FactSet Research Systems (FDS) 10-K risk factor changes: FY2017 vs FY2016

If FactSet fails to maintain the adequacy of its internal controls, including any failure to implement required new or improved controls, [removed: or if FactSet experiences difficulties in their implementation,] misappropriation of client data by an employee or an external third party could [removed: occur, which could damage the Company’s reputation and ultimately its business.][added: occur.]

The market for FactSet is characterized by rapid technological change, changes in client demands and evolving industry [removed: standards] [added: standards,] which can render existing products obsolete and unmarketable.

FactSet’s failure to attract and retain talented employees could have a [removed: material] [added: material,] adverse effect on the Company’s business.

Approximately [removed: 82.6%] [added: 84.1%] of the Company’s annual subscription value [added: (“ASV”)] is derived from its investment management clients.

FactSet’s sell-side clients that perform M&A advisory work, capital markets services and equity research, account for approximately [removed: 17.4%] [added: 15.9%] of its [removed: revenues.][added: ASV.]

The majority of [removed: mutual funds] [added: assets under management] are actively managed.

Analyzing market trends, the economy and the company-specific [removed: factor,] [added: factors,] active managers are constantly searching out information and gathering insights to help them make their investment decisions.

It is called passive because portfolio managers [removed: don't] [added: do not] make decisions about which securities to buy and sell; the managers merely follow the same methodology of constructing a portfolio as the index uses.

The main advantage of active management is the [removed: possibility] [added: expectation] that the managers will be able to outperform the index due to their superior skills.

In [removed: 2016,] [added: 2017,] approximately [removed: 33%] [added: 36%] of FactSet’s revenue related to operations located outside of the U.S. In addition, a significant number of its employees, [removed: 71%,] [added: 73%,] are located in offices outside of the U.S. The Company expects to continue its international growth, with international revenue accounting for an increased portion of total revenue in the future.

In particular, political tension has been increasing in Manila, the [removed: Philippines, due to comments and the behavior over the last few months of Rodrigo Duterte, President of the] Philippines.

[removed: Increasing civil] [added: Civil] unrest in Manila may make it difficult or impossible for FactSet to continue its operations there.

The Company faces exposure to adverse movements in foreign currency exchange rates as [removed: 71%] [added: 73%] of FactSet’s employees and [removed: 48%] [added: 54%] of its leased office space were located outside the U.S at August 31, [removed: 2016.][added: 2017.]

This exposure has increased over the past 12 months primarily as the Company’s international employee base has [removed: risen 17%] [added: increased, both organically and due to the fiscal 2017 acquisitions, by 613 net new employees, a 10% increase] since August 31, [removed: 2015.][added: 2016.]

FactSet’s non-U.S. dollar denominated revenues expected to be recognized over the next 12 months are estimated to be [removed: $20.0] [added: approximately $90] million, while its non-U.S. dollar denominated expenses are estimated to be [removed: $213.3] [added: approximately $300] million, resulting in a net foreign currency exposure of [removed: $193.3] [added: approximately $210] million.

This data misappropriation could damage the Company’s reputation and ultimately its business.

Approximately 84.1% of the Company’s ASV is derived from its investment management clients.

FactSet aggregates third party content from thousands of data suppliers, news sources, exchanges, brokers and contributors into its own dedicated online service, which clients access to perform their analyses.

The prosperity of these clients is tied to equity assets under management.

FactSet aggregates third party content from more than 220 data suppliers, 115 news sources and 85 exchanges.

FactSet [removed: is a leading provider of] [added: Research Systems Inc. (the “Company” or “FactSet”) provides] integrated financial information and [removed: big data] analytical applications to the global investment community.

We deliver insight and information to [added: financial] investment professionals through our analytics, service, content, and technology.

These professionals include portfolio managers, wealth managers, research and performance analysts, risk managers, [removed: sell-side equity] research professionals, investment bankers and fixed income professionals.

Investment management (buy-side) clients account for [removed: 82.6%] [added: 84.1%] of our annual subscription value and the remainder is derived from investment banking firms (sell-side) that perform mergers and acquisitions (“M&A”) advisory work, capital markets services and equity research.

[removed: 2016] [added: 2017] Year in Review

Fiscal [removed: 2016] [added: 2017] results continued our positive topline growth.

[removed: Revenue] [added: Organic revenue] was up [removed: 12.0%] [added: 6.9%] while annual subscription value (“ASV”) increased [removed: 8.8%] [added: 5.7%] organically.

This fiscal year marked our [removed: 38th] [added: 39th] year of operation, our [removed: 36th] [added: 37th] consecutive year of revenue growth and our [removed: 20th] [added: 21st] consecutive year of [added: adjusted] earnings growth as a public company.

[removed: The pressures our clients have experienced in the past 12 months have not abated and we] [added: We] have dedicated ourselves to helping [removed: them] [added: our clients] navigate an uncertain environment.

As of August 31, [removed: 2016,] [added: 2017,] ASV totaled [removed: $1.15] [added: $1.32] billion, an increase of [removed: $92.0] [added: $166.8] million over the prior year.

In addition, clients and users reached new highs of [removed: 3,092] [added: 4,744] and [removed: 65,655,] [added: 88,846,] respectively, in fiscal [removed: 2016.][added: 2017.]

We returned [removed: $431.0] [added: $341.9] million to stockholders in the form of share repurchases and [removed: dividends, an increase of 33.5% over the prior year.][added: dividends.]

[removed: This included $120.0 million relating to] [added: On July 1, 2016, we entered into] an accelerated share repurchase agreement (“ASR Agreement”) [removed: which we entered into in July 2016.][added: to repurchase $120.0 million of our common stock.]

[removed: Additionally, we sold our Market Metrics business in July 2016 and recognized an after-tax gain of $81.7 million in] [added: In] the fourth quarter of fiscal [removed: 2016.][added: 2016, the Company recognized tax expense of $30.8 million related to the gain on sale of our Market Metrics business.]

As a testament to our broadening suite of premium products and the strength of our business and service model FactSet was awarded “Best [removed: Overall Provider,” "Best Research Provider"] [added: Market Data Provider”] and "Best [added: Data] Analytics Provider" by Inside Market Data in [removed: May 2016,.][added: fiscal 2017.]

[removed: Other] [added: We were also named the “Best Performance Measurement System Provider” by Waters Technology and other] recognition included “Best Research and Analytics Tool” award for our wealth management tools at the annual Systems in the City Awards.

According to our fiscal [removed: 2016] [added: 2017] global client satisfaction survey, [removed: 96%] [added: 95%] of respondents were satisfied or very satisfied with FactSet’s support, consistent with the prior year.

During fiscal [removed: 2016,] [added: 2017,] over [removed: 1,600] [added: 2,500] clients attended live or online FactSet training [removed: sessions and we saw a 7% increase in online learning registration.][added: sessions, with over 54,000 eLearning courses taken.]

As of August 31, [removed: 2016,] [added: 2017,] employee headcount was [removed: 8,375,] [added: 9,074,] up [removed: 13.8%] [added: 8.3%] from a year ago.

In order to optimize costs, we have invested in expanding our footprint and talent pool in India and the Philippines, where we now have a combined workforce of over [removed: 4,800.][added: 5,000 people.]

Of our total employees, [removed: 2,407] [added: 2,493] were located in the U.S., [removed: 849] [added: 1,322] in Europe and [removed: 5,119] [added: 5,259] in Asia Pacific.

Approximately [removed: 55%] [added: 70%] of [removed: our] [added: the Company’s] employees were involved [removed: with content collection, 24% worked] in [removed: product development,] [added: company operations including content collection and] software and systems engineering, [removed: another 18% conducted] [added: 27% had a client focused role conducting] sales and consulting services and the remaining 3% provided administrative support.

| _(in millions, [removed: except client] [added: except_ _per share data__,_ _client] and user counts)_ | | [removed: 2016] [added: 2017] | | | | [removed: 2015] [added: 2016] | | | | Change | | |

| Operating Income | | $ | [removed: 349.7] [added: 352.1] | | | $ | [removed: 331.9] [added: 349.7] | | | | [removed: 5.4%] [added: 0.7] | [added: %] |

| Net Income | | $ | [removed: 338.8] [added: 258.3] | | | $ | [removed: 241.1] [added: 338.8] | | | | [removed: NM] [added: (23.8%] | [added: )] |

| Diluted EPS | | $ | [removed: 8.19] [added: 6.51] | | | $ | [removed: 5.71] [added: 8.19] | | | | [removed: NM] [added: (20.5] | [added: )] |

| Free Cash Flow(1) | | $ | [removed: 283.4] [added: 283.7] | | | $ | [removed: 280.8] [added: 283.4] | | | | [removed: 0.9%] [added: 0.1] | [added: %] |

| | _(2)_ | _ASV [removed: grew 8.8% organically] [added: grew_ _5.7%_ _organically] year [removed: over year._] [added: over_ _year._] _Organic ASV [removed: excludes ASV from acquisitions] [added: excludes_ _ASV from_ _acquisitions] and [removed: dispositions completed within] [added: dispositions_ _completed with__in] the last 12 months [removed: and the] [added: and_ _the] effects [removed: of foreign] [added: of_ _foreign] currency._ |

ASV totaled [removed: $1.15] [added: $1.32] billion at August 31, [removed: 2016,] [added: 2017,] up [removed: 8.8%] [added: 5.7%] organically over the prior year.

ASV from our U.S. operations was [removed: $754.4] [added: $825.1] million for the fourth quarter of [removed: 2016,] [added: 2017,] up [removed: 8.3%] [added: 4.9%] organically from a year ago.

International ASV totaled [removed: $395.5] [added: $491.5] million, up [removed: 10.7%] [added: 7.7%] organically from a year ago.

ASV from our international operations represented [removed: 34.4%] [added: 37.3%] of our Company-wide total, its highest level in FactSet history.

Our European organic ASV achieved a growth rate of [removed: 8.7%] [added: 6.1%] over the last 12 months while Asia Pacific organic ASV grew by [removed: 17.0%.][added: 12.8%.]

[removed: Overall,] [added: The buy-side] ASV [added: experienced a] growth [removed: for our buy-side business was 9.0%, down 40 basis points from the] [added: rate of 5.9% compared to] prior [removed: year period while our sell-side business experienced 7.6% growth,] [added: year,] down [removed: 180] [added: 440] basis points from [removed: the prior year period.][added: fiscal 2016.]

[removed: As] [added: Using the new definition, as] of August 31, [removed: 2016,] [added: 2017,] there were [removed: 65,655] [added: 88,846] professionals using FactSet, an increase of [removed: 3,450] [added: 4,910] users [removed: in] [added: or an equivalent 5.8% increase compared to] fiscal 2016.

Annual client retention as of August 31, [removed: 2016,] [added: 2017,] was greater than 95% [removed: of] ASV and [removed: 94%] [added: 91%] when expressed as a percentage of clients, [removed: consistent with] [added: down slightly from 92% in] the prior [removed: year, and despite market-related cancellations which impacted our ASV growth rates.][added: year.]

August 31, [removed: 2016,] [added: 2017,] our largest individual client accounted for 2% of total subscriptions, and annual subscriptions from our ten largest clients did not surpass 15% of total client subscriptions, consistent with August 31, [removed: 2015.][added: 2016.]

On May [removed: 6, 2016,] [added: 5, 2017,] our Board of Directors approved a [removed: 13.6%] [added: 12.0%] increase in the regular quarterly dividend beginning with the dividend payment [removed: in] [added: on] June [removed: 2016] [added: 2017] which was [removed: $0.50] [added: $0.56] per share, or [removed: $2.00] [added: $2.24] per share per annum.

In fiscal [removed: 2016,] [added: 2017,] we repurchased [removed: 1.5] [added: 1.6] million shares for [removed: $232.3] [added: $252.8] million [removed: under the existing share repurchase program] compared to [removed: 1.7] [added: 1.5] million shares for [removed: $252.8] [added: $232.3] million [added: in fiscal 2016] under the [added: our] existing share repurchase [removed: program during fiscal 2015.][added: program.]

[removed: Additionally, in] [added: On] July [added: 1,] 2016, we entered into an ASR Agreement to repurchase $120.0 million of our common stock.

In fiscal 2017, we continued to diversity our suite of products through strategic acquisitions and product investments, including Vermilion Holdings Limited (“Vermilion”) in the first quarter of fiscal 2017, along with both BI-SAM Technologies (“BISAM”) and Interactive Data Managed Solutions, renamed FactSet Digital Solutions, in the third quarter of fiscal 2017.

These acquisitions increased FactSet’s footprint in Europe, added to the Company’s robust product offerings, and provided end-to-end solutions to clients.

Portware also earned “Best Buy-side EMS” for the fourth time and Vermilion was recognized as “Best Client Reporting Solution” by FTF News Technology Innovation and “Best Client Reporting Solution” by WealthBriefing European Awards.

Excluding workforces acquired in fiscal 2017, headcount increased 2.4% from a year ago.

The increases were primarily in client-focused positions focused on client loyalty as evidenced by an annual client retention rate of greater than 95% of ASV as of August 31, 2017.

In May 2017, John W.

Wiseman was named the Company’s new Executive Vice President, Global Head of Sales and Client Solutions.

In this role, Mr. Wiseman reports directly to FactSet’s Chief Executive Officer, Phil Snow, and is responsible for all global sales and client service activities for the Company.

| Revenues | | $ | 1,221.2 | | | $ | 1,127.1 | | | | 8.3 | % |

| ASV | | $ | 1,316.6 | | | $ | 1,149.9 | | | | 14.5 | % (2)(3) |

| Clients | | | 4,744 | | | | 4,205 | | | | 12.8 | % (4) |

| Users | | | 88,846 | | | | 83,936 | | | | 5.8 | % (5) |

| | _(3)_ | _In the third quarter of fiscal 2017, FactSet changed its ASV definition to exclude professional services as these fees are not subscription based._ |

| | _(4)_ | _In the second quarter of fiscal 2017, FactSet changed its client count definition to capture clients with ASV greater than $10,000 versus the previous metric of clients with ASV greater than $24,000. The prior year client count was restated to reflect this change for comparison purposes._ |

| | _(5)_ | _In the second quarter of fiscal 2017, FactSet changed its user count definition to account for users from workstations previously not captured due to certain product bundling and also users of the StreetAccount web product. The prior year user count was restated to reflect this change for comparison purposes._ |

The increase in ASV was driven by growth across the majority of our key workflows including Analytics, Investment Banking, and Content and Technology Solutions (“CTS”).

Additionally, we have leveraged relationships with existing clients to increase year over year sales through cross-selling and upselling of our diversified product suite.

Buy-side clients accounted for 84.1% of ASV while the remainder derived from sell-side firms that perform mergers and acquisitions advisory work, capital markets services and equity research.

The sell-side ASV had a 4.6% growth rate, down 310 basis points from the prior year.

This substantial shift in ASV to international operations was due primarily to our recent acquisitions, which have significant sales and operations in Europe.

In the second quarter of fiscal 2017, FactSet changed its client count definition to capture clients with ASV greater than $10,000 versus the previous metric of clients with ASV greater than $24,000.

The prior year client count was restated to reflect this change for comparison purposes.

Our total client count was 4,744 as of August 31, 2017 representing an increase of 539 net new clients or an equivalent 12.8% increase over fiscal 2016, as a result of cross-selling within FactSet’s diverse product suite.

In the third quarter of fiscal 2017, FactSet changed its user count definition to account for users from workstations previously not captured due to certain product bundling and also users of the StreetAccount web product.

The prior year user count was restated to reflect this change for comparison purposes.

We repurchased 1.6 million shares for $252.8 million during fiscal 2017 under the our existing share repurchase program.

On May 5, 2017, our Board of Directors approved a 12.0% increase in the regular quarterly dividend, beginning with the dividend payment on June 2017, with an increase to $0.56 per share, or $2.24 per share per annum.

Over the last 12 months, we have returned a total of $341.9 million to stockholders in the form of dividends and share repurchases, funded by cash generated from operations.

The remainder of our capital expenditures was primarily for the build out of office space including $4.4 million at our Chicago location, $4.4 million at our New York locations and $2.7 million at our India locations.

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

Revenues in fiscal 2017 were $1,221.2 million, up 8.3% compared to fiscal 2016.

The increase in revenue was primarily driven by organic ASV growth, continued momentum for our multi-asset class analytic solutions, workstations, data feeds products and the additions to our product offerings from our fiscal 2017 acquisitions.

We have seen an increase in new business with solid wins from plan sponsors, hedge funds and wealth managers, as well as growing sales to existing clients through cross-selling opportunities.

Our recent acquisitions have also given rise to higher revenues from professional services fees.

Offsetting these positive factors, we experienced cancellations due to firm consolidations and failures.

Fiscal 2017 compared to Fiscal 2016

Our U.S. revenue growth reflects the performance of our analytic solutions, CTS, as well as revenue from our recent acquisitions.

Excluding the effects of acquisitions and dispositions completed in the last 12 months, organic revenues in the U.S. were up 6.2% compared to fiscal 2016.

Revenues from our U.S. operations accounted for 64.2% of our consolidated revenues during fiscal 2017, a decrease from 67.0% in the prior year as our recent acquisitions have mainly increased international revenue.

European revenues grew 19.0% year over year, which was attributable to solid growth in CTS, analytics, client price increases, and our recent acquisitions.

| --- | --- | --- |

Recent additions to our offering include a complete services solution focused on verifying, cleaning and loading portfolio data across asset classes, and an execution management system through our acquisition of Portware.

In 2016, we sought to strengthen and expand our core business model.

Our strategic acquisition of Portware in October 2015 has provided a new stream of revenue and growth.

Portware revenues have grown in double-digits since the acquisition and Portware is now break-even on an earnings per share basis.

The sale allowed us to sharpen our focus on our long-term growth drivers and our mission to deliver world-class insight and information through our analytics, service, content and technology.

Our investment in product, coupled with the acquisition of Portware, now allows us to address an increasingly greater percentage of our clients’ enterprise workflow.

Our robust Portfolio Analytics solutions have been the cornerstone of our growth in the middle office.

With a growing interest in passive investment instruments, such as exchange-traded funds (“ETFs”), our effort to build out our ETF content and analytics product suite has made significant strides in fiscal 2016.

We now have 29 ETFs in the marketplace based upon FactSet content and over 40 benchmarks.

The first FactSet branded ETF, the SPDR FactSet Innovative Technology ETF, launched in January 2016.

We were also named the “Best Data Analytics Provider” by Waters Technology in July 2016.

Portware also earned “Best Buy-side EMS” for the third time and was included on Global Finance’s first annual list of forex leaders, "The Innovators 2015 – Foreign Exchange."

Our reward for investing in a consulting group comprised of several hundred individuals is client loyalty, as evidenced by an annual client retention rate of greater than 95% of ASV as of August 31, 2016.

In fiscal 2016, FactSet employees made over 45,000 client consulting visits, over 182,000 consulting calls and handled over 282,000 client questions.

In addition, our new support desk in Manila, the Philippines handled over 5,000 client emails.

Excluding the acquired Portware workforce and employees of the divested Market Metrics business, headcount increased 13.4% from a year ago.

The increases were primarily in positions that differentiate us in the market – software engineering, client service and content.

Additionally, in fiscal 2016, we opened offices in Melbourne, Australia and Los Angeles, California.

We are proud to have received the following accolades during fiscal 2016:

| | ● | Ranked #89 on Fortune’s “100 Best Companies to Work For.” The only Connecticut-based company to make the list, we were recognized for our focus on career development and providing employees a variety of opportunities and experiences to learn. |

| | ● | Ranked #41 on Great Place to Work® “2016 Best Workplaces in the U.K.” The report highlighted our collaborative culture and marks our eighth appearance on the list. |

| | ● | Named as one of the “100 Best Workplaces for Women” and “Best Workplaces for Millennials” in the U.S. by Great Place to Work® |

| | ● | Named as one of the “Best Workplaces in France” |

| Revenues | | $ | 1,127.1 | | | $ | 1,006.8 | | | | 12.0% | |

| ASV | | $ | 1,149.9 | | | $ | 1,057.8 | | | | 8.7% | (2) |

| Clients | | | 3,092 | | | | 2,976 | | | | 3.9% | |

| Users | | | 65,655 | | | | 62,205 | | | | 5.5% | |

We have seen notable wins in both the sovereign wealth and investment management space and growth globally, with the addition of new clients in all three segments.

The decrease in the buy and sell-side growth rates can be attributed to an increase in market-related cancellations.

During fiscal 2016, we added 116 net new clients, increasing the number of clients by 3.9% over the prior year.

Our total client count was 3,092 as of August 31, 2016.

This net number reflects a reduction of 41 clients due to the sale of the Market Metrics business.

Combining our dividends and share repurchases, we returned $431.0 million to stockholders during fiscal 2016.

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

_Robust Demand for Analytics_

We saw increased demand for total portfolio risk analytics resulting in increased traction for our fixed income and multi-asset class, performance and risk offerings.

In fiscal 2016, we expanded our robust offering of analytics, models, stress testing and client reporting.

Our Portfolio Services offering supports our clients in integrating, cleansing and building strong analytics on top of their data.

This managed service is an example of how we have broadened our sources of revenue, while responding to client needs.

Over the next 12 months, our non-U.S. dollar denominated revenues expected to be recognized are estimated to be [removed: $20.0] [added: approximately $90] million while our non-U.S. dollar denominated expenses are [removed: $213.3] [added: approximately $300] million, which translates into a net foreign currency exposure of [removed: $193.3] [added: approximately $210] million per year.

[removed: | | ● | Indian Rupee -] [added: As of August 31, 2017, FactSet maintained] foreign currency forward contracts to hedge approximately 75% of [removed: our] [added: its] Indian Rupee exposure through the [removed: first] [added: third] quarter of fiscal 2019. [removed: |]

There were no other outstanding foreign currency forward contracts as of August 31, [removed: 2016.][added: 2017.]

A loss on derivatives of [removed: $0.5] [added: $2.9] million was recorded into operating income in fiscal [removed: 2016,] [added: 2017,] compared to a loss of [removed: $0.6] [added: $0.5] million a year ago.

A sensitivity analysis was performed based on the estimated fair value of all foreign currency forward contracts outstanding at August 31, [removed: 2016.][added: 2017.]

If the U.S. dollar had been 10% weaker, the fair value of outstanding foreign currency forward contracts would have increased by [removed: $7.1] [added: $5.4] million, which would have had an immaterial impact on our Consolidated Balance Sheet.

Had we not had any hedges in place as of August 31, [removed: 2016,] [added: 2017,] a hypothetical 10% weaker U.S. dollar against all foreign currencies from the quoted foreign currency exchange rates at August 31, [removed: 2016,] [added: 2017,] would result in a decrease in operating income by [removed: $18.2] [added: $20.3] million over the next 12 months.

A hypothetical 10% weaker U.S. dollar against all foreign currencies at August 31, [removed: 2016] [added: 2017] would increase the fair value of total assets by [removed: $29.5] [added: $69.5] million and equity by [removed: $26.6] [added: $61.9] million.

The fair market value of our cash and investments at August 31, [removed: 2016,] [added: 2017,] was [removed: $252.6] [added: $227.2] million.

As of August 31, [removed: 2016,] [added: 2017,] the fair value of our long-term debt was [removed: $300.0] [added: $575.0] million, which approximated its carrying amount [added: given its floating interest rate basis] and was determined based on quoted market prices for debt with a similar maturity.

The debt bears interest on the outstanding principal amount at a rate equal to [removed: 0.75% plus] the [removed: Eurodollar rate, which is equal to one-month LIBOR.][added: daily LIBOR rate plus 1.00%.]

During fiscal [removed: 2016] [added: 2017] we paid [removed: $3.1] [added: $8.4] million in interest on our outstanding Loan amount compared to [removed: $0.1] [added: $3.1] million in the prior year.

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 rate would result in a [removed: $0.8] [added: $1.4] million change in our annual interest expense.

3.8 billion.

As of August 31, 2016, we maintained the following foreign currency forward contracts to hedge our foreign currency exposure:

| | ● | British Pound Sterling - foreign currency forward contracts to hedge approximately 50% of our British Pound Sterling exposure through the fourth quarter of fiscal 2017. |

| --- | --- | --- |

As of August 31, 2016, the gross notional value of foreign currency forward contracts to purchase British Pound Sterling with U.S. dollars was £23.1 million.

4.2 billion

We hedge approximately 50% of our British Pound Sterling exposure through the fourth quarter of fiscal 2017, thus reducing our currency risk.

FactSet [added: Research Systems Inc. (the “Company” or “FactSet”)] provides integrated financial information and [removed: big data] analytical applications for the global investment community.

The Company delivers insight and information to [added: financial] investment professionals through its analytics, service, content, and technology.

These professionals include portfolio managers, wealth managers, research and performance analysts, risk managers, [removed: sell-side equity] research professionals, investment bankers, and fixed income professionals.

FactSet [removed: Research Systems Inc. (the “Company” or “FactSet”)] was founded in 1978 and has been publicly held since 1996.

The Company is dual listed on the New York Stock Exchange (“NYSE”) and the NASDAQ Stock Market (“NASDAQ”) under the symbol “FDS.” Fiscal [removed: 2016] [added: 2017] marked the Company’s [removed: 38th] [added: 39th] year of operation, its [removed: 36th] [added: 37th] consecutive year of revenue growth and its [removed: 20th] [added: 21st] consecutive year of [added: adjusted] earnings growth as a public company.

At August 31, [removed: 2016,] [added: 2017,] ASV was [removed: $1.15] [added: $1.32] billion, up [removed: 8.8%] [added: 5.7%] organically from a year ago.

The increase in ASV during fiscal [removed: 2016] [added: 2017] was [removed: primarily] driven by [added: growth across] the [removed: Analytics,] [added: Analytics and] Content & Technology Solutions [removed: (“CTS”), Research Management Solutions (“RMS”) and Portware businesses.][added: (“CTS”) product suites.]

During fiscal [removed: 2016,] [added: 2017,] FactSet added [removed: 116] [added: 539] net new clients, increasing the number of clients by [removed: 3.9%] [added: 12.8%] over the prior year.

In terms of users, [removed: 3,450] [added: 4,910] net new users were added during fiscal [removed: 2016.][added: 2017.]

The following [removed: charts] [added: chart] provide a snapshot [removed: view] of FactSet’s [added: historic] ASV [removed: growth over the past 10 fiscal years.][added: growth:]

[removed: |  |  |][added: ]

Senior management consists of executives who directly report to the CEO, comprising the Chief Financial Officer, Chief Operating Officer, Global Head of [removed: Sales,] [added: Sales and Client Solutions,] General Counsel, [added: and] Chief Human Resources [removed: Officer and three senior directors in charge of product strategy.][added: Officer.]

Senior management, along with the CEO, constitute FactSet’s chief operating decision making group [added: (“CODMG”)] and is responsible for making decisions about resources allocated [removed: amongst] [added: among] the operating segments based on actual results.

The [removed: U.S. segment services finance professionals including financial institutions throughout the Americas, while the] European and Asia Pacific segments service investment professionals located throughout Europe and the Asia Pacific region, respectively.

The European segment [removed: is headquartered in London, England and] maintains [removed: offices] [added: office locations] in [added: Bulgaria, Dubai, England,] France, Germany, Italy, [removed: Ireland,] Latvia, [removed: Luxembourg,] the Netherlands, Spain, [removed: South Africa, Sweden] and [removed: Dubai.][added: Switzerland.]

The Asia Pacific segment [removed: is headquartered in Tokyo, Japan with] [added: has] office locations in Australia, Hong Kong, [removed: Singapore] [added: India, Japan,] and [removed: Mumbai, India.][added: Singapore.]

There are no intersegment or intercompany sales of the FactSet [added: products and] services.

[removed: |  |  |  |][added:   ]

Analytics [added: Solutions]

FactSet Portfolio Analysis [added: (“PA”)] is a multi-asset class, global solution that helps investment professionals spend more time discovering [removed: alpha and less time managing their portfolios.][added: alpha.]

[removed: Portfolio Analysis] [added: PA] is an interactive tool that helps [removed: portfolio managers] [added: users] make smarter decisions with a flexible, multi-tile interface of reports and charts.

FactSet’s Multi-Asset Class [removed: (MAC)] [added: (“MAC”) risk] model helps users understand risk factors across different asset types and classes.

Additionally, the Company has enhanced its offering with client-requested functionality such as [removed: a linear MAC model,] fixed income [removed: optimization,] [added: optimization] and the [removed: DTS (Duration] [added: Duration] Times [removed: Spread)] [added: Spread (“DTS”)] attribution model.

Content and Technology Solutions [removed: (CTS)]

[removed: FactSet] [added: FactSet’s CTS business] is focused on delivering value to its clients in the way they want to consume it.

[removed: This] [added: CTS offerings include] delivery [removed: includes offering powerful analytics and comprehensive datasets through desktop, mobile] [added: of content] and [removed: web interfaces,] [added: analytics from the FactSet platform,] as well as giving clients direct access to insight and information outside of the [removed: Workstation] [added: workstation] through cloud-based application program interfaces [removed: (“APIs”), data feeds] [added: (“APIs”)] and white label solutions.

[removed: Buy Side][added: Buy-side]

[removed: This segment includes] [added: These clients include] portfolio managers, analysts, traders, wealth managers, performance teams and risk and compliance teams at a variety of firms, such as traditional asset managers, wealth advisors, hedge funds, insurance companies, plan sponsors and fund of funds.

As buy-side clients [added: continues to] shift towards multi-asset class investment strategies, FactSet is well positioned to be a partner in the space, given its ability to provide solutions across their entire workflow.

The buy-side ASV growth rate for fiscal [removed: 2016] [added: 2017] was [removed: 9.0%.][added: 5.9%.]

Buy-side clients accounted for [removed: 82.6%] [added: 84.1%] of ASV as of August 31, [removed: 2016.][added: 2017.]

[removed: Sell Side][added: Sell-side]

FactSet is a market leader [removed: within banking] [added: on the sell-side] and is continuing to expand beyond investment banking into various other parts of banking institutions.

The Company anticipates that future growth may come from the breadth of solutions FactSet provides to the [removed: sell side—across] [added: sell\-side across] analytics, content and technology.

Over the last few years, its emphasis has shifted to focus on selling more differentiated product offerings outside the workstation including StreetAccount, [removed: RMS, Portfolio Analytics] and [removed: Alpha Testing.][added: RMS.]

The sell-side ASV growth rate for fiscal [removed: 2016] [added: 2017] was [removed: 7.6%.][added: 4.6%.]

Sell-side clients accounted for [removed: 17.4%] [added: 15.9%] of ASV as of August 31, [removed: 2016.][added: 2017.]

[removed: Over the last 38 years,] [added: Since its founding,] FactSet has built a collaborative culture that recognizes and rewards innovation and offers employees a variety of opportunities and experiences.

FactSet’s employees are critical to its success and the reason [removed: it] [added: FactSet] continues to execute at a high level.

[removed: Its] [added: FactSet’s] focus on engaging and enabling employees to do their best [removed: work] [added: work,] is central to FactSet’s ability to deliver the best insight and information to clients [removed: around the globe.][added: globally.]

In fiscal 2017, FactSet and its wholly owned companies Vermilion Holdings Limited (“Vermilion”) and Portware LLC (“Portware”), won top honors in more than nine industry awards competitions, including “Best Market Data Provider” and “Best Analytics Provider” in the Inside Market Data and Inside Reference Data Awards.

In addition, Waters Rankings selected Vermilion for the second year in a row as the “Best Reporting System Provider.”

FactSet also earned top honors for its industry-leading service, winning “Best Client Services Solution” at the FTF News Technology Innovation Awards, Portware was honored as the “Best Buy-Side EMS” in the Markets Choice Awards, which recognize the best of the best across the institutional buy-side and sell-side: exchanges, sell-side trading desks, institutional asset owners, investment managers, and technology providers.

In fiscal 2017, the Company completed numerous strategic acquisitions, to broaden its suite of products and provide end-to-end solutions for its clients.

These acquisitions included the following:

| | ● | November 2016: Vermilion, a leading global provider of client reporting and communications software and services to the financial services industry. |

| | ● | March 2017: BISAM, a leading provider of portfolio performance and attribution, multi-asset risk, GIPS composites management and reporting, |

| | ● | April 2017: Interactive Data Managed Solutions business (“IDMS”), renamed to FactSet Digital Solutions, a managed solutions and digital portal provider helping wealth clients adapt to the industry’s digital transformation. |

FactSet’s operating segments are aligned with how the Company, including its CODMG, manages the business and the demographic markets in which FactSet serves.

The Company’s internal financial reporting structure is based on three segments; the U.S., Europe and Asia Pacific.

The U.S. segment services investment professionals including financial institutions throughout the Americas.

Research Solutions

FactSet’s Research business offers a powerful data solution that combines global coverage, deep history, and unparalleled transparency with thousands of FactSet-sourced and third-party databases integrated in one flexible platform.

The Research business has a strong focus on growing a number of users and clients types including investment banking, sell-side research, buy-side research, private equity, capital markets, investor relations, and media.

This Research business offerings comprise Core Applications, including Universal Screening, Company & Security Analytics, Industry and Markets, Filings, Ownership, Research, News and our industry\-leading Research Management Solutions (“RMS”).

Portfolio Management and Trading Solutions

FactSet’s Portfolio Management and Trading (“PMT”) solutions focus on workflows that are specific and unique for the front office.

This includes offering a multi-asset execution management system (“EMS”) platform as well as compliance and order management functionality.

These products are aimed at large asset managers, hedge funds and mid-market customers and combine automation and intelligent trading workflows.

With a focus on serving traders and portfolio managers, we will continue our growth in this market segment.

FactSet’s Analytics business addresses workflows around risk, performance and reporting.

FactSet’s Analytics business has been one of our strongest growth drivers.

Wealth Solutions

FactSet’s Wealth business creates solutions that are specific and unique for the wealth management industry and help with investment portfolio management, advisory services, financial planning and other financial services.

FactSet’s medium to long-term investment themes in the wealth business will aim to achieve market-leading positions or differentiate offerings by providing end to end solutions, focusing on non\-equity content and single security analytics, portfolio and risk analytics and digital strategy.

In fiscal 2017, FactSet was honored by the following recognition:

| | ● | Top Companies for Graduates to Work for in the UK by TheJobCrowd® for the fourth consecutive year |

| | ● | U.K.’s Best Workplaces from Great Place to Work® for the eighth consecutive year |

Excluding workforces acquired in fiscal 2017, headcount increased 2.4% from a year ago.

In May 2017, John W.

Wiseman was named the Company’s new Executive Vice President, Global Head of Sales and Client Solutions.

In this role, Mr. Wiseman reports directly to FactSet’s Chief Executive Officer, Phil Snow, and is responsible for all global sales and client service activities for the Company.

FactSet does not have a separate research and product development department, but rather the Product Development and Engineering departments work closely with the Sales function to identify areas of improvement with the goal of providing increased value to clients.

FactSet incurred $215.0 million of research and product development costs during fiscal 2017, which was comparable to its spend on similar development during fiscal years 2016 and 2015 respectively.

The Corporate Governance Guidelines and the charters of each of the committees of the Company’s Board of Directors, including the Audit Committee, Compensation and Talent Committee and Nominating and Corporate Governance Committee, are available on the Investor Relations section of the Company’s website.

| John W. Wiseman | 49 | Executive Vice President, Global Head of Sales and Client Solutions | 2017 |

_John W.

Wiseman_ _–_ _Executive Vice President, Global Head of Sales and Client Solutions._ Mr. Wiseman joined FactSet in 2004 as Vice President in the sales department.

During his tenure at FactSet, Mr. Wiseman held several positions of responsibility including Senior Vice President, Global Head of Strategic Partnerships & Alliances.

Prior to his experience with FactSet, Mr. Wiseman was a Senior Managing Director at Bear Stearns & Co. Inc. Mr. Wiseman received a B.A. in Political Science and Management Science from Duke University and a Master’s of Business Administration from the University of Edinburgh.

Recent additions to FactSet’s offering include a complete services solution focused on verifying, cleaning and loading portfolio data across asset classes, and an execution management system through its acquisition of Portware.

In fiscal 2016, FactSet earned recognition as the “Best Overall Provider” of market data, research and analytics from Inside Market Data (“IMD”).

It was named “Best Data Analytics Provider” in the annual rankings announced by Waters Technology.

FactSet was also honored with the “Best Research and Analytics Tool” award at the annual Systems in the City Awards presented in London by Goodacre UK.

The awards added to a long list of achievements for FactSet in fiscal 2016, including “Best Research Provider” and “Best Analytics Provider” by IMD in May 2016 and earning a spot for the eighth time as one of Fortune’s “100 Best Companies to Work For”.

In October 2015, FactSet completed its acquisition of Portware, LLC (“Portware”), an award-winning, multi-asset execution management system (“EMS”).

The addition of Portware enables FactSet to support client workflows in additional segments of the investment process.

Together, FactSet and Portware expect to provide the investment community with state-of-the-art analytic and execution applications across more of the portfolio lifecycle, from analyst to portfolio manager to trader.

FactSet also announced in July 2016 the sale of its market research business focused on advisor-sold investments and insurance, consisting of Market Metrics and Matrix-Data Limited (collectively “Market Metrics”).

The divestment of this business is consistent with the Company’s long-term strategic direction and commitment to delivering value to shareholders.

This net number reflects a reduction of 41 clients due to the sale of the Market Metrics business.

| --- | --- |

FactSet’s operations are organized into three reportable segments based on geographic business activities: the U.S., Europe and Asia Pacific.

Workstations

FactSet’s most widely known product is its flagship FactSet workstation, deployed on thousands of desks around the globe.

In fiscal 2016, user growth was 5.5%, and there are now more than 65,000 global FactSet users.

In the workstation, FactSet has focused on optimizing speed and responsiveness and on building out unique content sets.

Such unique content includes its StreetAccount news content, Revere Geographic Revenue data, and the addition of real time fixed income pricing through a third party partnership.

With increased regulatory scrutiny and regulations, FactSet RMS has also driven growth.

As one of the largest providers of RMS in the industry, FactSet is used by firms of all asset classes, from the startup hedge fund to the largest institutional asset managers, and from small endowments to the largest pensions and sovereign wealth funds.

FactSet RMS helps clients institutionalize and optimize their research workflow providing a solution that boosts cross-firm collaboration, helps create transparency to ensure compliance, and promotes business continuity.

FactSet helps to solve this need by integrating petabytes of data each day (from clients, FactSet’s own unique content and hundreds of third-party providers), as well as by offering multi-asset class analytics, performance, and risk.

The CTS suite includes a growing number of standardized data feeds that complement and mirror the data in the FactSet workstation.

These capabilities and data solutions are powering a growing number of workflows for the middle and front office.

Portware

Since FactSet’s acquisition of Portware in October 2015, the multi-asset EMS has continued to provide a leading trading platform technology.

In addition to being named the "Best FX trading platform technology" by Wall Street Letter, the FactSet-Portware acquisition was named the "Best M&A Deal" at Markets Media's Markets Choice Awards.

Both of these awards reinforce the strategic benefit of combining Portware’s innovative execution management expertise with FactSet’s integrated financial information and analytical applications.

Portware embeds in the middle of the buy-side trader workflow and integrates tightly with other key components to automate simpler trades, freeing traders to focus on more complex trades.

Since the acquisition, Portware client volume increased as did new client and broker connections.

Client Service and Support

At its core, FactSet is client centric and always has been.

FactSet partners with clients to help them work intelligently and more efficiently.

As client needs have changed, FactSet has evolved its business to meet those needs, and this shift has helped to fuel growth even in a challenging market.

FactSet prioritizes customer service and the client experience.

Clients have wide access to a team of consultants and product specialists.

They are able to leverage a wide range of combined industry knowledge and FactSet product experience to maximize the value of FactSet.

Client feedback is regularly incorporated into the product through constant enhancements and technology innovations.

This client-focused dedication helped FactSet's achieve a client retention rate of more than 95% of ASV, and 94% when expressed as a percentage of clients, consistent with the prior year.

FactSet is proud to have received the following accolades in fiscal 2016:

10-K 1 [removed: fds20161020_10k.htm] [added: fds20170831_10k.htm] FORM 10-K

[removed: |] ☒ [removed: |] Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 [removed: |]

[removed: For the fiscal year ended] [added: For The Fiscal Year Ended] August 31, [removed: 2016][added: 2017]

[removed: |] ☐ [removed: |] Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 [removed: |]

FACTSET [removed: RESEARCH] [added: RESEARCH] SYSTEMS INC.

[removed: |  |][added: ]

| Delaware (State or other jurisdiction of incorporation or organization) | [added: |] 13-3362547 (I.R.S. Employer Identification No.) |

601 Merritt [removed: 7, Norwalk,] [added: 7, Norwalk,] Connecticut 06851

Securities registered pursuant to Section 12(b) of the Act: Common [removed: Stock,] [added: Stock,] par value $0.01 per share

Name of each exchange on which registered: New York Stock [removed: Exchange and The] [added: Exchange and The] NASDAQ Stock Market LLC

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated [removed: filer or a] [added: filer,] smaller reporting [added: company, or an emerging growth] company.

See [removed: definition] [added: the definitions] of “large accelerated filer,” “accelerated [removed: filer” and] [added: filer,”] “smaller reporting [added: company,” and “emerging growth] company” in Rule 12b-2 of the Exchange Act.

| [added: |] Large accelerated filer ☒ | [removed: |] Accelerated filer ☐ |

| [added: |] Non-Accelerated filer ☐ (Do not check if a smaller reporting company) | [removed: |] Smaller Reporting Company ☐ |

The aggregate market value of the registrant’s common stock held by non-affiliates of the registrant based upon the closing price of a share of the registrant’s common stock on February [removed: 29, 2016,] [added: 28, 2017,] the last business day of the registrant’s most recently completed second fiscal quarter, as reported by the New York Stock Exchange on that date, was [removed: $6,049,252,249.][added: $6,862,902,916.]

The number of shares outstanding of the registrant’s common stock, as of October 25, [removed: 2016,] [added: 2017,] was [removed: 39,935,323.][added: 39,109,746.]

Portions of the registrant’s definitive Proxy Statement dated October [removed: 31, 2016,] [added: 30, 2017,] for the [removed: 2016] [added: 2017] Annual Meeting of Stockholders to be held on December [removed: 20, 2016,] [added: 19, 2017,] are incorporated by reference into Part III of this Annual Report on Form 10-K where indicated.

[removed: For The Fiscal Year Ended] [added: For the fiscal year ended] August 31, [removed: 2016][added: 2017]

[removed: |] PART I [removed: | | |]

| | | [added: | |] Page |

UNITED STATES

________________

__________________

| | | Emerging Growth Company ☐ |

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

| --- | --- | --- | --- | --- |

| | | | | |

| | | | | |

UNITED STATES

| --- | --- |

| --- |

| | | |

| | | | | |

| | | | | |

| | | | | |

| | | |

| PART II | | | [added: | |]

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities [removed: 17][added: 18]

Selected Financial Data [removed: 19][added: 20]

Management’s Discussion and Analysis of Financial Condition and Results of Operations [removed: 20][added: 22]

Quantitative and Qualitative Disclosures About Market Risk [removed: 40][added: 42]

Financial Statements and Supplementary Data [removed: 42][added: 44]

| | | | | |

| | | | | |

| | | | | |

| | | | | |

| | | | | |

| | | | | |

| | | | | |

| | | | | |

| | | |

Controls and Procedures [removed: 82][added: 85]

| | | | | |

| | | | | |

| | | |

| PART III | | | [added: | |]

Directors, Executive Officers and Corporate Governance [removed: 83][added: 86]

Executive Compensation [removed: 83][added: 86]

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters [removed: 83][added: 86]

Certain Relationships and Related Transactions, and Director Independence [removed: 83][added: 86]

Principal Accounting Fees and Services [removed: 83][added: 86]

| PART IV | | | [added: | |]

Exhibits, Financial Statement Schedules [removed: 84][added: 87]

| Signatures | | [removed: 86] | [added: | 89 |]

| | | | | |

| | | | | |

| | | | | |

| | | | | |

| | | | | |

| | | | | |

| | | | | |

| | | | | |

| | | | | |

| | | | | |

| | | | | |

| | | |

At August 31, [removed: 2016,] [added: 2017,] the Company leased approximately 202,000 square feet of office space at its headquarters in Norwalk, Connecticut.

Including new lease agreements executed during fiscal [removed: 2016,] [added: 2017,] the Company’s worldwide leased office space increased to approximately [removed: 1,072,000] [added: 1,143,000] square feet at August 31, [removed: 2016,] [added: 2017,] up [removed: 163,000] [added: 71,000] square feet, or [removed: 18%,] [added: 7%,] from August 31, [removed: 2015,] [added: 2016,] and includes properties at the following locations:

[removed: Additionally, the] [added: The] Company has data content collection [removed: centers] [added: offices] located in Hyderabad, India and Manila, the [removed: Philippines] [added: Philippines,] which benefit all of the Company’s operating segments.

The Company believes the amount of leased office space as of August 31, [removed: 2016] [added: 2017] is adequate for its current needs and that additional space is available for lease to meet any future needs.

| | Minneapolis, Minnesota |

| | Youngstown, Ohio |

| | Cologne, Germany |

| | Gloucester, England |

| | Madrid, Spain |

| | Sofia, Bulgaria |

| | Zurich, Switzerland |

Additionally, the Company has data centers that support its technological infrastructure located in Manchester, New Hampshire, Piscataway, New Jersey and Reston, Virginia.

| | Manchester, New Hampshire |

| | Youngtown, Ohio |

[removed: _Holders of] [added: _Holders_ _of] Record_ – As of October 25, [removed: 2016,] [added: 2017,] there were approximately [removed: 142,883] [added: 156,748] holders of record of FactSet common stock.

The closing price of FactSet’s common stock on October 25, [removed: 2016,] [added: 2017,] was [removed: $153.04] [added: $188.20] per share as reported on the NYSE.

_Dividends_ - In fiscal [removed: 2016,] [added: 2017,] the Company’s Board of Directors declared the following dividends:

| Declaration Date | | [removed: Dividends Per] [added: Dividends Per] Share of Common [removed: Stock] [added: Stock] | | | Type | Record Date | | [removed: Total] [added: Total] Amount (in [removed: thousands)] [added: thousands)] | | | Payment Date |

| August [removed: 5, 2016] [added: 10, 2017] | | $ | [removed: 0.50] [added: 0.56] | | Regular (cash) | August 31, [removed: 2016] [added: 2017] | | $ | [removed: 20,019] [added: 21,853] | | September [removed: 20, 2016] [added: 19, 2017] |

| May [removed: 6, 2016(1)] [added: 5, 2017(1)] | | $ | [removed: 0.50] [added: 0.56] | | Regular (cash) | May 31, [removed: 2016] [added: 2017] | | $ | [removed: 20,171] [added: 21,951] | | June [removed: 21, 2016] [added: 20, 2017] |

| February [removed: 5, 2016] [added: 6, 2017] | | $ | [removed: 0.44] [added: 0.50] | | Regular (cash) | February [removed: 29, 2016] [added: 28, 2017] | | $ | [removed: 18,044] [added: 19,709] | | March [removed: 15, 2016] [added: 21, 2017] |

| November [removed: 6, 2015] [added: 10, 2016] | | $ | [removed: 0.44] [added: 0.50] | | Regular (cash) | November 30, [removed: 2015] [added: 2016] | | $ | [removed: 18,208] [added: 19,852] | | December [removed: 15, 2015] [added: 20, 2016] |

| | _(1)_ | _On [removed: May 6, 2016,_] [added: May_ _5__, 201__7__,_] _FactSet’s_ _Board of Directors approved [removed: a 13.6%] [added: a_ _12.0__%] increase in the regular quarterly dividend beginning with the dividend payment in June [removed: 2016 which] [added: 201__7_ _which] was [removed: $0.50 per] [added: $0.5__6_ _per] share, or [removed: $2.00 per] [added: $2.__24_ _per] share per an__num._ |

There were no sales of unregistered equity securities in fiscal [removed: 2016.][added: 2017.]

The following table provides a month-to-month summary of the share repurchase activity under the current stock repurchase program during the three months ended August 31, [removed: 2016] [added: 2017] (in thousands, except per share data):

| Period | | [removed: Total] [added: Total] number of shares [removed: purchased] [added: purchased] | | | | [removed: Average] [added: Average] price paid per [removed: share] [added: share] | | | | [removed: Total] [added: Total] number [removed: of shares purchased as part] [added: of shares purchased as part] of [removed: publicly announced] [added: publicly announced] plans [removed: or programs] [added: or programs] | | | | [removed: Maximum] [added: Maximum] number of [removed: shares (or] [added: shares (or] approximate dollar [removed: value) that may yet be purchased under] [added: value) that may yet be purchased under] the plans [removed: or programs (1)] [added: or programs (1)] | | |

| _(1)_ | [removed: _Repurchases may be] [added: _Repurchases_ _may b__e] made from time to time in the open market and privately negotiated transactions, subject to market [removed: conditions. No] [added: conditions._ _No] minimum number of shares to be repurchased has been fixed. There is no timeframe to complete the repurchase program and it is expected that share repurchases will be paid using existing and future cash generated by operations._ |

_Securities Authorized for [removed: Issuance under] [added: Issuance_ _u__nder] Equity Compensation Plans_ _–_ Information regarding securities authorized for issuance under equity compensation plans is incorporated by reference from the Company’s Proxy Statement filed on October [removed: 31, 2016,] [added: 30, 2017,] for its [removed: 2016] [added: 2017] Annual Meeting of Stockholders.

The annual changes for the five-year period shown in the graph below are based on the assumption that $100 had been invested in FactSet common stock, the Standard & Poor’s 500 Index, the NYSE Composite Index and the Dow Jones U.S. Financial Services Index on August 31, [removed: 2011, and that all quarterly dividends were reinvested at the average of the closing stock prices at the beginning and end of the quarter.][added: 2012.]

The total cumulative dollar returns shown on the graph represent the value that such investments would have had on August 31, [removed: 2016.][added: 2017.]

[removed: |  |][added: ]

| Dow Jones U.S. Financial Services Index | | $ | [removed: 191] [added: 100] | | | $ | [removed: 190] [added: 136] | | | $ | [removed: 182] [added: 162] | | | $ | [removed: 153] [added: 168] | | | $ | [removed: 113] [added: 170] | | | $ | [removed: 100] [added: 213] | |

_The information contained in the above graph shall not been deemed to be soliciting material or filed or incorporated by reference in future filings with the SEC, or subject to the liabilities of Section 18 of the Securities Exchange Act of 1934, except to the extent that FactSet specifically_ _incorporates it by reference into a document [removed: filed] [added: f__iled] under the Securities [removed: Act of] [added: Act_ _of] 1933 or the Securities Exchange Act of 1934._

| | | First | | | | Second | | | | Third | | | | Fourth | | |

| 2017 | | | | | | | | | | | | | | | | |

| High | | $ | 183.17 | | | $ | 183.64 | | | $ | 182.56 | | | $ | 172.22 | |

| Low | | $ | 150.95 | | | $ | 157.56 | | | $ | 156.92 | | | $ | 155.09 | |

| June 2017 | | | — | | | | — | | | | — | | | $ | 288,195 | |

| July 2017 | | | 205,000 | | | $ | 164.07 | | | | 205,000 | | | $ | 254,561 | |

| August 2017 | | | 65,000 | | | $ | 160.76 | | | | 65,000 | | | $ | 244,111 | |

| | | | 270,000 | | | | | | | | 270,000 | | | | | |

Stock Performance Graph

| | | 2012 | | | | 2013 | | | | 2014 | | | | 2015 | | | | 2016 | | | | 2017 | | |

| FactSet Research Systems Inc. | | $ | 100 | | | $ | 112 | | | $ | 140 | | | $ | 173 | | | $ | 195 | | | $ | 172 | |

| S&P 500 Index | | $ | 100 | | | $ | 117 | | | $ | 143 | | | $ | 141 | | | $ | 155 | | | $ | 177 | |

| NYSE Composite Index | | $ | 100 | | | $ | 116 | | | $ | 139 | | | $ | 128 | | | $ | 135 | | | $ | 149 | |

| --- | --- |

| | | First | | | | Second | | | | Third | | | | Fourth | | |

| 2015 | | | | | | | | | | | | | | | | |

| High | | $ | 138.26 | | | $ | 158.29 | | | $ | 168.62 | | | $ | 174.03 | |

| Low | | $ | 110.77 | | | $ | 134.01 | | | $ | 149.68 | | | $ | 140.00 | |

| June 2016 | | | 35,000 | | | $ | 157.43 | | | | 35,000 | | | $ | 354,205 | |

| July 2016(2) | | | 163,000 | | | $ | 164.81 | | | | 163,000 | | | $ | 207,342 | |

| August 2016 | | | 60,000 | | | $ | 173.09 | | | | 60,000 | | | $ | 196,956 | |

| | | | 258,000 | | | | | | | | 258,000 | | | | | |

| _(2)_ | _In addition to purchases made under the Company’s existing repurchase program, on July 1, 2016 FactSet entered into an accelerated share repurchase agreement (the “ASR Agreement”) to repurchase $120.0 million of FactSet’s common stock. The Company received 595,607 shares of its common stock on that date which was approximately 80% of the total number of shares of common stock expected to be repurchased under the ASR Agreement. The final settlement of the ASR Agreement occur__red_ _in the first quarter of fiscal 2017_ _with FactSet receiving an additional 102,916 shares of its common stock._ |

Stock Performance Graph

| --- |

| | | | | | | | | | | | | | | | | | | | | | | | | |

| | | 2016 | | | | 2015 | | | | 2014 | | | | 2013 | | | | 2012 | | | | 2011 | | |

| FactSet Research Systems Inc. | | $ | 203 | | | $ | 180 | | | $ | 145 | | | $ | 116 | | | $ | 104 | | | $ | 100 | |

| S&P 500 Index | | $ | 178 | | | $ | 162 | | | $ | 164 | | | $ | 134 | | | $ | 115 | | | $ | 100 | |

| NYSE Composite Index | | $ | 143 | | | $ | 135 | | | $ | 147 | | | $ | 123 | | | $ | 106 | | | $ | 100 | |

| _(in thousands, except per share data)_ | | [removed: 2016] [added: 2017] | | | | [removed: 2015] [added: 2016] | | | | [removed: 2014] [added: 2015] | | | | [removed: 2013] [added: 2014] | | | | [removed: 2012] [added: 2013] | | |

| Revenues | | $ | [removed: 1,127,092] [added: 1,221,179] | | | $ | [removed: 1,006,768] [added: 1,127,092] | | | $ | [removed: 920,335] [added: 1,006,768] | | | $ | [removed: 858,112] [added: 920,335] | | | $ | [removed: 805,793] [added: 858,112] | |

| Operating income | | $ | [removed: 349,676] [added: 352,135] | (1) | | $ | [removed: 331,918] [added: 349,676] | (4) | | $ | [removed: 302,219] [added: 331,918] | [added: (7)] | | $ | [removed: 269,419] [added: 302,219] | [removed: (7)] | | $ | [removed: 272,990] [added: 269,419] | [added: (10)] |

| Provision for income taxes | | $ | [removed: 122,178] [added: 86,053] | | | $ | [removed: 92,703] [added: 122,178] | | | $ | [removed: 91,921] [added: 92,703] | | | $ | [removed: 72,273] [added: 91,921] | | | $ | [removed: 85,896] [added: 72,273] | |

| Net income | | $ | [removed: 338,815] [added: 258,259] | (2) | | $ | [removed: 241,051] [added: 338,815] | (5) | | $ | [removed: 211,543] [added: 241,051] | [added: (8)] | | $ | [removed: 198,637] [added: 211,543] | [removed: (8)] | | $ | [removed: 188,809] [added: 198,637] | [added: (11)] |

| Diluted earnings per common share | | $ | [removed: 8.19] [added: 6.51] | (3) | | $ | [removed: 5.71] [added: 8.19] | (6) | | $ | [removed: 4.92] [added: 5.71] | [added: (9)] | | $ | [removed: 4.45] [added: 4.92] | [removed: (9)] | | $ | [removed: 4.12] [added: 4.45] | [added: (12)] |

| Weighted average common shares (diluted) | | | [removed: 41,365] [added: 39,642] | | | | [removed: 42,235] [added: 41,365] | | | | [removed: 42,970] [added: 42,235] | | | | [removed: 44,624] [added: 42,970] | | | | [removed: 45,810] [added: 44,624] | |

| Cash dividends declared per common share | | $ | [removed: 1.88] [added: 2.12] | | | $ | [removed: 1.66] [added: 1.88] | | | $ | [removed: 1.48] [added: 1.66] | | | $ | [removed: 1.32] [added: 1.48] | | | $ | [removed: 1.16] [added: 1.32] | |

| _(in thousands)_ | | [removed: 2016] [added: 2017] | | | | [removed: 2015] [added: 2016] | | | | [removed: 2014] [added: 2015] | | | | [removed: 2013] [added: 2014] | | | | [removed: 2012] [added: 2013] | | |

| Cash and cash equivalents | | $ | [removed: 228,407] [added: 194,731] | | | $ | [removed: 158,914] [added: 228,407] | | | $ | [removed: 116,378] [added: 158,914] | | | $ | [removed: 196,627] [added: 116,378] | | | $ | [removed: 189,044] [added: 196,627] | |

| Accounts receivable, net of reserves | | $ | [removed: 97,797] [added: 148,331] | | | $ | [removed: 95,064] [added: 97,797] | | | $ | [removed: 90,354] [added: 95,064] | | | $ | [removed: 73,290] [added: 90,354] | | | $ | [removed: 74,251] [added: 73,290] | |

| Goodwill and intangible assets, net | | $ | [removed: 546,076] [added: 881,103] | | | $ | [removed: 348,339] [added: 546,076] | | | $ | [removed: 327,463] [added: 348,339] | | | $ | [removed: 280,796] [added: 327,463] | | | $ | [removed: 289,162] [added: 280,796] | |

| Total assets | | $ | [removed: 1,019,161] [added: 1,413,315] | | | $ | [removed: 736,671] [added: 1,019,161] | | | $ | [removed: 663,212] [added: 736,671] | | | $ | [removed: 690,197] [added: 663,212] | | | $ | [removed: 694,143] [added: 690,197] | |

| Non-current liabilities | | $ | [removed: 343,570] [added: 652,485] | | | $ | [removed: 65,307] [added: 343,570] | | | $ | [removed: 24,839] [added: 65,307] | | | $ | [removed: 30,165] [added: 24,839] | | | $ | [removed: 28,703] [added: 30,165] | |

| Total stockholders’ equity | | $ | [removed: 517,381] [added: 559,691] | | | $ | [removed: 531,584] [added: 517,381] | | | $ | [removed: 511,082] [added: 531,584] | | | $ | [removed: 541,779] [added: 511,082] | | | $ | [removed: 552,264] [added: 541,779] | |

| [removed: (1)] [added: (4)] | Operating income in fiscal 2016 includes pre-tax charges of $4.6 million related primarily to legal matters, $2.8 million from restructuring actions initiated by the Company and $1.8 million related to a change in the vesting of performance-based equity options. |

| [removed: (2)] [added: (5)] | Fiscal 2016 net income includes $3.3 million (after-tax) of non-recurring items related primarily to legal matters, $2.0 million (after-tax) from restructuring actions initiated by the Company, $1.2 million (after-tax) related to a change in the vesting of performance-based equity instruments, income tax benefits of $10.5 million primarily from the permanent reenactment of the U.S. Federal R&D Tax Credit, finalizing [removed: prior year] [added: the fiscal 2015] tax returns and other discrete items and a gain of $81.7 million (after-tax) related to the sale of FactSet’s Market Metrics business in July 2016. |

| [removed: (3)] [added: (6)] | Diluted EPS for fiscal 2016 includes the net effect of a $2.01 increase in diluted EPS from the gain on sale and a $0.25 increase in diluted EPS from the income tax benefits, partially offset by a $0.08 decrease from the non-recurring items related primarily to legal matters, a $0.05 decrease from the restructuring actions and a $0.03 decrease from a change in the vesting of performance-based equity instruments. |

| [removed: (4)] [added: (7)] | Operating income in fiscal 2015 includes pre-tax charges of $3.0 million related to the vesting of performance-based equity instruments and $3.2 million primarily from changes in the senior leadership responsible for the Company’s [removed: salesforce.] [added: sales force.] |

| [removed: (5)] [added: (8)] | Fiscal 2015 net income includes $2.1 million (after-tax) of incremental expenses related to the vesting of performance-based equity instruments, $2.2 million (after-tax) related to the changes in the senior leadership responsible for the Company’s [removed: salesforce] [added: sales force] and income tax benefits of $8.8 million primarily from the reenactment of the U.S. Federal R&D Tax Credit in December 2014, finalizing [removed: prior year] [added: the fiscal 2014] tax returns and other discrete items. |

| [removed: (6)] [added: (9)] | Diluted EPS for fiscal 2015 includes the net effect of a $0.21 increase in diluted EPS from the income tax benefits partially offset by a $0.05 decrease from the vesting of performance-based equity instruments and a $0.05 decrease from the changes in the senior leadership responsible for the Company’s [removed: salesforce.] [added: sales force.] |

| [removed: (7)] [added: (10)] | Operating income for fiscal 2013 includes pre-tax charges totaling $18.3 million related to the vesting of performance-based stock options granted in connection with the acquisitions of Market Metrics and StreetAccount. |

| [removed: (8)] [added: (11)] | Fiscal 2013 net income includes $12.9 million (after-tax) of incremental expenses related to the vesting of performance-based stock options granted in connection with the acquisitions of Market Metrics and StreetAccount and income tax benefits of $7.2 million primarily from the reenactment of the U.S. Federal R&D Tax Credit in January 2013, and finalizing [removed: prior year] [added: the fiscal 2012] tax returns. |

| [removed: (9)] [added: (12)] | Diluted EPS for fiscal 2013 includes the net effect of a $0.29 decrease from the vesting of performance-based options, partially offset by a $0.16 increase in diluted EPS from the income tax benefits. |

| (1) | Operating income in fiscal 2017 includes pre-tax charges of $5.6 million related to modifications of certain share-based compensation grants $5.0 million related to restructuring actions initiated by the Company and $7.4 million of other non-recurring expenses related primarily to the BISAM and FactSet Digital Solutions acquisitions. |

| (2) | Fiscal 2017 net income includes $4.2 million (after-tax) related to modifications of certain share-based compensation grants, $3.7 million (after-tax) related to restructuring actions initiated by the Company and $5.5 million (after-tax) of other non-recurring expenses related primarily to the BISAM and FactSet Digital Solutions acquisitions. Fiscal 2017 net income also includes a loss of $0.9 million (after-tax) from the final working capital adjustment related to sale of FactSet’s Market Metrics business in the fourth quarter of fiscal 2016. These charges were offset by income tax benefits of $1.9 million related primarily to finalizing prior year tax returns and other discrete items. |

| (3) | Diluted EPS for fiscal 2017 includes a $0.11 decrease in diluted EPS from the modifications of certain share-based compensation grants, a $0.09 decrease from the restructuring actions, a $0.13 decrease from the other non-recurring items related primarily to the BISAM and FactSet Digital Solutions acquisitions and $0.02 decrease from the working capital adjustment, partially offset by a $0.05 increase in diluted EPS from the income tax benefits. |

| --- | --- |

| | |

| | |

| Consolidated Financial Statements: | [added: |] Page |

| Management’s Statement of Responsibility for Financial Statements | [removed: 43] | [added: 45 |]

| Management’s Report on Internal Control over Financial Reporting | [removed: 43] | [added: 45 |]

| Reports of Independent Registered Public Accounting Firms | [removed: 44-45] | [added: 46-47 |]

| Consolidated Statements of Income for the years ended August 31, [removed: 2016, 2015] [added: 2017, 2016] and [removed: 2014] [added: 2015] | [removed: 46] | [added: 48 |]

| Consolidated Statements of Comprehensive Income for the years ended August 31, [removed: 2016, 2015] [added: 2017, 2016] and [removed: 2014] [added: 2015] | [removed: 47] | [added: 49 |]

| Consolidated Balance Sheets at August 31, [removed: 2016] [added: 2017] and [removed: 2015] [added: 2016] | [removed: 48] | [added: 50 |]

| Consolidated Statements of Cash Flows for the years ended August 31, [removed: 2016, 2015] [added: 2017, 2016] and [removed: 2014] [added: 2015] | [removed: 49] | [added: 51 |]

| Consolidated Statements of Changes in Stockholders’ Equity for the years ended August 31, [removed: 2016, 2015] [added: 2017, 2016] and [removed: 2014] [added: 2015] | [removed: 50] | [added: 52 |]

| Notes to the Consolidated Financial Statements | [removed: 51] | [added: 53 |]

| Financial Statement Schedule: | | [added: |]

| Schedule II – Valuation and Qualifying Accounts | [removed: 84] | [added: 87 |]

In compliance with the Sarbanes-Oxley Act of 2002, FactSet assessed its internal control over financial reporting as of August 31, [removed: 2016,] [added: 2017,] and issued a report (see below).

Management (with the participation of the principal executive officer and principal 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 except for the internal controls of [removed: Portware LLC] [added: BI-SAM Technologies, FactSet Digital Solutions and Vermilion Holdings Limited] which [added: (in aggregate)] constituted [removed: 2.1%] [added: 4.8%] of net assets [added: (excluding goodwill and intangible assets)] as of August 31, [removed: 2016] [added: 2017] and [removed: 3.4%] [added: 4.5%] of revenues for the year then [removed: ended .][added: ended.]

Based on this evaluation, management concluded that FactSet’s internal control over financial reporting was effective as of August 31, [removed: 2016.][added: 2017.]

We have audited the accompanying consolidated balance sheets of FactSet Research Systems Inc. as of August 31, [removed: 2016] [added: 2017] and [removed: 2015,] [added: 2016,] and the related consolidated statements of income, comprehensive income, stockholders' equity and cash flows for each of the three years in the period ended August 31, [removed: 2016.][added: 2017.]

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of FactSet Research Systems Inc. at August 31, [removed: 2016] [added: 2017] and [removed: 2015,] [added: 2016,] and the consolidated results of its operations and its cash flows for each of the three years in the period ended August 31, [removed: 2016,] [added: 2017,] in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), FactSet Research Systems Inc.'s internal control over financial reporting as of August 31, [removed: 2016,] [added: 2017,] 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 [removed: 31, 2016] [added: 30, 2017] expressed an unqualified opinion thereon.

We have audited FactSet Research Systems Inc.’s internal control over financial reporting as of August 31, [removed: 2016,] [added: 2017,] based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (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 [removed: Portware, LLC, which is included in the 2016 consolidated financial statements of] [added: BI-SAM Technologies,] FactSet [removed: Research Systems Inc.] [added: Digital Solutions] and [added: Vermilion Holdings Limited, which in aggregate,] constituted [removed: 2.1%] [added: 4.8%] of net assets [added: (excluding goodwill and intangible assets)] as of August 31, [removed: 2016] [added: 2017] and [removed: 3.4%] [added: 4.5%] of revenues for the year then ended.

Our audit of internal control over financial reporting of FactSet Research Systems Inc. also did not include an evaluation of the internal control over financial reporting of [removed: Portware, LLC.][added: BI-SAM Technologies, FactSet Digital Solutions and Vermilion Holdings Limited.]

In our opinion, FactSet Research Systems Inc. maintained, in all material respects, effective internal control over financial reporting as of August 31, [removed: 2016,] [added: 2017,] based on the COSO criteria.

| _(In thousands, except per share data)_ | | [removed: 2016] [added: 2017] | | | | [removed: 2015] [added: 2016] | | | | [removed: 2014] [added: 2015] | | |

| Revenues | | $ | [removed: 1,127,092] [added: 1,221,179] | | | $ | [removed: 1,006,768] [added: 1,127,092] | | | $ | [removed: 920,335] [added: 1,006,768] | |

| Cost of services | | | [removed: 487,409] [added: 566,580] | | | | [removed: 405,339] [added: 487,409] | | | | [removed: 353,686] [added: 405,339] | |

| Selling, general and administrative | | | [removed: 290,007] [added: 302,464] | | | | [removed: 269,511] [added: 290,007] | | | | [removed: 264,430] [added: 269,511] | |

| Total operating expenses | | | [removed: 777,416] [added: 869,044] | | | | [removed: 674,850] [added: 777,416] | | | | [removed: 618,116] [added: 674,850] | |

| Operating income | | | [removed: 349,676] [added: 352,135] | | | | [removed: 331,918] [added: 349,676] | | | | [removed: 302,219] [added: 331,918] | |

| Other [removed: income] (expense) [added: income] | | | | | | | | | | | | |

| [removed: Gain] [added: (Loss) gain] on sale of business | | | [removed: 112,453] [added: (1,223] | [added: )] | | | [removed: —] [added: 112,453] | | | | — | |

| Interest (expense), net of interest income | | | [removed: (1,136] [added: (6,600] | ) | | | [removed: 1,836] [added: (1,136] | [added: )] | | | [removed: 1,245] [added: 1,836] | |

| Total other [added: (expense)] income | | | [removed: 111,317] [added: (7,823] | [added: )] | | | [removed: 1,836] [added: 111,317] | | | | [removed: 1,245] [added: 1,836] | |

| Income before income taxes | | | [removed: 460,993] [added: 344,312] | | | | [removed: 333,754] [added: 460,993] | | | | [removed: 303,464] [added: 333,754] | |

| Provision for income taxes | | | [removed: 122,178] [added: 86,053] | | | | [removed: 92,703] [added: 122,178] | | | | [removed: 91,921] [added: 92,703] | |

| Net income | | $ | [removed: 338,815] [added: 258,259] | | | $ | [removed: 241,051] [added: 338,815] | | | $ | [removed: 211,543] [added: 241,051] | |

| Basic earnings per common share | | $ | [removed: 8.29] [added: 6.55] | | | $ | [removed: 5.80] [added: 8.29] | | | $ | [removed: 4.98] [added: 5.80] | |

| Diluted earnings per common share | | $ | [removed: 8.19] [added: 6.51] | | | $ | [removed: 5.71] [added: 8.19] | | | $ | [removed: 4.92] [added: 5.71] | |

| Basic weighted average common shares | | | [removed: 40,880] [added: 39,444] | | | | [removed: 41,572] [added: 40,880] | | | | [removed: 42,436] [added: 41,572] | |

| Diluted weighted average common shares | | | [removed: 41,365] [added: 39,642] | | | | [removed: 42,235] [added: 41,365] | | | | [removed: 42,970] [added: 42,235] | |

[removed: _The] [added: _T__he] accompanying notes are an integral part of these consolidated financial statements._

| | | |

| | | |

| | | |

| October 30, 2017 | October 30, 2017 |

October 30, 2017

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of FactSet Research Systems Inc. as of August 31, 2017 and 2016, and the related statements of income, comprehensive income, stockholders' equity and cash flows for each of the three years in the period ended August 31, 2017 of FactSet Research Systems Inc. and our report dated October 30, 2017, expressed an unqualified opinion thereon.

October 30, 2017

| Cash and cash equivalents | | $ | 194,731 | | | $ | 228,407 | |

| Deferred fees | | | 3,921 | | | | — | |

| Net income | | $ | 258,259 | | | $ | 338,815 | | | $ | 241,051 | |

| Repayment of debt | | | (365,000 | ) | | | — | | | | — | |

| Sale of business | | | (1,223 | ) | | | — | | | | — | |

| Stock-based compensation expense | | | 34,183 | | | | 29,793 | | | | 26,371 | |

| Tax benefits from share-based payment arrangements | | | 10,331 | | | | 18,205 | | | | 28,948 | |

| Accelerated share repurchase | | | 24,000 | | | | (24,000 | ) | | | — | |

| Net income | | | 258,259 | | | | 338,815 | | | | 241,051 | |

| Net income | | | 258,259 | | | | 338,815 | | | | 241,051 | |

| Purchases of common stock upon restricted stock vesting | | | (7,847 | ) | | | (4,544 | ) | | | (3,141 | ) |

| Stock-based compensation expense | | | 34,183 | | | | 29,793 | | | | 26,371 | |

| Tax benefits from share-based payment arrangements | | | 10,331 | | | | 18,205 | | | | 28,948 | |

| Foreign currency translation adjustments | | | 28,816 | | | | (23,644 | ) | | | (25,263 | ) |

| Stock-based compensation adjustment associated with disposition | | | — | | | | (942 | ) | | | — | |

| Net unrealized (loss) gain on cash flow hedges, net of tax | | | 5,017 | | | | (857 | ) | | | (868 | ) |

| Dividends | | | (83,363 | ) | | | (76,539 | ) | | | (68,904 | ) |

Research and Product Development Costs

FactSet does not have a separate research and product development department, but rather the Product Development and Engineering departments work closely with the Sales function to identify areas of improvement with the goal of providing increased value to clients.

As such, research and product development costs relate to the salary and benefits for the Company’s product development, software engineering and technical support staff and, as such, these costs are expensed when incurred within cost of services as employee compensation.

The Company expects to allocate a similar percentage of its workforce in future years in order to continue to develop new products and enhancements, respond quickly to market changes and meet the needs of its clients efficiently.

FactSet incurred $215.0 million of research and product development costs during fiscal 2017, which was comparable to its spend on similar development during fiscal years 2016 and 2015 respectively.

Investments also include mutual funds, which FactSet may withdraw from at any time, as such, they are presented as Investments (short-term) on the Consolidated Balance Sheets.

As of the beginning of fiscal 2017, FactSet implemented all applicable new accounting standards and updates issued by the Financial Accounting Standards Board (“FASB”) that were in effect.

The Company believes that the adoption of this accounting standard will increase the volatility within our provision for income taxes, as all excess tax benefits or deficiencies related to share-based payments that were previously reported within equity will now be recognized in the statement of income.

In addition, excess tax benefits were historically reflected as a financing activity in the statements of cash flows, and after adoption, will be included within operating activities.

Share-based payment expense will continue to reflect estimated forfeitures of share-based payment awards.

The Company is unable to quantify the impact on the adoption of this standard in fiscal 2018 due to the amount of variables that impact the calculation of the excess tax benefits, including the future stock price of FactSet and the volume of employee stock option exercises.

In May 2017, the FASB issued an accounting standard update, which amends the scope of modification accounting for share-based payment arrangements.

The guidance focuses on changes to the terms or conditions of share-based payment awards that would require the application of modification accounting and specifies that an entity would not apply modification accounting if the fair value, vesting conditions and classification of the awards are the same immediately before and after the modification.

Income Taxes on Intra-Entity Transfers of Assets

In October 2016, the FASB issued an accounting standard update which removes the prohibition against the immediate recognition of the current and deferred income tax effects of intra-entity transfers of assets other than inventory.

The guidance is intended to reduce diversity in practice related to the tax consequences of certain types of intra-entity asset transfers, particularly those involving intellectual property.

| | |

| October 31, 2016 | October 31, 2016 |

October 31, 2016

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | |

| Property, equipment and leasehold improvements, at cost | | | 253,274 | | | | 213,279 | |

| Cash and cash equivalents at beginning of period | | | 158,914 | | | | 116,378 | | | | 196,627 | |

| Retirement of treasury stock | | | — | | | | — | | | | — | |

Recent additions to FactSet’s offering include a complete services solution focused on verifying, cleaning and loading portfolio data across asset classes, and an execution management system through its acquisition of Portware.

Reporting Discontinued Operations

In April 2014, the FASB issued an accounting standard update that changes the criteria for reporting discontinued operations.

Under the accounting standard update, a disposal of a component of an entity or a group of components of an entity is required to be reported in discontinued operations if the disposal represents a strategic shift that has, or will have, a major effect on an entity's operations and financial results when either it qualifies as held for sale, disposed of by sale, or disposed of other than by sale.

Recent Accounting Standards or Updates Not Yet Effective

Going Concern

In August 2014, the FASB issued an accounting standard update that requires management to evaluate and disclose whether there are conditions and events that raise substantial doubt about an entity’s ability to continue as a going concern within one year after financial statements are issued.

The evaluation and disclosure will be required to be made for both annual and interim reporting periods, if applicable, along with an evaluation as to whether management’s plans alleviate that doubt.

Income Statement Presentation – Extraordinary and Unusual Items

In January 2015, the FASB issued an accounting standard update that eliminates from GAAP the concept of extraordinary items.

The standard primarily involves presentation and disclosure and, therefore, is not expected to have a material impact on the Company’s financial condition, results of operations or its cash flows.

Simplification Guidance on Debt Issuance Costs

In April 2015, the FASB issued an accounting standard update which changes the presentation of debt issuance costs in the applicable financial statements.

Under the accounting standard update, an entity should present such costs in the balance sheet as a direct deduction from the related debt liability rather than as an asset.

Amortization of the costs is reported as interest expense.

In August 2015, the FASB issued an accounting standard update to amend the previous guidance issued in April 2015 and address debt issuance costs related to line-of-credit arrangements.

The accounting standard update allows an entity to present debt issuance costs related to a line-of-credit as an asset and subsequently amortize the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the arrangement.

This accounting standard update did not impact the effective date of the previously issued guidance and it will not have a material impact on the Company’s consolidated financial statements.

Customers’ Accounting for Cloud Computing Costs

In April 2015, the FASB issued an accounting standard update to provide guidance on a customer’s accounting for cloud computing costs.

Under the accounting standard update, a customer must determine whether a cloud computing arrangement contains a software license.

If so, the customer would account for the fees related to the software license element in a manner consistent with internal-use software guidance.

Simplification of the Accounting for Measurement-Period Adjustments

In September 2015, the FASB issued an accounting standard update to simplify the accounting for measurement-period adjustments related to a business combination.

Under the accounting standard update, an acquirer must recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined.

The accounting standard update also requires acquirers to present separately on the face of the income statement, or disclose in the notes, the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date.

| --- | --- | --- |

| | ● | _British Pound Sterling_ - foreign currency forward contracts to hedge approximately 50% of its British Pound Sterling exposure through the fourth quarter of fiscal 2017. |

| | ● | _Indian Rupee_ - foreign currency forward contracts to hedge approximately 75% of its Indian Rupee exposure through the first quarter of fiscal 2019. |

| Euro | | | — | | | | 20,263 | | | | — | | | | 143 | |

The gross notional value of foreign currency forward contracts to purchase Indian Rupees with U.S. dollars was Rs.

There have been no changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fourth quarter of fiscal [removed: 2016] [added: 2017] that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Refer to Note 8, [removed: _Business Combinations_,] [added: Business Combinations,] in the Notes to the Consolidated Financial Statements for further discussion of the [removed: acquisition.][added: acquisitions.]

[removed: The Company is] [added: We are] currently in the process of integrating the internal controls and procedures of [removed: Portware] [added: Vermilion and BISAM] into [removed: its] [added: our] internal controls over financial reporting.

As provided under the Sarbanes-Oxley Act of 2002 and the applicable rules and regulations of the Securities and Exchange Commission, [removed: FactSet] [added: we] will include the internal controls and procedures of [removed: Portware] [added: Vermilion and BISAM] in [removed: its] [added: our] annual assessment of the effectiveness of [removed: its] [added: our] internal control over financial reporting for [removed: the 2017] [added: our 2018] fiscal year.

Management assessed the effectiveness of the Company’s internal control over financial reporting as of August 31, [removed: 2016,] [added: 2017,] except for the internal controls of [removed: Portware which] [added: BISAM, FactSet Digital Solutions and Vermilion which, in aggregate,] constituted [removed: 2.1%] [added: 4.8%] of net assets [added: (excluding goodwill] and [removed: 3.4%] [added: intangible assets) and 4.5%] of revenues as included in FactSet’s Consolidated Financial Statements for the year ended August 31, [removed: 2016.][added: 2017.]

Based on this assessment and those criteria, management believes that the Company maintained effective internal control over financial reporting as of August 31, [removed: 2016.][added: 2017.]

See Management’s Report on Internal Control over Financial Reporting under Item 8 on page [removed: 45.][added: 44.]

See Report of Independent Registered Public Accounting Firm under Item 8 on page [removed: 47.][added: 46.]

In fiscal 2017, we acquired BI-SAM Technologies (“BISAM”), FactSet Digital Solutions and Vermilion Holdings Limited (“Vermilion”).

In October 2015, FactSet acquired Portware, LLC (“Portware”).

The information required by this item relating to FactSet’s directors and nominees, regarding compliance with Section 16(a) of the Securities Act of 1934, and regarding its Audit Committee is included under the captions “Corporate Governance” and “Security Ownership of Certain Beneficial Owners and Management” and contained in the definitive Proxy Statement dated October [removed: 31, 2016,] [added: 30, 2017,] all of which information is incorporated herein by reference.

Pursuant to General Instruction G(3) of Form 10-K, the information required by this item relating to FactSet’s executive officers is included under the caption “Executive Officers” of the Company’s definitive Proxy Statement dated October [removed: 31, 2016,] [added: 30, 2017,] all of which information is incorporated herein by reference.

This code of ethics, which consists of the “Code of Ethical Conduct for Financial Managers,” is posted on FactSet’s [removed: website, along with the charters of committees of its Board of Directors.][added: website.]

The Corporate Governance Guidelines and the charters of committees of its Board of Directors, including the Audit Committee, Compensation and Talent Committee and Nominating and Corporate Governance Committee are also available on FactSet’s website.

The information required by this item relating to FactSet’s executive compensation is included under the caption “Executive Compensation” contained in the definitive Proxy Statement dated October [removed: 31, 2016,] [added: 30, 2017,] all of which information is incorporated herein by reference.

The information required by this item relating to security ownership of certain beneficial owners and management is included under the caption “Security Ownership of Certain Beneficial Owners and Management” and the information required by this item relating to securities authorized for issuance under equity compensation plans is included under the caption “Equity Compensation Plan Information,” in the definitive Proxy Statement dated October [removed: 31, 2016,] [added: 30, 2017,] all of which information is incorporated herein by reference.

The information required by this item relating to review, approval or ratification of transactions with related persons is included under the caption “Certain Relationships and Related Transactions” and the information required by this item relating to director independence is included under the caption “Corporate Governance” contained in the definitive Proxy Statement dated October [removed: 31, 2016,] [added: 30, 2017,] all of which information is incorporated herein by reference.

The information required by this item is included under the caption “Proposal 2: Ratification of Independent Registered Public Accounting Firm” in the definitive Proxy Statement dated October [removed: 31, 2016,] [added: 30, 2017,] all of which information is incorporated herein by reference.

Years ended August 31, [removed: 2016, 2015] [added: 2017, 2016] and [removed: 2014] [added: 2015] (in thousands):

| | [removed: (1)] [added: _(1)_] | _Additions to the receivable reserve for doubtful accounts are charged to bad debt expense. Additions to the receivable reserve for billing adjustments are charged against revenues._ |

| 3.2 | | [removed: Amendment] [added: [Amendment] to the Restated Certificate of Incorporation [removed: (2)] [added: (2)](http://www.sec.gov/Archives/edgar/data/1013237/000101323701500062/exhibit3_12.htm)] |

| 3.3 | | [removed: Second] [added: [Second] Amendment to the Restated Certificate of Incorporation [removed: (3)] [added: (3)](http://www.sec.gov/Archives/edgar/data/1013237/000143774911009546/ex3-1.htm)] |

| 3.4 | | [removed: Amended] [added: [Amended] and Restated By-laws of FactSet Research Systems Inc. [removed: (4)] [added: (4)](http://www.sec.gov/Archives/edgar/data/1013237/000143774913016204/ex3.htm)] |

| 10.4 | | [removed: The] [added: [The] FactSet Research Systems Inc. 2004 Stock Option and Award Plan, as Amended and Restated [removed: (7)] [added: (7)](http://www.sec.gov/Archives/edgar/data/1013237/000119312511006426/ds8.htm)] |

| 10.6 | | [removed: The] [added: [The] FactSet Research Systems Inc. 2008 Non-Employee Directors’ Stock Option Plan [removed: (9)] [added: (9)](http://www.sec.gov/Archives/edgar/data/1013237/000119312509004027/ds8.htm)] |

| 10.7 | | [removed: The] [added: [The] FactSet Research Systems Inc. 2008 Employee Stock Purchase Plan, as Amended and Restated [removed: (10)] [added: (10)](http://www.sec.gov/Archives/edgar/data/1013237/000143774915000661/fds20150113_s8.htm)] |

| 31.1 | | [removed: Section] [added: [Section] 302 Certification of Principal Executive [removed: Officer] [added: Officer](https://www.sec.gov/Archives/edgar/data/1013237/000143774917017840/ex_97655.htm)] |

| 31.2 | | [removed: Section] [added: [Section] 302 Certification of Principal Financial [removed: Officer] [added: Officer](https://www.sec.gov/Archives/edgar/data/1013237/000143774917017840/ex_97656.htm)] |

| 32.1 | | [removed: Section] [added: [Section] 906 Certification of Principal Executive [removed: Officer] [added: Officer](https://www.sec.gov/Archives/edgar/data/1013237/000143774917017840/ex_97657.htm)] |

| 32.2 | | [removed: Section] [added: [Section] 906 Certification of Principal Financial [removed: Officer] [added: Officer](https://www.sec.gov/Archives/edgar/data/1013237/000143774917017840/ex_97658.htm)] |

| _(4)_ | _Incorporated by reference to the Company’s periodic report on Form 8-K, filed on December [removed: 17, 2013._] [added: 1__7__, 201__3__._] |

| [removed: _(5)_] [added: _(__5__)_] | _Incorporated by reference to the Company’s Registration Statement on Form S-8 (File No. 333-22319)._ |

| [removed: _(6)_] [added: _(6__)_] | _Incorporated by reference to the Company’s Registration Statement on Form S-8 (File No. 333-56870)._ |

| [removed: _(7)_] [added: _(__7__)_] | _Incorporated by reference to the Company’s Registration Statement on Form S-8 (File No. 333-171667)._ |

| [removed: _(8)_] [added: _(8__)_] | _Incorporated by reference to the Company’s Registration Statement on Form S-8 (File No. 333-59839)._ |

| [removed: _(9)_] [added: _(__9__)_] | _Incorporated by reference to the Company’s Registration Statement on Form S-8 (File No. [removed: 333-156649)._] [added: 333-__156649__)._] |

| Date: October [removed: 31, 2016] [added: 30, 2017] | /s/ F. PHILIP SNOW |

| /s/ F. PHILIP SNOW [removed: F. Philip Snow] | | Chief Executive Officer and Director [removed: (Principal Executive Officer)] | October [removed: 31, 2016] [added: 30, 2017] | |

| /s/ MAURIZIO NICOLELLI [removed: Maurizio Nicolelli] | | Senior Vice President, Chief Financial Officer [removed: (Principal Financial Officer)] | October [removed: 31, 2016] [added: 30, 2017] | |

| /s/ MATTHEW J. MCNULTY [removed: Matthew J. McNulty] | | Vice President, Controller [removed: (Principal Accounting Officer)] | October [removed: 31, 2016] [added: 30, 2017] | |

| /s/ PHILLIP A. HADLEY [removed: Philip A. Hadley] | | Chairman | October [removed: 31, 2016] [added: 30, 2017] | |

| /s/ JAMES J. MCGONIGLE [removed: James J. McGonigle] | | Lead Independent Director | October [removed: 31, 2016] [added: 30, 2017] | |

| /s/ ROBIN A. ABRAMS [removed: Robin A. Abrams] | | Director | October [removed: 31, 2016] [added: 30, 2017] | |

| /s/ SCOTT A. BILLEADEAU [removed: Scott A. Billeadeau] | | Director | October [removed: 31, 2016] [added: 30, 2017] | |

| /s/ MALCOLM FRANK [removed: Malcolm Frank] | | Director | October [removed: 31, 2016] [added: 30, 2017] | |

| /s/ SHEILA B. JORDAN [removed: Sheila B. Jordan] | | Director | October [removed: 31, 2016] [added: 30, 2017] | |

| /s/ LAURIE SIEGEL [removed: Laurie Siegel] | | Director | October [removed: 31, 2016] [added: 30, 2017] | |

| /s/ JOSEPH R. ZIMMEL [removed: Joseph R. Zimmel] | | Director | October [removed: 31, 2016] [added: 30, 2017] | |

| 2017 | | $ | 1,521 | | | $ | 3,381 | | | $ | 2,164 | | | $ | 2,738 | |

| 21 | | [Subsidiaries of FactSet Research Systems Inc.](https://www.sec.gov/Archives/edgar/data/1013237/000143774917017840/ex_97653.htm) |

| 23 | | [Consent of Ernst & Young LLP](https://www.sec.gov/Archives/edgar/data/1013237/000143774917017840/ex_97654.htm) |

| F. Philip Snow | | (Principal Executive Officer) | | |

| Maurizio Nicolelli | | (Principal Financial Officer) | | |

| Matthew J. McNulty | | (Principal Accounting Officer) | | |

| Philip A. Hadley | | | | |

| James J. McGonigle | | | | |

| Robin A. Abrams | | | | |

| Scott A. Billeadeau | | | | |

| Malcolm Frank | | | | |