Morningstar, Inc. · NASDAQ:MORN
Morningstar — Shareholder Meeting (May 2021)
96 slides from Morningstar's shareholder meeting presentation, May 14, 2021
Slide 1: Morningstar 2021 Shareholders' Meeting
Morningstar 2021 Shareholders’ Meeting
Slide 2: Welcome
Welcome Joe Mansueto Executive Chairman
Slide 3: Forward-looking statements and non-GAAP measures
Today’s presentations contain forward-looking statements. All statements made that are not historical facts are subject to a number of risks and uncertainties, and actual results may differ materially. Please refer to our most recent earnings release and our most recent Form 10-Q or 10-K for more inf
Slide 4: Business of Annual Meeting
Business of Annual Meeting Management Presentations Questions & Answers
Slide 5: Virtual Meeting Access Instructions
Virtual Meeting Access Instructions Broadridge Platform: VOTE BY INTERNET - www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information. Vote by 11:59 P.M. ET on 05/13/2021. Have your proxy card in hand when you access the web site and follow th
Slide 6: Proposal 1: Election of Directors
Proposal 1 Election of Directors Robin Diamonte Cheryl Francis Steve Joynt Steve Kaplan Kunal Kapoor Gail Landis Bill Lyons Joe Mansueto Doniel Sutton Caroline Tsay
Slide 7: Proposal 2: Stock Incentive Plan
Proposal 2 Approval of the Morningstar, Inc. Amended and Restated 2011 Stock Incentive Plan We are asking shareholders to approve the Morningstar, Inc. Amended and Restated 2011 Stock Incentive Plan, which amends and restates the Morningstar, Inc. 2011 Stock Incentive Plan, including to extend the t
Slide 8: Proposal 3: Advisory Vote on Executive Compensation
Proposal 3 Advisory Vote to Approve Executive Compensation Bevin Desmond Jason Dubinsky Daniel Dunn Kunal Kapoor Joe Mansueto
Slide 9: Proposal 4: Ratification of Accounting Firm
Proposal 4 Ratification of the Appointment of Independent Registered Public Accounting Firm
Slide 10: Voting Instructions
Voting Instructions Management Proposals Use the ‘vote here’ button on the lower right portion of the screen to vote your shares If you already sent in your proxy card or voted by Internet, your shares have been voted accordingly Shareholder Proposal Use the ‘other business’ text box in the lower le
Slide 11: Thank You!
Thank You!
Slide 12: Empowering Investor Success: Meeting the Moment to Shape the Future
Empowering Investor Success: Meeting the Moment to Shape the Future Kunal Kapoor Chief Executive Officer
Slide 13: Our mission to empower investor success
Our mission to empower investor success propels us to simultaneously meet the moment and shape the future.
Slide 14: Morningstar Today
Morningstar Today Revenue Operating Income 7,979 Employees ＋17.9% 2 2 Global U.S. Only ＋13.5% Female 42% White 68% Male 58% Asian 21% 19 20 19 20 Hispanic 4% Black 3% $1,179.0 $1,389.5 $189.6 $215.2 2 or More Races 3% Data as of Dec. 31, 2020. Gender data is calculated based upon permanent, full-tim
Slide 15: Meeting the Moment: Events of 2020
Meeting the Moment: We Empowered Investors Through the Events of 2020 DBRS Covid-Related Credit Events PitchBook SPAC Content Sustainalytics Acquisition Covid-Related Research Content The “S” in ESG 2020 Market Crash/Recovery
Slide 16: Capturing the Signals of Tomorrow's Investors
Shaping the Future by Capturing the Signals of Tomorrow’s Investors Morningstar.com Audience Age Over Time Stock Page View Growth (% of Website Visitors) Jan. 1–Feb 19, 2021 | YOY Growth % 30% 6,553% 25% Nov 2019 - Jan 2020 March 2020 - May 2020 20% Dec 2020 - Feb 2021 15% 10% 05% 44% 121% 18–24 25–
Slide 17: Our strategy of delivering insights essential to investing
Our strategy of delivering insights essential to investing requires us to anticipate investor needs.
Slide 18: Morningstar's Growth Enables the Evolution of the Investor
Morningstar’s Growth Enables the Evolution of the Investor Competitive Analysis Cash-Flow Forecasts Scenario Analysis Quantit Chec l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l
Slide 19: We Expand our Data Universe
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Slide 20: We Expand our Data Universe
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Slide 21: Incorporating ESG Risk Factors Across Our Solutions
Incorporating ESG Risk Factors Across Our Solutions
Slide 22: Sprinting into the Future: Empowering Sustainable Investing
Sprinting into the Future: Empowering Sustainable Investing Innovation and Flow of Capital 1 New Sustainability Investment 2 Objectives Policy New Benchmarks Portfolio Construction 6 New Investor 3 Behavior New Risks 5 4 New Disclosure and Monitoring New Stewardship Responsibilities
Slide 23: Sprinting into the Future: Empowering Sustainable Investing
Sprinting into the Future: Empowering Sustainable Investing Innovation and Flow of Capital 1 New Sustainability Investment 2 Objectives Policy New Benchmarks Portfolio Construction 6 New Investor 3 Behavior New Risks 5 4 New Disclosure and Monitoring New Stewardship Responsibilities
Slide 24: Sprinting into the Future: Empowering Sustainable Investing
Sprinting into the Future: Empowering Sustainable Investing Innovation and Flow of Capital 1 New Sustainability Investment 2 Objectives Policy New Benchmarks Portfolio Construction 6 New Investor 3 Behavior New Risks Morningstar Indexes Morningstar Managed 5 Portfolios Sustainalytics ESG Risk Rating
Slide 25: Sprinting into the Future: Empowering Sustainable Investing
Sprinting into the Future: Empowering Sustainable Investing Innovation and Flow of Capital 1 New Sustainability Investment 2 Objectives Policy New Benchmarks Portfolio Construction 6 New Investor 3 Behavior New Risks Morningstar Proxy European SFDR 5 Voting Database 4 New Disclosure and Monitoring N
Slide 26: Sprinting into the Future: Empowering Sustainable Investing
Sprinting into the Future: Empowering Sustainable Investing Innovation and Flow of Capital 1 New Sustainability Investment 2 Objectives Policy New Benchmarks Portfolio Construction 6 New Investor 3 Behavior New Risks 5 4 New Disclosure and Monitoring New Stewardship Responsibilities
Slide 27: Well-Positioned to Continue Our Growth
Empowering Investor Success Has Us Well-Positioned to Continue Our Growth Morningstar Data Investment Management Advisor Workstation Workplace Solutions Morningstar Data Other DBRS Morningstar Investment Management Morningstar Data Morningstar Direct Other Investment Management DBRS Morningstar Othe
Slide 28: Well-Positioned to Continue Our Growth
Empowering Investor Success Has Us Well-Positioned to Continue Our Growth Morningstar Data Morningstar Direct Other Investment Management DBRS Morningstar Advisor Workstation Morningstar Research Individual PitchBook Workplace Office Sustainalytics Indexes 2020 Revenue Growth High Low
Slide 29: Investor Demand for Data Supports Large and Growing Markets
Investor Demand for Data Supports Large and Growing Markets Global Spend on Financial PitchBook Morningstar Data Morningstar Direct Other Investment Management Data/Analysis Q1 2021 Revenue Growth $33.2 Bil 36.0% Reported DBRS Morningstar 36.0% Advisor Workstation Morningstar Research Individual 5.9
Slide 30: Research and Data Underpin Active and Passive Strategies
Morningstar’s Research and Data Underpin Active and Passive Investment Strategies Total Addressable Market Morningstar Indexes Morningstar Data Morningstar Direct Other Investment Management AUM in Managed Accounts Q1 2021 Revenue Growth $10.7 Tril 21.1% Reported DBRS Morningstar 20.0% Advisor Works
Slide 31: DBRS Morningstar Cements Its Lead in Credit Ratings
DBRS Morningstar Cements Its Lead as an Alternative Credit Ratings Provider Global Credit Ratings DBRS Morningstar Morningstar Data Morningstar Direct Other Investment Management Industry Q1 2021 Revenue Growth $9.0 Bil 27.0% Reported DBRS Morningstar 23.5% Advisor Workstation Morningstar Research I
Slide 32: Sustainalytics Advances Mainstreaming of Sustainable Investing
Sustainalytics Advances the Mainstreaming of Sustainable Investing U.S./EU Sustainable Morningstar Sustainalytics Morningstar Data Morningstar Direct Other Investment Management Funds AUM $1.6 Tril DBRS Morningstar Advisor Workstation Morningstar Research Individual 66.7% Growth YOY PitchBook Workpl
Slide 33: Empowering Investors with Personalized Portfolios
Shaping the Future: Empowering Investors with Personalized Portfolios Morningstar.com PitchBook Morningstar Goal Bridge
Slide 34: Shaping the Future of Retail Wealth
Shaping the Future of Retail Wealth: Empowering Advisors to Empower Individuals Morningstar Morningstar Advisor-Client Data Research Experience Solutions: Managed Investment Data Research Distribution Advisor Workstation Equity Data Research Services Financial Planning Market Data Individual Investo
Slide 35: Execution centered on differentiation, scale, talent, sustainability
We’ve centered execution on differentiation, scale, talent, and sustainability.
Slide 36: Our Four Strategic Priorities
Execution: Our Four Strategic Priorities Help Keep a Growing Global Firm Accountable
Slide 37: Priority: Differentiation
Execution: Our Four Strategic Priorities Help Keep a Growing Global Firm Accountable Differentiation Deliver differentiated insights across asset classes to public and private market investors.
Slide 38: Priority: Scale
Execution: Our Four Strategic Priorities Help Keep a Growing Global Firm Accountable Scale Drive operational excellence and scalability to support growth targets.
Slide 39: Priority: Talent
Execution: Our Four Strategic Priorities Help Keep a Growing Global Firm Accountable Talent Build an inclusive culture that drives exceptional talent engagement and development.
Slide 40: Priority: Sustainability
Execution: Our Four Strategic Priorities Help Keep a Growing Global Firm Accountable Sustainability Establish leading ESG positions across the portfolio.
Slide 41: Our Four Strategic Priorities
Execution: Our Four Strategic Priorities Help Keep a Growing Global Firm Accountable
Slide 42: Measuring Morningstar's Sustainability
Measuring Morningstar’s Sustainability
Slide 43: Empowering sustainable outcomes for the future
Empowering Investor success in the moment. Empowering sustainable outcomes for the future.
Slide 44: Financial Highlights
Financial Highlights Jason Dubinsky Chief Financial Officer
Slide 45: Agenda and Topics
Agenda and Topics A Look Back at Performance Our Current State Framing Our Strategic Priorities
Slide 46: Financial Success Over Past Three Years
Financial Success Over Past Three Years Revenue Operating Cash Flow Shareholder Income Returns
Slide 47: Financial Success Over Past Three Years
Financial Success Over Past Three Years 15.1% Reported CAGR 8.9% Avg Organic Growth1 Revenue Operating Cash Flow Shareholder Income Returns 1. Average annual organic revenue growth excludes M&A and the effect of foreign currency translations from reported revenue growth.
Slide 48: Financial Success Over Past Three Years
Financial Success Over Past Three Years 15.1% 8.2% Reported CAGR Reported CAGR 8.9% 17.9% Avg Organic Growth1 Adjusted CAGR2 Revenue Operating Cash Flow Shareholder Income Returns 1. Average annual organic revenue growth excludes M&A and the effect of foreign currency translations from reported reven
Slide 49: Financial Success Over Past Three Years
Financial Success Over Past Three Years 15.1% 8.2% 15.4% Reported CAGR Reported CAGR OCF3 CAGR 8.9% 17.9% 18.8% Avg Organic Growth1 Adjusted CAGR2 FCF4 CAGR Revenue Operating Cash Flow Shareholder Income Returns 1. Average annual organic revenue growth excludes M&A and the effect of foreign currency
Slide 50: Financial Success Over Past Three Years
Financial Success Over Past Three Years 15.1% 8.2% 15.4% 35.2% Reported CAGR Reported CAGR OCF3 CAGR MORN TSR5 8.9% 17.9% 18.8% 28.4% Avg Organic Growth1 Adjusted CAGR2 FCF4 CAGR Peers TSR6 Revenue Operating Cash Flow Shareholder Income Returns 1. Average annual organic revenue growth excludes M&A a
Slide 51: Drivers of Growth
Drivers of Growth Revenue ($mil) Organic (~60% of Growth) $1,389.5 +52.4% $911.7 Inorganic (~40% of Growth) 17 20
Slide 52: 2020 Performance
2020 Performance ($mil) Revenue Operating Income Adjusted Free Cash Flow** Operating Income* ＋17.9% ＋35.7% ＋20.9% ＋13.5% 19 20 19 20 19 20 19 20 $1,179.0 $1,389.5 $189.6 $215.2 $233.3 $316.7 $254.4 $307.6 * Adjusted operating income and free cash flow are non-GAAP measures. ** Free cash flow is defi
Slide 53: 2020 Success Factors
2020 Success Factors Business Resilience 8.2% Organic Revenue Growth 10.4% License-Based Organic Revenue Growth Organic revenue growth is a non-GAAP measure.
Slide 54: 2020 Success Factors
2020 Success Factors Prudent Cost Business Resilience Maintenance 8.2% Organic Revenue Growth +300 bps Adjusted Operating Margin Increase 10.4% License-Based 3.2% Opex Growth (Ex M&A)* Organic Revenue Growth Organic revenue growth is a non-GAAP measure. *Excluding the impacts from DBRS Morningstar a
Slide 55: 2020 Success Factors
2020 Success Factors Prudent Cost Capital Deployment Business Resilience Maintenance & Cash Flow 8.2% Organic Revenue Growth +300 bps $74.5 mil Adjusted Operating M&A / Equity Method Investments Margin Increase 10.4% License-Based 3.2% Opex Growth (Ex M&A)* $308 mil Free Cash Flow Organic Revenue Gr
Slide 56: Q1 2021 Performance
Q1 2021 Performance ($mil) Revenue Operating Income Adjusted Free Cash Flow* Operating Income* ＋21.2% ＋50.3% ＋51.0% ＋23.5% 20 21 20 21 20 21 20 21 $324.0 $392.8 $44.5 $67.2 $61.4 $92.3 $33.6 $41.5 *Adjusted operating income and free cash flow are non-GAAP financial measures.
Slide 57: A Successful Long-Term Operating Model
A Successful Long-Term Operating Model Revenue Strong and Growing Recurring Base 2 License-Based 67.3% Leverage to Market Conditions Transaction-Based 16.6% Organic Focus Asset-Based 16.1% Operating Expense Weighted to Compensation & Benefits 2 Comp. & Benefits 65.1% Leverage in Cost Structure Other
Slide 58: Our Four Strategic Priorities
Our Four Strategic Priorities Differentiation Scale Deliver differentiated insights across Drive operational excellence and asset classes to public and private scalability to support growth targets. market investors. Sustainability Talent Establish leading ESG positions Build an inclusive culture that
Slide 59: Delivering Differentiated Insights
Delivering Differentiated Insights Morningstar Data Morningstar Direct Other Investment Management DBRS Morningstar Advisor Workstation Morningstar Research Individual PitchBook Workplace Office Sustainalytics Indexes 2020 Revenue Growth High Low
Slide 60: Delivering Differentiated Insights
Delivering Differentiated Insights Morningstar Data Morningstar Direct Other Investment Management DBRS Morningstar Advisor Workstation Morningstar Research Individual PitchBook Workplace Office Sustainalytics Indexes 2020 Revenue Growth High Low
Slide 61: Delivering Differentiated Insights
Delivering Differentiated Insights Data & Research Capitalized Software Spend ($mil)* Development ($mil) $255 $226 $192 $63 $76 $54 19 20 21 19 20 21 (run-rate)** (run-rate)** * Includes costs such as analyst compensation, direct data purchases, and product development. ** Run-rates for 2021 based on
Slide 62: Drive Operational Excellence and Scalability
Drive Operational Excellence and Scalability Operating Expense as a % of Revenue Expense Categories 2017 2020 COGS1 42.4% 40.0% Sales & Marketing 14.7% 14.9% G&A2 14.2% 16.5% D&A3 7.4% 5.8% Profitablitiy Operating Margin 18.6% 15.5% Adj. Operating Margin 21.2% 22.8% 17 20 1. Adjusted COGS excludes M
Slide 63: Drive Operational Excellence and Scalability
Drive Operational Excellence and Scalability Operating Expense as a % of Revenue Future Focus Areas for Scale Technology & System Infrastructure Expense Categories 2017 2020 Cloud Computing COGS1 42.4% 40.0% Production & Development Costs Sales & Marketing 14.7% 14.9% Go-To-Market Capabilities G&A2
Slide 64: Establish Leading ESG Position By Example
Establish Leading ESG Position By Example OMaterial topic OAdditional topics prioritized by employees and stakeholders Issue areas in the top right quadrant are considered most material to Morningstar. %XVLQHVV (WKLFV Material Topics 6LJQLīFDQW Business Ethics Data and ,QIRUPDWLRQ 6HFXULW\ *RYHUQDQF
Slide 65: Our Four Strategic Priorities
Our Four Strategic Priorities Talent Build an inclusive culture that drives exceptional talent engagement and development.
Slide 66: Our Path to ESG Leadership
Our Path to ESG Leadership Michael Jantzi Founder of Sustainalytics, a Morningstar company
Slide 67: Our Path to ESG Leadership Began Over a Decade Ago
Our Path to ESG Leadership Began Over a Decade Ago 2009 2013 2016 2017 2018 2019 2020 Morningstar Analyst Morningstar Morningstar Morningstar Morningstar Risk-focused enhancement Morningstar Rating™ Quantitative Sustainability acquires a acquires FundVotes to Sustainability Rating acquires on Social
Slide 68: Sustainalytics Overview
Sustainalytics Overview
Slide 69: Who We Are
Who We Are Toronto London Stockholm Tokyo New York Paris Copenhagen Sydney Boston Frankfurt Zielena Gora (Poland) Washington DC Amsterdam Bucharest, Timisoara (Romania) Brussels 2 2 2 900+ Team Members 54% 54 49 Nationalities Languages Spoken 350+ Analysts 64% Women Women in senior 135 Client 36% Me
Slide 70: Sustainable Finance Ecosystem
Sustainable Finance Ecosystem 2 Investors Investors Empowering investors (the owners and managers of capital) to create Financial Financial Intermediaries portfolios that align with a more Helping banks, insurers, brokers, just and sustainable world. Intermediaries exchanges and other platforms to o
Slide 71: Who We Serve: Investors and Corporates
Who We Serve: Investors and Corporates Investors Corporates Client Types by Segments Regional Breakdown of Corporate Clients 2 Asset Managers 60% 2 Americas 49% Asset Owners 15% EMEA 36% Wealth Managers 10% APAC 15% Other 15% 430+ Corporate Issuer Clients Worldwide Clients by Regions Regional Breakd
Slide 72: What We Do
What We Do Investors Corporates ESG Research Positive Impact Stewardship Sustainable Finance Solutions ESG Risk Ratings Sustainable Products Research Engagement Services Green, Social, Sustainability Bonds Second Party Opinions EU Action Plan Solutions Impact Metrics ESG Voting Policy Overlay Climat
Slide 73: ESG Investment Value Chain
ESG Investment Value Chain Pre-Investment Investment Post-Investment ESG Risk Analysis & Integration Portfolio Construction Stewardship Screening Portfolio Analytics Proxy Voting Product Development Product Creation Reporting & Compliance
Slide 74: Market Leading ESG Risk Rating and Research
Market Leading ESG Risk Rating and Research Exposure Starting point is a company’s exposure to material ESG issues. Manageable Risk Some companies have unmanageable risks, e.g. an oil company will face climate-related risks even through Unmanageable Risks its transition to a less carbon-intensive bu
Slide 75: Market Leading ESG Risk Rating and Research
Market Leading ESG Risk Rating and Research Exposure Starting point is a company’s exposure to material ESG issues. Manageable Risk Some companies have unmanageable risks, e.g. an oil company will face climate-related risks even through Unmanageable Risks its transition to a less carbon-intensive bu
Slide 76: Ratings, Research, and Data Available for Multiple Use Cases
Making Our Ratings, Research, and Data Available for Multiple Use Cases State Style BNY Client Type Use Cases Morningstar Bloomberg Factset Street Aladdin Analytics Axioma Evestment Caissa Mellon Rimes Portfolio Managers Stock Selection Portfolio Analysis Portfolio Reporting Risk Management Traders
Slide 77: Sustainalytics Has Supported 600+ Sustainable Bonds
Sustainalytics Has Supported 600+ Sustainable Bonds 262+ 172+ Europe 8+ 175+ North America Middle East Asia Pacific 47+ Latin Americas
Slide 78: Rapid Growth in Core ESG & Sustainable Finance Solutions
Rapid Growth in Core ESG & Sustainable Finance Solutions Sustainalytics Total Sales* ($mil) $67.6 Investors Corporates 2013 2014 2015 2016 2017 2018 2019 2020 * Sales is a Non-GAAP measure of aggregate annualized contract value during a given year, and includes both recurring and non-recurring items
Slide 79: Looking Ahead: Growth of the ESG Market Is Robust
Looking Ahead: Growth of the ESG Market Is Robust
Slide 80: Sustainable Investing Continues to Grow
Market Trends: Sustainable Investing Continues to Grow Signatory Assets Under Management Source: UN PRI
Slide 81: Sustainable Fund Flows are Increasing
Market Trends: Sustainable Fund Flows are Increasing Quarterly Global Sustainable Fund Flows 200 Europe U.S. Rest of the World 150 100 (USD Billions) 50 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2018 2019 2020 2021 Source: Morningstar
Slide 82: Sustainable Finance Market Continues to Expand
Market Trends: Sustainable Finance Market Continues to Expand Global Sustainable Debt Issuance 800 Green Bonds Sustainability Bonds Social Bonds 600 Green Loans Sustainability-Linked Loans Issuance (USD Billions) Sustainability-Linked Bonds 400 200 2012 2013 2014 2015 2016 2017 2018 2019 2020 Source
Slide 83: ESG Regulatory Initiatives are Serving as Tailwinds
ESG Regulatory Initiatives are Serving as Tailwinds Robust Regulatory Environment Corporate Disclosure Standards
Slide 84: The New Sustainability: Morningstar + Sustainalytics
The New Sustainability: Morningstar + Sustainalytics = ESG Leadership
Slide 85: Across All Relevant Channels
Morningstar and Sustainalytics: Across All Relevant Channels The Market Standard Across: Core Investor Audiences: Asset Classes: Investment Vehicles: Audience Workflows: Individual Investors Equity Securities Create Financial Advisors Fixed Income Funds Manage Wealth Managers Private Markets Portfol
Slide 86: Empower All Investor Workflows
Sustainalytics + Morningstar Empower All Investor Workflows Pre-Investment Investment Post-Investment
Slide 87: 2021 Product Portfolio: Strategic Innovation Priorities
2021 Product Portfolio: Strategic Innovation Priorities EU Action Plan Impact Offering Solutions Supply Chain ESG Carbon Solutions Assessments
Slide 88: Walking the Talk
Walking the Talk
Slide 89: 2020 Morningstar Enterprise Sustainability Report
2020 Morningstar Enterprise Sustainability Report
Slide 90: Transforming Values into Core Competencies
Transforming Values into Core Competencies OUR MISSION Empowering investor success Transform Morningstar’s values Reinforce and communicate the Position for ESG leadership in the into core competencies firm’s sustainability strategy financial services industry Support Enterprise Sustainability Worki
Slide 91: Slide 91
Slide 92: Appendix: Reconciliation of Non-GAAP Measures
Appendix: Reconciliation of Non-GAAP Measure with the Nearest Comparable GAAP Measure
Slide 93: Reconciliation to adjusted operating income
Reconciliation from operating income to adjusted operating income: ($mil) 2017 2018 2019 2020 Consolidated revenue growth 14.2% 11.9% 15.6% 17.9% Adoption of accounting changes/ M&A 6.6% 0.1% 8.4% 9.5% Effect of foreign currency translations — 0.4% (1.2%) 0.2% Organic revenue growth 7.6% 11.4% 8.4% 8
Slide 94: Reconciliation to organic revenue growth
Reconciliation from consolidated revenue growth to organic revenue growth: ($mil) 2017 2018 2019 2020 GAAP operating income $169.8 $215.8 $189.6 $215.2 M&A costs — — 7.2 14.9 All intangible amortization 23.6 20.7 36.5 58.8 Earn-out — — — 27.8 Adjusted operating income $193.4 $236.5 $233.3 $316.7
Slide 95: Reconciliation to adjusted operating margin
Reconciliation from operating margin to adjusted operating margin: ($mil) 2017 2018 2019 2020 Operating margin 18.6% 21.2% 16.1% 15.5% add: intangible amortization expense 2.6% 2.0% 3.7% 7.3% and all M&A-related expenses Adjusted operating margin 21.2% 23.2% 19.8% 22.8%
Slide 96: Reconciliation to free cash flow
Reconciliation from cash provided by operating activities to free cash flow: ($mil) 2017 2018 2019 2020 Cash provided by operating activities $250.1 $314.8 $334.4 $384.3 Capital expenditures (66.6) (76.1) (80.0) (76.7) Free cash flow 183.5 238.7 254.4 307.6