Property, equipment, and capitalized software, net
 
$
152.1

 
$
134.5



The following table summarizes our depreciation expense:
(in millions)
 
2016

 
2015

 
2014

Depreciation expense
 
$
51.3

 
$
42.4

 
$
32.6

Operating Leases
Operating Leases
Operating Leases

The following table shows our minimum future rental commitments due in each of the next five years and thereafter for all non-cancelable operating leases, consisting primarily of commitments for office space:
Minimum Future Rental Commitments
 
(in millions)

2017
 
$
23.9

2018
 
22.0

2019
 
17.9

2020
 
17.5

2021
 
16.0

Thereafter
 
27.4

Total
 
$
124.7


The following table summarizes our rent expense, including taxes, insurance, and related operating costs:

(in millions)
 
2016

 
2015

 
2014

Rent expense
 
$
26.3

 
$
27.1

 
$
24.5



Deferred rent includes build-out and rent abatement allowances received, which are amortized over the remaining portion of the original term of the lease as a reduction in office lease expense. We include deferred rent, as appropriate, in “Accounts payable and accrued liabilities” and “Deferred rent, noncurrent” on our Consolidated Balance Sheets.
 
 
As of December 31
 
 
(in millions)
 
2016

 
2015

Deferred rent
 
$
28.4

 
$
28.5



Stock-Based Compensation
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, restricted stock units, restricted stock, performance share awards, and stock options. We granted restricted stock units, restricted stock, and stock options 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.
The following table summarizes the number of shares available for future grants under our 2011 Plan:
 
 
As of December 31
(in millions)
 
2016

Shares available for future grants
 
3.7


 
Accounting for Stock-Based Compensation Awards
 
The following table summarizes our stock-based compensation expense and the related income tax benefit we recorded in the past three years:
 
 
Year ended December 31
(in millions)
 
2016

 
2015

 
2014

Restricted stock units
 
$
14.6

 
$
16.1

 
$
16.3

Restricted stock
 
—

 
0.1

 
0.4

Performance share awards
 
(0.1
)
 
1.0

 
0.5

Stock options
 
—

 
0.2

 
0.4

Total stock-based compensation expense
 
$
14.5

 
$
17.4

 
$
17.6

 
 
 
 
 
 
 
Income tax benefit related to the stock-based compensation expense
 
$
4.3

 
$
5.0

 
$
5.1



The following table summarizes the stock-based compensation expense included in each of our operating expense categories for the past three years:
 
 
Year ended December 31
(in millions)
 
2016

 
2015

 
2014

Cost of revenue
 
$
7.5

 
$
8.1

 
$
7.8

Sales and marketing
 
1.9

 
2.2

 
2.1

General and administrative
 
5.1

 
7.1

 
7.7

Total stock-based compensation expense
 
$
14.5

 
$
17.4

 
$
17.6



The following table summarizes the amount of unrecognized stock-based compensation expense as of December 31, 2016 and the expected number of months over which the expense will be recognized:
 
 
Unrecognized stock-based compensation expense (in millions)

 
Weighted average expected amortization period (months)
Restricted stock units
 
$
31.4

 
33
Performance share awards
 
6.2

 
12
Total unrecognized stock-based compensation expense
 
$
37.6

 
29


In accordance with FASB ASC 718, Compensation—Stock Compensation, we estimate forfeitures of employee stock-based awards and recognize compensation cost only for those awards expected to vest. Most of our larger annual equity grants typically have vesting dates in the second quarter. We adjust the stock-based compensation expense annually in the third quarter to reflect those awards that ultimately vested and update our estimate of the forfeiture rate that will be applied to awards not yet vested.
 
Restricted Stock Units
 
Restricted stock units represent the right to receive a share of Morningstar common stock when that unit vests. Restricted stock units granted to employees vest ratably over a four-year period. Restricted stock units granted to non-employee directors vest ratably over a three-year period.

We measure the fair value of our restricted stock units on the date of grant based on the closing market price of the underlying common stock on the day prior to grant. We amortize that value to stock-based compensation expense, net of estimated forfeitures, ratably over the vesting period.

The following table summarizes restricted stock unit activity during the past three years:
Restricted Stock Units (RSUs)
 
Unvested

 
Vested but
Deferred

 
Total

 
Weighted
Average
Grant Date Value
per RSU

RSUs Outstanding - December 31, 2013
 
680,002

 
16,682

 
696,684

 
$
62.02

Granted
 
279,524

 
—

 
279,524

 
72.68

Dividend equivalents
 
2,621

 
150

 
2,771

 
55.70

Vested
 
(268,115
)
 
—

 
(268,115
)
 
58.91

Issued
 
—

 
(2,054
)
 
(2,054
)
 
53.54

Forfeited
 
(38,098
)
 
—

 
(38,098
)
 
65.21

RSUs Outstanding - December 31, 2014
 
655,934

 
14,778

 
670,712

 
$
67.51

Granted
 
235,213

 
—

 
235,213

 
77.17

Dividend equivalents
 
1,409

 
146

 
1,555

 
56.42

Vested
 
(253,038
)
 
—

 
(253,038
)
 
64.65

Forfeited
 
(66,992
)
 
—

 
(66,992
)
 
53.61

RSUs Outstanding - December 31, 2015
 
572,526

 
14,924

 
587,450

 
$
72.14

Granted
 
241,609

 
—

 
241,609

 
77.82

Dividend equivalents
 
370

 
136

 
506

 
56.52

Vested
 
(225,590
)
 
—

 
(225,590
)
 
69.39

Issued
 
—

 
(5,312
)
 
(5,312
)
 
44.47

Forfeited
 
(47,670
)
 
—

 
(47,670
)
 
74.45

RSUs Outstanding - December 31, 2016
 
541,245

 
9,748

 
550,993

 
$
75.77



Performance Share Awards

In 2014, we introduced a long-term incentive award program consisting of performance shares. In March 2015 and 2016, executive officers, other than Joe Mansueto, and certain other employees, were granted performance share awards. These awards entitle the holder to a number of shares of Morningstar common stock equal to the number of notional performance shares that become vested. Each award specifies a number of performance shares that will vest if pre-established target performance goals are attained. The number of performance shares that actually vest may be more or less than the specified number of performance shares to the extent Morningstar exceeds or fails to achieve, respectively, the target performance goals over a three-year performance period.

We base the grant date fair value for these awards on the closing market price of the underlying common stock on the day prior to the grant date. We amortize that value to stock-based compensation expense ratably over the vesting period based on the satisfaction of the performance condition that is most likely to be satisfied over the three-year performance period.

The table below shows target performance share awards granted and shares that would be issued at current performance levels for performance share awards granted as of December 31, 2016:
 
 
As of December 31, 2016

Target performance share awards granted
 
117,386

Weighted average fair value per award
 
$
78.23

Number of shares that would be issued based on current performance levels
 
1,287

Unamortized expense, based on current performance levels (in millions)
 
$
(0.7
)

PitchBook Bonus Plan
In connection with our acquisition of PitchBook, we adopted a management bonus sub-plan under the 2011 Plan for certain employees of PitchBook (the PitchBook Plan). Pursuant to the terms of the PitchBook Plan, awards having an aggregate target value equal to $30.0 million will be available for issuance with annual grants of $7.5 million for 2017, $7.5 million in 2018, and $15.0 million in 2019.

Each grant will consist of performance-based share unit awards which will vest over a one-year period and will be measured primarily based on the achievement of certain annual revenue targets specifically related to PitchBook’s business. Upon achievement of these targets, earned performance units will be settled in shares of our common stock on a one-for-one basis. If PitchBook exceeds certain performance conditions, the PitchBook Plan participants may receive payment for performance units in excess of the aggregate target values described above. If PitchBook fails to meet threshold performance conditions, the PitchBook Plan participants will not be entitled to receive payment for any performance units. In certain circumstances, the PitchBook Plan participants may be able to receive a catch-up award with respect to 2017 or 2018 if certain additional performance conditions are met in a subsequent year.

The table below shows target performance share awards granted and shares that would be issued at current performance levels for performance share awards granted as of December 31, 2016:
 
 
As of December 31, 2016

Target performance share awards granted
 
100,924

Weighted average fair value per award
 
$
74.31

Number of shares that would be issued based on current performance levels
 
100,924

Unamortized expense, based on current performance levels (in millions)
 
$
6.9



Stock Options

Stock options granted to employees vest ratably over a four-year period. Grants to our non-employee directors vest ratably over a three-year period. All grants expire 10 years after the date of grant.

In May 2011, we granted 86,106 stock options under the 2004 Stock Incentive Plan. In November 2011, we granted 6,095 stock options under the 2011 Plan. All options granted in 2011 have an exercise price equal to the fair market value on the grant date. We estimated the fair value of the options on the grant date using a Black-Scholes option-pricing model. The weighted average fair value of options granted during 2011 was $23.81 per share, based on the following assumptions:

Assumptions for Black-Scholes Option Pricing Model
 
 
Expected life (years):
 
7.4

Volatility factor:
 
35.1
%
Dividend yield:
 
0.35
%
Interest rate:
 
2.87
%


The following tables summarize stock option activity in the past three years for our various stock option grants. The first table includes activity for options granted at an exercise price below the fair value per share of our common stock on the grant date; the second table includes activity for all other option grants.

 
 
2016
 
 
 
2015
 
 
 
2014
 
 
Options Granted At an Exercise Price Below the Fair Value Per Share on the Grant Date
 
Underlying
Shares

 
Weighted
Average
Exercise
Price

 
Underlying
Shares

 
Weighted
Average
Exercise
Price

 
Underlying
Shares

 
Weighted
Average
Exercise
Price

Options outstanding—beginning of year
 
—

 
$
—

 
—

 
$
—

 
179,559

 
$
21.47

Granted
 
—

 
—

 
—

 
—

 
—

 
—

Canceled
 
—

 
—

 
—

 
—

 
(150
)
 
22.24

Exercised
 
—

 
—

 
—

 
—

 
(179,409
)
 
22.08

Options outstanding—end of year
 
—

 
$
—

 
—

 
$
—

 
—

 
$
—

 
 
 
 
 
 
 
 
 
 
 
 
 
Options exercisable—end of year
 
—

 
$
—

 
—

 
$
—

 
—

 
$
—



 
 
2016
 
 
 
2015
 
 
 
2014
 
 
All Other Option Grants, Excluding Activity Shown Above
 
Underlying
Shares

 
Weighted
Average
Exercise
Price

 
Underlying
Shares

 
Weighted
Average
Exercise
Price

 
Underlying
Shares

 
Weighted
Average
Exercise
Price

Options outstanding—beginning of year
 
52,096

 
$
57.52

 
169,810

 
$
40.20

 
253,972

 
$
36.48

Granted
 
—

 
—

 
—

 
—

 
—

 
—

Canceled
 
—

 
—

 
—

 
—

 
(526
)
 
38.61

Exercised
 
(6,095
)
 
59.35

 
(117,714
)
 
32.91

 
(83,636
)
 
30.82

Options outstanding—end of year
 
46,001

 
$
57.28

 
52,096

 
$
57.52

 
169,810

 
$
40.20

 
 
 
 
 
 
 
 
 
 
 
 
 
Options exercisable—end of year
 
46,001

 
$
57.28

 
52,096

 
$
57.52

 
154,864

 
$
38.53



The following table summarizes the total intrinsic value (difference between the market value of our stock on the date of exercise and the exercise price of the option) of options exercised:
(in millions)
 
2016

 
2015

 
2014

Intrinsic value of options exercised
 
$
0.1

 
$
5.1

 
$
12.0


 
The table below shows additional information for options outstanding and exercisable as of December 31, 2016:
 
 
 
Options Outstanding
 
Options Exercisable
Range of Exercise Prices
 
Number of  Options

 
Weighted
Average
Remaining
Contractual
Life (years)
 
Weighted
Average
Exercise
Price

 
Aggregate
Intrinsic
Value
(in millions)

 
Exercisable Shares

 
Weighted Average Remaining Contractual Life (years)
 
Weighted Average Exercise Price

 
Aggregate
Intrinsic
Value
(in millions)

$57.28
 
46,001

 
4.37
 
$
57.28

 
$
0.7

 
46,001

 
4.37
 
$
57.28

 
$
0.7

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Vested or Expected to Vest
 
 
 
 
 
 
 
 
 
 
 
 
 
$57.28
 
46,001

 
4.37
 
$
57.28

 
$
0.7

 
 
 
 
 
 
 
 

 
The aggregate intrinsic value in the table above represents the total pretax intrinsic value all option holders would have received if they had exercised all outstanding options on December 31, 2016. The intrinsic value is based on our closing stock price of $73.56 on December 30, 2016.
Defined Contribution Plan
Defined Contribution Plan
Defined Contribution Plan

We sponsor a defined contribution 401(k) plan, which allows our U.S.-based employees to voluntarily contribute pre-tax dollars up to a maximum amount allowable by the U.S. Internal Revenue Service. In 2016, 2015, and 2014, we made matching contributions to our 401(k) plan in the United States in an amount equal to 75 cents for every dollar of an employee's contribution, up to a maximum of 7% of the employee's compensation in the pay period.

The following table summarizes our matching contributions:
(in millions)
 
2016

 
2015

 
2014

401(k) matching contributions
 
$
9.0

 
$
8.3

 
$
7.5

Income Taxes
Income Taxes
Income Taxes
 
Income Tax Expense and Effective Tax Rate

The following table shows our income tax expense and our effective tax rate for the years ended December 31, 2016, 2015, and 2014:

(in millions)
 
2016

 
2015

 
2014

Income before income taxes and equity in net income (loss) of unconsolidated entities
 
$
224.9

 
$
193.7

 
$
114.0

Equity in net income (loss) of unconsolidated entities
 
(0.2
)
 
1.8

 
—

Net income attributable to the noncontrolling interest
 
—

 
(0.2
)
 
—

Total
 
$
224.7

 
$
195.3

 
$
114.0

Income tax expense
 
$
63.7

 
$
62.7

 
$
35.7

Effective tax rate
 
28.3
%
 
32.1
%
 
31.3
%


The following table reconciles our income tax expense at the U.S. federal income tax rate of 35% to income tax expense as recorded:

 
 
2016
 
 
 
2015
 
 
 
2014
 
 
(in millions, except percentages)
 
Amount

 
%

 
Amount

 
%

 
Amount

 
%

Income tax expense at U.S. federal rate
 
$
78.6

 
35.0
 %
 
$
68.4

 
35.0
 %
 
$
39.9

 
35.0
 %
State income taxes, net of federal income tax benefit
 
4.5

 
2.0

 
6.6

 
3.4

 
2.1

 
1.9

Stock-based compensation activity
 
(0.6
)
 
(0.3
)
 
0.4

 
0.2

 
0.1

 
0.1

Holding gain upon acquisition of additional ownership of equity method investments
 
(12.1
)
 
(5.4
)
 
—

 
—

 
(1.4
)
 
(1.2
)
Net change in valuation allowance related to non-U.S. deferred tax assets, primarily net operating losses
 
(0.1
)
 
—

 
(2.0
)
 
(1.0
)
 
(0.6
)
 
(0.5
)
Difference between U.S. federal statutory and foreign tax rates
 
(5.3
)
 
(2.4
)
 
(4.4
)
 
(2.3
)
 
(4.0
)
 
(3.5
)
Change in unrecognized tax benefits
 
2.6

 
1.2

 
(1.4
)
 
(0.7
)
 
1.5

 
1.3

Credits and incentives
 
(3.7
)
 
(1.6
)
 
(5.1
)
 
(2.6
)
 
(2.9
)
 
(2.6
)
Recognition of deferred tax assets
 
—

 
—

 
—

 
—

 
(0.1
)
 
(0.1
)
Other - net
 
(0.2
)
 
(0.1
)
 
0.2

 
0.1

 
1.1

 
0.9

Total income tax expense
 
$
63.7

 
28.3
 %
 
$
62.7

 
32.1
 %
 
$
35.7

 
31.3
 %


Income tax expense consists of the following:

 
 
Year ended December 31
(in millions)
 
2016

 
2015

 
2014

Current tax expense:
 
 
 
 
 
 
U.S.
 
 
 
 
 
 
Federal
 
$
42.8

 
$
42.8

 
$
20.8

State
 
6.5

 
8.3

 
2.0

Non-U.S.
 
9.7

 
8.7

 
9.6

Current tax expense
 
59.0

 
59.8

 
32.4

Deferred tax expense (benefit):
 
 
 
 
 
 
U.S.
 
 
 
 
 
 
Federal
 
5.1

 
4.3

 
3.7

State
 
0.4

 
1.8

 
1.3

Non-U.S.
 
(0.8
)
 
(3.2
)
 
(1.7
)
Deferred tax expense, net
 
4.7

 
2.9

 
3.3

Income tax expense
 
$
63.7

 
$
62.7

 
$
35.7



The following table provides our income before income taxes and equity in net income (loss) of unconsolidated entities, generated by our U.S. and non-U.S. operations:

 
 
Year ended December 31
(in millions)
 
2016

 
2015

 
2014

U.S.
 
$
186.5

 
$
160.6

 
$
80.4

Non-U.S.
 
38.4

 
33.1

 
33.6

Income before income taxes and equity in net income (loss) of unconsolidated entities
 
$
224.9

 
$
193.7

 
$
114.0



Deferred Tax Assets and Liabilities

We recognize deferred income taxes for the temporary differences between the carrying amount of assets and liabilities for financial statement purposes and their tax basis. The tax effects of the temporary differences that give rise to the deferred income tax assets and liabilities are as follows:

 
 
As of December 31
 
 
(in millions)
 
2016

 
2015

Deferred tax assets:
 
 
 
 
Stock-based compensation expense
 
$
2.6

 
$
3.1

Accrued liabilities
 
19.0

 
14.3

Deferred revenue
 
5.1

 
0.9

Net operating loss carryforwards - U.S. federal and state
 
12.9

 
7.6

Net operating loss carryforwards - Non-U.S.
 
3.0

 
3.7

Credits and incentive carryforwards
 
0.6

 
0.6

Deferred royalty revenue
 
0.3

 
0.3

Allowance for doubtful accounts
 
1.2

 
1.0

Deferred rent
 
10.3

 
8.9

Unrealized exchange losses, net
 
—

 
0.4

Total deferred tax assets
 
55.0

 
40.8

 
 
 
 
 
Deferred tax liabilities:
 
 
 
 
Acquired intangible assets
 
(34.3
)
 
(13.2
)
Property, equipment, and capitalized software
 
(37.6
)
 
(28.1
)
Unrealized exchange gains, net
 
(0.1
)
 
—

Prepaid expenses
 
(5.3
)
 
(4.3
)
Investments in unconsolidated entities
 
(14.0
)
 
(13.7
)
Other
 
(0.3
)
 
(0.1
)
Total deferred tax liabilities
 
(91.6
)
 
(59.4
)
Net deferred tax liability before valuation allowance
 
(36.6
)
 
(18.6
)
Valuation allowance
 
(1.6
)
 
(1.2
)
Deferred tax liability, net
 
$
(38.2
)
 
$
(19.8
)


The deferred tax assets and liabilities are presented in our Consolidated Balance Sheets as follows:

 
 
As of December 31
 
 
(in millions)
 
2016

 
2015

Deferred tax liability, net
 
$
(38.2
)
 
$
(19.8
)


The following table summarizes our U.S. net operating loss (NOL) carryforwards:

 
 
As of December 31
 
 
 
(in millions)
 
 
2016
 
 
2015
 
 
 
Expiration Dates
 
 
Expiration Dates
U.S. federal NOLs subject to expiration dates
 
$
36.9

2023-2036
 
$
21.6

2023-2034


The net increase in the U.S. federal NOL carryforwards as of December 31, 2016 compared with 2015 primarily reflects $23.9 million of acquired U.S federal NOLs from the acquisition of PitchBook in 2016 offset by $8.6 million of utilization of U.S. federal NOLs from prior acquisitions during 2016. We have not recorded a valuation allowance against the U.S. federal NOLs of $36.9 million because we expect the benefit of the U.S. federal NOLs to be fully utilized before expiration.

The following table summarizes our NOL carryforwards for our non-U.S. operations:

 
 
As of December 31
 
 
(in millions)
 
2016

 
2015

Non-U.S. NOLs subject to expiration dates from 2019 through 2036
 
$
3.8

 
$
2.9

Non-U.S. NOLs with no expiration date
 
10.8

 
15.5

Total
 
$
14.6

 
$
18.4

 
 
 
 
 
Non-U.S. NOLs not subject to valuation allowances
 
$
6.8

 
$
12.1



The decrease in non-U.S. NOL carryforwards as of December 31, 2016 compared with 2015 primarily reflects the use of NOL carryforwards.

We have not provided federal and state income taxes on accumulated undistributed earnings of certain foreign subsidiaries aggregating approximately $171.6 million as of December 31, 2016, because these earnings have been permanently reinvested. It is not practicable to determine the amount of the unrecognized deferred tax liability related to the undistributed earnings.

In assessing the realizability of our deferred tax assets, we consider whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. We have recorded a valuation allowance against all but approximately $6.8 million of the non-U.S. NOLs, reflecting the likelihood that the benefit of these NOLs will not be realized.

Uncertain Tax Positions

We conduct business globally and as a result, we file income tax returns in U.S. federal, state, local, and foreign jurisdictions. In the normal course of business we are subject to examination by tax authorities throughout the world. The open tax years for our U.S. Federal tax returns and most state tax returns include the years 2008 to the present.

We are currently under audit by federal, state and local tax authorities in the United States as well as tax authorities in certain non-U.S. jurisdictions. It is likely that the examination phase of some of these U.S. federal, state, local, and non-U.S. audits will conclude in 2017. It is not possible to estimate the effect of current audits on previously recorded unrecognized tax benefits.

As of December 31, 2016, our Consolidated Balance Sheet included a current liability of $8.9 million and a non-current liability of $5.4 million for unrecognized tax benefits. As of December 31, 2015, our Consolidated Balance Sheet included a current liability of $4.2 million and a non-current liability of $6.0 million for unrecognized tax benefits. These amounts include interest and penalties, less any associated tax benefits.

The table below reconciles the beginning and ending amount of the gross unrecognized tax benefits as follows:

(in millions)
 
2016

 
2015

Gross unrecognized tax benefits - beginning of the year
 
$
14.5

 
$
11.9

Increases as a result of tax positions taken during a prior-year period
 
2.2

 
4.4

Decreases as a result of tax positions taken during a prior-year period
 
(0.1
)
 
(0.7
)
Increases as a result of tax positions taken during the current period
 
2.4

 
2.4

Decreases relating to settlements with tax authorities
 
—

 
(1.8
)
Reductions as a result of lapse of the applicable statute of limitations
 
(0.6
)
 
(1.7
)
Gross unrecognized tax benefits - end of the year
 
$
18.4

 
$
14.5



In 2016, we recorded a net increase of $4.5 million of gross unrecognized tax benefits before settlements and lapses of statutes of limitations, of which $3.1 million increased our income tax expense by $2.8 million. In addition, we reduced our unrecognized tax benefits by $0.6 million for settlements and lapses of statutes of limitations, of which $0.6 million decreased our income tax expense by $0.4 million.

As of December 31, 2016, we had $18.4 million of gross unrecognized tax benefits, of which $14.4 million, if recognized, would reduce our effective income tax rate and decrease our income tax expense by $13.3 million.

We record interest and penalties related to uncertain tax positions as part of our income tax expense. The following table summarizes our gross liability for interest and penalties:

 
 
As of December 31
 
 
(in millions)
 
2016

 
2015

Liabilities for interest and penalties
 
$
1.6

 
$
1.2



We recorded the decrease in the liability, net of any tax benefits, to income tax expense in our Consolidated Statement of Income in 2016.
Contingencies
Contingencies
Contingencies
 
We are involved in legal proceedings and litigation that have arisen in the normal course of our business. While it is difficult to predict the outcome of any particular proceeding, 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
Quarterly Dividend and Share Repurchase Programs
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 $1.0 billion in shares of our outstanding common stock. The authorization expires on December 31, 2017. 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 December 31, 2016, we had repurchased a total of 10,028,125 shares for $672.9 million under this authorization, leaving approximately $327.1 million available for future repurchases.
Recently Issued Accounting Pronouncements
Recently Issued Accounting Pronouncements
Recently Issued Accounting Pronouncements

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 original effective date for ASU 2014-09 would have required us to adopt it beginning on January 1, 2017. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers—Deferral of the Effective Date, which defers the effective date of ASU 2014-09 for one year and permits early adoption as early as the original effective date of ASU 2014-09. We elected the deferral, and the new standard is effective for us on January 1, 2018. The company has obtained an understanding of ASU No. 2014-09 and has begun to analyze the impact of the new standard on its financial results. We have completed a high-level assessment of the attributes within the company’s contracts for its major products and services, and we have started assessing potential impacts to our internal processes, control environment, and disclosures. While the company does not currently anticipate that the adoption of ASU 2014-09 will result in a material change to the timing of when revenue is recognized and believes that it will retain similar accounting treatment used to recognize revenue under current standards, we are continuing to evaluate the impact of the new standard on our financial results and other possible impacts. The standard allows for both retrospective and modified retrospective methods of adoption. The company is in the process of determining the method of adoption it will elect and the impact on our consolidated financial statements and footnote disclosures. We will continue to provide enhanced disclosures as we continue our assessment.

On March 17, 2016, the FASB issued ASU No. 2016-08, Revenue from Contracts with Customers: Principal versus Agent Considerations (Reporting Revenue Gross versus Net), which provides guidance on assessing whether an entity is a principal or an agent in a revenue transaction and whether an entity reports revenue on a gross or net basis. On April 14, 2016, the FASB issued ASU No. 2016-10, Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing, which provides guidance on identifying performance obligations and accounting for licenses of intellectual property. On May 6, 2016, the FASB issued ASU No. 2016-11, Revenue Recognition and Derivatives and Hedging: Rescission of SEC guidance because of ASU No. 2014-09 and ASU No. 2014-16 pursuant to staff announcements at the March 3, 2016 EITF Meeting, which rescinds the following SEC Staff Observer comments from ASC 605, Revenue Recognition, upon an entity's early adoption of ASC 606, Revenue from Contracts with Customers: Revenue and expense recognition for freight services in process, accounting for shipping and handling fees and costs, and accounting for consideration given by a vendor to a customer (including reseller of the vendor's products). On May 9, 2016, the FASB issued ASU No. 2016-12, Revenue from Contracts with Customers: Narrow-Scope Improvements and Practical Expedients, which makes narrow-scope amendments to ASU No. 2014-09 and provides practical expedients to simplify the transition to the new standard and clarify certain aspects of the standard. On December 21, 2016, the FASB issued ASU No. 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers, which makes narrow-scope amendments to ASU No. 2014-09.

The effective date and transition requirements for ASU No. 2016-08, ASU No. 2016-10, ASU No. 2016-11, ASU No. 2016-12, and ASU No. 2016-20 are the same as the effective date and transition requirements of ASU No. 2014-09. We are evaluating the effect that ASU No. 2016-08, ASU No. 2016-10, ASU No. 2016-11, ASU No. 2016-12, and ASU No. 2016-20 will have on our consolidated financial statements and related disclosures.

On February 25, 2016, the FASB issued ASU No. 2016-02, Leases, which will require lessees to recognize almost all leases on their balance sheet as a right-of-use asset and a lease liability. The new standard is effective for us on January 1, 2019. The new standard must be adopted using a modified retrospective transition, and provides for certain practical expedients. Transition will require application of the new guidance at the beginning of the earliest comparative period presented. We are evaluating the effect that ASU No. 2016-02 will have on our consolidated financial statements and related disclosures.

On March 15, 2016, the FASB issued ASU No. 2016-07, Investments—Equity Method and Joint Ventures: Simplifying the Transition to the Equity Method of Accounting, which eliminates the requirement to apply the equity method of accounting retrospectively when a reporting entity obtains significant influence over a previously held investment. The new standard is effective for us on January 1, 2017. Early adoption is permitted. The new standard should be applied prospectively for investments that qualify for the equity method of accounting after the effective date. We elected to early adopt ASU No. 2016-07 in the quarter ended March 31, 2016. The adoption of ASU No. 2016-07 did not have a material effect on our consolidated financial statements.

On March 30, 2016, the FASB issued ASU No. 2016-09, Compensation—Stock Compensation: Improvements to Employee Share-Based Payment Accounting, which includes amendments to accounting for income taxes at settlement, forfeitures, and net settlements to cover withholding taxes. The new standard is effective for us on January 1, 2017. Early adoption is permitted but requires all elements of the amendments to be adopted at once rather than individually.

We elected to early adopt ASU No. 2016-09 in the quarter ended June 30, 2016, which requires us to reflect any adjustments as of January 1, 2016, the beginning of the annual period that includes the interim period of adoption. The primary impact of adoption was the recognition of excess tax benefits in our provision for income taxes rather than paid-in capital for all periods in 2016. Additional amendments to the accounting for income taxes and minimum statutory withholding tax requirements had no impact to retained earnings as of January 1, 2016, where the cumulative effective of these changes are required to be recorded. We have elected to continue to estimate forfeitures expected to occur to determine the amount of compensation cost to be recognized in each period.

We elected to apply the presentation requirements for cash flows related to excess tax benefits retrospectively to all periods presented, which resulted in an increase to both net cash provided by operating activities and net cash used for financing activities of $2.6 million and $4.4 million for the years ended December 31, 2015 and December 31, 2014, respectively. The presentation requirements for cash flows related to employee taxes paid for withheld shares had no impact to any of the periods presented in our consolidated cash flow statements because such cash flows have historically been presented as a financing activity.

Adoption of the new standard resulted in the recognition of excess tax benefits in our provision for income taxes rather than paid-in capital of $0.8 million for the year ended December 31, 2016.

On August 26, 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments, which reduces diversity in practice of how certain transactions are classified in the statement of cash flows. The new guidance clarifies the classification of cash activities related to debt prepayment or debt extinguishment costs, settlement of zero-coupon debt instruments, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate and bank-owned life insurance policies, distributions received from equity-method investments, and beneficial interests in securitization transactions. The guidance also describes a predominance principle in which cash flows with aspects of more than one class that cannot be separated should be classified based on the activity that is likely to be the predominant source or use of cash flow.

The new standard is effective for us on January 1, 2018. Early adoption is permitted, including adoption in an interim period, but requires all elements of the amendments to be adopted at once rather than individually. The new standard must be adopted using a retrospective transition method. We are evaluating the effect that ASU No. 2016-15 will have on our consolidated financial statements and related disclosures.

On January 5, 2017, the FASB issued ASU No. 2017-01, Business Combinations: Clarifying the Definition of a Business, which revises the definition of a business. When substantially all of the fair value of gross assets acquired is concentrated in a single asset (or a group of similar assets), the assets acquired would not represent a business. To be considered a business, an acquisition would have to include an input and a substantive process that together significantly contribute to the ability to create outputs. The new guidance provides a framework to evaluate when an input and substantive process are present (including for early-stage companies that have not generated outputs). To be a business without outputs, there will now need to be an organized workforce. The new guidance also narrows the definition of the term outputs to be consistent with how it is described in Topic 606, Revenue from Contracts with Customers. The new standard is effective for us on January 1, 2018. Early adoption is permitted. We are evaluating the effect that ASU No. 2017-01 will have on our consolidated financial statements and related disclosures.

On January 26, 2017, the FASB issued ASU No. 2017-04, Intangibles—Goodwill and Other, which simplifies the accounting for goodwill impairment. The guidance removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. All other goodwill impairment guidance will remain largely unchanged. Entities will continue to have the option to perform a qualitative assessment to determine if a quantitative impairment test is necessary. The same one-step impairment test will be applied to goodwill at all reporting units, even those with zero or negative carrying amounts. Entities will be required to disclose the amount of goodwill at reporting units with zero or negative carrying amounts. The new standard is effective for us on January 1, 2020. The new standard should be applied prospectively. Early adoption is permitted for any impairment tests performed after January 1, 2017. We are evaluating the effect that ASU No. 2017-05 will have on our consolidated financial statements and related disclosures.


Selected Quarterly Financial Data
Selected Quarterly Financial Data
Selected Quarterly Financial Data (unaudited)
 
 
2015

 
 
 
 
 
 
 
2016

 
 
 
 
 
 
 
(in millions except per share amounts)
 
Q1

 
Q2

 
Q3

 
Q4

 
Q1

 
Q2

 
Q3

 
Q4

 
Revenue
 
$
189.8

 
$
202.1

 
$
195.3

 
$
201.6

 
$
192.1

 
$
198.2

 
$
196.1

 
$
212.2

 
Total operating expense
 
145.3

 
152.4

 
149.1

 
151.5

 
149.8

 
153.8

 
151.9

 
162.3

 
Operating income
 
44.5

 
49.7

 
46.2

 
50.1

 
42.3

 
44.4

 
44.2

 
49.9

 
Non-operating income (expense), net
 
(0.4
)
 
0.6

 
1.4

 
1.4

 
0.5

 
3.0

 
2.1

 
38.5

(1)
Income before income taxes and equity in net income (loss) of unconsolidated entities
 
44.1

 
50.3

 
47.6

 
51.5

 
42.8

 
47.4

 
46.3

 
88.4

 
Equity in net income (loss) of unconsolidated entities
 
0.5

 
0.6

 
0.5

 
0.3

 
0.5

 
(0.2
)
 
0.4

 
(0.9
)
 
Income tax expense
 
14.8

 
18.7

 
14.6

 
14.5

 
14.6

 
15.4

 
16.5

 
17.2

 
Consolidated net income
 
29.8

 
32.2

 
33.5

 
37.3

 
28.7

 
31.8

 
30.2

 
70.3

 
Net income attributable to the noncontrolling interests
 
(0.1
)
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
Net income attributable to Morningstar, Inc.
 
$
29.7

 
$
32.2

 
$
33.5

 
$
37.3

 
$
28.7

 
$
31.8

 
$
30.2

 
$
70.3

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income per share attributable to Morningstar, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
 
$
0.67

 
$
0.73

 
$
0.76

 
$
0.85

 
$
0.67

 
$
0.74

 
$
0.70

 
$
1.63

 
Diluted

$
0.67


$
0.72


$
0.76


$
0.85


$
0.67


$
0.73


$
0.70


$
1.63

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Dividends per common share:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Dividends declared per common share
 
$
0.19

 
$
0.19

 
$
0.19

 
$
0.22

 
$
0.22

 
$
0.22

 
$
0.22

 
$
0.23

 
Dividends paid per common share
 
$
0.19

 
$
0.19

 
$
0.19

 
$
0.19

 
$
0.22

 
$
0.22

 
$
0.22

 
$
0.22

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average shares outstanding:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
 
44.3

 
44.3

 
44.2

 
43.8

 
43.0

 
43.0

 
43.1

 
43.0

 
Diluted
 
44.5

 
44.4

 
44.3

 
43.9

 
43.1

 
43.3

 
43.3

 
43.2

 

(1) Non-operating income in the fourth quarter of 2016 included a $37.1 million holding gain related to the purchase of the remaining ownership interest in PitchBook, which was previously a minority investment.
Summary of Significant Accounting Policies (Policies)
Principles of Consolidation 
Principles of Consolidation. We conduct our business operations through wholly owned or majority-owned operating subsidiaries. The accompanying consolidated financial statements include the accounts of Morningstar, Inc. and our subsidiaries. We consolidate assets, liabilities, and results of operations of subsidiaries in which we have a controlling interest and eliminate all significant intercompany accounts and transactions.

We account and report the noncontrolling (minority) interest in our Consolidated Financial Statements in accordance with FASB ASC 810, Consolidation. A noncontrolling interest is the portion of equity (net assets) in a subsidiary not attributable, directly or indirectly, to the parent company. We report the noncontrolling interest in our Consolidated Balance Sheet within equity separate from the shareholders' equity attributable to Morningstar, Inc. In addition, we present the net income (loss) and comprehensive income (loss) attributable to Morningstar, Inc.'s shareholders and the noncontrolling interest in our Consolidated Statements of Income, Consolidated Statements of Comprehensive Income, and Consolidated Statements of Equity.

We account for investments in entities in which we exercise significant influence, but do not control, using the equity method.

As part of our investment management operations, we manage certain funds outside of the United States that are considered variable interest entities. For the majority of these variable interest entities, we do not have a variable interest in them. In cases where we do have a variable interest, we are not the primary beneficiary. Accordingly, we do not consolidate any of these variable interest entities.

Use of Estimates 
Use of Estimates. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses during the reporting period. Actual results may differ from these estimates.
Reclassifications 
Reclassifications. Certain amounts reported in prior years have been reclassified to conform to the current year presentation.

Cash and Cash Equivalents 
Cash and Cash Equivalents. Cash and cash equivalents consists of cash and investments with original maturities of three months or less. We state them at cost, which approximates fair value. We state the portion of our cash equivalents that are invested in money market funds at fair value, as these funds are actively traded and have quoted market prices.
Investments 
Investments. We account for our investments in accordance with FASB ASC 320, Investments—Debt and Equity Securities. We classify our investments into three categories: held-to-maturity, trading, and available-for-sale.

•
Held-to-maturity: We classify certain investments, primarily certificates of deposit, as held-to-maturity securities, based on our intent and ability to hold these securities to maturity. We record held-to-maturity investments at amortized cost in our Consolidated Balance Sheets.

•
Trading: We classify certain other investments, primarily equity securities, as trading securities as these relate mainly to investments tracking the strategies of our newsletter portfolios. We include realized and unrealized gains and losses associated with these investments as a component of our operating income in our Consolidated Statements of Income. We record these securities at their fair value in our Consolidated Balance Sheets.

•
Available-for-sale: Investments not considered held-to-maturity or trading securities are classified as available-for-sale securities. Available-for-sale securities primarily consist of equity securities, exchange-traded funds, and mutual funds. We report unrealized gains and losses for available-for-sale securities as other comprehensive income (loss), net of related income taxes. We record these securities at their fair value in our Consolidated Balance Sheets.
Concentration of Credit Risk 
Concentration of Credit Risk. No single customer is large enough to pose a significant credit risk to our operations or financial condition. For the years ended December 31, 2016, 2015, and 2014, no single customer represented 5% or more of our consolidated revenue. If receivables from our customers become delinquent, we begin a collections process. We maintain an allowance for doubtful accounts based on our estimate of the probable losses of accounts receivable.
Property, Equipment, and Depreciation 
Property, Equipment, and Depreciation. We state property and equipment at historical cost, net of accumulated depreciation. We depreciate property and equipment primarily using the straight-line method based on the useful life of the asset, which generally is three years. We amortize leasehold improvements over the lease term or their useful lives, whichever is shorter.
Computer Software and Internal Product Development Costs 
Computer Software and Internal Product Development Costs. We capitalize certain costs in accordance with FASB ASC 350-40, Internal-Use Software, FASB ASC 350-50, Website Development Costs, and FASB ASC 985, Software. Internal product development costs mainly consist of employee costs for developing new web-based products and certain major enhancements of existing products. We amortize these costs on a straight-line basis over the estimated economic life, which is generally three to five years. We include capitalized software development costs related to projects that have not been placed into service in our construction in progress balance.
Business Combinations 
Business Combinations. When we make acquisitions, we allocate the purchase price to the assets acquired, liabilities assumed, and goodwill. We follow FASB ASC 805, Business Combinations. We recognize and measure the fair value of the acquired operation as a whole, as well as the assets acquired and liabilities assumed, at their full fair values as of the date we obtain control, regardless of the percentage ownership in the acquired operation or how the acquisition was achieved. We expense direct costs related to the business combination, such as advisory, accounting, legal, valuation, and other professional fees, as incurred. We recognize restructuring costs, including severance and relocation for employees of the acquired entity, as post-combination expenses unless the target entity meets the criteria of FASB ASC 420, Exit or Disposal Cost Obligations, on the acquisition date.

As part of the purchase price allocation, we follow the requirements of FASB ASC 740, Income Taxes. This includes establishing deferred tax assets or liabilities reflecting the difference between the values assigned for financial statement purposes and income tax purposes. In certain acquisitions, the goodwill resulting from the purchase price allocation may not be deductible for income tax purposes. FASB ASC 740 prohibits recognition of a deferred tax asset or liability for temporary differences in goodwill if goodwill is not amortizable and deductible for tax purposes.
Goodwill 
Goodwill. Changes in the carrying amount of our recorded goodwill are mainly the result of business acquisitions, divestitures, and the effect of foreign currency translations. In accordance with FASB ASC 350, Intangibles—Goodwill and Other, we do not amortize goodwill; instead, goodwill is subject to an impairment test annually, or whenever indicators of impairment exist. An impairment would occur if the carrying amount of a reporting unit exceeded the fair value of that reporting unit. We performed annual impairment reviews in the fourth quarter of 2016, 2015, and 2014. We did not record any impairment losses in 2016, 2015, or 2014.

Intangible Assets 
Intangible Assets. We amortize intangible assets using the straight-line method over their estimated useful lives, which range from one to 25 years. We have no intangible assets with indefinite useful lives. In accordance with FASB ASC 360-10-35, Subsequent Measurement—Impairment or Disposal of Long-Lived Assets, we review intangible assets for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. If the value of future undiscounted cash flows is less than the carrying amount of an asset group, we record an impairment loss based on the excess of the carrying amount over the fair value of the asset group. We did not record any impairment losses in 2016, 2015, or 2014.
Revenue Recognition 
Revenue Recognition. We recognize revenue in accordance with SEC SAB Topic 13, Revenue Recognition, ASC 605-25, Revenue Recognition: Multiple Element Arrangements, and ASC 985-605, Software: Revenue Recognition.

We recognize revenue when all of the following conditions are met:

•
There is persuasive evidence of an arrangement, as evidenced by a signed contract;
•
Delivery of our products and services has taken place. If arrangements include an acceptance provision, we generally begin recognizing revenue when we receive customer acceptance;
•
The amount of fees to be paid by the customer is fixed or determinable; and
•
The collectibility of the fees is reasonably assured.

We generate revenue through sales of Morningstar Data, Morningstar Advisor Workstation (including Morningstar Office), Morningstar Direct, Morningstar Research, Premium Membership subscriptions for Morningstar.com, our structured credit ratings offerings, and a variety of other investment-related products and services. We generally structure the revenue agreements for these offerings as licenses or subscriptions. We recognize revenue from licenses and subscription sales ratably as we deliver the product or service and over the service obligation period defined by the terms of the customer contract. For new-issue ratings and analysis for commercial mortgage-backed securities (CMBS), we charge asset-based fees that are paid by the issuer on the rated balance of the transaction and recognize the revenue immediately upon issuance.

We also generate revenue from Internet advertising, primarily from “impression-based” contracts. For advertisers who use our cost-per-impression pricing, we charge fees each time we display their ads on our site.

Our Investment Management business includes a broad range of services. Pricing for consulting services is based on the scope of work and the level of service provided, and includes asset-based fees for work we perform that involves investment management or acting as a subadvisor to investment portfolios. In arrangements that involve asset-based fees, we generally invoice clients quarterly in arrears based on average assets for the quarter. We recognize asset-based fees once the fees are fixed and determinable assuming all other revenue recognition criteria are met.

Our Workplace Solutions offerings help retirement plan participants plan and invest for retirement. We offer these services both through retirement plan providers (typically third-party asset management companies that provide administrative and record-keeping services) and directly to plan sponsors (employers that offer retirement plans to their employees). For our Workplace Solutions offerings, we provide both a hosted solution as well as proprietary installed software advice solution. Clients can integrate the installed customized software into their existing systems to help investors accumulate wealth, transition into retirement, and manage income during retirement.

The revenue arrangements for Workplace Solutions generally extend over multiple years. Our contracts may include one-time setup fees, implementation fees, technology licensing and maintenance fees, asset-based fees for managed retirement accounts, fixed and variable fees for advice and guidance, or a combination of these fee structures. Upon customer acceptance, we recognize revenue ratably over the term of the agreement. We recognize asset-based fees and variable fees in excess of any minimum once the value is fixed and determinable.

Some of our revenue arrangements combine multiple products and services. These products and services may be provided at different points in time or over different time periods within the same arrangement. We allocate fees to the separate deliverables based on the deliverables’ relative selling price, which is generally based on the price we charge when the same deliverable is sold separately.

We record taxes imposed on revenue-producing transactions (such as sales, use, value-added, and some excise taxes) on a net basis; therefore, we exclude such taxes from revenue in our Consolidated Statements of Income.

Deferred revenue represents the portion of licenses or subscriptions billed or collected in advance of the service being provided which we expect to recognize as revenue in future periods. Certain arrangements may have cancellation or refund provisions. If we make a refund, it typically reflects the amount collected from a customer for which we have not yet provided services. The refund therefore results in a reduction of deferred revenue.
Sales Commissions 
Sales Commissions. Through December 31, 2013, we paid sales commissions based on a formula driven by the total contract value of sales opportunities closed, with any subsequent adjustments (such as clawbacks for contract cancellations) reflected in future commission payouts. We considered the corresponding commission expense an incremental direct acquisition cost and treated it as a deferred charge, which we expensed over the term of the underlying sales contracts.

In the first quarter of 2014, we modified our sales incentive plan. The revised plan is based on a combination of net new sales and specific business objectives not solely tied to revenue growth. Because of this new structure and the discretion involved in determining the related incentives, we started expensing sales commissions as incurred instead of amortizing them over the contract terms.
However, we continued to amortize the deferred charge capitalized in connection with sales commissions paid in 2013 and previous periods as part of the previous incentive plan. This amortization added $0.6 million, $3.5 million, and $9.8 million of sales commission cost in 2016, 2015, and 2014, respectively.
Advertising Costs 
Advertising Costs. Advertising costs include expenses incurred for various print and Internet ads, search engine fees, and direct mail campaigns. We expense advertising costs as incurred.
Stock-Based Compensation Expense 

Stock-Based Compensation Expense. We account for our stock-based compensation expense in accordance with FASB ASC 718, Compensation—Stock Compensation. Our stock-based compensation expense reflects grants of restricted stock units, restricted stock, performance share awards, and stock options. We measure the fair value of our restricted stock units, restricted stock, and performance share awards on the date of grant based on the closing market price of Morningstar's common stock on the day prior to grant. For stock options, we estimate the fair value of our stock options on the date of grant using a Black-Scholes option-pricing model. We amortize the fair values to stock-based compensation expense, net of estimated forfeitures, ratably over the vesting period.

We estimate expected forfeitures of all employee stock-based awards and recognize compensation cost only for those awards expected to vest. We determine forfeiture rates based on historical experience and adjust the estimated forfeitures to actual forfeiture experience as needed.
Liability for Sabbatical Leave 

Liability for Sabbatical Leave. In some of our operations, we offer employees a sabbatical leave. Although the sabbatical policy varies by region, Morningstar's full-time employees are generally eligible for six weeks of paid time off after four years of continuous service. We account for our sabbatical liability in accordance with FASB ASC 710-10-25, Compensated Absences. We record a liability for employees' sabbatical benefits over the period employees earn the right for sabbatical leave and include this liability in Accrued Compensation in our Consolidated Balance Sheet.
Income Taxes 

Income Taxes. We record deferred income taxes for the temporary differences between the carrying amount of assets and liabilities for financial statement purposes and tax purposes in accordance with FASB ASC 740, Income Taxes. FASB ASC 740 prescribes the minimum recognition threshold a tax position is required to meet before being recognized in the financial statements. It also provides guidance on derecognition, measurement, classification, interest and penalties, accounting in interim periods, and disclosure for uncertain tax positions.

We recognize interest and penalties related to unrecognized tax benefits as part of income tax expense in our Consolidated Statements of Income. We classify liabilities related to unrecognized tax benefits as either current or long-term liabilities in our Consolidated Balance Sheet, depending on when we expect to make payment.
Fair Value Measurements 
Fair Value Measurements. We follow FASB ASC 820, Fair Value Measurements. FASB ASC 820 defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. Under FASB ASC 820, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. The standard applies whenever other standards require (or permit) assets or liabilities to be measured at fair value. The standard does not expand the use of fair value in any new circumstances and does not require any new fair value measurements.

FASB ASC 820 uses a fair value hierarchy based on three broad levels of valuation inputs:

•
Level 1: Valuations based on quoted prices in active markets for identical assets or liabilities that the company has 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.

We provide additional information about our cash equivalents and investments that are subject to valuation under FASB ASC 820 in Note 6.

We classify our investments into three categories: available-for-sale, held-to-maturity, and trading. 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.
Segment 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 a single reportable segment, all required financial segment information can be found directly in the Consolidated Financial Statements.

The accounting policies for our reportable segment are the same as those described in Note 2. We evaluate the performance of our reporting segment based on revenue and operating income.
Summary of Significant Accounting Policies (Tables)
Summary of Acronyms Used 
The acronyms that appear in these Notes to our Consolidated Financial Statements refer to the following:
ASC
Accounting Standards Codification
ASU
Accounting Standards Update
EITF
Emerging Issues Task Force
FASB
Financial Accounting Standards Board
SEC
Securities and Exchange Commission
Summary of Depreciation for Internally Developed Software 
The table below summarizes our depreciation expense related to internally developed software for the past three years:
(in millions)
 
2016

 
2015

 
2014

Internally developed software depreciation expense
 
$
20.0

 
$
13.0

 
$
5.9

Summary of Capitalized Software Development Costs 
The table below summarizes our capitalized software development costs for the past three years:
(in millions)
 
2016

 
2015

 
2014

Capitalized software development costs
 
$
28.2

 
$
21.8

 
$
18.8

Summary of Advertising Expense 
The table below summarizes our advertising expense for the past three years:
(in millions)
 
2016

 
2015

 
2014

Advertising expense
 
$
7.6

 
$
8.3

 
$
7.5



Income Per Share (Tables)
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 income per share:

(in millions, except per share amounts)
 
2016

 
2015

 
2014

 
 
 
 
 
 
 
Basic net income per share attributable to Morningstar, Inc.:
 
 
 
 
 
 
Net income attributable to Morningstar, Inc.
 
$
161.0

 
$
132.6

 
$
78.3

 
 
 
 
 
 
 
Weighted average common shares outstanding
 
43.0

 
44.2

 
44.7

 
 
 
 
 
 
 
Basic net income per share attributable to Morningstar, Inc.
 
$
3.74

 
$
3.00

 
$
1.75

 
 
 
 
 
 
 
Diluted net income per share attributable to Morningstar, Inc.:
 
 
 
 
 
 
Net income attributable to Morningstar, Inc.
 
$
161.0

 
$
132.6

 
$
78.3

 
 


 


 
 
Weighted average common shares outstanding
 
43.0

 
44.2

 
44.7

Net effect of dilutive stock options and restricted stock units
 
0.3

 
0.1

 
0.2

Weighted average common shares outstanding for computing diluted income per share
 
43.3

 
44.3

 
44.9

 
 


 


 
 
Diluted net income per share attributable to Morningstar, Inc.
 
$
3.72

 
$
3.00

 
$
1.74

 
 
 
 
 
 
 

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block] 
The following table shows the number of weighted average restricted stock units and performance share awards excluded from our calculation of diluted earnings per share because their inclusion would have been anti-dilutive:
(in thousands)
 
2016

 
2015

 
2014

Weighted average restricted stock units
 
13

 
38

 
47

Weighted average performance share awards
 
—

 
4

 
6

Total
 
13

 
42

 
53

Segment and Geographical Area Information (Tables)
Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas
The tables below summarize our revenue and long-lived assets by geographical area:

External revenue by geographical area
 
 
 
 
 
 
 
 
Year ended December 31
(in millions)
 
2016

 
2015

 
2014

United States
 
$
590.5

 
$
585.1

 
$
550.8

 
 
 
 
 
 
 
United Kingdom
 
61.1

 
64.2

 
61.8

Continental Europe
 
62.6

 
58.8

 
62.7

Australia
 
32.2

 
30.5

 
35.0

Canada
 
28.2

 
27.9

 
30.8

Asia
 
20.0

 
18.5

 
15.8

Other
 
4.0

 
3.8

 
3.2

Total International
 
208.1

 
203.7

 
209.3

 
 
 
 
 
 
 
Consolidated revenue
 
$
798.6

 
$
788.8

 
$
760.1


Long-lived assets by geographical area
 
 
 
 
 
 
As of December 31
(in millions)
 
2016

 
2015

United States
 
$
139.1

 
$
116.9

 
 
 
 
 
United Kingdom
 
6.6

 
8.6

Continental Europe
 
1.9

 
2.2

Australia
 
0.6

 
0.9

Canada
 
0.4

 
0.7

Asia
 
3.4

 
5.2

Other
 
0.1

 
—

Total International
 
13.0

 
17.6

 
 
 
 
 
Consolidated property, equipment, and capitalized software, net
 
$
152.1

 
$
134.5

Investments and Fair Value Measurements (Tables)
Schedule of Investments 
We classify our investment portfolio as shown below:
 
 
 
As of December 31
 
 
(in millions)
 
2016

 
2015

Available-for-sale
 
$
27.7

 
$
17.3

Held-to-maturity
 
15.7

 
15.3

Trading securities
 
1.5

 
8.9

Total
 
$
44.9

 
$
41.5

Unrealized Gain (Loss) on Investments 
The following table shows the cost, unrealized gains (losses), and fair values related to investments classified as available-for-sale and held-to-maturity:
 
 
 
As of December 31, 2016
 
As of December 31, 2015
(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
 
$
25.6

 
$
1.3

 
$
(1.5
)
 
$
25.4

 
$
17.4

 
$
0.3

 
$
(1.6
)
 
$
16.1

Mutual funds
 
2.2

 
0.1

 
—

 
2.3

 
1.3

 
—

 
(0.1
)
 
1.2

Total
 
$
27.8

 
$
1.4

 
$
(1.5
)
 
$
27.7

 
$
18.7

 
$
0.3

 
$
(1.7
)
 
$
17.3

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Held-to-maturity:
 
 
 
 
 
 
 
 
 
 

 
 

 
 

 
 

Certificates of deposit
 
$
13.8

 
$
—

 
$
—

 
$
13.8

 
$
15.3

 
$
—

 
$
—

 
$
15.3

Convertible note
 
1.9

 
—

 
—

 
1.9

 
—

 
—

 
—

 
—

Total
 
$
15.7

 
$
—

 
$
—

 
$
15.7

 
$
15.3

 
$
—

 
$
—

 
$
15.3

Investments Classified by Contractual Maturity Date 
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 December 31, 2016 and December 31, 2015.

 
 
As of December 31, 2016
 
As of December 31, 2015
(in millions)
 
Cost

 
Fair Value

 
Cost

 
Fair Value

Available-for-sale:
 
 

 
 

 
 

 
 

Equity securities, exchange-traded funds, and mutual funds
 
$
27.8

 
$
27.7

 
$
18.7

 
$
17.3

Total
 
$
27.8

 
$
27.7

 
$
18.7

 
$
17.3

 
 
 
 
 
 
 
 
 
Held-to-maturity:
 
 

 
 

 
 

 
 

Due in one year or less
 
$
13.8

 
$
13.8

 
$
15.3

 
$
15.3

Due in one to three years
 
1.9

 
1.9

 
—

 
—

Total
 
$
15.7

 
$
15.7

 
$
15.3

 
$
15.3

Schedule of Realized Gain (Loss) 
The following table shows the realized gains and losses arising from sales of our investments classified as available-for-sale recorded in our Consolidated Statements of Income: 
(in millions)
 
2016

 
2015

 
2014

Realized gains
 
$
1.6

 
$
1.3

 
$
1.5

Realized losses
 
(1.0
)
 
(0.7
)
 
(0.5
)
Realized gains, net
 
$
0.6

 
$
0.6

 
$
1.0

Unrealized Gain Loss On Trading Securities 
The following table shows the net unrealized losses on trading securities as recorded in our Consolidated Statements of Income:
 
(in millions)
 
2016

 
2015

 
2014

Unrealized losses, net
 
$
—

 
$
(0.8
)
 
$
(0.2
)
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 a fair value hierarchy:
 
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.

 
 
Fair Value
 
Fair Value Measurements as of December 31, 2016
 
 
as of
 
Using Fair Value Hierarchy
(in millions)
 
December 31, 2016
 
Level 1

 
Level 2

 
Level 3

Available-for-sale investments
 
 

 
 

 
 

 
 

Equity securities and exchange-traded funds
 
$
25.4

 
$
25.4

 
$
—

 
$
—

Mutual funds
 
2.3

 
2.3

 
—

 
—

Trading securities
 
1.5

 
1.5

 
—

 
—

Cash equivalents
 
0.2

 
0.2

 
—

 
—

Total
 
$
29.4

 
$
29.4

 
$
—

 
$
—

 
 
 
Fair Value
 
Fair Value Measurements as of December 31, 2015
 
 
as of
 
Using Fair Value Hierarchy
(in millions)
 
December 31, 2015
 
Level 1

 
Level 2

 
Level 3

Available-for-sale investments
 
 

 
 

 
 

 
 

Equity securities and exchange-traded funds
 
$
16.1

 
$
16.1

 
$
—

 
$
—

Mutual funds
 
1.2

 
1.2

 
—

 
—

Trading securities
 
8.9

 
8.9

 
—

 
—

Cash equivalents
 
0.2

 
0.2

 
—

 
—

Total
 
$
26.4

 
$
26.4

 
$
—

 
$
—

Acquisitions, Goodwill, and Other Intangible Assets (Tables)
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed 
The following table summarizes our preliminary allocation of the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition, all of which are preliminary pending completion of the final valuation:
 
 
(in millions)

Cash and cash equivalents
 
$
12.4

Accounts receivable
 
10.8

Other current and non-current assets
 
3.5

Intangible assets
 
60.7

Goodwill
 
193.6

Deferred revenue
 
(22.4
)
Deferred tax liability, net
 
(12.8
)
Other current and non-current liabilities
 
(10.7
)
Total fair value of PitchBook
 
$
235.1

The following table summarizes our allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed at the date of the acquisition:
 
 
(in millions)

Cash and cash equivalents
 
$
0.3

Accounts receivable and other current assets
 
0.1

Deferred tax asset
 
4.0

Other current and non-current assets
 
0.3

Intangible assets
 
8.7

Goodwill
 
18.5

Deferred revenue
 
(0.1
)
Deferred tax liability
 
(3.3
)
Other current and non-current liabilities
 
(0.6
)
Total purchase price
 
$
27.9

The following table summarizes our allocation of the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition:
 
 
(in millions)

Cash and cash equivalents
 
$
3.7

Accounts receivable and other current assets
 
0.2

Other current and non-current assets
 
0.3

Deferred tax asset
 
8.6

Intangible assets
 
9.5

Goodwill
 
39.2

Deferred revenue
 
(2.9
)
Deferred tax liability
 
(3.6
)
Other current and non-current liabilities
 
(1.0
)
Total fair value of HelloWallet
 
$
54.0

Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination 
The allocation includes $8.7 million of acquired intangible assets, as follows:

 
 
(in millions)

 
Weighted Average Useful Life (years)
Customer-related assets
 
$
5.5

 
24
Technology-based assets
 
3.0

 
4.5
Intellectual property (trademarks and trade names)
 
0.1

 
1
Non-competition agreement
 
0.1

 
3
Total intangible assets
 
$
8.7

 
19
The preliminary allocation includes $60.7 million of acquired intangible assets, as follows:
 
 
(in millions)

 
Weighted Average Useful Life (years)
Customer-related assets
 
$
17.1

 
10
Technology-based assets
 
40.8

 
5
Intellectual property (trademarks and trade names)
 
2.8

 
4
Total intangible assets
 
$
60.7

 
6
The allocation includes $9.5 million of acquired intangible assets, as follows:
 
 
(in millions)

 
Weighted Average Useful Life (years)
Technology-based assets
 
$
6.7

 
5
Intellectual property (trademarks and trade names)
 
0.2

 
3
Non-competition agreement
 
2.6

 
5
Total intangible assets
 
$
9.5

 
5
Pro Forma Information 
Unaudited Pro Forma Financial Information (in millions)
 
2016

 
2015

Revenue
 
$
834.1

 
$
813.3

Operating income
 
$
157.7

 
$
170.0

Net income
 
$
105.5

 
$
117.1

 
 
 
 
 
Basic net income per share attributable to Morningstar, Inc.
 
$
2.45

 
$
2.65

Diluted net income per share attributable to Morningstar, Inc.
 
$
2.44

 
$
2.65

Schedule of Goodwill 
The following table shows the changes in our goodwill balances from January 1, 2015 to December 31, 2016:
 
 
 
(in millions)

Balance as of January 1, 2015
 
$
370.1

Other, primarily foreign currency translation
 
(5.9
)
Balance as of December 31, 2015
 
$
364.2

Acquisition of PitchBook
 
193.6

Other acquisitions and foreign currency translation
 
(1.0
)
Balance as of December 31, 2016
 
$
556.8

Schedule of Intangible Assets 
The following table summarizes our intangible assets: 
 
 
As of December 31, 2016
 
As of December 31, 2015
(in millions)
 
Gross

 
Accumulated
Amortization

 
Net

 
Weighted
Average
Useful  Life
(years)
 
Gross

 
Accumulated
Amortization

 
Net

 
Weighted
Average
Useful  Life
(years)
Intellectual property
 
$
30.9

 
$
(27.4
)
 
$
3.5

 
9
 
$
28.3

 
$
(26.7
)
 
$
1.6

 
9
Customer-related assets
 
152.0

 
(97.7
)
 
54.3

 
12
 
137.5

 
(92.3
)
 
45.2

 
12
Supplier relationships
 
0.2

 
(0.1
)
 
0.1

 
20
 
0.2

 
(0.1
)
 
0.1

 
20
Technology-based assets
 
133.2

 
(72.1
)
 
61.1

 
7
 
89.5

 
(64.4
)
 
25.1

 
8
Non-competition agreements
 
5.0

 
(3.1
)
 
1.9

 
5
 
4.6

 
(2.4
)
 
2.2

 
5
Total intangible assets
 
$
321.3

 
$
(200.4
)
 
$
120.9

 
10
 
$
260.1

 
$
(185.9
)
 
$
74.2

 
10
Schedule of Intangible Asset, Amortization Expense 
 
The following table summarizes our amortization expense related to intangible assets:
(in millions)
 
2016

 
2015

 
2014

Amortization expense
 
$
19.4

 
$
22.0

 
$
22.3

Schedule of Expected Amortization Expense 
Based on acquisitions and divestitures completed through December 31, 2016, we expect intangible amortization expense for 2017 and subsequent years to be as follows:
 
 
(in millions)

2017
 
$
24.4

2018
 
22.3

2019
 
19.8

2020
 
16.1

2021
 
12.8

Thereafter
 
25.5

Investments in Unconsolidated Entities (Tables)
Schedule of Equity Method And Cost Method Investments 
Our investments in unconsolidated entities consist primarily of the following:
 
 
 
As of December 31
 
 
(in millions)
 
2016

 
2015

Investment in MJKK
 
$
25.1

 
$
24.3

Other-equity method investments
 
13.5

 
3.7

Investments accounted for using the cost method
 
1.7

 
7.6

Total investments in unconsolidated entities
 
$
40.3

 
$
35.6

Schedule of Equity Method Investments 
The following table summarizes our ownership percentage in MJKK and the market value of this investment based on MJKK’s publicly quoted share price: 
 
 
As of December 31
 
 
 
 
2016

 
2015

Morningstar’s approximate ownership of MJKK
 
34
%
 
34
%
Approximate market value of Morningstar’s ownership in MJKK:
 
 

 
 

Japanese yen (¥ in millions)
 
¥
8,558.2

 
¥
8,200.5

Equivalent U.S. dollars ($ in millions)
 
$
73.2

 
$
68.1

Property, Equipment, and Capitalized Software (Tables)
Schedule of Property, Equipment, and Capitalized Software by Major Category 
The following table shows our property, equipment, and capitalized software summarized by major category:

 
 
As of December 31
 
 
(in millions)
 
2016

 
2015

Computer equipment
 
$
70.1

 
$
60.3

Capitalized software
 
189.8

 
144.0

Furniture and fixtures
 
26.0

 
24.3

Leasehold improvements
 
69.0

 
61.9

Telephone equipment
 
2.1

 
2.1

Construction in progress
 
9.9

 
11.7

Property, equipment, and capitalized software, at cost
 
366.9

 
304.3

Less accumulated depreciation
 
(214.8
)
 
(169.8
)
Property, equipment, and capitalized software, net
 
$
152.1

 
$
134.5



Summary of Depreciation Expense 
The following table summarizes our depreciation expense:
(in millions)
 
2016

 
2015

 
2014

Depreciation expense
 
$
51.3

 
$
42.4

 
$
32.6

Operating Leases Operating Leases (Tables)
Schedule of Minimum Future Rental Commitments 
The following table shows our minimum future rental commitments due in each of the next five years and thereafter for all non-cancelable operating leases, consisting primarily of commitments for office space:
Minimum Future Rental Commitments
 
(in millions)

2017
 
$
23.9

2018
 
22.0

2019
 
17.9

2020
 
17.5

2021
 
16.0

Thereafter
 
27.4

Total
 
$
124.7


Schedule of Rent Expense 
The following table summarizes our rent expense, including taxes, insurance, and related operating costs:

(in millions)
 
2016

 
2015

 
2014

Rent expense
 
$
26.3

 
$
27.1

 
$
24.5

Schedule of Deferred Rent 
Deferred rent includes build-out and rent abatement allowances received, which are amortized over the remaining portion of the original term of the lease as a reduction in office lease expense. We include deferred rent, as appropriate, in “Accounts payable and accrued liabilities” and “Deferred rent, noncurrent” on our Consolidated Balance Sheets.
 
 
As of December 31
 
 
(in millions)
 
2016

 
2015

Deferred rent
 
$
28.4

 
$
28.5

Stock-Based Compensation (Tables)
Schedule of Shares Available for Future Grants 
The following table summarizes the number of shares available for future grants under our 2011 Plan:
 
 
As of December 31
(in millions)
 
2016

Shares available for future grants
 
3.7

Schedule of Stock-Based Compensation Expense 
The following table summarizes our stock-based compensation expense and the related income tax benefit we recorded in the past three years:
 
 
Year ended December 31
(in millions)
 
2016

 
2015

 
2014

Restricted stock units
 
$
14.6

 
$
16.1

 
$
16.3

Restricted stock
 
—

 
0.1

 
0.4

Performance share awards
 
(0.1
)
 
1.0

 
0.5

Stock options
 
—

 
0.2

 
0.4

Total stock-based compensation expense
 
$
14.5

 
$
17.4

 
$
17.6

 
 
 
 
 
 
 
Income tax benefit related to the stock-based compensation expense
 
$
4.3

 
$
5.0

 
$
5.1

Allocation of Stock-based Compensation Expense 
The following table summarizes the stock-based compensation expense included in each of our operating expense categories for the past three years:
 
 
Year ended December 31
(in millions)
 
2016

 
2015

 
2014

Cost of revenue
 
$
7.5

 
$
8.1

 
$
7.8

Sales and marketing
 
1.9

 
2.2

 
2.1

General and administrative
 
5.1

 
7.1

 
7.7

Total stock-based compensation expense
 
$
14.5

 
$
17.4

 
$
17.6

Schedule of Uncategorized Stock-Based Compensation Expense 
The following table summarizes the amount of unrecognized stock-based compensation expense as of December 31, 2016 and the expected number of months over which the expense will be recognized:
 
 
Unrecognized stock-based compensation expense (in millions)

 
Weighted average expected amortization period (months)
Restricted stock units
 
$
31.4

 
33
Performance share awards
 
6.2

 
12
Total unrecognized stock-based compensation expense
 
$
37.6

 
29
Schedule of Restricted Stock Units Award Activity 
The following table summarizes restricted stock unit activity during the past three years:
Restricted Stock Units (RSUs)
 
Unvested

 
Vested but
Deferred

 
Total

 
Weighted
Average
Grant Date Value
per RSU

RSUs Outstanding - December 31, 2013
 
680,002

 
16,682

 
696,684

 
$
62.02

Granted
 
279,524

 
—

 
279,524

 
72.68

Dividend equivalents
 
2,621

 
150

 
2,771

 
55.70

Vested
 
(268,115
)
 
—

 
(268,115
)
 
58.91

Issued
 
—

 
(2,054
)
 
(2,054
)
 
53.54

Forfeited
 
(38,098
)
 
—

 
(38,098
)
 
65.21

RSUs Outstanding - December 31, 2014
 
655,934

 
14,778

 
670,712

 
$
67.51

Granted
 
235,213

 
—

 
235,213

 
77.17

Dividend equivalents
 
1,409

 
146

 
1,555

 
56.42

Vested
 
(253,038
)
 
—

 
(253,038
)
 
64.65

Forfeited
 
(66,992
)
 
—

 
(66,992
)
 
53.61

RSUs Outstanding - December 31, 2015
 
572,526

 
14,924

 
587,450

 
$
72.14

Granted
 
241,609

 
—

 
241,609

 
77.82

Dividend equivalents
 
370

 
136

 
506

 
56.52

Vested
 
(225,590
)
 
—

 
(225,590
)
 
69.39

Issued
 
—

 
(5,312
)
 
(5,312
)
 
44.47

Forfeited
 
(47,670
)
 
—

 
(47,670
)
 
74.45

RSUs Outstanding - December 31, 2016
 
541,245

 
9,748

 
550,993

 
$
75.77

Schedule of Share-based Compensation Arrangement by Share-based Payment Award, Performance-Based Units, Vested and Expected to Vest [Table Text Block] 
The table below shows target performance share awards granted and shares that would be issued at current performance levels for performance share awards granted as of December 31, 2016:
 
 
As of December 31, 2016

Target performance share awards granted
 
117,386

Weighted average fair value per award
 
$
78.23

Number of shares that would be issued based on current performance levels
 
1,287

Unamortized expense, based on current performance levels (in millions)
 
$
(0.7
)

PitchBook Bonus Plan
In connection with our acquisition of PitchBook, we adopted a management bonus sub-plan under the 2011 Plan for certain employees of PitchBook (the PitchBook Plan). Pursuant to the terms of the PitchBook Plan, awards having an aggregate target value equal to $30.0 million will be available for issuance with annual grants of $7.5 million for 2017, $7.5 million in 2018, and $15.0 million in 2019.

Each grant will consist of performance-based share unit awards which will vest over a one-year period and will be measured primarily based on the achievement of certain annual revenue targets specifically related to PitchBook’s business. Upon achievement of these targets, earned performance units will be settled in shares of our common stock on a one-for-one basis. If PitchBook exceeds certain performance conditions, the PitchBook Plan participants may receive payment for performance units in excess of the aggregate target values described above. If PitchBook fails to meet threshold performance conditions, the PitchBook Plan participants will not be entitled to receive payment for any performance units. In certain circumstances, the PitchBook Plan participants may be able to receive a catch-up award with respect to 2017 or 2018 if certain additional performance conditions are met in a subsequent year.

The table below shows target performance share awards granted and shares that would be issued at current performance levels for performance share awards granted as of December 31, 2016:
 
 
As of December 31, 2016

Target performance share awards granted
 
100,924

Weighted average fair value per award
 
$
74.31

Number of shares that would be issued based on current performance levels
 
100,924

Unamortized expense, based on current performance levels (in millions)
 
$
6.9

Schedule of Stock Options, Valuation Assumptions 
In May 2011, we granted 86,106 stock options under the 2004 Stock Incentive Plan. In November 2011, we granted 6,095 stock options under the 2011 Plan. All options granted in 2011 have an exercise price equal to the fair market value on the grant date. We estimated the fair value of the options on the grant date using a Black-Scholes option-pricing model. The weighted average fair value of options granted during 2011 was $23.81 per share, based on the following assumptions:

Assumptions for Black-Scholes Option Pricing Model
 
 
Expected life (years):
 
7.4

Volatility factor:
 
35.1
%
Dividend yield:
 
0.35
%
Interest rate:
 
2.87
%
Schedule of Options Granted at Exercise Price Below Fair Value per Share on Grant Date 
The first table includes activity for options granted at an exercise price below the fair value per share of our common stock on the grant date; the second table includes activity for all other option grants.

 
 
2016
 
 
 
2015
 
 
 
2014
 
 
Options Granted At an Exercise Price Below the Fair Value Per Share on the Grant Date
 
Underlying
Shares

 
Weighted
Average
Exercise
Price

 
Underlying
Shares

 
Weighted
Average
Exercise
Price

 
Underlying
Shares

 
Weighted
Average
Exercise
Price

Options outstanding—beginning of year
 
—

 
$
—

 
—

 
$
—

 
179,559

 
$
21.47

Granted
 
—

 
—

 
—

 
—

 
—

 
—

Canceled
 
—

 
—

 
—

 
—

 
(150
)
 
22.24

Exercised
 
—

 
—

 
—

 
—

 
(179,409
)
 
22.08

Options outstanding—end of year
 
—

 
$
—

 
—

 
$
—

 
—

 
$
—

 
 
 
 
 
 
 
 
 
 
 
 
 
Options exercisable—end of year
 
—

 
$
—

 
—

 
$
—

 
—

 
$
—

Schedule of All Other Option Granted 
 
 
2016
 
 
 
2015
 
 
 
2014
 
 
All Other Option Grants, Excluding Activity Shown Above
 
Underlying
Shares

 
Weighted
Average
Exercise
Price

 
Underlying
Shares

 
Weighted
Average
Exercise
Price

 
Underlying
Shares

 
Weighted
Average
Exercise
Price

Options outstanding—beginning of year
 
52,096

 
$
57.52

 
169,810

 
$
40.20

 
253,972

 
$
36.48

Granted
 
—

 
—

 
—

 
—

 
—

 
—

Canceled
 
—

 
—

 
—

 
—

 
(526
)
 
38.61

Exercised
 
(6,095
)
 
59.35

 
(117,714
)
 
32.91

 
(83,636
)
 
30.82

Options outstanding—end of year
 
46,001

 
$
57.28

 
52,096

 
$
57.52

 
169,810

 
$
40.20

 
 
 
 
 
 
 
 
 
 
 
 
 
Options exercisable—end of year
 
46,001

 
$
57.28

 
52,096

 
$
57.52

 
154,864

 
$
38.53

Schedule of Intrinsic Value of Stock Options Exercised During Period 
The following table summarizes the total intrinsic value (difference between the market value of our stock on the date of exercise and the exercise price of the option) of options exercised:
(in millions)
 
2016

 
2015

 
2014

Intrinsic value of options exercised
 
$
0.1

 
$
5.1

 
$
12.0

Schedule of Options, Vested and Expected to Vest, Outstanding and Exercisable 
The table below shows additional information for options outstanding and exercisable as of December 31, 2016:
 
 
 
Options Outstanding
 
Options Exercisable
Range of Exercise Prices
 
Number of  Options

 
Weighted
Average
Remaining
Contractual
Life (years)
 
Weighted
Average
Exercise
Price

 
Aggregate
Intrinsic
Value
(in millions)

 
Exercisable Shares

 
Weighted Average Remaining Contractual Life (years)
 
Weighted Average Exercise Price

 
Aggregate
Intrinsic
Value
(in millions)

$57.28
 
46,001

 
4.37
 
$
57.28

 
$
0.7

 
46,001

 
4.37
 
$
57.28

 
$
0.7

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Vested or Expected to Vest
 
 
 
 
 
 
 
 
 
 
 
 
 
$57.28
 
46,001

 
4.37
 
$
57.28

 
$
0.7

 
 
 
 
 
 
 
 
Defined Contribution Plan (Tables)
Schedule of Defined Contribution Plan, Employer Matching Contributions
The following table summarizes our matching contributions:
(in millions)
 
2016

 
2015

 
2014

401(k) matching contributions
 
$
9.0

 
$
8.3

 
$
7.5



Income Taxes (Tables)
Schedule of Income Tax Expense and Effective Tax Rate 
The following table shows our income tax expense and our effective tax rate for the years ended December 31, 2016, 2015, and 2014:

(in millions)
 
2016

 
2015

 
2014

Income before income taxes and equity in net income (loss) of unconsolidated entities
 
$
224.9

 
$
193.7

 
$
114.0

Equity in net income (loss) of unconsolidated entities
 
(0.2
)
 
1.8

 
—

Net income attributable to the noncontrolling interest
 
—

 
(0.2
)
 
—

Total
 
$
224.7

 
$
195.3

 
$
114.0

Income tax expense
 
$
63.7

 
$
62.7

 
$
35.7

Effective tax rate
 
28.3
%
 
32.1
%
 
31.3
%
Schedule of Effective Income Tax Rate Reconciliation 
The following table reconciles our income tax expense at the U.S. federal income tax rate of 35% to income tax expense as recorded:

 
 
2016
 
 
 
2015
 
 
 
2014
 
 
(in millions, except percentages)
 
Amount

 
%

 
Amount

 
%

 
Amount

 
%

Income tax expense at U.S. federal rate
 
$
78.6

 
35.0
 %
 
$
68.4

 
35.0
 %
 
$
39.9

 
35.0
 %
State income taxes, net of federal income tax benefit
 
4.5

 
2.0

 
6.6

 
3.4

 
2.1

 
1.9

Stock-based compensation activity
 
(0.6
)
 
(0.3
)
 
0.4

 
0.2

 
0.1

 
0.1

Holding gain upon acquisition of additional ownership of equity method investments
 
(12.1
)
 
(5.4
)
 
—

 
—

 
(1.4
)
 
(1.2
)
Net change in valuation allowance related to non-U.S. deferred tax assets, primarily net operating losses
 
(0.1
)
 
—

 
(2.0
)
 
(1.0
)
 
(0.6
)
 
(0.5
)
Difference between U.S. federal statutory and foreign tax rates
 
(5.3
)
 
(2.4
)
 
(4.4
)
 
(2.3
)
 
(4.0
)
 
(3.5
)
Change in unrecognized tax benefits
 
2.6

 
1.2

 
(1.4
)
 
(0.7
)
 
1.5

 
1.3

Credits and incentives
 
(3.7
)
 
(1.6
)
 
(5.1
)
 
(2.6
)
 
(2.9
)
 
(2.6
)
Recognition of deferred tax assets
 
—

 
—

 
—

 
—

 
(0.1
)
 
(0.1
)
Other - net
 
(0.2
)
 
(0.1
)
 
0.2

 
0.1

 
1.1

 
0.9

Total income tax expense
 
$
63.7

 
28.3
 %
 
$
62.7

 
32.1
 %
 
$
35.7

 
31.3
 %
Schedule of Components of Income Tax Expense 
Income tax expense consists of the following:

 
 
Year ended December 31
(in millions)
 
2016

 
2015

 
2014

Current tax expense:
 
 
 
 
 
 
U.S.
 
 
 
 
 
 
Federal
 
$
42.8

 
$
42.8

 
$
20.8

State
 
6.5

 
8.3

 
2.0

Non-U.S.
 
9.7

 
8.7

 
9.6

Current tax expense
 
59.0

 
59.8

 
32.4

Deferred tax expense (benefit):
 
 
 
 
 
 
U.S.
 
 
 
 
 
 
Federal
 
5.1

 
4.3

 
3.7

State
 
0.4

 
1.8

 
1.3

Non-U.S.
 
(0.8
)
 
(3.2
)
 
(1.7
)
Deferred tax expense, net
 
4.7

 
2.9

 
3.3

Income tax expense
 
$
63.7

 
$
62.7

 
$
35.7

Schedule of Income before Income Tax 
The following table provides our income before income taxes and equity in net income (loss) of unconsolidated entities, generated by our U.S. and non-U.S. operations:

 
 
Year ended December 31
(in millions)
 
2016

 
2015

 
2014

U.S.
 
$
186.5

 
$
160.6

 
$
80.4

Non-U.S.
 
38.4

 
33.1

 
33.6

Income before income taxes and equity in net income (loss) of unconsolidated entities
 
$
224.9

 
$
193.7

 
$
114.0

Schedule of Deferred Tax Assets and Liabilities 
The tax effects of the temporary differences that give rise to the deferred income tax assets and liabilities are as follows:

 
 
As of December 31
 
 
(in millions)
 
2016

 
2015

Deferred tax assets:
 
 
 
 
Stock-based compensation expense
 
$
2.6

 
$
3.1

Accrued liabilities
 
19.0

 
14.3

Deferred revenue
 
5.1

 
0.9

Net operating loss carryforwards - U.S. federal and state
 
12.9

 
7.6

Net operating loss carryforwards - Non-U.S.
 
3.0

 
3.7

Credits and incentive carryforwards
 
0.6

 
0.6

Deferred royalty revenue
 
0.3

 
0.3

Allowance for doubtful accounts
 
1.2

 
1.0

Deferred rent
 
10.3

 
8.9

Unrealized exchange losses, net
 
—

 
0.4

Total deferred tax assets
 
55.0

 
40.8

 
 
 
 
 
Deferred tax liabilities:
 
 
 
 
Acquired intangible assets
 
(34.3
)
 
(13.2
)
Property, equipment, and capitalized software
 
(37.6
)
 
(28.1
)
Unrealized exchange gains, net
 
(0.1
)
 
—

Prepaid expenses
 
(5.3
)
 
(4.3
)
Investments in unconsolidated entities
 
(14.0
)
 
(13.7
)
Other
 
(0.3
)
 
(0.1
)
Total deferred tax liabilities
 
(91.6
)
 
(59.4
)
Net deferred tax liability before valuation allowance
 
(36.6
)
 
(18.6
)
Valuation allowance
 
(1.6
)
 
(1.2
)
Deferred tax liability, net
 
$
(38.2
)
 
$
(19.8
)
Schedule of Deferred Tax Assets and Liabilities Included in Consolidated Balance Sheets 
The deferred tax assets and liabilities are presented in our Consolidated Balance Sheets as follows:

 
 
As of December 31
 
 
(in millions)
 
2016

 
2015

Deferred tax liability, net
 
$
(38.2
)
 
$
(19.8
)
Schedule of Gross Unrecognized Tax Benefits 

The table below reconciles the beginning and ending amount of the gross unrecognized tax benefits as follows:

(in millions)
 
2016

 
2015

Gross unrecognized tax benefits - beginning of the year
 
$
14.5

 
$
11.9

Increases as a result of tax positions taken during a prior-year period
 
2.2

 
4.4

Decreases as a result of tax positions taken during a prior-year period
 
(0.1
)
 
(0.7
)
Increases as a result of tax positions taken during the current period
 
2.4

 
2.4

Decreases relating to settlements with tax authorities
 
—

 
(1.8
)
Reductions as a result of lapse of the applicable statute of limitations
 
(0.6
)
 
(1.7
)
Gross unrecognized tax benefits - end of the year
 
$
18.4

 
$
14.5



Summary of Income Tax Examinations 
 The following table summarizes our gross liability for interest and penalties:

 
 
As of December 31
 
 
(in millions)
 
2016

 
2015

Liabilities for interest and penalties
 
$
1.6

 
$
1.2

Summary of Operating Loss Carryforwards 
The following table summarizes our U.S. net operating loss (NOL) carryforwards:

 
 
As of December 31
 
 
 
(in millions)
 
 
2016
 
 
2015
 
 
 
Expiration Dates
 
 
Expiration Dates
U.S. federal NOLs subject to expiration dates
 
$
36.9

2023-2036
 
$
21.6

2023-2034
Summary of Operating Loss Carryforwards 
he following table summarizes our NOL carryforwards for our non-U.S. operations:

 
 
As of December 31
 
 
(in millions)
 
2016

 
2015

Non-U.S. NOLs subject to expiration dates from 2019 through 2036
 
$
3.8

 
$
2.9

Non-U.S. NOLs with no expiration date
 
10.8

 
15.5

Total
 
$
14.6

 
$
18.4

 
 
 
 
 
Non-U.S. NOLs not subject to valuation allowances
 
$
6.8

 
$
12.1

Selected Quarterly Financial Data (Tables)
Schedule of Quarterly Financial Data
 
 
2015

 
 
 
 
 
 
 
2016

 
 
 
 
 
 
 
(in millions except per share amounts)
 
Q1

 
Q2

 
Q3

 
Q4

 
Q1

 
Q2

 
Q3

 
Q4

 
Revenue
 
$
189.8

 
$
202.1

 
$
195.3

 
$
201.6

 
$
192.1

 
$
198.2

 
$
196.1

 
$
212.2

 
Total operating expense
 
145.3

 
152.4

 
149.1

 
151.5

 
149.8

 
153.8

 
151.9

 
162.3

 
Operating income
 
44.5

 
49.7

 
46.2

 
50.1

 
42.3

 
44.4

 
44.2

 
49.9

 
Non-operating income (expense), net
 
(0.4
)
 
0.6

 
1.4

 
1.4

 
0.5

 
3.0

 
2.1

 
38.5

(1)
Income before income taxes and equity in net income (loss) of unconsolidated entities
 
44.1

 
50.3

 
47.6

 
51.5

 
42.8

 
47.4

 
46.3

 
88.4

 
Equity in net income (loss) of unconsolidated entities
 
0.5

 
0.6

 
0.5

 
0.3

 
0.5

 
(0.2
)
 
0.4

 
(0.9
)
 
Income tax expense
 
14.8

 
18.7

 
14.6

 
14.5

 
14.6

 
15.4

 
16.5

 
17.2

 
Consolidated net income
 
29.8

 
32.2

 
33.5

 
37.3

 
28.7

 
31.8

 
30.2

 
70.3

 
Net income attributable to the noncontrolling interests
 
(0.1
)
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
Net income attributable to Morningstar, Inc.
 
$
29.7

 
$
32.2

 
$
33.5

 
$
37.3

 
$
28.7

 
$
31.8

 
$
30.2

 
$
70.3

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income per share attributable to Morningstar, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
 
$
0.67

 
$
0.73

 
$
0.76

 
$
0.85

 
$
0.67

 
$
0.74

 
$
0.70

 
$
1.63

 
Diluted

$
0.67


$
0.72


$
0.76


$
0.85


$
0.67


$
0.73


$
0.70


$
1.63

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Dividends per common share:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Dividends declared per common share
 
$
0.19

 
$
0.19

 
$
0.19

 
$
0.22

 
$
0.22

 
$
0.22

 
$
0.22

 
$
0.23

 
Dividends paid per common share
 
$
0.19

 
$
0.19

 
$
0.19

 
$
0.19

 
$
0.22

 
$
0.22

 
$
0.22

 
$
0.22

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average shares outstanding:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
 
44.3

 
44.3

 
44.2

 
43.8

 
43.0

 
43.0

 
43.1

 
43.0

 
Diluted
 
44.5

 
44.4

 
44.3

 
43.9

 
43.1

 
43.3

 
43.3

 
43.2

 

(1) Non-operating income in the fourth quarter of 2016 included a $37.1 million holding gain related to the purchase of the remaining ownership interest in PitchBook, which was previously a minority investment.
Description of Business (Details)
Dec. 31, 2016
Countries
Organization, Consolidation and Presentation of Financial Statements [Abstract]
 
Number of countries in which entity operates
27 
Summary of Significant Accounting Policies (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Business Acquisition [Line Items]
 
 
 
Depreciation expense
$ 51.3 
$ 42.4 
$ 32.6 
Capitalized software development costs
28.2 
21.8 
18.8 
Amortization of sales commission cost
0.6 
3.5 
9.8 
Advertising expense
7.6 
8.3 
7.5 
Internally developed software expense [Member]
 
 
 
Business Acquisition [Line Items]
 
 
 
Depreciation expense
$ 20.0 
$ 13.0 
$ 5.9 
Property and equipment [Member]
 
 
 
Business Acquisition [Line Items]
 
 
 
Asset useful life
3 years 
 
 
Capitalized software [Member] |
Minimum [Member]
 
 
 
Business Acquisition [Line Items]
 
 
 
Asset useful life
3 years 
 
 
Capitalized software [Member] |
Maximum [Member]
 
 
 
Business Acquisition [Line Items]
 
 
 
Asset useful life
5 years 
 
 
Credit Arrangements (Details) (USD $)
1 Months Ended 0 Months Ended 12 Months Ended 1 Months Ended 12 Months Ended 1 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Nov. 30, 2016
Credit agreement [Member]
Dec. 31, 2016
Credit agreement [Member]
Nov. 4, 2016
Credit agreement [Member]
Nov. 4, 2016
Letters of credit [Member]
Dec. 31, 2016
London Interbank Offered Rate (LIBOR) [Member]
Credit agreement [Member]
Dec. 31, 2016
Maximum [Member]
Nov. 30, 2016
Maximum [Member]
London Interbank Offered Rate (LIBOR) [Member]
Nov. 30, 2016
Maximum [Member]
Lender's base rate [Member]
Dec. 31, 2016
Minimum [Member]
Nov. 30, 2016
Minimum [Member]
London Interbank Offered Rate (LIBOR) [Member]
Nov. 30, 2016
Minimum [Member]
Lender's base rate [Member]
Line of Credit Facility [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
Credit agreement term
 
 
3 years 
 
 
 
 
 
 
 
 
 
 
Maximum borrowing capacity
 
 
 
 
$ 300,000,000.0 
$ 25,000,000.0 
 
 
 
 
 
 
 
Basis spread on variable rate debt
 
 
 
 
 
 
1.00% 
 
1.75% 
2.75% 
 
1.00% 
2.00% 
Debt covenant, consolidated leverage ratio
 
 
 
 
 
 
 
3.00 
 
 
 
 
 
Debt covenant, consolidated interest coverage ratio
 
 
 
 
 
 
 
 
 
 
3.00 
 
 
Long-term debt
250,000,000 
0 
 
250,000,000 
 
 
 
 
 
 
 
 
 
Remaining borrowing capacity
 
 
 
$ 50,000,000 
 
 
 
 
 
 
 
 
 
Income Per Share (Details) (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2016
Sep. 30, 2016
Jun. 30, 2016
Mar. 31, 2016
Dec. 31, 2015
Sep. 30, 2015
Jun. 30, 2015
Mar. 31, 2015
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Basic net income per share attributable to Morningstar, Inc.:
 
 
 
 
 
 
 
 
 
 
 
Net income attributable to Morningstar, Inc.
$ 70.3 
$ 30.2 
$ 31.8 
$ 28.7 
$ 37.3 
$ 33.5 
$ 32.2 
$ 29.7 
$ 161.0 
$ 132.6 
$ 78.3 
Weighted average common shares outstanding (in shares)
43.0 
43.1 
43.0 
43.0 
43.8 
44.2 
44.3 
44.3 
43.0 
44.2 
44.7 
Basic net income per share attributable to Morningstar, Inc. (in dollars per share)
 
 
 
 
 
 
 
 
$ 3.74 
$ 3.00 
$ 1.75 
Diluted net income per share attributable to Morningstar, Inc.:
 
 
 
 
 
 
 
 
 
 
 
Net income attributable to Morningstar, Inc.
 
 
 
 
 
 
 
 
$ 161.0 
$ 132.6 
$ 78.3 
Weighted average common shares outstanding (in shares)
43.0 
43.1 
43.0 
43.0 
43.8 
44.2 
44.3 
44.3 
43.0 
44.2 
44.7 
Net effect of dilutive stock options and restricted stock units (in shares)
 
 
 
 
 
 
 
 
0.3 
0.1 
0.2 
Weighted average common shares outstanding for computing diluted income per share (in shares)
43.2 
43.3 
43.3 
43.1 
43.9 
44.3 
44.4 
44.5 
43.3 
44.3 
44.9 
Diluted net income per share attributable to Morningstar, Inc. (in dollars per share)
 
 
 
 
 
 
 
 
$ 3.72 
$ 3.00 
$ 1.74 
Income Per Share Income Per Share Antidilutive Shares (Details)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount
13 
42 
53 
Restricted stock units [Member]
 
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount
13 
38 
47 
Performance share awards [Member]
 
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount
0 
4 
6 
Segment and Geographical Area Information (Operating Segments) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2016
Sep. 30, 2016
Jun. 30, 2016
Mar. 31, 2016
Dec. 31, 2015
Sep. 30, 2015
Jun. 30, 2015
Mar. 31, 2015
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Segment Reporting Information, Operating Income (Loss) [Abstract]
 
 
 
 
 
 
 
 
 
 
 
External revenue
$ 212.2 
$ 196.1 
$ 198.2 
$ 192.1 
$ 201.6 
$ 195.3 
$ 202.1 
$ 189.8 
$ 798.6 
$ 788.8 
$ 760.1 
Stock-based compensation expense
 
 
 
 
 
 
 
 
14.5 
17.4 
17.6 
Depreciation and amortization
 
 
 
 
 
 
 
 
70.7 
64.4 
54.9 
Operating income
49.9 
44.2 
44.4 
42.3 
50.1 
46.2 
49.7 
44.5 
180.8 
190.6 
105.6 
Segment Reporting Information, Additional Information [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Goodwill
556.8 
 
 
 
364.2 
 
 
 
556.8 
364.2 
370.1 
United States [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information, Operating Income (Loss) [Abstract]
 
 
 
 
 
 
 
 
 
 
 
External revenue
 
 
 
 
 
 
 
 
$ 590.5 
$ 585.1 
$ 550.8 
Segment and Geographical Area Information (External Revenue and Long-Lived Assets) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2016
Sep. 30, 2016
Jun. 30, 2016
Mar. 31, 2016
Dec. 31, 2015
Sep. 30, 2015
Jun. 30, 2015
Mar. 31, 2015
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Revenue
$ 212.2 
$ 196.1 
$ 198.2 
$ 192.1 
$ 201.6 
$ 195.3 
$ 202.1 
$ 189.8 
$ 798.6 
$ 788.8 
$ 760.1 
Long-lived assets
152.1 
 
 
 
134.5 
 
 
 
152.1 
134.5 
 
United States [Member]
 
 
 
 
 
 
 
 
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
 
 
 
 
 
 
 
590.5 
585.1 
550.8 
Long-lived assets
139.1 
 
 
 
116.9 
 
 
 
139.1 
116.9 
 
United Kingdom [Member]
 
 
 
 
 
 
 
 
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
 
 
 
 
 
 
 
61.1 
64.2 
61.8 
Long-lived assets
6.6 
 
 
 
8.6 
 
 
 
6.6 
8.6 
 
Europe excluding the United Kingdom [Member]
 
 
 
 
 
 
 
 
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
 
 
 
 
 
 
 
62.6 
58.8 
62.7 
Long-lived assets
1.9 
 
 
 
2.2 
 
 
 
1.9 
2.2 
 
Australia [Member]
 
 
 
 
 
 
 
 
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
 
 
 
 
 
 
 
32.2 
30.5 
35.0 
Long-lived assets
0.6 
 
 
 
0.9 
 
 
 
0.6 
0.9 
 
Canada [Member]
 
 
 
 
 
 
 
 
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
 
 
 
 
 
 
 
28.2 
27.9 
30.8 
Long-lived assets
0.4 
 
 
 
0.7 
 
 
 
0.4 
0.7 
 
Asia, Excluding Japan [Member]
 
 
 
 
 
 
 
 
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
 
 
 
 
 
 
 
20.0 
18.5 
15.8 
Long-lived assets
3.4 
 
 
 
5.2 
 
 
 
3.4 
5.2 
 
Other [Member]
 
 
 
 
 
 
 
 
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
 
 
 
 
 
 
 
4.0 
3.8 
3.2 
Long-lived assets
0.1 
 
 
 
0 
 
 
 
0.1 
0 
 
Non United States [Member]
 
 
 
 
 
 
 
 
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
 
 
 
 
 
 
 
208.1 
203.7 
209.3 
Long-lived assets
$ 13.0 
 
 
 
$ 17.6 
 
 
 
$ 13.0 
$ 17.6 
 
Investments and Fair Value Measurements (Classification of Securities) (Details) (USD $)
In Millions, unless otherwise specified
Dec. 31, 2016
Dec. 31, 2015
Fair Value Disclosures [Abstract]
 
 
Available-for-sale
$ 27.7 
$ 17.3 
Held-to-maturity
15.7 
15.3 
Trading securities, fair value disclosure
1.5 
8.9 
Total
$ 44.9 
$ 41.5 
Investments and Fair Value Measurements (Gains (Losses) on Investments) (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Available-for-sale:
 
 
 
Available-for-sale securities, amortized cost basis
$ 27.8 
$ 18.7 
 
Available-for-sale securities, unrealized gain
1.4 
0.3 
 
Available-for-sale securities, unrealized loss
(1.5)
(1.7)
 
Available-for-sale securities, current
27.7 
17.3 
 
Held-to-maturity:
 
 
 
Held-to-maturity securities, total amortized cost
15.7 
15.3 
 
Held-to-maturity securities, unrealized gain
0 
0 
 
Held-to-maturity securities, unrealized loss
0 
0 
 
Held-to-maturity securities, current
15.7 
15.3 
 
Available-for-sale Securities, Gross Realized Gain (Loss) [Abstract]
 
 
 
Available-for-sale securities, realized gains
1.6 
1.3 
1.5 
Available-for-sale securities, realized losses
(1.0)
(0.7)
(0.5)
Available-for-sale securities, realized gains, net
0.6 
0.6 
1.0 
Equity securities and exchange-traded funds [Member]
 
 
 
Available-for-sale:
 
 
 
Available-for-sale securities, amortized cost basis
25.6 
17.4 
 
Available-for-sale securities, unrealized gain
1.3 
0.3 
 
Available-for-sale securities, unrealized loss
(1.5)
(1.6)
 
Available-for-sale securities, fair value disclosure
25.4 
16.1 
 
Mutual funds [Member]
 
 
 
Available-for-sale:
 
 
 
Available-for-sale securities, amortized cost basis
2.2 
1.3 
 
Available-for-sale securities, unrealized gain
0.1 
0 
 
Available-for-sale securities, unrealized loss
0 
(0.1)
 
Available-for-sale securities, fair value disclosure
2.3 
1.2 
 
Certificates of deposit [Member]
 
 
 
Held-to-maturity:
 
 
 
Held-to-maturity securities, total amortized cost
13.8 
15.3 
 
Held-to-maturity securities, unrealized gain
0 
0 
 
Held-to-maturity securities, unrealized loss
0 
0 
 
Held-to-maturity securities, current
13.8 
15.3 
 
Convertible note [Member]
 
 
 
Held-to-maturity:
 
 
 
Held-to-maturity securities, total amortized cost
1.9 
0 
 
Held-to-maturity securities, unrealized gain
0 
0 
 
Held-to-maturity securities, unrealized loss
0 
0 
 
Held-to-maturity securities, current
$ 1.9 
$ 0 
 
Investments and Fair Value Measurements (Cost and Fair Value of Securities) (Details) (USD $)
In Millions, unless otherwise specified
Dec. 31, 2016
Dec. 31, 2015
Available-for-sale Securities, Debt Maturities [Abstract]
 
 
Available-for-sale securities, equity securities and mutual funds, amortized cost basis
$ 27.8 
$ 18.7 
Available-for-sale securities, equity securities and mutual funds, fair value
27.7 
17.3 
Available-for-sale securities, amortized cost basis
27.8 
18.7 
Available-for-sale securities, current
27.7 
17.3 
Held-to-maturity Securities, Debt Maturities [Abstract]
 
 
Held-to-maturity securities, due within one year, net carrying amount
13.8 
15.3 
Held-to-maturity securities, due within one year, fair value
13.8 
15.3 
Held-to-maturity securities, due within one year, carrying amount
1.9 
0 
Held-to-maturity securities, due within one year, fair value
1.9 
0 
Held-to-maturity securities, total amortized cost
15.7 
15.3 
Held-to-maturity securities, current
$ 15.7 
$ 15.3 
Investments and Fair Value Measurements (Unrealized Gains on Trading Securities) (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Fair Value Disclosures [Abstract]
 
 
 
Unrealized gains (losses), net
$ 0 
$ (0.8)
$ (0.2)
Investments and Fair Value Measurements (Fair Value of Assets) (Details) (USD $)
In Millions, unless otherwise specified
Dec. 31, 2016
Dec. 31, 2015
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Trading securities, fair value disclosure
$ 1.5 
$ 8.9 
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 disclosure
1.5 
8.9 
Cash equivalents, fair value disclosure
0.2 
0.2 
Investments, fair value disclosure
29.4 
26.4 
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 disclosure
25.4 
16.1 
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 disclosure
2.3 
1.2 
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 disclosure
0 
0 
Cash equivalents, fair value disclosure
0 
0 
Investments, fair value disclosure
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 disclosure
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 disclosure
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 disclosure
0 
0 
Cash equivalents, fair value disclosure
0 
0 
Investments, fair value disclosure
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 disclosure
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 disclosure
0 
0 
Estimate of Fair Value Measurement [Member] |
Fair Value, Measurements, Recurring [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Trading securities, fair value disclosure
1.5 
8.9 
Cash equivalents, fair value disclosure
0.2 
0.2 
Investments, fair value disclosure
29.4 
26.4 
Estimate of Fair Value Measurement [Member] |
Fair Value, Measurements, Recurring [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 disclosure
25.4 
16.1 
Estimate of Fair Value Measurement [Member] |
Fair Value, Measurements, Recurring [Member] |
Mutual funds [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Available-for-sale securities, fair value disclosure
$ 2.3 
$ 1.2 
Acquisitions, Goodwill, and Other Intangible Assets (Narrative) (Details) (USD $)
12 Months Ended 0 Months Ended 1 Months Ended 0 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Dec. 1, 2016
PitchBook [Member]
Dec. 31, 2016
PitchBook [Member]
Dec. 1, 2016
PitchBook [Member]
Nov. 30, 2016
PitchBook [Member]
Jun. 30, 2016
Ibbotson Associates Japan K.K. (IAJ) [Member]
Jul. 31, 2015
Ibbotson Associates Japan K.K. (IAJ) [Member]
Jun. 30, 2015
Ibbotson Associates Japan K.K. (IAJ) [Member]
Jun. 3, 2014
HelloWallet [Member]
Jun. 3, 2014
HelloWallet [Member]
Apr. 2, 2014
ByAllAccounts, Inc. [Member]
Business Acquisition [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
Percentage of voting interests acquired
 
 
 
 
 
78.20% 
 
 
 
 
 
81.30% 
 
Percentage of voting interest after subsequent acquisition (percent)
 
 
 
 
 
100.00% 
 
 
 
 
 
 
 
Percentage of voting interest before subsequent acquisition (percent)
 
 
 
 
 
 
22.00% 
 
 
 
 
 
 
Pro Forma, revenue, actual
 
 
 
 
$ 4,100,000 
 
 
 
 
 
 
 
 
Pro Forma, income (expense), actual
 
 
 
 
7,500,000 
 
 
 
 
 
 
 
 
Acquisition estimated fair value
 
 
 
 
 
235,100,000 
 
 
 
 
 
54,000,000 
27,900,000 
Cash paid to acquire the entity
 
 
 
188,200,000 
 
 
 
 
 
 
40,500,000 
 
 
Equity method investments, fair value
 
 
 
 
 
46,900,000 
 
 
 
 
 
 
 
Book value prior to business acquisition
 
 
 
 
 
 
9,800,000 
 
 
 
 
 
 
Holding gain upon acquisition of additional ownership of equity-method investments
37,100,000 
0 
5,200,000 
37,100,000 
 
 
 
 
 
 
 
 
 
Intangible assets
 
 
 
 
 
60,700,000 
 
 
 
 
 
9,500,000 
8,700,000 
Impairment of intangible assets
0 
0 
0 
 
 
 
 
 
 
 
 
 
 
Deferred tax liability
 
 
 
 
 
(12,800,000)
 
 
 
 
 
(3,600,000)
(3,300,000)
Goodwill
556,800,000 
364,200,000 
370,100,000 
 
 
193,600,000 
 
 
 
 
 
39,200,000 
18,500,000 
Goodwill impairment loss
0 
0 
0 
 
 
 
 
 
 
 
 
 
 
Ownership percentage of subsidiary by noncontrolling owners
 
 
 
 
 
 
 
28.90% 
 
 
 
 
 
Ownership percentage of subsidiary by parent
 
 
 
 
 
 
 
 
100.00% 
71.10% 
 
 
 
Current percentage of voting interests
 
 
 
 
 
 
 
 
 
 
 
100.00% 
 
Prior percentage of voting interests
 
 
 
 
 
 
 
 
 
 
 
18.70% 
 
Previously held ownership portion
 
 
 
 
 
 
 
 
 
 
13,500,000 
 
 
Non-cash holding gain (loss)
 
 
 
 
 
 
 
 
 
 
5,200,000 
 
 
Deferred tax asset
 
 
 
 
 
 
 
 
 
 
 
$ 8,600,000 
$ 4,000,000 
Acquisitions, Goodwill, and Other Intangible Assets (Purchase Price Allocation) (Details) (Details) (USD $)
In Millions, unless otherwise specified
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Dec. 1, 2016
PitchBook [Member]
Jun. 3, 2014
HelloWallet [Member]
Apr. 2, 2014
ByAllAccounts, Inc. [Member]
Business Acquisition, Purchase Price Allocation [Abstract]
 
 
 
 
 
 
Cash and cash equivalents
 
 
 
$ 12.4 
$ 3.7 
$ 0.3 
Accounts receivable and other current assets
 
 
 
10.8 
0.2 
0.1 
Other non-current assets
 
 
 
3.5 
0.3 
0.3 
Deferred tax asset
 
 
 
 
8.6 
4.0 
Intangible assets
 
 
 
60.7 
9.5 
8.7 
Goodwill
556.8 
364.2 
370.1 
193.6 
39.2 
18.5 
Deferred revenue
 
 
 
(22.4)
(2.9)
(0.1)
Deferred tax liability
 
 
 
(12.8)
(3.6)
(3.3)
Other current and non-current liabilities
 
 
 
(10.7)
(1.0)
(0.6)
Acquisition estimated fair value
 
 
 
$ 235.1 
$ 54.0 
$ 27.9 
Acquisitions, Goodwill, and Other Intangible Assets (Allocation of Acquired Intangible Assets) (Details) (USD $)
In Millions, unless otherwise specified
0 Months Ended 0 Months Ended 0 Months Ended 0 Months Ended 0 Months Ended 0 Months Ended 0 Months Ended 0 Months Ended 0 Months Ended 0 Months Ended 0 Months Ended 0 Months Ended 0 Months Ended
Jun. 3, 2014
HelloWallet [Member]
Jun. 3, 2014
HelloWallet [Member]
Jun. 3, 2014
HelloWallet [Member]
Technology-based assets [Member]
Jun. 3, 2014
HelloWallet [Member]
Technology-based assets [Member]
Jun. 3, 2014
HelloWallet [Member]
Intellectual property (trademarks and trade names) [Member]
Jun. 3, 2014
HelloWallet [Member]
Intellectual property (trademarks and trade names) [Member]
Jun. 3, 2014
HelloWallet [Member]
Non-competition agreement [Member]
Jun. 3, 2014
HelloWallet [Member]
Non-competition agreement [Member]
Apr. 1, 2014
ByAllAccounts, Inc. [Member]
Apr. 2, 2014
ByAllAccounts, Inc. [Member]
Apr. 1, 2014
ByAllAccounts, Inc. [Member]
Customer-related intangible assets [Member]
Apr. 2, 2014
ByAllAccounts, Inc. [Member]
Customer-related intangible assets [Member]
Apr. 1, 2014
ByAllAccounts, Inc. [Member]
Technology-based assets [Member]
Apr. 2, 2014
ByAllAccounts, Inc. [Member]
Technology-based assets [Member]
Apr. 1, 2014
ByAllAccounts, Inc. [Member]
Intellectual property (trademarks and trade names) [Member]
Apr. 2, 2014
ByAllAccounts, Inc. [Member]
Intellectual property (trademarks and trade names) [Member]
Apr. 1, 2014
ByAllAccounts, Inc. [Member]
Non-competition agreement [Member]
Apr. 2, 2014
ByAllAccounts, Inc. [Member]
Non-competition agreement [Member]
Dec. 1, 2016
PitchBook [Member]
Dec. 1, 2016
PitchBook [Member]
Dec. 1, 2016
PitchBook [Member]
Customer-related intangible assets [Member]
Dec. 1, 2016
PitchBook [Member]
Customer-related intangible assets [Member]
Dec. 1, 2016
PitchBook [Member]
Technology-based assets [Member]
Dec. 1, 2016
PitchBook [Member]
Technology-based assets [Member]
Dec. 1, 2016
PitchBook [Member]
Intellectual property (trademarks and trade names) [Member]
Dec. 1, 2016
PitchBook [Member]
Intellectual property (trademarks and trade names) [Member]
Business Acquisition [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Intangible assets
 
$ 9.5 
 
$ 6.7 
 
$ 0.2 
 
$ 2.6 
 
$ 8.7 
 
$ 5.5 
 
$ 3.0 
 
$ 0.1 
 
$ 0.1 
 
$ 60.7 
 
$ 17.1 
 
$ 40.8 
 
$ 2.8 
Weighted Average Useful Life (years)
5 years 
 
5 years 
 
3 years 
 
5 years 
 
19 years 
 
24 years 
 
4 years 6 months 
 
1 year 
 
3 years 
 
6 years 
 
10 years 
 
5 years 
 
4 years 
 
Acquisitions, Goodwill, and Other Intangible Assets (Schedule of Goodwill) (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2016
PitchBook [Member]
Dec. 1, 2016
PitchBook [Member]
Goodwill [Roll Forward]
 
 
 
 
Goodwill, Beginning Balance
$ 364.2 
$ 370.1 
 
$ 193.6 
Other, primarily foreign currency translation
 
(5.9)
 
 
Acquisition of PitchBook
 
 
193.6 
 
Other acquisitions and foreign currency translation
(1.0)
 
 
 
Goodwill, Ending Balance
$ 556.8 
$ 364.2 
 
$ 193.6 
Acquisitions, Goodwill, and Other Intangible Assets (Schedule of Intangible Assets) (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Finite-Lived Intangible Assets [Line Items]
 
 
Gross
$ 321.3 
$ 260.1 
Accumulated Amortization
(200.4)
(185.9)
Net
120.9 
74.2 
Weighted Average Useful Life (years)
10 years 
10 years 
Intellectual property [Member]
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
Gross
30.9 
28.3 
Accumulated Amortization
(27.4)
(26.7)
Net
3.5 
1.6 
Weighted Average Useful Life (years)
9 years 
9 years 
Customer-related assets [Member]
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
Gross
152.0 
137.5 
Accumulated Amortization
(97.7)
(92.3)
Net
54.3 
45.2 
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)
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
133.2 
89.5 
Accumulated Amortization
(72.1)
(64.4)
Net
61.1 
25.1 
Weighted Average Useful Life (years)
7 years 
8 years 
Non-competition agreements [Member]
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
Gross
5.0 
4.6 
Accumulated Amortization
(3.1)
(2.4)
Net
$ 1.9 
$ 2.2 
Weighted Average Useful Life (years)
5 years 
5 years 
Acquisitions, Goodwill, and Other Intangible Assets (Amortization Expense) (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Acquisitions, Goodwill, and Other Intangible Assets [Abstract]
 
 
 
Amortization expense
$ 19.4 
$ 22.0 
$ 22.3 
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]
 
 
 
2017
24.4 
 
 
2018
22.3 
 
 
2019
19.8 
 
 
2020
16.1 
 
 
2021
12.8 
 
 
Thereafter
$ 25.5 
 
 
Acquisitions, Goodwill, and Other Intangible Assets Acquisition, Goodwill, and Other Intangible Assets - Pro Forma (Details) (PitchBook [Member], USD $)
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
PitchBook [Member]
 
 
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items]
 
 
Revenue
$ 834,100 
$ 813,300 
Operating income
157,700 
170,000 
Net income
$ 105,500 
$ 117,100 
Basic net income per share attributable to Morningstar, Inc. (in dollars per share)
$ 2,450 
$ 2,650 
Diluted net income per share attributable to Morningstar, Inc. (in dollars per share)
$ 2,440 
$ 2,650 
Investments in Unconsolidated Entities (Details)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2016
USD ($)
Dec. 31, 2015
USD ($)
Dec. 31, 2014
USD ($)
Dec. 31, 2016
Other Equity Method Investments [Member]
USD ($)
Dec. 31, 2015
Other Equity Method Investments [Member]
USD ($)
Dec. 31, 2016
YCharts [Member]
Dec. 31, 2015
YCharts [Member]
Dec. 31, 2016
Morningstar Japan KK [Member]
USD ($)
Dec. 31, 2016
Morningstar Japan KK [Member]
JPY (¥)
Dec. 31, 2015
Morningstar Japan KK [Member]
USD ($)
Dec. 31, 2015
Morningstar Japan KK [Member]
JPY (¥)
Dec. 31, 2016
Inquiry Financial Europe AB [Member]
Dec. 31, 2015
Inquiry Financial Europe AB [Member]
Dec. 31, 2016
Ellevest [Member]
Dec. 31, 2016
United Income [Member]
Schedule of Equity Method Investments [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Equity method investments
 
 
 
$ 13.5 
$ 3.7 
 
 
$ 25.1 
 
$ 24.3 
 
 
 
 
 
Cost method investments
1.7 
7.6 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total investments in unconsolidated entities
40.3 
35.6 
 
 
 
 
 
 
 
 
 
 
 
 
 
Equity method investment, ownership percentage
 
 
 
 
 
22.00% 
22.00% 
34.00% 
34.00% 
34.00% 
34.00% 
34.00% 
34.00% 
22.00% 
38.00% 
Equity method investment, approximate market value
 
 
 
 
 
 
 
73.2 
8,558.2 
68.1 
8,200.5 
 
 
 
 
Cost-method investments, other than temporary impairment
0 
0 
 
 
 
 
 
 
 
 
 
 
 
 
 
Equity method investment, other than temporary impairment
$ 0 
$ 0 
$ 1.7 
 
 
 
 
 
 
 
 
 
 
 
 
Property, Equipment, and Capitalized Software (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Property, Plant and Equipment, Net [Abstract]
 
 
 
Property, equipment, and capitalized software, at cost
$ 366.9 
$ 304.3 
 
Less accumulated depreciation
(214.8)
(169.8)
 
Property, equipment, and capitalized software, net
152.1 
134.5 
 
Depreciation expense
51.3 
42.4 
32.6 
Computer equipment [Member]
 
 
 
Property, Plant and Equipment, Net [Abstract]
 
 
 
Property, equipment, and capitalized software, at cost
70.1 
60.3 
 
Capitalized software [Member]
 
 
 
Property, Plant and Equipment, Net [Abstract]
 
 
 
Property, equipment, and capitalized software, at cost
189.8 
144.0 
 
Furniture and fixtures [Member]
 
 
 
Property, Plant and Equipment, Net [Abstract]
 
 
 
Property, equipment, and capitalized software, at cost
26.0 
24.3 
 
Leasehold improvements [Member]
 
 
 
Property, Plant and Equipment, Net [Abstract]
 
 
 
Property, equipment, and capitalized software, at cost
69.0 
61.9 
 
Telephone equipment [Member]
 
 
 
Property, Plant and Equipment, Net [Abstract]
 
 
 
Property, equipment, and capitalized software, at cost
2.1 
2.1 
 
Construction in progress [Member]
 
 
 
Property, Plant and Equipment, Net [Abstract]
 
 
 
Property, equipment, and capitalized software, at cost
$ 9.9 
$ 11.7 
 
Operating Leases Operating Leases (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract]
 
 
 
2012
$ 23.9 
 
 
2013
22.0 
 
 
2014
17.9 
 
 
2015
17.5 
 
 
2016
16.0 
 
 
Thereafter
27.4 
 
 
Total
124.7 
 
 
Rent expense
26.3 
27.1 
24.5 
Deferred rent
$ 28.4 
$ 28.5 
 
Stock-Based Compensation (Narrative) (Details) (USD $)
In Millions, except Share data, unless otherwise specified
12 Months Ended 1 Months Ended 12 Months Ended 1 Months Ended 12 Months Ended
Dec. 31, 2016
Dec. 31, 2016
Stock options [Member]
Dec. 31, 2016
Restricted stock units [Member]
Dec. 31, 2016
Performance share awards [Member]
May 31, 2011
2004 Stock Incentive Plan [Member]
Dec. 31, 2013
2004 Stock Incentive Plan [Member]
Nov. 30, 2011
2011 Plan [Member]
Dec. 31, 2016
Non-employee director [Member]
Stock options [Member]
Dec. 31, 2016
Non-employee director [Member]
Restricted stock units [Member]
Dec. 31, 2016
Employee [Member]
Stock options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
 
 
 
 
 
 
Award vesting period
 
 
4 years 
3 years 
 
 
 
3 years 
3 years 
4 years 
Unrecognized stock-based compensation expense
$ 37.6 
 
$ 31.4 
$ 6.2 
 
 
 
 
 
 
Expected amortization period (months)
29 years 
 
33 years 
12 years 
 
 
 
 
 
 
Stock option granted
 
 
 
 
86,106 
 
6,095 
 
 
 
Fair value per share (in dollars per share)
 
 
 
 
 
$ 23.81 
 
 
 
 
Award expiration period
 
10 years 
 
 
 
 
 
 
 
 
Stock-Based Compensation (Shares Available for Future Grants) (Details)
In Millions, unless otherwise specified
Dec. 31, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
 
Shares available for future grants
0 
Stock-Based Compensation (Allocation of Stock-Based Compensation Costs) (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Stock-based compensation expense
$ 14.5 
$ 17.4 
$ 17.6 
Income tax benefit related to the stock-based compensation expense
4.3 
5.0 
5.1 
Restricted stock units [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Stock-based compensation expense
14.6 
16.1 
16.3 
Restricted stock [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Stock-based compensation expense
0 
0.1 
0.4 
Performance share awards [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Stock-based compensation expense
(0.1)
1.0 
0.5 
Stock options [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Stock-based compensation expense
$ 0 
$ 0.2 
$ 0.4 
Stock-Based Compensation (Unrecognized Stock-Based Compensation Expense) (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
Income tax benefit related to the stock-based compensation expense
$ 37.6 
Expected amortization period (months)
29 years 
Restricted stock units [Member]
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
Income tax benefit related to the stock-based compensation expense
31.4 
Expected amortization period (months)
33 years 
Performance share awards [Member]
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
Income tax benefit related to the stock-based compensation expense
$ 6.2 
Expected amortization period (months)
12 years 
Stock-Based Compensation (Restricted Stock Units Activity) (Details) (Restricted stock units [Member], USD $)
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Restricted stock units [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
 
 
 
RSUs Outstanding, Beginning Balance, Unvested
572,526 
655,934 
680,002 
RSUs Outstanding, Beginning Balance, Vested but Deferred
14,924 
14,778 
16,682 
RSUs Outstanding, Beginning Balance
587,450 
670,712 
696,684 
RSUs Outstanding, Beginning Balance, Weighted Average Grant Date Value per RSU
$ 72.14 
$ 67.51 
$ 62.02 
Target performance share awards granted
241,609 
235,213 
279,524 
Granted, Vested but Deferred
0 
0 
0 
Granted
241,609 
235,213 
279,524 
Granted, Weighted Average Grant Date Value per RSU
$ 77.82 
$ 77.17 
$ 72.68 
Dividend equivalents, Unvested
370 
1,409 
2,621 
Dividends equivalents, Vested but Deferred
136 
146 
150 
Dividends equivalents
506 
1,555 
2,771 
Dividends equivalents, Weighted Average Grant Date Value per RSU
$ 56.52 
$ 56.42 
$ 55.70 
Vested, Unvested
(225,590)
(253,038)
(268,115)
Vested, Vested but Deferred
0 
0 
0 
Vested
(225,590)
(253,038)
(268,115)
Vested, Weighted Average Grant Date Value per RSU
$ 69.39 
$ 64.65 
$ 58.91 
Issued, Unvested
0 
 
0 
Issued, Vested but Deferred
(5,312)
 
(2,054)
Issued
(5,312)
 
(2,054)
Issued, Weighted Average Grant Date Value per RSU
$ 44.47 
 
$ 53.54 
Forfeited, Unvested
(47,670)
(66,992)
(38,098)
Forfeited, Vested but Deferred
0 
0 
0 
Forfeited
(47,670)
(66,992)
(38,098)
Forfeited, Weighted Average Grant Date Value per RSU
$ 74.45 
$ 53.61 
$ 65.21 
RSUs Outstanding, Ending Balance, Unvested
541,245 
572,526 
655,934 
RSUs Outstanding, Ending Balance, Vested but Deferred
9,748 
14,924 
14,778 
RSUs Outstanding, Ending Balance
550,993 
587,450 
670,712 
RSUs Outstanding, Ending Balance, Weighted Average Grant Date Value per RSU
$ 75.77 
$ 72.14 
$ 67.51 
Stock-Based Compensation (Assumptions for Black-Scholes Option Pricing Model) (Details) (Stock options [Member])
12 Months Ended
Dec. 31, 2013
Stock options [Member]
 
Assumptions for Black-Scholes Option Pricing Model [Line Items]
 
Expected life (years):
7 years 4 months 24 days 
Volatility factor:
35.10% 
Dividends yield:
0.35% 
Interest rate:
2.87% 
Stock-Based Compensation (Stock Option Activity) (Details) (USD $)
In Millions, except Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2009
Option exercise price grouping [Member]
 
 
 
 
Intrinsic Value of Options Exercised [Abstract]
 
 
 
 
Intrinsic value of options exercised
$ 0.1 
$ 5.1 
$ 12.0 
 
Options granted at discount [Member]
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
 
 
 
 
Beginning Balance, Options, Outstanding, Underlying Shares
0 
0 
179,559 
 
Granted, Underlying Shares
0 
0 
0 
 
Canceled, Underlying Shares
0 
0 
(150)
 
Exercised, Underlying Shares
0 
0 
(179,409)
 
Ending Balance, Options, Outstanding, Underlying Shares
0 
0 
0 
 
Options, Weighted Average Exercise Price [Abstract]
 
 
 
 
Beginning Balance, Options, Outstanding, Weighted Average Exercise Price
$ 0.00 
$ 0.00 
$ 21.47 
 
Granted, Weighted Average Exercise Price
$ 0.00 
$ 0.00 
$ 0.00 
 
Canceled, Weighted Average Exercise Price
$ 0.00 
$ 0.00 
$ 22.24 
 
Exercised, Weighted Average Exercise Price
$ 0.00 
$ 0.00 
$ 22.08 
 
Ending Balance, Options, Outstanding, Weighted Average Exercise Price
$ 0.00 
$ 0.00 
$ 0.00 
 
Options, Exercisable, Number of Shares and Weighted Average Exercise Price [Abstract]
 
 
 
 
Options exercisable - end of year, Underlying Shares
0 
0 
 
0 
Options exercisable - end of year, Weighted Average Exercise Price
$ 0.00 
$ 0.00 
 
$ 0.00 
Option grants excluding options granted at discount [Member]
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
 
 
 
 
Beginning Balance, Options, Outstanding, Underlying Shares
52,096 
169,810 
253,972 
 
Granted, Underlying Shares
0 
0 
0 
 
Canceled, Underlying Shares
0 
0 
(526)
 
Exercised, Underlying Shares
(6,095)
(117,714)
(83,636)
 
Ending Balance, Options, Outstanding, Underlying Shares
46,001 
52,096 
169,810 
 
Options, Weighted Average Exercise Price [Abstract]
 
 
 
 
Beginning Balance, Options, Outstanding, Weighted Average Exercise Price
$ 57.52 
$ 40.20 
$ 36.48 
 
Granted, Weighted Average Exercise Price
$ 0.00 
$ 0.00 
$ 0.00 
 
Canceled, Weighted Average Exercise Price
$ 0.00 
$ 0.00 
$ 38.61 
 
Exercised, Weighted Average Exercise Price
$ 59.35 
$ 32.91 
$ 30.82 
 
Ending Balance, Options, Outstanding, Weighted Average Exercise Price
$ 57.28 
$ 57.52 
$ 40.20 
 
Options, Exercisable, Number of Shares and Weighted Average Exercise Price [Abstract]
 
 
 
 
Options exercisable - end of year, Underlying Shares
46,001 
52,096 
154,864 
 
Options exercisable - end of year, Weighted Average Exercise Price
$ 57.28 
$ 57.52 
$ 38.53 
 
Stock-Based Compensation (Additional Information on Options) (Details) (USD $)
In Millions, except Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2016
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
 
Closing Stock Price Used to Calculate Intrinsic Value
$ 73.56 
Range One [Member]
 
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
 
Range of Exercise Prices
57.28 
Exercise price range, lower range limit
$ 57.28 
Exercise price range, upper range limit
$ 59.35 
Options Outstanding, Number of Options
46,001 
Options Outstanding, Weighted Average Remaining Contractual Life (years)
4 years 4 months 13 days 
Options Outstanding, Weighted Average Exercise Price
$ 57.28 
Options Outstanding, Aggregate Intrinsic Value
$ 0.7 
Options Exercisable, Exercisable Shares
46,001 
Options Exercisable, Weighted Average Remaining Contractual Life (years)
4 years 4 months 13 days 
Options Exercisable, Weighted Average Exercise Price
$ 57.28 
Options Exercisable, Aggregate Intrinsic Value
0.7 
Share Based Compensation, Arrangement By Share Based Payments, Vested or Expected to Vest, Range of Exercise Prices
57.28 
Option Outstanding, Number of Options, Vested or Expected to Vest
46,001 
Options Outstanding, Weighted Average Remaining Contractual Life (years), Vested or Expected to vest
4 years 4 months 13 days 
Options Outstanding, Weighted Average Exercise Price, Vested or Expected to Vest
$ 57.28 
Options Outstanding, Average Intrinsic Value, Vested or Expected to Vest
$ 0.7 
Stock-Based Compensation (Total Stock-Based Compensation Expense) (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
 
 
 
Stock-based compensation expense
$ 14.5 
$ 17.4 
$ 17.6 
Cost of revenue [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
 
 
 
Stock-based compensation expense
7.5 
8.1 
7.8 
Selling and marketing expense [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
 
 
 
Stock-based compensation expense
1.9 
2.2 
2.1 
General and administrative expense [Member]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
 
 
 
Stock-based compensation expense
$ 5.1 
$ 7.1 
$ 7.7 
Stock-Based Compensation (Performance Shares) (Details) (Performance share awards [Member], USD $)
In Millions, except Share data, unless otherwise specified
12 Months Ended 36 Months Ended
Dec. 31, 2016
Dec. 31, 2016
Performance share awards [Member]
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Target performance share awards granted
 
117,386 
Granted, Weighted Average Grant Date Value per RSU
$ 78.23 
 
Number of shares that would be issued based on current performance levels
1,287 
 
Unamortized expense, based on current performance levels (in millions)
$ 0.7 
$ 0.7 
Stock-based Compensation (PitchBook Bonus Plan) (Details) (Performance share awards [Member], USD $)
In Millions, except Share data, unless otherwise specified
12 Months Ended 36 Months Ended 12 Months Ended 36 Months Ended
Dec. 31, 2016
Dec. 31, 2016
Dec. 31, 2016
PitchBook Plan [Member]
Dec. 31, 2019
Forecast [Member]
PitchBook Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
Shares available for issuance, aggregate target value
 
 
$ 30.0 
 
Target value of shares expected to be granted in 2017
 
 
7.5 
 
Target value of shares expected to be granted in 2018
 
 
7.5 
 
Target value of shares expected to be granted in 2019
 
 
15.0 
 
Award vesting period
3 years 
 
1 year 
 
Shares of common stock to be issued for each equity instrument
 
 
1 
 
Target performance share awards granted
 
117,386 
 
100,924 
Weighted average fair value per award
 
 
$ 74.31 
 
Number of shares that would be issued based on current performance levels
1,287 
 
 
100,924 
Unamortized expense, based on current performance levels (in millions)
$ 0.7 
$ 0.7 
$ 6.9 
 
Defined Contribution Plan (Details) (USD $)
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Defined Contribution Plan [Abstract]
 
 
 
401(k) matching contributions
$ 9,000,000 
$ 8,300,000 
$ 7,500,000 
Matching contribution to 401(k) for every dollar
$ 0.75 
$ 0.75 
$ 0.75 
Matching contribution percent to employee's contribution in pay period
7.00% 
7.00% 
7.00% 
Income Taxes (Schedule of Income Tax Expense and Effective Tax Rate) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2016
Sep. 30, 2016
Jun. 30, 2016
Mar. 31, 2016
Dec. 31, 2015
Sep. 30, 2015
Jun. 30, 2015
Mar. 31, 2015
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Income Tax Disclosure [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Income before income taxes and equity in net income (loss) of unconsolidated entities
$ 88.4 
$ 46.3 
$ 47.4 
$ 42.8 
$ 51.5 
$ 47.6 
$ 50.3 
$ 44.1 
$ 224.9 
$ 193.7 
$ 114.0 
Equity in net income (loss) of unconsolidated entities
(0.9)
0.4 
(0.2)
0.5 
0.3 
0.5 
0.6 
0.5 
(0.2)
1.8 
0 
Net income attributable to the noncontrolling interest
0 
0 
0 
0 
0 
0 
0 
(0.1)
0 
(0.2)
0 
Income loss from continuing operations before income taxes domestic and foreign
 
 
 
 
 
 
 
 
224.7 
195.3 
114.0 
Income tax expense
$ 17.2 
$ 16.5 
$ 15.4 
$ 14.6 
$ 14.5 
$ 14.6 
$ 18.7 
$ 14.8 
$ 63.7 
$ 62.7 
$ 35.7 
Effective income tax rate
 
 
 
 
 
 
 
 
28.30% 
32.10% 
31.30% 
Income Taxes (Schedule of Effective Income Tax Rate Reconciliation) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2016
Sep. 30, 2016
Jun. 30, 2016
Mar. 31, 2016
Dec. 31, 2015
Sep. 30, 2015
Jun. 30, 2015
Mar. 31, 2015
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Income Tax Examination [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Income tax expense at U.S. federal rate
 
 
 
 
 
 
 
 
$ 78.6 
$ 68.4 
$ 39.9 
Income tax expense at U.S. federal rate, percent
 
 
 
 
 
 
 
 
35.00% 
35.00% 
35.00% 
State income taxes, net of federal income tax benefit
 
 
 
 
 
 
 
 
4.5 
6.6 
2.1 
State income taxes, net of federal income tax benefit, percent
 
 
 
 
 
 
 
 
2.00% 
3.40% 
1.90% 
Stock-based compensation activity
 
 
 
 
 
 
 
 
(0.6)
0.4 
0.1 
Stock-based compensation activity, percent
 
 
 
 
 
 
 
 
(0.30%)
0.20% 
0.10% 
Holding gain upon acquisition of additional ownership of equity method investments
 
 
 
 
 
 
 
 
(12.1)
0 
(1.4)
Holding gain upon acquisition of additional ownership of equity method investments, percent
 
 
 
 
 
 
 
 
(5.40%)
0.00% 
(1.20%)
Net change in valuation allowance related to non-U.S. deffered tax assets, primarily net operating losses
 
 
 
 
 
 
 
 
(0.1)
(2.0)
(0.6)
Net change in valuation allowance related to non-U.S. deffered tax assets, primarily net operating losses, percent
 
 
 
 
 
 
 
 
0.00% 
(1.00%)
(0.50%)
Difference between U.S. federal statutory and foreign tax rates
 
 
 
 
 
 
 
 
(5.3)
(4.4)
(4.0)
Difference between U.S. federal statutory and foreign tax rates, percent
 
 
 
 
 
 
 
 
(2.40%)
(2.30%)
(3.50%)
Change in unrecognized tax benefits
 
 
 
 
 
 
 
 
2.6 
(1.4)
1.5 
Changes in unrecognized tax benefits, percent
 
 
 
 
 
 
 
 
1.20% 
(0.70%)
1.30% 
Other tax credits
 
 
 
 
 
 
 
 
(3.7)
(5.1)
(2.9)
Other tax credits, percent
 
 
 
 
 
 
 
 
(1.60%)
(2.60%)
(2.60%)
Recognition of deferred tax assets
 
 
 
 
 
 
 
 
0 
0 
(0.1)
Recognition of deferred tax assets, percent
 
 
 
 
 
 
 
 
0.00% 
0.00% 
(0.10%)
Other - net
 
 
 
 
 
 
 
 
(0.2)
0.2 
1.1 
Other - net, percent
 
 
 
 
 
 
 
 
(0.10%)
0.10% 
0.90% 
Income tax expense
$ 17.2 
$ 16.5 
$ 15.4 
$ 14.6 
$ 14.5 
$ 14.6 
$ 18.7 
$ 14.8 
$ 63.7 
$ 62.7 
$ 35.7 
Income tax expense, percent
 
 
 
 
 
 
 
 
28.30% 
32.10% 
31.30% 
Income Taxes (Schedule of Components of Income Tax Expense) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2016
Sep. 30, 2016
Jun. 30, 2016
Mar. 31, 2016
Dec. 31, 2015
Sep. 30, 2015
Jun. 30, 2015
Mar. 31, 2015
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Income Tax Disclosure [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Federal
 
 
 
 
 
 
 
 
$ 42.8 
$ 42.8 
$ 20.8 
State
 
 
 
 
 
 
 
 
6.5 
8.3 
2.0 
Non-U.S.
 
 
 
 
 
 
 
 
9.7 
8.7 
9.6 
Current tax expense
 
 
 
 
 
 
 
 
59.0 
59.8 
32.4 
Federal
 
 
 
 
 
 
 
 
5.1 
4.3 
3.7 
State
 
 
 
 
 
 
 
 
0.4 
1.8 
1.3 
Non-U.S.
 
 
 
 
 
 
 
 
(0.8)
(3.2)
(1.7)
Deferred tax expense (benefit)
 
 
 
 
 
 
 
 
4.7 
2.9 
3.3 
Income tax expense
$ 17.2 
$ 16.5 
$ 15.4 
$ 14.6 
$ 14.5 
$ 14.6 
$ 18.7 
$ 14.8 
$ 63.7 
$ 62.7 
$ 35.7 
Income Taxes (Schedule of Income before Income Taxes and Equity in Net Income of Unconsolidated Entities) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2016
Sep. 30, 2016
Jun. 30, 2016
Mar. 31, 2016
Dec. 31, 2015
Sep. 30, 2015
Jun. 30, 2015
Mar. 31, 2015
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Income Tax Disclosure [Abstract]
 
 
 
 
 
 
 
 
 
 
 
U.S.
 
 
 
 
 
 
 
 
$ 186.5 
$ 160.6 
$ 80.4 
Non-U.S.
 
 
 
 
 
 
 
 
38.4 
33.1 
33.6 
Income before income taxes and equity in net income (loss) of unconsolidated entities
$ 88.4 
$ 46.3 
$ 47.4 
$ 42.8 
$ 51.5 
$ 47.6 
$ 50.3 
$ 44.1 
$ 224.9 
$ 193.7 
$ 114.0 
Income Taxes (Schedule of Deferred Tax Assets and Liabilities) (Details) (USD $)
In Millions, unless otherwise specified
Dec. 31, 2016
Dec. 31, 2015
Deferred tax assets:
 
 
Stock-based compensation expense
$ 2.6 
$ 3.1 
Accrued liabilities
19.0 
14.3 
Deferred revenue
5.1 
0.9 
Net operating loss carryforwards - U.S.
12.9 
7.6 
Net operating loss carryforwards - Non-U.S.
3.0 
3.7 
Credits and incentive carryforwards
0.6 
0.6 
Deferred royalty revenue
0.3 
0.3 
Allowance for doubtful accounts
1.2 
1.0 
Deferred rent
10.3 
8.9 
Unrealized exchange losses, net
0 
0.4 
Total deferred tax assets
55.0 
40.8 
Deferred tax liabilities:
 
 
Acquired intangible assets
(34.3)
(13.2)
Property, equipment and capitalized software
(37.6)
(28.1)
Unrealized exchange gains, net
(0.1)
0 
Prepaid expenses
(5.3)
(4.3)
Investments in unconsolidated entities
(14.0)
(13.7)
Other
(0.3)
(0.1)
Total deferred tax liabilities
91.6 
59.4 
Net deferred tax liability before valuation allowance
36.6 
18.6 
Valuation allowance
(1.6)
(1.2)
Total deferred tax liabilities
$ (38.2)
$ (19.8)
Income Taxes (Schedule of Deferred Tax Assets and Liabilities Included in Consolidated Balance Sheets) (Details) (USD $)
In Millions, unless otherwise specified
Dec. 31, 2016
Dec. 31, 2015
Income Tax Disclosure [Abstract]
 
 
Deferred tax liability, net
$ (38.2)
$ (19.8)
Income Taxes (Summary of Operating Loss Carryforwards - U.S and Non-U.S) (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Operating Loss Carryforwards [Line Items]
 
 
Undistributed earnings of foreigh subsidiaries, permanently invested
$ 171.6 
 
Non-U.S. [Member]
 
 
Operating Loss Carryforwards [Line Items]
 
 
Operating loss carryforwards
14.6 
18.4 
Operating loss carryforwards, not subject to valuation allowances
6.8 
12.1 
Non-U.S. [Member] |
Subject to Expiration Date [Member]
 
 
Operating Loss Carryforwards [Line Items]
 
 
Operating loss carryforwards
3.8 
2.9 
Non-U.S. [Member] |
No Expiration Date [Member]
 
 
Operating Loss Carryforwards [Line Items]
 
 
Operating loss carryforwards
10.8 
15.5 
U.S [Member] |
Subject to Expiration Date [Member]
 
 
Operating Loss Carryforwards [Line Items]
 
 
Operating loss carryforwards
36.9 
21.6 
Operating loss carryforwards utilized in current year
8.6 
 
PitchBook [Member] |
U.S [Member] |
Subject to Expiration Date [Member]
 
 
Operating Loss Carryforwards [Line Items]
 
 
Operating loss carryforwards
$ 23.9 
 
Income Taxes (Accounting for Uncertainty in Tax Positions) (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]
 
 
Gross unrecognized tax benefits - beginning of the year
$ 14.5 
$ 11.9 
Increases as a resulting of tax positions taken during a prior-year period
2.2 
4.4 
Decreases as a result of tax positions taken during a prior-year period
(0.1)
(0.7)
Increases as a result of tax positions taken during the current period
2.4 
2.4 
Decreases relating to settlements with tax authorities
0 
(1.8)
Reductions as a result of lapse of the applicable statute of limitations
(0.6)
(1.7)
Gross unrecognized tax benefits - end of the year
18.4 
14.5 
Decrease of unrecognized tax benefits relating to settlements with tax authorities
0.6 
 
Unrecognized tax benefits included in current liabilities
8.9 
4.2 
Unrecognized tax benefits included in non-current liabilities
5.4 
6.0 
Result of tax position taken during period
3.1 
 
Increase in income tax expense
2.8 
 
Reductions resulting from settlements and lapse of statute of limitations
0.6 
 
Unrecognized tax benefits that would impact effective tax rate
14.4 
 
Unrecognized tax benefits, period increase (decrease)
4.5 
 
Reductions resulting from settlements and lapse statute of limitations, tax effect
0.4 
 
Decrease in income tax expense upon recognition of gross unrecognized tax benefits
$ 13.3 
 
Income Taxes (Summary of Income Tax Examinations) (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Income Tax Disclosure [Abstract]
 
 
Liabilities for interest and penalties
$ 1.6 
$ 1.2 
Share Repurchase Program (Details) (USD $)
Dec. 31, 2016
Equity [Abstract]
 
Shares repurchased, program life to date, shares
10,028,125 
Shares repurchased, program life to date, value
$ 672,900,000 
Stock repurchase program, authorized amount
1,000,000,000 
Stock Repurchase Program, Remaining Authorized Repurchase Amount
$ 327,100,000 
Recently Issued Accounting Pronouncements (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
 
 
 
Cash provided by operating activities
$ 213.7 
$ 241.5 
$ 136.6 
Cash provided by financing activities
123.7 
(127.5)
(76.1)
New accounting pronouncement, early adoption, effect [Member] |
Accounting Standards Update 2016-09 [Member]
 
 
 
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
 
 
 
Recognition of excess tax benefits in provision for income taxes rather than paid-in capital
0.8 
 
 
New accounting pronouncement, early adoption, effect [Member] |
Accounting Standards Update 2016-09, Excess Tax Benefit Component [Member]
 
 
 
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
 
 
 
Cash provided by operating activities
 
2.6 
4.4 
Cash provided by financing activities
 
$ 2.6 
$ 4.4 
Selected Quarterly Financial Data (Details) (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2016
Sep. 30, 2016
Jun. 30, 2016
Mar. 31, 2016
Dec. 31, 2015
Sep. 30, 2015
Jun. 30, 2015
Mar. 31, 2015
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Quarterly Financial Information Disclosure [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Revenue
$ 212.2 
$ 196.1 
$ 198.2 
$ 192.1 
$ 201.6 
$ 195.3 
$ 202.1 
$ 189.8 
$ 798.6 
$ 788.8 
$ 760.1 
Total operating expense
162.3 
151.9 
153.8 
149.8 
151.5 
149.1 
152.4 
145.3 
617.8 
598.2 
654.5 
Operating income
49.9 
44.2 
44.4 
42.3 
50.1 
46.2 
49.7 
44.5 
180.8 
190.6 
105.6 
Non-operating income (expense), net
38.5 
2.1 
3.0 
0.5 
1.4 
1.4 
0.6 
(0.4)
44.1 
3.1 
8.4 
Income before income taxes and equity in net income (loss) of unconsolidated entities
88.4 
46.3 
47.4 
42.8 
51.5 
47.6 
50.3 
44.1 
224.9 
193.7 
114.0 
Equity in net income (loss) of unconsolidated entities
(0.9)
0.4 
(0.2)
0.5 
0.3 
0.5 
0.6 
0.5 
(0.2)
1.8 
0 
Income tax expense
17.2 
16.5 
15.4 
14.6 
14.5 
14.6 
18.7 
14.8 
63.7 
62.7 
35.7 
Income (Loss) from Continuing Operations, Including Portion Attributable to Noncontrolling Interest
70.3 
30.2 
31.8 
28.7 
37.3 
33.5 
32.2 
29.8 
 
 
 
Consolidated net income
 
 
 
 
 
 
 
 
161.0 
132.8 
78.3 
Net income attributable to the noncontrolling interest
0 
0 
0 
0 
0 
0 
0 
(0.1)
0 
(0.2)
0 
Net income attributable to Morningstar, Inc.
$ 70.3 
$ 30.2 
$ 31.8 
$ 28.7 
$ 37.3 
$ 33.5 
$ 32.2 
$ 29.7 
$ 161.0 
$ 132.6 
$ 78.3 
Income (Loss) from Continuing Operations, Per Basic Share
$ 1.63 
$ 0.70 
$ 0.74 
$ 0.67 
$ 0.85 
$ 0.76 
$ 0.73 
$ 0.67 
 
 
 
Earnings Per Share, Basic [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Basic net income per share attributable to Morningstar, Inc. (in dollars per share)
 
 
 
 
 
 
 
 
$ 3.74 
$ 3.00 
$ 1.75 
Weighted average common shares outstanding - basic (in shares)
43.0 
43.1 
43.0 
43.0 
43.8 
44.2 
44.3 
44.3 
43.0 
44.2 
44.7 
Income (Loss) from Continuing Operations, Per Diluted Share
$ 1.63 
$ 0.70 
$ 0.73 
$ 0.67 
$ 0.85 
$ 0.76 
$ 0.72 
$ 0.67 
 
 
 
Earnings Per Share, Diluted [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Diluted net income per share attributable to Morningstar, Inc. (in dollars per share)
 
 
 
 
 
 
 
 
$ 3.72 
$ 3.00 
$ 1.74 
Weighted average common shares outstanding - diluted (in shares)
43.2 
43.3 
43.3 
43.1 
43.9 
44.3 
44.4 
44.5 
43.3 
44.3 
44.9 
Dividends Per Common Share: [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Common stock, dividends, per share, declared
$ 0.23 
$ 0.22 
$ 0.22 
$ 0.22 
$ 0.22 
$ 0.19 
$ 0.19 
$ 0.19 
$ 0.89 
$ 0.79 
$ 0.70 
Dividends paid per common share
$ 0.22 
$ 0.22 
$ 0.22 
$ 0.22 
$ 0.19 
$ 0.19 
$ 0.19 
$ 0.19 
$ 0.88 
$ 0.76 
$ 0.68