Investments and Fair Value Measurements

12 Months Ended

Dec. 31, 2019

We classify our investments into three categories: available-for-sale, held-to-maturity, and trading. Our investment portfolio consists of stocks, bonds, options, mutual funds, money market funds, or exchange-traded products that replicate the model portfolios and strategies created by Morningstar. These investment accounts may also include exchange-traded products where Morningstar is an index provider. We classify our investment portfolio as shown below:



	As of December 31
(in millions)	2019		2018
Available-for-sale	$	25.8	$	20.1
Held-to-maturity	2.3		2.5
Trading securities	5.3		4.0
Total	$	33.4	$	26.6

The following table shows the cost, unrealized gains (losses), and fair values related to investments classified as available-for-sale and held-to-maturity:



	As of December 31, 2019								As of December 31, 2018
(in millions)	Cost		Unrealized Gain		Unrealized Loss		Fair Value		Cost		Unrealized Gain		Unrealized Loss			Fair Value
Available-for-sale:
Equity securities and exchange-traded funds	$	19.0	$	2.9	$	—	$	21.9	$	17.9	$	1.2	$	(1.8	)	$	17.3
Mutual funds	3.7		0.2		—		3.9		3.0		—		(0.2		)	2.8
Total	$	22.7	$	3.1	$	—	$	25.8	$	20.9	$	1.2	$	(2.0	)	$	20.1

Held-to-maturity:
Certificates of deposit	$	2.3	$	—	$	—	$	2.3	$	2.5	$	—	$	—		$	2.5
Total	$	2.3	$	—	$	—	$	2.3	$	2.5	$	—	$	—		$	2.5

As of December 31, 2019 and December 31, 2018, investments with unrealized losses for greater than a 12-month period were not material to the Consolidated Balance Sheets and were not deemed to have other than temporary declines in value.

The table below shows the cost and fair value of investments classified as available-for-sale and held-to-maturity based on their contractual maturities as of December 31, 2019 and December 31, 2018.



	As of December 31, 2019				As of December 31, 2018
(in millions)	Cost		Fair Value		Cost		Fair Value
Available-for-sale:
Equity securities, exchange-traded funds, and mutual funds	$	22.7	$	25.8	$	20.9	$	20.1
Total	$	22.7	$	25.8	$	20.9	$	20.1

Held-to-maturity:
Due in one year or less	$	2.3	$	2.3	$	2.3	$	2.3
Due in one to three years	—		—		0.2		0.2
Total	$	2.3	$	2.3	$	2.5	$	2.5

The following table shows the realized gains and losses arising from sales of our investments classified as available-for-sale recorded in our Consolidated Statements of Income:



(in millions)	2019		2018			2017
Realized gains	$	1.2	$	1.8		$	3.4
Realized losses	—		(0.8		)	(0.2		)
Realized gains, net	$	1.2	$	1.0		$	3.2

We determine realized gains and losses using the specific identification method.

The following table shows the net unrealized (losses) gains on trading securities as recorded in our Consolidated Statements of Income:



(in millions)	2019		2018			2017
Unrealized (losses) gains, net	$	0.6	$	(0.2	)	$	0.1

The table below shows the fair value of our assets subject to fair value measurements that are measured at fair value on a recurring basis using the fair value hierarchy:


Level 1:	Valuations based on quoted prices in active markets for identical assets or liabilities that we have the ability to access.


Level 2:	Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.


Level 3:	Valuations based on inputs that are unobservable and significant to the overall fair value measurement.



	Fair Value		Fair Value Measurements as of December 31, 2019
	as of		Using Fair Value Hierarchy
(in millions)	December 31, 2019		Level 1		Level 2		Level 3
Available-for-sale investments
Equity securities and exchange-traded funds	$	21.9	$	21.9	$	—	$	—
Mutual funds	3.9		3.9		—		—
Trading securities	5.3		5.3		—		—
Cash equivalents	0.9		0.9		—		—
Total	$	32.0	$	32.0	$	—	$	—



	Fair Value		Fair Value Measurements as of December 31, 2018
	as of		Using Fair Value Hierarchy
(in millions)	December 31, 2018		Level 1		Level 2		Level 3
Available-for-sale investments
Equity securities and exchange-traded funds	$	17.3	$	17.3	$	—	$	—
Mutual funds	2.8		2.8		—		—
Trading securities	4.0		4.0		—		—
Cash equivalents	0.1		0.1		—		—
Total	$	24.2	$	24.2	$	—	$	—

Based on our analysis of the nature and risks of our investments in equity securities and mutual funds and exchange-traded funds, we have determined that presenting each of these investment categories in the aggregate is appropriate.

We measure the fair value of money market funds, mutual funds, equity securities, and exchange-traded funds based on quoted prices in active markets for identical assets or liabilities. We did not hold any securities categorized as Level 2 or Level 3 as of December 31, 2019 and December 31, 2018.