0001289419false00012894192024-11-122024-11-12

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________________
FORM 8-K
______________________________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 12, 2024


MORNINGSTAR, INC.
(Exact name of registrant as specified in its charter)

Illinois
(State or other jurisdiction
of incorporation)
000-51280
(Commission
File Number)

36-3297908
(I.R.S. Employer
Identification No.)
22 West Washington Street
Chicago, Illinois
(Address of principal executive offices)

60602
(Zip Code)
(312) 696-6000
(Registrant’s telephone number, including area code)

N/A
(Former name or former address, if changed since last report)
__________________________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

    o    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

    o    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

    o    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

    o    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class
Trading Symbol
Name of Each Exchange on Which Registered
Common stock, no par valueMORNThe Nasdaq Stock Market LLC







Item 7.01.    Regulation FD Disclosure

In accordance with Morningstar, Inc.’s (the “Company”) policy regarding public disclosure of corporate information, Investor questions primarily received by the Company through September 30, 2024, and Company responses (the “Investor Q&A”) are attached to this Current Report on Form 8-K (this “Report”) as Exhibit 99.1 and incorporated herein by reference. The Investor Q&A shall be deemed furnished, not filed, for purposes of this Report.

Caution Concerning Forward-Looking Statements

This Report, including the document incorporated by reference herein, 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 "consider,” “estimate,” “forecast,” “future,” “goal,” “designed to,” “maintain,” “may,” “objective,” “ongoing,” “could,” “expect,” “intend,” “plan,” “possible,” “potential,” “anticipate,” “believe,” “predict,” “continue,” “strategy,” “strive,” “will,” “would,” "determine," "evaluate," or the negative thereof, and similar expressions. 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:

• failing to maintain and protect our brand, independence, and reputation;
• failure to prevent and/or mitigate cybersecurity events and the failure to protect confidential information, including personal information about individuals;
• compliance failures, regulatory action, or changes in laws applicable to our credit ratings operations, investment advisory, environmental, social, and governance (ESG), and index businesses;
• failing to innovate our product and service offerings or anticipate our clients’ changing needs;
• the impact of artificial intelligence (AI) and related new technologies on our business, legal, and regulatory exposure profile and reputation;
• failure to detect errors in our products or failure of our products to perform properly due to defects, malfunctions or similar problems;
• failing to recruit, develop, and retain qualified employees;
• prolonged volatility or downturns affecting the financial sector, global financial markets, and the global economy and its effect on our revenue from asset-based fees and credit ratings business;
• failing to scale our operations and increase productivity in order to implement our business plans and strategies;
• liability for any losses that result from errors in our automated advisory tools or errors in the use of the information and data we collect;
• inadequacy of our operational risk management, business continuity programs and insurance coverage in the event of a material disruptive event;
• failing to close, or achieve the anticipated economic or other benefits of, a strategic transaction on a timely basis or at all;
• failing to efficiently integrate and leverage acquisitions and other investments, which may not realize the expected business or financial benefits, to produce the results we anticipate;
• failing to maintain growth across our businesses in today's fragmented geopolitical, regulatory and cultural world;
• liability relating to the information and data we collect, store, use, create, and distribute or the reports that we publish or are produced by our software products;
2


• the potential adverse effect of our indebtedness on our cash flows and financial and operational flexibility;
• challenges in accounting for tax complexities in the global jurisdictions we operate in could materially affect our tax obligations and tax rates; and
• failing to protect our intellectual property rights or claims of intellectual property infringement against us.

A more complete description of these risks and uncertainties can be found in our filings with the Securities and Exchange Commission (SEC), including our most recent Reports on Form 10-K and 10-Q. If any of these risks and uncertainties materialize, our actual future results and other future events may vary significantly from what we expect. We do not undertake to update our forward-looking statements as a result of new information, future events, or otherwise, except as may be required by law. You are advised to review any further disclosures we make on related subjects, and about new or additional risks, uncertainties, and assumptions in our filings with the SEC on Forms 10-K, 10-Q, and 8-K.


Item 9.01. Financial Statements and Exhibits.
    (d)    Exhibits:
Exhibit No.Description
104The cover page from this Current Report on Form 8-K formatted in Inline XBRL (included as Exhibit 101).
_____________________________________________________________________________________


SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
MORNINGSTAR, INC.
Date: November 12, 2024By:/s/ Jason Dubinsky
Name: Jason Dubinsky
Title: Chief Financial Officer
3

Investor Questions and Answers: November 12, 2024 We encourage current shareholders, potential shareholders, and other interested parties to send questions to us in writing and we make written responses available on a periodic basis. The following answers respond to selected questions primarily received through September 30, 2024. We retain the discretion to combine answers for duplicate or similar questions into one comprehensive response. If you would like to submit a question, please send an e-mail to investors@morningstar.com or write us at the following address: Morningstar, Inc. Investor Relations 22 W. Washington St. Chicago, IL 60602 M&A 1. Can you provide any insight into the financial impact of the sale of Morningstar Commodity Data to ZEMA Global Data Corporation? How much revenue was that business generating? How large was this in sales and profit contribution for the sold business? What multiple did you get paid for it? On September 30, 2024, we sold our Commodity and Energy Data business for a purchase price of $52.4 million, recording a $45.3 million gain on the sale in Q3 2024. The business was included in the Morningstar Data and Analytics segment but was not included in any of the key product areas that we separately report revenue for (including Morningstar Data). Note that the Commodity and Energy Data business was not material relative to the broader Data and Analytics segment. We will be excluding associated revenue from organic revenue growth calculations starting in Q4 2024 and expect that the divestiture will be slightly dilutive to Data and Analytics margins. While we do not share transaction multiples, we believe we achieved a positive result and unlocked value for a non-core business. PitchBook 2. Do you see PitchBook as a competitor to Hamilton Lane's Cobalt? Could you elaborate how the two platforms work together if it's complementary? Do you have any market share data you could share? We view Hamilton Lane’s Cobalt product offering as complementary to PitchBook given their strengths in monitoring private market activity and commitment to providing transparency to asset owners. We do not have detailed market share data; however, we believe that PitchBook is the market leader in private market data based on the breadth and depth of our coverage. Morningstar Sustainalytics 3. How do you ensure the independence of your ESG ratings and specifically maintain the independence of analytical staff from commercial staff? Morningstar has a long history of providing data, research, and ratings and is committed to doing so with integrity, independence, and transparency. In keeping with this commitment, Morningstar Sustainalytics has developed a conflicts of interest framework, available at Sustainalytics.com/governance-documents, which is designed to manage actual or potential conflicts of interest arising from its ESG activities. More specifically, Morningstar Sustainalytics maintains a governance structure with clear reporting lines, roles, and responsibilities and separation of analytical and commercial activities. Morningstar Sustainalytics analytical and commercial personnel are either located in physically separate office spaces or physically separated in the office and use IT systems and data that are segregated and subject to different and corresponding access control protocols. Morningstar Sustainalytics personnel are required to adhere to prohibitions and restrictions set forth in applicable conflicts of interest related policies.

 
Note: Documents referenced in links to this response are not incorporated by reference herein. Corporate Sustainability 4. Given the substantial energy required by data centers and AI, how do you plan to stay on target with your Net Zero goals? You are correct that a portion of Morningstar’s measured scope 2 emissions in 2023 came from the electricity usage of our data centers. (Scope 2 emissions arise from our purchase of electricity, heat, and steam.) We are in the process of reducing our data center footprint which is expected to allow us to take advantage of meaningful energy efficiencies in the public cloud. We anticipate that this transition can help reduce our on-site electrical demand and scope 2 emissions by enabling economies of scale and greatly reducing inefficient hardware. As we transition from directly managed data centers to public cloud providers, associated emissions will surface in our scope 3 measurement (which reflect indirect emissions that occur in our value chain). As a result, we expect to increasingly depend on the substantial emissions reduction commitments of key suppliers to mitigate our footprint in this domain. When transitioning Morningstar’s data centers to cloud-based platforms, Morningstar has prioritized working with providers committed to net zero and renewable energy usage. In the future, we seek to track, measure, and manage our public-cloud-associated scope 3 emissions, engaging with our key suppliers on sustainability, while our teams pursue efficiencies in the public cloud. We understand that as we scale our AI capabilities, we will need to place an even greater emphasis on data center energy efficiency and our selection of public cloud partners. As we review and invest in our infrastructure, we are looking at technology solutions and partners that are more energy efficient as a way of bolstering our business’ long-term sustainability from the perspective of both our net zero goals and operational cost control. Board of Directors 5. The International Corporate Governance Network Independence criteria for corporate boards lists conditions which might impair a director’s independence: a) is or has been employed in an executive capacity by the company or a subsidiary and there has not been an appropriate period between ceasing such employment and serving on the board; b) is or has within an appropriate period been a significant shareholder, partner, director or senior employee of a provider of material professional or contractual services to the company or any of its subsidiaries c) is a significant shareholder of the company, or an officer of, or otherwise associated with, a significant shareholder of the company; d) has been a director of the company for such a period that his or her independence may have become compromised. What plans if any does Morningstar have to address this in order to achieve greater independence that might provide a fresh perspective for its various business lines? Morningstar’s Board of Directors believes that independent directors should account for a substantial majority of the Board, but also that it is useful and appropriate to have key members of management, such as our Chairman and our CEO, as directors. Our standing Board committees, the Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee (“NCGC”), are led by and composed entirely of independent directors. Our independent directors regularly meet in executive session, with no management directors or other members of management present. The Chair of the NCGC works closely with the Chairman to set the agenda for each Board meeting and provides feedback on the areas of focus and form of materials presented to the Board. The Chair of the NCGC also serves as a liaison between the Chairman and the independent directors. We monitor and assess the independence of each of our directors and director nominees under Nasdaq listing rules, which contain very similar independence criteria as the International Corporate Governance Network, as well as applicable regulations and company policies. In addition, in order for a director to be considered independent, our Board makes an affirmative determination annually as to whether each director has a direct or indirect relationship with Morningstar that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. We also evaluate our Board members’ skills, qualifications, and experiences annually and evaluate ongoing board refreshment to support the future success of our business and represent shareholder interests.

 
v3.24.3
Cover
Nov. 12, 2024
Entity Information [Line Items]  
Document Period End Date Nov. 12, 2024
Entity Registrant Name MORNINGSTAR, INC.
Entity Incorporation, State or Country Code IL
Entity File Number 000-51280
Entity Tax Identification Number 36-3297908
Entity Address, State or Province IL
Entity Address, Address Line One 22 West Washington Street
Entity Address, City or Town Chicago
Entity Address, Postal Zip Code 60602
Local Phone Number 696-6000
City Area Code 312
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Entity Emerging Growth Company false
Title of 12(b) Security Common stock, no par value
Trading Symbol MORN
Security Exchange Name NASDAQ
Document Type 8-K
Entity Central Index Key 0001289419
Amendment Flag false
Morningstar (NASDAQ:MORN)
Historical Stock Chart
From Oct 2024 to Nov 2024 Click Here for more Morningstar Charts.
Morningstar (NASDAQ:MORN)
Historical Stock Chart
From Nov 2023 to Nov 2024 Click Here for more Morningstar Charts.