2. Restatement Morningstar, Inc. and Subsidiaries Notes to Consolidated Financial Statements 1. Description of Business Consolidated Statements of Income Data 2009  2008 Previously Previously  (in thousands except per share amounts)  Reported  Adjustments  Restated  Reported  Adjustments  Restated General and administrative expense  $ 82,949  $ 647  $ 83,596  $ 85,266  $  243  $ 85,509 Operating expense  $ 353,676  $ 647  $ 354,323  $ 363,338  $  243  $ 363,581 Operating income  $ 125,320  $ (647)  $ 124,673  $ 139,119  $  (243)  $ 138,876 Income before income taxes and equity in net income of unconsolidated entities  $ 128,254  $ (647)  $ 127,607  $ 143,371  $  (243)  $ 143,128 Income tax expense  $ 47,095  $ (320)  $ 46,775  $  51,763  $ 2,660  $ 54,423 Consolidated net income  $ 82,324  $ (327)  $  81,997  $ 92,929  $ (2,903)  $ 90,026 Net income attributable to Morningstar, Inc.  $ 82,456  $ (327)  $ 82,129  $ 92,532  $ (2,903)  $ 89,629 Net income per share attributable to Morningstar, Inc. - basic $  1.71  $  —  $  1.71  $  2.01  $ (0.07)  $  1.94 Net income per share attributable to Morningstar, Inc. - diluted  $  1.66  $ (0.01)  $  1.65  $  1.88  $ (0.06)  $  1.82 Consolidated Balance Sheet Data As of December 31, 2009 Previously  ($000) Reported  Adjustments  Restated Goodwill  $ 249,992  $  (500)  $ 249,492 Total assets  $ 919,583  $  (500)  $ 919,083 Accounts payable and accrued liabilities  $  29,901  $  623  $  30,524 Total current liabilities  $ 206,879  $  623  $ 207,502 Deferred tax liability, net  $  4,678  $ 9,962  $  14,640 Total liabilities  $ 242,709  $ 10,585  $ 253,294 Additional paid-in capital  $ 432,052  $ (3,913)  $ 428,139 Retained earnings  $ 246,745  $ (7,172)  $ 239,573 Total Morningstar, Inc. shareholders’ equity  $ 675,705  $ (11,085)  $ 664,620 Total equity  $ 676,874  $ (11,085)  $ 665,789 Total liabilities and equity  $ 919,583  $  (500)  $ 919,083 Morningstar, Inc. 2010 Annual Report 105 In 2010, we determined that the cumulative effect of adjustments  related to prior periods were material, in aggregate, if recorded in  our 2010 financial statements. These amounts related primarily to  our accounting for deferred taxes and, to a lesser extent, to expense  adjustments associated with vacant office space and rent for one  of our office leases. We evaluated the effects of these errors on our  prior periods’ Consolidated Financial Statements, individually and  in the aggregate, in accordance with the materiality guidance pro- vided by the SEC staff, as included in SAB Topics 1M and 1N, and  concluded that no prior period is materially misstated. However, in  accordance with the provisions of these SAB Topics, we are restat- ing our Consolidated Financial Statements, as of and for the years  ended December 31, 2009 and 2008, as follows: Morningstar, Inc. and its subsidiaries (Morningstar, we, our), is a  provider of independent investment research to investors around  the world. We offer an extensive line of data, software, and research  products for individual investors, financial advisors, and institutional  clients. We also offer asset management services for advisors,  institutions, and retirement plan participants. We have operations  in 26 countries.