2010 10-K: Part II Challenges 68 U  Morningstar Direct had a record year with more than 1,200 new  licenses added globally. U  Both renewal rates for contract-based products and services and  retention rates for subscription products rose substantially com- pared with 2009, reflecting improved business conditions and  healthier sales trends across most of our product lines. U  Morningstar’s board of directors approved a 5 cent per share  initial quarterly dividend and a $100 million share repurchase  program, allowing us to return a portion of our cash balance to shareholders. U  Operating expense rose faster than revenue in 2010, leading to  a 4.2 percentage point decline in our operating margin, in part  because we restored some incentive compensation and benefits  after reducing them in 2009. U  We have more work to do in fully integrating some of our acqui- sitions and rebranding many of these businesses under the  Morningstar umbrella. U  While advertising sales on Morningstar.com rebounded strongly  U.S. Premium Membership subscriptions were 8% lower year  over year as individual investors have been slow to return to the  stock market and remain cautious about discretionary spending. Revenue from Acquisitions Annuity intelligence business of Advanced  Sales and Marketing Corp Seeds Group Morningstar Danmark A/S Realpoint, LLC Old Broad Street Research Ltd Aegis Equities Research Footnoted business of Financial Fineprint Inc. Logical Information Machines, Inc Canadian Investment Awards and Gala Intech Pty Ltd Andex Associates, Inc Equity research and data business of C.P.M.S.  Computerized Portfolio Mgmnt Services, Inc. Global financial filings database business  of Global Reports LLC InvestData (Proprietary) Limited Tenfore Systems Limited 10-K Wizard Technology, LLC Fundamental Data Limited Financial Computer Support, Inc. Hemscott data, media, and investor  relations website businesses  Mutual fund data business from  Standard & Poor’s Total ($mil)  $27.1  $29.6  $47.9 2008  2009  2010 J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D 1 31 1 31 1 31 3 31 12 31 1 31 1 31 1 31 17 16 30 31 1 30 1 30 20 19 29 28 17 16 4 3 2 1 2 1 9 8 1 1 5