2010 Overview Accomplishments Challenges 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 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 We have more work to do in fully integrating some of  our acquisitions and rebranding many of these businesses  under the Morningstar umbrella. 3 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