What changed in this filing

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Item 1. Financial Statements

2022-07-01 compared with 2022-04-04 · 373 added, 296 removed, 600 unchanged (53% of the section changed)

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CONSOLIDATED STATEMENTS OF INCOME – Unaudited

Three Months Ended Six Months Ended

February 28, February 28,

Three Months Ended Nine Months Ended

May 31, May 31,

(In thousands, except per share data)

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Selling, general and administrative 119,881 76,599 309,185 235,818

Long-lived asset impairments 48,998 — 62,985 —

Total operating expenses 391,497 281,856 1,001,332 824,686

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME – Unaudited

Three Months Ended Six Months Ended

February 28, February 28,

Three Months Ended Nine Months Ended

May 31, May 31,

(In thousands)

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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* 810 1,017 5,620 2,204

Foreign currency translation adjustment ( 22,096 ) 8,221 ( 43,792 ) 17,831

Other comprehensive income (loss) ( 21,286 ) 9,238 ( 38,172 ) 20,035

Comprehensive income $ 53,624 $ 109,917 $ 254,323 $ 318,563

* For the three and six months ended February 28, 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 thousand and a tax expense of $ 400 thousand, respectively.

* For the three and nine months ended May 31, 2022, the net unrealized gain on cash flow hedges were net of a tax expense of $ 1,350 thousand and a tax expense of $ 1,819 thousand, respectively.

For the three and nine months ended May 31, 2021, the net unrealized gain on cash flow hedges were net of a tax expense of $ 344 thousand and a tax expense of $ 746 thousand, respectively.

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

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(In thousands, except share data)

February 28, 2022 August 31, 2021

May 31, 2022 August 31, 2021

Cash and cash equivalents $ 526,966 $ 681,865

Investments 33,580 35,984

Accounts receivable, net of reserves of $ 4,263 at February 28, 2022 and $ 6,431 at August 31, 2021

Accounts receivable, net of reserves of $ 3,387 at May 31, 2022 and $ 6,431 at August 31, 2021

226,488 151,187

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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

Common stock, $ 0.01 par value, 150,000,000 shares authorized, 41,572,771 and 41,163,192 shares issued, 37,971,366 and 37,615,419 shares outstanding at May 31, 2022 and August 31, 2021, respectively

Additional paid-in capital 1,163,081 1,048,305

Treasury stock, at cost:

3,601,395 and 3,547,773 shares at February 28, 2022 and August 31, 2021, respectively

3,601,405 and 3,547,773 shares at May 31, 2022 and August 31, 2021, respectively

( 927,818 ) ( 905,917 )

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CONSOLIDATED STATEMENTS OF CASH FLOWS – Unaudited

Six Months Ended

Nine Months Ended

(in thousands) 2022 2021

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CASH FLOWS FROM FINANCING ACTIVITIES

Repurchases of common stock ( 18,639 ) ( 114,640 )

Proceeds from debt 2,238,355 —

Repayments of debt ( 700,000 ) —

Payments of debt issuance costs ( 9,736 ) —

Dividend payments ( 92,334 ) ( 87,144 )

Proceeds from employee stock plans 74,173 46,962

Repurchases of common stock ( 18,639 ) ( 172,210 )

Other financing activities ( 3,263 ) ( 2,366 )

Net cash used by financing activities ( 26,417 ) ( 146,659 )

Net cash provided by / (used in) financing activities 1,488,556 ( 214,758 )

Effect of exchange rate changes on cash and cash equivalents ( 12,110 ) 5,648

Net increase in cash and cash equivalents 91,147 17,079

Net (decrease) increase in cash and cash equivalents ( 154,899 ) 72,735

Cash and cash equivalents at beginning of period 681,865 585,605

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CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY- Unaudited

For the Three Months Ended February 28, 2022

For the Three Months Ended May 31, 2022

(in thousands, except share data) Common Stock Additional

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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 February 28, 2022 41,485,261 $ 415 $ 1,131,166 3,601,395 $ ( 927,814 ) $ 1,068,062 $ ( 55,848 ) $ 1,215,981

Net income 74,910 74,910

Other comprehensive loss 1,822 1,822

Other comprehensive income (loss) ( 21,286 ) ( 21,286 )

Common stock issued for employee stock plans 87,486 1 17,248 — — 17,249

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Repurchases of common stock —

Stock-based compensation 15,536 15,536

Stock-based compensation expense 14,667 14,667

Dividends declared ( 33,795 ) ( 33,795 )

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

For the Six Months Ended February 28, 2022

Balance as of May 31, 2022 41,572,771 $ 416 $ 1,163,081 3,601,405 $ ( 927,818 ) $ 1,109,177 $ ( 77,134 ) $ 1,267,722

For the Nine Months Ended May 31, 2022

(in thousands, except share data) Common Stock Additional

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Net income 292,495 292,495

Other comprehensive income ( 16,886 ) ( 16,886 )

Other comprehensive income (loss) ( 38,172 ) ( 38,172 )

Common stock issued for employee stock plans 391,195 4 74,172 260 ( 128 ) 74,048

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Repurchases of common stock 46,200 ( 18,639 ) ( 18,639 )

Stock-based compensation 25,937 25,937

Stock-based compensation expense 40,604 40,604

Dividends declared ( 95,833 ) ( 95,833 )

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

For the Three Months Ended February 28, 2021

Balance as of May 31, 2022 41,572,771 $ 416 $ 1,163,081 3,601,405 $ ( 927,818 ) $ 1,109,177 $ ( 77,134 ) $ 1,267,722

For the Three Months Ended May 31, 2021

(in thousands, except share data) Common Stock Additional

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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 February 28, 2021 40,943,660 $ 409 $ 989,918 3,098,662 $ ( 753,954 ) $ 772,591 $ ( 28,496 ) $ 980,468

Net income 100,679 100,679

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Repurchases of common stock 178,100 ( 57,571 ) ( 57,571 )

Stock-based compensation 11,010 11,010

Stock-based compensation expense 11,029 11,029

Dividends declared ( 30,972 ) ( 30,972 )

Balance as of February 28, 2021 40,943,660 $ 409 $ 989,918 3,098,662 $ ( 753,954 ) $ 772,591 $ ( 28,496 ) $ 980,468

For the Six Months Ended February 28, 2021

Balance as of May 31, 2021 41,047,624 $ 410 $ 1,019,381 3,276,784 $ ( 811,532 ) $ 842,298 $ ( 19,258 ) $ 1,031,299

For the Nine Months Ended May 31, 2021

(in thousands, except share data) Common Stock Additional

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Repurchases of common stock 531,859 ( 172,210 ) ( 172,210 )

Stock-based compensation 22,327 22,327

Stock-based compensation expense 33,355 33,355

Dividends declared ( 89,379 ) ( 89,379 )

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 May 31, 2021 41,047,624 $ 410 $ 1,019,381 3,276,784 $ ( 811,532 ) $ 842,298 $ ( 19,258 ) $ 1,031,299

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

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FactSet Research Systems Inc.

February 28, 2022

Note 1 Description of Business 11

Note 2 Basis of Presentation 11

Note 3 Recent Accounting Pronouncements 12

Note 4 Revenue Recognition 12

Note 5 Fair Value Measures 13

Note 6 Derivative Instruments 15

Note 7 Acquisition 17

Note 8 Goodwill 19

Note 9 Income Taxes 19

Note 10 Leases 20

Note 11 Debt 22

Note 12 Commitments and Contingencies 23

Note 13 Stockholders' Equity 25

Note 14 Earnings Per Share 27

Note 15 Stock-Based Compensation 27

Note 16 Segment Information 29

Note 17 Subsequent Event 30

Description of Business

Basis of Presentation

Recent Accounting Pronouncements

Revenue Recognition

Fair Value Measures

Derivative Instruments

Intangible Assets

Commitments and Contingencies

Stockholders' Equity

Earnings Per Share

Stock-Based Compensation

Segment Information

DESCRIPTION OF BUSINESS

FactSet Research Systems Inc.

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For over 40 years, the FactSet platform has delivered expansive data, sophisticated analytics, and flexible technology that global financial professionals need to power their critical investment workflows.

More than 171,000 investment professionals including asset managers, asset owners, bankers, wealth managers, corporate users, private equity and venture capital professionals, and others use our personalized solutions to identify opportunities, explore ideas, and gain a competitive advantage.

Approximately 174,000 investment professionals including asset managers, asset owners, bankers, wealth managers, corporate users, private equity and venture capital professionals, and others use our personalized solutions to identify opportunities, explore ideas, and gain a competitive advantage.

Our solutions span investment research, portfolio construction and analysis, trade execution, performance measurement, risk management, and reporting across the investment lifecycle.

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We combine dedicated client service with open and flexible technology offerings, such as a configurable desktop and mobile platform, comprehensive data feeds, cloud-based digital solutions, and application programming interfaces ("APIs").

We are a central figure within the global securities marketplace and a foundation for security master files relied on by critical front, middle and back-office functions around the world through CUSIP Global Services ("CGS").

Our revenues are primarily derived from subscriptions to our products and services such as workstations, portfolio analytics, and market data.

We advance our industry by comprehensively understanding our clients’ workflows, solving their most complex challenges, and helping them achieve their goals.

By providing them with the leading open content and analytics platform, an expansive universe of concorded data they can trust, next-generation workflow support designed to help them grow and see their next best action, and the industry’s most committed service specialists, we put our clients in a position to outperform.

We advance our industry by comprehensively understanding our clients’ workflows, solving their most complex challenges, a nd helping them achieve their goals.

By providing them with the leading open content and analytics platform, an expansive universe of connected d ata they can trust, next-generation workflow support designed to help them grow and see their next best action, and the industry’s most committed service specialists, we put our clients in a position to outperform.

We are focused on growing our business through three reportable segments ("segments"):

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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, 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.

Accordingly, they do not include all information and footnotes required by GAAP for annual financial 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.

The accompanying 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, financial position, cash flows and equity.

We have evaluated subsequent events through the date of issuance of the financial statements included in this Quarterly Report on Form 10-Q, refer to Note 17, Subsequent Events for more information.

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 operations, financial position, cash flows and equity.

Use of Estimates

The preparation of our Consolidated Financial Statements and related disclosures, in conformity with GAAP, requires 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 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 assets and liabilities, useful lives and impairments of

long-lived tangible and intangible ass ets and reserves for litigation and other 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.

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RECENT ACCOUNTING PRONOUNCEMENTS

As of February 28, 2022, we implemented all applicable new accounting standards and updates issued by the Financial Accounting Standards Board ("FASB") that were in effect.

There were no new standards or updates adopted during the six months ended February 28, 2022 that had a material impact on our Consolidated Financial Statements.

As of May 31, 2022, we implemented all applicable new accounting standards and updates issued by the Financial Accounting Standards Board ("FASB") that were in effect.

There were no new standards or updates adopted during the three and nine months ended May 31, 2022 that had a material impact on our Consolidated Financial Statements.

New Accounting Standards or Updates Recently Adopted

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In December 2019, 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 to the general principles in accounting for income taxes related to intraperiod tax allocation, simplifying when companies recognize deferred taxes in an interim period, and clarifying certa in aspects of the current guidance to promote consistent application.

Simplifying the Accounting for Income Taxes , to simplify various aspects related to accounting for income taxes, eliminating certain exceptions to the general principles in accounting for income taxes related to intraperiod tax allocation, simplifying when companies recognize deferred taxes in an interim period, and clarifying certain aspects of the current guidance to promote consistent application.

We have adopted this standard effective September 1, 2021.

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Results of operations for quarterly periods prior to September 1, 2021 remain unchanged as a result of the adoption of ASU No.

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 acquisitions of CGS and Cobalt Software, Inc (“Cobalt”), and al l future acquisitions, will be accounted for in accordance with ASU 2021-08.

Refer to Note 7, Acquisitions for further information.

The adoption of this standard did not have a material impact on our Consolidated Financial Statements.

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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.

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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 and Note 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, 2022 have had, or are expected to have, a material impact on our Consolidated Financial Statements.

Concurrently, on March 1, 2022, we entered into the 2022 Credit Agreement, which bears interest based on rates other than LIBOR.

As such, the adoption of this standard will not have an impact on our Consolidated Financial Statements.

Refer to Note 12, Debt 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 May 31, 2022 have had, or are expected to have, a material impact on our Consolidated Financial Statements.

REVENUE RECOGNITION

We derive most of our revenues by providing client access to our hosted proprietary data and analytics platform which can include 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.

We determined that the majority of our subscription-based service 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

We derive most of our revenues by providing client access to our hosted proprietary data and analytics platform which can include various combinations of products, content and services available over the contractual term (referred to as the "hosted platform").

The hosted platform is a subscription-based service that consists primarily of providing client access to products, content and services including workstations, portfolio analytics and market data.

We also 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 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

transfer to the client.

We also determined the primary nature of the promise to the client is to provide daily access to one overall data and analytics platform.

This platform provides integrated financial information, analytical applications and industry-leading service for the investment community.

We also determined the primary nature of the promise to the client is to provide daily access to each of these data and analytics 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, 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 for our contracts using the over-time revenue recognition model as a client is invoiced or performance is satisfied.

We record revenues for these contracts using the over-time revenue recognition model as a client is invoiced or performance is satisfied.

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 and products, which are recoverable.

In connection with the adoption of the revenue recognition standard, 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.

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.

The majority of client contracts have a duration of one year 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 disaggregate revenues from contracts with clients by our 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.

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The following table presents this disaggregation by segment:

Three Months Ended Six Months Ended

February 28, February 28,

Three Months Ended Nine Months Ended

May 31, May 31,

(in thousands)

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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

significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

quoted prices for identical assets or liabilities in

markets with insufficient volume or infrequent transactions (less active markets);

or model-derived valuations in which 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, 2022 and August 31, 2021.

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 as of May 31, 2022 and August 31, 2021.

We did not have any transfers between levels of fair value measurements during the periods presented.

Fair Value Measurements at February 28, 2022

We held no Level 3 assets or liabilities measured at fair value on a recurring basis as of May 31, 2022 or August 31, 2021.

Fair Value Measurements as of May 31, 2022

(in thousands) Level 1 Level 2 Total

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Total liabilities measured at fair value $ — $ 3,963 $ 3,963

Fair Value Measurements at August 31, 2021

Fair Value Measurements as of August 31, 2021

(in thousands) Level 1 Level 2 Total

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The income approach uses pricing models that rely on market observable inputs such as spot, forward and interest rates, as well as credit default swap spreads, and are classified as Level 2 assets.

To estimate fair value for the interest rate swap agreement, 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.

To estimate fair value for our interest rate swap 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 6 , 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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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.

During the three and nine months ended May 31, 2022, we incurred an impairment charge of $ 48.8 million and $ 62.2 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.

We fully impaired the lease ROU assets for locations we will not sublease and substantially all the Property, equipment and leasehold improvements associated with the related vacated leased office space as there are no expected cash flows related to these items.

Due to the subjective nature of the unobservable inputs used, the fair value measurement for the asset impairments are classified within Level 3 of the fair value hierarchy.

As of February 28, 2022 and August 31, 2021, 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 rate is a variable rate, adjusted based on market conditions, it approximates the current market-rate for similar instruments available to companies with comparable credit quality and maturity, and therefore, the long-term debt is categorized as 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.

Refer to Note 17, Subsequent Events for definition of these terms and more information on the 2022 Credit Agreement.

We elected not to carry our Long-term debt at fair value.

The carrying value of our Long-term debt is net of related unamortized discount and debt issuance costs.

The fair value of our Senior Notes is 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 prices for similar instruments, adjusted for unobservable inputs to ensure comparability to our investment rating, maturity terms and principal outstanding, which are considered Level 3 inputs.

The fair value of our 2019 Revolving Credit Facility approximated its carrying value as it bore interest at a floating interest rate, which is considered a Level 2 input.

On March 1, 2022, we repaid in full and terminated the 2019 Credit Agreement.

Refer to Note 12, Debt for definitions of these terms and more information on the Senior Notes, 2022 Credit Facilities, 2019 Revolving Credit Facility and 2019 Credit Agreement.

The following table summarizes the outstanding principal amount, estimated fair value and related hierarchy level, unamortized discounts and debt issuance costs and net carrying value of our debt as of May 31, 2022 :

May 31, 2022 August 31, 2021

(in thousands) Fair Value Hierarchy Principal Amount Estimated Fair Value Principal Amount Estimated Fair Value

2027 Notes Level 1 $ 500,000 $ 475,275 $ — $ —

2032 Notes Level 1 500,000 451,730 — —

2022 Term Facility Level 3 875,000 872,813 — —

2022 Revolving Facility Level 3 250,000 248,125 — —

2019 Revolving Credit Facility Level 2 — — 575,000 575,000

Total principal amount $ 2,125,000 $ 2,047,943 $ 575,000 $ 575,000

Total unamortized discounts and debt issuance costs ( 19,858 ) ( 465 )

Total net carrying value of debt $ 2,105,142 $ 574,535

DERIVATIVE INSTRUMENTS

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We conduct business outside the U.S.

in several currencies including the British Pound Sterling, Euro, Indian Rupee, and Philippine Peso.

in several currencies including the British Pound Sterling, Indian Rupee, Euro, and Philippine Peso.

As such, we are exposed to movements in foreign currency exchange rates.

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We limit counterparties to credit-worthy financial institutions.

Refer to Note 12, Commitments and Contingencies – Concentrations of Credit Ris k, for further discussion on counterparty credit risk.

Refer to Note 13, Commitments and Contingencies – Concentrations of Credit Risk , for further discussion on counterparty credit risk.

In designing a specific hedging approach, we considered several factors, including offsetting exposures, the significance of exposures, the forecasting of risk and the potential effectiveness of the hedge.

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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 hedge is settled.

There was no discontinuance of cash flow hedges during the six months ended February 28, 2022 or February 28, 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

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.

There was no discontinuance of cash flow hedges during the three and nine months ended May 31, 2022 or May 31, 2021, and as such, no corresponding gains or losses related to ch anges in the value of our contracts were reclassified into earnings prior to settlement.

As of May 31, 2022, we maintained foreign currency forward contracts to hedge a portion of our exposures primarily related to the British Pound Sterling, Indian Rupee, Euro and Philippine Peso.

We entered into a series of forward contracts to mitigate our currency exposure ranging from 25 % to 75 %, as of May 31, 2022, over their respective hedged periods.

The current foreign currency forward contracts are set to mature at various points between the fourth quarter of fiscal 2022 through the third quarter of fiscal 2023.

As of May 31, 2022, the gross notional value of foreign currency forward contracts to purchase Philippine Pesos and Indian Rupees with U.S.

dollars was ₱ 1.4 billion and Rs 2.6 billion, respectively.

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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.

2020 Swap Agreement

On March 5, 2020, we entered into an interest rate swap agreement ("2020 Swap Agreement") with a notional amount of $ 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 ("2022 Swap Agreement") with a notional amount of $ 800.0 million.

The 2022 Swap Agreement hedges a portion of our outstanding floating Secured Overnight Financing Rate ("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 the 2022 Swap Agreement will decline by $ 100.0 million on a quarterly basis, to align with our expected debt balances, beginning May 31, 2022 and maturing on February 28, 2024.

As of May 31, 2022, the notional amount of the 2022 Swap Agreement was $ 700.0 million.

We have designated and accounted for this instrument as a cash flow hedge with the unrealized gains or losses on the 2022 Swap Agreement recorded in AOCL in the Consolidated Balance Sheets.

Realized gains or losses are subsequently reclassified into Interest expense, net in the Consolidated Statements of Income when settled.

Since its inception on March 1, 2022 and through May 31, 2022, the interest rate swap was considered highly effective.

Refer to Note 12, Debt, for further discussion of the 2022 Credit Facilities.

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

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

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Gross Notional Value

February 28, 2022 August 31, 2021

May 31, 2022 August 31, 2021

Foreign currency forward contracts $ 156,097 $ 154,728

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(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

Derivatives designated as hedging instruments Balance Sheet Classification May 31, 2022 August 31, 2021 Balance Sheet Classification May 31, 2022 August 31, 2021

Foreign currency forward contracts Prepaid expenses and other current assets $ 554 $ 1,384 Accounts payable and accrued expenses $ 3,963 $ 1,201

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Total cash flow hedges $ 8,605 $ 1,384 $ 3,963 $ 4,181

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

All derivatives were designated as hedging instruments as of May 31, 2022 and August 31, 2021.

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:

The following table provides the pre-tax effect of derivative instruments in cash flow hedging relationships for the three months ended May 31, 2022 and May 31, 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,

(in thousands) May 31, May 31,

Derivatives in Cash Flow Hedging Relationships 2022 2021 2022 2021

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Total cash flow hedges $ 1,515 $ 2,531 $ ( 645 ) $ 1,170

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,

The following table provides the pre-tax effect of derivative instruments in cash flow hedging relationships for the nine months ended May 31, 2022 and May 31, 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) May 31, May 31,

Derivatives in Cash Flow Hedging Relationships 2022 2021 2022 2021

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Total cash flow hedges $ 4,317 $ 6,064 $ ( 3,122 ) $ 3,114

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 derivat ive losses of $ 1.9 m illion 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.

As of May 31, 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 May 31, 2022, we estimate that net pre-tax derivative gains of $ 2.0 million related to the cash flow hedges included in AOCL will be reclassified into earnings within the next 12 months.

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, 2022 and August 31, 2021, 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.

During fiscal 2022 and 2021, we completed acquisitions of several businesses, with the most significant cash flows related to the acquisitions of Cobalt Software, Inc.

As of May 31, 2022 and August 31, 2021, there were no material amounts recorded net on the Consolidated Balanc e Sheets.

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"), Cobalt Software, Inc.

("Cobalt") and Truvalue Labs, Inc.

On March 1, 2022, we completed the acquisition of 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.

Refer to Note 17 , Subsequent Events for more information on our acquisition of CGS.

CUSIP Global Services

On March 1, 2022, we completed the acquisition of CGS, previously operated by S&P Global Inc.

on behalf of the American Bankers Association ("ABA"), for a cash purchase price of $ 1.932 billion, inclusive of preliminary 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 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 CGS purchase price was in excess of the fair value of net assets a cquired, resulting in the recognition of goodwill.

We expect to finalize the allocation of the purchase price for CGS as soon as possible, but in any event, no later than one year from the acquisition date.

The preliminary purchase price allocation is subject to change pending a final valuation of the assets and liabilities acquired and the finalization of working capital adjustments.

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

Amortizable intangible assets

Revenues-generating contract 1,583,000 36 years Straight-line

Client relationships 164,000 26 years Straight-line

Acquired databases 46,000 15 years Straight-line

Goodwill 206,981

Current liabilities 2

Deferred revenues, long-term ( 1,482 )

Total purchase price $ 1,932,256

Includes an accounts receivable balance of $ 38.0 million.

Includes a deferred revenues balance of $ 98.8 million.

Goodwill totaling $ 207.0 million represents the excess of the CGS purchase price over the fair value of net assets acquired, representing future economic benefits that we expect to achieve as a result of the acquisition, and is included in the Americas segment.

Goodwill generated from the CGS acquisition is deductible for income tax purposes.

The majority of the net assets acquired relate to a Revenues-generating contract 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 term of the current agreement and the likelihood of renewals.

The useful life assigned to the Client relationships intangible asset considers the strong historical client retention as a basis for expected future retention.

The useful life assigned to Acquired databases considers there are limited changes to the data on an annual basis, which extends the life of the acquired asset.

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.

Pro forma information has not been presented because the effect of the CGS acquisition is not material to our Consolidated Financial Statements.

Cobalt Software, Inc.

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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.

The Cobalt purchase price was in excess of the fair value of net assets acqui red, resulting in the recognition of goodwill.

We expect to finalize the allocation of the purchase price for Cobalt as soon as possible, but in any event, no later than one year from the acquisition date.

The preliminary purchase price allocation is subject to change due to the finalization of deferred tax balances.

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

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Software technology 8,100 7 years Straight-line

Client relationships 900 12 years Straight-line

Trade names 2,800 15 years Straight-line

Client relationships 900 12 years Straight-line

Goodwill 30,058

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Pro forma information has not been presented because the effect of the TVL acquisition is not material to our Consolidated Financial Statements.

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

Changes in the carrying amount of goodwill by segment for the nine months ended May 31, 2022 are as follows:

(in thousands)

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Foreign currency translations — ( 26,092 ) ( 430 ) ( 26,522 )

Balance at February 28, 2022 $ 473,857 $ 309,477 $ 2,838 $ 786,172

Balance at May 31, 2022 $ 680,837 $ 295,486 $ 2,537 $ 978,860

Goodwill is not amortized as it is estimated to have an indefinite life.

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We concluded it was more likely than not that the fair value of each of our segments was greater than its respective carrying value and no impairment charge was required.

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:

May 31, 2022 August 31, 2021

(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

Revenue-generating contract 36

$ 1,583,000 $ 10,993 $ 1,572,007 $ — $ — $ —

Client relationships 8 to 26

264,931 53,485 211,446 101,077 49,139 51,938

Software technology 5 to 9

124,710 95,725 28,985 121,556 87,207 34,349

Developed technology 3 to 5

73,704 30,574 43,130 57,666 21,278 36,388

Acquired databases 15

46,000 767 45,233 — — —

Data content 5 to 20

35,814 26,186 9,628 36,681 26,835 9,846

Trade names 15

6,781 4,472 2,309 6,900 4,435 2,465

Total $ 2,134,940 $ 222,202 $ 1,912,738 $ 323,880 $ 188,894 $ 134,986

The weighted average useful life of our intangible assets at May 31, 2022 was 32.8 years.

As described in Note 7 , Acquisitions , we acquired several intangible assets as part of the CGS acquisition.

The weighted average useful life of our intangible assets excluding those acquired from CGS at May 31, 2022 was 9.9 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, during fiscal years 2022 and 2021.

The intangible assets have no assigned residual values.

Intangible asset amortization expense recorded during the three months ended May 31, 2022 and May 31, 2021 was $ 21.5 million and $ 8.2 million, respectively.

For the nine months ended May 31, 2022 and May 31, 2021, intangible asset amortization expense was $ 40.6 million and $ 23.4 million, respectively.

As of May 31, 2022, estimate d intangible asset amortization expense for each of the next five years and thereafter are as follows:

Fiscal Year (in thousands)

Estimated Amortization Expense

2022 (remaining three months) $ 22,725

Thereafter 1,587,607

Total $ 1,912,738

Income tax expense is based on taxable income determined in accordance with current enacted laws and tax rates.

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The provision for income taxes is as follows:

Three Months Ended Six Months Ended

February 28, February 28,

Three Months Ended Nine Months Ended

May 31, May 31,

(in thousands) 2022 2021 2022 2021

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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 by research and development ("R&D") tax credits and a foreign derived intangible income ("FDII") deduction.

The effective tax rate for 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, 2022, the provision for income taxes was $ 12.0 million, compared with $ 18.0 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 $ 4.2 million reduction from higher windfall 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.

corporate income tax rate for the three and nine months ended May 31, 2022, driven mainly by research and development ("R&D") tax credits and a foreign derived intangible income ("FDII") deduction.

The effective tax rate for the three and nine months ended May 31, 2022 is further reduced by windfall tax benefits associated with the employee exercise of stock options.

For the three months ended May 31, 2022, the provision for income taxes was $ 10.4 million, compared with $ 13.6 million for the same period a year ago.

The provision decreased mainly due to lower pretax income for the three months ended May 31, 2022, compared with the prior year period.

For the nine months ended May 31, 2022, the provision for income taxes was $ 34.7 million, compared with $ 50.6 million for the same period a year ago.

The provision decreased mainly due to lower pretax income and $ 12.0 million in higher windfall tax benefits for the nine months ended May 31, 2022, compared with the prior year period.

On September 1, 2019, we adopted ASC 842, Leases ("ASC 842").

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Certain adjustments to our lease ROU assets may be required for items such as the payment of initial direct costs or incentives received.

As of February 28, 2022, we recognized $ 206.2 million of Lease right-of-use assets, net and $ 264.3 million of combined Current lease liabilities and Long-term lease liabilities in the Consolidated Balance Sheets.

As of May 31, 2022, we recognized $ 176.9 million of Lease right-of-use assets, net and $ 257.8 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 14 years and did not include any renewal or termination options that were not yet reasonably certain to be exercised.

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, 2022 :

(in thousands)

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Fiscal Years Ended August 31,

2022 (remaining six months) $ 21,408

2022 (remaining three months) $ 10,286

Thereafter 150,925

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The components of lease cost related to our operating leases were as follows:

Three Months Ended Six Months Ended

February 28, February 28,

Three Months Ended Nine Months Ended

May 31, May 31,

(in millions)

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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

May 31, 2022 August 31, 2021

Weighted average remaining lease term (in years)

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

Six Months Ended

Nine Months Ended

(in millions)

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Primarily related to lease term reassessments based on contractual options to early terminate, resulting in a reduction to the lease liability and the corresponding Lease ROU asset.

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.

During the three and nine months ended May 31, 2022, we incurred an impairment charge of $ 24.2 million and $ 31.5 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.

Our debt obligations at February 28, 2022 and August 31, 2021 consisted of the following:

(in thousands) February 28, 2022 August 31, 2021

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 as of May 31, 2022 and August 31, 2021 consisted of the following:

(in thousands) Issuance Date Maturity Date May 31, 2022 August 31, 2021

2019 Credit Agreement

2019 Revolving Credit Facility 3/29/2019 3/29/2024 $ — $ 575,000

2019 Revolving Credit Facility debt issuance costs ( 375 ) ( 465 )

Long-term debt $ 574,625 $ 574,535

2022 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 borrowed $ 575.0 million of the available $ 750.0 million provided by 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.

Borrowings under the 2019 Revolving Credit Facility bear 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.

Interest on the loan outstanding under the 2019 Revolving Credit Facility is payable quarterly, in arrears, and on the maturity date.

2022 Term Facility 3/1/2022 3/1/2025 875,000 —

2022 Revolving Facility 3/1/2022 3/1/2027 250,000 —

2027 Notes 3/1/2022 3/1/2027 500,000 —

2032 Notes 3/1/2022 3/1/2032 500,000 —

Total unamortized discounts and debt issuance costs ( 19,858 ) ( 465 )

Total Long-term debt $ 2,105,142 $ 574,535

As of May 31, 2022, annual maturities on our total debt obligations, based on contract maturity, were as follows:

(in thousands)

Fiscal Years Ended August 31,

2022 (remaining three months) $ —

Thereafter 1,250,000

Total $ 2,125,000

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 provided a $ 750.0 million revolving credit facility (the "2019 Revolving Credit Facility").

We borrowed $ 575.0 million of the available $ 750.0 million provided by the 2019 Revolving Credit Facility.

We were required to pay a commitment fee using a pricing grid based on the daily amount by which the available balance in the 2019 Revolving Credit Facility exceeded the borrowed amount.

All outstanding loan amounts were reported as Long-term debt within the Consolidated Balance Sheets.

Borrowings under the 2019 Revolving Credit Facility bore interest on the outstanding principal amount at a rate equal to the daily LIBOR plus a spread using a debt leverage pricing grid.

Interest on the amounts outstanding under the 2019 Revolving Credit Facility was payable quarterly, in arrears, and on the maturity date.

During fiscal 2019, 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.

These costs were capitalized as debt issuance costs and were amortized into Interest expense, net in the Consolidated Statements of Income ratably over the term of the 2019 Credit Agreement.

The 2019 Credit Agreement contained covenants and requirements restricting certain of our activities, which were usual and customary for this type of loan.

In addition, the 2019 Credit Agreement required 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 through the termination date of the 2019 Credit Agreement.

On March 1, 2022 , we terminated the 2019 Credit Agreement and amortized the remaining related $ 0.4 million of capitalized debt issuance costs into Interest expense, net in the Consolidated Statements of Income.

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.

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.

On March 1, 2022, we entered into a credit agreement (the "2022 Credit Agreement") which provides for a senior unsecured term loan credit facility in an aggregate principal amount of $ 1.0 billion (the “2022 Term Facility”) and a senior unsecured revolving credit facility in an aggregate principal amount of $ 500.0 million (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.

On March 1, 2022, we borrowed $ 1.0 billion under the 2022 Term Facility and $ 250.0 million of the available $ 500.0 million under the 2022 Revolving Facility.

We are required to pay a commitment fee on the daily unused amount of the 2022 Revolving Facility using a pricing grid which was 0.125 % as of May 31, 2022 and can fluctuate between 0.10 % per annum and 0.25 % per annum.

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 the third quarter of 2022, we incurred approximately $ 9.5 million in debt issuance costs related to the 2022 Credit Facilities.

We defer costs we incur to issue debt, which are presented in the Consolidated Balance Sheets as a direct deduction from the carrying amount of the related debt liability, and we amortize these costs to Interest expense, net in the Consolidated Statements of Income over the contractual term on a straight-line basis, which approximates the effective interest method.

Loans under the 2022 Term Facility are subject to scheduled amortization payments on the last day of each fiscal quarter, commencing with August 31, 2022 and ending on the last such day to occur prior to the maturity date.

Each amortization payment is equal to 1.25 % of the original principal amount of the 2022 Term Facility.

Any remaining outstanding principal will be repaid in full on March 1, 2025, the maturity date of the 2022 Term Facility.

The 2022 Credit Facilities are not otherwise subject to any mandatory prepayments.

We may voluntarily prepay loans under the 2022 Credit Facilities at any time without premium or penalty.

Prepayments of the 2022 Term Facility shall be applied to reduce the subsequent scheduled amortization payments in direct order of maturity.

During the third quarter of fiscal 2022, we repaid $ 125.0 million under the 2022 Term Facility.

The 2022 Credit Agreement provides that loans denominated in U.S.

dollars, at our option, will bear interest at either (i) one-month Term SOFR (with a 10 basis points credit spread adjustment and subject to a “ zero ” floor), (ii) Daily Simple SOFR (with a 10 basis points credit spread adjustment and subject to a “ zero ” floor) or (iii) an alternate base rate.

Under the 2022 Credit Agreement, loans denominated in Pounds Sterling will bear interest at Daily Simple Sterling Overnight Index Average ("SONIA") (subject to a “ zero ” floor) and loans denominated in Euros will bear interest at Euro Interbank Offered Rate ("EURIBOR") (subject to a “ zero ” floor), in each case, plus an applicable interest rate margin.

The interest rate margin will be based upon our senior unsecured non-credit enhanced long-term debt rating and our total leverage ratio.

The outstanding borrowings under the 2022 Credit Facilities through the third quarter of fiscal 2022 bore interest at a rate equal to the applicable Term SOFR rate plus a spread using a debt leverage pricing grid, currently at 1.1 %.

Int erest 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 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 Credit Agreement contains usual and customary affirmative and negative covenants for facilities of this type, including limitations on indebtedness of non-guarantor subsidiaries, liens, sale and leaseback transactions, mergers and certain other fundamental changes and change in nature of business.

The 2022 Credit Agreement contains a financial covenant requiring maintenance of a total leverage ratio, permitting netting up to $ 350.0 million of unrestricted cash and cash equivalents, no greater than (a) 4.00 to 1.00 as of the last day of each fiscal quarter beginning with the fiscal quarter ending on May 31, 2022, (b) 3.75 to 1.00 as of the last day of each fiscal quarter beginning with the fiscal quarter ending on August 31, 2023 and (c) 3.50 to 1.00 as of the last day of each fiscal quarter beginning with the fiscal quarter ending on August 31, 2024, but if we consummate a material acquisition where the aggregate consideration payable is $ 200.0 million or more, we may, on no more than two occasions, increase the maximum total leverage ratio then applicable under the financial covenant by 0.50 to 1.00 with respect to the fiscal quarter in which such material acquisition is consummated and the subsequent four consecutive fiscal quarters.

The 2022 Credit Agreement provides that, in the event that we no longer have a senior unsecured non-credit enhanced long-term debt rating or a corporate rating from at least two of the rating agencies where such rating is Baa3, BBB- or BBB-, respectively, or higher, (i) our wholly-owned domestic subsidiaries will be required to guarantee the 2022 Credit Facilities, subject to customary exceptions, (ii) we will be subject to limitations on additional indebtedness, investments, dispositions, restricted payments and burdensome agreements, and (iii) we will be required to maintain an interest coverage ratio of no less than 3.00 to 1.00 for any period of four consecutive fiscal quarters.

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").

The Senior Notes were issued at an aggregate discount of $ 2.8 million, and during the third quarter of 2022 we incurred approximately $ 9.1 million in debt issuance costs related to the Senior Notes.

We deferred the debt discounts and costs we incurred to issue debt, which are presented in the Consolidated Balance Sheets as a net direct deduction from the carrying amount of the related debt liability, and we amortize these costs to Interest expense, net in the Consolidated Statements of Income over the contractual term leveraging the effective interest method.

The 2027 Notes and the 2032 Notes will mature on March 1, 2027 and March 1, 2032, respectively.

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

The Senior 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 Senior 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 defined in the Supplemental Indenture), we must offer to repurchase the Senior Notes at 101 % of their principal amount, plus accrued and unpaid interest, if any.

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 Swap Agreement to hedge a portion of our outstanding floating SOFR rate debt with a fixed interest rate of 1.162 %.

Refer to Note 6, Derivative Instruments for further discussion of the 2020 Swap Agreement and 2022 Swap Agreement.

Interest Expense

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

For the three months ended May 31, 2022 and May 31, 2021, we recorded interest expense on our outstanding debt, including the related amortization of debt issuance costs and debt discounts, net of the effects of the related interest rate swap agreements, of $ 15.8 million and $ 2.0 million, respectively in Interest expense, net in the Consolidated Statements of Income.

For the nine months ended May 31, 2022 and May 31, 2021, we recorded interest expense on our outstanding debt, including the related amortization of debt issuance costs and debt discounts, net of the effects of the interest rate swap agreement, of $ 19.6 million and $ 6.0 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 1.75 % and 1.38 % as of May 31, 2022 and August 31, 2021, respectively.

Refer to Note 6, Derivative Instruments for further discussion of the 2020 Swap Agreement and 2022 Swap Agreement.

COMMITMENTS AND CONTINGENCIES

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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.

Purchase obligations represent our legally-binding agreements to purchase fixed or minimum quantities at determinable prices.

Our purchase obligations consist of two primary arrangements, data content and hosting services.

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 .

During the third quarter of fiscal 2022, we entered into a cloud hosting contract with total purchase commitments of approximately $ 275.0 million with a contract term of six years .

This cloud hosting contract replaced a previous contract which was included in the total purchase commitments as of August 31, 2021, with a minimum purchase commitment of $ 125.0 million.

We also have contractual obligations related to our lease liabilities and outstanding debt.

Refer to Note 10, Leases, Note 11, Debt and Note 17, Subsequent Events for information regarding lease commitments;

outstanding debt obligations;

and newly issued senior notes and debt obligations, respectively.

Refer to Note 11, Leases and Note 12, Debt for further information.

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.

As of May 31, 2022, we had approximately $ 0.5 million of standby letters of credit outstanding.

Refer to Note 12, Debt for more information on these covenants.

No liabilities related to these arrangements are reflected in the Company's balance sheets.

Contingencies

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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.

Based on information available as of May 31, 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

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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;

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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.

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

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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.

As of May 31, 2022, the receivable reserve was $ 3.4 million compared with $ 6.4 million as of August 31, 2021.

Derivative Instruments

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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.

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 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.

STOCKHOLDERS’ EQUITY

Shares of common stock outstanding were as follows:

Six Months Ended

Nine Months Ended

(in thousands) 2022 2021

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Balance, end of period 37,971 37,771

(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.

(1) For the nine months ended May 31, 2022 and May 31, 2021, we repurchased 7,432 and 7,469 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.

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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 no t 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.

The suspension of our share repurchase

program allows us to prioritize the repayment of debt under the 2022 Credit Facilities.

Refer to Note 12, Debt for more information on the 2022 Credit Facilities.

As such, for the three months ended May 31, 2022, we did no t make any repurchases under our existing share repurchase program, compared to 178,100 shares repurchased for $ 57.6 million for the three months ended May 31, 2021.

During the nine months ended May 31, 2022, we repurchased 46,200 shares for $ 18.6 million under our existing share repurchase program compared with 531,859 shares for $ 172.2 million in the same period a year ago.

As of May 31, 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.

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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).

Our Board of Directors declared dividends in the six months ended February 28, 2022 and February 28, 2021 as follows:

For the nine months ended May 31, 2022, 18,384 shares of previously granted restricted stock vested and were included in common stock outstanding as of May 31, 2022 (recorded net of 7,172 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 nine months ended May 31, 2021, 18,995 shares of previously granted restricted stock vested and were included in common stock outstanding as of May 31, 2021 (recorded net of 7,151 shares repurchased from employees at a cost of $ 2.3 million to cover their cost of taxes upon vesting of the restricted stock).

Our Board of Directors declared dividends in the nine months ended May 31, 2022 and May 31, 2021 as follows:

Year Ended Dividends per

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Second Quarter $ 0.82 February 28, 2022 $ 31,065 March 17, 2022

Third Quarter $ 0.89 May 31, 2022 $ 33,795 June 16, 2022

First Quarter $ 0.77 November 30, 2020 $ 29,266 December 17, 2020

Second Quarter $ 0.77 February 26, 2021 $ 29,141 March 18, 2021

Third Quarter $ 0.82 May 31, 2021 $ 30,972 June 17, 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.

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The components of AOCL are as follows:

(in thousands) February 28, 2022 August 31, 2021

(in thousands) May 31, 2022 August 31, 2021

Accumulated unrealized gains (losses) on cash flow hedges $ 3,524 $ ( 2,095 )

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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,

Three Months Ended Nine Months Ended

May 31, May 31,

(in thousands, except per share data) 2022 2021 2022 2021

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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 .

There were 291,716 stock options excluded from the calculation of diluted EPS for the three and nine months ended May 31, 2022 as they were out-of-the-money and their inclusion would have been anti-dilutive.

There were 8,810 stock options excluded from the calculation of diluted EPS for the three and nine months ended May 31, 2021 as they were out-of-the-money and their inclusion would have been anti-dilutive.

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.

For the three and nine months ended May 31, 2022, there were 95,359 performance-based awards excluded from the calculation of diluted EPS.

For the three and nine months ended May 31, 2021, there were 71,275 performance-based awards excluded from the calculation of diluted EPS.

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.

We recognized total stock-based compensation expense of $ 14.7 million and $ 11.0 million during the three months ended May 31, 2022 and May 31, 2021, respectively.

During the nine months ended May 31, 2022 and May 31, 2021, we recognized total stock-based compensation expense of $ 40.6 million and $ 33.4 million, respectively.

As of May 31, 2022, $ 121.1 million of total unrecognized compensation expense related to non-vested awards is expected to be recognized over a weighted average period of 3.1 years.

There was no stock-based compensation capitalized as of May 31, 2022 and May 31, 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.

During the nine months ended May 31, 2022, we granted 302,952 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 $ 434.64 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 majority of the stock options granted during the nine months ended May 31, 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.

As of May 31, 2022, we had 4.7 million share-based awards available for grant under the LTIP.

Employee Stock Option Fair Value Determinations

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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.

As of May 31, 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:

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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";

During the nine months ended May 31, 2022, we granted 71,933 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 .

The Restricted Stock Awards granted under the LTIP during the nine months ended May 31, 2022 had a weighted average grant date fair value of $ 418.16 .

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.

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The expense associated with Restricted Stock Awards is amortized over the vesting period.

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.

The majority of the Restricted Stock Awards granted during the nine months ended May 31, 2022 were 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.

Substantially all the other RSUs granted during the nine months ended May 31, 2022 vest one-third annually on the anniversary date of grant and are fully vested after three years .

Non-Employee Director Restricted Stock Units

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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 .

The RSUs granted under the Director Plan during the nine months ended May 31, 2022 had a weighted average grant date fair value of $ 425.49 .

Employee Stock Purchase Plan

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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.

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.

During the three months ended May 31, 2022, employees purchased 9,904 shares through the ESPP at a weighted average price of $ 328.85 compared with 10,621 shares at a weighted average price of $ 267.02 for the three months ended May 31, 2021.

During the nine months ended May 31, 2022, employees purchased 27,321 shares through the ESPP at a weighted average price of $ 336.22 compared with 29,418 shares at a weighted average price of $ 271.94 for the nine months ended May 31, 2021.

Stock-based compensation expense related to the ESPP was $ 0.6 million for the three months ended May 31, 2022 and $ 0.5 million for the three months ended May 31, 2021.

Stock-based compensation expense related to the ESPP was $ 1.7 million for the nine months ended May 31, 2022 and $ 1.5 million for the nine months ended May 31, 2021.

As of May 31, 2022 the ESPP had 111,635 shares reserved for future issuance.

SEGMENT INFORMATION

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.

(i) they engage in business activities from which they may earn revenue 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.

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The Asia Pacific segment serves our clients in Asia and Australia.

Segment revenues reflect sales to clients based in these respective geographic locations.

Segment revenue reflects 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.

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

The following tables reflect the results of operations of our segments as of May 31, 2022 and May 31, 2021:

(in thousands) Americas EMEA Asia Pacific Total

For the three months ended February 28, 2022

For the three months ended May 31, 2022

Revenues $ 309,740 $ 128,326 $ 50,685 $ 488,751

Operating income (1)

$ 11,212 $ 53,228 $ 32,814 $ 97,254

Capital expenditures $ 12,362 $ 466 $ 2,576 $ 15,404

(in thousands)

For the three months ended February 28, 2021

(in thousands) Americas EMEA Asia Pacific Total

For the three months ended May 31, 2021

Revenues $ 253,786 $ 106,833 $ 38,939 $ 399,558

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(in thousands)

For the six months ended February 28, 2022

For the nine months ended May 31, 2022

Americas EMEA Asia Pacific Total

Revenue $ 540,572 $ 229,594 $ 85,678 $ 855,844

Revenues $ 850,312 $ 357,920 $ 136,363 $ 1,344,595

Operating income (1)

$ 115,613 $ 139,826 $ 87,824 $ 343,263

Capital expenditures $ 29,911 $ 828 $ 5,211 $ 35,950

(in thousands)

For the six months ended February 28, 2021

For the nine months ended May 31, 2021

Americas EMEA Asia Pacific Total

Revenue $ 492,327 $ 211,270 $ 76,396 $ 779,993

Revenues $ 746,112 $ 318,103 $ 115,336 $ 1,179,551

Operating income $ 161,789 $ 122,392 $ 70,684 $ 354,865

Capital expenditures $ 26,415 $ 1,390 $ 19,609 $ 47,414

(1) Includes an impairment charge related to our lease ROU assets and PPE associated with vacating certain leased office space.

For the three months ended May 31, 2022, the impairment charge was $ 44.4 million in the Americas, $ 4.1 million in EMEA and $ 0.3 million in Asia Pacific.

For the nine months ended May 31, 2022, the impairment charge was $ 57.7 million in the Americas, $ 4.2 million in EMEA and $ 0.3 million in Asia Pacific.

The following table reflects the total assets for our segments:

Segment Assets (in thousands)

February 28, 2022 August 31, 2021

May 31, 2022 August 31, 2021

Americas $ 3,246,871 $ 1,144,693

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Total assets $ 4,068,564 $ 2,224,940

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.

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).

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 under the 2019 Credit Agreement and to pay related transaction fees, costs and expenses.

The 2027 Notes and the 2032 Notes will mature on March 1, 2027 and March 1, 2032, respectively.

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 defined in the Supplemental Indenture), we must offer to repurchase the Notes at 101 % of their principal amount, plus accrued and unpaid interest, if any.

Establishment of 2022 Credit Agreement

On March 1, 2022, FactSet Research Systems Inc.

entered into a credit agreement (the “2022 Credit Agreement”), which provides for a senior unsecured term loan credit facility in an aggregate principal amount of $ 1.0 billion (the “2022 Term Facility”) and a senior unsecured revolving credit facility in an aggregate principal amount of $ 500.0 million (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.

On March 1, 2022, we borrowed $ 1.0 billion under the 2022 Term Facility and $ 250.0 million under 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 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 based upon our senior unsecured non-credit enhanced long-term debt rating and our total leverage ratio.

We will also pay a commitment fee under the 2022 Revolving Facility that will fluctuate between 0.10 % per annum and 0.25 % per annum on the daily unused amount of the 2022 Revolving Facility.

Loans under the 2022 Term Facility are subject to scheduled amortization payments in an aggregate annual amount equal to 5.0 % of the original principal amount thereof.

The 2022 Credit Facilities are not otherwise subject to any mandatory prepayments.

We may voluntarily prepay loans under the 2022 Credit Facilities at any time without premium or penalty.

The 2022 Credit Agreement contains a financial covenant requiring maintenance of a total leverage ratio which is no greater than 4.00 to 1.00 for the fiscal quarter ending on May 31, 2022.

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.

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 an interest rate swap agreement ("2022 Swap Agreement") 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 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

On March 1, 2022, in connection with the entry into the 2022 Credit Agreement, we repaid in full and terminated the 2019 Credit Agreement and amortized the remaining $ 0.4 million of capitalized debt issuance costs related to the 2019 Credit Agreement.

The 2020 Swap Agreement was also terminated on March 1, 2022, which will result in a one-time benefit of $ 3.5 million to be recognized during the third quarter of fiscal 2022, based on the fair market value of the 2020 Swap Agreement as of the termination date.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements