What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2022-10-21 compared with 2021-10-22 · 649 added, 542 removed, 778 unchanged (60% of the section changed)

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Management’s Report on Internal Control over Financial Reporting

Reports of Independent Registered Public Accounting Firm

Reports o f Independent Regis tered Public Accounting Firm Reports of Independent Registered Public Accounting Firm (PC AOB ID :

Consolidated Financial Statements:

Consolidated Statements of Income for the years ended August 31, 2021, 2020 and 2019

Consolidated Statements of Income for the years end ed August 31, 2022, 2021 and 2020

Consolidated Statements of Comprehensive Income for the years ended August 31, 2022, 2021 and 2020

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Management’s Statement of Responsibility for Financial Statements

FactSet’s Consolidated Financial Statements are prepared by management, which is responsible for their fairness, integrity and objectivity.

The accompanying Consolidated Financial Statements have been prepared in conformity with accounting principles generally accepted in the United States of America and include amounts based on management’s estimates and judgments.

Our management prepares and is responsible for the fairness, integrity and objectivity of our Consolidated Financial Statements.

All financial information in this Report on Form 10-K has been presented on a basis consistent with the information included in the accompanying financial statements.

FactSet’s policies and practices reflect corporate governance initiatives that are compliant with the listing requirements of the New York Stock Exchange, the NASDAQ Stock Market and the corporate governance requirements of the Sarbanes-Oxley Act of 2002.

Management, with oversight by our Board of Directors, has established and maintains a strong ethical climate so that our affairs are conducted to the highest standards of personal and corporate conduct.

FactSet maintains accounting systems, including internal accounting controls, designed to provide reasonable assurance of the reliability of financial records and the protection of assets.

Our policies and practices reflect corporate governance initiatives that are compliant with the listing requirements of the New York Stock Exchange, the NASDAQ Stock Market and the corporate governance requirements of the Sarbanes-Oxley Act of 2002.

Our management, with oversight by our Board of Directors, has established and maintains a strong ethical climate so that our affairs are conducted to the highest standards of personal and corporate conduct.

We maintain accounting systems, including internal accounting controls, designed to provide reasonable assurance of the reliability of financial records and the protection of assets.

The concept of reasonable assurance is based on recognition that the cost of a system should not exceed the related benefits.

The effectiveness of those systems depends primarily upon the careful selection of financial and other managers, clear delegation of authority and assignment of accountability, inculcation of high business ethics and conflict-of-interest standards, policies and procedures for coordinating the management of corporate resources, and the leadership and commitment of top management.

In compliance with the Sarbanes-Oxley Act of 2002, FactSet assessed its internal control over financial reporting as of August 31, 2021 and issued a report (see below).

In compliance with the Sarbanes-Oxley Act of 2002, we assessed our internal control over financial reporting as of August 31, 2022 and issued a report (see below).

Management’s Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting for FactSet.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting for FactSet.

Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

Internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of FactSet;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles and that receipts and expenditures of FactSet are being made only in accordance with authorizations of management and directors of FactSet;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors;

and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements.

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Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.

Management (with the participation of the Chief Executive Officer and Chief Financial Officer) conducted an evaluation of the effectiveness of FactSet’s internal control over financial reporting based on the framework in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Based on this evaluation, management concluded that FactSet’s internal control over financial reporting was effective as of August 31, 2021.

Ernst & Young LLP, an independent registered public accounting firm, has audited the effectiveness of FactSet’s internal control over financial reporting and has issued a report on FactSet’s internal control over financial reporting, which is included in their report on the subsequent page.

Our management (with the participation of the Chief Executive Officer and Chief Financial Officer) conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

In accordance with the guidance issued by the Securities and Exchange Commission, companies are permitted to exclude acquisitions from their first assessment of internal control over financial reporting following the date of acquisition.

Based on those guidelines, our management's assessment of the effectiveness of our internal control over financial reporting excluded CUSIP Global Services ("CGS") , which we acquired in the third quarter of fiscal 2022.

E xcluding goodwill and intangible assets, CGS represented 5% percent of our total assets as of August 31, 2022 and 5% percent of our consolidated revenues for fiscal year 2022 .

Refer to Note 6, Acquisitions , for additional information on the CGS acquisition.

Based on this evaluation, our management concluded that our internal control over financial reporting was effective as of August 31, 2022 .

Ernst & Young LLP (PCAOBID:

42), an independent registered public accounting firm, has audited the

effectiveness of our internal control over financial reporting and has issued a report on our internal control over financial reporting, which is included in their report on the subsequent page.

PHILIP SNOW /s/ LINDA S.

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We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of August 31, 2022, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated October 21, 2022 expressed an unqualified opinion thereon.

Adoption of Accounting Standards Update (ASU) No.

As discussed in Note 3, Summary of Significant Accounting Policies , to the Consolidated Financial Statements, the Company changed its method of accounting for leases in 2020 due to the adoption of ASU No.

2016-02, Leases (Topic 842).

Basis for Opinion

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We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion on the Consolidated Financial Statements, taken as a whole, and we are not, by communicating the critical audit matter below providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the Consolidated Financial Statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Measurement of income tax provision

Description of the Matter As discussed in Note 3, Summary of Significant Accounting Policies, and 11, Income Taxes, of the Consolidated Financial Statements, the Company serves international markets and is subject to income taxes in the U.S.

Description of the Matter As discussed in Note 2, Significant Accounting Policies, and Note 10, Income Taxes, of the Consolidated Financial Statements, the Company serves international markets and is subject to income taxes in the U.S.

and numerous foreign jurisdictions, which affect the Company’s provision for income taxes.

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We recalculated income tax expense using management’s methodology and agreed the data used in the calculations to the Company’s underlying books and records.

We involved our tax professionals to evaluate the application of tax law to management’s allocation methodologies and tax positions.

We involved our tax professionals to evaluate the application of tax law to management’s allocation methodologies and tax position.

This included assessing the Company’s correspondence with the relevant tax authorities and evaluating third-party reports and advice obtained by the Company.

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We have evaluated the Company’s income tax disclosures included in Note 10, Income Taxes , of the Consolidated Financial Statements in relation to these matters.

Valuation of Intangible Assets from Business Acquisition

Description of the Matter As described in Note 6, Acquisitions , to the Consolidated Financial Statements, during the year ended August 31, 2022, the Company completed the CUSIP Global Services business acquisition for total consideration of $1.932 billion, inclusive of working capital adjustments.

The transaction was accounted for under the acquisition method of accounting whereby the total purchase price was allocated to assets acquired and liabilities assumed based on the estimated fair value of such assets and liabilities with the residual being allocated to goodwill.

Auditing the Company’s accounting for the CUSIP Global Services acquisition required complex auditor judgment due to the significant estimation uncertainty inherent in determining the fair value of identified intangible assets for the acquired ABA business process and customer relationships.

The significant estimation uncertainty was primarily due to the judgmental nature of the inputs to the valuation techniques used to measure the fair value of the ABA business process and customer relationships as well as the sensitivity of the respective fair values to the underlying significant assumptions.

The significant assumptions used to estimate the fair value of the ABA business process and customer relationships included revenue growth rates and operating margins.

These significant assumptions are forward-looking and could be affected by future economic and market conditions.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of the Company’s controls over the valuation of intangible assets from the acquisition.

For example, we tested controls over management’s review of the valuation models and the significant assumptions described above.

To test the estimated fair value of the acquired ABA business process and customer relationships, we performed audit procedures that included, among others, assessing the appropriateness of the valuation methodologies and testing the significant assumptions discussed above.

For example, we compared the revenue growth rates and operating margins to the historical results of the acquired business.

We further performed sensitivity analyses to evaluate the changes in the fair value of the acquired ABA business process and customer relationships that would result from changes in the significant assumptions.

In addition, we involved internal valuation specialists to assist us in our evaluation of the valuation methodologies and certain significant assumptions used by the Company.

We have evaluated the Company’s business acquisition disclosures included in Note 6, Acquisitions, of the Consolidated Financial Statements in relation to these matters.

/s/ Ernst & Young LLP

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In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of August 31, 2022, based on the COSO criteria.

As indicated in the accompanying Management’s Report on Internal Control over Financial Reporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of CGS, which are included in the 2022 Consolidated Financial Statements of the Company and constituted 5% of total assets, excluding goodwill and other intangible assets, net, as of August 31, 2022 and 5% of consolidated total revenues for the year then ended.

Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting of CGS.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the 2022 Consolidated Financial Statements of the Company and our report dated October 21, 2022, expressed an unqualified opinion thereon.

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Selling, general and administrative 433,032 331,004 342,505

Asset impairments 64,272 — 16,500

Total operating expenses 1,368,410 1,117,404 1,054,451

Operating income 475,482 474,041 439,660

Other income (expense)

Other income (expense), net

Interest expense, net ( 29,522 ) ( 6,394 ) ( 9,829 )

Other income (expense), net ( 2,366 ) ( 30 ) ( 2,697 )

Total other expense, net ( 6,424 ) ( 12,526 ) ( 16,070 )

Total other income (expense), net ( 31,888 ) ( 6,424 ) ( 12,526 )

Income before income taxes 443,594 467,617 427,134

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Net income $ 396,917 $ 399,590 $ 372,938

Other comprehensive income, net of tax:

Net unrealized (loss) gain on cash flow hedges* ( 504 ) 674 504

Foreign currency translation adjustments 835 34,577 ( 24,325 )

Other comprehensive income (loss), net of tax

Net unrealized gain (loss) on cash flow hedges* 5,245 ( 504 ) 674

Foreign currency translation adjustment gains (losses) ( 74,666 ) 835 34,577

Other comprehensive income (loss) ( 69,421 ) 331 35,251

Comprehensive income $ 327,496 $ 399,921 $ 408,189

* For the fiscal years ended August 31, 2021, 2020 and 2019, the net unrealized (loss) gain on cash flow hedges disclosed above were net of a tax benefit of $ 162 thousand, tax expense of $ 251 thousand, and a tax expense of $ 387 thousand, respectively.

* For the fiscal years ended August 31, 2022, 2021 and 2020, the net unrealized gain (loss) on cash flow hedges disclosed above were net of a tax expense of $ 1,657 thousand, tax benefit of $ 162 thousand, and a tax expense of $ 251 thousand, respectively.

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

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Accrued compensation 114,808 104,403

Deferred revenue 63,104 53,987

Deferred revenues 152,039 63,104

Dividends payable 33,860 30,845

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Deferred taxes 8,800 14,752

Deferred revenue, non-current 8,394 9,319

Deferred revenues, non-current 7,212 8,394

Taxes payable 34,211 30,279

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CASH FLOWS FROM FINANCING ACTIVITIES

Repurchases of common stock ( 264,702 ) ( 199,625 ) ( 220,372 )

Dividend payments ( 117,927 ) ( 110,439 ) ( 100,052 )

Repayment of debt — — ( 575,000 )

Proceeds from debt 2,238,355 — —

Repayment of debt ( 825,000 ) — —

Payments of debt issuance costs ( 9,736 ) — —

Dividend payments ( 125,934 ) ( 117,927 ) ( 110,439 )

Proceeds from employee stock plans 86,047 64,177 95,520

Repurchases of common stock ( 18,639 ) ( 264,702 ) ( 199,625 )

Other financing activities ( 5,859 ) ( 4,259 ) ( 3,531 )

Net cash used by financing activities ( 322,711 ) ( 218,075 ) ( 214,274 )

Net cash provided by/(used in) financing activities 1,339,234 ( 322,711 ) ( 218,075 )

Effect of exchange rate changes on cash and cash equivalents ( 22,428 ) ( 263 ) 11,673

Net increase in cash and cash equivalents 96,260 225,806 151,176

Net (decrease) increase in cash and cash equivalents ( 178,592 ) 96,260 225,806

Cash and cash equivalents at beginning of period 681,865 585,605 359,799

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Shares Par Value Shares Amount

Balance as of September 1, 2018 39,264,849 $ 393 $ 667,531 1,072,263 $ ( 213,428 ) $ 122,843 $ ( 51,439 ) $ 525,900

Balance as of August 31, 2019 40,104,192 $ 401 $ 806,973 1,986,352 $ ( 433,799 ) $ 373,225 $ ( 74,544 ) $ 672,256

Net income 372,938 372,938

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Dividends declared ( 113,014 ) ( 113,014 )

Cumulative effect of adoption of accounting standards* 1,302 716 2,018

Balance as of August 31, 2020 40,767,708 $ 408 $ 939,067 2,737,456 $ ( 636,956 ) $ 633,149 $ ( 39,293 ) $ 896,375

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Balance as of August 31, 2022 41,653,218 $ 417 $ 1,190,350 3,608,462 $ ( 930,715 ) $ 1,179,739 $ ( 108,383 ) $ 1,331,408

* Includes the cumulative effect of adoption of accounting standards primarily due to both the adoption of the new revenue recognition standard (ASC 606) resulting in a cumulative increase to retained earnings related to certain fulfillment costs and the accounting standard update related to the U.S.

Tax Cuts and Jobs Act ("TCJA") providing for the reclassification from accumulated other comprehensive loss to retained earnings for stranded tax effects.

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

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Description of Business

Basis of Presentation

Summary of Significant Accounting Policies

Significant Accounting Policies

Revenue Recognition

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Derivative Instruments

Acquisitio ns

Property, Equipment and Leasehold Improvements

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Segment Information

Risks and Concentrations of Credit Risk

Subsequent Events

DESCRIPTION OF BUSINESS

FactSet Research Systems Inc.

and its wholly-owned subsidiaries (collectively, "we," "our," "us," the "Company" or "FactSet") is a global financial data and analytics company with open and flexible technology and a purpose to drive the investment community to see more, think bigger, and do their best work.

Our strategy is to become the leading open content and financial analytics platform in the industry that delivers differentiated advantage for our clients’ success.

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.

Over 160,000 asset managers and owners, bankers, wealth managers, corporate firms, including private equity and venture capital firms, and others, use our personalized solutions to identify opportunities, explore ideas, and gain a competitive advantage, in areas spanning investment research, portfolio construction and analysis, trade execution, performance measurement, risk management, and reporting across the investment lifecycle.

We provide financial data and market intelligence on securities, companies and industries to enable our clients to research investment ideas, as well as offering them the capabilities to analyze, monitor and manage their portfolios.

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

Our revenue is 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, FactSet puts our clients in a position to outperform.

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

and its wholly-owned subsidiaries (collectively, "we," "our," "us," the "Company" or "FactSet") is a global financial data and analytics company with an open and flexible digital platform that drives the investment community to see more, think bigger, and do its best work.

Our strategy is to build the leading open content and analytics platform to deliver a differentiated advantage for our clients’ success.

For more than 40 years, the FactSet platform has delivered expansive data, sophisticated analytics, and flexible technology used by global financial professionals to power their critical investment workflows.

As of August 31, 2022, we had more than 7,500 clients comprised of approximately 180,000 investment professionals, including asset managers, bankers, wealth managers, asset owners, channel partners, hedge funds, corporate users, private equity and venture capital professionals.

Our on- and off-platform solutions span the investment lifecycle to include investment research, portfolio construction and analysis, trade execution, performance measurement, risk management and reporting.

Our revenues are primarily derived from subscriptions to our multi-asset class data and solutions powered by our connected content ("content refinery").

Our products and services include workstations, portfolio analytics and enterprise solutions.

We provide financial data and market intelligence on securities, companies, industries and people to enable our clients to research investment ideas, as well as to analyze, monitor and manage their portfolios.

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

Our CGS business supports security master files relied on by the investment industry for critical front, middle and back office functions.

We drive our business based on our detailed understanding of our clients’ workflows, which helps us to solve their most complex challenges.

We provide them with an open digital platform, connected and reliable data, next-generation workflow solutions and highly committed service specialists.

We operate our business through three reportable segments ("segments"):

the Americas, EMEA and Asia Pacific.

Refer to Note 19, Segment Information, in the Notes to the Consolidated Financial Statements included in Part II, Item 8.

of this Annual Report on Form 10-K for further discussion.

Within each of our segments, we primarily deliver insight and

information through our three workflow solutions:

Refer to Note 18, Segment Information , for further discussion.

For each of our segments, we execute our strategy through three workflow solutions:

Research & Advisory;

Analytics & Trading;

and Content & Technology ("CTS").

and Content & Technology Solutions ("CTS").

SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

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all intercompany activity and balances have been eliminated.

The Company has evaluated subsequent events through the date that the financial statements were issued.

Reclassification

We reclassified a fiscal 2020 comparative figure related to the impairment of an investment in a company from Selling, general and administrative to Asset impairments in the Consolidated Statement of Income to conform to the current year's presentation.

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 amounts of revenue 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 assets and reserves for litigation and other contingencies.

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 amounts of revenues and expenses during the reporting period.

Significant estimates may have been made in areas that include income taxes, stock-based compensation, goodwill and intangible assets, business combinations, long-live assets and contingencies.

We base our estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities.

Actual results could differ from those estimates.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Our significant accounting policies are summarized below.

Revenue Recognition

The majority of our revenue is derived from 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, analytics, enterprise data, research management, and trade execution.

We determined that the 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 transfer to the client.

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 revenue for our contracts using the over-time revenue recognition model as a client is invoiced or performance is satisfied.

A provision for billing adjustments and current expected credit losses is estimated and accounted for as a reduction to revenue, with a corresponding reduction to accounts receivable.

Cost of Services

Cost of services is comprised of compensation for our employees within the content collection, consulting, product development, software and systems engineering groups in addition to data costs, computer maintenance and depreciation expenses, amortization of identifiable intangible assets, and client-related communication costs.

Selling, General and Administrative

Selling, general and administrative expenses include compensation for the sales and various other support and administrative departments in addition to travel and entertainment expenses, rent, professional fees, depreciation of furniture and fixtures, amortization of lease right-of-use ("ROU") assets and leasehold improvements, as well as marketing costs, office expenses,, travel and entertainment expenses, and other miscellaneous expenses.

The majority of our revenues are derived from client access to our multi-asset solutions powered by our suite of connected content available over the contractual term (referred to as the "hosted platform").

The hosted platform is a subscription-based service that provides client access to various combinations of products and services including workstations, portfolio analytics, and enterprise solutions.

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.

The primary nature of the promise to the client is to provide daily access to each of these data and analytics platforms, with revenue recognized over-time as performance is satisfied on an output time-based measure of progress, as the client is simultaneously receiving and consuming the benefits of the platform.

We record deferred revenues when cash payments are received or we have a contractual right to bill in advance.

Stock-Based Compensation

Accounting guidance requires the measurement and recognition of compensation expense for all share-based payment awards made to employees and directors including stock options, restricted stock units, performance share units, and common shares acquired under employee stock purchases based on estimated fair values of the share awards that are scheduled to vest during the period.

We use the straight-line attribution method for all awards with graded vesting features and service conditions only.

Under this method, the amount of compensation expense that is recognized on any date is at least equal to the vested portion of the award on that date.

For all stock-based awards with performance conditions, the graded vesting attribution method is used by us to determine the monthly stock-based compensation expense over the applicable vesting periods.

As stock-based compensation expense recognized is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures.

Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

Forfeitures are estimated based primarily on historical experience.

Windfall tax benefits, defined as tax deductions that exceed recorded stock-based compensation, are classified as cash inflows from operations.

Performance-based equity awards require management to make assumptions regarding the likelihood of achieving company performance targets on a quarterly basis.

The number of performance share units that vest will be predicated on us achieving certain performance levels.

A change in the financial performance levels we achieve could result in changes to our current estimate of the vesting percentage and related stock-based compensation.

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

Both models involve several assumptions, including the expected term of the awards, volatility of our common stock, risk-free interest rates and our dividend yield.

We rely on the Black-Scholes model for our non-employee options, non-employee restricted stock units and common stock acquired under our employee stock purchase plan and the binomial model for our employee stock options, employee restricted stock units and employee performance share units.

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

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

For stock-based awards with service conditions, we use the straight-line method to recognize compensation expense over the requisite service period.

For stock-based awards that also include performance conditions, the graded vesting method is used to

determine compensation expense over the requisite service period if achievement of the performance condition is determined to be probable, which is reviewed on a quarterly basis.

Compensation expense for all stock-based awards is recorded net of estimated forfeitures which are based on historical forfeiture rates and revised if actual forfeitures differ from those estimates.

For our employee stock purchase plan, compensation expense is recognized on a straight-line basis over the offering period.

Research and Product Development Costs

Research and product development ("R&D") costs are expensed as incurred, unless they qualify as internal-use software development costs and are then capitalized and amortized over the estimated useful life.

These costs primarily consist of personnel-related expenses, such as salaries and related benefits for our product development, software engineering and technical support departments and, if not capitalized, are included in employee compensation (found within of Cost of services expense and SG&A in the Consolidated Statements of Income).

We also utilize certain third parties to develop internal-use software.

These costs are capitalized and amortized over the estimated useful life.

If not capitalized, these costs are included in SG&A in the Consolidated Statements of Income.

We do not have a separate research and product development department, but rather rely on these departments to work closely with our strategists, product managers, sales and other client-facing specialists to develop new products and process innovations and enhance existing products.

We incurred research and product development costs of $ 250.1 million and $ 224.0 million during fiscal years 2021 and 2020, respectively.

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

Deferred income taxes are recorded for the temporary differences between the financial statement and tax bases of assets and liabilities using current enacted tax rates.

We recognize the financial effect of an income tax position only if it is more likely than not (greater than 50%) that the tax position will prevail upon tax examination, based solely on the technical merits of the tax position as of the reporting date.

Otherwise, no benefit or expense can be recognized in the Consolidated Financial Statements.

The tax benefits recognized are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement.

Additionally, we accrue interest on all tax exposures for which reserves have been established consistent with jurisdictional tax laws.

Interest is classified as income tax expense in the financial statements.

As of August 31, 2021, we had gross unrecognized tax benefits totaling $ 14.9 million, including $ 1.3 million of accrued interest, recorded as Taxes payable (non-current) on the Consolidated Balance Sheets.

Earnings per Share

Basic earnings per share ("EPS") is computed by dividing net income by the number of weighted average common shares outstanding during the period.

Diluted EPS is computed, using the treasury stock method, by dividing net income by the number of weighted average common shares outstanding and issuable upon the exercise of outstanding share-based compensation awards (including stock options and awards of restricted stock units) during the period.

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.

Comprehensive Income

We disclose comprehensive income in accordance with applicable standards for the reporting and display of comprehensive income in a set of financial statements.

Comprehensive income is defined as the change in net assets of a business enterprise during a period from transactions generated from non-owner sources.

It includes all changes in equity during a period except those resulting from investments by owners and distributions to owners.

We do not have a separate research and product development ("R&D") department, but rather these costs primarily consist of non-compensatory employee expenses, such as salaries and related benefits for our product development, software engineering and technical support departments and certain third parties, collaborating with our strategists, product and content managers, technologists, sales and other team members to develop new products and process innovations and enhance existing products.

Our R&D costs are expensed as incurred and are primarily recorded in employee compensation costs (included in our Cost of services and SG&A expenses in the Consolidated Statements of Income).

We incurred research and product development costs of $ 255.1 million, $ 250.1 million and $ 224.0 million during fiscal years 2022, 2021 and 2020, respectively.

We account for income taxes using the asset and liability method, under which deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities and for operating losses and tax credit carryforwards.

Deferred tax assets and liabilities are measured using the currently enacted tax rates that apply to taxable income in effect for the years in which they are expected to be realized or settled.

Deferred tax assets are evaluated for future realization and reduced by a valuation allowance to the amount that is more likely than not to be realized.

We recognize tax benefits from uncertain tax positions only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position.

The tax benefits recognized in the consolidated financial statements from such posit ions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement.

We classify the liability for unrecognized tax benefits as Taxes Payable (non-current) and to the extent that we anticipate payment of cash within one year, the benefit will be classified as Taxes Payable (current) in the Consolidated Balance Sheets.

We accrue interest on all tax exposures for which reserves have been established consistent with jurisdictional tax laws, and classify this interest as income tax expense in the Consolidated Statements of Income.

Cash and Cash Equivalents

Cash and cash equivalents consist of cash and highly liquid investments with original maturities of three months or less.

Our cash equivalents consist of money market funds that are available for withdrawal without restriction and are carried at cost, which approximates fair value.

Accounts Receivable and Deferred Fees

Amounts that have been earned but not yet paid are reflected on the Consolidated Balance Sheets as Accounts receivable, net of reserves.

Amounts invoiced in advance of client payments that are in excess of earned subscription revenue are reflected on the Consolidated Balance Sheets as Deferred fees.

As of August 31, 2021, the amount of accounts receivable that was unbilled totaled $ 18.3 million, which will be billed in fiscal 2022.

As of August 31, 2020, the amount of accounts receivable that was unbilled totaled $ 17.1 million, which were billed in fiscal 2021.

Accounts receivable are recorded net of an allowance for credit losses based on a variety of factors, including our historical write-off activity, current economic environment, customer-specific information and expectations of future economic conditions.

We write-off account balances against our reserve when we have exhausted our collection efforts.

In accordance with this policy, our receivable reserves were $ 6.4 million and $ 8.0 million as of August 31, 2021 and 2020, respectively, recorded as a reduction to Accounts receivable, within the Consolidated Balance Sheets.

Cash and cash equivalents consist of cash and highly liquid investments including demand deposits and money market funds available for withdrawal without restriction or with original maturities of 90 days or less.

The carrying value of our cash and cash equivalents approximates fair value.

Accounts Receivable

Accounts receivable are recorded at the invoiced amount, net of an allowance for any pote ntial uncollectible amounts.

Our accounts receivable includes unbilled receivables that are short-term in nature and expected to be billed and earned within one year.

We evaluate our allowance to include expected credit losses and collectability trends based on a variety of factors, including our historical write-off activity, current economic environment, customer-specific information and expectations of future economic conditions.

Our allowance is recorded to SG&A in the Consolidated Statements of Income and w e assess the adequacy of the allowance on a quarterly basis.

Recoveries of accounts previously reserved are recognized as a reversal to SG&A when payment is received.

We write-off account balances when we have exhausted our collection ef forts.

Property, Equipment and Leasehold Improvements

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Repairs and maintenance expenditures, which are not considered leasehold improvements and do not extend the useful life of the property and equipment, are expensed as incurred.

We perform a test for impairment whenever events or changes in circumstances indicate that the carrying amount of an individual asset or asset group may not be recoverable.

We perform a qualitative review of the carrying amount of our property, equipment and leasehold improvements on a quarterly basis.

Should projected undiscounted future cash flows be less than the carrying amount of the asset or asset group, an impairment charge reducing the carrying amount to fair value is required.

Fair value is determined based on the most appropriate valuation technique, including discounted cash flows.

If we recognize an impairment loss, the adjusted carrying amount of the asset becomes its new cost basis.

The new cost basis will be depreciated (amortized) over the remaining useful life of that asset.

Goodwill at the reporting unit level is reviewed for impairment annually, and more frequently if impairment indicators exist.

Goodwill at the reporting unit level is tested for impairment annually, and more frequently if impairment indicators exist.

Goodwill is deemed to be impaired and written-down in the period in which the carrying value of the reporting unit exceeds its fair value.

We have three reporting units, Americas, EMEA and Asia Pacific, which are consistent with the operating segments reported, as discrete financial information is not available for subsidiaries within the operating segments.

We may elect to perform a qualitative analysis for the reporting units to determine whether it is more likely than not the fair value of the reporting unit is greater than its carrying value.

We have three reporting units, Americas, EMEA and Asia Pacific, which are consistent with our operating segments.

We may first elect to perform a qualitative analysis for the reporting units to determine whether it is more likely (a likelihood of more than 50 percent) than not the fair value of the reporting unit is less than its carrying value.

In performing a qualitative assessment, we consider such factors as macro-economic conditions, industry and market conditions in which we operate, including the competitive environment and significant changes in demand for our services.

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If the qualitative analysis indicates that it is more likely than not the fair value of a reporting unit is less than its carrying amount or if we elect not to perform a qualitative analysis, a quantitative analysis is performed to determine whether a goodwill impairment exists.

The quantitative goodwill impairment analysis is used to identify potential impairment by comparing the fair value of a reporting unit with its carrying amount using an income approach, along with other relevant market information, derived from a discounted cash flow model to estimate the fair value of our reporting units.

The quantitative goodwill impairment analysis is used to identify potential impairment by comparing the carrying amount of a reporting unit with its fair value, by applying the income approach, utilizing the discounted cash flow method, along with other relevant market information.

The annual review of carrying value of goodwill requires us to develop estimates of future business performance.

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Acquired Intangible Assets

Our identifiable intangible assets consist of acquired content databases, client relationships, software technology, non-compete agreements and trade names resulting from previous acquisitions, which have been fully integrated into our operations.

We amortize intangible assets over their estimated useful lives, which are evaluated quarterly to determine whether events and circumstances warrant a revision to the remaining period of amortization.

If the estimate of the remaining useful life is changed, the remaining carrying amount of the intangible asset is amortized prospectively over that revised remaining useful life.

Amortizable Intangible assets are tested for impairment, if indicators of impairment are present, based on undiscounted cash flows, and, if impaired, written down to fair value based on discounted cash flows.

No impairment of intangible assets has been identified during any of the fiscal years presented.

Our identifiable intangible assets are classified as an ABA business process, client relationships, software technology, developed technology, acquired databases, data content and trade names resulting from previous acquisitions.

We amortize intangible assets over their estimated useful lives, which are evaluated annually to determine whether events and circumstances warrant a revision to the remaining period of amortization.

If the estimate of the remaining useful life is changed, the remaining carrying amount of the intangible asset is amortized prospectively over that revised remaining useful li fe.

Amortizable intangible assets are tested for impairment qualitatively on a quarterly basis, based on undiscounted cash flows, and, if impaired, written down to fair value based on discounted cash flows.

The intangible assets have no assigned residual values.

Internally Developed Software

We capitalize internal and external costs related to developing, modifying or obtaining software for internal use, incurred during the application development stage in accordance with ASC 350-40, Internal-Use Software.

Our developed technology intangible also includes capitalized internal and external costs incurred during the application development stage related to developing, modifying or obtaining software for internal-use.

Costs related to software upgrades and enhancements are capitalized if it is determined that these upgrades or enhancements provide additional functionality to the software.

The capitalized software is amortized using the straight-line method over the estimated useful life of the software, generally three to five years .

These assets are subject to the impairment test guidance specified in the acquired intangible assets above.

We adopted the standard, ASC 842-10, Leases ("ASC 842") as of September 1, 2019, using a modified retrospective approach.

Refer to Note 12, Leases , for further details.

We review new arrangements at inception to evaluate whether we obtain substantially all the economic benefits of and have the right to control the use of an asset.

If we determine that an arrangement qualifies as a lease, with a lease term of greater than one year, we assess whether the leased asset is an operating or financing lease.

Our lease portfolio is primarily related to our office space, under various operating lease agreements.

We record a lease ROU asset and lease liability as the present value of the future minimum lease payments (including fixed lease payments and certain qualifying index-based variable payments) over the reasonably certain lease term, beginning at the lease commencement date.

As there is no rate implicit in our operating lease arrangements, these balances are initially recorded using our incremental borrowing rate ("IBR") within the geography where the leased asset is located.

As we do not have any outstanding public debt, we estimate the IBR based on our estimated credit rating and available market information.

The IBR is determined at lease commencement and subsequently reassessed upon a modification to the lease arrangement.

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

We elected to not record operating lease right-of-use assets or operating lease liabilities for leases with an initial term of 12 months or less.

We elected the practical expedient not to separate lease components from non-lease components but, rather, to combine them into one single lease component, which we recognize over the expected term on a straight-line expense basis in occupancy costs (a component of SG&A expense).

As of August 31, 2021, our leases have remaining terms of less than one year to just over 14 years.

The lease ROU assets and lease liabilities recognized did not include any renewal or termination options that were not yet reasonably certain to be exercised.

Accrued Liabilities

Accrued liabilities include estimates relating to employee compensation, operating expenses and tax liabilities.

At the end of each fiscal year, we conduct a review of both the performance of the Company and individual performance within each department to determine the amount of discretionary employee compensation.

We also review compensation throughout the year to determine how overall performance tracks against management’s expectations.

Management takes these and other factors, including historical performance, into account in reviewing accrued compensation estimates quarterly and adjusting accrual rates as appropriate.

The majority of variable employee compensation recorded within accrued compensation related to the annual performance bonus, which was $ 75.1 million and $ 54.4 million as of August 31, 2021 and 2020, respectively.

These assets are subject to the impairment test guidance specified in the acquired intangible assets disclosure above.

Our lease portfolio consists of operating leases primarily related to our office space.

We determine if an arrangement qualifies as a lease at inception by evaluating if there is an identified asset and whether we obtain substantially all the economic benefits of and have the right to control th e use of an asset.

For operating leases with a term greater than one year, we recognize operating lease assets and lease liabilities as the present value of future minimum lease payments (including fixed lease payments and certain qualifying index-based variable payments) over the reasonably certain lease term beginning at the

commencement date.

Certain adjustments to our lease right-of-use ("ROU") assets may be required due to prepayments, lease incentives received and initial direct costs incurred.

Operating leases are included in operating Lease right-of-use assets, net , Current lease liabilities and Long-term lease liabilities on our Consolidated Balance Sheets.

Our leases generally do not have a readily determinable implicit rate, therefore we use our incremental borrowing rate ("IBR") at the lease commencement date in determining the present value of future payments and subsequently reassessed upon a modification to the lease arrangement.

Our IBR is derived by selecting U.S.

corporate yield curves observed for public companies that are reflective of our credit rating adjusted to approximate a secured rate of borrowing.

We also consider revisions to the rate to reflect the geographic location where the leased asset is located.

Certain of our lease agreements include options to extend and options to terminate the lease, which we do not include in our minimum lease terms unless management is reasonably certain to exercise.

We account for the lease and non-lease components as a single lease component, which we recognize over the expected term on a straight-line expense basis in occupancy costs (a component of SG&A expense).

Variable lease payments are not included in the calculation of the lease ROU asset and lease li ability and are recognized as occupancy costs and expensed as incurred.

We review our lease assets for impairment when there is an indication that the asset may no longer be recoverable.

The impairment assessment re quires significant judgments and estimates, including estimated subtenant rental income, discount rates and future cash flows based on our experience and knowledge of the market in which the property is located, previous efforts to dispose of similar assets and the assessment of existing market conditions.

Impairments are recognized as a reduction to the carrying value of the Lease right-of-use assets, net with a corresponding increase to Asset impairments on our Consolidated Balance Sheets and Consolidated Statements of Income, respectively.

Accrued Compensation

Compensation costs primarily include costs related to salaries, incentive compensation and sales commissions, equity compensation costs, benefits, employment taxes, and any applicable restructuring costs.

A significant portion of these costs are discretionary.

We review our accrued compensation estimates on a quarterly basis to adjust our accruals, taking into account, among other thing, our financial results, how our overall performance tracks against management’s expectations, the individual employee's performance and historical performance.

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.

Our primary currency exposures include the British Pound Sterling, Euro, Indian Rupee, and Philippine Peso.

As such, we are exposed to movements in foreign currency exchange rates relative to the U.S.

We utilize derivative instruments (foreign currency forward contracts) to manage the exposures related to the effects of foreign exchange rate fluctuations and reduce the volatility of earnings and cash flows associated with changes in foreign currency.

We do not enter into foreign exchange forward contracts for trading or speculative purposes.

We utilize derivative instruments (foreign currency forward contracts) to manage the exposures related to the effects of foreign exchange rate fluctuations in our operating expenses and reduce the volatility of earnings and cash flows associated with changes in foreign currency.

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

These transactions are designated and accounted for as cash flow hedges in accordance with applicable accounting guidance.

The gains and losses on foreign currency forward contracts mitigate the variability in operating expenses associated with currency movements.

Interest Rate Swap Agreement

On March 29, 2019, we entered into a credit agreement with PNC Bank, National Association ("PNC") (the "2019 Credit Agreement"), which provides for a $ 750.0 million revolving credit facility (the "2019 Revolving Credit Facility").

The outstanding principal balance of $ 575.0 million bears interest at a rate equal to LIBOR plus a spread, using a debt leverage pricing grid.

The variable rate of interest on our long-term debt can expose us to interest rate volatility due to changes in LIBOR.

To mitigate this exposure, on March 5, 2020, we entered into an interest rate swap agreement with a notional amount of $ 287.5 million to hedge the variable interest rate obligation, effectively converting the floating interest rate to fixed for the hedged portion.

Thus, we are only exposed to base interest rate risk on floating rate borrowings in excess of any amounts that are not hedged, or $ 287.5 million of the outstanding principal balance.

We use interest rate swap agreements to hedge the variability of our cash flows resulting from floating interest rates on our debt.

We pay interest at a fixed interest rate at specified intervals in exchange for receiving interest based on a floating interest rate that we are hedging per the contractual terms of our debt agreement, throughout the life of the interest rate swap agreement.

Derivative Instrument Classification

The changes in fair value for these cash flow hedges are initially reported as a component of accumulated other comprehensive loss ("AOCL") and subsequently reclassified into operating expenses when the hedged exposure affects earnings.

All derivatives are assessed for effectiveness at each reporting period.

For derivative instruments that we designate at inception and that qualify as a cash flow hedge in accordance with applicable accounting guidance, the changes in fair value for these cash flow hedges are initially reported as a component of accumulated other comprehensive loss ("AOCL") and subsequently reclassified to the Consolidated Statements of Income within SG&A for the foreign currency forward contract and interest expense for the interest rate swap agreements, when the hedged exposure affects earnings.

All derivatives are assessed for effectiveness at each reporting period and we do not have any derivatives not designated as hedging instruments.

We do not enter into cash flow hedges for trading or speculative purposes.

Treasury Stock

We account for repurchased common stock under the cost method and includes such treasury stock as a component of our Stockholders’ equity.

We account for the formal retirement of treasury stock by deducting its par value from common stock, reducing additional paid-in capital ("APIC") by the average amount recorded in APIC when the stock was originally issued and any remaining excess of cost deducted from retained earnings.

We account for repurchased common stock at the market price on the trade date under the cost method, with the treasury shares included as a reduction of our Stockholders’ equity.

Repurchased shares of our common stock are held as treasury shares until

they are reissued or retired.

When treasury shares are reissued, if the issuance price is higher than the average price paid to acquire the shares ("the cost"), the excess of the issuance price over the cost is credited to additional paid-in capital ("APIC").

If the issuance is lower than the cost, the difference is first charged against any credit balance in APIC from treasury stock, with the remaining balance charged to Retained earnings.

We account for the formal retirement of treasury shares by deducting its par value from common stock, reflecting any excess of over par value as a reduction to APIC (to the extent created by previous issuances of the shares) and then Retained earnings.

Fair Value Measurements

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A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

Our cash equivalents are classified as Level 1 while our derivative instruments (foreign exchange forward contracts and interest rate swap) and certificates of deposit are classified as Level 2.

There were no Level 3 assets or liabilities held by us as of August 31, 2021 or 2020.

Refer to Note 5, Fair Value Measures for the definition of the fair value hierarchy.

Foreign Currency Translation

Foreign Currency Translation and Remeasurement

Certain wholly-owned subsidiaries operate under a functional currency different from the U.S.

dollar, such as the British Pound Sterling, Euro, Indian Rupee, and Philippine Peso.

The financial statements of these foreign subsidiaries are translated into U.S.

dollar, including our primary currency exposures of the British Pound Sterling, Euro, Indian Rupee, and Philippine Peso.

The financial statements of our foreign subsidiaries that are local currency functional are translated into U.S.

dollars using period-end rates of exchange for assets and liabilities, and average rates for the period for revenues and expenses.

Translation gains and losses that arise from translating assets, liabilities, revenue and expenses of foreign operations are recorded in AOCL as a component of stockholders’ equity.

The accumulated foreign currency translation loss totaled $ 36.9 million and $ 37.7 million at August 31, 2021 and 2020, respectively.

Concentrations of Risk

Refer to Note 20, Risks and Concentrations of Credit Risk for areas that potentially subject us to a significant concentration of risk and credit risk.

New Accounting Standards or Updates Recently Adopted

The resulting translation gains and losses that arise from translating these assets, liabilities, revenue and expenses of our foreign operations are recorded in AOCL as a component of stockholders’ equity.

For the financial statements of our foreign subsidiaries that are U.S.

dollar functional, but maintain their books of record in their respective local currency, we remeasure our revenues and expenses into U.S.

dollars at the average rates of exchange for the period, monetary assets and liabilities using period-end rates and non-monetary assets and liabilities at their historical rates.

The resulting remeasurement gains and losses that arise from remeasuring these assets and liabilities of our foreign operations are recorded to SG&A in the Consolidated Statements of Income.

Concentrations of Credit Risks

Cash equivalents

Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash and cash equivalents.

We are exposed to credit risk for cash and cash equivalents held in financial institutions in the event of a default, to the extent that such amounts are in excess of applicable insurance limits.

We have not experienced any losses from maintaining cash accounts in excess of such limits.

We do not believe our concentration of cash and cash equivalents present a significant credit risk as the counterparties to the instruments consist of multiple high-quality, credit-worthy financial institutions.

Accounts Receivable

Our accounts receivable are subject to collection risk as they are unsecured and derived from revenue earned from clients located around the globe.

We do not require collateral from our clients.

We maintain reserves for potential write-offs and evaluate the adequacy of the reserves periodically.

These losses have historically been within expectations.

No single client represented more than 3% of our total subscription revenue in any period presented.

As of August 31, 2022 and 2021, the receivable reserve was $ 2.8 million and $ 6.4 million, respectively.

Derivative Instruments

Our use of derivative instruments exposes us to credit risk to the extent counterparties may be unable to meet the terms of their agreements.

To mitigate credit risk, we limit counterparties to credit-worthy financial institutions and distribute contracts among these institutions to reduce the concentration of credit risk.

We do not expect any losses as a result of default by our counterparties.

Concentrations of Data Content Providers

We integrate data from various third-party sources into our hosted propriety data and analytics platform, which our clients access to perform their analyses.

As certain data sources have a limited number of suppliers, we make every effort to assure that, where reasonable, alternative sources are available.

We are not dependent on any individual third-party data supplier in order to meet the needs of our clients, with only two data suppliers each representing more than 10 % of our total data costs for the year ended August 31, 2022.

Recently Adopted Accounting Pronouncements

As of the beginning of fiscal 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 last three fiscal years that had a material impact on our Consolidated Financial Statements other than the adoption of ASC 842.

Goodwill Impairment Test

In January 2017, the FASB issued ASU 2017-04, Intangibles—Goodwill and Other (Topic 350);

Simplifying the Test for Goodwill Impairment , which removes the requirement for companies to compare the implied fair value of goodwill with its carrying amount as part of step 2 of the goodwill impairment test.

A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill.

We have adopted this standard effective September 1, 2020.

The adoption of this accounting standard update had no impact on our Consolidated Financial Statements.

Credit Losses on Financial Instruments

In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326);

Measurement of Credit Losses on Financial Instruments , which significantly changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income.

The standard replaces the "incurred loss" approach with an "expected loss" model for instruments measured at amortized cost.

Subsequent to the adoption, the allowance for doubtful accounts is made when the financial asset is first recorded to the balance sheet (and periodically thereafter) and is based on information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount.

Income Tax Simplification

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 certain aspects of the current guidance to promote consistent application.

We have adopted this standard effective September 1, 2021.

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

In February 2016, the FASB issued an accounting standard update related to accounting for leases, ASC 842.

The update requires the recognition of lease ROU assets and lease liabilities on the balance sheet and the disclosure of qualitative and quantitative information about leasing arrangements.

The guidance also eliminates the requirement for an entity to use bright-line tests in determining lease classification.

We adopted the new accounting standard effective September 1, 2019, using a modified retrospective approach to record the required cumulative effect adjustments to the opening balance sheet in the period of adoption.

As such, our historical Consolidated Financial Statements were not restated and follow our previous policy under ASC 840, Leases.

Refer to our Annual Report on Form 10-K for the fiscal year ended August 31, 2019 for further details of the Company’s policy prior to adoption of ASC 842.

We have elected the package of practical expedients permitted under the transition guidance, which permits us to not reassess the prior conclusions about lease identification, lease classification, and initial direct costs.

We did not elect the use-of-hindsight practical expedient in determining the lease term and in assessing impairment.

We elected the practical expedient not to separate lease components from non-lease components but, rather, to combine them into one single lease component.

We have also elected to apply the short-term lease exception not to recognize lease ROU assets and lease liabilities for leases with a term of 12 months or less.

We will recognize lease payments on a straight-line basis over the lease term.

As of November 30, 2019, the Company recognized Lease ROU assets, net of amortization of $ 217.0 million and corresponding Current and Long-term lease liabilities of $ 266.4 million, related primarily to the Company’s real estate leases.

There was no material impact to the Company’s Consolidated Statements of Income, Consolidated Statements of Comprehensive Income, Consolidated Statements of Cash Flows and Consolidated Statement of Changes in Stockholders' Equity.

Refer to Note 12, Leases for more information regarding the Company's lease accounting.

Hedge Accounting Simplification

During the first quarter of fiscal 2020, we adopted the accounting standard updated issued by the FASB in August 2017, which focused on reducing the complexity of and simplifying the application of hedge accounting.

The guidance refines and expands hedge accounting for both financial and non-financial risk components, eliminates the need to separately measure and report

hedge ineffectiveness, and aligns the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements.

The adoption of this standard had no impact on our Consolidated Financial Statements.

Recent Accounting Standards or Updates Not Yet Effective

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

Business Combinations

In October 2021, the FASB issued ASU No.

2021-08, Business Combinations (Topic 805):

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (ASU 2021-08), which requires an acquirer to recognize and measure contract assets and liabilities acquired in a business combination in accordance with Revenue from Contracts with Customers (Topic 606) rather than adjust them to fair value at the acquisition date.

We elected to early adopt this accounting standard in the second quarter of fiscal 2022, with retrospective application to business combinations that occurred in the current fiscal year.

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

The acquisitions of CGS and Cobalt Software, Inc.

were accounted for in accordance with ASU 2021-08.

Refer to Note 6 , Acquisitions for further information.

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

Accounting Pronouncements Not Yet Adopted

Facilitation of the Effects of Reference Rate Reform on Financial Reporting

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848);

Facilitation of the Effects of Reference Rate Reform on Financial Reportin g, to provide optional expedients and exceptions for applying GAAP to contract modifications, hedging relationships, and other transactions affected by the anticipated transition from LIBOR.

As a result of the reference rate reform initiative, certain widely used reference rates such as LIBOR are expected to be discontinued.

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The guidance is effective upon issuance and may be applied through December 31, 2022.

We are currently evaluating the impact of this accounting standard, but it is not expected to have a material impact on our Consolidated Financial Statements.

Income Tax Simplification

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740);

The guidance will be effective for us in the first quarter of fiscal 2022, with early adoption permitted.

Most amendments are required to be applied on a prospective basis, while certain amendments must be applied on a retrospective or modified retrospective basis.

We have evaluated the impact of adopting this accounting standard and have determined that adoption will not have a material impact on our Consolidated Financial Statements.

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, 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.

Inflation Reduction Act of 2022

On August 16, 2022, the Inflation Reduction Act (“IRA”) was signed into law.

The IRA contains several revisions to the Internal Revenue Code effective in taxable years beginning after December 31, 2022, including a 15% corporate minimum income tax of certain large corporations and a 1% excise tax on corporate stock repurchases by publicly traded U.S.

corporations.

We are in the process of evaluating the impact of the IRA;

however, we do not expect this law to have a material impact on our Consolidated Financial Statements.

No other new accounting pronouncements issued or effective as of August 31, 2022 have had or are expected to have a material impact on our Consolidated Financial Statements.

REVENUE RECOGNITION

We derive most of our revenue 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, enterprise data and research management.

We also determined the 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 derive most of our revenues by providing client access to our multi-asset solutions powered by our suite of connected content available over the contractual term (referred to as the "hosted platform").

The hosted platform is a subscription-based service that provides client access to various combinations of products and services including workstations, portfolio analytics, and enterprise solutions.

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 revenue 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, recorded in the Prepaid expenses and other current assets account for the current portion and Other assets for the non-current portion, based on the term of the license period, and amortized consistent with the associated revenue for providing the services.

Fulfillment costs are recognized as an asset, with the current portion recorded in the Prepaid expenses and other current assets and the non-current portion recorded in Other assets, based on the term of the license period.

The fulfillment costs are amortized consistent with the associated revenues for providing the services.

There are no significant judgments that would impact the timing of revenue recognition.

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

Disaggregated Revenue

We disaggregate revenue from contracts with clients by our reportable segments ("segments"), which consist of the Americas, EMEA and Asia Pacific.

We believe these segments are reflective of how we manage our business and the markets in which we serve and best depict the nature, amount, timing and uncertainty of revenue and cash flows related to contracts with clients.

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 segments which consist of the Americas, EMEA and Asia Pacific.

We believe these segments are reflective of how we manage our business and the markets in which we serve and best depict the nature, amount, timing and uncertainty of revenues and cash flows related to contracts with clients.

Segment revenues reflect sales to our clients based on their respective geog raphic locations.

Refer to Note 18, Segment Information , for further information.

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In determining fair value, the use of various valuation methodologies, including market, income and cost approaches is permissible.

We consider the principal or most advantageous market in which we would transact and considers assumptions that market participants would use when pricing the asset or liability.

We consider the principal or most advantageous market in which we would transact and consider assumptions that market participants would use when pricing the asset or liability.

Fair Value Hierarchy

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A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

Our assessment of the significance of a particular input to the fair value measurement requires judgment and may affect its placement within the fair value hierarchy levels.

Our assessment

of the significance of a particular input to the fair value measurement requires judgment and may affect its placement within the fair value hierarchy levels.

We have categorized our cash equivalents, investments and derivatives within the fair value hierarchy as follows:

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or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

Our certificates of deposit, mutual funds and derivative instruments are classified as Level 2.

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 August 31, 2021 or 2020.

(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 August 31, 2021 and 2020.

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

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 August 31, 2022 and 2021.

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

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

(in thousands) Fair Value Measurements at August 31, 2022

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— 35,984 35,984

Certificates of deposit (3)

— 2,315 2,315

Derivative instruments (3)

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Our mutual funds are classified as Level 2 and are included in Investments (short-term) within the Consolidated Balance Sheets.

(3) Our certificates of deposit held for investment are classified as Level 2 assets.

These certificates of deposit have original maturities greater than three months but less than one year and are included in Investments (short-term) within the Consolidated Balance Sheets.

(3) Our derivative instruments include our foreign exchange forward contracts and interest rate swap agreements.

We utilize the income approach to measure fair value for our foreign exchange forward contracts.

The income approach uses pricing models that rely on 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 5 , Derivative Instruments for more information on our derivative instruments designed as cash flow hedges and their classification within the Consolidated Balance Sheets.

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

Assets and liabilities that are measured at fair value on a nonrecurring basis relate primarily to our tangible fixed assets, operating lease right-of-use ("ROU") assets, goodwill and intangible assets.

The fair values of these non-financial assets and

liabilities are determined based on valuation techniques using the best information available, and may include quoted market prices, market comparable information, and discounted cash flow projections.

We review goodwill and intangible assets for impairment annually, during the fourth quarter of each fiscal year, or as circumstances indicate the possibility for impairment.

We monitor the carrying value of long-lived assets for impairment whenever events or changes in circumstances indicate the carrying amount may not be recoverable.

During fiscal 2021 and 2020, no fair value adjustments or material fair value measurements were required for our non-financial assets or liabilities.

Assets and liabilities that are measured at fair value on a non-recurring basis relate primarily to our tangible fixed assets, lease ROU assets, goodwill and intangible assets.

The fair values of these non-financial assets and liabilities are determined based on valuation techniques using the best information available, and may include quoted market prices, market comparable information, and discounted cash flow projections.

These non-financial assets are required to be assessed for impairment whenever events or circumstances indicate their carrying value may not be fully recoverable, and at least annually for goodwill.

During the twelve months ended August 31, 2022, we incurred an impairment charge of $ 62.2 million 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 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 August 31, 2021 and 2020, the fair value of our 2019 Revolving Credit Facility (as defined below in Note 13, 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.

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 debt issuance costs and net carrying value of our debt as of August 31, 2022 and 2021.

August 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 $ 470,525 $ — $ —

2032 Notes Level 1 500,000 438,205 — —

2022 Term Facility Level 3 750,000 750,975 — —

2022 Revolving Facility Level 3 250,000 249,075 — —

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

Total principal amount $ 2,000,000 $ 1,908,780 $ 575,000 $ 575,000

Total unamortized discounts and debt issuance costs ( 17,576 ) ( 465 )

Total net carrying value of debt $ 1,982,424 $ 574,535

DERIVATIVE INSTRUMENTS

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

As such, we are exposed to movements in foreign currency exchange rates compared with the U.S.

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

We do not enter into foreign currency forward contracts for trading or speculative purposes and limit counterparties to credit-worthy financial institutions.

Refer to Note 20, Risks and Concentrations of Credit Risk , for further discussion on counterparty credit risk.

Factors considered in the decision to hedge an underlying market exposure include the materiality of the risk, the volatility of the market, the duration of the hedge, the degree to which the underlying exposure is committed to, and the availability, effectiveness, and cost of derivative instruments.

Derivative instruments are only utilized for risk management purposes and are not used for speculative or trading purposes.

We limit counterparties to credit-worthy financial institutions.

Refer to Note 2, Significant Accounting Policies – 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 fiscal 2021 or fiscal 2020, 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 August 31, 2021 , we maintained foreign currency forward contracts to hedge a portion of our British Pound Sterling, Euro, Indian Rupee, and Philippine Peso exposures.

There was no discontinuance of foreign currency cash flow hedges during fiscal 2022 or fiscal 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 August 31, 2022, we maintained foreign currency forward contracts to hedge a portion of our exposures related to the British Pound Sterling, Euro, Indian Rupee, and Philippine Peso.

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

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

As of August 31, 2021, 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.

The gross notional value of foreign currency forward contracts to purchase U.S.

dollars with Euros and British Pound Sterling was € 33.8 million and £ 37.7 million, respectively.

Interest Rate Swap Agreement

On March 5, 2020, we entered into an interest rate swap agreement with a notional amount of $ 287.5 million to hedge the variable interest rate obligation on a portion of our outstanding debt under our 2019 Revolving Credit Facility (as defined below in Note 13, Debt ).

As of August 31, 2021 , 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 a contractual one month LIBOR plus a spread using a debt leverage pricing grid, which was 0.875 % as of August 31, 2021.

Refer to Note 13, Debt, for further discussion on the 2019 Revolving Credit Facility The variable interest rate on our long-term debt can expose us to interest rate volatility arising from changes in LIBOR.

Under the terms of the interest rate 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 interest rate swap agreement matures on March 29, 2024.

As the terms for the interest rate swap agreement align with the 2019 Revolving Credit Facility, we do not expect any hedge ineffectiveness.

We have designated and accounted for this instrument as a cash flow hedge with the unrealized gains or losses on the interest rate swap agreement recorded in AOCL in the Consolidated Balance Sheets.

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

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

dollars as of August 31, 2022 and 2021.

August 31, 2022 August 31, 2021

(in thousands) Local Currency Amount Notional Contract Amount (USD) Local Currency Amount Notional Contract Amount (USD)

British Pound Sterling £ 44,200 $ 55,567 £ 37,700 $ 51,754

Euro € 37,500 40,679 € 33,800 40,674

Indian Rupee Rs 2,667,928 33,600 Rs 2,585,198 33,800

Philippine Peso ₱ 1,462,060 27,000 ₱ 1,414,928 28,500

Total $ 156,846 $ 154,728

Refer to Foreign Currency Exchange Risk in Part II, Item 7A of this Annual Report on Form 10-K for further discussion of our exposure to foreign exchange rate fluctuations.

Swap Agreement

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 to hedge a portion of our outstanding floating Secured Overnight Financing Rate ("SOFR") rate debt with a fixed

interest rate of 1.162 %.

The notional amount of the 2022 Swap Agreement declines by $ 100.0 million on a quarterly basis as of May 31, 2022 and is maturing on February 28, 2024.

As of August 31, 2022, the notional amount of the 2022 Swap Agreement was $ 600.0 million.

We have designated and accounted for the 2022 Swap Agreement as a cash flow hedge with the unrealized gains or losses recorded in AOCL, net of tax, in the Consolidated Balance Sheets.

Realized gains or losses resulting from settlement are subsequently reclassified into Interest expense, net in the Consolidated Statements of Income.

Since its inception on March 1, 2022 and through August 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 II, Item 7A of this Annual Report on Form 10-K for further discussion of our exposure to interest rate risk on our long-term debt outstanding.

Gross Notional Value and Fair Value of Derivative Instruments

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

(in thousands, in U.S.

(in thousands)

Gross Notional Value

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Total cash flow hedges $ 756,846 $ 442,228

Fair Value of Derivative Instruments

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

Fair Value of Derivative Instruments

Derivative Assets Derivative Liabilities

(in thousands) Derivative Assets Derivative Liabilities

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

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(in thousands)

Gain (Loss) Recognized in AOCL on Derivatives Location of Gain (Loss) Reclassified from AOCL into Income Gain (Loss) Reclassified from AOCL into Income

Gain (Loss) Reclassified in AOCL on Derivatives Location of Gain (Loss) Reclassified from AOCL into Income Gain (Loss) Reclassified from AOCL into Income

Derivatives in Cash Flow Hedging Relationships

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Total cash flow hedges $ 889 $ 2,405 $ ( 1,089 ) $ ( 6,013 ) $ 3,071 $ ( 2,014 )

As of August 31, 2021 , we estimate that net pre-tax derivative losses of $ 1.8 million included in AOCL will be reclassified into earnings within the next 12 months.

No amount of ineffectiveness was 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 August 31, 2022, we estimate that net pre-tax derivative gains of $ 2.3 million included in AOCL will be reclassified into earnings within the next 12 months.

As of August 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.

Offsetting of Derivative Instruments

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As of August 31, 2022 and 2021, there were no material amounts recorded net on the Consolidated Balance 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.

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 working capital adjustments.

C GS 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 believe that the CGS acquisition will significantly expand our critical role in the global capital markets.

The CGS purchase price was in excess of the fair value of net assets acquired, resulting in the recognition of goodwill.

We finalized the purchase accounting for the CGS acquisition during the fourth quarter of fiscal 2022 and did not record any material changes to the preliminary purchase price allocation.

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

Acquisition Date Fair Value Acquisition Date Useful Life Amortization Method

(in thousands) (in years)

Current assets 1

Amortizable intangible assets

ABA business process 1,583,000 36 years Straight-line

Client relationships 164,000 26 years Straight-line

Acquired databases 46,000 15 years Straight-line

Goodwill 214,970

Current liabilities 2

Deferred revenues, long-term ( 1,481 )

Total purchase price $ 1,931,526

Includes an accounts receivable balance of $ 29.5 million.

Includes a deferred revenues balance of $ 99.4 million.

The CGS acquisitio n was accounted for in accordance with our adoption of ASU No.

as such, the deferred revenues did not include a fair value adjustment.

Refer to Note 2, Significant Accounting Policies in the Notes to the Consolidated Financial Statements included in Item 8.

of this Annual Report on Form 10-K for more information on ASU No.

Goodwill totaling $ 215.0 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 an ABA business process intangible which is a renewable license agreement with the ABA to manage the issuance, maintenance and access to the CUSIP numbering system and related database of CUSIP identifiers.

This intangible asset's valuation and associated useful life considers the nature of the business relationship, multi-year term of the current

agreement and the likelihood of long-term renewals.

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

The useful life assigned to Acquired databases considers the historical period of data collection and the limited changes to the data on an annual basis.

The results of CGS's operations have been included in our Consolidated Financial Statements, within the Americas, EMEA, and Asia Pacific segments, beginning with the closing of the acquisition on March 1, 2022.

CGS functions as part of CTS.

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.

On October 12, 2021, we acquired all of the outstanding shares of Cobalt for a purchase price of $ 50.0 million, net of cash acquired, and inclusive of working capital adjustments.

Cobalt is a leading portfolio monitoring solutions provider for the private capital industry.

This acquisition advances our strategy to scale our data and workflow solutions through targeted investments as part of our multi-year investment plan and expands our private markets offering.

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

We finalized the purchase accounting for the Cobalt acquisition during the fourth quarter of fiscal 2022 and did not record any material changes to the preliminary purchase price allocation.

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

Acquisition Date Fair Value Acquisition Date Useful Life Amortization Method

(in thousands) (in years)

Current assets $ 540

Amortizable intangible assets

Software technology 7,750 5 years Straight-line

Client relationships 4,800 11 years Straight-line

Goodwill 41,338

Other assets 34

Current liabilities ( 4,437 )

Other liabilities ( 7 )

Total purchase price $ 50,018

Goodwill totaling $ 41.3 million represents the excess of the Cobalt purchase price over the fair value of net assets acquired and is included i n the Americas and EMEA segments.

Goodwill generated from the Cobalt acquisition is not deductible for income tax purposes.

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

The useful life assigned to Software technology considers our historical experience and anticipated technological changes.

The results of Cobalt's operations have been included in our Consolidated Financial Statements, within the Americas and EMEA segments, beginning with its acquisition on October 12, 2021.

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

Truvalue Labs, Inc.

On November 2, 2020, we acquired all of the outstanding shares of Truvalue Labs, Inc.

("TVL") for a purchase price of $ 41.9 million, subject to working capital and other adjustments.

On November 2, 2020, we acquired all of the outstanding shares of TVL for a purchase price of $ 41.9 million, net of cash acquired.

TVL is a leading provider of environmental, social, and governance ("ESG") information.

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The TVL purchase price was in excess of the fair value of net assets acquired, resulting in the recognition of goodwill.

We finalized the purchase accounting for the TVL acquisition during the third quarter of fiscal 2021 and did not record any material changes to the preliminary purchase price allocation.

We finalized the purchase accounting for the TVL acquisition during the third quarter of fiscal 2021.

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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Depreciation expense was $ 24.3 million, $ 30.4 million and $ 32.2 million for fiscal years 2022, 2021 and 2020, respectively.

During fiscal 2022, we incurred an impairment charge of $ 30.7 million for property, equipment and leasehold improvements related to vacating certain leased office space.

Refer to Note 4, Fair Value Measures , for more information on the property, equipment and leasehold improvements assets impairment methodology.

Changes in the carrying amount of goodwill by segment for fiscal years ended August 31, 2022 and 2021 are as follows:

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Balance at August 31, 2020 $ 386,195 $ 320,427 $ 3,081 $ 709,703

Acquisitions $ 43,893 $ — $ — $ 43,893

Foreign currency translations — 723 ( 114 ) 609

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

At least annually, we are required to test goodwill at the reporting unit level, which is consistent with our segments, for potential impairment, and, if impaired, write down to fair value based on the present value of discounted cash flows.

We performed our annual goodwill impairment test during the fourth quarter of fiscal 2021 utilizing a qualitative analysis, consistent with the timing of previous years.

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.

At least annually, we are required to test goodwill at the reporting unit level, which is consistent with our segments, for potential impairment, and, if impaired, we write down our goodwill to fair value based on the present value of discounted cash flows.

We performed our annual goodwill impairment test during the fourth quarter of fiscal 2022 utilizing a qualitative analysis, consistent with the timing and methodology of previous years.

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

INTANGIBLE ASSETS

Our identifiable intangible assets consist of acquired content databases, client relationships, acquired software technology, internally developed software, non-compete agreements and trade names resulting from previous acquisitions, which have been fully integrated into our operations.

We amortize intangible assets on a straight line basis over their estimated useful lives.

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(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

Data content 4 to 20

ABA business process 36

$ 1,583,000 $ 21,986 $ 1,561,014 $ — $ — $ —

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80,956 33,676 47,280 57,666 21,278 36,388

Non-compete agreements 2 to 4

Acquired databases 15

46,000 $ 1,533 44,467 — — —

Trade names 15 to 15

Data content 5 to 20

32,305 24,973 7,332 36,681 26,835 9,846

Trade names 15

6,693 4,431 2,262 6,900 4,435 2,465

Total $ 2,134,480 $ 238,571 $ 1,895,909 $ 323,880 $ 188,894 $ 134,986

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

As described in Note 6, Acquisitions , we acquired several intangible assets as part of the CGS acquisition.

The weighted average useful life of our intangible assets excluding those acquired from CGS at August 31, 2022 was 9.6 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 no t identified a material impairment, nor a material change to the estimated remaining useful lives of our intangible assets during fiscal years 2021 and 2020.

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.

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Deferred income taxes are recorded for the temporary differences between the financial statement and the tax bases of assets and liabilities using currently enacted tax rates.

Provision for Income Taxes

Provision and Components for Income Taxes

The provision for income taxes is as follows:

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Total provision for income taxes $ 46,677 $ 68,027 $ 54,196

The fiscal 2022 provision for income taxes decreased 31.4 % to $ 46.7 million, compared with $ 68.0 million in fiscal 2021.

This decrease was primarily driven by lower pretax income and $ 11.7 million in higher tax benefits from the exercise of stock options for fiscal 2022, compared with the prior year period.

Our effective tax rate is based on recurring factors and non-recurring events, including the taxation of foreign income.

Our effective tax rate will vary based on, among other things, changes in levels of foreign income, as well as discrete and other non-recurring events that may not be predictable.

The provision for income taxes differs from the amount of income tax determined by applying the U.S.

statutory federal income tax rate to income before income taxes as a result of the following recurring factors and non-recurring events, including the taxation of foreign income:

Our effective tax rate is lower than the applicable U.S.

corporate income tax rate for fiscal 2022 driven mainly by research and development ("R&D") tax credits, a foreign derived intangible income ("FDII") deduction and a tax benefit from the exercise of stock options.

The following table presents a reconciliation between the U.S.

corporate income tax rate and our effective tax rate:

Years ended August 31,

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Income tax benefits from R&D tax credits ( 4.1 ) ( 3.9 ) ( 3.8 )

Share-based payments ( 2.2 ) ( 3.7 ) ( 3.2 )

One-time transition tax from TCJA — — ( 0.4 ) (1)

Stock-based payments ( 3.4 ) ( 2.2 ) ( 3.7 )

Other, net ( 1.4 ) 0.4 ( 0.7 )

Effective tax rate 10.5 % 14.5 % 12.7 %

The enactment of the TCJA resulted in a $ 3.4 million net benefit revision recorded during fiscal 2019 associated with finalizing the accounting for the tax effects of the TCJA during fiscal 2019.

The fiscal 2021 provision for income taxes was $ 68.0 million, compared with $ 54.2 million in fiscal 2020, an increase of 25.5 %.

The increase was primarily due to net changes in jurisdictional pre-tax book income in fiscal 2021, compared with the same period in the prior year.

Additionally, the increase was driven by a $ 4.4 million lower windfall tax benefit from stock-based compensation for fiscal 2021, compared with fiscal 2020, changes in tax rates in certain jurisdictions, and a lower benefit from finalizing prior year tax returns of $ 1.2 million.

The increase was partially offset by the impact of the true-up of certain foreign deferred tax balances, and higher research and development tax credits.

Due to the changes in taxation of undistributed foreign earnings under the TCJA, we will continue to analyze foreign subsidiary earnings, as well as global working capital requirements, and may repatriate earnings when the amounts are remitted substantially free of additional tax.

We are permanently reinvested in all foreign unremitted earnings, except in jurisdictions where earnings can be repatriated substantially free of tax.

It is not practicable to determine the amount of unremitted earnings that are permanently reinvested and the taxes that would be payable if these amounts were repatriated to the U.S.

Deferred Tax Assets and Liabilities

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Total deferred tax assets $ 100,383 $ 93,597

At August 31, 2022, we had pre-tax federal and state net operating loss carryforwards ("NOLs") of approximately $ 34.8 million and $ 13.8 million, respectively.

The carryforwards may be used to offset future taxable income.

The federal NOLs have an indefinite carryforward and the state NOLs have various expiration dates, beginning August 31, 2025.

Utilization of the NOLs may be subject to an annual limitation due to the ownership limitations provided by the Internal Revenue Code of 1986, as amended (the “Code”), and similar state provisions.

Any annual limitation may result in the expiration of net operating losses before utilization.

The significant components of deferred tax liabilities recorded within the Consolidated Balance Sheets were as follows:

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Additionally, we accrue interest on all tax exposures for which reserves have been established consistent with jurisdictional tax laws.

This interest is classified as income tax expense in the financial statements.

As of August 31, 2021 , we had gross unrecognized tax benefits totaling $ 14.9 million, including $ 1.3 million of accrued interest, recorded as Taxes Payable (non-current) within the Consolidated Balance Sheets.

Additionally, we accrue interest on all tax exposures for which reserves have been established consistent with jurisdictional tax laws, recorded in Provision for income taxes in the Consolidated Statements of Income and Taxes Payable (non-current) within the Consolidated Balance Sheets.

The following table summarizes the changes in the balance of gross unrecognized tax benefits:

(in thousands)

Unrecognized income tax benefits at August 31, 2018 $ 9,223

Unrecognized income tax benefits as of August 31, 2019

Additions based on tax positions related to the current year 3,533

Additions for tax positions of prior years 507

Statute of limitations lapse ( 1,979 )

Unrecognized income tax benefits at August 31, 2019 $ 10,884

Release for tax positions of prior years ( 2,086 )

Unrecognized income tax benefits as of August 31, 2020 (1)

Additions based on tax positions related to the current year 4,259

Release for tax positions of prior years ( 1,720 )

Unrecognized income tax benefits at August 31, 2020 $ 12,331

Unrecognized income tax benefits as of August 31, 2021 (1)

Additions based on tax positions related to the current year 7,959

Release for tax positions of prior years ( 2,658 )

Unrecognized income tax benefits at August 31, 2021 $ 14,870

Unrecognized income tax benefits as of August 31, 2022 (1)

(1) The unrecognized income tax benefits include accrued interest of $ 1.4 million, $ 1.3 million and $ 0.9 million as of August 31, 2022, 2021 and 2020, respectively.

In the normal course of business, our tax filings are subject to audit by federal, state and foreign tax authorities.

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Germany 2018 through 2021

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

As part of this adoption, w e elected to not record operating lease right-of-use assets or operating lease liabilities for leases with an initial term of 12 months or less.

We review new arrangements at inception to evaluate whether we obtain substantially all the economic benefits of and have the right to control the use of an asset.

Our lease portfolio is primarily related to our office space, under various operating lease agreements.

Our lease ROU assets and lease liabilities are recognized based on the present value of future minimum lease payments at lease commencement (which includes fixed lease payments and certain qualifying index-based variable payments) over the reasonably certain lease term.

leveraging an estimated IBR.

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

As of August 31, 2021 , we recognized $ 239.1 million of Lease right-of-use assets, net and $ 291.6 million of combined Current and Long-term lease liabilities in the Consolidated Balance Sheets.

We review new arrangements at inception to evaluate whether we obtain substantially all the economic benefits of and have the right to control the use of an asset.

Certain adjustments to our lease ROU assets may be required due to prepayments, lease incentives received and initial direct costs incurred.

As of August 31, 2022 , we recognized $ 159.5 million of Lease right-of-use assets, net and $ 237.8 million of combined Current lease liabilities and Long-term lease liabilities in the Consolidated Balance Sheet.

Such leases have a remaining lease term ranging from less than one year to just over 13 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 Current and Long-term lease liabilities as of August 31, 2021:

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 August 31, 2022:

(in thousands) Minimum Lease

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Present Value $ 237,807

(in thousands)

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

At August 31,

Years ended August 31,

(in millions)

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$ 11.5 $ 14.6

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

Operating lease costs include costs associated with fixed lease payments and index-based variable payments that qualified for lease accounting under ASC 842, Leases and complied with the practical expedients and exceptions

elected by us.

Variable lease costs were not included in the measurement of lease liabilities.

These costs primarily included variable non-lease costs and leases that qualified for the short-term lease exception.

Our variable non-lease costs included costs that were not fixed at the lease commencement date and are not dependent on an index or rate.

These costs primarily include variable non-lease costs and leases that qualified for the short-term lease exception.

Our variable non-lease costs include costs that were not fixed at the lease commencement date and are not dependent on an index or rate.

These costs relate to utilities, real estate taxes, insurance and maintenance.

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

At August 31,

Years ended August 31,

(in millions)

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Lease ROU assets obtained in exchange for lease liabilities 1, 3

Our debt obligations consisted of the following:

(in thousands) At August 31,

2019 Revolving Credit Facility $ 575,000 $ 575,000

2019 Revolving Credit Facility debt issuance costs ( 465 ) ( 646 )

Long-term debt $ 574,535 $ 574,354

Reductions to ROU assets resulting from reductions to lease liabilities 2, 3

$ ( 17.5 ) $ ( 0.7 )

Primarily includes new lease arrangements entered into during the period and contract modifications that extend our lease terms and/or provide additional rights.

Primarily includes modifications to our lease agreements based on contractual options or negotiations that allow for early termination that result in a reduction to our future minimum lease payments.

We reclassified prior year comparative figures from Lease ROU assets obtained in exchange for lease liabilities to Reductions to ROU assets resulting from reductions to lease liabilities to conform to the current year's presentation.

During fiscal 2022, we incurred an impairment charge of $ 31.5 million related to our lease ROU assets associated with vacating certain leased office space.

Refer to Note 4, Fair Value Measures , for more information on the lease ROU assets impairment methodology.

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

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

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").

The 2019 Credit Agreement provides for a $ 750.0 million revolving credit facility (the "2019 Revolving Credit Facility").

We may request borrowings under the 2019 Revolving Credit Facility until its maturity date of March 29, 2024.

The 2019 Credit Agreement also allows us, subject to certain requirements, to arrange for 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.

We 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 August 31, 2021.

The principal balance is payable in full on the maturity date.

Borrowings under the 2019 Revolving Credit Facility bear interes t 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 %.

During fiscal 2021 and 2020, 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 $ 8.1 million and $ 12.9 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 1.38 % and 2.20 % as of August 31, 2021 and August 31, 2020, 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.

2019 Revolving Credit Facility (terminated on March 1, 2022) 3/29/2019 3/29/2024 $ — $ 575,000

2022 Credit Agreement

2022 Term Facility 3/1/2022 3/1/2025 750,000 —

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 ( 17,576 ) ( 465 )

Total Long-term debt $ 1,982,424 $ 574,535

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

(in thousands)

Fiscal Years Ended August 31,

Thereafter 500,000

Total $ 2,000,000

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 August 31, 2021.

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, 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 remained at 0.125 % through August 31, 2022.

The commitment fee can fluctuate between 0.10 % and 0.25 % per annum based upon our senior unsecured non-credit enhanced long-term debt rating and our total leverage ratio.

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.

Debt issuance costs are presented in the Consolidated Balance Sheets as a direct deduction from the carrying amount of the related debt liability.

Debt issuance costs are amortized to Interest expense, net in the Consolidated Statements of Income over the contractual term of the debt 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.

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

During fiscal 2022, we repaid $ 250.0 million under the 2022 Term Facility, inclusive of voluntary prepayments of $ 237.5 million.

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

dollars, at our option, will bear interest at either (i) the one-month Term SOFR (with a 0.1 % credit spread adjustment and subject to a " zero " floor), (ii) the Daily Simple SOFR (with a 0.1 % 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 the Daily Simple Sterling Overnight Index Average ("SONIA") (subject to a " zero " floor) and loans denominated in Euros will bear interest at the Euro Interbank Offered Rate ("EURIBOR") (subject to a " zero " floor), in each case, plus an applicable interest rate margin.

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

For fiscal 2022, the outstanding borrowings under the 2022 Credit Facilities bore interest at rates equal to the applicable one-month Term SOFR rate plus a 1.1 % spread (comprised of a 1.0 % interest rate margin based on a debt leverage pricing grid plus 0.1 % credit spread adjustment).

The spread remained consistent through August 31, 2022.

Interest on the 2022 Credit Facilities is currently payable on the last business day of each month, in arrears.

The 2022 Credit Agreement contains usual and customary 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.

We were in compliance with all the covenants and requirements of the 2022 Credit Agreement during fiscal 2022.

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.

We were in compliance with the required interest coverage ratio during fiscal 2022.

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.

Debt discounts and debt issuance costs are presented in the Consolidated Balance Sheets as a net direct deduction from the carrying amount of the related debt liability.

The debt discounts and debt issuance costs are amortized to Interest expense, net in the Consolidated Statements of Income over the contractual term of the debt, leveraging the effective interest method.

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 any accrued and unpaid interest.

Upon the occurrence of a change of control triggering event (as defined in the Supplemental Indenture), we must offer to repurchase the Senior Notes at 101 % of their principal amount, plus any accrued and unpaid interest.

Swap Agreements

On March 5, 2020, we entered into the 2020 Swap Agreement to hedge a portion of our then outstanding floating LIBOR rate debt with a fixed interest rate of 0.7995 %.

On March 1, 2022, we terminated the 2020 Swap Agreement and concurrently entered into the 2022 Swap Agreement to hedge a portion of our outstanding floating SOFR rate debt with a fixed interest rate of 1.162 %.

Refer to Note 5, Derivative Instruments for 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 twelve months ended August 31, 2022 and August 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 $ 35.2 million and $ 8.1 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 2.02 % and 1.38 % as of August 31, 2022 and August 31, 2021, respectively.

Refer to Note 5, Derivative Instruments for further discussion of the 2020 Swap Agreement and 2022 Swap Agreement.

COMMITMENTS AND CONTINGENCIES

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We record liabilities for commitments when incurred (i.e., when the goods or services are received).

We accrue non-income-tax liabilities for contingencies when we believe that a loss is probable, and the amount can be reasonably estimated.

Judgment is required to determine both probability and the estimated amount of loss.

If the reasonable estimate of a probable loss is a range, we record the most probable estimate of the loss or the minimum amount when no amount within the range is a better estimate than any other amount.

We review accruals on a quarterly basis and adjust, as necessary, to reflect the impact of negotiations, settlements, rulings, advice of legal counsel and other current information.

Contingent gains are recognized only when realized.

Uncertain income tax positions are accounted for in accordance with applicable accounting guidance, refer to Note 10, Income Taxes for further details.

Purchase Commitments with Suppliers and Vendors

Purchase obligations represent payments due in future periods in respect of commitments to our various data vendors as well as commitments to purchase goods and services.

These purchase commitments are agreements that are enforceable and legally binding on us, and they specify all significant terms, including:

fixed or minimum quantities to be purchased;

fixed, minimum or variable price provisions;

and the approximate timing of the transaction.

As of August 31, 2021 and 2020, we had total purchase commitments with suppliers of $ 191.9 million and $ 226.0 million, respectively.

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

As of August 31, 2022 and 2021, we had total purchase obligations with suppliers of $ 373.9 million and $ 191.9 million, respectively.

Our total purchase obligations at the end of both fiscal years primarily related to hosting services and data content.

Hosting services support our technology investments related to our migration to cloud-based hosting services, the majority of which rely on third-party hosting providers.

Data content is an integral component of the value we provide to our clients.

Additional commitments relate primarily to third-party software providers.

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

Refer to Note 11, Leases and Note 12, Debt for information regarding lease commitments and outstanding debt obligations, respectively.

Capital Commitments

As of August 31, 2022 and 2021, we had outstanding capital commitments related to an investment of $ 1.1 million and $ 2.3 million, respectively.

Letters of Credit

From time to time, we are required to obtain letters of credit in the ordinary course of business.

As of August 31, 2021 we had approximately $ 2.8 million of standby letters of credit outstanding.

These standby letters of credit utilize the same covenants included in the 2019 Credit Agreement.

Refer to Note 13, Debt for more information on these covenants.

As of August 31, 2022 we had approximately $ 0.5 million, compared to $ 2.8 million as of August 31, 2021, of standby letters of credit outstanding.

No liabilities related to these arrangements are reflected in the Company's Consolidated Balance Sheets.

Contingencies

Uncertain income tax positions are accounted for in accordance with applicable accounting guidance, refer to Note 11, Income Taxes for further details.

We are currently under audit by tax authorities and have reserved for potential adjustments to our provision for income taxes that may result from examinations by, or any negotiated settlements with, these tax authorities.

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Legal Matters

We accrue non-income-tax liabilities for contingencies when management believes that a loss is probable, and the amounts can be reasonably estimated.

Contingent gains are recognized only when realized.

We are engaged in various legal proceedings, claims and litigation that have arisen in the ordinary course of business, including employment matters, commercial and intellectual property litigation.

We are engaged in various legal proceedings, claims and litigation that have arisen in the ordinary course of business.

The outcome of all the matters against us are subject to future resolution, including the uncertainties of litigation.

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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 August 31, 2021.

We believe that we will ultimately prevail if we are presented with a formal assessment for any of these matters;

As of August 31, 2022 , we have concluded that a payment to the Commonwealth is probable.

We recorded an accrual which is not material to our consolidated financial statements.

While we believe that the assumptions and estimates used to determine the accrual are reasonable, future developments could result in adjustments being made to this accrual.

If we are presented with a formal assessment for any of these matters, we believe that we will ultimately prevail;

however, if we do not prevail, the amount of any assessment could have a material impact on our consolidated financial position, results of operations and cash flows.

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The maximum potential amount of future payments we could be required to make under these indemnification obligations is unlimited;

however, we have a director and officer insurance policy that we believe mitigates our exposure and may enable us

to recover a portion of any future amounts paid.

however, we have a director and officer insurance policy that we believe mitigates our exposure and may enable us to recover a portion of any future amounts paid.

We believe the estimated fair value of these indemnification obligations is immaterial.

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Share Repurchase Program

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

For the year ended August 31, 2021, we repurchased 0.8 million shares for $ 264.7 million compared with 0.7 million shares for $ 199.6 million for the year ended August 31, 2020.

On March 23, 2021, our Board of Directors approved a $ 205.6 million increase to our existing share repurchase program.

As of August 31, 2021, a total of $ 199.9 million remained authorized for future share repurchases under this program.

It is expected that share repurchases will be paid using existing and future cash generated by operations.

As of August 31, 2022, a total of $ 181.3 million remained authorized for future share repurchases under our share repurchase program.

There is no defined number of shares to be repurchased over a specified timeframe through the life of the program.

We may repurchase shares of our common stock under the program from time-to-time in the open market and privately negotiated transactions, subject to market conditions.

For the year ended August 31, 2022, we repurchased 46,200 shares for $ 18.6 million compared with 797,385 shares for $ 264.7 million for the year ended August 31, 2021.

Beginning in the second quarter of fiscal 2022, we suspended our share repurchase program until at least the second half of fiscal 2023, with the exception of potential minor repurchases to offset dilution from grants of equity awards or repurchases to satisfy withholding tax obligations due upon the vesting of stock-based awards.

The suspension of our share repurchase program allows us to prioritize the repayment of debt under the 2022 Credit Facilities.

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

Restricted Stock

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For the year ended August 31, 2021, 34,607 shares of previously granted restricted stock vested and were included in common stock outstanding as of August 31, 2021 (recorded net of 12,932 shares repurchased from employees at a cost of $ 4.3 million to cover their cost of taxes upon vesting of the restricted stock).

Our Board of Directors declared dividends on our common stock for the full years ended August 31, 2021 and August 31, 2020 as follows:

Our Board of Directors declared dividends for the full years ended August 31, 2022 and August 31, 2021 as follows:

Year Ended Dividends per

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Fourth Quarter $ 0.89 August 31, 2022 33,860 September 15, 2022

Total Dividends $ 129,693

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

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Fourth Quarter $ 0.82 August 31, 2021 30,845 September 16, 2021

Total Dividends $ 120,224

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.

On May 5, 2021, our Board of Directors approved a 6.5 % increase in the regular quarterly dividend from $ 0.77 to $ 0.82 per share.

On April 28, 2022, our Board of Directors approved a 8.5 % increase in the regular quarterly dividend from $ 0.82 to $ 0.89 per share.

Accumulated Other Comprehensive Loss

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EARNINGS PER SHARE

A reconciliation of the weighted average shares outstanding used in the basic and diluted earnings per share ("EPS") computations.

Basic earnings per share ("EPS") is computed by dividing net income by the number of weighted average common shares outstanding during the period.

Diluted EPS is computed using the treasury stock method, by dividing net income by the cumulative weighted average common shares that are outstanding or are issuable upon the exercise of outstanding stock-based compensation awards during the period.

Performance-based awards stock-based compensation awards that are out-of-the-money are omitted from the calculation of diluted EPS until the reporting period in which the performance criteria has been met.

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

Twelve Months Ended

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Dilutive potential common shares consist of stock options and unvested performance-based awards.

There were 1,750 stock options excluded from the calculation of diluted EPS as of August 31, 2021 and 2020, because their inclusion would have been anti-dilutive.

As of August 31, 2022 and August 31, 2021, there were 329,189 and 1,750 stock options excluded from the calculation of diluted EPS, respectively, as they were out-of-the-money and their inclusion would have been anti-dilutive.

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.

As of August 31, 2021, there were 68,990 performance-based awards excluded from the calculation of diluted EPS.

As of August 31, 2020 there were 35,666 performance-based awards excluded from the calculation of diluted EPS.

As of August 31, 2022 and August 31, 2021, there were 60,725 and 68,990 performance-based awards excluded from the calculation of diluted EPS, respectively.

STOCK-BASED COMPENSATION

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

We utilize the Black-Scholes model for new non-employee director stock option grants, non-employee restricted stock units ("RSUs") and common stock acquired under our employee stock purchase plan ("ESPP"), and the binomial model for new employee stock option grants, employee RSUs and employee performance share units ("PSUs").

Both models involve certain estimates and assumptions such as:

• Risk-free interest rate - based on the U.S.

Treasury yield curve in effect at the time of grant with maturities equal to the expected terms of the stock-based awards granted.

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

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

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

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

For stock-based awards with service conditions, we use the straight-line method to recognize compensation expense over the requisite service period.

For stock-based awards that also include performance conditions, the graded vesting method is used to determine compensation expense over the requisite service period if achievement of the performance condition is determined to be probable, which is reviewed on a quarterly basis.

Compensation expense for all stock-based awards is recorded net of estimated forfeitures which are based on historical forfeiture rates and revised if actual forfeitures differ from those estimates.

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

We recognized total stock-based compensation expense of $ 56.0 million, $ 45.1 million and $ 36.6 million in fiscal 2022, 2021 and 2020, respectively.

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A summary of stock option activity is as follows:

Number Outstanding Weighted Average

Exercise Price Per Share Aggregate Intrinsic Value Weighted Average Remaining Contractual Life (years)

Number Outstanding (thousands)

Weighted Average

Exercise Price Per Share Weighted Average Grant Date Fair Value Aggregate Intrinsic Value (millions) (1)

Weighted Average Remaining Contractual Life (years)

Outstanding as of August 31, 2019 2,524 $ 168.50

Granted – non-performance-based 482 $ 224.35

Granted – non-employee Directors grant 20 $ 207.88

Granted – employees 424 $ 256.43 $ 60.33

Granted – non-employee directors 16 $ 271.51 $ 54.74

Exercised (2)

( 588 ) $ 145.54

Forfeited ( 122 ) $ 218.36

Outstanding as of August 31, 2020 2,254 $ 189.32

Granted – non-performance-based 424 $ 256.43

Granted – non-employee Directors grant 16 $ 271.51

Granted – employees 418 $ 317.17 $ 78.31

Granted – non-employee directors 12 $ 318.20 $ 82.01

Exercised (2)

( 322 ) $ 166.36

Forfeited ( 85 ) $ 237.23

Outstanding as of August 31, 2021 2,277 $ 214.89

Granted – non-performance-based 418 $ 317.17

Granted – non-employee Directors grant 12 $ 318.20

Granted – employees 348 $ 433.09 $ 103.49

Granted – non-employee directors 6 $ 428.71 $ 109.11

Exercised (2)

( 414 ) $ 178.57

Forfeited ( 128 ) $ 301.05

Outstanding as of August 31, 2022 2,089 (3)

$ 253.85 $ 194.4 6.2

Options vested and exercisable as of August 31, 2022 1,035 $ 189.12 $ 252.8 4.7

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(1) The aggregate intrinsic value represents the difference between our closing stock price as of August 31, 2022 of $ 433.34 and the exercise price, multiplied by the number of options exercisable as of that date.

The total pre-tax intrinsic value of stock options exercised during fiscal 2021, 2020 and 2019 was $ 54.3 million, $ 85.0 million and $ 73.0 million, respectively.

(2) The total pre-tax intrinsic value of stock options exercised during fiscal 2022, 2021 and 2020 was $ 104.1 million, $ 54.3 million and $ 85.0 millio n, respectively .

(3) As of August 31, 2022, a total of 2,089,231 shares underlying the stock option awards were unvested and outstanding, which results in unamortized stock-based compensation of $ 60.1 million to be recognized as stock-based compensation expense over the remaining vesting period of 3.2 years.

Employee Stock Option Awards

During the twelve months ended August 31, 2021, we granted 417,546 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 $ 317.17 to existing employees of FactSet, using the lattice-binomial option-pricing model.

The majority of the stock options granted during the twelve months ended August 31, 2021 are related to the annual employee grant on November 9, 2020 under the LTIP.

The stock option awards granted on November 9, 2020 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.

Employee Stock Option Fair Value Determinations

We utilize the lattice-binomial option-pricing model ("binomial model") to estimate the fair value of new employee stock option grants.

The binomial model is affected by our stock price, as well as, assumptions regarding several variables, which nclude, but are not limited to our expected stock price volatility over the term of the awards, interest rates, option forfeitures and employee stock option exercise behaviors, to determine the grant date stock option award fair value.

The weighted average estimated fair value of employee stock options granted during fiscal 2021, 2020 and 2019 was determined using the binomial model with the following weighted average assumptions:

(Weighted average assumptions)

During the twelve months ended August 31, 2022, the majority of the 348,458 employee stock options granted under the FactSet Research Systems Inc.

Stock Option and Award Plan as Amended and Restated (the "LTIP") were related to the annual employee grant on November 1, 2021.

The November 1, 2021 grant vests ratably over five years on the anniversary date of the grant with the majority of the remaining employee stock options granted during fiscal 2022 vesting ratably over four years .

All employee stock options granted during fiscal 2022 expire ten years from the date the options were granted.

The following table includes the weighted average inputs to the binomial model to estimate the grant-date fair value of the employee stock options granted.

2022 2021 2020

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Dividend yield 0.86 % 0.12 % 1.09 %

Weighted average estimated fair value $ 78.31 $ 60.33 $ 57.12

Weighted average exercise price $ 317.17 $ 256.43 $ 224.35

Fair value as a percentage of exercise price 24.7 % 23.5 % 25.5 %

The risk-free interest rate assumption for periods within the contractual life of the option is based on the U.S.

Treasury yield curve in effect at the time of grant.

Expected volatility is based on a combination of historical volatility of our stock and implied volatilities of publicly traded options to buy FactSet common stock with contractual terms closest to the expected life of options granted to employees.

The approach to utilize a mix of historical and implied volatility was based upon the availability of actively traded options on our stock and our assessment that a combination of implied volatility and historical volatility is best representative of future stock price trends.

We use historical data to estimate option exercises and employee termination within the valuation model.

The dividend yield assumption is based on our history and expectation of dividend payouts.

The expected life of employee stock options represents the weighted average period the stock options are expected to remain outstanding and is a derived output of the binomial model.

The binomial model estimates employees exercise behavior based on the option’s remaining vested life and the extent to which the option is in-the-money.

The binomial model estimates the probability of exercise as a function of these two variables based on the entire history of exercises and cancellations of all past option grants made by us.

Non-Employee Directors' Stock Option Awards

The FactSet Research Systems Inc.

Non-Employee Directors’ Stock Option and Award Plan as Amended and Restated (the “Director Plan”) provides for the grant of share-based awards, including stock options, to non-employee directors of FactSet.

On January 18, 2022, we granted 6,329 stock options under t he FactSet Research Systems Inc.

Non-Employee Directors’ Stock Option and Award Plan as Amended and Restated (the “Director Plan”) which provides for the grant of stock-based awards, including stock options, to non-employee directors of FactSet.

The expiration date of the Director Plan is December 19, 2027.

The non-qualified stock options granted to directors vest 100% after three years on the anniversary date of the grant and expire seven years from the date the options were granted.

As of August 31, 2021, shares available for future grant under the Director Plan was 237,749 .

Non-Employee Director Stock Option Fair Value Determinations

We utilize the Black-Scholes model to estimate the fair value of new non-employee Director stock option grants.

The Black-Scholes model is affected by our stock price, as well as, assumptions regarding several variables, which include, but are not limited to, our expected stock price volatility over the term of the awards, interest rates, option forfeitures and employee stock option exercise behaviors, to determine the grant date stock-based payment award fair value.

On January 15, 2021, January 15, 2020 and January 15, 2019 , we granted 12,137 , 16,080 , and 20,576 stoc k options, respectively, to our non-employee Directors using the weighted average fair values, based on the following weighted average assumptions used in the Black-Scholes option-pricing model:

(Weighted average assumptions)

Years ended August 31,

2021 2020 2019

Fair value $ 82.01 $ 54.74 $ 42.77

Risk-free interest rate 0.77 % 1.64 % 2.51 %

Expected life (years) 6.9 5.4 5.4

Expected volatility 27.2 % 22.0 % 20.5 %

Dividend yield 0.93 % 1.11 % 1.17 %

Restricted Stock Units

Our LTIP provides for the grant of share-based awards, including awards of restricted stock units ("RSUs") and performance share units ("PSUs";

RSUs and PSUs, collectively, "Restricted Stock Awards").

The Restricted Stock Awards are subject to continued employment over a specified period.

The Restricted Stock Awards granted to employees entitle the holders to shares of common stock as the Restricted Stock Awards vest over time, but not to dividends declared on the underlying shares, while the stock subject to the Restricted Stock Awards is unvested.

Vesting of the shares underlying the PSUs are also subject to achieving certain specified performance levels during the measurement period subsequent to the date of grant.

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

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

As of August 31, 2021, a total of 196,621 shares underlying Restricted Stock Awards were unvested and outstanding, which results in unamortized stock-based compensation of $ 37.8 million to be recognized as stock-based compensation expense over the remaining vesting period of 2.6 years.

A summary of Stock Award activity is as follows:

The January 18, 2022 grant vests 100 % after three years on the anniversary date of the grant and expires seven years from the date the options were granted.

Restricted Stock Awards

A summary of Restricted Stock Award activity is as follows:

(in thousands, except per award data) Number Outstanding Weighted Average Grant

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Balance at August 31, 2019 124 $ 205.47

Granted - RSUs (1)

Vested - RSUs ( 85 ) $ 125.04

Forfeited ( 7 ) $ 181.32

Granted - employee Restricted Stock Awards (1) (2)

Vested - employee RSUs ( 33 ) $ 197.37

Forfeit ed (1)

( 19 ) $ 198.53

Balance at August 31, 2020 146 $ 231.55

Granted - Restricted Stock Awards (1) (2)

Vested - RSUs ( 33 ) $ 197.37

Forfeited ( 19 ) $ 198.53

Granted - employee Restricted Stock Awards (1) (2)

Vested - employee Restricted Stock Awards ( 35 ) $ 208.67

Forfei ted (1)

( 13 ) $ 267.23

Balance at August 31, 2021 197 $ 274.10

Granted - Restricted Stock Awards (1)(2)

Granted - employee Restricted Stock Awards (1) (2)

Granted – non-employee dire ctors RSUs (1)

Vested - Restricted Stock Awards ( 40 ) $ 242.87

Forfeited (1)

( 29 ) $ 323.16

Balance at August 31, 2022 233 (3)

(1) Each Restricted Stock Award granted is equivalent to 2.5 shares granted under the LTIP.

(2) During the fiscal year ended August 31, 2021 we granted 62,960 RSUs and 36,424 PSUs, During the fiscal year ended August 31, 2020 we granted 36,709 RSUs and 36,888 PSUs.

Performance-based Equity Awards

Performance-based equity awards require management to make assumptions regarding the likelihood of achieving our performance targets.

The number of performance-based awards that vest will be predicated on us achieving performance levels during the measurement period subsequent to the date of grant.

Dependent on the financial performance levels attained, a percentage of the performance-based awards will vest to the grantees.

However, there is no current guarantee that such awards will vest in whole or in part.

Share-based Awards Available for Grant

A summary of share-based awards available for grant is as follows:

(in thousands) Share-based Awards

(1) Each Restricted Stock Award granted or canceled/forfeited is equivalent to 2.5 shares under the LTIP.

(2) During the fiscal year ended August 31, 2022 we granted 71,978 RSUs and 30,704 PSUs.

During the fiscal year ended August 31, 2021 we granted 62,960 RSUs and 36,424 PSUs.

During the fiscal year ended August 31, 2020 we granted 36,709 RSUs and 36,888 PSUs.

(3) As of August 31, 2022, a total of 233,408 shares underlying the restricted stock awards were unvested and outstanding, which results in unamortized stock-based compensation of $ 49.2 million to be recognized as stock-based compensation expense over the remaining vesting period of 2.8 years.

Employee Restricted Stock Awards

Our LTIP provides for the grant of stock-based awards, including awards of restricted stock units ("RSUs") and performance share units ("PSUs";

RSUs and PSUs, collectively, "Restricted Stock Awards").

The Restricted Stock Awards are subject to continued employment over a specified period.

Vesting of the shares underlying the PSUs are also subject to achieving certain specified performance levels during the measurement period subsequent to the date of grant.

During the twelve months ended August 31, 2022, we granted 102,682 R estricted Stock Awards of which 71,978 were RSUs and 30,704 were PSUs.

The majority of the Restricted Stock Awards granted are related to the annual employee grant on November 1, 2021.

From this grant, the RSUs vest ratably over five years on the anniversary of the grant date with the majority of the r emaining RSUs granted during fiscal 2022 vesting ratably over three years on the anniversary of the grant date.

All PSUs granted in fiscal 2022, including those under the November 1, 2021 grant, cliff vest on the third anniversary of the grant date, subject to the achievement of certain performance metrics.

Non-Employee Directors' Restricted Stock Units

The Director Plan provides for the grant of stock-based awards, including RSUs, to non-employee directors of FactSet.

On January 18, 2022, we granted 1,629 RSUs to our non-employee directors that vest 100 % on the first anniversary of the grant date.

There were no non-employee director RSU grants in fiscal 2021 and 2020.

Employee Stock Purchase Plan

Shares of FactSet common stock may be purchased by eligible employees under the FactSet Research Systems Inc.

Employee Stock Purchase Plan, as Amended and Restated (the "ESPP") in three-month intervals.

The purchase price is equal to 85 % of the lesser of the fair market value of our common stock on the first day or the last day of each three-month offering period.

Employee purchases may not exceed 10 % of their gross compensation and there is a $ 25,000 contribution limit per employee during an offering period.

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 fiscal 2022, employees purchased 36,244 shares at a weighted average price of $ 332.30 compared with 38,848 shares at a weighted average price of $ 273.59 in fiscal 2021 and 42,606 shares at a weighted average price of $ 234.41 in fiscal 2020.

Stock-based compensation expense recorded during fiscal 2022, 2021 and 2020 relating to the ESPP was $ 2.3 million, $ 2.0 million and $ 2.1 million, respectively.

At August 31, 2022, the ESPP had 102,712 shares reserved for future issuance.

The weighted average estimated fair value of the ESPP shares during fiscal years 2022, 2021 and 2020, was $ 66.35 , $ 54.00 and $ 50.69 per share.

Stock-based Awards Available for Grant

A summary of stock-based awards available for grant is as follows:

(in thousands) Stock-based Awards

Available for Grant under the

Employee Stock Option Plan Share-based Awards

Employee Stock Option Plan Stock-based Awards

Available for Grant under the

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Balance at August 31, 2019 6,067 264

Granted – non-performance-based options ( 481 ) —

Granted – non-employee Directors options — ( 20 )

Granted - stock option awards ( 424 ) ( 16 )

Granted - RSUs (1)

Forfeited - Share-based awards (2)

Granted - PSUs (1)

Forfeited - stock-based awards (2)

Balance at August 31, 2020 5,626 250

Granted – non-performance-based options ( 424 ) —

Granted – non-employee Directors options — ( 16 )

Granted - stock option awards ( 418 ) ( 12 )

Granted - RSUs (1)

Granted - PSUs (1)

Forfeited – Share-based awards (2)

Forfeited - stock-based awards (2)

Balance at August 31, 2021 5,080 238

Granted – non-performance-based options ( 418 ) —

Granted – non-employee Directors options — ( 12 )

Granted - stock option awards ( 348 ) ( 6 )

Granted - RSUs (1)

( 180 ) ( 4 )

Granted - PSUs (1)

Forfeited – Share-based awards (2)

Forfeited - stock-based awards (2)

Balance at August 31, 2022 4,669 232

(1) Each Restricted Stock Award granted is equivalent to 2.5 shares granted under the LTIP.

(2) Under the LTIP, for each Restricted Stock Award canceled/forfeited, an equivalent of 2.5 shares is added back to the available share-based awards balance.

Employee Stock Purchase Plan

Shares of FactSet common stock may be purchased by eligible employees under the FactSet Research Systems Inc.

Employee Stock Purchase Plan, as Amended and Restated (the "ESPP") in three-month intervals.

The purchase price is equal to 85 % of the lesser of the fair market value of our common stock on the first day or the last day of each three-month offering period.

Employee purchases may not exceed 10 % of their gross compensation and there is a $ 25,000 contribution limit per employee during an offering period.

Dividends paid on shares held in the ESPP are used to purchase additional ESPP shares at the market price on the dividend payment date.

During fiscal 2021, employees purchased 38,848 shares at a weighted average price of $ 273.59 compared with 42,606 shares at a weighted average price of $ 234.41 in fiscal 2020 and 48,532 shares at a weighted average price of $ 205.64 in fiscal 2019.

Stock-based compensation expense recorded during fiscal 2021, 2020 and 2019 relating to the ESPP was $ 2.0 million, $ 2.1 million and $ 2.0 million, respectively.

At August 31, 2021, the ESPP had 138,956 shares reserved for future issuance.

We use the Black-Scholes model to calculate the estimated fair value for the ESPP shares.

The weighted average estimated fair value of the ESPP shares during fiscal years 2021, 2020 and 2019, was $ 54.00 , $ 50.69 and $ 41.06 per share, respectively, with the following weighted average assumptions:

(Weighted average assumptions)

2021 2020 2019

Risk-free interest rate 0.26 % 0.95 % 2.33 %

Expected life (months) 3 3 3

Expected volatility 11.69 % 20.04 % 10.89 %

Dividend yield 1.00 % 1.08 % 1.12 %

(2) Under the LTIP, for each Restricted Stock Award canceled/forfeited, an equivalent of 2.5 shares is added back to the available stock-based awards balance.

EMPLOYEE BENEFIT PLANS

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(i) they engage in business activities from which they may earn revenue and incur expense, (ii) their operating results are regularly reviewed by the chief operating decision maker ("CODM") for resource allocation decisions and performance assessment, and (iii) their discrete financial information is available.

At FactSet, our Chief Executive Officer functions as our CODM.

Our operating segments are consistent with our reportable segments and are how we, including our CODM, manage our business and the geographic markets in which we serve.

Our Chief Executive Officer functions as our CODM.

Our operating segments are consistent with our reportable segments and how we, including our CODM, manage our business and the geographic markets in which we serve.

Our internal financial reporting structure is based on three segments:

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and Asia Pacific.

Within each of the segments, we primarily deliver insight and information through four workflow solutions:

Analytics & Trading;

Content & Technology Solutions ("CTS");

Commencing with the our 2022 fiscal year, we have reorganized our workflows into three solutions:

Research & Advisory;

Analytics & Trading;

and CTS, to better align our products and go-to-market strategy.

These workflow solutions provide global financial and economic information to asset managers, investment banks and other financial services professionals.

The Americas segment serves our clients throughout North, Central, and South America.

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

Segment revenue reflects sales to clients based in these respective geographic locations.

Segment revenues reflect sales to our clients based on their 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 revenue.

The following tables reflect the results of operations of our segments:

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Operating income (1)(2)

$ 159,140 $ 196,231 $ 120,111 $ 475,482

Depreciation and amortization (2)

$ 64,916 $ 11,794 $ 9,973 $ 86,683

Stock-based compensation $ 45,319 $ 8,271 $ 2,413 $ 56,003

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Capital expenditures $ 60,204 $ 2,079 $ 15,359 $ 77,642

(1) Includes impairment charges of $ 64.3 million, of which $ 62.2 million ($ 57.7 million in the Americas, $ 4.2 million in EMEA and $ 0.3 million in Asia Pacific) related to lease ROU assets and property, equipment and leasehold improvements impairment charges associated with va cating certain leased office space.

(2) The Americas includes CGS intangible asset amortization of $ 26.8 million during fiscal 2022.

Segment Total Assets

29 unchanged sentences

Total long-lived assets $ 240,301 $ 370,441

RISKS AND CONCENTRATIONS OF CREDIT RISK

Financial Risk Management

Foreign Currency Exchange Risk

In the normal course of business, we are exposed to foreign currency exchange risk as we conducts business outside the U.S.

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

Changes in the exchange rates for such currencies into U.S.

dollars can affect our revenues, earnings, and the carrying values of our assets and liabilities in our consolidated balance sheet, either positively or negatively.

To manage the exposures related to the effects of foreign exchange rate fluctuations, we utilize derivative instruments (foreign currency forward contracts).

The changes in fair value for these foreign currency forward contracts are initially reported as a component of AOCL and subsequently reclassified into operating expenses when the hedged exposure affects earnings.

By their nature, all derivative instruments involve, to varying degrees, elements of market and credit risk.

The market risk associated with these instruments resulting from currency exchange movements is expected to offset the market risk of the underlying transactions, assets and liabilities being hedged.

We do not believe there is significant risk of loss in the event of non-performance by the counterparties associated with these instruments because these transactions are executed with a major financial institutions.

Further, our policy is to deal with counterparties having a minimum investment grade or better credit rating.

Credit risk is managed through the continuous monitoring of exposures to such counterparties.

Our primary objective in holding derivatives is to reduce the volatility of earnings associated with changes in foreign currency.

Refer to Note 6, Derivative Instruments for more information on our foreign currency exposures and our foreign currency forward contracts.

Interest Rate Risk

Cash and Cash Equivalents and Investments

The fair market value of our cash and cash equivalents and investments at August 31, 2021 was $ 717.8 million.

Our cash and cash equivalents consist of demand deposits and money market funds with original maturities of three months or less and are reported at fair value.

We are exposed to interest rate risk through fluctuations of interest rates on our investments.

As we have a restrictive investment policy, our financial exposure to fluctuations in interest rates is expected to remain low.

Refer to Note 3, Summary of Significant Accounting Policies for more information on our cash and cash equivalents.

As of August 31, 2021, we had long term debt outstanding under the 2019 Revolving Credit Facility with a principal balance of $ 575.0 million.

The debt bears interest on the outstanding principle at a rate equal to LIBOR plus a spread, using a debt leverage pricing grid.

The variable rate of interest on our long-term debt can expose us to interest rate volatility due to changes in LIBOR.

Thus, we are only exposed to base interest rate risk on floating rate borrowings in excess of any amounts that are not hedged, or $ 287.5 million of our outstanding principal balance.

Assuming all terms of our outstanding long-term debt remained the same, a hypothetical 25 basis point change (up or down) in the one-month LIBOR would result in a $ 0.7 million change in our annual interest expense.

Refer to Note 13, Debt for additional information regarding our outstanding debt obligations.

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

Concentrations of Credit Risk

Cash equivalents

Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash and cash equivalents.

We are exposed to credit risk for cash and cash equivalents held in financial institutions in the event of a default, to the extent that such amounts are in excess of applicable insurance limits.

We have not experienced any losses from maintaining cash accounts in excess of such limits.

Accounts Receivable

Our accounts receivable are subject to collection risk as they are unsecured and derived from revenue earned from clients located around the globe.

We do not require collateral from our clients.

We maintain reserves for potential write-offs and evaluate the adequacy of the reserves periodically.

These losses have historically been within expectations.

No single client represented more than 3 % of our total subscription revenue in any period presented.

As of August 31, 2021 and 2020, the receivable reserve was $ 6.4 million and $ 8.0 million, respectively.

Derivative Instruments

Our use of derivative instruments exposes us to credit risk to the extent counterparties may be unable to meet the terms of their agreements.

To mitigate credit risk, we limit counterparties to credit-worthy financial institutions and distribute contracts among these institutions to reduce the concentration of credit risk.

We do not expect any losses as a result of default by our counterparties.

Concentration of Other Risk

Data Content Providers

We integrate data from various third-party sources into our hosted propriety data and analytics platform, which our clients access to perform their analyses.

As certain data sources have a limited number of suppliers, we make every effort to assure that, where reasonable, alternative sources are available.

We are not dependent on any individual third-party data supplier in order to meet the needs of our clients, with only two data suppliers representing more than 10 % of our total data costs for the year ended August 31, 2021.

SUBSEQUENT EVENTS

As previously announced, on October 12, 2021, we completed our acquisition of Cobalt Software, Inc.

(“Cobalt”), and its subsidiaries, for approximately $ 51.0 million, subject to certain post-closing adjustments.

Cobalt is a leading portfolio monitoring solutions provider for the private capital industry.

The acquisition of Cobalt advances our strategy to scale our data and workflow solutions and expands our private market offering.

Results of Operations from Cobalt will be recognized based on geographic business activities in accordance with how our operating segments are currently aligned.

We expect the majority of the Cobalt purchase price to be allocated to goodwill and acquired intangible assets.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

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-K

Item 8. Financial Statements and Supplementary Data