FactSet Research Systems (FDS) 10-K risk factor changes: FY2018 vs FY2017

Investors should carefully consider [removed: the risks described below] [added: all risks, including those disclosed,] before making an investment decision.

Many of [removed: FactSet’s] [added: our] products, as well as [removed: its] [added: our] internal systems and processes, involve the storage and transmission of [added: our own, as well as supplier and customer] proprietary information and sensitive or confidential data, including client [removed: portfolios.][added: portfolios and strategies.]

[removed: FactSet relies] [added: We rely] on a complex network of internal controls to protect the privacy of [removed: client] data.

If [removed: FactSet fails] [added: we fail] to maintain the adequacy of [removed: its] [added: our] internal controls, including any failure to implement required new or improved controls, [added: unauthorized access or] misappropriation of client [added: or supplier] data by an employee or an external [removed: third party] [added: third-party] could occur.

Breaches of [removed: Company] security measures could expose [removed: FactSet, its] [added: us, our] clients or the individuals affected to a risk of loss or misuse of this information, potentially resulting in litigation and liability for [removed: the Company,] [added: us,] as well as the loss of existing or potential [removed: clients and damage to the Company’s brand and reputation.][added: clients.]

The market for [removed: FactSet] [added: our products] is characterized by rapid technological change, [added: including methods and speed of delivery,] changes in client [removed: demands] [added: demands, development of new investment instruments] and evolving industry standards, which can render [added: our] existing products [added: less competitive,] obsolete [removed: and] [added: or] unmarketable.

As a result, [removed: the Company’s] [added: our] future success will continue to depend upon [removed: its] [added: our] ability to [added: identify and] develop new products and enhancements that address the future needs of [removed: its] [added: our] target markets and to respond to their changing standards and practices.

[removed: FactSet may not be successful in developing, introducing, marketing and licensing the Company’s] [added: Further, any] new products and enhancements [removed: on a timely and cost effective basis, and they] may not adequately meet the requirements of the marketplace or achieve market acceptance.

[removed: FactSet must] [added: Inability to] hire and retain key qualified personnel

[removed: The Company’s] [added: Our] business is based on successfully [removed: attracting] [added: attracting, motivating] and retaining talented employees.

Competition for talent, [removed: including] [added: especially] engineering personnel, [removed: in the industry in which the Company competes] is strong.

If [removed: the Company is less successful] [added: we are unsuccessful] in [removed: its] [added: our] recruiting efforts, or if [removed: it is] [added: we are] unable to retain key employees, [removed: its] [added: our] ability to develop and deliver successful products and services may be adversely [removed: affected.][added: affected and could have a material, adverse effect on our business.]

[removed: FactSet needs] [added: We need] technical resources such as [removed: product development] engineers to [added: help] develop new products and enhance existing [removed: products.][added: services.]

[removed: The Company relies] [added: We rely] upon sales personnel to sell [removed: its] [added: our] products and services and maintain healthy business relationships.

Approximately [removed: 84.1%] [added: 83.9%] of [removed: the Company’s annual subscription value (“ASV”)] [added: our ASV] is derived from [removed: its] [added: our] investment management clients.

The [removed: prosperity] [added: profitability and management fees] of these clients [removed: is] [added: are] tied to [removed: equity] assets under management.

An equity market decline not only depresses [added: the value of] assets under management but could cause a significant increase in redemption [removed: requests.][added: requests from our clients’ customers, further reducing their assets under management.]

Moreover, extended declines in the equity [added: and fixed income] markets may reduce new fund or client [removed: creation, resulting in lower demand for services from investment managers.][added: creation.]

Uncertainty, consolidation and business failures in the global investment banking industry may cause [removed: FactSet] [added: us] to lose clients and users

[removed: FactSet’s sell-side] [added: Our investment banking] clients that perform [removed: M&A] [added: Mergers and Acquisitions (“M&A”)] advisory work, capital markets services and equity research, account for approximately [removed: 15.9%] [added: 16.1%] of [removed: its] [added: our] ASV.

[removed: While improvements have been observed] [added: Consolidation or contraction] in [removed: the current fiscal year, the global investment banking] [added: this] industry [removed: continues to experience uncertainty and consolidation, which] directly impacts the number of prospective clients and users within the sector.

[removed: Uncertainty,] [added: Thus, economic uncertainty for our global investment banking clients,] consolidation and business failures in [removed: the global investment banking] [added: this] sector could adversely affect [removed: the Company’s] [added: our] financial results and future growth.

[removed: A dramatic] [added: The continued] shift from active to passive investing could negatively impact user count growth [added: and revenues]

The predominant investment strategy today is [added: still] active investing, which attempts to outperform the market.

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

They [removed: can] make informed investment decisions based on their experiences, insights, knowledge and ability to identify opportunities that can translate into superior performance.

The main advantage of passive investing is that it closely matches the performance of [removed: the index.][added: market indices.]

Competition in [removed: FactSet’s] [added: our] industry may cause price reductions or loss of market share

[removed: FactSet continues] [added: We continue] to experience intense competition across all markets for [removed: its] [added: our] products with competitors ranging in size from smaller, highly specialized, single-product businesses to [removed: multi-billion dollar] [added: multi-billion-dollar] companies.

While [removed: the Company believes] [added: we believe] the breadth and depth of [removed: its] [added: our] suite of products and applications offer benefits to [removed: its] [added: our] clients that are a competitive advantage, [removed: its] [added: our] competitors may offer price incentives to attract new business.

The impact of cost-cutting pressures across the industries [removed: FactSet serves] [added: we serve] could lower demand for [removed: its services.][added: our products.]

Clients within the financial services industry that strive to reduce their operating costs may seek to reduce their spending on financial market data and related [removed: services.][added: services, such as ours.]

[removed: Clients may use other strategies to reduce their overall spending on financial market data services by consolidating] [added: If our clients consolidate] their spending with fewer [removed: vendors,] [added: suppliers,] by selecting [removed: vendors] [added: suppliers] with lower-cost offerings or by self-sourcing their needs for financial market [removed: data.][added: data, our business could be negatively affected.]

[removed: FactSet enjoys] [added: We enjoy] a positive reputation in the marketplace.

[removed: FactSet’s] [added: Our] ability to attract and retain [removed: customers] [added: clients and employees] is affected by external perceptions of [removed: its] [added: our] brand and reputation.

Reputational damage from negative perceptions or publicity could affect [removed: FactSet’s] [added: our] ability to attract and retain clients and employees and [removed: its] [added: our] ability to [removed: price its products at their full value.][added: maintain our pricing for our products.]

Although [removed: the Company monitors] [added: we monitor] developments for areas of potential risk to [removed: its] [added: our] reputation and brand, negative perceptions or publicity could have a material adverse effect on [removed: FactSet’s] [added: our] business and financial results.

Increased accessibility to free or relatively inexpensive information sources may reduce demand for [removed: FactSet][added: our products]

The availability of free or relatively inexpensive information may reduce demand for [removed: FactSet’s] [added: our] products.

While [removed: the Company believes its] [added: we believe our] service offering is distinguished by such factors as customization, timeliness, accuracy, ease-of-use, completeness and other [removed: added value] [added: value-added] factors, if users choose to obtain the information they need from public or other sources, [removed: FactSet’s business, financial condition,] [added: then our business] and results of operations could be adversely affected.

The following risks could materially and adversely affect our business, financial condition, cash flows, results of operations and the trading price of our common stock could decline.

These risk factors do not identify all risks that we face; our operations could also be affected by factors that are not presently known to us or that we currently consider to be immaterial to our operations.

Due to risks and uncertainties, known and unknown, our past financial results may not be a reliable indicator of future performance, and historical trends should not be used to anticipate results or trends in future periods.

Investors should also refer to the other information set forth in this Report on Form 10-K, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our financial statements including the related notes.

Loss, corruption and misappropriation of data and information relating to clients and others

Breaches of this confidentiality, should they occur, could result in the loss of clients and termination of arrangements with suppliers for the use of their data.

Additionally, the maintenance and enhancement of our systems may not be completely effective in preventing loss, unauthorized access or misappropriation.

Data misappropriation, unauthorized access or data loss could instill a lack of confidence in our products and systems and damage our brand, reputation and business.

Many jurisdictions in which we operate have laws and regulations relating to data privacy and protection of personal information, including the European Union General Data Protection Regulation (“GDPR”) which became effective May 25, 2018.

GDPR requires companies to satisfy new requirements regarding the handling of personal and sensitive data, including our use, protection and certain abilities of persons whose data is stored to correct or delete such data about themselves.

Failure to comply with GDPR requirements could result in penalties of up to 4% of worldwide revenues.

The law in this area continues to develop and the changing nature of privacy laws in the European Union and elsewhere could impact our processing of personal and sensitive information related to our content operations, employees, clients, and suppliers, and may expose us to claims of violations.

Successful cyber-attacks and the failure of cyber-security systems and procedures

In providing our software-enabled services to clients, we rely on information technology infrastructure that is primarily managed internally, along with some reliance placed on third-party service providers.

We and these third-party service providers are subject to the risks of system failures and security breaches, including cyber-attacks, such as phishing scams, viruses and denials of service attacks, as well as employee errors or malfeasance.

Our protective systems and procedures and those of third parties to which we are connected, such as cloud computing providers, may not be effective against these threats.

We could suffer significant damage to our brand and reputation if a cyber-attack or other security incident were to allow unauthorized access to, or modification of, clients’ or suppliers’ data, other external data, internal data or information technology systems; if the services provided to clients were disrupted; or if products or services were perceived as having security vulnerabilities.

The costs we would incur to address and resolve these security incidents would increase our expenses.

These types of security incidents could also lead to lawsuits, regulatory investigations and claims, loss of business and increased legal liability.

We also make acquisitions periodically.

While significant effort is placed on addressing information technology security issues with respect to the acquired companies, we may inherit such risks when these acquisitions are integrated into our infrastructure.

Passive investing requires little decision-making by investment managers and low operating costs which result in lower fees for the investor.

While the majority of assets under management are still actively managed, outflows to passively managed index funds have increased in recent years.

A continued shift to passive investing could reduce demand for the services of active investment managers and consequently, the demand of our clients for our services.

Reduced client profits and management fees may cause our clients to cut costs.

Each of these developments may result in lower demand for our services and workstations from investment managers that could affect our business.

Failure to develop and market new products and enhancements that maintain our technological and competitive position and failure to anticipate and respond to changes in the marketplace for our products

We may not be successful in developing, introducing, marketing, licensing and implementing new products and enhancements on a timely and cost-effective basis or without impacting the stability and efficiency of existing products and customer systems.

Our failure or inability to anticipate and respond to changes in the marketplace, including competitor and supplier developments, may also adversely affect our business, operations and growth.

The decision on the part of large institutional clients to purchase our services often requires management-level sponsorship and typically depends upon the size of the client, with larger clients having more complex and time-consuming purchasing processes.

The process is also influenced by market volatility.

These characteristics often lead us to engage in relatively lengthy sales efforts.

Additional cost due to tax assessments resulting from ongoing and future audits by tax authorities as well as changes in tax laws

In the ordinary course of business, we are subject to tax examinations by various governmental tax authorities.

The global and diverse nature of our business means that there could be additional examinations by governmental tax authorities and the resolution of ongoing and other probable audits which could impose a future risk to the results of our business.

In the third quarter of fiscal 2018, we received a letter from the Massachusetts Department of Revenue relating to prior tax periods.

The letter requested additional information in order to determine if we should have collected sales and use taxes on our sales to Massachusetts-based clients.

Based upon a preliminary review of their request, it is possible that the State may assess sales and use taxes, underpayment penalties and interest, on previously recorded sales transactions.

We have not recorded a liability as of August 31, 2018.

While we believe that we will ultimately prevail, if we are required to pay an assessment, the amount could have a material impact on our consolidated financial position, cash flows and results of operations.

Set forth below and elsewhere in this report and in other documents FactSet files with the SEC are risks and uncertainties that could cause actual results to differ materially from those expressed by the forward-looking statements contained in this report.

In assessing these risks, investors should also refer to the other information contained or incorporated by reference in this Annual Report on Form 10-K filed with the SEC, including the Company’s consolidated financial statements and related notes thereto.

FactSet’s operating results are subject to quarterly and annual fluctuations as a result of numerous factors.

As a consequence, operating results for a particular future period are difficult to predict, and, therefore, prior results are not necessarily indicative of future performance.

Risk factors which could cause future financial performance to differ materially from the expectations as expressed in any of FactSet’s forward-looking statements made by or on the Company’s behalf include, without limitation:

FactSet must ensure the protection and privacy of client data

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

FactSet must continue to introduce new products and enhancements to maintain its technological position

In addition, clients may delay purchases in anticipation of new products or enhancements.

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

A lack of available credit would impact many of the large banking clients due to the amount of leverage deployed in past operations.

A lack of confidence in the global banking system could cause declines in merger and acquisitions funded by debt.

The goal of active management is to beat a particular benchmark.

The majority of assets under management are actively managed.

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

Passive management, or indexing, is an investment management approach based on investing in exactly the same securities, and in the same proportions, as an index such Dow Jones Industrial Average or the S&P 500.

It is called passive because portfolio managers 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.

Passive investing requires little decision-making by the manager.

The manager tries to duplicate the chosen index, tracking it as efficiently as possible.

This results in lower operating costs that are passed on to the investor in the form of lower fees.

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

In the past decade, passively managed index funds have seen greater investor interest, and this trend has become more dramatic in recent years.

A continued lessening of investor interest in actively managed equity funds could decrease demand for FactSet’s products and services.

In recent years, FactSet has seen clients intensify their focus on containing or reducing costs as a result of the more challenging market conditions.

If clients elect to reduce their spending with FactSet, the Company’s results of operations could be materially adversely affected.

If clients elect to consolidate their spending on financial market data services with other vendors and not FactSet, the Company’s results of operations could be adversely affected.

FactSet’s international operations involve special risks

In particular, political tension has been increasing in Manila, the Philippines.

Civil unrest in Manila may make it difficult or impossible for FactSet to continue its operations there.

Although FactSet has tested business continuity plans in place for its operations there, an extended period of civil unrest that halts or significantly impedes operations could have a material adverse effect on the Company.

Exposure to fluctuations in currency exchange rates that could negatively impact financial results and cash flows

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

These exposures may change over time and they could have a material adverse impact on the Company’s financial results and cash flows.

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

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

Sales cycles for FactSet may fluctuate and be extended in times where the financial markets are volatile.

The decision to purchase the FactSet service often requires management-level sponsorship, which often leads FactSet to engage in relatively lengthy sales efforts.

The cycle associated with the purchase of the Company’s service offerings typically depends upon the size of the client.

FactSet may be unable to successfully identify acquisitions or may experience integration or other risks resulting from its acquisitions, leading to an adverse effect on its financial results.

The negotiation of contract terms supporting new and existing data sets or products

| | ● | Significant Accounting Policies [added: and Critical Accounting Estimates] |

The MD&A should be read in conjunction with the Consolidated Financial Statements and related Notes included in Item 8, Financial Statements and Supplementary Data, of this [removed: Annual] Report on Form 10-K.

[removed: FactSet Research Systems Inc. (the “Company” or “FactSet”) provides] [added: We are a global provider of] integrated financial [removed: information and] [added: information,] analytical applications [removed: to] [added: and industry-leading service for] the global investment community.

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

These professionals include portfolio managers, [removed: wealth managers,] [added: investment] research [added: professionals, investment bankers, risk] and performance analysts, [removed: risk managers, research professionals, investment bankers] and [removed: fixed income professionals.][added: wealth advisors.]

From streaming real-time data to historical information, including quotes, estimates, news and commentary, [removed: FactSet offers unique] [added: we offer proprietary] and third-party content through desktop, [removed: wireless,] [added: web, mobile] and off-platform solutions.

Our [removed: wide] [added: broad] application suite offers tools and resources including company and industry analyses, full screening tools, portfolio analysis, risk profiles, alpha-testing, portfolio optimization and research management solutions.

Our revenues are derived from subscriptions to products and services such as workstations, analytics, enterprise [removed: data and content,] [added: data,] research [removed: management] [added: management,] and trade execution.

[removed: Investment management (buy-side)] [added: Buy-side] clients account for [removed: 84.1%] [added: 83.9%] of [removed: our annual subscription value and] [added: ASV, while] the remainder is derived from [removed: investment banking] [added: sell-side] firms [removed: (sell-side)] that perform mergers and acquisitions [removed: (“M&A”)] advisory work, capital markets services and equity research.

[removed: 2017] [added: 2018] Year in Review

As of August 31, [removed: 2017,] [added: 2018, our] ASV totaled [removed: $1.32] [added: $1.39] billion, [removed: an increase of $166.8 million] [added: up 5.7% organically] over the prior year.

In addition, clients and users reached new highs of [removed: 4,744] [added: 5,142] and [removed: 88,846,] [added: 91,897,] respectively, in fiscal [removed: 2017.][added: 2018.]

[removed: We] [added: Over the last 12 months, we have] returned [removed: $341.9] [added: $393.4] million to stockholders in the form of share repurchases and dividends.

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

The depth of our knowledge, the data behind the models and the complex mathematics [removed: behind] [added: substantiating] the answers each create an opportunity for us to forge close working relationships with our user community.

As of August 31, [removed: 2017,] [added: 2018,] employee headcount was [removed: 9,074,] [added: 9,571,] up [removed: 8.3%] [added: 5.5%] from a year ago.

[removed: The increases were] [added: This increase in headcount was] primarily in client-focused positions [removed: focused on] [added: with dedication to] client [removed: loyalty as evidenced by an annual] [added: loyalty, supporting our recent global] client retention rate of greater than 95% of ASV as of August 31, [removed: 2017.][added: 2018.]

Not only do we teach our users the nuances of our software and content offerings, but [added: also] FactSet personnel are often thought-leaders in a particular area of financial modeling in our rapidly evolving industry.

As a result, clients look to FactSet as a trusted partner to stay on the [removed: cutting edge] [added: forefront] of financial modeling and analysis.

| | | As of and for the Year ended August 31, | | | | | | | | | | | [added: |]

| _(in millions, except_ _per share data__,_ _client and user counts)_ | | [removed: 2017] [added: 2018] | | | | [removed: 2016] [added: 2017] | | | | Change | | | [added: |]

| Operating Income | | $ | [removed: 352.1] [added: 366.2] | | | $ | [removed: 349.7] [added: 352.1] | | | | [removed: 0.7] [added: 4.0] | % | [added: |]

| Net Income | | $ | [removed: 258.3] [added: 267.1] | | | $ | [removed: 338.8] [added: 258.3] | | | | [removed: (23.8%] [added: 3.4] | [removed: )] [added: %] | [added: |]

| Diluted EPS | | $ | [removed: 6.51] [added: 6.78] | | | $ | [removed: 8.19] [added: 6.51] | | | | [removed: (20.5] [added: 4.1] | [removed: )] [added: %] | [added: |]

| | _(2)_ | _ASV grew_ [removed: _5.7%_ _organically] [added: _5.8%] year [removed: over_ _year._] [added: over year, of which,_ _5.7%_ _represents organic ASV growth._] _Organic ASV excludes_ _ASV from_ _acquisitions and dispositions_ _completed with__in the last [removed: 12 months] [added: 12_ _months] and_ _the effects of_ _foreign currency._ |

| | [removed: _(4)_] [added: _(3)_] | _In the second quarter of fiscal [removed: 2017, FactSet changed its client] [added: 2017,_ _we_ _changed_ _our_ _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._ |

| | [removed: _(5)_] [added: _(4)_] | _In the second quarter of fiscal [removed: 2017, FactSet changed its user] [added: 2017,_ _we_ _changed_ _our_ _user] count definition [removed: to account for users] [added: to_ _include_ _users] from workstations previously not captured due to certain product [removed: bundling and also users] [added: bundling_ _and_ _users] of the StreetAccount web product. The prior year user count was restated to reflect this change for comparison purposes._ |

[removed: Annual subscription value] [added: ASV] at any given point in time represents the forward-looking revenues for the next twelve months from all subscription services currently being supplied to [removed: clients.][added: clients, and excludes professional services fees billed in the last twelve months, which are not subscription-based.]

With proper notice to us, our clients [removed: are able to] [added: can] add to, delete portions of, or terminate service at any time, subject to certain contractual limitations.

Organic ASV excludes ASV from acquisitions and dispositions completed within the [removed: past] [added: last] 12 months and the effects of foreign currency.

The increase in ASV was driven by growth [added: in our geographic segments and achievements] across [removed: the majority] [added: each] of our [removed: key workflows including] [added: workflow solutions which include Research,] Analytics, [removed: Investment Banking, and Content] [added: CTS,] and [removed: Technology Solutions (“CTS”).][added: Wealth.]

[added: As of August 31, 2018,] ASV from our U.S. operations was [removed: $825.1 million for the fourth quarter] [added: $868.7 million, an increase] of [removed: 2017, up 4.9%] [added: 5.3%] organically from a year ago.

[removed: International] ASV [removed: totaled $491.5] [added: from international operations was $524.4] million, [removed: up 7.7%] [added: an increase of 6.3%] organically from a year ago.

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

We continue to focus on expanding [added: and cultivating relationships with] our current client base as it is essential to our long-term growth strategy and [removed: encourages incremental sales growth] [added: assists in our upsell] of workstations, applications and content at our existing clients.

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

Annual client retention as of August 31, [removed: 2017,] [added: 2018,] was greater than 95% [added: of] ASV and 91% when expressed as a percentage of [removed: clients, down slightly from 92% in the prior year.][added: clients.]

Our [added: successful client] retention [removed: success, demonstrating] [added: demonstrates] that a majority of our clients maintain their subscriptions to FactSet year over year, [removed: highlights] [added: highlighting] the strength of our business [removed: model.][added: strategy.]

[added: As of] August 31, [removed: 2017,] [added: 2018,] our largest individual client accounted for [added: approximately] 2% of total subscriptions, and annual subscriptions from our ten largest clients did not surpass 15% of total client [removed: subscriptions, consistent with August 31, 2016.][added: subscriptions.]

[removed: We] [added: In fiscal 2018, we] repurchased [added: 1.5 million shares for $302.4 million compared to] 1.6 million shares for $252.8 million [removed: during] [added: in] fiscal 2017 under the [removed: our] existing share repurchase program.

With recent acquisitions, we have continued to expand our solutions across the investment lifecycle from idea generation to performance and client reporting.

Fiscal 2018 revenue growth can be attributed to achievements in the delivery, integration and consumption of our financial data and analytical applications by the global investment community.

As of August 31, 2018, annual subscription value (“ASV”) totaled $1.39 billion, an increase of 5.8% over the prior year and 5.7% organically.

Revenues increased 10.6% year over year, of which, 5.6% of the increase can be attributed to organic revenue growth.

We returned $393.4 million to stockholders in the form of share repurchases and dividends during the fiscal year.

We continued to diversity our suite of solutions through the integration of our acquisitions and new product investments.

We enhanced our Multi-Asset Class (“MAC”) risk models, leading to several global client wins and strengthening our position in the analytics market.

We expanded our Content and Technology Solutions (“CTS”) workflow and launched Open:FactSet Marketplace, a new platform to address the demand for integrating both financial and alternative data.

We recently added Data Exploration, a platform for financial professionals to evaluate quickly alternative and financial datasets and build investment applications in a fully hosted environment.

FactSet released its first annual Corporate Social Responsibility Report (“CSR”), highlighting the Company’s commitments to our clients, employees, stockholders, and communities.

The report covered the fiscal year ending August 31, 2017, highlighting our recent achievements and setting a trajectory for our future CSR goals.

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

| Revenues | | $ | 1,350.1 | | | $ | 1,221.2 | | | | 10.6 | % | |

| ASV(1) | | $ | 1,393.1 | | | $ | 1,316.6 | | | | 5.8 | % | (2) |

| Clients(3) | | | 5,142 | | | | 4,744 | | | | 8.4 | % | |

| Users(4) | | | 91,897 | | | | 88,846 | | | | 3.4 | % | |

| | _(1)_ | _During the_ _third quarter of_ _fiscal_ _2017, FactSet excluded professional services fees billed within the last 12 months, which are not subscription based._ _As such,_ _ASV_ _exclud__e__d_ _professional service fees of_ _$21.6 million and $17.2 million_ _as of August 31, 2018 and 2017__, respectively._ |

Buy-side and sell-side ASV growth rates for the last 12 months were 5.4% and 7.3% respectively.

The growth in ASV in both the U.S. operations and international operations was driven primarily by higher sales across all workflow solutions and new business additions across the operations, primarily in the U.S segment.

Our total client count was 5,142 as of August 31, 2018, representing a net increase of 398 clients in the last twelve months.

Client count has increased by 398 or 8.4% in the last twelve months primarily from wealth managers, corporate firms and institutional asset managers.

These firm types contributed to over 60% of the net user additions during the fiscal 2018 year.

As of August 31, 2018, there were 91,897 professionals using FactSet.

User count increased by 3,051 users in the past twelve months primarily driven by an increase in workstation sales.

Capital expenditures were $33.5 million during fiscal 2018, compared to $36.9 million a year ago.

Capital expenditures of $24.2 million or 72% of our capital expenditures during fiscal 2018 related to upgrades of existing computer systems in Norwalk, additional server equipment for our data centers located in New Jersey and Virginia, as well as laptop computers and peripherals for new and existing employees.

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

Revenues in fiscal 2018 were $1.35 billion, increasing 10.6% compared to fiscal 2017.

Our organic revenue growth rate for fiscal 2018 was 5.6% compared to the prior year period, with cancellations remaining relatively flat during fiscal 2018.

Organic revenues exclude the effects of acquisitions and dispositions completed in the last 12 months and foreign currency in all periods.

The increase in revenues was throughout our geographical segments and workflow solutions.

The U.S. segment revenue was up 7.4% compared to the prior year period, primarily driven by additional clients, expansion from within our existing client base and an annual price increase, while holding client cancellations steady.

Our international operations also grew as demonstrated by our 17.3% growth in Europe and a 13.1% increase in Asia Pacific.

In addition to revenue growth amongst the geographic segments, achievements were also made across each workflow solution which include Research, Analytics, CTS, and Wealth.

The Research workflow growth was driven by additional users due to banking new hires.

The growth in the Analytics workflow was primarily attributed to increased sales in the portfolio analytics, reporting, and risk platforms, coupled with the enhancement of our multi-asset class risk model offerings, which strengthened our position in the analytics market.

The CTS workflow growth was driven by increased demand for our proprietary content data feeds while new business sales drove the Wealth workflow growth.

Our organic revenue growth rate for fiscal 2017 increased 6.9% compared to fiscal 2016.

Revenue from our U.S. segment increased 7.4% to $841.9 million in fiscal 2018 compared to $784.1 million in fiscal 2017, due to organic ASV growth across our workflow solutions and strong performance executing new business sales.

Cancellations remained relatively flat for fiscal 2018 showing signs of stability.

| | ● | Critical Accounting Estimates |

By integrating comprehensive datasets and analytics across asset classes with client data, we support the workflow of both buy-side and sell-side clients.

Fiscal 2017 results continued our positive topline growth.

Organic revenue was up 6.9% while annual subscription value (“ASV”) increased 5.7% organically.

This fiscal year marked our 39th year of operation, our 37th consecutive year of revenue growth and our 21st consecutive year of adjusted earnings growth as a public company.

We have dedicated ourselves to helping our clients navigate an uncertain environment.

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.

As a testament to our broadening suite of premium products and the strength of our business and service model FactSet was awarded “Best Market Data Provider” and "Best Data Analytics Provider" by Inside Market Data in fiscal 2017.

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.

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.

During fiscal 2017, over 2,500 clients attended live or online FactSet training sessions, with over 54,000 eLearning courses taken.

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.

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 5,000 people.

Of our total employees, 2,493 were located in the U.S., 1,322 in Europe and 5,259 in Asia Pacific.

Approximately 70% of the Company’s employees were involved in company operations including content collection and software and systems engineering, 27% had a client focused role conducting sales and consulting services and the remaining 3% provided administrative support.

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

| Free Cash Flow(1) | | $ | 283.7 | | | $ | 283.4 | | | | 0.1 | % |

| 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) |

| | _(1)_ | _We define free cash flow as cash provided by operating activities, which includes the cash cost for taxes and changes in working capital, less capital expenditures. The presentation of free cash flow is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. We use free cash flow, a non-GAAP measure, both in presenting our results to stockholders and the investment community, and in our internal evaluation and management of the business. Management believes that this financial measure and the information we provide are useful to investors because they permit investors to view our performance using the same metric that we use to gauge progress in achieving our goals. Free cash flow is also an indication of cash flow that may be available to fund further investments in future growth initiatives._ |

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

ASV totaled $1.32 billion at August 31, 2017, up 5.7% organically over the prior year.

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 buy-side ASV experienced a growth rate of 5.9% compared to prior year, down 440 basis points from fiscal 2016.

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

ASV from our international operations represented 37.3% of our Company-wide total, its highest level in FactSet history.

Our European organic ASV achieved a growth rate of 6.1% over the last 12 months while Asia Pacific organic ASV grew by 12.8%.

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

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.

Using the new definition, as of August 31, 2017, there were 88,846 professionals using FactSet, an increase of 4,910 users or an equivalent 5.8% increase compared to fiscal 2016.

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.

We received 595,607 shares of common stock on July 5, 2016, which was approximately 80% of the total number of shares of common stock expected to be repurchased under the ASR Agreement.

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

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.

Over the next 12 months, our non-U.S. dollar denominated revenues expected to be recognized are estimated to be [removed: approximately $90] [added: $92.8] million while our non-U.S. dollar denominated expenses are [removed: approximately $300] [added: estimated to be $324.5] million, which translates into a net foreign currency exposure of [removed: approximately $210 million per year.][added: $231.7 million.]

[removed: As of August 31, 2017, FactSet maintained] [added: | | _●_ | _Euro_ –] foreign currency forward contracts to hedge approximately [removed: 75%] [added: 50%] of [removed: its Indian Rupee] [added: our Euro] exposure through the third quarter of fiscal 2019. [added: |]

[removed: The] [added: As of August 31, 2018, the] gross notional value of foreign currency forward contracts to purchase [added: Philippine Pesos with U.S. dollars was PHP 2.8 billion, to purchase] Indian Rupees with U.S. dollars was Rs.

There were no other outstanding foreign currency forward contracts as of August 31, [removed: 2017.][added: 2018.]

[removed: The] [added: A gain on derivatives of $3.1 million was recorded into operating income during fiscal 2018, compared to a loss of $2.9 million in fiscal 2017.The] gains and losses on foreign currency forward contracts mitigate the variability in operating expenses associated with currency movements.

The related cash flow impacts of all [removed: of] our derivative activities are reflected as cash flows from operating activities.

A sensitivity analysis was performed based on the estimated fair value of all foreign currency forward contracts outstanding at August 31, [removed: 2017.][added: 2018.]

If the U.S. dollar had been 10% weaker, the fair value of outstanding foreign currency forward contracts would have increased by [removed: $5.4] [added: $7.3] million, which would have had an immaterial impact on our Consolidated Balance Sheet.

[removed: Had] [added: If] we [removed: not] had [removed: any] [added: no] hedges in place as of August 31, [removed: 2017,] [added: 2018,] a hypothetical 10% weaker U.S. dollar against all foreign currencies from the quoted foreign currency exchange rates at August 31, [removed: 2017,] [added: 2018,] would result in a decrease in operating income by [removed: $20.3] [added: $28.8] million over the next 12 months.

A hypothetical 10% weaker U.S. dollar against all foreign currencies at August 31, [removed: 2017] [added: 2018] would increase the fair value of total assets by [removed: $69.5] [added: $65.3] million and equity by [removed: $61.9] [added: $61.2] million.

Volatility in [added: the British Pound Sterling] exchange [removed: rates] [added: rate] is expected to continue in the short term as the UK negotiates its exit from the [removed: EU.][added: European Union.]

In the longer term, any impact from Brexit [removed: on us] will [removed: depend,] [added: depend on,] in part, on the outcome of tariff, [removed: trade, regulatory] [added: regulatory,] and other negotiations.

The fair market value of our cash and investments at August 31, [removed: 2017,] [added: 2018,] was [removed: $227.2] [added: $237.9] million.

[removed: Our investments consist of] [added: These mutual funds and] certificates of deposits [removed: with] [added: are included as _Investments_ (short-term) on our Consolidated Balance Sheet as the mutual funds can be liquidated at our discretion and the certificates of deposit have] original maturities greater than three months, but less than one [removed: year and, as such, are classified as Investments within our Consolidated Balance Sheet.][added: year.]

As of August 31, [removed: 2017,] [added: 2018,] the fair value of our long-term debt was $575.0 million, which approximated its carrying amount [removed: 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 the daily LIBOR rate plus [added: a spread using a debt leverage pricing grid currently at] 1.00%.

Foreign Currency Hedges

As of August 31, 2018, we maintained the following foreign currency forward contracts to hedge our exposures:

| | _●_ | _Philippine Peso_ – foreign currency forward contracts to hedge approximately 75% of our Philippine Peso exposure through the fourth quarter of fiscal 2020. |

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

| | _●_ | _Indian Rupee_ – foreign currency forward contracts to hedge approximately 75% of our Indian Rupee exposure through the third quarter of fiscal 2019 and 50% of its exposure from the fourth quarter of fiscal 2019 through the end of the second quarter of fiscal 2020. |

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

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

| | _●_ | _British Pound Sterling_ – foreign currency forward contracts to hedge approximately 50% of our British Pound sterling exposure through the third quarter of fiscal 2019. |

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

3.6 billion, to purchase Euros with U.S. dollars was € 22.0 million and to purchase British Pound Sterling with U.S. dollars was £14.0 million.

Our investments consist of both mutual funds and certificates of deposits as both are part of our investment strategy.

The mutual funds and certificates are held for investment and are not considered debt securities.

During fiscal years 2018, 2017 and 2016, we recorded interest expense of $15.9 million, $8.4 million and $3.0 million, respectively, on our outstanding debt amounts.

3.8 billion.

A loss on derivatives of $2.9 million was recorded into operating income in fiscal 2017, compared to a loss of $0.5 million a year ago.

On June 23, 2016, the UK held a referendum in which British citizens approved an exit from the EU, commonly referred to as “Brexit.” As a result of the referendum, the global markets and currencies have been adversely impacted, including a sharp decline in the value of the British Pound Sterling as compared to the U.S. dollar.

Although it is unknown what the result of those negotiations will be, it is possible that new terms may adversely affect our operations and financial results.

During fiscal 2017 we paid $8.4 million in interest on our outstanding Loan amount compared to $3.1 million in the prior year.

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

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

These professionals include portfolio managers, [removed: wealth managers, research and performance analysts, risk managers,] [added: investment] research professionals, investment bankers, [added: risk] and [removed: fixed income professionals.][added: performance analysts, and wealth advisors.]

From streaming real-time data to historical information, including quotes, estimates, news and commentary, [removed: FactSet offers unique] [added: we offer proprietary] and third-party content through desktop, [removed: wireless] [added: web, mobile] and off-platform solutions.

[removed: The Company’s wide] [added: Our broad] application suite offers tools and resources including company and industry analyses, full screening tools, portfolio analysis, risk profiles, alpha-testing, portfolio optimization and research management solutions.

[removed: The Company’s] [added: Our] revenues are [added: primarily] derived from subscriptions to products and services such as workstations, analytics, enterprise data, research management, and trade execution.

[removed: Annual subscription value (“ASV”)] [added: ASV] at any given point in time represents the forward-looking revenues for the next twelve months from all subscription services currently being supplied to [removed: clients.][added: clients and excludes professional services fees billed in the last twelve months, which are not subscription-based.]

[removed: At] [added: As of] August 31, [removed: 2017,] [added: 2018,] ASV was [removed: $1.32] [added: $1.39] billion, up [added: $74.4 million or] 5.7% organically from a year ago.

During fiscal [removed: 2017, FactSet] [added: 2018, we] added [removed: 539 net] [added: 398] new clients, increasing the number of clients by [removed: 12.8%] [added: 8.4%] over the prior year.

[removed: FactSet saw] [added: We added 3,051 new users during fiscal 2018, leading to a] healthy progression in the number of users [removed: at] [added: in] both [removed: its] [added: our] buy-side and sell-side clients.

The following chart [removed: provide] [added: provides] a snapshot of FactSet’s historic ASV growth:

[removed: ][added: ]

Operating segments are defined as [added: (i)] components of an enterprise that engage in business activities from which they may earn revenues and incur expenses, [removed: whose] [added: (ii) with] operating results [added: that] are regularly reviewed by the enterprise’s chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance, and [added: (iii)] for which discrete financial information is available.

[removed: Senior] [added: Executive] management consists of [added: certain] executives who directly report to the CEO, [removed: comprising] [added: including] the Chief Financial Officer, Chief [removed: Operating] [added: Technology and Product] Officer, Global Head of Sales and Client Solutions, General Counsel, [removed: and] Chief Human Resources [removed: Officer.][added: Officer and Head of Analytics & Trading.]

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

[removed: FactSet’s] [added: Our] operating segments are aligned with how the Company, including its CODMG, manages the business and the demographic markets [removed: in which FactSet serves.][added: we serve.]

[removed: The Company’s] [added: Our] internal financial reporting structure is based on three [removed: segments;] [added: segments:] the U.S., Europe and Asia Pacific.

[removed: Sales, consulting, data collection, product development and software engineering are the] [added: Our] primary functional groups within the U.S., [removed: Europe] [added: Europe,] and Asia Pacific segments [removed: that] [added: include sales, consulting, data collection, product development and software engineering, which] provide global financial and economic information to investment managers, investment banks and other financial services professionals.

The U.S. segment services investment [removed: professionals] [added: professionals,] including financial institutions throughout the Americas.

The European and Asia Pacific segments service investment professionals located throughout Europe and the Asia Pacific [removed: region,] [added: segment,] respectively.

Financial information, including revenues, operating income and long-lived assets related to [removed: the Company’s] [added: our] operations in each geographic area are presented in Note 7, _Segment Information_, [added: and] in the Notes to the Company’s Consolidated Financial Statements included in Item 8.

The European segment maintains office locations in Bulgaria, Dubai, England, [added: Finland,] France, Germany, Italy, Latvia, [added: Luxembourg,] the Netherlands, [added: South Africa,] Spain, and Switzerland.

The Asia Pacific segment has office locations in Australia, [removed: Hong Kong,] [added: China,] India, Japan, and Singapore.

Expenditures associated with [removed: the Company’s] [added: our] data centers, [removed: third party] data costs and corporate [removed: headquarters] charges are recorded by the U.S. segment and are not allocated to the other segments.

The [added: centers of excellence, which focus primarily on] content collection [removed: centers] [added: and are] located in India and the [removed: Philippines] [added: Philippines,] benefit all [removed: of the Company’s] operating segments and thus the expenses incurred at these locations are allocated to each segment based on a percentage of revenues.

The following charts depict revenues related to [removed: each of the Company’s] [added: our] reportable segments.

[removed:   ][added: ]

[removed: FactSet’s] [added: Our] Research [removed: business] [added: Solutions (“Research”) workflow] offers a powerful data solution that combines global coverage, deep history, and [removed: unparalleled] transparency with thousands of FactSet-sourced and third-party databases integrated in one flexible platform.

[removed: The] [added: Our] Research [removed: business] [added: workflow] has a strong focus on growing [removed: a] [added: the] number of users and [removed: clients] [added: client] types including investment banking, sell-side research, buy-side research, private equity, capital markets, investor relations, and media.

This [removed: Research business offerings comprise] [added: workflow offering is comprised of] Core Applications, including Universal Screening, Company & Security Analytics, Industry and Markets, Filings, Ownership, Research, News and our [removed: industry\-leading] Research Management Solutions (“RMS”).

[removed: FactSet’s Portfolio Management] [added: Additionally, included in the Analytics workflow is our portfolio management] and [removed: Trading (“PMT”)] [added: trading] solutions [added: which] focus on workflows that are specific [removed: and unique] for the front [removed: office.][added: office serving traders and portfolio managers.]

This [removed: includes] offering [added: includes] a multi-asset execution management system (“EMS”) [removed: platform] [added: platform,] as well as compliance and order management functionality.

These products are aimed at large asset managers, hedge funds and mid-market customers [removed: and combine automation] [added: to provide a combination of automated] and intelligent trading workflows.

[removed: FactSet’s] [added: Our] Analytics [removed: business] [added: Solutions (“Analytics”) workflow] addresses [removed: workflows] [added: processes] around risk, performance and reporting.

[removed: They need] [added: Our Analytics workflow provides investment professionals with] in-depth insight, powerful analytics, and comprehensive datasets integrated seamlessly [removed: with] [added: into] their portfolios.

PA is [removed: an] [added: a multi-asset class] interactive [removed: tool] [added: global solution] that [removed: helps users make smarter decisions with] [added: includes] a flexible, multi-tile interface of reports and [removed: charts.][added: charts to enable a user to make smarter decisions.]

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

[removed: Additionally, the Company has] [added: We have] enhanced [removed: its] [added: our Analytics workflow] offering [removed: with] [added: by leveraging] client-requested functionality such as fixed income optimization and the Duration Times Spread [removed: (“DTS”)] attribution model.

[removed: FactSet’s] [added: Our] Wealth [removed: business] [added: Solutions (“Wealth”) workflow] creates solutions that are specific [removed: and unique for] [added: to] the wealth management industry and [removed: help] [added: helps] with investment portfolio management, advisory services, financial planning and other financial services.

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

Our mission is to solve our clients’ greatest challenges through the power of collaboration.

We are dual listed on the New York Stock Exchange (“NYSE”) and the NASDAQ Stock Market (“NASDAQ”) under the symbol “FDS.” Fiscal 2018 marked our 40th year of operation and while much has changed in our market and technologies, our focus has always been to provide the best in class products and exceptional client service.

The following timeline depicts the Company’s history since our founding in 1978:

We provide our clients with the global standard for delivery, integration and consumption of our financial data by the global investment community.

We maintain flexible, open data and software solutions to bring the front, middle, and back office together to drive productivity and performance throughout the portfolio lifecycle.

Our strategy is focused on growing our business throughout each of our three segments which include the U.S., Europe, and Asia Pacific.

We believe this geographical strategy alignment helps us better manage our resources and concentrate on markets that demand our products.

To execute on our business strategy of broad-based growth across each geographical segment, we continue to look at ways to create value for our clients by offering data, products and analytical applications within our key workflows of Research, Analytics, Wealth, and Content and Technology Solutions.

The Analytics workflow is driven by FactSet Portfolio Analysis (“PA”) and FactSet’s Multi-Asset Class (“MAC”) risk models.

Our goal is to reduce the number of customizations by standardizing and bundling our proprietary data into data feeds.

Whether a client needs market, company, or alternative data, our data delivery services provide normalized data through APIs and a direct delivery of local copies of standard data feeds.

Our symbology links and aggregates a variety of content sources to ensure consistency, transparency, and data integrity across your business.

More specifically, our recent launch of Open:FactSet data marketplace provides access to 25 specialty datasets from FactSet and other data providers in flexible delivery formats.

Our clients represent banking & advisory, broker-dealers, consulting, independent research, institutional asset management, private equity, and venture capital firms.

Organic ASV excludes ASV from acquisitions and dispositions completed within the last 12 months and the effects of foreign currency

This increase in ASV was driven by growth amongst our geographic segments and achievements across each of our workflow solutions which include Research, Analytics, CTS, and Wealth.

Executive management, along with the CEO, constitute our chief operating decision making group (“CODMG”).

We believe this alignment helps us better manage the business and focus on markets that demand our products.

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

The European and Asia Pacific segments service investment professionals located throughout Europe and the Asia Pacific segment, respectively.

The U.S. segment has offices in fourteen states throughout the U.S., including our corporate headquarters in Norwalk, Connecticut as well as two additional offices located in Brazil and Canada.


We believe our continued focus on making employee engagement a top priority will help us provide high quality insights and information to clients globally.

In order to optimize productivity, we have invested in expanding our footprint and talent pool in India and the Philippines, where we now have a combined workforce of over 5,500 people.

As of August 31, 2018, our employee headcount was 9,571, an increase of 5.5% in the last twelve months.

Of our total employees, 2,471 are in the U.S., 1,246 in Europe and 5,854 in the Asia Pacific segment.

In May 2018, we announced that Maurizio Nicolelli, the Company’s Chief Financial Officer, would depart FactSet as of December 31, 2018.

In July 2018, we announced that Helen L.

Shan would join FactSet as the new Chief Financial Officer beginning in September 2018.

Additionally, in July 2018, we announced that Edward Baker-Greene, the Company’s Chief Human Resources Officer would depart FactSet as of November 30, 2018.

We carry content from premier providers of major global exchanges and data providers.

Many of these firms offer products or services which are similar to those we sell.

These costs are expensed as incurred within our cost of services as employee compensation.

In addition, the FactSet Code of Business Conduct and Ethics is posted in the Investor Relations section of the Company’s website.

| Helen L. Shan | 50 | Executive Vice President and Chief Financial Officer | 2018 |

| Gene D. Fernandez | 51 | Executive Vice President, Chief Technology and Product Officer | 2017 |

| Robert J. Robie | 39 | Executive Vice President, Head of Analytics and Trading Analytics Solutions | 2018 |

_Helen_ _L._ _Shan –_ _Executive_ _Vice President_ _and_ _Chief Financial Officer._ Ms. Shan joined FactSet in September 2018 from Marsh and McLennan Companies, where she was CFO for Mercer, one of the world’s leading professional services firms.

During her time at Mercer, Ms. Shan was responsible for global financial reporting and performance, operational finance, investments, and corporate strategy, leading a team of finance professionals supporting clients in over 130 countries.

Prior to Mercer, Ms. Shan was a Vice President and Treasurer for both Marsh and McLennan Companies and Pitney Bowes Inc. and was also a Managing Director at J.P. Morgan.

By integrating comprehensive datasets and analytics across asset classes with client data, FactSet supports the workflow of both buy-side and sell-side clients.

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

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. |

The increase in ASV during fiscal 2017 was driven by growth across the Analytics and Content & Technology Solutions (“CTS”) product suites.

The number of new client additions is an important metric for FactSet as new clients typically come on with modest deployments and often experience substantial growth in subsequent years.

In terms of users, 4,910 net new users were added during fiscal 2017.

Financial information at the operating segment level is reviewed jointly by the Chief Executive Officer (“CEO”) and senior management.

This alignment reflects the Company’s approach to managing the business and transacting in the various markets in which FactSet serves by providing integrated global financial and economic information.

There are no intersegment or intercompany sales of the FactSet products and services.

Portfolio Management and Trading Solutions

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

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

Investment professionals want to focus on producing results.

FactSet Portfolio Analysis (“PA”) is a multi-asset class, global solution that helps investment professionals spend more time discovering alpha.

FactSet has historically focused on selling workstations to banks.

FactSet’s focus on engaging and enabling employees to do their best work, is central to FactSet’s ability to deliver the best insight and information to clients globally.

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

| | ● | Best Workplaces in Finance and Insurance from _FORTUNE_ |

| | ● | 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 |

As of August 31, 2017, employee headcount was 9,074, up 8.3% from a year ago.

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

Of FactSet’s total employees, 2,493 were located in the U.S., 1,322 in Europe and 5,259 in the Asia Pacific region.

Approximately 70% of the Company’s employees were involved in operational roles including content collection and software and systems engineering, 27% had a client\-focused role conducting sales and consulting services and the remaining 3% provided administrative support.

In May 2017, John W.

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 carries content from premier providers such as Australian Securities Exchange, Axioma, Inc., Bank of America Merrill Lynch, Barclays, Bureau van Dijk, Dow Jones & Company Inc., Information USA Inc., Interactive Data Corporation, LLC, Intex Solutions, Inc., London Stock Exchange, Morningstar, Inc., MSCI Inc., NASDAQ OMX, Northfield Information Services, Inc., NYSE Euronext Inc., ProQuote Limited, Russell Investments, S&P Global Inc., SIX Financial Thomson Reuters, Toyo Keizai Inc. and Tokyo Stock Exchange.

| Mark J. Hale | 44 | Executive Vice President, Chief Operating Officer | 2015 |

| Maurizio Nicolelli | 49 | Senior Vice President, Chief Financial Officer | 2009 |

_Mark_ _J._ _Hale_ _–_ _Executive Vice President,_ _Chief Operating Officer_.

Mr. Hale joined the Company in 1995 as a software engineer.

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

From time to time, [removed: FactSet] [added: the Company] is subject to legal proceedings, claims and litigation arising in the ordinary course of business, including intellectual property litigation.

Based on currently available information, [removed: FactSet’s] [added: the Company’s] management does not believe that the ultimate outcome of these unresolved matters against [removed: the Company,] [added: FactSet,] individually or in the aggregate, is likely to have a material adverse effect on the Company's consolidated financial position, its annual results of operations or its annual cash flows.

10-K 1 [removed: fds20170831_10k.htm] [added: fds20180831_10k.htm] FORM 10-K

For the fiscal year ended August 31, [removed: 2017][added: 2018]

[removed: ][added: ]

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

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

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

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

| | [removed: |] Emerging [removed: Growth Company] [added: growth 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 28, [removed: 2017,] [added: 2018,] 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: $6,862,902,916.][added: $7,767,417,390.]

The number of shares outstanding of the registrant’s common stock, as of October [removed: 25, 2017,] [added: 24, 2018,] was [removed: 39,109,746.][added: 38,037,295.]

Portions of the registrant’s definitive Proxy Statement dated October 30, [removed: 2017,] [added: 2018,] for the [removed: 2017] [added: 2018] Annual Meeting of Stockholders to be held on December [removed: 19, 2017,] [added: 18, 2018,] are incorporated by reference into Part III of this [removed: Annual] Report on Form 10-K where indicated.

For The Fiscal Year Ended August 31, [removed: 2017][added: 2018]

| | | | [removed: |] Page |

Risk Factors [removed: 12][added: 13]

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________________

__________________

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Properties [removed: 16][added: 18]

Legal Proceedings [removed: 16][added: 19]

| | | | |

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| | | | |

| | | | | |

| PART II | | | | [removed: |]

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities [removed: 18][added: 20]

Selected Financial Data [removed: 20][added: 22]

Management’s Discussion and Analysis of Financial Condition and Results of Operations [removed: 22][added: 24]

Quantitative and Qualitative Disclosures About Market Risk [removed: 42][added: 45]

Financial Statements and Supplementary Data [removed: 44][added: 47]

| | | | |

| | | | |

| | | | |

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| | | | |

| | | | |

| | | | |

| | | | | |

Controls and Procedures [removed: 85][added: 90]

| | | | |

| | | | |

Item 9B.

Other Information 90

| | | | |

| PART III | | | |

| | | | |

Item 10.

Directors, Executive Officers and Corporate Governance 91

| | | | |

Item 11.

Executive Compensation 91

| | | | |

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 91

| | | | |

Item 13.

Certain Relationships and Related Transactions, and Director Independence 92

| | | | |

Item 14.

Principal Accounting Fees and Services 92

| | | | |

| PART IV | | | |

| | | | |

Item 15.

Exhibits, Financial Statement Schedules 93

| | | | |

| Signatures | | | 95 |

Part I

| | | | | |

[removed: At] [added: As of] August 31, [removed: 2017, the Company] [added: 2018, we] leased approximately 202,000 square feet of office space at [removed: its] [added: our] headquarters in Norwalk, Connecticut.

Including new lease agreements executed during fiscal [removed: 2017, the] [added: 2018, our] Company’s worldwide leased [removed: office] space increased to approximately [removed: 1,143,000] [added: 1,750,000] square feet [removed: at] [added: as of] August 31, [removed: 2017,] [added: 2018,] up [removed: 71,000] [added: 607,000] square feet, or [removed: 7%,] [added: 53.1%,] from August 31, [removed: 2016,] [added: 2017] and includes properties at the following locations:

| Segment | [added: Leased] Location |

| [removed: Asia Pacific] | Hong [removed: Kong] [added: Kong, China] |

| [added: Asia Pacific] | Chennai, India |

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

Additionally, [removed: the Company has] [added: we have] data centers that support [removed: its] [added: our] technological infrastructure located in Manchester, New Hampshire, Piscataway, New Jersey and Reston, Virginia.

[removed: The Company believes] [added: We believe] the amount of leased [removed: office] space as of August 31, [removed: 2017] [added: 2018] is adequate for [removed: its] [added: our] current needs and that additional space is available for lease to meet any future needs.

On February 14, 2018, we entered into a new lease agreement to relocate our corporate headquarters to 45 Glover Avenue in Norwalk, Connecticut.

The new location will comprise approximately 173,000 square feet of office space.

We expect to take possession of the newly leased property on or around January 1, 2019, for fit-out purposes.

We will continue to occupy our existing headquarters space until the new headquarters is ready for occupancy, currently estimated to be in the second quarter of fiscal 2020.

| | |

| | Manchester, New Hampshire |

| | Norwalk, Connecticut |

| | Piscataway, New Jersey |

| | Reston, Virginia |

| | Sao Paulo, Brazil |

| | |

| | Johannesburg, South Africa |

| | Luxembourg City, Luxembourg |

| | |

| | Hyderabad, India |

| | Manila, the Philippines |

| | Shanghai, China |

The other locations listed in the table above are leased office space.

| | Tuscaloosa, Alabama |

_Market Information_ [removed: - FactSet] [added: – Our] common stock is listed on the New York Stock Exchange (“NYSE”) and the NASDAQ Stock Market under the symbol FDS.

The following table sets forth, for each fiscal period indicated, the high and low sales prices per share of [removed: the Company’s] [added: our] common stock as reported on the NYSE:

However, because many of [removed: FactSet’s] [added: our] shares of common stock are held by brokers and other institutions on behalf of stockholders, [removed: FactSet is] [added: we are] unable to estimate the total number of stockholders represented by these record holders.

The closing price of [removed: FactSet’s] [added: our] common stock on October [removed: 25, 2017,] [added: 24, 2018,] was [removed: $188.20] [added: $215.30] per share as reported on the NYSE.

_Dividends_ - [removed: In] [added: During] fiscal [added: years 2018 and] 2017, [removed: the Company’s] [added: our] Board of Directors declared the following [removed: dividends:][added: dividends on our common stock:]

| [removed: Declaration Date] [added: Year Ended] | | [removed: Dividends Per] [added: Dividends per] Share of Common [removed: Stock |] [added: Stock] | | [removed: Type] | [removed: Record Date] [added: Record Date] | | [removed: Total Amount (in thousands)] [added: _Total $ Amount_ __(in thousands)__] | | | [removed: Payment Date] [added: Payment Date] |

| [removed: August 10, 2017] [added: Fourth Quarter] | | $ | 0.56 | | [removed: Regular (cash) |] August 31, 2017 | | $ | 21,853 | | September 19, 2017 |

| [removed: May 5, 2017(1)] [added: Third Quarter] | | $ | 0.56 | | [removed: Regular (cash) |] May 31, 2017 | | $ | 21,951 | | June 20, 2017 |

| [removed: February 6, 2017] [added: Second Quarter] | | $ | 0.50 | | [removed: Regular (cash) |] February 28, 2017 | | $ | 19,709 | | March 21, 2017 |

| [removed: November 10, 2016] [added: First Quarter] | | $ | 0.50 | | [removed: Regular (cash) |] November 30, 2016 | | $ | 19,852 | | December 20, 2016 |

All [removed: of] the above cash dividends were paid from existing cash [removed: resources.][added: resources on a quarterly basis.]

Future dividend payments will depend on [removed: the Company’s] [added: our] earnings, capital requirements, financial condition and other factors considered relevant by [removed: FactSet,] [added: us,] and is subject to final determination by [removed: the Company’s] [added: our] Board of Directors.

There were no sales of unregistered equity securities [removed: in] [added: during] fiscal [removed: 2017.][added: 2018.]

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: 2017] [added: 2018] (in thousands, except per share data):

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

The annual changes for the five-year period shown in the graph below are based on the assumption that $100 had been invested in [removed: FactSet] [added: our] 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: 2012.][added: 2013.]

The total cumulative dollar returns shown on the graph represent the value that such investments would have had on August 31, [removed: 2017.][added: 2018.]

[removed: ][added: ]

| | | [removed: 2012 | | | |] 2013 | | | | 2014 | | | | 2015 | | | | 2016 | | | | 2017 | | | [added: | 2018 | | |]

| NYSE Composite Index | | $ | 100 | | | $ | [removed: 116] [added: 119] | | | $ | [removed: 139] [added: 110] | | | $ | [removed: 128] [added: 116] | | | $ | [removed: 135] [added: 128] | | | $ | [removed: 149] [added: 140] | |

| Dow Jones U.S. Financial Services Index | | $ | 100 | | | $ | [removed: 136] [added: 119] | | | $ | [removed: 162] [added: 124] | | | $ | [removed: 168] [added: 125] | | | $ | [removed: 170] [added: 157] | | | $ | [removed: 213] [added: 191] | |

_The information contained in the above graph shall not [removed: been] [added: be] 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 f__iled under the Securities Act_ _of 1933 or the Securities Exchange Act of 1934._

| 2018 | | | | | | | | | | | | | | | | |

| High | | $ | 200.31 | | | $ | 209.02 | | | $ | 217.36 | | | $ | 229.98 | |

| Low | | $ | 155.88 | | | $ | 183.89 | | | $ | 184.48 | | | $ | 195.69 | |

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

_Holders_ _of Record_ – As of October 24, 2018, we had approximately 177,777 holders of record of our common stock.

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

| Fiscal 2018 | | | | | | | | | | |

| First Quarter | | $ | 0.56 | | November 30, 2017 | | $ | 21,902 | | December 19, 2017 |

| Second Quarter | | $ | 0.56 | | February 28, 2018 | | $ | 21,799 | | March 20, 2018 |

| Third Quarter | | $ | 0.64 | | May 31, 2018 | | $ | 24,566 | | June 19, 2018 |

| Fourth Quarter | | $ | 0.64 | | August 31, 2018 | | $ | 24,443 | | September 18, 2018 |

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

| Fiscal 2017 | | | | | | | | | | |

| June 2018 | | | 49,975 | | | $ | 199.10 | | | | 49,975 | | | $ | 299,325 | |

| July 2018 | | | 214,503 | | | $ | 204.09 | | | | 214,503 | | | $ | 255,548 | |

| August 2018 | | | 65,000 | | | $ | 212.27 | | | | 65,000 | | | $ | 241,750 | |

| | | | 329,478 | | | | | | | | 329,478 | | | | | |

_Securities Authorized for Issuance_ _u__nder Equity Compensation Plans_ _–_ _see Part III of this_ _Report on Form 10-K_

| FactSet Research Systems Inc. | | $ | 100 | | | $ | 124 | | | $ | 154 | | | $ | 174 | | | $ | 154 | | | $ | 224 | |

| S&P 500 Index | | $ | 100 | | | $ | 123 | | | $ | 121 | | | $ | 133 | | | $ | 151 | | | $ | 178 | |

| 2016 | | | | | | | | | | | | | | | | |

| High | | $ | 177.28 | | | $ | 173.77 | | | $ | 160.34 | | | $ | 179.73 | |

| Low | | $ | 153.00 | | | $ | 135.95 | | | $ | 143.08 | | | $ | 149.39 | |

_Holders_ _of Record_ – As of October 25, 2017, there were approximately 156,748 holders of record of FactSet common stock.

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

| | _(1)_ | _On May_ _5__, 201__7__,_ _FactSet’s_ _Board of Directors approved a_ _12.0__% increase in the regular quarterly dividend beginning with the dividend payment in June 201__7_ _which was $0.5__6_ _per share, or $2.__24_ _per share per an__num._ |

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

| 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 | | | | | |

_Securities Authorized for 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 30, 2017, for its 2017 Annual Meeting of Stockholders.

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

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

The following selected financial data has been derived from [removed: FactSet’s] [added: our] consolidated financial statements.

This financial data should be read in conjunction with Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations and Item 8, Financial Statements and Supplementary Data, of this [removed: Annual] Report on Form 10-K.

| _(in thousands, except per share data)_ | | [removed: 2017] [added: 2018] | | | | [removed: 2016] [added: 2017] | | | | [removed: 2015] [added: 2016] | | | | [removed: 2014] [added: 2015] | | | | [removed: 2013] [added: 2014] | | |

| Revenues | | $ | [removed: 1,221,179] [added: 1,350,145] | | | $ | [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] | |

| Operating income | | $ | [removed: 352,135] [added: 366,204] | (1) | | $ | [removed: 349,676] [added: 352,135] | (4) | | $ | [removed: 331,918] [added: 349,676] | (7) | | $ | [removed: 302,219] [added: 331,918] | [added: (10)] | | $ | [removed: 269,419] [added: 302,219] | [removed: (10)] [added: (13)] |

| Provision for income taxes | | $ | [removed: 86,053] [added: 84,753] | | | $ | [removed: 122,178] [added: 86,053] | | | $ | [removed: 92,703] [added: 122,178] | | | $ | [removed: 91,921] [added: 92,703] | | | $ | [removed: 72,273] [added: 91,921] | |

| Net income | | $ | [removed: 258,259] [added: 267,085] | (2) | | $ | [removed: 338,815] [added: 258,259] | (5) | | $ | [removed: 241,051] [added: 338,815] | (8) | | $ | [removed: 211,543] [added: 241,051] | [added: (11)] | | $ | [removed: 198,637] [added: 211,543] | [removed: (11)] [added: (14)] |

| Diluted earnings per common share | | $ | [removed: 6.51] [added: 6.78] | (3) | | $ | [removed: 8.19] [added: 6.51] | (6) | | $ | [removed: 5.71] [added: 8.19] | (9) | | $ | [removed: 4.92] [added: 5.71] | [added: (12)] | | $ | [removed: 4.45] [added: 4.92] | [removed: (12)] [added: (15)] |

| Weighted average common shares (diluted) | | | [removed: 39,642] [added: 39,377] | | | | [removed: 41,365] [added: 39,642] | | | | [removed: 42,235] [added: 41,365] | | | | [removed: 42,970] [added: 42,235] | | | | [removed: 44,624] [added: 42,970] | |

| Cash dividends declared per common share | | $ | [removed: 2.12] [added: 2.40] | | | $ | [removed: 1.88] [added: 2.12] | | | $ | [removed: 1.66] [added: 1.88] | | | $ | [removed: 1.48] [added: 1.66] | | | $ | [removed: 1.32] [added: 1.48] | |

| _(in thousands)_ | | [removed: 2017] [added: 2018] | | | | [removed: 2016] [added: 2017] | | | | [removed: 2015] [added: 2016] | | | | [removed: 2014] [added: 2015] | | | | [removed: 2013] [added: 2014] | | |

| Cash and cash equivalents | | $ | [removed: 194,731] [added: 208,623] | | | $ | [removed: 228,407] [added: 194,731] | | | $ | [removed: 158,914] [added: 228,407] | | | $ | [removed: 116,378] [added: 158,914] | | | $ | [removed: 196,627] [added: 116,378] | |

| Accounts receivable, net of reserves | | $ | [removed: 148,331] [added: 156,639] | | | $ | [removed: 97,797] [added: 148,331] | | | $ | [removed: 95,064] [added: 97,797] | | | $ | [removed: 90,354] [added: 95,064] | | | $ | [removed: 73,290] [added: 90,354] | |

| Goodwill and intangible assets, net | | $ | [removed: 881,103] [added: 850,768] | | | $ | [removed: 546,076] [added: 881,103] | | | $ | [removed: 348,339] [added: 546,076] | | | $ | [removed: 327,463] [added: 348,339] | | | $ | [removed: 280,796] [added: 327,463] | |

| Total assets | | $ | [removed: 1,413,315] [added: 1,419,447] | | | $ | [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] | |

| Non-current liabilities | | $ | [removed: 652,485] [added: 672,413] | | | $ | [removed: 343,570] [added: 652,485] | | | $ | [removed: 65,307] [added: 343,570] | | | $ | [removed: 24,839] [added: 65,307] | | | $ | [removed: 30,165] [added: 24,839] | |

| Total stockholders’ equity | | $ | [removed: 559,691] [added: 525,900] | | | $ | [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: (1)] [added: (4)] | Operating income in fiscal 2017 [removed: includes] [added: included] pre-tax charges of $5.6 million related to modifications of certain share-based compensation [removed: grants] [added: grants,] $5.0 million related to restructuring actions [removed: initiated by the Company] and $7.4 million [removed: of other non-recurring expenses related primarily to the BISAM and FactSet Digital Solutions acquisitions.] [added: in acquisition-related expenses.] |

| [removed: (2)] [added: (5)] | [removed: Fiscal 2017 net] [added: Net] income [removed: includes] [added: in fiscal 2017 included] $4.2 million (after-tax) related to modifications of certain share-based compensation grants, $3.7 million (after-tax) related to restructuring actions [removed: initiated by the Company] and $5.5 million (after-tax) of [removed: other non-recurring expenses related primarily to the BISAM and FactSet Digital Solutions acquisitions.] [added: acquisition-related expenses.] Fiscal 2017 net income also [removed: includes] [added: included] a loss of $0.9 million (after-tax) from [removed: the] [added: a] final working capital adjustment related to [added: the] 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. |

| [removed: (3)] [added: (6)] | Diluted EPS [removed: for] [added: in] fiscal 2017 [removed: includes] [added: included] 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 [removed: the other non-recurring items related primarily to the BISAM and FactSet Digital Solutions acquisitions] [added: acquisition-related expenses] and $0.02 decrease from the working capital adjustment, partially offset by a $0.05 increase in diluted EPS from the income tax benefits. |

| [removed: (4)] [added: (7)] | Operating income in fiscal 2016 [removed: includes] [added: included] pre-tax charges of $4.6 million related primarily to legal matters, $2.8 million from restructuring actions [removed: initiated by the Company] and $1.8 million related to a change in the vesting of performance-based equity options. |

| [removed: (5)] [added: (8)] | [removed: Fiscal 2016 net] [added: Net] income [removed: includes] [added: in fiscal 2016 included] $3.3 million (after-tax) [removed: of non-recurring items] related primarily to legal matters, $2.0 million (after-tax) from restructuring [removed: actions initiated by the Company,] [added: actions,] $1.2 million (after-tax) related to a change in the vesting of performance-based equity instruments, [added: partially offset by $10.5 million of] income tax benefits [removed: of $10.5 million] primarily from the permanent reenactment of the U.S. Federal R&D [added: tax credit (“R&D] Tax [removed: Credit,] [added: Credit”),] finalizing 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: (6)] [added: (9)] | Diluted EPS [removed: for] [added: in] fiscal 2016 [removed: includes] [added: included] 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 [removed: 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: (7)] [added: (10)] | Operating income in fiscal 2015 [removed: includes] [added: included] pre-tax charges of $3.0 million related to the vesting of performance-based equity instruments and $3.2 million [added: related] primarily [removed: from] [added: to] changes in the senior leadership responsible for the Company’s sales force. |

| [removed: (8)] [added: (11)] | [removed: Fiscal 2015 net] [added: Net] income [removed: includes] [added: in fiscal 2015 included] $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 sales force and income tax benefits of $8.8 million primarily from the reenactment of the [removed: U.S. Federal] R&D Tax Credit in December 2014, [added: and] finalizing the fiscal 2014 tax returns and other discrete items. |

| [removed: (9)] [added: (12)] | Diluted EPS [removed: for] [added: in] fiscal 2015 [removed: includes] [added: included] the net effect of a $0.21 increase in diluted EPS from the income tax [removed: benefits] [added: 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 sales force. |

| [removed: (12)] [added: (15)] | Diluted EPS [removed: for] [added: in] fiscal [removed: 2013 includes] [added: 2014 included] the net effect of a [removed: $0.29] [added: $0.03] decrease [removed: from the vesting of performance-based options, partially offset by a $0.16 increase] in diluted EPS from the income tax [removed: benefits.] [added: benefits and $0.02 decrease from a change in the vesting of performance-based equity.] |

| (1) | Operating income in fiscal 2018 included pre-tax charges of $17.4 million from restructuring actions, $4.7 million related to other corporate actions including stock-based compensation acceleration and $4.9 million in legal matters. |

| (2) | Net income in fiscal 2018 included $13.8 million (after-tax) expense related to restructuring actions, $3.8 million (after-tax) expense related to other corporate actions including stock-based compensation acceleration, $3.4 million (after-tax) expense related to legal matters and $21.3 million of tax charges primarily related to the one-time deemed repatriation tax on foreign earnings. |

| (3) | Diluted earnings per share (“EPS”) in fiscal 2018 included a $0.35 decrease in diluted EPS from restructuring actions, a $0.10 detriment due to other corporate actions including stock-based compensation, a $0.09 decrease from legal matters and a $0.53 decrease from tax charges primarily related to the one-time deemed repatriation tax on foreign earnings. |

| | |

| (13) | Operating income in fiscal 2014 included pre-tax charges of $1.6 million related primarily to legal matters and $1.4 million related to a change in the vesting of performance-based equity options. |

| | |

| (14) | Net income in fiscal 2014 included $1.1 million (after-tax) primarily related to legal matters, $1.0 million (after-tax) of incremental expenses related to the vesting of performance-based equity instruments and income tax benefits of $0.6 million finalizing the fiscal 2013 tax returns and other discrete items. |

| | |

| (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. |

| (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 the fiscal 2012 tax returns. |

| Management’s Statement of Responsibility for Financial Statements | | [removed: 45] [added: 48] |

| Management’s Report on Internal Control over Financial Reporting | | [removed: 45] [added: 48] |

| Reports of Independent Registered Public Accounting [removed: Firms] [added: Firm] | | [removed: 46-47] [added: 49-50] |

| Consolidated Statements of Income for the years ended August 31, [removed: 2017, 2016] [added: 2018, 2017] and [removed: 2015] [added: 2016] | | [removed: 48] [added: 51] |

| Consolidated Statements of Comprehensive Income for the years ended August 31, [removed: 2017, 2016] [added: 2018, 2017] and [removed: 2015] [added: 2016] | | [removed: 49] [added: 52] |

| Consolidated Balance Sheets at August 31, [removed: 2017] [added: 2018] and [removed: 2016] [added: 2017] | | [removed: 50] [added: 53] |

| Consolidated Statements of Cash Flows for the years ended August 31, [removed: 2017, 2016] [added: 2018, 2017] and [removed: 2015] [added: 2016] | | [removed: 51] [added: 54] |

| Consolidated Statements of Changes in Stockholders’ Equity for the years ended August 31, [removed: 2017, 2016] [added: 2018, 2017] and [removed: 2015] [added: 2016] | | [removed: 52] [added: 55] |

| Notes to the Consolidated Financial Statements | | [removed: 53] [added: 56] |

| Schedule II – Valuation and Qualifying Accounts | | [removed: 87] [added: 93] |

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

In compliance with the Sarbanes-Oxley Act of 2002, FactSet assessed its internal control over financial reporting as of August 31, [removed: 2017,] [added: 2018] 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 [removed: Commission except for the internal controls of BI-SAM Technologies, FactSet Digital Solutions and Vermilion Holdings Limited which (in aggregate) constituted 4.8% of net assets (excluding goodwill and intangible assets) as of August 31, 2017 and 4.5% of revenues for the year then ended.][added: Commission.]

Based on this evaluation, management concluded that FactSet’s internal control over financial reporting was effective as of August 31, [removed: 2017.][added: 2018.]

Ernst & Young LLP, an independent registered public accounting firm, has audited the effectiveness of FactSet’s internal control over financial reporting and has issued a report on FactSet’s internal control over financial reporting, which is included in their report on [removed: page 46.][added: the subsequent page.]

| Chief Executive Officer | [removed: Senior] [added: Executive] Vice [removed: President,] [added: President and] Chief Financial Officer |

We have audited the accompanying consolidated balance sheets of FactSet Research Systems Inc. [added: (the Company)] as of August 31, [removed: 2017] [added: 2018] and [removed: 2016,] [added: 2017,] and the related consolidated statements of income, comprehensive income, [removed: stockholders'] [added: stockholders’] equity and cash flows for each of the three years in the period ended August 31, [removed: 2017.][added: 2018, and the related notes and financial statement schedule listed in the Index at Item 8 (collectively referred to as the “consolidated financial statements”).]

These financial statements [removed: and schedule] are the responsibility of the [removed: Company's] [added: Company’s] management.

Our responsibility is to express an opinion on [removed: these] [added: the Company’s] financial statements [removed: and schedule] based on our audits.

We conducted our audits in accordance with the standards of the [removed: Public Company Accounting Oversight Board (United States).][added: PCAOB.]

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material [removed: misstatement.][added: misstatement, whether due to error or fraud.]

[removed: An audit includes] [added: Such procedures included] examining, on a test basis, evidence [removed: supporting] [added: regarding] the amounts and disclosures in the financial statements.

[removed: An audit] [added: Our audits] also [removed: includes assessing] [added: included evaluating] the accounting principles used and significant estimates made by management, as well as evaluating the overall [added: presentation of the] financial [removed: statement presentation.][added: statements.]

In our opinion, the [added: consolidated] financial statements [removed: referred to above] present fairly, in all material respects, the [removed: consolidated] financial position of [removed: FactSet Research Systems Inc.] [added: the Company] at August 31, [removed: 2017] [added: 2018] and [removed: 2016,] [added: 2017,] and the [removed: consolidated] results of its operations and its cash flows for each of the three years in the period ended August 31, [removed: 2017,] [added: 2018,] 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 [removed: States), FactSet Research Systems Inc.'s] [added: States) (PCAOB), the Company’s] internal control over financial reporting as of August 31, [removed: 2017,] [added: 2018,] based on criteria established in Internal [removed: Control-Integrated] [added: Control – Integrated] Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 [removed: framework),] [added: framework)] and our report dated October 30, [removed: 2017] [added: 2018] expressed an unqualified opinion thereon.

Stamford, [removed: Connecticut][added: CT]

We have audited FactSet Research [removed: Systems] [added: System] Inc.’s [added: (the Company)] internal control over financial reporting as of August 31, [removed: 2017,] [added: 2018,] based on criteria established in Internal [removed: Control—Integrated] [added: Control - Integrated] Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).

[removed: FactSet Research Systems Inc.’s] [added: The Company’s] management is responsible for maintaining effective internal control over financial [removed: reporting,] [added: reporting] and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting.

We conducted our audit in accordance with the standards of the [removed: Public Company Accounting Oversight Board (United States).][added: PCAOB.]

In our opinion, [removed: FactSet Research Systems Inc.] [added: the Company] maintained, in all material respects, effective internal control over financial reporting as of August 31, [removed: 2017,] [added: 2018,] based on the COSO criteria.

We [removed: have] also [added: have] audited, in accordance with the standards of the Public Company Accounting Oversight Board (United [removed: States),] [added: States) (PCAOB),] the [added: 2018] consolidated [removed: balance sheets of FactSet Research Systems Inc. as of August 31, 2017 and 2016, and the related] [added: financial] statements of [removed: income, comprehensive income, stockholders' equity and cash flows for each of] the [removed: three years in the period ended August 31, 2017 of FactSet Research Systems Inc.] [added: Company] and our report dated October 30, [removed: 2017,] [added: 2018,] expressed an unqualified opinion thereon.

| | | Years ended August 31, | | | | | | | | | | | [added: | |]

| [removed: _(In] [added: _(__i__n] thousands, except per share data)_ | | [removed: 2017] [added: 2018] | | | | [removed: 2016] [added: 2017] | | | | [removed: 2015] [added: 2016] | | |

| Revenues | | $ | [removed: 1,221,179] [added: 1,350,145] | | | $ | [removed: 1,127,092] [added: 1,221,179] | | | $ | [removed: 1,006,768] [added: 1,127,092] | |

| Cost of services | | | [removed: 566,580] [added: 659,296] | | | | [removed: 487,409] [added: 566,580] | | | | [removed: 405,339] [added: 487,409] | |

| Selling, general and administrative | | | [removed: 302,464] [added: 324,645] | | | | [removed: 290,007] [added: 302,464] | | | | [removed: 269,511] [added: 290,007] | |

| Total operating expenses | | | [removed: 869,044] [added: 983,941] | | | | [removed: 777,416] [added: 869,044] | | | | [removed: 674,850] [added: 777,416] | |

| Operating income | | | [removed: 352,135] [added: 366,204] | | | | [removed: 349,676] [added: 352,135] | | | | [removed: 331,918] [added: 349,676] | |