## 2010 Overview 

## Accomplishments 

We made solid progress building a base for our credit research business and now offer credit ratings and reports on more than 720 corporate credit issuers. We acquired Realpoint, a Nationally Recognized Statistical Rating Organization that specializes in commercial mortgage-backed securities. 3 

We expanded our analyst research and investment consulting work on exchange-traded funds, closed-end funds, alternative investments, 529 plans, and target-date funds— all areas that have seen strong investor interest. 3 

We continued to expand our equity research business, doubling our client base in just one year. 3 

We continued building out our global operations, establishing a presence in Brazil, Chile, Mexico, and Luxembourg. We also expanded our international investment research and consulting business by acquiring Aegis, Seeds Group, and OBSR. 3 

Morningstar Direct had a record year for license growth with more than 1,200 new licenses added globally. 3 

Both renewal rates for contract-based products and services and retention rates for subscription products rose substantially compared with 2009, reflecting improved business conditions and healthier sales trends across most of our product lines. 3 

Morningstar’s board of directors approved a 5 cent per share initial quarterly dividend and a $100 million share repurchase program, allowing us to return a portion of our cash balance to shareholders. 3 

## Challenges 

Operating expense rose faster than revenue in 2010, leading to a 4.2 percentage point decline in our operating margin, in part because we restored some incentive compensation and benefits after reducing them in 2009. 3 

We have more work to do in fully integrating some of our acquisitions and rebranding many of these businesses under the Morningstar umbrella. 3 

While advertising sales on Morningstar.com rebounded strongly, U.S. Premium Membership subscriptions were down 8% year over year as individual investors have been slow to return to the stock market and remain cautious about discretionary spending. 3 

