CHICAGO, April 23, 2014 /PRNewswire/ -- Morningstar,
Inc. (NASDAQ: MORN), a leading provider of independent investment
research, today announced its first-quarter 2014 financial results.
The company reported consolidated revenue of $181.2 million, a 7.3% increase from $168.9 million in the first quarter of 2013.
Consolidated operating income was $38.5
million, down 5.0% from $40.6
million in the same period a year ago. Net income was
$26.4 million, or 58 cents per diluted share, in the first quarter
of 2014, compared with $29.6 million,
or 63 cents per diluted share, in the
first quarter of 2013.
Excluding acquisitions and a slight negative effect from foreign
currency translations, revenue rose 6.9% in the first quarter of
2014. Revenue excluding acquisitions and foreign currency
translations (organic revenue) is a non-GAAP measure; the
accompanying financial tables contain a reconciliation to
consolidated revenue.
Joe Mansueto, chairman and chief
executive officer of Morningstar, said, "Organic revenue growth
picked up slightly in the first quarter of 2014, and we continued
investing in our existing business as well as in a number of
promising initiatives. We hired about 200 new employees year over
year, including for product and technology roles in the United States as well as data analysts
based in India. While these
investments added to our operating expense for the quarter, we see
many opportunities to build shareholder value over the long term."
Financial Highlights
Revenue and Key Operating
Metrics
- Investment information revenue was $141.3 million, a 4.6% increase from $135.1 million in the first quarter of 2013.
Morningstar Data, Morningstar Direct, and Morningstar Advisor
Workstation were the main contributors to revenue growth. These
positive results were partially offset by a $2.3 million revenue decline for Principia. The
company has been migrating Principia clients to Morningstar Advisor
Workstation and other Morningstar products and expects to continue
supporting clients using Principia until the end of 2014.
- Investment management revenue was $39.9
million, an 18.1% increase from $33.8
million in the first quarter of 2013. Retirement Solutions
and Morningstar Managed Portfolios were the main contributors to
revenue growth, and revenue for Investment Advisory services was up
slightly versus the same period of 2013.
- Consolidated operating income was $38.5
million in the first quarter of 2014, a 5.0% decrease from
the same period in 2013. Operating expense rose $14.3 million, or 11.2%, in the first quarter of
2014, mainly because of higher salary and other
compensation-related expense from additional headcount.
- Operating margin was 21.3% in the first quarter of 2014, down
from 24.0% in the same period in 2013.
Cash Flow and Balance Sheet
- Morningstar generated negative free cash flow of $8.9 million in the first quarter of 2014,
reflecting positive cash provided by operating activities of
$11.9 million less $20.8 million of cash used for capital
expenditures. Free cash flow is a non-GAAP measure; the
accompanying financial tables contain a reconciliation to cash
provided by operating activities. Morningstar defines free cash
flow as cash provided by or used for operating activities less
capital expenditures. The company made bonus payments of
$39.8 million in the first quarter of
2014, compared with $36.6 million in
the first quarter of 2013. Morningstar typically pays annual
bonuses in the first quarter. As a result, first-quarter operating
cash flow tends to be lower compared with subsequent quarters.
- As of March 31, 2014, cash, cash
equivalents, and investments totaled $264.0
million, compared with $298.6
million as of Dec. 31, 2013.
Of the $700 million authorized under
its share repurchase program, Morningstar had purchased a total of
7.4 million shares for $471.5 million
as of March 31, 2014. In the first
quarter of 2014, Morningstar repurchased approximately 280,000
shares for $21.7 million.
- On April 1, 2014, the company
used approximately $28 million in
cash to acquire ByAllAccounts, Inc., a provider of innovative data
aggregation technology for financial applications, to enhance many
of its key solutions across core customer groups, particularly
offerings that support an advisor's workflow.
- The company expects to pay approximately $7.6 million for its regular quarterly dividend
on April 30, 2014.
Comparability of Year-Over-Year Results
Several items affected the comparability of first-quarter 2014
results versus the same period in 2013:
- Morningstar moved to a more centralized organizational
structure in 2013. As a result, approximately 180 net positions
shifted from the general and administrative and sales and marketing
categories to cost of revenue. For the first quarter of 2014
compared with the same period in 2013, changes related to the
company's more centralized organizational structure added
approximately $7 million of
compensation expense to cost of revenue. At the same time,
these changes reduced compensation expense in the sales and
marketing and general and administrative expense categories by
approximately $4 million and
$3 million, respectively.
- As a result of a change in accounting estimate involving
revenue recognition for certain investment management contracts
with minimum fee features, Morningstar recognized an additional
$1.7 million of investment management
revenue in the first quarter of 2014 that will not recur in future
quarters.
- During the first quarter of 2014, commission expense rose
$2.9 million compared with the
prior-year period, mainly because of a change to the company's
sales commission structure that requires a different accounting
treatment. Morningstar now expenses sales commissions as incurred
instead of amortizing them over the term of the underlying
contracts. The company continues to amortize the prepaid commission
balance from the previous commission structure and expensed an
additional $2.7 million of commission
cost in the quarter. Morningstar expects to incur additional
commission expense for the next several quarters because of this
change.
Operating Highlights
- Licenses for Morningstar Direct rose 15.5% to 8,858.
- Assets under management and advisement for Retirement Solutions
were approximately $68.0 billion as
of March 31, 2014, versus
$51.9 billion as of March 31, 2013. Assets under management and
advisement for Morningstar Managed Portfolios were approximately
$7.8 billion as of March 31, 2014, compared with $5.3 billion as of March
31, 2013. Both product lines benefited from strong market
performance and asset inflows.
- Companies that offer variable annuities have continued to face
difficult market conditions, which has prompted some of
Morningstar's clients to begin managing their fund-of-funds
portfolios in-house instead of using outside subadvisors. Because
of this trend, Investment Advisory assets under advisement as of
March 31, 2014 were $12.0 billion lower versus the same date in
2013.
Investor Communication
Morningstar encourages all
interested parties—including securities analysts, current
shareholders, potential shareholders, and others—to submit
questions in writing. Investors and others may send questions about
Morningstar's business to investors@morningstar.com or write to the
company at:
Morningstar, Inc.
Investor Relations
22 W. Washington Street
Chicago, IL 60602
Morningstar will make written responses to selected inquiries
available to all investors at the same time in Form 8-Ks furnished
to the Securities and Exchange Commission, generally on the first
Friday of every month.
Annual Shareholders' Meeting
Investors are invited to
attend Morningstar's annual meeting at 9
a.m. Central Time on Tuesday, May 13,
2014, at its corporate headquarters at 22 W. Washington
Street in Chicago. If you would
like to attend, please register at
http://corporate.morningstar.com/US/asp/meetingregistration.aspx.
About Morningstar, Inc.
Morningstar, Inc. is a leading
provider of independent investment research in North America, Europe, Australia, and Asia. The company offers an extensive line of
products and services for individual investors, financial advisors,
asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 456,000 investment
offerings, including stocks, mutual funds, and similar vehicles,
along with real-time global market data on more than 12 million
equities, indexes, futures, options, commodities, and precious
metals, in addition to foreign exchange and Treasury markets.
Morningstar also offers investment management services through its
registered investment advisor subsidiaries and had approximately
$164 billion in assets under
advisement and management as of March 31,
2014. The company has operations in 27 countries.
Caution Concerning Forward-Looking Statements
This
press release contains forward-looking statements as that term is
used in the Private Securities Litigation Reform Act of 1995. These
statements are based on our current expectations about future
events or future financial performance. Forward-looking statements
by their nature address matters that are, to different degrees,
uncertain, and often contain words such as "may," "could,"
"expect," "intend," "plan," "seek," "anticipate," "believe,"
"estimate," "predict," "potential," or "continue." These statements
involve known and unknown risks and uncertainties that may cause
the events we discuss not to occur or to differ significantly from
what we expect. 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 differentiate
our products and continuously create innovative, proprietary
research tools; failing to respond to technological change, keep
pace with new technology developments, or adopt a successful
technology strategy; a prolonged outage of our database and network
facilities; any failures or disruptions in our electronic delivery
systems and the Internet; liability and/or damage to our reputation
as a result of some of our pending litigation; liability related to
the storage of personal information about our users; general
industry conditions and competition, including current global
financial uncertainty, trends in the mutual fund industry, and
continued growth in passively managed investment vehicles; the
impact of market volatility on revenue from asset-based fees;
failing to maintain and protect our brand, independence, and
reputation; changes in laws applicable to our investment advisory
or credit rating operations, compliance failures, or regulatory
action; and challenges faced by our non-U.S. operations, including
the concentration of development work at our offshore facilities in
China and India. A more complete description of these
risks and uncertainties can be found in our filings with the
Securities and Exchange Commission, including our Annual Report on
Form 10-K for the year ended December 31,
2013. If any of these risks and uncertainties materialize,
our actual future results may vary significantly from what we
expected. We do not undertake to update our forward-looking
statements as a result of new information or future events.
Non-GAAP Financial Measures
To supplement
Morningstar's 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 U.S. Securities and Exchange Commission: free cash
flow, consolidated revenue excluding acquisitions and foreign
currency translations (organic revenue), and international revenue
excluding acquisitions and foreign currency translations. These
non-GAAP measures may not be comparable to similarly titled
measures reported by other companies.
Morningstar presents free cash flow solely as supplemental
disclosure to help investors better understand how much cash is
available after Morningstar spends money to operate its business.
Morningstar uses free cash flow to evaluate its business. Free cash
flow should not be considered an alternative to any measure
required to be reported under GAAP (such as cash provided by (used
for) operating, investing, and financing activities). For more
information on free cash flow, please see the reconciliation from
cash provided by operating activities to free cash flow included in
the accompanying financial tables. Morningstar presents
consolidated revenue excluding acquisitions and foreign currency
translations (organic revenue) and international revenue excluding
acquisitions and foreign currency translations because the company
believes these non-GAAP measures help investors better compare
period-to-period results. For more information, please see the
reconciliation provided in the accompanying financial tables.
All dollar and percentage comparisons, which are often accompanied
by words such as "increase," "decrease," "grew," "declined, " or
"was similar" refer to a comparison with the same period in the
previous year unless otherwise stated.
©2014 Morningstar, Inc. All Rights Reserved.
MORN-E
Contacts:
Media: Carling Spelhaug, +1 312-696-6150 or
carling.spelhaug@morningstar.com
Margaret Kirch Cohen, +1
312-696-6383 or margaret.cohen@morningstar.com
Investors may submit questions to investors@morningstar.com
Morningstar, Inc.
and Subsidiaries
|
|
|
|
|
Unaudited
Condensed Consolidated Statements of Income
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
March 31
|
(in thousands,
except per share amounts)
|
|
2014
|
|
2013
|
|
change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
181,165
|
|
$
168,856
|
|
7.3%
|
Operating
expense(1)(2):
|
|
|
|
|
|
|
|
Cost of
revenue
|
|
75,714
|
|
61,650
|
|
22.8%
|
|
Sales and
marketing
|
|
28,428
|
|
27,980
|
|
1.6%
|
|
General and
administrative
|
|
26,104
|
|
27,327
|
|
(4.5%)
|
|
Depreciation and
amortization
|
|
12,387
|
|
11,339
|
|
9.2%
|
|
Total
operating expense
|
|
142,633
|
|
128,296
|
|
11.2%
|
Operating
income
|
|
38,532
|
|
40,560
|
|
(5.0%)
|
Operating
margin
|
|
21.3%
|
|
24.0%
|
|
(2.7)pp
|
|
|
|
|
|
|
|
|
Non-operating income
(expense):
|
|
|
|
|
|
|
|
Interest income,
net
|
|
585
|
|
741
|
|
(21.1%)
|
|
Other income,
net
|
|
280
|
|
204
|
|
37.3%
|
|
Non-operating income,
net
|
|
865
|
|
945
|
|
(8.5%)
|
|
|
|
|
|
|
|
|
Income before income
taxes and equity in net income
of unconsolidated
entities
|
|
|
|
|
|
|
|
39,397
|
|
41,505
|
|
(5.1%)
|
Equity in net income
of unconsolidated entities
|
|
599
|
|
497
|
|
20.5%
|
Income tax
expense
|
|
13,650
|
|
12,427
|
|
9.8%
|
Consolidated net
income
|
|
26,346
|
|
29,575
|
|
(10.9%)
|
Net loss attributable
to noncontrolling interests
|
|
30
|
|
43
|
|
(30.2%)
|
Net income
attributable to Morningstar, Inc.
|
|
$
26,376
|
|
$
29,618
|
|
(10.9%)
|
|
|
|
|
|
|
|
|
Net income per share
attributable to Morningstar, Inc.:
|
|
|
|
|
|
|
|
Basic
|
|
$
0.59
|
|
$
0.64
|
|
(7.8%)
|
|
Diluted
|
|
$
0.58
|
|
$
0.63
|
|
(7.9%)
|
Weighted average
shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
|
44,777
|
|
46,406
|
|
(3.5%)
|
|
Diluted
|
|
45,093
|
|
46,814
|
|
(3.7%)
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
March 31
|
|
|
|
2014
|
|
2013
|
|
change
|
(1) Includes
stock-based compensation expense of:
|
|
|
|
|
|
|
|
Cost of
revenue
|
|
$
1,762
|
|
$
1,701
|
|
3.6%
|
|
Sales and
marketing
|
|
497
|
|
512
|
|
(2.9%)
|
|
General and
administrative
|
|
1,680
|
|
1,570
|
|
7.0%
|
|
Total
stock-based compensation expense
|
|
$
3,939
|
|
$
3,783
|
|
4.1%
|
|
|
|
|
|
|
|
|
(2) Morningstar moved to a more centralized
organizational structure in 2013. As a result, approximately 180
net positions shifted from the general and administrative and sales
and marketing categories to cost of revenue. For the first quarter
of 2014 compared with the same period in 2013, changes related to
the company's more centralized organizational structure added
approximately $7 million of compensation expense to cost of
revenue. At the same time, these changes reduced compensation
expense in the sales and marketing and general and administrative
expense categories by approximately $4 million and $3 million,
respectively.
|
|
NMF — Not
meaningful, pp — percentage points
|
Morningstar, Inc.
and Subsidiaries
|
|
Operating Expense
as a Percentage of Revenue (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
March 31
|
|
|
|
2014
|
|
2013
|
|
change
|
|
|
|
|
|
|
|
|
Revenue
|
|
100.0%
|
|
100.0%
|
|
-
|
Operating
expense1:
|
|
|
|
|
|
|
|
Cost of
revenue
|
|
41.8%
|
|
36.5%
|
|
5.3pp
|
|
Sales and
marketing
|
|
15.7%
|
|
16.6%
|
|
(0.9)pp
|
|
General and
administrative
|
|
14.4%
|
|
16.2%
|
|
(1.8)pp
|
|
Depreciation and
amortization
|
|
6.8%
|
|
6.7%
|
|
0.1pp
|
|
Total
operating expense2
|
|
78.7%
|
|
76.0%
|
|
2.7pp
|
Operating
margin
|
|
21.3%
|
|
24.0%
|
|
(2.7)pp
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
March 31
|
|
|
|
2014
|
|
2013
|
|
change
|
(1) Includes
stock-based compensation expense of:
|
|
|
|
|
|
Cost of
revenue
|
|
1.0%
|
|
1.0%
|
|
-
|
|
Sales and
marketing
|
|
0.3%
|
|
0.3%
|
|
-
|
|
General and
administrative
|
|
0.9%
|
|
0.9%
|
|
-
|
|
Total
stock-based compensation expense2
|
|
2.2%
|
|
2.2%
|
|
-
|
|
|
|
|
|
|
|
|
(2) Sum of
percentages may not equal total because of rounding.
|
|
|
|
|
Morningstar, Inc.
and Subsidiaries
|
|
|
|
|
Unaudited
Condensed Consolidated Statements of Cash Flows
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
March 31
|
($000)
|
|
2014
|
|
2013
|
|
|
|
|
|
|
Operating activities
|
|
|
|
|
Consolidated net
income
|
|
$
26,346
|
|
$
29,575
|
Adjustments to
reconcile consolidated net income to net cash
|
|
|
|
|
flows from operating
activities:
|
|
|
|
|
|
Depreciation and
amortization
|
|
12,387
|
|
11,339
|
|
Stock-based
compensation expense
|
|
3,939
|
|
3,783
|
|
Other, net
|
|
(4,048)
|
|
(5,475)
|
Changes in operating
assets and liabilities, net of
|
|
|
|
|
effects of
acquisitions and dispositions
|
|
(26,740)
|
|
(12,549)
|
|
Cash provided by operating activities
|
|
11,884
|
|
26,673
|
Investing
activities
|
|
|
|
|
Purchases of
investments
|
|
(1,697)
|
|
(3,694)
|
Proceeds from
maturities and sales of investments
|
|
73,712
|
|
61,152
|
Capital
expenditures
|
|
(20,793)
|
|
(9,118)
|
Other, net
|
|
260
|
|
892
|
|
Cash
provided by investing activities
|
|
51,482
|
|
49,232
|
Financing
activities
|
|
|
|
|
Proceeds from
stock-option exercises
|
|
1,278
|
|
2,088
|
Employee taxes
withheld for restricted stock units
|
|
(7)
|
|
(82)
|
Excess tax benefits
from stock-option exercises
and vesting of restricted stock units
|
|
|
|
|
|
573
|
|
1,587
|
Common shares
repurchased
|
|
(21,697)
|
|
(15,240)
|
Dividends
paid
|
|
(7,644)
|
|
-
|
Other, net
|
|
(5)
|
|
(3)
|
|
Cash used for
financing activities
|
|
(27,502)
|
|
(11,650)
|
Effect of exchange
rate changes on cash and cash equivalents
|
609
|
|
(3,252)
|
Net increase in cash
and cash equivalents
|
|
36,473
|
|
61,003
|
Cash and cash
equivalents—Beginning of period
|
|
168,160
|
|
163,889
|
Cash and cash
equivalents—End of period
|
|
$ 204,633
|
|
$ 224,892
|
Morningstar, Inc.
and Subsidiaries
|
|
|
|
|
Unaudited
Condensed Consolidated Balance Sheets
|
|
|
|
|
|
|
|
|
|
March
31
|
|
December
31
|
($000)
|
|
2014
|
|
2013
|
|
|
|
|
|
|
Assets
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
204,633
|
|
$
168,160
|
|
Investments
|
|
59,340
|
|
130,407
|
|
Accounts receivable,
net
|
|
131,464
|
|
114,131
|
|
Deferred tax asset,
net
|
|
4,381
|
|
3,892
|
|
Income tax
receivable, net
|
|
-
|
|
3,942
|
|
Other
|
|
25,124
|
|
26,361
|
|
Total current assets
|
|
424,942
|
|
446,893
|
|
|
|
|
|
|
Property, equipment,
and capitalized software, net
|
|
107,438
|
|
104,986
|
Investments in
unconsolidated entities
|
|
39,176
|
|
38,714
|
Goodwill
|
|
327,936
|
|
326,450
|
Intangible assets,
net
|
|
98,947
|
|
103,909
|
Other
assets
|
|
8,978
|
|
9,716
|
|
Total
assets
|
|
$
1,007,417
|
|
$
1,030,668
|
|
|
|
|
|
|
Liabilities and
equity
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Accounts payable and
accrued liabilities
|
|
$
39,790
|
|
$
42,131
|
|
Accrued
compensation
|
|
41,718
|
|
71,403
|
|
Deferred
revenue
|
|
159,591
|
|
149,225
|
|
Income taxes
payable
|
|
2,267
|
|
-
|
|
Other
|
|
4,491
|
|
6,786
|
|
Total current liabilities
|
|
247,857
|
|
269,545
|
|
|
|
|
|
|
Accrued
compensation
|
|
7,495
|
|
8,193
|
Deferred tax
liability, net
|
|
21,743
|
|
23,755
|
Other long-term
liabilities
|
|
33,605
|
|
37,885
|
|
Total
liabilities
|
|
310,700
|
|
339,378
|
|
Total
equity
|
|
696,717
|
|
691,290
|
|
Total liabilities and
equity
|
|
$
1,007,417
|
|
$
1,030,668
|
Morningstar, Inc.
and Subsidiaries
|
|
|
|
|
|
|
Supplemental Data
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of March
31
|
|
|
|
|
2014
|
|
2013
|
|
%
change
|
|
|
|
|
|
|
|
|
Our
business
|
|
|
|
|
|
|
Morningstar.com
Premium Membership subscriptions (U.S.)
|
|
123,777
|
|
124,138
|
|
(0.3%)
|
Registered users for
Morningstar.com (U.S.)
|
|
7,945,324
|
|
7,607,716
|
|
4.4%
|
U.S. Advisor
Workstation and Morningstar Office
licenses
|
|
167,207
|
|
163,141
|
|
2.5%
|
Principia
subscriptions
|
|
12,006
|
|
25,652
|
|
(53.2%)
|
Morningstar Direct
licenses
|
|
8,858
|
|
7,6711
|
|
15.5%
|
Assets under
advisement and management (approximate)
|
|
|
|
|
|
|
|
Investment Advisory
services
|
|
$84.7 bil
|
|
$96.7 bil
|
|
(12.4%)
|
|
Retirement
Solutions
|
|
$68.0 bil
|
|
$51.9 bil
|
|
31.0%
|
|
Morningstar Managed
Portfolios
|
|
$7.8 bil
|
|
$5.3 bil
|
|
47.2%
|
|
Ibbotson
Australia
|
|
$3.2 bil
|
|
$3.2 bil
|
|
0.0%
|
|
|
|
|
|
|
|
|
Our employees
(approximate)
|
|
|
|
|
|
|
Worldwide
headcount
|
|
3,645
|
|
3,445
|
|
5.8%
|
Number of worldwide
equity and credit analysts
|
|
170
|
|
150
|
|
13.3%
|
Number of worldwide
fund analysts
|
|
110
|
|
105
|
|
4.8%
|
|
|
|
|
|
|
|
|
(1) Revised to
reflect a minor calculation change.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
March 31
|
|
|
|
2014
|
|
2013
|
|
%
change
|
Average assets under
management and advisement
|
|
$161.5 bil
|
|
$153.3 bil
|
|
5.3%
|
Number of new
commercial mortgage-based securities (CMBS) new-issue ratings
completed
|
|
9
|
|
10
|
|
(10.0%)
|
Rated balance for
CMBS new-issue ratings
|
|
$5.6 bil
|
|
$5.4 bil
|
|
3.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
March 31
|
($000)
|
|
|
|
2014
|
|
2013
|
Revenue
|
|
|
|
|
|
|
|
Investment
information
|
|
|
|
$
141,270
|
|
$
135,085
|
|
Investment
management
|
|
|
|
39,895
|
|
33,771
|
|
Consolidated
revenue
|
|
|
|
$
181,165
|
|
$
168,856
|
|
|
|
|
|
|
|
|
|
Revenue—U.S.
|
|
|
|
$
129,952
|
|
$
121,413
|
|
Revenue—International
|
|
|
|
$
51,213
|
|
$
47,443
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
March 31
|
($000)
|
|
|
|
2014
|
|
2013
|
Effective tax
rate
|
|
|
|
|
|
|
Income before income
taxes and equity in net income of unconsolidated entities
|
|
|
|
|
|
|
|
|
|
$
39,397
|
|
$
41,505
|
Equity in net income
of unconsolidated entities
|
|
|
|
599
|
|
497
|
Net loss attributable
to noncontrolling interests
|
|
|
|
30
|
|
43
|
|
Total
|
|
|
|
$
40,026
|
|
$
42,045
|
Income tax
expense
|
|
|
|
$
13,650
|
|
$
12,427
|
Effective tax
rate
|
|
|
|
34.1%
|
|
29.6%
|
Morningstar, Inc.
and Subsidiaries
|
Reconciliations of
Non-GAAP Measures with the Nearest Comparable GAAP
Measures
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation from
consolidated revenue to revenue excluding divestitures,
acquisitions, and foreign currency translations (organic
revenue):
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
March 31
|
($000)
|
|
2014
|
|
2013
|
|
%
change
|
|
|
|
|
|
|
|
|
Consolidated
revenue
|
|
$ 181,165
|
|
$ 168,856
|
|
7.3%
|
Less:
divestitures
|
|
-
|
|
-
|
|
NMF
|
Less:
acquisitions
|
|
(1,477)
|
|
-
|
|
NMF
|
Unfavorable effect of
foreign currency translations
|
|
806
|
|
-
|
|
NMF
|
Revenue excluding
acquisitions, divestitures, and foreign currency translations
|
|
|
|
|
|
|
|
$ 180,494
|
|
$ 168,856
|
|
6.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation from
international revenue to international revenue excluding
divestitures, acquisitions, and foreign currency translations
(international organic revenue):
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
March 31
|
($000)
|
|
2014
|
|
2013
|
|
%
change
|
|
|
|
|
|
|
|
|
International
revenue
|
|
$
51,213
|
|
$
47,443
|
|
7.9%
|
Less:
divestitures
|
|
-
|
|
-
|
|
NMF
|
Less:
acquisitions
|
|
(1,477)
|
|
-
|
|
NMF
|
Unfavorable effect of
foreign currency translations
|
|
806
|
|
-
|
|
NMF
|
International revenue
excluding acquisitions, divestitures, and foreign currency translations
|
|
|
|
|
|
$
50,542
|
|
$
47,443
|
|
6.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation from
cash provided by operating activities to free cash flow (a non-GAAP
measure):
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
March 31
|
($000)
|
|
2014
|
|
2013
|
|
%
change
|
|
|
|
|
|
|
|
|
Cash provided by
operating activities
|
|
$
11,884
|
|
$
26,673
|
|
(55.4%)
|
Less: Capital
expenditures
|
|
(20,793)
|
|
(9,118)
|
|
128.0%
|
Free cash
flow
|
|
$
(8,909)
|
|
$
17,555
|
|
(150.7%)
|
SOURCE Morningstar, Inc.