10-Q 1 morn-20210930.htm 10-Q morn-20210930
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED September 30, 2021
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from         to
Commission File Number: 000-51280
MORNINGSTAR, INC.
(Exact Name of Registrant as Specified in its Charter) 
morn-20210930_g1.jpg
Illinois 36-3297908
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
22 West Washington Street 
ChicagoIllinois60602
(Address of Principal Executive Offices)(Zip Code)
  (312) 696-6000
(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:
Title of Each ClassTrading SymbolName of Each Exchange on Which Registered
Common stock, no par valueMORNNASDAQ
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Accelerated filer  
o

Non-accelerated filer   o
Smaller reporting company  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. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No x
As of October 22, 2021, there were 43,095,493 shares of the Company’s common stock, no par value, outstanding.


MORNINGSTAR, INC. AND SUBSIDIARIES
INDEX
 
   
 
   
   Unaudited Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2021 and 2020
Unaudited Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2021 and 2020
    
   Unaudited Condensed Consolidated Balance Sheets as of September 30, 2021 and December 31, 2020
    
   Unaudited Condensed Consolidated Statements of Equity for the three and nine months ended September 30, 2021 and 2020
    
   Unaudited Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2021 and 2020
    
   
   
 
   
 
   
 
   
   
   
 
   
 
   
 
   
 
   
 
3

PART 1.FINANCIAL INFORMATION
Item 1.Financial Statements
Morningstar, Inc. and Subsidiaries
Unaudited Condensed Consolidated Statements of Income
 Three months ended September 30,Nine months ended September 30,
(in millions, except share and per share amounts)2021202020212020
Revenue$428.9 $357.2 $1,237.1 $1,009.1 
Operating expense:
Cost of revenue183.1 138.7 508.8 406.8 
Sales and marketing72.9 52.6 201.3 150.7 
General and administrative67.0 85.8 232.5 197.8 
Depreciation and amortization38.1 35.8 112.3 103.7 
Total operating expense361.1 312.9 1,054.9 859.0 
Operating income67.8 44.3 182.2 150.1 
Non-operating income (expense), net:  
Interest expense, net(2.3)(1.4)(7.3)(6.5)
Realized gains on sale of investments, reclassified from other comprehensive income1.2 0.7 4.1 1.2 
Holding gain on previously-held equity interest 50.9  50.9 
Other expense, net(3.5)(2.0)(2.7)(6.1)
Non-operating income (expense), net(4.6)48.2 (5.9)39.5 
Income before income taxes and equity in net income (loss) of unconsolidated entities63.2 92.5 176.3 189.6 
Equity in net income (loss) of unconsolidated entities1.9 0.6 4.6 (0.7)
Income tax expense 16.1 16.9 44.1 40.6 
Consolidated net income$49.0 $76.2 $136.8 $148.3 
Net income per share:  
Basic$1.14 $1.78 $3.18 $3.46 
Diluted$1.13 $1.76 $3.16 $3.43 
Dividends per common share:
Dividends declared per common share$ $ $0.63 $0.60 
Dividends paid per common share$0.32 $0.30 $0.95 $0.90 
Weighted average shares outstanding:
Basic43.1 42.9 43.0 42.9 
Diluted43.4 43.2 43.3 43.2 
See notes to unaudited condensed consolidated financial statements.
4

Morningstar, Inc. and Subsidiaries
Unaudited Condensed Consolidated Statements of Comprehensive Income

 Three months ended September 30,Nine months ended September 30,
(in millions) 2021202020212020
Consolidated net income $49.0 $76.2 $136.8 $148.3 
Other comprehensive loss, net of tax:
Foreign currency translation adjustment(18.6)24.3 (14.0)(3.3)
Unrealized gains (losses) on securities:
  Unrealized holding gains (losses) arising during period(0.5)0.8 4.4 (0.5)
  Reclassification of gains included in net income(1.0)(0.5)(3.2)(0.9)
Other comprehensive income (loss)(20.1)24.6 (12.8)(4.7)
Comprehensive income$28.9 $100.8 $124.0 $143.6 

See notes to unaudited condensed consolidated financial statements.


5

Morningstar, Inc. and Subsidiaries
Unaudited Condensed Consolidated Balance Sheets
(in millions, except share amounts)As of September 30, 2021
(unaudited)
As of December 31, 2020
Assets  
Current assets:  
Cash and cash equivalents$427.0 $422.5 
Investments60.3 41.7 
Accounts receivable, less allowance for credit losses of $4.9 million and $4.2 million, respectively239.3 205.1 
Income tax receivable10.6 2.2 
Deferred commissions26.9 21.1 
Prepaid expenses31.2 31.7 
Other current assets1.7 5.7 
Total current assets797.0 730.0 
Goodwill1,209.0 1,205.0 
Intangible assets, net344.2 380.1 
Property, equipment, and capitalized software, less accumulated depreciation and amortization of $513.7 million and $452.3 million, respectively165.4 155.1 
Operating lease assets128.1 147.7 
Investments in unconsolidated entities51.0 32.6 
Deferred tax asset, net12.0 12.6 
Deferred commissions25.1 18.5 
Other assets12.6 14.4 
Total assets$2,744.4 $2,696.0 
Liabilities and equity  
Current liabilities:  
Deferred revenue$364.5 $306.8 
Accrued compensation220.0 169.2 
Accounts payable and accrued liabilities50.5 64.5 
Operating lease liabilities31.5 39.9 
Contingent consideration liability17.7 35.0 
Other current liabilities9.2 11.1 
Total current liabilities693.4 626.5 
Operating lease liabilities121.4 137.7 
Accrued compensation15.0 35.1 
Deferred tax liabilities, net104.7 108.9 
Long-term debt374.3 449.1 
Deferred revenue34.5 33.5 
Other long-term liabilities15.6 33.8 
Total liabilities1,358.9 1,424.6 
Equity:  
Morningstar, Inc. shareholders’ equity:  
Common stock, no par value, 200,000,000 shares authorized, of which 43,099,193 and 42,898,158 shares were outstanding as of September 30, 2021 and December 31, 2020, respectively  
Treasury stock at cost, 11,123,278 and 11,135,446 shares as of September 30, 2021 and December 31, 2020, respectively(764.3)(767.3)
6

Additional paid-in capital685.5 671.3 
Retained earnings1,499.1 1,389.4 
Accumulated other comprehensive loss:
    Currency translation adjustment
(39.7)(25.7)
    Unrealized gain on available-for-sale investments4.9 3.7 
Total accumulated other comprehensive loss(34.8)(22.0)
Total equity1,385.5 1,271.4 
Total liabilities and equity$2,744.4 $2,696.0 

See notes to unaudited condensed consolidated financial statements.
7

Morningstar, Inc. and Subsidiaries
Unaudited Condensed Consolidated Statements of Equity
For the three and nine months ended September 30, 2021 and 2020
 Morningstar, Inc. Shareholders’ Equity 
Accumulated
Other
Comprehensive
Loss
 Common Stock Additional
Paid-in
Capital
 
(in millions, except share and per share amounts)Shares
Outstanding
Par
Value
Treasury
Stock
Retained
Earnings
Total
Equity
Balance as of December 31, 202042,898,158 $ $(767.3)$671.3 $1,389.4 $(22.0)$1,271.4 
Net income— — — 54.9 — 54.9 
Other comprehensive loss:
Unrealized gain on available-for-sale investments, net of income tax of $0.7 million— — — — 2.1 2.1 
Reclassification of adjustments for gain included in net income, net of income tax of $0.3 million— — — — (1.0)(1.0)
Foreign currency translation adjustment, net— — — — (3.0)(3.0)
Other comprehensive loss, net— — — — (1.9)(1.9)
Issuance of common stock related to stock-option exercises and vesting of restricted stock units, net of shares withheld for taxes on settlements of restricted stock units47,826   (6.3)  (6.3)
Reclassification of awards previously liability-classified that were converted to equity  8.7   8.7 
Stock-based compensation— — 8.1 — — 8.1 
Dividends declared ($0.32 per share)— — — (13.5)— (13.5)
Balance as of March 31, 202142,945,984 $ $(767.3)$681.8 $1,430.8 $(23.9)$1,321.4 
Net income— — — 32.9 — 32.9 
Other comprehensive income:
Unrealized gain on available-for-sale investments, net of income tax of $0.9 million— — — — 2.8 2.8 
Reclassification of adjustments for gain included in net income, net of income tax of $0.4 million— — — — (1.2)(1.2)
Foreign currency translation adjustment, net— — — — 7.6 7.6 
Other comprehensive income, net— — — — 9.2 9.2 
Issuance of common stock related to stock-option exercises and vesting of restricted stock units, net of shares withheld for taxes on settlements of restricted stock units120,587  2.2 (14.2)  (12.0)
Reclassification of awards previously liability-classified that were converted to equity  0.1   0.1 
Stock-based compensation— — 11.8 — — 11.8 
Dividends declared ($0.32 per share)— — — (13.6)— (13.6)
Balance as of June 30, 202143,066,571 $ $(765.1)$679.5 $1,450.1 $(14.7)$1,349.8 
Net income— — — 49.0 — 49.0 
Other comprehensive income:
Unrealized loss on available-for-sale investments, net of income tax of $0.3 million— — — — (0.5)(0.5)
Reclassification of adjustments for gain included in net income, net of income tax of $0.3 million— — — — (1.0)(1.0)
8

Foreign currency translation adjustment, net— — — — (18.6)(18.6)
Other comprehensive loss, net— — — — (20.1)(20.1)
Issuance of common stock related to stock-option exercises and vesting of restricted stock units, net of shares withheld for taxes on settlements of restricted stock units33,822 — 1.1 (5.1)— — (4.0)
Stock-based compensation— — 11.1 — — 11.1 
Common shares repurchased(1,200)— (0.3)— — — (0.3)
Balance as of September 30, 202143,099,193 $ $(764.3)$685.5 $1,499.1 $(34.8)$1,385.5 

9


 Morningstar, Inc. Shareholders’ Equity 
Accumulated
Other
Comprehensive
Loss
 Common Stock Additional
Paid-in
Capital
 
(in millions, except share and per share amounts)Shares
Outstanding
Par
Value
Treasury
Stock
Retained
Earnings
Total
Equity
Balance as of December 31, 201942,848,359 $ $(728.7)$655.0 $1,217.9 $(60.6)$1,083.6 
Net income— — — 23.9 — 23.9 
Other comprehensive loss:
Unrealized loss on available-for-sale investments, net of income tax of $1.4 million— — — — (4.1)(4.1)
Reclassification of adjustments for loss included in net income, net of income tax of $0.1 million— — — — 0.3 0.3 
Foreign currency translation adjustment, net— — — — (40.4)(40.4)
Other comprehensive loss— — — — (44.2)(44.2)
Issuance of common stock related to stock-option exercises and vesting of restricted stock units, net of shares withheld for taxes on settlements of restricted stock units121,689 — — (10.6)— — (10.6)
Reclassification of awards previously liability-classified that were converted to equity— — 5.5 — — 5.5 
Stock-based compensation— — 7.3 — — 7.3 
Common shares repurchased(176,925)— (20.0)— — — (20.0)
Dividends declared ($0.30 per share)— — — (12.8)— (12.8)
Balance as of March 31, 202042,793,123 $ $(748.7)$657.2 $1,229.0 $(104.8)$1,032.7 
Net income— — — 48.2 — 48.2 
Other comprehensive loss:`
Unrealized gain on available-for-sale investments, net of income tax of $0.9 million— — — — 2.8 2.8 
Reclassification of adjustments for gain included in net income, net of income tax of $0.2 million— — — — (0.7)(0.7)
Foreign currency translation adjustment, net— — — — 12.8 12.8 
Other comprehensive loss, net— — — — 14.9 14.9 
Issuance of common stock related to stock-option exercises and vesting of restricted stock units, net of shares withheld for taxes on settlements of restricted stock units128,060 — 1.3 (7.9)— — (6.6)
Reclassification of awards previously liability-classified that were converted to equity— — 0.3 — — 0.3 
Stock-based compensation— — 10.3 — — 10.3 
Dividends declared ($0.30 per share)— — — (12.9)— (12.9)
Balance as of June 30, 202042,921,183 $ $(747.4)$659.9 $1,264.3 $(89.9)$1,086.9 
Net income— — — 76.2 — 76.2 
Other comprehensive loss:
Unrealized gain on available-for-sale investments, net of income tax of $0.3 million— — — — 0.8 0.8 
Reclassification of adjustments for gain included in net income, net of income tax of $0.2 million— — — — (0.5)(0.5)
10

Foreign currency translation adjustment, net— — — — 24.3 24.3 
Other comprehensive loss, net— — — — 24.6 24.6 
Vesting of restricted stock units, net of shares withheld for taxes on settlements of restricted stock units49,758 — 0.8 (2.1)— — (1.3)
Reclassification of awards previously liability-classified that were converted to equity— — 0.1 — — 0.1 
Stock-based compensation— — 9.9 — — 9.9 
Common shares repurchased(122,020)— (19.3)— — — (19.3)
Balance as of September 30, 202042,848,921 $ $(765.9)$667.8 $1,340.5 $(65.3)$1,177.1 

See notes to unaudited condensed consolidated financial statements.

11

Morningstar, Inc. and Subsidiaries
Unaudited Condensed Consolidated Statements of Cash Flows
 Nine months ended September 30,
(in millions)20212020
Operating activities
Consolidated net income $136.8 $148.3 
Adjustments to reconcile consolidated net income to net cash flows from operating activities:
Depreciation and amortization112.3 103.7 
Deferred income taxes(8.5)(2.1)
Stock-based compensation expense31.0 27.5 
Provision for bad debt2.0 2.2 
Equity in net (income) loss of unconsolidated entities(4.6)0.7 
Holding gain on previously held equity interest  (50.9)
Acquisition earn-out accrual22.5 27.8 
Other, net(0.8)4.3 
Changes in operating assets and liabilities:
Accounts receivable(38.0)5.5 
Accounts payable and accrued liabilities(1.4)(7.0)
Accrued compensation and deferred commissions8.5 (16.1)
Income taxes, current(8.1)2.7 
Deferred revenue62.7 21.5 
Other assets and liabilities(0.4)1.6 
Cash provided by operating activities314.0 269.7 
Investing activities 
Purchases of investment securities(54.5)(40.4)
Proceeds from maturities and sales of investment securities40.6 41.0 
Capital expenditures(71.6)(54.7)
Acquisitions, net of cash acquired(24.6)(67.8)
Purchases of equity-method investments(15.8)(4.5)
Other, net0.5 1.7 
Cash used for investing activities(125.4)(124.7)
Financing activities 
Common shares repurchased(0.1)(37.6)
Dividends paid(40.6)(38.6)
Proceeds from revolving credit facility10.0 60.0 
Repayment of revolving credit facility(10.0)(80.0)
Repayment of term facility(75.0)(8.4)
Proceeds from stock-option exercises0.2 1.3 
Employee taxes withheld for restricted stock units(22.4)(19.8)
Payment of acquisition-related earn-outs(34.4) 
Other, net(3.2)(1.5)
Cash used for financing activities(175.5)(124.6)
Effect of exchange rate changes on cash and cash equivalents(8.6)(3.4)
Net decrease in cash and cash equivalents4.5 17.0 
Cash and cash equivalents—beginning of period422.5 334.1 
Cash and cash equivalents—end of period$427.0 $351.1 
Supplemental disclosure of cash flow information: 
Cash paid for income taxes$60.5 $40.0 
Cash paid for interest$8.1 $7.7 
Supplemental information of non-cash investing and financing activities:
Unrealized gain (loss) on available-for-sale investments$1.3 $(1.9)
See notes to unaudited condensed consolidated financial statements.
12

MORNINGSTAR, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 
1. Basis of Presentation of Interim Financial Information
 
The accompanying unaudited condensed consolidated financial statements of Morningstar, Inc. and subsidiaries (Morningstar, we, our, the Company) have been prepared to conform to the rules and regulations of the Securities and Exchange Commission (SEC). The preparation of financial statements in conformity with accounting principles generally accepted in the United States (U.S. GAAP) requires management to make estimates and assumptions that affect the reported amount of assets, liabilities, revenues, and expenses. Actual results could differ from those estimates. In the opinion of management, the statements reflect all adjustments, which are of a normal recurring nature, necessary to present fairly our financial position, results of operations, equity, and cash flows. These financial statements and notes are unaudited and should be read in conjunction with our Audited Consolidated Financial Statements and Notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2020, filed with the SEC on February 26, 2021 (our Annual Report).

The acronyms that appear in the Notes to our Unaudited Condensed Consolidated Financial Statements refer to the following:

ASC: Accounting Standards Codification
ASU: Accounting Standards Update
FASB: Financial Accounting Standards Board

2. Summary of Significant Accounting Policies

Our significant accounting policies are included in Note 2 of the Notes to our Audited Consolidated Financial Statements included in our Annual Report.

Recently adopted accounting pronouncements

Income Taxes: On December 18, 2019, the FASB issued ASU No. 2019-12, Simplifying the Accounting for Income Taxes (ASU No. 2019-12), which is intended to simplify the accounting for income taxes by removing certain exceptions to the general principles of ASC 740, Income Taxes, and providing for simplification in several other areas. The new standard became effective for us on January 1, 2021. The adoption of ASU No. 2019-12 did not have a material impact on our consolidated financial statements, related disclosures, or results of operations.

Recently issued accounting pronouncements not yet adopted

Reference Rate Reform: On March 12, 2020, the FASB issued ASU No. 2020-04: Facilitation of the Effects of Reference Rate Reform on Financial Reporting (Topic 848) (ASU No. 2020-04), which provides temporary optional expedients and exceptions for applying generally accepted accounting principles to contract modifications resulting from reference rate reform initiatives. The intention of the standard is to ease the potential accounting and financial reporting burden associated with transitioning away from the expiring London Interbank Offered Rate (LIBOR) and other interbank offered rates to alternative benchmark rates. The amendments in this update are applicable to contract modifications that replace a reference LIBOR rate beginning on March 12, 2020 through December 31, 2022. The optional expedients apply to our Credit Agreement and allow the Company to account for modifications due to reference rate reform by prospectively adjusting the effective interest rate on the Credit Agreement. As of September 30, 2021, we have not modified the Credit Agreement related to reference rate reform but expect to modify the Credit Agreement before the end of 2022. We plan to apply the optional practical expedients and exceptions to modifications of the Credit Agreement affected by reference rate reform and are evaluating the effect on our consolidated financial statements, related disclosures, and results of operations.



13

3. Credit Arrangements

Long-term Debt

The following table summarizes our long-term debt as of September 30, 2021 and December 31, 2020.
(in millions)As of September 30, 2021As of December 31, 2020
Term Facility, net of unamortized debt issuance costs of $0.0 million and $0.1 million, respectively
$26.0 $100.8 
2.32% Senior Notes due October 26, 2030, net of unamortized debt issuance costs of $1.7 million and $1.7 million, respectively348.3 348.3 
Long-term debt$374.3 $449.1 

Credit Agreement

On July 2, 2019, the Company entered into a senior credit agreement (the Credit Agreement). The Credit Agreement provides the Company with a five-year multi-currency credit facility with an initial borrowing capacity of up to $750.0 million, including a $300.0 million revolving credit facility (the Revolving Credit Facility) and a term loan facility of $450.0 million (the Term Facility). The Credit Agreement also provides for the issuance of up to $50.0 million of letters of credit and a $100.0 million sub-limit for a swingline facility under the Revolving Credit Facility. The Credit Agreement will expire on July 2, 2024. As of September 30, 2021, our total outstanding debt under the Credit Agreement was $26.0 million with borrowing availability of $300.0 million under the Revolving Credit Facility.

The interest rate applicable to any loan under the Credit Agreement is, at our option, either: (i) the applicable LIBOR plus an applicable margin for such loans, which ranges between 1.00% and 1.50%, based on our consolidated leverage ratio or (ii) the lender's base rate plus the applicable margin for such loans, which ranges between 0.00% and 0.50%, based on our consolidated leverage ratio.

The proceeds of the Term Facility and initial borrowings under the Revolving Credit Facility were used to finance the acquisition of DBRS. The proceeds of future borrowings under the Revolving Credit Facility may be used for working capital, capital expenditures or any other lawful corporate purpose.

The portions of deferred debt issuance costs related to the Revolving Credit Facility are included in other current and other non-current assets, and the portion of deferred debt issuance costs related to the Term Facility is reported as a reduction to the carrying amount of the Term Facility. Debt issuance costs related to the Revolving Credit Facility are amortized on a straight-line basis to interest expense over the term of the Credit Agreement. Debt issuance costs related to the Term Facility are amortized to interest expense using the effective interest method over the term of the Credit Agreement.

Private Placement Debt Offering

On October 26, 2020, we completed the issuance and sale of $350.0 million aggregate principal amount of 2.32% senior notes due October 26, 2030 (the 2030 Notes), in a private placement exempt from the registration requirements of the Securities Act of 1933, as amended. Proceeds were primarily used to pay off a portion of the Company's outstanding debt under the Credit Agreement. Interest on the 2030 Notes will be paid semi-annually on each October 30 and April 30 during the term of the 2030 Notes and at maturity, with the first interest payment date occurring on April 30, 2021. As of September 30, 2021, our total outstanding debt, net of issuance costs, under the 2030 Notes was $348.3 million.

Compliance with Covenants

Each of the Credit Agreement and the 2030 Notes include customary representations, warranties, and covenants, including financial covenants, that require us to maintain specified ratios of consolidated earnings before interest, taxes, depreciation, and amortization (EBITDA) to consolidated interest charges and consolidated funded indebtedness to consolidated EBITDA, which are tested on a quarterly basis. We were in compliance with these financial covenants as of September 30, 2021.


14


4. Acquisitions, Goodwill, and Other Intangible Assets

2021 Acquisitions
On September 3, 2021, we acquired Moorgate Benchmarks (Moorgate), a privately held European-based global provider of index design, calculation, and administration. We began consolidating the financial results of Moorgate in our consolidated financial statements on September 3, 2021.

The transaction has been accounted for as a business combination using the acquisition method of accounting, which requires that assets acquired and liabilities assumed be recognized at their fair values as of the acquisition date. As of September 30, 2021, we completed our initial determination of the fair values of the acquired, identifiable assets and liabilities based on the information available. Based on the timing of the close of this transaction later in the quarter, there are various areas that are not finalized due to information that may become available subsequently, which may result in changes in the values assigned to various assets and liabilities. If additional information related to the acquisition date fair value determinations becomes available within 12 months of the acquisition date, there may be adjustments to these initial fair value measurements. Any changes in the fair values of the assets acquired and liabilities assumed during the measurement period may result in adjustments to goodwill.

The preliminary allocation of the estimated fair values of the assets acquired and liabilities assumed includes $14.8 million of goodwill and $13.4 million of acquired intangible assets, as follows:

(in millions)Weighted average useful life (years)
Technology-based assets$12.1 7
Customer-related assets1.3 5
Total intangible assets$13.4 

We recognized a preliminary net deferred tax liability of $3.2 million primarily because the amortization expense related to certain intangible assets is not deductible for income tax purposes.

2020 Acquisitions
During the second quarter of 2021, we finalized the purchase price allocation related to our acquisition of Sustainalytics and did not record any significant adjustments compared with the preliminary estimates disclosed in the Notes to the Audited Consolidated Financial Statements included in our Annual Report.

Goodwill
The following table shows the changes in our goodwill balances from December 31, 2020 to September 30, 2021:
 (in millions)
Balance as of December 31, 2020$1,205.0 
Acquisition of Moorgate14.8 
Other, primarily foreign currency translation(10.8)
Balance as of September 30, 2021$1,209.0 
We did not record any goodwill impairment losses in the first nine months of 2021 and 2020. We perform our annual impairment reviews in the fourth quarter or when impairment indicators and triggering events are identified.


15

Intangible Assets
The following table summarizes our intangible assets: 

 As of September 30, 2021As of December 31, 2020
(in millions)GrossAccumulated
Amortization
NetWeighted
Average
Useful  Life
(years)
GrossAccumulated
Amortization
NetWeighted
Average
Useful  Life
(years)
Customer-related assets$414.1 $(185.3)$228.8 11$415.6 $(163.7)$251.9 11
Technology-based assets233.1 (152.3)80.8 7223.2 (135.2)88.0 7
Intellectual property & other83.0 (48.4)34.6 883.6 (43.4)40.2 8
Total intangible assets$730.2 $(386.0)$344.2 10$722.4 $(342.3)$380.1 10
 
The following table summarizes our amortization expense related to intangible assets:

 Three months ended September 30,Nine months ended September 30,
(in millions)2021202020212020
Amortization expense$15.6 $15.6 $46.9 $43.3 
 
We amortize intangible assets using the straight-line method over their expected economic useful lives.

Based on acquisitions and divestitures completed through September 30, 2021, we expect intangible amortization expense for the remainder of 2021 and subsequent years to be as follows:
 (in millions)
Remainder of 2021 (October 1 through December 31)$14.6 
202254.8 
202351.0 
202444.8 
202538.3 
Thereafter140.7 
Total$344.2 
 
Our estimates of future amortization expense for intangible assets may be affected by additional acquisitions, divestitur