FactSet Research Systems (FDS) 10-K risk factor changes: FY2019 vs FY2018

The following risks could materially and adversely affect our business, financial condition, cash flows, results of operations and [added: as a result,] the trading price of our common stock could decline.

[removed: Loss,] [added: _Loss,] corruption and misappropriation of data and information relating to clients and [removed: others][added: others_]

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

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

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 [removed: (“GDPR”)] which became effective May 25, [removed: 2018.][added: 2018, and California's Consumer Privacy Act, effective January 1, 2020.]

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

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

[removed: Successful] [added: _Successful] cyber-attacks and the failure of cyber-security systems and [removed: procedures][added: procedures_]

In providing our [removed: software-enabled] [added: digital-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 could suffer significant damage to our brand and [removed: reputation] [added: 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.

[removed: A] [added: _A] prolonged or recurring outage at our data centers and other business continuity disruptions at facilities could result in reduced service and the loss of [removed: clients][added: clients_]

Our computer operations, as well as our other business centers, and those of our suppliers and clients are vulnerable to interruption by fire, natural disaster, power loss, telecommunications failures, terrorist attacks, acts of war, civil unrest, Internet failures, computer [removed: viruses and] [added: viruses,] security breaches, and other events beyond our reasonable control.

Any [removed: such,] [added: such] losses or damages we incur could have a material adverse effect on our business.

[removed: Competition] [added: _Competition] in our industry may cause price reductions or loss of market [removed: share][added: share_]

Future competitive pricing pressures may result in decreased sales volumes and price reductions, resulting in lower [removed: revenues.][added: revenue.]

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

A continued shift to passive [removed: investing] [added: investing, resulting in an increased outflow to passively managed index funds,] could reduce demand for the services of active investment managers and consequently, the demand of our clients for our services.

[removed: A] [added: _A] decline in equity and/or fixed income returns may impact the buying power of investment management [removed: clients][added: clients_]

Approximately [removed: 83.9%] [added: 83.7%] of our ASV is derived from our investment management clients.

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

Each of these developments may result in lower demand [added: from investment managers] for our services and [removed: workstations from investment managers that] [added: workstations, which] could [added: negatively] affect our business.

[removed: Failure] [added: _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 [removed: products][added: products_]

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

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

Our investment banking clients that perform [removed: Mergers] [added: mergers] and [removed: Acquisitions (“M&A”)] [added: acquisitions ("M&A")] advisory work, capital markets services and equity research, account for approximately [removed: 16.1%] [added: 16.3%] of our ASV.

[removed: Volatility] [added: _Volatility] in the financial markets may delay the spending pattern of clients and reduce future ASV [removed: growth][added: growth_]

[removed: Additional] [added: _Additional] cost due to tax assessments resulting from ongoing and future audits by tax authorities as well as changes in tax [removed: laws][added: laws_]

Based upon a preliminary review of [removed: their request, it is possible that] the [removed: State] [added: Notice, the Company believes the Commonwealth] may assess sales [added: tax, interest] and [removed: use taxes,] underpayment penalties [removed: and interest,] on previously recorded sales transactions.

While [removed: we believe] [added: FactSet believes] that [removed: we] [added: it] will ultimately [removed: prevail,] [added: prevail] if [removed: we are required to pay an assessment,] the [added: Company is presented with a formal assessment; if FactSet does not prevail, the] amount could have a material impact on [removed: our] [added: the Company’s] consolidated financial position, cash flows and results of operations.

Changes in tax laws or the terms of tax [removed: treaties,] [added: treaties] in a jurisdiction where we are subject to tax could increase our taxes payable.

On December 22, 2017, the [added: U.S.] Tax Cuts and Jobs Act, [removed: (the "Act")] [added: ("TCJA")] was signed into law.

The [removed: Act enacts] [added: TCJA enacted] broad changes to the [removed: existing] U.S. Internal Revenue code, including reducing the federal corporate income tax rate from 35% to 21%, amongst many other complex provisions.

[removed: Failure] [added: _Failure] to identify, integrate, or realize anticipated benefits of acquisitions and strains on resources as a result of [removed: growth][added: growth_]

[removed: Failure] [added: _Failure] to enter into or renew contracts supplying new and existing data sets or products on competitive [removed: terms][added: terms_]

We have entered into third-party content agreements [removed: with] [added: of] varying lengths, which in some cases can be terminated on one year’s notice at predefined dates, and in other cases on shorter notice.

[removed: Inability] [added: _Inability] to hire and retain key qualified [removed: personnel][added: personnel_]

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

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

[removed: Third] [added: _Third] parties may claim we infringe upon their intellectual property rights or may infringe upon our intellectual property [removed: rights][added: rights_]

Responding to these claims may require us to enter into royalty and licensing agreements on [removed: favorable] [added: unfavorable] terms, incur litigation costs, enter into settlements, stop selling or redesign affected products, [added: or] pay damages and satisfy indemnification commitments with our clients or suppliers under contractual provisions of various license arrangements.

This includes data from client portfolios and strategies.

The direction of these trends can render our existing products less competitive, obsolete or unmarketable.

In August 2019, FactSet received a Notice of Intent to Assess (the “Notice”) additional sales taxes, interest and underpayment penalties from the Commonwealth of Massachusetts Department of Revenue relating to prior tax periods.

The Notice follows FactSet’s previously disclosed response to a letter from the Commonwealth requesting additional sales information.

The Company intends to contest any such assessment, if assessed, and continues to cooperate with the Commonwealth’s inquiry.

Due to uncertainty surrounding the assessment process, the Company is unable to reasonably estimate the ultimate outcome of this matter and, as such, has not recorded a liability as of August 31, 2019.

We rely on a complex network of internal controls to protect the privacy of data.

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

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

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.

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

As we continue to pursue selective acquisitions to support our business strategy, we seek to be a disciplined acquirer.

ITEM 1B.

UNRESOLVED STAFF COMMENTS

None.

| | [removed: ●] [added: •] | Executive Overview |

| | [removed: ●] [added: •] | Key Metrics |

| | [removed: ●] [added: •] | Results of Operations |

| | [removed: ●] [added: •] | Liquidity |

| | [removed: ●] [added: •] | Capital Resources |

| | [removed: ●] [added: •] | Foreign Currency |

| | [removed: ●] [added: •] | Off-Balance Sheet Arrangements |

| | [removed: ●] [added: •] | Share Repurchase Program |

| | [removed: ●] [added: •] | Contractual Obligations |

| | [removed: ●] [added: •] | Dividends |

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

| | [removed: ●] [added: •] | New Accounting Pronouncements |

| | [removed: ●] [added: •] | Market Trends |

| | [removed: ●] [added: •] | Forward-Looking Factors |

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

[removed: These professionals] [added: We currently serve financial professionals, which] include portfolio managers, investment research professionals, investment bankers, risk and performance analysts, [removed: and] wealth [removed: advisors.][added: advisors, and corporate clients.]

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

[removed: 2018] [added: Fiscal 2019] Year in Review

As of August 31, [removed: 2018,] [added: 2019, organic] annual subscription value [removed: (“ASV”)] [added: (“organic ASV”) plus professional services] totaled [removed: $1.39] [added: $1.48] billion, an increase of [removed: 5.8%] [added: 5.1%] over the prior [removed: year and 5.7% organically.][added: year.]

In addition, clients and users reached new highs of [removed: 5,142] [added: 5,574] and [removed: 91,897,] [added: 126,822,] respectively, in fiscal [removed: 2018.][added: 2019.]

[removed: We] [added: Over the last 12 months, we] returned [removed: $393.4] [added: $320.4] million to stockholders in the form of share repurchases and [removed: dividends during the fiscal year.][added: dividends.]

A client-centric approach [removed: has always been] [added: is] a key foundation of our success at [removed: FactSet.][added: the Company.]

[removed: We support] [added: Additionally,] our [removed: powerful] information and analytical applications [removed: with] [added: are supported by] a team of financial data and modeling experts.

Client satisfaction is [removed: a key metric by which] [added: critical to how] we measure the success of our service.

According to our global client satisfaction survey, greater than [removed: 95%] [added: 93%] of respondents were satisfied or very satisfied with FactSet’s support.

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

| _(in millions, except_ _per share [removed: data__,_] [added: data,_] _client and user counts)_ | | [removed: 2018] [added: 2019] | | | | [removed: 2017] [added: 2018] | | | | Change | | | [removed: |]

| Operating Income | | $ | [removed: 366.2] [added: 438.0] | | | $ | [removed: 352.1] [added: 366.2] | | | | [removed: 4.0] [added: 19.6] | % | [removed: |]

| Net Income | | $ | [removed: 267.1] [added: 352.8] | | | $ | [removed: 258.3] [added: 267.1] | | | | [removed: 3.4] [added: 32.1] | % | [removed: |]

| Diluted EPS | | $ | [removed: 6.78] [added: 9.08] | | | $ | [removed: 6.51] [added: 6.78] | | | | [removed: 4.1] [added: 33.9] | % | [removed: |]

| [removed: Clients(3)] [added: Clients(1)] | | | [removed: 5,142] [added: 5,574] | | | | [removed: 4,744] [added: 5,142] | | | | 8.4 | % | [removed: |]

| [removed: |] _(2)_ | [removed: _ASV grew_ _5.8% year over year, of which,_ _5.7%_ _represents organic ASV growth._] _Organic ASV [removed: excludes_ _ASV from_ _acquisitions] [added: excludes ASV from acquisitions] and [removed: dispositions_ _completed with__in] [added: dispositions completed within] the last [removed: 12_ _months and_ _the] [added: 12 months, the] effects [removed: of_ _foreign currency._] [added: of foreign currency, and professional services._] |

[added: Organic] Annual Subscription Value Growth

[removed: ASV] [added: | _(1)_ | _ASV] at any given point in time represents the forward-looking [removed: revenues] [added: revenue] for the next [removed: twelve] [added: 12] months from all subscription services currently being supplied to [removed: clients,] [added: clients] and excludes professional [removed: services fees billed in the last twelve months,] [added: service fees,] which are not subscription-based. [added: The professional service fees are $22.9 million and $21.6 million as of August 31, 2019 and 2018, respectively._ |]

As of August 31, [removed: 2018,] [added: 2019,] our [added: organic] ASV totaled [removed: $1.39] [added: $1.46] billion, up [removed: 5.7%] [added: 5.0%] organically over the prior year.

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

[removed: The increase in ASV was driven by] [added: In addition to revenue] growth [removed: in our] [added: amongst the] geographic [removed: segments and] [added: segments,] achievements [added: were also made] across each [removed: of our] workflow [removed: solutions] [added: solution] which include Research, [removed: Analytics,] [added: Analytics and Trading,] CTS, and Wealth.

Buy-side and sell-side ASV growth rates for the last 12 months were [removed: 5.4%] [added: 4.8%] and [removed: 7.3%] [added: 6.3%] respectively.

[removed: Buy-side clients account for 83.9%] [added: The remaining portion] of [removed: ASV, while the remainder] [added: ASV] is derived from sell-side firms that perform [removed: mergers and acquisitions] [added: M&A] advisory work, capital markets services and equity research.

Our total client count was [removed: 5,142] [added: 5,574] as of August 31, [removed: 2018,] [added: 2019,] representing a net increase of [removed: 398] [added: 432] clients in the last twelve months.

| | • | Business Developments |

For over 40 years, global financial professionals have utilized our content and multi-asset class solutions across each stage of the investment process.

Our goal is to provide a seamless user experience spanning idea generation, research, portfolio construction, trade execution, performance measurement, risk management, reporting, and portfolio analysis, in which we serve the front, middle, and back offices to drive productivity and improved performance.

Our flexible, open data and technology solutions can be implemented both across the investment portfolio lifecycle or as standalone components serving different workflows in the organization.

We are focused on growing our business throughout each of our three segments, the U.S., Europe, and Asia Pacific.

We primarily deliver insight and information through the workflow solutions of Research, Analytics and Trading, Content and Technology Solutions and Wealth.

We provide both insights on global market trends and intelligence on companies and industries, as well as capabilities to monitor portfolio risk and performance and to execute trades.

We combine dedicated client service with open and flexible technology offerings, such as a comprehensive data marketplace, a configurable mobile and desktop platform, digital portals and application programming interface (“APIs”).

Revenue for the fiscal year 2019 was $1.44 billion, an increase of 6.3% from the prior year comparable period, of which, 6.2% of the increase can be attributed to organic revenue growth.

Revenue growth can be attributed primarily to Analytics and Trading, CTS and Wealth due mainly to increased demand for our portfolio analytics solutions, core and premium data feeds and our wealth workstations.

Operating income grew 19.6% and diluted earnings per share ("EPS") increased 33.9% compared to the prior year period.

We won multiple awards, which included Best Data Provider to the Sell-Side, Best Performance Measurement and Attribution System Provider, and Best Client Reporting System at the Waters Technology Awards, Best Alternative Data Initiative and Best Data Analytics Provider at the Inside Market Data Awards.

We expanded our data offering within CTS, on the Open:FactSet Marketplace, which now includes over 100 content and solution sets, including new data feeds from Mastercard and IHS Markit.

Additionally, we launched a Global Robotics and Automation Index licensed to Sumitomo Mitsui Trust Asset Management Co., Ltd., marking our entry in the Japanese index mutual fund market.

In December 2018, we appointed Daniel Viens as Chief Human Resources Officer and in June 2019, we appointed Franck Gossieaux as Executive Vice President, Global Head of Sales and Client Solutions.

As part of the comprehensive value of FactSet’s solutions, consultants are versatile business people with knowledge of the financial markets and FactSet products.

Consultants work closely with clients advising how FactSet solutions can be best leveraged to enhance their efficiency across workflows.

We believe that these strong relationships help enable high rates of retention and expansion of client business.

| Revenue | | $ | 1,435.4 | | | $ | 1,350.1 | | | | 6.3 | % |

| Users | | | 126,822 | | | | 91,897 | | | | 38.0 | % |

| _(1)_ | _In the first quarter of_ _fiscal_ _2019, we changed our client count definition to include clients from the April 2017 acquisition of FactSet Digital Solutions Group ("FDSG")._ _The prior year client count was not restated to reflect this change._ |

| --- | --- |

| | | As of August 31, | | | | | | | | | | |

| _(in millions)_ | | 2019 | | | | 2018 | | | | Change | | |

| As reported ASV(1) | | $ | 1,458.0 | | | $ | 1,393.1 | | | | | |

| Currency impact to ASV | | | 5.3 | | | | — | | | | | |

| Organic ASV(2) | | $ | 1,463.3 | | | $ | 1,393.1 | | | | 5.0 | % |

| --- | --- |

| --- | --- |

Organic ASV at any given point in time represents the forward-looking revenue for the next 12 months from all subscription services currently being supplied to clients, excludes ASV from acquisitions and dispositions completed within the last 12 months, the effects of foreign currency, and professional services.

As of August 31, 2019, organic ASV plus professional services was $1.48 billion, an increase of 5.1%, compared to the prior year period.

The increase in year over year organic ASV was due to growth across all of our geographic segments with the majority of growth in the U.S., followed by Asia Pacific and Europe.

ASV growth from our workflow solutions was primarily driven by Analytics and Trading, CTS and Wealth.

The increase includes sales of products and solutions to new and existing clients, an annual price increase for both the majority of the U.S. and international clients, partially offset by cancellations due primarily to industry-wide cost pressures, firm consolidations and closures.

ASV growth in Analytics and Trading was primarily due to increased sales for our portfolio analytics solutions.

ASV growth in CTS was primarily driven by increased sales in core and premium data feeds while ASV growth in Wealth was mainly due to increased workstation sales.

As of August 31, 2019, ASV from the U.S. segment was $909.7 million, an increase of 4.7% from the prior year comparable period.

This increase was primarily from Analytics and Trading, CTS and Wealth, due to the increased demand for our portfolio analytics solutions, core and premium data feeds and wealth workstations.

ASV from the international operations was $548.3 million as of August 31, 2019, an increase of 4.6% over August 31, 2018.

International ASV represents 37.6% of total ASV as of August 31, 2019, remaining consistent with the prior year period.

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

We deliver insight and information to investment professionals through our analytics, service, content, and technology.

From streaming real-time data to historical information, including quotes, estimates, news and commentary, we offer proprietary and third-party content through desktop, web, mobile and off-platform solutions.

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.

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.

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

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.

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

Our industry-leading customer care is largely due to the talent of our employee population.

As of August 31, 2018, employee headcount was 9,571, up 5.5% from a year ago.

This increase in headcount was primarily in client-focused positions with dedication to client loyalty, supporting our recent global client retention rate of greater than 95% of ASV as of August 31, 2018.

Our consulting teams have been trained to listen to our clients’ needs and transfer this knowledge directly to the product development teams, helping us transform suggestions into new or enhanced product offerings.

Educating our clients is also an important component of our service.

Not only do we teach our users the nuances of our software and content offerings, but 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 forefront of financial modeling and analysis.

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

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

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

| 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._ |

| | _(3)_ | _In the second quarter of fiscal 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._ |

| | _(4)_ | _In the second quarter of fiscal 2017,_ _we_ _changed_ _our_ _user count definition to_ _include_ _users from workstations previously not captured due to certain product bundling_ _and_ _users of the StreetAccount web product. The prior year user count was restated to reflect this change for comparison purposes._ |

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

As of August 31, 2018, ASV from our U.S. operations was $868.7 million, an increase of 5.3% organically from a year ago.

ASV from international operations was $524.4 million, an increase of 6.3% organically from a year ago.

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.

In the second quarter of fiscal 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.

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.

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

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

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

| Revenues | | $ | 1,350,145 | | | $ | 1,221,179 | | | | 10.6 | % | | $ | 1,221,179 | | | $ | 1,127,092 | | | | 8.3 | % |

We conduct business outside the U.S. in several currencies including the [added: Euro,] British Pound Sterling, [removed: Euro,] Indian Rupee, [removed: Japanese Yen] and Philippine Peso.

As of August 31, [removed: 2018,] [added: 2019,] we maintained the following foreign currency forward contracts to hedge our exposures:

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

| | [removed: _●_] [added: _•_] | _Indian Rupee_ – foreign currency forward contracts to hedge approximately [removed: 75%] [added: 50%] of our Indian Rupee exposure through the [added: end of the] third quarter of fiscal [removed: 2019] [added: 2020,] and [removed: 50%] [added: 25%] of [removed: its] [added: our Indian Rupee] exposure [removed: from the fourth quarter of fiscal 2019] through the [removed: end of the second] [added: fourth] quarter of fiscal 2020. |

| | [removed: _●_] [added: _•_] | _Euro_ – foreign currency forward contracts to hedge approximately [added: 75% of our Euro exposure through the first quarter of fiscal 2020,] 50% of our Euro exposure [added: from the second quarter] through the third quarter of fiscal [removed: 2019.] [added: 2020, and 25% of our Euro exposure through the fourth quarter of fiscal 2020.] |

| | [removed: _●_] [added: _•_] | _British Pound Sterling_ – foreign currency forward contracts to hedge approximately [removed: 50%] [added: 75%] of our British Pound sterling exposure through the [added: first quarter of fiscal 2020, 50% of our British Pound Sterling exposure from the second quarter through the] third quarter of fiscal [removed: 2019.] [added: 2020, and 25% of our British Pound Sterling exposure through the fourth quarter of fiscal 2020.] |

As of August 31, [removed: 2018,] [added: 2019,] the gross notional value of foreign currency forward contracts to purchase Philippine Pesos [removed: with U.S. dollars was PHP 2.8 billion, to purchase] [added: and] Indian Rupees with U.S. dollars was [removed: Rs.][added: ₱1.4 billion and Rs.1.4 billion, respectively.]

[removed: 3.6 billion,] [added: The gross notional value of foreign currency forward contracts] to purchase [removed: Euros with] U.S. dollars [removed: was € 22.0 million] [added: with Euros] and [removed: to purchase] British Pound Sterling [removed: with U.S. dollars] was [removed: £14.0 million.][added: €35.7 million and £20.5 million, respectively.]

[removed: 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] [added: The] gains and losses on foreign currency forward contracts mitigate the variability in operating expenses associated with currency movements.

A sensitivity analysis was performed based on the estimated fair value of all foreign currency forward contracts outstanding at August 31, [removed: 2018.][added: 2019.]

If the U.S. dollar had been 10% weaker, the fair value of outstanding foreign currency forward contracts would have increased by [removed: $7.3] [added: $10.8] million, which would have had an immaterial impact on our Consolidated Balance [removed: Sheet.][added: Sheets.]

If we had no hedges in place as of August 31, [removed: 2018,] [added: 2019,] a hypothetical 10% weaker U.S. dollar against all foreign currencies from the quoted foreign currency exchange rates at August 31, [removed: 2018,] [added: 2019,] would result in a decrease in operating income by [removed: $28.8] [added: $28.0] million over the next 12 months.

A hypothetical 10% weaker U.S. dollar against all foreign currencies at August 31, [removed: 2018] [added: 2019] would increase the fair value of total assets by [removed: $65.3] [added: $66.9] million and equity by [removed: $61.2] [added: $60.1] million.

Cash and Cash Equivalents [added: and Investments]

The fair market value of our cash and [added: cash equivalents and] investments at August 31, [removed: 2018,] [added: 2019,] was [removed: $237.9] [added: $385.6] million.

Our investments consist of both mutual funds and certificates of [removed: deposits] [added: deposit] as both are part of our investment strategy.

These mutual funds and certificates of [removed: deposits] [added: deposit] are included as [removed: _Investments_ (short-term)] [added: Investments (current assets)] on our [removed: Consolidated Balance Sheet] [added: consolidated balance sheets] 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 year.

The mutual funds and certificates [added: of deposit] are held for investment [added: purposes] and are not considered debt securities.

It is anticipated that the fair market value of our cash and [added: cash equivalents and] investments will continue to be immaterially affected by fluctuations in interest rates.

[removed: Because] [added: As] we have a restrictive investment policy, our financial exposure to fluctuations in interest rates is expected to remain low.

We do not believe that the value or liquidity of our cash and [added: cash equivalents and] investments have been significantly impacted by current market events.

As of August 31, [removed: 2018,] [added: 2019,] the fair value of our long-term debt was $575.0 million, which approximated its carrying [removed: amount and was determined based on quoted market prices for debt with a similar maturity.][added: amount.]

[removed: It is anticipated that the fair market value of our debt will continue to be immaterially affected by fluctuations in interest rates and we] [added: We] do not believe that the value of our debt has been significantly impacted by current market events.

The debt bears interest on the outstanding principal amount at a rate equal to the daily LIBOR rate plus a spread using a debt leverage pricing grid currently at [removed: 1.00%.][added: 0.875%.]

During fiscal years [removed: 2018, 2017] [added: 2019, 2018] and [removed: 2016,] [added: 2017,] we recorded interest expense of [removed: $15.9] [added: $19.8] million, [removed: $8.4] [added: $15.9] million and [removed: $3.0] [added: $8.4] million, respectively, on our outstanding debt amounts.

Assuming all terms of our outstanding long-term debt remained the same, a hypothetical 25 basis point change (up or down) in the one-month LIBOR rate would result in a $1.4 million change [removed: in] [added: to] our annual interest expense.

A loss on derivatives of $1.8 million was recorded into operating income during fiscal 2019, compared to a gain of $3.1 million in fiscal 2018.

The application of a floating interest rate equal to the daily LIBOR rate plus a spread using a debt leverage pricing grid, approximates the current market rate for similar instruments.

It is anticipated that the fair market value of our debt will continue to be immaterially affected by fluctuations in interest rates.

Over the next 12 months, our non-U.S. dollar denominated revenues expected to be recognized are estimated to be $92.8 million while our non-U.S. dollar denominated expenses are estimated to be $324.5 million, which translates into a net foreign currency exposure of $231.7 million.

There were no other outstanding foreign currency forward contracts as of August 31, 2018.

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

[removed: These professionals] [added: We currently serve financial professionals, which] include portfolio managers, investment research professionals, investment bankers, risk and performance analysts, [removed: and] wealth [removed: advisors.][added: advisors, and corporate clients.]

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

We are dual listed on the New York Stock Exchange (“NYSE”) and the NASDAQ Stock Market (“NASDAQ”) under the symbol “FDS.” Fiscal [removed: 2018] [added: 2019] marked our [removed: 40th] [added: 41st] year of [removed: operation] [added: operations] and while much has changed in [removed: our] [added: the] market and [removed: technologies,] [added: in technology,] our focus has always been to provide [removed: the best in class] [added: best-in-class] products and exceptional client service.

[removed: ][added: ]

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

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

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

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

To execute on our [removed: 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 [removed: key workflows] [added: workflow solutions] of Research, [removed: Analytics,] [added: Analytics and Trading,] Wealth, and Content and Technology Solutions.

[removed: Our Research Solutions (“Research”) workflow offers a powerful data solution that] [added: FactSet] combines [added: the] global coverage, deep history, and transparency with [removed: thousands of] [added: over 1,000] FactSet-sourced and third-party databases integrated in one flexible platform.

Analytics [added: and Trading] Solutions

Our Analytics [added: and Trading] Solutions [removed: (“Analytics”)] workflow [added: (“Analytics and Trading”)] addresses processes around [removed: risk,] [added: portfolio analytics, risk management and] performance [added: measurement] and [removed: reporting.][added: attribution.]

Our Content and Technology Solutions [removed: (“CTS”)] workflow [added: (“CTS”)] is focused on delivering value to our clients in the way they want to consume it.

Our symbology links and aggregates a variety of content sources to ensure consistency, transparency, and data integrity across [removed: your] [added: a client’s] business.

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

We provide solutions across asset classes and at nearly every stage of the investment process by utilizing our workstations, [removed: powerful] analytics, proprietary content, data feeds and portfolio services.

The buy-side annual subscription value (“ASV”) growth rate for fiscal [removed: 2018] [added: 2019] was [removed: 5.4%.][added: 4.8%.]

Buy-side clients accounted for [removed: 83.9%] [added: 83.7%] of ASV as of August 31, [removed: 2018.][added: 2019.]

The sell-side ASV growth rate for fiscal [removed: 2018] [added: 2019] was [removed: 7.3%.][added: 6.3%.]

Sell-side clients accounted for [removed: 16.1%] [added: 16.3%] of ASV as of August 31, [removed: 2018.][added: 2019.]

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

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

As of August 31, [removed: 2018,] [added: 2019,] ASV was [removed: $1.39] [added: $1.46] billion, up [removed: $74.4 million or 5.7% organically] from [added: $1.39 billion] a year ago.

[removed: This increase in] ASV [removed: was driven by] growth [removed: amongst our geographic segments and achievements across each of] [added: from] our workflow solutions [removed: which include Research, Analytics, CTS,] [added: was primarily driven by Analytics] and [added: Trading, CTS and] Wealth.

During fiscal [removed: 2018,] [added: 2019,] we added [removed: 398] [added: 432 net] new clients, increasing the number of clients by 8.4% over the prior year.

We added [removed: 3,051] [added: 34,925 net] new users during fiscal [removed: 2018,] [added: 2019,] leading to a healthy progression in the number of users in both our buy-side and sell-side clients.

[removed: ][added: ]

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

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

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

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

The U.S. segment has offices in [removed: fourteen] [added: 15 locations, within 13] states throughout the U.S., including our corporate headquarters in Norwalk, [removed: Connecticut] [added: Connecticut,] as well as two additional offices located in Brazil and Canada.

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

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

Segment [removed: revenues reflect] [added: revenue reflects] direct sales to clients based in their respective geographic locations.

Each segment records compensation [removed: expense, including] [added: expense (including] stock-based [removed: compensation,] [added: compensation),] amortization of intangible assets, depreciation of furniture and fixtures, amortization of leasehold improvements, communication costs, professional fees, rent expense, travel, [removed: marketing,] office and other direct expenses.

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

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

The following charts depict [removed: revenues] [added: revenue] related to our reportable segments.

For over 40 years, global financial professionals have utilized our content and multi-asset class solutions across each stage of the investment process.

Our goal is to provide a seamless user experience spanning idea generation, research, portfolio construction, trade execution, performance measurement, risk management, reporting, and portfolio analysis, in which we serve the front, middle, and back offices to drive productivity and improved performance.

Our flexible, open data and technology solutions can be implemented both across the investment portfolio lifecycle or as standalone components serving different workflows in the organization.

We are focused on growing our business throughout each of our three segments, the U.S., Europe, and Asia Pacific.

We primarily deliver insight and information through the workflow solutions of Research, Analytics and Trading, Content and Technology Solutions and Wealth.

We provide both insights on global market trends and intelligence on companies and industries, as well as capabilities to monitor portfolio risk and performance and to execute trades.

We combine dedicated client service with open and flexible technology offerings, such as a comprehensive data marketplace, a configurable mobile and desktop platform, digital portals and application programming interface (“APIs”).

As a premier financial solutions provider for the global financial community, we provide workflow solutions and leading analytical applications across the investment lifecycle to create an open and scalable platform.

Our Research Solutions workflow (“Research”) focuses on company analysis, idea generation, and research management.

The tools within Research provide solutions to analyze public and private companies, generate ideas and discover opportunities with our proprietary data.

Research also allows users to monitor the global markets, to gain industry and market insights, and to collaborate on and share information across teams.

Analytics and Trading also focuses on client reporting, portfolio construction, trade execution and order management.

The applications within Analytics and Trading are modularized and deployed to fulfill both targeted and holistic needs in the front and middle offices.

Analytics and Trading integrates our clients’ proprietary data along with FactSet and third-party content to bring actionable insights to the portfolio management process.

Analytics and Trading tools are accessible through a variety of mediums, including the FactSet workstation and application programming interfaces.

Our Wealth Solutions workflow (“Wealth”) is specific to the wealth management industry and creates offerings that enable wealth professionals across an entire enterprise, including home office, advisory, and client engagement.

Wealth empowers wealth managers to demonstrate value to clients and prospects while protecting and growing their assets with FactSet’s combined solution set of portfolio analytics, market monitoring tools, multi-asset class research and customized client facing digital solutions.

Our Research Management Solutions products enable our wealth management clients to increase collaboration and communication between Home Office and Advisory functions within the firm and deliver consistent and scalable messaging to the clients of the advisor.

FactSet delivers comprehensive solutions to sell-side clients including workstation, proprietary and third-party content, productivity tools for Microsoft® Office, FactSet Web and Mobile, and FactSet Partners for research authoring and publishing.

Our focus remains on expanding the depth of content offered and increasing workflow efficiency for investment banking, private equity, corporate and research firms.

In the first quarter of fiscal 2019, we changed our client count definition to include clients from the April 2017 acquisition of FDSG.

The prior year client count was not restated to reflect this change.

ASV Growth

As of August 31, 2019, organic ASV was $1.46 billion, up $70.2 million or 5.0% from a year ago.

This increase in organic ASV was due to growth across all of our geographic segments with the majority of growth in the U.S., followed by Asia Pacific and Europe.

We believe this alignment helps to better manage the business and serve client needs, as each segment requires financial and economic information specific to their respective markets.

In December 2018, we appointed Daniel Viens as Chief Human Resources Officer.

In May 2019, we announced that John W.

Wiseman, the Company’s Global Head of Sales and Client Solutions, would step down from his position on June 1, 2019, remaining at the company until August 31, 2019 to assist during the transition.

In the same announcement, effective June 1, 2019, we appointed Franck A.R. Gossieaux as the Company's new Global Head of Sales and Client Solutions.

We make every effort to assure that, where reasonable, alternative sources are available.

We are not dependent on any one third-party data supplier in order to meet the needs of our clients.

No single vendor or data supplier represented more than 10% of FactSet's total data costs during fiscal 2019, with the exception for one vendor, which is a supplier of risk models and portfolio optimizer data to FactSet and represented 11% of FactSet’s data costs in fiscal 2019.

We are embarking on a set of programs that will increasingly move our systems and applications to cloud computing platforms.

In addition, select workloads are migrating to diverse cloud computing regions utilizing premier, market-leading Cloud providers.

We intend to continue to invest in the development of new products and enhancements that will allow us to respond quickly to market changes and efficiently meet the needs of our clients.

He has earned the right to use the Chartered Financial Analyst designation.

Ms. Shan also has a Master of Business Administration from Cornell University’s SC Johnson College of Business.

Mr. Gossieaux held multiple senior leadership roles at FactSet in both Europe and North America including Senior Vice President of Americas Sales, Senior Vice President of EMEA Sales, and Senior Vice President of International Investment Management.

Mr. Gossieaux received a Bachelor of Science in Economics from the University Pantheon-Assas (Sorbonne-Assas) in Paris.

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

We deliver insight and information to investment professionals through our analytics, service, content, and technology.

From streaming real-time data to historical information, including quotes, estimates, news and commentary, we offer proprietary and third-party content through desktop, web, mobile and off-platform solutions.

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.

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

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

This workflow offering is comprised of Core Applications, including Universal Screening, Company & Security Analytics, Industry and Markets, Filings, Ownership, Research, News and our Research Management Solutions (“RMS”).

Our Analytics workflow provides investment professionals with in-depth insight, powerful analytics, and comprehensive datasets integrated seamlessly into their portfolios.

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

PA is a multi-asset class interactive global solution that includes a flexible, multi-tile interface of reports and charts to enable a user to make smarter decisions.

MAC risk models analyze risk factors across different asset types and classes.

We have enhanced our Analytics workflow offering by leveraging client-requested functionality such as fixed income optimization and the Duration Times Spread attribution model.

Additionally, included in the Analytics workflow is our portfolio management and trading solutions which focus on workflows that are specific for the front office serving traders and portfolio managers.

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

These products are aimed at large asset managers, hedge funds and mid-market customers to provide a combination of automated and intelligent trading workflows.

Our Wealth Solutions (“Wealth”) workflow creates solutions that are specific to the wealth management industry and helps with investment portfolio management, advisory services, financial planning and other financial services.

Our Wealth workflow offerings include providing end-to-end solutions, focusing on non-equity content and single security analytics, portfolio and risk analytics, and digital strategy.

The CTS workflow also includes direct access to insight and information outside of the workstation through cloud-based application program interfaces and white label solutions.

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.

We focus on the buy-side workflow across all firm and user types.

We are a market leader on the sell-side and we are continuing to expand beyond investment banking into various other parts of banking institutions.

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

We believe that future growth may be derived from the breadth of solutions we provide to the sell-side across our geographic segments and workflow solutions.

Though historically we have focused on selling workstations to banks, over the last few years our emphasis has shifted to focus on selling more differentiated product offerings outside the workstation.

We are also expanding our banking user base to commercial banking, equity and fixed income research teams, quantitative analysis groups, compliance and regulatory divisions and sales and trading teams.

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

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 make every effort, when reasonable, to locate alternative sources, to ensure that we are not dependent on any one third- party data supplier.

No single vendor or data supplier represented 10% or more of our total data expenses in any fiscal year presented.

Several years ago, we launched Project NextGen to evolve away from large mainframe computers to a more distributed environment powered by a vast array of smaller, faster and more cost-effective machines.

In addition, we maintain a vast private wide area network that provides a high-speed direct link between the client’s local network and the data content and powerful applications found on our mainframe machines.

We expect to appropriate a similar percentage of our workforce and associated expenses in future years to continue to develop new products and enhancements, respond quickly to market changes and meet the needs of our clients efficiently.

He holds the Chartered Financial Analyst designation and is a member of the CFA Institute.

_Edward Baker-Greene – Senior Vice President, Chief Human Resources Officer_.

Mr. Baker-Greene joined FactSet in June 2015 from Voya Financial, formerly ING, U.S., where he was Head of Human Resources for Retirement Solutions, Operations, and Information Technology.

Previously, Mr. Baker-Greene worked at Fidelity Investments for 13 years.

At Fidelity, he was a part of the Personal and Workplace Investing division, where he held roles in business and human resources capacities, including Senior Vice President/Managing Director, Relationship Management.

ITEM 4.

MINE SAFETY DISCLOSURES

Not applicable.

Part II

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

[removed: For] [added: For] the fiscal year ended August 31, [removed: 2018][added: 2019]

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

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

[removed: ][added: ]

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

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

Indicate by check mark whether the registrant has submitted [removed: electronically and posted on its corporate Web site, if any,] [added: electronically,] every Interactive Data File required to be submitted [removed: and posted] pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit [removed: and post] such files).

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

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

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: 2018,] [added: 2019,] 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: $7,767,417,390.][added: $8,808,676,952.]

The number of shares outstanding of the registrant’s common stock, as of October 24, [removed: 2018,] [added: 2019,] was [removed: 38,037,295.][added: 37,944,709.]

Portions of the registrant’s definitive Proxy Statement dated October 30, [removed: 2018,] [added: 2019,] for the [removed: 2018] [added: 2019] Annual Meeting of Stockholders to be held on December [removed: 18, 2018,] [added: 17, 2019,] are incorporated by reference into Part III of this Report on Form 10-K where indicated.

For The Fiscal Year Ended August 31, [removed: 2018][added: 2019]

[added: |] PART I [added: | | |]

| | | [removed: |] Page |

Business [removed: 4][added: 3]

Risk Factors [removed: 13][added: 11]

UNITED STATES

| --- | --- |

| Title of each class | Trading Symbols(s) | Name of each exchange on which registered |

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

| Common Stock, $0.01 Par Value | FDS | New York Stock Exchange NASDAQ Global Select Market |

| --- | --- |

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

Item 1B.

Unresolved Staff Comments 16

Item 2.

Properties 16

Item 3.

Legal Proceedings 18

Item 4.

Mine Safety Disclosures 18

| PART II | | |

Item 5.

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 19

Item 6.

Selected Financial Data 21

Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations 23

Item 7A.

Quantitative and Qualitative Disclosures About Market Risk 46

Item 8.

Financial Statements and Supplementary Data 49

Item 9.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 97

Item 9A.

Controls and Procedures 97

10-K 1 fds20180831_10k.htm FORM 10-K

UNITED STATES

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

Securities registered pursuant to Section 12(g) of the Act: None

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

| | | | |

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

Item 10.

Directors, Executive Officers and Corporate Governance 98

Item 11.

Executive Compensation 98

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 98

Item 13.

Certain Relationships and Related Transactions, and Director Independence 99

Item 14.

Principal Accounting Fees and Services 99

| PART IV | | |

Item 15.

Exhibits, Financial Statement Schedules 100

Item 16.

Form 10-K Summary 101

| Signatures | | 102 |

Part I

In the Current Report on Form 8-K filed on September 6, 2018, the Company reported in connection with her hiring that Helen L.

Shan, its Executive Vice President and Chief Financial Officer, would be granted an annual equity award with a grant date value of $400,000 in conjunction with the Company’s fiscal 2019 equity grant and that such grant was estimated to be made in early November 2018.

In fact, this grant is expected to be made in November 2019 in connection with the Company’s 2019 equity grants at the same time as all other annual option grants are made to executives in calendar year 2019.

None.

| | | | |

Item 2.

Properties 18

Item 3.

Legal Proceedings 19

As of August 31, [removed: 2018,] [added: 2019,] we leased approximately 202,000 square feet of office space at our headquarters in Norwalk, Connecticut.

We [removed: expect to take] [added: took] possession of the newly leased property on [removed: or around] January 1, 2019, for fit-out purposes.

Including new lease agreements executed during fiscal [removed: 2018,] [added: 2019,] our Company’s worldwide leased space increased to approximately [removed: 1,750,000] [added: 1,860,000] square feet as of August 31, [removed: 2018,] [added: 2019,] up [removed: 607,000] [added: 110,000] square feet, or [removed: 53.1%,] [added: 6.3%,] from August 31, [removed: 2017] [added: 2018] and includes properties at the following locations:

We have data content collection offices located in [removed: Hyderabad, India and Manila,] [added: India,] the [removed: Philippines,] [added: Philippines and Latvia,] which benefit all our operating segments.

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

The other locations listed in the table [removed: above] [added: below] are leased office space.

The leases expire on various dates through [removed: 2031.][added: 2035.]

We believe the amount of leased space as of August 31, [removed: 2018] [added: 2019] is adequate for our current needs and that additional space [removed: is] [added: can be] available [removed: for lease] to meet any future needs.

[removed: | PART II | | | |][added: Part II]

Not applicable.

| | | | |

Item 5.

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 20

Item 6.

Selected Financial Data 22

Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations 24

Item 7A.

Quantitative and Qualitative Disclosures About Market Risk 45

Item 8.

Financial Statements and Supplementary Data 47

| [removed: 2018] [added: 2018] | | | | | | | | | | | | | | | | |

_Holders_ _of Record_ – As of October 24, [removed: 2018,] [added: 2019,] we had approximately [removed: 177,777] [added: 199,571] holders of record of our common stock.

The closing price of our common stock on October 24, [removed: 2018,] [added: 2019,] was [removed: $215.30] [added: $253.22] per share as reported on the NYSE.

_Dividends_ - During fiscal years [removed: 2018] [added: 2019] and [removed: 2017,] [added: 2018,] our Board of Directors declared the following dividends on our common stock:

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

| Fiscal 2018 | | | | | | | | | | | [added: | |]

| First Quarter | | $ | 0.56 | | [added: |] November 30, 2017 | | $ | 21,902 | | [added: |] December 19, 2017 |

| Second Quarter | | $ | 0.56 | | [added: |] February 28, 2018 | | $ | 21,799 | | [added: |] March 20, 2018 |

| Third Quarter | | $ | 0.64 | | [added: |] May 31, 2018 | | $ | 24,566 | | [added: |] June 19, 2018 |

| Fourth Quarter | | $ | 0.64 | | [added: |] August 31, 2018 | | $ | 24,443 | | [added: |] September 18, 2018 |

| First Quarter | | $ | [removed: 0.50] [added: 0.64] | | [added: |] November 30, [removed: 2016] [added: 2018] | | $ | [removed: 19,852] [added: 24,372] | | [added: |] December [removed: 20, 2016] [added: 18, 2018] |

| Second Quarter | | $ | [removed: 0.50] [added: 0.64] | | [added: |] February 28, [removed: 2017] [added: 2019] | | $ | [removed: 19,709] [added: 24,385] | | [added: |] March [removed: 21, 2017] [added: 19, 2019] |

| Third Quarter | | $ | [removed: 0.56] [added: 0.72] | | [added: |] May 31, [removed: 2017] [added: 2019] | | $ | [removed: 21,951] [added: 27,506] | | [added: |] June [removed: 20, 2017] [added: 18, 2019] |

| Fourth Quarter | | $ | [removed: 0.56] [added: 0.72] | | [added: |] August [removed: 31, 2017] [added: 30, 2019] | | $ | [removed: 21,853] [added: 27,445] | | [added: |] September 19, [removed: 2017] [added: 2019] |

There were no sales of unregistered equity securities during fiscal [removed: 2018.][added: 2019.]

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: 2018 (in thousands, except per share data):][added: 2019:]

| [removed: Period] [added: Period] | | [removed: Total] [added: Total] number of shares [removed: purchased] [added: purchased(1)] | | | | [removed: Average] [added: Average] price paid per [removed: share] [added: share] | | | | [removed: Total] [added: Total] number [removed: of shares purchased as part] of [removed: publicly announced] [added: shares purchased as part of publicly announced] plans [removed: or programs] [added: or programs] | | | | [removed: Maximum] [added: Maximum] number of [removed: shares (or] [added: shares (or] approximate dollar [removed: value) that may yet be purchased under] [added: value) that may yet be purchased under] the plans [removed: or programs (1)] [added: or programs(2)] | | |

| [removed: _(1)_] | [added: _(2)_ |] _Repurchases_ _may [removed: b__e] [added: be] made from time to time in the open market and privately negotiated transactions, subject to market conditions._ [removed: _No minimum] [added: _There is no defined] number of shares to be repurchased [removed: has been fixed. There is no] [added: over a specified] timeframe [removed: to complete] [added: through] the [added: life of the share] repurchase [removed: program and it] [added: program. It] is expected that share repurchases will be paid using existing and future cash generated by operations._ |

[removed: _Securities] [added: Securities] Authorized for [removed: Issuance_ _u__nder] [added: Issuance under] Equity Compensation [removed: Plans_ _–_ _see] [added: Plans – see] Part III of [removed: this_ _Report] [added: this Report] on Form [removed: 10-K_][added: 10-K]

The annual changes for the five-year period shown in the graph below [removed: are based on the assumption that] [added: assume] $100 had been invested in 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: 2013.][added: 2014.]

The total cumulative dollar returns shown on the graph represent the value that such investments would have had on August 31, [removed: 2018.][added: 2019.]

[removed: ][added: ]

| FactSet Research Systems Inc. | | $ | 100 | | | $ | 124 | | | $ | [removed: 154] [added: 140] | | | $ | [removed: 174] [added: 123] | | | $ | [removed: 154] [added: 180] | | | $ | [removed: 224] [added: 214] | |

| Dow Jones U.S. Financial Services Index | | $ | 100 | | | $ | [removed: 119] [added: 104] | | | $ | [removed: 124] [added: 105] | | | $ | [removed: 125] [added: 132] | | | $ | [removed: 157] [added: 161] | | | $ | [removed: 191] [added: 155] | |

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

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

| 2019 | | | | | | | | | | | | | | | | |

| High | | $ | 237.29 | | | $ | 237.95 | | | $ | 284.32 | | | $ | 305.38 | |

| Low | | $ | 210.11 | | | $ | 188.31 | | | $ | 228.43 | | | $ | 266.06 | |

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

| Fiscal 2019 | | | | | | | | | | | | |

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

_(in thousands, except per share data)_

| June 2019 | | | 28,421 | | | $ | 285.92 | | | | 25,000 | | | $ | 292,465 | (3) |

| July 2019 | | | 102,629 | | | $ | 283.86 | | | | 102,500 | | | $ | 263,370 | |

| August 2019 | | | 90,242 | | | $ | 275.02 | | | | 90,000 | | | $ | 238,619 | |

| | | | 221,292 | | | | | | | | 217,500 | | | | | |

| | _(1)_ | _Includes 217,500 shares purchased under the existing stock repurchase program, as well as 3,792 shares repurchased from employees to cover their cost of taxes upon vesting of restricted stock._ |

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

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

| | _(3)_ | _The amount included in the Maximum number of shares that may yet be purchased under the plans or programs column for June 2019, includes a $210.0 million expansion of the existing share repurchase program as approved by the Board of Directors of FactSet on June 24, 2019._ |

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

Stock Performance Graph

| | | 2014 | | | | 2015 | | | | 2016 | | | | 2017 | | | | 2018 | | | | 2019 | | |

| S&P 500 Index | | $ | 100 | | | $ | 98 | | | $ | 108 | | | $ | 123 | | | $ | 145 | | | $ | 146 | |

| NYSE Composite Index | | $ | 100 | | | $ | 92 | | | $ | 97 | | | $ | 108 | | | $ | 118 | | | $ | 115 | |

| --- | --- |

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

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

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

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

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

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

| 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 | | | | | |

Stock Performance Graph

| | | 2013 | | | | 2014 | | | | 2015 | | | | 2016 | | | | 2017 | | | | 2018 | | |

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

| NYSE Composite Index | | $ | 100 | | | $ | 119 | | | $ | 110 | | | $ | 116 | | | $ | 128 | | | $ | 140 | |

| _(in thousands, except per share data)_ | | [removed: 2018] [added: 2019] | | | | [removed: 2017] [added: 2018] | | | | [removed: 2016] [added: 2017] | | | | [removed: 2015] [added: 2016] | | | | [removed: 2014] [added: 2015] | | |

| [removed: Revenues] [added: Revenue] | | $ | [removed: 1,350,145] [added: 1,435,351] | | | $ | [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] | |

| Operating income | | $ | [removed: 366,204] [added: 438,035] | (1) | | $ | [removed: 352,135] [added: 366,204] | (4) | | $ | [removed: 349,676] [added: 352,135] | (7) | | $ | [removed: 331,918] [added: 349,676] | (10) | | $ | [removed: 302,219] [added: 331,918] | (13) |

| Provision for income taxes | | $ | [removed: 84,753] [added: 69,175] | | | $ | [removed: 86,053] [added: 84,753] | | | $ | [removed: 122,178] [added: 86,053] | | | $ | [removed: 92,703] [added: 122,178] | | | $ | [removed: 91,921] [added: 92,703] | |

| Net income | | $ | [removed: 267,085] [added: 352,790] | (2) | | $ | [removed: 258,259] [added: 267,085] | (5) | | $ | [removed: 338,815] [added: 258,259] | (8) | | $ | [removed: 241,051] [added: 338,815] | (11) | | $ | [removed: 211,543] [added: 241,051] | (14) |

| Diluted earnings per common share | | $ | [removed: 6.78] [added: 9.08] | (3) | | $ | [removed: 6.51] [added: 6.78] | (6) | | $ | [removed: 8.19] [added: 6.51] | (9) | | $ | [removed: 5.71] [added: 8.19] | (12) | | $ | [removed: 4.92] [added: 5.71] | (15) |

| Weighted average common shares (diluted) | | | [removed: 39,377] [added: 38,873] | | | | [removed: 39,642] [added: 39,377] | | | | [removed: 41,365] [added: 39,642] | | | | [removed: 42,235] [added: 41,365] | | | | [removed: 42,970] [added: 42,235] | |

| Cash dividends declared per common share | | $ | [removed: 2.40] [added: 2.72] | | | $ | [removed: 2.12] [added: 2.40] | | | $ | [removed: 1.88] [added: 2.12] | | | $ | [removed: 1.66] [added: 1.88] | | | $ | [removed: 1.48] [added: 1.66] | |

Consolidated Balance [removed: Sheet] [added: Sheets] Data

| _(in thousands)_ | | [removed: 2018] [added: 2019] | | | | [removed: 2017] [added: 2018] | | | | [removed: 2016] [added: 2017] | | | | [removed: 2015] [added: 2016] | | | | [removed: 2014] [added: 2015] | | |

| Cash and cash equivalents | | $ | [removed: 208,623] [added: 359,799] | | | $ | [removed: 194,731] [added: 208,623] | | | $ | [removed: 228,407] [added: 194,731] | | | $ | [removed: 158,914] [added: 228,407] | | | $ | [removed: 116,378] [added: 158,914] | |

| Accounts receivable, net of reserves | | $ | [removed: 156,639] [added: 146,309] | | | $ | [removed: 148,331] [added: 156,639] | | | $ | [removed: 97,797] [added: 148,331] | | | $ | [removed: 95,064] [added: 97,797] | | | $ | [removed: 90,354] [added: 95,064] | |

| Goodwill and intangible assets, net | | $ | [removed: 850,768] [added: 806,280] | | | $ | [removed: 881,103] [added: 850,768] | | | $ | [removed: 546,076] [added: 881,103] | | | $ | [removed: 348,339] [added: 546,076] | | | $ | [removed: 327,463] [added: 348,339] | |

| Total assets | | $ | [removed: 1,419,447] [added: 1,560,130] | | | $ | [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] | |

| Non-current liabilities | | $ | [removed: 672,413] [added: 668,951] | | | $ | [removed: 652,485] [added: 672,413] | | | $ | [removed: 343,570] [added: 652,485] | | | $ | [removed: 65,307] [added: 343,570] | | | $ | [removed: 24,839] [added: 65,307] | |

| Total stockholders’ equity | | $ | [removed: 525,900] [added: 672,256] | | | $ | [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: (1)] [added: (4)] | 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. |

| [removed: (2)] [added: (5)] | 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. |

| [removed: (3)] [added: (6)] | 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. |

| [removed: (4)] [added: (7)] | Operating income in fiscal 2017 included pre-tax charges of $5.6 million related to modifications of certain share-based compensation grants, $5.0 million related to restructuring actions and $7.4 million in acquisition-related expenses. |

| [removed: (5)] [added: (8)] | Net income 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 and $5.5 million (after-tax) of acquisition-related expenses. Fiscal 2017 net income also included a loss of $0.9 million (after-tax) from a final working capital adjustment related to 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: (6)] [added: (9)] | Diluted EPS in fiscal 2017 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 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: (7)] [added: (10)] | Operating income in fiscal 2016 included pre-tax charges of $4.6 million related primarily to legal matters, $2.8 million from restructuring actions and $1.8 million related to a change in the vesting of performance-based equity options. |

| [removed: (8)] [added: (11)] | Net income in fiscal 2016 included $3.3 million (after-tax) related primarily to legal matters, $2.0 million (after-tax) from restructuring actions, $1.2 million (after-tax) related to a change in the vesting of performance-based equity instruments, partially offset by $10.5 million of income tax benefits primarily from the permanent reenactment of the U.S. Federal R&D tax credit (“R&D Tax 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: (9)] [added: (12)] | Diluted EPS in fiscal 2016 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 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: (10)] [added: (13)] | Operating income in fiscal 2015 included pre-tax charges of $3.0 million related to the vesting of performance-based equity instruments and $3.2 million related primarily to changes in the senior leadership responsible for the Company’s sales force. |

| [removed: (11)] [added: (14)] | Net income 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 R&D Tax Credit in December 2014, and finalizing the fiscal 2014 tax returns and other discrete items. |

| [removed: (12)] [added: (15)] | Diluted EPS in fiscal 2015 included the net effect of a $0.21 increase in diluted EPS from the income tax benefits, partially offset by a $0.05 decrease from the vesting of performance-based equity instruments and a $0.05 decrease from the changes in the senior leadership responsible for the Company’s sales force. |

| (1) | Operating income in fiscal 2019 included pre-tax charges of $8.0 million, primarily related to $4.3 million in severance costs, $8.7 million related to other corporate actions including stock-based compensation acceleration, professional fees related to infrastructure upgrade activities and a one-time adjustment related to data costs and occupancy costs, partially offset by $5.0 million in non-core transaction related revenue. |

| (2) | Net income in fiscal 2019 included $6.3 million (after-tax) expenses, primarily related to $3.5 million (after-tax) in severance costs, $6.8 million (after-tax) related to other corporate actions including stock-based compensation acceleration, professional fees related to infrastructure upgrade activities and a one-time adjustment related to data costs and occupancy costs, partially offset by $4.0 million (after-tax) in non-core transaction related revenue. |

| (3) | Diluted earnings per share (“EPS”) in fiscal 2019 was reduced by $0.15 per share, primarily related to $0.09 in severance costs, $0.16 related to other corporate actions including stock-based compensation acceleration, professional fees related to infrastructure upgrade activities and a one-time adjustment related to data costs and occupancy costs, partially offset by $0.10 in non-core transaction related revenue. |

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| | |

| (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. |

| (15) | Diluted EPS in fiscal 2014 included the net effect of a $0.03 decrease in diluted EPS from the income tax benefits and $0.02 decrease from a change in the vesting of performance-based equity. |

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

| Management’s Statement of Responsibility for Financial Statements | [removed: | 48] [added: 50] |

| Management’s Report on Internal Control over Financial Reporting | [removed: | 48] [added: 50] |

| Reports of Independent Registered Public Accounting Firm | [removed: | 49-50] [added: 51] |

| Consolidated Statements of Income for the years ended August 31, [removed: 2018, 2017] [added: 2019, 2018] and [removed: 2016 |] [added: 2017] | [removed: 51] [added: 54] |

| Consolidated Statements of Comprehensive Income for the years ended August 31, [removed: 2018, 2017] [added: 2019, 2018] and [removed: 2016 |] [added: 2017] | [removed: 52] [added: 55] |

| Consolidated Balance Sheets at August 31, [removed: 2018] [added: 2019] and [removed: 2017 |] [added: 2018] | [removed: 53] [added: 56] |

| Consolidated Statements of Cash Flows for the years ended August 31, [removed: 2018, 2017] [added: 2019, 2018] and [removed: 2016 |] [added: 2017] | [removed: 54] [added: 57] |

| Consolidated Statements of Changes in Stockholders’ Equity for the years ended August 31, [removed: 2018, 2017] [added: 2019, 2018] and [removed: 2016 |] [added: 2017] | [removed: 55] [added: 58] |

| Notes to the Consolidated Financial Statements | [removed: | 56] [added: 59] |

| Financial Statement Schedule: | | [removed: |]

| Schedule II – Valuation and Qualifying Accounts | [removed: | 93] [added: 100] |

In compliance with the Sarbanes-Oxley Act of 2002, FactSet assessed its internal control over financial reporting as of August 31, [removed: 2018] [added: 2019] and issued a report (see below).

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

Based on this evaluation, management concluded that FactSet’s internal control over financial reporting was effective as of August 31, [removed: 2018.][added: 2019.]

| /s/ F. PHILIP SNOW | [added: |] /s/ [removed: Helen] [added: HELEN] L. [removed: Shan] [added: SHAN] |

| F. Philip Snow | [added: |] Helen L. Shan |

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

[removed: Report] [added: Report] of Independent Registered Public Accounting [removed: Firm][added: Firm]

[removed: The] [added: To the] Board of Directors and Stockholders of FactSet Research Systems Inc.

We have audited FactSet Research System Inc.’s (the Company) internal control over financial reporting as of August 31, [removed: 2018,] [added: 2019,] based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of August 31, [removed: 2018,] [added: 2019,] based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the [removed: 2018] [added: 2019] consolidated financial statements of the Company and our report dated October 30, [removed: 2018,] [added: 2019,] expressed an unqualified opinion thereon.

We have audited the accompanying consolidated balance sheets of FactSet Research Systems Inc. (the Company) as of August 31, [removed: 2018] [added: 2019] and [removed: 2017,] [added: 2018,] and the related consolidated statements of income, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended August 31, [removed: 2018,] [added: 2019,] and the related notes and financial statement schedule listed in the Index at Item 8 (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at August 31, [removed: 2018] [added: 2019] and [removed: 2017,] [added: 2018,] and the results of its operations and its cash flows for each of the three years in the period ended August 31, [removed: 2018,] [added: 2019,] in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of August 31, [removed: 2018,] [added: 2019,] based on criteria established in Internal Control [removed: –] [added: -] Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated October 30, [removed: 2018] [added: 2019] expressed an unqualified opinion thereon.

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

| [removed: _(__i__n] [added: _(in] thousands, except per share data)_ | | [removed: 2018] [added: 2019] | | | | [removed: 2017] [added: 2018] | | | | [removed: 2016] [added: 2017] | | |

| [removed: Revenues] [added: Revenue] | | $ | [removed: 1,350,145] [added: 1,435,351] | | | $ | [removed: 1,221,179] [added: 1,350,145] | | | $ | [removed: 1,127,092] [added: 1,221,179] | |

| Cost of services | | | [removed: 659,296] [added: 663,446] | | | | [removed: 566,580] [added: 659,296] | | | | [removed: 487,409] [added: 566,580] | |

| Selling, general and administrative | | | [removed: 324,645] [added: 333,870] | | | | [removed: 302,464] [added: 324,645] | | | | [removed: 290,007] [added: 302,464] | |

| Total operating expenses | | | [removed: 983,941] [added: 997,316] | | | | [removed: 869,044] [added: 983,941] | | | | [removed: 777,416] [added: 869,044] | |

| Operating income | | | [removed: 366,204] [added: 438,035] | | | | [removed: 352,135] [added: 366,204] | | | | [removed: 349,676] [added: 352,135] | |

| Other [removed: (expense)] [added: comprehensive] income | | | | | | | | | | | | | [added: | | | | | | | | | | | | | | 33,833 | | | | 33,833 | |]

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

| Interest [removed: (expense),] [added: expense,] net of interest income | | | [removed: (14,366] [added: (16,070] | ) | | | [removed: (6,600] [added: (14,366] | ) | | | [removed: (1,136] [added: (6,600] | ) |

| Total other [removed: (expense) income] [added: expense] | | | [removed: (14,366] [added: (16,070] | ) | | | [removed: (7,823] [added: (14,366] | ) | | | [removed: 111,317] [added: (7,823] | [added: )] |

| Income before income taxes | | | [removed: 351,838] [added: 421,965] | | | | [removed: 344,312] [added: 351,838] | | | | [removed: 460,993] [added: 344,312] | |

| Provision for income taxes | | | [removed: 84,753] [added: 69,175] | | | | [removed: 86,053] [added: 84,753] | | | | [removed: 122,178] [added: 86,053] | |

| Net income | | $ | [removed: 267,085] [added: 352,790] | | | $ | [removed: 258,259] [added: 267,085] | | | $ | [removed: 338,815] [added: 258,259] | |

| October 30, 2019 | | October 30, 2019 |

October 30, 2019

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of FactSet Research Systems Inc.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

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

| | | Measurement of income tax provision |

| Description of the Matter | | As discussed in Note 3 and 17 of the consolidated financial statements, the Company serves international markets and is subject to income taxes in the U.S. and numerous foreign jurisdictions, which affect the Company’s provision for income taxes. The tax provision is an estimate based on management’s understanding of current enacted tax laws and tax rates of each tax jurisdiction and the use of subjective allocation methodologies to allocate taxable income to tax jurisdictions based upon the structure of the Company’s operations and customer arrangements. For the year-ended August 31, 2019, the Company recognized a consolidated provision for income taxes of $69.2 million with $55.8 million related to its U.S. operations and $13.4 million related to its non-U.S. operations. Management’s calculation of the provision for income taxes was significant to our audit because the provision for income taxes involved subjective estimation and complex audit judgement related to the evaluation of tax laws, including the methods used to allocate taxable income, and the amounts and disclosures are material to the financial statements. |

| How We Addressed the Matter in Our Audit | | We obtained an understanding, evaluated the design and tested the operating effectiveness of internal controls over management’s calculation of its provision for income taxes. For example, we tested controls over management’s evaluation of the allocation methodologies and management’s review of the assumptions and data utilized in determining the allocation of income to applicable tax jurisdictions. Among other audit procedures performed, we evaluated the reasonableness of management’s allocation methodologies by analyzing the methodology based on the Company’s structure, operations and current tax law. We recalculated income tax expense using management’s methodology and agreed the data used in the calculations to the Company’s underlying books and records. We involved our tax professionals to evaluate the application of tax law to management’s allocation methodologies and tax positions. This included assessing the Company’s correspondence with the relevant tax authorities and evaluating third-party reports and advice obtained by the Company. We also performed a sensitivity analysis to evaluate the effect from changes in management’s allocation methodologies and assumptions. We have evaluated the Company’s income tax disclosures included in Note 17 of the consolidated financial statements in relation to these matters. |

October 30, 2019

| Other expenses | | | | | | | | | | | | |

| Cash and cash equivalents | | $ | 359,799 | | | $ | 208,623 | |

| Net income | | $ | 352,790 | | | $ | 267,085 | | | $ | 258,259 | |

| Other, net | | | (3,827 | ) | | | (11,537 | ) | | | 1,613 | |

| | | Common Stock | | | | | | | | Additional | | | | Treasury Stock | | | | | | | | | | | | Accumulated Other | | | | Total | | |

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

| _(in thousands, except share data)_ | | Shares | | | | Par Value | | | | Paid-in Capital | | | | Shares | | | | Amount | | | | Retained Earnings | | | | Comprehensive Loss | | | | Stockholders’ Equity | | |

| Balance as of September 1, 2016 | | | 51,150,978 | | | $ | 512 | | | $ | 623,195 | | | | 11,112,753 | | | $ | (1,321,700 | ) | | $ | 1,283,927 | | | $ | (68,553 | ) | | $ | 517,381 | |

| Net income | | | | | | | | | | | | | | | | | | | | | | | 258,259 | | | | | | | | 258,259 | |

| Vesting of restricted stock | | | 132,194 | | | | | | | | | | | | 49,771 | | | | (7,847 | ) | | | | | | | | | | | (7,847 | ) |

| Tax benefits from share-based payment arrangements | | | | | | | | | | | 10,331 | | | | | | | | | | | | | | | | | | | | 10,331 | |

| Balance as of August 31, 2017 | | | 51,845,132 | | | $ | 518 | | | $ | 741,748 | | | | 12,822,100 | | | $ | (1,606,678 | ) | | $ | 1,458,823 | | | $ | (34,720 | ) | | $ | 559,691 | |

| Net income | | | | | | | | | | | | | | | | | | | | | | | 267,085 | | | | | | | | 267,085 | |

| Other comprehensive loss | | | | | | | | | | | | | | | | | | | | | | | | | | | (16,719 | ) | | | (16,719 | ) |

| Vesting of restricted stock | | | 26,599 | | | | | | | | | | | | 8,070 | | | | (1,514 | ) | | | | | | | | | | | (1,514 | ) |

| Stock-based compensation expense | | | | | | | | | | | 31,517 | | | | | | | | | | | | | | | | | | | | 31,517 | |

| Dividends declared | | | | | | | | | | | | | | | | | | | | | | | (92,710 | ) | | | | | | | (92,710 | ) |

| Balance as of August 31, 2018 | | | 39,264,849 | | | $ | 393 | | | $ | 667,531 | | | | 1,072,263 | | | $ | (213,428 | ) | | $ | 122,843 | | | $ | (51,439 | ) | | $ | 525,900 | |

| Net income | | | | | | | | | | | | | | | | | | | | | | | 352,790 | | | | | | | | 352,790 | |

| Other comprehensive loss | | | | | | | | | | | | | | | | | | | | | | | | | | | (23,821 | ) | | | (23,821 | ) |

| Vesting of restricted stock | | | 85,401 | | | | 1 | | | | (1 | ) | | | 31,644 | | | | (7,241 | ) | | | | | | | | | | | (7,241 | ) |

| Repurchases of common stock | | | | | | | | | | | | | | | 882,445 | | | | (213,130 | ) | | | | | | | | | | | (213,130 | ) |

| Stock-based compensation expense | | | | | | | | | | | 32,400 | | | | | | | | | | | | | | | | | | | | 32,400 | |

| Dividends declared | | | | | | | | | | | | | | | | | | | | | | | (103,710 | ) | | | | | | | (103,710 | ) |

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

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

_*_ _Includes the cumulative effect of adoption of accounting standards primarily due to both the adoption of the new revenue recognition standard (ASC 606) resulting in a cumulative increase to retained earnings related to certain fulfillment costs and the accounting standard update related to the TCJA providing for the reclassification from accumulated other comprehensive loss to retained earnings for stranded tax effects.

See Notes 3 and 4 for additional information._

For over _40_ years, global financial professionals have utilized the Company’s content and multi-asset class solutions across each stage of the investment process.

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

| | | |

| | |

| October 30, 2018 | October 30, 2018 |

October 30, 2018

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

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

| Deferred taxes | | | 9,716 | | | | 7,412 | |

| Deferred taxes | | | 21,190 | | | | 24,892 | |

| Loss (gain) on sale of business | | | — | | | | 1,223 | | | | (112,453 | ) |

| Other working capital accounts, net | | | 152 | | | | 132 | | | | 6 | |

| Proceeds from sale of business, net | | | — | | | | — | | | | 153,137 | |

| Debt issuance costs | | | — | | | | (438 | ) | | | (12 | ) |

| Cash and cash equivalents at beginning of period | | | 194,731 | | | | 228,407 | | | | 158,914 | |

| Balance, beginning of year | | $ | 518 | | | $ | 512 | | | $ | 503 | |

| Retirement of Treasury shares | | | (133 | ) | | | — | | | | — | |

| Balance, end of year | | $ | 393 | | | $ | 518 | | | $ | 512 | |

| ADDITIONAL PAID-IN CAPITAL | | | | | | | | | | | | |

| Balance, beginning of year | | $ | 741,748 | | | $ | 623,195 | | | $ | 542,355 | |

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

| Balance, end of year | | $ | 667,531 | | | $ | 741,748 | | | $ | 623,195 | |

| TREASURY STOCK | | | | | | | | | | | | |

| Balance, beginning of year | | $ | (1,606,678 | ) | | $ | (1,321,700 | ) | | $ | (988,873 | ) |

| Retirement of Treasury shares | | | 1,697,205 | | | | — | | | | — | |

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

| Purchases of common stock upon restricted stock vesting | | | (1,514 | ) | | | (7,847 | ) | | | (4,544 | ) |

| Balance, end of year | | $ | (213,428 | ) | | $ | (1,606,678 | ) | | $ | (1,321,700 | ) |

| RETAINED EARNINGS | | | | | | | | | | | | |

| Balance, beginning of year | | $ | 1,458,823 | | | $ | 1,283,927 | | | $ | 1,021,651 | |

| Retirement of Treasury Stock | | | (1,510,355 | ) | | | — | | | | — | |

| Balance, end of year | | $ | 122,843 | | | $ | 1,458,823 | | | $ | 1,283,927 | |

| Balance, beginning of year | | $ | (34,720 | ) | | $ | (68,553 | ) | | $ | (44,052 | ) |

| Balance, end of year | | $ | (51,439 | ) | | $ | (34,720 | ) | | $ | (68,553 | ) |

| Balance, beginning of year | | $ | 559,691 | | | $ | 517,381 | | | $ | 531,584 | |

| Balance, end of year | | $ | 525,900 | | | $ | 559,691 | | | $ | 517,381 | |

1.

From streaming real-time data to historical information, including quotes, estimates, news and commentary, FactSet offers proprietary and third-party content through desktop, web, mobile, and off-platform solutions.

The Company’s 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.

With recent acquisitions, FactSet has continued to expand its solutions across the investment lifecycle from idea generation to performance and client reporting.

2.

None.

| | | | |

Item 9A.

Controls and Procedures 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

There have been no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fourth quarter of fiscal [removed: 2018] [added: 2019] that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B.

OTHER INFORMATION

None.

PART III

The information required by this item relating to our directors and nominees, relating to compliance with Section 16(a) of the Securities Act of 1934, and relating to our Audit Committee is included under the captions “Corporate Governance” and “Section 16(a) Beneficial Ownership Reporting Compliance” in the definitive Proxy Statement dated October 30, [removed: 2018,] [added: 2019,] and all such information is incorporated herein by reference.

The guidelines, charters and code of ethics are also available in print free of charge to any stockholder who submits a written request to our Investor Relations department at our corporate headquarters at 601 Merritt 7, Norwalk, [removed: Connecticut 06851.][added: CT 06851 prior to January 1, 2020 and 45 Glover Avenue Norwalk, CT 06850.]

The information required by this item relating to compensation is included under the captions “Executive Compensation,” “Compensation Discussion and Analysis,” “Compensation and Talent Committee Report,” “Director Compensation Program,” including “Equity Compensation,” and “Director Compensation Table” of the definitive Proxy Statement dated October 30, [removed: 2018,] [added: 2019,] and all such information is incorporated herein by reference.

The information required by this item relating to security ownership of certain beneficial owners and management is included under the caption “Security Ownership of Certain Beneficial Owners and Management”, in the definitive Proxy Statement dated October 30, [removed: 2018,] [added: 2019,] and such information is incorporated herein by reference.