Some of the specific measure of success we focus on are:

Higher revenue per advisor

Significant increases in net inflows for Morningstar Managed
Portfolios globally

Continued growth in the adoption rate for our managed
retirement accounts

Double-digit annual growth rates in total licenses for
Morningstar Direct and PitchBook Data

Positive trends in our Net Promoter Score, a measure of product
satisfaction based on how likely users are to recommend a
product or service

Expansion of our credit ratings capabilities and market share

Strong long-term performance for our research and investment
management offerings

Operationally, were focusing on improving our execution and
scale to help us make the transition from being a medium-sized
company to one thats significantly larger. Our vision for
success here includes:

Increasing speed and agility so that we can bring our
capabilities together in a smarter and faster way

Driving operational excellence as a core capability

Continuing to improve alignment and accountability within teams

Focusing on the convergence of data and technology to improve
our core data operations

While we dont issue public financial forecasts, we would expect
these efforts to result in stronger financial performance over
time, including more robust revenue growth than weve shown over
the past couple of years. Our goal is to drive profitable
growth and become a significantly larger business.

We also plan to continue investing in our core data and
research capabilities. Our vision for success here includes
continuing to build out the depth and breadth of these assets,
as well as our ability to monetize them. We also want to make
sure Morningstar stays relevant in a changing investment
landscape by enhancing our capabilities in areas outside of
traditional mutual funds (including fixed income, equity data,
and private capital) and providing investors with a more
comprehensive approach to asset allocation and portfolio
analysis.

More broadly, we think this a good time to be an investor, and
were proud that Morningstar is part of the reason for that.
Globally, fees on investment products are declining, investor
options are growing, and regulatory change is catching up to an
investor-first vision that Morningstar has embraced since we
first started in 1984. We plan to look at the change happening
in our industry as an opportunity to innovate, an opportunity
to grow, and an opportunity to illuminate investing. That will
be the ultimate measure of our success going forward.

Product Pricing

2. What has pricing growth been in the past five
years?Whats the outlook going forward?

We continuously enhance the value of products and services to
meet our clients needs, so our focus is on delivering more
value to our clients. Weve also held back on price increases in
recent years because of the slower macroeconomic environment.
Because many of our clients have been under pressure to reduce
their costs in response to pressure on investment management
fees, we dont expect the near-term environment to be overly
receptive to higher prices. However, we are planning some
moderate price increases in 2017 to reflect the enhanced value
were delivering with products such as Morningstar Direct and
Morningstar Data.

Distribution Channels

3. What is the revenue breakdown by distribution
channel (self-serve, direct sales, third-party sales,etc.)?
Which channels are becoming more or less important? Are there
significant margin differences between the different
channels?

Over time, our sales model has shifted away from direct/self
service and more toward enterprise sales, mainly reflecting
growth in products such as Morningstar Direct, Morningstar
Data, and Workplace Solutions. We estimate that our revenue
breaks down by distribution channel as shown below.

We dont currently track our operating margin by sales channel,
but are always looking for ways to improve our margins through
greater sales productivity and efficiency.

Operating Margin

4. What needs to happen for us to see a
significantly higher or lower margin going forward?

One of the main characteristics of our business is high
operating leveragemeaning the majority of our cost base is
relatively fixed (mainly in the form of compensation costs for
most of our employees), as opposed to variable costs that
change along with the level of sales. This magnifies the effect
of revenue fluctuations on our operating results. As a result,
if revenue increases, we would generally expect to see a larger
percentage increase in operating income (and operating margin,
by extension). By the same token, any decline in revenue would
generally lead to a larger percentage decline in operating
income and operating margin. This effect is partly offset by
the current structure of our bonus plan, which provides a
partial hedge against weaker performance because we reduce the
operating expense for the bonus plan if actual revenue is lower
than our expectations.

Investments and acquisitions may also lead to changes in our
operating margin. Weve made significant investments to rebuild
many of our major software platforms over the past several
years, which has increased our cost base and reduced our
operating margin. Some of our acquisitions may also have a
negative effect on our consolidated operating margin in the
short term. For example, PitchBook Data,Inc., which we acquired
in December2016, has had modest operating losses as a startup
firm. However, we believe it has significant revenue growth
potential because of its strong market position and increasing
investor interest in private equity, venture capital, and
mergers and acquisitions (MA). We also believe PitchBook should
be able to start generating operating profits relatively soon
because it has a similar business model as the rest of
Morningstarnamely, a scalable business with high operating
leverage.

Key Operating Metrics

5. What are three to five key metrics that
management uses to judge if the business is going to the right
or wrong direction?

In addition to financial metrics, we track a variety of
operating metrics related to our key products, which you can
find in the table labeled Supplemental Data included in our
quarterly earnings releases. If we had to narrow it down to
five key metrics, we would highlight these measures: revenue
per advisor, net new flows into Morningstar Managed Portfolios,
the adoption rate for managed retirement accounts, net new
seats for Morningstar Direct and PitchBook Data, and trends in
our Net Promoter Score.

Potential Tax Changes and Cash Balance

6. If President-elect Trump is effective at
changing the tax code and lowering the corporate tax rate, how
will lower taxes impact Morningstars strategy regarding
repatriation of its foreign cash balances?

As of September30, 2016, approximately 80% of our cash, cash
equivalents, and investments balance was held by our operations
outside of the United States. Based on the circumstances at
that time, we also disclosed that we do not expect to
repatriate earnings from our international subsidiaries in the
foreseeable future.

While we continuously monitor and assess current and proposed
tax legislation, it would be premature to speculate about which
tax reforms might ultimately be enacted. If tax reform is
enacted, we would evaluate its overall impact and make any
decisions at that time. For example, a lower corporate tax rate
would likely increase our cash provided by operating activities
and allow us to deploy our cash balance in a different way. As
far as our strategy for repatriating foreign cash balances, we
would consider a variety of factors, including each operations
recent financial performance, operating cash needs, and
strategic and operating plans.

Morningstar Library Services

7. When did Morningstar [Morningstar Library
Services] start its online database subscription service for
public libraries? How many public libraries currently subscribe
to this service?

We introduced Morningstar Investment Research Center, our
database service for libraries, in 2003. We currently have
about 850 public libraries as subscribers and also serve
government, corporate, and academic libraries.