MORNINGSTAR, INC., 10-Q filed on 7/31/2012
Quarterly Report
Document and Entity Information
6 Months Ended
Jun. 30, 2012
Jul. 27, 2012
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, 2012 
 
Document Fiscal Year Focus
2012 
 
Document Fiscal Period Focus
Q2 
 
Amendment Flag
false 
 
Entity Common Stock, Shares Outstanding
 
48,394,821 
Condensed Consolidated Statements of Income (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Jun. 30, 2012
Jun. 30, 2011
Revenue
$ 165,968 
$ 161,011 
$ 326,727 
$ 312,778 
Operating expense (1):
 
 
 
 
Cost of goods sold
49,452 1
45,186 1
99,768 
85,855 
Development
12,442 1
13,681 1
25,807 
25,669 
Sales and marketing
27,373 1
26,767 1
55,699 
53,249 
General and administrative
24,946 1
26,207 1
53,124 
56,824 
Depreciation and amortization
10,619 1
10,563 1
20,794 
20,765 
Total operating expense
124,832 1
122,404 1
255,192 
242,362 
Operating income (loss)
41,136 
38,607 
71,535 
70,416 
Non-operating income (expense):
 
 
 
 
Interest income (expense), net
1,260 
(179)
2,129 
345 
Other income (expense), net
(265)
188 
(475)
438 
Non-operating income (expense), net
995 
9 
1,654 
783 
Income before income taxes and equity in net income of unconsolidated entities
42,131 
38,616 
73,189 
71,199 
Income tax expense
14,744 
12,724 
26,255 
23,242 
Equity in net income of unconsolidated entities
497 
595 
1,063 
969 
Consolidated net income
27,884 
26,487 
47,997 
48,926 
Net (income) loss attributable to the noncontrolling interest
4 
(2)
28 
96 
Net income attributable to Morningstar, Inc.
$ 27,888 
$ 26,485 
$ 48,025 
$ 49,022 
Net income per share attributable to:
 
 
 
 
Basic (in dollars per share)
$ 0.57 
$ 0.53 
$ 0.97 
$ 0.98 
Diluted (in dollars per share)
$ 0.56 
$ 0.52 
$ 0.95 
$ 0.96 
Dividends declared per common share
$ 0.10 
$ 0.05 
$ 0.20 
$ 0.10 
Dividends paid per common share
$ 0.10 
$ 0.05 
$ 0.20 
$ 0.10 
Weighted average shares outstanding:
 
 
 
 
Basic (in shares)
49,195 
50,165 
49,566 
49,983 
Diluted (in shares)
49,856 
51,142 
50,296 
51,041 
Condensed Consolidated Statements of Income (Parenthetical) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Jun. 30, 2012
Jun. 30, 2011
(1) Includes stock-based compensation expense of:
 
 
 
 
Allocated Share-based Compensation Expense
$ 3,734 
$ 3,843 
$ 7,600 
$ 7,492 
Cost of Sales
 
 
 
 
(1) Includes stock-based compensation expense of:
 
 
 
 
Allocated Share-based Compensation Expense
1,067 
1,072 
2,156 
1,951 
Development
 
 
 
 
(1) Includes stock-based compensation expense of:
 
 
 
 
Allocated Share-based Compensation Expense
465 
572 
964 
1,043 
Sales and Marketing
 
 
 
 
(1) Includes stock-based compensation expense of:
 
 
 
 
Allocated Share-based Compensation Expense
461 
481 
940 
903 
General and Administrative
 
 
 
 
(1) Includes stock-based compensation expense of:
 
 
 
 
Allocated Share-based Compensation Expense
$ 1,741 
$ 1,718 
$ 3,540 
$ 3,595 
Condensed Consolidated Statements of Comprehensive Income Consolidated Statements of Comprehensive Income (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Jun. 30, 2012
Jun. 30, 2011
Consolidated net income
$ 27,884 
$ 26,487 
$ 47,997 
$ 48,926 
Other comprehensive income (loss), net of tax:
 
 
 
 
Foreign currency translation adjustment
(8,743)
3,262 
(1,778)
12,564 
Unrealized gains (losses) on securities:
 
 
 
 
Unrealized holding gains (losses) arising during period
(541)
(39)
368 
399 
Reclassification of adjustments for (gains) losses included in net income
(22)
(211)
33 
(252)
Other comprehensive income (loss), net
(9,306)
3,012 
(1,377)
12,711 
Other comprehensive income (loss), net
18,578 
29,499 
46,620 
61,637 
Comprehensive (income) loss attributable to noncontrolling interest
(46)
(13)
61 
99 
Comprehensive income attributable to Morningstar, Inc.
$ 18,532 
$ 29,486 
$ 46,681 
$ 61,736 
Condensed Consolidated Balance Sheets (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2012
Dec. 31, 2011
Current assets:
 
 
Cash and cash equivalents
$ 147,499 
$ 200,437 
Investments
242,379 
269,755 
Accounts receivable, less allowance of $1,017 and $835, respectively
117,016 
113,312 
Deferred tax asset, net
4,898 
5,104 
Income tax receivable, net
7,911 
7,445 
Other
22,288 
15,980 
Total current assets
541,991 
612,033 
Property, equipment, and capitalized software, net
77,376 
68,196 
Investments in unconsolidated entities
34,271 
27,642 
Goodwill
316,963 
318,492 
Intangible assets, net
127,377 
139,809 
Other assets
7,801 
5,912 
Total assets
1,105,779 
1,172,084 
Current liabilities:
 
 
Accounts payable and accrued liabilities
45,858 
41,403 
Accrued compensation
48,383 
73,124 
Deferred revenue
167,531 
155,494 
Other
367 
612 
Total current liabilities
262,139 
270,633 
Accrued compensation
6,483 
5,724 
Deferred tax liability, net
16,183 
15,940 
Deferred rent
15,199 
14,604 
Other long-term liabilities
8,550 
8,167 
Total liabilities
308,554 
315,068 
Morningstar, Inc. shareholders' equity:
 
 
Common stock, no par value, 200,000,000 shares authorized, of which 498,741,627 and 50,083,940 shares were outstanding as of June 30, 2012 and December 31, 2011, respectively
5 
5 
Treasury stock at cost, 2,857,205 shares as of June 30, 2012 and 980,177 shares as of December 31, 2011
(155,139)
(46,701)
Additional paid-in capital
503,480 
491,432 
Retained earnings
447,026 
409,022 
Accumulated other comprehensive income:
 
 
Currency translation adjustment
191 
1,936 
Unrealized gain on available-for-sale securities
77 
(324)
Total accumulated other comprehensive income
268 
1,612 
Total Morningstar, Inc. shareholders' equity
795,640 
855,370 
Noncontrolling interest
1,585 
1,646 
Total equity
797,225 
857,016 
Total liabilities and equity
$ 1,105,779 
$ 1,172,084 
Condensed Consolidated Balance Sheets (Parenthetical) (USD $)
In Thousands, except Share data, unless otherwise specified
Jun. 30, 2012
Dec. 31, 2011
Statement of Financial Position [Abstract]
 
 
Allowance for Doubtful Accounts Receivable, Current
$ 1,017 
$ 835 
Common Stock, No Par Value
$ 0 
$ 0 
Common Stock, Shares Authorized
200,000,000 
200,000,000 
Common Stock, Shares, Outstanding
48,741,627 
50,083,940 
Treasury Stock, Shares
2,857,205 
980,177 
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, 2011
$ 857,016 
$ 5 
$ (46,701)
$ 491,432 
$ 409,022 
$ 1,612 
$ 1,646 
Balance (in shares) at Dec. 31, 2011
50,083,940 
50,083,940 
 
 
 
 
 
Increase (Decrease) in Stockholders' Equity
 
 
 
 
 
 
 
Net Income (Loss)
47,997 
 
 
 
48,025 
 
(28)
Other Comprehensive Income (loss)
 
 
 
 
 
 
 
Unrealized gains (losses) on available-for-sale investments, net of income tax of $189
368 
   
   
   
   
368 
0 
Reclassification of adjustments for losses (gains) included in net income, net of income tax of $16
33 
   
   
   
   
33 
0 
Foreign currency translation adjustment, net
(1,778)
   
   
   
   
(1,745)
(33)
Other comprehensive income (loss), net
(1,377)
   
   
   
   
(1,344)
(33)
Issuance of common stock related to stock-option exercises and vesting of restricted stock units, net
781 
0 
1,026 
(245)
   
   
   
Issuance of common stock related to stock-option exercises and vesting of restricted stock units, net (in shares)
 
519,907 
 
 
 
 
 
Adjustments to Additional Paid in Capital, Share-based Compensation, Requisite Service Period Recognition
 
 
 
 
 
 
 
Stock-based compensation - restricted stock units
6,548 
   
   
6,548 
   
   
   
Stock-based compensation - restricted stock
888 
   
   
888 
   
   
   
Stock-based compensation - stock options
164 
   
   
164 
   
   
   
Excess tax benefit derived from stock-option exercises and vesting of restricted stock units
4,548 
   
   
4,548 
   
   
   
Common share repurchased
(109,464)
   
(109,464)
   
   
   
   
Common share repurchased (in shares)
 
(1,862,220)
 
 
 
 
 
Dividends declared - common shares outstanding
(9,861)
   
   
   
(9,861)
   
   
Dividends declared - restricted stock units
(15)
   
   
145 
(160)
   
   
Balance at Jun. 30, 2012
$ 797,225 
$ 5 
$ (155,139)
$ 503,480 
$ 447,026 
$ 268 
$ 1,585 
Balance (in shares) at Jun. 30, 2012
48,741,627 
48,741,627 
 
 
 
 
 
Condensed Consolidated Statement of Equity (Parenthetical) (USD $)
In Thousands, unless otherwise specified
6 Months Ended
Jun. 30, 2012
Statement of Stockholders' Equity [Abstract]
 
Other Comprehensive Income (Loss), Unrealized Holding Gain (Loss) on Securities Arising During Period, Tax
$ 189 
Other Comprehensive Income (Loss), Reclassification Adjustment for Sale of Securities Included in Net Income, Tax
$ 16 
Condensed Consolidated Statements of Cash Flows (USD $)
In Thousands, unless otherwise specified
6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Operating activities
 
 
Consolidated net income
$ 47,997 
$ 48,926 
Adjustments to reconcile consolidated net income to net cash flows from operating activities:
 
 
Depreciation and amortization
20,794 
20,765 
Deferred income taxes
299 
454 
Stock-based compensation expense
7,600 
7,492 
Provision for bad debt
717 
530 
Equity in net income of unconsolidated entities
(1,063)
(969)
Excess tax benefits from stock-option exercises and vesting of restricted stock units
(4,548)
(6,171)
Other, net
745 
(547)
Changes in operating assets and liabilities, net of effects of acquisitions:
 
 
Accounts receivable
(4,394)
617 
Other assets
(3,640)
608 
Accounts payable and accrued liabilities
652 
(5,260)
Accrued compensation
(26,920)
(14,528)
Income taxes- current
4,525 
2,742 
Deferred revenue
12,333 
8,197 
Deferred rent
468 
(657)
Other liabilities
(776)
(1,043)
Cash provided by operating activities
54,789 
61,156 
Investing activities
 
 
Purchases of investments
(133,888)
(198,647)
Proceeds from maturities and sales of investments
161,523 
150,360 
Capital expenditures
(17,922)
(8,418)
Acquisitions, net of cash acquired
0 
569 
Purchases of cost method investments
(6,750)
0 
Other, net
0 
785 
Cash used for investing activities
2,963 
(55,351)
Financing activities
 
 
Proceeds from stock-option exercises, net
781 
4,652 
Excess tax benefits from stock-option exercises and vesting of restricted stock units
4,548 
6,171 
Common shares repurchased
(105,439)
(109)
Dividends paid
(10,004)
(5,011)
Other, net
(20)
(214)
Cash provided by (used for) financing activities
(110,134)
5,489 
Effect of exchange rate changes on cash and cash equivalents
(556)
3,553 
Net increase (decrease) in cash and cash equivalents
(52,938)
14,847 
Cash and cash equivalents-beginning of period
200,437 
180,176 
Cash and cash equivalents-end of period
147,499 
195,023 
Supplemental disclosure of cash flow information:
 
 
Cash paid for income taxes
21,405 
21,104 
Supplemental information of non-cash investing and financing activities:
 
 
Unrealized Gain (Loss) on Available For Sale Investments
$ 606 
$ 220 
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 should be read in conjunction with our Consolidated Financial Statements and Notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2011, filed with the SEC on February 24, 2012.
 
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
SEC: Securities and Exchange Commission
 
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 Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2011, filed with the SEC on February 24, 2012.

In addition, effective January 1, 2012, we adopted FASB ASU No. 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. ASU No. 2011-04 clarifies existing fair value measurement and disclosure requirements, amends certain fair value measurement principles, and requires additional disclosures about fair value measurements. The adoption of ASU No. 2011-04 did not have a material impact on our Consolidated Financial Statements.
Goodwill and Other Intangible Assets
Goodwill and Other Intangible Assets
Goodwill and Other Intangible Assets
 
Goodwill
 
The following table shows the changes in our goodwill balances from December 31, 2011 to June 30, 2012:
 
 
($000)

Balance as of December 31, 2011
$
318,492

Net change, primarily currency translation
(1,529
)
Balance as of June 30, 2012
$
316,963



We did not record any significant impairment losses in the first half of 2012 or 2011. We perform our annual impairment reviews in the fourth quarter.

Intangible Assets

The following table summarizes our intangible assets: 
 
 
As of June 30, 2012
 
As of December 31, 2011
($000)
 
Gross

 
Accumulated
Amortization

 
Net

 
Weighted
Average
Useful  Life
(years)

 
Gross

 
Accumulated
Amortization

 
Net

 
Weighted
Average
Useful  Life
(years)

Intellectual property
 
$
32,073

 
$
(21,671
)
 
$
10,402

 
9

 
$
32,293

 
$
(20,455
)
 
$
11,838

 
9

Customer-related assets
 
134,059

 
(58,926
)
 
75,133

 
12

 
134,396

 
(52,611
)
 
81,785

 
12

Supplier relationships
 
240

 
(90
)
 
150

 
20

 
240

 
(84
)
 
156

 
20

Technology-based assets
 
80,723

 
(39,345
)
 
41,378

 
9

 
80,694

 
(35,130
)
 
45,564

 
9

Non-competition agreement
 
1,750

 
(1,436
)
 
314

 
4

 
1,751

 
(1,285
)
 
466

 
4

Total intangible assets
 
$
248,845

 
$
(121,468
)
 
$
127,377

 
10

 
$
249,374

 
$
(109,565
)
 
$
139,809

 
10

 
The following table summarizes our amortization expense related to intangible assets:
 
 
Three months ended June 30
 
Six months ended June 30
($000)
 
2012

 
2011

 
2012

 
2011

Amortization expense
 
$
5,976

 
$
6,632

 
$
12,031

 
$
13,145


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

We expect intangible amortization expense for 2012 and subsequent years as follows:
 
 
($000)

2012
 
$
23,766

2013
 
21,086

2014
 
19,859

2015
 
18,998

2016
 
14,393

2017
 
9,839


 
Our estimates of future amortization expense for intangible assets may be affected by additional acquisitions, 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)
 
2012

 
2011

 
2012

 
2011

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

 
 

 
 
 
 
Net income attributable to Morningstar, Inc.:
 
$
27,888

 
$
26,485

 
$
48,025

 
$
49,022

Less: Distributed earnings available to participating securities
 
(12
)
 
(8
)
 
(27
)
 
(17
)
Less: Undistributed earnings available to participating securities
 
(53
)
 
(72
)
 
(88
)
 
(131
)
Numerator for basic net income per share — undistributed and distributed earnings available to common shareholders
 
$
27,823

 
$
26,405

 
$
47,910

 
$
48,874

 
 
 
 
 
 
 
 
 
Weighted average common shares outstanding
 
49,195

 
50,165

 
49,566

 
49,983

 
 
 
 
 
 
 
 
 
Basic net income per share attributable to Morningstar, Inc.
 
$
0.57

 
$
0.53

 
$
0.97

 
$
0.98

 
 
 
 
 
 
 
 
 
Diluted net income per share attributable to Morningstar, Inc.:
 
 
 
 
 
 
 
 
Numerator for basic net income per share — undistributed and distributed earnings available to common shareholders
 
$
27,823

 
$
26,405

 
$
47,910

 
$
48,874

Add: Undistributed earnings allocated to participating securities
 
53

 
72

 
88

 
131

Less: Undistributed earnings reallocated to participating securities
 
(53
)
 
(70
)
 
(87
)
 
(129
)
Numerator for diluted net income per share — undistributed and distributed earnings available to common shareholders
 
$
27,823

 
$
26,407

 
$
47,911

 
$
48,876

 
 


 


 


 


Weighted average common shares outstanding
 
49,195

 
50,165

 
49,566

 
49,983

Net effect of dilutive stock options and restricted stock units
 
661

 
977

 
730

 
1,058

Weighted average common shares outstanding for computing diluted income per share
 
49,856

 
51,142

 
50,296

 
51,041

 
 


 


 


 


Diluted net income per share attributable to Morningstar, Inc.
 
$
0.56

 
$
0.52

 
$
0.95

 
$
0.96


Segment and Geographical Area Information
Segment and Geographical Area Information
Segment and Geographical Area Information
 
Morningstar has two operating segments:
 
•
Investment Information. The Investment Information segment includes all of our data, software, and research products and services. These products are typically sold through subscriptions or license agreements.
 
The largest products in this segment based on revenue are Morningstar Data (formerly Licensed Data), Morningstar Advisor Workstation (including Morningstar Office), Morningstar Direct, Morningstar.com, Morningstar Integrated Web Tools, and Morningstar Principia. Morningstar Data is a set of investment data spanning all of our investment databases, including real-time pricing and commodity data, and is available through electronic data feeds. Advisor Workstation is a web-based investment planning system for advisors. Advisor Workstation is available in two editions: Morningstar Office for independent financial advisors and an enterprise edition for financial advisors affiliated with larger firms. Morningstar Direct is a web-based institutional research platform. Morningstar.com includes both Premium Memberships and Internet advertising sales. Morningstar Integrated Web Tools is a set of services that helps institutional clients build customized websites or enhance their existing sites with Morningstar’s online tools and components. Principia is our CD-ROM-based investment research and planning software for advisors.
 
The Investment Information segment also includes Morningstar Equity Research, which we distribute through several channels. We sell Morningstar Equity Research to companies that purchase our research for their own use or provide our research to their affiliated advisors or individual investor clients.

The Investment Information segment also includes Morningstar Credit Research and Morningstar Structured Credit Ratings. Morningstar Structured Credit Ratings is provided by Morningstar Credit Ratings, LLC, a Nationally Recognized Statistical Rating Organization specializing in structured finance. It offers securities ratings, research, surveillance services, and data to help institutional investors identify risk in commercial mortgage-backed securities (CMBS) and residential mortgage-backed securities (RMBS).

We also offer a variety of financial communications and newsletters, other institutional and advisor software, and investment indexes.

•
Investment Management. The Investment Management segment includes all of our asset management operations, which earn the majority of their revenue from asset-based fees.
 
The key products and services in this segment based on revenue are Investment Advisory Services (formerly Investment Consulting), which focuses on investment monitoring and asset allocation for funds of funds, including mutual funds and variable annuities; Retirement Solutions, including the Morningstar Retirement Manager and Advice by Ibbotson platforms; and Morningstar Managed Portfolios, a fee-based discretionary asset management service that includes a series of mutual fund, exchange-traded fund, and stock portfolios tailored to meet a range of investment time horizons and risk levels that financial advisors can use for their clients' taxable and tax-deferred accounts. In addition, we offer Managed Portfolios through our subsidiary Ibbotson Australia which provides asset management services primarily to institutional clients and individual investors.
 
Our segment accounting policies are the same as those described in Note 2, except for the capitalization and amortization of internal product development costs, amortization of intangible assets, and costs related to corporate functions. We exclude these items from our operating segment results to provide our chief operating decision maker with a better indication of each segment’s ability to generate cash flow. This information is one of the criteria used by our chief operating decision maker in determining how to allocate resources to each segment. We include capitalization and amortization of internal product development costs, amortization of intangible assets, and costs related to corporate functions in the Corporate Items category. Our segment disclosures are consistent with the business segment information provided to our chief operating decision maker on a recurring basis; for that reason, we don’t present balance sheet information by segment. We disclose goodwill by segment in accordance with the requirements of FASB ASC 350-20-50, Intangibles - Goodwill - Disclosure.
 
The following tables present information about our operating segments and by geographical area:
 
 
 
Three months ended June 30, 2012
($000)
 
Investment
Information

 
Investment
Management

 
Corporate Items

 
Total

External revenue
 
$
134,749

 
$
31,219

 
$
—

 
$
165,968

Operating expense, excluding stock-based compensation expense, depreciation, and amortization
 
86,915

 
17,179

 
6,385

 
110,479

Stock-based compensation expense
 
2,531

 
529

 
674

 
3,734

Depreciation and amortization
 
2,300

 
38

 
8,281

 
10,619

Operating income (loss)
 
$
43,003

 
$
13,473

 
$
(15,340
)
 
$
41,136

 
 
 
 
 
 
 
 
 
U.S. capital expenditures
 
 

 
 

 
 

 
$
6,818

Non-U.S. capital expenditures
 
 

 
 

 
 

 
$
2,110

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three months ended June 30, 2011
($000)
 
Investment
Information

 
Investment
Management

 
Corporate Items

 
Total

External revenue
 
$
128,116

 
$
32,895

 
$
—

 
$
161,011

Operating expense, excluding stock-based compensation expense, depreciation, and amortization
 
86,484

 
13,833

 
7,681

 
107,998

Stock-based compensation expense
 
2,488

 
531

 
824

 
3,843

Depreciation and amortization
 
2,047

 
40

 
8,476

 
10,563

Operating income (loss)
 
$
37,097

 
$
18,491

 
$
(16,981
)
 
$
38,607

 
 
 
 
 
 
 
 
 
U.S. capital expenditures
 
 

 
 

 
 

 
$
1,593

Non-U.S. capital expenditures
 
 

 
 

 
 

 
$
1,788

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Six months ended June 30, 2012
($000)
 
Investment
Information

 
Investment
Management

 
Corporate Items

 
Total

External revenue
 
$
261,674

 
$
65,053

 
$
—

 
$
326,727

Operating expense, excluding stock-based compensation expense, depreciation, and amortization
 
180,353

 
33,132

 
13,313

 
226,798

Stock-based compensation expense
 
5,090

 
1,080

 
1,430

 
7,600

Depreciation and amortization
 
4,544

 
77

 
16,173

 
20,794

Operating income (loss)
 
$
71,687

 
$
30,764

 
$
(30,916
)
 
$
71,535

 
 
 
 
 
 
 
 
 
U.S. capital expenditures
 
 

 
 

 
 

 
$
14,215

Non-U.S. capital expenditures
 
 

 
 

 
 

 
$
3,707

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Six months ended June 30, 2011
($000)
 
Investment
Information

 
Investment
Management

 
Corporate Items

 
Total

External revenue
 
$
248,515

 
$
64,263

 
$
—

 
$
312,778

Operating expense, excluding stock-based compensation expense, depreciation, and amortization
 
170,247

 
27,671

 
16,187

 
214,105

Stock-based compensation expense
 
4,958

 
973

 
1,561

 
7,492

Depreciation and amortization
 
3,906

 
82

 
16,777

 
20,765

Operating income (loss)
 
$
69,404

 
$
35,537

 
$
(34,525
)
 
$
70,416

 
 
 
 
 
 
 
 
 
U.S. capital expenditures
 
 

 
 

 
 

 
$
3,523

Non-U.S. capital expenditures
 
 

 
 

 
 

 
$
4,895

 
 
 
 
 
 
 
 
 
 
 
 
As of June 30, 2012
($000)
 
Investment
Information

 
Investment
Management

 
Corporate Items

 
Total

Goodwill
 
$
275,568

 
$
41,395

 
$
—

 
$
316,963

 
 
 
As of December 31, 2011
($000)
 
Investment
Information

 
Investment
Management

 
Corporate Items

 
Total

Goodwill
 
$
277,059

 
$
41,433

 
$
—

 
$
318,492

 
External revenue by geographical area
 
 
 
 
 
 
 
 
 
 
Three months ended June 30
 
Six months ended June 30
($000)
 
2012

 
2011

 
2012

 
2011

United States
 
$
117,952

 
$
113,424

 
$
232,421

 
$
221,605

United Kingdom
 
14,714

 
13,947

 
28,450

 
26,794

Europe, excluding the United Kingdom
 
12,281

 
12,561

 
24,336

 
24,141

Australia
 
9,791

 
10,693

 
19,139

 
19,986

Canada
 
7,397

 
6,784

 
14,747

 
13,401

Asia, excluding Japan
 
2,366

 
2,338

 
4,735

 
4,402

Japan
 
986

 
959

 
1,965

 
1,890

Other
 
481

 
305

 
934

 
559

Total Non-U.S.
 
48,016

 
47,587

 
94,306

 
91,173

 
 
 
 
 
 
 
 
 
Total
 
$
165,968

 
$
161,011

 
$
326,727

 
$
312,778




Long-lived assets by geographical area
 
 
 
 
 
 
As of June 30
 
As of December 31
($000)
 
2012

 
2011

United States
 
$
53,941

 
$
44,572

United Kingdom
 
7,422

 
7,512

Europe, excluding the United Kingdom
 
2,543

 
2,629

Australia
 
1,550

 
1,415

Canada
 
1,914

 
2,076

Asia, excluding Japan
 
9,757

 
9,656

Japan
 
216

 
282

Other
 
33

 
54

Total Non-U.S.
 
23,435

 
23,624

 
 
 
 
 
Total
 
$
77,376

 
$
68,196

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)
 
2012

 
2011

Available-for-sale
 
$
217,478

 
$
247,917

Held-to-maturity
 
19,717

 
16,347

Trading securities
 
5,184

 
5,491

Total
 
$
242,379

 
$
269,755




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, 2012
 
As of December 31, 2011
($000)
 
Cost

 
Unrealized
Gain

 
Unrealized
Loss

 
Fair
Value

 
Cost

 
Unrealized
Gain

 
Unrealized
Loss

 
Fair
Value

Available-for-sale:
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Government obligations
 
$
82,317

 
$
53

 
$
(571
)
 
$
81,799

 
$
139,099

 
$
72

 
$
(402
)
 
$
138,769

Corporate bonds
 
78,476

 
38

 
(351
)
 
78,163

 
61,589

 
14

 
(280
)
 
61,323

Commercial paper
 
17,138

 
1

 
(3
)
 
17,136

 
29,964

 
2

 
(7
)
 
29,959

Equity securities and exchange-traded funds
 
29,080

 
827

 
(421
)
 
29,486

 
8,461

 
368

 
(558
)
 
8,271

Mutual funds
 
10,355

 
623

 
(84
)
 
10,894

 
9,298

 
363

 
(66
)
 
9,595

Total
 
$
217,366

 
$
1,542

 
$
(1,430
)
 
$
217,478

 
$
248,411

 
$
819

 
$
(1,313
)
 
$
247,917

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Held-to-maturity:
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Certificates of deposit
 
$
19,717

 
$
—

 
$
—

 
$
19,717

 
$
16,347

 
$
—

 
$
—

 
$
16,347


 
As of June 30, 2012 and December 31, 2011, 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, 2012 and December 31, 2011. 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, 2012
 
As of December 31, 2011
($000)
 
Cost

 
Fair Value

 
Cost

 
Fair Value

Available-for-sale:
 
 

 
 

 
 

 
 

Due in one year or less
 
$
141,562

 
$
140,928

 
$
155,651

 
$
155,247

Due in one to two years
 
36,369

 
36,170

 
75,001

 
74,804

Equity securities, exchange-traded funds, and mutual funds
 
39,435

 
40,380

 
17,759

 
17,866

Total
 
$
217,366

 
$
217,478

 
$
248,411

 
$
247,917

 
 
 
 
 
 
 
 
 
Held-to-maturity:
 
 

 
 

 
 

 
 

Due in one year or less
 
$
19,712

 
$
19,712

 
$
16,342

 
$
16,342

Due in one to three years
 
5

 
5

 
5

 
5

Total
 
$
19,717

 
$
19,717

 
$
16,347

 
$
16,347


 
As of June 30, 2012 and December 31, 2011, held-to-maturity investments included a $1,500,000 and a $1,600,000 certificate of deposit, respectively, held primarily as collateral against a bank guarantee for our office lease 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: 
 
 
Six months ended June 30
($000)
 
2012

 
2011

Realized gains
 
$
470

 
$
397

Realized losses
 
(519
)
 
—

Realized gains (losses), net
 
$
(49
)
 
$
397


 
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:
 
 
 
Six months ended June 30
($000)
 
2012

 
2011

Unrealized gains (losses), net
 
$
156

 
$
(9
)


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, 2012
 
 
as of
 
Using Fair Value Hierarchy
($000)
 
June 30, 2012
 
Level 1

 
Level 2

 
Level 3

Available-for-sale investments:
 
 

 
 

 
 

 
 

Government obligations
 
$
81,799

 
$
—

 
$
81,799

 
$
—

Corporate bonds
 
78,163

 
—

 
78,163

 
—

Commercial paper
 
17,136

 
—

 
17,136

 
—

Equity securities and exchange-traded funds
 
29,486

 
29,486

 
—

 
—

Mutual funds
 
10,894

 
10,894

 
—

 
—

Trading securities
 
5,184

 
5,184

 
—

 
—

Cash equivalents
 
9,485

 
9,485

 
—

 
—

Total
 
$
232,147

 
$
55,049

 
$
177,098

 
$
—

 
 
 
Fair Value
 
Fair Value Measurements as of December 31, 2011
 
 
as of
 
Using Fair Value Hierarchy
($000)
 
December 31, 2011
 
Level 1

 
Level 2

 
Level 3

Available-for-sale investments:
 
 

 
 

 
 

 
 

Government obligations
 
$
138,769

 
$
—

 
$
138,769

 
$
—

Corporate bonds
 
61,323

 
—

 
61,323

 
—

Commercial paper
 
29,959

 
—

 
29,959

 
—

Equity securities and exchange-traded funds
 
8,271

 
8,271

 
—

 
—

Mutual funds
 
9,595

 
9,595

 
—

 
—

Trading securities
 
5,491

 
5,491

 
—

 
—

Cash equivalents
 
30,818

 
30,818

 
—

 
—

Total
 
$
284,226

 
$
54,175

 
$
230,051

 
$
—


 
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, 2012 and December 31, 2011.
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)
 
2012


2011

Investment in MJKK
 
$
19,618

 
$
19,662

Other equity method investments
 
2,645

 
2,807

Investments accounted for using the cost method
 
12,008

 
5,173

Total investments in unconsolidated entities
 
$
34,271

 
$
27,642


 
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 Osaka Stock Exchange, “Hercules Market,” using the ticker 4765. 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

 
 
2012

 
2011

Morningstar’s approximate ownership of MJKK
 
34
%
 
33
%
 
 
 
 
 
Approximate market value of Morningstar’s ownership in MJKK:
 
 

 
 

Japanese yen (¥000)
 
¥
3,293,035

 
¥
2,797,704

Equivalent U.S. dollars ($000)
 
$
41,426

 
$
36,146



Other Equity Method Investments. As of June 30, 2012 and December 31, 2011, other equity method investments consist of our investment in Morningstar Sweden AB (Morningstar Sweden) and YCharts, Inc. (YCharts). Morningstar Sweden develops and markets products and services customized for its respective market. Our ownership interest in Morningstar Sweden was approximately 24% as of June 30, 2012 and December 31, 2011. YCharts is a technology company that provides stock research and analysis. Our ownership interest in YCharts was approximately 20% as of June 30, 2012 and December 31, 2011.

We did not record any impairment losses on our equity method investments in the first six months of 2012 or 2011.
 
Cost Method Investments. As of June 30, 2012 and December 31, 2011, our cost method investments consist of minority investments in Pitchbook Data, Inc. (Pitchbook) and Bundle Corporation (Bundle). As of March 31, 2012, our cost method investments also include HelloWallet LLC (HelloWallet). Pitchbook offers detailed data and information about private equity transactions, investors, companies, limited partners, and service providers. Bundle is a social media company dedicated to helping people make smarter spending and saving choices. HelloWallet is a provider of personalized financial guidance to employees of Fortune 1000 companies. We paid approximately $6,750,000 for the minority equity stake in HelloWallet in the first quarter of 2012. We did not record any impairment losses on our cost method investments in the first six months of 2012 or 2011.
Liability for Vacant Office Space
Liability for Vacant Office Space
Liability for Vacant Office Space
 
We include our liability for vacant office space in "Accounts payable and accrued liabilities" and "Other long-term liabilities," as appropriate, on our Condensed Consolidated Balance Sheets. The following table shows the change in our liability for vacant office space from December 31, 2011 to June 30, 2012:

Liability for vacant office space
 
($000)

Balance as of December 31, 2011
 
$
919

Reduction of liability for lease and other related payments
 
(654
)
Balance as of June 30, 2012
 
$
265



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, 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

(000)
 
2012

Shares available for future grants
 
4,740


 

Accounting for Stock-Based Compensation Awards
 
The following table summarizes our stock-based compensation expense and the related income tax benefit we recorded in the three and six months ended June 30, 2012 and June 30, 2011:
 
 
 
Three months ended June 30
 
Six months ended June 30
($000)
 
2012

 
2011

 
2012

 
2011

Restricted stock units
 
$
3,270

 
$
3,332

 
$
6,548

 
$
6,117

Restricted stock
 
444

 
444

 
888

 
1,308

Stock options
 
20

 
67

 
164

 
67

Total stock-based compensation expense
 
$
3,734

 
$
3,843

 
$
7,600

 
$
7,492

 
 
 
 
 
 
 
 
 
Income tax benefit related to the stock-based compensation expense
 
$
882

 
$
944

 
$
1,804

 
$
1,669


 
The following table summarizes the amount of unrecognized stock-based compensation expense as of June 30, 2012 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
 
$
33,988

 
36

Restricted stock
 
5,031

 
34

Stock options
 
1,355

 
33

Total unrecognized stock-based compensation expense
 
$
40,374

 
36



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. Because our largest annual equity grants typically have vesting dates in the second quarter, we adjust the stock-based compensation expense at that time 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 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 2012:
Restricted Stock Units (RSUs)
 
Unvested

 
Vested but
Deferred

 
Total

 
Weighted
Average
Grant Date Value
per RSU

RSUs outstanding—December 31, 2011
 
741,043

 
20,076

 
761,119

 
$
50.66

Granted
 
293,609

 
—

 
293,609

 
55.40

Dividend equivalents
 
2,553

 
(3
)
 
2,550

 
50.69

Vested
 
(245,251
)
 
—

 
(245,251
)
 
50.74

Vested but deferred
 
1,424

 
(1,424
)
 
—

 
—

Issued
 
—

 
—

 
—

 
—

Forfeited
 
(44,928
)
 
—

 
(44,928
)
 
48.43

RSUs outstanding—June 30, 2012
 
748,450

 
18,649

 
767,099

 
52.59


 
Restricted Stock
 
In conjunction with the Realpoint acquisition 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. The stock-based compensation expense recorded in the first six months of 2011 included approximately $396,000 of expense recognized upon the accelerated vesting of a restricted stock grant. We have assumed that all of the remaining restricted stock will ultimately vest, and therefore we have not incorporated a forfeiture rate for purposes of determining the stock-based compensation expense.
 
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.

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

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

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


The following tables summarize stock option activity in the first six months of 2012 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, 2011
 
398,859

 
$
19.72

Granted
 
—

 
—

Canceled
 
(600
)
 
14.70

Exercised
 
(76,009
)
 
20.07

Options outstanding—June 30, 2012
 
322,250

 
20.13

 
 
 
 
 
Options exercisable—June 30, 2012
 
322,250

 
$
20.13


 
All Other Option Grants, Excluding Activity Shown Above
 
Underlying
Shares

 
Weighted
Average
Exercise
Price

Options outstanding—December 31, 2011
 
818,552

 
$
22.76

Granted
 
—

 
—

Canceled
 
(22,204
)
 
39.90

Exercised
 
(267,835
)
 
16.56

Options outstanding—June 30, 2012
 
528,513

 
25.50

 
 
 
 
 
Options exercisable—June 30, 2012
 
472,890

 
$
21.74

 
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)
 
2012

 
2011

Intrinsic value of options exercised
 
$
14,531

 
$
20,137


 

The table below shows additional information for options outstanding and exercisable as of June 30, 2012:
 
 
 
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)

$8.57 - $14.70
 
161,914

 
0.83

 
$
8.58

 
$
7,975

 
161,914

 
0.83

 
$
8.58

 
$
7,975

$20.09 - $45.80
 
612,543

 
2.67

 
23.16

 
21,241

 
612,543

 
2.67

 
23.16

 
21,241

$57.28 - $59.35
 
76,306

 
8.76

 
57.45

 
39

 
20,683

 
7.87

 
57.28

 
12

$8.57 - $59.35
 
850,763

 


 


 
$
29,255

 
795,140

 


 


 
$
29,228

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Vested or Expected to Vest
 
 
 
 
 
 
 
 
 
 
 
 
 
$8.57 - $59.35
 
856,763

 
2.87

 
$
23.46

 
$
29,256

 
 
 
 
 
 
 
 

 
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, 2012. The intrinsic value is based on our closing stock price of $57.84 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 Statement of Income. The following table summarizes our excess tax benefits for the three and six months ended June 30, 2012 and June 30, 2011:
 
 
Three months ended June 30
 
Six months ended June 30
($000)
 
2012

 
2011

 
2012

 
2011

Excess tax benefits related to stock-based compensation
 
$
1,235

 
$
2,049

 
$
4,548

 
$
6,171

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, 2012 and June 30, 2011:
 
 
 
Three months ended June 30
 
Six months ended June 30
($000)
 
2012

 
2011

 
2012

 
2011

Income before income taxes and equity in net income of unconsolidated entities
 
$
42,131

 
$
38,616

 
$
73,189

 
$
71,199

Equity in net income of unconsolidated entities
 
497

 
595

 
1,063

 
969

Net (income) loss attributable to the noncontrolling interest
 
4

 
(2
)
 
28

 
96

Total
 
$
42,632

 
$
39,209

 
$
74,280

 
$
72,264

Income tax expense
 
$
14,744

 
$
12,724

 
$
26,255

 
$
23,242

Effective tax rate
 
34.6
%
 
32.5
%
 
35.3
%
 
32.2
%

 
Our effective tax rate in the second quarter of 2012 was 34.6%, an increase of 2.1 percentage points compared with the prior-year period. Our effective tax rate in the first half of 2012 was 35.3%, an increase of 3.1 percentage points compared with the first half of 2011. The effective tax rate increase in both periods primarily reflects higher amounts of tax incentives and certain deferred income tax benefits recorded in the 2011 periods.

Unrecognized Tax Benefits

The table below provides information concerning our gross unrecognized tax benefits as of June 30, 2012 and December 31, 2011. 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)
 
2012

 
2011

Gross unrecognized tax benefits
 
$
12,393

 
$
12,189

Gross unrecognized tax benefits that would affect income tax expense
 
$
12,110

 
$
11,907

Decrease in income tax expense upon recognition of gross unrecognized tax benefits
 
$
9,992

 
$
9,827



There were no significant changes to unrecognized tax benefits in the first half of 2012.

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)
 
2012

 
2011

Current liability
 
$
5,305

 
$
5,329

Non-current liability
 
6,627

 
6,200

Total liability for unrecognized tax benefits
 
$
11,932

 
$
11,529



We conduct business globally and as a result, we file income tax returns in U.S. federal, state, local, and foreign jurisdictions. In the normal course of business we are subject to examination by tax authorities throughout the world. The open tax years for our U.S. federal tax returns and most state tax returns include the years 2007 to the present. In non-U.S. jurisdictions, the statute of limitations generally extends to years prior to 2005.

We are currently under audit by the U.S. 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 2012. It is not possible to estimate the effect of current audits on previously recorded unrecognized tax benefits.
 
Our effective tax rate reflects the fact that we are not recording an income tax benefit related to losses recorded by certain of our non-U.S. operations. The net operating losses (NOLs) may become deductible in certain non-U.S. tax jurisdictions to the extent these non-U.S. operations become profitable. In the year certain non-U.S. entities record a loss, we do not record a corresponding tax benefit, thus increasing our effective tax rate. 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. 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 Receiver seeks unspecified damages. The same day the Receiver filed his complaint, Morningstar sought leave from the court to file a counter suit 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 Morningstar from renewing its 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. In mid-June 2012, Morningstar filed a motion to dismiss the Receiver's complaint.

Morningstar believes the allegations against it by the Klass plaintiffs and the Receiver have no legal or factual basis and plans to vigorously contest the claims. Morningstar also intends to refile its 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.

Egan-Jones Rating Co.

In June 2010, Egan-Jones Rating Co. filed a complaint in the Court of Common Pleas of Montgomery County, Pennsylvania against Realpoint, LLC (now known as Morningstar Credit Ratings, LLC) and Morningstar, Inc. in connection with a December 2007 agreement between Egan-Jones and Morningstar Credit Ratings for certain data-sharing and other services. In addition to damages, Egan-Jones filed a petition seeking an injunction to temporarily prevent Morningstar from offering corporate credit ratings through December 31, 2010. In September 2010, the court denied Egan-Jones's request for a preliminary injunction against Morningstar's corporate credit ratings business. Morningstar Credit Ratings and Morningstar continue to vigorously contest liability on all of Egan-Jones' claims for damages. We cannot predict the outcome of the proceeding.

Business Logic Holding Corporation

In November 2009, Business Logic Holding Corporation filed a complaint in the Circuit Court of Cook County, Illinois against Ibbotson Associates, Inc. and Morningstar, Inc. relating to Ibbotson's prior commercial relationship with Business Logic. Business Logic is alleging that Ibbotson Associates and Morningstar violated Business Logic's rights by using its trade secrets to develop a proprietary web-service software and user interface that connects plan participant data with the Ibbotson Wealth Forecasting Engine. Business Logic seeks, among other things, injunctive relief and unspecified damages. Ibbotson and Morningstar answered the complaint, and Ibbotson asserted a counterclaim against Business Logic alleging trade secret misappropriation and breach of contract, seeking damages and injunctive relief. While Morningstar and Ibbotson Associates are vigorously contesting the claims against them, we cannot predict the outcome of the proceeding.

Morningstar Associates, LLC Subpoena from the New York Attorney General's Office

In December 2004, Morningstar Associates, LLC, a wholly owned subsidiary of Morningstar, Inc., received a subpoena from the New York Attorney General's office seeking information and documents related to an investigation the New York Attorney General's office is conducting. The subpoena asked for documents relating to the investment consulting services the company offers to retirement plan providers, including fund lineup recommendations for retirement plan sponsors. Morningstar Associates has provided the requested information and documents.
 
In 2005, Morningstar Associates received subpoenas seeking information and documents related to investigations being conducted by the SEC and United States Department of Labor. The subpoenas were similar in scope to the New York Attorney General subpoena. In January 2007 and September 2009, respectively, the SEC and Department of Labor each notified Morningstar Associates that it had ended its investigation, with no enforcement action, fines, or penalties.
 
In January 2007, Morningstar Associates received a Notice of Proposed Litigation from the New York Attorney General's office. The Notice centers on disclosure relating to an optional service offered to retirement plan sponsors (employers) that select 401(k) plan services from ING, one of Morningstar Associates' clients. The Notice gave Morningstar Associates the opportunity to explain why the New York Attorney General's office should not institute proceedings. Morningstar Associates promptly submitted its explanation and has cooperated fully with the New York Attorney General's office.
 
We cannot predict the scope, timing, or outcome of this matter, which may include the institution of administrative, civil, injunctive, or criminal proceedings, the imposition of fines and penalties, and other remedies and sanctions, any of which could lead to an adverse impact on our stock price, the inability to attract or retain key employees, and the loss of customers. We also cannot predict what impact, if any, this matter may have on our business, operating results, or financial condition.

We have not provided an estimate of loss or range of loss in connection with the matters described above because no such estimate can reasonably be made.

Other Matters

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 Disclosure [Text Block]
Share Repurchase Program
 
In September 2010, the board of directors approved a share repurchase program that authorizes the repurchase of up to $100 million in shares of our outstanding common stock. In December 2011, the board approved an increase to the 2010 share repurchase program. The board approval authorized the company to repurchase up to an additional $200 million in shares of our outstanding common stock with a revised expiration date of December 31, 2013. We may repurchase shares from time to time at prevailing market prices on the open market or in private transactions at our discretion. As of June 30, 2012, we had repurchased a total of 2,660,557 shares for $153,920,000 under this authorization.
Recently Issued Accounting Pronouncements
Recently Issued Accounting Pronouncements
Recently Issued Accounting Pronouncements

In September 2011, the FASB issued ASU No. 2011-08, Intangibles—Goodwill and Other (Topic 350): Testing Goodwill for Impairment. The objective of ASU No. 2011-08 is to simplify how entities test goodwill for impairment. ASU No. 2011-08 provides an option for companies to use a qualitative approach to test goodwill for impairment if certain conditions are met. For Morningstar, the amendments are effective for annual and interim goodwill impairment tests performed in 2012. Early adoption will be permitted. We perform our annual impairment testing in the fourth quarter and do not expect the provisions of ASU No. 2011-08 to have a material effect on our Consolidated Financial Statements.
Summary of Significant Accounting Policies Summary of Significant Accounting Policies (Policies)
Fair Value of Financial Instruments, Policy [Policy Text Block] 
In addition, effective January 1, 2012, we adopted FASB ASU No. 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. ASU No. 2011-04 clarifies existing fair value measurement and disclosure requirements, amends certain fair value measurement principles, and requires additional disclosures about fair value measurements. The adoption of ASU No. 2011-04 did not have a material impact on our Consolidated Financial Statements.
Segment Reporting, Policy [Policy Text Block] 
Our segment accounting policies are the same as those described in Note 2, except for the capitalization and amortization of internal product development costs, amortization of intangible assets, and costs related to corporate functions. We exclude these items from our operating segment results to provide our chief operating decision maker with a better indication of each segment’s ability to generate cash flow. This information is one of the criteria used by our chief operating decision maker in determining how to allocate resources to each segment. We include capitalization and amortization of internal product development costs, amortization of intangible assets, and costs related to corporate functions in the Corporate Items category. Our segment disclosures are consistent with the business segment information provided to our chief operating decision maker on a recurring basis; for that reason, we don’t present balance sheet information by segment. We disclose goodwill by segment in accordance with the requirements of FASB ASC 350-20-50, Intangibles - Goodwill - Disclosure
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:
Acquisitions, Goodwill, and Other Intangible Assets (Tables)
Schedule of Goodwill 
The following table shows the changes in our goodwill balances from December 31, 2011 to June 30, 2012:
 
 
($000)

Balance as of December 31, 2011
$
318,492

Net change, primarily currency translation
(1,529
)
Balance as of June 30, 2012
$
316,963

Schedule of Intangible Assets 
The following table summarizes our intangible assets: 
 
 
As of June 30, 2012
 
As of December 31, 2011
($000)
 
Gross

 
Accumulated
Amortization

 
Net

 
Weighted
Average
Useful  Life
(years)

 
Gross

 
Accumulated
Amortization

 
Net

 
Weighted
Average
Useful  Life
(years)

Intellectual property
 
$
32,073

 
$
(21,671
)
 
$
10,402

 
9

 
$
32,293

 
$
(20,455
)
 
$
11,838

 
9

Customer-related assets
 
134,059

 
(58,926
)
 
75,133

 
12

 
134,396

 
(52,611
)
 
81,785

 
12

Supplier relationships
 
240

 
(90
)
 
150

 
20

 
240

 
(84
)
 
156

 
20

Technology-based assets
 
80,723

 
(39,345
)
 
41,378

 
9

 
80,694

 
(35,130
)
 
45,564

 
9

Non-competition agreement
 
1,750

 
(1,436
)
 
314

 
4

 
1,751

 
(1,285
)
 
466

 
4

Total intangible assets
 
$
248,845

 
$
(121,468
)
 
$
127,377

 
10

 
$
249,374

 
$
(109,565
)
 
$
139,809

 
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)
 
2012

 
2011

 
2012

 
2011

Amortization expense
 
$
5,976

 
$
6,632

 
$
12,031

 
$
13,145

Schedule of Expected Amortization Expense 
We expect intangible amortization expense for 2012 and subsequent years as follows:
 
 
($000)

2012
 
$
23,766

2013
 
21,086

2014
 
19,859

2015
 
18,998

2016
 
14,393

2017
 
9,839

Income Per Share (Tables)
Schedule of Earnings Per Share, Basic and Diluted
The following table shows how we reconcile our net income and the number of shares used in computing basic and diluted income per share:

 
 
Three months ended June 30
 
Six months ended June 30
(in thousands, except per share amounts)
 
2012

 
2011

 
2012

 
2011

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

 
 

 
 
 
 
Net income attributable to Morningstar, Inc.:
 
$
27,888

 
$
26,485

 
$
48,025

 
$
49,022

Less: Distributed earnings available to participating securities
 
(12
)
 
(8
)
 
(27
)
 
(17
)
Less: Undistributed earnings available to participating securities
 
(53
)
 
(72
)
 
(88
)
 
(131
)
Numerator for basic net income per share — undistributed and distributed earnings available to common shareholders
 
$
27,823

 
$
26,405

 
$
47,910

 
$
48,874

 
 
 
 
 
 
 
 
 
Weighted average common shares outstanding
 
49,195

 
50,165

 
49,566

 
49,983

 
 
 
 
 
 
 
 
 
Basic net income per share attributable to Morningstar, Inc.
 
$
0.57

 
$
0.53

 
$
0.97

 
$
0.98

 
 
 
 
 
 
 
 
 
Diluted net income per share attributable to Morningstar, Inc.:
 
 
 
 
 
 
 
 
Numerator for basic net income per share — undistributed and distributed earnings available to common shareholders
 
$
27,823

 
$
26,405

 
$
47,910

 
$
48,874

Add: Undistributed earnings allocated to participating securities
 
53

 
72

 
88

 
131

Less: Undistributed earnings reallocated to participating securities
 
(53
)
 
(70
)
 
(87
)
 
(129
)
Numerator for diluted net income per share — undistributed and distributed earnings available to common shareholders
 
$
27,823

 
$
26,407

 
$
47,911

 
$
48,876

 
 


 


 


 


Weighted average common shares outstanding
 
49,195

 
50,165

 
49,566

 
49,983

Net effect of dilutive stock options and restricted stock units
 
661

 
977

 
730

 
1,058

Weighted average common shares outstanding for computing diluted income per share
 
49,856

 
51,142

 
50,296

 
51,041

 
 


 


 


 


Diluted net income per share attributable to Morningstar, Inc.
 
$
0.56

 
$
0.52

 
$
0.95

 
$
0.96


Segment and Geographical Area Information (Tables)
Schedule of Segment Reporting Information, by Segment 
The following tables present information about our operating segments and by geographical area:
 
 
 
Three months ended June 30, 2012
($000)
 
Investment
Information

 
Investment
Management

 
Corporate Items

 
Total

External revenue
 
$
134,749

 
$
31,219

 
$
—

 
$
165,968

Operating expense, excluding stock-based compensation expense, depreciation, and amortization
 
86,915

 
17,179

 
6,385

 
110,479

Stock-based compensation expense
 
2,531

 
529

 
674

 
3,734

Depreciation and amortization
 
2,300

 
38

 
8,281

 
10,619

Operating income (loss)
 
$
43,003

 
$
13,473

 
$
(15,340
)
 
$
41,136

 
 
 
 
 
 
 
 
 
U.S. capital expenditures
 
 

 
 

 
 

 
$
6,818

Non-U.S. capital expenditures
 
 

 
 

 
 

 
$
2,110

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three months ended June 30, 2011
($000)
 
Investment
Information

 
Investment
Management

 
Corporate Items

 
Total

External revenue
 
$
128,116

 
$
32,895

 
$
—

 
$
161,011

Operating expense, excluding stock-based compensation expense, depreciation, and amortization
 
86,484

 
13,833

 
7,681

 
107,998

Stock-based compensation expense
 
2,488

 
531

 
824

 
3,843

Depreciation and amortization
 
2,047

 
40

 
8,476

 
10,563

Operating income (loss)
 
$
37,097

 
$
18,491

 
$
(16,981
)
 
$
38,607

 
 
 
 
 
 
 
 
 
U.S. capital expenditures
 
 

 
 

 
 

 
$
1,593

Non-U.S. capital expenditures
 
 

 
 

 
 

 
$
1,788

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Six months ended June 30, 2012
($000)
 
Investment
Information

 
Investment
Management

 
Corporate Items

 
Total

External revenue
 
$
261,674

 
$
65,053

 
$
—

 
$
326,727

Operating expense, excluding stock-based compensation expense, depreciation, and amortization
 
180,353

 
33,132

 
13,313

 
226,798

Stock-based compensation expense
 
5,090

 
1,080

 
1,430

 
7,600

Depreciation and amortization
 
4,544

 
77

 
16,173

 
20,794

Operating income (loss)
 
$
71,687

 
$
30,764

 
$
(30,916
)
 
$
71,535

 
 
 
 
 
 
 
 
 
U.S. capital expenditures
 
 

 
 

 
 

 
$
14,215

Non-U.S. capital expenditures
 
 

 
 

 
 

 
$
3,707

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Six months ended June 30, 2011
($000)
 
Investment
Information

 
Investment
Management

 
Corporate Items

 
Total

External revenue
 
$
248,515

 
$
64,263

 
$
—

 
$
312,778

Operating expense, excluding stock-based compensation expense, depreciation, and amortization
 
170,247

 
27,671

 
16,187

 
214,105

Stock-based compensation expense
 
4,958

 
973

 
1,561

 
7,492

Depreciation and amortization
 
3,906

 
82

 
16,777

 
20,765

Operating income (loss)
 
$
69,404

 
$
35,537

 
$
(34,525
)
 
$
70,416

 
 
 
 
 
 
 
 
 
U.S. capital expenditures
 
 

 
 

 
 

 
$
3,523

Non-U.S. capital expenditures
 
 

 
 

 
 

 
$
4,895

 
 
 
 
 
 
 
 
 
 
 
 
As of June 30, 2012
($000)
 
Investment
Information

 
Investment
Management

 
Corporate Items

 
Total

Goodwill
 
$
275,568

 
$
41,395

 
$
—

 
$
316,963

 
 
 
As of December 31, 2011
($000)
 
Investment
Information

 
Investment
Management

 
Corporate Items

 
Total

Goodwill
 
$
277,059

 
$
41,433

 
$
—

 
$
318,492

 
External revenue by geographical area
 
 
 
 
 
 
 
 
 
 
Three months ended June 30
 
Six months ended June 30
($000)
 
2012

 
2011

 
2012

 
2011

United States
 
$
117,952

 
$
113,424

 
$
232,421

 
$
221,605

United Kingdom
 
14,714

 
13,947

 
28,450

 
26,794

Europe, excluding the United Kingdom
 
12,281

 
12,561

 
24,336

 
24,141

Australia
 
9,791

 
10,693

 
19,139

 
19,986

Canada
 
7,397

 
6,784

 
14,747

 
13,401

Asia, excluding Japan
 
2,366

 
2,338

 
4,735

 
4,402

Japan
 
986

 
959

 
1,965

 
1,890

Other
 
481

 
305

 
934

 
559

Total Non-U.S.
 
48,016

 
47,587

 
94,306

 
91,173

 
 
 
 
 
 
 
 
 
Total
 
$
165,968

 
$
161,011

 
$
326,727

 
$
312,778




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)
 
2012

 
2011

 
2012

 
2011

United States
 
$
117,952

 
$
113,424

 
$
232,421

 
$
221,605

United Kingdom
 
14,714

 
13,947

 
28,450

 
26,794

Europe, excluding the United Kingdom
 
12,281

 
12,561

 
24,336

 
24,141

Australia
 
9,791

 
10,693

 
19,139

 
19,986

Canada
 
7,397

 
6,784

 
14,747

 
13,401

Asia, excluding Japan
 
2,366

 
2,338

 
4,735

 
4,402

Japan
 
986

 
959

 
1,965

 
1,890

Other
 
481

 
305

 
934

 
559

Total Non-U.S.
 
48,016

 
47,587

 
94,306

 
91,173

 
 
 
 
 
 
 
 
 
Total
 
$
165,968

 
$
161,011

 
$
326,727

 
$
312,778




Long-lived assets by geographical area
 
 
 
 
 
 
As of June 30
 
As of December 31
($000)
 
2012

 
2011

United States
 
$
53,941

 
$
44,572

United Kingdom
 
7,422

 
7,512

Europe, excluding the United Kingdom
 
2,543

 
2,629

Australia
 
1,550

 
1,415

Canada
 
1,914

 
2,076

Asia, excluding Japan
 
9,757

 
9,656

Japan
 
216

 
282

Other
 
33

 
54

Total Non-U.S.
 
23,435

 
23,624

 
 
 
 
 
Total
 
$
77,376

 
$
68,196

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)
 
2012

 
2011

Available-for-sale
 
$
217,478

 
$
247,917

Held-to-maturity
 
19,717

 
16,347

Trading securities
 
5,184

 
5,491

Total
 
$
242,379

 
$
269,755

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, 2012
 
As of December 31, 2011
($000)
 
Cost

 
Unrealized
Gain

 
Unrealized
Loss

 
Fair
Value

 
Cost

 
Unrealized
Gain

 
Unrealized
Loss

 
Fair
Value

Available-for-sale:
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Government obligations
 
$
82,317

 
$
53

 
$
(571
)
 
$
81,799

 
$
139,099

 
$
72

 
$
(402
)
 
$
138,769

Corporate bonds
 
78,476

 
38

 
(351
)
 
78,163

 
61,589

 
14

 
(280
)
 
61,323

Commercial paper
 
17,138

 
1

 
(3
)
 
17,136

 
29,964

 
2

 
(7
)
 
29,959

Equity securities and exchange-traded funds
 
29,080

 
827

 
(421
)
 
29,486

 
8,461

 
368

 
(558
)
 
8,271

Mutual funds
 
10,355

 
623

 
(84
)
 
10,894

 
9,298

 
363

 
(66
)
 
9,595

Total
 
$
217,366

 
$
1,542

 
$
(1,430
)
 
$
217,478

 
$
248,411

 
$
819

 
$
(1,313
)
 
$
247,917

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Held-to-maturity:
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Certificates of deposit
 
$
19,717

 
$
—

 
$
—

 
$
19,717

 
$
16,347

 
$
—

 
$
—

 
$
16,347

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, 2012
 
As of December 31, 2011
($000)
 
Cost

 
Fair Value

 
Cost

 
Fair Value

Available-for-sale:
 
 

 
 

 
 

 
 

Due in one year or less
 
$
141,562

 
$
140,928

 
$
155,651

 
$
155,247

Due in one to two years
 
36,369

 
36,170

 
75,001

 
74,804

Equity securities, exchange-traded funds, and mutual funds
 
39,435

 
40,380

 
17,759

 
17,866

Total
 
$
217,366

 
$
217,478

 
$
248,411

 
$
247,917

 
 
 
 
 
 
 
 
 
Held-to-maturity:
 
 

 
 

 
 

 
 

Due in one year or less
 
$
19,712

 
$
19,712

 
$
16,342

 
$
16,342

Due in one to three years
 
5

 
5

 
5

 
5

Total
 
$
19,717

 
$
19,717

 
$
16,347

 
$
16,347

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: 
 
 
Six months ended June 30
($000)
 
2012

 
2011

Realized gains
 
$
470

 
$
397

Realized losses
 
(519
)
 
—

Realized gains (losses), net
 
$
(49
)
 
$
397

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:
 
 
 
Six months ended June 30
($000)
 
2012

 
2011

Unrealized gains (losses), net
 
$
156

 
$
(9
)
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, 2012
 
 
as of
 
Using Fair Value Hierarchy
($000)
 
June 30, 2012
 
Level 1

 
Level 2

 
Level 3

Available-for-sale investments:
 
 

 
 

 
 

 
 

Government obligations
 
$
81,799

 
$
—

 
$
81,799

 
$
—

Corporate bonds
 
78,163

 
—

 
78,163

 
—

Commercial paper
 
17,136

 
—

 
17,136

 
—

Equity securities and exchange-traded funds
 
29,486

 
29,486

 
—

 
—

Mutual funds
 
10,894

 
10,894

 
—

 
—

Trading securities
 
5,184

 
5,184

 
—

 
—

Cash equivalents
 
9,485

 
9,485

 
—

 
—

Total
 
$
232,147

 
$
55,049

 
$
177,098

 
$
—

 
 
 
Fair Value
 
Fair Value Measurements as of December 31, 2011
 
 
as of
 
Using Fair Value Hierarchy
($000)
 
December 31, 2011
 
Level 1

 
Level 2

 
Level 3

Available-for-sale investments:
 
 

 
 

 
 

 
 

Government obligations
 
$
138,769

 
$
—

 
$
138,769

 
$
—

Corporate bonds
 
61,323

 
—

 
61,323

 
—

Commercial paper
 
29,959

 
—

 
29,959

 
—

Equity securities and exchange-traded funds
 
8,271

 
8,271

 
—

 
—

Mutual funds
 
9,595

 
9,595

 
—

 
—

Trading securities
 
5,491

 
5,491

 
—

 
—

Cash equivalents
 
30,818

 
30,818

 
—

 
—

Total
 
$
284,226

 
$
54,175

 
$
230,051

 
$
—

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)
 
2012


2011

Investment in MJKK
 
$
19,618

 
$
19,662

Other equity method investments
 
2,645

 
2,807

Investments accounted for using the cost method
 
12,008

 
5,173

Total investments in unconsolidated entities
 
$
34,271

 
$
27,642

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

 
 
2012

 
2011

Morningstar’s approximate ownership of MJKK
 
34
%
 
33
%
 
 
 
 
 
Approximate market value of Morningstar’s ownership in MJKK:
 
 

 
 

Japanese yen (¥000)
 
¥
3,293,035

 
¥
2,797,704

Equivalent U.S. dollars ($000)
 
$
41,426

 
$
36,146

Liability for Vacant Office Space (Tables)
Liability for Vacant Office Space
The following table shows the change in our liability for vacant office space from December 31, 2011 to June 30, 2012:

Liability for vacant office space
 
($000)

Balance as of December 31, 2011
 
$
919

Reduction of liability for lease and other related payments
 
(654
)
Balance as of June 30, 2012
 
$
265

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

(000)
 
2012

Shares available for future grants
 
4,740

Schedule of Stock-Based Compensation Expense 
The following table summarizes our stock-based compensation expense and the related income tax benefit we recorded in the three and six months ended June 30, 2012 and June 30, 2011:
 
 
 
Three months ended June 30
 
Six months ended June 30
($000)
 
2012

 
2011

 
2012

 
2011

Restricted stock units
 
$
3,270

 
$
3,332

 
$
6,548

 
$
6,117

Restricted stock
 
444

 
444

 
888

 
1,308

Stock options
 
20

 
67

 
164

 
67

Total stock-based compensation expense
 
$
3,734

 
$
3,843

 
$
7,600

 
$
7,492

 
 
 
 
 
 
 
 
 
Income tax benefit related to the stock-based compensation expense
 
$
882

 
$
944

 
$
1,804

 
$
1,669

Schedule of Unrecognized Stock-Based Compensation Expense 
The following table summarizes the amount of unrecognized stock-based compensation expense as of June 30, 2012 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
 
$
33,988

 
36

Restricted stock
 
5,031

 
34

Stock options
 
1,355

 
33

Total unrecognized stock-based compensation expense
 
$
40,374

 
36

Schedule of Restricted Stock Units Award Activity 

The following table summarizes restricted stock unit activity during the first six months of 2012:
Restricted Stock Units (RSUs)
 
Unvested

 
Vested but
Deferred

 
Total

 
Weighted
Average
Grant Date Value
per RSU

RSUs outstanding—December 31, 2011
 
741,043

 
20,076

 
761,119

 
$
50.66

Granted
 
293,609

 
—

 
293,609

 
55.40

Dividend equivalents
 
2,553

 
(3
)
 
2,550

 
50.69

Vested
 
(245,251
)
 
—

 
(245,251
)
 
50.74

Vested but deferred
 
1,424

 
(1,424
)
 
—

 
—

Issued
 
—

 
—

 
—

 
—

Forfeited
 
(44,928
)
 
—

 
(44,928
)
 
48.43

RSUs outstanding—June 30, 2012
 
748,450

 
18,649

 
767,099

 
52.59

Schedule of Stock Options, Valuation Assumptions 
The weighted average fair value of options granted during 2011 was $23.81 per share, based on the following assumptions:

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

Volatility factor:
 
35.1
%
Dividend yield:
 
0.35
%
Interest rate:
 
2.87
%
Schedule of Options Granted at Exercise Price Below Fair Value per Share on Grant Date 
The first table includes activity for options granted at an exercise price below the fair value per share of our common stock on the grant date; the second table includes activity for all other option grants. 
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, 2011
 
398,859

 
$
19.72

Granted
 
—

 
—

Canceled
 
(600
)
 
14.70

Exercised
 
(76,009
)
 
20.07

Options outstanding—June 30, 2012
 
322,250

 
20.13

 
 
 
 
 
Options exercisable—June 30, 2012
 
322,250

 
$
20.13

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

 
Weighted
Average
Exercise
Price

Options outstanding—December 31, 2011
 
818,552

 
$
22.76

Granted
 
—

 
—

Canceled
 
(22,204
)
 
39.90

Exercised
 
(267,835
)
 
16.56

Options outstanding—June 30, 2012
 
528,513

 
25.50

 
 
 
 
 
Options exercisable—June 30, 2012
 
472,890

 
$
21.74

 
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)
 
2012

 
2011

Intrinsic value of options exercised
 
$
14,531

 
$
20,137

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, 2012:
 
 
 
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)

$8.57 - $14.70
 
161,914

 
0.83

 
$
8.58

 
$
7,975

 
161,914

 
0.83

 
$
8.58

 
$
7,975

$20.09 - $45.80
 
612,543

 
2.67

 
23.16

 
21,241

 
612,543

 
2.67

 
23.16

 
21,241

$57.28 - $59.35
 
76,306

 
8.76

 
57.45

 
39

 
20,683

 
7.87

 
57.28

 
12

$8.57 - $59.35
 
850,763

 


 


 
$
29,255

 
795,140

 


 


 
$
29,228

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Vested or Expected to Vest
 
 
 
 
 
 
 
 
 
 
 
 
 
$8.57 - $59.35
 
856,763

 
2.87

 
$
23.46

 
$
29,256

 
 
 
 
 
 
 
 
Schedule of Tax Benefits Related to Share Based Compensation 
The following table summarizes our excess tax benefits for the three and six months ended June 30, 2012 and June 30, 2011:
 
 
Three months ended June 30
 
Six months ended June 30
($000)
 
2012

 
2011

 
2012

 
2011

Excess tax benefits related to stock-based compensation
 
$
1,235

 
$
2,049

 
$
4,548

 
$
6,171

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, 2012 and June 30, 2011:
 
 
 
Three months ended June 30
 
Six months ended June 30
($000)
 
2012

 
2011

 
2012

 
2011

Income before income taxes and equity in net income of unconsolidated entities
 
$
42,131

 
$
38,616

 
$
73,189

 
$
71,199

Equity in net income of unconsolidated entities
 
497

 
595

 
1,063

 
969

Net (income) loss attributable to the noncontrolling interest
 
4

 
(2
)
 
28

 
96

Total
 
$
42,632

 
$
39,209

 
$
74,280

 
$
72,264

Income tax expense
 
$
14,744

 
$
12,724

 
$
26,255

 
$
23,242

Effective tax rate
 
34.6
%
 
32.5
%
 
35.3
%
 
32.2
%
Schedule of Gross Unrecognized Tax Benefits 
The table below provides information concerning our gross unrecognized tax benefits as of June 30, 2012 and December 31, 2011. 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)
 
2012

 
2011

Gross unrecognized tax benefits
 
$
12,393

 
$
12,189

Gross unrecognized tax benefits that would affect income tax expense
 
$
12,110

 
$
11,907

Decrease in income tax expense upon recognition of gross unrecognized tax benefits
 
$
9,992

 
$
9,827

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)
 
2012

 
2011

Current liability
 
$
5,305

 
$
5,329

Non-current liability
 
6,627

 
6,200

Total liability for unrecognized tax benefits
 
$
11,932

 
$
11,529

Goodwill and Other Intangible Assets (Schedule of Goodwill) (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Jun. 30, 2012
Goodwill [Roll Forward]
 
 
 
Goodwill, Beginning Balance
 
 
$ 318,492 
Other, primarily currency translation
 
 
(1,529)
Goodwill, Ending Balance
316,963 
 
316,963 
Goodwill impairment loss
$ 0 
$ 0 
 
Goodwill and Other Intangible Assets (Schedule of Intangible Assets) (Details) (USD $)
In Thousands, unless otherwise specified
6 Months Ended 12 Months Ended
Jun. 30, 2012
Years
Dec. 31, 2011
Years
Finite-Lived Intangible Assets [Line Items]
 
 
Gross
$ 248,845 
$ 249,374 
Accumulated Amortization
(121,468)
(109,565)
Intangible assets, Net
127,377 
139,809 
Weighted-Average Useful Life (years)
10 
10 
Intellectual Property [Member]
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
Gross
32,073 
32,293 
Accumulated Amortization
(21,671)
(20,455)
Intangible assets, Net
10,402 
11,838 
Weighted-Average Useful Life (years)
9 
9 
Customer Related Assets [Member]
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
Gross
134,059 
134,396 
Accumulated Amortization
(58,926)
(52,611)
Intangible assets, Net
75,133 
81,785 
Weighted-Average Useful Life (years)
12 
12 
Supplier Relationships [Member]
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
Gross
240 
240 
Accumulated Amortization
(90)
(84)
Intangible assets, Net
150 
156 
Weighted-Average Useful Life (years)
20 
20 
Technology-Based Assets [Member]
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
Gross
80,723 
80,694 
Accumulated Amortization
(39,345)
(35,130)
Intangible assets, Net
41,378 
45,564 
Weighted-Average Useful Life (years)
9 
9 
Non-competition Agreement [Member]
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
Gross
1,750 
1,751 
Accumulated Amortization
(1,436)
(1,285)
Intangible assets, Net
$ 314 
$ 466 
Weighted-Average Useful Life (years)
4 
4 
Goodwill and Other Intangible Assets (Amortization Expense) (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Jun. 30, 2012
Jun. 30, 2011
Goodwill and Intangible Assets Disclosure [Abstract]
 
 
 
 
Amortization expense
$ 5,976 
$ 6,632 
$ 12,031 
$ 13,145 
Finite-Lived Intangible Assets, Future Amortization Expense [Abstract]
 
 
 
 
2012
23,766 
 
 
 
2013
21,086 
 
 
 
2014
19,859 
 
 
 
2015
18,998 
 
 
 
2016
14,393 
 
 
 
2017
$ 9,839 
 
 
 
Income Per Share (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Jun. 30, 2012
Jun. 30, 2011
Earnings Per Share, Basic [Abstract]
 
 
 
 
Net income attributable to Morningstar, Inc.
$ 27,888 
$ 26,485 
$ 48,025 
$ 49,022 
Less: Distributed Earnings Available to Participating Securities
(12)
(8)
(27)
(17)
Less: Undistributed earnings allocated to participating securities
(53)
(72)
(88)
(131)
Numerator for basic net income per share - undistributed and distributed earnings available to common shareholders
27,823 
26,405 
47,910 
48,874 
Weighted average common shares outstanding
49,195 
50,165 
49,566 
49,983 
Basic net income per share attributable to Morningstar, Inc.
$ 0.57 
$ 0.53 
$ 0.97 
$ 0.98 
Earnings Per Share, Diluted [Abstract]
 
 
 
 
Numerator for basic net income per share - undistributed and distributed earnings available to common shareholders
27,823 
26,405 
47,910 
48,874 
Add: Undistributed Earnings Allocated To Participating Securities
53 
72 
88 
131 
Less: Undistributed Earnings Reallocated to Participating Securities
(53)
(70)
(87)
(129)
Numerator for diluted net income per share - undistributed and distributed earnings available to common shareholders
$ 27,823 
$ 26,407 
$ 47,911 
$ 48,876 
Weighted average common shares outstanding
49,195 
50,165 
49,566 
49,983 
Net effect of dilutive stock options and restricted stock units
661 
977 
730 
1,058 
Weighted average common shares outstanding for computing diluted income per share
49,856 
51,142 
50,296 
51,041 
Diluted net income per share attributable to Morningstar, Inc.
$ 0.56 
$ 0.52 
$ 0.95 
$ 0.96 
Segment and Geographical Area Information (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Jun. 30, 2012
Jun. 30, 2011
Dec. 31, 2011
Segment Reporting Information, Operating Income (Loss) [Abstract]
 
 
 
 
 
External revenue
$ 165,968 
$ 161,011 
$ 326,727 
$ 312,778 
 
Operating expense, excluding stock-based compensation expense, depreciation, and amortization
110,479 
107,998 
226,798 
214,105 
 
Stock-based compensation expense
3,734 
3,843 
7,600 
7,492 
 
Depreciation and amortization
10,619 1
10,563 1
20,794 
20,765 
 
Operating income (loss)
41,136 
38,607 
71,535 
70,416 
 
Segment Reporting Information, Additional Information [Abstract]
 
 
 
 
 
Goodwill
316,963 
 
316,963 
 
318,492 
Investment Information [Member]
 
 
 
 
 
Segment Reporting Information, Operating Income (Loss) [Abstract]
 
 
 
 
 
External revenue
134,749 
128,116 
261,674 
248,515 
 
Operating expense, excluding stock-based compensation expense, depreciation, and amortization
86,915 
86,484 
180,353 
170,247 
 
Stock-based compensation expense
2,531 
2,488 
5,090 
4,958 
 
Depreciation and amortization
2,300 
2,047 
4,544 
3,906 
 
Operating income (loss)
43,003 
37,097 
71,687 
69,404 
 
Segment Reporting Information, Additional Information [Abstract]
 
 
 
 
 
Goodwill
275,568 
 
275,568 
 
277,059 
Investment Management [Member]
 
 
 
 
 
Segment Reporting Information, Operating Income (Loss) [Abstract]
 
 
 
 
 
External revenue
31,219 
32,895 
65,053 
64,263 
 
Operating expense, excluding stock-based compensation expense, depreciation, and amortization
17,179 
13,833 
33,132 
27,671 
 
Stock-based compensation expense
529 
531 
1,080 
973 
 
Depreciation and amortization
38 
40 
77 
82 
 
Operating income (loss)
13,473 
18,491 
30,764 
35,537 
 
Segment Reporting Information, Additional Information [Abstract]
 
 
 
 
 
Goodwill
41,395 
 
41,395 
 
41,433 
Corporate Items [Member]
 
 
 
 
 
Segment Reporting Information, Operating Income (Loss) [Abstract]
 
 
 
 
 
External revenue
0 
0 
0 
0 
 
Operating expense, excluding stock-based compensation expense, depreciation, and amortization
6,385 
7,681 
13,313 
16,187 
 
Stock-based compensation expense
674 
824 
1,430 
1,561 
 
Depreciation and amortization
8,281 
8,476 
16,173 
16,777 
 
Operating income (loss)
(15,340)
(16,981)
(30,916)
(34,525)
 
Segment Reporting Information, Additional Information [Abstract]
 
 
 
 
 
Goodwill
0 
 
0 
 
0 
U.S. [Member]
 
 
 
 
 
Segment Reporting Information, Operating Income (Loss) [Abstract]
 
 
 
 
 
External revenue
117,952 
113,424 
232,421 
221,605 
 
Segment Reporting Information, Additional Information [Abstract]
 
 
 
 
 
Capital expenditure
6,818 
1,593 
14,215 
3,523 
 
Non-U.S. [Member]
 
 
 
 
 
Segment Reporting Information, Operating Income (Loss) [Abstract]
 
 
 
 
 
External revenue
48,016 
47,587 
94,306 
91,173 
 
Segment Reporting Information, Additional Information [Abstract]
 
 
 
 
 
Capital expenditure
$ 2,110 
$ 1,788 
$ 3,707 
$ 4,895 
 
Segment and Geographical Area Information 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, 2012
Jun. 30, 2011
Jun. 30, 2012
Jun. 30, 2011
Dec. 31, 2011
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
 
External revenue
$ 165,968 
$ 161,011 
$ 326,727 
$ 312,778 
 
Long-lived assets
77,376 
 
77,376 
 
68,196 
United States
 
 
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
 
External revenue
117,952 
113,424 
232,421 
221,605 
 
Long-lived assets
53,941 
 
53,941 
 
44,572 
Non United States [Member]
 
 
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
 
External revenue
48,016 
47,587 
94,306 
91,173 
 
Long-lived assets
23,435 
 
23,435 
 
23,624 
United Kingdom
 
 
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
 
External revenue
14,714 
13,947 
28,450 
26,794 
 
Long-lived assets
7,422 
 
7,422 
 
7,512 
Europe, excluding the United Kingdom
 
 
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
 
External revenue
12,281 
12,561 
24,336 
24,141 
 
Long-lived assets
2,543 
 
2,543 
 
2,629 
Australia
 
 
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
 
External revenue
9,791 
10,693 
19,139 
19,986 
 
Long-lived assets
1,550 
 
1,550 
 
1,415 
Canada
 
 
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
 
External revenue
7,397 
6,784 
14,747 
13,401 
 
Long-lived assets
1,914 
 
1,914 
 
2,076 
Asia, excluding Japan
 
 
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
 
External revenue
2,366 
2,338 
4,735 
4,402 
 
Long-lived assets
9,757 
 
9,757 
 
9,656 
Japan
 
 
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
 
External revenue
986 
959 
1,965 
1,890 
 
Long-lived assets
216 
 
216 
 
282 
Other
 
 
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
 
 
External revenue
481 
305 
934 
559 
 
Long-lived assets
$ 33 
 
$ 33 
 
$ 54 
Investments and Fair Value Measurements (Classification of Securities) (Details) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2012
Dec. 31, 2011
Fair Value Disclosures [Abstract]
 
 
Available-for-sale
$ 217,478 
$ 247,917 
Held-to-maturity
19,717 
16,347 
Trading securities
5,184 
5,491 
Total
$ 242,379 
$ 269,755 
Investments and Fair Value Measurements (Gains (Losses) on Investments) (Details) (USD $)
In Thousands, unless otherwise specified
6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Dec. 31, 2011
Available-for-sale:
 
 
 
Available-for-sale securities, Cost
$ 217,366 
 
$ 248,411 
Available-for-sale securities, Unrealized Gain
1,542 
 
819 
Available-for-sale securities, Unrealized Loss
(1,430)
 
(1,313)
Available-for-sale securities, Current
217,478 
 
247,917 
Held-to-maturity:
 
 
 
Held-to-maturity securities, Cost
19,717 
 
16,347 
Held-to-maturity securities, Unrecognized Gain
0 
 
0 
Held-to-maturity securities, Unrecognized Loss
0 
 
0 
Held-to-maturity securities, Current
19,717 
 
16,347 
Available-for-sale Securities, Gross Realized Gain (Loss) [Abstract]
 
 
 
Available-for-sale securities, realized gains
470 
397 
 
Available-for-sale securities, realized losses
(519)
0 
 
Available-for-sale securities, realized gains (losses), net
(49)
397 
 
Government Obligations [Member]
 
 
 
Available-for-sale:
 
 
 
Available-for-sale securities, Cost
82,317 
 
139,099 
Available-for-sale securities, Unrealized Gain
53 
 
72 
Available-for-sale securities, Unrealized Loss
(571)
 
(402)
Available-for-sale securities, Fair Value
81,799 
 
138,769 
Corporate Bonds [Member]
 
 
 
Available-for-sale:
 
 
 
Available-for-sale securities, Cost
78,476 
 
61,589 
Available-for-sale securities, Unrealized Gain
38 
 
14 
Available-for-sale securities, Unrealized Loss
(351)
 
(280)
Available-for-sale securities, Fair Value
78,163 
 
61,323 
Commercial Paper [Member]
 
 
 
Available-for-sale:
 
 
 
Available-for-sale securities, Cost
17,138 
 
29,964 
Available-for-sale securities, Unrealized Gain
1 
 
2 
Available-for-sale securities, Unrealized Loss
(3)
 
(7)
Available-for-sale securities, Fair Value
17,136 
 
29,959 
Equity Securities and Exchange-traded Funds [Member]
 
 
 
Available-for-sale:
 
 
 
Available-for-sale securities, Cost
29,080 
 
8,461 
Available-for-sale securities, Unrealized Gain
827 
 
368 
Available-for-sale securities, Unrealized Loss
(421)
 
(558)
Available-for-sale securities, Fair Value
29,486 
 
8,271 
Mutual Funds [Member]
 
 
 
Available-for-sale:
 
 
 
Available-for-sale securities, Cost
10,355 
 
9,298 
Available-for-sale securities, Unrealized Gain
623 
 
363 
Available-for-sale securities, Unrealized Loss
(84)
 
(66)
Available-for-sale securities, Fair Value
$ 10,894 
 
$ 9,595 
Investments and Fair Value Measurements (Cost and Fair Value of Investments Classified by Maturity) (Details) (USD $)
Jun. 30, 2012
Dec. 31, 2011
Available-for-sale Securities, Debt Maturities [Abstract]
 
 
Available-for-sale securities, Due in one year or less, Cost
$ 141,562,000 
$ 155,651,000 
Available-for-sale securities, Due in one year or less, Fair Vlaue
140,928,000 
155,247,000 
Available-for-sale securities, Due in one to two years, Cost
36,369,000 
75,001,000 
Available-for-sale securities, Due in one to two years, Fair Value
36,170,000 
74,804,000 
Available-for-sale securities, Equity securities, exchange-traded funds, and mutual funds, Cost
39,435,000 
17,759,000 
Available-for-sale securities, Equity securities, exchange-traded funds, and mutual funds, Fair Value
40,380,000 
17,866,000 
Available-for-sale securities, Cost
217,366,000 
248,411,000 
Available-for-sale securities, Current
217,478,000 
247,917,000 
Held-to-maturity Securities, Debt Maturities [Abstract]
 
 
Held-to-maturity securities, Due in one year or less, Cost
19,712,000 
16,342,000 
Held-to-maturity securities, Due within one year or less, Fair Value
19,712,000 
16,342,000 
Held-to-maturity securities, Due in one to three years, Cost
5,000 
5,000 
Held-to-maturity securities, Due in one to three years, Fair Value
5,000 
5,000 
Held-to-maturity securities, Cost
19,717,000 
16,347,000 
Held-to-maturity securities, Current
19,717,000 
16,347,000 
Certificate of deposit held as collateral against Australia office lease
$ 1,500,000 
$ 1,600,000 
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, 2012
Jun. 30, 2011
Schedule of Trading Securities and Other Trading Assets [Line Items]
 
 
Unrealized gains (losses), net
$ 156 
$ (9)
Investments and Fair Value Measurements (Fair Value of Assets) (Details) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2012
Dec. 31, 2011
Government Obligations [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Available-for-sale securities, fair value
$ 81,799 
$ 138,769 
Corporate Bonds [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Available-for-sale securities, fair value
78,163 
61,323 
Commercial Paper [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Available-for-sale securities, fair value
17,136 
29,959 
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
29,486 
8,271 
Mutual Funds [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Available-for-sale securities, fair value
10,894 
9,595 
Fair Value, Measurements, Recurring [Member] |
Estimate of Fair Value, Fair Value Disclosure [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Trading securities, fair value
5,184 
5,491 
Cash equivalents, fair value
9,485 
30,818 
Total investments, fair value
232,147 
284,226 
Fair Value, Measurements, Recurring [Member] |
Estimate of Fair Value, Fair Value Disclosure [Member] |
Government Obligations [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Available-for-sale securities, fair value
81,799 
138,769 
Fair Value, Measurements, Recurring [Member] |
Estimate of Fair Value, Fair Value Disclosure [Member] |
Corporate Bonds [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Available-for-sale securities, fair value
78,163 
61,323 
Fair Value, Measurements, Recurring [Member] |
Estimate of Fair Value, Fair Value Disclosure [Member] |
Commercial Paper [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Available-for-sale securities, fair value
17,136 
29,959 
Fair Value, Measurements, Recurring [Member] |
Estimate of Fair Value, Fair Value Disclosure [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
29,486 
8,271 
Fair Value, Measurements, Recurring [Member] |
Estimate of Fair Value, Fair Value Disclosure [Member] |
Mutual Funds [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Available-for-sale securities, fair value
10,894 
9,595 
Fair Value, Measurements, Recurring [Member] |
Fair Value, Inputs, Level 1 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Trading securities, fair value
5,184 
5,491 
Cash equivalents, fair value
9,485 
30,818 
Total investments, fair value
55,049 
54,175 
Fair Value, Measurements, Recurring [Member] |
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, Measurements, Recurring [Member] |
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, Measurements, Recurring [Member] |
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, Measurements, Recurring [Member] |
Fair Value, Inputs, Level 1 [Member] |
Equity Securities and Exchange-traded Funds [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Available-for-sale securities, fair value
29,486 
8,271 
Fair Value, Measurements, Recurring [Member] |
Fair Value, Inputs, Level 1 [Member] |
Mutual Funds [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Available-for-sale securities, fair value
10,894 
9,595 
Fair Value, Measurements, Recurring [Member] |
Fair Value, Inputs, Level 2 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Trading securities, fair value
0 
0 
Cash equivalents, fair value
0 
0 
Total investments, fair value
177,098 
230,051 
Fair Value, Measurements, Recurring [Member] |
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
81,799 
138,769 
Fair Value, Measurements, Recurring [Member] |
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
78,163 
61,323 
Fair Value, Measurements, Recurring [Member] |
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
17,136 
29,959 
Fair Value, Measurements, Recurring [Member] |
Fair Value, Inputs, Level 2 [Member] |
Equity Securities and Exchange-traded Funds [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Available-for-sale securities, fair value
0 
0 
Fair Value, Measurements, Recurring [Member] |
Fair Value, Inputs, Level 2 [Member] |
Mutual Funds [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Available-for-sale securities, fair value
0 
0 
Fair Value, Measurements, Recurring [Member] |
Fair Value, Inputs, Level 3 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Trading securities, fair value
0 
0 
Cash equivalents, fair value
0 
0 
Total investments, fair value
0 
0 
Fair Value, Measurements, Recurring [Member] |
Fair Value, Inputs, Level 3 [Member] |
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, Measurements, Recurring [Member] |
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, Measurements, Recurring [Member] |
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, Measurements, Recurring [Member] |
Fair Value, Inputs, Level 3 [Member] |
Equity Securities and Exchange-traded Funds [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Available-for-sale securities, fair value
0 
0 
Fair Value, Measurements, Recurring [Member] |
Fair Value, Inputs, Level 3 [Member] |
Mutual Funds [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Available-for-sale securities, fair value
$ 0 
$ 0 
Investments in Unconsolidated Entities (Details)
6 Months Ended
Jun. 30, 2012
USD ($)
Jun. 30, 2011
USD ($)
Dec. 31, 2011
USD ($)
Jun. 30, 2012
Morningstar Japan KK [Member]
USD ($)
Jun. 30, 2012
Morningstar Japan KK [Member]
JPY (¥)
Dec. 31, 2011
Morningstar Japan KK [Member]
USD ($)
Dec. 31, 2011
Morningstar Japan KK [Member]
JPY (¥)
Jun. 30, 2012
Other Equity Method Investments [Member]
USD ($)
Dec. 31, 2011
Other Equity Method Investments [Member]
USD ($)
Jun. 30, 2012
YCharts [Member]
Dec. 31, 2011
YCharts [Member]
Jun. 30, 2012
Morningstar Sweden AB [Member]
Dec. 31, 2011
Morningstar Sweden AB [Member]
Schedule of Equity Method Investments [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
Equity method investments
 
 
 
$ 19,618,000 
 
$ 19,662,000 
 
$ 2,645,000 
$ 2,807,000 
 
 
 
 
Cost method investments
12,008,000 
 
5,173,000 
 
 
 
 
 
 
 
 
 
 
Total investments in unconsolidated entities
34,271,000 
 
27,642,000 
 
 
 
 
 
 
 
 
 
 
Equity method investment, ownership percentage
 
 
 
34.00% 
34.00% 
33.00% 
33.00% 
 
 
20.00% 
20.00% 
24.00% 
24.00% 
Equity method investment, approximate market value
 
 
 
41,426,000 
3,293,035,000 
36,146,000 
2,797,704,000 
 
 
 
 
 
 
Equity-method investments, other than temporary impairment
0 
0 
 
 
 
 
 
 
 
 
 
 
 
Payments for cost method investments in HelloWallet
6,750,000 
0 
 
 
 
 
 
 
 
 
 
 
 
Cost-method investments, other than temporary impairment
$ 0 
$ 0 
 
 
 
 
 
 
 
 
 
 
 
Liability for Vacant Office Space (Details) (USD $)
In Thousands, unless otherwise specified
6 Months Ended
Jun. 30, 2012
Liability for Vacant Office Space [Roll Forward]
 
Vacant office space liability, beginning balance
$ 919 
Reduction of liability for lease and other related payments
(654)
Vacant office space liability, ending balance
$ 265 
Stock-Based Compensation (Shares Available For Future Grants) (Details)
In Thousands, unless otherwise specified
Jun. 30, 2012
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
 
Shares available for future grants
4,740 
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, 2012
Jun. 30, 2011
Jun. 30, 2012
Jun. 30, 2011
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
Stock-based compensation expense
$ 3,734 
$ 3,843 
$ 7,600 
$ 7,492 
Income tax benefit related to the stock-based compensation expense
882 
944 
1,804 
1,669 
Restricted Stock Units (RSUs) [Member]
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
Stock-based compensation expense
3,270 
3,332 
6,548 
6,117 
Restricted Stock [Member]
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
Stock-based compensation expense
444 
444 
888 
1,308 
Stock Options [Member]
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
Stock-based compensation expense
$ 20 
$ 67 
$ 164 
$ 67 
Stock-Based Compensation (Schedule of Unrecognized Stock-based Compensation Expense) (Details) (USD $)
In Thousands, unless otherwise specified
6 Months Ended
Jun. 30, 2012
Months
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
Unrecognized stock-based compensation expense
$ 40,374 
Expected amortization period (months)
36 
Restricted Stock Units (RSUs) [Member]
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
Unrecognized stock-based compensation expense
33,988 
Expected amortization period (months)
36 
Restricted Stock [Member]
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
Unrecognized stock-based compensation expense
5,031 
Expected amortization period (months)
34 
Stock Options [Member]
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
Unrecognized stock-based compensation expense
$ 1,355 
Expected amortization period (months)
33 
Stock-Based Compensation (Restricted Stock Units Activity) (Details) (Restricted Stock Units (RSUs) [Member], USD $)
6 Months Ended
Jun. 30, 2012
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
741,043 
RSUs outstanding, Beginning Balance, Vested but Deferred
20,076 
RSUs outstanding, Beginning Balance, Total
761,119 
RSUs outstanding, Beginning Balance, Weighted Average Grant Date Valueper RSU
$ 50.66 
Granted, Unvested
293,609 
Granted, Total
293,609 
Granted, Weighted Average Grant Date Valueper RSU
$ 55.40 
Dividend equivalents, Unvested
2,553 
Dividend equivalents, Vestedd but Deferred
(3)
Dividend equivalents, Total
2,550 
Dividend equivalents, Weighted Average Grant Date Valueper RSU
$ 50.69 
Vested, Unvested
(245,251)
Vested, Total
(245,251)
Vested, Weighted Average Grant Date Valueper RSU
$ 50.74 
Vested but deferred, Unvested
1,424 
Vested but deferred, Vested but Deferred
(1,424)
Vested but deferred, Total
0 
Issued, Vested but Deferred
0 
Issued, Total
0 
Issued, Weighted Average Grant Date Valueper RSU
$ 0.00 
Forfeited, Unvested
(44,928)
Forfeited, Total
(44,928)
Forfeited, Weighted Average Grant Date Valueper RSU
$ 48.43 
RSUs outstanding, Ending Balance, Unvested
748,450 
RSUs outstanding, Ending Balance, Vested but Deferred
18,649 
RSUs outstanding, Ending Balance, Total
767,099 
RSUs outstanding, Ending Balance, Weighted Average Grant Date Valueper RSU
$ 52.59 
Stock-Based Compensation (Assumptions for Black-Scholes Option Pricing Model) (Details) (Stock Options [Member], USD $)
6 Months Ended
Jun. 30, 2012
Years
Stock Options [Member]
 
Assumptions for Black-Scholes Option Pricing Model [Line Items]
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price
$ 23.81 
Expected life (years):
7.4 
Volatility factor:
35.10% 
Dividend yield:
0.35% 
Interest rate:
2.87% 
Stock-Based Compensation (Stock Option Activity) (Details) (USD $)
In Thousands, except Share data, unless otherwise specified
6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Intrinsic Value of Options Exercised [Abstract]
 
 
Intrinsic value of options exercised
$ 14,531 
$ 20,137 
Options Granted At Discount [Member]
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
 
 
Options outstanding, Beginning Balance, Underlying Shares
398,859 
 
Granted, Underlying Shares
0 
 
Canceled, Underlying Shares
(600)
 
Exercised, Underlying Shares
(76,009)
 
Options outstanding, Ending Balance, Underlying Shares
322,250 
 
Options, Weighted Average Exercise Price [Abstract]
 
 
Options outstanding, Beginning Balance, Weighted Average Exercise Price
$ 19.72 
 
Granted, Weighted Average Exercise Price
$ 0.00 
 
Canceled, Weighted Average Exercise Price
$ 14.70 
 
Exercised, Weighted Average Exercise Price
$ 20.07 
 
Options outstanding, Ending Balance, Weighted Average Exercise Price
$ 20.13 
 
Options, Exercisable, Number of Shares and Weighted Average Exercise Price [Abstract]
 
 
Options exercisable, Underlying Shares
322,250 
 
Options exercisable, Weighted Average Exercise Price
$ 20.13 
 
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
818,552 
 
Granted, Underlying Shares
0 
 
Canceled, Underlying Shares
(22,204)
 
Exercised, Underlying Shares
(267,835)
 
Options outstanding, Ending Balance, Underlying Shares
528,513 
 
Options, Weighted Average Exercise Price [Abstract]
 
 
Options outstanding, Beginning Balance, Weighted Average Exercise Price
$ 22.76 
 
Granted, Weighted Average Exercise Price
$ 0.00 
 
Canceled, Weighted Average Exercise Price
$ 39.90 
 
Exercised, Weighted Average Exercise Price
$ 16.56 
 
Options outstanding, Ending Balance, Weighted Average Exercise Price
$ 25.50 
 
Options, Exercisable, Number of Shares and Weighted Average Exercise Price [Abstract]
 
 
Options exercisable, Underlying Shares
472,890 
 
Options exercisable, Weighted Average Exercise Price
$ 21.74 
 
Stock-Based Compensation (Additional Information on Options) (Details) (USD $)
In Thousands, except Share data, unless otherwise specified
6 Months Ended
Jun. 30, 2012
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
 
Closing stock price used to calculate intrinsic value
$ 57.84 
Share Based Compensation Arrangement by Share Based Payment Award, Expiration Date
10 years 
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period
4 years 
Range One [Member]
 
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
 
Range of Exercise Prices
$8.57 - $14.70 
Range of Exercise Prices, Lower Limit
$ 8.57 
Range of Exercise Prices, Upper Limit
$ 14.70 
Options Outstanding, Number of Options
161,914 
Options Outstanding, Weighted Average Remaining Contractual Term (years)
0.83 
Options Outstanding, Weighted Average Exercise Price
$ 8.58 
Options Outstanding, Aggregate Intrinsic Value
$ 7,975 
Options Exercisable, Exercisable Shares
161,914 
Options Exercisable, Weighted Average Remaining Contractual Life (years)
0.83 
Options Exercisable, Weighted Average Exercise Price
$ 8.58 
Options Exercisable, Aggregate Intrinsic Value
7,975 
Range Two [Member]
 
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
 
Range of Exercise Prices
$20.09 - $45.80 
Range of Exercise Prices, Lower Limit
$ 20.09 
Range of Exercise Prices, Upper Limit
$ 45.80 
Options Outstanding, Number of Options
612,543 
Options Outstanding, Weighted Average Remaining Contractual Term (years)
2.67 
Options Outstanding, Weighted Average Exercise Price
$ 23.16 
Options Outstanding, Aggregate Intrinsic Value
21,241 
Options Exercisable, Exercisable Shares
612,543 
Options Exercisable, Weighted Average Remaining Contractual Life (years)
2.67 
Options Exercisable, Weighted Average Exercise Price
$ 23.16 
Options Exercisable, Aggregate Intrinsic Value
21,241 
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
76,306 
Options Outstanding, Weighted Average Remaining Contractual Term (years)
8.76 
Options Outstanding, Weighted Average Exercise Price
$ 57.45 
Options Outstanding, Aggregate Intrinsic Value
39 
Options Exercisable, Exercisable Shares
20,683 
Options Exercisable, Weighted Average Remaining Contractual Life (years)
7.87 
Options Exercisable, Weighted Average Exercise Price
$ 57.28 
Options Exercisable, Aggregate Intrinsic Value
12 
Range Four [Member]
 
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
 
Range of Exercise Prices
$8.57 - $59.35 
Range of Exercise Prices, Lower Limit
$ 8.57 
Range of Exercise Prices, Upper Limit
$ 59.35 
Options Outstanding, Number of Options
850,763 
Options Outstanding, Weighted Average Remaining Contractual Term (years)
   
Options Outstanding, Weighted Average Exercise Price
   
Options Outstanding, Aggregate Intrinsic Value
29,255 
Options Exercisable, Exercisable Shares
795,140 
Options Exercisable, Weighted Average Remaining Contractual Life (years)
   
Options Exercisable, Weighted Average Exercise Price
   
Options Exercisable, Aggregate Intrinsic Value
29,228 
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
$ 8.57 
Range of Exercise Prices, Upper Limit
$ 59.35 
Vested or Expected to Vest, Range of Exercise Prices
$8.57 - $59.35 
Vested or Expected to Vest, Number of Options
856,763 
Vested or Expected to Vest, Weighted Average Remaining Contractual Life (years)
2.87 
Vested or Expected to Vest, Weighted Average Exercise Price
$ 23.46 
Vested or Expected to Vest, Aggregate Intrinsic Value
$ 29,256 
Income Taxes (Income Tax Reconciliation and Unrecognized Tax Benefits) (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Jun. 30, 2012
Jun. 30, 2011
Dec. 31, 2011
Income Tax Expense (Benefit), Continuing Operations, Income Tax Reconciliation [Abstract]
 
 
 
 
 
Income before income taxes and equity in net income of unconsolidated entities
$ 42,131 
$ 38,616 
$ 73,189 
$ 71,199 
 
Equity in net income of unconsolidated entities
497 
595 
1,063 
969 
 
Net (income) loss attributable to the noncontrolling interest
4 
(2)
28 
96 
 
Total
42,632 
39,209 
74,280 
72,264 
 
Income tax expense
14,744 
12,724 
26,255 
23,242 
 
Effective income tax rate
34.60% 
32.50% 
35.30% 
32.20% 
 
Effective income tax rate reconciliation, change in percentage points compared with prior year period
2.1 
 
3.1 
 
 
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued [Abstract]
 
 
 
 
 
Current liabilities
5,305 
 
5,305 
 
5,329 
Non-current liabilities
6,627 
 
6,627 
 
6,200 
Total liability for unrecognized tax benefits
$ 11,932 
 
$ 11,932 
 
$ 11,529 
Income Taxes (Income Tax Contingency) (Details) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2012
Dec. 31, 2011
Income Tax Contingency [Line Items]
 
 
Gross unrecognized tax benefits
$ 12,393 
$ 12,189 
Gross unrecognized tax benefits which would affect income tax expense
12,110 
11,907 
Decrease in income tax expense upon recognition of gross unrecognized tax benefits
$ 9,992 
$ 9,827 
Share Repurchase Program (Details) (USD $)
1 Months Ended 3 Months Ended 6 Months Ended 12 Months Ended
Sep. 30, 2010
Jun. 30, 2012
Jun. 30, 2011
Jun. 30, 2012
Jun. 30, 2011
Dec. 31, 2011
Share Repurchase Program [Abstract]
 
 
 
 
 
 
Common stock, dividends, per share, declared
 
$ 0.10 
$ 0.05 
$ 0.20 
$ 0.10 
 
Share repurchase program, authorized amount
$ 100,000,000 
 
 
 
 
 
Increase to share repurchase rogram, authorized amount
 
 
 
 
 
200,000,000 
Shares repurchased, program life to date, shares
 
2,660,557 
 
2,660,557 
 
 
Shares repurchased, program life to date, value
 
$ 153,920,000 
 
$ 153,920,000