MORNINGSTAR, INC., 10-Q filed on 7/31/2014
Quarterly Report
Document and Entity Information
6 Months Ended
Jun. 30, 2014
Jul. 25, 2014
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-Q 
 
Document Period End Date
Jun. 30, 2014 
 
Document Fiscal Year Focus
2014 
 
Document Fiscal Period Focus
Q2 
 
Amendment Flag
false 
 
Entity Common Stock, Shares Outstanding
 
44,721,637 
Condensed Consolidated Statements of Income (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Revenue
$ 189,385 
$ 175,428 
$ 370,550 
$ 344,284 
Operating expense (1):
 
 
 
 
Cost of revenue
81,387 1
64,427 1
157,101 1
126,077 1
Sales and marketing
27,949 1
28,035 1
56,377 1
56,015 1
General and administrative
30,438 1
28,120 1
56,542 1
55,447 1
Depreciation and amortization
13,391 
11,262 
25,778 
22,601 
Litigation settlement
61,000 
0 
61,000 
0 
Total operating expense
214,165 1
131,844 1
356,798 1
260,140 1
Operating income (loss)
(24,780)
43,584 
13,752 
84,144 
Non-operating income (expense):
 
 
 
 
Interest income (expense), net
634 
664 
1,219 
1,405 
Gain (loss) on sale of investments reclassified from other comprehensive income
371 
423 
347 
1,148 
Equity Method Investments Holding Gain
5,168 
3,713 
5,168 
3,713 
Other income (expense), net
(275)
(1,689)
29 
(2,210)
Non-operating income (expense), net
5,898 
3,111 
6,763 
4,056 
Income before income taxes and equity in net income of unconsolidated entities
(18,882)
46,695 
20,515 
88,200 
Equity in net income of unconsolidated entities
497 
360 
1,096 
857 
Income tax expense
(8,611)
15,955 
5,039 
28,382 
Consolidated net income
(9,774)
31,100 
16,572 
60,675 
Net (income) loss attributable to the noncontrolling interest
5 
21 
35 
64 
Net income attributable to Morningstar, Inc.
$ (9,769)
$ 31,121 
$ 16,607 
$ 60,739 
Net income per share attributable to:
 
 
 
 
Basic (in dollars per share)
$ (0.22)
$ 0.67 
$ 0.37 
$ 1.31 
Diluted (in dollars per share)
$ (0.22)
$ 0.66 
$ 0.37 
$ 1.30 
Dividends declared per common share
$ 0.17 
$ 0.125 
$ 0.34 
$ 0.25 
Dividends paid per common share
$ 0.17 
$ 0.125 
$ 0.34 
$ 0.13 
Weighted average shares outstanding:
 
 
 
 
Basic (in shares)
44,777 
46,400 
44,778 
46,403 
Diluted (in shares)
44,777 
46,853 
45,039 
46,756 
Condensed Consolidated Statements of Income (Parenthetical) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
(1) Includes stock-based compensation expense of:
 
 
 
 
Allocated Share-based Compensation Expense
$ 4,363 
$ 3,954 
$ 8,302 
$ 7,737 
Cost of Revenue
 
 
 
 
(1) Includes stock-based compensation expense of:
 
 
 
 
Allocated Share-based Compensation Expense
1,890 
1,691 
3,652 
3,392 
Sales and Marketing
 
 
 
 
(1) Includes stock-based compensation expense of:
 
 
 
 
Allocated Share-based Compensation Expense
530 
522 
1,027 
1,034 
General and Administrative
 
 
 
 
(1) Includes stock-based compensation expense of:
 
 
 
 
Allocated Share-based Compensation Expense
$ 1,943 
$ 1,741 
$ 3,623 
$ 3,311 
Condensed Consolidated Statements of Comprehensive Income (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Consolidated net income (loss)
$ (9,774)
$ 31,100 
$ 16,572 
$ 60,675 
Other comprehensive income (loss):
 
 
 
 
Foreign currency translation adjustment
2,861 
(7,128)
5,333 
(16,199)
Unrealized gains on securities, net of tax:
 
 
 
 
Unrealized holding gains (losses) arising during period
280 
(166)
396 
1,000 
Reclassification of gains included in net income
(233)
(271)
(218)
(734)
Other comprehensive income (loss)
2,908 
(7,565)
5,511 
(15,933)
Comprehensive income (loss)
(6,866)
23,535 
22,083 
44,742 
Comprehensive income (loss)
10 
64 
15 
206 
Comprehensive income (loss) attributable to Morningstar, Inc.
$ (6,856)
$ 23,599 
$ 22,098 
$ 44,948 
Condensed Consolidated Balance Sheets (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2014
Dec. 31, 2013
Current assets:
 
 
Cash and cash equivalents
$ 176,254 
$ 168,160 
Investments
44,696 
130,407 
Accounts receivable, less allowance of $762 and $1,089, respectively
135,017 
114,131 
Deferred tax asset, net
6,437 
3,892 
Income tax receivable, net
18,616 
3,942 
Other
21,565 
26,361 
Total current assets
402,585 
446,893 
Property, equipment, and capitalized software, net
109,900 
104,986 
Investments in unconsolidated entities
30,287 
38,714 
Goodwill
388,837 
326,450 
Intangible assets, net
111,779 
103,909 
Other assets
7,835 
9,716 
Total assets
1,051,223 
1,030,668 
Current liabilities:
 
 
Accounts payable and accrued liabilities
97,251 
42,131 
Accrued compensation
58,409 
71,403 
Deferred revenue
161,921 
149,225 
Other
4,607 
6,786 
Total current liabilities
322,188 
269,545 
Accrued compensation
7,512 
8,193 
Deferred tax liability, net
19,183 
23,755 
Deferred rent
23,158 
23,938 
Other long-term liabilities
10,520 
13,947 
Total liabilities
382,561 
339,378 
Morningstar, Inc. shareholders' equity:
 
 
Common stock, no par value, 200,000,000 shares authorized, of which 44,715,637 and 44,967,423 shares were outstanding as of June 30, 2014 and December 31, 2013, respectively
5 
5 
Treasury stock at cost, 7,676,092 shares as of June 30, 2014 and 7,202,896 shares as of December 31, 2013
(484,560)
(449,054)
Additional paid-in capital
545,624 
539,507 
Retained earnings
595,911 
594,626 
Accumulated other comprehensive income:
 
 
Currency translation adjustment
9,922 
4,609 
Unrealized gain on available-for-sale securities
742 
564 
Total accumulated other comprehensive income
10,664 
5,173 
Total Morningstar, Inc. shareholders' equity
667,644 
690,257 
Noncontrolling interest
1,018 
1,033 
Total equity
668,662 
691,290 
Total liabilities and equity
$ 1,051,223 
$ 1,030,668 
Condensed Consolidated Balance Sheets (Parenthetical) (USD $)
In Thousands, except Share data, unless otherwise specified
Jun. 30, 2014
Dec. 31, 2013
Statement of Financial Position [Abstract]
 
 
Allowance for Doubtful Accounts Receivable, Current
$ 762 
$ 1,089 
Common Stock, No Par Value
$ 0 
$ 0 
Common Stock, Shares Authorized
200,000,000 
200,000,000 
Common Stock, Shares, Outstanding
44,715,637 
44,967,423 
Treasury Stock, Shares
7,676,092 
7,202,896 
Condensed Consolidated Statement of Equity (USD $)
In Thousands, 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
$ 691,290 
$ 5 
$ (449,054)
$ 539,507 
$ 594,626 
$ 5,173 
$ 1,033 
Balance (in shares) at Dec. 31, 2013
44,967,423 
44,967,423 
 
 
 
 
 
Increase (Decrease) in Stockholders' Equity
 
 
 
 
 
 
 
Net income (loss)
16,572 
 
 
 
16,607 
 
(35)
Other comprehensive income (loss):
 
 
 
 
 
 
 
Unrealized gain on available-for-sale investments, net of income tax of $219
396 
   
   
   
   
396 
0 
Reclassification of adjustments for losses included in net income, net of income tax of $129
(218)
   
   
   
   
(218)
0 
Foreign currency translation adjustment, net
5,333 
   
   
   
   
5,313 
20 
Other comprehensive income (loss)
5,511 
   
   
   
   
5,491 
20 
Issuance of common stock related to stock-option exercises and vesting of restricted stock units, net
(2,931)
0 
1,214 
(4,145)
   
   
   
Issuance of common stock related to stock-option exercises and vesting of restricted stock units, net (in shares)
 
238,015 
 
 
 
 
 
Adjustments to Additional Paid in Capital, Share-based Compensation, Requisite Service Period Recognition
 
 
 
 
 
 
 
Stock-based compensation - restricted stock units
8,302 
   
   
 
   
   
   
Adjustments to Additional Paid in Capital, Share-based Compensation, Requisite Service Period Recognition
 
 
 
8,302 
 
 
 
Excess tax benefit derived from stock-option exercises and vesting of restricted stock units
1,913 
   
   
1,913 
   
   
   
Common share repurchased
(36,720)
   
(36,720)
   
   
   
   
Common share repurchased (in shares)
 
(489,801)
 
 
 
 
 
Dividends declared - common shares outstanding
(15,211)
   
   
   
(15,211)
   
   
Dividends declared - restricted stock units
(64)
   
   
47 
(111)
   
   
Balance at Jun. 30, 2014
$ 668,662 
$ 5 
$ (484,560)
$ 545,624 
$ 595,911 
$ 10,664 
$ 1,018 
Balance (in shares) at Jun. 30, 2014
44,715,637 
44,715,637 
 
 
 
 
 
Condensed Consolidated Statement of Equity (Parenthetical) (USD $)
In Thousands, unless otherwise specified
6 Months Ended
Jun. 30, 2014
Statement of Stockholders' Equity [Abstract]
 
Other Comprehensive Income (Loss), Unrealized Holding Gain (Loss) on Securities Arising During Period, Tax
$ 219 
Other Comprehensive Income (Loss), Reclassification Adjustment for Sale of Securities Included in Net Income, Tax
$ 129 
Condensed Consolidated Statements of Cash Flows (USD $)
In Thousands, unless otherwise specified
6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Operating activities
 
 
Consolidated net income (loss)
$ 16,572 
$ 60,675 
Adjustments to reconcile consolidated net income to net cash flows from operating activities:
 
 
Depreciation and amortization
25,778 
22,601 
Deferred income taxes
(2,638)
(38)
Stock-based compensation expense
8,302 
7,737 
Provision for bad debt
(326)
461 
Equity in net income of unconsolidated entities
(1,096)
(857)
Excess tax benefits from stock-option exercises and vesting of restricted stock units
(1,913)
(3,842)
Equity Method Investments Holding Gain
5,168 
3,713 
Other, net
(703)
688 
Changes in operating assets and liabilities, net of effects of acquisitions:
 
 
Accounts receivable
(19,340)
524 
Other assets
163 
(3,465)
Accounts payable and accrued liabilities
61,196 
638 
Accrued compensation
(8,687)
(19,581)
Income taxes- current
(12,169)
13,693 
Deferred revenue
8,802 
11,023 
Deferred rent
(996)
(872)
Other liabilities
(1,089)
(537)
Cash provided by operating activities
66,688 
85,135 
Investing activities
 
 
Purchases of investments
(7,715)
(82,299)
Proceeds from maturities and sales of investments
95,499 
96,128 
Capital expenditures
(30,799)
(18,881)
Other, net
259 
436 
Cash used for investing activities
(7,203)
(15,693)
Financing activities
 
 
Proceeds from stock-option exercises, net
2,072 
2,810 
Employee taxes withheld for restricted stock units
(5,003)
(5,157)
Excess tax benefits from stock-option exercises and vesting of restricted stock units
1,913 
3,842 
Common shares repurchased
(36,720)
(53,937)
Dividends paid
(15,309)
(5,889)
Other, net
14 
(50)
Cash provided by (used for) financing activities
(53,033)
(58,381)
Effect of exchange rate changes on cash and cash equivalents
1,642 
(5,140)
Net increase (decrease) in cash and cash equivalents
8,094 
5,921 
Cash and cash equivalents-beginning of period
168,160 
163,889 
Cash and cash equivalents-end of period
176,254 
169,810 
Supplemental disclosure of cash flow information:
 
 
Cash paid for income taxes
19,891 
14,511 
Supplemental information of non-cash investing and financing activities:
 
 
Unrealized gain on available-for-sale investments
270 
418 
Equipment obtained under long-term financing arrangement
0 
4,860 
Payments to Acquire Businesses, Net of Cash Acquired
64,447 
11,125 
Proceeds from Divestiture of Businesses
0 
957 
Purchases of equity- and cost-method investments
$ 0 
$ 909 
Basis of Presentation of Interim Financial Information
Basis of Presentation of Interim Financial Information
Basis of Presentation of Interim Financial Information
 
The accompanying condensed consolidated financial statements of Morningstar, Inc. and subsidiaries (Morningstar, we, our, the Company) have been prepared to conform to the rules and regulations of the Securities and Exchange Commission (SEC). The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amount of assets, liabilities, revenue, and expenses. Actual results could differ from those estimates. In the opinion of management, the statements reflect all adjustments, which are of a normal recurring nature, necessary to present fairly our financial position, results of operations, equity, and cash flows. These financial statements and notes are unaudited and should be read in conjunction with our Audited Consolidated Financial Statements and Notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2013, filed with the SEC on February 28, 2014.

Certain prior period amounts have been reclassified to conform to our current period's presentation. We now include development expense in the cost of revenue category. We have reclassified development expense to include it in cost of revenue for all periods presented. We previously reported development expense as a separate operating expense category.

Separately, as a result of our recent reorganization (including new positions created, changes in focus for some existing roles, and the refinement of employee cost categorizations as we moved to a more centralized structure), approximately 180 net positions shifted from the general and administrative and sales and marketing categories to cost of revenue. For the first six months of 2014 as compared with the same period in 2013, changes related to our more centralized organizational structure added $14 million of compensation expense to cost of revenue, and reduced the compensation expense in our sales and marketing and general and administrative expense categories by $8 million and $6 million, respectively. These changes did not affect our total operating expense or operating income for any of the periods presented.

The acronyms that appear in the Notes to our Unaudited Condensed Consolidated Financial Statements refer to the following:
 
ASC: Accounting Standards Codification
ASU: Accounting Standards Update
FASB: Financial Accounting Standards Board
 
Correction
Correction
Correction

In 2014, we identified and corrected an immaterial classification error related to the current and long-term balance for deferred rent included on our Consolidated Balance Sheets as of December 31, 2013. The correcting entries had the effect of decreasing accounts payable and accrued liabilities by $10.7 million and increasing deferred rent (long-term) by the same amount. The financial statements have been corrected to reduce the current balance and increase the long-term balance as shown in the table below:
 
 
As of December 31, 2013
($000)
 
Previously Reported

 
Correction

 
As Corrected

Accounts payable and accrued liabilities
 
$
52,877

 
$
(10,746
)
 
$
42,131

Deferred rent
 
$
13,192

 
$
10,746

 
$
23,938

Summary of Significant Accounting Policies
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies

We discuss our significant accounting policies in Note 2 of our Audited Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2013, filed with the SEC on February 28, 2014.

In addition, effective January 1, 2014, we adopted FASB ASU No. 2013-05, Foreign Currency Matters (Topic 830): Parent's Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or an Investment in a Foreign Entity (a consensus of the FASB Emerging Issues Task Force). ASU No. 2013-05 specifies that when a reporting entity (parent) ceases to have a controlling financial interest in a subsidiary or group of assets that is a business within a foreign entity, the parent is required to apply the guidance in Subtopic 830-30 to release any related cumulative translation adjustment into net income. Accordingly, the cumulative translation adjustment should be released into net income only if the sale or transfer results in the complete or substantially complete liquidation of the foreign entity in which the subsidiary or group of assets had resided. Additionally, the amendments in this update clarify that the sale of an investment in a foreign entity includes both (1) events that result in the loss of a controlling financial interest in a foreign entity and (2) events that results in an acquirer obtaining control of an acquiree in which it held an equity interest immediately before the acquisition date (sometimes referred to as a step acquisition). The currency translation adjustment should be released into net income upon the occurrence of those events. The adoption of ASU No. 2013-05 did not have a material effect on our consolidated financial statements.

We also adopted FASB ASU No. 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (a consensus of the FASB Emerging Issues Task Force), effective January 1, 2014. This update requires an entity to present an unrecognized tax benefit as a reduction of a deferred tax asset for a net operating loss (NOL) carryforward, or similar tax loss or tax credit carryforward, rather than as a liability when (1) the uncertain tax position would reduce the NOL or other carryforward under the tax law of the applicable jurisdiction and (2) the entity intends to use the deferred tax asset for that purpose. The update does not require new recurring disclosures. The adoption of ASU No. 2013-11 did not have a material effect on our consolidated financial statements.

On May 28, 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The new standard is effective for us on January 1, 2017. Early application is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. We are evaluating the effect that ASU 2014-09 will have on our consolidated financial statements and related disclosures. We have not yet selected a transition method nor have we determined the effect of the standard on our ongoing financial reporting.
Goodwill and Other Intangible Assets
Goodwill and Other Intangible Assets
Goodwill and Other Intangible Assets

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 preliminary estimated fair value of $54,006,000 includes $40,525,000 in cash paid to acquire the remaining 81.3% interest in HelloWallet and pay off HelloWallet's indebtedness as well as $13,481,000 related to the 18.7% of HelloWallet we previously held. We recorded a preliminary non-cash holding gain of $5,168,000 for the difference between the fair value and the book value of our previously held investment. The gain is included in non-operating income in our Unaudited Condensed Consolidated Statement of Income.

The preliminary allocation of the purchase price will be finalized upon the completion of the fair value analysis of the acquired assets and liabilities, including the preliminary intangible assets. We have not yet obtained all of the information related to the fair value of the acquired assets and liabilities related to the acquisition to finalize the purchase price allocation. The primary areas of the preliminary purchase price allocation that are not yet finalized relate to the valuation of the identifiable intangible assets and income taxes.

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 receipt of the final valuation:
 
 
($000)

Cash and cash equivalents
 
$
3,739

Accounts receivable and other current assets
 
150

Other current and non-current assets
 
318

Deferred tax asset
 
7,340

Intangible assets
 
9,460

Goodwill
 
40,472

Deferred revenue
 
(2,897
)
Deferred tax liability
 
(3,595
)
Other current and non-current liabilities
 
(981
)
Total fair value of HelloWallet
 
$
54,006



The preliminary allocation includes $9,460,000 of acquired intangible assets, as follows:
 
 
($000)

 
Weighted Average Useful Life (years)
Technology based assets
 
6,670

 
5
Intellectual property (trademarks and trade names)
 
169

 
3
Non-competition agreement
 
2,621

 
5
Total intangible assets
 
$
9,460

 
5


We recognized a preliminary deferred tax liability of $3,595,000 mainly because the amortization expense related to certain intangible assets is not deductible for income tax purposes. The fair value of the acquired intangible assets and the deferred tax liability are preliminary pending receipt of the final valuation for these intangible assets.

We recognized a preliminary deferred tax asset of $7,340,000 mainly because of net operating losses of HelloWallet which will become available to Morningstar.

Preliminary goodwill of $40,472,000 represents the premium 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 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 $27,949,000 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 preliminary allocation of the purchase price will be finalized upon the completion of the fair value analysis of the acquired assets and liabilities, including the preliminary intangible assets. We have not yet obtained all of the information related to the fair value of the acquired assets and liabilities related to the acquisition to finalize the purchase price allocation. The primary areas of the preliminary purchase price allocation that are not yet finalized relate to the valuation of the identifiable intangible assets and income taxes.

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

 
 
($000)

Cash and cash equivalents
 
$
287

Accounts receivable and other current assets
 
152

Deferred tax asset
 
3,685

Other non-current assets
 
257

Intangible assets
 
8,681

Goodwill
 
18,778

Deferred revenue
 
(79
)
Deferred tax liability
 
(3,299
)
Other current and non-current liabilities
 
(513
)
Total purchase price
 
$
27,949



The preliminary allocation includes $8,681,000 of acquired intangible assets, as follows:

 
 
($000)

 
Weighted Average Useful Life (years)
Customer-related assets
 
$
5,506

 
24
Technology-based assets
 
3,020

 
4.5
Intellectual property (trademarks and trade names)
 
47

 
1
Non-competition agreement
 
108

 
3
Total intangible assets
 
$
8,681

 
19


We recognized a preliminary deferred tax liability of $3,299,000 mainly because the amortization expense related to certain intangible assets is not deductible for income tax purposes. The fair value of the acquired intangible assets and the deferred tax liability are preliminary pending receipt of the final valuation for these intangible assets.

We recognized a preliminary deferred tax asset of $3,685,000 mainly because of net operating losses of ByAllAccounts which will become available to Morningstar.


Preliminary goodwill value of $18,778,000 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 December 31, 2013 to June 30, 2014:
 
 
 
($000)

Balance as of December 31, 2013
 
$
326,450

Acquisitions of HelloWallet and ByAllAccounts
 
59,250

Foreign currency translation
 
3,137

Balance as of June 30, 2014
 
$
388,837



We did not record any impairment losses in the first six months of 2014 or 2013. We perform our annual impairment reviews in the fourth quarter.

Intangible Assets

The following table summarizes our intangible assets: 
 
 
As of June 30, 2014
 
As of December 31, 2013
($000)
 
Gross

 
Accumulated
Amortization

 
Net

 
Weighted
Average
Useful  Life
(years)
 
Gross

 
Accumulated
Amortization

 
Net

 
Weighted
Average
Useful  Life
(years)
Intellectual property
 
$
30,177

 
$
(24,741
)
 
$
5,436

 
9
 
$
29,477

 
$
(23,128
)
 
$
6,349

 
9
Customer-related assets
 
148,000

 
(80,782
)
 
67,218

 
12
 
141,833

 
(74,311
)
 
67,522

 
12
Supplier relationships
 
240

 
(114
)
 
126

 
20
 
240

 
(108
)
 
132

 
20
Technology-based assets
 
90,979

 
(54,729
)
 
36,250

 
9
 
80,489

 
(50,673
)
 
29,816

 
9
Non-competition agreement
 
4,428

 
(1,679
)
 
2,749

 
5
 
1,661

 
(1,571
)
 
90

 
4
Total intangible assets
 
$
273,824

 
$
(162,045
)
 
$
111,779

 
11
 
$
253,700

 
$
(149,791
)
 
$
103,909

 
10
 
The following table summarizes our amortization expense related to intangible assets:
 
 
Three months ended June 30
 
Six months ended June 30
($000)
 
2014

 
2013

 
2014

 
2013

Amortization expense
 
$
5,501

 
$
5,337

 
$
10,643

 
$
10,962


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

We expect intangible amortization expense for 2014 and subsequent years as follows:
 
 
($000)

2014
 
$
22,493

2015
 
22,669

2016
 
18,071

2017
 
13,406

2018
 
11,190

Thereafter
 
34,593


 
Our estimates of future amortization expense for intangible assets may be affected by additional acquisitions, divestitures, changes in the estimated average useful life, and currency translations.

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:

 
 
Three months ended June 30
 
Six months ended June 30
(in thousands, except per share amounts)
 
2014

 
2013

 
2014

 
2013

 
 
 
 
 
 
 
 
 
Basic net income (loss) per share attributable to Morningstar, Inc.:
 
 

 
 

 
 
 
 
Net income (loss) attributable to Morningstar, Inc.:
 
$
(9,769
)
 
$
31,121

 
$
16,607

 
$
60,739

Less: Distributed earnings available to participating securities
 
(1
)
 
(2
)
 
(4
)
 
(5
)
Less: Undistributed earnings available to participating securities
 
3

 
(9
)
 
—

 
(18
)
Numerator for basic net income (loss) per share — undistributed and distributed earnings available to common shareholders
 
$
(9,767
)
 
$
31,110

 
$
16,603

 
$
60,716

 
 
 
 
 
 
 
 
 
Weighted average common shares outstanding
 
44,777

 
46,400

 
44,778

 
46,403

 
 
 
 
 
 
 
 
 
Basic net income (loss) per share attributable to Morningstar, Inc.
 
$
(0.22
)
 
$
0.67

 
$
0.37

 
$
1.31

 
 
 
 
 
 
 
 
 
Diluted net income (loss) per share attributable to Morningstar, Inc.:
 
 
 
 
 
 
 
 
Numerator for basic net income (loss) per share — undistributed and distributed earnings available to common shareholders
 
$
(9,767
)
 
$
31,110

 
$
16,603

 
$
60,716

Add: Undistributed earnings allocated to participating securities
 
(3
)
 
9

 
—

 
18

Less: Undistributed earnings reallocated to participating securities
 
3

 
(9
)
 
—

 
(17
)
Numerator for diluted net income per share — undistributed and distributed earnings available to common shareholders
 
$
(9,767
)
 
$
31,110

 
$
16,603

 
$
60,717

 
 


 


 


 


Weighted average common shares outstanding
 
44,777

 
46,400

 
44,778

 
46,403

Net effect of dilutive stock options and restricted stock units
 
—

 
453

 
261

 
353

Weighted average common shares outstanding for computing diluted income per share
 
44,777

 
46,853

 
45,039

 
46,756

 
 


 


 


 


Diluted net income (loss) per share attributable to Morningstar, Inc.
 
$
(0.22
)
 
$
0.66

 
$
0.37

 
$
1.30


Because of our net loss for the quarter ended June 30, 2014, the assumed exercise of stock options and vesting of restricted stock units outstanding would have had an anti-dilutive effect and were therefore excluded from the computation of diluted net loss per share.

The following table shows the number of weighted average stock options, restricted stock units, performance share awards, and restricted stock excluded from our calculation of diluted earnings per share because their inclusion would have been anti-dilutive:
 
 
Three months ended June 30
 
Six months ended June 30
(in thousands)
 
2014

 
2013

 
2014

 
2013

Weighted average stock options
 
160

 
—

 
—

 
—

Weighted average restricted stock units
 
108

 
2

 
18

 
22

Weighted average performance share awards
 
10

 
—

 
—

 
—

Weighted average restricted stock
 
3

 

 
6

 

Total
 
281

 
2

 
24

 
22


These stock options, restricted stock units and performance share awards could be included in the calculation in the future.

Segment and Geographical Area Information
Segment and Geographical Area Information
Segment, Enterprise-Wide, and Geographical Area Information
 
Segment Information

Beginning with the third quarter of 2013, we revised our segment structure to reflect our shift to a more centralized organizational structure. We now report our results in a single reportable segment, which reflects how our chief operating decision maker allocates resources and evaluates our financial results.

Because we have one reportable segment, all required financial segment information can be found directly in the Unaudited Condensed Consolidated Financial Statements.

The accounting policies for our single reportable segment are the same as those described in “Note 2. Summary of Significant Accounting Policies” included in our Annual Report on Form 10-K for the year ended December 31, 2013. We evaluate the performance of our reporting segment based on revenue and operating income.

Products and Services Information

We derive revenue from two product groups. The investment information product group includes all of our data, software, and research products and services. These products are typically sold through subscriptions or license agreements. The investment management product group includes all of our asset management operations, which earn the majority of their revenue from asset-based fees. The table below summarizes our revenue by product group:

External revenue by product group
 
 
 
 
 
 
 
 
 
 
 
Three months ended June 30
 
Six months ended June 30
($000)
 
2014

 
2013

 
2014

 
2013

 
Investment information
 
$
149,527

 
$
140,031

 
$
290,797

 
$
275,116

 
Investment management
 
39,858

 
35,397

 
79,753

 
69,168

 
Consolidated revenue
 
$
189,385

 
$
175,428

 
$
370,550

 
$
344,284

 


Geographical Area Information

The tables below summarize our revenue and long-lived assets by geographical area:

External revenue by geographical area
 
 
 
 
 
 
 
 
 
 
Three months ended June 30
 
Six months ended June 30
($000)
 
2014

 
2013

 
2014

 
2013

United States
 
$
136,453

 
$
126,335

 
$
266,405

 
$
247,748

 
 
 
 
 
 
 
 
 
United Kingdom
 
15,544

 
14,015

 
30,882

 
27,168

Continental Europe
 
15,921

 
13,993

 
31,547

 
27,160

Australia
 
9,233

 
9,176

 
17,401

 
18,528

Canada
 
7,542

 
7,812

 
15,209

 
15,548

Asia
 
3,888

 
3,449

 
7,597

 
6,873

Other
 
804

 
648

 
1,509

 
1,259

Total International
 
52,932

 
49,093

 
104,145

 
96,536

 
 
 
 
 
 
 
 
 
Consolidated revenue
 
$
189,385

 
$
175,428

 
$
370,550

 
$
344,284



Long-lived assets by geographical area
 
 
 
 
 
 
As of June 30
 
As of December 31
($000)
 
2014

 
2013

United States
 
$
90,924

 
$
84,321

 
 
 
 
 
United Kingdom
 
6,720

 
6,873

Continental Europe
 
1,591

 
1,873

Australia
 
977

 
1,051

Canada
 
1,041

 
1,275

Asia
 
8,548

 
9,479

Other
 
99

 
114

Total International
 
18,976

 
20,665

 
 
 
 
 
Consolidated property, equipment, and capitalized software, net
 
$
109,900

 
$
104,986

Investments and Fair Value Measurements
Investments and Fair Value Measurements
Investments and Fair Value Measurements
 
We account for our investments in accordance with FASB ASC 320, Investments—Debt and Equity Securities. We classify our investments in three categories: available-for-sale, held-to-maturity, and trading. We monitor the concentration, diversification, maturity, and liquidity of our investment portfolio, which is primarily invested in fixed-income securities, and classify our investment portfolio as shown below:
 
 
 
As of June 30
 
As of December 31
($000)
 
2014

 
2013

Available-for-sale
 
$
16,015

 
$
91,461

Held-to-maturity
 
20,422

 
31,214

Trading securities
 
8,259

 
7,732

Total
 
$
44,696

 
$
130,407




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 June 30, 2014
 
As of December 31, 2013
($000)
 
Cost

 
Unrealized
Gain

 
Unrealized
Loss

 
Fair
Value

 
Cost

 
Unrealized
Gain

 
Unrealized
Loss

 
Fair
Value

Available-for-sale:
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Government obligations
 
$
3,396

 
$
2

 
$
—

 
$
3,398

 
$
19,693

 
$
8

 
$
(3
)
 
$
19,698

Corporate bonds
 
—

 
—

 
—

 
—

 
49,913

 
22

 
(124
)
 
49,811

Foreign obligations
 
—

 
—

 
—

 
—

 
505

 
—

 
(2
)
 
503

Commercial paper
 
—

 
—

 
—

 
—

 
9,482

 
7

 
—

 
9,489

Equity securities and exchange-traded funds
 
9,311

 
1,100

 
(118
)
 
10,293

 
8,872

 
1,011

 
(141
)
 
9,742

Mutual funds
 
2,137

 
276

 
(89
)
 
2,324

 
2,095

 
221

 
(98
)
 
2,218

Total
 
$
14,844

 
$
1,378

 
$
(207
)
 
$
16,015

 
$
90,560

 
$
1,269

 
$
(368
)
 
$
91,461

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Held-to-maturity:
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Certificates of deposit
 
$
20,422

 
$
—

 
$
—

 
$
20,422

 
$
31,214

 
$
—

 
$
—

 
$
31,214


 
As of June 30, 2014 and December 31, 2013, investments with unrealized losses for greater than a 12-month period were not material to the Condensed Consolidated Balance Sheets and were not deemed to have other than temporary declines in value.

The table below shows the cost and fair value of investments classified as available-for-sale and held-to-maturity based on their contractual maturities as of June 30, 2014 and December 31, 2013. The expected maturities of certain fixed-income securities may differ from their contractual maturities because some of these holdings have call features that allow the issuers the right to prepay obligations without penalties.
 
 
 
As of June 30, 2014
 
As of December 31, 2013
($000)
 
Cost

 
Fair Value

 
Cost

 
Fair Value

Available-for-sale:
 
 

 
 

 
 

 
 

Due in one year or less
 
$
3,396

 
$
3,398

 
$
45,486

 
$
45,402

Due in one to two years
 
—

 
—

 
34,107

 
34,099

Equity securities, exchange-traded funds, and mutual funds
 
11,448

 
12,617

 
10,967

 
11,960

    Total
 
$
14,844

 
$
16,015

 
$
90,560

 
$
91,461

 
 
 
 
 
 
 
 
 
Held-to-maturity:
 
 

 
 

 
 

 
 

Due in one year or less
 
$
20,417

 
$
20,417

 
$
31,210

 
$
31,210

Due in one to three years
 
5

 
5

 
4

 
4

Total
 
$
20,422

 
$
20,422

 
$
31,214

 
$
31,214


 
As of June 30, 2014 and December 31, 2013, held-to-maturity investments included a $1,500,000 certificate of deposit held primarily as collateral against bank guarantees for our office leases, primarily in Australia.

The following table shows the realized gains and losses arising from sales of our investments classified as available-for-sale recorded in our Condensed Consolidated Statements of Income: 
 
 
Three months ended June 30
 
Six months ended June 30
($000)
 
2014

 
2013

 
2014

 
2013

Realized gains
 
$
417

 
$
662

 
$
578

 
$
2,226

Realized losses
 
(46
)
 
(239
)
 
(231
)
 
(1,078
)
Realized gains, net
 
$
371

 
$
423

 
$
347

 
$
1,148


 
We determine realized gains and losses using the specific identification method.

The following table shows the net unrealized gains (losses) on trading securities as recorded in our Condensed Consolidated Statements of Income:
 
 
 
Three months ended June 30
 
Six months ended June 30
($000)
 
2014

 
2013

 
2014

 
2013

Unrealized gains (losses), net
 
$
(224
)
 
$
(45
)
 
$
(155
)
 
$
273



The fair value of our assets subject to fair value measurements and that are measured at fair value on a recurring basis using the fair value hierarchy and the necessary disclosures under FASB ASC 820, Fair Value Measurement, are as follows:
 
 
 
Fair Value
 
Fair Value Measurements as of June 30, 2014
 
 
as of
 
Using Fair Value Hierarchy
($000)
 
June 30, 2014
 
Level 1

 
Level 2

 
Level 3

Available-for-sale investments:
 
 

 
 

 
 

 
 

Government obligations
 
$
3,398

 
$
—

 
$
3,398

 
$
—

Corporate bonds
 
—

 
—

 
—

 
—

Foreign obligations
 
—

 
—

 
—

 
—

Commercial paper
 
—

 
—

 
—

 
—

Equity securities and exchange-traded funds
 
10,293

 
10,293

 
—

 
—

Mutual funds
 
2,324

 
2,324

 
—

 
—

Trading securities
 
8,259

 
8,259

 
—

 
—

Cash equivalents
 
2,691

 
2,691

 
—

 
—

Total
 
$
26,965

 
$
23,567

 
$
3,398

 
$
—

 
 
 
Fair Value
 
Fair Value Measurements as of December 31, 2013
 
 
as of
 
Using Fair Value Hierarchy
($000)
 
December 31, 2013
 
Level 1

 
Level 2

 
Level 3

Available-for-sale investments:
 
 

 
 

 
 

 
 

Government obligations
 
$
19,698

 
$
—

 
$
19,698

 
$
—

Corporate bonds
 
49,811

 
—

 
49,811

 
—

Foreign obligations
 
503

 
—

 
503

 
—

Commercial paper
 
9,489

 
—

 
9,489

 
—

Equity securities and exchange-traded funds
 
9,742

 
9,742

 
—

 
—

Mutual funds
 
2,218

 
2,218

 
—

 
—

Trading securities
 
7,732

 
7,732

 
—

 
—

Cash equivalents
 
925

 
925

 
—

 
—

Total
 
$
100,118

 
$
20,617

 
$
79,501

 
$
—


 
Level 1:
Valuations based on quoted prices in active markets for identical assets or liabilities that we have the ability to access.
Level 2:
Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.
Level 3:
Valuations based on inputs that are unobservable and significant to the overall fair value measurement.

Based on our analysis of the nature and risks of our investments in equity securities and mutual funds, we have determined that presenting each of these investment categories in the aggregate is appropriate.

We measure the fair value of money market funds, mutual funds, equity securities, and exchange-traded funds based on quoted prices in active markets for identical assets or liabilities. All other financial instruments were valued either based on recent trades of securities in inactive markets or based on quoted market prices of similar instruments and other significant inputs derived from observable market data. We did not hold any securities categorized as Level 3 as of June 30, 2014 and December 31, 2013.
Investments in Unconsolidated Entities
Investments in Unconsolidated Entities
Investments in Unconsolidated Entities
 
Our investments in unconsolidated entities consist primarily of the following:
 
 
As of June 30


As of December 31

($000)
 
2014


2013

Investment in MJKK
 
$
22,173

 
$
21,782

Other equity method investments
 
5,788

 
6,166

Investments accounted for using the cost method
 
2,326

 
10,766

Total investments in unconsolidated entities
 
$
30,287

 
$
38,714


 
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 June 30

 
As of December 31

 
 
2014

 
2013

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

 
 

Japanese yen (¥000)
 
¥
7,567,560

 
¥
9,824,068

Equivalent U.S. dollars ($000)
 
$
74,616

 
$
94,999



Other Equity Method Investments. As of June 30, 2014 and December 31, 2013, 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 June 30, 2014 and December 31, 2013. YCharts is a technology company that provides stock research and analysis. Our ownership interest in YCharts was approximately 22% as of June 30, 2014 and December 31, 2013.

We did not record any impairment losses on our equity method investments in the first six months of 2014 or 2013.
 
Cost Method Investments. As of June 30, 2014 and December 31, 2013, our cost method investments consist of a minority investment in Pitchbook Data, Inc. (Pitchbook). Pitchbook offers detailed data and information about private equity transactions, investors, companies, limited partners, and service providers.

As of December 31, 2013, our cost method investments also included a minority investment in HelloWallet LLC (HelloWallet). In June 2014, we purchased the remaining interest in HelloWallet. See Note 4 for additional information concerning our acquisition of HelloWallet.

We did not record any impairment losses on our cost method investments in the first six months of 2014 or 2013.
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, stock options, performance share awards, restricted stock units, and restricted stock. We granted stock options, restricted stock units, and restricted stock under the 2004 Plan.

All of our employees and our non-employee directors are eligible for awards under the 2011 Plan.

Grants awarded under the 2011 Plan or the 2004 Plan that are forfeited, canceled, settled, or otherwise terminated without a distribution of shares, or shares withheld by us in connection with the exercise of options, will be available for awards under the 2011 Plan. Any shares subject to awards under the 2011 Plan, but not under the 2004 Plan, that are withheld by us in connection with the payment of any required income tax withholding will be available for awards under the 2011 Plan.

The following table summarizes the number of shares available for future grants under our 2011 Plan:
 
 
 
As of June 30

(in thousands)
 
2014

Shares available for future grants
 
4,248


 
Accounting for Stock-Based Compensation Awards
 
The following table summarizes our stock-based compensation expense and the related income tax benefit we recorded:
 
 
Three months ended June 30
 
Six months ended June 30
($000)
 
2014

 
2013

 
2014

 
2013

Restricted stock units
 
$
3,983

 
$
3,734

 
$
7,675

 
$
7,297

Restricted stock
 
97

 
97

 
194

 
194

Performance share awards
 
173

 
—

 
200

 
—

Stock options
 
110

 
123

 
233

 
246

Total stock-based compensation expense
 
$
4,363

 
$
3,954

 
$
8,302

 
$
7,737

 
 


 


 


 


Income tax benefit related to the stock-based compensation expense
 
$
1,283

 
$
1,068

 
$
2,362

 
$
2,098


 
The following table summarizes the amount of unrecognized stock-based compensation expense as of June 30, 2014 and the expected number of months over which the expense will be recognized:
 
 
Unrecognized stock-based compensation expense ($000)

 
Expected amortization period (months)
Restricted stock units
 
$
39,567

 
36
Restricted stock
 
323

 
10
Performance share awards
 
1,716

 
30
Stock options
 
353

 
11
Total unrecognized stock-based compensation expense
 
$
41,959

 
35


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. Our largest 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 to employees vest ratably over a four-year period. Restricted stock units granted to non-employee directors vest ratably over a three-year period. For restricted stock units granted through December 31, 2008, employees could elect to defer receipt of the Morningstar common stock issued upon vesting of the restricted stock unit.

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 the 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 first six months of 2014:
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
 
245,350

 
—

 
245,350

 
73.11

Dividend equivalents
 
1,528

 
76

 
1,604

 
57.50

Vested
 
(231,500
)
 
—

 
(231,500
)
 
57.48

Issued
 
—

 
(2,054
)
 
(2,054
)
 
53.54

Forfeited
 
(17,874
)
 
—

 
(17,874
)
 
57.22

RSUs Outstanding - June 30, 2014
 
677,506

 
14,704

 
692,210

 
$
67.37


 
Restricted Stock
 
In conjunction with our acquisition of Realpoint LLC in May 2010, we issued 199,174 shares of restricted stock to the selling employee-shareholders under the 2004 Stock Incentive Plan. The restricted stock vests ratably over a five-year period from the acquisition date and may be subject to forfeiture if the holder terminates his or her employment during the vesting period.

Because of the terms of the restricted stock agreements prepared in conjunction with the Realpoint acquisition, we account for the grant of restricted stock as stock-based compensation expense and not as part of the acquisition consideration.

We measured the fair value of the restricted stock on the date of grant based on the closing market price of our common stock on the day prior to the grant. We amortize the fair value of $9,363,000 to stock-based compensation expense over the vesting period. We have assumed that all of the remaining restricted stock will ultimately vest, and therefore have not incorporated a forfeiture rate for purposes of determining the stock-based compensation expense.
 
Performance Share Awards

In 2014, executive officers, other than Joe Mansueto, were granted performance share awards pursuant to which each executive becomes entitled 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.

The performance conditions are not considered in the determination of the grant date fair value for these awards. We measure the fair value of our performance share awards on the date of grant based 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, based on the satisfaction of the performance condition that is most likely to be satisfied over the three-year service period ratably over the vesting period.

Information as of June 30, 2014 regarding the Company's target performance share awards granted and shares that would be issued at current performance levels for performance share awards granted during the first six months of 2014 is as follows:
 
 
As of June 30, 2014

Target performance share awards granted
 
23,685

Fair value (1)
 
$
80.91

Number of shares that would be issued based on current performance levels
 
23,685

Unamortized expense, based on current performance levels
 
$
1,716,000


(1) Represents the closing market price of Morningstar's stock on March 14, 2014, which is the last closing price prior to the grant date.

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. Almost all of the options granted under the 2004 Stock Incentive Plan have a premium feature in which the exercise price increases over the term of the option at a rate equal to the 10-year Treasury bond yield as of the date of grant. Options granted under the 2011 Plan have an exercise price equal to the fair market value on the grant date.

The following tables summarize stock option activity in the first six months of 2014 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. 
Options Granted At an Exercise Price Below the Fair Value Per Share on the Grant Date
 
Underlying
Shares

 
Weighted
Average
Exercise
Price

Options outstanding—December 31, 2013
 
179,559

 
$
21.47

Granted
 
—

 
—

Canceled
 
—

 
—

Exercised
 
(26,420
)
 
21.67

Options outstanding—June 30, 2014
 
153,139

 
21.91

 
 
 
 
 
Options exercisable—June 30, 2014
 
153,139

 
$
21.91


 
All Other Option Grants, Excluding Activity Shown Above
 
Underlying
Shares

 
Weighted
Average
Exercise
Price

Options outstanding—December 31, 2013
 
253,972

 
$
36.48

Granted
 
—

 
—

Canceled
 
—

 
—

Exercised
 
(47,898
)
 
30.58

Options outstanding—June 30, 2014
 
206,074

 
38.27

 
 
 
 
 
Options exercisable—June 30, 2014
 
189,604

 
$
36.58

 
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:
 
 
 
Six months ended June 30
($000)
 
2014

 
2013

Intrinsic value of options exercised
 
$
3,760

 
$
8,170


 

The table below shows additional information for options outstanding and exercisable as of June 30, 2014:
 
 
 
Options Outstanding
 
Options Exercisable
Range of Exercise Prices
 
Number of  Options

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

 
Aggregate
Intrinsic
Value
($000)

 
Exercisable Shares

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

 
Aggregate Intrinsic Value ($000)

$21.61 - $26.96
 
280,732

 
0.62
 
$
24.20

 
$
13,364

 
280,732

 
0.62
 
$
24.20

 
$
13,364

$39.68 - $49.92
 
6,806

 
1.43
 
48.18

 
161

 
6,806

 
1.43
 
48.18

 
161

$57.28 - $59.35
 
71,675

 
7.02
 
57.46

 
1,029

 
55,205

 
7.02
 
57.39

 
758

$21.61 - $59.35
 
359,213

 
1.91
 
$
31.29

 
$
14,554

 
342,743

 
1.67
 
$
30.03

 
$
14,283

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Vested or Expected to Vest
 
 
 
 
 
 
 
 
 
 
 
 
 
$21.61 - $59.35
 
359,213

 
1.91
 
$
31.29

 
$
14,554

 
 
 
 
 
 
 
 

 
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 June 30, 2014. The intrinsic value is based on our closing stock price of $71.81 on that date.

Excess Tax Benefits Related to Stock-Based Compensation
 
FASB ASC 718, Compensation—Stock Compensation, requires that we classify the cash flows that result from excess tax benefits as financing cash flows. Excess tax benefits correspond to the portion of the tax deduction taken on our income tax return that exceeds the amount of tax benefit related to the compensation cost recognized in our Condensed Consolidated Statements of Operations. The following table summarizes our excess tax benefits:
 
 
Three months ended June 30
 
Six months ended June 30
($000)
 
2014

 
2013

 
2014

 
2013

Excess tax benefits related to stock-based compensation
 
$
1,340

 
$
2,255

 
$
1,913

 
$
3,842

Income Taxes
Income Taxes
Income Taxes

Effective Tax Rate

The following table shows our effective income tax rate for the three and six months ended June 30, 2014 and June 30, 2013:
 
 
 
Three months ended June 30
 
Six months ended June 30
($000)
 
2014

 
2013

 
2014

 
2013

Income (loss) before income taxes and equity in net income of unconsolidated entities
 
$
(18,882
)
 
$
46,695

 
$
20,515

 
$
88,200

Equity in net income of unconsolidated entities
 
497

 
360

 
1,096

 
857

Net loss attributable to the noncontrolling interest
 
5

 
21

 
35

 
64

Total
 
$
(18,380
)
 
$
47,076

 
$
21,646

 
$
89,121

Income tax expense (benefit)
 
$
(8,611
)
 
$
15,955

 
$
5,039

 
$
28,382

Effective tax rate
 
46.8
%
 
33.9
%
 
23.3
%
 
31.8
%

 
Our effective tax rate in the second quarter of 2014 was 46.8%, an increase of 12.9 percentage points compared with the prior-year period. During the second quarter of 2014, we reported a loss before income taxes and equity in net income of unconsolidated entities of $18.9 million, which included a litigation settlement expense of $61.0 million that is deductible for tax purposes. In the same period, we realized a $5.2 million non-taxable gain in connection with the purchase of the remaining ownership interest in HelloWallet. Because of these two items, we reported an income tax benefit of $8.6 million, which is equivalent to a 46.8% effective tax rate.

Our effective tax rate for the first six months of 2014 was 23.3%, which is lower than the statutory rate mainly because of the non-taxable gain of $5.2 million recorded in connection with purchasing the remaining ownership interest in HelloWallet.

Unrecognized Tax Benefits

The table below provides information concerning our gross unrecognized tax benefits as of June 30, 2014 and December 31, 2013. The table also provides the effect these gross unrecognized tax benefits would have on our income tax expense, if they were recognized.
 
 
As of June 30
 
As of December 31
($000)
 
2014

 
2013

Gross unrecognized tax benefits
 
$
11,476

 
$
12,958

Gross unrecognized tax benefits that would affect income tax expense
 
$
11,476

 
$
10,557

Decrease in income tax expense upon recognition of gross unrecognized tax benefits
 
$
9,961

 
$
9,262



Our Condensed Consolidated Balance Sheets include the following liabilities for unrecognized tax benefits. These amounts include interest and penalties, less any associated tax benefits.

 
 
As of June 30
 
As of December 31
Liabilities for Unrecognized Tax Benefits ($000)
 
2014

 
2013

Current liability
 
$
4,490

 
$
6,211

Non-current liability
 
6,712

 
6,012

Total liability for unrecognized tax benefits
 
$
11,202

 
$
12,223



We conduct business globally and, as a result, we file income tax returns in U.S. federal, state, local, and foreign jurisdictions. We are currently under audit by federal and various state and local tax authorities in the United States, as well as tax authorities in certain non-U.S. jurisdictions. It is possible, though not likely, that the examination phase of some of these audits will conclude in 2014. It is not possible to estimate the effect of current audits on previously recorded unrecognized tax benefits.

We have not provided federal and state income taxes on accumulated undistributed earnings of certain foreign subsidiaries because these earnings have been permanently reinvested. Approximately 69% of our cash, cash equivalents, and investments as of June 30, 2014 was held by our operations outside of the United States. As such, we believe that our cash balances and investments in the United States, along with cash generated from our U.S. operations, will be sufficient to meet our U.S. operating and cash needs for the foreseeable future, without requiring us to repatriate earnings from these foreign subsidiaries. It is not reasonably practical to determine the amount of the unrecognized deferred tax liability related to the undistributed earnings.
 
Certain of our non-U.S. operations have incurred net operating losses (NOLs) which may become deductible to the extent these operations become profitable. For each of our operations, we evaluate whether it is more likely than not that the tax benefits related to NOLs will be realized. As part of this evaluation, we consider evidence such as tax planning strategies, historical operating results, forecasted taxable income, and recent financial performance. In the year that certain non-U.S. operations record a loss, we do not recognize a corresponding tax benefit, thus increasing our effective tax rate. Upon determining that it is more likely than not that the NOLs will be realized, we reduce the tax valuation allowances related to these NOLs, which results in a reduction to our income tax expense and our effective tax rate in the period.

Contingencies
Contingencies
Contingencies

Life's Good S.T.A.B.L. Hedge Fund

In September 2011, three individual investors in Life's Good S.T.A.B.L. Mortgage hedge fund (LG), Marta Klass, Gregory Martin, and Richard Roellig, filed a complaint in the United States District Court for the Eastern District of Pennsylvania against LG, its principal Robert Stinson, and several other parties, including Morningstar, Inc. (the Klass Matter). The plaintiffs claim that Morningstar committed fraud and aided and abetted the other defendants' breach of fiduciary duty through the 5-star rating LG obtained from Morningstar. The plaintiffs seek unspecified damages. Hedge fund managers self-report their performance data to Morningstar. More than a year before the Klass Matter, in June 2010, the SEC filed suit against LG and other entities claiming they were part of a Ponzi scheme operated by Stinson. As a result, LG and the other entities were placed in court-appointed receivership. Morningstar was not part of the SEC suit or receivership. Since that time, the Receiver, as part of his duties, has been investigating whether to assert claims against third parties. Morningstar is aware of 14 lawsuits filed by the Receiver seeking to recover money for the fund.

In November 2011, Morningstar filed a motion to dismiss the Klass Matter. On behalf of the entities in receivership, the Receiver filed a motion to stay the proceedings because the Receivership Order does not permit suits against the entities in receivership without court permission. The court granted the Receiver's motion and stayed the Klass Matter. In April 2012, the Receiver filed a complaint against Morningstar, in which the Receiver claims that Morningstar is liable for contribution and aiding and abetting Stinson's breach of fiduciary duty and fraud through the 5-star rating LG obtained from Morningstar. The same day the Receiver filed his complaint, Morningstar sought leave from the court to file a countersuit against Stinson and two of his entities-Keystone State Capital Corporation and LG for, among other things, fraud, misrepresentation, and breach of user agreements. In June 2012, the court denied Morningstar's motion for leave to file suit. The court took no position on the merits of Morningstar's claims, and did not preclude us from renewing our motion to file a complaint at a later time, but deferred to the Receiver's request not to subject the receivership estate to additional litigation at this early point in the receivership. A bench trial related to the Receiver’s claims against Morningstar was held between January 13 and January 28, 2014. At trial, the Receiver claimed that Morningstar is liable under a contribution theory for all or part of a $14.5 million disgorgement judgment that the SEC obtained against the entities and individuals in receivership. Morningstar contested liability and damages at trial and believes it is not liable for any amount. The parties filed post-trial proposed findings of fact and conclusions of law on March 14, 2014. It is not known when the court will issue its decision.

We believe the allegations against Morningstar by the Klass plaintiffs and the Receiver have no legal or factual basis, and we plan to continue to vigorously contest the claims. We also intend to refile our affirmative claims against Stinson, Keystone, and LG at a later time consistent with the court's order. We cannot predict the outcome of the proceedings.

We have not provided an estimate of loss or range of loss in connection with this matter because no such estimate can reasonably be made.

Business Logic Holding Corporation

In November 2009, Business Logic Holding Corporation (Business Logic) filed a complaint in the Circuit Court of Cook County, Illinois against Ibbotson Associates, Inc., one of our wholly owned subsidiaries, and Morningstar, Inc. relating to Ibbotson's prior commercial relationship with Business Logic. Business Logic alleged breach of contract and trade secret misappropriation in connection with Ibbotson's development of a proprietary web-service software and user interface that connects plan participant data with the Ibbotson Wealth Forecasting Engine. Ibbotson and Morningstar answered the complaint, and Ibbotson asserted a counterclaim against Business Logic alleging trade secret misappropriation and breach of contract, also seeking damages and injunctive relief.

On July 17, 2014, Morningstar and Ibbotson entered into a settlement agreement with Business Logic relating to this litigation (the Settlement Agreement). Pursuant to the Settlement Agreement, among other things, Morningstar or Ibbotson will pay Business Logic $61.0 million and Business Logic (i) will dismiss with prejudice all claims asserted in the Litigation; (ii) grants releases to Morningstar, Ibbotson, and their clients; and (iii) grants to Morningstar, its affiliates, Ibbotson and their clients an irrevocable license to use the intellectual property at issue in the litigation. In late July 2014, Morningstar paid $15.0 million of the amount owed to Business Logic under the Settlement Agreement and the case was dismissed with prejudice. The Settlement Agreement provides that the remaining $46.0 million be paid on or before August 17, 2014.

Other Proceedings

In addition to these proceedings, we are involved in legal proceedings and litigation that have arisen in the normal course of our business. Although the outcome of a particular proceeding can never be predicted, we do not believe that the result of any of these other matters will have a material adverse effect on our business, operating results, or financial position.
Share Repurchase Program
Share Repurchase Program
Share Repurchase Program
 
We have an ongoing authorization, originally approved by our board of directors in September 2010, and subsequently amended, to repurchase up to $700 million in shares of our outstanding common stock. The authorization expires on December 31, 2015. We may repurchase shares from time to time at prevailing market prices on the open market or in private transactions in amounts that we deem appropriate.

As of June 30, 2014, we had repurchased a total of 7,557,807 shares for $486.5 million under this authorization.
Subsequent Events
Subsequent Events
Subsequent Events

On July 17, 2014, Morningstar and Ibbotson entered into a settlement agreement with Business Logic Holding Corporation (Business Logic). Pursuant to the settlement agreement, Morningstar will pay Business Logic $61.0 million. In July 2014, Morningstar paid $15.0 million of the amount owed to Business Logic under the settlement agreement and the case was dismissed with prejudice. This obligation was accrued as of June 30, 2014 and the corresponding expense is reported as "Litigation settlement" in our Unaudited Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2014. See Note 11, Contingencies, for additional information.
Separately, in July 2014, we established a $75 million single-bank revolving credit facility. The line of credit allows for borrowings from time to time of up to $75 million for general corporate purposes.
Summary of Significant Accounting Policies (Policies)
Reclassification, Policy [Policy Text Block] 
Separately, as a result of our recent reorganization (including new positions created, changes in focus for some existing roles, and the refinement of employee cost categorizations as we moved to a more centralized structure), approximately 180 net positions shifted from the general and administrative and sales and marketing categories to cost of revenue. For the first six months of 2014 as compared with the same period in 2013, changes related to our more centralized organizational structure added $14 million of compensation expense to cost of revenue, and reduced the compensation expense in our sales and marketing and general and administrative expense categories by $8 million and $6 million, respectively. These changes did not affect our total operating expense or operating income for any of the periods presented.
Segment Reporting, Policy [Policy Text Block] 
Beginning with the third quarter of 2013, we revised our segment structure to reflect our shift to a more centralized organizational structure. We now report our results in a single reportable segment, which reflects how our chief operating decision maker allocates resources and evaluates our financial results.

Because we have one reportable segment, all required financial segment information can be found directly in the Unaudited Condensed Consolidated Financial Statements.

The accounting policies for our single reportable segment are the same as those described in “Note 2. Summary of Significant Accounting Policies” included in our Annual Report on Form 10-K for the year ended December 31, 2013. We evaluate the performance of our reporting segment based on revenue and operating income.

Investment, Policy [Policy Text Block] 
We account for our investments in accordance with FASB ASC 320, Investments—Debt and Equity Securities. We classify our investments in three categories: available-for-sale, held-to-maturity, and trading. We monitor the concentration, diversification, maturity, and liquidity of our investment portfolio, which is primarily invested in fixed-income securities, and classify our investment portfolio as shown below:
Investments and Fair value Measurements (Policies)
Investment, Policy [Policy Text Block]
We account for our investments in accordance with FASB ASC 320, Investments—Debt and Equity Securities. We classify our investments in three categories: available-for-sale, held-to-maturity, and trading. We monitor the concentration, diversification, maturity, and liquidity of our investment portfolio, which is primarily invested in fixed-income securities, and classify our investment portfolio as shown below:
Correction (Tables)
Schedule of Error Corrections and Prior Period Adjustments
The financial statements have been corrected to reduce the current balance and increase the long-term balance as shown in the table below:
 
 
As of December 31, 2013
($000)
 
Previously Reported

 
Correction

 
As Corrected

Accounts payable and accrued liabilities
 
$
52,877

 
$
(10,746
)
 
$
42,131

Deferred rent
 
$
13,192

 
$
10,746

 
$
23,938

Goodwill and Other Intangible Assets (Tables)
Schedule of Goodwill 
The following table shows the changes in our goodwill balances from December 31, 2013 to June 30, 2014:
 
 
 
($000)

Balance as of December 31, 2013
 
$
326,450

Acquisitions of HelloWallet and ByAllAccounts
 
59,250

Foreign currency translation
 
3,137

Balance as of June 30, 2014
 
$
388,837

Schedule of Intangible Assets 
The following table summarizes our intangible assets: 
 
 
As of June 30, 2014
 
As of December 31, 2013
($000)
 
Gross

 
Accumulated
Amortization

 
Net

 
Weighted
Average
Useful  Life
(years)
 
Gross

 
Accumulated
Amortization

 
Net

 
Weighted
Average
Useful  Life
(years)
Intellectual property
 
$
30,177

 
$
(24,741
)
 
$
5,436

 
9
 
$
29,477

 
$
(23,128
)
 
$
6,349

 
9
Customer-related assets
 
148,000

 
(80,782
)
 
67,218

 
12
 
141,833

 
(74,311
)
 
67,522

 
12
Supplier relationships
 
240

 
(114
)
 
126

 
20
 
240

 
(108
)
 
132

 
20
Technology-based assets
 
90,979

 
(54,729
)
 
36,250

 
9
 
80,489

 
(50,673
)
 
29,816

 
9
Non-competition agreement
 
4,428

 
(1,679
)
 
2,749

 
5
 
1,661

 
(1,571
)
 
90

 
4
Total intangible assets
 
$
273,824

 
$
(162,045
)
 
$
111,779

 
11
 
$
253,700

 
$
(149,791
)
 
$
103,909

 
10
 
Schedule of Intangible Asset, Amortization Expense 
The following table summarizes our amortization expense related to intangible assets:
 
 
Three months ended June 30
 
Six months ended June 30
($000)
 
2014

 
2013

 
2014

 
2013

Amortization expense
 
$
5,501

 
$
5,337

 
$
10,643

 
$
10,962

Schedule of Expected Amortization Expense 
We expect intangible amortization expense for 2014 and subsequent years as follows:
 
 
($000)

2014
 
$
22,493

2015
 
22,669

2016
 
18,071

2017
 
13,406

2018
 
11,190

Thereafter
 
34,593


 
Our estimates of future amortization expense for intangible assets may be affected by additional acquisitions, divestitures, changes in the estimated average useful life, and currency translations.
Schedule of Business Acquisitions, by Acquisition 
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 receipt of the final valuation:
 
 
($000)

Cash and cash equivalents
 
$
3,739

Accounts receivable and other current assets
 
150

Other current and non-current assets
 
318

Deferred tax asset
 
7,340

Intangible assets
 
9,460

Goodwill
 
40,472

Deferred revenue
 
(2,897
)
Deferred tax liability
 
(3,595
)
Other current and non-current liabilities
 
(981
)
Total fair value of HelloWallet
 
$
54,006

Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination 
The preliminary allocation includes $9,460,000 of acquired intangible assets, as follows:
 
 
($000)

 
Weighted Average Useful Life (years)
Technology based assets
 
6,670

 
5
Intellectual property (trademarks and trade names)
 
169

 
3
Non-competition agreement
 
2,621

 
5
Total intangible assets
 
$
9,460

 
5
Schedule of Business Acquisitions, by Acquisition 
The following table summarizes our preliminary allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed at the date of the acquisition:

 
 
($000)

Cash and cash equivalents
 
$
287

Accounts receivable and other current assets
 
152

Deferred tax asset
 
3,685

Other non-current assets
 
257

Intangible assets
 
8,681

Goodwill
 
18,778

Deferred revenue
 
(79
)
Deferred tax liability
 
(3,299
)
Other current and non-current liabilities
 
(513
)
Total purchase price
 
$
27,949

Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination 
The preliminary allocation includes $8,681,000 of acquired intangible assets, as follows:

 
 
($000)

 
Weighted Average Useful Life (years)
Customer-related assets
 
$
5,506

 
24
Technology-based assets
 
3,020

 
4.5
Intellectual property (trademarks and trade names)
 
47

 
1
Non-competition agreement
 
108

 
3
Total intangible assets
 
$
8,681

 
19
Income Per Share (Tables)
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block] 
The following table shows the number of weighted average stock options, restricted stock units, performance share awards, and restricted stock excluded from our calculation of diluted earnings per share because their inclusion would have been anti-dilutive:
 
 
Three months ended June 30
 
Six months ended June 30
(in thousands)
 
2014

 
2013

 
2014

 
2013

Weighted average stock options
 
160

 
—

 
—

 
—

Weighted average restricted stock units
 
108

 
2

 
18

 
22

Weighted average performance share awards
 
10

 
—

 
—

 
—

Weighted average restricted stock
 
3

 

 
6

 

Total
 
281

 
2

 
24

 
22


These stock options, restricted stock units and performance share awards could be included in the calculation in the future.
Schedule of Earnings Per Share, Basic and Diluted 
The following table shows how we reconcile our net income and the number of shares used in computing basic and diluted income per share:

 
 
Three months ended June 30
 
Six months ended June 30
(in thousands, except per share amounts)
 
2014

 
2013

 
2014

 
2013

 
 
 
 
 
 
 
 
 
Basic net income (loss) per share attributable to Morningstar, Inc.:
 
 

 
 

 
 
 
 
Net income (loss) attributable to Morningstar, Inc.:
 
$
(9,769
)
 
$
31,121

 
$
16,607

 
$
60,739

Less: Distributed earnings available to participating securities
 
(1
)
 
(2
)
 
(4
)
 
(5
)
Less: Undistributed earnings available to participating securities
 
3

 
(9
)
 
—

 
(18
)
Numerator for basic net income (loss) per share — undistributed and distributed earnings available to common shareholders
 
$
(9,767
)
 
$
31,110

 
$
16,603

 
$
60,716

 
 
 
 
 
 
 
 
 
Weighted average common shares outstanding
 
44,777

 
46,400

 
44,778

 
46,403

 
 
 
 
 
 
 
 
 
Basic net income (loss) per share attributable to Morningstar, Inc.
 
$
(0.22
)
 
$
0.67

 
$
0.37

 
$
1.31

 
 
 
 
 
 
 
 
 
Diluted net income (loss) per share attributable to Morningstar, Inc.:
 
 
 
 
 
 
 
 
Numerator for basic net income (loss) per share — undistributed and distributed earnings available to common shareholders
 
$
(9,767
)
 
$
31,110

 
$
16,603

 
$
60,716

Add: Undistributed earnings allocated to participating securities
 
(3
)
 
9

 
—

 
18

Less: Undistributed earnings reallocated to participating securities
 
3

 
(9
)
 
—

 
(17
)
Numerator for diluted net income per share — undistributed and distributed earnings available to common shareholders
 
$
(9,767
)
 
$
31,110

 
$
16,603

 
$
60,717

 
 


 


 


 


Weighted average common shares outstanding
 
44,777

 
46,400

 
44,778

 
46,403

Net effect of dilutive stock options and restricted stock units
 
—

 
453

 
261

 
353

Weighted average common shares outstanding for computing diluted income per share
 
44,777

 
46,853

 
45,039

 
46,756

 
 


 


 


 


Diluted net income (loss) per share attributable to Morningstar, Inc.
 
$
(0.22
)
 
$
0.66

 
$
0.37

 
$
1.30


Segment and Geographical Area Information (Tables)
Revenue from External Customers by Products and Services [Table Text Block] 
Products and Services Information

We derive revenue from two product groups. The investment information product group includes all of our data, software, and research products and services. These products are typically sold through subscriptions or license agreements. The investment management product group includes all of our asset management operations, which earn the majority of their revenue from asset-based fees. The table below summarizes our revenue by product group:

External revenue by product group
 
 
 
 
 
 
 
 
 
 
 
Three months ended June 30
 
Six months ended June 30
($000)
 
2014

 
2013

 
2014

 
2013

 
Investment information
 
$
149,527

 
$
140,031

 
$
290,797

 
$
275,116

 
Investment management
 
39,858

 
35,397

 
79,753

 
69,168

 
Consolidated revenue
 
$
189,385

 
$
175,428

 
$
370,550

 
$
344,284

 
Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas [Table Text Block] 
External revenue by geographical area
 
 
 
 
 
 
 
 
 
 
Three months ended June 30
 
Six months ended June 30
($000)
 
2014

 
2013

 
2014

 
2013

United States
 
$
136,453

 
$
126,335

 
$
266,405

 
$
247,748

 
 
 
 
 
 
 
 
 
United Kingdom
 
15,544

 
14,015

 
30,882

 
27,168

Continental Europe
 
15,921

 
13,993

 
31,547

 
27,160

Australia
 
9,233

 
9,176

 
17,401

 
18,528

Canada
 
7,542

 
7,812

 
15,209

 
15,548

Asia
 
3,888

 
3,449

 
7,597

 
6,873

Other
 
804

 
648

 
1,509

 
1,259

Total International
 
52,932

 
49,093

 
104,145

 
96,536

 
 
 
 
 
 
 
 
 
Consolidated revenue
 
$
189,385

 
$
175,428

 
$
370,550

 
$
344,284



Long-lived assets by geographical area
 
 
 
 
 
 
As of June 30
 
As of December 31
($000)
 
2014

 
2013

United States
 
$
90,924

 
$
84,321

 
 
 
 
 
United Kingdom
 
6,720

 
6,873

Continental Europe
 
1,591

 
1,873

Australia
 
977

 
1,051

Canada
 
1,041

 
1,275

Asia
 
8,548

 
9,479

Other
 
99

 
114

Total International
 
18,976

 
20,665

 
 
 
 
 
Consolidated property, equipment, and capitalized software, net
 
$
109,900

 
$
104,986

Investments and Fair Value Measurements (Tables)
Schedule of Investments 
We monitor the concentration, diversification, maturity, and liquidity of our investment portfolio, which is primarily invested in fixed-income securities, and classify our investment portfolio as shown below:
 
 
 
As of June 30
 
As of December 31
($000)
 
2014

 
2013

Available-for-sale
 
$
16,015

 
$
91,461

Held-to-maturity
 
20,422

 
31,214

Trading securities
 
8,259

 
7,732

Total
 
$
44,696

 
$
130,407

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 June 30, 2014
 
As of December 31, 2013
($000)
 
Cost

 
Unrealized
Gain

 
Unrealized
Loss

 
Fair
Value

 
Cost

 
Unrealized
Gain

 
Unrealized
Loss

 
Fair
Value

Available-for-sale:
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Government obligations
 
$
3,396

 
$
2

 
$
—

 
$
3,398

 
$
19,693

 
$
8

 
$
(3
)
 
$
19,698

Corporate bonds
 
—

 
—

 
—

 
—

 
49,913

 
22

 
(124
)
 
49,811

Foreign obligations
 
—

 
—

 
—

 
—

 
505

 
—

 
(2
)
 
503

Commercial paper
 
—

 
—

 
—

 
—

 
9,482

 
7

 
—

 
9,489

Equity securities and exchange-traded funds
 
9,311

 
1,100

 
(118
)
 
10,293

 
8,872

 
1,011

 
(141
)
 
9,742

Mutual funds
 
2,137

 
276

 
(89
)
 
2,324

 
2,095

 
221

 
(98
)
 
2,218

Total
 
$
14,844

 
$
1,378

 
$
(207
)
 
$
16,015

 
$
90,560

 
$
1,269

 
$
(368
)
 
$
91,461

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Held-to-maturity:
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Certificates of deposit
 
$
20,422

 
$
—

 
$
—

 
$
20,422

 
$
31,214

 
$
—

 
$
—

 
$
31,214

Investments Classified by Contractual Maturity Date 
The expected maturities of certain fixed-income securities may differ from their contractual maturities because some of these holdings have call features that allow the issuers the right to prepay obligations without penalties.
 
 
 
As of June 30, 2014
 
As of December 31, 2013
($000)
 
Cost

 
Fair Value

 
Cost

 
Fair Value

Available-for-sale:
 
 

 
 

 
 

 
 

Due in one year or less
 
$
3,396

 
$
3,398

 
$
45,486

 
$
45,402

Due in one to two years
 
—

 
—

 
34,107

 
34,099

Equity securities, exchange-traded funds, and mutual funds
 
11,448

 
12,617

 
10,967

 
11,960

    Total
 
$
14,844

 
$
16,015

 
$
90,560

 
$
91,461

 
 
 
 
 
 
 
 
 
Held-to-maturity:
 
 

 
 

 
 

 
 

Due in one year or less
 
$
20,417

 
$
20,417

 
$
31,210

 
$
31,210

Due in one to three years
 
5

 
5

 
4

 
4

Total
 
$
20,422

 
$
20,422

 
$
31,214

 
$
31,214

Schedule of Realized Gain (Loss) on Available-For-Sale Securities 

The following table shows the realized gains and losses arising from sales of our investments classified as available-for-sale recorded in our Condensed Consolidated Statements of Income: 
 
 
Three months ended June 30
 
Six months ended June 30
($000)
 
2014

 
2013

 
2014

 
2013

Realized gains
 
$
417

 
$
662

 
$
578

 
$
2,226

Realized losses
 
(46
)
 
(239
)
 
(231
)
 
(1,078
)
Realized gains, net
 
$
371

 
$
423

 
$
347

 
$
1,148

Unrealized Gain (Loss) On Trading Securities 

The following table shows the net unrealized gains (losses) on trading securities as recorded in our Condensed Consolidated Statements of Income:
 
 
 
Three months ended June 30
 
Six months ended June 30
($000)
 
2014

 
2013

 
2014

 
2013

Unrealized gains (losses), net
 
$
(224
)
 
$
(45
)
 
$
(155
)
 
$
273

Fair Value, Assets Measured on Recurring Basis 

The fair value of our assets subject to fair value measurements and that are measured at fair value on a recurring basis using the fair value hierarchy and the necessary disclosures under FASB ASC 820, Fair Value Measurement, are as follows:
 
 
 
Fair Value
 
Fair Value Measurements as of June 30, 2014
 
 
as of
 
Using Fair Value Hierarchy
($000)
 
June 30, 2014
 
Level 1

 
Level 2

 
Level 3

Available-for-sale investments:
 
 

 
 

 
 

 
 

Government obligations
 
$
3,398

 
$
—

 
$
3,398

 
$
—

Corporate bonds
 
—

 
—

 
—

 
—

Foreign obligations
 
—

 
—

 
—

 
—

Commercial paper
 
—

 
—

 
—

 
—

Equity securities and exchange-traded funds
 
10,293

 
10,293

 
—

 
—

Mutual funds
 
2,324

 
2,324

 
—

 
—

Trading securities
 
8,259

 
8,259

 
—

 
—

Cash equivalents
 
2,691

 
2,691

 
—

 
—

Total
 
$
26,965

 
$
23,567

 
$
3,398

 
$
—

 
 
 
Fair Value
 
Fair Value Measurements as of December 31, 2013
 
 
as of
 
Using Fair Value Hierarchy
($000)
 
December 31, 2013
 
Level 1

 
Level 2

 
Level 3

Available-for-sale investments:
 
 

 
 

 
 

 
 

Government obligations
 
$
19,698

 
$
—

 
$
19,698

 
$
—

Corporate bonds
 
49,811

 
—

 
49,811

 
—

Foreign obligations
 
503

 
—

 
503

 
—

Commercial paper
 
9,489

 
—

 
9,489

 
—

Equity securities and exchange-traded funds
 
9,742

 
9,742

 
—

 
—

Mutual funds
 
2,218

 
2,218

 
—

 
—

Trading securities
 
7,732

 
7,732

 
—

 
—

Cash equivalents
 
925

 
925

 
—

 
—

Total
 
$
100,118

 
$
20,617

 
$
79,501

 
$
—

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 June 30


As of December 31

($000)
 
2014


2013

Investment in MJKK
 
$
22,173

 
$
21,782

Other equity method investments
 
5,788

 
6,166

Investments accounted for using the cost method
 
2,326

 
10,766

Total investments in unconsolidated entities
 
$
30,287

 
$
38,714

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 June 30

 
As of December 31

 
 
2014

 
2013

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

 
 

Japanese yen (¥000)
 
¥
7,567,560

 
¥
9,824,068

Equivalent U.S. dollars ($000)
 
$
74,616

 
$
94,999

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 June 30

(in thousands)
 
2014

Shares available for future grants
 
4,248

Schedule of Stock-Based Compensation Expense 
The following table summarizes our stock-based compensation expense and the related income tax benefit we recorded:
 
 
Three months ended June 30
 
Six months ended June 30
($000)
 
2014

 
2013

 
2014

 
2013

Restricted stock units
 
$
3,983

 
$
3,734

 
$
7,675

 
$
7,297

Restricted stock
 
97

 
97

 
194

 
194

Performance share awards
 
173

 
—

 
200

 
—

Stock options
 
110

 
123

 
233

 
246

Total stock-based compensation expense
 
$
4,363

 
$
3,954

 
$
8,302

 
$
7,737

 
 


 


 


 


Income tax benefit related to the stock-based compensation expense
 
$
1,283

 
$
1,068

 
$
2,362

 
$
2,098

Schedule of Unrecognized Stock-Based Compensation Expense 
The following table summarizes the amount of unrecognized stock-based compensation expense as of June 30, 2014 and the expected number of months over which the expense will be recognized:
 
 
Unrecognized stock-based compensation expense ($000)

 
Expected amortization period (months)
Restricted stock units
 
$
39,567

 
36
Restricted stock
 
323

 
10
Performance share awards
 
1,716

 
30
Stock options
 
353

 
11
Total unrecognized stock-based compensation expense
 
$
41,959

 
35
Schedule of Restricted Stock Units Award Activity 

The following table summarizes restricted stock unit activity during the first six months of 2014:
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
 
245,350

 
—

 
245,350

 
73.11

Dividend equivalents
 
1,528

 
76

 
1,604

 
57.50

Vested
 
(231,500
)
 
—

 
(231,500
)
 
57.48

Issued
 
—

 
(2,054
)
 
(2,054
)
 
53.54

Forfeited
 
(17,874
)
 
—

 
(17,874
)
 
57.22

RSUs Outstanding - June 30, 2014
 
677,506

 
14,704

 
692,210

 
$
67.37

Schedule of Performance Share Activity 
Information as of June 30, 2014 regarding the Company's target performance share awards granted and shares that would be issued at current performance levels for performance share awards granted during the first six months of 2014 is as follows:
 
 
As of June 30, 2014

Target performance share awards granted
 
23,685

Fair value (1)
 
$
80.91

Number of shares that would be issued based on current performance levels
 
23,685

Unamortized expense, based on current performance levels
 
$
1,716,000


(1) Represents the closing market price of Morningstar's stock on March 14, 2014, which is the last closing price prior to the grant date.

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

 
Weighted
Average
Exercise
Price

Options outstanding—December 31, 2013
 
179,559

 
$
21.47

Granted
 
—

 
—

Canceled
 
—

 
—

Exercised
 
(26,420
)
 
21.67

Options outstanding—June 30, 2014
 
153,139

 
21.91

 
 
 
 
 
Options exercisable—June 30, 2014
 
153,139

 
$
21.91

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

 
Weighted
Average
Exercise
Price

Options outstanding—December 31, 2013
 
253,972

 
$
36.48

Granted
 
—

 
—

Canceled
 
—

 
—

Exercised
 
(47,898
)
 
30.58

Options outstanding—June 30, 2014
 
206,074

 
38.27

 
 
 
 
 
Options exercisable—June 30, 2014
 
189,604

 
$
36.58

 
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:
 
 
 
Six months ended June 30
($000)
 
2014

 
2013

Intrinsic value of options exercised
 
$
3,760

 
$
8,170

Schedule of Options, Vested and Expected to Vest, Outstanding and Exercisable 

The table below shows additional information for options outstanding and exercisable as of June 30, 2014:
 
 
 
Options Outstanding
 
Options Exercisable
Range of Exercise Prices
 
Number of  Options

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

 
Aggregate
Intrinsic
Value
($000)

 
Exercisable Shares

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

 
Aggregate Intrinsic Value ($000)

$21.61 - $26.96
 
280,732

 
0.62
 
$
24.20

 
$
13,364

 
280,732

 
0.62
 
$
24.20

 
$
13,364

$39.68 - $49.92
 
6,806

 
1.43
 
48.18

 
161

 
6,806

 
1.43
 
48.18

 
161

$57.28 - $59.35
 
71,675

 
7.02
 
57.46

 
1,029

 
55,205

 
7.02
 
57.39

 
758

$21.61 - $59.35
 
359,213

 
1.91
 
$
31.29

 
$
14,554

 
342,743

 
1.67
 
$
30.03

 
$
14,283

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Vested or Expected to Vest
 
 
 
 
 
 
 
 
 
 
 
 
 
$21.61 - $59.35
 
359,213

 
1.91
 
$
31.29

 
$
14,554

 
 
 
 
 
 
 
 
Schedule of Tax Benefits Related to Share Based Compensation 
The following table summarizes our excess tax benefits:
 
 
Three months ended June 30
 
Six months ended June 30
($000)
 
2014

 
2013

 
2014

 
2013

Excess tax benefits related to stock-based compensation
 
$
1,340

 
$
2,255

 
$
1,913

 
$
3,842

Income Taxes (Tables)
Schedule of Effective Income Tax Rate Reconciliation 
The following table shows our effective income tax rate for the three and six months ended June 30, 2014 and June 30, 2013:
 
 
 
Three months ended June 30
 
Six months ended June 30
($000)
 
2014

 
2013

 
2014

 
2013

Income (loss) before income taxes and equity in net income of unconsolidated entities
 
$
(18,882
)
 
$
46,695

 
$
20,515

 
$
88,200

Equity in net income of unconsolidated entities
 
497

 
360

 
1,096

 
857

Net loss attributable to the noncontrolling interest
 
5

 
21

 
35

 
64

Total
 
$
(18,380
)
 
$
47,076

 
$
21,646

 
$
89,121

Income tax expense (benefit)
 
$
(8,611
)
 
$
15,955

 
$
5,039

 
$
28,382

Effective tax rate
 
46.8
%
 
33.9
%
 
23.3
%
 
31.8
%
Schedule of Gross Unrecognized Tax Benefits 
The table below provides information concerning our gross unrecognized tax benefits as of June 30, 2014 and December 31, 2013. The table also provides the effect these gross unrecognized tax benefits would have on our income tax expense, if they were recognized.
 
 
As of June 30
 
As of December 31
($000)
 
2014

 
2013

Gross unrecognized tax benefits
 
$
11,476

 
$
12,958

Gross unrecognized tax benefits that would affect income tax expense
 
$
11,476

 
$
10,557

Decrease in income tax expense upon recognition of gross unrecognized tax benefits
 
$
9,961

 
$
9,262

Schedule of Liabilities for Unrecognized Tax Benefits 
Our Condensed Consolidated Balance Sheets include the following liabilities for unrecognized tax benefits. These amounts include interest and penalties, less any associated tax benefits.

 
 
As of June 30
 
As of December 31
Liabilities for Unrecognized Tax Benefits ($000)
 
2014

 
2013

Current liability
 
$
4,490

 
$
6,211

Non-current liability
 
6,712

 
6,012

Total liability for unrecognized tax benefits
 
$
11,202

 
$
12,223

Basis of Presentation of Interim Financial Information (Details) (USD $)
In Millions, unless otherwise specified
6 Months Ended
Jun. 30, 2014
position
Restructuring Cost and Reserve [Line Items]
 
Number of positions shifted
180 
Cost of Revenue [Member]
 
Restructuring Cost and Reserve [Line Items]
 
Increase (decrease) in allocated compensation expense
$ 14 
Selling and Marketing Expense [Member]
 
Restructuring Cost and Reserve [Line Items]
 
Increase (decrease) in allocated compensation expense
8 
General and Administrative Expense [Member]
 
Restructuring Cost and Reserve [Line Items]
 
Increase (decrease) in allocated compensation expense
$ 6 
Correction (Details) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2014
Dec. 31, 2013
Accounts payable and accrued liabilities
$ 97,251 
$ 42,131 
Deferred rent
23,158 
23,938 
Previously Reported [Member]
 
 
Accounts payable and accrued liabilities
 
52,877 
Deferred rent
 
13,192 
Correction [Member]
 
 
Accounts payable and accrued liabilities
 
(10,746)
Deferred rent
 
$ 10,746 
Goodwill and Other Intangible Assets (Narrative) (Details) (USD $)
In Thousands, unless otherwise specified
0 Months Ended 0 Months Ended
Jun. 3, 2014
HelloWallet [Member]
Jun. 3, 2014
HelloWallet [Member]
Apr. 1, 2014
ByAllAccounts, Inc. [Member]
Apr. 2, 2014
ByAllAccounts, Inc. [Member]
Business Acquisition [Line Items]
 
 
 
 
Additional percentage of ownership acquired
 
81.30% 
 
 
Current ownership percentage
 
100.00% 
 
 
Prior ownership percentage
 
18.70% 
 
 
Estimated fair value
 
$ 54,006 
 
$ 27,949 
Business combination, cash paid
40,525 
 
27,949 
 
Previously held ownership percentage
13,481 
 
 
 
Non-cash holding gain (loss)
$ 5,168 
 
 
 
Goodwill and Other Intangible Assets (Acquisitions) (Details) (USD $)
Jun. 30, 2014
Dec. 31, 2013
Jun. 3, 2014
HelloWallet [Member]
Apr. 2, 2014
ByAllAccounts, Inc. [Member]
Business Acquisition [Line Items]
 
 
 
 
Cash and cash equivalents
 
 
$ 3,739,000 
$ 287,000 
Accounts receivable and other current assets
 
 
150,000 
152,000 
Other current and non-current assets
 
 
318,000 
 
Deferred tax asset
 
 
7,340,000 
3,685,000 
Other non-current assets
 
 
 
257,000 
Intangible assets
 
 
9,460,000 
8,681,000 
Goodwill
388,837,000 
326,450,000 
40,472,000 
18,778,000 
Deferred revenue
 
 
(2,897,000)
(79,000)
Deferred tax liability
 
 
(3,595,000)
(3,299,000)
Other current and non-current liabilities
 
 
(981,000)
(513,000)
Total purchase price
 
 
$ 54,006,000 
$ 27,949,000 
Goodwill and Other Intangible Assets (Acquired Intangible Assets) (Details) (USD $)
0 Months Ended
Jun. 3, 2014
HelloWallet [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]
Non-competition agreement [Member]
Apr. 1, 2014
ByAllAccounts, Inc. [Member]
Apr. 1, 2014
ByAllAccounts, Inc. [Member]
Customer-related assets [Member]
Apr. 1, 2014
ByAllAccounts, Inc. [Member]
Technology-based assets [Member]
Apr. 1, 2014
ByAllAccounts, Inc. [Member]
Intellectual property (trademarks and trade names) [Member]
Apr. 1, 2014
ByAllAccounts, Inc. [Member]
Non-competition agreement [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
 
 
 
 
 
 
 
 
 
Finite-lived intangible assets acquired
$ 9,460,000 
$ 6,670,000 
$ 169,000 
$ 2,621,000 
$ 8,681,000 
$ 5,506,000 
$ 3,020,000 
$ 47,000 
$ 108,000 
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 
Goodwill and Other Intangible Assets (Schedule of Goodwill) (Details) (USD $)
In Thousands, unless otherwise specified
6 Months Ended
Jun. 30, 2014
Goodwill [Roll Forward]
 
Goodwill, Beginning Balance
$ 326,450 
Acquisitions of HelloWallet and ByAllAccounts
59,250 
Foreign currency translation
3,137 
Goodwill, Ending Balance
$ 388,837 
Goodwill and Other Intangible Assets (Schedule of Intangible Assets) (Details) (USD $)
In Thousands, unless otherwise specified
6 Months Ended 12 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Dec. 31, 2013
Finite-Lived Intangible Assets [Line Items]
 
 
 
Goodwill, impairment loss
$ 0 
$ 0 
 
Gross
273,824 
 
253,700 
Accumulated Amortization
(162,045)
 
(149,791)
Intangible assets, Net
111,779 
 
103,909 
Weighted-Average Useful Life (years)
11 years 
 
10 years 
Intellectual Property [Member]
 
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
 
Gross
30,177 
 
29,477 
Accumulated Amortization
(24,741)
 
(23,128)
Intangible assets, Net
5,436 
 
6,349 
Weighted-Average Useful Life (years)
9 years 
 
9 years 
Customer Related Assets [Member]
 
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
 
Gross
148,000 
 
141,833 
Accumulated Amortization
(80,782)
 
(74,311)
Intangible assets, Net
67,218 
 
67,522 
Weighted-Average Useful Life (years)
12 years 
 
12 years 
Supplier Relationships [Member]
 
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
 
Gross
240 
 
240 
Accumulated Amortization
(114)
 
(108)
Intangible assets, Net
126 
 
132 
Weighted-Average Useful Life (years)
20 years 
 
20 years 
Technology-Based Assets [Member]
 
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
 
Gross
90,979 
 
80,489 
Accumulated Amortization
(54,729)
 
(50,673)
Intangible assets, Net
36,250 
 
29,816 
Weighted-Average Useful Life (years)
9 years 
 
9 years 
Non-competition Agreement [Member]
 
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
 
Gross
4,428 
 
1,661 
Accumulated Amortization
(1,679)
 
(1,571)
Intangible assets, Net
$ 2,749 
 
$ 90 
Weighted-Average Useful Life (years)
5 years 
 
4 years 
Goodwill and Other Intangible Assets (Amortization Expense) (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Goodwill and Intangible Assets Disclosure [Abstract]
 
 
 
 
Amortization expense
$ 5,501 
$ 5,337 
$ 10,643 
$ 10,962 
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]
 
 
 
 
2014
22,493 
 
22,493 
 
2015
22,669 
 
22,669 
 
2016
18,071 
 
18,071 
 
2017
13,406 
 
13,406 
 
2018
11,190 
 
11,190 
 
2019
$ 34,593 
 
$ 34,593 
 
Income Per Share (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
 
 
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount
281 
 
24 
 
Earnings Per Share, Basic [Abstract]
 
 
 
 
Net income attributable to Morningstar, Inc.
$ (9,769)
$ 31,121 
$ 16,607 
$ 60,739 
Less: Distributed Earnings Available to Participating Securities
(1)
 
(4)
 
Less: Undistributed earnings allocated to participating securities
3 
 
0 
 
Numerator for basic net income per share - undistributed and distributed earnings available to common shareholders
(9,767)
 
16,603 
 
Weighted average common shares outstanding
44,777 
46,400 
44,778 
46,403 
Basic net income per share attributable to Morningstar, Inc.
$ (0.22)
$ 0.67 
$ 0.37 
$ 1.31 
Earnings Per Share, Diluted [Abstract]
 
 
 
 
Numerator for basic net income per share - undistributed and distributed earnings available to common shareholders
(9,767)
 
16,603 
 
Add: Undistributed Earnings Allocated To Participating Securities
(3)
 
0 
 
Less: Undistributed Earnings Reallocated to Participating Securities
3 
 
0 
 
Numerator for diluted net income per share - undistributed and distributed earnings available to common shareholders
$ (9,767)
 
$ 16,603 
 
Weighted average common shares outstanding
44,777 
46,400 
44,778 
46,403 
Net effect of dilutive stock options and restricted stock units
0 
 
261 
 
Weighted average common shares outstanding for computing diluted income per share
44,777 
46,853 
45,039 
46,756 
Diluted net income per share attributable to Morningstar, Inc.
$ (0.22)
$ 0.66 
$ 0.37 
$ 1.30 
Stock Options [Member]
 
 
 
 
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
 
 
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount
160 
 
0 
 
Restricted Stock Units (RSUs) [Member]
 
 
 
 
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
 
 
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount
108 
 
18 
 
Performance Shares [Member]
 
 
 
 
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
 
 
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount
10 
 
 
 
Restricted Stock [Member]
 
 
 
 
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
 
 
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount
3 
 
0 
 
Segment and Geographical Area Information (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Segment Reporting Information, Operating Income (Loss) [Abstract]
 
 
 
 
External revenue
$ 189,385 
$ 175,428 
$ 370,550 
$ 344,284 
U.S. [Member]
 
 
 
 
Segment Reporting Information, Operating Income (Loss) [Abstract]
 
 
 
 
External revenue
136,453 
126,335 
266,405 
247,748 
Non-U.S. [Member]
 
 
 
 
Segment Reporting Information, Operating Income (Loss) [Abstract]
 
 
 
 
External revenue
52,932 
49,093 
104,145 
96,536 
Investment Management [Member]
 
 
 
 
Segment Reporting Information, Operating Income (Loss) [Abstract]
 
 
 
 
External revenue
39,858 
35,397 
79,753 
69,168 
Investment Information [Member]
 
 
 
 
Segment Reporting Information, Operating Income (Loss) [Abstract]
 
 
 
 
External revenue
$ 149,527 
$ 140,031 
$ 290,797 
$ 275,116 
Segment and Geographical Area Information (External Revenue and Long-Lived Assets) (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Dec. 31, 2013
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
 
External revenue
$ 189,385 
$ 175,428 
$ 370,550 
$ 344,284 
 
Long-lived assets
109,900 
 
109,900 
 
104,986 
United States
 
 
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
 
External revenue
136,453 
126,335 
266,405 
247,748 
 
Long-lived assets
90,924 
 
90,924 
 
84,321 
Total International
 
 
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
 
External revenue
52,932 
49,093 
104,145 
96,536 
 
Long-lived assets
18,976 
 
18,976 
 
20,665 
United Kingdom
 
 
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
 
External revenue
15,544 
14,015 
30,882 
27,168 
 
Long-lived assets
6,720 
 
6,720 
 
6,873 
Continental Europe
 
 
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
 
External revenue
15,921 
13,993 
31,547 
27,160 
 
Long-lived assets
1,591 
 
1,591 
 
1,873 
Australia
 
 
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
 
External revenue
9,233 
9,176 
17,401 
18,528 
 
Long-lived assets
977 
 
977 
 
1,051 
Canada
 
 
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
 
External revenue
7,542 
7,812 
15,209 
15,548 
 
Long-lived assets
1,041 
 
1,041 
 
1,275 
Asia
 
 
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
 
External revenue
3,888 
3,449 
 
 
 
Long-lived assets
8,548 
 
8,548 
 
9,479 
Asia excluding Japan [Member]
 
 
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
 
External revenue
 
 
7,597 
6,873 
 
Other
 
 
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
 
External revenue
804 
648 
1,509 
1,259 
 
Long-lived assets
$ 99 
 
$ 99 
 
$ 114 
Investments and Fair Value Measurements (Classification of Securities) (Details) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2014
Dec. 31, 2013
Fair Value Disclosures [Abstract]
 
 
Available-for-sale
$ 16,015 
$ 91,461 
Held-to-maturity
20,422 
31,214 
Trading securities
8,259 
7,732 
Total
$ 44,696 
$ 130,407 
Investments and Fair Value Measurements (Gains (Losses) on Investments) (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Dec. 31, 2013
Available-for-sale:
 
 
 
 
 
Available-for-sale securities, Cost
$ 14,844 
 
$ 14,844 
 
$ 90,560 
Available-for-sale Securities, Unrealized Gain
1,378 
 
1,378 
 
1,269 
Available-for-sale Securities, Unrealized Loss
(207)
 
(207)
 
(368)
Available-for-sale securities, Fair Value
16,015 
 
16,015 
 
91,461 
Held-to-maturity:
 
 
 
 
 
Held-to-maturity securities, Cost
20,422 
 
20,422 
 
31,214 
Held-to-maturity Securities, Unrecognized Gain
0 
 
0 
 
0 
Held-to-maturity Securities, Unrecognized Loss
0 
 
0 
 
0 
Held-to-maturity
20,422 
 
20,422 
 
31,214 
Available-for-sale Securities, Gross Realized Gain (Loss) [Abstract]
 
 
 
 
 
Available-for-sale securities, realized gains
417 
662 
578 
2,226 
 
Available-for-sale securities, realized losses
(46)
(239)
(231)
(1,078)
 
Available-for-sale securities, realized gains (losses), net
371 
423 
347 
1,148 
 
Government Obligations [Member]
 
 
 
 
 
Available-for-sale:
 
 
 
 
 
Available-for-sale securities, Cost
3,396 
 
3,396 
 
19,693 
Available-for-sale Securities, Unrealized Gain
2 
 
2 
 
8 
Available-for-sale Securities, Unrealized Loss
0 
 
0 
 
(3)
Available-for-sale securities, Fair Value
3,398 
 
3,398 
 
19,698 
Corporate Bonds [Member]
 
 
 
 
 
Available-for-sale:
 
 
 
 
 
Available-for-sale securities, Cost
0 
 
0 
 
49,913 
Available-for-sale Securities, Unrealized Gain
0 
 
0 
 
22 
Available-for-sale Securities, Unrealized Loss
0 
 
0 
 
(124)
Available-for-sale securities, Fair Value
0 
 
0 
 
49,811 
Foreign Government Debt Securities [Member]
 
 
 
 
 
Available-for-sale:
 
 
 
 
 
Available-for-sale securities, Cost
0 
 
0 
 
505 
Available-for-sale Securities, Unrealized Gain
0 
 
0 
 
0 
Available-for-sale Securities, Unrealized Loss
0 
 
0 
 
(2)
Available-for-sale securities, Fair Value
0 
 
0 
 
503 
Commercial Paper [Member]
 
 
 
 
 
Available-for-sale:
 
 
 
 
 
Available-for-sale securities, Cost
0 
 
0 
 
9,482 
Available-for-sale Securities, Unrealized Gain
0 
 
0 
 
7 
Available-for-sale Securities, Unrealized Loss
0 
 
0 
 
0 
Available-for-sale securities, Fair Value
0 
 
0 
 
9,489 
Equity Securities and Exchange-traded Funds [Member]
 
 
 
 
 
Available-for-sale:
 
 
 
 
 
Available-for-sale securities, Cost
9,311 
 
9,311 
 
8,872 
Available-for-sale Securities, Unrealized Gain
1,100 
 
1,100 
 
1,011 
Available-for-sale Securities, Unrealized Loss
(118)
 
(118)
 
(141)
Available-for-sale securities, Fair Value
10,293 
 
10,293 
 
9,742 
Mutual Funds [Member]
 
 
 
 
 
Available-for-sale:
 
 
 
 
 
Available-for-sale securities, Cost
2,137 
 
2,137 
 
2,095 
Available-for-sale Securities, Unrealized Gain
276 
 
276 
 
221 
Available-for-sale Securities, Unrealized Loss
(89)
 
(89)
 
(98)
Available-for-sale securities, Fair Value
$ 2,324 
 
$ 2,324 
 
$ 2,218 
Investments and Fair Value Measurements (Cost and Fair Value of Investments Classified by Maturity) (Details) (USD $)
Jun. 30, 2014
Dec. 31, 2013
Available-for-sale Securities, Debt Maturities [Abstract]
 
 
Available-for-sale securities, Due in one year or less, Cost
$ 3,396,000 
$ 45,486,000 
Available-for-sale securities, Due in one year or less, Fair Vlaue
3,398,000 
45,402,000 
Available-for-sale securities, Due in one to two years, Cost
0 
34,107,000 
Available-for-sale securities, Due in one to two years, Fair Value
0 
34,099,000 
Available-for-sale securities, Equity securities, exchange-traded funds, and mutual funds, Cost
11,448,000 
10,967,000 
Available-for-sale securities, Equity securities, exchange-traded funds, and mutual funds, Fair Value
12,617,000 
11,960,000 
Available-for-sale securities, Cost
14,844,000 
90,560,000 
Available-for-sale securities, Fair Value
16,015,000 
91,461,000 
Held-to-maturity Securities, Debt Maturities [Abstract]
 
 
Held-to-maturity securities, Due in one year or less, Cost
20,417,000 
31,210,000 
Held-to-maturity securities, Due within one year or less, Fair Value
20,417,000 
31,210,000 
Held-to-maturity securities, Due in one to three years, Cost
5,000 
4,000 
Held-to-maturity securities, Due in one to three years, Fair Value
5,000 
4,000 
Held-to-maturity securities, Cost
20,422,000 
31,214,000 
Held-to-maturity securities, Fair Value
20,422,000 
31,214,000 
Certificate of deposit held as collateral against Australia office lease
$ 1,500,000 
 
Investments and Fair Value Measurements (Unrealized Gains on Trading Securities) (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Schedule of Trading Securities and Other Trading Assets [Line Items]
 
 
 
 
Unrealized gains (losses), net
$ (224)
$ (45)
$ (155)
$ 273 
Investments and Fair Value Measurements (Fair Value of Assets) (Details) (Fair Value, Measurements, Recurring [Member], USD $)
In Thousands, unless otherwise specified
Jun. 30, 2014
Dec. 31, 2013
Estimate of Fair Value Measurement [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Trading securities, fair value
$ 8,259 
$ 7,732 
Cash equivalents, fair value
2,691 
925 
Total investments, fair value
26,965 
100,118 
Estimate of Fair Value Measurement [Member] |
Government Obligations [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Available-for-sale securities, fair value
3,398 
19,698 
Estimate of Fair Value Measurement [Member] |
Corporate Bonds [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Available-for-sale securities, fair value
0 
49,811 
Estimate of Fair Value Measurement [Member] |
Commercial Paper [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Available-for-sale securities, fair value
0 
9,489 
Estimate of Fair Value Measurement [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
10,293 
9,742 
Estimate of Fair Value Measurement [Member] |
Mutual Funds [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Available-for-sale securities, fair value
2,324 
2,218 
Fair Value, Inputs, Level 1 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Trading securities, fair value
8,259 
7,732 
Cash equivalents, fair value
2,691 
925 
Total investments, fair value
23,567 
20,617 
Fair Value, Inputs, Level 1 [Member] |
Government Obligations [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Available-for-sale securities, fair value
0 
0 
Fair Value, Inputs, Level 1 [Member] |
Corporate Bonds [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Available-for-sale securities, fair value
0 
0 
Fair Value, Inputs, Level 1 [Member] |
Commercial Paper [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Available-for-sale securities, fair value
0 
0 
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
10,293 
9,742 
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
2,324 
2,218 
Fair Value, Inputs, Level 2 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Trading securities, fair value
0 
0 
Cash equivalents, fair value
0 
0 
Total investments, fair value
3,398 
79,501 
Fair Value, Inputs, Level 2 [Member] |
Government Obligations [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Available-for-sale securities, fair value
3,398 
19,698 
Fair Value, Inputs, Level 2 [Member] |
Corporate Bonds [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Available-for-sale securities, fair value
0 
49,811 
Fair Value, Inputs, Level 2 [Member] |
Commercial Paper [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Available-for-sale securities, fair value
0 
9,489 
Fair Value, Inputs, Level 2 [Member] |
Equity Securities and Exchange-traded Funds [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Available-for-sale securities, fair value
0 
0 
Fair Value, Inputs, Level 2 [Member] |
Mutual Funds [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Available-for-sale securities, fair value
0 
0 
Fair Value, Inputs, Level 3 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Trading securities, fair value
0 
0 
Cash equivalents, fair value
0 
0 
Total investments, fair value
0 
0 
Fair Value, Inputs, Level 3 [Member] |
Government Obligations [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Available-for-sale securities, fair value
0 
0 
Fair Value, Inputs, Level 3 [Member] |
Corporate Bonds [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Available-for-sale securities, fair value
0 
0 
Fair Value, Inputs, Level 3 [Member] |
Commercial Paper [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Available-for-sale securities, fair value
0 
0 
Fair Value, Inputs, Level 3 [Member] |
Equity Securities and Exchange-traded Funds [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Available-for-sale securities, fair value
0 
0 
Fair Value, Inputs, Level 3 [Member] |
Mutual Funds [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Available-for-sale securities, fair value
0 
0 
Foreign Government Debt Securities [Member] |
Estimate of Fair Value Measurement [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Available-for-sale securities, fair value
0 
503 
Foreign Government Debt Securities [Member] |
Fair Value, Inputs, Level 1 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Available-for-sale securities, fair value
0 
0 
Foreign Government Debt Securities [Member] |
Fair Value, Inputs, Level 2 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Available-for-sale securities, fair value
0 
503 
Foreign Government Debt Securities [Member] |
Fair Value, Inputs, Level 3 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Available-for-sale securities, fair value
$ 0 
$ 0 
Investments in Unconsolidated Entities (Details)
6 Months Ended
Jun. 30, 2014
USD ($)
Jun. 30, 2013
USD ($)
Dec. 31, 2013
USD ($)
Jun. 30, 2014
Morningstar Japan KK [Member]
USD ($)
Jun. 30, 2014
Morningstar Japan KK [Member]
JPY (¥)
Dec. 31, 2013
Morningstar Japan KK [Member]
USD ($)
Dec. 31, 2013
Morningstar Japan KK [Member]
JPY (¥)
Jun. 30, 2014
Other Equity Method Investments [Member]
USD ($)
Dec. 31, 2013
Other Equity Method Investments [Member]
USD ($)
Jun. 30, 2014
YCharts [Member]
Dec. 31, 2013
YCharts [Member]
Dec. 31, 2013
Morningstar Sweden AB [Member]
Jun. 30, 2014
Inquiry Financial Europe AB [Member]
Dec. 31, 2013
Inquiry Financial Europe AB [Member]
Schedule of Equity Method Investments [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Equity method investments
 
 
 
$ 22,173,000 
 
$ 21,782,000 
 
$ 5,788,000 
$ 6,166,000 
 
 
 
 
 
Cost method investments
2,326,000 
 
10,766,000 
 
 
 
 
 
 
 
 
 
 
 
Total investments in unconsolidated entities
30,287,000 
 
38,714,000 
 
 
 
 
 
 
 
 
 
 
 
Equity method investment, ownership percentage
 
 
 
34.00% 
34.00% 
34.00% 
34.00% 
 
 
22.00% 
22.00% 
100.00% 
34.00% 
34.00% 
Equity method investment, approximate market value
 
 
 
74,616,000 
7,567,560,000 
94,999,000 
9,824,068,000 
 
 
 
 
 
 
 
Equity-method investments, other than temporary impairment
0 
0 
 
 
 
 
 
 
 
 
 
 
 
 
Cost-method investments, other than temporary impairment
$ 0 
$ 0 
 
 
 
 
 
 
 
 
 
 
 
 
Stock-Based Compensation (Shares Available For Future Grants) (Details)
In Thousands, unless otherwise specified
Jun. 30, 2014
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
 
Shares available for future grants
4,248 
Stock-Based Compensation (Allocation of Stock-Based Compensation Costs by Plan) (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
Allocated Share-based Compensation Expense
$ 4,363 
$ 3,954 
$ 8,302 
$ 7,737 
Stock-Based Compensation (Schedule of Unrecognized Stock-based Compensation Expense) (Details)
6 Months Ended
Jun. 30, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
Expected amortization period (months)
35 years 
Restricted Stock Units (RSUs) [Member]
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
Expected amortization period (months)
36 years 
Restricted Stock [Member]
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
Expected amortization period (months)
10 years 
Performance Shares [Member]
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
Expected amortization period (months)
30 years 
Stock Options [Member]
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
Expected amortization period (months)
11 years 
Stock-Based Compensation (Restricted Stock Units Activity) (Details) (Restricted Stock Units (RSUs) [Member], USD $)
6 Months Ended
Jun. 30, 2014
Restricted Stock Units (RSUs) [Member]
 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested [Roll Forward]
 
RSUs outstanding, Beginning Balance, Unvested
680,002 
RSUs outstanding, Beginning Balance, Vested but Deferred
16,682 
RSUs outstanding, Beginning Balance, Total
696,684 
RSUs outstanding, Beginning Balance, Weighted Average Grant Date Valueper RSU
$ 62.02 
Granted, Unvested
245,350 
Share Based Compensation Arrangement By Share Based Payment Award Equity Instruments Other Than Options Vested But Deferred Grants In Period
0 
Granted, Total
245,350 
Granted, Weighted Average Grant Date Valueper RSU
$ 73.11 
Dividend equivalents, Unvested
1,528 
Dividend equivalents, Vestedd but Deferred
76 
Dividend equivalents, Total
1,604 
Dividend equivalents, Weighted Average Grant Date Valueper RSU
$ 57.50 
Vested, Unvested
(231,500)
Share Based Compensation Arrangement By Share Based Payment Award Equity Instruments Other Than Options Vested But Deferred Vested In Period
0 
Vested, Total
(231,500)
Vested, Weighted Average Grant Date Valueper RSU
$ 57.48 
Share Based Compensation Arrangement by Share Based Payment Award Equity Instruments Other than Options Nonvested Issued in Period
0 
Issued, Vested but Deferred
(2,054)
Issued, Total
(2,054)
Issued, Weighted Average Grant Date Valueper RSU
$ 53.54 
Forfeited, Unvested
(17,874)
Share Based Compensation Arrangement By Share Based Payment Award Equity Instruments Other Than Options Vested But Deferred Forfeited In Period
0 
Forfeited, Total
(17,874)
Forfeited, Weighted Average Grant Date Valueper RSU
$ 57.22 
RSUs outstanding, Ending Balance, Unvested
677,506 
RSUs outstanding, Ending Balance, Vested but Deferred
14,704 
RSUs outstanding, Ending Balance, Total
692,210 
RSUs outstanding, Ending Balance, Weighted Average Grant Date Valueper RSU
$ 67.37 
Stock-Based Compensation (Performance Shares Activity) (Details) (Performance Shares [Member], USD $)
6 Months Ended
Jun. 30, 2014
Performance Shares [Member]
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
Target performance share awards granted
23,685 
Fair value (1)
$ 80.91 1
Number of shares that would be issued based on current performance levels
23,685 
Unamortized expense, based on current performance levels
$ 1,716,000 
Stock-Based Compensation (Stock Option Activity) (Details) (USD $)
In Thousands, except Share data, unless otherwise specified
6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Option Exercise Price Grouping [Member]
 
 
Intrinsic Value of Options Exercised [Abstract]
 
 
Intrinsic value of options exercised
$ 3,760 
$ 8,170 
Options Granted At Discount [Member]
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
 
 
Options outstanding, Beginning Balance, Underlying Shares
179,559 
 
Granted, Underlying Shares
0 
 
Canceled, Underlying Shares
0 
 
Exercised, Underlying Shares
(26,420)
 
Options outstanding, Ending Balance, Underlying Shares
153,139 
 
Options, Weighted Average Exercise Price [Abstract]
 
 
Options outstanding, Beginning Balance, Weighted Average Exercise Price
$ 21.47 
 
Granted, Weighted Average Exercise Price
$ 0.00 
 
Canceled, Weighted Average Exercise Price
$ 0.00 
 
Exercised, Weighted Average Exercise Price
$ 21.67 
 
Options outstanding, Ending Balance, Weighted Average Exercise Price
$ 21.91 
 
Options, Exercisable, Number of Shares and Weighted Average Exercise Price [Abstract]
 
 
Options exercisable, Underlying Shares
153,139 
 
Options exercisable, Weighted Average Exercise Price
$ 21.91 
 
Option Grants Excluding Options Granted at Discount [Member]
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
 
 
Options outstanding, Beginning Balance, Underlying Shares
253,972 
 
Granted, Underlying Shares
0 
 
Canceled, Underlying Shares
0 
 
Exercised, Underlying Shares
(47,898)
 
Options outstanding, Ending Balance, Underlying Shares
206,074 
 
Options, Weighted Average Exercise Price [Abstract]
 
 
Options outstanding, Beginning Balance, Weighted Average Exercise Price
$ 36.48 
 
Granted, Weighted Average Exercise Price
$ 0.00 
 
Canceled, Weighted Average Exercise Price
$ 0.00 
 
Exercised, Weighted Average Exercise Price
$ 30.58 
 
Options outstanding, Ending Balance, Weighted Average Exercise Price
$ 38.27 
 
Options, Exercisable, Number of Shares and Weighted Average Exercise Price [Abstract]
 
 
Options exercisable, Underlying Shares
189,604 
 
Options exercisable, Weighted Average Exercise Price
$ 36.58 
 
Stock-Based Compensation (Additional Information on Options) (Details) (USD $)
In Thousands, except Share data, unless otherwise specified
6 Months Ended
Jun. 30, 2014
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
 
Closing stock price used to calculate intrinsic value
$ 71.81 
Range One [Member]
 
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
 
Range of Exercise Prices
$21.61 - $26.96 
Range of Exercise Prices, Lower Limit
$ 21.61 
Range of Exercise Prices, Upper Limit
$ 26.68 
Options Outstanding, Number of Options
280,732 
Options Outstanding, Weighted Average Remaining Contractual Term (years)
0 years 7 months 13 days 
Options Outstanding, Weighted Average Exercise Price
$ 24.20 
Options Outstanding, Aggregate Intrinsic Value
$ 13,364 
Options Exercisable, Exercisable Shares
280,732 
Options Exercisable, Weighted Average Remaining Contractual Life (years)
0 years 7 months 13 days 
Options Exercisable, Weighted Average Exercise Price
$ 24.20 
Options Exercisable, Aggregate Intrinsic Value
13,364 
Range Two [Member]
 
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
 
Range of Exercise Prices
$39.68 - $49.92 
Range of Exercise Prices, Lower Limit
$ 39.31 
Range of Exercise Prices, Upper Limit
$ 49.38 
Options Outstanding, Number of Options
6,806 
Options Outstanding, Weighted Average Remaining Contractual Term (years)
1 year 5 months 5 days 
Options Outstanding, Weighted Average Exercise Price
$ 48.18 
Options Outstanding, Aggregate Intrinsic Value
161 
Options Exercisable, Exercisable Shares
6,806 
Options Exercisable, Weighted Average Remaining Contractual Life (years)
1 year 5 months 5 days 
Options Exercisable, Weighted Average Exercise Price
$ 48.18 
Options Exercisable, Aggregate Intrinsic Value
161 
Range Three [Member]
 
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
 
Range of Exercise Prices
$57.28 - $59.35 
Range of Exercise Prices, Lower Limit
$ 57.28 
Range of Exercise Prices, Upper Limit
$ 59.35 
Options Outstanding, Number of Options
71,675 
Options Outstanding, Weighted Average Remaining Contractual Term (years)
7 years 0 months 7 days 
Options Outstanding, Weighted Average Exercise Price
$ 57.46 
Options Outstanding, Aggregate Intrinsic Value
1,029 
Options Exercisable, Exercisable Shares
55,205 
Options Exercisable, Weighted Average Remaining Contractual Life (years)
7 years 0 months 7 days 
Options Exercisable, Weighted Average Exercise Price
$ 57.39 
Options Exercisable, Aggregate Intrinsic Value
758 
Range Four [Member]
 
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
 
Range of Exercise Prices
$21.61 - $59.35 
Range of Exercise Prices, Lower Limit
$ 21.61 
Range of Exercise Prices, Upper Limit
$ 59.35 
Options Outstanding, Number of Options
359,213 
Options Outstanding, Weighted Average Remaining Contractual Term (years)
1 year 10 months 28 days 
Options Outstanding, Weighted Average Exercise Price
$ 31.29 
Options Outstanding, Aggregate Intrinsic Value
14,554 
Options Exercisable, Exercisable Shares
342,743 
Options Exercisable, Weighted Average Remaining Contractual Life (years)
1 year 8 months 1 day 
Options Exercisable, Weighted Average Exercise Price
$ 30.03 
Options Exercisable, Aggregate Intrinsic Value
14,283 
Vested or Expected to Vest [Member]
 
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
 
Range of Exercise Prices, Lower Limit
$ 21.61 
Range of Exercise Prices, Upper Limit
$ 59.35 
Vested or Expected to Vest, Range of Exercise Prices
$21.61 - $59.35 
Vested or Expected to Vest, Number of Options
359,213 
Vested or Expected to Vest, Weighted Average Remaining Contractual Life (years)
1 year 10 months 28 days 
Vested or Expected to Vest, Weighted Average Exercise Price
$ 31.29 
Vested or Expected to Vest, Aggregate Intrinsic Value
$ 14,554 
Income Taxes (Income Tax Reconciliation and Unrecognized Tax Benefits) (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Dec. 31, 2013
Effective Income Tax Rate Reconciliation, Amount [Abstract]
 
 
 
 
 
Income before income taxes and equity in net income of unconsolidated entities
$ (18,882)
$ 46,695 
$ 20,515 
$ 88,200 
 
Equity in net income of unconsolidated entities
497 
360 
1,096 
857 
 
Net (income) loss attributable to the noncontrolling interest
5 
21 
35 
64 
 
Total
(18,380)
47,076 
21,646 
89,121 
 
Income tax expense
(8,611)
15,955 
5,039 
28,382 
 
Effective income tax rate
46.80% 
33.90% 
23.30% 
31.80% 
 
Effective income tax rate reconciliation, change in percentage points compared with prior year period
 
12.9 
 
 
 
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued [Abstract]
 
 
 
 
 
Current liabilities
4,490 
 
4,490 
 
6,211 
Non-current liabilities
6,712 
 
6,712 
 
6,012 
Total liability for unrecognized tax benefits
$ 11,202 
 
$ 11,202 
 
$ 12,223 
Income Taxes (Income Tax Contingency) (Details) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2014
Dec. 31, 2013
Income Tax Disclosure [Abstract]
 
 
Gross unrecognized tax benefits
$ 11,476 
$ 12,958 
Gross unrecognized tax benefits which would affect income tax expense
11,476 
10,557 
Decrease in income tax expense upon recognition of gross unrecognized tax benefits
$ 9,961 
$ 9,262 
Contingencies (Details) (USD $)
In Millions, unless otherwise specified
0 Months Ended 3 Months Ended 0 Months Ended
Jul. 17, 2014
Business Logic Holding Corporation [Member]
Jun. 30, 2014
Pending Litigation [Member]
Klass Matter [Member]
Jul. 17, 2014
Subsequent Event [Member]
Business Logic Holding Corporation [Member]
Loss Contingencies [Line Items]
 
 
 
Damages sought, value
 
$ 14.5 
 
Gain (Loss) Related to Litigation Settlement
$ 61.0 
 
$ 61.0 
Share Repurchase Program (Details) (USD $)
6 Months Ended
Jun. 30, 2014
Equity [Abstract]
 
Shares repurchased, program life to date, shares
7,557,807 
Shares repurchased, program life to date, value
$ 486,504,000 
Share repurchase program, authorized amount
$ 700,000,000 
Subsequent Events (Details) (USD $)
0 Months Ended
Jul. 31, 2014
Revolving Credit Facility [Member]
Subsequent Event [Member]
Jul. 17, 2014
Business Logic Holding Corporation [Member]
Jul. 17, 2014
Business Logic Holding Corporation [Member]
Subsequent Event [Member]
Subsequent Event [Line Items]
 
 
 
Litigation settlement, amount
 
$ 61,000,000 
$ 61,000,000 
Line of credit
75,000,000 
 
 
Maximum borrowing capacity
$ 75,000,000