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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

_________________________________________________


x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~February 28,~~November 30, 2022


☐			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: 1-11869

FACTSET RESEARCH SYSTEMS INC.

(Exact name of registrant as specified in its charter)

_________________________________________________


Delaware			13-3362547
(State or other jurisdiction of ~~incorporation)~~incorporation or organization)			(I.R.S. Employer Identification No.)


45 Glover Avenue, Norwalk, Connecticut			06850
(Address of principal executive ~~office)~~offices)			(Zip Code)

Registrant’s telephone number, including area code: (203) 810-1000

Former name, former address and former fiscal year, if changed since last report: None

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbols(s)	Name of each exchange on which registered
Common Stock, $0.01 Par Value	FDS	New York Stock Exchange LLC
		The Nasdaq Stock Market

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 ☐

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 and post such files). Yes x No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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 x Accelerated filer ☐ Non-accelerated filer ☐ 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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No x

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date:

The number of shares outstanding of the registrant’s common stock, $.01 par value, as of ~~March 28,~~December 27, 2022 wwa~~as 37,896,579.~~s 38,251,828.

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FactSet Research Systems Inc.

Form 10-Q

For the Quarter Ended ~~February 28,~~November 30, 2022

Index


		Page
Part I	FINANCIAL INFORMATION
Item 1.	Financial Statements
	Consolidated Statements of Income for the three ~~and six~~ months ended ~~February 28,~~November 30, 2022 and 2021	4
	Consolidated Statements of Comprehensive Income for the three ~~and six~~ months ended ~~February 28,~~November 30, 2022 and 2021	5
	Consolidated Balance Sheets at ~~February 28,~~November 30, 2022 and August 31, ~~2021~~2022	6
	Consolidated Statements of Cash Flows for the ~~six~~three months ended ~~February 28,~~November 30, 2022 and 2021	7
	Consolidated Statements of Changes in Stockholders’ Equity for the three ~~and six~~ months ended ~~February 28,~~November 30, 2022 and 2021	8

	Notes to the Consolidated Financial Statements	109
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3330
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	5047
Item 4.	Controls and Procedures	5249
Part II	OTHER INFORMATION
Item 1.	Legal Proceedings	5249
Item 1A.	Risk Factors	5249
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	5349
Item 3.	Defaults Upon Senior Securities	5350
Item 4.	Mine Safety Disclosures	5350
Item 5.	Other Information	5350
Item 6.	Exhibits	5350
	Signatures	5552

For additional information about FactSet Research Systems Inc. and access to its Annual Reports to Stockholders and Securities and Exchange Commission filings, free of charge, please visit FactSet’s website (https://investor.factset.com). Any information on or linked from the website is not incorporated by reference into this Quarterly Report on Form 10-Q.

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Special Note Regarding Forward-Looking Statements

FactSet Research Systems Inc. has made statements under the captions Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations, Part II, Item 1A. Risk Factors, and in other sections of this Quarterly Report on Form 10-Q for the three ~~and six~~ months ended ~~February 28,~~November 30, 2022, that are forward-looking statements. In some cases, you can identify these statements by words such as "may," "might," "will," "should," "expects," "plans," "anticipates," "believes," "estimates," "intends," "projects," "indicates," "predicts," "potential," or "continue," and similar expressions.

These forward-looking statements, which are subject to risks, uncertainties and assumptions about us, may include projections of our future financial performance and anticipated trends in our business. These statements are only predictions based on our current expectations, estimates, forecasts and projections about future events. These statements are not guarantees of future performance and involve a number of risks, uncertainties and assumptions. There are many important factors that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements, including the numerous factors discussed under Item 1A. Risk Factors in our Annual Report on Form 10-K for the fiscal year ended August 31, ~~2021,~~2022, that should be specifically considered.

Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. Forward-looking statements speak only as of the date they are made, and actual results could differ materially from those anticipated in forward-looking statements. We do not intend, and are under no duty, to update any of these forward-looking statements after the date of this Quarterly Report on Form 10-Q to reflect actual results, future events or circumstances, or revised expectations.

We intend that all forward-looking statements we make will be subject to safe harbor protection of the federal securities laws as found in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.

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PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

FactSet Research Systems Inc.

CONSOLIDATED STATEMENTS OF INCOME – Unaudited


		Three Months Ended				Six Months Ended					Three Months Ended
		February 28,				February 28,					November 30,
(In thousands, except per share data)	(In thousands, except per share data)	2022		2021		2022		2021		(In thousands, except per share data)	2022		2021
Revenues	Revenues	$	431,119	$	391,788	$	855,844	$	779,993	Revenues	$	504,815	$	424,725
Operating expenses	Operating expenses									Operating expenses
Cost of services	Cost of services	199,395		195,523		406,544		383,611		Cost of services	227,042		207,131
Selling, general and administrative	Selling, general and administrative	108,376		80,132		203,291		159,219		Selling, general and administrative	105,596		91,238
Asset impairments										Asset impairments	282		3,695
Total operating expenses	Total operating expenses	307,771		275,655		609,835		542,830		Total operating expenses	332,920		302,064

Operating income	Operating income	123,348		116,133		246,009		237,163		Operating income	171,895		122,661

Other income (expense), net	Other income (expense), net									Other income (expense), net
Interest expense, net	Interest expense, net	(1,673)		(1,814)		(3,167)		(2,843)		Interest expense, net	(14,332)		(1,494)
Other income (expense), net	Other income (expense), net	281		347		(956)		578		Other income (expense), net	322		(1,237)
Total other income (expense), net										Total other income (expense), net	(14,010)		(2,731)

Income before income taxes	Income before income taxes	121,956		114,666		241,886		234,898		Income before income taxes	157,885		119,930

Provision for income taxes	Provision for income taxes	12,018		18,023		24,301		37,049		Provision for income taxes	21,087		12,283
Net income	Net income	$	109,938	$	96,643	$	217,585	$	197,849	Net income	$	136,798	$	107,647

Basic earnings per common share	Basic earnings per common share	$	2.91	$	2.55	$	5.77	$	5.21	Basic earnings per common share	$	3.59	$	2.86
Diluted earnings per common share	Diluted earnings per common share	$	2.84	$	2.50	$	5.63	$	5.12	Diluted earnings per common share	$	3.52	$	2.79

Basic weighted average common shares	Basic weighted average common shares	37,837		37,916		37,685		37,961		Basic weighted average common shares	38,122		37,678
Diluted weighted average common shares	Diluted weighted average common shares	38,761		38,620		38,628		38,658		Diluted weighted average common shares	38,914		38,641

The accompanying notes are an integral part of these Consolidated Financial Statements.

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FactSet Research Systems Inc.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME – Unaudited


		Three Months Ended				Six Months Ended					Three Months Ended
		February 28,				February 28,					November 30,
(In thousands)	(In thousands)	2022		2021		2022		2021		(In thousands)	2022		2021
Net income	Net income	$	109,938	$	96,643	$	217,585	$	197,849	Net income	$	136,798	$	107,647

Other comprehensive income (loss), net of tax	Other comprehensive income (loss), net of tax									Other comprehensive income (loss), net of tax
Net unrealized gain on cash flow hedges*		4,805		1,303		4,810		1,187
Foreign currency translation adjustment (losses) gains		(2,983)		9,277		(21,696)		9,610
Net unrealized gain (loss) on cash flow hedges*										Net unrealized gain (loss) on cash flow hedges*	6,555		5
Foreign currency translation adjustment gains (losses)										Foreign currency translation adjustment gains (losses)	8,769		(18,713)
Other comprehensive income (loss)	Other comprehensive income (loss)	1,822		10,580		(16,886)		10,797		Other comprehensive income (loss)	15,324		(18,708)
Comprehensive income	Comprehensive income	$	111,760	$	107,223	$	200,699	$	208,646	Comprehensive income	$	152,122	$	88,939

*For the three ~~and six~~ months ended ~~February 28,~~November 30, 2022 ~~the net unrealized gain on cash flow hedges were net of a tax expense of $468 thousand~~ and ~~a tax expense of $469 thousand, respectively. For the three and six months ended February 28,~~ 2021, the net unrealized gain on cash flow hedges were net of a tax expense of ~~$441~~$2,264 thousand and ~~a tax expense of $400~~$1 thousand, respectively.

The accompanying notes are an integral part of ~~these~~these Consolidated Financial Statements.

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FactSet Research Systems Inc.

CONSOLIDATED BALANCE SHEETS – Unaudited


(In thousands, except share data)	(In thousands, except share data)	February 28, 2022		August 31, 2021		(In thousands, except share data)	November 30, 2022		August 31, 2022
ASSETS	ASSETS					ASSETS
Cash and cash equivalents	Cash and cash equivalents	$	773,012	$	681,865	Cash and cash equivalents	$	437,142	$	503,273
Investments	Investments	34,984		35,984		Investments	32,572		33,219
Accounts receivable, net of reserves of $4,263 at February 28, 2022 and $6,431 at August 31, 2021		188,308		151,187
Accounts receivable, net of reserves of $3,532 at November 30, 2022 and $2,776 at August 31, 2022						Accounts receivable, net of reserves of $3,532 at November 30, 2022 and $2,776 at August 31, 2022	227,489		204,102
Prepaid taxes	Prepaid taxes	36,569		13,917		Prepaid taxes	32,178		38,539
Prepaid expenses and other current assets	Prepaid expenses and other current assets	57,786		50,625		Prepaid expenses and other current assets	99,826		91,214
Total current assets	Total current assets	1,090,659		933,578		Total current assets	829,207		870,347
Property, equipment and leasehold improvements, net	Property, equipment and leasehold improvements, net	114,789		131,377		Property, equipment and leasehold improvements, net	79,296		80,843
Goodwill	Goodwill	786,172		754,205		Goodwill	974,846		965,848
Intangible assets, net	Intangible assets, net	135,042		134,986		Intangible assets, net	1,882,983		1,895,909
Deferred taxes	Deferred taxes	2,169		2,250		Deferred taxes	3,653		3,153
Lease right-of-use assets, net	Lease right-of-use assets, net	206,237		239,064		Lease right-of-use assets, net	154,125		159,458
Other assets	Other assets	39,089		29,480		Other assets	53,430		38,747
TOTAL ASSETS	TOTAL ASSETS	$	2,374,157	$	2,224,940	TOTAL ASSETS	$	3,977,540	$	4,014,305
LIABILITIES	LIABILITIES					LIABILITIES
Accounts payable and accrued expenses	Accounts payable and accrued expenses	$	90,262	$	85,777	Accounts payable and accrued expenses	$	122,710	$	108,395

Current lease liabilities	Current lease liabilities	31,010		31,576		Current lease liabilities	28,970		29,185
Accrued compensation	Accrued compensation	68,749		104,403		Accrued compensation	48,067		114,808
Deferred revenues	Deferred revenues	72,152		63,104		Deferred revenues	150,264		152,039
Dividends payable	Dividends payable	31,065		30,845		Dividends payable	34,010		33,860
Total current liabilities	Total current liabilities	293,238		315,705		Total current liabilities	384,021		438,287
Long-term debt	Long-term debt	574,625		574,535		Long-term debt	1,859,096		1,982,424
Deferred taxes	Deferred taxes	15,018		14,752		Deferred taxes	10,991		8,800
Deferred revenues, non-current	Deferred revenues, non-current	7,233		8,394		Deferred revenues, non-current	8,697		7,212
Taxes payable	Taxes payable	31,002		30,279		Taxes payable	35,334		34,211
Long-term lease liabilities	Long-term lease liabilities	233,275		259,980		Long-term lease liabilities	201,964		208,622
Other liabilities	Other liabilities	3,785		4,942		Other liabilities	3,309		3,341
TOTAL LIABILITIES	TOTAL LIABILITIES	$	1,158,176	$	1,208,587	TOTAL LIABILITIES	$	2,503,412	$	2,682,897
Commitments and contingencies (see Note 12)	Commitments and contingencies (see Note 12)	0		0		Commitments and contingencies (see Note 12)
STOCKHOLDERS’ EQUITY	STOCKHOLDERS’ EQUITY					STOCKHOLDERS’ EQUITY
Preferred stock, $0.01 par value, 10,000,000 shares authorized, none issued	Preferred stock, $0.01 par value, 10,000,000 shares authorized, none issued	$	—	$	—	Preferred stock, $0.01 par value, 10,000,000 shares authorized, none issued	$	—	$	—
Common stock, $0.01 par value, 150,000,000 shares authorized, 41,485,261 and 41,163,192 shares issued, 37,883,866 and 37,615,419 shares outstanding at February 28, 2022 and August 31, 2021, respectively		415		412
Common stock, $0.01 par value; 150,000,000 shares authorized; 41,848,430 and 41,653,218 shares issued; 38,214,108 and 38,044,756 shares outstanding at November 30, 2022 and August 31, 2022, respectively						Common stock, $0.01 par value; 150,000,000 shares authorized; 41,848,430 and 41,653,218 shares issued; 38,214,108 and 38,044,756 shares outstanding at November 30, 2022 and August 31, 2022, respectively	418		417
Additional paid-in capital	Additional paid-in capital	1,131,166		1,048,305		Additional paid-in capital	1,225,947		1,190,350
Treasury stock, at cost: 3,601,395 and 3,547,773 shares at February 28, 2022 and August 31, 2021, respectively		(927,814)		(905,917)
Treasury stock, at cost: 3,634,322 and 3,608,462 shares at November 30, 2022 and August 31, 2022, respectively						Treasury stock, at cost: 3,634,322 and 3,608,462 shares at November 30, 2022 and August 31, 2022, respectively	(941,705)		(930,715)
Retained earnings	Retained earnings	1,068,062		912,515		Retained earnings	1,282,527		1,179,739
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(55,848)		(38,962)		Accumulated other comprehensive loss	(93,059)		(108,383)
TOTAL STOCKHOLDERS’ EQUITY	TOTAL STOCKHOLDERS’ EQUITY	$	1,215,981	$	1,016,353	TOTAL STOCKHOLDERS’ EQUITY	$	1,474,128	$	1,331,408
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	2,374,157	$	2,224,940	TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	3,977,540	$	4,014,305

The accompanying notes are an integral part of these Consolidated Financial Statements.

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FactSet Research Systems Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS – Unaudited


		Six Months Ended					Three Months Ended
		February 28,					November 30,
(in thousands)	(in thousands)	2022		2021		(in thousands)	2022		2021
CASH FLOWS FROM OPERATING ACTIVITIES	CASH FLOWS FROM OPERATING ACTIVITIES					CASH FLOWS FROM OPERATING ACTIVITIES
Net income	Net income	$	217,585	$	197,849	Net income	$	136,798	$	107,647
Adjustments to reconcile net income to net cash provided by operating activities	Adjustments to reconcile net income to net cash provided by operating activities					Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization	Depreciation and amortization	32,827		30,962		Depreciation and amortization	25,997		17,208
Amortization of lease right-of-use assets	Amortization of lease right-of-use assets	22,172		21,517		Amortization of lease right-of-use assets	9,697		11,117
Stock-based compensation expense	Stock-based compensation expense	25,937		22,327		Stock-based compensation expense	12,175		10,401
Deferred income taxes	Deferred income taxes	(3,264)		(2,802)		Deferred income taxes	(745)		1,507
Impairment charge		13,987		—
Asset impairments						Asset impairments	282		3,695

Changes in assets and liabilities, net of effects of acquisitions	Changes in assets and liabilities, net of effects of acquisitions					Changes in assets and liabilities, net of effects of acquisitions
Accounts receivable, net of reserves	Accounts receivable, net of reserves	(37,704)		(15,421)		Accounts receivable, net of reserves	(23,647)		(5,268)
Accounts payable and accrued expenses	Accounts payable and accrued expenses	10,183		(724)		Accounts payable and accrued expenses	18,744		20,702
Accrued compensation	Accrued compensation	(34,680)		(20,879)		Accrued compensation	(66,796)		(53,457)
Deferred fees		6,201		12,445
Deferred revenues						Deferred revenues	(290)		(10,248)
Taxes payable, net of prepaid taxes	Taxes payable, net of prepaid taxes	(21,824)		16,688		Taxes payable, net of prepaid taxes	6,995		(9,524)
Lease liabilities, net	Lease liabilities, net	(23,863)		(20,549)		Lease liabilities, net	(11,237)		(11,992)
Other, net	Other, net	(12,605)		(11,477)		Other, net	(1,337)		(8,870)
Net cash provided by operating activities	Net cash provided by operating activities	194,952		229,936		Net cash provided by operating activities	106,636		72,918

CASH FLOWS FROM INVESTING ACTIVITIES	CASH FLOWS FROM INVESTING ACTIVITIES					CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property, equipment, leasehold improvements and internal-use software	Purchases of property, equipment, leasehold improvements and internal-use software	(20,546)		(28,758)		Purchases of property, equipment, leasehold improvements and internal-use software	(17,960)		(8,583)
Acquisition of businesses, net of cash and cash equivalents acquired	Acquisition of businesses, net of cash and cash equivalents acquired	(50,018)		(41,916)		Acquisition of businesses, net of cash and cash equivalents acquired	—		(50,018)
Purchases of investments	Purchases of investments	(250)		(1,250)		Purchases of investments	(9,892)		(250)
Proceeds from maturity or sale of investments		—		2,176

Net cash used in investing activities	Net cash used in investing activities	(70,814)		(69,748)		Net cash used in investing activities	(27,852)		(58,851)

CASH FLOWS FROM FINANCING ACTIVITIES	CASH FLOWS FROM FINANCING ACTIVITIES					CASH FLOWS FROM FINANCING ACTIVITIES
Repurchases of common stock		(18,639)		(114,640)

Repayment of debt						Repayment of debt	(125,000)		—

Dividend payments	Dividend payments	(61,448)		(58,186)		Dividend payments	(33,665)		(30,656)
Proceeds from employee stock plans	Proceeds from employee stock plans	56,928		28,526		Proceeds from employee stock plans	23,423		35,763

Repurchases of common stock						Repurchases of common stock	—		(18,639)
Other financing activities	Other financing activities	(3,258)		(2,359)		Other financing activities	(10,990)		(2,950)
Net cash used by financing activities		(26,417)		(146,659)
Net cash provided by / (used in) financing activities						Net cash provided by / (used in) financing activities	(146,232)		(16,482)

Effect of exchange rate changes on cash and cash equivalents	Effect of exchange rate changes on cash and cash equivalents	(6,574)		3,550		Effect of exchange rate changes on cash and cash equivalents	1,317		(5,550)
Net increase in cash and cash equivalents		91,147		17,079
Net increase (decrease) in cash and cash equivalents						Net increase (decrease) in cash and cash equivalents	(66,131)		(7,965)
Cash and cash equivalents at beginning of period	Cash and cash equivalents at beginning of period	681,865		585,605		Cash and cash equivalents at beginning of period	503,273		681,865
Cash and cash equivalents at end of period	Cash and cash equivalents at end of period	$	773,012	$	602,684	Cash and cash equivalents at end of period	$	437,142	$	673,900

The accompanying notes are an integral part of these Consolidated Financial Statements.

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FactSet Research Systems Inc.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY- Unaudited

For the Three Months Ended ~~February 28,~~November 30, 2022


(in thousands, except share data)	(in thousands, except share data)	Common Stock			Additional Paid-in Capital				Treasury Stock						Retained Earnings				Accumulated Other Comprehensive Loss				Total Stockholders’ Equity		(in thousands, except share data)		Common Stock							Additional Paid-in Capital				Treasury Stock				Retained Earnings		Accumulated Other Comprehensive Loss		Total Stockholders’ Equity
		Shares	Par Value				Shares			Amount			Shares																	Par Value							Shares		Amount
Balance as of November 30, 2021		41,372,890	$	414			$	1,094,467		3,600,720			$	(927,505)			$	989,189			$	(57,670)			$	1,098,895
Balance as of August 31, 2022																									Balance as of August 31, 2022		41,653,218				$	417		$	1,190,350			3,608,462		$	(930,715)	$	1,179,739	$	(108,383)	$	1,331,408
Net income	Net income														109,938								109,938		Net income																	136,798				136,798
Other comprehensive loss																			1,822				1,822
Other comprehensive income (loss)																									Other comprehensive income (loss)																			15,324		15,324
Common stock issued for employee stock plans	Common stock issued for employee stock plans	111,360	1		21,163				260		(128)												21,036		Common stock issued for employee stock plans		131,423				1			23,422				410		(166)						23,257
Vesting of restricted stock	Vesting of restricted stock	1,011	—						415		(181)												(181)		Vesting of restricted stock		63,789				—							25,450		(10,824)						(10,824)
Repurchases of common stock	Repurchases of common stock								0		0												—		Repurchases of common stock																					—
Stock-based compensation					15,536																		15,536
Stock-based compensation expense																									Stock-based compensation expense									12,175												12,175
Dividends declared	Dividends declared														(31,065)								(31,065)		Dividends declared																	(34,010)				(34,010)
Balance as of February 28, 2022		41,485,261	$	415	$	1,131,166			3,601,395		$	(927,814)			$	1,068,062			$	(55,848)			$	1,215,981
Balance as of November 30, 2022																									Balance as of November 30, 2022		41,848,430				$	418		$	1,225,947			3,634,322		$	(941,705)	$	1,282,527	$	(93,059)	$	1,474,128

For the Six Months Ended February 28, 2022
(in thousands, except share data)		Common Stock			Additional Paid-in Capital				Treasury Stock						Retained Earnings				Accumulated Other Comprehensive Loss				Total Stockholders’ Equity
		Shares	Par Value				Shares			Amount
Balance as of August 31, 2021		41,163,192	$	412			$	1,048,305		3,547,773			$	(905,917)														$	912,515			$	(38,962)		$	1,016,353
Net income															217,585								217,585
Other comprehensive income																			(16,886)				(16,886)
Common stock issued for employee stock plans		303,709	3		56,924				260		(128)												56,799
Vesting of restricted stock		18,360	—						7,162		(3,130)												(3,130)
Repurchases of common stock									46,200		(18,639)												(18,639)
Stock-based compensation					25,937																		25,937
Dividends declared															(62,038)								(62,038)
Balance as of February 28, 2022		41,485,261	$	415	$	1,131,166			3,601,395		$	(927,814)			$	1,068,062			$	(55,848)			$	1,215,981

~~Table of~~ ~~Contents~~

For the Three Months Ended ~~February 28,~~November 30, 2021


(in thousands, except share data)	(in thousands, except share data)	Common Stock			Additional Paid-in Capital				Treasury Stock						Retained Earnings				Accumulated Other Comprehensive Loss				Total Stockholders’ Equity		(in thousands, except share data)		Common Stock							Additional Paid-in Capital				Treasury Stock				Retained Earnings		Accumulated Other Comprehensive Loss		Total Stockholders’ Equity
		Shares	Par Value				Shares			Amount			Shares																	Par Value							Shares		Amount
Balance as of November 30, 2020		40,884,113	$	409			$	968,375		2,875,984			$	(682,224)			$	705,089			$	(39,076)			$	952,573
Balance as of August 31, 2021																									Balance as of August 31, 2021		41,163,192				$	412		$	1,048,305			3,547,773		$	(905,917)	$	912,515	$	(38,962)	$	1,016,353
Net income	Net income														96,643								96,643		Net income																	107,647				107,647
Other comprehensive income																			10,580				10,580
Other comprehensive income (loss)																									Other comprehensive income (loss)																			(18,708)		(18,708)
Common stock issued for employee stock plans	Common stock issued for employee stock plans	58,550	—		10,533				318		(104)												10,429		Common stock issued for employee stock plans		192,349				2			35,761												35,763
Vesting of restricted stock	Vesting of restricted stock	997	—						401		(131)												(131)		Vesting of restricted stock		17,349				—							6,747		(2,949)						(2,949)
Repurchases of common stock	Repurchases of common stock								221,959		(71,495)												(71,495)		Repurchases of common stock													46,200		(18,639)						(18,639)
Stock-based compensation					11,010																		11,010
Stock-based compensation expense																									Stock-based compensation expense									10,401												10,401
Dividends declared	Dividends declared														(29,141)								(29,141)		Dividends declared																	(30,973)				(30,973)

Balance as of February 28, 2021		40,943,660	$	409	$	989,918			3,098,662		$	(753,954)			$	772,591			$	(28,496)			$	980,468
Balance as of November 30, 2021																									Balance as of November 30, 2021		41,372,890				$	414		$	1,094,467			3,600,720		$	(927,505)	$	989,189	$	(57,670)	$	1,098,895

For the Six Months Ended February 28, 2021

(in thousands, except share data)		Common Stock			Additional Paid-in Capital				Treasury Stock						Retained Earnings				Accumulated Other Comprehensive Loss				Total Stockholders’ Equity
		Shares	Par Value				Shares			Amount
Balance as of August 31, 2020		40,767,708	$	408			$	939,067		2,737,456			$	(636,956)														$	633,149			$	(39,293)		$	896,375
Net income															197,849								197,849
Other comprehensive loss																			10,797				10,797
Common stock issued for employee stock plans		157,009	1		28,524				318		(104)												28,421
Vesting of restricted stock		18,943	—						7,129		(2,254)												(2,254)
Repurchases of common stock									353,759		(114,640)												(114,640)
Stock-based compensation					22,327																		22,327
Dividends declared															(58,407)								(58,407)
Balance as of February 28, 2021		40,943,660	$	409	$	989,918			3,098,662		$	(753,954)			$	772,591			$	(28,496)			$	980,468

The accompanying notes are an integral part of these Consolidated Financial Statements.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FactSet Research Systems Inc.

~~February 28,~~November 30, 2022

(Unaudited)


		Page
Note 1	Description of Business	10
Note 2	S ummary of Significant Accounting Poli cies	10
Note 3	Revenue Recognition	11
Note 2 4	~~Basis of Presentation~~	11Fair Value Measures
~~Note 3~~	~~Recent Accounting Pronouncements~~	12
Note 4 5	~~Revenue Recognition~~	12Derivative Instruments
~~Note 5~~	~~Fair Value Measures~~	13
~~Note 6~~	~~Derivative Instruments~~	15
Note 7 6	~~Acquisition~~Acquisitions	17
Note 8 7	Goodwill	18
Note 8	Intangible Assets	21
Note 9	Income Taxes	19
Note 91 0	~~Income Taxes~~	19Leases
~~Note 10~~	~~Leases~~	20
Note 111 1	~~Debt~~	22Debt	21
Note 121 2	Commitments and Contingencies	23
Note 131 3	Stockholders' Equity	25
Note 141 4	Earnings Per Share	26
Note 1 5	Stock-Based Compensation	27
Note 151 6	~~Stock-Based Compensation~~	27Segment Information
~~Note 16~~	~~Segment Information~~	29
~~Note 17~~	~~Subsequent Event~~	30

109

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1. DESCRIPTION OF BUSINESS

FactSet Research Systems Inc. and its wholly-owned subsidiaries (collectively, "we," "our," "us," the "Company" or "FactSet") is a global financial data and analytics company with an open and flexible digital platform ~~which focuses on driving~~that drives the investment community to see more, think bigger and do its best work. Our strategy is to build the leading open content and analytics platform ~~that delivers~~to deliver a differentiated advantage for our clients’ success.

For ~~over 40~~45 years, ~~the FactSet~~our platform has delivered expansive data, sophisticated analytics and flexible technology ~~that~~used by global financial professionals ~~need~~ to power their critical investment workflows. ~~More~~As of November 30, 2022, we had more than~~171,000~~ 7,600 clients comprised of approximately 181,000 investment professionals, including asset managers, ~~asset owners,~~ bankers, wealth managers, asset owners, channel partners, hedge funds, corporate users, private equity and venture capital ~~professionals,~~professionals. Our on- and ~~others use our personalized~~off-platform solutions ~~to identify opportunities, explore ideas, and gain a competitive advantage. Our solutions~~ span the investment lifecycle including investment research, portfolio construction and analysis, trade execution, performance measurement, risk management and ~~reporting across the investment lifecycle.~~reporting. Our revenues are primarily derived from subscriptions to our multi-asset class data and solutions powered by our connected content, referred to as our "content refinery". Our products and services include workstations, portfolio analytics and enterprise solutions.

We provide financial data and market intelligence on securities, companies, industries and people to enable our clients to research investment ideas, as well as ~~offering them the capabilities~~ to analyze, monitor and manage their portfolios. We combine dedicated client service with open and flexible technology offerings, ~~such as~~including a configurable desktop and mobile platform, comprehensive data feeds, cloud-based digital solutions and application programming interfaces ("APIs"). Our ~~revenues are primarily derived from subscriptions to our products~~CUSIP Global Services ("CGS") business supports security master files relied on by the investment industry for critical front, middle and ~~services such as workstations, portfolio analytics, and market data.~~back office functions.

We ~~advance~~drive our ~~industry by comprehensively~~business based on our detailed understanding of our clients’ workflows, ~~solving~~which helps us to solve their most complex ~~challenges, and helping them achieve their goals. By providing~~challenges. We provide them with ~~the leading~~an open ~~content~~digital platform, connected and ~~analytics platform, an expansive universe of concorded~~reliable data, ~~they can trust,~~ next-generation workflow ~~support designed to help them grow~~solutions and ~~see their next best action, and the industry’s most~~highly committed service ~~specialists, we put our clients in a position to outperform.~~specialists.

We ~~are focused on growing~~operate our business through 3three reportable segments ("segments"): the Americas, EMEA and Asia Pacific. Refer to Note 16, Segment Information, for further ~~information. Within~~discussion. For each of our segments, we ~~deliver insight and information~~execute our strategy through ~~our 3 workflows:~~ three workflow solutions: Research & ~~Advisory Solutions;~~Advisory; Analytics & ~~Trading Solutions;~~Trading; and Content & Technology Solutions ("CTS").

2. ~~BASIS~~SUMMARY OF ~~PRESENTATION~~SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

We conduct business globally and manage our business on a geographic basis. The accompanying unaudited Consolidated Financial Statements and Notes to the Consolidated Financial Statements included in this Quarterly Report on Form 10-Q are prepared in accordance with generally accepted accounting principles in the United States ("GAAP") for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all information and footnotes required by GAAP for annual financial ~~statements,~~statements; as such, the information in this Quarterly Report on Form 10-Q should be read in conjunction with the audited Consolidated Financial Statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended August 31, ~~2021.~~2022. The accompanying unaudited Consolidated Financial Statements include our accounts and those of our wholly-owned subsidiaries; all intercompany activity and balances have been eliminated.

In the opinion of management, the accompanying unaudited Consolidated Financial Statements include all normal recurring adjustments, transactions or events discretely impacting the interim periods considered necessary to present fairly our results of o~~perations,~~operations, financial position, cash flows and equity.

Reclassifications

We ~~have evaluated subsequent events through~~reclassified comparative figures for the ~~date~~three months ended November 30, 2021 related to the impairment of ~~issuance~~our lease right-of-use ("ROU") assets and property, equipment and leasehold improvements to Asset impairments in the Consolidated Statements of Income and Consolidated Statements of Cash Flows to conform to the ~~financial statements included in this Quarterly Report on Form 10-Q, refer to Note 17,~~ ~~Subsequent Events~~current year's ~~for more information.~~presentation. The reclassifications to Asset impairments in the Consolidated Statements of Income was from Selling, general and administrative and Cost of services and in the Consolidated Statements of Cash Flows was from Depreciation and amortization and Lease liabilities, net.

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Use of Estimates

The preparation of our Consolidated Financial Statements and related disclosures, in conformity with GAAP, ~~requires~~required management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported ~~amount~~amounts of revenues and expenses during the reporting period. Significant estimates may have been made in areas that include income taxes, stock-based compensation, ~~the valuation of~~ goodwill and ~~allocation of purchase price to acquired~~intangible assets, business combinations, long-lived assets and ~~liabilities, useful lives and impairments of~~

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~~long-lived tangible and intangible assets and~~ ~~reserves for litigation and other contingencies~~.contingencies. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results could differ from those estimates.

Concentrations of Credit Risks

Cash equivalents

Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash and cash equivalents. We are exposed to credit risk for cash and cash equivalents held in financial institutions in the event of a default, to the extent that such amounts are in excess of applicable insurance limits. We have not experienced any losses from maintaining cash accounts in excess of such limits. We do not believe our concentration of cash and cash equivalents presents a significant credit risk as the counterparties to the instruments consist of multiple high-quality, credit-worthy financial institutions.

Accounts Receivable

Our accounts receivable credit risk is dependent upon the financial stability of our individual clients; however, this risk is generally limited due to our large and geographically dispersed client base. No single client represented more than 3% of our total subscription revenues in any period presented. The receivable reserve was $3.5 million and $2.8 million as of November 30, 2022 and August 31, 2022, respectively. We do not require collateral from our clients.

Derivative Instruments

Our use of derivative instruments exposes us to credit risk to the extent counterparties may be unable to meet the terms of their agreements. To mitigate credit risk, we limit counterparties to credit-worthy financial institutions and use several institutions to reduce concentration risk. We do not expect any losses as a result of default by our counterparties.

3.Concentrations of ~~RECENTACCOUNTING PRONOUNCEMENTS~~Data Providers

We integrate data from various third-party sources into our hosted proprietary data and analytics platform, which our clients access to perform their analyses. As certain data sources have a limited number of ~~February 28, 2022,~~suppliers, we ~~implemented all applicable~~make every effort to assure that, where reasonable, alternative sources are available. We are not dependent on any individual third-party data supplier in order to meet the needs of our clients, with only two data suppliers each representing more than 10% of our total data costs for the three months ended November 30, 2022.

Recently Adopted Accounting Pronouncements

We did not adopt any new ~~accounting~~ standards ~~and~~or updates issued by the Financial Accounting Standards Board ("FASB") ~~that were in effect. There were no new standards or updates adopted~~ during the ~~six~~three months ended ~~February 28,~~November 30, 2022 that had a material impact on our Consolidated Financial Statements.

~~New~~ Accounting ~~Standards or Updates Recently~~Pronouncements Not Yet Adopted

~~Income Tax Simplification~~Inflation Reduction Act of 2022

~~In December 2019,~~On August 16, 2022, the ~~FASB issued ASU 2019-12,~~ ~~Income Taxes (Topic 740); Simplifying the Accounting for Income Taxes, to simplify various aspects related to accounting for income taxes, eliminating certain exceptions~~Inflation Reduction Act ("IRA") was signed into law. The IRA contains several revisions to the ~~general principles~~Internal Revenue Code effective in ~~accounting for~~taxable years beginning after December 31, 2022, including a 15% minimum income ~~taxes related to intraperiod~~ tax ~~allocation, simplifying when companies recognize deferred taxes~~on certain large corporations and a 1% excise tax on corporate stock repurchases by publicly traded U.S. corporations. We are in ~~an interim period, and clarifying certain aspects~~the process of evaluating the impact of the ~~current guidance~~IRA. We do not expect this law to ~~promote consistent application. We have adopted this standard effective September 1, 2021. The adoption of this standard did not have an impact on our Consolidated Financial Statements.~~

~~Business Combinations~~

~~In October 2021, the FASB issued ASU No. 2021-08,~~ ~~Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers~~ (“ASU 2021-08”), which requires an acquirer to recognize and measure contract assets and liabilities acquired in a business combination in accordance with Revenue from Contracts with Customers (“Topic 606”) rather than adjust them to fair value at the acquisition date. We elected to early adopt this accounting standard in the second quarter of fiscal 2022, with retrospective application to business combinations that occurred in the current fiscal year. Results of operations for quarterly periods prior to September 1, 2021 remain unchanged as a result of the adoption of ASU No. 2021-08. The acquisition of Cobalt Software, Inc (“Cobalt”), and all future acquisitions, will be accounted for in accordance with ASU 2021-08. Refer to Note 7. ~~Acquisition~~ ~~for further information. The adoption of this standard did not~~ have a material impact on our Consolidated Financial Statements.

~~Recent Accounting Standards or Updates Not Yet Effective~~

~~Facilitation of the Effects of Reference Rate Reform on Financial Reporting~~

~~In March 2020, the FASB issued ASU 2020-04,~~ ~~Reference Rate Reform (Topic 848); Facilitation of the Effects of Reference Rate Reform on Financial Reportin~~g, to provide optional expedients and exceptions for applying GAAP to contract modifications, hedging relationships, and other transactions affected by the anticipated transition from LIBOR. As a result of the reference rate reform initiative, certain widely used reference rates such as LIBOR are expected to be discontinued. The guidance is designed to simplify how entities account for contracts, such as receivables, debt, leases, derivative instruments and hedging, that are modified to replace LIBOR or other benchmark interest rates with new rates. The guidance is effective upon issuance and may be applied through December 31, 2022.

On March 1, 2022, we repaid in full and terminated the 2019 Credit Agreement, which bore interest based on the LIBOR rate. Concurrently, on March 1, 2022, FactSet Research Systems Inc. entered into the 2022 Credit Agreement, which bears interest based on the Secured Overnight Financing Rate ("SOFR") rate. The adoption of this standard will not have an impact on our Consolidated Financial Statements. ~~Refer to Note 11,~~ ~~Debt~~ ~~andNote 17,~~ ~~Subsequent Events~~ ~~for definitions of these terms and more information on the 2019 Credit Agreement and 2022 Credit Agreement.~~

No other new accounting pronouncements issued or effective as of ~~February 28,~~November 30, 2022 have had, or are expected to have, a material impact on our Consolidated Financial Statements.

4.3. REVENUE RECOGNITION

We derive most of our revenues by providing client access to our ~~hosted proprietary data and analytics platform which can include~~multi-asset class solutions powered by our content refinery available over the associated contractual term (referred to as the "Hosted Platform"). The Hosted Platform is a subscription-

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based service that provides client access to various combinations of ~~products and services available over the contractual term. The hosted platform is a subscription-based service that consists primarily of providing access to~~ products and services including workstations, portfolio analytics and ~~market data.~~ enterprise solutions. In addition, through our CGS platform, we provide subscription access to a database of universally recognized identifiers reflecting differentiating characteristics for issuers and their financial instruments (referred to as the "Identifier Platform").

We determined that the majority of each of our ~~subscription-based service~~Hosted Platform and Identifier Platform services represents a single performance obligation covering a series of distinct products and services that are substantially the same and that have the same pattern of

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transfer to the client. We also determined the primary nature of the promise to the client is to provide daily access to ~~one overall~~each of these data and analytics ~~platform. This platform provides~~platforms. These platforms provide integrated financial information, analytical applications and industry-leading service for the investment community. Based on the nature of the services and products offered by ~~us,~~these platforms, we apply an output time-based measure of progress as the client is simultaneously receiving and consuming the benefits of the platform. We ~~record revenues~~recognize revenue for the majority of these platforms in accordance with the 'as invoiced' practical expedient as the amount of consideration that we have the right to invoice corresponds directly with the value of our ~~contracts using the over-time revenue recognition model as a client is invoiced or~~ performance ~~is satisfied.~~ to date.

We do not consider payment terms as a performance obligation for clients with contractual terms that are one year or less and we have elected the practical expedient.

Contracts with clients can include certain fulfillment costs, comprised of up-front costs to allow for the delivery of ~~services~~products and ~~products,~~services, which are recoverable. ~~In connection with the adoption of the revenue recognition standard, fulfillment~~Fulfillment costs are recognized as an asset, with the current portion recorded in the Prepaid expenses and other current assets and the non-current portion recorded in Other assets, based on the term of the license period. The fulfillment costs are amortized consistent with the associated revenues for providing the services. There are no significant judgments that would impact the timing of revenue recognition.

The majority of client contracts have a duration of one year ~~or less,~~ or the amount we are entitled to receive corresponds directly with the value of performance obligations completed to date, and therefore, we do not disclose the value of the remaining unsatisfied performance obligations.

Disaggregated Revenues

We disaggregate revenues from contracts with clients by our ~~reportable~~ segments ~~("segments")~~ which consist of the Americas, EMEA and Asia Pacific. We believe these segments are reflective of how we manage our business and the markets in which we serve and best depict the nature, amount, timing and uncertainty of revenues and cash flows related to contracts with clients. Segment revenues reflect sales to our clients based on their respective geographic locations. Refer to Note 16, Segment Information, for further information.

The following table presents this disaggregation by segment:


		Three Months Ended				Six Months Ended					Three Months Ended
		February 28,				February 28,					November 30,
(in thousands)	(in thousands)	2022		2021		2022		2021		(in thousands)	2022		2021
Americas	Americas	$	273,659	$	247,991	$	540,572	$	492,327	Americas	$	323,367	$	266,913
EMEA	EMEA	114,591		105,493		229,594		211,270		EMEA	130,738		115,003
Asia Pacific	Asia Pacific	42,869		38,304		85,678		76,396		Asia Pacific	50,710		42,809
Total Revenues	Total Revenues	$	431,119	$	391,788	$	855,844	$	779,993	Total Revenues	$	504,815	$	424,725

5.4. FAIR VALUE MEASURES

Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability (i.e., the "exit price") in an orderly transaction between market participants at the measurement date. In determining fair value, the use of various valuation methodologies, including market, income and cost approaches, is permissible. We consider the principal or most advantageous market in which we would transact and consider assumptions that market participants would use when pricing the asset or liability.

Fair Value Hierarchy

The accounting guidance for fair value measurements establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. There are three levels of

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inputs that may be used to measure fair value based on the reliability of inputs. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement requires judgment and may affect its placement within the fair value hierarchy levels. We have categorized our cash equivalents, investments and derivatives within the fair value hierarchy as follows:

Level 1 – applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. ~~These Level 1 assets and liabilities include our corporate money market funds that are classified as cash equivalents.~~

Level 2 – applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which

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significant inputs are observable or can be derived principally from, or corroborated by, observable market data. ~~Our mutual funds and derivative instruments are classified as Level 2.~~

Level 3 – applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. ~~We held no Level 3 assets or liabilities as of February 28, 2022 or August 31, 2021.~~

(a) Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following tables show, by level within the fair value hierarchy, our assets and liabilities that are measured at fair value on a recurring basis ~~at February 28,~~as of November 30, 2022 and August 31, ~~2021.~~2022. We did not have any transfers between levels of fair value measurements during the periods ~~presented.~~presented below. We held no Level 3 assets or liabilities measured at fair value on a recurring basis as of November 30, 2022 and August 31, 2022.


		Fair Value Measurements at February 28, 2022							Fair Value Measurements at November 30, 2022
(in thousands)	(in thousands)	Level 1		Level 2		Total		(in thousands)	Level 1		Level 2		Total
Assets	Assets							Assets
Corporate money market funds (1)	Corporate money market funds (1)	$	167,562	$	—	$	167,562	Corporate money market funds(1)	$	210,951	$	—	$	210,951
Mutual funds (2)	Mutual funds (2)	—		34,984		34,984		Mutual funds(2)	—		32,572		32,572

Derivative instruments (3)	Derivative instruments (3)	—		4,592		4,592		Derivative instruments(3)	—		15,410		15,410
Total assets measured at fair value	Total assets measured at fair value	$	167,562	$	39,576	$	207,138	Total assets measured at fair value	$	210,951	$	47,982	$	258,933

Liabilities	Liabilities							Liabilities
Derivative instruments (3)	Derivative instruments (3)	$	—	$	2,110	$	2,110	Derivative instruments(3)	$	—	$	2,486	$	2,486
Total liabilities measured at fair value	Total liabilities measured at fair value	$	—	$	2,110	$	2,110	Total liabilities measured at fair value	$	—	$	2,486	$	2,486


		Fair Value Measurements at August 31, 2021							Fair Value Measurements at August 31, 2022
(in thousands)	(in thousands)	Level 1		Level 2		Total		(in thousands)	Level 1		Level 2		Total
Assets	Assets							Assets
Corporate money market funds (1)	Corporate money market funds (1)	$	232,519	$	—	$	232,519	Corporate money market funds(1)	$	179,330	$	—	$	179,330
Mutual funds (2)	Mutual funds (2)	—		35,984		35,984		Mutual funds(2)	—		33,219		33,219

Derivative instruments (3)	Derivative instruments (3)	—		1,384		1,384		Derivative instruments(3)	—		12,412		12,412
Total assets measured at fair value	Total assets measured at fair value	$	232,519	$	37,368	$	269,887	Total assets measured at fair value	$	179,330	$	45,631	$	224,961

Liabilities	Liabilities							Liabilities
Derivative instruments (3)	Derivative instruments (3)	$	—	$	4,181	$	4,181	Derivative instruments(3)	$	—	$	8,307	$	8,307
Total liabilities measured at fair value	Total liabilities measured at fair value	$	—	$	4,181	$	4,181	Total liabilities measured at fair value	$	—	$	8,307	$	8,307

1.(1) Our corporate money market funds are readily convertible into cash and the net asset value of each fund on the last day of the quarter is used to determine its fair value. Our corporate money market funds are ~~classified as Level 1 assets and are~~ included in Cash and cash equivalents within the Consolidated Balance Sheets.

2.(2) Our mutual funds have a fair value based on the fair value of the underlying investments held by the mutual funds, allocated to each share of the mutual fund using a net asset value approach. The fair value of the underlying investments is based on observable inputs. Our mutual funds are ~~classified as Level 2 and are~~ included in Investments (short-term) within the Consolidated Balance Sheets.

3.(3) Our derivative instruments include our foreign exchange forward contracts and interest rate swap agreements. We utilize the income approach to measure fair value for our foreign exchange forward contracts. The income approach uses pricing models that rely on

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market observable inputs such as spot, forward and interest rates, as well as credit default swap ~~spreads, and are classified as Level 2 assets.~~spreads. To estimate fair value for ~~the~~our interest rate swap ~~agreement,~~agreements, we utilize a present value of future cash flows, leveraging a model-derived valuation that uses ~~Level 2~~ observable inputs such as interest rate yield curves. Refer to Note 65, Derivative Instruments, for more information on our derivative instruments ~~designed as cash flow hedges~~ and their classification within the Consolidated Balance Sheets.

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(b) Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis

Assets and liabilities that are measured at fair value on a non-recurring basis relate primarily to our tangible fixed assets, lease ~~right-of-use ("ROU")~~ROU assets, goodwill and intangible assets. The fair values of these non-financial assets and liabilities are determined based on valuation techniques using the best information available, and may include quoted market prices, market comparable information, and discounted cash flow projections. These non-financial assets are required to be assessed for impairment whenever events or circumstances indicate ~~that~~ their carrying value may not be fully recoverable, and at least annually for goodwill.

~~During the three and six months ended February 28, 2022, we incurred an impairment charge of $9.7 million and $13.4 million, respectively, related to our~~ ~~lease ROU assets~~ and Property, equipment and leasehold improvements associated with vacating certain leased office space. For those locations we anticipate subleasing, we estimated the fair value of the lease ROU assets as of the cease use date, using a market approach, based on expected future cash flows from sublease income. To complete this assessment we relied on certain assumptions, which included estimates of the rental rate, period of vacancy, incentives and annual rent increases. We fully impaired both the lease ROU assets for locations we will not sublease and the Property, equipment and leasehold improvements balances associated with the related vacated leased office space as there are no expected cash flows related to these items. As a result of the subjective nature of unobservable inputs used, these assets are classified within Level 3 of the fair value hierarchy.

AsWe elected not to carry our Long-term debt at fair value. The carrying value of ~~February 28, 2022~~our Long-term debt is net of related unamortized discount and ~~August 31, 2021, the~~debt issuance costs.

The fair value of our 2019 Revolving Credit Facility (as defined below in Note 11, Debt), included in Long-term debt within the Consolidated Balance Sheets, was $575.0 million, which approximated its carrying amount given the application of a floating interest rate equal to LIBOR plus a spread using a debt leverage pricing grid. As the interest rateSenior Notes is ~~a variable rate, adjusted~~estimated based on quoted prices in active markets as of the reporting date, given that the Senior Notes are publicly traded, which are considered Level 1 inputs. The fair value of our 2022 Credit Facilities is estimated based on quoted market ~~conditions, it approximates the current market-rate~~prices for similar instruments, ~~available~~adjusted for unobservable inputs to ~~companies with comparable credit quality~~ensure comparability to our investment rating, maturity terms and ~~maturity, and therefore, the long-term debt is categorized as~~principal outstanding, which are considered Level ~~2 in the fair value hierarchy.~~

~~On March 1, 2022, we repaid in full and terminated the 2019 Credit Agreement and concurrently, FactSet Research Systems Inc. entered into the 2022 Credit Agreement.~~3 inputs. Refer to Note ~~17,~~11, ~~Subsequent Events~~Debt for ~~definition~~definitions of these terms and more information on the Senior Notes and 2022 Credit ~~Agreement.~~Facilities.

The following table summarizes information on our outstanding debt as of November 30, 2022 and August 31, 2022:


		November 30, 2022				August 31, 2022
(in thousands)	Fair Value Hierarchy	Principal Amount		Estimated Fair Value		Principal Amount		Estimated Fair Value
2027 Notes	Level 1	$	500,000	$	455,470	$	500,000	$	470,525
2032 Notes	Level 1	500,000		419,860		500,000		438,205
2022 Term Facility	Level 3	625,000		627,344		750,000		750,975
2022 Revolving Facility	Level 3	250,000		246,562		250,000		249,075
Total principal amount		$	1,875,000	$	1,749,236	$	2,000,000	$	1,908,780
Total unamortized discounts and debt issuance costs		(15,904)				(17,576)
Total net carrying value of debt		$	1,859,096			$	1,982,424

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5. DERIVATIVE INSTRUMENTS

Cash Flow Hedges

~~Foreign Currency Forward Contracts~~

~~We conduct business outside~~In designing our hedging approach, we consider several factors, including offsetting exposures, the ~~U.S. in several currencies including~~significance of exposures, the ~~British Pound Sterling, Euro, Indian Rupee,~~forecasting of risk and ~~Philippine Peso. As such, we are exposed~~the potential effectiveness of the hedge to movements in foreign currency exchange rates. We utilize derivative instruments (foreign currency forward contracts) to manage the exposures related to the effects of foreign exchange rate fluctuations and reduce the volatility of our earnings and cash ~~flows associated with changes in foreign currency.~~flows. Factors considered in the decision to hedge an underlying market exposure include the materiality of the risk, the volatility of the market, the duration of the hedge, the degree to which the underlying exposure is committed to, and the availability, effectiveness and cost of derivative instruments. Derivative ~~instruments~~instruments are only utilized for risk management purposes and are not used for speculative or trading purposes. We limit counterparties to credit-worthy financial institutions. Refer to Note ~~12,~~2, ~~Commitments and Contingencies –~~Summary of Significant Accounting Policies - Concentrations of Credit ~~Ris~~Riskk,, for further discussion on counterparty credit risk.

~~In designing a specific hedging approach,~~We leverage foreign currency forward contracts and interest rate swaps to mitigate certain operational exposures from the impact of changes in foreign currency exchange rates and to manage our interest rate exposure. We have designated and accounted for these derivatives as cash flow hedges with the unrealized gains or losses recorded in Accumulated Other Comprehensive Loss ("AOCL"), net of tax, in the Consolidated Balance Sheets. Realized gains or losses resulting from settlement of our forward contracts and swap agreements are subsequently reclassified into Selling, general and administrative ("SG&A") and Interest expense, net, respectively, in the Consolidated Statements of Income when the hedges are settled.

Foreign Currency Forward Contracts

As we ~~considered~~conduct business outside the U.S. in several ~~factors, including offsetting exposures, the significance of exposures, the forecasting of risk and the potential effectiveness of the hedge.~~currencies, we are exposed to movements in foreign currency exchange rates. The gains and losses on foreign currency forward contracts offset the variability in operating expenses associated with currency movements. ~~The changes in fair value for these~~As of November 30, 2022, we maintained a series of foreign currency forward contracts to hedge a portion of our exposures related to our primary currencies of the British Pound Sterling, Euro, Indian Rupee and Philippine Peso. We entered into these contracts to mitigate our currency exposure ranging from 25% to 75%, over their respective hedged periods, which are ~~initially reported~~set to mature at various points between the second quarter of fiscal 2023 through the first quarter of fiscal 2024.

The following table summarizes the gross notional value of foreign currency forward contracts to purchase British Pound Sterling, Euros, Indian Rupees and Philippine Pesos with U.S. dollars as of November 30, 2022 and August 31, 2022.


	November 30, 2022				August 31, 2022
(in thousands)	Local Currency Amount		Notional Contract Amount (USD)		Local Currency Amount		Notional Contract Amount (USD)
British Pound Sterling	£	48,000	$	57,337	£	44,200	$	55,567
Euro	€	38,000	39,892		€	37,500	40,679
Indian Rupee	Rs	2,739,827	33,600		Rs	2,667,928	33,600
Philippine Peso	₱	1,540,066	27,300		₱	1,462,060	27,000
Total			$	158,129			$	156,846

Refer to Foreign Currency Transaction Risk in Item 3. Quantitative and Qualitative Disclosures About Market Risk of this Quarterly Report on Form 10-Q for further discussion of our exposure to foreign exchange rate fluctuations.

Interest Rate Swap Agreements

2020 Swap Agreement

On March 5, 2020, we entered into an interest rate swap agreement ("2020 Swap Agreement") with a ~~component~~notional amount of ~~Accumulated other comprehensive loss~~$287.5 million. The 2020 Swap Agreement hedged a portion of our then outstanding floating LIBOR rate debt with a fixed interest rate of 0.7995% to mitigate our interest rate exposure. On March 1, 2022, we terminated the 2020 Swap Agreement, which resulted in a one-time benefit of $3.5 million recognized in Interest expense, net in the Consolidated Statements of Income during the third quarter of fiscal 2022, based on its fair market value.

2022 Swap Agreement

On March 1, 2022, we entered into an interest rate swap agreement ("~~AOCL"~~2022 Swap Agreement") with a notional amount of $800.0 million to hedge a portion of our outstanding floating Secured Overnight Financing Rate ("SOFR") rate debt with a fixed

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interest rate of 1.162%. The notional amount of the 2022 Swap Agreement declines by $100.0 million on a quarterly basis as of May 31, 2022 and is maturing on February 28, 2024. As of November 30, 2022, the notional amount of the 2022 Swap Agreement was $500.0 million.

Refer to Note 11,~~subsequently~~ Debt, for further discussion of our outstanding floating SOFR rate debt. Refer to Interest Rate Risk in Part I, Item 3. Quantitative and Qualitative Disclosures About Market Risk of this Quarterly Report on Form 10-Q for further discussion of our exposure to interest rate risk on our long-term debt outstanding.

Gross Notional Value and Fair Value of Derivative Instruments

The following is a summary of the gross notional values of the derivative instruments:


(in thousands)	Gross Notional Value
	November 30, 2022		August 31, 2022
Foreign currency forward contracts	$	158,129	$	156,846
Interest rate swap agreement	500,000		600,000
Total cash flow hedges	$	658,129	$	756,846

The following is a summary of the fair values of our derivative instruments:


	Fair Value of Derivative Instruments
(in thousands)	Derivative Assets					Derivative Liabilities
Derivatives designated as hedging instruments	Balance Sheet Classification	November 30, 2022		August 31, 2022		Balance Sheet Classification	November 30, 2022		August 31, 2022
Foreign currency forward contracts	Prepaid expenses and other current assets	$	2,467	$	—	Accounts payable and accrued expenses	$	2,486	$	8,307
Interest rate swap agreement	Prepaid expenses and other current assets	12,162		10,621		Accounts payable and accrued expenses	—		—
	Other assets	781		1,791		Other liabilities	—		—
Total cash flow hedges		$	15,410	$	12,412		$	2,486	$	8,307

All derivatives were designated as hedging instruments as of November 30, 2022 and August 31, 2022.

Derivative Recognition

The following table provides the pre-tax effect of derivative instruments in cash flow hedging relationships for the three months ended November 30, 2022 and November 30, 2021, respectively:


	Gain (Loss) Recognized in AOCL on Derivatives				Location of Gain (Loss) Reclassified from AOCL into Income	Gain (Loss) Reclassified from AOCL into Income
(in thousands)	November 30,					November 30,
Derivatives in Cash Flow Hedging Relationships	2022		2021			2022		2021
Foreign currency forward contracts	$	3,323	$	(3,542)	SG&A	$	(4,965)	$	(449)
Interest rate swap agreement	3,428		2,583		Interest expense, net	2,897		(516)
Total cash flow hedges	$	6,751	$	(959)		$	(2,068)	$	(965)

As of November 30, 2022, we estimate that net pre-tax derivative gains of $12.1 million included in AOCL will be reclassified into ~~Operating expenses when~~earnings within the next 12 months. As of November 30, 2022, our cash flow hedges were highly effective with no amount of ineffectiveness recorded in the Consolidated Statements of Income for these designated cash flow hedges and all components of each derivative’s gain or loss were included in the assessment of hedge ~~is settled.~~effectiveness. There was no discontinuance of our

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cash flow hedges during the ~~six~~three months ended ~~February 28,~~November 30, 2022 or ~~February 28,~~November 30, 2021, and as such, no corresponding gains or losses related to changes in the value of our contracts were reclassified into earnings prior to settlement.

As of February 28, 2022, we maintained foreign currency forward contracts to hedge a portion of our British Pound Sterling, Euro, Indian Rupee and Philippine Peso exposures. We entered into a series of forward contracts to mitigate our currency

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exposure ranging from 25% to 50% over their respective hedged periods. The current foreign currency forward contracts are set to mature at various points between the third quarter of fiscal 2022 through the first quarter of fiscal 2023.

As of February 28, 2022, the gross notional value of foreign currency forward contracts to purchase Philippine Pesos and Indian Rupees with U.S. dollars was ₱0.9 billion and Rs1.7 billion, respectively. The gross notional value of foreign currency forward contracts to purchase Euros and British Pound Sterling with U.S. dollars was €23.0 million and £24.3 million, respectively.

~~2020 Swap Agreement~~

On March 5, 2020, we entered into an interest rate swap agreement (the "2020 Swap Agreement") with a notional amount of $287.5 million to hedge the variable interest rate obligation on a portion of our outstanding debt under our 2019 Revolving Credit Facility (as defined below in Note 11, ~~Debt).~~ As of February 28, 2022, we have borrowed $575.0 million of the available $750.0 million under the 2019 Revolving Credit Facility, which bears interest on the outstanding principal amount at a rate equal to contractual one-month LIBOR plus a spread using a debt leverage pricing grid, which was 0.875% as of February 28, 2022. Refer to Note 11, ~~Debt~~, for further discussion on the 2019 Revolving Credit Facility. Under the terms of the 2020 Swap Agreement, we will pay interest at a fixed rate of 0.7995% and receive variable interest payments based on the same one-month LIBOR utilized to calculate the interest expense from the 2019 Revolving Credit Facility. The 2020 Swap Agreement matures on March 29, 2024.

~~Refer to~~ ~~Interest Rate Risk~~ ~~in Part I, Item 3 of this Quarterly Report on Form 10-Q for further discussion on our exposure to interest rate risk on our long-term debt outstanding.~~

As the terms for the 2020 Swap Agreement align with the 2019 Revolving Credit Facility, we do not expect any hedge ineffectiveness. We have designated and accounted for this instrument as a cash flow hedge with the unrealized gains or losses on the interest rate swap agreement recorded in AOCL in the Consolidated Balance Sheets. Realized gains or losses are subsequently reclassified into Interest expense, net in the Consolidated Statement of Income when settled.

~~The following is a summary of the gross notional values of the derivative instruments:~~

(in thousands)
Gross Notional Value
February 28, 2022 August 31, 2021
Foreign currency forward contracts $ 99,609 $ 154,728
Interest rate swap agreement 287,500 287,500
Total cash flow hedges $ 387,109 $ 442,228

~~Fair Value of Derivative Instruments~~

~~The following is a summary of the fair values of the derivative instruments:~~
Fair Value of Derivative Instruments
(in thousands) Derivative Assets Derivative Liabilities
Derivatives designated as hedging instruments Balance Sheet Classification February 28, 2022 August 31, 2021 Balance Sheet Classification February 28, 2022 August 31, 2021
Foreign currency forward contracts Prepaid expenses and other current assets $ 180 $ 1,384 Accounts payable and accrued expenses $ 2,110 $ 1,201
Interest rate swap agreement Prepaid expenses and other current assets 820 — Accounts payable and accrued expenses — 1,934
Other assets 3,592 — Other liabilities — 1,045
Total cash flow hedges $ 4,592 $ 1,384 $ 2,110 $ 4,181

~~All derivatives were designated as hedging instruments as of February 28, 2022 and August 31, 2021.~~

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~~Derivatives in Cash Flow Hedging Relationships~~

~~The following table provides the pre-tax effect of derivative instruments in cash flow hedging relationships for the three months ended February 28, 2022 and February 28, 2021, respectively:~~

Gain (Loss) Reclassified in AOCL on Derivatives Location of Gain (Loss) Reclassified from AOCL into Income Gain (Loss) Reclassified from AOCL into Income
(in thousands) February 28, February 28,
Derivatives in Cash Flow Hedging Relationships 2022 2021 2022 2021
Foreign currency forward contracts $ (34) $ 1,879 SG&A $ (1,014) $ 2,069
Interest rate swap agreement 3,795 1,462 Interest expense, net (498) (472)
Total cash flow hedges $ 3,761 $ 3,341 $ (1,512) $ 1,597
The following table provides the pre-tax effect of derivative instruments in cash flow hedging relationships for the six months ended February 28, 2022 and February 28, 2021, respectively:
Gain (Loss) Recognized in AOCL on Derivatives Location of Gain (Loss) Reclassified from AOCL into Income Gain (Loss) Reclassified from AOCL into Income
(in thousands) February 28, February 28,
Derivatives in Cash Flow Hedging Relationships 2022 2021 2022 2021
Foreign currency forward contracts $ (3,576) $ 2,127 SG&A $ (1,463) $ 2,886
Interest rate swap agreement 6,378 1,406 Interest expense, net (1,014) (942)
Total cash flow hedges $ 2,802 $ 3,533 $ (2,477) $ 1,944

As of February 28, 2022, our cash flow hedges were effective, with no amount of ineffectiveness recorded in the Consolidated Statements of Income for these designated cash flow hedges, and all components of each derivative��s gain or loss were included in the assessment of hedge effectiveness.

~~As of February 28, 2022, we estimate that net pre-tax derivative losses of $1.9 million related to the foreign currency forward contracts included in AOCL will be reclassified into earnings within the next 12 months. As of March 1, 2022, we terminated the 2020 Swap Agreement.~~ ~~Refer to Note 17,~~ ~~Subsequent Events~~ ~~for more information on the termination and the expected impact reclassified into earnings.~~

Offsetting of Derivative Instruments

We enter into master netting arrangements designed to permit net settlement of derivative transactions among the respective counterparties, settled on the same date and in the same currency. As of ~~February 28,~~November 30, 2022 and August 31, ~~2021,~~2022, there were no material amounts recorded net on the Consolidated Balance Sheets.

~~2022 Swap Agreement~~

As we desire to maintain a fixed to floating interest rate ratio of 80% on our outstanding debt portfolio, we entered into the 2022 Swap Agreement with a notional amount $800.0 million on March 1, 2022. The 2022 Swap Agreement will hedge our floating Term SOFR rate outstanding debt with a fixed rate of 1.162%. Refer to Note 17, ~~Subsequent Events~~ ~~for the definition and more information on the 2022 Swap Agreement.~~

7.6. ACQUISITIONS

During fiscal 2022 and 2021, we completed acquisitions of several businesses, with the most significant cash flows related to the acquisitions of CUSIP Global Services ("CGS") and Cobalt Software, Inc. ("Cobalt") ~~and Truvalue Labs, Inc. ("TVL")~~.

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CUSIP Global Services

On March 1, 2022, we completed the acquisition of ~~CUSIP Global Services (“CGS"), previously operated~~CGS for a cash purchase price of $1.932 billion, inclusive of working capital adjustments. CGS manages a database of 60 different data elements uniquely identifying more than 50 million global financial instruments. It is the foundation for security master files relied on by ~~S&P Global Inc.,~~critical front, middle and back-office functions. CGS, operating on behalf of the American Bankers Association ("ABA"), is the provider of Committee on Uniform Security Identification Procedures ("CUSIP") and CUSIP International Number System ("CINS") identifiers globally and also acts as the official numbering agency for ~~$1.925 billion~~International Securities Identification Number ("ISIN") identifiers in ~~cash, subject~~the United States and as a substitute number agency for more than 35 other countries. We believe that the CGS acquisition will significantly expand our critical role in the global capital markets. The CGS purchase price was in excess of the fair value of net assets acquired, resulting in the recognition of goodwill. We finalized the purchase accounting for the CGS acquisition during the fourth quarter of fiscal 2022 and did not record any material changes to the preliminary purchase price allocation.

The acquisition date fair values of major classes of assets acquired and liabilities assumed are as follows:

Acquisition Date Fair Value

Acquisition Date Useful Life

Amortization Method

(in thousands)

(in years)

Current assets(1)

29,728

Amortizable intangible assets

ABA business process

1,583,000

36 years

Straight-line

Client relationships

164,000

26 years

Straight-line

Acquired databases

46,000

15 years

Straight-line

Goodwill

214,970

Current liabilities(2)

(104,691)

Deferred revenues, long-term

(1,481)

Total purchase price

1,931,526

(1) Includes an accounts receivable balance of $29.5 million.

(2) Includes a ~~working capital~~deferred revenues balance of $99.4 million. The CGS acquisition was accounted for in accordance with our adoption of ASU No. 2021-08; as such, the deferred revenues did not include a fair value adjustment. Refer to Note 17, ~~Subsequent Events~~2, Summary of Significant Accounting Policies in the Notes to the Consolidated Financial Statements included in Item 8. of our Annual Report on Form 10-K for the fiscal year ended August 31, 2022 for more information on ASU No. 2021-08.

Goodwill totaling $215.0 million represents the excess of the CGS purchase price over the fair value of net assets acquired and considers future economic benefits that we expect to achieve as a result of the acquisition. The goodwill is included in the Americas segment and is deductible for income tax purposes. The majority of the net assets acquired relate to an ABA business process intangible which is a renewable license agreement with the ABA to manage the issuance, maintenance and access to the CUSIP numbering system and related database of CUSIP identifiers. This intangible asset's valuation and associated useful life considers the nature of the business relationship, multi-year term of the current agreement and the likelihood of long-term renewals. The useful life assigned to the Client relationships intangible asset considers the strong historical client retention and

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client renewals as a basis for expected future retention. The useful life assigned to Acquired databases considers the historical period of data collection and the limited changes to the data on an annual basis.

The results of CGS's operations have been included in our Consolidated Financial Statements, within the Americas, EMEA, and Asia Pacific segments, beginning with the closing of the acquisition on March 1, 2022. CGS functions as part of ~~CGS.~~CTS. Pro forma information has not been presented because the effect of the CGS acquisition was not material to our Consolidated Financial Statements.

Cobalt Software, Inc.

On October 12, 2021, we acquired all of the outstanding shares of Cobalt for a purchase price of $50.0 million, net of cash ~~acquired.~~acquired, and inclusive of working capital adjustments. Cobalt is a leading portfolio monitoring solutions provider for the private capital industry. This acquisition advances our strategy to scale our data and workflow solutions through targeted investments as part of our multi-year investment plan and expands our private markets offering. The Cobalt purchase price was in excess of the fair value of net assets acquired, resulting in the recognition of goodwill. We ~~expect to finalize the allocation of~~finalized the purchase accounting for the Cobalt acquisition during the fourth quarter of fiscal 2022 and did not record any material changes to the preliminary purchase price ~~for Cobalt as soon as possible, but in any event, no later than one year from the acquisition date.~~allocation.

The acquisition date fair values of major classes of assets acquired and liabilities assumed are as follows:

Acquisition Date Fair Value

Acquisition Date Useful Life

Amortization Method

(in thousands)

(in years)

Current assets

540

Amortizable intangible assets

Software technology

7,750

5 years

Straight-line

Client relationships

4,800

11 years

Straight-line

Goodwill

~~43,554~~41,338

Other assets

Current liabilities

~~(6,653)~~(4,437)

Other liabilities

(7)

Total purchase price

50,018

Goodwill totaling ~~$43.6~~$41.3 million represents the excess of the Cobalt purchase price over the fair value of net assets acquired and is included in the Americas and EMEA segments. Goodwill generated from the Cobalt acquisition is not deductible for income tax purposes. The useful life assigned to the Client relationships intangible asset considers the historical client retention as a basis for expected future retention. The useful life assigned to Software technology considers our historical experience and anticipated technological changes.

The results of Cobalt's operations have been included in our Consolidated Financial Statements, within the Americas and EMEA segments, beginning with its acquisition on October 12, 2021. Pro forma information has not been presented because the effect of the Cobalt acquisition ~~is not material to our Consolidated Financial Statements.~~

~~Truvalue Labs, Inc.~~

On November 2, 2020, we acquired all of the outstanding shares of TVL for a purchase price of $41.9 million, net of cash acquired. TVL is a leading provider of environmental, social, and governance ("ESG") information. TVL applies artificial intelligence driven technology to over 100,000 unstructured text sources in multiple languages, including news, trade journals, and non-governmental organizations and industry reports, to provide daily signals that identify positive and negative ESG behavior. The acquisition of TVL further enhances our commitment to providing industry leading access to ESG data across our platforms. The TVL purchase price was in excess of the fair value of net assets acquired, resulting in the recognition of goodwill. We finalized the purchase accounting for the TVL acquisition during the third quarter of fiscal 2021.

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~~The acquisition date fair values of major classes of assets acquired and liabilities assumed are as follows:~~

~~Acquisition Date Fair Value~~

~~Acquisition Date Useful Life~~

~~Amortization Method~~

~~(in thousands)~~

~~(in years)~~

~~Current assets~~

~~812~~

~~Amortizable intangible assets~~

~~Software technology~~

~~8,100~~

~~7 years~~

~~Straight-line~~

~~Client relationships~~

~~900~~

~~12 years~~

~~Straight-line~~

~~Trade names~~

~~2,800~~

~~15 years~~

~~Straight-line~~

~~Goodwill~~

~~30,058~~

~~Other assets~~

~~5,299~~

~~Current liabilities~~

~~(3,069)~~

~~Other liabilities~~

~~(2,984)~~

~~Total purchase price~~

~~41,916~~

Goodwill totaling $30.1 million represents the excess of the TVL purchase price over the fair value of net assets acquired and is included in the Americas segment. Goodwill generated from the TVL acquisition is not deductible for income tax purposes. The results of TVL's operations have been included in our Consolidated Financial Statements, within the Americas segment, beginning with its acquisition on November 2, 2020. Pro forma information has not been presented because the effect of the TVL acquisition iswere not material to our Consolidated Financial Statements.

8.7. GOODWILL

Changes in the carrying amount of goodwill by segment for the ~~six~~three months ended ~~February 28,~~November 30, 2022 are as follows:

(in thousands)
Americas EMEA Asia Pacific Total
Balance at August 31, 2021 $ 430,088 $ 321,150 $ 2,967 $ 754,205
Acquisitions 43,769 428 — 44,197
Foreign currency translations — (12,101) (129) (12,230)
Balance at February 28, 2022 $ 473,857 $ 309,477 $ 2,838 $ 786,172


(in thousands)	Americas		EMEA		Asia Pacific		Total
Balance at August 31, 2022	$	686,412	$	277,087	$	2,349	$	965,848

Foreign currency translations	—		8,984		14		8,998
Balance at November 30, 2022	$	686,412	$	286,071	$	2,363	$	974,846

Goodwill is not amortized as it is estimated to have an indefinite life. At least annually, we are required to test goodwill at the reporting unit level, which is consistent with our segments, for potential impairment, and, if impaired, we write down our goodwill to fair value based on the present value of discounted cash flows. We performed our annual goodwill impairment test

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during the fourth quarter of fiscal ~~2021~~2022 utilizing a qualitative analysis, consistent with the timing and methodology of previous years. We concluded it was more likely than not that the fair value of each of our segments was ~~greater~~not less than its respective carrying value and no impairment charge was required.

8. INTANGIBLE ASSETS

We amortize intangible assets on a straight line basis over their estimated useful lives. The estimated useful life, gross carrying amounts and accumulated amortization totals related to our identifiable intangible assets are as follows:


		November 30, 2022						August 31, 2022
(in thousands, except useful lives)	Estimated Useful Life (years)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
ABA business process	36	$	1,583,000	$	32,979	$	1,550,021	$	1,583,000	$	21,986	$	1,561,014
Client relationships	8 to 26	264,742		59,313		205,429		263,163		55,405		207,758
Software technology	5 to 9	123,584		100,609		22,975		122,363		96,567		25,796
Developed technology	3 to 5	89,081		37,870		51,211		80,956		33,676		47,280
Acquired databases	15	46,000		2,300		43,700		46,000		1,533		44,467
Data content	5 to 20	33,389		26,153		7,236		32,305		24,973		7,332
Trade names	15	6,751		4,340		2,411		6,693		4,431		2,262
Total		$	2,146,547	$	263,564	$	1,882,983	$	2,134,480	$	238,571	$	1,895,909

The weighted average useful life of our intangible assets at November 30, 2022 was 32.8 years. As described in Note 6, Acquisitions, we acquired several intangible assets as part of the CGS acquisition. The weighted average useful life of our intangible assets at November 30, 2022, excluding those acquired from CGS, was 9.5 years. We assess intangible assets for indicators of impairment on a quarterly basis, including an evaluation of our useful lives to determine if events and circumstances warrant a revision to the remaining period of amortization. If indicators of impairment are present, amortizable intangible assets are tested for impairment by comparing the carrying value to undiscounted cash flows and, if impaired, written down to fair value based on discounted cash flows. We have not identified a material impairment nor a material change to the estimated remaining useful lives of our intangible assets for the three months ended November 30, 2022 and November 30, 2021. The intangible assets have no assigned residual values.

Amortization expense recorded for intangible assets for the three months ended November 30, 2022 and November 30, 2021 was $21.7 million and $10.1 million, respectively.

As of November 30, 2022, estimated intangible asset amortization expense for each of the next five years and thereafter are as follows:


Fiscal Year (in thousands)	Estimated Amortization Expense
2023 (remaining nine months)	$	69,398
2024	82,708
2025	76,216
2026	67,546
2027	62,783
Thereafter	1,524,332
Total	$	1,882,983

9. INCOME TAXES

Income tax expense is based on taxable income determined in accordance with current enacted laws and tax rates. Deferred income taxes are recorded for the temporary differences between the financial statement and the tax bases of assets and liabilities using currently enacted tax rates.

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Income Tax Provision ~~for Income Taxes~~and Effective Tax Rate

The provision for income taxes isand effective tax rate are as follows:


		Three Months Ended						Six Months Ended							Three Months Ended
		February 28,						February 28,							November 30,
(in thousands)	(in thousands)	2022			2021			2022			2021			(in thousands)	2022			2021
Income before income taxes	Income before income taxes	$	121,956		$	114,666		$	241,886		$	234,898		Income before income taxes	$	157,885		$	119,930
Provision for income taxes	Provision for income taxes	$	12,018		$	18,023		$	24,301		$	37,049		Provision for income taxes	$	21,087		$	12,283
Effective tax rate	Effective tax rate	9.9		%	15.7		%	10.0		%	15.8		%	Effective tax rate	13.4		%	10.2		%

Our effective tax rate is based on recurring factors and non-recurring events, including the taxation of foreign income. Our effective tax rate will vary based on, among other things, changes in levels of foreign income, as well as discrete and other non-recurring events that may not be predictable. ~~Our~~For the three months ended November 30, 2022, our effective tax rate is lower than the applicable U.S. corporate income tax rate ~~for the three and six months ended February 28, 2022, driven~~ mainly bydue to research and development ("R&D") tax credits, ~~and~~ a foreign derived intangible income ("FDII") ~~deduction. The effective~~deduction and a tax ~~rate for~~benefit from the ~~three and six months ended February 28, 2022 is further reduced by windfall tax benefits associated with the employee~~ exercise of stock options.

For the three months ended ~~February 28,~~November 30, 2022, the provision for income taxes was ~~$12.0~~$21.1 million, compared with ~~$18.0~~$12.3 million for the same period a year ago. The provision ~~decreased~~increased mainly due to ~~lower projected levels of~~higher pretax income ~~before income taxes,~~at a ~~lower~~higher effective tax rate ~~compared~~ and, to a lesser extent, an increase of the ~~prior year period and a $4.2 million reduction from higher windfall~~UK statutory tax ~~benefits, partially offset by higher income before income taxes during the three months ended February 28, 2022, compared with the prior year period.~~

For the six months ended February 28, 2022, the provision for income taxes was $24.3 million, compared with $37.0 million for the same period a year ago. The provision decreased mainly due to lower projected levels of income before income taxes, a lower effective tax rate compared to the prior year period and a $11.2 million in higher windfall tax benefits, partially offset by higher income before income taxes during the six months ended February 28, 2022, compared with the prior year period.rate.

10. LEASES

~~On September 1, 2019, we adopted ASC 842,~~Our lease portfolio is primarily related to our office space, ~~Leases~~ ~~("ASC 842"). As part of this adoption, we elected not to record~~under various operating lease ROU assets or operating lease liabilities for leases with an initial term of 12 months or less. We elected the practical expedient not to separate lease components from non-lease components but, rather, to combine them into one single lease component, which we recognize over the expected term on a straight-line expense basis in occupancy costs (a component of SG&A expense).agreements. We review new arrangements at inception to evaluate whether we obtain substantially all the economic benefits of and have the right to control the use of an asset.

~~Our lease portfolio is primarily related to our office space,~~ ~~under various operating lease agreements.~~ Our lease ROU assets and lease liabilitiesare recognized based on the present value of future minimum lease payments at lease commencement (which includes fixed lease payments and certain qualifying index-based variable payments) over the reasonably certain lease term, leveraging an estimated ~~incremental borrowing rate ("IBR").~~IBR. Certain adjustments to calculate our lease ROU assets may be required ~~for items such as the payment of~~due to prepayments, lease incentives received and initial direct costs ~~or incentives received.~~incurred. We account for the lease and non-lease components as a single lease component, which we recognize over the expected term on a straight-line expense basis in occupancy costs (a component of SG&A expense) in our Consolidated Statements of Income.

As of ~~February 28,~~November 30, 2022, we recognized ~~$206.2~~$154.1 million of Lease right-of-use assets, net and ~~$264.3~~$230.9 million of combined Current lease liabilities and Long-term lease liabilities in the Consolidated Balance Sheets. Such leases have a remaining lease term ranging from less than one year to just ~~under~~over 1413 years and did not include any renewal or termination options that were not yet reasonably certain to be exercised.

~~Table of~~ ~~Contents~~

The following table reconciles our future undiscounted cash flows related to our operating leases and the reconciliation to the combined Current lease liabilities and Long-term lease liabilities in the Consolidated Balance Sheets as of ~~February 28,~~November 30, 2022:


(in thousands)	(in thousands)	Minimum Lease Payments		(in thousands)	Minimum Lease Payments
Fiscal Years Ended August 31,	Fiscal Years Ended August 31,			Fiscal Years Ended August 31,
2022 (remaining six months)		$	21,408
2023		39,965
2023 (remaining nine months)				2023 (remaining nine months)	$	28,995
2024	2024	37,412		2024	35,424
2025	2025	35,671		2025	33,332
2026	2026	34,075		2026	32,546
2027				2027	31,694
Thereafter	Thereafter	150,583		Thereafter	114,070
Total	Total	$	319,114	Total	$	276,061
Less: Imputed interest	Less: Imputed interest	54,829		Less: Imputed interest	45,127
Present value	Present value	$	264,285	Present value	$	230,934

Table of Contents

The following table includes the components of ~~lease cost related to~~ our ~~operating leases were as follows:~~occupancy costs in our Consolidated Statements of Income:
Three Months Ended Six Months Ended
February 28, February 28,
(in millions)
2022 2021 2022 2021
Operating lease cost1
$ 10.2 $ 10.8 $ 20.7 $ 21.5
Variable lease cost2
$ 2.9 $ 4.3 $ 5.8 $ 7.7


	Three Months Ended
	November 30,
(in millions)	2022		2021
Operating lease cost(1)	$	8.1	$	10.5
Variable lease cost(2)	$	4.2	$	2.9

1.(1) Operating lease costs include costs associated with fixed lease payments and index-based variable payments that qualified for lease accounting under ASC 842, Leases and complied with the practical expedients and exceptions elected by us.

2.(2) Variable lease costs were not included in the measurement of lease liabilities. These costs primarily include variable non-lease costs and leases that qualified for the short-term lease exception. Our variable non-lease costs include costs that were not fixed at the lease commencement date and are not dependent on an index or rate. These costs ~~relate to~~were not included in the measurement of lease liabilities and primarily include variable non-lease costs, such as utilities, real estate taxes, insurance and ~~maintenance.~~maintenance, as well as lease costs for those leases that qualified for the short-term lease exception.

The following table summarizes our lease term and discount rate assumptions related to the operating leases recorded on the Consolidated Balance Sheets:


		February 28, 2022		August 31, 2021			As of November 30, 2022		As of August 31, 2022
Weighted average remaining lease term (in years)	Weighted average remaining lease term (in years)	8.9		9.4		Weighted average remaining lease term (in years)	8.4		8.6
Weighted average discount rate (IBR)	Weighted average discount rate (IBR)	4.3	%	4.3	%	Weighted average discount rate (IBR)	4.4	%	4.4	%

The following table summarizes supplemental cash flow information related to our operating leases:


		Six Months Ended					Three Months Ended
		February 28,					November 30,
(in millions)	(in millions)	2022		2021		(in millions)	2022		2021
Cash paid for amounts included in the measurement of lease liabilities	Cash paid for amounts included in the measurement of lease liabilities	$	22.2	$	20.0	Cash paid for amounts included in the measurement of lease liabilities	$	9.7	$	11.1
Lease ROU assets obtained in exchange for lease liabilities(1)	Lease ROU assets obtained in exchange for lease liabilities(1)	$	2.7	$	5.8	Lease ROU assets obtained in exchange for lease liabilities(1)	$	0.1	$	1.4
Reductions to ROU assets resulting from reductions to lease liabilities1		$	(8.9)	$	—

1.(1)Primarily ~~related to~~includes new lease ~~term reassessments based on contractual options to early terminate, resulting in a reduction to~~arrangements entered into during the period and contract modifications that extend our lease ~~liability and the corresponding Lease ROU asset.~~terms and/or provide additional rights.

~~During the three and six months ended February 28, 2022, we incurred an impairment charge of $5.8 million and $7.2 million, respectively, related to our~~ ~~lease ROU assets~~ ~~associated with vacating certain leased office space. Refer to~~ ~~Note 5,~~ ~~Fair Value Measures~~ ~~for more information on the lease ROU assets impairment methodology.~~

~~Table of~~ ~~Contents~~

11. DEBT

We elected not to carry our Long-term debt at fair value. The carrying value of our debt is net of related unamortized discount and debt issuance costs. Our total debt obligations ~~at February 28,~~as of November 30, 2022 and August 31, ~~2021~~2022 consisted of the following:
(in thousands) February 28, 2022 August 31, 2021
2019 Revolving Credit Facility $ 575,000 $ 575,000
2019 Revolving Credit Facility debt issuance costs (375) (465)
Long-term debt $ 574,625 $ 574,535


(in thousands)	Issuance Date	Contractual Maturity Date	November 30, 2022		August 31, 2022
2022 Credit Agreement
2022 Term Facility	3/1/2022	3/1/2025	625,000		750,000
2022 Revolving Facility	3/1/2022	3/1/2027	250,000		250,000

Senior Notes
2027 Notes	3/1/2022	3/1/2027	500,000		500,000
2032 Notes	3/1/2022	3/1/2032	500,000		500,000

Total unamortized discounts and debt issuance costs			(15,904)		(17,576)

Total Long-term debt			$	1,859,096	$	1,982,424

Table of Contents

As of November 30, 2022, annual maturities on our total debt obligations, based on contract maturity, were as follows:


(in thousands)	Maturities
Fiscal Years Ended August 31,
2023 (remaining nine months)	$	—
2024	—
2025	625,000
2026	—
2027	750,000
Thereafter	500,000
Total	$	1,875,000

2019 Credit Agreement

On March 29, 2019, we entered into a credit agreement ~~as the borrower,~~ with PNC Bank, National Association ~~("PNC"), as the administrative agent and lender~~ (the "2019 Credit Agreement"), which provides for a $750.0 million revolving credit facility (the "2019 Revolving Credit Facility"). The 2019 Revolving Credit Facility allows for borrowings until its maturity date of March 29, 2024. The 2019 Credit Agreement also allows for, subject to certain requirements, additional borrowings with PNC for an aggregate amount up to $500.0 million, provided that any such request for additional borrowings must be in a minimum amount of $25.0 million.

~~As of February 28, 2022, we have~~and borrowed $575.0 million of the available $750.0 million provided by the ~~2019~~revolving credit facility thereunder (the "2019 Revolving Credit Facility, resulting in $175.0 million available to be withdrawn. We are required to pay a commitment fee using a pricing grid currently at 0.10% based on the daily amount by which the available balance in the 2019 Revolving Credit Facility exceeds the borrowed amount. All outstanding loan amounts are reported as Long-term debt within the Consolidated Balance Sheets at February 28, 2022. The principal balance is payable in full on the maturity date.

Facility"). Borrowings under the 2019 Revolving Credit Facility ~~bear~~bore interest on the outstanding principal amount at a rate equal to the daily LIBOR plus a spread using a debt leverage pricing grid, currently at 0.875%. For the three months ended February 28, 2022 and February 28, 2021, we recorded interest expense on our outstanding debt, including the amortization of debt issuance costs, net of the effects of the interest rate swap agreement, of $1.9 million in each respective period. For the six months ended February 28, 2022 and February 28, 2021, we recorded interest expense on our outstanding debt, including the amortization of debt issuance costs, net of the effects of the interest rate swap agreement, of $3.8 million and $4.0 million, respectively.

Including the effects of the interest rate swap agreement, the year-to-date weighted average interest rate on amounts outstanding under our 2019 Revolving Credit Facility was 1.36% and 1.38% as of February 28, 2022 and August 31, 2021, respectively. Refer to Note 6, ~~Derivative Instruments~~ ~~for further discussion on the interest rate swap agreement.~~grid. Interest on the ~~loan~~amounts outstanding under the 2019 Revolving Credit Facility iswas payable quarterly, in arrears, and on the maturity date.

~~During fiscal 2019, we~~ We incurred approximately $0.9 million in debt issuance costs related to the 2019 Credit Agreement. ~~These costs were capitalized as debt issuance costs and are amortized into interest expense ratably over the term of the 2019 Credit Agreement.~~

The 2019 Credit Agreement contains covenants and requirements restricting certain of our activities, which are usual and customary for this type of loan. In addition, the 2019 Credit Agreement requires that we maintain a consolidated net leverage ratio, as measured by total net funded debt/EBITDA ~~(as defined in the 2019 Credit Agreement)~~ ~~below a specified level as of the end of each fiscal quarter. We were in compliance with all covenants and requirements within the 2019 Credit Agreement as of February 28, 2022.~~

~~As of~~ ~~March 1, 2022~~, ~~we repaid in full and terminated our 2019 Credit Agreement~~. ~~Refer to Note 17,~~ ~~Subsequent Events~~ ~~for more information on the termination.~~

~~2022 Credit Agreement~~

On March 1, 2022, FactSet Research Systems Inc. entered into the 2022 Credit Agreement and concurrently repaid in full and terminated the 2019 Credit Agreement. On March 1, 2022, per the 2022 Credit Agreement, we borrowed $1.0 billion under the 2022 Term Facility and $250.0 million under the 2022 Revolving Facility. Refer to Note 17, ~~Subsequent Events~~ ~~for definition of these terms and more information on the 2022 Credit Agreement.~~

~~Table of~~ ~~Contents~~

~~Senior Notes~~

On March 1, 2022, FactSet Research Systems Inc. completed a public offering of $500.0 million aggregate principal amount of 2.900% Senior Notes due 2027 and $500.0 million aggregate principal amount of 3.450% Senior Notes due 2032. Refer to Note 17, ~~Subsequent Events~~ ~~for more information on these senior notes.~~

~~12. COMMITMENTS AND CONTINGENCIES~~

Commitments represent obligations, such as those for future purchases of goods or services, that are not yet recorded on the balance sheet as liabilities. We record liabilities for commitments when incurred (~~i.e., when the goods or services are received).~~

~~Purchase Commitments with Suppliers and Vendors~~

Purchase obligations represent payments due in future periods in respect of commitments to our various data vendors as well as commitments to purchase goods and services. These purchase commitments are agreements that are enforceable and legally binding on us, and they specify all significant terms, including: fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction. As of August 31, 2021, we had total purchase commitments with suppliers of $191.9 million. During the second quarter of fiscal 2022, we entered into a software subscription agreement with total purchase commitments of approximately $10 million with a contract term of three years.

~~We also have contractual obligations related to our lease liabilities and outstanding debt. Refer to Note 10,~~ ~~Leases,~~ ~~Note 11,~~ ~~Debt~~ ~~andNote 17,~~ ~~Subsequent Events~~ ~~for information regarding lease commitments; outstanding debt obligations; and newly issued senior notes and debt obligations, respectively.~~

~~Letters of Credit~~

From time to time, we are required to obtain letters of credit in the ordinary course of business. As of February 28, 2022, we had approximately $0.6 million of standby letters of credit outstanding. These standby letters of credit utilize the same covenants included in the 2019 Credit Agreement. Refer to Note 11, ~~Debt~~ ~~for more information on these covenants.~~

~~Contingencies~~

~~Income Taxes~~

~~Uncertain income tax positions are accounted for in accordance with applicable accounting guidance, refer to Note 9,~~ ~~Income Taxes,~~ for further details. We are currently under audit by tax authorities and have reserved for potential adjustments to our provision for income taxes that may result from examinations by, or any negotiated settlements with, these tax authorities. We believe that the final outcome of these examinations or settlements will not have a material effect on our results of operations or our cash flows. If events occur which indicate payment of these amounts is unnecessary, the reversal of the liabilities would result in the recognition of tax benefits in the period we determine the liabilities are no longer necessary. If our estimates of the federal, state and foreign income tax liabilities are less than the ultimate assessment, additional expense would result.

~~Legal Matters~~

We accrue non-income tax liabilities for contingencies when management believes that a loss is probable, and the amounts can be reasonably estimated. Contingent gains are recognized only when realized. We are engaged in various legal proceedings, claims and litigation that have arisen in the ordinary course of business, including employment matters, commercial and intellectual property litigation. The outcome of all the matters against us are subject to future resolution, including the uncertainties of litigation. Based on information available as of February 28, 2022, our management believes that the ultimate outcome of these unresolved matters against us, individually or in the aggregate, will not have a material adverse effect on our consolidated financial position, our results of operations or our cash flows.

~~Sales Tax Matters~~

On August 8, 2019, we received a Notice of Intent to Assess (the "First Notice") additional sales taxes, interest and underpayment penalties from the Commonwealth of Massachusetts Department of Revenue (the "Commonwealth") relating to the tax periods from January 1, 2006 through December 31, 2013. On July 20, 2021, we received a Notice of Intent to Assess (the "Second Notice", cumulatively with the First Notice, the "Notices") additional sales taxes, interest and underpayment penalties from the Commonwealth relating to the tax periods from January 1, 2014 through December 31, 2018. Based upon the Notices, it is the Commonwealth's intention to assess sales tax, interest and underpayment penalties on previously recorded sales transactions. We have filed an appeal to the Notices and intend to contest any such assessment, if assessed. We continue to cooperate with the Commonwealth's inquiry with respect to the Notices.

~~Table of~~ ~~Contents~~

On August 10, 2021, we received a letter (the "Letter") from the Commonwealth relating to the tax periods from January 1, 2019 through June 30, 2021, requesting additional sales information to determine if a notice of intent to assess should be issued to FactSet with respect to these tax periods. Based upon a preliminary review of the Letter, we believe the Commonwealth might seek to assess sales tax, interest and underpayment penalties on previously recorded sales transactions. We are cooperating with the Commonwealth's inquiry with respect to the Letter.

Due to the uncertainty surrounding the assessment process for both the Notices and Letter, we are unable to reasonably estimate the ultimate outcome of these matters and, as such, have not recorded a liability for any of these matters as of February 28, 2022. We believe that we will ultimately prevail if we are presented with a formal assessment for any of these matters; however, if we do not prevail, the amount of any assessment could have a material impact on our consolidated financial position, results of operations and cash flows.

~~Indemnifications~~

As permitted or required under Delaware law and to the maximum extent allowable under that law, we have certain obligations to indemnify our current and former officers and directors for certain events or occurrences while the officer or director is, or was, serving at our request in such capacity. These indemnification obligations are valid as long as the director or officer acted in good faith and in a manner the person reasonably believed to be in, or not opposed to, the best interests of FactSet, and with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. The maximum potential amount of future payments we could be required to make under these indemnification obligations is unlimited; however, we have a director and officer insurance policy that we believe mitigates our exposure and may enable us to recover a portion of any future amounts paid. We believe the estimated fair value of these indemnification obligations is immaterial.

~~Concentrations of Credit Risk~~

~~Cash equivalents~~

Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash and cash equivalents. We are exposed to credit risk for cash and cash equivalents held in financial institutions in the event of a default, to the extent that such amounts are in excess of applicable insurance limits. We have not experienced any losses from maintaining cash accounts in excess of such limits. We do not believe our concentration of cash and cash equivalents present a significant credit risk as the counterparties to the instruments consist of multiple high-quality, credit-worthy financial institutions.

~~Accounts Receivable~~

Our accounts receivable are subject to collection risk as they are unsecured and derived from revenues earned from clients located around the globe. We do not require collateral from our clients. We maintain reserves for potential write-offs and evaluate the adequacy of the reserves on a quarterly basis. These losses have historically been within expectations. No single client represented more than 3% of our total revenues in any period presented. As of February 28, 2022, the receivable reserve was $4.3 million compared with $6.4 million as of August 31, 2021.

~~Derivative Instruments~~

Our use of derivative instruments exposes us to credit risk to the extent counterparties may be unable to meet the terms of their agreements. To mitigate credit risk, we limit counterparties to credit-worthy financial institutions and distribute contracts among these institutions to reduce the concentration of credit risk. We do not expect any losses as a result of default by our counterparties.

~~Concentrations ofOtherRisk~~

~~Data Content Providers~~

We integrate data from various third-party sources into our hosted propriety data and analytics platform, which our clients access to perform their analyses. As certain data sources have a limited number of suppliers, we make every effort to assure that, where reasonable, alternative sources are available. We are not dependent on any individual third-party data supplier in order to meet the needs of our clients, with only two data suppliers each representing more than 10% of our total data costs for the six months ended February 28, 2022.

~~Table of~~ ~~Contents~~

~~13.STOCKHOLDERS’ EQUITY~~

~~Shares of common stock outstanding were as follows:~~
Six Months Ended
February 28,
(in thousands) 2022 2021
Balance, beginning of period 37,615 38,030
Common stock issued for employee stock plans 322 176
Repurchase of common stock from employees(1)
(7) (7)
Repurchase of common stock under the share repurchase program(2)
(46) (354)
Balance, end of period 37,884 37,845

~~(1)~~For the six months ended February 28, 2022 and February 28, 2021, we repurchased 7,422 and 7,447 shares from employees, or $3.3 million and $2.4 million of common stock, respectively, primarily to satisfy withholding tax obligations due upon the vesting of stock-based awards.

~~(2)Refer to Share Repurchase Program below for more information on the year over year change.~~

~~Share Repurchase Program~~

~~Under our share repurchase program, we may repurchase shares of our common stock from time to time in the open market and privately negotiated transactions, subject to market conditions.~~

Beginning in the second quarter of fiscal 2022, we suspended our share repurchase program through at least the second half of fiscal 2023, with the exception of potential minor repurchases to offset dilution from grants of equity awards or repurchases to satisfy withholding tax obligations du~~e upon the vesting of stock-based awards. The suspension of our share repurchase program allows us to prioritize the repayment of debt under the 2022 Credit Agreement. Refer to Note 17,~~ ~~Subsequent Events~~ ~~for the definition of and more information on the 2022 Credit Agreement.~~

As such, for the three months ended February 28, 2022, we did not make any repurchases under our existing share repurchase program, compared to 221,959 shares repurchased for $71.5 million for the three months ended February 28, 2021. During the six months ended February 28, 2022, we repurchased 46,200 shares for $18.6 million under our existing share repurchase program compared with 353,759 shares for $114.6 million in the same period a year ago.

As of February 28, 2022, a total of $181.3 million remained authorized for future share repurchases under this program. There is no defined number of shares to be repurchased over a specified timeframe through the life of the share repurchase program.

~~Restricted Stock~~

~~Restricted stock awards entitle the holders to receive shares of common stock as the awards vest over time. Fo~~r the six months ended February 28, 2022, 18,360 shares of previously granted restricted stock vested and were included in common stock outstanding as of February 28, 2022 (recorded net of 7,162 shares repurchased from employees at a cost of $3.1 million to cover their cost of taxes upon vesting of the restricted stock). During the six months ended February 28, 2021, 18,943 shares of previously granted restricted stock vested and were included in common stock outstanding as of February 28, 2021 (recorded net of 7,129 shares repurchased from employees at a cost of $2.3 million to cover their cost of taxes upon vesting of the restricted stock).

~~Table of~~ ~~Contents~~

~~Dividends~~

~~Our Board of Directors declared dividends in the six months ended February 28, 2022 and February 28, 2021 as follows:~~
Year Ended Dividends per
Share of
Common Stock Record Date Total $ Amount
(in thousands) Payment Date
Fiscal 2022
First Quarter $ 0.82 November 30, 2021 $ 30,973 December 16, 2021
Second Quarter $ 0.82 February 28, 2022 $ 31,065 March 17, 2022
Fiscal 2021
First Quarter $ 0.77 November 30, 2020 $ 29,266 December 17, 2020
Second Quarter $ 0.77 February 26, 2021 $ 29,141 March 18, 2021

Future cash dividend payments will depend on our earnings, capital requirements, financial condition and other factors considered relevant by us and are subject to final determination by our Board of Directors.

~~Accumulated Other Comprehensive Loss~~

~~The components of AOCL are as follows:~~
(in thousands) February 28, 2022 August 31, 2021
Accumulated unrealized gains (losses) on cash flow hedges $ 2,715 $ (2,095)
Accumulated foreign currency translation adjustment losses (58,563) (36,867)
Total AOCL $ (55,848) $ (38,962)

~~Table of~~ ~~Contents~~

~~14.EARNINGS PER SHARE~~

~~A reconciliation of the weighted average shares outstanding used in the basic and diluted earnings per share ("EPS") computations is as follows:~~

Three Months Ended Six Months Ended
February 28, February 28,
(in thousands, except per share data) 2022 2021 2022 2021
Numerator
Net income used for calculating basic and diluted income per share $ 109,938 $ 96,643 $ 217,585 $ 197,849
Denominator
Weighted average common shares used in the calculation of basic income per share 37,837 37,916 37,685 37,961
Common stock equivalents associated with stock-based compensation plan 924 704 943 697
Shares used in the calculation of diluted income per share 38,761 38,620 38,628 38,658
Basic income per share $ 2.91 $ 2.55 $ 5.77 $ 5.21
Diluted income per share $ 2.84 $ 2.50 $ 5.63 $ 5.12

Dilutive potential common shares consist of stock options and unvested performance-based awards. There were no stock options excluded from the calculation of diluted EPS for the three and six months ended February 28, 2022. For each of the three and six months ended February 28, 2021, the number of stock options excluded from the calculation of diluted EPS was 1,750.

Performance-based awards are omitted from the calculation of diluted EPS until it is determined that the performance criteria has been met at the end of the reporting period. For the three and six months ended February 28, 2022, there were 95,865 performance-based awards excluded from the calculation of diluted EPS. For each of the three and six months ended February 28, 2021, there were 71,275 performance-based awards excluded from the calculation of diluted EPS.

~~15. STOCK-BASED COMPENSATION~~

We recognized total stock-based compensation expense of $15.5 million and $11.0 million during the three months ended February 28, 2022 and February 28, 2021, respectively. During the six months ended February 28, 2022 and February 28, 2021, we recognized total stock-based compensation expense of $25.9 million and $22.3 million, respectively. As of February 28, 2022, $129.3 million of total unrecognized compensation expense related to non-vested awards is expected to be recognized over a weighted average period of 3.2 years. There was no stock-based compensation capitalized as of February 28, 2022 and February 28, 2021.

~~Employee Stock Option Awards~~

During the six months ended February 28, 2022, we granted 302,493 stock options under the FactSet Research Systems Inc. Stock Option and Award Plan, as Amended and Restated (the "LTIP") with a weighted average exercise price of $434.70 to existing employees of FactSet, using the lattice-binomial option-pricing model. The majority of the stock options granted during the six months ended February 28, 2022 are related to the annual employee grant on November 1, 2021 under the LTIP. The stock option awards granted on November 1, 2021 vest 20% annually on the anniversary date of the grant and are fully vested after five years, expiring ten years from the date of grant. As of February 28, 2022, we had 4.7 million share-based awards available for grant under the LTIP.

~~Table of~~ ~~Contents~~

~~Employee Stock Option Fair Value Determinations~~

We utilize the lattice-binomial option-pricing model ("binomial model") to estimate the fair value of new employee stock option grants. The binomial model is affected by our stock price, as well as assumptions regarding several variables, which include, but are not limited to, our expected stock price volatility over the term of the awards, interest rates, option forfeitures and employee stock option exercise behaviors, to determine the grant date stock option award fair value.

~~The weighted average estimated fair value of employee stock options granted on November 1, 2021 was determined using the binomial model with the following weighted average assumptions:~~


~~November 1, 2021 Grant Details~~
~~Risk-free interest rate~~	~~0.07% - 1.56%~~

~~Expected life (years)~~	~~6.91~~

~~Expected volatility~~	~~24.4~~	%

~~Dividend yield~~	~~0.85~~	%

~~Estimated fair value~~	~~$102.40~~
~~Exercise price~~	~~$434.82~~
~~Fair value as a percentage of exercise price~~	~~23.5~~	%

~~Non-Employee Director Stock Option Grant~~

The FactSet Research Systems Inc. Non-Employee Directors’ Stock Option and Award Plan as Amended and Restated (the "Director Plan") provides for the grant of share-based awards, including stock options, to non-employee directors of FactSet. The expiration date of the Director Plan is December 19, 2027. The non-qualified stock options granted to directors vest 100% after three years on the anniversary date of the grant and expire seven years from the date the options were granted. As of February 28, 2022, we had 227,348 shares available for future grant under the Director Plan.

~~On January 18, 2022, we granted 6,329 stock options under the Director Plan to our non-employee directors, using the Black-Scholes option-pricing model with the following assumptions:~~


~~January 18, 2022 Grant Details~~
~~Risk-free interest rate~~	~~1.53~~	%

~~Expected life (years)~~	~~5.7~~

~~Expected volatility~~	~~26.3~~	%

~~Dividend yield~~	~~0.72~~	%

~~Estimated fair value~~	~~$109.11~~
~~Exercise price~~	~~$428.71~~
~~Fair value as a percentage of exercise price~~	~~25.5~~	%

~~Employee Restricted Stock Units~~

During the six months ended February 28, 2022, we granted 59,738 non-performance based restricted stock units ("RSUs") and 30,704 performance-based restricted stock units ("PSUs"; RSUs and PSUs, collectively, "Restricted Stock Awards") under the LTIP. The Restricted Stock Awards granted under the LTIP during the six months ended February 28, 2022 had a weighted average grant date fair value of $422.34.

Restricted Stock Awards are subject to continued employment over a specified period and entitle the holders to shares of common stock as the Restricted Stock Awards vest over time. Vesting of the shares underlying the PSUs are also subject to achieving certain specified performance levels during the measurement period subsequent to the date of grant. The Restricted Stock Award holder is not entitled to dividends declared on the underlying shares while the stock subject to the Restricted Stock Award is unvested. The grant date fair value of Restricted Stock Awards is measured by reducing the grant date price of the common stock by the present value of the dividends expected to be paid on the underlying stock during the requisite service period, discounted at the appropriate risk-free interest rate. The expense associated with Restricted Stock Awards is amortized over the vesting period.

~~Table of~~ ~~Contents~~

The Restricted Stock Awards granted during the six months ended February 28, 2022 were primarily related to the annual employee grant on November 1, 2021. With respect to the November 1, 2021 grant, RSUs granted vest 20% annually on the anniversary date of grant and are fully vested after five years and PSUs granted cliff vest on the third anniversary of the grant date, subject to the achievement of certain performance metrics.

~~Non-Employee Director Restricted Stock Units~~

The Director Plan provides for the grant of share-based awards, including RSUs, to non-employee directors of FactSet. On January 18, 2022, we granted 1,629 RSUs to our directors that vest 100% on the first anniversary of the grant date. The RSUs granted under the Director Plan during the six months ended February 28, 2022 had a weighted average grant date fair value of $425.49.

~~Employee Stock Purchase Plan~~

Shares of FactSet common stock may be purchased by eligible employees under the FactSet Research Systems Inc. Employee Stock Purchase Plan, as Amended and Restated (the "ESPP") in three-month intervals. The purchase price is equal to 85% of the lesser of the fair market value of our common stock on the first day or the last day of each three-month offering period. Employee purchases may not exceed 10% of their gross compensation and there is a $25,000 contribution limit per employee during an offering period. Dividends paid on shares held in the ESPP are used to purchase additional ESPP shares at the market price on the dividend payment date.

During the three months ended February 28, 2022, employees purchased 8,232 shares at a weighted average price of $351.06 compared with 9,528 shares at a weighted average price of $263.18 for the three months ended February 28, 2021. During the six months ended February 28, 2022, employees purchased 17,417 shares at a weighted average price of $340.41 compared with 18,797 shares at a weighted average price of $274.72 for the six months ended February 28, 2021. Stock-based compensation expense related to the ESPP was $0.5 million during both the three months ended February 28, 2022 and February 28, 2021. Stock-based compensation expense related to the ESPP was $1.1 million for the six months ended February 28, 2022 and $1.0 million for the six months ended February 28, 2021. As of February 28, 2022 the ESPP had 121,539 shares reserved for future issuance.

~~16. SEGMENTINFORMATION~~

Operating segments are defined as components of an enterprise that have the following characteristics: (i) they engage in business activities from which they may earn revenues and incur expenses, (ii) their operating results are regularly reviewed by the chief operating decision maker ("CODM") for resource allocation decisions and performance assessment, and (iii) their discrete financial information is available. At FactSet, our Chief Executive Officer functions as our CODM.

Our operating segments are consistent with our reportable segments and are how we, including our CODM, manage our business and the geographic markets in which we serve. Our internal financial reporting structure is based on 3 segments: the Americas; EMEA; and Asia Pacific.

The Americas segment serves our clients throughout North, Central, and South America. The EMEA segment serves our clients in Europe, the Middle East, and Africa. The Asia Pacific segment serves our clients in Asia and Australia. Segment revenues reflect sales to clients based in these respective geographic locations.

Each segment records expenses related to its individual operations with the exception of expenditures associated with our data centers, third-party data costs and corporate headquarters charges, which are recorded by the Americas segment and are not allocated to the other segments. The content collection centers, located in India, the Philippines and Latvia, benefit all our segments, and the expenses incurred at these locations are allocated to each segment based on a percentage of revenues.

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~~The following tables reflect the results of operations of our segments as of February 28, 2022 and February 28, 2021:~~

(in thousands) Americas EMEA Asia Pacific Total
For the three months ended February 28, 2022
   Revenues $ 273,659 $ 114,591 $ 42,869 $ 431,119
   Operating income $ 48,903 $ 45,944 $ 28,501 $ 123,348
   Capital expenditures $ 10,346 $ 252 $ 1,365 $ 11,963
(in thousands)
For the three months ended February 28, 2021
   Revenues $ 247,991 $ 105,493 $ 38,304 $ 391,788
   Operating income $ 53,614 $ 40,290 $ 22,229 $ 116,133
   Capital expenditures $ 8,219 $ 314 $ 1,892 $ 10,425
(in thousands)
For the six months ended February 28, 2022 Americas EMEA Asia Pacific Total
   Revenue $ 540,572 $ 229,594 $ 85,678 $ 855,844
   Operating income $ 104,401 $ 86,598 $ 55,010 $ 246,009
   Capital expenditures $ 17,549 $ 362 $ 2,635 $ 20,546
(in thousands)
For the six months ended February 28, 2021 Americas EMEA Asia Pacific Total
   Revenue $ 492,327 $ 211,270 $ 76,396 $ 779,993
   Operating income $ 109,989 $ 80,924 $ 46,250 $ 237,163
   Capital expenditures $ 17,779 $ 633 $ 10,346 $ 28,758

~~The following table reflects the total assets for our segments:~~
Segment Assets (in thousands)
February 28, 2022 August 31, 2021
Americas $ 1,468,121 $ 1,144,693
EMEA 659,961 842,652
Asia Pacific 246,075 237,595
Total assets $ 2,374,157 $ 2,224,940

~~17. SUBSEQUENT EVENTS~~

~~CUSIP Global Services Acquisition~~

On December 24, 2021, we entered into a definitive agreement to acquire CUSIP Global Services (“CGS"), previously operated by S&P Global Inc., on behalf of the American Bankers Association, for $1.925 billion in cash, subject to a working capital adjustment. The acquisition was completed on March 1, 2022. CGS manages a database of 60 different data elements uniquely identifying more than 50 million global financial instruments. It is the foundation for security master files relied on by critical front, middle and back-office functions. CGS is the exclusive provider of Committee on Uniform Security Identification Procedures ("CUSIP") and CUSIP International Number System ("CINS") identifiers globally and also acts as the official numbering agency for International Securities Identification Number ("ISIN") identifiers in the United States and as a substitute number agency for more than 35 other countries. We anticipate that the CGS acquisition will significantly expand our critical role in the global capital markets. The purchase price for the CGS acquisition was financed from the net proceeds of the issuance of the Notes (defined below) and borrowings under the 2022 Credit Agreement (defined below).

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Revenue from CGS will be recognized based on geographic business activities in accordance with how our operating segments are currently aligned. CGS will function as part of CTS. We have not completed a preliminary allocation of the purchase price to the assets and liabilities acquired, although we expect that the majority of the purchase price will be allocated to acquired intangible assets and goodwill.

~~Issuance of Senior Notes~~

On March 1, 2022, FactSet Research Systems Inc. completed a public offering of $500.0 million aggregate principal amount of 2.900% Senior Notes due 2027 (the “2027 Notes”) and $500.0 million aggregate principal amount of 3.450% Senior Notes due 2032 (the “2032 Notes” and, together with the 2027 Notes, the “Notes”). The Notes were issued pursuant to an indenture, dated as of March 1, 2022, by and between FactSet and U.S. Bank Trust Company, National Association, as trustee, as supplemented by the supplemental indenture, dated as of March 1, 2022, between us and the Trustee (the "Supplemental Indenture"). We received net proceeds of $990.925 million from the issuance of the Notes and used such proceeds, together with cash on hand and borrowings under the 2022 Credit Agreement, to finance the consideration for the CGS acquisition, to repay borrowings underwe terminated the 2019 Credit Agreement and ~~to pay~~amortized the remaining related ~~transaction fees,~~$0.4 million of capitalized debt issuance costs ~~and expenses.~~

~~The 2027 Notes and the 2032 Notes will mature on March 1, 2027 and March 1, 2032, respectively.~~into Interest on the Notes is payable semiannually in arrears on March 1 and September 1 of each year, beginning September 1, 2022. The Notes are unsecured unsubordinated obligations and will be effectively subordinated to any of our existing and future secured obligations to the extent of the value of the assets securing such obligations.

We may redeem the Notes, in whole or in part, at any time at specified redemption prices, plus accrued and unpaid interest, if any. Upon the occurrence of a change of control triggering event (as definedexpense, net in the ~~Supplemental Indenture), we must offer to repurchase the Notes at 101%~~Consolidated Statements of ~~their principal amount, plus accrued and unpaid interest, if any.~~Income.

~~Establishment of~~ 2022 Credit Agreement

On March 1, 2022, ~~FactSet Research Systems Inc.~~we entered into a credit agreement (the ~~“2022~~"2022 Credit ~~Agreement”~~Agreement")~~, which provides for a senior unsecured term loan credit facility in~~ and borrowed an aggregate principal amount of $1.0 billion under its senior unsecured term loan credit facility (the ~~“2022~~"2022 Term ~~Facility”~~Facility") and a$250.0 million of the available $500.0 million under its senior unsecured revolving credit facility ~~in an aggregate principal amount of $500.0 million~~ (the ~~“2022~~"2022 Revolving ~~Facility”~~Facility" and, together with the 2022 Term Facility, the “2022 Credit Facilities”). The 2022 Term Facility matures on March 1, 2025, and the 2022 Revolving Facility matures on March 1, 2027. The 2022 Revolving Facility allows for the availability of up to $100.0 million in the form of letters of credit and up to $50.0 million in the form of swingline loans. We may seek additional commitments under the 2022 Revolving Facility from lenders or other financial institutions up to an aggregate principal amount of $750.0 million.

~~On March 1, 2022, we borrowed $1.0 billion under~~We pay a commitment fee on the ~~2022 Term Facility and $250.0 million under~~daily unused amount of the 2022 Revolving ~~Facility.~~

~~The 2022 Credit Agreement provides that (i) loans denominated in U.S. dollars, at our option, will bear interest at either one-month Term Secured Overnight Financing Rate ("SOFR") (with~~Facility using a 10 basis points credit spread adjustment and subject to a “zero” floor), Daily Simple SOFR (with a 10 basis points credit spread adjustment and subject to a “zero” floor) or an alternate base rate, (ii) loans denominated in Pounds Sterling will bear interest at Daily Simple Sterling Overnight Index Average ("SONIA") (subject to a “zero” floor) and (iii) loans denominated in Euros will bear interest at the E~~uro Interbank Offered Rate~~ ~~("EURIBOR") (subject to a “zero” floor), in each case, plus an applicable interest rate margin. The interest rate margin will be~~pricing grid based upon our senior unsecured non-credit enhanced long-term debt rating and our total leverage ratio. ~~We will also pay a~~The commitment fee remained at 0.125% from the borrowing date through November 30, 2022.

We used these borrowings, along with the net proceeds from the issuance of the Senior Notes (as defined below) and cash on hand, to finance the consideration for the CGS acquisition, to repay borrowings under the 2019 Credit Agreement and to pay related transaction fees, costs and expenses.

During fiscal 2022, ~~Revolving Facility that will fluctuate between 0.10% per annum and 0.25% per annum on~~we incurred approximately $9.5 million in debt issuance costs related to the ~~daily unused~~2022 Credit Facilities. Debt issuance costs are presented in the Consolidated Balance Sheets as a direct deduction from the carrying amount of the ~~2022 Revolving Facility.~~

~~Loans under~~related debt liability. Debt issuance costs are amortized to Interest expense, net in the ~~2022 Term Facility are subject to scheduled amortization payments in an aggregate annual amount equal to 5.0%~~Consolidated Statements of Income over the contractual term of the ~~original principal amount thereof. The 2022 Credit Facilities are not otherwise subject to any mandatory prepayments.~~ debt on a straight-line basis, which approximates the effective interest method.

We may voluntarily prepay loans under the 2022 Credit Facilities at any time without premium or penalty. During the first quarter of fiscal 2023, we repaid $125.0 million under the 2022 Term Facility, inclusive of voluntary prepayments of $112.5 million. Since March 1, 2022, we have repaid $375.0 million under the 2022 Term Facility, inclusive of voluntary prepayments of $350.0 million.

~~The~~As of November 30, 2022, the outstanding borrowings under the 2022 Credit ~~Agreement contains usual and customary affirmative and negative covenants for facilities~~Facilities bore interest at a rate equal to the applicable one-month Term SOFR rate plus a 1.1% spread (comprised of ~~this type, including limitations~~a 1.0% interest rate margin based on ~~indebtedness of non-guarantor subsidiaries, liens, sale and leaseback transactions, mergers and certain other fundamental changes and change in nature of business.~~a debt leverage pricing grid plus 0.1% credit spread adjustment). The spread remained consistent from the borrowing date through November 30, 2022. Interest on the 2022 Credit ~~Agreement contains a financial covenant requiring maintenance~~Facilities is currently payable on the last business day of ~~a total leverage ratio which is no greater than 4.00 to 1.00 for the fiscal quarter ending on May 31, 2022.~~

each month, in arrears.

3122

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The 2022 Credit Agreement contains usual and customary event of default provisions for facilities of this type, which are subject to usual and customary grace periods and materiality thresholds. If an event of default occurs under the 2022 Credit Agreement, the lenders may, among other things, terminate their commitments and declare all outstanding borrowings immediately due and payable.

The 2022 ~~Swap~~Credit Agreement

~~As we desire to maintain~~ contains usual and customary affirmative and negative covenants for facilities of this type, including a ~~fixed to floating interest rate~~financial covenant requiring maintenance of a total leverage ratio of ~~80% on our outstanding debt portfolio, we entered into an interest rate swap agreement ("2022 Swap Agreement")~~no greater than 4.00 to 1.00 as of November 30, 2022. We were in compliance with ~~a notional amount $800.0 million on March 1, 2022. The 2022 Swap Agreement will hedge our floating SOFR rate outstanding debt with a fixed rate of 1.162%. The notional amount~~all covenants and requirements of the 2022 Swap Agreement will decline in parity with any repayments of our Term SOFR rate debt to maintain the targeted hedging ratio of 80%. The 2022 Swap Agreement matures on February 28, 2024. We have designated this instrument as a cash flow hedge and any unrealized gains or losses on the 2022 Swap Agreement will be recorded in AOCL in the Consolidated Balance Sheets.

~~Termination of 2019~~ Credit Agreement ~~and 2020 Swap Agreement~~as of November 30, 2022.

Senior Notes

On March 1, 2022 ~~in connection~~we completed a public offering of $500.0 million aggregate principal amount of 2.900% Senior Notes due March 1, 2027 (the “2027 Notes”) and $500.0 million aggregate principal amount of 3.450% Senior Notes due March 1, 2032 (the “2032 Notes” and, together with the ~~entry~~2027 Notes, the “Senior Notes”). The Senior Notes were issued pursuant to an indenture, dated as of March 1, 2022, by and between us and U.S. Bank Trust Company, National Association, as trustee (the "Trustee"), as supplemented by the supplemental indenture, dated as of March 1, 2022, between us and the Trustee (the "Supplemental Indenture").

The Senior Notes were issued at an aggregate discount of $2.8 million during fiscal 2022 and we incurred approximately $9.1 million in debt issuance costs. Debt discounts and debt issuance costs are presented in the Consolidated Balance Sheets as a net direct deduction from the carrying amount of the related debt liability. The debt discounts and debt issuance costs are amortized to Interest expense, net in the Consolidated Statements of Income over the contractual term of the debt, leveraging the effective interest method.

Interest on the Senior Notes is payable semiannually in arrears on March 1 and September 1 of each year, with the first payment made on September 1, 2022.

We may redeem the Senior Notes, in whole or in part, at any time at specified redemption prices, plus any accrued and unpaid interest. Upon the occurrence of a change of control triggering event (as defined in the Supplemental Indenture), we must offer to repurchase the Senior Notes at 101% of their principal amount, plus any accrued and unpaid interest.

Swap Agreements

On March 5, 2020, we entered into the 2020 Swap Agreement to hedge a portion of our then outstanding floating LIBOR rate debt with a fixed interest rate of 0.7995%. On March 1, 2022, we terminated the 2020 Swap Agreement and concurrently entered into the 2022 ~~Credit~~Swap Agreement ~~we repaid in full~~to hedge a portion of our outstanding floating SOFR rate debt with a fixed interest rate of 1.162%. Refer to Note 5, Derivative Instruments for further discussion of the 2020 Swap Agreement and ~~terminated~~2022 Swap Agreement.

Interest Expense

On March 1, 2022, the 2019 Revolving Credit Facility and 2020 Swap Agreement were both terminated and ~~amortized~~concurrently replaced with the ~~remaining $0.4 million~~2022 Credit Facilities, Senior Notes and 2022 Swap Agreement.

For the three months ended November 30, 2022 and November 30, 2021, we recorded interest expense on our outstanding debt, including the related amortization of ~~capitalized~~ debt issuance costs and debt discounts, net of the effects of the related interest rate swap agreements, of $16.5 million and $1.9 million, respectively in Interest expense, net in the Consolidated Statements of Income.

Including the related amortization of debt issuance costs and debt discounts, net of the effects of the related interest rate swap agreement, the year-to-date weighted average interest rate on amounts outstanding under our outstanding debt was 3.12% and 2.02% as of November 30, 2022 and August 31, 2022, respectively. Refer to Note 5, Derivative Instruments for further discussion of the ~~2019 Credit Agreement. The~~ 2020 Swap Agreement ~~was~~and 2022 Swap Agreement.

12. COMMITMENTS AND CONTINGENCIES

We accrue non-income-tax liabilities for contingencies when we believe that a loss is probable, and the amount can be reasonably estimated. Judgment is required to determine both probability and the estimated amount of loss. If the reasonable

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estimate of a probable loss is a range, we record the most probable estimate of the loss or the minimum amount when no amount within the range is a better estimate than any other amount. We review accruals on a quarterly basis and adjust, as necessary, to reflect the impact of negotiations, settlements, rulings, advice of legal counsel and other current information. Contingent gains are recognized only when realized.

Uncertain income tax positions are accounted for in accordance with applicable accounting guidance, refer to Note 9, Income Taxes for further details.

Purchase Commitments with Suppliers and Vendors

Purchase obligations represent our legally-binding agreements to purchase fixed or minimum quantities at determinable prices. As of August 31, 2022, we had total purchase obligations with suppliers of $373.9 million. Our total purchase obligations as of August 31, 2022 primarily related to hosting services and data acquisition, and, to a lesser extent, by third-party software providers. Hosting services support our technology investments related to our migration to cloud-based hosting services, the majority of which rely on third-party hosting providers. Data is an integral component of the value we provide to our clients and third-party software mainly includes internal-use software licenses.

Since August 31, 2022, there were no material changes to our contractual obligations. We also ~~terminated~~have contractual obligations related to our lease liabilities and outstanding debt. Refer to Note 10, Leases and Note 11, Debt for information regarding lease commitments and outstanding debt obligations, respectively.

Capital Commitments

As of both November 30, 2022 and August 31, 2022, we had outstanding capital commitments related to an investment of $1.1 million.

Letters of Credit

From time to time, we are required to obtain letters of credit in the ordinary course of business. As of both November 30, 2022 and August 31, 2022, we had $0.5 million of standby letters of credit outstanding. No liabilities related to these arrangements are reflected in the Company's Consolidated Balance Sheets.

Contingencies

Legal Matters

We are engaged in various legal proceedings, claims and litigation that have arisen in the ordinary course of business. The outcome of all the matters against us are subject to future resolution, including the uncertainties of litigation. Based on ~~March 1,~~information available at November 30, 2022, our management believes that the ultimate outcome of these unresolved matters against us, individually or in the aggregate, will not have a material adverse effect on our consolidated financial position, our results of operations or our cash flows.

Income Taxes

We are currently under audit by tax authorities and have reserved for potential adjustments to our provision for income taxes that may result from examinations by, or any negotiated settlements with, these tax authorities. We believe that the final outcome of these examinations or settlements will not have a material effect on our results of operations nor our cash flows. If events occur which ~~will~~indicate payment of these amounts is unnecessary, the reversal of the liabilities would result in the recognition of tax benefits in the period we determine the liabilities are no longer necessary. If our estimates of the federal, state and foreign income tax liabilities are less than the ultimate assessment, additional expense would result.

Sales Tax Matters

On August 8, 2019, we received a ~~one-time benefit~~Notice of ~~$3.5 million~~Intent to Assess (the "First Notice") additional sales taxes, interest and underpayment penalties (the “Sales Taxes”) from the Commonwealth of Massachusetts Department of Revenue (the "Commonwealth") relating to the tax periods from January 1, 2006 through December 31, 2013. On July 20, 2021, we received a Notice of Intent to Assess (the "Second Notice") additional Sales Taxes from the Commonwealth relating to the tax periods from January 1, 2014 through December 31, 2018. On December 29, 2022, we received a Notice of Intent to Assess (the “Third Notice"; cumulatively with the First and Second Notices, the “Notices”) additional Sales Taxes from the Commonwealth relating to the tax periods from January 1, 2019 through June 30, 2021. We have filed an appeal with respect to the First Notice

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and Second Notice, and intend to file an appeal with respect to the Third Notice, to contest all Sales Taxes that may be assessed. We continue to cooperate with the Commonwealth's inquiry with respect to the Notices.

We have concluded that a payment to the Commonwealth is probable. We have recorded an accrual which is not material to our consolidated financial statements. While we believe that the assumptions and estimates used to determine the accrual are reasonable, future developments could result in adjustments being made to this accrual. If we are presented with a formal assessment for any of these matters, we believe that we will ultimately prevail; however, if we do not prevail, the amount of any assessment could have a material impact on our consolidated financial position, results of operations and cash flows.

Indemnifications

As permitted or required under Delaware law and to the maximum extent allowable under that law, we have certain obligations to indemnify each of our current and former officers and directors for certain events or occurrences while the officer or director is, or was, serving at our request in such capacity. These indemnification obligations are valid as long as the director or officer acted in good faith and in a manner the person reasonably believed to be ~~recognized~~in, or not opposed to, the best interests of FactSet, and with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. It is not possible to determine the maximum potential amount for claims made under the indemnification obligations due to the unique set of facts and circumstances likely to be involved in each particular claim and indemnification provision; however, we have purchased a director and officer insurance policy that mitigates our exposure and may enable us to recover a portion of any future amounts paid. We do not believe, based on historical experience and information currently available, that it is probable that any material amounts will be required to be paid under such indemnification agreements.

13.STOCKHOLDERS’ EQUITY

Share Repurchases


	Three Months Ended
	November 30,
(in thousands)	2022		2021
Repurchase of common stock under the share repurchase program(1)	—		(46)
Total cost of shares repurchased(1)	$	—	$	18,639
Amount authorized for future repurchase under the share repurchase program(2)	$	181,300	$	181,300

(1) Amounts do not include 25,450 shares and 6,747 shares surrendered by grantees to satisfy withholding tax obligations due upon the vesting or exercise of stock-based awards valued at $10.8 million and $2.9 million during the ~~third~~three months ended November 30, 2022 and November 30, 2021, respectively.

(2) There is no defined number of shares to be repurchased over a specified timeframe through the life of the program. We may repurchase shares of our common stock under the program from time-to-time in the open market and privately negotiated transactions, subject to market conditions.

For the three months ended November 30, 2022, we did not make any repurchases under our existing program, compared to 46,200 shares repurchased for $18.6 million for the three months ended November 30, 2021. Beginning in the second quarter of fiscal 2022, we suspended our share repurchase program until at least the second half of fiscal 2023, with the exception of potential minor repurchases to offset dilution from grants of equity awards or repurchases to satisfy withholding tax obligations due upon the vesting of stock-based awards. The suspension of our share repurchase program allows us to prioritize the repayment of debt under the 2022 Credit Facilities. Refer to Note 11, Debt for more information on the 2022 Credit Facilities.

Equity-based Awards

Refer to Note 15, Stock-Based Compensation for more information on equity awards issued during the three months ended November 30, 2022 and November 30, 2021.

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Dividends

Our Board of Directors declared dividends during the three months ended November 30, 2022 and November 30, 2021 as follows:

Year Ended

Dividends per
Share of
Common Stock

Record Date

Total $ Amount
(in thousands)

Payment Date

Fiscal 2023

First Quarter

0.89

November 30, 2022

34,010

December 15, 2022

Fiscal 2022

First Quarter

0.82

November 30, 2021

30,973

December 16, 2021

Accumulated Other Comprehensive Loss

The components of AOCL are as follows:


(in thousands)	November 30, 2022		August 31, 2022
Accumulated unrealized gains (losses) on cash flow hedges, net of tax	$	9,704	$	3,149
Accumulated foreign currency translation adjustments	(102,763)		(111,532)
Total AOCL	$	(93,059)	$	(108,383)

14.EARNINGS PER SHARE

Basic earnings per share ("EPS") is computed by dividing net income by the number of weighted average common shares outstanding during the period. Diluted EPS is computed using the treasury stock method, by dividing net income by the cumulative weighted average common shares that are outstanding or are issuable upon the exercise of outstanding stock-based compensation awards during the period. Stock-based compensation awards that are out-of-the-money and performance share units ("PSUs") in which the performance criteria have not been met as of November 30, 2022 are omitted from the calculation of diluted EPS.

A reconciliation of the weighted average shares outstanding used in the basic and diluted earnings per share ("EPS") computation is as follows:


	Three Months Ended
	November 30,
(in thousands, except per share data)	2022		2021
Numerator
Net income used for calculating basic and diluted income per share	$	136,798	$	107,647
Denominator
Weighted average common shares used in the calculation of basic income per share	38,122		37,678
Common stock equivalents associated with stock-based compensation plan(1)	792		963
Shares used in the calculation of diluted income per share	38,914		38,641
Basic income per share	$	3.59	$	2.86
Diluted income per share	$	3.52	$	2.79

(1)Dilutive potential common shares consist of stock options and unvested PSUs. For the three months ended November 30, 2022 and November 30, 2021, there were 545,510 and 298,900 common stock equivalents associated with our stock options excluded from the calculation of diluted EPS, respectively, as they were out-of-the-money and their inclusion would have been anti-dilutive. Common stock equivalents associated with our PSUs excluded from the calculation of diluted EPS for the three months ended November 30, 2022 and November 30, 2021, were 94,162 and 97,511, respectively.

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15. STOCK-BASED COMPENSATION

We measure compensation expense based on the grant date fair value for all stock-based awards made to our employees and to our non-employee directors ("non-employees") using the Black-Scholes model or the lattice-binomial option-pricing model ("binomial model").

We utilize the Black-Scholes model for new stock option grants and restricted stock units ("RSUs") granted to non-employees and common stock acquired under the FactSet Research Systems Inc. Employee Stock Purchase Plan, as Amended and Restated ("ESPP"). We use the binomial model for new employee stock option grants and employee RSUs and PSUs to estimate the grant-date fair value. We refer to RSUs and PSUs, collectively, as "Restricted Stock Awards."

Both models involve certain estimates and assumptions such as:

•Risk-free interest rate- based on the U.S. Treasury yield curve in effect at the time of grant with maturities equal to the expected terms of the stock-based awards granted.

•Expected life -the weighted average period the stock-based awards are expected to remain outstanding.

•Expected volatility- based on a blend of historical volatility of the stock-based award's useful life and the weighted average implied volatility for call option contracts traded in the 90 days preceding the stock-based award's valuation date.

•Dividend yield -the expectation of dividend payouts based on our history.

Additionally, the binomial model incorporates market conditions, vesting restrictions and exercise patterns.

For Restricted Stock Awards, the grant date fair value is measured by reducing the grant date price of our common stock by the present value of the dividends expected to be paid on the underlying stock during the requisite service period, discounted at the appropriate risk-free interest rate.

For stock-based awards, we use the straight-line method to recognize compensation expense over the requisite service period. The amount of compensation expense that is recognized on any date is at least equal to the vested portion of the award on that date. Compensation expense for PSUs is recognized if the achievement of the performance condition is determined to be probable. We review the PSU performance conditions quarterly to ensure the compensation expense appropriately reflects the Company's expected achievement, as these awards are subject to upward or downward adjustment depending on whether the actual financial performance is above or below target levels, with the PSU payout ranging from 0% to 150% of the number of target shares. Compensation expense for stock-based awards is recorded net of estimated forfeitures, which are based on historical forfeiture rates and are revised if actual forfeitures differ from those estimates.

We recognized total stock-based compensation expense of $12.2 million and $10.4 million during the three months ended November 30, 2022 and November 30, 2021, respectively. As of November 30, 2022, $153.6 million of total unrecognized compensation expense related to non-vested awards is expected to be recognized over a weighted average period of 3.4 years. There was no stock-based compensation capitalized as of November 30, 2022 and November 30, 2021.

Employee Stock Option Awards

Under the FactSet Research Systems Inc. Stock Option and Award Plan, as Amended and Restated (the "LTIP"), we granted the following stock options for the three months ended November 30, 2022 and November 30, 2021, which are valued using the lattice-binomial option-pricing model. As of November 30, 2022, we had 4.2 million stock-based awards available for grant under the LTIP.


	Three Months Ended
	November 30,
	2022		2021
Stock options granted(1)	267,296		299,702
Weighted average exercise price	$	426.25	$	434.82
Weighted average grant date fair value	$	125.59	$	102.40

(1) The majority of the stock options granted relate to the November 1, 2022 and November 1, 2021 annual employee grants that both vest 20% annually on the anniversary date of the grant and are fully vested after five years, expiring ten years from the date of grant.

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We granted 266,051 employee stock options as part of the November 1, 2022 annual employee grant. The estimated fair value of this grant leveraged the following assumptions:


November 1, 2022 Annual Employee Grant Details
Risk-free interest rate			3.99% - 4.51%

Expected life (years)			6.62

Expected volatility			24.7%

Dividend yield			0.83%

Estimated fair value			$125.62
Exercise price			$426.25

Employee Restricted Stock Awards

Our LTIP provides for the grant of stock-based awards, including Restricted Stock Awards. The Restricted Stock Awards are subject to continued employment over a specified period. The Restricted Stock Awards granted to employees entitle the holders to shares of common stock as the Restricted Stock Awards vest over time, but not to dividends declared on the underlying shares, while the stock subject to the Restricted Stock Awards is unvested. Vesting of the shares underlying the PSUs are also subject to achieving certain specified performance levels during the measurement period subsequent to the date of grant.

Under the LTIP, we granted the following Restricted Stock Awards with the associated weighted average grant date fair value, assuming a target payout for PSUs, for the three months ended November 30, 2022 and November 30, 2021.


	Three Months Ended
	November 30,
	2022		2021
RSUs Granted(1)	47,038		43,613
PSUs Granted(2)	34,482		30,460
Total Restricted Stock Awards	81,520		74,073
Restricted Stock Awards weighted average grant date fair value	$	415.31	$	424.14

(1) The majority of the RSUs granted relate to the November 1, 2022 and November 1, 2021 annual employee grants that both vest 20% annually on the anniversary date of grant and are fully vested after five years.

(2) The majority of the PSUs granted relate to the November 1, 2022 and November 1, 2021 annual employee grants that both cliff vest on the third anniversary of the grant date, subject to the achievement of certain performance metrics. The ultimate number of common shares that may be earned pursuant to these PSU awards range from 0% to 150% of the number of target shares, depending on the level of the Company's achievement of stated financial performance objectives.

Employee Stock Purchase Plan

Shares of FactSet common stock may be purchased by eligible employees under our ESPP in three-month intervals. The purchase price is equal to 85% of the lesser of the fair market value of our common stock on the ~~2020 Swap Agreement~~first day or the last day of each three-month offering period. Employee purchases may not exceed 10% of their gross compensation, and there is a $25,000 contribution limit per employee during an offering period. Shares purchased through the ESPP cannot be sold or otherwise transferred for 18 months after purchase. Dividends paid on shares held in the ESPP are used to purchase additional ESPP shares at the market price on the dividend payment date.

Stock-based compensation expense related to the ESPP was $0.7 million for the three months ended November 30, 2022 and $0.5 million for the three months ended November 30, 2021. As of November 30, 2022 the ESPP had 93,853 shares reserved for future issuance.

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16. SEGMENTINFORMATION

Operating segments are defined as components of an enterprise that have the following characteristics: (i) they engage in business activities from which they may earn revenue and incur expense, (ii) their operating results are regularly reviewed by the chief operating decision maker ("CODM") for resource allocation decisions and performance assessment, and (iii) their discrete financial information is available. Our Chief Executive Officer functions as our CODM.

Our operating segments are consistent with our reportable segments and how we, including our CODM, manage our business and the geographic markets in which we serve. Our internal financial reporting structure is based on three segments: the Americas; EMEA; and Asia Pacific.

The Americas segment serves our clients throughout North, Central, and South America. The EMEA segment serves our clients in Europe, the Middle East, and Africa. The Asia Pacific segment serves our clients in Asia and Australia. Segment revenues reflect sales to our clients based on their respective geographic locations.

The following tables reflect the results of operations of our segments as of ~~the termination date.~~November 30, 2022 and November 30, 2021:


(in thousands)	Americas		EMEA		Asia Pacific		Total
For the three months ended November 30, 2022
Revenues	$	323,367	$	130,738	$	50,710	$	504,815
Operating income	$	67,531	$	67,322	$	37,042	$	171,895
Capital expenditures	$	15,754	$	573	$	1,633	$	17,960

(in thousands)	Americas		EMEA		Asia Pacific		Total
For the three months ended November 30, 2021
Revenues	$	266,913	$	115,003	$	42,809	$	424,725
Operating income	$	55,498	$	40,654	$	26,509	$	122,661
Capital expenditures	$	7,203	$	110	$	1,270	$	8,583

Segment Total Assets

The following table reflects the total assets for our segments:


(in thousands)	November 30, 2022		August 31, 2022
Segment Assets
Americas	$	3,214,785	$	3,191,313
EMEA	518,976		580,450
Asia Pacific	243,779		242,542
Total assets	$	3,977,540	$	4,014,305

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Management’s Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") should be read in conjunction with the Consolidated Financial Statements and related ~~notes~~Notes included in this Quarterly Report on Form 10-Q, our Annual Report on Form 10-K for the fiscal year ended August 31, ~~2021,~~2022, our Current Reports on Form 8-K and our other filings with the Securities and Exchange Commission. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those discussed below. Factors that could cause such differences include, but are not limited to, those identified below and those discussed in Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended August 31, ~~2021.~~2022.

Our MD&A is designed to provide a reader of our financial statements with a narrative from the perspective of our management on our financial condition, results of operations, liquidity and certain other factors that may affect our future results. Our MD&A is presented in the following sections:

•Executive Overview

•Annual Subscription Value ("ASV")

•Client and User Additions

•Employee Headcount

•Results of Operations

•Non-GAAP Financial Measures

•Liquidity and Capital Resources

•Off-Balance Sheet Arrangements

•Foreign Currency Exposure

•Critical Accounting ~~Policies and~~ Estimates

•New Accounting Pronouncements

Executive Overview

For ~~over 40~~45 years, ~~the FactSet~~our platform has delivered expansive data, sophisticated analytics, and flexible technology ~~that~~used by global financial professionals ~~need~~ to power their critical investment workflows. ~~More~~As of November 30, 2022, we had more than ~~171,000~~7,600 clients comprised of approximately 181,000 investment professionals, including asset managers, ~~asset owners,~~ bankers, wealth managers, asset owners, channel partners, hedge funds, corporate users, private equity and venture capital ~~professionals,~~professionals. Our on- and ~~others use our personalized~~off-platform solutions ~~to identify opportunities, explore ideas, and gain a competitive advantage. Our solutions~~ span the investment lifecycle including investment research, portfolio construction and analysis, trade execution, performance measurement, risk management and ~~reporting across the investment lifecycle.~~reporting. Our revenues are primarily derived from subscriptions to our multi-asset class data and solutions powered by our connected content, referred to as our "content refinery." Our products and services include workstations, portfolio analytics and enterprise solutions.

We ~~are focused on growing~~operate our business through three ~~reportable segments ("segments"):~~segments: the Americas, EMEA and Asia Pacific. Refer to Note 16, Segment Information,~~, in the Notes to the Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q~~ for further discussion. ~~Within~~For each of our segments, we ~~deliver insight and information~~execute our strategy through our three ~~workflows:~~workflow solutions: Research & ~~Advisory Solutions;~~Advisory; Analytics & ~~Trading Solutions;~~Trading; and Content & Technology Solutions ("CTS").

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Business Strategy

~~Client~~As the needs ~~and market dynamics continue to~~of our clients evolve, ~~at an accelerated pace with an increasing demand for differentiated,~~they seek personalized and connected data, ~~an ongoing shift to~~tools for multi-asset class investing and ~~cost rationalization as the shift from active to passive investing continues.~~reduced costs. Clients are also seeking ~~new~~ cloud-based solutions, ~~that enable self-service and automation,~~ open and flexible systems and increased efficiencies ~~when integrating and managing data as part of~~to support their ~~own broader~~ digital transformations.

~~FactSet’s~~Our strategy ~~focuses on building~~is to build the leading open content and analytics platform ~~that delivers~~to deliver differentiated advantages for our clients’ success, in keeping with our purpose of enabling the investment community to see more, think bigger and do their best work. We want to be the trusted partner of choice for clients, to anticipate their needs and provide them with the most innovative solutions to make them more efficient. This includes transforming the way our clients discover, decide, and act on an opportunity using our digital platform; purposefully increasing our pace and speed to market by streamlining how we work; and investing in our future workforce.success. To execute ~~on our~~this strategy, we plan ~~on the following:~~on:

•Growing our digital platform: ~~Scaling~~We are scaling up our content refinery ~~by providing the most~~to offer a comprehensive and connected inventory of industry, proprietary and third-party data for the financial ~~community, including~~community. This data includes granular data for key industry verticals, private companies, wealth management, real-time data, and environmental, social and governance data ("ESG"). ~~Driving next-generation~~We are driving personalized workflow solutions ~~by creating personalized and integrated solutions to streamline workflows which includes solutions~~ for financial professionals, including asset managers, bankers, wealth managers, asset owners, ~~sell side, wealth~~channel partners, hedge funds, corporate users and ~~corporate clients.~~private equity and venture capital professionals. Our goal is to ~~deliver tangible efficiencies to our clients by connecting~~offer an open ecosystem of cloud-based data and analytics, ~~with a cloud based eco-system,~~providing solutions and content that is accessible and flexible through many delivery methods, enabling ~~them~~our clients to more efficiently manage ~~work more effectively through an integrated investment lifecycle.~~their workflows.

•Delivering execution excellence: ~~Building~~We strive to be innovative and collaborative across our organization to remain responsive, flexible and agile. Our open ecosystem provides a more agile and digital first-minded organization that increases the speed of our product creation and go-to-market strategy. To capitalize on market trends and give our clients innovative tools, we plan to release new products built on a cloud-based digital foundation ~~as well as migrating~~that powers client personalization and efficiency, firm-type product development and core process automation. We employ technology to accelerate content collection for industry, proprietary and third-party data. Additionally, our ~~existing data~~sales force is improving price realization by focusing on productivity, efficiency, and ~~applications~~improved client outcomes. We are also optimizing our operations and cost base to improve returns on our investments in people and product. Finally, we are committed to promoting a modern work environment that preserves the ~~cloud. Additionally, we expect to rationalize our existing product portfolio to reinvest in higher return products.~~benefit of flexibility while retaining talent, fostering creativity, innovation, and collaboration, and enabling mentorship.

•Driving a growth mindset: ~~Recruiting,~~To drive sustainable growth, we are recruiting, training and empowering a diverse and operationally efficient ~~workforce to drive sustainable growth. To drive~~workforce. As a ~~more~~ performance-based culture, we are investing in talent ~~who~~that can create leading technological solutions and efficiently execute our ~~go-to-market strategy~~strategy. We use partnerships and ~~achieve~~acquisitions to accelerate our growth ~~targets.~~in strategic areas.

~~At the center of our~~Our strategy ~~is the~~centers on a relentless focus on our clients and their FactSet experience. We ~~want~~aim to be a trusted partner and service provider, offering ~~hyper-personalized~~personalized digital products ~~for clients~~powered by cognitive computing to research ideas and uncover relevant ~~insights, and leverage cognitive computing to help get the most out of their data and analytics.~~insights. Additionally, we continually evaluate business opportunities such as partnerships and acquisitions ~~and partnerships~~ to ~~help us expand~~increase our capabilities and competitive ~~differentiators across the investment portfolio lifecycle.~~differentiation.

We are focused on growing our global business inthrough three segments: the Americas, EMEA and Asia Pacific. We believe this ~~geographical~~geographic strategic alignment helps us better manage our resources, target our solutions and interact with our clients. We further execute on our growth strategy by offering data, products and analytical applications within our three workflow solutions: Research & Advisory; Analytics & Trading; and CTS.

Fiscal ~~2022 Second~~2023 First Quarter in Review

Revenues in the ~~second~~first quarter of fiscal ~~2022~~2023 were ~~$431.1~~$504.8 million, an increase of ~~10.0%~~18.9% from the prior year comparable period. Revenues increased across ~~each of~~all our ~~geographic~~ segments, primarily in the Americas ~~followed by~~and, to a lesser extent, EMEA and Asia Pacific, supported by increased revenues ~~in all~~from each of our workflow solutions, mainly in CTS driven by the acquisition of CGS and, to a lesser extent, by Research & Advisory ~~followed by~~and Analytics & ~~Trading and CTS.~~Trading. Organic revenues contributed to ~~9.9%~~8.3% of ~~the~~our growth during the ~~second~~first quarter of fiscal ~~2022,~~2023, compared with the prior year period. Organic revenues exclude the effects of acquisitions and dispositions completed in the last 12 months, the impacts of foreign currency movements on the current year period and the amortization of deferred revenues' fair value adjustments from purchase accounting. Refer to Part I, Item 2. Results of Operations, Non-GAAP Financial Measures in ~~Part I, Item 2~~the MD&A of this Quarterly Report on Form 10-Q for a reconciliation between revenues and organic revenues.

As of ~~February 28,~~November 30, 2022, organic annual subscription value ("Organic ASV") plus Professional Services totaled ~~$1.74~~$1.85 billion, an increase of ~~9.4%~~8.8% over ~~February 28,~~November 30, 2021. Organic ASV increased across all our segments, with the majority of the increase

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related to the Americas ~~followed by~~and, to a lesser extent, EMEA and Asia ~~Pacific.~~Pacific, supported by increases in our workflow solutions, mainly Research & Advisory and Analytics & Trading, followed by CTS. Refer to Part I, Item 2 Annual Subscription Value in ~~Part I, Item 2~~

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the MD&A of this Quarterly Report on Form 10-Q for the definitions of Organic ASV and Organic ASV plus Professional Services.

Operating ~~income grew 6.2%~~margin increased to 34.1% during the three months ended November 30, 2022, compared with 28.9% in the prior year period. This increase in operating margin was due primarily to growth in revenues, lower employee compensation expense, data costs and ~~diluted~~occupancy costs, as well as, an impairment charge incurred in the prior year period, partially offset by higher amortization of intangible assets and royalty fees, when expressed as a percentage of revenues.

Diluted earnings per share ("EPS") increased ~~13.6%~~26.2% for the three months ended ~~February 28,~~November 30, 2022, compared with the prior year period. Operating margin decreased to 28.6% during the three months ended February 28, 2022 compared with 29.6% in the prior year period. This decrease in operating margin on a year-over-year basis was primarily due to impairment charges related to vacating certain leased office space and higher professional fees driven by costs incurred in preparation for the acquisition of CUSIP Global Services (“CGS"), partially offset by growth in revenues and lower costs related to employee compensation and computer depreciation, when expressed as a percentage of revenue.

CUSIP Global Services Acquisition

On December ~~27,~~24, 2021, we entered into a definitive agreement to acquire CGS ~~previously operated by S&P Global Inc. on behalf of the American Bankers Association,~~ for ~~$1.925~~$1.932 billion in cash, ~~subject to a~~inclusive of working capital ~~adjustment.~~adjustments. The acquisition was completed on March 1, 2022. CGS,operating on behalf of the American Bankers Association ("ABA"), manages a database of 60 different data elements uniquely identifying more than 50 million global financial instruments. It is the foundation for security master files relied on by critical front, middle and back-office functions. CGS is the ~~exclusive~~ provider of Committee on Uniform Security Identification Procedures ("CUSIP") and CUSIP International Number System ("CINS") identifiers globally and also acts as the official numbering agency for International Securities Identification Number ("ISIN") identifiers in the United States. We ~~anticipate~~believe that the CGS acquisition will significantly expand our critical role in the global capital markets. ~~Revenue~~Revenues from CGS ~~will be~~are recognized based on geographic business activities in accordance with how our operating segments are currently aligned. CGS ~~will function~~functions as part of CTS.

The purchase price for the CGS acquisition was financed from the net proceeds of the issuance of the Senior Notes and borrowings under the 2022 Credit Agreement. In connection with the entry into the 2022 Credit Agreement, on March 1, 2022, we entered into the 2022 Swap Agreement and repaid in full and terminated the 2019 Credit Agreement and the 2020 Swap Agreement. Facilities. Refer to Note ~~17,~~6, ~~Subsequent Events~~Acquisitions ~~, in the Notes to the Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q~~andNote 11, Debt for more information on these defined terms as well as our acquisition of CGS, the ~~issuance of the~~Senior Notes and the 2022 Credit ~~Agreement and the 2022 Swap Agreement.~~Facilities.

COVID-19 Update

A novel strain of coronavirus, now known as COVID-19, ~~("COVID-19"),~~ was first reported in December 2019, ~~and it has since extensively impacted the global health and economic environment,~~ with the World Health Organization characterizing COVID-19 as a pandemic on March 11, 2020. In response to the COVID-19 pandemic, we implemented a business continuity plan with a dedicated incident management team to respond quickly and provide ongoing guidance so that we could continue offering our clients uninterrupted products, services and support while also protecting our employees. We believe these actions have been successful and that the pandemic, and our responses, have not significantly affected our financial results for the three months ended ~~February 28,~~November 30, 2022.

At the outset of the pandemic, we required the vast majority of our employees at our offices across the globe (including our corporate headquarters) to work remotely and implemented global travel restrictions for our employees. Since that time, we have begun to re-open many of our offices globally with a focus on safety, while acting consistently with applicable local regulations. We anticipate that the ability to open offices will vary significantly from region to region based on a number of factors, including the availability of COVID-19 vaccines and the spread of COVID-19 variants. Our offices will not re-open fully until local authorities permit us to do so and our own criteria and conditions to ensure employee health and safety are satisfied.

As of ~~February 28,~~November 30, 2022, there have been minimal interruptions in our ability to provide our products, services and support to our clients. Working remotely has had relatively little impact on the productivity of our employees, including our ability to gather content. We continue to work closely with our clients to provide consistent access to our products and services and have remained flexible to achieve client priorities.

Based on our success working in a remote environment during the COVID-19 pandemic, we have implemented a new work standard under which employees in many of our locations, where permitted by local laws and regulations, and where the role permits, will have the opportunity to choose between different work arrangements. These include working in a hybrid arrangement, where an employee can split time between working from the office and working from a pre-approved remote location, or a fully remote arrangement, where an employee can work entirely from a pre-approved remote location.

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Our revenues, earnings and ASV are relatively stable and predictable as a result of our subscription-based business ~~model. To date,~~model and, accordingly, the COVID-19 pandemic has not had a material negative impact on our revenues, earnings or ASV. As we continue to work in remote and hybrid environments, reductions in discretionary spending, particularly travel and entertainment, have more than offset any related increased expenses. Given our transition to our new work standard, we anticipate that many of these expense reductions will continue going forward, including incurring less travel and entertainment spending than we did pre-pandemic. We also are reassessing our real estate footprint to better reflect these new work arrangements and seeking to reduce our spending on office space that will no longer be necessary.

Refer to Part I, Item 1. Business, Human Capital Management, How We Work and Item 1A. Risk Factors, Operational Risks of our Annual Report on Form 10-K for the fiscal year ended August 31, ~~2021~~2022 for further discussion of the potential impact of the COVID-19 pandemic on our business.

Ukraine/Russia Conflict

As the ~~Russian invasion of~~military conflict between Russia and Ukraine ~~continues~~is ongoing, we continue to ~~evolve, we are closely monitoring~~monitor the ~~current and~~ potential impact on our business, our people and our clients. We have taken all necessary steps to ensure compliance with all applicable regulatory restrictions on international trade and financial transactions. ~~On March 18, 2022, we announced that we are discontinuing~~We have discontinued all commercial operations and delivery of products and services to clients ~~inside Russia. In addition, we~~in Russia; have ~~identified~~terminated all ~~active~~contracts with vendors in ~~Russia~~Russia; and ~~are terminating our contracts with them. We~~ have suspended all new business, trials and prospecting activities in Russia. Total revenues associated with clients in Russia ~~are~~were not material to our consolidated financial results, and ~~we anticipate~~ termination of Russian vendors ~~will~~has not ~~have~~had a material impact on our business or client relationships. We have no offices in Russia or Ukraine, and none of our employees or contractors has been directly impacted by the crisis. We ~~are monitoring~~continue to monitor the regional and global ramifications of the ~~unfolding~~ events in the area, ~~are in close contact with our office in Latvia,~~including the threatened disruptions to global energy markets, and are reviewing our business continuity plans to ensure that we are prepared in the event ~~this office is~~any of our offices are impacted. Our cybersecurity teams are ~~on high alert and~~ ready to respond in the event of anany attempted systems compromise.

Annual Subscription Value ("ASV")

We believe ASV reflects our ability to grow recurring revenues and generate positive cash flow and is ~~the~~a key indicator of the successful execution of our business strategy.

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–"ASV" at any point in time represents our forward-looking revenues for the next 12 months from all subscription services currently being supplied to clients, excluding revenues from Professional Services.

–"Organic ASV" at any point in time equals our ASV excluding ASV from acquisitions and dispositions completed within the last 12 months and the effects of foreign currency ~~movements on the current year period.~~movements.

–"Professional Services" are revenues derived from project-based consulting and ~~implementation.~~implementation, annualized over the past 12 months.

–"Organic ASV plus Professional Services" at any point in time equals the sum of Organic ASV and Professional Services.

Organic ASV plus Professional Services

The following table presents the calculation of Organic ASV plus Professional Services as of ~~February 28,~~November 30, 2022. With proper notice provided as contractually required, our clients can add to, delete portions of, or terminate service, subject to certain limitations.


(in millions)	As of ~~February 28,~~November 30, 2022
As reported ASV plus Professional Services(1)	$	~~1,750.2~~2,016.0
Currency impact(2)	~~0.9~~ (1.6)
Acquisition ASV(3)	~~(7.2)~~(167.9)
Organic ASV plus Professional Services	$	~~1,743.9~~1,846.5
Organic ASV plus Professional Services growth rate	~~9.4~~8.8		%

(1)Includes ~~$24.2~~$23.0 million in Professional ~~Services as of February 28, 2022.~~Services.

(2)The impact from foreign currency movements.

(3)Acquired ASV from acquisitions completed within the last 12 months.

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As of ~~February 28,~~November 30, 2022, Organic ASV plus Professional Services was ~~$1.74~~$1.85 billion, an increase of ~~9.4%~~8.8% compared with ~~February 28,~~November 30, 2021. ~~The increase in year-over-year~~ Organic ASV ~~was largely attributed~~increased due mainly to increased sales to existing clients ~~followed by~~and, to a lesser extent, price increases to existing clients and new client sales, ~~and price increases,~~ partially offset by existing client cancellations.

Organic ASV increased across all our ~~geographic~~ segments, with the majority of the increase related to the Americas, followed by EMEA and Asia Pacific. This increase was driven by additional sales in our workflow solutions, primarily in Research & Advisory ~~followed by~~and Analytics & Trading, and, to a lesser extent, by CTS. Sales increased in Research & Advisory mainly due to higher demand for our workstations. Sales increased in Analytics & Trading mainly from our ~~portfolio analytics solutions and~~ performance and reporting ~~products.~~ CTSproducts, portfolio and benchmark services and portfolio analytics solutions. CTS sales increased primarily due to purchases of company financial data, such as fundamentals, estimates and ~~estimates,~~ownership, along with data management solutions to empower data connectivity.

Segment ASV

As of ~~February 28,~~November 30, 2022, ASV from the Americas represented ~~62.9%~~64% of total ASV and was ~~$1,085.6~~$1,271.0 million, an increase from ~~$985.2~~$1,054.9 million as of ~~February 28,~~November 30, 2021. Americas Organic ASV increased to ~~$1,079.3~~$1,146.6 million as of ~~February 28,~~November 30, 2022, a ~~9.6%~~8.5% increase ~~compared with February 28, 2021.~~from the prior year period. The increased Organic ASV in the Americas was primarily driven by increased sales of Research & Advisory and Analytics & Trading.

As of ~~February 28,~~November 30, 2022, ASV from EMEA ~~was $459.9 million, representing 26.6%~~equaled 26% of total ASV and was $521.1 million, an increase from ~~$427.6~~$452.0 million as of ~~February 28,~~November 30, 2021. EMEA Organic ASV increased to ~~$459.6~~$487.0 million as of ~~February 28,~~November 30, 2022, a ~~7.8%~~8.8% increase ~~compared with February 28, 2021.~~from the prior year period. The EMEA Organic ASV increase was mainly driven by higher sales of Research & Advisory and Analytics & Trading, and, to a lesser extent CTS.

As of ~~February 28,~~November 30, 2022, ASV from Asia Pacific ~~ASV was $180.5 million, representing 10.5%~~represented 10% of total ASV and was $200.9 million, an increase from ~~$159.8~~$175.4 million as of ~~February 28,~~November 30, 2021. Asia Pacific Organic ASV increased to ~~$180.9~~$189.9 million as of ~~February 28,~~November 30, 2022, a ~~14.3%~~11.1% increase ~~compared with February 28, 2021.~~

The increase in Organic ASV across all our segments was largely attributed to increased sales to existing clients, followed by new client sales and price increases, partially offset by existing client cancellations. Organic ASV increased infrom the Americas primarily due to higher sales in Research & Advisory, followed by Analytics & Trading. EMEA Organic ASV increased due to higher sales in Research & Advisory, followed by CTS and Analytics & Trading.prior year period. The ~~increase in~~ Asia Pacific Organic ASV increase was ~~mainly driven by higher~~primarily due to increased sales ~~in Research & Advisory, followed by~~of Analytics & Trading and ~~CTS.~~Research & Advisory.

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Buy-side and Sell-side Organic ASV Growth

~~Buy-side~~The buy-side and sell-side Organic ASV growth rates at ~~February 28,~~November 30, 2022, compared with ~~February 28,~~November 30, 2021, were ~~8.8%~~8.0% and ~~12.9%~~14.4%, respectively. Buy-side clients account for approximately ~~84%~~83% of our Organic ASV, consistent with the prior year period, and primarily include asset managers, wealth managers, asset owners, channel partners, hedge funds, and corporate firms. The remainder of our Organic ASV is derived from sell-side firms and primarily include broker-dealers, banking and advisory, private equity and venture capital firms.

Client and User Additions

The table below presents our total clients and users:


		As of February 28, 2022	As of February 28, 2021	Change			As of November 30, 2022		As of November 30, 2021	Change
Clients(1)	Clients(1)	7,172	6,103	17.5	%	Clients(1)	7,631	7631	6,759	12.9	%
Users	Users	171,341	153,355	11.7	%	Users	180,959		162,161	11.6	%

(1)The client count includes clients with ASV of $10,000 and above.

Our total client count was ~~7,172~~7,631 as of ~~February 28,~~November 30, 2022, a net increase of ~~17.5%,~~12.9% or ~~1,069~~872 clients in the last 12 months, mainly due to an increase in corporate ~~and~~clients, wealth management ~~clients. As part~~clients, private equity and venture capital firms and channel partners. We believe this increase was primarily due to our expanded suite of ~~our long-term growth strategy, we continue to focus on expanding and cultivating relationships with our existing client base through our~~ on- and off-platform ~~workflow-focused~~ solutions, ~~connected~~personalized content, and ~~client-focused services.~~continued execution excellence by our sales and client facing teams.

As of ~~February 28,~~November 30, 2022, there were ~~171,341~~180,959 professionals using FactSet, representing a net increase of ~~11.7%,~~11.6% or ~~17,986~~18,798 users in the last 12 months, primarily driven ~~primarily~~ by an increase ~~of banking and private equity and venture capital clients~~in wealth advisory professionals from ~~the sell-side and asset managers, corporate and~~our wealth management clients as well as an increase in sell-side users from ~~the buy-side.~~our banking clients. The increase in users was mainly due to ~~the addition of~~ new wealth management clients and increased new hiring at our banking clients.

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Annual ~~client~~ASV retention was greater than 95% of ASV and 92% when expressed as a percentage of clients for the period ended ~~February 28,~~November 30, 2022, with both percentages consistent with the prior year period. When expressed as a percentage of clients, annual retention was approximately 92% for the period ended February 28, 2022, an improvement from approximately 90% for the period ended February 28, 2021.

Employee Headcount

As of ~~February 28,~~November 30, 2022, our employee headcount was ~~10,784, up 1.2%~~11,627, an increase of 6.7% compared with 10,898 employees as of November 30, 2021. This growth in ~~the past 12 months from 10,660,~~headcount was primarily due ~~primarily~~ to an increase ~~in net new employees~~ of ~~5.2%~~7.1% in Asia Pacific, ~~partially offset by a decrease of 9.0%~~6.5% in the Americas and ~~0.1%~~5.1% in EMEA. ~~Of our total employee headcount at February 28,~~At November 30, 2022, ~~7,147~~7,698 employees were located in Asia Pacific, ~~2,265 were located~~2,495 in the Americas, and ~~1,372 were located~~1,434 in EMEA.

Results of Operations

For an understanding of the significant factors that influenced our performance for the three ~~and six~~ months ended ~~February 28,~~November 30, 2022 and ~~February 28,~~November 30, 2021, the following discussion should be read in conjunction with the Consolidated Financial Statements and related ~~notes~~Notes presented in this Quarterly Report on Form 10-Q.

Table of Contents

The following table summarizes the results of operations for the periods described:


		Three Months Ended							Six Months Ended									Three Months Ended
		February 28,				% Change			February 28,						% Change			November 30,						Change		% Change
(in thousands, except per share data)	(in thousands, except per share data)	2022		2021				2022			2021			% Change			2022			2021			Change
Revenues	Revenues	$	431,119	$	391,788	10.0	%		$	855,844		$	779,993		9.7	%	Revenues	$	504,815		$	424,725		$	80,090	18.9	%
Cost of services	Cost of services	$	199,395	$	195,523	2.0	%		$	406,544		$	383,611		6.0	%	Cost of services	227,042			207,131			$	19,911	9.6	%
Selling, general and administrative	Selling, general and administrative	$	108,376	$	80,132	35.2	%		$	203,291		$	159,219		27.7	%	Selling, general and administrative	105,596			91,238			$	14,358	15.7	%
Asset impairments																	Asset impairments	282			3,695			$	(3,413)	(92.4)	%
Operating income	Operating income	$	123,348	$	116,133	6.2	%		$	246,009		$	237,163		3.7	%	Operating income	$	171,895		$	122,661		$	49,234	40.1	%

Net income	Net income	$	109,938	$	96,643	13.8	%		$	217,585		$	197,849		10.0	%	Net income	$	136,798		$	107,647		$	29,151	27.1	%
Diluted weighted average common shares																	Diluted weighted average common shares	38,914			38,641			273
Diluted earnings per common share	Diluted earnings per common share	$	2.84	$	2.50	13.6	%		$	5.63		$	5.12		10.0	%	Diluted earnings per common share	$	3.52		$	2.79		$	0.73	26.2	%
Diluted weighted average common shares		38,761		38,620					38,628			38,658

Revenues

Three months ended ~~February 28,~~November 30, 2022 compared with three months ended ~~February 28,~~November 30, 2021

Revenues for the three months ended ~~February 28,~~November 30, 2022 were ~~$431.1~~$504.8 million, an increase of ~~10.0%~~18.9%. The increase in revenues ~~were~~was largely attributed to increased sales to existing clients ~~inclusive of~~and, to a lesser extent, price increases ~~followed by~~to existing clients and new client sales, partially offset by existing client cancellations. Revenues increased across all our ~~geographic segments,~~segments, primarily from the Americas, followed by EMEA and Asia Pacific, driven by increased revenues in all of our workflow solutions, ~~primarily~~mainly in CTS driven by the acquisition of CGS, followed by Research & Advisory ~~followed by~~and Analytics & Trading, ~~and CTS,~~ compared with the prior year. Organic revenues increased to ~~$430.8~~$459.9 million for the three months ended ~~February 28,~~November 30, 2022, a ~~9.9%~~8.3% increase over the prior year period. Refer to Part I, Item 2. Results of Operations, Non-GAAP Financial Measures in the MD&A of this Quarterly Report on Form 10-Q for further discussion on organic revenues.

The ~~10.0% increase~~growth in revenues of 18.9% was ~~composed~~reflective of ~~growth in~~ organic revenues growth of ~~9.9%~~8.3% and a ~~50 basis point~~11.4% increase ~~from deferred revenues fair value adjustments from purchase accounting and~~primarily due to the impact of acquisition-related revenues, partially offset by a ~~40 basis point~~0.8% decrease from foreign currency exchange rate fluctuations.

~~Six months ended February 28, 2022 compared with six months ended February 28, 2021~~

Revenues for the six months ended February 28, 2022 was $855.8 million, an increase of 9.7%. The increase in revenues were largely attributed to increased sales to existing clients, inclusive of price increases, followed by new client sales, partially offset by existing client cancellations. Revenues increased across all our geographic segments, primarily from the Americas, followed by EMEA and Asia Pacific driven by increased revenues in all of our workflow solutions, primarily in Research & Advisory, followed by Analytics & Trading and CTS, compared with the prior year. Organic revenues increased to $853.9 million for the six months ended February 28, 2022, a 9.4% increase over the prior year period.

The revenue growth of 9.7% was reflective of organic revenue growth of 9.4%, a 60 basis point increase from deferred revenue fair value adjustments from purchase accounting and acquisition-related revenue, partially offset by a 30 basis point decrease from foreign currency exchange rate fluctuations.

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Revenues by Segment

Three Months Ended Six Months Ended
February 28, % Change February 28, % Change
(in thousands) 2022 2021 2022 2021
Americas $ 273,659 $ 247,991 10.4 % $ 540,572 $ 492,327 9.8 %
% of revenues 63.5 % 63.3 % 63.2 % 63.1 %
EMEA $ 114,591 $ 105,493 8.6 % $ 229,594 $ 211,270 8.7 %
% of revenues 26.6 % 26.9 % 26.8 % 27.1 %
Asia Pacific $ 42,869 $ 38,304 11.9 % $ 85,678 $ 76,396 12.1 %
% of revenues 9.9 % 9.8 % 10.0 % 9.8 %
Consolidated $ 431,119 $ 391,788 10.0 % $ 855,844 $ 779,993 9.7 %
The following table summarizes our revenues by segment for the periods described:


	Three Months Ended
	November 30,						% Change

(in thousands)	2022			2021
Americas	$	323,367		$	266,913		21.2	%
% of revenues	64.1		%	62.8		%
EMEA	$	130,738		$	115,003		13.7	%
% of revenues	25.9		%	27.1		%
Asia Pacific	$	50,710		$	42,809		18.5	%
% of revenues	10.0		%	10.1		%
Consolidated	$	504,815		$	424,725		18.9	%

Table of Contents

Three months ended ~~February 28,~~November 30, 2022 compared with three months ended ~~February 28,~~November 30, 2021

Americas

~~Revenues from our~~ Americas ~~segment~~revenues increased ~~10.4%~~21.2% to ~~$273.7~~$323.4 million during the three months ended ~~February 28,~~November 30, 2022, compared with ~~$248.0~~$266.9 million from the same period a year ago. The increased revenues were driven by higher sales in all of our workflow solutions, primarily in CTS, followed by Research & ~~Advisory, followed by Analytics & Trading and CTS.~~Advisory. The growth in revenues of ~~10.4%~~21.2% was reflective of ~~increased~~a 7.6% increase in organic revenues ~~of 10.3%~~ and a ~~10 basis point~~13.6% increase ~~related to deferred revenues fair value adjustments~~ from ~~purchase accounting and~~ acquisition-related revenues.

EMEA

~~Revenues from our~~ EMEA ~~segment~~revenues increased ~~8.6%~~13.7% to ~~$114.6~~$130.7 million during the three months ended ~~February 28,~~November 30, 2022, compared with ~~$105.5~~$115.0 million from the same period a year ago. The increased revenues were driven by higher sales in all of our workflow solutions, primarily in ~~Research & Advisory, followed by Analytics & Trading and~~ CTS. The growth in revenues of ~~8.6%~~13.7% was ~~reflective of increased~~due to a 7.2% increase in organic revenues ~~of 9.5%,~~and an 8.1% from acquisition-related revenues, partially offset by a ~~90 basis point~~1.6% decrease ~~related to~~driven by the effects of foreign currency exchange rate fluctuations.

Asia Pacific

~~Revenues from our~~ Asia Pacific revenues segment increased ~~11.9%~~18.5% to ~~$42.9~~$50.7 million during the three months ended ~~February 28,~~November 30, 2022, compared with $38.3 million from the same period a year ago. The increased revenues were driven by increased sales across all of our workflow solutions of Analytics & Trading, Research & Advisory and CTS. The growth in revenues of 11.9% was reflective of increased organic revenues of 13.7%, partially offset by a 180 basis point decrease related to foreign currency exchange rate fluctuations.

~~Six months ended February 28, 2022 compared with six months ended February 28, 2021~~

~~Americas~~

~~Revenues from our Americas segment increased 9.8% to $540.6 million during the six months ended February 28, 2022, compared with $492.3~~$42.8 million from the same period a year ago. The increased revenues were driven by higher sales in all of our workflow solutions, primarily in ~~Research & Advisory,~~CTS, followed by Analytics & Trading and ~~CTS.~~Research & Advisory. The growth in revenues ~~growth~~ of ~~9.8%~~18.5% was ~~due to~~reflective of 14.9% increase in organic ~~revenue growth of 9.6%~~revenues and a ~~20 basis point~~7.3% increase from ~~deferred revenue fair value adjustments from purchase accounting and~~ acquisition-related ~~revenue.~~

~~EMEA~~

~~Revenues from our EMEA segment increased 8.7% to $229.6 million during the six months ended February 28, 2022, compared with $211.3 million from the same period a year ago. The increased~~ revenues, were driven by higher sales in all of our workflow solutions, primarily in Research & Advisory, followed by Analytics & Trading and CTS. The revenues growth of 8.7% was driven by organic revenue growth of 9.1% and a 10 basis point increase from deferred revenue fair value adjustments from purchase accounting, partially offset by a ~~50 basis point~~3.7% decrease ~~from~~driven by the effects of foreign currency exchange rate fluctuations.

~~Table of~~ ~~Contents~~

~~Asia Pacific~~

Revenues from our Asia Pacific segment increased 12.1% to $85.7 million during the six months ended February 28, 2022, compared with $76.4 million from the same period a year ago. The increased revenues were driven by higher sales across all of our workflow solutions of Analytics & Trading, Research & Advisory and CTS. The revenues growth of 12.1% was due mainly to organic revenues growth of 13.7%, partially offset by a 160 basis point decrease from foreign currency exchange rate fluctuations.

Revenues by Workflow Solution

Three months ended ~~February 28,~~November 30, 2022 compared with three months ended ~~February 28,~~November 30, 2021

The growth in revenues of ~~10.0% across our segments was driven by increased revenues from all of our workflow solutions, primarily from sales of Research & Advisory, followed by Analytics & Trading and CTS,~~18.9% for the three months ended ~~February 28,~~November 30, 2022, compared with the same period a year ~~ago.~~ago, was due to revenue growth across each of our segments supported by increased revenues from our workflow solutions, primarily from CTS, followed by Research & Advisory and Analytics & Trading. The increase in CTS revenues was driven mainly by CGS related data licensing and issuance revenues. The increase in Research & Advisory revenues was driven mainly by higher demand for our workstations. The increase in revenues from Analytics & Trading was primarily due to increased demand for our performance and portfolio reporting products, portfolio and benchmark services and portfolio analytics solutions. ~~The increase in CTS revenues was driven mainly by increased sales of company financial data, such as fundamentals and estimates, along with data management solutions.~~

~~Six months ended February 28, 2022 compared with six months ended February 28, 2021~~

The revenues growth of 9.7% across our segments for the six months ended February 28, 2022 compared with the same period a year ago was primarily driven by increased sales of Research & Advisory, followed by Analytics & Trading and CTS. The increase in Research & Advisory was driven mainly by higher demand for our workstations. The increase in Analytics & Trading revenues was mainly due to increased sales of our performance and reporting products and portfolio analytics solutions. The increase in CTS revenues was driven mainly by increased sales of core and premium content sets, specifically related to company financial data and data management solutions.

Operating Expenses

Three Months Ended Six Months Ended
February 28, February 28, % Change
(in thousands) 2022 2021 % Change 2022 2021
Cost of services $ 199,395 $ 195,523 2.0 % $ 406,544 $ 383,611 6.0 %
Selling, general and administrative 108,376 80,132 35.2 % 203,291 159,219 27.7 %
Total operating expenses $ 307,771 $ 275,655 11.7 % $ 609,835 $ 542,830 12.3 %
Operating income $ 123,348 $ 116,133 6.2 % $ 246,009 $ 237,163 3.7 %
Operating margin 28.6 % 29.6 % 28.7 % 30.4 %
Principal Operating Costs and Expenses

Cost of services is mainly comprised of employee compensation costs and also includes expenses related to data costs, computer-related expenses, amortization of identifiable intangible assets, royalty fees, client-related communication costs and computer depreciation.

Selling, general and administrative ("SG&A") consists primarily of employee compensation costs and also includes expenses related to occupancy costs, professional fees, depreciation of furniture and fixtures, amortization of leasehold improvements, travel and entertainment expenses, marketing costs, non-compensatory employee expenses, internal communication costs and bad debt expense.

Employee compensation costs are a major component of both our cost of services and SG&A. These expenses primarily include costs related to salaries, incentive compensation and sales commissions, stock-based compensation, benefits, employment taxes, and any applicable restructuring costs.

We assign employee compensation costs between costs of services and SG&A based on the roles and activities associated with each employee. We categorize employees within the content collection, consulting, product development, software and systems engineering groups as cost of services personnel. Employees included in our sales department and those that serve in various other support departments, including marketing, finance, legal, human resources and administrative services, are classified as SG&A.

Asset impairments consist primarily of expenses recognized when the carrying amount of an asset exceeds its fair value.

Table of Contents

The following table summarizes the components of our total operating expenses and operating margin for the periods described:


	Three Months Ended
	November 30,

(in thousands)	2022			2021			% Change
Cost of services	$	227,042		$	207,131		9.6	%
SG&A	105,596			91,238			15.7	%
Asset impairments	282			3,695			(92.4)	%
Total operating expenses	$	332,920		$	302,064		10.2	%

Operating income	$	171,895		$	122,661		40.1	%
Operating margin	34.1		%	28.9		%

Cost of Services

Three months ended ~~February 28,~~November 30, 2022 compared with three months ended ~~February 28,~~November 30, 2021

Cost of services increased ~~2.0%~~9.6% to ~~$199.4~~$227.0 million for the three months ended ~~February 28,~~November 30, 2022, compared with $195.5 million in the same period a year ago, primarily due to an increase in employee compensation expense, computer-related expenses and amortization of intangible assets, partially offset by computer depreciation.

Cost of services, when expressed as a percentage of revenues, was 46.3% for the three months ended February 28, 2022, a decrease of 370 basis points compared with the same period a year ago. This decrease was primarily due to lower employee compensation expense and lower computer depreciation expenses as a percentage of revenue. Employee compensation expense decreased 260 basis points due primarily to growth in revenues outpacing the growth of employee compensation expense and a shift in headcount distribution from higher to lower cost locations, partially offset by higher base salaries, a net increase in employee headcount of 51 and higher stock-based compensation expense. Computer depreciation expenses decreased 30 basis points, primarily driven by fully depreciated network-related equipment that is not being replaced due to our migration to cloud-based hosting services.

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~~Six months ended February 28, 2022 compared with six months ended February 28, 2021~~

For the six months ended February 28, 2022, cost of services increased 6.0% to $406.5 million compared with $383.6 million in the same period a year ago, primarily due to an increase in computer-related expenses, employee compensation expense, including stock-based compensation, amortization of intangible assets and data costs.

Cost of services, when expressed as a percentage of revenues, was 47.5% for the six months ended February 28, 2022, a decrease of 170 basis points compared with the same period a year ago. This decrease was primarily driven by lower employee compensation expense, partially offset by higher computer-related expenses and amortization of intangible assets as a percentage of revenue. Employee compensation expense decreased 200 basis points, primarily due to growth in revenues outpacing the growth of employee compensation expense and a shift in headcount distribution from higher to lower cost locations. This decrease in employee compensation was partially offset by a one-time restructuring charge to drive organizational realignment, higher stock-based compensation expense and annual base salaries, and a net increase in employee headcount of 51. Computer-related expenses increased 70 basis points primarily due to increased spend from our migration to cloud-based hosting services and licensed software arrangements. Amortization of intangible assets increased 30 basis points mainly due to continued investment in capitalized internal-use software, with more assets placed in service.

~~Selling, General and Administrative~~

~~Three months endedFebruary 28, 2022compared with three months endedFebruary 28, 2021~~

Selling, general and administrative ("SG&A") expenses increased 35.2% to $108.4 million for the three months ended February 28, 2022, compared with $80.1 million for the same period a year ago, primarily due to impairment charges related to vacating certain leased office space and higher employee compensation expense and professional fees.

SG&A expenses, when expressed as a percentage of revenues, were 25.1% for the three months ended February 28, 2022, an increase of 470 basis points over the prior year period. This increase was primarily due to impairment charges related to vacating certain leased office space, higher professional fees and higher employee compensation expense as a percentage of revenue. The impairment charges resulted in a 240 basis point increase to SG&A expenses driven mainly by impairments to our lease right-of-use ("ROU") assets and Property, equipment and leasehold improvements associated with vacating certain leased office space. Professional fees increased 90 basis points, primarily driven by costs incurred in preparation for the acquisition of CGS. Employee compensation expense increased 70 basis points primarily due to a net increase in employee headcount of 73, higher annual base salaries and increased variable compensation.

~~Six months ended February 28, 2022 compared with six months ended February 28, 2021~~

~~For the six months ended February 28, 2022, SG&A expenses increased 27.7% to $203.3 million, compared with $159.2~~$207.1 million for the same period a year ago, primarily due to an increase in amortization of intangible assets and royalty fees related to our CGS acquisition and computer-related expenses.

Cost of services, when expressed as a percentage of revenues, was 45.0% for the three months ended November 30, 2022, a decrease of 380 basis points over the prior year period. This decrease was primarily due to lower employee compensation costs and data costs, partially offset by higher amortization of intangible assets and royalty fees.

•Employee compensation costs decreased 560 basis points primarily due to a one-time restructuring charge to drive organizational realignment incurred during the three months ended November 30, 2021 and increased capitalization of compensation costs related to development of our internal-use software projects, partially offset by higher annual base salaries and higher variable compensation expense. The increase in annual base salaries was mainly due to a net headcount increase in cost of services of 558, partially offset by a shift of our headcount from high to low cost locations.

•Data costs decreased by 160 basis points due to the release of certain accruals related to the successful resolution of exchange audits, partially offset by increased data prices and usage-based fees.

•Amortization of intangible assets increased 190 basis points mainly due to increased amortization related to acquired intangible assets, primarily from the CGS acquisition.

•Royalty fees increased cost of services by 170 basis points due to contracts acquired in connection with the acquisition of CGS.

Selling, General and Administrative

Three months endedNovember 30, 2022compared with three months endedNovember 30, 2021

SG&A expenses increased 15.7% to $105.6 million for the three months ended November 30, 2022, compared with $91.2 million from the same period a year ago, primarily due to higher employee compensation expense ~~impairment charges related to vacating certain leased office space~~ and ~~higher professional fees.~~travel expenses.

SG&A expenses, expressed as a percentage of revenues, ~~was 23.8%~~were 20.9% for the ~~six~~three months ended ~~February 28,~~November 30, 2022, ~~an increase~~a decrease of ~~330~~60 basis points over the prior year period. This ~~increase~~decrease was primarily due to lower occupancy costs, partially offset by higher travel expenses.

•Occupancy costs decreased by 90 basis points mainly driven by vacating leased office space and recognizing an impairment ~~charges related to vacating certain leased property, higher employee compensation expense and~~charge during fiscal 2022, thereby reducing occupancy costs recorded over the remaining lease terms.

•Travel expenses increased ~~professional fees~~ as we lifted our COVID-19 travel restrictions during the current year.

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Asset Impairments

Three months ended November 30, 2022compared with three months endedNovember 30, 2021

Asset impairments were $0.3 million for the three months ended November 30, 2022, compared with $3.7 million in the same period a ~~percentage of revenue.~~year ago. The impairment charges ~~resulted in a 90 basis point increase to SG&A expenses driven mainly by impairments~~incurred during the three months ended November 30, 2021 related to our lease ~~ROU~~right-of-use ("ROU") assets and ~~Property,~~property, equipment and leasehold improvements associated with vacating certain leased office space. Employee compensation expense increased 70 basis points, primarily due to higher annual base salaries, a net increase in employee headcount of 73, and increased year-over-year variable compensation. Professional fees increased 50 basis points, primarily driven by costs incurred in preparation for the acquisition of CGS.

Operating Income and Operating Margin

Three months ended ~~February 28,~~November 30, 2022 compared with three months ended ~~February 28,~~November 30, 2021

Operating income increased ~~6.2%~~40.1% to ~~$123.3~~$171.9 million for the three months ended ~~February 28,~~November 30, 2022, compared with ~~$116.1~~$122.7 million in the prior year. ~~Operating income increased~~This increase was primarily due to growth in revenues, ~~of 10.0%,~~ partially offset by ~~impairment charges related to vacating certain leased office space,~~ an increase in amortization of intangible assets, royalty fees, employee compensation expense, computer-related expenses and ~~higher professional fees driven by costs incurred in preparation for the acquisition of CGS.~~travel expenses. Foreign currency exchange rate fluctuations, net of hedge activity, ~~decreased~~increased operating income by ~~$1.2 million.~~

~~Table~~$8.6 million for the three months ended November 30, 2022, compared with a decrease of ~~Contents~~

~~Operating margin decreased to 28.6%~~$4.3 million during the three months ended ~~February 28,~~November 30, 2021

Operating margin increased to 34.1% during the three months ended November 30, 2022, compared with ~~29.6%~~28.9% in the prior year period. Operating margin ~~decreased~~increased mainly due to impairment charges related to vacating certain leased office space, professional fees driven by costs incurred in preparation for the acquisition of CGS, partially offset by growth in revenues and lower costs related to employee compensation and computer depreciation.

~~Six months ended February 28, 2022 compared with six months ended February 28, 2021~~

~~Operating income increased 3.7% to $246.0 million for the six months ended February 28, 2022 compared with $237.2 million in the prior year period. Operating income increased primarily~~ due to growth in revenues, ~~of 9.7%,~~lower employee compensation expense, data costs and occupancy costs, an impairment charge incurred in the prior year period, partially offset by ~~increases in employee compensation expense, impairment charges related to vacating certain leased office space and increases in computer-related expenses, professional fees,~~higher amortization of intangible assets, ~~and data costs. Foreign currency exchange rate fluctuations, net of hedge activity decreased operating income by $5.4 million.~~

Operating margin decreased to 28.7% for the six months ended February 28, 2022, compared with 30.4% in the prior year period. Operating margin decreased primarily due to impairment charges related to vacating certain leased property, computer-related expenses, professionalroyalty fees and ~~amortization~~travel expenses, when expressed as a percentage of ~~intangibles, partially offset by lower employee compensation expense.~~revenues.

Operating Income by Segment

Our internal financial reporting structure is based on three ~~reportable~~ segments: the Americas; EMEA; and Asia Pacific. Refer to Note 16, Segment Information~~, in the Notes to the Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q~~ for further discussion regarding our segments. The following table summarizes our operating income by segment for the periods described:


		Three Months Ended								Six Months Ended												Three Months Ended
		February 28,				% Change				February 28,									% Change			November 30,												% Change

(in thousands)	(in thousands)	2022		2021				2022				2021				(in thousands)		2022					2021						$ Change
Americas	Americas	$	48,903	$	53,614			(8.8)	%			$	104,401			$	109,989						(5.1)		%	Americas		$	67,531		$	55,498					$	12,033		21.7	%
EMEA	EMEA	45,944		40,290				14.0	%			86,598				80,924						7.0		%	EMEA		67,322			40,654			26,668						65.6	%
Asia Pacific	Asia Pacific	28,501		22,229		28.2	%			55,010				46,250					18.9	%	Asia Pacific	37,042						26,509			10,533				39.7		%
Total Operating Income	Total Operating Income	$	123,348	$	116,133	6.2	%			$	246,009			$	237,163				3.7	%	Total Operating Income	$	171,895					$	122,661		$	49,234		40.1		%

Three months ended ~~February 28,~~November 30, 2022 compared with three months ended ~~February 28,~~November 30, 2021

Americas

Americas operating income ~~decreased 8.8%~~increased 21.7% to ~~$48.9~~$67.5 million during the three months ended ~~February 28,~~November 30, 2022, compared with $53.6 million in the same period a year ago. This decrease in operating income was due to impairment charges related to vacating certain leased office space, higher employee compensation expense and professional fees, partially offset by growth in revenues of 10.4%. The impairment charges related mainly to our lease right-of-use ("ROU") assets and Property, equipment and leasehold improvements associated with vacating certain leased office space. Employee compensation expense increased mainly due to higher stock compensation expense and increased variable compensation, partially offset by a net decrease in employee headcount of 225. Professional fees increased primarily due to costs incurred in preparation for the acquisition of CGS.

~~EMEA~~

EMEA operating income increased 14.0% to $45.9 million during the three months ended February 28, 2022, compared with $40.3 million recognized during the same period a year ago. The increase in EMEA operating income was due to growth in revenues of 8.6%, partially offset by higher employee compensation expense and an increase in our accounts receivable reserves. Employee compensation expense increased mainly due to increased variable compensation.

~~Asia Pacific~~

~~Asia Pacific operating income increased 28.2% to $28.5 million during the three months ended February 28, 2022, compared with $22.2~~$55.5 million in the same period a year ago. This increase was primarily due to growth in revenues of 21.2%, partially offset by higher amortization of intangible assets, royalty fees, employee compensation expense and computer-related expenses.

•Amortization of intangible assets primarily increased due to amortization related to acquired intangible assets, mainly from the CGS acquisition.

•Royalty fees increased due to contracts acquired in connection with the acquisition of CGS.

•Employee compensation expense increased primarily due to an increase in annual base salary, inclusive of a net increase in employee headcount of 152 and an increase in stock-based compensation and payroll taxes, partially offset by the impact of a one-time restructuring charge incurred during the three months ended November 30, 2021 to drive organizational realignment.

•Computer-related expenses increased primarily due to increased spend from our migration to cloud-based hosting services to support our transition to a hybrid cloud strategy, as well as expenses related to licensed software arrangements.

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EMEA

EMEA operating income increased 65.6% to $67.3 million during the three months ended November 30, 2022, compared with $40.7 million recognized during the same period a year ago. This increase was primarily due to growth in revenues of 13.7% and a reduction in data costs. Data costs were lower due to the successful resolution of exchange audits, partially offset by increased data prices and usage-based fees.

Asia Pacific

Asia Pacific operating income increased 39.7% to $37.0 million during the three months ended November 30, 2022, compared with $26.5 million from the prior year. This increase was mainly due to growth in revenues of

~~Table of~~ ~~Contents~~

~~11.9%~~ 18.5%, partially offset by higher employee compensation expense. Employee compensation expense increased mainly due to higher annual base salaries, inclusive of a net increase in employee headcount of ~~351 and increased variable compensation.~~

~~Six months ended February 28, 2022 compared with six months ended February 28, 2021~~

~~Americas~~

Americas operating income decreased 5.1% to $104.4 million during the six months ended February 28, 2022, compared with $110.0 million in the same period a year ago. This decrease in operating income was due to higher employee compensation expense, impairment charges related to vacating certain leased office space, higher computer-related expenses, professional fees and amortization of intangible assets, partially offset by growth in revenues of 9.8%. Employee compensation expense increased primarily due to the impact of a one-time restructuring charge to drive organizational realignment, higher stock compensation expense and increased variable compensation expense, partially offset by a net decrease in employee headcount of 225. The impairment charges related mainly to our lease right-of-use ("ROU") assets and Property, equipment and leasehold improvements associated with vacating certain leased office space. Computer-related expenses increased primarily due to increased spend from our migration to cloud-based hosting services and licensed software arrangements. Professional fees increased primarily due to costs incurred in preparation for the acquisition of CGS. Amortization of intangible assets increased primarily due to a continued investment in capitalized internal-use software, with more assets placed in service.

~~EMEA~~

EMEA operating income increased 7.0% to $86.6 million during the six months ended February 28, 2022, compared with $80.9 million in the same period a year ago. The increase in EMEA operating income was primarily due to growth in revenues of 8.7%, partially offset by an increase in employee compensation expense and data costs. Employee compensation expense increased mainly due to the impact of a one-time restructuring charge to drive organizational realignment and higher annual base salaries. Data costs increased primarily due to a non-recurring charge for certain data content.

~~Asia Pacific~~

Asia Pacific operating income increased 18.9% to $55.0 million during the six months ended February 28, 2022, compared with $46.3 million in the same period a year ago. The increase in Asia Pacific operating income was mainly due to growth in revenues of 12.1%, partially offset by an increase in employee compensation expense. Employee compensation expense increased mainly due to higher annual base salaries, a net increase in employee headcount of 351 and increased variable compensation.

~~Income Taxes, Net Income and Diluted Earnings per Share~~

Three Months Ended Six Months Ended
February 28, % Change February 28, % Change
(in thousands, except for per share data) 2022 2021 2022 2021
Provision for income taxes $ 12,018 $ 18,023 (33.3) % $ 24,301 $ 37,049 (34.4) %
Net income $ 109,938 $ 96,643 13.8 % $ 217,585 $ 197,849 10.0 %
Diluted earnings per common share $ 2.84 $ 2.50 13.6 % $ 5.63 $ 5.12 10.0 %
508.

Income Taxes

The provision for income taxes and the effective tax rate is as follows:


	Three Months Ended
	November 30,
(in thousands)	2022			2021			$ Change			% Change
Income before income taxes	$	157,885		$	119,930		$	37,955		31.6	%
Provision for income taxes	$	21,087		$	12,283		$	8,804		71.7	%
Effective tax rate	13.4		%	10.2		%	3.1		%	30.4	%

Our effective tax rate is based on recurring factors and non-recurring events, including the taxation of foreign income. Our effective tax rate will vary based on, among other things, changes in levels of foreign income, as well as discrete and other non-recurring events that may not be predictable. For the three months ended November 30, 2022, our effective tax rate is lower than the applicable U.S. corporate income tax rate ~~for the three and six months ended February 28, 2022, driven~~ mainly bydue to research and development ("R&D") tax credits, ~~and~~ a foreign derived intangible income ("FDII") ~~deduction. Our effective~~deduction and a tax ~~rate for~~benefit from the ~~three and six months ended February 28, 2022 is further reduced by windfall tax benefits associated with the employee~~ exercise of stock options.

Three months ended ~~February 28,~~November 30, 2022 compared with three months ended ~~February 28,~~November 30, 2021

For the three months ended ~~February 28,~~November 30, 2022, the provision for income taxes was ~~$12.0~~$21.1 million, compared with ~~$18.0~~$12.3 million for the same period a year ago. The provision ~~decreased~~increased mainly due to ~~lower projected levels of~~higher pretax income ~~before income taxes,~~at a ~~lower~~higher effective tax rate ~~compared~~and, to a lesser extent, an increase of the ~~prior year period and a $4.2 million in higher windfall~~UK statutory tax ~~benefits from stock-based compensation, partially offset by higher income before income taxes for the three months ended February 28, 2022, compared with the prior year period.~~

~~Table of~~ ~~Contents~~

~~Six months ended February 28, 2022 compared with six months ended February 28, 2021~~

For the six months ended February 28, 2022, the provision for income taxes was $24.3 million, compared with $37.0 million for the same period a year ago. The provision decreased mainly due to lower projected levels of income before income taxes, a lower effective tax rate compared to the prior year period and $11.2 million in higher windfall tax benefit from stock-based compensation, partially offset by higher income before income taxes during the six months ended February 28, 2022, compared with the prior year period.rate.

Net Income and Diluted Earnings per Share


	Three Months Ended
	November 30,
(in thousands, except for per share data)	2022		2021		Change		% Change
Net income	$	136,798	$	107,647	$	29,151	27.1	%
Diluted weighted average common shares	38,914		38,641		273		0.7	%
Diluted earnings per common share	$	3.52	$	2.79	$	0.73	26.2	%

Three months ended ~~February 28,~~November 30, 2022 compared with three months ended ~~February 28,~~November 30, 2021

Net income increased ~~13.8%~~27.1% to ~~$109.9~~$136.8 million and diluted earnings per share ("EPS") increased ~~13.6%~~26.2% to ~~$2.84~~$3.52 for the three months ended ~~February 28,~~November 30, 2022, compared with the same period a year ago. Net income and diluted EPS increased primarily due to ~~increased~~higher operating income, partially offset by an increase in interest expense as a result of higher outstanding debt and ~~a reduction in the provision for income taxes.~~

~~Six months ended February 28, 2022 compared with six months ended February 28, 2021~~

Net income increased 10.0% to $217.6 million and diluted EPS increased 10.0% to $5.63 for the six months ended February 28, 2022, compared with the same period a year ago. Net income and diluted EPS increased primarily due to a decreasean increase in the provision for income taxes ~~and increased operating income.~~due to higher pretax income at a higher effective tax rate, compared with the prior year period.

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Non-GAAP Financial Measures

To supplement the financial measures prepared in accordance with generally accepted accounting principles in the United States ("GAAP"), we use non-GAAP financial measures including organic ~~revenue,~~revenues, adjusted operating income, adjusted operating margin, adjusted net income, EBITDA, adjusted EBITDA and adjusted diluted EPS. The reconciliations ~~of these non-GAAP financial measures to the most directly comparable~~from our financial measures calculated and presented in accordance with GAAP to these non-GAAP financial measures are ~~show~~shown in the tables below. These non-GAAP financial measures should not be considered in isolation from, as a substitute for or superior to, financial measures reported in accordance with GAAP. Moreover, these non-GAAP financial measures have limitations in that they do not reflect all the items associated with the operations of ~~the~~our business as determined in accordance with GAAP. Other companies may calculate similarly titled non-GAAP financial measures differently ~~that~~than we do, limiting the usefulness of those measures for comparative purposes.

Despite the limitations of these non-GAAP financial measures, we believe these adjusted financial measures, and the information they provide, are useful in viewing our performance using the same tools that management uses to gauge progress in achieving our goals. Adjusted measures may also facilitate comparisons to our historical performance.

Adjusted revenues exclude the impact of the fair value of deferred revenues acquired in a business combination. Organic revenues further excludes revenues related to acquisitions and dispositions completed in the last 12 months and foreign currency movements in all periods presented.

The table below provides an unaudited reconciliation of revenues to adjusted revenues and organic revenues.


		Three Months Ended							Three Months Ended
		February 28,				% Change			November 30,										% Change

(In thousands)	(In thousands)	2022		2021				(In thousands)	2022				2021				$ Change
Revenues	Revenues	$	431,119	$	391,788			10.0	%	Revenues	$	504,815			$	424,725			$	80,090		18.9	%
Deferred revenues fair value adjustment(1)	Deferred revenues fair value adjustment(1)	(62)		181				Deferred revenues fair value adjustment(1)	—				86				(86)
Adjusted revenues	Adjusted revenues	431,057		391,969		10.0	%	Adjusted revenues	$	504,815			$	424,811			$	80,004	18.8		%
Acquired revenues(2)	Acquired revenues(2)	(1,883)		—				Acquired revenues(2)	(48,455)				—				(48,455)
Currency impact(3)	Currency impact(3)	1,589		—				Currency impact(3)	3,500				—				3,500
Organic revenues	Organic revenues	$	430,763	$	391,969	9.9	%	Organic revenues	$	459,860			$	424,811			$	35,049	8.3		%

(1)~~The~~ Reflects the amortization effect of the purchase accounting adjustment onrelated to the fair value of acquired deferred ~~revenues.~~revenues for acquisitions prior to fiscal 2022. Acquisitions thereafter do not include this adjustment in accordance with our adoption of ASU No. 2021-08, Business Combinations: Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (Topic 805).

(2)Revenues from acquisitions completed within the last 12 months.

(3)The impact from foreign currency movements year over ~~the past 12 months.~~year.

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The table below provides an unaudited reconciliation of operating income, operating margin, net income and diluted EPS to adjusted operating income, adjusted operating margin, adjusted net income, EBITDA, adjusted EBITDA and adjusted diluted EPS.
Three Months Ended
February 28,
(In thousands, except per share data) 2022 2021 % Change
Operating income $ 123,348 $ 116,133 6.2 %
Deferred revenues fair value adjustment (62) 181
Intangible asset amortization 6,291 5,914
Real estate charges 9,734 —
Business acquisition costs 5,048 —
Transformation costs (1)
580 4,654
Restructuring / severance 200 961
     Adjusted operating income $ 145,139 $ 127,843 13.5 %
     Operating margin 28.6 % 29.6 %
     Adjusted operating margin(2)
33.7 % 32.6 %
Net income $ 109,938 $ 96,643 13.8 %
Deferred revenues fair value adjustment (55) 148
Intangible asset amortization 5,543 4,843
Real estate charges 8,578 —
Business acquisition costs 4,448 —
Transformation costs(1)
512 3,813
Restructuring / severance 177 787
Income tax items (2,466) (1,154)
     Adjusted net income(3)
$ 126,675 $ 105,080 20.6 %
Net income $ 109,938 $ 96,643
Interest expense, net 1,673 1,815
Income taxes 12,018 18,023
Depreciation and amortization expense 13,395 15,672
    EBITDA $ 137,024 $ 132,153 3.7 %
Non-recurring non-cash expenses(4)
9,734 —
    Adjusted EBITDA $ 146,758 $ 132,153 11.1 %
Diluted earnings per common share $ 2.84 $ 2.50 13.6 %
Deferred revenues fair value adjustment 0.00 0.00
Intangible asset amortization 0.14 0.13
Real estate charges 0.22 —
Business acquisition costs 0.11 —
Transformation costs(1)
0.01 0.10
Restructuring / severance 0.01 0.02
Income tax items (0.06) (0.03)
     Adjusted diluted earnings per common share(3)
$ 3.27 $ 2.72 20.2 %
Weighted average common shares (Diluted) 38,761 38,620

~~(1)Costs primarily related to professional fees associated with the ongoing multi-year investment plan.~~

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~~(2)~~Adjusted operating ~~margin is calculated as adjusted operating~~ income ~~divided by adjusted revenues as shown in the organic revenues table above.~~

~~(3)For purposes of calculating~~and margin, adjusted net income, and adjusted diluted earnings per share exclude intangible asset amortization, the impact of the fair valuing of deferred revenues ~~fair value adjustments~~acquired in a business combination and ~~other items were taxed at the quarterly effective tax rates of 11.9%~~non-recurring items. EBITDA excludes interest expense, provision for ~~fiscal 2022~~income taxes and ~~16.9% for fiscal 2021.~~depreciation and amortization expense, while Adjusted EBITDA further excludes non-recurring non-cash expenses.

~~(4)~~

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	Three Months Ended
	November 30,

(In thousands, except per share data)	2022			2021			% Change
Operating income	$	171,895		$	122,661		40.1	%
Deferred revenues fair value adjustment	—			86
Intangible asset amortization	18,008			6,052
Business acquisition / integration costs(1)	3,499			—
Restructuring / severance	—			9,028
Real estate charges(2)	—			3,695
Transformation costs (3)	—			1,188

Adjusted operating income	$	193,402		$	142,710		35.5	%
Operating margin	34.1		%	28.9		%
Adjusted operating margin(4)	38.3		%	33.6		%

Net income	$	136,798		$	107,647		27.1	%
Deferred revenues fair value adjustment	—			77
Intangible asset amortization	15,577			5,419
Business acquisition / integration costs(1)	3,026			—
Restructuring / severance	—			8,084
Real estate charges(2)	—			3,309
Transformation costs(3)	—			1,064


Income tax items	(230)			(259)
Adjusted net income(5)	$	155,171		$	125,341		23.8	%
Net income	$	136,798		$	107,647
Interest expense	16,537			1,972
Income taxes	21,087			12,283
Depreciation and amortization expense	25,997			19,432
EBITDA	$	200,419		$	141,334		41.8	%
Real estate charges(2)	—			3,695
Adjusted EBITDA	$	200,419		$	145,029		38.2	%
Diluted earnings per common share	$	3.52		$	2.79		26.2	%
Deferred revenues fair value adjustment	—			0.00
Intangible asset amortization	0.40			0.14
Business acquisition / integration costs(1)	0.08			—
Restructuring / severance	—			0.21
Real estate charges(2)	—			0.09
Transformation costs(3)	—			0.03


Income tax items	(0.01)			(0.01)
Adjusted diluted earnings per common share(5)	$	3.99		$	3.25		22.8	%
Weighted average common shares (Diluted)	38,914			38,641

(1)~~Costs related~~Related to integration costs of our CGS acquisition.

(2)Related to impairment charges of our lease ROU assets and ~~Property,~~property, equipment and leasehold improvements associated with vacating certain leased office space.

(3)Primarily related to professional fees associated with our ongoing multi-year investment plan.

(4)Adjusted operating margin is calculated as Adjusted operating income divided by Adjusted revenues as shown in the revenues reconciliation table above.

(5)For purposes of calculating Adjusted net income and Adjusted diluted earnings per share, all adjustments were taxed at the quarterly effective tax rates of 13.5% for fiscal 2023 and 10.5% for fiscal 2022.

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Liquidity and Capital Resources

Our ~~primary sources of liquidity have been our~~ cash flows ~~generated from our operations,~~provided by operating activities, existing cash and cash equivalents, ~~and, when needed,~~supplemented with our ~~credit capacity under~~long-term debt borrowings, have been sufficient to fund our ~~existing credit facility. We use these sources~~operations while allowing us to invest in activities that support the long-term growth of ~~liquidity~~our operations. Generally, some or all of the remaining available cash flow has been used to, among other things, service our existing and future debt obligations, satisfy our working capital requirements and fund our capital expenditures, ~~investments,~~ acquisitions, dividend payments and repurchases of our common stock. Based on past performance and current expectations, we believe our sources of liquidity, ~~along with~~including the available capacity under our existing revolving credit facility and other financing alternatives, will provide us the necessary capital to fund these transactions and achieve our planned growth for the next 12 months and the foreseeable future.

Sources of Liquidity

Long-Term Debt & Swap Agreements

2022 Credit Agreement

On March 1, 2022, we entered into a credit agreement (the "2022 Credit Agreement") and borrowed an aggregate principal amount of $1.0 billion under its senior unsecured term loan credit facility (the “2022 Term Facility”) and $250.0 million of the available $500.0 million under its senior unsecured revolving credit facility (the “2022 Revolving Facility” and, together with the 2022 Term Facility, the “2022 Credit Facilities”). The 2022 Term Facility matures on March 1, 2025, and the 2022 Revolving Facility matures on March 1, 2027. The 2022 Revolving Facility allows for the availability of up to $100.0 million in the form of letters of credit and up to $50.0 million in the form of swingline loans. We may seek additional commitments under the 2022 Revolving Facility from lenders or other financial institutions up to an aggregate principal amount of $750.0 million.

We pay a commitment fee on the daily unused amount of the 2022 Revolving Facility using a pricing grid based upon our senior unsecured non-credit enhanced long-term debt rating and our total leverage ratio. The commitment fee remained at 0.125% from the borrowing date through November 30, 2022. During fiscal 2022, we incurred approximately $9.5 million in debt issuance costs related to the 2022 Credit Facilities.

We used these borrowings, along with the net proceeds from the issuance of the Senior Notes (as defined below) and cash on hand, to finance the consideration for the CGS acquisition, to repay borrowings under the 2019 Credit Agreement (as defined below) and to pay related transaction fees, costs and expenses.

As of November 30, 2022, the outstanding borrowings under the 2022 Credit Facilities bore interest at a rate equal to the applicable one-month Term Secured Overnight Financing Rate ("SOFR") rate plus a 1.1% spread (comprised of a 1.0% interest rate margin based on a debt leverage pricing grid plus 0.1% credit spread adjustment). The spread remained consistent from the borrowing date through November 30, 2022. Interest on the 2022 Credit Facilities is currently payable on the last business day of each month, in arrears.

The 2022 Credit Agreement contains usual and customary affirmative and negative covenants for facilities of this type, including a financial covenant requiring maintenance of a total leverage ratio of no greater than 4.00 to 1.00 as of November 30, 2022. We were in compliance with all covenants and requirements of the 2022 Credit Agreement as of November 30, 2022.

Refer to Note 11, Debt for further discussion of the 2022 Credit Agreement.

2022 Swap Agreement

On March 1, 2022, we entered into the 2022 Swap Agreement to hedge a portion of our outstanding floating SOFR rate debt with a fixed interest rate of 1.162%. Refer to Note 5, Derivative Instruments, for defined terms and more information on the 2022 Swap Agreement.

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Senior Notes

On March 1, 2022 we completed a public offering of $500.0 million aggregate principal amount of 2.900% Senior Notes due March 1, 2027 (the “2027 Notes”) and $500.0 million aggregate principal amount of 3.450% Senior Notes due March 1, 2032 (the “2032 Notes” and, together with the 2027 Notes, the “Senior Notes”). The Senior Notes were issued pursuant to an indenture, dated as of March 1, 2022, by and between us and U.S. Bank Trust Company, National Association, as trustee (the "Trustee"), as supplemented by the supplemental indenture, dated as of March 1, 2022, between us and the Trustee (the "Supplemental Indenture").

Interest on the Senior Notes is payable semiannually in arrears on March 1 and September 1 of each year, with the first payment made on September 1, 2022. The Senior Notes were issued at an aggregate discount of $2.8 million during fiscal 2022 and we incurred approximately $9.1 million in debt issuance costs.

2019 Credit Agreement

On March 29, 2019, we entered into a credit agreement with PNC Bank, National Association ~~("PNC")~~ (the "2019 Credit Agreement"), which provides for a $750.0 million revolving credit facility (the "2019 Revolving Credit Facility"). The 2019 Revolving Credit Facility allows for borrowings until its maturity date of March 29, 2024. The 2019 Credit Agreement also allows for, subject to certain requirements, additional borrowings with PNC for an aggregate amount up to $500.0 million, provided that any such request for additional borrowings must be in a minimum amount of $25.0 million.

~~As of February 28, 2022, we have~~and borrowed $575.0 million of the available $750.0 million provided by the ~~2019~~revolving credit facility thereunder (the "2019 Revolving Credit Facility, resulting in $175.0 million available to be withdrawn. We are required to pay a commitment fee using a pricing grid which was 0.10% as of February 28, 2022. This fee is based on the daily amount by which the available balance inFacility"). Borrowings under the 2019 Revolving Credit Facility exceeds the borrowed amount. All outstanding loan amounts are reported as Long-term debt within the Consolidated Balance Sheets at February 28, 2022 and August 31, 2021. The principal balance is payable in full on the maturity date.

~~Borrowings under the loan bear~~bore interest on the outstanding principal amount at a rate equal to the daily LIBOR plus a spread using a debt leverage pricing grid, which was 0.875% as of February 28, 2022. The variable rate of interest on the 2019 Revolving Credit Facility creates exposure to interest rate volatility due to changes in LIBOR. To mitigate this exposure, on March 5, 2020, we entered into an interest rate swap agreement with a notional amount of $287.5 million to hedge the variable interest rate obligation on a portion of our outstanding balance under the 2019 Revolving Credit Facility. Under the terms of the interest rate swap agreement, we pay interest at a fixed rate of 0.7995% and receive variable interest payments based on the same one-month LIBOR utilized to calculate the interest expense from the 2019 Revolving Credit Facility. The interest rate swap agreement matures on March 29, 2024.

Including the effects of the interest rate swap agreement, the weighted average interest rate on amounts outstanding under our 2019 Revolving Credit Facility was 1.36% and 1.38% for the six months ended February 28, 2022 and fiscal year ended August 31, 2021, respectively.grid. Interest on the amounts outstanding ~~balance~~ under the 2019 Revolving Credit Facility iswas payable quarterly, in arrears, and on the maturity date.

The 2019 Credit Agreement contains covenants and requirements restricting certain of our activities, which are usual and customary for this type of loan. In addition, the 2019 Credit Agreement requires that we maintain a consolidated net leverage ratio, as measured by total net funded debt/EBITDA (as defined in the 2019 Credit Agreement), below a specified level as of the end of each fiscal quarter. We were in compliance with all the covenants and requirements within the 2019 Credit Agreement as of February 28, 2022.

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As of March 1, 2022,, ~~we repaid in full and terminated our 2019 Credit Agreement~~. ~~Refer to Note 17,~~ ~~Subsequent Events~~ ~~for more information on the termination.~~

~~2022 Credit Agreement~~

~~On March 1, 2022, FactSet Research Systems Inc. entered into the 2022 Credit Agreement and concurrently~~ we repaid in full and terminated the 2019 Credit Agreement. ~~On March 1, 2022, we borrowed $1.0 billion under the 2022 Term Facility, and $250.0 million under the 2022 Revolving Facility.~~ Refer to Note ~~17, Subsequent Events for definition of these terms and more information on the 2022 Credit Agreement.~~

11,
Debt

~~Notes~~

On March 1, 2022, FactSet Research Systems Inc. completed a public offering of $500.0 million aggregate principal amount of 2.900% Senior Notes due 2027 and $500.0 million aggregate principal amount of 3.450% Senior Notes due 2032. Refer to Note 17, Subsequent Events for more information on the ~~Senior Notes.~~termination.

Uses of Liquidity

Returning Value to Shareholders

~~For~~We returned $33.7 million in the ~~six~~form of dividends and $49.3 million in the form of share repurchases and dividends to shareholders during the three months ended ~~February 28,~~November 30, 2022 and November 30, 2021, respectively. Over the last 12 months, we returned ~~$80.1~~$128.9 million to stockholders in the form of dividends. Refer to the Share Repurchase Program below for more information on the current suspension of our share ~~repurchases~~repurchase program.

Dividends

During the three months ended November 30, 2022 and ~~dividends. Over~~November 30, 2021, we paid dividends of $33.7 million and $30.7 million, respectively. Our dividends per share related to dividends paid during the ~~last 12~~three months ~~we returned $289.9 million~~ended November 30, 2022 increased 8.5% compared to ~~stockholders in~~ the ~~form~~three months ended November 30, 2021.

Fiscal 2022 marked 23 consecutive fiscal years of ~~share repurchases~~dividend increases, highlighting our continued commitment to returning value to stockholders. Future dividends will depend on our earnings, capital requirements, financial condition and ~~dividends.~~other factors considered relevant by us and are subject to final determination by our Board of Directors.

Share Repurchase Program

~~Under~~As of November 30, 2022, $181.3 million remained authorized for future share repurchases under our share repurchase ~~program, we~~program. There is no defined number of shares to be repurchased over a specified timeframe through the life of the program. We may repurchase shares of our common stock under the program from ~~time to time~~time-to-time in the open market and privately negotiated transactions, subject to market conditions.

We did not repurchase any shares during the three months ended November 30, 2022, compared with 46,200 shares for $18.6 million during the three months ended November 30, 2021. Beginning in the second quarter of fiscal 2022, we suspended our share repurchase program ~~through~~until at least the second half of fiscal 2023, with the exception of potential minor repurchases to offset dilution from grants of equity awards or repurchases to satisfy withholding tax obligations duedue upon the vesting of ~~stock-based~~stock-

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based awards. The suspension of our share repurchase program allows us to prioritize the repayment of debt under the 2022 Credit ~~Agreement.~~Facilities. Refer to Note ~~17,~~11, ~~Subsequent Events~~Debt for more information on the 2022 Credit ~~Agreement.~~Facilities.

As of February 28, 2022, $181.3 million remained available under the share repurchase program for future share repurchases. There is no defined number of shares to be repurchased over a specified timeframe through the life of the share repurchase program. It is expected that share repurchases will be paid using existing and future cash generated by operations.

Capital Expenditures

For the ~~six~~three months ended ~~February 28,~~November 30, 2022, capital expenditures ~~were $20.5~~increased by 109.3% to $18.0 million, compared with ~~$28.8~~$8.6 million during the same period a year ~~ago, a decrease of $8.2 million. Capital expenditures decreased~~ago. This increase was primarily due to ~~costs incurred for the build-out of our office space in the Philippines during the six months ended February 28, 2021, without a similar expenditure during the six months ended February 28, 2022.~~

~~Dividends~~

On February 2, 2022, our Board of Directors approved a regular quarterly dividend of $0.82 per share. Dividends of $31.1 million were paid on March 17, 2022 to common stockholders of record at the close of business on February 28, 2022. Future cash dividends will depend on our earnings, capital requirements, financial condition and other factors considered relevant by us and are subject to final determination by our Board of Directors.

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~~Acquisitions~~

~~During fiscal 2022 and 2021, we completed acquisitions of several businesses, with the most significant cash flows~~higher expenditures related to the ~~acquisitions~~development of ~~Cobalt Software, Inc. ("Cobalt") and Truvalue Labs, Inc. ("TVL").~~ capitalized internal-use software, followed by an increase in technology expenditures.

Acquisitions

CUSIP Global Services

On March 1, 2022, we completed the acquisition of ~~CGS.~~CGS for a cash purchase price of $1.932 billion, inclusive of working capital adjustments. CGS manages a database of 60 different data elements uniquely identifying more than 50 million global financial instruments. It is the foundation for security master files relied on by critical front, middle and back-office functions. CGS, operating on behalf of the ABA, is the provider of CUSIP and CINS identifiers globally and also acts as the official numbering agency for ISIN identifiers in the United States and as a substitute number agency for more than 35 other countries. We believe that the CGS acquisition will significantly expand our critical role in the global capital markets.

Cobalt Software, Inc.

On October 12, 2021, we acquired all of the outstanding shares of Cobalt Software, Inc. ("Cobalt") for a purchase price of $50.0 million, net of cash acquired,. and inclusive of working capital adjustments. Cobalt is a leading portfolio monitoring solutions provider for the private capital industry. This acquisition advances our strategy to scale our data and workflow solutions through targeted investments as part of our multi-year investment plan and expands our private markets offering.

~~On November 2, 2020, we acquired all of the outstanding shares of TVL for a purchase price of $41.9 million,~~ ~~net of cash acquired~~. TVL is a leading provider of ESG information. TVL applies artificial intelligence driven technology to over 100,000 unstructured text sources in multiple languages, including news, trade journals, and non-governmental organizations and industry reports, to provide daily signals that identify positive and negative ESG behavior. The acquisition of TVL further enhances our commitment to providing industry leading access to ESG data across our platforms.

Refer to Note 7,6, ~~Acquisition,~~ Acquisitions~~in the Notes to the Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q~~, for further discussion of the CGS and Cobalt ~~and TVL~~ acquisitions. ~~Refer to Note 17,~~ ~~Subsequent Events,~~ ~~in the Notes to the Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Qfor more information on our March 1, 2022 acquisition of CGS.~~

Contractual Obligations

Purchase obligations represent ~~committed payments due in future periods~~our legally-binding agreements to ~~our various data vendors and for other goods and services. These~~ purchase ~~commitments are agreements that are enforceable and legally binding on us, and they specify all significant terms, including:~~ fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction. The effect of our contractual obligations on our liquidity and capital resources in future periods should be considered in conjunction with the factors mentioned here.at determinable prices. As of August 31, ~~2021,~~2022, we had total purchase commitments of ~~$191.9 million. During~~$373.9 million, primarily related to hosting services and data acquisition, followed by third-party software providers. Hosting services support our technology investments related to our migration to cloud-based hosting services, the ~~second quarter~~majority of ~~fiscal~~which rely on third-party hosting providers. Data is an integral component of the value we provide to our clients. Third-party software mainly includes internal-use software licenses.

Since August 31, 2022, ~~we entered into a software subscription agreement with total purchase commitments of approximately $10 million with a contract term of three years.~~

there were no material changes to our contractual obligations. We also have contractual obligations related to our lease liabilities and outstanding debt. Refer to Note 10, Leases, ~~and~~ Note 11, Debt and Note 12, Commitments and Contingencies for information regarding our contractual obligations related to our lease ~~commitments and~~liabilities, outstanding debt ~~obligations,~~and other commitments, respectively.

Summary of Cash Flows

As of November 30, 2022, Cash and cash equivalents were $437.1 million, compared with $673.9 million as of November 30, 2021. Our cash and cash equivalents are held in numerous locations throughout the world, with $234.1 million in the Americas, $116.2 million in EMEA (predominantly in the UK) and the remaining $86.8 million in Asia Pacific (predominantly in India and the Philippines) as of November 30, 2022. We permanently reinvest all foreign unremitted earnings, except in jurisdictions where earnings can be repatriated substantially free of tax.

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The table below, for the periods indicated, provides selected cash flow information:
Six Months Ended
February 28,
(in thousands) 2022 2021 $ Change % Change
Net cash provided by operating activities $ 194,952 $ 229,936 $ (34,984) (15.2) %
Net cash used in investing activities (70,814) (69,748) (1,066) 1.5 %
Net cash used by financing activities (26,417) (146,659) 120,242 (82.0) %
Effect of exchange rate changes on cash and cash equivalents (6,574) 3,550 (10,124) (285.2) %
Net increase in cash and cash equivalents $ 91,147 $ 17,079 $ 74,068 433.7 %

Cash and cash equivalents aggregated to $773.0 million as of February 28, 2022, compared with $681.9 million as of August 31, 2021. Our cash and cash equivalents increased $91.1 million during the six months ended February 28, 2022, primarily due to cash provided by operating activities of $195.0 million and proceeds from the exercise of employee stock options of $56.9 million, partially offset by cash outflows from dividend payments of $61.4 million, acquisition of a business of $50.0 million, capital expenditures of $20.5 million and share repurchases of $18.6 million.

Our cash and cash equivalents are held in numerous locations throughout the world, with $493.9 million within the Americas, $215.4 million within EMEA (predominantly within the UK and France) and the remaining $63.7 million within Asia Pacific (predominantly within the Philippines and India) as of February 28, 2022. We intend to reinvest substantially all of our accumulated undistributed foreign earnings, except in instances where repatriation would result in minimal additional tax.

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	Three Months Ended
	November 30,
(in thousands)	2022		2021		$ Change		% Change
Net cash provided by operating activities	$	106,636	$	72,918	$	33,718	46.2	%
Net cash used in investing activities	(27,852)		(58,851)		30,999		(52.7)	%
Net cash provided by/(used in) financing activities	(146,232)		(16,482)		(129,750)		787.2	%
Effect of exchange rate changes on cash and cash equivalents	1,317		(5,550)		6,867		(123.7)	%
Net increase (decrease) in cash and cash equivalents	$	(66,131)	$	(7,965)	$	(58,166)	730.3	%

Operating

For the ~~six~~three months ended ~~February 28,~~November 30, 2022, net cash provided by operating activities was ~~$195.0~~$106.6 million, ~~compared with $229.9~~which included net income of $136.8 million, ~~during the same period a year ago, a decrease~~non-cash charges of ~~$35.0~~$47.4 million and higher working capital requirements of $77.6 million. ~~This decrease was~~The non-cash charges were primarily driven by $26.0 million of depreciation and amortization and $12.2 million of stock-based compensation expense. The change in our working capital was primarily due to a cash outflow of $66.8 million related to our variable compensation payment.

For the ~~timing~~

three months ended November 30, 2021, net cash provided by operating activities was $72.9 million, which consisted of ~~both tax payments~~net income of $107.6 million, non-cash charges of $43.9 million and higher working capital requirements of $78.7 million. The non-cash charges were primarily driven by $17.2 million of depreciation and amortization and $11.1 million in ~~certain jurisdictions and collections~~amortization of ~~accounts receivable, as well as higher bonus payments, partially offset by higher net income.~~lease ROU assets. The change in our working capital was primarily due to a cash outflow of $53.5 million related to our variable compensation payment.

Investing

~~Net~~For the three months ended November 30, 2022, net cash used in investing activities was ~~$70.8~~$27.9 million. The cash used in investing activities was primarily due to an increase in capital expenditures of $18.0 million ~~for~~mainly due to capitalization of compensation costs related to development of our internal-use software projects.

For the ~~six~~three months ended February 28, 2022, representing a $1.1 million increase from the same period a year ago. This increase was driven by higher spend on acquisitions, with a $50.0 million cash purchase price for Cobalt, net of cash acquired, during the six months ended February 28, 2022, compared with a $41.9 million cash purchase price for TVL, net of cash acquired, in the prior year period. The increase inNovember 30, 2021, net cash used in investing activities was ~~further impacted by a reduction~~$58.9 million. The cash used in investing activities was primarily due to the purchase of ~~$1.2 million in net proceeds from investments (net of purchases) during~~Cobalt for $50.0 million.

Financing

For the ~~six~~three months ended ~~February 28,~~November 30, 2022, ~~compared to the prior year period, partially offset by a decrease in capital expenditures of $8.2 million for the six months ended February 28, 2022 compared with the prior year period.~~

~~Financing~~

~~Net~~net cash used in financing activities was ~~$26.4~~$146.2 million, ~~for~~consisting mainly of $125.0 million related to the ~~six months ended February 28,~~partial repayment of the 2022 ~~representing a $120.2~~Term Facility and $33.7 million ~~favorable change compared with the same period a year ago. This cash flow improvement was mainly driven~~of dividend payments, partially offset by ~~a $96.0~~$23.4 million ~~decrease in share repurchases and a $28.4 million increase in~~of proceeds from employee stock ~~plans,~~plans.

For the three months ended November 30, 2021, net cash used in financing activities was $16.5 million, consisting mainly of $33.7 million of dividend payments and $18.6 million of repurchases of common stock, partially offset by ~~an increase~~$35.8 million of ~~$3.3 million in dividend payments.~~proceeds from employee stock plans.

Free Cash Flow

We define free cash flow, a non-GAAP financial measure, as cash provided by operating activities less purchases of property, equipment, leasehold improvements and capitalized internal-use software. We ~~present~~believe free cash flow ~~solely as a supplemental disclosure to provide useful information to investors about the amount of cash generated by the business after necessary capital expenditures. We consider free cash flow to be~~is a liquidity measure that provides useful information to management and ~~investors~~investors about the amount of cash generated by the business that, after ~~necessary~~ capital ~~expenditures.~~expenditures, can be used for strategic opportunities, including returning value to shareholders, investing in our business, making strategic acquisitions and strengthening the balance sheet. Free cash flow should be considered in addition to, rather than as a substitute for, consolidated net income as a measure of our performance and net cash provided by operating activities as a measure of our liquidity.

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The following table reconciles our net cash provided by operating activities to free cash flow:


		Six Months Ended							Three Months Ended
		February 28,							November 30,
(in thousands)	(in thousands)	2022		2021		Change		(in thousands)	2022		2021		Change
Net cash provided by operating activities	Net cash provided by operating activities	$	194,952	$	229,936	$	(34,984)	Net cash provided by operating activities	$	106,636	$	72,918	$	33,718
Capital expenditures(1)		(20,546)		(28,758)		8,212
Less: purchases of property, equipment, leasehold improvements and internal-use software								Less: purchases of property, equipment, leasehold improvements and internal-use software	(17,960)		(8,583)		(9,377)
Free cash flow	Free cash flow	$	174,406	$	201,178	$	(26,772)	Free cash flow	$	88,676	$	64,335	$	24,341

(1) Capital expenditures are included in net cash used in investing activities during each fiscal period reported and include property, equipment, leasehold improvements and capitalized internal-use software.

~~Free~~We generated free cash flow ~~generated~~of $88.7 million during the ~~six~~three months ended ~~February 28,~~November 30, 2022, ~~was $174.4~~an increase of $24.3 million compared with ~~$201.2 million during~~ the same period a year ~~ago, reflecting~~ago. This change reflects a ~~13.3% decrease. This $26.8~~$33.7 million ~~decrease was~~increase in cash provided by operating activities, mainly due to ~~a $35.0 million decrease in operating cash flows,~~higher net income, partially offset by ~~an $8.2~~a $9.4 million ~~decrease~~increase in capital ~~expenditures.~~expenditures, primarily driven by an increase in capitalized costs related to internal-use software.

Off-Balance Sheet Arrangements

At ~~February 28,~~November 30, 2022 and August 31, ~~2021,~~2022, we had no off-balance sheet financing or other arrangements with unconsolidated entities or financial partnerships (such as entities often referred to as structured finance or special purpose entities) established for purposes of facilitating off-balance sheet financing, other debt arrangements, or other contractually limited purposes.

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~~Foreign Currency~~

Foreign Currency Exposure

WeAs we operate globally, we are exposed to ~~foreign currency fluctuations from~~the risk that our ~~international wholly-owned subsidiaries, primarily driven~~financial condition, results of operations and cash flows could be impacted by ~~employee compensation, with 79% of our employee headcount located~~changes in foreign locations. The functional currency of these foreign subsidiaries are primarily their respective local currencies. The revenues and expenses of these subsidiaries have been translated into U.S. dollars at average exchange rates prevailing during the period and the assets and liabilities translated at the rates of exchange on the balance sheet date. The net translation gains and losses are recorded in accumulated other comprehensive loss as a component of stockholders’ equity.

~~During the three months ended February 28, 2022,~~ foreign currency exchange rate fluctuations, net of hedge activity, decreased operating income by $1.2 million, compared with a decrease of $1.4 million to operating income a year ago. During the six months ended February 28, 2022, foreign currency exchange rate fluctuations, net of hedge activity, decreased operating income by $5.4 million, compared with a $0.8 million a decrease to operating income a year ago.rates. To mitigate ~~the~~this foreign currency exposure, we entered into a series of forward contracts to hedge a portion of our foreign currency exposures related to the British Pound Sterling, Euro, Indian Rupee and Philippine ~~Peso exposures~~Peso. As of November 30, 2022, these forward contracts hedge a portion of our foreign currency transaction exposure ranging from 25% to ~~50%~~75%, over their respective hedged periods, ~~as of February 28, 2022. The current foreign currency forward contracts~~which are set to mature at various points between the ~~third~~second quarter of fiscal ~~2022~~2023 through the first quarter of fiscal ~~2023.~~2024.

AsDuring the three months ended November 30, 2022, foreign currency exchange rate fluctuations, net of ~~February 28,~~hedge activity, increased operating income by $8.6 million, compared with a decrease of $4.3 million to operating income a year ago. A loss on foreign currency forward contracts of $5.0 million was recorded into operating income for the three months ended November 30, 2022, compared with a loss on forward currency forward contracts of $0.4 million in the same period a year ago.

The following table summarizes the gross notional value of foreign currency forward contracts to purchase ~~Philippine Pesos and Indian Rupees with U.S. dollars was ₱0.9 billion and Rs1.7 billion, respectively. The gross notional value of foreign currency forward contracts to purchase Euros and~~the British Pound Sterling, Euro, Indian Rupee, and Philippine Peso with U.S. ~~dollars was €23.0 million and £24.3 million, respectively.~~dollars:

A loss on foreign currency forward contracts of $1.0 million was recorded into operating income for the three months ended February 28, 2022, compared with a gain on forward currency forward contracts of $2.1 million in the same period a year ago. For the six months ended February 28, 2022, a loss on forward currency forward contracts of $1.5 million was recorded into operating income, compared with a gain on forward currency forward contracts of $2.9 million in the prior year period.


	November 30, 2022				November 30, 2021
(in thousands)	Local Currency Amount		Notional Contract Amount (USD)		Local Currency Amount		Notional Contract Amount (USD)
British Pound Sterling	£	48,000	$	57,337	£	44,200	$	55,567
Euro	€	38,000	39,892		€	37,500	40,679
Indian Rupee	Rs	2,739,827	33,600		Rs	2,667,928	33,600
Philippine Peso	₱	1,540,066	27,300		₱	1,462,060	27,000
Total			$	158,129			$	156,846

Critical Accounting ~~Policies and~~ Estimates

We prepare the Consolidated Financial Statements in conformity with GAAP, which requires us to make certain estimates and apply judgements that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosures. We base

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our estimates on historical experience and other assumptions that we believe to be reasonable at the time the Consolidated Financial Statements are prepared and, as such, they may ultimately differ materially from actual results.

We describe our significant accounting policies in Note 3,2, Summary of Significant Accounting Policies, of the ~~notes~~Notes to ~~our~~the Consolidated Financial Statements included in Item 8 of our Annual Report on Form 10-K for the fiscal year ended August 31, ~~2021. The~~2022. These accounting policies ~~used~~were consistently applied in preparing our Consolidated Financial Statements for the ~~six~~three months ended ~~February 28, 2022 are applied consistently with those described~~November 30, 2022.

We disclosed our critical accounting estimates in Part II, Item 7 Critical Accounting Estimates in the MD&A of our Annual Report on Form 10-K for the fiscal year ended August 31, ~~2021.~~

~~We discuss our critical accounting estimates in Item 7,~~ ~~Management’s Discussion and Analysis of Financial Condition and Results of Operations~~ ~~in our Annual Report on Form 10-K for the fiscal year ended August 31, 2021.~~2022. There were no significant changes in our critical accounting estimates during the ~~six~~three months ended ~~February 28,~~November 30, 2022.

New Accounting Pronouncements

See Note 3,2, ~~Recent~~Summary of Significant Accounting ~~Pronouncements~~Policies, in the Notes to the Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for a full description of recent accounting pronouncements, including the expected dates of adoption, which we include herein by reference.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

In the normal course of business, we are exposed to foreign currency exchange risk and interest rate risk that could impact our financial position and results of operations.

~~Foreign Currency Exchange Risk~~

~~We are exposed~~ Current market events have not required us to modify materially or change our financial risk management strategies with respect to our exposures to foreign currency exchange risk asor interest rate risk.

Foreign Currency Transaction Risk

We operate on a global basis and are exposed to the risk that our financial condition, results of operations and cash flows could be impacted by changes in foreign currency exchange rates. To mitigate the volatility and uncertainty of our exchange rate risk, we ~~conduct business outside~~entered into foreign currency forward contracts with major institutions related to our primary currencies of the ~~U.S. in several currencies including~~ British Pound Sterling, Euro, Indian Rupee and Philippine Peso. ~~Changes in the exchange rates for such currencies into U.S. dollars can affect our revenues, earnings, and the carrying values~~As of November 30, 2022, these forward contracts hedge a portion of our ~~assets and liabilities in our consolidated balance sheet, either positively~~foreign currency transaction exposure ranging from 25% to 75% over their respective hedged periods. We do not enter into cash flow hedges for trading or ~~negatively.~~speculative purposes.

~~To manage the exposures related to the effects of foreign exchange rate fluctuations, we utilize derivative instruments (foreign currency forward contracts).~~ The changes in fair value for these foreign currency forward contracts are initially reported as a component of Accumulated other comprehensive loss ("AOCL") and subsequently reclassified into operating expenses when the hedged exposure affects earnings.

~~A sensitivity analysis was performed based~~During the three months ended November 30, 2022, we recognized a loss on ~~the estimated fair value of all~~ foreign currency forward contracts ~~outstanding at February 28, 2022. If~~of $5.0 million, compared with a loss of $0.4 million in the ~~U.S. dollar had been 10% weaker,~~same period a year ago. During three months ended November 30, 2022, foreign currency exchange rate fluctuations, net of hedge activity, increased operating income by $8.6 million, compared with a decrease of $4.3 million during the three months ended November 30, 2021.

We performed a sensitivity analysis to determine the effects on both the fair value of our outstanding foreign currency forward contracts and our operating income, excluding these forward contracts, of a hypothetical devaluation of the U.S. dollar by 10% as of November 30, 2022, relative to the other foreign currencies in which we transact. Based on the financial results for the three months ended November 30, 2022, the fair value of our outstanding forward contracts would have increased by ~~$9.7~~$15.4 million and our operating income, excluding these forward contracts, would have decreased by $11.2 million. ~~Such a change~~This sensitivity analysis has inherent limitations as it disregards the possibility that rates of multiple foreign currencies will not always move in ~~fair~~the same direction relative to the value of ~~our financial instruments would be substantially offset by changes in our expense base. If we had no hedges in place as of February 28, 2022, a hypothetical 10% weaker~~the U.S. dollar ~~against all foreign currencies from the quoted foreign currency~~over time and does not account for our forward contracts that we utilize to mitigate fluctuations in exchange rates at February 28, 2022, with operating results held constant in local currencies, would result in a decrease in operating income by $41.5 million over the next 12 months. A hypothetical 10% weaker U.S. dollar against all foreign currencies at February 28, 2022 would have increased the fair value of total assets by $67.9 million and equity by $47.1 million.rates.

Refer to Note 6,5, Derivative Instruments in the Notes ~~to our Consolidated Financial Statements included in Part I, Item 1~~ of this Quarterly Report ~~on Form 10-Q~~ for more information on our foreign currency exposures and our foreign currency forward contracts.

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Foreign Currency Translation Risk

We are exposed to foreign currency risk due to the translation of our results from certain international operations into U.S. Dollars, as part of the consolidation process. Fluctuations in foreign currency exchange rates can create volatility in our results of operations and our financial condition. We recorded a translation gain of $8.8 million and a loss of $18.7 million in AOCL for the three months ended November 30, 2022 and 2021, respectively.

Interest Rate Risk

Cash and Cash Equivalents and Investments

~~The fair market value~~As of ~~our~~November 30, 2022, we had Cash and cash equivalents of $437.1 million and Investments ~~at February 28, 2022 was $808.0~~of $32.6 million. Our ~~cash~~Cash and cash equivalents consist of cash and highly liquid investments including demand deposits and money market funds, ~~with original maturities~~and our Investments consist of ~~three months or less and are reported at fair value.~~mutual funds. We are exposed to interest rate risk through fluctuations of interest rates on our investments. As we have a restrictive investment policy, our financial exposure to fluctuations in interest rates is expected to remain low. Refer to Note 2, Summary of Significant Accounting Policies in the Notes to the Consolidated Financial Statements included in Item 8. of our Annual Report on Form 10-K for more information on our cash and cash equivalents.

Debt

~~2019~~2022 Credit Agreement

As of ~~February 28,~~November 30, 2022 ~~we had long-term~~our outstanding debt ~~outstanding~~with a variable rate of interest included $625.0 million under the ~~2019~~2022 Term Facility and $250.0 million under the 2022 Revolving ~~Credit Facility with a principal balance of $575.0 million. The debt bears interest on~~Facility. During the three months ended November 30, 2022, the outstanding ~~principle~~borrowings under the 2022 Credit Facilities bore interest at a rate equal to ~~LIBOR~~the applicable one-month Term SOFR rate plus a spread using a debt leverage pricing ~~grid.~~ grid, currently at 1.1% (comprised of a 1.0% interest rate margin based on a debt leverage pricing grid plus a 0.1% credit spread adjustment). The spread remained consistent from the date of borrowing through November 30, 2022.

The variable rate of interest on our ~~long-term~~ debt ~~created~~creates exposure to interest rate volatility due to changes in ~~LIBOR.~~SOFR. To mitigate this exposure, on March ~~5, 2020,~~1, 2022, we entered into the ~~2020~~2022 Swap Agreement ~~(as defined in Note 6,~~ ~~Derivative Instruments~~)to hedge a portion of our outstanding floating SOFR rate debt with a fixed interest rate of 1.162%, to maintain an intended fixed to floating interest rate ratio. The notional amount of ~~$287.5~~the 2022 Swap Agreement declines by $100.0 million ~~to hedge the variable interest rate obligation, effectively converting the floating interest rate to fixed for the hedged portion.~~ on a quarterly basis and was $500.0 million as of November 30, 2022. The 2022 Swap Agreement is maturing on February 28, 2024.

Thus, our exposure ~~was~~is limited to ~~base interest rate risk~~fluctuations in SOFR on ~~floating rate~~our borrowings from the 2022 Credit Facilities in excess of ~~any~~ amounts that are not hedged, or ~~$287.5~~$375.0 million of our outstanding principal balance. Assuming all terms of our outstanding long-term debt remained the same, a hypothetical 25 basis point change (up or down) in the one-month ~~LIBOR~~SOFR provided exposure of ~~$0.7~~$0.9 million to our annual interest expense.

Refer to Note 11, Debt~~in the Notes to our Consolidated Financial Statements included in Part 1, Item 1 of this Quarterly Report on Form 10-Q for additional information regarding our outstanding debt obligations.~~

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~~As of~~ ~~March 1, 2022~~, ~~we repaid in full and terminated our 2019 Credit Agreement~~. ~~Refer to Note 17,~~ ~~Subsequent Events~~ for more information on ~~the termination.~~

~~2022 Credit Agreement~~

~~On March 1, 2022, FactSet Research Systems Inc. borrowed $1.0 billion under the~~our 2022 Term Facility and ~~$250.0 million under the~~ 2022 Revolving Facility. The debt will bear interest on the outstanding principle at an applicable Secured Overnight Financing Rate ("SOFR") rate plus a spread, using a debt leverage pricing grid. The variable rate of interest on our long-term debt creates exposure to interest rate volatility due to changes in SOFR. To mitigate this exposure, on March 1, 2022, we entered into the 2022 Swap Agreement. Refer to Note ~~17,~~5, ~~Subsequent Events~~Derivative Instruments~~, in the Notes to the Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q~~ for more information on ~~these defined terms, our 2022 Term Facility, 2022 Revolving Facility and~~ our 2022 Swap Agreement.

Current market events have not required us to modify materially or change our financial risk management strategies with respect to our exposures to foreign currency exchange risk and interest rate risk.

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ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management, including our Principal Executive Officer and Principal Financial Officer, have evaluated the effectiveness of our disclosure controls and procedures pursuant to Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as of the end of the period covered by this report. As permitted by SEC guidance that an assessment of internal controls over financial reporting of a recently acquired business may be excluded from management's evaluation of disclosure controls and procedures for up to a year from the date of acquisition, we have excluded CGS from management's assessment on internal control over financial reporting for the quarter ended November 30, 2022. We will continue to evaluate the effectiveness of internal controls over financial reporting as we complete the integration of CGS. CGS represents 10% percent of our consolidated revenues for the three months ended November 30, 2022 and excluding goodwill and intangible assets, CGS represented 7% percent of our total assets as of November 30, 2022.

Based on ~~that~~their evaluation, ~~the~~our Principal Executive Officer and Principal Financial Officer have concluded that our disclosure controls and procedures, ~~are~~excluding those related to CGS, were effective as of the end of the period covered by this report.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the three ~~and six~~ months ended ~~February 28,~~November 30, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The information set forth under "Contingencies" in Note 12, Commitments and Contingencies, contained in the Notes to the Consolidated Financial Statements of this Quarterly Report on Form 10-Q is incorporated by reference in answer to this Item.

ITEM 1A. RISK FACTORS

There ~~were~~have been no material changes ~~during the six months ended February 28, 2022~~ to the risk factors identified in our Annual Report on Form 10-K for the fiscal year ended August 31, 2021, except for the addition of certain language in the sections "Operational Risks - Operations outside the United States involve additional requirements and burdens that we may not be able to control or manage successfully" and "Legal & Regulatory Risks - Legislative and regulatory changes in the environments in which we and our clients operate" as set out below.2022.

In addition, included below are risk factors related to the CGS acquisition, the offering of senior notes and the entrance into a new credit facility, which took place on March 1, 2022. Refer to Note 17, ~~Subsequent Events~~ ~~for more information on these transactions.~~

~~Operational Risks~~

~~Operations outside the United States involve additional requirements and burdens that we may not be able to control or manage successfully~~

In fiscal 2021, approximately 40% of our revenue related to operations located outside the U.S. In addition, a significant number of our employees, approximately 78%, are located in offices outside the U.S. We expect our growth to continue outside the U.S., with non-U.S. revenues accounting for an increased portion of our total revenue in the future. Our non-U.S. operations

involve risks that differ from or are in addition to those faced by our U.S. operations. These risks include difficulties in developing products, services and technology tailored to the needs of non-U.S. clients, including in emerging markets; different employment laws and rules; rising labor costs in lower-wage countries; difficulties in staffing and managing personnel that are located outside the U.S.; different regulatory, legal and compliance requirements, including in the areas of privacy and data protection, anti-bribery and anti-corruption, trade sanctions and currency controls, marketing and sales and other barriers to conducting business; social and cultural differences, such as language; diverse or less stable political, operating and economic environments and market fluctuations; civil disturbances or other catastrophic events that reduce business activity, including the risk that the current conflict between Ukraine and Russia expands in a way that impacts our business and operations; limited recognition of our brand and intellectual property protection; differing accounting principles and standards; restrictions on or adverse tax consequences from entity management efforts; and changes in U.S. or foreign tax laws. If we are not able to adapt efficiently or manage the business effectively in markets outside the U.S., our business prospects and operating results could be materially and adversely affected.

~~Legal & Regulatory Risks~~

~~Legislative and regulatory changes in the environments in which we and our clients operate~~

~~MiFID~~

In the European Union, the new version of the Markets in Financial Instruments Directive (recast), also known as "MiFID II" became effective in January 2018. Prior to the effectiveness of the UK's withdrawal from the European Union on January 1, 2021, the UK laws and regulations implementing MiFID II were modified to transpose aspects of EU law and address deficiencies that would have otherwise been created as a result of the withdrawal. MiFID II built upon many of the initiatives introduced through MiFID and is intended to help improve the functioning of the European Union single market by achieving a greater consistency of regulatory standards. MiFID originally became effective in 2007. We believe that compliance with MiFID II requirements is time-consuming and costly for the investment managers who are subject to it and will cause clients to adapt their pricing models and business practices significantly. These increased costs may impact our clients’ spending and may cause some investment managers to lose business or withdraw from the market, which may adversely affect demand for our services. However, MiFID II may also present us with new business opportunities for new service offerings. In March 2022, the UK government announced proposed reforms to financial regulation in the UK, which would represent a divergence from the existing UK MiFID regime. Regulatory reform may impact some of our UK-regulated clients and may require them to devote more resource towards realigning their compliance measures, and in some cases ensuring compliance with both the UK and EU regimes. We continue to monitor the impact of UK regulatory change on our clients. We continue to monitor the impact of MiFID II on the investment process and trade lifecycle. We also continue to review the application of key MiFID II requirements and plan to work with our clients to navigate through them.

~~Risks Relating to the CGS Transaction~~

~~We may fail to realize the anticipated benefits of the CGS Transaction.~~

The success of our acquisition of the CGS business (the "CGS Business") will depend on, among other things, our ability to incorporate the CGS Business into our business in a manner that enhances our value proposition to clients and facilitates other growth opportunities. We must successfully include the CGS Business within our business in a manner that permits these growth opportunities to be realized. In addition, we must achieve the growth opportunities without adversely affecting current revenues and investments in other future growth. If we are not able to successfully achieve these objectives, the anticipated benefits of the acquisition of CGS (the "CGS Transaction") may not be realized fully, if at all, or may take longer to realize than expected. Additionally, management may face challenges in incorporating certain elements and functions of the CGS Business with the FactSet business, and this process may result in additional and unforeseen expenses. The CGS Transaction may also disrupt the CGS Business’s and FactSet’s ongoing business or cause inconsistencies in standards, controls, procedures and policies that adversely affect our relationships with third party partners, employees, suppliers, customers and others with whom the CGS Business and FactSet have business or other dealings or limit our ability to achieve the anticipated benefits of the CGS Transaction. It is possible that our experience in operating the CGS Business will require us to adjust our expectations regarding the impact of the CGS Transaction on our operating results. If we are not able to successfully add the CGS Business to the existing FactSet business in an efficient, effective and timely manner, anticipated benefits, including the opportunities for growth we expect from the CGS Transaction, may not be realized fully, if at all, or may take longer to realize than expected, and our cash flow and financial condition may be negatively affected.

~~We will incur significant transaction costs in connection with the CGS Transaction.~~

We have incurred a number of non-recurring costs associated with the CGS Transaction. These costs and expenses include financial advisory, legal, accounting, consulting and other advisory fees and expenses, filing fees and other related charges. There is also a large number of processes, policies, procedures, operations, technologies and systems that must be integrated in connection with the CGS Transaction. While we have assumed that a certain level of expenses would be incurred in connection with the CGS Transaction and related transactions, there are many factors beyond our control that could affect the total amount or the timing of the integration and implementation expenses.

There may also be additional unanticipated significant costs in connection with the CGS Transaction that we may not recoup. These costs and expenses could reduce the benefits and additional income we expect to achieve from the CGS Transaction. Although we expect that these benefits will offset the transaction expenses and implementation costs over time, this net benefit may not be achieved in the near term or at all.

~~Third parties may terminate or alter existing contracts or relationships with FactSet or the CGS Business.~~

The CGS Business has contracts with customers, licensors and other business partners which may require the CGS Business to obtain consent from these other parties in connection with the CGS Transaction. If these consents cannot be obtained, the CGS Business may suffer a loss of potential future revenue and may lose rights that are material to the CGS Business. In addition, third parties with which we or the CGS Business currently have relationships may terminate or otherwise reduce the scope of their relationships with us following the CGS Transaction. Any such disruptions could limit our ability to achieve the anticipated benefits of the CGS Transaction.

~~FactSet and the CGS Business may have difficulty attracting, motivating and retaining key personnel and other employees in light of the CGS Transaction.~~

The CGS Business’s success after the CGS Transaction will depend in part on its ability to attract and retain key personnel and other employees. Following the CGS Transaction, FactSet and the CGS Business may lose key personnel or may be unable to attract, retain and motivate qualified individuals, or the associated costs may increase. If the CGS Business cannot retain employees of the CGS Business because of uncertainty relating to the CGS Transaction or the difficulty of integration or for any other reason, the CGS Business’s ability to realize the anticipated benefits of the CGS Transaction could be reduced, and it may have a material adverse impact on the business and operations of the CGS Business.

~~Risks Relating to our Debt~~

~~Our indebtedness may impair our financial condition and prevent us from fulfilling our obligations under the senior notes and our other debt instruments.~~

As of March 1, 2022, giving effect to the issuance of the senior notes and the incurrence of borrowings under the 2022 Credit Facilities and the repayment of the 2019 Revolving Facility, the total outstanding debt of FactSet was $2.25 billion, none of which is secured. Under the 2022 Revolving Facility, we have $250 million of unused commitments and an option to increase the size of the facility by an additional $750 million.

~~Our indebtedness could have important consequences to investors, including:~~

a.~~making it more difficult for us to satisfy our obligations;~~

b.~~limiting our ability to borrow additional amounts to fund working capital, capital expenditures, acquisitions, debt service requirements, execution of our growth strategy and other purposes;~~

c.requiring us to dedicate a substantial portion of our cash flow from operations to pay interest on our debt and scheduled amortization on the 2022 Term Facility, which would reduce availability of our cash flow to fund working capital, capital expenditures, acquisitions, execution of our strategy and other general corporate purposes;

d.making us more vulnerable to adverse changes in general economic, industry and government regulations and in our business by limiting our flexibility in planning for, and making it more difficult for us to react quickly to, changing conditions;

e.~~placing us at a competitive disadvantage compared with those of our competitors that have less debt; and~~

f.exposing us to risks inherent in interest rate fluctuations because some of our borrowings are at variable rates of interest, which could result in higher interest expense in the event of increases in market interest rates.

In addition, we may not be able to generate sufficient cash flow from our operations to repay our indebtedness when it becomes due and to meet our other cash needs. If we are not able to pay our debts as they become due, we will be required to pursue one or more alternative strategies, such as selling assets, refinancing or restructuring our indebtedness or selling additional debt or equity securities. We may not be able to refinance our debt or sell additional debt or equity securities or our assets on favorable terms, if at all, and if we must sell our assets, it may negatively affect our ability to generate revenues.

~~Despite current indebtedness levels, we may still incur more debt. The incurrence of additional debt could further exacerbate the risks associated with our indebtedness.~~

Subject to certain limitations, the 2022 Credit Agreement and the indenture governing the senior notes permit us and our subsidiaries to incur additional debt. If new debt is added to our or any such subsidiary’s current debt levels, the risks described above in the previous risk factor could intensify.

~~The restrictive covenants in our debt may affect our ability to operate our business successfully.~~

The 2022 Credit Agreement contains, and our future debt instruments may contain, various provisions that limit our ability to, among other things: incur liens; incur additional indebtedness, guarantees or other contingent obligations; enter into sale and leaseback transactions; engage in mergers and consolidations; make investments and acquisitions; change the nature of our business; and make sales, transfers and other dispositions of property and assets. The indenture governing the senior notes also contains various provisions that limit our ability to, among other things: incur liens; enter into sale and leaseback transactions; engage in mergers and consolidations; and make sales, transfers and other dispositions of property and assets. These covenants could adversely affect our ability to finance our future operations or capital needs and pursue available business opportunities.

In addition, the 2022 Credit Agreement requires us to maintain specified financial ratios and satisfy certain financial condition tests. Events beyond our control, including changes in general economic and business conditions, may affect our ability to meet those financial ratios and financial condition tests. We cannot assure you that we will meet those tests or that the lenders will waive any failure to meet those tests. A breach of any of these covenants or any other restrictive covenants contained in the definitive documentation governing our indebtedness would result in a default or an event of default. If an event of default in respect of any of our indebtedness occurs, the holders of the affected indebtedness could declare all amounts outstanding, together with accrued interest, to be immediately due and payable, which, in turn, could cause the default and acceleration of the maturity of our other indebtedness. We expect we will be permitted to incur substantial amounts of secured debt under the covenants in the indenture governing the senior notes and the 2022 Credit Facilities. If, upon an acceleration, we were unable to pay amounts owed in respect of any such indebtedness secured by liens on our assets, then the lenders of such indebtedness could proceed against the collateral pledged to them.

~~Certain of our borrowings and other obligations are based upon variable rates of interest, which could result in higher expense in the event of increases in interest rates.~~

The 2022 Credit Agreement provides that (i) loans denominated in U.S. dollars, at our option, will bear interest at either one-month Term SOFR (with a 10 basis points credit spread adjustment and subject to a “zero” floor), Daily Simple SOFR (with a 10 basis points credit spread adjustment and subject to a “zero” floor) or an alternate base rate, (ii) loans denominated in Pounds Sterling will bear interest at Daily Simple Sterling Overnight Index Average ("SONIA") (subject to a “zero” floor) and (iii) loans denominated in Euros will bear interest at E~~uro Interbank Offered Rate~~ ("EURIBOR") (subject to a “zero” floor), in each case, plus an applicable interest rate margin. An increase in the alternate base rate, Term SOFR, Daily Simple SOFR, SONIA or EURIBOR would increase our interest payment obligations under the 2022 Credit Facilities and could have a negative effect on our cash flow and financial condition.

To mitigate this exposure, on March 1, 2022, we entered into an interest rate swap agreement with a notional amount of $800.0 million to hedge the variable interest rate obligation on a portion of our outstanding balance under the 2022 Credit Agreement. However, as the interest rate swap agreement covers only a portion of our outstanding balance under the 2022 Credit Agreement, a substantial portion of our outstanding balance under the 2022 Credit Agreement continues to be exposed to interest rate volatility. An increase in the applicable rates would increase our interest payment obligations under the 2022 Credit Agreement and could have a negative effect on our cash flow and financial condition.

~~Table of~~ ~~Contents~~

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Items 2(a) and (b) are not applicable as there have been no unregistered sales of equity securities.

(i)Issuer Purchases of Equity Securities ~~(in thousands, except share and per share data)~~

The following table provides a month-to-month summary of ~~the~~our share repurchase activity during the three months ended ~~February 28,~~November 30, 2022:

Period
Total Number of
Shares Purchased(1)
Average Price
Paid per Share
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(2)
Maximum Number of Shares (or Approximate Dollar Value)
that May Yet be Purchased Under the Plans or Programs (in US$)(2)
December 2021 317 $ 488.87 — $ 181,254
January 2022 344 $ 429.50 — $ 181,254
February 2022 14 $ 421.33 — $ 181,254
Total 675 —


Period	Total Number of Shares Purchased(1)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(2)	Maximum Number of Shares (or Approximate Dollar Value) that May Yet be Purchased Under the Plans or Programs (in US$)(2)
September 2022	20	$	443.22	—	$	181,254
October 2022	390	$	403.46	—	$	181,254
November 2022	25,450	$	425.31	—	$	181,254
Total	25,860			—

(1)~~Includes675~~Relates to shares repurchased to satisfy withholding tax obligations due upon the vesting or exercise of stock-based awards.

(2)As of November 30, 2022, a total of $181.3 million remained available for future share repurchases under our existing share repurchase program. Repurchases may be made from time to time in the open market and privately negotiated transactions, subject

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to market conditions. No minimum number of shares to be repurchased has been fixed. There is no timeframe to complete the share repurchase program and it is expected that share repurchases will be paid using existing and future cash generated by operations. Beginning in the second quarter of fiscal 2022, we suspended our share repurchase program ~~through~~until at least the second half of fiscal 2023, with the exception of potential minor repurchases to offset dilution from grants of equity awards or repurchases to satisfy withholding tax obligations due upon the vesting of stock-based awards. The suspension of our share repurchase program allows us to prioritize the repayment of debt under the 2022 Credit ~~Agreement.~~Facilities. Refer to Note ~~17, Subsequent Events~~11, Debt for more information on the 2022 Credit ~~Agreement.~~Facilities.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

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ITEM 6. EXHIBITS

~~(a)EXHIBITS~~

~~(b)The information required by this Item is set forth below.~~
Incorporated by Reference
Exhibit Number
Exhibit
Description
Form File No. Exhibit No. Filing Date
Filed
Herewith
1.1

Underwriting Agreement, dated February 15, 2022, among FactSet Research Systems Inc. and BofA Securities, Inc. and PNC Capital Markets LLC as representatives of the several underwriters listed therein.

8-K 001-11869 1.1 2/17/2022
2.1
Asset Purchase Agreement, dated as of December 24, 2021, by and between S&P Global Inc. and FactSet Research Systems Inc.
8-K 001-11869 2.1 3/1/2022
2.2

Amendment No. 1 to Asset Purchase Agreement, dated as of February 11, 2022, by and between S&P Global Inc. and FactSet Research Systems Inc.
8-K 001-11869 2.2 3/1/2022

Incorporated by Reference

Exhibit Number

Exhibit
Description

Form

File No.

Exhibit No.

Filing Date

Filed
Herewith

31.1

Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended

31.2

Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended

32.1

Certification of the Chief Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2

Certification of the Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS

XBRL Instance Document - The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document

101.SCH

XBRL Taxonomy Extension Schema

101.CAL

XBRL Taxonomy Extension Calculation Linkbase

101.DEF

XBRL Taxonomy Extension Definition Linkbase Document

101.LAB

XBRL Taxonomy Extension Label Linkbase

101.PRE

XBRL Taxonomy Extension Presentation Linkbase

104

Cover page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

~~Table of~~ ~~Contents~~

4.1

Indenture, dated as of March 1, 2022, between FactSet Research Systems Inc. and U.S. Bank Trust Company, National Association, as trustee
8-K 001-11869 4.1 3/1/2022
4.2

Supplemental Indenture, dated as of March 1, 2022, between FactSet Research Systems Inc. and U.S. Bank Trust Company, National Association, as trustee
8-K 001-11869 4.2 3/1/2022
4.3
Form of 2.900% Global Note due 2027 (included in Exhibit A-1 to Exhibit 4.2 above)
8-K 001-11869 4.3 3/1/2022
4.4
Form of 3.450% Global Note due 2032 (included in Exhibit A-2 to Exhibit 4.2 above)
8-K 001-11869 4.4 3/1/2022
4.5

Credit Agreement dated as of March 1, 2022, among FactSet Research Systems Inc., the Borrowing Subsidiaries party thereto, the Lenders party thereto, and PNC Bank, National Association, as the Administrative Agent
8-K 001-11869 4.5 3/1/2022
31.1
Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended X
31.2
Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended X
32.1
Certification of the Chief Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 X
32.2
Certification of the Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 X
101.INS XBRL Instance Document - The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document X
101.SCH XBRL Taxonomy Extension Schema X
101.CAL XBRL Taxonomy Extension Calculation Linkbase X
101.DEF XBRL Taxonomy Extension Definition Linkbase Document X
101.LAB XBRL Taxonomy Extension Label Linkbase X
101.PRE XBRL Taxonomy Extension Presentation Linkbase X
104 Cover page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) X

5451

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


			FACTSET RESEARCH SYSTEMS INC. (Registrant)

Date: ~~April 4, 2022~~January 5, 2023			/s/ LINDA S. HUBER
			Linda S. Huber
			Executive Vice President, Chief Financial Officer
			(Principal Financial Officer)

			/s/ GREGORY T. MOSKOFF
			Gregory T. Moskoff
			Managing Director, Controller and Chief Accounting Officer
			(Principal Accounting Officer)

5552


Segment Assets (in thousands)	February 28, 2022		August 31, 2021
Americas	$	1,468,121	$	1,144,693
EMEA	659,961		842,652
Asia Pacific	246,075		237,595
Total assets	$	2,374,157	$	2,224,940