Morgana hugs him back. She's a little less awkward at it than he is, because this is what she grew up with, easy affection, and hugs whenever she wanted one.

She thinks of the previous New Year's, one where her father was home, and does to Arthur, the same thing she did to her father. She gives him a very proper, very sweet little kiss on the cheek. Her father always said starting off the New Year like that was good luck.