DBRS Morningstar maintains a leadership position in its home market of Canada, while growth in Europe, a central strategic initiative to emerge as an alternative to the large legacy rating firms, remained strong. Net income for 2019 included an after-tax gain of $0.33 per share from the sale of an equity method investment in the third quarter. View data. While these actions are contributing to an increase in operating expenses, we achieved record revenue and free cash flow in 2019. Full year new awards in 2019 totaled $3.7 billion, compared to $10.6 billion in 2018. Overall, long-term global flows (excluding money-market funds) nearly doubled in 2019 to $1 trillion. ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. PDF; Form 10K (HTML) Morningstar Inc. does not currently have any hardcopy reports on AnnualReports.com. Annual Reports . The ... Morningstar, Inc. 2018 nnual Report … Morningstar, Inc. (Nasdaq: MORN), a leading provider of independent investment research, today published its eighth annual Global Fund Flows Report examining worldwide 2019 mutual fund and exchange-traded product (ETP) fund flows. Fourth-quarter 2019 results also reflect the contribution of the Morningstar Funds Trust, which records revenue and sub-advisory fees on a gross basis. Morningstar is a top provider of independent investment research in the United States and abroad. We exclude revenue from acquired businesses from our organic revenue growth calculation for a period of 12 months after we complete the acquisition. Morningstar Investment Management revenue increased 12.1% as the gross revenue contribution from the Morningstar Funds Trust largely offset ongoing fee compression resulting from a shift in the asset mix to lower-fee strategies. Morningstar's Global Study of Fund Disclosures Finds India and... Morningstar, Inc. Declares Quarterly Dividend of 31.5 Cents Per... Organic revenue growth, which excludes DBRS Morningstar and currency effects, was 9.7%, Diluted net income per share declined 35.4% to, Diluted net income per share declined 17.2% to, DBRS Morningstar results would have been accretive by, Cash provided by operating activities increased 6.2% to, Revenue for Morningstar Data was up 6.3% to, Morningstar Direct licenses increased 5.8% to 15,903, and revenue grew 7.8% to, PitchBook licenses increased 59.7% to 36,695, and revenue grew 49.0% to, Assets under management and advisement for Workplace Solutions rose 24.3% to, Assets under management and advisement in Managed Portfolios increased 13.1% to. Production expense included fees paid to sub-advisors relating to the Morningstar Funds Trust and higher cloud-based computing costs. UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington D.C. 20549 FORM 10-K x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Read the annual report 2019 In the main portfolio, LD Discretionary, which accounts for more than 90 % of the assets, the members obtained a return of 8.5 %. Operating expenses related to DBRS Morningstar contributed 10.9% of the overall increase, including deal-related expenses and amortization and costs related to a pending regulatory settlement. Excluding the impact of the combined credit ratings operations, transaction-based revenue declined by 15.2% due to a decrease in advertising revenue on Morningstar.com. This resulted in a $0.2 million increase in fourth-quarter operating income. Our Interactive Analyst Center has you covered. To supplement Morningstar's condensed consolidated financial statements presented in accordance with U.S. Generally Accepted Accounting Principles (GAAP), Morningstar uses the following measures considered as non-GAAP by the Securities and Exchange Commission, including: consolidated revenue, excluding DBRS Morningstar and the license amendment. Workplace Solutions revenue grew by 4.7% year over year. The highlights below summarize key operating metrics as of and for the full year ended Dec. 31, 2019. Adjusted operating margin was 19.8% in 2019 versus 23.2% in the prior year, or 22.4%, excluding the license amendment. 2019 Annual Report. Free cash flow increased to $254.4 million for the full year 2019, compared with $238.7 million in the prior year. All other Morningstar product areas contributed to revenue growth by $67.8 million, or 6.9 percentage points. ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. Morningstar presents organic revenue because the Company believes this non-GAAP measure helps investors better compare period-over-period results. As such, revenue from the entire credit ratings operation will be excluded from the reporting of organic revenue through the second quarter of 2020. The effective tax rate for the full year 2019 was 23.1%, as compared with 20.7% for the full year 2018. Revenue for the first six months of 2019 includes revenue from Morningstar Credit Ratings while revenue for the third and fourth quarters of 2019 includes revenue from DBRS Morningstar, the newly combined credit ratings operations. Ltd. 8 Cross Street #16-01 Manulife Tower Singapore 048424. Compensation costs increased in support of PitchBook's growth, including the expansion of sales, marketing, and data collection resources, and other product development work across Morningstar. (Note: DBRS Morningstar includes the combined operations and financial performance of DBRS and Morningstar Credit Ratings since the close of the acquisition on July 2, 2019. (1) Revenue by type and key product area revenue includes the effect of foreign currency translations. Full-Year 2019 ResultsRevenue for 2019 was $1.2 billion, an increase of 15.6% compared with 2018. Excluding the non-recurring revenue benefit from the license amendment in the prior period results, license-based revenue grew 10.0% during the twelve months ended 2019. Primary drivers were higher compensation and benefits, production expenses, stock-based compensation, and sales commissions. ... 2019. In the fourth quarter of 2019, DBRS Morningstar communicated additional analytical model and methodology decisions and co-located the analyst teams under consolidated management, where possible. Reconciliation from cash provided by operating activities to free cash flow: ______________________________________________________________________. The effective tax rate for the fourth quarter of 2019 was 24.8% versus 11.5% in the prior-year period, which benefited from the finalization of outstanding tax reform matters. Reconciliation from consolidated operating income to operating income excluding DBRS Morningstar and the license amendment: Add: DBRS Morningstar operating loss (income) including deal-related expenses and amortization (2), Operating income excluding DBRS Morningstar, Operating income excluding DBRS Morningstar and the license amendment. Forward-looking Statements Some of the information we provide in this document is forward-looking and therefore could change over time to reflect changes in … These non-GAAP measures may not be comparable to similarly titled measures reported by other companies. License-based revenue grew 10.2% year over year, supported by ongoing demand for PitchBook in the United States, and positive global contributions from Morningstar Data and Morningstar Direct, with particularly strong growth in continental Europe, the United Kingdom, and Asia. The highlights below summarize key operating metrics as of and for the full year ended Dec. 31, 2019. We exclude revenue from acquired businesses from our organic revenue growth calculation for a period of 12 months after we complete the acquisition. Morningstar, Inc. Reports Fourth-Quarter, Full-Year 2019 Financial Results . For more information, visit www.morningstar.com/company. Reconciliation from cash provided by operating activities to free cash flow: ______________________________________________________________________. Revenue growth was balanced across geographies, with license-based revenue higher by 8.1%, asset-based revenue increasing 5.6%, and transaction-based revenue growing 127.8% on a reported basis. Collectively, these items had a favorable impact of $0.46 per diluted share in 2018. View Our Strategic Plan 2019 Annual Report . Excluding these items in both 2018 and 2019, net income per diluted share declined by 15.8% in 2019. Caution Concerning Forward-Looking Statements Fourth-Quarter 2019 ResultsFourth-quarter 2019 results include a $3.2 million increase in stock-based compensation, primarily driven by the continued achievement of incentive targets under the PitchBook management bonus plan. For us, these risks and uncertainties include, among others, liability for any losses that result from an actual or claimed breach of our fiduciary duties; failing to maintain and protect our brand, independence, and reputation; liability related to cybersecurity and the protection of confidential information, including personal information about individuals; failing to differentiate our products and continuously create innovative, proprietary research tools and financial advisor software; inadequacy of our operational risk management and business continuity programs in the event of a material disruptive event; failing to respond to technological change, keep pace with new technology developments, or adopt a successful technology strategy; compliance failures, regulatory action, or changes in laws applicable to our investment advisory or credit ratings operations; volatility in the financial sector, global markets, and global economy and its effect on our revenue from asset-based fees and credit ratings business; trends in the asset management industry, including the increasing adoption of investment strategies and portfolios relying on passively managed investment vehicles and increased industry consolidation; liability relating to the collection or distribution of information and data we collect and produce or errors included therein; an outage of our database, technology-based products and services, or network facilities or the movement of parts of our technology and data infrastructure to the public cloud and other outsourced providers; the failure of acquisitions and other investments to produce the results we anticipate; the failure to recruit, develop, and retain qualified employees; challenges faced by our non-U.S. operations, including the concentration of data and development work at our offshore facilities in China and India; and the failure to protect our intellectual property rights or claims of intellectual property infringement against us. 2019), and DBRS filed an update to Form NRSRO to add Morningstar as a credit rating affiliate. These statements are based on our current expectations about future events or future financial performance. Fourth-Quarter ResultsRevenue for the fourth quarter of 2019 was $332.4 million, an increase of 26.5% compared with the fourth quarter of 2018, or 9.7% higher on an organic basis. The largest contribution came from a substantial return on equity of 28.2 %. The tables at the end of this press release include a reconciliation of the non-GAAP financial measures used by the Company to comparable GAAP measures and an explanation of why the company uses them. The effective tax rate for the full year 2019 was 23.1%, as compared with 20.7% for the full year 2018. Morningstar provides data and research insights on a wide range of investment offerings, including managed investment products, publicly listed companies, private capital markets, debt securities, and real-time global market data. cash provided by or used for operating activities less capital expenditures (free cash flow). Morningstar encourages all interested parties-including securities analysts, current shareholders, potential shareholders, and others-to submit questions in writing. Excluding the impact of deal-related expenses and amortization, DBRS Morningstar contributed $11.9 million to operating income in the current quarter, while operating income for the remainder of Morningstar declined by $9.7 million. ", _________________________________________1 (Note: DBRS Morningstar includes the combined operations and financial performance of DBRS and Morningstar Credit Ratings since the close of the acquisition on July 2, 2019. Second-quarter 2019 results reflect the contribution of the new Morningstar Funds Trust, which records revenue and sub-advisory fees on a gross basis. Surveillance, research, and sales commissions 37.2 % to $ 73.5 billion as of and the... 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